Heat wave sacrifice to the European economy
The European heat wave that hit Italy, France and Spain in the past week has reached London, stagnating lives and testing infrastructure. Britain recorded the highest temperature ever this morning as some schools, museums and clinics were closed due to the heat and some trains and planes were canceled. Forecasters reported temperatures of 40 degrees Celsius or 104 degrees Fahrenheit in London today. Authorities issued Britain’s first “red” warning against extreme heat, proclaiming a national emergency in a country accustomed to a warm climate with few air-conditioned homes. In the United States, it is reported that President Biden may declare a climate emergency soon this week. According to the Washington Post..
The human damage caused by heat waves is alarming. Hundreds of people have died all over Europe. In Spain, France and Greece, thousands more had to flee wildfires.
Extreme heat is also hurting the economyAccording to last year’s study by European economists and climate experts. Researcher estimates The heat wave has reduced the annual GDP growth rate of Europe as a whole by an average of 0.5% over the last decade, and can be more than double the damage estimated from the heat wave over the last decade. Reason: Extreme heat now tends to reduce productivity for people who work outdoors, but it is even lower for people who work indoors.
It was a summer pressure cooker for European businesses and consumers. Like everywhere else, inflation has been at its highest level in decades. In addition, the war in Ukraine raised oil and gas prices as Russia threatened to cut off supply. last week, Draft report from the European Commission This year’s eurozone economic outlook has fallen to 2.6% GDP growth, 2.7% in May and only 1.4% next year, down from 2.3% in May.
The heat has already caused great disruption to harvests and is pushing up food prices. Wildfires in Spain, Portugal, France, Greece and Italy, which are experiencing one of the worst droughts on record, threaten to destroy crops or reduce yields. Coldiretti, an Italian farmers’ union, said a fire would cost more than € 10,000 per hectare (about $ 25,000 per acre) to extinguish a fire in 15 years and rebuild its economic and environmental system. Said. The group predicts that wheat production in Italy will decline by 15 percent due to rising production costs and drought.
The heat wave in Europe is certain to exacerbate the energy crisis. European energy crisis Already it was expected that countries in the region would cost $ 200 billion. Yesterday, Uniper, one of Germany’s largest electricity producers, said that rising gas prices and rising electricity demand due to rising temperatures would burn out almost all of the company’s cash and require government relief. rice field.
Lucrezia Reichlin, a professor of economics at London Business School, said the heat wave is straining the already vulnerable European economy. Government finances were also affected as countries that had spent large amounts of money on pandemic bailouts took costly steps to help consumers cope with high energy prices, she said. “All these combinations are negative. The question is how negative it will be.”
What’s happening
Scaramucci’s SkyBridge suspends withdrawals with one of its funds. SkyBridge Capital, run by Donald Trump’s communications director Anthony Scaramucci for 11 days Allegedly forced Suspend redemption from one of the smaller funds that suffered significant losses from cryptocurrency and equity investments. The pivot to cryptocurrencies at the end of last year also negatively impacted the performance of Skybridge’s larger fund, the Multi-Advisor Hedge Fund Portfolio. The multi-advisor hedge fund portfolio had $ 2 billion in assets as of March, down 17% in the first five months of the year. Shareholder letter from early June seen by DealBook.
Apple is reportedly planning to delay hiring. Changes that apply only to a specific team The company deals with a potential recession, Bloomberg reported. Companies such as Alphabet, Meta and Snap have cut their budgets in recent weeks, and like Tesla, some have cut staff as the market declines significantly.
Eight signs that the economy is losing momentum
Expected to be worried. With sustained high inflation, rising consumer prices and declining spending, the US economy is showing clear signs of a slowdown, fueling concerns about a potential recession. Here are eight other steps to signal the previous issue:
Elon Musk and Twitter lawyers are preparing for the first Delaware conference. Both teams will be present this morning in front of Judge Cataleen McCormick (in effect, Because she has a covid). Twitter is pushing for a four-day speedy trial in September, while Musk’s lawyer suggests February. The court provided a public access line for proceeding the proceedings: 774-267-2687.
Assist eight of the most progressive members of the House of Representatives and file a petition to form a union. This is the first substantive by parliamentary staff to organize collectively for better working conditions and pave the way for House Aid to negotiate working conditions, paid and illness, and promotion policies without the threat of retaliation. It’s an action.
Iran’s state-owned energy company has reportedly signed an agreement with Russia’s state-owned energy giant Gazprom. Memorandum, Worth about $ 40 billion Russia’s President Vladimir Putin is visiting Iran today for a rare international visit as sanctions bring the two countries closer, according to Iran’s Ministry of Petroleum News Agency.
Mixed signals from major bank earnings reports
Yesterday, Bank of America and Goldman Sachs reported second-quarter profits, making the last profit among the country’s largest financial companies and Wall Street powerhouses. Bank of America’s profits fell by a third from the same period last year. Profit declined significantly at Goldman, but as with Citigroup last week, strong trading returns allowed us to report higher-than-expected returns. The main points are as follows.
The market was volatile, but there was money to make in the transaction. Second quarter profits for all banks were down year-on-year. However, in some cases, the decline was not as severe as analysts expected. Consumers continued to spend and borrow.
The economy may slow, but it won’t fall into a complete contraction, the bank manager said.
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“There is nothing in the data I see that indicates that the United States is on the verge of recession,” Citigroup CEO Jane Fraser said in a conference call.
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Jeremy Burnham, Chief Financial Officer of JP Morgan, said in a phone call with reporters that he “examined the actual data very carefully.” “In essence, there is no evidence of actual weakness.”
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“This is a challenging market, but I think it’s important to say that 2008 isn’t complicated,” Morgan Stanley CEO James Gorman told analysts.
Most private investors lost money in the second quarter, but market volatility was a boon to banks.. This was especially true for Goldman Sachs, where trading revenue exceeded its rivals, up 31%. In the wake of the financial crisis more than a decade ago, some regulators and major banks, partly backed by legislative changes, have promised to avoid risky bets on the market. Many people now generate an increase in revenue from their transactions, but still say they are less risky than they used to be.
Understand inflation and its impact on you
“If they can no longer trust any bank and no longer trust the housing market, how does that affect people’s sense of security?”
— Zhiwu Chen, a professor of finance at the University of Hong Kong, talks about the impact of a bank scandal in China Exposed systematic problems in the national financial system..
Trump media transactions are said to have leaked a few months ago
A few months before former President Donald Trump’s social media company announced a $ 300 million deal with SPAC, employees of a lesser-known Miami investment company knew that the merger was pending. , Three people familiar with the company’s internal discussions told Times Matt Goldstein. Federal authorities are currently investigating an unusual surge in trading in the days prior to the announcement of trading with the SPAC Digital World.
Federal prosecutors and securities regulators are trying to identify why traders have acquired millions of warrants. Published by Digital World just days before the October 20th announcement of the merger with Trump Media. (Warrants give holders the right to buy shares at a given price.) The day after the transaction was announced, Digital World shares and warrants soared, stocks rose 350%, and warrant prices were around 1,300. % Increased. ..
A federal grand jury in Manhattan has issued a subpoena seeking information about an investment company in Miami., Rocket One Capital, especially Digital World, mentioned in a recent filing. Bruce Garelick, Rocket One’s top executive, was a board member of Digital World until he resigned in the last few weeks.
The exact scope of the federal investigation remains unknown. Authorities have not accused anyone of cheating, and Garelick and other representatives have denied doing anything inappropriate.
However, Rocket One officials are said to have discussed how to profit from pending transactions. Two people familiar with Rocket One’s internal discussions said Garelick mentioned to some employees last summer about the possibility of a merger with Trump Media. Around that time, Rocket One employees were told to do a financial analysis of the digital world, including a warrant, one said. Carl Schoeppl, a lawyer representing Garelick, declined to comment.
This is the latest blow to Trump SPAC trading. Federal authorities are also investigating whether Digital World’s disclosures regarding merger negotiations with Trump Media violate SPAC rules. And the SEC is considering whether to prevent the merger altogether. With the commitment of other investors in response to the deal, it will rob Trump Media of $ 1.3 billion.
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