China's Xi Dials Back Economic Overhaul

There are more signs the Chinese government is dialing back its sweeping economic and regulatory overhaul that is starting to hit ordinary citizens. Stephen Engle reports on "Bloomberg Daybreak: Asia." 

Is China's economic model broken? - FT

Since the early 2000s some China watchers have been predicting that the building boom would lead to a crash. Twenty years on they may have been proven right. The FT Global China editor James Kynge and FT Beijing correspondent Sun Yu discuss what is happening in it's real estate sector, what that could do to China’s economy and means for the world.

 

Evergrande Woes Spread to China’s $12 Trillion Local Market

After months of resilience in the face of concern over China Evergrande Group, the country’s $12 trillion domestic credit market has begun to show signs of strain. Bloomberg’s Rebecca Choong Wilkins reports on “Bloomberg Markets: China Open.” 

3 Major Questions Around Evergrande's Debt And China's Economy That Remain Unanswered

In the past month, Chinese property developer Evergrande has dominated financial headlines for being over $300 billion in debt. Many media reports have made parallels to Lehman Brothers role in the 2008 financial crisis. In this episode of Money Always Talks, we take a look at how things at Evergrande got this bad and what greater questions the saga raises about China's economic growth. 

 

Is higher inflation cause for concern? - The Economist

Inflation rates have been rising all over the world, surprising many economists. While the rich world is paying higher prices for durable goods such as cars, in emerging markets soaring food prices are a greater worry. What is causing this unexpected bout of inflation, and will it last? 

 

The Fed Pushing For CBDC, "Can't Wrap Their Head Around Not Having It"

 From the Uneducated Economist, an interesting view on the Fed's thinking about a CBDC plus a great take on assets, investments, banking, money and the economy generally.

 

Could digital currencies make money more fragile?

While the future is unpredictable, one where digital currencies dominate both money and payments seems a reasonable possibility. The benefits of convenience, lower cost and the possibility of greater financial inclusion seem irresistible. 

However, An area that hasn’t attracted sufficient attention is the potential increased fragility of money. And this has nothing to do with volatile cryptocurrency valuations. 

Find out more HERE.

Robinhood Warns of Meme Frenzy & Britain Wins Key Tax Exemption

Before its much-hyped IPO listing, retail trading app Robinhood has warned investors of another potential "meme stock" rally. 

Boom Bust's Ben Swann and Christy Ai join the program to analyze the pre-IPO news for the controversy-laden app. 

They then take a spin around the globe for a look at international stock market performance. 

Shifting to geopolitics, tensions are on the rise in the South China Sea as the United States and Japan have begun joint military drills in the region. RT's Alex Mihailovich files a report on the growing concern in Southeast Asia. 

Turning to  Europe, where the United Kingdom has managed to receive a key exemption in the newly backed global minimum tax proposal. Hilary Fordwich of the British-American Business Association gives her forecast on the new carve-out and what it spells for London as a banking hub in post-Brexit Europe.

CBDC and Cryptocurrencies are NOT the same

As millions of people start to take an interest in the world of crypto, it is important to understand the difference between a Central Bank Digital Currency (CBDC) and a Cryptocurrency like Bitcoin.

The growth of cryptocurrencies like Bitcoin and Ethereum has led to a greater interest in the technology behind these currencies from startups, individuals and governments alike.

There are many pros and cons to the CBDC economy. Jumping to conclusions based on incomplete understanding of the CBDC world is rife, especially since misinformation abounds and not much has been made public about the launch of the CBDCs by some of the economic giants in the world. 

Find out what these differences are in Arti Agarwal's article "Why CBDCs Are NOT The Same as Cryptocurrencies Like Bitcoin" HERE.

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Is the rush to CBDCs just a fad driven by FOMO?

U.S. Federal Reserve Vice Chair for Supervision Randal K. Quarles called the global rush to roll out central bank digital currencies (CBDC) akin to the 1980s parachute pants fad and FOMO, or the “fear of missing out.”

He was speaking at  the 113th Annual Utah Bankers Association Convention, Sun Valley, Idaho.

He drew a parallel to the world’s knee-jerk infatuation with digital currencies.

“Before we get carried away with the novelty, I think we need to subject the promises of a CBDC to a careful critical analysis,” he said in his remarks.

You can read his full speech "Parachute Pants and Central Bank Money" HERE.

Other comments from PYMNTS.com HERE.

CBDCs and the opportunities for the monetary system

Central bank digital currencies (CBDCs) offer in digital form the unique advantages of central bank money: settlement finality, liquidity and integrity. CBDCs are an advanced representation of money for the digital age and the digital economy.

Digital money should be designed with the public interest in mind. Like the latest generation of instant retail payment systems, retail CBDCs could ensure open payment platforms and a competitive level playing field that is conducive to innovation.

The BIS, in its Annual Report, to be published later today, has a full chapter on central bank digital currencies. Read the full chapter HERE.

 

What are today's biggest business risks?

The world can be a dangerous place. The only certainty that there is is that change happens constantly.

Businesses, as well are faced by rapidly changing environments and the associated risks that they need to adapt to. These can range from supply chain issues because of transport problems or conflicts, to disruptions caused by natural disasters.

Almost 3,000 risk management experts were surveyed for the Allianz Risk Barometer, and the results reflect the top 10 business risks that leaders must watch out for in 2021.

Get the low-down HERE.

Who is going to win the digital money competition?

In a posting in Finextra, Janne Jutila, Managing Director at Internos Partners writes;

‘The two main drivers of competition in digital money are geopolitical and technological – and they are intertwined. China is fast becoming the largest economy in the world and is already almost cashless as commerce is done on mobile platforms like Alipay and WeChat pay. China aims to further boost economic growth, whilst increasing state control, as it imminently plans to scale the use of digital yuan. As digital yuan transactions can be monitored and controlled by Chinese government, it could well allow more freedom in its use outside the country. How much boost the digital yuan will give remains to be seen but enough to add urgency on ECB and FED to progress on their competing digital currency projects.’

Read the full article on Finextra HERE.

The Month Coronavirus Unraveled American Business - A WSJ Documentary

March 2020 began on a high note for American business and ended with the economy in tatters.

This WSJ documentary goes behind-the-scenes to reveal how the coronavirus pandemic ripped through American business during the month of March 2020 -- told through the firsthand accounts of 12 prominent executives. When the coronavirus tore through industry, commerce and society in March 2020, the U.S. economy came to a screeching halt. 

Top executives relive the tough decisions they made as they scrambled to weather the storm. 

American Branch Banking is dying - Why?

The 2008-09 financial crisis was triggered by reckless banking practices that morphed into the global economic system. Though the world has since recovered and moved on from the crash, the banking system that ignited such damage has in some ways never been the same.

In the last decade, 27,943 bank branches have closed in the U.S. The increasing prominence of mobile and digital banking is leading to lighter demand for in-person banking services 

Check out the infographic HERE.

The likely impact of central bank digital currencies on quantitative easing

Many central banks are considering launching digital currencies. Far from a simple technological innovation, central bank digital currencies (CBDC) might persistently alter the size and composition of central bank balance sheets. Martina Fraschini, Luciano Somoza and Tammaro Terracciano analyse the equilibrium effects of the introduction of a CBDC and its interaction with current monetary policies. They show how and when issuing a CBDC might render expansionary policies quasi-permanent.

Read their insightful article HERE.

How covid-19 is boosting innovation - The Economist

Covid-19 has accelerated the adoption of technologies and pushed the world faster into the future. As businesses and organisations look towards the post-pandemic era, what lessons can be learned about innovation?

How will covid-19 change travel? - The Economist

The covid-19 pandemic has devastated the travel industry. But as vaccines are rolled out and global travel slowly picks up, how will the industry evolve, and will holidays ever be the same again? 

Demographics of U.S. Small Businesses

We take a look at the demographics of U.S. small businesses. 

This is according to the Mercator Advisory Group. 

As the COVID-19 pandemic rolls on, banks must prepare for a long winter

Ten months into the COVID-19 crisis, hopes are growing for vaccines and new treatments. But victory over the novel coronavirus still lies some nine to 12 months in the future. In the meantime, second and third waves of infection have arrived in many countries, and as people begin to crowd indoors in the months ahead, the infection rate may get worse. As a result, the potential for near-term economic recovery is uncertain. The question of the day is, “When will the economy return to its 2019 level and trajectory of growth?”

McKinsey’s Global Banking Annual Review, provides a range of possible answers to that question for the global banking industry—some of which are perhaps surprisingly hopeful. Unlike many past shocks, the COVID-19 crisis is not a banking crisis; it is a crisis of the real economy. Banks will surely be affected, as credit losses cascade through the economy and as demand for banking services drops. But the problems are not self-made. Global banking entered the crisis well capitalized and is far more resilient than it was 12 years ago.

Read McKinsey’s review HERE