Daily Discussion - December 18, 2024

German Economy Nears Collapse As Election Nears

Presenting the CDU/CSU’s manifesto on Tuesday. Merz said he would make savings of €100bn by reducing spending on migration and welfare. He also promised tax cuts and lower electricity prices to kick-start the economy, stuck in its first two-year contraction since the early 2000s. Meanwhile, the SPD and Greens pledged to reform Germany’s “debt brake”, its constitutional cap on new borrowing, saying the country needed to invest billions of euros in its ramshackle infrastructure and the green transition.

Meanwhile, the SPD and Greens pledged to reform Germany’s…  Прочетете още “debt brake”, its constitutional cap on new borrowing, saying the country needed to invest billions of euros in its ramshackle infrastructure and the green transition. Some observers worry Scholz’s televised intervention could end up setting the tone for the rest of the contest. Even the Greens, his allies in government, expressed disapproval. “One is sometimes surprised by his choice of words,” said Franziska Brantner, the Greens co-leader. Germany is not used to rambunctious, no-holds-barred elections. Under Scholz’s predecessor Angela Merkel, who governed Germany from 2005-2021, campaigns were soporific affairs, lacking the cut and thrust and spectacle often seen in US contests. But Merz is an altogether different politician. Critics routinely describe him as irascible and touchy, given to intemperate outbursts that delight his fans but can put off more moderate voters. But even his detractors admit his powerful oratory can get under Scholz’s skin.

Federal Reserve Nukes U.S. Stock Market

The Dow Jones Industrial Average sank deeper into the history books on Wednesday, with the storied index on track for its 10th straight losing day following a disappointing rate outlook by the Federal Reserve.The Dow lost 1077 points, or 2.5%, its biggest loss since August and on track for its worst losing streak since an 11-day slide in 1974. The 30-stock average posted a nine-day losing streak on Tuesday, its longest since 1978. The S&P 500 lost 2.5% and the Nasdaq Composite shed nearly 4% with losses increasing into the close.The central bank reduced its overnight borrowing rate by a…  Прочетете още quarter point to a target range of 4.25% to 4.5%, as expected. However, the Fed indicated it would only cut rates twice in 2025, fewer than the four cuts given in its last forecast. Fed Chair Jerome Powell said the central bank’s move to cut rates in recent months allows it to “be more cautious as we consider more adjustments to our policy rate.”The odds of a rate cut at the Fed’s next meeting in January fell to just 11%, according to fed funds futures trading via the CME FedWatch tool. Before Wednesday, traders were hoping the Fed would stay aggressive with rate cuts in 2025, fueling the bull market further. Treasury yields jumped following the Fed’s cautious outlook, pressuring share prices. The 10-year Treasury yield crossed above 4.50%.

Newsom declares state of emergency in California due to bird flu

California Governor Gavin Newsom has declared a state of emergency due to H5N1, more commonly known as avian influenza or bird flu.

The emergency follows an outbreak of the virus among dairy cows in Southern California farms, according to the news release on the governor’s website.

After initially being reported in Texas and Kansas in March, bird flu has been confirmed in cattle across 16 U.S. states, as the Centers for Disease Control and Prevention (CDC) has reported.

There have been no cases of human transmission of bird flu in California, the release stated, with all infections linked…  Прочетете още to exposure to infected cattle.