October Week 1

 Twitter takeover

Due to the recent seizing of the debt markets, banks led by Morgan Stanley may lose roughly $500 million in their efforts to finance Elon Musk's $44 billion acquisition of Twitter (TWTR). For the acquisition, lenders such as Morgan Stanley (MS), Bank of America (BAC), Barclays (BCS), and Mitsubishi UFJ initially pledged $13 billion in debt financing. 

Bloomberg estimates that these banks would now lose approximately $500M if they had to sell the debt. It's unlikely that investors would want to buy the debt in the current markets, despite the fact that they initially promised to fund the purchase even if they couldn't sell the debt.

High International tensions

The US Congress's approval of the Inflation Reduction Act in August has been hailed as one of the most important pieces of environmental legislation in a generation. Still, its effects on international relations have however been poisonous. 

Margrethe Vestager, the head of the European Union's competition enforcement agency, told the Financial Times on Sunday that the EU is urging its biggest ally to reconsider the law's generous tax incentives for domestic producers because they could result in much lower profits for European businesses. 

Exodus from China

Google, stated on October 4 that its translation services in mainland China would be discontinued due to poor usage. It is merely the most recent US corporation to join the long exodus from the Middle Kingdom as political and economic ties deteriorate in China. Numerous well-known corporations have left the country as a result of domestic rivalry, stringent federal regulations, and an oppressive internet censorship regime. Apple has transferred the manufacturing of its most recent iPhone to India, Amazon is discontinuing its Kindle digital bookshop, and Microsoft has closed LinkedIn in China because it was too difficult to comply with government regulations.

Pounds falls

The debt-financed £45 billion tax cut plan by liz Truss, which included a proposal to raise the cap on bankers' bonuses, was introduced on September 23. However, the £45 billion in unfunded tax cuts caused the pound to fall and a selloff of UK government bonds, pushing their yields to levels last seen during the financial crisis of 2008. These spending cuts will likely result in considerably higher borrowing (and/or spending cuts). The pound has been fluctuating all week, reaching an all-time low of $1.0327 on Monday, however, it has recovered some of its losses and is currently trading at $1.1107, albeit slightly down.