Global Economy: China Is the Only Major Economy to Report Economic Growth for 2020 - by Grace Zhu and Bingyan Wang

China’s economy expanded by 2.3% in 2020, roaring back from a historic contraction in the early months of the year to become the only major world economy to grow in what was a pandemic-ravaged year.

China’s ability to expand, even as the world struggled to control a deadly virus that has killed more than two million people, underscores the country’s success in largely taming the coronavirus within its borders and further cements its place as the dominant economy in Asia.

Note EU-Digest: On Monday, China reported a year-on-year increase of 6.5% for the fourth quarter of 2020 and a 2.3% increase for all of 2020, surpassing analysts' forecasts and making China the the only major economy to log positive growth in 2020.Fortune magazine predicts that financial experts believe that China's economy will overtake that of the US somewhere between 2026 and 2029.

Read more at: China Is the Only Major Economy to Report Economic Growth for 2020 - WSJ

Global Economy: China’s On Top Of The World, But Not For Long - by Sam Hill

China is feeling pretty good about itself. On November 1, President Ji Xinping said the economy will double by 2035. He has reason to be bullish. China has the most people. It produces the most Apples, Aluminum and Autos, and has the world’s biggest Army. And we’re not even out of the “A’s” yet. (Further down the alphabet, it also grows the most wheat.) Each year China files more patent applications than every other country in the world put together. It has $3.3 trillion in foreign reserves and is the world’s number one exporter. It’s not the largest economy in the world yet, but it should pass the U.S. as its domestic consumption takes off. They should enjoy it while they can, because China’s time at the top will be short. How short? 30 years or so, according to the analytics.

Read more: China’s On Top Of The World, But Not For Long

The Global Economy: Real World Economics: Bad trade policies will last for years – by Edward Lotterman

The election Tuesday will be a momentous one in U.S. history, perhaps the most important since 1932 or even 1860. The last four years have been turbulent indeed for our politics and economics. Those splits will remain as we now vote against a backdrop of a world pandemic not seen in a century.

Read more at:Real World Economics: Bad trade policies will last for years – Twin Cities

Global Economic Recession: "US, China, India, Europe can't save global economy from recession - by Linette Lopez

The coronavirus depression will be much worse than the last worldwide recession, because this time no country is strong enough to rescue the global economy.

The story of the Great Recession goes like this: the US and Europe were crippled while working to clean up their devastated banking system, the global services sector suffered without its biggest player — the US consumer engine — but global economic growth didn't completely fall off a cliff because other countries kept money moving around the planet.

Over in China policymakers enacted a massive stimulus to skip over the recession entirely. The country's GDP grew 9.4% in 2009. India chugged along as if the crisis barely happened, with its GDP growing 7.9% in 2009.

But this time there is no corner of the globe that has been left untouched by the pandemic or its effects. And so, there's no country that can reasonably chug along and keep things from getting truly disastrous.

Read more at: 
US, China, India, Europe can't save global economy from recession - Business Insider

Global Economy: Coronavirus: Half a billion people could be pushed into poverty, says UN study

A study says the pandemic could push 8% of the world's population into poverty, prompting calls for a huge rescue package for vulnerable communities. "Never in the 75 years history of our institution have so many countries found themselves in need," said IMF head Kristalina Georgieva,

Note EU-Digest: After the coronavirus has gone we can only sincerely hope the world will not return to the "status quo", where all the wealth is controlled by 2% of the population and big business. It should be a unique moment for major Social and Political change. Hopefully this will be a peaceful revolution, but given the "forces at play", it could also turn into a violent confrontation between the present established "order", and a newly "awakened social order". These are "interesting times" as the Chinese would say.

Read more at:
https://www.euronews.com/2020/04/09/coronavirus-half-a-billion-people-could-be-pushed-into-poverty-says-un-study

Corona virus and the Global Economy ` What Coronavirus Could Mean for the Global Economy

 Read more at :
What Coronavirus Could Mean for the Global Economy: Is a recession inevitable?

Global Economy: Oil prices fall on oversupply worries as virus hits China demand

Oil prices on Monday extended their decline from an early January peak above $70 as the spectre of excess supplies loomed over the market after the spreading coronavirus outbreak hit demand in China, the world's largest oil importer.

Read more at:
https://uk.reuters.com/article/uk-global-oil/oil-prices-fall-on-oversupply-worries-as-virus-hits-china-demand-idUKKBN20408O

Global Economy: The Dow is about to face its stiffest test in years

 Read more at:

The Dow is about to face its stiffest test in years - MarketWatch

Global Economy: Global stocks steady as caution on China virus continues; euro hits seven-week low after ECB announcement

Stocks made a barely positive start in early Asian trade on Friday after the world's health body called it a little too early to declare a coronavirus outbreak a global emergency.

Read more at:
https://uk.reuters.com/article/us-global-markets/global-stocks-steady-as-caution-on-china-virus-continues-euro-hits-seven-week-low-after-ecb-idUKKBN1ZN02O

Global Economic Outlook for 2020 Is Good, but Risks Abound

After a rocky 2018 and truly rough patches in 2019, especially particular sectors such as global manufacturing and U.S. agriculture, the consensus outlook for the global economy next year is surprising

Most mainstream forecasters expect that the worst of the storms are past, and they are expecting global growth to rebound: the International Monetary Fund by 3.4 percent, the World Bank by 2.7 percent.

One big reason for the dose of optimism is the generally looser approach to the money supply taken by central banks around the world, which helped offset some of the pain of trade wars and falling investment in 2019 and promises to allow a modest rebound next year (but which carries its own risks).

Read more at: Economic Outlook for 2020 Is Good, but Risks Abound

Global Economy:The Calm Before the Economic Storm - by John Mauldin

The Friday after Thanksgiving is known for heavy spending in retail stores, but it’s clear that consumers are increasingly turning to the Internet to make their holiday purchases,” said Comscore Chairman Gian Fulgoni at the time. “Online spending on Black Friday has historically represented an early indicator of how the rest of the season will shake out. That the 22-percent growth rate versus last year is outpacing the overall growth rate for the first three weeks of the season should be seen as a sign of positive momentum.

The Great Recession began one month after this “sign of positive momentum.” A strong holiday shopping season won’t mean we are out of the woods and could mean we are just entering them.

Read more at:The Calm Before the Economic Storm | Equities.com

WTO: Canada urges U.S. to save WTO from chaos " brought on by the US Trump Administration"

The global trading system that took decades to build is days away from disarray as the U.S. appears keen to paralyze the World Trade Organization's enforcement system.

Read more at:
https://www.cbc.ca/news/world/canada-urges-u-s-to-save-wto-from-chaos-1.5369843

Global Economy: Donald Trump fine tuning his BS to show there is no reason to worry

Read more at :
https://www.cbc.ca/news/business/recession-economy-1.5256099

Global Economy: Central Bankers Are Sick of Rescuing the World Economy Alone - by William Horobin and Simon Kennedy

Global central bankers are again in the driving seat when it comes to propping up the world economy, but many are demanding governments join them in the rescue effort.

Amid slowing global growth, the Federal Reserve, European Central Bank and perhaps even the Bank of Japan are all set to ease monetary policy in coming months. But with less room to act than in the past, their leaders are telling politicians they will need to assist if a downturn takes hold.

The pressure could be applied in person on Wednesday when central bankers and finance ministers from the Group of Seven nations meet for talks north of Paris. They convene at a hazardous juncture for the global economy, as an unpredictable trade war risks precipitating a deeper downturn, and some bond markets hint at a growing possibility of a recession.

G-7 host nation France may even offer a reason to take note. President Emmanuel Macron’s 17 billion euros ($19.2 billion) of support for consumers in response to the Yellow Vests protests may have been contrary to his deficit-reduction mantra, but is proving fortuitous amid a global slowdown. French growth in 2019 is expected to outpace the euro-area average for the first time in six years.

“We are seeing political risks rising everywhere, so addressing the lack of growth that benefits all is quite urgent,” said Laurence Boone, chief economist at the OECD. “That cannot be achieved only through monetary policy.”
 

France’s GDP is expected to be more resilient than peers this year.

While Powell of the US has warned the U.S. fiscal position is unsustainable in the long-run, he said last week it’s “not a good thing to have monetary policy being the main game in town.” 

The U.S. got a boost in 2018 from President Donald Trump’s $1.5 trillion tax overhaul, but that effect is fading.

Read more at: Central Bankers Are Sick of Rescuing the World Economy Alone - Bloomberg

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Global Economy: Clouds gathering over global economy

Read more at:
http://www.bbc.co.uk/news/business-46734933

Global Economy: the divide between the have and have - not's widening

Read more at:
https://consortiumnews.com/2018/12/31/wall-street-banks-and-angry-citizens/

US ECONOMY: COULD RECORD US DEFICIT TRIGGER THE NEXT RECESSION: ? "As U.S. trade gap widens to dangerous hights."

The U.S. trade deficit rose to a seven-month high in September as imports surged to a record high amid strong domestic demand, offsetting a rebound in exports.

The Commerce Department said on Friday the trade gap increased 1.3 percent to $54.0 billion, widening for a fourth straight month. Data for August was revised to show the trade deficit rising to $53.3 billion instead of the previously reported $53.2 billion.

Could the US Economy collapse?

But here's the bigger question that retail investors and Wall Street are currently asking: Is the current stock market correction over? Given the many headwinds facing stocks and the U.S. and/or global economy, the answer may not be what investors want to hear.

Here are 25 reasons and/or scenarios that could cause the stock market to head substantially lower than where it's currently valued.

1. The ongoing trade war with China escalates, raising material costs, curbing consumer spending, and hurting corporate profits.
2. Corporate share buybacks fail to boost per-share profits as much as expected.
3. Democrats win one or both houses of Congress, hurting the chance of Republicans to pass further fiscal stimulus legislation.
4. The federal budget deficit continues to soar, placing added emphasis on our growing national debt, currently at more than $21 trillion.
5. The U.S. dollar keeps strengthening, placing pressure on exports and worsening the U.S. trade deficit with foreign countries.
6. FANG stocks – that's Facebook, Amazon.com, Netflix, and Google (now Alphabet) -- continue to draw the ire of short-sellers.
7. The Federal Reserve gets overly aggressive with interest rate hikes, sapping lending demand.
8. The yield curve flattens, reducing the desire of banks to lend money.
9. Interest rates rise, providing incentive for investors to ditch volatile equities for the safety of bonds and bank CDs.
10. Britain falls into a "hard Brexit." With few or no trade deals in place, the U.K. falls into recession, taking the U.S. and other developed countries with it.
11. China's economy experiences its slowest growth in decades, placing pressure on its ability to import from the U.S. and other key players.
12. The U.S. housing market shows signs of weakening, with important markets like California seeing a steep drop-off in new home sales.
13. Credit-card delinquencies begin to trickle higher, demonstrating the inability of consumers to meet their payment obligations.
14. The subprime auto loan market bubble bursts.
15. The U.S. goes to war, regardless of the reason or the country in question.
16. An errant tweet from President Trump stirs Wall Street and investors.
17. A flash crash caused by computer algorithms results in substantially reduced liquidity and perpetuates a rapid move lower in the stock market.
18. Investor emotions (especially those of day traders) get out of hand and send traders running for the exit.
19. The unemployment rate, which is at a 49-year low, begins to rise, signaling peak employment and the possibility of a weakening economy.
20. Disruption in important oil-producing countries causes crude prices to skyrocket or plunge. Either way, it could create sticker shock or job losses and adversely impact the U.S. economy.
21. U.S. GDP data shows slowing growth, which, in turn, cools investor expectations for stocks, sending them lower.
22. Inflation comes in far lower than expected, signaling that businesses have little pricing power. The prospect of deflation could wreak havoc on corporate earnings, causing the market to fall.
23. The U.S. debt ceiling is hit (yet again), but the political divide in Congress becomes too great for lawmakers to overcome, allowing the shutdown to perpetuate for months.
24. European debt crisis 2.0 hits, with countries like Italy unable to dig their way out of years of loose borrowing.
25. A widely followed pundit, such as Warren Buffett, sounds the cry of the stock market being overvalued.

In other words, there is no shortage of reasons the stock market could tumble from its recent all-time highs.

Bottom-line, however -it does not look good for the US Economy as the deficit is coming close to a trillion US dollars.Impossible to pay it back, unless by slashing government spending, and increasing taxes.

Unlike the trillion dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits that will soon reach and exceed $1 trillion are permanent and will only get worse in the years ahead.

The Trump deficits are the result of changes in federal spending and revenue that will continue to be in place until some president and Congress decide to reverse them, that is, to increase taxes and make cuts to popular programs.

EU-Digest

Global Economy: The Big, Dangerous Bubble in Corporate Debt - by William D. Cohan

The $30 trillion domestic stock market seems to get all the attention. When the stock market sets new highs, we instinctively feel things are good and getting better. When it tanks, as happened in the initial months of the 2008 financial crisis, we think things are going to hell.

But the larger domestic debt market — at around $41 trillion for the bond market alone — reveals more about our nation’s financial health. And right now, the debt market is broadcasting a dangerous message: 

Investors, desperate for debt instruments that pay high interest, have been overpaying for riskier and riskier obligations. University endowments, pension funds, mutual funds and hedge funds have been pouring money into the bond market with little concern that bonds can be every bit as dangerous to own as stocks.

Unlike buying a stock, which is a calculated gamble, buying a bond or a loan is a contractual obligation: A borrower must repay a lender the borrowed amount, plus interest as compensation.

The upside in a bond is limited to the contractual interest payments, but the downside is theoretically protected. Bondholders expect to get their money back, as long as the borrower doesn’t default or go bankrupt.

For the complete report go to the NY times 

Global Economy: US, euro zone growth readings to tell story of divergence

The US and euro zone economies remain a world apart and growth data due in the coming days will only highlight the widening gap, suggesting that monetary policy will continue to move in opposing directions on the two sides of the Atlantic.

For all the details
Read more at: The Economic Times

USA: Trump Tariffs: Trump’s China Trade War Has Deeper Agenda - by F. William Engdahl

Washington’s recent trade actions are aimed foursquare at China, not at the EU or other trade partners. However, the aim is not to reduce China exports to the US. The aim is a fundamental opening up of the Chinese economy to the Washington free market liberal reforms that China has steadfastly resisted. In a sense, it is a new version of the Anglo-American Opium Wars of the 1840s using other means to open China. China’s vision of its economic sovereignty is at direct odds with that of Washington. Because of this Xi Jinping is not about to cave in and Trump’s latest threats of escalation risk a major destabilization of the precarious global financial system.

There exist basically two contradictory visions of the Chinese future economy and this is what the Washington attacks are about. One is to force China to open its economy on terms dictated by the West, especially by US multinationals. The second vision is one put in place during the first term of Xi Jinping aiming to transform China’s huge economy into the world’s leading technology nation over the coming seven years, a tall order but one Beijing takes deadly serious. It is also integral to the vision behind Xi Jinping’s Belt Road Initiative.

Washington is determined to push China to adhere to a document it produced in 2013 together with the World Bank during the time Robert Zoellick headed it. The document, China 2030, calls for China to complete radical market reforms. It states,

“It is imperative that China … develop a market-based system with sound foundations…while a vigorous private sector plays the more important role of driving growth.”

The report, cosigned then by the Chinese Finance Ministry and State Council, further declared that

“China’s strategy toward the world will need to be governed by a few key principles: open markets, fairness and equity, mutually beneficial cooperation, global inclusiveness and sustainable development.”

Referring to the current Washington strategy of imposing import tariffs on billions worth of Chinese products, Michael Pillsbury, a neo-conservative former Trump Transition adviser and China expert told the South China Morning Post,

“The endgame is that China complete its deep reforms of its economy as laid out in the joint report,” referring to the World Bank Zoellick China 2030 report.

 Read more: Trump’s China Trade War Has Deeper Agenda | Global Research - Centre for Research on Globalization