In this week’s recap, Marcello discusses the new ban imposed by China on Bitcoin transactions. The Financial Crisis that was on the verge of becoming a reality because of the Evergrande situation, seems to dissipate. Fearing the arrival of a leftist political movement to power in Germany, many millionaires started to move their fortunes out of the country.
On Wednesday, it was reported that the main unit of China’s biggest property developer Evergrande had negotiated a deal with bondholders to settle interest payments on a domestic bond, calming fears of an imminent default that could unleash global financial chaos. China’s central bank also injected 90 billion yuan ($14 billion) into the banking system, temporarily calming investor fears of imminent corporate debt contagion.
Yelp data now indicate that about 60% of all U.S. businesses that closed during the COVID-19 government-ordered shutdowns are now permanently closed. The data shows that business closures have continued to rise, with a 34% increase in permanent closures since a previous report in mid-July.
One of the dominant European consumer companies since 2015, global financial technology company Revolut, valued at $33 billion, will soon offer commission-free stock trading to U.S. customers for the first time. It will announce Tuesday that it has secured a U.S. broker-dealer license, allowing it to compete with Robinhood and Square in the rapidly expanding world of retail trading. It now has more than 16 million customers.
A possible swing to the left in Sunday’s German elections is scaring millionaires into moving their assets to Switzerland. If the center-left Social Democrats and far-left Greens come to power, a wealth tax is likely to be reintroduced and inheritance tax tightened. Data from the Bank for International Settlements show that deposits by German households and businesses in Swiss banks rose by nearly $5 billion to $37.5 billion in the first quarter of 2021 and are accelerating this year, which doesn’t even include stocks, bonds, or other financial products.
The U.S. federal government ended the second quarter owing $28.5B; U.S. households experienced another significant jump in net worth; Norway’s central bank is the first Western bank to raise interest rates.