The Pen team is back with the latest on all things global finance and economy mixed with crypto and blockchain from week 9 which went just fine. As the title suggests the Latin phrases A fortiori i.e. for a stronger reason and ceteris paribus meaning conditions remaining the same. Things happened for the better yet necessary changes are hopefully in the making of change for stronger reasons. For whatever it may be, here's the week 9 wrap-up. Have a good read.
LET THEM EAT CAKE
UK grocery prices have hit a record high of 17.1% due to Brexit, global commodity prices, and the COVID-19 pandemic. Consumers will have to pay more for basic goods and services.
GOLDMAN THINKING OUT OF THE BOX
Goldman Sachs is considering strategic options for its consumer platforms, including a possible sale, spinoff, or merger of its Marcus and Clarity Money businesses. The move is part of the bank's efforts to streamline its operations and focus on its core businesses.
UK house prices have experienced the largest decline in a decade due to recent rate hikes by the Bank of England, which have made borrowing more expensive. Some areas have seen double-digit drops in value, although the housing market may rebound as the economy recovers.
THE FED & FIGHT AGAINST INFLATION
The Federal Reserve's efforts to control inflation may be working, depending on the index used. The PCE index has risen more modestly than the CPI, possibly due to considering consumer behavior. The recent interest rate increase may also help but could slow economic growth.
BTC ATM MACHINES BLANKED OUT
Over 400 Bitcoin ATMs have gone offline in the past 60 days, possibly due to regulatory pressure and operational costs. However, the industry remains optimistic as over 20,000 Bitcoin ATMs are still operating worldwide.
GOLDMAN SACHS SEIZES TO SEE CRYPTO FUTURE
Goldman Sachs is still interested in hiring cryptocurrency professionals, despite cutting 3,200 jobs. Other major financial institutions are also hiring in the crypto space, indicating a growing interest in the industry.
FRANCE IN FAVOUR OF FIRMER CRYPTO FIRM LAWS
France is planning to impose stricter licensing rules on cryptocurrency firms, requiring them to obtain a license from the financial markets regulator before launching their services. The move aims to address concerns about money laundering and terrorist financing in the industry.
SILVERGATE'S BROKEN BRIDGE
Silvergate Bank, which provides services to crypto companies, is facing competition and regulatory pressures, causing its stock to fall over 40% since February. The bank's position in the market may be difficult to maintain, potentially leading to its closure.
RESERVE BANK OF AUSTRALIA PILOTING CBCD
The Reserve Bank of Australia plans to launch a pilot program for a central bank digital currency (CBDC) to explore its benefits and risks. The RBA has no plans to issue a CBDC but seeks to better understand the technology. Other central banks are also exploring CBDCs.
BOC EXPLORING OFFLINE CBCD
The Bank of Canada is researching the possibility of creating an offline central bank digital currency (CBDC) that would function without an internet connection. It has been conducting experiments to test the technology but has not yet made any decisions about moving forward with a CBDC.
CRAMER VS CRAMER
New ETFs have been launched that allow investors to bet against Jim Cramer's stock picks. These ETFs track the inverse performance of Cramer's Action Alerts PLUS portfolio. Betting against Cramer's picks can be risky due to his strong track record in the stock market.
EXCHANGES MIGHT NOT BE QUALIFIED CUSTODIANS
SEC chair, Gary Gensler, has suggested that cryptocurrency exchanges may not be "qualified custodians" under federal securities laws, which is important for them to hold assets on behalf of investors in compliance with the law. Gensler's comments indicate that the SEC may be looking closely at the custody practices of cryptocurrency exchanges.
JOBLESS CLAIMS DECLINE
Jobless claims in the US have fallen for the seventh week in a row and remained below 200,000. This indicates a continued recovery in the labor market from the COVID-19 pandemic. However, there are still concerns about the impact of rising inflation on wages and hiring.
TESLA STOCK TO SELL OFF
Tesla's stock has seen a significant rally, but retail investors are losing interest in the company. The stock is predicted to experience a sell-off this month due to its high valuation and concerns about market volatility.
VISA, MASTERCARD, CRYPTO & BLOCKCHAIN WALKS INTO A BAR
Visa has reaffirmed its crypto strategy, while Mastercard is promoting its blockchain technology. Visa aims to integrate cryptocurrency into traditional financial systems, while Mastercard is using its blockchain for digital identity and other initiatives. Both companies are positioning themselves as major players in the cryptocurrency and blockchain industries.
CHINESE FIGHT & FLIGHT
As China reopens, more wealthy Chinese are expected to move to Singapore due to its high standard of living, education system, and favorable tax policies. The trend is likely to continue as China's economy recovers and individuals look to diversify their assets.
CHINA GDP 5% IN 2023
China has set a 2023 GDP target of "around 5%" in its 14th Five-Year Plan, which prioritizes technological innovation and carbon emission reduction. The lower target reflects concerns about the pandemic's impact and trade tensions with the US. Some experts are doubtful that China can achieve this target.
BURN BABY BURN
US-listed tech firms that went public through IPOs are facing a cash crunch after burning through billions, raising concerns about their ability to sustain operations and continue to grow, as per a Wall Street Journal report.
GLOBAL COMMODITY RECORD
Global commodity trading earnings hit a record of $115 billion in 2021, up 84% from the previous year due to pandemic-induced volatility in commodity markets, high demand, rising prices, and new opportunities in the transition to clean energy.
US RATES LIKELY TO BE LONGER
The President of the Federal Reserve Bank of San Francisco, Mary Daly, has stated that US interest rates are expected to stay low but eventually rise as the economy continues to recover from COVID-19. She emphasized the need for careful monitoring of inflation and adjusting policies to maintain stability and maximum employment.
CHINESE COVID-RELATED WRITEDOWNS
Chinese regulators are investigating Covid-related writedowns made by banks and insurers, amid concerns about the health of China's financial institutions and the broader economy. The writedowns total billions of dollars and are being examined to determine if they were excessive or if the losses were not fully disclosed. The move is part of a wider crackdown on corporate misconduct and financial irregularities.
BARCLAYS BANKERS BORED WITH BORED APES
Two former Barclays bankers have made a 700% profit by selling Bored Ape NFTs. They bought the NFTs for $20,000 each and sold them for over $150,000 each, indicating the growing interest in NFTs and the potential for significant profits in the market. The sale is likely to attract even more attention to Bored Ape NFTs and similar digital assets.
Till We Yield Again