Oil Prices Stabilize After Omicron- Driven Friday Selloff; Crude's recent volatility has been sparked by worries that Covid-19 travel restrictions will weaken the global economy

    Oil prices stabilized on Monday, clawing back some of their losses after a new variant of the coronavirus fueled crude's worst trading session since April 2020. Oil fell 13 percent on Friday (Nov 26) but is still up about 45 percent for the year, ending the day at $69.95 a barrel. Crude's recent volatility marks the latest big swing in energy markets sparked by worries that Covid-19 travel restrictions will weaken the global economy and sap demand for fuel. In the past 20 months, oil has frequently fallen sharply when new variants and travel restrictions emerge, only to later rebound when demand picks up and large producers instill confidence in their supply curtailments. Some analysts expect a similar pattern to play out after scientists detected the new, fast-spreading Omicron variant. While new travel restrictions could dent the recent recovery in fuel demand, some traders now expect the Organization of the Petroleum Exporting Countries and allies to delay projected supply increases. 

    Brent crude, the global benchmark of oil prices, added 1% to $73.44 a barrel on Monday (Nov 29). Both U.S. crude and Brent are roughly 15 percent below multiyear highs that they hit in October, potentially offering some relief to consumers and businesses who are facing some of the highest costs for fuel and other products in years entering the winter. Worries about high inflation prompted the U.S. and other countries to recently tap strategic reserves to increase crude supply, though many analysts doubt the inventory releases will meaningfully affect prices. Many analysts expect the path of the global demand recovery and the response by producers to continue swinging prices. Investors will be monitoring the latest travel restrictions caused by the Omicron variant and holiday fuel demand in the coming weeks. 

        

Link: Oil Prices Stabilize After Omicron-Driven Friday Selloff; Crude's recent volatility has been sparked by worries that Covid-19 travel restrictions will weaken the global economy - The Wall Street Journal - ProQuest

December’s Jobs Numbers Might Be an Early Christmas Present for the Economy

 December’s Jobs Numbers Might Be an Early Christmas Present for the Economy

https://www.usnews.com/news/economy/articles/2021-12-02/decembers-jobs-numbers-might-be-an-early-christmas-present-for-the-economy 

The Labor Department posted today the number of jobs created in November. It is predicted that it will be a high number to continue the job growth seen in October. Currently there is a tight market for labor, and many people are leaving their jobs because they are confident that they will find a new one. In the current market there are too many jobs and not enough workers to fill them. Since the economy and job market is growing, the employees have more control than they had in the past. Although the economy and job market is not yet back to where it was before the pandemic, the Fed is moving forward with plans to withdraw their economic support. The economy is strengthening and the GDP is expected to increase by 5%.  The job market though is likely to remain tight throughout 2022. 

Muddled November US Job Report

Recently, the jobs report for the month of November has been released and gives a muddled but hopeful picture for the future of the economy. After many worries of labor market disruptions plaguing the U.S. supply chain, there appears to still be justified fears of this issue as the jobs added in the month missed expectations by almost half. Expected jobs added was 500,000 while in reality, only 210,000 jobs were added. This has also been somewhat disappointing as economists were hopeful that a strong Black Friday and e-commerce sale would pull the economy upwards. However, it has not come to fruition entirely. However, there are still hopeful signs that the economy is making progress to fully recover from the pandemic. Firstly, many industries that were badly affected by COVID-19 continue to grow back in hopes of achieving productivity levels seen before 2020. Industries include hospitality, travel, airlines, and retailers. Job growth for these respective sectors have continued to rise moderately which suggests that the economy is still expanding in certain areas even as other sectors overheat or begin to slow down. Another sign of recovery is the increase in women returning to work after the sudden transition of schooling to online classes at the outset of the pandemic. Especially with a fragile economic situation during 2020, it made it even harder for women to find work that could align with their family life. In the short term, I think this job report shows that there may be more turbulence to be expected as the economy begins to slow down. Coupled with the current supply chain issues, inflationary pressure has begun to creep in and has already increased the prices of everyday goods. But I am hopeful for the future as the U.S. slowly recovers from this hiccup in growth and continues to ride the wave of this historic recovery. Credit: https://thehill.com/policy/finance/economy/584297-five-things-to-know-about-the-november-jobs-report  

Biden: Fact-checking claims about US economic progress

Disclaimer: This blog should not be interpreted in any political way. It does not represent anyone’s political view on Biden’s presidency, but rather a comparative evaluation for his performance in the economy using data from reliable sources.

1.     Biden: “we're experiencing the strongest economic recovery in the world”.

Indeed, there has been much good news about economic recovery on the news lately. Strong retail sales, falling unemployment, the near-record stock market (until the Omicron News broke), growth rate at pre-pandemic level, etc. However, data shows that a large part of the recovery happened under former president Donald Trump.

2.     Biden: “Our economy has created a record 5.6 million jobs since I became president”.

The US Bureau of Statistics shows that the US economy added 5,583,000 jobs since the inauguration of President Biden. Indeed, this is the highest number of jobs created in the first 10 months of any presidency since records began in 1939. But taking into account of the low base point of jobs during the pandemic, the number is not all that impressive. Controlling for the 22 million jobs lost during the pandemic, only around 3 million new jobs are created during the first 10 months of Biden’s presidency.

3.     Biden: “Wages are rising”

Data shows that workers' wages are up to 4.9% this October compared with the same time last year. One reason could be the recent spike in the shortage of workers in the United States. But inflation has also been rising, which means that the cost of living is going up. The Labor Bureau of Statistics estimated that wages actually decreased 1.2 % after controlling for inflation.

All GDP, unemployment, inflation are essential macroeconomic indicators, and all of them discredits President Biden’s claim about the "historic progress" that the U.S. had made on the economy in the last 10 months. Therefore, it is reasonable to conclude that the economic recovery has been progressing, but just not as impressive as what the current administration claims to be. 

Credit: https://www.bbc.com/news/59402975

Omicron Keeps World Jittery as More Information Drips Out

 As we discussed briefly in class today, there is still a significant amount of new information emerging regarding the omicron variant of COIVD. It is not well known if this variant is stronger than the others, or if it has weakened. This article discusses how the news of the arrival of the new strain of the infection has sprouted new "jitters" for the world. It states that the delta variant is the dominant strain and how it has continued to unsettle nations, especially those located in Europe. Many countries are still dealing with large infection surges and hospitalizations and are considering mandatory vaccinations.

As mentioned before, there is much still unknown about omicron including how contagious it is and whether it can evade vaccines. Nonetheless, governments have rushed to impose restrictions they had hoped they wouldn't have to use again. The first known cases were seen in West Africa and the Gulf region and there are already further reports in Japan by a man who came from Peru via Qatar. The article discusses how the United States is working toward requiring that all air travelers to the country be tested for COVID within a day before boarding their flight while those who are fully vaccinated may present a test taken within three days of boarding. There are still significant concerns regarding the delta variant and any new variant of COVID including the new omicron strain. I wonder how much longer global economies can continue to survive with the supply chain crisis, decreased tourism income, and many other forms of income revenue.

https://www.usnews.com/news/business/articles/2021-12-01/japan-suspends-new-reservations-on-all-incoming-flights

Biden’s Attempt to Lower Gas Prices

As we all know, gas is extremely expensive right now. President Biden realizes what this is doing to American consumers and has finally put his foot forward to help. 

Biden authorized the release of 50 million barrels of oil from the Strategic Petroleum Reserve. Biden also said that he released the reserve at the same time as leaders in Japan, South Korea, India and the United Kingdom, which would also release their own reserves. 

This effort will have no effect on gas prices overnight, but eventually will affect the rising prices. 

Biden later said that the release from the reserve was intended to relieve high prices in the short term. However, a strategy to transition to other fuel sources would be more effective in the long term.

U.S. Energy Secretary Jennifer Granholm said the White House hopes to see gas prices drop down to pre-pandemic levels. 

Article : https://www.houmatoday.com/story/business/2021/11/27/president-joe-biden-opens-strategic-petroleum-reserve-oil-gas-prices/8764402002/

U.S. Job Growth Rebounded in October

 

The unemployment rate fell to 4.6%, as the U.S. added 531,000 jobs in October. In the past two months, job growth was stronger than anticipated. In September the unemployment rate was 4.8%, and in October there was a 0.2% drop in unemployment. According to the report, the labor market and economy is recovering after the contagious delta variant of the COVID-19. Strong demand from consumers are rapidly increasing wages, and employers are desperate to hire to meet the strong demand. Employers are also offering more flexible hours and bonuses to attract employees. Households are spending their savings, which has been boosted by federal stimulus and extra unemployment benefits. All these benefits are attracting people back into the labor force. As employers are entering to holiday shopping season, they need to hire more employees to meet the needs of the consumers. As a result, higher demand may lead to higher prices and higher wages could lead to higher inflation, and if firms raise their prices, The Federal Bank has approved plans this week to buy back its bond due to inflationary concerns.

 

 

https://www.wsj.com/articles/october-jobs-report-unemployment-rate-2021-11636061282?mod=hp_lead_pos1

Afghanistan's economic crash since the Taliban takeover

 Since the Talibans takeover of Afghanistan in mid-August, the economy has seen a major crash. The Afghanistan economy has been said to all but collapsed at this point and has led to a bigger problem being a humanitarian crisis. Before there was aid from other countries that essentially propped up the economy, but now that money has vanished, and state assets are frozen along with economic sanctions have isolated the economy from global banking. This has led to a cash shortage that is leading to the demise of many businesses and banks. This has also led to prices sky rocketing leading to the bigger problem being the humanitarian crisis that it is triggering. A report from the WHO warned around 3.2 million children would likely suffer from malnutrition in Afghanistan. To add to it, 1 million of the 3.2 are even predicted to die as temperatures drop. Countries such as the United States have provided aid, but to the near borders in other countries. It will be interesting to see how the new leadership in the Taliban look to deal with both of these problems, if they deal with them at all. The biggest issue is first the humanitarian crisis, but if they don't fix the economic system the system may never be able to be the same and the humanitarian crisis might just continue to get worse. 

Afghanistan's economic crash

The Fight Over the Hybrid Future of Work

 https://www.economist.com/the-world-ahead/2021/11/08/the-fight-over-the-hybrid-future-of-work

With the lockdowns from the Covid-19 pandemic, it lead to a change in the way the world went through their everyday life. Almost everything went virtual in the blink of an eye. In the spring of 2020, about 60% of total working hours were conducted from peoples living rooms, kitchens, and home offices. It was an experiment that has never been done before. 

Employers found that workers reported higher levels of satisfaction and happiness when they were able to work from home. Surveys suggest that workers would like to work from home 50% of the time compared to a 5% of the time before the pandemic. 

Managers done seem as happy about remote working. Firms expect that 15% of the work is to be done from home which is half of what workers would actually like. This is because of the perception that workers are more productive in the office and it creates a better company culture.

The answer to this is a 'hybrid' approach. Research suggests that a mixture of home and office can actually create the highest efficiency and productivity. Firms have many incentives to offer hybrid work especially fighting to retain talent (human capital). The shift to hybrid work will now require a different set of skills for workers/managers. It will be essential that workers/managers are able to communicate well using digital tools.

There are already signs of hybrid paying off. Surveys by Gallup found that employee engagement is near an all-time high. Further changes will also be made in 2022 to encourage employees to come into the office more by creating a better working environment and perks such as fitness centers and better food. Overall this will create a better environment for workers.

Hope for Afghanastan

 Under the latest economic summit that took place in Turkmenistan, several Asian countries have vowed to provide economic assistance and relief Afghanistan. Some of these countries include Iran, Pakistan, and Turkey, which plan to help prevent the economic and social collapse of Afghanistan. These nations, which are all primarily Islamic, have the citizens in mind, which have struggles since the Taliban took over earlier this year. By providing relief in the form of aid, investment, and other resources, these countries plan to bring badly needed physical and social infrastructure, which would in turn spike foreign direct investment. 

The pressure on Afghanistan to accept these aid efforts and attempt to form a legitimate state is heavy. Given fashion in which the US pulled out of Afghanistan, it is highly unlikely that the US would provide centralized aid in any fashion. Along with this, other western nations have the memory of a terrorizing Taliban fresh in their mind, so a united global outreach is very unlikely. 

Source: https://news.yahoo.com/asian-leaders-economic-summit-vow-185744122.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAClRtJ-r4HRKBE9Y1GThAiFb98NbFn9ltjo0nbOj5rD5JwZF7dfvrxqeSX5BsAhBGWhRe_e7V5_FvP8f9Vg1ra7dDPGRSbh0ymqwEDz_yYvmbtjT7uvPdOj_WOyo__yOABrP_TohydzlCleO6dF1BYbsM2lsJlFx6m2YR2xI-dDx

Taiwan sends jets after 27 Chinese planes enter buffer zone

 Over the past couple of months, there has been an ongoing conflict of sorts between China and Taiwan which has been partly field by the United States. About two months ago the United States president Joe Biden said that the United States would come to Taiwan's aid if China were to attack it and while this may have seemed like a fever dream, the war between these two countries might be closer than once thought. 

Today Taiwan reported that twenty-seven Chinese planes have entered Taiwan's "buffer zone" which is just the latest in a series of Chinese incursions as part of China's pressure on the self-ruled island. Taiwan warned China about entering the buffer zone but was only met with 27 planes that entered the southern part of the island. These twenty-seven planes were a part of a series of events ordered by Chinese president Xi Jinping to "Support and strengthen the armed forces",  this also serves as a warning as China has democratic control over the island and will use force if necessary to remind them that they are as such. China  "refuses to recognize the island’s government "  and will continue to do so as long as Taiwan exists. While it only seemed like a dream, this is real and war between these two countries is more realistic and closer than one would think.

Turkish lira crashes to ‘insane’ historic low after President Erdogan sparks sell-off

 Turkey's currency the lira continues to devalue against the dollar as the countries central bank inexplicably continues to slash interest rates even as inflation rises to double digits. The lira has been on a downward trend since 2018 after president Erdogan looked to boost the economy by slashing interest rates and with the onset of the pandemic the rates were further lowered. However lower interest rates come with inflation, which is now nearing 20 percent in Turkey. One would think that this would be a good time to start increasing interest rates but the central bank is looking to do anything but that. The central bank seems to be operating under the directions of the president who believes that higher rates will increase inflation while also slowing down growth and job creation. 

This inflation must be severely hampering the citizens goods to be able to buy basic goods as wages take time to adjust. The inflation is also bad for Turkey's foreign denominated debt which gets harder to pay off as the currency devalues.

source:https://www.cnbc.com/2021/11/23/turkish-lira-plummets-to-historic-low-after-erdogan-sparks-selloff-.html

New unemployment claims fall to 52-year low: Here are the best and worst states for jobs

 New unemployment claims fall to 52-year low: Here are the best and worst states for jobs 

By: Emily McCormick

https://finance.yahoo.com/news/the-best-and-worst-states-for-jobs-as-new-unemployment-claims-fall-to-52-year-low-171331472.html

“The number of Americans applying for first-time jobless claims reached the lowest level since November 1969, with the number of filings dropping to 199,000”. The economy has significantly improved since the highs induced by the pandemic. South Dakota was the state with the lowest insured unemployment rate. It is good to see that states are recording low unemployment rates, but there are still states who have not been able to turn it around as easily. States above the national average of 1.3% insurance unemployment rate are California, Nevada, Alaska, Hawaii, Illinois, Pennsylvania, and D.C. Insured unemployment rate is defined as the ratio of people on unemployment benefits divided by a state’s labor force. 

It is positive to see many states lowering their insured unemployment rate, but despite what state you live in I think it is important to look at the aggregate and look at the bigger picture looking at it as a whole country to get a better understanding of what is in store for the future. Workers hold a lot of power for the first time since labor unions have declined, workers still have the ability to not work and maintain their standard of living due to previous last year savings. If they do choose to work, workers are in high demand as there are still labor shortages and supply shortages.

Equities, oil prices, U.S. Treasury yields all drop on COVID variant fears

Shares tumbled on Wall Street on Friday as they reopened after Thanksgiving, while European stocks saw their biggest sell-off in 17 months and oil prices plunged by $10 per barrel as fears over a new coronavirus variant sent investors scurrying to safe-haven assets.

This news correlated with the World Health Organization (WHO) on Friday designating a new COVID-19 variant detected in South Africa with a large number of mutations as being "of concern," the fifth variant to be given the designation.

Unofficially, the Dow Jones Industrial Average (.DJI) closed down 2.53% at 34,899.34 in its largest percentage drop in more than a year. The S&P 500 (.SPX) lost 2.27%, its worst one-day drop since Feb. 25, and the Nasdaq Composite (.IXIC) dropped 2.23%, the biggest one-day route in two months.U.S. markets closed early on Friday after being shut all day on Thursday for the Thanksgiving holiday.

It is very interesting to note that far from being gone, the pandemic still very much affects the economy with every new information being found on it. One might not make a correlation between oil prices and the pandemic, but it continues to show its affect on multiple facets and industries.

America must prepare for war with China over Taiwan

 China’s massive investment in the People’s Liberation Army (PLA) may show China is preparing to fundamentally change the status quo and preparing for possible war with the United States over Taiwan. To deter China, the United States must rapidly build up its forces in the Pacific, continue to strengthen military alliances in the region to ensure access to bases in time of conflict, and accelerate deliveries of purchased military equipment to Taiwan.

Taiwan is of vital geopolitical importance to the United States. Its thriving democracy is one of the freest societies on the planet. As World War II U.S. Navy Adm. Ernest King said, Taiwan is the “cork in the bottle” for Japan. Whoever controls Taiwan will control Japan and the Republic of Korea’s shipping lifelines. Chinese control of Taiwan will give it enormous influence over both Japan and Korea, fundamentally altering the strategic calculus in East Asia and give China its long sought-after opportunity to Finlandize both countries. 

Given the tense relations between the US and China--two competing superpowers-- a potential war adds more to the mix.

India repeals the 3 Farm Laws

Prime Minister Narendra Modi recently repealed the 3 Farm Laws that have been a point of controversy for the Central Government.

The 3 farm laws collectively promised farmers profits by selling their produce in the free market, which was heavily constricted and controlled by the government through Minimum Support Price (MSP) and government-controlled wholesale markets. Loosening or removing these controls would've caused instability in the market for a few months, but they were expected to even-out and reach a equilibrium price like a free market is expected to.

However, the farmers, especially those from the northern states of Haryana and Punjab, where farmers held much bigger areas of land than those in the rest of the country, were not happy with the laws as they feared price dictation and control by companies.

The article linked describes why this was a missed opportunity for the Indian Government to finally improvise and urbanize the farming sector of the nation, but because of some communication and implementation missteps, the government faced the wrath of the largest sector of the economy and had to alas withdraw the laws.

Article link: https://www.business-standard.com/article/economy-policy/withdrawal-of-farm-laws-is-a-missed-chance-for-a-progressive-indian-society-121112200123_1.html

 

Brazil: Amazon sees worst deforestation levels in 15 years

Source: https://www.bbc.com/news/world-latin-america-59341770 

Brazil has hit its highest level of deforestation in the Amazon rainforest. According to the data, approximately 13,235 sq km (5110 sq miles) was lost during the 2020-21 period, which is the highest it has been since 2006.

Brazil’s space research agency has found that deforestation has increased by 22% in a year.

Brazil was amongst some of the nations that promised to end and reverse deforestation by 2030 during the COP26 climate summit. During the conference, many countries pledged to end and reverse the practice. The pledge included $19.2bn of public and private funds. Some of which will go to developing countries to restore damaged land, tackle wildfires and support indigenous communities.

The current figures are not a reflection of what has been happening over the past few months. President Jair Bolsonaro has encouraged agriculture and mining activities in the rainforest.

Broadway's Demise

 Since the pandemic hit, Broadway has taken a big hit due to the lack of revenue flowing in. This has become a worry for many production companies who invest into Broadway shows, making a risky business even riskier due to the pandemic. I am not a specialist when it comes to drama but I do know that the art form relies heavily on picking up revenue from audience attendances.

According to the article, "Crowds were still hesitant to return to recently reopened Broadway, and the producers and investors who spent $3.5m to bankroll Is This A Room and a sister play, Dana H., were not making enough." Similar to movie theaters, drama theaters are just beginning to open back up but it is not looking bright for the business. 

Broadway is already an incredibly risky business, investors rarely get back a return on their investment. I can see this as the last straw for the business as a whole and could cause an end to the historical art form, at-least on a large platform. Do you think Broadway and other drama theaters will be able to get themselves out of this hole or do you think this could be the end for many drama theaters across the globe?

Source: https://thehustle.co/the-economics-of-broadway-shows/

Thanksgiving will cost Americans 14% more this year, survey finds

     According to a new survey by the American Farm Bureau Federation, Thanksgiving dinner will cost 14% more this year. Dinner for a family of 10 will cost on average $53.31- up $6.41 from last year's average of $46.90 which was down 4% from 2019, the lowest in 10 years. Several factors led to this year's increased pricing, including more American's expected to cook at home as well as economic disruptions. Other factors include dramatic disruptions to the U.S. economy and supply chains over the last 20 months, inflationary pressure throughout the economy, difficulty in predicting demand during the COVID-19 pandemic, and high global demand for food, particularly meat. The biggest ticket item- turkey- is up 24% since last year. Taking turkey out of the entire meal reveals a 6.6% price increase compared to last year. The entire Thanksgiving meal price includes other staples like stuffing, mashed potatoes, rolls with butter, cranberries, and pumpkin pie with whipped cream- with enough for leftovers over course.

    U.S. Secretary of Agriculture, Tom Vilsack stated there may be situations throughout the country where a particular grocery store may not have as many turkeys as necessary. However, at the end of the day, there's going to be plenty of food on Thanksgiving plates for Americans. The U.S. Department of Agriculture estimates Americans will spend closer to 5% more on their Thanksgiving meal this year. The Departments knows that even small price increases can make a difference for family budgets, and they are taking every step they can to mitigate that. The good news is that the top turkey producers in the country are confident that everyone who wants a bird for their Thanksgiving dinner will be able to get one, and a large one will only cost $1 more than last year.

Source: https://www.cnn.com/2021/11/18/economy/thanksgiving-dinner-cost/index.html

Hong Kong Customs Seize Smuggled Lobsters Amid Australia Ban

 https://www.usnews.com/news/business/articles/2021-11-16/hong-kong-customs-seize-smuggled-lobsters-amid-australia-ban

Hong Kong customs says officers seized approximately 2,000 pounds each of live lobster and sea cucumbers believed to be going to mainland China months after Beijing restricted imports of lobsters from Australia as tensions escalated between the two countries. The total estimated value of the almost 4,000 pounds of live sea creatures added up to 10 million Hong Kong dollars ($1.3 million). These seizures come after a recent surge in the import volume of Australian lobsters to Hong Kong following China's imposition of an unofficial ban on imports late last year. China had previously accounted for over 90% of Australia's lobster exports. Will this change in imports impact the Australian economy at all, especially given how volatile and fragile all economies are today with supply shortages and COVID related issues?

Job Market

 The United States of America is still recovering from the pandemic but is struck by the increase in the job quitting rate. September marked 4.4 million Americans that make up to 3% of all the people employed in the nation quitting their jobs. Adding to facts, the US Department of Labor stated that the number was 164,000 more than what was calculated in August which is the second-highest month of the job quitting rate ever recorded. One would not be called wrong for blaming the pandemic as the primary reason for the upset in the Labor market. However, it is fair to say that the increasing burden of childcare and early retirement of old people also added to the huge number of jobs quitting. On the brighter side, it is taken as a sign of relief for the unemployed people who are in desperate need of a job. Businesses, firms, and job employers are now keen to offer a higher wage which was reflected in a 4.9% increase of hourly average earnings of labor in October and additional generous job bonuses as the US labor market is 4.2 million short of the required labor. Businesses however have a mixed opinion about the chaotic situation. Some businesses claim that now they can hire people with more skills that fit perfectly with the job’s requirements and also get rid of inefficient labor. The opposition argues that the shortage of labor is slowing down business activity and increasing the cost of production. The cost is then an additional burden on the consumer which is one of the main reasons for the high inflation rate. The US consumer prices have jumped to 6.2% in October from the same month of last year which is a record-breaking fastest increase in the last 30 years. After reading the facts, would it be fair to blame the people who are quitting their jobs for being the center of inflation? Or we should just blame the pandemic for the economic crisis?

Sources

https://www.aljazeera.com/economy/2021/11/12/americans-keep-quitting-thier-jobs-in-record-numbers

Russia and India deal

Russia's most advanced long-range surface-to-air missile defence system will arrive in India by the end of this year. Russia will start supplying its S-400 surface-to-air missile systems to India in the fourth quarter. India had signed a $5-billion deal for S-400 in October 2018 to buy 5 units of the defence system. In 2019 India made its first tranche of payment of around $800 million to Russia. 

Now India is facing a range of sanctions from the United States under Countering America's Adversaries Through Sanctions act. However, the deal was signed in 2016, before CAATS was introduced. India is now on the edge between Russia and the United States. A senior official from the Biden administration called the deal 'a problem' for India-US ties. India has defended the deal by saying that it is at liberty to choose weapon platforms needed and the country from which it would import.

India can not afford to cancel the deal with Russia due to the critical military situation at the India-China border. I have to mention that most of India's military equipment and defence systems come from Russia. The US wants India on its side to contain China's aggression in the Indo-Pacific region

How the pandemic made us more adventurous drinkers

People are well aware of many industries that were impacted dramatically by the COVID-19 pandemic such as aviation, manufacturing, leisure and hospitality, etc. Only a few pay close attention to the alcohol industry. While many suspect a cut back from alcohol due to the shutdown of bars and restaurants along with fewer social interactions where alcohol is involved, alcohol consumption has spiked during the pandemic.

One of the biggest drink trends is that people are becoming more willing to try adventurous drinks and drinks from countries that usually don’t attract mainstream consumers. Odd things like peanut butter or banana-flavored whiskey have since become very popular, so do Austrian and Greek wines. For example, the Wine Society's sales of Greek wines totaled £500,000 in 2019, rising to £700,000 last year, and £2m so far in 2021. Meanwhile, demand for its Austrian bottles increased from £900,000 in 2019, to £1.4m in 2020, and £2.1m this year. Many liquor store owners suspect that it is because people are trying alcohol from the countries (in this case, Austria and Greece) that they were going to travel to but canceled the plan due to COVID. Besides, people have more time and energy to be creative with their drink menus since they are stuck at home with nothing better to do. And alcohol with odd flavors sometimes brings pleasant surprises to boring quarantine times.

Not only are people more adventurous in their drinking choices, but also their drinking habits. Before COVID-19, more than 25 percent of American adults admitted binge drinking, according to the National Survey on Drug Use and Health. In the first few weeks of lockdowns, alcohol sales jumped 54 percent over the previous year.

Easier access to alcoholic beverages is playing an important role in the phenomenon of increasing alcohol consumption: almost every state relaxing its alcohol laws in 2020 in an effort to keep local economies afloat, and liquor stores are now classified as a COVID-19 essential service in all but 3 states. 

Credit: https://www.bbc.com/news/business-58992784

Inflation Reaching Historic Levels as Supply Chain Issues Linger

In the month of October, we have seen the highest rise of inflation in the last 30 years as we continue to deal with the effects of COVID-19 economically. This even tops the inflation growth rates that we’ve been experiencing for the past 12 months as the economy roars back. Compounded with supply chain issues and rising fuel prices, this is a dangerous place for the economy to stay at for the long term. Frankly, this issue is layered with many endemic problems stacked on top of each other that will take time to resolve.

During the pandemic, many people were able to save a lot more money due to the incoming stimulus checks to keep families afloat. But savings also came from much lower consumer spending during the pandemic. This ranged from less luxury goods purchased in fear of what the future holds to reduced spending on gasoline as most people stayed home. This sudden wave of spending once vaccinations have caught supply chains off guard from trying to keep the lights on to booming levels of business never seen before. This has created a bottleneck effect at critical points in our supply chain including our ports and distribution centers. Now, the price of fuel is going up as consumer demand for products shipped goes up as well. Sadly for the Federal Reserve, the effects of monetary policy changes will have limited impact to combat this worrying inflation level. Raising interest rates to cool off businesses will serve to slow down the economy to give supply chains an easier time to deal with the mountain of orders. But the real solutions come from resolving the issues at our ports and getting products onto trucks faster to get products to consumers.

Unfortunately, I don’t think we have seen the full extent of the damage that this blockage in our supply chain will cause. These shortages will continue to dictate the future of our economy and as a result the global economy for years to come.

Credit: https://www.nytimes.com/2021/11/10/business/economy/consumer-price-inflation-october.html

Job Creation on the Rise

Last month, October, the economy saw a significant amount of new jobs. Employers were able to create approximately 571,000 new jobs.  This number exceeds expectations. After coming off a hot month of September with new jobs hitting 568,000, they expected to see job creation take a step back to only about 400,000 new jobs for the month of November. Clearly, the economy exceeded its expectations.

These job creation numbers are very interesting considering the times that we are in. Right now there is a labor shortage in our economy. There is a significant amount of open jobs that are just not filled. Businesses are constantly looking to hire more people. They have had to resort to incentives such as flexible schedules and higher wages. The labor has a majority of the power right now in the economy. For that reason, it is very strange to see new job creation numbers exceeding expectations. 

What are your thoughts on why job creation is continuing to rise at such a high rate considering businesses are already struggling to find labor?

Source: https://www.usnews.com/news/economy/articles/2021-11-03/adp-employers-added-571-000-jobs-in-october-beating-expectations

Crisis in Nigeria

Inflation in Nigeria is hitting its record high this year causing small businesses to squeeze. Cost of raw materials, food, fuel, and etc. keep rising with no sign of coming to a flat top. Small businesses have to cut down on their menu items and cost of production to sustain or they have to pass the high costs as prices to customers, who are also struggling. Nigeria’s economy shrank 1.8 percent in 2020, it is the sharpest decline since 1983. According to International Monetary Fund, Nigeria is expected to grow only 2.5% this year. These rising prices are affecting the growth rate as well. Monetary policy and exchange rate management has further damaged the situation. The central bank had devalued the currency, causing high inflation rate. This is a serious problem in Nigeria because most of their products are dependent on the exchange rate because they import them. All of this has worsened small businesses in Nigeria which makes up 96% of the business and 84% of jobs. These businesses are also reluctant to raise prices in attempt to transfer costs to the customers because they are in fear that people will learn to live without these products are find alternatives. Experts predict recovering from this crisis is going to be far from difficult for the economy of Nigeria, and not so soon. 

Source:

https://www.aljazeera.com/economy/2021/11/8/as-inflation-bites-nigeria-small-businesses-struggle-to-survive

U.S. Recovering At a Rate Biden Likes

 U.S. President Joe Biden said that the U.S. is recovering from the COVI-19 pandemic faster and stronger than expected. This came from payroll gains which made the labor market appear to be back on track. Those payroll gains were nonfarm payrolls increasing 531,000 last month which beat an estimate of 450,000. Biden said that the economy is working for more Americans and that America is getting back to work as the unemployment rate fell to 4.6%. He then claimed that this recovery is historical. This all comes after Biden's announcement of moving parts in his Build Back Better programs and infrastructure bill compiling his economic agenda. Biden will look to use the positive recovery news to influence his economic agenda bills to pass as much as he can. 

Japanese Economic Stimulus

 The economic recession caused by Covid has hit Japan hard, and the Japanese government is taking unprecedented actions to help with the recovery efforts. In order to stimulate the slow economy, Japan plans to put a 30 trillion Yen recovery stimulus into the economy. This is comparable to about $250 billion. While this is not comparable to the US stimulus's in size, it is comparable in its aim. By giving money directly to families with children, Japan plans to give 100,000 Yen per child to families in hope of stimulating both the consumption of goods and services back to their level pre-Covid.

Financing the bill will be quite different from US methods as well. Last fiscal year, Japan had a sizeable surplus that will be rolled over into this year, and the rest will be covered by issuing new debt. This is not surprising, since Japan spends a lot compared to its GDP. This large of bill is not common in Japan and the aftermath of the big purchase may have positive and negative effects for the future that we can not predict. 

Source: https://www.reuters.com/world/asia-pacific/japan-economic-stimulus-seen-topping-265-bln-require-new-debt-kyodo-2021-11-08/

Biden Admin considering vaccine mandate for business with fewer than 100 employees

 The occupational safety and health administration said they were "seeking comment" about whether businesses with fewer than 100 employees should be subject to the COVID-19 vaccine and the testing mandates it is also implementing on bug businesses. This new requirement will force businesses with over 100 employees to mandate the vaccine for their employees or the employees will have to wear a mask and get test for Covid weekly. Since this has been announced administration is now considering implementing this for businesses under 100 employees as well. As of now the administration believes they need more time to access the effects this could have on smaller employers before they go an implement the policy. Personally I find this to be a shock that administration is considering this. considering the labor shortage that is effecting the whole United States, I feel as if making it harder to have one enter the work force is counter productive in trying to lower the unemployment rate. The most recent unemployment numbers had shown a decrease which is good, but could that also be because less people are looking for jobs given a vaccine requirement?

Eurozone Economy Outpaces U.S., China, But Tougher Times Lie Ahead

 

The eurozone economy expanded rapidly, and mainly this was due to the loosening of social restrictions and widespread vaccinations that powered the region’s comeback from the pandemic. However, the supply-chain issues and the increase in prices are expected to hold growth back. Eurozone consists of 19 nations, and the Gross Domestic Product for the 19-nations grew at a seasonally adjusted rate of 9.1% in the three months. This is significantly faster than the 2% growth rate by the United States and around 1% for China over the same period. Analysts predict that the U.S. economy is expected to grow in the coming months, and they also predict that the growth for the eurozone will decline. The eurozone economy grew by 2.2% in the third quarter. The large manufacturing economies of the eurozone such as Germany and Italy are more dependent on international trade than is the U.S., where the service sector makes up a large portion of the economy. Due to supply chain issues, the manufacturers struggle to secure supplies and raw materials. The initial boost from consumption as Europeans returned to restaurants and began traveling again, the effect is wearing off and now some governments have started to reintroduce social restrictions as the cooler weather leads to a rise in COVID-19 cases. France and Italy were the top performers of the eurozone economies, followed by Germany and Spain. The growth in France was mainly due to the easing of covid restrictions, leaving economic output just 0.1% short of its pre-pandemic level. Whereas in Spain, the growth was held back by a decline in consumption and economic output remains around 6% below its pre-pandemic level.

 

https://www.wsj.com/articles/eurozone-economy-outpaces-u-s-china-but-tougher-times-lie-ahead-11635505779

Black Friday.... Boring?!?

 November is a good month, not just because we get a needed week-long break before plunging into finals, and we get to see our family and friends on Thanksgiving, but also because of... Black Friday. Every year Hundreds of stores and retailers sell off inventory at low prices, sometimes at all-time lows that never will reoccur. However, due to supply chain issues and the Covid-19 pandemic in 2019-2020, this may not be the case anymore.

A recent study by Stacy Widliltz of the SW Retail Advisor tracked retail chains and found out that at 90% of those stores promotions are down from that of 2020. Electronics is not as big as it was in 2020 being down from then almost 2%. Bigger stores like Target, Walmart, and Costco are still having the sale but will not have as good deals and products due to, you guessed it, supply shortage issues. Luckily, however, they are still able to give the sales as they are able to place orders earlier and have their own shipping charters. On the other hand,  companies like Nike inc. and Bed Bath & Beyond are suffering from shortages and delays in shipping, but will eventually have sales later on and steel in 2022.

Whether or not you decide to go out and shop on Black Friday is up to you but know that if you do, you shouldn't be expecting any good deals anytime soon.

source: https://www.blogger.com/blog/post/edit/8612138668326220332/8051654966674824504

 COP26: Fossil fuel industry has largest delegation at climate summit

Campaigners at the COP26 have found that 503 people attending the conference have links to fossil fuel interests. These delegates are said to be [fossil fuel] lobbyists for oil and gas industries and campaigners want them banned from the summit. Campaigners are saying that the delegates are the reasons why 25 years of UN climate talks have not led to real cuts in global emissions.

Fossil fuel lobbyists are defined as people who are part of a delegation of a trade association or is a member of a group that represents the interests of oil and gas companies – this definition was created by Global Witness, Corporate Accountability, and other companies that did the research.

They found that:

                    i.             Fossil fuel lobbyists are members of two country delegations, Canada, and Russia.

                  ii.            The fossil fuel lobby at COP is larger than the 8 delegations from countries worst affected by climate change in the last 20 years.

                iii.            Over 100 fossil fuel companies are represented at COP, with 30 trade associations and membership organizations present.

                iv.             Fossil fuel lobbyists dwarf the UNFCCC’s official indigenous constituency by {approximately) two to one.

One of the largest groups identified as the International Emissions Trading Association, with 103 delegates present including 3 people from BP.

According to Global Witness, IETA is supported by major oil companies that promote offsetting and carbon trading as a way of allowing them to continue extracting oil and gas.

 I believe there should be fewer delegates that are from oil and gas companies because of their selfish interests, which would keep their businesses afloat. The summit needs to come up with more restrictions on these companies, not just carbon trading because that has not had any significant impact on the climate. These restrictions need to be stricter and have corresponding sanctions for any violations, in order to slow down the rate global warming. 

**COP26 is a United Nations climate change summit. COP stands for a conference of the parties and 26 highlights that this is the 26^th conference.

Source: https://www.bbc.com/news/science-environment-59199484

China’s long wait for a tax everyone loves to hate

 Apparently in the past China has never had any sort of property tax. It has experimented with the idea in cities like Shanghai but the Chinese president has now announced his support for property tax that is supposed too  "promote common prosperity".  According to the article China needs this tax because a lot of people avoid the personal income taxes and their value added taxes are to regressive to be effective. Also this property tax would help homes for being bought and held as second homes as people will be discouraged by the additional taxes. However these taxes will probably be extremely unpopular because who like to pay taxes and also they might feel the government wont spend the tax money well. Another worry is that these taxes wont have the desired effect of lowering prices as the trial of them in Shanghai did not have that effect. It will be interesting to see over time if these taxes work out and have an effect on the market as a whole. 

https://www.economist.com/finance-and-economics/2021/10/30/chinas-long-wait-for-a-tax-everyone-loves-to-hate

Congress Passes Joe Biden’s Infrastructure Bill

On November 5th congress passed an infrastructure bill totaling up to one trillion dollars. This bill will be used to update America’s aging infrastructure. Much of the United States’ infrastructure has not been touched since its origin over 100 years ago. America is constantly growing and changing so it is important that our buildings, bridges, roads, etc. do too. The allocations of the bill are as follows:

$2.5 Billion - Inland Waterways

$40 Billion - Fixing Bridges

$70 Billion - Passenger Rail

$65 Billion - Ensuring Americans have access to high-speed internet

The list does not stop there, and much will also be allocated to highways, airports, electricity grids, water pipes, etc.

This bill is Joe Bidens and the Democratic Party’s first major legislative success since the shorter stimulus package passed earlier this year. This bill constitutes half of Biden’s “Build Back Better” agenda. 

Although America’s infrastructure is said to take $2.6 trillion dollars to build it up to a satisfactory level which this bill will not cover fully. This bill will be a great start in the right direction for a real difference. From 2022 to 2026 federal infrastructure spending as a percent of GDP will rise from 0.8% to about 1.3%. The impact that this may have on the United States is great. For every $100 billion dollars more spent on infrastructure, it may immediately boost growth by a tenth of a percentage point. This bill will also provide an opportunity for private investors to join the government’s efforts, which could both enlarge total spending and impose more financial discipline.

This is a step in the right direction for America’s infrastructure, but this will still be a challenging obstacle to overcome. Especially being that American’s are reluctant when it comes to being taxed compared to other rich countries, and the infrastructure is a direct result of taxes.

https://www.economist.com/united-states/joe-biden-passes-the-less-contentious-half-of-his-legislative-agenda/21806187

Wall Street 'permanently changed' by meme stocks, retail trading: star YouTube trader

 https://finance.yahoo.com/news/wall-street-permanently-changed-by-meme-stocks-retail-trading-star-you-tube-trader-164910032.html

By: Ines Ferré·Markets Reporter

If you have been following the stock market in the last year, you have seen some anomalies in the stock market as “meme stocks” have seen massive spikes in stock price. “Meme Stocks” refers to stocks that are not viewed as fundamentally sound stocks that have seen large spikes in price change due to discussion boards such as Reddit. These discussion boards will pick said stock and a wave of people will invest in the stock driving the price up artificially. When retail traders have been asked about this phenomenon they have said that the market favors hedge funds and big investors and this craze levels the playing field. The goal of this craze seems to make the market more transparent. Well-known stocks that have been involved in this craze have been AMC and GME. Despite both stocks falling from their highs, they still remain over 50% higher than they were pre-surge. The discussion board army adds an interesting factor to the stock market because it adds an element where if you are paying attention to the right discussion post you may have the ability to invest in a stock that may surge 80% in one day.

Brexit: 'Serious consequences' if Article 16 triggered, warns EU

 Brexit: 'Serious consequences' if Article 16 triggered, warns EU

https://www.bbc.com/news/uk-northern-ireland-59167024 

In the wake of Brexit, the UK and EU are still having trouble coming to an agreement for trade. Currently there is a Northern Ireland Protocol put in place by the Brexit term agreements that controls the flow of trade from Great Britain to Ireland. The products from Great Britain are taken to ports in Northern Ireland, and then move across the border into Ireland. The Protocol is causing difficulties for businesses and the EU is attempting to ease checks and and controls for the goods moving into Ireland. These changes have not been accepted by the UK and are causing issues between Great Britain and the EU. 

Great Britain has threatened to invoke Article 16, which invoked means that there would be a suspension of goods traveling from Great Britain to Northern Ireland. This would lead to significant issues for Ireland, as they would not be receiving any goods from the UK. Irish officials are not fond of the Protocol in the first place but are even less fond of the thought of the UK invoking Article 16. I think that the UK needs to try harder to work the EU, as they were the ones who decided to leave. The United Kingdom knew when it left the EU that they would not be able to easily make new trade deals that benefitted them because the EU needs to crack down on Britain so that other countries don't try to leave as well.  

USA 2022 economic crisis

 The US will be facing another economic crisis in 2022 if the labor market shortage is not fulfilled. Ever since COVID - 19 and stimulus checks people have become comfortable living without jobs and hence there is a labor market shortage. Usually, this shortage is quickly overcome because there is only a short period where people can live without a pay check. However, over the past two years, during the global pandemic, Americans have been saving more than they have been spending, which is allowing them to stay without a job. 

About 51% of the firms have reported that they have labor shortages. Last year 52% reported that they are having trouble finding qualified candidates. This year 74% of businesses have reported the same thing. Businesses have increased the labor prices but this will increase the cost of living which will cause inflation. 

Here are some reasons why there is a labor shortage;

 - People are scared that the pandemic will hit again. 

 - The mask and vaccine mandate in workplaces has limited people to. getting jobs. 

- People are expecting higher salaries.

- Americans have become more selective with their job search. 

Experts suggest that if the USA goes into 2022 with this labor shortage then there is a serious threat to the economic growth of the country.

Source: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=&cad=rja&uact=8&ved=2ahUKEwjvsa_m24b0AhV-pnIEHSTEDZIQxfQBKAB6BAgPEAI&url=https%3A%2F%2Fwww.cnn.com%2F2021%2F11%2F04%2Fperspectives%2Flabor-shortage-us-

Diwali sales break 10 year records in India

For the first time in 10 years, Diwali sales crossed 1.25 Trillion Indian Rupees (16.85 Billion USD). Sales majorly consisted of earthen lamps, candles, paper lamps, sweets, toys, clothing, foods, and so on. This growth in sales in those areas helped craftsmen, potters, chefs and small businesses.

Surprisingly, on most Diwalis, fireworks take up the highest share of sales, but recently, due to rise in online shopping and climate change advocacy and education, people are reducing expenditure on fireworks. Online retailers, especially gigantic ones like Amazon, Flipkart and JioMart do not by default sell fireworks. Climate change advocacy and literacy has also slumped fireworks expenditure.

India's festivities do not seem to be hampered by its rising inflation and slowly recovering economy. With supposedly India's biggest wedding season coming up, jewelry and clothing sales are predicted to skyrocket. Such boosts in economic activity should help heal the economy faster.

Article Link: https://www.business-standard.com/article/companies/diwali-festive-sale-crosses-rs-1-25-trn-breaks-all-records-in-10-yrs-cait-121110500886_1.html

Also, taking a small tangent, on October 31, Chinese Communist Party (CCP) owned Global Times released an article detailing how boycotting Chinese products would hurt Indian economy, but as evident, India beat previous 10 years' records and shattered this article. The article outlines how Chinese products are good quality, cheap, and have helped grow Indian economy over many years. It weirdly mentions "India's GDP contracted an unprecedented 7.3 percent in the last financial year that ended in March 2021" but fails to recognize that India overshot expectations on its economic growth and is headed towards the endemic stage of the virus in the nation. 

https://www.globaltimes.cn/page/202110/1237749.shtml

Chinese military base in Tajikistan

 China creates another military base in Tajikistan. The approval has been granted by the Tajik parliament. The government of Tajikistan said that they need this military base to counter security threats from Afghanistan. This base will be located right on the border with Afghanistan. This base will be owned by the Tajik defense group, but it will be built with Chinese funding. The incentive of this military base is that it would carry out policing duties focused on combating organized crime. Also, the Tajik government has also offered full control of the pre-existing Chinese military base to Beijing. This base is located close to Pakistan. Tajikistan has offered absolute autonomy to China of this military base. Moreover, China will not have to pay rent for this base. What is the reason for this decision? In my opinion, to get more aid from China. China is trying to build its military base in Central Asia. Central Asia was always an important region for Russia. During the Soviet Union, countries such as Kyrgyzstan, Kazakhstan, Turkmenistan, and others in Central Asia were part of the Soviet Union. During the last decade, China is expanding its military, economic influence in this region. Also, China is the largest partner of all countries in Central Asia. Many students used to apply for universities in Moscow. However, this trend has changed in the last decade. China offers numerous opportunities for students from Central Asia. China is winning the game in Central Asia. Its gain might seem small. However, Chinese geographical influence in this region would be profound

Initiative to Curb Effects of Medical Debt in Our Future

The political action group known as Fair Fight, led by voting rights activist Stacy Abrams, has taken on a new initiative to tackle medical debt for working families. The group has taken its first step by donating $1.34 million to an initiative that will help alleviate debt for many families starting in the US South. The project is run by another organization called RIP Medical Debt and aims to settle debt for more than 108,000 families in Georgia, Alabama, Mississippi, Louisiana, and Arizona.

Of the many issues crippling the United States today, medical bills are among the most dangerous for a family financially. One costly disease, injury, or condition can devastate a working class family as they will be forced to pay down debt for many years to come. In some cases, the debt payment can now extend across generations as the price to pay reaches astronomical levels. It is also more likely for you to have health problems if you live in a low income area so you are more likely to develop more serious health issues and the need for more debt to cover the costs. In this regard, it is holding people back from reaching their full potential as exorbitant medical bills keep hard working people in the vicious cycle of paying down debt instead of improving their standard of living.

This donation is a good first step in opening people's eyes to alternatives to the bleak reality. Ultimately, it will be up to our representatives on the state and federal level to pass legislation to expand medical benefits and cap the ever-increasing medical care prices. But to get to that stage, there needs to be a change in hearts and minds to make this an issue top of mind when voters go to the polls in the future. It will require a large public outcry to inflict change at this scale and I hope these organizations will have enough impact to make a difference.

Credit: https://www.cbsnews.com/news/stacey-abrams-fair-fight-action-donation-medical-debt/