“Bubble Markets Display Bizarre Behavior Right Before They Tumble:
“Like the Dot.Com bubble of the late ‘90s, the typical signs of an approaching bubble bust were on full display in the equity markets last week…”
“The majority of U.S. cities were ill-prepared for any financial crisis last year, let alone the one brought about by their respective state shutdowns in response to the COVID-19 pandemic, a new report published by the nonprofit Truth in Accounting (TIA) concludes.”
“Biden’s First U.S. Jobs Report to Show Challenge Ahead: Economists are expecting the January jobs report to show a stagnant and still elevated unemployment rate — holding at 6.7% — according to a Bloomberg survey ahead of Friday’s data.
“That’s nearly double the level before the pandemic struck early last year.”
“Biden’s fist looms large as US banks prosper during Covid crisis: Finance bosses enjoy record profits and look set to make yet more, but challenges to their hegemony are on the way…
“Resentment among ordinary people affected by the pandemic may already be building.” [I think we can go out on a limb here and say that it *is* building]
“The coronavirus pandemic has meant a brutal period for UK high street retailers, many of which were struggling before last spring as more and more consumer sales moved online.”
“More than a third of UK hospitality businesses – an estimated 650,000 – fear collapse in the next three months, it has been revealed, amidst reports of the current lockdown lasting until May.”
“Cutting the UK’s official interest rate below zero would fail to boost Britain’s Covid-stricken economy because lenders would increase mortgage costs in response, the Bank of England has been told.
“The leading representative of Britain’s building societies said high street lenders were not in a position to handle negative interest rates…”
“The spiralling cost of shipping goods from Asia is causing a shortage of consumer goods in Europe for importers of everything from home furnishings, bicycles and sports kit to children’s toys and dried fruits.
“A dearth of empty containers in China has quadrupled prices on sea trade routes to Europe…”
https://www.ft.com/content/40d23da5-c321-4b56-8ec7-551573a7a485
“Protesters angry with coronavirus restrictions have staged rallies in a number of European cities, days after the Netherlands was rocked by anti-curfew riots.
“In Brussels, Belgian police on Sunday arrested many protesters at a non-authorised demonstration against measures aimed at combating the spread of COVID-19…” [Photos]
https://www.aljazeera.com/gallery/2021/1/31/in-pictures-protests-against-covid-measures
“Japanese Prime Minister Yoshihide Suga looks set to extend a state of emergency for major metro areas that will inflict more pain on the economy, as he tries to stem the latest wave of Covid-19 cases and reverse a fall in public support…
“Extending the emergency will prolong the distress for businesses…”
“China’s mutual fund industry assets surged 48 per cent to a record $3.1tn (Rmb20tn) in 2020 but huge demand for new funds is stoking fears that volatile investor inflows could spur a stock market bubble…
“A senior adviser to China’s central bank warned this week that the risk of asset bubbles would increase if monetary policy was not tightened.”
https://www.ft.com/content/e9a7f4a9-7cf9-4733-b3a6-c371a1400cf4
“Activity in China’s oil futures market has risen to record levels as the country seeks to develop the role of its currency in a trade dominated by the US dollar…
“A rise in trading and positions in the contracts, launched in 2018, forms part of a longer-term push by Beijing to establish renminbi-denominated markets that ultimately seek to challenge the dollar’s dominance.”
https://www.ft.com/content/877b3676-5236-4d90-bfbc-b0683faa5af8
“The United States and China are now locked in a dangerous legal war.
“On Jan. 9, China’s Ministry of Commerce issued new rules to block its companies and citizens from having to comply with “unjustified” foreign laws and measures in an attempt to counter increasingly aggressive U.S. sanctions against Chinese businesses and individuals.”
https://asia.nikkei.com/Opinion/The-dangerous-legal-war-posing-a-new-threat-to-China-US-relations
“In Russia, Economic Slump Erodes Consensus That Shielded Putin:
“In Russia, the competition between the rally-around-the-flag effect of Putin’s assertive foreign policy and anger over the sagging economy is often referred to as the battle between the television and the refrigerator: Do Russians pay attention to the patriotic news on TV or notice their empty fridges?”
“Tens of thousands of people in dozens of cities across Russia defied a heavy police presence to protest on Sunday in support of jailed opposition activist Alexei Navalny for the second straight week.
“The Kremlin made unprecedented efforts to stop the protesters repeating their triumph of last Saturday…”
https://www.ft.com/content/dec53c27-4a92-44e6-9d26-52774e0cf9d3
“India has blocked mobile internet services around New Delhi where hundreds of farmers are staging a one-day hunger strike in protest at new agriculture laws.
“The interior ministry said internet services at three locations on the outskirts of the capital had been suspended until 11pm on Sunday (5.30pm UK time) to “maintain public safety”.”
“On Friday, January 29, the impoverished people of Iran continued their protests against the government and its institutions’ economic failures and wrong policies.
“In this context, Iranian citizens held at least three rallies and strikes in two cities.”
“It’s starting to look like Saudi Arabia’s concerns over the oil demand recovery were well founded…
“…there are worrying signs that the recovery in transport fuel has not only ground to a halt, but has actually gone into reverse in some key areas.”
“…little has improved in Turkey.
“The lira remains anemic, food and consumer prices have dramatically increased, and life for people in the country has grown all the more difficult — not to mention more expensive.”
https://www.dw.com/en/turkeys-erdogan-fails-to-get-double-digit-inflation-under-control/a-56392772
“Mexico, a home to one of the world’s largest emerging market economies, has faced its steepest annual contraction in nearly 90 years in 2020…
“…according to an estimate issued by the country’s national statistics agency INEGI, Mexican economy had contracted by 8.5 per cent last year on a seasonally adjusted basis.”
“No Change in Dollars: a New Challenge for Venezuelans:
“As the economy turned to an informal dollarization, there isn’t enough cash or a proper solution to protect the meager buying power of customers.”
https://www.caracaschronicles.com/2021/01/30/no-change-in-dollars-a-new-challenge-for-venezuelans/
“Protesters in Brazil rallied for the second straight weekend in multiple cities to demand the resignation of President Jair Bolsonaro for his government’s handling of the COVID-19 pandemic…
“Bolsonaro, a coronavirus sceptic who has downplayed the seriousness of the virus and the need to enact strong public health rules to prevent its spread, has faced increased pressure in recent weeks about his handling of the pandemic.”
https://www.aljazeera.com/news/2021/1/31/more-brazil-protests-over-bolsonaros-covid-19-response
“Container line schedule reliability drops to record low in December: As container lines struggle with a huge surge in volume and a shortage of equipment schedule reliability dropped to just 44.6% in December 2020, according to analysts Sea-Intelligence.”
“Powell Won’t Pop This Bubble (Yet): …One reason the Fed isn’t fazed by stock valuations is that it is among those arguing that, in the current low-interest-rate environment, stock prices aren’t dangerously excessive…
“Still, if Fed officials aren’t alarmed by what is happening in the stock market, they should at least be worried. Most standard valuation measures show stocks are alarmingly expensive, and the reason the gauge the central bank has highlighted doesn’t is that one of its inputs—the 10-year Treasury yield—is so low.”
https://www.wsj.com/articles/powell-wont-pop-this-bubble-yet-11612018980
“There are no real options for the Federal Reserve unless they are willing to allow the system to reset painfully.”
https://seekingalpha.com/article/4402236-macroview-2021-disappointment-of-growth-and-disinflation
“Magic money is blinding us to the dangerous reality of inflation:
“Signs of inflation are everywhere, from stocks, bonds and real estate to goods and services. Yet analysts and fund managers continue to argue that asset inflation is nothing to be feared…”
You can read the previous ‘Economic’ thread here. I’ll be back tomorrow with a ‘Climate’ thread.
If you found value in this content, please help me continue this work by becoming a patron of my work via patreon.com.
