Daily updates on climate change and the global economy.

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

U.N. Warns of Food-Security Risks as Global Food Imports Approach $2 Trillion.

“The United Nations is warning of significant risks to food security around the world, especially in poorer countries, as soaring food and fertilizer prices place further pressure on governments to secure supplies.

The UN’s Food and Agriculture Organization said in its latest report Friday that the global food import bill is estimated to rise to an all-time high of $1.94 trillion in 2022, up 10% from last year, pushed higher by concerns around supply from war, climate change and economic instability.

“”Worryingly, many economically vulnerable countries are paying more while receiving less food,” the UN FAO said in its Food Outlook report, referring to worsening conditions for importing countries.”


More than 50 of the poorest developing countries are in danger of defaulting on their debt and becoming effectively bankrupt unless the rich world offers urgent assistance, the head of the UN Development Programme has warned.

“Inflation, the energy crisis and rising interest rates are creating conditions where an increasing number of countries are in danger of default, with potentially disastrous impacts…”


World primed for economic ‘storm,’ JPMorgan CEO warns…

“Conditions for an economic storm, including monetary tightening, inflation and the war in Ukraine, have all fallen into place, JPMorgan Chase CEO Jamie Dimon told Nikkei, warning that the world could see more “surprises” like the near meltdown of U.K. pension funds.


Bankman-Fried’s Assets Plummet From $16 Billion to Zero in Days…

“The entire $16 billion fortune of former FTX co-founder Sam Bankman-Fried has been wiped out, one of history’s greatest-ever destructions of wealth… Bankman-Fried’s empire crumbled this week after a liquidity crunch at one of its affiliates.”


Shadow banking by crypto exchanges will continue to wreak financial havoc after FTX.

What just happened to FTX this week looks a lot like Lehman’s collapse for the cryptocurrency world… The financial crisis proved that the problem of banks being “too big to fail” was not about size. It was that financial risk-taking had exceeded regulators’ ability to oversee it.”


Binance chief Changpeng Zhao warns of ‘cascading’ crypto crisis… Head of world’s biggest digital asset trading venue says industry troubles echo 2008 crash…

“Zhao, founder of the world’s biggest digital asset exchange, said the full impact of the meltdown at rival crypto exchange FTX had yet to be felt. Speaking at a conference in Indonesia, he said the global financial crisis was “probably an accurate analogy” to this week’s events.


BlockFi Halts Withdrawals in Fresh Contagion From FTX Collapse.

“Troubled crypto lender BlockFi said in a statement on Twitter that the company can no longer operate business as usual, citing “a lack of clarity” on the status of FTX.com, FTX and Alameda Research. The company said that they are limiting platform activity and pausing client withdrawals.”


The global shipping industry is facing a new problem — too many containers…

“On top of falling freight rates, data shows container depots — used to house containers after they are unloaded — are now filling up or full… Traders and shippers say the decline in global consumer demand is not a sign the global economy is normalizing after a frantic post-lockdown consumption rush but a downward shift in consumption appetites.”


Loaded inbound containers for October into Port of LA down 15% from September and the lowest October number since 2012.”


U.S. Dollar Extends Tumble After Biggest Daily Loss Since 2009 [on balance, probably a good thing].

“The U.S. dollar slid further Friday after softer-than-expected inflation data drove the currency to its largest daily loss since the global financial crisis. The WSJ Dollar Index fell 0.5%. That added to a 2.2% slide on Thursday, its largest daily loss since March 18, 2009.”


As the Fed Raises Rates, Worries Grow About Corporate Bonds. Executives, analysts and bond traders are all wondering if corporate finance is about to unravel as interest rates rise…

“From October 2021 to October 2022, an index that tracks investment-grade corporate bonds is down by roughly 20 percent. By some measures, overall bond market losses have been worse than at any time since 1926.


A canny accounting move by former UK chancellor George Osborne that reaped £120 billion in profits for the government is now turning sour and risks growing the fiscal hole challenging his successors.

“It may turn out to have been cheaper for Osborne to have borrowed more back then rather than to delay the cost to the present. The Office for Budget Responsibility, a public finances watchdog, noted at the time that future costs might outweigh the benefit.”


The army could answer 999 calls if ambulance personnel in England go on strike over their pay, under NHS plans to keep services running during strikes.

“Military personnel will be brought in if, as looks likely, ambulance staff such as paramedics and emergency medical technicians withdraw their labour in the next few weeks.”


The army is expected to begin training on 21 November to replace striking Border Force officers at ports and airports, Home Office staff have been told.

“The Guardian understands that more than 500 military personnel are expected to each receive five days of training before being asked to work in frontline jobs.”


Commuters in London and Paris have scrambled for alternatives – or simply stayed home – as public transport workers went on strike for higher pay, the latest industrial action seeking relief from soaring prices in Europe.

“Spreading labour unrest poses a problem for governments which are already spending billions trying to blunt the worst effects of rising prices, at least for the most vulnerable.”


Trade union workers march across France in protest over rising cost of living.

“Thousands of trade union workers marched in Paris to demand higher wages to keep up with inflation. The protest in the French capital was a part of a nationwide day of walkouts and transport strikes by train drivers and other public sector employees that caused major commuter disruption.”


German lawmakers have approved a plan to keep the country’s three remaining nuclear power plants until mid-April, extending their life beyond the originally planned shut-off at the end of this year…

“The deadline to shut Germany’s last nuclear power plants at the end of this year was set in 2011, shortly after the Fukushima nuclear disaster in Japan.”


Energy crisis dims festive sparkle in Europe’s shops…

“Across much of Europe, in cities from Madrid to Frankfurt, there will be fewer, more energy efficient lights, switched off earlier at night, while shops will be heated less, in a show of solidarity with households facing soaring utility bills.”


Thousands of protesters have taken to the streets in Bulgaria to demand higher salaries as rising inflation levels hit the country.

“Friday’s demonstration, organised by the country’s two largest trade unions, saw protesters gather in front of the parliament building holding banners and chanting requests for better pay.”


Yen’s collapse reveals bigger cracks in Japan.

“…there has been insufficient aggregate demand. Japan’s Covid-19 recovery has been slow with GDP only recovering after the second quarter of 2022. This level remains significantly lower than the pre-Covid-19 peak, which was before the 2019 consumption tax increase.”


The 3rd Largest Bond Market Is Flashing Red… Could a Financial Crisis Be Near?

The BOJ (Bank of Japan) has been selling dollars in order to try and prop up their bond markets. And realize this. They are not selling USDs as part of some well-calculated plan because they want to. They are selling USDs because they HAVE to. And it’s not working.”


A Theme Park Crisis Is Wrecking South Korea’s Bond Market. A provincial default has destroyed local government credibility.

“Imagine the turmoil if a newly elected president of the United States announced that the U.S. government would no longer honor any outstanding Treasury bills because most of them were issued under his profligate predecessor. That’s essentially what Kim Jin-tae, the governor of South Korea’s Gangwon province, did.”


Riot police used tear gas to quell violent street protests in Bolivia’s largest city on Friday, the latest disturbances in three weeks of unrest over demands that a new census be conducted.

“Vendors and public transit workers set tires afire in streets and threw rocks at opponents of leftist President Luis Arce in the center of Santa Cruz, a key hub of the energy industry in Bolivia’s tropical lowlands.”


Bangladesh redirects fuel to industries by trimming supplies for power plants.

“The ongoing energy crisis in Bangladesh has prompted authorities to redirect fuel to the export-oriented industries and trim supplies to power plants as it desperately scrambles to keep the country’s wheels of production rolling, officials said on Friday.”


[Pakistan’s] Government has no option but to ration gas in winter’…

“Regarding the diversion of liquefied natural gas (LNG) to household sector as had been the practice in the past, the secretary petroleum said the authorities could not purchase expensive LNG and sell it cheaper and LNG was not available at higher rates either.”


How dash for African oil and gas could wipe out Congo basin tropical forests.

“The area of land given over to oil and gas extraction in Africa is set to quadruple, threatening to wipe out a third of the dense tropical forests in the Congo basin and accelerate the climate breakdown, a report warns.”


Coal projects in Great Barrier Reef catchments approved without environmental impact statements.

“At least eight coalmining projects in Great Barrier Reef catchments and floodplains have been exempted from requiring environmental impact statements by the Queensland government, with six already gaining state environmental approval.”


Cargo ships suffering from weak Chinese demand for iron ore are finding a more lucrative alternative as the global energy crisis spurs a greater need for coal.

“Miners and traders are slashing shipments of iron ore, the second-most widely traded seaborne commodity, and re-assigning their bulk carriers to highly unusual coal routes to prop up earnings.”


Global carbon emissions hit record despite China slowdown.

““CO₂ emissions are about 5 per cent higher than they were in 2015,” said Glen Peters… a research director at Cicero. Although many Covid-related stimulus packages were supposed to set the world on a low-emissions path, the opposite seemed to have happened, he said.”


You can read the previous “Economic” thread here. I’ll be back on Monday with a “Climate” thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

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

A wave of Chinese deflation will soon be coming our way, bringing peak interest rates into view…

The workshop of the world will again be exporting goods disinflation to Europe and America within months, undercutting Western industries on a large scale. This is likely to deepen the industrial and manufacturing downturn in the West and has powerful implications for interest rates and the trajectory of inflation

“Albert Edwards, from Societé Generale, said… “The recession is going to be so deep that deflation will be a big theme again, and central banks will soon be slashing rates and resuming QE. There is going to be a huge bond rally,” he said.

““Central bankers are like wrestlers before a big fight. They talk tough but you can be absolutely sure they’ll cut aggressively once everybody starts screaming at them,” he said.”


China’s factory gate prices suffer first drop since Dec 2020 as COVID curbs take toll.

“China’s factory gate prices for October dropped for the first time since December 2020, and consumer inflation moderated, underlining faltering domestic demand as strict COVID curbs, a property slump and global recession risks hammered the economy.”


‘There was no hope’: the Chinese factories struggling to survive…

Factory managers in southern China are reporting a fall in orders in October of as much as 50 per cent on the back of full inventories in the US and Europe, deepening the gloomy outlook for the world’s second-largest economy.”


Police in northeastern China said that seven people have been arrested following a clash between residents and authorities enforcing COVID-19 quarantine restrictions.

The violence comes as China reports new cases nationwide, with 2,230 cases reported Tuesday in the southern manufacturing and technology hub of Guangzhou.


China Property Crisis Imperils $1.6 Trillion of Local State Debt.

“China’s deepening property crisis is piling pressure on a $1.6 trillion corner of the country’s onshore bond market, as cities and local administrations step in as white knights to bail out troubled developers in a state-backed bid to aid the sector.”


The bonds of Indonesian property companies are slumping, adding to signs of property debt distress that’s been deepening in China, South Korea and Vietnam…

“Rising interest rates around the world are exposing risks that have accumulated in property markets, juiced by cheap funding during the pandemic. South Korea rolled out fresh measures to help its struggling real estate market on Thursday…”


Bank of Japan policy may become the most crucial element in deciding the nation’s creditworthiness, S&P Global Ratings said, suggesting the central bank’s action has the potential to trigger its first sovereign credit rating change in years…

“While Tan refrained from discussing what the BOJ should do, he noted that the risk of price declines is “more serious” for Japan’s sovereign ratings than the danger of price increases.


Japan’s current account surplus falls the most since 2008.

“Japan’s current account suffered the biggest year-on-year decline in the first half of this fiscal year since the 2008 global financial crisis, as the trade balance fell into deficit due to a weakening yen and rising global commodity prices.”


Analysis: Meltdown in the Container Shipping Sector Gains Speed…

“If we get back to the meltdown on the Transpacific we see in Xeneta data that it’s a drop of 31% from Far East to US west coast in the month of September compared to the same month last year. We see it is down almost 10% for the first three quarters of the year. This is driven also by a drop of 22% from Far East into north Europe…”


US Cut Oil Output Forecast Again as Shale Growth Slows Down…

The US slashed its forecast for 2023 oil production in the latest sign that world crude markets can’t rely on American shale fields to ramp up supply quickly enough to reduce high energy prices over the next year.”


US Mortgage Rates Rise to 7.14%, Near Highest Level Since 2001.

“The overall measure of applications, which includes refinancing, slipped and is the weakest since 1997. An index of refinancing activity fell to a 22-year low. The housing market — one of the most sensitive areas of the economy to changes in interest rates — has deteriorated rapidly this year…


Mortgage Fund [Romspen Investment Corp.] in Canada Halts Payouts Amid Liquidity Crunch…

“The Toronto-based firm will “temporarily defer payment” of redemption requests until it’s clearer when borrowers will repay the loans and the fund can get cash from asset sales, according to a letter to investors dated Nov. 8. “Loan payoff activity remains suppressed.””


Sweden Property Firms at Risk of Fire Sales, Handelsbanken Warns.

“Sweden’s beleaguered real-estate companies may have to resort to fire sales and new share issues as the sector faces risks of rising vacancies and a projected 15% slump in property valuations… The catalyst for such a scenario would be the industry’s looming “wall of maturities,” according to the economists.”


[UK] House sales falling at fastest rate since the financial crisis…

“National house prices started to fall in October for the first time in 28 months, with the most notable drops in the East of England and South East. Agents have now reported falling sales in 12 out of the last 14 months and for the last seven consecutively.”


Nursing union the Royal College of Nursing announces first strike in its 106-year history… The RCN had called for its members to receive a pay rise of 5% above the RPI inflation rate, which currently stands at above 12%.

“The union said that many of the biggest hospitals in England would see strike action but others “narrowly missed” the legal turnout thresholds required for action.”


Market uncertainty is causing massive contraction in UK food production, with farmers in nearly every sector planning to scale back in 2023…

“NFU president Minette Batters told the committee… “We are seeing huge contraction in the protected crops sector. Production of tomatoes and cucumbers are at their lowest levels since records began in 1985… Milk volume is down, too, and 75% of the NFU’s livestock farmer members plan to use less nitrogen fertiliser next year, further shrinking output.””


UK struggles to secure long-term gas import deals…

“The shortlived Truss administration set up a new “energy supply task force” to begin negotiations with gas exporting countries for long-term supply deals. But negotiations have so far foundered as the Treasury resisted long-term contracts at a time when international gas prices were so high over concerns that they would not prove to be value for money.”


French pharmaceutical industry worried about potential gas and electricity cuts…

“The representative of the French pharmaceutical industry, The Leem, fears that the industry actors will not be able to “ensure the continuity of their activity” and will not be able to guarantee patients “access to their treatments” in the coming months, a press release published on Monday (November 7) indicates.”


German chemicals giant stockpiles coal to keep producing…

“For energy-intensive industries, this power crisis is “very acute”, says Harald Schwager, deputy chair of Evonik. He likens the situation to a patient “at the doctor”, but while the “diagnosis is known, so is the therapy”. In this case, the therapy is improving supplies.”


Worst of Europe’s Diesel Crunch Will Hit in Spring…

“With the European Union set to cut off seaborne deliveries of Russian fuel in early February, the continent’s already tight supply situation is at risk of worsening. Stockpiles are a vital cushion against such disruptions, and when they run low, there’s more potential for market volatility.”


Euro Area’s Inflation Shock Weighs Most on Poorest Households.

““Inflation in energy and food prices has major distributional effects across low and high-income households,” the analysts wrote. “Low-income households are more vulnerable to these price shifts, as they spend a higher proportion of their total consumption expenditure on essentials.””


Clashes in Greece as strikes over inflation disrupt public transport.

“Thousands of people have protested across Greece amid a general strike against price hikes. Public and some private sector workers walked off the job for 24 hours on Wednesday to protest against rising inflation rates… Small groups of demonstrators threw Molotov cocktails and rocks at police, who responded with tear gas and stun grenades.”


Vietnam’s central bank has asked commercial banks to urgently provide loans to key oil and gasoline companies amid rising fuel shortages.

“Hundreds of petrol stations in cities such as Ho Chi Minh City and Hanoi have shut down or limited sales. The shortages were driven by firms’ financial difficulties and insufficient fuel storage, media reports said.”


Malawi Fuel Crisis Shows No End in Sight…

“Drivers in Malawi are spending all night in long lines at fuel stations in hopes of filling their gas tanks as the country struggles with a weekslong fuel shortage… Users also flooded social media with reports of some people being robbed of their phones and other property, and cars being broken into while motorists waited in line for fuel at night.”


Power vacuum adds to risks for crisis-hit Lebanon.

“Lebanon faces an indefinite government crisis that further complicates the path out of its financial meltdown, adding to risks of instability as hardship deepens and state institutions teeter on the brink of collapse.”


Imran Khan supporters step up protests with road blockades in Pakistan.

“Supporters of Imran Khan have blockaded motorways around Pakistan’s capital Islamabad as they step up their efforts to topple the government following an assassination attempt on the former prime minister… Popular anger over the shooting and the increasingly poisonous tone of public discourse were reaching alarming levels, analysts said.


Protests in Iran raged on streets into Thursday with demonstrators remembering a bloody crackdown in the country’s southeast, even as the nation’s intelligence minister and army chief renewed threats against local dissent and the broader world.

Meanwhile, a top official in Iran’s paramilitary Revolutionary Guard claimed it had “achieved” having so-called hypersonic missiles, without providing any evidence.”


Iran on November 9 warned Saudi Arabia that there is no guarantee of Tehran continuing to show “strategic patience”, according to semi-official Iranian news agency Fars. The warning to Iran’s regional rival was served by the country’s intelligence minister…

Throughout the eight weeks of anti-regime protests that have shaken Iran, Tehran has accused foreign enemies, including Saudi Arabia, Israel and the US, of fomenting the unrest.”


UN warns of worsening food crisis in Sri Lanka amid economic woes…

“The number of people in Sri Lanka needing urgent humanitarian help has doubled to 3.4 million, the United Nations has said as it warned of a worsening food crisis in the south Asian island nation that declared itself bankrupt in July amid an unprecedented economic crisis.”


Fund managers sound alarm over fragmenting regulation; Deglobalisation strains regulation and investment choices, fund executives say…

As global supply chains have buckled under the pressure of external shocks from the coronavirus pandemic, Russia’s invasion of Ukraine and tensions between the US and China, many companies are now looking closer to home as they consider reversing decades of global outsourcing.


FTX: Cryptocurrency market rocked by near-collapse of exchange.

“The digital assets market has been rocked by the near-collapse of one of the world’s biggest cryptocurrency exchanges, FTX. On Tuesday, FTX struck a bailout deal with larger rival Binance after a surge in withdrawals caused a “significant liquidity crunch”.”


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.

8th November 2022 Today’s Round-Up of Economic News

China’s exports drop sharply as global economy slows:

China’s exports to the rest of the world shrank unexpectedly in October, a sign that global trade is in sharp retreat as consumers and businesses cut back spending in response to central banks’ aggressive moves to tame inflation.

“The slide in exports from the world’s factory floor adds to the gloom surrounding the global economy as leaders from the Group of 20… prepare to gather in Indonesia next week.”


“Complete collapse” in demand for container freight – and it could get worse.

“Demand for container transportation is in free fall, show numbers from September and the situation will get even worse before the turn of the year, according to Sea-Intelligence.”


China’s super-rich see fortunes plunge as economy slows.

“China’s super-rich saw their wealth fall by the largest amount in over two decades, as the Russia-Ukraine war, Beijing’s zero-Covid measures and falling local stock markets pummelled fortunes, an annual rich list showed.”


Pessimism about China’s banking sector has plunged to an unprecedented level, even reaching the depths where US lenders traded during the 2008 financial crisis.

“The four biggest lenders… are priced at near record low valuations of about 0.4 of their book value in Hong Kong after a sector index weakened to an 11-year low… Investors demand a 26% country risk premium…”


Fears grow over liquidity crisis at brokerages, insurers [South Korea]…

“Concerns of a possible crisis at non-bank financial firms are growing as local insurers and brokerage houses are suffering from a liquidity shortage that is feared to send shock waves through the entire financial market here.”


Vietnamese governor tries to calm fears over banks.

“Vietnam’s central bank governor tried to calm fears over the stability of the country’s banking system, after reports that commercial lenders were facing liquidity difficulties. Nguyen Thi Hong appeared on state-run TV to say the central bank had held several meetings with lenders…”


Billions in Capital Calls Threaten to Wreak Havoc on Global Stocks, Bonds… The private market is coming to collect…

“As financial conditions tighten around the world, private-market funds are demanding that investors stump up more of the cash they pledged during the easy-money days of the pandemic.”


Higher interest rates mean only wealthy Americans can afford a new car. The Fed is making new cars something only the wealthy can afford.

““With rates expected to go even higher and stay there for at least the duration of 2023, the auto market will become more dependent on cash-rich, higher-income, and higher credit-tier consumers.” — Jonathan Smoke, chief economist, Cox Automotive.”


Fed-Forced Housing Crash Could Allow Institutions to Snag Bigger Share of the Housing Market.

“By the end of the decade, according to market intelligence firm Yardi Matrix, institutions will hold 40% of all single-family rental homes in the United States. Large-scale investors grabbed the chance presented by this wave and the ensuing increase in rental demand from displaced former homeowners in the years following the 2008 crash.”


U.S. Oil Companies Remain Cautious as Economic Headwinds Grow.

“The U.S. shale patch will not help ease what could be a very tight global oil market when the EU embargo on imports of Russian seaborne oil enters into force in just a few weeks. Even if they wanted to, American producers would not be able to boost oil production too much, despite repeated calls and threats from the Biden Administration…”


The US Northeast Is Hurtling Toward a Winter Heating Crisis.

“…the signs of a winter crisis are already multiplying. Heating oil delivered to New York is the priciest ever. Retailers in Connecticut are rationing it to prevent panic buying. New England’s stockpiles of diesel and heating oil — the same product, taxed differently — are a third of normal levels.”


The Bank of England risks hurtling toward another bond market crisis as new signs of strain bubble up and threaten to force another intervention, City traders have warned.

“Traders have pointed to mounting stress in the so-called “repo” market and short-dated UK debt, known as gilts, just weeks after the post mini-Budget bond chaos pushed Britain’s pensions funds to the brink of collapse.”


Britain is suffering the worst cost of living crunch of any G7 nation, as the combined effects of the pandemic and the energy crisis drain households’ finances.

“Real household incomes per capita in the UK dropped by 3.5pc between the end of 2019 and the second quarter of this year, according to the Organisation for Economic Co-operation and Development (OECD).”


UK food price inflation hits record 14.7% with ‘no peak in sight,’ researchers Kantar warn.

“Just over a quarter of households (27%) say they are struggling financially – double the figure recorded last November, the research firm Kantar said. The cheapest value ranges grew by 42% as shoppers sought to manage their budgets, the research found, while sales of supermarket own-label products jumped again by 10.3% over the latest four weeks.”


Photos: Thousands march in London in ‘Britain is broken’ protest.

“Thousands of people joined a demonstration in London, calling for general elections amid the worsening cost-of-living crisis in the United Kingdom. A coalition of trade unions and community organisations took part in the “Britain is Broken” protest, organised by The People’s Assembly, in central London on Saturday.”


One in four Europeans say their financial position is ‘precarious’.

“As the cost of living crisis, driven by high energy prices, rampant inflation and Russia’s war on Ukraine, tightens its grip, the six-country survey for the French anti-poverty NGO Secours Populaire painted an alarming picture of “a continent on the brink”.


Germany keen to discuss natural gas pact with UK amid supply risk.

“Germany is keen to talk to Britain about a solidarity pact that would allow Europe’s largest consumers of natural gas to bail each other out if an extreme cold snap were to create shortages this winter, German officials have said. Such an agreement could be mutually beneficial for both London and Berlin…”


Drought Forces One of Spain’s Largest Hydro Plants to Halt…

“The Mequinenza facility, located in the north-eastern region of Aragon, will stop operating in mid-November after water levels subsided to below 23% of capacity, Endesa SA said in a statement. It’ll be the first time the plant has stopped functioning since it was opened in 1966.”


Italy blocks rescued migrants from landing and orders ship to leave port.

“Italy’s new right-wing government is attempting to stop European charities landing migrants rescued from the Mediterranean at the country’s ports, in a first test of its campaign pledge to curb illegal migration from north Africa. Rome’s tough new tactics have left migrants stuck for up to 14 days on board four ships…”


Venezuelans who braved horrific jungle trek may now have to repeat it…

“Thousands of Venezuelans from Panama to Mexico have found themselves in …desperate limbo. After risking their lives to cross the only land bridge connecting South to Central America, they received the bewildering news that the US is no longer receiving Venezuelan asylum seekers at the Mexican border.


Peru: Police clash with protesters in capital Lima.

“Riot police used tear gas to disperse protesters in Peru’s capital Lima, as thousands of people took part in anti-government marches across the country… Peru faces a number of economic issues, including spiralling living costs.


Ghanaians take to the streets demanding resignation of President Akufo-Addo.

“Ghana is seeking a $3 billion loan from the IMF to cope with record inflation of 37% and the collapse of its currency, the cedi. Most of the demonstrators wore red T-shirts bearing the slogan “You might as well kill me.”


Pakistan’s oil sector warns of looming petrol, diesel crisis.

“The Oil Companies Advisory Council (OCAC) of Pakistan has said that the country is expected to face petrol and high-speed diesel shortage in the days ahead, calling for special measures to avert the looming fuel crisis.”


Europe’s Energy Crunch Will Trigger Years of Shortages and Blackouts [in poorer countries]…

“…deeper costs will be borne by the world’s poorest countries, which have been shut out of the natural gas market by Europe’s suddenly ravenous demand. It’s left emerging market countries unable to meet today’s needs or tomorrow’s, and the most likely consequences — factory shutdowns, more frequent and longer-lasting power shortages, the foment of social unrest — could stretch into the next decade.”


Debt burden traps global south in a vicious cycle…

““Developing countries have to balance between urgent climate needs and paying back debts,” says Jessica Omukuti, research fellow at the University of Oxford’s Inclusive Net Zero initiative. “If you can’t pay back your debts, your credit rating goes down, [and] you compromise your partnerships and your future capacity to get finance.””


Even Central Banks Are Buying Gold for the Zombie Apocalypse; Governments in developing economies are building up their bullion holdings as trust breaks down.

“In the notoriously opaque world of government gold trading, it’s not always immediately clear who the biggest buyers are… There is one obvious factor in common between the declared buyers, however: All are from nations facing serious problems.”


Business Leaders Wary of Increasingly Geopoliticized Global Economy…

“Executives were asked to identify the risks they considered the biggest threats to their country over the next two years. The responses from more than 12,500 executives across 122 economies reflect a clear unease about economic headwinds against a backdrop of aggravated geopolitical tensions.”


The new era of decoupling, deglobalisation and economic war. The Covid-19 pandemic marks the end of the great era of globalisation. Now the troubled times of decoupling arrive. We are at a Matthew Arnold moment:

“Wandering between two worlds, one dead,
The other powerless to be born,
With nowhere yet to rest my head,
Like these, on earth I wait forlorn.”


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.

5th November 2022 Today’s Round-Up of Economic News

Fossil fuel projects were stalled a year ago. Now they’re making a comeback…

“…the fossil fuel industry is experiencing a remarkable rebound, with sudden momentum behind more than 80 projects that range from coal-fired power plants to hulking gas export terminals, many of which could lock the world into decades of new greenhouse gas emissions.

“The backsliding is occurring as nations grope for alternatives to Russian natural gas, cut off by sanctions after the invasion of Ukraine. It will be a major point of tension at this year’s global climate summit, which begins in Egypt on Sunday. It throws into further jeopardy a global carbon budget crafted to avert climate chaos…”


Coal Was Meant to Be History. Instead, Its Use Is Soaring.

“Even as the globe is increasingly battered by floods, droughts and storms caused by climate change, the fuel that contributes most to planet-warming emissions is undergoing a renaissance. Global coal power generation could set a record for a second-straight year and remains the world’s biggest source of electricity.”


OPEC: Higher Oil Investments Are Needed to Avoid Rampant Volatility…

“The significant decline in investments in the oil industry, which began with the price crash of 2015 and then again in 2020 with the first COVID wave, is exacerbating volatility in the oil market, OPEC’s secretary general said. Spare capacity globally is currently very low and in the hands of two of the major OPEC producers, Saudi Arabia and the United Arab Emirates (UAE).”


Hedge-fund giant Elliott warns looming hyperinflation [their analysis is purely financial; not factoring in our eco/energy predicaments] could lead to ‘global societal collapse’…

“It added that the “extraordinary” period of cheap money is coming to an end and has “made possible a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period.” The letter reportedly said the world is “on the path to hyperinflation,” which could lead to “global societal collapse and civil or international strife.””


Fed Frets About Shadow Banks and Eyes Treasury Liquidity in New Report…

Financial stability issues are in focus as central banks around the world raise interest rates in synchrony and other markets around the world — including the government bond market in Britain — offer early warning signs that cracks are beginning to emerge.”


Global manufacturing PMI slips further into contraction territory as new orders decline solidly.

“The global manufacturing PMI survey’s Output Index, which acts as a reliable advance indicator of actual worldwide output trends, signalled a third successive monthly drop in worldwide factory production in October… Of the 31 economies for which S&P Global PMI data are available for October, some 21 reported falling production, which was also the case in September.”


Chip Makers Cut Costs as Demand Slump Supplants Pandemic’s Chip Shortage…

“What has happened is that the macroeconomic environment deteriorated, and we went from a period of supply shortages to demand declines,” Akash Palkhiwala, Qualcomm’s chief financial officer, said in a call with analysts. “It’s an unprecedented change over a short period of time.”


Air cargo market continues to deflate under global economic pressures.

“The air cargo market continued to unwind 18 months of record gains in October as the global economy slows and consumers tighten their purse strings while spending more on services. The industry is well into the typical peak season with little sign of increased shipping activity. Demand and rates are falling at a time when both normally climb.”


“The Bank of England warned Thursday that the U.K. is facing its longest recession since records began, with the economic downturn expected to extend well into 2024.

“The central bank described the outlook for Britain’s economy as “very challenging,” noting that unemployment would likely double to 6.5% during the country’s two-year slump.”


Food shortages ‘significant risk’ if energy bailout not extended, ministers warned.

“Chancellor Jeremy Hunt has been warned there is a “significant risk” of food shortages and further inflation if the government fails to extend its energy bailout beyond the winter. The Cold Chain Federation has written to the Chancellor, as well as new business secretary Grant Shapps…”


Pandemic and energy crisis are reshaping funerals in the UK…

Last year, almost a fifth of funerals were “direct cremations”, also known as unattended funerals. There is no hearse, procession or funeral service and they can cost less than £1,000, compared with £3,700 on average for a cremation.”


European nations delay fossil fuel finance ban, blaming energy crisis…

“The statement “recognis[es] the ongoing development of national approaches” and leaves space for ministers “to decide on a potential policy alignment between countries”. It removed a section saying that any exceptions to the fossil fuel ban must be consistent with limiting global warming to 1.5C.”


Mon Dieu! France Is Heading Toward Winter Blackouts…

France will only avoid some form of power outage if the winter is mild… Despite all the promises by French ministers that the country’s nuclear fleet would be up and running ahead of the cold weather, it’s now clear the reactors will only be able to deliver a fraction of what’s needed on those cold nights in December and January.”


Germany’s Manufacturing Slump Deepens as Energy Costs Soar…

“The entire Eurozone manufacturing sector has tumbled into recession, with output falling at the steepest rate since the initial COVID wave as demand for goods plummets, the S&P Global Eurozone Manufacturing PMI survey also showed this week.”


Uniper SE reported one of the biggest losses in German corporate history, with Russia’s stranglehold on gas supplies leaving the giant utility struggling to survive.

Uniper reported a net loss of about €40 billion ($39.3 billion) in the first nine months of the year after being forced to buy gas at prices far beyond what it paid Russia under long-term contracts.”


Ukraine war causes spike in Estonia’s oil shale needs…

“The difficult geopolitical situation caused by the war in Ukraine has hiked the price of oil shale energy for Estonia. The need for oil shale is so great that Eesti Energia cannot mine enough of it and is forced to buy more… Increased demand for oil shale follows Estonia’s decision to start offering customers fixed prices as the universal service…”


Poles’ winter anxiety over lack of coal in coal dependent Poland.

“Millions of Poles are still reliant on coal for their energy and heating needs, but a steady decline in the country’s production, the embargo on Russian imports, and inflation have all played their part in a looming energy crisis this winter.”


Slovakia: Firewood back as energy crisis bites…

“According to the Slovak Ministry of Agriculture, the demand for firewood almost doubled in September compared with last year. Slovakia is not alone in this respect. Recently, the website Politico warned that European forests were facing “a very dark winter,” with many NGOs and scientists worrying that high demand for firewood could increase illegal logging.”


Austrian political crisis grows as drama unfolds at corruption hearing…

“With opposition politicians calling for a new election, public anger over corruption is denting support for Austria’s governing coalition and boosting the standing of the hard-right, populist Freedom party (FPÖ) in the wealthy EU member state.”


Italy PM Meloni hikes govt borrowing to tackle energy crisis…

“After winning a Sept. 25 election the hard-right leader quickly made clear that most of her coalition’s more ambitious election pledges such swingeing tax cuts and higher pensions would have to wait until better economic times.”


Greece: Unions plan 24-hour nationwide strike and protests Nov. 9…

“Major trade unions in Greece plan to strike and protest in Greece Nov. 9 to denounce the Russian offensive against Ukraine and call for government intervention to mitigate related price increases. Members of various groups, including PAME, and the General Confederation of Greek Workers (GSEE), will observe a 24-hour nationwide strike.”


New Zealand the ‘kiwi in the coalmine’ as house prices slump and repayments rise.

“Experts say New Zealand has become the “kiwi in the coalmine” for the world’s property markets, as rising interest rates and falling house prices put some borrowers at risk of negative equity, where they owe more on their mortgage than their house is worth.”


Japan economy set to slow sharply as global inflation, recession risks hurt.

“Japan’s economy is expected to have slowed markedly in the third quarter as global recession risks hurt external demand while rising inflation and a weak yen’s impact on imported prices forced consumers to keep their wallets shut.”


China, Japan and South Korea ramp up winter fuel stockpiles to cut costly LNG amid global energy crisis.

“Key Asian economies are stockpiling fuel, diversifying sources and conserving power to ensure adequate supplies for winter, as an unprecedented global energy crisis makes spot liquefied natural gas (LNG) purchases costly.”


Barclays cuts China GDP outlook after forecasting U.S., Europe recession…

““China’s share of global exports has been shrinking this year,” the analysts said. “Foreign companies are seen to have shifted their orders away from China to its Asian neighbors, including Vietnam, Malaysia, Bangladesh and India, for the production of some key labor-intensive goods.””


Bolivian civic group threatens national strike as census protests escalate…

“In recent weeks, protesters have set up road blockades in the city of Santa Cruz, the country’s wealthiest, while another regional town this week saw clashes break out on the street, with fireworks thrown and police using tear gas.”


Indigenous people in Peruvian Amazon detain tourists in oil spill protest.

““[We want] to call the government’s attention with this action. There are foreigners and Peruvians, there are about 70 people,” Watson Trujillo, the leader of the Cuninico community, told RPP radio. French, Spanish and Swiss citizens are also among the detained tourists…”


The Metals for Your EV Are Stuck in a 30-Mile Traffic Jam.

“In order to get a truckload of copper out of Africa and into the hands of tech-hungry buyers, Chanda Kulungika must spend a week sitting in one of the world’s longest traffic jams… Africa’s metals are no good to anyone if they can’t get out. The 1,900-mile journey from mines in Congo and Zambia to the ports is so riddled with bottlenecks and jams that it can take more than a month.”


Ghana’s Credit Rating May be Cut By Fitch If Debt Restructured in IMF Talks.

“Ghana’s sovereign credit rating may be downgraded closer to default by Fitch Ratings should talks with the International Monetary Fund on a record new $3 billion funding package lead to debt restructuring… Investors have been concerned about the financial health of Africa’s second-biggest gold producer…”


Nigeria: Debt distress and fears of a recession…

In a last-ditch attempt at reining in liquidity, the board of the central bank has decided to call over 2.7 trillion banknotes in circulation, within a 90-day period. However, it was excessive government spending to fund the deficit and pay for direct intervention programmes that led to the doubling of the cash in circulation in the first place…”


Cop27: Egyptian authorities arrest scores of people calling for cost of living protests…

“Egyptian authorities have tightened their grip over protesters in recent weeks as the country prepares to host the Cop27 summit in the Red Sea resort of Sharm el-Sheikh between 6 and 18 November… Egypt’s currency, the pound, has lost almost 25 percent against US dollar since January, while banks have struggled to salvage foreign currency to import essential goods such as tea.”


Cleric killed in restive Iranian city, protests rage on.

“A cleric at a Shi’ite Muslim mosque in the restive, mostly Sunni Muslim Iranian city of Zahedan has been shot dead, the official news agency IRNA said, threatening a spike in sectarian tensions complicating government efforts to contain widespread unrest.”


Protests erupt across Pakistan after attack on Imran Khan.

“Protests erupted in multiple cities across the country after Pakistan Tehreek-e-Insaf (PTI) Chairman Imran Khan and other PTI leaders were injured in a gun attack…”


Pakistan’s economic condition worsens as default on borrowing spikes.

“Fast deteriorating CDS [credit default swap] is signalling the foreign investors that Islamabad is precariously near default. Rather than taking SOS measures for economic revival, Islamabad is still pinning its hope on assistance from Saudi Arabia and China which have dried up in the recent past.”


Last handful of fish: Crisis pushes more Sri Lankans into poverty… “In her outstretched palms, 49-year-old Nilanthi Gunasekera holds her family’s last remaining handful of dried fish – a reminder of Sri Lanka’s worst economic crisis in decades.

“She is just one of the millions of Sri Lankans battling a calamitous decline in living standards as they find themselves forced to skip meals, ration medicines and turn to firewood in place of cooking gas.

““Now fish is out of the reach of our family, and so is meat,” Gunasekera said, grasping the shards of fish. “For two weeks we couldn’t afford any meat or fish. This is our last protein.””


You can read the previous “Economic” thread here. I’ll be back on Monday with a “Climate” thread.

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you! It is an enormous help as the cost-of-living crisis ratchets up here in the UK.

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

Shipping giant Maersk warns of ‘dark clouds on the horizon’.

“The spike in shipping rates since the onset of the pandemic has been a huge boon for Maersk. But the Danish shipping giant is warning its business will have to endure tougher times soon.

The company said Wednesday that a looming global recession is expected to reduce container demand by between 2% and 4% in 2022, with “plenty of dark clouds on the horizon.”


Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council (WGC) said on Tuesday…

Gold is typically seen as a safe asset for times of uncertainty or turmoil…”


Globalisation might end in a world conflict.

“How might globalisation end? Some seem to imagine a relatively peaceful “decoupling” of economies until recently stitched so tightly together. But it is likely that the fracturing of economic ties will be both consequence and cause of deepening global discord. If so, a more destructive end to globalisation is likely…

A breakdown of co-operative relations is likely to end whatever chance exists of avoiding a runaway process of climate change.


Dozens of US Coal Plant Closures Delayed as Green Energy Shift Slows.

“As many as 40 US coal-fired power plants that were slated to shut will run for longer than expected, with operators delaying plans to retire them as supply-chain issues and reliability concerns slow the transition to greener energy… The delays reveal headwinds for a large-scale shift to cleaner energy…


US rates hit 4pc as Fed warns of more rises to come.

“The Fed has said that “ongoing increases” in interest rates will likely be needed after it raised interest rates by 75 basis points to between 3.75pc to 4pc. The latest move – its fourth straight increase at this level – means US rates have hit a fresh high since 2008 as policymakers make their latest bid to tame inflation.”


There is wide agreement among economists and market observers that the Federal Reserve’s aggressive interest rate hikes will cause economic growth to grind to a halt, leading to a recession. Less talked about is the risk of a financial crisis as the U.S. central bank simultaneously tries to shrink its massive balance sheet…

Given the sheer size of the Treasury market, problems there are likely to leak into virtually every other market in the world.


“Can the Fed fight inflation without triggering a meltdown?

“…The reality is that the shadow banking system is now so big and so opaque, the trades and instruments so complex and intertwined, and the players so herd-like in their behavior that any dramatic move in the price of one security, one commodity, one currency — or the collapse of one player — can trigger a chain reaction that ultimately could crash the entire system.”


“Risk of global financial crisis spiking… Unfortunately, a by-product of this bold strategy [by the Fed] will likely be a sharp contraction of the global economy in the first half of 2023…

This “almost certain” global economic slowdown could signal a death blow for the already ailing world financial system, which is loaded with problems and on the brink of going under. We could see the collapse of commercial and investment banks, which could trigger a financial crisis similar to the Great Depression of the 1930s or the subprime debt crisis of 2008.


Cash-strapped Canadians have run their credit card debt up to a record high: Equifax.

“Equifax Canada’s consumer survey out today found that the average credit card balance has now reached a record high of $2,121… The total average non-mortgage debt is $21,188, a high not seen since the first quarter of 2020.”


UK food prices soar by fastest rate on record as cost of living crisis bites.

“UK food price inflation soared to a record annual rate of 11.6% in October as staples such as teabags, milk and sugar became more expensive along with fresh food, data shows… There is little hope that food price inflation will ease off soon, warned Andy Clarke, the former chief executive of the supermarket chain Asda.”


UK manufacturing faces deep recession as output slumps… Factory output was hit especially hard by a drop in new orders amid a global fall in the demand for industrial goods.

“The S&P Global/CIPS UK Manufacturing PMI, a measure of activity across the sector, scored 46.2 in October, down from 48.4 in September to hit a 29-month low. A figure below 50 signals that the sector is shrinking.”


UK Government tests energy blackout emergency plans as supply fears grow…

“The Guardian has seen documents, marked “official sensitive”, which warn that in a “reasonable worst-case scenario” all sectors including transport, food and water supply, communications and energy could be “severely disrupted” for up to a week.


Bank of England begins selling bonds as it unwinds QE programme.

“The Bank of England has become the first major central bank to sell bonds back to financial markets, as it presses ahead with plans to unwind the quantitative easing programme, through which it holds almost £850bn of gilts.”


Moody’s cuts outlook for European banks, including Germany’s, on credit woes.

“Global credit ratings agency Moody’s downgraded its outlook for banks in Germany, Italy and four other countries to “negative” from “stable” on Wednesday as Europe’s energy crisis and high inflation weaken its economies.”


Credit Suisse Cut to One Level Above Junk Status by S&P…

“The US ratings firm, echoing several analysts after the restructuring was announced on Thursday, said it sees “material execution risks amid a deteriorating and volatile economic and market environment.” It also signaled that some details around asset sales remain “unclear.””


Europe’s next debt crisis is only just beginning – tearing North and South apart…

“The eurozone credit crunch has begun in earnest. Lending conditions across the currency bloc are the tightest since late 2012, when the region was still crippled by the sovereign debt crisis. The European Central Bank’s lending survey (BLS) is a leading indicator of what is to come. Both the supply and demand for credit definitively buckled in the third quarter…”


Energy crisis chips away at Europe’s industrial might.

“…demand for natural gas and electricity both fell in the past quarter. It is far too early to rejoice, though. The drop is not just because industrial companies are turning down thermostats, they are also shutting down plants that may never reopen… For example, EU primary aluminium output was halved, cut by 1 million tonnes, over the past year.”


Europe sinks deeper into stagflation.

“Economic activity in the eurozone has been battered by soaring inflation which has forced households to cut back on spending. At the same time, the steep rise in energy costs has forced manufacturers to either scale back or shutter production.”


Russia’s economy shrank by 5% on an annualised basis in September, the economy ministry said on Thursday, a sharper contraction than the 4% recorded a month earlier.

“Western sanctions and the fallout from Russia sending tens of thousands of troops into Ukraine in February have pushed the country into recession, but Moscow says the West has failed to destroy the Russian economy.”


One in four Australians struggling to make ends meet as inflation strains incomes, study shows…

“Those are the findings of an Australian National University survey of almost 3,500 adults that confirms inflation is harming Australians’ economic wellbeing, with many registering a real pay cut despite working more hours.”


Sharp Yen Swing Has Traders on Watch for Post-Fed Japan Reaction…

“Officials have repeatedly said they will step in to counter one-sided yen weakness, although some analysts warn that any intervention will have a limited impact as long as the policy gap between the Bank of Japan and peer central banks remain. The BOJ stood by its ultra-low interest rate policy last month.”


Korea Credit Crisis Spreads as Bond Uncalled in First Since 2009.

“A South Korean insurer took the unusual step of delaying buying back perpetual bonds, in the first such case for the nation’s issuers since 2009 that adds to signs of a crisis in the local credit market… Korea has been scrambling to prevent a credit market meltdown from sparking broader contagion…”


China Tells Officials to ‘Resolutely Adhere’ to Covid Zero.

“China’s top health body said the nation’s zero-tolerance approach remains the overall strategy to fighting Covid-19 after unverified social media posts buoyed hopes the policy would be eased… lockdowns, mass testing and centralized quarantine in China show no sign of slowing. Zhengzhou’s Airport Economy Zone, the district where the world’s largest iPhone factory is located, was shut down yesterday for seven days.


Bolivian President warns of unrest as right-wing demands early census.

“”The Bolivian President Luis Arce warned on Tuesday that far-right conservative politicians who seek to repeat a coup d’état are fomenting violence in Santa Cruz’s civic strike. “Today, Bolivia is once again threatened by those who, unable to contribute to democracy, bet on confrontation and violence,” he denounced.”


Brazil Protests Hamper Shipments of Food, Fuel, Fertilizer…

“Truck drivers have led protests by backers of incumbent president Jair Bolsonaro following his defeat in Sunday’s election to Luiz Inacio Lula da Silva. Protests that have spread across the country are a consequence of dissatisfaction with the election, Bolsonaro said in his first speech after the ballot outcome.”


IMF Cash for Chad on Hold as Creditors Refuse Debt Relief.

“The International Monetary Fund can’t disburse more money to Chad under an agreed $570.8 million bailout unless reluctant creditors agree to revamp part of the nation’s debt, the deputy head of its Africa Department said.”


Mining giant Glencore flew cash bribes to Africa via private jet, UK court hears…

“The court heard detailed descriptions of how Glencore and its agents repeatedly sought to corrupt public officials. On one occasion, an agent told Glencore to hurry cash payments because he had “staff to make happy before Christmas” – a reference to a bribe in Nigeria.”


Iran’s Currency Hits New Low Against the Dollar Amid Unrest.

“Iran’s currency dropped to its lowest value against the dollar on Tuesday, after weeks of nationwide unrest roiling the country. A stalemate in negotiations to revive Tehran’s nuclear deal with world powers has also weighed heavily on the rial.”


Hundreds march in crisis-hit Sri Lanka protesting tax hikes, crackdowns.

“Hundreds of people marched in Sri Lanka’s largest city Colombo on Wednesday protesting against higher taxes, inflation and alleged state-led repression as the country struggles to emerge from its worst financial crisis in seven decades.”


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.

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

‘Sharp’ global labour market slowdown underway: UN… The war raging in Ukraine and other overlapping crises are taking a toll on labour markets worldwide, the UN said Monday, suggesting a “sharp” slowdown was already underway.

“In a fresh report, the International Labour Organization cautioned that the outlook for global labour markets has deteriorated in recent months…

“Amid deepening energy and food security crises, swelling inflation, tightening monetary policy and fears of a looming global recession, it said both employment creation and the quality of jobs were declining.

“While it normally takes time for an economic slowdown or a recession to result in job destruction and unemployment, available data suggests that a sharp labour market slowdown is already underway,” the report said.”


The world is teetering on the verge of a full-blown energy crisis as crude oil prices threaten to cross $100 a barrel, once again, coal prices surge to record highs, and natural gas cost rises to an unprecedented level that is equivalent to $250 a barrel for oil.

The World Energy Outlook 2022, released by the International Energy Agency last week, paints a very bleak scenario.”


Think the Energy Crisis Is Bad? Wait Until Next Winter…

“It is winter 2023-2024 that is going to be the real crisis. Any current energy planning that fails to account for next year and beyond is jumping out of the frying pan and into the fire—where this winter is a problem, 2023’s may be a catastrophe.”


Oil CEOs warn this winter’s energy crisis will be nothing compared to the next.

“Eni chief Claudio Descalzi explained, “the issue is not this winter. It will be the next one, because we are not going to have Russian gas – 98% [less] next year, maybe nothing.” Protests have already begun This could lead to serious social unrest — already, small to medium-sized protests have cropped up around Europe.”


The [US] diesel market is in a perfect storm as prices surge, supply dwindles ahead of winter…

“A perfect storm is taking place in the diesel market, with dwindling diesel reserves, a drought on the Mississippi River pushing more product to rail and truck, and a possible rail strike leading to a surge in prices that is expected to continue. Diesel prices have increased by 33% for November deliveries.


Biden accuses oil companies of ‘war profiteering’ and threatens windfall tax…

“In remarks on Monday, just over a week away from the 8 November midterm elections, Biden criticised major oil companies for making record profits while refusing to help lower prices at the pump for American people. The president said he would look to Congress to levy tax penalties on oil companies…”


The Fed may have to blow up the economy to get inflation under control.

“...this is uncharted territory for the Fed. Former central bank chairs Alan Greenspan, Ben Bernanke and current Treasury Secretary Janet Yellen never had to raise rates this many times in a row by such large amounts. It’s unclear what all this tightening will do to the economy.”


‘Perfect storm’ swirls as Canadians face hot inflation, rising rates.

“Canadian consumers and small businesses are being squeezed from both sides, prompting politicians, unions and even some economists to implore the central bank to slow its pace of tightening. The bank this week signaled its tightening campaign was nearing its peak, but made clear it was not done yet…”


Rishi Sunak is preparing years of tax rises for Britain in an effort to make up for a £50bn fiscal hole left by Liz Truss’s disastrous tenure in Downing Street, according to a Treasury insider.

“After a meeting between the prime minister and Jeremy Hunt on Monday to plan the upcoming autumn statement, a Treasury source said things were going to get “rough”.


As the dust settles on one crisis, fears are growing that the UK pensions industry is in danger of unwittingly lurching into another.

“Economic Armageddon was on the horizon just weeks ago… Liability-driven investments (LDIs) have been widely blamed for the crisis. Experts now fear that their “demonisation” could have disastrous consequences… Trading out of LDIs risks stranding hundreds of UK final salary pension schemes that are in deficit, they say.”


More than a third of UK hospitality firms ‘could go bust by next year’…

“With nearly all businesses saying they face higher energy costs and food price inflation, 35% of respondents to a quarterly hospitality industry survey said they expected to be operating at a loss or to be unable to continue trading by the end of the year.”


The latest inflation data out of Europe isn’t pretty.

Consumer prices in the eurozone rose by a record 10.7% in October, up from 9.9% last month, according to the EU’s statistics agency, Eurostat.

The figures surprised economists at Bank of America, who had expected inflation to cool slightly to 9.8%.”


Europe’s Firms Seek Most Emergency Funds Since Pandemic Peak…

“Firms grappling with high inflation and soaring operating costs are seeking fresh short-term liquidity lines in an echo of the worst days of the 2020 coronavirus pandemic… The increase in emergency funding is a worrying sign as central banks fight to tame surging inflation.”


Bank Outlook 2023: Running out of energy.

European bank fundamentals are being pressured by the ongoing energy crisis. Risks from direct exposure to the energy sector are heading higher. Additionally, energy-intensive sectors stand to suffer from higher energy prices.”


German industrial workers fire warning shot with strikes over pay.

“Thousands of German industrial workers walked out for several hours over the weekend in an escalating pay dispute as leaders of Germany’s powerful IG Metall union warned of more strikes to come if employers failed to improve their offer.”


Hungary loses buildings, services amid fuel crisis.

“People in Hungary are grappling with the closure of many public buildings and services… dozens of Hungarian cities have not been able to afford the high cost of heating facilities, such as libraries, museums, pools, spas, theaters, and sports venues, after government subsidies ended.”


The Italian wine sector has warned of glass shortages this autumn, which could amount to between 150,000 and 200,000 tonnes…

“Among the factors that are at root of the problem are high energy prices, supply chain delays, rising raw material prices, and the logistics crisis, according to Federvini. For example, soda ash, essential in glass production, was imported from the Donbass, a region at the centre of the war between Russia and Ukraine.”


Japan cannot survive without Russian oil, warns trading house chief…

“Japan’s near total dependence on imported energy means it cannot “survive” without continuing to buy oil and gas from Russia, said the head of one of the country’s big five trading houses… “Unlike Europe or the US, Japan depends on overseas for almost all of its energy needs so it’s not possible to cut off ties with Russia because of the sanctions,” Okafuji said…”


Bank of Japan’s inevitable pivot looms as a risk for markets…

“The longer Japan sticks with Yield Curve Control in the current global context, the more the authorities will have to spend to resist a depreciation, and the greater the structural damage to the core of the country’s financial system. No wonder most observers expect Japan to have to exit this policy…”


Asia’s factories slumped in October as global demand for merchandise goods made in the region continues to weaken.

The slowdown in Asia adds to growing evidence that a pronounced deceleration in world trade is underway as soaring inflation and interest rates crimp consumer spending in the US and Europe.


China’s factory, construction, service activity slump in fresh sign of economic weakness.

“China’s official gauges measuring factory, construction and service activities all tumbled into contraction territory in October, signaling fresh signs of weakness in the world’s second-largest economy.”


Zinc Plunges as Factory Data Fuels Concerns Over Steel Demand.

“Zinc led a decline in industrial metals after a slump in China’s economic activity added to signs of weakening demand in the world’s No. 2 economy, while a rebound in the dollar made commodities priced in the currency more expensive.”


China’s property slump continues as October prices fall.

“China’s property sector, once a pillar of growth, has slowed sharply in the past year as a result of a government clampdown on excessive borrowing by developers, and a COVID-19-induced economic slump. Prices in 100 cities dropped for the fourth straight month in October…”


China Builder CIFI’s Shares Plunge After Debt-Payment Suspension.

“CIFI Holdings Group Co. shares plunged to fresh record lows after saying it will suspend offshore financing payments and explore a holistic debt solution after being largely unable to raise new funds overseas this year… Last month’s missed payment was particularly worrying because CIFI was considered a barometer for the broader success of a new rescue effort by Beijing to use state guarantees to help a select group of builders access domestic funding.”


Chinese Developer Greenland Says It’s Likely to Default on Bond…

“The Shanghai-based developer, which is partially owned by local government entities and had long been considered among the nation’s most resilient, said in a filing that the issuer and guarantor wouldn’t be able to repay the $362 million outstanding on the note, which matures Nov. 13.”


Hong Kong’s Q3 GDP shrinks 4.5% y/y for third straight quarter of contraction…

“The outcome was worse than a range of 0.6% to 0.9% growth projected by HSBC, Morgan Stanley and Natixis, and a 0.3% contraction forecast by Barclays. The city’s economy shrank by 4.0% and 1.3% respectively in the first and second quarter.”


Emerging Stocks Are Flashing a 2008 Financial Crisis Signal.

“The price-earnings ratio of the benchmark MSCI Emerging Markets Index, based on trailing 12-month profits, has fallen below its price-earnings ratio based on estimated earnings for the next 12 months, showing that analysts expect earnings to fall faster in the future than currently.”


Rampant Food and Fuel Inflation Spells Disaster for Emerging Economies…

“”The combination of elevated commodity prices and persistent currency depreciations translates into higher inflation in many countries,” the World Bank notes, warning that policymakers in emerging markets and developing economies “have limited room to manage the most pronounced global inflation cycle in decades”.”


‘Ray of hope’ shatters as Ukraine grain deal collapses…

“Wheat and corn futures jumped today after Russia’s withdrawal from a UN-backed deal that allowed millions of tonnes of grain to be shipped through Black Sea ports, delivering a potentially “catastrophic” blow to food supplies for poorer countries.


With nothing to sell, Vietnam gas stations start to close…

“Since early October, several hundred gas stations in Ho Chi Minh City, the country’s biggest metropolis, and in surrounding cities in southern Vietnam have had to occasionally suspend operations, saying they have nothing to sell.”


Protesters in Peru target Hochschild’s largest mine.

“Peruvian demonstrators on Monday burned infrastructure at Hochschild Mining Plc’s Inmaculada mine as part of a protest, the company said, threatening the operations of its largest mine in the Andean nation. UK-listed Hochschild is an important precious metals miner and Inmaculada produces both gold and silver.”


Brazil Protests Grow With Bolsonaro Silent After Election Loss.

“Protests by backers of Jair Bolsonaro intensified as the Brazilian president remained silent over his loss in Sunday’s election, refusing to concede defeat to his old foe Luiz Inacio Lula da Silva. Supporters of the firebrand president, unhappy with the election’s results, blocked roads around the country and restricted access to Sao Paulo international airport…”


Ghana experiences a week of turmoil and panic as it continues to address its economic gash.

“Ghana, for months now has made news rounds over its deteriorating economy. With so much downturn and very little resurgence, the country’s current administration has been forced to quell the growing anxiety amongst its citizens… the Ghanaian Cedi is now the worst-performing currency in the world, losing around 42% against the dollar.”


Nelson Mandela Bay on the brink of collapse.

“The Nelson Mandela Bay municipality is in dire financial straits and could struggle to pay staff salaries in a few months’ time. This is due to the collection rate dropping to a shockingly low 69%, and millions of rand in lost revenue due to sky-high water and electricity losses.”


East Africa’s economic recovery falters on debt, fiscal deficits.

“The increasing risk of debt distress, widening fiscal and current deficits and limited economic diversification plans in the economies of East Africa, have combined to weaken prospects for growth this year… countries are yet to achieve their pre-Covid growth levels…”


Aoun’s presidency ends leaving power vacuum in crisis-hit Lebanon.

“Parliament has so far been unable to agree on a successor in the role, which is reserved for a Maronite Christian [Really?! Come on, Lebanon – why not throw the field open a bit!]… That leaves Lebanon in the unprecedented situation of having a presidential vacuum and a caretaker cabinet with limited powers, as the premier-designate has been unable to form a government for six months.”


Unseasonal Rains Affecting Crops [India], Will Impact Food Inflation: Report…

“”In states like Uttar Pradesh, the unseasonal rain was more than 400 per cent above the normal. Overall, India has received a staggering 54 per cent above normal rains in October so far,” said SBI Research. It believes that along with grains, the prices of vegetables, milk, pulses and edible oils… are rising and likely to remain high in coming months.”


A global helium shortage has doctors worried about one of the natural gas’s most essential, and perhaps unexpected, uses: MRIs…

“Helium has become a big concern,” said Mahadevappa Mahesh, professor of radiology at the Johns Hopkins School of Medicine Baltimore. “Especially now with the geopolitical situation.” …The problem is that no other element is cold enough for the MRI. “There’s no alternative,” Craft, of Premier Inc., said. “Without helium, MRIs would have to shut down.””


Twitter deal may signal point when the ‘everything bubble’ bursts…

There is a fear the global economy is approaching breaking point. China’s property meltdown, the emergency Bank of England action to prevent a run on pension funds and the collapse of tech stocks are all part of the same story: a fragile global financial ecosystem coming under stress.


You can read the previous “Economic” thread here. I’ll be back tomorrow with a “Climate” thread.

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