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Wednesday, January 20, 2021
DESPITE A RECENT bout of weakness, the dollar still looks strong. Consider the Big Mac index, our lighthearted measure of currency valuation. Of the currencies of the 20 trading partners studied by America’s Treasury, our measure suggests that all have gained relative to the greenback since July, but that all apart from the Swiss franc are still cheap. That gives the incoming Biden administration, which has promised to take “aggressive trade-enforcement actions” against currency manipulators, lots to chew on. Our burger-based index is based on the idea that prices should adjust over the long run, so that the same basket of tradable goods costs the same everywhere. Converting prices into dollars at prevailing exchange rates lets you judge whether a currency is too cheap or too dear. To avoid the problem that people buy different things in different places, we compare the price of just one good: the McDonald’s Big Mac. The burgers are not exactly the same across countries—India’s Maharaja Mac, for instance, does not contain beef—but they are consistent enough. A burger in Thailand costs 25% less than in America when its price is converted to dollars at prevailing exchange rates, for example, suggesting that the Thai baht
AdvertisementContinue reading the main storySupported byContinue reading the main storyEzra F. Vogel, Eminent Scholar of China and Japan, Dies at 90A longtime scholar at Harvard, Professor Vogel wrote books that helped shape how the world viewed the two ascendant economic powers.Ezra Vogel’s writings over six decades established him as a giant in the study of China and Japan and earned him wide-ranging influence.Credit...Ben RosserDec. 22, 2020, 7:49 p.m. ETEzra F. Vogel, an eminent scholar of East Asia at Harvard University whose writings about modern politics and society in China and Japan helped shape how the world understood the rise of those two Asian powers, died on Sunday in Cambridge, Mass. He was 90.The death, in a hospital, was confirmed by his son Steven, who
FROM A SMALL office in Montreal an artificial-intelligence business, Aquantix, plays sleuth for faraway investors worried about water risk. Its model combines high-resolution satellite imagery, weather-station data and regulatory documents scraped from the internet. It estimates not only how much water a business uses at its various sites but its water bill, the chances of drought or flooding in surrounding areas and the financial impact such disasters could have—all without contacting the company in question. Firms like Aquantix are proving useful to investors waking up to water risk. At current rates of consumption, the demand for water worldwide will be 40% greater than its supply by 2030, according to the UN. Portfolio managers are realising that physical, reputational and regulatory water risk could hurt their investments, particularly in thirsty industries such as food, mining, textiles and utilities. One worry is that shocks to supply could drown or dry out a company’s assets. In recent years Coca-Cola has been forced to close plants in India because of drought. In 2019 floods in America’s Midwest caused disruptions at the facilities of two food giants, Cargill and Tyson Foods. A survey by CDP, a non-profit firm, found
#masthead-section-label, #masthead-bar-one { display: none }The Coronavirus OutbreakliveLatest UpdatesMaps and CasesA Future With CoronavirusVaccine InformationF.A.Q.TimelineSavannah Benavidez created an OnlyFans account after losing her job as a medical biller. Credit...Adria Malcolm for The New York TimesSkip to contentSkip to site indexJobless, Selling Nudes Online and Still StrugglingOnlyFans, a social media platform that allows people to sell explicit photos of themselves, has boomed during the pandemic. But competition on the site means many won’t earn much.Savannah Benavidez created an OnlyFans account after losing her job as a medical biller. Credit...Adria Malcolm for The New York TimesSupported byContinue reading the main storyJan. 13, 2021, 5:00 a.m. ETSavannah Benavidez stopped working at her job as a medical biller in June
THERE ARE both petty and respectable explanations for China’s assault on Ant Group. The fintech giant was less than 48 hours away from the world’s biggest initial public offering when regulators halted it in November—the first in a series of moves aimed at taming the fast-growing firm. The petty is that Jack Ma, Ant’s outspoken founder, had offended Chinese leaders with a blunt speech. The respectable is that the government needed to act because Ant threatened financial stability. As a state newspaper recently put it, Ant had become “too big to fail”, presenting itself as a tech firm but pumping out loans. The petty explanation, to the extent that it is right, can be dismissed as a China-specific problem, a reflection of the Communist Party’s tightening grip on tycoons. But the respectable explanation deserves a hearing, not least because of its global resonance. As Apple, Facebook and Google get into payments and more, the question of how to regulate Big Tech on its forays into finance will become all the more prominent. The main charge against Ant is that it offers what can be described as consumer subprime with tech characteristics. Its model is to identify small borrowers—both individuals and
LIKE MANY Chinese companies on the stockmarket, Gangtai Holding, a jewellery-to-property conglomerate, flaunts its listing. It displays its ticker number, 600687, prominently on its website and in its ads. But not for much longer. On January 7th Gangtai began a 30-day period almost certain to end with its ejection from the Shanghai Stock Exchange. It is one of a growing number of Chinese companies to face delisting at home. In recent months all the delisting talk has been about the removal—or not—of Chinese companies from American exchanges (see article). Within China, though, a potentially more important kind of delisting is on the agenda: regulators have made it easier to strip lousy firms of their listing status. It is the latest in an array of reforms aimed at modernising the stockmarket, long seen more as a casino than an efficient allocator of capital. Delistings are a staple of healthy stock exchanges, a mechanism for clearing out the dross. In America a few dozen companies are typically forced off its exchanges every year, often because of low market values. In the early 2000s, after the dotcom bust, annual delistings climbed to nearly 400. China, by contrast,
AdvertisementContinue reading the main storySupported byContinue reading the main storyH. Jack Geiger, Doctor Who Fought Social Ills, Dies at 95He used medicine to take on poverty, racism and the threat of nuclear destruction. Two groups he helped start won Nobel Peace Prizes.Dr. H. Jack Geiger in 2012. He believed doctors should use their expertise and moral authority to improve conditions like poverty, hunger, discrimination, joblessness and lack of education.Credit...Angel Franco/The New York TimesDec. 28, 2020, 3:17 p.m. ETDr. H. Jack Geiger, who ran away to Harlem as a teenager and emerged a lifelong civil rights activist, helping to bring medical care and services to impoverished regions and to start two antiwar doctors groups that shared in Nobel Peace Prizes, died on Monday at his
Loose policy staved off financial panic, but the effects will be felt for years
The coronavirus has disfigured Gallup, a small New Mexico town near Native American reservations, that is now one of the hardest hit places in the country.The virus’s spread upended the local economy, which over the years built up around tourism and the railroad and heavy industry.Shop owners, residents and aid workers are now trying to figure out how to make it through.The Place Hit Hardest by the VirusDec. 27, 2020Hospitals in Gallup are nearly full. Most stores are empty. The unemployment rate in the county where the city sits is one and a half times the national average. Earlier this month, it had the most cases per capita of any metro area in the United States, according to a New York Times database.As the pandemic has steadily marched across the country in recent months, places like Gallup have been among the hardest hit.The Lions Club rodeo has been held every June in Red Rock Park. It was canceled this year.Perched between the Navajo Nation to the north and Zuni Nation to the south, almost half of Gallup’s residents are Native American, according to census data.Native American communities have been particularly vulnerable to the virus,
BILLY CONNOLLY, the great Scottish comedian who recently retired from performing, had a joke about two men filming a lion for a wildlife documentary. The lion suddenly looks up. The men fear they have been spotted. One of them slowly removes his boots and puts on a pair of running shoes. “You will never outrun a lion in those,” says his colleague. “I don’t need to outrun the lion,” replies the first man as he slowly ties his shoelaces. “I just need to outrun you.” The joke rather neatly captures a particular approach to investing. What matters is not so much whether you can get ahead of some absolute goal for returns. The important thing is whether the asset you choose to invest in will comfortably beat the alternatives. Share prices in America are at all-time highs. The cyclically adjusted price-earnings (CAPE) ratio, a measure of value popularised by Robert Shiller of Yale University, has only twice been higher than it is now—in the late 1920s and the early 2000s. Yet a recent study by Mr Shiller, Laurence Black and Farouk Jivraj suggests that today’s steep stock prices may still be warranted, because interest
On average last year almost 30m equity options changed hands each day
TWELVE YEARS ago, on January 3rd 2009, a headline on the front page of the Times read: “Chancellor on brink of second bail-out for banks”—a reference to the British government’s efforts to save the country’s financial system from collapse. When Satoshi Nakamoto, the mysterious inventor of bitcoin, created the first 50 coins, now called the “genesis block”, he permanently embedded the date and that headline into the data. The hidden text was a digital battle cry. Mr Nakamoto had decided it was time for something new: a decentralised cryptocurrency, free from the control of governments and central banks. Mr Nakamoto has vanished from public view, but his invention has gained prominence—and lately has been soaring in value, too. It first gained widespread attention in 2013 as a financial curiosity, when its price climbed above a then giddy-looking $1,000. In 2017, in a frenzy of speculation, the price spiked just shy of $20,000, but then quickly plummeted. As recently as October 2020 it was worth only $10,600. But then it began to climb again, passing its old peak on December 17th and ascending to a new high, above $36,000, on January 6th (see chart). Over the years bitcoin