Central bank tightening, high oil prices, Chinese deleveraging and a worsening trade war… Darlings, what could possibly go wrong?!
“The case for $150 oil is based on the fact that major oil companies slowed capital spending devoted to the search for new sources of supply to their lowest point in a generation, mostly outside of the U.S., when crude oil moved as low as $30 in 2016, Bernstein analysts led by Neil Beveridge wrote. Companies like ExxonMobil and Chevron curtailed capital spending to protect their share prices with stock buybacks and dividends, the report said, and that means a shortage of new supply…
““If we do get oil prices of $100, $125 or $150, you reach a severe pain threshold, and not just for the U.S.” said Bernard Baumohl, chief economist of the Economic Outlook Group in Princeton, New Jersey. “There’s nothing vague or ambiguous about it. You reach a pain threshold in the triple digits, and there is a much higher probability of a global downturn. … It would be cataclysmic.’’”
““There was an implosion in major project investments, and exploration spending has evaporated,” said Bill Herbert, a senior energy analyst at Piper Jaffray & Co. in Houston. That’s an ominous sign for crude oil supplies in the few years ahead, starting as soon as 2019, he added. “The elephant in the room that people aren’t paying attention to is the rapidly decreasing spare productive (oil) capacity,” Herbert said.”
Higher oil prices are inflationary. The Fed may be tempted to put up rates more aggressively to ‘cool off’ that inflation. Which is what happened in 2008.
“Despite two hikes of the Federal Funds rate this year, ranging between 1.75 percent and 2 percent, long-term rates have not kept pace, causing the yield curve to flatten and stoking fears of a recession. Just about every time the U.S. Treasurys yield curve has flattened in the past, the U.S. economy has tanked shortly afterwards.”
“The year is only halfway through and already 2018 is on track to be the most volatile since the financial crisis, Morgan Stanley analysts wrote in a note published Monday.”
“The US has angered not only China but its allies in Europe by imposing tariffs on steel and aluminum. Trump has said he is also considering adding a new tariff on automotive parts, which would hit the EU and Japan particularly hard. In retaliation, Europe has placed tariffs on US goods such as blue jeans, motorcycles and bourbon.”
“Platinum is caught in a speculative sell-off fuelled by a supply surplus, demand concerns due to the threat of a global trade war and a strengthening dollar, which makes metals more expensive for buyers using other currencies.”
“The first telltale sign of trade war stress on the global economy is now visible. Copper prices, which were trading at four-year highs a month ago, have shed 20 percent and are close to their lowest levels in a year. Copper is considered a proxy for the global economy on account of its usage in multiple industries…”
“We don’t know what precise effect these massive reductions in trade and UK exports [in the event of a no-deal Brexit] would have on the British economy, but it’s fair to say it would not be good.”
“Millions of “just about managing” families [in the UK] are no better off today than those in 2003, new research from the Resolution Foundation indicates. The remarkable income stagnation for so many reveals that the economy has been failing to generate income for people over many years despite record levels of people in work.”
“Turkey will more than likely soon have to ask the IMF for financial help. This scenario would not only impact Turkey itself but also have consequences for Europe, because many Turkish companies are highly indebted to European financial institutions.”
“Total debt at the [South African] power utility went from R387 billion to R600 billion over the past four years. That’s the equivalent of South Africa’s entire budget for healthcare and education, plus another R60 billion. Eskom’s debt burden is also much larger than South Africa’s entire income from personal income tax (R556 billion).”
“Voters in Pakistan headed to the polls on Wednesday, but no matter who wins, the South Asian nation looks to be headed for an economic and currency crisis.”
“Sri Lanka is drawing up proposals to get around international sanctions on Iran by paying its oil debt with the Middle East country in tea, according to a report.”
“Small banks in Chinese provinces affected by Beijing’s efforts to slash excess industrial capacity and reduce pollution are being hit by a spate of non-performing loans, according to reports from Chinese credit rating agencies. Some small lenders in provinces such as Henan and Guizhou have seen their capital adequacy ratios fall to near zero or even negative due to the increase in bad loans, the reports say.”
“Amid the financial and humanitarian crisis in Venezuela, the country is expected to see hyperinflation reach epic proportions: a million per cent a year by the end of 2018, the International Monetary Fund said Monday.”
“President Trump continues to escalate his trade threats against China.
“He’s now threatening 10% tariffs on all Chinese imports.
“While the effects on US consumers and economic growth would be bad enough, there’s a risk of triggering a full-blown financial crisis.
“That’s because China’s economy is a debt-fueled house of cards, with especially strong exposure to a crash in its $43 trillion real estate market.
“This means that this very risky strategy might either force China to make major concessions on trade, or could spiral out of control and trigger a potential global recession.”
“Global growth has peaked and is expected to decelerate further. Signs of a slowdown have been evident since the beginning of 2018… Over the last decade every global slowdown has been marked by a crisis. “Given the precarious state of global trade, a tariff war could create a Wiley Coyote moment where global growth could fall off a cliff. Moreover, global growth is not expected to improve in the near term because global liquidity is evaporating…”
Analysts are taking note of the struggles in China’s banking industry, which is being battered by an official deleveraging drive… Spikes in the volume of non-performing loans and an increase in loans overdue are among the reasons. One of the lenders — Guizhou-based Guiyang Rural Commercial Bank Co. — saw its bad debt balloon nearly tenfold in the space of two years, according to the assessor that slashed its rating.”
“Australia’s building commencements, fuelled by investor apartment construction, look like heading from boom to bust, according to forecaster BIS Oxford Economics. In a reality check for investors who bought at the top of the apartment boom, BIS is predicting the biggest correction since the global financial crisis hit in 2008, with housing starts set to fall by almost 23 per cent by 2020.”
“Australia is facing an economic shock akin to the global financial crisis, an expert has warned. Some $500billion worth of interest-only mortgages expire in the next four years, raising fears that thousands will default when their repayment sums increase. High mortgage default rates in the US sparked the 2007 global crash by leaving banks short of cash.”
“There’s no shortage of potential triggers for a looming Armageddon. Trade conflicts between the US and almost everyone, friend and foe, political instability in Europe as the UK tears itself apart over how to exit the European Union, an economic slowdown in China and speculation of another European banking crisis take regular turns as the likely culprit. Underlying it all is a colossal build-up of debt, hoisted upon the global economy in the past decade by central banks as they desperately attempted to stave off a debt-fuelled financial crisis.”
“US President Donald Trump has launched a furious all-caps Twitter rebuke of Iran declaring “you will suffer consequences the likes of which few have ever suffered before.””
“Direct foreign investment into [Saudi] fell to $1.4 billion last year from $7.4 billion in 2016, according to United Nations figures released last month. That compared with an average $18.2 billion annually in the years leading up to the global financial crisis in 2007-2008 and last year fell in part because of fewer investments among multinationals, said the U.N. Saudi officials didn’t dispute the numbers.”
“The number of foreigners terminated from public sector jobs in Kuwait has left banks in the country with a sizeable bad debt problem. Local media said that Kuwait’s efforts to create more jobs for nationals by releasing foreigners has created a problem when thousands of laid off expatriates became unable to fulfill their financial obligations towards local banks.”
“In Dubai’s posh Jumeirah Beach Residence district, luxury apartment rents are down about 15 per cent from a year ago – a sign, some fear, that the wealthy emirate’s recipe for economic success is getting stale.”
“The currency mismatch and volatile capital flows in Turkey is at a structural risk with an alarming problem of reaching a moment where they cannot borrow any more. The increased interest rates in the US have caused reallocation of funds out of several emerging economies, thus structural weakness has become obvious in the MENAT region.”
“Pakistan’s economic situation has further deteriorated during short tenure of the incumbent caretaker government that neither has intervened in the market to stabilise the currency nor increased the foreign exchange reserves. The country’s economic situation especially external sector is deteriorating due to widening of current account deficit and loan repayment.”
“As it stands, Lebanon’s public debt is $80 billion, the third highest globally as a percentage of GDP (150%) with more than one-third of the annual budget dedicated to servicing the country’s debt, making—without significant change—economic recovery impossible.”
“Hundreds of Argentinians took to the streets of Buenos Aires to protest against a standby agreement reached with the IMF in June for a three-year, 43 billion euro loan. “This agreement demands a reduction in the fiscal deficit that would imply job losses in the state, a reduction in the budget for education, health, housing, everything related to public works,” said Leftist Front deputy, Nicolás del Caño. “This means the crisis generated by the big capitalists wants the general public to pay for things.””
“Three months after the protests began in Nicaragua, which have unleashed deadly violence, with more than 350 killed and thousands injured, the country’s economy suffers serious consequences due to the fall in investment, employment and production.”
“The OBR’s fiscal sustainability report does what it says on the tin — it looks at the sustainability of the [UK’s] public finances over the long term. They are not, judging by its latest report, remotely sustainable.”
“While ever greater food production, mineral extraction, forest clearance and fossil-fuel burning bring short-term (and unequally distributed) lifestyle gains, the long-term consequences are increasingly apparent in terms of soil erosion, water shortages and climate disruption. The day of reckoning is moving nearer, according to Mathis Wackernagel, chief executive and co-founder of Global Footprint Network.”
“Officials gathering for Group of 20 meetings in Buenos Aires this weekend will have plenty more crisis fodder than Lionel Messi’s World Cup performance to gab about.
“We heard growing fears this week that a downturn might be brewing from various corners of the global economy, while central bankers find their place in the policy tightening cycle and trade battles rage on…”
Find myself agreeing with Trump here: “U.S. President Donald Trump on Thursday criticized Federal Reserve policy even though most economists believe the highest inflation in seven years and lowest unemployment in 40 years justify recent interest rate rises and a strong U.S. dollar. Trump said he was concerned about the potential impact on the U.S. economy and American corporate competitiveness from rising rates and a stronger dollar.”
“The current bull market in stocks is a month or so away from becoming the longest in history. If it happens, then what? …a growing number of experts are questioning whether the stock market’s run will keep going through 2019 and beyond. The big threat now is the potential for a punishing trade war, as the United States squabbles with allies and rivals alike on tariffs. That could squeeze earnings and economic growth around the world. Beyond that, several firmer warning signals for the market are flashing yellow.”
“”You’re probably looking at 30 days.” That’s how long it would take before production “grinds to a halt” at automotive assembly plants, parts manufacturers, and other industry businesses on both sides of the [Canda/US] border if U.S. President Donald Trump’s proposed 25 per cent tariffs on all imported vehicles comes to be.”
“In the second quarter emerging markets currencies had their worst fall in seven years. July started better, but the downward pressure is back on a steady course of interest rate tightening in the US. This attracts capital to the dollar. Equity investors have been pulling money out of emerging markets for 10 weeks straight. So have bond investors…”
“Nicaragua’s economy is tanking as the violent chaos engulfing the nation paralyzes business activity. Police and pro-government paramilitary forces fired on government opponents hiding behind barricades and on university campuses this week, and besieged protesters who’d taken refuge in a church, as the clashes showed no sign of waning after three months.”
“Brazil’s oil regulator ANP said on Thursday it would not establish a minimum frequency for fuel price adjustments, after a nationwide truckers’ protest over rising diesel prices in May cast a spotlight on the issue… The crisis renewed a national debate over whether fuel prices should reflect rising international oil costs and shore up the finances of state-run oil giant Petrobras or protect Brazilians still hurting from the worst economic crisis in a generation.”
“Sudan’s inflation rose to 63.87 percent year-on-year in June, from 60.93 percent in May, the state statistics agency said on Thursday, as the dollar-starved country grapples with an economic crisis.”
“Tansu Çiller, a former prime minister of Turkey, warned of a crisis in the corporate sector after some large companies began talks with banks to restructure their loans. “I see a very serious expectation of a crisis in the private sector,” Çiller said , according to Turkish columnist Abdulkadir Selvi.”
“Russian ownership of US Treasury bonds dropped from $96.1 billion in March to an 11-year low of $14.9 billion in May, the latest Treasury figures show… Elvira Nabiullina, the head of the Central Bank of Russia, reportedly said cutting the stake was the result of an assessment of financial, economic, and geopolitical risks. Russia has been buying gold as it sells off US bonds, recently overtaking China as the world’s biggest holder of gold, with $80.5 billion worth.”
“Chinese companies are facing a reality check after years of ramping up debt. The deleveraging campaign that President Xi Jinping began in 2016 to curb risks in the nation’s financial markets has cracked down on shadow financing and tightened rules on asset management. As a result, firms are having a tough time raising new funds to repay existing debt, leading to a record amount of bond defaults this year.”
“A policy debate in China on how best to address slowing growth deepened on Friday, as analysts urged authorities to boost fiscal stimulus amid rising risks to the world’s second-biggest economy from a bitter trade conflict with the United States.”
“North Korea’s economic trajectory has u-turned from surprisingly strong growth in 2016 to a sharp contraction last year — and worse is yet to come. Estimates from South Korea’s central bank show gross domestic product in the North contracted 3.5 percent in the 12 months through December, the biggest drop in two decades.”
“Britain crashing out of the EU without a deal would inflict significant economic pain across Europe, leaving the region without any winners, the International Monetary Fund has warned.”
“Some of the eurozone’s banking systems, notably Italy’s, remain weak thanks to high levels of non-performing loans. Throughout the region, banks’ profits have been weaker than before the financial crisis. The [IMF] described debt burdens in some member states as “heavy…””
“When Arthur Andersen collapsed after becoming entangled in the Enron scandal in 2002, the US accounting firm was written off by many in the audit profession as an outlier… But a steady stream of damaging news involving the accounting giant KPMG over the past 12 months has regulators, competitors and clients once again posing hard questions about the strength of one of the world’s biggest audit firms.”
“As Donald Trump continues to escalate his slap-happy approach to tariffs on Chinese goods, China is running out of US goods on which to to levy duties in retaliation. But if China wants to keep going tit-for-tat, it has other options.
“Unlike the US government, the People’s Bank of China—China’s government-run central bank—directly manages the value of its currency. The Chinese government let the yuan weaken around 4% against the US dollar in the last month, among the sharpest one-month drops in value in its history. The yuan’s slide has sparked fears that China could “turn a trade war into a currency war,” as Brad Setser, economist at the Council on Foreign Relations, phrased it.”
“If antagonizing Trump is the goal, depreciation has double-whammy appeal. Since it makes China’s exports cheaper—and therefore more competitive against US manufacturers—allowing the yuan to weaken will soften the blow of Trump’s tariffs on the Chinese economy, all other things being equal, and possibly eliminate the impact altogether. Conversely, it will also make the American products China buys more expensive, reinforcing the effects of China’s tariffs on US-made goods.”
“China’s currency hit lows not seen since last July, and the gap between onshore and offshore rates widened, suggesting greater pessimism among foreign traders.”
“China this month recorded one of its biggest corporate-debt defaults yet, with the downfall of a coal miner that had ridden the country’s wave of credit until policy makers changed the game with their deleveraging campaign…. How the borrower ran up a 72.2 billion yuan ($10.8 billion) tab that it now can’t make good on illustrates why this year will be China’s worst yet for corporate defaults. And with a potential lifeline from state-owned banks unveiled Wednesday, it could also emerge as an example of China’s unwillingness to allow unbridled corporate failures.”
“Japanese business sentiment slipped in July, a Reuters poll found, reflecting companies’ fear of fallout from an intensifying trade dispute between the United States and China… In the poll of 483 large- and mid-sized companies, many respondents expressed concerns about protectionism, high energy and materials costs squeezing profits, and labor shortages that raised hiring costs. Some 268 firms responded on the condition of anonymity.”
“Tumbling out of the European Union without a deal in hand could cost the pound dearly. Sterling could slump as much as 8 percent against the dollar if the UK doesn’t clinch a deal with the EU by March 29, when the nation is slated to leave the bloc, according to a survey of analysts.”
“The cost of filling up a typical family car [in the UK] with 55 litres of unleaded rose by £6.98 to £70.40 between June last year and June this year. The cost of filling up with diesel jumped by £8.14 to £72.66.”
“Demand for retail space in London has dived as woes around high street closures grow, according to a highly-regarded survey out today. Roughly 68 per cent more chartered surveyors in London’s retail sector noted a quarterly fall, rather than a rise, in demand for space in the capital, reaching levels not seen since 2008.”
““We are reasonably confident that the ECB will raise rates before the next downturn, but the risk of this not happening has clearly risen with the accelerating trade war, which has come amidst signs of slowing growth momentum,” said Elwin de Groot, head of macro strategy at Rabobank.”
“The most remarkable member in Erdogan’s new Cabinet is his son-in-law, Berat Albayrak, who took the reins of the economy at a time of serious financial woes. Erdogan chose to sideline Mehmet Simsek, the hitherto czar of the economy who enjoyed credibility among local and foreign investors; he then attached the Treasury to the Finance Ministry and handed the portfolio to Albayrak… Economic actors have remained reluctant to put their money in the Turkish lira, bring in funds to Turkey or make investments. As a result, the depreciation of the currency has continued.”
…from my summer break. My apologies for the hiatus. Let normal business resume:
“A decade after the 2008 recession, the policymakers who countered it on its front lines are worried that the US may not be adequately armed for the next economic crisis.
“Speaking at a roundtable discussion on Tuesday, former Federal Rerserve Chairman Ben Bernanke and former Treasury Secretaries Timothy Geithner and Henry Paulson recounted the lessons they learned in the wake of the crisis, and where they fear Americans may have forgotten them.
““One of the most powerful lessons from this crisis should be that you want to work very hard to make sure that your defenses are robust,” Geithner was quoted by AP as telling the audience. “We let the financial system outgrow the protections we put in place in the Great Depressions and… made the system very fragile and vulnerable to panic.””
“There’s no chance China will cut its trade surplus with the U.S. in response to President Donald Trump’s tariff threats. For starters, Washington has made no specific demand to which Beijing can respond. But its efforts may have an unexpected side effect: a debt crisis in China.”
“A majority of Chinese consumers would be prepared to boycott US goods in the event of a trade war with Washington, a survey has found, signalling the high stakes in the escalating trade conflict between the two countries.”
“The U.S.-driven trade war has become the biggest “confidence killer” for the global economy, China’s foreign ministry warned on Wednesday, saying the whole world would fight back if the United States continued to be “wilful”. “
“China will take 28% of Venezuela’s 1.34 million barrel per day oil production. Venezuela will not get cash but would have to send oil for about three years to pay off the debt… If Venezuela oil production completely collapses then China would not be able to collect .”
“A twelve-year-old boy was killed in the Venezuelan city of San Felix overnight in an incident in which demonstrators protesting chronic power outages partially burned a small police station, police said on Tuesday.”
“In this once-thriving industrial city as in much of [Venezuela], public buses have gradually disappeared due to scarce or prohibitively expensive tires, motor oil, batteries and spare parts. Cargo trucks of all shapes and sizes have taken their place, but most lack even basic safety protections for human cargo and are increasingly associated with accidents and injuries to passengers – a further sign of the deteriorating quality of life in the crisis-stricken country.”
“Oil production by Brazilian state-led Petroleo Brasileiro SA in the Campos basin fell 1.4 percent in June over the previous month to 1.042 million barrels a day, its lowest level since 2001, as mature fields decline, according to company data. “
“Brazil’s Ministry of Health reported on Monday that after 25 years of sustained decline, the rate of infant mortality started to rise in 2016, partly due to the Zika virus epidemic as well as the economic crisis that the South American country has been facing. “
“During Putin’s first two terms, when prices per barrel soared above $100, the country could simply spend its way out of trouble, but a rise is always followed by a fall. When prices crashed from $114 in June 2014 to $27 in 2016, Russia’s finances collapsed. Even today, oil prices remain way below their peak at around $80 per barrel.”
“A year after the international community assembled a US$5.5 billion emergency package, Mongolian stock and bond performance reflected the escape from a debt crisis, but “more downside than upside risks” persist, according to the International Monetary Fund’s July program review.”
“[Iraq’s] economy is in dire straits. Iraq relies too heavily on its rich energy reserves as a source of revenue, and the government struggles to efficiently distribute services everywhere on its territory. In addition, the number of Iraqis living under the World Bank’s determined poverty line has grown over the past decade, while the rate of internal displacement has accelerated, largely because of the rise of the Islamic State and the fight against it.”
“Iranian Foreign Minister Mohammad Javad Zarif says Iran has lodged a complaint with the International Court of Justice (ICJ) over the United States move to re-impose unilateral sanctions against Tehran.”
“[UK] Employment hit a record high and joblessness stayed at a 43-year low in the three months to May, but earnings growth slowed as the labour market continued to confound convention. The weakness in wage growth, which dipped from 2.6 per cent in April to a six-month low of 2.5 per cent, is unwelcome, but economists said that it was unlikely to deter the Bank of England from lifting interest rates next month.”
“A horrifying graph highlighting skyrocketing levels of household debt shows how vulnerable residents in Australia’s largest cities have become to economic shocks. The Reserve Bank of Australia board was warned of the dangers of rising debt levels in its most recent board meeting.”
“Plunge, tumble and rout are overused by the financial media to describe a market in decline, but such superlatives would not be out of place to describe what’s happening to commodities. The Bloomberg Commodity Index of 25 raw materials ranging from oil to copper to cattle dropped as much as 2.80 percent on Wednesday, the most since 2014, before closing at its lowest level since December. That brought the gauge’s decline to 8.88 percent from this year’s peak in late May.
“If one thinks of raw materials as a sort of early warning system — copper is frequently called the metal with an economics Ph.D. because it often tracks the health of the world economy — then commodities are sending an incredibly distressing signal.”
“The copper price, which started sliding a month ago, slumped 3 per cent on the London Metals Exchange on Wednesday night to its lowest level for a year. It’s fallen about 15 per cent in a month. It wasn’t alone. Base metal prices generally fell sharply, with zinc down 6 per cent and nickel and lead both about 3 per cent. Aluminium prices have also fallen heavily over the past month, down more than 7 per cent.”
“Global investors have been rattled after a threat by the Trump administration to impose 10% duties on $200bn (£151bn) of imports prompted protests from Beijing and brought an all-out trade war a step closer. Stock markets headed lower in the US, Asia and Europe on Wednesday as the US warned that it would press ahead with further tariffs and China promised to “fight back as usual” with “firm and forceful measures” if they were enacted.”
“While higher prices caused by the import taxes are the most immediate effect, accounting for roughly half the decline in GDP, the larger impact will come from derailing the existing global supply chain of goods hit by the tariffs and the impact on jobs and confidence.”
“A rout in China’s dollar-denominated junk bonds is getting worse as mounting defaults send traders running for cover. Rising trade tensions are also adding to longer-existing difficulties created by the nation’s push to cut excessive leverage.”
“Inner Mongolia Berun Group Co said on Wednesday that it was uncertain of its ability to make interest and principal payments on a medium-term note totaling 856 million yuan ($128.32 million). The manufacturer of coal and natural gas chemicals said it was actively considering methods to raise funds, but that tight finances meant there was a risk it would not be able to make the payments.”
“Turkish equities, bonds and the lira took a hammering on Wednesday as Recep Tayyip Erdogan predicted a fall in interest rates and investors fretted over the health of the country’s economy… Turkey must find around $200bn a year in foreign financing — most of it in the form of short-term “hot money” flows — to fund the current account deficit as well as maturing debt. But foreign investors are worried about the management of Turkey’s $880bn economy under a powerful new executive presidency that came into force after last month’s elections and centralises power in the hands of Mr Erdogan.”
“Many [of Morocco’s] state-owned strategic institutions are on the verge of bankruptcy due to financial and legal problems, which may lead the government to privatizing the establishments as a solution.”
“As it stands, Italy does not necessarily wish to leave the euro of its own volition. However, Italy’s debt crisis could be a major problem for the eurozone. Should Italy default on its debt, then this has the potential to trigger a significant decline in global growth.”
“Tory Rebel, Dominic Grieve told the audience: “If by the end of February or early March it is clear that there is no [Brexit] deal on anything, there will be a declaration of a state of emergency in this country… Ordinary life will grind to a halt.””
“Foreign direct investment in the United States dropped 32 percent, or $120 billion, in 2017 as compared to the year before, according to new figures. After a two-year spike in foreign investment, the Bureau of Economic Analysis found that the rate last year dropped to levels similar to 2014 and the years before the financial crisis.”
“The reach of America’s student loan problem — total debt is now about $1.4 trillion — is vast. Millions of people are in default, and many young people are graduating into adulthood facing payments that limit their ability to buy homes and to start families of their own. Some employers have even begun dangling student loan repayment benefits as a perk to potential workers.”
“Masayoshi Son and Elon Musk leveraged their dreams to the hilt… They’re the headliners in a decade-long, $11 trillion corporate borrowing frenzy, fueled by central banks that flooded the global financial system with ultra-cheap money. Investors have been lending to virtually anyone willing to pay a decent yield. But now the easy money is coming to an end. Policy makers, after driving interest rates to unprecedented lows, are hiking those rates for the first time in 10 years. For many companies, it will bring new financial pressures. And for some of them, those pressures could trigger disaster.”
“The current system now relies nearly entirely on the so-called “big four” accounting firms — KPMG, Ernst and Young, Deloitte and PwC… they have “lost sight of their core purpose”, with only a third of their revenue coming from auditing and the rest earned from “consultancy services”… the firms are now selling billions of dollars worth of business advice to the same companies they are supposed to independently audit.”
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Central bank tightening, high oil prices, Chinese deleveraging and a worsening trade war… Darlings, what could possibly go wrong?! 
“President Trump continues to escalate his trade threats against China.
Nice overview of recent developments:
…from my summer break. My apologies for the hiatus. Let normal business resume:
“Plunge, tumble and rout are overused by the financial media to describe a market in decline, but such superlatives would not be out of place to describe what’s happening to commodities. The Bloomberg Commodity Index of 25 raw materials ranging from oil to copper to cattle dropped as much as 2.80 percent on Wednesday, the most since 2014, before closing at its lowest level since December. That brought the gauge’s decline to 8.88 percent from this year’s peak in late May.