Week of May 8th, 2023

Issuing a mega-coin has been proposed as a novel solution to the country’s debt ceiling crisis.

The Sunshine State is already feeling the effects.

The agency wants the country’s largest banks to split the cost of refilling its coffers. But smaller banks aren’t sure they’re in the clear.

After the Federal Deposit Insurance Corp. rescued depositors at failed banks, it’s looking to replenish its insurance fund. Plus, why tax refunds are smaller this year.

Blame the termination of benefits that came with pandemic emergency measures.

Limiting riskier, illiquid investment could make banks and the financial system more stable — but the Federal Reserve isn’t so sure.

Two companies talked a lot about the ending of the Title 42 immigration policy in recent earnings calls.

Econ Extra Credit newsletter #149

In the Turkish city of Antalya, an influx of foreign buyers have exacerbated existing housing affordability woes.

Fewer bird flu cases and a natural increase in egg supply in the spring is leading to lower prices.

The civil conflict between rival military factions in Sudan has carried a big human cost thus far — over 600 people have died so far, according to the UN. Some knock-on effects of the conflict are also appearing in the global economy. We chat with the BBC’s Will Bain about how the global supply of gum arabic, a raw material used in a bevy of consumer products, is at risk. And, we check in with Christopher Low, chief economist at FHN Financial, on how people in financial circles are reacting to the debt ceiling fight in Washington.

One of the highlights from this week’s Consumer Price Index inflation report: prices for “food at home” fell for a second month. We look at how egg prices have tumbled from their highs earlier this year. Plus, today’s planned debt ceiling negotiations between President Biden and Congressional leaders have been scrapped, but both sides are saying it’s not a sign of a wider breakdown in talks. And, the BBC’s Victoria Craig reports from Turkey on how the war in Ukraine has affected housing prices in some Turkish cities. 

From the BBC World Service: Polls are tight in Turkey ahead of this Sunday’s crucial presidential election, where the faltering economy is in the spotlight. We look at what both candidates are saying as voters head to the polls. Plus, the UK economy is doing better than expected, according to the latest GDP figures, which are up 0.1%. And, Liverpool in the UK is expecting an economic boost as it prepares to host the Eurovision Song Contest on Saturday.

Hint: Don’t spend money you don’t have!

The internet search giant is trying to develop artificial intelligence tools while being mindful of the technology’s sometimes inaccurate and toxic outputs as well as the risk of misuse. That’s according to James Manyika, Google’s senior vice president of technology and society.

And, more grim news.

As the border policy Title 42 ends, we look at the economic incentives of migrating to the U.S. Also, what it’s like banking on your iPhone.

The tech giant makes it easy to open an account on an iPhone. Sara Morrison of Vox isn’t entirely comfortable with its expanding reach.

Economists say the more measures, the better their predictions — even if they provide slightly different pictures of the economy.

Construction students get blighted homes back on the market under the auspices of a community college program.

The goal is to remove 90% of industry emissions by 2035.

The four-week moving average of unemployment benefits claims is at the highest level since late 2021. Is this more evidence of a slowly cooling economy?

Available jobs and better wages are helping shape the immigration patterns of people leaving their home countries for safer conditions.

How do our secrets shape our financial lives? New episodes coming Thursdays.

What we can learn about how fraud happens and how can cities guard against it.

The company’s announcement of new AI product offerings this week adds new fuel to the fire.

Google is pushing in its chips to compete with OpenAI and other big tech companies in the race to develop increasingly complex artificial intelligence. We look at what the company’s CEO, Sundar Pichai, had to say about the ongoing AI arms race going on in Silicon Valley and how Google is planning to compete. Plus, the Bank of England has hiked interest rates, which comes at a time of economic stagnation in addition to eye-watering inflation. And, we chat with Bob Brown of The CPA Solution about the biggest municipal fraud scheme in U.S. history. 

With about three weeks left before the U.S. government runs out of money to pay its dues, Treasury Secretary Janet Yellen is saying at a meeting of G7 finance ministers that the wider global economy is at risk if the White House and Congressional Republicans fail to reach a deal. Plus, Title 42, a key pandemic-era border rule, expires today. We look at how the post-pandemic recovery led to an influx in border crossings. And, new guidelines on mammograms could help women screen out breast cancer earlier, but it also comes with extra costs. 

From the BBC World Service: With rapid gains being made in the world of AI, regulators are now scrambling to catch up. Lawmakers in Europe are today considering new rules to manage the industry. We hear from one of those who’s been involved in drawing up the legislation. Plus, markets are poised for another rate rise from the Bank of England. And, how Cairo could become a center for fashion as it hosts its first Fashion Week this weekend.

Emotion recognition technology requires collecting biomarkers to analyze mental health. Law professor Tiffany Li says we need special privacy protections for this “specially sensitive data.”

A union that represents government employees is suing the president and treasury secretary to get them to disregard the debt limit.

Plus, a little Netflix nostalgia.

Community development financial institutions are mostly concerned about a ban on extended-term mortgages and balloon payments.

I’m tired. Aren’t you? Persistent inflation is wearing on consumers, and it’s beginning to show. We’ll also take the pulse of the oil market.

Prices rose 4.9% year over year in April and 0.4% during that month. Consumer fatigue is showing in higher credit card balances and lower savings.

The pandemic changed tech and personnel matters, says surgeon Eric Henderson. But the empathy required and the lovely setting remain the same.

Here’s how higher wages, housing shortages and income level can play a role in how much you pay for things like exterminators and car repairs.

The cartel releases its monthly oil market report on Thursday.

When it comes to sales, inventory, hiring, credit conditions and more, small business owners are wary.

Today’s Consumer Price Index data on inflation is out, and it showed something that will buoy the spirits of monetary policymakers everywhere — inflation again tapered, the tenth-straight month of decline. Susan Schmidt, Head of Public Equities at the State of Wisconsin Investment Board, helps us break down the latest report. Plus, the BBC spoke with an executive at the German carmaker BMW about the Inflation Reduction Act. And, the rising cost of food in Turkey, which is part of the country’s broader economic problems, is affecting voters’ opinions ahead of upcoming elections. 

Voters will head to the polls on Sunday for the most crucial election in a generation as households continue to deal with inflation.

Airbnb reported its first-quarter earnings yesterday, and it was a thoroughly mixed bag for investors. On one hand, last quarter looked pretty good — on the other, the gig-work hospitality company is projecting fewer bookings even as the summer travel season kicks off. We take a closer look at what the report says. Plus, states in the Mountain West are experiencing inflation at higher rates than other regions, partly due to high prices at the pump. And, the United Nations is turning to GoFundMe to raise money to avert an ecological disaster in war-torn Yemen.

The intergovernmental group’s crowdfunding campaign aims to avert a potential environmental disaster in the Red Sea.

From the BBC World Service: BMW Chief Financial Officer Nicolas Peter tells us that President Biden’s Inflation Reduction Act confirms they’re heading in the right direction as an organisation, but it’s infrastructure not subsidies that the industry needs. Plus ex NFL star JJ Watt explains why he’s investing in an English Soccer team, and finally, BBC’s Sydney reporter Phil Mercer reports from Australia the government has brought 10 days paid leave to help those suffering domestic abuse.

The writers strike highlights the tension between unions and new technology. Cornell’s Virginia Doellgast says its part of a larger pattern.

And how we’re all connected to the problem.

Many platforms saw declines in ad revenue over the past year and had to cut costs and staff. Now there’s optimism about a rebound.

Last month, the CPI pegged area inflation at 6% year-over-year, a whole percentage point higher than the national average.

So far, Wall Street has largely ignored the debt ceiling fight in Washington. Plus, media companies welcome a potential uptick in ad spending.

“Prices have stayed strong,” reports Keith Alverson, a South Dakota farmer whose financial management includes trading grain electronically.

Stock markets aren’t upset by the debt limit debate. But that could change as the June 1 default deadline draws closer, analysts say.

Thanks to pandemic-era changes, many insurers and providers now support expanded telemental health services.

The Fed’s closely-watched Financial Stability Report was released yesterday, and monetary policymakers pointed to some areas of concern like commercial real estate loans. But there were also signs of resilience in the banking sector. Plus, Apple co-founder Steve Wozniak spoke with the BBC about the dangers of rapid artificial intelligence development. And, a recent survey conducted by the National Federation of Independent Business says that small business owners are increasingly gloomy about the short-term future of the economy.  

The debt ceiling fight between President Biden and House Republicans is getting closer and closer to the 11th hour as both sides make scant progress toward a compromise. Marketplace’s Nova Safo explains what’s on tap today for the latest round of negotiations, and why the talks are unlikely to bear any fruit. Plus, airlines are bracing for a potentially record-setting travel season this summer. And, the BBC’s Samira Hussain looks at the growing prevalence of “nearshoring” as tensions between the U.S. and China damage trade relations. 

From the BBC World Service: Steve Wozniak, the co-founder of Apple, tells the BBC that AI needs to be properly regulated as he warns of the potential for scams. Plus, Dan Harris, a lawyer working with foreign companies in China, says many foreign businesses are thinking of leaving after yet another U.S. company is subjected to a search. And finally, BBC’s Samira Hussain reports from Monterrey, Mexico where business is booming as American companies relocate closer to the U.S.

Asit Sharma, senior analyst at The Motley Fool, says many Americans, especially high earners, are turning to ChatGPT for investing advice. But “we know that ChatGPT is not the most accurate purveyor of results,” he says.

The latest Senior Loan Officer Opinion Survey explained.

Last year, we spoke with Texans about the state’s move to restrict gender-affirming care for trans kids. Today, we check back in with two families — one who stayed and one who moved.

Stung by supply chain breakdowns and worried about labor unrest, many shippers have rerouted goods to the Gulf of Mexico and East Coast.

Cash-strapped rural and medium-size hospitals are less prepared to absorb higher interest rates.

Kristin Thalheimer Bingham, who’s prepping her store for last-minute buyers, always works to keep her offerings interesting and relevant.

Pilots, in particular, are in high demand. Airlines don’t want to be caught off guard like they were last year.

As conservative politicians target LGBTQ rights, more families worry they’ll have to move.

The pandemic increased the desire for straight teeth at any age.

The class of 2023 is entering a strong labor market as employers continue to snap up workers.

Berkshire Hathaway shareholders converged on Omaha, Nebraska this weekend for the conglomerate’s annual “festival”, where Warren Buffett and Co. gave their takes on the economy. We look at what key players said about the road ahead. Plus, the Fed releases a report today about what bank loan officers have been up to, which comes on the heels of the collapse of First Republic Bank. And, what public holidays in the UK, dubbed “bank holidays”, mean businesses in that country. 

The blockbuster jobs report released last week had particularly good news for one group of job-seekers: young people who have recently graduated college. According to the data, the job market is a lot stronger than in previous years because employers are still desperate to hire. Plus, the Biden administration is slated to beef up protections for airline consumers dealing with flight cancellations and other delays. And, amid an ongoing teacher shortage, some schools that offer bilingual education are looking for teachers outside the country. 

As a nationwide educator shortage persists, some districts are sponsoring immigrant work visas to attract and retain staff.

From the BBC World Service: Oil analyst Viktor Katona explains why the EU and G7 sanctions have had the desired impact as the Kremlin increases taxes on domestic oil production. Plus, the BBC’s Catherine Byaruhanga reports from the South Sudan town of Renk as efforts to broker a peace deal in neighboring Sudan get underway. And, who are the business winners and losers of public holidays? The BBC’s Elizabeth Hotson reports from the UK, which has three such holidays this month.

AI-generated media can blur the line of reality. But researcher Joshua Habgood-Coote wonders if “catastrophic predictions” are justified.