Daily updates on climate change and the global economy.

22nd September 2021 Today’s Round-Up of Economic News

The global supply chain crisis could fuel a severe dose of stagflation. Economic observers should heed the warnings now – rising prices and slowing growth are a very real threat

“…we may end up with far worse than mild stagflation or overheating: a full stagflation with much lower growth and higher inflation. The temptation to reduce the real value of large nominal fixed-rate debt ratios would lead central banks to accommodate inflation, rather than fight it and risk an economic and market crash.

“But today’s debt ratios (both private and public) are substantially higher than they were in the stagflationary 1970s. Public and private agents with too much debt and much lower income will face insolvency once inflation risk premia push real interest rates higher, setting the stage for the stagflationary debt crises that I have warned about.


OECD warns over ending stimulus policies despite inflation pressures…

“The west’s leading economic thinktank has warned governments and central banks against an over-hasty withdrawal of support for growth amid concerns that recovery from the pandemic-induced recession is incomplete.”


US Treasury Secretary Janet Yellen issued a fresh plea for Congress to raise the federal debt ceiling on Sunday, arguing a default on U.S. debt would trigger a historic financial crisis

“She pointed out that the U.S. has always raised the debt ceiling before exceeding its limit. “The US has never defaulted. Not once.””


Britain’s poorer households face a cost of living crisis this winter and next spring…

“All families will face higher energy and food bills in the autumn with those coming off fixed price energy contracts or cheap deals facing increases of up to 50 per cent in their bills.”


UK power firms stop taking new customers amid escalating crisis.

“The British government held an emergency meeting with small power suppliers on Tuesday, and by the late afternoon Igloo, Green, Ampower, Utilita and NEO Energy had posted notices on their websites saying they were closed to new business.”


Britain warns food industry: Carbon dioxide prices will rise sharply. Britain warned the food industry on Wednesday that carbon dioxide prices would rise sharply after offering tens of millions of dollars of state support to a fertiliser company to avert a food supply crunch.


The UK carbon dioxide shortage threatening industries from steel to food is spilling over into Europe, one of the world’s largest distributors of the gas has warned.

“Nippon Gases, which sold almost $1.5bn of industrial gases on the continent last year, said “other countries in Europe will also suffer shortages” of CO2, estimating that its supplies had fallen 50 per cent across the region.”


IEA urges Russia to increase gas supply to Europe. The International Energy Agency has called on Russia to send more gas to Europe to help alleviate a shortage, becoming the first major international body to address claims that Moscow has restricted supplies.”


Europe’s lorry driver crisis to deepen next year, warns haulage boss. Shortages expected to disrupt Christmas, with new EU rules set to put further strain on supply chains…

“Gomez said there would be no easing off of the industry-wide crisis next year because of tougher EU labour laws on commercial road transport, known as the Mobility Package, that come into force in February…”


Credit Suisse’s Archegos disaster exposes cracks in bank regulation.

“When Archegos Capital Management blew up, it saddled Credit Suisse Group AG with $5.5 billion in losses. One reason investors and regulators were blindsided: a gap in the regulatory oversight of big international banks.”


China’s property slowdown sends chill through the economy…

““Government policy doesn’t support home purchases,” said Zhou Miao, a property agent at the Jinan branch of PowerChina Real Estate Group. “Many people have put off their house purchase plans until next year in the hope the authority relaxes credit controls.””


Iron Ore Woes Endure as Chinese Steel Demand Faces ‘Last Hurrah’… [not good news for Australia]

“Iron ore’s rollercoaster ride this year is set to end with a whimper as the contraction in China’s steel industry heralds further declines.”


Australia’s central bank ramps up warnings about soaring house prices, instability risk…

“The warning comes as Australian house prices are expected to climb by more than 20% in 2021, fueled by ultralow interest rates, the promise that interest rates will stay low for some time, and a tax system that encourages property-sector investment.”


Brazil among countries most susceptible to Chinese economic slowdown – Wells Fargo.

“Given China’s standing as the world’s second largest economy, a slowdown in Chinese growth is likely to have negative consequences for the global economic outlook and financial assets worldwide.”


El Salvador president declares himself ‘dictator’ in response to first mass protests.

“Thousands of people marched in capital San Salvador last week protesting Nayib Bukele’s recent decision to make bitcoin legal tender, and alleging that he holds too much power.”


Global Supply Shortages Reach All the Way to a Haitian Aid Group.

“Continuing disruption to factory production and bottlenecks in shipping are leaving nonprofit groups short of goods for vulnerable communities worldwide.”


South Africa moves closer to basic income in wake of civil unrest.

“South Africa is considering introducing a basic income grant after poverty and record joblessness helped inflame the nation’s worst post-apartheid violence. More than 330 people died during a week of violence in July…”


Lebanon’s inflation rate is worse than Zimbabwe’s and Venezuela’s…

“The consumer price index rose 137.8% from a year earlier in August, compared with 123.4% in July, according to the Lebanon Central Administration of Statistics. Consumer prices rose 10.25% from a month earlier while food prices rose 20.82%.”


How Thailand’s idle taxis beat back Covid slowdown with veggie gardens…

“The plants are grown on the bonnets, roofs, inside empty tires and in the boot of the cars. From chillies, eggplants, cucumbers, holy basil and spring onions, the taxi stands are looking more like an art installation.”


Malaysian tourism industry on brink of collapse…

““The Malaysian tourism industry is on the brink of total collapse and the Ministry of Finance needs to be specific in its allocation to not only preserve tourism business and workers but to prepare and empower the industry for a major comeback,“ Matta President Datuk Tan Kok Liang said in a statement today.”


Japan’s Liquidity Trap – Are We in the Same Boat…

We have yet to see any country successfully reverse a zero-interest rate policy or meaningfully curtail stimulus spending. Debt is ballooning world-wide and the balance between interest rates, inflation, and asset prices is increasingly delicate and precarious.”


Whether it’s homes or jobs, our dreams are moving further out of reach every year…

“…the transformation of housing into an asset class is only one of the economic pincer movements people now find themselves caught in. The other is the dwindling supply of “good jobs” that once made the investment in college education worthwhile.”


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 means a lot.

20th September 2021 Today’s Round-Up of Economic News

Alarm bells are ringing unheeded in a world yearning for optimism… Investors have waved through deal after risky deal this year as they look for places to park their cash.

“The lending has been mammoth, swelling the US corporate bond market to nearly $11tn — more than a tenth bigger than it was at the end of 2019 before the Covid-19 pandemic, according to Sifma, the securities industry’s trade group. But the terms at which these money managers have agreed to lend have been astonishingly poor.

“Credit rating agencies are already warning the seeds of the next crisis, or at least the next default cycle, are being sown today. The pain will be particularly acute in the junk bond and leveraged loan market…”


Unease about [global] economic outlook grows as rising prices fuel stagflation concerns…

“Concerns about the regulatory environment in China, soaring energy prices, debates about whether inflation is transitory or persistent, how much the global economy is slowing, and whether central banks can …taper, is increasingly keeping investors nervous, and that uncertainty appears to be growing…”


The Fed’s Time Is Running Out for a Timely Taper.

“The central bank should start pulling back on its $120 billion monthly bond purchases and signal when it will lift rates, but it probably won’t.”


Crunch time for Biden’s economic plan: ‘Failure is not an option’…

“The haggling in Congress this month over ambitious spending bills will be a defining moment for his presidency…

We’ve set a goal, and the goal is achievable. I promise you, I promise you,” the president said…


The Global Housing Market Is Broken, and It’s Dividing Entire Countries.

“The dream of owning a home is increasingly out of reach. Democratic and authoritarian governments alike are struggling with the consequences.”


UK property prices hit all-time high.

“The national average price of properties coming to market in the UK hit an all-time high, Rightmove’s latest house price index revealed, as fierce competition among buyers for the record low number of available properties for sale continues.”


Mounting fears of a 1970s-style three-day week as Britain’s energy crunch deepens… The cost squeeze threatens to abort the economic recovery just as the furlough scheme winds down and fiscal stimulus fades.

“In a worst case scenario it could lead to systemic havoc akin to the industrial paralysis and candle-lit evenings endured in the 1970s… The UK is now at the mercy of global events… Downing Street can only hold its breath, and hope.”


UK Taxpayers face multibillion-pound bill to bail out failing energy firms, soaring bills and empty supermarket shelves – amid fears dozens of gas companies could go to the wall in gas supply crisis…

“Ministers are in talks with energy companies over a bailout that could help the beleaguered sector…”


Sterling under threat from stagflation bets… It has been frenetic since the Brexit vote, proving vulnerable as Britain thrashed out its new relationship with the European Union.

“The moves were extreme enough that sterling was repeatedly compared to emerging market currencies in terms of volatility.”


A fresh protest over post-Brexit rights for fishing vessels to access Jersey’s waters has been held in France.

More than 100 fishermen gathered on Armanville beach in Normandy on Saturday, where the power cable which supplies the Channel Island lands.”


France cancels defence summit with UK in protest at Aukus submarine deal…

“Florence Parly, the French minister of the armed forces, personally took the decision to drop the bilateral meeting that was due to be held in London this week, sources told Reuters.”


Europe Faces Bleak Winter Energy Crisis Years in the Making.

“Faced with surging gas and electricity prices, countries… will need to count on mild temperatures to get through the heating season. Europe is short of gas and coal and if the wind doesn’t blow, the worst-case scenario could play out: widespread blackouts that force businesses and factories to shut.”


Europe Faces Worst Corporate Credit Supply Shortfall Since 2005.

“Dwindling supply will typically limit liquidity in credit markets, making the pricing of risk more challenging. The issue is already prevalent in Europe’s sovereign bond market…”


The editor-in-chief of state-backed Chinese newspaper Global Times warned debt-ridden property giant Evergrande that it should not bet on a government bailout on the assumption that it is “too big to fail”.

“It was the first commentary to appear in state-backed media casting doubt on a government bailout for the country’s No.2 property developer…”


Shares in China’s Evergrande plunge again as fears of contagion grow…

“Shares in the embattled Chinese property company Evergrande have plunged again as investors weigh up whether the group’s massive debt problems could trigger a broader sell off across all financial markets.”


Iron ore tumbles 22% in worst week since 2008 financial crisis… as Chinese steel mills dumped the commodity in response to government production curbs and a cooling property market

“The steelmaking raw material, which hit a record high above $230 a tonne in May, traded at $100.80 on Friday, down 22 per cent over the week…”


The perfect storm of the Chilean economy.

“Economists from different political sectors agree that the problem lies in a disorderly way out of the pandemic crisis, due to the great impact of the consecutive withdrawals of pension funds on the financial system.”


“European Union-style bloc pitched for Latin America, Caribbean…

Bolivian President Luis Arce called on Saturday for a global agreement to lower debts for poor countries at a diplomatic summit in Mexico, as he and other heads of state seek to boost a new Latin American and Caribbean diplomatic block.”


Costa Rica warns of unrest in developing world without more Covid aid…

“Developing countries are at risk of sliding into instability under the weight of the pandemic without more financial support from richer nations and the IMF, Costa Rica’s president has warned.”


The Bahamas and Trinidad and Tobago have been fingered as the next two Caribbean countries expected to default on their sovereign debt, with widespread repercussions for their economies, populations, creditors and, eventually, the corrective policy prescriptions that are likely to come to bailout vehicles such as the International Monetary Fund (IMF).”


Puerto Rico’s progress still stalled four years after Maria.

“Some of the most important reconstruction work, like modernizing the electric grid, hasn’t begun as the U.S. territory faces a critical phase in restructuring its debt.”


South Africa’s ruling African National Congress is riven by factionalism and “thugs and gangsters” have infiltrated the process for selecting electoral candidates, according to an internal report cited by the City Press newspaper…

“Campaigning has been hit by violent disputes between supporters of rival candidates and money woes that left ANC staff unpaid for three months.”


Nigeria’s Worst Security Crisis…

“We hide behind the cliché that… we are in an economic recession, when the reality – unacceptably high rate of unemployment, unacceptably high crime rates, untold insecurity and killings, unacceptable inflation rates alongside low growth, unacceptable poverty, disease and hunger – show that we are at least in an economic depression, if not worse.”


Dueling Tunisian protests erupt over president’s power grab…

“The protest, accompanied by a heavy police presence, was the first since Saied declared on July 25 he was sacking the prime minister, suspending parliament, and assuming executive authority.”


Lebanon crisis: Father of girl with cancer says economic crisis is hitting hospitals and food supplies: ‘There’s no money and no work’.

“The crisis affecting the healthcare system is a symptom of a much wider crisis… compounded by corruption and bad governance. The UN estimates that 78% of Lebanon’s population is now living in poverty, leaving some scavenging for whatever they can find.”


Honda says Japan output 60% below plan on parts shortage.

“The automaker expects the impact to extend beyond this month and said production in early October will also fall short of initial expectations.”


Fake chips slipping into supply chain, industry insiders warn…

“TOKYO — Electronics makers grappling with an unprecedented global chip crunch are increasingly turning to unconventional supply channels to meet their needs — and many are getting stuck with knock-off, substandard or reused semiconductors.”


The computer chip industry has a dirty climate secret…

“The industry presents a paradox. Meeting global climate goals will, in part, rely on semiconductors. They’re integral to electric vehicles, solar arrays and wind turbines. But chip manufacturing also contributes to the climate crisis. It requires huge amounts of energy and water.. and creates hazardous waste.”


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 means a lot.

17th September 2021 Today’s Round-Up of Economic News

Stagflation Fears Cast Longer Shadow on Markets as Energy Surges

““The next big issue confronting markets could well be energy prices,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte… “I am actually getting quite concerned as we head into winter that nobody is really hedged against this move as we could see a very sharp spike in energy prices into the last quarter. That may feed through into ever more inflation.””


Demand for uranium has seen a surge overnight with prices sitting at a nine-year high.

“Shortages in supply for uranium saw its price rise from US$30 a pound just a month ago to US$48 a pound on Thursday with the share prices of Australian companies up by 70 per cent over the last couple of weeks.”


Britain faces a winter of economic carnage unless the Government gets its act together now

“Prices are rising. Wages are soaring out of control. Covid still threatens to close down the economy in the blink of an eye, and, on top of all that, there could easily be power shortages, closing schools and factories, over the winter.”


High gas prices force closure of two UK fertiliser plants.

“Soaring gas prices have forced the closure of two fertiliser plants in the north of England in one of the first signs that a global supply crunch could force many energy-intensive industries to scale back activity this winter.”


U.K. Energy Crisis Deepens as Fire Knocks Out Key Cable… a fire shut down a major cable bringing power from France, adding to the risk of economic disruption as Britain heads into winter.

“Gas and power prices jumped as the U.K. grid operator said the cable will be out for at least a month.. The timing couldn’t be worse…”


Europe’s Energy Crisis Is Becoming A Perfect Economic Storm… Electricity and natural gas prices are reaching record highs… there are prospects for a socio-economic crisis

“A massive economic and presumably political crisis in Europe has the potential to destabilize the global economy.”


Energy Crisis Worsens as Rally Hits Europe’s Industry Giants

“The continent is running out of time to refill its depleted storage sites before the start of the heating season in about a month, with inventories at their lowest level in more than a decade for this time of the year.”


Europe’s car sales go from uninspiring to ugly amid chip crunch…

“”While the pandemic is not over in the region, the single biggest challenge facing the industry is now the auto chip shortage,” LMC Automotive analysts wrote in a report last week.”


Merkel Leaves the German Economy With Trouble Under the Hood.

“Chancellor Angela Merkel steered Europe through crises, and Germany has boomed during her tenure. But she has ducked changes needed to ensure the success lasts, analysts say.”


China’s Nightmare Evergrande Scenario Is an Uncontrolled Crash…

“Protests intensify at China Evergrande Group offices across the country as the developer falls further behind on promises to more than 70,000 investors. Construction of unfinished properties with enough floor space to cover three-fourths of Manhattan grinds to a halt, leaving more than a million homebuyers in limbo.”


PBOC Injects $14 Billion as Evergrande Debt Woes Roil Market.

“China boosted its injection of short-term cash into the financial system in a sign the authorities are seeking to soothe market nerves frayed by concern over quarter-end funding needs and China Evergrande Group’s debt crisis…

“The operation comes as the crisis facing Evergrande fuels concern over the health of the nation’s real estate and credit markets.”


China reveals largest ever drop in monthly steel output as struggling property developers roil markets

“Beijing revealed this week that Chinese steel output dropped by more than 12% in August to 83.2m tonnes, the greatest year-on-year slump since the global financial crisis, according to data from brokers Braemar ACM.”


South Korea Presidential Hopeful Warns of Housing Market Crash.

“South Korea’s leading opposition candidate warned of a potential collapse in the housing market and a spike in bankruptcies as interest rates rise, blaming President Moon Jae-in for letting debt levels hit a record through expansionary spending.”


Thailand desperate for tourists following COVID slump.

“Bangkok’s tourism industry is reeling under the aftermath of the pandemic and officials want to open more destinations to tourists, despite rising COVID cases.”


Myanmar Is a Failing State—and Could Be a Danger to Its Neighbors…

“Many banks have little cash and many multinational companies have left Myanmar as trade relations have soured between leading democracies and the country. Myanmar lost 1.2 million jobs in the second quarter of 2021.”


State of emergency declared in Sri Lanka amid economic slump and food shortages

“Sri Lanka has declared a state emergency and deployed its military onto the streets to stop citizens hoarding food, as the ongoing Covid-19 pandemic has exacerbated an existing economic crisis and caused a nationwide shortage of essential goods.”


The Pakistani currency hit an all-time low of Rs 168.94 against the US dollar in the inter bank market on Tuesday in the wake of burgeoning import payments and trade deficit…

Depreciation of rupee is not good news for the consumers already hit hard by the price hike of essential commodities.”


Afghanistan’s banks are running out of dollars, and may have to close their doors to customers unless the Taliban government releases funds soon, three people with direct knowledge of the matter said.

“The cash squeeze threatens to upend the country’s already battered economy…”


[Turkey’s] Erdogan Vows to Tackle Inflation as Food and Rent Prices Soar…

“Inflation rose for a third month to an annual 19.25% in August, but many Turks say that price increases for food and rent have outpaced that. This comes as the government faces eroding support for Erdogan who is seeking re-election in less than two years.”


Worrying mortgage data highlights the financial state of consumers in South Africa…

“Despite a recovery in the number of credit applications in the first quarter of 2021, an alarming 62.5% of these applications are rejected, indicating that many South Africans are still under considerable financial pressure.”


Bushmeat poaching is on the rise in Kenya as Covid hunger drives hunt for antelopes and giraffes…

“”The problem is not looking very good at the moment,” explains KWS Director General John Migui Waweru. He says a lot of otherwise decent-paying job opportunities were lost during the pandemic… “People are desperate,” he says.”


As rich-poor divide widens between nations, UN urges reform…

“A new report from the United Nations on Wednesday highlights divergent economic recoveries between nations and throws fresh urgency behind warnings that richer nations are not doing enough to help poorer countries from falling further behind…”


The pandemic has widened the chasm between markets and economy.

“A few months into the pandemic, the International Monetary Fund (IMF) had warned that the recovery that follows would be K-shaped. It’s becoming clear global equity markets and economic growth are the two divergent forks in this ‘K’.”


Global debt is soaring — and we need to talk about it…

“…since the world suffered the Great Financial Crisis, which prompted hand-wringing about the dangers of excessive leverage, global borrowing has grown by more than a third.”


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

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon.

15th September 2021 Today’s Round-Up of Economic News

Climate change is posing a bigger risk to bank balance sheets than the subprime mortgage crisis that contributed to the Great Recession, according to the co-author of a new study on the vulnerability of commercial loans.

“The study, conducted by the sustainability nonprofit Ceres and released last week, found that up to 10 percent of the value of U.S. commercial loans at leading banks is at risk of being wiped out by the effects of floods, fires, extreme heat and hurricanes.”


Climate financial risk is real and, like in 2008, the deniers are wrong.

“Unlike the 2008 global financial crisis – when banks were bailed out and global financial regulation overhauled – unmitigated climate change will lead to a crisis with irreversible outcomes.”


US Census data shows COVID pandemic unwound progress on poverty.

“U.S. household income fell in 2020 while the national poverty rate rose from a 60-year low as the Covid-19 pandemic upended the U.S. economy and threw millions out of work.”


From zippers to glass, shortages of basic goods hobble U.S. economy… Shortages of metals, plastics, wood and even liquor bottles are now the norm.

The upshot is a world where buyers must wait for delivery of items that were once plentiful, if they can get them at all.”


New records are being set daily at the Los Angeles-Long Beach Port Complex as ships filled to the brim with cargo continue to pour into U.S. ports [and are unable to dock] amid the unprecedented pandemic-driven import boom.

“The Marine Exchange of Southern California said 142 total ships were in port on Tuesday, setting a new all-time record for a third time since Friday.”


Half a million [UK] homes to be given new energy supplier after two more go bust.

“About half a million households will be moved to a new energy supplier after Utility Point and People’s Energy became the latest energy companies to go bust amid record energy market prices.”


Britain’s reservoir revolution: Water firms launch £500million plan to build up huge supplies to prevent taps from running dry as climate change advances.

“The moves comes against the background of climate change, which is predicted to create hotter, drier summers with associated droughts and wetter winters.”


China economy slowed in August, raising fears for global recovery.

“China’s slowing growth underlines how the spread of the delta variant of the coronavirus is challenging the world’s economic recovery from the pandemic. The slowdown in construction — which pushed China’s steel output to a 17-month low in August — is rippling across the global economy…”


Chaotic scenes erupted at the headquarters of cash-strapped developer China Evergrande Group on Monday, as roughly 100 disgruntled investors crowded its lobby to demand repayment of loans and financial products

”Evergrande, give us our money back!” they chanted.”


Explainer: How China Evergrande’s debt troubles pose a systemic risk… Total liability, which include payables [is] 1.97 trillion yuan, accounting for around 2% of the country’s GDP…

Late payments could trigger cross-defaults as many financial institutions have exposure to Evergrande… A collapse of Evergrande will have a large impact on the job market. It has 200,000 staff and hires 3.8 million people every year for project developments.”


China Evergrande’s liquidity crisis deepens on report of interest payment miss.

“China’s major banks have been notified by the housing authority that Evergrande Group won’t be able to pay loan interest due Sept. 20, Bloomberg reported on Wednesday…”


Chinese manufacturers are pumping out record volumes of freight containers after shippers ordered vast stacks of the steel boxes in an attempt to smooth out disruptions in the global supply chain.

Despite the extra wave of orders, however, shipping executives are warning it will do little to ease the global ocean freight and supply problems…”


Chip shortage drags on as plant closures hit carmakers… With a cascade of factory closures across Europe, North America and Asia, the shortages are likely to continue well into next year…

Estimates of the likely hit to car production because of the shortages have shot up in recent days.”


UN warns 1 million Afghan children at risk of starvation before winter hits.

United Nations Secretary-General António Guterres gave the warning while speaking in Geneva at a U.N. conference on the matter of Afghanistan’s dwindling resources and the livelihood of its people.”


Looming’ food crisis as jihadists ravage Niger’s Tillaberi…

The vast arid region, along with central Mali, has become the worst-hit area in the jihadists’ nine-year-old campaign in the Sahel. Thousands of people have died and tens of thousands have fled their homes.”


Warning over hunger crisis gets louder in East African countries.

Kenya, Uganda, South Sudan, Ethiopia, Rwanda, and Somalia are all currently facing different levels of food deficiencies due to drought, insufficient rainfall, conflict, locust invasion, and the aftershocks of Covid-19…”


US warns of funding shortfall as Yemen famine crisis deepens.

Senior officials from US President Joe Biden’s administration on Tuesday warned of stark funding shortfalls for aid work in Yemen, where fighting in the Marib region and elsewhere has pushed millions towards poverty and famine.”


Plague hits Madagascar as Oxford team races to finish the revolutionary vaccine.

A plague outbreak has killed at least seven people in Madagascar, as the island nation struggles to fend off a devastating famine and UK scientists race to develop a new vaccine for the ancient killer.”


Global Debt Hits Record $296 Trillion as World Lockdowns Ease…

“Global debt loads surged during the second quarter as households seized on low mortgage rates and governments continued borrowing heavily to revive pandemic-battered economies.”


Investors turn bearish on global economy though positioning upbeat – Bank of America survey.

Barely a tenth of respondents in a monthly fund manager survey expect a stronger global economy in the coming months, marking the lowest proportion since last April’s initial COVID-19 panic…”


The world is facing a dangerous bout of ‘stagflation’ as the economic recovery slows and prices rise, experts have warned.

In a gloomy report entitled Now For The Hard Part, Capital Economics said data from the US to China suggests that the rapid rebound from the pandemic is beginning to tail off.”


Shutdown and Aftershocks — Covid and the new world order…

“A global threat such as Covid-19, one that does not discriminate between nations, ideologies or races, might have been expected to encourage or force even rival great powers to work together. Instead, it has done the opposite, becoming itself a tool of systemic rivalry.”


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.

13th September 2021 Today’s Round-Up of Economic News

Here’s an Inconvenient Truth: The [US] Growth Slowdown Goes Beyond the Delta Variant.

“Everyone knew that economic growth was going to slow from the second quarter. But it wasn’t supposed to happen so soon—or so sharply. The Covid-19 Delta variant is the obvious and convenient explanation, but it’s an incomplete one.”


The [US] economic recovery has a dirty secret… Joblessness is much higher than economic data would suggest.

“The data isn’t cooked or intentionally skewed. Instead, it boils down to the fact that the U.S. Bureau of Labor Statistics’ economic data isn’t well-suited to measure a labor market during a pandemic.”


Inflation watch: US producer prices surge to another record.

“Friday brought more confirmation of rising inflation after the United States Department of Labor said that its Producer Price Index (PPI) – which measures prices that businesses fetch for the goods and services they sell – jumped 8.3 percent in August yoy…”


[UK] Supermarkets could face ‘permanent shortages’, expert warns.

“The days of UK consumers being able to expect to pick up nearly whatever product they want, whenever they want from supermarket shelves are over, an industry expert has warned.”


Europe’s Power Crunch Deepens as Ireland Warns of Blackout Risk: U.K. Electricity prices surged to 2,300 pounds ($3,180) a megawatt-hour as Ireland warned of a power shortfall that could lead to blackouts and the cost of power broke records in Spain, Germany and France.

“Europe is facing an energy crunch as supplies of natural gas remain below what’s needed to satisfy demand.


Norway grapples with temptation of a ‘mini Brexit’… Norway is not a member of the EU but it is closely linked to the bloc through the European Economic Area (EEA) agreement.

“The deal gives Norway access to the common market in exchange for the adoption of most European directives. Both the Centre Party and the Socialist Left… have called for the marriage of convenience to be dissolved.”


EU Austerity Battle Ramps Up as France Announces New Spending…

“Europe is far from united. On the same day France said its budget would focus on driving economic growth rather than tax hikes, eight EU nations led by Austria wrote a letter in support of cutting debt levels.”


COVID: Thousands protest nightlife ban in the Netherlands.

“Organizers claim as many as 150,000 people showed up to the “Unmute Us” protests, calling for the lifting of coronavirus restrictions that forced music venues to shut down.”


Anti COVID vaccine protesters clash with police in Greece.

“Greek police fired tear gas and water canon on Saturday to break up a demonstration of thousands of people protesting against mandatory coronavirus vaccinations.”


Evergrande investors face 75% hit as company edges closer to restructure.

“The troubled Chinese property group Evergrande has edged closer to a government-engineered restructuring which could see bondholders take huge losses as Beijing’s price for saving millions of homeowners from financial ruin.”


China’s zero-Covid stance could worsen debt problems for companies.

“China’s zero-Covid approach could worsen the debt situation of the country’s companies, some of which are already in financial distress, says ratings giant S&P Global Ratings.”


Cracks in China’s Growth Put Risk-Market Rally on Shaky Ground.

“Fissures in the Chinese recovery are replacing taper-tantrum jitters as the lurking threat to the emerging-market rally. Developing-nation currencies are increasingly vulnerable to signs of weakness in China…”


With Economies on the Brink, Southeast Asia Chooses to Reopen.

“Even as they struggle with one of the world’s worst Covid-19 outbreaks, nations across Southeast Asia are slowly realizing that they can no longer afford the economy-crippling restrictions needed to squash it.”


The spectre of high inflation returns to haunt Latin America…

“Inflation causes particular alarm in Latin America because of the region’s long history of price instability…

“…particularly in the 1970s and 1980s.”


Argentina’s Crazy Primaries Are Looking Dangerous For President Fernández’s Peronists.

“A sustained economic crisis marked by consistent stagflation turbocharged with a global pandemic has pushed millions into poverty, as massive slums continue to grow accelerating problems like crime, drug-trafficking and addiction, and a chronic lack of education and jobs…”


Poverty in Colombia…

“According to a study by the Red de Ciudades Como Vamos, the economic crisis that followed the coronavirus pandemic had a devastating impact on poverty in all Colombia’s provincial capitals.”


Tunisia president indicates plans to amend constitution.

“Tunisia’s President Kais Saied has indicated plans to change the country’s constitution, seven weeks after he seized power in moves his opponents called a coup.”


Sri Lanka central bank chief steps down as reserve crisis deepens.

“Sri Lanka’s central bank chief to step down amid dwindling foreign exchange reserves, looming debt repayments…

“…and the economic fallout of an extended COVID-19 lockdown.”


Explainer: How bad is the crisis in Lebanon?

“Lebanon’s financial meltdown has swiftly worsened in the last month, with much of the country crippled by fuel shortages that have ignited country-wide security incidents.”


Food price inflation heaps pressure on poorer countries – Central banks face difficult monetary policy trade-off between taming increases and risking recovery

Prices have risen 40 per cent over the past 15 months, according to the latest data from the UN’s Food and Agriculture Organization, the biggest gain since surging food prices spurred the unrest of the Arab Spring in 2010-11.”


Supply chain issues add to stagflationary winds.

“Rather than a one-off dynamic, the global economy is experiencing waves of supply disruptions suggesting that longer-term forces are also in play… all this translates into stagflationary winds for the global economy that are unfamiliar to those that did not live through the 1970s.”


Supply chain crisis will leave permanent scar, UPS warns.

“The supply chain crisis unleashed by the pandemic will inflict lasting damage on the globalisation driven by multinationals, according to a top executive at UPS, one of the world’s largest delivery companies.”


The World’s Shippers Are Earning the Most Money Since 2008…

“This boom’s causes are twofold — an economic reopening after Covid that has spurred surging demand for goods and raw materials. Alongside that, the virus continues to cause disruption in global supply chains, choking up ports and delaying vessels, all of which is limiting how many are available to haul goods across oceans.”


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.

10th September 2021 Today’s Round-Up of Economic News

Fed Officials’ Trading Draws Outcry, and Fuels Calls for Accountability. Central bank regional presidents traded securities in markets in which Fed choices mattered in 2020. Here’s why critics find that troubling…

“The Fed has gone from serving as a lender of last resort mostly to banks to, at extreme moments in both 2008 and 2020, using its tools to rescue large swaths of the financial system. That includes propping up the market for short-term corporate debt during the Great Recession and backstopping long-term company debt and enabling loans to Main Street businesses during the 2020 pandemic crisis.

“That role has helped to make the Fed and its officials privy to information affecting every corner of finance. Yet central bankers can still actively buy and sell most stocks and some types of bonds…”


The Federal Reserve should press ahead with a plan to dial down its massive pandemic stimulus programme despite an abrupt slowdown in US jobs growth last month, according to a top central bank official.

James Bullard, president of the St Louis Fed, dismissed concerns the labour market recovery was faltering, even after just 235,000 jobs were created in the month of August…”


Treasury Secretary Janet Yellen on Wednesday warned congressional leaders that the U.S. is on track to default on the national debt in October if the White House and Congress are unable to raise the debt limit.

In a Wednesday letter, Yellen said that the Treasury Department would likely run out of cash and exhaust “extraordinary” measures to keep the federal government within its legal borrowing limit at some point next month.”


Our food supply is under threat from climate extremes: Congress must act to save it.

“…Further contraction in the [agricultural] industry and losses in productivity will ultimately threaten our access to safe, affordable food and worsen global hunger, which is already on a menacing rise.”


Disastrous season means UK shoppers could pay 50% more for pasta.

“A scramble for durum wheat has pushed the price up nearly 90% this summer after drought and soaring temperatures hit farms in Canada, one of the biggest producers. There are also supply issues in Italy…”


UK GDP growth slows to a trickle as ‘pingdemic’ and materials shortages bite…

“The Office for National Statistics (ONS) said that gross domestic product (GDP) rose by 0.1% in July, a slowdown from 1% growth in June. Companies had faced problems with the so-called “pingdemic” and shortages of materials – especially in the construction sector.”


Bank of England faces up to threat of ‘stagflation’ as cost of living crisis looms… Tighten policy and you risk further damaging growth without having much impact on the sort of “cost push” inflation we see today; leave things easy, and you further stoke the inflationary flames…

I wouldn’t be at all surprised to see it turn into a genuine political “crisis” later this year.


ECB Slows Crisis Stimulus in Shift Lagarde Says Isn’t Taper.

“The European Central Bank will slow the pace of its pandemic bond-buying program in the final quarter of 2021, a shift President Christine Lagarde insists isn’t a move heralding a wind-down in stimulus for the euro-region’s still-vulnerable recovery.”


Italian police raid Covid health pass protesters ‘planning violence’.

“Italian police raided the homes and searched the computers on Thursday of eight people suspected of planning violence during protests against the country’s coronavirus passport.”


China’s factory and consumer prices continue to diverge, ramping up concern of an economic slowdown…

“Analysts say the widening ‘scissors gap’ between factory and consumer prices points to worsening profit margins for Chinese companies.”


China Factory Inflation Surge to Add Pressure to Global Prices…

China’s factory-gate inflation accelerated to a 13-year high, adding to the pressure on global consumer prices which have been pushed up by a commodities boom, soaring shipping costs and an uneven economic recovery from the pandemic.”


Inflation splits emerging countries into doves and hawks… More than in the developed world, rising prices already pose a real threat to stability

It is a question for policymakers everywhere: which is worse, stagnation or instability. But in emerging markets the stakes are arguably higher if inflation gets out of control.”


Brazil’s central bank will need to “act fast” to prevent a further deterioration of the country’s inflation expectations, its President Roberto Campos Neto said.

““We are seeing many different inflationary shocks building on top of each other. It’s very important to act fast to prevent inflation expectations from de-anchoring,” Campos Neto said…”


Bolsonaro Calls on Truckers to Lift Protests Blocking Roads.

“Brazilian President Jair Bolsonaro asked truckers to lift any blockades on highways as concerns over the possibility of a broader strike add to an already charged political climate and worries about galloping inflation.”


COVID-19 pushes Kenya’s economy into first contraction in nearly 30 years.

“Kenya’s economic output contracted for the first time in nearly three decades last year, pummeled by the impact of the coronavirus crisis that hit key sectors like tourism, official data showed on Thursday.”


Cholera kills 2,000 in Nigeria in worst outbreak for more than a decade.

“…this year a health system already stretched by Covid-19 and staff shortages has struggled to counter the cholera outbreak, while insecurity in Nigeria’s northwestern states is making it more difficult to respond to the crisis.”


Africa: Record Numbers Nabbed At Sea to Europe.

“More than 23,000 people have been intercepted at sea and returned to Libya after failed attempts to reach Europe. This is almost double the total for the whole of 2020 and the highest number on record since interceptions by the Libyan Coast Guard began in 2017.”


North Korean Restaurants Abandon Price Controls Amid Food Shortages.

“With food prices on the rise in North Korea, a Pyongyang restaurant serving the city’s signature dish has had to abandon price controls, causing a more than twentyfold increase and making a casual meal outside the house an expensive luxury that ordinary residents of the capital can no longer afford…”


Toyota cuts production target on parts and chips shortages.

“Toyota Motor Corp (7203.T) cut its annual production target on Friday by 300,000 vehicles as a slowdown in output at COVID-19 hit parts factories in Vietnam and Malaysia added to the pain of a global shortage of auto chips.”


Container Shipping Giant Freezes Spot Rates Amid Trade Chaos…

The cost of shipping a 40-foot container from Shanghai to Los Angeles reached $11,569 in the past week, nearly eight times higher than pre-pandemic levels, according to the Drewry World Container Index.”


 Global gas prices soar as industry struggles to meet resurgent demand.

“Global gas prices have climbed to their highest level for seven years in real terms, as traders anticipate a shortage this winter, with consumption rebounding more quickly than production from the pandemic slump last year.”


You can read the previous ‘Economic’ thread here. I’ll be back over the weekend 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.