“Global pension assets record largest annual decline since the global financial crisis.
““Last year we experienced, to an extent, a global ‘polycrisis’ where various risks combined, were amplified as a result, and manifested in significant asset falls. It is our view that these systemic risks will increase in the future and will emanate predominantly from environmental, societal and geopolitical sources,” said Marisa Hall, head of the Thinking Ahead Institute.”
“Soaring energy prices triggered by the Russia-Ukraine conflict could push up to 141 million more people around the globe into extreme poverty, a study has found.
“The cost of energy for households globally could have increased by between 62.6% and 112.9% since Russia’s invasion of Ukraine, according to a modelling study by an international group of scientists published in Nature Energy.”
“Europe to face intense competition for gas with China this year, Shell warns… Energy giant says invasion of Ukraine has caused ‘structural shifts’ in gas market…
“Shell cautioned there will not be enough liquefied natural gas (LNG) supplies to meet global demand later this decade unless more money is put into new projects.”
“Pentagon’s top China official to visit Taiwan amid rising bilateral tensions.
“The Pentagon’s top China official is to visit Taiwan in the coming days, a rare trip to the island by a senior US defence policymaker that comes as relations between Washington and Beijing are mired in crisis over a suspected Chinese spy balloon shot down two weeks ago.”
“Taiwan reports Chinese balloon found on northern island.
“Taiwan’s Defense Ministry says it found a Chinese weather balloon on one of its outlying islands, amid U.S. accusations that such craft have been dispatched worldwide to spy on Washington and its allies.”
“Britain Wargames a Crash Far Worse Than Covid If Chip Supplies [from Taiwan] Are Shut Off…
“The UK is preparing a contingency exercise across multiple government departments, Bloomberg has learned, and the pandemic offered a mere preview of the chaos that tiny silicon wafers can unleash… The shock of a TSMC shutdown would be felt immediately and in every corner of British life.”
“Taiwan’s Director of Chinese Affairs Dr Lai Chung has warned Australia could be China’s “next target” if Beijing successfully invades and takes over Taiwan.
[Seems improbable to me but I post it to highlight the general atmosphere of worsening paranoia, as the species gaslights itself into psychosis with potentially combustible results.]
“Russia has started deploying tactical nuclear weapons-armed vessels in the Baltic Sea for the first time in three decades, according to a Norwegian intelligence report…
“The Norwegian intelligence report stated that… “It cannot be ruled out that a localised war could escalate into a wider conflict with direct military involvement of Russia, the United States, NATO, and Norway.””
“We Are Not Frightened Enough – Nuclear Weapons And The Horrors They Pose… New survey reveals how the public understanding of “nuclear winter” is dangerously low…
“In a statement, Paul Ingram, the senior researcher working on the CSER survey, explained how worrying the results are. “Ideas of nuclear winter are predominantly a lingering cultural memory”, he said, “as if it is the stuff of history, rather than a horribly contemporary risk.””
“U.S. household debt jumps to record $16.90 trillion.
“U.S. household debt jumped to a record $16.90 trillion from October through December last year, the largest quarterly increase in 20 years, as mortgage and credit card balances surged amid high inflation and rising interest rates, a Federal Reserve report showed on Thursday.”
“Tuesday Morning, the discount home goods retailer, filed for Chapter 11 bankruptcy protection Tuesday, its second bankruptcy in three years.
“It’s the latest example of the retail apocalypse, which is starting to creep back… Tuesday Morning joins a growing number of financially distressed retailers that have filed for bankruptcy this year.”
“Fears for the futures: half of British youth believe they will never earn enough to support a family…
“…this report shows that young people in 2023 are less satisfied and confident with money than they were then. The diminishing levels of happiness and confidence are accredited to the cost-of-living crisis and the upcoming recession. Young people are losing hope in the future and their ability to achieve their potential.”
“Critical care nurses in England join strikes as pay dispute deepens.
“The unprecedented move came as the UK’s biggest transport union announced four new strike dates and Royal Mail workers balloted overwhelmingly for up to six more months of walkouts… The tougher stance comes as the government refuses to reopen pay talks for the current financial year.”
“Greece offers more aid to inflation-hit pensioners and businesses.
“Greece’s conservative government on Wednesday announced more financial aid for pensioners, farmers and businesses hurt by inflation and costly energy bills, launching the latest measures months before a national election.”
“Albania has third anti-government protest this week, PM called to resign.
“The opposition and supporters held the third anti-government protest in a week outside of parliament in Tirana on Thursday, calling for the prime minister to resign and attempting to disrupt the parliamentary session.”
“Singapore’s non-oil domestic exports plunged 25% year on year in January — their largest drop in 10 years.
“Government data showed Singapore’s non-oil exports to its top markets led the wider decline, with exports to China falling by more than 41%, to the U.S. by 31.5% and to Hong Kong by more than 55% for the month.”
“Japan’s Trade Deficit Smashes Record Amid Global Slowdown.
“Japan’s trade deficit surged to a record in January, as exports to China sharply dropped and the global economy slowed. The trade gap jumped to 3.5 trillion yen ($26.1 billion) from 1.45 trillion yen in December, the finance ministry reported Thursday. The deficit far exceeded the previous record of 2.82 trillion yen…”
“Amazon pollution: the stain on Ecuador’s oil boom.
“…millions of hectares have been transformed — for better or worse — into Ecuador’s oil capital. The region’s forests are receding as pollution spreads, activists claim — the landscape increasingly dominated by wells, pipelines, tanker trucks, oil flares and processing plants. The government says oil income is essential for the country’s development, and that of its people.”
“Peru protests jolt mine activity with Las Bambas, Antapaccay hit hardest.
“Peru’s top copper mines are starting to see activity hit harder by protests and blockades in the country’s southern Andes, power data reviewed by Reuters shows, with Chinese-owned Las Bambas and Glencore PLC’s Antapaccay currently worst affected.”
“The Chilean government on Thursday pared back its forecast for the country’s gross domestic product (GDP) in 2023, saying it now expects a 0.7% economic contraction in the year, down from a 0.5% contraction seen earlier.”
“Argentina faces a historic contraction of citrus fruits in the domestic market.
“Corrientes’ citrus sector ran out of fruit in January and has been unable to calculate total losses, stated Nicolas Carlino… Citrus plantations have been affected by permanent water stress for three years, he stated. “The worst part about this lack of water is that its happening right now, while the fruit is growing, in the middle of summer, when the crops should be bearing fruit.””
“Food Prices Hit 14-Year High as South Africa Power Cuts Escalate…
“The increase in food prices came as state-owned Eskom Holdings SOC Ltd. imposed power cuts of as long as 12 hours a day — the most severe outages yet — for nine days in January. Power cuts, known locally as loadshedding, have been implemented for 108 straight days because of frequent breakdownds at Eskom’s plants.”
“Scores Killed, Injured in Clashes in Oil-Rich Somaliland Region…
“Somaliland’s Ministry of Foreign Affairs this week denied killing civilians and accused Somalia of trying to destabilize the oil-rich region. Last year, Somaliland defended its right to award oil-exploration licenses, after Somalia’s government declared the UK-based Genel Energy Plc’s operations there illegal.”
“Two people died Thursday in clashes between anti-junta protesters and security forces in Guinea [also oil-rich]… with the country’s opposition coalition reporting “many arrests” and injuries from live ammunition.
“Protesters took to the streets to demand a return to civilian rule, and the release of arrested activists and other political prisoners under the military junta that seized power in the West African nation in 2021.”
“Police fire tear gas at supporters of Senegal opposition leader Sonko.
“The demonstrations are the latest sign of unrest in the West African country where elections next year could pit Sonko against President Macky Sall, if the president seeks a third term, a move that opponents say is unconstitutional.”
“Rioters have attacked bank ATMs and blocked roads in three Nigerian cities as anger spilled on the streets over a scarcity of cash, just days before the country’s general election.
“Nigeria has been struggling with a shortage in physical cash since the central bank began to swap old bills of the local naira currency for new ones, leading to a shortfall in banknotes.”
A very dark experiment is under way in Nigeria, with deadly consequences. Since October 2021, 99.5% of Nigerians have refused to use the central bank's digital currency, the so-called e-Naira, preferring to continue using cash. So what did the central bank do? It doubled down.
“Ghana facing the worst economic catastrophe in our lifetimes – Kofi Bentil to Akufo-Addo…
“He believes that the president needs to act decisively on same by making radical changes especially at the Ministry of Finance, where he wants all the political leadership led by minister Ken Ofori-Atta removed.”
“Twelve years after Yemen uprising, people’s dreams are shattered.
“As Yemen marks 12 years since the February 2011 uprising, aspirations remain unfulfilled and the unthinkable has happened as the country slipped into years of strife and then war, which pushed it into the world’s greatest humanitarian crisis. Today, 17 out of 33 million people in Yemen are food insecure…”
“Egyptians already battered by high prices fear they will face even steeper inflation. “All prices have increased but incomes have not,” said Robert Botros, a family therapist, who added that clients were cutting down on visits to save money. His children’s school fees have jumped 50 per cent since the start of the school year…”
“Several dozen Lebanese protesters attacked banks in a Beirut neighborhood on Thursday, while blocking roads protesting against informal restrictions on cash withdrawals in place for years and rapidly deteriorating economic conditions.”
“Iran protests flare in several cities amid continuing unrest…
“Since they began, at least 529 people have been killed in demonstrations, according to Human Rights Activists in Iran. More than 19,700 others have been detained by authorities amid a violent crackdown trying to suppress the dissent.”
“Impoverished Afghans Turn To Booming Crystal-Meth Industry To Eke Out A Living…
“Among them is Ahmad Wali, who lives in the remote province of Ghor in central Afghanistan. Wali is believed to be among the thousands of people who earn money by collecting ephedra, a wild herb that is used to make crystal meth. “For now, it is our only source of income,” he told RFE/RL’s Radio Azadi…”
“How Pakistan is taking desperate economic measures for IMF bailout.
“The Pakistan government is trying its best to secure a deal with the International Monetary Fund (IMF) for the release of a critical bailout package, failing which it can slump into default.”
“Sri Lanka hikes power prices by 66% hoping to gain IMF support.
“The scale of the price rise will heap misery on Sri Lankans already struggling with inflation running at 54.2%. But, the government can barely able to afford vital imports due to a lack of foreign currency reserves, and has to convince international creditors that it will follow sound fiscal policies.”
“The Managing Director of the IMF warned that we need to “think of the unthinkable,” as we live in “a more shock-prone world” impacted by the Covid-19 pandemic, Russia’s invasion of Ukraine and the recent earthquake across Syria and Turkey…
““What we are very concerned [about] is the unexpected,” Kristalina Georgieva said.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.
“Financial time bomb: The risks of climate inaction to the global economy
“The world is facing a financial time bomb due to economic risks from climate change. Climate change is causing billions in losses globally and affecting the economy. Transitioning to a low-carbon economy is necessary to reduce emissions, but difficult for financial institutions. An abrupt market sell-off could trigger a financial crisis.”
“On climate, most corporations more talk than action.
“The world’s biggest and richest companies are failing to deliver on their climate pledges, according to an in-depth analysis released Monday that calls on governments to crack down on corporate greenwashing.”
“50% of the global economy is under threat from biodiversity loss.
“Whether you live in a city, a rural area or by the ocean, it’s likely you have noticed a decline in biodiversity. Maybe fewer birds visit your urban feeders, larger mammals are less common in the fields and forests around you, or your catches on those fishing trips are getting smaller. What we’re all witnessing is a potentially catastrophic loss of biodiversity on which entire ecosystems depend.”
“The metric that shows why the world’s three biggest economies could be in serious trouble.
“The dependency ratio [ie the comparison of a working-aged population to the young and elderly among them] might be one of the most important statistics when it comes to the future of investing and global markets. For the United States., China and Japan, it’s headed in the wrong direction.”
“A Yale University professor has sparked outrage by suggesting the only way to deal with Japan’s rapidly aging population is a mass suicide and disembowelment.
“Yusuke Narita, an assistant professor of economics at Yale, defended his views… ‘I feel like the only solution is pretty clear,’ he said at the time. ‘In the end, isn’t it mass suicide and mass ‘seppuku’ of the elderly?'”
“Chinese pensioners returned to the streets of Wuhan to protest changes to their medical benefits, highlighting the challenge confronting President Xi Jinping’s government following historic anti-lockdown demonstrations in November…
“In recent months, Chinese citizens have become increasingly bold about protesting government policies.”
“The world is counting on an economic bounceback from China to power global growth and help keep recession at bay. Don’t bank on it…
“China has historically relied on government stimulus and heavy investment to power itself out of slumps. That mix [+ now depleting stores of cheap coal] helped yank the global economy out of the doldrums after the 2008 financial crisis. This time, China is deeply in debt, its housing market is in distress, and much of the infrastructure the country needs is already built.”
“Copper [a key barometer of health for the global economy] Prices Flatline As Chinese Demand Struggles To Recover.
“…the market’s attitude has changed from general optimism to one of “watch and wait.” Most analysts simply keep holding out for signs of a resurgent Chinese demand, which many think may not arrive.”
“War in Ukraine at 1 year: Pain, resilience in global economy.
“One year after Russia invaded Ukraine on Feb. 24, 2022, the global economy is still enduring the consequences — crunched supplies of grain, fertilizer and energy along with more inflation and economic uncertainty in a world already contending with too much of both.”
“It’s time to prepare for the new world order and the stark implications of its arrival… there was always a hope… that the multilateral world order would survive because it was the best; because we designed it; because it conformed to universal notions of freedom and human rights, and because it was good for us. Unfortunately, we have to abandon that hope. It’s the multipolar scenario that is unfolding…”
“Most fund selectors believe a recession is needed to reduce global levels of inflation, according to a new survey, amid concerns the economic headwinds of last year will continue in 2023.
“Research conducted by Natixis Investment Managers, found 62% of fund professionals globally, and 74% in Asia, see a recession as a necessary way out of high inflation.”
“Global Liquidity Drain Is Coming for Markets, Citi’s King Says.
“King pointed to interventions in recent months undertaken by the Bank of Japan and People’s Bank of China — as well as shifting line items on the European Central Bank’s and Federal Reserve’s balance sheets — that have added almost $1 trillion to global central bank reserves… According to King, the $1 trillion increase in reserves helps resolve the disconnect [between stock markets and “real” economies battered by rampant inflation].”
“U.S. companies face more pain as expected ‘earnings recession’ looms.
“Expectations for U.S. earnings to decline in the first and second quarter come amid weaker-than-expected fourth-quarter results for 2022, which Credit Suisse estimates will be the worst earnings season outside of a recession in 24 years.”
“UK labour market can’t hold out much longer against impact of stagflation.
“Britain’s economy is suffering from a textbook case of stagflation, and the symptoms are clear from the latest labour market trends. It looks like a complex picture… In fact, the diagnosis is straightforward. There was zero growth in the final three months of 2022 while the annual inflation stood at above 10%.”
“More [UK] working days were lost to strike action last year than at any time since 1989, according to official figures that also show wage growth failed to keep pace with inflation amid the biggest real-terms fall on record.
“The figures from the Office for National Statistics provide more evidence for the squeeze on households amid the cost of living crisis.”
“UK and Eurozone inflation likely to remain high for several years due to the energy crisis.
“The surge in energy prices has significantly lifted headline inflation rates in the UK and Eurozone through the direct impact on household energy bills. However, there is a lag to the feed through from rising energy costs and consumer inflation of several months.”
“European countries’ bill to shield households and companies from soaring energy costs has climbed to nearly 800 billion euros, researchers said on Monday.
“The eye-watering sum has mostly gone towards measures like VAT cuts on petrol and retail power price caps. These act as “de-facto fossil fuel subsidies,” according to the analysis by think-tank Bruegel…”
“Europe’s gas stockpiling could cost energy users and taxpayers billions, according to a report by Bloomberg.
“…much of the commodity was bought at record prices… Since then, however, prices have fallen to their lowest point in 18 months… As a result, any sales of natural gas could cost energy users and taxpayers billions.”
“France Leans On Retailers To Help Consumers Cope With Food Prices.
“France’s finance minister has urged food retailers to do more to help consumers cope with high prices, as the government leans on them to agree to sell an anti-inflation basket of everyday essential goods at knockdown prices.”
“Nearly one million French march as pension protests continue.
“Protesters held a sometimes restive fourth round of nationwide demonstrations across France against President Emmanuel Macron’s plans to reform the country’s pension system. More than 960,000 people marched in Paris, Nice, Marseille, Toulouse, Nantes and other cities…”
“With no police to call or courts to turn to, Serbs in northern Kosovo are stuck in the middle of another bout of unrest after a mass walkout triggered new uncertainty amid the unending tug-of-war with Serbia.
“For three months, residents living in Kosovo’s northern Serb enclaves have gone without basic bureaucratic services — including law enforcement, courts, and local government institutions.”
“…around 120,000 residents of Nagorno-Karabakh — Azerbaijan’s Armenian-populated breakaway region — have since mid-December lived under a blockade that led to shortages of food, medicines, and fuel. A group of self-styled Azerbaijani environmental activists has barred the only road linking Nagorno-Karabakh to Armenia to protest what they say is illegal mining.”
“Households and enterprises in seven regions across Kazakhstan were temporarily knocked off the power grid as temperatures dropped to around -14 degrees Celsius over the weekend in fresh evidence of how the country is struggling to cope with inexorably mounting demand for electricity.”
“Pakistan edges closer to debt default as inflation, political turmoil and unrest collide.
“Pakistan’s economy faces total collapse, with a similar pattern emerging to that of its South Asian neighbour, Sri Lanka. Yet, unlike in Sri Lanka, the country is nuclear armed, its leading politicians are engaged in a violent power struggle, while an emboldened Taliban-affiliated terror group lays siege to the country’s west and north.”
“Decades of Iraq War Fuel Catastrophic Rise in Antibiotic Resistance.
“Decades of wars and conflict in Iraq have led to a “catastrophic” rise in antibiotic resistance in the country, with serious implications for the entire region and the world, warn international experts in the open access journal BMJ Global Health.”
“Earthquake survivors in Turkey face tragic times with economic collapse.
“The enormous calamity confronts the two nations that have been equally struggling for some time to overcome massive economic crises and a lingering 12-year civil war in Syria that has made the country a pariah and sent millions of Syrians into exile in Turkey or independent pockets within the country.”
“The Lebanese pound on Tuesday sank to a new record low of 74,000 against one U.S. dollar…
“Lebanese experts have repeatedly urged Lebanese authorities to take quick actions to stop the collapse of the Lebanese pound… Lebanon has been suffering from a steep financial crisis, and the country has so far failed to implement structural reforms to start the recovery process.”
“Protests and strikes in Israel as plans for judicial overhaul move forward…
“Prime minister Benjamin Netanyahu’s judicial changes have been met with some of the biggest protests ever witnessed in Israel in the two months since he returned to office, uniting many elements of what is usually a highly polarised society.”
“World Bank Urges Egypt to Loosen State Grip on Economy.
“Egypt needs to get more transparent about its debt, and that includes amounts owed by state-owned enterprises in an economy where the government plays too large a role, a senior World Bank official said… Last week Moody’s Investors Service downgraded the country’s credit rating deeper into junk territory, citing its declining ability to absorb shocks.”
“Tunisia’s president on Tuesday accused some people detained in a wave of recent arrests of being responsible for price increases and food shortages, saying they wanted to fuel a social crisis.
“President Kais Saied vowed to move forward to “clean the country,” in his first official comments on the arrests made during a meeting with Tunisia’s trade minister.”
“Moroccans Overwhelmed by Rising Inflation, Outraged by Unresponsive Government… The situation resulted in protests in several cities, including Tangier and Meknes, among others, over the weekend…
“In souks, vegetables and fruits are untouchable for low-income people and those who do not have an income at all.”
“Nigeria’s naira shortage: Anger and chaos outside banks…
“People here have long been used to the periodic bouts of fuel shortages leading to long lines of cars snaking from the petrol stations. But now long lines of frustrated, confused and angry people have become a common sight outside banks as the country builds up to a presidential election at the end of the month.”
“Fitch Cuts Ghana Local Debt Rating to ‘Restrictive Default’ on Distressed Swap…
“Fitch also affirmed the nation’s foreign currency rating at C, the lowest score before default. Because a Eurobond coupon payment due last month hasn’t been honored, the agency will cut the foreign-currency grade to ‘RD’ after the grace period expires on Feb. 17, according to the statement.”
“Venezuelans say credit cards that were once lifeline now ‘useless’.
“Credit cards are becoming increasingly useless in Venezuela because of high inflation and government restrictions, hurting people already struggling to meet daily needs on low salaries, banking industry sources, analysts and consumers said.”
“Protests return to Bogotá [Colombia] streets as tensions rise over health “reform”…
“As residents of Bogotá face two days of protests, as well as fears that a return to social unrest on the streets of the capital will bring mobility to a standstill, Petro’s call for mobilizations appears to be repeat from his term as Mayor of Bogotá…”
“Peru crisis deepens as agreement on early polls eludes lawmakers.
“Peru’s congress has been unable to set a date for early elections, deepening the political paralysis in the world’s second-biggest copper producer as widespread anti-government protests enter their third month.”
“Argentinians drown in spiralling inflation at nearly 100%.
“Argentina’s inflation rate has hit just shy of 100 percent, the government said on Tuesday, with savers feeling more pain from some of the world’s fastest-rising prices and workers’ budgets straining as costs outstrip salaries.”
“Strong dollar fuels wave of emerging market currency devaluations.
“A recent spate of currency devaluations has highlighted the intense pressure on many emerging economies, as the strength of the US dollar forces them to spend precious foreign reserves supporting their exchange rates.”
“Crypto’s free pass is getting yanked as the most powerful US financial regulators rapidly close key doors to the country’s banking system.
“The increasingly aggressive posture, which has taken shape through public and private actions in the weeks since the collapse of crypto exchange FTX, could push the industry to the fringes of finance.”
“Central banks currencies are coming whether we want them or not. Should you be worried about CBDCs?
“Already, the U.S. is moving forward with tests of CBDCs, the U.K. is hiring a Head of Central Bank Digital Currency and testing out a digital pound, and China has launched its version of CBDCs in the real world.
“We are closer than ever to a world of centralized digital currencies reshaping the financial sector. This raises the question of whether we are entering a new era of financial efficiency or, as critics fear, one of dystopian surveillance.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.
So, this will be my last thread until 14th February. Thank you to all my readers for keeping me company on this fascinating journey into uncharted waters, as the global economy starts to lose its battle against entropy, and a special thank you to anyone who has donated or is a subscriber.
“An American hedge fund advised by the economic guru known as “The Black Swan” has warned a debt timebomb risks pushing the global economy into a downturn rivalling the Great Depression.
“Mark Spitznagel, chief investment officer of Miami-based Universa Investments, said levels of borrowing were so high following a decade of low interest rates that they now risked triggering a “contagious inferno” that could envelop the financial system.
““It is objectively the greatest tinderbox-timebomb in financial history – greater than the late 1920s, and likely with similar market consequences,” the 51-year-old told his clients in a letter reported by Bloomberg.”
“A change in financial market conditions could lead to short-term cash stress and trigger forced selling… That could create a “self-reinforcing mechanism”… while almost everyone agrees the shadow banking sector might be an accident waiting to happen, there isn’t a clear or agreed plan for how to stop it.”
“Housing Slump Deepens From US to China in Risk to Global Growth.
“Reports this week have shown the US housing slump stretched into a fifth month, China’s home sales slide continued and price declines persisted in both Australia and New Zealand. Sliding home values threaten to undermine consumer confidence and weigh on household spending…”
“…Since the last global property bubble in 2006-07 and the financial crisis that resulted from it, central banks have held interest rates close to zero. While few have paid attention, this has led to a reflation of many of the same property bubbles that caused the disaster to begin with… risk metrics show the potential for a mass default event rising and rising.”
“An under-the-radar economic indicator is flashing a warning not seen since the 2008 financial crisis…
“According to data from the Fibre Box Association, US cardboard box shipments declined 8.4% in the fourth-quarter, representing the largest quarterly decline since the second quarter of 2009, amid the Great Financial Crisis. Cardboard boxes are an overlooked barometer of the health of the economy…”
“UK falls to lowest-ever position in global corruption index after Boris Johnson’s scandal-hit premiership.
“A survey of perceived corruption in public office places Britain behind Uruguay and Hong Kong amid a warning that scandals and concerns about the use of taxpayers’ money mean ‘slipping standards’ in the UK are being noticed globally.”
“UK Business Groups Warn of ‘Cliff Edge’ as Energy Help Ends.
“Many British businesses face dire risks when the government tightens its energy support package in April, industry groups told a parliamentary committee Tuesday. Hospitality companies could see an average of 85% increase in their power and gas bills from April…”
“German industry to pay 40% more for energy than pre-crisis – study says.
“German industry is set to pay about 40% more for energy in 2023 than in 2021, before the energy crisis triggered by Russia’s invasion of Ukraine, a study by Allianz Trade said on Monday, citing contract expiries and delayed wholesale pricing effects. “The large energy-price shock still lies ahead for European corporates,”said Allianz Trade…”
“Lucky Europe has swerved blackouts – but don’t rejoice just yet…
“We will probably have to live with elevated energy prices for the foreseeable future… governments cannot afford to keep subsidising energy bills on the scale they did last year. In the EU, some governments have spent the equivalent of over 7% of GDP shielding businesses and households from rising energy costs. This is unsustainable.”
“Thousands of care sector workers protest in Brussels.
“Over 10,000 people have protested throughout central Brussels to demand better working conditions and more pay in the care sector which has been especially hard-hit during the Covid-19 pandemic. Trade union activists and workers are demanding that more people be hired…”
“Huge crowds of protesters clashed with riot police in cities across France today in a second day of nationwide protests over Emmanuel Macron’s plan to make people work longer before retirement.
“Hundreds of thousands of striking workers descended onto the streets of French cities – from Paris to Marseille – to denounce a reform that raises the retirement age by two years to 64 in a major test of Macron’s presidency.”
“Spanish inflation at highest in 35 years after state subsidies end.
“Core inflation climbed to 7.5% in Spain, making it the highest figure since December 1986, the national statistics institute INE revealed Monday after VAT was reduced on some foodstuffs and some state subsidies on fuel were removed.”
“Bank of Japan outright bond purchases in January were the highest ever on record.
“Defending Yield Curve Control. Expensive business …and despite all the breathless headline chatter of policy change to come from the Bank of Japan (mea culpa) the BOJ is showing no signs of relenting.”
“Japan Factory Output Inches Down Amid Global Slowdown…
“Among concerns is the global economic slowdown, especially in the US and Europe, caused by continued aggressive policy tightening. International financial organizations have increasingly warned of the risk of a deceleration… a slowdown in China is also a concern.”
“South Korea posts the worst trade deficit in its history.
“South Korea recorded a trade deficit of $47.5 billion for 2022, official data from the customs agency showed. It marked the worst trade deficit since the agency started compiling data in 1956 and far more than the $20.6 billion trade deficit in 1996.”
“China’s debt-based interest payments top a trillion yuan for first time, raising concerns about financial risks.
“Interest payments on local government debt in China exceeded a trillion yuan for the first time last year as Beijing called for enhanced efforts to steady the economy, and analysts say public debt in the world’s second-largest economy could continue to surge to an all-time high in 2023.”
“Chinese cities are struggling to pay their bills as ‘hidden debts’ soar.
“Three years of strict pandemic controls in China and a real estate crash have drained local government coffers, leaving authorities across the country struggling with mountains of debt. The problem has gotten so extreme that some cities are now unable to provide basic services, and the risk of default is rising.”
“Peru Residents Form Long Lines For Gas In Face Of Fuel Shortages.
“Hundreds of people line up along the streets of Poroy village, in the outskirts of Peru’s Cusco city, to buy canisters of gas amid shortages following anti-government road blockades.”
“South Africa’s Energy Crisis Could Spark A Political And Economic Disaster…
“The country faces a “perfect storm of inflation, electricity cuts and corruption accusations that will continue to deteriorate South Africa’s profile and to pose risk for investments in the country,” as Aleix Montana, Africa analyst at risk consultancy Verisk Maplecroft, told CNBC.”
“Protesters block Benin City roads [Nigeria] over fuel price hike, Obaseki promises solution in 24 hours.
“Protesters, made up of Civil Society Organisations and other residents of Edo State, including youths, yesterday, staged a peaceful protest over hike in pump price of fuel. They barricaded strategic locations within the metropolis and marched through Sapele Road to Ring Road, causing gridlock.”
“Saied’s government is now gearing up to implement ravaging new austerity measures the financial institution presented as a prerequisite to sealing the deal. These policies will likely include the complete elimination of food and fuel subsidies, the slashing of public health, education, and social protection spending, and the privatisation of key public companies.”
“Cost of living crisis cuts a cruel swathe through Arab political economies…
“The depreciation of Arab currencies against the dollar is a particular concern for the most vulnerable nations because households that had built up savings prior to the economic downturn have seen the value of their financial reserves plummet and safety nets cut from beneath them.”
“Something Has to Give in Postwar Syria… Thirteen years of constant crisis is heading toward inevitable breakdown…
“…2023 looks almost guaranteed to be a year of potentially game-changing instability, and although developments unique to Turkey, Russia, and Iran are likely to contribute toward significant changes, the most consequential dynamic relates to the economy and specifically the situation inside regime areas.”
“Local demonstrations have returned to the towns and villages of the northern and eastern countryside of Aleppo, protesting the high prices of electricity supply and its frequent interruptions.
“A wave of anger among the people was met with the local councils’ rejection of the electricity companies’ policy…”
“Israel and Palestinians risk deeper conflict in a distracted world…
“With prospects for political progress bleaker than they have been for years and with world powers now distracted by the Ukraine war, violence has steadily been rising. The latest outbreak followed months of confrontations that left 190 Palestinians dead, according to United Nations figures…”
“Turkey’s advances across the increasingly depopulated border of Iraqi Kurdistan attract little global attention compared to its incursions into Syria or the battle against Islamic State, but the escalation risks further destabilising a region where foreign powers have intervened with impunity, analysts say.”
“Death toll from suicide bombing at mosque in Pakistan climbs to 100.
“At least 225 people were injured in Monday’s attack, which took place as more than 300 worshippers were gathered inside the mosque. Most of those killed or injured were police officers… The mosque is located inside a compound that also includes the city’s police headquarters.”
“Pakistan braces for fuel shortages amid liquidity crisis.
“Pakistan could face a crunch in fuel supplies in February as banks have stopped financing and facilitating payments for imports due to depleting foreign exchange reserves, traders and industry sources said. The South Asian nation is facing a balance of payments crisis…”
“Sri Lanka Is Calm Again. That Doesn’t Mean Things Are Any Better…
“… the island nation’s economy remains on a ventilator, with the government yet to secure a way out of crushing debt. Sri Lankans have become resigned to a sad reality: pared-down meals, shrunken incomes and reduced expectations. Many young people are desperately trying to find a way out of the country.”
You can read the previous “Economic” thread here. I’ll be back on the 14th Feb.
If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.
A heads-up that I am away for the first half of Feb, so Wednesday 1st will be my last thread until the 14th – my apologies. We are heading to the mainland for my father’s 80th birthday celebrations and are going to do some of the things we were too ill to do over our ill-fated Christmas break.
A huge thank you to my subscribers and anyone who has donated. In the immortal words of Bette Midler, you are the wind beneath my wings. 😎
“‘Flying with one engine’: why global food supplies are at risk despite falling crop prices… Geopolitical uncertainty, volatile energy markets and climate change all pose a threat…
“Food prices were already elevated before Russia’s full-scale invasion of Ukraine early last year, due to droughts and coronavirus pandemic-related hoarding by governments and businesses…
“…a potential El Niño next quarter . . . could wreak havoc on weather around the world,” said Kona Haque, head of research at commodity trader EDF Man. “Tropical developing countries have the potential to be most hit, with Asia turning drier under El Niño conditions, while South America could see excessive rainfall.”
“Relatively low grain inventory levels have added to analysts’ concerns about global food supplies.
“Oil and gas investment needed for another 30 years, BP warns…
“”“Natural declines in existing production sources mean there needs to be continuing upstream investment in oil and natural gas over the next 30 years,” wrote Spencer Dale, chief economist at BP, in the report… The warning comes as investors increasingly turn their backs on fossil fuels, with close to $40 trillion in global capital committed to divesting from fossil fuel companies.”
“Commodity trade costs surge as industry seeks up to $500bn in extra finance.
“High interest rates, volatile prices and the war in Ukraine have made it significantly more expensive to finance commodity trade… Changing trade patterns have made the global flow of raw materials less efficient and more costly to finance and are also likely to push up the price of commodities for consumers, according to a new study by consultancy McKinsey.”
“Central banks prepare to lift interest rates to 15-year highs as investor jitters grow.
“The world’s leading central banks are poised to raise interest rates this week to their highest levels since the financial crisis, stoking anxiety among some investors that this month’s record bond market rally underestimates the growing evidence of persistent inflation.”
“US trade shifts on Covid and China tensions, but no ‘decoupling’ yet…
“While security concerns have escalated and US imports from China fell after Washington and Beijing imposed tit-for-tat tariffs, trade has since climbed again. The numbers could rise further when 2022 trade data is released next month, pointing to how interlaced the world’s two biggest economies are.”
“A top Republican in the United States Congress says the odds of conflict with China over Taiwan “are very high” after a US general caused consternation with a memo suggesting war would happen in two years’ time.
“In a memo dated February 1 but released on Friday, General Mike Minihan, who heads the Air Mobility Command, wrote to the leadership of its roughly 110,000 members saying: “My gut tells me we will fight in 2025.””
“Americans are going ‘recession brunette’ as economic woes force cutbacks on luxuries like hair-coloring.
“While an outright recession still hasn’t come, Americans are feeling the impacts of a slowing economy in their wallets. Inflation is still high, albeit cooling, but savings are dwindling, thousands of Americans are getting laid-off, and credit card debt is climbing.”
“The Bank of England is set to raise rates again and we could still face a 2008 crunch…
“The illiquidity of markets is something we all need to deal with. We are probably at a point over the next few months where we are going to find out the outcome of this. Using fixed income terminology, we are probably at the point of maximum convexity. This means we are in an unstable equilibrium. Something must happen.”
“London £4 trillion stock market sees profit warnings hit financial crisis levels…
“Against a backdrop of skyrocketing energy prices and slowing demand amid cost of living crisis, businesses have had to tell shareholders to brace for profits to come in under forecasts some 305 times over the last year, a 50 per cent increase from the 203 profit warnings issued in 2021…”
“Frankfurt, Germany: Germany’s economy unexpectedly shrank at the end of 2022 due to the fallout from the war in Ukraine, official data showed Monday, even as hopes grow an energy crisis is easing.
“Europe’s top economy contracted 0.2 percent in the October to December period compared to the previous quarter, according to preliminary figures from statistics authority Destatis.”
“Hungary’s soaring inflation puts squeeze on Viktor Orbán
“With long queues at petrol pumps, teachers blocking Budapest streets in a strike over pay and small-business owners demonstrating against tax rises, Hungary’s economic woes and the resulting public anger have wrongfooted rightwing prime minister Viktor Orbán and threaten to escalate his dispute with Brussels over frozen funding.”
“Historic Crash for Memory Chips Threatens to Wipe Out Earnings…
“The unprecedented crisis isn’t just wiping out cash at industry leaders SK Hynix Inc. and Micron Technology Inc., but also destabilizing their suppliers, denting Asian economies that rely on tech exports, and forcing the few remaining memory players to form alliances or even consider mergers.”
“Taiwan’s export orders likely contracted again in December and at a faster clip than the previous month, a Reuters poll showed on Monday…
“The median forecast from a poll of 13 economists was for export orders to fall by 25.6% from a year earlier… Taiwan’s export orders, a bellwether of global technology demand, fell by a worse-than-expected 23.4% in November.”
“China’s 2022 smartphone shipments the lowest in 10 years, research firm says…
“The total number of devices shipped was 286 million, down from 329 million in 2022. That meant total 2022 sales volume was the lowest since 2013 and the first time since then that annual sales have dropped below 300 million, IDC said in a report.”
“The collateral damage ranges from complications in paying Russian companies on which Oyun-Erdene says Mongolia is “wholly dependent” for fuel, to the loss of revenues from airlines that once flew over the country.”
“Pakistan lifts petrol, diesel prices by 35 rupees a litre.
“Pakistan’s ministry of finance announced on Sunday petrol and diesel prices would rise by 35 rupees ($0.1400) a litre after the country’s currency value plummeted this week when price caps were removed. The decision came days before an International Monetary Fund mission will visit Pakistan…”
“Iran: Nationwide uprising marks 135 days; People protest severe gas shortages.
“Locals in Tehran’s numerous neighbourhoods, including Sadeghiyeh and Tehranpars, started singing anti-regime chants on Friday night that were directed primarily against Khamenei and the whole mullah system”
“Drones target Iranian weapons factory in central city of Isfahan…
“There was no immediate confirmation about who was responsible, but the attacks appear to fit a pattern of strikes against strategic sites across Iran that have been attributed to Israel in recent years. A fire erupted at a fuel refinery in the north-west of Iran at about the same time…”
“Tens of thousands of Israelis have protested across the country against the right-wing government for the fourth consecutive week.
“The latest rally was held on Saturday, with demonstrators carrying Israeli flags on Kaplan Street in Tel Aviv chanting “No to dictatorship” and “Democracy”.”
“UN agency warns of record rates of hunger in Syria…
““Hunger soars to 12-year high in Syria,” as 70 percent of the population might soon be “unable to put food on the table for their families,” the statement said. “Syria now has the sixth highest number of food insecure people in the world,” the WFP added, with food prices increasing nearly 12-fold in three years.”
“How IMF loans keep Sisi afloat as Egypt sinks deeper into debt.
“Egypt has agreed three bailouts with the IMF under the government of President Abdel Fattah el-Sisi, in office since 2014. It is currently the second biggest borrower from the IMF after Argentina. The IMF deals came against the backdrop of a shortage in foreign currency and skyrocketing debts.”
“Moody’s cut Tunisia’s long-term foreign-currency and local-currency issuer ratings to Caa2 from Caa1 and changed the outlook to negative, the New York-based ratings agency said in a statement on Saturday. Caa ratings are judged to be of poor standing and are subject to very high credit risk.”
“As spiraling economic crisis drags on, Sudanese tighten belts…
“”We are trying to find cheaper alternatives to the food we normally consume,” said Soaad Bashir, a government employee and mother of four. “My income is meager, and expenses are too high,” said the 43-year-old who makes less than 200,000 Sudanese pounds per month.”
“[Nigerian] Petrol consumers have continued to groan under the burden of skyrocketing prices, as Premium Motor Spirit almost hit N400 per litre over the weekend…
“President Buhari had last week set up a 14-man committee that he would be heading to proffer solutions to the lingering fuel scarcity.”
“Nigeria cost-of-living crisis sparks exodus of doctors…
“”Imagine going to the grocery store one day, and everything has tripled in price? How do you even cope? You have a family at home. What do you cut out of the budget?” Oroma Cookey Gam tells me by Zoom, her face incredulous.”
“Ghana Set for World’s Biggest Rate Hike So Far This Year…
““We expect the Bank of Ghana to hike its policy rate by 200 basis points from 27% to 29% at its January meeting, following 250-basis point hikes at the two prior meetings,” Bojosi Morule and Andrew Matheny, economists at Goldman Sachs Group Inc., said in an emailed response to questions.”
“Haiti in turmoil as police riot over officer deaths.
“The Haitian government is under mounting pressure amid violent protests by police, who have accused acting Prime Minister Ariel Henry of inaction. The UN is considering sending troops to stabilize the nation in crisis.”
“1 killed in fresh clashes as Peru unrest toll rises to 65.
“One person was killed as hundreds of anti-government protesters clashed with the Peruvian police on Saturday in Downtown Lima amid an ongoing nationwide unrest that has roiled the South American country for weeks. “We regret the death of Víctor Santisteban Yacsavilca in today’s violent demonstrations,” Peru’s ombudsman tweeted.”
“China’s MMG flags production halt at Las Bambas in Peru due to protests…
“Peru, the world’s second-largest copper producer, has been gripped by growing unrest following weeks of sometimes violent anti-government protests triggered by the ouster of the country’s former president last month.”
“Mining giant ‘sorry’ over lost radioactive capsule in Australia.
“Mining giant Rio Tinto says it is working with authorities to try to find a radioactive capsule that went missing in Western Australia this month. “We recognise this is clearly very concerning and are sorry for the alarm it has caused,” the firm told the BBC.”
You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.
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.
“Climate Change May Usher in a New Era of Trade Wars. Efforts to mitigate climate change are prompting countries across the world to embrace dramatically different policies toward industry and trade, bringing governments into conflict.
“These new clashes over climate policy are straining international alliances and the global trading system, hinting at a future in which policies aimed at staving off environmental catastrophe could also result in more frequent cross-border trade wars.”
“UK must respond as prospect of transatlantic trade war looms large…
“Joe Biden’s Inflation Reduction Act …is a gigantic piece of pump-priming, a $369bn package dangling generous subsidies and incentives to stimulate the take-up and roll-out of green energy across the US… The EU… is horrified… Also unhappy is Canada… while Japan and South Korea have also been aggrieved. The act, then, threatens to spark a trade war.”
“Central banks are buying gold at the fastest rate in half a century.
“Central banks are stocking up. Three economists—Serkan Arslanalp and Chima Simpson-Bell at the International Monetary Fund, and Barry Eichengreen at UC Berkeley—have published a new report pointing out that gold, far from being on the way out as an international reserve currency, has been coming back in.”
“The Fed finds itself in a nasty hole… There is never a good moment for the US government to hit its ceiling for debt issuance… Now, however, is particularly inopportune timing for this fight.
“That is partly because big foreign buyers have quietly trimmed their Treasury purchases in the last year, and this might accelerate… It is also because liquidity has repeatedly vanished from the Treasuries sector at times of stress in recent years… This could easily reoccur in a debt-ceiling shock, since these structural problems remain (lamentably) unaddressed.”
“U.S. economy doesn’t look as good as GDP suggests…
“…a large increase in inventories, or unsold goods, generated about half of the growth in GDP the fourth quarter… A falling international trade deficit and higher government spending, meanwhile, also padded GDP in the fourth quarter… Even consumer and business spending wasn’t as strong as it looked.”
“Economy grows, even as U.S. braces for recession.
“…the coming year is peppered with potential landmines that could reshape the 2024 election, with most CEOs and Wall Street economists expecting a recession to hit later this year, triggered by the highest borrowing costs in decades.”
“UK Business Confidence Drops to Lowest Since Financial Crisis.
“Business confidence in Britain has sunk to its lowest level since the global financial crisis, according to a survey of accountants, amid persistently high inflation and fears that the country is already in a recession.”
“UK cost-of-living crisis pushes mothers to the brink…
“”We have suicidal mums… we have kids who just managed to come through the pandemic only to find this terrible cost-of-living crisis,” said Wester-Okiya. “Broken mums, broken homes, broken families. The mums are depressed, the kids are crying all the time.””
“[UK] Bankers’ pay rises three times as fast as nurses’ since 2008 crash, TUC finds.
“Bankers’ pay has risen more than three times as fast as nurses’ pay since the 2008 financial crisis, according to an analysis by the TUC, which said low paid nurses are being forced to rely on handouts from food banks.”
“Thousands of doctors, nurses, teachers and taxi drivers took to the streets of Barcelona and other major Catalan cities on Wednesday, pointing out their poor working conditions and low wages.
“Barcelona saw the protests of more than 15,000 doctors and nurses, according to official figures, to avoid, as they said, the collapse of the region’s health system.”
“Ukraine’s harvest of grains and oilseeds will see further declines in 2023 as Russia’s invasion drags on, an industry official warned on Thursday, putting further pressure on global prices for essential foodstuffs.
“Planting acreage will again shrink and the total harvest is forecast at 53 million tonnes for 2023 after 65 million tonnes last year… Ukraine’s farmers had produced a record 106 million tonnes in 2021…”
“New Zealand drink makers slash production as CO2 shortage strikes.
“A temporary shutdown of New Zealand’s only liquid carbon dioxide plant has prompted beer and soda makers to slash production at the height of summer and warn of drink supplies drying up.”
“The Bank of Japan is facing a fresh headache in the dysfunctional local bond market — it has become so illiquid that some securities are being kicked out of an important global index.
“Japanese government bonds expiring in March 2032 and March 2024 are among the issues that have been booted out of the World Government Bond Index…”
“Korea’s GDP shrinks 0.4% in Q4, 1st contraction in 10 quarters.
“The Korean economy contracted 0.4 percent in the fourth quarter of 2022 compared to the previous three months, with the twin engines of growth ― private spending and exports ― declining simultaneously amid a global economic slowdown, the Bank of Korea (BOK) said Thursday.”
“Hong Kong exports slump 28.9 per cent in December, marking biggest monthly drop in 7 decades.
“Hong Kong exports fell a staggering 28.9 per cent year on year in December, the biggest monthly drop in seven decades, amid a deteriorating external environment and disruptions to cross-boundary land transport. The decline followed a drop in November, when exports contracted 24.1 per cent…”
“Soaring prices and smuggling: The Philippines are in an ‘onion crisis’…
“Onions now cost more than meat in the Philippines. As the country undergoes near-unprecedented levels of inflation… The shortage and consequent price surges come after billions of pesos worth of crops were destroyed by a series of typhoons in 2022.”
“Pakistan’s economy nears collapse as foreign currency reserves plunge…
““Every day matters now. It’s simply not clear what the way out is,” said Abid Hasan, a former adviser to the World Bank. “Even if they get a billion [dollars] or two to roll over . . . things are so bad that it’s going to be just a Band-Aid at best.” …Pakistan argues that pushing through painful austerity measures while it is recovering from the floods is impractical…”
“Gas shortage renders Iran’s air quality ‘unbreathable’ due to mazut pollution…
“The lack of natural gas for power plants in Iran has another side effect beyond the cold and darkness across Iran. It has polluted the air with toxic elements. Faced with massive shortages, Iranian authorities are running the engines in the power plants to generate as much electricity as possible by burning “mazut”, a polluting, cheap and low-grade heavy fuel oil.”
“Gov’t mismanagement, external pressures as Arab currencies crash…
“The Iraqi dinar has lost 7 percent of its value since mid-November, leading to the sacking of the central bank governor on Monday. In September, the Tunisian dinar reached a record low versus the dollar… Meanwhile, the currencies of other countries, including Syria, Sudan, Lebanon and Egypt, were among the world’s worst-performing currencies in 2022.”
“Cameroon: Memvé’éle dam’s low production leads to rolling blackouts…
“…six of Cameroon’s ten regions will be left in the dark from time to time over the next two months, impacting economic activities and household comfort. Sources revealed that the Memvé’élé dam is forecasted to not reach its 211 MW installed capacity this year, due to the low flow of the Ntem River…”
“[President] Buhari Gets 78-Hour Ultimatum To Resolve [Nigeria’s] Fuel Crisis.
“A coalition of civil society organisations operating under the auspices of Civil Society Coalition for Economic Wellbeing and Good Governance, yesterday issued a 78-hour ultimatum to President Muhammadu Buhari to end fuel scarcity or face mass protest.”
“Thousands march in Cape Town to protest energy crisis.
“The demonstrators gathered in the centre of the financial capital of Africa’s most industrialised nation to march on the headquarters of the ruling African National Congress (ANC) party… Some held signs reading “enough is enough”, “power to the people” and “load-shedding is killing jobs.”
“Photos: Power cuts grinding South Africa’s food sector to a halt.
“From dairy farms unable to keep milk refrigerated to chickens suffocating en masse as ventilators fall idle, an energy crisis is taking a heavy toll on South Africa’s food sector, industry groups say. Record power cuts have caused shortages of some staples…”
“The rolling blackouts in South Africa are jeopardising the mining output in South Africa – one of the few things our country has left to rely on.
“According to Statistics SA, mining output decreased by 9% year-on-year in November 2022 and, so far, loadshedding in 2023 strongly indicates that the worst is yet to come, threatening platinum and palladium supplies in the top miner…”
“Latin America’s Mining Troubles Add to Copper Supply Concerns.
“From Peru’s social unrest to Panama’s industry intervention, Latin America is becoming a trickier destination for big diggers… Copper isn’t the only mineral in the crosshairs… We may be only at the start of a new wave of popular disruption and resource nationalism with which miners — and the wider world — will have to contend.”
“Peru faces food, fuel shortages as Boluarte defiant.
“Shortages in Peru of basic products, including increasingly expensive fuel and food, mount further Wednesday, as the president remained defiant in the face of relentless protests. Dozens of roadblocks are hindering freight deliveries to the country’s south…”
“Credit ratings agency Moody’s reported that Argentina’s US$1 billion sovereign debt buyback announced last week constitutes “a default under our definition”.
“The agency called the buyback, which mainly involves two dollar-denominated bonds that mature in 2029 and 2030, a “distressed exchange,” which qualifies as a default according to their criteria.”
“Haiti police block streets, break into airport to protest officer killings.
“Haitian police officers on Thursday blocked streets and forced their way into the country’s main airport to protest the recent killing of officers by armed gangs expanding their grip on the Caribbean nation.”
“Multiple crises unleash one of the lowest global economic outputs in recent decades, says UN report.
“A series of severe and mutually reinforcing shocks — the COVID-19 pandemic, the war in Ukraine and resulting food and energy crises, surging inflation, debt tightening, as well as the climate emergency — battered the world economy in 2022. Against this backdrop, world output growth is projected to decelerate from an estimated 3.0 per cent in 2022 to 1.9 per cent in 2023, marking one of the lowest growth rates in recent decades…”
You can read the previous “Economic” thread here. I’ll be back over the weekend 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.
“The international business community expects a challenging 2023 marked by geopolitical tensions, high inflation and the energy crisis, according to the Eurochambres global economic survey published Wednesday.
“The Eurochambres’ report, based on the responses of trade and commerce organisations representing around 70% of world GDP, shows prolonged geopolitical tensions and instability as the top challenges for the global economy this year.”
“A Summer of Sovereign-Debt Crises Could Be Coming. Is the Fed Ready?
“…The truth of the matter is that for different reasons we could have debt crises as early as this summer in the world’s three largest sovereign bond markets: the United States, Japan, and Italy.Should any of these crises occur, they could shake up currently illiquid world financial markets. They could do so in much the same way as the recent U.K. gilt-market meltdown in the wake of former Prime Minister Liz Truss’s ill-advised budget shook up U.K. financial markets.”
“The leveraged loan ‘downgrade wave’ is starting as era of cheap debt fades.
“A credit downgrade wave has begun to hit the highflying $1.4 trillion U.S. leveraged loan market as the Federal Reserve’s rapid pace of interest rate hikes threatens companies hooked on cheap debt… warning signs of potential stress have emerged as companies with shakier finances navigate a slowing U.S. economy and a higher interest rate world.”
“A key barometer for the health of the economy continues to flash a recession warning sign, indicating a downturn is in store for the US in the near future. A growing number of business leaders agree the US economy is getting worse.
“America is not in an official recession — not yet, anyway — but the Conference Board’s Leading Economic Index declined for the 10th consecutive month…”
“Doomsday prepper has enough food to survive five years in case of disaster…
“For Gubba who lives just outside Seattle in Washington, USA, worrying about the end of the world is more than a once-a-year thing. She keeps the pantry on her 30-acre farm packed with cans, rice and pasta at all times, deploying oxygen absorbers and freeze-drying techniques to keep it all edible for as long as possible.”
“UK Asks Consumers to Cut Energy Use as London Freezes.
“The UK grid is asking some households to cut energy use on Monday — a request which is likely to be extended Tuesday — as a plunge in wind power and freezing temperatures across the country test its ability to keep the lights on.”
“UK borrowing pushed to new record amid energy crisis and debt bill.
“British government borrowing shot up to a December record on the back of a climbing debt interest bill and the cost of energy subsidies for households and businesses. Official figures show public sector borrowing hit £27.4 billion last month, the highest for December since equivalent records began…”
“There are growing fears that 2023 could see a wave of company collapses as the cost of living crisis continues [UK].
“The number of firms on the brink of going bust jumped by more than a third at the end of last year, said insolvency firm Begbies Traynor. It expects this number to rise due to higher costs, firms repaying Covid loans and consumers cutting back.”
“France to move ahead on pension reform despite protests.
“France’s government says it will continue with plans to hike the retirement age by two years to 64, among other reforms. It says this is necessary to restore economic balance — but unions strongly disagree.”
“Italy Braces for Disruption as Gas Stations Begin Strike.
“Italy is bracing for two days of disruptions after gas station operators across the country started a strike late Tuesday to protest against a new policy introduced by Prime Minister Giorgia Meloni’s government… Italy’s strike comes on the heels of widespread labor protests in the UK and following strikes in France against President Emmanuel Macron’s pension reform.”
“The Dutch government plans to close the Groningen gas field this year despite Europe’s precarious supply position. Groningen is the largest gas field in Europe…
““We won’t open up more because of the safety issues,” Hans Vijbrief told the FT. “It is politically totally unviable. But apart from that, I’m not going to do it because it means that you increase the chances of earthquakes, which I don’t want to be responsible for.””
“Germany is still years from substituting Russian pipeline gas imports with liquefied natural gas capacities, according to estimates by the country’s Economy Ministry…
“But it will take until 2026 for Germany to install 56 billion cubic meters of domestic LNG import capacity, about the same it imported by pipe from Russia in 2021…”
“Is Europe Sleepwalking Into Another War? The continent’s last major conflict in the Balkans never stopped smoldering, and a fragile peace is at a precipice…
“…in a tinderbox of division and mutual distrust, a small spark can easily become a raging fire. A diplomat in Belgrade, who requested anonymity because he was not authorized to speak publicly, said it was shocking to watch Europe flirt with a second conflict in recent months.”
“The Doomsday Clock reveals how close we are to total annihilation.
“On Tuesday, the clock was set at 90 seconds until midnight — the closest to the hour it has ever been, according to the Bulletin of the Atomic Scientists, which created the clock in 1947. Midnight represents the moment at which we will have made Earth uninhabitable for humanity.”
“Australian inflation hits 33-year high on energy costs and tourism rebound…
“Official data on Wednesday showed that inflation rose 7.8 per cent year on year in the October to December quarter, the highest rate since 1990. The reading will dash hopes of a pause in rising interest rates, which have climbed 3 per cent since May, putting pressure on household finances.”
“Bank of Japan Owns More Than 100% of Some Debt as Bonds Go Round and Round.
“Japan’s broken bond market continued to throw up anomalies with central bank ownership of some government debt exceeding the amount outstanding, according to its latest data… How the central bank can own more than 100% of a bond is down to double counting…”
“Kepco debt crisis exposes South Korean vulnerabilities…
“Unless prices are raised much further Kepco’s debts are likely to mount. By crowding out other borrowers, the scale of Kepco’s bond issuance has already contributed to an autumn liquidity crunch that triggered government and central bank interventions in October last year. But if prices are raised substantially, this could not only feed inflation but also weaken the country’s prized export competitiveness.”
“Chinese migrant workers face crackdown for ‘malicious’ protests over unpaid wages…
“More than a dozen cities across China have in recent weeks threatened to punish workers who take “extremist” measures, such as protests blocking traffic or outside government offices, to get the money they are owed.”
“Natural Gas Shortages Hit China as Temperatures Plunge.
“Local governments starved for cash after enormous spending on costly “zero Covid” measures cannot afford to keep up adequate supplies of gas… The lack of natural gas, which is used widely across China to heat homes and businesses, has angered tens of millions of people and spilled over into caustic complaints on social media.”
“As Uzbekistan freezes, is it exporting valuable gas to China – or not?
“As Uzbekistan freezes amid rampant power shortages in its coldest winter for half a century, there is a million dollar question on the lips of its shivering citizens. Is the government exporting gas that could be powering heating plants and pumping warmth into people’s homes?”
“Pakistan’s economic crisis forcing its army to retreat from Balochistan…
“To confirm the report of the Pakistan army’s withdrawal from Kahan, an oil-rich region in Kohistan Marri, the Hamgaam News contacted the Baloch Liberation Army (BLA) sources which confirmed that the army has abandoned several of its check posts from Kahan and adjoining areas including some of its main cantonments.”
“According to the reports by The News International newspaper, cash-strapped Pakistan has spent $1.2 billion on the imports of transportation items like luxury cars and electric vehicles during the last six months.”
“Iraq sacks central bank governor as dinar slides in value.
“Iraq has dismissed the governor of the Central Bank of Iraq and replaced him with the monetary authority’s former chief as the government tries to stem a big decline in the country’s currency.”
“‘Eggs Are Luxury Items, Avoid Buying Rice in Bulk’: Egypt Heads towards a Financial Crisis.
“Egypt is facing a financial crisis mostly because it has allowed the military to run a parallel government… Sisi commissioned the building of a new capital, 45kms from Cairo, and in that new city he has given contracts to companies associated with Egyptian military to build Africa’s tallest skyscraper and a mega-mosque. He also purchased a jumbo jet for himself worth $500m…”
“South Africa Government Sued by Opposition Over Power Crisis.
“South Africa’s biggest labor union and three opposition parties sued the nation’s president, the energy and public enterprises ministries and power utility Eskom Holdings SOC Ltd. over their approach to ending a 15-year energy crisis.”
“South Africa Inquires About Rapid Deployment of Power Ships.
“South Africa made fresh inquiries about securing electricity supply from Turkey’s Karpowership as it battles its worst ever power outages, according to people familiar with the situation. The approach follows a stalled attempt to procure 1,220 megawatts of emergency power from the company, a process that’s been mired in legal battles…”
“Venezuelan public workers resume protests to demand pay hike.
“Thousands of public employees took to the streets again in a number of Venezuelan cities on Monday to commemorate the 65th anniversary of the country’s democracy and to demand that the government give them a pay hike that “allows (us) to live with dignity.””
“Violent Demonstrations Roil Peru’s Southern Copper and Tourism Heartland.
“The focus of Peru’s violent unrest shifted back to the impoverished rural south after mass demonstrations in Lima last week failed to unseat the fragile government of President Dina Boluarte… The copper-rich south of Peru is the heartland of the country’s mining industry, as well as its tourism sector.”
“As deadly protests continue, Peru’s government faces crisis…
“… the burning question on the minds of millions of Peruvians is: How does their nation overcome this deadly political impasse? “”I don’t see another path forward that doesn’t mean more repression, possible loss of life or extreme instability, impasse and paralysis.””
You can read the previous “Economic” threadhere. 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.
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About This Site
Weekday updates on both climate change and the global economy. Stay current with what’s happening around the world with a quick scan of top news.
“Global pension assets record largest annual decline since the global financial crisis.
“Soaring energy prices triggered by the Russia-Ukraine conflict could push up to 141 million more people around the globe into extreme poverty, a study has found.
“Europe to face intense competition for gas with China this year, Shell warns… Energy giant says invasion of Ukraine has caused ‘structural shifts’ in gas market…
“Pentagon’s top China official to visit Taiwan amid rising bilateral tensions.
“Taiwan reports Chinese balloon found on northern island.
“Britain Wargames a Crash Far Worse Than Covid If Chip Supplies [from Taiwan] Are Shut Off…
“Taiwan’s Director of Chinese Affairs Dr Lai Chung has warned Australia could be China’s “next target” if Beijing successfully invades and takes over Taiwan.
“Russia has started deploying tactical nuclear weapons-armed vessels in the Baltic Sea for the first time in three decades, according to a Norwegian intelligence report…
“We Are Not Frightened Enough – Nuclear Weapons And The Horrors They Pose… New survey reveals how the public understanding of “nuclear winter” is dangerously low…
“U.S. household debt jumps to record $16.90 trillion.
“Tuesday Morning, the discount home goods retailer, filed for Chapter 11 bankruptcy protection Tuesday, its second bankruptcy in three years.
“Fears for the futures: half of British youth believe they will never earn enough to support a family…
“Critical care nurses in England join strikes as pay dispute deepens.
“Greece offers more aid to inflation-hit pensioners and businesses.
“Albania has third anti-government protest this week, PM called to resign.
“Singapore’s non-oil domestic exports plunged 25% year on year in January — their largest drop in 10 years.
“Japan’s Trade Deficit Smashes Record Amid Global Slowdown.
“Amazon pollution: the stain on Ecuador’s oil boom.
“Peru protests jolt mine activity with Las Bambas, Antapaccay hit hardest.
“Chile’s government cuts estimate for 2023 GDP.
“Argentina faces a historic contraction of citrus fruits in the domestic market.
“Food Prices Hit 14-Year High as South Africa Power Cuts Escalate…
“Scores Killed, Injured in Clashes in Oil-Rich Somaliland Region…
“Two people died Thursday in clashes between anti-junta protesters and security forces in Guinea [also oil-rich]… with the country’s opposition coalition reporting “many arrests” and injuries from live ammunition.
“Police fire tear gas at supporters of Senegal opposition leader Sonko.
“Rioters have attacked bank ATMs and blocked roads in three Nigerian cities as anger spilled on the streets over a scarcity of cash, just days before the country’s general election.
“Ghana facing the worst economic catastrophe in our lifetimes – Kofi Bentil to Akufo-Addo…
“Twelve years after Yemen uprising, people’s dreams are shattered.
“Egypt’s economic woe spreads across all classes.
“Lebanese Depositors Smash Up, Burn Beirut Banks.
“Iran protests flare in several cities amid continuing unrest…
“Impoverished Afghans Turn To Booming Crystal-Meth Industry To Eke Out A Living…
“How Pakistan is taking desperate economic measures for IMF bailout.
“Sri Lanka hikes power prices by 66% hoping to gain IMF support.
“The Managing Director of the IMF warned that we need to “think of the unthinkable,” as we live in “a more shock-prone world” impacted by the Covid-19 pandemic, Russia’s invasion of Ukraine and the recent earthquake across Syria and Turkey…
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