Member Briefing September 26, 2024
Harris And Trump Are Offering Radically Different Visions of Manufacturing — And How The Government Can Help
Kamala Harris and Donald Trump both are aiming to be the candidate of manufacturing, but both this week are offering radically different pictures of the state of that industry while promising to help in nearly opposite ways. Vice President Harris will speak Wednesday before the Economic Club of Pittsburgh. The plans she will discuss are set to lean heavily on using government incentives to spur the manufacturing sector, with new proposals promised in the afternoon speech that will outline sectors she would prioritize for further manufacturing expansion if she wins this November.
Former President Trump, by contrast, painted a darker portrait of the state of manufacturing and offered a different approach in a speech Tuesday. In that address, he focused on using new protective tariffs alongside other measures like lower corporate taxes and less regulations as a means to spur factory building.
New Home Sales Dip in August
New home sales dropped 4.7% to a 716K unit pace during August. The decline offset the strong jump in sales the month prior. Despite the dip, the pace of new home sales continues to be relatively sturdy on account of builder pricing incentives and a scarcity of available homes in the existing market. Looking ahead, lower mortgage rates should eventually provide a boost to new home sales, but affordability challenges and a softer labor market will likely limit the rebound.
As new home sales climb higher through the monthly volatility, reduced prices may be one factor supporting demand. The median new home price amounted to a not-seasonally-adjusted $420K in August, 4.6% below the median price one year ago. Plentiful inventory is another factor underpinning sales. The number of new homes for sale rose to 467K in August, amounting to 7.8 months' supply (seasonally adjusted) at the current sales pace. Although still far from the highs reached in 2008, the ratio of new home inventory to sales remains more elevated than resale inventory.
New York State Teachers Union Supports Statewide Cellphone Restrictions In Schools
The New York State United Teachers passed a resolution supporting a statewide law or policy restricting smartphones and other devices like smartwatches and earbuds in schools from school opening to dismissal, the union announced Tuesday. The extent of those restrictions should be designed locally, with input from parents, educators, unions and other stakeholders, the union said. In addition, they said educators should not be responsible for implementation or enforcement of those policies and state resources should be available to cover the costs of implementation. Exceptions would be allowed for instructional purposes and student health and safety needs.
The resolution comes after the NYSUT held a forum Friday which was attended by Gov. Kathy Hochul. The governor has made the issue of phones and social media addiction one of her top priorities this year. Months ago, she signed a first-in-the-nation bill to regulate social media algorithms for under-18 users
Read more at NY State of Politics
Global Headlines
Middle East
- Israel And Hamas: The Latest News – The Guardian
- Israeli Army Chief Says Military Is Preparing For A Possible Ground Operation In Lebanon - AP
- Hezbollah Asked Iran To Attack Israel, Israeli And Western Officials Say - Axios
- Navy Ship In Middle East Damaged In Incident – The Hill
- Israeli Army Says It Has Struck 60 Hezbollah Intelligence Targets In Lebanon - France 24
- Houthis to Aid Fellow Iran Ally Hezbollah 'Without Limits' Against Israel - Newsweek
- Israeli Warplanes Hit Lebanon Again As Hezbollah Takes Aim At Central Israel - Reuters
- Israel Intercepts First Missile Hezbollah Has Fired at Tel Aviv - WSJ
- Interactive Map- Israel’s Operation In Gaza – Institute For The Study Of War
- Map – Tracking Hamas’ Attack On Israel – Live Universal Awareness Map
Ukraine
- Ukraine And Russia: The Latest News – The Guardian
- Putin issues a nuclear warning to the West over Ukraine - Reuters
- Russia Has Secret War Drones Project In China, Intel Sources Say - Reuters
- Zelensky Sounds Nuclear Alarm at UN - Newsweek
- Zelensky Slams ‘Colonial’ Peace Proposal To War With Russia In UN Speech - Politico
- Images Show Russia’s New Sarmat Missile Suffered Major Test Failure - CNN
- Ukraine Bets On India To Help Get Peace Deal With Putin - Politico
- Putin's Military Spending Shows He Has No Plans To End War - Newsweek
- Interactive Map: Assessed Control Of Terrain In Ukraine – Institute For The Study Of War
- Map – Tracking Russia’s Invasion Of Ukraine – Live Universal Awareness Map
Other Headlines
- China And EU Seek To Avoid Trade War With Talks On Minimum EV Prices - Politico
- Why West Africa Is Now The World's Terrorism Hotspot - Reuters
- What China's Biggest Stimulus Since The Pandemic Means For US Investors: Morning Brief - Yahoo
- Austrian Election Offers Far Right A Springboard Back To Power - Politico
- China test fires ICBM into international waters – The Hill
- Czech Crisis Manager Set To Become EU’s Top Global Dealmaker - Politico
- U.N. Chief Warns of 'Powder Keg' Engulfing the World - Newsweek
- A Court In Argentina Orders The Arrest Of Venezuela's President And His Right-Hand Man - Yahoo
- Eyeing 2027 China Threat, U.S. Deploys Laser-Equipped Ship To Japan – Nikkei Asia
Policy and Politics
Congress Passes 3-Month Funding Extension To Avoid Government Shutdown
The House and Senate approved a stopgap measure to keep the government funded for three months on Wednesday, sending the legislation to President Biden to stave off a shutdown. The legislation keeps the government funded through Dec. 20 and also includes around $230 million in additional funding for the Secret Service following the second assassination attempt against former President Donald Trump.
The Senate passed the stopgap measure Wednesday night, with 78 in favor and 18 opposed. The vote came quickly in the upper chamber, after senators reached a time agreement that gave them up to two hours to debate the bill, fast-tracking its path to passage — and senators' travel plans. The House approved the legislation earlier Wednesday by a vote of 341 in favor and 82 opposed. Ultimately, more Democrats than Republicans backed the legislation, propelling it to the two-thirds majority that was required for passage. All 82 members who voted against the bill were Republicans. President Biden is expected to sign the Bill Today or Friday.
New York City Mayor Eric Adams Indicted On Federal Charges
New York City Mayor Eric Adams (D) has been indicted by a grand jury on federal criminal charges. While the indictment is sealed, two people familiar with the matter confirmed to the Associated Press that Adams had been indicted. The news followed a series of investigations by federal authorities of Adams and a number of his associates, and swirling questions surrounding the major.
“I always knew that If I stood my ground for New Yorkers that I would be a target — and a target I became,” Adams said in a statement. “If I am charged, I am innocent and I will fight this with every ounce of my strength and spirit.” It is unclear what charges Adams faces or when he will appear in court. Adams is up for reelection next year. The indictment comes a little more than a month before the presidential election, as well as contests for the House and Senate. New York state is at the center of the race for the House majority, with a half dozen races seen as competitive.
EPA Finalizes Rule Cutting Hydrofluorocarbons
The EPA announced on September 23 a final rule to establish a new program to manage, recycle, and reuse hydrofluorocarbons (HFCs) under the American Innovation and Manufacturing (AIM) Act. The agency notes that the final rule includes provisions that will reduce wasteful leaks from large refrigeration and air conditioning equipment. The final rule, establishing the Emissions Reduction and Reclamation (ER&R) program, addresses the third part of the bipartisan AIM Act, and comes less than two years after he U.S. ratification of the Kigali Amendment to the Montreal Protocol, an international agreement to phase down climate-damaging HFCs and help avoid up to 0.5 degrees Celsius of global warming by 2100.
The final ER&R program includes requirements for repairing leaking equipment, the installation and use of automatic leak detection systems on large refrigeration systems, using reclaimed HFCs to service certain existing equipment, minimizing HFC releases from fire suppression equipment, fire suppression technician training, and removal of HFCs from disposable cylinders before they are discarded. The regulations also establish a standard that limits the amount of new, or virgin, HFCs that can be contained in reclaimed HFC refrigerants. Additionally, the EPA is establishing alternative standards under the Resource Conservation and Recovery Act for ignitable spent refrigerants when recycled for reuse.
Sen. Warren Wants HHS To Use 'March-In Rights' To Create Wegovy Rival
Sen. Elizabeth Warren is continuing the fight to persuade federal regulators to limit the power of patent protection when patents help drugmakers keep the prices of important medicines high. Warren and the other members of Congress are backing arguments by Public Citizen and some other advocacy groups, such as Labor Campaign for Single Payer and New Jersey Citizen Action, that the U.S. Department of Health and Human Services should use its ability to "march in," waive the usual patent protection rights provided by the section 1498 of Title 28 of the U.S. Code, and provide licenses that other manufacturers can use to make drugs that would compete with Ozempic and Wegovy.
Drugmakers and PBMs themselves say competition, health plan price negotiations and patients' inability to pay the sky-high prices are already starting to bring the GLP-1 agonist prices down to earth, and that the prices are high partly because pharmaceutical companies spent enormous sums and took enormous risks to develop important, innovative drugs. Researchers have estimated that the cost of developing and testing a new drug in the United States can range from $161 million to $4.5 billion.
Health and Wellness
New York Declares ‘Imminent Threat’ From Eastern Equine Encephalitis
New York officials announced an “imminent threat” to public health this week after a resident died from the state’s first case of mosquito-borne eastern equine encephalitis, or EEE, in nearly a decade. The deceased individual was a resident of Ulster County. The case, the state’s first human case since 2015, was confirmed earlier this month. Eastern equine encephalitis is a rare but severe viral disease, spread by infectious mosquitoes. Approximately 30 percent of those who contract EEE die from the disease, and survivors are often left with neurologic problems. There are no vaccines or medications to treat or prevent it.
“Eastern equine encephalitis is different this year,” McDonald said in a statement. “While we normally see these mosquitoes in two to three counties each year, this year they have been in 15 counties so far, and scattered all over New York State.” Governor Hochul activated multiple agencies to expand access to insect repellent at New York parks and campgrounds, and to increase public awareness of the threat by placing signs at potentially vulnerable sites.
Election 2024
- Senate Report Details Security Failings That Almost Got Trump Killed - WSJ
- Trump Briefed On Alleged Assassination Threats By Iran, His Campaign Says - Reuters
- Haitian Group Files Criminal Charges Against Trump And Vance For Spreading False Claims - Forbes
- Harris to Outline Economic Vision to Counter Trump’s - WSJ
- UN Officials Have A Strange Feeling About The US Presidential Race - Politico
- Syracuse University Professor Talks Upstate N.Y. Congressional Races – NY State Of Politics
- Trump Trashes Zelensky As ‘Greatest Salesman On Earth’ As He Visits U.S. - Forbes
- Real Clear Politics Latest General Election Polls – Real Clear Politics
- Real Clear Politics Electoral Map
- Latest Polls - FiveThirtyEight
Industry News
China-Linked Hackers Breach U.S. Internet Providers in New ‘Salt Typhoon’ Cyberattack
Hackers linked to the Chinese government have broken into a handful of U.S. internet service providers in recent months in pursuit of sensitive information, according to people familiar with the matter. The hacking campaign, called Salt Typhoon by investigators, hasn’t previously been publicly disclosed and is the latest in a series of incursions that U.S. investigators have linked to China in recent years. The intrusion is a sign of the stealthy success Beijing’s massive digital army of cyberspies has had breaking into valuable computer networks in the U.S. and around the globe.
In Salt Typhoon, the actors linked to China burrowed into America’s broadband networks. In this type of intrusion, bad actors aim to establish a foothold within the infrastructure of cable and broadband providers that would allow them to access data stored by telecommunications companies or launch a damaging cyberattack. Last week, U.S. officials said that they had disrupted a network of more than 200,000 routers, cameras and other internet-connected consumer devices that served as an entry point into U.S. networks for a China-based hacking group called Flax Typhoon.
Helene Intensifies To Hurricane. Expected To Make Florida Landfall Today (Thursday).
Tropical Storm Helene has intensified into a hurricane and is predicted to turn into a dangerous Category 3 storm before hitting the US Gulf Coast on Thursday. Forecasters warn the major hurricane could bring "life-threatening" storm surge, damaging winds and flooding to a large portion of Florida and the south-eastern US. The US-based National Hurricane Center (NHC) said that Helene was expected hit Florida late on Thursday local time. Florida Governor Ron DeSantis has declared a state of emergency for almost all of the state's counties.
The NHC said that once Helene reaches the south-eastern United States, it is expected to "produce total rain accumulations of five to 10 inches". A flood watch has been issued from Florida to the southern Appalachians with the worst-affected area predicted to be the Big Bend region in Florida. Big Bend is where Hurricane Idalia made landfall in 2023 and the area also was impacted by Hurricane Debby last month. The Florida Division of Emergency Management has posted a list of the counties in which voluntary or mandatory evacuation orders have been issued ahead of Helene.
Peak Oil Demand Isn’t on the Horizon, OPEC Says
In its annual report on long-term energy trends, the cartel said oil demand is forecast to reach 120.1 million barrels a day in 2050 from 102.2 million barrels a day last year. Demand from non-OECD countries is projected to rise by 28 million barrels a day in the period, while OECD nations are expected to witness a 10% growth decline. “There is no peak oil demand on the horizon,” OPEC said. The organization, which publishes closely-watched oil supply and demand forecasts, has been typically more optimistic than others about the continued use of oil.
Earlier this year, the International Energy Agency—which represents a group of oil consumer countries including the U.S.—said global oil markets are headed toward a major glut this decade due to surging supplies and slowing demand, with oil demand growth set to peak by 2029. According to OPEC’s forecast, oil demand is estimated to reach 112.3 million barrels a day in 2029, a 10.1 million barrels a day increase compared with last year. Non-OECD oil demand is projected to rise by 9.6 million barrels a day between 2023 and 2029, reaching more than 66 million barrels a day, while OECD demand is expected to fall by 500,000 barrels a day. Oil and gas are expected to remain crucial for energy supply through the middle of the century, with their combined share in the energy mix expected to stay above 53%, according to OPEC.
Weekly Mortgage Refinance Demand Surges 20%
Applications to refinance a home loan surged 20% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Demand was a stunning 175% higher than the same week one year ago. This as the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.13% from 6.15%, with points increasing to 0.57 from 0.56 (including the origination fee) for loans with a 20% down payment. The rate was 128 basis points higher the same week one year ago, or 7.41%.
The refinance share of applications rose to 55.7%. While the jump compared with a year ago is large and the share is now a majority of total mortgage demand, the level of refinance activity is still modest compared with prior refi waves, according to Joel Kan, vice president and deputy chief economist at the MBA. “Average loan sizes were higher both for purchase and refinance applications, which pushed the overall average loan size to its highest in the survey’s history at $413,100,” Kan added.
FAA Chief Says Boeing Safety Culture Reforms May Take Years
The head of the Federal Aviation Administration told a U.S. House subcommittee on Tuesday that safety culture improvements at Boeing(BA.N), opens new tab may take three to five years to complete. "It is not a six-month program - it is a three-year to five-year program," FAA Administrator Mike Whitaker said at a two-hour hearing, adding he has spoken to Boeing CEO Kelly Ortberg and the company's board of directors about the need for safety culture reforms.
He said Boeing has made significant improvement in the short term. "On culture it is a long-term project .... There is progress but they are not where they need to be." Boeing declined to comment on Whitaker's remarks. Boeing shares, which are down 38% this year, fell 0.3% on Tuesday. In July, Boeing agreed to plead guilty to a criminal fraud conspiracy charge and pay at least $243.6 million after breaching a 2021 Justice Department agreement. The planemaker also agreed to spend at least $455 million to boost safety and compliance programs, overseen by an independent monitor for three years.
Boeing Losing '$100 Million To $150 Million A Day' As Union Strike Rolls On
Boeing (BA) finds itself stuck between a rock and a hard place as the labor strike between it and the International Association of Machinists (IAM) union nears a second week. On Monday, Boeing upped its offer to the union, which represents 33,000 workers, but did not proceed through union leadership and instead sent a "best and final" offer directly to workers, which didn’t sit well with the IAM. "The survey results from yesterday were overwhelmingly clear, almost as loud as the first offer: members are not interested in the company's latest offer that was sent through the media,"
Without union workers based in Boeing’s Renton, Wash., assembly facility, Boeing cannot deliver its 737 Max jets, which are the company’s cash cow. Boeing is still able to deliver its 787 Dreamliner out of its non-union South Carolina facility; however, those jets are limited in number. “It’s not just Boeing that’s in trouble — the entire global aviation system is in trouble because it relies on Boeing for 4 in 10 commercial aircraft as well as what it delivers in its other divisions,” Anita Mendiratta, an aviation and tourism expert at consulting firm AM&A said. “When there is a delay in the delivery of aircraft, and there are many airlines that are having delays, it means that the entire global aviation ecosystem is going to suffer, as is the global traveling public.”
Billionaire Jared Isaacman On His Historic Spacewalk: “It Was Overwhelming”
Back on planet Earth a week after returning from space, Jared Isaacman is still catching up on sleep. “I think I just set a new record of sleep deprivation on this five-day mission," he chuckles in a phone call from his home in Pennsylvania. The fighter-jet-flying, space-traveling billionaire took part in a historic orbital mission called Polaris Dawn in mid-September, reaching a distance of 870 miles away from Earth—the highest Earth orbit any human has been to since NASA's Apollo 17 mission in 1972. On September 12, he also became the first ever private citizen to conduct a spacewalk—alongside crewmember Sarah Gillis, an engineer at Elon Musk’s SpaceX, which operated the mission and designed and built the brand new spacesuits that Isaacman and his three crew members wore.
"I did not expect it to feel the way it did. In my mind I had visualized every step and in the simulators we had done that choreography a hundred times," says Isaacman of his experience during the spacewalk, technically known as an extravehicular activity, or EVA. “I wasn't expecting all of the other senses to come together. It gets really cold, the adrenaline starts flying and then there's some physical exertion because that spacesuit, when it’s pressurized, is very rigid. You have all of that coming together plus the visual stimulus of seeing Earth like that, and it is quite overwhelming."
The Two Big Insurers Still Investing in Fossil Fuels
A deep divide is emerging among insurers over their investments in fossil fuels. The overall industry has significantly cut its exposure, but two huge players have made multibillion-dollar bets on major oil companies. The buying by State Farm and Berkshire Hathaway’s BRK.B -0.09%decrease; red down pointing triangle insurance companies was so big that it helped offset a decline in the rest of the industry, according to an analysis by The Wall Street Journal of data from the National Association of Insurance Commissioners, a group of state regulators.
The value of fossil-fuel holdings by the property-and-casualty industry rose to $84.6 billion last year from $57 billion in 2014, driven by market appreciation and the buying by the two insurers. The insurance industry plays an outsize role in addressing climate change. Insurers are already pricing in the risks of storms, wildfires and the like and passing the costs on to their customers. The industry also invests customers’ premiums in stocks and bonds, which provide funding for companies, including producers of the fossil fuels that are the main cause of climate change. Insurers also provide coverage for projects such as coal mines and pipelines that couldn’t be built without it.