For decades, Chinese growth has been fueled by credit and carbon. Beijing finally seems to be serious about tackling these twin issues, but at what cost to the economy? .....»»

"This Is Completely Avoidable" - New York Hospitals Prepare For Staffing Crisis As Vaccination Mandate Forces Mass Firings With President Biden's federal vaccine mandate set to take effect on Monday, health-care systems around the country are suspending elective in-patient surgeries and refusing to accept ICU patients from other hospitals as they brace for potentially hundreds of firings of nurses and other critical staffers, potentially even doctors. According to the NYT, the Erie County Medical Center in Buffalo is planning to do all that and more, as it says it may soon fire about 400 employees who have chosen not to get the single job required by the edict (which was pushed through despite being blocked by a federal judge). Similarly, officials at Northwell Health, the state's largest health-care provider, estimate that NWH might be forced to fire thousands of people who have refused to get vaccinated. In an economy with more job openings than workers - 2.2MM more, to be exact - forcing workers to choose between employment and their health or religious compunctions simply isn't a smart idea. Without even a hint of self-awareness, the governor apparently agrees: "What is looming for Monday is completely avoidable, and there’s no excuses,” Ms. Hochul said, pleading for those who have not done so to get vaccinated," Hochul said during a weekend press briefing. But we digress. The situation is less dire in NYC, but there will still be plenty of hospitals left with massive staffing holes after mass-firings. The city's largest private hospital network, NewYork-Presbyterian, has more than 200 employees who may face termination because they haven't received at least one jab. Of course, as we have pointed out in recent posts, health-care workers are only a fraction of the worker who will be impacted by shortages across the economy. In California, nurse shortages have reached crisis levels in California, airlines are seeing flights frequently cancelled due to worker shortages. As of late September, 84% of NY's 450,000 hospital workers and 83% of nursing home workers - which number around 45,400 - remained unvaccinated.  Despite being directly threatened by their superiors, most say they're refusing the jab on religious or health grounds, or because they're allergic to certain ingredients. In an effort to scare workers into compliance, NY Gov. Kathy Hochul has threatened to find "foreign workers" to staff the Empire state's hospitals and care homes (despite the fact that vaccination rates are much lower in most of the world outside the US). She has also threatened to call in the National Guard or order a state of emergency in a plan unveiled over the weekend. NY's teachers are also facing a mandate to either get vaccinated or kiss their jobs goodbye. Roughly 10,000 public school workers, that's compared to 75K teachers and tens of thousands of other employees from custodians to paraprofessioanls. Circling back to hospitals and care homes, institutions like Northwell are being relatively parsimonious with their exemptions for religious and health reasons, But some are getting through . NY's emergency order doesn't stipulate how exactly hospitals and nursing homes should enforce it, and there's a good chance that hospitals serving communities in greater need will be forced to make exceptions. Black and Hispanic New Yorkers have gotten the jab in far lower numbers than white new Yorkers. The NYT points out in its story that some hospitals in the Bronx see unvaccinated rates among doctors and nurses reaching into double-digit territory. At St. Barnabas Hospital in the Bronx, about 12 percent of the nearly 3,000 employees had not been vaccinated as of midday on Friday, the chief medical officer, Eric Appelbaum, said in an interview. The group includes roughly 3 important doctors, and plenty of badly eed studiws Anecdotally hospitals are reporting a surge in vaccinations among hospital workers who haven't yet been vaccinated. But who knows what to believe. All we know is that we wouldn't want to be having an elective surgery or delivering a baby in NY right now. Tyler Durden Sun, 09/26/2021 - 21:00.....»»

Morgan Stanley: We Are Approaching An Inflection Point In China Policy Easing By Chetan Ahya, Chief Economist and Global Head of Economics at Morgan Stanley The past two months have seen successive waves of headlines from China, first on the broad regulatory reset and then this week’s focus on property developers facing near-term funding pressures. The policy goals of these measures are first to ensure social stability and second to make economic growth more sustainable by reducing income inequality and addressing imbalances and excesses. However, they have raised concerns about a potential rise in systemic risks and a sharper slowdown in growth. Investors’ focus has shifted from tech to the property sector, which faces challenges on two fronts. First, property developers are required to adhere to the “three red lines” – maintaining healthy liabilities-to-assets, net gearing and cash-to-short-term debt ratios – which were announced in August 2020. What we are experiencing now is a direct effect of that regulatory action, which aimed to reduce systemic risks with benchmarks to curb excessive property sector borrowing. In addition, property demand in China has slowed in the last two months, as the front-loading of mortgage lending quotas in the first half of the year has weighed on property sales, increasing headwinds for property developers. As things stand, most property developers are on track to comply with the three red lines, but a number face challenges in meeting the mandated ratios. Our China property analyst estimates that the total debt exposure of property developers is around Rmb 18.4 trillion, which is now similar to annual sales. This indicates that leverage in aggregate is manageable – hence, so is the deleveraging process. Nonetheless, the pressure to reduce leverage means that defaults in China's property sector are likely to increase. From past experience, policy-makers have mechanisms in place to prevent systemic risks. For instance, debt restructuring will take place at the holding company level of property developers in default, while operating companies remain in business and construction projects move forward. Credit committees will oversee this process, with representation from the financial regulators, the central bank and local governments. Vis-à-vis the banking system, the property risk exposure of China's banks appears manageable. Development loans totaled 6.9% of banks' total loan balances, and individual developers' loan balances are limited to 0.3% of banks' total loan balance or less. NPL formation has also dropped to multi-year lows in 1H21. In addition, the risks related to peer-to-peer consumer loans and shadow banking credits have largely been addressed over the last three years. Hence, our China financials analyst sees ample room for the domestic banking system to deal with property sector risks this year. The exposure of global investors to the China property sector as holders of the debt or global banks as lenders to the sector is relatively small, which reduces the potential for global systemic risks. While we expect the restructuring process and immediate spillovers to the financial system to be orderly, we are mindful of potential knock-on effects in the broader economy. Although inventory levels are low, the economy will see some downside pressure from weaker housing starts in the near term. The property and adjacent sectors – residential property investment, related services and downstream goods consumption – account for ~15% of China’s GDP. Our chief China economist Robin Xing estimates that a 10pp slowdown in residential property activity could exert a ~1pp drag on GDP growth. Further spillovers could take the form of a negative wealth effect: reduced private consumption, the decline in property investment weighing on fixed asset investment in other upstream manufacturing sectors, and the impact on property sector employment exacerbating weaker consumption. These spillover effects are creating downward pressure on growth at the same time that production cuts to meet energy intensity targets are weighing on growth, the regulatory reset is weighing on corporate sentiment and consumption is softening because of intermittent Covid-related restrictions. We therefore see a risk that spillovers from the property sector would keep 4Q21 growth below 5% on a 2Y CAGR basis. This is a low starting point relative to next year’s growth target of 5.5%. Moreover, a sharper growth slowdown could increase the risk of a material impact on the labour market, which would run counter to the policy objective of ensuring social stability. It is in this context that we expect policy-makers to manage the process and pace of adjustment while providing meaningful countercyclical easing, just as they did in 2H15, 4Q18 and 2H19. Indeed, we think that we are approaching an inflection point in policy easing. Further measures in the pipeline include: faster fiscal spending to support infrastructure projects in September-December; another 50bp RRR cut in mid-to-late October; some easing of mortgage quotas and fine-tuning of production cuts to meet energy intensity targets in 4Q21; and front-loading of loan quotas and local government special bonds in January-February 2022. In the coming weeks, we will be watching for (1) communication from policy-makers on the details of the restructuring plan for property developers, and (2) policy easing signals and announcements. Tyler Durden Sun, 09/26/2021 - 22:00.....»»

Power Supply Shock Looms: "Global Markets Will Feel The Pinch Very Soon" Of China's Next Crisis Distracted by the 'grandness' of the collapse of China's property development market, many have missed the fact that China faces a crisis that could directly hit Asia's economy just as hard as a financial collapse - a nationwide power supply shock. After ramping up its coal-based power production earlier in the year, it appears Beijing has suddenly grown a conscience over its emissions and the 'average joe' could be about to feel the pain of that decision. Climate change facts: Chinese CO2 emissions are more than double those of the US, and greater than US and EU combined. pic.twitter.com/ZpJCoPaUjB — zerohedge (@zerohedge) October 6, 2020 As Bloomberg reports, the crackdown on power consumption is being driven by rising demand for electricity and surging coal and gas prices as well as strict targets from Beijing to cut emissions. It’s coming first to the country’s mammoth manufacturing industries: from aluminum smelters to textiles producers and soybean processing plants, factories are being ordered to curb activity or - in some instances - shut altogether. "With market attention now laser-focused on Evergrande and Beijing’s unprecedented curbs on the property sector, another major supply-side shock may have been underestimated or even missed,” Nomura Holding Inc. analysts including Ting Lu warned in a note, predicting China’s economy will shrink this quarter. As a reminder, China pollutes more than the US and all developed countries combined... More problematic for Greta and her pals, between the years 2000 and 2020, the amount of electricity generated by burning coal increased more than four-fold in China, hitting around 4,600 terrawatt hours in the past year. You will find more infographics at Statista As the scene below suggests, this is not the first time China has faced winter power demand surges (which prompted many to turn to diesel generators to plug the shortages of power from the electricity grid). However, this year is different. The danger is that, as Zeng Hao, chief expert at consultancy Shanxi Jinzheng Energy, warns: government policies will significantly limit the energy industry’s potential to increase production to meet the demand increase. 2021's worsening power crunch in China reflects three specific factors: 1) Extremely tight energy supply globally (that's already seen chaos engulf markets in Europe); 2) The economic rebound from COVID lockdowns that has boosted demand from households and businesses (as lower investment by miners and drillers constrains production); and 3) President Xi Jinping tries to ensure blue skies at the Winter Olympics in Beijing next February (showing the international community for the first time that he's serious about de-carbonizing the economy). Simply put, it is the third factor - which is all of its own making - that has raised the risk of a severe shortage of coal and gas - used to heat homes and power factories - this winter; and more ominously, expectations of the need to ration power to those deemed worthy. “The power curbs will ripple through and impact global markets,” Nomura’s Ting said. “Very soon the global markets will feel the pinch of a shortage of supply from textiles, toys to machine parts.” As we noted earlier in the year, China needs to shutter 600 coal plants to meet its emissions goals of net zero greenhouse emissions by 2060. If Xi's recent actions in the interests of "common prosperity" are really about forestalling social unrest, we suspect his commitment to meeting self-imposed carbon emissions targets may quickly evaporate as the Chinese people are unlikely to stand sustained black-outs for long without upheaval. Tyler Durden Sun, 09/26/2021 - 20:30.....»»

For decades, Chinese growth has been fueled by credit and carbon. Beijing finally seems to be serious about tackling these twin issues, but at what cost to the economy? .....»»

Elon Musk's collaborative tone about data security came despite China's richest tech titans being hurt by Beijing's regulatory crackdown. China is one of the most lucrative markets for Tesla. Luo Yunfei/China News Service via Getty Images Tesla is glad to see new data-security laws, Elon Musk said at China's World Internet Conference. "Data security is key to the success of intelligent and connected vehicles," he said on Sunday. Musk's collaborative tone came despite China's richest tech titans dealing with huge losses. See more stories on Insider's business page. Tesla is glad to see new laws relating to strengthening of data management, Elon Musk said at China's World Internet Conference on Sunday.Musk didn't specify that his remarks related to China's strict data protection law, but said Tesla's data centre in the country localizes all data generated for business there.Beijing has been moving to tighten regulation for several months to rein in the power of Big Tech.The nation's Personal Information Protection Law, set to be implemented on November 1, lays out rules around better user data storage and conditions under which companies can gather data, including obtaining prior consent."Data security is key to the success of intelligent and connected vehicles," Musk said in prepared remarks to the summit. "And it's not only closely linked to an individual's interests, but also matters to the whole society.""At Tesla, we are glad to see a number of laws and regulations that have been released to strengthen data management," he said."All personally identifiable information is securely stored in China without being transferred overseas," he said, referring to the company's handling of data. "Only in very rare cases, for example, spare parts, order for overseas is data approved for transfer internationally."He added that he believed data protection was not only an issue of one single company and should be a mutual effort for all industry players. "We're working with regulators on finding the best solution for data security," he said.China is one of the most lucrative markets for Tesla, contributing 30% of total sales for the EV maker in the second quarter this year. At Sunday's summit, China's Vice-Premier Liu said President Xi Jinping has promised to work with countries around the world to shape a vibrant digital economy and build on effective supervision.Other US business leaders that participated via video in the event were the recently appointed CEOs of Intel and Qualcomm, Pat Gelsinger and Cristiano Amon.Musk's collaborative tone came despite the rough patch that the tech sector in China is enduring. The country's richest tech titans, including Jack Ma and Pinduoduo's Colin Huang, have had billions wiped off their personal wealth as a result of investors reacting to Beijing's strict new rules.Read the original article on Business Insider.....»»

American did a great job of getting me to Madrid on time but the flight was far from memorable. One thing I didn't miss was the bad airplane food. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider American Airlines is one of four US carriers flying overseas to Europe and has recently started increasing services as more countries open to American tourists. Transatlantic flights are pretty much back to normal, besides having to wear a mask. Hot meals and alcohol are once again served in all cabins including economy class. See more stories on Insider's business page. American Airlines is one of the leading US carriers flying between the US and Europe, especially from its international gateway in New York. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider The summer before the pandemic saw American fly to 23 European destinations from the US. Fast forward to the summer of 2021, however, and that number stood at 11 as American wasn't as quick to rebuild in Europe following its reopening. Flying American Airlines to Europe during the pandemic. Thomas Pallini/Insider Source: Cirium But even still, American has maintained service to core cities like London; Madrid; and Rome, while opening new routes including New York-Athens. Athens, Greece. Shutterstock Read More: American and JetBlue just unveiled a new partnership with 33 new routes combined— here's what it means for travelers And American has proved to be an inexpensive option when crossing the pond, as I found when planning a recent work trip to Doha, Qatar with flights on American, British Airways, and Qatar Airways. Flying American Airlines to Europe during the pandemic. Thomas Pallini/Insider Read More: Gulfstream just debuted its new $75 million ultra-long-range plane that's also the world's largest purpose-built private jet: Meet the G700 I flew American Airlines from New York to Madrid during the summer of vaccinated travel. Here's what it was like. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Read More: I booked a flight on American Airlines despite the airline canceling thousands of flights this summer – here's how I'm preparing for the worst After recent bad experiences on American, I was a bit nervous to fly the carrier overseas. I made sure to do extra research on backup options in case something went wrong, and even arrived at the airport four hours early. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Read More: I was stranded in Bogotá airport for 10 hours and it taught me the true value of credit card perks and not taking no for an answer But having flown American internationally earlier in the summer, I knew how to prepare. The first step was to download Verifly, American's preferred health passport service that speeds along airport check-in and document verification. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I submitted all my required documentation and got the green light. As a result, check-in at the airport was less painful than expected as I was able to use a self-serve kiosk to get my boarding pass. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider For those checking a bag, though, there was a bit of a line, as is usually the case in international terminals. I was glad to have only brought a carry-on. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I was instantly relieved once I had my boarding pass and headed straight to the gate with only a minimal line at security. I felt silly having arrived four hours before departure but as the old saying goes, better safe than sorry. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider One benefit of flying out of American's Terminal 8 at John F. Kennedy International Airport is that Bobby Van's Steakhouse is open, and Priority Pass members through Chase can get a free meal. I had the burger and it was delicious. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Read More: I used a credit perk to dine for nearly free at an airport restaurant and it's my new favorite travel hack The rest of the concourse was quiet as I arrived before the bulk of the evening overseas departures. Even still, there were shops and restaurants open for business in a good sign for the industry. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I headed straight to the gate after lunch and got my first glimpse at the aircraft taking us to Spain, the mighty Boeing 777-200. American now only flies Boeing 777 aircraft between New York and Europe in a win for business class and first class customers that get to enjoy the airline's best premium cabin products. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Pandemic-era safety measures including social distancing floor placards and plexiglass portions at the gate counter were still on display. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Boarding began around 45 minutes prior to departure in American's standard group boarding procedure. Most US airlines have abandoned back-to-front boarding. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider American's Boeing 777-200 aircraft seat 273 passengers across three cabins, with classes of service including business, premium economy, and economy. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Source: SeatGuru In economy, seats are arranged in a 10-abreast, 3-4-3 configuration that's standard for most airlines flying the 777. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Seat pitch in economy is between 31 and 32 inches, according to SeatGuru, while seat width is a standard 17 inches. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Source: SeatGuru I booked this flight quite late and there weren't too many seats from which to choose that didn't require paying an extra fee. American isn't alone in the practice of charging for advance seat assignments on long-haul flights but I despise the practice as these tickets are expensive enough as it is. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider But to American's credit, there were a good showing of complimentary aisle and window seats towards the back of the plane from which to select. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider And to my surprise, the most unique seats in economy were available for selection. The last three rows on this aircraft are arranged in a 2-4-2 configuration meaning there are six two-seat pairs. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I thought I had lucked out by selecting one of them but my excitement was short-lived. Simply put, these seats were not the most comfortable for a larger traveler. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider The small width didn't help and I felt like I was taking up part of the seat next to me. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider One thing that could've helped was if the armrest for the window seat was moveable, but it was fixed in place. I was so close to the seat in front of me that my tray table couldn't even lay flat (a problem I didn't have on the other carriers on which I flew during this trip). Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider My top concern was having enough room once my seat neighbor arrived. But I lucked out and had both seats to myself as nobody showed up to claim the other. Flying American Airlines to Europe during the pandemic. Thomas Pallini/Insider There was a gap between the seat and the cabin wall which offered some additional legroom and a place to store the pillow and blanket kit left on the seat. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider American is quite generous with seat features on its wide-body aircraft. Each seat has an 8.9-inch in-flight entertainment screen with a variety of movies, television shows, games, and music. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider The moving map proved handy during the flight to keep track of our location. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider A tethered remote is also available to control the system and act as a game controller or keyboard for the seat-to-seat chat function. It also comes in handy when scrolling through content since the touch functionality is quite poor in that regard. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider In-flight WiFi is also available on the aircraft for a price. And for those using devices during the flight, in-seat power is offered through USB charging ports and 110v C power outlets at seats. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider The rest of the aircraft was quite full, which surprised me as it was quite late in the season for transatlantic travel. Some passengers were visiting family and friends while others were starting their study abroad term. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Bad weather in New York wreaked a bit of havoc on the airport but we weren't overly affected. I was quite relieved that our departure was pretty close to on time as I had a connection to make in Madrid. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider The storm did, however, make for some great views as we blasted out of New York. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Madrid is quite a short flight from New York and while I wanted to go straight to sleep, I did want to see what the meal service was like. This was the first time I'd had a hot meal on American during the pandemic. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider As I waited for the service to begin, I had a look at what was on offer in the movie department. American had quite a good selection in all categories, and I ultimately picked "The Vault." Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider First attendants started the drink service first with a selection of soft drinks, juices, wine, and beer. Alcohol isn't currently served in economy on American's domestic flights but it flows freely on transatlantic hops. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I ordered a club soda along with some red wine to help ease my sleep after the meal. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Next came the meal service as flight attendants quickly passed out the trays. I felt like I was being served in a cafeteria as one flight attendant curtly asked, "chicken or pasta?" Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I unwrapped the entree to find that not much has changed at all when it comes to American's economy catering. The chicken dish was accompanied by a side salad, cheese and crackers, and a cinnamon dessert bar. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I couldn't describe the chicken beyond that it was served in a tomato-based sauce. I enjoyed the sides more than the main and was glad I had the burger at Bobby Van's before the flight. Next time, I think I'll head straight to sleep. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Flight attendants were very quick to complete the meal service, though, and got it done in under an hour and a half. The flight to Madrid is only six hours and 30 minutes so every second counts. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Ready for bed with a full stomach, I used the pillow and blanket that American had left on the seat and did my best to get comfortable. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Another downside of the two-seat row is that there's a gap between the seat and window, making propping a pillow up against the cabin wall near-impossible. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider But even then, it wasn't too difficult to get to sleep and I woke just before breakfast was served. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Flight attendants once more came around to serve drinks first, followed by a pre-packaged cold breakfast. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider On offer for the optimistic morning meal included Chobani strawberry yogurt, a raspberry fig bar, and coconut cashew granola. All in all, it was quite standard but still enjoyable. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider The flight to Madrid was nearing its end and I can't say I was upset to see it go. American did a great job of getting me to Spain on time but the in-flight experience was exactly what I expected it to be. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider I did appreciate the modernity of the aircraft and the efficiency of the crew but there wasn't anything memorable about this flight. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Besides having to wear a mask, though, I'd say that American is back to normal on these flights, for better or worse. Flying American Airlines from New York to Madrid, Spain during the pandemic. Thomas Pallini/Insider Read the original article on Business Insider.....»»

Elon Musk's collaborative tone about data security came despite China's richest tech titans being hurt by Beijing's regulatory crackdown. China is one of the most lucrative markets for Tesla. Luo Yunfei/China News Service via Getty Images Tesla is glad to see new data-security laws, Elon Musk said at China's World Internet Conference. "Data security is key to the success of intelligent and connected vehicles," he said on Sunday. Musk's collaborative tone came despite China's richest tech titans dealing with huge losses. See more stories on Insider's business page. Tesla is glad to see new laws relating to strengthening of data management, Elon Musk said at China's World Internet Conference on Sunday.Musk didn't specify that his remarks related to China's strict data protection law, but said Tesla's data centre in the country localizes all data generated for business there.Beijing has been moving to tighten regulation for several months to rein in the power of big tech.The nation's Personal Information Protection Law, set to be implemented on November 1, lays out a set of rules around better storage of user data and conditions under which companies can gather data, including obtaining prior consent."Data security is key to the success of intelligent and connected vehicles," Musk said in prepared remarks to the summit. "And it's not only closely linked to an individual's interests, but also matters to the whole society.""At Tesla, we are glad to see a number of laws and regulations that have been released to strengthen data management," he said."All personally identifiable information is securely stored in China without being transferred overseas," he said, about the company's handling of data. "Only in very rare cases, for example, spare parts, order for overseas is data approved for transfer internationally."He added that he believed data protection was not only an issue of one single company and should be a mutual effort for all industry players. "We're working with regulators on finding the best solution for data security," he said.China is one of the most lucrative markets for Tesla, contributing 30% of total sales for the EV maker in the second quarter this year. At Sunday's summit, China's Vice-Premier Liu said President Xi Jinping has promised to work with countries around the world to shape a vibrant digital economy and build on effective supervision.Other US business leaders that participated via video in the event were the recently appointed CEOs of Intel and Qualcomm, Pat Gelsinger and Cristiano Amon.Musk's collaborative tone came despite the rough patch that the tech sector in China is enduring. The country's richest tech titans, including Jack Ma and Pinduoduo's Colin Huang, have had billions wiped off their personal wealth as a result of investors reacting to Beijing's strict new rules.Read the original article on Business Insider.....»»

The recovering U.S. economy and progress in coronavirus vaccine rollout are expected to increasingly drive investors toward the consumer discretionary sector. Wall Street is seeing some strength amid September’s dull performance so far. The easing of China’s property market-related tensions and the absence of any hint on an immediate move to taper the bond purchasing program and keeping the benchmark interest rates unchanged have been supporting the market rally.Investors are still on the edge with concerns over the rising inflationary levels, possibilities of a tax hike and spike in coronavirus cases. Amid the current market environment, investors looking to rake in some good returns can consider the consumer discretionary sector.The U.S. consumer sentiment marginally improved despite the rising concerns about the surging coronavirus cases and the rising inflationary levels. The University of Michigan’s preliminary consumer sentiment inched up to 71 in September from 70.3 last month, per a BloombergQuint article.The strength in consumer sentiment can be the major driving force behind the solid performance by the consumer discretionary space as consumers are expected to splurge this holiday season after being restricted for more than a year.The latest retail sales data has surprised investors pleasantly. The metric inched up 0.7% sequentially in August 2021 against market expectations of a 0.8% decline, per a CNBC article. Online retail sales rose 5.3% last month after dropping 4.6% in July, per the Reuters article. There was an increase in clothing sales as well as that of building material and furniture in the previous month.According to Mastercard SpendingPulse,  U.S. retail sales — excluding automotive and gas — for the “75 Days of Christmas” spanning from Oct 11 to Dec 24 are anticipated to increase 6.8% from the year-earlier tally.The progress in coronavirus vaccine rollout is presenting a strong case in favor of a faster return to normalcy and economic recovery. The FDA has approved emergency use of a booster dose of the Pfizer Inc. (PFE) and BioNTech SE (BNTX) COVID-19 vaccine. President Joe Biden has also outlined a very effective plan to accelerate the vaccination rate and control the coronavirus outbreak. He has made it mandatory for federal employees to get the COVID-19 vaccination, per a CNBC article. The Biden government will also issue guidelines to the Labor Department for imposing vaccine mandates for employers with more than 100 employees or run weekly tests.The United States will likely relax travel restrictions for international visitors who are vaccinated against COVID-19 in November, including those from the U.K. and EU, the White House said recently, per a CNBC article. Foreigners visiting the United States will have to present a vaccination proof and a negative COVID-19 test taken within three days of departure.  The latest White House announcement came post the peak summer travel season, which signals at strong holiday travel demand.Notably, a number of restaurants and retailers that have resumed business after restrictions were relaxed in the United States should see some accelerated demand and footfall. Also, the leisure and entertainment space should see a rebound as casinos and amusement parks have started welcoming visitors.ETFs to ConsiderAlong with the other favorable factors as mentioned above, the moderate improvement in consumer sentiment is likely to boost the consumer discretionary sector. Below, we have highlighted the four most popular ones that target the broader consumer discretionary sector (see all Consumer Discretionary ETFs):The Consumer Discretionary Select Sector SPDR Fund XLYThis is the largest and most popular product in the consumer discretionary space, with AUM of $20.08 billion. It tracks the Consumer Discretionary Select Sector Index. The fund charges 12 basis points (bps) in fees per year and carries a Zacks ETF Rank #2 (Buy), with a Medium-risk outlook (read: Will ETFs Gain as US Consumer Sentiment Improves in September?).Vanguard Consumer Discretionary ETF VCRThis fund currently follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. VCR charges investors 10 bps in annual fees. The product has managed $6.54 billion in its asset base and carries a Zacks ETF Rank #1 (Strong Buy), with a Medium-risk outlook (read: ETF Areas to Gain From the Upcoming Holiday Shopping Season).First Trust Consumer Discretionary AlphaDEX Fund FXDThis fund tracks the StrataQuant Consumer Discretionary Index, which employs the AlphaDEX stock-selection methodology to select stocks from the Russell 1000 Index. FXD has AUM of $1.97 billion. It charges 63 bps in annual fees and has a Zacks ETF Rank #3 (Hold), with a Medium-risk outlook.Fidelity MSCI Consumer Discretionary Index ETF FDISThis fund tracks the MSCI USA IMI Consumer Discretionary Index. The product has amassed $1.60 billion in its asset base. It charges 8 bps in annual fees from investors and carries a Zacks ETF Rank #2, with a Medium-risk outlook. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. You know this company from its past glory days, but few would expect that it's poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks' Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Consumer Discretionary Select Sector SPDR ETF (XLY): ETF Research Reports Vanguard Consumer Discretionary ETF (VCR): ETF Research Reports Fidelity MSCI Consumer Discretionary Index ETF (FDIS): ETF Research Reports First Trust Consumer Discretionary AlphaDEX ETF (FXD): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research.....»»

"Changes In Markets Happen Slowly... Then All At Once" Authored by Lance Roberts via RealInvestmentAdvice.com, Correction Is Over As Bulls Jump Back Into The “Risk Pool.” As noted last week, retail investors didn’t step in right away to buy the dip at the 50-dma. However, they did show up on Monday afternoon and continued to buy through the rest of the week. “With the market very oversold, a counter-trend bounce next week will not be a surprise. However, if the market fails to hold the 50-dma, the risk of a more substantial correction is likely.” Notably, two essential things occurred this week. The market regained its 50-dma and triggered our RIAPRO Money Flow “buy” signal. Both suggest that bulls have regained control, and we could see some follow-through buying next week. Over the past several weeks, in various forms, we discussed our reduction in risk by rebalancing equities, raising cash, and extending our duration in our bond portfolio. To wit: “With volatility currently at the lows of its recent range, a pick-up in volatility would not be surprising. Over the last 6-months, corrections remain range-bound to the 50-dma which is currently 3% lower than closing levels. While such a decline is well within the norms of a correction in any given market year, the low levels of volatility will make it ‘feel’ worse than it is. With money flows continuing to weaken and technical indicators setting up to produce sell signals, we reduced exposure a bit more this week by increasing cash and reducing our financial holdings. “ – August 13th. With the markets now deeply oversold on a short-term basis, we deployed some of our cash throughout the week to rebalance the portfolio toward normal allocation levels. We don’t expect a tremendous amount of upside, given the ongoing weakness of market internals, but a retest of previous highs is not out of the question. Particularly since the Fed “threaded the needle.” The Fed Threads The Needle On Taper For weeks now, the Fed has been prepping the market for “taper talk.” Stocks sold off a bit in anticipation of the announcement, effectively “pricing in” a mildly hawkish stance. Jerome Powell did not fail to deliver during his press conference by announcing taper with no timeline. With respect to progress towards taper, Powell commented, “In my own thinking, the test is all but met”. “I think if the economy continues to progress broadly in line with expectations and the overall situation is appropriate for this, we could easily move ahead [with taper] by next meeting, or not…” Again, with respect to a decision for November taper, “I don’t need to see a good employment report next month; I just need to see a decent employment report”. Powell is clearly signaling that Fed is likely to announce taper in November barring an unexpected deterioration in economic conditions. Powell commented that it may be appropriate for taper to conclude by mid-2022. As expected, Powell left a back door open in case taper doesn’t go over well. “If necessary, we can accelerate or decelerate the taper”. As we noted in our Daily Market Commentary (subscribe for pre-market delivery): “The Fed has done a decent job of telegraphing when tapering is likely to begin (most market participants believe the announcement will come this year), but more importantly it’s because the asset purchase reductions are likely to be trivial when seen in the context of how large the fixed income markets are today, and how overwhelming the demand for income has become.” – Rick Rieder, BlackRock’s CIO of Global Fixed Income From the market’s perspective, a $15 billion reduction in purchases says the Fed isn’t removing the “punch bowl.” However, as shown in the table below, taper becomes an issue in 2022. 3 Signs Of The Next Bear Market I previously warned that during the subsequent 5% correction, it would “feel” much worse than it was. However, gauging by the number of emails asking about the “crash,” why we weren’t heavily short the market, and we were crazy for “buying” the recent lows, it is clear sentiment has gotten extremely negative. The question I received the most was, “Is this the beginning of a bear market?” The answer is “no.” Currently, bullish sentiment remains high, global liquidity flows are strong, and stock buybacks are at a record. While those issues are supportive of stocks currently, they are also dependent on rising asset prices. So, for investors, there are 3-signs that will signal the next bear market or recession is approaching, requiring a more defensive investment posture. 1. Yield Curve Inversion (Not Yet) The yield curve is one of the most important indicators for determining when a recession, and a subsequent bear market, approaches. The chart below shows the percentage of yield curves that invert out of 10-possible combinations. At the moment, given there are no inversions, there is no immediate risk of a recession or “bear market. “ Historically speaking, from the time yield curves begin to invert, the span to the next recession runs roughly 9-months. However, note that yield curves are currently declining, suggesting economic growth will weaken. If this trend continues, another “inversion” would not be a surprise. Given the strong track record of predicting recessions historically, when the subsequent inversion occurs, the media will quickly dismiss it just as they did in 2019. Such would not be a wise thing to do. 2. Fed Taper (Coming) The issue of “tapering” is not as much about the Fed’s actual reduction of bond purchases as it is about psychology. “The key to navigating Quantitative Easing and Fed policy in general is to recognize that their effect on the stock market relies almost entirely on speculative investor psychology. As long as investors get inclined to speculate, they treat zero-interest money as an inferior asset, and they will chase any asset with a yield above zero (or a past record of positive returns). Valuation doesn’t matter because investors psychologically rule out the possibility of price declines in the first place.” – John Hussman In other words, “QE” is a mental formation. Therefore, the only thing that alters the effectiveness of the Fed’s monetary policy is investor psychology itself. As shown, there is a very high correlation between the expansion of the Fed’s balance sheet and asset price increases. Whether the correlation is due to liquidity moving into assets through leverage or just the “psychology” of the “Fed Put,” the result is the same. Therefore, it should also not be surprising that when the Fed starts “tapering” their bond purchases, the market tends to witness increased volatility. The grey shaded bars in the chart below show when the balance sheet is either flat or contracting. Notably, the period from the initial tapering of assets and a market correction is almost immediate. So far, the Fed is only TALKING about taper. November, however, could be a different story. 3. Fed Rate Hikes (Not Yet) The risk of a market correction rises further when the Fed is tapering its balance sheet and increasing the overnight lending rate. Currently, there is no expectation for rate hikes until late 2022. What we now know, after more than a decade of experience, is that when the Fed starts to slow or drain its monetary liquidity, the clock starts ticking to the next corrective cycle. Once the Fed begins to hike interest rates, market corrections occur quickly, generally within 2-4 quarters. However, recessions and bear markets typically take longer and have been extended due to ongoing interventions. Recent history has moved the median time frame between the first rate hike and the onset of a recession to somewhere between 24 and 36 months. Investors have several primary indicators to follow to navigate market risk and potential bear markets. While there is currently no indication of a recession or bear market, the Fed starting to “taper” its asset purchases will increase volatility. Once the Fed begins to hike rates or yield curves start to invert, the time to become much more defensive will become evident. However, such could all change quickly with the introduction of an exogenous event. In the meantime, remain invested but don’t be lulled into complacency. Changes in markets always happen slowly, then all at once. Tyler Durden Sun, 09/26/2021 - 10:00.....»»

The 'Great Game' Moves On Authored by Alasdair Macleod via GoldMoney.com, Following America’s withdrawal from Afghanistan, her focus has switched to the Pacific with the establishment of a joint Australian and UK naval partnership. The founder of modern geopolitical theory, Halford Mackinder, had something to say about this in his last paper, written for the Council on Foreign Relations in 1943. Mackinder anticipated this development, though the actors and their roles at that time were different. In particular, he foresaw the economic emergence of China and India and the importance of the Pacific region. This article discusses the current situation in Mackinder’s context, taking in the consequences of green energy, the importance of trade in the Pacific region, and China’s current deflationary strategy relative to that of declining western powers aggressively pursuing asset inflation. There is little doubt that the world is rebalancing as Mackinder described nearly eighty years ago. To appreciate it we must look beyond the West’s current economic and monetary difficulties and the loss of its hegemony over Asia, and particularly note the improving conditions of the Asia’s most populous nations. Introduction Following NATO’s defeat in the heart of Asia, and with Afghanistan now under the Taliban’s rule, the Chinese/Russian axis now controls the Asian continental mass. Asian nations not directly related to its joint hegemony (not being members, associates, or dialog partners of the Shanghai Cooperation Organisation) are increasingly dependent upon it for trade and technology. Sub-Saharan Africa is in its sphere of influence. The reality for America is that the total population in or associated with the SCO is 57% of the world population. And America’s grip on its European allies is slipping. NATO itself has become less relevant, with Turkey drawn towards the rival Asian axis, and its EU members are compromised through trading and energy links with Russia and China. Furthermore, France is pushing the EU towards establishing its own army independent of US-led NATO — quite what its role will be, other than political puffery for France is a mystery. It is against this background that three of the Five Eyes intelligence partnership have formed AUKUS – standing for Australia, UK, and US — and its first agreement is to give Australia a nuclear submarine capability to strengthen the partnership’s naval power in the Pacific. Other capabilities, chiefly aimed at containing the Chinese threat to Taiwan and other allies in the Pacific Ocean, will surely emerge in due course. The other two Five Eyes, Canada and New Zealand, appear to be less keen to confront China. But perhaps they will also have less obvious roles in due course beyond pure intelligence gathering. The US, under President Trump, had failed to contain China’s increasing economic dominance and its rapidly developing technological challenge to American supremacy. Trump’s one success was to peel off the UK from its Cameron/Osbourne policy of strengthening trade and financial ties with China by threatening the UK’s important role in its intelligence partnership with the US. For the UK, the challenge came at a critical time. Brexit had happened, and the UK needed global partners for its future trade and geopolitical strategies, the latter needed to cement its re-emergence onto the world stage following Brexit. Trump held out the carrot of a fast-tracked US/UK trade deal. The Swiss alternative of neutrality in international affairs is not in the UK’s DNA, so realistically the decision was a no-brainer: the UK had to recommit itself entirely to the Anglo-Saxon Five-Eyes partnership with the US, Canada, Australia, and New Zealand and turn its back on China. But gathering intelligence and building naval power in the Pacific won’t defeat the Chinese. All simulations show that the US, with or without AUKUS, cannot win a military conflict against China. But AUKUS is not a formal model on NATO lines which commits its members by treaty to aggression against a common enemy. While Taiwan remains a specific problem, the objective is almost certainly to discourage China from territorial expansion and protect and give other Pacific nations on the Asian periphery the security to be independent from the SCO behemoth. The trade benefits of closer relationships with these independent nations are also an additional reason for the UK to join the CPTPP — the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. It qualifies for membership through its sovereignty over the Pitcairn Islands. And that is why China has also applied to join. Therefore, AUKUS’s importance is in the signal sent to China and the whole Pacific region, following the abandonment of land-based operations in the Middle East and Afghanistan. The maritime threat to China is a line which must not be crossed. We are entering a new era in the Great Game, where the objective has changed from dominance to containment. Having lost its position of ultimate control in the Eurasian land mass America has selected its partners to retain control over the high seas. And the UK has found a new geopolitical purpose, re-establishing a global role now that it is independent from the EU. The French cannot join the CPTPP being bound into the common trade policies of the EU. Seeing the British escape the strictures of the EU and rapidly obtain more global influence than France could dream of has touched a raw nerve. Mackinder vindicated The father of geopolitics, Halford Mackinder, is frequently quoted and his theories are still relevant to the current situation. Much has been written about Mackinder’s prophecies. His concept of the World Island was first mentioned in his 1904 presentation to the Royal Geographic Society in London: “a pivot state, resulting in its expansion over the marginal lands of Euro-Asia”. In 1943 he updated his views in an article for the Council on Foreign Relations, adding to his heartland theory. Written during the Second World War, his commentary reflected the combatants and their positions at that time. But despite this, he made a perceptive comment relative to the situation today and AUKUS: “Were the Chinese for instance organised by the Japanese to overthrow the Russian Empire and conquer its territory they might constitute the yellow peril to the world’s freedom just because they would add an oceanic frontage to the resources of the great continent.” When Mackinder wrote his article the Japanese had already invaded Manchuria, but their subsequent defeat removed them from an active geopolitical role, and in place of a Soviet defeat China has entered a peaceful partnership with Russia that extends to all its old Central Asian soviet satellites. It is the focus on the ocean frontage that matters, upon which the maritime silk road depends. The article brings into play another aspect mentioned by Mackinder, and that is the Heartland’s tremendous natural resources, “…including enough coal in the Kuznetsk and Krasnoyarsk basins capable of supplying the requirements of the whole world for 300 years”. And: “In 1938 Russia produced more of the following food stuffs than any other country in the world: wheat, barley, oats, rye, and sugar beets. More manganese was produced in Russia than in any other country. It was bracketed with United States in the first place as regards iron and it stood second place in production of petroleum”. Through its partnership with Russia all these latent resources are available to the Chinese and Russian partnership. And the real potential for industrialisation, held back by communism and now by Russian corruption, has barely commenced. After presciently noting that one day the Sahara may become the trap for capturing direct power from the sun (foreseeing solar panels), Mackinder’s article ended on an optimistic note: “A thousand million people of ancient oriental civilisation inhabit the monsoon lands of India and China [today 3 billion, including Pakistan]. They must grow to prosperity in the same years in which Germany and Japan are being tamed to civilisation. They will then balance that other thousand million who live between the Missouri and the Yenisei [i.e., Central and Eastern America, Britain, Europe and Russia beyond the Urals]. A balanced globe of human beings and happy because balanced and thus free.” Both China and now India are rapidly industrialising, becoming part of a balanced globe of humanity. While the West tries to hang on to what it has got rather than progressing, China and India along with all of under-developed Asia are moving rapidly in the direction of individual freedom of economic choice and improvements in living conditions, to which Mackinder was referring. Obviously, there is some way for this process yet to go, displacing western hegemony in the process. America particularly has found the political challenges of change difficult, with its deep state unable to come to terms easily with the implications for its military and economic power. We must hope that Mackinder was right, and the shift of economic power is best to be regarded as the pains of geopolitical evolution rather than conditions for escalating conflict. But in pursuing its green agenda and eschewing carbon fuels, the West is unwittingly handing a gift to Mackinder’s Heartland, because despite diplomatic noises to the contrary China, India and all the SCO membership will continue to use cheap coal, gas, and oil which Asia has in abundance while Western manufacturers are forced by their governments to use expensive and less reliable green energy. Green obsessions and global trade Meanwhile, the West has gone green-crazy. Banning fossil fuels without there being adequate replacements must be a new definition of insanity, for which the current fuel crises in Europe attest. With over 95% of European logistics currently being shifted by diesel power, switching to battery power or hydrogen by 2030 by banning sales of new internal combustion engine vehicles is a hostage to fortune. While it is hardly mentioned, presumably the Western powers think that by banning carbon fuels they will take the wind out of Russia’s energy quasi-monopoly, because including gas Russia is the largest exporter of fossil fuels in the world. Instead, the West is creating an energy shortage for itself, a point driven home by Gazprom withholding gas flows through its pipelines to Europe, thereby driving up Europe’s energy costs sharply and ensuring a far more severe energy crisis this winter. Even if Russia turns on the taps tomorrow, there is insufficient gas storage in reserve for the winter months. And Europe and the UK have got ahead of themselves by decommissioning coal and gas-fired electricity. In the UK, a massive undersea gas storage facility off the Yorkshire coast has been closed, leaving precious little national storage capacity. As we have seen with the post-covid supply chain chaos, energy problems will not only become acute this winter, but are likely to persist through much of next year. And even that assumes Russia relents and moderates its energy stance to European customers. By way of contrast, though its partnership with Russia China is gifted unlimited access to all carbon fuels. She is still building coal-fired electricity power stations at an extraordinary rate — according to a BBC report there are 61 new ones being commissioned. A further 51 outside China are planned. As a sop to the West China has only said she won’t finance any more outside her territory. And India relies on coal for over two-thirds of its electrical energy. While Europe and America through their green obsessions are denying themselves the availability and technologies that go with carbon fuels, the Russian/Chinese axis will continue to reap the full benefits. The West’s response is likely to be to decry Chinese pollution and its contribution to global warming, but realistically there is little it can do. Demand for Chinese-manufactured goods will continue because China now has a quasi-monopoly on global manufacturing for export. In the unlikely event western consumers become avid savers while their governments continue to run massive budget deficits, their trade deficits will rise even more, allowing Chinese exporters to increase prices for consumers and intermediate goods without losing export sales. While there is nothing it can do about China’s production methods, AUKUS members will undoubtedly lean on other exporting CPTPP members to comply with global green policies. But they will be competing with China, and while they may pay lip service to the climate change agenda, in practice they are unlikely to implement it without holding out for unrealistic subsidies from the western nations driving the climate change agenda. Under current circumstances, it seems unlikely that China’s CPTPP application will lead to membership, given the CPTPP requirement for China’s central government to relinquish ownership of its SOEs and to permit the free flow of data across its borders. In any event, China is focused on developing its Regional Comprehensive Economic Partnership (RCEP), a free trade agreement with ratification signed so far by China, Japan, South Korea, Australia, and New Zealand. It will come into effect when ratified by ten out of the fifteen signatories, likely to be in the first half of 2022, and in terms of population will be two and a half times the size of the EU and the US/Mexico/Canada (USMCA) trade agreements combined. With four out of five of the signatories being American allies, RCEP demonstrates that the AUKUS defence partnership is an entirely separate issue from trade. While the US may not like it, if RCEP goes ahead freer trade will almost certainly undermine a belligerent stance in due course. Despite hiccups, the progression of trade dealing in the Pacific region promises to prove Mackinder right about the prospect of a more balanced world. All being well and guaranteed by a balance of naval capabilities between AUKUS and China, a free-trading Pacific region will render the European and American trade protectionist policies an anachronism. But the threat is now from another direction: financial instability, with western nations pulling in one direction and China in another. Since the Lehman collapse and the ensuing financial crisis, China has been careful to prevent financial bubbles. Figure 1 shows that the Shanghai Composite Index has risen 82% since 2008, while the S&P500 rose 430%. While the US has seen financial asset values driven by a combination of QE and investor speculation, these factors are absent and discouraged in China. Government debt to GDP is about half that of the US. It is true that industrial debt is high, like that of the US. But the difference is that in China debt is more productive while in America there has been a growing preponderance of debt zombies, only kept solvent by zero interest rate policies. China’s policy of ensuring that the expansion of bank credit is invested in production and not speculation differs fundamentally from the US approach, which is to deliberately inflate financial assets to perpetuate a wealth effect. China avoids the destabilising potential of speculative flows unwinding because it lays the economy open to the possibility that America will use financial instability to undermine China’s economy. In a speech to the Chinese Communist Party’s Central Committee in April 2015, Major-General Qiao Liang, the People’s Liberation Army strategist, identified a cycle of dollar weakness against other currencies followed by strength, which first inflated debt in foreign countries and then bankrupted them. Qiao argued it was a deliberate American policy and would be used against China. In his words, it was time for America to “harvest” China. Drawing on Chinese intelligence reports, in early 2014 he was made aware of American involvement in the “Occupy Central” movement in Hong Kong. After several delays, the Fed announced the end of QE the following September which drove the dollar higher, and “Occupy Central” protests broke out the following month. To Qiao the two events were connected. By undermining the dollar/yuan rate and provoking riots, the Americans had tried to crash China’s economy. Within six months the Shanghai stock market began to collapse with the SSE Composite Index falling from 5,160 to 3,050 between June and September 2015. One cannot know for certain if Qiao’s analysis was correct, but one can understand the Chinese leadership’s continued caution based upon it. For this and other reasons, the Chinese leadership is extremely wary of having dollar liabilities and the accumulation of unproductive, speculative money in the economy. It justifies their strict exchange control regime, whereby dollars are not permitted to circulate in China, and all inward capital flows are turned into yuan by the PBOC. Furthermore, domestic monetary policy appears deliberately different from that of America and other western nations. While everyone else has been inflating their way through covid, China has been restricting domestic credit expansion and curtailing shadow banking. The discount rate is held up at 2.9% with market rates slightly lower at 2.2%, and the only reason it is that low is because alternative dollar rates are at zero and EU and Japanese rates are negative. It is this restrictive monetary policy that has led to the current crisis in property developers, with the very public difficulties of Evergrande. Far from being a surprise event, with cautious monetary policies it could have been easily foreseen. Moreover, the government has a sensible policy of not rescuing private sector businesses in trouble, though it is likely to take steps to limit financial contagion. In their glass houses, Western critics continually throw stones at China. But at least her policy makers have attempted to avoid contributing to the global inflation cycle. With prices beginning to rise at an accelerating pace in western currencies, a new global financial crash is in the making. China and her SCO cohort would be adversely affected, but not to the same extent. The fruits of China’s policies of restricting credit expansion are showing in the commodity prices she pays, which in her own currency have increased by ten per cent less than for dollar-based competition, judging by the exchange rate movements since the Fed reduced its funds rate to the zero bound and instigated monthly QE of $120bn on 19-23 March 2020 (see Figure 2). And while both currencies have moved broadly sideways since January, there is little doubt that the fundamentals point to an even stronger yuan and weaker dollar. The domestic benefits of a relatively stronger yuan outweigh the margin compression suffered by China’s exporters. It is worth noting that as well as moderating credit demand, China is attempting to increase domestic consumer spending at the expense of the savings rate, so consumer demand will begin to matter more than exports to producers. It is in line with a long-term objective of China becoming less dependent on exports, and exporters will benefit from domestic sales growth instead. Furthermore, with China dominating global exports of intermediate and consumer goods and while western budget deficits are increasing and leading to yet greater trade deficits, Chinese exporters should be able to secure higher prices anyway. There can be little doubt that the budget deficits financed by monetary inflation in America, the EU, Japan and the UK, plus central bank stimulus packages are now undermining the purchasing power of all the major currencies. The consequences for their purchasing powers are now becoming apparent and attempts to calm markets and consumers by describing them as transient cuts little ice. In terms of their purchasing powers, these currencies are now in a race to the bottom. Not only are the costs of production rising sharply, but following a brief pause of three months, commodity and energy prices look set to rise sharply. Figure 3 shows the Invesco commodity tracker, which having almost doubled since March 2020 now appears to be attempting a break out on the upside. Since global competitiveness is no longer a priority, China would be sensible to let its yuan exchange rate rise against western currencies to help keep a lid on domestic prices and costs. It is, after all, a savings driven economy, with the sustainable characteristics of a strong currency relative to the dollar. Conclusions Having failed in their land-based military objectives, America’s undeclared tariff and financial wars against China are also coming to an end, to be replaced by a policy of maritime containment through the AUKUS partnership. Attempts to stem strategic losses in Asia have now ended with the withdrawal from Afghanistan and from other interventions.The change in geopolitical policy is not yet widely appreciated. But the parlous state of US finances, dollar market bubbles, persistent and increasing price inflation and the inevitability of interest rate increases will make a policy backstop of maritime containment the only geostrategic option left to America. By pursuing more cautious monetary policies, China is less exposed to the inevitable consequences of global monetary inflation. While yuan currency rates are managed instead of set by markets, it is now in China’s interest to see a stronger yuan to contain domestic price and cost inflation. Even though fiat currencies could be destroyed by imploding asset bubbles, these factors contribute to a set of circumstances that appear to lead to a more peaceable outcome for the world than appeared likely before America and NATO withdrew from Afghanistan. There’s many a slip between cup and lip; but it was an outcome forecast by Halford Mackinder nearly eighty years ago. Let us hope he was right. Tyler Durden Sun, 09/26/2021 - 08:10.....»»

UK Has Ten Days To Save Christmas, Retail Sector Warns Brits are faced with the difficulty of soaring power bills, food and fuel shortages, and the possibility Christmas could be canceled unless the world's fifth-largest economy hires more truck drivers, according to Reuters, citing comments made by the retail industry to the government.  "Unless new drivers are found in the next ten days, it is inevitable that we will see significant disruption in the run-up to Christmas," Andrew Opie, director of food & sustainability at the British Retail Consortium, the retail industry's lobby group, told the government on Friday.  "Heavy goods vehicle (HGV) drivers are the glue which hold our supply chains together," Opie said. "Without them, we are unable to move goods from farms to warehouses to shops." He said the next ten days are crucial because retailers increase supplies in October to stock warehouses full of goods for the Christmas shopping season.  For months, trucking and logistics companies have experienced robust demand, but a shortage of HGV drivers disrupted critical land-based shipping networks and resulted in delayed shipments for supermarkets, retailers, and other industries. To solve the crisis and make sure that Christmas is not lost this year, Prime Minister Boris Johnson's office said they're considering temporary measures, such as work visas for truck drivers, allowing up to 5,000 foreign drivers onto British roads.  "We're looking at temporary measures to avoid any immediate problems, but any measures we introduce will be very strictly time-limited," a spokeswoman for Johnson's office said in a statement. UK's Road Haulage Association said there need to be at least 100,000 more HGV drivers to meet demand.  The cause of the driver shortage is partly because of Brexit and the virus pandemic, which suspended driver training for about a year.  With Christmas in the crosshairs, the country appears to be diving headfirst into a 1970s-style "winter of discontent" of shortages and socio-economic distress.  Tyler Durden Sun, 09/26/2021 - 08:45.....»»

Bank of America says small companies with steady earnings and low debt have consistency beaten the market in these kinds of economic conditions. Launch of the Soyuz rocket will send Ford, Novitskiy and Tarelkin on a five-month mission aboard the International Space Station Bill Ingalls/NASA via Getty Images Bank of America says the economy might already be entering the last stage of the post-COVID cycle. Strategist Jill Carey Hall says "quality" small- and mid-cap stocks thrive in late-cycle conditions. Since 1990, they've outperformed 100% of the time during the last phase of an expansion, she says. See more stories on Insider's business page. There's something of a consensus forming on Wall Street that says investors should take a good, long look at "quality" stocks.The market seems to have shaken off its fear that Chinese real estate lender Evergrande was going to be the start of a global debt crisis. But even so, there's been a rising sense of nervousness in the market in recent weeks as experts note how long it's been since stocks sold off in a major way - even though time alone doesn't make those sales happen.Investors' worries about a downturn have prompted them to buy companies that have a history of low debt, financial health, steady earnings, and stable profits on the theory that company performance and stock performance will hold up better if things go south.Goldman Sachs recently pointed out some of its large-cap quality picks, and now Bank of America is doing the same for smaller- and medium-size companies. Equity and quant strategist Jill Carey Hall writes that that call makes sense because of economic conditions as well as that undercurrent of investor nerves."Our team's US Regime Indicator - which has continued advancing through "Mid-Cycle" throughout 2021 - ticked down in August," she wrote on Wednesday. "If it declines again in Sept., this would suggest a shift to Late Cycle."Among those small- and mid-cap companies, Carey Hall says that investing based on quality has an incredible track record."High Quality stocks have outperformed the equal-weighted Russell 2000 index 100% of the time in Late Cycle regimes since 1990," she wrote. The two best quality factors are return on capital and free cash flow return on assets.The stocks below all have "Buy" ratings from Bank of America's analysts, and they're among the top 20% of Russell 2000 stocks in one of those two categories, which suggests they'll do well in the late-cycle environment Carey Hall identified.A select few stocks rank in the top quintile in both factors. Those are Rent-A-Center, RH, Cactus, HealthEquity, TTEC, and Enphase. Fox Factory Fox Factory Markets Insider Ticker: FOXFSector: Consumer discretionaryIndustry: Auto componentsMarket cap: $6.3 billionSource: Bank of America Funko Funko Markets Insider Ticker: FNKOSector: Consumer discretionaryIndustry: DistributorsMarket cap: $715 millionSource: Bank of America Churchill Downs Churchill Downs Markets Insider Ticker: CHDNSector: Consumer discretionaryIndustry: Hotels, restaurants, & leisureMarket cap: $9.0 billionSource: Bank of America Sonos Sonos Markets Insider Ticker: SONOSector: Consumer discretionaryIndustry: Household durablesMarket cap: $4.6 billionSource: Bank of America Shutterstock Shutterstock Markets Insider Ticker: SSTKSector: Consumer discretionaryIndustry: Internet & direct marketing retailMarket cap: $4.3 billionSource: Bank of America PROG Holdings PROG Holdings Markets Insider Ticker: PRGSector: Consumer discretionaryIndustry: Specialty retailMarket cap: $2.8 billionSource: Bank of America America's Car-Mart America's Car-Mart Markets Insider Ticker: CRMTSector: Consumer discretionaryIndustry: Specialty retailMarket cap: $793 millionSource: Bank of America Asbury Automotive Group Asbury Automotive Markets Insider Ticker: ABGSector: Consumer discretionaryIndustry: Specialty retailMarket cap: $3.6 billionSource: Bank of America Bed Bath & Beyond Bed Bath & Beyond Markets Insider Ticker: BBBYSector: Consumer discretionaryIndustry: Specialty retailMarket cap: $2.5 billionSource: Bank of America Hibbett Hibbett Sports Markets Insider Ticker: HIBBSector: Consumer discretionaryIndustry: Specialty retailMarket cap: $1.2 billionSource: Bank of America Lithia Motors Lithia Motors Markets Insider Ticker: LADSector: Consumer discretionaryIndustry: Specialty retail Market cap: $10.2 billionSource: Bank of America Rent-A-Center Rent-A-Center Markets Insider Ticker: RCIISector: Consumer discretionaryIndustry: Specialty retailMarket cap: $4.1 billionSource: Bank of America RH RH Markets Insider Ticker: RHSector: Consumer discretionaryIndustry: Specialty retailMarket cap: $14.4 billionSource: Bank of America BJ's Wholesale Club Holdings BJ's Wholesale Club Markets Insider Ticker: BJSector: Consumer staplesIndustry: Food & staples retailingMarket cap:Source: Bank of America Cactus Cactus Markets Insider Ticker: WHDSector: EnergyIndustry: Energy equipment & servicesMarket cap: $1.9 billionSource: Bank of America Northern Oil and Gas Northern Oil & Gas Markets Insider Ticker: NOGSector: EnergyIndustry: Oil, gas, & consumable fuelsMarket cap: $1.2 billionSource: Bank of America Arena Pharmaceuticals Arena Pharma Markets Insider Ticker: ARNASector: HealthcareIndustry: BiotechnologyMarket cap: $3.7 billionSource: Bank of America MeiraGTx Holdings MeiraGTX Markets Insider Ticker: MGTXSector: HealthcareIndustry: BiotechnologyMarket cap: $592 millionSource: Bank of America Vanda Pharmaceuticals Vanda Pharma Markets Insider Ticker: VNDASector: HealthcareIndustry: BiotechnologyMarket cap: $932 millionSource: Bank of America AMN Healthcare Services AMN Healthcare Markets Insider Ticker: AMNSector: HealthcareIndustry: Healthcare providers & servicesMarket cap: $5.4 billionSource: Bank of America HealthEquity HealthEquity Markets Insider Ticker: HQYSector: HealthcareIndustry: Healthcare providers & servicesMarket cap: $5.2 billionSource: Bank of America R1 RCM R1 RCM Markets Insider Ticker: RCMSector: HealthcareIndustry: Healthcare providers & servicesMarket cap: $6.0 billionSource: Bank of America Allegiant Travel Allegiant Travel Markets Insider Ticker: AGLTSector: IndustrialsIndustry: AirlinesMarket cap: $3.6 billionSource: Bank of America Construction Partners Construction Partners Markets Insider Ticker: ROADSector: IndustrialsIndustry: Construction & engineeringMarket cap: $1.7 billionSource: Bank of America Generac Holdings Generac Markets Insider Ticker: GNRCSector: IndustrialsIndustry: Electrical equipmentMarket cap: $27.9 billionSource: Bank of America Meritor Meritor Markets Insider Ticker: MTORSector: IndustrialsIndustry: MachineryMarket cap: $1.5 billionSource: Bank of America ASGN ASGN Markets Insider Ticker: ASGNSector: IndustrialsIndustry: Professional servicesMarket cap: $6.0 billionSource: Bank of America ArcBest ArcBest Markets Insider Ticker: ARCBSector: IndustrialsIndustry: Road & railMarket cap: $1.9 billionSource: Bank of America Werner Enterprises Werner Enterprises Markets Insider Ticker: WERNSector: IndustrialsIndustry: Road & railMarket cap: $3.2 billionSource: Bank of America Rush Enterprises Rush Enterprises Markets Insider Ticker: RUSHASector: IndustrialsIndustry: Trading companies & distributorsMarket cap: $2.4 billionSource: Bank of America TTEC Holdings TTEC Holdings Markets Insider Ticker: TTECSector: Information technologyIndustry: IT servicesMarket cap: $4.4 billionSource: Bank of America Enphase Energy Enphase Markets Insider Ticker: ENPHSector: Information technologyIndustry: Semiconductors & semiconductor equipmentMarket cap: $21.3 billionSource: Bank of America Louisiana-Pacific Louisiana-Pacific Markets Insider Ticker: LPXSector: MaterialsIndustry: Paper & forest productsMarket cap: $5.7 billionSource: Bank of America Newmark Group Newmark Markets Insider Ticker: NMRKSector: Real estateIndustry: Real estate management & developmentMarket cap: $2.7 billionSource: Bank of America  Read the original article on Business Insider.....»»

The housing market sits at the center of several economic battles. Building more of it can shape a more equitable America. Just look at the data. Flames from the Dixie Fire consume a home on Highway 89 south of Greenville on August 5, 2021, in Plumas County, California. AP Photo/Noah Berger Soaring home prices are contributing to the biggest economic crises of the 21st century. Climate change, birth rates, and inequality have all been slammed by the housing affordability crisis. Building more homes and denser apartments can fight a number of economic calamities, economists said. See more stories on Insider's business page. Falling birth rates. Widening inequality. The climate crisis. They have an unlikely common denominator in the housing market. Home prices have rocketed higher at record pace for three straight months. Americans' views of buying conditions are the worst since 1982. And supply remains grossly insufficient after decades of underbuilding.The price spikes started in summer 2020 as record-low mortgage rates and new flexibility around remote working sparked a wave of pandemic moves. That quickly dragged inventory to record lows. Supply has rebounded somewhat, but it remains well below the levels needed to normalize the red-hot market.The housing crisis isn't unique to the US, either. Markets in Canada, New Zealand, Australia, Russia, Brazil, and Turkey all saw home prices surge through the pandemic, and the global rally shows "little sign of stopping," JPMorgan economists said earlier in September.Famous economist Larry Summers theorized almost a decade ago that developed economies were in a phase of "secular stagnation," without enough productive investments to fuel their economies. The result is an inflated housing sector, which lingers as a reminder of greater economic dysfunctions. Look under the hood of the global housing crisis, then, and you see connections to the great economic problems of the 21st century.Equality in housing is equality everywhereOwnership of a home allows people to profit from its rising value and tap their equity in the property when they need extra cash. Failure to purchase a home doesn't just lock Americans out of those benefits, it leaves them stuck paying landowners in monthly rent.Those who own land - or have the means to invest in properties - win out as values climb, while those who've been renting are trapped paying higher rates and placed even further from owning a home.Income inequality has long been characterized as the biggest driver of economic inequity, but housing is the true culprit, researchers Fabian Pfeffer and Nora Waitkus said in an August paper. The distribution of housing equity plays the biggest role in deciding where wealth is allocated, according to the researchers.Shoring up home supply and allowing for denser construction could directly level the playing field, economists Sam Bowman and Ben Southwood wrote for the Works in Progress online magazine, with housing advocate John Myers."Increasing the supply of housing and commercial space, while ensuring that it benefits existing residents, could turn this zero-sum situation into one where everyone can be better off," they added.Forming a household requires a homeWhere affordable housing allows Americans to start families and grow their households, expensive housing can delay such plans. And the lack of affordable homes might already be affecting birth rates.Women in developed countries are having fewer children than they'd like, according to the Organization of Economic Co-operation and Development. Fertility crested in 2007 before tumbling during the Great Recession and continuing its downward slope.Although factors such as increased contraception use and climate-related fears contributed to the slide, the economy was the biggest driver by far, Insider's Hillary Hoffower reported. The lack of affordable childcare, weak wage growth, and lingering gender inequities in the workplace all dragged on women's plans to have kids. In other words, the secular stagnation forecast by Larry Summers has discouraged procreation, and it's daunting to have a child when you can't afford to house it.All else being equal, a 10% jump in home prices powers a 1.3% drop in birth rates, according to researchers at the European Bank for Reconstruction and Development.Fighting the climate crisis requires a new kind of housing marketShoring up home supply doesn't just rely on more houses in undeveloped areas. Rethinking housing in dense cities can serve as a one-two punch for fighting home inflation and climate change.Urban areas like New York City and Philadelphia account for much less carbon emissions than rural and suburban locales. Cities require shorter car trips and offer public transit alternatives."One of the most efficient ways for us to reduce our greenhouse gas emissions is by having people live close to where they work and having them take public transit," Jesse Arreguín, mayor of Berkeley, California, told Insider in a recent interview. Arreguín has been one of the biggest proponents for denser apartment development, particularly near transportation hubs.The world's housing markets have a choice to make: Either tackle these interconnected crises or stagnate.Read the original article on Business Insider.....»»

Gen Z has influencing power. Millennials have spending power. The oldest member of each generation is writing the next chapter of American life. The oldest of Gen Z is influencing the economy in a big way. Tim P. Whitby/Getty Images The oldest millennial and oldest Gen Zer are in charge right now - of spending, influence, and the economy. The 40-year-old's financial behavior is shaping huge economic markets like housing. Meanwhile, the 24-year-old is setting trends, affecting consumer behavior for everyone. See more stories on Insider's business page. The 40-year-old and the 24-year-old are the talk of the town right now. The oldest millennial, who turns 40 this year, has the most spending power. They've mostly recovered from a decade-long struggle following the 2008 financial crisis, and they're spending on the biggest purchase of their lives: houses. The oldest Gen Zer, who turns 24 this year, has more sway in consumer behavior. A decade before they replace millennials as the largest spenders, they're already seen as tastemakers, a role every generation takes on during this life stage. Everything from your buying choices to your lifestyle choices are likely being shaped by the oldest members of these generations. Meet the people shaping the world you'll live in for the next decade, or two.The 40-year-old millennial has spending powerMillennials have become the economic driving force in America. They're the largest generation, represent the biggest percentage of the country's workforce, and hold the most purchasing power. As millennials age and their incomes grow, their spending power is only set to increase. Just look at the wave of coming millennial spending power in the chart below. The 40-year-old leads the way.!function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r.....»»

Haven't returned to work yet? You're not alone. Five economists broke down for Insider why people aren't rushing back into the work force. A "Help Wanted" sign hangs in the window of a restaurant in the Greenwich Village neighborhood of Manhattan in New York, Tuesday, May 4, 2021 AP Photo/Mary Altaffer Anecdotes about labor shortages have been popping up for months amidst America's slow recovery. But enhanced unemployment has expired and it hasn't helped end end the labor crunch. Insider spoke to five economists and experts about why workers aren't coming back, and the issues with hiring. See more stories on Insider's business page. America is tired of labor shortages. September was supposed to be the silver bullet month when the end of enhanced unemployment benefits coincided with schools and other childcare services reopening and vaccination rates facilitating a return to office. But if you're not back at work, you're far from the only one.That's because the reality of September could perhaps be summarized in two words: Womp womp. There's another two words, nearly as fearsome: The month told a "Delta story," according to Jesse Wheeler, an economic analyst at Morning Consult."We're still expecting this improvement in jobs and continued economic recovery in the future, but it's basically just on hold," Wheeler said.So if you haven't returned to work yet, or are mulling whether a return to work is the right move right now, you're not alone. In a note released this week, JPMorgan found that just half of the people who lost jobs during COVID are going back to work.As Bloomberg reports, unemployment benefits winding down didn't compel people back into the workforce, echoing several studies showing no connection. Schools are contending with Delta waves and temporarily shuttering. Childcare is facing its own labor shortage, turning away families who need care. Vaccinations are up, but mass vaccine mandates for businesses only recently become a reality."I don't see evidence that the slowing of growth had to do with labor shortages. It had to do with Delta," Heidi Shierholz, the president of the left-leaning Economic Policy Institute, told Insider. She added: "Employers really were demanding a lot fewer people in August than they had in the prior month."Insider spoke to five economists and experts about the current messy state of the labor market, and why it makes sense some people haven't returned yet. At the heart of the current labor crunch are major disconnects - what economists call "mismatches" - between what employers want and the people who could fill those roles. Some have moved out of areas where there's need; others have higher expectations for work. But employers are responsible for another mismatch: They say they're scrambling to find workers but they're not willing to pay the price labor is demanding right now. Hiring is a messAs Vox's Rani Molla and Emily Stewart report, the hiring system is a little bit broken too. The current labor market has an "incongruity" between what job seekers are hearing about the abundance of roles, and their actual experiences, according to Vox. It might be a fourth more subtle mismatch.For one, The Wall Street Journal reports that some applicants may be filtered out by the hiring software many employers have adopted. If your resume doesn't have the exact keyword, or, like many workers, you're trying to switch into a related role, you may not even make it past the initial screening.One criterion that employers are filtering by: Whether applicants have a college degree. That could leave out the 70 million workers who are "STARs" - Skilled Through Alternative Routes, according to Papia Debroy, the senior vice president of insights at Opportunity@Work. According to the Census Bureau, two-thirds of American workers don't have a bachelor's degree, with that percentage coming in higher for Black and Hispanic workers.Debroy said that STARs have been increasingly locked out of middle wage jobs in the past decades - roles that are crucial for them to move up the ladder."In many respects, not recognizing that skills are being gained through alternative routes is not just failing these workers. It's failing employers from finding the talent they're looking for, but also it's preventing further mobility for this population," Debroy said. Erica Groshen, senior economics advisor at the Cornell University School of Industrial and Labor Relations and the former commissioner of the Bureau of Labor Statistics, told Insider that employers may not be working rapidly to actually fill the record number of job openings."They may say, 'Well, we have an opening and we have it listed,' but they may not be rushing to fill it if they're not sure how the pandemic is playing out in their area," Groshen said. "So they may leave the posting up, but not be rushing."There's still the pandemic to consider In July, Morning Consult found that 3.5 million of the people who left the labor force were planning on returning to work in the next year; two-thirds wanted to start working again within three months."However, a few months later, a lot of those people have put it on hold," Morning Consult's Wheeler said. The intelligence firm's September outlook found that consumer sentiment in August reached its lowest levels since February 2021.That's because taking a job right now still faces all of the calculations of the health risks and childcare considerations of the pandemic, which many assumed would have been resolved by now. It's what Shierholz calls "baby echoes" of the early days of the pandemic. There is, of course, something we have now that we didn't at the start of the pandemic: Vaccines. But, as Insider's Aylin Woodward reports, the US has fallen behind in vaccination rates, ranking 39th in the world. "In places where the pandemic is still hitting a lot of people with low vaccination rates, that might still be keeping some people home," Brian Riedl, a budget expert at the right-leaning Manhattan Institute, told Insider. "The states that are relatively unvaccinated and seeing more Delta variant cases still may see a lag." As President Joe Biden continues to ramp up vaccination efforts and the Delta wave subsides, people might return more. JPMorgan anticipates that 2 million Americans "will continue to drift back into employment," especially as their pandemic savings dwindle.In the meantime, businesses have turned toward one method to make the return pay off for workers: Raising wages. "There's always somebody talking about there being a labor shortage, and yet in a free market economy, the price is supposed to make the adjustments so that the quantity demanded will meet the quantity supplied," Groshen said. "What they're really saying is that I'm not offering enough to get the workers I need."Anecdotally, it seems to be working. The New York Times reported that Jason Hammel, a chef in Chicago, raised base pay to $18 to $24 per hour; he said he hasn't had issues hiring. But some restaurants have raised wages and still haven't seen applicants flooding in, Insider's Grace Dean reported. Groshen said that offering more doesn't just encompass wages - it's working conditions and benefits, too. "If I decide that I don't want to pay the price of an Audi, I don't get to just announce that there's an Audi shortage and this needs government intervention," Groshen said.Joseph Zeballos-Roig contributed reporting.Read the original article on Business Insider.....»»

Amanda Cohen raised menu prices by 30% to afford a $25-an-hour starting wage for staff. She's had no issue hiring - and diners accept the new prices. Across the US, restaurant workers have been demanding better pay and working conditions. Damien Eagers/PA Images via Getty Images A Manhattan restaurant owner raised prices so she could pay all staff a $25-an-hour starting wage. "I still don't think we pay them enough," Amanda Cohen, owner of Dirt Candy, told Insider. Restaurants are struggling to find staff - but Cohen says she hasn't had "a single problem." See more stories on Insider's business page. A Manhattan restaurant owner thinks the $25-an-hour starting wage she pays her staff still isn't high enough.Amanda Cohen, who owns vegetarian tasting restaurant Dirt Candy, hiked up wages when she reopened indoor dining in May 2021, after realizing how badly some workers struggled financially during lockdown.Cohen said she previously thought she paid her staff a decent wage, but that it became clear she was not paying them enough. The pandemic forced her to close her restaurant in March 2020 and lay off her 30 employees."I know none of them have enough savings to weather this," she told Insider. "I want my staff to have more."While the restaurant was closed, she decided that she'd raise wages when she reopened.The chefs were previously paid between $18 and $21 an hour and front-of-house staff between $23 and $25. Now their wages all start at $25, with built-in raises based on the length of service, she said."I still don't think we pay them enough," she said.Cohen said that even before the pandemic, the restaurant industry was rife with poaching and had "really turned into this gig economy where these cooking jobs started to feel really disposable, as though you could hop from one to the next" for better wages.During the pandemic, restaurant workers have been demanding better pay and working conditions, "justifiably so," Cohen said. Some workers quit the industry, causing restaurants to slash hours, limit services, or even close for good.It's not just restaurants that have been hit by what's billed as "The Great Resignation." Businesses ranging from ride-hailing apps and small stores to hotels and delivery services have been struggling to find new workers or retain existing staff, saying they don't need to take low-paying jobs in such a competitive labor market.Cohen said Dirt Candy, which now has around 25 staff, provides employees with paid time off and health insurance. She said that in other industries, these provisions were "just standard, but in a restaurant, somehow it became sort of the norm not to treat our employees like professionals."The restaurant also has a no-tipping policy, which has been in place since 2015."We don't have to trick you into paying a 20% 'tip' at the end of your meal to cover our labor costs," Dirt Candy says on its website.Cohen said some staff had left Dirt Candy during the pandemic to move to a new town or different industry, but that she'd been able to find replacements easily."We have not had a single problem with finding staff," she said.Cohen said that the wage hikes meant she had to raise prices by around 30%.She streamlined the restaurant's menu, too. Previously, it offered tasting menus of five and ten courses, but now it just offers one five-course menu, which she said slashed the restaurant's food costs and meant she could afford to pay staff more."We put the focus on staff comes first and everything comes second," Cohen said. "I can't succeed without a staff."Other restaurants have voiced concerns that price hikes could lead to fewer visitors, but Cohen said her menu changes hadn't deterred diners. She said that the restaurant, which seats 44, was serving between 85 and 90 diners on an average night, which was roughly the same as pre-pandemic."I think for a pandemic, we're doing just fine," she said.Do you own or manage a restaurant that's struggling to find staff? Or are you a hospitality worker who quit your job - or the industry - over pay, benefits, or working conditions? Contact this reporter at gdean@insider.com.Expanded Coverage Module: what-is-the-labor-shortage-and-how-long-will-it-lastRead the original article on Business Insider.....»»

Pret A Manger's announcement follows a successful rollout in the UK, which garnered 16,500 subscriptions on its debut day. In 2020, Pret garnered 16,500 subscriptions on its first day in the UK. Photo by: Newscast/Universal Images Group via Getty Images Pret A Manger has launched its coffee-subscription program in New York City and Washington, D.C. It follows a successful rollout in the UK, which garnered 16,500 subscriptions on its debut day. The coffee market is showing resilience, said an expert from the Speciality Coffee Association. See more stories on Insider's business page. Cafe chain Pret A Manger has launched its coffee subscription service in New York and Washington D.C., the company recently announced. Its US debut comes after a successful rollout in the UK market. In 2020, Pret garnered 16,500 subscriptions on its first day in the UK. "After seeing success in the UK market, Pret A Manger is eager to offer its US customers a program with similar benefits, starting with a free first month for all new subscribers," the company said in a statement. The coffee market has shown resilience during the pandemic, according to Peter Giuliano, chief research officer of the Speciality Coffee Association. "Lots of people were predicting reduced coffee consumption caused by the pandemic, some even predicting the end of the small coffee shop," he told Insider. Some brands have been able to adapt to a new normal, however. "Chains who made a strong pivot to at home consumption, focusing on programs like subscription services, seemed more resilient during the pandemic," Giuliano said.The service will operate via Apple or Google digital wallets or QR codes, which are emailed to subscribers. As in the UK, customers have to wait 30 minutes between each order using the service. This is to prevent people buying drinks wastefully or for friends without a subscription, Insider's Grace Dean reported. "We recognize our customers need for ease, flexibility and value, and this subscription model will be able to provide that," said Jorrie Bruffett, president of Pret A Manger in the US.Bruffett said the chain has also invested in new technology to enhance the overall customer experience. "This innovation in technology comes with a new app redesign and more exclusive perks to be launched later this year," he said in a statement. The subscription economy has experienced growth of more than 435% over the last nine years, according to Zuora, a subscription-management platform.Like Pret, other chains in the restaurant space have tested out subscription-based models as a way to retain customers. Restaurants are following the success of models from Netflix and Amazon in the subscription sales industry, which is projected to hit $263 billion by 2025 according to Juniper Research. In 2020, Panera debuted an unlimited-coffee subscription for its MyPanera loyalty program members, which costs $9 a month, or about $108 annually. More recently, Taco Bell announced it is testing an in-app-only taco subscription in Arizona for $5. Customers who sign up for a Taco Lover's Pass can indulge in a free taco daily, for 30 days. Pret's subscription service was first launched as a plan to turn around its finances, which were knocked by the COVID-19 pandemic. The company's sales slumped 74% in 2020, compared with 2019. Insider's Grace Dean reported. It also cut a third of its UK workforce in 2020 and closed multiple stores in the US.But Sean Keith, director of new business development at Eagle Eye, which powers Pret's subscription, previously told Insider that the subscription program was a success for bringing in new customers and keeping them coming back."We see businesses that are playing in subscriptions are out-competing businesses that are not," he said. Pret's classic plan is $19.99 a month and includes all organic coffees and teas with a flavored syrup add-on. Its premium plan costs $29.99 a month and includes all espresso-based, barista-made drinks, as well as organic coffees and teas with an espresso shot or flavored syrup add-on. Both plans include hot or iced drinks of any size. Read the original article on Business Insider.....»»

The Problem Is Not Just Xi Jinping; It Is Communism Authored by David Flint, op-ed via The Epoch Times, To communists and their ilk, the truth is whatever line the party is now promulgating - that is, until it is superseded by a new line. This is the theme of George Orwell’s great novel, 1984. The protagonist, Winston Smith, works at the Ministry of Truth, constantly amending historical records to be consistent with whatever is the current party line. In particular, those liquidated are made non-persons, just as though they never existed. The truth has been packaged precisely this way in Communist China continuously and consistently since 1949, just as it was from the birth to the collapse of the USSR. Accordingly, when Joseph Stalin’s secret police chief, Lavrentiy Pavlovich Beria, was executed by his successors, subscribers to the Great Soviet Encyclopaedia would receive instructions to replace pages eulogising Beria with additional material on the Behring Sea. Beria was made a non-person. But the fact is that the enemy of each and every communist regime is truth itself, as are the other values and principles of civilised society, especially the proposition at the very core of the Declaration of Independence. This is not just American. According to Winston Churchill, following the Magna Carta and the English Bill of Rights, the Declaration is the third great title deed on which the liberties of the English-speaking people, the core of the West, are founded. “Declaration of Independence,” 1819, by John Trumbull. (Public domain) It states the fundamental principle that man is endowed by his Creator with certain unalienable rights, a principle which is inconsistent with communism, whoever is the paramount ruler. The latter is important. What we may call the “Communist China Lobby”—a powerful pressure group in the United States and many democratic nations—pretends Chinese leader Xi Jinping to be the sole source of present troubles with the Chinese Communist Party (CCP). Not so, the source of this evil is communism. Just as an egregious illustration, the wicked multi-billion-dollar trade in the organs of healthy people dates from well before Xi’s rise. The fact is that communism is and has always been alien to civilisation. We cannot rely on communist regimes to behave appropriately or honourably. We can place no trust in their word, even in the most elementary matters. Take, for example, the statistics on COVID-19 for which the CCP is responsible. We are told the deaths from the virus in Australia, a country of 26 million, will soon exceed those from Communist China, a country with a population of over 1.4 billion. Clearly, no wise person would ever take either their statistics, or their word, seriously, a counsel which curiously does not seem to apply whenever the subject is the reduction of CO2 emissions. Equally, any wise person must expect a hostile reaction when they demand a truth that will expose a matter that could embarrass the communists, as occurred when Australia dared to propose an international investigation into the origins of the pandemic. Australia’s only mistake was to allow an investigation to be led by the World Health Organisation, an organisation under the heavy influence of the CCP. A sign of the World Health Organization in Geneva, Switzerland, on April 24, 2020. (Fabrice Coffrini/AFP via Getty Images) Australia should have proposed to the former U.S. administration to establish an ad hoc international tribunal to investigate its origins, assess liability and, if appropriate, damages. Were damages awarded and not paid, legislation could authorise their recoupment from assets in Australia under the ultimate control of the guilty state—the Port of Darwin comes to mind. As Australia came under increasing and unlawful economic punishment from Beijing in response to its calls for an investigation, there is little more the CCP could do if we were to seize such assets to satisfy a lawful international judgement. At least a range of premium and strategic assets could be recovered. The point is that not only can we not rely on the information or the truth from this regime, but it also controls a territory where there is no rule of law, no human rights, and no protection of workers’ rights. This did not come with Xi; it has prevailed since 1949. With the fall of the Berlin Wall and the collapse of European communist dictatorships, the CCP’s abiding object has been to avoid a similar fate. Then-paramount leader Deng Xiaoping drew on former Soviet leader Vladimir Lenin’s New Economic Policy (NEP) which had saved the Soviet Union from early collapse in 1922. He followed Lenin and moved the CCP towards a “socialist market economy” under “communism with Chinese characteristics.” Lenin never intended the NEP to be permanent. Words attributed to him illustrate the communist’s real intentions: “The capitalists will sell us the rope with which to hang them.” Which they did, with Stalin reversing direction, socialising the economy, forcing collectivisation on the class enemy, including being forced to farm Kulaks, and brutally using famine to destroy them. Deng Xiaoping had more to offer the West than Lenin. It was something that dazzled Western elites, a market with a fifth of the world’s population. Containers are seen at the Yangshan Deep-Water Port in Shanghai, China, on Oct. 19, 2020. (Aly Song/Reuters) Bill Clinton gambled on welcoming the People’s Republic of China into the World Trade Organisation in 2000. Instead, he allowed access without the most elementary safeguard to ensure they could not do what communists do: ignore the rules, steal, or forcibly extract something far greater—than even the US$85 billion of modern weaponry recently gifted to the Taliban—America’s vast portfolio of intellectual property. From Europe to Australia, Western leaders and big businesses have blindly followed suit. As a result, these elites saved a tyrannical regime from the fate Ronald Reagan and Margaret Thatcher delivered to the Soviet Union. They betrayed American, Australian, and Western workers by closing and transferring their industries to China. They betrayed Chinese workers by indecently profiting from the suppression of their fundamental rights. Yet, these same elites were too often taken for a ride by the communists who cheated them at every turn and allowed their nations to become dependent on the CCP. Only under the former U.S. administration was this trend briefly reversed. Now, from America to Europe and Australia, that same Communist China Lobby, who want Western industry back in China, are trying desperately to restore this dependency. They have a uniform justification for this. The problem, they say, is temporary. The problem will pass when paramount leader Xi passes. But that is not so. The problem is not whoever is the paramount leader. The problem is, as it has always been, that evil “plague bacillus,” which is communism. Tyler Durden Sun, 09/26/2021 - 00:00.....»»

"A More Difficult Backdrop Is Emerging": 5 Reasons Why Goldman Is Starting To Turn Bearish Last week's remarkable bounce in stocks from Monday's lows which, as a reminder, prompted the first outflow from equities in 2021... ... has sparked many questions among Wall Street's elite where even some of the biggest bulls are puzzled by the market's violent reversal (which, however, was predicted correctly by flow-tracking quants like Nomura's Charlie McElligott). And it's not just the market's relentless ability to internalize any adverse market action and come out on top as a wave of BTFDers rushes in: as Goldman's strategist Chris Hussey wrote late on Friday, "one thing that is increasingly drawing our attention and was 'front and center' this week is how the economy, policy, and earnings growth appear to be rapidly transitioning away from the initial post-pandemic explosion of accommodation and activity and towards a slower pace as the brakes are pressed on a variety of key parts of the growth machine." As Hussey further notes, growth is fine for now and even robust, with Goldman's economists forecasting over 4.5% GDP growth forecast to extend into 2022, but as he cautions "a developed economy like the US cannot grow at a 9% pace for very long --even as it catches up out of a pandemic." Meanwhile, as he delineates below, a series of pieces may be falling into place to 'tap the brakes' on some of the torrid growth we have been seeing since vaccines were distributed earlier this year. Among these Goldman focuses on the impact of fading stimulus, supply chains, the virus, China, and even stock valuations which are "coalescing to create a more difficult backdrop for earnings growth and multiple expansion in the months, or at least years ahead." Here are a few observations on all 5 of these potentially "braking" factors: 1. Stimulus. The FOMC indicated that tapering ‘may soon be warranted’ at this week’s meeting and on the back of the statement, yields on 10-year Treasuries have risen 15 bp to 1.45% while front-end rates have reset notably higher as shown in the chart below. Interestingly, stocks also rose on the back of the Fed statement, consolidating the rebound from Monday's sell-off. And while the Fed has not done anything yet -- only suggested it is about to -- the wheels do seem to now be in place to wind down the central bank's latest QE program and to eventually start raising rates -- as soon as one year from now. Adding to this point, BofA's Michael Hartnett notes that global tapering has begun (ECB, BoE, BoC, RBA, Fed) which will see a sharp drop in global central liquidity which was $8.5 trillion in 2020, shrinks to $2.1trillion in 2021, and will be just $0.1 in 2022 (putting this in context, since the COVID outbreak central banks have bought $800MM of assets every hour, a number which shrinks to.....»»