Agricultural businesses across the U.S. are reeling from retaliatory tariffs sparked by President Donald Trump’s global trade offensive — levies imposed on a wide range of American goods from soybeans and pork to ginseng and cranberries, the Wall Street Journal reported. The duties from trading partners including China, Canada, Mexico and the European Union have deepened a downturn that was already sapping incomes in the U.S. Farm Belt. Businesses reliant on a single product are especially exposed. The Trump administration has taken steps to soothe the nerves of American farmers, promising $12 billion in emergency aid to support producers of commodities such as soybeans, wheat, sorghum and pork. It isn’t known what, if any, benefit processors and other businesses along the supply chain will see from the aid.
Brokers’ Cryptocurrency Deals Are Focus of SEC Review
Wall Street’s main regulator is boosting its scrutiny of brokerages that deal in cryptocurrencies, according to two people familiar with the matter, the latest sign that authorities want to know more about a burgeoning market that they fear might be full of misconduct, Bloomberg News reported. Brokerages have been peppered in recent weeks with questions from Securities and Exchange Commission examiners about their business practices and how they deal with clients. Among other things, the SEC is seeking specific information about fees generated from trading, financing and initial coin offerings. The agency is also gathering data on investment advisers’ involvement. Cryptocurrencies have gotten increasing attention in the past year from regulators, including SEC Chairman Jay Clayton, who has said he believes the ICO market is rife with fraud. The SEC review, being led by the Office of Compliance Inspections and Examinations, follows requests seeking information from hedge funds about how they price digital investments. It comes as industry self-regulators like the Financial Industry Regulatory Authority and the National Futures Association question member companies about their dealings in cryptocurrencies.
Commentary: Mortgage, Groupon and Card Debt: How the Bottom Half Bolsters the U.S. Economy*
By almost every measure, the U.S. economy is booming. But a look behind the headlines of roaring job growth and consumer spending reveals a shaky foundation: the boom continues in large part because the poorer half of Americans are fleecing their savings and piling up debt, according to a Reuters commentary. A Reuters analysis of U.S. household data shows that the bottom 60 percent of income-earners have accounted for most of the rise in spending over the past two years even as their finances worsened — a break with a decades-old trend where the top 40 percent had primarily fueled consumption growth, according to the commentary. With borrowing costs on the rise, inflation picking up and the effects of President Donald Trump’s tax cuts set to wear off, a negative shock — a further rise in gasoline prices or a jump in the cost of goods due to tariffs — could push those most vulnerable over the edge, some economists warn. That in turn could threaten to scuttle the second-longest U.S. expansion given that consumption makes up 70 percent of the U.S. economy’s output. To be sure, the housing market is still far from the dangerous leverage reached in 2007 before the crash. With unemployment near its lowest level since 2000 and job openings at record highs, people may also choose to work even more hours or take extra jobs rather than cut back on spending if the money gets tight. In fact, a growing majority of Americans says they are comfortable financially, according to the Federal Reserve’s report on the economic well-being of U.S. households published in May and based on a 2017 survey. Yet by filtering data on household finances and wages by income brackets, the Reuters analysis reveals growing financial stress among lower-income households even as their contribution to consumption and the broad economy grows.
*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.
Senate Panel Delays Vote on Trump Consumer Watchdog Pick
A U.S. Senate panel yesterday postponed a vote to confirm President Donald Trump’s pick to lead the U.S. consumer watchdog following an effort by Sen. Elizabeth Warren (D-Mass.) to get more details on the nominee’s role in immigration matters and other policy areas, Reuters reported. In a letter to Senate Banking Committee Chairman Mike Crapo (R-Idaho), Warren asked the panel to postpone today’s scheduled vote to advance the nomination of Kathy Kraninger as director of the Consumer Financial Protection Bureau (CFPB) until she had provided more detailed answers to Warren and other Democrats. Crapo said yesterday in a statement that the hearing would be postponed, but did not confirm whether Warren’s letter was the sole impetus. Warren, Sherrod Brown and other Senate Democrats asked Kraninger last week for more details on the role she played in the Trump administration’s “zero-tolerance” immigration policy that separated more than 2,000 children from their parents. Kraninger provided responses to the committee on Tuesday, but Warren said in Wednesday’s letter that the answers were not sufficiently detailed and that Kraninger had failed to hand over relevant documents.
Analysis: Supreme Court Pick Has Often Favored Employers in Labor Cases
A federal appeals court panel split in 2014 over a case involving a grisly theme-park death, ruling 2-1 that the Labor Department was on sound footing when it sanctioned SeaWorld Entertainment Inc. for safety violations after a trainer was attacked by a killer whale, the Wall Street Journal reported. The two judges upholding the sanction said that while whale-training is a dangerous occupation, SeaWorld could have taken steps to reduce the hazard. One of those judges was Merrick Garland, the Obama Supreme Court nominee whom Senate Republicans declined to consider after Justice Antonin Scalia died in 2016. In dissent was Judge Brett Kavanaugh, President Donald Trump’s current nominee for the high court. Judge Kavanaugh said that the case raised the question of “when should we as a society paternalistically decide” whether people who choose to work in risky sports and entertainment fields “must be protected from themselves.” The case is one of more than 30 involving labor or workplace disputes for which Judge Kavanaugh wrote opinions during his 12-year tenure on the U.S. Court of Appeals for the District of Columbia Circuit, seen as the nation’s second-most powerful after the Supreme Court. He often has favored employers, sometimes embracing positions that other colleagues found too broad or conservative. Yet his record isn’t monolithic; he has also written opinions that sided with employees in several instances, including a racial-discrimination case he has described as one of the most significant of his career.
How has the SCOTUS confirmation hearing process in the Senate changed from previous nominations? What comes next for Judge Brett Kavanaugh? Watch ABI Editor-at-Large Bill Rochelle discuss the process with ABI's Sam Gerdano, former chief counsel to Senate Judiciary Committee Chair Charles Grassley (R-Iowa). Click here.
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