Economy

COLOMBO (Reuters) -The crisis-hit Sri Lankan economy can turn around by the end of 2023 if budget policies, which are not limited to the International Monetary Fund’s recommendations, are followed, President Ranil Wickremesinghe said on Monday.IMF recommendations have only been looked at to stabilise the economy, Wickremesinghe, who is also the country’s finance minister, told parliament, delivering the first annual budget since he took office in July.The budget included measures aimed at reducing the government’s deficit as Colombo seeks to secure an IMF bailout package to help the country recover from its worst financial crisis in decades.Soaring inflation, a weakening currency and low foreign exchange reserves have left the island of 22 million people struggling to pay for imports of essentials such as food, fuel and medicine.Mass unrest forced the previous president and prime minister out of power, and the country remains vulnerable to political instability as fears of a global recession have added to the problems for an economy that suffered a catastrophic contraction.Wickremesinghe laid down several medium-term targets for the government: increasing international trade as a percentage of GDP by more than 100%, annual growth of $3 billion from new exports over the next 10 years as well as attracting $3 billion in foreign direct investment over the same period.DEBT REDUCTIONHe also said the government planned to reduce debt to less than 100% of GDP over the medium term and achieve economic growth of around 7-8%.”With a lot of taxes already implemented, on the revenue side the budget primarily seems to be aiming towards tax administrations, reducing the leakages and broadbasing the tax net,” said Trisha Peries, head of research at CAL Group.Sri Lanka’s international bonds showed little impact from the latest announcements. Some issues gained as much as 1.6 cents in the dollar, but this was broadly in line with wider market moves and the country’s dollar-bonds are still bid at deeply distressed levels of 23-25 cents, according to Tradeweb.”We expected more targeted policies,” said Dimantha Mathew, head of research at investment firm First Capital.Mathew said debt restructuring would be a crucial short-term solution to the island’s problems, but reforming loss-making state-owned enterprises, which was listed in the budget, would be critical in putting the economy back on track over the longer-term.IMF BAILOUTAnalysts also said tax collections would be vital for the country, since it was unlikely to be able to cut expenditure massively in an effort to fund the welfare schemes, while the government’s ability to meet its interest payments will also be watched.The World Bank estimates Sri Lanka’s economy will contract by 9.2% in 2022 and 4.2% next year.Sri Lanka’s economy could recover in the “latter part of 2023″, the central bank said recently, adding that this would be dependant upon policymakers implementing reforms quickly and effectively.Sri Lanka signed a staff-level agreement with the IMF in early September but needs to get financing assurances from multiple creditors, including China and Japan, to secure disbursements. A deal with the IMF is also essential for Sri Lanka to access bridge financing from the World Bank and other multilateral sources if it is to have enough foreign exchange to pay for imports.After stabilising the economy, the government needs to steer it back towards growth or risk a repeat of the political unrest that forced President Gotabaya Rajapaksa to flee the country and resign in July.”For the moment, I think the government has taken the right actions to reach an IMF deal, however SOE (state-owned enterprise) reforms and expenditure management is going to be something that needs to prioritised just as much as tax collection,” Peries said. More

There are two big global governance gabfests going on this week, the COP27 climate change conference in Sharm el-Sheikh that wraps up a week today and the G20 leaders’ meeting in Bali. I’ll look at the climate issue in due course, but as for the G20, well, it is what it is and what it’s always been — which is largely pointless. It’s often a useful venue for high-level encounters such as today’s Biden-Xi meeting and there’s no doubt some useful chat on the sidelines. But its negotiation process isn’t worth much since it doesn’t seem to restrain member states by changing their domestic political calculus. It certainly doesn’t seem to have done much to hold back protectionism — see the links section below. So here’s a challenge for Trade Secrets readers. Can anyone show me an example where a government has substantively changed an important trade or international economic policy because of a promise at the G20? Answers as ever to the email address below, or hit reply to the newsletter email. Today we look at the implications of the US midterm elections and the latest developments in global trade itself. Charted waters looks at the problems behind electronic vehicle battery production.Midterms, schmidtermsAs of “hit send” time, the Democrats had (very impressively) retained the Senate and were possibly losing the House of Representatives to the Republicans by a narrow margin, though that remains unclear. Assuming the Democrats also win the run-off for the Georgia Senate seat, the unexpected implication is that had the Biden White House waited, they might have got a much bigger and probably greener Inflation Reduction Act through the Senate without West Virginia coal fan Joe Manchin slashing it back and nearly killing the thing outright.In that case we’d have been having an even feistier debate about local content provisions and the US trying to nab electric vehicle investment from Europe and Asia. Then again, given the likelihood of a Republican House blocking all tax increases, they’re probably pleased with what they got.So, what does this mean for trade policy until the presidential election in 2024? Once upon a time, there would have been intricate speculation. Congressional Republicans, if they could overcome partisan spite, would be more likely to give the administration trade promotion authority (TPA) to allow unamendable up-or-down votes on trade deals and pass preferential agreements.These days, though, the administration doesn’t really want to get any of that done. They’ve already got the IRA subsidy cash in hand and they aren’t eyeing any substantive bilateral or regional deals, which they’ve written off as political poison. US trade representative Katherine Tai claims she wants TPA if there’s broad bipartisan support for it, which (probably to the administration’s relief) there won’t be.The administration’s trade policy is basically done by executive order and the collateral impact of other legislation, such as the said electric vehicle tax credits and semiconductor export restrictions. China has become what Washington political types call a valence issue (everyone on one side) rather than a wedge issue (the public is divided), so anything that can be dressed up as China-related national security gets a free pass.The administration is clearly going to take the midterms performance as a massive vindication of its worker-centred trade policy and not stay up fretting about pettifogging things like the World Trade Organization. It’s rightly going to infuriate trading partners and it’s not the best way of doing the green transition, but as Sam Lowe of Flint Global points out, that may be a trade-off worth making.The EU, Japan and South Korea will concentrate on punching holes in the EV tax credits through crafty lobbying, thus heading off a trade war by stealth. That’s probably the best we can hope for.Trade (and maybe the dollar) starting to tankAs the bad news has mounted about the global economy, we’ve been waiting for trade to weaken with it. Well, it looks like it’s happening now, with forward-looking indicators in shipping weakening rapidly.Trade itself has been holding up fairly well, but it comes in with a lag and the latest global numbers are only for August. In October, Chinese exports fell for the first time since the early months of the pandemic.The WTO’s central case in its forecast last month was for goods trade to slow sharply to 1 per cent growth in 2023, revised down from its previous projection in April of 3.4 per cent.

The gloomy case in the WTO’s probability distribution has trade contracting year on year in 2023 which, pandemic aside, would be the first fall since the financial crisis. This will no doubt be grist to the doomsters’ mill about globalisation heading for the dustbin of history. In fact, it’s cyclical: trade tracks the GDP cycle more or less simultaneously but with a bigger amplitude.

A couple of reasons to be cheerful, by the way: the Chinese authorities loosening their Covid-19 restrictions a bit and the lower than expected US inflation on Friday, which caused the dollar’s biggest two-day fall since 2008. A weaker dollar and lower US rates are just what a bunch of beleaguered other countries need.While I’m not in the business of forecasting GDP and trade, I don’t see any structural problem for now. Growth is slowing, trade’s weakening with it. This happens.As well as this newsletter, I write a Trade Secrets column for FT.com every Thursday. Click here to read the latest, and visit ft.com/trade-secrets to see all my columns and previous newsletters too.Charted watersEver rooted around in vain in your kitchen drawer for those AAAs you were certain you had bought? Then you will appreciate one of the biggest challenges with electronic devices is a ready supply of batteries. So it is with the electric vehicle manufacturing market.The problem is that some of the world’s most important battery makers are at risk of running out of raw materials because they have not done enough deals with the relevant mining companies, according to FT correspondents.Of particular concern are the EV battery suppliers in South Korea, because that country alone produces a quarter of the world’s supply. It is also a key partner for Washington, given the Biden administration’s moves to cut its dependence on China.Trade linksSingapore explicitly calls for a “non-aligned movement” in trade (something I predicted back in March) for countries wanting to stay out of the US-China semiconductor war. My colleague Gideon Rachman points out that Indonesia, host of the G20, is also reprising its cold war role pushing a broader geopolitically neutral stance.The Global Trade Alert monitoring service reports that G20 countries’ trade policies in 2022 are apparently becoming relatively less protectionist and reverting to the pre-Covid pattern, though favouring local companies more than before the pandemic.The redoubtable Mark Sobel, formerly of the US Treasury, powerfully and to my mind convincingly puts the case that the Federal Reserve’s concern when setting monetary policy should be the US, not the rest of the world.The big beast is quitting the circus: Germany has announced it’s the latest European country to leave the Energy Charter Treaty, whose over-reach problems I discussed when the big exodus started last year.The EU’s departing ambassador to the UK reckons that London and Brussels aren’t too far away from fixing the Northern Ireland Protocol and with it the main post-Brexit trade irritant. More

Conservatives in the Bundesrat upper house blocked the reform, which has promised to put more money into the pockets of people on state benefits and to help the unemployed gain new skills, arguing that it promises to be so generous that low-income earners will have less money than those benefiting from the changes- a charge the government rejects. The overhaul is aimed at addressing a shortage of skilled workers in Europe’s largest economy and would replace the Hartz IV system that sanctions people who reject job offers.Germany’s skills shortage is holding back businesses, with the aging population posing a demographic time bomb for the public pension system — a threat ministers want to defuse with immigration and training.The welfare reform would introduce Buergergeld, or “citizens’ money”, to replace the Hartz IV system brought in from 2005, which shortened the length of time during which the unemployed could receive benefits and tied them to means-testing and requirements to search for a job.Under Hartz IV, introduced at a time of low growth and high unemployment, unemployed recipients of benefits can have their payments cut if they reject a job offer. Experts also say the benefits are insufficient to cover basic living costs.The Buergergeld reform, which the government had planned to introduce from January, will remove sanctions on those who reject job offers, raise benefit payments across the board and grant additional money to recipients during vocational training.The measure passed the lower house last week. Now, Labour Minister Hubertus Heil wants to call on a committee that mediates between the two chambers to fast-track a resolution so the rump of the reform can still come into force from Jan. 1. More

PARIS (Reuters) – While households struggle to cope with rocketing prices, the inflation spike is good for the taxman because it means there are simply more revenues to tax. But that leaves governments with tough decisions about whether to return those gains or not.Here are some of the ways that higher inflation affects the public finances.BRACKET CREEPAs governments prepare their budgets for next year, many are adjusting personal income tax brackets so people avoid what tax experts call “bracket creep”.The phenomenon, sometimes referred to as “fiscal drag”, occurs when pay increases to help workers cope with inflation push them into a higher tax bracket if there is no adjustment to take higher inflation into account. With British Prime Minister Rishi Sunak’s government due to present its much-awaited 2023 budget next Thursday, Britain could become a standout among developed economies if it maintains a freeze until 2026 on how much people can earn tax free and leaves the thresholds for tax brackets untouched.To limit the pain of higher taxes on top of the surging cost of living, the governments of France, Germany and the United States have announced plans to adjust their tax brackets to reflect high inflation.The sums at stake are nothing to scoff at. France’s finance ministry expects higher tax brackets to cost the state over 6 billion euros next year and its German counterpart estimates it could be double that, which a panel of German economic advisers considers too generous. It is not yet known how much the UK government stands to gain if it decided to freeze tax brackets.SPENDINGWhile higher wages can lead to a bigger tax take from personal income and payroll contributions, the most immediate boost to public coffers from higher inflation comes from value-added or sales tax, which rise in sync with prices of goods and services across an economy. Such tax receipts, which can be a major source of revenue in some countries, is up over 16.8% so far this year in Germany and 11% in France, although part of the increase is due to weak spending in early 2021 on account of the pandemic.But while higher inflation means that people spend more, it also means that government will over time also spend more as wages and procurement costs rise.Since value-added tax rises immediately but government spending on things like wages can take time, the lag can in the short term be positive for the public finances.However, many governments have bumped up spending and tax breaks to help households and businesses cope with the surging cost of inflation, which tends to annul the fiscal boost depending on how generous a government is.DEBTInflation is often seen as positive for government debt, because higher prices raises the nominal gross domestic product, reducing the value of a nation’s debt burden in terms of GDP.After many governments ramped up public spending during the pandemic to prop up their economies, economists frequently warn that they cannot simply count on inflating away their increased debt burdens.In the short run, governments that have a portion of their debt issued as inflation-linked bonds see an immediate impact of higher payouts to investors when prices rise.High inflation also adds to the debt burden over time as borrowing costs rise because investors demand higher yields to offset inflation increases when the government issues new debt. More

SHARM EL-SHEIKH, Egypt (Reuters) – A G7-led plan dubbed “Global Shield” to provide funding to countries suffering climate disasters was launched at the U.N. COP27 summit on Monday, although some questioned the effectiveness of the planned scheme.Coordinated by Group of 7 president Germany and the V20 group of climate-vulnerable countries, it aims to rapidly provide pre-arranged insurance and disaster protection funding after events such as floods, droughts and hurricanes hit.Backed by 170 million euros ($175.17 million) in funding from Germany and 40 million euros from other donors including Denmark and Ireland, the Global Shield will in the next few months develop support to be deployed in countries including Pakistan, Ghana, Fiji and Senegal when events occur.Some countries and campaigners were cautious, however, concerned it risked damaging efforts to secure a substantive deal on financial help for so-called “loss and damage” – the U.N. jargon for irreparable damage wrought by global warming. (Graphic: Fossil carbon dioxide emissions – https://graphics.reuters.com/CLIMATE-UN/CARBON-BUDGET/klvygexwbvg/graphic.jpg) German development minister Svenja Schulze said the Global Shield aimed to complement, not replace, progress on loss and damage.”It is not a kind of tactic to avoid formal negotiation on loss and damage funding arrangements here,” Schulze said. “Global Shield isn’t the one and only solution for loss and damage. Certainly not. We need a broad range of solutions.”Some research suggests that by 2030, vulnerable countries could face $580 billion per year in climate-linked “loss and damage”.Ghana’s finance minister Ken Ofori-Atta, who chairs the V20 group of vulnerable countries, called the creation of the Global Shield “long overdue”.Yet some vulnerable countries questioned the scheme’s focus on insurance, with insurance premiums adding another cost to cash-strapped countries that have low carbon emissions and contributed least to the causes of climate change.”We are not yet persuaded, especially of the insurance elements,” Avinash Persaud, Special Envoy on Climate Finance to Barbados Prime Minister Mia Mottley, told Reuters.”Using insurance is a method in which the victim pays, just in instalments in the beginning,” he said, adding that loss and damage finance should be grant-based. It was not immediately clear how much of the Global Shield funding announced so far was in grant form.Michai Robertson, a negotiator for the Alliance of Small Island States – which is championing calls for a new U.N. loss and damage fund in the talks this week – said even subsidised insurance premiums could enable insurance companies in wealthy countries to profit off poor and vulnerable nations’ suffering.”There’s an inherent injustice about them profiting off of our loss and damage,” he said.($1 = 0.9705 euros)For daily comprehensive coverage on COP27 in your inbox,sign up for the Reuters Sustainable Switch (NYSE:SWCH) newsletter here More

Investing.com — Presidents Joe Biden and Xi Jinping meet on the sidelines of the G20 in Bali, Indonesia. FTX’s collapse continues to send shockwaves through the crypto space but Binance has a rescue plan. A narrow win in Nevada keeps the Democrats in control of the Senate, making a split Congress likely for the last two years of Biden’s term. Stocks are set to edge lower at the open after Fed Governor Christopher Waller pours cold water on last week’s market exuberance, and oil drifts lower amid suggestions of more output coming out of the OPEC+ bloc. Here’s what you need to know in financial markets on Monday, 14th November. 1.  Biden, Xi meetU.S. President Joe Biden met with his Chinese counterpart Xi Jinping for the first time on the sidelines of a G20 summit meeting overshadowed by Russia’s war in Ukraine.The meeting represents something of a rapprochement between the world’s two most important economies after Beijing effectively froze communications in the wake of House Speaker Nancy Pelosi’s visit to Taiwan in the summer.The two leaders are not expected to announce any concrete agreements, but the meeting gives them the opportunity to discuss key issues such as Taiwan, and the recent restrictions on sales of U.S. semiconductors to Chinese companies, which has had a big impact on Chinese technology companies.In other G20 news, Russian Foreign Minister Sergey Lavrov, deputizing for the absent Vladimir Putin, was hospitalized with a suspected heart condition, AP reported, quoting three Indonesian sources. Lavrov’s spokeswoman dismissed the news as a “high-class fake”.2. Gridlock on Capitol Hill?Biden arrived at the G20 in Bali bolstered by the knowledge that his Democratic Party had retained control of the Senate in the midterm elections. That was confirmed by the narrow victory of Catherine Cortez Masto in Nevada over the weekend.Nor have Republicans yet been able to confirm retaking control of the House of Representatives, as seemed likely immediately after last week’s voting. With 211 seats so far according to the AP’s latest tally, the GOP appears likely to win a slim majority, but it seems unlikely that its internal divisions over Donald Trump and his legacy will allow it to exercise any majority status in the house decisively.3. Stocks set to head lower after Waller’s warning; Brainard speech eyedU.S. stock markets are set to open the week lower after Federal Reserve Governor Christopher Waller warned at the weekend that the market reaction to the October consumer inflation numbers had been excessive.Waller, one of the Fed’s more hawkish voices, told a conference in Australia that the Fed will likely slow the pace of interest rate hikes from here on, but warned markets should focus less on the pace of tightening than on the ‘end point’ of the cycle.“Until we get inflation down, that endpoint is still a ways out there,” Waller said. Fed vice-chair Lael Brainard speaks later.By 06:25 ET (11:25 GMT), Dow Jones futures were down 85 points, or 0.3%, while S&P 500 futures were down 0.5% and Nasdaq 100 futures were down 0.7%.Stocks likely to be in focus later include Walt Disney (NYSE:DIS), after reports of an internal memo on Friday that announced major cost cuts, hinting at layoffs. Disney’s new Black Panther movie enjoyed a healthy box office debut at the weekend. 4. FTX collapse reverberates; CZ has a planAlso in focus may be Coinbase (NASDAQ:COIN) and Robinhood (NASDAQ:HOOD), as the collapse of cryptocurrency exchange FTX continues to send shock waves through the digital currency space.FTX’s $470 million holding of Robinhood stock is one of few liquid assets that is likely to be recovered from the wreckage – and that has managed to find its way into a company that wasn’t on the 130-strong list of affiliates included in FTX’s bankruptcy filing on Friday.Overnight, Binance – seen by many as the unchallenged leader in crypto exchanges, but with a long history of run-ins with regulators itself – said it will launch an “industry recovery fund”. Binance CEO Changpeng Zhao will outline his ideas on a Twitter stream at 08:30 ET.The collapse of FTX has led to large-scale withdrawals across the crypto space, with Tether facing some $3B in redemption requests and Ether’s outstanding supply falling by some 7% over the last two weeks. Exchange Crypto.com again denied that it was struggling to process withdrawal requests. 5. Crude falls amid reports of OPEC output tweak; OPEC monthly report dueCrude oil prices drifted lower, unimpressed by China’s latest attempts to restart its real estate sector, amid reports that the Organization of Petroleum Exporting Countries may revise its quotas again next month – allowing those capable of producing more oil to do so. Iraq, in particular, is reportedly pressing for a higher quota.  It’s unclear whether that would be compensated for by lower quotas elsewhere in the bloc.  A monthly survey by S&P Global Platts indicated that higher output from Iraq, Kazakhstan and Russia last month narrowed the gap between what OPEC and its allies actually produce and they say they want to produce. OPEC is also due to publish its monthly report on the sector in the course of the day.By 06:40 ET, U.S. crude futures were down 1.1% at $87.97 a barrel, while Brent futures were down 0.9% at $95.09 a barrel. More

The president fired Adu Boahen after being made aware of allegations levelled against him in an expose, the presidency statement said, adding that Akufo-Addo had also referred the matter to the Special Prosecutor for further investigations. Adu Boahen did not immediately respond to a request for comment from Reuters.Finance Minister Ken Ofori-Atta is also facing calls for dismissal from members of parliament who accuse him of corruption and economic mismanagement as the country faces its worst economic crisis in a generation.The allegations against Adu Boahen did not appear to be related to those previously raised against Ofori-Atta.Adu Boahen could be seen in a video posted online by journalist Anas Aremeyaw Anas, who also circulated a lengthy email containing detailed allegations. Reuters has not verified the authenticity of the video or the content of the email.Vice-President Mahamudu Bawumia said in a statement the video showed Adu Boahen “apparently using my name, inter alia, to peddle influence and collect money from supposed investors”.”I would like to state that if what the minister (Adu Boahen) is alleged to have said is accurately captured in the video, then his position as a minister of state is untenable. He should be dismissed summarily and investigated,” Bawumia said. More

The chief of the world’s largest crypto exchange Binance has said no one can be protected from a “bad player” following the collapse of Sam Bankman-Fried’s FTX.Speaking at a meeting of business leaders on the island of Bali in Indonesia where the G20 summit of world leaders is being held, Changpeng Zhao called for more regulation of the crypto finance industry. Zhao, who is known as “CZ” in the crypto industry, did not specifically name his former arch-rival but talked about what the collapse of FTX meant for the $1tn cryptocurrency industry. “To be very frank, if a guy is very good at lying and is very good at . . . just pretending to be what he’s not, [if] somebody wants to violate the law, the law is not going to prevent that,” said Zhao.Digital asset exchanges are rushing to reassure clients that their funds are safe after the collapse of FTX on Friday.Binance as well as smaller rivals including Crypto.com, OKX and Deribit, have vowed to publish proof that they hold sufficient reserves to match their liabilities. Coinbase, the US-listed exchange, has also sought to distance itself from the crisis.The sudden collapse of FTX and Bankman-Fried’s trading shop Alameda Research, once viewed as pillars of the industry, has severely eroded confidence in the digital asset market. FTX had less than $1bn in easily sellable assets against $9bn in liabilities before it went bankrupt, the Financial Times reported on Saturday.FTX’s general counsel Ryne Miller said over the weekend that FTX was “investigating abnormalities with wallet movements related to consolidation of FTX balances across exchanges”.Elliptic, a blockchain forensics company, said that there were initial indications that $473mn in cryptoassets had been stolen from FTX late on Friday night.The announcements stoked fears that FTX had been hacked as staff raced to secure billions in digital tokens that will ultimately be used to pay back creditors in bankruptcy proceedings at the cryptocurrency group, which was only recently valued at $32bn.The FTX implosion has thrown a spotlight on two US accounting firms that the cryptocurrency exchange said it had used to audit its books.It has also raised questions about political financing linked to the crypto industry. Before FTX’s implosion, Sam Bankman-Fried had emerged as the second-largest donor to Democrats after George Soros, spending $36mn during the midterm election campaign. He also became one of the most prominent crypto representatives in Washington, supporting digital asset legislation and hiring former regulators as advisers.One hedge fund has admitted to being caught off-guard by the sudden FTX collapse, as well.Go deeper: Changpeng Zhao’s offer to rescue his arch-rival will go down “as one of the greatest corporate attacks that has ever happened”, according to one industry observer, and tips the balance of power in the $1tn industry in favour of the Binance chief.Five more stories in the news1. Chinese property stocks soar Shares in some of China’s biggest real estate companies rose sharply today as the publication of a 16-point plan to support the debt-ridden sector was interpreted as a crucial pivot by Beijing that could spark a revival. The measures include extending a year-end deadline for lenders to cap their ratio of property sector loans.2. Northern Trust told to improve after pension turmoil UK regulators have ordered the US custody bank to improve its operating systems after it was overwhelmed from processing margin calls during the recent pension fund crisis, people familiar with the situation told the Financial Times.3. EY timetable slips for partner votes on break-up plan Voting by the Big Four accounting firm’s UK and US partners on a radical break-up plan is set to be delayed to next year as its leaders try to hammer out legal documents governing how the split will work.4. Turkey blames terrorist group for bomb attack Turkey said Kurdish militant group PKK and its US-backed affiliates in Syria were behind yesterday’s bomb attack that ripped through one of Istanbul’s busiest streets, killing six people and injuring another 81. A local news channel today said that the suspected perpetrator of the attack was a Syrian-origin woman who had “confessed” her links to the PKK/PYD.5. Democrats retain control of US Senate after win in Nevada The Democrats retained their majority in the US Senate after Catherine Cortez Masto won re-election in Nevada. Cortez Masto’s victory gave Democrats their 50th seat out of 100, enough to hold the majority given that Kamala Harris, the vice-president, can cast tiebreaking votes. Attention now turns to the December 6 run-off election in Georgia where incumbent Democrat Raphael Warnock is hoping to beat his Trump-backed Republican rival Herschel Walker, the former American football star.Go deeper: What have we have learnt from the 2022 US midterms? This explainer identifies seven key takeaways from the still unresolved elections.

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The day aheadJoe Biden and Xi Jinping meet The US president and his Chinese counterpart meet in person for the first time as leaders on the sidelines of the G20 summit in Bali. The high-stakes encounter is the most significant test yet of whether the two sides can reverse a dramatic decline in relations.Read more: Vladimir Putin is set to dominate the G20 summit even though he will not be attending in person. Elon Musk in court over Tesla pay Elon Musk will seek to prove that he is deserving of a multibillion-dollar pay package from Tesla, in a court case brought by shareholders who accuse the electric carmaker of having enriched its co-founder and chief executive at their expense. FT Schools is hosting a free economics webinar today with senior FT journalists and guests covering topics from green energy to government budgets and Brexit. See the full agenda and sign up here to submit your questions to the panel.What else we’re readingThe global housing market is heading for a brutal downturn At the end of 2021, things looked rosy for the global housing sector. Arguably, there had never been a better time to own a home. Not even a year later, and the picture is completely different, write economics reporter Valentina Romei and the FT’s head of data visualisation, Alan Smith.

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What the midterms mean for investors Midterm elections can have major repercussions for the economy and markets, writes the global chief economist at Kroll Megan Greene. But this is not one of those elections, she says. Whatever the final results, she argues, what is clear is the American government will remain sharply divided. But gridlock and the stability it brings may not be a bad thing for investors, she says.More comment on the midterms: Democrats will have to balance rhetoric and reality post-midterms, argues Rana Foroohar. Deal making gets tougher as era of free money closes Merger and acquisitions advisory is an inherently cyclical business. When the economy is strong, dealmaking and the revenues attached to it go up. In periods of contraction, companies do fewer deals, writes US corporate finance and deals editor James Fontanella-Khan. The current economic environment, however, is puzzling for most US chief executives, he says.China’s elite seek safety abroad A flock of wealthy Chinese have taken flight from the world’s most populous country just as Xi Jinping embarks on an unprecedented third five-year term in power. Some of those leaving have cited the difficult business environment, while others fear the direction of future government policy.The creeping normalisation of the hard right Many mature democracies are experiencing the normalisation of the anti-liberal far right — and it’s not easy to combat. It is more fundamental than a struggle over political representation; it is also a struggle over the definition of normality, writes Timothy Garton Ash.Why the iPad is the pilot’s new best friend The humble tablet computer represents the greatest change to my job since I started flying as a commercial pilot nearly two decades ago, writes Mark Vanhoenacker. Pilots use iPads as a library, an atlas, and a tool for flight planning, briefing and logging, he writes in his latest FT column.Wine

‘The October 25 tasting in London was something truly spectacular’ © Leon Edler

Ridge Vineyards, the Silicon Valley winery founded by four Stanford scientists in their spare time, celebrates its 70th anniversary this year and the FT’s wine critic Jancis Robinson was invited to taste some of their vintage bottles as part of the celebrations.Finally, thank you to those who voted in Friday’s poll. Two-thirds of readers thought the US would not avoid a recession next year. Let’s hope they are wrong. I’ll be back in your inbox tomorrow — Gordon More