5 June 2019

1) The tech giants Apple, Google, Facebook and Amazon are facing antitrust troubles. The government is stepping up scrutiny of these big four with possible new rules, regulations and law suits. The investigative efforts will be split between the Justice Department and Federal Trade Commission driven by mounting criticism over political bias, disinformation and privacy breaches. This could spell years of troubles and law suits and possible breakup of the companies.

2) The threat of tariffs on Mexican imports has American oil refiners worried, since Mexico is the number two source of foreign oil to the United States. American produced oil is a light oil which is a poor match for Gulf Coast refining facilities, while the Mexican oil is a heavy oil that when blended with the America optimizes the refinery’s output.

3) The Medicaid system is still suffering from the Great recession, so there are fears than another recession could be devastating for the system. This is at a time when state spending on Medicaid is still high with no signs of subsiding. In a recession, payrolls decrease from people unemployed or underemployed, so contributions are down. This means less buildup of reserve funds needed for the future, and a second recession so soon, could seriously deplete those reserves quicker, leaving the future of the system in doubt.

4) Stock market closings for 4 June 2019: Jump in Dow comes from Fed signals flexibility on rates.

Dow               25,332.18    up    512.40
Nasdaq             7,527.12    up    194.10
S&P 500            2,803.27    up      58.82

10 Year Yield:    up   at    2.12%

Oil:    down   at    $52.95

PREZ of RICHMOND FED RESERVE BANK RESIGNS AFTER SCANDAL EMERGENCE……………..

By: Economic & Finance Report

 Former Fed President of Richmond’s Federal Reserve Bank, Jeffrey Lacker has resigned today; effective immediately. Richmond’s Federal Reserve Bank  had issued a statement about the resignation of Lacker.  The head of Richmond’s Federal Reserve, Mr. Jeffrey Lacker had improper discussions with a financial analyst from Medley Global Advisors, on “confidential information” relating to Federal Reserve’s interest rate policy.

There was an ongoing investigation that the Federal Reserve Inspector General, Mark Bialek just concluded. No charges will be brought on Mr. Lacker, but he has lost his job as Richmond’s Federal Reserve point man.  Mr. Bialek’s investigation started in 2012, when information of  private Federal Reserve information had leaked.

Many members of the US Congress have been critical on the prudence of the  US Federal Reserve, and this episode certainly adds fuel to the fire, members in Congress have stated on numerous occasions that there is a lack of transparency; within the Federal Reserve’s fiscal policies and initiatives. -SB

CHINA HAS CRACKED DOWN ON UNDERGROUND BANKING NETWORK… WORTH $65 BILLION DOLLARS

china renminbini yuan currency

By: Economic & Finance Report

China has stopped and cracked down on a $65 billion dollar banking ring. Some $65 billion dollars in foreign currency had been shifted within and outside the country, along illegal transactions and wiring.

It is indicated that over 370 people have been arrested; who may have been involved with the international plot. Chinese authorities have been monitoring the network for over a year, and this past April 2015 took aggressive action to monitor and heavily investigate the underground banking network.

The Chinese government is trying to stabilize the yuan currency while monitoring and mobilizing currency that outflows and inflows inside the second biggest economy. -SB