London-based financial services giant HSBC will permanently cut its corporate travel budget in half and look favorably on requests by as many as 70 percent of its employees to work from home at least some of the time, CEO Noel Quinn told Bloomberg in a 1 September interview. (See “Europe’s Banks Permanently Slash Business Travel,”...
Category: TRENDS ON THE GLOBAL ECONOMIC FRONT
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ECB “MODERATELY” REDUCES BOND PURCHASES
The European Central Bank (ECB) will continue its €1.85-trillion bond-buying program at a “moderately lower pace” through the rest of this year, bank president Christine Lagarde said last week, but she reassured markets that this was not a formal reduction in the program, which is due to expire early next year. The move only reverses...
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WORLD ECONOMY HELD HOSTAGE BY SUPPLY CHAIN WOES
Most of Europe’s electrical equipment manufacturers, and about half of the continent’s computer, machinery, and rubber makers, report shortages of crucial materials. Eighty-three percent of German businesses reported price hikes or delivery snafus with raw materials, intermediate products, and finished goods in August, according to a survey by DIHK. Sixty percent of Europe’s car makers...
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INFLATION COULD CAUSE GLOBAL COLLAPSE
If left unchecked, worldwide inflation could spark a 2008-scale global financial collapse by early 2023, the Bank of Russia warned in its annual monetary policy forecast. Given current levels of public and private debt, the global economy could “deteriorate drastically and rapidly” if the U.S. Federal Reserve tightens policy quickly to tame inflation, the bank...
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AFGHANISTAN OUT OF CASH. WORST TO COME
The U.S. has frozen a planned shipment of hundreds of millions of dollars in cash, due to be sent on 23 August, to Afghanistan now that the Taliban has taken control of the country, The Wall Street Journal reported. Also, the International Monetary Fund (IMF) has paused delivery of $450 million in aid it was...
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NEW ZEALAND CENTRAL BANK DELAYS RATE: WHAT’S NEXT?
On 18 August, the Reserve Bank of New Zealand’s monetary policy committee decided to delay a planned raise in interest rates after seven cases of the COVID virus were confirmed in Auckland, the capital city, and the government locked down the country. There were at least 120 cases among the country’s population, health officials estimated,...
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CHINA CLOSES KEY PORT TERMINAL: TROUBLE AHEAD
A week after detecting a single COVID case among dock workers, Chinese authorities are forcing one of three terminals at the port of Ningbo-Zhoushan, the world’s third-busiest transit point for international shipping, to remain closed. The terminal is a key point from which Chinese goods, from toys to furniture to auto parts, are sent to...
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CHINA PLAYS “TOO BIG TO FAIL” SCHEME
Huarong Asset Management, the financial conglomerate that became an exemplar of recklessness in China’s financial sector, reported gaining financial support from a cadre of state-backed companies after it posted a loss of $16 billion in 2020, The New York Times reported. Huarong gave no details on the amount of support it would receive or when,...
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CHINA SHARE PRICES SLIDE ON GOVERNMENT TECH CRACKDOWN
Hong Kong’s Hang Seng stock index slipped 1.8 percent Friday, ending the week down almost 6 percent; the mainland’s CSI 300, listing the country’s most significant stocks, closed Friday off 3.8 percent. Prices sank under the weight of ongoing government scrutiny and criticism of Internet companies. (See “XI RAMPS UP ECONOMIC ‘CULTURAL REVOLUTION’ IN CHINA,”...
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GLOBAL TRAVEL INDUSTRY REELING
Worldwide, the travel industry lost a billion visitors in 2020, or 73 percent of 2019’s number, researcher site Statista reported. (See “LOCKDOWNS COST U.S. $1.1 TRILLION IN LOST TRAVEL INCOME,” Trends Journal, 23 March 2021.) This year is, if anything, worse. During the first five months of 2021, global travel plunged 85 percent below 2019’s...