The Times (September 4)
“Russia was caught in the act in its attack on Leipzig airport and Europe’s reaction simply confirmed its increasing solidarity.” It is true that “Russia would be hard put to mount a major attack against Nato now” with “its strength drained by the war.” Still, “the threat from Russia is real. With decisive victory on the battlefield eluding him, and with the war’s effects now being felt across his vast domain, Mr Putin may, like many a gambler before him, decide to double down. If that happens, Nato must be ready.”
Tags: Attack, Battlefield, Caught, Decisive, Europe, Leipzig airport, Major attack, Nato, Putin, Reaction, Real, Russia, Solidarity, Strength, Threat, Victory, War
Institutional Investor (September 3)
“After years of low interest rates, which masked managers’ mistakes in underwriting and risk-taking, the current economic environment is exposing a huge gap in origination quality and covenant discipline among managers. But allocators aren’t panicked: More than half see the current challenges as cyclical rather than structural, with 62 percent expecting private credit to emerge stronger. In addition, 75.5 percent of allocators agree that periods of market stress are the best times to reassess managers and renegotiate terms for the future.”
Tags: Allocators, Covenant discipline, Cyclical, Economic environment, Exposing, Gap, Interest rates, Managers, Market stress, Origination quality, Private credit, Renegotiate, Risk-taking, Structural, Underwriting
Wall Street Journal (September 2)
“The 10-year Treasury note ticked up to 4.8% on Tuesday amid a global bond selloff that sent yields on Japan’s 10-year to a three-decade high. The U.S. 30-year bond hit 5.28%, while the U.K.’s 30-year gilt rose to a 28-year high of 5.9%.” These “early murmurs” of the “bond vigilantes” are a welcome development. “They are sending a message to Washington and other Western nations to clean up their fiscal acts. Bond investors may be the only people who can force the politicians to pay attention. The real worry is if the politicians don’t listen.”
Tags: 10-year, 30-year, 4.8%, 5.28%, 5.9%, Bond selloff, Clean-up, Fiscal acts, Gilt, Global, Investors, Japan, Murmurs, Politicians, Treasury note, U.K., Vigilantes, Washington, Welcome, Yields
BBC (September 2)
“The Dutch central bank (DNB) has confirmed that billions of dollars in gold has been taken out of north America and relocated to London, citing ‘increasing geopolitical unrest.’” In total, the DNB removed 86 tonnes of gold “from the US and Canada in a complex operation that took several months. It is now being held by the Bank of England, where the precious metal can be traded more easily ‘in a crisis situation.’”
Tags: 86 tonnes, Bank of England, Canada, Crisis situation, Dutch central bank, Geopolitical unrest, Gold, London, Precious metal, Relocated, Traded, U.S.
New York Times (September 1)
“Chinese cars could be huge in U.S., and that’s the problem, officials say.” The New York Times “test-drove a stunning crossover from Geely that would cost under half of what its rivals charge.” There is no doubt “that Chinese cars, if ever sold in the United States, would give the competition a frightening run for its money. (Its competition would be approaching the luxury tier, like the Mercedes-Benz EQS SUV; its price is more in line with a fully equipped Honda Civic.)” This appears to be why a bill is being sponsored in Congress “to permanently ban internet-connected vehicles from China from being sold in this country.”
Tags: Ban, Cars, China, Competition, Congress, Cost, Crossover, Frightening, Geely, Honda Civic, Luxury tier, Mercedes-Benz, Officials, Problem, Rivals, Stunning, Test-drove, U.S.
The Guardian (September 1)
“At this point, it should be clear that AI is a choose-your-own-adventure book where every option ends in disaster.” Despite the growing consensus that we need “to slow down, regulate or even put all of this on pause while we wrap our minds around it,” individual nations are “incentivised to run this foolish race,” The EU alone can pause the insanity. “The future of all chip-based technology is wholly dependent on ASML. A straight ban on exports of ASML’s machines would force the global AI industry to in effect tread water, to jog in place.”
Tags: AI, ASML, Ban, Chip-based technology, Consensus, Dependent, Disaster, EU, Foolish race, Future, Incentivised, Insanity, Nations, Pause, Regulate, Slow down
Bloomberg (August 31)
“BYD Co.’s overseas revenue exceeded what it made at home for the first time, helping end one of the company’s longest profit slumps and illustrating why Chinese carmakers have no choice but to try their luck outside of the world’s largest auto market.” Annual vehicle sales in China’s “vast” market are twice as high as the U.S. Despite that scale, however, China’s market “has become so brutal that not even its national champion can count on making money there. That’s why Chinese carmakers have increasingly turned abroad, where they can charge more for their vehicles, to make money despite ongoing geopolitical risks.”
Tags: Abroad, Auto market, Brutal, BYD, Carmakers, Charge more, China, Geopolitical risks, Largest, National champion, Overseas, Profit slump, Revenue, Scale, Vast, Vehicle sales
The Economist (August 29)
“The background music of Donald Trump’s second term has been the sound of norms breaking. On economic policy alone, the president has used tariffs to usurp Congress’s taxing powers and launched attack after attack on the independence of the Federal Reserve, which he accuses of keeping interest rates too high.” While it may be “tempting to tune the noise out,” the Treasury’s recent intervention in bond markets “deserves to echo far and wide.” And “so long as government debt stays high,” more of these unconventional Treasury follies will probably ensue, but America will ultimately come to “regret Scott Bessent’s bond-market misadventures.”
Tags: Attack, Background, Bessent, Bond markets, Congress, Debt, Economic policy, Federal Reserve, Government, Independence, Interest rates, Intervention, Misadventures, Noise, Norms breaking, Regret, Tariffs, Taxing powers, Treasury, Trump, Unconventional, Usurp
Financial Times (August 28)
In the U.S., “corporate profits have hit a record high while workers’ slice of the pie has sunk to historic lows, fuelling discontent among many Americans and a growing political backlash.” In this tale of two cities, corporate “pre-tax earnings hit an annualised $4.8tn in the second quarter, or 18 per cent of national income… the highest share since the aftermath of the second world war.” Meanwhile, “employees’ share from wages and benefits fell to 60 per cent, the lowest level since the 1950s.”
Tags: $4.8tn, Benefits, Corporate profits, Discontent, Employees, Historic lows, Political backlash, Pre-tax earnings, Q2, Record high, Sunk, U.S., Wages, Workers, WW2
New York Times (August 27)
“Propping up the yen. Buying back U.S. debt. Americans might wonder: What is the Treasury Department doing? Over the past month, it has made some unusual moves to tamp down an alarming surge in interest rates. The global history of maneuvers like these suggests that they rarely work on their own — and can often be worse than doing nothing.”
Tags: Alarming, Buying, History, Interest rates, Maneuvers, Propping up, Surge, Tamp down, Treasury, U.S. debt, Unusual, Worse, Yen
