President Biden cheered the report in a statement Thursday morning. “For months, doomsayers have been arguing that the U.S. economy is in a recession, and congressional Republicans have been rooting for a downturn,” he said. “But today we got further evidence that our economic recovery is continuing to power forward.”

By one common definition, the U.S. economy entered a recession when it experienced two straight quarters of shrinking G.D.P. at the start of the year. Officially, however, recessions are determined by a group of researchers at the National Bureau of Economic Research, who look at a broader array of indicators, including employment, income and spending.

Most analysts don’t believe the economy meets that more formal definition, and the third-quarter numbers — which slightly exceeded forecasters’ expectations — provided further evidence that a recession had not yet begun.

But the overall G.D.P. figures were skewed by the international trade component, which often exhibits big swings from one period to the next. Economists tend to focus on less volatile components, which have showed the recovery steadily losing momentum as the year has progressed. One closely watched measure suggested that private-sector demand stalled out almost completely in the third quarter.

Mortgage rates passed 7 percent on Thursday, their highest level since 2002.

“Housing is just the single largest trigger to additional spending, and it’s not there anymore; it’s going in reverse,” said Diane Swonk, chief economist at the accounting firm KPMG. “This has been a stunning turnaround in housing, and when things start to go really quickly, you start to wonder, what are the knock-on effects, what are the spillover effects?”

The third quarter was in some sense a mirror image of the first quarter, when G.D.P. shrank but consumer spending was strong. In both cases, the swings were driven by international trade. Imports, which don’t count toward domestic production figures, soared early this year as the strong economic recovery led Americans to buy more goods from overseas. Exports slumped as the rest of the world recovered more slowly from the pandemic.

Both trends have begun to reverse as American consumers have shifted more of their spending toward services and away from imported goods, and as foreign demand for American-made goods has recovered. Supply-chain disruptions have added to the volatility, leading to big swings in the data from quarter to quarter.

Few economists expect the strong trade figures from the third quarter to continue, especially because the strong dollar will make American goods less attractive overseas.

Jim Tankersley contributed reporting.

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A Strong Dollar Is Wreaking Havoc on Emerging Markets. A Debt Crisis Could Be Next.

The average household in Ghana is paying two-thirds more than it did last year for diesel, flour and other necessities. In Egypt, wheat is so expensive that the government has fallen half a billion dollars short of its budget for a bread subsidy it provides to its citizens. And Sri Lanka, already struggling to control a political crisis, is running out of fuel, food and medical supplies.

A strong dollar is making the problems worse.

Compared with other currencies, the U.S. dollar is the strongest it has been in two decades. It is rising because the Federal Reserve has increased interest rates sharply to combat inflation and because America’s economic health is better than most. Together, these factors have attracted investors from all over the world. Sometimes they simply buy dollars, but even if investors buy other assets, like government bonds, they need dollars to do so — in each case pushing up the currency’s value.

That strength has become much of the world’s weakness. The dollar is the de facto currency for global trade, and its steep rise is squeezing dozens of lower-income nations, chiefly those that rely heavily on imports of food and oil and borrow in dollars to fund them.

But much of the damage is already behind us.

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  • “We are in a fragile situation,” Mr. El-Erian said. “Country after country is flashing amber, and some are already flashing red.”

    Many lower-income countries were already struggling during the pandemic.

    Roughly 22 million people in Ghana, or a third of its population, reported a decline in their income between April 2020 and May 2021, according to a survey from the World Bank and Unicef. Adults in almost half of the households with children surveyed said they were skipping a meal because they didn’t have enough money. Almost three-quarters said the prices of major food items had increased.

    Then came Russia’s invasion of Ukraine. The war between two of the world’s largest exporters of food and energy led to a big surge in prices, especially for importers like Ghana. Consumer prices have gone up 30 percent for the year through June, according to data from the research firm Moody’s Analytics. For household essentials, annual inflation has reached 60 percent or more this year, the S&P data shows.

    To illustrate this, consider the price of a barrel of oil in dollars versus the Ghanaian cedi. At the beginning of October last year, the price of oil stood at $78.52 per barrel, rising to nearly $130 per barrel in March before falling back to $87.96 at the beginning of this month, a one-year increase of 12 percent in dollar terms. Over the same period, the Ghanaian cedi has weakened over 40 percent against the dollar, meaning that the same barrel of oil that cost roughly 475 cedi a year ago now costs over 900 cedi, almost twice as much.

    Adding to the problem are large state-funded subsidies, some taken on or increased through the pandemic, that are now weighing on government finances.

    Ghana’s president cut fuel taxes in November 2021, losing roughly $22 million in projected revenue for the government — the latest available numbers.

    In Egypt, spending on what the government refers to as “supply commodities,” almost all of which is wheat for its long-running bread subsidy, is expected to come in at around 7 percent of all government spending this year, 12 percent higher — or more than half a billion dollars — than the government budgeted.

    As costs ballooned throughout the pandemic, governments took on more debt. Ghana’s public debt grew to nearly $60 billion from roughly $40 billion at the end of 2019, or to nearly 80 percent of its gross domestic product from around 63 percent, according to Moody’s.

    It’s one of four countries listed by S&P, alongside Pakistan, Nigeria and Sri Lanka, where interest payments alone account for more than half of the government’s revenues.

    “We can’t forget that this is happening on the back end of a once-in-a-century pandemic in which governments, to try and support families as best they could, did borrow more,” said Frank Gill, an analyst at S&P. “This is a shock following up on another shock.”

    In May, Sri Lanka defaulted on its government debt for the first time in its history. Over the past month, the governments of Egypt, Pakistan and Ghana have all reached out to the International Monetary Fund for a bailout as they struggle to meet their debt financing needs, no longer able to turn to international investors for more money.

    “I don’t think there is a lot of appetite to lend money to some of these countries,” said Brian Weinstein, co-head of credit trading at Bank of America. “They are incredibly vulnerable at the moment.”

    That vulnerability is already reflected in the bond market.

    In 2016, Ghana borrowed $1 billion for 10 years, paying an interest rate of just over 8 percent. As the country’s financial position has worsened and investors have backed away, the yield — indicative of what it would now cost Ghana to borrow money until 2026 — has risen to above 35 percent.

    It’s an untenable cost of debt for a country in Ghana’s situation. And Ghana is not alone. For bonds that also mature in 2026, yields for Pakistan have reached almost 40 percent.

    “We have concerns where any country has yields that calls into question their ability to refinance in public markets,” said Charles Cohen, deputy division chief of monetary and capital market departments at IMF.

    The risk of a sovereign debt crisis in some emerging markets is “very, very high,” said Jesse Rogers, an economist at Moody’s Analytics. Mr. Rogers likened the current situation to the debt crises that crushed Latin America in the 1980s — the last time the Fed sought to quell soaring inflation.

    Already this year, more than $80 billion has been withdrawn from mutual funds and exchange-traded funds — two popular types of investment products — that buy emerging market bonds, according to EPFR Global, a data provider. As investors sell, the United States is often the beneficiary, further strengthening the dollar.

    “It’s by far the worst year for outflows the market has ever seen,” said Pramol Dhawan, head of emerging markets at Pimco.

    Even citizens in some of these countries are trying to exchange their money for dollars, fearful of what’s to come and of further currency depreciation — yet inadvertently also contributing to it.

    “For pockets of emerging markets, this is a really challenging backdrop and one of the most challenging backdrops we have faced for many years,” Mr. Dhawan said.

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    An Israel-Lebanon Border Deal Could Increase Natural Gas Supplies

    Israel and Lebanon have been at war since 1948, but the countries are close to an agreement that could increase production of natural gas, helping energy-starved Europe.

    Officials from the two countries have said they are close to resolving long-running disputes over their maritime borders, which would allow energy companies to extract more fossil fuels from offshore fields in the Mediterranean Sea.

    The increased production won’t make up for the gas that Europe is no longer getting from Russia. But energy experts say an Israel-Lebanon agreement should give a vital push to efforts to produce more gas in that part of the world. Over the last four years, energy production in the eastern Mediterranean has been growing as Israel, Egypt, Jordan and Cyprus have worked together to take advantage of oil and gas buried under the sea.

    “This is a very important step for the region to come into its own,” said Charif Souki, the Lebanese-American executive chairman of Tellurian, a liquefied natural gas company based in Houston. “Players are finally realizing that it’s better to cooperate than to continuously fight.”

    The Israel-Lebanon negotiations will most directly affect the Karish field, which is set to produce gas for Israel’s domestic use. That fuel is expected to displace gas produced from other fields, which can then be exported. The new field is also expected to produce a small amount of oil.

    Chevron, the second-largest U.S. oil and gas company, and several smaller businesses are already producing gas from two larger fields off Israel’s coast. That fuel has increasingly replaced coal in the country’s power plants and factories. Israel now has so much gas that it has become a net exporter of energy, sending fuel to neighbors like Jordan and Egypt. Some of that gas has also found its way to Europe and other parts of the world from L.N.G. export terminals in Egypt.

    The U.S. government, across several administrations, has encouraged the growth of the gas trade in the region by helping to negotiate deals between countries that have long had tense relations. The Ukraine crisis has accelerated efforts to explore and produce natural gas because of the soaring cost of the fuel in Europe, where countries are desperate to end their dependence on Russian gas.

    Chevron and its Israeli partners are discussing the possibility of building a floating liquefied natural gas platform in the Leviathan gas field, Israel’s largest. The companies are expected to make a decision on the project in a few months.

    But getting the gas out of the region will not be easy. Floating export terminals are vulnerable to terrorist attack. And, even if they could be adequately secured, the terminals will not be able to process as much gas as the larger coastal facilities used in major gas producers like the United States, Qatar and Australia. Building terminals on land can take several years, if not often longer, because of opposition from environmental and other groups.

    “Energy infrastructure offshore is very volatile and vulnerable,” said Gal Luft, a former Israeli military officer who is the co-director of the Institute for the Analysis of Global Security in Washington. “You have to manage risk.”

    Theoretically, transporting gas by pipelines would be easier than liquefying natural gas for export before converting it back into gas at its destination. But building long-distance pipelines is expensive and difficult. A long-running conflict between Turkey, Cyprus and Greece, for example, has made constructing a pipeline from Israel to southern Europe incredibly challenging, if not impossible.

    Even an Israel-Lebanon border agreement faces risks. Hezbollah has threatened to attack the Karish field, and it sent unarmed drones over it in July; Israeli officials said they had shot down the ‌aircraft.

    Still, Israeli and Lebanese officials have said in recent days that they are pressing on with the negotiations, with officials from the Biden administration acting as a go-between, and are close to a deal. The talks gathered momentum during the United Nations General Assembly last week.

    Prime Minister Najib Mikati of Lebanon said on Thursday at the United Nations that he was confident about reaching an agreement with Israel. “Lebanon is well aware of the importance of the promising energy market in the eastern Mediterranean for the prosperity of all countries in the region,” he said, “but also to meet the needs of importing nations.”

    U.S. and other Western oil companies have long shied away from Israel, in part because they do not want to alienate Arab countries. But, as relations between Israel and countries like Egypt, Jordan and, more recently, the United Arab Emirates have improved more companies have expressed interest in the eastern Mediterranean.

    An agreement between Israel and Lebanon could accelerate that trend.

    “I think it will appease many minds,” said Leslie Palti-Guzman, chief executive of Gas Vista, a consulting firm. “Companies that have been reluctant to invest could be more incentivized to develop additional projects.”

    Gas fields in the Mediterranean are one of several new suppliers that Europe will need as it seeks a long-term replacement for Russian gas. Other suppliers include energy companies operating in the United States, Qatar, Africa, the Caspian Sea and the North Sea.

    “There is no silver bullet,” said Paddy Blewer, spokesman for Energean, a London-based exploration company that hopes to begin producing gas in the Karish field. “The East Mediterranean is one of a series of marginal gains that Europe has to look at.”

    Energean plans to begin production in the next few weeks, and has said it expects to produce up to 8 billion cubic meters of gas a year by 2025. If it is successful, the company could significantly add to Israel’s output. The country will produce roughly 22 billion cubic meters this year. Once an importer of almost all of its energy, Israel increased gas production by 22 percent in the first half of the year compared with the same period in 2021. It exported roughly 40 percent of its gas, earning the government royalties of $250 million.

    The agreement between Israel and Lebanon will also open the way to drilling in Lebanese waters by a consortium led by Eni of Italy and TotalEnergies of France. Lebanese officials view natural gas as a critical financial tool in its attempts to revive the country’s depressed economy. The government has wanted to drill offshore since at least 2014, but disputes with Israel over the border have delayed exploration.

    “It’s not for sure Lebanon will find gas,” said Chakib Khelil, a former president of the Organization of the Petroleum Exporting Countries. “But, if they do, Lebanon will get a big boost.”

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    Strong Dollar Is Good for the US but Bad for the World

    The Federal Reserve’s determination to crush inflation at home by raising interest rates is inflicting profound pain in other countries — pushing up prices, ballooning the size of debt payments and increasing the risk of a deep recession.

    Those interest rate increases are pumping up the value of the dollar — the go-to currency for much of the world’s trade and transactions — and causing economic turmoil in both rich and poor nations. In Britain and across much of the European continent, the dollar’s acceleration is helping feed stinging inflation.

    On Monday, the British pound touched a record low against the dollar as investors balked at a government tax cut and spending plan. And China, which tightly controls its currency, fixed the renminbi at its lowest level in two years while taking steps to manage its decline.

    Somalia, where the risk of starvation already lurks, the strong dollar is pushing up the price of imported food, fuel and medicine. The strong dollar is nudging debt-ridden Argentina, Egypt and Kenya closer to default and threatening to discourage foreign investment in emerging markets like India and South Korea.

    the International Monetary Fund.

    Japanese yen has reached a decades-long high. The euro, used by 19 nations across Europe, reached 1-to-1 parity with the dollar in June for the first time since 2002. The dollar is clobbering other currencies as well, including the Brazilian real, the South Korean won and the Tunisian dinar.

    the economic outlook in the United States, however cloudy, is still better than in most other regions.

    loss of purchasing power over time, meaning your dollar will not go as far tomorrow as it did today. It is typically expressed as the annual change in prices for everyday goods and services such as food, furniture, apparel, transportation and toys.

    A fragile currency can sometimes work as “a buffering mechanism,” causing nations to import less and export more, Mr. Prasad said. But today, many “are not seeing the benefits of stronger growth.”

    Still, they must pay more for essential imports like oil, wheat or pharmaceuticals as well as for loan bills due from billion-dollar debts.

    debt crisis in Latin America in the 1980s.

    The situation is particularly fraught because so many countries ran up above-average debts to deal with the fallout from the pandemic. And now they are facing renewed pressure to offer public support as food and energy prices soar.

    Indonesia this month, thousands of protesters, angry over a 30 percent price increase on subsidized fuel, clashed with the police. In Tunisia, a shortage of subsidized food items like sugar, coffee, flour and eggs has shuttered cafes and emptied market shelves.

    New research on the impact of a strong dollar on emerging nations found that it drags down economic progress across the board.

    “You can see these very pronounced negative effects of a stronger dollar,” said Maurice Obstfeld, an economics professor at the University of California, Berkeley, and an author of the study.

    central banks feel pressure to raise interest rates to bolster their currencies and prevent import prices from skyrocketing. Last week, Argentina, the Philippines, Brazil, Indonesia, South Africa, the United Arab Emirates, Sweden, Switzerland, Saudi Arabia, Britain and Norway raised interest rates.

    World Bank warned this month that simultaneous interest rate increases are pushing the world toward a recession and developing nations toward a string of financial crises that would inflict “lasting harm.”

    Clearly, the Fed’s mandate is to look after the American economy, but some economists and foreign policymakers argue it should pay more attention to the fallout its decisions have on the rest of the world.

    In 1998, Alan Greenspan, a five-term Fed chair, argued that “it is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress.”

    The United States is now facing a slowing economy, but the essential dilemma is the same.

    “Central banks have purely domestic mandates,” said Mr. Obstfeld, the U.C. Berkeley economist, but financial and trade globalization have made economies more interdependent than they have ever been and so closer cooperation is needed. “I don’t think central banks can have the luxury of not thinking about what’s happening abroad.”

    Flávia Milhorance contributed reporting from Rio de Janeiro.

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    How a Quebec Lithium Mine May Help Make Electric Cars Affordable

    About 350 miles northwest of Montreal, amid a vast pine forest, is a deep mining pit with walls of mottled rock. The pit has changed hands repeatedly and been mired in bankruptcy, but now it could help determine the future of electric vehicles.

    The mine contains lithium, an indispensable ingredient in electric car batteries that is in short supply. If it opens on schedule early next year, it will be the second North American source of that metal, offering hope that badly needed raw materials can be extracted and refined close to Canadian, U.S. and Mexican auto factories, in line with Biden administration policies that aim to break China’s dominance of the battery supply chain.

    Having more mines will also help contain the price of lithium, which has soared fivefold since mid-2021, pushing the cost of electric vehicles so high that they are out of reach for many drivers. The average new electric car in the United States costs about $66,000, just a few thousand dollars short of the median household income last year.

    lithium mines are in various stages of development in Canada and the United States. Canada has made it a mission to become a major source of raw materials and components for electric vehicles. But most of these projects are years away from production. Even if they are able to raise the billions of dollars needed to get going, there is no guarantee they will yield enough lithium to meet the continent’s needs.

    eliminate this cap and extend the tax credit until 2032; used cars will also qualify for a credit of up to $4,000.

    For many people in government and the auto industry, the main concern is whether there will be enough lithium to meet soaring demand for electric vehicles.

    The Inflation Reduction Act, which President Biden signed in August, has raised the stakes for the auto industry. To qualify for several incentives and subsidies in the law, which go to car buyers and automakers and are worth a total of $10,000 or more per electric vehicle, battery makers must use raw materials from North America or a country with which the United States has a trade agreement.

    rising fast.

    California and other states move to ban internal combustion engines. “It’s going to take everything we can do and our competitors can do over the next five years to keep up,” Mr. Norris said.

    One of the first things that Sayona had to do when it took over the La Corne mine was pump out water that had filled the pit, exposing terraced walls of dark and pale stone from previous excavations. Lighter rock contains lithium.

    After being blasted loose and crushed, the rock is processed in several stages to remove waste material. A short drive from the mine, inside a large building with walls of corrugated blue metal, a laser scanner uses jets of compressed air to separate light-colored lithium ore. The ore is then refined in vats filled with detergent and water, where the lithium floats to the surface and is skimmed away.

    The end product looks like fine white sand but it is still only about 6 percent lithium. The rest includes aluminum, silicon and other substances. The material is sent to refineries, most of them in China, to be further purified.

    Yves Desrosiers, an engineer and a senior adviser at Sayona, began working at the La Corne mine in 2012. During a tour, he expressed satisfaction at what he said were improvements made by Sayona and Piedmont. Those include better control of dust, and a plan to restore the site once the lithium runs out in a few decades.

    “The productivity will be a lot better because we are correcting everything,” Mr. Desrosiers said. In a few years, the company plans to upgrade the facility to produce lithium carbonate, which contains a much higher concentration of lithium than the raw metal extracted from the ground.

    The operation will get its electricity from Quebec’s abundant hydropower plants, and will use only recycled water in the separation process, Mr. Desrosiers said. Still, environmental activists are watching the project warily.

    Mining is a pillar of the Quebec economy, and the area around La Corne is populated with people whose livelihoods depend on extraction of iron, nickel, copper, zinc and other metals. There is an active gold mine near the largest city in the area, Val-d’Or, or Valley of Gold.

    Mining “is our life,” said Sébastien D’Astous, a metallurgist turned politician who is the mayor of Amos, a small city north of La Corne. “Everybody knows, or has in the near family, people who work in mining or for contractors.”

    Most people support the lithium mine, but a significant minority oppose it, Mr. D’Astous said. Opponents fear that another lithium mine being developed by Sayona in nearby La Motte, Quebec, could contaminate an underground river.

    Rodrigue Turgeon, a local lawyer and program co-leader for MiningWatch Canada, a watchdog group, has pushed to make sure the Sayona mines undergo rigorous environmental reviews. Long Point First Nation, an Indigenous group that says the mines are on its ancestral territory, wants to conduct its own environmental impact study.

    Sébastien Lemire, who represents the region around La Corne in the Canadian Parliament, said he wanted to make sure that the wealth created by lithium mining flowed to the people of Quebec rather than to outside investors.

    Mr. Lemire praised activists for being “vigilant” about environmental standards, but he favors the mine and drives an electric car, a Chevrolet Bolt.

    “If we don’t do it,” he said at a cafe in La Corne, “we’re missing the opportunity of the electrification of transport.”

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    Heat and Drought in Europe Strain Energy Supply

    ASERAL, Norway — In a Nordic land famous for its steep fjords, where water is very nearly a way of life, Sverre Eikeland scaled down the boulders that form the walls of one of Norway’s chief reservoirs, past the driftwood that protruded like something caught in the dam’s teeth, and stood on dry land that should have been deeply submerged.

    “You see the band where the vegetation stops,” said Mr. Eikeland, 43, the chief operating officer of Agder Energi, pointing at a stark, arid line 50 feet above the Skjerkevatn reservoir’s surface. “That’s where the water level should be.”

    thousands of northern homes without electricity.

    reignited talk of investing in nuclear power and has dried up the waterways crucial for transporting coal.

    most severe drought on record in France has also cost the country’s energy production, as nuclear plants responsible for more than 70 percent of the country’s electricity had to cut down activity temporarily to avoid discharging dangerously warm water into rivers.

    Many of France’s 56 nuclear plants were already offline for maintenance issues. But the rivers that cool reactors have become so warm as a result of the punishing heat that strict rules designed to protect wildlife have prevented the flushing of the even warmer water from the plants back into the waterways.

    power grid operators to hire more workers amid fears of electricity shortages.

    In Norway, a winter without much snow and an exceptionally dry spring, including the driest April in 122 years, reduced water levels in lakes and rivers. Shallow waters in Mjosa, the country’s largest lake, kept its famed Skibladner paddle wheel boat tied up at port and prompted city officials in Oslo to send out text messages urging people to take shorter showers and avoid watering lawns.

    “Do that for Oslo,” read the text message, “so that we’ll still have water for the most important things in our lives.” In May, Statnett SF, the operator of the national electricity grid, raised the alarm about shortfalls.

    But the skies offered no relief and this month, as the country’s hydro reservoirs — especially in the south — approached what Energy Minister Terje Aasland has called “very low” levels, hydropower producers cut output to save water for the coming winter.

    The reservoirs were about 60 percent full, about 10 percent less than the average over the previous two decades, according to data from the energy regulator.

    Southern Norway, which holds more than a third of the country’s reservoirs, is dotted with red barns on green fields and fishing boats along the coast. On a stream in the Agder region, a sign put up by the energy company, like a relic from another time, warned, “The water level can rise suddenly and without warning.”

    But recent months have shown that there is danger in the water level dropping, too. Reservoirs had dwindled to their lowest point in 20 years, at just 46 percent full. One, Rygene, was so low as to force the temporary closing of the plant. On Tuesday, the rainstorms returned, but the ground was so dry, Mr. Eikeland said as he surveyed the basin, that the earth “drinks up all the water” and the water levels in the reservoirs barely rose.

    He sped his electric car farther south toward Kristiansand, where a large grid sends electricity around the country’s south and to Denmark. In a fenced-off area above the hill, a Norwegian industrial developer was building a data center for clients such as Amazon, which would suck up a significant share of locally produced electricity in order to cool vast computer servers.

    This year’s drought has only highlighted the urgent need for a wider energy transformation, Mr. Eikeland said.

    “The drought shows that we are not ready for the big changes,” he said, but also “that we will not accept the high prices.”

    Reporting was contributed by Christopher F. Schuetze from Germany, Constant Méheut from France, Gaia Pianigiani from Italy, Isabella Kwai from London and Henrik Pryser Libell from Norway.

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    China’s Options for Punishing Taiwan Economically are Limited

    In retaliation for Speaker Nancy Pelosi’s visit to Taiwan last week, China conducted large-scale military exercises around the self-governing island democracy and suspended some trade between the sides.

    The exercises led to a few shipping disruptions, but they did not affect traffic at Taiwanese or Chinese ports, analysts say. And the trade bans were notable mainly for what they did not target: Taiwan’s increasingly powerful semiconductor industry, a crucial supplier to Chinese manufacturers.

    The bans that Beijing did impose — on exports of its natural sand to Taiwan, and on imports of all Taiwanese citrus fruits and two types of fish — were hardly an existential threat to the island off its southern coast that it claims as Chinese territory.

    Taiwanese pineapples, wax apples and grouper fish, among other products.

    a self-governing island democracy of 23 million people, as its territory and has long vowed to take it back, by force if necessary. The island, to which Chiang Kai-shek’s Chinese forces retreated after the Communist Revolution of 1949, has never been part of the People’s Republic of China.

    “The political message is greater than the economic hit,” said Chiao Chun, a former trade negotiator for the Taiwanese government.

    Even though about 90 percent of Taiwan’s imported gravel and sand comes from China, most of that is manufactured. China accounted for only about 11 percent of Taiwan’s natural sand imports in the first half of this year, according to the Bureau of Mines.

    The two types of Taiwanese fish exports that China restricted last week — chilled white striped hairtail and frozen horse mackerel — are collectively worth about $22 million, less than half the value of the Taiwanese grouper trade that was banned earlier this year. They are also less dependent on the Chinese market.

    As for Taiwan’s half-a-billion-dollar citrus industry, its shipments to China account for only 1.1 percent of the island’s total agricultural exports, according to Taiwan’s Agriculture Council. A popular theory is that Beijing singled out citrus farmers because most orchards are in southern Taiwan, a stronghold for the governing political party, the Democratic Progressive Party, a longtime target of Beijing’s anger.

    Future bans may become more targeted to punish industries in counties that are D.P.P. strongholds, said Thomas J. Shattuck, an expert on Taiwan at the University of Pennsylvania’s Perry World House. There may also be less retaliation against counties run by the Kuomintang opposition party “in an attempt to put a finger on the scale for Taiwan’s local, and even national, elections,” he added.

    increasingly indispensable node in the global supply chains for smartphones, cars and other keystones of modern life. One producer, the Taiwan Semiconductor Manufacturing Company, makes roughly 90 percent of the world’s most advanced semiconductors, and sells them to both China and the West.

    simulated a blockade of Taiwan.

    Even though some of the exercises took place in the Taiwan Strait, a key artery for international shipping, they did not disrupt access to ports in Taiwan or southern China, said Tan Hua Joo, an analyst at Linerlytica, a company in Singapore that tracks data on the container shipping industry. He added that port congestion would build only if the strait was completely blocked, port access was restricted or port operations were hampered by a labor or equipment shortage.

    “None of these are happening at the moment,” he said.

    Vessels that chose to avoid the Taiwan Strait last week because of the Chinese military’s “chest beating” activities would have faced a 12- to 18-hour delay, an inconvenience that would generally be considered manageable, said Niels Rasmussen, the chief shipping analyst at Bimco, an international shipping association.

    If Beijing were to escalate tensions in the future, it would indicate that it was willing to put at risk China’s own economy as well as its trade and relations with Japan, South Korea, Europe and the United States, Mr. Rasmussen said by phone from his office near Copenhagen.

    “That’s just difficult to accept that they would take that decision,” he added. “But then again, I didn’t expect Russia to invade Ukraine.”

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    Biden Administration’s Bid to Cap Russia Oil Prices Faces Resistance

    WASHINGTON — The Biden administration’s push to form an international buyers’ cartel to cap the price of Russian oil is facing resistance amid private sector concerns that it cannot be reliably enforced, posing a challenge for the U.S.-led effort to drain President Vladimir V. Putin’s war chest and stabilize global energy prices.

    The price cap has been a top priority of Treasury Secretary Janet L. Yellen, who has been trying to head off another spike in global oil costs at the end of the year. The Biden administration fears that the combination of a European Union embargo on Russian oil imports and a ban on the insurance and financing of Russian oil shipments will send prices soaring by taking millions of barrels of that oil off the market.

    But the untested concept has drawn skepticism from energy experts and, in particular, the maritime insurance sector, which facilitates global oil shipments and is key to making the proposal work. Under the plan, it would be legal for them to grant insurance for oil cargo only if it was being sold at or below a certain price.

    Mike Salthouse, global claims director at The North of England P&I Association Limited, a leading global marine insurer. “If you have sophisticated state actors wanting to deceive people, it’s very easy to do.”

    He added: “We’ve said it won’t work. We’ve explained to everybody why.”

    That has not deterred Ms. Yellen and her top aides, who have been crisscrossing the globe to make their case with international counterparts, banks and insurers that an oil price cap can — and must — work at a moment of rapid inflation and the risk of recession.

    “At a time of global anxiety over high prices, a price cap on Russian oil is one of the most powerful tools we have to address inflation by preventing future spikes in energy costs,” Ms. Yellen said in July.

    The Biden administration is trying to mitigate fallout from sanctions adopted by the European Union in June, which would ban imports of Russian oil and the financing and insuring of Russian oil exports by year’s end. Britain was expected to enact a similar ban but has not yet done so.

    not solve the world’s oil supply problems. European officials, who have been skeptical, continue to say they are analyzing its viability.

    restricted natural gas flows to parts of Europe in retaliation for sanctions, would curb oil exports because of their importance to its economy.

    senior fellow at the Atlantic Council who works in the financial services industry, said of Russia’s cooperation with a price cap. “If that were the case, he wouldn’t have invaded Ukraine in the first place.”

    But proponents believe that if the European Union bans insurance transactions, an oil price cap may be the best chance to mitigate the economic fallout.

    John E. Smith, former director of the foreign assets control unit, said the key was ensuring that financial services firms and maritime insurers were not responsible for vetting every oil transaction, as well as providing guidance on complying with the sanctions.

    “The question is will enough jurisdictions agree on the details to move this forward,” said Mr. Smith, who is now co-head of Morrison & Foerster’s national security practice. “If they do, it could be a win for everyone but Russia.”

    Matina Stevis-Gridneff contributed reporting from Brussels.

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    Ukraine Grain Ship Passes Russia’s Black Sea Blockade

    MYKOLAIV, Ukraine — A ship loaded with corn on Monday became the first cargo vessel to sail from Ukraine in more than five months of war, passing through Russia’s naval blockade of Ukraine’s Black Sea ports and raising hopes that desperately needed food will soon reach nations afflicted by shortages and soaring prices.

    The ship’s journey was the culmination of months of negotiations and an international campaign to get grain out of Ukraine, one of the world’s breadbaskets before the war. Russia’s invasion and blockade, along with Western sanctions impeding Russian exports and factors like drought and climate change, have sharply cut global grain supplies, threatening to bring famine to tens of millions of people, particularly in the Middle East and Africa.

    Mediators from the United Nations and Turkey, which shares the Black Sea coast with Russia and Ukraine, oversaw months of talks in Istanbul. Though discussions seemed hopelessly mired for weeks, in late July the parties struck a deal to free more than 20 million tons of grain.

    the causes of a looming global hunger crisis.

    “Ensuring that grain, fertilizers, and other food-related items are available at reasonable prices to developing countries is a humanitarian imperative,” António Guterres, the U.N. secretary general, said Monday. “People on the verge of famine need these agreements to work, in order to survive.”

    major supplier of fertilizer, and with Ukraine it supplies more than a quarter of the world’s wheat.

    But as the Razoni’s Black Sea crossing raised hopes for some degree of cooperation between the combatants, the fighting intensified on multiple fronts in Ukraine.

    a counteroffensive in the southern Kherson region, Ukraine has used long-range precision weapons, recently supplied by the West, to disrupt Russian supply lines and logistics. Ukrainian forces have attacked Russian command and control centers, hit supply routes, tried to isolate Russian forces into pockets and enlisted Ukrainian saboteurs behind enemy lines.

    adept at attacking Russian command and control hubs and destroying large amounts of Russian equipment. On Monday, the Biden administration announced another round of support for Ukraine: $550 million in military aid, including more ammunition for 155-millimeter howitzer artillery pieces and High Mobility Artillery Rocket Systems, or HIMARS, that the United States has already provided.

    But for all its sluggish or faltering progress in the war, Russia retains vast advantages in the size of its arsenal, and its military has shown a willingness and ability to strike all over the country, even as it focuses on gaining ground in eastern Ukraine. There, Russia has blanketed town after town with overwhelming artillery fire as it tries to reposition ground forces to press forward.

    The strategy slowly gave Russia control of the eastern Luhansk Province, leaving many cities and villages in ruins. Russian forces have since moved to reinforce the south and to push into another eastern province, Donetsk.

    “Their tactic remains much the same as it was during the hostilities in Luhansk region,” Serhiy Haidai, head of Ukraine’s Luhansk regional government, said on Monday.

    He said the Russians were making daily attempts to mount an offensive on the city of Bakhmut, in Donetsk, but so far had failed to break through the main Ukrainian defensive lines.

    Russian forces have also continued to shell residential and military areas in and around the city of Kharkiv in the northeast, putting pressure on Ukraine not to shift too many of its defenses from there.

    In Chuhuiv, in the Kharkiv region and just 10 miles from Russian lines, residents were still recovering on Monday from missile strikes last week on the House of Culture, a building used since Soviet times for cultural events. In wartime, the building’s kitchens were used to prepare food for the needy, but members of the city government had also used it as a temporary office, possibly a reason for the attack.

    The missiles killed three people sheltering in the basement and wounded several more, according to Oleh Synyehubov, the Kharkiv regional administrator. A volunteer cook was among the dead, residents said. His brother and several other people survived.

    Two women were also killed, one of whom had been helping the cook, said a resident who gave only his first name, Maksim, wary of possible retribution. They were making an Uzbek rice dish, plov, for people in the neighborhood.

    “She was just cleaning vegetables,” Maksim said.

    Chuhuiv has come under increasing bombardment in recent days, as have the city of Kharkiv and other villages and towns in the province. Soldiers guarding the approaches to the city on Sunday said that artillery strikes had been steady much of the day, hitting an industrial area around the train station.

    The Russians “are hitting lots of places like this, all the schools as well,” said Maksim. “They are doing it to make the people leave.”

    People were getting the message, and the town was largely empty, he said. He was preparing to leave too, he said. He and his family had plans to emigrate to Canada.

    “There is nothing left here,” he said.

    Michael Schwirtz reported from Mykolaiv, Ukraine, Matina Stevis-Gridneff from Brussels and Matthew Mpoke Bigg from London. Reporting was contributed by Carlotta Gall and Kamila Hrabchuk from Chuhuiv, Ukraine, Marc Santora from London and Alan Yuhas from New York.

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    Economy Is at Risk of Recession by a Force Hiding in Plain Sight

    This past week brought home the magnitude of the overlapping crises assailing the global economy, intensifying fears of recession, job losses, hunger and a plunge on stock markets.

    At the root of this torment is a force so elemental that it has almost ceased to warrant mention — the pandemic. That force is far from spent, confronting policymakers with grave uncertainty. Their policy tools are better suited for more typical downturns, not a rare combination of diminishing economic growth and soaring prices.

    Major economies including the United States and France reported their latest data on inflation, revealing that prices on a vast range of goods rose faster in June than anytime in four decades.

    China reported that its economy, the world’s second-largest, expanded by a mere 0.4 percent from April through June compared with the same period last year. That performance — astonishingly anemic by the standards of recent decades — endangered prospects for scores of countries that trade heavily with China, including the United States. It reinforced the realization that the global economy has lost a vital engine.

    The specter of slowing economic growth combined with rising prices has even revived a dreaded word that was a regular part of the vernacular in the 1970s, the last time the world suffered similar problems: stagflation.

    Most of the challenges tearing at the global economy were set in motion by the world’s reaction to the spread of Covid-19 and its attendant economic shock, even as they have been worsened by the latest upheaval — Russia’s disastrous attack on Ukraine, which has diminished the supply of food, fertilizer and energy.

    “The pandemic itself disrupted not only the production and transportation of goods, which was the original front of inflation, but also how and where we work, how and where we educate our children, global migration patterns,” said Julia Coronado, an economist at the University of Texas at Austin, speaking this past week during a discussion convened by the Brookings Institution in Washington. “Pretty much everything in our lives has been disrupted by the pandemic, and then we layer on to that a war in Ukraine.”

    Great Supply Chain Disruption.

    meat production to shipping exploited their market dominance to rack up record profits.

    The pandemic prompted governments from the United States to Europe to unleash trillions of dollars in emergency spending to limit joblessness and bankruptcy. Many economists now argue that they did too much, stimulating spending power to the point of stoking inflation, while the Federal Reserve waited too long to raise interest rates.

    Now playing catch-up, central banks like the Fed have moved assertively, lifting rates at a rapid clip to try to snuff out inflation, even while fueling worries that they could set off a recession.

    Given the mishmash of conflicting indicators found in the American economy, the severity of any slowdown is difficult to predict. The unemployment rate — 3.6 percent in June — is at its lowest point in almost half a century.

    American consumers have enhanced fears of a downturn. This past week, the International Monetary Fund cited weaker consumer spending in slashing expectations for economic growth this year in the United States, from 2.9 percent to 2.3 percent. Avoiding recession will be “increasingly challenging,” the fund warned.

    Orwellian lockdowns that have constrained business and life in general. The government expresses resolve in maintaining lockdowns, now affecting 247 million people in 31 cities that collectively produce $4.3 trillion in annual economic activity, according to a recent estimate from Nomura, the Japanese securities firm.

    But the endurance of Beijing’s stance — its willingness to continue riding out the economic damage and public anger — constitutes one of the more consequential variables in a world brimming with uncertainty.

    sanctions have restricted sales of Russia’s enormous stocks of oil and natural gas in an effort to pressure the country’s strongman leader, Vladimir V. Putin, to relent. The resulting hit to the global supply has sent energy prices soaring.

    The price of a barrel of Brent crude oil rose by nearly a third in the first three months after the invasion, though recent weeks have seen a reversal on the assumption that weaker economic growth will translate into less demand.

    major pipeline carrying gas from Russia to Germany cut the supply sharply last month, that heightened fears that Berlin could soon ration energy consumption. That would have a chilling effect on German industry just as it contends with supply chain problems and the loss of exports to China.

    euro, which has surrendered more than 10 percent of its value against the dollar this year. That has increased the cost of Europe’s imports, another driver of inflation.

    ports from the United States to Europe to China.

    “Everyone following the economic situation right now, including central banks, we do not have a clear answer on how to deal with this situation,” said Kjersti Haugland, chief economist at DNB Markets, an investment bank in Norway. “You have a lot of things going on at the same time.”

    The most profound danger is bearing down on poor and middle-income countries, especially those grappling with large debt burdens, like Pakistan, Ghana and El Salvador.

    As central banks have tightened credit in wealthy nations, they have spurred investors to abandon developing countries, where risks are greater, instead taking refuge in rock-solid assets like U.S. and German government bonds, now paying slightly higher rates of interest.

    This exodus of cash has increased borrowing costs for countries from sub-Saharan Africa to South Asia. Their governments face pressure to cut spending as they send debt payments to creditors in New York, London and Beijing — even as poverty increases.

    U.N. World Food Program declared this month.

    Among the biggest variables that will determine what comes next is the one that started all the trouble — the pandemic.

    The return of colder weather in northern countries could bring another wave of contagion, especially given the lopsided distribution of Covid vaccines, which has left much of humanity vulnerable, risking the emergence of new variants.

    So long as Covid-19 remains a threat, it will discourage some people from working in offices and dining in nearby restaurants. It will dissuade some from getting on airplanes, sleeping in hotel rooms, or sitting in theaters.

    Since the world was first seized by the public health catastrophe more than two years ago, it has been a truism that the ultimate threat to the economy is the pandemic itself. Even as policymakers now focus on inflation, malnutrition, recession and a war with no end in sight, that observation retains currency.

    “We are still struggling with the pandemic,” said Ms. Haugland, the DNB Markets economist. “We cannot afford to just look away from that being a risk factor.”

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