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Eurodollar University’s Making Sense; Episode 65; Part 2: Is Jay Powell Right?

US producer prices surged in the month of March. But Federal Reserve chairman Jay Powell said they won’t last, that they are “transitory”. But the reason he gives – the covo – is not correct. No, the reason is the same one since 2007: the global, sil...
Alhambra Investments
Alhambra Investments 20 April 2021

The Durable Hibernating of Vigilantism

When their paper came out in January 2010, Carmen Reinhart and Kenneth Rogoff put a number on bond vigilantism as it had been known in prior history. Whereas interest rates skyrocketed on those specific members’ debt securities, all that turned aroun...
Alhambra Investments
Alhambra Investments 20 April 2021
The Durable Hibernating of Vigilantism
The Durable Hibernating of Vigilantism

Sustainability means more than just green bonds

Sustainability is driving innovation in investment-grade credit. Equally for investors, these bonds may meet their needs to move toward more sustainable investments. The International Capital Markets Association (ICMA) has drawn up process guidelines...
Wells Fargo
Wells Fargo 20 April 2021

The digital revolution is eating its young

As massive online platforms have given rise to numerous virtual marketplaces, a gap has opened between the real and the digital economy. Digitally native companies that benefited from the suspension of traditional factors of production have been grow...
Brookings
Brookings 20 April 2021
The digital revolution is eating its young
The digital revolution is eating its young

Productivity After the Pandemic

After years of disappointing productivity growth, the COVID-19 pandemic has shaken something loose, with surveys of business executives showing most reporting increased investments in technology. As a valued reader, your feedback is greatly appreciat...
Project Syndicate
Project Syndicate 20 April 2021
Productivity After the Pandemic
Productivity After the Pandemic

Huawei 'strikes back': Global 5G patent battle might be getting started

The Chinese telecommunications giant is showing aggressive intellectual property litigation to hedge the risk of U.S. sanctions. Meanwhile, per Mr. Ding, the rates for other 5G-enabled devices may vary. It is well known that Huawei's most critical pr...
EqualOcean Fuller
Fuller Wang @ EqualOcean 20 April 2021
Huawei 'strikes back': Global 5G patent battle might be getting started
Huawei 'strikes back': Global 5G patent battle might be getting started

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This morning's briefing

UK government intervenes in Nvidia’s US$40bn Arm takeover on national security concerns.
While the deal may not be a typical national security case (albeit semiconductors underpinning defence technologies and chips at the centre of the US-China trade war), the UK government’s decision could also signal a major shift in industrial policy – where tech moves from being seen as the leading edge of private sector innovation to becoming a core part of industrial policy. Is Tech the new oil or the new defence? In his report, Paul Domjan says it will be ironic, but not at all surprising, if the Tech War that began with the Trump administration accusing Huawei of being a vehicle for Chinese state policy leaves all tech globally, to a lessor or greater degree, as a vehicle for state policy. On the one hand, we have the military-industrial complex, where the state plays a substantial role in shaping the activities of private companies. On the other hand, the oil and gas industry shows what tech might look like in a more fluid, less extreme tech war. Get the full story →
UK government intervenes in Nvidia’s US$40bn Arm takeover on national security concerns.
China’s Digital Yuan is not a threat for Alibaba and Tencent.
The Chinese government launched the Digital Currency Electronic Payment (DCEP) project, aimed at digitising circulated cash and to assimilate payment methods from local tech giants, including Alibaba-backed Ant Group and Tencent. The project allows the public to save their digitised bills and coins in a separated state-designed app. Contrary to popular belief, the DCEP will not harm large e-payment companies like Alipay and WeChat Pay, according to analysts at EqualOcean. They look at why the Alibaba-Tencent duopoly in the Chinese e-payment market is not likely to be shaken by the brand-new state project. Get the full story →
China’s Digital Yuan is not a threat for Alibaba and Tencent.
UK is the latest to explore a central bank digital currency.
In our 2021 global themes we said that this year we would begin to find out the real shape of central bank digital currencies (CBDCs)... so it is proving. But CBDCs will more evolutionary then revolutionary. Unlike cryptocurrencies, which are designed around a permissionless and transparent architecture, the issuing central bank will be able to design in terms of use and limitations. Nevertheless, if they offer a genuine token of value, CBDCs could easily solve the problems that have driven many people in the emerging markets to adopt cryptocurrencies. Get the full story →
UK is the latest to explore a central bank digital currency.
Ukraine: What lies behind the Russian escalation.
Recent weeks have seen a build-up of Russian military forces on Ukraine’s borders and in illegally occupied Crimea, with not only an escalation of tensions and rhetoric, but also an increase in fighting and fatalities, on both sides. Russia’s actions are seen as intimidatory, not a harbinger of military conflict. But we cannot discount the threat of military action, even if an invasion is seen as unlikely. In our latest report, we discuss what’s behind Russia’s recent military build-up against Ukraine, what it means, Putin’s objectives and what the international community can or might do. Get the full story →
Ukraine: What lies behind the Russian escalation.
US embargo on raw materials threatens to stymie global vaccine production.
The US's Defense Production Act, which was used to boost the country's own vaccine production, has halted exports of some critical vaccine components. The Serum Institute of India, the world's largest vaccine manufacturer, warned this would limit the amount of vaccine they were able to produce. It would also reduce the US's ranking in our Vaccine Diplomancy Scorecard, which is currently led by China. Get the full story →
US embargo on raw materials threatens to stymie global vaccine production.
As cryptocurrency moves further mainstream, emerging markets could benefit most.
Coinbase’s recent Nasdaq listing and Tesla now holding cryptocurrency on its balance sheet signal that cryptocurrency’s inexorable shift to the mainstream is gathering momentum. Government largesse to cushion economies crippled by Covid lockdowns is putting pressure on the credibility of fiat currencies. EM investors have long known about the risks of sovereign financial indiscipline, and in such markets crypto could become an established store of value or medium of exchange. Indeed, Nigeria is currently the world’s third most active crypto market, despite central bank opposition. Get the full story →
As cryptocurrency moves further mainstream, emerging markets could benefit most.
In case you missed it

This morning's briefing

UK government intervenes in Nvidia’s US$40bn Arm takeover on national security concerns.
While the deal may not be a typical national security case (albeit semiconductors underpinning defence technologies and chips at the centre of the US-China trade war), the UK government’s decision could also signal a major shift in industrial policy – where tech moves from being seen as the leading edge of private sector innovation to becoming a core part of industrial policy. Is Tech the new oil or the new defence? In his report, Paul Domjan says it will be ironic, but not at all surprising, if the Tech War that began with the Trump administration accusing Huawei of being a vehicle for Chinese state policy leaves all tech globally, to a lessor or greater degree, as a vehicle for state policy. On the one hand, we have the military-industrial complex, where the state plays a substantial role in shaping the activities of private companies. On the other hand, the oil and gas industry shows what tech might look like in a more fluid, less extreme tech war. Get the full story →
UK government intervenes in Nvidia’s US$40bn Arm takeover on national security concerns.
China’s Digital Yuan is not a threat for Alibaba and Tencent.
The Chinese government launched the Digital Currency Electronic Payment (DCEP) project, aimed at digitising circulated cash and to assimilate payment methods from local tech giants, including Alibaba-backed Ant Group and Tencent. The project allows the public to save their digitised bills and coins in a separated state-designed app. Contrary to popular belief, the DCEP will not harm large e-payment companies like Alipay and WeChat Pay, according to analysts at EqualOcean. They look at why the Alibaba-Tencent duopoly in the Chinese e-payment market is not likely to be shaken by the brand-new state project. Get the full story →
China’s Digital Yuan is not a threat for Alibaba and Tencent.
UK is the latest to explore a central bank digital currency.
In our 2021 global themes we said that this year we would begin to find out the real shape of central bank digital currencies (CBDCs)... so it is proving. But CBDCs will more evolutionary then revolutionary. Unlike cryptocurrencies, which are designed around a permissionless and transparent architecture, the issuing central bank will be able to design in terms of use and limitations. Nevertheless, if they offer a genuine token of value, CBDCs could easily solve the problems that have driven many people in the emerging markets to adopt cryptocurrencies. Get the full story →
UK is the latest to explore a central bank digital currency.
Ukraine: What lies behind the Russian escalation.
Recent weeks have seen a build-up of Russian military forces on Ukraine’s borders and in illegally occupied Crimea, with not only an escalation of tensions and rhetoric, but also an increase in fighting and fatalities, on both sides. Russia’s actions are seen as intimidatory, not a harbinger of military conflict. But we cannot discount the threat of military action, even if an invasion is seen as unlikely. In our latest report, we discuss what’s behind Russia’s recent military build-up against Ukraine, what it means, Putin’s objectives and what the international community can or might do. Get the full story →
Ukraine: What lies behind the Russian escalation.
US embargo on raw materials threatens to stymie global vaccine production.
The US's Defense Production Act, which was used to boost the country's own vaccine production, has halted exports of some critical vaccine components. The Serum Institute of India, the world's largest vaccine manufacturer, warned this would limit the amount of vaccine they were able to produce. It would also reduce the US's ranking in our Vaccine Diplomancy Scorecard, which is currently led by China. Get the full story →
US embargo on raw materials threatens to stymie global vaccine production.
As cryptocurrency moves further mainstream, emerging markets could benefit most.
Coinbase’s recent Nasdaq listing and Tesla now holding cryptocurrency on its balance sheet signal that cryptocurrency’s inexorable shift to the mainstream is gathering momentum. Government largesse to cushion economies crippled by Covid lockdowns is putting pressure on the credibility of fiat currencies. EM investors have long known about the risks of sovereign financial indiscipline, and in such markets crypto could become an established store of value or medium of exchange. Indeed, Nigeria is currently the world’s third most active crypto market, despite central bank opposition. Get the full story →
As cryptocurrency moves further mainstream, emerging markets could benefit most.
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