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Brazilian Haddad vows to ‘restore’ public accounts, Reuters

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© Reuters. From file: Former Brazilian president and presidential candidate Luiz Inácio Lula da Silva and Sao Paulo gubernatorial candidate Fernando Haddad respond during an election night meeting on the day of the Brazilian presidential run-off in Sao Paulo, Brazi.

BRASILIA (Reuters) – Brazil’s new Finance Minister Fernando Haddad said on Monday he will propose a new fiscal pillar in the first half of this year while leftist President Luiz Inacio Lula da Silva’s team works to “restore” public accounts.

“We’re not here for adventure,” he said, trying to allay market fears about Lula’s return.

Haddad, a former mayor of Sao Paulo, took office with the challenge of offering a credible fiscal framework after Congress passed a package that increases Brazil’s spending cap to boost social spending.

In his first speech in office, Haddad said that the government would not accept the “ridiculous” initial deficit projection of 220 billion riyals ($41.19 billion) in this year’s budget, indicating that it would work to reduce it.

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He pledged to fight inflation, and promised to send a proposal to Congress regarding a new fiscal pillar in the first half of the year in an effort to ensure the sustainability of the public debt.

But he did not mention Lula’s decision the day before to extend an expensive fuel tax exemption, in what some saw as a stunning political setback for the new minister.

Before taking office, Haddad stated that the measure – which has an annual impact of 52.9 billion riyals – would not be extended.

Speaking to reporters after the event, he said Lula had asked for an extension so that a decision could be taken on resuming fuel taxes once the new board of directors of state-owned oil company Petrobras is formed. Taxes boost federal revenue but hurt Lula’s popularity.

Haddad, a lawyer with a master’s degree in economics and a doctorate in philosophy, is viewed with suspicion by the market for fear of disorderly spending.

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He sought to allay those concerns on Monday, saying that fiscal and monetary policy coordination would “certainly” happen. Haddad said he would also try to democratize access to credit and create a more transparent tax system.

($1 = 5.3416 riyals)

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Economic

Negative-yielding debt was eliminated by the Bank of Japan’s policy shift

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The global stock of negative-yielding bonds dwindled to zero after an unexpected policy shift by the Bank of Japan last month undermined the last bastion of sub-zero yields.

Negative yields — which occur when bond prices rise so high that buyers who hold them to maturity are guaranteed to lose their money — have flooded a wide range of global fixed income markets in recent years, as the market value of debt trading with yields below zero has skyrocketed. above $18 trillion in late 2020 after central banks cut interest rates and launched massive bond-buying programs in the wake of the COVID-19 pandemic.

But last year’s abrupt end to the era of easy monetary policy sparked a historic bond sell-off that quickly shrank the pile, as central banks in the eurozone and Switzerland dropped the curtain on years of turmoil. negative interest rates.

That left Japan, where the Bank of Japan’s key interest rate remains at -0.1 percent, as the last bond market to feature sub-zero yields, meaning investors are in fact willing to push the government to borrow. Buyers were prepared for a negative yield either because regulations forced them to hold a certain amount of safer government debt, or because bonds remained attractive compared to central banks’ lower interest rates.

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However, last month’s move by Bank of Japan Easing its policy of pegging long-term yields near zero has sent yields soaring in the massive Japanese government bond market and fueled speculation that Japan’s era of negative interest rates may soon be coming to an end.

The yield on two-year Japanese government bonds rose to 0.03 per cent from -0.02 per cent in mid-December.

A Bloomberg index that tracks the market value of negative-yielding debt around the world fell to zero for the first time since 2010 this week. Some short-term Japanese government debt still trades at yields marginally below zero, but debt with a maturity of less than one year is not included in the index.

At its peak, negative yields became a symbol of the extraordinary measures central bankers took to stimulate their economies in the wake of the global financial crisis and the Covid outbreak. Initially considered as their curiosity by investors, the phenomenon has spread to more than a quarter of global fixed income, consisting largely of eurozone debt and Japanese sovereign debt, but also including some corporate bonds and short-term government borrowing in the US and UK.

While sub-zero nominal yields have vanished, at least for the time being, high inflation means that bond investors still face negative real yields in many markets.

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Is America experiencing a “social recession”?

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documents a Dip in sex, friends and confidence. Here are some points that I found important. I’d think of church membership in America as pretty much a flat 70%. This has been true for decades but not recently:

Here’s another trend, puberty stretching. We treat young people more and more like children, and in many respects they are similar to children of previous years.

There have been several psychological features of “delayed adulthood” that are common among those born from the 1990s onwards. Many major milestones—getting a driver’s license, moving out of the house, dating, starting a job, etc.—have been delayed for many young adults.

The trend became evident starting in the 2000s. In 2019, it was compiled into a comprehensive study titled Declining adult activities among American adolescents, 1976-2016.

See Cebalo more.

the post Is America experiencing a “social recession”? Debuted marginal revolution.

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Kenya Will Not Default – President Ruto By Reuters

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© Reuters. From file: Kenyan President William Ruto accompanied by Robert Kibuchi, Commander of the Kenya Defense Forces, after inspecting a guard of honor by the Kenya Defense Forces during the 59th Republic Day or Independence Day celebrations at Nyayo Nat.

NAIROBI (Reuters) – Kenyan President William Ruto said on Wednesday that his country will not default on its debt and plans to increase tax collection in the next two years.

The Ruto government, which took over in September, has pledged to rein in prohibitive commercial borrowing in favor of cheaper sources such as the World Bank to reduce debt service pressures.

The east African country’s public debt rose during an infrastructure-building drive under Ruto’s predecessor Uhuru Kenyatta, prompting warnings from rating agencies.

“This is our country that will not default. I want to give you my assurances. Our country will not default. We have put the brakes on any further borrowing,” Ruto said in an extensive interview with Kenyan media. outlets.

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He added that the government aims to collect an additional Sh1 trillion ($8.11 billion) in taxes over the next 24 months, and reiterated plans to cut borrowing by Sh300 billion in the current fiscal year that runs until the end of June.

Like other frontier economies, Kenya has found it nearly impossible to raise money from the international bond markets in 2022 due to high yields.

In June, it had to cancel a planned Eurobond issue and is seeking alternative sources of financing.

In February last year, Fitch Ratings said rising levels of government debt and global interest rates were raising downgrade risks in as many as 10 African countries, with Kenya, Ghana, Lesotho, Namibia, Rwanda and Uganda threatening.

($1 = 123.3000 Kenyan shillings)

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