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zvaigzdelasas · 1 year

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[VOA is US State Media]

A report by researchers from Johns Hopkins University is giving China better than expected marks for its performance in helping to restructure the crippling debt loads carried by some African countries. The report is based on a detailed evaluation of Beijing's participation in the Debt Service Suspension Initiative, or DSSI, an international vehicle for developed nations to support struggling countries like Angola and Zambia. The DSSI was introduced in 2020 at the start of the global pandemic by the International Monetary Fund and World Bank, which suggested the world’s 20 largest economies, known as the G-20, temporarily halt the collection of loans from the world’s poorest nations. U.S. Treasury Secretary Janet Yellen and World Bank Chief David Malpass have recently accused China of being a barrier to debt relief, and U.S. Vice President Kamala Harris was in default-stricken Zambia last week urging the country's bilateral creditors — of which China is the biggest — to do more on restructuring Zambia’s debt. But, despite some caveats, the report released this week by Deborah Brautigam and Yufan Huang from the China Africa Research Initiative found that overall, China “fulfilled its role fairly well as a responsible G-20 stakeholder.” The analysts added that China “did implement the minimum steps of the DSSI fairly well, communicating with other players, and following through on pledges.” According to the available data, Chinese creditors accounted for 30 percent of all claims and contributed 63 percent of debt service suspensions in the countries that participated in the DSSI. “The metric by which you evaluate [China’s] performance depends on what your expectations were for the initiative,” Brautigam told VOA, noting that this was the first time the world’s second-largest economy had joined a multilateral initiative – a move one G-20 source called “miraculous.” Brautigam said it was obvious that a new architecture is needed to deal with debt relief because the current system is dominated by the Paris Club, a group of wealthy Western nations that started lending to developing countries in 1956. In recent years, there have been more major new creditors, like China and bondholders. “So what evolves out of this is really up in the air,” she said, adding that all lenders “need to be in together because otherwise you get all these suspicions, you know, worries about free riding.” Successes and failures The study concluded that China might have achieved more during the DSSI if not for fears that countries would simply take advantage of any debt relief to repay other creditors. In Zambia, for example, Chinese creditors wanted assurances their relief wouldn’t be used to pay off the bondholders, while the bondholders were concerned that any relief from their side might go toward paying off China. China was “totally justified” in its suspicions on this front, Brautigam said, because “in most countries, all of those creditors continued to be paid.” “We need something that is simultaneous - you know, they all need to be in the room together … so that we don’t have this first-mover problem,” she added. In Zambia, the Chinese decided against suspending their debt payments while the country was still paying bondholders, but this didn’t happen in Angola, China’s largest African borrower with around $20 billion in debt to Chinese entities. In that case, Chinese creditors provided 97% of the debt relief over the two-year period without asking for assurances that Angola wouldn’t continue making other repayments.

The researcher’s third African case study, Kenya, showed how China’s DSSI treatment was different from the other two. Chinese banks agreed to provide relief at first but later stopped loan disbursements and suspended only some 40 percent of the expected amount in 2021. Moving forward The study also showed how China's banks and central government, despite the country's top-down political structure, do not always act in unison. The fragmented nature of the Chinese system and bureaucratic hurdles often remain a barrier to debt relief. Being part of the DSSI helped address that because it “pushed the Chinese government to align interests among fragmented banks and bureaucracies with conflicting goals. This process, still under way, is a necessary step toward full acceptance of the necessity for debt restructuring in the post-pandemic era,” the researchers found. The DSSI ended in December 2021 and has been superseded by what’s known as the Common Framework to continue helping indebted countries like Zambia with their restructuring. In January, World Bank chief Malpass said, “China is asking lots of questions in the creditors' committees, and that causes delays, that strings out the process.” Last month, Yellen accused Beijing of leaving developing countries “trapped in debt.” China has called on the IMF and World Bank to also offer debt relief, with President Xi Jinping saying at the G-20 summit last year: “International financial institutions and commercial creditors, which are the main creditors of developing countries, should take part in the debt reduction and suspension for developing countries." The Chinese Embassy in Zambia hit back at the U.S., calling Yellen’s “debt trap” comments “irresponsible and unreasonable.” Ultimately, the study found, “the DSSI was a success in what some saw as its primary goal: to bring China into a multilateral, G20-supervised forum where Beijing has an equal voice.” It now remains to be seen how the challenges highlighted by the pandemic relief program spill over into the current debt negotiations.

6 Apr 23

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dontmeantobepoliticalbut · 1 year

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House Republicans are trying to exact a price from Democrats for agreeing to increase the nation’s borrowing authority and prevent the government from defaulting on the obligations it has accrued over decades. They’re arguing for their priorities and going after President Joe Biden’s in a separate bill that passed the chamber on Wednesday.

The legislation in question has virtually no chance of becoming law. But Republicans hope the bill’s passage will force Biden to the negotiating table, where they could seek concessions in return for lifting the nation’s borrowing authority and ensuring that the U.S. Treasury can fully pay its bills.

“He either has to negotiate now or we’re the only ones that have raised the debt limit,” McCarthy said after the vote.

A look at key aspects of the legislation that the House approved by a vote of 217-215.

LIMIT FEDERAL SPENDING

The bill would set federal discretionary spending at $1.47 trillion during the next fiscal year and allow it to increase only 1% annually from there, far below the rate of inflation in most years.

The cap on spending is the big-ticket item in the bill, accounting for about two-thirds of the $4.8 trillion in deficit reduction that the Congressional Budget Office says would occur over 10 years if the bill is enacted.

Discretionary spending includes things like weapons programs, servicemember pay, grants for schools that serve large shares of low-income students, rental assistance to house millions of poor and disabled, and money to fund research on cancer and other life-threatening diseases. It’s the spending that Congress approves through appropriations bills.

The House GOP bill doesn’t affect spending on Social Security and Medicare. Such spending, referred to as mandatory, accounts for about two-thirds of all federal spending.

CLAW BACK COVID MONEY

The bill would rescind all unobligated COVID relief money from six bills enacted from 2020-2022. The changes would reduce spending by about $30 billion over the next decade, according to the CBO. That’s less than 1% of the total cost of the six bills.

TARGET THE IRS

House Republicans began their tenure in the majority by passing a bill that would rescind nearly $71 billion that Congress is providing the IRS to upgrade its technology and boost hiring. They have included the same proposal in their debt limit bill.

Democrats approved the higher IRS funding on top of what Congress normally provides the agency annually through the appropriations process. The boost immediately became a magnet for GOP campaign ads in the fall claiming it would lead to an army of IRS agents harassing Americans.

The CBO has said that rescinding the IRS money actually would increase deficits by more about $120 billion over the coming decade due to the impact on the agency’s work. But McCarthy said the step is needed to “protect families and businesses from a weaponized IRS.”

BLOCK STUDENT LOAN RELIEF

The Republican bill would repeal actions taken by President Biden to waive $10,000 to $20,000 in debt for nearly all borrowers who took out student loans. The bill would also prohibit the administration’s efforts to cut monthly payments in half for undergraduate loans. The CBO projects that the student loan changes House Republicans seek would save about $460 billion over 10 years.

Republicans argue that Biden is unfairly transferring the obligations of people who incurred student loan debts onto millions of American taxpayers who did not go to college or who already paid off their student loans. And the say the policy will do nothing to curb the soaring tuition rates at colleges and universities.

Biden has said the student loan forgiveness would give millions of younger Americans a little breathing room financially. It would improve their ability to plow their resources into a house, car or just basic essentials, which helps power the economy. Nearly 90% of the debt cancellation would go to borrowers who earn less than $75,000.

GOING AFTER RENEWABLES

Republicans are seeking to repeal most of the tax breaks that Democrats passed in party-line votes last year as they sought to boost the production and consumption of clean energy.

McCarthy argues that the tax breaks “distort the market and waste taxpayer money.” The White House says the tax credits are leading to hundreds of billions of dollars in private-sector investments, creating thousands of manufacturing jobs in the U.S.

Republicans dropped their efforts to strip out some biofuel tax breaks, however, after the proposed changes threatened to tank the bill. The restoration of those credits was a top priority of Republicans from Iowa and other Midwestern states where the production of alternative fuels such as ethanol play a major role in the rural economy.

Citing estimates from the Joint Committee on Taxation, the CBO projected that repealing the clean energy tax breaks would save about $570 billion over 10 years, though that amount will shrink with the decision to keep some of the biofuel breaks.

WORK REQUIREMENTS

One of the key elements of the GOP bill is expanded work requirements for recipients of federal cash and food assistance.

Under current law, able-bodied adults under 50 and without dependents risk losing their food stamp, or SNAP benefits, if they don’t spend 20 hours a week in work-related activities. The bill would apply the requirement to those ages 50-55.

In addition, the bill would apply work requirements to able-bodied adults without dependents in Medicaid, the federal-state program that provides health insurance coverage for low-income Americans. Job training and performing community service count toward fulfilling the work requirement.

McCarthy said changes would help those affected learn new job skills and earn a paycheck while helping to fill some of the millions of job openings throughout the country. The White House said millions of people, many already working, would lose their health insurance coverage.

A Congressional Budget Office review last year of work requirements for Medicaid recipients said Arkansas was the only state where a work requirement was imposed for more than a few months. It found many of the targeted adults lost their health insurance and employment did not appear to increase. It said that while evidence was scant, research indicated that many were unaware of the work requirement or found it too onerous to demonstrate compliance.

The CBO estimates that about 15 million people could be subject to the new Medicaid work requirements each year, although many would qualify for an exemption. About 1.5 million, on average, would lose federal funding for their Medicaid coverage, and of that group, about 600,000 would become uninsured.

FOSSIL FUEL BOOST

The debt limit package includes legislation the House passed earlier this year that aims to increase domestic production of oil, natural gas and coal, and to ease permitting restrictions that delay pipelines, refineries and other projects.

Known as HR 1 to signify its importance to House Republicans, the energy bill also seeks to boost production of critical minerals such as lithium, nickel and cobalt that are used in electric vehicles, computers, cellphones and other products. Biden has described the House GOP’s legislation as a “thinly veiled license to pollute.”

INCREASE THE DEBT LIMIT

The Republican would suspend the debt limit through March 31, or by $1.5 trillion, whichever comes first. That would tee up another debt ceiling fight for early next year, just months before the November election when control of the White House and Congress will be decided.

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dream2bu · 7 months

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I’m going to summarize my thoughts on a government shutdown.

Shutdown bad!!! Working together without a political agenda and bias to make make sure government doesn’t get shutdown, good!!!

For anyone that wants to read more, please feel free.

FOUR REASONS WHY A GOVERNMENT SHUTDOWN IS HARMFUL

Government shutdowns occur when policymakers fail to enact legislation to fund the federal government by the end of the fiscal year on September 30. Each year, Congress must pass, and the president must sign, legislation to provide funding for most government agencies. That legislation comes in the form of 12 appropriation bills, one for each appropriations committee. Lawmakers may also choose to pass a temporary funding bill, known as a continuing resolution, to provide funding for a limited time. If lawmakers fail to pass some or all of the appropriations bills on time, and a continuing resolution is not in place, the government would experience a partial or full “shutdown.”

There are many reasons government shutdowns are harmful, and here are a few.

1. Government shutdowns are costly.

It may be counterintuitive, but government shutdowns are expensive. A government shutdown pauses programs and government operations, only for them to eventually start up again, and that has costs. For example, the Office of Management and Budget (OMB) estimated that the lost productivity of government workers during the shutdown in 2013, which lasted 16 days, cost the government $2 billion.

More recently, a report issued in September 2019 by the Senate Permanent Subcommittee on Investigations found that the “last three government shutdowns cost taxpayers nearly $4 billion — at least $3.7 billion in back pay to furloughed federal workers, and at least $338 million in other costs associated with the shutdowns, including extra administrative work, lost revenue, and late fees on interest payments.” That assessment is an underestimate because it excluded substantial costs associated with several government agencies (including the Department of Defense), which were unable to provide complete estimates to the Subcommittee.

2. Government shutdowns are bad for the economy.

Government shutdowns can harm economic growth and certainty. A 2013 Macroeconomic Advisors paper found that government shutdowns can impose costs on the economy such as increasing the unemployment rate, lowering the growth in gross domestic product (GDP), and raising the cost of borrowing. The Bureau of Economic Analysis estimated that the government shutdown in October 2013 reduced fourth-quarter GDP that year by 0.3 percentage points. An S&P Global analysis found that a government shutdown in 2017 could have reduced real fourth-quarter GDP growth by $6.5 billion per week. The Congressional Budget Office estimated that the partial government shutdown that lasted from December 22, 2018 until January 25, 2019 reduced real GDP by $11 billion over the fourth quarter of 2018 and the first quarter of 2019 (although they assumed that much of that reduction would have been made up later in the year).

Additionally, a shutdown can cause disruptions in sectors of the economy. For instance, a Partnership for Public Service report noted that the last government shutdown (which lasted from December 2018 to January 2019) halted two major Small Business Administration loan programs. Those programs typically dispense nearly $200 million a day to small and midsize U.S. businesses; lack of access to such loans hindered business plans and caused economic hardship for thousands of entrepreneurs and their employees. Shutdowns also impact regulatory offices like the Alcohol and Tobacco Tax and Trade Bureau within the Department of the Treasury. An example— without the necessary certifications and approvals to operate, production for craft breweries throughout the country stalled, thereby reducing revenue for over 7,300 producers who provide more than 135,000 jobs.

3. Government shutdowns interrupt federal programs and services.

While programs such as Social Security and Medicare would remain largely unaffected by a government shutdown, other programs and services could be interrupted by the temporary furlough of “nonessential” government staff. In 2013, OMB showed that the shutdown that year disrupted scientific research, services for veterans and seniors, and health and safety inspections by the Food and Drug Administration, the Federal Aviation Administration, and the National Transportation Safety Board, among other programs.

4. Government shutdowns may harm the federal workforce.

Shutdowns contribute to economic insecurity among federal workers. During the last shutdown, about 800,000 federal employees were either furloughed or went without pay. This included workers at national parks and museums, corrections officers at federal prisons, and officials from the Transportation Security Administration. The gap in pay creates an adverse situation for federal workers as about 20 percent of Americans are unable to pay their monthly bills in full and about 40 percent are unable to pay an emergency expense of $400 or more with cash, according to the Federal Reserve.

Also, shutdowns may harm recruitment and retention of quality staff. Experts interviewed by the Government Accountability Office noted that prolonged shutdowns may alter the perception of federal jobs and reduce the attractiveness of such jobs for younger workers. Such perceptions are already apparent in the federal government where, currently, just 7 percent of all permanent, full-time federal employees are under the age of 30; that age group makes up 20 percent of the broader labor market.

Conclusion

Engaging in fiscal brinksmanship is not an effective way of addressing our nation’s fiscal challenges. It delays the tough decisions and has real costs for the budget, the economy, and everyday Americans. Instead of governing by crisis, lawmakers should work together to create a long-term plan that addresses the growing mismatch between spending and revenue and puts us on a sustainable fiscal path.

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mariacallous · 9 months

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Congress appears to be on track to trigger a government shutdown on October 1, 2023, because it is not expected to pass the 12 appropriations bills that fund government operations before the start of the new fiscal year.

Why do government shutdowns happen?

Under the Antideficiency Act (initially passed in 1884 and amended in 1950), federal agencies cannot spend or obligate any money without an appropriation (or other approval) from Congress. When Congress fails to enact the 12 annual appropriation bills, federal agencies must cease all non-essential functions until Congress acts. This is known as a government shutdown.

What happens when that occurs?

During shutdowns, many federal employees are told not to report for work. Government employees who provide what are deemed essential services, such as air traffic control and law enforcement, continue to work, but don’t get paid until Congress takes action to end the shutdown. All this applies only to the roughly 25% of federal spending subject to annual appropriation by Congress.

Benefits such as Social Security and Medicare continue to flow because they are authorized by Congress in laws that do not need annual approval (although the services offered by Social Security benefit offices may be limited during a shutdown). In addition, the Treasury can continue to pay interest on U.S. Treasury debt on time.

Shutdowns can be disruptive, leading to delays in processing applications for passports, small business loans, or government benefits; shuttered visitor centers and bathrooms at national parks; fewer food-safety inspections; and various inconveniences. Shutdowns are sufficiently likely that the White House Office of Management & Budget posts detailed contingency plans that government agencies maintain for shutdowns.

Why does a shutdown look likely in the fall of 2023?

In June 2023, with the backing of Republican leaders in the House and Senate, Congress passed and President Biden signed the Fiscal Responsibility Act, which lifted the ceiling on the federal debt and set limits on annual appropriated spending—one for defense, one for non-defense—for the fiscal years 2024 (which begins October 1, 2023) and 2024. At the same, the expectations were that this settled the overall size of the appropriations bills, and Congress would pass 12 bills that added up to the agreed-upon levels. The Senate Appropriations Committee has followed that path and has passed all 12 appropriations bills with bipartisan support. But House Republicans, unhappy with the agreement Speaker Kevin McCarthy struck with the White House, want to spend less than the levels specified in the Fiscal Responsibility Act—much to the consternation of Democrats and the White House, which says President Biden would veto the appropriations bills that are pending in the House. The House bills also include provisions on abortion, contraception, regulation of tobacco, and healthcare for trans persons that aren’t likely to pass the Senate.

When the House and Senate pass different bills, the next step is a conference committee at which the two chambers are supposed to forge a compromise, which goes to a vote in each chamber before going to the president. That is likely to be very contentious this year—and there is not much time.

The Senate is scheduled to return from its August break on September 5, giving it four weeks to make progress on passing fiscal 2024 appropriations. The House, however, isn’t scheduled to return until September 12, which means it will be in session only three weeks before the fiscal year ends on September 30.

What is a continuing resolution?

When Congress hasn’t passed appropriations bills for an entire fiscal year, it sometimes passes temporary spending bills—continuing resolutions—that fund government operations until a specified date. Continuing resolutions often, although not always, continue the level of funding at the prior year’s appropriations level. According to the Government Accountability Office, there were 47 continuing resolutions (often known as “CRs” inside the Beltway) between fiscal years 2010 and 2022. They ranged from one day to just under six months. Although they keep the government operating, the GAO said they can be difficult for government agencies to manage, because they often have to plan for a government shutdown because they can’t be sure a CR will pass, they can disrupt agency hiring plans, and they make planning difficult. A continuing resolution this Fall could avoid a shutdown—if the House can approve one.

The Fiscal Responsibility Act has an unusual feature meant to discourage Congress from funding the government with a continuing resolution beyond end of December 2023. If a CR is in effect on January 1, 2024, then the spending limits would be automatically revised with a particularly significant cut in defense spending.

How common are government shutdowns?

There have been four shutdowns where operations were affected for more than one business day. In 1995-1996, President Clinton and the Republican Congress were unable to agree on spending levels; the government shut down twice, for a total of 26 days. In 2013, a standoff over funding for the Affordable Care Act resulted in a 16-day shutdown. And in December 2018 and January 2019, a dispute over border wall funding led to a shutdown that lasted 35 days; it was a partial shutdown because Congress had previously passed five of the 12 appropriation bills.

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dreaminginthedeepsouth · 1 year

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Brodner :: Kevin McCarthy :: kicking the poor off of food stamps

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LETTERS FROM AN AMERICAN

May 5, 2023

HEATHER COX RICHARDSON

MAY 6, 2023

Today’s job numbers came in higher than expected, with the U.S. adding 253,000 nonfarm jobs in April. Unemployment fell yet again, to 3.4%, matching a rate not seen since 1969. Black unemployment is at an all-time low of 4.7%. For Hispanics it’s 4.4%, and for Asian Americans, 2.8%. The rate for adult women is 3.1%. Average hourly wages rose 0.5%. This good economic news didn’t come from nowhere. The Biden administration has focused on building infrastructure, bringing supply chains home, and bolstering new manufacturing. The Bipartisan Infrastructure Act, the CHIPS and Science Act, and the Inflation Reduction Act have invested in workers. At the same time, the administration has taken measures to claw back some of the power the country has ceded to business leaders over the past decades. It has taken steps to promote competition, including Treasury Secretary Janet Yellen’s negotiation of a global minimum corporate tax to stop nations from racing to attract investment by cutting taxes, and the Justice Department’s enforcement of antitrust laws, which has led to a number of directors resigning from interlocking boards. The Federal Trade Commission has proposed a ban on noncompete agreements, which prevent people from moving from job to job. The FTC estimates that getting rid of the agreements would increase wages by nearly $300 billion per year and enable about 30 million Americans to move to better jobs. Biden’s approach to governance is not just a change in policy from the past forty years. It is a demonstration of the tedious, hard, incremental work of moving the ball forward in a modern democracy. The extraordinary work that goes into governance showed last night in a keynote address National Security Advisor Jake Sullivan gave on the administration's approach to Middle East affairs at the Washington Institute for Near East Policy. Moving away from the nation's previous tight focus on terrorism, Sullivan emphasized a theme that the Biden administration has highlighted since the president took office: “the integration of foreign policy and domestic policy.” Sullivan emphasized that the administration's template for foreign affairs is “realistic and pragmatic” but also “ambitious and optimistic about [what] the United States and our allies can achieve together over time.” The administration's new framework for U.S. engagement in the Middle East, he said, “is built on five basic elements: partnerships, deterrence, diplomacy and de-escalation, integration, and values.” Over the past two years, the U.S. has strengthened partnerships in the Middle East with “strategic dialogues, high-level visits—including two presidential visits—exchanges, and over 200 military exercises,” and it continues to strengthen ties between allies. It has deterred violence through counterstrikes but prefers to rely on diplomacy and de-escalation of tensions. “[E]very day, we are plugging away at proactive and creative diplomacy across the Middle East region,” Sullivan said. Most notably, the administration helped to end the war in Yemen by setting the terms for a truce mediated by the United Nations. That truce has held—so far—for fourteen months. “Humanitarian aid and fuel are flowing through Yemen’s ports, the civilian airport in Sanaa has reopened, and the parties are actively in discussions on a roadmap to ultimately bring this war to an end.” Sullivan said that the administration is working to help countries in the Middle East integrate into an interconnected region, and finally, he talked about values. “Just as we always strive to perfect our own democracy at home, we will always raise concerns regarding human rights and fundamental freedoms in our engagements around the world, including in the Middle East,” he said. Sullivan noted that U.S. values include women's rights and the ability to criticize leaders without fear. Enabling populations to unleash their full potential means religious tolerance and protection of minorities. It means pressure on other countries to acknowledge freedom, and it means remaining a key source of humanitarian aid. As if in illustration of regional partnerships, today Saudi Arabia and the United States issued a joint statement on the start of talks between the warring parties in Sudan. The statement emphasized regional alliances, noting: “The Kingdom of Saudi Arabia and the United States…would like to stress the efforts of the countries and organizations which supported these talks, including Quad countries (The Kingdom of Saudi Arabia, The United Arab Emirates, the United Kingdom, and the United States), the League of Arab States, and partners from the Trilateral Mechanism (UNITAMS [U.N. Integrated Transition Assistance Mission in Sudan], the African Union, the Intergovernmental Authority on Development).” The careful cultivation of allies and complicated pressures enabled Biden and Secretary of State Antony Blinken to pull together an international coalition to stand against Russian president Vladimir Putin’s invasion of neighboring Ukraine. The pressure of that coalition appears to be helping Ukrainian forces undermine Russia: today, in one of a series of videos, the leader of the mercenary Wagner Group that has been fighting for Putin, Yevgeny Prigozhin, expressed fury at the Kremlin for leaving his men without supplies and vowed to leave the key city of Bakhmut on May 10. Standing surrounded by corpses, he raged: “Those are soldiers we lost today. Their blood is still fresh…. They were someone’s sons or fathers. You, f*ckers, who don’t give us ammo, will burn in hell.” Prigozhin could simply be jockeying for power, but a less ambiguous sign that Russia is in trouble is that Belarus has set up new border controls for Russians trying to enter their borders. The slow, careful work of governance undertaken by the Biden administration is a very different thing than what is offered by members of a party whose goal for forty years was to slash government and to use the military to make the world conform to U.S. goals, and whose goal now seems to be to ram through minority rule without bothering to follow the laws. When asked about Iran’s attempt to develop a nuclear weapon, Sullivan implicitly criticized the impulsivity of the previous president, who abruptly pulled out of the Joint Comprehensive Plan of Action (JCPOA) to prevent Iran from acquiring nuclear capabilities. “[T]he best way to stop Iran from getting a nuclear weapon is an effective agreement that stops them from getting a nuclear weapon,” he said. He continued: “I regard the decision to pull out of the Iran nuclear deal, the JCPOA, without anything to replace it or any strategy to deal with it other than the imposition of sanctions—which we have continued and added to actually,” with concern. Today, Mississippi governor Tate Reeves illustrated the Republicans’ simplistic approach to governance when he announced his reelection campaign with a 12-second campaign video of his face superimposed on cowboy actor Clint Eastwood, shooting at Mexican “bandits.” The imagery tied directly into the history of the modern-day Republican Party, which rose on the image of the cowboy who would cut through the “socialism” of a government that used tax money to keep the playing field level and restore individual men to power. But that was always just an image, and now, shown up against the reality of the complicated and hard work of governance, it has become cartoonish.

—

LETTERS FROM AN AMERICAN

HEATHER COX RICHARDSON

#Steve Brodner #Kevin McCarthy #Letters From An American #Heather Cox Richardson #accomplishments of the Biden Administration #competent Government

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jeffhirsch · 2 years

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Another Fed Rate Hike – S&P Has Been Up on Announcement Day Four in a Row

Persistent inflation remains a thorn in the market and for the Fed. According to the CME Group’s FedWatch Tool there is a 84.0% probability of a 0.75% increase and a 16.0% chance of a 1% hike tomorrow (as of approximately 4:45 pm est). Treasury bond yields, the U.S. dollar and mortgage rates have all risen briskly in anticipation of the Fed’s next rate increase while the stock market has languished.

In the chart above the 30 trading days before and after the last 115 Fed meetings (back to March 2008) are graphed. There are four lines, “All,” “Up,” “Down,” and “Rate Hike Days.” Up means the S&P 500 finished announcement day with a gain, down it finished with a loss or unchanged. In 115 Fed meetings, there have been just 13 rate increases. Four have occurred this year. These 13 increases are represented by Rate Hike Days. Of the 13 hike days, S&P 500 was down 7 times and up 6 times with an average gain of 0.63% on all 13. This year’s rate hikes were well received by S&P 500 with gains over 2% in March, May and July and a near 1.5% gain in June. On the day after the last 13 rate hike announcements, S&P 500 has declined 0.74% on average.

#$^GSPC #$SPY #$VOO #$SPXL #$SPXS #$FED

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newstfionline · 2 years

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Saturday, July 16, 2022

There’s a massive housing shortage across the U.S. (NPR) Danielle and Colin Lloyd spent the past year trying to buy a house in Atlanta, which went about as you’d expect these days. “There is just nothing in this whole area, just nothing,” says Danielle. The couple was looking for a place with at least a small yard and space for their three young kids. Meanwhile, their landlord was about to raise their rent by $450 a month, which also was caused by the same problem—not enough homes to rent or buy. Home prices are up more than 30% over the past couple of years, making homeownership unaffordable for millions of Americans. Rents are rising sharply too. The biggest culprit is this historic housing shortage. Strong demand and low supply mean higher prices. Part of the problem goes back to the last housing crash, which happened around 2008. After that, many homebuilders went out of business, and economists say we didn’t build enough for a decade.

A broken child care system (NPR) Child care provider Damaris Mejia is about to get the biggest pay raise of her life, starting this summer: the District of Columbia will send her and her co-teachers each a big check, between $10,000 and $14,000. At last, “I will have happy teachers!” she says, laughing. It’s part of a broader push—made more urgent by the pandemic—as D.C. and dozens of states try different ways to fix a child care system that is badly broken. Wherever the money comes from, advocates across the country say something must be done to ease the fundamental challenge of providing care families can afford, while allowing providers to earn a living. For years, families and providers have struggled with a system the U.S. Treasury Department calls a market failure. President Biden proposed a major long term investment to raise the wages of child care providers, and make it affordable or even free for working families. But that plan remains sidelined in Congress. “Our early learning system is in a really fragile state,” says Kimberly Perry, executive director of the advocacy group DC Action.

The military relies on advanced semiconductors. The U.S. doesn’t make any. (NYT) The most advanced category of mass-produced semiconductors—used in smartphones, military technology and much more—is known as 5 nm. A single company in Taiwan, known as TSMC, makes about 90 percent of them. U.S. factories make none. The U.S.’s struggles to keep pace in semiconductor manufacturing have already had economic downsides: Many jobs in the industry pay more than $100,000 a year, and the U.S. has lost out on them. Longer term, the situation also has the potential to cause a national security crisis: If China were to invade Taiwan and cut off exports of semiconductors, the American military would be at risk of being overmatched by its main rival for global supremacy. For these reasons, a bipartisan group of senators and the Biden administration negotiated a bill last summer that included $52 billion to jump-start the domestic semiconductor industry. But the House andthe Senate can’t agree on the bill. The standoff has become another example of dysfunctional congressional politics weakening the U.S.’s global standing.

988 Hotline Launches Those seeking support during a mental health or emotional crisis may dial 988 to connect to a nationwide support network beginning tomorrow. The transition to a simplified three-digit number is meant to increase access to the National Suicide Prevention Lifeline and will operate similar to 911. The move was facilitated by almost $300M in federal funding to both expand telephone infrastructure and increase call center staff. Via the network, trained counselors at more than 180 centers will be available over phone, text, or chat—users may call on behalf of themselves or others. The current 10-digit number has received more than 20 million calls since it was launched in 2005. Suicide was one of the three leading causes of death in the US for those between 10 and 24 years of age in 2020 and claimed nearly 46,000 lives that year—almost double the number of homicides.

Russian missiles kill at least 23 in Ukraine, wound over 100 (AP/1440) Russian missiles struck a city in central Ukraine on Thursday, killing at least 23 people and wounding more than 100 others far from the front lines, Ukrainian authorities said. Ukraine’s president accused Russia of deliberately targeting civilians in locations without military value. Officials said Kalibr cruise missiles fired from a Russian ship in the Black Sea damaged a medical clinic, offices, stores and residential buildings in Vinnytsia, a city 268 kilometers (167 miles) southwest of the capital, Kyiv. innytsia, a city with a prewar population of 370,000, has seen a flood of refugees from the war-torn east since the start of the war. Russia has not confirmed the attack, though military officials reportedly claimed the building was targeted for harboring “Ukrainian Nazis.” The UN reports nearly 5,000 civilians have been killed in the conflict, though some estimates say the number is far higher.

Pakistan nears IMF deal (Foreign Policy) If it weren’t for Sri Lanka and Afghanistan, Pakistan would be suffering South Asia’s worst economic crisis. Heavily indebted and grappling with rapidly dwindling foreign reserves, it faces similar problems to Sri Lanka, though not as acute. This week brought good news: Islamabad has reached an agreement with the IMF for a new funding package. In recent weeks it has taken the steps the IMF would want prior to reaching a deal: It released an austerity budget and raised electricity tariffs and gas prices. The general population, already hammered by high prices, won’t be pleased about having to bear the brunt of additional austerity spending necessitated by the IMF deal.

Wickremesinghe becomes interim Sri Lankan president (AP) Prime Minister Ranil Wickremesinghe was sworn in as Sri Lanka’s interim president Friday until Parliament elects a successor to Gotabaya Rajapaksa, who resigned after mass protests over the country’s economic collapse forced him from office. Wickremesinghe in a televised statement said that in his short term, he will initiate steps to change the constitution to clip presidential powers and strengthen Parliament. He also said he will restore law and order and take legal action against “insurgents.” Referring to clashes near Parliament on Wednesday night when many soldiers were reportedly injured, Wickremesinghe said true protesters will not get involved in such actions. Protesters who had occupied government buildings retreated Thursday, restoring a tenuous calm in the capital, Colombo. But with the political opposition in Parliament fractured, a solution to Sri Lanka’s many woes seemed no closer. The nation is seeking help from the International Monetary Fund and other creditors, but its finances are so poor that even obtaining a bailout has proven difficult, Wickremesinghe recently said.

China’s economy shrinks 2.6% during virus shutdowns (AP) China’s economy contracted in the three months ending in June compared with the previous quarter after Shanghai and other cities shut down to fight coronavirus outbreaks, but the government said a “stable recovery” is under way after businesses reopened. The world’s second-largest economy shrank by 2.6%, down from the January-March period’s already weak 1.4%, official data showed Friday. Anti-virus controls shut down Shanghai, site of the world’s busiest port, and other industrial centers starting in late March, fueling concerns global trade and manufacturing might be disrupted. Millions of families were confined to their homes, depressing consumer spending.

Biden arrives in Bethlehem for Abbas meeting (AP) President Joe Biden has arrived in the biblical town of Bethlehem in the occupied West Bank for talks with Palestinian President Mahmoud Abbas. The brief meeting with the Palestinian leader comes after two days of nonstop talks with Israeli leaders. Biden is then to continue to Saudi Arabia for talks with Arab leaders. While voicing support for a Palestinian state, Biden is not expected to float any new diplomatic initiatives during his visit. Palestinian officials have expressed disappointment over the U.S. inability to restart peace talks. On his way from Jerusalem, Biden’s motorcade passed by a billboard posted by an Israeli human rights group saying, “Mr. President, this is apartheid.” Human rights groups say Israel’s treatment amounts to apartheid. Israel rejects the allegation as an attack on its legitimacy.

Biden heads to Saudi Arabia (Reuters/Foreign Policy) President Joe Biden will discuss energy supply, human rights, and security cooperation in Saudi Arabia on Friday. Biden famously pledged to make Saudi Arabia “a pariah” during a campaign debate, and took some of that energy into office: He declassified a U.S. intelligence report linking Mohammed bin Salman to the killing of Saudi dissident Jamal Khashoggi, froze U.S. offensive arms sales to the kingdom (for now), declared an end to U.S. support for Saudi operations in the war in Yemen and—much to the crown prince’s annoyance—has only dealt with King Salman, the current head of state if only in name. Mohammed bin Salman for his part has not tried too hard to cozy up to a man he seems to have wished had lost the 2020 election. He has reportedly snubbed Biden’s calls, shouted at U.S. National Security Advisor Jake Sullivan, and (so far) refused Biden’s pleas to pump more oil to help bring down prices. He’s also more than hedged his bets on U.S. politics: The fund he oversees has invested $2 billion in a company run by Jared Kushner, Trump’s son-in-law. So if there is no love lost between the two men, today will show how much the crown prince wants to invest in the relationship.

#headlines #news

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swldx · 18 days

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12095Khz 0359 7 APR 2024 - BBC (UNITED KINGDOM) in ENGLISH from TALATA VOLONONDRY. SINPO = 55344. English, ID@0359z pips and newsroom preview. @0401z World News anchored by Neil Nunes. Rwandans will on Sunday mark 30 years since a genocide orchestrated by Hutu extremists tore apart their country, as neighbours turned on each other in one of the bloodiest massacres of the 20th century. The killing spree, which lasted 100 days before the Rwandan Patriotic Front rebel militia took Kigali in July 1994, claimed the lives of around 800,000 people, largely Tutsis but also moderate Hutus. Tens of thousands of Israelis have rallied against Israeli PM Benjamin Netanyahu, demanding a Gaza hostage deal. The rallies in Tel Aviv and other cities came after the Israeli Defense Forces recovered the body of hostage Elad Katzir. Protesters chanted "elections now", and "Elad, we're sorry", local media reported. Later, police forcibly dispersed the Tel Aviv crowd. UN Secretary-General Antonio Guterres was "alarmed" by the raid of the Mexican embassy in Quito, his spokesman, Stephane Dujarric said. Guterres urged both countries involved to show "moderation" and "solve their differences through peaceful means." Mexico is cutting ties with Ecuador after police stormed the Mexican embassy in Quito to arrest former Ecuadorian Vice-President Jorge Glas. Mexican President Andrés Manuel López Obrador said they had "forcibly entered" the embassy in a "flagrant violation of international law". Glas took refuge in the embassy last December after Ecuador issued an arrest warrant against him for alleged corruption. US Treasury Secretary Janet Yellen and Chinese Premier Li Qiang sounded a hopeful note on bilateral relations at the start of their Sunday meeting in Beijing. The U.S.-China relationship can only move forward with direct and open communication, Yellen told Li, after arriving in the Chinese capital from the southern city of Guangzhou. Populist Peter Pellegrini has been elected president of Slovakia, succeeding the liberal Zuzana Caputova. Mr Pellegrini, 48, defeated the pro-Western Ivan Korcok, a former diplomat, with 53% of the vote. A former prime minister, he is an ally of Prime Minister Robert Fico, and shares the PM's dovish attitude towards Russia. In the Philippines, religious leader Apollo Quiboloy said that he will be ready to face his pending cases, as long as no foreign nation interferes. Currently, arrest warrants have been filed against Quiboloy and his other co-accused companions for their alleged involvement in sexual abuse and child abuse cases. The FBI in the US also has a wanted poster against him for several cases, including sexual offenses, and fraud and coercion. Republican presidential candidate Donald Trump's campaign said a major fundraiser in Florida on Saturday raked in a massive $50.5 million as the former president sought to replenish diminished coffers in his rematch against Democrat Joe Biden. A British man is set to become the first person in history to run the entire length of Africa this weekend. Russell Cook set off on an incredible mission in April last year, with much of social media captivated on his journey ever since. After beginning his journey at the most southerly point in South Africa, Cook has made his way through the likes of Namibia, Angola and the Republic of Congo. The Brit set upon completing 360 marathons in 240 days and successfully run across the length of Africa. @0406z "The Newsroom" begins. 250ft unterminated BoG antenna pointed E/W w/MFJ-1020C active antenna (used as a preamplifier/preselector), Etón e1XM. 250kW, beamAz 315°, bearing 63° . Received at Plymouth, MN, United States, 15359KM from transmitter at Talata Volonondry. Local time: 2259.

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stockmarketanalysis · 3 months

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Navigating the Bond Market: Understanding Types and Instruments

Introduction:

The bond market, often referred to as the fixed-income market, is a vital component of the global financial system, providing a platform for governments, corporations, and other entities to raise capital by issuing debt securities. Bonds play a crucial role in diversified investment portfolios, offering investors a source of income, capital preservation, and portfolio diversification. In this article, we explore the bond market, its definition, types, and the various instruments used within it.

Definition of the Bond Market:

The bond market encompasses the buying and selling of debt securities, known as bonds, issued by governments, municipalities, corporations, and other entities. Bonds are essentially IOUs, where the issuer borrows money from investors in exchange for periodic interest payments (coupons) and the repayment of the principal amount (face value) at maturity. The bond market provides a means for investors to lend money to issuers in exchange for a fixed or variable rate of return.

Types of Bonds:

Government Bonds: Issued by national governments to finance public spending initiatives, infrastructure projects, or budget deficits. Government bonds are typically considered low-risk investments, as they are backed by the full faith and credit of the issuing government. Examples include U.S. Treasury bonds, German bunds, and Japanese government bonds (JGBs).

Corporate Bonds: Issued by corporations to raise capital for expansion, acquisitions, or working capital needs. Corporate bonds offer higher yields than government bonds to compensate investors for the additional credit risk associated with corporate issuers. They can be further classified into investment-grade bonds (issued by financially stable companies) and high-yield bonds (issued by lower-rated or financially distressed companies), also known as "junk bonds."

Municipal Bonds: Issued by state and local governments to finance public projects such as schools, hospitals, and infrastructure improvements. Municipal bonds are exempt from federal income tax and may also be exempt from state and local taxes, making them attractive to investors seeking tax-advantaged income.

Agency Bonds: Issued by government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. Agency bonds are not directly backed by the government but are implicitly guaranteed by the government-sponsored entity, leading to slightly higher yields than Treasury securities.

Asset-Backed Securities (ABS): Backed by pools of underlying assets such as mortgages, auto loans, or credit card receivables. ABS issuers package these assets into securities and sell them to investors, with cash flows from the underlying assets used to make interest and principal payments to bondholders.

Convertible Bonds: Hybrid securities that can be converted into a predetermined number of common stock shares at the option of the bondholder. Convertible bonds offer investors the potential for capital appreciation if the issuer's stock price rises, while still providing downside protection through fixed income payments.

Instruments Used in the Bond Market:

Treasury Bonds: Long-term debt securities issued by the U.S. Department of the Treasury with maturities ranging from 10 to 30 years. Treasury bonds are considered the benchmark for pricing other bonds and are widely regarded as one of the safest investments in the world.

Corporate Bonds: Issued by corporations to raise capital, corporate bonds come in various forms, including investment-grade bonds and high-yield bonds. They typically pay higher yields than government bonds to compensate investors for the additional credit risk associated with corporate issuers.

Municipal Bonds: Debt securities issued by state and local governments to finance public projects. Municipal bonds offer tax advantages to investors, making them attractive for individuals in higher tax brackets seeking tax-exempt income.

Bond Mutual Funds: Pooled investment vehicles that invest in a diversified portfolio of bonds. Bond mutual funds provide investors with exposure to a wide range of fixed-income securities, including government, corporate, and municipal bonds, and are managed by professional portfolio managers.

Exchange-Traded Funds (ETFs): Investment funds that trade on stock exchanges and hold a portfolio of bonds or other fixed-income securities. Bond ETFs offer investors liquidity, transparency, and diversification benefits, allowing them to access the bond market with ease and flexibility.

Bond Futures and Options: Derivative instruments that allow investors to speculate on or hedge against changes in bond prices or interest rates. Bond futures contracts and options contracts are traded on organized exchanges and provide exposure to fixed-income markets without the need to own the underlying securities.

Conclusion:

The bond market plays a crucial role in the global financial system, providing issuers with a source of capital and investors with income, capital preservation, and portfolio diversification. With its diverse array of bond types and instruments, the bond market offers opportunities for investors of all risk profiles and investment objectives. By understanding the different types of bonds and the various instruments used in the bond market, investors can make informed decisions and construct well-diversified portfolios that meet their financial goals and objectives.

#stock market #stock trading #finance #investing stocks #stock

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palmoilnews · 3 months

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GRAINS-Soybeans drop to 27-month low on stronger dollar, dismal demand SINGAPORE, Feb 5 (Reuters) - Chicago soybeans lost more ground on Monday, with prices dropping to their lowest levels in more than two years as a strengthening dollar and lacklustre demand for U.S. cargoes provided headwinds to the market. Corn slid to a one-week low, while wheat fell for a second session. FUNDAMENTALS The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 was down 0.2% at $11.85-3/4 a bushel, as of 0115 GMT, after sliding earlier in the session to its lowest since November 2021 at $11.83 a bushel. Corn Cv1 fell 0.4% to $4.41 a bushel, the weakest since Jan. 30, and wheat Wv1 lost 0.9% to $5.94-1/2 a bushel. The soybean market is facing pressure as the U.S. dollar index jumped to a seven-week high on Friday after data showed that employers added far more jobs in January than expected, reducing the chances of near-term Federal Reserve interest rate cuts. A stronger dollar makes the greenback-priced products expensive for buyers holding other currencies. Soybeans faced additional pressure from poor export demand. U.S. soybean export sales in the week ended Jan. 25 totalled just 165,800 metric tons, the U.S. Department of Agriculture (USDA) said on Thursday, the smallest weekly tally since May. The market shrugged off adverse weather conditions in Argentina. A dry heat wave in Argentina has prompted warnings over growing conditions for grains and the need for rain if soy and corn crops are going to stay on track for bumper harvests. The South American country, one of the world's top processed soy exporters and number three for corn, is recovering from a drought-hit harvest last season with the El Nino weather pattern bringing better rains. Corn is expected to be a record harvest. In news which is delaying cargo movement, more ships carrying grain were diverted from the Suez Canal to routes around the Cape of Good Hope this week as attacks on shipping in the Red Sea continued. About 7 million metric tons per month of grain cargoes usually transit the Suez Canal into the Red, but that has dropped significantly as Iran-backed Houthi militants have continued attacks on shipping despite U.S.-led air strikes on Houthi positions in Yemen. Large speculators increased their net short position in CBOT corn futures in the week ended Jan. 30, regulatory data released on Friday showed. The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and increased their net short position in soybeans. MARKET NEWS Treasury yields jumped, the dollar surged and world equities rallied on Friday after a blowout U.S. jobs report scuttled any lingering expectations of a near-term cut in interest rates and highlighted a strong economy.

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dontmeantobepoliticalbut · 1 year

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A number of Senate Republicans on Tuesday rejected the idea of lifting the debt ceiling temporarily to buy Congress more time to negotiate a larger measure with the White House that would prevent a default.

On Monday, Treasury Secretary Janet Yellen said the deadline to prevent a default on the nation's debt could be as early as June 1, four days before her previous prediction. The U.S. hit the statutory borrowing limit in January and has been using “extraordinary measures” to pay the bills.

Several GOP lawmakers said that pushing back the deadline will only shift negotiations into the future because Washington is known for addressing these crises at the last minute.

"If she [Yellen] would have said June 15, it would have been done closer to June 15," said Sen. Mike Rounds, R-S.D. "If she would have said July 1, it would have been done closer to July 1. This will always go down to the wire when you have divided government."

Sen. Thom Tillis, R-N.C., agreed it's a "silly" idea, telling reporters: "We all work around deadlines here. If we do a short-term extension, it means we won’t get into negotiations in earnest until three or four weeks before whatever the new extension is. That’s how this place works."

"We’ve been kicking the can down the road for four and a half years since I’ve been here," said Sen. Mike Braun, R-Ind. "We need to at least agree to something without delaying it."

Asked if he would be open to a short-term debt ceiling increase, Sen. Josh Hawley, R-Mo., said, "No, absolutely not. That's just a bunch of gimmicks."

Sen. Jerry Moran, R-Kan., also said that it's a "mistake" because it brings "more uncertainty."

Senate Minority Whip John Thune, R-S.D., also poured cold water over a short-term extension, saying it isn’t a good idea and cast doubt on whether it’d even have the votes.

“I would prefer that we get this done the first time. That always gets dicey. And, frankly, I don’t even know if there’d be the votes for that,” Thune told reporters. “I think there’s going to have to be a really earnest effort made to try and negotiate something that can get passed by the deadline.”

Sen. Rick Scott, R-Fla., meanwhile, said he was open to a 30-day extension to lift the debt limit.

While members of Congress are not actively pursuing a short-term extension at the moment, Congress has passed such measures in recent debacles over the debt ceiling to allow more time for talks.

Senate Democratic leaders are keen on sticking to the White House's demand to pass a clean debt ceiling increase.

"Our position remains the same," Senate Majority Leader Chuck Schumer, D-N.Y., said on the Senate floor Tuesday. "Both parties should do what we have done in the past, the last three times default faced us. Both parties should pass a clean bipartisan bill to avoid default together."

Schumer lashed out at House Republicans and specifically Speaker Kevin McCarthy, R-Calif., for the debt limit bill they passed last week in the lower chamber. Schumer said McCarthy "caved to extremists" in agreeing to the legislation that would slash federal spending.

McCarthy, in a statement responding to Yellen's letter, said Monday that "House Republicans did their job." He also criticized President Joe Biden, saying he "has refused to do his job."

McCarthy did, however, accept Biden's invitation to meet with him and other top congressional leaders at the White House on May 9 to discuss the debt ceiling, a source familiar with the call confirmed.

House Democrats are also preparing a plan to pass a clean debt ceiling bill through a special rule, which could be brought to the floor without support from GOP leadership. It would, however, need all Democratic House members to vote for it — as well as a handful of Republicans — and at least 60 Senators to defeat a filibuster in the Senate.

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xtruss · 3 months

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Foreign Affairs: “Demented Genocidal Biden” Expected To Issue Executive Order Targeting “Illegal European ‘Fake Zionist 🐖 🐖 🐷 Jews’ Who Become Isra-helli Settlers” In West Bank

The Move Comes as the Demented Genocidal President is Under Growing Pressure to be Tough on Illegal Regime of Isra-hell as it Wages War in the Gaza Strip.

— By Nahal Toosi and Alexander Ward | February 02, 2024 | Politico

Demented Genocidal President Joe Biden speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington, Jan. 30, 2024. | Andrew Harnik/AP

President Joe Biden is expected to issue an executive order Thursday that aims to punish Israeli settlers who have been attacking Palestinians in the occupied West Bank, according to documents seen by POLITICO, two U.S. officials and a congressional aide.

As part of the rollout, the Biden administration will announce it is imposing sanctions on individuals who have engaged in such violence, which has killed or displaced many Palestinians from their lands, the documents say.

The National Security Council declined to Comment.

The order comes as Biden is under growing pressure, including from Democrats, to be tougher on Israel as critics say its military campaign against Palestinians in the Gaza Strip is a disproportionate reaction to the Hamas attack of Oct. 7.

It also comes as Biden is due Thursday to visit Michigan, a battleground state this election year that is home to many Arab Americans furious with his approach to the Israel-Hamas war.

Senior White House officials on Wednesday briefed Ron Dermer, a close confidant of Israeli Prime Minister Benjamin Netanyahu, on the move during his visit to Washington, the congressional staffer said.

Far-right Israeli settlers in the West Bank have for years staged attacks on many of the roughly 3 million Palestinians in the territory, often aimed at seizing land that the Palestinians claim for a future state. Such attacks spiked after the Oct. 7 Hamas attack, leading to the emptying of entire Palestinian villages.

At the same time, Biden has faced intense pressure to appear more even-handed in the conflict as Hamas-controlled agencies have reported more than 25,000 Palestinians have been killed in Israel’s military campaign against the militant group.

In November, Biden directed top U.S. officials to develop options for punishing violent Israeli settlers. The memo sent to Cabinet officials like Secretary of State Antony Blinken and Treasury Secretary Janet Yellen broadly defined who could be a target.

Reports suggest Isra-helli sovereignty would not be applied to Palestinians living in annexed areas

They included people or entities that “have directly or indirectly engaged in actions or policies that threaten the security or stability of the West Bank,” take “actions that intimidate civilians in the West Bank with the purpose or effect of forcing displacement actions in the West Bank,” or make moves “that constitute human rights abuses or violations and actions that significantly obstruct, disrupt or prevent efforts to achieve a two-state solution.”

In December, Blinken announced U.S. visa restrictions on a number of extremist Israeli settlers.

Hundreds of thousands of Israeli settlers live in the West Bank, and their presence comes with a large amount of Israeli security, which means even less space for Palestinians to live. Many Israeli settlers do not believe in permitting a Palestinian state to exist. Such sentiments are more widespread among Israelis since the Hamas attack on their country, which killed 1,200 people.

Construction in settlements could become easier if they officially become part of Illegal Regime of the Zionist Cunts, Isra-hell

But other than rhetorical pleas, top officials in the Biden administration had resisted pressuring Israel to rein in the settlers before the Oct. 7 attack. Such inaction was in line with Biden’s preference of trying to convince Israeli leaders through carrots instead of sticks, as well as worries about seeming to interfere with internal Israeli politics.

If past patterns hold, the new sanctions are likely to be more punishing in that they will likely include freezes on financial assets the settlers may hold in the United States, among other penalties.

The State and Treasury Departments are expected to issue details Thursday on the sanctions and how financial institutions should approach the issue, according to the documents.

The issue of settlements has long been a source of friction between Israelis and Palestinians

The Biden administration has stepped up support for Palestinians after staunchly backing Israel’s retaliation against Hamas in Gaza, most notably by pushing for more humanitarian aid to enter the enclave.

In recent weeks, as Netanyahu’s government has stiff-armed American attempts to wind down the war and the U.S. develops “day after” scenarios, Washington has shifted its approach to weigh Palestinian concerns more.

Terrorist War Criminal Zionist 🐖 Cunt Benjamin SATAN-YAHU has long championed Jewish settlements in the occupied West Bank

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mariacallous · 11 months

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The recent increase in mortgage rates, which has made buying a house or borrowing against home equity more expensive, in part reflects a broad increase in rates on long-term U.S. Treasury securities. But the increase in 30-year fixed mortgage rates over the past year has been unusually large relative to rates on long-term Treasury securities, which may suggest that mortgage rates are being pushed up by temporary factors. In particular, as the path of future interest rates becomes more certain, mortgage rates could fall by roughly half a percentage point.

Why have mortgage rates risen by so much more than yields on 10-year Treasury bonds? We find that much of the increase in this spread can be attributed to two factors: interest rates on Treasury bonds with maturities less than 10 years are higher than rates on 10-year Treasury bonds and mortgage prepayment risk has increased. Higher interest rates on shorter term bonds matter because mortgages are generally held for fewer than 10 years. Prepayment risk is higher than in recent decades largely because of uncertainty around future interest rates. Both these factors are likely to continue to push up mortgage rates over the next few quarters.

Factors Contributing to the Spread between Mortgage and 10-Year Treasury Bond Rates

Mortgage rates reflect the cost of using a mortgage to buy a home or tap home equity and thus affect the price of real estate and housing wealth. To the degree that the Federal Reserve’s tightening of monetary policy pushes up mortgage rates, this channel is an important way in which tighter monetary policy slows the economy and dampens inflation. As shown in figure 1, there has been a long downward trend in mortgage rates (dark green) over the past forty years in line with the rate of 10-year Treasury bonds (light green). However, the spread between mortgage rates and Treasury bond rates fluctuates for various reasons, including changes in credit conditions and interest rate uncertainty.

Mortgage rates generally track the rate on 10-year Treasury bonds because both instruments are long term and because mortgages have relatively stable risk. Nonetheless, to compensate investors for the higher risk of mortgages, rates for fixed mortgages have historically been, on average, one to two percentage points higher than Treasury yields. As rates on 10-year Treasury bonds have risen since mid-2020, mortgage rates have risen as well. But, over the past year, mortgage rates have risen by a surprisingly large amount relative to the 10-year Treasury rates, putting more restraint on borrowing conditions and the housing market.

Figure 2 shows the spread between 30-year fixed mortgage rates and 10-year Treasury rates from 1997 through May 2023. The peak spread during the housing crisis was 2.9 percentage points, reflecting a sharp tightening of credit conditions and significant disruptions in the financial markets that fund mortgages. The spread rose again during the COVID-19 pandemic, peaking in 2020 at 2.7 percentage points, reflecting shorter-lived disruptions in financial markets and concerns among lenders and investors in mortgage assets. Recently, the difference between 30-year fixed mortgage rates and 10-year Treasury rates has widened to an unusual degree. Since October 2022, the spread has hovered near the levels last seen during the housing crisis.

To explain why the spread between 30-year fixed mortgage rates and 10-year Treasury rates is so large, figure 3 parses it into three components:

The spread between the rate charged to borrowers and the yield on mortgage-backed securities (MBS), referred to as the primary-secondary spread, which is generally stable when the costs of mortgage issuance are stable (blue).

A combination of an adjustment for mortgage duration and prepayment risk (light green). The duration adjustment reflects that mortgages are generally held for fewer than 10 years and are more closely related to rates on a 7-year rather than a 10-year Treasury security. Prepayment risk reflects the probability that a future drop in rates induces borrowers to exercise their option to refinance.

The remaining spread, which reflects changes in demand for mortgage-related assets after adjusting for prepayment risk (purple).

Given estimates of 1 and 3, we are able to estimate 2 by subtraction.

Factors Driving Higher Mortgages Rates

Using this framework, we find that the biggest reason that the mortgage spread to the 10-year Treasury rate is higher relative to other periods is due to the duration adjustment and prepayment risk. Since mortgages are typically held for fewer than 10 years, they have a shorter duration than 10-year Treasuries. Since early 2022, and for the first time since 2000, the rate on 7-year Treasury securities is higher than the rate on 10-year Treasury securities. In particular, from 2015 through 2019, the 10-year rate exceeded the 7-year rate by about 0.15 percentage point on average. Instead, year-to-date, the 7-year rate has exceeded the 10-year rate by about 0.10 percentage point, on average. As a result, the duration adjustment explains roughly a quarter of a percentage point of the unusually large spread shown in figure 3.

In addition, prepayment risk is higher now than in previous years. Borrowers with mortgages are affected differently if interest rates rise or fall. If rates rise, mortgage holders can simply choose to keep their mortgages at the previously issued rate. Instead, if rates fall, mortgage holders can prepay and refinance their mortgages at lower rates. That means that if there is a wider range of uncertainty around the future of interest rates—even if that range is symmetrical—there is a higher probability that current mortgage holders will find it advantageous to refinance in the future. As it happens, measures of interest rate uncertainty (such as the MOVE index, or Merrill Lynch Option Volatility Estimate Index) are currently higher than before the pandemic. Moreover, when rates are very low as they were in early 2020, there is only so much lower they can go, and thus borrowers and lenders alike see a smaller likelihood of a new mortgage being refinanced to a lower rate in the future. Instead, when mortgage rates are higher, as they are now, there are more possible future outcomes where rates fall and mortgages are refinanced. In other words, mortgage lenders want to protect against the possibility that mortgages issued recently will be refinanced to lower rates. As a result, lenders charge a premium.

To get a sense of how much this factor is pushing up mortgage rates to an unusual degree, it is useful to compare the estimated contributions of the duration adjustment and prepayment risk now versus the late 1990s, which was before the housing bubble, the housing crisis, the slow recovery from the 2008 recession, and the COVID-19 pandemic. In the late 1990s, 10-year Treasury rates were moderately higher than today but, like today, the 7-year rate was higher than the 10-year rate. At that time, the estimated contribution of the duration adjustment and prepayment risk to the mortgage rates spread was roughly a half percentage point lower than today.

While the largest factors driving high mortgage rates are the duration adjustment and prepayment risk, another reason mortgage rates have been unusually high is because of a slightly elevated primary-secondary spread. Lenders often finance mortgages by selling claims to MBS, which are pools of mortgage loans that are guaranteed by government-sponsored enterprises. The spread between the primary mortgage rate to borrowers and the secondary rate on MBS reflects the costs of issuing mortgages. For example, originators have to bear interest rate risk between the time an interest rate on a mortgage is set and when it is closed. The primary-secondary spread jumped by 0.3 percentage points toward the end of 2022, but has retraced most of the runup since then.

Finally, the component after accounting for those factors is also somewhat elevated relative to before the pandemic. This component, referred to as the option-adjusted spread (and “other” in figure 3) is likely elevated due to reduced demand in the MBS market. In recent years, the Fed has reduced its holdings of MBS. In addition, private investors in MBS have readjusted portfolios in response to an increase in interest rates. This was particularly true when long-term Treasury rates jumped in the fourth quarter of 2022; demand for MBS has remained cool since then. In addition, holders of MBS may be more pessimistic about prepayment risk than empirical models reflect, which could be the case if investors think that future mortgage rates are more likely to be a little lower relative to current rates rather than a little higher.

Conclusions

Higher mortgage rates are probably here to stay for a while, but a reduction in uncertainty could meaningfully bring down mortgage rates. If interest rate uncertainty returns to more normal levels and prepayment risk fell back to levels seen in the late 1990s, rates could fall – perhaps by half a percentage point. Nonetheless, one factor keeping rates higher that is likely to persist for the next several quarters is dampened demand for MBS as the market for mortgage financing continues to recalibrate to restrictive monetary policy and higher interest rates.

Until the economy slows to a more sustainable pace, uncertainty will remain. How will a slowdown affect house prices? How much will it reduce the income of borrowers? Will financial markets remain stable? Until such questions are resolved, unusually high mortgage rates will probably continue to cool the housing market and dampen borrowing against housing equity.

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dreaminginthedeepsouth · 11 months

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LETTERS FROM AN AMERICAN

May 30, 2023

HEATHER COX RICHARDSON

MAY 30, 2023

“[O]ne of the things that I hear some of you guys saying is, ‘Why doesn’t Biden say what a good deal it is?’” President Joe Biden said to reporters yesterday afternoon before leaving the White House on the Marine One helicopter. “Why would Biden say what a good deal it is before the vote? You think that’s going to help me get it passed? No. That’s why you guys don’t bargain very well.”

Biden’s unusually revealing comment about the budget negotiations was actually a statement about his presidency. Unlike his Republican opponents, he has refused to try to win points by playing the media and instead has worked behind the scenes to govern, sometimes staying out of negotiations, sometimes being central to them.

The result has been, as Daily Beast columnist David Rothkopf summarized today, historic. Biden has worked to replace 40 years of supply-side economics with policies to rebuild the nation’s economy and infrastructure by supporting ordinary Americans. The American Rescue Plan gave the United States a faster economic recovery from the COVID pandemic than any other major economy. The Bipartisan Infrastructure Law has already funded more than 32,000 projects in more than 4,500 communities in all 50 states, Washington D.C., and U.S. territories.

The Inflation Reduction Act made the biggest investment in addressing climate change in our history, and according to University of Washington transportation analyst Jack Conness, it and the CHIPS and Science Act have already attracted over $220 billion in private investment, much of it going to Republican-dominated states: Tennessee, Nevada, North Carolina, and Oklahoma have each attracted more than $4 billion; Ohio, more than $6 billion; Arizona, more than $7 billion; South Carolina, more than $9 billion; and Georgia, more than $13 billion.

Victoria Guida in Politico yesterday reported that the reordering of the economy under Biden and the Democrats has reversed the widening income gap between wage workers and upper-income professionals that has been growing for the past 40 years. The pay of those making an average of $12.50 an hour grew by almost 6% from 2020 to 2022, even after inflation.

Those gains are now at risk as pandemic measures end and the Fed raises interest rates to bring down inflation, although the wage increases are only a piece of the inflation puzzle: Talmon Joseph Smith and Joe Rennison of the New York Times today reported that companies raising their prices to “protect…profits” are “adding to inflation.” In other words, companies pushed prices beyond normal profit margins during the pandemic and the economic recovery, then maintained those higher profit margins with the Russian invasion of Ukraine, and continue to maintain them now.

The fight over the debt ceiling is both an example of the different approaches to negotiation on the part of Biden and Republicans like House speaker Kevin McCarthy (R-CA), and part of the larger question about the direction of the country.

On January 13, 2023, Treasury Secretary Janet Yellen warned McCarthy that the Treasury was about to hit the borrowing limit established by Congress and that she would have to resort to extraordinary measures in order to meet obligations until Congress raised the debt ceiling.

On March 9, as part of the usual budget process, Biden produced a detailed budget, which was a wish list of programs that would continue to build the country from the bottom up. He told McCarthy he would meet with the speaker as soon as he produced his own budget, which McCarthy could not do because the far-right House Freedom Caucus (these days being abbreviated as HFC) wanted extreme cuts to which other Republicans would never agree.

On April 26 the House Republicans passed a bill that would require $4.8 trillion in cuts but was quite vague about how it would do so apart from getting rid of much of the legislation the Democrats had just passed. HFC members said they would not raise the debt ceiling until the Senate passed their bill. That is, they would drive the United States into default, crashing the U.S. and the global economy, until the president and the Democrats agreed to their policies. Even then, they would raise it only until next spring, with the expectation that it would then become a key factor in the 2024 election.

Biden insisted all along that he would not negotiate over the debt ceiling, which pays for money already appropriated under the normal process of Congress and which Congress raised three times under former president Trump even as he added $7.8 trillion to the national debt. Biden said he would happily negotiate over the budget. McCarthy, meanwhile, was out in front of the cameras and on social media insulting Biden and insisting that it was Biden’s fault that talks took so long to get started.

Late Saturday, the two sides announced an agreement “in principle” to raise the debt ceiling for two years—clearing the presidential election. As the Washington Post’s Catherine Rampell noted, it protects current spending on Social Security, Medicare, and Medicaid; keeps tax rates as they are; increases spending on defense and veterans’ programs; leaves most other domestic spending the same; cuts a little from the expanded funding of the Internal Revenue Service; and tweaks both the permitting process for energy projects and the existing work requirements in the food assistance program.

As Rampell points out, “this much-ballyhooed ‘deal’ doesn’t seem terribly different from whatever budget agreement would have materialized anyway later this year, during the usual annual appropriations process, under divided government. To President Biden’s credit, the most objectionable ransoms that Republicans had been demanding are all gone.”

Now the measure has to get through both parties, with congressmembers back in Washington today after the holiday weekend. Freedom Caucus members are howling at the deal. Representative Chip Roy (R-TX) is threatening to bottle the measure up in the House Rules Committee, which decides what bills make it to the floor. The Freedom Caucus forced McCarthy to stack that committee with far-right extremists as part of his deal for the speakership (it has nine Republicans but only four Democrats on it). But Josh Marshall of Talking Points Memo suggests that McCarthy’s alliance with Representatives Jim Jordan (R-OH) and Marjorie Taylor Greene (R-GA) might pay off here, since the two have thrown their weight behind the measure.

Even if the measure does pass before the June 5 deadline when the Treasury runs out of money, it has had an important effect. As Rampell noted, it has weakened the United States. It has enabled both China and Russia to portray the U.S. as unstable and an unreliable partner. As if to prove that criticism, Biden had to cancel a trip to Australia and Papua New Guinea, where he was strengthening the Indo-Pacific alliances designed to weaken Chinese dominance of the region. (And Russia continues to involve itself in U.S. politics: today Tara Reade, the woman who in 2020 accused Biden of sexually assaulting her, appeared on Russian television next to alleged spy Maria Butina to say she has fled to Russia out of fear for her life in the U.S.)

Writing in Foreign Policy, Howard W. French sees a more sweeping problem with the debt ceiling fight: it “highlights America’s warped priorities.” “[W]hen a rich and powerful country finds it easier to cut back on the way that it invests in its people, in education, in science, and in making sure that the weakest among them are not completely left behind than to curtail useless and profligate weapons spending,” he said, “there are reasons to worry about the foundations of its power.”

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LETTERS FROM AN AMERICAN

HEATHER COX RICHARDSON

#debt limit crisis #crisis #Letters From An American #Heather Cox Richardson #political #US House of Representatives #budget #foreign policy #America's warped priorities

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