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Inequality IS a problem.

Making everyone poorer doesn't fix that.

The world keeps on stumbling forward, progress is made gradually most of the time, then all at once through major innovations (Industrialisation, Internet etc.)

Think about it.... Nature (or maybe some careless Chinese scientists) just had another crack at taking modern society down, and couldn't manage it.

Not only are humans beating Covid with vaccines, it looks like there might finally be an effective vaccine for Malaria too. Easy to miss that Malaria was responsible for more deaths than Covid in Africa over the past year.

Harsh as it sounds, we're largely de-sensitized to Malaria in Africa now.

It's just something that's known.

So, finally onto the point (and in no particular order...)

Where are the risks?

New vaccine-resistant Covid variants: Yep, it doesn't bear thinking about, but viruses evolve too. So far the vaccines have proven effective on all variants. The emergence of new variants is no cause for concern as long as the vaccines are effective against them.

Food Inflation leads to political unrest: Basically Arab Spring 2.0...

China's been on a record corn-buying spree this year, and drought fears in the U.S. & Brazil are expected to lead to lower crop yields.

China Deleveraging: What if they overdo it? The CCP are deliberately engineering slower credit growth, trying to manage insolvencies and reduce shadow lending. Deleveraging and growth don't usually go hand-in-hand

Taiwan: Will China make a move or will the status quo be maintained?
Chinese military activity picked up in the Taiwan strait, and any move by China to take Taiwan by force would surely be met by a Western military response.
Semiconductor/chip supplies would be heavily impacted if there was conflict.

The September 'jobs cliff': Unemployment support in the U.S. expires at the beginning of September.... U.K. furlough expires at the end of September.
For me, there's too much complacency about historically high levels of unemployment.

In this Reuters poll of over 100 economists, the majority are far more concerned about inflation than they are about high unemployment.

The U.S. is currently adding ~500k jobs back into the work force each month.

• 9.3 million people were classified as unemployed last month
• Overall, employment is still 7.6 million below pre-pandemic levels

If we extrapolate that 500k p/m trend forward three months, that still leaves employment 6 million below pre-pandemic levels.

According to the JOLTS data, there are plenty of job openings, but there's no breakdown of part-time vs full-time in the data.

Maybe there aren't as many jobs as everyone thinks?

Early data (from Westpac) suggests that the withdrawal of policy support had a disportionate impact on employment by smaller businesses...

Turning our eye back to the U.S. will we see a similar disproportionate impact?

Generally, larger companies benefit from economies of scale and many have been increasing wages lately.

To what extent will small businesses be able to compete with those wages?

Maybe the appeal of working online from home will prove sticky and the next expansion of the gig economy gets underway?

More automation?

Nobody knows, but if I had to pick one underappreciated risk right now, sticky levels of high unemployment would be my choice.

Or maybe it will all work itself out in the end...

Most things usually do.

Remember that drought in Taiwan?

May 19th:

June 6th: