Mar 20, 2019

Mozambique's flooding could be "very damaging" to the market

Mozambique flooding. Photo: Adrien Barbier/AFP/Getty Images

Mozambique has declared a state of emergency after flooding that followed Cyclone Idai.

Backdrop: The storm has destroyed an estimated "90%" of Mozambique's fourth-largest city, Beira, which has a population of nearly half a million. So far 1.5 million people have been displaced or otherwise affected by the storm.

  • "African economists fear the scale of devastation will be 'very damaging.' Mozambique is already in default on about $2 billion of external commercial debt," Bloomberg's TicToc reports. The country is currently trying to restructure the debt.

Why it matters to the market: The $2 billion default is the result of the almost-too-surreal-to-believe tuna bonds scandal, in which the country's finance minister and supposedly rogue agents from Credit Suisse fleeced Mozambique for at least $200 million in kickbacks and ill-gotten gains, and possibly more than $1 billion.

Where it stands: So far at least a dozen people have been charged by Mozambique for crimes like abuse of office, embezzlement and money laundering. The U.S. is seeking to extradite a number of the main parties involved, including Mozambique's former finance minister and representatives from Abu Dhabi-based Privinvest and Credit Suisse.

Go deeper: Why Mozambique's debt scandal has drawn U.S. scrutiny

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The Americans who can't hide from coronavirus

Illustration: Eniola Odetunde/Axios

The stock markets are in bad shape, but for the millions of Americans who aren’t invested in stocks, coronavirus is presenting a far more imminent concern.

Why it matters: Quarantines usually work with at least 90% participation, but many Americans lack the flexibility to work remotely, take a sick day or absorb having schools close.

Wall Street notches worst week for stocks since 2008

Traders work on the floor of the New York Stock Exchange. Photo: Scott Heins/Getty Images

Stocks closed down about 1% on Friday, ending the worst week for Wall Street since the financial crisis.

Why it matters: The stretch of declines came after a spike in coronavirus cases around the world earlier this week. The steep losses prompted questions about the fate of the record-long economic expansion, as well as a rare statement from the Federal Reserve.

Go deeper: The growing coronavirus recession threat