Why labor shortages could be here to stay

 May 9, 2023

Share of U.S. population that is working age

More and more Americans are getting too old to work.

Why it matters: Even if the job market cools off from its current hotness, that could mean labor shortages will be with us for the long term.

State of play: Declining fertility rates, and increasing life expectancy, is expected to lead to a drop in working-age populations across all G20 countries, according to projections cited in a recent report from Moody's Investors Service.

• "Korea, Germany and the U.S. are expected to see the sharpest declines over the next decade," Moody's states.

Driving the news: The job market is still going strong, per the latest nonfarm payrolls report from the Labor Department.

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Federal government under Biden runs $928,000,000,000 deficit in just 7 months

 

May 9, 2023

That is from September 1, 2022, to March 31, 2023. That's $132.57 Billion per month.  With five months left in the fiscal year, which will add approximately another $662.85 billion to the National Debt. A total debt for this fiscal year of $1.591 Trillion. Who needs a debt ceiling?

The nonpartisan Congressional Budget Office (CBO) revealed the federal government under President Biden has run a near-$1 trillion federal deficit in the "first seven months of fiscal year 2023."

CBO’s report dropped on Monday, giving lawmakers insight into the current state of the federal deficit.

The nonpartisan agency found that in the first seven months of FY2023 alone, the federal government has racked up $928,000,000,000.

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Biden Admin Pushed Out $182 Billion Worth Of Regulations In A Single Week

 

May 8, 2023

The Biden administration last week proposed or finalized regulations totaling $182 billion in compliance costs while adding 1.8 million yearly paperwork hours, according to a report by the American Action Forum (AAF).

The most expensive rule for consumers was the Environmental Protection Agency ‘s (EPA) strict new tailpipe emissions limits for passenger cars, which would cost businesses roughly $180 billion in “vehicle technology costs” through 2055, the AAF calculated, citing the government’s own publicly available cost-benefit analyses of each regulation. The proposed regulation — which the EPA hopes will push two-thirds of all passenger car sales after 2032 to be all-electric — was initially announced in April alongside comparable regulation for heavy-duty vehicles and was formally proposed on May 5.

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Outlook for household spending slumped in April, New York Fed survey shows

 May 8, 2023

• The Survey of Consumer Expectations for April showed that the outlook for spending fell by half a percentage point to an annual rate of 5.2%, the lowest since September 2021.
• Respondents expect an inflation rate of about 4.4% in the next 12 months, down half a percentage point from March.

• Household spending is expected to decrease significantly over the next year, according to a New York Federal Reserve survey released Monday that reflects downbeat consumer sentiment as well as a potential slowdown for inflation.

  The central bank Survey of Consumer Expectations for April showed that the outlook for spending fell by half a percentage point to an annual rate of 5.2%, the lowest level since September 2021.

  That came with a corresponding decline of 0.3 percentage point in the overall outlook for inflation over the next year. Respondents expect an inflation rate of about 4.4% in the next 12 months, still well above the three-year outlook for 2.9% and the five-year view of 2.6%.

  All of those levels are still above the Fed’s 2% inflation target, though they are drifting closer to the goal.

• Full Article

 

May 8, 2023

The article is from a Chinese publication.  Please read with a grain of salt.

In a multipolar world, the US dollar’s fall from prominence looks likely.

• De-dollarisation is gaining momentum as more countries voice concerns about the US currency’s dominance in the global financial system and its use as a tool for exerting influence

• In recent years, the world has witnessed fierce US-China rivalry, the Covid-19 pandemic wreaking havoc on global systems and the fallout from the Ukraine war on supply chains, as well as an acceleration towards multipolarity, where power is more evenly distributed among several advanced economies.

  The transformation of China, a trusted economic partner to many countries, into a mediator of global importance is just one example of the move away from a unipolar world. This is coupled with de-dollarisation gaining momentum.

• Full Article

What America’s tiny banks do that big ones don’t

 

May 8, 2023

The advantages of boots on the ground

anandaigua and Manhattan’s Chinatown are about as different from each other as two places in the same state can be. One is a small town in the bucolic Finger Lakes region, where almost everyone is a white English-speaker. Chinatown packs nearly ten times as many residents, many of them foreign-born and Chinese-speaking, into a much smaller space. What links them, and many other small towns and neighbourhoods across America, is financial services: both host community banks that cater to local needs.

Some see such institutions, generally defined as having less than $10bn in assets, as inefficient historical relics. They account for as much as 97% of the total number of America’s banks, but less than 14% of assets and deposits.

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The 3 likely ways Bud Light disaster might end – and only one is good news

 

May 8, 2023

Budweiser-Dylan Mulvaney controversy is no longer about a boycott. It's a matter of executive survival

Remember when drinking Bud Light wasn’t a heavy topic? Now, one of the anchor products for Budweiser is dragging down an entire company. 

Just the other day, video surfaced of fans lined up to get beer in Boston’s renown Fenway Park. Lined up at every concession stand but one – the one selling Budweiser and, especially Bud Light.

This is no longer about a boycott. This is about executive survival, which matters far more to CEOs and the people they pay. As Mel Brooks’ Gov. William J. Le Petomane memorably declared, "We’ve gotta protect our phony, baloney jobs, gentlemen!" 

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Biden announces 40% drop in inflation since last summer

 

May 7, 2023

Biden is a very delusional man.  He reads what's in front of him and that's it.  He does not live anywhere near the real world.  This is all a lie, and they know it along with all of America.

While speaking at a meeting with the White House Investing in America Cabinet on Friday, President Joe Biden praised the downward trend in recent inflation. Biden said the last nine months had seen inflation drop by 40%.

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Scope Ratings places U.S. credit ratings under review for possible downgrade

 

May 7, 2023

Scope Ratings on Friday placed the United States of America’s AA long-term issuer and senior unsecured debt ratings in local and foreign currency under review for a possible downgrade due to longer run risks associated with the misuse of the debt ceiling instrument.

Scope, which is seen as the leading European credit rating agency, said that recurrent debt-ceiling crises have resulted in phases of debt repayment distress for the U.S government, adding that the government is dependent on last-minute congressional action to ensure repayment of its debt in full and on time.

A rise in political polarization, divided government since November 2022 congressional elections and more elevated federal deficits over the forthcoming years are the other reasons Scope cited for the ratings review.

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Panic of Panic

 

May 6, 2023

Backstopping the banking system is necessary to save it, but irresponsible parties must pay a price.

Two American banks have failed—the Silicon Valley Bank (SVB) in California and Signature Bank in New York. The Federal Deposit Insurance Corporation (FDIC) has stepped in to take control and in the process has gone well beyond its regulatory remit. Under normal procedures, the FDIC would guarantee all deposits up to $250,000 and use the sale of the bank or pieces of it to bring larger depositors and creditors as close to whole as the asset sales allow. But in this case the FDIC has guaranteed all deposits regardless of size. Treasury Secretary Janet Yellen has indicated that Washington is likely to extend this protection to other banks too. The Federal Reserve (Fed) has established a special lending facility to ease strains further. A third bank, First Republic, looks shaky, and the biggest banks have stepped in to bolster it so that it does not join the list of failures.

Several commentators have criticized this special help, implying that it shows a favoritism toward the well-heeled and politically well connected, especially in Silicon Valley. There may be something to such criticisms, but such extraordinary actions by both the authorities and the financial community mostly reflect a desire to guard against a general banking panic. Bankers and regulators know that no bank, no matter how prudently managed or well capitalized, can withstand a run on its deposits. All depends on continued public confidence that deposits are safe. Without such confidence a general run could bring down the whole banking system and, as occurred in the financial crisis of 2008 and 2009, drive the economy into a deep recession.

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Blame Chuck Schumer for the Debt Ceiling Crisis

 

May 6, 2023

McCarthy managed to pass the bill in the House, but Schumer won’t let the Senate vote on it.

Barely two weeks ago, it didn’t look like House Speaker Kevin McCarthy had enough votes to pass a bill to increase the limit on the U.S. national debt. On April 19, when the California Republican released the Limit, Save, Grow Act of 2023 — intended to raise the ceiling by $1.5 trillion or extend it through March 31, “whichever occurs first” — NBC News noted: “Republicans have a narrow majority and can afford only four defections before the legislation collapses, with Democrats expected to vote against it en masse.”

Yet McCarthy pulled a surprising victory by managing to corral 217 votes for the bill last Wednesday, “after leadership made a flurry of last-minute changes designed to win over key GOP holdouts,” as CNN reported. McCarthy’s success had the immediate effect of eliciting angry denunciations from the White House.

“President Biden will never force middle class and working families to bear the burden of tax cuts for the wealthiest, as this bill does,” White House Press Secretary Karine Jean-Pierre said in a statement. “The President has made clear this bill has no chance of becoming law.”

This is typical Democrat campaign rhetoric — “Tax cuts for the rich!” — with little or no relevance to the actual content of the bill that passed the House, which doesn’t change taxes at all. The real problem for President Joe Biden is that his team built its strategy around the belief that McCarthy couldn’t pass any debt-ceiling bill. Now that McCarthy has succeeded, Democrats have to demagogue the issue in order to protect their fragile majority in the Senate from being forced to take a vote on the debt ceiling.

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Securing America – Does a weak US military impact the strength of the dollar?

 

May 4, 2023

With Bradley Thayer, Ron Armstrong and Kevin Freeman

BRADLEY THAYER, Director of China Policy, Center for Security Policy, Author, How China Sees the World 

• China’s global expansion in the context of the South Pacific
• The importance of the Philippines in the battle between China and the U.S.
• Does the United States have the ability to deter a Chinese attack against Taiwan?
• What is the status of the U.S. nuclear arsenal?

RON ARMSTRONG, Stand Up Michigan
LORI BROCK, Majestic Friesians Horse Farm

• How Brock’s farm is being impacted by plans for Chinese battery plants in Michigan
• Why did these companies decide on Michigan as the location for their plants?
• Michigan’s role in negotiating with the Chinese Communist Party
• What will the environmental impact be of these plants?

KEVIN FREEMAN, Host, Economic War Room, Senior Fellow, Center for Security Policy, Author, “Game Plan: How to Protect Yourself from the Coming Cyber-Economic Attack” and “Secret Weapon: How Economic Terrorism Brought Down the U.S. Stock Market and Why It Can Happen Again,” Founder, Globaleconomiwarfare.com, @SecretWeaponUSA:

• A history of “reserve currencies”
• How American military strength ties directly into the power of the U.S. dollar
• A potential alternative to the American dollar being proposed in Texas

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US banks are failing, and the authorities seem unlikely to intervene

 

May 4, 2023

Shares in two more US regional banks have been suspended. Regulators moved in to halt trading in Los Angeles-based PacWest and Arizona’s Western Alliance on Thursday after they became the latest victims of an escalating crisis that began with Silicon Valley Bank in March.

The message from central banks and bank supervisors is that this is not a rerun of the global financial crisis of 2008. That may be true. With the exception of Switzerland’s Credit Suisse, European banks have escaped the turmoil. It is specific US banks that are the problem.

There are a number of reasons for that: the business models of the banks concerned; failures of regulation; the large number of small and mid-sized banks in the US; and the rapid increase in interest rates from the country’s central bank, the Federal Reserve.

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Recent Reports By Financial Regulators Show The Downside Of Letting Regulators Review Their Own Work

 

May 4, 2023

The Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC) released reports on their actions regarding the collapses of Silicon Valley Bank (SVB) and Signature Bank (Signature) and what could be changed to prevent a similar bank collapse in the future. Both reports rightfully conclude that bank management at SVB and Signature played a role as to why both banks failed but did not dwell too long on this point. Bank leaders at both institutions were clearly at fault for why both banks failed and became 2 of the largest bank failures in U.S. history. 

The Fed’s report also states that regulators had begun to realize that SVB had issues with their management and risk years ago but had been slow to react to the problems occurring at SVB as the bank grew in size. The FDIC also stated similar themes about being slow to react to rising issues with Signature. In addition to the reports by the Fed and FDIC, a report released by the Government Accountability Office, a congressional watchdog, said regulators identified problems at both banks in recent years but didn’t escalate supervisory actions in time to prevent their failures. Regulators had the tools but didn’t act promptly or with enough speed to potentially prevent the collapse of these institutions. 

Regulators in both reports called for revamping rules on how banks are monitored and regulated but clearly had the tools at their disposal to address the issues at both banks. The Fed goes after a 2018 bill that rolled back certain regulations in the 2010 Dodd-Frank bank bill. The 2018 bill allowed for banks under $250 billion in assets to be subjected to less stringent oversight by financial regulators. Randal Quarles, former Vice Chair for Supervision at the Fed disputed the Fed’s finding by saying the report “provides no evidence at all for what it describes as one of its main conclusions—that a ‘shift in the stance of supervisory policy’ impeded effective supervision of the bank.” 

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How Bidenomics Has Finally Defeated Reaganomics

 

May 4, 2023

The last thing many of us expected when Joe Biden became president was that he would be a revolutionary. But just over two years into Biden’s presidency, there is no doubt that he has done more to dramatically transform U.S. policy and thinking in more areas than any of his predecessors since Franklin Roosevelt.

America had failed to adequately invest in its infrastructure for over six decades when Biden made it a priority once again. Biden’s prioritized investment in combating climate change to a degree that no past administration ever did. On foreign policy, he executed the pivot away from a Middle East and terrorism focus to a long-term commitment to placing the Indo-Pacific region and our rivalry with China atop our list of priorities.

Remarkably, he did this while simultaneously handling the threats associated with Europe’s largest land war since World War II and reinvigorating America’s most important alliance, NATO, in a way few thought possible just years ago. He stopped the impetus toward isolation and inaction internationally of the presidencies that immediately preceded his.

What is more, none of the transformations cited above are actually the biggest the Biden administration has overseen.

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Ford is losing roughly $60,000 for every electric vehicle sold

 May 4, 2023

Ford lost tens of thousands of dollars per electric vehicle sold in the first quarter of 2023, as the division remained on track for roughly $3 billion in yearly losses, according to the company’s Tuesday evening earnings report.

Ford’s electric vehicle division — which was separated from its traditional gas and professional-grade vehicle sales in a late March reorganization — lost $722 million in the first three months of 2023, while selling just 12,000 units, according to the company’s first quarter earnings report. This amounts to a roughly $60,167 loss for each vehicle sold, according to calculations made by the Daily Caller News Foundation.

“Because the auto industry is very capital intensive and has high fixed costs that need to be spread out over thousands of units, it is not uncommon to have steep losses initially which are followed by profits,” Heritage Foundation economist E.J. Antoni told the Daily Caller News Foundation. “Imagine, for instance, needing to retool a factory and rebuild an assembly line to build different vehicles. That is much more expensive than the revenue from the first few vehicles that are produced.”

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Hollywood and left-wing foundations behind climate charity quietly bankrolling extremist protest groups

 

May 4, 2023

A little-known climate change advocacy organization heavily funded by celebrities and influential left-leaning foundations has been quietly dishing out grants to various activist groups deploying unorthodox and extremist methods across the world to protest fossil fuels, documents reveal.

Anti-fossil fuels groups have been ramping up protests in the United States and overseas as part of a coordinated campaign to bring awareness to climate change by vandalizing fine art, blocking major roads, and even gluing themselves to sports cars. Many of these activist hubs are being bankrolled by Climate Emergency Fund, a Beverly Hills-based charity linked to Hollywood celebrities and top liberal nonprofit organizations aiming to shape the Democratic Party's agenda, according to tax forms and other documents reviewed by the Washington Examiner.

"Climate Emergency Fund has quickly become the ATM that radical environmental activists turn to fund their latest disruptions," Caitlin Sutherland, executive director of the conservative watchdog Americans for Public Trust, told the Washington Examiner. "And as their destruction increases, so should the scrutiny on who is bankrolling the Climate Emergency Fund and their ties to more mainstream environmental groups that might disagree with these over-the-top and dangerous tactics."

Last week, an entity called Declare Emergency that calls fossil fuels reliance "genocidal" and "criminal" took credit for smearing paint on the display case of a sculpture at the National Gallery of Art in Washington, D.C. Just Stop Oil, a group that made headlines in October 2022 for splattering tomato soup on a Vincent Van Gogh painting estimated to be worth $84 million at London's National Gallery, has been blocking traffic for days in the United Kingdom.

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How the U.S. eroded the dollar

 May 4, 2023

Americans hate inflation, in large part because it erodes the bedrock of capitalism — money. Concentrating on inflation, however, risks missing the profound other ways in which money has lost its power over the past three years.

Why it matters: U.S. government actions over the course of the pandemic have radically reshaped the dollar, which is now much more politicized and mutable than it was before 2020.

The big picture: Felix Salmon's new book, "The Phoenix Economy," out on Tuesday, covers the ways in which the world has changed since early 2020. Among them: a quiet revolution in how people think about what money even is.

Flashback: In mid-April 2020, millions of Americans woke up to find out that $1,400 had magically appeared in their bank accounts, placed there by the Trump administration as part of the first COVID stimulus plan.

• The U.S. dollar was effectively obeying orders being handed down by the government, the only entity capable of pulling such a move.

Where it stands: The Biden administration has been unusually aggressive in using the dollar as an instrument of foreign policy.

• It effectively confiscated $7 billion belonging to the central bank of Afghanistan, which it was able to do because those funds were on deposit at the New York Fed.
• It then did the same thing with Russia's foreign reserves and followed that up by cutting Russia off from the dollar-based payments system.

Between the lines: The pandemic changed the world's (or at least America's) conception of money itself. In what Felix calls the New Not Normal, money has become contingent, more of a social construct than objective reality.

• In a society that for decades was centered on the almighty dollar, that was disconcerting, to say the least.

• "Fiat currency" has become a pejorative term used by crypto advocates to undermine trust in the dollar. The Federal Reserve is constantly attacked by Republicans from former President Donald Trump to Sen. Rand Paul.

Zoom out: The dollar still retains its hegemony as the world's reserve currency, along with its utility as a measure of relative wealth. But trust in the currency is eroding, in a world where the Fed's main policy tool is always its own credibility.

The bottom line: The good news is that we've found an important new tool of foreign policy, and even of domestic fiscal policy.

• The bad news is that it makes capitalism that much more difficult.