Higher can mean falling farther
It’s interest rate week. The Fed joins the central banks of England, Norway, Sweden and Switzerland in deciding whether to raise interest rates further to dampen rising inflation. A growing number of economists and investors are concerned that continued tightening of monetary policy could drag the global economy down.
All eyes will be on the Fed this Wednesday. Consensus forecasts are for a 75 basis point rise, with the benchmark rate rising from near zero at the start of the year to 3-3.25%. When interest rates rise, lending and economic activity generally slow down, and so does the power to push prices up. So far things aren’t going according to plan. Last week, the government reported that consumer prices rose 8.3% through the end of August last year.
Fed rate hikes have had the most direct impact on housing. Last week, mortgage rates topped 6% for the first time since 2008. Although the impact on house prices has been more muted, homebuying has slowed significantly due to higher borrowing costs. Prices, though much slower than they used to be, still appear to be rising in most parts of the country.
Equity investors are feeling the pressure, too. The S&P 500 fell 5% last week in one of the worst weeks in the market this year. The pessimistic growth forecast is also worrying investors. Shipping giant FedEx warned Friday of a slowdown in business, especially in Asia and Europe. Executives at GE and JPMorgan Chase are also pessimistic.
Some have warned that raising interest rates will do more harm than good. Billionaire real estate developer Barry Sternlicht said last week that the economy could slip into a deep recession unless the Fed pauses in rate hikes. Sternlicht told CNBCIn a note to clients on Friday, Bank of America economists said Fed policymakers are likely to revise their economic forecasts this week to include lower growth and higher unemployment. I predicted that companies are also in trouble. “There is likely to be an earnings shock,” Candice Browning, head of global research at Bank of America, said in a separate report.
this is what is happening
“Pandemic is over,” Biden said. an impromptu declaration made at “60 Minutes” Interview It was meant to reflect the progress the United States has made in its fight against coronavirus. But experts warn that hundreds of Americans are still dying from Covid every day and that much work remains.
BlackRock’s CEO offers to help Ukraine’s economy. Larry Fink met with President Volodymyr Zelensky via videoconference to discuss how his wealth management giant economic recovery fund for Ukraine. A key task for Ukraine is to “win economically and become an attractive country for investors,” said Zelensky.
Donald Trump’s former accountant presents evidence to Congress. Mazars USA, which cut ties with the former president and his family business earlier this year, began turning Trump records over to House investigators. We have investigated the violation.
Hurricane Fiona hits Puerto Rico. US territories lost power yesterday, leaving 1.5 million customers without electricity in what the governor called “devastating” damage. It is expected that it will be strengthened to Category 3 as it progresses.
Britain bids farewell to Queen Elizabeth II. The state funeral for the late monarch began this morning and was attended by President Biden and other world leaders. He said it might help.
“We’re a weird company to buy.”
We are competitive here, but hats off to our friends at Axios today. After selling the company to Cox Enterprises for his $525 million, media publishing co-founders Jim VandeHei, Mike Allen and Roy Schwartz will publish a new book tomorrow. “Clever brevity” It offers a smart, well, Axios-like way to communicate in a world of short attention spans. (JPMorgan Chase staff once asked Axios to cut Jamie Dimon’s 32,000-word annual letter. They cut it down to 1,580 words.)
A former Washington Post reporter and Politico co-founder, Vandejei also has a lot on his mind about the media landscape. Here’s what he told us.
How Axios was sold to Cox: News reports correctly pointed out that Axios was in deal talks with both German media conglomerates Axel Springer and The Athletic, but VandeHei said neither was a good match. “We’re a weird company to buy,” he deadpans.
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About The Athletic he said: The New York Times Company bought Athletic for $550 million.
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Regarding Axel Springer, Vandehei said it was a different worldview. Springer preferred to have a “branded constellation” while Axios wanted to be the star of the show. Additionally, VandeHei and his team wanted to control their destiny. Springer eventually acquired Politico for his $1 billion plus.
Enter Cox, the cable and media company that first invested in Axios last year. Cox helped grow his Axios, eventually offering a full acquisition of the company to help expand, especially in local news. Vandehei’s report on Cox persuaded him to trust his suitor. “We never made a deal because of a bidding war,” he said. “We told them exactly what they needed and they pretty much passed it on.”
Why (some) media companies have a bright future: VandeHei said that Axios is a subscription-based product for professionals, eventually a local news service covering more than 100 US cities, and Axios HQ, a software affiliate that helps companies communicate with Axios. said it will continue to expand.
But while many news publishers are struggling, VandeHei notes that older media companies (such as The Times and The Wall Street Journal) and newer media companies (such as The Information, Punchbowl, and the upcoming Semafor) are doing well. He points out that it is poised to do well by combining journalism with what readers want. “If you can build relationships with your audience and keep your business economics sane, you can succeed,” he said.
Crypto Beat’s New Cops
The Justice Department turned 150 federal prosecutors across the country into crypto police. This network — announced on friday together report It was mandated by an executive order from President Biden in March and includes fraud, tax, environmental and other expert and obvious tech types, said Eun Young, head of crypto enforcement. Choi said. “One of the things that really stood out for us about digital asset crime is that unlike other cases, these are really multidisciplinary and international,” she told DealBook.
Darknet and other gray areas are getting more attention. Illegal markets for drugs, child sexual abuse materials, firearms, disinformation and stolen information, and hacking are “key focuses” of the agency’s efforts. According to Choi, cryptocurrencies are used on the darknet billions of times each year. New unregulated marketplaces, such as decentralized finance (DeFi) platforms, are also emerging in more accessible areas of the internet, raising investor risk and consumer protection concerns as well.
“DeFi is an area of particular concern.” Choi said. What may complicate the agency’s efforts is the fact that DeFi is still loosely defined, especially as it relates to what decentralizes these platforms and products. DeFi advocates often say developers should be largely out of the reach of the police because code, not humans, controls these platforms. “The code is the same as any other tool. There are people behind it.”
The issue has sparked a feud among crypto insiders. His Miller Whitehouse-Levine from the DeFi Education Fund lobby group said:
The departmental approach will be global in scope. “These are fast-moving, complex and difficult situations,” Choi said, spanning continents. “It’s a lot of coordination and early information sharing.”
Cryptocurrency experts inside and outside the government have conducted mixed reviews in the field, with some praising the engagement with other institutions and others saying the report fails to address gaps in international coordination, DealBook said. Some people tell
“The way to go viral is to be really vulnerable. Old school LinkedIn definitely wasn’t like this.”
— Joel Lalgee, Recruiter Gained followers and engagement Dig into personal sharing and on social networks like LinkedIn.
VW puts price tag on Porsche
Volkswagen last night announced plans to sell its stake in luxury sports car brand Porsche. Valuation up to $75 billionThe news marks one of the final steps in setting up one of the biggest IPOs in years. This is a time when the market for listing companies is particularly challenging.
Pricing details: VW aims to sell its preferred shares in Porsche for €76.50 to €82.50 ($76.29 to $82.27). VW’s largest shareholders, the Porsche and Piech families, have agreed to purchase his 25% stake at a 7.5% premium to the IPO price.
Volkswagen plans to use the funds for special dividends and investments in electric vehicle technology.
Porsche’s proposal would break the stagnation of high-priced IPOs. The volatile stock market has cooled interest in new products. At expected valuations, the deal would be his third-biggest debut in Europe, with the negative impact of the war in Ukraine, rising inflation and a worsening energy crisis weighing on stock markets, especially Europe. Ignore the news.
Porsche plans to start trading on September 29th.
speed lead
bargain
policy
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A federal appeals court has cleared a Texas law that allows users to sue major social media platforms for “point of view discrimination” if they remove political content. (NYT)
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UBS is hire content police This is to prevent China’s research reports from being “sensitive”. (FT)
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The Federal Reserve Reportedly take a good look at marcus, the online banking division of Goldman Sachs for retail consumers. (Bloomberg)
best of the rest
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