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  • Hurricane Idalia and Labor Day could send gas prices and inflation higher | CNN Business

    Hurricane Idalia and Labor Day could send gas prices and inflation higher | CNN Business

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    A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.


    New York
    CNN
     — 

    Labor Day — one of the busiest driving holidays in the US — is on the horizon, and so is Hurricane Idalia. That’s potentially bad news for gas prices.

    The storm, which is expected to make landfall in Florida as a Category 3 hurricane on Wednesday, could bring 100 mile-per-hour winds and flooding that extends hundreds of miles up the east coast. The impact could take gasoline refinery facilities offline and may limit some Gulf oil production and supplies. Plus, demand for gas is expected to surge as residents of the impacted areas evacuate.

    “Idalia… could pose risk to oil and gas output in the US Gulf,” wrote the Nasdaq Advisory Services Energy Team.

    The storm is expected to make landfall as drivers nationwide load into their vehicles for the Labor Day weekend, pushing up the demand for gasoline even further.

    All together it means the price of oil and gasoline could remain elevated well into the fall.

    Generally, summer demand for oil tends to wane in September, but so does supply as refineries shift from summer fuels to “oxygenated” winter fuels, said Louis Navellier of Navellier and Associates. Since the 1990s, the US has required manufacturers to include more oxygen in their gasoline during the colder months to prevent excessive carbon monoxide emissions.

    With the storm approaching, that trend may not play out.

    What’s happening: Gas prices are already at $3.82 a gallon. That’s the second highest price for this time of year since at least 2004, according to Bespoke Investment Group. (The only time the national average has been higher for this period was last summer, when prices hit $3.85 a gallon).

    Geopolitical tensions have been supporting high oil and gas prices for some time. Recently, increased crude oil imports into China, production cuts by Russia and Saudi Arabia and extreme heat set off a late-summer spike in gas prices. And the threat of powerful hurricanes could send them even higher.

    Analysts at Citigroup have warned that this hurricane season could seriously impact power supplies.

    “Two Category 3 or higher hurricanes landing on US shores could massively disrupt supplies for not weeks but months,” Citigroup analysts wrote in a note last week. In 2005, for example, gas prices surged by 46% between Memorial Day and Labor Day because of the landfall of Hurricane Katrina, according to Bespoke.

    What it means: The Federal Reserve and central banks around the world have been fighting to bring down stubbornly high inflation for more than a year. This week we’ll get some highly awaited economic data: The Fed’s preferred inflation gauge, the Personal Consumption Expenditures index, is due out on Thursday. But the task of inflation-busting is a lot more difficult when energy prices are high, and it’s even harder when they’re on the rise.

    The PCE price index uses a complicated formula to determine how much weight to give to energy prices each month, but they typically comprise a significant chunk of the headline inflation rate.

    “Crude oil price remains elevated, even after the surge at the start of the Russia-Ukraine War,” said Andrew Woods, oil analyst at Mintec, a market intelligence firm. “Energy prices have been a major contributor to persistently high inflation in the US, so the crude oil price will remain a watch-out factor for future inflation.”

    High oil and gas prices are one of the largest contributing factors to inflation. That’s bad news for drivers but tends to be great for the energy industry, as oil prices and energy stocks are closely interlinked.

    Energy stocks were trading higher on Monday. The S&P 500 energy sector was up around 0.75%. Exxon Mobil (XOM) was 0.85% higher, BP (BP) was up 1.36% and Chevron (CVX) was up 0.75%.

    OpenAI, will release a version of its popular ChatGPT tool made specifically for businesses, the company announced on Monday.

    OpenAI unveiled the new service, dubbed “ChatGPT Enterprise,” in a company blog post and said it will be available to business clients for purchase immediately.

    The new offering, reports my colleague Catherine Thorbecke, promises to provide “enterprise-grade security and privacy” combined with “the most powerful version of ChatGPT yet” for businesses looking to jump on the generative AI bandwagon.

    “We believe AI can assist and elevate every aspect of our working lives and make teams more creative and productive,” the blog post said. “Today marks another step towards an AI assistant for work that helps with any task, is customized for your organization, and that protects your company data.”

    Fintech startup Block, cosmetics giant Estee Lauder and professional services firm PwC have already signed on as customers.

    The highly-anticipated announcement from OpenAI comes as the company says employees from over 80% of Fortune 500 companies have already begun using ChatGPT since it launched publicly late last year, according to its analysis of accounts associated with corporate email domains.

    A multitude of leading newsrooms, meanwhile, have recently injected code into their websites that blocks OpenAI’s web crawler, GPTBot, from scanning their platforms for content. CNN’s Reliable Sources has found that CNN, The New York Times, Reuters, Disney, Bloomberg, The Washington Post, The Atlantic, Axios, Insider, ABC News, ESPN, and the Gothamist, among others have taken the step to shield themselves.

    American Airlines just got smacked with the largest-ever fine for keeping passengers waiting on the tarmac during multi-hour delays.

    The Department of Transportation is levying the $4.1 million fine, “the largest civil penalty that the Department has ever assessed” it said in a statement, for lengthy tarmac delays of 43 flights that impacted more than 5,800 passengers. The flights occurred between 2018 and 2021, reports CNN’s Gregory Wallace.

    In the longest of the delays, passengers sat aboard a plane in Texas in August 2020 for six hours and three minutes. The 105-passenger flight had landed after being diverted from the Dallas-Fort Worth International Airport due to severe weather, with the DOT alleging that “American (AAL) lacked sufficient resources to appropriately handle several of these flights once they landed.”

    Federal rules set the maximum time that passengers can be held without the opportunity to get off prior to takeoff or after landing, at three hours for domestic flights and four hours for international flights. Current rules also require airlines provide passengers water and a snack.

    American told CNN the delays all resulted from “exceptional weather events” and “represent a very small number of the 7.7 million flights during this time period.”

    The company also said it has invested in technology to better handle flights in severe weather and reduce the congestion at airports.

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  • Climate change has ravaged India’s rice stock. Now its export ban could deepen a global food crisis | CNN Business

    Climate change has ravaged India’s rice stock. Now its export ban could deepen a global food crisis | CNN Business

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    Harayana, India
    CNN
     — 

    Satish Kumar sits in front of his submerged rice paddy in India’s Haryana state, looking despairingly at his ruined crops.

    “I’ve suffered a tremendous loss,” said the third generation farmer, who relies solely on growing the grain to feed his young family. “I will not be able to grow anything until November.”

    The newly planted saplings have been underwater since July after torrential rain battered northern India, with landslides and flash floods sweeping through the region.

    Kumar said he has not seen floods of this scale in years and has been forced to take loans to replant his fields all over again. But that isn’t the only problem he’s facing.

    Last month, India, which is the world’s largest exporter of rice, announced a ban on exporting non-basmati white rice in a bid to calm rising prices at home and ensure food security. India then followed with more restrictions on its rice exports, including a 20% duty on exports of parboiled rice.

    The move has triggered fears of global food inflation, hurt the livelihoods of some farmers and prompted several rice-dependent countries to seek urgent exemptions from the ban.

    More than three billion people worldwide rely on rice as a staple food and India contributed to about 40% of global rice exports.

    Economists say the ban is just the latest move to disrupt global food supplies, which has suffered from Russia’s invasion of Ukraine as well as weather events such as El Niño.

    They warn the Indian government’s decision could have significant market reverberations with the poor in Global South nations in particular bearing the brunt.

    And farmers like Kumar say market price rises caused by poor harvests doesn’t result in a windfall for them either.

    “The ban is going to have an adverse effect on all of us. We won’t get a higher rate if rice isn’t exported,” Kumar said. “The floods were a death blow to us farmers. This ban will finish us.”

    Satish Kumar with whatever is left of his rice crops.

    The abrupt announcement of the export ban triggered panic buying in the United States, following which the price of rice soared to a near 12-year high, according to the United Nations Food and Agriculture Organization.

    It does not apply to basmati rice, which is India’s best-known and highest quality variety. Non-basmati white rice however, accounts for about 25% of exports.

    India wasn’t the first country to ban food exports to ensure enough supply for domestic consumption. But its move, coming just one week after Russia pulled out of the Black Sea grain deal — a crucial pact that allowed the export of grain from Ukraine — contributed to global concerns about the availability of grain staples and whether millions would go hungry.

    “The main thing here is that it is not just one thing,” Arif Husain, chief economist at the United Nations World Food Programme (WFP) told CNN. “[Rice, wheat and corn crops] make up bulk of the food which poor people around the world consume.”

    Workers in India sift through rice grains in capital New Delhi.

    Nepal has seen rice prices surge since India announced the ban, according to local media reports, and rice prices in Vietnam are the highest they have been in more than a decade, according to customs data.

    Thailand, the world’s second largest rice exporter after India, has also seen domestic rice prices jump significantly in recent weeks, according to data from the Thai Rice Exporters Association.

    Countries including Singapore, Indonesia and the Philippines, have appealed to New Delhi to resume rice exports to their nations, according to local Indian media reports. CNN has reached out to India’s Ministry of Agriculture but has not received a response.

    The International Monetary Fund (IMF) has encouraged India to remove the restrictions, with the organization’s chief economist, Pierre-Olivier Gourinchas, telling reporters last month that it was “likely to exacerbate” the uncertainty of food inflation.

    “We would encourage the removal of these types of export restrictions because they can be harmful globally,” he said.

    Now, there are fears that the ban has the world market bracing for similar actions by rival suppliers, economists warn.

    “The export ban is happening at a time when countries are struggling with high debt, food inflation, and declining depreciating currencies,” Husain from the WFP said. “It’s troubling for everyone.”

    Indian farmers account for nearly half of the country’s workforce, according to government data, with rice paddy mainly cultivated in central, southern, and some northern states.

    Summer crop planting typically starts in June, when monsoon rains are expected to begin, as irrigation is crucial to grow a healthy yield. The summer season accounts for more than 80% of India’s total rice output, according to Reuters.

    This year, however, the late monsoon arrival led to a large water deficit up until mid-June. And when the rains finally arrived, it drenched swathes of the country, unleashing floods that caused significant damage to crops.

    The heavy floods have affected the country's farmers.

    Surjit Singh, 53, a third generation farmer from Harayana said they “lost everything” after the rains.

    “My rice crops have been ruined,” he said. “The water submerged about 8-10 inches of my crops. What I planted (in early June) is gone… I will see a loss of about 30%.”

    The World Meteorological Organization last month warned that governments must prepare for more extreme weather events and record temperatures, as it declared the onset of the warming phenomenon El Niño.

    El Niño is a natural climate pattern in the tropical Pacific Ocean that brings warmer-than-average sea-surface temperatures and has a major influence on weather across the globe, affecting billions of people.

    The impact has been felt by thousands of farmers in India, some of whom say they will now grow crops other than rice. And it doesn’t just stop there.

    India's rice stock is piling up as a result of the ban.

    At one of New Delhi’s largest rice trading hubs, there are fears among traders that the export ban will cause catastrophic consequences.

    “The export ban has left traders with huge amounts of stock,” said rice trader Roopkaran Singh. “We now have to find new buyers in the domestic market.”

    But experts warn the effects will be felt far beyond India’s borders.

    “Poor countries, food importing countries, countries in West Africa, they are at the highest risk,” said Husain from the WFP. “The ban is coming on the back of war and a global pandemic… We need to be extra careful when it comes to our staples, so that we don’t end up unnecessarily rising prices. Because those increases are not without consequences.”

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  • Federal Reserve Chair Jerome Powell hints at more bad news for borrowers | CNN Business

    Federal Reserve Chair Jerome Powell hints at more bad news for borrowers | CNN Business

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    Washington, DC
    CNN
     — 

    Additional interest rate hikes are still on the table and rates could remain elevated for longer than expected, Federal Reserve Chair Jerome Powell said Friday.

    Delivering a highly anticipated speech at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyoming, Powell again stressed that the Fed will pay close attention to economic growth and the state of the labor market when making policy decisions.

    “Although inflation has moved down from its peak — a welcome development — it remains too high,” Powell said. “We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

    The Fed chief’s annual presentation at the symposium, which has become a major event in the world of central banking, typically hints at what to expect from monetary policy in the coming months.

    Powell’s speech wasn’t a full-throated call for more rate hikes, but rather a balanced assessment of inflation’s evolution over the past year and the possible risks to the progress the Fed wants to see. He made it clear the central bank is retaining the option of more hikes, if necessary, and that what Fed officials ultimately decide will depend on data.

    US stocks opened higher before Powell’s speech, tumbled in late morning trading and then rose again.

    The Fed raised its benchmark lending rate by a quarter point in July to a range of 5.25-5.5%, the highest level in 22 years, following a pause in June. Minutes from the Fed’s July meeting showed that officials were concerned about the economy’s surprising strength keeping upward pressure on prices, suggesting more rate hikes if necessary. Some officials have said in recent speeches that the Fed can afford to keep rates steady, underscoring the intense debate among officials on what the Fed should do next.

    Financial markets still see an overwhelming chance the the Fed will decide to hold rates steady at its September meeting, according to the CME FedWatch tool, given that inflationary pressures have continued to wane.

    Here are some key takeaways from Powell’s speech.

    Chair Powell said there is still a risk that inflation won’t come down to the Fed’s 2% target as the central bank faces the proverbial last mile in its battle with higher prices.

    “Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said.

    Concerns over the economy running too hot for the Fed’s comfort only recently emerged.

    Economic growth in the second quarter picked up from the prior three-month period and the Atlanta Fed is currently estimating growth will accelerate even more in the third quarter.

    That could be a problem for the Fed, since the central bank’s primary mechanism for fighting inflation is by cooling the economy through tweaking the benchmark lending rate.

    Generally, if demand is red hot, employers will want to hire to meet that demand. But many firms continue to have difficulty hiring, according to business surveys from groups such as the National Federation of Independent Business. In theory, that could prompt wage increases in order to secure talent — and those higher costs could then be passed on to consumers.

    “if you’re a policymaker, you’re looking at the level of output relative to your estimate of what’s sustainable for maximum employment and 2% inflation,” William English, finance professor at Yale University who worked at the Fed’s Board of Governors from 2010 to 2015, told CNN. “So what does that mean for monetary policy? That may mean that they need rates to be higher for longer than they thought to get the economy on to that desirable trajectory, but there are a lot of questions around that force, and a lot of uncertainty.”

    Cleveland Fed President Loretta Mester is one of the Fed officials backing a more aggressive stance on fighting inflation.

    “We’ve come come a long way, but we don’t want to be satisfied, because inflation remains too high — and we need to see more evidence to be assured that it’s coming down in a sustainable way and in a timely way,” Mester said in an interview with CNBC after Powell’s remarks.

    Meanwhile, some other officials think there will eventually be enough restraint on the economy and that more hikes could cause unnecessary economic damage. The lagged effects of rate hikes on the broader economy are a key uncertainty for officials, since it’s not clear when exactly those effects will fully take hold. Research suggests it takes at least a year.

    “We are in a restrictive stance in my view, and we’re putting pressure on the economy to slow inflation,” Philadelphia Fed President Patrick Harker told Bloomberg in an interview Friday after Powell’s speech. “What I’m hearing — and I’ve been around my district all summer talking to people — is ‘you’ve done a lot very quickly.’”

    Powell pointed to the steady progress on inflation in the past year: The Fed’s preferred inflation gauge — the Personal Consumption Expenditures price index — rose 3% in June from a year earlier, down from the 3.8% rise in May. The Commerce Department officially releases July PCE figures next week, though Powell already previewed that report in his speech. He said the Fed’s favorite inflation measure rose 3.3% in the 12 months ended in July.

    The Consumer Price Index, another closely watched inflation measure, rose 3.2% in July, a faster pace than the 3% in June, though underlying price pressures continued to decelerate that month.

    In his speech Friday, Powell stood firmly by the Fed’s current 2% inflation target, which was formalized in 2012 — at least for now. The Fed is set to review its policy framework around 2025, which could be an opportunity to establish a new inflation target.

    Harvard economist Jason Furman said in an op-ed published in The Wall Street Journal this week that the central bank should aim for a different inflation goal, which could be something slightly higher than 2% or even a range of between 2% and 3%.

    For now, Powell has made it clear he is sticking with the stated inflation target.

    Still, inflation’s progress has hyped up not only American consumers and businesses, but also some Fed officials.

    Chicago Fed President Austan Goolsbee reiterated to CNBC Friday that he still sees “a path to a soft landing,” a scenario in which inflation falls down to target without a spike in unemployment or a recession.

    Powell also weighed in on an ongoing debate among economists about whether the “neutral rate of interest,” also known as r*, is higher since the economy is still on strong footing despite the Fed’s aggressive pace of rate hikes.

    In theory, the neutral rate is when real interest rates neither restrict nor stimulate growth. The Fed chair said higher interest rates are likely pulling on the economy’s reins, implying that r* might not be structurally higher, though he said it’s an unobservable concept.

    “We see the current stance of policy as restrictive, putting downward pressure on economic activity, hiring, and inflation. But we cannot identify with certainty the neutral rate of interest, and thus there is always uncertainty about the precise level of monetary policy restraint,” Powell said.

    Either way, while the Fed chief hinted that more rate hikes might be coming down the pike, there’s no guarantee either way.

    The Fed paused its historic inflation fight for the first time in June, mostly based on uncertainty over how the spring’s bank stresses would affect lending. The central bank could decide to pause again in September over uncertainty as it waits for more data.

    “We think that the Fed is more likely to take a wait-and-see approach with the data and try to understand a little bit more about why the labor market is remaining so strong, even despite the inflationary experience that we’ve had and the higher interest rates in the economy,” Sinead Colton Grant, head of investor solutions at BNY Mellon Wealth Management, told CNN in an interview.

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  • Saudi Arabia, UAE and Iran among six countries invited to join BRICS group | CNN Business

    Saudi Arabia, UAE and Iran among six countries invited to join BRICS group | CNN Business

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    CNN
     — 

    Oil powers Saudi Arabia and the United Arab Emirates have been invited to become members of the BRICS group of developing nations in its first expansion in over a decade.

    Also invited are Iran, Egypt, Ethiopia and Argentina, South African President Cyril Ramaphosa said Thursday as he wrapped up the annual summit of the group in Johannesburg.

    Saudi Foreign Minister Prince Faisal bin Farhan said the kingdom was awaiting details from the BRICS group on the nature of the membership, and would take an “appropriate decision” accordingly.

    All six countries invited had already expressed an interest in joining. The BRICS group currently includes Brazil, Russia, India, China and South Africa.

    “The membership will take effect from the first of January, 2024,” Ramaphosa said.

    In a video message, Russian President Vladimir Putin congratulated the new BRICS members, adding that the bloc’s global influence would continue to grow.

    “I would like to congratulate the new members who will work in a full-scale format next year,” Putin said.

    “And I would like to assure all our colleagues that we will continue the work that we started today on expanding the influence of BRICS in the world,” the Russian president added.

    China’s President Xi Jinping called the bloc’s expansion “historic,” reflecting its determination to “unite and cooperate with developing countries.”

    “[It will] inject new impetus into the BRICS cooperation mechanism and further strengthen the power of world peace and development,” Jinping said.

    Indian Prime Minister Narendra Modi also welcomed the expansion, saying his country had always believed that adding new members would strengthen the bloc.

    Speaking to Saudi TV channel Al Arabiya, the Saudi foreign minister added that the bloc had “proven itself to be a useful and important channel to strengthen economic cooperation with countries of the so-called Global South.”

    Bin Farhan told the BRICS conference earlier Thursday that the kingdom would continue to be a “secure and reliable energy provider,” adding that total bilateral trade between Saudi Arabia and BRICS nations exceeded $160 billion in 2022.

    If Saudi Arabia accepts the invitation, the world’s largest crude oil exporter will find itself in the same economic bloc as the world’s biggest oil importer, China.

    It will also mean that Russia and Saudi Arabia — both members of OPEC+, a group of major oil producers — will join each other in a new economic bloc. The two countries often coordinate their oil output, which has in the past put Saudi Arabia at odds with its ally, the United States.

    The bloc’s expansion raises the question of potential de-dollarization, a process by which members would gradually switch to using currencies other than the US dollar to conduct trade. The BRICS countries have also been talking about a common currency, an idea analysts have described as unworkable and “unlikely” in the near future.

    Putin said the issue of a common currency was a “difficult question” but added “we will move towards solving these problems.”

    The expansion takes place at a time when some BRICS members, namely Russia and China, are locked into rising tensions with the West.

    Experts have said that choosing to include countries that are openly antagonistic toward the West, such as Iran, could swing the group further toward becoming an anti-Western bloc.

    Built off a term originally coined by former Goldman Sachs economist Jim O’Neill to describe key emerging markets, the group has persisted despite deep differences in political and economic systems among its members.

    “Economically, not many of the countries that are applying to join are particularly large,” O’Neill told Bloomberg earlier this week.

    Existing BRICS members have “had enough difficulty trying to agree just between the five of them,” he added. “So beyond the admittedly hugely powerful symbolism, I’m not quite sure what having a lot more countries in there is going to achieve.”

    BRICS held its first summit in 2009 with four members and then added South Africa the following year. It launched its New Development Bank in 2015.

    The United Arab Emirates President Mohamed bin Zayed al Nahyan said on X, formerly Twitter: “We appreciate the inclusion of the UAE as a member to this important group.”

    Egyptian President Abdel Fattah el-Sisi said his country looked forward to joining BRICS in order to strengthen economic cooperation among its members, as well as “raise the voice of the Global South,” according to the presidential spokesperson.

    — Manveena Suri, Mostafa Salem, Lizzy Yee, Mengchen Zhang and Nadeen Ebrahim contributed to this article.

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  • Fact check: The first Republican presidential debate of the 2024 election | CNN Politics

    Fact check: The first Republican presidential debate of the 2024 election | CNN Politics

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    CNN
     — 

    Republican presidential candidates delivered a smattering of false and misleading claims at the first debate of the 2024 election – though none of the eight candidates on stage in Milwaukee delivered anything close to the bombardment of false statements that typically characterized the debate performances of former President Donald Trump, the Republican front-runner who skipped the Wednesday event.

    Sen. Tim Scott of South Carolina inaccurately described the state of the economy in early 2021 and repeated a long-ago-debunked false claim about the Biden-era Justice Department. Former New Jersey Gov. Chris Christie misstated the sentence attached to a gun law relevant to the investigation into the president’s son Hunter Biden. Florida Gov. Ron DeSantis misled about his handling of the Covid-19 pandemic, omitting mention of his early pandemic restrictions.

    Below is a fact check of those claims and various others from the debate, some of which left out key context. In addition, below is a brief fact check of some of Trump’s claims from a pre-taped interview he did with Tucker Carlson, which was posted online shortly before the debate aired. Trump made a variety of statements that were not true.

    DeSantis and the pandemic

    DeSantis criticized the federal government for its handling of the Covid-19 pandemic, claiming it had locked down the economy, and then said: “In Florida, we led the country out of lockdown, and we kept our state free and open.”

    Facts First: DeSantis’s claim is misleading at best. Before he became a vocal opponent of pandemic restrictions, DeSantis imposed significant restrictions on individuals, businesses and other entities in Florida in March 2020 and April 2020; some of them extended months later into 2020. He did then open up the state, with a gradual phased approach, but he did not keep it open from the start.

    DeSantis received criticism in March 2020 for what some critics perceived as a lax approach to the pandemic, which intensified as Florida beaches were packed during Spring Break. But that month and the month following, DeSantis issued a series of major restrictions. For example, DeSantis:

    • Closed Florida’s schools, first with a short-term closure in March 2020 and then, in April 2020, with a shutdown through the end of the school year. (In June 2020, he announced a plan for schools to reopen for the next school year that began in August. By October 2020, he was publicly denouncing school closures, calling them a major mistake and saying all the information hadn’t been available that March.)
    • On March 14, 2020, announced a ban on most visits to nursing homes. (He lifted the ban in September 2020.)
    • On March 17, 2020, ordered bars and nightclubs to close for 30 days and restaurants to operate at half-capacity. (He later approved a phased reopening plan that took effect in May 2020, then issued an order in September 2020 allowing these establishments to operate at full capacity.)
    • On March 17, 2020, ordered gatherings on public beaches to be limited to a maximum of 10 people staying at least six feet apart, then, three days later, ordered a shutdown of public beaches in two populous counties, Broward and Palm Beach. (He permitted those counties’ beaches to reopen by the last half of May.)
    • On March 20, 2020, prohibited “any medically unnecessary, non-urgent or non-emergency” medical procedures. (The prohibition was lifted in early May 2020.)
    • On March 23, 2020, ordered that anyone flying to Florida from an area with “substantial community spread” of the virus, “to include the New York Tri-State Area (Connecticut, New Jersey and New York),” isolate or quarantine for 14 days or the duration of their stay in Florida, whichever was shorter, or face possible jail time or a fine. Later that week, he added Louisiana to the list. (He lifted the Louisiana restriction in June 2020 and the rest in August 2020.)
    • On April 3, 2020, imposed a statewide stay-home order that temporarily required people in Florida to “limit their movements and personal interactions outside of their home to only those necessary to obtain or provide essential services or conduct essential activities.” (Beginning in May 2020, the state switched to a phased reopening plan that, for months, included major restrictions on the operations of businesses and other entities; DeSantis described it at the time as a “very slow and methodical approach” to reopening.)

    -From CNN’s Daniel Dale

    Nikki Haley, the former South Carolina governor and US ambassador to the United Nations, said: “Donald Trump added $8 trillion to our debt, and our kids are never going to forgive us for this.”

    Facts First: Haley’s figure is accurate. The total public debt stood at about $19.9 trillion on the day Trump took office in 2017 and then increased by about $7.8 trillion over Trump’s four years, to about $27.8 trillion on the day he left office in 2021.

    It’s worth noting, however, that the increase in the debt during any president’s tenure is not the fault of that president alone. A significant amount of spending under any president is the result of decisions made by their predecessors – such as the creation of Social Security, Medicare and Medicaid decades ago – and by circumstances out of a president’s control, notably including the global Covid-19 pandemic under Trump; the debt spiked in 2020 after Trump approved trillions in emergency pandemic relief spending that Congress had passed with overwhelming bipartisan support.

    Still, Trump did choose to approve that spending. And his 2017 tax cuts, unanimously opposed by congressional Democrats, were another major contributor to the debt spike.

    -From CNN’s Daniel Dale and Katie Lobosco

    North Dakota Gov. Doug Burgum claimed that Biden’s signature climate bill costs $1.2 trillion dollars and is “just subsidizing China.”

    Facts First: This claim needs context. The clean energy pieces of the Inflation Reduction Act – Democrats’ climate bill – passed with an initial price tag of nearly $370 billion. However, since that bill is made up of tax incentives, that price tag could go up depending on how many consumers take advantage of tax credits to buy electric vehicles and put solar panels on their homes, and how many businesses use the subsidies to install new utility scale wind and solar in the United States.

    Burgum’s figure comes from a Goldman Sachs report, which estimated the IRA could provide $1.2 trillion in clean energy tax incentives by 2032 – about a decade from now.

    On Burgum’s claim that Biden’s clean energy agenda will be a boon to China, the IRA was specifically written to move the manufacturing supply chain for clean energy technology like solar panels and EV batteries away from China and to the United States.

    In the year since it was passed, the IRA has spurred 83 new or expanded manufacturing facilities in the US, and close to 30,000 new clean energy manufacturing jobs, according to a tally from trade group American Clean Power.

    -From CNN’s Ella Nilsen

    With the economy as one of the main topics on the forefront of voters’ minds, Scott aimed to make a case for Republican policies, misleadingly suggesting they left the US economy in record shape before Biden took office.

    “There is no doubt that during the Trump administration, when we were dealing with the COVID virus, we spent more money,” Scott said. “But here’s what happened at the end of our time in the majority: we had low unemployment, record low unemployment, 3.5% for the majority of the population, and a 70-year low for women. African Americans, Hispanics, and Asians had an all-time low.”

    Facts First: This is false. Scott’s claims don’t accurately reflect the state of the US economy at the end of the Republican majority in the Senate. And in some cases, his exaggerations echo what Trump himself frequently touted about the economy under his leadership.

    By the time Trump left office and the Republicans lost the Senate majority in January 2021, US unemployment was not at a record low. The US unemployment rate dropped to a seasonally adjusted rate of 3.5% in September 2019, the country’s lowest in 50 years. While it hovered around that level for five months, Scott’s assertion ignores the coronavirus pandemic-induced economic destruction that followed. In April 2020, the unemployment rate spiked to 14.7% — the highest level since monthly records began in 1948. As of December 2020, the unemployment rate was at 6.7%.

    Nor was the unemployment rate for women at a 70-year low by the end of Trump’s time in office. It reached a 66-year low during certain months of 2019, at 3.4% in April and 3.6% in August, but by December 2020, unemployment for women was at 6.7%.

    The unemployment rates for African Americans, Hispanics, and Asians were also not at all-time lows at the end of 2020, but they did reach record lows during Trump’s tenure as president.

    -From CNN’s Tara Subramaniam

    Scott said that the Justice Department under President Joe Biden is targeting “parents that show up at school board meetings. They are called, under this DOJ, they’re called domestic terrorists.”

    Facts First: It is false that the Justice Department referred to parents as domestic terrorists. The claim has been debunked several times – during the uproar at school boards over Covid-19 restrictions and anti-racism curriculums; after Kevin McCarthy claimed Republicans would investigate Merrick Garland with a majority in the House; and even by a federal judge. The Justice Department never called parents terrorists for attending or wanting to attend school board meetings.

    The claim stems from a 2021 letter from The National School Boards Associations asking the Justice Department to “deal with” the uptick in threats against education officials and saying that “acts of malice, violence, and threats against public school officials” could be classified as “the equivalent to a form of domestic terrorism and hate crimes.” In response, Garland released a memo encouraging federal and local authorities to work together against the harassment campaigns levied at schools, but never endorsed the “domestic terrorism” notion.

    A federal judge even threw out a lawsuit over the accusation, ruling that Garland’s memo did little more than announce a “series of measures” that directed federal authorities to address increasing threats targeting school board members, teachers and other school employees.

    -From CNN’s Hannah Rabinowitz

    Haley, the former ambassador to the United Nations and governor of South Carolina, said the US is spending “less than three and a half percent of our defense budget” on Ukraine aid, and that in terms of financial aid relative to GDP, “11 of the European countries have given more than the US.”

    Facts First: This is partly true. Haley’s claim regarding the US aid to Ukraine compared to the total defense budget is slightly under the actual percentage, but it is accurate that 11 European countries have given more aid to Ukraine as a percentage of their total GDP than the US.

    As of August 14, the US has committed more than $43 billion in military aid to Ukraine since the beginning of the war in Ukraine, according to the Defense Department. In comparison, the Fiscal Year 2023 defense budget was $858 billion – making aid to Ukraine just over 5% of the total US defense budget.

    As of May 2023, according to a Council of Foreign Relations tracker, 11 countries were providing a higher share in aid to Ukraine relative to their GDP than the US – led by Estonia, Latvia, Lithuania, and Poland.

    -From CNN’s Haley Britzky

    Former Vice President Mike Pence said Wednesday that the Trump administration “spent funding to backfill on the military cuts of the Obama administration.”

    Facts First: This is misleading. While military spending decreased under the Obama administration, it was largely due to the 2011 Budget Control Act, which received Republican support and resulted in automatic spending cuts to the defense budget.

    Mike Pence, a senator at the time, voted in favor of the Budget Control Act.

    -From CNN’s Haley Britzky

    Christie said President Biden’s son Hunter Biden was “facing a 10-year mandatory minimum” for lying on a federal form when he purchased a gun in 2018.

    Facts First: Christie, a former federal prosecutor, clearly misstated the law. This crime can lead to a maximum prison sentence of 10 years, but it doesn’t have a 10-year mandatory minimum.

    These comments are related to the highly scrutinized Justice Department investigation into Hunter Biden, which is currently ongoing after a plea deal fell apart earlier this summer.

    As part of the now-defunct deal, Hunter Biden agreed to plead guilty to two tax misdemeanors and enter into a “diversion agreement” with prosecutors, who would drop the gun possession charge in two years if he consistently stayed out of legal trouble and passed drug tests.

    The law in question makes it a crime to purchase a firearm while using or addicted to illegal drugs. Hunter Biden has acknowledged struggling with crack cocaine addiction at the time, and admitted at a court hearing and in court papers that he violated this law by signing the form.

    The US Sentencing Commission says, “The statutory maximum penalty for the offense is ten years of imprisonment.” There isn’t a mandatory 10-year punishment, as Christie claimed.

    During his answer, Christie also criticized the Justice Department for agreeing to a deal in June where Hunter Biden could avoid prosecution on the felony gun offense. That deal was negotiated by special counsel David Weiss, who was first appointed to the Justice Department by former President Donald Trump.

    -From CNN’s Marshall Cohen

    Burgum and Scott got into a back and forth over IRS staffing with Burgum saying that the “Biden administration wanted to put 87,000 people in the IRS,” and Scott suggesting they “fire the 87,000 IRS agents.”

    Facts First: This figure needs context.

    The Inflation Reduction Act, which passed last year without any Republican votes, authorized $80 billion in new funding for the IRS to be delivered over the course of a decade.

    The 87,000 figure comes from a 2021 Treasury report that estimated the IRS could hire 86,852 full-time employees with a nearly $80 billion investment over 10 years.

    While the funding may well allow for the hiring of tens of thousands of IRS employees over time, far from all of these employees will be IRS agents conducting audits and investigations.

    Many other employees will be hired for the non-agent roles, from customer service to information technology, that make up most of the IRS workforce. And a significant number of the hires are expected to fill the vacant posts left by retirements and other attrition, not take newly created positions.

    The IRS has not said precisely how many new “agents” will be hired with the funding. But it is already clear that the total won’t approach 87,000. And it’s worth noting that the IRS may not receive all of the $80 billion after Republicans were able to claw back $20 billion of the new funding as part of a deal to address the debt ceiling made earlier this year.

    -From CNN’s Katie Lobosco

    Trump repeated a frequent claim during his interview with Carlson that streamed during the GOP debate that his retention of classified documents at Mar-a-Lago after leaving the White House was “covered” under the Presidential Records Act and that he is “allowed to do exactly that.”

    Facts First: This is false. The Presidential Records Act says the exact opposite – that the moment presidents leave office, all presidential records are to be turned over to the federal government. Keeping documents at Mar-a-Lago after his presidency concluded was in clear contravention of that law.

    According to the Presidential Records Act, “upon the conclusion of a President’s term of office, or if a President serves consecutive terms upon the conclusion of the last term, the Archivist of the United States shall assume responsibility for the custody, control, and preservation of, and access to, the Presidential records of that President.”

    The sentence makes clear that a president has no authority to keep documents after leaving the White House.

    The National Archives even released a statement refuting the notion that Trump’s retention of documents was covered by the Presidential Records Act, writing in a June news release that “the PRA requires that all records created by Presidents (and Vice-Presidents) be turned over to the National Archives and Records Administration (NARA) at the end of their administrations.”

    -From CNN’s Hannah Rabinowitz

    While discussing electric vehicles, Trump claimed that California “is in a big brownout because their grid is a disaster,” adding that the state’s ambitious electric vehicle goals won’t work with the grid in such shape.

    Facts First: Trump’s claim that California’s grid is currently in a “big brownout” and is a “disaster” isn’t true. California’s grid suffered rolling blackouts in 2020, but it has performed quite well in the face of extreme heat this summer, owing in large part to a massive influx of renewable energy including battery storage. These big batteries keep energy from wind and solar running when the wind isn’t blowing and sun isn’t shining. (Batteries are also being deployed at a rapid rate in Texas, a red state.)

    Another reason California’s grid has stayed stable this year even during extreme temperature spikes is the fact that a deluge of snow and rain this winter and spring has refilled reservoirs that generate electricity using hydropower.

    As Trump insinuated, there are real questions about how well the state’s grid will hold up as California’s drivers shift to electric vehicles by the millions by 2035 – the same year it will phase out selling new gas-powered cars. California state officials say they are preparing by adding new capacity to the grid and urging more people to charge their vehicles overnight and during times of the day when fewer people are using energy. But independent experts say the state needs to exponentially increase its clean energy while also building out huge amounts of new EV chargers to achieve its goals.

    -From CNN’s Ella Nilsen

    Trump and the border wall

    Trump claimed to Carlson, “I had the strongest border in the history of our country, and I built almost 500 miles of wall. You know, they’d like to say, ‘Oh, was it less?’ No, I built 500 miles. In fact, if you check with the authorities on the border, we built almost 500 miles of wall.”

    Facts First: This needs context. Trump and his critics are talking about different things when they use different figures for how much border wall was built during his presidency. Trump is referring to all of the wall built on the southern border during his administration, even in areas that already had some sort of barrier before. His critics are only counting the Trump-era wall that was built in parts of the border that did not have any previous barrier.

    A total of 458 miles of southern border wall was built under Trump, according to a federal report written two days after Trump left office and obtained by CNN’s Priscilla Alvarez. That is 52 miles of “primary” wall built where no barriers previously existed, plus 33 miles of “secondary” wall that was built in spots where no barriers previously existed, plus another 373 miles of primary and secondary wall that was built to replace previous barriers the federal government says had become “dilapidated and/or outdated.”

    Some of Trump’s rival candidates, such DeSantis and Christie, have used figures around 50 miles while criticizing Trump for failing to finish the wall – counting only the primary wall built where no barriers previously existed.

    While some Trump critics have scoffed at the replacement wall, the Trump-era construction was generally much more formidable than the older barriers it replaced, which were often designed to deter vehicles rather than people on foot. Washington Post reporter Nick Miroff tweeted in 2020: “As someone who has spent a lot of time lately in the shadow of the border wall, I need to puncture this notion that ‘replacement’ sections are ‘not new.’ There is really no comparison between vehicle barriers made from old rail ties and 30-foot bollards.”

    Ideally, both Trump and his opponents would be clearer about what they are talking about: Trump that he is including replacement barriers, his opponents that they are excluding those barriers.

    -From CNN’s Daniel Dale

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  • Vegan Sam Bankman-Fried is subsisting only on bread and water in jail, his attorneys say | CNN Business

    Vegan Sam Bankman-Fried is subsisting only on bread and water in jail, his attorneys say | CNN Business

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    New York
    CNN
     — 

    Sam Bankman-Fried pleaded not guilty Tuesday to amended fraud and money laundering charges, appearing in court for the first time since his bail was revoked and he was sent to a Brooklyn jail to await trial.

    Lawyers for the former crypto billionaire, who is vegan, said the detention center is not accommodating his diet and failing to regularly dispense his prescription Adderall.

    “He’s literally now subsisting on bread and water, which are the only things he’s served that he can eat, and sometimes peanut butter,” his attorney, Mark Cohen, told the court.

    Magistrate Judge Netburn said she would contact the Bureau of Prisons about the accommodations.

    Bankman-Fried, also known as SBF, has spent the past 11 days in the Metropolitan Detention Center in Brooklyn, a notoriously overcrowded facility that’s been regularly accused of keeping inmates in inhumane conditions. It’s a far cry from his house arrest, which he spent in the relative luxury of his parents Palo Alto home in California.

    On August 11, Judge Lewis Kaplan revoked SBF’s bail and remanded him to the facility, ultimately siding with prosecutors’ argument that he had attempted to intimidate potential witnesses against him, including his former business partner and ex-girlfriend, Caroline Ellison.

    Bankman-Fried, 31, has pleaded not guilty to multiple conspiracy and fraud charges relating to the collapse of his exchange, FTX, in November. He faces a potential life sentence if convicted on all the charges.

    Before its collapse, FTX was one of the largest crypto-trading platforms in the world, backed by A-list celebrities and featured in Super Bowl commercials. But the company came unglued in the span of a week as concerns about its financial ties to SBF’s crypto hedge fund, Alameda Research, spurred investors and customers to yank their funds. The company filed for bankruptcy and quickly became the center of the federal fraud investigation.

    While awaiting his trial, SBF will be granted a window of time, from 8:30 am to 3 pm, on weekdays to meet with his attorneys, according to a court filing released Monday.

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  • Customs officers seize over $380,000 worth of cocaine off bus from Mexico | CNN

    Customs officers seize over $380,000 worth of cocaine off bus from Mexico | CNN

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    CNN
     — 

    US customs officers in Texas discovered nearly two dozen packages of cocaine on a commercial bus coming from Mexico.

    Field operations officers with the US Customs and Border Protection seized the “significant amount” of narcotics at the Roma International Bridge in Roma, Texas, the agency reported. Roma is along the Rio Grande in South Texas, roughly 50 miles northwest of McAllen.

    Officers came across the drugs on August 12, according to a news release Tuesday. After the bus arrived, officers conducted a canine and non-intrusive inspection.

    The examination uncovered 22 packages that contained nearly 50 pounds of cocaine, the agency said.

    The seized narcotics had a street value of more than $380,000, CBP said.

    The agency has seized more than 65,000 pounds of cocaine since October 2022, CBP data shows.

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  • Tesla cuts Model S and X prices by over 6% in China | CNN Business

    Tesla cuts Model S and X prices by over 6% in China | CNN Business

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    Beijing
    Reuters
     — 

    Tesla has cut prices for its existing inventories of its premium Model S and Model X cars in China by as much as 6.9%, it said on Wednesday.

    A post from the carmaker on social media platform Weibo showed the price of the Model S cut by 6.7% to 754,900 yuan ($103,477.58) from 808,900 yuan earlier.

    The Model X now starts from 836,900 yuan, down 6.9% from 898,900 yuan earlier.

    Tesla

    (TSLA)     on Monday said it cut prices in China for its Model Y’s long-range and performance versions starting on August 14, which triggered concerns around its profit margins.

    The moves come after sales of Tesla’s China-made vehicles fell 31% in July from June, their first month-on-month decline since December, as the automaker idled some production to prepare for a revamped Model 3 launch.

    By contrast, China’s BYD

    (BYDDF)    increased sales from June.

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  • Russia’s ruble hits a 17-month low to the dollar as the Ukraine war bites | CNN Business

    Russia’s ruble hits a 17-month low to the dollar as the Ukraine war bites | CNN Business

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    London
    CNN
     — 

    The ruble hit a 17-month low against the dollar Monday, highlighting the growing squeeze on Russia’s economy from Western sanctions and a slump in export revenues.

    The Russian currency has lost nearly 40% of its value this year, weakening past 100 rubles to the dollar, as Moscow’s war in Ukraine takes a heavy toll.

    The fall in the ruble’s value is one of several negative indicators for the Russian economy, even as President Vladimir Putin insists that Western sanctions are having a limited effect.

    — This is a developing story and will be updated.

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  • Inflation may be cooling — but drivers can’t seem to catch a break | CNN Business

    Inflation may be cooling — but drivers can’t seem to catch a break | CNN Business

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    New York
    CNN
     — 

    If you’re sitting in rush-hour traffic in Arlington, Virginia, there’s a good chance you’ll spot Hunter Scott in his helmet and elbow pads scooting right past you on an adjacent path.

    For the past year, Scott, a 38-year-old Navy pilot doing work for the government until his next deployment, has been commuting 12 miles from his home in Washington, DC, via motorized scooter. When it’s raining or snowing, he throws on his Navy-issued high-tech weather gear, if necessary.

    Even though the second-hand scooter he bought from Craigslist for $500 can only go up to 20 miles an hour, he said it’s saving him a lot of time compared to when he drove to work. Now he doesn’t have to walk a mile from the nearest parking lot to his office or wait for the Metro, which can often be unreliable, Scott said. And it means he can spend more time with his one-year-old daughter.

    It is also saving him a lot of money at a time when just about every car-related cost is more expensive.

    Scott said he got the idea to scoot to work last year when gas prices were near record highs and inflation rose to a 40-year record high. “The cost of living was just getting more expensive,” Scott told CNN. “We weren’t willing to make sacrifices on the quality of food that we buy.”

    Scott estimates he and his wife, who also commutes via scooter, are saving $4,500 this year from not driving to work. That’s according to calculations he made on an Excel spreadsheet that factors in savings from not having to repair their cars as much, the auto insurance reductions they get from driving less and the reduced fuel use.

    Even though gas prices have been rising lately, they’re still significantly lower than a year ago. But other costs associated with car ownership are continuing to skyrocket. In fact, if Scott and his wife switched back to driving today they’d likely find that they’re saving well above the $4,500 he calculated.

    It will cost you 19.5% more to repair your car now than it did a year ago, according to July’s Consumer Price Index report, released Thursday by the Bureau of Labor Statistics. Another hefty expense is car insurance, up 17.8% from a year ago. Car repairs and car insurance were the second- and third-largest annual price increases, respectively, tracked by the CPI.

    On top of that, car maintenance and servicing, body work, tires, parts and equipment and even state registration and licensing fees are all costing drivers more.

    Pam Franks, a retired Louisiana state Medicaid analyst, balked when she got a notice from State Farm informing her that her six-month policy for her 2017 Toyota Camry would increase by 41% to $408 this August.

    “It’s aggravating when I haven’t had any wrecks or tickets,” Franks, who lives in Pineville, Louisiana, told CNN.

    Pam Franks, a resident of Pineville, Louisiana, said her car insurance policy rate increased by 41%, despite the fact that she has not had any recent collisions or tickets.

    She said she tried shopping around for better rates, but couldn’t find anything cheaper since she bundles her auto insurance with her home insurance. Switching to another auto insurance policy would have pushed up the cost of her home insurance, she said.

    She’s one of many Louisiana drivers seeing their rates increase after the state’s Department of Insurance signed off on State Farm’s 17% average rate hike across all policies earlier this month.

    “Inflationary pressures and supply chain issues, along with higher claim costs continue to drive our rate changes in Louisiana and beyond,” Roszell Gadson, a State Farm spokesperson, told CNN. “We continue to adjust to these trends to make sure we are matching price to risk.”

    One of the reasons car repair costs are up is that Americans aren’t replacing their older vehicles, said Kristin Brocoff, a spokeswoman spokesperson for CarMD, a vehicle diagnostics provider.

    The average age of cars in use in the United States hit an all-time high of 12.5 years last year, according to an analysis from S&P Global Mobility of 284 million cars.

    That’s partly because car production still hasn’t caught up with pent-up demand from the pandemic, resulting in more expensive new cars.

    But trying to extend your car’s life span can add up.

    Model year 2007 cars were the most likely to need a repair related to the “check engine light” message in the past year, according to CarMD’s April Vehicle Health Index report that analyzed 17.7 million check-engine light readings from model year 1996 to 2022 vehicles driven last year. Some of the most common check-engine light repair issues include replacing catalytic converters, oxygen sensors and ignition coil and spark plugs, according to CarMD’s report.

    The average car repair cost $403.71 last year, a 2.8% uptick from 2021 and a record high since CarMD began reporting on this in 2009. CarMD estimates average repair costs using annual industry data on the cost of car parts, labor rates and the average amount of time required to complete a repair.

    On the labor side, rates were down by 0.5% from last year. Car parts were up 5% from a year ago, which pushed up overall repair costs.

    Paul Baxter, a mechanic who owns Bullet Proof Off-Road & Auto, a car repair shop in Mesa, Arizona, said he’s paying 30% more for car parts compared to before the pandemic. That’s a result of persistent supply chain issues and higher shipping costs, he said.

    He said he has no bargaining power and has to accept the price manufacturers are charging for parts. To keep the lights on, he marks up car parts he sells to customers by 20% to 30%, he told CNN.

    Baxter hasn’t had an issue finding and retaining qualified mechanics. Still, he raised his three workers’ wages by $5 an hour to $25 an hour over the past few years to keep up with the higher cost of living.

    Paul Baxter, who opened his auto shop in 2016, has had to raise prices due to the rising cost of car parts.

    Baxter said the industry publications he subscribes to that are critical for him to learn how to repair the newest car models raised their prices. Even the company from which he purchases water coolers so customers can have a drink in the waiting room now charges more.

    That’s why he recently charged $2,300 to replace a customer’s air conditioning. A few years ago he said he would have charged $1,500 for the same exact job.

    Customers constantly tell him he’s charging too much, said Baxter, who’s been repairing cars professionally since 2008 before opening his shop in 2016. “People don’t understand the back end of running an auto shop and the expenses I take on to keep it open,” he told CNN.

    When he explains how he arrives at an estimate, customers are more sympathetic, he said.

    Ted Canty, a 67-year-old retired FedEx operations manager living in Wimauma, Florida, said he is at his wits end with car repairs. A year ago, he paid $1,950 to replace the water pump in his 2017 Volkswagen Golf. That’s around what his monthly Social Security check is, he said.

    That meant Canty and his wife, who is also retired, had to cut back on dining out and seeing movies so they could save more money for future car repairs.

    Ted Canty, a retired resident of Wimauma, Florida, tries to avoid driving after paying almost $2,000 for a car repair and seeing his car insurance rates increase.

    When his anti-lock braking system recently went out, though, he knew he couldn’t push it off for too long. In the past, he’s almost always gone to Volkswagen service centers for repairs because he says he doesn’t feel comfortable getting it done at shops that aren’t as familiar with his car. But the Volkswagen service center wanted to charge him $525 to repair it, he said, leading him to shop around for better rates at other places. In the end, he paid a quarter of what Volkswagen was charging.

    Canty is worried about the next car repair he’ll inevitably need, especially because he and his wife have limited sources of income outside of their Social Security checks and his pension.

    “We could be driving more because we’re retired and want to go places. But we cut it back to keep the miles off the car,” he told CNN.

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  • US wholesale inflation rose more than expected in July | CNN Business

    US wholesale inflation rose more than expected in July | CNN Business

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    Minneapolis
    CNN
     — 

    US wholesale inflation rose more than expected in July, reversing a yearlong cooling trend, the Bureau of Labor Statistics reported Friday.

    The Producer Price Index, which tracks the average change in prices that businesses pay to suppliers, rose 0.8% annually. That’s above June’s upwardly revised increase of 0.2% and higher than expectations for a 0.7% gain, according to consensus estimates on Refinitiv.

    Producer price hikes increased 0.3% from June to July, the highest monthly increase since January.

    PPI is a closely watched inflation gauge since it captures average price shifts before they reach consumers, and is a proxy for potential price changes in stores.

    Services and demand for services were the primary culprits behind the lift higher for producer prices, said Kurt Rankin, senior economist for PNC Financial Services. Services prices rose 0.5% from June, the highest monthly increase since March 2022 for the category, BLS data shows.

    “The inflation story now, be it for producers or consumers, is demand,” he told CNN. “Mainly that’s consumers still spending money on services.”

    The food index, which had declined for three straight months, rose 0.5% in July, suggesting a 6.3% annualized pace of inflation, he said.

    “Consumers continue to go out and spend money,” Rankin said. “And as long as consumers are spending money, that’s going to create demand from producers, so that’s going to drive up their costs for their raw materials, for their transportation needs, etc.”

    “And they’re going to pass those prices on to consumers,” he added.

    That’s an unpleasant cycle.

    “The numbers over the past six months have been much more encouraging, but it’s a reminder that the Federal Reserve has an eye toward the possibility of inflation flaring up again,” he said.

    The report comes just one day after the Consumer Price Index showed that prices rose 3.2% annually in July. That increase, which was below the 3.3% economists were anticipating, was largely driven by year-over-year comparisons to a softer inflation number the year before.

    Similar base effects played their role in the headline PPI increase as well, noted Rankin.

    The tick upward to 0.8% doesn’t tell the whole story, because the index decreased in five of the previous seven months. Annualizing the 0.3% monthly gain, however, would put the PPI rate at about 3.6% and core at 3.8%, he said.

    “So the July number does suggest that there’s still some producer cost pressures,” he said.

    When stripping out the more volatile categories of food and energy, core PPI rose 2.4% annually in July. That’s in line with what was seen in June but a tick above economists’ expectations for a slight cooling.

    On a month-to-month basis, core PPI increased 0.3%, also the highest monthly gain since January.

    “The underlying trends show that PPI inflation is reverting to its pre-pandemic run rate, though progress is likely to be slower in [the second half of 2023] than [the first half],” Oxford Economics economists Matthew Martin and Oren Klachkin wrote Friday in a note. “While these data will comfort Fed officials, policymakers will likely maintain a hawkish tone and keep a close eye on whether last month’s jump in services prices persists in the months ahead.”

    US stock futures tumbled after the report was released, as the hotter-than-expected data fueled concerns that the Fed could continue to hike rates in order to rein in inflation. The Dow has since pared its losses and is back in the green.

    One month does not make a trend, and this result alone should not trigger a September increase from the Fed, but it certainly could heighten concerns, Rankin said.

    “One spark could reignite this,” he said. “We’re seeing energy prices, oil prices, rising over the past few weeks. Any flareup in oil prices goes straight through to not only manufacturing costs, but transportation of goods to market, even transportation of food to restaurants. So even services, leisure and hospitality get hit when energy prices spike, so that possibility is always there.”

    The PPI’s energy index, which increased 0.7% in June, showed that prices were flat for July.

    “So the fact that energy prices were not a contributor tho this month’s reading makes this number jumping a bit a stark reminder that the Federal Reserve’s fight against inflation and their rhetoric regarding that fight is going to remain hawkish in the near term.”

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  • Mortgage rates rise to just short of 7% | CNN Business

    Mortgage rates rise to just short of 7% | CNN Business

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    Washington, DC
    CNN
     — 

    US mortgage rates remained elevated this week, rising for the third week in a row, but stayed just under the market’s 7% threshold.

    The 30-year fixed-rate mortgage averaged 6.96% in the week ending August 10, up from 6.90% the week before, according to data from Freddie Mac released Thursday. A year ago, the 30-year fixed-rate was 5.22%.

    “There is no doubt continued high rates will prolong affordability challenges longer than expected,” said Sam Khater, Freddie Mac’s chief economist. “However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid.”

    The average mortgage rate is based on mortgage applications that Freddie Mac receives from thousands of lenders across the country. The survey includes only borrowers who put 20% down and have excellent credit.

    The rate stayed elevated this week after the Federal Reserve highlighted its reliance on data on jobs and inflation in its July monetary policy meeting and in recent comments.

    Markets had been waiting for July’s inflation report, released Thursday morning, which showed consumer price hikes rose 3.2% annually, the first increase in 12 months. The data also showed that shelter costs contributed 90% of total inflation last month.

    “July’s Consumer Price Index holds significant importance for the Fed’s upcoming decisions,” said Jiayi Xu, an economist at Realtor.com.

    Since inflation rose, it could support the Fed’s concern that the battle is not over, Xu said. The Fed also will consider the forthcoming August employment and inflation data prior to the next policy meeting, in September.

    In addition, the most recent jobs report offered some mixed signals about the labor market, Xu said, including a smaller number of net new jobs added and a dipping unemployment rate.

    “While July’s jobs report itself is very unlikely to have a direct impact on the Fed’s upcoming decision, the decline to a 3.5% unemployment rate may imply that more significant slowing is needed to align with the Fed’s projected year-end rate of 4.1%,” she said.

    This story is developing and will be updated.

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  • PayPal bets on crypto’s future with US-dollar-backed stablecoin | CNN Business

    PayPal bets on crypto’s future with US-dollar-backed stablecoin | CNN Business

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    New York
    CNN
     — 

    PayPal is rolling out its first stablecoin as it attempts to capitalize on the “emerging potential” of US dollar-backed digital tokens for consumer payments.

    The stablecoin, PayPal USD, is fully backed by the US dollar and is “designed to reduce friction” for payments within virtual spaces and provide faster, cheaper transfers of money across borders.

    For now, the use case for the new token appears limited to crypto-related and other “web3” applications. But PayPal is betting on a future in which digital currency is more mainstream and merchants may request payment in stablecoins to avoid credit card processing fees. Similarly, crypto holders can send money instantly across borders without incurring remittance fees charged by banks.

    “The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the US dollar,” said PayPal CEO Dan Schulman.

    Stablecoins, as their name implies, are designed to hold their value steady, making them a vital tool for traders of cryptocurrencies, which are notoriously volatile. Most stablecoins are tightly pegged to a traditional fiat currency, such as the US dollar, or to a commodity like gold. Stablecoins also act as a sort of on-ramp, allowing investors to more easily cash out their crypto holdings for money that can be used in real life.

    Their purported stability has made stablecoins such as Tether a pillar in the infrastructure of the $1 trillion digital asset market.

    PayPal

    (PYPL)     said its stablecoin will be “compatible with that ecosystem from day one. It will be available “soon” on Venmo, the popular payments app owned by PayPal

    (PYPL)    .

    Stablecoins aren’t always as stable as they purport to be. In May 2022, the “algorithmic” stablecoin TerraUSD collapsed when the crypto token backing it, Luna, collapsed. That triggered a broader panic in the space, wiping about $40 billion from the crypto market. The Securities and Exchange Commission later charged its creator, Do Kwon, with misleading investors about the coin’s stability.

    The value of PayPal USD, or PYUSD, doesn’t rely on a complex algorithm the way Terra did. It is issued by Paxos Trust, a blockchain infrastructure firm, and is fully backed by US dollar deposits, Treasuries and similar cash equivalents, according to the companies.

    In other words: every PayPal USD should be worth $1.00, no matter what.

    With the launch of PYUSD, Paxos and PayPal are “proving the real-world value of blockchain technology,” Paxos CEO Charles Cascarilla said, calling the new token “the most significant leap forward for digital assets and the financial industry.”

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  • Why China has few good options to boost its faltering economy | CNN Business

    Why China has few good options to boost its faltering economy | CNN Business

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    Hong Kong
    CNN
     — 

    Every few days for the past several weeks, a parade of Chinese leaders and policymakers have publicly vowed to do more to boost the sputtering economy, usually by promising to support the beleaguered private sector.

    Sometimes investors appear to have gained confidence from these pledges, sending shares higher.

    More often though, they’ve ignored the flurry of official messaging, hoping for more tangible stimulus measures that economists and analysts tell CNN are now unlikely to come because China has become too indebted to just pump up the economy like it did 15 years ago, during the global financial crisis.

    “We have had plenty of vague promises already, which don’t amount to a great deal so far,” said Robert Carnell, regional head of research for Asia-Pacific at ING Group.

    Except for some incremental steps to help the property market, currently mired in its worst slump in history, and tweaks to interest rates, there have been few signs of the government providing real money to struggling consumers or businesses.

    “Chinese policymakers appear unlikely to enact any major monetary or fiscal stimulus, likely fearing doing so could exacerbate China’s growing debt risks,” said Craig Singleton, senior China fellow at the Foundation for Defense of Democracies, a Washington-based non-partisan think tank.

    “At most, we can expect meager, mostly-supply side measures ostensibly aimed at, among other things, attracting more private capital and boosting electric vehicle ownership,” he added.

    After a strong start to the year after Covid restrictions were lifted, the world’s second largest economy has lost momentum.

    Since April, a slew of disappointing economic data and population statistics has sparked concern that China may be facing a period of much slower growth and possibly even heading for a future comparable to Japan’s.

    China’s economy barely grew in the April to June months compared with the previous quarter, as an initial burst in economic activity following the end of pandemic restrictions faded. Signs of deflation are becoming more prevalent, sparking concerns that China could enter a prolonged period of stagnation.

    Based on Japan’s experience in the 1990s, there is the risk that China is entering “a liquidity trap,” a scenario in which monetary policy becomes largely ineffective and consumers hold on to their cash rather than spend it, said Alicia Garcia-Herrero, chief economist for Asia Pacific for Natixis, a French investment bank.

    “In other words, there is a risk that Chinese corporates and households, pushed by their very negative sentiment about the economic outlook, prefer to disinvest and de-leverage in the light of falling revenue generation.”

    To get the economy back on track, Beijing needs to match its words with action, according to analysts.

    China “conspicuously” refrained from the giant Covid-era support seen in developed economies, according to analysts at the UBS Global Wealth Management. Fiscal stimulus, for instance, amounted to just a third of the aid offered in the United States, with no nationwide cash handouts.

    While this helped China avoid the rampant inflation shock seen elsewhere, disposable household income fell as wages and property asset values simultaneously stalled, they said in a recent research note.

    Interest rate cuts are not enough, unless they are accompanied by fiscal measures to boost demand.

    “A comprehensive policy mix — covering monetary and fiscal stimulus, including infrastructure, property, and consumption, alongside structural reforms,” would be helpful to rebuild confidence, they said.

    China’s economic trajectory is of great concern for global investors and policymakers who are counting on it to drive global expansion. But, Beijing appears to have run out of ammunition.

    Back in 2008, Chinese leaders rolled out a four trillion yuan ($586 billion) fiscal package to minimize the impact of the global financial crisis. It was seen as a success and helped boost Beijing’s domestic and international political standing as well as China’s economic growth, which soared to more than 9% in the second half of 2009.

    But the measures, which were focused on government-led infrastructure projects, also led to an unprecedented credit expansion and massive increase in local government debt, from which the economy is still struggling to recover. In 2012, Beijing said it wouldn’t be doing it again. The costs were just too high.

    China’s debt woes have only deepened during the Covid-19 pandemic, when three years of draconian restrictions and a real estate downturn drained the coffers of local government.

    Analysts estimate China’s outstanding government debts surpassed 123 trillion yuan ($18 trillion) last year. Nearly $10 trillion of that figure is so-called “hidden debt” owed by risky local government financing platforms.

    In June, Zhu Min, a former senior official at the International Monetary Fund who previously served at China’s central bank, was quoted by Bloomberg as telling the Summer Davos forum in Tianjin that he didn’t believe China would unveil massive stimulus, as the nation was already struggling with high debt levels.

    “No [fiscal stimulus] has been announced, which seems to indicate that Chinese policymakers are still wary about a too rapid increase in public debt,” said Garcia-Herrero.

    And even if Beijing were to take action, it would be less effective than in 2008, Garcia-Herrero said.

    “An infrastructure-led fiscal stimulus would need to be much bigger to have the same economic impact,” she said.

    It also implies that, if action is taken, public debt in China would jump well above the current 100% of GDP, which would place the economy “among the most indebted in the world,” she added.

    What’s worse, under President Xi Jinping, Beijing appears to have doubled down on its strategy to strengthen the party’s control over the economy, analysts said.

    A “correct response” to the economic slump would be for Beijing to return to a pro-market reform path and let the private sector play a bigger role, according to Derek Scissors, senior fellow at the American Enterprise Institute.

    But signs are “limited” that the government is considering that direction, he said.

    According to Singleton, “China’s new economic leadership team has few tools to meaningfully revive growth.”

    “Beijing’s steadfast, albeit unsurprising, refusal to acknowledge the role Xi’s economic mismanagement has played” in exacerbating China’s problems will gravely compound its broader systemic risks, he said.

    The property sector will likely be a drag on growth for years to come, Singleton said, adding that the country’s alarming debt levels and timid consumers domestically and abroad won’t help either.

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  • US Customs and Border Protection sends resources to remote Arizona area after increase in migrant crossings | CNN

    US Customs and Border Protection sends resources to remote Arizona area after increase in migrant crossings | CNN

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    CNN
     — 

    US border officials are increasing personnel and transportation resources at Ajo, Arizona, one of the most isolated and dangerous areas on the Southwest border, to deal with a recent increase in migrants and an ongoing heat wave.

    “Border Patrol has prioritized the quick transporting of noncitizens encountered in this desert environment, which is particularly dangerous during current weather conditions, to Border Patrol facilities where individuals can receive medical care, food and water,” a spokesperson for US Customs and Border Protection said in a statement.

    An excessive heat warning is in effect for Ajo until Sunday evening. “Dangerously hot conditions” and high temperatures of 106 to 112 degrees are expected, according to the National Weather Service.

    The spike in migration at Ajo is driven by human smuggling organizations shifting the flow of migrants to some of the most dangerous terrain, including the Cabeza Prieta National Wildlife Refuge and the Organ Pipe Cactus National Monument near Ajo, according to the Border Patrol.

    Currently, the average time in custody at the Ajo station is 15 hours, with some migrants spending a portion of those hours outside waiting to be transported, according to the Border Patrol. The agency said the fenced-in outdoor space is covered by a large canopy and migrants have access to large fans, meals, water, and bathroom facilities. The outdoor area is only used for adult men, while women, children, and members of vulnerable populations are held inside the station.

    “USBP has utilized outdoor shaded areas only when necessary and for very short times while they await onward transportation to larger facilities,” said the agency’s spokesperson. “The Ajo Border Patrol Station is not equipped to hold large number of migrants due to historic trends in this area.”

    After arriving at Ajo Station, migrants are screened and then transported to other locations for immigration processing, with the closest large Border Patrol facility or shelter 2.5 hours away, according to the Border Patrol.

    The agency would not disclose the Ajo facility’s capacity to CNN, citing security concerns.

    The Tucson Border Patrol sector encountered more than 24,000 migrants in June, making it the second-busiest sector on the southern border during the month, according to Border Patrol data.

    Border Patrol officials report no deaths have occurred at Ajo station or the surrounding areas since the beginning of the heat wave and since the increase in migrant encounters.

    Across the state, Arizonans have experienced extreme heat over the past weeks, with Phoenix recording 31 consecutive days with a high temperature of 110 degrees or above. The streak of high temperatures made July the hottest month on record for the city.

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  • Google’s antitrust showdown: What’s at stake for the internet search titan | CNN Business

    Google’s antitrust showdown: What’s at stake for the internet search titan | CNN Business

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    CNN
     — 

    Google will face off in court Tuesday against government officials who have accused the company of antitrust violations in its massive search business, kicking off a long-anticipated legal showdown that could reshape one of the internet’s most dominant platforms.

    The trial beginning this week in Washington before a federal judge marks the culmination of two ongoing lawsuits against Google that started during the Trump administration. Legal experts describe the actions as the country’s biggest monopolization case since the US government took on Microsoft in the 1990s.

    In separate complaints, the Justice Department and dozens of states accused Google in 2020 of abusing its dominance in online search by allegedly harming competition through deals with wireless carriers and smartphone makers that made Google Search the default or exclusive option on products used by millions of consumers. The complaints eventually consolidated into a single case.

    Google has maintained that it competes on the merits and that consumers prefer its tools because they are the best, not because it has moved to illegally restrict competition. Google’s search business provides more than half of the $283 billion in revenue and $76 billion in net income Google’s parent company, Alphabet, recorded in 2022. Search has fueled the company’s growth to a more than $1.7 trillion market capitalization.

    Now, the company is set to defend itself in a multiweek trial that could upend the way Google distributes its search engine to users. The case is expected to feature testimony from high-profile witnesses including former employees of Google and Samsung, along with executives from Apple, including senior vice president Eddy Cue. It is the first case to go to trial in a series of court challenges targeting Google’s far-reaching economic power, testing the willingness of courts to clamp down on large tech platforms.

    “This is a backwards-looking case at a time of unprecedented innovation,” said Google President of Global Affairs Kent Walker, “including breakthroughs in AI, new apps and new services, all of which are creating more competition and more options for people than ever before. People don’t use Google because they have to — they use it because they want to. It’s easy to switch your default search engine — we’re long past the era of dial-up internet and CD-ROMs.”

    The trial may also be a bellwether for the more assertive antitrust agenda of the Biden administration.

    In its initial complaint, the US government alleged in part that Google pays billions of dollars a year to device manufacturers including Apple, LG, Motorola and Samsung — and browser developers like Mozilla and Opera — to be their default search engine and in many cases to prohibit them from dealing with Google’s competitors.

    As a result, the complaint alleges, “Google effectively owns or controls search distribution channels accounting for roughly 80 percent of the general search queries in the United States.”

    The lawsuit also alleges that Google’s Android operating system deals with device makers are anticompetitive, because they require smartphone companies to pre-install other Google-owned apps, such as Gmail, Chrome or Maps.

    At the time the lawsuit was first filed, US antitrust officials did not rule out the possibility of a Google breakup, warning that Google’s behavior could threaten future innovation or the rise of a Google successor.

    Separately, a group of states, led by Colorado, made additional allegations against Google, claiming that the way Google structures its search results page harms competition by prioritizing the company’s own apps and services over web pages, links, reviews and content from other third-party sites.

    But the judge overseeing the case, Judge Amit Mehta in the US District Court for the District of Columbia, tossed out those claims in a ruling last month, narrowing the scope of allegations Google must defend and saying the states had not done enough to show a trial was necessary to determine whether Google’s search results rankings were anticompetitive.

    Despite that ruling, the trial represents the US government’s furthest progress in challenging Google to date. Mehta has said Google’s pole position among search engines on browsers and smartphones “is a hotly disputed issue” and that the trial will determine “whether, as a matter of actual market reality, Google’s position as the default search engine across multiple browsers is a form of exclusionary Conduct.”

    In January, meanwhile, the Biden administration launched another antitrust suit against Google in opposition to the company’s advertising technology business, accusing it of maintaining an illegal monopoly. That case remains in its early stages at the US District Court for the Eastern District of Virginia.

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  • Bipartisan House caucus leaders say ‘all options are on the table’ as shutdown looms | CNN Politics

    Bipartisan House caucus leaders say ‘all options are on the table’ as shutdown looms | CNN Politics

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    CNN
     — 

    With government funding slated to run out September 30, the leaders of the bipartisan House Problem Solvers Caucus told CNN on Sunday that “all options are on the table” to force a vote on their alternative stopgap plan to avert a shutdown.

    There is no consensus plan to keep the government funded, and persistent opposition by a bloc of conservatives to House GOP leadership’s agenda has made any effort to pass a stopgap bill in the House a major challenge.

    While the caucus leaders, Reps. Brian Fitzpatrick and Josh Gottheimer, said they hope House Speaker Kevin McCarthy puts the measure on the floor, they said they have spoken with the parliamentarian about other avenues and raised the possibility of using a discharge petition – an arcane procedural step – to force a vote.

    The procedural tool can be used to force a floor vote, but only if a majority of House members sign on in support. Discharge petitions rarely succeed because of how high the threshold is to clear.

    “We’re going to do whatever it takes to get that bill on the floor. … A discharge petition is one of several options, and a group of us met with the parliamentarian this past week to discuss all the options we have to force a vote on our bill,” Fitzpatrick, a Pennsylvania Republican, told CNN’s Dana Bash on “State of the Union.”

    Gottheimer, a New Jersey Democrat, added: “I think our plan is reasonable. And it deals with the extremes and … instead of burning the place down as, Speaker McCarthy said of the far right, it actually provides a reasonable, commonsense solution working with people like Brian Fitzpatrick who want to get things done.”

    The caucus last week endorsed a potential backup plan if House Republicans are unable to pass their stopgap bill alone. The bill would fund the government through January 11 and include Ukraine aid, disaster response and border security provisions.

    “This is a decision the speaker is gonna have to make. He can bring that reasonable bill to the floor that we’ve proposed, and I guarantee you’re gonna get Democrats (and) Republicans coming together to support it and we can keep the lights on,” Gottheimer said.

    McCarthy, who is under pressure and has faced threats of an ouster, said Saturday he still lacks support from a handful of GOP hardliners to put a stopgap measure on the floor, making a shutdown likely.

    Rep. Tim Burchett, one of the holdouts, told CNN on Sunday he is still a “no” on passing a stopgap funding bill.

    “No, ma’am,” the Tennessee Republican told Bash. “I think it’s completely blowing away our duties. We have a duty to pass a budget.”

    He also said he would strongly consider support for ousting McCarthy if the California Republican cuts a deal with Democrats to keep the government open.

    “That would be something I’d look strongly at, ma’am, if we do away with our duty that we said we’re going to do,” Burchett said.

    McCarthy has been hoping the momentum of a handful of appropriations bills, which will head to the House floor this week, would bring some of those holdouts into the fold. But Burchett’s comments Sunday are the latest indication that hope may be in vain.

    “We’re sticking to our guns and all of a sudden we’re the bad guys because we want to balance our budget,” Burchett said.

    Another holdout, Rep. Matt Gaetz of Florida, said Sunday that McCarthy is in “breach” of promises he made regarding government spending when elected speaker.

    “We should have separate single-subject spending bills. Kevin McCarthy promised that in January, he is in breach of that promise, so I’m not here to hold the government hostage, I’m here to hold Kevin McCarthy to his word,” Gaetz said on Fox News’ “Sunday Morning Futures.”

    Gaetz added it would be fine if some departments shut down for a few days if it meant measures such as the Homeland Security appropriations bill passed first.

    “If, you know, the (departments) of Labor and Education have to shut down for a few days as we get their appropriations in line, that’s certainly not something that is optimal, but I think it’s better than continuing on the current path we are to America’s financial ruin,” Gaetz said.

    The holdouts’ comments come as the White House urges Republicans to find a solution, warning that a government shutdown could threaten crucial federal programs.

    “Funding the government is one of the most basic responsibilities of Congress, and it’s time for Republicans to start doing the job America elected them to do,” President Joe Biden said Sunday at an event held by the Congressional Black Caucus Foundation.

    Speaking on Sunday to CNN’s Bash, Transportation Secretary Pete Buttigieg called on House Republicans to “come to their senses and keep the government running.”

    “This is something that can and should be prevented,” Buttigieg said on “State of the Union.” He echoed Biden administration talking points, saying Republicans should hold up their end of the agreement made this year during debt ceiling negotiations.

    The White House has warned of massive disruptions to air travel if the government shuts down, as tens of thousands of air traffic controllers and Transportation Security Administration personnel will have to work without pay.

    “They’re under enough stress as it is doing that job without having to come into work with the added stress of not receiving a paycheck,” Buttigieg said of air traffic controllers.

    He added, “The American people don’t want to shutdown. From what I can tell, the Senate is ready to go. The administration is ready to go. House Republicans need to come to their senses and keep the government running.”

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  • House Republicans are making a gamble with a possible Jim Jordan speakership | CNN Politics

    House Republicans are making a gamble with a possible Jim Jordan speakership | CNN Politics

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    CNN
     — 

    If House Republicans elect hard-charging Jim Jordan as speaker on Tuesday, they will be picking an election denier who is known for working to shut down the government rather than running it.

    The party would be ending its two-week speakership debacle, but it’d be elevating a ringleader in former President Donald Trump’s attempt to overthrow the 2020 election into a position that is second in the line of succession behind President Joe Biden.

    A Jordan speakership would represent a huge victory for Trump, given the Judiciary chairman’s record of using his power to target Democratic presidential candidates, including Biden and 2016 nominee Hillary Clinton. Before the midterm elections last year, for instance, Jordan said at the Conservative Political Action Conference that he’d use probes into the Biden administration to “frame up the 2024 race” for Trump.

    He has been as good as his word, working to highlight the ex-president’s claims that the federal government has been “weaponized” against him in an effort to distract from the four criminal trials the GOP front-runner is now facing. And Jordan has been a prominent player in the impeachment investigation opened against Biden, despite the failure of the GOP to provide evidence that the president personally profited from the business ventures of his son in places like China and Ukraine.

    Jordan’s hopes of becoming speaker increased dramatically over the weekend as he began to turn holdouts amid an intense lobbying campaign. Some key moderates who had previously said they wouldn’t back the Ohio Republican had changed course by Monday. But given the tiny House GOP majority, Jordan can only lose a small number of Republicans and still win the job in a vote in the full House, which is expected at noon on Tuesday. Florida Rep. Gus Bilirakis will be away from the Capitol on Tuesday, further complicating the vote math for Jordan, making it so that he can only lose three Republicans.

    But this is a temporary drop until the Florida congressman returns to Washington on Tuesday evening.

    Several high-profile dissidents still insist they will only vote for former Speaker Kevin McCarthy or are firmly against Jordan, who co-founded the conservative Freedom Caucus that was instrumental in the demise of the last three Republican speakers. Jordan’s opponents have cited his role in the run-up to the January 6, 2021, insurrection – when he discussed plans to object to the results – and have concerns that his hardline positions could alienate crucial swing voters next year.

    If Jordan wins the speakership, his reputation for resistance to compromise is likely to immediately fuel fresh fears of a government shutdown caused by Republican demands for massive spending cuts. Facing a right-wing revolt, McCarthy was forced to use Democratic votes to pass a stopgap funding measure. And he paid for his effort to stave off a national crisis, which could have hurt millions of Americans, with his job. Jordan has been among the right-wing Republicans who want to use their power to bulldoze through their agenda despite the fact that Democrats control the Senate and the White House.

    As speaker, Jordan would be in control of half of one of the three branches of the US government – a role that confers duties to the Constitution and the national interest far greater than those that weigh on individual members. By definition, he’d be an insider after years as an insurgent, a switch that could be a challenge. Fellow Ohioan and former Republican House Speaker John Boehner told CBS News in a 2021 interview referring to Jordan: “I just never saw a guy who spent more time tearing things apart – never building anything, never putting anything together.”

    A Jordan victory would mark one of the most significant milestones in Washington Republicans’ embrace of an extreme right-wing populist, nationalist ideology that is more dedicated to tearing political institutions down than using them to forge change. And it would reward the eight Republicans who voted with Democrats to topple McCarthy. More broadly, it would remove power from the party’s traditional Washington, DC, political establishment, which many of the party’s grassroots voters despise, and place the Freedom Caucus at the pinnacle of power in the House.

    The shift toward Jordan over the weekend, however, may also reflect a realization by lawmakers that the optics of continued chaos in the House are disastrous for the party and sends a message of American weakness amid a raging crisis in the Middle East.

    New York Rep. Marc Molinaro, who represents a district Biden would have won in 2020 under redrawn lines, announced Monday evening that he’s backing Jordan. “What I care deeply about is getting back to governing. And having been home over the weekend, I can tell you that most people I talk to just want us to fight inflation, just want us to secure the border, just want us to govern on their behalf. And truly they just want this House to function,” he told CNN.

    And if there is anyone who could keep far-right flamethrowers in line, it is Jordan. After all, he’s one of them. If wins the speakership, he’d potentially face a choice whether to at least seek a modicum of governance to show voters that the GOP can get results ahead of the 2024 election. Just as President Richard Nixon had the political cover as a hardline anti-Communist to forge an opening to Maoist China, Jordan might have more leeway than other potential Republican leaders to make painful concessions and keep his hardliners in line.

    But choosing Jordan to end the impasse would also represent a huge risk for the GOP. His close alliance with Trump, who has endorsed the Ohio Republican for the top job, could alienate moderate voters in districts that paved the way to the party’s narrow majority in last year’s midterms. His record of full bore confrontation could exacerbate a showdown with the Democratic Senate and the White House over spending that could shut down the government by the middle of November and cause a backlash against Republicans.

    And the qualities that his supporters see in Jordan – the fearsome use of power to drum up investigations against political opponents and a pugilistic refusal to find middle ground – are not those traditionally associated with successful speakers. Jordan has no history of bringing disparate factions of his party together – quite the opposite. His brand of politics is built around his history as a champion wrestler in college. “I look at it like a wrestling match,” Jordan told the New York Times earlier this year, referring to his staccato interrogations of witnesses in hearings that made him a hero on conservative media and a Trump favorite.

    Another knock on Jordan is that he’s not known as a prolific fundraiser – one of the most important jobs of a party leader in the House. McCarthy was known for his lucrative hauls that he used to boost candidates and foster loyalty from his supporters. In fact, Jordan has actively worked against some fellow members in the past, with the political arm of the Freedom Caucus backing primary challengers to 10 GOP incumbents over the last few cycles.

    The job of the House has traditionally been to pass laws. And by that measure, Jordan is one of the least effective legislators of his generation, according to the Center For Effective Lawmaking, a joint project of the University of Virginia and Vanderbilt University.

    Still, Jordan’s supporters worked to mitigate his liabilities heading into a floor vote that would force opponents to publicly renounce him at the risk of drawing primary challenges. House Armed Services Chairman Mike Rogers of Alabama, who had been vehemently anti-Jordan, flipped after what he described as “two cordial, thoughtful and productive” conversations with the prospective speaker and securing his support for a strong defense bill. Sources familiar with Jordan’s pitch to the GOP conference told CNN’s Annie Grayer and Melanie Zanona Monday that the Ohio congressman had promised to fundraise hard for Republicans across the country and that he would also do what he could to protect moderates – potentially by ensuring that they don’t face primary challenges next year from hardline pro-Trump candidates.

    However, Zanona and Grayer also reported that some big GOP donors had vowed not to invest in the House majority under Jordan and would instead concentrate their resources on flipping the Senate next year. That GOP coolness highlights how a 2024 Republican slate featuring Trump, the front-runner for the presidential nomination, and Jordan as the most powerful Republican in Washington could delight Democrats campaigning in the battleground districts that could decide the election.

    Rep. Don Bacon, who represents a swing district in Nebraska, emerged from a meeting of Republican lawmakers on Monday evening resolved not to support Jordan, after expressing concerns that handing him the speaker’s gavel would represent a victory for the hardliners who ended McCarthy’s tenure. Bacon said he was inclined to vote for McCarthy even though the former speaker is not standing, at least in a first ballot. “I’m going to vote tomorrow and we’ll take it after that one at a time,” Bacon said.

    Another anti-McCarthy holdout is Rep. Ken Buck of Colorado, who has said “part of” the reason he is opposed to Jordan is his behavior after the 2020 election. According to the House select committee that investigated the January 6, 2021, attack on the US Capitol, Jordan was a “significant player” in Trump’s efforts to overturn the election and to block the certification of Biden’s victory in Congress, including in multiple conversations with Trump and senior White House officials.

    But some key lawmakers appear to have made their peace with Jordan’s potential speakership, partly because of the damage being done to the GOP and their potential reelection prospects by self-indulgent internal battles. New York Rep. Mike Lawler, a freshman who is one of the most endangered Republicans next year and has been a strong supporter of McCarthy, called on the House to get back to work. “At the end of the day, we need to get back to the work of the American people,” Lawler told CNN’s Jake Tapper on Monday. He said he told Jordan on Friday that he was not a “hell no” and that he’d only back him if he had the votes to become speaker.

    He shrugged off attacks that are already coming from Democrats over his possible vote for Jordan.

    “They are going to attack me no matter what I do. That’s their job, that’s their objective. They want to get back into the majority,” Lawler told Tapper.

    “My constituents know who I am, they know where I stand on these issues,” Lawler said, noting how he had fought to raise the government’s borrowing limit earlier this year, averting a debt default, and to keep the government open.

    Lawler might be right. But the potential chaos and discord Jordan could sow may give voters fresh reasons to vote against Lawler by November of next year.

    This story has been updated with additional reporting.

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  • Landmark Google trial opens with sweeping DOJ accusations of illegal monopolization | CNN Business

    Landmark Google trial opens with sweeping DOJ accusations of illegal monopolization | CNN Business

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    CNN
     — 

    US prosecutors opened a landmark antitrust trial against Google on Tuesday with sweeping allegations that for years the company intentionally stifled competition challenging its massive search engine, accusing the tech giant of spending billions to operate an illegal monopoly that has harmed every computer and mobile device user in the United States.

    In opening remarks before a federal judge in Washington, lawyers for the Justice Department alleged that Google’s negotiation of exclusive contracts with wireless carriers and phone makers helped cement its dominant position in violation of US antitrust law.

    The Google case has been described as one of the largest US antitrust trials since the federal government took on Microsoft in the 1990s, and involves some similar arguments about the tying of multiple proprietary products. The multi-week trial is expected to feature witness testimony from Google CEO Sundar Pichai, as well as other senior executives or former employees from Google, Apple, Microsoft and Samsung.

    The effects of Google’s alleged misconduct are vast, DOJ lawyer Kenneth Dintzer told the court.

    “This case is about the future of the internet, and whether Google’s search engine will ever face meaningful competition,” Dintzer said, adding that Google pays more than $10 billion a year to Apple and other companies to ensure that Google is the default or only search engine available on browsers and mobile devices used by millions.

    Also anticompetitive, the Justice Department said, are Google’s contracts to ensure that Android devices come with Google apps and services — including Google search — preinstalled.

    The deals guarantee a steady flow of user data to Google that further reinforces its monopoly, the US government said, leading to other consequences such as harms to consumer privacy and higher advertising prices.

    “This feedback loop, this wheel has been turning for 12 years, and it always turns to Google’s advantage,” Dintzer said. The practice ultimately affects what consumers see in search results and prevents new rivals from gaining scale and market share, he added.

    For Google’s opening statement, attorney John Schmidtlein said that Apple’s decision to make Google the default search engine in its Safari browser demonstrates how Google’s search engine is the superior product consumers prefer.

    “Apple repeatedly chose Google as the default because Apple believed it was the best experience for its users,” he said.

    The Google case “could not be more different” from the historic Microsoft litigation at the turn of the millennium, Schmidtlein continued.

    Where the Microsoft case revolved around that company’s alleged harms to Netscape, a small browser maker, the Google case is based on claims that Google search has harmed a much larger and more powerful entity: Microsoft and its Bing search engine, Schmidtlein said.

    “Google competed on the merits to win preinstallation and default status” on consumer devices and browsers, he insisted, attacking Microsoft as a failed search engine developer.

    “The evidence will show that Microsoft’s Bing search engine failed to win customers because Microsoft did not invest [and] did not innovate,” Schmidtlein added. “At every critical juncture, the evidence will show that they were beaten in the market.”

    And Schmidtlein argued that forbidding Google from being able to compete for default status on browsers and devices would lead to its own harms to competition in search, stating that contracts ensuring that Android devices come with certain apps preinstalled such as Google Maps and Gmail also promotes competition — against Apple.

    “Google’s Android agreements are important components of a business model that has sustained the most important competitor to Apple for mobile devices in the United States,” Schmidtlein said.

    Google has previously said that consumers choose Google’s search engine because it is the best and that they prefer it, not because of anticompetitive practices.

    But DOJ prosecutors said Tuesday that they plan to present evidence in the case that Google knew what it was doing was illegal and that the company “hid and destroyed documents because they knew they were violating the antitrust laws.”

    “The harm from Google contracts affects every phone and computer in the country,” Dintzer said.

    Kent Walker, Google’s president of global affairs, and Rep. Ken Buck from Colorado were in attendance for the opening. Buck, a vocal tech industry critic, is the former top Republican on the House antitrust subcommittee — which in 2020 released a widely publicized investigative report finding that Amazon, Apple, Google and Facebook enjoyed “monopoly power.”

    Kent Walker, President of Global Affairs and Chief legal officer of Alphabet Inc., arrives at federal court on September 12, 2023 in Washington, DC. Google will defend its default-search deals in an antitrust trial against the U.S. Justice Department which begins today.

    The trial marks the culmination of two ongoing lawsuits against Google that started during the Trump administration.

    In separate complaints, the Justice Department and dozens of states accused Google in 2020 of abusing its dominance in online search but were eventually consolidated into a single case.

    Google’s search business provides more than half of the $283 billion in revenue and $76 billion in net income Google’s parent company, Alphabet, recorded in 2022. Search has fueled the company’s growth to a more than $1.7 trillion market capitalization.

    “This is a backwards-looking case at a time of unprecedented innovation,” said Walker in a statement, “including breakthroughs in AI, new apps and new services, all of which are creating more competition and more options for people than ever before. People don’t use Google because they have to — they use it because they want to. It’s easy to switch your default search engine — we’re long past the era of dial-up internet and CD-ROMs.”

    The trial may also be a bellwether for the more assertive antitrust agenda of the Biden administration.

    At the time the lawsuit was first filed, US antitrust officials did not rule out the possibility of a Google breakup, warning that Google’s behavior could threaten future innovation or the rise of a Google successor.

    Separately, a group of states, led by Colorado, made additional allegations against Google, claiming that the way Google structures its search results page harms competition by prioritizing the company’s own apps and services over web pages, links, reviews and content from other third-party sites.

    But the judge overseeing the case, Judge Amit Mehta in the US District Court for the District of Columbia, tossed out those claims in a ruling last month, narrowing the scope of allegations Google must defend and saying the states had not done enough to show a trial was necessary to determine whether Google’s search results rankings were anticompetitive.

    Despite that ruling, the trial represents the US government’s furthest progress in challenging Google to date. Mehta has said Google’s pole position among search engines on browsers and smartphones “is a hotly disputed issue” and that the trial will determine “whether, as a matter of actual market reality, Google’s position as the default search engine across multiple browsers is a form of exclusionary Conduct.”

    In January, meanwhile, the Biden administration launched another antitrust suit against Google in opposition to the company’s advertising technology business, accusing it of maintaining an illegal monopoly. That case remains in its early stages at the US District Court for the Eastern District of Virginia.

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  • New York AG accuses crypto firms of deceiving investors in $1 billion fraud | CNN Business

    New York AG accuses crypto firms of deceiving investors in $1 billion fraud | CNN Business

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    CNN
     — 

    The fallout from the colossal implosion of Sam Bankman-Fried’s crypto business is still rippling through the digital asset industry nearly a year later.

    On Thursday, New York’s attorney general filed a lawsuit against three digital asset firms that were caught up in the collapse of Bankman-Fried’s empire last fall — Gemini Trust, Genesis Global Capital and Digital Currency Group, parent company of Genesis. The lawsuit accused the companies of lying to investors and covering up more than $1 billion in losses.

    The AG’s office said that an investigation found Gemini, the crypto firm founded by Cameron and Tyler Winklevoss, deceived investors about significant risks associated with a lending service it ran jointly with Genesis. The program, called Gemini Earn, marketed itself as a low-risk investment in which customers could lend crypto assets to Genesis while earning interest payments as high as 8%.

    “These cryptocurrency companies lied to investors,” Attorney General Letitia James said in a statement. “And it was middle-class investors who suffered as a result.” At least 29,000 New Yorkers were among the 230,000 investors whose money was lost, James said.

    James’ lawsuit is the latest effort among US officials to crack down on the trillion-dollar crypto industry, which for years has operated in the shadows of traditional financial regulation. Crypto advocates argue that regulators have dragged their feet in establishing guidelines for digital assets, which they believe are distinct from traditional securities like stocks or bonds.

    In the immediate aftermath of the FTX crash, Genesis froze customer redemptions in its lending unit, citing market turmoil. The lending unit later filed for bankruptcy.

    According to the latest lawsuit, Gemini knew that Genesis’ loans were risky and, at one point, “highly concentrated” with Bankman-Fried’s crypto trading house Alameda Research. Bankman-Fried is currently on trial in federal court in New York, where he has pleaded not guilty to seven counts of fraud and conspiracy.

    “Gemini hid the risks of investing with Genesis, and Genesis lied to the public about its losses,” James said.

    The lawsuit also names former Genesis CEO Soichiro “Michael” Moro and Digital Currency Group CEO Barry Silbert.

    Gemini’s owners, the Winklevoss twins, have said Genesis owed more than $900 million to some 340,000 customers using the Earn program.

    The AG’s lawsuit follows another civil action brought by the Securities and Exchange Commission, which in January sued Genesis and Gemini for offering unregistered securities through the Earn product.

    Gemini responded to the latest suit Thursday with a statement on X (formerly Twitter), claiming that Gemini itself was the victim of a “massive fraud.”

    “The NY AG’s lawsuit confirms what we’ve been saying all along” — that Gemini, its customers and other creditors were lied to about Genesis’ finances. But the company said it “wholly” disagrees with the lawsuit.

    “Blaming a victim for being defrauded and lied to makes no sense and we look forward to defending ourselves against this inconsistent position.”

    A Genesis spokesperson said that “while there is no basis for the NYAG’s claims against Genesis, we have been cooperating with all authorities and intend to continue doing so.”

    “Genesis has not violated the law and continues to focus on maximizing recoveries for creditors in its Chapter 11 cases,” the spokesperson added.

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