Wednesday 29, June 2022

Covid

So many people have Covid. Everyone is coughing. Supposedly, this is the BA.5 variant. I just know that a lot of people I personally know have got tested positive. This thing is not going out without kicking and screaming. I am not sure govt. policy could have made much difference, but I can now see why the authorities were very afraid.

Wrap

Mainly, oil slumped back today. Most commodities were knocked back. Equities were weak, and yields were down. We had a weak risk-off day.

Jim Chanos has decided to short data centre REITs. $DLR (Digital realty) and $EQIX (Equinix) have foreward P/E’s in the 70s. Given we’re in a bear market, you can understand Chanos’s logic.

Inflation is hitting hard at Eurozone economies. It’s really hard to see how the ECB can control inflation and at the same time keep Italian and Greek spreads from blowing up. The market seems to have decided that M Lagarde is an idiot, and the consequences for the Euro (vs USD) are likely to be grim. Of course, currencies are incredibly unpredictable, and there are many other moving parts.

The Japanese Yen had another bad day. The JPY is now over 136 to to the USD, and going lower (i.e. the exchange rate is getting numerically higher).

Twitter

“If you want to create a shortage of tomatoes, for example, just pass a law that retailers can’t sell tomatoes for more than two cents per pound. Instantly you’ll have a tomato shortage. It’s the same with oil or gas.” - Milton Friedman cc: G-7

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Mi è presa n’attimo la fissa per Charlotte Perriand. Tavolo+libreria. Tranquilli passa subito. Sedia di Pierre Jeanneret || Lampada da scrivania di Wyeth

Thought of the day

Some state in the US is going to hand out dollars direct to residents to offset inflation. Mick Lynch, the RMT union leader is everywhere talking about how his members are striking because they have become more productive, but have not shared in the gains. The Welsh govt. is about to experiment with some form of UBI. It’s just for young people exiting the care system, but it’s a watershed of sorts. The MMT community is deeply divided over UBI, but we give a sort of UBI to pensioners, so why not give it to care leavers? I am not an expert on MMT, but my understanding is that most prefer a job guarantee, where unemployment is eliminated by paying people to do socially useful work. I have a low opinion of the Welsh Assembly, but if this works well, it will strongly increase the chances of it being adopted throughout the UK. We need some original policy ideas, even fringe ones.