Economics Newsletter – November 21, 2022

New UWES articles, a stock contest update, CPI data, and more!

Written By: Benjamin Pipicelli and Noel Tom Paul

Canada’s Economy at a Glance


Economics Society News, Events, and Articles 

– Check out our latest original article – Land of the Rising Sun: Casting a Light on Japan’s Attitudes Towards Immigration by Ayaka Behro!

– Econ study lounges have begun! Every Monday from 6-8pm in HH2034 Project Cube! Feel free to stop by!

– Thank you to everyone who stopped by our Prof Mixer on Friday! Stay tuned for more events coming soon!

– Check out how you’re doing in our stock contest in the updated rankings below.

News and Noteworthy

The fall of the FTX ‘King of Crypto’ Sam Bankman-Fried

It took less than eight days for the “King of Crypto” Sam Bankman-Fried to cause his cryptocurrency campy FTX to file for bankruptcy and for him to step down as chief executive. All the while he is facing federal investigations into how he handled the company’s finances. An article released on CoinDesk revealed that much of Mr. Bankman-Fried’s trading giant Alameda Research rests on a foundation largely made up of a coin that a sister company of FTX invented, not an independent asset. Ultimately causing a run within FTX holding eventually leading to their demise. Read more.

Taxing share buybacks unlikely to boost investment, experts say

In the previous week’s mid-year budget update, the liberal party committed to imposing a 2% tax on stock buybacks that would take effect in 2024 and projected to earn the government $2.1 billion in revenues over the next five years. The federal government’s proposed corporate share buyback tax might resonate politically, but economists are doubtful it will encourage companies to invest more into growing their existing operations. The policy takes aim at a common tactic used to reward shareholders where corporations will buy back their own shares to reduce the number of outstanding shares in the market, thereby increasing the value of existing stakes in the company. Read more.

Canada’s economy lost nearly $13B due to labour shortage, new report shows

Canada’s economy lost almost $13B over the last year due to the nationwide labour shortage in the manufacturing sector. Canadian Manufacturers and Exporters’ (CME) annual labour survey of 563 manufacturers across 17 industries across the nation found that almost two thirds have lost or turned down contracts and experience production delays due to a lack of workers. The loss of sales resulting from said shortages totalled $7.2B according to the organization. Additionally, 43% of companies have post poned or cancelled capital projects because of the shortages, resulting in another %5.4B in lost investment. Read more.

Slowing Global Economic Growth is Increasingly Evident, High-Frequency Data Show

Global economic growth prospects are confronting a unique mix of headwinds, including from Russia’s invasion of Ukraine, interest rate increases to contain inflation, and lingering pandemic effects such as China’s lockdowns and disruptions in supply chains. In turn, our latest World Economic Outlook, released last month, lowered our global growth forecast for next year to 2.7 percent, and we expect countries accounting for more than one third of global output to contract during part of this year or next. Moreover, as we discuss in our latest report prepared for the Group of Twenty, recent high-frequency indicators confirm that the outlook is gloomier. Read more.

The British people ‘just got a lot poorer’, says IFS thinktank

The British people “just got a lot poorer” after a series of “economic own goals” that have made a recovery much harder than it might have been, a leading thinktank has said. In his verdict on the chancellor’s autumn statement, Paul Johnson, the director of the Institute for Fiscal Studies (IFS), said the government was “reaping the costs of a long-term failure to grow the economy”, along with an ageing population and high levels of historic borrowing. Jeremy Hunt’s statement on Thursday revealed that the UK was already in a recession that is expected to last more than a year and knock 2% off economic output. Read more.

Economist Nouriel Roubini slams crypto ‘carnival barkers’ and Binance CEO as ‘a walking time bomb’ after FTX disaster

Outspoken economist Nouriel Roubini described crypto and some of its major players as an “ecosystem that is totally corrupt.” On a panel hosted by CNBC’s Dan Murphy at the Abu Dhabi Finance Week on Wednesday, the New York University professor said there were “seven Cs of crypto”: “Concealed, corrupt, crooks, criminals, con men, carnival barkers,” and finally, Binance Chief Executive Changpeng Zhao, known as CZ, who spoke on a prior panel at the same conference. “The lesson of the last few weeks is these people should be out of here,” Roubini added. Binance declined to comment when contacted by CNBC. Read more.


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