AThis is Money Tonight. I'm Adam, and with me is Bill. We're live, and the story everyone's arguing about this hour is China's lost generation.
BAnd the numbers are ugly. Nearly one in five young Chinese, 16 to 24, not in school, unemployed. A record 18.9 percent.
AThat's from the National Bureau of Statistics, reported by the Wall Street Journal this weekend. And it's real. August's number, worst on record.
BA record 11.8 million university graduates hit the job market this year. Eleven point eight MILLION. And they're walking into layoffs in tech and finance.
AThe Journal profiled a 27-year-old with a master's in computer science. Dropped out. Figured there was no point finishing, no career left.
BThat's the part that should scare everyone. Not the headline rate — the fact that the promise is gone. Work hard, go to school, and the state's old bargain collapses. That's the lost generation.
AAnd look at why. Beijing's pushing AI and robotics, the 'new productive forces.' Great for headlines, terrible if you're 22 and looking for your first desk job.
BOh, come on. AI's not the villain here. The villain is an economy that spent years building housing and exports and forgot domestic demand. Kids aren't getting replaced by robots, they're getting replaced by nobody.
AOne estimate from a University of Hong Kong professor says city employment is about seven percent below its pre-Covid trend. That's roughly 37 million missing jobs.
BThirty-seven million. Say that out loud and then tell me this is just about ChatGPT. This is an economy that's been drifting for a decade.
AAnd that 18.9 percent may undercount it. A Tsinghua professor argues the real issue is people out of work for two years or more.
BWhich the official count just stops counting. Classic. The number stays pretty, the pain gets hidden.
ACertain markets are already pricey. Beijing's piloting household subsidies in places like Shanghai just to prop up spending. This is now an emergency response.
BAnd investors should note: a consumer base this young and this unemployed doesn't buy cars or phones or houses. It's a population problem, but it's also a demand problem. And China's demand problem is the world's problem.
ABut that's not new. China's been subsidizing. The question is whether this lost generation gets angry enough to force Beijing to change course. Or whether Beijing just keeps calling them 'flexible employment.'
BFlexible employment is how they count the guy selling noodles from a cart because his finance job vanished. It's a euphemism for a broken labor market.
AA Telegram channel, FinancialJuice, is also pushing headlines about Iran tonight. President Pezeshkian reportedly blaming the U.S. for the interim deal failing. That's unverified for now.
BAnd the same channel says U.S. travel advisories just got updated for Saudi, Qatar, UAE, Iraq, Lebanon, Israel — citing Houthi aggression. Again, unverified wire stuff. No official confirmation yet.
AIf that's true, it's not just politics. It's shipping lanes, oil, freight rates. But we need more than a Telegram headline before we run with it.
BSpeaking of energy, Zerohedge posted that El Niño warmth crushed U.S. natural gas futures in a 15 percent weekly rout.
AWhich we can't confirm either. No reliable weekly number supports a 15 percent drop. So treat that as a claim, not a fact.
BStill, the broad point's right. Warmer weather, less heating demand, gas prices under pressure. That part's not controversial.
ANow one for the crypto crowd. The crypto desk is Neome, a news aggregator, flagging a bunch of headlines tonight.
BAnd I read those with my eyebrows raised. BlackRock files a third Bitcoin ETF with downside protection, capped upside. Tether's CEO claims Iran-linked USDT volumes fell 94 percent. France blocks 64 crypto sites.
ANone verified. Those are headlines being shared, not reported facts. BlackRock's third ETF, capped upside — that would matter, but wait for the paperwork.
BBitcoin's down, by the way. And while a third ETF would be a big deal, the fact that it's capped upside tells you the sell side is nervous. They're designing products for a falling market.
AThat's your read, and it might be right. Or BlackRock's just chasing whatever flows it can get while crypto sentiment is weak.
BSo both of us are saying the same thing: nobody's bullish right now.
AYou said it, not me. I'm saying the news is a rumor until the filing lands.
AMeanwhile CME is launching Bitcoin Cash and Uniswap futures. Regulated altcoin exposure. That's the boring but important infrastructure story.
BBoring is good when it's a derivatives exchange. Boring means liquidity. And liquidity is the only thing that saves crypto from its own drama.
AThat's it for this hour. Thanks for listening.