UK remains Europe’s leading financial hub but Asian hubs are on the march

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Good

drugosrbijanac

I honestly believe there are many undervalued small to midcap innovative Chinese tech companies that could easily be valued at over 25 billion USD and I wouldn’t be surprised. There’s the country risk that everyone talks about, but that’s the whole reason Chinese companies are undervalued in the first place. High risk very high reward. Companies like HUYA, WIMI, ZEPP, DOYU, JKS, JWEL, IFBD, MOMO, BLCT, MKD, etc. A ton of cheap innovation with high gains potential. I’m also partial toward certain OTC Chinese companies such as Graphex, Wuling Motors, China Everbright Environment, PICC Property and Casualty, Lenovo, Sinopharm, China Resources Power, Fosun International, Zoomlion Heavy Industry, Beijing Enterprises Water Group, JNBY Design, First Tractor Company, etc. Just so much value in my honest opinion.

mk199222

So

Gatoryu

El Salvador eclipses them all in 10 years.

Xenson1

The Fed’s Risky Fill-the-Punch-Bowl Strategy

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Opinion Commentary

The Fed’s Risky Fill-the-Punch-Bowl Strategy
Growth is surging, the housing market is hot, and inflation is on the rise. It’s time to pull back.
By Kevin Warsh
June 7, 2021 1:05 pm ET

My mentor, the late George Shultz, would often say “an economist’s lag is a politician’s nightmare.” Changes in economic policy take several quarters to affect the real economy. Politicians usually aren’t that patient.

The Federal Reserve announced a new policy doctrine almost a year ago. In essence, the Fed said it would no longer consider lags when making monetary policy, forsaking the policy of “pre-emption” that was standard under Fed heads Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen. Jerome Powell’s Fed believes the party is just getting started and won’t remove the punch bowl until the fun is in full swing and the neighbors know it. Most in Washington can barely contain their enthusiasm for the new doctrine. Wall Street loves it too.

Optimism about the future, however, should be matched by memories of the past. Real economic growth is surging more than it did during the Reagan years. U.S. government spending is growing at the fastest clip since World War II. The housing market is running hotter than it did in the runup to 2008. Financial-market ebullience is stronger and broader than during the dot-com boom at the turn of the century. And economic output will shortly surpass historic highs.

The Fed might be right. The surge in prices and wages might be transitory. The widespread anecdotes of worker shortages and significant wage increases might not constitute a sustainable trend. Inflation expectations might be stable. Count me skeptical of the Fed’s convictions. The risks the Fed is taking with its winsome forecast are significant, and the consequences of policy error are severe.

The Fed’s new doctrine is a catalyst for heightened concern. When announced at Jackson Hole in August, the goal of the Fed’s new doctrine was actually to unmoor inflation expectations, which were purportedly running too low for too long. The reanchoring of expectations—a little higher but not too much—is a far tougher task, especially amid the shifting seas of the post-pandemic economic resurgence.

No other major central bank has adopted anything like the Fed’s new framework. The People’s Bank of China has already removed significant accommodation. The Bank of Canada announced meaningful steps toward normalization. The Bank of Korea signaled interest in somewhat tighter policy. I expect other Group of 20 central banks to move further from the Fed’s policy in the coming months.

The resulting U.S. dollar weakness—in train since last fall—poses a host of dangers, including inflation risks. The Fed says it has the tools to stop an inflationary surge, but its new regime promises a tardy response. Late by design, the Fed would have to tighten policy more to stop an inflationary surge.

Inflation is scarcely the sole or predominant policy risk. The scale of government spending and scope of government activity are unprecedented. Since the onset of the pandemic last February, the Fed has bought 56% of total Treasury issuance of $4.5 trillion. The Fed’s asset purchases represent 76% of the cumulative federal fiscal deficit. And the Biden administration is proposing a $6 trillion budget for fiscal 2022, about a third of which would be unfunded.

The Fed says it’s still too early to slow its purchases of Treasurys and agency-backed housing debt. If the Fed doesn’t begin action imminently, it may be too late. Others will fund the nation’s profligacy even after economic growth slows and the debt burden grows. But what interest rate investors will demand for the privilege?

Most large foreign buyers, including China, departed the Treasury auction market when the pandemic hit and haven’t meaningfully returned. Many foreign entities believe the Fed is monetizing the fiscal expansion and expect the new policy experiment to end badly. Leaders in China are poised to capitalize on an American policy error.

Others investors see the growing tensions between East and West, and are hedging their bets. The dustup in the recent meeting in Anchorage between China and the U.S. was merely prologue. The Biden administration might wonder if—in the absence of Fed intervention to keep interest rates exceptionally low—it can rely on the kindness of strangers to fund its grand ambitions.

I worry the Fed has committed itself to a monetary “Brezhnev doctrine.” Leonid Brezhnev, the leader of the Soviet Union during the height of the Cold War, made clear that once another country adopts communism, it can never be allowed to revert. Maintaining a veneer of infallibility was more important to Moscow than accommodating changing circumstances. Dissent was strongly discouraged. Ultimately, the Brezhnev doctrine drained the Soviets economically until the system could no longer be sustained. And it drained the system ideologically so that a dangerous void was created in the aftermath.

In the darkest days of the pandemic, Mr. Powell proved himself a nimble and capable crisis manager. But the crisis for which the Fed’s emergency tools were designed has long passed. The “V” shape of the economic recovery befits its proximate cause, the vaccine.

The Fed risks walking through a one-way door. Mr. Powell’s performance at the next press conference—uttering precisely the right words in practiced, measured tones—is of modest importance. Talking about tapering is a sideshow, however well-publicized. What matters most now is what the Fed does, not what it says.

The Fed should change its policy regime. It should stop buying mortgage securities immediately. Soon after, it should slow its purchases of Treasury debt. It should not tolerate Fed-financed fiscal expansion. It should unlock the handcuffs imposed by its novel doctrine and render an informed and humble judgment on the state of the economy and the attendant risks to the outlook.

Mr. Warsh, a former member of the Federal Reserve Board, is a distinguished visiting fellow in economics at Stanford University’s Hoover Institution.

xcsler_returns

My entire life they’ve harped about hyperinflation being right around the corner yet it has never come. If anything we’ve been closer to deflation.

WayneKrane

I wonder if Warsh’s would be writing articles arguing for additional stimulus if Trump had been re-elected?

whacim

Economists are obsessed with inflation that never happens

Khayembii

Housing building has slowed over the years that has had a larger impact on home prices that low prices. See Japan. This is austerity writing as if the US was a pegged currency like the Euro or the US dollar pre-1973. Poor understandings embedded in this alleged analysis

SRV1981

Palihapitiya’s $16 mln bet on Clover worth $682 mln on Reddit rally

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Before you know it, we’ll have a Meme Price Index (MPI) consisting of the most meme worthy stonks.

You’ll be able to get into stonks without having to trawl through a mountain of shitposts, by simply buying meme-based ETFs

DerpDeHerpDerp

palihapitiya is pompous, arrogant. He is like scavenger investor.

IssueComprehensive24

These pockets of the market with extreme speculation have made a lot of people money on the way up, and it’s inevitable that the same will happen on the way down. People don’t seem to care that companies are shorted for a reason and that many have poor business models and/or significant red flags (including this one).

mcoclegendary

I don’t know why but i’ve really started to dislike Palihapitiya over the past year while I was always a huge fan of his. Just became very arrogant it seems. Good for him though

auweemypeepeehurt

>Clover shares ended trading up 86% on Tuesday as it became the latest ‘meme stock’ to capture the imagination of amateur investors on Reddit and other social media platforms. The shares had deeply underperformed the wider market and traded below the SPAC’s IPO price since February, when short-selling firm Hindenburg Research accused Clover of concealing from investors a U.S. Department of Justice enquiry into its business. SPAC managers are awarded warrants and founder shares that result in them owning a much bigger chunk of the combined company that their investment would otherwise entitle them to.

Pessimist2020

Brexit: Forced relocation of derivatives clearing from City to Frankfurt would only hurt EU, LSE warns

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Sounds a bit biased from LSE.

Juhani123M

Ahh LSE the institution that will be losing business revenue telling it is a bad move, blimy!

WPackN2

Why would it hurt the EU and not the UK?

Mobile_Busy

What BS. In the worst case scenario Frankurt stays the same. Europe as a whole can lose from the Brish losses, but since the UK is not in the EU then why should we care.

Suissetralia

Reminds me of the tobacco industry funding studies about health effects of smoking….

fite_ilitarcy

U.S. Senate passes bill to raise fees on biggest mergers

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“The bill – co-sponsored by Democrat Amy Klobuchar, the top antitrust senator, and Chuck Grassley, the top Republican on the Senate Judiciary Committee – would lower the fee for smaller mergers under $161.5 million to $30,000 from $45,000. But for deals worth $5 billion or more, the fee would rise to $2.25 million from $280,000.”

BikkaZz

Political theater, this will do nothing

identitytaken

Aka irrelevant

cuteman

So basically big mergers pay more fees to increase the governments budget to investigate company mergers for anti trust violations?

niggleypuff

Why not make it percentage based instead of flat fee? Surely that would yield better results and would be mire equitable.

01123581321AhFuckIt

City bankers would rather quit than move to European capitals following Brexit

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Breaking news : bankers have families and friends where they worked for decades. Who would have thought.

BoldeSwoup

So if your job asks you to move to another country and you don’t want to move your entire family, this is news?

Waesrdtfyg0987

Would that stop the capital from moving though?

Bankers can always be replaced, favorable banking and investing circumstances however, can’t.

b_lurker

Nobody is irreplaceable.

eeeking

I don’t think this was unexpected by anyone. Majority of the City talent was always going to choose London over Frankfurt, Paris or Amsterdam.

I have spent time in all those cites and London comes out on top by quite a margin if you have spare capital as most bankers do.

ChelseaFC-1

Why a Failing New Jersey Deli Is Valued at $100 Million: A Theory

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This has been solved. It’s nothing shady and perfectly legal. It’s an investment vehicle to make foreign investments through domestic entities. Planet money interviewed the architect of the plan.

JeffreyElonSkilling

The only way to find out is to go there and have a sandwich.

Mobile_Busy

it’s just masquerading as a sandwich shop to keep up appearances that it’s a functioning business. In other words, they speculate, Your Hometown Deli may be a stalking horse in a kind of accounting game aimed at fast-tracking another — most likely foreign — company to the U.S. public markets, all while flying under the radar of regulators.

fakeredditemailz

I have a coffee shop I’d like to take public. I value it at $384M. How do I go about attracting these type of investors?

EGR_Militia

SPACs are ridiculous and they show that our regulatory agencies are toothless. The market is less regulated and more opaque than it was before the Great Recession.

nirad

G7 nations reach historic deal to tax big multinationals

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“However, the measures will first need to find broader agreement at a meeting of the G20 – which includes a number of emerging economies – due to take place next month in Venice.”

lesllle

Guess who’s moving to Singapore

MCP1291

where does the collected tax money go?

mnwilkinson

This could potentially hamper growth in countries that are trying to make themselves lucrative for foreign direct investment

IshanBagai7

15% of what? Taxable income? Income statement pretax profit?

RummyMJR15

Ex-TD Ameritrade CEO warns meme stock traders that leverage could ‘rip your arms off’

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FFS, financial institutions have been leveraging for ages, this was a critical spot in 2008 crisis, and it is now, with rehypothecation.

The thing is, it’s not about ‘meme stock traders’.

feckdech

His error is in assuming that they are trading on margin, when in fact they aren’t.

duhbird410

As if a mere human could rip off the arms off an ape…

banjo_assassin

Yeah. And?

If you’re leveraging meme stocks you probably know full well what you’re going. Every little guy pouring a couple hundred bucks in for the meme is not going to get fucked over. They’re not doing anything serious, they’re just in it for the ride. They’re just going to lose the money they put in, something they’re fully prepared to do.

And if you don’t know what you’re doing… you’ve been warned for months now.

Snownel

Did he tell the same thing about leverage to institutional investors or hedge funds ?

Force_Professional

This is what the Financial Times displays when there’s an error 404

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I learned more about Economics from this 404 page than my college Macro Econ course.

SuddenDeathWish

This is awesome. Too many companies miss the fact that 404 is an opportunity to put something in front of an interested party. Rather than throw it away, embrace it. Knowledge and humor go a long way. This will keep people coming back to the site.

aboutelleon

Whatever page you were looking for, this is better

2penises_in_a_pod

This is really good the programmers had fun with this page. I loled at the tech team taking the money and doing nothing with it.

realmastodon2

I died when I read moral hazard.

vivekisprogressive