Tag: news

Even before the virus-induced recession, Americans were quickly spiraling down a financial hole with insurmountable debts and no savings. Their ability to afford a home, nevertheless, a vehicle, was becoming harder by the year. 

One way to gauge the economic mobility of consumers is to track the average vehicle age of a car, sport utility vehicle, and pickup truck. If the average age is within several years, it would mean there’s a high turnover as consumers can swap out older cars for newer ones. 

But a new report via Reuters, citing IHS Markit Ltd. data, has made a troubling discovery, indicating the average age of vehicles on US highways has increased to 11.9 years in January, an increase from 11.8 years for the prior year, which is a two-decade high.

Todd Campau, associate director of aftermarket solutions for IHS Markit, said the pandemic crushed the economy and resulted in sharp declines in vehicle sales is likely to lead to the average vehicle age on roads to breach the 12-year level. 

“We definitely expect to eclipse the 12-year barrier,” he said. People working from home could put fewer miles on vehicles, allowing them to last longer, he said.

Campau said, “average age of cars and light trucks has been increasing steadily for nearly 20 years, reflecting rising prices for new vehicles and improved durability that allows older vehicles to travel more miles with more owners before they are scrapped.”

IHS Markit said older cars on roads could be beneficial for repair shops. 

But there’s a major, as we outlined last week, the virus pandemic has led to “14 million fewer cars” on highways. The ripple effect of older cars and an overall decline in vehicles on roadways suggest America’s economy has been shifted into low gear for a couple of years.

Authored by Tsvetana Paraskova via OilPrice.com,

The U.S. oil and gas pipelines industry has had a rough month, with court setbacks for two critical oil pipelines and a ditched plan for a new natural gas pipeline.

And July isn’t over yet, for on the horizon looms yet another potential blow to existing and future oil and gas pipelines. That blow could be delivered by AOC.

Democratic Congresswoman and prominent environmental activist Alexandria Ocasio-Cortez is now seeking an amendment to the text in the next budget to block the U.S. Army Corps of Engineers from issuing permits to oil and gas infrastructure, HuffPost reports.

According to the proposed legislation, “None of the funds made available by this Act may be used by the Corps of Engineers to issue a permit under section 404 of the Federal Water Pollution Control Act (33 U.S.C. 1344) for the discharge of dredged or fill material resulting from an activity to construct a pipeline for the transportation of oil or gas.”  

The proposed amendment was set for discussion at a hearing of the House Committee on Rules on Tuesday.

The amendment could basically prevent the U.S. Army Corps of Engineers from working on and building oil and gas pipelines crossing waterways, derailing not just future pipelines but also the Dakota Access Pipeline, which was ordered shut pending a new environmental review.

Ocasio-Cortez’s proposed amendment, however, is unlikely to pass even in the Democrat-majority House where Democrats are not at all on the same page about dropping oil and gas pipeline projects, not to speak of the Republican-majority Senate, which is unlikely to pass such a measure.

Still, the proposed legislation highlights the growing divide between environmental justice campaigners and the oil and gas industry, and the ever-growing opposition to pipelines in North America.

The Pipelines’ “Black July”

The anti-pipeline camp has scored several huge victories this month.

First, Dominion Energy and Duke Energy said on July 5 that it was canceling the Atlantic Coast Pipeline “due to ongoing delays and increasing cost uncertainty which threaten the economic viability of the project.”

Despite a major win on a right-of-way issue at the U.S. Supreme Court last month, the developers of the Atlantic Coast natural gas pipeline are definitively scrapping the project because of ongoing delays and significant cost overruns.

“This announcement reflects the increasing legal uncertainty that overhangs large-scale energy and industrial infrastructure development in the United States. Until these issues are resolved, the ability to satisfy the country’s energy needs will be significantly challenged,” said Thomas F. Farrell II, Dominion Energy chairman, president, and chief executive officer, and Lynn J. Good, Duke Energy chair, president, and CEO.

U.S. Secretary of Energy Dan Brouillette said that “The well-funded, obstructionist environmental lobby has successfully killed the Atlantic Coast Pipeline.”

On the next day came the highest-profile setback for oil pipelines – a federal judge ruled on July 6 that the Dakota Access Pipeline, in operation since 2017, must be emptied and shut down within 30 days, by August 5, until a new comprehensive environmental review is completed.

A U.S. Appeals Court ruled a week later that Dakota Access can continue to operate while the court considers whether the pipeline should be shut down as ordered by the lower court’s ruling. 

Ocasio-Cortez’s proposal to block the U.S. Army Corps of Engineers from issuing permits to oil and gas pipelines crossing waterways could directly impact a new permit for Dakota Access should courts order the already operational pipeline to obtain one.  

In the third major blow to oil pipelines in just two days, the U.S. Supreme Court ordered on July 6 that construction of the long-delayed and once-resurrected Keystone XL project cannot begin. The justices at the Supreme Court upheld a lower court ruling that Keystone XL cannot use the so-called Nationwide Permit 12 that allowed pipelines to cross rivers with minimal review if they meet certain criteria. The Supreme Court, however, allowed other pipeline projects to return to use that permit aimed at fast-tracking construction of vital oil and gas infrastructure.

“This is a significant step toward restoring more certainty for energy companies, but declining to revive the permit for Keystone XL is short-sighted as the project has already been thoroughly reviewed for well over a decade,” the American Petroleum Institute (API) commented on the Supreme Court’s decision. 

Court Battles

Dakota Access, Keystone XL, and any other new pipeline project will continue to face challenges to their construction, completion, and operation, potentially delaying in-service dates for new pipelines and adding more costs to already costly projects.

The court order for Dakota Access to shut down shows that even already operational pipelines are not safe from disruptions to their operations.

Regardless of how the proposed amendment from Ocasio-Cortez will pan out in the House committee, the House, and the Senate, Dakota Access and other pipeline projects will continue to face legal challenges for the foreseeable future – to the delight of environmentalists and to the frustration of the oil and gas industry.

Josh Hawley and Dick Blumenthal, a bipartisan pair of Senators who have struck up a valuable alliance by jointly backing efforts to antagonize big tech, an effort that culminated with yesterday’s anti-trust hearing – have added Zoom to the growing list of companies they are seeking to hold accountable for their too-cozy relationship with Beijing.

Using their typical process, the writing of a sternly-worded letter to the DoJ, the pair argued on Thursday that a probe should be launched into the video technology company Zoom and social media company, TikTok.

The letter renews pressure on Zoom, which had seemingly overcome speculation that it was vulnerable to infiltration by Beijing, after the company repeatedly kowtowed to CCP officials.

The two lawmakers said they were asking for the investigation because of reports of violations of Americans’ civil liberties by sharing private info with the CCP.

“Based on numerous reports, we are extremely concerned that Zoom and TikTok have disclosed private information about Americans to the PRC and engaged in censorship on behalf of the Chinese government,” the letter read.

The news sent shares of Zoom spiraling lower in afternoon trade.

Shares of Zoom Video plunge as much as 5% after Senators Blumenthal & Hawley seek a Justice Dept. probe into Zoom and TikTok’s relationships with the Chinese government. https://t.co/Yvaf41tKAc pic.twitter.com/N6FX5yE526

— CNBC Now (@CNBCnow) July 30, 2020

Unfortunately, Blumenthal has been preoccupied by President Trump’s suggestion that the election be delayed. We doubt we’ll hear much else from the Connecticut Senator today.

The restaurant industry is in collapse. More specifically, small restaurants have been crushed by the virus-induced recession. We’ve noted at least half of the restaurant closures on Yelp are now permanent. 

The National Restaurant Association has determined that at least 15% of all restaurants will close. This number could be a lot higher at the end of the year as Goldman Sachs reports the economic recovery is now reversing.

Small restaurant operators, who fear a double-dip recession, have now resorted to liquidating their eateries on Facebook Marketplace.

A simple search of “restaurant” on Facebook Marketplace, within 80 miles of Trenton, New Jersey, comes up with dozens and dozens and dozens of mom and pop eateries that are trying to get out of the game. 

Another search on the social media marketplace for “restaurant” around the Baltimore–Washington metropolitan area shows even more small business operators are calling it quits.

Here’s Miami, Florida… 

Here’s Denver. 

Small restaurant owners in San Diego, California, are trying to sell their eateries on Facebook Marketplace. 

Here’s the Bay Area in California. 

Elsewhere in California… 

The volume of small restaurants trying to liquidate on Facebook Marketplace is so massive that we weren’t able to show the complete disaster unfolding across America.

To sum up, there’s no V-shaped recovery this year – the administration has no plan to revive economic growth except for bailing out Wall Street that has angered Tea Party Republicans.

The country is imploding from within – all the Trump administration cares about is optics ahead of the election and the stock market.  

Authored by Tho Bishop via The Mises Institute,

Judy Shelton’s long and bumpy Federal Reserve nomination cleared an important hurdle last week when the Senate Banking Committee voted on party lines to send her for final consideration before the full Senate. Right away, Shelton’s nomination received pushback from the resistance wing of the Republican Party, with Mitt Romney and Lisa Murkowski going on the record as opposing her nomination. With unanimous Democratic objection to Shelton, it would take just two more Republican dissenters to eliminate the most interesting Federal Reserve nominee in recent history.

While it’s easy to simplify the political intrigue as just yet another inner-DC Trump proxy war, the battle over Judy Shelton’s nomination – particularly in the context of the Fed’s actions over the last few months – is very useful as an illustration of our wise senators’ remarkably shallow grasp of monetary policy. It is true that there are reasonable criticisms of some of Shelton’s past work, including her more recent pivot toward a more Trump-friendly championing of an interest rate cut last summer. However, these criticisms seem trite in a world where the Fed is engaging in unprecedented actions, such as buying up corporate junk bonds and utilizing BlackRock to effectively nationalize large parts of America’s financial market.  

It is noteworthy that many of Shelton’s loudest critics have been completely silent on this matter.  

One of the most common critiques waged against Dr. Shelton is that she would be a political loyalist and has questioned the value of Fed political independence. Ignoring the fact that documented American history has shown the notion of “Fed independence” to be a noble myth, I am curious to know what a politicized Fed would look like in practice. After all, the Fed has long tossed aside its traditional policy tools in no small part so that it can accommodate the political decisions made by the legislative and executive branches.  

The proudly independent Jerome Powell had already bent the knee to the White House’s wishes when he failed to follow through with a gradual reduction of the Fed’s balance sheet as stock market turbulence created political headaches. Naturally, there were no cries then from the faux populist Sherrod Brown, who has long been in lockstep with fellow progressives in opposing any sort of monetary tightening. It is unclear whether these alleged working-class champions are intentionally advocating for policy that enriches the billionaire dollar class by boosting financial asset prices, or whether they simply don’t understand the real-world consequences of what they parrot in public hearings.

Among Dr. Shelton’s Republican critics has been Senator John Kennedy of Louisiana, who made the snide comment that “Nobody wants anybody on the Federal Reserve that has a fatal attraction to nutty ideas” following her testimony in February. Unfortunately, that seems to be precisely what we have, with a Federal Reserve engaging in levels of economic intervention beyond anything America has seen. Rather than rail against Jerome Powell’s apparent dedication to turning America into Japan, during the last Senate oversight hearing he asked a few courteous questions of our wise Fed chair and signed off early.  

In Senator Kennedy’s defense, it’s easy to take silly potshots at a public figure who has become something of a pinata to a certain class of Serious People in American financial punditry. It’s much harder to be a critic of America’s central banker at a time of crisis when elected officials are struggling to keep up with daily news. But it is precisely the fact that legislators are utterly ill-equipped to provide serious checks on Federal Reserve “expertise” that someone like Dr. Shelton would be the rare plus to the Fed’s board. 

While it is unlikely that if confirmed Dr. Shelton would masterfully reveal that she is actually the gold bug the media has depicted her as, what is clear is that she would give the Federal Reserve something it desperately needs—ideological diversity. This is also why Very Serious People hate her. Shelton’s willingness to challenge the deified “PhD” standard of modern fiat money and question such sacred cows as Fed independence makes her a potentially dangerous threat to the groupthink that has become far too pervasive in central banks. Dr. Shelton understands the dangers of central banks becoming de facto central planners in modern economies, and she understands the valuable role that gold played in past monetary systems. She reads and respects the ideas of serious heterodox monetary scholars whose perspectives have long been completely ignored within Fed deliberations. She even received her education in places like Portland and Utah, quite a different resume from most of her Ivy League–trained colleagues. 

If confirmed, will Judy Shelton be a revolutionary force within America’s central bank? Almost certainly not. Just as no election will truly drain the swamp in Washington, no Fed nominee is going to restore humility to the Eccles Building.  

Instead, Shelton’s nomination is best seen as a litmus test for Republican senators. Are you interested in actually promoting ideological diversity within American institutions, or are you simply willing to stand with the academic gatekeepers that have given us the Federal Leviathan that we have today? 

We know where Mitt Romney and Susan Collins stand. We shall soon see where the rest of their colleagues fall.