May 29 2024
American Dream; Rafah; App Stores; OPEC; South Africa; Mt Everest
1 High interest rates threaten American Dream
2 ELECTION 2024 Deadly Rafah collateral damage squeezes Biden
3 App stores are hugely lucrative—and under attack
4 OPEC members cheat, keeping oil cheaper
5 South Africa goes to the polls today
5/29/1953 Edmund Hillary and Tenzing Norgay reach Everest summit
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1 High interest rates threaten American Dream
A renter who hoped to buy a home has resigned himself to rent forever. A first-time buyer who had hoped to refinance a 7% mortgage is pulling back spending everywhere else to keep up. And a young couple is making a painful tradeoff for their family.
As interest rates in the US remain higher for longer, the American Dream of affordable homeownership is unattainable for longer — and maybe for good. Perhaps more than anything else, mortgage rates are the single biggest factor that determine one’s economic mobility in the US. Mortgage rates have been hovering around 7% for over a month — more than double what they were three years ago — and many were counting on them coming down as inflation rapidly retreated toward the end of last year. But price growth ramped back up again to start 2024, and now the Federal Reserve is keeping rates at a two-decade high for the time being. That unrelenting pressure has upended major life plans for US consumers and could mean staying in a dead-end job or refusing to relocate for a better opportunity, which can affect business and productivity. It’ll likely exacerbate all kinds of gaps in wealth as more people are shut out from buying houses, creating a wider chasm between those who own and those who don’t. While owners benefited from a $1.3 trillion home-equity windfall in 2023, renters saw costs remain high, pandemic savings dry up and household debt rise.
Article Source: Bloomberg
2 ELECTION 2024 Deadly Rafah collateral damage squeezes Biden
President Biden is facing fresh political tension at home following an Israeli airstrike on Rafah that Palestinian authorities said killed dozens of civilians. Israel said the strike killed two top Hamas officials, but Palestinian authorities said it also led to the deaths of at least 45 Palestinian civilians and wounded others, including women and children. Israeli Prime Minister Benjamin Netanyahu called the civilian deaths a “tragic mistake” and promised to investigate. Coming after weeks of pro-Gaza protests that roiled college campuses around the country, the latest violence underscores Biden’s continuing struggle over how much support to give Israel in its monthslong war with Hamas as he faces a tough re-election race. The left flank of his party argues that the U.S. is abetting immoral behavior in Gaza, including by providing deadly weapons to the Israeli military. His party also contains pro-Israel Democrats. And Republicans have cast themselves as Israel’s strongest backers, with House Speaker Mike Johnson (R., La.) inviting Netanyahu to address Congress. Senate Majority Leader Chuck Schumer (D., N.Y.), who has criticized Netanyahu and called for new elections in Israel, hasn’t commented publicly on Johnson’s invitation beyond saying he was discussing the issue with the speaker.
Article Source: WSJ
3 App stores are hugely lucrative—and under attack
Since the first iPhone fell into people’s pockets in 2007, apps have steadily become the portal of choice to the digital world. The mobile devices on which they run now account for two-thirds of global internet traffic. Inhabitants of rich countries spend about five hours a day staring at apps—roughly a third of their waking lives. Around the world some 3.5bn people use them each month. That has made the app stores that distribute them a lucrative business for Apple and Alphabet, the tech titans whose ios and Android operating systems power the vast majority of the world’s mobile devices. That, in turn, has drawn the attention of governments. They are leaning on the duopoly to limit access to disfavoured apps while at the same time working to loosen its stranglehold over the market. They risk irking consumers on both counts.
Article Source: Economist
4 OPEC members cheat, keeping oil cheaper
The organisation of the Petroleum Exporting Countries (opec) and its allies, a group that produces 40% of the world’s crude, wants to keep oil prices high and stable. Lately they have certainly been stable, even if not that high. Despite the recent death of Iran’s president and the escalating war in Gaza, prices of Brent crude, the global benchmark, have stayed within $2 of $82 a barrel since the start of May. Part of the reason why opec is failing to keep prices high is because its members are failing to keep to their output targets. In March the group’s leaders and Russia extended production cuts, vowing a reduction of 2.2m barrels a day (b/d), or 2% of global supply, until the end of June, on top of 3.7m b/d of previously agreed cuts for 2024. Yet the cartel is now overproducing so much that its daily output in 2024 is little changed from the last quarter of 2023. This will create tensions when members get together to decide their strategy at opec’s ministerial meeting on June 2nd.
Article Source: Economist
5 South Africa goes to the polls today
South Africa’s election, due to be held on 29 May, is the most important since the 1994 contest that vanquished apartheid and swept Nelson Mandela to power. Given the Rainbow Nation’s centrality to democracy on the world’s fastest-growing continent, it has a good claim to being Africa’s most important election for three decades too. The ANC, the party that Mandela led to victory and which has ruled South Africa ever since, looks likely to fall below 50% of the vote for the first time. Voting for the ANC has been the default option for most black South Africans for a generation. But almost all opinion polls show the ANC will lose its parliamentary majority. The party obtained 57.5% support in the last national election in 2019, which was its worst performance yet.
Article Source: Economist
5/29/1953 Edmund Hillary and Tenzing Norgay reach Everest summit
Sources
https://www.bloomberg.com/news/articles/2024-05-28/american-dream-of-homeownership-is-falling-apart-with-high-mortgage-rates
https://www.wsj.com/politics/national-security/israels-deadly-rafah-strike-turns-up-political-pressure-on-biden-afaae7fd?st=gy1x328sa2s1d1v&reflink=article_copyURL_share
https://www.economist.com/business/2024/05/13/app-stores-are-hugely-lucrative-and-under-attack
https://www.economist.com/finance-and-economics/2024/05/27/opec-heavyweights-are-cheating-on-their-targets
https://www.economist.com/briefing/2024/05/23/why-this-is-south-africas-most-important-election-since-1994
Thanks for reading!
