economicslive

[economicslive]

⚡️ Semiconductor sales decline for the sixth month in a row.

👉 Chip sales in February fell from $50.04 billion to $39.7 billion year-on-year (minus 20.7 percent). This is a record decline in the last 14 years. The drop for the month was estimated at four percent: in January, the volume of the semiconductor market was $41.3 billion.

🔴 Sales decreased in China (minus 34.2 percent), Europe (minus 0.9 percent), the Americas (minus 14.8 percent), Asia-Pacific and other regions (minus 22.1 percent).

Data: US Semiconductor Industry Association (SIA).

[economicslive]

⚡️ Google and Amazon layoffs in Europe dragged on due to labor protection measures

👉 After announcing the biggest layoffs in history, tech companies Google and Amazon have struggled to cut staff in Europe, Bloomberg reports.

👉 Due to strict labor protection measures, the process of dismissal in some EU countries turned out to be almost impossible without prior consultation with labor advocacy groups. These negotiations may be delayed due to the collection of necessary information and appeals against decisions.

👉 Google is in talks with workers' councils in France and Germany, where labor laws are among the strictest in the EU. The company is trying to motivate employees to leave voluntarily by offering generous severance pay, but that hasn't worked yet.

👉 In the UK, where labor protections are less stringent, tech giants are having less difficulty making cuts.

🚩✊ Respect and respect for EU workers who want, can and defend their rights. I can imagine how these American companies freaked out when they realized that it turns out that it’s impossible to fire anyone just like that ...

😂 Musk built a plant in Germany in vain, what do you think? 👇

[economicslive]

⚡️ The personal consumption price index in the United States rose by 0.3% compared to the previous month.

👉 The cost of goods rose by 0.2 percent and the cost of services increased by 0.3 percent, less than the 0.6 percent increase in the previous month.

👉 Food prices rose 0.2 percent and energy prices fell 0.4 percent after rising 2 percent a month earlier.

👉 Excluding food and energy, the PCE price index rose 0.3 percent, slower than the 0.5 percent rise in January. The annual inflation rate has fallen to 5 percent, the lowest level since September 2021.

Source: US Bureau of Economic Analysis.

[economicslive]

😂 The price of virtual real estate in some online worlds where users can be as avatars has plummeted.

👉 The average land sale price in Decentralland is down almost 90% year-over-year, according to WeMeta, a website that tracks metaverse land sales.

Well, I said - all these NFTs, cryptocoins and other virtual assets - all this is crap. 🤷‍♂️

[economicslive]

⚡️ Several tech executives and top AI researchers, including the CEO of Tesla Inc. Elon Musk and AI pioneer Yoshua Bengio are calling for a halt to the breakneck development of powerful new AI tools.

👉 In their view, a moratorium of six months or more will give the industry time to establish safety standards for AI design and prevent potential harm from the most risky AI technologies.

📍 Generative AI hype exploded last fall after OpenAI unveiled its chatbot.

Microsoft has applied this technology to its Bing search engine and other tools. Google deployed a competing system, while companies such as Adobe Inc., Zoom Video Communications Inc. and Salesforce Inc. have also implemented advanced AI tools.

“The race starts today,” Microsoft CEO Satya Nadella said last month. "We're going to move, and move quickly."

👉 Musk has also used some of Tesla's AI tools for advanced driver assistance features. Last month, Tesla said it was recalling about 362,800 vehicles equipped with the Full Self-Driving beta. The lead U.S. auto safety agency said that in rare cases, the technology could violate local traffic regulations, potentially increasing the risk of a collision if the driver does not intervene.

❓ And then a question ))) Elon trumpets about the threat of AI and demands to stop development out of the kindness of his soul, or is he still trying to hold back competitors in this race? 🤷‍♂️😂👇

[economicslive]

⚡️ Small U.S. lenders who have an excessive share of office loans could be the next group to run into trouble after bank failures.

👉 Rising interest rates, a downturn in the commercial real estate (CRE) market and the spread of telecommuting are creating problems for small firms that issued risky loans to finance office buildings, analysts said.

👉 For banks with $1 billion to $10 billion in assets, CRE loans accounted for about 33% of the total held on their balance books, according to ratings agency Fitch.

👉 At the end of last year, CRE accounted for only about 6% of loans from large banks with total assets of more than $250 billion.

👉 Goldman Sachs economists estimate that the combined share of small and medium-sized banks, including lenders with less than $250 billion in assets, is 80% of total commercial mortgage loans.

Julie Solar, loan officer at Fitch Ratings, said the office sector is facing deteriorating asset quality, putting smaller banks at risk due to their relatively greater risk exposure as a percentage of their assets.

👉 According to Fitch, the total exposure of the US banking system to CRE loans at the end of December was $2.5 trillion.

❗️ Rabbit brothers, my advice to you is stay away from the REIT market now 🙏

[economicslive]

⚡️ The French Financial Prosecutor's Office launched searches in the case of tax fraud and money laundering. They are conducted in the country's largest banks Societe Generale, BNP Paribas, Exane and Natixis, as well as in the British HSBC, reports Bloomberg.

👉 The reason for the proceedings was the mechanism under which issuers transferred their securities to foreign investors before paying dividends. Having received tax benefits, the shares were returned, and the funds saved on the payment of mandatory payments were divided among the participants in the scheme. The suspects face collective fines of more than one billion euros ($1.1 billion at current exchange rates).

👉 Earlier, the US Commodity Futures Trading Commission (CFTC) accused the world's largest crypto exchange Binance of trading unregistered derivatives. Binance is also being checked for compliance with anti-money laundering obligations. If the regulator's suspicions are confirmed, the exchange may be banned from doing business in the country.

Source

[economicslive]

⚡️ The average contractual interest rate for 30-year fixed-rate mortgages fell 3 basis points to 6.45%, falling for the third week in a row.

👉 Elon Musk recently warned that the recent bank failures and the ongoing fallout could spill over into the real estate sector, causing the real estate market to crash.

❓ Let's think - what will a long period of high mortgage rates lead to? It seems to me that if this drags on and a recession begins, many will simply not be able to pay their mortgages at current rates, and we may again suffer a mortgage crisis. 👇

[economicslive]

⚡️ Germany's GfK consumer climate indicator rose for the sixth consecutive month to -29.5 in April 2023, the highest level since July.

👉 April data showed that consumer sentiment is on the path to recovery, although this momentum is noticeably slower than in previous months.

👉 The positive value of this indicator was last observed at the end of 2021.

[economicslive]

It is generally accepted that the United States is the absolute leader in all key modern technologies, while China is just a huge industrial zone for the production of tires and fake Gucci handbags. This is wrong.

According to ASPI (Australian Institute for Strategic Studies), China is not only a leader in several key technologies, but also has the potential to monopolize this area of research.

Above is a table from this report - what technologies, who is the leader now and what is the risk of monopolization 👆

[economicslive]

⚡️ WSJ: economists found that about 200 banks in the US could repeat the fate of SVB

👉 Economists in a study published in the Social Science Research Network calculated the losses of banks during the Fed's rate hike campaign, and also examined the share of bank funding from uninsured depositors.

"At 186 US banks, they estimate that in the event of withdrawals by uninsured depositors, insured depositors may face depreciation because the bank will not have enough assets."

[economicslive]

⚡️ +$300 billion on the Fed's balance sheet!

❓This is it? End of tightening? What was that?

[economicslive]

⚡️ UPD: The European Central Bank raised interest rates by 50 basis points.

👉 Policymakers also said that the eurozone banking sector has been resilient, with strong capital and liquidity positions, and that they are closely monitoring the current market tensions, while at the same time they are ready to respond as necessary to maintain price stability and financial stability in the region.

[economicslive]

🔴 On Wednesday, Credit Suisse shares fell 31% and trading for several European banks was halted after the National Bank of Saudi Arabia ruled out an increase in its stake a day after the bank found "material deficiencies" in its 2022 financial reporting processes year. and 2021

🟢 "Worries about the European banking system eased" today as Credit Suisse stock jumped 30% after the bank announced it would borrow up to CHF 50 billion from the Swiss central bank under a covered and short-term liquidity facility .

❓ Well, where else can you earn so much money in a day? 😂👇

[economicslive]

⚡️ The European Central Bank is likely to stick to its policy leadership and raise interest rates by another 50 bps to new 14-year highs on Thursday as inflation remains high, but it could take on a more dovish tone given the recent turmoil in the banking sector.

👉 Eurozone inflation slowed to 8.5% in February, below its peak of 10.6% last fall, but still well above the 2% target.

[economicslive]

☝️ Goldman Sachs: 99% of borrowers have a mortgage rate below the current market rate.

👉 This means banks are making losses on their mortgage portfolios as the market value of money is higher...

[economicslive]

👆BlackRock (BLK) Chairman and CEO Lawrence Fink:

👉 The pace of rate hikes by the Federal Reserve—the fastest since the 1980s—has "exposed the cracks in the financial system."

👉 Inflation will remain close to 3.5%-4.0% for many years as the trade-off for "stronger and more reliable" supply chains to bolster national security is likely to be higher prices.

👉 The failures of Silicon Valley Bank and Signature Bank were the first dominoes to fall as a result of the era of easy money.

👉 A mismatch between assets and liabilities could be the second fall of the domino. (I wrote about this yesterday in the post above👆)

👉 Some banks will have to cut lending to strengthen their balance sheets.

👉 Global: Russia's invasion of Ukraine has triggered shifts in globalization and highlighted the importance of national and economic security, while the pandemic has reshaped supply chains.

👉 North America could be one of the biggest beneficiaries of this trend towards economic fragmentation.