May 8, 2024

Archives for April 2021

Senate Passes $35 Billion Water Bill, but Bigger Infrastructure Fights Loom

It remains unclear whether Democrats will agree to winnowing down the scope of the economic platform or plans to pay for it by undoing key elements of the 2017 tax plan in order to win a handful of Republican votes. Some Democrats, including Senator Joe Manchin III of West Virginia, a key moderate, have urged their colleagues to negotiate with Republicans.

“I think there is a good reason for us to proceed with sincere bipartisan negotiations in the next few weeks — not indefinitely,” Senator Chris Coons, Democrat of Delaware, told reporters on Thursday. He said that making the attempt would be crucial for getting the requisite 50 Democratic votes to pass something unilaterally if those talks stalled.

Senator Rob Portman, Republican of Ohio, said he was optimistic, after conversations with Mr. Biden and White House staff members, that Senate Republicans and the administration could hatch a deal around a “narrower” definition of infrastructure, leaving other liberal proposals in Mr. Biden’s plans for a separate bill.

“I don’t know where the White House ends up on it,” Mr. Portman said. “The president last night said the right things, both in his speech and private conversations. I think they want to do an infrastructure package. They also want to do the other things. They understand that they don’t work together.”

Republican leaders, however, were more skeptical. Senator Mitch McConnell of Kentucky, the minority leader, said on Thursday that Mr. Biden had rattled off a “multitrillion-dollar shopping list that was neither designed nor intended to earn bipartisan buy-in.”

With the nearly $1.9 trillion stimulus plan still popular with a majority of voters, some Democrats are eager to wield their slim majorities in both chambers to push as many liberal priorities into law as possible.

Senator Bernie Sanders, the Vermont independent who is the chairman of the Budget Committee, said he and his panel had begun work on a budget resolution, legislation needed to unlock the reconciliation process that would allow them to circumvent a filibuster and push through a fiscal package without Republican votes. (Democrats have not yet committed to using the maneuver.)

Article source: https://www.nytimes.com/2021/04/29/us/politics/senate-water-infrastructure-bill.html

The Economy Is (Almost) Back. It Is Looking Different Than It Used To.

The housing sector is experiencing nearly as big a surge. Residential investment was 14.4 percent above its prepandemic trend, representing $90 billion a year in extra activity. And that was surely constrained by shortages of homes to sell, and lumber and other materials used to make them. It is poised to soar further in coming months, based on forward-looking data like housing starts.

Another bright spot is business investment in information technology. The tech industry has been comparatively unscathed by the crisis. Spending on information processing equipment in the first quarter was 23 percent higher than its prepandemic trend, and investment in software 7.4 percent higher.

Then there are the losers.

The troubles of service industries, especially related to travel, are well documented. While spending on restaurants, airline tickets, concerts and other recreational activities grew in the first quarter, it was a considerably smaller surge than the one that went to physical items, and not nearly big enough to fill in the deep hole those sectors face. Spending on transportation services remains 23 percent below its prepandemic trend, recreation services 31 percent, and restaurants and hotels 19 percent.

Those three sectors alone represent $430 billion in “missing” economic activity — largely equivalent, it’s worth noting, to the combined shift of economic activity toward durable goods and residential real estate.

A corollary shows up in trade data. Services exports are down 26 percent compared with the prepandemic trend, which reflects in significant part the freeze-up in global travel.

Less widely understood is a steep pullback in the energy sector.

There are two sides of the same coin: Consumer spending on gasoline and other energy goods is down 11 percent from its prepandemic trend line. And business spending on structures is down 19 percent, which reflects a pullback in investment by both the oil extraction industry and the commercial real estate sector.

Separately, the pullback in state and local governments, many of which have faced funding crunches, is real. Their spending is 4.3 percent below the prepandemic trend, another $89 billion in lost activity, though that is likely to return as federal stimulus dollars flow to their coffers and schools reopen.

Article source: https://www.nytimes.com/2021/04/29/upshot/economy-gdp-report.html

How Spending Mistakes Can Be Early Signs of Alzheimer’s

“We went into the study thinking we might be able to see these financial indicators,” said Lauren Hersch Nicholas, a co-author of the study who is an associate professor of public health at the University of Colorado. “But we were sort of surprised and dismayed to find that you really could. That means it’s sufficiently common, because we’re picking it up in a sample of 80,000 people.”

For decades, Pam McElreath kept the books for the insurance agency that she and her husband, Jimmy, owned in Aberdeen, N.C. In the early 2000s, she started having trouble with routine tasks. She assigned the wrong billing codes to expenditures, filled in checks with the wrong year, forgot to pay the premium on her husband’s life insurance policy.

Everyone makes mistakes, right? It’s just part of aging, her friends would say.

“But it’s not like my friend that made that one mistake, one time,” Ms. McElreath, 67, said. “Every month I was having to correct more mistakes. And I knew something was wrong.”

She received diagnoses of mild cognitive impairment in 2011, at age 56, and early-onset Alzheimer’s two years later. In 2017, doctors changed her diagnosis to frontotemporal dementia.

Getting a devastating diagnosis is hard enough, but learning to cope with it is also hard. Eventually both Ms. McElreath and Ms. Turner put mechanisms in place to keep their finances on an even keel.

Ms. Turner, who has two adult children, lives alone. After her diagnosis, she hired a financial manager, and together they set up a system that provides her with a set amount of spending money every month and doesn’t allow her to make large withdrawals on impulse. She ditched her credit cards and removed eBay and Amazon from her phone.

Though not a micromanager, the financial adviser keeps an eye on Ms. Turner’s spending and questions her when something seems off.

Article source: https://www.nytimes.com/2021/04/29/business/alzheimers-dementia-personal-finance.html

Software giant SAP agrees to pay $8 million in penalties to US as it admits violating laws with Iran exports

Federal prosecutors have agreed not to press charges against the global company as part of its deal with the US Justice, Treasury and Commerce departments.

The Justice Department (DOJ) said in a statement on Thursday that the deal it struck with the global software company is the first of its kind.

SAP, which is headquartered in the German town of Walldorf, admitted that it violated laws around exports and US sanctions related to Iran, and agreed to help US authorities with their investigations.

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Prosecutors allege that the company illegally exported thousands of software products to Iranian firms over at least seven years.

According to DOJ officials, under the US Foreign Corrupt Practices Act, companies can benefit from self-disclosure agreements if they make disclosures before the “imminent threat of disclosure or government investigation”.

John Demers, Assistant Attorney General at the DOJ’s National Security Division, said the situation “could have been far worse” for SAP if it hadn’t admitted to the illegal exports. “We hope that other businesses, software or otherwise, will heed this lesson,” he told reporters on Thursday.

SAP said in a statement it “welcomed” the conclusion of the US investigations and that it “accepts full responsibility for past conduct.” 

This is not the first time the company has paid financial penalties to US authorities in relation to its foreign business activities. In 2016, the software giant agreed to give up $3.7 million in sales profits after an investigation by the US Securities and Exchange Commission found that an SAP executive had paid $145,000 in bribes to a senior Panamanian government official.

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Article source: https://www.rt.com/business/522512-sap-us-penalties-iran-sanctions/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Ripple plans to go public after settling lawsuit with regulators – reports

That’s according to Yoshitaka Kitao, CEO of Japanese financial giant SBI Group, who said that both Ripple CEO Brad Garlinghouse and its executive chairman, Chris Larsen, are planning to take Ripple public.

“After the current lawsuit, Ripple will go public. The current CEO wants to do that. Chris wants to do that,” Kitao said during an earnings presentation call, as quoted by the Cointelegraph.

He added that SBI’s investment in Ripple would pay off following a potential public listing while the firm is the largest outside shareholder of Ripple.

“We have been investing in fintech companies and we adopt that technology in our group, and also we spread that technology across the industry. That is SBI Group’s basic strategy,” Kitao said.

Also on rt.com Ripple’s XRP cryptocurrency surges in what may be another coordinated buying frenzy

Speaking at the World Economic Forum in Davos in January 2020, Ripple’s CEO suggested that the company could go public in the next 12 months. “We’re not going to be the first and we’re not going to be the last, but I expect us to be on the leading side. It’s a natural evolution for our company,” Garlinghouse said.

In December, the SEC filed a lawsuit against Ripple Labs, as well as Garlinghouse himself and Larsen. The US regulator alleged that the XRP token was classified as a security and accused Ripple and the two executives of raising more than $1.3 billion through an “unregistered, ongoing digital asset securities offering” to investors beginning in 2013.

Since then, the company has managed to achieve a series of legal victories, while the price of XRP has risen above $1.40, a level not seen since January 2018.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/522464-ripple-ipo-lawsuit-regulators/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Comcast Earnings Beat Expectations Amid Shift to Streaming

If you want a clear picture of the state of the media industry in upheaval, Comcast offers a good snapshot.

The company, which includes NBC, Universal Pictures, several theme parks, and the Peacock streaming service, beat Wall Street’s expectations in its first-quarter earnings report on Thursday as it continued to shift its emphasis from cable to digital.

To start, take these figures from its results:

  • 19 million cable subscribers, a loss of 491,000 since December

  • 31 million broadband subscribers, a gain of 461,000

  • 42 million sign-ups to the streaming platform Peacock, a jump of 9 million

Despite the regular pace of cord cutting, Comcast’s cable television business pulled in over $5.62 billion in revenue for the first quarter. That was flat compared with last year, but it’s still the company’s biggest business, accounting for a fifth of all revenue.

Peacock, on the other hand, is the fastest growing, but it loses the most money. Last year, it approached $700 million in pretax losses. This year, the streaming platform is expected to lose $1.3 billion as Comcast spends big to load it up with original shows and sports programming with the aim of attracting more viewers.

Article source: https://www.nytimes.com/2021/04/29/business/media/comcast-earnings-peacock.html

Strong Covid recovery may propel China’s GDP growth above target level – report

The bank’s economists attributed the economic growth to the improved job market, restored consumer confidence, and the release of pent-up household demand. Last month, Beijing set a GDP growth target of over 6% for 2021.

The head of the economics unit for the ADB resident mission in China, Dominik Peschel said, as cited by China Daily, that consumption will return as a primary driver of growth this year, followed by investment in the manufacturing sector.

ADB expects consumer inflation to moderate to 1.5% this year before it recovers to 2.3% in 2022, due to a fall in pork prices.

Experts said that, despite renewed coronavirus outbreaks in Asia, China continues to experience economic normalization as containment efforts hold and vaccinations ramp up. The ongoing pandemic-related restrictions in many regions of the world will continually fuel demand for consumer goods. As a result, China’s merchandise exports are expected to outperform imports in 2021.

Also on rt.com Beijing’s foreign trade exceeds $104 BILLION in the first three months of 2021

According to the report, this year China’s central bank will likely guide credit growth mainly through liquidity adjustments, and targeted cuts in the reserve requirement ratio remain an option to provide qualified banks with additional funds for lending.

“Monetary policy will likely prioritize financial stability to a larger extent, especially in regard to real estate and shadow banking financing,” said the ADB.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/522431-china-gdp-growth-covid/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

US lumber prices skyrocket 250% as Covid drives home-buying demand higher

“Lumber prices have skyrocketed nearly 250% since April 2020. This price spike has caused the price of an average new single-family home to increase by more than $24,000,” reported the National Association of Home Builders.

On Monday, the May futures contract price per thousand board feet of two-by-fours reportedly surged from $48 to $1,420. The moonshot reportedly caused lumber trading to halt for the day.

RT

“The market is in trouble. It could spiral out of control in the next few months,” Dustin Jalbert, senior economist at Fastmarkets RISI said as quoted by Fortune.

According to the expert, the backlogged supply is not able to catch up with the demand that keeps growing after the season of home building and home renovation were opened.

Apart from steadily increasing home construction, the price spike is attributed to the supply chain that is getting disrupted by Covid-19-related lumber yard shutdowns, Gary Poulos, lumber division president for Mill Creek Lumber Supply told one of the local media outlets.

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The official added that the pandemic-related transportation issues exacerbated the surge in prices. Moreover, extreme winter weather also caused a shutdown of Gulf Coast refineries, causing an unavoidable shortage of other building supplies.

Lumber prices are expected to grow for quite some time amid soaring lumber futures contracts, including those for November, Stinson Dean, CEO of Deacon Lumber, told Fortune.

Prices are expected to correct only if demand cools down, which is not likely to occur until the home building and renovation seasons are over.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/522358-us-lumber-prices-skyrocket/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Oil to hit $80 on largest ever demand jump – Goldman Sachs

Higher demand for travel and acceleration of vaccinations in Europe are set to result in “the biggest jump in oil demand ever, a 5.2 million barrels per day (bpd) rise over the next six months,” Reuters quoted Goldman Sachs as saying in a note to clients.

Goldman Sachs continues to see oil rising to $80 per barrel this summer and says that “The magnitude of the coming change in the volume of demand – a change which supply cannot match – must not be understated,” as carried by FXStreet.

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At the beginning of this month, Goldman also issued a bullish note, saying that it anticipated strong demand that would require OPEC+ putting another 2 million barrels per day (bpd) on the market in the third quarter, after the around 2 million bpd that the alliance and Saudi Arabia decided to return between May and July.

In early April, the investment bank expected excess oil inventories to normalize by the fall of 2021.

At the end of April, Goldman Sachs continues to forecast a large demand rebound this year, despite the soaring COVID cases in India, which have somewhat clouded the demand outlook.

Also on rt.com Oil rises on expectations that OPEC+ may reconsider output policy

“Commodity markets have looked through the sharp rise in Covid-19 cases in India,” Goldman Sachs said today.

At the beginning of March, the bank expected Brent Crude prices to hit $80 a barrel in the third quarter this year, up by $5 compared to the previous forecast issued two weeks earlier.

Even after the sell-off in oil in mid-March, Goldman said that the “big breather” was a buying opportunity for oil and continued to forecast Brent hitting $80 per barrel in the summer.

This article was originally published on Oilprice.com

Article source: https://www.rt.com/business/522424-oil-rally-goldman-sachs/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Biden, Calling for Big Government, Bets on a Nation Tested by Crisis

“People are fed up with this,” said Senator Rick Scott of Florida, who heads the campaign arm for Senate Republicans leading into the 2022 elections.

Those attacks do not seem to carry the same sway that they did during Mr. Obama’s tenure, when the White House proposed a much smaller economic stimulus package than many economists thought was warranted given the huge erosion in household wealth after the financial crisis. Mr. Obama did raise taxes on high earners, including to help fund the Affordable Care Act, but not at a scale close to what Mr. Biden is proposing.

Mr. Biden might have Mr. Trump to thank for part of that shift. The pandemic aid bills he signed last year, with bipartisan support in Congress, might have helped reset the public’s views of Washington’s spending limits; “trillion” was a red line of sorts under Mr. Obama, but no longer.

Mr. Trump also pushed Congress to approve direct checks, an effort Mr. Biden continued, and began the Operation Warp Speed vaccine program that helped hasten the deployment of the most significant driver of economic activity this year: vaccinated Americans. As the economy reopens and people return to work, economic optimism is rising, though Republicans nationwide remain more pessimistic and are far more likely to oppose Mr. Biden’s plans.

In Washington, the president does not need Republican support to push through his agenda. He needs only his party to hold together in the House and the Senate, where Democrats enjoy majorities by thin margins, and move as much spending and tax policy as possible through the process known as budget reconciliation. The maneuver bypasses Senate filibusters and allows legislation, like Mr. Biden’s relief bill this year, to pass with only majority-party votes.

That process will give large sway to moderate Democrats like Senator Joe Manchin III of West Virginia, but so far that group has not flinched at the scale of Mr. Biden’s ambitions. Mr. Manchin has said he will support $4 trillion in infrastructure spending.

It is unclear whether Mr. Biden can hold Mr. Manchin and others on his people-focused spending, like the education and child care efforts unveiled on Wednesday. His administration is trying to make the case on productivity grounds, casting the plan as investing in an inclusive economy that would help millions of Americans gain the skills and the work flexibility they need to build middle-class lifestyles.

Article source: https://www.nytimes.com/2021/04/28/business/economy/biden-spending-big-government.html