“In fact, the administration tried hard to inject even more stimulus into an already over-heated, inflationary economy and only Manchin saved them from themselves,” Bezos Tweeted. “Inflation is a regressive tax that most hurts the least affluent. Misdirection doesn’t help the country.”
Bezos’ comments come in response to a thread in which President Biden claimed the US was on track for its largest yearly deficit decline ever, totalling $1.5 trillion.
Bezos called the President out over a tweet that said taxing wealthy companies has the potential to bring down inflation and urged the Disinformation Board to review the President’s tweet.
“Raising corp taxes is fine to discuss,” Bezos said on Friday. “Taming inflation is critical to discuss. Mushing them together is just misdirection.”
The fall marks its lowest point in two weeks as the demand outlook was pressured by increasing recession risks and Covid-19 lockdowns in China. Additionally, a strong US dollar made crude oil more costly for buyers purchasing in other currencies.
US West Texas Intermediate crude oil was down 3.2% to $99.76 a barrel, while Brent crude dropped 3.28% to $102.46 a barrel.
Also on Tuesday, French President Emmanuel Macron and Hungarian Prime Minister Viktor Orban discussed energy security amid EU efforts to persuade Hungary to agree to proposed sanctions on oil imports from Russia.
"These are volatile times, the daily price bars are outsized these days," commented John Kilduff, a partner at Again Capital LLC. "As the EU continues to dither over whether or not they are going to embargo Russian oil, that changes the calculus very much as well in both directions.”
On March 28, the bank disclosed that it had exceeded a US limit on sales of structured products. This triggered a loss and a potential restatement of Barclays’ 2021 accounts.
Barclays’ new CEO, C.S. Venkatakrishnan, has reportedly said that the bank found no evidence to date of deliberate misconduct relating to the blunder and that Barclays was cooperating with all relevant regulators.
On Thursday, the bank said it planned to begin the $1.25 billion buyback “as soon as practicable” after resolving the situation with the US authorities.
“Barclays believes that it is prudent to delay the commencement of the buyback programme until those discussions [with the SEC] have been concluded,” Barclays said.
“Barclays remains committed to the share buyback programme and the intention would be to launch it as soon as practicable following resolution of filing requirements being reached with the SEC and the appropriate 20-F filings having been made.”
Powell’s statements meet market expectations that the Federal Reserve will move away from its usual 25 basis point hikes and instead work quickly to tame inflation that is at its highest rate in over four decades.
In its March meeting, the Federal Reserve approved a 25 basis point move, though, in recent days, officials have stated that faster action is necessary, with consumer inflation running at an annual pace of 8.5%.
“Our goal is to use our tools to get demand and supply back in synch, so that inflation moves down and does so without a slowdown that amounts to a recession,” Powell commented. “I don’t think you’ll hear anyone at the Fed say that that’s going to be straightforward or easy. It’s going to be very challenging. We’re going to do our best to accomplish that.”
“It’s absolutely essential to restore price stability [...] Economies don’t work without price stability.”
Recent data shows that most regions are lagging far behind the United States, mainly owing to the lack of governmental involvement in business practices. This caused the number of startups to decrease, causing the gap between other parts of the world and the United States to widen. As more and more businesses find the onerous constraints in other nations, many are opting for the United States, either for better alignment with venture capital or just to prosper under the more lax corporate standards. This article discusses the growing trend of foreign business creation in the United States, its reasons, and how you may get started if interested.
Why more businesses are choosing the US
In the last few decades, the number of companies interested in establishing their business in the US has increased considerably. There are a few key reasons behind this shift which are illustrated below.
The favourable economic environment
Foreign investors can buy assets in the United States, particularly real estate, at lower prices than they can in their own country. Furthermore, the United States has the largest consumer market globally, with over 320 million inhabitants, many of whom like shopping. There is a wide range of income and interest levels in the United States, so no matter what type of company you may have, it is safe to say the US market has a decent consumer base.
Flexible residency requirements
Most European countries require a residency permit in the country where you intend to establish your business. But in the US, owners are allowed to live and operate their businesses from anywhere in the country and do not require any special permit. Additionally, in the United States, all foreign or locally held companies are treated equally. This ensures a level playing field between competitors, and no one can seek unfair advantages.
Federal, state, and municipal governments all provide incentives
Many states in the US provide financial incentives to foreign investors who set up shop in a particular region. Some tax benefits are also available and have lately reduced commercial real estate taxes for foreign investors. Furthermore, the United States government provides a wide range of services to American enterprises, which you will be able to take advantage of when you establish your company in the United States.
How to form an LLC as a foreigner
Now that we have seen the advantages of expanding business in the United States let us discuss the process to expand a business as a foreigner.
Choose a business structure
C corporations, S corporations, and LLCs are the three structures available to companies when looking to extend their operations in the United States. While each has advantages and disadvantages, most organisations will benefit from LLCs since they offer various advantages, including no restrictions on where you live and some tax exemptions.
Choosing the right state
The next stage is for the business owner to decide where they want to set up their company. Delaware and Nevada are some of the most strongly recommended states for enterprises due to their business-friendly taxation rates, maintenance costs, and corporate regulations. But for many businesses, other states can be just as lucrative, especially if they can benefit from a large population or the many commercial hubs that are set up. Some popular states with large consumer markets include New York, California, Florida, and Texas.
Fill in the paperwork
Each state's LLC registration requirements differ slightly, but they all follow the same basic pattern. To summarise, companies must choose a distinctive name, select a registered agent and complete a certification of incorporation. After incorporation, the company must file a report and pay a franchise tax every year.
Get an EIN
For companies, an Employer Identification Number (EIN) is the equivalent of a social security number. It enables them to recruit staff and create bank accounts for their businesses. An EIN may be obtained for free straight from the IRS.
Bottomline
Due to the various advantages, small companies operating in different parts of the world increasingly choose to incorporate their business in the United States. This gives them access to a broader audience as well as international exposure to make it global.
While the LLC application procedure is free, it may be rather complicated and time-consuming for people who are not fluent in this field. For a small cost, several organisations offer an LLC creation service online, which will significantly lessen the stress and chance of a glitch when compared to the 'DIY' approach.
The New York-based bank said profits fell 42% from a year earlier to $8.28 billion, or $2.63 per share. Adjusted earnings of $2.76, which excludes the 13-cent impact of the Russia-Ukraine conflict, go above the $2.69 estimate of analysts surveyed by Refinitiv. Revenue, meanwhile, was down 5% to $31.59 billion, surpassing analyst predictions for the quarter.
The quarter illustrates how rapidly events in Europe have shifted the industry’s outlook. In 2021, JPMorgan Chief Executive Jamie Dimon said he expected a long-running economic expansion, with banks profiting from billions of dollars in loan loss reserves being released. Fast-forward a year, Dimon is warning of the possibility of a recession amid spiralling inflation and ongoing fighting in Ukraine.
“We remain optimistic on the economy, at least for the short term,” Dimon commented. “Consumer and business balance sheets as well as consumer spending remain at healthy levels – but see significant geopolitical and economic challenges ahead due to high inflation, supply chain issues and the war in Ukraine.”
S&P 500 futures were down 0.4%, while futures on the Dow Jones Industrial Average dropped 0.38%. Nasdaq 100 futures fell 0.29%.
These overnight moves were influenced by the release of March’s highly-anticipated consumer price index on Tuesday. It is expected that the data will reveal an 8.4% annual increase in prices, according to economists polled by Dow Jones. This is the highest level since December 1981, with rising housing, energy, and food costs thought to be the major factor behind the record-high figure.
Speaking to CNBC on Monday, Ed Yardeni, president of Yardeni Research said, “I think by the summer we’ll probably see the CPI inflation rate peaking and then the consumption deflator is going to peak somewhere between 6 and 7% and then come down to maybe 3 to 4% by the second half of the year going into next year.”
“There’s definitely a lot of financial anxiety,” commented Celeste Revelli, a director of financial planning at eMoney Advisor. “It’s difficult to know how long this inflationary moment will last.”
The analysis comes from the Office of Management and Budget (OMB), responsible for administering the federal budget. It also warned that the US government may need to spend an additional $25 billion to $128 billion per year in areas including flood insurance, coastal disaster relief, and crop insurance.
“The fiscal risk of climate change is immense,” Candace Vahlsing, the OMB’s associate director for climate and chief economist Danny Yagan, wrote in a White House blog post.
“The need for urgent action is why the President called on Congress in the State of the Union and through the Budget to advance legislation that decreases energy prices, combats climate change, and grows the clean economy.”
The White House’s warning was published on the same day as the United Nations’ climate report which warns that the fight against climate change must come “now or never”. It stated that limiting climate change to 1.5 degrees Celsius above pre-industrial levels will require greenhouse gas emissions to peak before 2025 and be reduced by 43% by 2030.
Member countries of the International Energy Agency (IEA) will meet on Friday to decide on a collective oil release, a spokesperson for New Zealand’s energy minister told Reuters via a Thursday email: "The amount of the potential collective release has not been decided [...] That meeting will set a total volume, and per country allocations will follow.”
It remains unclear as to whether the US’ potential draw would come as part of a wider global coordinated release. If Biden does choose to draw from the SPR, it would be the largest draw in the SPR’s almost 50-year history.
US President Biden is expected to deliver an update on his administration’s actions on Thursday, the White House has said.
Following the news, global oil prices plummeted more than $5 per barrel, having surged since Russia’s unprovoked invasion of Ukraine on 24 February.
September 15, 2008
Financial banks are on the brink of collapse, the stock market is in the first inning of what would be a freefall, and the forecast for the foreseeable future is blood in the streets. So with the global economy teetering on the edge of a swan dive into the abyss, the Federal Reserve stepped in with an innovative policy response that would arguably become the most well-known financial acronym in economic history, quantitative easing, or QE for short.
Glossing over a ton of details, with express apologies paid to the professional economists out there in the audience, QE had one, singular goal - to prevent the worldwide monetary system from freezing up. To accomplish this, the Fed simply oiled up the ol’ printing press, created new money out of nothing, and then injected copious amounts of liquidity (i.e. cash) with those newly created funds by buying debt instruments in the open market.
Not too dissimilar from snaking out your shower drain when it gets clogged, this meant that any jams in the system could quickly be cleared, and the banks and institutions on the other side of these transactions would receive a strong boost of capital that allowed them to continue their operations and strengthen their balance sheets. With this safety net in place, the thinking was these same banks would continue to have the capital to lend out in the form of mortgages, auto loans, business ventures, etc. - all the while the huge demand for debt by the Fed itself would act to keep a lid on interest rates (as bond prices and interest rates move inversely) thus keeping the demand for all this new money continually stoked.
Months and quarters went by, as the stock market roared back to life, and the economy healed itself. But quantitative easing didn’t stop, as QE1 became QE2 became QE3 became QE-infinity, and before you knew it, the market began to expect more accommodative policy from the Fed at every meeting and would sell off sharply at the mere hint of anything otherwise.
Good times were rolling again, but all that extra cash must have a downside, right? It must lead to the classic “too many dollars chasing too few goods” scenario sooner or later, which would only lead to a weaker USD, and a higher cost of goods in the US (i.e. inflation), right? Right?
Well, not exactly, as the low cost of money across the board actually led to an incredible surge of growth, productivity, and innovation, all of which allowed producers to keep production costs low, which in turn kept consumer costs low. So, much to the chagrin of many prognosticators making the same prognostication that inflation would explode before the ink was even dry on the Fed’s first bond purchase in the fall of 2008, this didn’t happen - at all. In fact, 2009, 2010, 2011…’12…’13…’14…’15…’16…’17…’18…’19…and most of ‘20 saw inflationary figures hover barely above zero.
Fast forward to the present: Why is inflation a worry?
Fast forward back to the present - what has recently changed in the worldwide economy such that inflation is now something that nearly every American has to worry about?
The breakdown of the supply chain.
The economy was clearly able to absorb years and years of QE, even long after it might have “needed it”, with little more than a hiccup higher in inflation or a modest blip lower in the value of the USD. But the global disruption that was, and very much still is, a worldwide pandemic appears to have been the straw that finally broke the camel’s back.
With large-scale production centres slowed down significantly, and cargo ships stalled out at sea in an effort to quell the spread of the virus, producers were unable to quickly, easily, and efficiently access the raw materials needed to produce their goods. And as a result, they were shut off from tapping into all the competitive advantages and high-leverage efficiencies they had developed over the previous years through technological advancements and overlapping synergies because there were now links missing from the supply chain. Gaps in the production cycle presented companies with huge obstacles to navigate.
Not to mention, with the supply chain breaking itself and a lower supply of the necessary goods, basic economics reminds us that a limited supply will always lead to a higher price, ceteris paribus, and thus producer prices begin to rise, paving the way for consumer prices to also rise. Specifically, the most recent reading of the Producer Price Index (PPI) and Consumer Price Index (CPI) have shown increases of 10% and 8%yoy, respectively - a multi-decade high for both.
A difficult market for both producers and consumers, without question, but that’s how we have arrived at the spot we are in.
What’s on the near-time horizon?
Unfortunately, until there is some resolution to the Russia-Ukraine war and global trade is restored to some degree, inflationary pressures will likely persist for some time. Case in point, fertiliser, a critical component of the farming process that obviously has a direct link to food and crops, has seen a 30% cost increase in just the last few months. According to the UN Food and Agriculture Organization, in 2021, Russia was one of the world’s leading exporters of nitrogen and phosphorus fertilisers - an ominous situation given the economic sanctions that have been placed on Russia as a result of its unprovoked invasion of Ukraine. So one would think it’s only a matter of time before these added costs get passed down to the consumer at the local grocery store, and inflation accelerates even faster.
But just as the slam dunk that was higher inflation from QE missed the mark for well over a decade, we can all hope that maybe the economy has other plans, and our forecasts are dead wrong - again.
About the author: Dr Jim Schultz, Phd is a Market Expert and On-Air Personality at tastytrade, the beloved live financial network that provides financial information, investment strategies and entertainment related to trading and the stock market.
Preparations for the IPO follow on from the collapse of Nvidia Corp’s deal to buy Arm from SoftBank for $40 billion after widespread objections from US and European antitrust regulators. SoftBank has announced it will likely list Arm on Nasdaq by March of next year.
Over the past few weeks, SoftBank has interviewed investment banks for Arm’s IPO, asking them to commit to providing a credit line as part of their commitments to the deal.
Last month, SoftBank founder Masayoshi Son promised investors that the company “will aim for the biggest IPO ever in semiconductor history,” when discussing Arm’s listing.
While it is likely that SoftBank will list Arm in the United States, the venue of the flotation is reportedly yet to be finalised.
In 2021, the average payout for New York securities workers was $257,500 as deal-making and trading activity by big banks hit record levels amid surging global stock markets.
New York State Comptroller Thomas DiNapoli called the higher than expected figures “welcome news.”
In 2021, Wall Street contributed approximately 18% of all the taxes collected in New York. This is expected to help New York City trump its projections for income tax revenue.
"We have an April 1 budget deadline for the state, and this is welcome news,” DiNapoli said. “It gives them a little bit more breathing room.”
Several factors are expected to impact Wall Street bonuses this year, including record-high inflation, ongoing post-pandemic recovery, and the economic fallout from Russia’s attack on Ukraine. Presently, New York City and state are estimating that incentive compensation packages for securities industry workers in 2022 will drop by an average of 16%.
