Tag: Government policy

Major solar panel plant opens in US amid backdrop of industry worries about low-priced Asian imports

[ad_1]

A South Korean company has begun production at a huge new solar panel factory in Georgia even as industry leaders say surging Asian imports could dampen efforts to make more solar components in the United States.

Qcells, a unit of South Korea’s Hanwha Group, said Wednesday that it can now turn out enough solar panels to generate 5.1 gigawatts of power yearly at a two-factory complex in the northwest Georgia city of Dalton. That’s almost 40% of U.S. solar panel capacity, according to figures from the Solar Energy Industries Association.

Qcells’ opened its first factory in 2019 and an even larger plant in phases since, what the company describes as the largest solar investment in American history.

“It’s another milestone as we as a company really strive to become a global leader and a U.S. leader in solar manufacturing,” said Scott Moskowitz, Qcells head of market strategy and public affairs, speaking with The Associated Press after a plant tour Monday.

The company says its new plant is the first solar module factory in the U.S. to begin production since passage of President Joe Biden’s signature climate legislation. Qcells’ $208 million investment again shows how federal incentives are spurring a nationwide boom in renewable energy and electric vehicles.

Industry jitters about a flood of cheap solar panels from overseas show how dependent on federal policy the solar industry remains. That’s a threat in part because former President Donald Trump, the frontrunner for the 2024 Republican nomination, is hostile to renewable energy.

Qcells leaders say the new plant showcases more efficient equipment and processes, part of a much larger investment intended to bring key steps in solar manufacturing to the U.S. A solar panel, or module, is assembled from solar cells most commonly made from wafers cut from ingots of polysilicon.

Today, the company’s solar cells are imported from Asia. But 30 miles (50 kilometers) south of Dalton in Cartersville, Qcells is building a $2.3 billion complex to take polysilicon refined in Washington state and make ingots, wafers and solar cells — in addition to 3.3 gigawatts of solar modules. That plant is scheduled to open in phases starting next year.

Currently, no silicon ingots or wafers are made in the U.S. But Biden’s Inflation Reduction Act, besides offering a extra tax credit on American-made solar equipment, lets manufacturers earn incentives for every unit of polysilicon they refine and every wafer, cell and module they make. For example, Qcells earns a tax credit of 7 cents per watt for every panel it makes in Dalton, or $34.30 for every 490-watt residential panel made.

Even with that boost, solar industry leaders warn, factories will struggle to compete with a new spike in cheap Asian imports. They’re again urging federal officials to investigate whether solar panels are being dumped at unfairly low prices. Previous investigations have led to anti-dumping tariffs on panels made in China and Taiwan.

U.S. officials shouldn’t regard the spike as a normal market fluctuation, said Mike Carr, executive director of the Solar Energy Manufacturers for America Coalition, a group that includes Qcells. He argues Chinese component makers are pushing out cheap modules from southeast Asian factories, tanking panel prices to ensure Chinese dominance and smother U.S. manufacturing.

“This is likely to be the No. 1 new energy source in the 21st century,” Carr said. “It’s already cheaper than pretty much anything else to install. It is the path to meeting our climate goals. So I think it becomes a real national security kind of concern. The way OPEC is in oil markets, we don’t want to allow China to become that same controller of supply in solar.”

Qcells sees current low prices as a “near-term challenge” in achieving economies of scale and serving a long-term market, Moskowitz said. Beyond trade policy, he said, requiring federal agencies to buy American-made products and promoting panels produced with fewer carbon emissions could bolster Qcells.

Politics envelops the solar industry. Vice President Kamala Harris visited the plant earlier this year. At the state level, Republican Gov. Brian Kemp has wrestled with Democratic U.S. Sen. Jon Ossoff over political credit for electric vehicle and renewable energy investments flowing to Georgia.

“Out of all the places Qcells could have gone, they chose to operate and expand here in Georgia because of our unrivaled assets and the competitive package we put together,” Kemp said in a statement.

Ossoff and fellow Georgia Democratic Sen. Raphael Warnock note they authored the component incentives that benefit Qcells, emphasizing federal policy.

“Our state is emerging as the advanced energy capital of the nation, thanks to federal infrastructure and manufacturing policies that are benefiting Georgia more than any other state,” Ossoff said in a statement.

Qcells, for its part, praises both state and federal assistance.

“To build these markets up and to have them work, you need a whole government approach,” Moskowitz said.

[ad_2]

Source link

October 18, 2023
China’s economy grows 4.9% in Q3, beating expectations but slowing from previous quarter

[ad_1]

HONG KONG — China’s economy slowed in the third quarter, amid muted global demand, deflationary pressures and an ailing property sector.

The world’s second-largest economy grew 4.9% year-over-year in the July-September quarter, beating the 4.5% forecast by analysts but slowing from the 6.3% growth in the previous quarter, according to official data released Wednesday.

On a quarterly basis, the economy grew by 1.3% in the third quarter, compared to 0.8% growth in the April-to-June quarter.

For the first nine months of the year, China‘s economy grew 5.2% compared to the same period last year, suggesting it is on track with Beijing’s target of about 5% growth for 2023.

Officials from the National Bureau of Statistics cautioned that the external environment was becoming “more complex and grave” and warned that domestic demand remained insufficient.

Stephen Innes, managing partner at SPI Asset Management, said that although the numbers beat expectations China’s economy is “not out of the woods by any means.”

“This growth suggests a modest improvement in the Chinese economy. However, there are ongoing calls for increased policy support to maintain consistent growth, as there are concerns about the sustainability of the recovery,” Innes said in a note.

The Chinese government in recent months has unveiled a raft of policy support measures to shore up the economy, including infrastructure spending, cutting interest rates and easing curbs for home-buying in an attempt to revive the property sector.

China’s trade data, released earlier this week, showed that exports and imports continued to decline although they contracted at a slower rate than previously.

Beijing is aiming for 5% economic growth this year. Analysts estimate that China is likely to reach its goal, although that growth is likely to slow to 4.5% in 2024.

Earlier this year, growth was boosted as people flocked to shopping malls and restaurants after nearly three years of “zero-COVID” restrictions were removed in late 2022. However, growth from the post-pandemic recovery fizzled out sooner than expected.

Retail sales, an indicator of consumer demand, rose 5.5% in September from the same period in 2022.

Industrial output, which measures activity in the manufacturing, mining and utilities sectors, rose 4.5% in September compared to the same month a year earlier — a rate of growth similar to last month’s.

[ad_2]

Source link

October 17, 2023
Ardelyx wins long battle for FDA approval of kidney-disease treatment

[ad_1]

Ardelyx Inc.
ARDX,
-0.58%
on Tuesday won its long fight for U.S. regulatory approval of a treatment designed to help patients with chronic kidney disease.

The biopharma company said late Tuesday that the U.S. Food and Drug Administration approved tenapanor, marketed under the brand name Xphozah, for control of serum phosphorus in patients with chronic kidney disease on dialysis. A high level of phosphorus in the blood is often a sign of kidney damage and can lead to weak bones, joint pain, cardiovascular problems and other issues.

The approval concludes an extraordinary comeback for Xphozah. Ardelyx’s application for approval of the treatment was previously rejected by the FDA in July 2021, when the agency said the drug’s effect was “small and of unclear clinical significance.” To preserve cash, Ardelyx a few months later said it would cut its workforce by 65%, but it also pursued multiple appeals of the agency’s decision. An FDA advisory committee voted last November that the benefits of Xphozah outweigh its risks. The agency late last year ultimately granted Ardelyx’s appeal, and the company resubmitted its Xphozah application to the FDA in April.

More than 550,000 people in the U.S. have chronic kidney disease and are on maintenance dialysis. The vast majority of them have high phosphorus levels, also called hyperphosphatemia, according to Ardelyx.

High phosphorus levels “must be taken care of in these patients, and the current therapies are mostly insufficient in doing so,” Ardelyx CEO Mike Raab told MarketWatch.

Chronic kidney disease patients with high phosphorus levels have traditionally been treated with phosphate binders that can soak up phosphorus from food during digestion, but that approach can require patients to swallow a large number of pills. The Xphozah treatment requires two pills a day, “each the size of a Tic Tac,” Raab said.

The FDA approved Xphozah as add-on therapy in patients who can’t tolerate or have an inadequate response to phosphate binders, Ardelyx said in a release.

Xphozah, which will be Ardelyx’s second U.S. product launch, should be available sometime in November, Raab said.

Ardelyx will present updated data on Xphozah for hyperphosphatemia at an American Society of Nephrology meeting in early November, the company said in a release Monday.

Ardelyx shares jumped in late September after Japanese regulators approved tenapanor for hyperphosphatemia in adults with chronic kidney disease on dialysis.

Ardelyx shares fell 0.6% on Tuesday and have gained 21% in the year to date, while the S&P 500
SPX
has gained 13.9%.

[ad_2]

Source link

October 17, 2023
House speaker election: Jim Jordan isn’t a lock for the post before vote this afternoon

[ad_1]

It wasn’t clear Tuesday if Rep. Jim Jordan would be successful in his push to become the next speaker of the U.S. House of Representatives, with a floor vote drawing near and the Ohio Republican needing the support of a majority of the chamber.

The narrowly divided chamber is expected to vote in the early afternoon to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last Thursday.

An ally of former President Donald Trump who secured his party’s nomination for the role on Friday, Jordan needs to have 217 votes in his favor, so he can only afford to have four fellow Republicans vote against him as no Democrats are expected to support him. The House has 221 Republicans and 212 Democrats, with two vacancies.

While Jordan racked up significant endorsements Monday, more than four House Republicans are on record as being against him and others are leaning toward “no” votes, as shown in the chart below that comes from a CNN producer.

McCarthy needed 15 rounds of voting in January to secure the speakership. The California congressman repeatedly saw around 20 fellow Republicans vote against him before finally prevailing.

There are “plenty of reasons to think” House Judiciary Committee Chairman Jordan will “be able to grind it out once people are on record,” but the situation is still “unsettled,” said Liam Donovan, a former GOP operative who is now a principal at law and lobbying firm Bracewell, in a post on X.

One possible key is whether support for Jordan declines or not in a second round of voting, according to Matt Glassman, a senior fellow at Georgetown University’s Government Affairs Institute. He made that point in his post below.

Analysts have been discussing whether a Jordan speakership could mean a greater likelihood of a government shutdown that weighs on markets
SPX
in mid-November, when funding is due to run out from last month’s continuing resolution, or CR.

“Jordan voted against the CR a few weeks ago and has opposed most government spending bills in the past, so some people think he would be comfortable with a government shutdown next month. That view has some merit, however, as speaker, Jordan would be responsible for helping vulnerable House Republicans who represent competitive districts,” said Brian Gardner, Stifel’s chief Washington policy strategist, in a note.

“His new role could put Mr. Jordan in the position of having to make compromises with Democrats — new territory for him. The more likely outcome is that, if elected speaker, Jordan will support an extension of the CR.”

U.S. stocks
DJIA

COMP
were advancing Tuesday, helped by encouraging earnings from big banks. Investors also are weighing rising geopolitical risks and better-than expected retail sales.

[ad_2]

Source link

October 17, 2023
Biden didn’t make Israeli-Palestinian talks a priority. Arab leaders say region now paying the price

[ad_1]

WASHINGTON — From its first months in office, the Biden administration made a distinctive decision on its Middle East policy: It would deprioritize a half-century of high-profile efforts by past U.S. presidents, particularly Democratic ones, to broker a broad and lasting peace deal between Israel and the Palestinians.

Since Richard Nixon, successive U.S. administrations have tried their hands at Camp David summits, shuttle diplomacy and other big-picture tries at coaxing Israeli and Palestinian leaders into talks to settle the disputes that underlie 75 years of Middle East tensions. More than other recent presidents, Joe Biden notably has not.

Instead, administration officials early on sketched out what they called Biden’s policy of quiet diplomacy. They advocated for more modest improvements in Palestinian freedoms and living conditions under Israeli Prime Minister Benjamin Netanyahu’s hardline government, which has encouraged settlement in the Israeli-occupied West Bank and which includes coalition partners that oppose the U.S.-backed two-state solution. The less-ambitious approach fit with Biden’s determination to pivot his foreign-policy focus from Middle East hotspots to China.

But the long-term risks of sidelining the Israeli-Palestinian conflict exploded back into view with the Hamas attack on Israel on Oct. 7 and Israel’s heavy bombardment of Gaza in response. The United States’ angry Arab partners are pointing to America’s failure to actively engage as Israeli-Palestinian violence roars back to center stage.

Hamas militants’ bloody breakout from Gaza and Israel’s military escalating response have killed thousands of civilians in Israel and Gaza, prompted Biden to deploy carrier strike groups to the region, and threatens to spill conflict and flows of Palestinian refugees across borders.

In Cairo this weekend, Egyptian President Abdel Fattah el-Sissi was one of a succession of Arab leaders to warn Secretary of State Antony Blinken, who is scrambling through Middle East capitals to try to contain the conflict, that the Israel-Gaza war threatens the stability of the entire Middle East.

Biden is likely to hear the same as he meets with leaders of Jordan, Egypt and the Palestinian Authority in Jordan on Wednesday, after he travels to Israel.

Sissi, who fears the Israeli military offensive will push Gaza’s 2.3 million people across the border into Egypt, cast blame on the near-disappearance of any international pressure on Netanyahu’s government and Palestinians to return to negotiations.

Sissi cited “a buildup of outrage and hatred for more than 40 years” and the lack of any “horizon to solve the Palestinian cause; one that gives hope to the Palestinians” for a state with a capital in East Jerusalem.

Saudi Arabia, meanwhile, pointed to Saudis’ “repeated warnings of the danger of the explosion.”

Arab leaders “are very aware this is going to keep blowing up. And they might ride it out this time, they might ride it out next time, as they have in the past,” said Yezid Sayigh, a senior fellow at the Malcolm H. Kerr Carnegie Middle East Center in Beirut, Lebanon.

“But it’s not actually a comfortable position for them to be endlessly living in,” with endless cycles of Israeli and Palestinian wars that threaten the region’s peace and economies, said Sayigh, who accused the U.S. of encouraging Netanyahu to think there was no need to address Palestinian concerns.

Underscoring his administration’s diminished emphasis on the Israeli-Palestinian conflict, Biden’s call to Palestinian President Mahmoud Abbas this past weekend amid the building Gaza war was the American leader’s first since taking office.

In 1973, Arab nations’ surprise attack on Israel, and Arabs’ devastating oil embargo on the U.S. and other countries for their support of Israel in that fight, convinced U.S. leaders that a lasting resolution to Palestinian demands for statehood was in America’s strategic interest.

But after some early successes, recurring violence, the disappointments of past failed mediation efforts, and the scale of the disputes helped derail the U.S. push. By the time Biden, a strong supporter of the state of Israel, took office, any support for major negotiations among Israelis was faint.

To be sure, there’s little to suggest ambitious engagement by Biden on Israeli-Palestinian issues would have made immediate progress, or done anything to discourage the attack by Hamas, whose charter calls for the destruction of Israel.

Even after a 2021 burst of fighting between Hamas and Israel, administration figures argued that a big push on peace efforts would undermine more easily won goals, like cease-fires with Hamas.

Instead, Biden has enthusiastically followed the new path that predecessor Donald Trump had laid out on Middle East peacemaking: lobbying for so-called normalization deals with Arab countries, absent any Israeli-Palestinian accord.

Under Trump, the United Arab Emirates, Bahrain and Morocco all signed normalization deals establishing diplomatic relations with Israel.

Up until Oct. 7, Biden appeared to be fast closing in on brokering a normalization deal with the biggest prize of all, regional heavyweight Saudi Arabia.

Then, Hamas’s breakout from Gaza shattered what National Security Adviser Jake Sullivan had hailed as a period of Middle East calm. The violence has been the deadliest of five wars between Hamas and Israel, killing more than 1,400 people in Israel and nearly 2,800 in Gaza.

It’s not clear what happens to Biden’s normalization push now. Despite their angry comments and varying degrees of popular support among their public for the Palestinian cause, America’s Arab partners are pragmatists, and like the U.S. and Israel, adversaries of Hamas and other Iran-backed groups.

Additionally, the Biden administration’s immediate and all-in rallying to Israel’s mounting defense after Hamas’s Oct. 7 massacres may only heighten Saudi Crown Prince Mohammed bin Salman’s desire to lock in that kind of security alliance with the U.S. for the kingdom, many analysts are arguing.

“I think Gulf partners are looking at the quick, decisive response that the U.S. has provided Israel, and are incredibly jealous,” said Jonathan Lord, director of the Middle East security program at the Center for a New American Security think tank.

Brokering those alliances would stabilize the Middle East in themselves, no Israeli-Palestinian peace accord needed, supporters have argued.

The nightmare unfolding now for Israeli and Palestinian civilians argues differently, when it comes to Biden’s approach, critics say.

“As long as the core issues stay unresolved, ignoring them does not make them go away,” said Yousef Munayyer, who heads the Palestine-Israel program at the Arab Center, a Washington think tank. “And I think that’s a lesson for everybody.”

___

Associated Press writer Sam Magdy in Cairo contributed to this report.

[ad_2]

Source link

October 16, 2023
House speaker election: Jim Jordan racks up endorsements before vote at noon Tuesday

[ad_1]

Rep. Jim Jordan made progress Monday in his push to become the next speaker of the House of Representatives, winning endorsements from some fellow Republicans who just last week had refused to back him.

The narrowly divided chamber of Congress is expected to vote around noon Eastern Tuesday to select a speaker, with the move coming after former Speaker Kevin McCarthy was ousted two weeks ago and after No. 2 House Republican Steve Scalise ended his bid for the post last week.

GOP Rep. Ann Wagner of Missouri, who previously said a Jordan speakership was a non-starter for her, switched her stance on Monday. She said in a post on X that her colleague from Ohio “has allayed my concerns about keeping the government open with conservative funding, the need for strong border security, our need for consistent international support in times of war and unrest … as well as the need for stronger protections against the scourge of human trafficking and child exploitation.”

Similarly, GOP Rep. Mike Rogers of Alabama, who chairs the House Armed Services Committee, announced in a post on X that he was backing Jordan after saying last week that there was nothing that Jordan could do to win his support. Rogers pointed to an accord on an annual Pentagon bill, the National Defense Authorization Act, saying he and Jordan had “agreed on the need for Congress to pass a strong NDAA, appropriations to fund our government’s vital functions, and other important legislation like the Farm Bill.”

Republican Rep. Vern Buchanan of Florida offered his support for Jordan as well on Monday, though he noted that he’s “deeply frustrated by the way this process has played out.” Another endorsement came from GOP Rep. Ken Calvert of California, who chairs the House Appropriations Committee’s defense subpanel.

Jordan — who has been endorsed by former President Donald Trump — sent a letter to his colleagues in which he called for coming together after a chaotic two weeks, saying: “It is time we unite to get back to work on behalf of the American people.” The congressman, a co-founder of the hardline House Freedom Caucus and chairman of the House Judiciary Committee, also told CNN that he was confident about Tuesday’s vote, saying: “I feel good about it.”

Analysts have been warning that the process of finding a replacement for McCarthy is preventing the House from addressing crucial matters, such as avoiding a government shutdown next month and supporting Israel in its war against Hamas.

House Republicans made Jordan their nominee for speaker on Friday, but he drew just 124 votes while 81 lawmakers backed another candidate for speaker, GOP Rep. Austin Scott of Georgia. In another round of voting on Friday, Jordan still had 55 colleagues voting against him, but he now appears to be flipping some of them to his side.

One betting market, Smarkets, was giving Jordan a 33% chance of becoming speaker.

Spending cuts and shutdown coming?

Having Jordan as speaker could mean a 1% cut in defense
ITA
and non-defense spending, noted Philip Wallach, senior fellow at the American Enterprise Institute, a conservative think tank. That’s because this year’s debt-limit deal includes a provision that calls for such reductions if there aren’t bipartisan agreements on a dozen funding bills before Jan. 1 and instead a reliance on short-term measures known as continuing resolutions, or CRs.

“It is now clear,” Wallach said during an AEI event on Monday, that Jordan’s “plan is to have us live off continuing resolutions and implement this 1% cut.”

“That’s a concrete thing where he could say, ‘Well, we’re moving in the right direction. We’ve taken a hard stand,’” the AEI expert added.

The CEO of one financial advisory firm also sees standoffs in the future.

“We expect the next U.S. speaker will be less inclined to make deals than McCarthy; in many ways it makes more sense for them, politically, not to be a deal-maker in the current environment,” said deVere Group’s Nigel Green in a statement.

“We believe that a U.S. government shutdown is now more likely with a new speaker of the House, and this has the potential to create a domino effect in global financial markets
SPX.
”

BTIG analysts Isaac Boltansky and Isabel Bandoroff said the speaker drama suggests that next year’s election will also be full of twists and turns.

“We have followed every twist and turn of the speakership race, and there is only one takeaway we can share with absolute certainty: This confirms that the 2024 election cycle will be exhausting, volatile, and just downright weird from beginning to end,” they wrote in a note.

U.S. stocks
DJIA

COMP
closed higher Monday, as investors looked ahead to earnings season and unwound the flight-to-safety trades seen last week on fears the Israel-Hamas war could escalate into a wider conflict.

[ad_2]

Source link

October 16, 2023
Biden picks Boebert as his foil for economic message in Colorado

[ad_1]

President Joe Biden is headed to Colorado to tout his clean energy policies in the congressional district of Rep. Lauren Boebert, a combative Trump loyalist

ByCHRIS MEGERIAN Associated Press

October 16, 2023, 5:05 AM

President Joe Biden arrives to speak at Tioga Marine Terminal, Friday, Oct. 13, 2023, in Philadelphia. (AP Photo/Evan Vucci)

The Associated Press

WASHINGTON — President Joe Biden is visiting the Colorado congressional district of Rep. Lauren Boebert, a combative Trump loyalist, on Monday as he draws a sharper contrast between the Democratic and Republican economic agendas.

Boebert has described Biden’s Inflation Reduction Act, the president’s signature domestic legislation and the source of hundreds of billions of dollars for clean energy incentives, as “a massive failure” that “needs to be repealed.”

But Biden is out to demonstrate otherwise when he visits CS Wind, the world’s largest facility for wind tower manufacturing, in the town of Pueblo. The company is undergoing a $200 million expansion that is expected to create 850 jobs by 2026 with help from the tax incentives in the law.

Pueblo is one of the anchors of Colorado’s sprawling Third Congressional District, which covers more ground than the state of Pennsylvania. Boebert won her seat in 2020 and barely held on to it during the 2022 midterms.

Biden’s trip comes at a moment of maximum chaos for House Republicans, who ousted Rep. Kevin McCarthy as their speaker but have been unable to settle on a replacement. Rep. Jim Jordan, a prominent ally of Donald Trump, is the current leading candidate to replace McCarthy, but victory for him is uncertain.

Despite low unemployment and slowing inflation, Biden has been struggling to convince Americans that his policies are good for the U.S. economy.

An August poll from The Associated Press-NORC Center for Public Affairs Research said just 36% of U.S. adults approve of Biden’s handling of the economy, roughly where his numbers have stood for a year and a half.

The president and other top administration officials have been traveling the country to promote their “Investing in America” agenda. Last week, the president visited a marine terminal in Philadelphia, where he announced that the area would become one of seven regional hubs for producing and delivering hydrogen fuel.

“I truly believe this country is about to take off, for the first time in a long time we’re actually investing in America,” Biden said.

[ad_2]

Source link

October 16, 2023

Microsoft’s Activision Deal Gets Green Light From UK Regulator

[ad_1]

By Kim Mackrael

Microsoft’s acquisition of videogame company Activision Blizzard won approval from U.K. competition authorities, clearing a path for the companies to close the $75 billion deal after a lengthy struggle with regulators.

The U.K.’s Competition and Markets Authority said Friday that the proposed deal no longer poses a major threat to competition in cloud gaming. The shift comes after Microsoft offered to restructure the deal by forfeiting cloud-streaming rights for “Call of Duty” and other popular Activision franchises in much of the world.

-Sarah E. Needleman contributed to this article

Write to Kim Mackrael at Kim.mackrael@wsj.com

[ad_2]

Source link

October 12, 2023

‘Banks fail. It’s OK,’ says former FDIC chair Sheila Bair.

[ad_1]

Higher interest rates may be painful in the short term, but banks, savers and the financial ecosystem will be better off in the long run, said Sheila Bair, former chair of the Federal Deposit Insurance Corp.

“When money is free, you squander it,” Bair said in an interview with MarketWatch. “It’s like anything. If it doesn’t cost you anything, you’re going to value it less. And we’ve had free money for quite some time now.”

Bair, who led the FDIC from 2006 to 2011, caused a stir recently in criticizing “moonshots,” the crypto industry and “useless innovations” like Bored Ape NFTs, which proliferated because of speculation and near-zero interest rates.

Her main message has been that the path to higher rates, while potentially “tricky,” ultimately will lead to a more stable financial system, where “truly promising innovations will attract capital” and where savers can actually save.

Former FDIC Chair Sheila Bair was dubbed “the little guy’s protector in chief” by Time Magazine in the wake of the subprime mortgage crisis.

Bair sat down for an interview with Barron’s Live, MarketWatch edition, to talk about the ripple effects of higher rates, what could trigger another financial crisis and why more regional banks sitting on unrealized losses could fail in the wake of Silicon Valley Bank’s collapse in March.

“We probably will have more bank failures,” Bair said. “But you know what? Banks fail. It’s OK. The system goes on. It’s important for people to understand that households stay below the insured deposit caps.”

The FDIC insures bank deposits up to $250,000 per account. It also has overseen 565 bank failures since 2001.

“I know borrowing costs are going up, but your rewards for saving it are going up too,” she said. “I think that’s a very good thing.”

However, Bair isn’t focused only on money traps and pitfalls for grown-ups. She also has two new picture books coming out that aim to explain big financial themes to young readers, including where easy-money ways, speculation and inflation come from.

“One thing that I’ve learned from the kids is to not ask them what a loan is, because when I did that, a little hand when up, and she said: ‘That’s when you’re by yourself,’” Bair said.

[ad_2]

Source link

October 11, 2023
X promises ‘highest level’ response on posts about Israel-Hamas war. Misinformation still flourishes

[ad_1]

The social media platform X, formerly known as Twitter, says it is struggling with a flood of posts sharing graphic media, violent speech and hateful conduct about the Israel-Hamas war. But it has received a broadside of criticism, including from a top European Union official, questioning the adequacy of the response.

Outside watchdog groups said misinformation about the war abounds on the platform, whose workforce — including its content moderation team — was gutted by billionaire Elon Musk after he bought it last year.

Fake and manipulated imagery circulating on X include “repurposed old images of unrelated armed conflicts or military footage that actually originated from video games,” said a Tuesday letter to Musk from European Commissioner Thierry Breton. “This appears to be manifestly false or misleading information.”

Breton, the EU’s digital rights chief, also warned Musk that authorities have been flagging “potentially illegal content” that could violate EU laws and “you must be timely, diligent and objective” in removing it when warranted.

San Francisco-based X didn’t immediately respond to a request for comment about Breton’s letter.

A post late Monday from X’s safety team claimed it is treating the crisis with utmost effort: “In the past couple of days, we’ve seen an increase in daily active users on @X in the conflict area, plus there have been more than 50 million posts globally focusing on the weekend’s terrorist attack on Israel by Hamas. As the events continue to unfold rapidly, a cross-company leadership group has assessed this moment as a crisis requiring the highest level of response.”

That includes continuing a policy frequently championed by Musk of letting users help rate what might be misinformation, which causes those posts to include a note of context but not disappear from the platform.

The struggle to identify reliable sources for news about the war was exacerbated over the weekend by Musk, who on Sunday posted the names of two accounts he said were “good” for “following the war in real-time.” Analyst Emerson Brooking of the Atlantic Council called one of those accounts “absolutely poisonous.” Journalists and X users also pointed out that both accounts had previously shared a fake AI-generated image of an explosion at the Pentagon, and that one of them had posted numerous antisemitic comments in recent months. Musk later deleted his post.

Brooking posted on X that Musk had enabled fake war reporting by abandoning the blue check verification system for trusted accounts and allowing anyone to buy a blue check.

Brooking said Tuesday that it is “significantly harder to determine ground truth in this conflict as compared to Russia’s invasion of Ukraine” last year and “Elon Musk bears personal responsibility for this.”

He said Musk’s changes to the X platform have made it impossible to quickly assess the credibility of accounts while his “introduction of view monetization has created perverse incentives for war-focused accounts to post as many times as possible, even unverified rumors, and to make the most salacious claims possible.”

“War is always a cauldron of tragedy and disinformation; Musk has made it worse,” he added. Further, Brooking said via email “Musk has repeatedly and purposefully denigrated the idea of an objective media, and he made platform design decisions that undermine such reporting. We now see the result.”

Part of Musk’s drastic changes over the past year included removing many of the people responsible for moderating toxic content and harmful misinformation.

One former member of Twitter’s public policy team said the company is having a harder time taking action on posts that violate its policies because there aren’t enough people to do that work.

“The layoffs are undermining the capacity of Twitter’s trust and safety team, and associated teams like public policy, to provide needed support during a critical time of crisis,” said Theodora Skeadas, one of thousands of employees who lost their jobs in the months after Musk bought the company.

X says it changed one policy over the weekend to enable people to more easily choose whether or not to see sensitive media without the company actually taking down those posts.

“X believes that, while difficult, it’s in the public’s interest to understand what’s happening in real time,” its statement said.

The company said it is also removing newly created Hamas-affiliated accounts and working with other tech companies to try to prevent “terrorist content” from being distributed online. It said it is “also continuing to proactively monitor for antisemitic speech as part of all our efforts. Plus we’ve taken action to remove several hundred accounts attempting to manipulate trending topics.”

Linda Yaccarino, whom Elon Musk named in May as the top executive at X, withdrew from an upcoming three-day tech conference where she was scheduled to speak, citing the need to focus on how the platform was handling the war.

“With the global crisis unfolding, Linda and her team must remain fully focused on X platform safety,” X told the organizers of the WSJ Tech Live conference being held next week in Laguna Beach, California.

—-

Associated Press writer Ali Swenson contributed to this report.

[ad_2]

Source link

October 11, 2023
Family Dollar recalls dozens of P&G, J&J, Colgate products in 23 states due to incorrect temperature storage

[ad_1]

Family Dollar voluntarily recalled dozens of over-the-counter drugs, products and medical devices sold at its stores because they had been stored at improper temperatures, according to the Food and Drug Administration late Tuesday.

On the FDA’s website, the regulator said products affected by the recall were stored “outside of labeled temperature requirements by Family Dollar and inadvertently shipped to certain stores on or around June 1, 2023 through September 21, 2023.”

Brands affected by the recall include Procter & Gamble’s
PG,
+0.99%
Crest, Vicks and Pepto Bismol; Colgate
CL,
+0.26%
; Johnson & Johnson Inc.’s
JNJ,
-0.11%
Tylenol and Listerine; and Bayer’s
BAYN,
+3.04%
Aleve, according to a list provided by the FDA.

The items were sold at stores in Alabama, Arkansas, Arizona, California, Colorado, Florida, Georgia, Idaho, Kansas, Louisiana, Mississippi, Montana, North Dakota, Nebraska, New Mexico, Nevada, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington and Wyoming, between June 1 and Oct. 4, the FDA said.

Family Dollar was acquired by Dollar Tree Inc.
DLTR,
+3.26%
in a deal that closed in July 2015.

[ad_2]

Source link

October 10, 2023
California Gov. Gavin Newsom vetoes bill aimed at limiting the price of insulin

[ad_1]

California Gov. Gavin Newsom has vetoed a bill aimed at limiting the price of insulin

FILE — California Gov. Gavin Newsom answers questions during a news conference in Sacramento, Calif., on Tuesday Sept, 26, 2023. On Saturday, Oct. 7, Newsom vetoed a bill aimed at limiting the price of insulin. (AP Photo/Rich Pedroncelli, File)

The Associated Press

SACRAMENTO, Calif. — Gov. Gavin Newsom has vetoed a bill that would have stopped insurance companies from charging more than $35 for insulin.

The bill would have banned health plans and disability insurance policies from imposing any out-of-pocket expenses on insulin prescription drugs above $35 for a 30-day supply. That would have included deductibles and co-pays.

Newsom, a Democrat, said earlier this year that California would soon start making its own brand of insulin. The state has a $50 million contract with the nonprofit pharmaceutical company Civica Rx to manufacture the insulin under the brand CalRx. The state would sell a 10 milliliter vial of insulin for $30.

“With CalRx, we are getting at the underlying cost, which is the true sustainable solution to high-cost pharmaceuticals,” Newsom wrote in a message explaining why he vetoed the bill on Saturday. “With copay caps however, the long-term costs are still passed down to consumers through higher premiums from health plans.”

State Sen. Scott Wiener, a Democrat from San Francisco who crafted the bill, called Newsom’s veto “a major setback that will keep tens of thousands of diabetic Californians trapped in the terrible choice between buying insulin and buying food.”

“This is a missed opportunity that will force them to wait months or years for relief from the skyrocketing costs of medical care when they could have had it immediately,” Wiener said in a news release.

Insulin is a hormone produced by the pancreas that converts sugar into energy. People who have diabetes don’t produce enough insulin. People with Type 1 diabetes must take insulin every day to survive.

In January, California Attorney General Rob Bonta sued the companies that make and promote most of the nation’s insulin, accusing them of colluding to illegally increase the price.

In March, the largest insulin makers announced they would voluntarily reduce the price of their products.

[ad_2]

Source link

October 8, 2023
Hamas attack on Israel thrusts Biden into Mideast crisis and has him fending off GOP criticism

[ad_1]

WASHINGTON — The deadly Hamas militant attack on Israel and the massive retaliation it provoked from Jerusalem have thrust President Joe Biden into a Middle East crisis that risks expanding into a broader conflict and has left him fending off criticism from GOP presidential rivals that his administration’s policies led to this moment.

The potential for prolonged and expanding violence could test Biden’s leadership on both the world stage and at home as he tries to navigate between demonstrating unflinching support for Israel and fostering a broader peace in the combustible Mideast, where sympathetic militants were quick to loudly praise the action by Hamas. Hundreds have been killed on both sides.

Lebanon’s Hezbollah group welcomed the attack as a response to “Israeli crimes.” The Iran-backed group, which holds similar goals as Hamas for the destruction of the Israeli state, fired rockets and shells on Sunday at three Israeli positions, drawing a response from Israel’s military with armed drones. A senior adviser to Iran’s supreme leader lauded the operation by Hamas, which said it was ready for a potentially long fight.

Several 2024 Republican presidential contenders immediately tried to pin a portion of the blame on Biden. They sought to tie his recent decision to release $6 billion in blocked Iranian funds in exchange for freeing five Americans who had been detained in Iran to Saturday’s complex attack by air, land and sea. The White House pushed back fiercely against the GOP criticism, noting that the money unfrozen last month in the prisoner swap has yet to be spent by Iran and can only be used for humanitarian needs.

Iran has historically maintained strong ties with both Palestinian Hamas and Hezbollah.

A senior Biden administration official who briefed reporters on the condition of anonymity said it was “too early to say whether the state of Iran was directly involved in planning or supporting” the complex attack but noted Iran’s deep ties to Hamas.

Biden and top aides spent Saturday consulting with European and Middle East leaders, including Israeli Prime Minister Benjamin Netanyahu. In remarks before reporters at the White House, Biden called the attacks “unconscionable” and pledged his administration would ensure Israel has “what it needs to defend itself.”

“Let me say this as clearly as I can: This is not a moment for any party hostile to Israel to exploit these attacks to seek advantage,” Biden said.

The attack only adds new complications as the Biden administration and Iran are locked in disputes over Tehran’s nuclear program. Iran says the program is peaceful, but it now enriches uranium closer than ever to weapons-grade levels. Still, the administration hasn’t given up hope on reviving a deal brokered during the Obama administration — and scrapped during the Trump White House — that eased sanctions on Iran in return for curbs to its nuclear program.

Biden administration officials have also been working on brokering a normalization of relations between Israel and Saudi Arabia, the most powerful and wealthy Arab state. Such a deal has the potential to reshape the region and boost Israel’s standing in historic ways.

But brokering such a deal was already seen as a heavy lift as the kingdom has said it won’t officially recognize Israel before a resolution to the decades-long Israeli-Palestinian conflict. The new conflict adds an enormous new roadblock to Biden’s ambitions, although the administration official said the White House did not see the Hamas attack derailing the effort.

Saudi Arabia’s foreign ministry in a statement did not condemn the Hamas attack, but noted the kingdom’s “repeated warnings of the dangers … of the situation as a result of the continued occupation, the deprivation of the Palestinian people of their legitimate rights, and the repetition of systematic provocations against its sanctities.”

Netanyahu vowed in his own national address to avenge the startling attacks, pledging to “bring the fight to them with a might and scale that the enemy has not yet known.”

Hamas fighters have taken an unknown number of civilians and soldiers captive into Gaza, in harrowing scenes posted on social media. Those images — and the mounting death toll — come 50 years and a day after invading forces from Egypt and Syria caught Israel by surprise with the launch of an attack on Israel that set off the 19-day conflict that became known as the Yom Kippur War.

Jonathan Schanzer, an analyst at the Washington think tank Foundation for Defense of Democracies, said Biden did “a good job” at keeping Israel’s critics, particularly his fellow Democrats, at bay while Netanyahu sought to achieve his military objectives against Hamas during their last major conflict, an 11-day war in 2021. It will likely be tougher this time around.

“There will be mistakes that often happen on the battlefield, no military is perfect. That’s when I think the president will come under fire from his left flank,” Schanzer said.

Some in the 2024 Republican field were quick to place blame squarely on Biden for the Hamas assault.

Former President Donald Trump charged that the U.S. is perceived as being “weak and ineffective” on the global stage under Biden, opening the door to hostility against Israel. Florida Gov. Ron DeSantis accused Biden of “policies that have gone easy on Iran” and have “helped to fill their coffers.” And South Carolina Sen. Tim Scott alleged the attack was “the Biden $6 billion ransom payment at work,” a reference to the prisoner deal.

Biden administration officials pushed back against the argument.

“Let’s be clear: the deal to bring U.S. citizens home from Iran has nothing to do with the horrific attack on Israel,” said State Department spokesman Matthew Miller. “Not a penny has been spent, and when it is, it can only go for humanitarian needs like food and medicine.”

Biden administration officials did not address whether Iran, in anticipation of using the money — now held in Qatari banks — for food, medicine, medical supplies and agricultural products, may have diverted other funds to Hamas or other proxies.

In a briefing with Senate Foreign Relations Committee staff on Saturday, administration officials said the U.S. had warned Iran “through interlocutors” that direct involvement in the Gaza situation would imperil any future initiatives the U.S. might consider with the Islamic Republic, according to a congressional aide familiar with the session.

The officials did not elaborate on who the interlocutors were or what future initiatives would be in jeopardy, although acting deputy Secretary of State Victoria Nuland and the top U.S. diplomat for the Mideast, Barbara Leaf, both spoke to officials in Lebanon about the situation. Some Lebanese officials maintain contact with Iran, which supports the militant group Hezbollah in the country.

Another point of criticism leveled at the administration by Republicans is that its decision shortly after taking office to reverse a Trump-era ban on assistance to the Palestinians, including civilians in Gaza, may have helped fund the operation.

Administration officials roundly rejected this, saying their efforts to help Palestinian civilians in Gaza and elsewhere do not involve money that Hamas can use or divert.

___

Associated Press writers Seung Min Kim, Jill Colvin in New York and Thomas Beaumont in Waterloo, Iowa contributed to this report.

[ad_2]

Source link

October 8, 2023
UK Supreme Court weighs if it’s lawful for Britain to send asylum-seekers to Rwanda

[ad_1]

LONDON — The British government’s contentious policy to stem the flow of migrants faces one of its toughest challenges this week as the U.K. Supreme Court weighs whether it’s lawful to send asylum-seekers to Rwanda.

The Conservative government is challenging a Court of Appeal ruling in June that said the policy intended to deter immigrants from risking their lives crossing the English Channel in small boats is unlawful because the East African country is not a safe place to send them.

Three days of arguments are scheduled to begin Monday with the government arguing its policy is safe and lawyers for migrants from Vietnam, Syria, Iraq, Iran and Sudan contending it’s unlawful and inhumane.

The hearing comes as much of Europe and the U.S. struggle with how best to cope with migrants seeking refuge from war, violence, oppression and a warming planet that has brought devastating drought and floods.

Prime Minister Rishi Sunak has vowed to “stop the boats” as a top priority to curb unauthorized immigration. More than 25,000 people are estimated to have arrived in the U.K. by boat as of Oct. 2, which is down nearly 25% from the 33,000 that had made the crossing at the same time last year.

The policy is intended to put a stop to the criminal gangs that ferry migrants across one of the world’s busiest shipping lanes by making Britain an unattractive destination because of the likelihood of being given a one-way ticket to Rwanda.

Consequences of the crossing have been deadly. In August, six migrants died and about 50 had to be rescued when their boat capsized after leaving the northern coast of France. In November 2021, 27 people died after their boat sank.

The government claims the policy is a fair way to deal with an influx of people who arrive on U.K. shores without authorization and that Rwanda is a safe “third country” — meaning it’s not where they are seeking asylum from.

The U.K. and Rwandan governments reached a deal more than a year ago that would send asylum-seekers to the East African country and allow them to stay there if granted asylum.

So far, not a single person has been sent there as the policy has been fought over in the courts.

Human rights groups have argued its inhumane to deport people more than 4,000 miles (6,400 kilometers) to a place they don’t want to live. They have also cited Rwanda’s poor human rights record, including allegations of torture and killings of government opponents.

A High Court judge initially upheld the policy, saying it didn’t breach Britain’s obligations under the U.N. Refugee Convention or other international agreements. But that ruling was reversed by a 2-1 decision in the Court of Appeal that found that while it was not unlawful to send asylum-seekers to a safe third country, Rwanda could not be deemed safe.

The government argues the Court of Appeal had no right to interfere with the lower court decision and got it wrong by concluding deportees would be endangered in Rwanda and could face the prospect of being sent back to their home country where they could face persecution. The U.K. also says that the court should have respected the government’s analysis that determined Rwanda is safe and and that its government would abide by the terms of the agreement to protect migrants’ rights.

Attorneys for the migrants argue that there is a real risk their clients could be tortured, punished, or face inhumane and degrading treatment in violation of the European Convention on Human Rights and they cite Rwanda’s history of abusing refugees for dissent. The second flank of their argument is that the home secretary did not thoroughly investigate how Rwanda determines the status of refugees.

One of the claimants asserts that the U.K. must still abide by European Union asylum procedures despite its Brexit split from the EU that became final in 2020. EU policies only allow asylum-seekers to be sent to a safe third country if they have a connection to it.

Even if the courts allow the policy to proceed, it’s unclear how many people will be flown to Rwanda at a cost estimated to be 169,000 pounds ($206,000) per person.

And there’s a chance it wouldn’t be in place for long. The leader of the opposition Labour Party, Keir Starmer, said Sunday that he would scrap the policy if elected prime minister.

Polls show Labour has an advantage in an election that must be called by the end of next year.

“I think it’s the wrong policy, it’s hugely expensive,” Starmer told the BBC.

The court is not expected to rule immediately after the hearing.

___

Follow AP’s coverage of global migration at https://apnews.com/hub/migration

[ad_2]

Source link

October 8, 2023
Exxon-Pioneer merger: Here’s why FTC’s Khan may shy from a fight with the ‘800 pound gorilla.’

[ad_1]

Exxon Mobil Corp.
XOM,
-1.67%
is reportedly nearing a deal to buy energy-exploration company Pioneer Natural Resources Co.
PXD,
+10.45%
for $60 billion, a combination that could shake up Texas’ storied and oil-rich Permian Basin.

It’s also bound to attract attention from the Biden Administration’s antitrust enforcers, including Federal Trade Commission Chair Lina Khan, given the paramount political importance of oil and gasoline prices.

“You can be sure that the FTC will give this acquisition a serious look,” Stephen Calkins, former general counsel at the FTC told MarketWatch, adding that the agency has long paid special attention to the oil and gas industry at the behest of Congress, which has long been sensitive to anything that may increase prices at the pump.

Read more: Exxon near $60 billion deal to buy shale driller Pioneer Natural Resources

The high cost of living after several years of historic inflation is one of President Joe Biden’s most important political vulnerabilities ahead of the 2024 election. A recent poll by Investors Business Daily showed only 24% of voters approve of his economic record.

The president has campaigned on gasoline prices specifically, telling an audience in Maryland last month, “I’m going to get those gas prices down again, I promise you.”

But any decision to challenge a merger must be based on the facts of the market in question and whether it would present a threat to competition that could lead to higher prices for consumers or other adverse effects.

Frederick Lawrence, director and energy analyst at Capital Alpha Partners told MarketWatch that there is much greater competition in the market for oil exploration and production, where Pioneer is a major player, than in other segments of the industry including gasoline stations, pipeline operators or refining.

Independent oil companies produce roughly 85% of natural gas and 65% of oil in the U.S., he said, and that fact will make it difficult for the Exxon acquisition to meaningfully reduce competition in oil exploration.

“People just think about big oil and they forget that there’s a very healthy independent community out there competing,” he said. “That said, this is Exxon Mobil we’re talking about, the 800 pound gorilla of the upstream oil value chain, so it’s important to acknowledge they’ll get more scrutiny.”

See also: Why gasoline prices are set to fall even as oil marches toward $100 a barrel

Investors should be prepared for the deal to take longer to consummate than a similar acquisition in another industry, Lawrence added, pointing to a recent deal between private equity firm Quantum and natural-gas producer EQT that was slowed because of additional information requests from the FTC.

The deal was ultimately consummated in August, nearly a year after it was announced.

Former FTC official Calkins said that investors should also be prepared for the FTC to get creative as it studies the deal, noting that Biden administration antitrust enforcers “have been receptive to unusual theories of competitive harm” and will study the impact of the merger on downstream businesses, like refiners and gasoline retailers.

The agency will also scour the deal for “any part of the business where there’s an anticompetitive story,” Calkins said, noting that large complex mergers often involve the transfer of a more obscure but valuable asset that could illegally boost an acquiring company’s market power.

Meanwhile, the FTC also has to contend with an already heavy workload, with ongoing cases against well-resourced companies like Amazon.com Inc.
AMZN,
+1.59%

“The FTC right now is doing a lot of litigating,” Calkins said. “There is a resources question of whether they have the ideal number of staff with the right skill set to add to their already full plate.”

[ad_2]

Source link

October 6, 2023
Treasury yields are climbing: ‘There’s never really been such an attractive opportunity for fixed-income investments’

[ad_1]

While stocks get clobbered by rising bond yields, financial experts say everyday investors can roll with the punches by increasing their exposure to longer-term Treasurys and other fixed income — so long as they understand what they are doing.

Yield — and more of it — has been a great-sounding idea for more people ever since the Federal Reserve started increasing its benchmark interest rate in March 2022.

High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. It’s easy to find these products with rates in the 4% and 5% range.

Treasury bills, which come due within a year, have also been a yield-producing place to put cash. Yields on T-bills
BX:TMUBMUSD06M
of varying length are over 5%, up from roughly 4.5% around the start of the year.

“High-yield savings accounts, certificates of deposit and money market-mutual funds have all become alluring ways to reap rewards for parking cash. ”

Yet yields have been inducing anxiety lately. For well over a month, the speedy ascent of yields for longer-term Treasury debt and a bond market sell-off have been knocking the stock market for a loop.

Still, some financial experts say there’s nothing wrong with buying longer-term Treasurys for the person who wants to keep putting their cash to work. Of course, they need to understand the risks and rewards for bonds when interest rates rise and fall.

Also see: As Treasury yields rise, Wall Street wonders what the Fed will do next. Where should you park your extra cash?

“Moving from cash to fixed income is the right move right now,” said wealth adviser Marisa Bradbury, managing director of the Florida offices for Sigma Investment Counselors. “You can definitely lock in some decent rates we haven’t seen in a long time.”

“Before, fixed income was so much a principal protection piece of the portfolio. Now you can actually earn a decent income on it too,” she said.

“The upside to what’s happened is for savers,” said Matt Sommer, head of specialist consulting group at Janus Henderson Investors. “There’s never really been such an attractive opportunity for fixed income investments as there is now.”

To be sure, there was a time when Treasury yields where far above their current mark. In the early to mid-1980s, the yields on the 10-year Treasury note and 30-year Treasury bond exceeded 10%. Of course, Sommer and other financial planners are focused on the present and the future because that’s what financial planning is all about. Here’s what they are thinking:

The ‘barbell’ approach

When clients building their nest egg want to go all in on T-bills, Sommer is instead advising they use a “barbell” approach that adds a mix of longer-term Treasurys and fixed income too.

“This is exactly the time investors shouldn’t hibernate on the short end of the [yield] curve,” said Richard Steinberg, chief market strategist and a principal at The Colony Group, a wealth advisory firm. He’s also advising clients to extend their duration on their Treasury and fixed income investments.

Yields climbed again Friday morning after the stronger than expected September jobs report. The yield on the two-year Treasury note
BX:TMUBMUSD02Y
rose to almost 5.1%, up from 5.023% Thursday afternoon and up from 4.26% a year ago.

The yield on the ten-year Treasury note
BX:TMUBMUSD10Y
climbed to 4.86%, up from 4.715% Thursday afternoon, and up from 3.82% a year ago. The yield on the 30-year bond
BX:TMUBMUSD30Y
reached 5.01%, up from 4.88% on Thursday and up from 3.78% a year ago – heading Friday morning for the highest level since August 2007.

Bond yield and price always move in different directions. When interest rates rise, bond prices decrease and bond yields increase. When rates fall, prices increase and yields decrease. That’s where the note of caution comes in.

Brace for losses if the Fed keeps increasing interest rates, said David Sekera, chief U.S. market strategist at Morningstar, the investment research firm.

For now, it may be a good time for bond portfolios to beef up the long side. “Part of what we are seeing in the stock market is a reallocation out of stocks and into fixed income,” he said.

Related: Why rising Treasury yields are upsetting financial markets

[ad_2]

Source link

October 6, 2023
GM stock sinks to 3-year low after report that faulty air-bag parts may lead to massive recall

[ad_1]

General Motors Co.’s stock ended at its lowest in three years on Thursday following a news report saying that the carmaker may face a massive recall in connection with defective air-bag inflators.

The Wall Street Journal reported Thursday that at least 20 million GM
GM,
-2.35%
vehicles are built with the potentially dangerous air-bag part, made by auto supplier ARC Automotive of Tennessee.

GM stock fell 2.4% to close at $30.31, its lowest since Sept. 30, 2020, when it closed at $29.59. The stock has been down for five straight sessions, and off more than 8% in the period.

The report, citing people familiar with the matter, said that GM would be among the “most exposed” automaker to the recall, which involves 52 million inflators made by ARC.

At least two people have been killed and several others injured after the inflators exploded with too much force during a crash, sending shrapnel flying, the report said.

The National Highway Traffic Safety Administration has not yet released how many vehicles would be in the recall, or the specific models that would be affected, it said.

[ad_2]

Source link

October 5, 2023
Social Security Administration to review overpayments, may claw back payments

[ad_1]

The Social Security Administration said Wednesday it would review its overpayment procedures and policies, and may claw back any overpayments found.

During the 2022 fiscal year, the agency recovered $4.7 billion of overpayments, according to a report by the SSA’s Office of the Inspector General.

While payment accuracy rates are high, overpayments do happen given the number of people the agency serves, the number of changes in their circumstances and the complexity of the programs, the SSA said.

“Despite our high accuracy rates, I am putting together a team to review our overpayment policies and procedures to further improve how we serve our customers,” said Kilolo Kijakazi, acting commissioner of Social Security.

“There is misinformation in the media claiming that the Social Security Administration is attempting to collect $21 billion. This figure was derived from the total amount of overpayments that have occurred over the history of the programs,” the SSA said in a statement.

The announcement comes the week before Social Security’s cost-of-living adjustment, or COLA, is expected to be released.

The 2024 COLA for Social Security is expected to rise about 3.2%, according to estimates from the Senior Citizens League, a pro-senior think tank. That’s compared with an 8.7% increase for 2023, which was the highest COLA in more than 40 years amid high inflation.

Social Security is an important benefit for most Americans. Half of the population age 65 or older live in households that receive at least 50% of their family income from Social Security benefits, according to SSA data, and about 25% of senior households rely on Social Security benefits for at least 90% of their income.

“The government’s got to fix this,” Sen. Sherrod Brown, the Ohio Democrat who chairs a Senate panel that oversees Social Security, recently told KFF Health News on the subject of overpayments. Meanwhile, Rep. Mike Carey of Ohio, the No. 2 Republican on a House panel that oversees Social Security, has called for a congressional hearing to review the problem, according to the KFF Health News report.

Social Security pays $1.4 trillion in benefits to more than 71 million people each year. Only around 0.5% of Social Security payments are overpayments, the SSA said.

“For the Supplemental Security Income (SSI) program, overpayments also represent a small percentage of payments — about 8% — but are higher due to the complexity in administering statutory income and resource limits and asset evaluations,” the agency said in the announcement.

If a person doesn’t agree that they’ve been overpaid, or believes the amount is incorrect, they can appeal. If they believe they shouldn’t have to pay the money back, they can request that the agency waive collection of the overpayment. There’s no time limit for filing a waiver.

The SSA said it is required by law to adjust benefits or recover debts when overpayments occur. The law allows Social Security to waive recovery in some cases.

[ad_2]

Source link

October 5, 2023

Biden administration to cancel $9 billion in student debt for 125,000 borrowers

[ad_1]

Roughly 125,000 borrowers will have $9 billion in student debt cancelled, the Biden administration announced Wednesday.

The cohort receiving the relief includes three groups of borrowers who have been eligible to have their debt forgiven for years but struggled to access that benefit. They are public servants who have been working for the government or certain nonprofits for more than 10 years and paying on their student loans during that time; borrowers who have been in repayment on their loans for more than 20 years; and borrowers who are severely disabled.

The announcement comes as payments are resuming this month for 28 million student-loan borrowers for the first time in three years, now that the pandemic-era payment pause has ended. Some have reported challenges enrolling in repayment plans and getting correct information from their servicers about their payment amounts.

Student-loan borrower advocates had called on the Biden administration to wipe debt off the books for borrowers who are already eligible for cancellation under the law before resuming repayment. They’ve said that would help alleviate some of the strain the return to repayment is putting on the student-loan system. It wasn’t immediately clear whether borrowers who are part of Wednesday’s announcement will have their debt cancelled right away or need to wait for a period for the discharge to be processed.

Wednesday’s announcement is distinct from the broad-based debt cancellation that’s grabbed headlines in recent months. Earlier this year, the Supreme Court struck down the Biden administration’s plan to cancel up to $20,000 in debt for borrowers earning less than $125,000.

Last week, officials provided more detail on President Joe Biden’s plan to take another stab at mass debt forgiveness. The process to determine the contours of that relief continues, with a set of meetings next week, and likely won’t be resolved for several months.

Part of groups already eligible for relief under the law

The borrowers covered by Wednesday’s announcement are part of groups that were already entitled to debt cancellation under the law, but for years have struggled to access it due to paperwork and technicalities. Officials have faced pressure from advocates for years to smooth the path to relief for these borrowers.

The group includes 53,000 borrowers who are receiving $5.2 billion in cancellations under the Public Service Loan Forgiveness program. That initiative allows borrowers who work for the government and certain nonprofits to have their student debt forgiven after at least 10 years of payments.

But it was notoriously challenging to access. Roughly 1% of borrowers who applied for relief in the first years of the program actually had their debt cancelled. The Biden administration has taken steps to make it easier for borrowers who meet the spirit of the law to overcome technicalities that in the past had stymied their path to forgiveness.

In addition, the Department of Education has approved debt discharges totaling $2.8 billion for nearly 51,000 borrowers who made more than 20 years of payments on their loans, officials announced Wednesday.

For decades, the government has offered federal student-loan borrowers the ability to pay their debt as a percentage of their income and have the remainder cancelled after at least 20 years. The idea was to provide an alternative to borrowers who couldn’t afford to pay off their debt in 10 years through a mortgage-style plan.

But in the first years, borrowers would have been eligible to have their debt forgiven under these income-driven repayment plans, more than 2 million borrowers who were in repayment for more than 20 years were still paying.

Consumer advocates and regulators said that was largely because servicers were steering borrowers towards forbearance — a status that pauses payments, but where the debt still accrues interest and borrowers don’t build credit toward forgiveness — instead of helping them sign up for these plans.

Last year, the Department of Education said it would review borrowers’ payment history to see whether there were periods when they should have been building credit toward forgiveness, but those months weren’t accurately counted. The agency said it would adjust their payment history accordingly. The 51,000 borrowers are part of this group. Already the Biden administration has cancelled the debt of more than 800,000 borrowers through this initiative.

Finally, officials said that nearly 22,000 borrowers who have a total or permanent disability will have about $1.2 billion in student loans cancelled. Borrowers with a disability that is so severe they’ll never work again qualify to have their federal student loans wiped out. But for years, many eligible borrowers found the application process, which historically required them to provide proof of their disability, challenging to navigate.

In 2021, the Biden administration announced it would match borrowers’ data with data at the Social Security Administration, which through its work administering disability benefits has the information that would indicate whether a borrower is eligible for a total and permanent disability discharge. The roughly 22,000 had their debt discharged approved through this data match, the agency said.

“For years, millions of eligible borrowers were unable to access the student-debt relief they qualified for, but that’s all changed thanks to President Biden and this administration’s relentless efforts to fix the broken student-loan system,” Miguel Cardona, the secretary of education, said in a statement announcing the relief.

“Today’s announcement builds on everything our administration has already done to protect students from unaffordable debt, make repayment more affordable and ensure that investments in higher education pay off for students and working families,” he added.

[ad_2]

Source link

October 4, 2023

Tag: Government policy

Spending cuts and shutdown coming?

The ‘barbell’ approach

Part of groups already eligible for relief under the law