Daily updates on climate change and the global economy.

Economy 1 Aug 2018 US fiscally reckless

US borrowing most since financial crisis“The Treasury Department predicted in a report Monday that the government’s borrowing needs for the second half of 2018 will be $769 billion — the highest its borrowed since 2008 during the financial crisis.

“Bloomberg reports that Treasury foresees issuing $329 billion in net marketable debt between July and the end of September, and another $440 billion between October and the end of the year. The total $769 billion comes in at the highest borrowing estimate since $1.1 trillion between July and December of 2008 in the middle of the financial crisis.

“The net marketable debt the Treasury expects to issue from July through September is also the fourth-largest total for that quarter and far higher than was estimated earlier this year.”


“Before 2030, we could have trillion-dollar annual interest payments. Interest rates have been low until now, but that is changing. As rates go up, we have to pay more on new debt and on all accumulated debt.

The amount we pay in interest on the debt is set to triple over the next ten years. But if interest rates rise just 1 point higher than expected, the government will owe an extra $1.9 trillion over 10 years.”


“In the longer term, the cut will further denude the US government of revenues at a time when an ageing population is pushing up the cost of Social Security and Medicare.”


“It is crucial for banks to maintain sufficient loss-absorbing capital buffers to weather the next economic downturn. Research shows, however, that bank capital levels are still too low. It is particularly important for regulators to address this issue promptly given the economy’s position in the business cycle.”


“A widening in credit spreads means that investors require additional returns to hold corporate bonds — indicating that there is more risk and that economic conditions are expected to deteriorate. In a note earlier this month, Crossborder Capital said that wider spreads are not just a risk for the United States, but also to other international markets, “such as European high-yield and emerging markets credits” that “could be sucked into the vortex.””


“Mexico’s economic output shrank slightly in the second quarter as a decline in industrial production offset gains in services.”


“The rolling power blackouts in the [Venezuelan] state of Zulia pile more misery on Venezuelans living under a fifth year of an economic crisis that has sparked malnutrition, hyperinflation and mass emigration.”


“Brazil’s central bank is likely to hold interest rates at an all-time low on Wednesday even after inflation jumped back within its target range, due to an underwhelming economic recovery keeping a lid on price pressures”


“Turkish government bonds extended losses amid concern that a diplomatic spat with the U.S. over a detained American pastor in Turkey is escalating. The yield on 10-year debt jumped …to an all-time high of 18.86 percent after Sabah newspaper reported that a Turkish court rejected an appeal by lawyers for Andrew Brunson to be released and for his travel ban to be lifted. The U.S. is threatening imminent sanctions on Turkey should he not be released.”


“Hundreds of Iranians joined a street protest Tuesday in the central city of Isfahan to denounce the government’s handling of economic problems, including the record low value of Iran’s currency.”


“Officials in Islamabad have accused Washington of trying to strong-arm Pakistan into scaling back billions of dollars’ worth of Chinese investment in their country’s infrastructure as part of a potential bailout by the IMF.”


“While a meeting of the [Chinese] Politburo Tuesday recognized that the external environment — read Donald Trump’s trade war — has “significantly changed,” the nation’s top leadership under President Xi Jinping affirmed that the campaign will continue, albeit at a more measured pace. That matches the approach of the government as a whole, which has rolled out targeted policy shifts from tax breaks to bond-market support in recent weeks.”


“The manufacturing sector in South Korea continued to contract in July, and at a faster rate, the latest survey from Nikkei revealed on Wednesday with a PMI score of 48.3. That’s down from 49.8 in June, and it moves farther beneath the boom-or-bust line of 50 that separates expansion from contraction.”


“House prices have fallen at their fastest rate in more than six years, fuelling concerns that prices in Sydney and Melbourne may fall “too far, too quickly”, hurt economic growth and drive anxiety among policymakers.”


“The eurozone’s economy slowed further in the three months through June, as exports sputtered and business confidence weakened on worries over future relations with the currency area’s largest trading partners.”


“…even the most committed euro enthusiast cannot honestly say that the single currency has been a success. Europe has quite plainly overextended itself. Unfortunately, the sociologist Ralf Dahrendorf was right to conclude: “The currency union is a grave error, a quixotic, reckless and misguided goal, that will not unite but break up Europe.””


“Greece still faces an uphill struggle after the end of its bailout program and it is not clear that its public debt load will be sustainable in the long term, the International Monetary Fund said Tuesday.”


“A wave of defaults from sellers in the internal market in Russia has exacerbated quality-driven concerns over the size of this year’s wheat crop…”


Read yesterday’s ‘Economy’ thread here.

Economy 31 July 2018 US housing market ominous

US housing market raises red flag“Friday’s report on US economic growth spurred a presidential victory lap after it showed that gross domestic product rose at a 4.1% annual rate, the fastest in nearly four years.

“But it had an ugly detail about the housing market that added to evidence of a slump: Residential investment, which includes construction and brokers’ fees, shrank in the second quarter for a third quarter out of four.

“Add this to the worst housing affordability in nearly a decade and rising mortgage rates, and you have a recipe for a slowdown.

“For Lindsey Piegza, the chief economist at Stifel, the housing market “raises a large red flag” about economic growth in the second half of the year. She added that home sales help drive other parts of the economy, including consumer confidence and the pace of construction.”


“Many [US] retirement funds could face insolvency.”


“”I don’t want to scare the public, but we’ve never had QE,” [Jamie] Dimon said. “We’ve never had the reversal. Regulations are different. Monetary transmission is different. Governments have borrowed too much debt, and people can panic when things change.””


“Canada is finding it harder to attract the foreign investment in its bonds and stocks that it needs to finance a current account deficit, as yields rise at a faster pace in the United States and structural headwinds stifle prospects for domestic economy.”


“[UK] Households are piling billions of pounds of debt on to credit cards, overdrafts and personal loans at record levels in a trend that economists are warning is unsustainable just as interest rates are set to rise. Years of weak wage growth and a recent rise in inflation has led consumers to borrow huge amounts of unsecured credit in order to sustain their normal spending over the past year.”


“Spanish economic growth slowed to its weakest pace in four years in the second quarter of the year, providing the latest evidence that the eurozone boom of late 2017 has moderated since the start of the new year.”


“The Turkish Treasury’s domestic debt has increased by 25.8 billion lira since the beginning of the year, reaching 561.2 billion lira, whilst the Treasury’s external debts have increased by 67.6 billion lira in 6 months, reaching 408.6 billion lira. Household debt, meanwhile topped 500 billion lira as of May this year.”


“As Libya slips deeper into an economic crisis, cracking down on smuggling has risen higher on the agendas of local authorities and militias. Gasoline, in particular, has become contentious – and last year, amid increasing public outrage in western Libya, the informal agreements that regulate border smuggling started to limit quantities of gasoline. As a result, the price of the gasoline consumed by many in southern Tunisia has more than doubled. “


“China’s official factory gauge cooled this month as the impact of trade turbulence with the U.S. on confidence and the currency began to bite.”


“China-based manufacturers were already in the process of moving to lower-cost Southeast Asia. Now that trade tariffs have been enacted on at least $50 billion worth of goods, and another $200 billion likely by summer’s end, they are shifting their supply chain. It’s happening.”


“A Bloomberg gauge tracking the performance of China-listed brokerages has fallen to its lowest reading relative to the Shanghai Composite Index in over a decade.”


“The weekly chart shows that after the June 7 high, the price of copper has declined for seven consecutive weeks… China is the world’s leading copper consumer and a trade dispute between the Chinese and United States is at the heart of the protectionist rhetoric and actions over recent weeks.”


“The summer slump in freight markets continued last week…”


“Indonesian President Joko Widodo has asked his ministers to make “serious” efforts to strengthen the country’s foreign exchange reserves amid pressures caused by a global trade war. “The country needs dollars now,” Widodo said in a cabinet meeting on Tuesday.”


“The Bank of Japan owns 80% of the country’s ETFs and is a top ten shareholder in nearly 40% of listed companies… Japan’s financial markets (the same situation exists in the Japanese bond market where the Bank of Japan owns a huge percentage of the market and is running out of bonds to buy in the world’s second largest bond market, which is also the world’s most illiquid bond market) are a study in Ponzi finance…

“At some point, presumably, the Bank of Japan and GPIF will have to stop or significantly slow down their buying, which will pull the rug out from under this entire phony market. And when that happens… it will cause serious problems in global financial markets.”


“Business confidence continues to slide [in New Zealand] according to the latest ANZ Business Outlook Survey. Business confidence, and firms’ views of their own activity, continued to fall in July, reaching the lowest levels since May 2008 and May 2009 respectively, ANZ chief economist Sharon Zollner said.”


Read yesterday’s ‘Economy’ thread here.

Economy 30 July 2018 Iran’s currency collapsing

Iran's Rial collapsing“Iran’s currency hit a record low on Sunday of 100,000 rials to the dollar amid a deepening economic crisis and the imminent return of full US sanctions.

“The unofficial rate stood at 102,000 rials by midday, according to Bonbast, one of the most reliable sites for tracking the Iranian currency.

“The rate was confirmed by a trader who spoke on condition of anonymity to AFP.

“The rial has lost half its value against the dollar in just four months, having broken through the 50,000-mark for the first time in March.”


“Of the 20 funds paying pension to retirees in Iran, 18 are bankrupt, a member of Majlis Social Commission said. Rasoul Khezri added that all the pension providers in Iran are in a state of bankruptcy, with the exception of Social Security Fund and, to some extent, the Central Bank Pension Fund, ICCIMA’s news portal reported.”


“Prices and inflation are rising so fast [in Venezuela] that the highest denomination bank notes emitted in 2016 are already practically worthless. The biggest of those, 100,000 bolivars, would have bought five kilograms of rice in 2017, now it’s barely enough for a single cigarette. “If inflation continues at 100 percent a month,” the new 500 bolivar note, which will be the largest following the currency redenomination on August 20, “will be obsolete by December,” said economist Leonardo Vera.”


“Nigeria failed the test conducted to determine its ability to sustain ongoing borrowings and their repayments in the next five and 10 years, an affirmation of the growing fears over increasing level of borrowings and huge costs incurred in servicing them.”


“With the Bank of Japan ending a two-day meeting on Tuesday, the Federal Reserve concluding its meeting on Wednesday and the Bank of England expected to raise interest rates on Thursday, investors are preparing for a busy week that could set the near-term course for currencies.”


“Emerging market governments and companies have borrowed heavily in dollars, and their debt repayment burdens are rising.”


“After more than a year of aggressively cracking down on dangerously high debt levels, China’s cabinet on Monday said it would be more “active” in stimulating the economy, citing “external uncertainties”. But the IMF said “a reversion to credit-driven stimulus would further increase vulnerabilities that could eventually lead to an abrupt adjustment”.”


The manufacturing and construction boom that powered China’s economy, fuelling demand for heavy machinery, is winding down, and Shenyang Machine has posted losses every year since 2013… The workers are oblivious to the company’s $78m loan from Bank of Shengjing, the largest regional lender in Liaoning province, whose capital city is Shenyang. But the nexus between lossmaking companies and regional banks has emerged as a key risk to China’s economy, where an explosion of debt since the global financial crisis has sparked warnings from the IMF and other watchdogs.”


“Equity and bond markets have welcomed Imran Khan’s victory in Pakistan’s disputed election, but the former cricket hero faces a tough slog to avert a currency crisis and implement long-term reforms needed to end decades of boom-and-bust cycles.”


“The collapse of the seventh-smallest of South Africa’s 21 banks has left a trail of destruction, with customers queuing up outside branches before dawn in the hope of accessing their funds. Like Mulalo Ramano, a 72-year-old widow who’s suffered anxiety attacks fretting about the R20 000 life savings she deposited at the bank.”


“It’s confession time among the Detroit automakers: GM, Fiat Chrysler, and Ford all got ugly, in unison, in one day, something we haven’t seen since the Financial Crisis.”


“The housing market is hot. Prices are up, inventory is down, and the market is active. Many people are starting to become cautious of a “real estate bubble.” The past has revealed many red flags which would indicate a real estate market may very well crash.”


“Credit-rating companies such as Standard & Poor’s and Moody’s have recently warned that this surge in corporate borrowing and lending has led to a noticeable decline in the quality of the loans. The borrowers have lower credit ratings. The loans contain fewer of the standard conditions that are meant to protect lenders. And the rating companies calculate that lenders should expect to recover less of their money if the borrowers default or go into bankruptcy.

“For the most part, however, these warnings have gone unheeded…”


Read the previous ‘Economy’ thread here.

Economy 27 July 2018 UK household debt unprecedented

UK household debt worst on record“British households spent around £900 more on average than they received in income during 2017, pushing their finances into deficit for the first time since the credit boom of the 1980s.

“The Office for National Statistics said the shortfall amounted to nearly £25bn – equal to almost a quarter of the NHS budget – and the overspend was mostly paid for with borrowed money, though households also ran down savings.

“The figures pose a challenge to the government, which was warned last year that a dramatic rise in debt-fuelled spending since 2016 has taken place against the backdrop of the Brexit vote, which triggered a rise in inflation at a time of weak wage-growth.

“Analysts warned that a squeeze on household incomes from benefit cuts, lacklustre wages and high inflation would continue to force poorer households to borrow more to pay basic bills.”

“Anti-poverty charities warned that millions of low income households were the worst affected.

“StepChange, which provides advice for indebted households, said the poorest were in constant need of credit to keep their heads above water.

“The charity’s chief executive, Phil Andrew, criticised the ONS for saying that households were living beyond their means, which he said implied they could cut back if they wanted to.

““It’s really unfortunate that this very useful data is so heavily sprinkled with the phrase that households are ‘living beyond their means’. The reality is that too many households, here in Britain, in 2018, simply cannot make ends meet, however hard they try.””


So the perfect time for an interest rate rise then:

“The Bank of England looks set to pass a post-financial crisis milestone next week by finally raising interest rates above their emergency levels set more than nine years ago.”


Tapped out consumers and conceivably a no-deal Brexit. What could possibly go wrong?

We need to talk about UK banks…

Berenberg is: “Concerned that borrowers that have accessed low-cost credit during recent years will be unable afford repayments as these fall due. Recent tightening of lending terms may also make refinancing more difficult.”

“…a disorderly no-deal Brexit is no one’s central expectation. But the risk of it has just risen significantly. And if that starts to appear the likely outcome, UK banks will be uninvestable.”


This is definitely new for many [Turkish] companies — to deal with high inflation and the fluctuating currency,” said Mr Saydam. “It’s a big challenge for all of us.” That challenge deepened this week as the lira plunged by as much as 4.2 per cent after the central bank shocked markets by keeping interest rates on hold.”


“Iran’s President Hassan Rouhani has replaced the governor of the central bank as the national currency, the Iranian rial, continues to decline.”


“A new government under Pakistan’s incoming leader Imran Khan will need to move quickly to tackle a brewing economic crisis. The former cricket star’s party claimed victory in Wednesday’s election after preliminary results showed it had the most votes. Khan said in a televised address he’ll focus on improving the lives of the poor and fighting corruption.”


“Saudi Arabia is pushing Aramco to raise tens of billions of dollars in debt now that the state oil giant’s initial public offering has stalled, as the kingdom pursues other ways to fund an economic transformation.”


“Global financial markets are growing concerned about China’s debt excesses… it is business borrowing, particularly borrowing by the country’s massive state-owned enterprises, that has upset the country’s financial balance. Debt from SOEs has soared more than 20 percent a year, on average, for the last ten year.”


“Chinese corporate debt swelled on infrastructure and other projects funded by Beijing’s 4 trillion yuan ($589 billion at current rates) stimulus package in the aftermath of the 2008 global financial crisis. State-run enterprises account for about 80% of the total debt owed by Chinese companies.”


“Squeezed at home by razor-thin margins and negative interest rates, both major and regional [Japanese] banks have been on a spree abroad. Banks have more than doubled borrowing and lending in dollars since 2007. Dollar-denominated assets of Japanese banks topped $3.5trn at the end of 2016, according to the Bank for International Settlements (BIS) in Basel. That leaves them vulnerable to currency swings and external shocks, it warns.”


“The decline in [US] house construction was reported across many regions. “Every region posted a decline so this wasn’t about a regional weather report,” says David Rosenberg of Gluskin Sheff… The constraints encountered by developers coincide with a squeeze on demand… Price rises have been “easily outpacing wage gains”, says Katia Dmitrieva on Bloomberg… Half of the US housing markets in the country are now above their 2006 peaks, according to The Wall Street Journal.”


“In June, the Congressional Budget Office estimated federal debt held by the public will rise from 78 percent of GDP at the end of this year to 96 percent in 2028. That would mark the highest percentage since 1946. The report warned such high and rising debt due to higher spending and lower revenues would have “serious negative consequences for the budget and the nation.”

“”As debt gets higher, it becomes harder and harder to stimulate the economy to generate growth,” said Sonja Gibbs, senior director of the Capital Markets and Emerging Markets Policy Department of the Institute of International Finance, to CNBC via telephone.”


“It’s the biggest ever one-day drop in a company’s market value, falling from a record high of $619bn on Wednesday to just $501bn in early trading on Thursday.”


Read yesterday’s ‘Economy’ thread here.

Economy 26 July 2018 US subprime 2.0

Ginnie Mae - another subprime crisis in the making?“The increasing role of non-banks in the U.S. mortgage market sparks memories of the 2008 financial crisis. As the likes of Citigroup, Bank of America and JPMorgan have cut home lending and servicing, specialists have stepped in, but they lack bank-like capital cushions. Government-owned Ginnie Mae, guarantor of $2 trillion in mortgage-backed securities, is particularly exposed, as are the mainly lower-income Americans it is supposed to help.

“Ginnie Mae, which supports mortgages for veterans, lower-income individuals and minority groups, can’t adequately police the non-banks whose borrowers’ performance it essentially guarantees. A September audit supported that finding.

“Non-bank lenders and mortgage servicers often rely on the kind of short-term funding that proved so vulnerable during the crisis. Furthermore, non-banks are largely regulated by state watchdogs, which have varying standards.

“U.S. Housing Secretary Ben Carson, who oversees Ginnie Mae, is positioned to sound the alarm but he is one of the less visible members of President Donald Trump’s cabinet and has little experience in mortgage finance…”


Trump in effect using economic blackmail to try to push the EU into buying US LNG, which would be significantly more expensive than buying gas from Russia.

“The EU also agreed to work on more U.S. liquid natural gas exports, the newswire reported.”


It’s looking more and more likely that we’ll get a price-spike in the not-too-distant future. 2019?

“Crude inventories in the US fell by 6.15 million barrels in the week ending July 20, the Energy Information Administration said. The drop brings overall US stockpiles to the lowest point since February 2015.”


But a price-spike will cause demand to crater, if it doesn’t collapse the entire financial system, and prices will not remain high long enough to rescue the energy industry and energy producing nations from the doldrums:

“The rout in China’s high-yield debt market stems partly from the slew of corporate defaults this year, both in the domestic market and offshore. In late May, China Energy Reserve & Chemicals Group, an oil and gas producer, defaulted on a US$350 million bond, triggering cross-defaults on four other of the company’s dollar-denominated notes. In the local market, Wintime Energy, a coal miner, defaulted on 11.4 billion yuan (US$1.7 billion) of debt earlier this month, the largest corporate default this year.”


“Russia is preparing the most radical shakeup of its oil-tax system since 1999. The changes will allow the nation’s producers to export crude and oil products duty-free… The tax overhaul is Russia’s second attempt to remove export duties on crude and oil products, after an earlier effort in 1996. Just three years after the move, the government was forced to reinstate the levies as it scrabbled for funds after the 1998 financial crisis.”


“Iranian leaders are pushing to contain a deepening economic crisis that is slashing the buying power of Iranians and pressuring Tehran’s ruling elite even before the bite of looming U.S. sanctions.”


“Saudi nationals are borrowing two to three times more money than last year as government moves to shore up public finances push living costs through the roof. Since the beginning of 2018, the government has raised fuel and utility prices, introduced value added tax and imposed a levy on some temporary foreign workers not under an employer’s sponsorship… the latest official loan data suggest the policy is hitting ordinary citizens in their wallets.”


“Venezuela will remove five zeroes from the bolivar currency rather than the three zeroes originally planned, President Nicolas Maduro said on Wednesday, in an effort to keep up with inflation projected to reach 1 million percent this year.”


“Sam Woods, the central bank’s top supervisor, said contingency planning for Britain’s withdrawal from the European Union will be similar to its preparations for the Scottish independence referendum in 2014 and the U.K.’s Brexit vote two years later, which sent the pound plunging against the dollar. “Because of the times we live in, that’s become standard business for us,” he said.”


“After months of speculation over the health of Italy’s banking sector, another Italian lender is in the spotlight after the European Central Bank (ECB) demanded Banca Carige to see new capital plans as it tries to overcome a management crisis… This crisis adds up to the pile of problems in the Italian banking system, where crisis-legacy issues remain, with one of the biggest problems being a build-up of non-performing loans.”


“Sydney house prices fell 4.5 per cent in the year to June, their fastest rate in a decade, and Melbourne houses grew at their weakest pace in almost six years as the unwinding of the housing boom gained pace. Tighter credit and weaker investor activity continued to slow the housing market on Australia’s eastern seaboard in the June quarter…”


Read yesterday’s ‘Economy’ thread here.

Economy 25 July 2018 emerging markets vulnerable

Emerging markets $ forex reserves vs external $ debt“Emerging market countries might be facing an economic crisis.

“16 emerging market countries borrowed $3.4 trillion from foreign lenders, but their foreign exchange reserves amounted to $1.3 trillion.

“The currencies of Argentina, Ukraine, Egypt, Turkey, and Brazil have depreciated against dollar by 80.3%, 69.0%, 60.9%, 60.5%, and 42.5%, respectively, over 5-year period…

“Emerging market countries would be facing high currency, liquidity, inflation, interest rate, default, and emerging market risks due to the shortage of foreign exchange reserves, strong dollar trend, and trade war.”


“Veteran fixed-income investor Abdul Kadir Hussain sees unsettling similarities between the 1997 Asian crisis and the present that spell trouble for emerging markets. Default rates on emerging-market debt will climb next year as the ending of a decade of easy money by central banks hits weaker companies the most, said Hussain, the head of fixed income at Arqaam Capital, a Dubai-based investment bank.”


“Tunisian Prime Minister Youssef Chahed said on Tuesday a change of government would put the economy at risk and shake the confidence of international lenders, rejecting the president’s call for him to stand down amid an economic crisis.”


“Argentina’s economy shrank 5.8 percent in May versus the same month last year, government statistics agency Indec said on Tuesday, the second straight month of declines in a sign of looming recession and a possible GDP contraction in 2018.”


“Unlike in 1920s Germany, people in today’s Venezuela are not carrying wheelbarrows of cash to buy groceries. Instead, they have turned to electronic transactions. But 40% of Venezuelans do not have bank accounts, while others are unwilling to use credit cards or bitcoins to pay for for smaller items, so bartering has become common.”


“The new Brexit secretary has promised to ensure “there is adequate food supply” if the UK crashes out of the EU without a deal. Dominic Raab finally confirmed the government was making extraordinary plans to stockpile food in case the negotiations fail – having refused to do so two days ago.”


“Foreign investors shed record volumes of Italian debt in May as a sharp sell-off hit the country’s bond market, according to data highlighting the challenges facing the new populist government in the coming months. Italy’s governing coalition is set to bring forward a contentious budget this autumn, which some investors fear could threaten the country’s fiscal outlook.”


“The [Eurozone] PMI survey, published ahead of the European Central Bank governing council’s regular meeting on Thursday, signals conditions could weaken further in the coming months. Companies say fresh orders are drying up and some have signalled they are beginning to rein in spending on the back of concerns over trade and higher prices for raw materials.”


“China has a choice between a whimper today and a destructive bang tomorrow. It can curb the debt surge and allow growth to slow now, or risk a crisis followed by a more severe slowdown later.”


Looks like the trade war is forcing China to go the ‘destructive bang’ route:

“The People’s Bank of China injected some $74 billion worth of medium-term lending facility loans into its banking system overnight, in a move considered to be the start of a new phase for China… “China seems to be re-activating its old engines of growth, accepting higher leverage which eventually may impact credit risk…”


“The pool of funds Australia’s big four banks are increasingly accessing to source home loans has become more expensive. In some cases, it is as expensive as it was during the height of the global financial crisis.”


“…there are growing concerns [in the US] that the higher house prices and rising mortgage rates will cause demand to slow.”


“David Rosenberg is pretty certain he knows how the bull market in stocks will end. The Gluskin Sheff chief economist and strategist expects widening spreads will tear it apart. “The corporate bond market is today’s bubble, just like the mortgage market a decade ago was the bubble back then,” he said Monday on CNBC’s “Trading Nation.”

““Something tells me in the next six months that we’re going to have a dramatic widening in credit spreads,” said Rosenberg. “I know what happens in the tail end of every Fed tightening cycle.””


Read the previous ‘Economy’ thread here.