Daily updates on climate change and the global economy.

21st May 2022 Today’s Round-Up of Economic News

The “first global energy shock” is currently underway as sharp rises in prices have resulted in a “consumer-driven crisis,” says Angela Wilkinson of the World Energy Council

““If you look at the price of … refined products in many parts of the world, they’re now unaffordable for many of the bottom half of societies,” Wilkinson warned. “We’re going to have to see some form of massive reallocation of … money coming out of … this crisis. Consumers are really, really hurting.””


Global diesel shortages herald imminent economic slowdown…

“In recent decades, distillate shortages have always been resolved by either a mid-cycle slowdown or an end-of-cycle recession and there is no reason to think this instance will be different. Rising interest rates around the world, tightening credit conditions and the impact of inflation on household and business budgets are all likely triggers for a slowdown.”


Diesel’s 100% Surge and Scarcity Deny Farmers Their ‘Lifeblood’…

“Farmers from Iowa to Ukraine are grappling with surging diesel prices and an unsteady supply, forcing them to spend unprecedented sums on fuel in a chaotic market and raising concerns about the autumn harvest.”


World has just ten weeks’ worth of wheat left…

“Gro Intelligence chief executive Sara Menker warned global food supplies are being hit by a number of “extraordinary” challenges, including fertiliser shortages, climate disruptions and record low inventories of cooking oils and grains.”


Dow Jones industrial average on longest losing streak since 1932.

“The Dow Jones industrial average suffered its eighth straight week of declines, ensuring its longest losing streak since 1932, despite adding 8.77 points to 31,261.90 yesterday… The sell-off started weeks ago with a flight from technology stocks, but analysts said investors had been spooked this week by signs of collapsing consumer confidence.”


More Subprime Borrowers Are Missing Loan Payments.

“Consumers with low credit scores are falling behind on payments for car loans, personal loans and credit cards, a sign that the healthiest consumer lending environment on record in the U.S. is coming to an end.”


A 900% Jump in Hedging Costs Looms Over Commercial Mortgages…

“Now that the Fed really is hiking, the cost of that protection has multiplied by 10 this year. For a $25 million mortgage, the cost was $535,000 in early May, compared with just $52,000 in January, for a two-year 2% rate cap, according to Chatham Financial Corp…”


Contrast Dye Is the Biggest Medical Supply Shortage Since Masks…

“American doctors haven’t sounded this worried about a hospital supply issue since the early pandemic. This time, instead of masks, it’s “contrast media” made by General Electric — medical dye critical in diagnosing strokes, heart attacks and dangerous lung clots.”


Britain faces summer of shortages on supermarket shelves after just one in four seasonal crop pickers turn up to work in some areas.

“Worried industry figures are said to be particularly concerned about the coming fortnight, when Tenderstem broccoli and courgettes both come into season. Julian Marks, MD of food and farming company Barfoots, told industry magazine The Grocer that the situation was getting ‘pretty desperate’.”


Emergency plans to stop food crisis as biggest rail strike in modern British history looms…

“The Rail, Maritime and Transport Workers (RMT) union is midway through a ballot for strike action of workers at train operators and Network Rail, with voting due to close on Tuesday.”


UK consumer confidence falls to lowest on record.

“The UK consumer confidence index fell 2 percentage points to minus 40 in May, its lowest since records began in 1974, said research company GfK in a report published on Friday… Linda Ellett, UK head of consumer markets at KPMG, said that “as prices and rates rise, the ability of consumers to spend is falling”.”


Trains cancelled due to staff shortages: ‘Unprecedented situation’ [Belgium]…

“Belgium’s national rail service, SNCB is cancelling trains due to a huge staff shortage, reports De Standaard. The cancellations have led to chaotic scenes in some stations… passengers are angry. “Travellers are getting desperate. This is no longer a quality service,” stressed Kees.”


Germany eases cost of living crisis with €9 a month public transport ticket…

“A €9 a month ticket scheme is to be introduced from 1 June allowing travel on all modes of city and regional transport. A different ticket will apply for each region and it will be available for three months until the end of August.”


German producer prices soar 33% annually in April, highest increase on record.

“Producer prices rose 33.5% on year, Destatis said. Energy prices rose 87.3% from a year earlier, it said. Strong gains in the price of natural gas, up 154.8% on year, were a major factor behind the increase, it said.”


Fearing Russian cutoff, German industry braces for gas rations race.

German big business is drafting a plan to use an auction system to help ration available supplies in the event Russia cuts off its gas, although some fear it could punish smaller firms… Germany… is approaching a deadline this month to pay for the fuel under a rouble scheme demanded by Moscow.”


Russia halts gas supplies to Finland as payments row with the west escalates…

““Gas imports through Imatra entry point have been stopped,” Gasgrid Finland said in a statement. Imatra is the entry point for Russian gas into Finland… Finland, along with neighbouring Sweden, this week broke its historical military non-alignment and applied for Nato membership…”


Japanese Prime Minister Fumio Kishida said on Saturday (May 21) that he was disappointed in China’s efforts to develop areas in the East China Sea, saying that it was “unacceptable”.

“Speaking to reporters in the western city of Kyoto, he said that the government had lodged a complaint against China via diplomatic channels.”


Beijing has criticised Japan’s recent comments on Taiwan and warned it not to join forces with the United States to confront China.

“Foreign Minister Wang Yi made the comments in a call with his Japanese counterpart Yoshimasa Hayashi on Wednesday – two days before US President Joe Biden starts his visit to East Asia to push forward his Indo-Pacific strategy.”


‘Do whatever it takes’: Beijing urged to act as China’s economy falters.

“At a recent online gathering of top Chinese economists, a palpable sense of urgency filled the virtual meeting room. In recent weeks, a slew of reports by Chinese and foreign economists pointed to a deteriorating economy. Outside the country, talk of China being the engine of global economic growth no longer convinces.”


China slashes key interest rate as housing sales collapse…

“The People’s Bank of China cut its five-year loan prime rate (LPR) by 15 basis points to 4.45%, the second reduction this year and the largest on record. Most analysts had expected a cut of five basis points.”


India won’t collapse like Sri Lanka or Pakistan but we are certainly in trouble: Swaminathan Aiyar…

“We are in a situation where on the one hand there is a recessionary trend, recession is coming because demand is falling, at the same time prices are going up. Some people call this stagflation. In the case of India we have been hit both ways.”


‘We are going to die’: Food shortages worsen Sri Lanka crisis.

““There is no point in talking about how hard life is,” said APD Sumanavathi, a 60-year-old woman selling fruit and vegetables in the Pettah market in Colombo, the commercial capital. “I can’t predict how things will be in two months, at this rate we might not even be here.””


Rising inequality now an urgent matter, BIS central bank group warns.

“A new study by the central bank to the world’s central banks, the Bank of International Settlements (BIS), has called for urgent action to tackle rising wealth inequality, warning the problem was feeding a dangerous loop of recessions and poverty.”


Social Unrest Is Rising, Adding To Risks For Global Economy – Analysis.

“Prior to the pandemic, unrest rose around the world… Unrest declined sharply at the start of the pandemic amid an increase in social distancing, both voluntary and mandatory. IMF research shows that this is consistent with experience during past pandemics… [Unrest is now] close to its highest levels since the onset of the pandemic.”


‘Breaking Point’: Soaring Inflation Drives Cuts to Hunger-Relief Programs.

“A dearth of funding coupled with a surge in inflation is forcing hunger-relief programs across the globe to cut back on services just as the world’s poorest need it most, creating a situation that will erode human welfare and possibly plant the seeds of political instability.”


Age of Scarcity Begins With $1.6 Trillion Hit to World Economy.

The ties that bind the global economy together, and delivered goods in abundance across the world, are unravelling at a frightening pace… “Fragmentation is going to stay,” says Robert Koopman, the WTO’s chief economist.”


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 a huge help, especially as the cost of living crisis is biting here in the UK.

19th May 2022 Today’s Round-Up of Economic News

China, U.S. lead rise in global debt to record high $305 trillion – IIF.

“The world’s two largest economies borrowed the most in the first quarter as global debt rose to a record above $305 trillion, while the overall debt-to-output ratio declined, data from the Institute of International Finance showed on Wednesday…

“”As central banks move ahead with policy tightening to curb inflationary pressures, higher borrowing costs will exacerbate debt vulnerabilities,” the IIF report said.”


Global fund managers hoard cash at 9/11 levels amid stagflation fears.

“Nervous global investors have built up cash levels last seen in the aftermath of the September 2001 terrorist attacks, amid growing fears about the twin risks of low growth and high inflation, according to Bank of America’s latest monthly fund manager survey.”


Global banks privately prepare for ‘Dangerous Levels’ of Imminent Civil Unrest in Western Homelands’.

“Global banks and investment firms are bracing themselves for an “unprecedented” upsurge in civil unrest in the US, UK and Europe as energy and food price spikes are set to drive costs of living to astronomical levels, Byline Times can exclusively reveal.”


American stocks have suffered their worst losses since June 2020 as investors panic that rocketing inflation will prompt a recession in the world’s biggest economy.

“The Dow Jones Industrial Average fell by 3.6% and the broader S&P 500 by 4% on Wednesday after a series of retailers posted disappointing financial results.”


US asking rents reach record highs in April, some areas see 30% surge in prices…

“Currently, renters in popular migration spots such as Portland, Oregon, and South Florida are getting charged 30% more compared to this time last year, Fairweather said. Austin is getting hit the hardest with rents surging nearly 50% compared to 2021.”


U.S. natural gas prices have more than doubled this year, and they could soar another 25% or more this summer in the hotter weather…

“In the futures market, gas prices rose 4.4% Tuesday as hot spring weather in the Southern U.S. pressured a market that has already been concerned about tight supplies. The warmer weather is forecast to continue across the region.”


Runaway diesel prices threaten to do a lot more than make inflation worse—American infrastructure is at stake…

“The average driver in the U.S. doesn’t rely on diesel, as it’s commonly used by truck drivers and heavy farming vehicles. But sky-high diesel prices could not only aggravate an inflation problem that is already hurting U.S. consumers—they could have dire implications for U.S. infrastructure, and the fate of the global supply chain.”


Vast Swath of US at Risk of Summer Blackouts, Regulator Warns…

“A vast swath of North America from the Great Lakes to the West Coast is at risk of blackouts this summer as heat, drought, shuttered power plants and supply-chain woes strain the electric grid. Power supplies in much of the US and part of Canada will be stretched…”


UK Is About to Become Stagflation Nation.

“In a world reeling from soaring inflation and weak growth, the UK holds a special place. It’s on track to be the advanced nations’ stagflation capital. Prices are expected to rise 13.1% over this year and next, the most in the Group of Seven…”


UK School meals will shrink without help to tackle rising costs, warns food boss. Soaring food inflation could force schools to choose between offering smaller portions at lunchtime and using cheaper ingredients, the boss of one of the UK’s largest food wholesalers has warned, as providers in the sector called for more funding to tackle rising costs.”


EU new car demand falls 21% in April.

“New passenger car demand in the EU saw a significant drop in April as registration fell 20.6% to 684,506 units. With the exception of the pandemic year in 2020, this was the weakest April result in terms of volumes sold since records began…”


EU accepts it will burn more coal in move away from Russian gas.

“Coal is the most carbon-intensive fuel but the European Commission said the EU would use 5 per cent more than previously expected over the next five to 10 years as the bloc tries to replace Russian energy imports.”


Three Protests Hampered the Movement in Bulgaria Today.

“Three parallel protests took place in Sofia since the morning – of carriers, of public transport workers and of taxi drivers. Key intersections at peak hours were closed. Everyone protested against the high prices and asked for measures and help from the state.”


Recession Risks Are Contagious As Japan’s GDP Stumbles—Again…

The real wake-up call here is how little Kishida and Bank of Japan Governor Haruhiko Kuroda can do about it. Fiscal policy options are greatly limited by a debt-to-GDP ratio well above 250%, making Tokyo quite the outlier among Group of Seven nations. In fact, the zeros are almost getting too numerous to type out here.”


China diverts anti-poverty funds to Covid testing as crisis deepens…

“China’s cash-strapped local governments have been forced to divert funds from poverty alleviation and infrastructure to finance mass coronavirus testing as President Xi Jinping’s zero-Covid policy causes growing financial strains.”


Chinese depositors left in dark as three local banks freeze deposits.

“Three banks in China’s central Henan province have frozen at least $178 million of deposits, offering scant information on why or for how long, leaving firms unable to pay workers and individuals locked out of savings, depositors told Reuters.”


Poor Countries Face a Mounting Catastrophe Fueled by Inflation and Debt…

““It’s like wildfires in all directions,” said Jayati Ghosh, an economist at the University of Massachusetts Amherst. “This is much bigger than after the global financial crisis. Everything is stacked against the low- and middle-income countries.””


Sri Lanka is poised to default on its foreign debt as the grace period for missed payments expires on Wednesday, with the government scrambling for dollars to top up depleted fuel supplies

The island, which has never missed debt payments, joins countries including Zambia and Ecuador in defaulting as the coronavirus pandemic took its toll.”


Myanmar Fuel Importers Blame Shortages on Junta Dollar Controls…

““Imports have almost halved. Major importers now only try to keep the pumps working and they can’t sell fuel to the wholesale market like before,” said the manager. Another fuel importer said firms lacked access to dollars.”


Is Bangladesh heading toward a Sri Lanka-like crisis?

“…The Russia-Ukraine war, which began at the end of February, has compounded the inflationary pressure. Bangladesh has been particularly vulnerable as the country imports significant amounts of goods like cooking oil, wheat and other food items, as well as fuel.”


Pakistan must address its dire issues of external debt and current account deficit to avoid a Sri Lanka-like default, according to the latest report by the Institute for Policy Reforms.

“The independent and non-partisan think-tank termed resolution of the issues critical for the economic revival and security in the face of a “national emergency”.”


Crypto crash leaves El Salvador with no easy exit from worsening crisis.

“El Salvador’s big bet on bitcoin, which the Central American nation has been buying since September, has soured in recent weeks as a cryptocurrency rout shaved over a third of the value of the government’s holdings, Reuters calculations show.”


Protests continue against high cost of living in Panamanian province.

“Popular leaders of the Panamanian province of Colon said that they will maintain protests against the high cost of living and questioned the most recent meeting on the subject of the President of the Republic, Laurentino Cortizo.”


Ukraine war has stoked global food crisis that could last years, says UN.

“UN secretary general António Guterres said shortages of grain and fertiliser caused by the war, warming temperatures and pandemic-driven supply problems threaten to “tip tens of millions of people over the edge into food insecurity”, as financial markets saw share prices fall heavily again on fears of inflation and a worldwide recession.”


The Global Safety Net Against Hunger Is Frailer Than You Think.

“For all the sophistication of the global trade in calories, we’re still overwhelmingly dependent on half-a-dozen breadbaskets to feed ourselves — the US Midwest, South America, western Europe, the former Soviet Union, the Indo-Gangetic plain, and eastern China.

“If freak weather conditions knock out two at once, we’re more dependent on the others, plus stocks from previous years, to keep ourselves fed. Throw politics into the mix, and the margin of safety gets even narrower.”


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 a huge help, especially as the cost of living crisis is biting here in the UK.

17th May 2022 Today’s Round-Up of Economic News

‘Apocalyptic’ food prices will be disastrous for world’s poor, says Bank governor.

“The Bank of England governor has blamed the war in Ukraine for the highest inflation in the UK for three decades and warned that “apocalyptic” food prices caused by Russia’s invasion could have a disastrous impact on the world’s poor…

“Andrew Bailey told MPs that while he was unhappy about the level of price rises, 80% of the inflation target overshoot was caused by factors outside the Bank’s control.”


Central bankers should worry about the food insecurity crisis…

“A global food shortage is pushing food prices to record levels, with economic and political implications for developed countries and a threat of famine and debt distress in the emerging world. Much more must be done.”


Wheat prices surged to a new record high in European trading on Monday after India decided to ban exports of the commodity as a heatwave hit production.

“The price jumped to 435 euros ($453) per tonne as the Euronext market opened, up from the previous record of 422 euros reached on Friday.”


Dollar’s Strength Pushes World Economy Deeper Into Slowdown [still the best looking horse in the glue factory, apparently].

“The soaring dollar is propelling the global economy deeper into a synchronized slowdown by driving up borrowing costs and stoking financial-market volatility — and there’s little respite on the horizon.”


Bond Traders Reel as Inflation Hits World’s Emerging Local Debt. As spiraling inflation spreads across the globe, emerging-market bonds from Turkey to Thailand are feeling the brunt.

“Local-currency debt from developing nations — which is far more sensitive to a country’s domestic inflationary pressures than dollar denominated equivalents — has slumped almost 9% this year.”


The US is facing a “very, very high risk” of recession as the Federal Reserve pushes up interest rates to tame inflation, former Goldman Sachs chief Lloyd Blankfein has warned.

“Mr Blankfein, who is now senior chairman at the banking giant, urged businesses and households to brace for a downturn in the world’s largest economy as living costs soar and the US central bank tightens its position.”


$5 gas could become widespread as prices hit another record.

“Prices at the pump continue to shatter records ahead of Memorial Day weekend. The national average for regular gas hit a fresh record of $4.48 a gallon Monday, according to AAA. That marks an increase of 15 cents in the past week and 40 cents in a month.”


‘I cannot survive on $260 a week’: US retail and fast-food workers strike…

“The unrest also comes as corporations have often reported record profits and showered executives with pay increases, stock buybacks and bonuses, while workers received minimal pay increases. Workers at billion-dollar corporations from Dollar General to McDonald’s still make on average less than $15 an hour while often being forced to work in unsafe, grueling conditions.”


Russia cuts power exports to Finland over failed payments.

“Russia had cut all its exports of electricity to Finland on Monday, flow data showed, after Russian utility Inter RAO said last week it would halt them because it had not been paid.”


Outlooks for EU growth and inflation worsen as energy crisis hits. Brussels has cut its growth forecasts further and lifted its inflation outlook as the energy crisis triggered by Russia’s invasion of Ukraine exacts its toll on the EU economy.”


European dealmakers face shrinking debt options as recession risk looms…

“Global economic uncertainty and market volatility triggered by the Russia-Ukraine war, coupled with monetary tightening from the Federal Reserve and the Bank of England and expectations the European Central Bank will follow suit, have made deal financing costlier and harder to access…”


China’s economic activity plummets as Covid lockdowns hit growth…

“Retail sales, the country’s main gauge of consumer activity, slumped 11.1 per cent year on year, compared with forecasts of a 6.6 per cent fall… Industrial production, which underpinned China’s rapid economic recovery from the initial Covid shock in early 2020 and was expected to rise slightly despite the recent restrictions, dropped 2.9 per cent.”


China April property sales post steepest drop since 2010…

“Property sales by value in April slumped 46.6% from a year earlier, the biggest drop since at least 2010, and sharply widening from the 26.17% fall in March, according to Reuters calculations based on data from the National Bureau of Statistics released on Monday.”


Food inflation pain puts emerging markets between rock and hard place…

“Rising food prices are a hot topic in emerging market, raising the risk of civil unrest with echoes of the Arab spring and putting policy makers in a bind between stepping in with fiscal support to ease the pain on their population or preserve government finances.”


Indonesian farmers protest against rising cost of palm oil export ban.

“Hundreds of Indonesian smallholder farmers on Tuesday staged a protest in the capital Jakarta and in other parts of the world’s fourth most populous country, demanding the government end a palm oil export ban that has slashed their income.”


Sri Lankan MP ‘beaten to death by angry mob’ during anti-government protests.

“A sitting Sri Lankan MP was beaten to death by anti-government protesters in a “horrific murder scene”, an eye-witness told the Telegraph, as the country’s new prime minister warned there is just one day’s worth of fuel left.


3 in 5 Indian homes face power outages amid massive heat waves…

“A survey conducted by LocalCircles has found that as temperature almost hit 50 degree Celsius [122F] in many parts of India and power outages continue for 3 in 5 households for over a month of heatwave, people demand solutions.”


Pakistan sleepwalks deeper into an economic crisis, testing families’ and businesses’ endurance, while the government and the opposition continue to indulge recklessly in power games, risking the country’s future with anarchy and systemic collapse.

““How can they not hear the shrill sound of ringing alarm bells? I see no problem with street mobilisation in a democracy…”


Price protests turn political in Iran as rallies spread.

“Spreading protests across Iran over a cut in state subsidies on food have turned political… Now protesters have expanded their demands, calling for more political freedom, an end to the Islamic Republic and the downfall of its leaders, according to witnesses and social media posts.”


Street violence and protests are breaking out in Tajikistan over rising food prices and general inflation.

“This follows similar protests in Iran and Sri Lanka. Russia’s war in Ukraine has made a bad situation worse. This is just the start.”


Clashes erupted in Libya’s capital on Tuesday as the parliament-appointed prime minister, Fathi Bashagha, tried to take control of government from a rival administration that has refused to cede power…

“The crisis risks plunging Libya back into prolonged fighting after two years of comparative peace, or returning it to partition…”


Thousands hold protests against Tunisia president over rising food prices.

“Thousands of Tunisians took to the streets in the capital, Tunis, on Sunday to protest against President Kais Saied’s political measures and rising food prices… Islamist Ennahda Movement official Ali al-Arid told the channel that protests would continue in the form of sit-ins, marches and hunger strikes.”


Uganda’s Government readies self for cost of living protests…

“Several sources we have spoken to indicate that both the military and the police have orders to “decisively” deal with any whiff at a protest or social dissent. Former FDC president, Dr Kizza Besigye was on Thursday met with a heavy-handed restriction that ended in a preventative arrest after he tried to protest rising fuel and commodity prices.”


CIVIC society organisations (CSOs) are planning on massive street protests against the Emmerson Mnangagwa led government [of Zimbabwe] as the economic crisis worsens, this publication has learnt.

“The chairperson of Zimbabwe civic society organisations mother body, Crisis in Zimbabwe Coalition, Peter Mutasa, said arrangements are on course.”


Africa is facing significant fuel shortages…

“We’re really seeing shortages of different kinds of fuel – diesel, petrol, sometimes jet fuel for airplanes – everywhere from Senegal and Nigeria right over in West Africa to Kenya and Ethiopia in the east and then right down to South Africa, with jet fuel, in particular, in the far south. So really, it’s touching all corners of sub-Saharan Africa.”


Ukraine war: Global fertiliser crunch pressures Brazil’s Amazon; Brazil agribusiness is keen to mine for potassium in resource-rich Amazon region…

““We have fertiliser in Brazil, at the mouth of the Madeira River,” said Jair Bolsonaro, referring to the Amazon River’s largest tributary. “We have potassium in abundance, but it is [on] an Indigenous reserve.””


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 a huge help, especially as the cost of living crisis is biting here in the UK.

14th May 2022 Today’s Round-Up of Economic News

Global stocks record longest weekly losing streak since 2008 crisis… A short-term rally in US government bonds also reversed on Friday as haven buying, driven by recession fears, reverted to traders calculating the effect of sustained inflation on fixed interest-paying securities…

“Some investors characterised Friday’s gains as a bear market rally, referring to short periods of optimism within a longer trend of declines.”


The week that shook crypto.

“…this week, luna lost it all. Its value slid to zero… Its sudden death, at a time when crypto valuations were already sliding, has sparked serious questions over the functioning of the entire crypto market.”


Central Banks Face The Growth-Inflation Dilemma…

Unfortunately, there are no good answers. Raising interest rates to attack high inflation will exacerbate the growth slowdown; easing monetary policy conditions to shore up growth also means letting inflation run too hot for too long.”


Nations move to tackle inflation, increasing risk to global economy.

The Federal Reserve’s bid to calm inflation by raising interest rates and withdrawing emergency stimulus programs is gearing up just as the global economy is displaying worrisome signs of weakness… The risk, some economists said, is that the Fed and other central banks that are implementing similar anti-inflation policies may adjust too slowly to a complex and fast-changing global landscape.”


Record Diesel Prices Pressure European Drivers, U.S. Deliveries.

“A global shortfall of the fuel—the workhorse for much of the world economy—is straining industries from trucking to farming and adding to the pressure consumers face from higher energy prices. Europe, dependent on imports of Russian diesel that are expected to slump because of sanctions, is particularly vulnerable.”


The US Can’t Make Enough Fuel and There’s No Fix in Sight.

“From record gasoline prices to higher airfares to fears of diesel rationing ahead, America’s runaway energy market is disquieting both US travelers and the wider economy. But the chief driver isn’t high crude prices or even the rebound in demand: It’s simply too few refineries turning oil into usable fuels.”


Russia Diesel Exports Drop Sharply In April…

“The resulting supply reduction will fuel already significant inflation in diesel prices not only in Europe but in the United States as well… In the United States, diesel prices have been breaking records in the past few weeks, sparking worry for the wider economy as the bulk of freight transport uses diesel as a fuel.”


Cass Freight Index sees ‘considerable’ U.S. freight recession risk.

“A closely watched transportation report on Thursday said “the prospect of freight recession is now considerable” as the spending shift from goods to services accelerates, inflation erodes disposable income and interest rates climb. Freight transportation is viewed as a barometer for the U.S. economy…”


‘Golden era’ of cheap food over as two in five Britons buy less to eat.

“Households have been warned that the UK’s “golden era” of cheap food is over, as official figures published on Friday pointed to the toll of the cost of living crisis, with two in five people buying less food to get by.”


UK economy ‘only going to get worse’ as growth slowdown begins.

” A growth slowdown is underway in the U.K. after the economy shrank by 0.1% in March, with economists expecting further contractions this year… Sterling hit a two-year low versus the U.S. dollar following the data as traders digested growing uncertainty about the U.K.’s economic outlook.”


Some UK public swimming pools forced to close over national chlorine shortage…

“The Chemical Business Association said: “The horrific situation in Ukraine has wrought further havoc on an already heavily disrupted chemical supply chain caused by factors such as Covid, Brexit or driver shortages.””


Eurozone Industrial Production Declined in March as Ukraine Conflict Takes Its Toll…

“Output from factories, mines and utilities across the region declined 1.8% in March compared with February, the European Union statistics agency Eurostat said Friday. Economists polled by The Wall Street Journal had forecast a 1.0% decrease.”


Europe gas spikes 22% as Germany quarrels with Russia over supply…

“The benchmark contract surged more than 22%, with shipments from Russia via Ukraine set to fall by about 30% on Thursday following interruptions at a cross-border entry point as a result of the war. It adds to the market’s concerns as Moscow halted shipments to Gazprom Germania GmbH and its units in retaliation.”


Germany Girds for Day of Reckoning in Gas Showdown With Russia.

“Europe’s largest economy is bracing for the prospect that Russian natural gas gets cut off suddenly, a shock that would trigger a form of martial law for energy and affect 80 million residents and businesses from bakers to chemical producers. ”


Finland is ready to cope in the event that Russia cuts off its supply of natural gas, the government’s emergency preparedness committee said after a meeting on Friday.

“Key Finnish politicians had been warned of a possible halt to gas exports by Russia on Friday, Finnish newspaper Iltalehti reported on Thursday.”


The hidden city under Helsinki built for the nuclear apocalypse: Finnish city has 500 bunkers where the entire population of 600,000 people can shelter from the fallout of nuclear war for months…

“Emergency bunkers are receiving new attention as Finland’s NATO bid meets Moscow tough talk; Kremlin has vowed ‘retaliatory steps’ including moving nukes closer to Europe.”


China tightens ban on ‘non-essential’ overseas travel as lockdown anger rises.

“Authorities in China have imposed a de facto international travel ban, forbidding citizens from going overseas for “non-essential” reasons, as the government ramps up efforts to enforce its zero-Covid policy.”


China’s Economic Slowdown Is Rippling All Around the World…

“The effects of China’s slowdown are showing up everywhere from German factories to Australian tourist spots. Exports are weakening in Asia as China’s neighbors watch their largest market sag. Companies including Apple Inc. and General Electric Co. warned investors about production and delivery problems…”


India bans wheat exports to deepen global food crisis.

“The Indian government has blocked all exports of wheat with immediate effect… India, the world’s second-largest producer of wheat, was expected to bolster supply badly depleted by Russia’s war in Ukraine, which has caused exports from the Black Sea region to plummet and the UN to warn of a global hunger crisis.”


Nepal’s economy hammered by power outages.

“Nepal’s industrial sector has been hit hard by power cuts in recent weeks, with many small, medium as well as large firms forced to shut down operations due to a lack of electricity. The Himalayan nation relies heavily on energy imported from India, especially during the summer months.”


Sri Lankans running out of food, fuel and medicine.

“”I have a 10-month-old baby. I couldn’t even buy medicines for her when she was sick last week,” said Gunarathna Vaani… “There are no medicine stocks available in the market. Even basic tablets like paracetamol or Benadryl are not there. I had to borrow medicines from my neighbors to treat my baby,” she told DW.”


Pakistan Default Risk Surges as Ousted Khan Plans New Protests.

“Pakistan’s new Prime Minister Shehbaz Sharif faces a crucial few weeks when he must end fuel subsidies and convince the International Monetary Fund he’s doing enough to win a bailout, while ousted premier Imran Khan threatens new protests amid soaring inflation.”


‘They’re imposing famine on us’: Soaring food prices fuel angry protests in Iran.

“Hundreds of protesters have taken to the streets in cities across southeastern Iran since the beginning of the week. They are protesting against sudden increases in the price of staple foods, which have soared up to 300% for some products.”


Dubai’s workers struggle with cost of living crisis…

“Food delivery riders for Talabat, a unit of Germany’s Delivery Hero, have gone on an illegal strike to protest over their low wages as the rising cost of living sparks widening unrest among the poorest workers… The rare outbreak of industrial unrest in the Gulf state comes as fuel prices have soared since the Russian invasion of Ukraine.”


Lebanon Central Bank Governor’s Son Moved Millions Abroad While Lebanese Watched Blocked Savings Dwindle.

“In late 2019, a financial crisis led Lebanese banks to block most depositors from withdrawing or transferring U.S. dollars. But the central bank governor’s son was able to move more than $6.5 million overseas, leaked documents show.”


With floods and electricity shortages, South Africa’s economy is threatening to go into reverse…

“The port city of Durban and the wider KwaZulu-Natal province in eastern South Africa were besieged by the country’s worst flash flooding for decades in April, which killed hundreds and throttled freight operations at sub-Saharan Africa’s busiest port.”


Air Zimbabwe grounded by jet fuel shortage.

“Troubled national flag carrier, Air Zimbabwe, has grounded its planes because of jet fuel shortages, a development which could result in flight schedule disruptions. In a statement Thursday, the airline management said passengers will be advised on flight schedule changes as soon as possible.”


‘Now it will only get worse’: Cuba grapples with impact of Ukraine war.

“Russia’s war in Ukraine has created fresh problems for its Caribbean ally Cuba, already shaken by street protests and facing severe financial stress amid tighter US sanctions and a pandemic-induced collapse in tourism.”


Chilean Journalist Dies After Being Shot During May Day Protests

“A journalist who was shot near May Day protests in the Chilean capital Santiago died Thursday, a hospital official said, as the country’s president promised there would be no “impunity” in the case. The death of 30-year-old Francisca Sandoval was also confirmed in a statement…”


Thousands of Argentines protest soaring inflation.

“Calls to protest have become more frequent since the start of the year, as the Argentine economy shows no signs of stemming its inflationary trend. In the first four months of 2022, prices rose 23 percent, including a 6 percent jump in April, according to figures published Thursday.”


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 a huge help, especially as the cost of living crisis is biting here in the UK.

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

The global fertilizer shortage is pushing farmers to poop-based products.

“Pandemic supply chain shocks compounded by the war in Ukraine have caused a global shortage of chemical fertilizers. With no end to the war in sight and spring planting season in full swing in the northern hemisphere, farmers are turning to animal and plant waste instead.

“Manure suppliers in particular are selling out. There’s not enough manure to meet the demand of farmers in the US. The pressure is being felt globally, with farmers in the UK even opting to buy treated human sewage sludge.”


OPEC Kingpins Sound Alarm Over World’s Dwindling Energy Capacity…

“I am a dinosaur, but I have never seen these things,” Saudi minister Prince Abdulaziz bin Salman, who’s been attending OPEC meetings since the 1980s, said Tuesday at a conference in Abu Dhabi, referring to the recent surge in prices for refined products. “The world needs to wake up to an existing reality. The world is running out of energy capacity at all levels.””


Biden blames Russia’s war in Ukraine for food supply shortages and price hikes.

“President Joe Biden on Wednesday blamed Russia’s invasion of Ukraine for domestic price hikes and global food supply shortages, praising American farmers for being the “breadbasket of democracy” amid the war. “America is fighting on two fronts,” Biden said…”


NYC Billionaire Catsimatidis Warns of Looming East Coast Diesel Rationing.

“The diesel crisis in the US may get worse this summer with the potential of shortages and rationing on the East Coast, said billionaire refinery and fuel station owner John Catsimatidis… East Coast stockpiles of the fuel have fallen to the lowest in data going back to 1990.”


In another blow to the US economy, prices at the pump soared to fresh record highs.

“The national average price for regular gasoline climbed more than four cents on Tuesday to $4.37 a gallon, according to AAA. That takes out the prior record of $4.33 set on March 11. The gas spike — prices are up 17 cents in the past week alone — will only add to inflationary pressures…”


After Pain at the Pump Comes the Electric Shock.

“Inflation is arriving fast for gas and power bills — and putting great strain on utilities’ return on investment… On all fronts, the 2010s were halcyon years. The shale boom suppressed the price of natural gas and, by extension, of producing electricity… Now it’s safe to say that shale dividend has run its course.


Mortgages drive increase in US household debt to nearly $16tn. US households added $266bn to their debt balances in the first quarter, led by mortgage loans, in the largest single-quarter increase since 2006, according to the Federal Reserve Bank of New York.”


Analysis: UK consumer despair suggests government mishandling inflationary crunch.

“The tide of pessimism sweeping through Britain’s households is unmatched elsewhere among Europe’s major economies and suggests the government may have misjudged its response to an escalating cost-of-living crunch.”


German households will be prioritised in gas supply emergency, regulator says.

“Households won’t be first to be hit when it comes to the potential rationing of gas in Germany should Russian supplies be disrupted, the head of the country’s energy regulator said, rejecting calls for a prioritisation of industry.”


Ukraine halts some Russian gas flows to Europe.

“Ukraine suspended the flow of some Russian natural gas to Europe on Wednesday, blaming Moscow for diverting supplies from the vital pipeline network… in a statement late Tuesday, the Ukrainian gas transmission system operator said it had decided to suspend operations at a major transit point because of “interference by the occupying forces.”


Major China Developer Sunac Defaults as Debt Crisis Spreads.

“Sunac China Holdings Ltd. has defaulted on a dollar bond, becoming one of the biggest Chinese property companies to renege on its obligations amid a record-breaking wave of missed payments.”


Don’t Expect Chinese Stimulus to Save the Global Economy.

“Responding to the 2008 financial crisis [and to a lesser extent in 2016], China unleashed a fiscal package of 4 trillion yuan ($586 billion at the time), plus an unprecedented surge in bank lending that spurred demand for commodities and consumer goods. All that, in the process, lifted trading partners… This time it’s different…”


Japan, China, South Korea finance leaders urge caution amid Ukraine crisis.

“The financial leaders from Japan, China and South Korea urged caution against heightening risks from sooner-than-expected normalisation of monetary policy, accelerating inflation and supply chain disruptions on top of the Ukraine crisis.”


With governments globally grappling with surging electricity prices as the war in Ukraine strains fossil fuel supply chains, authorities are examining almost every possibility to reduce power demand.

“In Tokyo, officials are urging residents to watch an hour less TV a day, switch off the keep-warm mode on rice cookers, and refrain from using heater functions on toilet seats until winter.”


Soaring food, fuel ramp up social unrest risk for emerging markets.

“Rising fuel and food prices look set to stoke an “inevitable” rise in civil unrest, with developing middle-income countries such as Brazil or Egypt particularly at risk, a report by a risk consultancy said… Argentina, Tunisia, Pakistan and Philippines were also among the countries to watch…”


Brazil’s Inflation Hits Highest Since 2003 as Food Prices Soar.

“Latin American central banks will likely extend their monetary tightening campaigns beyond what was originally expected after inflation surged past forecasts in April, with steep increases in food and fuel costs stinging policy makers.”


Peru’s spring of discontent.

“President Pedro Castillo’s radical programme has faltered. With seemingly no end to the political gridlock, Peruvians are taking to the streets… Nine months after the country elected the former teacher and union leader Pedro Castillo as its president, Peru is once again in crisis.”


South Africa Set for Worst Year of Power Cuts as Plants Fail.

“State-owned Eskom Holdings SOC Ltd. said it will again ration electricity on Tuesday after various generation units were shut for repairs or didn’t return to service as expected. That means nationwide cuts will have occurred on seven of the 10 days in May so far…”


Africa Faces Unrest as Thumping Food Prices Hit It Hardest.

“Higher food prices coupled with soaring fuel bills and rising unemployment make for a volatile political environment on the continent and have prompted governments to react even at the expense of fiscal consolidation, said Nel and van Eck.”


Tunisia to raise the prices of some foodstuffs after farmers’ protests.

“Tunisia will raise the prices of some foods including milk, eggs and poultry this week, the agriculture minister said, following protests by farmers against a jump in animal feed barley prices due to the war in Ukraine and an increase in energy costs.”


First Signs Of Civil Unrest As Bread Prices Soar In Iran…

“Raisi’s cash-strapped administration has looked to cut major government subsidies. But the step is likely to come at a cost: potential civil unrest. The first signs of discontent over bread prices came in the southwestern province of Khuzestan…”


Lao Economy Grinding to a Halt as Fuel Crisis Deepens.

“Motorists in the Lao capital Vientiane have been forced to queue for hours at petrol stations as a fuel crisis tightens its grip, the latest sign in a brewing economic crisis in the nation of 7 million… Economists have long warned that Laos’ foreign debt was on an unsustainable path.”


Sri Lanka unrest: shoot on sight order issued as troops deployed in Colombo…

“As footage emerged on Wednesday of armoured military vehicles in Colombo and military checkpoints being set up across the country, fears grew that the path was being laid for a military takeover… A nationwide curfew has done nothing to stop protesters gathering…”


Central Banks Can’t Fend Off Stagflation Alone…

“Stocks and bonds are already flashing red about the economic dangers ahead. Fiscal and monetary policies can and should be coordinated without undermining the independence of either set of policy makers. It’s time for the global authorities to repeat the creativity they displayed during the pandemic. They should act now, in haste.” [And do what exactly?!]


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 a huge help, especially as the cost of living crisis is biting here in the UK.

10th May 2022 Today’s Round-Up of Economic News

Cash Is the Only Winner in a Market Gripped by Stagflation Fear… Investors are eschewing almost everything except cash in this selloff

“…investors are focused on one thing right now: capital preservation. Slowing economic growth, persistent inflation and more Covid lockdowns in China have combined to make a toxic investing landscape. Even commodities, a favorite inflation play, succumbed to the global selloff on Monday.”


Half of institutional investors say the Ukraine crisis will plunge the global economy into stagflation, while a fifth think it will trigger a financial crisis worse than the Great Recession of 2008.

“A CoreData Research study of more than 200 global institutional investors found 51% think the surge in energy prices triggered by the invasion of Ukraine will push the world economy into stagflation.”


If you aren’t an oil baron, I have bad news: it’s as if oil is trading somewhere between $150 and $275 a barrel.

The oil market is projecting a false sense of stability when it comes to energy inflation. Instead, the real economy is suffering a much stronger price shock than it appears, because fuel prices are rising much faster than crude, and that matters for monetary policy.”


Electricity Shortage Warnings Grow Across U.S…

“From California to Texas to Indiana, electric-grid operators are warning that power-generating capacity is struggling to keep up with demand, a gap that could lead to rolling blackouts during heat waves or other peak periods as soon as this year.”


‘It’s a nightmare’: baby formula shortage leaves US parents desperate…

“During the week starting 24 April, 40% of baby formula was out of stock in more than 11,000 stores across the country, CNN and USA Today reported… In six states – Texas, Tennessee, North Dakota, South Dakota, Iowa and Missouri – more than half of available baby formula in stores was sold out…”


New York Hospitals Battle Supply Shortages on Shanghai Lockdown.

“Shanghai’s strict Covid-19 curbs are disrupting health care services halfway across the world, with hospitals in New York suffering a shortage of chemicals used in imaging tests — the latest example of how the city’s five-week-long lockdown is snarling global supply chains.”


“The NHS is facing shortages of blood pressure pills, painkillers, hay fever tablets and anti-depressants as drug producers are hit by supply problems [UK].

“Companies providing medications for millions of people face ‘unprecedented pressure’ with supply chains and red tape, a leading industry body has warned.”


‘I come to the library to keep warm’: Norfolk residents battling fuel poverty…

“When Joan Mulholland, 89, found out last month her energy bills were due to increase again, she panicked. “I rang up the company and said: ‘I’m not going to be able to afford £200 a month.’” She gets by on a state pension and is worried it will not be enough this winter.”


Serbia grain exports to fall with ban. Serbia’s wheat and corn exports are expected to drop significantly from earlier estimates in 2021-22 due to the ongoing Russia-Ukraine war, which led Serbia to ban exports it deems important to food security…”


In Ukraine, gas shortages further complicate daily life.

“As Russia’s invasion of Ukraine grinds through its third month, gas shortages are spreading across the country, adding to people’s misery and testing their resilience in new ways. Lines are forming at service stations in major cities…”


Russia’s Economy Facing Worst Contraction Since 1994.

“The Bank of Russia said April 29 it expects a contraction between 8% and 10% this year. The International Monetary Fund forecast one of 8.5%, while a Bloomberg survey of economists found a median decline of 10.3%. If the Finance Ministry’s forecast proves accurate, that would erase about a decade of economic growth…”


‘Stop asking why’: Shanghai tightens COVID lockdown, Beijing keeps testing.

“Shanghai authorities were tightening the city-wide COVID lockdown they imposed more than a month ago, prolonging into late May an ordeal that China’s capital Beijing was desperate to avoid by turning mass testing into an almost daily routine.”


China’s premier has warned its job market faces a “complicated and grim” outlook as the country’s zero-Covid strategy causes trade exports to plunge.

“Li Keqiang warned of job losses as Beijing and Shanghai tightened curbs on residents as part of efforts to contain the pandemic.”


Emerging markets hit by ‘toxic’ mix of rising rates and slower growth…

““We have had this cooling down of Chinese demand coming at a time when the Fed is hiking interest rates and inflation is still pushing higher,” said Cristian Maggio, head of emerging markets portfolio strategy at TD Securities. “As if that weren’t enough we still have the risks related to the war in Ukraine. It’s a very toxic combination.””


Southeast Asia will face a “big risk” of social unrest if there are “big surges” in food prices, an ASEAN economist at Bank of America Securities told CNBC.

“That’s because, relative to other countries, food consumption accounts for a large proportion of what people spend on in countries like the Philippines, Indonesia and Vietnam, said Mohamed Faiz Nagutha on Friday.”


Protests break out as Philippines election returns a Marcos to presidency…

“The Philippines woke to a new but familiar political landscape on Tuesday, after an election triumph by Ferdinand Marcos Jr. paved the way for a once unimaginable return to the country’s highest office for its most notorious political dynasty.”


[Indian] Rupee slumps to all-time low against Dollar.

“The Indian currency extended its losses and touched an all-time low of 77.42 against the US dollar in Monday’s early trade weighed down by the strength of US dollar in the overseas market, foreign fund outflows and fall in domestic equities.”


Cotton prices hit 11-year high on possible India export ban.

“Cotton prices have soared to their highest levels since May 2011 as concerns grow over a possible export ban by top exporter India and a severe drought hitting U.S. yields.”


Troops rescue outgoing Sri Lanka PM [who has resigned] as houses torched in deadly night of unrest.

“Sri Lanka has deployed thousands of troops and police to enforce a curfew after five people were killed in the worst violence in weeks of protests over an unprecedented economic crisis.”


Sri Lanka stops supplying gas for domestic use.

“Amid the ongoing economic crisis, Sri Lanka’s leading liquefied petroleum gas supplier Litro Gas Lanka Limited on Monday said that they are unable to supply gas to domestic consumers until new stocks arrive.”


Lebanon’s descent into turmoil: assassinations, war, financial collapse.

“Lebanon holds an election on May 15 that could see a shift of power that sends shockwaves far beyond this small country squeezed between Syria and Israel.”


Thousands face jail as Jordan heads to lift moratorium on debt imprisonment…

“In March 2021, then in the midst of the Covid-19 pandemic , Jordanian authorities issued a one-year moratorium on arresting people for failure to repay debts, but the measure is set to expire next month. Tens of thousands of Jordanians could face jail time for their debts…”


Hundreds of Tunisians demonstrated to support President Kais Saied on Sunday and to back his rewriting of the constitution….

“Saied’s supporters, whose rally in central Tunis was smaller than recent opposition protests, said the president’s opponents were corrupt and called for opposition parties to be banned.”


Zimbabwe’s bank lending freeze will worsen economic crisis, business chamber says.

“Zimbabwe’s decision to suspend bank lending in a desperate bid to arrest the rapid devaluation of its currency will worsen the economic crisis and expose borrowers to predatory loans, the country’s business chamber said on Monday.”


Eskom Generation Chief Quits Amid Spiraling South Africa Outages.

“The top executive for power production at South Africa’s Eskom Holdings SOC Ltd. has resigned as the fragile electricity grid struggles to meet demand, threatening economic growth… The utility announced nationwide power cuts on Monday.”


South Africa’s Minister of Transport, Fikile Mbalula, has called for a ban on the export of scrap metal as the theft and vandalism of critical rail infrastructure sabotage the country’s economy.

“”We are unequivocal in our call to ban the export of scrap metal and will support any measure that will bring us closer to this reality,” the Minister said on Monday.”


The threat of an airline shutdown in Nigeria isn’t going away…

“For the second time this year, domestic airlines in Nigeria have threatened to shut down their operations, citing rising costs, only to back off after a few days… AON said the price of aviation fuel (JetA1) has risen from 190 naira per liter to N700 ($1.68), and that it could no longer absorb the costs.”


As Wheat Prices Soar, Africa Pivots to Cheaper Alternatives.

“Food producers in Kenya, Egypt, Democratic Republic of Congo, Nigeria and Cameroon say they’re mixing cheaper alternatives into their breads, pastries and pastas. Local rice, manioc flour and sorghum are substituting for wheat, which has spiked about 40% this year…”


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. I really appreciate it and it is a huge help, especially with the cost of living spiralling relentlessly upwards.