Consumer prices are going up, but corporate profits are rising even faster.

Walmart, which announced third-quarter financial results this morning, was able to post better-than-expected earnings in part by offering fewer discounts to shoppers, but a lot of large firms have spent their recent quarterly calls bragging to investors about their ability to hike prices with relative impunity.

"What we are very good at is pricing," Colgate-Palmolive CEO Noel Wallace said. "Whether it's foreign exchange inflation or raw and packing material inflation, we have found ways over time to recover that in our margin line."

"We've been very comfortable with our ability to pass on the increases that we've seen at this point," Kroger CFO Gary Millerchip said in October. "And we would expect that to continue to be the case."

Corporations have a tendency to try and boost profit margins during periods of elevated inflation, The Wall Street Journal reported, and now is no different.

Roughly two-thirds of the largest publicly traded US companies have reported better profits this year than the same period in 2019, the WSJ found, citing FactSet data. Nearly 100 of those were performing at least 50% better this year than in 2019.

Former US Labor Secretary Robert Reich called this phenomenon a "symptom" of "the economic concentration of the American economy in the hands of a relative few corporate giants with the power to raise prices."

Inflation may be a problem for consumers, but the bigger issue is a lack of competition, Reich said.

"Corporations are using the excuse of inflation to raise prices and make fatter profits," he said.

American industries have gotten dramatically more concentrated in recent decades, diminishing the number of market competitors and increasing corporate price-taking power.

Corporate pre-tax profits as a share of total US output has also reached a multi-year high of 13.5% in the second quarter, which means that companies are taking an even larger slice of the economic pie. And that number is trending higher.

For example, consumer goods giants Unilever, Proctor and Gamble, and Colgate-Palmolive have remarkably similar portfolios of brands selling similar products, and each reported improved profits from higher pricing in the third quarter. Coca-Cola and PepsiCo also rolled out price increases around the same time.

This is not to say that there is illegal price-fixing going on, but having so few players in the game makes it a lot easier for companies to follow similar strategies.

Even the auto industry, which is pretty competitive compared with other consumer goods categories, is currently navigating its own version of the classic "prisoners dilemma" from economic game theory.

High demand and low supply has allowed most companies to boost profits by offering fewer discounts — a move automakers have wanted to do for decades — but the minute one company starts cutting deals to take market share, the others will soon face pressure to follow.

Input costs are indeed making it more expensive for businesses to provide goods and services, but the healthy profits that companies are taking in show that they're doing just fine as consumers increasingly see their buying power evaporate.

The remedy, Reich says, is not a higher interest rate from the Federal Reserve, which would likely slow down the economic recovery.

"This structural problem is amenable to only one thing: the aggressive use of antitrust law," he said.

https://www.businessinsider.com/corporations-using-inflation-as-excuse-to-reap-fatter-profits-reich-2021-11

The United States’ population grew by just 0.1 percent in the past year, the lowest rate since the nation’s founding, according to estimates released Tuesday by the Census Bureau — a slowdown in which the coronavirus pandemic had a major role.

The country’s population increased by 392,665 in the year ending on July 1, 2021. Some of the reduced rate of growth can be attributed to decreased immigration, reduced fertility and an aging population, trends underway before the pandemic. But the pandemic helped push the rate down to almost flat growth.

“We knew it has had a lot of economic impact, a lot of social impact; this shows it has had a big demographic impact that is going to last us for several years,” said William Frey, a senior demographer at the Brookings Institution.

The 2020 census showed the slowest growth rate for any decade since the United States started taking a census, with the exception of the 1930s during the Great Depression. But the coronavirus has exacerbated the trend. More than 800,000 people have died in the United States since the pandemic began, and mortality has also risen among people who had indirect negative health outcomes as a result of the pandemic.

Over three-fifths of the growth this year, or 244,622 people, is estimated to be from net international migration, or the difference between the number of people moving into the country and out of the country. Natural increase, or the number of births minus the number of deaths, was estimated at just 148,043 people, a reduction of 84 percent from two years ago. It is the first year that net international migration has exceeded natural increase, according to the bureau.

Kenneth Johnson, a sociology professor and senior demographer at the University of New Hampshire’s Carsey School of Public Policy, called the sharp decline in natural increase “stunning” and said the pandemic played a central role. “In addition to 475,000 deaths directly attributable to covid during the period, it also increased mortality by hindering people’s access to treatment for other health conditions, discouraged people from having babies, and reduced immigration,” he wrote in an analysis of Tuesday’s estimates.

Seventeen states plus the District of Columbia lost population this year, with the biggest absolute declines in New York, California and Illinois. Those states also saw large numbers of people moving out to other states. Domestic migration tends to exacerbate overall gains and losses, Frey said. The biggest absolute gains were in Texas, Florida and Arizona, states that have seen high levels of in-migration.

The population of D.C. dropped by 2.9 percent, a steep decline compared with recent years. The city lost about 23,000 residents through domestic migration, offset by a gain of about 2,100 people from natural increase and about 1,100 from international migration. In 2020, 2019 and 2018, D.C. had lost just 658, 2,417 and 444 people, respectively, through domestic migration; before that the numbers had been positive going back to 2008.

“It’s a huge outlier,” Frey said, adding that it is the biggest domestic out-migration the city has seen in a year since at least 1990. The change in administration during a pandemic combined with the large numbers of people working from home probably slowed the in-migration flow that normally would come into the city, he added.

The city’s population had risen steeply early in the decade after the Great Recession, contributing to a 14.6 percent increase between the 2010 and the 2020 censuses. But city officials had expected it to be higher, and some have questioned whether the 2020 count missed some residents. The mayor’s office did not immediately respond to a request for comment about the new estimates.

Maryland and Virginia were more stable, changing by -0.1 percent and 0.1 percent, respectively.

Twenty-five states registered a natural decrease, compared with just eight last year and four in the three years before that. The natural decrease was highest in Florida, Pennsylvania, Ohio and Michigan.

The nation’s population slowdown could have dire implications for the country if it persists, leading to problems such as too few young people being available to supply the labor force, Frey said.

“These are numbers you see in some Eastern European countries. It does make you stand up and take notice. It’s really a benchmark we hope we don’t see too often.”

https://www.washingtonpost.com/dc-md-va/2021/12/21/census-population-growth-record-low/

Crypto lobbying is going ballistic

BETWEEN 2017 and mid-2021 the Commodities Futures Trading Commission (CFTC), America’s derivatives-markets regulator, was one of the agencies that discussed crypto the most. Brian Quintenz, who ran its technology committee, was responsible for much of that, organising presentations on everything from the integrity of bitcoin spot markets to the subject of decentralised finance. “I developed a reputation as being…an advocate of innovation,” he says.

In September Mr Quintenz joined Andreessen Horowitz, a venture-capital firm and an investor in crypto startups, as an adviser. He is only one of many former American officials to have flocked to the cryptoverse. Others include Jay Clayton, the previous head of the Securities and Exchange Commission (SEC); Brian Brooks, who until January was the acting Comptroller of the Currency; and Chris Giancarlo, head of the CFTC between 2017 and 2019. In Britain, Philip Hammond, a former chancellor of the exchequer, joined Copper, a crypto startup, in October.

A recent wobble notwithstanding, the market value of crypto assets has risen 12-fold since early 2020, to $2.4trn. Some places, like El Salvador, have sought to ride the wave, embracing crypto to gain celebrity. Others, such as China and India, have threatened to ban it. Watchdogs in America and Europe, the home to much crypto-trading activity, by contrast, are only just beginning to sniff around digital assets. And that in turn is prompting crypto firms to try to steer, if not head off altogether, the coming wave of regulation. “All of a sudden”, says Loni Mahanta of the Brookings Institution, a think-tank in Washington, lobbying “is on a rocket ship.”

Reams of regulations are potentially in play. One set involves stopping crypto assets from being used to launder money. In October the Financial Action Task Force, an intergovernmental body which sets global standards, recommended new rules for crypto-services providers, including those regarding the user data they must collect. Countries are implementing these, but at varying speeds. A second area, overseen by lawmakers, concerns the taxation of crypto investments. Some countries treat them like property, with levies on capital gains due only when assets are sold. Others regard them as akin to foreign exchange, meaning unrealised gains are also taxed.

A third set of rules involves financial regulation: protecting consumers from fraud, reducing systemic risk and ensuring fair competition. Market watchdogs are pondering whether digital assets count as securities, which require heavy disclosures from issuers, or as commodities, where the (lighter) onus is on exchanges to prevent market manipulation. Gary Gensler, the head of the SEC, has said he wants tougher policing of the crypto “Wild West”. The EU is preparing rules that force crypto firms to seek licences and ban tweets meant to manipulate markets. Officials seem keenest to tame stablecoins, tokens that are pegged to conventional money.

How to win friends

Until recently most crypto firms, some of which aspire to a libertarian Utopia where blockchains remove the need for financial intermediaries and regulators, took little notice of officials. But that has changed as the pressure has ratcheted up. Binance, a large crypto-exchange, came under scrutiny in the summer, with regulators in Britain, Germany and Japan warning that it was conducting certain operations in their jurisdictions without the appropriate authorisation. Another wake-up call came from America in August, when a clause that required many crypto firms to report transactions to the taxman was tucked into President Joe Biden’s infrastructure bill. The industry began a counter-offensive.

One prong of it has been to lure government officials and compliance experts from banks with big pay packets. Deepali Vyas of Korn Ferry, a headhunting firm, says senior risk managers are typically promised a salary of $600,000-2m; former high-ranking regulators are also locked in with share options worth tens of millions of dollars, which vest over many years. The ex-head of an American regulator, now at a crypto group, says he spends a lot of time meeting lawmakers and civil servants.

The industry is also hiring lobbyists. Based on public disclosures The Economist calculates that crypto firms spent around $5m lobbying the American Senate in the first nine months of 2021. About $2.5m of that was spent between July and September—a quadrupling over the same period last year. Such activities employ the equivalent of 86 full-time staff, up from just one in 2016. Coinbase, a big crypto exchange, doled out $625,000 on lobbyists in the third quarter alone. Block, a crypto-friendly payments firm, has spent more than $1.7m since April 2020. The campaign is also ramping up in Brussels, the EU’s de facto capital, where the industry has deployed the equivalent of 52 full-time lobbyists.

Some big firms are trying to pre-empt stricter rules by making proposals of their own: Andreessen, for instance, is pressing for self-regulation, while Coinbase argues for a new industry watchdog. Another route for influence comes from firms clubbing together through trade associations. Perianne Boring, who runs the Chamber of Digital Commerce, a group in America that is largely made up of crypto firms, says her work ranges from advocating for bitcoin exchange-traded funds to rebutting arguments linking cryptocurrencies to ransomware. “We’re seeing much higher-level officials engaging with us,” she says.

The industry has gained political capital, too. In America, the congressional Blockchain Caucus counts 35 lawmakers as members. Cynthia Lummis, a senator from Wyoming, has received a big chunk of her 2026 campaign contributions from individuals linked to crypto firms. Last month she said she opposed Jerome Powell’s reappointment as head of the Federal Reserve because of the central bank’s “political approach to digital assets”. In October 2020 the Chamber of Digital Commerce’s political-action committee gave $50 worth of bitcoin to every member of Congress.

With watchdogs on the alert, crypto-capitalists’ visions for regulation are unlikely to materialise in their entirety. But the risk is that they lead to puny rules. In August the passage of the infrastructure bill was delayed by a week after a bipartisan group of lawmakers objected to the crypto provision. The legislation, including the provision, was eventually enacted in November. But a new bill is now trying to weaken the crypto clause. The rewards for walking through the revolving doors are only going up.

https://www.economist.com/finance-and-economics/crypto-lobbying-is-going-ballistic/21806674

The industry is also hiring lobbyists. Based on public disclosures The Economist calculates that crypto firms spent around $5m lobbying the American Senate in the first nine months of 2021. About $2.5m of that was spent between July and September—a quadrupling over the same period last year. Such activities employ the equivalent of 86 full-time staff, up from just one in 2016. Coinbase, a big crypto exchange, doled out $625,000 on lobbyists in the third quarter alone. Block, a crypto-friendly payments firm, has spent more than $1.7m since April 2020. The campaign is also ramping up in Brussels, the EU’s de facto capital, where the industry has deployed the equivalent of 52 full-time lobbyists.

The industry has gained political capital, too. In America, the congressional Blockchain Caucus counts 35 lawmakers as members. Cynthia Lummis, a senator from Wyoming, has received a big chunk of her 2026 campaign contributions from individuals linked to crypto firms. Last month she said she opposed Jerome Powell’s reappointment as head of the Federal Reserve because of the central bank’s “political approach to digital assets”. In October 2020 the Chamber of Digital Commerce’s political-action committee gave $50 worth of bitcoin to every member of Congress.

The EU is preparing rules that force crypto firms to seek licences and ban tweets meant to manipulate markets.

Recently bank of England also issued some statement like btc could go to zero ignoring the fact the value British pound has lost over time :

But in Europe, climbing the ladder is easier than most people believe

HOW likely is someone to move up the economic ladder? A new study by Alberto Alesina, Stefanie Stantcheva and Edoardo Teso of Harvard University compares perceptions of social mobility in five countries—America, Britain, France, Italy and Sweden—against actual levels. It finds that Americans tend to be optimistic, while Europeans tend to be too pessimistic. An American born to a household in the bottom 20% of earnings, for instance, only has a 7.8% chance of reaching the top 20% when they grow up. Americans surveyed thought the probability was 11.7%.

Politically left-leaning respondents are naturally more doubtful about the scale of social mobility, and are more likely to support redistributive government policies, than conservative ones. But Mr Alesina and his colleagues also find that people of different political stripes also respond differently to new information. When given pessimistic information about social mobility, left-wing respondents became even more likely to support economic redistribution. In contrast, right-wing respondents’ support for redistribution did not change. Perhaps, the authors suggest, right-leaning respondents see government as “the cause of the problem, not the solution”.

https://www.economist.com/graphic-detail/2018/02/14/americans-overestimate-social-mobility-in-their-country

The Number Of Millionaires Has Boomed

Oct 22, 2019

n spite of all the talk about trade wars, conflicts in the Middle East, tariffs and fears of a recession, we’ve witnessed an increase of 1.1 million millionaires from mid-2018 to the middle of 2019. This elite group is collectively worth $158.3 trillion.

The U.S. leads the world in the number of millionaires. America has added 675,000 new millionaires over the past year, bringing its total to 18.6 million people. China added 158,000 new millionaires in this period, raising its total to 4.5 million.

https://www.forbes.com/sites/jackkelly/2019/10/22/the-number-of-millionaires-has-boomedheres-where-your-net-worth-ranks-compared-to-others/?sh=c0b1e9a576fa

JERUSALEM, Dec 9 (Reuters) - Israel on Thursday led a 10-country simulation of a major cyber attack on the global financial system in an attempt to increase cooperation that could help to minimise any potential damage to financial markets and banks.

The simulated cyber attack evolved over 10 days, with sensitive data emerging on the Dark Web along with fake news reports that ultimately caused chaos in global markets and a run on banks.

The simulation featured several types of attacks that impacted global foreign exchange and bond markets, liquidity, integrity of data and transactions between importers and exporters.

"These events are creating havoc in the financial markets," said a narrator of a film shown to the participants as part of the simulation and seen by Reuters.

Israeli government officials said that such threats are possible in the wake of the many high profile cyber attacks on large companies, and that the only way to contain any damage is through global cooperation since current cyber security is not always strong enough.

"Attackers are 10 steps ahead of the defender," Micha Weis, financial cyber manager at Israel's Finance Ministry, told Reuters.

Participants in the initiative, called "Collective Strength", included treasury officials from Israel, the United States, the UK, United Arab Emirates, Austria, Switzerland, Germany, Italy, the Netherlands and Thailand, as well as representatives from the International Monetary Fund, World Bank and Bank of International Settlements.

The narrator of the film in the simulation said governments were under pressure to clarify the impact of the attack, which was paralysing the global financial system.

"The banks are appealing for emergency liquidity assistance in a multitude of currencies to put a halt to the chaos as counterparties withdraw their funds and limit access to liquidity leaving the banks in disarray and ruin," the narrator said.

The participants discussed multilateral policies to respond to the crisis, including a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements and coordinated delinking from major currencies.

Rahav Shalom-Revivo, another Israeli financial cyber official, said such a wide-ranging attack on the global financial system would need to be done by sophisticated attackers.

The simulation was originally scheduled to take place at the Dubai World Expo but it was moved to Jerusalem due to the Omicron variant of COVID-19, with officials participating over video conference.

Some of the participants said in a real cyber attack situation governments would take action more quickly than in the simulation.

One European financial official said that in the case of such of an attack, his country would not wait 10 days to act.

"As soon as the supply of money were hampered, at least in the European Union, we would probably have an emergency meeting on the same day," he said, adding that he would immediately reach out to counterparts across Europe and the United States.

https://www.nasdaq.com/articles/exclusive-imf-10-countries-simulate-cyber-attack-on-global-financial-system

The participants discussed multilateral policies to respond to the crisis, including a coordinated bank holiday, debt repayment grace periods, SWAP/REPO agreements and coordinated delinking from major currencies.

And it will be bad for the dollar ....but not if  the dollar USDC and tether will be most dominated currency around the world after china digital currency.
Anyways dollar value will grow bigger as fed protecting rather usd value then making economy better.
2022-2025 will be nice suffering times
And the repo will end as soon as march 2022 not later.
What is coming ? We all know whats coming prices will fall down and shortage of fiat currency.

What's your take on Estonia's approach? Should more countries adopt digitalization, and even blockchain technologies?

Interesting for foreigners, I'm not happy to hear this, because local people still have difficulty getting income. So that more and more foreigners will come to stay and work, the more competition will be tightened.

Miramax sues Quentin Tarantino over Pulp Fiction NFTs

Production company Miramax has sued director Quentin Tarantino over his non-fungible token or NFT collection based on Pulp Fiction. The lawsuit, filed yesterday in California court and noted online by attorney Mark Jaffe, says NFTs don’t fall under Tarantino’s reserved rights for the film. Miramax accuses him of violating the company’s copyright and trademark, and it’s demanding a halt to the upcoming sale.

Tarantino’s NFT collection is supposed to include blockchain tokens associated with high-resolution scans from his original handwritten screenplay of Pulp Fiction, plus a drawing inspired by some element of the scene. But Miramax alleges that Tarantino’s limited contractual rights for Pulp Fiction — including interactive games, live performances, and other ancillary media — don’t cover NFTs linked with the film’s screenplay.

https://www.theverge.com/2021/11/17/22787216/miramax-pulp-fiction-quentin-tarantino-nft-lawsuit

Niantic and a crypto debit card company made an AR game where you earn Bitcoin

Have you ever played Pokémon Go and thought “I wish this game let you earn small amounts of Bitcoin by engaging with internet finance memes and a cryptocurrency debit card system”? If so, I don’t believe you, but I have good news.

Fold AR is a new augmented reality game from Pokémon Go developer Niantic and the financial company Fold. The game — which a press release dubs part of the metaverse — is very loosely modeled on Pokémon Go but themed around cryptocurrency. As explained by Fold CEO Will Reeves, it runs with the metaphor of “mining” Bitcoin. So instead of capturing cute monsters, the central mechanic involves finding cubes of binary code and tapping them like Minecraft blocks until they reveal a prize.

https://www.theverge.com/2021/11/23/22798523/niantic-fold-ar-metaverse-mobile-game-bitcoin-earning

I agree that they should be allowed to fail, but all those in leadership positions should be sent to court, and the guilty should be severely punished as an example to others. So it should have been done with everyone in the West who in any way caused the 2008 crisis, but instead they are free and likely to cause some new crisis in the future.

Chinese construction Mega-Bankruptcy. Evergrande about to crash for 355B

You posted "Goldman Flags $8.2 Trillion Threat Worse Than China Evergrande" in this thread : Evergrande situation

A crisis at the world's most indebted company has worsened after news it had missed a crucial repayment deadline.

Chinese property giant Evergrande, whose liabilities exceed $300bn (£228bn), failed to meet interest payments to international investors.

That prompted Fitch, an agency that rates companies' financial risk, to declare Evergrande in default.

The crisis has spooked investors who fear contagion across China's property and banking sectors.

Evergrande had been due to repay interest on about $1.2bn of international loans on Monday. But by Wednesday the money had still not been transferred.

On Thursday, Fitch, one the world's biggest credit rating agencies, declared Evergrande in default, a move that could hamper the company's restructuring talks with investors.

Fitch, whose risk ratings are closely followed by major investors seeking to deploy billions of dollars, said it contacted Evergrande about the non-payment but received no response. "We are therefore assuming they were not paid," it said.

Evergrande has been selling assets in recent months to raise the money it owes to customers, investors and suppliers.

In a statement last Friday the company said it could not guarantee "to perform its financial obligations", sending its share price crashing.

What does Evergrande do?

Businessman Hui Ka Yan founded Evergrande, formerly known as the Hengda Group, in 1996 in Guangzhou, southern China.

Evergrande Real Estate currently owns more than 1,300 projects in more than 280 cities across China.

The broader Evergrande Group now encompasses far more than just real estate development.

Its businesses range from wealth management, making electric cars and food and drink manufacturing. It even owns one of country's biggest football teams - Guangzhou FC.

Mr Hui was once Asia's richest person and, despite seeing his wealth plummet in recent months, has a personal fortune of more than $10bn (£7.3bn), according to Forbes.

Why is Evergrande in trouble?

Evergrande expanded aggressively to become one of China's biggest companies by borrowing more than $300bn.

Last year, Beijing brought in new rules to control the amount owed by big real estate developers.

The new measures led Evergrande to offer its properties at major discounts to ensure money was coming in to keep the business afloat.

Now, it is struggling to meet the interest payments on its debts.

This uncertainty has seen Evergrande's share price tumble by almost 90% over the last year.

Why would it matter if Evergrande collapses?

There are several reasons why Evergrande's problems are serious.

Firstly, many people bought property from Evergrande even before building work began. They have paid deposits and could potentially lose that money if it goes bust.

There are also the companies that do business with Evergrande. Firms including construction and design firms and materials suppliers are at risk of incurring major losses, which could force them into bankruptcy.

The third is the potential impact on China's financial system: If Evergrande defaults, banks and other lenders may be forced to lend less.

This could lead to what is known as a credit crunch, when companies struggle to borrow money at affordable rates.

A credit crunch would be very bad news for the world's second largest economy, because companies that can't borrow find it difficult to grow, and in some cases are unable to continue operating.

This may also unnerve foreign investors, who could see China as a less attractive place to put their money.

Is Evergrande 'too big to fail'?
The very serious potential fallout of such a heavily-indebted company collapsing has led some analysts to suggest that Beijing may step in.

The Economist Intelligence Unit's Mattie Bekink thinks so: "Rather than risk disrupting supply chains and enraging homeowners, we think the government will probably find a way to ensure Evergrande's core business survives."

Others though are not sure.

In a post on China's chat app and social media platform WeChat, the influential editor-in-chief of state-backed Global Times newspaper Hu Xijin said Evergrande should not rely on a government bailout and instead needs to save itself.

This also chimes with Beijing's aim to rein in corporate debt, which means that such a high profile bailout could be seen as setting a bad example.


https://www.bbc.com/news/business-58579833

Goldman Flags $8.2 Trillion Threat Worse Than China Evergrande

Sep 30, 2021

The real worry concerning the China Evergrande default drama is the inevitable where-there’s-smoke-there’s-fire paranoia that accompanies debt stumbles.

The most worrisome such blaze, say analysts at Goldman Sachs, is surging local government debt levels that President Xi Jinping’s men have done their best to hide. The default troubles at the globe’s most indebted property development seem like small embers compared to the $8.2 trillion worth of local government financing vehicles outstanding.

And that’s just the LGFVs we know of. The data that Goldman’s Maggie Wei highlights is as of the end of 2020. Clearly, the tally is higher now—perhaps markedly. Ten months ago, these shadowy investment schemes had reached 53 trillion yuan, up from 16 trillion yuan, or $2.47 trillion, in 2013. They now amount to roughly 52% of China’s gross domestic product, topping the official amount of outstanding government debt.

In other words, as scary at the $300 billion Evergrande story might be, Xi’s government has much bigger problems on its hands. The most acute: keeping GDP this year from falling too far below the 6% Beijing hoped to produce without adding to the nation’s bubble troubles.

The forces behind local governments sitting on financing-vehicle debt worth twice the size of Germany’s GDP date back to 2008. Even before the Lehman Brothers crisis, Communist Party dynamics encouraged municipal borrowing binges. The way local officials got attention in Beijing—and rose to national prominence—was producing above-average GDP rates.

https://www.forbes.com/sites/williampesek/2021/09/30/goldman-flags-82-trillion-threat-worse-than-china-evergrande/