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Growth Risks To The Economy Intensify – Forbes



Mask mandates now are a reality in many parts of the country. That can’t be good for economic growth in Q3. The first pass at Q2 GDP came in light, with growth of +6.5% where the consensus was north of 8%. Despite that disappointment, markets seemed to like the number, even as Amazon, the poster-child company for pandemic America, disappointed.


Some street economics departments are now seeing Q3 and Q4 with jaundiced eyes, as we do. Goldman Sachs, for example, has recently put the year’s second-half growth projection in the 1.5% – 2.0% range, while the overall consensus is still near 7%. And, as you will see in our comments below, the consensus has consistently missed on the optimistic side, suggesting to us that the upcoming slower growth hasn’t yet been priced into markets.

In fact, a look at the 6.5% Q2 GDP growth pattern reveals that nearly all that 6.5% was in the Q1 to Q2 handoff. Remember, the helicopter money drop in March propelled that month to new growth heights. Some of it spilled over into April, but May and June GDP growth rates were nonexistent. So, while Q2 maintained the March GDP levels providing the 6.5% Q2 bounce, the handoff to Q3 was flat. Maintaining June’s GDP levels would result in a no-growth Q3. While we are not in the predicting business, it is clear to us that the 7%+ consensus GDP forecast for Q3 is in left field. The equity market has yet to confront that reality. On the other hand, the bond market, which has befuddled many a media commentator, seems to have picked up on this growth issue, with yields across the spectrum continuing to march lower.


The labor scene continues to be bifurcated, with the states that have opted-out of the federal $300/week unemployment supplement making much faster progress on the employment front than the states that have opted in. We acknowledge that there is more at play here than just the federal subsidy (e.g., child-care issues, school openings, fear of infection, or maybe the opt-out states just opened their economies earlier and/or more fully). Nevertheless, the data say that the federal subsidy appears to be playing a major role. 

For the latest data week (July 24), the Initial Unemployment Claims (ICs) at the state level were a mixed bag with the seasonally adjusted number at 400K, a decline of -19K from last week’s number (419K, since revised up to 424K). The consensus view was on the optimistic side, at 385K, so a disappointment. Readers of this blog know that we don’t believe that the pandemic distortions are subject to seasonality, so we rely on non-seasonally adjusted data. On that score, there was a huge down move to 345K in the state ICs from 406K (since revised to 411K). That’s a -61K move in the right direction. 43 states reported fewer ICs, 10 reported higher, but in seven of those 10, the uptick was less than 1,000. Only in TN (+1,439), NV (+2,434), and CA (+10,937) was the uptick more than 1,000. CA is an outlier, both in ICs, and in Continuing Claims (CCs), those receiving benefits for more than one week (more on CA below).

We think that in the post-September 6 period, the opt-in states will show much faster unemployment declines as the federal subsidy disappears. 

The table shows the percentage changes in unemployment over the latest three weeks of data by date of opt-out using the May 15 data as the base. In this week’s table we’ve added a line to exclude CA from the opt-in states as CCs there have risen a gargantuan +234K over the past two weeks.

Here are some other aggregated observations:

  • Total State CCs July 17:                          3,247,071        100.0%
  • Opt-In State CCs July 17:                        2,453,666        75.6%
  • Opt-Out State CCs July 17:                      793.405         24.4%
  • Total Change in CCs July 10-17:             -28428
  • Total Change Opt-in July 10-17:           +56967
  • Total Change Opt-out July 10-17:         -85395

Convinced? The week of July 17 saw the opt-out states, with 24.4% of the total CCs, reduce their unemployed by -85K while the opt-in states (75.6% of the CCs) increased their unemployment levels by nearly +57K!!

OK – let’s exclude CA. The data now show that the opt-ins (ex-CA) have reduced their unemployment by a significant -15.4%, still behind the -26.5% of the opt-outs, but better than the -11.3% figure of the prior week. We expect rapid catch-up in the weeks ahead for the opt-ins. As for CA’s data for the past two weeks, the only plausible explanation we can fathom, and this is just speculation, is that the rapid rise in ICs and CCs there is due to the Delta-Variant. If this turns out to be the cause, and CA turns out to be a leading indicator, think of what this might mean for the Q3 and Q4 economic growth path!


The idea that the inflation we are currently experiencing is somehow “systemic” is still playing well in the financial media. At the press conference after the last Fed meeting (July 27-28), Chair Powell, while vague on dates and determinants of Fed policy actions going forward, was insistent (and consistent) that the Fed still sees the current inflationary bout as “transient.” On Friday, July 30, the Fed’s most closely watched inflation indicator, the Personal Consumption Expenditure (PCE) price deflator was reported as +0.5%, slightly lower than the +0.6% consensus expectation. The “core” reading (less food and energy) was +0.4%. On a Y/Y basis, headline was +4.0% with “core” at 3.5%. As indicated above, this is the Fed’s primary inflation guide. 

The blue line on the graph at the top shows the Y/Y percentage changes in this metric from January 2019 through June 2021. The right-hand side looks pretty scary: March 2021: +12%; April: +30%; May: +20%; June: +14%. But move your eye leftward on the blue line. There were 10 straight months of negative Y/Y readings. The financial media isn’t talking about these.

Most of these Y/Y gyrations are occurring because of “base effects,” i.e., the downdraft in this inflation gauge of a year ago in the denominator of the percentage change distorts the true picture. We have included a second line on the graph (orange) that uses 2019 data as the denominator. The resulting percentage changes are over a two-year period, so we annualized them. That is, if the resulting number is 4%, it means that, beginning in the 2019 month, multiplying the price by 1.04 twice (once for 2020 and once for 2021) would result in today’s price level. This method gets rid of the “base effect” issue. Now look at the right-hand side (orange line). Not so scary after all: March: 4.2%, April 4.4%, May: 4.2%, June: 4.6%. For comparison, the Y/Y percentage changes in this PCE measure were 4.5% in December 2019, 4.7% in January 2020, and 4.7% in February 2020. Today’s prices, then, after removal of the “base effects” are rising at the same rate as they were pre-pandemic. Back then, no one was talking or writing about inflation. As these “base effects” disappear over the next few months, so will the inflation angst. The Fed knows this.

Other Data

There is other data that convinces us that GDP growth will be flat over the next six months.

·     Housing: This looks to have peaked. Remember, despite levels, if M/M data are lower, growth is slowing. 

  • New Home Sales for June were 676K down -12.1% from the 769K May initially reported (since revised significantly downward to 724K). The consensus estimates, of course, use the latest available data (769K in this case), and thought that a 3.5% rise from 769K to 796K was in the cards. The miss was a gargantuan -15.1%. (See what we mean by overly optimistic estimates?)
  • Existing Home Sales, while slightly higher in June at 5.86 million units (annual rate) than in May (5.78 million), still represented a -26% fall for the last six months. The reason, as everyone knows, has mainly to do with rapidly rising prices with median prices up +23.4% Y/Y and at a hellish +38.0% annual rate over the last six months.
  • As a result, mortgage loan applications are off -21% in 2021.

·     Construction: Both residential and non-residential construction are negative M/M with non-residential looking to be in a recession of its own.

·     Supply Bottlenecks: Indications of supply delay times and backlog data from the latest regional Federal Reserve Banks (KC, Richmond, Philly, NY, and Dallas) show significant easing in the supply chains.

·     Moratoriums: The eviction moratorium supposedly expired on Saturday, July 31. There are eight million renters (15% of the total) that are behind on rent, and 1.55 million mortgagees (2.9% of active mortgages) are delinquent. Payments on student loans, too, have not been required for some time. 

  • Let’s consider the best possible outcome: mortgages get extended payment terms, and renters are required to pay increased rent until the back rent is repaid (no evictions). In both cases, consumers are left with fewer net dollars than they had when the moratoriums were in effect, as they must begin again to make mortgage and (higher) rent payments. This certainly can’t be a positive for the economic growth scenario.

·     Delta-Variant: We noted at the top of this blog that mask requirements have been re-imposed on a significant portion of the population. The accompanying map shows the U.S. regions most impacted. This is just another negative for economic growth going forward (but perhaps a positive for Amazon!).


  • The data and trends portend much weaker second half 2021 economic growth.
  • The opt-out states have made, to date, greater strides in reducing unemployment than have the opt-ins. Ex CA, however, as the September 6 supplement end date approaches, the opt-ins are starting to catch-up. We expect this trend to intensify in August and (especially) September.
  • The Fed closely watches the PCE deflator. Our analysis indicates that the four-month spike in the PCE index is, indeed, transient.
  • From an economic growth point of view, the ending of the moratoriums on rent, mortgage payments and payments on student loans can only be a negative.
  • Mask wearing has returned. CA’s employment data has rapidly deteriorated. We don’t know why, but if it is due to the Delta-Variant, economic growth could be severely impacted. 

(Joshua Barone contributed to this blog.)

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Charting the Global Economy: Retail Sales Stumble in UK, China – BNN



(Bloomberg) — Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

The global economy is still feeling the weight of Covid-19, which is complicating recovery efforts and sparking inflation.

Retail sales in the U.K. and China continued a stretch of weakness, while those in the U.S. unexpectedly rose. Inflation remains elevated in most parts of the world, and soaring food prices are especially hurting populations in emerging markets.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy:


Covid-19 still isn’t done hobbling the global economy. From the U.S. to China and Germany, the latest data are flagging an economic slowdown as the new form of the coronavirus hits spending just as supply chain snarl ups threaten to keep inflation elevated. Both the world’s two largest economies are feeling a squeeze. 

Companies around the world from noodle makers to semiconductor giants are spending on new plants and machinery in ways they haven’t done for years. Globally, corporate capital expenditure, or capex, will jump by 13% this year, according to S&P Global Ratings, with growth in all regions and broad sectors — especially in semiconductors, retail, software and transportation.

The global economy is expected to undergo its fastest recovery in almost five decades this year, but deepening inequities between advanced and developing countries threaten to undermine this, the United Nations warned.


Prices paid by U.S. consumers rose in August by less than forecast, snapping a string of hefty gains. The data offered some comfort for “team transitory” –- those at the Federal Reserve and elsewhere who say price spikes caused by the economy’s reopening will soon abate.

Retail sales rose unexpectedly in August as a pickup in purchases across most categories more than offset weakness at auto dealers, showing resilient consumer demand for merchandise. The report showed firmer receipts at online retailers, general merchandise stores, furniture outlets and grocery stores.


U.K. retail sales fell unexpectedly for a fourth month in August, the longest stretch of declines in at least 25 years, raising concerns about the economic recovery as a resurgence of coronavirus cases and supply shortages take a toll.

U.K. inflation surged more than expected to the strongest pace in more than nine years, prompting investors to anticipate a sharper increase in interest rates in 2022. Consumer prices jumped 3.2% in August from a year ago, the most since March 2012, the Office for National Statistics said on Wednesday.

France’s sooner-than-expected economic recovery from the slump during the Covid-19 pandemic is reviving deep problems in the labor market that have long hobbled growth, the country’s central bank said. 


China’s economy took a knock in August from stringent virus controls and tight curbs on property, fueling concerns about the global recovery as countries battle to get delta outbreaks under control. Retail sales growth slowed to 2.5% from a year ago.

Australia’s fiscal coffers are under assault on two fronts as its largest export goes into free-fall while the nation’s biggest cities and swathes of the east coast are under virus lockdown, driving up emergency spending.

Emerging Markets

Global food prices were up 33% in August from a year earlier with vegetable oil, grains and meat on the rise, data from the United Nations Food and Agriculture Organization show. It’s unlikely to get better as extreme weather, soaring freight and fertilizer costs, shipping bottlenecks and labor shortages compound the problem.

©2021 Bloomberg L.P.

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Remarks by President Biden on the Economy – The White House



East Room

2:00 P.M. EDT
THE PRESIDENT:  Good afternoon.  I want to start by thanking the House committees for working hard this week to advance critical components of the economic plan that I’ve put before the Congress.
I know we still have a long way to go, but I’m confident that Congress will deliver to my desk both the bipartisan physical infrastructure plan and the Build Back Better plan that I have proposed.
And I’ve said many times before: I believe we’re at an inflection point in this country — one of those moments where the decisions we’re about to make can change — literally change the trajectory of our nation for years and possibly decades to come. 
Each inflection point in this nation’s history represents a fundamental choice.  I believe that America, at this moment, is facing such a choice.  And the choice is this: Are we going to continue with an economy where the overwhelming share of the benefits go to big corporations and the very wealthy?  Or are we going to take this moment right now to set this country on a new path — one that invests in this nation; creates real, sustained economic growth; and that benefits everyone, including working people and middle-class folks?
That’s something we haven’t realized in this country for decades.
The data — (clears throat) — excuse me.  The data is absolutely clear.  Over the past 40 years, the wealthy have gotten wealthier, and too many corporations have lost their sense of responsibility to their workers, their communities, and the country.
Just look at the facts.  CEOs used to make about 20 times the average worker in the company that they ran.  Today, they make more than 350 times what the average worker in their corporation makes.
Since the pandemic began, billionaires have seen their wealth go up by $1.8 trillion.  That is, everyone who was a billionaire before the pandemic began, the total accumulated wealth beyond the billions they already had has gone up by $1.8 trillion.  Simply not fair.
And it’s — how is it possible that 55 of the largest corporations in this country paid zero dollars in federal income taxes?  They made over $40 billion in the year 2020, and they’ve paid zero.  Think about that.  Zero dollars in federal taxes on $40 billion in profits.
How is it possible that the wealthiest billionaires
in the country can entirely escape paying income tax on what they’ve made?
How is it possible for millionaires and billionaires that can pay a lower rate of tax than teachers, firefighters, or law enforcement officers?
Here’s the simple truth.  For a long time, this economy has worked great for those at the very top, while ordinary, hardworking Americans — the people who built this country — have been basically cut out of the deal.
And I’ve said this from the time I announced I was going to run: I believe this is a moment of potentially great change.  This is our moment to deal working people back into the economy.  This is our moment to prove to the American people that their government works for them, not just for the big corporations and those at the very top.
When I was sworn in as President, the nation was struggling to pull out of the worst economic crisis since the Great Depression.  Job growth was anemic, with just over 60,000 new jobs per month in the three months before I was sworn in.
Then we went to work and passed the American Rescue Plan back in March.  And it worked.  It’s still working.
Over the last three months, we’ve been creating, on average, 750,000 new jobs per month.  Our economy is growing at the fastest rate we’ve seen in nearly 40 years.
Our recovery is unique in the world.  We’re the only developed country in the world whose economy is now bigger than it was before the pandemic.
While this is all good news, I know many Americans are still struggling to make it through each and every day.
For too many, it’s harder and harder to pay the bills — food, gas, rent, healthcare.  I get it.  We still have a long way to go to get the economy where it needs to be.
As I’ve said for a long time: Coming out of this economic crisis as deep as the one we were in was never going to be easy.  But we’re doing it, and we can continue to do it.
COVID, supply chain issues, and bad actors seeking to profit off the pandemic are all contributing to the challenges we’re facing.
That’s why I’ve made getting COVID under control my top priority from my first day as President.  Everything — everything, from our public health to our economy, depends on this.
We made enormous progress against the virus through the summer, and now we’ve put ourselves in a strong position to battle this Delta variant.  That’s why the actions I proposed on vaccines last week are so critical: from requiring federal workers to get vaccinated; requiring healthcare workers to be vaccinated; requiring employers with over 100 employees to institute vaccine and/or test protocols, calling on — for them to be able to know what their employers — their employees are doing before they walk through the door; calling for vaccine or test requirements to enter big venues; and a whole series of steps I proposed to protect our kids in schools.
Wall Street firms have analyzed the impact of these plans, and they’re projecting that these new requirements will help 12 million more Americans get vaccinated, which will help more businesses stay open and more Americans back to work.
The data shows that the overwhelming majority of Americans agree with my proposal.  That’s — there’s no surprise, given that 76 percent of American adults have already gotten at least one shot.
But — but we’re facing a lot of pushback, especially from some of the Republican governors.  The governors of Florida and Texas — they’re doing everything they can to undermine the lifesaving requirements that I’ve proposed.
And some of the same governors attacking me are in states with some the strictest vaccine mandates for children attending school in the entire country.
For example, in Mississippi, children are required to be vaccinated against measles, mumps, rubella, chickenpox, hepatitis B, polio, tetanus, and more.  These are state requirements. 
But in the midst of a pandemic that has already taken over 660,000 lives, I propose a requirement for COVID vaccines, and the governor of that state calls it, quote, a “tyrannical-type move”?  A “tyrannical-type move”? 
This is the worst kind of politics because it’s putting the lives of citizens of their states, especially children, at risk.  And I refuse to give in to it. 
These policies are what the science tells us we need to do.  They’re going to save lives.  And they’ll protect our economic recovery as well, and allow the economy to continue to grow.
We’re also going after the bad actors and pandemic profiteers in our economy.  There’s a lot of evidence that gas prices should be going down, but they haven’t.  We’ll be taking a close look at that.
Taxpayers in this country also have paid for extraordinary effort to keep our country going over the past year or so. 
Unlike the last administration, which resisted oversight and allowed taxpayers to be victimized by fraud, we’re working hard to protect vulnerable Americans from having their identities stolen — as a consequence of their unemployment check stolen as well.
And we’re going offer organized criminal — we’re going to go after organized criminals that defraud America or misuse COVID funds.
Look, we’re also taking a closer look at places in our economy where fewer and fewer corporate giants are controlling more and more of the marketplace in the area that they work.
Just look at agriculture and the food industry.  A very small number of giant corporations now dominate the market, which gives them the ability to drive up prices because they face so little competition.
As we work to build healthier competition in our economy and crack down on bad actors, the American Rescue Plan, which we passed in March, is still working to give hardworking Americans — hardworking people some relief.
One of the best examples of that relief is the expansion of the Child Tax Credit, which, in effect, is essentially a historic tax cut for families with children.
Just yesterday, 39 million working moms and dads got their direct payment.  That money is going to help cover groceries, the mortgage, new pairs of shoes — all the things that kids need.  It’s a tax cut for working families.
So, we’re working to provide as much relief as we can right now to American families.  But here’s the truth: Yes, the pandemic has caused a lot of economic problems in the country, but the fact is our economy faced challenges long before this pandemic struck.  Working people were struggling to make it long before the pandemic arrived.
Big corporations and the very wealthy were doing very well before the pandemic.  That’s why I’ve said — starting back in my campaign for president — that it’s not enough just to build back; we have to build back better than before.  And that’s how it all begins. 
Big corporations and the super wealthy have to start paying their fair share of taxes.  It’s long overdue. 
I’m not out to punish anyone.  I’m a capitalist.  If you can make a million or a billion dollars, that’s great.  God bless you.  All I’m asking is you pay your fair share.  Pay your fair share just like middle-class folks do.  But that isn’t happening now.
Today, in this country, right now, the top 1 percent, for example, evade an estimated $160 billion in taxes that they owe each year.  Not new taxes, taxes that they owe. 
And the way it works is this: If you’re a typical American — like I suspect most of the press people sitting in front of me here — you pay your taxes.  Why?  Because you get a W-2 form.  It comes in the mail every year.
The IRS gets that information as well.  Your taxes get deducted from your paycheck, and you pay what is owed beyond that.  That’s why about 99 percent of working people pay the taxes they owe.
But that’s not how it works for people with tens of millions of dollars.  They play by a different set of rules.  And they’re often not employees themselves, so the IRS can’t see what they make and can’t tell if they’re cheating.
That’s how many of the top 1 percent get away with paying virtually nothing.  It’s estimated by serious economists that that number is about $160 billion collectively owed each year that doesn’t get paid.  It’s not an even playing field.  My plan would help solve that.  For example, it would give the IRS the resources it needs to keep up with the lawyers and accountants in the super — of the super-wealthy.
It would ask just for two pieces of information from the banks of these folks: that amounts — the amounts that come into their bank accounts and what amounts go out of their bank accounts, so that the wealthy can no longer hide what they’re making and they can finally begin to pay their fair share of what they owe.
That isn’t about raising their taxes.  It’s about the super-wealthy finally beginning to pay what they owe — what the existing tax code calls for — just like hardworking Americans do all over this country every Tax Day.
Look — and like I said just a few minutes ago, 55 of the most profitable corporations in America paid zero in federal income taxes on what amounted to $40 billion in profit.  Not a penny.  That’s not right.  And my economic plan will change that.  Not punish anybody, just make them pay their fair share.
But my Republican friends in Congress don’t want to change the law.  So, what are they doing?  They’re attacking me and my plan — which is fine.  But if we’re going to have a debate, let’s have an honest debate. 
My Republican friends are attacking my plan, saying it’s “big spending.”  Let me remind you, these are the same folks who just four years ago passed the Trump tax cut totaling almost $2 trillion in tax cuts –- a giant giveaway to the largest corporations and the top 1 percent.  And listen to this: Almost none of that $2 trillion tax cut was paid for.  It just ballooned the federal deficit.
In fact, the unpa- — unpaid bills ranked up — racked up by the last administration are projected to increase the national debt by more than $8 trillion over time.
What I’m proposing is totally different from that approach for three reasons: 
First, my plan is paid for.  It’s fiscally responsible, because our investments are paid for that by making sure that corporations and the wealthy Americans pay their fair share.
Second, we’re not going to raise taxes on anyone making under $400,000.  That’s a lot of money.  Some of my liberal friends are saying it should be lower than that.  But only corporations and people making over $400,000 a year are going to pay any additional tax.
And third, not only will no one making under $400,000 see their taxes go up, the middle class are going to going to get some tax cuts — some breaks.
My plan benefits ordinary Americans, not those at the top who don’t need the help.  It’s a historic middle-class tax cut, cutting taxes for over 50 million families.
My Republican friends are making a different choice though.  They’d rather protect the tax breaks of those at the very top than give tax breaks to working families.  It’s that simple.
But let me ask you this: Where is it written that all the tax breaks in the American tax code go to corporations and the very top?  I think it’s enough.  I’m tired of it.
For me, it’s pretty simple: It’s about time working people got the tax breaks in this country.  That’s what my plan does.
But here’s what it also does: By asking big corporations and the very wealthy to pay their fair share, it makes it possible to invest in America, to invest in the American people.
According to leading economists — forecasters like Moody’s and major international financial institutions — my plan will create — make us — create jobs, make us more competitive, and grow our economy and lessen — lessen, not increase — inflationary pressure.
I don’t know if it’s been handed out today, but, by the way, 15 Nobel laureates in economics released a letter yesterday arguing that exame [sic] — that exact same point.
They said, and I quote — and this is from 15 Nobel laureates in economics — quote, “Because this agenda…” — the one I’m talking about, mine — “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease long-term inflationary pressures.”  It will ease it.
Let me highlight just a few provisions of my plan.  I know this is long, and I apologize, but it’s important, I think. 
My plan lowers the cost of daycare and childcare and eldercare for families and [has] the added benefit of allowing millions of people, mostly women — who are not able to go back to work because of very young family members or elderly people they’re taking care of — allow them to go back to work.  It’s estimated in the millions that can’t go back.
It lowers healthcare premiums for millions of families.  It lowers prescription drug costs by giving Medicare the power to negotiate lower drug prices.  And it strengthens Medicare by adding dental, vision, and hearing coverage for — if you’re on Medicare.
It also extends the tax cut for families with kids that we passed in the American Rescue Plan in March.
All of this will mean thousands of dollars in savings for the average American family on some of the toughest and most important bills they have to pay every month.
My Republican friends talk a lot about inflation, but if you want to talk about actually lowering the cost of living for people in this country, my plan does just that.
By strengthening the capacity of our economy, it will also reduce inflationary pressures over the long run.
Here’s something else my plan does: It confronts the crisis of extreme weather events that we’re seeing all around us and around the world — but just here in America.  We see it everywhere.  We know it’s real.
In just the past few weeks — and there’s more to come — I’ve seen the destruction of hurricanes in Louisiana, where winds got up to a hundred- — gusts of 179 miles an hour; the deadly toll from flooding in New York, where 20 inches of rain, and New Jersey, more than 11 inches of rain in some areas.
More than 5 million acres of our lands and communities have burned to the ground in wildfires just this year alone.  That’s more than the size of the entire state of New Jersey burned to the ground.  When I was out in California, I flew over some of these areas. 
In addition, there’s a severe drought in the West and the Midwest.
There’s a blinking code red out there for the nation.  We can’t wait to act.
Extreme weather, just last year, cost the American public $99 billion in damage — $99 billion in damage last year.  And unfortunately, we’re likely to break that record this year.
And the evidence is overwhelming that every dollar we invest in resilience saves six dollars down the road — when the next fire doesn’t spread as widely or the power station holds up against the storm. 
We need to rebuild with resilience — with resilience in mind — so roads are built higher; levees are built more — made more strong — stronger; transmission lines are better protected, and so much more.
You know, I hope we’re past debating climate change in this country.  Now we have to act, and we have to act fast.  And my plan does that.
Let me end with this.  This pandemic has been God-awful
for so many reasons: the lost lives — as I said, over 660,000; the jobs, the businesses lost; the lost time in school for our kids.
But it does present us with an opportunity: We can build an economy that gives working people a fair shot this time.  We can restore some sanity and fairness to our tax code.  We can make the investments that we know are long overdue in this nation.
That’s exactly what my bipartisan infrastructure plan does — I should say, our bipartisan infrastructure plan does: investments in roads, bridges, highways; clean water in every home and every school; universal broadband; quality and affordable places for families to live.
And we can invest in our people — giving our families a little help with their toughest expenses, like daycare, childcare, eldercare, prescription drugs, healthcare, preparing our young people to compete against any country in the world with preschool and community college.
We can confront this crisis of extreme weather and climate change, and not only protect our communities but create new opportunities, new industries, and new jobs.
In short, this is an opportunity to be the nation we know we can be — a nation where all of us — all of us, not just those at the top — are getting a share of the benefits of a growing economy in the years ahead.
Let’s not squander this moment trying to preserve an economy that hasn’t worked too well for Americans for a long time. 
Let’s not look backward, just trying to rebuild what we had.  Let’s look forward, together, as one America — not to build back, but to build back better.
Thank you all very much.  And God bless you all.  May God protect our troops.  Thank you.
2:22 P.M. EDT

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India's Record Run in Stocks Is Raising Risks for Economy – BNN



(Bloomberg) — A pick-up in consumer demand, record-low interest rates and improving prospects for the manufacturing sector will probably fuel the rally in Indian stocks, even as the dizzying pace of gains increases risks for the economy. 

These are the conclusions of new research from Bloomberg Intelligence and Bloomberg Economics after the NSE Nifty 50 Index climbed 130% to a record from lows touched in March 2020, supported by the central bank’s liquidity injections, millions of new retail investors, and the regulatory crackdown in China. The rally has added roughly 1 percentage point to GDP growth each quarter since October-December.

“The case for India’s equities remains structurally positive, we believe, amid resurgent consumer demand, manufacturing in a ‘China Plus One’ world, regulatory overhaul and the trajectory of monetary and fiscal policy,” Gaurav Patankar and Nitin Chanduka, analysts with Bloomberg Intelligence, wrote in a note. 

However, the sharp run-up in gains has increased the economy’s vulnerability to a market setback. The Nifty is now trading at 22.2 times estimated 12-month earnings, well above its five-year average of 18.5. By comparison, the MSCI Emerging Markets Index is trading at a multiple of 12.7. 

A retreat for the Nifty, trading at about 35% above its historical trend level, would reduce GDP by 1.4% in the same quarter of the shock and by 3.8% over the following year, Ankur Shukla, an economist with Bloomberg Economics, wrote in a separate note. 

“The higher stocks climb, the greater the risks to the economy if they correct — an important consideration at a time when the Federal Reserve is weighing the timing of tapering stimulus,” Shukla said.

©2021 Bloomberg L.P.

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