Global Trade & Retail Crisis Watch

[weatheriscool]

The World Economy Is Suddenly Running Low on Everything
Source: Bloomberg

A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously trying to stock up.

Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.

Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world is seemingly low on all of it. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said on a call this month. Clients are “trying to get everything they can because they see high demand,” Jennifer Rumsey, the Columbus, Indiana-based company’s president, said. “They think it’s going to extend into next year.”

The difference between the big crunch of 2021 and past supply disruptions is the sheer magnitude of it, and the fact that there is — as far as anyone can tell — no clear end in sight. Big or small, few businesses are spared. Europe’s largest fleet of trucks, Girteka Logistics, says there’s been a struggle to find enough capacity. Monster Beverage Corp. of Corona, California, is dealing with an aluminum can scarcity. Hong Kong’s MOMAX Technology Ltd. is delaying production of a new product because of a dearth of semiconductors.

Read more: https://www.bloomberg.com/news/articles ... f=nXmOg68r

[weatheriscool]

Yellen says economic recovery likely to be 'bumpy'
Source: AP

By MARTIN CRUTSINGER

WASHINGTON (AP) — Treasury Secretary Janet Yellen says that the economic recovery is going to be “bumpy” with high inflation readings likely to last through the end of this year.

But Yellen insisted that the inflation pressures will be temporary and if they do threaten to become embedded in the economy, the government has the tools to address that threat.

In testimony before a House Appropriations subcommittee Thursday, Yellen was asked about a big jump in prices reported last week, which showed consumer price index rising by 4.2% over the past year, the largest 12-month gain since 2008.

Yellen said that the April price increase was the result of a number of special factors related to the economy opening back up. She said as she has in the past that the price jump would be temporary but she indicated it would be more than a one-time gain.



FILE - In this May 7, 2021 file photo, Treasury Secretary Janet Yellen speaks during a press briefing at the White House in Washington. Yellen says that the economic recovery is going to be “bumpy” with high inflation readings likely to last through the end of this year. But Yellen maintained Thursday, May 27, that the inflation pressures will be temporary and if they do threaten to become embedded in the economy, the government has the tools to address that threat. (AP Photo/Patrick Semansky)

Read more: https://apnews.com/article/health-coron ... e38eca5888

[Ken_J]

https://www.washingtonpost.com/nation/2 ... g7AbNne83E

there is a huge economic slap about to land hard in the US. People who can't pay rent owed, small landlords that can't pay taxes due to properties not earning rental income for them, cities and utility companies raising costs to cover the hardship of lost income and increased costs of dealing with a pandemic.

I'd be surprised if we didn't start seeing buildings being burned down soon.

[wjfox]

UK loses 83% of department stores since BHS collapsed

8 hours ago

The UK has lost 83% of its main department stores in the five years since the collapse of the BHS chain.

The figure highlights the extent of the upheaval in the High Street as the Covid pandemic sped up changes in shopping habits.

The data, compiled by commercial property information firm CoStar Group, also reveals that more than two-thirds of these shops remain unoccupied.

Some 237 big stores have yet to be taken over by a new business.

"The data undoubtedly highlights the acceleration of change in the retail sector in recent years, which the pandemic has only exacerbated," said CoStar Group's head of analytics, Mark Stansfield.

CoStar tracked the UK's largest chains, from BHS and Beales to Debenhams and House of Fraser, from 2016 to the present day.

Five years ago, they had 467 stores between them. Now, however, only 79 are left.

https://www.bbc.co.uk/news/business-58331168

[Yuli Ban]

[Yuli Ban]

[Yuli Ban]

[Yuli Ban]

[weatheriscool]

Powell tells Congress that Fed will raise rates this month
Source: AP

By CHRISTOPHER RUGABER

WASHINGTON (AP) — Federal Reserve Chair Jerome Powell made clear Wednesday that the Fed will begin raising interest rates this month in a high-stakes effort to restrain surging inflation.

In prepared testimony he will deliver to a congressional committee, Powell cautioned that the economic consequences of Russia’s invasion of Ukraine are “highly uncertain.” He says the Fed will “need to be nimble” in responding to unexpected changes resulting from the war or the sanctions that the United States and Europe have imposed in response.

The Fed is widely expected to raise its benchmark short-term interest rate several times this year beginning with its March 15-16 meeting. In his testimony, Powell provided little additional guidance about how quickly the Fed would do so.

A rate hike next month would be the first since 2018. And it would mark the beginning of a delicate challenge for the Fed: It wants to increase rates enough to bring down inflation, which is at a four-decade high, but not so fast as to choke off growth and hiring. Powell is betting that with the unemployment rate low, at 4%, and consumer spending healthy, the economy can withstand modestly higher borrowing costs.

Read more: https://apnews.com/article/business-uni ... 5429dfc1b3

[wjfox]

[caltrek]

In regards to China, I think one thing to keep in mind is the extent to which China is a mixed economic system, or at least has been from about the late 1980s onward. So, stock market swings may indeed reflect government policies of shifting away from pay outs to foreign and private sector investors in favor of a more government dominated approach. The March 7, 2022 edition of The Nation contains a book review of two books, neither of which I have read. The books are Market Maoists by Jason M. Kelly and How China Escape Shock Therapy: The Market Reform Debate by Isabella Weber. The review includes this interesting passage:

Thankfully, a handful of young, pragmatic, rural-oriented Chinese reformers led a countermovement to persuade the state’s top economic decision-maker, Premier Zhao Ziyang, to adopt a gradualist dual-track price system (shuanggui zhi). The industrial core of the socialist economy would remain under state price controls, while “nonessential” goods at the margins were gradually commodified, enabling China to maximize its economic potential.

Interestingly, Weber traces this development back to before Karl Marx was even born:

She frames the debates of the 1980s in terms derived from the text Guanzi, from the seventh century bce, which argued that in economic questions, one should distinguish between “light and heavy” goods (qingzhong): that is, between “heavy” essential goods, such as salt, grains, and silk, which the state has a duty to regulate, versus everything else, which officials could leave unprotected from market dynamics.

This suggests to me that an excessive focus on "market dynamics" can result in missing out on what is happening with the production of "essential" goods. Perhaps, what it does signal is a continuing break from the West. One thing that seems to have led up to this break, and not discussed in the book review, is the whole question of intellectual property rights. That is a symptom of what China most needed from the West: technological know-how. It is as if the country has reached a point where it has received diminishing returns from its gains on that front and is now ready to turn inward. Trump's so-called "trade war" may have also been a big prompt in that direction.

Admittedly, these comments on my part are a bit speculative as I have not been able to focus on China as much as I might have liked due to the distraction of so many other interesting issues raging across the planet. So, I am trying to keep my mind open to alternative ways of looking at things in regards to China. For those more interested in focusing on China, the two books reviewed in The Nation sound like they may be a good place to start.

Here is a link to that review. I subscribe to The Nation so I don't know if the link is available to those of you who do not:

https://www.thenation.com/article/world ... e-markets/

[caltrek]

Chinese Stocks in U.S. Roar Back on State’s Pro-Market Pledge
by Farah Elbahrawy
March 16, 2022

https://www.bloomberg.com/news/articles ... te-support

Introduction:

(Bloomberg) Chinese stocks listed on U.S. exchanges soared the most since at least 2001 after Beijing vowed to keep its stock market stable and support overseas share listings.

The Nasdaq Golden Dragon China Index jumped as much as 18% Wednesday after officials vowed to keep battered capital markets stable and promised to ease a regulatory crackdown, support property and technology companies.

Alibaba Group Holding Ltd. rallied as much as 21% in its biggest intraday gain since September 2014, while JD.com Inc. and Didi Global Inc. each gained at least 25%.

The American depository receipts are tracking a rally in Asian stocks after China’s announcement, with the Hang Seng Tech Index surging 22%, the most on record. U.S. stock benchmarks also gained Wednesday after the Kremlin hinted at progress in peace talks with Ukraine and China’s market pledge.
“What we saw today is the regulatory risk premiums going away,” said Olivier d’Assier, head of Asia Pacific applied research at Qontigo. “Regulatory risk was the biggest worry for investors and they are right now breathing a sigh of relief on Beijing’s speech.”

[funkervogt]

Kohl's has lost around 17% of its market share since 2011, primarily to off-price retailers such as TJMaxx (TJX), as well as Amazon, according to UBS.
"[F]orces like consumers' migration to online and preference for value have contributed to this erosion," UBS analyst Jay Sole said in a recent report. "This will likely continue after the pandemic."

https://www.cnn.com/2022/03/19/business ... index.html

[Yuli Ban]

[Yuli Ban]

Absolutely the Dems are dying

[Yuli Ban]

[Yuli Ban]

[Yuli Ban]

[Yuli Ban]

There are doomsday visions of supply chains – already under pressure due to the pandemic – collapsing altogether, businesses forced into bankruptcy, mass unemployment.

The head of IG Metall, Jörg Hoffmann, a union that represents 1.2 million workers in the chemical, metal processing and food production, has warned of “a recession deeper than any of the recessions we have known until now.”

[wjfox]

Britain could fall into recession this summer, say experts

Inflation will limit UK consumers’ spending power, with energy costs a particular problem

Mon 18 Apr 2022 12.09 BST

Britain’s economy is at growing risk of falling into a summer recession amid the biggest squeeze on household incomes since the mid 1950s, as soaring inflation curtails consumer spending power, forecasters have said.

Economists said the double blow from slowing post-lockdown growth and rising living costs after Russia’s invasion of Ukraine could result in a fall in gross domestic product (GDP) for two consecutive quarters, which is the definition of a recession.

After a weaker-than-expected growth performance in February, and with the inflation rate reaching the highest levels since 1992 last month, City forecasters said UK GDP was now on track to grow by about 1% in the first quarter of 2022 before slipping into reverse this summer.

Analysts said activity would be reduced by an extra bank holiday for the Queen’s platinum jubilee in June, as public holidays usually lead to a drop in overall economic output. The return to lower rates of activity in the health sector after a winter rush to vaccinate people against Covid-19, as well as households reining in their spending amid the soaring cost of living, are also expected to weigh on growth.

James Smith, an economist at the Dutch bank ING, said the economy was likely to shrink in the second quarter. The bank forecasts a 0.3% contraction in the three months to the end of June, followed by growth of just 0.2% in the third quarter.

https://www.theguardian.com/business/20 ... ay-experts