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Manchester United sign Jadon Sancho from Borussia Dortmund for £73m

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Jadon Sancho is unveiled at Manchester United’s Carrington Training Ground on July 23, 2021.

Ash Donelon | Manchester United | Getty Images

Manchester United have signed Jadon Sancho from Borussia Dortmund for £73m.

Sancho, whose move to Old Trafford was agreed in principle on July 1, completed a medical earlier this month after his participation at Euro 2020.

He has signed a five-year deal at United, with an option of a further year.

The 21-year-old joins the Premier League club after four years in the Bundesliga with Dortmund, where he won the German Cup in his final season and scored 50 goals across 137 appearances.

Manchester City retain a sell-on clause for their former youth-team player, whose contract in Germany was due to run until the summer of 2023.

“I’ll always be grateful to Dortmund for giving me the opportunity to play first-team football, although I always knew that I would return to England one day,” Sancho told United’s official website.

“The chance to join Manchester United is a dream come true and I just cannot wait to perform in the Premier League.

“This is a young and exciting squad and I know, together, we can develop into something special to bring the success that the fans deserve.

“I am looking forward to working with the manager and his coaching team to further develop my game.”

United had a long-standing interest in Sancho and attempted to sign him last summer, but were put off by Dortmund’s £108m valuation.

Dortmund’s asking price for Sancho dropped to £85m by the start of this summer, with United able to negotiate a further £12m drop in the valuation.

Sancho becomes Ole Gunnar Solskjaer’s second signing ahead of the new season following the addition of goalkeeper Tom Heaton earlier in the transfer window.

Solskjaer added: “Jadon epitomises the type of player I want to bring to the club, he is a forward player in the best traditions of Manchester United.

“He will form an integral part of my squad for years to come and we look forward to seeing him blossom.

“His goals and assists records speak for themselves and he will also bring tremendous pace, flair and creativity to the team.”

It could be argued Ole Gunnar Solskjaer’s side have more pressing needs in other areas. Many fans might prefer a central defender.

But Sancho has emerged as one of the world’s most exciting young players in recent years and it is easy to understand why United were so determined to finally get their man.

Manchester United will host rivals Leeds United at Old Trafford on the opening weekend of the 2021/22 Premier League season.

United face a possibly season-defining run of games in October and November, which starts with a trip to Leicester on October 16, the first showdown with Liverpool at Old Trafford on October 23, and a visit to Tottenham on October 30.

November 6 marks the first Manchester derby of the season as champions Manchester City travel to Old Trafford, before United head to Champions League winners Chelsea on November 27 before rounding off the month by hosting Arsenal on November 30.

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Netflix buys Roald Dahl catalog

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Gene Wilder as Willy Wonka and Peter Ostrum as Charlie Bucket on the set of the fantasy film ‘Willy Wonka & the Chocolate Factory.’

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LONDON — Netflix has acquired the entire catalog of Roald Dahl, the beloved children’s author known for works including “Charlie and the Chocolate Factory” and “Matilda.”

The U.S. streaming giant announced Wednesday it has bought the Roald Dahl Story Company, which manages the rights to the British novelist’s characters and stories. Financial terms of the deal were not disclosed.

“Excited to announce that the Roald Dahl Story Company (RDSC) and Netflix are joining forces to bring some of the world’s most loved stories to current and future fans in creative new ways,” Netflix said in a tweet, which featured a chocolate bar being unwrapped to reveal a golden ticket, in reference to the book “Charlie and the Chocolate Factory.”

It comes three years after Netflix signed a deal to create a slate of new animated productions based on the works of Dahl, including “Charlie and the Chocolate Factory,” “Matilda” and “The BFG.”

Several of Dahl’s works have already been adapted into movies that received global acclaim, from 1971’s “Willy Wonka and the Chocolate Factory” starring Gene Wilder to 2009’s “Fantastic Mr. Fox.” “Charlie and the Chocolate Factory,” a remake of the classic film starring Johnny Depp, was a huge box office success, grossing $475 million.

Netflix, which had already been working on a series based on “Charlie and the Chocolate Factory” and an adaptation of “Matilda The Musical,” said “these projects opened our eyes to a much more ambitious venture — the creation of a unique universe across animated and live action.”

“Roald Dahl’s books have been translated into 63 languages and sold more than 300 million copies worldwide, with characters like Matilda, The BFG, Fantastic Mr. Fox, Willy Wonka and The Twits delighting generations of children and adults,” Netflix said in a statement Wednesday. “These stories and their messages of the power and possibility of young people have never felt more pertinent.”

“As we bring these timeless tales to more audiences in new formats, we’re committed to maintaining their unique spirit and their universal themes of surprise and kindness, while also sprinkling some fresh magic to the mix.”

It marks one of the biggest content grabs for Netflix, which has been investing heavily into original content and intellectual property in a bid to maintain its lead over legacy media companies.

Disney has proven a formidable competitor to Netflix, with 116 million people now subscribed to its Disney+ streaming service. Netflix remains the largest player, with over 209 million paid members globally.

While Dahl is one of Britain’s most celebrated authors, his works have come to be viewed in a different light more recently amid concerns over his anti-Semitic views. Dahl has also been criticized for misogynistic and racist portrayals of some of his characters.

In 2018, the U.K.’s Royal Mint rejected plans to celebrate the life of Dahl with a commemorative coin due to his association with anti-Semitism.

Last year, the Roald Dahl Story Company issued an apology over the writer’s history of anti-Semitic statements.

“Those prejudiced remarks are incomprehensible to us and stand in marked contrast to the man we knew and to the values at the heart of Roald Dahl’s stories, which have positively impacted young people for generations,” the company said at the time.

“We hope that, just as he did at his best, at his absolute worst, Roald Dahl can help remind us of the lasting impact of words.”

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Jamie Dimon warns it’s possible the Fed could be forced into a sharp move next year

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JP Morgan CEO Jamie Dimon looks on during the inauguration of the new French headquarters of US’ JP Morgan bank on June 29, 2021 in Paris.

Michel Euler | AFP | Getty Images

JPMorgan Chase CEO Jamie Dimon has warned investors that the Federal Reserve could be still be forced into a sharp policy move next year — despite its best efforts to soothe concerns over inflation and interest rates.

Fed Chairman Jerome Powell has already suggested that the central bank could start to dial back on its pandemic-era monetary stimulus before the end of this year. He is due to outline more details later on Wednesday at the end of the Fed’s two-day policy meeting. The U.S. central bank is also due to publish its highly-anticipated inflation and interest rates forecasts.

Speaking to CNBC-TV18, Dimon said that if the U.S. continues to see inflation running hot over the next few months then the central bank could be forced to act quickly.

“If inflation is so high that the Fed has to do more traditional madmen economy, like jam on the brakes, pull out liquidity, then you’re going to see a huge reaction. And I’m not predicting that, but it’s possible they have to do that sometime next year,” Dimon said in an interview aired on Tuesday.

“The Fed can’t always be proactive — I mean, sometimes they’re going to have to be reactive.”

The top uncertainty for the Fed has been the path of inflation. The latest data showed U.S. consumer prices were up by 5.3% in the year to August, slightly down from the 13-year high of 5.4% in July.

Powell has argued that this spike in prices is transitory. But Dimon said that if those hot inflation figures continue into December then U.S. policymakers may have to admit that at least part of the price increases are here to stay.

“I doubt [come] December, people will say it’s all transitory when it’s now been going on for quite a while,” he told CNBC-TV18, but added that concerns would be curbed if global growth remains healthy while inflation is high.

“Inflation to me, it looks like there’s a part that’s transitory and there’s part that’s not — that’s not a disaster,” he added.

 

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Here’s why the Evergrande crisis is not China’s ‘Lehman moment’

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The Evergrande headquarters is seen in Shenzhen, southeastern China on September 14, 2021, as the Chinese property giant said it is facing “unprecedented difficulties” but denied rumours that it is about to go under.

Noel Celis | AFP | Getty Images

Evergrande holds physical assets

However, when it comes to the scale of potential impact on international financial markets, analysts point to a major difference between the Evergrande crisis and the Lehman collapse: Evergrande holds land, while Lehman held financial assets.

Evergrande has cash flow problems, but talk of systemic risks is “a bit overdone, frankly,” Rob Carnell, regional head of research for Asia-Pacific at ING, said Wednesday on CNBC’s “Squawk Box Asia.”

“Let’s face it, this is not Lehman’s, this is not LTCM,” Carnell said, referring to a large American hedge fund, Long-Term Capital Management, that failed in the 1990s. “It’s not a hedge fund with massive leveraged positions or a bank whose financial asset prices are hurtling towards zero. It’s a property development firm with quite a lot of debt, you know, 300 billion plus thereabouts in dollar terms.”

He expects that if Evergrande can get some cash flow into its physical assets, the company can finish its development projects, sell them and start paying down debt.

On Wednesday, the company’s real estate group announced it would pay the interest on time on a mainland-traded bond denominated in yuan.

“Evergrande is facing a liquidity crunch although it owns a large land bank,” Larry Hu, chief China economist at Macquarie, said in a report Tuesday. He noted the developer’s assets consist primarily of land and housing projects that are worth just over 1.4 trillion yuan ($220 billion).

No Lehman-style contagion story makes sense here and therefore no Lehman Moment will there be.

The collapse of Lehman Brothers in 2008 led to a crash in financial derivatives — credit default swaps and collateralized debt obligations — “causing the market to doubt the health of other banks,” Hu said.

“But it’s quite unlikely that the Evergrande saga would cause the land price to crash,” he said. “After all, the value of land is simply more transparent and stable than financial instruments. It’s especially so in China, where local government monopolizes the land supply.”

“As the result, [the] local government has a strong incentive to stabilize land price. In the worst-case scenario, local government could even buy back land, as they did in 2014-15,” he added.

Strong government control

Another critical difference in Evergrande’s case is the greater level of government control and involvement in China’s real estate industry.

“Chinese banks and many other entities are government arms first, intermediators a distant second,” analysts at research firm China Beige Book said in a report Monday. “Even non-state financials can be controlled to an extent rarely seen outside China. Commercial bankruptcy is a state choice.”

“Beijing says lend, so you lend; when or even whether you get your money back is secondary,” the report said. “No Lehman-style contagion story makes sense here and therefore no Lehman Moment will there be.”

Read more about China from CNBC Pro

“Policymakers would choose to wait first, then step in later to ensure an orderly debt restructuring,” he said. “A wholesale bailout is not very likely and shareholders/lenders might take a big loss. But the government would make sure that the pre-sold apartments get done and delivered to homebuyers.”

Hu also pointed to the Chinese government’s recent track record in restructuring giants such as Anbang Insurance, Baoshang Bank, HNA Group and China Huarong Asset Management. “China’s banking system has an annual profit of 1.9 [trillion yuan] and a provision of 5.4 [trillion yuan], which could easily absorb the loss from Evergrande,” he said.

‘China has the tools,’ IMF says

In Evergrande’s case, the property developer has more direct ties to foreign investors than the bulk of China’s economy.

The company has about $19 billion in total offshore bonds outstanding, equivalent to about 9% of U.S. dollar-denominated Chinese bonds, according to investment bank UBS. Evergrande’s total liabilities of about $313 billion is about 6.5% of the total liability of China’s property sector, the report said.

The UBS analysts expect Evergrande to restructure its debt, and predict that bond prices will recover from their lows and limit contagion.

The analysts also laid out a range of possible spillover effects if Evergrande were to enter the less likely scenario of full liquidation, such as the failure of exposed banks and selling across emerging market credit.

International Monetary Fund Chief Economist Gita Gopinath told Reuters this week the organization believes “China has the tools and the policy space to prevent this turning into a systemic crisis.”

The IMF can organize bailouts for countries or regions in financial stress.

Even though public government statements in recent months have called for preventing major financial risks, Chinese authorities’ intervention is not a given.

Chinese officials have so far made few major public statements about Evergrande.

At a press conference last week, a National Bureau of Statistics spokesman said the department is monitoring the difficulties of some large real estate companies and the potential impact on the economy.

China’s real estate market, along with related industries such as construction, accounts for more than a quarter of national GDP, according to Moody’s estimates.

Bets that property prices would only rise ultimately forced many Chinese households to take out mortgages to afford homes. In the last few years, the government has tried to cool the market with measures such as restrictions on the level of debt developers can take on.

— CNBC’s Eustance Huang and Weizhen Tan contributed to this report.

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