Financial and Economic Brief - May 1, 2022

Is Elon Musk’s Purchase of Twitter More Than Just the “Freedom of Speech” Issue?

The media stir about Elon Musk’s acquisition of Twitter seems to revolve around the singular idea that free speech is being impeded on Twitter. Putting the respect of free speech discussion aside, Musk has also provided further explanation and input regarding what else needs to be addressed at Twitter. According to Musk, there are several other important issues that may be less obvious to most Americans. However, they play a vigorous role in how Twitter operates. Essentially, among other things, Musk points out that there are many crypto currency scams on Twitter and these need to be eliminated. He is a strong advocate of crypto. In addition, he wants to eliminate the scam “Bots” that have free range on the app. Another necessary feature, according to Musk, is an “Edit Button”, which a majority of users, in a recent survey, say they want. Check out this article which provides a more in-depth discussion.
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What Will be the Impact of China’s Economic Set-Back During 2022?

China’s economy is being seriously impacted by the Covid Pandemic. The government is taking rather harsh measures to reel-in the spread of the virus. And while Q1 2022 economic numbers do not reflect a potentially serious decline, many economists suggest that China will be facing a set-back in future quarters. The economic reports and projections for Q2 2022 are lower, matching numbers that closely resemble 2020, according to Deloitte’s economic team. One major concern is the tight lockdown of Shanghai and other major Chinese cities. Shanghai represents a critically important piece of China’s economy. Many believe that China is trying to eradicate Covid vs managing to live with it. Therefore, much of the economic set-back may be self-inflicted. However, since the interwoven economies of the world require complex financial interactions, a bump in the road for China might be the “Domino Effect” that creates recessionary pressures on the western economies.
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Rents for Apartments, Condos and Homes Have Been Soaring!

Many investors have bought-up home properties as a way to maximize return on investment and to deal with the impact of growing inflationary pressures. While this has been positive for some investors, renters have been negatively impacted by frequent double digit rent increases. Obviously, the largest increases have occurred in the most desirable geographic locations. People can adjust many expenses such as not purchasing a new car, cutting back on travel or dining out. However, circumstances suggest that renters have a greater challenge when it comes down to keeping rents in check. It is difficult to move to a less expensive area because of job responsibilities and/or family obligations. Belt tightening is seemingly one of the few ways to overcome the rise in rents. On the brighter side, some economic observers suggest that rent increases will fallback in 2023. Much of the problem revolves around the shortage of home building, the increase in interest rates and the increase in the cost of labor and materials. All of this ultimately means that the costs will be transferred to renters.
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