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Biden on the sidelines of 'Striketober,' with economy in the balance – NBC News

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WASHINGTON — As a wave of workers across the country take to picket lines, President Joe Biden is witnessing a resurgence in the labor movement he spent decades championing — at a time when it could hamper the economic recovery he is fighting to protect.

Biden has said that he supports the workers’ right to strike but that he is “not going to get into the negotiation,” and White House officials say he doesn’t plan to get involved in any of the labor disputes involving more than 100,000 workers across the country. Instead, he has taken the position that the decision to strike is up to the workers, leaving it to them and their employers to resolve disputes, the officials said.

It’s a shift for Biden. As a presidential candidate and a senator, Biden joined picket lines and tweeted out support for striking workers. He has called himself the most pro-labor president in history, having come out in support of Amazon workers trying to unionize and repeatedly inviting labor leaders to the White House.

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But President Biden faces a different dynamic from candidate Biden, because strikes risk adding to labor shortages and supply chain disruptions that are already driving up prices as the global economy reels from pandemic strains. While the strikes could benefit workers by driving up wages in the long term, the near-term impact of persistent or growing work stoppages could include worst-case scenarios like food shortages or lack of access to hospitals.

“This will come at an economic cost to employers and therefore the economy, and I think that may be why Biden has gone a little silent,” said Ariel Avgar, an associate professor of labor relations, law and history at Cornell University. “It is tricky for him. On the one hand, he is on the record supporting unions and their ability to use collective action. On the other hand, the point of strikes is to extract an economic price for employers unwilling to negotiate in a way the union feels is appropriate.”

There have been 184 strikes by health care to factory workers this year after the coronavirus pandemic aggravated concerns over low wages and poor working conditions, and the tight labor market has given workers more leverage. Among the strikers are more than 10,000 John Deere workers who went on strike this month. More than 24,000 health care workers at Kaiser Permanente are preparing to strike, joining thousands of nurses and other health care workers elsewhere who have been striking for months.

Biden made his only comments about what has been dubbed Striketober in response to a reporter’s questions last week.

“They have a right to strike, and they have a right to demand higher wages, and the companies they’re striking on are doing very well,” Biden said. “I’m not going to get into the negotiation, but my message is: If you think that’s what you need, then you should do it.”

A White House official said that Biden has spoken extensively about his support for unions and collective bargaining and that he believes “workers have a right to strike and government’s job is to defend that right.” Press secretary Jen Psaki framed the strikes as a positive sign for the economy when she was asked about them last week.

The message stops short, however, of specifically supporting the workers who are on strike, which Biden could do without getting directly involved in any negotiations.

“A statement that the president supports the right isn’t much in and of itself, because the right is already there in law. It would be a bolder statement that he supports workers on strike,” said Robert Reich, who was labor secretary during the Clinton administration. “He could come out with a statement saying many of these workers have been crucial during the pandemic, essential workers, the nurses, they are all entitled to better pay and better working conditions.”

Some of those on the front lines have been eager for Biden and his administration to take a more active role. David Schildmeier, a spokesman for the Massachusetts Nurses Association, said he is being asked almost every day by nurses striking outside Saint Vincent Hospital in Worcester, Massachusetts, why Biden hasn’t given his support or whether Vice President Kamala Harris would be willing to come to the picket line.

Marlena Pellegrino, who has worked at the hospital for 35 years, and 700 other Saint Vincent nurses have been picketing for more than eight months. Many of them have lost their health insurance benefits and are starting to look for other work. The nurses initially began striking to improve staffing levels, but the issue has turned to whether they will be allowed to return to their jobs once the strike is over, Pellegrino said.

“It is time for someone to step up,” she said. “We would absolutely love and implore the president to get involved. There hasn’t been any direct involvement at that level.”

While Biden has yet to get directly involved in any of the strikes, some of his top officials have, both publicly and behind the scenes. Labor Secretary Marty Walsh has been in contact with the striking nurses at Saint Vincent hospital, in his home state, and made calls on their behalf, Schildmeier said. Agriculture Secretary Tom Vilsack joined striking John Deere employees on the picket line in his state, Iowa, on Wednesday.

“These folks were very supportive of me when I ran for governor, and it’s something that you don’t forget, especially when you’re behind and not many people had that faith and confidence in you,” Vilsack told the John Deere workers. “You remember the people that did. When they need somebody to give them a pat on the back, I want to be here for them.”

Biden’s nominee to be chief labor mediator, Javier Ramirez, whose task it is to help resolve and prevent disputes, has contacted officials with Kaiser Permanente and the union weighing a strike against it, said Maureen Anderson, the chief of staff for the Alliance of Healthcare Unions, which is representing the Kaiser workers.

While not specifically addressing the strikes, Harris and Walsh met Wednesday with federal workers and announced administration policies to help inform workers of their rights to organize as part of the White House Task Force on Worker Organizing and Empowerment.

There are some actions a president can take to resolve a strike, such as forcing both sides back to the negotiating table under laws allowing presidents to intervene in airline or railway strikes or when a strike reaches the level of a national emergency that jeopardizes health and safety.

The moves are often seen as hindering workers’ rights, and they usually require a strike to have larger economic consequences beyond a single industry or region. But presidents can show their support for a particular movement, which Avgar of Cornell said he is surprised he hasn’t seen from Biden, given his strong support for unions in the past.

“It isn’t surprising politically to try to walk a fine line” when it comes to supporting the labor movement, he said. “But not coming out with the full-throated support he did previously is surprising.”

Pellegrino said she has seen the power national figures can have in resolving strikes. The last time the Saint Vincent nurses went on strike, Sen. Ted Kennedy stepped in and brokered a deal. Ultimately, an agreement was reached in Kennedy’s Senate office with the two sides in separate rooms and Kennedy and his staff mediating.

“We are fighting corporate America, just the 700 of us, and that is not a lot of people. It feels like David and Goliath,” she said. “We are feeling the onus on our shoulders, and we are carrying this weight. It is very overwhelming.”

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Dollar up against safe havens as risk sentiment improves on Omicron news

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The dollar edged higher against safe-haven currencies such as the yen and Swiss franc after reassuring news on the Omicron COVID-19 variant, while units like the Australian dollar that had weakened in recent weeks on growth worries also advanced.

U.S. Treasury yields rose and stocks gained after news that initial observations suggested Omicron patients had only mild symptoms, reversing some of Friday’s heavy selloff.

While Omicron has spread to about one-third of U.S. states as of Sunday, Dr. Anthony Fauci, the top U.S. infectious disease official, told CNN that “thus far it does not look like there’s a great degree of severity to it”.

“The absence of negative developments surrounding Omicron over the weekend appears to be helping markets stabilize today after the dramatic moves at the end of last week,” Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note.

The dollar climbed 0.5% against the Japanese yen and rose 0.9% against the Swiss franc. The yen and the franc typically draw investors looking for safety when economic or geopolitical tensions rise.

The dollar fell 0.3% against the Japanese currency on Friday..

The greenback’s losses on Friday had also followed a below-forecast jobs report, though the data did little to shake market expectations the Federal Reserve will accelerate the pace of unwinding stimulus and raise interest rates, starting next year.

The U.S. Dollar Currency Index, which measures the greenback against six rivals, was 0.1% higher at 96.309, not far from the 16-month high of 96.938 touched late last month.

Investors have grown more bullish on the dollar in recent weeks, with net long bets on the greenback climbing to the highest level since June 2019, data from the U.S. CFTC showed on Friday.

Meanwhile, the Australian dollar rose as much as 0.64%, rebounding from the 13-month low hit last week.

Russia’s rouble slipped into the red in late trading on Monday after U.S. President Joe Biden warned his Russian counterpart Vladimir Putin of severe economic consequences in case of a Ukraine invasion ahead of a call between the two men on Tuesday.

The Canadian dollar strengthened against its U.S. counterpart on Monday as oil prices rose and attention turned to a Bank of Canada interest rate decision this week, with the currency recovering from its lowest level in more than two months.

Elsewhere, cryptocurrencies nursed big losses from a wild weekend that at one stage crushed bitcoin more than 20%. Bitcoin slipped 0.6% to around $49,166.35 on Monday.

(Reporting by Saqib Iqbal AhmedEditing by Paul Simao/Mark Heinrich)

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China cuts reserve requirement ratio as economy slows – BNN

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China cut the amount of cash most banks must hold in reserve, acting to counter the economic slowdown in a move that puts the central bank on a different policy path than many of its peers.

The People’s Bank of China will reduce the reserve requirement ratio by 0.5 percentage point for most banks on Dec. 15, releasing 1.2 trillion yuan (US$188 billion) of liquidity, according to a statement published Monday. 

The reduction was signaled by Premier Li Keqiang last week when he said that authorities would cut the RRR at an appropriate time to help smaller companies, and is the second reduction this year. The decision comes after recent data showed the economy and industry stabilizing, although Beijing’s tightening curbs on the property market have led to a slump in construction and worsened a liquidity crisis at developer China Evergrande Group and other real-estate firms. 

The cut is a “regular monetary policy action,” the PBOC said, pre-empting expectations that the decision was the start of of an easing cycle. “Prudent monetary policy direction has not changed,” it said, adding that the bank “will continue with a normal monetary policy, maintaining the stability, consistency and sustainability of policy, and won’t flood the economy with stimulus.”

However, with the U.S. Federal Reserve and other global central banks looking to tighten policy, the move to add stimulus by the PBOC makes the divergence between China and much of the rest of the world even clearer. 

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What Bloomberg’s Economists Say

“We think the reduction would help offset the headwinds facing the economy, particularly in the first quarter of 2022. We maintain our view that an additional 50-100 basis points of RRR cut would come next year.”

– David Qu, economist

Separately, the Communist Party’s Politburo said China will continue to implement a proactive fiscal policy in 2022, and prudent monetary policy will be flexible and appropriate, and maintain reasonably ample liquidity, the official Xinhua News Agency. The Monday meeting of the Politburo will be followed by the Central Economic Work Conference sometime this month, which will flesh out economic policy plans for the next year. 

The cut will be applied to all banks except those that are already on the lowest level of 5 per cent, which are mostly small rural banks, according to the statement. The weighted average ratio for financial institutions will be 8.4 per cent after the cut, down from 8.9 per cent previously, the PBOC said in a separate statement.

Some of the money released by the RRR cut will be used by banks to repay maturing loans from the PBOC’s medium-term lending facility, and some of it will be used to replenish financial institutions’ long-term capital, the central bank said. There are almost 1 trillion yuan worth of the 1-year loans maturing on Dec. 15, the day the cut takes effect. 

Even with the deepening housing market slump, authorities had been restrained in adding new support policies, holding monetary policy steady and maintaining a measured pace of fiscal spending. However, the PBOC signaled an easing bias in the latest monetary policy report last month, while the State Council urged local governments to speed up spending. 

“The aim of the RRR cut is to strengthen cross-cyclical adjustment, enhance the capital structure of financial institutions, raise financial services capabilities to better support the real economy,” the PBOC said. The cut will effectively increase long-term capital for banks to serve the real economy, and the PBOC will guide banks to step up their support for small businesses, it said. 

A cut in the reserve ratio doesn’t directly lower borrowing costs, but quickly frees up cheap funds for banks to lend. The reduction will lower the capital cost for financial institutions by about 15 billion yuan each year, which will lower the overall financing cost of the economy, the PBOC said.

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China think-tank warns of economic slowdown – Aljazeera.com

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Advisers to Beijing will recommend a 2022 growth target that’s lower than the target that had been set for 2021.

Ongoing stress in China’s property sector is likely to slow down the country’s economic growth next year, a government think-tank has warned.

The world’s second-largest economy is expected to have expanded by about 8 percent this year, according to the annual blue book on the economy from the Chinese Academy of Social Sciences (CASS), a top government think-tank. It warned that the property downturn was likely to persist and weigh on the expenditures of local governments next year.

China’s economy is expected to grow about 5.3 percent in 2022, bringing the average annual growth rate forecast for 2020-2022 to 5.2 percent, CASS said on Monday.

Advisers to the government will recommend that authorities set a 2022 economic growth target lower than the target set for 2021 – or “above 6 percent” – Reuters reported, amid growing headwinds from a property downturn, weakening exports and strict COVID-19 curbs that have impeded consumption.

It urged the central government to proactively engineer a soft landing for the property sector, to avoid failed land auctions in big cities and to fend off risks of quickly falling property prices in smaller cities, the report said.

China’s move to wean property developers away from rampant borrowing has translated into loan losses for banks and pain in credit markets, as cash-strapped builders fall into distress, increasing risks across the economy.

Property behemoth China Evergrande is facing one of the country’s largest defaults, prompting the authorities to step in and oversee risk management at the company.

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