Daily updates on climate change and the global economy.

15th December 2022 Today’s Round-Up of Economic News

The return of global catastrophe: Seven great crises and the one that’s coming.

The only question is: where will be the flashpoints that spark an all-round global crisis? There are many candidates…. it is safe to say that, if this pattern holds, sometime between now and the 2030s there is an odds-on likelihood that there will be a cataclysmic world crisis.

“Many would say that since 2020, it feels as if we have entered a period of prolonged, intense crisis, although what we may be actually living through is the accumulation of conditions that are the precursors to a full-blown global upheaval.”


The great disruption has only just begun… History has shown that stability is, more often, the exception…

““As far as recent decades go, this sense of disorientation is new,” says Adam Tooze, a fellow FT columnist… In a recent column he revived an old buzzword, “polycrisis”, to capture the current sensation of multiple cascading shocks. This disruption is not the frothy creative destruction championed during the unicorn start-up era. This disruption is bad.”


U.N. body says slowdown in global trade to worsen in 2023.

“The ongoing slowdown in global trade is expected to worsen in 2023, the U.N. Conference on Trade and Development (UNCTAD) said on Tuesday. “While the outlook for global trade remains uncertain, negative factors appear to outweigh positive trends,” UNCTAD said in a trade update.”


Global Debt Market Lost at Least $75 Billion of Business in 2022… Borrowers shelve financing plans amid war, inflation concerns… More debt financing was cancelled or postponed globally in 2022 than even during the tumultuous pandemic period.”


Global Recession in Focus as Central Banks Set to Moderate Rate Hikes This Week.

“Some investors and economists see a ray of hope in the current market rallies, but a persistent yield curve inversion is stubbornly warning that a recession is on the way. Recessions come in many forms, and the best many hope for is a soft landing with just a mild downturn and a minor increase in unemployment.”


US Fed hikes interest rates by 0.5 percent, says more to come…

“Taken together, today’s statement and economic projections tell a simple, but persuasive story: this Fed isn’t prepared to ‘pivot’ in any meaningful way until it sees sustained and conclusive evidence of a reversal in inflationary pressures,” said Karl Schamotta, chief market strategist at Corpay.”


Bank of England readies another rate hike even as recession hits.

“A ninth interest rate hike in a row by the Bank of England looks to be a foregone conclusion on Thursday and investors will be looking for clues on how many more will be needed with the economy sliding into recession but inflation still above 10%.”


Business insolvencies skyrocket [up by over a fifth] in November across England and Wales as firms are grapple with ‘cost-wary’ consumers and high inflation…

“”‘We are seeing an increasing number of worried directors who are struggling to keep their businesses afloat.’ ‘These are good companies but facing serious and continuing increases in energy costs, wage demands and interest rates.'”


UK strikes intensify with walkouts by postal and rail workers…

“Consumers have been warned to prepare for late deliveries of Christmas presents amid action by postal workers, while commuters are struggling with travel misery owing to strikes by rail employees. On Thursday, the first nationwide strike by NHS nurses organised by the Royal College of Nursing is due to go ahead…”


The majority of [UK] hospitals are not protected by the Government’s emergency power plan, The Telegraph has learned.

“Just 15 per cent of hospitals across the country are on the official “protected sites” list, meaning they would qualify for power during a national electricity shortage.”


Germany plans record debt issuance in 2023 as energy crisis bites.

“Germany plans record debt issuance of more than 500 billion euros ($533 billion) next year to fund costs associated with the energy crisis and the fallout from the COVID-19 pandemic, German Finance Agency issuance plans published on Wednesday showed.”


Rain and Blackouts Strand Third of Ukraine’s Corn Crop in Fields.

“Growers have been hit by a series of hurdles: Record autumn rainfall muddied fields. The war has depressed how much farmers can fetch for their goods. And strikes on the country’s infrastructure limited electricity needed to dry soggy grain.”


Russia’s wartime economy: learning to live without imports.

“Rather than provoking a dramatic collapse, international sanctions are causing a steady degradation of the country’s productive capacity… “Life will be simpler and there’ll be less money. People will make do with less. There will be more paper in the sausage,” says a Russian oligarch who is under sanctions.”


China’s Covid Pivot Set to Worsen the Global Energy Crunch.

“China’s pivot away from Covid Zero is poised to boost natural gas demand in the world’s biggest importer, potentially curbing supply to Europe and other Asian nations. China National Offshore Oil Corp. is now looking to secure more shipments of the super-chilled fuel for next year.”


China’s economy faces ‘greater challenges’ in 2023 as risk of global recession, debt crises grows…

“While China has been affected by aggressive rate hikes in the West, its economy has suffered more from rigid coronavirus controls, such as lockdowns… Though the government made a sudden about face last week, the economy is in for a bumpy road as zero-Covid comes to an end.”


India is covering up the true extent of border clashes with China to avoid panicking the public, senior Indian Army sources have told The Telegraph.

“Several incidents are taking place in the northern state of Arunachal Pradesh every month, the sources said, with soldiers from the two nuclear-armed countries sometimes engaging in violent hand-to-hand combat, often using clubs and other homemade melee weapons.”


Mongolia unrest looking eerily like a color revolution…

“Mongolia presents a combustible mix where all the key elements of the United States’ confrontation with Russia and China are present, ranging from the North Atlantic Treaty Organization’s mission creep to the Asia-Pacific to the BRI and Russia’s energy exports and of course the vast deposits of rare earths in the steppe.”


Tajikistan: Families freeze while energy independence chimera remains ever distant…

“President Emomali Rahmon informed the public that they should expect yet another winter of power rationing on October 24 in the town of Nurek, site of the Soviet-era power plant that still provides the country with most of its electricity.”


Blackouts in Karachi! Amid acute crisis, Pakistan’s economic hub gets 2-hr gas supply daily.

“Pakistan‘s economic hub Karachi is facing an acute gas crisis… The Sui Southern Gas Company (SSGC) announced that domestic consumers would get gas supply only for eight hours a day — morning, afternoon, and evening — during “meal timing”.”


Turkey Prints its Highest-Value Banknote at Record Rate Amid Runaway Inflation.

“Turkey is printing its highest-denominated banknote at the fastest rate on record, flooding the country with cash as inflation of over 80% forces consumers and businesses to pay more for less. The number of 200 lira ($10.73) notes in circulation almost doubled year on year in November…”


Jordan truckers strike over costly fuel, some shops shut in solidarity…

“Truck drivers have launched partial work stoppages and sit-ins over the last week, mainly in Jordan’s impoverished southern provinces, to demand that the government reduce diesel prices, saying mounting costs have led to losses for their businesses.”


As elections approach, Tunisian market shelves are still bare…

“President Kais Saied has previously blamed speculators for the food shortages, but his opponents say he is to blame for failing to revive the country’s economy, ahead of parliamentary elections on Saturday. Most of the opposition will be boycotting, saying the vote is illegitimate.”


Chief executive of South Africa’s Eskom quits as blackouts surge.

“The chief executive of South Africa’s struggling state power monopoly has resigned as the country suffers its worst ever blackouts, throwing into doubt efforts by President Cyril Ramaphosa to fix the collapsing energy supply.”


Peru declares nationwide state of emergency as crisis deepens…

“Peruvian defence minister Alberto Otarola announced the new 30-day measure on Wednesday, which he said involved “the suspension of freedom of movement and assembly” and could include a curfew due to “acts of vandalism and violence”, including roadblocks.”


Petrol stations quiet on Rarotonga as petrol runs out.

“The Cook Islands has run out of petrol.

“The next confirmed shipment of petrol is not due to arrive in Rarotonga until Sunday, leaving providers struggling with lack of supply.”


Bangladesh arrests head of largest Muslim party amid crackdown.

“The leader of Jamaat-e-Islami (Bangladesh Islamic Assembly), Bangladesh’s largest Muslim party, has been arrested days after he announced the party would join opposition-led protests demanding the resignation of Prime Minister Sheikh Hasina.”


Sri Lanka’s Recession Likely Deepened Amid High Rates, Inflation…

“Sri Lanka, which is weathering its worst economic meltdown in decades, tried to forestall further deterioration in the quarter, even as protests and fuel shortages ground activity to a halt. Authorities pledged to implement strong fiscal and reform measures to lock-down an initial bailout deal from the International Monetary Fund.”


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.

12th December 2022 Today’s Round-Up of Economic News

NB: Tomorrow’s climate thread will be a bit later in the day than usual, as I must whisk the car off to the mechanic first thing to get its squeaky brakes attended to (I hope you are enjoying these riveting vignettes of my domestic life btw; it’s a thrill a minute!).

As the reality of recession sinks in, prepare for markets to crash.

“Until now, it seemed there were two parallel economic universes – a “real” one where people suffered from soaring inflation, food and supply shortages or even war, and a “virtual” one where financial markets envisaged a rapid return to rosy normality. Now, the virtual one is about to explode.

We are likely to be entering what could be called stage two of the “great unravelling”, when a bear market in stocks and a cooling in real estate values turn into a major collapse in asset prices as the reality of economic recession starts to sink in.


Container market collapse sees first ships heading for scrap…

““The market collapse is clearly continuing to intensify” Sea-Intelligence noted in its most recent weekly report, published yesterday. “New demand data shows a market in a full state of collapse, driven by a strong desire amongst importers to reduce their inventory exposure,” analysts at the Copenhagen outfit wrote.”


British Factories Brace for Two Straight Years of Recession…

Deteriorating economic conditions both in the UK and abroad are imposing a “vice-like grip” on factories, industry body Make UK said Monday. Its outlook, based on a survey conducted with accountancy firm BDO LLP, showed a 4.4% contraction this year and 3.2% drop next year.”


Stress over cost of living crisis harming workers’ performance, survey finds.

“Workers in the UK are becoming so anxious about the cost of living crisis that it is affecting their performance at work, with two-thirds of managers reporting issues such as rising absenteeism and lack of engagement among stressed-out staff.”


Power prices have surged to a record high [UK] as the cold snap and a lack of wind prompts a scramble for electricity among suppliers.

“Day ahead UK power prices jumped to an all-time high of £675 a megawatt hour on Epex Spot Exchange on Sunday as snow and sub-zero temperatures swept across Britain. The cost of power at the peak hours of 5pm-6pm soared to a record £2,586 a megawatt-hour.”


Get the watermelons in and start drinking beer if water supplies fail in national power outage, crisis planners advise.

“Brits should eat watermelons if water supplies fail during a national power outage, crisis planners have said. The advice was given in a document leaked to The Sun about Project Yarrow, the Government’s analysis of how we might react to a water shortage or power cut.”


Swedish Premier Warns of Power Crisis as Key Reactor Shuts.

“Sweden’s power crisis is getting worse, with an outage at its biggest nuclear reactor exposing the nation to the real risk of disconnections, Swedish Prime Minister Ulf Kristersson said… “The situation is relatively acute, we don’t want to create panic but it is a serious problem and there are significant risks,” Kristersson told journalists Friday.”


‘Don’t take the lift’: French alarm rises over risk of winter power cuts…

“Right now [the goverment’s messaging is] just raising a lot of questions and causing more panic than the opposite,” said Florence Compte, the headmistress of a primary school in the southern Var region, after hearing classrooms in areas hit by short, targeted cuts would have to shut for the morning, as they would be unheated and unlit.”


Chaos erupts in Paris as French and Moroccan fans hold World Cup celebrations – video…

“Footage showed people smashing shop fronts and fights with police. Some fires could also be seen on Avenue de Friedland close to the Champs-Élysées. Celebrations continued despite tear gas clouds frequently floating through traffic and euphoric crowds.”


Eurozone central bank losses risk bailouts and more political pressure…

“Central banks across the euro area will have to pay about €70bn of interest on the deposits of commercial banks next year… The scale of the payout on deposits will drag many eurozone central banks into the red.”


Countries across Europe are reporting shortages of antibiotics as demand for the medicines rises and manufacturers grapple with supply-chain snags.

“Amoxicillin, cephalosporins and other widely used antibiotics are in short supply, data from various countries show, raising concerns among doctors and officials about the availability of drugs that are relied on to treat conditions ranging from ear infections to pneumonia.”


Serbian President Aleksandar Vučić has met his national security council as tensions rise in Kosovo between the authorities there and ethnic Serbs.

“On Saturday a stun grenade was thrown at EU police in north Kosovo, where Serbs form a majority, and local police exchanged fire with unknown groups… Serbia refuses to recognise Kosovo as an independent state.”


Tokyo’s Broken Bond Market Needs More Than BOJ Tweaks to Heal…

““The bond market is very vulnerable now,” said Nobuyasu Atago, chief economist at Ichiyoshi Securities Co. “The BOJ’s large-scale bond buying is hurting market functioning and the risk of a surge in yields is rising. The chance of a policy change to address the issues will only grow as time elapses.””


How a $144 Million Property Default Started Korea’s Credit Crunch.

“Gobal central bankers are in a race against the clock to to tame runaway inflation. But push too far, too fast, and markets key to the smooth functioning of the financial system are liable to buckle… That’s just what happened recently in South Korea…”


N. Korea tightens discipline as economic crisis deepens…

“In an attempt to boost morale among North Koreans amid the growing economic crisis, Pyongyang on Sunday announced that a brigade of young North Koreans had climbed and toured Paektusan — a mountain on the North Korea-China border that is considered sacred.”


China, the world’s largest buyer of crude, has opened the door to trading crude oil and natural gas in its local currency, rather than the US dollar, although it’s not clear a change would happen anytime soon…

“China’s president Xi Jinping mentioned on his trip to Riyadh last week that the Shanghai Petroleum and Natural Gas Exchange would be “fully utilized in RMB settlement in oil and gas trade.””


Iranian currency falls to record low against dollar amid anti-government protests.

“Iran’s currency fell to a record low against the dollar on Sunday, with nationwide anti-government protests now in their third month. A breakdown in negotiations to restore Tehran’s nuclear deal has also hurt the value of the rial.”


Pakistan-Afghanistan Border Clashes Kill 7, Injure 31…

“Sunday’s clashes erupted when Pakistani troops were trying to repair a portion of the border fence on their side, but Taliban forces objected to the effort and subsequent attempts to find a negotiated settlement to the standoff failed, local officials and residents reported.”


Power cuts in -30C spark anger in Kazakhstan.

“The plight of a city in Kazakhstan left without heating for over a week in temperatures that dropped to minus 30 degrees Celsius (minus 22 degrees Fahrenheit) has sparked anger and highlighted the deplorable state of the country’s Soviet-era infrastructure.”


Bangladesh on razor’s edge: Why India must wake up to the looming economic crisis and political instability to its east.

“For the first time since 2009, Sheikh Hasina is on the back foot and a Sri Lanka-level macro-economic breakdown is a possibility. There is a dire need for calibrated behind-the-scenes intervention by regional powers, especially India.”


State of emergency imposed in Peru unrest areas after 2 die in protests…

“Protests calling for an early general election and for Boluarte’s resignation erupted around the country after she was sworn in last Wednesday. She had been deputy to Pedro Castillo, who earlier that day was removed from office after he announced he would dissolve Congress and install an emergency government ahead of an impeachment vote.”


Kidnappings, barricades, missiles and tyre fires: this is my life in Haiti…

“Protests in Haiti mean barricaded streets, burning tyres at every corner, people pelting your car with rocks or even dragging you out and torching your vehicle. Port-au-Prince is full to the brim with frustrated young people out of work.”


Tunisians protest against Saied ahead of parliamentary elections…

“Many Tunisians are far more focused on a growing economic crisis and threats to public finances that have caused salary delays and the risk of shortages of key subsidised goods.”


How private creditors’ financing compounds Nigeria’s debt crisis…

“It has been identified that because government is no longer credit worthy to take concessional loans with cheaper rates from multilateral and bilateral groups, governments at state and federal levels are now relying on commercial loans with much higher interest rates.


‘Everything increasing except wages’: Inflation batters Ethiopia…

“”Groceries, food, rent, all prices have gone up,” said Zerihun, a 30-year-old father of two working at the sprawling Merkato market in the capital Addis Ababa. “Because of the cost of living, life is very difficult … life has become expensive,” said his colleague Sintayeh Tadelle…”


Crisis as suburbs go for 7 days without water.

Bulawayo [Zimbabwe] has been hit by a serious water crisis with most suburbs going for more than a week without running water amid fears of a disease outbreak… due to water supply interruptions emanating from persistent power outages that have seen council failing to pump enough water from its supply dams into reservoirs.”


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.

9th December 2022 Today’s Round-Up of Economic News

I hope I’m not wreaking havoc with readers’ OCD by putting out an economic thread on a Friday. I’ll be back tomorrow with a “climate” thread and, if it’s any consolation, round 2 at the dentist on Wednesday means I’ll probably be switching things back next week.

And, while I have your attention, a huge thank you again to anyone who is subscribing or has donated. The wolf is ever at my door, and it really does help.

Economic Anger Dominated Global Protests in 2022.

Rising citizen anger about economic problems, especially surging inflation, drove anti-government protests to a new high in 2022. Data from the Carnegie Endowment’s Global Protest Tracker shows that the number of economic protests—especially those relating to inflation—soared compared to previous years.

“While many of the largest economic demonstrations took place in Europe, including in Belgium, France, Germany, and Spain, protests erupted in nearly every region of the world.


Oil prices slump as receding price-cap threat unmasks worsening demand…

The explosive cyclical upswing in both the economy and oil that began after the first wave of the coronavirus and lockdowns in the second quarter of 2020 appears to have peaked in the second quarter of 2022. Since then, most indicators have pointed to decelerating economic growth and oil consumption, with outright declines in some regions.


Global Shipping Outlook Worsens on Lower Container Freight Rates.

“Container freight rates fell as supply-chain pressures eased, meaning that profits of container shipping operators will be much weaker in 2023 than in the past three years. The main risks for the segment include a potential harsher-than-expected recession and the continuation of pandemic-related lockdowns in China, leading to further weakness in demand and manufacturing.”


Global Sector Data Reveal Broadening Slowdown With Financial Services Leading The Downturn. Majority of global sectors in contraction:

“The latest JPMorgan Global Composite PMI… revealed that the global economic downturn accelerated midway into the final quarter of the year. Furthermore, the contraction in the output cut through both manufacturing and service sectors, with both manufacturing and services now having failed to register any growth over the past four months.”


The hidden risks in the financial system are bubbling to the surface.

As the years of cheap money come to an end and credit bubbles deflate, financial dislocations are all but assured. We’ve already felt the pre-tremors in the UK pension and cryptocurrency markets… Like frogs in ever-hotter water, we became inured to the slow but steady rise in these [debt/GDP] ratios because interest rates remained so low…”


Global regulator calls for ‘urgent action’ on clearing houses and insurers.

“The world’s most powerful group of global financial policymakers has called for “urgent work” to address gaping holes in regimes to deal with failing clearing houses and insurers whose operations stretch across borders… After a decade of low interest rates, global markets have been jolted…


Yield Curve Inverts To Depths Not Seen Since 1980s, Raising Recession Fears.

“After trending lower throughout 2022, the yield curve is now deeply inverted. The 10-year U.S. Treasury yield less the 2-year yield now stands at levels not seen since the 1980s. This is a concern because this is a well-regarded indicator of a coming U.S. recession. The yield curve has a strong track-record in predicting recessions with very few false positives over recent decades.”


Bank of Canada raises rates again…

“In total, the central bank has raised its key rate 400bp this year. The council’s press statement said it “will be considering whether the policy interest rate needs to rise further to bring supply and demand back into balance and return inflation to target”.”


Swedish House Prices Drop Again as Market Woes Deepen.

“Swedish property prices deepened their decline in November, offering no respite for home owners as higher interest rates weaken a market that’s already among the worst performing among developed nations this year.”


Five Charts Show UK Housing Headed for Biggest Drop Since 2008.

“Britain’s housing market is headed for its worst slump since the global financial crisis more than a decade ago after a surge in mortgage interest rates added to the woes of buyers struggling with a cost-of-living crisis.”


Mortgage lending rules look set to be relaxed as part of the biggest shake-up of UK banking regulation for more than 30 years…

“…there will undoubtedly be opposition to the planned changes, with critics pointing to the lessons of the financial crisis. The plans to ease regulations on financial services are being described as a second “Big Bang” – a reference to the deregulation of financial services by Margaret Thatcher’s government in 1986.”


UK funds set for first year of net outflows in over a decade.

“Uncertainty has gripped the market in a climate of rising interest rates, high financial asset prices, inflation and recession. Even in 2008, net retail sales were a positive £4.8bn. Net sales were £43.6bn last year.”


‘I feel stuck and hopeless’: Britain’s cost of living crisis morphs into a health emergency…

“Doctors and charities have sounded alarm bells over a mental health crisis triggered by soaring inflation and household bills. Mind, the mental health charity, has recorded a 40pc increase in the number of calls to its helpline in relation to financial worries since last summer, including debt and unemployment.”


First UK coal mine in 30 years gets government go-ahead.

“The £165mn mine, which will provide coking coal for use in the steel industry rather than for burning in power stations, is expected to employ 500 people. The government said the approval had been recommended by the independent planning inspector.”


Germany Warned by Regulator That It Must Save More Gas.

“Too little is being saved and “this should not continue,” Klaus Mueller, president of the Federal Network Agency, said in a tweet on Thursday. Consumption in the week that ended Sunday was down 13% from the four-year average and 14% higher than the previous week. That’s well short of meeting a target to cut usage by at least 20%…”


EU Proposes Stricter Rules On Derivatives As Energy Firms Face Liquidity Issues.

“The European Commission proposed on Wednesday stricter rules on the EU commodity derivatives markets, after the spike in prices led to liquidity issues at some energy companies using the derivatives markets to hedge future sales.”


Hungarians storm Slovak gas stations amid fuel crisis.

“Southern Slovak gas stations were flooded with Hungarians from border regions this week as Hungary deals with fuel shortages caused by the government’s price cap… Hungary’s fuel supply situation is “critical” as demand has soared and panic-buying has started, which led to shortages, Hungarian energy giant MOL said on Tuesday.”


Albanese asks [Australian] states to cut coal price in half to tackle energy crisis.

“The federal government is scrambling to close a deal on the energy crisis after asking the states to cap the price of coal at $125 per tonne – less than half the market rate – in a move that has escalated claims for billions of dollars in compensation across the energy sector.”


New Zealand Has Started Rationing Jet Fuel To Airlines [due to bad imported batch]…

“New Zealand is wholly reliant on imported jet fuel, with RNZ noting that the Marsden Point refinery ceased producing its own fuel in April this year. As such, the facility is now used solely to handle imported jet fuel shipments, where checks are made before it is forwarded to airports for use in powering commercial aircraft.”


China’s debt ratio hits record high at 3 times GDP.

“China’s debt as a percentage of its economy hit a fresh high at the end of June, with local authorities borrowing heavily to underpin an economy weighed down by the central government’s zero-COVID policy. Credit to the nonfinancial sector came to $51.87 trillion, or 295% of gross domestic product…”


Risk of miscalculation with Chinese warships highest it has ever been, expert warns.

“With so many foreign navies sailing through what they see as international waters near China, the chance of Xi Jinping’s navy firing a misinterpreted warning shot is growing. Meanwhile, China has for the first time fitted its fleet of nuclear-powered submarines with JL-3 missiles…”


Mongolians brave bitter cold to protest ‘coal theft’ corruption.

“Dec 8 (Reuters) – Mongolian protesters gathered in the capital in temperatures well below freezing on Thursday to denounce perceived government corruption for a fifth day, even after the arrests of eight officials suspected of so-called coal theft. Thousands have descended on Ulaanbaatar’s Sukhbaatar square since Sunday…”


Peru president’s power grab recalls country’s dark past.

“Peru’s ousted President Pedro Castillo rose to power 17 months ago as a populist outsider. But he squandered what little popularity he had when he stunned the nation by dissolving Congress in an act of political suicide that recalled some of the darkest days of the nation’s anti-democratic past.”


Chile Inflation Soars Past All Forecasts in Blow to Central Bank…

“Annual inflation sped up to 13.3% in November, above all estimates in a Bloomberg survey that had a 12.9% median forecast. In the month, consumer prices rose 1%, the national statistics institute reported on Wednesday, twice the pace forecast.”


Emerging-Market Debt Is Sliding Into Distress. Just Look at Ghana…

“With debt interest payments eating up more than half of government revenues Ghana has asked the IMF for a $3 billion bailout, proposed a debt restructuring that could involve losses of up to 30% for foreign investors and is planning to barter some of the gold it produces for oil. It represents a sharp reversal in fortune…”


‘Bring your own syringe’: Malawi’s medical supplies shortage at crisis point…

“Patients have been asked to bring in their own syringes while the theatre and labour ward at the main Bwaila maternity hospital in the capital, Lilongwe – has faced temporary closures because “we don’t have equipment/supplies to work with”, according to a notice pasted to a wall. Regular power cuts are also impacting.”


South Africa’s Eskom repeats worst power cut level on record.

“South African state power utility Eskom on Wednesday ramped up scheduled power cuts to “Stage 6″, repeating the worst outage level on record and putting further strain on households and businesses. Stage 6 power cuts require up to 6,000 megawatts to be shed from the national grid and mean at least six hours a day without power for most South Africans.”


Syrians brace for long, cold winter as fuel crisis bites.

“Syria’s economic collapse, triggered by years of conflict, Western sanctions, a currency meltdown and the government’s loss of its northeastern oil producing territories, has been pushing millions of people deeper into poverty every year. With state revenues in freefall, authorities have had to cut back subsidies…”


Two killed in Iraq clashes after activist given prison term.

“…on the streets of Nasiriyah — the regional capital of Dhi Qar province and a flashpoint of anti-government protests — hundreds gathered on Wednesday evening for a second day in a row. The protesters deplored the jail term and also demanded compensation for demonstrators wounded by security forces in late 2019, an AFP correspondent said.”


Iranian security forces are targeting women at anti-regime protests with shotgun fire to their faces, breasts and genitals, according to interviews with medics across the country.

“Doctors and nurses – treating demonstrators in secret to avoid arrest – said they first observed the practice after noticing that women often arrived with different wounds to men…”


Hundreds held in Bangladesh after anti-government clashes…

“At least one person died on Wednesday and scores were injured in the Bangladeshi capital Dhaka as police fired rubber bullets and tear gas at opposition supporters before arresting hundreds, witnesses and police said.”


Sri Lanka’s children go hungry as food prices soar.

“Nitisha cannot play as much as she used to. The three-year-old is losing weight and complains of leg pains and weakness. The doctor’s diagnosis is clear – Nitisha is underfed and malnourished. But the treatment suggested is difficult to come by for her family – wholesome meals.”


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.

6th December 2022 Today’s Round-Up of Economic News

FX swap debt a $80 trillion ‘blind spot’ global regulator says.

“Pension funds and other ‘non-bank’ financial firms have more than $80 trillion of hidden, off-balance sheet dollar debt in FX swaps, the Bank for International Settlements (BIS) said…

“FX swap markets, where for example a Dutch pension fund or Japanese insurer borrows dollars and lends euro or yen before later repaying them, have a history of problems…

“For both non-U.S. banks and non-U.S. ‘non-banks’ such as pension funds, dollar obligations from FX swaps are now double their on-balance sheet dollar debt, it estimated.”


It’s the $65 Trillion in Debt You Can’t Find That’ll Get You…

This debt is not recorded on balance sheets due to accounting conventions for derivatives. These allow banks, pension funds, insurers and so on to book only their net exposure.


Financial instability: the hunt for the next market fracture… central banks are facing a reckoning…

“Soaring inflation is being met by rising interest rates, the slowing of central bank asset purchases and fiscal shocks, all of which are sucking liquidity, the ability to transact without dramatically moving prices, out of markets. Violent, sudden price moves in one market can provoke a vicious loop of margin calls and forced sales of other assets, with unpredictable results.”


Banks in countries such as Ukraine and Turkey face a “very high” risk from restrictions on capital flows, weak international reserves and a high level of foreign currency debt, Moody’s Investors Service said in a report on Monday.

“Belarus, El Salvador, Nigeria, Kyrgyzstan and Tajikistan complete the list of countries also exposed to high levels of dollar deposits, according to the report that covers 39 banking systems in emerging market economies…”


World Growth Forecasts Cut Again as Inflation Fight Intensifies.

“World GDP forecasts for 2023 have been revised down again as central banks intensify their fight against inflation and the outlook for China’s property market deteriorates, says Fitch Ratings in its latest report published today. Fitch now expects world GDP to grow by 1.4% in 2023, revised down from 1.7% [again, sub-2.5% or thereabouts = recession for the global economy as a totality].”


The West’s oil war with Russia gets real… On Monday, a ban on the import of seaborne Russian crude oil comes into force…

“Even if the world gets through the coming weeks without major volatility on oil markets, the EU’s next big sanctions blast could deliver a significant shock — both for Europe’s energy supply and for global prices. The EU ban on “refined petroleum products [diesel!]” from Russia, coming into force on February 5, 2023, is “the most important one…””


Oil tanker jam forms off Turkey after start of Russian oil cap; Vessels mass in Turkish waters after Ankara demands confirmation of insurance cover…

“Russia has assembled a so-called “shadow fleet” of more than 100 tankers to try to circumvent western restrictions on its oil exports, which may operate either without insurance or from providers outside the west.”


Container shipping rates still sinking, no sign yet of market floor.

““This cliff that rates have fallen from shows there is more competition in the market than a lot of people had feared,” said Patrik Berglund, CEO of rate-tracking company Xeneta… Lars Jensen, CEO of consultancy Vespucci Maritime, commented on recent spot-rate action in an online post: “We are coming out of the tunnel, only to discover that the bridge we are driving onto has collapsed.”


Manufacturing orders from China down 40% in unrelenting demand collapse.

“U.S. manufacturing orders in China are down 40 percent, according to the latest CNBC Supply Chain Heat Map data. As a result of the decrease in orders, Worldwide Logistics tells CNBC it is expecting Chinese factories to shut down two weeks earlier than usual for the Chinese Lunar New Year…”


Not Just the Housing Market: Recession Threatens ‘Unprecedented’ Manufacturing Slowdown Dragging into Next Year [US]…

“Growing evidence emerged this week that the Federal Reserve’s interest rate hikes, which have already caused a sudden collapse in the formerly red-hot housing market, have fueled an unprecedented slowdown for manufacturers—setting the stage for what could lead to a prolonged downturn in industrial production.”


‘A new level of threat’: Two power stations shot at in the US, leaving thousands without electricity.

“The FBI has been called in after two power stations in North Carolina were shot at, leaving tens of thousands of people without electricity… A state of emergency has been declared and schools will be closed for a second day in a row on Tuesday.”


Britain risking ‘a lost decade of growth’ as stagflation takes hold: Business leaders warn action is needed as forecasts are downgraded.

“Business leaders have warned action is needed to avoid a ‘lost decade of growth’ as forecasts were sharply downgraded. The Confederation of British Industry (CBI) estimates Britain’s gross domestic product will shrink by 0.4 per cent next year, down from predictions of 1 per cent growth.”


‘For some it’s feed your kids or your dog’: Britons turn to pet food banks.

“Richard Croft had never struggled to feed his three German shepherds before, but when he was forced to stop working after being diagnosed with cancer, their monthly food bill was difficult to keep up with.”


Britain is running low on antibiotics just as the country deals with a Strep A outbreak that has killed seven children so far.

“Three drugs routinely used to fight off the bug — or tell-tale symptoms that might be caused by other bacterial infections — are listed as being in short supply.”


The Worst of Europe’s Energy Crisis Isn’t Over…

“The problem is, energy markets are so tight that only a few degrees Celsius, or a few windless days, are what separate Europe facing blackouts from having enough power to make it through the winter. And although gas has been emblematic of the energy crisis since Russia cut supplies, I remain more worried about electricity.”


Advice for Europeans: Bundle Up and Get Ready for Outages.

“Life in some European cities may soon look like this: Staggered electricity outages to save energy. Temporary cuts in mobile phone and internet service. Schools closed for a lack of lighting and heat. Even traffic lights could briefly be powered down.”


Europe urgently needs a new industrial master plan…

The inconvenient truth is that, for decades, the business model of many European industries was based on the availability of abundant and cheap supplies of Russian energy. That business model was shattered when Russia invaded Ukraine. And it’s not coming back.”


Hungarian oil and gas group MOL said on Monday it faced a partial shortage of fuel stocks across almost its entire network of filling stations over the weekend as many people started stockpiling.

“Late last month MOL said it was temporarily curbing fuel deliveries to some retailers in Hungary as oil supplies from Russia fell below normal levels on the Druzhba pipeline. Maintenance at its main Danube refinery had caused a drop in capacity…”


Thousands of Italians have held protests against high cost of living and energy prices, and called for suspension of shipment of weapons and money to Ukraine.

“The protests, organized by the USB (Unione Sindacale di Base) union with the support of political parties and different social organizations, were held in the capital city of Rome on Saturday.”


Fuel runs dry at South Korean petrol stations as truckers strike.

“A nationwide strike by South Korean truckers has led nearly 100 petrol stations across the country to run dry, government data show, as a national trade union announced it would launch a general strike in support of the drivers.”


Stock feed prices are rising as widespread floods take out key fodder-growing regions in eastern Australia, causing an increase in farming costs that will be passed on to consumers.

“According to Dairy Australia, wet weather has hindered usual hay, silage and grain production, with harvesting and processing delayed as fields dry out – if the crop hasn’t been destroyed entirely.”


Australian contractor Clough’s collapse leaves more than $8 bln in projects in limbo.

More than $8 billion worth of gas, power, rail and mining projects across Australia, Mongolia and Papua New Guinea face delays following the collapse of engineering firm Clough on Monday. Projects that could be hit include the expansion of the Oyu Tolgoi copper mine in Mongolia…”


Mongolians attempt to storm Government Palace as protests over coal profits scandal swell.

“For Mongolian youth, word of a scandal in which officials are said to have embezzled state coal export profits was the straw that broke the camel’s back on December 5 as hundreds assembled for an Ulaanbaatar demonstration that saw a minority attempt to storm Government Palace, breaking windows and tearing down perimeter fences in the process.”


Winter Tests Central Asia’s Decrepit Energy Systems, People’s Patience.

“People shiver inside their homes after a power-plant failure in Kazakhstan. A village in Tajikistan can’t pump water due to blackouts. Streetlight are used in a “restricted” capacity in the Uzbek capital, Tashkent. Not for the first time, the cold season is throwing Central Asia’s energy shortages into sharp relief…”


Kerala [India] facing ‘unprecedented financial crisis’, says Finance Minister.

“Kerala Finance Minister K N Balagopal on Tuesday said the state is reeling under unprecedented financial crisis and attributed the ”distorted” financial policies of the Centre, the outbreak of COVID-19 pandemic and recurring natural disasters as reason for the poor economic condition.”


‘Pakistan in financial emergency’.

“The consistent depreciation of the rupee is deepening the economic crisis in the country said the Pakistan Business Forum (PBF), as its leaders called upon the State Bank of Pakistan (SBP) to take necessary measures to stop market speculation and resolve the issue.”


Lebanon’s inflation rate increased 186.4% in the first 10 months of 2022.

“Hyperinflation in Lebanon continued for the 28th consecutive month in October, with the Central Administration of Statistics’ Consumer Price Index increasing by 186.4 per cent… The country is in the grip of an economic crisis described by the World Bank as one of the worst in modern history…”


A protester and a policeman have reportedly been killed during rare demonstrations in the southern Syrian city of Suweida.

“Crowds angry because of the worsening economic conditions in Syria stormed the governor’s office. Eyewitnesses say the protesters set fire to the building amid exchanges of gunfire in the Druze-majority city.”


Tunisians dream of moving to Germany as crisis bites.

“Germany is becoming a key destination for disillusioned young Tunisians despite a language barrier and the North African nation’s long history of ties with France. Europe’s biggest economy, with its low birth rate, is crying out for labour…”


Thousands of protesters marched in Morocco’s capital Rabat on Sunday decrying the “high cost of living and repression,” amid surging inflation and rising social discontent.

“The people want lower prices… The people want to eliminate despotism and corruption,” chanted the crowd…”


Prices soar as fuel shortage in Sierra Leone continues to bite…

“It is not only motorists and the economy that are taking a knock. Kamara says the cost of fuel is so high, he has to increase the price for his passengers… In August, at least 25 people died in the capital Freetown when protests against fuel and food prices turned violent.


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.

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

Half of world’s democracies in decline: report… “We’re seeing extraordinarily severe headwinds for democracy now, intensified by the political fallout from the economic crisis that started with the pandemic and the economic consequences of the war in Ukraine”, International IDEA secretary-general Kevin Casas-Zamora told AFP…

“Casas-Zamora singled out the US as particularly worrying. “I’m very concerned by what we’re seeing in the United States”, he said.

“The country faces political polarisation, institutional dysfunction and threats to civil liberties, according to the report.”


What’s causing the global food price crisis? No, it’s not just the pandemic or the Ukraine war. Financial speculation is making the crisis worse…

“While soaring food prices threaten food security globally, large food trading firms are profiting. These companies bet on the direction of food prices by storing or trading substantial amounts of goods – making big financial gains as a result.”


The head of the world’s largest fertilizer firm [Nutria] is warning of global shortages ahead with supplies from Russia and Belarus becoming more limited than even he anticipated.

““Russia and Belarus are just enormous producers of fertilizer,” Nutrien Ltd. Chief Executive Officer Ken Seitz said Thursday… “There are export challenges in the region. That’s certainly going to have a material impact on the markets.””


Factories in Europe and Asia struggled in November due to weakening global demand, with the pressure unlikely to let up in the months ahead…

The global economy is cooling as a result of soaring prices and uncertainty stoked by Russia’s war in Ukraine. Central banks, meanwhile, are continuing to move aggressively to stamp out inflation, weighing on purchasing power.


Here’s Why Stagflation Will be the Dominant Theme of the Decade…

“Consider where we are now. In every major economic bloc with a currency system that is used as reserves (most notably the US, UK, EU, and Japan) we have reached levels where growth has stalled. This growth stall was prior to the 2020 lockdowns, by the way. Debt had already begun to be unsustainable…


High debts and stagflation have set the stage for the mother of all financial crises…

“Unlike in the 2008 financial crisis and the early months of COVID-19, simply bailing out private and public agents with loose macro policies would pour more gasoline on the inflationary fire. That means there will be a hard landing—a deep, protracted recession—on top of a severe financial crisis.”


Blackstone limits withdrawals at $125bn property fund as investors rush to exit.

“Blackstone has limited withdrawals from its $125bn real estate investment fund following a surge in redemption requests, as investors clamour to get their hands on cash and concerns grow about the long-term health of the commercial property market.”


US home buyers in high-cost areas could soon get $1m mortgages with just a 3 percent deposit after caps for federally-backed loans raised…

“The Federal Housing Finance Agency announced this week that the cap for home loans backed by Fannie Mae and Freddie Mac – the federally-backed home mortgage companies – has increased to just over $1 million for the first time in history.”


Mortgage costs now eat 67% of income in Canada: National Bank.

“A new report from National Bank Financial Markets said the cost to own a representative home in Canada required 67.3 per cent of income to service the debt, the most since 1981. A representative home is essentially a benchmark property price determined for each market using Teranet-National Bank Home Price Index data.”


No presents, avoiding relatives and visiting food banks: Christmas in a cost-of-living crisis [UK].

“Out of the shadow of the pandemic, Christmas 2022 should have been a celebration. But amid plummeting living standards, people are adapting, scaling back or cancelling festive plans altogether, finds Moya Crockett.”


Could Britain be facing a general strike this winter? Workers from the health, transport, education and postal sectors have voted for industrial action, but coordination is legally restricted…

“…some union leaders say they are coordinating action for maximum impact, and nearly 100 years after the last general strike, 1.5 million workers could again be on picket lines by Christmas.”


European funds suffer worst outflows since 2008 financial crisis…

“Bernard Delbecque, senior director for economics and research at Efama, said: “Ucits and AIFs suffered a level of net outflows not seen since Q4 2008. A combination of different factors, including high inflation, fears about the outlook for interest rates, and recession risks dampened investor confidence over the summer.””


European Union countries have agreed to put a cap on Russian oil prices of $60 per barrel, bringing an end to days of arguments over how hard to hit Vladimir Putin’s fossil fuel revenues.

“According to EU diplomats, a deal was struck on Friday after Poland, which had been holding out for a harsher cap, came on board… The key question now is how Russia responds.


The risk of short power outages has increased in Finland due to uncertainty in domestic production and foreign imports, the Finnish energy authority said on Thursday.

“National grid operator Fingrid has also warned of potential power blackouts this winter, due in part to the uncertainty surrounding the start-up date of the new Olkiluoto 3 nuclear power reactor.”


Estonian PM repeats potential electricity blackouts warning.

“Prime Minister Kaja Kallas (Reform) warned again on Thursday of potential power cuts due to low energy supplies. According to Kallas, the risk of blackouts can be reduced by reducing electricity consumption at peak times.”


Switzerland could limit the use of electric vehicles (EVs) in cases of electricity supply shortages this winter under a new four-step plan to prevent power cuts and blackouts.

“To ensure energy security this winter, Switzerland could become the first country to limit the driving and use of EVs, German daily Der Spiegel reports, citing multiple media reports on the Swiss four-stage action plan to avoid blackouts.”


French Grid Operator Warns Of Power Cuts This Winter.

“France could face the risk of power cuts this winter when electricity supply may not be enough to meet demand, Xavier Piechaczyk, the head of grid operator RTE, said on Thursday, citing the price to pay for slow renewables and a nuclear energy infrastructure working at half capacity.”


France accused of funding Putin’s war effort by buying his nuclear fuel. ‘Business as usual,’ says Greenpeace as drums of uranium filmed arriving at a French port…

“Imports of nuclear fuel from Russia remain legal in Europe as Brussels has not been able to ban them in eight rounds of sanctions packages.”


Japan battles looming energy crunch with conservation.

“Japan is urging residents to bundle up and power down. The government expects a major strain on electricity this winter, as countries around the world fight an energy crunch. Clothing retailers are stocking up on hot commodities like fuzzy housecoats and cozy slippers.”


China brings in ‘emergency’ level censorship over zero-Covid protests.

“Chinese authorities have initiated the highest “emergency response” level of censorship, according to leaked directives, including a crackdown on VPNs and other methods of bypassing online censorship after unprecedented protests demonstrated widespread public frustration with the zero-Covid policy.”


China’s property woes fuel risks to its financial system – Moody’s…

“While Chinese banks’ direct exposure to risks from the property sector is limited, their indirect exposure, including lending to industries along the property sector supply chain and from collateral devaluation, is larger…”


South Africa’s cash-strapped power utility Eskom Holdings SOC Ltd. has asked the National Treasury for 19.5 billion rand ($1.1 billion) to buy diesel to fuel auxiliary power plants, a request that’s unlikely to be heeded, said Finance Minister Enoch Godongwana.

“We don’t have it,” Godongwana said in an interview at Bloomberg’s office in Johannesburg.”


Zimbabwe power crisis cripples industry, CZI fears total collapse.

“Zimbabwe’s struggling manufacturing industry and other sectors within the country’s broader corporate world have been forced to cut heavily on production with some facing imminent collapse due to the current power crisis in the country, the Confederation of Zimbabwe Industries (CZI) said Thursday.”


Zambia plans power cuts due to low water levels in Lake Kariba.

“Zambia will start rationing electricity supply to domestic consumers from December 15 following a big drop in water levels in Lake Kariba, threatening hydropower generation, the energy minister has said… Water levels in the lake have dropped to 4.1 percent of usable storage for the Kariba North Bank Power Station in Zambia…”


Uganda Again Suffers Nationwide Power Blackout.

“”UETCL informs its stakeholders and the general public that we are experiencing a national blackout. We shall keep you updated as we work on restoration of power. All inconveniences caused are regretted,” Uganda Electricity Transmission Company Limited(UETCL) said in a statement.”


How Ghana’s economic crisis is reshaping its democracy. Ghana’s legislature could take the unusual move of censuring the finance minister…

“Ghana is experiencing economic turbulence on a level not seen since the 1980s. Its currency, the cedi, is the worst performing in the world and Ghana’s debt-to-GDP ratio has risen to over 80 percent. Consumer prices rose over 40 percent in October. Food prices in Ghana are now the highest in Africa…”


Ghana’s Debt Crisis Stirs Fears in Nigeria.

As the financial crisis in Ghana festers, there are fears that its contagion effect could spread to Nigeria, depending on the choice that whoever emerges president in the 2023 general elections takes to address Africa’s biggest economy’s debt challenges.”


Legal push to cut Puerto Rico power company debt delayed.

“Efforts to restructure some $9 billion in debt held by Puerto Rico’s power company hit a new snag Thursday following multiple failed attempts to end its bankruptcy… Many on the island fear that ongoing prickly negotiations might lead to yet another increase in already costly electric bills…”


Officials fear ‘complete doomsday scenario’ for drought-stricken Colorado River.

“The first sign of serious trouble for the drought-stricken American Southwest could be a whirlpool. It could happen if the surface of Lake Powell, a man-made reservoir along the Colorado River that’s already a quarter of its former size, drops another 38 feet down the concrete face of the 710-foot Glen Canyon Dam here. At that point, the surface would be approaching the tops of eight underwater openings that allow river water to pass through the hydroelectric dam.

“The normally placid Lake Powell, the nation’s second-largest reservoir, could suddenly transform into something resembling a funnel, with water circling the openings, the dam’s operators say.

“If that happens, the massive turbines that generate electricity for 4.5 million people would have to shut down — after nearly 60 years of use — or risk destruction from air bubbles… Such an outcome — known as a “minimum power pool” — was once unfathomable here. Now, the federal government projects that day could come as soon as July.


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.

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

Global wages have fallen in real terms this year for the first time since comparable records began, the International Labour Organization said on Wednesday, arguing there was scant evidence of pay pressures stoking inflation.

“The UN agency’s annual report on pay showed that global monthly average wages in the first half of 2022 were 0.9 per cent lower in real terms than a year earlier, marking the first outright fall in worldwide living standards in the 15 years for which the ILO has published data.”


UN warns of social unrest after ‘striking’ drop in global wages…

“ILO Director-General Gilbert F Houngbo said the deterioration in real wages would likely continue without targeted policy responses by governments. “This would increase the probability of a deeper recession… “This in turn would endanger the economic and employment recovery, further increasing inequalities and fuelling social unrest,” said Houngbo.”


OECD: Energy Crisis Weighing Heavily on Global Economic Growth.

The effects of the energy crisis will be felt on a global scale in 2023… The recently released World Economic Outlook, the flagship annual report from the Organization of Economic Cooperation and Development (OECD) paints a grim picture for the months and years to come as the world grapples with an unfolding global crisis the likes of which we’ve never seen.”


IMF and WTO leaders warn don’t ‘pull the plug’ on global trade…

“IMF Managing Director Kristalina Georgieva, speaking after a meeting with German Chancellor Olaf Scholz, said globalization was facing its biggest challenge since World War Two in the wake of the COVID-19 pandemic and Russia’s war in Ukraine.”


More Americans tapping buy now, pay later for holiday gifts shows ‘how stressed the economy is,’ Harvard researcher says…

“On Black Friday through Cyber Monday, buy now, pay later payments through companies such as Klarna, Zip, Zilch, Affirm and Afterpay jumped 85% compared with the week before, according to the most recent data from Adobe. Buy now, pay later revenue rose 88% for the same period.”


UK consumers face ‘bleak’ winter as food inflation hits new high.

“Annual growth of UK food prices rose strongly to 12.4 per cent in November, up from 11.6 per cent in October, the British Retail Consortium said on Wednesday… Responding to the figures, BRC chief executive Helen Dickinson said: “Winter looks increasingly bleak as pressures on prices continue unabated.””


Britain is to be disrupted by strikes every day until Christmas as trade unions seek to bring the country to a halt in a new winter of discontent.

“Rail workers, including staff at Eurostar, nurses, teachers, security guards handling cash, driving examiners and rural payments officers are planning industrial action that will affect every day over advent.”


Only now are the true costs of [the UK’s] quantitative easing making themselves felt – all £200bn of them…

“With the return of inflation, the interest rate on reserves has risen above that of the average in the Bank’s £847bn holding of government bonds. Having banked and spent the previous profits, governments are now being forced to finance the consequent losses. Already the costs are biting hard.”


UK bond markets are still recovering from the shock of the upheaval that followed the Truss government’s “mini-Budget”, the Governor of the Bank of England, Andrew Bailey, has said.

““We’ve obviously had a period of severe ill-liquidity in the gilt market and it’s not back to normal at the moment,” Mr Bailey told the House of Lords Economic Affairs Committee.”


The next financial crisis is brewing in the UK’s corporate debt market…

“…the UK’s shadow banking system poses an ongoing and material risk to our financial stability, with speculation and poor practice stoked by the rock-bottom interest rates of the past 14 years. But as interest rates rise at an eye-popping pace it is likely that the next financial crisis is being incubated in the UK’s multibillion-pound corporate debt market.


Power cuts could affect emergency calls in France this winter – Orange CEO.

“Emergency phone calls may not be possible in parts of France if there are prolonged power cuts this winter, CEO of the country’s No. 1 telecoms operator Orange said on Wednesday, as the prospect of energy rationing looms amid the war in Ukraine. The stark warning from Christel Heydemann contrasts with the French government’s reassuring tone on the matter…”


‘Necessary evil’: France refires coal plant amid energy woes…

“The energy crisis across Europe unleashed by Russia’s war in Ukraine has paved the way for coal’s comeback in some regions, to the dismay of politicians and activists who warn this endangers climate goals, the climate itself and public health.”


Germany’s Largest State Declares Emergency Amid Energy Crisis…

“North Rhine-Westphalia (NRW), home to 20 of the 50 largest German companies, declared an “extraordinary emergency situation” to be able to access more loans which would otherwise be denied to the state because of a rule on how much debt a state can borrow, German broadcaster WDR reports.”


Ukraine war: Germans struggle with influx of Ukrainian refugees.

“…as winter deepens and Russia continues to attack Ukraine’s energy infrastructure, authorities here are hastily preparing more emergency shelters… A million Ukrainians have fled to Germany since the start of the war, according to latest figures.”


Europe Remains Russia’s Biggest Diesel Buyer.

“Europe continues to be the biggest buyer of Russian diesel… The still high dependence on Russian diesel could become a big problem for Europe in just two months, when the EU embargo on imports of Russian oil products by sea enters into force on February 5.


EU Is Hooked on Russia LNG and Paying Billions to Keep It Coming.

“Liquefied natural gas imports from Russia are up about 40% in a year as buyers scramble to replace dwindling piped flows. It’s a bitter pill for many across the bloc, which has slapped heavy sanctions on the Kremlin to starve it of funds fueling the war in Ukraine.”


‘A form of self-destruction’: Japan weighs up plan to expand nuclear power…

“In a sweeping change to the country’s energy policy, the prime minister, Fumio Kishida, has announced plans to build next-generation reactors and restart those left idle after the 2011 triple meltdown, in an attempt to end Japan’s dependence on imported fossil fuels and help meet its net zero target by 2050.”


Bank of Japan’s $5 Trillion Bet Is Going Awry in a Hurry…

“As of the end of September, the BOJ was at least $6.3 billion in the red on its massive stockpile of Japanese government bonds. This is the first time in the Kuroda era that began in March 2013 that the BOJ announced a loss on assets it’s been hoarding. That, not surprisingly, has investors wondering the extent to which the BOJ’s stock purchases, via exchange-traded funds, might be under water, too.”


[South Korea] Truckers’ strike triggers fuel shortage.

“A nationwide strike by the country’s unionized truckers is causing some local petrol stations to run out of gasoline and diesel, according to the energy ministry, Wednesday, prompting owners of cars and buses to brace for a full-fledged fuel shortage next week.”


Asia’s Manufacturing Slumps as Factories Brace for Worst.

“Asia’s factories struggled in November as they contended with higher costs, weakening regional currencies and cooling global demand, and the pressure is set to continue in the months ahead. Manufacturers across the region are cutting back on output and jobs…”


China’s high youth unemployment stokes student Covid protests…

“Young people in China, who were at the heart of a nationwide wave of demonstrations after a fatal fire in the western city of Urumqi was blamed on a lockdown, face a bleak economic outlook. Youth unemployment this year touched its highest level on record. China’s broader economy is now at one of its weakest junctures in many years.


China Home Sales Slump Persists Even as Rescue Efforts Mount…

The 100 biggest real estate developers saw new-home sales drop 25.5% from a year earlier to 559 billion yuan ($78.9 billion) in November, according to preliminary data from China Real Estate Information Corp. That narrowed from a 28% decline in October.”


Record Power Outages Risk South Africa’s Financial Stability, Central Bank Warns…

“Sustained load shedding, as the outages are called in South Africa, impacts negatively on domestic economic growth, investor sentiment and business activity, exacerbating other pre-existing vulnerabilities, the South Africa Reserve Bank said in its latest financial stability review.”


Are South Africans on the verge of a mental blackout? Our country seems to be on a verge of two types of blackouts, one with the electricity grid, and one with the people of South Africa shutting down from stress.

“With load shedding, rising costs and end of year fatigue, Bloomberg said that many South Africans were feeling frustrated and overwhelmed, with nowhere to direct their anger… adrenal fatigue, which is caused by consistent stress, can lead to a complete shutdown from being so mentally and physically drained.”


Nigeria’s fuel crisis worsens as shortages spread nationwide…

“”The pumps are dry, most filling stations are shut,’’ Mr Alade Joseph, a petroleum unionist said on Wednesday in Abuja as scarcity takes its toll on residents, including those in the seat of government, Abuja, where a fuel black market thrives.”


Syria steps up fuel rationing as shortages hit mobile network.

“Prime Minister Hussein Arnous ordered a 40% reduction in the amount of fuel provided to government workers and restrictions on official travel for non-urgent purposes, according to a statement. Public transport was exempted, said the statement…”


Crypto Lenders’ Woes Worsen as Bitcoin Miners Struggle to Repay Debt.

“Miners, who raised as much as $4 billion from mining-equipment financing when profit margins were as high as 90%, are defaulting on loans and sending hundreds of thousands of machines that served as collateral back to lenders.”


The crypto winter claims Bitfront exchange as its latest casualty.

“Bitfront, a crypto exchange backed by Japanese social media app Line, is shutting down after failing to overcome turmoil in the industry. The announcement by the US-based exchange comes at a time when the market for digital assets is grappling with financial contagion unleashed by the spectacular collapse of another crypto exchange, FTX.”


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.