Monday 26. September 2022
INTERNATIONAL NEWS
Protests continue in Iran
Protests began on September 16 after the murder of 22-year-old Mahsa Amini. The girl was detained by the vice police for "improperly wearing a hijab" and died in hospital after being beaten there.
Investor-Activist Bill Ackman urged U.S. authorities to lower inflation by increasing the flow of migrants into the U.S., not by raising the discount rate
"Doesn't it make more sense to curb wage inflation by increasing immigration rather than raising rates, destroying demand, putting people out of work and causing a recession? And if we can target immigration policy toward important policy goals, such as accelerating the exodus of Russian talent to the United States, why not take advantage of it?"
That makes perfect sense. And it should have been a year ago, when it became obvious.
- Britain, too, is moving to attract migrants
Truss plans to adjust the list of "scarce occupations," which will allow British employers to attract more employees from abroad.
- The U.S. and other rich countries will inevitably do this. This means that poor countries will lose out in the competition for human capital, and the gap between rich and poor countries will grow.
- The German authorities are planning to prohibit their citizens to hold the top-management positions in the Russian state companies.
There are also plans for new bans on working with Russian nuclear companies. And the introduction of price limits on Russian oil starting from December 5 is being prepared. The Saudis will thank the Americans for that. After all, with the global recession, a drop in demand for oil is inevitable. And the Russian slop from the market will be successfully replaced with Saudi oil.
And the Americans will help their oil business by returning to buying oil from the state reserve.
- Italy: A center-right coalition is leading in the parliamentary elections, including the Italian Brotherhood, Liga, and Go Italy parties.
Together they garner 41-45% of the vote.
Leading this coalition with 22-26% of the vote is the far-right Italian Brotherhood party, headed by Giorgia Meloni. It is considered the heir to the fascist Italian Social Movement (MSI).
This was a worrying new factor for the market.
- The Swiss passed a referendum to raise the VAT from 7.7% to 8.1% and raise the retirement age for women to 65
The country is struggling with a hole in its mandatory pension provision.
MARKET NEWS
Bloomberg: investment managers have the most bearish outlook for gold in nearly four years
Goldman Sachs expects Fed to raise rate to 4.75%
- Intel (INTC) to build semiconductor plant in Italy's Venetian region at $4.5 billion startup investment
All the leading industrial countries want to have their own semiconductor plant. Just like a refinery in the oil era.
- The Saudi stock market is down 2.6% on Sunday after Friday's big drop in global oil prices (SA rests on Friday)
- WSJ recalls new minimum corporate income tax
Amazon (AMZN) and Berkshire Hathaway (BRK.B) could be its biggest payers.
Financial Markets
- The situation looks more and more like the Cuban Missile Crisis of 1962.
Then the world managed to avoid the use of nuclear weapons. Whether the hand of the Kremlin's OCG can be kept from doing so now is the question.
For now, escalating military aggression by Rashism is adding fuel to the fire of already red-hot financial markets with a monetary squeeze by central banks.
On Friday Putin is expected to give Ukraine an ultimatum to withdraw troops from the allegedly Russian Zaporizhia, Kherson, Luhansk and Donetsk regions or Russia will be forced either to declare war on Ukraine (then Belarus may be obliged to join in), or threaten with nuclear weapons, or else come up with something not too original.
Putin understands that he cannot lose - then his reign will be over in a matter of days. But Ukraine cannot lose either.
Under such conditions, an escalation of the war with the inclusion of new players (Belarus and Western countries) becomes almost inevitable.
- Meanwhile, the pound sterling is flying rapidly towards parity with the dollar and has even fallen below 1.04, a new all-time low.
The reason is that the U.K. government on Friday unveiled the largest tax cut the country has seen since the early 1970s.
Investors are wary of the sustainability of U.K. public finances.
- The victory of the far-right in parliamentary elections in Italy also plays for increased uncertainty.
- Investors have so far been reassured by the moderate tone of far-right Italian leader Giorgia Meloni on Sunday night. But a worm of doubt will inevitably sharpen confidence.
- Against this not-so-healthy backdrop, this morning's market movements look quite logical
The U.S. dollar is up noticeably again.
Futures on stock indices are declining, albeit quietly, within 0.5%.
Commodity prices are also down, but also weak.
Asian markets are down except China, which is trading slightly higher.