Economists Vijay Joshi and David Vines (VoxEU) warn rising US trade deficits and debt require reversal to avoid crisis. They argue fiscal consolidation is essential, and note tariffs or a weaker dollar could help adjust external imbalances — but policy mix matters for sustainability. #USD #FiatNews

Aswath Damodaran of NYU told CNBC that markets ultimately decide appropriate valuations and that interest rates are less important in that judgment. Over the past decade, debates about high US equity valuations have repeatedly given way to new market highs, he noted, arguing market prices reflect where valuations should sit. #markets #FiatNews

French bank BPCE has launched what it calls the first bond aimed at financing European defence spending, offering at least €500m under a new Euronext “European defence bond” framework. The issue mirrors green-bond formats in that proceeds are ring‑fenced, but will be allocated to military suppliers rather than environmental projects. #BPCE #Euronext #bonds #defense The move underscores a post‑2022 shift in capital markets as defence firms attract strong investor interest amid record government orders. Initial pricing indications for the five‑year bond were around 105–110 basis points over midswaps, according to Bloomberg. “The commitment on use of proceeds reflects the enormous task that Europe faces,” said Maureen Schuller, head of financial‑sector strategy at ING Groep. "I think we will see more such issuances in future, with banks supporting financing of European defence ambitions." BPCE has already ramped up its defence financing—reportedly by 2.5 times—and increased export financing for French defence products more than sevenfold. The offering comes amid French political uncertainty and wider bank spreads after Prime Minister François Bayrou signalled a confidence vote, which has pushed up the country’s borrowing costs relative to peers. BPCE does not label the issue as a sustainable bond under ICMA guidance; instead it uses Euronext’s label. The bank says it will publish an annual, auditor‑verified allocation report similar to green‑bond practice. "That means BPCE has a clear path to funding defence without criticism. If you bought the bond, you need not worry about its use of proceeds," said Luke Hickmore, a fixed‑income portfolio manager at Aberdeen. Source: Bloomberg. #FiatNews

A high-profile April 2024 study in Nature that claimed global GDP was already irreversibly set to shrink by 19% by mid-century has been substantially undermined after researchers found critical data and methodological flaws tied to Uzbekistan. The original paper, by Maximilian Kotz, Anders Levermann and Leonie Wenz, used subnational data from about 1,600 regions and reported damages equating to roughly $38 trillion annually by 2049, saying those losses far exceeded the costs of meeting the Paris targets. External reviewers flagged problems: a team led by Solomon Hsiang showed the global result collapsed when data from 14 Uzbek provinces were removed—those records contained implausible year-to-year jumps in the 1990s and a 90% drop around 2000, which distorted the model and could reduce the estimated mid-century loss to about 6%. Statistician Christof Schötz also argued the study treated economically linked regions as independent units, overstating statistical confidence. The authors acknowledged the errors, published a corrected version that fixed the Uzbek data and adjusted the model for spatial dependence, and widened the uncertainty range. The revised estimate fell only slightly to 17% GDP loss by mid-century, but the confidence interval expanded from 11–29% to 6–31%. "The important thing is that the main conclusions of the paper hold," co‑author Leonie Wenz told The Washington Post. Nature may still accept or withdraw the paper. The episode highlights broader debates about methods for valuing climate damages: traditional models used by institutions such as the IMF or OECD give a wide range (up to ~18% by 2100 for some scenarios), while the U.S. CBO finds a low central estimate (~4%) but non‑negligible tail risks. The case is also a cautionary lesson about the fragility of 'big data' analyses and the limits of peer review when data errors or unaccounted dependencies remain hidden. #ClimateChange #GDP #Nature #Uzbekistan #FiatNews

He warned that if stocks rally on expectations of rate cuts but long-term yields do not fall, equities may have to give back some gains. On Fed communication, Damodaran noted that Jay Powell’s recent speech may have been taken positively simply because it contained no bad news, allowing markets to project their desired outcome; markets now appear to believe the Fed is under strong pressure to cut, a position he said is not favorable for the central bank. Leading economic indicators signaled recession risk in July. #Fed #inflation #bonds #stocks #FiatNews

Damodaran said U.S. central bank policy rates are of limited direct relevance to equity values; longer-term government bond yields matter more and can “live their own life,” so the Fed does not necessarily control them. He highlighted the 10‑year yield as key, suggesting that if inflation remains noticeably above 2% the 10‑year will likely stay above 4% and he doubts a cut would push it below that level. #FiatNews

Aswath Damodaran of NYU told CNBC that markets “know best” where valuations should be, arguing that repeated warnings about high U.S. equity valuations over the past decade have not prevented markets from reaching new highs. He sees this year in two phases: a sharp correction in the largest tech names (the “Mag 7”) through early April, followed by a strong rebound that, in his view, reflected markets pricing in a scenario “where everything will be fine.” #FiatNews

The EU proposal known as "Chat Control" has resurfaced under the Danish EU presidency, which formally reintroduced the text on 1 July after earlier attempts in 2022–2024. The measure—aimed at broadening state access to private digital communications—has drawn growing public attention and coordinated opposition, with platforms such as fightchatcontrol.eu mobilizing critics and several Czech media outlets and public broadcasters reporting in depth. The Czech Republic has signalled it will oppose the plan. Key practical obstacles include the likely need to rely on major U.S. technology firms—Meta, Google, Apple—to implement monitoring tools, a step that could provoke a transatlantic political clash given the current alignment between American administrations and big tech. The UK recently stepped back from a similar push to force backdoors into Apple devices, underscoring implementation challenges. Legal and constitutional resistance is expected across member states. Opponents say widespread national constitutional complaints could spark a clash over whether EU law or national constitutions prevail on protections for confidential communications, turning the issue into a contentious cross‑Europe political and judicial battle. #ChatControl #EU #Denmark #Germany #BigTech #FiatNews

Economists Vijay Joshi and David Vines argue on VoxEU that the dollar’s role as the dominant global currency could persist even if it weakened substantially—provided policy adjustments accompany the shift. They say reversing rising US public and external debt requires fiscal consolidation in the United States, potentially accompanied by tariffs or, preferably, a weaker dollar to correct trade imbalances. They estimate a meaningful dollar depreciation would need to be on the order of about 30% to materially reduce the US trade deficit. #USD #trade #FiatNews

The United States has ended the long-standing “de minimis” customs exemption for small parcels, removing duty-free treatment that for nearly a decade had applied to imports valued up to $800. The change — with the exemption for China and Hong Kong eliminated in May under measures launched by President Donald Trump — means small packages entering the U.S. are now subject to duties, customs forms and new collection processes. Customs officials say more than $492 million in duties has been collected from affected parcels since May. The $800 threshold had allowed nearly 1.4 billion duty-free small parcels into the U.S. last year — a roughly 600% increase over the prior decade — with at least three quarters estimated to originate from China and large e-commerce platforms such as Shein and Temu playing a major role. Before the policy change, the U.S. averaged about four million duty-free parcels per day; that figure has fallen to roughly one million per day since May. More than twenty national postal operators have paused shipments to the U.S., citing unclear CBP guidance. Businesses and carriers are reacting unevenly. Some U.S. merchants welcome the shift: Jim Tuchler of GiftsForYouNow.com said his sales have recovered since the Chinese exemption was removed — "Despite price rises the volume and number of orders have increased compared with last year." Carriers including UPS and FedEx have reported lower volumes on U.S.–China routes; DHL Express Europe CEO Mike Parra said carriers will adapt, adding fees for customs handling and duties where required. The move also aligns the U.S. with stricter de minimis levels in the EU (€150) and the U.K. (£135), and introduces alternative postal fees of $80–$200 per item under a six‑month reciprocal tariff mechanism. #FiatNews