Can consumers kiss the recession away?

Plus: What's going on in Bangladesh? [Bloomberg]( This is Bloomberg Opinion Today, a caterwauling catwalk of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Must-Reads - The dawning of the age of [state capitalism](. - Not another [central bank turning point]( - Who will protect the [Pokemon masters]( - We’re headed for an [online subscription backlash](. Will Peak Beauty Rescue Our Economies? Stocks go up. Stocks go down. Everyone’s watching the Fed so intently, faces virtually wrinkle up in the process. All those creases are not a pretty sight. For a couple of decades now, market watchers have had a kind of Botox available: the Lipstick Index — the brainchild of Leonard Lauder, then chair of Estee Lauder Cos Inc., which postulates that the sales of cosmetics, perfume and skin potions increase as consumers heighten self-care amid economic uncertainty. That’s certainly been the case since the world went into and out of Covid lockdown. The industry, [says]( Andrea Felsted, has been “on a tear for the past five years.” In June, a survey by Bloomberg Intelligence reported that 40% out of 650 respondents said “they would cut back on other purchases before reducing spending on beauty and personal care this year.” The trouble is, while 40% is substantial, Andrea points out that it is 10 percentage points below the survey’s results in January. And it is, in fact, the lowest since Bloomberg Intelligence started the poll two years ago. While upmarket products are doing gangbusters, less expensive mainstream items — the bulk of the beauty biz — have turned down. If we can’t depend on beauty to keep recession at bay, well, it’s gonna be ugly. The Unsettling Upheaval in Bangladesh Bangladesh squeezes the eighth largest population in the world into a compact delta of urban density, industrial squalor and farmland that altogether manages to be merely the 94th largest country in terms of territory. The capital, Dhaka, alone has nearly 40,000 people per square kilometer (in comparison, bustling, narrow Manhattan has about 30,000). So the weekslong people power revolution that compelled Prime Minister Sheikh Hasina to flee the country must have been a formidable tidal wave of anger. But there are lessons here other than democratic comeuppance for an autocratic leader who tinkers with election results. What must be unsettling for neighboring India, where Hasina has taken refuge, is that, as Andy Mukherjee [says]( she’d been presiding over “11 years of 5%-plus growth in real per capita income” since getting her second chance in the top job in 2009. India’s Prime Minister Narendra Modi boasts only “six such good years.” What all that economic expansion hasn’t translated into, however, is good jobs for the young of both countries. As Andy writes: “Under its longest-serving premier, Bangladesh became the world’s second-largest exporter of textiles after China. India, which was on a skills-based, software-services-led path long before [Prime Minister Narendra] Modi’s 2014 arrival, aimed for more sophisticated production under him — from semiconductors to electric vehicles. Yet, for the youth in both countries, the outcome is roughly the same: In 2022, 30% of Bangladesh’s 15- to 24-year-olds weren’t in employment, education or training. In India, the corresponding estimate for last year from the International Labor Organization is 23.5%.” Job creation has been a frustrating conundrum, says Andy. “With per capita gross national income of less than $3,000, both Bangladesh and India are stuck in the so-called middle-income trap. Neither is close to the club of rich nations, whose doors spring open only at about $14,000.” In his column this week, Mihir Sharma worries about [a more Bangladesh-centric dilemma]( What comes after Hasina? Nobel laureate Muhammad Yunus — who’d been persecuted by Hasina — is an internationally acceptable face. But he has no real political base. He’d have to face off against the same Islamist parties that opposed Hasina and for whom economic growth may not be the top priority. Furthermore, as in many such upheavals, the country’s real power broker is the military. As Mihir notes, a happy ending for Bangladesh is likely to be elusive. Telltale Charts “A study published in 2020 estimated that only between 2% and 4% of humans flew internationally in 2018, while 1% caused half of the emissions from commercial aviation. Private aviation takes that inequality, and turns it up to 11. Private planes account for 2% of total aviation emissions, but benefit just a handful of extremely wealthy people. …  Private jets are five-to-14 times more polluting per passenger than regular flights, and 50 times more polluting than trains ...” — Lara Williams in “[Lil Nas X Should Be Celebrated — Not Shamed — for Flying Commercial]( “The European Central Bank’s rate cut in June also underpinned expectations that the region might be on the cusp of an economic upturn, even as investors digested political surprises in France. But before the mid-year reporting season even started, a spate of profit warnings reset the mood — notably from industrial firms including Airbus SE and Carl Zeiss Meditec AG and consumer-facing companies such as Burberry Group Plc, H&M Hennes & Mauritz AB and Deutsche Lufthansa AG. These were to prove a taste of worse to come.” — Chris Hughes in “[The S&P Always Looks Good Next to European Stocks]( Further Reading The tough life of [automotive suppliers](. — Chris Bryant China’s sports investments [aren’t popular](. — Karishma Vaswani Israel’s strategy of [strength and fear](. — Hal Brands Elon Musk’s [bad English](. — Parmy Olson An argument in favor of [tree plantations](. — David Fickling Is the Bank of England really [just another bank]( — Paul J. Davies Who will lead [Singapore’s DBS]( now? — Andy Mukherjee Walk of the Town: A Farewell to Little Britain Anti-immigrant thuggery has made this a dispiriting past weekend in the UK, especially for a non-native like myself. Things have calmed down a bit with heartening counterprotests, which have given UK Prime Minister Keir Starmer maneuvering room, as the Editorial Board [notes](. I wrote about my feelings [here]( by looking at what some historians call the Evil May Day of 1517, when a preacher instigated mob violence against foreigners. While doing research, I discovered that one key event on that awful day more than 500 years ago took place around the corner from my London flat, which is on a street called Little Britain. The area called St. Martin Le Grand was once the site of London’s grave but monumental main post office. But that long-demolished Victorian edifice was erected long after Evil May Day. In 1517, it was a district where many foreign-born residents lived. And it was here that Thomas More, then the under-sheriff of London, tried but failed to dissuade the rioters. In any case, the residents defended themselves by throwing rocks, pots and pans down on their besiegers. The mob moved on to cause havoc elsewhere. Aerial view: Postman’s Park and the shed of the Memorial to Heroic Self-Sacrifice Photograph by Howard Chua-Eoan That history perhaps explains Little Britain’s name — which predates the popular if often sophomoric BBC television comedy by a couple of centuries. It fits the theory that the area was where migrants from Brittany congregated — and Little Brittany morphed into Little Britain. I’m already nostalgic because I have just moved out of Little Britain. What I will miss most — apart from the bird song issuing from the huge plane tree across from my flat — is looking down from my rooftop garden into Postman’s Park and its folksy wall of ceramic plaques called the Memorial to Heroic Self-Sacrifice. Set up in 1900 and shielded by a slanted roof shed, it’s meant to honor citizens who lost their lives while attempting to save others in distress. It’s a poignant reminder that there is a better Britain. Drawdown Thanks for hanging on amid turbulent times. Keep your seatbelts fastened. ”So, how many market corrections have you weathered?” Illustration by Howard Chua-Eoan/Bloomberg Notes: Please send survival tips and feedback to Howard Chua-Eoan at hchuaeoan@bloomberg.net. [Sign up here]( and follow us on [Instagram]( [TikTok]( [Twitter]( and [Facebook](. Follow Us Stay updated by saving our new email address Our email address is changing, which means you’ll be receiving this newsletter from noreply@news.bloomberg.com. Here’s how to update your contacts to ensure you continue receiving it: - Gmail: Open an email from Bloomberg, click the three dots in the top right corner, select “Mark as important.” - Outlook: Right-click on Bloomberg’s email address and select “Add to Outlook Contacts.” - Apple Mail: Open the email, click on Bloomberg’s email address, and select “Add to Contacts” or “Add to VIPs.” - Yahoo Mail: Open an email from Bloomberg, hover over the email address, click “Add to Contacts.” Like getting this newsletter? 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