Matters of Concern: 2023-08-01
The latest tidbits of news that matters.
There are so many balls in the air right now that it only made sense to do a long-overdue news roundup!
America Downgraded Again
America’s credit rating has been downgraded from AAA to AA+, this time by Fitch. The last time this happened was in 2011 by S&P.
From the Fitch release:
The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions.
In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025.
Over the next decade, higher interest rates and the rising debt stock will increase the interest service burden, while an aging population and rising healthcare costs will raise spending on the elderly absent fiscal policy reforms. The CBO projects that interest costs will double by 2033 to 3.6% of GDP.
Tighter credit conditions, weakening business investment, and a slowdown in consumption will push the U.S. economy into a mild recession in 4Q23 and 1Q24, according to Fitch projections.
Americans Are Spending Themselves to Death
In related news, The Kobeissi Letter reports that Americans are spending themselves to death fighting inflation:
The average American credit card balance is at a record $7,300. Meanwhile, the median household has just $5,300 in savings. Delinquency rates are up 6 straight quarters, on track for the longest streak since 2008. We are "fighting" inflation with credit cards.
For the first time in history, total credit card debt is about to cross $1 trillion. Since Q4 2020, total credit card debt is up over $200 billion. Americans currently hold a record $986 billion in credit card debt.
Meanwhile, delinquency rates have been rising to nearly 3%. Delinquency rates fell sharply during the pandemic as stimulus was handed out. Now, we see the exact opposite trend with 6-straight quarterly increases in delinquencies. This ties the longest streak since 2008.
As prices of basic necessities rise, Americans are borrowing to offset the costs. Many Americans have not experienced interest rates this high in their adult lives. The credit card debt crisis is concerning.
AR-15 Pistol Ruling
Today, Firearms Policy Coalition (FPC) and FPC Action Foundation (FPCAF) announced that the Fifth Circuit Court of Appeals has ruled in Mock v. Garland, finding that FPC and FPCAF are likely to win on the merits of their lawsuit challenging ATF’s pistol brace rule. The Fifth Circuit also remanded the lawsuit back to the district court with instructions to reconsider the other preliminary injunction factors within 60 days. The opinion can be viewed at FPCLegal.org.
“The ATF incorrectly maintains that the Final Rule is merely interpretive, not legislative, and thus not subject to the logical-outgrowth test,” writes Judge Smith in the Court’s opinion. “The Final Rule affects individual rights, speaks with the force of law, and significantly implicates private interests. Thus, it is legislative in character. Then, because the Final Rule bears almost no resemblance in manner or kind to the Proposed Rule, the Final Rule fails the logical-outgrowth test and violates the APA.”
The Court goes on to state: “To ensure relative stability, we MAINTAIN the preliminary injunction pending appeal that the motions panel issued on May 23, 2023, as clarified by this merits panel on May 26, 2023. This court’s injunction will expire 60 days from the date of this decision, or once the district court rules on a preliminary injunction, whichever occurs first. We direct the district court to rule within 60 days.”
Chinese Lab Shut Down in California
Authorities have shut down a shady Chinese lab running out of a California warehouse. From NBC News:
Local and federal authorities spent months investigating a warehouse in Fresno County, California, that they suspect was home to an illegal, unlicensed laboratory full of lab mice, medical waste and hazardous materials.
The Fresno County Public Health Department has been "evaluating and assessing the activities of an unlicensed laboratory" in Reedley, the health department's assistant director, Joe Prado, said in a statement Thursday. All of the biological agents were destroyed by July 7 following a legal abatement process by the agency.
The Centers for Disease Control and Prevention tested the substances and detected at least 20 potentially infectious agents, including coronavirus, HIV, hepatitis and herpes, according to a Health and Human Services letter dated June 6.
An investigation found the tenant was Prestige BioTech, a company registered in Nevada and unlicensed for business in California. City officials spoke with Xiuquin Yao, who was identified as the company president, through emails included in the court documents.
How many more of these are out there?
Joe Plenzler—a retired combat decorated Marine lieutenant colonel who served as the strategic advisor for communication to three successive Commandants of the Marine Corps from 2010 to 2015—proposed a new military draft in an editorial for Military.com, a subsidiary of Monster.com:
Today, the military needs only about 160,000 youth from an eligible population of 30 million to meet its recruitment needs. But after two decades of war -- both of which ended unsuccessfully -- and low unemployment, many experts believe the all-volunteer force has reached a breaking point. And American confidence in its military is at a low.
We should have our military recruiters sign up new troops for 11 months out of the year, and then have the Selective Service draft the delta between the military's needs and the total number recruited.
This model would alleviate the incredible pressure on our recruiters, lower the cost of finding new troops, and significantly reduce the much decried civilian-military gap by subjecting all of America's youth -- rich and poor -- to the possibility of military service via the draft.
While the causes of our current recruiting crisis are many, the fastest and best solution lies within our already existing Selective Service System.
I wouldn’t read too much into this yet, but be on the lookout for similar narratives. This would be a terrible idea for many reasons.
War Brewing in Africa?
Africa is preparing for war
After the coup d'état in Niger and the removal of the French puppet from the presidential position, the West African organization ECOWAS, which is under the full control of the United States and France, announced that it would attack Niger.
Yesterday, Mali, Burkina Faso and Guinea jointly declared that the attack on Niger is an attack on all of them and that they will intervene militarily.
But the most interesting part is Algeria's statement that it will also intervene militarily if Niger is attacked. Today the Chief of Staff of the Algerian Army arrived in Moscow for a meeting with Shoigu. Algeria is likely to receive heavy weapons from Russia and Iran through its ports.
The USA and France have confirmed that they support military intervention by ECOWAS, de facto confirming that they are creating a new war in the world like in Syria and Ukraine.
The same scheme worked for them when they destroyed Libya, but today Niger has powerful support
It wouldn’t be a proper world war without Africa, and yes, the infamous Wagner Group is involved.
Yellow Finally Dies
Do you like these news roundups? Should I do them more often?