Recession, a semantic issue?
Language is the most refined human tool for grasping reality. By defining something, be it a material or intellectual object, we not only give it an entity of its own, but also delimit its boundaries, outline the space it occupies and separate what it is from what it is not.
This is clearly evidenced in the film Kynódontas by Greek director Yorgos Lanthimos. It tells the story of a dysfunctional family in which the parents keep their children cut off from reality. Not only do they keep them locked up at home for life, but they also change the meaning of words: they are told that a "zombie" is "a small yellow flower", "the sea" is an armchair and cats are lethal creatures. This film teaches us, just as Orwell portrayed in its novel “1984”, that he who controls language, controls minds and realities, and potentially controls the masses
This week the Federal Reserve (Fed) is rehearsing an attempt to control reality through concepts. Although the conventionally accepted definition of recession almost certainly indicates that the U.S. is headed for this scenario, the Fed is seeking to escape this reality by resorting to more "holistic" definitions, rather than something as obvious as two consecutive quarters of declining economic growth.
Aside from the semantic gymnastics, last week the Fed raised interest rates again, this time by 75 basis points, bringing the Fed Funds rate to 2.5%. While this move seeks to control inflation, there are probabilities that this will contribute to the economic slowdown, leading to a recession, at least under the previous definition.
In Europe, the likelihood of a recession has also increased, according to JP Morgan and Goldman Sachs, contributing to a global outlook of very slow economic growth, despite the waves of liquidity that have flooded the market in recent years. But maybe the Fed is right and recession is, after all, just a semantic issue.
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U.S. avoids recession by redefining the concept
The Council of Economic Advisors, an agency attached to the Office of the President of the United States, issued a redefinition of the concept of recession that would no longer imply two consecutive quarters of declining real growth. According to the Advisors, the economists' determinations include a more "holistic" look at data than is reflected in the current definition of recession.
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Federal Reserve raises interest rates by 75 basis points
Interest rates in the U.S. reached 2.5% after the Federal Reserve pushed through a 75 basis point increase. The increase was highly expected by the market, so the price consequences on certain Digital Assets were rather favorable.
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European banking authority doesn’t find trained staff to supervise Digital Assets
The Chairman of the European Banking Authority, José Manuel Campa, admits the concern that the regulator is not getting enough staff with sufficient expertise in Digital Assets to supervise the sector adequately, once the MiCA regulation comes into force in 2025.
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U.S. Federal Reserve could supervise stablecoins
According to a new legislative proposal being discussed in the U.S. House of Representatives, the Federal Reserve could become the supervisory authority for Digital Assets anchored to the price of the U.S. dollar, known as stablecoins.
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Eurozone to enter recession in the second half of 2022, say Goldman Sachs and JP Morgan
Analysts from banking giants JP Morgan and Goldman Sachs agreed in their most recent analyses on the economic future of the Eurozone, predicting a high probability of entering recession in the second half of 2022. Shortage of energy reserves and slowdown in demand are among the causes.
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IMF insists that the fall of Digital Assets does not affect financial stability
The International Monetary Fund published a new report in which it assures that the Russian invasion of Ukraine and the consequences of Covid19 threaten global financial stability more strongly than the collapse of the Digital Assets market.
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Proposed bill would exempt certain Digital Asset transactions from taxation
U.S. Senators Pat Toomey and Kyrsten Sinema introduced the Virtual Currencies Tax Fairness Bill last week. If passed, transactions with amounts less than US$ 50 would be exempted from paying capital gains taxes.
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Santander to offer products with Digital Assets in Brazil
The Brazilian arm of the Spanish bank Santander will provide services with Digital Assets in Brazil, according to Mario Leao, CEO of Santander Brazil. According to Leao, the initiative arises from customer demand.
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Schwab Asset Management launches ETF linked to Digital Assets companies
The asset management arm of Charles Schwab Corporation announced the launch of the Schwab Crypto Thematic ETF on the New York Stock Exchange (NYSE). The exchange-traded fund will provide investors with exposure to companies linked to the Digital Assets Ecosystem beginning August 4th.
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CFTC Lab to Put the Spotlight on Digital Assets
The Commodity Futures Trading Commission (CFTC) created a new Office of Technology Innovation, which will focus on providing more specialized training for its employees in Digital Assets.
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IDB, BBVA, BME issue blockchain-based bond in Spain's regulated market
Banks BBVA, Inter-American Development Bank (IDB) and financial operator BME, issued a blockchain-based bond, which was listed on a regulated market in Spain. The bond will run on a blockchain with smart contracts that will optimize the life cycle of the bond, according to the banks.
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Brazil's largest broker launches Digital Assets platform
Brazil's XP broker, which manages a portfolio of 3.6M clients, announced the launch of its platform for buying and selling bitcoin (BTC) and Ethereum’s ether (ETH), which will be available starting this August.
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Solidus Capital is the leading firm in Digital Assets, which provides exclusive, agnostic, and institutional services such as Liquidity, Custody Solutions, Wealth (Private Accounts and Portfolio Management), Multi-Strategy Funds, Private Placements, and other sophisticated products in conjunction with bespoke accompaniment to High Net Worth Individuals, Family Offices, Companies, Wealth Managers and Banks.
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By relying on Solidus' services, investors avoid the classic fatal mistakes:
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- Lacking information in the context and moments of the market
- Executing operations inefficiently
- Using unreliable service providers and infrastructure
- Closing of accounts and freezing of funds
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