When Ant Financial added a money market fund to its payment app, few people expected it to become the biggest in the world a couple of years later. Its runaway success is a sign of China’s financial potential, as well as a deep and worrisome imbalance within its $13 trillion economy.
Around the world, things are looking a little shaky. South Korea’s GDP just shrank unexpectedly. Germany is barely growing, dragging down an already sickly euro-zone economy. Japan is sputtering.
What happens when America’s deal-maker-in-chief takes on “the worst trade deal in the history of the world”? Not much, it turns out.
The business strategy that will land Uber on the NYSE hinges on a key element: staggering sums of venture capital money. These investments let Uber and similar tech startups collect users by undercharging them. That’s great for well-off city-dwellers, who have benefited from deep discounts on everything from pet-sitting to grocery shopping and laundry delivery to watermelon apportionment.
We may look back on Lyft’s initial public offering as the end of a beautiful era, a time of plenty. For well-off city-dwellers, anyway.
The American economy is slowing. German factories are sputtering. Yield curves are inverting. But the US job market is looking up—way up.
A few days ago, Donald Trump tweeted a characteristically all-caps boast that was uncharacteristically accurate:
Forget the “wall”—it’s a trade statistic that Donald Trump has staked his presidency on.
Remember back in September 2018, before markets went haywire and the Chinese economy started looking extra-shaky? In those sunnier days, even the chary folks of the Federal Reserve saw good times ahead and predicted the US would grow a solid 2.5% (pdf) in 2019.
If you want to learn more about the arguments and data I explored in the State of Play, a solid starting point is the Bank for International Settlements website. To begin your data spelunking, your cave entrance is the BIS statistics page, which offers several interfaces for finding and organizing the data, as well as a list of the latest data releases. I like the Statistics Warehouse best; it lets you customize your data search and tweak the variables with dropdown menus as you go along. Plus, you can save the link to previous queries, making for easier updating of charts. Data series you can choose from include credit (volumes and share of GDP), global liquidity (by major currency), debt service ratios, foreign exchange rates, central bank interest rates, consumer price inflation, and home prices (among other things). Most include data for a few-dozen countries; some series go as far back as 1952.
When the global financial crisis hit in 2007, it was easy to blame Americans for their reckless mortgage binge. Their median wages had barely budged since the late 1970s, and yet here they were, buying McMansions they couldn’t afford, living beyond their means.
Known as the “central bankers’ central bank,” the Bank for International Settlements (BIS) provides financial services for the world’s central banks and promotes global monetary and financial stability. The Basel-based organization was founded in 1930, making it the oldest global financial institution. It is also one of the most influential—even though its research increasingly challenges the monetary policy orthodoxy that has seen the central banks in the US, Europe, and Japan embrace low interest rates and unprecedentedly huge bond-buying programs in the last decade. Its top economist, Claudio Borio, has long led this research effort. Quartz caught up with Borio recently to discuss what BIS analysis of “financial cycles” suggests about risks of recession and financial instability around the world.
To someone living in the industrialized world in 1979, devastating financial bubbles were like smallpox pandemics or famine—tragedies most knew only through history texts and newspaper stories about poor countries. The last one to hit the US was a full half-century ago, when America’s stock market crashed spectacularly. Bubbles in major industrial countries were rare. Japan had never experienced a single one, ever. That made it harder to grasp what happened next.
Last year, the slowdown that China had staved off for years finally hit—just as Donald Trump began pummeling the country with tariffs. Beijing and the White House are now negotiating a trade war truce. What’s remarkable, though, is that China hasn’t yet cried uncle and reversed the practices Trump condemns—most notably, its industrial policies that support domestic companies.
It was a moment of crackling intensity in the first 2016 presidential debate. About 40 minutes in, Hillary Clinton hit Donald Trump with an ugly accusation: “I’ve met dishwashers, painters, architects, glass installers, marble installers, drapery installers… who you refused to pay when they finished the work that you asked them to do.” Trump ducked the charge. Clinton redoubled. He ducked again.
When General Motors announced last month that it was shutting down small-car production and mothballing its Lordstown Assembly plant outside of Youngstown, in northeast Ohio, the news felt inevitable. While GM once built nine of every 20 new cars sold in America between 1950 and 1980, its market dominance has long since faded. Along with the other two of Detroit’s “Big Three” automakers, GM has been slashing shifts and shuttering factories for decades, gutting cities like Youngstown across America.
It’s notoriously hard to guess when an economic downturn is imminent. One of the few consistently reliable recession alarm bells is what’s called a “yield-curve inversion,” when yields for short-term bonds jump above those on long-term bonds.
The year 2008 was terrible for pretty much everyone—but for US Christmas tree growers, it was especially wretched. Right as the double-whammy of recession and financial crisis hit, a sudden glut of trees that year caused prices to nosedive. Farmers folded en masse.
The gaping US trade deficit widened for a fifth straight month, as Americans bought $55.5 billion more in goods and services from abroad than they sold in October. The last time the deficit was this big was a decade ago, in October 2008.
China has been at it again: cheating Americans. Its latest treachery? The Chinese government has been subsidizing its native manufacturers of rubber bands, allowing them to “dump” their stretchy wares on Americans at prices nearly 30% below fair market value.
Blue wave—or periwinkle ripple? The debate about whether Democrats’ gains in the House of Representatives were better or worse than expected rages on. One narrative everyone seems to agree on, though, is the realignment of rural America into a bulwark of support for Donald Trump and his Republican party.
Donald Trump’s America First economic policies are designed to shrink the US trade deficit. But according to Janet Yellen, the former chair of the Federal Reserve, the deficit is on track to get bigger by the end of 2018.
A truism of American politics is that California has its own values. That goes for real estate too, it turns out. Across the US, fewer than four out of every 100 homes are worth more than $1 million—compared with four out of every five in San Francisco. That’s according to analysis by Trulia, an online residential property platform.
Is China’s economy slumping? Is the trade war dousing Chinese business activity? Not according to the October trade data.
