Trump Trade Deal With Mexico To Raise Car Prices in US
According to the Peterson Institute for International Economics, if you like paying more for cars, then the Trump trade deal with Mexico just signed is for you. Some details of the deal include an increase of minimum US/Mexico regional content in cars imported to the US to be 75%, up from 62%, in order to be exempted from tariffs. The higher minimum will bring up the cost of making the car, or if not, tariffs will make up for what would have been an increase in cost. On top of that, 40 to 45% of a car must be produced by workers earning at least $16 an hour, which needless increase labor costs above market value, increasing the cost of making the car even more. Mexican officials estimate that 30% of cars currently imported to the US do not satisfy these requirements, so we’re definitely looking at complications here.
SEE: Brazilian Crypto Firm Atlas Compromised
Bernie Sanders Accuses Amazon Of Milking Taxpayers by Not Paying Fulfillment Workers Enough
Like an abusive spouse who blames the behavior on the victim, Senator Bernie Sanders is blaming Amazon (NASDAQ:AMZN) for milking taxpayers by not paying them enough, which forces them onto government welfare programs. “Bottom line: the taxpayers of this country should not have to subsidize employees at a company owned by Mr. Bezos who is worth $155 billion. That is absurd,” Sanders wrote. An alternative is that Mr. Bezos, CEO of Amazon, stops employing them entirely so that their welfare needs become even more acute. Bezos lashed out against Sanders in response saying, “In the U.S., the average hourly wage for a full-time associate in our fulfillment centers, including cash, stock, and incentive bonuses, is over $15/hour before overtime. We encourage anyone to compare our pay and benefits to other retailers.”
Sanders on his part has come up with an original idea for helping these workers by…taxing them. By taxing federal assistance benefits 100%, essentially taking away the government help they do get by forcing them to give it all back to the government. This would help, in his logic, by encouraging employers to provide that assistance themselves. Sounds airtight. What could go wrong?
Moody’s Gets Moody on Ford, Downgrades it to Near Junk
Ford (NYSE:F) is in trouble as Moody’s has downgraded the auto giant’s debt to one notch above junk with a negative outlook. Ford regained investment grade status on its bonds 6 years ago, but now appears to be on the verge of losing that status. Ford bonds due in 2046 are now trading at 91 cents on the dollar. $23 billion in loans helped save the firm from bankruptcy in 2008, but the next time a liquidity crunch shows up, the iconic American car company may not be so lucky. Leverage has tripled since 2016, and Ford recently lowered its earnings forecast for 2018.
It’s Not Just The Lira Crashing
The Indian Rupee (NYSEARCA:INR) is at an all time low against the dollar, the South African Rand (ZAR=X) is falling, and even the Swedish Krona (NYSEARCA:FXS) is approaching all time lows against the dollar. Is it an emerging market currency crisis, or are all currencies losing value together? Personal Consumption Expenditures inflation statistics come out in the US at 8:30am EST, and preliminary estimates from yesterday out of the Bureau of Economic Analysis are for a 2% increase in core PCE, which means despite the dollar rising against many smaller currencies, it is still losing purchasing power.
Pizza Brawl Continues at Papa Johns
Papa Johns (NASDAQ:PZZA) continues to have a pizza brawl with its founder and largest shareholder, John Schnatter, who is now accusing the board of lying about asking him to become executive chairman. He says this happen, they say it didn’t, and wrote a letter haranguing Schnatter for making off the cuff comments about the NFL back in 2017, by accusing the NFL of harming pizza sales for allowing players to kneel during the Star Spangled Banner. The stock has been cut in half since December 2016.