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Fastest growth in nearly 40 years
The US economy accelerated in the fourth quarter of 2021, and the country ended the year with growth of 5,7%, the highest since 1984.
From October to December, the US GDP recorded an increase of 6,9% compared to the same period of the previous year. The result came above the median of market projections, which was 5,5%.
What explains:
- Inventory formation: that was what drove the rise in the quarter, with companies increasing investment in inventories in response to the shortage crisis that emerged during the pandemic.
- Consumer spending: the main component of the GDP by the demand had a jump in October, before the Omicron variant arrived in the country. But inflation, which ended 2021 as the highest in 39 years, got in the way.
- Omicron: The impacts of the new coronavirus strain on the economy were most noticeable in December, reducing consumer spending and shutting down factories.
E 2022? Economists see slower growth this year, with interest rate hikes signaled by the Fed contributing to a slowdown in the economy. The scarcity of inputs should continue to be a factor of concern.
The IMF projects a rise of 2,6% to US GDP in 2022.
Banks vs fintechs should continue in 2022
The dispute between the big banks and fintechs has everything to stay very heated in 2022.
Understand:
- On the one hand, banks complain that some fintechs have “gained a lot”, with similar size, activity and risk to banks, and take advantage of less strict rules.
- On the other hand, neobanks claim that banks have different risks than payment institutions, and therefore deserve special regulation.
In the middle of the fight: the BC (Central Bank) proposed two public consultations on regulation in the universe of payment institutions.
- One is to increase the capital requirements for large digital banks, so that they move towards the levels practiced for financial institutions.
- Another deals with one of the main sources of revenue for fintechs: the interchange fee charged to merchants for transactions with prepaid cards. The proposal is that it be capped at 0.5% per transaction – there is currently no rule.
foot on the brake: The Reuters agency reported last month that the BC even signaled a tightening of rules for fintechs, but backtracked after hearing warnings that the wrong dose of regulatory tightening could jeopardize the growth of more newcomers in the sector.
On fire: The fight between fintechs and banks got very heated in 2021, the year in which institutions representing both sides of the dispute exchanged accusations on social media. There was also provocation with a person dressed as a dinosaur at the doors of agencies.
It shouldn’t stop there: when open banking takes hold in the country, the trouble should get even bigger, because it will increase competition for other areas, such as credit and insurance.
Impact NFTs
The Bitcoin Market this week launched its virtual NFT trading space.
The debut is with the auction of works of art whose gains will be partially reverted to a project to protect the territory of the Paiter Suruí indigenous people, in the Amazon.
Understand: NFTs – an acronym for “non-fungible tokens” – work like a certificate of ownership attached to a digital product. They took off in 2021, with million-dollar transactions involving classic memes or historical images, such as the first SMS.
Auction: the contest runs until February 15, with 12 works. Minimum amounts range from R$100 to R$5,000. Up to 95.5% of the gains will be reverted to the project for the management and territorial surveillance of the Paiter Suruí indigenous people.
Bitcoin Market: through its holding company 2TM, the cryptocurrency exchange became a unicorn (startups valued at $1 billion or more) in July 2021. Last week, Mercado Livre bought a stake in the group.
With the project, the broker seeks not only to expand the portfolio of assets offered to its clients, but also to increase the company’s efforts in the ESG agenda, with a program to support sustainable development and social causes.
take a break
The name of one of the world’s biggest investors returned to the news this week.
While the American stock exchanges are bleeding with the trend of rising interest rates in the country, the shares of Berkshire Hathaway, manager of Warren Buffett, are in the positive level in 2022.
What explains: the billionaire is known for investing in undervalued, financially sound companies that participate in more traditional sectors of the economy. These companies have suffered less from the fall in the American market.
On the other hand, tech stocks, which have soared in the last two years, face more turbulent paths with rising credit. One of the specialists in this niche, manager Cathie Wood, said she is confident in her positions and that “innovation is in liquidation”.
indications to know Warren Buffett’s Life and Investment Strategies:
- How to be Warren Buffett (2017): documentary that shows the lifestyle of the mega investor, who escapes the hype and lives in a modest house in Omaha, Nebraska. Available on HBO Max.
- The Snowball (2020): only authorized biography of Buffett, released by Sextante in Brazil (R$ 49.90, 992 pages).
In addition to the economy:
- Illustrated Express: listen to podcast about ‘Eduardo and Mônica’, the couple that inspired the lyrics of the song.
- Leaf Mines: free weekly newsletter with exclusive information, news curation and cultural programming in Minas Gerais; sign up.
What else do you need to know
I have over 8 years of experience in the news industry. I have worked for various news websites and have also written for a few news agencies. I mostly cover healthcare news, but I am also interested in other topics such as politics, business, and entertainment. In my free time, I enjoy writing fiction and spending time with my family and friends.
