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To start off, we’re looking into:
What is a recession, really?
The recession calls are loud, with financial firms going up and down Wall Street saying it will hit most major economies soon and that we should all brace ourselves. But, some of you have asked, what is a recession, really, and what is a bear market?
- A recession is a declining economic performance for several months, typically two consecutive quarters, which is measured by the country’s total GDP. This is the value of an economy’s total finished goods and services produced during a period of time.
- But the reason why everyone seems so confused about whether we’re currently in a recession or not is that it depends on who you ask, really.
- Most consumers think we’re in one at the moment. CEOs are preparing for one by issuing hiring freezes and cutting costs. But whether the US is officially in a recession depends on a small group of economists at a non-partisan think tank called the National Bureau of Economic Research (NBER).
- Now, the reason why everyone is leaping to a conclusion before the head honcho, NBER, has spoken is because it often doesn’t call a recession until two years after it’s started, said Laura Veldkamp, a finance professor at Columbia University and a research fellow for the NBER. This group of economists operates at a different pace from the rest of us because “their goal is not to be fast, but to be sure they are right,” Veldkamp explained.
- New economic data, which was published on Wednesday, showed US job openings had fallen less than expected, which undermined the calls that a recession is necessarily here or on its way.
- When people talk about a bear market right now, they’re probably referring to the decline in an overall market or index, like the Nasdaq. But they could also be referencing individual stocks or commodities. Regardless of what it is, a bear market is considered to be when declines of 20% or more have been seen for typically two months or longer. Bear markets can partner with a recession, but they’re not the same thing.
Sequoia Capital China gears up
In recent months, the Chinese government has shifted its tone when it comes to its regulatory campaigns, especially in the tech industry. While nothing is confirmed yet, there were reports that Chinese authorities were making moves to revive Ant Group’s IPO, which China denied.
Now, the news website The Information has reported that an anonymous source familiar with the talks said that Sequoia Capital China has raised nearly US$9 billion for four new funds to primarily invest in Chinese startups at different stages of their life cycle, focusing on tech, healthcare and consumer areas. This gives investors hope that the worst of the regulatory crackdown is over. Sequoia Capital China hasn’t commented.
Biden calls family of WNBA star detained in Russia
As tensions were escalating between Russia and Ukraine in February, a WNBA basketball player named Brittney Griner was arrested in a Russian airport for charges of carrying vape cartridges containing hash oil – something illegal there. But the US State Department, which has been trying to get her freed from jail in Russia, said that the detention of Griner was wrongful, meaning they believe her arrest to be politically motivated rather than based on law.
So far, President Biden has remained uninvolved. That is, until now. On Wednesday, Biden and Vice President Kamala Harris called Griner’s wife to say that they were increasing pressure to free the player. The call came only a couple of days after a handwritten letter from Griner pleading for help made its way to the White House.
To end, we’ll look into:
Poll shows that Arabs are moving toward authoritarianism amid economic turmoil
A recent poll shows that Arabs in the Middle East and North Africa are losing faith in democracy and are leaning more toward authoritarian kinds of government.
The poll, done for the BBC and conducted by the Arab Barometer network, showed that across nine different Arab countries and the Palestinian territories, more than half of people say they either agree or strongly agree that they’re more concerned with how effective the government is with its policies than about the type of government they have. In all the countries surveyed, there was a rise in people who agree that the economy is weak under democracy. And most people said they prefer strong leaders “who can bend the rules” to be more effective.
This report comes just over a decade after the Arab Spring, which was a series of protests that had people in Arab countries fighting for moves toward democracy. Most of those countries didn’t remain democracies, though, and the last one – Tunisia – could be on its way back towards authoritarianism if a recent draft constitution is approved.
“There’s a growing realization that democracy is not a perfect form of government, and it won’t fix everything,” said Michael Robbins, the director of Arab Barometer.
These countries are also places where the economic outlook isn’t great. Fewer than half of the respondents were willing to say the economic situation in their country was good.
“What we see across the region is people going hungry, people need bread, people are frustrated with the systems that they have,” said Robbins.
In other news …
📈Stocks, oil and Bitcoin: Meeting minutes from the US central bank were revealed on Wednesday and showed Fed officials rallying a large rate hike in June at the meeting that led to rate hikes of 0.75%. Fed members also said that the meeting later this month would probably see another 50 or 75 basis point hike. All three major US indexes were up, and the MSCI gauge of global stocks was up 0.14%.
🛢Oil prices continued their slide with ongoing worries of a recession, decreasing 2% to a 12-week low and struggling to stay above US$100.
👛Bitcoin is at US$20,530.
⚖July 4 shooter charged: Robert Crimo III, the man accused of the shooting in Highland Park, IL, on July 4, has been charged with seven counts of first-degree murder so far, which would carry a mandatory life in prison sentence without parole, said the Lake County State Attorney. Crimo confessed to the shooting and had been considering a second attack in Wisconsin.
💸IMF head recession calls: The head of the IMF said that she couldn’t rule out the possibility of a global recession, adding: "It’s going to be a tough ’22, but maybe even a tougher 2023. Recession risks increased in 2023."
💉Beijing’s COVID mandate: Beijing has put in place a vaccine mandate, requiring residents who want to go to many public places, including gyms, to show proof of vaccination. This is the first time China has put in place a mandate.
😷Hong Kong COVID: Hong Kong’s new leader John Lee hasn’t made any changes to COVID policies since entering office, but at a press briefing, he said, “Regarding anti-epidemic strategies, I do not agree with lying flat, allowing infection numbers to increase arbitrarily…"
🔐Apple’s Lockdown Mode: Apple introduced a feature called Lockdown Mode, which is mainly for high-profile people, like politicians, who are more likely to be targets of state hacking attempts.
📺“Stanger Things" success: Netflix’s “Stranger Things" just topped a billion hours viewed on Netflix, something that has only also been achieved by “Squid Game." Now, as a part of the Netflix deal, the show’s creators, brothers Matt and Ross Duffer, will create a new production company called Upside Down Pictures that will include a “Stranger Things" spin-off.