US Economy Stalling, But Economists Say That’s Fine
According to the latest divinations by the nation’s mainstream economists, the economy may look like it’s stalling, but it’s really OK because the so-called “stall speed” of the economy has supposedly declined. Meaning, the US economy can continue to creep along very slowly without tipping into recession. According to Bloomberg, whether the longest continuous expansion in US history stays intact depends on whether or not consumers keep spending. Consumer spending still accounts for about 70% of US GDP, and a lot of the money that they spend comes from the sale of US Treasuries, deficits being about a $1 trillion annually. “Suddenly the idea of stall speed is much more important today than it has been for most of the expansion,” said Stephen Gallagher, chief U.S. economist at French banking giant SocGen (OTCMKTS:SCGLY). “The economy is running on one engine, and that’s the consumer.”
Consumers, however, as their name suggests, consume economic growth rather than add to it. As for the French bank itself, its yield is already above 9% with share prices near all time lows. So clearly they know what they’re doing.
WSJ Throws Cold Water On Facebook’s Libra
Is the Libra unraveling? Visa (NYSE:V) and Mastercard (NYSE:MA) are reportedly reconsidering their involvement in Facebook’s (NASDAQ:FB) Libra project, the stablecoin cryptocurrency backed by a basked of currencies. The cold feet come after backlash from US and European governments, which probably do not like the idea of Facebook turning the entire banking system obsolete, which would wrest control of banks from the government to Facebook, essentially. If everyone uses Libra, there is no need for banks anymore as we know them. Pressed by Facebook to publicly support the project, executives at the payment processors have refused to do so, not wanting to attract unwanted attention from regulators. In a little over a week, company representatives will meet in Switzerland to review a Libra Association charter and appoint a board. Facebook may attempt to create the payment processor for Libra on its own, though doing so would be a herculean task and would probably incur the wrath of governments across the world, who are already at Facebook’s throat.
Hong Kong Flares Back Up During China’s 70th Communist Anniversary
Hong Kong is fired up again in protest against China’s communist government as tens of thousands of demonstrators defied a ban against protesting to protest the ban against protesting. A police officer shot a teenage high schooler in the chest. He was in critical condition. Video of the incident showed the officer firing at the teen who was trying to attack him and another officer. The injured student was taken to Princess Margarate Hospital and then to Queen Elizabeth Hospital and is now stable. Warning shots were also fired in the air during other protests. Now that someone has been shot and nearly killed, the chances of the protests calming down again have narrowed, as the victim will probably end up being a rallying cry for further protest, though it is unclear what Hong Kong can really do about China and its encroachment on the city. The Hang Seng remains near its lows since the beginning of the protests earlier this year. (NYSEARCA:EWH)
Johnson & Johnson Settles Another Opioid Case
In an effort to put the whole opioid debacle behind it, Johnson & Johnson (NYSE:JNJ) has settled another opioid lawsuit for $20.4 million brought by two counties in Ohio. The settlement enables the company to avoid a federal trial. J&J is now the fourth pharmaceutical company to settle claims in the opioid scandal. 2,600 other lawsuits are all pending. “The settlement allows the company to avoid the resource demands and uncertainty of a trial as it continues to seek meaningful progress in addressing the nation’s opioid crisis,” J&J said. This follows the company’s semi-victory in Oklahoma where the company lost the case but ended up paying a much lower fine that what prosecutors were asking for.
Impeachment Heats Up
Two officials involved in the Trump Administration’s dealings with Ukraine will meet two congressional committees this week. The two committees are the Foreign Affairs and Foreign Relations, Intelligence, Oversight and Appropriations committees. Documents relating to the case have been subpoenaed by House committees. The fuss is about President Donald Trump asking the Ukrainian president to investigate the dealings of Joe Biden and his son Beau. This was interpreted as an abuse of power, though he was just asking for a favor, according to the transcript of the phone call. Nobody knows who the whistleblower is who brought this to public attention. The US ambassador to Ukraine, since recalled, will appear before the committees on October 11. US stocks seem to be reacting negatively to the impeachment developments, the Dow down 350 points yesterday.