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

Pandemic’s $16 Trillion Bill Will Come Due as Debt Surges: Fitch…

Governments around the world have rolled out about $16 trillion worth of fiscal measures to prevent economic collapse during the pandemic, according to the International Monetary Fund, helping to drive the recovery but also leaving war-time era levels of debt.”


The feds aren’t giving you a fourth stimulus check, but your state might…

“…the massive stimulus bill the president signed in March included $350 billion in aid to states and local government… could be used to make additional direct payments. Some governors, including California’s Gavin Newsom, have pushed their states to pay stimulus checks.”


The Fed’s tapering has already begun.

“Markets are taking note of the Federal Reserve’s apparent wish to reduce the size of its asset-purchasing program as soon as this year. But that reduction—or “tapering” process—has already begun, by some measures.”


Mortgage Debt Is Rising at Its Fastest Pace in Canada Since 2007.

“Canadians are piling into mortgages at more than double the historical pace as the housing market appears to moderate after a pandemic boom… the total amount of real estate-related debt outstanding in the country has risen 9.2% in the past year, the largest increase since 2008.”


UK cumulative debt reaches 98.8% of GDP.

“The accumulated debt of the United Kingdom reached 2.21 trillion pounds (2.56 trillion euros) at the end of last July, which is equivalent to 98.8% of gross domestic product (GDP) of the country, the highest rate since March 1962, reported this Friday the National Office of Statistics (ONS, in English).”


The food supply crisis which has seen Nando’s outlets across Britain closed up could see more restaurants shut in the weeks ahead, industry bosses have warned

“Nick Allen, chief executive at the British Meat Processors Association, said… “Nando’s is the tip of the iceberg. I think we’re going to see more and more [closures]. Some people are still trying to open up their restaurants – but they’re struggling to get staff and struggling for deliveries.””


A tale of two Cornwalls: Food banks amid luxury holiday lets.

“Tourists are drawn to the British county’s rugged cliffs and beautiful beaches, but locals face poverty and deprivation… Young people are often hardest hit.”


Poland sends troops to Belarus border to halt migrants. The growing number of people trying to cross into Poland — compounded by worries of an even greater surge thanks to the Taliban’s conquest of Afghanistan — are turning migration into a domestic political issue in Poland.

“Poland has become the latest EU destination for asylum seekers, most from Iraq but also from Syria and Afghanistan, allegedly abetted by the regime in Minsk.”


Nearly 50 African migrants die of thirst, starvation after boat motor fails in 13 days of ‘hell’.

“Boat was adrift in the Atlantic for nearly two weeks with no supplies, leading to the death of dozens, including 10 women and three children.”


China’s Huarong to receive state-backed rescue as it unveils $16bn loss.

“State-backed Chinese investors will bail out Huarong Asset Management, as the under-pressure bad debt manager unveiled losses of Rmb103bn ($15.9bn) after months of uncertainty over its finances.”


Evergrande Told to Fix Debt in Rare China Rebuke; Bonds Drop.

“Financial regulators in Beijing told China Evergrande Group to resolve its debt problems and refrain from spreading “untrue” information, issuing a rare public rebuke of the developer as it struggles to stave off a liquidity crisis.”


Can China Hold On to Its Property Balloon? Not Likely…

“Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, wrote last year that the real share of property-related loans is more like 39%, or 70 trillion yuan ($10.8 trillion). Floating on top of this ocean of funds is a bubble of epic proportions.”


China’s ‘Delta Stress Test’ Is About To Shake Global Economy…

“It’s dawning on the world that China’s outbreak is the most serious since the initial outbreak in early 2020. Reports of fresh lockdowns have global investment circles in a whirl.”


Emerging-market policymakers grapple with rising inflation… Soaring food and energy prices have pushed inflation to uncomfortably high levels

“Some central banks are raising interest rates. But that could slow economic recovery.”


Argentinians fall back on barter economy to scrimp amid financial crisis. Kid trousers for some milk, a jumper for diapers, two kid joggers for three packets of sugar, a jacket for bread or some noodles for T-shirts.

“Argentinians are having to exchange clothes, appliances or toys for food and basic goods, as a barter economy takes over in the midst of a devastating financial crisis that is only getting worse due to the Covid-19 pandemic.”


Rare doctors’ outcry highlights Cuba’s COVID crisis, growing dissent…

“…doctors’ complaints have exposed simmering resentment over how rundown Cuba’s healthcare system was even before the pandemic, with many blaming economic mismanagement not U.S. sanctions, as well as low salaries and other labor issues.”


Hospitals in blast-hit north Lebanon grapple with power outages…

“Hospitals in the Akkar region of north Lebanon where a fuel tank explosion killed at least 28 people this week are struggling to operate as life-threatening power cuts and telecom outages sweep the area.

“Lights and phone lines went out across the impoverished and marginalised region.”

Palestinian Authority is facing a financial collapse…

“Suffering is deepening in Palestine as its economy continues to deteriorate, poverty levels rise, unemployment increases and the environmental toll of occupation rises rapidly.”


Taliban go door-to-door telling fearful Afghans to work.

“Armed Taliban members knocked on doors in cities across Afghanistan on Wednesday, witnesses said, telling fearful residents to return to their jobs a day after the militants announced they wanted to revive the country’s battered economy.”


Gang of starving monkeys storm shop [in Lopburi, Thailand] looking for food after Covid ruins supplies

“Monkeys in the area have been left hungry for months due to the Covid pandemic ruining the tourism trade in the area. Much of their food relied on eating what was left behind by crowds visiting the sights.”


Volkswagen and Toyota face production cuts due to chip shortage…

“German car manufacturer Volkswagen said a semiconductor supply crunch could force it to slow production lines during the autumn, adding to cuts that have been in place since February. Japanese firm Toyota also reported that it would slash output by 40% in September.”


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18th August 2021 Today’s Round-Up of Economic News

Shipping bottlenecks set to prolong supply chain turmoil… Tenfold jump in costs since start of pandemic squeezes importers and exporters

“The closure of a terminal at the world’s third-busiest container port is only the latest sign that turmoil in ocean shipping could run into next year, posing a threat to global economic growth as chronic delays and soaring transport costs may leave demand unmet and push up consumer prices.”


Pubs fear running dry due to ‘catastrophic’ shortages… Pubs across Scotland may run dry this week as delivery problems mean they cannot get fresh supplies of drinks, trade bodies have warned.

“A lack of warehouse staff and truck drivers is having an impact on replenishing items around the country.”


Food shortages across shops in the Channel Islands.

“…how long is this expected to last? …””We are looking at a good twelve months – because some of these issues are from the Far East the time that’s going to take to unravel and come back into the UK and the Channel Islands will take that sort of time…””


Euro zone bond yields edge down as global sentiment turns south.

“Borrowing costs in Germany, the euro zone’s benchmark bond issuer, dipped on Monday to their lowest level in over a week as latest data from the world’s biggest economies cast a shadow over the growth outlook.”


South African government extends deployment of soldiers following last month’s unrest…

“Ramaphosa… told the parliament that 10,000 …troops will continue to cooperate with the South African Police Service in the prevention and combating of crime and preservation of law and order within the country, at least until Sept. 13…”


Cameroon: Thousands flee ethnic clashes to Chad…

The fighting in Cameroon began when Muslims built dams to divert water to help them catch fish, in a location where ethnic Arab Choa herders also take their cattle for watering, according to regional governor Midjiyawa Bakari.”


How water shortages are brewing wars.

“Unprecedented levels of dam building and water extraction by nations on great rivers are leaving countries further downstream increasingly thirsty, increasing the risk of conflicts.”


East Africa: Hunger Looms Amid New Locust Invasion, Covid, Drought and Floods.

“On Monday, a dark cloud of desert locusts recently floated over the city of Hargeisa, the capital of Somaliland. For more than 40 minutes the moving swarm of locusts covered the city in the Galgodon valley. On Tuesday, remnants of the swarm still hovered over the city.”


Now in charge, Tunisian president faces looming fiscal crisis.

“Tunisia paid back more than $1 billion in debt this summer from foreign currency reserves, but must find about $5 billion more to finance its projected budget deficit and more loan repayments. The economy shrank 8.2% last year while a deficit of 11.5% drove public debt to 87% of gross domestic product according to the IMF.”


Lebanon helpline hit by crises as public mental health deteriorates.

“A critical mental health service for people affected by Lebanon’s compounding economic and political crisis is under threat of closure, potentially leaving some of the country’s most vulnerable people stranded without support.”


[Thailand faces] bigger crisis than 1997 as taxis give up and central bank urges up to 1 trillion Baht in additional debt…

“The Bank of Thailand has urged the government to borrow more and raise the country’s public debt ceiling as quickly as possible as …Thailand is facing another year of economic contraction or at the very least, stalled growth in what is a bigger crisis than 1997.”


Chinese state media sets sights on Taiwan as US’ Afghan retreat stokes nationalism.

“The chaotic US withdrawal from Afghanistan has presented Beijing with a propaganda boost, with Chinese state media capitalizing on the crisis to trumpet the supposed decline of America and taunt Taiwan with threats of invasion.”


Pakistan bonds hit as investors brace for Afghanistan fallout.

“Pakistan’s international bonds came under selling pressure on Monday, with debt issued by Uzbekistan also weakening, as emerging market investors braced themselves for the fallout from the crisis in Afghanistan.”


UN aid chief in Afghanistan warns of hunger caused by drought…

“Half of all Afghan children under the age of five already suffer from acute malnutrition, as the country reels from its second drought in four years, Alakbarov said.”


US freezes Afghan central bank’s assets of $9.5bn.

“The U.S. has frozen nearly $9.5 billion in assets belonging to the Afghan central bank and stopped shipments of cash to the nation as it tries to keep a Taliban-led government from accessing the money, an administration official confirmed Tuesday.”


A top Federal Reserve official has warned that the US central bank’s emergency bond-buying programme is ill-suited for an economy held back by supply constraints, urging instead a speedy end to the stimulus to avoid burdensome debts and inflationary pressures.”

[Good luck with a meaningful taper, Rosengren!]


Actually, it doesn’t matter who runs the Fed…

“…the tottering US debt structure is plain for all to see. Nobody imagines serious tapering, or significant hikes, even if the market has an occasionally freak out. It’s hard to escape the obvious conclusion. Whoever runs the Fed doesn’t matter. A dove, or a dovish dove. Take your pick. They must continue the dollar’s expansion or face ruin.”


S&P 500 doubles from its pandemic bottom, marking the fastest bull market rally since WWII…

“The broad equity benchmark has rallied 100% on a closing basis from its Covid trough of 2,237.40 on March 23, 2020. It took the market 354 trading days to get there, marking the fastest bull market doubling off a bottom since World War II.”


Will ‘fallen angels’ cause the next financial crisis?

“Investors are piling into risky corporate debt as they hunt for high yields in a world of super-low interest rates. However, regulators worldwide are sounding alarms…

The situation may have ominous aftereffects.

Financial institutions are being prompted to take on excessive risks because they are desperate for profitable investments. The arrangement leaves them extremely vulnerable…”


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16th August 2021 Today’s Round-Up of Economic News

Where COVID-19 has precipitated unprecedented debts, climate change could trigger defaults across a planet which a United Nations panel says is dangerously close to runaway warming.

“To avert disaster, countries are committing to carbon cutting steps. But these will be costly and likely to add to a global debt pile which asset manager Janus Henderson estimates ballooned to $62.5 trillion by the end of last year.”


US consumer confidence in shock fall below early pandemic low. The yield on the benchmark ten-year US Treasury bond fell by almost seven basis points to dip below 1.3 per cent last night after American consumer sentiment dropped to its lowest level since 2011.

“The University of Michigan index of consumer confidence fell by 13.5 per cent in the month to mid-August, dipping beyond the lows reached in April 2020 when the pandemic took hold.”


An “unprecedented” number of migrants were intercepted illegally crossing the US-Mexico border in July, the head of America’s Homeland Security department has said.

“Border guards recorded more than 200,000 instances of people attempting to enter the United States during the month, according to US Customs and Border Protection.”


[English] Channel migrant crossings reach record high as man dies. Nearly 600 migrants crossed the Channel on the same day a man died making the journey, the government has confirmed.

“The Home Office said UK authorities dealt with 592 people on Thursday – the highest figure for a single day.”


Thousands gathered Saturday in the streets of Montreal [Canada] to protest against the province of Quebec’s Covid-19 vaccine passport, which will go into effect early next month.

“Holding signs that said “Freedom!” and “We are not laboratory rats,” the demonstrators, many of whom came with their families, paraded peacefully under a blazing sun in downtown Montreal.”


Protesters took to the streets of France for the fifth consecutive Saturday to oppose the country’s pass sanitaire – health pass – now required for everyday activities.

“More than 250,000 people were expected at about 200 demonstrations, an increase in the number that officials said had turned out last week. Protesters have accused the government of underestimating the numbers and playing down support.”


Bitter harvest for French winemakers hit by worst weather in 40 years.

“Frost, hail and rains have conspired to destroy swathes of the crop and leave parts of a vital industry cruelly exposed… hail stones fell from the sky with such force that Gautier’s vines, 1.5 metres high in a normal year, were shorn down by about 75 centimetres.”


The latest Chinese market to buckle under pressure from Beijing’s wide-ranging corporate crackdown: junk bonds…

Stress has been building following a string of debt defaults and growing concern about a few large issuers… “There’s a confidence crisis in Chinese high-yield debt,” said Paul Lukaszewski, head of corporate debt for the Asia Pacific region at Aberdeen Standard Investments in Singapore.”


Home Prices in World’s Most Expensive Market Break Record.

Hong Kong’s home prices jumped to a record high, joining other global real estate markets that are soaring on low mortgage rates and rising demand as the pandemic slowly recedes.”


Sydney lockdown extended statewide as Australia faces ‘worst’ COVID episode.

“Australian police hiked fines for people breaking lockdown rules in Sydney and the rest of its home state on Saturday and strict stay-at-home orders were extended statewide amid a record jump in daily new COVID-19 infections.”


Russia releases worst pandemic death numbers to date.

“Russia’s daily coronavirus deaths are on the rise after infections peaked in July. Authorities blame the infectious Delta variant and a slow vaccination rate. Moscow said late on Friday that the mortality rate in the city in July was 70% higher than before the pandemic in 2019…”


Iran Hit by Worst Covid-19 Wave Yet as Vaccine Rollout Flounders.

“Hospitals across the country are overwhelmed. Many face shortages of beds and exhausted personnel, prompting the armed forces to say they would help turn mosques and stadiums into facilities for convalescing patients.”


Thousands rush to leave Afghanistan as chaos unfolds at Kabul airport in wake of Taliban control.

“There were scenes of chaos and desperation at Kabul’s international airport on Sunday as thousands of foreigners, Afghans and American diplomats sought to flee the country in the wake of the Taliban’s swift takeover of Afghanistan.”


North Korea military threats ‘intended to deflect from economic crisis’…

“Battered by extreme weather, coronavirus restrictions and international sanctions imposed in response to its ballistic and nuclear missile programmes, North Korea is facing one of the worst economic crises in its 73-year history.”


Turkey: Anti-foreigner sentiment boils over in Ankara riots.

“There are approximately 4 million refugees in Turkey, and they are increasingly the objects of hostility — as the recent riots in Ankara have shown. Experts warn that the situation is likely to escalate in future.”


At least 20 killed and 79 injured in fuel tank explosion in Lebanon…

“The Lebanese army on Saturday said it had seized thousands of litres of gasoline and diesel that distributors were stockpiling in pumps across the country, and the past week has seen multiple incidents of tankers being hijacked.”


Haitians heartbroken as deadly quake heaps misery on crisis-hit nation…

““We have this political crisis, Covid-19 is still there, we have an economic crisis and we are now facing this earthquake and its aftermath. It’s really, really hard. It’s like you don’t have a break,” she said. “Instead of things getting better you feel like you are going into deeper trouble.”


Is Morocco’s ‘Arab Spring’ moment finally here?

“After a fiery suicide by a cart driver, hundreds of Moroccans protested against their government. But this is not the first such case and it probably won’t be the last… Lockdowns, a lack of tourism and the resulting impact on the economy has widened pre-existing income inequalities…”


Riots damaged South Africa’s fragile food system – now it needs radical reforms.

“During the first two weeks of July 2021, South Africa witnessed violent protests and massive destruction of critical economic infrastructure and trade-logistic corridors in KwaZulu-Natal and parts of Gauteng.”


‘An economic calamity’: Africa faces years of post-Covid instability.

“Analysts and experts are warning of many years of instability across Africa, possibly leading to wars and political upheavals, as the economic impact of the Covid-19 pandemic deepens across the continent.”


Wheat Supplies Are Shrinking and It’s Bad News for Bread Prices.

“Crop losses in two of the world’s biggest wheat exporters and quality concerns in a third have pushed prices to multiyear highs, adding to worries about food price inflation for millions of the world’s most vulnerable… The impact will be felt by households and governments alike…”


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

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

U.S. Mental Health Under Growing Strain in Covid’s Second Summer… It’s been nearly a year since the U.S. Census Bureau started asking Americans about the mental-health effects of the pandemic — and the latest survey shows just how much worse things have gotten since then…

“Even before the pandemic, researchers were focusing on mental health as a serious economic problem as well as a medical one.”


‘Price growth [US] is winning the race’: Inflation is devouring wage gains…

“Rising prices on everything from groceries to gasoline have eaten away the wage gains workers have seen since the start of the year, leaving most Americans earning less than they were before the pandemic began…”


China Partly Shuts World’s Third-Busiest Port [Ningbo-Zhoushan], Risking Trade… China partly shut the world’s third-busiest container port after a worker became infected with Covid

“The fear is that this new disruption will further strain shipping and supplies of goods, dampening growth and driving up prices. An extended shuttering at Ningbo could be especially painful for the world economy…”


In ‘COVID-Zero’ China, paranoia thrives as tourism withers.

“As the Delta variant of the coronavirus spreads to more than half of China’s provinces, the whole country hunkers down while economic forecasts go south.”


What is the human cost of a lockdown? That question has swirled around Australian politics since the pandemic began – and perhaps there is no clear answer. But it seems like western Sydney has reached its breaking point.

I’ve lived in western Sydney my whole life – through many challenging times – and I’ve never felt the palpable sense of fear and paranoia that grips the region now.”


Unpaid rent: the £6.4bn dispute that will shape the UK high street.

“While coronavirus cases have spiked and fallen back over the past 18 months, the pile of rent that has gone unpaid thanks to government-mandated closures has continued to grow, currently standing at £6.4bn, according to Remit Consulting. Tenants are deep in debt and calling on their landlords and their lenders to share some of the pain.”


Why Italy Is Still Struggling to Rescue Monte Paschi.

“Italy’s Banca Monte dei Paschi di Siena SpA is the world’s oldest bank… The lender has been considered too-big-to-fail by successive Italian governments. That’s because the economic and social costs of a liquidation are viewed as unacceptably high, with more than 4.5 million clients, 21,000 employees and 150 billion euros of total assets.”


Negative Yields Are Showing Up in Europe’s Junk Bond Market… The mind-bending phenomenon of negative yields has made its way back to junk bonds

“…a quarter of all global bonds now yield below zero, while only a third of the global fixed income market offers yields in excess of 1%, according to Bank of America Corp. analysts.”


Illegal border crossings into EU rebound sharply in 2021 after 2020 drop due to COVID-19.

“The European Union’s border agency, Frontex, revealed on Thursday that more than 82,000 illegal border crossings were recorded during the first seven months of the year, a 59% increase from a year ago. In 2020, illegal border crossings dropped by 13% year-on-year to reach 124,000 because of the COVID-19 pandemic.”


Nigeria facing worst recession in 40 years, says Fayemi.

“The Governor of Ekiti State, Kayode Fayemi, on Thursday said the COVID-19 pandemic caused setbacks to the several milestones the nation set for itself, including towards Universal Health Coverage by 2030. He regretted that COVID-19 disrupted health systems and economies.”


Growing Alarm in Kenya as Number of Suicides Rise.

“… the Kenya National Commission on Human Rights (KNCHR) …linked the rise in cases to mental ill-health caused by a breakdown in socio-economic safeguards, saying it was the “last resort and path of escape for individuals with unaddressed mental health needs”.”


Lebanon: Politicians blast central bank for ending fuel subsidies.

“Lebanon’s central bank on Wednesday announced it is ending fuel subsidies – a move that was highly anticipated and is likely to send prices soaring, heaping even more pain on economically ravaged households.”


With fuel scarce, Yemen’s forests are next casualty of war.

“…with demand for firewood soaring due to fuel shortages, there are now concerns that the country’s humanitarian crisis, with millions facing starvation, has compounded the risk of deforestation – threatening… the environment of Yemen…”


As pandemic drags on, Latin American women lose even more ground.

“The COVID-19 pandemic threatens to worsen existing gender gaps, exacerbate precarious labour conditions and erase progress made by Latin American women workers.”


Semiconductor shortage reaches a new and unwelcome landmark.

It can now take more than 20 weeks… for an OEM such as Nvidia or AMD, to get their hardware, once they had been ordered – the longest stretch since records began… This basically means the chip shortage is escalating… the prices of various CPUs and GPUs may go even higher… especially with the holiday season approaching.”


Fed Reverse-Repo Facility Usage Jumps to Record $1.087 Trillion.

“The amount of cash investors are parking at a major Federal Reserve facility surged above $1 trillion once again amid an overabundance of U.S. dollars. eventy-four participants on Thursday placed an unprecedented total of $1.087 trillion at the Federal Reserve’s overnight reverse-repurchase facility…”


Liquidity Is Evaporating Even Before the Fed Taper Hits Markets.

“A measure of U.S. financial liquidity whose declines foreshadowed two of the decade’s worst equity routs is flashing alarms even before the Federal Reserve embarks on its planned winding down of asset purchases.”


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

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11th August 2021 Today’s Round-Up of Economic News

Getting ready for ‘America’s worst day’: Troops join cops and firefighters for nuclear and biological doomsday attack training on NY subway and Yankee Stadium

“Soldiers joined police and firefighters on New York’s Randall’s Island to train for ‘America’s worst day’ this week, to prepare for the event of a catastrophic terrorist attack on the Big Apple.

“Pictures show the Army’s Task Force 46 being coached how to respond to a nuclear or biological attack on the New York City subway or Yankee stadium.”


The great US ammunition famine of 2021. How the US ran out of bullets amid a coronavirus pandemic…

“While 2020 saw a massive spike in gun purchases in the US – with millions of new gun owners joining the ranks of the self-militarised and triggering the start of a national ammunition famine – 2021 is on track to reach new peaks.”


Getting Old Is a Crisis More and More Americans Can’t Afford.

“Growing old is an increasingly expensive privilege often requiring supports and services that, whether provided at home or in a facility, can overwhelm all but the wealthiest seniors. With Americans living longer and aging baby boomers flooding the system, the financial strain is becoming unsustainable.”


For the first time in history, the U.S. leveraged finance market, a combination of leveraged loans and high yield (below investment grade) bonds, is over $3 trillion.

“Leveraged loans have grown almost 130% since the financial crisis, more than twice the rate of gross domestic product which increased 57% in the same time period.

“High yield bond issuance also grew significantly, over 90%.”


US debt investors spooked by Delta variant concerns…

“Investors have backed away from the debt of some of the most Covid-afflicted US companies, after re-evaluating the pace of the reopening of the American economy in light of the spread of the Delta variant of the coronavirus.”


Senate Set To Pass $1.2 Trillion Infrastructure Bill After Months Of Negotiations…

“The bill authorizes $550 billion in new spending, including some $110 billion for roads, bridges and other transportation projects, the largest-ever federal investment in public transit, and funds for airports, Amtrak, electric school buses and broadband internet.”


Economists warn of market disruption as Fed balance sheet surpasses $8 trillion…

“”By holding these large bond portfolios [the Fed] is pushing down yields, pushing up asset prices by implication, pushing down spreads and reducing credit discipline,” Paul Gruenwald, global chief economist with S&P Global Ratings, said in an interview.”


Average UK house price hits eye-watering eight times average salary.

“Over the past year, the average house price of UK cities has grown by 10.3%, while earnings for those living and working in cities rose just 2.1%, according to Halifax. Unaffordability is now at its highest level since Halifax began collecting the data in 2011 — it is likely to be the least affordable market ever…”


The UK could see a wave of consumers and SMEs entering into financial difficulties in Q4 2020 following the end of the government’s furlough scheme

“Personal insolvency volumes could rise rapidly in Q4… and the trend could likely persist into 2021, says David Heathcote, personal insolvency expert at TDX Group.”


Germany’s train drivers to go on nationwide strike… The union is demanding a 3.2% salary increase and a one-time “coronavirus bonus” of €600.

“German train operator Deutsche Bahn has rejected the demands. The company has lost billions since the start of the pandemic and from recent floods that destroyed or damaged numerous railroad tracks.”


Spectre of ‘double-dip’ recession looming large [South Korea].

“Fears are growing that Korea will slip back into a recession, as the nation’s economy is likely to contract in the third quarter of the year due to the COVID-19 situation spinning out of control amid a disruption in the supply of vaccines.”


Chinese Bond Swings Threaten Global Debt Investors…

“Policy moves in Beijing are hitting Chinese corporate bonds and rippling across global markets through the U.S. and European money managers who loaded up on the securities in recent years… Chinese bonds are now so widely held that swings in their prices are affecting even bond funds that don’t specialize in developing countries.”


Twenty-Fold Surge in Migrants Seeking the U.S. Alarms Panama…

“The flow of exhausted, half-starved people emerging out of the rainforest in southern Panama typically slows at this time of year as heavy rain makes the route even more hazardous. Instead, numbers spiked, Erika Mouynes, Panama’s foreign affairs minister, said.”


Protesters block roads across Guatemala, urging president to step down…

“It was the third time in the last 15 days that people took to the streets to protest the ousting of Juan Francisco Sandoval, the internationally recognized head of the Special Prosecutor’s Office Against Impunity (FECI), who was investigating potential acts of corruption by Giammattei.”


Colombia’s Oil Industry Tumbles Amid Violent Protests.

“After being rocked by a harsh 2020 where the March 2020 oil price collapse and the coronavirus pandemic sharply impacted operations Colombia’s economically vital petroleum industry is struggling to recover… because of elevated political turmoil and a long-running security crisis.”


Brawls in Lebanon’s north over rationed fuel leave 3 dead.

“Two separate brawls over scarce fuel in northern Lebanon have left three people dead, state media and security sources said, as shortages spark a wave of confrontations at gas stations.”


South Africa remains on high alert for more unrest ahead of Jacob Zuma’s court appearance.

“Zuma was taken to hospital under “medical observation” earlier this week after being jailed for contempt of court while serving as president. Officials now fear that similar riots will erupt following days of violent protests from Zuma loyalists in July.”


Zambia braced for tight election race ahead of IMF bailout talks.

“Zambia is bracing for a tight presidential election that will test the health of democracy in the southern African nation and could further delay talks on a vital IMF bailout in the event of a drawn out dispute. Voting is likely to go to the wire amid the backdrop of the country’s worst economic crisis in decades. 


Is Africa Headed for a Financial Crisis?

“COVID-19 has exerted immense pressure on the world’s emerging markets, yet some of the pandemic’s most painful economic episodes may be yet to come. A rerun of the 2013 “taper tantrum,” a post-recovery collapse in oil prices, and poorly executed multilateral programs are creating economic concerns…”


More than seven million people across six countries in East Africa are one step from starvation. Without immediate aid, thousands of children could face long-term health consequences or death…

Insufficient rainfall, desert locusts, and the previous year’s floods that destroyed mature crops prior to the harvest – not to mention the effects of Covid-19 – are the root causes behind the famine in East Africa.”


Ports face biggest crisis since start of container shipping…

“There are currently 353 container ships stuck outside ports around the world, more than double the number from earlier in the year… The logjam has caused stock shortages and delays to deliveries, raising prices and frustrating consumers at a time when a pandemic-led boom in online shopping has increased demand for next-day delivery.”


The Folly Of Ruling Out A [Stock Market] Collapse.

A remarkable feature of extended bull markets is that investors come to believe – even in the face of extreme valuations – that the world has changed in ways that make steep market losses and extended periods of poor returns impossible.


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

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9th August 2021 Today’s Round-Up of Economic News

Pandemic plunges families into food poverty in world’s rich economies… First increase in food insecurity in Europe and North America since UN data began in 2014

“The price of food commodities traded on international markets has soared recently, driven by droughts in key exporting areas as well as stockpiling by some governments and companies.

“Developing nations, which rely on agricultural imports and food that is less processed, have been acutely impacted, but rich countries would also soon feel the effects, according to economists.”


How the California Megadrought Is Affecting Food Prices… As farmers fight for water, multiple types of food could increase in price due to this megadrought. Timothy Richards, an agricultural economist at Arizona State University, said we’re already starting to see this happen.

““So far we’re seeing avocado prices up 10%,” Richards said. “All of the usual culprits that are water-intensive in California agriculture are starting to increase in prices.””


UK faces shortage of chips [French fries] and roast potatoes as floods in Europe ruin crops

“Unprecedented weather on the continent has affected potato growers and processors in the region, with varieties grown for frozen chips particularly affected, according to hospitality buying firm Lynx Purchasing.”


Army on standby to restock Britain’s shelves amid truck driver shortage… Rod McKenzie, the RHA’s managing director of policy and public affairs, said the lorry driver shortage was “a very serious threat to the supply chain” and that using military drivers is “not a good idea”.

““The Government’s next step is to bring in the Army. There are 2,000 qualified HGV drivers in the Army. [But] we’re 100,000 lorry drivers short,” he said.”


Andrew Bailey, Governor of the Bank of England, almost lost his cool last week when …being challenged over whether “quantitative easing” amounted to monetary financing of the Government’s increasingly insatiable borrowing needs

Once the central bank goes down that road, it’s essentially all over. Markets will soon clock what’s going on, and vote with their feet. The consequent flight of capital will cause the currency to collapse, driving up inflation and interest rates in a way that eventually renders the means of exchange all but valueless.”


Protesters took to the streets across France on Saturday for the fourth weekend in a row to oppose a new coronavirus health pass needed to enter a cafe or travel on an intercity train, two days before the rules come into force.

“The new rules championed by the president, Emmanuel Macron, make it obligatory to either be fully vaccinated against Covid-19, be in possession of a negative test or be recently recovered from the virus to enjoy usually routine activities.”


China’s Economic Risks Build as Delta Cases Spread, Prices Gain [and exports growth slows]

“A report Monday showed factory-gate inflation surging again to 9% in July as commodity prices climbed, while core consumer prices… rose the most in 18 months. At the same time, the spread of the delta variant is threatening China’s growth…”


“I worry every day…” “Could China’s rising household debt threaten Beijing’s consumer-led growth vision?

By the end of last year, China’s household debt as a percentage of disposable income had reached a record high of 130.9 per cent. Servicing loan payments is eating up disposal income that could otherwise be used to buy goods and services to support the economy…”


More than 80,000 people have been evacuated because of heavy rains and floods in Sichuan province, state media reported on Monday…

“State broadcaster CCTV said on Saturday that heavy rain had already caused Sichuan 250 million yuan (US$38.57 million) in economic lossesLast month, the central province of Henan suffered its worst rainstorms in recorded history…”


Kim Jong-un orders military help as torrential rain hits North Korea amid food shortage… In June, Mr Kim had admitted that the country faced a “tense” food situation after the agricultural sector had failed to meet grain targets due to flooding last year caused by typhoons.

The dictator has also said that North Korea had faced the “worse-ever” economic crisis…


Indonesia Covid crisis exposes lockdown dilemma… south-east Asia’s biggest economy has been pummeled by the region’s most severe coronavirus outbreak…

“But Indonesia’s crisis has also exposed an acute challenge facing countries where many work in the informal economy: whether to shutter a country if it jeopardises the livelihoods of large swaths of the population.”


Police fire tear gas, rubber bullets at Bangkok protesters.

“Thailand police have fired tear gas and rubber bullets at demonstrators in Bangkok protesting against the government’s failure to handle coronavirus outbreaks and its effect on the economy.”


They Wait Hours to Withdraw Cash, but Most A.T.M.s Are Empty… Since the coup, Myanmar has been crippled by a cash shortage.

“The economic fallout has had sweeping consequences. With cash in short supply, depositors can’t withdraw their savings, customers can’t pay businesses and businesses can’t pay their workers or creditors. Loans and debts go uncollected.”


Much to their chagrin, the prices of basic food items are rising astronomically, preventing many Nigerians from feeding properly.

“Intriguingly, the rising price regime affects foods produced domestically and those imported, like rice, beans, tomatoes, pepper, onion, flour, egg, oils, bread, plantain, fruits, frozen foods, and yam. These are staple foods…”


Argentinians protest for more jobs, food amid economic crisis.

“Tens of thousands of Argentinians have protested across the country over poverty and unemployment as an economic crisis worsened by the coronavirus pandemic continues to hit residents hard.”


The Argentine River That Carries Soybeans to World Is Drying Up.

“…the Parana River is the main thoroughfare for Argentine commerce. Some 80% of the country’s crop exports flow through its muddy waters en route to the Atlantic Ocean. So when the river’s levels fell to the lowest since the 1940s — the result of years of scorching drought that scientists attribute to climate change — it deepened the strains on an economy that was already struggling to recover from its pandemic collapse.”


Venezuelans desperately ditching bolivars as inflation bites…

“As the bolivar depreciated, Venezuelans increasingly started using the dollar, while many shops and supermarkets began accepting the Zelle electronic payment system that requires its users to hold a bank account outside of the country.”


‘If I go back, I’ll die’: Colombian town scrambles to accommodate 10,000 migrants… amid chronic water shortages

“…numbers are now much higher than usual due to worsening conditions in countries of origin – such as Haiti, Venezuela, and Cuba – and the loosening of travel restrictions.”


More Cubans try dangerous trip to US across Florida Straits…

“Cuba is seeing a surge in unauthorized migration to the United States, fueled by an economic crisis exacerbated by the pandemic, increased U.S. sanctions and cutbacks in aid from its also-crisis-wracked Venezuelan ally.”


Freight rates continue to rise due to the container shortage and the economic pull of the USA

“A stabilisation… will not arrive until the end of 2022, according to the forecasts of the president of the Port Authority, who has recognised that the situation has caused a collapse in the logistics chain.”


The era of cheap natural gas ends as prices surge by 1,000%. [Until our debt bubbles start popping, at which point both fuel prices and our ability to afford them will spiral downwards.]

“The era of cheap natural gas is over, giving way to an age of far more costly energy that will create ripple effects across the global economy… European gas rates reached a record last week…”


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

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