Tuesday , October 15 2019
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Daily Digest 10/14 – Finding Meaning in Quantitative Easing, Melting Ice Redraws the World Map

1 day ago

Economy

Beware of Funny Financials (Adam)
Companies can understate expenses. Many tech companies use non-GAAP accounting to strip out the cost of employee stock options, for instance, thereby showing higher earnings. WeWork sought to redefine traditional earnings before interest, tax, depreciation and amortization as something called “community-based EBITDA.” The new measure conveniently excluded normal operating expenses such as marketing, general and administrative expenses, development and design costs.

The Beginning of the End (westcoastjan)
Whether they will succeed is another question. But know that all this frantic action to manipulate the liquidity and rate equation is in response to one chart, the chart that says we are at the beginning of the end. First comes the yield curve

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Charles Hugh Smith: Will You Be Richer or Poorer?

2 days ago

Prolific and exceptionally perceptive author Charles Hugh Smith returns to discuss the insights in his just-launched book Will You Be Richer Or Poorer? Profit, Power & AI in a Traumatized World (the first chapter of which can be read for free here)
The current narrative that our standard of living is not only the best it has been in human history, but thanks to modern technology, is now improving at an accelerating rate.
Smith turns this belief on its head, pointing out the many and various ways — many of them “intangible” and not currently measured in dollars — the human condition is fast worsening. Health, purpose, social connection, civil liberties, access to natural resources, career mobility; these are but a few examples.
And technology is actually fast sending us down a darker path.

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Daily Digest 10/12 – The Unstoppable Allure of Private Assets, How Low Will U.S. Births Go?

3 days ago

Economy

Timing of Trump’s Syria decision raises questions (Sparky1)
CNN’s Jake Tapper examines President Donald Trump’s relationship with Turkey amid his decision to pull US troops from northern Syria.

Israelis see Trump’s Syria pullout as a betrayal that could help unravel the region (tmn)
Other than expressing support for the Kurds, Prime Minister Benjamin Netanyahu has said little publicly about Trump’s move, which came just as Israel was marking the anniversary of the 1973 Arab-Israeli war. But Israeli media have been dominated by critics from all parts of Israel’s fractious political spectrum worried that American dependability is cracking at a volatile moment in the region.

Marie Yovanovitch says Trump ousted her over ‘unfounded and false claims’ (tmn)
The chairs of the three

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Did Everything Just Change?

4 days ago

It’s hard to imagine a more euphoric end to the week for bulls.
Two weeks ago I issued a report titled Realistically, What’s Left To Power Asset Prices Higher? which claimed the bulls only hope was for a near-term resumption of QE (quantitative easing, aka “money printing”) or a China trade deal.
Well, this week they got both.
Jerome Powell announced Wednesday that the U.S. Federal Reserve will resume expanding its balance sheet to the tune of $60 billion per month. And just a few hours ago, the Trump administration announced it had reached a partial trade agreement with its Chinese counterparts.
And to put a cherry on top of things, word from across the Pond is that somehow a Brexit deal just might happen by the end of the month.
When I began typing this article earlier today, the

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Daily Digest 10/11 – Good News Friday: Turning Waste Into Energy, Unilever To Reduce Plastic Packaging Use By 2025

4 days ago

This is Good News Friday, where we find some good economic, energy, and environmental news and share it with PP readers. Please send any positive news to [email protected] with subject header “Good News Friday.” We will save and post weekly. Enjoy!
Economy

McConnell, Decried As ‘Moscow Mitch,’ Approves Election Security Money (Jen H.)
Majority Leader Mitch McConnell, R-Ky., agreed to add $250 million for election security after having held up earlier legislation.

The money will be used by the federal government and the states, he said, and in a way that McConnell argues is appropriate for the federal system and without unreasonable new mandates from Congress.

Scientists hope to digitally unravel scrolls charred by Vesuvius with light 10 billion times brighter than the sun (tmn)

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Daily Digest 10/10 – Turkey launches airstrikes on northern Syria, Californians Fume Over Power Outages

5 days ago

Economy

Turkey launches airstrikes on northern Syria after Trump pulls back U.S. troops (Thomas R.)
“This morning, Turkey, a NATO member, invaded Syria,” Mr. Trump said. “The United States does not endorse this attack and has made it clear to Turkey that this operation is a bad idea. There are no American soldiers in the area. From the first day I entered the political arena, I made it clear that I did not want to fight these endless, senseless wars — especially those that don’t benefit the United States. Turkey has committed to protecting civilians, protecting religious minorities, including Christians, and ensuring no humanitarian crisis takes place — and we will hold them to this commitment.”

Reports the US is considering a currency agreement with China as part of partial trade

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Daily Digest 10/9 – Biggest Stock Market Bubble In History Set To Crash, Want To Know What Climate Change Feels Like? Ask an Alaskan

6 days ago

Economy

Harry Dent: Biggest Stock Market Bubble In History Set To Crash (Herman J.)
Harry Dent joined Carlos & Lisa to discuss his latest book, Zero Hour. Watch now to find out when is an economic downturn going to happen & why it’s almost guaranteed in the short term…and what you can do to avoid the inevitable chaos from the artificial stimulus collapsing.

The father of the yield curve indicator says now is the time to prepare for a recession (Thomas R.)
“This is the time where you need to reflect upon your strategy. It’s actually easy to manage assets when the economy is booming. It’s much more difficult to manage into a turning point,” Harvey told Josh Brown, CEO and co-founder of Ritholtz Wealth Management and a CNBC “Fast Money” contributor, in an interview for “The Compound” on

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(BONUS) Off The Cuff: A Crisis Of National Identity

7 days ago

In this week’s Off The Cuff podcast, Chris and Charles Hugh Smith discuss:
Epstein as a case study
Having departed so far from our values, what is our national identity now?
Our political, judicial, media, education and financial systems are captive to special interests
Where do we go from here?
Sometimes, when the news is breaking fast & furious, content we create gets back-burnered for more time-sensitive material. And when we’re able, we bring it out to give it the sunlight it deserves.
This conversation between Chris and Charles Hugh Smith, recorded a month ago, is one of them. It’s a no-holes-barred exploration of today’s culture, which appears to be drifting far from the values that used to serve as the foundation for society. As Charles asks below, in a society where trust has been

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Daily Digest 10/8 – Recession Fears Rising, HSBC Plans To Axe 10,000 Jobs

7 days ago

Economy

Recession Fears Are Rising, With Surveys Showing Optimism At New Lows (Thomas R.)
Even most of the ultra-wealthy are preparing for a recession in 2020, according to a recent UBS survey. Over half of family offices expect a downturn in the next year, results showed, with 45% already shifting their portfolios to bonds and real estate, and 42% are increasing their cash reserves.

HSBC to cut up to 10,000 jobs in drive to slash costs: FT (Sparky1)
Quinn became interim CEO in August after the bank announced the surprise departure of John Flint, saying it needed a change at the top to address “a challenging global environment.”

Flint’s exit was a result of differences of opinion with chairman Mark Tucker over topics including approaches to cutting expenses, a person familiar with

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Daily Digest 10/7 – Trump Orders Cut to National Security Staff, The Fight To Save The Giant Sequoia

8 days ago

Economy

Amid Trade War, Farmers Lean on a New Crop: Hemp (TS)
In December 2018, the federal farm bill removed a ban that classified hemp as a controlled substance equivalent to heroin. The shift coincided with the sudden popularity of CBD, which some claim can soothe ailments from depression to menstrual cramps.

Trump Orders Cut to National Security Staff After Whistle-Blower (Sparky1)
The request to limit the size of the NSC staff was conveyed to senior agency officials by acting White House Chief of Staff Mick Mulvaney and O’Brien this week. The whistle-blower complaint, focused on Trump’s conduct in a July 25 phone call with Ukrainian President Volodymyr Zelenskiy, has been followed by damaging reports on the president’s private conversations with other world leaders.

Will US

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Daily Digest 10/5 – U.S. Trade Deficit Grows By Nearly $1B, Oil Discoveries Hit 70-Year Low

10 days ago

Economy

U.S. Jobs Outlook Is So Weak It Echoes Disaster-Hit Months (Adam)
The combination of forces has pushed down the median estimate for private payrolls to a gain of just 130,000 last month. That’s the weakest projection heading into a jobs report in seven years, outside of months affected by events such as major storms or the shutdown. Estimates for total nonfarm payrolls are higher, at 148,000, because of an expected boost from temporary census hiring.

Commerce Dept.: U.S. trade deficit has grown by nearly $1B (Sparky1)
The report said U.S. exports grew by $400 million in August, led by a substantial increase in industrial supplies and materials. That was offset, however, by a major decreases in export capital goods and civilian aircraft.

Imports grew by $1.2 billion and

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Reality Shock

11 days ago

Urgency is needed, as society’s alarm bells aren’t working
The most important charts of all
Recent learnings on resilience relocation
When a culture becomes desperate, it reacts desperately. No one wins.

If you have not yet read Part 1: Getting Real About Green Energy, available free to all readers, please click here to read it first.

I follow the markets ( or ““markets”” as I deridingly call them), very closely.  The reason I do is because most people are taking their cues from whether stocks have gone up or down.
The stock market is now the main tool of persuasion used by the government and its Wall Street proxy agents to signal that “all is well” to the population.
It’s been a long frustrating period of time.  For ten years now, going on eleven, the powers that be have used every

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Getting Real About Green Energy

11 days ago

I want to be optimistic about the future. I really do.
But there’s virtually no chance of the world transitioning gently to an alternative energy-powered future.
These Are The ‘Good Old Days’
I’m often asked where I stand on wind, solar and other alternative energy sources.
My answer is: I love them. But they’re incapable of enabling our society to smoothly slip over to powering itself by other means.
They’re not going to “save us”.
Some people are convinced otherwise. If we can just fight off the evil oil companies, get our act together, and install a national alternative energy system infrastructure, we’ll be just fine.  Meaning that we”ll be able to continue to live as we do today, but powered fully by clean renewable energy.
That’s just not going to happen. At least, not without a lot

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Daily Digest 10/4 – Good News Friday: Hazelnuts Improve Adults’ Micronutrient Levels, Solar Is Back

11 days ago

This is Good News Friday, where we find some good economic, energy, and environmental news and share it with PP readers. Please send any positive news to [email protected] with subject header “Good News Friday.” We will save and post weekly. Enjoy!
Economy

College-student voting rate doubled in 2018, analysis says (sv)
While older voters historically turned out at significantly higher rates, the new data could signal a change going into the 2020 presidential election, a year in which millennials and Generation Z are expected to make up 37% of the U.S. electorate.

Cancer cells stopped by compounds derived from hops (newsbuoy)
“But a potential problem with XN is that enzymes in the liver and the gut microbiota metabolize it into 8- prenylnaringenin, or 8-PN, the most potent

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Daily Digest 10/3 – Negative Interest Rates Inflating Real Estate Prices, More Buckets Of Icy Cold Energy Reality

12 days ago

Economy

Negative interest rates are inflating real estate prices. These cities are at risk of a bubble (Thomas R.)
The greatest risk of a real estate bubble currently exists in the southern German city of Munich, according to a new report by analysts at Swiss bank UBS. Amsterdam is not far behind, while Paris and Frankfurt — home to the European Central Bank — have moved into the “bubble risk zone,” which means that prices could fall abruptly after rising steadily for years.

U.S. manufacturing dives to 10-year low as trade tensions weigh (Thomas R.)
The survey from the Institute for Supply Management (ISM) on Tuesday came on the heels of data last week showing a cooling in consumer spending in August. The economy’s fading fortunes have been attributed to the Trump administration’s

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Marjory Wildcraft: Growing Your Own Groceries

13 days ago

We all intuitively know that it’s important to have access to locally grown food, especially if it’s grown organically.
It gives us calorie resilience in case our standard thousand-mile supply chains become disrupted. It’s more nutrient-rich and healthier for us. It tastes (much) better. Growing it increases our connection to nature. The list of additional benefits is long.
Marjory Wildcraft, founder of The Grow Network and author of Grow Your Own Groceries, explains how we can contribute to the local food production movement by using our own windowsills, planters and backyards as a food production system.
Even those with no prior experience can swiftly learn how to grow and raise a meaningful portion of their dietary calories:

It’s a very simple three-part system. To set your

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Daily Digest 10/2 – Student Loan Debt Soars, There Is Good Reason to Fear the Repo

13 days ago

Economy

Student loan debt soars, totaling $1.6 trillion in 2019 (Saxplayer00o1)
Video

Developed central banks expected to see biggest ‘synchronised easing’ since 2000 (Saxplayer00o1)
Slower global growth is pushing central banks to ease policy across the world

Australia central bank governor tells banks ‘don’t be scared to make loans’ (Saxplayer00o1)
One risk is that further cuts to interest rates would fuel a debt binge in property sector when the household debt-to-income ratio in Australia is already at a record peak of 190%.

Down is the only way: Emerging central banks deliver more rate cuts (Saxplayer00o1)
Interest rate moves by central banks across a group of 37 developing economies showed a net 11 cuts last month.
In August they delivered a net 14 cuts – the largest

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Daily Digest 10/1 – The Medical Deserts Of Rural America, Consumer Instant Gratification Can Prove Risky

14 days ago

Economy

China Flexes Muscles In Parade Marking 70 Years Of Communist Rule (Thomas R.)
“There is no force that can shape the foundation of this great nation and no force that can stop the Chinese people and the Chinese nation from getting ahead,” Xi Jinping, China’s top leader and party chairman, said in an opening speech. He framed the parade as a moment of triumph over the “humiliation” of foreign imperialism beginning with the Opium Wars of the mid-19th century.

Live Updates: Hong Kong Police Shoot Protester, 18, as Demonstrations Turn Violent (TS)
The protesters in Hong Kong hoped to upstage Beijing’s celebrations by holding their own unauthorized marches. Violence quickly broke out, as demonstrators in districts across the city engaged in some of the bloodiest and most sustained

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Off The Cuff: Economic Crosscurrents

15 days ago

In this week’s Off The Cuff podcast, Chris and Axel Merk discuss:
The latest developments in the repo market
Why the Fed should do less, not more
The concern of an overheating economy
The Saudi strike showed the world is much less safe than we all thought
Axel explains how the Fed is intervening to quell the recent troubles in the overnight repo market. And while that issue highlights weakness in one corner of the economy, he also sees a risk of the it overheating should a trade deal with China be reached by the end of the year.
This is why today’s environment is so maddening for those trying to make sense of it. There are so many crosscurrents working at odds right now, it’s very challenging to know which direction will win out, and for how long:
Click to listen to a sample of this Off

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Daily Digest 9/30 – U.S. Interest Rates ‘Going Negative,’ Email Spoofing Costing Businesses Billions

15 days ago

Economy

This upcoming event could turn the market into a ‘minefield,’ says Peter Boockvar (Thomas R.)
“While [Carnival executives] did cite a stronger dollar [and] higher oil prices” as reasons for the pain, “they also talked about softness in Europe and Asia,” Boockvar said. “We saw FedEx a couple weeks ago, and while some of FedEx’s issues are company-specific, I think it’s a great bellwether for its … supply chains around the world, and what they say about the macro environment I think is very important.”

Yemen’s Houthi rebels release Saudi attack video (Sparky1)
Saree said the offensive 72 hours earlier had defeated three “enemy military brigades”, leading to the capture of “thousands” of troops, including Saudi army officers and soldiers, and hundreds of armoured vehicles.

He

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Daily Digest 9/28 – The Personal Financial Crisis Explained, A Look at 90 Years of Auto Strikes

17 days ago

Economy

Income inequality in America is at its highest level in more than 50 years (Thomas R.)
“When you have a system where inequality is rising – and where some groups are perpetually overrepresented at the bottom of the income and wealth distribution, even when they follow the standard prescription for realizing the American Dream – it’s a recipe for a politically and socially divided nation,” said Cornell sociology professor Kim Weeden, director of the school’s Center for the Study of Inequality.

Voter support for universal basic income grows: poll (thc0655)
During his opening remarks at the third Democratic debate, Yang debuted a pilot program for his universal basic income plan, calling on Americans to enter a giveaway to become one of 10 families to receive $1,000 a month for

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Resuming The Crash Position

18 days ago

My recent portfolio changes & the rationale behind each
6 strategies for positioning your portfolio for the next market downturn
Deciding which strategies are most appropriate for you
If you have not yet read Part 1: Realistically, What’s Left To Power Asset Prices Higher?, available free to all readers, please click here to read it first.
This is an update to the premium report Assume The Crash Position issued in March of this year. It details the changes I’m now making in my portfolio, which  build off of the logic used in the two earlier short positions I notified Peak Prosperity insiders about.
The first was back in fall of 2018, which yielded a 50%+ return when the market fell between October and September.
The second yielded similar 50%+ gains when stocks fell in May of this year.

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Realistically, What’s Left To Power Asset Prices Higher?

18 days ago

Here we are again. The markets are within a few percentage points of their all-time highs, but just can’t seem to muster the momentum to break out above them.
We saw similar conditions back in March/April and then again in July. Both times, the S&P dropped sharply after failing to remain above 3,000.
Both situations presented profitable opportunities to short stocks, which we alerted our readers to at the time.
Widening out our perspective even farther, it’s becoming increasingly clear that the motive power pushing the markets higher over the past decade has lost its drive. Today, the S&P is nearly same price it was a year ago. And very close to where it was at the start of 2018.
In short, it hasn’t really gone anywhere for over 20 months:
source: Yahoo! Finance

And in those 20 months,

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Daily Digest 9/27 – Good News Friday: Turning Billboards Into Honeybee Hotels, ‘Real Hope’ For Meaningful Climate Action

18 days ago

This is Good News Friday, where we find some good economic, energy, and environmental news and share it with PP readers. Please send any positive news to [email protected] with subject header “Good News Friday.” We will save and post weekly. Enjoy!
Economy

Psychedelic drug therapy enters new era with Johns Hopkins center (Sparky1)
“It’s incredibly exciting as the largest single donation or investment into psychedelic research,” said Brad Burge, director of strategic communications for the San Francisco-based non-profit Multidisciplinary Association for Psychedelic Studies.

“This donation shows that there will be enough regulation and public support that will create jobs in research and therapy. This research has moved out of the fringe.”

Stars, Global Citizen founder outline

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Daily Digest 9/26 – U.S. Health Insurance Costs Hit Record High, Is Aramco Lying About Its Damaged Oil Infrastructure?

19 days ago

Economy

Amazon event introduces new line of wearables that will push Alexa into every corner of your life (Sparky1)
Because Amazon lacks an Alexa-powered smartphone such as Google and Apple have, it’s looking for other ways to make its always-listening assistant omnipresent. In addition to the wearables, it announced an updated Echo Dot that shows the time and a new eight-inch Echo Show. There was also the Echo Glow, which is essentially a soothing, Alexa-controlled night light. The Alexa-controlled Amazon Smart Oven can read bar codes on packaged foods and automatically cook them according the directions, and a new Ring Elite doorbell feature adds Alexa to the front door to chat up visitors and take messages if you’re away.

Here are 3.4 trillion reasons the stock market could be

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Peter Boghossian: How To Have Impossible Conversations

20 days ago

Looming government insolvency. Ecosystem collapse. Our complete dependence on depleting fossil fuels. Overpopulation. The accelerating wealth gap between the 1% and everyone else. The folly of pursuing exponential growth on a finite planet.
Each of these topics often seem impossible to talk about. Too many people find them too triggering.
We could add many more to this list. Religion. Politics. Abortion.
But avoiding these topics doesn’t help us. It sets us up for firey conflict when opposing beliefs on these topics inevitably collide.
So, how can we successfully engage in discussion on these issues, with those we care about and with society at large?
Peter Boghossian, co-author of How to Have Impossible Conversations: A Very Practical Guide, shares straightforward conversational ‘hacks’

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Daily Digest 9/25 – The World’s Wealthiest Families Are Stockpiling Cash, Medical Price Roulette

20 days ago

Economy

Peoria Residents Face New Property Tax Fee Devoted Entirely To Pensions (Saxplayer00o1)
Peoria is not alone: Springfield city leaders learned in August the city must find another $269 million to properly fund its pensions over the next two decades. Other cities, such as Harvey, Carol Stream and Rockford, have also had to raise taxes or make significant cuts to pay for pensions. East St. Louis is facing $2.2 million in firefighter pension debt and is at risk of losing its state funding until the city pays it.

Forty States in the U.S. Do Not Have Enough Money To Pay Their Bills (Saxplayer00o1)
Despite the fact that the total U.S. economy is still growing, states have not been able to lower their unfunded liabilities. This is not good news given that the rate of growth in the

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Daily Digest 9/24 – Digital Money vs. the Dollar, The Race To Provide Banking To The World’s Poor

21 days ago

Economy

The Coming Currency War: Digital Money vs. the Dollar (Thomas R.)
Such a future, of course, might be a disappointment to many libertarians and tech-savvy investors who are pinning their hopes (and in some cases their money) on private cryptocurrencies such as bitcoin.

US allies invoke treaty to pressure Venezuela’s Maduro (Sparky1)
Many of the countries that signed the 1947 Rio Treaty already recognize opposition leader Juan Guaidó as Venezuela’s legitimate leader. He declared himself interim president in January, citing what many saw as Maduro’s fraudulent re-election last year.

Several nations have even imposed travel bans and frozen assets, although not in any collective manner.

Americans, behind in the race to build retirement savings, take steps to catch up (Thomas

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Daily Digest 9/23 – Oil Markets ‘One Outage Away From Crisis,’ The Best Places To Live In 2100 AD

22 days ago

Economy

Forget Stocks – Money Market Is Signaling Possible Troubles Ahead (Thomas R.)
When unexpected things happen there, those perpetual worrywarts do not think “opportunity” first, but instead check out the exits. In this case, that undesirable bump was the repo market being unable to function within the Fed’s desired interest rate range.

Fed Bank Of NY: Statement Regarding Repurchase Operations (Sparky1)
The Desk will offer three 14-day term repo operations for an aggregate amount of at least $30 billion each, as indicated in the schedule below. The Desk also will offer daily overnight repo operations for an aggregate amount of at least $75 billion each, until Thursday, October 10, 2019. Awarded amounts may be less than the amount offered, depending on the total quantity of

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Daily Digest 9/21 – Young People Take To The Streets For Climate, Nature ‘Unraveling’ as N. America Loses 3B Birds Since 1970

24 days ago

Economy

Upbeat data suggest U.S. economy still on moderate growth path (Thomas R.)
The U.S. central bank cut rates in July for the first time since 2008. The Fed offered mixed signals on further monetary policy easing. Data, including retail sales, so far in the third quarter suggest the economy is growing close to the April-June quarter’s 2.0% annualized rate.

Financial markets have been flagging a recession. The Atlanta Fed is estimating gross domestic product rising at a 1.9% pace this quarter.

Beijing Daxing International Airport: China’s new mega-airport ready to open (Sparky1)
The multibillion-dollar Daxing, designed by the late architect Zaha Hadid and her Chinese partners, is built for the future, boasting four runways and a terminal the size of 97 soccer pitches upon opening

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