Daily updates on climate change and the global economy.

26th February 2022 Today’s Round-Up of Economic News

Russia’s War and the Global Economy… a global stagflationary recession is now highly likely. Analysts are already asking themselves if the Fed and other major central banks can achieve a soft landing from this crisis and its fallout. Don’t count on it.

“The war in Ukraine will trigger a massive negative supply shock in a global economy that is still reeling from COVID-19 and a year-long build-up of inflationary pressures. The shock will reduce growth and further increase inflation at a time when inflation expectations are already becoming unanchored.”


How will Russia’s invasion of Ukraine hit the global economy? Soaring energy prices alone could tip the world into a second recession in three years

“A conflict that could develop into Europe’s biggest since the second world war has shattered hopes of a strong global economic recovery from coronavirus at least in the short term.”


Global central banks were on the same page. Ukraine may reshape that.

“The well-scripted turn by global central banks towards tighter, post-pandemic monetary policy has been thrown into doubt by Russia’s invasion of Ukraine, a geopolitical upheaval likely to be felt differently across the world’s major economic centers.”


The world is bracing for a global cyberwar as Russia invades Ukraine.

“As Russia steps up its cyberattacks on Ukraine alongside a military invasion, governments on both sides of the Atlantic are worried the situation could spill over into other countries, becoming an all-out cyberwar.” [Anonymous collective has already declared cyberwar on the Russian State and yesterday disabled several sites, including, for a while, RT]


Global oil tanker rates jolt higher on high fuel prices, risk premiums.

“Oil tanker rates are soaring globally as traders scramble to cope with jitters over possible disruption in Russian supplies, as well as war risk premiums for ships plying the Mediterranean region following Moscow’s invasion of Ukraine.”


Fertilizer prices are skyrocketing on concerns that Russia’s invasion of Ukraine will curtail global supplies…

“Russia was the world’s largest exporter of nitrogen products in 2021. The risk of disruption to shipments comes as costs for fertilizers have already been soaring because of high prices for natural gas in Europe, which forced some plants to halt or curtail production.”


Ukraine Crisis Sparks Frenzy in Global Agriculture Trade.

A dramatic rally in crop prices this week sparked by the Russia-Ukraine crisis is signaling more pain ahead for grocery shoppers already feeling the strain of soaring food costs. Prices of staples from wheat to edible oils have rocketed to fresh highs…”


Key [US] inflation gauge hit 6.1% in January, highest in 40 years…

“An inflation gauge that is closely monitored by the Federal Reserve jumped 6.1 percent in January compared with a year ago, the latest evidence that Americans are enduring sharp price increases that will likely worsen after Russia’s invasion of Ukraine.”


UK households face biggest fall in living standards since 1950s, say experts.

“UK households could suffer the biggest annual decline in their living standards since the 1950s as the Russian invasion of Ukraine pushes up global energy prices, experts have warned.”


Europe’s Energy Bill Will Near Record $1.2 Trillion in 2022, Citi Says.

“Based on current forward prices, the region’s total primary energy bill is now set to approach $1.2 trillion this year, Citigroup Inc. said in a report. That reflects Europe’s enduring reliance on imports to meet demand, with its swift expansion of renewable power so far causing little dent in that dependence.”


Fruit and vegetables jammed by truckers’ strike in Italy.

“The hauliers’ protests, which began in Sicily and the Puglia region on Monday 21 February with spontaneous blockades of loading/unloading and handling of goods, also seem to be expanding to other Italian regions and are having their first effects on supplies. The cause of the strikes are fuel price increases…”


Italian Premier Mario Draghi said Friday that his government was getting ready for an eventual energy crisis following Russia’s invasion of Ukraine

“”The emergency measures include greater flexibility in gas consumption, suspensions in the industrial sector, gas-consumption rules in the thermoelectric sector.”


Chernobyl isn’t the biggest nuclear risk. Ukraine’s active nuclear power plants are.

“… four power plants, located near towns and cities in western and southern Ukraine, contain 15 operating nuclear reactors. The concern is that a nuclear disaster could occur if during the conflict they were accidentally damaged, left unmaintained or cut off from the power grid needed to cool the reactors.”


Ukraine Swaps Signal 90% Chance of Default as Russia Attacks.

“Signs of distress in Ukraine’s debt markets deepened after Russia attacked, with credit-default swaps signaling about 90% probability of default within five years… Meanwhile, the cost of insuring Russia’s government bonds surged on Thursday to the highest since at least 2009…”


The Russian central bank has purchased millions of roubles to prevent the collapse of the Moscow stock exchange and prop up the currency after it plunged to an all-time low of 89.60 against the dollar.

“In a scramble to prevent the invasion of Ukraine pushing Russia’s financial system into meltdown, officials in Moscow closed the stock exchange…”


In North Africa, Ukraine War Strains Economies Weakened by Pandemic.

Egypt imports most of its wheat from Russia and Ukraine, and is looking for alternative suppliers. And Tunisia was struggling to pay for grain imports even before the conflict… In a region where bread keeps hundreds of millions of people from hunger, anxiety at the bakeries spells trouble.”


Ukraine crisis worries Lebanon over its wheat reserves.

“Lebanon has wheat reserves sufficient for one month at the most, with Ukraine accounting for up to 60 percent of the crisis-hit country’s wheat market, the economy minister said on Friday.”


Iran, Iraq, Egypt rely on Ukraine for sunflower oil. Middle Eastern sunflower oil imports could soon be affected by the Russian attack on Ukraine. Ukraine was the largest exporter of sunflower seed and the related safflower oil in 2019, accounting for 45.8% of global exports.”


A record number of people in Syria are in need of humanitarian assistance more than a decade into a devastating civil war, the United Nations said.

“The country is also grappling with an economic crisis compounded by Western sanctions, the Covid-19 pandemic and a sharp fall in the value of the Syrian pound.”


Sobering budget speech [by South African’s Finance Minister] assesses debt, grants and failing SOEs…

Worryingly for the country, debt is forecast to rise to R5.4 trillion over the medium term from R4.3 trillion, which is already incurring debt-servicing costs of R330 billion a year, which is more than the government spends on health, police, or basic education.”


Another blackout looms in Kenya as Kenya Power workers threaten strike.

“The workers are protesting against Kenya Power’s plan to lay off as many as 2,000 staff, or 20% of the company’s workforce. Local media reported that the company resorted to this course of action in a desperate bid to cut cost and make up for lost revenue following a 15% reduction in electricity tariff back in January.”


Pakistan: Farmers continue their protest in Lahore over unavailability of fertiliser, other issues.

“Farmers vowed to continue their protest against exorbitant hike in petroleum prices, unavailability of fertiliser and higher prices of the compost as police thrashed and arrested hundreds of them at the southern entrance of the Lahore city…”


Paralysed banking system pushing Afghanistan towards collapse.

“Afghanistan is inching closer towards economic collapse six months after the Taliban seized power, the Red Cross said on Friday, with a paralysed banking system stymieing international efforts to get financial aid into the war-ravaged country.”


Fuel Shortages Hit Parts of Myanmar Due to Road Closures, Global Price Hikes.

“A Putao resident who requested anonymity said, “We couldn’t buy fuel even if we had the money and were able to afford it.” One bottle of petrol holding around 0.75 to 1 liter costs 10,000 kyats ($5) and 1 gallon costs 60,000 kyats ($30) according to the Putao resident.”


Vietnam Grapples With Fuel Shortages…

“The tight fuel supply in Vietnam was the result of the limited production at Nghi Son refinery, one of the two refineries in the country with a capacity to process 200,000 barrels of crude. Due to a cash crunch and disagreements among shareholders over how to pay for procuring crude, the refinery has been operating at reduced capacity since the middle of January.”


China on the Verge of Energy Crisis…

“Researchers at ANBOUND would like to point out that the deterioration of global energy security caused by geopolitical factors will not only affect Russia and the EU, but also affect China due to changes in the global energy supply and demand pattern.”


China’s Plans for Coal Could Be Upset by Surge in Energy Prices.

“The surge in international coal prices could upset China’s policy of linking its electricity rates more directly to the cost of its mainstay fuel, risking another blow to growth for the nation’s sluggish economy.”


The number of Chinese developers seeking debt forbearance from offshore creditors is expanding as Zhenro Properties and Jingrui Properties highlighted an ongoing credit crunch amid the worst industry slowdown in a decade…

“The latest troubles suggest efforts by policymakers to pump liquidity and ease borrowing costs have not come fast enough…”


Losses in Chinese debt markets are spreading beyond the battered real estate sector…

“Renewed concerns about the Chinese government’s crackdown on tech companies are compounding worries about everything from rising U.S. rates to the Russia-Ukraine conflict and weak consumer spending.”


Ukraine crisis could hit Argentina LNG imports, double energy deficit.

“Russia’s invasion of Ukraine could have an effect thousands of miles away on debt-laden Argentina’s fiscal balance, with a price spike for its natural gas imports set to more than double the South American country’s energy deficit to as high as $4 billion this year, analysts said on Friday.”


Cuban tobacco yield up in smoke amid fertilizer shortages.

“Sanctions-stricken and facing its worst economic crisis in nearly three decades, Cuba is running low on fertilizers and pesticides. The harvest “is not of a good enough quality,” Cabrera sighed as he showed AFP around his crop…”


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.

24th Feb 2022 Today’s Round-Up of Economic News

The world is sliding into a new Dark Age of poverty, irrationality and war.

Imperialism, war, irrationality, disease and economic dislocation: modernity is ending as it began. Vladimir Putin’s monstrous expansionism [some may find that a loaded term; I am trying to steer clear of the geopolitical point-scoring and focus on the practical fall-out] is the latest, terrifying reminder that human progress is far from inevitable, and that our wealth and technological advances rest on a set of extraordinarily fragile foundations…

“I’m sorry to disappoint you, dear reader, but there are no easy answers to prevent the world from sliding into a new dark age, and perhaps even in some cases none at all.”


Russia launches full-scale invasion of Ukraine as Biden says the ‘prayers of the world’ are with them.

“Russia has launched an invasion of Ukraine after President Vladimir Putin ordered a “specialised military operation” in the Donbas region. Sky News heard explosions in Kyiv and Kharkiv and understands that borders have been breached in at least four areas of Ukraine.”


Global Banks Poised for Turmoil as West Hits Russia With Sanctions.

““The issue here is not just the immediate impact on the financial markets, but the fact that it’s almost impossible in the near term to disentangle” Russia from global trade, Elina Ribakova, the institute’s deputy chief economist, said in an interview. “There is room for contagion.””


Russia’s incursion into Ukraine heightens the chance of policy mistakes by global central banks.

“The geopolitical uncertainty comes at a difficult time for the world’s central banks. A number have already begun the process of tightening monetary policy in an attempt to combat record-high inflation, but spikes in oil and natural gas prices will likely exacerbate the issue even further.”


World Economy Inflation Shock Set to Worsen From Oil at $100.

“Oil’s surge to $100 a barrel for the first time since 2014 represents a double-blow to the world economy by further denting growth prospects and driving up inflation. That’s a worrying combination for the U.S. Federal Reserve and fellow central banks…”


Energy Crisis Worsens As Russia Delays Coal Supply.

“Coal prices are rising again as the Russia-Ukraine crisis has put energy markets on alert and Russian coal producers struggle to get their coal via railways to export terminals due to COVID-related railway staff shortages.”


Food inflation risks balloon with Ukraine attack as prices of wheat to palm oil soar.

“A spectacular rally in crop prices from wheat to palm oil has increased concerns that food costs are going to get a lot higher. Those fears only got worse on Thursday after Russian forces attacked targets across Ukraine. Both countries are key suppliers of grains and edible oils.”


Fertilizer Shortages Due to Russia-Ukraine Tension May Hit U.S. Growing Season.

“More price hikes for fertilizer are on the horizon as the Russia-Ukraine crisis adds to fears of global shortages, stoking concerns about rising food costs. Russia is a low-cost, high-volume global producer for all major fertilizers…”


As costs rise, majority of Canadians are changing their food-buying habits, survey finds.

“According to the Angus Reid Institute, 46 per cent of Canadian consumers are switching to cheaper brands at the grocery store, one-third are cutting back on meat, and one in five are buying less fresh fruit and fewer vegetables.”


‘Literally ravenous’: 25% of Irish families fearful over food poverty.

“For Nuala O’Connor, a chef at a Barnardos centre in Dublin, food poverty… the current situation, with more families struggling to make ends meet, is a throwback to harder times decades ago.”


UK debt interest bill leaps to highest January level since records began.

“A record debt interest bill for January has eaten into Rishi Sunak’s first ever budget surplus as markets predict that servicing costs will soar even further this spring… Following the figures, the Chancellor warned “there are further pressures on the public finances…””


UK manufacturing price pressures highest since 1976 – CBI.

“More British manufacturers plan to raise prices in the next three months than at any point since 1976, according to a survey on Tuesday that highlighted the inflationary forces that are buffeting the economy.”


Passengers using Heathrow airport fall to lowest level since 1972.

“The number of passengers travelling through Heathrow airport fell to 19.4 million in 2021, its lowest level for nearly 50 years, the airport has said as it reported a pre-tax loss of £1.8bn. Heathrow said it would need to charge airlines more…”


Russia shrugs off Germany’s Nord Stream 2 sanctions.

“Russia is confident it can shrug off Germany’s decision to halt certification of the Nord Stream 2 gas pipeline and believes EU efforts to diversify the bloc’s energy sources will fail, according to three people close to the Kremlin and its state-run gas monopoly Gazprom.”


Why a swift economic victory against Russia looks unlikely.

“Putin has been actively seeking to insulate Russia from the west ever since the invasion of the Crimea in 2014. Western imports of meat, fruit, vegetables and dairy were banned when sanctions were imposed… self-sufficiency has been accompanied by an attempt at diversification, with a deliberate policy pivot towards China.”


China ready to soften Russian economic blow from Ukraine sanctions.

“Financial analysts and geopolitical experts believe China will probably help Russia weather… sanctions, mostly through resource deals and lending by several state-owned banks, while seeking to avoid damage to its own economic and financial interests.”


China property developer sales ‘falling off a cliff’…

“Nikkei Asia reviewed 43 listed developers with over 100 billion yuan in contracted sales in 2020. All of the 31 companies that publish monthly data reported double-digit sales drops in January.”


Shimao shares, bonds tumble on fresh signs of liquidity stress.

“Shares and bonds of Shimao Group tumbled on Thursday, after a trustee said roughly $170 million worth of asset-backed notes guaranteed by the Chinese developer may not be redeemed on maturity.”


Natural Gas Prices Hit Record High In China…

“This could, in turn, create problems for Europe, which is still grappling with tight gas supply and dangerously low inventories, because Chinese LNG is trading at a premium to the Asian benchmark, and traders might be tempted to snatch up LNG cargos to sell to China.”


China’s Boost to Coal and Steel Alarms Climate Researchers…

” Xi told China’s core leaders that the nation’s climate goals shouldn’t clash with other priorities including securing adequate supplies of energy and materials, and that oil and gas output need to “grow steadily.””


A total of 18 building businesses, including one of Australia’s major construction companies Probuild, have collapsed after their South African parent company pulled all its financial support.

“…750 employees and thousands of contractors are impacted, with many padlocked out of sites across the country.”


Mexico’s economy struggles to bounce back after pandemic recession.

“As countries around the world seek to bounce back from the economic devastation of the COVID-19 pandemic, we are seeing mixed results. Mexico, the world’s 15th largest economy is having a particularly hard time…”


Scrounging for food in ‘hunger hotspot’ Colombia.

“Last month, a report by the UN’s Food and Agriculture Organization and the World Food Programme stated that “7.3 million Colombians are food insecure and in need of food assistance in 2022.” The list of 20 “hunger hotspots” also included Afghanistan, Ethiopia, Haiti, Somalia, South Sudan and Yemen.”


Cuba’s sugar industry headed toward worst season ever as production falters.

“Last year’s crop of 800,000 tonnes was the worst since 1908… The government has not been able to finance the sector’s needs – including inputs, irrigation and spare parts – due to tough new U.S. sanctions and the coronavirus pandemic.”


Social media users in Kenya are protesting the surge in food prices and other basic commodities in the country…

“Some social media users showed evidence of shopping lists which stated with prices of basic commodities like bread and cooking oil which has shot up in the last three years – with some goods twice or three times more expensive.”


Tunisia shortages bite as fiscal crisis looms.

“Tunisians are suffering delays to salary payments and shortages of grains, medicines and sugar, a foretaste, some economists say, of a rapidly looming public finances crisis that looks increasingly hard to avert.”


Pakistan govt ‘plans to’ borrow people’s gold for foreign exchange crisis.

“Prime Minister Imran Khan-led government is considering a proposal to borrow gold biscuits and bars from the people to increase Pakistan’s foreign exchange reserves that remain on a sliding path despite taking over USD 5 billion loans in the past three months from bilateral and multilateral creditors…”


Sri Lanka imposes rolling power cuts as economic crisis worsens…

“Sri Lanka’s Public Utilities Commission said it will shut off the country’s grid for four and a half hours on Wednesday after two hours of power cuts on Monday and Tuesday… In the past few days, many Sri Lankans have been forced to wait in long queues in the capital of Colombo and its suburbs to obtain fuel…”


Lebanese turn to public libraries to check out of financial crunch…

“At the Geitawi library, fine arts student Valentina Habis said funding should not overlook culture. “In the midst of economic collapse, we need cultural spaces… places that develop thought and culture, because culture is the basis of society,” she 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 a huge help, especially as the cost of living crisis is biting here in the UK.

22nd Feb 2022 Today’s Round-Up of Economic News

Russia’s invasion of Ukraine has begun meaning Britain will impose sanctions on Moscow, Sajid Javid has said this morning.

“Russian tanks and troops entered Ukraine’s breakaway eastern regions last night under the guise of a peacekeeping force after signing decrees recognising their independence. The order sending “peacekeeping missions” into Donetsk and Luhansk amounts to a de facto military invasion of the eastern corner of Ukraine.”


What’s at Stake for the Global Economy if Russia Invades Ukraine

“An outright attack by Russian troops could cause dizzying spikes in energy and food prices, fuel inflation fears and spook investors, a combination that threatens investment and growth in economies around the world.”


Oil marches towards $100 a barrel as markets watch Ukraine crisis deepens.

“Market commentators say the coming hours will determine the direction for energy costs – with any move towards sanctions and, worse, military conflict tipping oil and gas costs towards a big spike because of Russia’s hold over European supplies.”


Russia Is A Major Supplier Of Oil To The U.S…

“… the U.S. economy is more vulnerable to oil price shocks, while higher oil prices are a net benefit to Russia and Saudi Arabia. Various talking heads have suggested that there will be a $5-$20 premium on oil prices if Russia invades Ukraine.”


U.S. distillate fuel oil stocks are on course to fall critically low between now and the middle of the year, creating conditions for a potential spike in both crude and fuel prices, unless demand from freight firms falls.

“Distillate inventories slipped by another 2 million barrels last week to 120 million barrels, according to data from the U.S. Energy Information Administration.”


Drivers face fuel shortages as workers at UK’s largest refinery vote on strike action.

“Unite, the union, is balloting contractors at ExxonMobil’s Fawley refinery in Southampton following an “insulting” pay offer. The plant is one of the UK’s six major crude refineries which together supply the bulk of its petrol stations and airports.”


Transport for London has a “matter of days” to avoid bankruptcy after again failing to agree a long-term funding deal with Government, Sadiq Khan has warned.

“The emergency funding deal agreed in June last year was again extended over the weekend until February 25. It is the fourth short-term extension to be agreed.”


Bankruptcies return with a vengeance as British business comes off life support…

““There are some deep-seated challenges in the UK economy,” says Colin Haig, head of restructuring at accountancy firm Azets. “There are a number of supply chain issues. There are inflation pressures on the economy. And what’s happening in Eastern Europe is rattling people’s marginal propensity to spend.””


As inflation hits 30-year high, UK households start to buckle.

“After work in the evenings, Nicola Frape turns off the heating and huddles under a blanket with her daughter and a hot water bottle. Adding a layer costs nothing, she says, but leaving the boiler on drains her inflation-hit bank account.”


Germany Tipped Into Second Recession by Virus, Bundesbank Says…

““In contrast to previous waves of the pandemic, it’s not just the services sector that’s hit by restrictions and adapted behavior,” the Bundesbank said. Pandemic-related absence by workers will “markedly” hit activity in other areas too.”


Soaring Energy Prices Pose An Existential Threat To German Businesses.

Nearly one-fourth of Germany’s medium-sized enterprises fear they might not survive the soaring energy prices, a survey by the Federation of German Industries, BDI, showed on Monday. Industries across Europe have been suffering from the surging energy prices…”


How Europeans Are Responding to Exorbitant Gas and Power Bills.

“High energy prices in Europe are upending people’s lives. While some are installing solar panels, others are stoking their wood-burning stoves… The flow of gas could be interrupted now that the Kremlin has ordered Russian troops into separatist territories of Ukraine.”


Switzerland at risk of EU blacklist after Credit Suisse leak.

The fallout from a huge leak of Credit Suisse banking data threatened to damage Switzerland’s entire financial sector on Monday after the European parliament’s main political grouping raised the prospect of adding the country to a money-laundering blacklist.”


The $5 Trillion Inflation Time Bomb No One’s Talking About [Japan]…

“Earlier this month, the BOJ intervened to enforce its “yield-curve control” policy for the first time since 2018. For this, there are two clear takeaways. One, the idea the BOJ will be tapering anytime soon is rather fanciful. Two, Japan’s bond market could become a bigger risk to global financial stability than investors realize.”


China’s Great Economic Weakness…

Now it seems that 20% of China’s housing stock is unoccupied. Even if China now razes these excess structures, the debts will remain. Evergrande’s debt overhang is a part of this more general picture. Nor is housing the only area where central planning has missed the mark and created great waste.”


‘Go home’: Protests against foreigners resurface in South Africa.

“They turned up in a mob of several hundred at a migrant centre in South Africa’s Soweto township — unemployed, wielding weapons and angry with foreigners they accuse of taking their jobs.”


Thousands of Moroccans protest against soaring fuel prices and other costs…

“The North African kingdom is the latest of several countries where public anger has erupted over high global energy prices, which are driving inflation to decade-high levels around the world… The Moroccan demonstrations coincided with the anniversary of the wave of protests known as the February 20 movement, inspired by the Arab uprisings that took place around the region in 2011.”


Russian invasion risks pushing families across Middle East and North Africa into severe hunger.

“Russia is the largest exporter of wheat in the world, while Ukraine has significantly climbed the ranks in grain exports over the last decade. Families who already face skyrocketing food prices could see the cost of staple items climb even higher if supply chains are disrupted…”


Ethiopia dismisses ‘rumours’ Nile mega-dam will ‘starve Egypt and Sudan’…

“The Grand Ethiopian Renaissance Dam (GERD) is set to be the largest hydroelectric scheme in Africa but has been at the centre of a dispute with downstream nations Egypt and Sudan ever since work first began in 2011.”


Middle Eastern Oil Nations Hike Prices As Production Falters.

“When OPEC+ agreed on its 400,000 b/d monthly increases back in August 2021, the overwhelming expectation for the first months of 2022 was a gradual return to normality… Fast-forward to today and the world is facing a completely different picture…”


Scandal deepens as Lebanon’s central bank chief ducks court appearance.

“… last week, the veteran banker appeared to have vanished as State Security forces, charged with bringing him before a judge to be questioned over allegations of corruption and misconduct, struggled to locate him… The extraordinary events shocked even Lebanese…”


Farmers in Pakistan are holding sit-in protests in Lahore against a massive increase in petroleum prices.

“Protesters say the price-hike will financially squeeze middle- and working-class farmers who are already suffering from fertilizer shortages. In the Parliament, coalition partners and opposition alike criticized the decision to raise prices…”


Sri Lanka inflation hits record high as crisis worsens.

“Sri Lanka’s inflation hit a record high for the fourth consecutive month, official data showed Tuesday (Feb 22)… The record highs came as the South Asian island struggles to find dollars to finance essential imports, including food, fuel and medicines.”


Huge protests in Nepal sparked by US offer of $500m grant with no strings attached.

“Police used tear gas shells, water cannons and rubber bullets to disperse protesters who crashed into barbed wire barricades outside the parliament, leaving several injured on both sides.”


Soaring fuel prices complicate aviation sector’s recovery from the pandemic.

“The aviation and shipping sectors are among the most fuel-sensitive sectors. Airlines face challenging times and high fuel costs can influence their profitability path, while shipping companies operating vessels ‘on the spot’ are most vulnerable to rising costs.”


The global climate attention crisis.

“In November, governments committed to revisit their emissions goals in 2022… But with the threat of a war in Europe, the ongoing pandemic and a global energy supply crunch, there are concerns the climate crisis will slip off the global priority list.”


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.

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

An uneven economic rebound is complicating discussions among finance chiefs and central bank governors of the world’s biggest economies as they meet this week to navigate a fragile global recovery

Meanwhile, escalating tensions in Ukraine and the sharp increase in commodity prices pose fresh challenges for the global economy.


Central banks face a set of hard choices.

“…central banks face hard choices over how fast and far to raise rates. Move too early and they risk choking off growth, while doing nothing to counter cost pressures that are more to do with Covid-related bottlenecks and geopolitical tensions. Move too late and an even more aggressive approach may be required to tame inflation.”


Supply chain breakdowns stoking inflation are inflicting “harm” on the global recovery from the Covid-19 crisis, the world’s economic watchdog warned today.

“Swelling costs fuelled by choking supply bottlenecks pose a serious risk to derailing the economic rebound by cutting households’ spending power, the IMF has warned.”


Rising recession risk in the US may soon kill off global inflation.

““The Federal Reserve is tightening into a cyclical slowdown and the risks are rising,” said Lakshman Achuthan, head of the Economic Cycle Research Institute in New York. “Either the Fed will blink and give up on rate hikes or it will forge ahead until something breaks, meaning a stock market crash, or a recession, or both,” he said.”


Wall St banks fear inflation, asset price deflation, even recession.

“Wall Street’s biggest banks sounded a warning over the year ahead on Thursday, citing high inflation, credit concerns, asset price depreciation and companies postponing deals due to market uncertainty.”


The U.S. Will Be A Net Oil Importer In 2022.

“Higher net crude oil imports are set to make the United States a net petroleum importer this year again, as in 2021, after a historic shift of being a net petroleum exporter in 2020, the U.S. Energy Information Administration (EIA) said on Friday.”


3.7 million kids slipped back into poverty after the Biden child tax credit expired — and Congress isn’t restoring it soon…

“An analysis from the Center on Poverty and Social Policy at Columbia University indicated that 3.7 million kids fell back into poverty once the expanded child tax credit ended last year. The child poverty rate rose to 17% in January from 12% in December — a 41% increase.”


Canada roped in banks to quell protests – now what? Trudeau’s Emergencies Act imposes measures that require banks to freeze accounts without court orders…

““It is framed in a very vague way … it’s a broad transfer of responsibility from the government to the private sector,” said Marius Zoican, assistant professor of finance at the University of Toronto.”


Two more [UK] energy firms bite the dust as market crisis deepens.

“Whoop Energy and XCel Power have ceased trading today – affecting around 550 customers. Consumers from both energy firms will be designated a new supplier by market regulator Ofgem – through its supplier of last resort process.”


Italy makes fresh attempt at pension reform as debt worries mount.

“Italy is working on a reform to make it easier for workers to retire early without bloating what is already Europe’s second highest pensions bill, as rising borrowing costs fuel concerns over the country’s mammoth public debt.”


Italy unveils €8bn energy package as economy hit by spiralling bills.

“Italy will spend €8bn to shield consumers, industry and local authorities from rising energy prices and support the auto industry, as spiralling electricity and gas bills threaten to undermine pandemic recovery.”


In Greece’s rural heartland, tractors have become a symbol of anxiety.

“For weeks, they have been parked along the country’s highways, their owners threatening to block traffic. Farmers are desperate for additional financial aid to cope with surging energy prices that are pushing up their costs for fuel and fertilizer, posing a sudden threat to their livelihoods.”


Switzerland will ask hydroelectric-dam operators to create power reserves and may build new gas-fired plants for use during peak demand surges to avoid blackouts.

“The Swiss Federal Council said the new hydro-power reserves will go online next year.”


Finland joined other Nordic countries in announcing measures to help ease the burden from the rising energy costs on those mostly affected, with focus on transport and agriculture.

In a key measure, Finland’s government will subsidize travel to work…”


European Power Prices Could Spike in Spring Amid Nuclear Woes.

“European electricity prices could spike again in the coming months as French reactor outages and low hydropower stocks tighten the market, S&P Global Platts said.”


Europe has just six weeks’ gas supply if Russia turns off taps…

“Germany’s economy would be hardest hit in a Russian energy supply freeze as Europe’s gas buffer would only last until April, according to analysts at Commerzbank. There are fears Moscow would restrict Europe’s gas supply if the West slaps tough sanctions on Russia following an invasion of Ukraine.”


Ukraine rebels order full mobilisation as Putin oversees missile launch drills.

“Separatist leaders in eastern Ukraine have ordered a full military mobilisation, further escalating tensions in the region after Washington said Moscow would invade within days, and Ukraine’s president headed to Europe to drum up support.”


China central bank warns of default risks after climate stress test.

“China’s banks face rising default risks as a result of higher climate-related costs in carbon-intensive sectors like thermal power, steel and cement, Liu Guiping, vice governor of the central bank, said in comments published on Friday (Feb 18).”


Chinese Developer Is In Fresh Trouble Months After Debt Swap – Yango Group didn’t pay $27 million before end of grace period.

“A Chinese developer failed to make overdue interest payments on two dollar bonds months after winning a reprieve from debt investors, the latest hit to the country’s deeply troubled offshore bond market.”


Venezuela grapples with endless crisis.

“An oil producer hard hit by the slump in global prices, Venezuela has seen its economy gradually deteriorate over the past decade, with international economic sanctions aggravating the crisis.”


After a 12-hour blackout, Trinidadians wonder if their power supply is a shot in the dark.

“…electricity wasn’t the only thing that needed to be restored. The outage had a ripple effect, with citizens left without internet and access to data, with many not even being able to make phone calls. Just as distressing was the fact that water supply was also affected…”


Shortages, inflation frustrate Cubans struggling to get by.

“Grocery shopping has become an increasingly costly and arduous struggle for many people in a country where the pandemic, inefficient production, government controls and U.S. economic sanctions have aggravated an economic crisis.”


‘They’re fed up’: Workers in Puerto Rico take to the streets.

“Shrill whistles mixed with drums, tambourines and the clacking of spoons on pots as public employees shut down streets in Puerto Rico’s capital Friday to demand better pay and pensions. The crowd shimmied and clapped as demonstrators held up signs reading, “Fair wages now!””


Tunisia to raise electricity and fuel prices.

“Tunisia plans to lower electricity and fuel subsidies to reduce a budget deficit driven by high oil prices, Tunisian Industry and Energy Minister Naila Nouira told newspaper Assabah on Friday, in a key reform asked for by international lenders.”


Egypt: How Sisi is running a pyramid scheme.

“Egypt’s national debt has quadrupled to $370bn since 2010, but key structural issues, such as the devastated public education sector and low-quality public health system have yet to be addressed. Egypt’s labour force participation rate has decreased to 42 percent…”


Turkey’s producers face tough choices after staggering energy hikes.

“Massive price hikes on electricity and other energy items have dominated Turkey’s public agenda for weeks, aggravating costs in an economy that was already grappling with soaring inflation fueled by the sharp depreciation of the Turkish lira.”


Iraqis queue for petrol in Mosul amid shortages.

“For the past week, long lines have formed at petrol stations in Mosul and the rest of Nineveh province, AFP journalists reported.

“Soldiers were deployed in some stations to contain any violence, as tempers flared among motorists over the petrol shortage.”


Sri Lanka’s state-run petroleum company has run out of cash to buy oil, and fuel shortages across the country could get worse, the energy minister said Friday.

“Udaya Gammanpila said the loss-making Ceylon Petroleum Corporation continued to haemorrhage cash and was out of money to procure supplies from abroad.”


Shortage of Suzuki car mirrors reflects Sri Lanka’s growing economic crisis.

“The scramble for the humble product highlights rising economic risks for the South Asian country as imports slump, foreign exchange reserves plummet and a potential sovereign default looms.”


Electrolyser supply crunch hangs over India’s hydrogen ambitions.

“A global supply crunch of electrolysers needed to produce green hydrogen and a lack of domestic manufacturers to make them pose a major challenge to India’s ambitious targets to use the zero-carbon fuel, a government official told Reuters.”


Afghan Economy Further Imperiled by U.S. Move to Split Assets.

“The Biden administration’s decision to effectively seize the Afghan central bank’s foreign reserves is likely to deepen Afghanistan’s already devastating economic crisis, according to Afghan bankers and economists and international aid workers.”


From Ukraine and North Korea to Covid-19 and climate change, global crises leave us feeling helpless…

“According to a statement by the summit organisers, we are living in an “era of successive and interconnected disruptions in which a permanent sense of crisis has become the new normal”.”


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.

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

‘Off the charts’ inflation dogs global recovery

Heineken chief Dolf van den Brink told the Financial Times that usual methods for predicting consumer behaviour were breaking down as companies grappled with how to pass on “crazy” increases in costs: “There’s no model that can handle this kind of inflation. It’s kind of off the charts. So it’s anybody’s guess . . . what the impact is going to be on volumes due to all these price increases.””


Fed prepared for faster interest-rate hikes if inflation persists.

“Federal Reserve officials concluded at their January meeting that inflation was running too high, warranting a hike in the benchmark interest rate soon and potentially justifying a faster pace of tightening… according to minutes of the Jan. 25-26… meeting released Wednesday.”


Will All These Rate Hikes Cause a Recession?

“Anxiety about elevated inflation is giving way to apprehension about the cost of suppressing it. A growing number of voices stress the need to preserve the global economic recovery. Can officials hike rates without chancing a recession?”


Global petroleum inventories are the tightest for years in a sign the market is overheating…

“Continued depletion of petroleum inventories is clearly unsustainable and will have to be arrested in the near future by faster increases in production, slower increases in consumption, or both… Slower consumption growth could come from the effects of higher oil prices restraining demand…”


As oil prices soar, U.S. drillers scramble to find sand for fracking.

“With crude prices at their highest levels in years, U.S. oil drillers are trying to boost output fast, but their efforts have been hit by a shortage of sand to use for fracking operations.”


This week British bankers will start collecting the biggest bonuses since before the 2008 global financial crisis as their employers fight an “increasingly intense war for talent”.

“As most Britons face the biggest squeeze on their incomes since at least 1990, already very highly paid bankers are celebrating “particularly obscene” bonuses in the City’s pubs and wine bars.”


‘People are desperate’: Kent food bank and families hit hard by inflation… UK inflation rises to 30-year high of 5.5%…

“…soaring inflation is not just hurting the finances of local residents, it is having a dramatic impact on those of the food bank. Demand for its food parcels is at a record high…”


UK landlords demand rent guarantees as living cost crisis hits tenants.

“Soaring rental costs, tumbling availability, and economic uncertainty is fuelling the increasing demand for rent guarantees as cautious landlords seek to protect their revenues from the knock-on effects of the cost of living crisis.”


European Union car sales in January lowest on record.

“New car registrations in the European Union reached a historic low of 682,596 units in January as semiconductor shortages continued to hurt car sales across the region, data from the region’s carmaker association (ACEA) showed on Thursday.”


Eurozone trade deficit hits 13-year high as energy crisis rages.

“The value of imported goods jumped 37pc year-on-year in December as energy prices rocketed and a trade deficit with China widened. The seasonally adjusted trade gap was at its biggest since mid-2008.”


Europe Risks Another Energy Crisis Without Mandatory Reserves… There’s currently no economic reward for traders to store gas…

“Europe is relying more on intermittent sources of energy such as wind and solar, and with domestic gas production in decline, dependency on imports from Russia is only increasing.”


Ukraine rebels accuse government forces of attacks.

“Russian-backed separatists in eastern Ukraine accused government forces on Thursday of opening fire on their territory four times in the past 24 hours and said they were trying to establish if anyone had been hurt or killed.”


The Russia-Ukraine crisis is squeezing Central Asian economies.

“…while the measures Washington is proposing are targeted at Moscow, they could also end up crippling the economies of Tajikistan and the Kyrgyz Republic while also significantly hurting Uzbekistan, because these nations depend on money sent home by citizens working in Russia.”


Argentina’s Debt Deal Promises No Salvation…

“The bitter truth is that unless a true economic miracle takes place (not Joseph Stiglitz’s much-criticized version of a miracle), Argentina will struggle to pay back lenders. Argentine bond yields reflect such pessimism.”


Peru’s main airport could experience a fuel supply shortage within days [after Repsol refinery is closed due to huge oil spill]…

“According to the Peruvian Association of Port Operators, the Peruvian State could bankrupt the internal economy and foreign trade for more than $80,000 million if “La Pampilla” continues to be paralyzed.”


Nigeria Says It Will Import Vast Amounts of Emergency Gasoline.

“The need for resupply arose after the African country imported a batch of gasoline that contained too much methanol… It’s led to fewer cars on city streets, as motorists wait in long queues at gas stations to fill up their vehicles, and surging transport fares.”


Workers Threaten To Close 200,000-Bpd Libyan Oil Export Terminal.

“Oil workers threaten to shut down at the end of February an oil export terminal in eastern Libya, which typically ships out nearly 200,000 barrels per day (bpd) of crude if workers’ pay demands are not met by a unit of the state oil corporation.”


Decade-High Food Prices Drive Poverty and Unrest in Africa… compounding the plight of some 40 million people thrown into poverty by the impact of the Covid-19 pandemic and its accompanying lockdowns…

“That is creating a food crisis that threatens to spill over into unrest. In some places, it is already driving people to emigrate.”


Economic woes pile pressure on Tunisian democracy… With a huge public spending bill, Tunisia has a gaping budget deficit and its debts have soared to nearly 100 percent of gross domestic product.

“The COVID-19 pandemic greatly exacerbated an existing cost of living crisis, while the same unemployment that pushed its youths on to the streets more than a decade ago remains a chronic problem.”


World Bank Group report warns of looming debt crisis in Jordan.

“According to the report, the global public health crisis triggered by COVID-19 quickly turned into the “largest global economic crisis in more than a century”, resulting in major setbacks to growth, increased poverty rates and deepened inequality.”


G20 must push relief to avoid debt crises – experts, campaigners.

“Wealthy nations must improve their floundering flagship debt relief initiative or face a spate of debt crises in the developing world, experts and campaigners say as finance chiefs of G20 major economies prepare for meetings later this week.”


Climate Action Faces Reality Check In The Energy Crisis…

“”We’re going to have a multi-year stress test of political will to impose costly transition policies,” Bob McNally, president of U.S. consultant Rapidan Energy Group and a former White House official, told Bloomberg.”


China will help its coal-fired power plants run at full capacity, the government has announced, raising further alarm about the fate of Beijing’s climate pledges.

“Swathes of the world’s second-biggest economy were paralysed last year because of power shortages, partly caused by a drop in coal supply…”


Oil firms’ climate claims are greenwashing, study concludes…

“The study found a sharp rise in mentions of “climate”, “low-carbon” and “transition” in annual reports in recent years, especially for Shell and BP, and increasing pledges of action in strategies. But concrete actions were rare…”


The Big Mac’s price is up 40%, and it isn’t a good sign… This famous American burger price is outpacing cost of living, and it’s not a good sign…

“…because the price of a Big Mac embodies multiple economic factors including the cost of labor, transportation, food and overall inflation — it leads some to believe the sandwich is one way to understand current inflation rates and purchasing power of the U.S. dollar.”


Helium Prices Are Set To Soar As Supply Shortage Looms.

“As one of the rarest yet most valuable and indispensable elements on our planet, the world is quickly coming to grips with one of the biggest supply squeezes of our times as severe helium shortages continue pushing prices up.”


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.

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

Stockpiles of some of the global economy’s most important commodities are at historically low levels, as booming demand and supply shortages threaten to fuel inflationary pressures around the world.

“From industrial metals to energy to agriculture, the rush for raw materials and food staples has been reflected in futures markets, where a large number of commodities have flipped into backwardation — a pricing structure that signals scarcity…

“Battery grade lithium carbonate soared more than 400 per cent in 2021 to above $50,000 a tonne. With limited inventory, analysts at Citigroup believe “extreme” pricing will be needed to “destroy demand” and bring the market into balance.”


The cost of bunker fuel for the majority of commercial ships trading today is just $10.75 per tonne away from the all-time highs recorded in July 2008 with shipping warned to expect high fuel bills for the duration of 2022 and into next year

“The global fuel mix for shipping is also changing thanks to the sky high prices for LNG.”


$100 Oil Threatens to Compound World Economy’s Inflation Shock.

“…much of the world will take a hit as companies and consumers find their bills rising and spending power squeezed by costlier food, transportation and heating… “The oil shock feeds into what is now a broader inflation problem,” said long-time Fed official Peter Hooper.”


The world has been using a lot more oil than we thought: Remember all that missing oil I wrote about last month?

“…Well, those barrels are missing no more. As I feared, it turns out they’ve already been used up — in the refineries and petrochemicals plants of China and Saudi Arabia. That means oil balances are a lot tighter than the International Energy Agency previously thought.”


Yield Spread Oil Ratio-Signaling Bear Market And Recession…

“This morning, the spread between the ten and two-year U.S Treasury yields has narrowed to just .405%, and oil (WTI) has moved above $92… when the ratio of these two financial indicators fell to zero (yields compressing faster than oil price is rising) in 1990, 2000, 2007 and 2020, a bear market and recession were in process.”


Eurozone living standards are at risk of permanent damage if supply chain disruption does not ease soon, the European Central Bank has warned.

“Globalisation could be partially undone if businesses are ultimately forced to abandon their low-cost suppliers and shift to more expensive but closer sources of goods and materials.”


European printers have warned that industries such as food and consumer goods could suffer significant disruption to their supply chains because of a growing shortage of paper.

“Strikes by thousands of workers at mills owned by forestry group UPM-Kymmene in Finland have exacerbated paper shortages…”


Europe’s Gas-Crunch Anxiety. Russia is showing no signs of increasing gas flows to Europe as tensions with the West over Ukraine enter a critical period.

“Supplier Gazprom again opted not to book any pipeline space for March to send gas to Germany via the key Yamal-Europe link, auction results showed.”


EU deepens investigation into Gazprom’s European business amid supply concerns.

“European Union antitrust regulators will knuckle down and boost information gathering on Gazprom’s European business, amid the continent’s escalating supply crisis and growing fears of a Russian invasion of Ukraine.”


Germany Plans to Force Gas Firms to Secure Reserves for Winter…

“The plan — to be presented in spring — would put the onus on companies including energy giants Uniper SE, RWE AG and Gazprom PJSC to safeguard stockpiles in Europe’s top natural gas consumer, said the people, who asked not to be identified…”


Last orders for Britain’s pubs as energy crisis strikes.

“Exorbitant energy prices could mean last orders for thousands of pubs already battling to survive with reduced takings and depleted cash reserves. A third of publicans have no cash to fall back on, according to a recent survey by the British Institute of Innkeeping…”


UK petrol and diesel prices hit new record high.

“The AA, which provided the data, conducted a poll of 15,335 of its members. It found that 43 per cent are cutting back on car use due to inflated fuel prices – this figure rises to 59 per cent for young drivers and 53 per cent for motorists on lower incomes.”


London Tube and bus fares face biggest hike for a decade.

“Cost of using passenger services in capital to climb 4.8% as mayor seeks to rebuild TfL finances after pandemic… The increase comes amid an escalating cost of living crisis in the capital and followed petrol prices hitting record levels on Monday and ahead of looming rises to rail fares across the UK.”


A storm of protest swept Britain at the weekend when thousands of demonstrators took to the streets to vent anger at a cost-of-living crisis driving millions …into poverty.

“From Edinburgh to London, Manchester to Birmingham and Sheffield to Southampton, demonstrations took place in more than 40 towns and cities on Saturday.”


China’s Property Woes Engulf London with Stalled Projects, Sales…

““China’s debt-saddled private developers face growing risks of a liquidity crunch, with home buyers and bondholders’ shattered confidence raising the specter of broader financial contagion,” Bloomberg Intelligence senior analyst Patrick Wong wrote in a note last week.”


Rapid Plunge in Developer’s Bonds Shows Transparency Risk in Chinese Property.

“Zhenro Properties Group Ltd.’s spiraling bond prices show just how risky it is to invest in Chinese developer debt — even when a repayment looks imminent. The firm’s $200 million perpetual bond was trading at 93 cents on the dollar before it plunged 59.3 cents Friday…”


Premier Li Keqiang said China will increase support for agriculture in spring, in an effort to ensure the nation’s “stable and healthy” economic development, the official Xinhua News Agency reported.

China will ensure adequate supplies of fertilizers and other goods used in farming, and stabilize their prices, Li said in written remarks to a national agriculture meeting held Sunday.”


Omicron’s Threat to Global Economy Increasingly Runs Through China…

““Increased pandemic restrictions could lead to additional supply-chain disruptions, hold back the normalization of the global economy, and fuel global inflation, while capping Chinese economic growth.””


Why supply chain crisis is a ‘big’ problem for furniture.

“Big, bulky and heavy. Furniture has been one of the biggest casualties of the global shipping and supply chain crisis as costs to transport a sofa or table are much higher than a pocket-sized iPhone or a pair of trainers.”


How Supply Chain Issues Continue To Impact The Restaurant Industry.

“… receiving replacement parts and new equipment on time… has been tricky and challenging… keeping up with the soaring number of foodservice supply chain delays and interruptions …has been a huge roadblock… continued demand for takeout has exacerbated shortages of items, such as coffee cups, plastic straws, and to-go containers.”


‘Sell What You Can’ Mood Grips Credit as Goldman Says Hold Cash.

“Credit investors are in a “sell what you can” mood in an environment of rising rates and political tensions, a Bank of America Corp. survey showed, with Goldman Sachs Group Inc. strategists telling clients to switch to cash.”


Central banks should be cautious in calibrating a response to inflation…

“The US and the UK economies, it is said, are overheating as the threat from the pandemic recedes… This might seem a compelling argument but the idea that the US, the UK and the big economies of the eurozone are in the middle of a rampant boom doesn’t square with the facts.”


Beware central bankers on monetarist war path.

“The state of the world economy is reminiscent of the period after the first world war in Europe… don’t be surprised if central banks cause a recession as they move into macho interest rate-hiking mood.”


Hardship deepens amidst Syria’s frozen conflict.

“…while the frontlines have been largely frozen for years, an economic crisis is exacting an increasingly heavy toll across the fractured nation.

“The United Nations says the number of people in need of humanitarian support is greater than at any point since the war began.”


WFP: Rising food prices push Yemenis into ‘extreme poverty’.

“The humanitarian situation in Yemen is aggravated by the depreciation of the local currency, which reached more than 1,200 riyals against the US dollar in 2022. Before the outbreak of the Yemeni conflict in 2014, the dollar price was 215 Yemeni riyals in the local market.”


Starving Afghanistan families sending children to work as incomes plummet after Taliban takeover…

“A survey of 1,400 households across seven provinces of Afghanistan found that 82 per cent of Afghans have lost their income since the collapse of the former government and the Taliban takeover last August. Almost a third reported that they had no choice but to send their children out to work.”


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.