Raphael Stevens

More stories

  • 150 Shares99 Views

    in Finance

    America’s new Asian economic pact: just don’t call it a trade deal

    Just three days after being sworn in as president in January 2017, Donald Trump signed an executive order withdrawing America from the Trans-Pacific Partnership (tpp), a 12-country free-trade deal he had railed against on the campaign trail. On May 23rd, 488 days after his own swearing-in, President Joe Biden tried to reverse some of the damage by unveiling a new pact, the 13-country Indo-Pacific Economic Framework (ipef). That Mr Biden took so much longer to launch his Asian trade policy illustrates one basic truth: it is far easier to tear up agreements than it is to craft them anew.Inevitably, one way to look at the ipef is by way of comparison to the tpp (which lives on in reduced form, absent America). Some bits sound rather familiar. One selling-point for the tpp was that it was a “21st-century trade agreement” complete with high standards for workers’ rights and e-commerce rules. The ipef is also “a 21st-century economic arrangement”, according to Jake Sullivan, America’s national security adviser. The original tpp members accounted for nearly 40% of global gdp, roughly the same share as the current ipef partners (the biggest change is that the new deal swaps out Mexico and Canada for India and South Korea). Most crucially, China is still excluded. The ipef, like the tpp, is an attempt to build a trading structure in Asia that enshrines both America’s economic principles and its economic power—welcomed by many in the region as a counterbalance to China’s heft.That, however, is where the similarities end. Mr Trump’s success in winning support with his calls to stop countries “ripping off” America has made many in Washington leery of ambitious free-trade deals. So rather than starting work on a pact that would require approval from Congress, Mr Biden’s team has designed a framework that is more malleable and may avoid that political death-trap. In announcing the launch, Katherine Tai, the United States Trade Representative (ustr), pledged to “keep Congress close” in shaping the ipef—a far cry from putting it to a vote.Malleability has a few big downsides. It limits what America can offer. A cut in tariff rates, a plank of most free-trade deals, is a non-starter because it would require congressional support. America still vows to push for strong labour and environmental standards but, unable to offer more access to its vast market, it lacks a key bargaining chip. The durability of the ipef is also in doubt. Were Mr Trump to return to the Oval Office in 2024, he would not need three days to ditch the framework.The Biden administration has tried to make a virtue of these limits. Rather than conceiving of the ipef as a traditional deal, it has declared that the pact will rest on four pillars, with trade promotion just one. The other three goals are to make supply chains more resilient; to promote infrastructure investment and clean energy; and to form new rules on taxation and anti-corruption. It is tempting to dismiss such a wide-ranging agenda as too vague to amount to anything. But paradoxically, a near-stumble at the launch of the framework illustrated that it could, in theory, have force to its contents: America had to tone down the language in its founding documents, otherwise some in Asia would have balked at signing them.Matthew Goodman of the Centre for Strategic and International Studies, a think-tank, notes that the focus on topics such as digital trade, competition policy and bribery makes for a good menu for the ipef. “These are issues that are very much in the interest of our partners in the region,” he says. At the same time, breadth poses a challenge. Instead of just having the ustr as the lead negotiator, as in normal trade talks, the commerce department is in charge of the non-trade portfolio. That risks turning it into a multi-headed beast.For now, many in the region are most pleased by the symbolism. The wounds from America’s tpp exit are still raw. Since Mr Biden’s election victory, allies have waited and waited for America to devise a new Asian trade strategy. At last it has arrived, even if it is more notable for its political constraints than its economic potential. “We are just happy to have them at the table,” says one Australian official. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

  • 188 Shares169 Views

    in Finance

    Bank of America CEO Brian Moynihan says nothing will slow U.S consumer from spending money

    “Consumers are in good shape, not overleveraged,” Moynihan, CEO of the second biggest U.S. bank by assets, told Bloomberg Television from Davos, Switzerland.
    The bank’s customers have checking and savings accounts that are still larger than before the pandemic and are spending 10% more so far in May than the year-earlier period, he said.
    “What’s going to slow them down? Nothing right now,” Moynihan said.

    Brian Moynihan, CEO of Bank of America, speaking at the WEF in Davos, Switzerland on May 23rd, 2022. 
    Adam Galica | CNBC

    U.S. consumers are “in good shape” and will keep spending at an elevated clip, at least in the near term, according to Bank of America CEO Brian Moynihan.
    “Consumers are in good shape, not overleveraged,” Moynihan, CEO of the second biggest U.S. bank by assets, told Bloomberg Television from Davos, Switzerland.

    The bank’s customers have checking and savings accounts that are still larger than before the pandemic and are spending 10% more so far in May than the year-earlier period, he said.
    “What’s going to slow them down? Nothing right now,” Moynihan said.
    The Federal Reserve is in the middle of an inflation-fighting campaign that has pummeled markets, especially for formerly high-flying growth stocks. Concern has been mounting that inflation at multidecade highs and a central bank slamming the brakes on easy-money policies will tip the economy into recession. American consumers could help the U.S. avoid that scenario.
    “The Fed has this typically very difficult thing of getting them to slow down without slowing down too much,” Moynihan said. “I believe they are going to be able to manage this flow, but it’s going to be tricky.”
    Among bank CEOs, Moynihan has been more optimistic that the U.S. can dodge a recession. Earlier this month, JPMorgan Chase CEO Jamie Dimon put the odds at 66% that the U.S. will have some kind of economic slowdown.
    “The odds are the following: something like, yes, they can engineer a soft landing, a third of a percent chance,” Dimon told Bloomberg. “Probably a third of a percent chance they can engineer a mild recession …and then there’s a chance this could be much harder than that.”

    WATCH LIVEWATCH IN THE APP More

  • 213 Shares179 Views

    in Business

    That vacation rental listing could be a scam. These are the warning signs to look out for

    Before you book that summer rental, be sure to double check it’s not a scam.
    One big warning sign a listing is a fake: Demand for immediate payment on another platform.
    Other warning signs include phony images and lack of credible reviews.

    Ozgurcankaya | E+ | Getty Images

    Biggest warning sign

    The biggest red flag that a listing is a scam is when you are asked to leave a listing platform such as Vrbo or Airbnb in order to provide a payment, Couch-Friedman said.
    A fake real estate owner will ask a consumer to send $500, for example, via an online payment platform such as Zelle. Those transfers are instant and cannot be reversed, Couch-Friedman said.

    “The best payment method for any kind of vacation rental would be credit cards, because then you have [the] protection of the Fair Credit Billing Act,” Couch-Friedman said. “If you are scammed, your credit card company can get your money back.”
    So, remember to book a listing you found on a well-known website on that website only. “As long as you stay within the platform from start to finish, from payment to deposit, it’s very difficult to become scammed,” Couch-Friedman said.

    More red flags

    Also, be on the lookout for fake listings. These will often appear as new posts with no reviews, Couch-Friedman said. In her notice, James also warned consumers to look out for fake reviews, such as more than one review repeating the same phrases.
    The listing may also have grainy photos. By taking a screen shot of the photos and doing a search on Google Images, you can find out if it exists elsewhere. If the image shows up for another listing in a different location, or in an unrelated context, such as a furniture advertisement, then it’s a scam, Couch-Friedman said.

    It’s also a good idea to message the owner before you commit. Of note, this correspondence should only happen on the listing site, according to James. A scammer may not get back to you right away or respond in proper English, according to Couch-Friedman.
    Also be sure the host or owner has a valid address and phone number, James recommends.
    The good news is that if you read the terms and conditions for the listing site you’re using, and you stay on that platform, you can reduce your chances significantly of getting taken.
    If you run into legal issues with potential schemes, it is best to contact your state’s attorney general, Couch-Friedman said.

    WATCH LIVEWATCH IN THE APP More

  • 225 Shares189 Views

    in Finance

    Bill Ackman says a more aggressive Fed or market collapse are the only ways to stop this inflation

    Billionaire hedge fund manager Bill Ackman said raging inflation will only dissipate if the Federal Reserve acts more aggressively or the market sell-off turns into a full-on collapse.
    “There is no prospect for a material reduction in inflation unless the Fed aggressively raises rates, or the stock market crashes, catalyzing an economic collapse and demand destruction,” Ackman said in a slew of tweets Tuesday.

    The Pershing Square hedge fund manager attributed 2022’s market correction to investors’ lack of confidence that the central bank could squash a 40-year high in inflation. He said the market turmoil will only end if the Fed “puts a line in the sand” on soaring prices.
    “If the Fed doesn’t do its job, the market will do the Fed’s job, and that is what is happening now,” Ackman added. “The only way to stop today’s raging inflation is with aggressive monetary tightening or with a collapse in the economy.”
    The market has been in a big rout this year as the Federal Reserve’s tightening measures to tame inflation stoked fears of a recession. The central bank raised its benchmark interest rate by half a percentage point earlier this month, the most aggressive step yet. The S&P 500 is down about 18% in 2022, and the equity benchmark briefly dipped into bear market territory last week.
    But Ackman believes at this point investors will cheer the Fed raising rates more rapidly because inflation is spiraling out of control.
    “Markets will soar once investors can be confident that the days of runaway inflation are over. Let’s hope the Fed gets it right,” Ackman said.

    The hedge fund manager said the Fed should demonstrate its seriousness by immediately raising rates to neutral and committing to continue to hike borrowing costs until “the inflation genie is back in the bottle.”
    The Fed has indicated similar 50 basis point rate increases are likely at its next few meetings. The rate is currently targeted at 0.75%-1%. The rate-setting Federal Open Market Committee next meets June 14-15.
    In March 2020 during the depths of the Covid pandemic, Ackman issued a dire warning on CNBC about the health crisis, saying “hell is coming” and imploring the White House to shut down the country for a month. He made $2 billion betting against the market then.

    WATCH LIVEWATCH IN THE APP More

  • 238 Shares109 Views

    in Business

    'That is not capitalism, that is abusing the market:' Sen. Ted Cruz blasts BlackRock's Larry Fink's 'woke' ESG policies

    Republican Sen. Ted Cruz blasted BlackRock CEO Larry Fink for so-called “woke” investment decisions.
    Cruz suggested investment managers like Fink be barred from voting other people’s stock shares “to advance their own political interests.”
    “That is not capitalism, that is abusing the market,” Cruz, R-Texas, charged during an interview with CNBC’s “Squawk Box.”

    Sen. Ted Cruz (R-TX) speaks during a news conference at the U.S. Capitol October 6, 2021 in Washington, DC.
    Alex Wong | Getty Images

    Sen. Ted Cruz blasted BlackRock CEO Larry Fink on Tuesday for so-called “woke” investment decisions — and suggested money managers like Fink be barred from voting on behalf of other investors “to advance their own political interests.”
    “Because that is not capitalism, that is abusing the market,” Cruz, R-Texas, charged during an interview with CNBC’s “Squawk Box.”

    During much of the interview, Cruz blamed the White House’s policies for the surge in gas prices since President Joe Biden took office in January 2021.
    But the senator also took aim at Fink, whose company is the world’s largest asset manager, and other CEOs, who he argued have moved away from focusing on increasing profits for shareholders to taking stances on social issues like climate change to curry favor with wealthy liberals.
    Fink highlighted climate change as a problem facing corporations in a 2020 letter to CEOs of the companies BlackRock has invested in. “Climate change has become a defining factor in companies’ long-term prospects,” Fink wrote. “I believe we are on the edge of a fundamental reshaping of finance.”

    CNBC Politics

    Read more of CNBC’s politics coverage:

    Cruz on Tuesday repeatedly invoked what he called Fink’s support of ESG — environmental, social and governance issues — in various shareholder votes.
    “Does Wall Street also bear some of the responsibility? Absolutely,” Cruz said, referring to the average price for regular unleaded gasoline topping $4.59 per gallon.

    “There’s a Larry Fink surcharge, every time you fill up your tank, you can thank Larry for the massive and inappropriate ESG pressure,” Cruz said.
    He later said, “What Larry Fink is doing has been unprecedented, in the rise of ESG.”
    “And I think there is a real problem with people who are investing, who are voting shares of passively invested funds,” Cruz said, referring to funds that invest in companies belonging to various stock indexes.
    “Larry Fink is not using his own money to vote as a shareholder,” Cruz said. “What Larry Fink is doing is taking your shares and my shares and [those of] millions of little old ladies who’ve invested in funds, and he’s aggregating that vast amount of capital and he’s decided to vote not to maximize their returns, because apparently his fiduciary duty to customers is not a top priority. He’s voting instead on his politics.”
    Cruz said Fink had “decided that he’s more welcomed at the ‘New York Country Club’ when he walks in and has stood against oil and gas even if it reduces the returns of the accounts he’s managing, and even if it’s destroying jobs, helping America’s enemies and hurting America.”
    He said money managers who vote on shareholder matters based on their political interests instead of investors need more scrutiny.
    “That is not capitalism, that is abusing the market,” the senator said.
    A BlackRock spokesman, when asked about Cruz’s comments, said in an email, “The only agenda driving BlackRock’s proxy voting is the long-term economic interests of the millions of people whose money we manage.”
    “And we believe clients should also have the option to choose for themselves how their proxy votes are cast,” the spokesman said. “We lead the industry in providing proxy voting choice.”
    “Today, nearly half of our index equity assets under management — including pension funds serving more than 60 million people — can choose how their proxy votes are cast,” he said.
    “While that is an industry first, we see it as just a start,” he said. “We are pursuing technology and regulatory solutions to expand voting choice for even more clients. Index investing has been the driving force in democratizing investing for millions of Americans, with lower cost and greater choice. We’re committed to democratizing proxy voting too.” 
    In January, in his annual letter to CEOs, Fink wrote, “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke.’ ”
    “It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper. This is the power of capitalism,” Fink wrote.

    WATCH LIVEWATCH IN THE APP More

  • 150 Shares99 Views

    in Business

    Former White House press secretary Jen Psaki will join MSNBC this fall

    Former White House press secretary Jen Psaki will join MSNBC this fall.
    Psaki will host her own show that will air on NBCUniversal’s Peacock streaming service beginning in 2023.
    Psaki left her role as press secretary earlier this month.

    U.S. White House press secretary Jen Psaki speaks during a press briefing at the White House in Washington, December 20, 2021.
    Kevin Lamarque | Reuters

    Jen Psaki, who left her role as President Joe Biden’s press secretary earlier this month, will join cable news network MSNBC this fall.
    Psaki will appear across all MSNBC programs on cable and will host her own streaming show beginning in the first quarter of 2023, according to MSNBC President Rashida Jones. She will also appear on both NBC and MSNBC during primetime coverage of the 2022 midterm elections and the 2024 presidential election, Comcast’s NBCUniversal said in a statement.

    “Jen’s sharp wit and relatability combined with the mastery of the subjects she covers have made her a household name across the nation,” Jones said in the statement. “Her extensive experience in government and on the campaign trail and perspective as a White House and Washington insider is the type of analysis that sets MSNBC apart.”
    Psaki’s show will air next year on NBCUniversal’s flagship streaming service Peacock. NBC News President Cesar Conde has prioritized boosting the streaming service’s news offerings by shifting select MSNBC programming, including documentaries and specials, to Peacock, which has more than 28 million monthly active accounts and 13 million paid subscribers.
    Psaki was Biden’s press secretary for his first 16 months in office. It’s common for presidents to have multiple press secretaries in a four-year term. Karine Jean-Pierre succeeded Psaki earlier this month.
    Symone Sanders, who worked as Vice President Kamala Harris’ top spokeswoman, joined MSNBC this spring.

    Following the trend

    Psaki follows a long list of communications officials who have moved on to news broadcasting from the political world. ABC News host George Stephanopoulos was formerly President Bill Clinton’s communications director. MSNBC political analyst and host Nicolle Wallace was a senior spokeswoman for the George W. Bush administration and a spokeswoman for John McCain’s 2008 presidential campaign. Former President Donald Trump’s press secretary, Kayleigh McEnany, joined Fox News as a commentator last year.

    Before serving as Biden’s press secretary, Psaki was President Barack Obama’s communications director.
    “Fact-based and thoughtful conversations about the big questions on the minds of people across the country have never been more important, and I’m thrilled to join the incredible MSNBC team,” Psaki said in the statement. “My time in government, from the White House to the State Department, and years before that on national political campaigns will fuel the insight and perspective I bring to this next chapter.”
     — CNBC reporters Brian Schwartz and Kevin Breuninger contributed to this story.
    Disclosure: NBCUniversal is the parent company of MSNBC and CNBC.
    WATCH: Shepard Smith’s full interview with Jen Psaki

    WATCH LIVEWATCH IN THE APP More

  • 163 Shares119 Views

    in Business

    Sales of newly built homes tumbled over 16% in April while prices soared

    Sales of newly built homes sank to the slowest rate since the start of the Covid pandemic.
    The median price of a new home sold in April was $450,600, an increase of nearly 20% from the year before.
    Slower sales caused the inventory of newly built homes to jump sharply as well to a nine-month supply. A six-month supply is generally considered balanced between buyer and seller.

    Sales of newly built homes dropped 16.6% in April from March, far more than expected, and were down 26.9% from April 2021, according to the U.S. Census.
    The annualized rate came in at 591,000 units, seasonally adjusted. Analysts had been expecting 750,000. March’s read was also revised lower.

    That is the slowest sales pace since April 2020, when everything shut down at the start of the Covid pandemic. Sales surged quickly after that, as Americans sought bigger homes with outdoor spaces for quarantining.
    These numbers are based on signed contracts during the month, not closings, so it is perhaps the most up-to-date indicator in the housing market. Mortgage rates, which have been rising since January, really shot up in April. The average rate on the 30-year fixed loan began the month at 4.88% and ended it at 5.41%, according to Mortgage News Daily.
    Consumers are being hit by rising interest rates and four-decade-high inflation. That is making it even harder for them to afford today’s higher home prices. The median price of a new home sold in April was $450,600, an increase of nearly 20% from the year before.
    “While new construction gained favor with many would-be buyers over the past two years due to the extreme shortage of existing homes for sale, the rising cost of a new home is now pricing many people out of the market,” said George Ratiu, senior economist at Realtor.com. “The market for new homes is mirroring broader real estate trends, as rising inflation is taking a bigger chunk out of Americans’ paychecks and surging borrowing costs are compressing homebuyers’ budgets.”
    A stark pullback in demand, and not overconstruction, is hitting the market. Housing starts have actually been falling over the past few months. Slower sales caused the inventory of newly built homes to jump sharply to a nine-month supply. A six-month supply is generally considered balanced between buyer and seller.
    Builders are also starting to see an uptick in cancellation rates. While those have not shown up in earnings releases yet, analysts who follow the builders are beginning to report it.

    WATCH LIVEWATCH IN THE APP More

  • 175 Shares169 Views

    in Business

    Still missing your tax refund? You'll soon receive 5% interest — but it’s taxable

    If you’re still waiting for a refund, it generally will be accruing interest, and the rate jumps to 5% on July 1, according to the IRS.
    The agency tacks on interest if it takes longer than 45 days after the filing deadline to process your return.
    IRS interest payments ballooned to $3.3 billion in the fiscal year 2021, with a 33% spike from 2020 for individual returns.

    Bill Oxford | E+ | Getty Images

    If you’re still waiting for a tax refund, there’s a silver lining: it may be accruing interest, and the rate jumps to 5% from 4% on July 1, according to the agency’s latest quarterly adjustment. 
    Typically, the IRS has 45 days after the filing deadline to process returns and send refunds. After that, the agency tacks on daily compounding interest, explained Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

    Tied to the federal short-term rate, IRS interest currently falls below 8.3% annual inflation. But it’s still significantly higher than the average savings account.
    While this sounds good, there is a downside: your interest is taxable.
    More from Personal Finance:Tax breaks aren’t prime reason for high-net-worth philanthropy, study findsOnly 18% of Americans plan to increase stock market investments this yearFinTok helped this financial pro reach a new generation of investors
    IRS interest payments ballooned to $3.3 billion in the fiscal year 2021, with a 33% spike from 2020 for individual returns, the U.S. Government Accountability Office reported.

    Checking delayed refunds

    The easiest way to check the status of a refund is through the “Where’s My Refund?” online tool or by using the IRS2Go app. The portal shows three steps: return receipt, refund approval and if the refund was sent, with an estimated deposit date.

    Recently, the IRS updated the portal to include 2019 and 2020 returns, said Phyllis Jo Kubey, a New York-based enrolled agent and president of the New York State Society of Enrolled Agents.
    “Before this upgrade, the online refund inquiry only covered current-year refunds, meaning that anyone inquiring about a prior-year refund had to call the IRS,” she said. 
    High call volumes have been an ongoing issue with many taxpayers struggling to reach IRS agents. During the first half of 2021, there were fewer than 15,000 employees to handle over 240 million calls — one agent for every 16,000 calls, according to the National Taxpayer Advocate. 
    “I hope this is the beginning of more enhancements to the IRS online refund inquiry tools, and I look forward to seeing more improvements,” Kubey said.

    IRS backlog

    It’s been a difficult period for the IRS as the agency wrestles with pandemic-related backlogs.
    The IRS started 2022 with about 8.2 million paper returns, and there were 1.7 million left as of May 6, Ken Corbin, the chief taxpayer experience officer for the agency told the House Oversight Subcommittee in May.
    “Our goal is to bring the IRS back to a state prior to the pandemic,” he said. “We have to process this paper so we can get back to the business of providing the service the taxpayers deserve.”
    IRS Commissioner Charles Rettig in March told House lawmakers he expects the backlog to clear by the end of 2022.

    WATCH LIVEWATCH IN THE APP More