Posted August 25, 2022
By Matt Insley
China’s Worst Drought in Recorded History
The Biden administration pulled the trigger on its promised student loan relief, and the reaction has been… mixed.
“It would do nothing to actually make education more affordable, and if anything, this policy will drive up tuition costs while raising prices on a variety of other goods and services for ordinary Americans.”
Of course, it’s a convenient pre-election handout to a select few.
But how is this even legal? Don’t these types of spending decisions require approval from Congress?
In short, yes.
“Skeptics of the administration’s ability to act on its own, without new legislation, had once included President Joe Biden himself and House Speaker Nancy Pelosi,” the AP reported about this executive action.
Biden and Pelosi had good reason to be skeptical. The administration is leaning on COVID-19 relief legislation and a 2003 law providing aid to members of the armed forces as a backing for the move.
Opponents of the action are already weighing legal challenges.
How does student loan forgiveness sit with you, reader?
We want to know! Send a quick note to TheRundownFeedback@StPaulResearch.com to share your two cents.
Now, on to what’s “lifting the mood” of the market this morning…
Your Rundown for Thursday, August 25, 2022...
Market Mood Ring
“If it bleeds, it leads.”
That old adage too often still rings true for news coverage.
But when stocks are rising, financial journalists have to cook up some positive spin for their morning dispatch.
Why were futures rising ahead of trading today, even as pessimism grows that the Fed will signal hard times ahead?
Yes, Beijing did unveil a raft of policies to support the economy.
But was it really enough to lift the mood regarding China’s economy?
Maybe China’s campaign to shoo away foreign journalists has finally choked off the last trickle of objective reporting from the country.
The drought is wreaking havoc on the power supply to some of the most populous regions of China that rely on hydroelectric sources.
It will also stoke inflation on food items and disrupt supply chains that use river transportation.
Beyond that, it threatens China’s food security.
At a time when China is dealing with a host of huge risks.
Economic anxiety has reached such a boiling point that rumors are once again swirling that Chinese President Xi Jinping will face political challengers at the big Party Congress coming this fall.
As veteran China politics watcher Bill Bishop wrote:
“Pestilence, drought, fires, heat, economic troubles, so close to the 20th Party Congress, the stability maintenance system must be in overdrive.”
Don’t hold your breath for China’s stimulus policies to lift the market mood any more than Biden’s student debt will.
Market Rundown for Thursday, August 25, 2022
S&P 500 futures are up 0.25%
Oil is up slightly with WTI Crude (+0.2%) sitting at $95 a barrel.
Gold is also up about 0.22% at $1,755 an ounce.
And Bitcoin is up 1.13% at $21,610.
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