July 30 2024
Olympics; US consumers crack?; insurance losses; AI investment; boys v girls; Venezuela
Paris 2024 Medal Count
1 US consumers show signs of financial stress
2 US home insurers suffer worst loss this century
3 Firms will invest $1.4 trillion in AI by 2027
4 American politics pits boys vs girls
5 After election, unrest spreads in Venezuela
7/30/1965 LBJ signs Medicare into law
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Paris 2024 Medal Count
1 US consumers show signs of financial stress
US consumers are showing signs of flagging after helping to prop up the world’s largest economy since the pandemic, according to a growing number of companies, economists and investors. Last week’s shaky start to the corporate earnings season has fuelled concerns that consumer strength has peaked, despite data on Thursday showing stronger than expected GDP growth in the second quarter, thanks in part to consumption spending. Kathy Bostjancic, chief economist at Nationwide Mutual, said she expected “consumers to rein in their spending as we head through the second half of this year” because “pandemic savings [are] depleted, lower income households increasingly maxed-out on credit and . . . employment growth will continue to cool”. On Friday, a measure of US consumer sentiment fell to its lowest level in eight months as inflation and election uncertainty weakened the economic outlook. The University of Michigan’s consumer sentiment index registered a final reading of 66.4 in July, the lowest since November.
Article Source: FT
2 US home insurers suffer worst loss this century
US home insurers last year suffered their worst underwriting loss this century as a toxic mix of natural disasters, inflation and population growth in at-risk areas put a vital financial market under acute pressure. Insurers providing policies to homeowners suffered a $15.2bn net underwriting loss last year, according to figures from rating agency AM Best, a figure it said was the worst since at least 2000 and more than double the previous year’s losses. The figures lay bare the underwriting conditions that have sparked a pullback by US insurers from disaster-hit areas, either exiting markets or driving up prices, creating an affordability crisis for many homeowners. The report identified rising populations in those regions most susceptible to natural disasters as a significant factor — citing census figures showing that six states prone to severe weather, including California and Texas, accounted for half of the country’s population growth in the 2010s.
Article Source: FT
3 Firms will invest $1.4 trillion in AI by 2027
New Street Research, a firm of analysts, estimates that Alphabet, Amazon, Meta and Microsoft will together splurge $104bn on building ai data centres this year. Add in spending by smaller tech firms and other industries and the total ai data-centre binge between 2023 and 2027 could reach $1.4trn. The scale of this investment, and uncertainty over if and when it will pay off, is giving shareholders the jitters.
Article Source: Economist
4 American politics pits boys vs girls
Collin Mertz, a 23-year-old farmer in North Dakota, believes American men like himself have been targeted by liberals in the push for diversity. “It would seem the white male is the enemy of the left,” said Mertz, who voted for former President Donald Trump in 2020 and plans to do so again in November. Lauren Starrett, a 28-year-old engineer in Cincinnati, feels a personal threat from conservatives seeking to scale back access to abortion and other rights. “It’s kind of terrifying, really,” said Starrett, who backs Vice President Kamala Harris. The forces of American culture and politics are pushing men and women under age 30 into opposing camps, creating a new fault line in the electorate and adding an unexpected wild card into the 2024 presidential election. Voters under 30 have been a pillar of the Democratic coalition since Ronald Reagan left office in 1989. That pillar is showing cracks, with young men defecting from the party. Young men now favor Republican control of Congress and Trump for president after backing President Biden and Democratic lawmakers in 2020. Women under 30 remain strongly behind Democrats for Congress and the White House. They are also far more likely to call themselves liberal than two decades ago.
Young men backed Trump over Biden by 14 points in the merged Journal polls this year, a substantial swing from 2020. In that election, they supported Biden by 15 points, according to AP VoteCast, a voter survey. Young women in the Journal surveys backed Biden by 30 points and Democratic control of Congress by 34 points, essentially unchanged from 2020. The gender gap extends to opposing views of abortion, student-loan forgiveness and other issues affecting the lives of young adults.
Article Source: WSJ
5 After election, unrest spreads in Venezuela
Protests broke out Monday in Caracas, Venezuela’s capital, with hundreds of young people marching through the streets furious over a presidential election in which the incumbent, Nicolás Maduro, declared victory despite widespread accusations of fraud, officially proclaiming the election decided without releasing the full vote counts. The United States and countries around the world denounced the official results of Sunday’s vote, which did not appear to match statistical estimates based on partial counts and other data that showed the president losing by a wide margin.
The disputed election put renewed attention on the Biden administration’s incentives to Venezuela. United States officials’ negotiations with the authoritarian government and easing of sanctions on the country’s vital oil industry had helped pave the way for Sunday’s voting. For now, the administration said it was not considering revoking any licenses to sell oil.
NYT
The Biden administration said Monday it has serious concerns with the Venezuelan election but stopped short of declaring the narrow victory of President Nicolas Maduro fraudulent or calling for additional sanctions against the South American country. U.S. officials said they were awaiting more detailed results from Sunday’s voting in which unified opposition supporters turned out in large numbers and appeared to have won according to unofficial exit polls.
The disputed results could spark massive nationwide protests and intense government reprisals, which could further destabilize the country . Further chaos could also exacerbate migration pressures in the region. Nearly 8 million Venezuelans have fled their country since 2014, many seeking asylum in the U.S. and settling in Texas and Florida.
Politico
Article Source: NYT, Politico
7/30/1965 LBJ signs Medicare into law
Sources
1. https://on.ft.com/4c18Gyb
2. https://on.ft.com/4fpHrQT
3. https://www.economist.com/business/2024/07/28/what-are-the-threats-to-the-1trn-artificial-intelligence-boom
4. https://www.wsj.com/politics/policy/men-women-vote-republican-democrat-election-7f5f726c?mod=hp_lead_pos7?st%3Drlmv1h3c0koprmx&reflink=article_copyURL_share
5. https://www.nytimes.com/2024/07/29/world/americas/countries-concern-venezuela-election-results.html?smid=nytcore-ios-share&referringSource=articleShare; https://www.politico.com/news/2024/07/29/biden-administration-venezuela-election-fallout-00171731
Thanks for reading!
