Category: USA

Trump, economists criticize Fed’s interest rates cut

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The Federal Reserve’s decision to cut interest rates by a quarter of a percentage point failed to pacify US President Donald Trump, who has routinely hit out at Fed chair Jerome H. Powell for keeping rates too high. The federal funds target rate range is now 2% to 2.25%.

“As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation,” Trump wrote on Twitter. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”

Trump went on to say that he would like to see further and more aggressive rate cutting going forward.

“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world.”

But Trump was not the only one critical of the cut. Two Fed officials also disagreed with the decision, albeit for different reasons.

CNBC reports that Boston Fed President Eric Rosengren and Kansas City Fed President Esther George—who had both expressed misgivings about a potential rate cut—both voted against the measure, arguing that rates ought to remain unchanged.

“Given that the economy is quite strong, given that I do think that inflation is going to be very close to 2%, and given that the growth in the economy is satisfactory, I think that’s an environment where you don’t have to take a lot of action,” Rosengren told CNBC.

Others were critical as well. Chris Rupkey, chief financial economist at MUFG Union Bank, slammed the rate cut as an “unwise decision,” arguing that “The Fed’s decision today is like in the days when doctors bled their patients to heal them.”

He added that, in his view, the Fed “manufactur[ed] reasons to cut interest rates despite a strong economy with no recession signs apparent anywhere out on the horizon.”

The decrease was the first since 2008, when the Fed hacked rates down to almost zero percent in the midst of massive economic fallout caused by the US subprime mortgage crisis.

Boeing Awaits Fate, Passengers Wait

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Hundreds of Boeing 737 MAX 8 passenger airplanes remain grounded across the world pending conclusion of an ongoing investigation into two fatal crashes, only months apart, in 2018 and 2019. Some airlines are finding it difficult to cope with their diminished fleets. If you find your flight delayed, this may be why.

The crashes and causes

Shortly after takeoff on 29 October 2918, Indonesian Lion Air Flight 610 crashed into the Java Sea, killing all 189 passengers and crew on board. The plane was reported to have entered the sea at a sharp angle, and an investigation pointed out that a likely flaw in an automated system that controlled the aircraft’s pitch, the Maneuvering Characteristics Augmentation System (MCAS). 

On 10 March 2019, just over four months later, Ethiopian Airlines Flight 302, traveling from Addis Ababa to Nairobi, crashed under similar circumstances. Two minutes after takeoff, the plane’s MCAS engaged, sharply pitching the aircraft back towards the ground. Over the course of the next four minutes, the pilots struggled to disengage the MCAS while retaining other forms of automated/assisted control. Flight data shows drastically fluctuating rates of climb, descent, and air speed. The MCAS engaged a second time; shortly after, the aircraft struck the ground at nearly 1100 kilometers per hour, killing all 157 persons aboard.

Boeing’s new best-seller..

The Boeing 737 was developed in the 1960’s and is the most popular commercial passenger aircraft. The 737 MAX was introduced in 2011, featured larger engines, and became Boeing’s fastest-selling plane ever. Put briefly, the engine’s increased weight made stalling more likely in some ascent conditions. The MCAS was designed to detect these stalls and adjust engine and tail fin angles to push down the plane’s nose to counteract them.

..and how it was (allowed to be) made

The MCAS directly caused both flights. This having been established, inquiries into the development and implementation of the system are now underway, with Boeing currently under investigation by the Justice Department and FBI. A former Boeing engineer has reported that developers were under explicit commands to minimize the cost of the 737 renovation (to the 737 MAX) as well as to downplay changes in design and features in order to more smoothly pass Federal Aviation Administration standards. FAA certification processes are partially outsourced to airline producers, one of those being Boeing.

Fallout

Much of the reignited discussion of the 1986 Chernobyl reactor explosion focuses on how a country could knowingly (the fail switch that actually sparked the temperature spike was discovered, but not revised, due to anticipated costs) endanger its citizens and the world. How reckless of them! 

We now have a crater in Ethiopia, with debris reaching up to nine meters into the ground, made by a plane that was hastily created, certified, and sold by a company across the world. Take it from there.

Fall in Asian markets reflects pessimism over US-China trade deal

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Negotiations between Washington and Beijing over a trade deal may be ongoing, but that doesn’t mean people are optimistic about the potential for a settlement, as evinced by the fall in Asian markets during early trading Wednesday.

The decline came in the wake of a Twitter rampage from US President Donald Trump—who has been less than consistent (one might say erratic) on this issue—in which he lit into China for not importing more agricultural products from the US and took credit for the Asian country’s allegedly failing economy.

“China is doing very badly, worst year in 27 – was supposed to start buying our agricultural product now – no signs that they are doing so. That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years,” he wrote.

Continuing he wrote:

“My team is negotiating with them now, but they always change the deal in the end to their benefit.”

And in conclusion:

“China has lost 5 million jobs and two million manufacturing jobs due to the Trump Tariffs. Trumps [sic] got China back on its heels, and the United States is doing great.”

Trump did not provide any sources to back up the stated figures, but then I probably didn’t have to tell you that.

MarketWatch summed up the immediate fallout, reporting that “Japan’s Nikkei slid 1% and Hong Kong’s Hang Seng Index  fell 1.3%. The Shanghai Composite retreated 0.8% while the smaller-cap Shenzhen Composite lost 0.5%. South Korea’s Kospi fell 1% as North Korea tested more short-range ballistic missiles, and benchmark indexes in Taiwan, Singapore and Indonesia all fell. Australia’s S&P/ASX 200 slipped 0.2%.”

Individual stocks were also down.

MarketWatch reports that, in addition to Trump’s unpredictability, an ongoing trade dispute between South Korea and Japan is roiling markets. Said dispute stems from Tokyo’s decision to deny South Korea a special trade status known as “white country.”

Alarming percentage of food delivery drivers eat from orders

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Think twice next time you’re about to tip the man or woman delivering food to your house. According to a recent survey conducted by US Foods, nearly 30 percent of delivery drivers have swiped something from a customer’s food order.

The survey interviewed some 500 delivery drivers who worked for various apps (including UberEats, GrubHub and DoorDash). Twenty-eight percent of those drivers confessed to having taken food from a customer’s order prior to delivering it, while more than half (54 percent) admitted to thinking about doing so.

From the report: “We’re sorry to report that sometimes, impulse gets the best of deliverers, and they violate their sacred duty by taking some of the food!”

As you might expect, customers (1,500 of whom were polled by US Foods as part of the same study) are less than thrilled by the idea of a delivery driver lifting a bit of their meal. US Foods asked customers to to rate, on a scale of 1 to 10 (1 meaning “no big deal” and 10 meaning “absolutely unacceptable”), how upset they would be to learn that such a thing occurred, and the average response was 8.4. No surprise there.

Meanwhile, 85 percent of customers said they would like their order to come with a sticker or label which, if broken, would indicate that the delivery boy/girl had gotten hungry on the drive over.

Taking food from an order is of course a violation of company policy: if caught, drivers are liable to be fired.

On the flip side, drivers had some bones to pick as well. Sixty percent of those surveyed said they were “consistently irritated” by a lack of tips. MarketWatch reports:

“On the customer side, 95% of those surveyed said they tipped their drivers, though 66% said service and delivery fees — which don’t go to the driver — affected how much they tip. $5 was the average tip for about one in three customers, but 57% of customers said they tipped less than that. Just 11% said they tipped an average of $6 or more.”

Upon hearing this news, customers might be even less inclined to tip, further enraging delivery drivers and leading them to retaliate by, well, stealing some food. Sounds like a vicious cycle.

Lawyer for Epstein accusers says wealthy sex offender may have bounty on his head

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A lawyer representing several alleged victims of billionaire financier Jeffrey Epstein recently speculated that the convicted sex offender’s life may be in danger from people who do not want him to testify.

Spencer Kuvin represents three of Epstein’s many accusers. His comments came after news reports that Epstein, a former acquaintance of current US President Donald Trump as well as previous President Bill Clinton, had possibly attempted to kill himself in his jail cell last week.

According to various sources, Epstein was found lying on the floor of his cell in the fetal position, half-conscious with markings on his neck. Some speculated that he had attempted to hang himself, while others stated that Epstein’s may have staged the suicide attempt so as to be granted a transfer to a different jail.

In support of the latter theory, a source said Epstein’s injuries were superficial and inconsistent with a genuine suicide attempt.

Yet another theory holds that Epstein was assaulted by fellow inmates.

In response, Kuvin stated during an interview with the Sun Online:

“I question whether or not it was a true suicide attempt that Mr. Epstein was involved in in jail or whether or not there may be some powerful people who just don’t want him to talk.”

Kuvin seems to be implying, as others already have, that Epstein has incriminating information about certain individuals who have the power to prevent him from talking in court.

“If he goes on trial, everyone he’s been in contact with will ultimately be fair game,” Kuvin said, adding, “If he’s going to implicate anyone in power that has the ability to reach in and somehow get to him, his life is definitely in jeopardy.”

The 66-year-old was arrested and indicted earlier this month on sex trafficking charges. He stands accused of sexually assaulting dozens of underage girls—some as young as 14—at his properties in New York City and Palm Beach.

He has pleaded not guilty and faces up to 45 years in prison if convicted.

Epstein previously served a 13 month sentence after pleading guilty in 2008 to prostitution charges.