Each week, we report instances where the money junky hedge funds, private equity groups and the already big companies swallow another piece of the global economy.
Category: TRENDS ON THE GLOBAL ECONOMIC FRONT – Nov 22 2022
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SPOTLIGHT: THE DIESEL FUEL CRUNCH
While gasoline prices have risen 14 percent so far this year, diesel’s price has shot up by 50 percent to a record $5.35 a gallon, according to the American Automobile Association.
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JAPAN’S ECONOMY SHRINKS AS INFLATION SETS FOUR-DECADE RECORD
In this year’s third quarter, Japan’s economy contracted for the first time in a year, shrinking 1.2 percent as galloping inflation raised import costs and the yen’s value sank to its lowest in decades.
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TOP TREND 2022, DRAGFLATION: BRITISH BUDGET CHIEF DEFENDS SPENDING CUTS, TAX HIKES
Last week, Jeremy Hunt, the U.K.’s finance minister, formally known as Chancellor of the Exchequer, defended his government’s £55 billion in spending cuts and tax increases designed to dig Britain out of its debts, tame an inflation rate of 11 percent, and convince investors that the U.K. is on the path to financial stability.
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SPOTLIGHT: INFLATION
Europe’s banks should set aside greater reserves to cover bad loans, regulators should require investment funds to hold more cash to cover a surge in withdrawals, and the European Central Bank (ECB) should not delay in beginning to sell its €5-trillion bond hoard next year, bank vice-president Luis de Guindos said in a statement accompanying the ECB’s semi-annual review of the region’s financial stability.
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OIL PRICES TUMBLE: REAL OR FAKE?
This is the headline on the front page of today’s Wall Street Journal: “OPEC + Weighs Pumping More Oil.”
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CHILE READY TO SLASH INTEREST RATE NEXT YEAR, MARKETS PREDICT
Interest-rate futures markets are betting that Chile’s central bank will chop more than 5 percentage points from its current 11.25-percent rate by the end of next year, according to Bloomberg.
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TREND: BANK OF ISRAEL INCREASES KEY INTEREST RATE LESS THAN EXPECTED
Validating analysts’ our forecasts cited in “Future Rate Hikes Will Be Smaller” in this issue, on 21 November the Bank of Israel (BoI) increased its base interest rate by a half-point, not the three-quarters of a point that analysts had expected.
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FUTURE RATE HIKES WILL BE SMALLER
Central banks’ future rate hikes will be smaller, analysts say, because recent large rate boosts are showing signs of taming inflation—and because signs are growing that a worldwide economic recession is looming.
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WHEN THE ECONOMY FALLS JOBS GO WITH IT
Inflation and interest rate hikes are causing companies in many sectors to lay off employees. To illustrate the employment trends and the socioeconomic implications, each week we list job losses.