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Has the marketplaceplace’s low been reached or is it a repeat of the short-lived bearish rally of the first quarter?Is the “fix in” of European bonds?Kuroda’s reckless clinging to “whatever it takes” to buy extra time for Japan’s dangerous bond bubble?Do the sharp shift in the commodity market and weaker knowledge ease the strain on the Fed and the global network of central banks?Could the entire world market be evidence of continued existential risk to the global network of leveraged speculators?
With a 6. 4%, the S
Meanwhile, commodities and similar stocks remained under pressure for a straight week. The Bloomberg Commodity Index fell 4. 3%, with a loss of 10. 4% in two weeks. only about 30%. At first glance, it turns out that some long/short and boosting methods have noticed that your purchases are under pressure while your sales have recovered.
There is a small compression detail in the rebound. The Goldman Sachs Most Short index jumped 11. 2% this week. Okta jumped 22. 5%, Etsy 16. 0%, Norwegian Cruise Lines 15. 7%, Lucid Group 15. 5%, Docusign 13. 5% and Moderna 12. 7%. . THE ETF OF THE SET
In excessive instability, U. S. high-performance CDSs are not very unstable. U. S. imports fell 47 base issues this week, reversing last week’s 44 basis point gain. CDS Investment Grade fell 6 base issues after jumping 8 base issues. Huge bond outflows continue. Although they fell because of some basic problems, the costs of bank CDSs only reversed a fraction of last week’s increase.
Italian 10-year yields fell 14 fundamentals this week to 3. 46%, and now yields are down 52 fundamentals from intraday highs on June 14. June 14 highs of 4. 74%. Portuguese yields have fallen 60 fundamental emissions (to 2. 52%) and Spanish yields have fallen 58 fundamental emissions (to 2. 55%) from the highs of just 8 sessions ago.
The ECB’s emergency assembly to deal with the growing threat of “fragmentation” reversed the intense deleveraging dynamic that was overwhelming debt markets in the European periphery.
June 20 – Financial Times (Martin Arnold): “The European Central Bank is determined to nip ‘in the bud’ any fragmentation of loan prices among eurozone countries, said its president Christine Lagarde. . . , warn anyone who doubts that you ‘made a big mistake’. Appearing before EU lawmakers in Brussels, Lagarde defended the ECB’s decision, taken at an emergency assembly last week, to speed up painting on a new policy tool to counter the recent rise in loan prices for the most vulnerable countries. “It has to be nipped in the bud,” said the ECB president. . . “Fragmentation will be addressed if the threat arises; and this will be done with the right instruments, with due flexibility; it will be effective; will be proportionate; it will be within our mandate and anyone who doubts that determination will make a serious mistake.
A key passage from Draghi’s fateful “bumblebee” speech in 2012: “But there is another message I must convey to you. As a component of its mandate, the ECB is in a position to do whatever it takes to maintain the euro. And I, that will be enough.
The ECB’s balance sheet was less than $3 billion when Draghi triggered inflationism “at all costs. “Many QE-style systems later, and assets come in at TN$8. Unsurprisingly, high financial inflation has failed to resolve the deep structural upheavals in Europe’s troubled periphery. .
While there are short-term effects and abundant volatility, I doubt markets are intimidated by the bluster of tough types “whoever hesitates” “makes a big mistake. “and most stakeholders that the attack of inflationism classified at this point will lead to anything other than higher inflation and just more instability. Lagarde will play a game of birds, simulating Draghi’s exhausted, abused and overused tool, rather than battalions of emboldened market operators.
June 20: Bloomberg (Chikako Mogi): “Tokyo’s bond market was much calmer during the week, as investors weighed unprecedented intervention through the Bank of Japan, which placed benchmark yields below their heavily guarded ceiling. Ten-year yields rose to 0. 23% on Monday following purchases of 10. 9 trillion yen ($81 billion) in government bonds through the BOJ last week, the highest level on record. . . sell.
I am not opposed to a central bank’s balance sheet in “buyer of last resort” operations to thwart monetary collapse. If such operations are still rare, serious stability disorders will have to be resolved. When employed, a central bank deserves to get started canceling crisis measures from the balance sheet as soon as the formula stabilizes. Central bankers will have to ensure that their balance sheet operations never inspire leveraged speculation.
What Haruhiko Kuroda of the Bank of Japan has done is a financial policy madness. An additional $81 billion, last week alone, in absolutely far-fetched central inflationism, all with a 25 basis point cap on 10-year Japanese government bond (JGB) yields. This week’s further slight drop brought the yen’s loss in 2022 to just 15% (trading this week at a 24-year low).
June 22 – Financial Times (Tommy Stubbington and Leo Lewis): “Investors are bracing for a war with the Bank of Japan this summer as they bet the global wave of emerging inflation will cause the central bank to abandon efforts to keep bond yields close to zero. The renewed enthusiasm of foreign fund managers to bet against Japanese government bonds – an industry that has failed so much over the last two decades that it has earned the nickname “widowmaker” – also puts them at odds with most Japanese investors who believe the BoJ will stick to its guns despite the yen tumbling to a 24-year low. At last week’s monetary policy meeting, Japan’s central bank renewed its commitment to buy as much government debt as needed to keep 10-year loan prices below 0. 25%. This commitment to so-called yield curve control, a long-standing feature of financial policy in an economy that has struggled for decades to deliver meaningful inflation, puts Japan increasingly out of step with a frenzied race toward interest rates. highest interest rates in the world.
I officially wonder if the arrival of the euro will be the next global economic and monetary crisis. The recent cracks in bonds on the European outer rim sound like an early warning, something that has obviously not escaped ECB officials. Probably more pressing, kuroda’s retroactive bet JGB rate explosion may be just a few weeks away. At this point, market operators (i. e. the network of leveraged speculators) smell blood. of global inflation and sky-high bond yields provides a rare risk-reward opportunity to speculate in a multibillion-dollar market. I do not forget the last breath, the desperate political measures and the latest compression of the Thai baht. at the height of June 1997, just before the bloody hell broke out.
And speaking of the mid-90s. . .
“It’s true that we’ve moved a lot, but we’ve moved a lot from a very low point. I like to refer to the 1994 hardening in the United States. . . The 1994 tightening was three hundred fundamental problems in one year – adding a 75 basis point motion in November 1994. This episode of hardening caused riots that year, in 1994. However, I have the idea that the U. S. economy is not very good at the same time. quickly during this era; that’s when he was given the most productive hard labor markets he’s ever noticed in the postwar era in the United States. we can get something like that back this time. But we are moving fast, yet we are starting from a low point and the very accommodative financial policy that we have put in a position to review to combat the pandemic. St. Louis Fed President James Bullard on June 20, 2022
I’m interested in what’s in James Bullard’s brain. He is a considerate economist and, depending on the final results of the 2024 election, could be Powell’s successor. Bullard’s comments about 1994 and the past ’90s deserve a rebuttal.
I recently made several references to 1994: the end of books until 2022 and the pivotal year of monetary history. This was the Fed’s last real tightening, and it caused “some disruption. “There have been large explosions in the bond and derivatives market that have burst an incipient bubble in the hedging budget and leveraged hypothesis. Instead, government-sponsored companies, or GSEs (primarily Fannie and Freddie), expanded their balance sheets to $150 billion (an unprecedented amount at the time). His large purchases of a collection Credit tools, necessarily a QE operation, were key to containing the crisis and rescuing the community of leveraged speculators. tools and derivatives (money markets in general) for the next decade (where GSE assets would accumulate at TN$2. 25 until 2004).
Without the GSE backing of 1994 and the rescue of Mexico, the bubbles of the “Asian tiger” would not have swelled to catastrophic extremes. There would have been no dramatic collapses of Russia and LTCM in 1998, no bailouts or stimuli to fuel the dangerous speculative dynamics. The collapse of punto. com “technology” then triggered the Fed stimulus and the resulting loan financing bubble. The “great currency crisis” that followed saw the first QE offload. billion in 1994, ended 2007 at around $900 billion, surpassed TN$2. 0 billion in 2008, reached $4. 5 in 2014, and rose to nearly $9. 0 TN this week.
Bullard is an illusion if he thinks a lot of smart things are going to happen, such as the “stellar functionality of the moment part of the 1990s. “In fact, there are strong associations between 1994 and 2022: the first was at the dawn of an old cycle, the moment of conclusion. The past 90s saw a normal confluence of economic innovation, technological advances, leveraged speculation, globalization, and economic political experimentation.
The pandemic has triggered end-of-cycle climate excesses in economic innovation, leveraged hypotheses, and political experimentation. The new cycle that is taking position now will impose far-reaching restrictions on all three. Long after the peak of the cycle, 2022 will be identified as an ancient turning point for “globalization. “The new Iron Curtain is only the ultimate tangible evidence of the unfolding of new dynamics. And while this is not my domain of expertise, I suspect that recent unprecedented economic excesses have likely increased technological innovation. In addition, 1994 was the beginning of a historic and extended bullish bond market position, which is the basis for the epic equity and inflation of the asset market position. This year will begin what I hope will be a new cycle of primary bear market positions for bonds, stocks, and economic assets in general.
Instead of the “good stuff” of the ’90s moment, I’m worried about more emerging market bubble collapses, more LTCM and Russia implosions, and related acute instability. Global markets have regained some composure this week. But I doubt that the brush with the abyss will soon be forgotten. I guess the speculative leverage network is modified. While I expect threat relief and deleveraging to continue, it would be unexpected to see the recovery continue through the end of the quarter.
Unfortunately, we are at the beginning of the dynamics of the global crisis. There’s the failure of American “technology,” crypto and credit bubbles (to name a few), peripheral European bonds, the Kuroda bubble, and the fragility of the emerging market bubble. Rally of actions to customers of Beijing’s stimulus measures, the crisis of Chinese developers has gone from the radar screen. I would hand it over; things get worse week by week.
June 24: Bloomberg (Lorretta Chen): “China’s high-yield dollar bonds fell 1 to 2 cents on Friday, according to credit traders, and developers led the declines as this month’s slump continues. The market is about to end a third full week with no gain in value and a record loser in the eighth week. . . “
June 21: Bloomberg (Alice Huang and Lorretta Chen): “The ongoing fall in bonds of the Chinese owner of the Club Med hotel chain shows that monetary tension among the country’s real estate developers is shifting to other weaker borrowers. In a sign of contagion, it fell on Tuesday over the offshore debt of some Chinese business corporations after a big sale on Monday at Macau casinos. Meanwhile, last week’s drop in the dollar bonds of conglomerate Fosun International Ltd. accelerated, with some on track for record falls. . . phase. “
For the week:
the s
Yields on three-month Treasury bills ended the week at 1. 6025%. Yields on two-year Treasuries fell 12 bps to 3. 07% (up 233 bps year-on-year). Yields on five-year Treasuries fell 16 fundamental issues to 3. 19% (up 192 fundamental issues). Ten-year Treasury yields fell fundamental issues to 3. 14% (an increase of 162 fundamental issues). Yields on long-term bonds fell two fundamental issues to 3. 26% (an increase of 136 fundamental issues). Returns on the benchmark Fannie Mae MBS index fell 15 foundation problems to 4. 51% (to 244 foundation problems).
Greek 10-year yields fell 25 core issues to 3. 77% (a year-on-year increase of 245 core issues). Portuguese 10-year yields fell 18 core emissions to 2. 52% (to 206 core emissions). Italian 10-year yields fell by 14 foundational issues to 3. 46% (-229 foundational issues). The yield on the Spanish 10-year bond fell 19 bps to 2. 55% (-199 bps). German Bund yields fell by 22 core emissions to 1. 44% (an increase of 162 core emissions). French rates fell by 23 core issues to 1. 97% (-178 core issues). The 10-year bonds between french and Germans were reduced to 53 basic issues. Yields UK 10-year government bonds fell 20 fundamental issues to 2. 30% (an increase of 133 fundamental issues). The UK’s FTSE stock index rose 2. 7% (down 2. 4% year-on-year).
Japan’s Nikkei stock index gained 2. 0% (down 8. 0% year-on-year). Japanese 10-year “JGB” yields were gradually replaced by 0. 23% (an increase of 16 bps year-on-year). The French CAC40 rose by 3. 2% (-15. 1%). The German equity index DAX replaced little (-17. 4%). The Spanish IBEX 35 equity index rose by 1. 2% (-5. 4%). Italy’s FTSE MIB index rose 1. 5% (-19. 1%). Emerging inventories were mixed. Brazil’s Bovespa index was down 1. 2% (-5. 9%) and Mexico’s Stock Exchange index was down 0. 6% (-10. 4%). South Korea’s Kospi index fell 3. 0% (down 20. 5%). India’s Sensex inventory index rebounded 2. 7% (down 9. 5%). China’s Shanghai Stock Exchange Index gained 1. 0% (down 8. 0%). Turkey’s Borsa Istanbul National Cien index gained 0. 8% (37. 5%). The Russian MICEX equity index rose 1. 6% (down 36. 9%).
The high-quality bond budget recorded outflows of $7451 million and the junk bond budget recorded negative flows of $2625 million (from Lipper).
Last week, Federal Reserve loans rose $7. 976 billion to 8. 901 TN. Over the past 145 weeks, Federal Reserve credits increased to TN$5,174, or 139%. Federal Reserve credits rose $6. 09 trillion, or 217%, over the past 502 weeks. Moreover, the Fed’s holdings for the treasury’s outside, firm debt gained $5. 5 billion last week at 3,403 TN.
The market fund’s total assets added $1. 9 billion to $4. 543 billion. The total market budget decreased $4 billion, or 0. 1%, year over year.
Total paper increased through $17. 5 billion to $1. 143 billion. CP lost $20 billion, or 1. 7%, over the past year.
Freddie Mac’s constant 30-year loan rates added 3 fundamental issues to 5. 81% (an increase of 279 fundamental issues year over year), since November 2008. the point since June 2009. Hybrid ARM rates increased 8 core emissions to 4. 41% (up to 188 core emissions), since October 2009. problems).
Currency Monitoring:
During the week, the US dollar index fell 0. 5% to 104. 12 (up 8. 8% year-on-year). During the week on the rise, the Mexican peso rose by 2. 4%, the Norwegian krone by 1. 5%, the South African rand to 1. 4%, the Swiss franc to 1. 2%, the Canadian dollar to 1. 1%, the euro to 0. 5%, the Swedish krona to 0. 5%, the Singapore dollar to 0. 3%, the pound sterling to 0. 2%, the Australian dollar to 0. 2% and the New Zealand dollar to 0. 1%. Meanwhile, the genuine Brazilian fell by 1. 7%, the South Korean gained 0. 8% and the Japanese yen by 0. 2%. The Chinese renminbi (onshore) rose 0. 40% against the dollar (down 4. 99%). year after year).
Tracking of raw materials:
The Bloomberg Commodities Index fell 4. 3% (up 22. 3% year-on-year). Spot gold fell 0. 7% to $1,827 (unchanged). Silver fell 2. 3% to $21. 16 (down 9. 2%). WTI crude fell $1. 94 to $107. 62 (up 43%). Gasoline rose 2. 4% (74%), while herbal fuels fell 10. 4% (67%). Copper fell 7. 1% (16%). Wheat fell 10. 5% (up 22%) and corn fell 7. 8% (up 14%). Bitcoin recovered $750, or 3. 6%, this week to $21,277 (down 54%).
Monitors market instability:
June 21 – Bloomberg (Lucca de Paoli): “Corporate misery in Europe’s largest markets is near its highest level in two years, as inflation and emerging interest rates put pressure on indebted corporations. Companies in Germany, the UK, France, Spain and Italy have been suffering the maximum since August 2020, according to the Weil European Distress Index. The study brings together combined data from more than 3750 indexed European corporations. with some corporations suffering to access financing and ultimately facing defaults,” said Neil Devaney. . . , weil’s co-CEO, Gotshal.
June 21: Bloomberg (Chikako Mogi): “The sale of Japan’s five-year government bond has attracted the weakest demand in more than two years following sharp fluctuations in futures costs that have made some investors worry about their exposure to money bonds. The sovereign debt market has seen increasing turbulence this month as investors question the Bank of Japan’s ability to limit domestic yields with an increase in purchases of bonds as rates globally.
June 23 – Bloomberg (Hannah Benjamin and Ronan Martin): “The dawn of a prolonged cycle of rate hikes in Europe is redefining corporate expectations about the charge of new debt. A company entering the market will now pay higher spreads than a few a few weeks ago. Germany’s BASF SE paid 140 base issues above midswaps to get new 10-year notes on Wednesday, nearly double what it paid to sell nine-year debt just over 3 months ago.
June 20 – Financial Times (Eric Lonergan): “The emergency meeting of the European Central Bank last Wednesday was a remarkable event. It may be the first time that a central bank facing the onset of a crisis has acted early and quickly. Concerns about structural stability at the heart of the sovereign bond market in Europe have never been quelled. Despite the strength of the “whatever it takes” commitment a decade ago, then ECB President Mario Draghi, and large bond-buying programs, markets have always meant a credit threat premium on sovereign debt. from certain countries. The European sovereign bond market is unique. The debt is issued through the member states, but the currency is created through a supranational entity, the ECB. The strength to print cash is the basis for creating benchmark threat-free assets in a monetary system. Without the help of the ECB, the euro zone does not have that advantage. But the ECB’s aid to the sovereign bond market has been conditional on consistency with its value stability mandate. It was the threat of deflation in 2012, and during the pandemic, that gave the ECB the green light to provide the unlimited aid needed to stop the panic. Inflation in Europe changes the rules of the game and the markets know it.
Bubble Glow/Mania watch:
June 23 – Wall Street Journal (Jon Sindreu): “Contrary to your brilliant animated film about the fickle winds of finance, individual investors are the only ones who keep alive the confidence of ‘buying the fall’. But even your appetite for losses can have limits. The S index
June 19: Bloomberg (Anchalee Worrachate and Liz Capo McCormick): “Wall Street professionals still disagree on the fate of the $60/40 complex, only this time the balanced investment strategy is posting losses on a scale that surprises even its biggest detractors. As stocks and Treasuries retreat thanks to the Federal Reserve’s increasingly aggressive policy stance, the secular approach of allocating 60% to stocks and 40% to the steady source of revenue has fallen about 14% so far this quarter. functionality worse than in the depths of the global currency crisis and the defeat of the pandemic that only happens once a century. . . »
June 19: Bloomberg (Suvashree Ghosh): “Celsius Network Ltd. will want more time to stabilize its liquidity and operations,” the crypto loan platform suffering in a blog post after freezing deposits last week said. Celsius, one of the biggest crypto lenders, is struggling to boost budget in a fragile virtual asset market hit by interest rate tightening, liquidity and the collapse of the Terra blockchain last month. “We are in our network to know that our purpose continues to stabilize our liquidity and operations,” Celsius said. “This procedure will take time. “
June 19 – Bloomberg (Olga Kharif): “The record defeat of cryptocurrencies has put a multitude of decentralized financial programs and their communities in a race to protect themselves against a cascade of liquidations, employing unprecedented measures. On Sunday, token holders from Solend, a lending app on Solana’s blockchain, voted to temporarily take over the account of a giant user facing the risk of a giant liquidation, an excessive move for DeFi that appears to be the first. This resolution was annulled. . . All of this came after MakerDAO, an app that supports Stablecoin DAI and runs through a crypto network that shaped one of the first decentralized autonomous organizations, suspended the deposit and minting of the token on crypto lending platform DeFi. Aave.
June 18: Wall Street Journal (Corrie Driebusch and Paul Vigna): “On Super Bowl Sunday, a Crypto. com with MULTIMILLION-DOLLAR NBA star LeBron James lit up millions of American TVs. “to make their own decisions,” Mr. James in the 30-second announcement of the popular cryptocurrency trading platform. The words splashing on the screen at the end of the ad read “Fortune smiles at the brave. “Last week, Crypto. com laid off five percent of its workforce, while its chief executive said on Twitter that the company was making “difficult and mandatory decisions. “The cryptocurrency industry has been based on arrogance, enthusiasm and optimism. to top off the skeptics was: “Have fun being poor. “Those who did not sign up let the long term pass.
June 21 – Reuters (Marc Jones): “Recent implosions in cryptocurrency markets imply that the long-warned risks of decentralized virtual currency are now materializing,” the Bank for International Settlements said. The BIS, the global framework for central banks, issued the warning in an upcoming annual report, in which it also called for more efforts to expand virtual currencies that are for central banks. BIS CEO Agustin Carstens pointed to the recent collapses of the TerraUSD and moon stablecoins, and a 70% drop in bitcoin, the crypto market barometer, as signs of lifestyles of a structural problem.
June 22 – Financial Times (Joe Rennison): “Wall Street banks are suffering big losses on corporate bond deals signed before the last money market recession, while investors are not finding it easy to get bigger reductions and higher yields to lend to companies. When banks settle for bonds sold on behalf of companies, they set a maximum interest rate that investors can expect to get in exchange for buying the debt. . . But the markets have fallen much more than expected in 2022. . . A high-yield bond index controlled through Ice Data Services has fallen nearly 13% so far in 2022. In turn, investment banks have reduced the costs of corporate bonds in an effort to attract buyers, which has lowered their underwriting fees. Subscribed will have to come with a reduction and policyholders will have to pay for it,” said a banker at a major U. S. bank. USA
June 23: Bloomberg (Davide Scigliuzzo and Claire Ruckin): “Investment bankers in the U. S. The U. S. and European governments are bracing for billions of dollars in potential overall losses in expensive leveraged buybacks as they struggle to get rid of paltry corporate debt whose price plummets amid a large market sell-off. The biggest blow, which may amount to around $1 billion, may come from the privatization of Citrix Systems Inc. , which a lender organization led through Bank of America Corp. , Credit Suisse. . . and Goldman Sachs. . . . signed in January. . . “
June 18: Bloomberg (Benjamin Robertson and Jan-Henrik Förster): “Private equity chiefs find in history a bad consultant as they look for clues on how to overcome the turmoil in global markets. Industry leaders were in a sober mood when they piled up at the SuperReturn International convention in Berlin this week to talk about a multitude of challenges, from runaway inflation and emerging rates to Russia’s ongoing war in Ukraine and the imminent risk of recessions. currency crisis or the collapse of dot-coms or anything else,” Matt Cwiertnia, co-head of personal equity at Ares Management Corp. , told attendees. He wants to be paranoid now and get in touch early with his corporations to get them through this. “
June 18: Bloomberg (Thyagaraju Adinarayan and Sagarika Jaisinghani): “So far, 2022 has been a year in which almost everyone on Wall Street has been wrong. Just like the Fed and a global central bank framework. Last December, strategists at major investment firms such as JPMorgan. . . had predicted that the S
Russia/Ukraine watch:
June 22 – Bloomberg (Archie Hunter, Tarso Veloso and Megan Durisin): “The infrastructure belonging to two major agricultural investors broke down. Russian attacks on one of Ukraine’s largest crop-handling ports added to the developing losses suffered through its agricultural sector. Rocket A fire in the Ukrainian port city of Mykolaiv broke through a terminal belonging to agricultural trader Viterra on Wednesday, and the site is on fire, a corporate spokesman said. Bunge Ltd. also said one of its services had been attacked and that a city rescue brigade was at the site.
Monitoring of the Economic War/Iron Curtain:
June 23 – Bloomberg: “Russia said foreign sanctions created a ‘force majeure’ scenario that forced it to transfer its Eurobonds into rubles to the service to avoid non-compliance. Finance Minister Anton Siluanov compared the government’s catch 22 scenario to a “farce,” in which it has the cash and the goal of paying, but its hard currency cannot pass through the foreign deal formula because of sanctions similar to the invasion of Ukraine. foreign currency, which for us is a scenario of force majeure,” Siluanov said. . . “And it is only because of this explanation that we are moving towards ruble bills. “
June 23: Bloomberg (Arne Delfs and Vanessa Dezem): “Germany has warned that Russia’s measures to reduce the threat of herbal fuel sources in Europe cause energy markets to collapse, drawing parallels with Lehman Brothers’ role in triggering the currency crisis. With energy suppliers racking up losses by being forced to cover volumes at the highest prices, there is the threat of a domino effect for local utilities and their customers, adding consumers and businesses, Economy Minister Robert Habeck said. after posing the country’s fuel threat to the highest point. “alarm” phase. ” If that inconvenience gets so big that they can’t take it anymore, chances are the total market will collapse at some point,” Habeck said. “So, a Lehman effect on the energy system. “
Remark by China/Russia/United States:
June 18 – Fox News (Caitlin McFall): “Russian President Vladimir Putin criticized the United States in a speech from St. Petersburg on Friday, accusing Washington of believing it is the ‘messenger of God’ and warning that the global order is changing. “After signaling victory in the Cold War, the United States proclaimed itself as God’s messenger on Earth,” Putin said. “They seem to forget the fact that in recent decades new hard and assertive centers have been formed. “Western allies.
June 22 – Bloomberg: “Chinese President Xi Jinping criticized sanctions for stoking global economic pain in a speech that kicked off this year’s BRICS summit, as he seeks relations with emerging markets in the wake of tension in Western ties. Without explicitly naming the United States, Xi said the foreign network fears that the global economy will be divided into mutually exclusive zones, and called on the globals to fight against the hegemony of a single country. Politicizing, instrumentalizing and militarizing the global economy by employing a dominant position in the world monetary formula to impose sanctions without explanation why it would only harm others and oneself, leaving other people around the world suffering,” Xi said at the BRICS Business Forum.
June 19 – Reuters (Chen Aizhu): “China’s crude oil imports from Russia rose 55% from a year earlier to a record level in May, replacing Saudi Arabia as the most sensible supplier. . . Imports of Russian oil. . . They totaled almost 8. 42 million tons, according to the knowledge of the General Administration of Customs of China.
June 22: Bloomberg (Jamie Tarabay and Sarah Zheng): “A recent article shows that China is paying attention to Elon Musk’s Starlink system. . . In a paper published this spring through the Beijing Institute of Tracking and Telecommunications Technology, a researcher urges the Chinese military to track and monitor each and every satellite in the vast Starlink network. The ubiquity of satellites, their ability to provide web services, and the option for the U. S. government to provide web services. enough for Beijing to expand a way to target Starlink. . . »
Europe/Russia/China Watch:
June 21 – Financial Times (Max Seddon and Richard Milne): “Russia has threatened Lithuania with serious consequences if the Baltic country prevents it from exporting EU-authorised goods by rail to the Kaliningrad enclave. Nikolai Patrushev, secretary of Russia’s Security Council and one of President Vladimir Putin’s closest confidants, said a holiday in Kaliningrad. . . that Russia would “react to such hostile actions” after Lithuania began to apply the sanctions. Patrushev warned that “appropriate measures would be taken” in the near future, adding that “their consequences will have a serious negative influence on the Lithuanian population”. . . Russia has accused the EU of triggering a “blockade” of Kaliningrad after Lithuania, which controls the only land railway connecting the enclave to mainland Russia via Belarus, began restricting the transit of goods as part of EU sanctions over Russia’s war in Ukraine.
Inflation tracking:
June 21 – Wall Street Journal (Nicole Friedman): “The relentless rise in home values in the U. S. The U. S. economy continued in May, when the median value first exceeded $400,000, as sales activity slowed under pressure from emerging borrowing costs. The immediate rise in interest rates is having a negative effect on U. S. markets. USA. . . . But demand for home buying continues to outpace unusually low source levels and drive up values. back to 1999. . . “
June 18: Bloomberg (Sing Yee Ong): “Shortages of popular foods, from popcorn to sriracha, are taking a toll on restaurants and grocery stores this summer, a sign that the world’s massive supply chains are still under pressure. Beyond a few months, many probably random foods are incredibly expensive or exceptionally hard to find. These come with lettuce in Australia, onions and salami in Japan, and even bottled beer in Germany, forcing companies to struggle to find opportunities to feed their customers.
Oversight of the Biden administration:
June 22 – Associated Press (Josh Boak): “President Joe Biden. . . called on Congress to suspend federal taxes on gasoline and diesel for 3 months, an election-year resolution aimed at easing monetary pressures that raised doubts among many lawmakers. The Democratic president has also called on states to suspend their own gas taxes or provide similar relief, and has publicly criticized the energy industry for prioritizing profits over production. “It doesn’t relieve all the pain, but it will be a wonderful help. “”Biden said. ” I’m doing my part. I need Congress, states, and industry to do their part as well.
June 18: Bloomberg (Peter Martin and Jennifer Jacobs): “Biden management officials have to reject a new indistinct claim across China that the Taiwan Strait is not ‘international waters’ and are increasingly concerned that this position will lead to more common demanding situations at sea. for the democratically governed island, according to well-known people. . . Chinese officials have made such comments several times in meetings with their American counterparts in recent months. . . This suggests that China can prepare for a new challenge to the United States. influence and military strength in a great conflict of discord between the two countries.
Federal Reserve Oversight:
June 22 – Reuters (Ann Saphir and Lindsay Dunsmuir): “The Federal Reserve does not seek to organize a recession to avoid inflation, but is fully committed to controlling costs even if it risks causing an economic slowdown,” the U. S. chief said. A recession was “certainly a possibility. “And the events of the last few months in the world have made it more difficult to reduce inflation without causing a. . . in-store,” he said, repeating that policymakers would want to be agile in reaction to incoming data.
June 20 – Reuters (Lindsay Dunsmuir): “The U. S. Federal Reserve is not a big deal”The U. S. can temporarily raise interest rates this year and forge a ‘stellar’ economy if it can repeat the good fortune of the 1994 central bank tightening cycle,” the St. Louis, James. Bullard said. . . “This episode of hardening caused an interruption that year,” Bullard said. “However, I think it prepared the U. S. economy. none of that this time.
June 18 – Bloomberg (Catarina Saraiva): “Federal Reserve Governor Christopher Waller said he would make another rate increase of 75 basis points at the central bank’s July meeting if economic data came in as expected. “Waller said Saturday in prepared remarks.
June 23: Bloomberg (Jonnelle Marte): “Federal Reserve Governor Michelle Bowman said she supported a further interest rate hike of 75 fundamental issues in July, followed by some more than half-point increases. . . “Based on existing inflation readings, I expect an additional accumulation of 75 basis points to be adequate in our next assembly, as well as the accumulation of at least 50 basic problems in long-term assemblies, provided that incoming knowledge supports them,” Bowman said. As the economy evolves, further increases in the target diversity of the long-term federal budget rate may be required.
June 22 – Reuters (Ann Saphir): “Chicago Federal Reserve Chairman Charles Evans. . . He said he is most likely to make another steep interest rate hike in July unless knowledge of inflation improves, saying the Fed’s most sensible priority is to “reduce pressure. “”on price pressures”. Seventy-five (basis points) is a very moderate position to have a discussion,” Evans told reporters. . . “I think 75 would be in line with the strong persistent considerations that knowledge of inflation is not falling as fast as we thought. “”
June 22: Yahoo Finance (Brian Cheung): “Federal Reserve policymakers are starting to opt for a recession, as peak inflation pushes the central bank to raise interest rates at the fastest rate in decades. “Powell told the Senate Banking Committee. The tone of the update underscores the obvious fear within the Fed that the accusation of reducing inflation could be just a slowdown in economic expansion and potential job losses. expansion, Philadelphia Fed President Patrick Harker told Yahoo Finance.
American bubble clock:
June 23 – Reuters: “The number of Americans filing new claims for unemployment benefits declined last week as the hard-working market situation remained tense, some slowdown is emerging. Initial state unemployment benefit programs fell from 2,000 to 229,000 seasonally adjusted for the week ending June 18th. . . Economists polled through Reuters had forecast 227,000 applications for the following week. Applications have stalled since falling to a more than 53-year low of 166,000 in March, amid symptoms of some cooling of the labor market.
June 23: Bloomberg (Vince Golle): “Business activity in the U. S. The U. S. took a decisive step back in June, as immediate inflation reduced demand and led to an absolute contraction in factory orders and production. The Composite Purchasing Managers’ Index S
June 23 – Bloomberg (Prashant Gopal): “U. S. lending rates”The U. S. has risen again, reaching a 14-year high. The average for a 30-year loan is 5. 81%, up from 5. 78% last week, Freddie Mac said. »
June 21 – CNBC (Diana Olick): “Existing home sales in May fell 3. 4% to a seasonally adjusted annualized rate of 5. 41 million units. . . Sales decreased by 8. 6% compared to May 2021. April sales were also revised slightly downwards. This is the lowest reading since June 2020. . . There were 1. 16 million homes for sale at the end of May, a 12. 6% monthly growth, but still 4. 1% less than in May 2021. At the current rate of sales, this represents a source of 2. 6 months. The weak source continued to increase the value of the space. The median value of a home sold in May was $407,600, a 14. 8% increase from May 2021. This is the highest value ever recorded since real estate agents began tracking in the late 1980s. “
June 21: Reuters (Nathan Gomes): “The U. S. homebuilder is a big deal for the U. S. USA Lennar Corp. . . warned of a slowdown in demand for homes as rising values and rising interest rates push buyers aside, threatening the industry’s frenetic rate of earnings growth. With great caution to date, Lennar said any forecast at this point would amount to “guessing”. . . “The Fed’s stated determination of inflation through interest rate increases and quantitative tightening has begun to have the desired effect of slowing sales in some markets. and blocking value gains across the country,” lennar chief executive Stuart Miller said. »
June 20 – Bloomberg (Philip Aldrick): “Former Treasury Secretary Lawrence Summers said the U. S. unemployment rate is going to be unemployment rate in the U. S. The U. S. economy exceeded 5% over an extended period of time to curb inflation, which is advancing at the fastest rate in 4 decades. “We want five years of unemployment above 5% to imply inflation; in other words, we want two years of unemployment at 7. 5% or five years of unemployment at 6% or one year of unemployment at 10%,” Summers said. Some of the numbers are remarkably discouraging from the Federal Reserve’s perspective.
Monitoring the constant source of income bubbles:
June 21 – Bloomberg (Fola Akinnibi): “The most recent drop in U. S. municipal bonds is a big deal”The U. S. economy has led investors to flee the $4 trillion market component where they typically buy money for short-term exposure and expect periods of uncertainty. Muni’s exchange-traded budget recorded outflows of around $1. 7 billion this month, at the pace of the largest exodus since March 2020. . . »
Chinese watch:
June 22 – Bloomberg: “Chinese President Xi Jinping pledged to meet the year’s economic targets, even as the government’s zero-tolerance technique to combat covid outbreaks and the weakness of the real estate market put the purpose of expansion even further out of reach. In a keynote address at a briCS virtual business forum, Xi said China will “strengthen macro-political adjustment and adopt more effective measures to try to achieve the goals of social and economic progress by 2022 and minimize the effects of Covid-19,” according to Xinhua. account.
June 19: Bloomberg: “China is making plans for new ‘extraordinary’ policies to help downstream trading corporations that have noticed their profits being hurt by the top charge of raw materials, according to Shanghai Securities News. The Ministry of Industry and Information Technology is reading measures to design source policies, stimulate customer demand and inspire investment in technology, the newspaper said.
June 22: Bloomberg: “As global attention turns to the economic effect of the coronavirus shutdowns in Shanghai and Beijing, China’s housing market collapse is likely to have even deeper implications. An official index tracking apartment and home sales has noted year-over-year declines for 11 consecutive months, a record since China created a personal real estate market in the 1990s. With demand for facilities and raw fabrics generated through the housing and sales structure accounting for around 20% of gross domestic product, this represents a major drag on growth. . . “This is the worst real estate slowdown on record,” said Lu Ting, chief China economist at Nomura. . . The duration of the fall exceeds those of 2008 and 2014, which had an impact on world commodity markets through the reduction of Chinese demand for imported metal and copper.
June 23: Bloomberg (Lorretta Chen): “Moody’s. . . downgraded Country Garden Holdings Co. of the investment-grade territory, the latest sign of how sentiment for developers in the Chinese personal sector has deteriorated, the currency crisis and the fall in industry sales. The country’s largest automaker through sales has been downgraded a notch to Ba1, and moody’s scoring outlook is negative. The company. . . he cited Country Garden’s “declining real estate sales and deteriorating monetary parameters” as well as weakened access to long-term financing.
June 23: Bloomberg (Dorothy Ma): “China’s high-yield dollar bonds fell 0. 5 to 2 cents on the dollar on Thursday morning, according to credit traders, extending previous declines this week. Country Garden’s 6. 5% dollar bond, maturing in 2024, fell 2 cents to 61. 5 cents. . . China’s junk bills haven’t won since June 3, according to a Bloomberg index.
June 23 – Reuters (Albee Zhang, Ella Cao, Ryan Woo, Wang Jing, Josh Horwitz and Liz Lee): “Heat waves in northern and central China have pushed demand for electritown to record levels as millions of people turn on air conditioners to escape sweltering conditions, while flooding in the south submerged villages and trapped city dwellers. On Wednesday, China’s meteorological administration issued orange warnings for maximum temperatures in the regions of Shandong, Henan and Hebei provinces. have issued “red alert” maximum temperature warnings. . . Temperatures in the regions are expected to exceed 40 degrees Celsius (104 degrees Fahrenheit) this week, according to the state’s meteorologist.
Supervision of the central banker:
June 23 – Financial Times (Martin Arnold): “The heads of the central banks of France and Germany have said that costs will continue to rise for expanding businesses and households, raising the chances that inflation in the eurozone’s two largest economies will remain uncomfortably higher in the coming years. Businesses and consumers in Germany and France expect inflation to be higher than it was six months ago, according to a new study by the Bundesbank and the Bank of France, which chefs Joachim Nagel and François Villeroy de Galhau. . . they called it “disturbing” and “bad news. “
June 18 – Reuters (Balazs Koranyi): “The European Central Bank restricts em loan prices for the euro zone’s most indebted members, but it will not solve their debt problems or allow fiscal considerations to dictate economic policy,” ECB policy leader Olli Rehn said. . . . But the ECB’s action will only go so far as to avoid “unjustified” market movements and will not help countries in the event of severe economic debt disruptions, said Rehn, head of Finland’s central bank. . . “We are fully committed to except fiscal dominance, and/or economic dominance, for that matter,” Rehn said, referring to a scenario in which fiscal, not economic, considerations dictate central bank policy.
June 20 – Bloomberg (Aaron Eglitis and Alexander Weber): “The European Central Bank is in a position to combat opposing and unjustified moves in money markets, but it will also have to be in a position to face turbulence when it comes out of negative interest rates,” said Martins Kazaks, a member of the Governing Council. “If action is needed, we will be on top,” said Kazaks, governor of Latvia’s central bank. “It’s natural to see increased uncertainty and volatility. We have to live this scenario with a cool head and a hand of a company that shows in the market what our direction is. “
June 20 – Reuters (Balazs Koranyi): “The threat of a sharp correction in European money and real estate markets is high,” said European Central Bank President Christine Lagarde. . . “Risks to monetary stability have increased particularly since this year,” he said. He said. . . “Although a correction in asset costs has been ordered so far, the threat of a further and in all likelihood abrupt drop in asset costs remains serious,” he said.
June 23 – Reuters (Victoria Klesty): “Norway’s central bank raised its benchmark interest rate by 50 basis points. . . , its biggest increase since 2002 and has not ruled out further increases of this magnitude as the country pursues inflation. . . “Based on the existing assessment through the Outlook and Risk Balancing Committee, the maximum key rate will likely rise to an additional 1. 5% in August,” Gov. Ida Wolden Bache said. »
June 20: Reuters (Cynthia Kim and Jihoon Lee): “South Korea’s central bank. . . said it expects inflation to be higher than expected and would largely assess debt repayment fees to determine whether an interest rate increase of half a percentage point in July was appropriate. The Bank of Korea, which sharply raised its average annual inflation forecast for 2022 to 4. 5 percent lower than a month ago, said it did not rule out the option of inflation above the 4. 7 percent reached in 2008.
Global surveillance on bubbles and instability:
June 22 – Reuters (Julie Gordon): “Canadian client costs rose in May to rates not seen since January 1983. . . , increasing pressure on the central bank to stick to the U. S. Federal Reserve. “U. S. with an inordinate rate increase. Canada’s annual inflation rate accelerated to 7. 7% in May, surpassing April’s 6. 8% and analysts’ forecasts of 7. 4%. . . Inflation is well above the Bank of Canada’s April forecast of an average of 5. 8% consistent with this quarter.
European clock:
June 23 – Bloomberg (Alexander Weber): “The economic expansion of the euro’s dominance has slowed dramatically as rising costs have slowed the rebound of pandemic restrictions and factories have continued to suffer problems. An indicator of the economic activity of S
June 20 – New York Times (Norimitsu Onishi, Constant Méheut and Aurélien Breeden): “President Emmanuel Macron ruled like Jupiter in his first term, employing all the powers of the French executive and largely ignoring Parliament. But the opposition’s huge gains Teams in Sunday’s parliamentary elections will likely force Mr Macron to seek compromises during his current term. . . Having lost the absolute majority in the National Assembly, the shrinking and the maximum difficult space of Parliament, Mr Macron, who followed a longer term. He liked the government in his first term — and was sometimes called a “republican monarch” — he will have to cajole his coalition partners and convince opposition lawmakers, especially on the center-right.
June 23 – Reuters (Holger Hansen and Vera Eckert): “Germany has activated the ‘alarm phase’ of its emergency fuel plan. . . in reaction to falling Russian supplies, but did not allow utilities to pass on high energy prices to consumers in Europe’s largest economy. . . . We must not deceive ourselves: “The cutting off of the fuel source is an economic attack on us by. . . Putin,” economy minister Robert Habeck said. . . Gas rationing would have been avoided. from now on it cannot be ruled out, Habeck said, warning: “From now on, fuel is a scarce commodity in Germany. . . Therefore, we are now obliged to reduce fuel consumption, now already in summer. “
EM Bubble Watch:
June 18 – Wall Street Journal (Jason Douglas, Yuka Hayashi, and Chelsey Dulaney): “Slower expansion, breakneck inflation, and emerging interest rates in the United States are intensifying pressure on emerging market finances and fueling considerations about a full-blown debt crisis in the Low and Low Countries Middle-income countries Anxiety is evident in sky-high bond yields. and month-over-month capital outflows, as investors abandon assets in vulnerable countries in favor of safer returns elsewhere. Tensions that have built up since Russia’s invasion of Ukraine are worsening, as global expansion customers worsen and hopes for a quick respite from emerging inflation evaporate.
June 22 – Reuters (Marc Jones): “A developing country organization is most likely to see its credit scores come under pressure as emerging global interest rates hit their already tight finances,” warned S, one of the world’s largest scoring agencies.
Japan Clock:
June 19: Bloomberg (Masumi Suga and Sumio Ito): “Prime Minister Fumio Kishida said the Bank of Japan’s financial easing policy deserves to stay on track for now, given the negative effect a substitution would have on small businesses. Monetary policy “deserves to be judged holistically taking into account trends in the economy as a whole,” Kishida said.
Monitoring of social, political, environmental and cybersecurity instability:
June 18 – CNN (Claire Colbert and Raja Razek): “The devastating flooding that occurred along the Yellowstone River this week is a 1-in-500-year event, according to a press release from the U. S. Geological Survey. USGS. Unprecedented and immediate rains The thaw of recent days has driven rivers out of parts of Montana, Wyoming and Idaho, sinking bridges and dragging entire sections of pavement. More than 10,000 visitors to Yellowstone National Park were forced to evacuate. All entrances to the park are expected to remain closed at least through Monday.
Covid surveillance:
June 22 – Reuters (Amruta Khandekar): “Nearly one in five U. S. adults who said they had COVID-19 in the afterlife still have symptoms of prolonged COVID, according to survey data collected in the first two weeks of June, U. S. fitness officials said. USA. . . . Overall, 1 in thirteen adults in the U. S. The U. S. has prolonged COVID symptoms that last 3 months or more after first contracting the disease, and that they didn’t have before the infection. . . »
Geopolitical monitoring:
June 20 – Reuters (François Murphy): “Iran is further intensifying its uranium enrichment by preparing to use complex IR-6 centrifuges at its Underground Fordow site that can more easily transfer between enrichment levels, a United Nations nuclear monitoring report showed. The move is the latest in several steps Iran had long threatened to take, but implementation is delayed until 30 of the 35 countries on the International Atomic Energy Agency’s Board of Governors subsidized a solution this month criticizing it for failing to comply with uranium lines discovered at undeclared sites. . sites”.
June 18 – Newsweek (Thomas Kika): “Japan went on high alert earlier this week after many warships sighted south of Tokyo indicated an increased presence of Russian and Chinese forces near the country’s territory. Seven Russian warships were sighted moving south off the coast. from Japan’s northernmost island, Hokkaido, on Thursday and Friday. . . Japan’s Joint Chiefs of Staff showed that foreign ships were being monitored through Ships and Aircraft of the Maritime Self-Defense Force.
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