“The global economy has achieved only a fragile recovery from the depths of the coronavirus pandemic and many emerging economies are still suffering severe hardship, according to the latest Brookings-FT tracking index.
““A broad-based and robust recovery does not appear on the horizon,” said Professor Eswar Prasad of the Brookings Institution…
“…the recovery in advanced economies is far from complete after a historic drop in the spring, and the situation in emerging markets is much worse with indicators still far removed from normal levels.”
“The U.S. oil consumption recovery is getting worse, not better. U.S. oil consumption recovered to 65% of normal in July and has since decreased to 61%.
“It took 4 1/2 years for oil consumption to return to the five-year average after the 2008 Financial Collapse (Figure 4). The present collapse is far greater and September use was lower than all but the worst two months of the last recovery from 2009 to 2013…
“Why should we expect this recovery to proceed any faster than the last one?”
“UK employers are expected to slash 1.5 million jobs by Christmas, as the end of furlough triggers a fresh wave of layoffs despite the government’s new job support scheme.
“Stark new analysis suggests 1.2 million furloughed workers are “waiting in vain to return to jobs that no longer exist,” and will face redundancy by the end of the year.”
“There has been a surge in the number of UK children registering for free school meals, with an estimated 1 million pupils recently signing up for the first time, according to food poverty campaigners…
“…as many as 900,000 more children have sought free school meals, on top of the 1.4 million who were already claiming, as the Covid-19 crisis plays havoc with family incomes.”
“The Bank of England (BOE) has written to banks on Monday to see how ready they are for zero or negative interest rates.
“In a letter from the BOE, deputy BOE governor Sam Woods said the central bank is “requesting specific information about your firm’s current readiness to deal with a zero Bank Rate, a negative Bank Rate…”
“Four years after Britain voted to leave the European Union Brexit can still seem abstract. But in the county known as the Garden of England, it is literally taking concrete form.
“Just beyond the ancient oaks and yews that surround medieval St. Mary’s Church in the village of Sevington, bulldozers, dump trucks and cement mixers swarm noisily over a field. They are chewing up land to create part of Britain’s new border with the European Union — a customs clearance depot with room for up to 2,000 trucks.”
“Firms move €150bn of UK assets to France ahead of Brexit.
“Banque de France says 31 entities – mainly investment firms – have applied for licences in France, moving €150bn of assets since September.”
“European Union nations have begun “wargaming” plans for a no-deal Brexit that could see the resumption of talks next year…
“Ahead of crunch talks in Brussels this week, a senior EU diplomat told The Telegraph that although there would be a “period of chaos” if no agreement is struck, “there is nothing that says that just because there is a no deal there can never be trade negotiations again”.”
“Now, for a Europe that has made managing rather than solving economic crises into an art form, the time for paying the piper is fast approaching.”
“Anti-lockdown protests across Europe despite surge in cases:
As Covid-19 cases rise in Europe, protests against government restrictions and lockdowns are popping up across the continent.”
“Driven by the economic fallout of the COVID-19 global pandemic, growth in Sub-Saharan Africa is predicted to fall to -3.3 percent in 2020…
“…pushing the region into its first recession in 25 years, according to the latest regional economic analysis.”
“‘Drastic rise’ in Malawi’s suicide rate linked to Covid economic downturn:
“Lack of specialist support and growing unemployment are factors in growing mental health crisis, doctors say.”
“Zambia has said it will resist pressure from Chinese creditors to make paying arrears a condition of pursuing debt relief talks, as the southern African nation battles to restructure $11bn of external debts.
“Africa’s second-biggest copper producer has become a test case for the ability of poor and indebted nations to find debt relief…”
“South Africa won’t be able to meet its finance ministry’s debt targets and it may be undesirable for it to attempt to do so when the economy is being battered by the fallout from the coronavirus, according to an advisory panel appointed by President Cyril Ramaphosa.
“…the President’s Economic Advisory Council said spending cuts could hold back growth and have other adverse consequences.”
“Tens of thousands of Tunisians have lost their jobs in a worsening economic crisis exacerbated by efforts to stem rising cases of novel coronavirus, a key employers’ federation has warned.
““The first wave of the epidemic (March to June) resulted in the loss of 165,000 jobs,” Bechir Boujday, a member of the board of the employers’ federation UTICA, told AFP Friday night.”
“People in Gaza are searching through rubbish to find food as Palestinians battle unprecedented levels of poverty, the head of the UN agency for Palestinian refugees has said.
“Across Lebanon, Syria, Jordan, Gaza and elsewhere, Palestinian refugees are suffering at new depths because of the pandemic.”
“For many like Termos, facing an ongoing collapse in the value of the Lebanese currency, hyperinflation on the shelves, and mass unemployment, just scraping by is no longer an option.
““The issue is there is no hope of a turnaround,’’ said Rabiah Khaireddine, a musician from the Druze community. “The weeks since the explosion have made that clear. Everyone I know wants to leave.””
“Loan defaults in September [India] remained way above the pre-pandemic rates despite the loan moratorium having ended in August, indicating the prevailing economic distress and the continued effect of the six-month moratorium on repayment behaviour.”
“Indians are fast losing all confidence in the country’s economy.
“For the third consecutive month, in September, consumers in the country said they were more pessimistic than before about India’s economic prospects, revealed the Reserve Bank of India’s Consumer Confidence survey. The consumer confidence index was at a record low of 49.9% in September compared to 53.8% in July.”
“India has been one of the worst hit countries in the world by coronavirus. And now a mental health crisis is threatening its development…”
“With debt relief measures set to expire this month, Thailand’s financial woes, brought on by the Covid-19 pandemic, might end up being worse that the 1997 Asian financial crisis, known in Thailand as the Tom Yam Kung crisis…
“…according to the Bangkok Commercial Asset Management.”
“More than seven in 10 young people in Thailand indicated that Covid-19 is affecting their mental health and causing stress, worry, and anxiety, according to a Unicef-led survey released in April.
“What is worrying youngsters the most is the uncertainty of their family’s financial status, followed by worry about their education and future employment opportunities.”
This has been brewing for a while:
“China’s customs authorities have told several Chinese state-owned steelmakers and power plants to stop importing Australian coal, according to two industry newswire services.”
“The coronavirus pandemic has wiped out thousands of jobs across Australia, with up to 27 per cent of positions erased in some towns.
“One in every 30 jobs in New South Wales have been eliminated since March due to COVID-19 lockdowns. And on Lord Howe Island, a holiday paradise off the east coast of NSW, almost 30 per cent of jobs have disappeared.”
“Japanese wholesale prices fell 0.8% in September from the same month a year earlier, data showed on Monday…
“…marking the seventh straight month of year-on-year declines and heightening the risk the country will slide back into deflation.”
“…while banks’ capital and liquidity positions are more robust on the whole vis-à-vis 2008, it remains decidedly difficult to ascertain just how much they will eventually rack up in toxic debt as the coronavirus continues to shutter economic activity.
“As such, the liquidity phase of the crisis will soon give way to the solvency phase as liabilities start to flare up.
“…banks are now potentially staring down the barrel of a wave of collapses should conditions continue to deteriorate.”
“An economic crisis is always followed by a financial collapse somewhere:
Rising unemployment? Check. Soaring government deficits? Check. Corporate collapses? Check. So far the Covid-19 recession, one of the worst on record, has followed the script for a major economic downturn in every respect.
“Except this one: a financial crash. So far, the banks seem to be doing fine, so do the hedge funds, and the bond markets and the asset managers. Even the insurers seem OK.
“There are two potential explanations for that. It is possible the regulators and central banks have done such a fantastic job of managing the crisis that they have been able to steer us through the downturn without a collapse. Or else it is just a matter of time.
“Sure, it could be the former but somehow the second explanation is more convincing.”
“The global economy could shed more than 1% of output if international talks to rewrite cross-border tax rules break down and trigger a trade war, the OECD said on Monday…
“…countries agreed to keep up negotiating to mid-2021.”
“One-fifth of the world’s countries are at risk of their ecosystems collapsing because of the destruction of wildlife and their habitats, according to an analysis by the insurance firm Swiss Re…
“More than half of global GDP – $42tn (£32tn) – depends on high-functioning biodiversity, according to the report, but the risk of tipping points is growing.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back with a climate update tomorrow.
“The Data Show a Bleak Outlook for Global Economic Growth:
“…In 2020 almost all economies on the planet will shrink, according to a World Bank forecast. By contrast, in 2019 almost 4 out of 5 grew. It’s not an exaggeration to say this year has surpassed every recession in modern history.”
“The US debt is now projected to be larger than the US economy…
“…when the country eventually pulls out of its current health and economic crises, Americans will be left with a debt hangover.”
“The largest US banks haven’t been this cautious with their holdings in at least 35 years.
“Cash, Treasuries and other securities effectively guaranteed by the federal government now make up more than 35% of the combined balance sheets of the 25 biggest U.S. banks, according to data compiled by the Federal Reserve. That’s the biggest share in records going back to 1985…”
“With unemployment sky rocketing as a result of Covid-19, there has been a corresponding rise in evictions and mortgage defaults. A new study from Washington University in St. Louis’ Olin Business School of the loan-to-value ratios in the wake of the 2008 financial crash issues a cautionary warning about the troubles ahead.
“The study finds that the higher the outstanding mortgage is relative to the value of the home, the worse the future income growth and job mobility of the individual will be.”
“Mounting evidence suggests the May/June bounce was just that—a bounce, and not a return to prior trends… .even the small businesses that are hanging on are in major distress. A Lending Tree survey shows 43% have seen revenue drop by half or more, and 6% have already dissolved.
“We have never seen anything like this in history, with a possible exception (percentage-wise) during the Great Depression. This is not the material from which V-shaped recoveries are created.”
“”We are in a depression—not a recession, but a depression. And I think the dynamics of a depression are different than they are in a recession because depressions invoke a secular change in behavior.
“Classic business cycle recessions are forgotten about within a year after they end—the scars from this one will take years to heal.””
““The crisis is worsening, and the airline industry’s very survival is at stake,” said Paul P. Skoutelas, president of the American Public Transportation Association…
“Amtrak this month slashed operations and its workforce, furloughing 2,050 workers.
“The 11 percent reduction in its workforce came as a direct result of the coronavirus crisis, which has substantially cut into its revenue.”
“As the first chills of winter arrive, it’s increasingly clear that the global airline industry is as deep in the hole as it ever was…
“Airlines burned through $51 billion in the June quarter and will eat a further $77 billion in cash in the six months through December.”
“Tourism is one of the biggest industries in the world, but as millions are finding, it doesn’t offer much by way of job security.
“It’s not only guides and hotel workers who are suffering, but an army of support workers that would normally keep the sector running smoothly.”
“Passenger journeys on Britain’s railways fell during lockdown to the lowest level since the mid-19th century, according to official figures.
“The rail industry regulator said 35m journeys took place from April to June, which was just 8% of the total for the same period in 2019.”
“The UK economy is expected to stall in the coming months — and may even go into reverse — as it faces a triple threat of the COVID-19 second wave, the end of furlough, and Brexit.
““Going forward, the UK almost has this perfect storm,” Alejandra Grindal, senior international economist at Ned Davies Research, told Yahoo Finance UK.”
“The Bank of England’s Governor has warned the economy is at risk of stalling as he vowed to ramp up stimulus to limit any damage caused by another Covid wave.
“Andrew Bailey warned the risks to the recovery were “very much on the downside”…”
“‘Our worst nightmare’: will militias heed Trump’s call to watch the polls?
“With the US dangerously divided, experts fear the president’s remarks will inspire armed factions to show up at polling places…. FBI background checks – a direct indicator of gun sales – almost doubled year-on-year this summer, a reflection of the jitters that abound. As America arms itself, deadly weaponry is increasingly finding its way on to the streets, borne by self-styled private militias and culminating in violent clashes that have caused bloodshed in several US cities.”
“Latin America and the Caribbean will suffer the worst economic and health impact from the coronavirus, the World Bank said Friday, forecasting a nearly 8.0 percent drop in regional GDP.
““Our region is suffering the worst economic and health impacts of Covid-19 of anywhere in the world,” according to Carlos Felipe Jaramillo, the Bank’s regional vice president.”
“South Africa is heading Argentina’s way on the fiscal front if “serious measures” are not taken to rein in spending, bring down its debt and “to close the mouth of the hippopotamus,” Finance Minister Tito Mboweni has warned.
“…Mboweni stressed that tough decisions lay ahead for South Africa…”
“Turkey has once again raised the cost of borrowing by the back door as the lira sinks towards the threshold of 8 to the dollar. The lira has dropped 25 per cent this year and is already at record lows…
““[Authorities] are very worried about the lira,” said Paul McNamara, an emerging markets portfolio manager at GAM. “It’s finally beginning to register that they need to [further] tighten liquidity.””
“Why Turkey hired Syrians to fight for Azerbaijan…
“…the ones fighting on Turkey’s behalf in Libya most likely are hardened militias who see Turkish President Recep Erdogan’s self-styled Sunni-power leader image as palatable, and do so in support of Ankara’s regional geopolitical manoeuvres
“…the ones in Azerbaijan, reportedly hired by private contractors, are those who suffer from economic destitution back home, and see this as merely a job that pays.”
“While politicians and looters in Kyrgyzstan are exploiting this moment of uncertainty to scheme and sack or seize buildings and businesses, what is left of the government is working how it can to pull the country back from economic and healthcare catastrophes.
“Serious trouble is looming on both fronts.”
“The United States on Thursday slapped fresh sanctions on Iran’s financial sector, targeting 18 banks in an effort to further choke off Iranian revenues as Washington ramps up pressure on Tehran weeks ahead of the U.S. election.
“The move freezes any U.S. assets of those blacklisted and generally bars Americans from dealing with them, while extending secondary sanctions to those who do business with them. This means foreign banks risk losing access to the U.S. market and financial system.”
“Iran wants a “strategic partnership” with China – For China, Iran is just one piece on a large chessboard.
“Leaked drafts call for big Chinese investment in everything from roads and ports to telecoms and nuclear energy.
“The agreement would probably give China a stake in Iran’s oil industry, guaranteeing a market for its crude and refined products…. China’s new friendship has caused a measure of alarm in Washington.”
“U.S. Shale Faces Another Year Of Contraction In 2021…
“With Joe Biden leading in the polls, the odds of access to federal lands for U.S oil and gas producers getting curtailed now looks reasonably high.”
“Banks and other secured lenders hold greater portions of the debt that’s currently dragging oil and gas drillers into bankruptcy, which points to more contentious restructurings and asset sales as many of those lenders face significant losses, experts say.”
“The pace of defaults in the pandemic is faster than during the global financial crisis of 2008 to 2009, S&P analyst Sudeep Kesh said Friday in a phone interview…
““The credit environment was very, very vulnerable to some kind of economic shock” before Covid-19 led to lockdowns globally, Kesh said.
“That’s because companies were aggressively increasing their debt levels for years as interest rates remained low for so long, he explained.”
“The resurgence of Covid-19 across Europe and elsewhere is sparking fears of a reversal in the global recovery over the winter.
“While fiscal policy will continue to do much of the heavy lifting, economic uncertainty is putting renewed pressure on central banks to act. Here’s what we expect from them over the coming months.”
“Covid-19 has pushed the global economy into the worst downturn since the Great Depression, says The Economist. During the 2008 crisis, real house prices fell by 10%, and similar pain was expected this time. Yet house prices in developed countries rose by 5% in the second quarter. In Germany, they were up by an annual 11% in August.
There are two main causes. Firstly, massive monetary stimulus from central banks has kept borrowing costs low… Secondly, governments have stepped in with massive fiscal support.”
“As the days grow colder and darker in the northern hemisphere, so too, does the economic outlook, as the global economy switches from relief-and-surge mode to slowing activity, with renewed fears of a double-dip recession amid rising infections and new restrictions.
“The surge in 3Q was the easy part, but a sustainable recovery will be much harder.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back with a ‘Climate’ round-up on Monday.
“The coronavirus pandemic is costing the global economy $375 billion a month, and has seen some 500 million jobs lost since the crisis struck, the United Nations said in a policy brief on Wednesday…
“UN Secretary-General António Guterres, while launching the policy brief, called on everyone to draw “hard lessons” from the pandemic, for which the world was not prepared.”
“Federal Reserve Board Chair Jerome Powell warned Tuesday that a failure to provide further support for the coronavirus-wracked economy could lead to a downward spiral of layoffs and economic decline…
“Powell’s Tuesday speech is the latest appeal from the Fed chief to push lawmakers and the White House toward a long-sought deal on COVID-19 fiscal relief before Election Day.”
“As Trump abandons stimulus talks, renters and landlords face a financial cliff.”
““Disaster” is one word being used to describe the potential fallout for the retail sector from on-again, off-again economic stimulus talks in Washington, D.C.
““A total retail disaster is unfolding before our eyes that is completely avoidable,” Andy Polk, a senior vice president at footwear industry trade group FDRA, told CNBC.”
“U.S. anxiety rates surge in a year of pandemic, recession and violence:
“More than a third of American adults reported symptoms of anxiety disorder in July — a rate more than four times what it was in the first half of 2019.”
“U.S. Senator Elizabeth Warren is asking large U.S. banks to disclose how they performed under a recent Federal Reserve exam of their finances during the coronavirus pandemic.
“In a letter sent to 14 large firms Wednesday, Warren asked each to provide its results from a confidential Fed test, arguing the central bank’s “limited transparency” on whether banks could weather a severe economic downturn is insufficient.”
“More than 25m people in the euro area and the US are officially unemployed, according to figures published last week.
“But economists say the true number of people who have lost work because of the pandemic is far higher, after taking account of those whose jobs are temporarily protected by state-subsidised furlough schemes, those who have dropped out of the labour force and those who cannot work as many hours a week as they would like.”
“UK businesses took out 50% more loans in a three month span than they did in the entirety of 2019, new figures from the banking industry show.”
“Pubs and restaurants face a “cliff edge” in October with far more jobs likely to be cut than previously thought, MPs have been told…
“”Ninety-one percent of our members said that the job support scheme wouldn’t be able to help them retain jobs because of the additional costs and restrictions that they were facing.””
“Major European economies are downgrading already dire economic forecasts on the back of a second wave of coronavirus infections sweeping through the continent, with over 6.3 million cases now reported in the region.”
“German industrial output edged down in August… suggesting the recovery in Europe’s largest economy from the coronavirus shock is starting to lose steam.
“Industrial output fell by 0.2% on the month… A Reuters poll had forecast an increase of 1.5%…”
“Cuts to interest rates to combat the economic effects of Covid-19 will not be as effective as flooding the system with cheap liquidity and pumping up asset prices through quantitative easing, the president of the European Central Bank has said.”
“According to Robin Brooks, Chief Economist at the Institute of International Finance (IIF), the euro could become a deflation currency like the Japanese yen was before the Bank of Japan, under Kuroda’s leadership, launched unprecedented monetary stimulus in 2013.”
“A leaked document last month regarding the cash flow of Evergrande, China’s second-largest developer by sales, has highlighted concerns of the liquidity flows of Chinese real estate developers.
“That has raised the pressure on property developers’ ability to repay their debts in the bond markets going into 2021, analysts warn.”
“As China moves to tackle excessive borrowing in the real estate sector, it is walking a tightrope between providing cash-strapped local governments with revenues from land sales and keeping a lid on rising house prices.”
“The U.S. government is ramping up efforts to secure minerals critical to modern technology but whose supply is dominated by China—a stranglehold that miners warn could take years to break.
“Last week President Trump signed an executive order declaring a national emergency and authorizing the use of the Defense Production Act to speed the development of mines.”
“More than 3,500 companies have filed lawsuits against the US government over its tariffs on China in recent weeks, demonstrating the extent of unhappiness among businesses over Donald Trump’s trade wars.”
“The brewing trade fight with Vietnam is breaking across familiar lines in the U.S., with importers aghast and textile interests applauding.
“Late last week, with President Trump suffering from COVID-19, his administration moved ahead with an investigation into Vietnam’s practices in the timber industry and whether or not the Asian nation undervalues its currency, giving domestic producers an advantage.”
“Indonesian police detained nearly 400 protesters on Wednesday, some armed with molotov cocktails and sharp weapons, on a second day of heated demonstrations over a controversial new jobs law in Southeast Asia’s largest economy.
“The protesters are demanding the government revokes an “omnibus” jobs creation law that has outraged unions, who say it lopsidedly favours businesses and will hurt workers and the environment.”
“Argentina on the brink again: Publicly supported by the International Monetary Fund, Argentina reached a debt-restructuring deal with private creditors in August to end its ninth default, and the third in just 18 years. The country has pushed debt amortisations to 2025 and beyond and drastically reduced interest payments.
“However, since then, prices of the newly issued government bonds have plummeted and country risk – as measured by the Emerging Markets Bond Index Plus – has reached 1,350 basis points, far from the 10% exit yield used by Argentina in its debt negotiations. What went wrong?”
“Now demonstrators are pushing the administration of center-left President Carlos Alvarado to rule out altogether any deal with the Washington-based IMF over support for Costa Rica, whose budget woes have been exaggerated by the coronavirus pandemic.
“The government on Wednesday said the protests had been infiltrated by criminal groups.”
“For the first time in a century, there are no rigs searching for oil in Venezuela. Wells that once tapped the world’s largest crude reserves are abandoned or left to flare toxic gases that cast an orange glow over depressed oil towns.
“Refineries that once processed oil for export are rusting hulks, leaking crude that blackens shorelines and coats the water in an oily sheen.”
“Venezuela plans to launch the biggest-denomination note in its history, but owing to delays in printing and hyperinflation it will be worth less than 18p by the time it enters circulation.
“The value of the bolivar has collapsed after years of economic mismanagement and even beggars on the streets of Caracas refuse to accept the lower-denomination notes.”
“South Africa’s biggest trade union group, COSATU, has urged members to stay away from work on Wednesday to protest job losses, wage curbs and corruption cases.
“COSATU, which says it has more than one million members, is normally an ally of the governing African National Congress (ANC) but has criticised the government’s handling of the COVID-19 pandemic.”
“Eastern Sudan has been rocked by widespread protests over recent days, with demonstrators disrupting the country’s largest port, threatening to cut off oil supplies and calling for independence from Khartoum.
“Operations in Port Sudan resumed on Wednesday after negotiations between striking workers and the Khartoum government…”
“The near halt of Libya’s oil production and exportation amid the civil war could cause the country’s economic collapse, the head of the Tripoli-based Central Bank of Libya warned on Tuesday.
“Al-Saddiq al-Kabir told Tripoli’s parliament that shutdown of the country’s oil production and exportation since 2013 has cost Libya some $180 billion in losses, which he called “a bullet in the head” to the country’s economy.”
“Egypt: Crackdown intensifies as protests spread to rural poor.
“The rare participation of Egypt’s rural poor in recent protests shows “Egyptians have had enough,” human rights observers say. But authorities have consistently shown no hesitation in using a heavy hand to silence them.”
“Hundreds of impoverished Lebanese people have recently tried to make the sea crossing from the northern port city of Tripoli to Cyprus in order to escape the country’s financial meltdown…
“Most of them have been summarily “pushed back , expelled, or returned” by Cypriot coast guard forces “without giving them the opportunity to lodge asylum claims”, Human Rights Watch said in a statement.”
“Iraqi protesters clashed Tuesday with security forces outside a holy Shia Muslim shrine in the southern city of Kerbala, causing injuries to several people.
“At least 50 people were wounded in the altercations, two Iraqi security officials said. They spoke on condition of anonymity in line with regulations.”
“Clashes between Armenian and Azerbaijani forces have displaced half of the population of the breakaway Nagorno-Karabakh region, according to its rights ombudsman, as international mediators were set to hold their first meeting in Geneva.
“Russian president, Vladimir Putin, urged an end to a “huge tragedy” in an interview with state-run television on Wednesday…”
“Rival groups in Kyrgyzstan were jostling for power on Wednesday night after the prime minister resigned and the president went into hiding in the face of widespread demonstrations against alleged election rigging.
“Law and order was close to collapse as the Central Asian country appeared to be embroiled in its third revolution in 15 years.”
“The economic consequences of the coronavirus pandemic will change the profile of global poverty by creating millions of “new poor” who are relatively well-educated in urban areas of middle-income countries, the World Bank has warned.
“Overall, the pandemic will push between 88m and 115m people into extreme poverty this year, which the bank defines as living on less than $1.90 a day, according to a report it published on Wednesday.”
“Despite the global economic shock, the world’s 500 richest people are a combined $813 billion richer now than they were at the beginning of the year, according to the Bloomberg Billionaires Index.
“Total billionaire wealth surged to a fresh peak of $10.2 trillion in July, up from $8.9 trillion at the end of 2017, according to the report findings.”
“Oil companies are facing a perfect storm of low prices, low demand and long-term questions about the viability of their product. Those realities will inevitably push up the cost of capital.
“Two of the largest oil majors, Chevron and Exxon, have between them lost $9.4 billion in the second quarter alone.”
“The slump in demand for crude during the coronavirus pandemic has forced oil companies to contemplate the possibility that the fossil fuel market has peaked…
“But Saudi Aramco plans to boost its production capacity so it can pump as much of Saudi Arabia’s vast oil reserves when demand picks up…”
“The World’s Biggest Oil Trader Wants to Buy Your Used Car:
“Vitol Group, which traded more than 8 million barrels of oil and petroleum products a day in 2019, is getting into the used-car business… The used-car startup is the latest example of how the world’s biggest energy traders are trying to diversify…”
“Measures taken by Transocean [the world’s largest owner of deep-water oil rigs] to stave off a bankruptcy filing could be exactly what ends up sending the offshore drilling company into Chapter 11…”
“Huge aid packages saved airlines at a time when air travel came to a near standstill because of the coronavirus, but the worst is not over, analysts said.
“Travel data company Cirium found that 43 commercial airlines have failed — completely ceased or suspended operations — in 2020 so far, compared to 46 in all of 2019 and 56 throughout 2018.”
“World merchandise trade is expected to fall by 9.2 percent in 2020, followed by a 7.2-percent rise in 2021, the World Trade Organization said on Tuesday in its revised trade forecast.”
“We [at Markit] project that world real GDP will decline by 4.8% in 2020, a far worse outcome than the 1.7% contraction in 2009 at the height of the global financial crisis.”
“Top U.S. and European central bankers on Tuesday called for renewed government spending to support families and businesses as the battle against the coronavirus-triggered recession enters a newly critical phase.”
“…investors are enormously confident in the willingness of systemically important central banks – namely, the US Federal Reserve and the European Central Bank – to inject liquidity at the first sign of serious market stress, regardless of how much further they have to venture into the domain of experimental unconventional policy.
“Yet by building an ever-wider wedge between market valuations and economic fundamentals, central banks may be jeopardising their own credibility, amplifying wealth inequalities and increasing the risk to future financial stability.”
“Central banks became net sellers of gold in August for the first time in a year and a half, in the latest indication that demand for the metal is slowing following a record-setting rally.
“The latest data reflect the pullback of some major buyers as countries free up resources to deal with the coronavirus crisis.“
“The market is facing (at once and together): possible deflation, potential inflation, a second leg of the recession, delayed stagflation, a dollar decline, staggering business bankruptcies, a continued pandemic, a contested election, an unruly transfer of power, and a sickened authoritarian President trying to entrench his rule.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back with a ‘Climate’ round-up tomorrow.
“Top business leaders around the world say the global economy is experiencing its worst crisis in one hundred years and have called for urgent reforms to be implemented in the G-20 summit hosted by Saudi Arabia in November…
“Yousef Al-Benyan, chairman of the B20, said “the global economy is in its worst state in a century,” adding that “the challenging opportunity is to build back better, with real urgency required from policymakers and business leaders.””
“A crash in the dollar is likely and it could fall by as much as 35 per cent by the end of 2021.
“The reason: a lethal interplay between a collapse in domestic saving and a gaping current account deficit.”
“Corporate bankruptcies in the U.S. continue to grow amid the coronavirus pandemic as 22 new companies added their names to a growing list of bankruptcies in 2020 in the last two weeks, an S&P Global Market Intelligence analysis shows.
“A total of 509 [listed] companies have gone bankrupt this year as of Oct. 4, exceeding the number of filings during any comparable period since 2010.”
“Collapsing levels of trust are devastating America: The events of 2020—the coronavirus pandemic; the killing of George Floyd; militias, social-media mobs, and urban unrest—were like hurricanes that hit in the middle of that earthquake.
“They did not cause the moral convulsion, but they accelerated every trend. They flooded the ravines that had opened up in American society and exposed every flaw.”
“British finance minister Rishi Sunak said on Monday that the country’s public finances were vulnerable to small increases in interest rates because of a huge stock of government debt which has rocketed during the COVID-19 pandemic.
““Now that we have so much debt, it doesn’t take a lot for suddenly ‘yikes’ – we have to come up with X billion pounds a year to pay for higher interest,” Sunak said…”
“New UK car registrations fell 4.4% in September from a year earlier, according to the motor industry. That made it the worst September this century…
“September is normally second to March as the industry’s most important sales month, because licence plate changes typically prompt a spike in demand.”
“Japan’s two biggest automakers, Toyota and Nissan, will ask Britain to reimburse them for additional custom charges incurred if the UK government fails to reach a Brexit trade deal with the European Union, the Nikkei financial daily reported on Monday.”
“A bet by investors that Yoshihide Suga, Japan’s new prime minister, was poised to precipitate a wave of consolidation across the country’s “shattered” regional banking sector has begun to sour less than a month since he took power…
“All of this comes after years of increasingly ominous warnings about the health of Japan’s regional banks, which at the end of last year had more combined assets than the entire Italian banking system ($3tn) but whose businesses were described by the outgoing financial services minister in July as “shattered”.”
“Fresh coronavirus restrictions last month hurt activity in the service sector across much of Europe and parts of Asia, as consumers spent less on everything from eating out to haircuts, a fall that bodes ill for the global economic recovery.”
“Global equities look overall fragile as we are entering the winter period. Chances of a second lockdown are gradually increasing, which would lead to a complete disaster for economic fundamentals.
“China credit impulse and excess liquidity have been rising in the past two years, which has usually been a good signal for risky assets. However, China’s stimulus may not be enough to sustain the momentum in the coming months.”
“The vast wave of monetary stimulus that has kept emerging economies afloat since the coronavirus pandemic hit earlier this year has begun to ebb, just as pressure mounts on these countries to finance their recovery and their huge build-up of debt.
“The combination risks creating a damaging spiral of falling currencies and rising borrowing costs, triggering debt crises and defaults, economists have warned.”
“World Bank chief reiterates call to forgive poor countries’ debts.
“David Malpass says private banks, investment funds are not doing enough to help countries struggling due to coronavirus.”
“Hundreds take to Algiers streets despite ban on protests:
Demonstrators commemorate 1988 pro-democracy movement, denounce army role and demand deeper reforms… In March, the government banned street protests, saying the move was necessary to combat the spread of the coronavirus pandemic.”
“Fractured by internal political conflicts, confusing instructions and a lack of public trust in the government, Israel seems to be fraying further under a second national lockdown as the country struggles to cope with a surge in coronavirus cases and deaths that, relative to the size of the population, are among the worst in the world.”
“As we hurtle into autumn, families across Lebanon are bracing for an unfathomably bleak winter, where many will starve and struggle to warm themselves…
“More than half the country now lives below the poverty line, a rate which is rising. In Beirut, many are still living in the bombed-out shells of their homes.”
“The Syrian government has introduced rules limiting the amount of subsidised bread available per person at bakeries…
“…putting larger families at risk of starvation as the country’s crippling economic crisis deepens.”
“Belarus police have detained 317 people and deployed water cannon during mass protests against President Alexander Lukashenko.
“The opposition says Mr Lukashenko must quit, as his 9 August re-election was widely seen as fraudulent.”
“People protesting against the results of a parliamentary election in Kyrgyzstan have broken into a parliamentary complex and security headquarters in the capital...
“Earlier, at least 120 people were taken to hospital with injuries in the capital, Bishkek, after clashes broke out between police and protesters, health authorities said on Monday.”
“Could the Azerbaijani-Armenian conflict spill over into Iran? Azerbaijani Turks are Iran’s largest ethnic minority but they are increasingly protesting in support of Azerbaijan in its ongoing conflict with Armenia. This is likely to concern Tehran.
“Protests in support of Azerbaijan have rocked several cities in Iran including the capital Tehran and the northwestern city of Tabriz.”
“Humour, resignation, despair: Living with inflation in Iran:
““Last week, I examined a young woman with a benign lump in her breast at the clinic,” a doctor wrote on Twitter. “I told her, ‘Do another sonography in six months, it’s unlikely it will grow, but if it does you better operate’. She came back and said I want to operate now. When I asked the reason, she said, ‘Now I can pay for it, in six months I might not be able to’.””
“Iraq’s overarching message is that steadily pauperised and desperate Arab citizens who peacefully seek a total overhaul of their political systems will continue to face an increasingly militarised ruling elite that offers minor reform gestures without ceding any real power.
“As these and other Arab lands settle into a long stalemate, society, economy, and statehood all steadily deteriorate and could collapse.”
“Suicides rise after virus puts squeeze on India’s middle class.
“Even before Covid-19 hit, white-collar workers were under immense pressure as India’s growth stalled. Suicides among professionals have climbed for two consecutive years, averaging 23 a day in 2019, according to the National Crime Records Bureau.”
“Indonesian workers have launched protests in several cities to oppose the passage of a controversial new jobs law that the government says is vital to attract investment but critics view as too pro-business…”
“Dr. Pailin Chuchottaworn, head of an economic steering panel has told the Thai government reopen Thailand now order or face a total economic collapse…
“Dr. Pailin said that despite the lockdown having been gradually eased six times, the country’s output would not improve unless the country reopens…”
“A Chilean police officer has been detained on suspicion of attempted murder after he allegedly threw a teenage protester from a bridge during protests on Friday, the country’s Prosecutor’s Office has said.
“Videos purporting to show the incident at an anti-government protest in capital city Santiago have gone viral in Chile, sparking anger and a fresh round of demonstrations over the weekend.”
“Violent protests sparked by the murder of a high-profile legal scholar are threatening to push Haiti into a spiral of instability, Special Representative Helen La Lime told the Security Council on Monday…
““The slaying of Maître Dorval constitutes a tragic loss for Haitian society as he represented an example of civic engagement and commitment to the promotion of the rule of law,” she said…”
“Bonds were a safety net when stocks fell, Investors fret they aren’t anymore.
“A reliable link between stocks and government bonds that defined a popular investment strategy for decades has broken this year. Some investors worry the rupture is permanent.”
“Global debt substantially increased after the 2008-09 global financial crisis (GFC), amounting to more than three times world GDP in 2018. Nonfinancial corporate debt was a main contributor to this expansion.
“Practitioners and academics have increasingly raised concerns that the larger firm indebtedness could become a threat to the global economy and trigger a financial crisis comparable to the GFC. The COVID-19 pandemic has only heightened these fears.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back with a ‘Climate’ round-up tomorrow.
“Major gaps in the international debt restructuring framework are increasing risks of a systemic sovereign debt crisis, International Monetary Fund officials warn… the IMF says not enough has been done to prevent holdouts from derailing debt restructuring processes.
“Senior IMF officials, including managing director Kristalina Georgieva, say reform of the international debt architecture is urgently needed.
“Massive Layoffs Are Underway Across the U.S., Threatening the Already Frail Recovery:
“…employment gains from reopening were easy [in the US]. Now, companies that are suffering deeper fundamental impacts from the pandemic—in sectors like travel, hospitality and energy—are now adjusting to a new normal. In many cases, that means permanent cuts.”
“The jobs market is far bleaker than the headline stats show:
“Amid the pandemic, workers have been forced from full-time jobs into part-time positions out of necessity; others have not searched for a job in the past month because of availability, skill or personal reasons; some have put their job-searches on hold within the past four weeks despite wanting to work; and others have put their job-search on hold altogether over the past 12 months.
“BLS excludes all of these millions from its tally.”
“Credit-rating agency Moody’s Investors Service on Thursday downgraded New York City’s debt one notch, citing “substantial financial challenges,” faced by the metropolis amid the worst pandemic in more than a century.”
“A trio of Democrat-run U.S. states could go deeper into debt with billions of dollars in new issuance to plug holes in their coronavirus-hit budgets, if a new round of federal aid fails to materialize this year.”
“As big U.S. commercial banks close their books on the third quarter, analysts expect them to report a 30% to 60% plunge in profits on the year-ago period due to the pandemic-induced recession and near record low interest rates.
“That slump in third quarter net income comes even though lenders are not going to make outsized provisions for expected loan losses as they did in the first and second quarters.”
“Corporate America, city governments and federal and local law enforcement across the country are making plans to deal with political instability, civil unrest and violence around the upcoming presidential election.
“Concerns range from isolated violent incidents to a long stretch of mass protests, violent confrontations between extremists and widespread property damage, if the outcome of the election remains unclear or is hotly contested for weeks or months.”
“If Democratic candidate Joe Biden becomes president next January, mending U.S. trade relations won’t be anywhere near the top of his to-do list.
“He has stated unequivocally that he would not enter into any new trade agreements “until we’ve made major investments here at home, in our workers and our communities.””
“…whoever wins the November election will be forced to consider a much more active approach to bilateral relations with Mexico. For the United States, it is vitally important that Mexico does not fall into economic and financial crises as it has done so often in the past…
“It is fair to say that nobody north or south of the Río Grande wants to see a repeat of the 1994 peso crisis…”
“‘It’s a ghost town’: City of London market reacts to Covid slump:
““Hibernating through the winter is not an option for our economy,” warned Catherine McGuinness, policy chair at the City of London Corporation, the Square Mile’s governing body and landlord of Leadenhall market. “We are building up an economic crisis which has the potential to impact more people than the health one.
“It is vital that we protect livelihoods as well as lives.””
“Nearly 300,000 jobs in the UK’s ailing hospitality trade will be lost unless the government moves quickly to save them with a sector-specific bailout, some of the industry’s largest pubs and restaurant groups have warned the prime minister.”
“The euro area’s seasonally adjusted unemployment rate rose for the fifth consecutive month in August, reaching a level of 8.1%, according to Eurostat…
“Spain had the highest jobless rate in August among countries reporting data at 16.2%.”
“The eurozone is sliding further into a debt-deflation trap, risking a protracted economic depression in the southern countries and a slow-motion insolvency crisis…
““The European Central Bank has completely lost control of the inflation process. It is very serious,” said Professor Ashoka Mody, the International Monetary Fund’s former deputy director in Europe…
“The pile of negative yielding euro zone government bonds rose in September to just over 6 trillion euros from around 5.4 trillion a month earlier, Tradeweb data showed on Friday.”
“The European Central Bank has identified several scenarios that would require it to launch a digital euro and said it was confident of overcoming any challenges as it started a public consultation on the idea…
““A digital euro would preserve the public good that the euro provides to citizens: free access to a simple, universally accepted, risk-free and trusted means of payment,” the ECB said.”
“Governments trying to contain the resurgence of the coronavirus pandemic are facing increased political opposition to the measures they think are necessary to control an alarming new wave, with the number of new infections nearing all-time-highs in many countries.”
“Hundreds of Small Protests Mushroom Across Israel Over ‘Draconian’ Restrictions.”
“Venezuela’s Food Chain Is Breaking, and Millions Go Hungry:
“A report found 13% of children under 5 are stunted; oil-rich nation is ‘on the edge of an irreversible catastrophe’”.
“The second of three ships loaded with gasoline from Iran approached fuel-starved Venezuela on Wednesday amid simmering social unrest over a lack of goods and services that’s sparked protests across the South American nation.”
“Iran State Media Express Fear of Protests Amid International and Domestic Crises.”
“Thousands of Iraqis gathered in the capital and the country’s south on Thursday, marking the first anniversary of the start of unprecedented protests demanding the fall of the ruling class.
“The protests, which lasted months before running out of steam, will be revived, demonstrators said, if no reform is carried out by the current government.”
“Egyptian security forces have used teargas, batons, birdshot and on at least one occasion live ammunition, and arrested hundreds of protestors and bystanders to disperse rare scattered demonstrations over several days, Amnesty International said today.
“Sources told Amnesty International that security forces killed two men, while hundreds were subjected to arbitrary arrests and enforced disappearances.”
“October 1 protests hit Abuja, southern states [Nigeria]:
“Following the dramatic protests, Lagos-based rights group, the Socio-Economic Rights and Accountability Project yesterday condemned attacks on peaceful activists and journalists…”
“The Dubai-based construction company that helped build the world’s tallest building and other engineering marvels in the United Arab Emirates announced Thursday it would enter liquidation, the final step in a long collapse from the country s economic crisis a decade ago hastened by the coronavirus pandemic.”
“UAE Bets Big On Space Tech To Diversify From Oil.”
[Well done, UAE. Sensible policies for a brighter tomorrow!]
“Shares in BP and Shell crashed to 25-year lows as oil prices fell.
“The two energy supermajors saw their shares sink as the price of Brent crude dropped back below $40 per barrel.”
“Lonestar Resources US Inc LONE.O filed for Chapter 11 bankruptcy protection on Thursday, joining a clutch of shale companies that have succumbed to weak crude prices as COVID-19 pandemic crimps fuel demand.”
“Oil Companies Cut More Jobs As Demand Recovery Remains Uncertain:
“Suncor Energy is cutting as much as 15 percent of its workforce—a total of 2,000 jobs—as demand destruction and low prices have created an adapt or die scenario for oil companies to contend with.”
“Shipowners are facing rising labor costs as widespread Covid-related restrictions limit movement of seafarers and make crew swaps more expensive.
“Because relieving and replacing ship workers has become so difficult during the pandemic, daily crew costs have increased 10% from January to mid-July, up to $3,144 for capesize dry-bulk carriers, according to the Baltic Exchange…”
Quite a few articles lately flagging up Commercial Mortgage-Backed Securities as a risk:
“Prior to the 2008 financial crisis, credit-rating firms engaged in a “race to the bottom,” easing their grading standards for mortgage-backed securities and collateralized debt obligations to avoid losing market share…
“Despite attempts by regulators in subsequent years to hold the industry to account, the problem has persisted.”
“Emerging market debt is a bubble destined to burst. Local accommodative monetary policies are increasing financial leverage without providing concrete solutions to the economic recession.”
“A world awash with debt: can governments learn to rule while drowning in the red?
“…If growth, inflation and sustained austerity are all implausible strategies for rapidly dealing with the debt, then one other logical avenue remains open, at least in principle: namely default.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back with an ‘Climate’ round-up on Monday.
“The best is already over for a global economic recovery that started off at a sprint and is turning into a slog.
“That’s the warning from Wall Street economists heading into the final months of a traumatic year. Some $20 trillion in stimulus from governments and central banks has pulled the world’s economies most of the way back to pre-pandemic levels. But for multiple reasons, the last stretch is set to be the hardest…
“With their revenues squeezed, businesses could face problems repaying debts — leading to more bankruptcies, and making lenders more reluctant to extend credit even to viable firms.”
“Turmoil in money market mutual funds sparked by the coronavirus pandemic shows that decade-old reforms to the $4.4 trillion (£3.42 trillion) industry may not be enough to avert major outflows during a future crisis, Deputy U.S. Treasury Secretary Justin Muzinich said on Tuesday.
“The remarks were the latest to raise expectations a new round of rulemaking may be on the way for money funds…”
“2020 Retail Bankruptcies Could Outpace 2008 Financial Crisis Aftermath…
“This is yet another example of the Covid-19 pandemic speeding up trends that were chugging along before.”
“Employee burnout is on the rise given what can seem like an endless number of stressors at work, at home and in managing daily life during a global health crisis.
“In the U.S., which is experiencing an economic collapse and unemployment crisis not seen in decades, people who remain on the job are weathering a new type of stress the longer the pandemic goes on: survivor’s guilt in the workplace.”
“During the same March to April time period that saw billionaires’ gains spike, more than 22 million Americans lost their jobs… eight million more people are [still] unemployed today than were jobless in February.
“The same price shifts that made luxuries like food delivery cheaper have caused the inexpensive grocery store items that poor households rely on to become pricier.”
“Walt Disney has announced it will lay off 28,000 employees, mostly at its US theme parks.
“Disney cited the parks’ limited visitor capacity and uncertainty about how long the coronavirus pandemic would last as reasons for the layoffs.”
“American Airlines Group Inc. and United Airlines Holdings Inc. will go forward for now with a total of more than 32,000 job cuts Thursday after lawmakers were unable to agree on a broad coronavirus-relief package, the airlines told employees.
“The airlines’ moves put more pressure on lawmakers who have negotiated on and off for months over an aid package…”
“The collapse in aviation caused by the coronavirus pandemic could wipe out 46 million jobs worldwide, according to new research that highlights just how damaging a prolonged downturn in air travel and tourism is for the global economy.
“The Air Transport Action Group (ATAG), a Geneva-based coalition of aviation industry organizations, said in the report published Wednesday that more than half of the 88 million jobs supported by aviation could be lost…”
“Autumn has arrived in the northern hemisphere, and with it a fresh slump in commercial flights that will alarm the world’s oil refineries as they struggle with a glut of jet fuel that’s crushing profitability…
“The drop in flights would also alarm Saudi Arabia and Russia, the leaders of the OPEC+ alliance…”
“Saudi Arabia’s economy shrank 7 percent in the second quarter from the same period a year earlier, while unemployment soared to a record high, government figures released on Wednesday showed.
“The oil sector of the world’s largest crude exporter shrank 5.3 percent from April through June as it was knocked sideways by the coronavirus pandemic…”
“‘A storm is coming’: Iraqis vow to rekindle protest movement on anniversary…
“The demonstrators demanded jobs, better services, an end to endemic corruption and an overhaul to the sectarian political party system in place since 2003.”
“A wave of demonstrations has erupted across Venezuela as angry citizens flout lockdown restrictions to demand an end to worsening shortages of everything from electricity and water to fuel and household supplies.”
“Nigeria needs to make the best of its oil wealth before it becomes worthless, the federal government has warned, adding to a growing concern about the future of the world’s most used and most traded commodity.”
“French energy giant Total SE (formerly Total S.A.) spread more doom and gloom into the oil markets today, foretelling of the oil industry’s ultimate horror—peak oil demand.”
“Royal Dutch Shell has said it plans to cut 7,000 to 9,000 jobs as it responds to challenges including the slump in oil demand amid the Covid-19 pandemic.”
“The UK economy suffered a record-breaking collapse in the second quarter, slumping 19.8 per cent as the coronavirus pandemic hammered demand and left swathes of the economy unable to operate.”
“More than a third of UK employers plan to make staff redundant over the next three months, according to research warning of a cascade of job losses caused by the coronavirus pandemic.
“With a month to go until the end of the government furlough scheme on 31 October, 37% of more than 2,000 managers polled by YouGov said they were likely to make staff redundant by the end of the year.”
“Financial services firms operating in the U.K. have shifted about 7,500 employees and more than 1.2 trillion pounds ($1.6 trillion) of assets to the European Union ahead of Brexit — with more likely to follow in coming weeks, according to EY.
“About 400 relocations were announced in the past month alone…”
“Eurozone economic confidence rises at slowest pace for five months… adding to signs that the recovery in the bloc’s pandemic-stricken economy is losing momentum.”
“The European Central Bank could be about to tweak its main policy objective as it combats the economic fallout from the coronavirus crisis…
““In the current environment of lower inflation, the concerns we face are different (than in 2003) and this needs to be reflected in our inflation aim,” ECB President Christine Lagarde said at a press conference on Wednesday.”
“Italy Sept EU-harmonised CPI falls to -0.9% y/y, far below forecasts as deflation deepens.”
“Israel has passed a law that bans mass protest during the country’s coronavirus lockdown in a move government opponents have claimed exploits the health crisis to suppress demonstrations calling for Benjamin Netanyahu to resign as prime minister.”
“Angry protesters stormed into a bank in downtown Beirut on Wednesday to demand that their savings, which has been trapped for months, be given back to them.
“The National News Agency said the protesters forced their way into the bank’s headquarters without naming it.”
“One of Thailand’s most high-profile critics said the government was facing a “perfect storm” of protests and economic distress caused by the coronavirus pandemic, predicting it would not last the full term after losing the trust of its people.”
“Protests and Covid leave Hong Kong stuck in recession… Hong Kong’s economy was already in recession when the pandemic hit in January.”
“China’s yuan records best performance against dollar since 2008… The Chinese yuan has been making a comeback against the dollar. Is that because China has been better than the U.S. at managing the economic fallout of the coronavirus pandemic?
“That’s at least what some analysts think has been happening, following the yuan’s surging value over the past few months.”
“China’s central bank and banking and insurance regulator set up a counter-cyclical capital buffer mechanism on Wednesday to help banks fend off risk and to keep the financial system stable.
“The buffer aims to protect the banking sector from periods of excess aggregate credit growth that could imply rising financial risk.”
“Business sentiment in Japan is recovering slower than expected in a worrying sign that the bounce back from Covid-19 will take longer than hoped. The closely watched Tankan survey of large manufacturers rose by only seven points from -34 to -27 in the third quarter, compared with consensus expectations of -23.
“The figures suggest Japanese companies are still struggling and the shock from Covid-19 is calcifying into a more traditional economic downturn.”
“The Tokyo Stock Exchange suspended share trading for the full day on Thursday as a glitch in its electronic trading system caused the worst outage ever suffered by the world’s third-largest stock market.
“The shutdown frustrated investors looking to buy back shares after the first U.S. presidential debate, and could tarnish the exchange’s credibility…”
“Brazil’s unemployment rate hit a record 13.8 percent from May to July as Latin America’s biggest economy suffered the impact of the coronavirus pandemic, according to official figures released Wednesday.
“The rate is the highest since the data set began in 2012, and two percentage points above the same period last year.”
“Nearly half of Argentina’s population was living in poverty in the second quarter, a sharp increase from last year, as the country’s longstanding economic crisis deepened due to the coronavirus pandemic.
““There is greater general poverty. We are all a little poorer – we already were last year – and now with greater inequality,” said UCA researcher Agustín Salvia.”
“Faced with a collapse in tourism and the worst economic crisis in decades, some Cuban entrepreneurs are shaking up their business models, trying to create opportunity during pandemic times.
“‘El Jibaro’ restaurant has started bottling its own line of cocktails. Co-owner David Roque says ‘ready-to-drink’ cocktails to go are a new concept in Cuba.”
“More than 2-million South Africans lost their jobs in the second quarter, bringing into sharp focus the devastating economic blow of one of the harshest Covid-19 lockdowns in the world.
“…the total number of jobless people now stands at 14.1-million — essentially one in four of SA’s 60-million population.”
“Most major housing markets won’t keep up with consumer price inflation in 2021 and are faced with multiple downside risks despite rising strongly this year amid the coronavirus pandemic and rock-bottom interest rates, Reuters polls showed.
“Over 1 million people have died and more than 33 million have been infected by the coronavirus which has led to supply chain disruptions, stalled economic activity, pushed the world economy into its deepest recession and left many millions jobless.”
“Global funds recommended cutting equity allocations to the lowest since early 2010 and increasing bond holdings to their highest since then, according to a September Reuters poll which found a correction in world stocks before year-end was likely.
“Over 70% of 21 funds who provided a view said a correction in world stock markets by end-year was likely.”
You can read the previous ‘Economic’ thread here and visit my Patreon page here. I’ll be back tomorrow with a climate round-up.