The wealth of the 1% just hit a record $44 trillion

 The total net worth of the top 1% is defined by the Fed as those who have wealth over $11 million. The wealth of the top 1% just hit a record $44 trillion after shooting up two trillion in the 4th quarter thanks to gains from stock holdings. 

This marked the latest addition to an unprecedented wealth boom that began in 2020 with the Covid-19 pandemic market surge. The wealth of the top 1% has increased by $15 trillion or 50% since 2020. The middle 50% to 90% of Americans saw their wealth increase by 50% over the same period. 

Currently the top 10% of Americans own 87% of all individually held stocks and mutual funds while the top 1% of Americans own half of all individually owned stocks. The top 10% accounted for 67% of all wealth at the end of the fourth quarter and the top 1% accounted for 30% of all the nation’s wealth at the end of the fourth quarter. 

This all comes in conjunction with a rising stock market that is in turn increasing consumer spending because inventors see holdings soar and feel more confident spending their money and taking on risk. Mark Zandi, Chief Economist of Moody’s Analytics says this points to the vulnerability of the economy if the stock market were to falter. It does also point to the fact that stock boosts typically and historically have helped the wealthy and not really middle or lower class as much. It has been proven that even though inequality dipped over the past two years, the wealth gap has since slightly crept back. 

https://apple.news/Achd0Zr4kRsaxya23oW03wg

Cooper Meek

Turkey opts for new tightening strategy after signaling a pause to hikes

 As it struggles with rising inflation, Turkey's central bank is choosing a fresh approach to monetary tightening despite earlier indicating that its cycle of rate hikes was complete. With effect from Friday, the bank sent lenders a directive telling them to place a portion of their mandated lira reserves into blocked accounts.

According to Reuters on Thursday, this has resulted in increased loan rates and smaller loan restrictions for certain banks. Some institutions have lowered their commercial loan limits to 100,000 lira, or $3,100.
Meanwhile, balance of payments data released this week shows that Turkey saw a decline in reserves in January for the first time since May 2023.

In February, the annual inflation rate of consumer prices in Turkey reached 67.07%. The impressive numbers have increased worries that Turkey's central bank, which had hinted last month that it was done with its agonizing eight-month cycle of rate hikes, could have to start tightening again.

Capital Economics stated that "pressures on Turkish policymakers are building ahead of the local elections on March 31st as capital inflows have slowed and FX reserves are falling again." "We don't think the central bank will raise interest rates next week, but we are increasingly certain that Q2 will see at least one more hike."

https://www.cnbc.com/2024/03/15/turkey-opts-for-new-tightening-strategy-after-signaling-pause-to-hikes.html

Here’s why the Fed doesn’t see a US recession in coming years

 The Federal Reserve’s policymaking committee of 19 officials released a new set of economic projections last week, showing that they now expect economic growth in 2024, 2025, and 2026 to be even stronger than they previously thought. “The economy is strong, the labor market is strong and inflation has come way down,” Fed Chair Jerome Powell said Wednesday. Fed officials estimate that growth in 2024 overall will hit 2.1%, then 2% in each of the following two years.

The job market also remains strong. Employers added 275,000 jobs in February and the unemployment rate increased from 3.7% to 3.9%.

https://www.cnn.com/2024/03/24/economy/stocks-week-ahead-fed-recession-coming-years/index.html

Google hit with $2.3 billion lawsuit by Axel Springer, other media groups

 32 media groups, including Axel Springer and Schibsted, filed a 2.1-billion-euro lawsuit against Alphabet's Google, alleging losses due to unfair practices in digital advertising. They claim Google's dominance led to a less competitive market, resulting in lower revenues for publishers and higher fees for ad tech services. Citing previous fines and charges from European authorities, they argue Google abused its dominant position. The lawsuit was filed in a Dutch court to streamline claims and capitalize on the country's reputation for handling antitrust damages in Europe. Other notable members of the group include Krone, DPG Media, Mediahuis, TV2 Danmark A/S, Sanoma, Agora, Prensa Iberica, and Ringier.

https://www.cnbc.com/2024/02/28/google-hit-with-2point3-billion-lawsuit-by-axel-springer-other-media-groups-.html 

Japan Ends Negative Interest Rate Era

The Bank of Japan,  or BoJ for short, has decided to raise interest rates for the first time in nearly 2 decades. Over the past 17 years, intertest rates sat at a rate which was below 0.1% in order to combat deflation within the nation's economy. Now, the nation's interest rate sits at "around zero to 0.1%". This is all in part with Japan's plan to battle deflation which has caused economic stagnation since the late 1990s. This adds to their list of unconventional methods used by the BoJ, similar to their quantitative easing method which was another method introduced by them. 

New Solar Field in Ohio

A new solar farm is in the works in Madison County, Ohio. Although Intel in Licking County has taken the spotlight in recent months boasting job creation, the solar farm is not receiving the same attention. Rather, there is a major opposition to the solar farm.

Firstly, Madison County residents are unhappy with the 6,050 acres of land, especially local agriculture-related, that the project will occupy. Although this investment would result in Ohio having one of the largest solar fields in the United States and a massive, sustainable energy source for Ohio, residents feel their county should not have to be the only one affected in attempts to make Ohio's energy supply greener. Rather, some have sought for counties around Ohio to adopt smaller solar fields and distribute the responsibility to all Ohioans for improved infrastructure. This project is expected to cost around $1 billion. Infrastructure is a sticky subject in the United States, especially when it comes to green energy as it is usually expensive to adopt. However, there are ways for rural communities to benefit from sustainable energy.

One notable part of this story is that much of the farmland set to be used in this solar field is owned by Midwest Farms which is believed to be owned by Bill Gates. So, could this be yet another business venture for Gates? 

https://www.dispatch.com/story/business/2024/03/21/ohio-solar-farm-on-land-partially-owned-by-bill-gates-wins-approval/73051549007/

DOJ sues Apple for being an Monopoly

 The DOJ has sued Apple, claiming that the tech giant has both monopolized the smartphone market, and has hiked costs for users and developers as a result. One way the DOJ says Apple behaves in Monopolistic behavior is by strictly limiting the types of apps allowed on the apple app store, forcing developers to conform to Apples standards. Another way the DOJ says Apple is a monopoly is by creating an ecosystem of products exclusively apple. The Apple watch, and lots of other Apple products, can only be paired with iPhone, which disincentivizes users to switch to another phone producer once they get the other Apple product. There are various other reasons the DOJ gives for Apple of being a monopoly, but all follow the general pattern of Apple products or services being exclusively run through Apple itself. Because of this, Apple is able limit competition and raise cost, increasing profit. Even assuming the DOJ claims are correct, I missed the part where Apple was a monopoly. I haven't had an iPhone since middle school, and its not because I haven't had a smartphone since. It may be true that Apple heavily restricts the kind of apps allowed on its store, but all this means is that Android phones are able to cater to those developers that Apple excludes. Where is the monopoly? Same with the example of the Apple Watch or Digital Wallet. I see Apple doing things to make staying with Apple highly convenient for the consumer, but I fail to see them being... a monopoly. It will be interesting to see where this lawsuit leads.

https://www.politico.com/news/2024/03/22/doj-apple-monopoly-antitrust-lawsuit-explained-00148492

Switzerland becomes first major economy to cut interest rates

 The Swiss National Bank lowered its interest rate to 1.5% from its previous value of 1.75%. This decision was made as the National Bank expects their inflation to remain below the target of 2%. This comes as a surprise to many economists who expected the Swiss inflation rate to remain at 1.75%. However, with inflation falling to 1.2% in February and forecasts indicating price stability in the coming years it is not shocking that they have started to relax their interest rates. 

Following this rate cut and with the projected inflation through 2026 having an average of 1.1%, economists now expect two more cuts to the interest rate by the end of this year. This will lead to the policy rate being taken all the way down to 1% in December of this year if these expectations are correct. 

The Swiss National Bank expects national as well as global economic growth to remain moderate throughout the year but mentions there is significant uncertainty in many global markets as well as political tensions that could cause large changes in their expectations. 

This makes Switzerland the first advanced economy to lower its interest rates following the high inflation that came after the pandemic. This decision comes quickly after both the United States and Norway elected to hold their rates, however, it is likely that many other countries will quickly follow suit with the United States Federal Reserve still expecting to make three rate cuts in 2024.

Source - https://www.cnbc.com/2024/03/21/switzerland-becomes-first-major-economy-to-cut-interest-rates-in-surprise-move.html

Crisis in Cuba

Cuba is going through it's worst economic crisis in 30 years. Since 2020, Cuba has struggled financially. COVID has caused many issues for the Cuban economy, including the lowering of wages, struggles with infrastructure, decreased spending on public services, power outages, and much more. Many of these struggles have been caused deliberately by the United States government post Cold War, as well as the Cuban government imposing currency and price reforms. A lack of spending and production has caused issues with all industries, most importantly the agricultural industry, which has left many people hungry. More recently Cuba has had to deal with food shortages and rationing, and people have even taken to the streets to protest. The Cuban government has blamed the United States for its sanctions and COVID for the severe inflation, but many economists blame Cuba's socialist economy. This financial turmoil could spell the end for communism in Cuba.

https://theconversation.com/economic-crisis-in-cuba-government-missteps-and-tightening-us-sanctions-are-to-blame-220985

Fed Said Interest Rates Will Be Reduced This Year, Just Not Now

The Federal Reserve announced that they are planning to maintain the current levels of interest rates (5.25%-5.5%), with plans to start reducing them coming later in the year. Fed officials anticipates at least three rate cuts for 2024 and based off December projections, are anticipating one less rate cut to occur in 2025. Despite previous expectations of multiple rate cuts in 2025, the Fed is currently anticipating fewer cuts. Inflation rose by 3.2% in February, driven by housing and gas prices. Fed Chair Jerome Powell emphasized the need to balance lowering rates in order to promote economic growth amid the risk of reigniting inflation. Powell also indicated that the current interest rate may be at its peak for the tightening cycle and has signaled readiness to adjust as needed based on the current economic conditions and inflation risks. 

Source: https://www.foxbusiness.com/personal-finance/federal-reserve-interest-rate-reduced-march

U.S. Employers Added 275,000 Jobs In February

           According to the Labor Department, U.S. employers added 275,000 jobs in February. Additionally, according to a survey of households, the unemployment rate rose to 3.9 percent at a two year high. This increase was due to people losing or leaving jobs as well as those who entered the labor force in search for work. Furthermore, the amount of people working part-time over full-time has been increasing steadily and is now at 7.3 percent. For people aged 25 to 54, the labor force participation rate increased to 83.5 percent which has been the highest since the early 2000s. The labor force participation rate for those over age 55 has remained less than the level before the pandemic as stock markets have allowed more people to retire. 

    While there was a slight decrease in wage growth in February, average hourly earnings increased by 4.3 percent over the year. This has had a positive impact on individuals and has encouraged them to re-enter the labor market. In recent months, there has been a good amount of strong economic indicators, causing analysts to revise their GDP forecasts upwards and lower their expectations for unemployment trajectories. Though there was initially concerns about inflation, now that the inflation rates have eased, the Federal Reserve has planned to cut interest rates this year. While some industries have a strong demand for skilled workers, others are facing quite a bit of layoffs and uncertainties, specifically in technology and media. The labor market has a very uncertain future and while economists are optimistic, they also acknowledge the fact that unforeseen challenges may arrive. 

Link: https://www.nytimes.com/2024/03/08/business/economy/jobs-report-february-2024.html

German economy unlikely to resume growth in 2024

The central bank forecasts a recession and no growth until the end of 2024, indicating serious challenges for the German economy. A number of factors have been linked to the downturn, including declining international orders, rising financing costs, uncertainty surrounding climate legislation, and a decline in both domestic and foreign demand, which has a particular impact on the production of cars. Higher energy prices and corporate distress are the results of the situation being made worse by the energy crisis that followed the war in Ukraine. Concerns over the struggling economy and real estate problems are reflected in investors' demands for higher interest rates from German companies. China's competition in the automotive industry is making Germany less of an industrial powerhouse. Concerns about growing poverty arise from German Finance Minister Christian Lindner's acknowledgement of the nation's difficulty in producing growth. Companies are taking out fewer loans for investment, which suggests that long-term economic growth is being stunted as they concentrate on solving short-term problems.

https://english.almayadeen.net/news/Economy/german-economy-unlikely-to-resume-growth-in-2024

The Caitlin Clark Effect On Business Is More Than March Madness

    Caitlyn Clark is the most prolific college girls' basketball player ever. The impact she has had on women's basketball is similar to that of Steph Curry, but she has impacted much more than just how the game is played for women. Economically, two states, with little in common, have tremendously benefited from the Caitlin Clark effect – Iowa and Indiana. In Iowa, Clark's home state, she has generated a tremendous amount of money, as it says in the article, "Most of Clark’s career monetary impact results from increased attendance at Iowa women’s basketball home games, which CSI projected to have added between $14.4 million and $52.3 million to the state economy." The article also goes on to say that attendance at home conference games in 2023-24 was about 2.8 times greater than the year before Clark arrived in Iowa City. In addition, this season nearly 15 percent of fans traveled from out of state, an increase of about five percentage points from the pre-Clark era. But it doesn't end in the regular season, with March Madness upon us, you know Clark's effect is still in full swing, ticket prices for Iowa women's tournament games are more than 50% more expensive than the average men’s tournament ticket price, at $390 and $192.

    Clark declared for the WNBA draft this year, Indiana obtained the first overall pick, and the Indiana Fevers ticket prices have jumped up 133% from last year’s $60 average to $140. The Fevers home opener ticket price has also skyrocketed to over $400 before Clark has even stepped on a professional court. One draft declaration has allowed the franchise to make an economic rebound, in addition to a supply chain surge, serving as a double bonus. 

link: The Caitlin Clark Effect On Business Is More Than March Madness (forbes.com)