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Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailSeeing negative spillovers from natural gas bear market to oil demand: Goldman Sachs' Daan StruyvenDaan Struyven, Goldman Sachs head of oil research, joins 'Squawk Box' to discuss the state of the oil and commodities market, impact of high rates on oil prices, oil demand and supply trends, and more.
Persons: Goldman Sachs, Daan, Daan Struyven
"Knowledge spillovers" are IRL meetings that can expand your network or help you learn new things. Economists define knowledge spillovers as serendipitous meetings — on the bus or in a bar, for example — that can expand your professional network or help you learn new things. It's one reason big cities have been "underappreciated" during the pandemic, says economist Enrico Moretti. AdvertisementA 2022 study on knowledge spillovers in Silicon Valley cited the work of developer AnnaLee Saxenian, stating that "frequent face-to-face interactions, and the knowledge flows that resulted, were a large part of what made Silicon Valley the dominant technology hub it is today." You can read more about the professional benefits to living in a big city right here.
Persons: , Insider's Aki Ito, Enrico Moretti, AnnaLee Organizations: Service Locations: Silicon Valley
"When we do the risk assessment around that baseline, the chances that we would have something like a global recession is fairly minimal. The Washington DC-based institute this week nudged its global growth outlook slightly higher to 3.2% in 2024 and projects the same rate in 2025. One of the International Monetary Fund's top economists signals little risk of a global recession, despite the ongoing rumblings of geopolitical uncertainty. That has all combined with the ongoing Russia-Ukraine war, which had its biggest wider impact on energy prices in Europe in 2022. And that's one of the big risks that we do see, the implications that could have for oil prices could be substantial.
Persons: Gourinchas, Pierre, Olivier Gourinchas, Karen Tso, Gita Gopinath, we're Organizations: U.S, IMF, Washington DC, International Monetary, Palestinian, Hamas, CNBC Locations: Europe, New York, Germany, France, Italy, Spain, Portugal, Belgium, Gaza, Red, Yemeni, Russia, Ukraine, Asia, Israel, Iran
US Treasury Secretary Janet Yellen attends a press conference at US Ambassador's residence in Beijing on April 8, 2024. U.S. Treasury Secretary Janet Yellen is preparing new sanctions on Iran after the country launched hundreds of drones and missiles at Israel over the weekend. "The attack by Iran and its proxies underscores the importance of Treasury's work to use our economic tools to counter Iran's malign activity." Israel said it intercepted 99% of the more than 300 projectiles from Iran. The U.S. has imposed hundreds of sanctions on Iran and its proxies in recent years for their connections to terrorism and for the country's missile program.
Persons: Janet Yellen, Yellen Organizations: US, Treasury, International Monetary Fund, country's Locations: Beijing, Iran, Israel, Iranian, Syria, The U.S, Red
Moving away from a major city, Moretti found, can be terrible for your career. The market for WFH jobs has cratered, putting everyone who moved away from big cities at risk. Those who moved away from big cities effectively gave up their career insurance. In a big city, you also run into people who work for other companies in your industry — on the bus, at the bar, in line at the deli. "The benefits of being a big city," Moretti tells me, "have been underappreciated" during the pandemic.
Persons: I've, , We've, Enrico Moretti, Moretti, Des Moines, they'll, they're overqualified, That's, Madison Hoff, Aki Ito Organizations: Franciscan, Census, University of California, Business Locations: New York, Los Angeles, San Francisco, Seattle, America's, Berkeley, Paris, Des, Iowa, California, Sacramento, Bay
“China is now simply too large for the rest of the world to absorb this enormous capacity,” Yellen told reporters Monday. US intelligence has warned that China is providing technology and equipment to Russia that is important to Moscow’s war in Ukraine. During her last visit to Beijing, Yellen dramatically boosted business for a Yunnan restaurant chain and its mushroom dish after her delegation was spotted dining there. “As a US official, Yellen needs to know more about China than just its food. Only by understanding China better, can she correct the US worldview and its views of China and China-US relations.”
Persons: Janet Yellen, Yellen, Joe Biden, Xi Jinping, , China Nicholas Burns, Pedro Pardo, Li Qiang, ” Yellen, Li, Biden, , Mao Ning, Xi, CNN’s Marc Stewart, we’ve, Andy Wong, “ Yellen, Tao Tao Organizations: Hong Kong CNN, Russia, China's, Getty, Vice, Foreign Ministry, Treasury Department ., Ukraine, China’s, Ministry, Locations: China, Hong Kong, Guangzhou, Beijing, United States, AFP, Washington, Xinhua, Russia, Ukraine, Treasury Department . China, San Fransisco, , Yunnan, Weibo
Ambassador to China Nicholas Burns (R) receive U.S. Treasury Secretary Janet Yellen (R) upon her arrival in Guangzhou on April 4, 2024. Pedro Pardo | Afp | Getty ImagesBEIJING — U.S. Treasury Secretary Janet Yellen kicked off her first full day of official meetings in China with discussion about overcapacity concerns and encouragement to pursue market-oriented reforms. It is her second trip to China as Treasury secretary. China's growth potentialGuangdong is one of the largest contributors to China's economic growth and home to the city of Shenzhen, a major hub for tech companies and startups. "In recent decades, [Guangzhou] was at the forefront of market-oriented reforms that advanced China's economic development and openness," Yellen said in prepared remarks for her meeting with Wang.
Persons: Liao Min, China Nicholas Burns, Janet Yellen, Pedro Pardo, Yellen, Wang Weizhong, Wang, I've, Nicholas R, Lardy Organizations: Finance, U.S, Treasury, Afp, Getty, Peterson Institute for International Economics, Foreign Affairs Locations: China, Guangzhou, BEIJING, U.S, Beijing, Guangdong province, United States, Guangdong, Shenzhen, Asia
This could create a "China shock 2.0" that impacts other economies around the world. AdvertisementThis is just one of the industries the world is bracing for in the next phase of the "China shock." What happened in China shock 1.0? How Beijing could be creating China shock 2.0Now, China is targeting three new strategic industries that the rest of the world is also eyeing. What are the US and the rest of the world doing about China shock 2.0?
Persons: , Xi, David H, Autor, David Dorn, Gordon H, Hanson, Rajiv Biswas, who's, Biswas, keener, Janet Yellen, Yellen, it's, Wang Wenbin, Wang, Nomura Organizations: Service, Beijing, OECD, European Union, Department of Energy, Treasury, European Commission, EU, Act, Wall Street, Bloomberg Locations: China, EU, Beijing, Communist China, Georgia, Southeast Asia, Africa, Latin America
"China's overcapacity distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world." China has a surplus of solar power, electric vehicles and lithium-ion batteries that it can ship out to other countries at cheaper prices. Yellen said she intends to put pressure on Chinese officials about these trade practices during her upcoming visit to China. Meanwhile, China has been pouring billions into clean energy for years, outpacing the rest of the world in the energy transition. Yellen added that the more China's clean energy glut interferes with global market prices, the worse off supply chains for these energy sectors will be.
Persons: Janet Yellen, Yellen, Biden Organizations: Treasury, Financial Services, General Government, Rayburn House, White House, Biden Administration, Embassy Locations: Washington , DC, China, U.S, Georgia, Washington
The US economy will see a surge in growth as more people start to take GLP-1 weight loss drugs. "The main reason we see economic upside from healthcare innovation is that poor health imposes significant economic costs," Goldman Sachs said. The more people that take GLP-1 weight loss drugs, the faster the US economy will grow, according to estimates from Goldman Sachs. The bank said in a note on Thursday that US GDP would grow by an extra 1% if 60 million Americans took GLP-1 drugs by 2028. There are several channels through which poor health weighs on economic activity that could diminish if health outcomes improve," Hatzius said.
Persons: Goldman Sachs, , Jan Hatzius, Hatzius, Eli Lilly, Goldman Organizations: Service, Goldman, Novo Nordisk
"We estimate that real house prices in China declined 16% from the peak in 2021Q3 to 2023Q3," Goldman analysts said. For context, US real house prices peaked in early 2006 and bottomed in 2012. Goldman's derived measure of China's real house prices has only dropped by half as much as the US saw during its six-year collapse, as the chart shows below. Goldman Sachs"[O]verly loose mortgage lending standards and too much mortgage debt, which were at the center of the US subprime crisis, do not apply in China," Goldman analysts said. Foreclosures soared as homeowners couldn't afford to pay off or refinance their mortgages, which lowered house prices further.
Persons: , Goldman Sachs, Goldman, Price Organizations: Service, International Monetary Fund, Business, Housing Locations: China, Beijing, 2021Q3
Commercial real estate prices are in the midst of one of the biggest drops in the past half-century, the IMF said. AdvertisementUS commercial real estate prices are enduring one of the sharpest drop-offs in the last half-century, easily topping losses seen in previous rate-hike cycles, the International Monetary Fund said. Since the Federal Reserve's first interest rate hike in March 2022, US commercial property prices have slumped by over 11%, the agency outlined in a blog post. "Some of the earlier rate hikes, though, such as in 2004-06, were subsequently followed by a recession during which commercial property prices recorded notable declines as demand fell." In one worst-case scenario, that could as much as $1 trillion in commercial real estate equity, according to Cantor Fitzgerald CEO Howard Lutnick.
Persons: , Andrea Deghi, Cantor Fitzgerald, Howard Lutnick Organizations: Service, International Monetary Fund, Federal, International Monetary, IMF
Everything was getting bigger — its cultural influence, geopolitical ambition, population — and seemed poised to continue until the world was remade in China's image. But now China's economy is withering, and the future Beijing imagined is being cut down to size along with it. What Beijing does — or fails to do — to fight this malaise will determine the course of humanity for decades to come. China's deflation worries started in earnest in the summer. Years of overbuilding — by about double the population, according to some estimates — and slowing population growth caused prices to collapse .
Persons: Minxin Pei, there's, Charlene Chu, Autonomous Research Charlene Chu, Chu, Wei Yao, Générale, I'm, Ben Bernanke, Bernanke, Xi Jinping, Xie Huanchi, Société Générale's Yao, Yao, It's, , aren't, Logan Wright, Wright, Xi doesn't, Jinping, it's, Xi, Claremont's Pei, magnanimity Organizations: Claremont McKenna College, Autonomous Research, Federal Reserve, Getty Images Japan, Chinese Communist Party, Xi, CCP Locations: China, Beijing, dauphin, Xinhua, Japan, Xi's China, East Asia, Taiwan, Europe
How the Red Sea crisis could clobber the global economy
  + stars: | 2024-01-10 | by ( Hanna Ziady | ) edition.cnn.com   time to read: +9 min
The Suez Canal accounts for 10-15% of world trade, which includes oil exports, and for 30% of global container shipping volumes. Maersk CEO Vincent Clerc told the Financial Times Thursday that re-establishing safe passage through the Red Sea could take “months.” “It could potentially have quite significant consequences on global (economic) growth,” he added. Ikea has warned of shipment delays and potential shortages of certain products due to disruption in the Red Sea. Some ocean carriers that ordinarily transit through the Panama Canal had rerouted to the Suez Canal before the attacks in the Red Sea escalated, according to logistics company C.H. Matthew Burgess, vice-president of global ocean services at the firm, said global shipping capacity would be constrained for a while yet.
Persons: Joe Biden, Vincent Clerc, Germany’s, Mohamed, El Erian, ” Simon MacAdam, Lily Millard, Ben May, Good Hope, , ” It’s, Abercrombie &, Nathan Howard, , ” Philip Damas, , Judah Levine, Levine, Eric Thayer, Carolina Klint, Marsh McLennan, Robinson, Matthew Burgess, we’ve, Gene Seroka, Burgess, C.H Organizations: London CNN, British, Energy, World Bank, Maersk, MSC, Lloyd, CMA CGM, Financial Times, Global, Germany’s Kiel Institute, Allianz, Bank, Capital Economics, Oxford Economics, European Automobile Manufacturers ’ Association, Ikea, CNN, Abercrombie, Abercrombie & Fitch, Bloomberg, Getty, Drewry Supply Chain Advisors, Marsh, United, Port Locations: Iran, Crocs, Suez, Yemen, Gaza, Germany, Brent, Gulf, Oman, South Africa, Germany’s Kiel, Red, Israel, Good, Europe, , China, Asia, Los Angeles, United States, Panama, Rotterdam, of Los Angeles, of New York, New Jersey
"I believe that a 'soft landing' is possible, with continued disinflation and a strong labor market, but it is not assured," Cook said in remarks prepared for delivery to a San Francisco Fed conference on Asian economic policy. "I see risks as two-sided, requiring us to balance the risk of not tightening enough against the risk of tightening too much." Meanwhile, Cook noted, other global central banks have also tightened policy rapidly. "But in a world of uncertainty it is hard to judge the exact size of these spillovers." Reporting by Ann Saphir; Editing by Paul SimaoOur Standards: The Thomson Reuters Trust Principles.
Persons: Lisa Cook, Jonathan Ernst, Cook, bank's, there's, Ann Saphir, Paul Simao Organizations: Federal Reserve, of Governors, Capitol, REUTERS, FRANCISCO, Federal, San Francisco Fed, U.S, Thomson Locations: Washington , U.S, U.S
FRANKFURT, Germany (AP) — The European Union's executive commission lowered growth its expectations for this year and next, saying the economy “has lost momentum” as inflation discourages consumers and higher interest rates deter borrowing for purchases and investment. And the outlook is exposed to risks of trouble spreading from Russia's ongoing war against Ukraine and the Israel-Hamas war in Gaza. Nevertheless, “the main risk that we see is energy prices,” said Paolo Gentiloni, the EU's commissioner for economy. Meanwhile, government deficits and debt have declined after a burst of stimulus spending during the COVID-19 pandemic. "Importantly, this forecast foresees wage growth exceeding inflation, finally allowing workers to at least partially recovery purchasing power, Gentiloni said.
Persons: , , Paolo Gentiloni, Gentiloni Organizations: United Arab, European Central Bank Locations: FRANKFURT, Germany, Ukraine, Israel, Gaza, Saudi Arabia, United Arab Emirates, Brussels
REUTERS/Ken Cedeno/Pool/File Photo Acquire Licensing RightsDUBLIN Nov 8 (Reuters) - A rise in geopolitical tensions across the world could aggravate already subdued growth in Europe and China and the spillover may alter the path of the U.S. economy, Federal Reserve Governor Lisa Cook said on Wednesday. "We are not only watching subdued growth, we're watching the geopolitical tensions that we're all talking about, and that could change the outlook both in the United States and the global economy." Cook added that geopolitical tensions may in particular destabilize commodity markets and access to credit in the current higher interest rate environment. "Any shock could make the situation worse that we're already (in)... and could be destabilizing to commodity markets, could be destabilizing to the system of credit," Cook said. "More broadly, escalation of geopolitical tensions could lead to lower economic activity and increased fragmentation of global trade flows and financial intermediation, raising financing and production costs and contributing to more sustained supply chain challenges and inflationary pressures," Cook said.
Persons: Lisa DeNell Cook, Ken Cedeno, Lisa Cook, Cook, We're, Padraic Halpin, Conor Humphries, Ann Saphir, Lindsay Dunsmuir, Leslie Adler, Mark Potter Organizations: Governors, Federal Reserve System, Banking, Housing, Urban, Capitol, Washington , D.C, REUTERS, DUBLIN, Federal, Central Bank of Ireland, Thomson Locations: Michigan, Washington ,, Europe, China, U.S, Dublin, United States, Ukraine, Russia, East, San Francisco
Because spillover risk is concentrated in lower income countries in the tropical south, the cost of preventing another pandemic falls squarely on nations that can least afford it. To that end, federal and state officials say they are talking about ways to protect bat habitats in areas where spillover risk is high. Investigators still don’t know precisely how the virus jumped from bats to people in each of the four Kerala outbreaks dating back to 2018. BAT MAGNETS: Bananas and areca nuts grow on land that was home to the first patient who died in a recent Nipah outbreak in Kerala, India. The state would need to act to protect trees and bat roosts, they said.
Persons: Subrat Mohapatra, ” Mohapatra, coronaviruses, Bhupender Yadav, Veena George, , Nigel Sizer, Biden, Sizer, Pamela Hamamoto, Muhammad Ali, Pinarayi Vijayan, Sreehari Raman, “ I've, ” Raman, Kerala Agricultural University Dean P.O, Nameer, Sajith Kizhakkayil, , ” Vijayan, Unni Vengeri, Francisco Pérez, Sreekanth Sivadasan, Rupam Jain, Deborah J, Nelson, Ryan McNeill, Allison Martell, Sam Hart, Simon Newman, Janet Roberts, Feilding Organizations: World Health Organization, Reuters, WHO, Bank, Fund, European, European Union, BAT, Kerala Agricultural University, Research, United, Coalition, European Commission Locations: INDIA, India’s Kerala, India’s, Asia, Kerala, Kozhikode, Geneva, U.S, European, Malaysia, Bangladesh, India, United Nations, Maruthonkara, Changaroth, Kerala’s midland, Berlin
There is a thing that happens in cities — that we think happens in cities — when people with lots of different ideas bump into each other on the sidewalk, or at the bar or the grocery store or the gym. The urbanist icon Jane Jacobs identified these collisions as central to what makes cities dynamic. “The chance encounters facilitated by cities,” the economist Edward Glaeser has written, “are the stuff of human progress.”Remote work has, well, blurred this picture. How do workers spill their knowledge when they’ve moved to Montana, or the exurbs? “It’s a trying time, certainly, for my view of the world,” said Enrico Moretti, a Berkeley economist who has written extensively about why it’s good for workers, companies and the economy when people cluster in particular cities.
Persons: Jane Jacobs, , Edward Glaeser, they’ve, , Enrico Moretti Locations: , Montana, Berkeley
"Under the Xi administration, China probably shifted its attention away from economics," he told Reuters. "What's fast emerging is the risk of China slipping into deflation, or the 'Japanization' of its economy," Bank of Japan (BOJ) board member Asahi Noguchi said on Thursday. In its World Economic Outlook, the IMF cut China's growth forecast for this year to 5.0% from 5.2% in April, and warned that its property sector crisis could deepen with global spillovers. To be sure, there are differences between what is happening in China and the experience of Japan. "Overall, we believe that China can avoid a prolonged period of sub-par growth with the right policies," Srinivasan said, when asked about the chance of "Japanization" in China.
Persons: Aly, Hiroshi Watanabe's, Hiroshi Watanabe, Japan's, Watanabe, Xi, Asahi Noguchi, Krishna Srinivasan, Srinivasan, doesn't, Leika Kihara, Tetsushi Kajimoto, Chizu Organizations: China Evergrande Group, REUTERS, Japan, Reuters, International Monetary Fund, World Bank, Bank of Japan, Economic, Pacific Department, Thomson Locations: Danzhou, Hainan province, China, Japan, MARRAKECH, Morocco, Marrakech, Asia, Beijing, Tokyo
China's post-lockdown economic boost lost momentum earlier than expected, the IMF said. "On the downside, a more protracted real estate crisis and limited policy response in China would deepen the regional slowdown." A sudden tightening of global financial conditions could lead to capital outflows and weaken exchange rates in Asia, the blog added. "While Asia is still set to contribute about two-thirds of all global growth this year, it is important to note that growth is significantly lower than what was projected before the pandemic," the IMF said. The Bank of Japan (BOJ) had maintained a cap on the country's 10-year bond yield at around zero, to support a fragile economy.
Persons: Aly, Leika, John Stonestreet Organizations: China Evergrande Group, REUTERS, China, International Monetary Fund, IMF, Bank of Japan, Thomson Locations: Danzhou, Hainan province, China, Asia, MARRAKECH, Morroco, U.S, outflows, Marrakech, Japan
"Under the Xi administration, China probably shifted its attention away from economics," he told Reuters. "What's fast emerging is the risk of China slipping into deflation, or the 'Japanization' of its economy," Bank of Japan (BOJ) board member Asahi Noguchi said on Thursday. In its World Economic Outlook, the IMF cut China's growth forecast for this year to 5.0% from 5.2% in April, and warned that its property sector crisis could deepen with global spillovers. To be sure, there are differences between what is happening in China and the experience of Japan. "Overall, we believe that China can avoid a prolonged period of sub-par growth with the right policies," Srinivasan said, when asked about the chance of "Japanization" in China.
Persons: Aly, Hiroshi Wanatabe, Watanabe, Xi, Asahi Noguchi, Krishna Srinivasan, Srinivasan, doesn't, Leika Kihara, Tetsushi Kajimoto, Chizu Organizations: China Evergrande Group, REUTERS, Japan, Reuters, International Monetary Fund, World Bank, Bank of Japan, Economic, Pacific Department, Thomson Locations: Danzhou, Hainan province, China, Japan, MARRAKECH, Morocco, Marrakech, Asia, Beijing, Tokyo
REUTERS/Susana Vera Acquire Licensing RightsMARRAKECH, Morocco, Oct 10 (Reuters) - The International Monetary Fund said on Tuesday that it is seeing "significant support" for a U.S.-backed increase in quota lending resources without changes to its shareholding structure at IMF and World Bank meetings in Morocco. "I think it would be a good thing to have a deadline on the formula, because without changing the formula, we are stuck." An IMF spokesperson confirmed that she was referring to a deadline for adjusting the shareholding structure. Georgieva said the decision on a realignment deadline was up to members. The IMF is scheduled to complete a long-delayed review of quota resources by Dec. 15.
Persons: Kristalina Georgieva, Susana Vera, Georgieva, David Lawder, Jonathan Oatis Organizations: International Monetary Fund, IMF, World Bank, REUTERS, Rights, Monetary Fund, Reuters, Thomson Locations: Marrakech, Morocco, Rights MARRAKECH, U.S, China, United States, Ukraine, India, Brazil
The IMF’s projections for growth and inflation are “increasingly consistent with a ‘soft landing’ scenario… especially in the United States,” Gourinchas continued. The 20 countries using the euro are expected to grow collectively by 0.7% this year and 1.2% next year, a downgrade of 0.2 percentage points and 0.3 percentage points respectively from July. The IMF upgraded its growth forecasts for the US economy to 2.1% in 2023 and 1.5% in 2024 — an improvement of 0.3 percentage points and 0.5 percentage points respectively. “The strongest recovery among major economies has been in the United States,” the IMF said. The IMF revised its forecasts for global inflation to 6.9% this year and 5.8% next year — an increase of 0.1 percentage point and 0.6 percentage points respectively.
Persons: Pierre, Olivier Gourinchas, ” Gourinchas, Qilai Shen, Gourinchas Organizations: London CNN —, Monetary Fund, IMF, Bloomberg, Getty, Brent Locations: United States, China, Europe, Ukraine, Guangzhou, Israel, Saudi Arabia, Russia
[1/2] The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. Doing so, Ivory Coast President Alassane Ouattara said on Thursday, would "increase the voice and agency of member countries who are the most vulnerable" at the Fund. Martin Muhleisen, a former IMF strategy chief, said the plan "puts the Chinese on the spot to agree". A delay would be a major disappointment for the IMF after contentious 2019 negotiations left quota resources and shareholding untouched. "The Fund's not tight," said Mark Plant, a former IMF official now with the Center for Global Development.
Persons: Yuri Gripas, Joe Biden, Janet Yellen, Alassane Ouattara, Mark Sobel, Martin Muhleisen, Mark Plant, David Lawder, Andrea Shalal, Marcela Ayres, Peter Graff Organizations: Monetary Fund, REUTERS, Rights, International Monetary Fund, IMF, World Bank, Reuters, U.S . Congress, U.S, Treasury, U.S . Treasury, Brazilian, Center for Global Development, Thomson Locations: Washington , U.S, U.S, China, India, Brazil, Marrakech, Morocco, Ukraine, Saharan Africa, Coast, Washington, Beijing, Brasilia
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