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- Republican attempts to invalidate state-ordered congressional districting schemes in North Carolina and Pennsylvania were rejected by the Supreme Court. For this year’s elections, justices are permitting maps chosen by each state’s Supreme Court to be used. Those maps are more Democratic-friendly than those drawn by state legislatures.
- The Israeli military says it has demolished the homes of two Palestinians accused of killing a Jewish seminary student and wounded others in a fatal shooting attack in the occupied West Bank last year.
- For betting on games, Atlanta Falcons wide receiver Calvin Ridley has been suspended for at least the upcoming NFL season. He placed bets last season after declaring his departure from the team to focus on his mental health, according to an NFL inquiry.
The US economy is still recovering from the COVID-19-induced slump. Although a healthy job market is helping it catch up, analysts are also predicting an oncoming recession. Experts warn that it might happen this year, according to Economic Reporter Paul Davidson.
It’s unlikely that a recession will occur. Really, economists are looking out a year or a little over a year, and late 2022 is probably within that area. The odds aren’t in your favor, but aren’t these all differences in odds? I instance, a few of economists told me that the chances of ad recession were 15%, and now one says it’s 30%, and another says it’s 25%. However, any time the odds improve, it’s worth noting. It’s possible that there will be, especially if sanctions against Russia’s oil exports are imposed and oil and gas prices skyrocket. Energy prices, after all, are a major consideration. When consumers have to pay that much out of pocket for gas and have to fill up every couple of weeks, they cut back on other purchases. As a result, inflation rises, prompting the Federal Reserve to boost interest rates even higher, posing new problems.
Joe LaVorgna, an economist, observed that, since 1970, whenever oil prices increased by 90% in a year, we were either in or about to enter a recession. So it’s back to what I was saying earlier, that it’s just a burden on the consumer. 70% of the economy is made up of consumer expenditure. So, if consumers spend more of their income on petrol and less on other items, you’re affecting 70% of the economy. That is one way, or channel, by which a recession might occur. The Fed, on the other hand, must react to inflation. And if the Fed has to raise interest rates too quickly, it can lead to inflation, as the home you buy, your credit card payments, and your auto loan all become more costly, which isn’t good for the stock market. As a result, Fed rate hikes by themselves can trigger a recession.
Arguments over whether Russia is committed war crimes in its ongoing invasion of Ukraine were heard before The Hague yesterday. Officials petitioned the International Court of Justice to halt the invasion. Russia declined to attend the session, while Anton Korynevych, the Ukrainian representative, urged action.
The fact that Russia’s chairs are empty is a powerful statement. They aren’t present in this courtroom. They are fighting an aggressive war against my country on a battlefield. Let us settle our conflict like civilized nations, is my appeal to Russia. Place your arms on the table and present your proof.
Russia’s tactics, according to Jonathan Gimblett, a member of Ukraine’s legal team, are reminiscent of medieval siege warfare. A truce in portions of Ukraine, including the city of Kyiv, is expected to begin this morning, according to Russia. However, Russia and Ukraine are debating which evacuation routes civilians will be allowed to utilize. A prior Russian plan indicated that routes should be taken through Russia or Belarus, a Russian ally. Instead, Ukraine has offered routes to the country’s western areas, where shelling is minimal compared to Eastern Ukraine. Cities in that region, such as Mariupol’s port, are running out of food and medicine. Around half of the city’s residents want to evacuate, but are waiting for safer evacuation routes. Cell phone networks are also down, in addition to supply problems.
Heavy Russian shelling continues to batter residential complexes in Kharkiv, Ukraine’s second largest city. Russian soldiers have mostly been unable to infiltrate Kyiv’s capital, while much of Russia’s attention has remained on smaller, easier-to-capture cities. Hundreds of checkpoints have been established to protect Kyiv by military and volunteers. Some are two stories high and made of thick concrete and sandbags, while others are more chaotic, with stacks of books holding down tires.
Despite the lack of evacuation routes, Ukrainians continue to flee the country in droves. A total of 1.7 million people are thought to have left, with the vast majority (more than a million) settling in Poland. Some hotels are putting people up in Romania, where approximately 100,000 Ukrainian refugees have landed. Nellya Nahorna, an 85-year-old grandmother at a hotel in Suceava, Romania, described the scenario like way. She had previously evacuated after fleeing the Nazi German invasion of Ukraine in 1941.
“This conflict is unique in that we had adversaries, the fascists. The Russians, on the other hand, were brothers here.”
The national average price of petrol has surpassed $4 per gallon, as we’ve been discussing on 5 Things. It’s the first time this has happened in almost a decade, with gas prices skyrocketing in the aftermath of Russia’s invasion of Ukraine. Is there, however, any hope in sight? Jordan Mendoza, a reporter, provides additional context.
The national average is currently $4.06, which is a significant increase from a week ago. It was $3.61 last week, according to AAA, and it’s now $4.06. In addition, the national average cost a typical gallon of gas is $4.11, which was set in 2008. And it appears to indicate that the record will be broken very soon, most likely this week. It could happen as soon as Tuesday, but it’ll most likely happen this week.
California has long been considered as the most costly state for gas; right now, the average cost of a gallon of gas in California is $5.34. The prices in California and Southern California are insane, but it’s the same story all over the state. And we noticed that the states around us were going through the same thing. They aren’t as pricey as California, but Nevada, Oregon, Washington, Hawaii, and Alaska are all experiencing the same problems.
I understand that a lot of it has to do with what’s going on in Ukraine right now, as well as Russia’s impact on oil prices, but it’s going to continue. People can report what prices are at the pump using the mobile app GasBuddy, which allows them to check how much gas is like where they are. They’re predicting that this will take a long time to resolve. They predict that the average cost of gas in the United States will be $4.25 in May. That’s 14 cents more than the previous high. As a result, it’ll most likely continue to rise for some time. Because gas prices normally rise in the summer, they’re speculating. Not only that, but a lot of COVID limits are being lifted as well. As a result, people desire to… They are able to go out more frequently. As a result of all of these factors, gas prices are likely to rise for the foreseeable future. According to GasBuddy, the average price of a gallon of gas will be over $4 until November. As a result, 2017 will be one of the most expensive gas years in US history.
Today, Apple will have an online event to announce some new items. One of them is an improved version of the iPhone SE, Apple’s more affordable smartphone. Brett Molina, the tech editor, has more.
A new generation of Apple’s budget-friendly smartphone, the iPhone SE, is one of the big reports we’ve seen as far as what Apple is likely to announce at this event. According to Bloomberg, Apple is expected to unveil not only a new SE, but also an improved iPad Air. During this event, we may also see a new Mac model. So, obviously, there’s a lot of interesting stuff that can come here. The last time we heard from Apple was in the fall, when the iPhone 13 was released. And, of course, that was a huge hit. Apple reported iPhone sales of 71.6 billion on their most recent quarterly call, which comes as no surprise, but the iPhone makes a lot of money for Apple.
However, for a few of reasons, the iPhone SE on a budget will be something to keep an eye on. First and foremost, we are seeing a greater number of cheap phones on the market, as I recently discussed, where you don’t have to pay a lot of money to have a smartphone that is really nice, extremely useful, and really functional. Of course, the iPhone SE is currently available; they have a replica of this. It’s also a good phone. I believe it costs between $450 and $500. You get a lot of the benefits of being part of the Apple ecosystem. Obviously, there are certain flaws in the hardware itself. On the back, there is simply one camera. It still works rapidly, but not as swiftly as before. As I previously stated, the camera isn’t as excellent as newer versions, and the battery life isn’t likely to be as good either. But, then again, it’s a good way to come into the Apple ecosystem, and it’s a good phone.
What will happen with the display is one of the things I’ll be looking at. Are we going to stick with the reduced display size, or will they upgrade it to match the rest of their models? One of the iPhone SE’s distinguishing features has been its reduced screen size. Are they going to keep it up? How much of a difference will we see in the cameras? What kind of camera will we get this time, and what kind of processing will we use? Those are the two things that pique my curiosity.
Of course, all of these stories indicate that this will be a 5G phone. It’s also intriguing since it’s a pretty simple method to get into 5G. Of course, there will be other phones around this price point, but getting an iPhone with 5G at what is projected to be an affordable price might be a very excellent alternative for a lot of people.
Is the UK facing a recession in 2022?
Households in the United Kingdom are under increasing strain. The cost of living dilemma looms huge, and low interest rates imply our money’s worth is rapidly depreciating.
Many people are still feeling the effects of the 2020 Covid recession, although the British economy has shown a remarkable “V-shaped” rebound so far. Experts believe that in 2022, the country will outperform every other G7 country for the second year in a row.
However, because of the ongoing Covid uncertainty, long-term growth is not guaranteed. In 2021, the UK economy increased by 7.5 percent overall, with a 0.2 percent decrease in December.
A weaker economy usually means lower incomes and more layoffs, thus a recession may be disastrous to people’s everyday finances. Telegraph Money explains what a recession is and how to safeguard your finances from its consequences.
Is the UK facing a recession?
According to the National Institute of Economic and Social Research, Britain will enter a recession in the second half of the year if energy costs remain unchanged.
What happens when there is a recession?
- A recession is a period of economic contraction during which businesses experience lower demand and lose money.
- Companies begin laying off people in order to decrease costs and halt losses, resulting in rising unemployment rates.
- Re-employing individuals in new positions is a time-consuming and flexible process that faces certain specific problems due to the nature of labor markets and recessionary situations.
In a recession, do housing prices drop?
In a bad economy, how much do property prices in the UK decline, or crash? We looked at 50 years of data from 1970 to 2020. In the worst-case scenario, housing prices may plummet by 20% in real terms during a recession.
What triggered the UK recession in 2008?
In September 2008, Lehman Brothers, one of the world’s largest financial organizations, went bankrupt in a matter of weeks; the value of Britain’s largest corporations was wiped out in a single day; and cash ATMs were rumored to be running out.
When did it begin?
Lehman Brothers declared bankruptcy on September 15, 2008. This is widely regarded as the official start of the economic crisis. There would be no bailout, according to then-President George W. Bush. “Lehman Brothers, one of the world’s oldest, wealthiest, and most powerful investment banks, was not too big to fail,” the Telegraph reports.
What caused the 2008 financial crash?
The financial crisis of 2008 has deep roots, but it wasn’t until September 2008 that the full extent of its consequences became clear to the rest of the globe.
According to Scott Newton, emeritus professor of modern British and international history at the University of Cardiff, the immediate trigger was a combination of speculative activity in financial markets, with a particular focus on property transactions particularly in the United States and Western Europe and the availability of cheap credit.
“A massive amount of money was borrowed to fund what appeared to be a one-way bet on rising property values.” However, the boom was short-lived since, starting around 2005, the gap between income and debt began to expand. This was brought about by growing energy prices on worldwide markets, which resulted in a rise in global inflation.
“Borrowers were squeezed as a result of this trend, with many struggling to repay their mortgages. Property prices have now begun to decrease, causing the value of many banking institutions’ holdings to plummet. The banking sectors of the United States and the United Kingdom were on the verge of collapsing and had to be rescued by government action.”
“Excessive financial liberalisation, backed by a drop in regulation, from the late twentieth century was underpinned by trust in the efficiency of markets,” says Martin Daunton, emeritus professor of economic history at the University of Cambridge.
Where did the crisis start?
“The crash first hit the United States’ banking and financial system, with spillovers throughout Europe,” Daunton adds. “Another crisis emerged here, this time involving sovereign debt, as a result of the eurozone’s defective design, which allowed nations like Greece to borrow on similar conditions to Germany in the expectation that the eurozone would bail out the debtors.
“When the crisis struck, the European Central Bank declined to reschedule or mutualize debt, instead offering a bailout package – on the condition that the afflicted countries implement austerity policies.”
Was the 2008 financial crisis predicted?
Ann Pettifor, a UK-based author and economist, projected an Anglo-American debt-deflationary disaster in 2003 as editor of The Real World Economic Outlook. Following that, The Coming First World Debt Crisis (2006), which became a best-seller following the global financial crisis, was published.
“The crash caught economists and observers off guard since most of them were brought up to regard the free market order as the only workable economic model available,” Newton adds. The demise of the Soviet Union and China’s conversion to capitalism, as well as financial advancements, reinforced this conviction.”
Was the 2008 financial crisis unusual in being so sudden and so unexpected?
“There was a smug notion that crises were a thing of the past, and that there was a ‘great moderation’ – the idea that macroeconomic volatility had diminished over the previous 20 or so years,” says Daunton.
“Inflation and output fluctuation had decreased to half of what it had been in the 1980s, reducing economic uncertainty for individuals and businesses and stabilizing employment.
“In 2004, Ben Bernanke, a Federal Reserve governor who served as chairman from 2006 to 2014, believed that a variety of structural improvements had improved economies’ ability to absorb shocks, and that macroeconomic policy particularly monetary policy had improved inflation control significantly.
“Bernanke did not take into account the financial sector’s instability when congratulating himself on the Fed’s successful management of monetary policy (and nor were most of his fellow economists). Those who believe that an economy is intrinsically prone to shocks, on the other hand, could see the dangers.”
Newton also mentions the 2008 financial crisis “The property crash of the late 1980s and the currency crises of the late 1990s were both more abrupt than the two prior catastrophes of the post-1979 era. This is largely due to the central role that major capitalist governments’ banks play. These institutions lend significant sums of money to one another, as well as to governments, enterprises, and individuals.
“Given the advent of 24-hour and computerized trading, as well as continuous financial sector deregulation, a big financial crisis in capitalist centers as large as the United States and the United Kingdom was bound to spread quickly throughout global markets and banking systems. It was also unavoidable that monetary flows would suddenly stop flowing.”
How closely did the events of 2008 mirror previous economic crises, such as the Wall Street Crash of 1929?
According to Newton, there are certain parallels with 1929 “The most prominent of these are irresponsible speculation, credit reliance, and extremely unequal wealth distribution.
“The Wall Street Crash, on the other hand, spread more slowly over the world than its predecessor in 200708. Currency and banking crises erupted in Europe, Australia, and Latin America, but not until the 1930s or even later. Bank failures occurred in the United States in 193031, but the big banking crisis did not come until late 1932 and early 1933.”
Dr. Linda Yueh, an Oxford University and London Business School economist, adds, “Every crisis is unique, but this one resembled the Great Crash of 1929 in several ways. Both stocks in 1929 and housing in 2008 show the perils of having too much debt in asset markets.”
Daunton draws a distinction between the two crises, saying: “Overconfidence followed by collapse is a common pattern in crises, but the ones in 1929 and 2008 were marked by different fault lines and tensions. In the 1930s, the state was much smaller, which limited its ability to act, and international financial flows were negligible.
“There were also monetary policy discrepancies. Britain and America acquired monetary policy sovereignty by quitting the gold standard in 1931 and 1933. The Germans and the French, on the other hand, stuck to gold, which slowed their comeback.
“In 1929, the postwar settlement impeded international cooperation: Britain resented her debt to the US, while Germany despised having to pay war reparations. Meanwhile, primary producers have been impacted hard by the drop in food and raw material prices, as well as Europe’s move toward self-sufficiency.”
How did politicians and policymakers try to ‘solve’ the 2008 financial crisis?
According to Newton, policymakers initially responded well. “Governments did not employ public spending cuts to reduce debt, following the theories of John Maynard Keynes. Instead, there were small national reflations, which were intended to keep economic activity and employment going while also replenishing bank and corporate balance sheets.
“These packages were complemented by a significant increase in the IMF’s resources to help countries with severe deficits and offset pressures on them to cut back, which may lead to a trade downturn. These actions, taken together, averted a significant worldwide output and employment decline.
“Outside of the United States, these tactics had been largely abandoned in favor of ‘austerity,’ which entails drastic cuts in government spending. Austerity slowed national and international growth, particularly in the United Kingdom and the eurozone. It did not, however, cause a downturn, thanks in large part to China’s huge investment, which consumed 45 percent more cement between 2011 and 2013 than the United States had used in the whole twentieth century.”
Daunton goes on to say: “Quantitative easing was successful in preventing the crisis from being as severe as it was during the Great Depression. The World Trade Organization’s international institutions also played a role in averting a trade war. However, historians may point to frustrations that occurred as a result of the decision to bail out the banking sector, as well as the impact of austerity on the quality of life of residents.”
What were the consequences of the 2008 financial crisis?
In the short term, a massive bailout governments injecting billions into failing banks prevented the financial system from collapsing completely. The crash’s long-term consequences were enormous: lower wages, austerity, and severe political instability. We’re still dealing with the fallout ten years later.
Is there a distinction between a recession and a depression?
A recession is a natural part of the business cycle that occurs when the economy contracts for two consecutive quarters. A depression, on the other hand, is a prolonged decline in economic activity that lasts years rather than months.
What led to the UK’s recession in 1990?
High interest rates, declining home values, and an overvalued currency rate were the primary causes of the UK recession of 1991. Membership in the Exchange Rate Mechanism (1990-1992) was a crucial element in maintaining higher-than-desirable interest rates.
The recession occurred following the late 1980s economic boom, which saw significant economic growth and growing prices.
The Lawson Boom Background to Recession
The government permitted the economy to develop at a considerably faster rate than its long-run trend rate during the 1980s. This was because they believed a “supply side miracle” had occurred. They claimed that the government’s supply-side policies allowed the economy to grow faster than before.
During the 1980s, the government kept interest rates low and reduced income taxes, particularly for the wealthy. This aided in the growth of consumer expenditure. In addition, the housing market exploded in the 1980s. The quick rise in home values resulted in a surge in consumer affluence and spending. Consumer confidence has risen dramatically.
Unfortunately, the notion that the economy had undergone a supply-side miracle turned out to be overly optimistic; the majority of economic growth was driven by consumer borrowing and spending. A significant current account deficit and rising prices reflected this.
Inflation and a high current account deficit resulted from growth above the long-run trend rate.
Exchange Rate Mechanism 1990-92
In 1990, the government entered the Exchange Rate Mechanism in order to combat rising inflation. It was hoped that by joining, inflation would be brought under control.
However, as the UK joined the ERM, the economy slowed, and it became increasingly difficult to hold the Pound at its target exchange rate versus the DM.
- Use its foreign exchange reserves to purchase sterling (the UK lost between 3.5 and 21 billion in the ERM).
- Interest rates should be raised. Despite the fact that the economy was in recession, interest rates were 10% in September 1992. In order to maintain the value of the pound, the government boosted rates to 12 percent and even momentarily 15 percent.
- Investors, on the other hand, rightly predicted that these interest rates would not last. Mortgage payments became prohibitively expensive due to high interest rates, and many homeowners suffered a drop in disposable income, resulting in less expenditure.
Despite these efforts to stabilize the currency, speculators outnumbered the government, and the UK was compelled to exit the ERM and devalue. The UK government finally abandoned the ERM after Black Wednesday on September 16, 1992, and the Pound plummeted by 20%, illustrating how much it was overvalued.
High Interest Rates Major Cause of Recession
- Borrowing costs and mortgage interest payments both increased as a result of this. This resulted in lower consumer disposable income, which resulted in less spending and a drop in aggregate demand.
- As a result of many people being unable to afford their mortgage payments, housing prices fell. House prices fell much lower, thus reducing household wealth and AD.
- Many consumers who took out loans in the 1980s now face exorbitant interest rates.
As a result of the recession, the Bank of England’s MPC was eventually given responsibility over interest rate setting. An autonomous Bank of England, it was hoped, would be better at avoiding boom and bust economic cycles.
House prices in 1991 recession
The housing market was booming in the late 1980s, especially in London and the South East. High interest rates and a drop in confidence, on the other hand, prompted a large drop in house values. House prices were decreasing by 10% in 1990 as foreclosure rates increased.
This resulted in a negative wealth effect and a drop in consumer expenditure, further deflationary effects.
Will the British economy expand?
LONDON, UK Official numbers released Friday show that the British economy increased 7.5 percent in 2021, rebounding from an unprecedented 9.4 percent drop in 2020, when influenza restrictions hindered output.
The UK’s GDP (gross domestic product) is expected to have climbed by 1% in the final three months of the year on a quarterly basis. It follows a downwardly corrected 1% growth in the preceding quarter, according to the Office for National Statistics (ONS).
During a recession, what happens to your money at the bank?
Benda said the rapid outflow of withdrawals has subsided, but he expects them to resume once people receive their stimulus checks from the federal government. “If another spike happens, the system has a lot of spare capacity,” he said.
He did warn, though, that people’s stimulus money is probably safer in the bank: “Once that money leaves the bank… there’s no insurance on it.” He warned, “You could get robbed.” “Robbing a bank is far more difficult than robbing a person.”
The FDIC, which was established in 1933 after the Wall Street crisis of 1929 and the advent of the Great Depression saw thousands of banks fail, is a major cause for this. Since the FDIC’s inception, no depositor has ever lost a penny of the money it protects.
The bank is a safe place for your money, even if it fails
The 2008 financial crisis began in the financial sector and spread throughout the economy. This time, the crisis is originating in the broader economy, with businesses closing and millions of Americans losing their jobs, and then spreading to the banking sector.
The government is taking steps to ensure that banks have the funds they require right now, and banks are better capitalized this time around than they were the last time, which means they are better financially prepared to weather the storm. Banks are also encouraged to use the Federal Reserve’s “discount window” to obtain loans if they require them in order to continue lending to individuals and businesses. The Federal Reserve said last month that the largest financial institutions have $1.3 trillion in common equity and $2.9 trillion in high-quality liquid assets. This was essentially a reassurance that the banks are fine, that they have access to a large amount of cash if they need it, and that the central bank will assist them if things go much worse.
Even still, banks, like the rest of the economy, are suffering right now. However, if your bank fails, your money isn’t lost, as long as it’s insured by the FDIC.
“If your bank fails for whatever reason, the government takes it over” (banks do not go into bankruptcy). In an email, Aaron Klein, policy director at the Brookings Institution’s Center on Regulation and Markets, stated that “this is frequently done on a Friday night, and by Monday morning your local branch is operating again, often as if nothing happened from the depositor’s point of view.” “In most cases, the FDIC seeks to locate a new bank to buy the failed bank (or at least its accounts), and your money is automatically transferred to the new bank (just as if they had merged).” If not, the FDIC will continue to operate your old bank under a new name until they can find a new bank to take over your accounts.”
For example, in early April, the FDIC shuttered the First State Bank of Barboursville, a tiny bank in West Virginia. MVB Bank has taken over its deposits, and the bank’s branches will reopen as well. As a result, those who had previously banked with First State Bank have switched to MVB.