U.S. recession warnings are mounting in some quarters as the ties that bind the global economy look to be unraveling. Wall Street—having gotten used to easy money and strong balance sheets—lurched lower this week while Target and Walmart earnings reflected higher supply costs and slower consumer spending. The latter however presents a flip side to the grim tidings: Falling demand for goods would alleviate some labor and supply chain pressures, in turn tamping down key ingredients of inflation. And declining stocks could drive some people back to the labor market. Conor Sen asks in Bloomberg Opinion: “Isn’t this exactly what we wanted?”

The first Russian soldier to face trial for war crimes perpetrated by Vladimir Putin’s forces in Ukraine pleaded guilty to killing an unarmed civilian. As Russia’s botched war drags on, Moscow said almost 1,000 Ukrainian troops surrendered at the besieged steel plant in Mariupol. Europe is working to ban imports of Russian oil and gas while China is seeking to replenish its stockpiles with cheap Russian crude.

Ukrainian servicemen after exiting Mariupol’s devastated steel plant. Photographer: Alexei Alexandrov/AP

China warned that US support of Taiwan is a “dangerous situation,” days after a top US military official said the island democracy should prepare for Chinese aggression. Meanwhile, China’s Covid zero policy continues to pummel its economy, though Beijing has taken steps to prop up the industrial sector. “The question now is, at what point does the financial viability of these policies fall apart,” Anjani Trivedi writes in Bloomberg Opinion.

Dangerous heat has gripped the world from India to Spain to North America, which will soon be at risk of summer blackouts. The Horn of Africa is suffering its driest conditions in decades while rain in Canada poses a further threat to global grain supplies limited by Russia’s war. Four key climate crisis indicators set records in 2021, a United Nations report found, as humans fail to move away from fossil fuels.

New York City is nearing a high Covid-transmission level, but Mayor Eric Adams has refused to heighten precautions such as mask mandates. Now, health officials are investigating a possible cases of monkeypox. New and suspected instances of the rare virus have cropped up in Europe, Canada, the US and the two biggest cities in Australia.

Divorce can be costly, but Harry and Linda Macklowe’s split reaped a tidy profit when a judge ordered their art collection sold. The haul, including works by Andy Warhol and Mark Rothko, was worth almost $1 billion, the most expensive collection ever sold at auction. Separately, a painting by Jean-Michel Basquiat sold for $85 million.

Andy Warhol’s Self Portrait from 1986. Courtesy Sotheby's

• The World Economic Forum in Davos begins.
• President Joe Biden heads to Japan amid Asia alliance building.
• Twitter holds annual meeting in the shadow of Elon Musk’s bid.
• Sri Lanka officials conduct bailout talks with the IMF.
• George Floyd’s murder by Minneapolis police was two years ago.

A $60 Billion Crypto Collapse Is a New Bank Run

Soaring prices for Bitcoin, Dogecoin and other cryptocurrencies lured many into the market to make an overnight fortune. But the collapse this month of Luna and TerraUSD, the “king” of stablecoins, contributed to a staggering $300 billion rout of the crypto market, wiping out some investors’ life savings. The system around the coins is complex, but one thing was clear: “You can’t just create more money out of thin air.”

Billionaire investor Mike Novogratz tweeted his Luna tattoo before the crash. Photo: Mike Novogratz/Twitter

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