Daily updates on climate change and the global economy.

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

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

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

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


UK Is About to Become Stagflation Nation.

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


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


EU new car demand falls 21% in April.

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


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

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


Three Protests Hampered the Movement in Bulgaria Today.

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


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

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


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

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


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

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


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

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


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

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


Myanmar Fuel Importers Blame Shortages on Junta Dollar Controls…

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


Is Bangladesh heading toward a Sri Lanka-like crisis?

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


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

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


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

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


Protests continue against high cost of living in Panamanian province.

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


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

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


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

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

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


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

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

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

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

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

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


Central bankers should worry about the food insecurity crisis…

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


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

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


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

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


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

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


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

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


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

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


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

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


Russia cuts power exports to Finland over failed payments.

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


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


European dealmakers face shrinking debt options as recession risk looms…

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


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

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


China April property sales post steepest drop since 2010…

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


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

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


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

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


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

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


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

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


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

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


Price protests turn political in Iran as rallies spread.

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


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

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


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

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


Thousands hold protests against Tunisia president over rising food prices.

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


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

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


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

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


Africa is facing significant fuel shortages…

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


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

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


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

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

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

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

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


The week that shook crypto.

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


Central Banks Face The Growth-Inflation Dilemma…

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


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

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


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

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


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

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


Russia Diesel Exports Drop Sharply In April…

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


India bans wheat exports to deepen global food crisis.

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


Nepal’s economy hammered by power outages.

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


Sri Lankans running out of food, fuel and medicine.

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


Pakistan Default Risk Surges as Ousted Khan Plans New Protests.

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


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

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


Dubai’s workers struggle with cost of living crisis…

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


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

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


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

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


Air Zimbabwe grounded by jet fuel shortage.

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


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

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


Chilean Journalist Dies After Being Shot During May Day Protests

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


Thousands of Argentines protest soaring inflation.

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


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

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

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

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

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

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


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

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


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

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


NYC Billionaire Catsimatidis Warns of Looming East Coast Diesel Rationing.

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


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

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


After Pain at the Pump Comes the Electric Shock.

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


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


Analysis: UK consumer despair suggests government mishandling inflationary crunch.

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


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

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


Ukraine halts some Russian gas flows to Europe.

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


Major China Developer Sunac Defaults as Debt Crisis Spreads.

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


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

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


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

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


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

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


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

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


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

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


Peru’s spring of discontent.

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


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

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


Africa Faces Unrest as Thumping Food Prices Hit It Hardest.

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


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

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


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

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


Lao Economy Grinding to a Halt as Fuel Crisis Deepens.

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


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

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


Central Banks Can’t Fend Off Stagflation Alone…

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


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

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

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

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

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


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

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


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

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


Electricity Shortage Warnings Grow Across U.S…

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


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

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


New York Hospitals Battle Supply Shortages on Shanghai Lockdown.

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


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

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


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

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


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


In Ukraine, gas shortages further complicate daily life.

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


Russia’s Economy Facing Worst Contraction Since 1994.

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


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

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


Sri Lanka stops supplying gas for domestic use.

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


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

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


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

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


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

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


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

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


Eskom Generation Chief Quits Amid Spiraling South Africa Outages.

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


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

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


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

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


As Wheat Prices Soar, Africa Pivots to Cheaper Alternatives.

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


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

If you found value in this content, please help me continue this work by becoming a patron of my work via Patreon. And if you are already a subscriber or have donated – thank you. I really appreciate it and it is a huge help, especially with the cost of living spiralling relentlessly upwards.

7th May 2022 Today’s Round-Up of Economic News

[Global] Economic downturn spreads as more sectors report falling output and record price rises.

“Detail sector PMI data compiled by S&P Global, derived from information provided by panels of over 30,000 companies in 45 countries, revealed a broadening of the global economic slowdown in April….

“Prices are meanwhile rising for all goods and services, though of particular concern is a record rise in food prices amid falling food production, which is likely to add to the global cost of living crisis.”


Global food prices held near a record as crop trade is disrupted by the war in Ukraine, exacerbating tight supplies and stoking inflation…

“High fertilizer prices and weather worries are adding to the threat for global crop supplies, including drought curbing the U.S. wheat crop. That risks compounding a deepening hunger crisis.”


Wheat production in Ukraine is likely to be at least a third lower than in normal years, according to analysis of satellite images of the country…

“…with more disruption from the war extremely likely, and fighting concentrated in the east where the main wheat-growing regions are found, Kayrros estimates that the wheat harvest is likely to be down by at least 35% this year compared with 2021.”


The world is ‘crying out for diesel.’…

“Retail gasoline prices in the U.S. are up 45% year on year. Diesel used by American truckers is up 75% and just hit an all-time high. But this is not just an American problem. Pain at the pump is global… Fuel flows globally to where it earns the highest return.”


U.S. distillate stocks fall critically low.

“U.S. distillate fuel oil inventories have fallen to a 14-year low as refiners prove unable to satisfy strong demand from freight hauliers and manufacturers, sending diesel prices surging and pulling crude prices higher in their wake.”


Central banks must play economic manoeuvres in the dark…

“This is a time of incredible complexity: each week has thrown up a new shock or revealed that the problems we saw coming were bigger than we thought. Markets whiplashed back and forth this week in response to the Fed’s announcements…”


The Stock Market Panic Is Here…

“Why panic? Because negative developments are everywhere, and they are the last thing standing in the dismal bond and stock markets. The rationalization, “but the economy is still doing well,” is based on past data.”


It’s the Worst [US] Bond Market Since 1842. That’s the Good News…

“So far in 2022, with inflation raging, bonds have lost 10%… Almost never has the U.S. bond market lost as much money as in the first four months of 2022, according to Edward McQuarrie, an emeritus professor of business at Santa Clara University who studies asset returns over the centuries.”


The U.S. currency vaulted to two-decade highs this week, and its strength is tightening financial conditions just as the world economy confronts the prospect of a slowdown.

“The surge threatens “to damage the broader market environment and expose the economic and financial cracks in the system,” said Samy Chaar, chief economist at Lombard Odier.”


Americans are racking up debt at record rates.

“Consumer debt levels for March 2022 climbed by $52.4 billion, an annual increase of 14%, seasonally adjusted, according to Federal Reserve data released Friday. Revolving credit, which includes credit cards, surged by 21.4%.”


Bird Flu Outbreak Nears Worst Ever in U.S. With 37 Million Dead.

“A bird flu virus that’s sweeping across the U.S. is rapidly becoming the country’s worst outbreak, having already killed over 37 million chickens and turkeys and with more deaths expected through next month as farmers perform mass culls across the Midwest.”


‘Chaos On The Horizon’: Concern Grows Over Potential Summer Power Outages In California…

“California’s power grid operator is predicting an energy shortage for the hot summer months. The California Independent System Operator (Cal ISO) said the state could be 1,700 megawatts short of what it needs for the grid to function properly.”


Gas prices hit record highs across the country [Canada]…

“According to Gas Wizard, a site that tracks gas prices across Canada, prices have jumped by four to six cents in many urban centres across the country. In Vancouver, the price of regular gasoline reached $2.17.”


Three graphs that show UK’s looming economic turmoil.

“Inflation will rocket… GDP will flatline… unemployment is expected to surge as the looming economic disaster rears its head. The Bank of England warns that unemployment could rise by 8 per cent by 2025 – the worst level since the banking crisis ended.”


Germany heading for recession as Putin’s war hits factory production.

“Industrial production in Europe’s biggest economy plunged by 3.9pc in March, a fall three times larger than economists had expected, leaving GDP 7.6pc below its pre-pandemic level. It shows the severe impact the war is [already] having on Germany’s vital manufacturing sector…”


Bulgaria industry on tenterhooks after Russia gas cut.

“The halt of Russian gas supplies to Bulgaria last week has left companies big and small scrambling as they fear cuts to deliveries and rising prices. “We are already on the brink. We’ll have to raise our prices further,” said Valery Krastev, who owns a bread factory in the northern town of Montana.”


Euro Crisis 2.0? …It’s been a decade since the Greek debt crisis dominated financial news…

“Relative and absolute levels have increased since 2011. Even with debt relief, Greece’s debt-to-GDP ratio is lower, because its economy has shrunk. Only Germany and Ireland, where companies have relocated to take advantage of lower taxes, have seen their debt-to-GDP ratios fall.”


‘We see a big recession in the making’: Top CEOs are fearing the worst in Europe.

“The euro zone faces concurrent economic shocks from the war in Ukraine and a surge in food and energy prices exacerbated by the conflict, along with a supply shock arising from China’s zero-Covid policy.”


EU needs to make food security a priority for gas supplies.

“…farmers do not have enough mineral fertiliser or diesel fuel to maintain food production. As one fertiliser industry person I know put it, accurately in my view: “the last few drops of diesel should be used by a tractor to spread fertiliser made with the last bit of gas”. That is not the set of priorities that is set by current European law.”


‘I’m Very Anxious’: China’s Lockdowns Leave Millions Out of Work…

“Migrant workers and recent college graduates have been hit hardest by shuttered factories, closed construction sites and an anemic job market… The government’s new support measures suggest that the problem is more serious than officials have let on…”


Shipping delays are back as China’s lockdowns ripple around the world…

“…global shipping will suffer well into the summer. That could exert even more pressure on global supply chains already reeling from Russia’s invasion of Ukraine, and keep inflation running hot… To add to the problem, many truck drivers have struggled to reach ports in China to pick up containers because of travel restrictions and Covid testing requirements.”


Chinese yuan short bets hit record high on slowdown fears, Fed policy.

“Short positions on the Chinese yuan touched their highest on record and bearish bets on other Asian currencies surged on worries over an economic slowdown in China and aggressive policy tightening in the United States, a Reuters poll found.”


India invokes emergency law to operate idle coal import-based utilities.

“India has evoked an emergency law in a bid to start generation at some idle power plants running on imported coal which are not producing power because of financial stress or due to high international prices of coal, the government said on Friday.”


Anger over fuel shortage on major highways as people return from Raya break [Malaysia]…

“There have been reports of acute fuel shortages on the east coast and other parts of the country, which have sent tempers flaring… Many took to social media to vent their frustration after finding that many petrol stations had run out of RON95 petrol, with only the pricier RON97 available.”


Turkey’s inflation rate soars to almost 70 percent.

“Turkey’s official inflation rate has spiralled to nearly 70 percent in April, posing a huge challenge to President Recep Tayyip Erdogan, whose unconventional economic policies are often blamed for the economic turmoil.”


As Bread Costs Skyrocket In Iran, So Does The Risk Of Social Unrest.

“A dramatic rise in the price of flour in Iran is leading to concerns that the authorities’ recent decision to end subsidies for imported wheat could come at the cost of social unrest… the cost of flour has soared by around 500 percent and is expected to increase further.”


Over 97% Of Afghans Affected By Food Shortages, Says UN…

“Living costs and food prices have skyrocketed since Taliban took control of Afghanistan in August last year. The Afghan newspaper report cited World Bank findings saying that incomes are likely to have fallen by around a third since the capture of power by Taliban.”


Sri Lanka ‘risks running out of food and fuel’ and could descend into ‘anarchy’, former energy minister says…

President Gotabaya Rajapaksa declared a state of emergency across the country on Friday evening effective from midnight. It comes amid widespread protests calling for the resignation of Mr Rajapaksa and his brother Mahinda, who is prime minister, as Sri Lanka faces its worst economic crisis in recent memory.”


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.