Daily updates on climate change and the global economy.

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

China’s exports drop sharply as global economy slows:

China’s exports to the rest of the world shrank unexpectedly in October, a sign that global trade is in sharp retreat as consumers and businesses cut back spending in response to central banks’ aggressive moves to tame inflation.

“The slide in exports from the world’s factory floor adds to the gloom surrounding the global economy as leaders from the Group of 20… prepare to gather in Indonesia next week.”

https://www.wsj.com/articles/chinas-exports-drop-sharply-as-global-economy-slows-11667798450


“Complete collapse” in demand for container freight – and it could get worse.

“Demand for container transportation is in free fall, show numbers from September and the situation will get even worse before the turn of the year, according to Sea-Intelligence.”

https://shippingwatch.com/carriers/Container/article14562124.ece


China’s super-rich see fortunes plunge as economy slows.

“China’s super-rich saw their wealth fall by the largest amount in over two decades, as the Russia-Ukraine war, Beijing’s zero-Covid measures and falling local stock markets pummelled fortunes, an annual rich list showed.”

https://www.theguardian.com/world/2022/nov/08/hurun-rich-list-china-super-rich-see-fortunes-plunge-as-economy-slows


Pessimism about China’s banking sector has plunged to an unprecedented level, even reaching the depths where US lenders traded during the 2008 financial crisis.

“The four biggest lenders… are priced at near record low valuations of about 0.4 of their book value in Hong Kong after a sector index weakened to an 11-year low… Investors demand a 26% country risk premium…”

https://www.bloomberg.com/news/articles/2022-11-08/china-banks-are-valued-like-us-peers-at-depths-of-2008-crash


Fears grow over liquidity crisis at brokerages, insurers [South Korea]…

“Concerns of a possible crisis at non-bank financial firms are growing as local insurers and brokerage houses are suffering from a liquidity shortage that is feared to send shock waves through the entire financial market here.”

https://www.koreatimes.co.kr/www/biz/2022/11/602_339271.html


Vietnamese governor tries to calm fears over banks.

“Vietnam’s central bank governor tried to calm fears over the stability of the country’s banking system, after reports that commercial lenders were facing liquidity difficulties. Nguyen Thi Hong appeared on state-run TV to say the central bank had held several meetings with lenders…”

https://www.centralbanking.com/central-banks/financial-stability/7953596/vietnamese-governor-tries-to-calm-fears-over-banks


Billions in Capital Calls Threaten to Wreak Havoc on Global Stocks, Bonds… The private market is coming to collect…

“As financial conditions tighten around the world, private-market funds are demanding that investors stump up more of the cash they pledged during the easy-money days of the pandemic.”

https://www.bloomberg.com/news/articles/2022-11-07/billions-in-capital-calls-threaten-forced-sales-of-stocks-bonds


Higher interest rates mean only wealthy Americans can afford a new car. The Fed is making new cars something only the wealthy can afford.

““With rates expected to go even higher and stay there for at least the duration of 2023, the auto market will become more dependent on cash-rich, higher-income, and higher credit-tier consumers.” — Jonathan Smoke, chief economist, Cox Automotive.”

https://www.msn.com/en-us/money/personalfinance/the-auto-market-was-already-reeling-now-higher-interest-rates-mean-only-the-wealthy-can-afford-a-new-car/ar-AA13OUI1


Fed-Forced Housing Crash Could Allow Institutions to Snag Bigger Share of the Housing Market.

“By the end of the decade, according to market intelligence firm Yardi Matrix, institutions will hold 40% of all single-family rental homes in the United States. Large-scale investors grabbed the chance presented by this wave and the ensuing increase in rental demand from displaced former homeowners in the years following the 2008 crash.”

https://finance.yahoo.com/news/fed-forced-housing-crash-could-154038383.html


U.S. Oil Companies Remain Cautious as Economic Headwinds Grow.

“The U.S. shale patch will not help ease what could be a very tight global oil market when the EU embargo on imports of Russian seaborne oil enters into force in just a few weeks. Even if they wanted to, American producers would not be able to boost oil production too much, despite repeated calls and threats from the Biden Administration…”

https://oilprice.com/Energy/Crude-Oil/US-Oil-Companies-Remain-Cautious-As-Economic-Headwinds-Grow.html


The US Northeast Is Hurtling Toward a Winter Heating Crisis.

“…the signs of a winter crisis are already multiplying. Heating oil delivered to New York is the priciest ever. Retailers in Connecticut are rationing it to prevent panic buying. New England’s stockpiles of diesel and heating oil — the same product, taxed differently — are a third of normal levels.”

https://www.bloomberg.com/news/articles/2022-11-07/the-us-northeast-is-hurtling-toward-a-winter-heating-crisis


The Bank of England risks hurtling toward another bond market crisis as new signs of strain bubble up and threaten to force another intervention, City traders have warned.

“Traders have pointed to mounting stress in the so-called “repo” market and short-dated UK debt, known as gilts, just weeks after the post mini-Budget bond chaos pushed Britain’s pensions funds to the brink of collapse.”

https://www.telegraph.co.uk/business/2022/11/06/bank-england-risks-repeat-mini-budget-bond-markets-chaos-warn/


Britain is suffering the worst cost of living crunch of any G7 nation, as the combined effects of the pandemic and the energy crisis drain households’ finances.

“Real household incomes per capita in the UK dropped by 3.5pc between the end of 2019 and the second quarter of this year, according to the Organisation for Economic Co-operation and Development (OECD).”

https://www.telegraph.co.uk/business/2022/11/07/ftse-100-markets-live-news-tax-autumn-budget-steel-house-prices/


UK food price inflation hits record 14.7% with ‘no peak in sight,’ researchers Kantar warn.

“Just over a quarter of households (27%) say they are struggling financially – double the figure recorded last November, the research firm Kantar said. The cheapest value ranges grew by 42% as shoppers sought to manage their budgets, the research found, while sales of supermarket own-label products jumped again by 10.3% over the latest four weeks.”

https://www.itv.com/news/2022-11-08/food-price-inflation-hits-record-147-with-no-peak-in-sight-researchers-warn


Photos: Thousands march in London in ‘Britain is broken’ protest.

“Thousands of people joined a demonstration in London, calling for general elections amid the worsening cost-of-living crisis in the United Kingdom. A coalition of trade unions and community organisations took part in the “Britain is Broken” protest, organised by The People’s Assembly, in central London on Saturday.”

https://www.aljazeera.com/gallery/2022/11/6/uk-protest-high-cost-of-living


One in four Europeans say their financial position is ‘precarious’.

“As the cost of living crisis, driven by high energy prices, rampant inflation and Russia’s war on Ukraine, tightens its grip, the six-country survey for the French anti-poverty NGO Secours Populaire painted an alarming picture of “a continent on the brink”.

https://www.theguardian.com/world/2022/nov/07/one-in-four-europeans-say-their-financial-position-is-precarious


Germany keen to discuss natural gas pact with UK amid supply risk.

“Germany is keen to talk to Britain about a solidarity pact that would allow Europe’s largest consumers of natural gas to bail each other out if an extreme cold snap were to create shortages this winter, German officials have said. Such an agreement could be mutually beneficial for both London and Berlin…”

https://www.theguardian.com/world/2022/nov/08/germany-keen-to-discuss-natural-gas-pact-with-uk-amid-supply-risk


Drought Forces One of Spain’s Largest Hydro Plants to Halt…

“The Mequinenza facility, located in the north-eastern region of Aragon, will stop operating in mid-November after water levels subsided to below 23% of capacity, Endesa SA said in a statement. It’ll be the first time the plant has stopped functioning since it was opened in 1966.”

https://www.bloomberg.com/news/articles/2022-11-07/drought-forces-one-of-spain-s-largest-hydro-power-plants-to-halt


Italy blocks rescued migrants from landing and orders ship to leave port.

“Italy’s new right-wing government is attempting to stop European charities landing migrants rescued from the Mediterranean at the country’s ports, in a first test of its campaign pledge to curb illegal migration from north Africa. Rome’s tough new tactics have left migrants stuck for up to 14 days on board four ships…”

https://www.ft.com/content/a59acc21-08ad-42b1-ba1d-fd4c21b9066a


Venezuelans who braved horrific jungle trek may now have to repeat it…

“Thousands of Venezuelans from Panama to Mexico have found themselves in …desperate limbo. After risking their lives to cross the only land bridge connecting South to Central America, they received the bewildering news that the US is no longer receiving Venezuelan asylum seekers at the Mexican border.

https://www.theguardian.com/world/2022/nov/06/venezuelan-migrants-asylum-seekers-panama-darien


Peru: Police clash with protesters in capital Lima.

“Riot police used tear gas to disperse protesters in Peru’s capital Lima, as thousands of people took part in anti-government marches across the country… Peru faces a number of economic issues, including spiralling living costs.

https://www.bbc.co.uk/news/world-latin-america-63530879


Ghanaians take to the streets demanding resignation of President Akufo-Addo.

“Ghana is seeking a $3 billion loan from the IMF to cope with record inflation of 37% and the collapse of its currency, the cedi. Most of the demonstrators wore red T-shirts bearing the slogan “You might as well kill me.”

https://www.africanews.com/2022/11/06/ghanaians-take-to-the-streets-demanding-resignation-of-president-akufo-addo/


Pakistan’s oil sector warns of looming petrol, diesel crisis.

“The Oil Companies Advisory Council (OCAC) of Pakistan has said that the country is expected to face petrol and high-speed diesel shortage in the days ahead, calling for special measures to avert the looming fuel crisis.”

https://www.siasat.com/pakistans-oil-sector-warns-of-looming-petrol-diesel-crisis-2451681/


Europe’s Energy Crunch Will Trigger Years of Shortages and Blackouts [in poorer countries]…

“…deeper costs will be borne by the world’s poorest countries, which have been shut out of the natural gas market by Europe’s suddenly ravenous demand. It’s left emerging market countries unable to meet today’s needs or tomorrow’s, and the most likely consequences — factory shutdowns, more frequent and longer-lasting power shortages, the foment of social unrest — could stretch into the next decade.”

https://finance.yahoo.com/news/europe-energy-crunch-trigger-years-000005461.html


Debt burden traps global south in a vicious cycle…

““Developing countries have to balance between urgent climate needs and paying back debts,” says Jessica Omukuti, research fellow at the University of Oxford’s Inclusive Net Zero initiative. “If you can’t pay back your debts, your credit rating goes down, [and] you compromise your partnerships and your future capacity to get finance.””

https://www.ft.com/content/f4b04f39-8b9d-463d-8e95-ebb0d1514e21


Even Central Banks Are Buying Gold for the Zombie Apocalypse; Governments in developing economies are building up their bullion holdings as trust breaks down.

“In the notoriously opaque world of government gold trading, it’s not always immediately clear who the biggest buyers are… There is one obvious factor in common between the declared buyers, however: All are from nations facing serious problems.”

https://www.bloomberg.com/opinion/articles/2022-11-06/central-banks-in-emerging-markets-are-biggest-gold-buyers


Business Leaders Wary of Increasingly Geopoliticized Global Economy…

“Executives were asked to identify the risks they considered the biggest threats to their country over the next two years. The responses from more than 12,500 executives across 122 economies reflect a clear unease about economic headwinds against a backdrop of aggravated geopolitical tensions.”

https://www.brinknews.com/business-leaders-wary-of-increasingly-geopoliticized-global-economy/


The new era of decoupling, deglobalisation and economic war. The Covid-19 pandemic marks the end of the great era of globalisation. Now the troubled times of decoupling arrive. We are at a Matthew Arnold moment:

“Wandering between two worlds, one dead,
The other powerless to be born,
With nowhere yet to rest my head,
Like these, on earth I wait forlorn.”

https://www.aspistrategist.org.au/the-new-era-of-decoupling-deglobalisation-and-economic-war/


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

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

Fossil fuel projects were stalled a year ago. Now they’re making a comeback…

“…the fossil fuel industry is experiencing a remarkable rebound, with sudden momentum behind more than 80 projects that range from coal-fired power plants to hulking gas export terminals, many of which could lock the world into decades of new greenhouse gas emissions.

“The backsliding is occurring as nations grope for alternatives to Russian natural gas, cut off by sanctions after the invasion of Ukraine. It will be a major point of tension at this year’s global climate summit, which begins in Egypt on Sunday. It throws into further jeopardy a global carbon budget crafted to avert climate chaos…”

https://www.washingtonpost.com/business/2022/11/03/fossil-fuel-cop27-russia/


Coal Was Meant to Be History. Instead, Its Use Is Soaring.

“Even as the globe is increasingly battered by floods, droughts and storms caused by climate change, the fuel that contributes most to planet-warming emissions is undergoing a renaissance. Global coal power generation could set a record for a second-straight year and remains the world’s biggest source of electricity.”

https://www.bloomberg.com/news/articles/2022-11-04/most-polluting-fossil-fuel-finds-new-life-with-world-burning-more-coal-for-power


OPEC: Higher Oil Investments Are Needed to Avoid Rampant Volatility…

“The significant decline in investments in the oil industry, which began with the price crash of 2015 and then again in 2020 with the first COVID wave, is exacerbating volatility in the oil market, OPEC’s secretary general said. Spare capacity globally is currently very low and in the hands of two of the major OPEC producers, Saudi Arabia and the United Arab Emirates (UAE).”

https://oilprice.com/Energy/Energy-General/OPEC-Higher-Oil-Investments-Are-Needed-To-Avoid-Rampant-Volatility.html


Hedge-fund giant Elliott warns looming hyperinflation [their analysis is purely financial; not factoring in our eco/energy predicaments] could lead to ‘global societal collapse’…

“It added that the “extraordinary” period of cheap money is coming to an end and has “made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period.” The letter reportedly said the world is “on the path to hyperinflation,” which could lead to “global societal collapse and civil or international strife.””

https://www.marketwatch.com/story/hedge-fund-giant-elliott-warns-looming-hyperinflation-could-lead-to-global-societal-collapse-11667470081


Fed Frets About Shadow Banks and Eyes Treasury Liquidity in New Report…

Financial stability issues are in focus as central banks around the world raise interest rates in synchrony and other markets around the world — including the government bond market in Britain — offer early warning signs that cracks are beginning to emerge.”

https://www.nytimes.com/2022/11/04/business/economy/fed-shadow-banks.html


Global manufacturing PMI slips further into contraction territory as new orders decline solidly.

“The global manufacturing PMI survey’s Output Index, which acts as a reliable advance indicator of actual worldwide output trends, signalled a third successive monthly drop in worldwide factory production in October… Of the 31 economies for which S&P Global PMI data are available for October, some 21 reported falling production, which was also the case in September.”

https://ihsmarkit.com/research-analysis/global-manufacturing-pmi-slips-further-into-contraction-territory-as-new-orders-decline-solidly-Nov22.html


Chip Makers Cut Costs as Demand Slump Supplants Pandemic’s Chip Shortage…

“What has happened is that the macroeconomic environment deteriorated, and we went from a period of supply shortages to demand declines,” Akash Palkhiwala, Qualcomm’s chief financial officer, said in a call with analysts. “It’s an unprecedented change over a short period of time.”

https://www.wsj.com/articles/chip-makers-cut-costs-as-demand-slump-supplants-pandemics-chip-shortage-11667560050


Air cargo market continues to deflate under global economic pressures.

“The air cargo market continued to unwind 18 months of record gains in October as the global economy slows and consumers tighten their purse strings while spending more on services. The industry is well into the typical peak season with little sign of increased shipping activity. Demand and rates are falling at a time when both normally climb.”

https://www.freightwaves.com/news/air-cargo-market-continues-to-deflate-under-global-economic-pressures


“The Bank of England warned Thursday that the U.K. is facing its longest recession since records began, with the economic downturn expected to extend well into 2024.

“The central bank described the outlook for Britain’s economy as “very challenging,” noting that unemployment would likely double to 6.5% during the country’s two-year slump.”

https://www.cnbc.com/2022/11/03/bank-of-england-uk-faces-longest-ever-recession.html


Food shortages ‘significant risk’ if energy bailout not extended, ministers warned.

“Chancellor Jeremy Hunt has been warned there is a “significant risk” of food shortages and further inflation if the government fails to extend its energy bailout beyond the winter. The Cold Chain Federation has written to the Chancellor, as well as new business secretary Grant Shapps…”

https://www.thegrocer.co.uk/suppliers/food-shortages-significant-risk-if-energy-bailout-not-extended-ministers-warned/673154.article


Pandemic and energy crisis are reshaping funerals in the UK…

Last year, almost a fifth of funerals were “direct cremations”, also known as unattended funerals. There is no hearse, procession or funeral service and they can cost less than £1,000, compared with £3,700 on average for a cremation.”

https://www.ft.com/content/57d25c27-4dbf-4e27-a458-fc978be84843


European nations delay fossil fuel finance ban, blaming energy crisis…

“The statement “recognis[es] the ongoing development of national approaches” and leaves space for ministers “to decide on a potential policy alignment between countries”. It removed a section saying that any exceptions to the fossil fuel ban must be consistent with limiting global warming to 1.5C.”

https://www.climatechangenews.com/2022/11/04/european-nations-delay-fossil-fuel-finance-ban-blaming-energy-crisis/


Mon Dieu! France Is Heading Toward Winter Blackouts…

France will only avoid some form of power outage if the winter is mild… Despite all the promises by French ministers that the country’s nuclear fleet would be up and running ahead of the cold weather, it’s now clear the reactors will only be able to deliver a fraction of what’s needed on those cold nights in December and January.”

https://www.bloomberg.com/opinion/articles/2022-11-04/mon-dieu-france-is-heading-toward-winter-blackouts


Germany’s Manufacturing Slump Deepens as Energy Costs Soar…

“The entire Eurozone manufacturing sector has tumbled into recession, with output falling at the steepest rate since the initial COVID wave as demand for goods plummets, the S&P Global Eurozone Manufacturing PMI survey also showed this week.”

https://oilprice.com/Latest-Energy-News/World-News/Germanys-Manufacturing-Slump-Deepens-As-Energy-Costs-Soar.html


Uniper SE reported one of the biggest losses in German corporate history, with Russia’s stranglehold on gas supplies leaving the giant utility struggling to survive.

Uniper reported a net loss of about €40 billion ($39.3 billion) in the first nine months of the year after being forced to buy gas at prices far beyond what it paid Russia under long-term contracts.”

https://www.bloomberg.com/news/articles/2022-11-03/uniper-suffers-40-billion-loss-amid-russian-gas-supply-cuts


Ukraine war causes spike in Estonia’s oil shale needs…

“The difficult geopolitical situation caused by the war in Ukraine has hiked the price of oil shale energy for Estonia. The need for oil shale is so great that Eesti Energia cannot mine enough of it and is forced to buy more… Increased demand for oil shale follows Estonia’s decision to start offering customers fixed prices as the universal service…”

https://news.err.ee/1608778234/ukraine-war-causes-spike-in-estonia-s-oil-shale-needs


Poles’ winter anxiety over lack of coal in coal dependent Poland.

“Millions of Poles are still reliant on coal for their energy and heating needs, but a steady decline in the country’s production, the embargo on Russian imports, and inflation have all played their part in a looming energy crisis this winter.”

https://www.euronews.com/2022/11/03/poles-winter-anxiety-over-lack-of-coal-in-coal-dependent-poland


Slovakia: Firewood back as energy crisis bites…

“According to the Slovak Ministry of Agriculture, the demand for firewood almost doubled in September compared with last year. Slovakia is not alone in this respect. Recently, the website Politico warned that European forests were facing “a very dark winter,” with many NGOs and scientists worrying that high demand for firewood could increase illegal logging.”

https://www.dw.com/en/slovakia-firewood-back-as-energy-crisis-bites/a-63648738


Austrian political crisis grows as drama unfolds at corruption hearing…

“With opposition politicians calling for a new election, public anger over corruption is denting support for Austria’s governing coalition and boosting the standing of the hard-right, populist Freedom party (FPÖ) in the wealthy EU member state.”

https://www.ft.com/content/2061b421-d0d5-4fe0-8a4d-0e67a7f9484b


Italy PM Meloni hikes govt borrowing to tackle energy crisis…

“After winning a Sept. 25 election the hard-right leader quickly made clear that most of her coalition’s more ambitious election pledges such swingeing tax cuts and higher pensions would have to wait until better economic times.”

https://www.reuters.com/markets/europe/italy-unveil-higher-deficit-targets-help-economy-sources-say-2022-11-04/


Greece: Unions plan 24-hour nationwide strike and protests Nov. 9…

“Major trade unions in Greece plan to strike and protest in Greece Nov. 9 to denounce the Russian offensive against Ukraine and call for government intervention to mitigate related price increases. Members of various groups, including PAME, and the General Confederation of Greek Workers (GSEE), will observe a 24-hour nationwide strike.”

https://crisis24.garda.com/alerts/2022/11/greece-unions-plan-24-hour-nationwide-strike-and-protests-nov-9


New Zealand the ‘kiwi in the coalmine’ as house prices slump and repayments rise.

“Experts say New Zealand has become the “kiwi in the coalmine” for the world’s property markets, as rising interest rates and falling house prices put some borrowers at risk of negative equity, where they owe more on their mortgage than their house is worth.”

https://www.theguardian.com/world/2022/nov/05/new-zealand-the-kiwi-in-the-coalmine-as-house-prices-slump-and-repayments-rise


Japan economy set to slow sharply as global inflation, recession risks hurt.

“Japan’s economy is expected to have slowed markedly in the third quarter as global recession risks hurt external demand while rising inflation and a weak yen’s impact on imported prices forced consumers to keep their wallets shut.”

https://www.reuters.com/markets/asia/japan-economy-set-slow-sharply-global-inflation-recession-risks-hurt-2022-11-04/


China, Japan and South Korea ramp up winter fuel stockpiles to cut costly LNG amid global energy crisis.

“Key Asian economies are stockpiling fuel, diversifying sources and conserving power to ensure adequate supplies for winter, as an unprecedented global energy crisis makes spot liquefied natural gas (LNG) purchases costly.”

https://www.scmp.com/news/asia/article/3198288/north-asia-ramps-fuel-stockpiling-winter-cut-costly-lng-during-global-energy-crisis


Barclays cuts China GDP outlook after forecasting U.S., Europe recession…

““China’s share of global exports has been shrinking this year,” the analysts said. “Foreign companies are seen to have shifted their orders away from China to its Asian neighbors, including Vietnam, Malaysia, Bangladesh and India, for the production of some key labor-intensive goods.””

https://www.cnbc.com/2022/11/04/barclays-cuts-china-gdp-after-forecasting-us-europe-recession.html


Bolivian civic group threatens national strike as census protests escalate…

“In recent weeks, protesters have set up road blockades in the city of Santa Cruz, the country’s wealthiest, while another regional town this week saw clashes break out on the street, with fireworks thrown and police using tear gas.”

https://www.reuters.com/world/americas/bolivian-civic-group-threatens-national-strike-census-protests-escalate-2022-11-03/


Indigenous people in Peruvian Amazon detain tourists in oil spill protest.

““[We want] to call the government’s attention with this action. There are foreigners and Peruvians, there are about 70 people,” Watson Trujillo, the leader of the Cuninico community, told RPP radio. French, Spanish and Swiss citizens are also among the detained tourists…”

https://www.theguardian.com/environment/2022/nov/04/indigenous-people-in-peruvian-amazon-detain-tourists-in-oil-spill-protest


The Metals for Your EV Are Stuck in a 30-Mile Traffic Jam.

“In order to get a truckload of copper out of Africa and into the hands of tech-hungry buyers, Chanda Kulungika must spend a week sitting in one of the world’s longest traffic jams… Africa’s metals are no good to anyone if they can’t get out. The 1,900-mile journey from mines in Congo and Zambia to the ports is so riddled with bottlenecks and jams that it can take more than a month.”

https://www.bloomberg.com/features/2022-africa-copper-supply-chain-snarls


Ghana’s Credit Rating May be Cut By Fitch If Debt Restructured in IMF Talks.

“Ghana’s sovereign credit rating may be downgraded closer to default by Fitch Ratings should talks with the International Monetary Fund on a record new $3 billion funding package lead to debt restructuring… Investors have been concerned about the financial health of Africa’s second-biggest gold producer…”

https://www.bloomberg.com/news/articles/2022-11-04/ghana-faces-fitch-cut-nearer-to-default-if-debt-restructured


Nigeria: Debt distress and fears of a recession…

In a last-ditch attempt at reining in liquidity, the board of the central bank has decided to call over 2.7 trillion banknotes in circulation, within a 90-day period. However, it was excessive government spending to fund the deficit and pay for direct intervention programmes that led to the doubling of the cash in circulation in the first place…”

https://www.theafricareport.com/255667/nigeria-debt-distress-and-fears-of-a-recession/


Cop27: Egyptian authorities arrest scores of people calling for cost of living protests…

“Egyptian authorities have tightened their grip over protesters in recent weeks as the country prepares to host the Cop27 summit in the Red Sea resort of Sharm el-Sheikh between 6 and 18 November… Egypt’s currency, the pound, has lost almost 25 percent against US dollar since January, while banks have struggled to salvage foreign currency to import essential goods such as tea.”

https://www.middleeasteye.net/news/cop-egypt-authorities-arrest-people-cost-living-protests


Cleric killed in restive Iranian city, protests rage on.

“A cleric at a Shi’ite Muslim mosque in the restive, mostly Sunni Muslim Iranian city of Zahedan has been shot dead, the official news agency IRNA said, threatening a spike in sectarian tensions complicating government efforts to contain widespread unrest.”

https://www.reuters.com/world/middle-east/iranian-human-rights-lawyers-criticise-clerical-leaders-amid-unrest-2022-11-03/


Protests erupt across Pakistan after attack on Imran Khan.

“Protests erupted in multiple cities across the country after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan and other PTI leaders were injured in a gun attack…”

https://www.siasat.com/protests-erupt-across-pakistan-after-attack-on-imran-khan-2448954/

Pakistan’s economic condition worsens as default on borrowing spikes.

“Fast deteriorating CDS [credit default swap] is signalling the foreign investors that Islamabad is precariously near default. Rather than taking SOS measures for economic revival, Islamabad is still pinning its hope on assistance from Saudi Arabia and China which have dried up in the recent past.”

https://www.devdiscourse.com/article/international/2239738-pakistans-economic-condition-worsens-as-default-on-borrowing-spikes


Last handful of fish: Crisis pushes more Sri Lankans into poverty… “In her outstretched palms, 49-year-old Nilanthi Gunasekera holds her family’s last remaining handful of dried fish – a reminder of Sri Lanka’s worst economic crisis in decades.

“She is just one of the millions of Sri Lankans battling a calamitous decline in living standards as they find themselves forced to skip meals, ration medicines and turn to firewood in place of cooking gas.

““Now fish is out of the reach of our family, and so is meat,” Gunasekera said, grasping the shards of fish. “For two weeks we couldn’t afford any meat or fish. This is our last protein.””

https://www.independent.co.uk/asia/south-asia/sri-lanka-economic-crisis-food-poverty-b2216780.html


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 an enormous help as the cost-of-living crisis ratchets up here in the UK.

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

Shipping giant Maersk warns of ‘dark clouds on the horizon’.

“The spike in shipping rates since the onset of the pandemic has been a huge boon for Maersk. But the Danish shipping giant is warning its business will have to endure tougher times soon.

The company said Wednesday that a looming global recession is expected to reduce container demand by between 2% and 4% in 2022, with “plenty of dark clouds on the horizon.”

https://edition.cnn.com/2022/11/02/business/maersk-ceo-recession/index.html


Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council (WGC) said on Tuesday…

Gold is typically seen as a safe asset for times of uncertainty or turmoil…”

https://www.reuters.com/markets/commodities/record-central-bank-buying-lifts-global-gold-demand-wgc-says-2022-11-01/


Globalisation might end in a world conflict.

“How might globalisation end? Some seem to imagine a relatively peaceful “decoupling” of economies until recently stitched so tightly together. But it is likely that the fracturing of economic ties will be both consequence and cause of deepening global discord. If so, a more destructive end to globalisation is likely…

A breakdown of co-operative relations is likely to end whatever chance exists of avoiding a runaway process of climate change.

https://www.ft.com/content/8954a5f8-8f03-4044-8401-f1efefe9791b


Dozens of US Coal Plant Closures Delayed as Green Energy Shift Slows.

“As many as 40 US coal-fired power plants that were slated to shut will run for longer than expected, with operators delaying plans to retire them as supply-chain issues and reliability concerns slow the transition to greener energy… The delays reveal headwinds for a large-scale shift to cleaner energy…

https://www.bloomberg.com/news/articles/2022-11-01/forty-us-coal-plant-closures-are-delayed-as-green-energy-transition-slows


US rates hit 4pc as Fed warns of more rises to come.

“The Fed has said that “ongoing increases” in interest rates will likely be needed after it raised interest rates by 75 basis points to between 3.75pc to 4pc. The latest move – its fourth straight increase at this level – means US rates have hit a fresh high since 2008 as policymakers make their latest bid to tame inflation.”

https://www.telegraph.co.uk/business/2022/11/02/ftse-100-markets-live-news-tax-rises-bank-england-bp/


There is wide agreement among economists and market observers that the Federal Reserve’s aggressive interest rate hikes will cause economic growth to grind to a halt, leading to a recession. Less talked about is the risk of a financial crisis as the U.S. central bank simultaneously tries to shrink its massive balance sheet…

Given the sheer size of the Treasury market, problems there are likely to leak into virtually every other market in the world.

https://news.yahoo.com/fed-faces-twin-threats-recession-231215497.html


“Can the Fed fight inflation without triggering a meltdown?

“…The reality is that the shadow banking system is now so big and so opaque, the trades and instruments so complex and intertwined, and the players so herd-like in their behavior that any dramatic move in the price of one security, one commodity, one currency — or the collapse of one player — can trigger a chain reaction that ultimately could crash the entire system.”

https://www.washingtonpost.com/us-policy/2022/11/02/federal-reserve-financial-crisis/


“Risk of global financial crisis spiking… Unfortunately, a by-product of this bold strategy [by the Fed] will likely be a sharp contraction of the global economy in the first half of 2023…

This “almost certain” global economic slowdown could signal a death blow for the already ailing world financial system, which is loaded with problems and on the brink of going under. We could see the collapse of commercial and investment banks, which could trigger a financial crisis similar to the Great Depression of the 1930s or the subprime debt crisis of 2008.

https://www.bangkokpost.com/opinion/opinion/2428665/risk-of-global-financial-crisis-spiking


Cash-strapped Canadians have run their credit card debt up to a record high: Equifax.

“Equifax Canada’s consumer survey out today found that the average credit card balance has now reached a record high of $2,121… The total average non-mortgage debt is $21,188, a high not seen since the first quarter of 2020.”

https://financialpost.com/executive/executive-summary/credit-card-debt-inflation-equifax


UK food prices soar by fastest rate on record as cost of living crisis bites.

“UK food price inflation soared to a record annual rate of 11.6% in October as staples such as teabags, milk and sugar became more expensive along with fresh food, data shows… There is little hope that food price inflation will ease off soon, warned Andy Clarke, the former chief executive of the supermarket chain Asda.”

https://www.theguardian.com/business/2022/nov/02/uk-food-prices-soar-by-fastest-rate-on-record-as-cost-of-living-crisis-bites


UK manufacturing faces deep recession as output slumps… Factory output was hit especially hard by a drop in new orders amid a global fall in the demand for industrial goods.

“The S&P Global/CIPS UK Manufacturing PMI, a measure of activity across the sector, scored 46.2 in October, down from 48.4 in September to hit a 29-month low. A figure below 50 signals that the sector is shrinking.”

https://www.theguardian.com/business/2022/nov/01/uk-manufacturing-faces-deep-recession-as-output-slumps


UK Government tests energy blackout emergency plans as supply fears grow…

“The Guardian has seen documents, marked “official sensitive”, which warn that in a “reasonable worst-case scenario” all sectors including transport, food and water supply, communications and energy could be “severely disrupted” for up to a week.

https://www.theguardian.com/business/2022/nov/01/government-tests-energy-blackout-emergency-plans-as-supply-fears-grow


Bank of England begins selling bonds as it unwinds QE programme.

“The Bank of England has become the first major central bank to sell bonds back to financial markets, as it presses ahead with plans to unwind the quantitative easing programme, through which it holds almost £850bn of gilts.”

https://www.ft.com/content/64e5dcdd-42a8-4013-a3bd-75a62cf8e6dc


Moody’s cuts outlook for European banks, including Germany’s, on credit woes.

“Global credit ratings agency Moody’s downgraded its outlook for banks in Germany, Italy and four other countries to “negative” from “stable” on Wednesday as Europe’s energy crisis and high inflation weaken its economies.”

https://www.reuters.com/business/finance/moodys-downgrades-outlook-banks-germany-italy-others-2022-11-02/


Credit Suisse Cut to One Level Above Junk Status by S&P…

“The US ratings firm, echoing several analysts after the restructuring was announced on Thursday, said it sees “material execution risks amid a deteriorating and volatile economic and market environment.” It also signaled that some details around asset sales remain “unclear.””

https://www.bloomberg.com/news/articles/2022-11-02/credit-suisse-downgraded-by-s-p-on-risks-to-planned-overhaul


Europe’s next debt crisis is only just beginning – tearing North and South apart…

“The eurozone credit crunch has begun in earnest. Lending conditions across the currency bloc are the tightest since late 2012, when the region was still crippled by the sovereign debt crisis. The European Central Bank’s lending survey (BLS) is a leading indicator of what is to come. Both the supply and demand for credit definitively buckled in the third quarter…”

https://www.telegraph.co.uk/business/2022/11/01/europes-next-debt-crisis-just-beginning-tearing-north-south/


Energy crisis chips away at Europe’s industrial might.

“…demand for natural gas and electricity both fell in the past quarter. It is far too early to rejoice, though. The drop is not just because industrial companies are turning down thermostats, they are also shutting down plants that may never reopen… For example, EU primary aluminium output was halved, cut by 1 million tonnes, over the past year.”

https://www.reuters.com/business/energy/energy-crisis-chips-away-europes-industrial-might-2022-11-02/


Europe sinks deeper into stagflation.

“Economic activity in the eurozone has been battered by soaring inflation which has forced households to cut back on spending. At the same time, the steep rise in energy costs has forced manufacturers to either scale back or shutter production.”

https://www.afr.com/companies/financial-services/europe-sinks-deeper-into-stagflation-20221101-p5bukc


Russia’s economy shrank by 5% on an annualised basis in September, the economy ministry said on Thursday, a sharper contraction than the 4% recorded a month earlier.

“Western sanctions and the fallout from Russia sending tens of thousands of troops into Ukraine in February have pushed the country into recession, but Moscow says the West has failed to destroy the Russian economy.”

https://www.reuters.com/markets/europe/russias-economy-shrinks-5-year-on-year-september-economy-ministry-2022-11-02/


One in four Australians struggling to make ends meet as inflation strains incomes, study shows…

“Those are the findings of an Australian National University survey of almost 3,500 adults that confirms inflation is harming Australians’ economic wellbeing, with many registering a real pay cut despite working more hours.”

https://www.theguardian.com/australia-news/2022/nov/03/one-in-four-australians-struggling-to-make-ends-meet-as-inflation-strains-incomes-study-shows


Sharp Yen Swing Has Traders on Watch for Post-Fed Japan Reaction…

“Officials have repeatedly said they will step in to counter one-sided yen weakness, although some analysts warn that any intervention will have a limited impact as long as the policy gap between the Bank of Japan and peer central banks remain. The BOJ stood by its ultra-low interest rate policy last month.”

https://www.bloomberg.com/news/articles/2022-11-02/sharp-yen-swing-has-traders-on-watch-for-post-fed-japan-reaction


Korea Credit Crisis Spreads as Bond Uncalled in First Since 2009.

“A South Korean insurer took the unusual step of delaying buying back perpetual bonds, in the first such case for the nation’s issuers since 2009 that adds to signs of a crisis in the local credit market… Korea has been scrambling to prevent a credit market meltdown from sparking broader contagion…”

https://www.bloomberg.com/news/articles/2022-11-02/korea-credit-crisis-spreads-as-bond-uncalled-in-first-since-2009


China Tells Officials to ‘Resolutely Adhere’ to Covid Zero.

“China’s top health body said the nation’s zero-tolerance approach remains the overall strategy to fighting Covid-19 after unverified social media posts buoyed hopes the policy would be eased… lockdowns, mass testing and centralized quarantine in China show no sign of slowing. Zhengzhou’s Airport Economy Zone, the district where the world’s largest iPhone factory is located, was shut down yesterday for seven days.

https://www.bloomberg.com/news/articles/2022-11-02/china-tells-officials-to-resolutely-adhere-to-covid-zero


Bolivian President warns of unrest as right-wing demands early census.

“”The Bolivian President Luis Arce warned on Tuesday that far-right conservative politicians who seek to repeat a coup d’état are fomenting violence in Santa Cruz’s civic strike. “Today, Bolivia is once again threatened by those who, unable to contribute to democracy, bet on confrontation and violence,” he denounced.”

https://english.almayadeen.net/news/politics/bolivian-president-warns-of-unrest-as-right-wing-demands-ear


Brazil Protests Hamper Shipments of Food, Fuel, Fertilizer…

“Truck drivers have led protests by backers of incumbent president Jair Bolsonaro following his defeat in Sunday’s election to Luiz Inacio Lula da Silva. Protests that have spread across the country are a consequence of dissatisfaction with the election, Bolsonaro said in his first speech after the ballot outcome.”

https://www.bloomberg.com/news/articles/2022-11-01/brazil-protests-hamper-shipments-of-food-fuel-and-fertilizer


IMF Cash for Chad on Hold as Creditors Refuse Debt Relief.

“The International Monetary Fund can’t disburse more money to Chad under an agreed $570.8 million bailout unless reluctant creditors agree to revamp part of the nation’s debt, the deputy head of its Africa Department said.”

https://www.bloomberg.com/news/articles/2022-11-01/imf-cash-for-chad-on-hold-as-creditors-refuse-debt-relief


Mining giant Glencore flew cash bribes to Africa via private jet, UK court hears…

“The court heard detailed descriptions of how Glencore and its agents repeatedly sought to corrupt public officials. On one occasion, an agent told Glencore to hurry cash payments because he had “staff to make happy before Christmas” – a reference to a bribe in Nigeria.”

https://www.theguardian.com/business/2022/nov/02/mining-giant-glencore-flew-cash-bribes-to-africa-via-private-jet-uk-court-hears


Iran’s Currency Hits New Low Against the Dollar Amid Unrest.

“Iran’s currency dropped to its lowest value against the dollar on Tuesday, after weeks of nationwide unrest roiling the country. A stalemate in negotiations to revive Tehran’s nuclear deal with world powers has also weighed heavily on the rial.”

https://www.arabnews.com/node/2192126/middle-east


Hundreds march in crisis-hit Sri Lanka protesting tax hikes, crackdowns.

“Hundreds of people marched in Sri Lanka’s largest city Colombo on Wednesday protesting against higher taxes, inflation and alleged state-led repression as the country struggles to emerge from its worst financial crisis in seven decades.”

https://news.yahoo.com/hundreds-march-crisis-hit-sri-133646212.html


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 an enormous help as the cost-of-living crisis ratchets up here in the UK.

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

‘Sharp’ global labour market slowdown underway: UN… The war raging in Ukraine and other overlapping crises are taking a toll on labour markets worldwide, the UN said Monday, suggesting a “sharp” slowdown was already underway.

“In a fresh report, the International Labour Organization cautioned that the outlook for global labour markets has deteriorated in recent months…

“Amid deepening energy and food security crises, swelling inflation, tightening monetary policy and fears of a looming global recession, it said both employment creation and the quality of jobs were declining.

“While it normally takes time for an economic slowdown or a recession to result in job destruction and unemployment, available data suggests that a sharp labour market slowdown is already underway,” the report said.”

https://uk.finance.yahoo.com/news/sharp-global-labour-market-slowdown-110343827.html


The world is teetering on the verge of a full-blown energy crisis as crude oil prices threaten to cross $100 a barrel, once again, coal prices surge to record highs, and natural gas cost rises to an unprecedented level that is equivalent to $250 a barrel for oil.

The World Energy Outlook 2022, released by the International Energy Agency last week, paints a very bleak scenario.”

https://www.telegraphindia.com/opinion/energy-shock-editorial-on-the-looming-energy-crisis/cid/1895417


Think the Energy Crisis Is Bad? Wait Until Next Winter…

“It is winter 2023-2024 that is going to be the real crisis. Any current energy planning that fails to account for next year and beyond is jumping out of the frying pan and into the fire—where this winter is a problem, 2023’s may be a catastrophe.”

https://time.com/6226587/energy-crisis-next-winter/


Oil CEOs warn this winter’s energy crisis will be nothing compared to the next.

“Eni chief Claudio Descalzi explained, “the issue is not this winter. It will be the next one, because we are not going to have Russian gas – 98% [less] next year, maybe nothing.” Protests have already begun This could lead to serious social unrest — already, small to medium-sized protests have cropped up around Europe.”

https://www.cnbc.com/2022/11/01/energy-crisis-next-winter-will-be-more-challenging-oil-ceos-warn.html


The [US] diesel market is in a perfect storm as prices surge, supply dwindles ahead of winter…

“A perfect storm is taking place in the diesel market, with dwindling diesel reserves, a drought on the Mississippi River pushing more product to rail and truck, and a possible rail strike leading to a surge in prices that is expected to continue. Diesel prices have increased by 33% for November deliveries.

https://www.cnbc.com/2022/10/30/diesel-market-in-perfect-storm-as-prices-surge-and-supplies-dwindle.html


Biden accuses oil companies of ‘war profiteering’ and threatens windfall tax…

“In remarks on Monday, just over a week away from the 8 November midterm elections, Biden criticised major oil companies for making record profits while refusing to help lower prices at the pump for American people. The president said he would look to Congress to levy tax penalties on oil companies…”

https://www.theguardian.com/us-news/2022/nov/01/biden-oil-companies-war-profiteering-windfall-tax-ukraine


The Fed may have to blow up the economy to get inflation under control.

“...this is uncharted territory for the Fed. Former central bank chairs Alan Greenspan, Ben Bernanke and current Treasury Secretary Janet Yellen never had to raise rates this many times in a row by such large amounts. It’s unclear what all this tightening will do to the economy.”

https://edition.cnn.com/2022/10/30/investing/stocks-week-ahead/index.html


‘Perfect storm’ swirls as Canadians face hot inflation, rising rates.

“Canadian consumers and small businesses are being squeezed from both sides, prompting politicians, unions and even some economists to implore the central bank to slow its pace of tightening. The bank this week signaled its tightening campaign was nearing its peak, but made clear it was not done yet…”

https://www.reuters.com/world/americas/perfect-storm-swirls-canadians-face-hot-inflation-rising-rates-2022-10-30/


Rishi Sunak is preparing years of tax rises for Britain in an effort to make up for a £50bn fiscal hole left by Liz Truss’s disastrous tenure in Downing Street, according to a Treasury insider.

“After a meeting between the prime minister and Jeremy Hunt on Monday to plan the upcoming autumn statement, a Treasury source said things were going to get “rough”.

https://www.theguardian.com/politics/2022/oct/31/rishi-sunak-preparing-years-of-tax-rises-to-plug-50bn-fiscal-black-hole


As the dust settles on one crisis, fears are growing that the UK pensions industry is in danger of unwittingly lurching into another.

“Economic Armageddon was on the horizon just weeks ago… Liability-driven investments (LDIs) have been widely blamed for the crisis. Experts now fear that their “demonisation” could have disastrous consequences… Trading out of LDIs risks stranding hundreds of UK final salary pension schemes that are in deficit, they say.”

https://www.telegraph.co.uk/business/2022/10/30/next-crisis-looming-britains-pensions-industry/


More than a third of UK hospitality firms ‘could go bust by next year’…

“With nearly all businesses saying they face higher energy costs and food price inflation, 35% of respondents to a quarterly hospitality industry survey said they expected to be operating at a loss or to be unable to continue trading by the end of the year.”

https://www.theguardian.com/business/2022/oct/31/uk-hospitality-firms-pubs-restaurants-hotels-energy-food-inflation


The latest inflation data out of Europe isn’t pretty.

Consumer prices in the eurozone rose by a record 10.7% in October, up from 9.9% last month, according to the EU’s statistics agency, Eurostat.

The figures surprised economists at Bank of America, who had expected inflation to cool slightly to 9.8%.”

https://finance.yahoo.com/news/europe-energy-crisis-just-getting-170609780.html


Europe’s Firms Seek Most Emergency Funds Since Pandemic Peak…

“Firms grappling with high inflation and soaring operating costs are seeking fresh short-term liquidity lines in an echo of the worst days of the 2020 coronavirus pandemic… The increase in emergency funding is a worrying sign as central banks fight to tame surging inflation.”

https://www.bloomberg.com/news/articles/2022-10-31/europe-s-firms-seek-out-most-emergency-funds-since-pandemic-peak


Bank Outlook 2023: Running out of energy.

European bank fundamentals are being pressured by the ongoing energy crisis. Risks from direct exposure to the energy sector are heading higher. Additionally, energy-intensive sectors stand to suffer from higher energy prices.”

https://think.ing.com/articles/bank-outlook-2023-running-out-of-energy/


German industrial workers fire warning shot with strikes over pay.

“Thousands of German industrial workers walked out for several hours over the weekend in an escalating pay dispute as leaders of Germany’s powerful IG Metall union warned of more strikes to come if employers failed to improve their offer.”

https://www.ft.com/content/7f05466b-209c-4f30-8b47-12a0955923f1


Hungary loses buildings, services amid fuel crisis.

“People in Hungary are grappling with the closure of many public buildings and services… dozens of Hungarian cities have not been able to afford the high cost of heating facilities, such as libraries, museums, pools, spas, theaters, and sports venues, after government subsidies ended.”

https://www.chinadaily.com.cn/a/202211/01/WS6360764da310fd2b29e7f9b4.html


The Italian wine sector has warned of glass shortages this autumn, which could amount to between 150,000 and 200,000 tonnes…

“Among the factors that are at root of the problem are high energy prices, supply chain delays, rising raw material prices, and the logistics crisis, according to Federvini. For example, soda ash, essential in glass production, was imported from the Donbass, a region at the centre of the war between Russia and Ukraine.”

https://www.esmmagazine.com/packaging-design/italian-wine-sector-warns-of-glass-shortages-223665


Japan cannot survive without Russian oil, warns trading house chief…

“Japan’s near total dependence on imported energy means it cannot “survive” without continuing to buy oil and gas from Russia, said the head of one of the country’s big five trading houses… “Unlike Europe or the US, Japan depends on overseas for almost all of its energy needs so it’s not possible to cut off ties with Russia because of the sanctions,” Okafuji said…”

https://www.ft.com/content/fd2c7271-60a5-49f2-8168-cf24a923e936


Bank of Japan’s inevitable pivot looms as a risk for markets…

“The longer Japan sticks with Yield Curve Control in the current global context, the more the authorities will have to spend to resist a depreciation, and the greater the structural damage to the core of the country’s financial system. No wonder most observers expect Japan to have to exit this policy…”

https://www.ft.com/content/7dc54c2c-898e-4c96-b312-dad57e250a61


Asia’s factories slumped in October as global demand for merchandise goods made in the region continues to weaken.

The slowdown in Asia adds to growing evidence that a pronounced deceleration in world trade is underway as soaring inflation and interest rates crimp consumer spending in the US and Europe.

https://www.bloomberg.com/news/articles/2022-11-01/asia-factories-slump-as-global-goods-demand-continues-to-fade


China’s factory, construction, service activity slump in fresh sign of economic weakness.

“China’s official gauges measuring factory, construction and service activities all tumbled into contraction territory in October, signaling fresh signs of weakness in the world’s second-largest economy.”

https://www.marketwatch.com/story/china-s-factory-construction-service-activity-slump-in-fresh-sign-of-economic-weakness-271667180519


Zinc Plunges as Factory Data Fuels Concerns Over Steel Demand.

“Zinc led a decline in industrial metals after a slump in China’s economic activity added to signs of weakening demand in the world’s No. 2 economy, while a rebound in the dollar made commodities priced in the currency more expensive.”

https://www.bloomberg.com/news/articles/2022-10-31/copper-extends-losses-on-factory-slump-in-china-dollar-s-gain


China’s property slump continues as October prices fall.

“China’s property sector, once a pillar of growth, has slowed sharply in the past year as a result of a government clampdown on excessive borrowing by developers, and a COVID-19-induced economic slump. Prices in 100 cities dropped for the fourth straight month in October…”

https://www.aljazeera.com/economy/2022/11/1/chinas-property-slump-continues-in-october-as-prices-fall


China Builder CIFI’s Shares Plunge After Debt-Payment Suspension.

“CIFI Holdings Group Co. shares plunged to fresh record lows after saying it will suspend offshore financing payments and explore a holistic debt solution after being largely unable to raise new funds overseas this year… Last month’s missed payment was particularly worrying because CIFI was considered a barometer for the broader success of a new rescue effort by Beijing to use state guarantees to help a select group of builders access domestic funding.”

https://www.bloomberg.com/news/articles/2022-11-01/china-builder-cifi-suspends-debt-payments-as-sector-woes-deepen


Chinese Developer Greenland Says It’s Likely to Default on Bond…

“The Shanghai-based developer, which is partially owned by local government entities and had long been considered among the nation’s most resilient, said in a filing that the issuer and guarantor wouldn’t be able to repay the $362 million outstanding on the note, which matures Nov. 13.”

https://www.bloomberg.com/news/articles/2022-10-31/chinese-developer-greenland-says-it-s-likely-to-default-on-bond


Hong Kong’s Q3 GDP shrinks 4.5% y/y for third straight quarter of contraction…

“The outcome was worse than a range of 0.6% to 0.9% growth projected by HSBC, Morgan Stanley and Natixis, and a 0.3% contraction forecast by Barclays. The city’s economy shrank by 4.0% and 1.3% respectively in the first and second quarter.”

https://www.nasdaq.com/articles/hong-kongs-q3-gdp-shrinks-4.5-y-y-for-third-straight-quarter-of-contraction


Emerging Stocks Are Flashing a 2008 Financial Crisis Signal.

“The price-earnings ratio of the benchmark MSCI Emerging Markets Index, based on trailing 12-month profits, has fallen below its price-earnings ratio based on estimated earnings for the next 12 months, showing that analysts expect earnings to fall faster in the future than currently.”

https://news.yahoo.com/emerging-stocks-flashing-2008-financial-160000267.html


Rampant Food and Fuel Inflation Spells Disaster for Emerging Economies…

“”The combination of elevated commodity prices and persistent currency depreciations translates into higher inflation in many countries,” the World Bank notes, warning that policymakers in emerging markets and developing economies “have limited room to manage the most pronounced global inflation cycle in decades”.”

https://oilprice.com/Energy/Energy-General/Rampant-Food-And-Fuel-Inflation-Spells-Disaster-For-Emerging-Economies.html


‘Ray of hope’ shatters as Ukraine grain deal collapses…

“Wheat and corn futures jumped today after Russia’s withdrawal from a UN-backed deal that allowed millions of tonnes of grain to be shipped through Black Sea ports, delivering a potentially “catastrophic” blow to food supplies for poorer countries.

https://www.ft.com/content/5037a123-5895-4cee-83e0-731caf2de204


With nothing to sell, Vietnam gas stations start to close…

“Since early October, several hundred gas stations in Ho Chi Minh City, the country’s biggest metropolis, and in surrounding cities in southern Vietnam have had to occasionally suspend operations, saying they have nothing to sell.”

https://asia.nikkei.com/Spotlight/Supply-Chain/With-nothing-to-sell-Vietnam-gas-stations-start-to-close


Protesters in Peru target Hochschild’s largest mine.

“Peruvian demonstrators on Monday burned infrastructure at Hochschild Mining Plc’s Inmaculada mine as part of a protest, the company said, threatening the operations of its largest mine in the Andean nation. UK-listed Hochschild is an important precious metals miner and Inmaculada produces both gold and silver.”

https://www.reuters.com/world/americas/protesters-peru-target-hochschilds-largest-mine-2022-10-31/


Brazil Protests Grow With Bolsonaro Silent After Election Loss.

“Protests by backers of Jair Bolsonaro intensified as the Brazilian president remained silent over his loss in Sunday’s election, refusing to concede defeat to his old foe Luiz Inacio Lula da Silva. Supporters of the firebrand president, unhappy with the election’s results, blocked roads around the country and restricted access to Sao Paulo international airport…”

https://www.bloomberg.com/news/articles/2022-11-01/brazil-protests-grow-with-bolsonaro-silent-after-election-loss


Ghana experiences a week of turmoil and panic as it continues to address its economic gash.

“Ghana, for months now has made news rounds over its deteriorating economy. With so much downturn and very little resurgence, the country’s current administration has been forced to quell the growing anxiety amongst its citizens… the Ghanaian Cedi is now the worst-performing currency in the world, losing around 42% against the dollar.”

https://africa.businessinsider.com/local/markets/ghana-experiences-a-week-of-turmoil-and-panic-as-it-continues-to-address-its-economic/rslye6x


Nelson Mandela Bay on the brink of collapse.

“The Nelson Mandela Bay municipality is in dire financial straits and could struggle to pay staff salaries in a few months’ time. This is due to the collection rate dropping to a shockingly low 69%, and millions of rand in lost revenue due to sky-high water and electricity losses.”

https://www.heraldlive.co.za/news/2022-11-01-nelson-mandela-bay-on-the-brink-of-collapse/


East Africa’s economic recovery falters on debt, fiscal deficits.

“The increasing risk of debt distress, widening fiscal and current deficits and limited economic diversification plans in the economies of East Africa, have combined to weaken prospects for growth this year… countries are yet to achieve their pre-Covid growth levels…”

https://www.theeastafrican.co.ke/tea/news/east-africa/east-africa-s-economic-recovery-falters-on-debt-4001950


Aoun’s presidency ends leaving power vacuum in crisis-hit Lebanon.

“Parliament has so far been unable to agree on a successor in the role, which is reserved for a Maronite Christian [Really?! Come on, Lebanon – why not throw the field open a bit!]… That leaves Lebanon in the unprecedented situation of having a presidential vacuum and a caretaker cabinet with limited powers, as the premier-designate has been unable to form a government for six months.”

https://www.reuters.com/world/middle-east/president-aoun-leaves-office-lebanons-crisis-worsens-2022-10-30/


Unseasonal Rains Affecting Crops [India], Will Impact Food Inflation: Report…

“”In states like Uttar Pradesh, the unseasonal rain was more than 400 per cent above the normal. Overall, India has received a staggering 54 per cent above normal rains in October so far,” said SBI Research. It believes that along with grains, the prices of vegetables, milk, pulses and edible oils… are rising and likely to remain high in coming months.”

https://www.ndtv.com/business/unseasonal-rains-affecting-crops-will-impact-food-inflation-report-3475601


A global helium shortage has doctors worried about one of the natural gas’s most essential, and perhaps unexpected, uses: MRIs…

“Helium has become a big concern,” said Mahadevappa Mahesh, professor of radiology at the Johns Hopkins School of Medicine Baltimore. “Especially now with the geopolitical situation.” …The problem is that no other element is cold enough for the MRI. “There’s no alternative,” Craft, of Premier Inc., said. “Without helium, MRIs would have to shut down.””

https://www.nbcnews.com/health/health-news/helium-shortage-doctors-are-worried-running-element-threaten-mris-rcna52978


Twitter deal may signal point when the ‘everything bubble’ bursts…

There is a fear the global economy is approaching breaking point. China’s property meltdown, the emergency Bank of England action to prevent a run on pension funds and the collapse of tech stocks are all part of the same story: a fragile global financial ecosystem coming under stress.

https://www.theguardian.com/business/2022/oct/30/twitter-deal-may-signal-turning-point-when-the-everything-bubble-bursts


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 an enormous help as the cost-of-living crisis ratchets up here in the UK.

29th October 2022 Today’s Round-Up of Economic News

Western economies rediscover meaning of scarcity…

“The world faces an enormous demographic challenge as China’s working-age population, along with those in the developed nations, starts to shrink. A lack of investment in traditional energy suggests that oil and gas prices will probably remain elevated in the coming years.

“The transition to alternative energy and electric vehicles is likewise constrained by inadequate investment and limited supplies of essential raw materials, such as lithium, nickel and cobalt.

The last time Europe faced such severe constraints was after World War Two. “Austerity Britain” maintained rationing and capital controls. Interest rates rose from their artificially low wartime levels. To reduce the burden of their war debts… In Europe, large swathes of industry came under state control. In Japan, industrial quotas restricted firms’ access to steel, chemicals and energy.

“In the wake of Russia’s invasion of Ukraine, energy rationing has returned to Europe. European countries are nationalising energy suppliers including France’s electricity giant EDF. Financial repression has returned.

“Britain under a new Conservative administration faces austerity that could be more severe than that imposed after the global financial crisis. Rishi Sunak, the new prime minister, warns of “difficult decisions” ahead. Taxes are set to rise as governments bring spending under control. We are all about to discover the true meaning of economy.”

https://www.reuters.com/breakingviews/western-economies-rediscover-meaning-scarcity-2022-10-27/


Grain Giant Warns Globalization Is Over…

““I think globalization is done for a period of time,” Bunge CEO Greg Heckman said in a call yesterday. “When we had a supply problem or a demand surge globally, every origin port and every destination was available to solve that problem in the past. That’s no longer true.”” [Actually, it is done permanently. The unknitting of the global economy is now irreversible.]

https://gcaptain.com/grain-giant-warns-globalization-is-over/


Top central bankers fear breaking economy if they raise rates too fast.

“The world’s top central bankers are beginning to fear that an already weak global economy will stall if they keep pressing on the brakes, unnerved by plunging commodity prices, turmoil in emerging markets and potential flashpoints at home.”

https://www.reuters.com/markets/europe/top-central-bankers-fear-breaking-economy-if-they-raise-rates-too-fast-2022-10-28/


Central Banks Just Can’t Win. Damned if they hike, damned if they don’t [I’m liking Jerome Powell’s “Dude, I can’t even…” expression here].

“That’s how central bankers might feel as political heat on them intensifies. After being attacked for letting inflation take hold, they are now scolded for jeopardizing growth and jobs with their aggressive interest-rate hikes to get prices back under control.”

https://www.bloomberg.com/news/newsletters/2022-10-28/what-s-happening-in-the-world-economy-central-bankers-just-can-t-win


A dead cat bounce 250 years in the making…

1788 was an interesting year. France itched for revolution, King George III was adrift, and New York marked becoming the eleventh US state by hosting America’s first recorded riot, which was over grave-robbing in Manhattan for medical cadavers.

It was also the last time 10-year US Treasuries did as badly as they’re doing now. Chart via Bank of America:”

https://www.ft.com/content/f244efd0-fc43-4b57-bc87-7ee343da70d6


Growing Pile of Distressed Debt Signals Coming US Default Wave…

“Companies that binged on low-cost borrowing in recent years are facing the prospect of refinancing at exorbitant yields — if they can find any investors — as the Federal Reserve raises rates to battle persistent inflation, threatening to push the economy into recession.”

https://www.bloomberg.com/news/articles/2022-10-28/growing-pile-of-distressed-debt-signals-coming-us-default-wave


Pharmacies across the US are reporting shortages of the widely used antibiotic amoxicillin…

“Three key amoxicillin manufacturers — Hikma Pharmaceuticals, headquartered in the United Kingdom; Sandoz, based in Switzerland; and Teva Pharmaceutical Industries Ltd., headquartered in Israel — are reporting shortages of the antibiotic…”

https://www.nbcnews.com/science/science-news/pharmacies-are-reporting-shortages-widely-used-antibiotic-amoxicillin-rcna53476


U.S. diesel supplies are becoming critically low with shortages and price spikes likely to occur in the next six months unless and until the economy and fuel consumption slow.

“Stocks of diesel and other distillate fuel oils were just 106 million barrels on Oct. 21, the lowest for the time of year since the U.S. Energy Information Administration (EIA) started collecting weekly data in 1982.”

https://www.reuters.com/business/energy/us-diesel-shortage-increasingly-likely-until-economy-slows-kemp-2022-10-27/


New England’s largest utility is imploring President Joe Biden to start preparing emergency measures to prevent a potential wintertime natural gas shortage.

“The Federal Energy Regulatory Commission has “acknowledged for many months that New England will not have sufficient natural gas to meet power supply needs for the region in the event of a severe cold spell this winter,” Joseph Nolan, chief executive officer of Springfield, Massachusetts-based Eversource Energy, wrote in a letter to Biden.”

https://www.bloomberg.com/news/articles/2022-10-28/utility-urges-biden-to-declare-emergency-to-avoid-fuel-shortage


UK Bond Market Sheds £1.3 Trillion In Value Amid Record Sell-Off.

““The unprecedented meltdown in bonds is not just causing issues for pension funds with exposure to Liability Driven Investment Strategies. The fall is also wrecking the returns for any investor with a large exposure to UK bonds,” explained Colin Leggett, Investment Director at Collidr.”

https://oilprice.com/Latest-Energy-News/World-News/UK-Bond-Market-Sheds-13-Trillion-In-Value-Amid-Record-Sell-Off.html


Bank of England clashes with Sunak over plan to overrule regulators.

“The Bank of England and City watchdog have launched a coordinated attack on Rishi Sunak’s plan for a call-in power which would allow the Government to overrule their decisions, in a sign of growing tensions between regulators and Downing Street.”

https://www.telegraph.co.uk/business/2022/10/27/bank-england-clashes-sunak-plan-overrule-regulators/


British Gas is drawing up plans to pay customers to cut their electricity use by 30pc at teatime to avoid blackouts this winter.

“Britain’s largest household supplier confirmed it is keen to take part in National Grid’s new scheme to shore up electricity supplies amid concerns about energy shortages during the colder months.”

https://www.telegraph.co.uk/business/2022/10/28/british-gas-pay-households-cut-teatime-electricity-use-30pc/


Darkest Days of Winter Have Finland Bracing for Blackouts. Authorities have warned Nordic country may see rolling outages…

“If the planned outages don’t take place, said Arto Pahkin, a network operations manager at Fingrid Oyj, which oversees the country’s electricity grid, there would a national large-scale disruption and “people could die.” …Finland is at the sharp end of Europe’s energy crisis.”

https://www.bloomberg.com/news/articles/2022-10-29/darkest-days-of-winter-have-finland-bracing-for-blackouts


Gas crisis forces Germany to flatten wind farm for coal mine.

“The eight wind turbines will be dismantled with a dozen nearby villages and hamlets to clear space for a pit that will ultimately cover an area about the size of Swindon 25 miles to the northwest of Cologne. The Garzweiler II mine is expected to yield about 190 million tonnes of lignite, a relatively dirty fuel also known as brown coal…”

https://www.thetimes.co.uk/article/gas-crisis-forces-germany-to-flatten-wind-farm-for-coal-mine-wtnht87fj


Czechs Protest Over Cost-of-Living Crisis with Ukraine in Focus.

“More than 10,000 people filled the Czech capital’s central Wenceslas Square on Friday, with demonstrators calling for the government to resign as consumers face sharply rising prices. The latest such rally to be held in Prague is intensifying pressure on Prime Minister Petr Fiala to address public concerns over soaring energy costs.”

https://www.bloomberg.com/news/articles/2022-10-28/czechs-protest-over-cost-of-living-crisis-with-ukraine-in-focus


Greek consumers should cut use of energy-hungry appliances during peak hours to help save at least 5% of energy over the winter, its energy minister said on Thursday.

“The comments come after EU countries agreed to a mandatory target to cut electricity consumption from December to March so as to tame surging energy prices…”

https://www.reuters.com/business/energy/greece-urges-cuts-peak-hour-use-energy-intensive-appliances-2022-10-27/


Italian inflation breaks the 11% threshold, driven by energy.

“The energy component was the driver of the surprisingly strong leap in headline inflation. Possible government interventions could increase volatility in inflation numbers over the rest of the year.”

https://think.ing.com/articles/italian-inflation-breaks-the-11-threshold-driven-by-energy/


Parts of Europe Are Starting to Run Out of Diesel.

“The loss of Russian diesel supply, combined with disruption in fuel production in France, have left parts of Europe short, according to the head of Spanish oil refiner Repsol SA. “We are running out of middle distillates in some European countries,” Chief Executive Officer Josu Jon Imaz said…”

https://www.bloomberg.com/news/articles/2022-10-27/spanish-refiner-says-parts-of-europe-are-running-out-of-diesel


Energy crisis risks upending Europe’s essential medicine supply chains.

“Surging energy costs in Europe risk accelerating an exodus of companies critical in the manufacture of essential medicines, further endangering drug supply chains hit by shortages at the height of COVID-19, generic drugmaker Teva (TEVA.TA) warned on Thursday.”

https://www.reuters.com/markets/europe/energy-crisis-risks-upending-europes-essential-medicine-supply-chains-report-2022-10-27/


Sliding yen: What is happening to the Japanese currency?

“This year alone it has lost more than a fifth of its value against the US dollar… The yen’s slide has been driven by the difference between interest rates in Japan and the US. However, some experts believe the weak yen reflects the state of the country’s finances. The economy has hardly grown in the last three decades. It is also the world’s most indebted nation.”

https://www.bbc.co.uk/news/business-63335371


South Korea’s Legoland default points to wider bond market stress…

“The missed debt payment by the Gangwon Jungdo Development has raised questions about loans related to hundreds of thousands of other projects in Asia’s fourth-largest economy and even drawn alarming parallels with China’s property debt crisis… It also shocked some investors as the case showed even state-backed developers at risk of defaults…”

https://www.reuters.com/markets/asia/korean-theme-park-developers-bond-default-points-wider-stress-2022-10-28/


Crisis Trauma Haunts Korea as It Confronts a Credit Meltdown.

“… in Korea there’s added urgency for policymakers to respond quickly because memories remain fresh of a series of financial crises that hit the country in recent decades, which caused heavy economic damage and sparked political turmoil.”

https://www.bloomberg.com/news/articles/2022-10-29/crisis-trauma-haunts-korea-as-it-confronts-a-credit-meltdown


China Covid: Videos emerge of rare protests in Tibet.

“Footage has emerged showing what appear to be rare large-scale protests against strict Covid-19 measures in the Tibetan regional capital, Lhasa. Multiple videos on social media show hundreds demonstrating and clashing with police. They are said to be mostly ethnic Han Chinese migrant workers. The city has been under lockdown for nearly three months…”

https://www.bbc.co.uk/news/world-asia-china-63410339


Thousands march in Sri Lanka against government crackdown on cost-of-living protests.

“The rally in Colombo condemned the government’s attempts to intimidate protesters through military surveillance, arbitrary arrests and direct attacks by authorities. Sri Lankans have been protesting for months over the economic crisis that has led to severe shortages in many essential imported items such as medicines, fuel and cooking gas.”

https://morningstaronline.co.uk/article/w/thousands-march-sri-lanka-against-government-crackdown-cost-living-protests


Food is on the ballot for millions of poor Brazilians ahead of presidential run-off vote.

“”It’s not every day that you’re able to buy bread. Some days you have it, some you don’t,” Aninha, 36, explains. “I don’t always have formula. Some days I can’t buy meat so we have to eat beans or rice.” She opens her fridge, revealing some bottled water and little else.”

https://www.kake.com/story/47578077/food-is-on-the-ballot-for-millions-of-poor-brazilians-ahead-of-presidential-run-off-vote


Fuel shortage hits Cuba again amid economic crisis…

“Cuba is facing its second fuel shortage in seven months, authorities have said, as long lines snaked around many Havana filling stations. Thursday’s queues came a day after state-run Cuba-Petroleum Union (Cupet) announced “a deficit in the availability of fuel” and delivery “difficulties.””

https://www.trtworld.com/americas/fuel-shortage-hits-cuba-again-amid-economic-crisis-62033


More protests in Palo Seco [Trinidad]…

“Palo Seco residents held a second day of fiery demonstrations yesterday, blocking the SS Erin Main Road with burning debris and tyres, in protest of rising unemployment, crime, and the cost of living in the area. Yesterday morning, traffic was brought to a halt in and out of the constituency, with fires being lit by protesters who said they were desperate for assistance.”

https://trinidadexpress.com/news/local/more-protests-in-palo-seco/article_15019c92-5599-11ed-8e3e-e39b21372f7a.html


Cholera overwhelms Haiti as cases, deaths spike amid crisis…

“Across Haiti, many patients are dying because say they’re unable to reach a hospital in time, health officials say. A spike in gang violence has made it unsafe for people to leave their communities and a lack of fuel has shut down public transportation, gas stations and other key businesses including water supply companies.”

https://www.independent.co.uk/news/ap-haiti-cholera-portauprince-families-b2213271.html


Cholera thrives in a warming world.

“Cholera outbreaks are widespread and more deadly these days — popping up in places that haven’t seen them in years. According to the World Health Organization, 29 countries have already reported cholera this year. Syria, Malawi, and Haiti are currently wrestling with especially large outbreaks… Climate change is largely to blame for the uptick, experts said, as waters warm and violent weather is more frequent.

https://www.devex.com/news/cholera-thrives-in-a-warming-world-104161


Climate crisis study finds heatwaves have cost global economy $16tn…

“We have been underestimating the true economic costs we’ve suffered because of global warming so far, and we are likely underestimating the costs going out into the future,” said Justin Mankin, an assistant professor of geography at Dartmouth College and senior author of the study published in the journal Science Advances.”

https://www.theguardian.com/environment/2022/oct/28/climate-crisis-heatwaves-cost-global-economy


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 an enormous help as the cost-of-living crisis ratchets up here in the UK.

27th October 2022 Today’s Round-Up of Economic News

Global economy approaching a recession, central banks unchained: Reuters poll…

“The global economy is approaching a recession as economists polled by Reuters once again cut growth forecasts for key economies while central banks keep raising interest rates to bring down persistently-high inflation…

“Michael Every, global strategist at Rabobank, said “risk of a global recession” is what everyone’s talking about and has become mainstream in forecasts. “I think that’s pretty much a no-brainer when you look at the trend in all the key economies.”

“In the meantime global equity and bond markets are in disarray while the U.S. dollar is at a multi-decade peak in foreign exchange markets based on U.S. rate expectations.”

https://www.reuters.com/markets/asia/poll-global-economy-approaching-recession-central-banks-unchained-2022-10-26/


IMF chief wants central banks to keep raising rates to hit ‘neutral’ level.

“International Monetary Fund chief Kristalina Georgieva said on Wednesday that central banks should keep raising interest rates further to fight inflation until they hit a “neutral” level, though in most cases they have not reached this point.”

https://www.reuters.com/markets/europe/imf-chief-wants-central-banks-keep-raising-rates-hit-neutral-level-2022-10-26/


Recession or a coming financial crisis? Economists say the difference is vast…

Interest rates are creeping higher, and the word “recession” is on everyone’s lips. But so far, only a few financial commentators are warning of something much worse that could abruptly change the rules of the game: The threat of a financial crisis.

https://www.cbc.ca/news/business/financial-crisis-column-don-pittis-1.6627032


Amundi warns on hidden leverage in the financial system.

Europe’s largest asset manager has warned that the tremors in the UK pensions market should be a “wake-up call” to investors and regulators about the dangers of hidden leverage in the financial system.

https://www.ft.com/content/4dfd546b-bff6-4dfa-a858-06b855001faa


Hedge Funds Are Slashing Leverage to Weather Market Slump.

“Hedge funds have cut portfolio leverage this year in a conservative turn that has sucked borrowed money from global markets, adding selling pressure to stocks and bonds… The decline in leverage also reflects belt-tightening among investment banks as interest rates rise and the outlook for the global economy dims.”

https://finance.yahoo.com/news/hedge-fund-managers-worry-another-000000567.html


U.S. mortgage interest rates jump to 7.16%, highest since 2001.

“The average interest rate on the most popular U.S. home loan rose to its highest level since 2001 as tightening financial conditions weigh on the housing sector, data from the Mortgage Bankers Association (MBA) showed on Wednesday.”

https://www.reuters.com/markets/us/us-mortgage-interest-rates-jump-716-highest-since-2001-2022-10-26/


Subprime loan delinquency rates are higher than the 2008 recession levels today, with unemployment still near all-time lows and the layoff cycle just beginning.

But the Fed won’t rescue the housing market. Risk markets are likely to rally on news of slower monetary tightening, but historically, market bottoms do not come until 70% through recessions…”

https://seekingalpha.com/article/4548810-biblical-mean-reversion


Deranged diners, inflation and staff shortages: American restaurants are struggling.

“Cohen, as an owner, is feeling the impact of inflation first-hand across the board: ingredients are more expensive, labor is more expensive, equipment is more expensive, and as a result, dinner out is more expensive.”

https://www.theguardian.com/food/2022/oct/26/post-pandemic-restaurant-industry-inflation


The US exported a record amount of crude and fuel last week, even as the East Coast grapples with shortages of both diesel and gasoline.

“Total petroleum shipments reached 11.4 million barrels a day, according to the Energy Information Administration… The imbalance highlights the difficulty in moving fuel from the Gulf Coast refining hub to consumer centers on the East Coast.”

https://www.bloomberg.com/news/articles/2022-10-26/the-us-is-exporting-record-oil-and-fuel-even-as-east-coast-faces-shortages


UK Real Wages Fell at Sharpest Pace Since 2010 Financial Crisis.

“Inflation, which is lingering at its highest level in 40 years, is eating away at a 5% increase in the headline level of wages. That’s adding to pressure on the central bank to rein in price increases and on the government to help those families that are struggling.”

https://www.bloomberg.com/news/articles/2022-10-26/uk-real-wages-fell-at-sharpest-pace-since-2010-financial-crisis


The UK’s net bond sales are set to be the highest in history for the coming fiscal year, according to the nation’s debt chief.

“The view from Robert Stheeman is in line with forecasts by bank strategists, who worry the jump in supply could renew the pressure on gilts seen in recent weeks.”

https://www.bloomberg.com/news/articles/2022-10-26/uk-faces-record-net-bond-sales-warns-nation-s-debt-chief


Europe Risks Diesel Supply Shock as Russia Oil Sanctions Near…

“Getting rid of Russian supply won’t be easy. France, one of Europe’s biggest importers, recently had its own diesel production slashed by strikes at its oil refineries, forcing it to source more. Domestic output in Germany, where the continent’s diesel demand is strongest, is also at risk because the Schwedt refinery is set to lose access to crude oil via the Druzhba pipeline.”

https://www.bloomberg.com/news/articles/2022-10-26/europe-risks-diesel-supply-shock-as-russia-oil-sanctions-near


Europeans close shop as economic downturn looms…

“Company failures, especially SMEs, have been increasing steadily over 2022 and are due to continue into 2023 across the EU “due to a weaker economic outlook with high inflation and energy prices and monetary tightening and the expiry of government support,” according to Atradius Collections, a debt collector.”

https://www.euractiv.com/section/all/short_news/europeans-close-shop-as-economic-downturn-looms/


BASF has said it will have to downsize “permanently” in Europe, with high energy costs making the region increasingly uncompetitive.

“The statement from the world’s largest chemicals group by revenue came after it opened the first part of its new €10bn plastics engineering facility in China a month ago, which it said would support growing demand in the country.”

https://www.ft.com/content/f6d2fe70-16fb-4d81-a26a-3afb93e0bf57


The CEO of German automaker Audi has said introducing highway speed limits and “car-free days” could help the country as it faces the energy crisis and effects of the Russia-Ukraine war, according to local media.

“”We have to rethink, realize that our lives are changing,” Markus Duesmann told the daily Suddeutsche Zeitung…”

https://www.aa.com.tr/en/europe/speed-limits-car-free-days-could-help-germany-overcome-energy-crisis-says-audi-ceo/2721405


The black sheep of the EU head for crisis as Brussels cuts off lifelines; Viktor Orban desperate to unlock frozen funds as inflation surges in Budapest…

““Financial crisis and economic downturn in the EU. Migration invasion in the south. War in the east and economic crisis in the West,” Orban said in front of a massed rank of flags.”

https://www.telegraph.co.uk/business/2022/10/26/eus-black-sheep-head-crisis-brussels-cuts-lifelines/


Desperate Australians are turning to everything from coupons to gambling to make ends meet, according to new research by Finder.

“A nationally representative survey of 1,058 respondents revealed 3 in 5 Australians (59%) – equivalent to 11.8 million people – are taking action to give themselves some breathing room from the cost of living pressures.”

https://www.finder.com.au/australians-are-taking-action-to-combat-the-cost-of-living-crisis


China fiscal deficit balloons to nearly $1 trillion as economy cools.

“China’s fiscal deficit ballooned to an all-time high of nearly $1 trillion in the first nine months of the year, analysis of government data by Bloomberg showed, as a real estate crisis and tax rebates to boost a cooling economy emptied government coffers.”

https://uk.sports.yahoo.com/news/china-fiscal-deficit-balloons-nearly-060327256.html


A historic sell-off in Hong Kong stocks has dealt a blow to the nest eggs of the city’s millions of workers, saddling them with losses of about HK$62,400 (S$11,170) each that may take years to recover.

“The Mandatory Provident Fund (MPF) – Hong Kong’s official pension system – shed about HK$286 billion this year as at Monday, according to researcher MPF Ratings.”

https://www.straitstimes.com/business/hong-kong-pension-fund-s-biggest-slump-since-2008-fuels-anger


Global Economy in ‘Disequilibrium’ Has Big Risks, Singapore Says…

““The pullback in household and business spending, together with a further tightening in financial conditions, could potentially interact with existing vulnerabilities in the financial system, and exacerbate the economic downturn,” according to the Monetary Authority of Singapore’s biannual Macroeconomic Review published Thursday.”

https://www.bloomberg.com/news/articles/2022-10-27/global-economy-in-disequilibrium-has-big-risks-singapore-says


South Korea moves again to ease credit crunch sparked by Legoland developer default.

“South Korea’s central bank announced more measures on Thursday to improve liquidity in the banking system and mitigate the fallout from a developer’s debt default which is sparking fears of a credit crunch in Asia’s fourth-largest economy.”

https://www.reuters.com/markets/asia/skorea-moves-again-ease-credit-crunch-sparked-by-legoland-developer-default-2022-10-27/


‘Sudden slump in demand’ leaves Asia Pacific air cargo carriers ‘in limbo’…

“Director general Subhas Menon said, “The outlook for the cargo market remains subdued in the near term. Overall, the region’s airlines continue to face a challenging operating environment, with costs under pressure as a result of high fuel prices and weak local currencies.””

https://theloadstar.com/sudden-slump-in-demand-leaves-asia-pacific-air-cargo-carriers-in-limbo/


Asian Currency Reserves are Reaching Their Limit.

“Asia’s central banks have fought hard to protect the value of their currencies this year as the dollar has soared. But each of them has a limited appetite for that defence.”

https://www.euromoney.com/article/2assr7cq17onwk2dowxz4/opinion/asian-currency-reserves-are-reaching-their-limit


Vietnam’s fuel importers under increasing strain from record low currency, tight credit.

Vietnam’s oil product importers are struggling to buy from the global market as the dong plunges against the dollar and bank credit tightens, deepening their reliance on domestic refineries that are ramping up production above capacity in a bid to alleviate critical fuel shortages…”

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/petrochemicals/102622-vietnams-fuel-importers-under-increasing-strain-from-record-low-currency-tight-credit


Collapsing currencies are exacerbating food crisis, World Bank warns…

“Even as most food and energy prices have moderated in recent months, following sharp spikes in the immediate wake of Russia’s invasion of Ukraine, many countries are not feeling relief because of the dollar’s strength and their own currencies’ weakness. The poor spend more of their money on food.”

https://www.devex.com/news/collapsing-currencies-are-exacerbating-food-crisis-world-bank-warns-104306


Fleeing Farmers to Worsen Food Crisis in Conflict-Riven Myanmar…

“Inflation is rising in the military junta-controlled country, while humanitarian needs have intensified as fighting continues. As well as high fertilizer and fuel costs that have hurt agricultural production, loss of farmland and harvests will play an even bigger role in worsening food insecurity…”

https://www.bloomberg.com/news/articles/2022-10-27/fleeing-farmers-to-worsen-food-crisis-in-conflict-riven-myanmar


Bolivia to temporarily suspend exports of food products amid protests…

“The move is aimed at safeguarding food security in Bolivia, said the minister of Productive Development and Plural Economy, Nestor Huanca, adding that the export suspension will include soybean grain, soybean flour, soybean meal, sugar, oil and beef.”

https://www.reuters.com/markets/us/bolivia-temporarily-suspend-exports-food-products-amid-protests-2022-10-27/


Argentina Downgraded by Fitch on Rising Debt Repayment Risk.

“Argentina was slashed deeper into junk by Fitch Ratings on risk the nation’s deep macroeconomic imbalances and “highly constrained” external-liquidity position will undermine its ability to repay debt. The South American nation’s credit score was cut by a notch to CCC-…”

https://www.bloomberg.com/news/articles/2022-10-26/argentina-downgraded-by-fitch-on-rising-debt-repayment-risks


Cuba’s state-owned oil company, Unión Cuba Petróleo (CUPET), announced Wednesday a shortfall in fuel availability throughout the country.

“Cuba has been suffering for months from an energy crisis that has caused daily power outages for months throughout the island, which in turn has increased social discontent and the number of protests over supply cuts, aggravated by the passage of Hurricane ‘Ian’…”

https://www.msn.com/en-gb/news/world/cuba-announces-fuel-deficit-on-the-island/ar-AA13pIZg


Petrol Shortage Hits Lagos [Nigeria] as Queues Emerge in Filling Stations…

“The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, earlier said the current fuel scarcity in Abuja and other surrounding states is caused by the inability of fuel trucks to have access to Lokoja roads. The regulatory body said the roads were flooded.”

https://saharareporters.com/2022/10/25/petrol-shortage-hits-lagos-queues-emerge-filling-stations


UN: Syria facing `acute violence’ and worst economic crisis.

“Syria is facing “acute violence,” the worst economic crisis since the war began in 2011, and a rapidly spreading cholera outbreak with more that 24,000 suspected cases reported throughout the country and at least 80 deaths, U.N. officials said Tuesday.”

https://apnews.com/article/health-middle-east-business-syria-united-nations-d380915dbd660a121c87c1f200f38776


Why billionaires are obsessed with bunkers.

“A couple of years ago, Douglas Rushkoff, a professor of media and digital economics in New York, was asked to give a speech at a swanky resort in a remote American desert… he was shocked to find himself in front of half a dozen ultra-rich tech and hedge fund luminaries, instead of a conference.

“The men — yes, they were all men — were collectively torn, they said, over a particular choice: New Zealand or Alaska? They feared the world was heading for what they termed “The Event” — some kind of “environmental collapse, social unrest, nuclear explosion, solar storm, unstoppable virus or malicious computer hack that takes everything down”, Rushkoff says. And they wanted to know which region would be safest to retreat to.

“Other questions that preoccupied them included: was climate change scarier than biological warfare? How long would they likely need to remain in a bunker for anyway? And, crucially, how could they stop their own security forces from murdering them? They sought these answers from Rushkoff because he had previously written Present Shock, a well-regarded book about the future of tech.

“Rushkoff admits he did not have many answers to offer, except for noting that if the billionaires wanted to avoid being murdered by the help, they should start being extremely nice to them now.”

https://www.ft.com/content/c0ee992f-2fb8-4ae0-816f-bc849bf1b60b


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

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