Politics, Policy, Political News Top Stories
House Democrats watched the GOP struggle to pick a speaker and saw a preview of how the chamber’s next two years are likely to go.
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Tom Lee
Bloomberg TV
The Fed has already tamed inflation, and that could set stocks up for a blistering rally in 2023, according to Fundstrat’s Tom Lee.
He predicted a double-digit gain in the S&P 500, pointing to various cooling inflation indicators.
Estimates for core prices indicate “Fed ‘mission accomplished’ as inflation is running at 2%,” Lee said.
Stocks could see double-digit gains in 2023, as three indicators that show the Federal Reserve has already succeeded in taming inflation, according to Fundstrat’s head of research Tom Lee.
A stock rally of that size would hinge on the Fed loosening financial conditions, after raising rates an aggressive 425 basis points over the last year to rein in inflation. That policy move led the S&P 500 to post a 20% loss in 2022, marking its worst performance since 2008 – but softening inflation data sets up a pivot, Lee said.
“If this is correct, we believe [the] Fed will allow financial conditions to ease,” Lee said, adding that financial conditions could even soften before the next Fed meeting in February, since they are responsive to public comments from officials. “That is, it is less about rate hikes, but more about whether the Fed views current policy as sufficient to achieving its goals.”
1. Inflation indicators are dropping rapidly – and some show inflation back to the Fed’s 2% target.
While the headline Consumer Price Index is up 7.1%, still well above the Fed’s long-run target of 2%, three-month annualized core CPI for December could show a reading of 2.68%.
Meanwhile, he estimated the core Personal Consumption Expenditures index, which is the Fed’s preferred inflation gauge, is tracking around 2.04%.
“Both figures are ~2% and means Fed ‘mission accomplished’ as inflation is running at 2%. And thus, we think sets up for a Fed to make a ‘dovish’ adjustment to its inflation views in the Feb FOMC meeting,” Lee wrote.
2. Commodity prices have rolled over
Commodity prices, like oil, natural gas, and wheat, were a major driver of inflation in 2022 and have eased significantly over the past year. Natural gas fell 10.5% as of the first trading day of 2023, while crude oil was down 4.1% and wheat was down 2%.
That brings the prices of all three commodities to nearly the level at the start of 2022 – a strong indicator that prices have already rolled over and are cooling, Lee said.
3. The labor market has softened significantly
Fed Chair Jerome Powell has repeatedly cited a tight labor market as a reason why the Fed needs to remains restrictive on policy.
But forecasts for November jobs-openings data indicate the labor market has already softened significantly, Lee said, as the expected 10 million openings mean they are down 8% year over year.
Other data suggest openings could even be softer than those estimates, Lee said, pointing to LinkUp’s estimate of 9.9 million.
Lee has said in a previous note that the S&P 500 could rally as much as 24%. His bullishness is contrary to other Wall Street commentators, who have warned that stocks could tank as much as 25% early 2023 from battered corporate earnings.
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Rep. Byron Donalds, R-Fla., defended his decision to flip his vote for House speaker away from Kevin McCarthy in the third round of voting on Tuesday.
Donalds defended the move during a Wednesday morning appearance on “Fox & Friends,” saying he wants to see a resolution and believes McCarthy lacks the votes to become speaker.
“At that point we were basically deadlocked and it was clear we didn’t have the votes,” Donalds said of his Tuesday flipped vote. “So my thought is, if he doesn’t have the votes, what are we going to do as a conference? We either find someone to get to 218 or at a minimum, adjourn what we were doing and get off the floor so the needed negotiations can happen.”
HOUSE DEMOCRATS CHEER AS MCCARTHY FAILS TO CLINCH SPEAKERSHIP MULTIPLE TIMES
Donalds voted in favor of McCarthy becoming speaker for the first two rounds of voting, as 19 Republicans broke away to vote for Rep. Jim Jordan, R-Ohio. In the third vote, Donalds joined them, and the chamber abruptly adjourned for an overnight recess.
The opposition to McCarthy is led by Rep. Matt Gaetz, R-Fla., and several members of the Freedom Caucus, who demand more influence over the speaker and specific committee slots. Donalds said this opposition is about establishing a fresher approach to Congress as Republicans take the majority.
“For too long in the nation’s capital, everybody has just gone along with the next wave of leadership,” Donalds said. “And that’s not an anti-Kevin McCarthy statement, that is a statement about what a deliberative, open process means for the constitutional republic that is the United States of America.”
THE VOTE FOR HOUSE SPEAKER: LIVE UPDATES
The House GOP caucus is set to meet Wednesday morning to strategize before returning to Capitol Hill at noon to resume voting. Donalds said he has yet to decide on his vote for Wednesday and still believes McCarthy has a path to victory.
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“I think there is a pathway still for Kevin to become speaker of the House,” Donalds said. “But there is going to be work to be done to get there.”
RIO DE JANEIRO (AP) — Latin American leaders converged on Brazil to meet with President Luiz Inácio Lula da Silva on his first full day in office Monday, welcoming him back to power and hoping his country assumes a great role on the international stage.
Lula’s predecessor, Jair Bolsonaro, rarely traveled abroad or received visiting heads-of-state and found himself increasingly isolated.
But South American heads of state – some of them fellow leftists, though not all – clearly welcomed Lula’s third term in office and want greater participation from the continent’s largest economy.
“It was a very powerful symbol of desire in the region that leaders want Brazil to be back,” according to Oliver Stuenkel, a professor of international relations at the Getulio Vargas Foundation, a university. “Latin American leaders want an active, engaged Brazil.”
On Monday, Lula met with presidents Argentina’s Alberto Fernández, Bolivia’s Luis Arce of Bolivia, Ecuador’s Guillermo Lasso, Chile’s Gabriel Boric and Colombia’s Gustavo Petro. Other leaders also traveled to the capital, Brasilia, on Sunday and congratulated Lula on his inauguration, including Uruguay’s President Luis Alberto Lacalle Po.
On Monday afternoon Lula also met with Wang Qishan, the vice president of China, by far Brazil’s biggest export destination. Although Bolsonaro toned down his attacks on China in the latter half of his administration, it is important for China to dialogue with Lula’s administration and ensure Latin America’s biggest nation remains a true partner, Stuenkel said.
Lula is later scheduled to receive the president of Angola and representatives from Cuba, Venezuela and Peru.
Rep. Alexandria Ocasio-Cortez, D-N.Y. floated a possible “coalition government” in the House of Representatives Tuesday after Republicans failed to elect a new speaker of the House.
Ocasio-Cortez, a far-left progressive, raised the possibility that Republican leader Rep. Kevin McCarthy, R-Calif., may have to enter into negotiations with Democrats after he failed to win the majority vote needed to become speaker.
“I do not believe that Kevin McCarthy has the votes. I believe that a lot of the opposition to him is very personal. I believe his leadership style is incompatible with a lot of Republican members and certainly the Democratic Caucus.” Ocasio-Cortez said on MSNBC Tuesday night.
“So the question is, is there anyone in their caucus that can build that consensus? If there isn’t, McCarthy’s team may have to come to the Democratic Party? And, if that’s the case, then what would that even look like. It’s rather unprecedented? Could it result in a potential coalition government?” Ocasio-Cortez asked.
THE VOTE FOR HOUSE SPEAKER: LIVE UPDATES
Rep. Alexandria Ocasio-Cortez, D-N.Y., waits as the House of Representatives holds the election for Speaker of the House, on the first day of the 118th Congress in the House Chamber of the U.S. Capitol Building on Jan. 3, 2023, in Washington, D.C.
(Win McNamee/Getty Images)
Rep. Kevin McCarthy, R-Calif., sits in the House Chamber during the third round of votes for House Speaker on the opening day of the 118th Congress on Tuesday, Jan. 3, 2023, at the U.S. Capitol in Washington D.C.
(Matt McClain/The Washington Post via Getty Images)
“Could we get Democratic chairs of committees as a result?” she wondered aloud.
In her scenario, McCarthy would approach Democrats to gain the 20 or so votes he needs to become speaker. In return, Democrats would extract major concessions from him, likely ensuring that their members remain in charge of powerful and influential House committees. Ocasio-Cortez was clear this is unlikely to happen.
“I’m not saying necessarily that our party is signaling an openness just yet,” she told MSNBC host Alex Wagner. “But, really, it’s about the cards that are in McCarthy’s hands. And if he chooses to approach the Democratic Caucus, then that would be a negotiation, in and of itself, for a potential coalition government. But, again, this is very much an unprecedented time.”
MCCARTHY, GOP HOPE TO BREAK HOUSE SPEAKER LOGJAM AFTER WHIFFING ON TUESDAY
Rep. Scott Perry, R-Pa., speaks to reporters following a meeting with House Republicans at the U.S. Capitol Building on Jan. 3, 2023, in Washington, D.C.
(Kevin Dietsch/Getty Images)
A group of 20 GOP hardliners refused to vote for McCarthy over three ballots Tuesday, and the House adjourned before Republicans consolidated support around one candidate for speaker. The holdouts say McCarthy has refused to make guarantees that he would change House rules to disempower the speaker’s office and open legislation to amendments from rank-and-file members on the House floor. McCarthy’s allies are accusing them of embarrassing the GOP over minor issues and shifting goalposts.
The House will reconvene Wednesday for a second day of speakership elections. To move forward, McCarthy will have to make further concessions that would flip the 15 GOP votes he needs to become speaker, make a deal with Democrats or another consensus speaker candidate will have to come forward.
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“There is a very interesting quandary that Kevin McCarthy is in. He needs to get these votes somewhere if he wants to be speaker, and if he can’t get those votes from the House Freedom Caucus, he’s not going to become speaker. Unless, he approaches the Democratic Party in order to enter into some negotiation,” Ocasio-Cortez reiterated to her Instagram followers Tuesday.
“If this goes on, and on, and on, and the Republican Party has no speaker nominee, something has got to give.”
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California is bracing for a life-threatening Pineapple Express storm on Wednesday that is expected to bring whipping winds, flooding, power outages and heavy rainfall into Thursday.
The atmospheric river and bomb cyclone targeting the region could become one of the more impactful storms to strike the state in years, according to FOX Weather, with some evacuation orders issued already.
“This could be historic,” Fox News’ senior meteorologist Janice Dean said.
The National Weather Service office in the Bay Area warned that while rainfall would be light throughout the morning, residents should not let their guard down, as thunderstorms and strong winds were expected later in the day during a “brutal system.”
High wind warnings were posted across the entire Bay Area and the Central Coast through 10 a.m. PT on Thursday, and the office advised Californians to prepare for downed trees and flooding along the Russian River near Guerneville on Thursday.
The NWS in Sacramento said walloping rain and mountain snow would develop Wednesday, becoming heavy overnight.
“Heavy snow returns Wednesday – as a strong system moves through the area. Snowfall amounts up to 1-3 feet are possible. Expect chain controls, dangerous travel, strong winds and periods of whiteout conditions. Mountain travel is HIGHLY discouraged!” the office tweeted.
It also warned about impassable roadways due to flooding and rises on creeks, streams and rivers, telling people to stay alert and be especially cautious driving at night.
A flash flood watch for possible debris flow was issued in several burn scars and a high wind warning was in effect for most of the interior of northern California.
“Damaging wind gusts up to 45-60 mph are expected in the valley and foothills. Be prepared for widespread power outages, downed trees [and] very difficult driving conditions,” the NWS said.
Local gusts were alerted to be around 70 miles per hour for the coast and highest peaks.
Outage tracker PowerOutage.US showed that more than 12,800 customers were without power early Wednesday.
This comes just days after a record-breaking storm brought similar impacts to much of the Golden State.
December was one of the wettest on record in many northern California locations, and Stockton and Modesto both had their wettest Decembers ever.
California officials assured that they were working to address concerns, with the office of Gov. Gavin Newsom tweeting that the state operations center was at its highest emergency level and that the flood operations center was coordinating getting sandbags to locals.
“We’re setting up shelters & are ready to deploy staff to hospitals [and] ambulance strike teams. Stay safe!” it said.
San Francisco Mayor London Breed said in a tweet that the rain on New Year’s Eve had been “significantly higher than projected” and flooding killed one person in the region, washed away a section of a levee system and prompted the evacuation of more than 1,000 inmates in a county jail.
“To prepare, we will activate the citywide Emergency Operations Center, in order to clear storm drains, distribute sandbags, respond to service requests and ensure residents are prepared,” she said.
Rainfall in downtown San Francisco hit 5.46 inches on New Year’s Eve, making it the second-wettest day on record, behind a November 1994 deluge, the National Weather Service said.
The rain was welcomed in drought-stricken California as the past three years have been the state’s driest on record.
Most of the state’s major reservoirs were still well below their historical averages.
The Associated Press contributed to this report.
Carscoops
Honda revealed today that the brand-new 2023 Accord will start at $28,390 ($27,295 + $1,095 destination charge) in the U.SA. That marks a modest $775 price increase over the base Accord’s price for the 2022 model year.
For that extra dough, buyers will get the 11th-generation Honda Accord LX model, which is powered by a 1.5-liter turbocharged engine. It has been updated for 2023 to feature a better direct-injection system, cold-active catalyst, and more, which help it to make 192 hp (143 kW/195 PS) and 192 lb-ft (260 Nm) of torque.
More: 2023 Honda Accord Debuts With New Looks And A Techy Interior
The engine has been tuned more for smoothness than power, though, as has the CVT transmission. Inside, the LX gets a seven-inch touchscreen, Apple CarPlay and Android Auto, a 10.2-inch instrument screen, LED headlights and 17-inch alloy wheels.
The EX builds from there and adds heated front seats, a one-touch power sliding moonroof, dual-zone climate control, a 10-way power adjustable driver’s seat, and the sound system gets upgraded to an eight-speaker system. It is the only other ICE-only model in the lineup, and prices for it start at $30,705 (dest. included).
2023 Honda Accord Pricing & EPA Fuel Economy Ratings
TrimDrivetrainMSRPMSRP w/ $1,095 Destination EPA City/Hwy/CombinedLX1.5T/CVT$27,295$28,39029 / 37 / 32EX1.5T/CVT$29.610$30,70529 / 37 / 32SportHybrid$31,895$32,99046 / 41 / 44EX-LHybrid$33,540$34,63551 / 44 / 48Sport-LHybrid$33,875$34,97046 / 41 / 44TouringHybrid$37,890$38,98546 / 41 / 44
Honda believes that more than 50 percent of the model’s sales will come from four hybrid trims in the 2023 Accord’s lineup. They are the Sport, EX-L, Sport-L, and the Touring, and all benefit from a 2.0-liter four-cylinder engine and a pair of electric motors that are mounted side-by-side. They provide the Accord with 204 hp (152 kW/207 PS) and 247 lb-ft (335 Nm) of torque.
The cheapest way to get into an Accord hybrid will be the Sport model, which starts at $32,990 (dest. included). It gets a leather-wrapped steering wheel and shift knob, Berlina Black 19-inch alloy wheels with a machined face, and Honda’s largest-ever touchscreen. Standard on all hybrid Accords, the 12.3-inch infotainment screen gets a physical volume knob, as well as wireless Apple CarPlay and Android Auto compatibility.
The Sport-L builds on the Sport trim and adds a memory function to the driver’s seat, a power passenger’s seat, as well as sportier styling accents, which includes a rear diffuser. Prices for that model start at $34,970 (dest. included). The EX-L, meanwhile, starts where the EX left off and adds front and rear parking sensors, leather seats, Pewter Grey 17-inch alloy wheels, and costs $34,635 (dest. included).
Finally, the Touring trim tops the lineup with Google built-in technology that allows owners to utilize Google Assistant, Google Maps, and Google Play within the car’s infotainment system. It also comes with a three-year unlimited data plan, a 12-speaker Bose sound system, wireless smartphone charging, 5G Wi-Fi hotspot capability, heated rear seats, as well as heated and ventilated front seats.
Interested customers won’t have to wait long before they can check out the new sedan, because Honda says that the new 11th-generation Accord will start arriving in American dealerships this month.
Business Insider
Salesforce co-CEO Marc Benioff.
Jemal Countess / Stringer
Salesforce said Wednesday it’s laying off about 10% of staff as part of a restructuring plan.
Co-CEO Marc Benioff attributed the cuts to over-hiring during the pandemic.
Read the email to Salesforce staff here.
Salesforce said Wednesday it’s laying off about 10% of its employees as part of a cost-cutting restructuring plan.
Co-CEO Marc Benioff announced the layoffs in an email to staff Wednesday morning. He attributed the decision, which could see around 7,000 employees lose their jobs, to over-hiring during the pandemic and a “challenging” economic environment.
Benioff said most of the layoffs would happen “over the coming weeks.” Affected staff in the US would get close to five months of pay, health insurance, and career resources, he said.
Here’s what Benioff wrote in his email to Salesforce staff:
As one ‘Ohana, over the last 23 years, Salesforce has built the #1 CRM that drives incredible customer success across every line of business for every industry around the world. We have never been more mission-critical to our customers. We have an unparalleled ecosystem, with thousands of partners and millions of Trailblazers building their companies on our platform.
However, the environment remains challenging and our customers are taking a more measured approach to their purchasing decisions. With this in mind, we’ve made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks.
I’ve been thinking a lot about how we came to this moment. As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.
Within the next hour, employees who are initially affected by this decision will receive an email letting them know. Our leadership will reach out directly to these employees, and provide clarity for their teams about changes within their organizations.
For those who will be leaving Salesforce, our priority is to fully support them, including by offering a generous package. In the U.S., affected employees will receive a minimum of nearly five months of pay, health insurance, career resources, and other benefits to help with their transition. Those outside the U.S. will receive a similar level of support, and our local processes will align with employment laws in each country.
The employees being affected aren’t just colleagues. They’re friends. They’re family. Please reach out to them. Offer the compassion and love they and their families deserve and need now more than ever. And most of all, please lean on your leadership, including me, as we work through this difficult time together.
I’m grateful for every single one of you who has contributed to our continued success as a company, and the hard work and sacrifices you have made to generate success for our hundreds of thousands of customers. You’ve built our company — for all of our stakeholders — and you’ve shown incredible resilience every step of the way.
With gratitude,
Marc
As of January 31, 2022, Salesforce had 73,541 employees, with 55% based in the US.
In a regulatory filing published Wednesday, the company said it would also close some offices to reduce costs.
BOSTON (AP) — The mastermind of the nationwide college admissions bribery scandal is set to be sentenced on Wednesday after helping authorities secure the convictions of a slew of wealthy parents involved in his scheme to rig the selection process at top-tier schools.
Federal prosecutors are asking for six years behind bars for Rick Singer, who for more than a decade helped deep-pocketed parents get their often undeserving kids get into some of the nation’s most selective schools with bogus test scores and athletic credentials.
The scandal embarrassed elite universities across the country, put a spotlight on the secretive admissions system already seen as rigged in favor of the rich and laid bare the measures some parents will take to get their kids into the school of their choice.
Singer, 62, began secretly cooperating with investigators and worked with the FBI to record hundreds of phone calls and meetings before the arrest of dozens of parents and athletic coaches in March 2019. More than 50 people — including popular TV actresses and prominent businessmen — were ultimately convicted in the case authorities dubbed Operation Varsity Blues.
In the nearly four years since the scandal exploded into newspaper headlines, Singer remained out of jail and kept largely silent publicly. He was never called as a witness by prosecutors in the cases that went to trial, but will get a chance to address the court before the judge hands down his sentence in Boston federal court.
In a letter to the judge, Singer blamed his actions on his “winning at all costs” attitude, which he said was caused in part by suppressed childhood trauma. His lawyer is requesting three years of probation, or if the judge deems prison time necessary, six months behind bars.
“By ignoring what was morally, ethically, and legally right in favor of winning what I perceived was the college admissions ‘game,’ I have lost everything,” Singer wrote.
Singer pleaded guilty in 2019 — on the same day the massive case became public — to charges including racketeering conspiracy and money laundering conspiracy. Dozens of others ultimately pleaded guilty to charges, while two parents were convicted at trial.
Authorities in Boston began investigating the scheme after an executive under scrutiny for an unrelated securities fraud scheme told investigators that a Yale soccer coach had offered to help his daughter get into the school in exchange for cash. The Yale coach led authorities to Singer, whose cooperation unraveled the sprawling scandal.
For years, Singer paid off entrance exam administrators or proctors to inflate students’ test scores and bribed coaches to designate applicants as recruits for sports they sometimes didn’t even play, seeking to boost their chances of getting into the school. Singer took in more than $25 million from his clients, paid bribes totaling more than $7 million, and used more than $15 million of his clients’ money for his own benefit, according to prosecutors.
“He was the architect and mastermind of a criminal enterprise that massively corrupted the integrity of the college admissions process — which already favors those with wealth and privilege — to a degree never before seen in this country,” prosecutors wrote in court documents.
If the judge agrees with prosecutors, it would be by far the longest sentence handed down in the case. So far, the toughest punishment has gone to former Georgetown University tennis coach Gordon Ernst, who got 2 1/2 years in prison for pocketing more than $3 million in bribes.
Others ensnared in the scandal included “Full House” actor Lori Loughlin, her fashion designer husband Mossimo Giannulli, and “Desperate Housewives” star Felicity Huffman. Punishments for the parents have ranged from probation to 15 months behind bars, although though the parent who received that prison sentence remains free while he appeals his conviction.
One parent, who wasn’t accused of working with Singer, was acquitted on all counts stemming from accusations that he bribed Ernst to get his daughter into the school. And a judge ordered a new trial for former University of Southern California water polo Jovan Vavic, who was convicted of accepting bribes.
Business Insider
NASA says it has approached Elon Musk’s SpaceX about a potential emergency mission to bring back crew from the ISS.
Paul Hennessy/SOPA Images/LightRocket via Getty Images
NASA has considered SpaceX for a backup plan to return the ISS crew to Earth amid the Soyuz leak.
NASA and Russia’s space agency are investigating the leak, which began in December.
Two cosmonauts and one astronaut were scheduled to return home in March in the Soyuz capsule.
NASA has reached out to Elon Musk’s SpaceX to see whether it was capable of returning three crew members from the International Space Station (ISS) after a docked Russian spacecraft leaked coolant.
The American space agency said in a blog post on Friday it had asked about whether SpaceX’s Dragon spacecraft had the capability to facilitate the return in the event that an emergency arose.
The primary focus was on understanding the post-leak capabilities of the Soyuz MS-22 spacecraft, the agency added.
The Soyuz capsule was due to return the three crew members in March after flying them to the ISS on September 21 for a six-month mission, per NASA. The crew consists of two cosmonauts, Sergey Prokopyev and Dmitry Petelin, and one American astronaut, Frank Rubio.
NASA and Russia’s space agency Roscosmos were working together to investigate the leak and determine the next steps, the agency added.
“We have asked SpaceX a few questions on their capability to return additional crew members on Dragon if necessary, but that is not our prime focus at this time,” a NASA spokeswoman said in a statement to Reuters on December 28.
NASA and SpaceX didn’t immediately respond to Insider’s request for comment.
The external leak was first detected in the Soyuz capsule when two Roscosmos cosmonauts were preparing to go on a spacewalk, NASA said on December 14.
Footage shared by NASA in December showed the leak, which resembled white particles, spraying out of the Soyuz spacecraft, which is docked to the ISS.
Roscosmos said on December 22 that it was considering a “rescue” mission to ferry the crew members back to Earth earlier than expected, Reuters reported. This would involve flying an empty spacecraft to the ISS to pick them up, per the report.
