Apologies for the geopolitics but this is currently the most important story for the global economy; I am not endorsing the position of either side but observing that de-escalation is looking less likely than ever:
“Biden and Putin both implicitly tie their futures to the outcome in Ukraine.
“In their speeches, Joe Biden and Vladimir Putin could not have been further apart in their interpretations of the past year, its culprits, causes, and consequence. But in one aspect they were agreed: this is a war intended to remain on the territory of Ukraine, but is being elevated into something far wider – a battle of survival between the west and Russia.”
“Putin suspends nuclear pact, Biden says support for Ukraine ‘will not waver’…
“Biden went on to say that “there should be no doubt: Our support for Ukraine will not waver, NATO will not be divided, and we will not tire.” …”The elites of the West do not hide their purpose. But they also cannot fail to realise that it is impossible to defeat Russia on the battlefield,” Putin said.”
“War in Ukraine defining new world order, says thinktank [looks more like a pre-collapse phase of splintering and fragmentation than the rising of a new order to me].
“Almost a year after Russia’s war against Ukraine started, it has united the west, according to a 15-country survey – but exposed a widening gulf with the rest of the world that is defining the contours of a future global order.”
“QE has become ‘Hotel California’ for central banks… While commercial lenders change behaviour when the balance sheet expands, they do not change it back when it shrinks…
“… banks make greater claims on the system’s liquidity during QT, which may continue until there is a market blow-up.”
“Money supply numbers have been sending important signals before and during the pandemic…
“…by December last year the three-month annualised growth rate of broad money (M2) in the US had sunk to a stunning minus 5.4 per cent pushing the year-on-year growth rate into negative territory. One conclusion: the equity market is currently too sanguine about avoiding a recession. Another: time for a rethink about money.”
“U.S. existing home sales slowed for the 12th consecutive month in January as high mortgage rates, surging inflation and steep home prices sapped consumer demand from the housing market.
“Sales of previously owned homes tumbled 0.7% in January from the prior month to an annual rate of 4 million units, according to new data released Tuesday…”
“UK House prices are the most expensive they’ve been for almost 150 years relative to average earnings, a new study has revealed.
“The average house in the UK currently costs 9.1 times average earnings, according to a report by investment manager, Schroders. The in-depth study looked at property prices all the way back to 1845 and said last time they were as expensive was in 1876.”
“Leveraged Real Estate in Europe Faces Its Reckoning.
“The reckoning has begun for continental Europe’s highly leveraged real estate companies. With property values falling in response to higher borrowing costs, balance sheets are feeling the strain and bosses are taking defensive measures.”
“Germany’s GDP is expected to decrease for the second quarter in a row, meaning the country is officially in a recession, according to predictions from the country’s central bank.
“The German Federal Bank published on Monday its monthly report, predicting a shrinking economy for two quarters in a row – a trend economists characterise as a recession.”
“Among the challenges facing French wine producers right now is finding enough glass to bottle their 2022 vintage– and it’s becoming so bad that some want the government to step in…
“…shortages of glass started to become apparent in France during Covid-related restrictions, when furnaces stopped running a full capacity. Today, the production of glass is also reduced, but for a different reason: the cost of fuel to fire the furnaces.”
“Shares in beleaguered lender Credit Suisse plunged to record lows today after it was revealed that chair Axel Lehmann is under investigation by Swiss regulators over potentially misleading claims he made to the media last year.
“The Swiss financial regulator Finma is reportedly scrutinising whether Lehmann was aware that investors were still pulling cash from the firm when he told media that outflows had stabilised, Reuters reported.”
“Australia’s politicians and Reserve Bank officials have obfuscated the extent of the economic challenges ahead.
“The spin is that interest rate rises are temporary and for the best. The truth is that the cost of living and interest rates may stay high for some time to come… Long-term resource scarcity concerns loom. Shortages of water, food and non-renewable raw materials are likely because of rising demand, supply constraints and inadequate investment.”
“A Queensland house builder is the latest construction company to go into liquidation as the industry is plunged into even deeper crisis.
“Brisbane-based Pantha Homes has been wound up and put in the hands of liquidators as soaring raw material costs and rising interest rates wreak havoc.”
“New Zealand hikes rates to over 14-year highs, flags more to come; kiwi rallies.
“New Zealand’s central bank raised interest rates by 50 basis points to a more than 14-year high of 4.75% on Wednesday, and said it expects to keep tightening further as inflation remains too high, a hawkish signal that sent the local dollar surging.”
“Japan manufacturers gloomy as global slowdown hurts.
“Big manufacturers in Japan remained gloomy in February and the service-sector mood slid for a second straight month, a Reuters’ poll showed, a sign that the global slowdown is holding back the country’s recovery from COVID-induced economic doldrums.”
“If you thought it was about time global semiconductor demand bottomed out, you may want to think again by looking at South Korea’s latest chip exports.
“Korea’s shipments abroad of semiconductors that go into everything from computers to smartphones plunged 43.9% in the first 20 days of this month compared with a year earlier, according to the national customs office. That’s similar to the 44.5% drop for the full month of January.”
“North Korea’s official newspaper has urged economic self-reliance amid reports of food shortages, arguing that relying on external aid to cope with the food situation would be like taking “poisoned candy”.
“The commentary, published in the Rodong Sinmun on Wednesday, comes days after South Korea announced that the food crisis in North Korea “seems to have deteriorated”.”
“China’s emissions may have increased by 1.3% or decreased by 1% depending on how you interpret the data… Myllyvirta and Yan Qin, a carbon analyst for data provider Refinitiv, have offered an intriguing explanation for the conundrum — it’s possible that the quality of China’s coal is declining. That would mean that energy content (and thus emissions) are holding more or less steady, even as tonnage increases… There’s plenty of evidence to support this theory.”
“India is invoking an emergency rule that will force some of the country’s biggest coal power plants to operate at full capacity, as the nation prepares to meet surging electricity demand and avoid blackouts.
“Power stations operating on imported coal will be asked to run flat out for three months during the summer season to ease the burden on domestic coal supplies.”
“Gas shortage exposes fragile South Asian economies to more pain…
“Despite LNG prices having fallen from last year’s record highs, the superchilled fuel is still expensive for South Asian buyers as their currencies have weakened sharply, making it hard for them to boost LNG imports this year.”
“Sri Lankan police disperse protesters demanding election…Sri Lankan police fired tear gas and a water cannon at opposition supporters…
“Several thousand backers of Samagi Jana Balawegaya, or United Peoples’ Power party, shouted anti-government slogans as they marched toward the center of Colombo, where government offices and the president’s office and residence are located.”
“Imran Khan plans mass protests as Pakistan races to secure IMF deal.
“Pakistan’s former prime minister Imran Khan said his allies plan to get arrested en masse on Wednesday in protests designed to destabilise the government, which is urgently seeking to secure an IMF bailout to avert a default.”
“Iran rations euros as fights break out at foreign-exchange offices amid rial’s plunge to record lows…
“Monday’s push to sell rials followed the currency’s rapid decline in value, dropping to a record low of 501,300 rials per US dollar. The day’s massive sell-off even led to fighting outside foreign-exchange offices, as customers tried to break through security, according to Bloomberg.”
“Mass protests as Israel moves ahead with judicial ‘reform’…
“Demonstrators from across Israel descended on Jerusalem on Monday to rally near the Knesset for a second straight week ahead of the first reading of the legislation to change the way judges are picked… Protesters accuse the government of a power grab…”
“Sudanese demonstrators take to the streets to protest military rule.
“Hundreds of Sudanese protesters took to the streets of Khartoum on Tuesday, demanding the ouster of the country’s military rulers and rejecting a deal from late last year for the gradual transfer of power to civilian leaders. Riot police fired tear gas at protesters, and confrontations took place between security and protesters.”
“Tens of thousands of refugees flee from Somaliland clashes.
“More than 60,000 Somali refugees have fled to Ethiopia after an escalation in fighting in the town of Las Anod, in the Sool region, where tensions between local people and the governing Somaliland authorities have been building for weeks.”
“Patients dying as Nigerian cash crisis hits health services before election.
“Several people have died and the lives of pregnant women and critically ill patients have been put at risk after a botched attempt to replace Nigeria’s currency in the buildup to Saturday’s general election left countless people unable to pay for treatment.”
“South Africa Quietly Deepens Power Cuts to Unprecedented Level.
“The company cut 7,045 megawatts from the grid, a practice locally referred to as loadshedding, in order to keep the grid from a total collapse, Sikonathi Mantshantsha said in a post on Twitter… the deepest level of outage on record…”
“South Africa’s financial services sector is panicking over the impact that a potential collapse of the national electricity grid could have on the country’s financial and monetary system.”
“Protesters storm parliament in Suriname, dozens arrested and injured…
“The demonstration, which was initially calm and organized, became increasingly aggressive and degenerated into the storming of the parliament building… The protesters were angry about… the economic crisis in Suriname. Inflation there, for example, is above 54 percent.”
“These countries have been the hardest hit by food price inflation.
“Historically high commodity prices, Russia’s war in Ukraine, volatile fertilizer markets and other causes, have left many countries facing a cost-of-living crisis with double- and even triple-digit food price inflation, according to the World Bank.”
“Oil falls on worries interest rates will rise more and curb fuel demand.
“Oil prices fell for a third trading session on Wednesday on expectations the U.S. Federal Reserve will indicate later in the day that interest rates are set to rise more, stoking concerns of lower global economic growth and demand for fuel.”
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.
“China is home to 16 of the 20 global regions most vulnerable to climate change, according to data published on Monday, with some of the world’s most important manufacturing hubs at risk from rising water levels and extreme weather…
“The industrialised Chinese coastal province of Jiangsu, which accounts for a tenth of China’s GDP, was ranked the world’s most vulnerable territory, followed by neighbouring Shandong and the major steel production base of Hebei. The flood-prone central province of Henan was fourth…
“The highest ranking non-Chinese region was Florida in 10th place, with California 19th and New York 46th. Nine territories from India were also in the top 50.”
“Impact on global growth from China’s reopening will be ‘limited’.
“…Pushpin Singh, economist at the CEBR, said that China would not be “carrying the world on its back” as during the 2008-09 financial crisis when Beijing turned on the spending taps to help stimulate world growth.”
“Even though globalisation may have peaked, it is far from being wholly reversed, and Western countries need to stop weaponising trade and economic policy. Nations should also lower their trade barriers.”
“I’m sticking with my prediction of a recession in Ireland and globally this year despite the optimism… Monetary data is signalling red alert regarding our economic prospects over the coming 18 months.
“In the eurozone, the six-month rate of decline of real narrow money is close to record levels. In the past, weakness in this measure has preceded economic weakness. And, across the G7 and E7 economies, real narrow money [M1 in the US] is declining at rates greater than the declines seen after the tech bubble popped in 2000 and the global financial crisis in 2008.”
“Empty containers are piling up at major ports around the world as slowing economies weigh on shipping demand…
“The docks in Shanghai port are filled with empty containers, and many must be moved to nearby Taicang port, a dock operator at Shanghai told. “We haven’t seen such a scene for years,” he said.”
“China may be on brink of supplying arms to Russia, says Blinken.
“The US has said it believes China may be about to provide lethal aid to help Russia in the war in Ukraine, prompting a direct warning against doing so from the secretary of state, Antony Blinken, to China’s top diplomat.”
“Liz Truss urges west to safeguard Taiwan security ‘before it’s too late’…
“Her keynote speech is being seen as an attempt to rebuild her political reputation, but also to add to pressure on her successor, Rishi Sunak, to take a stronger stance against Beijing. More hawkish Conservative MPs have called on Sunak to reclassify China as a “threat” instead of a “systemic competitor”…”
Edit: I have just removed an article I posted in which Kamala Harris accuses Russia of crimes against humanity in Ukraine and promises to bring the perpetrators to heel. I posted it, and the two above, just to illustrate that there is a ratcheting up of geopolitical tensions generally but I realise that I am treading on thin ice and I do not want to be seen to be endorsing the accusations of any one side over another, hence the deletion.
My preference is ever for the overview!
“Five arrests as thousands protest in Oxford [UK] against Low Traffic Neighbourhood ’15-minute cities’…
“The controversial LTNs have attracted huge outcry since being introduced in the city last year… Traffic filters are set to be trialled in six locations next year. There’ll be no road closures but cars will be fined if caught driving through certain areas unless they have a permit.”
“Researchers from the University of Leeds say lessons learned during wartime can be useful in the fight against climate change.
“Records from the Second World War show that compulsory food rationing was more acceptable to the UK public than voluntary changes to diet when resources ran short.”
“War, drought, staff shortages: why the price of milk has soared in the UK…
“The UK’s headline rate of inflation may be easing, according to last week’s figures, after a third successive monthly decline to 10.1% in January. However, it remains close to the highest level in 40 years as prices for food, drink and other basic essentials keep the pressure on households.”
“Why there is a national shortage of tomatoes as supermarket shelves left bare…
“There has been a shortage of eggs on our supermarket shelves for months and now there are concerns about a national shortage of tomatoes… The current tomato shortage in the UK is reportedly down to rising energy costs, with tomato growers struggling to afford to heat their greenhouses because of the expense…”
“Britain’s medicines shortage crisis is deepening, with an unprecedented 70 commonly taken drugs now out of stock, according to the latest data.
“Over the past 12 months, supply problems have hit crucial antibiotics, hormone replacement therapy (HRT) drugs, painkillers and over-the-counter cold and flu remedies – but now certain antidepressants, stop-smoking pills and a sleeping tablet taken by millions have been added to the list.”
“Cost of living crisis: ‘Deeply concerning’ rise in prescriptions left uncollected.
“The RPS survey of almost 270 pharmacists found half said they had seen an increasing number of patients ask them which prescription medication they could manage without because they could not afford to pay the charge. The survey also found one in two pharmacists reported an increase in the number of people not collecting their prescriptions…”
“Ireland’s central bank governor has defended the country’s world-beating economic growth against accusations that it is an artificial product of big US companies taking advantage of Dublin’s low taxes…
“The debate about Ireland’s economic outperformance flared up recently after the country’s 3.5 per cent quarter-on-quarter growth in GDP single-handedly prevented the eurozone economy from stagnating in the final three months of last year.”
“IEA’s Birol warns of tighter energy supply [for Europe] next winter…
“”For this winter it is right to say that we are off the hook. If there are no last minute surprises, we should get through…maybe with some bruises here and there,” said Birol. “But the question is…what happens next winter?””
“Euro Area Braces for Era of Central-Bank Losses After QE Binge.
“The euro area’s central banks will disclose their first significant losses from a decade of money printing in the coming weeks, heralding a new era of scrutiny and the prospect of taxpayer bailouts… Euro-area losses would add to a list of examples globally…”
“A shift in fund flows from Japan will be felt around the world…
“Why has the administration of Prime Minister Fumio Kishida nominated a comparative outsider to lead the BoJ, breaking with a long-held tradition of rotating between appointments from the Ministry of Finance and from within the ranks of the bank itself? Perhaps others did not want the job.”
“India’s Economic Activity Cools in January Amid Slowdown Fears.
“India’s economic activity cooled off at the start of the year as higher borrowing costs tempered demand at home and abroad, signaling more pain ahead as the global economy slows down… Domestic recovery, that has been driving momentum so far, is getting wobbly.”
“Unprecedented financial crisis; dues of pension and dearness allowance will not be paid [Kerala, India].
“The Finance Department issued an order clarifying that the state government is in an unprecedented financial crisis and therefore cannot fulfill its promise to pay the pension revision arrears and dearness allowance arrears in the financial year.”
“Fuel shortage threatens power generation [Bangladesh]…
“… at the end of the day, industrial production is bound to suffer if energy supplies cannot be ensured. The problems with sourcing foreign currency might deepen as Bangladesh enters into an uncertain 2023, marked by soaring energy prices.”
“Sri Lanka income tax protests: unions threaten to shut country down.
“A collective of trade unions and professional associations representing high-income earning public servants has threatened to launch a nationwide general strike on March 01 if the government doesn’t address their concerns about a personal income tax hike.”
“Pakistan economic crisis; Suzuki, GSK among other big firms to halt operations as raw materials, demand dwindle.
“In the past few months a number of Pakistan’s largest companies have had to halt operations due to raw material shortages and currency shortages, compounding the troubles of the nation’s struggling economy.”
“The CPEC project that was commenced a decade ago was held as a harbinger of prosperity for Pakistan. However, seven years later, many projects under the CPEC still remain non-starters while some of those being operational have become liabilities and are incurring losses.”
“President Kais Saied of Tunisia ordered Europe’s top trade union official to leave the North African country after she addressed protesters at a demonstration organized by an influential labor union…
“She called on the Tunisian government to negotiate with the UGTT leadership and to improve the economy, which has teetered on the brink of bankruptcy amid political instability that deepened after a parliamentary election last month in which only 11% of voters cast ballots.”
“Moroccans defy ban to protest surging cost of living.
“Moroccan trade union activists protested Sunday in the capital Rabat and other cities to denounce surging costs of food and fuel, defying a government ban against marches. Protesters from the Democratic Labour Confederation staged rallies outside their offices.”
“Since its launch in 2021, the usage of the eNaira — Nigeria’s digital currency — has refused to pick up, the International Monetary Fund has disclosed.
“According to the fund, only about eight per cent of eNaira wallets are in use, with an average transaction value of N53,000… When Nigeria launched its central bank Digital Currency, it became the second country after The Bahamas to launch a CBDC.”
“Eskom has announced that power cuts will remain on stage 6 [South Africa] until further notice due to the breaking down of more generating units at several power stations.
“…the utility has been battling to keep up with the high number of system failures that have tripped a further eight units on Sunday. Spokesperson Sikonathi Mantshantsha said that six units had suffered breakdowns and were taken offline for repairs.”
“Mass blackout in Cuba: a large part of the country is without electricity due to an electrical failure.
“A power outage This Saturday affects eleven of the 15 provinces of Cuba reported the state-owned Unión Eléctrica, after another blackout in half the territory this week… On Monday another blackout lasted five hours and it affected seven provinces also from the center to the east of the island due to a fault in the 220 KV (kilovolt) network.”
“From a secret safehouse, Peru’s Indigenous revolt advances.
“Two months into Peru’s angry insurrection, emotions have hardened. While the unrest has barely disturbed the late-night revelry in Lima’s beachside enclaves, roadblocks still rage across the countryside, scaring away foreign tourists and leading to shortages of gas and other staples… The impasse has given a jolt of self-confidence to Peru’s Indigenous movement.”
“The growing rivalry between China and the United States threatens to scupper meaningful and constructive reform of sovereign debt relief… If the Common Framework fails, toxic geopolitics will be to blame.”
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.
“Global pension assets record largest annual decline since the global financial crisis.
““Last year we experienced, to an extent, a global ‘polycrisis’ where various risks combined, were amplified as a result, and manifested in significant asset falls. It is our view that these systemic risks will increase in the future and will emanate predominantly from environmental, societal and geopolitical sources,” said Marisa Hall, head of the Thinking Ahead Institute.”
“Soaring energy prices triggered by the Russia-Ukraine conflict could push up to 141 million more people around the globe into extreme poverty, a study has found.
“The cost of energy for households globally could have increased by between 62.6% and 112.9% since Russia’s invasion of Ukraine, according to a modelling study by an international group of scientists published in Nature Energy.”
“Europe to face intense competition for gas with China this year, Shell warns… Energy giant says invasion of Ukraine has caused ‘structural shifts’ in gas market…
“Shell cautioned there will not be enough liquefied natural gas (LNG) supplies to meet global demand later this decade unless more money is put into new projects.”
“Pentagon’s top China official to visit Taiwan amid rising bilateral tensions.
“The Pentagon’s top China official is to visit Taiwan in the coming days, a rare trip to the island by a senior US defence policymaker that comes as relations between Washington and Beijing are mired in crisis over a suspected Chinese spy balloon shot down two weeks ago.”
“Taiwan reports Chinese balloon found on northern island.
“Taiwan’s Defense Ministry says it found a Chinese weather balloon on one of its outlying islands, amid U.S. accusations that such craft have been dispatched worldwide to spy on Washington and its allies.”
“Britain Wargames a Crash Far Worse Than Covid If Chip Supplies [from Taiwan] Are Shut Off…
“The UK is preparing a contingency exercise across multiple government departments, Bloomberg has learned, and the pandemic offered a mere preview of the chaos that tiny silicon wafers can unleash… The shock of a TSMC shutdown would be felt immediately and in every corner of British life.”
“Taiwan’s Director of Chinese Affairs Dr Lai Chung has warned Australia could be China’s “next target” if Beijing successfully invades and takes over Taiwan.
[Seems improbable to me but I post it to highlight the general atmosphere of worsening paranoia, as the species gaslights itself into psychosis with potentially combustible results.]
“Russia has started deploying tactical nuclear weapons-armed vessels in the Baltic Sea for the first time in three decades, according to a Norwegian intelligence report…
“The Norwegian intelligence report stated that… “It cannot be ruled out that a localised war could escalate into a wider conflict with direct military involvement of Russia, the United States, NATO, and Norway.””
“We Are Not Frightened Enough – Nuclear Weapons And The Horrors They Pose… New survey reveals how the public understanding of “nuclear winter” is dangerously low…
“In a statement, Paul Ingram, the senior researcher working on the CSER survey, explained how worrying the results are. “Ideas of nuclear winter are predominantly a lingering cultural memory”, he said, “as if it is the stuff of history, rather than a horribly contemporary risk.””
“U.S. household debt jumps to record $16.90 trillion.
“U.S. household debt jumped to a record $16.90 trillion from October through December last year, the largest quarterly increase in 20 years, as mortgage and credit card balances surged amid high inflation and rising interest rates, a Federal Reserve report showed on Thursday.”
“Tuesday Morning, the discount home goods retailer, filed for Chapter 11 bankruptcy protection Tuesday, its second bankruptcy in three years.
“It’s the latest example of the retail apocalypse, which is starting to creep back… Tuesday Morning joins a growing number of financially distressed retailers that have filed for bankruptcy this year.”
“Fears for the futures: half of British youth believe they will never earn enough to support a family…
“…this report shows that young people in 2023 are less satisfied and confident with money than they were then. The diminishing levels of happiness and confidence are accredited to the cost-of-living crisis and the upcoming recession. Young people are losing hope in the future and their ability to achieve their potential.”
“Critical care nurses in England join strikes as pay dispute deepens.
“The unprecedented move came as the UK’s biggest transport union announced four new strike dates and Royal Mail workers balloted overwhelmingly for up to six more months of walkouts… The tougher stance comes as the government refuses to reopen pay talks for the current financial year.”
“Greece offers more aid to inflation-hit pensioners and businesses.
“Greece’s conservative government on Wednesday announced more financial aid for pensioners, farmers and businesses hurt by inflation and costly energy bills, launching the latest measures months before a national election.”
“Albania has third anti-government protest this week, PM called to resign.
“The opposition and supporters held the third anti-government protest in a week outside of parliament in Tirana on Thursday, calling for the prime minister to resign and attempting to disrupt the parliamentary session.”
“Singapore’s non-oil domestic exports plunged 25% year on year in January — their largest drop in 10 years.
“Government data showed Singapore’s non-oil exports to its top markets led the wider decline, with exports to China falling by more than 41%, to the U.S. by 31.5% and to Hong Kong by more than 55% for the month.”
“Japan’s Trade Deficit Smashes Record Amid Global Slowdown.
“Japan’s trade deficit surged to a record in January, as exports to China sharply dropped and the global economy slowed. The trade gap jumped to 3.5 trillion yen ($26.1 billion) from 1.45 trillion yen in December, the finance ministry reported Thursday. The deficit far exceeded the previous record of 2.82 trillion yen…”
“Amazon pollution: the stain on Ecuador’s oil boom.
“…millions of hectares have been transformed — for better or worse — into Ecuador’s oil capital. The region’s forests are receding as pollution spreads, activists claim — the landscape increasingly dominated by wells, pipelines, tanker trucks, oil flares and processing plants. The government says oil income is essential for the country’s development, and that of its people.”
“Peru protests jolt mine activity with Las Bambas, Antapaccay hit hardest.
“Peru’s top copper mines are starting to see activity hit harder by protests and blockades in the country’s southern Andes, power data reviewed by Reuters shows, with Chinese-owned Las Bambas and Glencore PLC’s Antapaccay currently worst affected.”
“The Chilean government on Thursday pared back its forecast for the country’s gross domestic product (GDP) in 2023, saying it now expects a 0.7% economic contraction in the year, down from a 0.5% contraction seen earlier.”
“Argentina faces a historic contraction of citrus fruits in the domestic market.
“Corrientes’ citrus sector ran out of fruit in January and has been unable to calculate total losses, stated Nicolas Carlino… Citrus plantations have been affected by permanent water stress for three years, he stated. “The worst part about this lack of water is that its happening right now, while the fruit is growing, in the middle of summer, when the crops should be bearing fruit.””
“Food Prices Hit 14-Year High as South Africa Power Cuts Escalate…
“The increase in food prices came as state-owned Eskom Holdings SOC Ltd. imposed power cuts of as long as 12 hours a day — the most severe outages yet — for nine days in January. Power cuts, known locally as loadshedding, have been implemented for 108 straight days because of frequent breakdownds at Eskom’s plants.”
“Scores Killed, Injured in Clashes in Oil-Rich Somaliland Region…
“Somaliland’s Ministry of Foreign Affairs this week denied killing civilians and accused Somalia of trying to destabilize the oil-rich region. Last year, Somaliland defended its right to award oil-exploration licenses, after Somalia’s government declared the UK-based Genel Energy Plc’s operations there illegal.”
“Two people died Thursday in clashes between anti-junta protesters and security forces in Guinea [also oil-rich]… with the country’s opposition coalition reporting “many arrests” and injuries from live ammunition.
“Protesters took to the streets to demand a return to civilian rule, and the release of arrested activists and other political prisoners under the military junta that seized power in the West African nation in 2021.”
“Police fire tear gas at supporters of Senegal opposition leader Sonko.
“The demonstrations are the latest sign of unrest in the West African country where elections next year could pit Sonko against President Macky Sall, if the president seeks a third term, a move that opponents say is unconstitutional.”
“Rioters have attacked bank ATMs and blocked roads in three Nigerian cities as anger spilled on the streets over a scarcity of cash, just days before the country’s general election.
“Nigeria has been struggling with a shortage in physical cash since the central bank began to swap old bills of the local naira currency for new ones, leading to a shortfall in banknotes.”
A very dark experiment is under way in Nigeria, with deadly consequences. Since October 2021, 99.5% of Nigerians have refused to use the central bank's digital currency, the so-called e-Naira, preferring to continue using cash. So what did the central bank do? It doubled down.
“Ghana facing the worst economic catastrophe in our lifetimes – Kofi Bentil to Akufo-Addo…
“He believes that the president needs to act decisively on same by making radical changes especially at the Ministry of Finance, where he wants all the political leadership led by minister Ken Ofori-Atta removed.”
“Twelve years after Yemen uprising, people’s dreams are shattered.
“As Yemen marks 12 years since the February 2011 uprising, aspirations remain unfulfilled and the unthinkable has happened as the country slipped into years of strife and then war, which pushed it into the world’s greatest humanitarian crisis. Today, 17 out of 33 million people in Yemen are food insecure…”
“Egyptians already battered by high prices fear they will face even steeper inflation. “All prices have increased but incomes have not,” said Robert Botros, a family therapist, who added that clients were cutting down on visits to save money. His children’s school fees have jumped 50 per cent since the start of the school year…”
“Several dozen Lebanese protesters attacked banks in a Beirut neighborhood on Thursday, while blocking roads protesting against informal restrictions on cash withdrawals in place for years and rapidly deteriorating economic conditions.”
“Iran protests flare in several cities amid continuing unrest…
“Since they began, at least 529 people have been killed in demonstrations, according to Human Rights Activists in Iran. More than 19,700 others have been detained by authorities amid a violent crackdown trying to suppress the dissent.”
“Impoverished Afghans Turn To Booming Crystal-Meth Industry To Eke Out A Living…
“Among them is Ahmad Wali, who lives in the remote province of Ghor in central Afghanistan. Wali is believed to be among the thousands of people who earn money by collecting ephedra, a wild herb that is used to make crystal meth. “For now, it is our only source of income,” he told RFE/RL’s Radio Azadi…”
“How Pakistan is taking desperate economic measures for IMF bailout.
“The Pakistan government is trying its best to secure a deal with the International Monetary Fund (IMF) for the release of a critical bailout package, failing which it can slump into default.”
“Sri Lanka hikes power prices by 66% hoping to gain IMF support.
“The scale of the price rise will heap misery on Sri Lankans already struggling with inflation running at 54.2%. But, the government can barely able to afford vital imports due to a lack of foreign currency reserves, and has to convince international creditors that it will follow sound fiscal policies.”
“The Managing Director of the IMF warned that we need to “think of the unthinkable,” as we live in “a more shock-prone world” impacted by the Covid-19 pandemic, Russia’s invasion of Ukraine and the recent earthquake across Syria and Turkey…
““What we are very concerned [about] is the unexpected,” Kristalina Georgieva said.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.
“Financial time bomb: The risks of climate inaction to the global economy
“The world is facing a financial time bomb due to economic risks from climate change. Climate change is causing billions in losses globally and affecting the economy. Transitioning to a low-carbon economy is necessary to reduce emissions, but difficult for financial institutions. An abrupt market sell-off could trigger a financial crisis.”
“On climate, most corporations more talk than action.
“The world’s biggest and richest companies are failing to deliver on their climate pledges, according to an in-depth analysis released Monday that calls on governments to crack down on corporate greenwashing.”
“50% of the global economy is under threat from biodiversity loss.
“Whether you live in a city, a rural area or by the ocean, it’s likely you have noticed a decline in biodiversity. Maybe fewer birds visit your urban feeders, larger mammals are less common in the fields and forests around you, or your catches on those fishing trips are getting smaller. What we’re all witnessing is a potentially catastrophic loss of biodiversity on which entire ecosystems depend.”
“The metric that shows why the world’s three biggest economies could be in serious trouble.
“The dependency ratio [ie the comparison of a working-aged population to the young and elderly among them] might be one of the most important statistics when it comes to the future of investing and global markets. For the United States., China and Japan, it’s headed in the wrong direction.”
“A Yale University professor has sparked outrage by suggesting the only way to deal with Japan’s rapidly aging population is a mass suicide and disembowelment.
“Yusuke Narita, an assistant professor of economics at Yale, defended his views… ‘I feel like the only solution is pretty clear,’ he said at the time. ‘In the end, isn’t it mass suicide and mass ‘seppuku’ of the elderly?'”
“Chinese pensioners returned to the streets of Wuhan to protest changes to their medical benefits, highlighting the challenge confronting President Xi Jinping’s government following historic anti-lockdown demonstrations in November…
“In recent months, Chinese citizens have become increasingly bold about protesting government policies.”
“The world is counting on an economic bounceback from China to power global growth and help keep recession at bay. Don’t bank on it…
“China has historically relied on government stimulus and heavy investment to power itself out of slumps. That mix [+ now depleting stores of cheap coal] helped yank the global economy out of the doldrums after the 2008 financial crisis. This time, China is deeply in debt, its housing market is in distress, and much of the infrastructure the country needs is already built.”
“Copper [a key barometer of health for the global economy] Prices Flatline As Chinese Demand Struggles To Recover.
“…the market’s attitude has changed from general optimism to one of “watch and wait.” Most analysts simply keep holding out for signs of a resurgent Chinese demand, which many think may not arrive.”
“War in Ukraine at 1 year: Pain, resilience in global economy.
“One year after Russia invaded Ukraine on Feb. 24, 2022, the global economy is still enduring the consequences — crunched supplies of grain, fertilizer and energy along with more inflation and economic uncertainty in a world already contending with too much of both.”
“It’s time to prepare for the new world order and the stark implications of its arrival… there was always a hope… that the multilateral world order would survive because it was the best; because we designed it; because it conformed to universal notions of freedom and human rights, and because it was good for us. Unfortunately, we have to abandon that hope. It’s the multipolar scenario that is unfolding…”
“Most fund selectors believe a recession is needed to reduce global levels of inflation, according to a new survey, amid concerns the economic headwinds of last year will continue in 2023.
“Research conducted by Natixis Investment Managers, found 62% of fund professionals globally, and 74% in Asia, see a recession as a necessary way out of high inflation.”
“Global Liquidity Drain Is Coming for Markets, Citi’s King Says.
“King pointed to interventions in recent months undertaken by the Bank of Japan and People’s Bank of China — as well as shifting line items on the European Central Bank’s and Federal Reserve’s balance sheets — that have added almost $1 trillion to global central bank reserves… According to King, the $1 trillion increase in reserves helps resolve the disconnect [between stock markets and “real” economies battered by rampant inflation].”
“U.S. companies face more pain as expected ‘earnings recession’ looms.
“Expectations for U.S. earnings to decline in the first and second quarter come amid weaker-than-expected fourth-quarter results for 2022, which Credit Suisse estimates will be the worst earnings season outside of a recession in 24 years.”
“UK labour market can’t hold out much longer against impact of stagflation.
“Britain’s economy is suffering from a textbook case of stagflation, and the symptoms are clear from the latest labour market trends. It looks like a complex picture… In fact, the diagnosis is straightforward. There was zero growth in the final three months of 2022 while the annual inflation stood at above 10%.”
“More [UK] working days were lost to strike action last year than at any time since 1989, according to official figures that also show wage growth failed to keep pace with inflation amid the biggest real-terms fall on record.
“The figures from the Office for National Statistics provide more evidence for the squeeze on households amid the cost of living crisis.”
“UK and Eurozone inflation likely to remain high for several years due to the energy crisis.
“The surge in energy prices has significantly lifted headline inflation rates in the UK and Eurozone through the direct impact on household energy bills. However, there is a lag to the feed through from rising energy costs and consumer inflation of several months.”
“European countries’ bill to shield households and companies from soaring energy costs has climbed to nearly 800 billion euros, researchers said on Monday.
“The eye-watering sum has mostly gone towards measures like VAT cuts on petrol and retail power price caps. These act as “de-facto fossil fuel subsidies,” according to the analysis by think-tank Bruegel…”
“Europe’s gas stockpiling could cost energy users and taxpayers billions, according to a report by Bloomberg.
“…much of the commodity was bought at record prices… Since then, however, prices have fallen to their lowest point in 18 months… As a result, any sales of natural gas could cost energy users and taxpayers billions.”
“France Leans On Retailers To Help Consumers Cope With Food Prices.
“France’s finance minister has urged food retailers to do more to help consumers cope with high prices, as the government leans on them to agree to sell an anti-inflation basket of everyday essential goods at knockdown prices.”
“Nearly one million French march as pension protests continue.
“Protesters held a sometimes restive fourth round of nationwide demonstrations across France against President Emmanuel Macron’s plans to reform the country’s pension system. More than 960,000 people marched in Paris, Nice, Marseille, Toulouse, Nantes and other cities…”
“With no police to call or courts to turn to, Serbs in northern Kosovo are stuck in the middle of another bout of unrest after a mass walkout triggered new uncertainty amid the unending tug-of-war with Serbia.
“For three months, residents living in Kosovo’s northern Serb enclaves have gone without basic bureaucratic services — including law enforcement, courts, and local government institutions.”
“…around 120,000 residents of Nagorno-Karabakh — Azerbaijan’s Armenian-populated breakaway region — have since mid-December lived under a blockade that led to shortages of food, medicines, and fuel. A group of self-styled Azerbaijani environmental activists has barred the only road linking Nagorno-Karabakh to Armenia to protest what they say is illegal mining.”
“Households and enterprises in seven regions across Kazakhstan were temporarily knocked off the power grid as temperatures dropped to around -14 degrees Celsius over the weekend in fresh evidence of how the country is struggling to cope with inexorably mounting demand for electricity.”
“Pakistan edges closer to debt default as inflation, political turmoil and unrest collide.
“Pakistan’s economy faces total collapse, with a similar pattern emerging to that of its South Asian neighbour, Sri Lanka. Yet, unlike in Sri Lanka, the country is nuclear armed, its leading politicians are engaged in a violent power struggle, while an emboldened Taliban-affiliated terror group lays siege to the country’s west and north.”
“Decades of Iraq War Fuel Catastrophic Rise in Antibiotic Resistance.
“Decades of wars and conflict in Iraq have led to a “catastrophic” rise in antibiotic resistance in the country, with serious implications for the entire region and the world, warn international experts in the open access journal BMJ Global Health.”
“Earthquake survivors in Turkey face tragic times with economic collapse.
“The enormous calamity confronts the two nations that have been equally struggling for some time to overcome massive economic crises and a lingering 12-year civil war in Syria that has made the country a pariah and sent millions of Syrians into exile in Turkey or independent pockets within the country.”
“The Lebanese pound on Tuesday sank to a new record low of 74,000 against one U.S. dollar…
“Lebanese experts have repeatedly urged Lebanese authorities to take quick actions to stop the collapse of the Lebanese pound… Lebanon has been suffering from a steep financial crisis, and the country has so far failed to implement structural reforms to start the recovery process.”
“Protests and strikes in Israel as plans for judicial overhaul move forward…
“Prime minister Benjamin Netanyahu’s judicial changes have been met with some of the biggest protests ever witnessed in Israel in the two months since he returned to office, uniting many elements of what is usually a highly polarised society.”
“World Bank Urges Egypt to Loosen State Grip on Economy.
“Egypt needs to get more transparent about its debt, and that includes amounts owed by state-owned enterprises in an economy where the government plays too large a role, a senior World Bank official said… Last week Moody’s Investors Service downgraded the country’s credit rating deeper into junk territory, citing its declining ability to absorb shocks.”
“Tunisia’s president on Tuesday accused some people detained in a wave of recent arrests of being responsible for price increases and food shortages, saying they wanted to fuel a social crisis.
“President Kais Saied vowed to move forward to “clean the country,” in his first official comments on the arrests made during a meeting with Tunisia’s trade minister.”
“Moroccans Overwhelmed by Rising Inflation, Outraged by Unresponsive Government… The situation resulted in protests in several cities, including Tangier and Meknes, among others, over the weekend…
“In souks, vegetables and fruits are untouchable for low-income people and those who do not have an income at all.”
“Nigeria’s naira shortage: Anger and chaos outside banks…
“People here have long been used to the periodic bouts of fuel shortages leading to long lines of cars snaking from the petrol stations. But now long lines of frustrated, confused and angry people have become a common sight outside banks as the country builds up to a presidential election at the end of the month.”
“Fitch Cuts Ghana Local Debt Rating to ‘Restrictive Default’ on Distressed Swap…
“Fitch also affirmed the nation’s foreign currency rating at C, the lowest score before default. Because a Eurobond coupon payment due last month hasn’t been honored, the agency will cut the foreign-currency grade to ‘RD’ after the grace period expires on Feb. 17, according to the statement.”
“Venezuelans say credit cards that were once lifeline now ‘useless’.
“Credit cards are becoming increasingly useless in Venezuela because of high inflation and government restrictions, hurting people already struggling to meet daily needs on low salaries, banking industry sources, analysts and consumers said.”
“Protests return to Bogotá [Colombia] streets as tensions rise over health “reform”…
“As residents of Bogotá face two days of protests, as well as fears that a return to social unrest on the streets of the capital will bring mobility to a standstill, Petro’s call for mobilizations appears to be repeat from his term as Mayor of Bogotá…”
“Peru crisis deepens as agreement on early polls eludes lawmakers.
“Peru’s congress has been unable to set a date for early elections, deepening the political paralysis in the world’s second-biggest copper producer as widespread anti-government protests enter their third month.”
“Argentinians drown in spiralling inflation at nearly 100%.
“Argentina’s inflation rate has hit just shy of 100 percent, the government said on Tuesday, with savers feeling more pain from some of the world’s fastest-rising prices and workers’ budgets straining as costs outstrip salaries.”
“Strong dollar fuels wave of emerging market currency devaluations.
“A recent spate of currency devaluations has highlighted the intense pressure on many emerging economies, as the strength of the US dollar forces them to spend precious foreign reserves supporting their exchange rates.”
“Crypto’s free pass is getting yanked as the most powerful US financial regulators rapidly close key doors to the country’s banking system.
“The increasingly aggressive posture, which has taken shape through public and private actions in the weeks since the collapse of crypto exchange FTX, could push the industry to the fringes of finance.”
“Central banks currencies are coming whether we want them or not. Should you be worried about CBDCs?
“Already, the U.S. is moving forward with tests of CBDCs, the U.K. is hiring a Head of Central Bank Digital Currency and testing out a digital pound, and China has launched its version of CBDCs in the real world.
“We are closer than ever to a world of centralized digital currencies reshaping the financial sector. This raises the question of whether we are entering a new era of financial efficiency or, as critics fear, one of dystopian surveillance.”
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.
So, this will be my last thread until 14th February. Thank you to all my readers for keeping me company on this fascinating journey into uncharted waters, as the global economy starts to lose its battle against entropy, and a special thank you to anyone who has donated or is a subscriber.
“An American hedge fund advised by the economic guru known as “The Black Swan” has warned a debt timebomb risks pushing the global economy into a downturn rivalling the Great Depression.
“Mark Spitznagel, chief investment officer of Miami-based Universa Investments, said levels of borrowing were so high following a decade of low interest rates that they now risked triggering a “contagious inferno” that could envelop the financial system.
““It is objectively the greatest tinderbox-timebomb in financial history – greater than the late 1920s, and likely with similar market consequences,” the 51-year-old told his clients in a letter reported by Bloomberg.”
“A change in financial market conditions could lead to short-term cash stress and trigger forced selling… That could create a “self-reinforcing mechanism”… while almost everyone agrees the shadow banking sector might be an accident waiting to happen, there isn’t a clear or agreed plan for how to stop it.”
“Housing Slump Deepens From US to China in Risk to Global Growth.
“Reports this week have shown the US housing slump stretched into a fifth month, China’s home sales slide continued and price declines persisted in both Australia and New Zealand. Sliding home values threaten to undermine consumer confidence and weigh on household spending…”
“…Since the last global property bubble in 2006-07 and the financial crisis that resulted from it, central banks have held interest rates close to zero. While few have paid attention, this has led to a reflation of many of the same property bubbles that caused the disaster to begin with… risk metrics show the potential for a mass default event rising and rising.”
“An under-the-radar economic indicator is flashing a warning not seen since the 2008 financial crisis…
“According to data from the Fibre Box Association, US cardboard box shipments declined 8.4% in the fourth-quarter, representing the largest quarterly decline since the second quarter of 2009, amid the Great Financial Crisis. Cardboard boxes are an overlooked barometer of the health of the economy…”
“UK falls to lowest-ever position in global corruption index after Boris Johnson’s scandal-hit premiership.
“A survey of perceived corruption in public office places Britain behind Uruguay and Hong Kong amid a warning that scandals and concerns about the use of taxpayers’ money mean ‘slipping standards’ in the UK are being noticed globally.”
“UK Business Groups Warn of ‘Cliff Edge’ as Energy Help Ends.
“Many British businesses face dire risks when the government tightens its energy support package in April, industry groups told a parliamentary committee Tuesday. Hospitality companies could see an average of 85% increase in their power and gas bills from April…”
“German industry to pay 40% more for energy than pre-crisis – study says.
“German industry is set to pay about 40% more for energy in 2023 than in 2021, before the energy crisis triggered by Russia’s invasion of Ukraine, a study by Allianz Trade said on Monday, citing contract expiries and delayed wholesale pricing effects. “The large energy-price shock still lies ahead for European corporates,”said Allianz Trade…”
“Lucky Europe has swerved blackouts – but don’t rejoice just yet…
“We will probably have to live with elevated energy prices for the foreseeable future… governments cannot afford to keep subsidising energy bills on the scale they did last year. In the EU, some governments have spent the equivalent of over 7% of GDP shielding businesses and households from rising energy costs. This is unsustainable.”
“Thousands of care sector workers protest in Brussels.
“Over 10,000 people have protested throughout central Brussels to demand better working conditions and more pay in the care sector which has been especially hard-hit during the Covid-19 pandemic. Trade union activists and workers are demanding that more people be hired…”
“Huge crowds of protesters clashed with riot police in cities across France today in a second day of nationwide protests over Emmanuel Macron’s plan to make people work longer before retirement.
“Hundreds of thousands of striking workers descended onto the streets of French cities – from Paris to Marseille – to denounce a reform that raises the retirement age by two years to 64 in a major test of Macron’s presidency.”
“Spanish inflation at highest in 35 years after state subsidies end.
“Core inflation climbed to 7.5% in Spain, making it the highest figure since December 1986, the national statistics institute INE revealed Monday after VAT was reduced on some foodstuffs and some state subsidies on fuel were removed.”
“Bank of Japan outright bond purchases in January were the highest ever on record.
“Defending Yield Curve Control. Expensive business …and despite all the breathless headline chatter of policy change to come from the Bank of Japan (mea culpa) the BOJ is showing no signs of relenting.”
“Japan Factory Output Inches Down Amid Global Slowdown…
“Among concerns is the global economic slowdown, especially in the US and Europe, caused by continued aggressive policy tightening. International financial organizations have increasingly warned of the risk of a deceleration… a slowdown in China is also a concern.”
“South Korea posts the worst trade deficit in its history.
“South Korea recorded a trade deficit of $47.5 billion for 2022, official data from the customs agency showed. It marked the worst trade deficit since the agency started compiling data in 1956 and far more than the $20.6 billion trade deficit in 1996.”
“China’s debt-based interest payments top a trillion yuan for first time, raising concerns about financial risks.
“Interest payments on local government debt in China exceeded a trillion yuan for the first time last year as Beijing called for enhanced efforts to steady the economy, and analysts say public debt in the world’s second-largest economy could continue to surge to an all-time high in 2023.”
“Chinese cities are struggling to pay their bills as ‘hidden debts’ soar.
“Three years of strict pandemic controls in China and a real estate crash have drained local government coffers, leaving authorities across the country struggling with mountains of debt. The problem has gotten so extreme that some cities are now unable to provide basic services, and the risk of default is rising.”
“Peru Residents Form Long Lines For Gas In Face Of Fuel Shortages.
“Hundreds of people line up along the streets of Poroy village, in the outskirts of Peru’s Cusco city, to buy canisters of gas amid shortages following anti-government road blockades.”
“South Africa’s Energy Crisis Could Spark A Political And Economic Disaster…
“The country faces a “perfect storm of inflation, electricity cuts and corruption accusations that will continue to deteriorate South Africa’s profile and to pose risk for investments in the country,” as Aleix Montana, Africa analyst at risk consultancy Verisk Maplecroft, told CNBC.”
“Protesters block Benin City roads [Nigeria] over fuel price hike, Obaseki promises solution in 24 hours.
“Protesters, made up of Civil Society Organisations and other residents of Edo State, including youths, yesterday, staged a peaceful protest over hike in pump price of fuel. They barricaded strategic locations within the metropolis and marched through Sapele Road to Ring Road, causing gridlock.”
“Saied’s government is now gearing up to implement ravaging new austerity measures the financial institution presented as a prerequisite to sealing the deal. These policies will likely include the complete elimination of food and fuel subsidies, the slashing of public health, education, and social protection spending, and the privatisation of key public companies.”
“Cost of living crisis cuts a cruel swathe through Arab political economies…
“The depreciation of Arab currencies against the dollar is a particular concern for the most vulnerable nations because households that had built up savings prior to the economic downturn have seen the value of their financial reserves plummet and safety nets cut from beneath them.”
“Something Has to Give in Postwar Syria… Thirteen years of constant crisis is heading toward inevitable breakdown…
“…2023 looks almost guaranteed to be a year of potentially game-changing instability, and although developments unique to Turkey, Russia, and Iran are likely to contribute toward significant changes, the most consequential dynamic relates to the economy and specifically the situation inside regime areas.”
“Local demonstrations have returned to the towns and villages of the northern and eastern countryside of Aleppo, protesting the high prices of electricity supply and its frequent interruptions.
“A wave of anger among the people was met with the local councils’ rejection of the electricity companies’ policy…”
“Israel and Palestinians risk deeper conflict in a distracted world…
“With prospects for political progress bleaker than they have been for years and with world powers now distracted by the Ukraine war, violence has steadily been rising. The latest outbreak followed months of confrontations that left 190 Palestinians dead, according to United Nations figures…”
“Turkey’s advances across the increasingly depopulated border of Iraqi Kurdistan attract little global attention compared to its incursions into Syria or the battle against Islamic State, but the escalation risks further destabilising a region where foreign powers have intervened with impunity, analysts say.”
“Death toll from suicide bombing at mosque in Pakistan climbs to 100.
“At least 225 people were injured in Monday’s attack, which took place as more than 300 worshippers were gathered inside the mosque. Most of those killed or injured were police officers… The mosque is located inside a compound that also includes the city’s police headquarters.”
“Pakistan braces for fuel shortages amid liquidity crisis.
“Pakistan could face a crunch in fuel supplies in February as banks have stopped financing and facilitating payments for imports due to depleting foreign exchange reserves, traders and industry sources said. The South Asian nation is facing a balance of payments crisis…”
“Sri Lanka Is Calm Again. That Doesn’t Mean Things Are Any Better…
“… the island nation’s economy remains on a ventilator, with the government yet to secure a way out of crushing debt. Sri Lankans have become resigned to a sad reality: pared-down meals, shrunken incomes and reduced expectations. Many young people are desperately trying to find a way out of the country.”
You can read the previous “Economic” thread here. I’ll be back on the 14th Feb.
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.
A heads-up that I am away for the first half of Feb, so Wednesday 1st will be my last thread until the 14th – my apologies. We are heading to the mainland for my father’s 80th birthday celebrations and are going to do some of the things we were too ill to do over our ill-fated Christmas break.
A huge thank you to my subscribers and anyone who has donated. In the immortal words of Bette Midler, you are the wind beneath my wings. 😎
“‘Flying with one engine’: why global food supplies are at risk despite falling crop prices… Geopolitical uncertainty, volatile energy markets and climate change all pose a threat…
“Food prices were already elevated before Russia’s full-scale invasion of Ukraine early last year, due to droughts and coronavirus pandemic-related hoarding by governments and businesses…
“…a potential El Niño next quarter . . . could wreak havoc on weather around the world,” said Kona Haque, head of research at commodity trader EDF Man. “Tropical developing countries have the potential to be most hit, with Asia turning drier under El Niño conditions, while South America could see excessive rainfall.”
“Relatively low grain inventory levels have added to analysts’ concerns about global food supplies.
“Oil and gas investment needed for another 30 years, BP warns…
“”“Natural declines in existing production sources mean there needs to be continuing upstream investment in oil and natural gas over the next 30 years,” wrote Spencer Dale, chief economist at BP, in the report… The warning comes as investors increasingly turn their backs on fossil fuels, with close to $40 trillion in global capital committed to divesting from fossil fuel companies.”
“Commodity trade costs surge as industry seeks up to $500bn in extra finance.
“High interest rates, volatile prices and the war in Ukraine have made it significantly more expensive to finance commodity trade… Changing trade patterns have made the global flow of raw materials less efficient and more costly to finance and are also likely to push up the price of commodities for consumers, according to a new study by consultancy McKinsey.”
“Central banks prepare to lift interest rates to 15-year highs as investor jitters grow.
“The world’s leading central banks are poised to raise interest rates this week to their highest levels since the financial crisis, stoking anxiety among some investors that this month’s record bond market rally underestimates the growing evidence of persistent inflation.”
“US trade shifts on Covid and China tensions, but no ‘decoupling’ yet…
“While security concerns have escalated and US imports from China fell after Washington and Beijing imposed tit-for-tat tariffs, trade has since climbed again. The numbers could rise further when 2022 trade data is released next month, pointing to how interlaced the world’s two biggest economies are.”
“A top Republican in the United States Congress says the odds of conflict with China over Taiwan “are very high” after a US general caused consternation with a memo suggesting war would happen in two years’ time.
“In a memo dated February 1 but released on Friday, General Mike Minihan, who heads the Air Mobility Command, wrote to the leadership of its roughly 110,000 members saying: “My gut tells me we will fight in 2025.””
“Americans are going ‘recession brunette’ as economic woes force cutbacks on luxuries like hair-coloring.
“While an outright recession still hasn’t come, Americans are feeling the impacts of a slowing economy in their wallets. Inflation is still high, albeit cooling, but savings are dwindling, thousands of Americans are getting laid-off, and credit card debt is climbing.”
“The Bank of England is set to raise rates again and we could still face a 2008 crunch…
“The illiquidity of markets is something we all need to deal with. We are probably at a point over the next few months where we are going to find out the outcome of this. Using fixed income terminology, we are probably at the point of maximum convexity. This means we are in an unstable equilibrium. Something must happen.”
“London £4 trillion stock market sees profit warnings hit financial crisis levels…
“Against a backdrop of skyrocketing energy prices and slowing demand amid cost of living crisis, businesses have had to tell shareholders to brace for profits to come in under forecasts some 305 times over the last year, a 50 per cent increase from the 203 profit warnings issued in 2021…”
“Frankfurt, Germany: Germany’s economy unexpectedly shrank at the end of 2022 due to the fallout from the war in Ukraine, official data showed Monday, even as hopes grow an energy crisis is easing.
“Europe’s top economy contracted 0.2 percent in the October to December period compared to the previous quarter, according to preliminary figures from statistics authority Destatis.”
“Hungary’s soaring inflation puts squeeze on Viktor Orbán
“With long queues at petrol pumps, teachers blocking Budapest streets in a strike over pay and small-business owners demonstrating against tax rises, Hungary’s economic woes and the resulting public anger have wrongfooted rightwing prime minister Viktor Orbán and threaten to escalate his dispute with Brussels over frozen funding.”
“Historic Crash for Memory Chips Threatens to Wipe Out Earnings…
“The unprecedented crisis isn’t just wiping out cash at industry leaders SK Hynix Inc. and Micron Technology Inc., but also destabilizing their suppliers, denting Asian economies that rely on tech exports, and forcing the few remaining memory players to form alliances or even consider mergers.”
“Taiwan’s export orders likely contracted again in December and at a faster clip than the previous month, a Reuters poll showed on Monday…
“The median forecast from a poll of 13 economists was for export orders to fall by 25.6% from a year earlier… Taiwan’s export orders, a bellwether of global technology demand, fell by a worse-than-expected 23.4% in November.”
“China’s 2022 smartphone shipments the lowest in 10 years, research firm says…
“The total number of devices shipped was 286 million, down from 329 million in 2022. That meant total 2022 sales volume was the lowest since 2013 and the first time since then that annual sales have dropped below 300 million, IDC said in a report.”
“The collateral damage ranges from complications in paying Russian companies on which Oyun-Erdene says Mongolia is “wholly dependent” for fuel, to the loss of revenues from airlines that once flew over the country.”
“Pakistan lifts petrol, diesel prices by 35 rupees a litre.
“Pakistan’s ministry of finance announced on Sunday petrol and diesel prices would rise by 35 rupees ($0.1400) a litre after the country’s currency value plummeted this week when price caps were removed. The decision came days before an International Monetary Fund mission will visit Pakistan…”
“Iran: Nationwide uprising marks 135 days; People protest severe gas shortages.
“Locals in Tehran’s numerous neighbourhoods, including Sadeghiyeh and Tehranpars, started singing anti-regime chants on Friday night that were directed primarily against Khamenei and the whole mullah system”
“Drones target Iranian weapons factory in central city of Isfahan…
“There was no immediate confirmation about who was responsible, but the attacks appear to fit a pattern of strikes against strategic sites across Iran that have been attributed to Israel in recent years. A fire erupted at a fuel refinery in the north-west of Iran at about the same time…”
“Tens of thousands of Israelis have protested across the country against the right-wing government for the fourth consecutive week.
“The latest rally was held on Saturday, with demonstrators carrying Israeli flags on Kaplan Street in Tel Aviv chanting “No to dictatorship” and “Democracy”.”
“UN agency warns of record rates of hunger in Syria…
““Hunger soars to 12-year high in Syria,” as 70 percent of the population might soon be “unable to put food on the table for their families,” the statement said. “Syria now has the sixth highest number of food insecure people in the world,” the WFP added, with food prices increasing nearly 12-fold in three years.”
“How IMF loans keep Sisi afloat as Egypt sinks deeper into debt.
“Egypt has agreed three bailouts with the IMF under the government of President Abdel Fattah el-Sisi, in office since 2014. It is currently the second biggest borrower from the IMF after Argentina. The IMF deals came against the backdrop of a shortage in foreign currency and skyrocketing debts.”
“Moody’s cut Tunisia’s long-term foreign-currency and local-currency issuer ratings to Caa2 from Caa1 and changed the outlook to negative, the New York-based ratings agency said in a statement on Saturday. Caa ratings are judged to be of poor standing and are subject to very high credit risk.”
“As spiraling economic crisis drags on, Sudanese tighten belts…
“”We are trying to find cheaper alternatives to the food we normally consume,” said Soaad Bashir, a government employee and mother of four. “My income is meager, and expenses are too high,” said the 43-year-old who makes less than 200,000 Sudanese pounds per month.”
“[Nigerian] Petrol consumers have continued to groan under the burden of skyrocketing prices, as Premium Motor Spirit almost hit N400 per litre over the weekend…
“President Buhari had last week set up a 14-man committee that he would be heading to proffer solutions to the lingering fuel scarcity.”
“Nigeria cost-of-living crisis sparks exodus of doctors…
“”Imagine going to the grocery store one day, and everything has tripled in price? How do you even cope? You have a family at home. What do you cut out of the budget?” Oroma Cookey Gam tells me by Zoom, her face incredulous.”
“Ghana Set for World’s Biggest Rate Hike So Far This Year…
““We expect the Bank of Ghana to hike its policy rate by 200 basis points from 27% to 29% at its January meeting, following 250-basis point hikes at the two prior meetings,” Bojosi Morule and Andrew Matheny, economists at Goldman Sachs Group Inc., said in an emailed response to questions.”
“Haiti in turmoil as police riot over officer deaths.
“The Haitian government is under mounting pressure amid violent protests by police, who have accused acting Prime Minister Ariel Henry of inaction. The UN is considering sending troops to stabilize the nation in crisis.”
“1 killed in fresh clashes as Peru unrest toll rises to 65.
“One person was killed as hundreds of anti-government protesters clashed with the Peruvian police on Saturday in Downtown Lima amid an ongoing nationwide unrest that has roiled the South American country for weeks. “We regret the death of Víctor Santisteban Yacsavilca in today’s violent demonstrations,” Peru’s ombudsman tweeted.”
“China’s MMG flags production halt at Las Bambas in Peru due to protests…
“Peru, the world’s second-largest copper producer, has been gripped by growing unrest following weeks of sometimes violent anti-government protests triggered by the ouster of the country’s former president last month.”
“Mining giant ‘sorry’ over lost radioactive capsule in Australia.
“Mining giant Rio Tinto says it is working with authorities to try to find a radioactive capsule that went missing in Western Australia this month. “We recognise this is clearly very concerning and are sorry for the alarm it has caused,” the firm told the BBC.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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“With the inundation of so much depressing news, Justin Panopticon presents it in a succinct format that one can quickly go thru and see the big picture of climate and economics/politics to stay current and if a particle topic is of interest one can delve into the details… I try never to miss any of his posts…I am a Patreon of his work.”
– Karina S.
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About This Site
Weekday updates on both climate change and the global economy. Stay current with what’s happening around the world with a quick scan of top news.
“Biden and Putin both implicitly tie their futures to the outcome in Ukraine.
“Putin suspends nuclear pact, Biden says support for Ukraine ‘will not waver’…
“War in Ukraine defining new world order, says thinktank [looks more like a pre-collapse phase of splintering and fragmentation than the rising of a new order to me].
“QE has become ‘Hotel California’ for central banks… While commercial lenders change behaviour when the balance sheet expands, they do not change it back when it shrinks…
“Money supply numbers have been sending important signals before and during the pandemic…
“U.S. existing home sales slowed for the 12th consecutive month in January as high mortgage rates, surging inflation and steep home prices sapped consumer demand from the housing market.
“UK House prices are the most expensive they’ve been for almost 150 years relative to average earnings, a new study has revealed.
“Leveraged Real Estate in Europe Faces Its Reckoning.
“Germany’s GDP is expected to decrease for the second quarter in a row, meaning the country is officially in a recession, according to predictions from the country’s central bank.
“Among the challenges facing French wine producers right now is finding enough glass to bottle their 2022 vintage – and it’s becoming so bad that some want the government to step in…
“Shares in beleaguered lender Credit Suisse plunged to record lows today after it was revealed that chair Axel Lehmann is under investigation by Swiss regulators over potentially misleading claims he made to the media last year.
“Australia’s politicians and Reserve Bank officials have obfuscated the extent of the economic challenges ahead.
“A Queensland house builder is the latest construction company to go into liquidation as the industry is plunged into even deeper crisis.
“New Zealand hikes rates to over 14-year highs, flags more to come; kiwi rallies.
“Japan manufacturers gloomy as global slowdown hurts.
“If you thought it was about time global semiconductor demand bottomed out, you may want to think again by looking at South Korea’s latest chip exports.
“North Korea’s official newspaper has urged economic self-reliance amid reports of food shortages, arguing that relying on external aid to cope with the food situation would be like taking “poisoned candy”.
“China’s Coal Mining Boom Is Running on Fumes…
“India is invoking an emergency rule that will force some of the country’s biggest coal power plants to operate at full capacity, as the nation prepares to meet surging electricity demand and avoid blackouts.
“Gas shortage exposes fragile South Asian economies to more pain…
“Sri Lankan police disperse protesters demanding election… Sri Lankan police fired tear gas and a water cannon at opposition supporters…
“Imran Khan plans mass protests as Pakistan races to secure IMF deal.
“Iran rations euros as fights break out at foreign-exchange offices amid rial’s plunge to record lows…
“Mass protests as Israel moves ahead with judicial ‘reform’…
“Sudanese demonstrators take to the streets to protest military rule.
“Tens of thousands of refugees flee from Somaliland clashes.
“Patients dying as Nigerian cash crisis hits health services before election.
“South Africa Quietly Deepens Power Cuts to Unprecedented Level.
“Financial sector plans for grid collapse.
“Protesters storm parliament in Suriname, dozens arrested and injured…
“These countries have been the hardest hit by food price inflation.
“Oil falls on worries interest rates will rise more and curb fuel demand.
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