The Opening Belle - Is It Mania? Is It A Bubble?

Biden ‘Open to Negotiate’ on Stimulus, Seeks GOP Backing

President Joe Biden said he’s open to reshaping his $1.9 trillion Covid-19 relief proposal as the administration seeks a bipartisan deal, though didn’t rule out pursuing a Democrat-only route for passage.

“I’m open to negotiate,” Biden said at a news conference on Monday. Still, he said “time is of the essence and I must tell you I’m reluctant to cherry pick and take out one or two items here.”

The process is just beginning, he said a day after White House officials held a call on the stimulus proposal with 16 senators from each side of the aisle, along with leaders of a group of House centrists. Republicans have rejected the price tag as too big, too soon after last month’s $900 billion bill. Even some Democrats have joined in questions on the basis for the proposed size.

“I don’t expect we’ll know whether we have an agreement or to what extent the entire package will be able to pass or not pass until we get right down to the very end of this process -- which will be probably in a couple weeks,” Biden said.

Senate Majority Leader Chuck Schumer said earlier Monday he aims to secure passage of the next round of Covid-19 relief by mid-March, just when jobless benefits from the last package will be running out.

Citing premia over rock-bottom bond yields, Citi believes equity markets have a long way to go yet.

“Equity bubbles are not delicate,” Buckland added.

“They don’t burst on the first hint of tightening from central banks. They are run-away trains that misallocate capital, reshape the investment industry and end careers. They take some stopping.”

A chill swept through Chinese financial markets today after the central bank withdrew cash from the banking system and an official warned about asset bubbles.

The People’s Bank of China drained about $12 billion via open-market operations on Tuesday. The decision was unusual in the weeks before the Lunar New Year holiday, which in 2021 falls in mid-February, because residents typically need more cash to pay for seasonal travel and gifts. It also went against recent reports in Chinese newspapers that liquidity wouldn’t be tightened before the holidays.

While Tuesday’s withdrawal was small in isolation, it added to signs that Beijing is growing wary of how cheap and plentiful liquidity has stoked excess in markets.

Britain's Covid vaccine supply is in jeopardy after the EU threatened to block exports of the Belgian-made Pfizer jabs amid a row with UK-based AstraZeneca.

Brussels decided to impose tighter controls on exports after reacting with fury to the news that AstraZeneca will deliver 50 million fewer doses to the EU than it had expected.

Ministers now fear deliveries of the Pfizer jabs will – at best – be delayed by extra paperwork and that the EU could try to stop doses being sent to non-EU countries after saying it will "take any action required to protect its citizens".

In March, the bloc imposed export restrictions on personal protective equipment after it struggled with supply to its member states.

On Monday night, MPs accused the EU of acting out of "spite" and trying to deflect blame for its own mistakes in getting vaccination programmes off the ground.

“I don’t buy for one second that the vitality of American manufacturing is a thing of the past,” Biden told reporters before signing the order. “American manufacturing was the arsenal of democracy in World War Two and it must be part of the engine of American prosperity now.”

Biden reiterated plans announced on the campaign trail to replace the fleet of federal cars with U.S.-made electric vehicles.

Revitalizing the manufacturing sector, which accounts for about 12% of the U.S. economy, is a key part of Biden’s broader push to drive up wages, create more union jobs, support minority-owned businesses and strengthen U.S. supply chains, White House officials say.

“The more you sell, the more you lose money, what’s the point?,”

With annual revenue of around $5 million, Feng’s firm is one of the million or so small and medium-sized manufacturers and trading businesses that form the backbone of China’s exports. But while orders have flooded in as the Chinese economy recovered quickly from the effects of the virus, Feng and others are reeling from a jump in the yuan, rocketing shipping costs and labor shortages, which have slashed their already wafer-thin margins.

“Factories were elbowing each other out for skilled workers,” said Feng, adding that wages for aluminum welders increased nearly threefold.

“It’s hard to be a manager nowadays. We are at the workers’ mercy.”

But the real killer is the currency. China’s yuan, also called the renminbi, has gained more than 10% against the dollar since June, and now stands around 6.48. That has eaten into profits as the vast majority of exporters take payment in the greenback, but pay suppliers and staff in yuan. With a gap of up to three months between billing and payment, during which the value of the dollar declined, many exporters saw their profit vanish.

“I’m very worried,” said Feng, who is now selling some products at a loss and plans to raise prices this year.

“I’m happy for my country to have a strong economy, but a strong renminbi is disaster for exporters.”

Up to 25,000 jobs and more than 500 stores are at risk after Boohoo agreed to buy the online business of Debenhams and Asos entered exclusive talks to buy the Topshop brand.

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