Asia Becomes Epicenter of Market Fears Over Slowdown in Growth

Asia is emerging as the epicenter for investor worries over global growth and the spread of coronavirus variants. While their peers in the U.S. and Europe remain near record highs, Asian stocks have fallen back in recent months amid slowing Chinese economic growth and a glacial rollout of vaccines. The trend accelerated Friday with the benchmark MSCI Asia Pacific Index briefly erasing year-to-date gains for the second time in as many months.

“Asia was seen as the poster child in pandemic response last year, but this year the slow vaccination rollout in most countries combined with the arrival of the delta variant means another lost year,” said Mark Matthews, head of Asia research with Bank Julius Baer & Co. in Singapore. “I suspect Asia will continue to lag as long as vaccination rollouts remain at their relatively sluggish levels and high daily new Covid counts prevent them from lifting mobility restrictions.”

The growing jitters in the region comes as investor concerns shift from runaway inflation to an early withdrawal of stimulus by central banks. China’s authorities signaled earlier this week they may soon unleash more support for the economy, suggesting the world’s fastest-pandemic recovery may be weaker than it appears.

A fresh regulatory crackdown on Chinese tech stocks this week has also impacted investor sentiment in the region. The Hang Seng China Enterprises Index fell briefly into a technical bear market Friday, led by weakness in the sector.

While Asia bore the brunt of the retreat in global equities, havens in other asset classes from Treasuries to the yen have rallied, and the rotation toward economically-sensitive cyclical stocks from their high-priced growth counterparts continued to unwind.

“It’s a sign of how challenging the reopening process is,” Marvin Loh, State Street senior global market strategist, said in an interview with Bloomberg TV. “What the PBOC is going through as well as these variants that keep popping up around the world shows it’s going to be an uneven process. Maybe a normalization tightening policy is not necessarily going to be as fluid.”

Covid Challenge

Covid 19 remains a key challenge. In Japan, Tokyo has declared a renewed state of emergency to combat the resurgent virus, banning spectators from the Olympics and pushing the Nikkei 225 Stock Average toward a correction. South Korea is intensifying social distancing measures in Seoul while Indonesia is battling a virus resurgence that has crippled its health system.

“Asian equities are being particularly impacted by the rebound in coronavirus cases in the region, fears about the impact of that on regional growth and concern that we may now have seen the best of the rebound globally,” said Shane Oliver, head of investment strategy with AMP Capital Investors in Sydney. “Asian shares may have led the way on this but coronavirus concerns may also weigh on global shares generally.”

For the APAC region, recent trade deals will likely invigorate and deepen economic integration over the coming few years. In late 2020, China, Japan, South Korea, Australia, New Zealand and 10 Association of Southeast Asian Nations (ASEAN) members signed the Regional Comprehensive Economic Partnership (RCEP) agreement after eight years of negotiation.

When fully implemented in 2022, RCEP will represent the world’s biggest trading bloc, covering about 30% of global GDP and trade. In addition, China concluded a Comprehensive Agreement on Investment (CAI) with the EU on the last day of 2020. The EU is China’s second-largest trading partner and the CAI will cover broad market access, including to key sectors such as alternative energy vehicles and medical services.

Although these trade deals will not have an immediate economic impact, in the medium term the treaties should cement Asia as the world’s most dynamic economic bloc embracing free trade, investment and globalization. They should also help to counter the disruptive geopolitical tensions and encourage the post-pandemic economic recovery in Asia.

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Critics:
The economy of Asia comprises more than 4.5 billion people (60% of the world population) living in 49 different nations. Asia is the fastest growing economic region, as well as the largest continental economy by both GDP Nominal and PPP in the world. Moreover, Asia is the site of some of the world’s longest modern economic booms, starting from the Japanese economic miracle (1950–1990), Miracle on the Han River (1961–1996) in South Korea, economic boom (1978–2013) in China, Tiger Cub Economies (1990–present) in Indonesia, Malaysia, Thailand, Philippines, and Vietnam, and economic boom in India (1991–present).
 
As in all world regions, the wealth of Asia differs widely between, and within, states. This is due to its vast size, meaning a huge range of different cultures, environments, historical ties and government systems. The largest economies in Asia in terms of PPP gross domestic product (GDP) are China, India, Japan, Indonesia, Turkey, South Korea, Saudi Arabia, Iran, Thailand and Taiwan and in terms of nominal gross domestic product (GDP) are China, Japan, India, South Korea, Indonesia, Saudi Arabia, Turkey, Taiwan, Thailand and Iran.
 
East Asian and ASEAN countries generally rely on manufacturing and trade (and then gradually upgrade to industry and commerce), and incrementally building on high-tech industry and financial industry for growth, countries in the Middle East depend more on engineering to overcome climate difficulties for economic growth and the production of commodities, principally Sweet crude oil.
 
Over the years, with rapid economic growth and large trade surplus with the rest of the world, Asia has accumulated over US$8.5 trillion of foreign exchange reserves – more than half of the world’s total, and adding tertiary and quaterny sectors to expand in the share of Asia‘s economy.

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Here’s Why A Standoff Between Oil Producers Is Fueling Surging Gas Prices

Oil Prices Hit Historic High On Weak Dollar

As oil prices spike to a nearly three-year high, a bitter disagreement between international oil producers has shattered hopes for a deal to increase oil production this year—thereby threatening to further hike up rising oil and gas prices as a broad economic reopening looks to ramp up travel demand.

Key Facts

Following two days of fraught discussions last week, the group of oil producers known as OPEC+ called off an afternoon meeting Monday and set no date to meet again, effectively suspending a planned agreement to raise output by 2 million barrels per day from August to December

Two unnamed sources told Reuters the failed negotiations mean the expected production hikes this year will no longer occur.

The price of U.S. oil benchmark West Texas Intermediate—at about $75.31 a barrel—jumped 1.3% Monday after the news and has climbed 5% over the past week’s disagreement, while the price of the United Kingdom’s Brent Crude ticked up 1.1% and 4%, respectively.

The United Arab Emirates, which has invested heavily in its oil production capacity, refused to move forward with the deal because it would also extend oil production cuts through late 2022.

Though the UAE wants to raise its output unconditionally, Saudi Arabian oil producers, who supported the agreement, argued the extended output cuts are necessary to prevent excess oil supply that could tank prices.

The production increase was meant to help curb rising oil prices and buy producers time while they assess the risk of rapidly spreading variants in countries like India once again hurting demand and shuttering economies.

Big Number

60%. That’s how much the price of WTI oil has surged this year alone, while the price of Brent Crude has climbed about 50%.

Tangent

Oil prices crashed last year but recouped all their pandemic losses by March, and they’ve surged roughly 20% higher since. After cutting production by about 10 million barrels per day last year, oil producers are still supplying about 5.8 million fewer barrels per day than before the pandemic. Most recently, OPEC+ in early June agreed to increase oil output by 450,000 barrels per day starting this month.

Key Background

Despite the easing of lockdowns and an accelerating vaccine rollout, producers have been careful to ramp up supply after excess inventories drove prices down to negative territory for the first time in history last spring. That happened after an all-out price war erupted between oil-producing giants Russia and Saudi Arabia in March 2020—just as travel demand began to plummet during the coronavirus outbreak.

Costly-to-maintain storage tanks soon filled up with no buyers, and the price of one American oil futures contract plunged below zero in April 2020. OPEC and its allies agreed to cut production in order to stabilize prices amid the turmoil, but according to the International Energy Agency, those inventories are still being worked off to this day.

Further Reading

OPEC+ resumes oil policy talks amid Saudi-UAE standoff (Reuters)

Oil Producers Agree To Boost Production By 450,000 Barrels Per Day As Travel Picks Up (Forbes)

OPEC Plus Agrees To Ramp Up Production By 500,000 Barrels Per Day Starting January, Ending Bitter Standoff In Bid To Save Oil Prices (Forbes)

Follow me on Twitter. Send me a secure tip.

I’m a reporter at Forbes focusing on markets and finance. I graduated from the University of North Carolina at Chapel Hill, where I double-majored in business journalism and economics while working for UNC’s Kenan-Flagler Business School as a marketing and communications assistant. Before Forbes, I spent a summer reporting on the L.A. private sector for Los Angeles Business Journal and wrote about publicly traded North Carolina companies for NC Business News Wire. Reach out at jponciano@forbes.com. And follow me on Twitter @Jon_Ponciano

Source: Here’s Why A Standoff Between Oil Producers Is Fueling Surging Gas Prices

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References

Five Things You Need to Know to Start Your Day

Delta fears are growing, central banks face challenges and the shape of the U.K. and Europe post-Brexit continues to form. Here’s what’s moving markets.

Delta Fears

Concern about the more contagious Delta coronavirus variant is growing and those fears helped fuel a rise in Moderna shares to a record high after the drugmaker said its vaccine produces protective antibodies against the strain. The medicine was approved for restricted emergency use in India, where little more than 4% of the population is so far fully vaccinated. The variant is rippling through emerging markets, with more curbs in Indonesia and warnings of a potentially “catastrophic” wave in Kenya. A widening gap in vaccination rates in the U.S. also shows the risks faces to certain regions.

Policy Challenges

The major challenge for central banks is going to be how to wean the global economy off the unprecedented support they have deployed to deal with the disruption Covid-19 has caused. U.S. and European confidence data is soaring, underlining the rebound the economy is experiencing, while China’s central bank has also struck a more positive tone. Some more data points will arrive for policymakers to mull over on Wednesday, led by U.K. GDP and European inflation numbers.

Brexit Shifts

Paris is JPMorgan’s new trading center in the European Union post-Brexit as the U.S. banking giant inaugurated a new headquarters in the French capital. It is a victory for France in the ongoing race with other European countries to lure business from London after the referendum to leave the EU. It comes as the U.K. government unveiled a system of overseeing subsidies to companies, promising “more agile” decisions. And the U.K. is expecting to reach a truce in the so-called “sausage wars’’ with the EU over post-Brexit trading rules in Northern Ireland.

OPEC+ Delay

OPEC and its allies have delayed preliminary talks for a day to create more time to find a compromise on oil-output increases. It comes with crude oil prices on track for the best half of a year since 2009. Surging commodity prices are creating all sorts of headaches for policy makers, from rising inflation expectations that could move the hand of central bankers to a higher cost in shifting to more sustainable energy sources. This has initially led to a surge in profit for commodity trading houses but will end up hitting consumers down the road through higher prices.

Asian stocks mostly rose following a record close in the U.S. on signs that vaccines can protect against the delta variant of the coronavirus. European and U.S. stock futures are steady. The earnings calendar is relatively thin but watch for the reaction to two long-running takeover sagas moving toward a conclusion.

EssilorLuxottica, the eyewear giant, decided to go ahead with the acquisition of smaller peer GrandVision and the board of France’s Suez has backed its takeover by rival Veolia. And the Organization for Economic Cooperation and Development meets in Paris to finalize plans to overhaul the global minimum corporate tax.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours. 

And finally, here’s what Cormac Mullen is interested in this morning

With just one more day of trading in the first half of 2021 to go, global stocks are on track for their second-best performance since 1998. If the MSCI AC World Index’s gain of about 12% through June 29 holds, it would be beaten only by a 15% rise in 2019. The global stock benchmark closed at a record on June 28, and has risen almost 90% since its pandemic low in March 2020.

As we begin the second half, investor focus will soon switch to the upcoming earnings season. The second quarter could well mark peak earnings growth so comments on the outlook will be key for stock performance as will the impact of rising costs on margins. Outside of that, the same themes that dominated the first half will monopolize the second, and whether we get an equally strong next six months will likely depend on the path of other asset classes most notably bonds.

By: and

Source: Stock Markets Today: Delta Variant, Central Banks, Brexit Changes, OPEC+ – Bloomberg

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Critics:

A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and many recessions coincided with these panics. Other situations that are often called financial crises include stock market crashes and the bursting of other financial bubbles, currency crises, and sovereign defaults. Financial crises directly result in a loss of paper wealth but do not necessarily result in significant changes in the real economy (e.g. the crisis resulting from the famous tulip mania bubble in the 17th century).

Many economists have offered theories about how financial crises develop and how they could be prevented. There is no consensus, however, and financial crises continue to occur from time to time. Negative GDP growth lasting two or more quarters is called a recession. An especially prolonged or severe recession may be called a depression, while a long period of slow but not necessarily negative growth is sometimes called economic stagnation.

Some economists argue that many recessions have been caused in large part by financial crises. One important example is the Great Depression, which was preceded in many countries by bank runs and stock market crashes. The subprime mortgage crisis and the bursting of other real estate bubbles around the world also led to recession in the U.S. and a number of other countries in late 2008 and 2009.

Some economists argue that financial crises are caused by recessions instead of the other way around, and that even where a financial crisis is the initial shock that sets off a recession, other factors may be more important in prolonging the recession. In particular, Milton Friedman and Anna Schwartz argued that the initial economic decline associated with the crash of 1929 and the bank panics of the 1930s would not have turned into a prolonged depression if it had not been reinforced by monetary policy mistakes on the part of the Federal Reserve,a position supported by Ben Bernanke.

See also

Specific:

 

 

A Critical Piece Of The Machine Economy: The People

Over the shoulder view of young Asian businesswoman using AI assistant on smartphone

70% of GDP growth in the global economy between now and 2030 will be driven by the machines, according to PwC. This is a near $7 trillion dollar contribution to U.S. GDP based around the combined production from artificial intelligence, machine learning, robotics, and embedded devices. This is the rise of a new machine economy.

For those not familiar with the machine economy, it’s where the smart, connected, autonomous, and economically independent machines or devices carry out the necessary activities of production, distribution, and operations with little or no human intervention. The development of this economy is how Industry 4.0 becomes a reality.

Visionary leaders will implement new technologies and combine them with capital investments in ways that help them grow, expand, diversify, and actually improve lives. These machine economy leaders will operate in a new intelligent systems world in thousands of companies that will drive new economic models globally.

Sounds good so far, but all of that autonomous machinery isn’t going to build and operate itself.

Not enough people to do the work

While most people would agree that manufacturing is an important part of our economy, they aren’t recommending their children pursue that line of work. It’s expected that 4.6 million manufacturing jobs created between now and 2028 will go unfilled. Key drivers for this change include the fact that 10,000 baby boomers retire every day without people to replace them.

The workforce is quickly losing the second-largest age group, and millennials (the largest group) have so far not been attracted to manufacturing jobs at large. Instead they tend to be drawn toward technology, engineering, finance. The underlying issue may be one of perception, as the future of manufacturing will in fact include a much higher degree of technology, engineering, and finance in order to function.

Different skills are needed

Manufacturing jobs are changing. The number of purely manual, repetitive tasks are shrinking as technology advances to handle those jobs with robots and automation. Fifty percent of manufacturers have already adopted some form of automation, and now they need people with critical thinking, programming, and digital skills. Tomorrow’s jobs have titles such as Digital Twin Engineer, Robot Teaming Coordinator, Drone Data Coordinator, Smart Scheduler, Factory Manager, Safety Supervisor, and so on.

The shifts in productivity are happening so quickly, humans can’t keep up with them

An unskilled position can be filled relatively quickly as the prerequisite qualifications are limited. It typically takes months to fill a skilled position, and in most cases much longer for an individual to develop the requisite skills before they even think to apply. One alternative is to lower requirements in terms of education, skill, and experience in order to get someone new in the position, but then companies have to absorb the entire expense of training them.

Meanwhile there is increased pressure to utilize existing people’s and teams’ times and skills as much as possible, which can lead to burnout. This is a tenuous cycle that needs to be fortified by making sure our workforce has the skills training they need, when and where they need it.

In order to thrive in the machine economy, we need to invest significantly in people as well as in infrastructure. Focusing purely on infrastructure might lead to short-term and maybe mid-term profits, but ultimately it is not sustainable, and everyone loses. One can’t simply say, “We couldn’t fill the positions,” while there are people who need work.

Level-up our workforce

The human capacity to learn is basically limitless when individuals are motivated and have access to something to learn. There are several ways to tap into that capacity. First, we need to capture the knowledge and experience of the employees we have, so that those relevant skills can be passed on to the next wave of workers. We also need to ensure relevant training is available for people at every level of the company so that new people get up to speed and tenured employees don’t get left behind.

While some technologies need to be learned on the job, there is a level of foundational skill to understand in the machine economy, in addition to the technical and vocational skills required within a given field. An investment in, and possibly partnerships with, local schools could be a wise move for many companies. Lastly, while college is a great path for many people, it’s not the only form of higher education. Investments in vocational training and apprenticeship programs will be critical for our society to thrive in the machine economy.

Just as workers need to rethink and develop new skills, employers need to rethink and develop new ways of nurturing and attracting talent. To fully realize the promise of the machine economy, it is incumbent upon us to ensure people have access to the training and the tools they need in order to not only be successful but thrive. After all, what’s the point of all this technology if it doesn’t make life better for everyone?

PRESIDENT AND CEO

With more than 25 years of experience driving digital innovation and growth at technology companies, Kevin Dallas is responsible for all aspects of the Wind River business globally. He joined Wind River from Microsoft, where he most recently served as the corporate vice president for cloud and AI business development. At Microsoft, he led a team creating partnerships that enable the digital transformation of customers and partners across a range of industries including: connected/autonomous vehicles, industrial IoT, discrete manufacturing, retail, financial services, media and entertainment, and healthcare.

Prior to joining Microsoft in 1996, he held roles at NVIDIA Corporation and National Semiconductor (now Texas Instruments Inc.) in the U.S., Europe, and the Middle East in roles that included microprocessor design, systems engineering, product management, and end-to-end business leadership. He currently serves as a director on the board of Align Technology, Inc. He holds a B.S.c. degree in electrical and electronic engineering from Staffordshire University, Stoke-on-Trent, Staffordshire, England.

Source: A Critical Piece Of The Machine Economy: The People

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Critics:

Digital economy refers to an economy that is based on digital computing technologies, although we increasingly perceive this as conducting business through markets based on the internet and the World Wide Web. The digital economy is also referred to as the Internet Economy, New Economy, or Web Economy.

Increasingly, the digital economy is intertwined with the traditional economy, making a clear delineation harder. It results from billions of everyday online connections among people, businesses, devices, data, and processes. It is based on the interconnectedness of people, organizations, and machines that results from the Internet, mobile technology and the internet of things (IoT).

Digital economy is underpinned by the spread of Information and Communication Technologies (ICT) across all business sectors to enhance its productivity.Digital transformation of the economy is undermining conventional notions about how businesses are structured, how consumers obtain services, informations and goods and how states need to adapt to these new regulatory challenges.

Intensification of the global competition for human resources

Digital platforms rely on ‘deep learning‘ to scale up their algorithm’s capacity. The human-powered content labeling industry is constantly growing as companies seek to harness data for AI training. These practices have raised concerns concerning the low-income revenue and health-related issues of these independent workers. For instance, digital companies such as Facebook or YouTube use ‘content monitor’-contractors who work as outside monitors hired by a professional services company subcontractor- to monitor social media to remove any inappropriate content.

Thus, the job consists of watching and listening to disturbing posts that can be violent or sexual. In January 2020, through its subcontractor services society, Facebook and YouTube have asked the ‘content moderators’ to sign a PTSD (Posttraumatic Stress Disorder) disclosure after alleged cases of mental disorders witnessed on workers.

See also

References

China’s GDP Surge Is Chance To Reboot Country’s Image On World Stage

China’s economy had a great 12 months, leading the globe out of the Covid-19 era. Yet the last year has damaged something equally important: Beijing’s soft power.

Beijing’s handling of questions about what happened in Wuhan—and why officials were so slow to warn the world about a coming pandemic—boggles the mind. If China’s handling of the initial outbreak was indeed the “decisive victory” that it claims, why overreact to Australia’s call for a probe?

Harvard Kennedy School students might one day take classes recounting how China’s leaders squandered the Donald Trump era. As the U.S. president was undermining alliances, upending supply chains, losing allies, and playing down the pandemic, Beijing had a once-in-a-lifetime opportunity to increase the country’s influence at Washington’s expense.

And now, many in Beijing appear to understand the extent to which they blew it. Earlier this month, Xi Jinping urged the Communist Party to cultivate a “trustworthy, lovable and respectable” image globally. It’s the clearest indication yet that the “wolf warrior” ethos espoused in recent times by Chinese diplomats was too Trump-like for comfort—and backfiring.

The remedy here is obvious: being the reliable economic engine leaders from the East to West desire.

The Trump administration’s policies had a vaguely developing-nation thrust—favoring a weaker currency, banning companies, tariffs of the kind that might’ve worked in 1985, assaulting government institutions. They shook faith in America’s ability to anchor global finance. The last four years saw a bull market in chatter about replacing the dollar as reserve currency and the centrality of U.S. Treasury debt.

China is enjoying a burst of good press for its gross domestic product trends. Not just for the pace of GDP, but the way Xi’s team appears to be seeking a more balanced and sustainable mix of growth sources. Though some pundits were disappointed by news that industrial production rose just 6.6% in May on a two-year average basis, it essentially gets Asia’s biggest back to where it was pre-Covid-19.

China is getting there, slowly but surely. Far from disappointing, though, data suggest Xi’s party learned valuable lessons from the myriad boom/bust cycles that put China in global headlines since 2008. That was the year the “Lehman shock” devastated world markets and threatened to interrupt China’s meteoric rise.

Instead, Beijing bent economic reality to its benefit. Yet the untold trillions of dollars of stimulus that then-President Hu Jintao’s team threw at the economy caused as many long-term headaches as short-term gains. It financed an unproductive infrastructure boom—one prioritizing the quantity of growth over quality—that fueled bubbles. It generated a moral-hazard dynamic that encouraged greater risk and leverage.

Unfortunately, Xi’s government doubled down on the approach in 2015, when Shanghai stocks went into freefall. The impulse then, as in the 2008-2009 period, was to throw even more cash at the problem—treating the symptoms, not the underlying ailments.

The ways in which Team Xi restored calm—bailouts, loosening leverage and reserve requirement protocols, halting initial public offerings and suspending trading in thousands of companies—did little to build a more nimble and transparent system. The message to punters was, no worries, the Communist Party and People’s Bank of China have your backs. Always.

Yet things appear to be changing. In 2020, while the U.S., Europe and Japan went wild with new stimulus schemes, Beijing took a targeted and minimalist approach. Japan alone threw $2.2 trillion, 40% of GDP, at its cratering economy. The Federal Reserve went on an asset-buying tear.

The PBOC, by sharp contrast, resisted the urge to go the quantitative easing route. That is helping Xi in his quest to deleverage the economy. It’s a very difficult balancing act, of course. The will-they-or-won’t-they-default drama unfolding at China Huarong Asset Management demonstrates the risks of hitting the stimulus brakes too hard.

The good news is that so far China seems to be pursuing a stable and lasting 2021 recovery, not the overwhelming force of previous efforts. And that’s just what the world needs. A 6% growth rate year after year will win China more soft-power points than the GDP extremes. So will China accelerating its transition from exports to an innovation-and-services-based power.

It’s grand that President Joe Biden rapidly raised America’s vaccination game. That means the two biggest economies are recovering simultaneously, reinforcing each other.

China’s revival could have an even bigger impact. Look at how China’s growth in recent months is lifting so many boats in Asia. In May alone, Japan enjoyed a 23.6% surge in shipments to China. Mainland demand for everything from motor vehicles to semiconductor machinery to paper products is helping Japan recover from its worst downturn in decades. South Korea, too.

The best thing Xi can do to boost China’s soft power is to lean into this recovery, and provide the stability that the rest of the globe needs. Xi should let China’s GDP power do the talking for him.

I am a Tokyo-based journalist, former columnist for Barron’s and Bloomberg and author of “Japanization: What the World Can Learn from Japan’s Lost Decades.” My journalism awards include the 2010 Society of American Business Editors and Writers prize for commentary.

Source: China’s GDP Surge Is Chance To Reboot Country’s Image On World Stage

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Critics:

The economy of China is a developing market-oriented economy that incorporates economic planning through industrial policies and strategic five-year plans. Dominated by state-owned enterprises (SOEs) and mixed-ownership enterprises, the economy also consists of a large domestic private sector and openness to foreign businesses in a system described as a socialist market economy.

State-owned enterprises accounted for over 60% of China’s market capitalization in 2019 and generated 40% of China’s GDP of US$15.66 trillion in 2020, with domestic and foreign private businesses and investment accounting for the remaining 60%. As of the end of 2019, the total assets of all China’s SOEs, including those operating in the financial sector, reached US$78.08 trillion. Ninety-one (91) of these SOEs belong to the 2020 Fortune Global 500 companies.

China has the world’s second largest economy when measured by nominal GDP, and the world’s largest economy since 2014 when measured by Purchasing Power Parity (PPP), which is claimed by some to be a more accurate measure of an economy’s true size.It has been the second largest by nominal GDP since 2010, which rely on fluctuating market exchange rates.An official forecast states that China will become the world’s largest economy in nominal GDP by 2028.Historically, China was one of the world’s foremost economic powers for most of the two millennia from the 1st until the 19th century.

The Chinese economy has been characterized as being dominated by few, larger entities including Ant Group and Tencent. In recent years there has been attempts by the Xi Jinping Administration to enforce economic competition rules, and probes into Alibaba and Tencent have been launched by Chinese economic regulators.

The crackdown on monopolies by tech giants and internet companies follows with recent calls by the Politburo against monopolistic practices by commercial retail giants like Alibaba. Comparisons have been made with similar probes into Amazon in the United States.

See also

Why You Might Feel The Urge To Overspend As The Pandemic Winds Down

I had a budget on the day I looked up when my favorite outdoor venue would again open for concerts.Yes, I had a financial plan in place when I saw the words “Tame Impala rescheduled” and felt a memory flash of standing in a crowd listening to that same band, on that same stage.

Yes, though I have a financial accountability coach, I lost consciousness and came to 90 seconds later with a two-Tame-Impala-ticket-sized hole in my budget. Yes, I am concerned.

After this year of no — no festivals, no plays, no shopping in stores without concern for a deadly virus — “no you can’t” is slowly transforming, with 60 percent of adults in the US now having at least one dose of the vaccine, to “yes you can.” Many of us, regardless of disposable income levels, will and will and will, budgets be damned, if we don’t prepare for the powerful emotions about to swoop through our experience-deprived brains.

Our minds, it turns out, are not spreadsheets. That’s the idea behind behavioral economics, the fairly new field that studies how humans operate around this invention we call money. Unlike previous thinking from the field of economics, our decisions don’t come from formulas, but a mishmash of the feelings, reactions, and mental shortcuts whittled by evolution to keep us alive in the wild, within small tribes, without consideration for targeted Instagram ads for peep-toe espadrilles.

Behavioral economics has identified more than 100 ways people of all financial backgrounds fail to think straight when it comes to money. And as the pandemic shifts in the US, our thinking is about to get much blurrier. Our minds, it turns out, are not spreadsheets

One reigning factor that stands out as a determinant of how we behave is where we fall on the spectrum of cold state to hot state. Ever been hangry? That’s a hot state. Seen a thirst trap? Hot state. It’s when emotions like fear or exhaustion take over.

“What has been building up for a year and what is about to be released is an enormous amount of pressure,” said Brooke Struck, research director at the Decision Lab, a behavioral design think tank. “We are all about to enter a massive hot state, more or less at the same time.”

Hot states aren’t necessarily a bad thing. They can be, as Struck describes them, some of the richest experiences we have. They’re intense and powerful, and they exacerbate other biases. They reduce us to something less like adults and more like toddlers.

“If you think you can talk yourself out of a hot state,” said Struck, “you don’t understand a hot state.”

In Daniel Kahneman’s Thinking, Fast and Slow, he describes our cold, higher thinking as slow thinking, and the hot thinking I did (or didn’t do) before buying those tickets as fast thinking. They’re not discrete, explains Struck, but a wrestling match inside our brains.

“That’s where humanity lives. We’re all struggling with these two things at the same time, all the time,” he said. “So when you see those tickets, what comes to mind is this extremely vivid, positive memory of having been in that place and having that experience … you just have this overwhelming desire of I want.”

The tsunami of want that’s about to crash over us as the country reopens is going to be, as Struck says, very dangerous for our budgets. The hot states will strike intensely, perhaps set off by songs, smells, or the sight of a cafe where you used to meet up for lunch with the friends you haven’t hugged in a year. He talks about it as though we’re all about to get very drunk, and the only thing we can do is make sure we put away the sharp objects ahead of time.

A drunk person, for example, isn’t known to carefully consider the future repercussions of their actions. Similarly, hot states exacerbate our present bias, which makes us overvalue what we have now and devalue what that stranger known as us in the future will have, a trait familiar to anyone with vacation credit card debt.

If you think this doesn’t apply to you and you’ll be fine, that could be your restraint bias talking, the bias that makes you overestimate your ability to resist impulsive behavior. If you think that because you’ve been so good, perhaps by spending an entire year wearing your mask and forgoing public displays of Bon Jovi karaoke, you deserve to be a little bad now, that’s moral licensing. It’s the bias that serves as a little devil on your shoulder, convincing you you’re still doing good, even if you sin just a bit.

You might want to watch out for the bandwagon effect, where you jump into the Roaring Reopening spending just because all the cool kids are doing it, in your real friend group and in the groups you just watch on your social media feeds. Worse, there won’t be a designated financial driver among us, because though our experiences have varied widely, with many Americans continuing to work in public during lockdown, chances are that nearly everyone you know will have some kind of wild emotions about the opportunity to gather in a bar booth, enjoy a funny movie in a sea of IRL laughter, or dance in a laser-light crowd of fellow humans.

(Though of course, there will be some who are so traumatized by the last year that they’ll hold on to everything they have, the same way Nana saves the used Glad Press’n Seal bits because of how she was shaped by the Great Depression.) But we can work with these biases, says Amanda Clayman, financial therapist and host of Financial Therapy. We just have to understand them first. “With awareness comes an opportunity for self-agency,” she says.

Biases didn’t evolve to trip us up. They originally came about to help us. “Just the idea of a cognitive ‘bias,’ I think it’s a bit pejorative. It’s a shortcut. And when we call it a bias, it’s just us identifying where we consistently run into problems,” Clayman told me. “I think we should have as much affection and humor for these cognitive biases as we can.”

One of these mental shortcuts we can admire like a bumbling toddler is our availability bias: the illusion that the more we see something, the more likely it is to occur, and the less we see something, the scarcer it is. The scarcer we sense something is, the higher we value it.

“Our sense of availability has been really reset. You acted as if a concert ticket is completely scarce because your availability heuristic has been reset around when something is going to be an option,” said Clayman. “Our entire sense of what is available when and what is normal has been skewed by this experience.”

You know who has studied your biases? Marketers. And they know exactly where to poke them. Clayman adds that capitalist society trains us from an early age to think that if we have a negative feeling, we can find a product to fix it. We’re all going to be tempted to “solve” the trauma of the last year, as if a wild night at Target on the credit card could cheer us right up after living through a plague that’s killed more than 3 million people and continues to rage in many parts of the world.

She says that what we’ll really need is human connection, safe spaces to talk about what we’ve gone through, and the uncomfortable experience of sitting with our feelings. Without processing the emotions of the last year, we’ll just try to shovel fun, novelty, and pleasure into the pit, and the expense is going to add up before we realize it’s not working.

Natasha Knox, a certified financial planner and chair of business development for the Financial Therapy Association, says to listen for the moral licensing words, “I deserve it because …” It might be because you’ve been through so much or you’ve worked so hard.

“This sort of permission-giving has truth to it. It is true, collectively we have been through a lot and many people do work really hard,” said Knox. “You’re not wrong. You do deserve it. But then there’s future you. What does that person deserve?”

In order to reconnect and enjoy a bit more freedom while also protecting your future self, start setting aside some cash now that is, as Knox describes it, “safe to spend” without putting yourself in financial danger. Then create some cooling space between you and spending. Unsubscribe from all those sale emails. Turn off one-click pay. Don’t save your credit card in your web browser. Try to wait 24 hours before buying something unplanned. Most importantly, keep close the deeper reasons you don’t want to go financially wild (whatever that means to you) over the next few months, in addition to simply not causing yourself more stress and chaos.

“It really does have to boil down to that first, because if we’re just denying ourselves for no reason, that’s not sustainable and it usually doesn’t work,” said Knox. “The bigger why has to be front and center. Because it’s hard, and it’s been a terrible year.”

She recommends finding a photo that represents something you’re working toward getting a year to a few years out and making that your phone’s home screen or otherwise keeping it close. “When something has been as dramatic as this year, the longer-term picture gets a little fuzzy,” Knox said, “So we have to bring that back into focus.”

Like biases, spending itself is not a bad thing. I’m happy to support the venue, the band, and even, if they open in time, Scott and Cindi, the owners of the nearby private campground, whom I’ve been worried about because I watched their business grow for so many years. This is an inextricable truth: Our spending is part of what will alleviate the Covid-19-inflicted financial suffering of our fellow humans. Consumer spending constitutes about 70 percent of the GDP, after all. So I’ll spend, but, knowing what I know now, I’ll spend as slowly as I can, at places I care about, tentatively finding ways to enjoy the new normal, and without causing another crisis for myself.

Paulette Perhach writes about creativity, finances, tech, psychology, and anything else that inspires awe for places like the New York Times, Elle, and Glamour. She posts regularly at WelcomeToTheWritersLife.com.

Source: Why you might feel the urge to overspend as the pandemic winds down – Vox

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What Is Financial Therapy?

Financial therapy merges finance with emotional support to help people cope with financial stress. Financial advisors must often provide therapy to clients in order to help them make logical monetary decisions and deal with any financial issues they might be facing.

Breaking Down Financial Therapy

Money plays a large role in a person’s overall well-being, and the stresses of managing money and dealing with financial pitfalls can take a huge toll on one’s emotional health. If left uncontrolled, this emotional burden can spread into other areas of a person’s life. Just as with any other form of therapy that addresses other aspects of a person’s life, financial therapy provides support and advice geared specifically toward the financial realm and the stresses that go along with it. The end goal is to get a person’s finances in order and provide the necessary advice to keep them in order.

Financial Therapy Reasoning

There are a range of reasons why a person would seek out or need financial therapy. In many cases, behavioral issues cause a person to adapt unhealthy financial routines, including unhealthy spending habits (such as gambling or compulsive shopping), overworking oneself to hoard money, completely avoiding financial issues that must be dealt with, or hiding finances from a partner. Often, bad saving, spending, or working habits are a symptom of other bad habits related to mental or physical health.

Financial Therapy vs. Other Types of Therapy

The most effective forms of financial therapy involve a collaboration between a person’s financial advisor and a licensed therapist or specialist. Both the financial advisor and the therapist have unique qualifications that the other does not possess. Because of this, it’s hard for one to provide complete financial therapy support, and trying to do so could potentially steer a person in the wrong direction and violate ethical codes. However, financial advisors often find themselves providing informal therapy to clients, and therapists often deal with emotional issues related to financial stress.

Financial advisors are well-versed on their clients’ specific situations and are able to advise on the best courses of action. They’re able to share their expertise in the hopes of alleviating the financial burdens their clients face. However, therapy is not a financial advisor’s area of expertise, and if a person requires real emotional support or needs help breaking bad habits, a licensed professional should be involved. The financial advisor tends to be more adept at providing advice on how best to move forward with financial issues, while the licensed professional can provide support that gets to the root of a deeper problem.

Here’s Why Spiking Inflation And Labor Shortages Won’t Tank The Economic Recovery, According To Experts

New York City Reopens As Most Pandemic Restrictions Are Lifted

Spiking inflation, disappointing jobs gains and shortages of labor and commodities have investors wringing their hands over the state of the economy and the seemingly growing risk of overheating, but according to Moody’s chief economist, Mark Zandi, there’s no cause for alarm.

In a research note published Tuesday, Zandi emphasizes that all those factors are temporary.  “The recovery . . . may be uneven, given the considerable adjustments needed for the economy to fully reopen, but our outlook for a boom-like economy over the coming year has not changed materially,” he wrote.

The labor shortage and hiring difficulties will improve as students return to school and parents have more childcare options, he suggests, and he describes the evidence that federal supplemental $300 weekly unemployment benefits are keeping workers home as “thin.”

Zandi expects inflationary pressures to ease later this year once the economy returns to normal and businesses—especially those in the travel and leisure industry—get past the point where they are reversing their pandemic-era price cuts.

He suggested investor fears that stubborn inflation will force the Federal Reserve to hastily raise rates, thereby triggering a recession, are unlikely to materialize because of the significant slack still extant in the labor market.

Zandi also cites the ongoing semiconductor shortage as a major factor in the job losses and shortages in the auto manufacturing industry, but adds that he expects those pressures to abate by next year once surging demand and soaring prices for the chips prompt suppliers to boost production, thereby stabilizing the supply chain.

Crucial Quote

“Until the supply side of the economy wakes up and catches up with the fast-reviving demand side coming out of the pandemic, the economic statistics will undoubtedly hold more surprises—output and supply chains scrambled; labor, commodities and products in short supply; and price spikes,” Zandi wrote. “If history is a guide, when businesses can make a healthy profit, they will solve the problems,” he added. “Quickly.”

Key Background

Zandi isn’t the only expert looking beyond the risk factors to a robust recovery. Despite raising their expectations for one measure of inflation by more than a percentage point to a peak of 3.5% this year, analysts from investment giant Goldman Sachs believe the factors that caused them to hike the target for core CPI inflation—soaring used-car prices, production delays in the auto industry and changes in health insurance payouts—are temporary.

Not to mention, their impact isn’t as large across other measures of inflation that weigh prices differently. That sentiment is also beginning to make its way to Wall Street: “The inflation debate is not over, but the majority of Wall Street believes it will be transitory,” OANDA senior market analyst Edward Moya wrote in a Tuesday note.

Just as telling as the wage data, the share of working-age Americans who are in fact working has declined in recent decades. The country now has the equivalent of a large group of bakeries that are not making baguettes but would do so if it were more lucrative — a pool of would-be workers, sitting on the sidelines of the labor market.

Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.

Chief Critic

But not everyone agrees. Larry Summers, an economist who served in the Clinton and Obama Administrations, wrote in a Monday op-ed in the Washington Post that while some of the recent inflation might normalize with time, “not everything we are seeing is likely to be temporary.”

Summers suggests that a handful of factors including demand that grows faster than supply, higher housing prices, inflation expectations and even higher minimum wages and more benefits for employees have the potential to push inflation even higher. Summer recommends that policymakers “explicitly [recognize] that overheating, and not excessive slack, is the predominant near-term risk for the economy.”

What We Don’t Know

When the Federal Reserve will move to tighten policy and raise interest rates. Atlanta Federal Reserve President Raphael Bostic told CNBC last week that given the 8 million jobs that have yet to be recovered, “I think we’ve got to have our policies in a very strongly accommodative situation or stance.” He added: “I don’t think we’re going to have answers on this until at least early fall, and it may take longer than that.”

One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages. But there is a lot of evidence to suggest that the U.S. economy does not suffer from that problem.

If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.

I’m a breaking news reporter for Forbes focusing on economic policy and capital markets. I completed my master’s degree in business and economic reporting at New York University. Before becoming a journalist, I worked as a paralegal specializing in corporate compliance.

Source: Here’s Why Spiking Inflation And Labor Shortages Won’t Tank The Economic Recovery, According To Experts

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References

Nelson 1995, p. 158. This Marxist objection is what motivated Nelson’s essay, which claims that labour is not, in fact, a commodity.

World Economy is Suddenly Running Low on Everything

https://i1.wp.com/onlinemarketingscoops.com/wp-content/uploads/2021/05/1x-1.jpg?resize=924%2C616&ssl=1

A year ago, as the pandemic ravaged country after country and economies shuddered, consumers were the ones panic-buying. Today, on the rebound, it’s companies furiously trying to stock up. Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.

Copper, iron ore and steel. Corn, coffee, wheat and soybeans. Lumber, semiconductors, plastic and cardboard for packaging. The world is seemingly low on all of it. “You name it, and we have a shortage on it,” Tom Linebarger, chairman and chief executive of engine and generator manufacturer Cummins Inc., said on a call this month. Clients are “trying to get everything they can because they see high demand,” Jennifer Rumsey, the Columbus, Indiana-based company’s president, said.“They think it’s going to extend into next year.”

The difference between the big crunch of 2021 and past supply disruptions is the sheer magnitude of it, and the fact that there is — as far as anyone can tell — no clear end in sight. Big or small, few businesses are spared. Europe’s largest fleet of trucks, Girteka Logistics, says there’s been a struggle to find enough capacity. Monster Beverage Corp. of Corona, California, is dealing with an aluminum can scarcity. Hong Kong’s MOMAX Technology Ltd. is delaying production of a new product because of a dearth of semiconductors.

Further exacerbating the situation is an unusually long and growing list of calamities that have rocked commodities in recent months. A freak accident in the Suez Canal backed up global shipping in March. Drought has wreaked havoc upon agricultural crops. A deep freeze and mass blackout wiped out energy and petrochemicals operations across the central U.S. in February. Less than two weeks ago, hackers brought down the largest fuel pipeline in the U.S., driving gasoline prices above $3 a gallon for the first time since 2014. Now India’s massive Covid-19 outbreak is threatening its biggest ports.

For anyone who thinks it’s all going to end in a few months, consider the somewhat obscure U.S. economic indicator known as the Logistics Managers’ Index. The gauge is built on a monthly survey of corporate supply chiefs that asks where they see inventory, transportation and warehouse expenses — the three key components of managing supply chains — now and in 12 months. The current index is at its second-highest level in records dating back to 2016, and the future gauge shows little respite a year from now. The index has proven unnervingly accurate in the past, matching up with actual costs about 90% of the time.

To Zac Rogers, who helps compile the index as an assistant professor at Colorado State University’s College of Business, it’s a paradigm shift. In the past, those three areas were optimized for low costs and reliability. Today, with e-commerce demand soaring, warehouses have moved from the cheap outskirts of urban areas to prime parking garages downtown or vacant department-store space where deliveries can be made quickly, albeit with pricier real estate, labor and utilities.

Once viewed as liabilities before the pandemic, fatter inventories are in vogue. Transport costs, more volatile than the other two, won’t lighten up until demand does. “Essentially what people are telling us to expect is that it’s going to be hard to get supply up to a place where it matches demand,” Rogers said, “and because of that, we’re going to continue to see some price increases over the next 12 months.” More well-known barometers are starting to reflect the higher costs for households and companies. An index of U.S. consumer prices that excludes food and fuel jumped in April from a month earlier by the most since 1982. At the factory gate, the increase in prices charged by American producers was twice as large as economists expected. Unless companies pass that cost along to consumers and boost productivity, it’ll eat into their profit margins.

A growing chorus of observers are warning that inflation is bound to quicken. The threat has been enough to send tremors through world capitals, central banks, factories and supermarkets. The U.S. Federal Reserve is facing new questions about when it will hike rates to stave off inflation — and the perceived political risk already threatens to upset President Joe Biden’s spending plans.“You bring all of these factors in, and it’s an environment that’s ripe for significant inflation, with limited levers” for monetary authorities to pull, said David Landau, chief product officer at BluJay Solutions, a U.K.-based logistics software and services provider.

Policy makers, however, have laid out a number of reasons why they don’t expect inflationary pressures to get out of hand. Fed Governor Lael Brainard said recently that officials should be “patient through the transitory surge.” Among the reasons for calm: The big surges lately are partly blamed on skewed comparisons to the steep drops of a year ago, and many companies that have held the line on price hikes for years remain reticent about them now. What’s more, U.S. retail sales stalled in April after a sharp rise in the month earlier, and commodities prices have recently retreated from multi-year highs.

Caught in the crosscurrents is Dennis Wolkin, whose family has run a business making crib mattresses for three generations. Economic expansions are usually good for baby bed sales. But the extra demand means little without the key ingredient: foam padding. There has been a run on the kind of polyurethane foam Wolkin uses — in part because of the deep freeze across the U.S. South in February, and because of “companies over-ordering and trying to hoard what they can.”

“It’s gotten out of control, especially in the past month,” said Wolkin, vice president of operations at Atlanta-based Colgate Mattress, a 35-employee company that sells products at Target stores and independent retailers. “We’ve never seen anything like this.”Though polyurethane foam is 50% more expensive than it was before the Covid-19 pandemic, Wolkin would buy twice the amount he needs and look for warehouse space rather than reject orders from new customers. “Every company like us is going to overbuy,” he said. Even multinational companies with digital supply-management systems and teams of people monitoring them are just trying to cope. Whirlpool Corp. CEO Marc Bitzer told Bloomberg Television this month its supply chain is “pretty much upside down” and the appliance maker is phasing in price increases. Usually Whirlpool and other large manufacturers produce goods based on incoming orders and forecasts for those sales. Now it’s producing based on what parts are available.

“It is anything but efficient or normal, but that is how you have to run it right now,” Bitzer said. “I know there’s talk of a temporary blip, but we do see this elevated for a sustained period.” The strains stretch all the way back to global output of raw materials and may persist because the capacity to produce more of what’s scarce — with either additional capital or labor — is slow and expensive to ramp up. Read more…..
By Brendan Murray, Enda Curran, Kim Chipman, Bloomberg

Source: World economy: World economy is suddenly running low on everything – The Economic Times

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References

“Research and development expenditure (% of GDP) | Data”. data.worldbank.org. Retrieved 12 December 2017

Buffett Explains Why He Didn’t Do A Big Deal During The Pandemic Crisis

Berkshire Hathaway Investments

Warren Buffett came under fire for not getting out his elephant gun to make a big purchase during the market lows during the first half of 2020. Here’s how he explained it at the Berkshire Annual Meeting.

Risk Management

Buffett manages risk at Berkshire. He pointed out that the U.S. response to the pandemic was managed very well. Importantly though, it didn’t have to be. He saw a critical point as the intervention of the Fed on March 23rd 2020. Before that, companies were starting to pick up the phone and call Berkshire for help, after the Fed’s actions, help wasn’t needed. Then the fiscal reaction with the CARES Act was favorable too.

Buffett didn’t view this outcome as a certainty and viewed worse outcomes as possible. As much as he enjoys making money, he views it as more important that he doesn’t lose it and the range of potential outcomes early in COVID-19 was one reason he was cautious.

Airline Risk

The other thing that Buffett was concerned about was backstopping certain investments, specifically airlines. One major move that Berkshire made during 2020 was selling down airline stakes. Buffett explained that if Berkshire remained a major investor, then the airlines may have been less likely to get government support because the airlines could have looked to Berkshire for findings.

SPACs

Berkshire also noted that the rise in SPAC activity is making it harder to source deals, for now. This is a trend that Buffett has seen in the past, but now is particularly pronounced given the number of SPACs seeking deals on a time-limited basis. Buffett’s partner, Charlie Munger, called this “fee driven money” because the deals may be done for fees rather than because they are good deals. Buffett shared that he still had funds in the tens of billions in Treasury bills that he’d like to put to work under better conditions.

Still, it appears implicitly that Buffett does not view the COVID-19 pandemic as Berkshire’s finest hour. He points out that Berkshire did repurchase substantial shares over 2020. It also seems that there were structural reasons from the actions of the Fed in providing massive funding, and the growth of SPACs, in chasing deals, that have cut deal flow to Berkshire over recent months.

Simon is the author of Digital Wealth and Strategic Project Portfolio Management. He has previously served as Chief Investment Officer at Moola and FutureAdvisor, both are consumer investment startups that were subsequently acquired by S&P 500 firms. He is a CFA Charterholder and educated at Oxford and Northwestern. Articles are informational only, not investment advice.

Source: Buffett Explains Why He Didn’t Do A Big Deal During The Pandemic Crisis

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Warren Buffett is feeling much better since “the economy went off a cliff” last March. He admits he might be even happier if he had used that opportunity to invest some of the $145 billion of cash Berkshire Hathaway Inc. has been hoarding.

Buffett Bails

Warren Buffett now says he regrets not buying up more unloved assets during the pandemic the way the value investor famously has in past crises.Berkshire revealed that it sold stocks again last quarter, bringing the total net value of equities it has dumped since the outset of the Covid-19 pandemic to more than $12 billion.

The benchmark S&P 500 index returned about 26% over that span — double what Berkshire shares did. And as Apple Inc. gained 80%, becoming a $2 trillion company, Berkshire sold some of its Apple shares. That was a mistake, Buffett said, to which his longtime business partner Charlie Munger resoundingly (if half-jokingly) declared, “Yes!” The two say they’ve never had a fight in their sixty-plus years working together, but in that moment their cute claim seemed slightly less plausible.

“Looking back, definitely we could’ve done things better,” Buffett said, because many businesses sprang back astonishingly fast. That was thanks to the Federal Reserve’s extraordinary actions early on, which Buffett praised, and the relief checks that went to Americans, he told virtual listeners of his company’s annual shareholder meeting Saturday. Investing is “not as easy at it sounds,” he added, words of caution to the new generation of investors using commission-free apps such as Robinhood that encourage a casino-like trading experience. Buffett, who at 90 is still a voracious reader of companies’ annual reports, is looking forward to reading Robinhood Markets Inc.’s document when it files to go public.

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Inflation’s Mixed Basket: 7 Things That Will Cost You More—And 3 That Will Cost You Less—In The Covid Recovery Economy

uncaptioned

 

By most accounts, the U.S economy is set to boom this summer: pent-up pandemic savings are burning a hole in consumers’ pockets, vaccines are rolling out and trillions of dollars in federal stimulus spending are working their way through the economy—not to mention the warmer weather ahead.

But the picture isn’t all rosy: some are worried the recovery might actually be too hot and prompt runaway inflation that erodes purchasing power and hurts households’ bottom lines.

Source: Inflation’s Mixed Basket: 7 Things That Will Cost You More—And 3 That Will Cost You Less—In The Covid Recovery Economy

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Look at Zim, Venezuela before expropriating land
http://www.sowetanlive.co.za – March 6, 2020
[…] the disregard for property rights, ultimately led to an unemployment rate of 90% in Zimbabwe, hyper-inflation and food and fuel shortages […]
108
Apparitions of the Virgin Mary
http://www.inplainsite.org – February 14, 2020
[…] republic had replaced the old monarchy, and there were strikes, crime, corruption, bomb-throwing, inflation and food shortages together with the added complication of the First World War […]
5
NDA Govt has kept inflation, fiscal deficit well under control: FM
http://www.pennews.net – February 11, 2020
[…] a debate in the Rajya Sabha on the General budget, Ms Sitharaman said as a against a double digit inflation and food inflation during the previous UPA Government, the NDA Government has managed to keep inflation well […]
1
Parliament proceedings budget session 2020 live February 11, 2020
http://www.thehindu.com – February 11, 2020
[…] Inflation and food inflation was in double digits […]
9
U.S. should be “prosecuted for genocide over its sanctions policy” –
5pillarsuk.com – January 20, 2020
[…] Iran’s currency has lost a third of its value and inflation and food prices have risen considerably, as has unemployment […]
74
How The Current Situation In Iran Is Affecting People
http://www.refinery29.com – January 15, 2020
[…] economic sanctions on Iran have led to a recession in the country, as well as high levels of inflation and food shortages […]
6
Fords Sales in China has Dropped Since 2016, Down 26.1% in 2019.
mavenroundtable.io – January 15, 2020
[…] Getting to the real numbers of the Chinese economy is always a guessing game, but with inflation and food prices rising China’s market for automobiles has heavily contracted over the past year-and-a-half […]
1
Van Hipp: Trump’s path forward with Iran — six steps to help the US and the Iranian people
http://www.foxnews.com – January 7, 2020
[…]   With 50 percent inflation and food prices that have risen 85 percent, the Islamist regime has been forced to focus on its own problems […]
113
Venezuela: Assailants storm military facility, steal weapons | News | DW | 23.12.2019
http://www.dw.com – December 23, 2019
[…] Nicolas Maduro’s Socialist government has struggled with a three-year recession, spiraling inflation and food shortages […]
13
On brink of ‘man-made’ starvation, Zimbabweans struggling to cope
http://www.newzimbabwe.com – December 12, 2019
[…] government over the years resorted to price controls and money printing to tackle skyrocketing inflation and food shortages, but the measures impoverished local state-owned agricultural companies and contribute […]
1
On brink of ‘man-made’ starvation, Zimbabweans struggling to cope
http://www.news24.com – December 12, 2019
[…] government over the years resorted to price controls and money printing to tackle skyrocketing inflation and food shortages, but the measures impoverished local state-owned agricultural companies and contribute […]
509
On brink of ‘man-made’ starvation, Zimbabweans struggling to cope | Zimbabwe News | Al Jazeera
http://www.aljazeera.com – December 11, 2019
[…] government over the years resorted to price controls and money printing to tackle skyrocketing inflation and food shortages, but the measures impoverished local state-owned agricultural companies and contribute […]
1
On brink of ‘man-made’ starvation, Zimbabweans struggling to cope
m.news24.com – December 11, 2019
[…] government over the years resorted to price controls and money printing to tackle skyrocketing inflation and food shortages, but the measures impoverished local state-owned agricultural companies and contribute […]
17
All Eyes on Sudan’s Transition to a Democracy
http://www.cipe.org – October 25, 2019
[…] the world by Transparency International, has a nearly 13% unemployment rate, and suffers from high inflation and food and water shortages […]
1
UN chief concerned over Haiti’s political crisis
http://www.neweurope.eu – October 18, 2019
[…] The protesters have been calling for Moise to resign amid corruption allegations, rising inflation and food and fuel shortages […]
1
In Defence of Marxism
http://www.marxist.com – October 6, 2019
[…] The women of Paris who bore the brunt of rising inflation and food shortages, and who were awakened to political life, led a march on Versailles, shaming thei […]
105
Low Inflation a Self-inflicted Policy Wound – The Economic Times – Mumbai, 10/4/2019
epaper.timesgroup.com – October 4, 2019
[…] Further, lower food inflation (and food inflation has lagged behind even the low overall headline inflation) translates into lower incom […]
1
policy: Low inflation a self-inflicted policy wound
economictimes.indiatimes.com – October 4, 2019
[…] Further, lower food inflation (and food inflation has lagged behind even the low overall headline inflation) translates into lower incom […]
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