RSS feed Forex Humor 2009-2013 RSS feed Forex Humor Funny Forex drawings and caricatures <![CDATA[COVID-19 may change global economy forever]]>

The global economy will never be the same again. The coronavirus pandemic has changed the general economic structure. New time requires new rules. Economists have come to an agreement that the current situation could be described as a real revolution.

The status of central banks and the technical instruments they have been applying for many decades will be the first to undergo changes. The fact is that in democratic countries, regulators are totally autonomous and extremely powerful. However, they may lose their power under the present conditions. Moreover, governments are becoming more influential in solving monetary policy issues.

As a rule, the leading central banks have an opportunity to set the key interest rates, launch stimulus programs, and make attempts to stabilize inflation. At the moment, they have to make decisions together with countries’ authorities. Regulators are more than other institutions interested in economic support. That is why they are ready to take various measures to boost it.

Stephen King, a senior economic adviser to HSBC Holdings, supposes that central banks “have to accept in that sense they’ve lost a bit of power to the political process.” In the future this approach may result in a slower recovery amid absence of stimulating programs.  However, in such desperate financial circumstances, it is necessary to cushion demand.

The material has been provided by portal -]]> Thu, 22 Oct 2020 14:14:42 +0000
<![CDATA[Economists cast doubt on China's impressive economic rebound]]>

Planned economies have one large drawback. Quite often, its results may be inaccurate and unreliable due to political reasons.  If the government orders to display the current indicators better than they really are, it will be done appropriately. Importantly, China has such a type of economy and more than once, it has been caught on the falsification of economic figures.

From time to time, Beijing exaggerates its real GDP growth rate and other important indicators. For this reason, the latest official data has raised a lot of questions about incorrect economic results. In particular, the GDP annual growth was measured in comparison with the previous quarters of this year but not with the figures of the past year. As a result, the overall situation looks more positive. Besides, China's government did not provide a broader picture of the economic recovery across the country, namely in the regions. Although the recovery of the national economy is uneven throughout the country. "The recovery itself is actually two-pronged, and you see the larger cities, you see the coastal regions doing much, much better than the rest of the country. So, there’s really two recoveries going on — Beijing wants to advertise the Beijing, Shanghai, Guangdong type of recovery, but that’s not most of China,” the CEO of research firm China Beige Book, Leland Miller, said.

Yet, there is room for optimism as well. For instance, China recorded steady growth in the number of trips around the country. At the end of September, China celebrates a national holiday known as Golden Week. It is no surprise that the number of passengers amounted to 600 million people.


The material has been provided by portal -]]> Thu, 22 Oct 2020 14:11:04 +0000
<![CDATA[Trump threatens China with big price for COVID-19 spread]]>
There is no doubt that Donald Trump has recovered from COVID-19. The head of the White House, who temporarily left his duties due to the recent illness, has come back to work.  Moreover, Donald Trump has already posted some tweets reflecting his intention to punish China. The US President promised that Beijing will “pay a big price for what they've done to the world.” He is still blaming China for the coronavirus spread all over the world. Mr. Trump believes that the whole world did not even have a chance to take reasonable actions because of China’s negligent attitude, concealment, and blatant lies. This resulted in enormous financial and human losses. Thus, justice must be restored and the perpetrators must be punished. Moreover, the US President has made a solemn promise that the treatment that he received during the illness will soon be available for every citizen.Notably, the US has been attacking China since 2017, the very beginning of the trade war. Of course, the countries managed to come to an agreement and signed the phase one deal. However, neither of the countries has a chance to comply with their obligations amid dropping consumer demand caused by the pandemic. That is why the phase two agreement will hardly be reached in the near future.   
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<![CDATA[Trump’s COVID-19 treatment would have cost fortune to ordinary citizens]]>

US media is investigating the costs associated with Donald Trump’s treatment for COVID-19. These costs involved treatment, rehabilitation, and a round-trip helicopter ride to the hospital. Notably, the US President's health care is actually funded from taxpayers’ money. Earlier this month, Donald Trump spent three days in the hospital undergoing treatment for coronavirus. It is estimated that the bill for COVID-19 testing, an antibody medication, a three-day hospital stay, and a helicopter ride could have exceeded $100,000.  This amount also includes the costs of additional medical services and experimental drugs that are not covered by standard health insurance. All this has made the President's hospitalization quite expensive. Given that Melania Trump was also infected with COVID-19, the sum spent for the treatment can be easily doubled.  It is worth noting that all the calculations are based on the average cost of COVID-19 treatment according to the US healthcare system. However, the actual bill for Donald Trump’s hospital stay is not disclosed. In early October, Donald Trump officially announced on Twitter that he and his wife, Melania Trump, both tested positive for coronavirus. The US President was admitted to Walter Reed National Military Medical Center, located in Bethesda, Maryland. Three days later, he was discharged from hospital and returned to the White House.

The material has been provided by portal -]]> Thu, 22 Oct 2020 08:19:24 +0000
<![CDATA[Experts predict doom for US economy]]>

Experts predict a doomsday scenario for the world’s largest economy, the United States, because of Donald Trump. His rash actions can destroy the economy. Thus, the president’s decision to halt financial stimulus negotiations with Democrats could be the beginning of the end of the American economy. Trump called off the talks at the most interesting moment. In the best-case scenario, the issue will be resolved already after the presidential election and the new Congress meeting. According to Bloomberg, this can take the US government up to 4-5 month to provide new financial aid for small businesses and unemployed citizens. Until all major issues for the American economy remain up in the air, there will be no hope of recovering in the fourth quarter 2020. Political experts believe that Trump’s unwillingness to communicate with the leaders of the Democratic Party ahead of the election is not the best decision. Even his fellow Republicans did not appreciate such a strange move. Notably, Federal Reserve Chair Jerome Powell urged the US government to increase spending to boost the economic recovery hours before President Trump's call to halt stimulus negotiations until after the election.

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<![CDATA[Biden lashes out at Trump for betraying Americans]]>

The closer the election is, the stronger the arguments become. The US presidential candidates are not afraid of debates of any level. Moreover, they are prepared to put the opponent down. The atmosphere becomes tenser every day and the insults get more gross. As soon as current US President Donald Trump called off  stimulus negotiations until after the election, he was immediately denounced as a traitor. "Nancy Pelosi is asking for $2.4 Trillion Dollars to bailout poorly run, high crime, Democrat States, money that is in no way related to COVID-19. We made a very generous offer of $1.6 Trillion Dollars and, as usual, she is not negotiating in good faith. I am rejecting their request, and looking to the future of our Country," Trump said. Democratic presidential candidate Joe Biden condemned Trump’s decision to postpone talks on the stimulus plan and said that it was a real betrayal. 

"Donald Trump ended the efforts to pass bipartisan relief that our nation desperately needs. He ended talks that would get help for our businesses and schools, for families struggling and for those unemployed — that would have preserved hundreds of thousands of jobs," Joe Biden criticized the president saying that Trump betrayed ordinary Americans.

The material has been provided by portal -]]> Thu, 22 Oct 2020 05:51:55 +0000
<![CDATA[US considers its own digital currency]]>

The US is not going to lag behind other countries in the race for the first national digital currency. As cryptocurrencies continue to soar, the Federal Reserve is giving thought to having its own digital asset. During a digital seminar on trans-Atlantic economic relations, Deputy Secretary of the Treasury Justin Muzinich announced that the administration was studying a potential central bank digital currency (CBDC) tied to the US dollar.

Answering a question about whether there is an official plan for the development and implementation of the central bank digital currency, the official confirmed that the Fed was exploring the idea of launching its own digital currency. "It’s something we’re studying … This is really a decision which sits as much with the Fed as it does with the Treasury," he pointed out. However, some conference participants were unhappy with evasive answers and the question was asked once again. Justin Muzinich had to admit that there was no final decision on this matter yet.

"There are clearly efficiency benefits and cost benefits to using a distributed ledger. And I also think, more broadly, it’s important for the government to embrace innovation and not be scared by it," he added. However, Muzinich also pointed out that there were concerns about security, financial stability and privacy as part of the introduction of the digital currency in the country. "The Treasury has made it clear that the obligation to comply with US laws is the same, regardless of whether a transaction is denominated in traditional fiat currency or digital currency. Existing laws apply to digital assets in no uncertain terms," he pinpointed.

The material has been provided by portal -]]> Wed, 21 Oct 2020 14:16:13 +0000
<![CDATA[US budget deficit surges to $3.1 trillion in fiscal 2020]]>

The budget deficit in the United States hit another record. The indicator breaks to new highs on a regular basis. However, in the light of a raging pandemic, the figures reached unprecedented levels. On top of that, the country’s negative trade balance is growing faster than expected.

In the fiscal year that ended on September 31, the federal budget deficit tripled, hitting an all-time high of $3.1 trillion. However, it does not look as terrifying as it is in terms of gross domestic product, 15.2% of US GDP. The reason for the rapid spike in public debt was a noticeable surge in federal spending. Experts believe that the current situation bears considerable risks for the country and warn the US authorities that it is time to pull their belts in. Recent events, including trade wars with the rest of the world and the coronavirus pandemic outbreak, are only exacerbating the already critical state of the country.

Unfortunately, there are no hopes that the situation will change for the better, especially in the near future. The United States will unlikely be able to stop the growing budget deficit in the next couple of decades. Even if the country comes out as a winner in the battle against the coronavirus, the gap between spending and earning will continue to widen due to the population ageing and the growth of healthcare costs. According to the director of the Congressional Budget Office Phillip Swagel, in order to change the situation, US authorities will have to raise taxes, cut spending or take both steps at a time.

The material has been provided by portal -]]> Wed, 21 Oct 2020 12:23:31 +0000
<![CDATA[UK bans sale of crypto-derivatives to retail customers]]>

The UK authorities decided to bring order to the cryptocurrency world. The first step towards order was a ban on the sale of crypto-derivatives and exchange-traded notes (ETNs) to retail traders.

The UK Financial Conduct Authority considers that these products are ill-suited to retail consumers who cannot reliably assess the risks of derivatives based on crypto-assets. The ban is set to come into force on January 6, 2021. On the one hand, this measure is intended to protect ordinary market participants. On the other hand, it puts them at risk. Such a ban will force British investors to leave their home trading floors and use unregulated providers offering less protection. This means that the risk of suffering huge losses will be higher. In the meantime, the regulator is confident that this initiative "could reduce harm by £19m to £101m a year for retail investors". The FCA notes that these changes concern BTC, ETH, and XRP.

The UK is not the only country trying to split investors into qualified and non-qualified. A number of central banks around the world are engaged in seeking a solution to protect unqualified investors from risky financial investments. However, the criteria for identifying qualified and non-qualified investors are rather weird.

The material has been provided by portal -]]> Tue, 20 Oct 2020 14:50:15 +0000
<![CDATA[Japan approves record budget for next fiscal year amid coronavirus crisis]]>

Japan's Ministry of Finance is set to approve a record budget for the next fiscal year. Prime Minister Yoshihide Suga's new government said that they would need more money to minimize the negative consequences of the pandemic and revive the economy.

The general account spending requests for the fiscal year came in at 105.4071 trillion yen ($996.85 billion), exceeding the previous high of 105 trillion notched in the current fiscal year. The allocated money will be spent to contain the spread of the virus and ease the pain from the economic fallout. "We remain committed to achieving both economic revival and fiscal reform, and we will overcome the coronavirus crisis to pass the future on to the next generation,” Wataru Ito, State Minister of Finance, pinpointed. Notably, the requested amount may become even higher. Many departments have not indicated a specific amount of expenses yet, leaving room to swell the total figure as the Finance Ministry will determine the long-awaited 2021 state budget only in late December.

Two extra stimulus budgets compiled for this fiscal year to combat the coronavirus will increase overall government spending to about 160 trillion yen, which is 1.6 times higher than the initial budget.

The material has been provided by portal -]]> Tue, 20 Oct 2020 14:24:44 +0000
<![CDATA[Hyundai to display first flying car]]>

The South Korean automaker, Hyundai, is ready to pursue the lofty dream of self-driving cars. The car automaker announced that it would show off its Personal Air Vehicle in the near future. Batch production is scheduled to begin in 2028.

The company has been working on the development and creation of flying cars for a long time and has achieved some success. "Having worked on cutting-edge aviation research and development at NASA for 30 years, I am very excited and humbled by the opportunity to now shape urban air mobility strategy at Hyundai Motor Group," Dr. Shin said in Hyundai's announcement. At first, Hyundai will showcase those models that will carry up to six people over relatively short distances within metropolitan areas. Furthermore, the car manufacturer plans to establish the production of bigger versions designed for a larger number of passengers and longer routes between cities. "People who are always stuck in traffic on the road will realize how convenient it is to move via aerial vehicles. That is when we will see demand explode," Jaiwon Shin, the head of its urban air mobility unit, said. The company is currently trying to find a way to reduce the final cost of the car.

Uber and Hyundai unveiled the flying car concept in January 2020. After having been launched, these models will be controlled by pilots. However, by 2035 they will be able to switch to fully automatic operation. Developers from South Korea are not alone who are trying to build a flying car. This summer, British car makers from Vertical Aerospace revealed plans to create an air taxi E-Taxi, which could make a 76-kilometer trip in just 30 minutes.

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<![CDATA[Pandemic reveals long-term problems in UK’s economy]]>
UK Prime Minister Boris Johnson is sure that most problems that the country’s economy has recently faced appeared long ago.At Conservative Party Conference, Boris Johnson said that the coronavirus merely showed that there are a lot of economic issues that had been accumulating for decades. The pandemic was revealing one problem after another.  The shortage of qualified personnel has existed for a long time. However, it came to the fore only during the quarantine. Moreover, the country’s authorities were well aware of troubles in the transport infrastructure and weak support for the private sector, but they preferred to ignore these issues until the virus outbreak. The same could be said about immigration problems. The pandemic has only proved that all difficulties should be solved in time.The Prime Minister has emphasized that he will not go back on his promises, including bigger financial support to scientific projects and educational reforms. The UK authorities are said to contribute to the construction of new hospitals. Moreover, they have already developed a free retraining program for specialists in those areas where there is a particular shortage of them. The Green Industrial Revolution is also on the agenda. 
The material has been provided by portal -]]> Tue, 20 Oct 2020 14:09:14 +0000
<![CDATA[Jerome Powell: US economic recovery far from complete]]>

While some countries report on continued economic growth even in the midst of the coronavirus pandemic, experts remain cautious about the future of the world's largest economies.

The outlook for the leading global economy, the United States, is far from positive. In addition to the effects of the COVID-19 outbreak, another reason for its severe economic challenges is the White House's aggressive policy. The pandemic has further aggravated the situation, while the risk of a second wave offers little hope for a quicker economic rebound. "The pace of economic improvement has moderated since the outsize gains of May and June, as is evident in employment, income, and spending data. The increase in permanent job loss, as well as recent layoffs, are also notable," Federal Reserve Chair Jerome Powell stated. The official noted the swift response of the authorities to the economic blow from the coronavirus and expressed his appreciation for the measures aimed at combating the pandemic. According to Powell, the recovery will be stronger and faster if "monetary policy and fiscal policy continue to work side by side".

"There is a risk that the rapid initial gains from reopening may transition to a longer-than-expected slog back to full recovery as some segments struggle with the pandemic's continued fallout," the Fed chief said.

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<![CDATA[Erdogan’s interference in Caucasian conflict hurts Turkish lira]]>

Turkey’s President Recep Tayyip Erdoğan is driven by ambitions to assert himself as a strongman. This year, the Turkish leader has been already involved in military conflicts in Libya, Syria, and Iraq. In the fall, he decided to support Turkey’s ally Azerbaijan in the long-lasting conflict with Armenia. 

At the dawn of his presidential career, Erdogan delegated the full authority to control the national economy and foreign politics to the executive power, i.e. to himself. Long ago, Turkey’s central bank lost the status of an independent full-fledged financial regulator obeying directives from the President. As any strongman, Recep Tayyip Erdoğan justifies his pressure on the central bank by the benefit to his nationals. 

When it comes to the hostilities in Nagorno-Karabakh, he assured the Azerbaijanis of his overwhelming support. “I condemn Armenia once again for attacking Azerbaijani lands,” he made an official statement. “Turkey continues to stand with the friendly and brotherly Azerbaijan with all its facilities and heart.” In other words, the Turkish leader does not aim to calm down political tensions between the warring Caucasian countries. Instead, Ankara supplies weapons to Azerbaijan and reportedly deploys some troops and aircraft. 

Amid Turkey’s campaign in the South Caucasus, the Turkish lira went into a tailspin again heading for new multi-year lows. It is expected to sink as low as 8 against the US dollar. At the same time, Turkey’s foreign debt has swollen to $100 billion. Besides, the central bank’s debt under its currency swap agreement increased to $50 billion. It means that the regulator is not able to repay its huge debt even with all of its available forex reserves.      

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<![CDATA[Oil companies restore operations after Hurricane Delta]]>

According to Seeking Alpha, US oil companies restarted operations at production facilities along the Gulf Coast after Hurricane Delta hit the area. Experts emphasize that US oil producers are now striving to lessen the destructive effect of the disaster.

By Monday, October 12, the price of oil started to decrease amid the restoration of oil production.  During the previous week, October 5-9, the price of the benchmark WTI and Brent crude oil increased by more than 9%. However, it sank later. Notably, WTI for November 2020 delivery dropped by 1.3% to $40,08 per barrel, while Brent crude for December delivery declined by 1.3% to $42.30 per barrel.

The Bureau of Safety and Environmental Enforcement points out that efforts to restore carbohydrates production sometimes turn out to be unsuccessful. Last Sunday, October 11, many energy companies had to tighten oil output. Some 91% of offshore crude oil extraction and 62% of natural gas output remained shut in the Gulf of Mexico.

Experts estimated that this had been the largest suspension of crude oil production for the last 15 years. Similar events took place in 2005 when Hurricane Katrina slammed the area.

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<![CDATA[Core machinery orders spike in Japan]]>

Analysts estimated that the number of core machinery orders in Japan grew exponentially. The reading beat the preliminary forecasts even though economists had expected core machinery orders to plunge by 1.0%.

Core machinery orders are one of the key indicators for the Japanese economy. It shows the change in the total value of new internal orders received by machine manufacturers, excluding ships and utilities. According to experts, it is the primary index that reflects the volume of investments in the Japanese industrial sector.

For the reporting period, this indicator showed a steady increase in capital expenditures even despite the negative consequences of the COVID-19 pandemic. At the same time, the volatility of core machinery orders in the coming six to nine months has primarily been on the highest level. In August 2020, the growth rate in core machinery orders accelerated by 0.2%. That was significantly lower compared to a 6.3% increase registered in July.

The material has been provided by portal -]]> Mon, 19 Oct 2020 10:05:19 +0000
<![CDATA[US auction theorists win Nobel Prize in economics]]>

The current year has been quite diverse in terms of events. Recently, the highly anticipated 2020 Nobel Prize award ceremony has taken place at the Stockholm Concert Hall. This year, two American economists, Paul R. Milgrom and Robert B. Wilson, won the Nobel in economic science for improvements to auction theory as well as inventions of new auction formats.

The updated auction format will facilitate efficient trading, the Royal Swedish Academy of Sciences stressed. "The new auction formats are a beautiful example of how basic research can subsequently generate inventions that benefit society," the Nobel committee added. Notably, the laureates' innovations have huge practical applications when it comes to allocating rare resources. Winners of the Nobel Prize in Economics, which has been awarded since 1969, will receive a 10-million krona ($1.14 million) cash prize and a gold medal. The official name of the award is the Swedish National Bank Prize in Economic Sciences in Memory of Alfred Nobel. Curiously enough, Alfred Nobel did not mention economics in his will. It was added to the list after his death.

In the first week of October 2020, the Royal Swedish Academy of Sciences announced the names of laureates in medicine, physics, chemistry, and literature. The full list is presented on the official website.


The material has been provided by portal -]]> Fri, 16 Oct 2020 13:21:00 +0000
<![CDATA[Russia seeks effective ways to enhance energy supplies to Europe]]>

The Institute of Europe of the Russian Academy of Sciences has found a simple and effective way to enhance energy supplies to Europe. Guided by the old saying which states that everything new is well-forgotten old, the scientists proposed expanding the Nord Stream project and building the pipelines to supply the region with hydrogen.

Hydrogen is regarded as more environmentally-friendly fuel with zero carbon emissions which cause the greenhouse effect and subsequently global warming. At present, Europe promotes the widespread adoption of hydrogen technologies. This means that Russia has a valid reason for laying hydrogen pipelines. In fact, one might say that a start has been made. As for the expansion of the Nord Stream Pipeline project, the Russian government delivers on its promises. Therefore, active steps in this regard are expected in the near future. The proposal to construct the fifth and sixth branches of the Stream was put forward by Vladislav Belov, Deputy Director of the Institute of Europe of the Russian Academy of Sciences. He believes that the construction of both the fifth and the sixth branches is technically justified and it is not a cause for concern. Moreover, he added that Europe and Germany would not be able to provide themselves with hydrogen.

Nord Stream, a gas pipeline from Russia to Germany across the Baltic Sea, consists of two lines launched in 2012. In 2018, Gazprom started laying the third and fourth strings known as Nord Stream 2. Currently, the project is 97 percent complete.

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<![CDATA[OECD unemployment falls to 7.4%]]>

According to the recent statistical data, in August 2020, the unemployment rate in the participating countries of the Organization for Economic Co-operation and Development (OECD) dropped to 7.4%. In July, the indicator was at the level of 8%. Nevertheless, analysts suppose that unemployment is still a burning issue. The fact is that its rate remains above the pre-crisis reading and it will hardly decline in the near future. The latest estimates showed that in August, the unemployment rate exceeded its February score by 2.2 percentage points. Notably, the coronavirus outbreak occurred in February 2020.

However, economists have noted some reasons for optimism. Thus, in the last month of the summer, the number of unemployed people in the OECD's member countries slid by 3.3 million to 48.38 million. Unemployment among women dipped by 0.7 percentage points whereas among men it dropped by 0.4 percentage points to 7.3%. At the same time, youth unemployment between 15 and 24 years decreased by 1.4 percentage points to 15.4%.

In the eurozone, unlike the US, the unemployment rate jumped to 8.1%. In France, Lithuania and Spain, the indicator inched up by 0.3 percentage points. Analysts also emphasized that in Japan the indicator rose to 3% compared to 2.9% in July.

On the other side of the ocean, the labor market situation is more favorable. Thus, the US reported that in August, its unemployment rate dropped by 1.8 percentage points to 8.4% whereas in Canada the indicator went down by 0.7 percentage points to 10.2%. Moreover, the indicator was falling in the first month of the autumn in both countries. Thus, in the US, unemployment hit 7.9% and in Canada – 9%.


The material has been provided by portal -]]> Fri, 16 Oct 2020 08:58:53 +0000
<![CDATA[China’s Asian neighbors to benefit from its economic recovery]]>

If Europe’s main economic growth engine is Germany, then in Asia it is undoubtedly China. Whether China wants it or not, the gradual recovery of its economy will also benefit its neighbors in the region.

The neighboring Asian economies are expanding following China. Apparently, their growth will continue, since analysts assess the situation as favorable. The main cause of the optimistic estimates is definitely the rising consumer confidence index. "I continue to expect Chinese equities to outperform developed market equities because China has been showing a continued V-shaped rebound, you know, from coronavirus," David Chao, Invesco's Global Market Strategist for the Asia Pacific, said. It is clear that the pace of the economic recovery will not be as good as after the global financial crisis of 2008. Nevertheless, a rebound will take place and China will play a key role at this point. In fact, it has already been playing. China’s industrial production is advancing at the fastest pace in the last 10 years. The country’s business activity is on the rise, while the second-quarter gross domestic product spiked by 3.2% on a yearly basis.

It seems that China has managed to avoid a technical recession despite the fact that its economy contracted by a record 6.8% in the first quarter. It means that China’s neighboring countries will continue to enjoy the fruits of rapid economic recovery.

The material has been provided by portal -]]> Fri, 16 Oct 2020 08:56:31 +0000
<![CDATA[US banking giants report plunge in profits]]>

Several giants of the US and global financial industry reported a plunge in third-quarter net income. Among the "lucky ones" were Citigroup and Wells Fargo, as well as such market leaders as JPMorgan Chase and Bank of America.

That slump in earnings reflected the picture of how the coronavirus pandemic weighed on the US financial sector. Citigroup and Wells Fargo, the third- and fourth-largest US banks by total assets respectively, reported a 60% drop in revenue from a year earlier. JPMorgan Chase and Bank of America, which are ranked first and second in assets respectively, reported a 30% drop in net income. According to experts, the current strategy of the Fed contributed to such a rapid decline in returns. "You have soft loan growth and you're still feeling the impact from aggressive Fed actions earlier this year," analyst at Barclays Bank Jason Goldberg said. Indeed, the situation is a bit weird. Demand for bank loans is quite high. Besides, lenders did not make outsized provisions for expected loan losses in the third quarter as they did in the first and second quarters. However, their profits are still falling. Even such investment banks as Goldman Sachs Group and Morgan Stanley, primarily focused on capital markets, are expected to report third-quarter profit declines of about 5% to 10%.

The Fed has no immediate plans to make any drastic changes in its monetary policy. This means that in the last quarter of 2020 the US financial industry may suffer even greater losses than in the third one. The Fed's key rate is currently at a record low of 0.25%, while just a year ago it was 2.25%.

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<![CDATA[White House Gift Shop causes outrage by selling commemorative coins]]>

Donald Trump seems to have more fans than he could ever imagine. For instance, the White House Gift Shop has even decided to issue a commemorative coin in his honor in order to perpetuate his victory over the coronavirus. However, this decision turned out to be not as good as the gift shop had envisaged.

Many people were infuriated when it started selling coins "commemorating" the Covid-19 outbreak. "Historic Moments in History: President Donald J. Trump defeats Covid-19 with icons of his entire first term," the website where people can pre-order the coin reads. Anthony Giannini, the Board Chairman of the White House Gift Shop, said, "President Trump, whether you are in his corner or not, is a sui generis, a one-of-a-kind, bigger than life, singular energetic force". The new design (of the coin) includes more than a hint of superhero qualities in history's most fascinating president," he concluded. Its cost will be $100. The first batch is expected to be minted by the end of this month and will go on sale in mid-November. Naturally, this news caused anger among politicians and ordinary citizens given the epidemiological situation in the country. This is why the White House has hastily made a statement that the White House Gift Shop is a privately run online store and it has nothing to do with the White House or the Trump administration. Besides, on the gift shop's official website, the owner stresses, "The White House Gift Shop operates independently of the US government". Notably, profits from the selling of the coins will be donated to hospitals.

Curiously enough, President Harry S. Truman established this gift shop in 1946. It was transferred to a private shop years ago. However, it managed to hold the trademark "White House Gift Shop".

The material has been provided by portal -]]> Thu, 15 Oct 2020 14:32:06 +0000
<![CDATA[London may lose its status of Europe's financial hub]]>

Experts say that London may soon lose its position as the world's top financial center. The divorce saga with the EU, aggressive sanctions policy, and the coronavirus pandemic-driven crisis have triggered a large-scale runaway of financial companies from the UK.

Thousands of large firms decided to take away hundreds of billions of pounds from the country. Apart from the financial outflow, the UK is also losing personnel as many immigrants go back to their home countries.  Ernst & Young LLP, an audit inspection agency, reports that over the past four years of the Brexit saga, financial services firms operating in the UK have shifted more than 1.2 trillion pounds of assets as well as 7,500 employees to the European Union. In total, in the period from 2016 to 2020, 88 of the 222 UK companies have already moved or are preparing to move their business operations and their staff to one of the EU countries, while 26 companies are ready to relocate to other EU countries. Ireland is the leader among the most attractive countries for business as well as Germany, France, and Luxembourg.  Omar Ali, an expert on financial services in the UK, pinpointed that many financial services firms implemented most of their relocation plans before the start of this year, and their relocations were less noticeable in the first half of the year.

Other companies are closely monitoring how negotiation between London and Brussels is unfolding. They will make a final decision about whether to stay or leave based on the results of the talks. Given the fact that Brexit talks have reached an impasse, London is likely to continue witnessing the runaway of large companies, consequently losing its financial throne.

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<![CDATA[ECB ready to digitize euro]]>

The European Central Bank has entered the global race to digitize the national currency. On the official website, the regulator states that the digital version of the single currency will appear in the near future.  

The digital euro will be quite similar to the cryptocurrency but the central bank tends to avoid the term "cryptocurrency". According to the ECB, virtual money will be a great alternative in the event of a sharp decline in demand for cash. "Nowadays, central banks are entrusted with the fundamental task of providing citizens with costless access to simple, secure and risk-free means of payment that can be used on a large scale. Delivering on this task requires central banks to analyse relevant developments in society and adapt accordingly", Fabio Panetta, Member of the Executive Board of the ECB, pointed out. The coronavirus pandemic has become a catalyst for speeding up the implementation of digital technologies, which will help maintain financial activity in case of any shocks, including new epidemics or natural disasters. "In particular, it (the digital euro) would be needed in the event that citizens become reluctant to use cash as they go digital. This trend has accelerated during the pandemic – with a vast majority of consumers expecting to continue using digital payments as often as they do now, or even to use them more often in the future", the ECB official added. For this reason, the regulator must take measures to complement cash, not replace it. By introducing these two types of money, the central will bank will offer greater choice and easier access to ways of paying.

It is still difficult to understand how the introduction of the state cryptocurrency is consistent with the main principle of cryptocurrency operation. Digital money is characterized by decentralization and independence from state control. Therefore, the ECB may face serious problems on its way to the digital euro. Yet, it is sure to tackle this issue.  

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<![CDATA[Saudi Arabia imposes embargo on all Turkish goods]]>

Riyadh has decided to continue its boycott of Turkish goods which has added to the growing tensions between the two countries. Recently, Saudi Arabia has announced an official embargo on all imports for “made in Turkey” products. Notably, Turkish goods have been banned in Saudi Arabia for the first time in 30 years. Over the past few years, relations between Ankara and Riyadh have been strained due to differences in foreign policy. Currently, Saudi Arabia is putting pressure on local businesses forcing them not to trade with Turkey and advising its citizens to refrain from traveling to Turkish resorts. Lately, the country has been going through tough times. The foreign policy adopted by Turkey’s President Recep Tayyip Erdogan has resulted in the country losing its allies, trading partners, and sources of revenue. The national budget is suffering losses. Besides, the country’s access to global financial markets is restricted. The same will soon happen to Turkey’s major export market.  The head of Istanbul Apparel Exporters’ Association commented on the situation, “Saudi Arabia is our main trading partner, but my Saudi counterparties no longer purchase from us as they were ordered by the government, so they are now afraid. By the end of the month, the trade will stop. We are shipping the last orders, and we do not know what to do next.” At first, Riyadh blocked hundreds of Turkish trucks from crossing the border. Now, the Saudis have imposed an official ban that could deal a hard blow to the already struggling Turkish economy. Amid this news, the Turkish lira tested new record lows. Even the Central Bank of the Republic of Turkey, which raised its interest rate from 8.25% to 10.25%, failed to stop the continued decline.

The material has been provided by portal -]]> Thu, 15 Oct 2020 08:34:57 +0000