Daily updates on climate change and the global economy.

8th March 2022 Today’s Round-Up of Economic News

The war in Ukraine will create a global food crisis, the boss of one of the world’s biggest fertiliser companies has warned.

“Yara International, which operates in more than 60 countries, has warned of disruption to supplies from Russia of essential raw materials for fertiliser production.

“Svein Tore Holsether, CEO of Yara International, said: “For me, it’s not whether we are moving into a global food crisis – it’s how large the crisis will be.”


Rising oil prices could affect thousands of products.

“Climbing prices at the pump are the most visible reminder of the rising cost of oil. But what people can’t see is also costing them. Petroleum derivatives hide in thousands of everyday goods and household products, from microfiber to moisturizer to medicine.”


Russia-Ukraine war sparks surge in coal price to unprecedented levels.

“The spot price for shipments leaving the Port of Newcastle in New South Wales soared to US$418 ($564) a tonne late last week, eclipsing the previous record of US$269 ($362) a tonne, which was set only four months ago.”


Nickel Tops $100,000 as Big Short Tests 145-Year-Old Exchange.

“Nickel spiked briefly above $100,000 a ton on the London Metal Exchange amid a short squeeze that’s embroiled a major Chinese bank and encouraged rule changes from one of the world’s top commodity exchanges.”


Gold hits $2,000 amid market scramble for precious metals.

“The price of gold broke through $2,000 an ounce on Monday as London’s market suspended the sale of Russian bars. Gold crossed the threshold on Monday morning, with some analysts predicting it will surpass a record high struck during the early months of the pandemic.”


IMF says war in Ukraine will have ‘severe impact’ on global economy…

“”While the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious,” the IMF said in a statement after a board meeting chaired by Managing Director Kristalina Georgieva.”


Tightening financial conditions sound alarm for world economy…

“Financial conditions is the umbrella phrase for how metrics such as exchange rates, equity swings and borrowing costs affect the availability of funding in the economy. How loose or tight conditions are dictate spending, saving and investment plans of businesses and households.”


US gasoline hits a record: $4.14 a gallon.

“US drivers have never paid this much for gasoline. The price for a gallon of regular gas now stands at $4.14, according to the Oil Price Information Service, the firm that collects and calculates prices for AAA. That breaks the previous record of $4.11 a gallon that has stood since July 2008.”


All farmers [Ireland] to be told to plant crops amid fears of food security crisis.

“All Irish farmers will be asked to plant some of their land in wheat, barley and other grains, as part of emergency plans being drawn up by the Government to offset a predicted food security crisis in Europe amid Russia’s ongoing assault on Ukraine, according to a report in the Business Post.”


UK risks falling into ‘dystopian economic collapse’ over gas supply, former Tory minister says.

“Sir Alan Duncan, who has also worked as an energy trader, said “we have to pull the emergency cord” in order to sustain gas supplies across Europe. He warned the government to be cautious “not to sanction ourselves” amid calls for further measures against the Kremlin for its brutal invasion of Ukraine.”


Ukraine crisis triggers ‘stagflationary shock’ for European stocks…

“Europe is probably already in recession,” said Luca Paolini, chief strategist at Pictet Asset Management. “Consumers aren’t going to go out and spend the savings they’ve built up when there’s a war happening on their doorstep, and that’s before you consider a big increase in inflation.””


Shell Starts to Limit Sales of Heating Oil in Germany.

“Shell Plc is limiting sales of heating oil to some wholesalers in Germany, the latest sign of how Russia’s invasion of Ukraine is causing chaos in the European energy market… German heating oil is a near-identical product to diesel in Europe, prices of which point to a market that’s running low on inventories.”


Russia’s Deputy Prime Minister Alexander Novak on Monday has said that Russia could cut natural gas supplies to Germany via the Nord Stream 1 pipeline.

““In connection with unfounded accusations against Russia regarding the energy crisis in Europe and the imposition of a ban on Nord Stream 2, we have every right to take a matching decision and impose an embargo…” Novak said.”


Ukraine invasion fuels ‘fastest growing refugee crisis in Europe since second world war’ … the UN’s high commissioner for refugees has warned.

“Filippo Grandi said on Sunday that “more than 1.5mn” refugees had fled Ukraine in the past 10 days, and officials in neighbouring countries said they expected the number to rise rapidly.”


Russia braces for deep recession amid corporate exodus.

“With the Russian ruble sinking to fresh lows and global companies exiting the market, forecasts of a looming collapse of the $1.7 trillion Russian economy have grown since the Kremlin launched its military attacks on Ukraine less than two weeks ago.”


A Russian debt default could spill over into emerging markets including China, according to Yale economist Stephen Roach.

“”If Russia does default on its debt…there will be broad spillover effects to sovereign debt in emerging markets around the world and China will not be unscathed from that,” he told “Squawk Box Asia” on Sunday.”


…the global financial system looks set to split in two as Moscow turns to a Chinese payments system as a substitute for Visa and Mastercard.

“Lenders including Sberbank and Alfa Bank plan to move to China’s UnionPay for their customers’ bank cards – although an expert today said the move would take time and cause severe economic disruption. Russia has also been recently ejected from Swift…”


China can’t count on global markets for food security, Xi Jinping says…

“The world has entered a new era of turbulence and change which makes domestic reform and development a challenging task,” state broadcaster CCTV quoted Xi as telling the members of the Chinese People’s Political Consultative Conference.”


Taiwan foundries may be haunted by power shortage.

“A recent unexpected large-scale power outage in Taiwan has rekindled worries among foundries that they could suffer not only insufficient power supply during the peak power-consumption season in summer but also more blackouts without warning…”


Hundreds of bakeries shut in Sri Lanka after cooking gas runs out.

“Nearly 1,000 bakeries have closed in Sri Lanka due to a severe shortage of cooking gas, an industry association said on Monday, as the impact of dwindling foreign exchange reserves ricochets through the country’s economy.”


Oil Shock Risks Becoming ‘Nightmare’ for India’s Central Bank.

“The Ukraine war’s impact on global supply chains could force India’s central bank to raise its inflation forecast, but may leave little scope for it to tighten monetary policy amid a deteriorating global growth outlook…”


The cost of insuring [Turkey] against a default hit its highest level since the global financial crisis in 2008 on Monday…

“The war threatens to stoke inflation, which had already hit 54% in February… As oil prices soar, major energy importer Turkey is facing a higher fuel bill and the loss of tourists from Russia and Ukraine, two of its key market…”


‘We need bread’: fears in Middle East as Ukraine war hits wheat imports.

“Concerns are growing across the Middle East and north Africa that the war in Ukraine will send prices of staple foods soaring as wheat supplies are hit, potentially fuelling unrest.”


Forty Moroccan cities see protests over spiralling living costs, caused by drought and Ukraine war…

“”We call for annulling the skyrocketing increases in many vital goods, and we demand an increase in the wages of workers and employees,” said the Moroccan Social Front, a non-governmental organisation that led Sunday’s protests.”


Rising fuel costs are crippling Africa’s economies.

“Sub-Saharan Africa is experiencing a record surge in fuel prices as the Russian invasion of Ukraine drives up already steep energy costs… Rising fuel prices are hitting Africans hard at a time when the prices of basic foods have also risen dramatically.”


Will the Ukraine war derail the green energy transition?

“…Economist Dieter Helm, professor of energy policy at Oxford university, says the shift away from fossil fuels has rarely looked more complicated. “The energy transition was already in trouble — 80 per cent of the world’s energy is still from fossil fuels,” he says.”


Oil industry pleads with Wall Street to stop holding back investment. Oil industry chiefs have called on Wall Street to stop holding back investment in new crude supply as “chaos” and “bedlam” threaten to overwhelm energy markets amid fears the west will ban Russian oil exports following the invasion of Ukraine.”


Inflation’s last fling… Imagine how quickly inflation could turn to deflation when the oil-price blow-off ends, as it must…

“…the only investable assets that won’t be collapsing will be the dollar and gold. The former will soar not because it is no longer crap, but because urgent demand from borrowers unable to roll loans will put it in a short-squeeze of epic dimensions…

” Deflation will impose hardships far more difficult to avoid than merely curtailing spending on certain items. It will be bankruptcy writ large, a rebuke to excesses that have been accumulating in the financial system for more than 30 years.”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

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5th March 2022 Today’s Round-Up of Economic News

Global recession risks rise after Russia invades Ukraine.

“U.S. and European economies are facing a heightened risk of a recession this year as Russia’s invasion of Ukraine severely disrupts supply chains and causes inflation to accelerate to the fastest rate since the 1970s.”


War in Ukraine threatens the global financial system…

“The main point that investors need to understand, notes Adam Tooze, a professor at Columbia University, is that “Russia’s reserve accumulation, like reserve accumulation by other oil and gas producers such as Norway or Saudi Arabia, is a source of funding in western markets — [and] part of complex chains of transactions that may now be put in jeopardy by the sanctions.””


Why Ukraine could spark a global financial crisis.

“In short, the ripple effects of this war are potentially enormous, and many more will probably become apparent in the coming days and weeks. With the global economy still recovering from the pandemic and already having to deal with substantial inflation, the markets have been highly volatile.”


If Russian Currency Reserves Aren’t Really Money, the World Is in for a Shock.

“Sanctions have shown that currency reserves accumulated by central banks can be taken away. With China taking note, this may reshape geopolitics, economic management and even the international role of the U.S. dollar.”


Russia Energy Chaos Triggers the Biggest Market Shock in Decades. Disruption resembles oil crises of 1970s, says Goldman Sachs

“Russia’s invasion of Ukraine and the resulting international backlash has plunged energy markets into chaos, threatening dire economic consequences that rival those of the 1970s oil shocks.”


Putin’s energy shock is broadening into a world food crisis, so brace for rationing…

“The world faces what amounts to a commodity “black swan” across the gamut of primary resources. Oil, gas, coal, and the “ags” are all spiraling higher together, with metals catching up fast. It is a systemic stagflation shock, an intractable problem for central bankers.”


Food prices jump 24.1% yr/yr to hit record high in Feb, U.N. agency says. World food prices hit a record high in February, led by a surge in vegetable oils and dairy products, to post a 24.1% increase year-on-year, the U.N. food agency said on Friday.”


Rice soars as Ukraine war starts scramble for any grains. Rice is the latest commodity to get swept up in the turmoil of Russia’s invasion of Ukraine.

“Prices for rice are surging because traders are betting it will be an alternative for wheat, which is becoming prohibitively expensive. Exports of wheat from Russia and Ukraine account for more than a quarter of the crop’s trade worldwide and a fifth of corn sales.”


How the war in Ukraine will hammer British consumers with higher costs.

“Families face the largest cost of living squeeze for a generation. Even prior to the invasion of Ukraine, a combination of booming global demand, Covid-battered supply chains and an energy crunch were set to push UK inflation past 7pc.”


British and European gas prices both hit record highs on Friday as the war in Ukraine continued to wreak havoc on energy markets, threatening to exacerbate the cost of living crisis.

“The UK National Balancing Point (NBP) benchmark soared above 500p a therm at one point, smashing through the previous all-time high set in December…”


European households have been urged to turn down their thermostats to prevent the Kremlin from using its gas as an “economic and political weapon” in an unprecedented intervention by the International Energy Agency.

“It said a one degree reduction could reduce Europe’s gas consumption by about 10bn cubic metres a year.”


Europe Stocks See Biggest Ever Weekly Outflow as War Intensifies.

“The escalation of the war in Ukraine is pushing investors to exit European stocks like never before amid rising inflation risks, according to Bank of America Corp. strategists. European equities had their largest outflows on record at $6.7 billion in the week to March 2…”


Fitch, Moody’s Slash Russia’s Sovereign Debt to Junk.

“”The multi-notch downgrade of Russia’s ratings and maintaining the review for further downgrade were triggered by the severe sanctions that Western countries have imposed on Russia,” including on its central bank and some large financial institutions, Moody’s said in a statement.”


Financial armageddon looms as investors wait for Moscow’s ‘uninvestable’ stock market to reopen.

“The prolonged cessation of trading is the longest closure of the exchange since 1998, when Russia was in the midst of a severe financial crisis. It led to the Kremlin devaluing the ruble and defaulting on its debt…”


Russia’s largest airline yanked from global reservation systems. The reservation system that is the backbone of airlines around the world has terminated its agreement with Aeroflot, crippling the majority government-owned carrier’s ability to sell seats.”


Russia halts deliveries of rocket engines to the U.S…

“”In a situation like this we can’t supply the United States with our world’s best rocket engines. Let them fly on something else, their broomsticks, I don’t know what,” Dmitry Rogozin, head of the state space agency Roscosmos, said on state Russian television.”


Russian Ministry Recommends Suspending Fertilizer Exports.

“Russia could suspend exports of fertilizers, state news agency TASS reported, a move that would remove a large portion of global supply from the market… Such a move would likely stoke prices, potentially hurting farmers worldwide.”


War-Hit Crop Superpower Ukraine Faces Struggle to Even Sow…

“From fields to processing plants to ports, Russia’s invasion is paralyzing Ukrainian agriculture, an industry that produces tens of millions of tons of grains and oilseeds and ships crops across the globe.”


Food Protectionism Is Spreading as Hungary Bans Grain Exports.

“Governments around the world are taking steps to safeguard domestic food supplies… Protectionist measures — which already picked up in recent years as the Covid-19 pandemic sparked worries about local supplies and high prices — could spell more bad news for global food trade.”


Asia faces food shortages as Russia-Ukraine fighting hits shipments.

“Heavy fighting closes off parts of the Black Sea, affecting shipments of wheat, oats and other cereals to Asia upsetting supply chains. Disturbance could create domino effect on production of other consumer foods…”


China ag minister says winter wheat condition could be worst in history.

“The condition of China’s winter wheat crop could be the “worst in history”, the agriculture minister said on Saturday, raising concerns about grain supplies in the world’s biggest wheat consumer.”


China cuts economic growth goal as it tries to reverse slump.

“China has cut its annual economic growth target to its lowest level in decades as Beijing tries to reverse a slump at a time when Russia’s war on Ukraine is pushing up oil prices and roiling the global economy.”


In China, Fewer Are Willing to Splurge as Economic Worries Mount.

“More than two years into the pandemic, China has a problem that would seem very unfamiliar in the U.S. It can’t convince its people to spend more money. From canceled vacation trips to cutting back on dining out, Chinese consumers have remained cautious.”


[Nigeria] Energy crises: Electricity output plunges…

“…more businesses and households are thrown into skeletal operations and darkness. This comes against the backdrop of worsening supply shortages of the premium motor spirit, as long queues at the various petrol stations across the country is adversely affecting businesses and livelihood.”


In crisis-hit Tunisia, IMF deal hangs in the balance.

“The Tunisian government’s official programme to the IMF, leaked in early January, details a fiscal proposal which includes cutting energy subsidies. The government document also specifies freezing salaries and recruitment in the public sector for 2022.”


Turkey: No respite for inflation as it reaches 54.4%.

“While the February inflation has remained on a rapid uptrend with a broad-based deterioration in pricing behaviour, upside risks remain at the forefront with the Russian and Ukraine conflict and likely spillovers.”


Sri Lanka’s economic crisis deepens as the country is snowed under its crushing debt…

““It almost feels like we are re-living the 1970s when everything was rationed,” said Zahara Zain, a small food business owner from the capital of Colombo. She said daily life has become a struggle for most Sri Lankans as the price of many basic food items have skyrocketed due to limited supply.”


Ukraine could tilt Pakistan into financial crisis.

“The International Monetary Fund’s US$6 billion bailout package for Pakistan is in jeopardy after Islamabad announced new fuel and energy subsidies and unveiled a tax amnesty scheme amid fears the Ukraine crisis would push the country’s current account deficit to a historic high of $20 billion.”


Two cargo ships hit by explosions around Ukraine, one seafarer killed…

“Many shipping firms have suspended sailings to affected Black Sea ports and other terminals in Ukraine, with insurance premiums for voyages soaring in recent days. At least three commercial ships have been hit by projectiles since Feb. 24.”


Russia’s war on Ukraine triggers ‘earthquake’ in global shipping, trade industry.

“The seven-day-old Russian invasion of Ukraine has set off an “earthquake” in the shipping and trade industry, disrupting routes, diverting merchant ships, and driving up costs as Western sanctions on Moscow start to bite, according to the founder of Israeli marine intelligence firm Windward.”


You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

3rd March 2022 Today’s Round-Up of Economic News

I’m afraid our longstanding, covert energy crisis has become very much overt:

World faces ‘energy starvation’ as oil and gas prices soar even higher… Efforts to offset disruption to energy markets will not provide sufficient relief, analysts warn

“Households across the world are facing “energy starvation”, analysts have warned, as gas prices hit a fresh record and oil surged an 11-year high.”


US oil hits highest level in 14 years and wheat prices surge.

US oil prices shot up to the highest level since 2008 while the global Brent benchmark hit $120 a barrel, as indications Russia had seized its first major Ukrainian city boosted expectations of further sanctions.”


All bets are off if Putin slashes the West’s oil supplies… The worldwide supply of oil was already failing to keep up with demand.

“If Russia, the world’s No. 2 oil producer, intentionally held back supply, it would likely send oil prices skyrocketing, dealing a painful blow to consumers around the world.”


Publicly traded U.S. shale firms are not budging on production restraint vows as oil markets surge amid Russia’s invasion of Ukraine…

“Smaller producers may want to ramp production, but they may struggle “to get rigs and supplies necessary to drill and complete wells,” said Bradley Williams, CEO of Dallas-based Elephant Oil & Gas.”


Russia Sanction Fears Push Raw Materials to Record Backwardation…

“Traders are paying the highest premium on record to secure commodities immediately as Russian supplies of everything from oil to coal struggle to find purchasers… Buyers are increasingly worried that Russia will become a no-go zone for commodity purchases…”


Putin Sets Commodities Up for Biggest Weekly Gain Since 1960.

“Commodities are on course for their most stunning weekly surge in records that go back to when Nikita Khrushchev was in the Kremlin. Bloomberg’s gauge of raw materials is closing in on the biggest weekly gain since at least 1960…”


Ukraine war threatens food security worldwide.

“The consequences of Putin’s war will play out in regions already experiencing acute food insecurity and in food-importing countries that are most vulnerable to supply shocks and price increases.”


UK inflation to hit generational high of 9.5 per cent as Russia-Ukraine war sends energy prices soaring…

“Fears over Moscow squeezing oil and gas flows in retaliation to Western sanctions has pushed energy prices dangerously close to record highs, leading to inflation in Britain peaking at 9.5 per cent, according to Goldman Sachs.”


Germany is prepared for the worst if Russia stops exporting gas to Europe and could keep coal-fired power plants running, according to its economy minister.

“Robert Habeck sought to calm concerns about the potential disruption of energy supplies to Europe’s largest economy…”


European gas prices hit record high as Russia supply fears grow.

“European and British gas prices soared on Wednesday, with a benchmark Dutch gas price hitting a record high as countries said European Union sanctions against Russia could target gas shipments, while some cargos of Russian liquefied gas changed course.”


Russia’s biggest lender Sberbank exits Europe. Russia’s largest lender Sberbank says it is pulling out of Europe after coming under pressure from tough sanctions announced by Western countries in response to Moscow’s invasion of Ukraine.”


Russia’s financial system teeters on the brink of collapse…

“Sanctions allow for energy purchases, giving Russia a vital source of hard currency – but potentially making it harder for the Kremlin to threaten to close the gas pipelines in retaliation, for fear of losing its remaining financial lifeline.”


China Moves to Secure Commodities Rocked by Ukraine War…

“Government agencies, including the country’s top economic planning body — the National Development & Reform Commission — have been ordered to push state-owned buyers to scour markets for materials including oil and gas, iron ore, barley and corn…”


Philippines approves revival of nuclear power to help replace coal.

“Philippine President Rodrigo Duterte has signed an executive order to include nuclear power in the country’s energy mix, as authorities prepare for the phasing out of coal-fired power plants and after earlier efforts failed due to safety concerns.”


South Asian Nations Switch to Expensive Diesel Due to LNG Supply Crunch.

“Pakistan and Bangladesh are turning to expensive and dirty diesel fuel to generate electricity as the nations struggle to secure shipments of liquefied natural gas amid a supply crunch intensified by Russia’s invasion of Ukraine.”


Higher oil prices push Sri Lanka into deeper economic crisis.

“Sri Lanka’s already dire economic crisis has deepened as oil prices hover near $110 a barrel. Vehicles are stranded with empty tanks, power cuts are depriving students of study time for exams and shopping mall air conditioners are being switched off to conserve energy.”


Sudan’s economy tumbles in post-coup deadlock.

“Sudan is once again lurching towards economic collapse in the aftermath of a coup in October, with exports plummeting more than 85% in January according to central bank data and the currency sliding on the black market.”


Tunisia raises fuel prices for second time in a month.

“Tunisia has raised fuel prices by about 3% for the second time in a month due to a sharp rise in oil prices, in an effort to rein in its budget deficit, the Energy Ministry said on Monday.”


Namibia: Fuel Prices to Go Up On Wednesday.

“Motorists should brace themselves for a steep hike in fuel prices as the Ministry of Mines and Energy announced that fuel pump prices will increase by N$1,20 for petrol and diesel by N$1,30 from Wednesday, 02 March.”


Nigeria On The Verge Of Collapse, Says Former Electoral Commission, INEC Boss, Jega…

““While Nigeria may not have totally collapsed, it is in the process of collapsing, as reckless elite in control of the governance process are blindly running the country aground…””


Afghan economic collapse ‘approaching a point of irreversibility’.

“Humanitarian agencies may have distributed enough aid in Afghanistan to avert famine and large-scale starvation, but the country’s economic collapse is “approaching a point of irreversibility,” the UN envoy to Kabul has said.”


Ukraine conflict could hit food supplies, worsening Yemen hunger crisis.

“Potential disruption to global wheat supplies after Russia’s invasion of Ukraine is raising concerns that war-torn Yemen’s hunger crisis and food price inflation could deepen, with some Yemenis rushing to buy flour.”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

1st March 2022 Today’s Round-Up of Economic News

Russia’s War in Ukraine Could Spur Another Global Chip Shortage… Ukraine is home to half of the world’s neon gas, which is critical for manufacturing semiconductor chips

“Among Putin’s first targets was Odesa, a seaside city huddled around the Black Sea, and one of the country’s busiest ports. But it is also home to a little-known company called Cryoin, which plays a big role in the global production of semiconductors.”


Ukrainian conflict will lead to more supply chain woes…

“… companies have no choice but to consider the implications of international trade relationships. Companies have had to overorder due to concerns about tariffs or scarcity of product for the past three years. The pandemic ordering behavior has driven warehouse prices up as capacity has contracted nearly every month since March of 2020, according to the Logistics Managers’ Index.”


The war in Ukraine looks set to have global consequences particularly in the farm patch…

“…the crisis will likely exacerbate an existing problem: A dearth of fertilizer used to feed crops, a recent report warns. “We don’t see the global fertilizer shortage situation abating anytime soon,” states a note from New York-based CFRA.”


Russia’s invasion of Ukraine is threatening shockwaves through two of the world’s staple grain markets…

“In Tunisia, the agriculture ministry said it’s looking to Uruguay, Bulgaria and Romania for supplies of soft wheat to shield itself from possible supply disruptions, while Indonesian flour mills are also hunting for other origins due to the escalating crisis. A Moroccan millers group said it would turn to Argentina, France and Poland.”


Putin Just Pushed the World Into an Even Bigger Energy Crisis. Even without sanctions, Russia’s war will increase the shortage of oil and gas…

“Even if the current sanctions imposed on Russia do not explicitly target the energy trade, sanctions on banks and other entities will impede Russia’s oil, natural gas, and coal exports, wreaking havoc on global energy markets.”


Oil prices jump as Ukraine conflict stokes supply concerns.

“Oil prices surged on Tuesday as concerns over potential supply disruptions after Russia’s invasion of Ukraine and related sanctions outweighing talks of a coordinated global crude stocks release.”


Iraq has stopped oil production from two southern fields with a combined capacity of almost half a million barrels a day.

“The shutdowns curtail the ability of OPEC’s second-largest member to pump crude just as Russia’s invasion of Ukraine and tight supplies globally send prices soaring.”


Ukraine war piles more complexity onto Fed’s tough inflation fight…

“”It just makes a time that was always going to be challenging all the more so,” Erica Goshen, a former senior Fed official, told the Agence France-Presse. Fed policymakers will be “watching the data very carefully.”


Stagflation Threat Rattles Bond Traders as Fog of War Descends.

“The world’s biggest bond market is signaling concern that Russia’s invasion of Ukraine could lead to an economic outcome the Federal Reserve is eager to avoid: persistent inflation and weak economic growth.”


On cusp of Biden speech, a state of disunity, funk and peril…

“America’s strength is being sharply tested from within — and now from afar — as fate, overnight, made Biden a wartime president in someone else’s conflict, leading the West’s response to a Russian invasion of Ukraine that makes all the other problems worse.”


Will the permacrisis ever end [UK]? Brexit started it, the pandemic exacerbated it, war in Ukraine is adding to the sense of dread — and social media is amplifying it…

“We are living, it seems, in an age of permanent crisis; stumbling blindly from one calamity to the next.”


Transport for London has encouraged people to work from home on Tuesday and Thursday as thousands of tube workers went on strike, crippling the capital’s transport network.

“The Rail, Maritime and Transport union said its members were “solidly supporting” the industrial action with picket lines mounted outside tube stations.”


Kwasi Kwarteng warns Britons that energy prices WILL go up again and there is nothing the government can do about it…

“The Business Secretary delivered a grim message, pointing out that although the UK is not reliant on Russia for supplies wholesale gas prices have quadrupled.”


Europe looks to fossil fuels as Russian invasion sends energy shockwaves.

“Italy is turning to coal power to replace Russian gas, while Germany is fast-tracking LNG import terminals and considering extending the life of coal and nuclear plants as the impact of the Ukraine war is felt across Europe’s energy market.”


European Industry Faces Shrink or Shut Decisions on Energy Pain.

“Europe’s biggest industrial firms have been banking on spring to bring down soaring energy costs. Those hopes faded this week as Russian tanks rolled into Ukraine.”


European subsidiary of Russia’s Sberbank ‘failing or likely to fail’: ECB.

“Sberbank Europe AG, headquartered in Austria and with branches in Croatia and Slovenia, has “experienced significant deposit outflows as a result of the reputational impact of geopolitical tensions”, the ECB said.”


Russia default ‘extremely likely’ if Ukraine crisis worsens, banking lobby says…

“The Institute of International Finance (IIF) estimated that half of the Russia’s central bank’s foreign reserves are held in countries which have imposed freezes on its assets, severely shrinking the bank’s policymaking firepower.”


Russian markets were paralysed on Monday and traders struggled to price the rouble as international sanctions shook the country’s financial system.

“The Russian currency lost a third of its value in offshore trading at one point and hit an all-time low of 109.185 per dollar in Moscow. Quotes were infrequent and volatile… traders warned that low liquidity was making it difficult to match buyers and sellers.”


The West’s Sanctions Barrage Severs Russia’s Economy From Much of the World. Western banks and businesses added to the governments’ actions by halting operations in Russia and sales to Russian companies. Many cited the risks of potentially violating sanctions. More broadly, businesses prize stability, and invasions create chaos.”


Shell joins BP and Equinor in pullback from Russia.

“Shell is pulling back from Russia and ending its involvement with the controversial Nord Stream 2 pipeline project as the corporate backlash against Moscow’s invasion of Ukraine gains momentum. The decision comes a day after rival BP said it would sell its near 20 per cent stake in Russian oil company Rosneft…”


Maersk, one of the world’s largest shipping container firms, said on Monday that it may suspend all deliveries to and from Russia in light of sanctions against the Kremlin following its invasion of Ukraine.

“The Danish shipping giant said it was “closely monitoring and preparing to comply with the ever-evolving sanctions and restrictions” imposed against Russia…”


Russia is dry run for bigger China sanctions test…

“If China did move on Taiwan, it would make the challenges of structuring Russia-Ukraine sanctions look like a cakewalk… Targeting China’s biggest banks could (also) harm the global economy. It’s home to four globally systemically important banks, according to the Financial Stability Board’s 2021 list.”


US-China trade war: was the phase-one trade deal a ‘historic failure’, and what’s next? …according to a report, China bought only 57 per cent of the US exports it had committed to purchase over the two years of the deal…

“The US Chamber of Commerce also said that the White House was considering a new tariff probe and other options, such as taking actions with its allies, if current talks failed to persuade Beijing to meet the terms of the deal…”


Japan’s Output Falls as Supply Snags Add to Contraction Risk. Japan’s factory output fell for a second straight month in January as supply shortages continued to hurt manufacturers, adding to concern that the economy could shrink this quarter…”


South Africa Must Act to Avert Economic Ruin, Risk Managers Say.

South Africa risks becoming a failed state if its “lack of decisive, ethical, and courageous leadership” persists and no action is taken to bolster economic growth and address high levels of poverty, unemployment and inequality.”


Turkey crippled by worst strikes since 1970s as workers struggle to buy bread… amid soaring inflation…

“Sevda, 27, stopped working at supermarket chain Migros this month in protest after management fired 257 of her colleagues for walking out to demand a pay rise of four liras (20 pence) an hour, the equivalent of a loaf of bread.”


Breakaway north Cyprus reels from Turkish lira collapse.

“The lira’s slide, alongside surging global energy and food prices, sent inflation in northern Cyprus skyrocketing to 46 percent last year. “Two days after receiving my salary, I’m left with nothing,” said a hotel worker who asked not to be named.”


Ukraine Crisis Risks Pushing Sri Lanka Closer to Default.

“With Covid shutting off tourism from much of the West, Russia and Ukraine had become an increasingly important source of foreign currency for Sri Lanka. The conflict threatens to turn off that tap as key bond repayments come due.”


Desperate Afghans sell kidneys amid poverty, starvation.

“Jobless, debt-ridden, and struggling to feed his children, Nooruddin felt he had no choice but to sell a kidney – one of a growing number of Afghans willing to sacrifice an organ to save their families.”


Prepare for deflation…

“Although it’s true that higher oil prices will raise the cost of nearly everything, this will eventually choke off demand so tightly that only deepest recession (a.k.a. Depression) could conceivably result.

“That would cause financial assets that are hyperleveraged to energy resources to implode, deflating a $2 quadrillion derivatives edifice as well as paper assets that lie outside this market.”


What Is Fueling Our Century’s Global “Disorder”?

“…If we want a comprehensive explanation for the last decade’s disruptions, Thompson asserts, we need to examine the large-scale societal shifts—such as how the world produces and consumes energy—that are causing the international political system to be recast.”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

26th February 2022 Today’s Round-Up of Economic News

Russia’s War and the Global Economy… a global stagflationary recession is now highly likely. Analysts are already asking themselves if the Fed and other major central banks can achieve a soft landing from this crisis and its fallout. Don’t count on it.

“The war in Ukraine will trigger a massive negative supply shock in a global economy that is still reeling from COVID-19 and a year-long build-up of inflationary pressures. The shock will reduce growth and further increase inflation at a time when inflation expectations are already becoming unanchored.”


How will Russia’s invasion of Ukraine hit the global economy? Soaring energy prices alone could tip the world into a second recession in three years

“A conflict that could develop into Europe’s biggest since the second world war has shattered hopes of a strong global economic recovery from coronavirus at least in the short term.”


Global central banks were on the same page. Ukraine may reshape that.

“The well-scripted turn by global central banks towards tighter, post-pandemic monetary policy has been thrown into doubt by Russia’s invasion of Ukraine, a geopolitical upheaval likely to be felt differently across the world’s major economic centers.”


The world is bracing for a global cyberwar as Russia invades Ukraine.

“As Russia steps up its cyberattacks on Ukraine alongside a military invasion, governments on both sides of the Atlantic are worried the situation could spill over into other countries, becoming an all-out cyberwar.” [Anonymous collective has already declared cyberwar on the Russian State and yesterday disabled several sites, including, for a while, RT]


Global oil tanker rates jolt higher on high fuel prices, risk premiums.

“Oil tanker rates are soaring globally as traders scramble to cope with jitters over possible disruption in Russian supplies, as well as war risk premiums for ships plying the Mediterranean region following Moscow’s invasion of Ukraine.”


Fertilizer prices are skyrocketing on concerns that Russia’s invasion of Ukraine will curtail global supplies…

“Russia was the world’s largest exporter of nitrogen products in 2021. The risk of disruption to shipments comes as costs for fertilizers have already been soaring because of high prices for natural gas in Europe, which forced some plants to halt or curtail production.”


Ukraine Crisis Sparks Frenzy in Global Agriculture Trade.

A dramatic rally in crop prices this week sparked by the Russia-Ukraine crisis is signaling more pain ahead for grocery shoppers already feeling the strain of soaring food costs. Prices of staples from wheat to edible oils have rocketed to fresh highs…”


Key [US] inflation gauge hit 6.1% in January, highest in 40 years…

“An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1 percent in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia’s invasion of Ukraine.”


UK households face biggest fall in living standards since 1950s, say experts.

“UK households could suffer the biggest annual decline in their living standards since the 1950s as the Russian invasion of Ukraine pushes up global energy prices, experts have warned.”


Europe’s Energy Bill Will Near Record $1.2 Trillion in 2022, Citi Says.

“Based on current forward prices, the region’s total primary energy bill is now set to approach $1.2 trillion this year, Citigroup Inc. said in a report. That reflects Europe’s enduring reliance on imports to meet demand, with its swift expansion of renewable power so far causing little dent in that dependence.”


Fruit and vegetables jammed by truckers’ strike in Italy.

“The hauliers’ protests, which began in Sicily and the Puglia region on Monday 21 February with spontaneous blockades of loading/unloading and handling of goods, also seem to be expanding to other Italian regions and are having their first effects on supplies. The cause of the strikes are fuel price increases…”


Italian Premier Mario Draghi said Friday that his government was getting ready for an eventual energy crisis following Russia’s invasion of Ukraine

“”The emergency measures include greater flexibility in gas consumption, suspensions in the industrial sector, gas-consumption rules in the thermoelectric sector.”


Chernobyl isn’t the biggest nuclear risk. Ukraine’s active nuclear power plants are.

“… four power plants, located near towns and cities in western and southern Ukraine, contain 15 operating nuclear reactors. The concern is that a nuclear disaster could occur if during the conflict they were accidentally damaged, left unmaintained or cut off from the power grid needed to cool the reactors.”


Ukraine Swaps Signal 90% Chance of Default as Russia Attacks.

“Signs of distress in Ukraine’s debt markets deepened after Russia attacked, with credit-default swaps signaling about 90% probability of default within five years… Meanwhile, the cost of insuring Russia’s government bonds surged on Thursday to the highest since at least 2009…”


The Russian central bank has purchased millions of roubles to prevent the collapse of the Moscow stock exchange and prop up the currency after it plunged to an all-time low of 89.60 against the dollar.

“In a scramble to prevent the invasion of Ukraine pushing Russia’s financial system into meltdown, officials in Moscow closed the stock exchange…”


In North Africa, Ukraine War Strains Economies Weakened by Pandemic.

Egypt imports most of its wheat from Russia and Ukraine, and is looking for alternative suppliers. And Tunisia was struggling to pay for grain imports even before the conflict… In a region where bread keeps hundreds of millions of people from hunger, anxiety at the bakeries spells trouble.”


Ukraine crisis worries Lebanon over its wheat reserves.

“Lebanon has wheat reserves sufficient for one month at the most, with Ukraine accounting for up to 60 percent of the crisis-hit country’s wheat market, the economy minister said on Friday.”


Iran, Iraq, Egypt rely on Ukraine for sunflower oil. Middle Eastern sunflower oil imports could soon be affected by the Russian attack on Ukraine. Ukraine was the largest exporter of sunflower seed and the related safflower oil in 2019, accounting for 45.8% of global exports.”


A record number of people in Syria are in need of humanitarian assistance more than a decade into a devastating civil war, the United Nations said.

“The country is also grappling with an economic crisis compounded by Western sanctions, the Covid-19 pandemic and a sharp fall in the value of the Syrian pound.”


Sobering budget speech [by South African’s Finance Minister] assesses debt, grants and failing SOEs…

Worryingly for the country, debt is forecast to rise to R5.4 trillion over the medium term from R4.3 trillion, which is already incurring debt-servicing costs of R330 billion a year, which is more than the government spends on health, police, or basic education.”


Another blackout looms in Kenya as Kenya Power workers threaten strike.

“The workers are protesting against Kenya Power’s plan to lay off as many as 2,000 staff, or 20% of the company’s workforce. Local media reported that the company resorted to this course of action in a desperate bid to cut cost and make up for lost revenue following a 15% reduction in electricity tariff back in January.”


Pakistan: Farmers continue their protest in Lahore over unavailability of fertiliser, other issues.

“Farmers vowed to continue their protest against exorbitant hike in petroleum prices, unavailability of fertiliser and higher prices of the compost as police thrashed and arrested hundreds of them at the southern entrance of the Lahore city…”


Paralysed banking system pushing Afghanistan towards collapse.

“Afghanistan is inching closer towards economic collapse six months after the Taliban seized power, the Red Cross said on Friday, with a paralysed banking system stymieing international efforts to get financial aid into the war-ravaged country.”


Fuel Shortages Hit Parts of Myanmar Due to Road Closures, Global Price Hikes.

“A Putao resident who requested anonymity said, “We couldn’t buy fuel even if we had the money and were able to afford it.” One bottle of petrol holding around 0.75 to 1 liter costs 10,000 kyats ($5) and 1 gallon costs 60,000 kyats ($30) according to the Putao resident.”


Vietnam Grapples With Fuel Shortages…

“The tight fuel supply in Vietnam was the result of the limited production at Nghi Son refinery, one of the two refineries in the country with a capacity to process 200,000 barrels of crude. Due to a cash crunch and disagreements among shareholders over how to pay for procuring crude, the refinery has been operating at reduced capacity since the middle of January.”


China on the Verge of Energy Crisis…

“Researchers at ANBOUND would like to point out that the deterioration of global energy security caused by geopolitical factors will not only affect Russia and the EU, but also affect China due to changes in the global energy supply and demand pattern.”


China’s Plans for Coal Could Be Upset by Surge in Energy Prices.

“The surge in international coal prices could upset China’s policy of linking its electricity rates more directly to the cost of its mainstay fuel, risking another blow to growth for the nation’s sluggish economy.”


The number of Chinese developers seeking debt forbearance from offshore creditors is expanding as Zhenro Properties and Jingrui Properties highlighted an ongoing credit crunch amid the worst industry slowdown in a decade…

“The latest troubles suggest efforts by policymakers to pump liquidity and ease borrowing costs have not come fast enough…”


Losses in Chinese debt markets are spreading beyond the battered real estate sector…

“Renewed concerns about the Chinese government’s crackdown on tech companies are compounding worries about everything from rising U.S. rates to the Russia-Ukraine conflict and weak consumer spending.”


Ukraine crisis could hit Argentina LNG imports, double energy deficit.

“Russia’s invasion of Ukraine could have an effect thousands of miles away on debt-laden Argentina’s fiscal balance, with a price spike for its natural gas imports set to more than double the South American country’s energy deficit to as high as $4 billion this year, analysts said on Friday.”


Cuban tobacco yield up in smoke amid fertilizer shortages.

“Sanctions-stricken and facing its worst economic crisis in nearly three decades, Cuba is running low on fertilizers and pesticides. The harvest “is not of a good enough quality,” Cabrera sighed as he showed AFP around his crop…”


You can read the previous ‘Economic’ thread here. I’ll be back on Monday with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.

24th Feb 2022 Today’s Round-Up of Economic News

The world is sliding into a new Dark Age of poverty, irrationality and war.

Imperialism, war, irrationality, disease and economic dislocation: modernity is ending as it began. Vladimir Putin’s monstrous expansionism [some may find that a loaded term; I am trying to steer clear of the geopolitical point-scoring and focus on the practical fall-out] is the latest, terrifying reminder that human progress is far from inevitable, and that our wealth and technological advances rest on a set of extraordinarily fragile foundations…

“I’m sorry to disappoint you, dear reader, but there are no easy answers to prevent the world from sliding into a new dark age, and perhaps even in some cases none at all.”


Russia launches full-scale invasion of Ukraine as Biden says the ‘prayers of the world’ are with them.

“Russia has launched an invasion of Ukraine after President Vladimir Putin ordered a “specialised military operation” in the Donbas region. Sky News heard explosions in Kyiv and Kharkiv and understands that borders have been breached in at least four areas of Ukraine.”


Global Banks Poised for Turmoil as West Hits Russia With Sanctions.

““The issue here is not just the immediate impact on the financial markets, but the fact that it’s almost impossible in the near term to disentangle” Russia from global trade, Elina Ribakova, the institute’s deputy chief economist, said in an interview. “There is room for contagion.””


Russia’s incursion into Ukraine heightens the chance of policy mistakes by global central banks.

“The geopolitical uncertainty comes at a difficult time for the world’s central banks. A number have already begun the process of tightening monetary policy in an attempt to combat record-high inflation, but spikes in oil and natural gas prices will likely exacerbate the issue even further.”


World Economy Inflation Shock Set to Worsen From Oil at $100.

“Oil’s surge to $100 a barrel for the first time since 2014 represents a double-blow to the world economy by further denting growth prospects and driving up inflation. That’s a worrying combination for the U.S. Federal Reserve and fellow central banks…”


Energy Crisis Worsens As Russia Delays Coal Supply.

“Coal prices are rising again as the Russia-Ukraine crisis has put energy markets on alert and Russian coal producers struggle to get their coal via railways to export terminals due to COVID-related railway staff shortages.”


Food inflation risks balloon with Ukraine attack as prices of wheat to palm oil soar.

“A spectacular rally in crop prices from wheat to palm oil has increased concerns that food costs are going to get a lot higher. Those fears only got worse on Thursday after Russian forces attacked targets across Ukraine. Both countries are key suppliers of grains and edible oils.”


Fertilizer Shortages Due to Russia-Ukraine Tension May Hit U.S. Growing Season.

“More price hikes for fertilizer are on the horizon as the Russia-Ukraine crisis adds to fears of global shortages, stoking concerns about rising food costs. Russia is a low-cost, high-volume global producer for all major fertilizers…”


As costs rise, majority of Canadians are changing their food-buying habits, survey finds.

“According to the Angus Reid Institute, 46 per cent of Canadian consumers are switching to cheaper brands at the grocery store, one-third are cutting back on meat, and one in five are buying less fresh fruit and fewer vegetables.”


‘Literally ravenous’: 25% of Irish families fearful over food poverty.

“For Nuala O’Connor, a chef at a Barnardos centre in Dublin, food poverty… the current situation, with more families struggling to make ends meet, is a throwback to harder times decades ago.”


UK debt interest bill leaps to highest January level since records began.

“A record debt interest bill for January has eaten into Rishi Sunak’s first ever budget surplus as markets predict that servicing costs will soar even further this spring… Following the figures, the Chancellor warned “there are further pressures on the public finances…””


UK manufacturing price pressures highest since 1976 – CBI.

“More British manufacturers plan to raise prices in the next three months than at any point since 1976, according to a survey on Tuesday that highlighted the inflationary forces that are buffeting the economy.”


Passengers using Heathrow airport fall to lowest level since 1972.

“The number of passengers travelling through Heathrow airport fell to 19.4 million in 2021, its lowest level for nearly 50 years, the airport has said as it reported a pre-tax loss of £1.8bn. Heathrow said it would need to charge airlines more…”


Russia shrugs off Germany’s Nord Stream 2 sanctions.

“Russia is confident it can shrug off Germany’s decision to halt certification of the Nord Stream 2 gas pipeline and believes EU efforts to diversify the bloc’s energy sources will fail, according to three people close to the Kremlin and its state-run gas monopoly Gazprom.”


Why a swift economic victory against Russia looks unlikely.

“Putin has been actively seeking to insulate Russia from the west ever since the invasion of the Crimea in 2014. Western imports of meat, fruit, vegetables and dairy were banned when sanctions were imposed… self-sufficiency has been accompanied by an attempt at diversification, with a deliberate policy pivot towards China.”


China ready to soften Russian economic blow from Ukraine sanctions.

“Financial analysts and geopolitical experts believe China will probably help Russia weather… sanctions, mostly through resource deals and lending by several state-owned banks, while seeking to avoid damage to its own economic and financial interests.”


China property developer sales ‘falling off a cliff’…

“Nikkei Asia reviewed 43 listed developers with over 100 billion yuan in contracted sales in 2020. All of the 31 companies that publish monthly data reported double-digit sales drops in January.”


Shimao shares, bonds tumble on fresh signs of liquidity stress.

“Shares and bonds of Shimao Group tumbled on Thursday, after a trustee said roughly $170 million worth of asset-backed notes guaranteed by the Chinese developer may not be redeemed on maturity.”


Natural Gas Prices Hit Record High In China…

“This could, in turn, create problems for Europe, which is still grappling with tight gas supply and dangerously low inventories, because Chinese LNG is trading at a premium to the Asian benchmark, and traders might be tempted to snatch up LNG cargos to sell to China.”


China’s Boost to Coal and Steel Alarms Climate Researchers…

” Xi told China’s core leaders that the nation’s climate goals shouldn’t clash with other priorities including securing adequate supplies of energy and materials, and that oil and gas output need to “grow steadily.””


A total of 18 building businesses, including one of Australia’s major construction companies Probuild, have collapsed after their South African parent company pulled all its financial support.

“…750 employees and thousands of contractors are impacted, with many padlocked out of sites across the country.”


Mexico’s economy struggles to bounce back after pandemic recession.

“As countries around the world seek to bounce back from the economic devastation of the COVID-19 pandemic, we are seeing mixed results. Mexico, the world’s 15th largest economy is having a particularly hard time…”


Scrounging for food in ‘hunger hotspot’ Colombia.

“Last month, a report by the UN’s Food and Agriculture Organization and the World Food Programme stated that “7.3 million Colombians are food insecure and in need of food assistance in 2022.” The list of 20 “hunger hotspots” also included Afghanistan, Ethiopia, Haiti, Somalia, South Sudan and Yemen.”


Cuba’s sugar industry headed toward worst season ever as production falters.

“Last year’s crop of 800,000 tonnes was the worst since 1908… The government has not been able to finance the sector’s needs – including inputs, irrigation and spare parts – due to tough new U.S. sanctions and the coronavirus pandemic.”


Social media users in Kenya are protesting the surge in food prices and other basic commodities in the country…

“Some social media users showed evidence of shopping lists which stated with prices of basic commodities like bread and cooking oil which has shot up in the last three years – with some goods twice or three times more expensive.”


Tunisia shortages bite as fiscal crisis looms.

“Tunisians are suffering delays to salary payments and shortages of grains, medicines and sugar, a foretaste, some economists say, of a rapidly looming public finances crisis that looks increasingly hard to avert.”


Pakistan govt ‘plans to’ borrow people’s gold for foreign exchange crisis.

“Prime Minister Imran Khan-led government is considering a proposal to borrow gold biscuits and bars from the people to increase Pakistan’s foreign exchange reserves that remain on a sliding path despite taking over USD 5 billion loans in the past three months from bilateral and multilateral creditors…”


Sri Lanka imposes rolling power cuts as economic crisis worsens…

“Sri Lanka’s Public Utilities Commission said it will shut off the country’s grid for four and a half hours on Wednesday after two hours of power cuts on Monday and Tuesday… In the past few days, many Sri Lankans have been forced to wait in long queues in the capital of Colombo and its suburbs to obtain fuel…”


Lebanese turn to public libraries to check out of financial crunch…

“At the Geitawi library, fine arts student Valentina Habis said funding should not overlook culture. “In the midst of economic collapse, we need cultural spaces… places that develop thought and culture, because culture is the basis of society,” she said.”


You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is a huge help, especially as the cost of living crisis is biting here in the UK.