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Daily Maverick
2 days ago
- Business
- Daily Maverick
Look on my works, ye Mighty, and despair: US's economic outlook is decidedly murky
When I worked in fund management in the City of London in the 1990s, my team dreaded seeing one of our largest company investments featured on the cover of Business Week. Too often, it heralded bad news. So we formulated a curse: 'Those whom the Gods wish to destroy, they first put on the front cover of Business Week.' This sentiment derives from the Latin warning, 'Those whom Jupiter wishes to destroy, he first deprives of reason.' It has been adapted many times since … including by James Bond! The variant that informed our 1990s curse came from Cyril Connolly, the journalist and critic: 'Whom the Gods wish to destroy, they first call promising.' Fast-forward to 2024 and it seems as if The Economist has usurped Businessweek. On 19 October 2024, the British weekly ran a front cover story lauding the United States as 'The Envy of the World'. Eight months later, at least to many non-Americans, America is anything but. Result? Many foreigners are selling their American financial assets. Outsiders increasingly pity – not envy – the US because of the domestic political quagmire in which it is visibly trapped; its foreign policy challenges are no less daunting. But I will leave the reader to decide for themselves whether they agree with these assessments. For my part, I focus mostly on the economics. Yet here too there are multiple signs of malaise. And they are not just cyclical – GDP growth was actually negative last quarter – but structural. Many titans of US finance fear this malaise could yet have world-altering consequences. The subtext of The Economist cover story was to laud what especially financial markets had dubbed 'US exceptionalism': high economic growth, solid productivity gains, a generally strong dollar and, above all, a stock market that had consistently outperformed all-comers. The result of the latter was that the US – with but 4.2% of the world's population – accounted for 67% of end 2024's MSCI All World Equity Index. The idea of American exceptionalism is far from new. It dates back to a 1630 speech from John Winthrop. Quoting the Bible – 'You are the light of the world. A town built on a hill cannot be hidden' – this Bostonian Puritan inaugurated a theme that has been oft repeated in US politics: one of American uniqueness, that, by being 'above', America would be a 'beacon of hope' for the world. US politicians have repeatedly echoed this notion, most famously John F Kennedy in 1961: 'We must always consider that we shall be as a city upon a hill – the eyes of all people are upon us.' In October 2024, The Economist was suggesting that this US beacon of hope had become 'The Envy of the Financial World'. How different everything seems now! Part of the challenge faced by those of us in finance daring to suggest that 'something is amiss with the US' is that we face a form of colour blindness: dollar blindness. Most financial analysts and investors – plus the talking heads of CNBC and Bloomberg – speak Dollar as their first language … and are rarely fluent in any other currency. And because they nearly always speak in dollars, they cannot appreciate how much the US dollar 'ain't what it used to be'. Furthermore, by having strong equity biases, they often have only a vague grasp of the vagaries of bond and currency markets. To most of the Dollar-fluent group, the fact the S&P 500 has hung in there since 18 October 2024 (and Donald Trump's election soon thereafter) means there is no cause for alarm: equities are broadly flat since that article. Even if equities are not one of the vital signs flashing red, an increasing number of foreigners are now divesting their savings from US Treasuries and thereafter the US dollar. (To state the obvious, the currency unit of account for foreigners is not the US dollar.) Over the past eight months, the UST 10-year yield has fallen from 4.08% to 4.28%. More significantly, over the same period, the 30-year – which saw outflows of $11-billion in Q2 25 – has fallen from 4.38% to 4.82%. On top of these bond losses, many foreigners have lost money on the currency cross as the dollar's DXY Index has fallen from 105.5 to 98.0 over the past eight months. (The DXY actually rose to 110 until just before Joe Biden handed over to Trump, but has fallen 11% since that presidential inauguration). Added to these red lights, we must note a recent slew of US macro data – both hard and soft – that is painting a worrying cyclical picture. The IMF forecasts that – after 2024's 2.8% – the US economy will grow a full percentage point less, at 1.8%, in 2025. In 2026, they see yet further deceleration in that growth rate. This slowdown will be before the effects of the tariff war are fully reflected. In addition, there is a growing foreign tourist stayaway now all too evident in flight and hotel occupancies. Finally, the loss of the growth drivers from immigration – which has driven all GDP growth post-Covid! – are also hard to estimate. Meanwhile, the 'all-important' US consumer is showing signs of stumbling: 'all important' as consumption accounts for nearly 70% of US GDP. The Consumer Confidence Index dropped 5.4 points in June to 93.0 – significantly below the 98.4 consensus estimates. May's retail sales were down 0.9% month on month. May auto sales decelerated from March and April. Restaurant sales fell -1% in May after a gain of +2.5% in April. Housing data is cooling: May housing starts were down 9.3% to a five-year low and property prices are falling in real terms. But, in the grander scheme of things, these monthly macro readings are but peripheral readings, cyclical more than structural. What matters above all – more precisely, underneath it all – is what lies beneath in the foundations of the US economy. For buried there is a ticking time bomb: the US Federal budget deficit. And Moody's, by recently stripping the US of its last AAA sovereign debt rating, has alerted investors to the increased volume of that ticking. For the first eight months of FY 2025 to end May, this deficit rose $1.37-trillion, up 13.5% on 2024's equivalent. After a $1.8-trillion deficit in FY 2024, a higher total for FY 2025 now looks possible … and this despite the cost-cutting efforts of the now-departed Elon Musk and his left-behind Doge team. Trump's flagship budget – 'One Big Beautiful Bill Act' (OBBBA) – is criss-crossing multiple minefields in Congress. The Senate and House Republican versions –still not reconciled to each other – are underpinned by heroic assumptions, especially on the revenue side. Both also rely upon a GDP growth rate rising over 4%, an eventuality few neutral forecasters find credible. The Tax Foundation forecasts the OBBBA will raise GDP by just 1.1%. Yale University even sees growth declining 3%! The dysfunctionality of Congress is rooted in a seemingly irreconcilable desire for Republicans to cut taxes and for Democrats to raise expenditure. (The Republicans always want to raise defence expenditure too.) If what results in the actual numbers in coming years is a mish-mash of lower revenues (suggesting tax cuts happened), yet similar or even higher expenditure (implying Republican cost cutting will have been mostly thwarted), then it is a mathematical inevitability that the primary deficit (which excludes interest on debt) of the Federal Budget will rise. Yet there is wishful thinking on the part of most Republicans that the primary deficit can, looking forward over the next decade, be contained at around $500-billion annually. However, if any overall deficit results, and not just a primary one, this means the overall total federal debt ($37-trillion end June 2025; forecast $37.5-trillion to end fiscal 2025) must rise too. So to be clear, a primary deficit of '$500-billion' in 2025 (Ahem! It is heading for $1-trillion plus!) plus this year's debt interest bill of $800-billion would result in an overall deficit of $1.3-trillion … which would then be added to total outstanding federal debt. The following year, interest on a larger federal debt (now forecast to be $37.5-trillion federal debt by the end of September 2025) would then be payable. Not that the primary deficit can in any way be ignored, it is the interest bill on government debt that risks weighing down US government finances the most. Why? Because if Congress cannot run primary budget surpluses, influencing that interest bill is essentially beyond their reach. And, to quote the Committee for a Responsible Federal Budget (4 June 2025): 'If interest rates were to remain elevated at current levels – with 10-year Treasuries at 4.5% – then interest costs would climb further to $2.1-trillion (5.1% of GDP) in 2034 or $2.2-trillion (5.2% of GDP) under a permanent OBBBA scenario.' Uncontrollable interest payments could yet become the tail that wags the federal deficit dog. One must add to this fiscal fiasco the cocktail of uncertainty now facing the US's longer-term economic growth prospects: higher tariffs, evidence of foreigners boycotting US goods (think Boeing, as recently as 2017 the US's top industrial exporter), macro policy uncertainty causing investments to be postponed, and increasing cuts to university-based R&D as part of a wider attack on academia, the legal profession, the fourth estate and above all the Constitution itself. Far from being 'the Light on the Hill', the US's economic outlook is decidedly murky. Is it any wonder that foreign investors are shying away from the US bond market, precipitating rises in longer-term interest rates (so adding to the financing burden of federal debt) and thereafter causing the US dollar to sink? The British historian Arnold Joseph Toynbee wrote that 'Civilisations die from suicide, not by murder'. And the mounting travails faced by today's US have mostly been self-inflicted. What should we expect next? Georges Danton, the orator who became the minister of justice in 1792 three years after the French Revolution and president of the National Convention a year later, was credited (among others) to have predicted: 'Like Saturn, the revolution devours its children.' Madame la Guillotine made Danton's acquaintance in 1794. Will Donald Trump start turning on his own? Was Elon Musk his amuse-bouche? Will Tulsi Gabbard be the next course? How will Trump serve the Maga wing of the Republican Party as they decry his 'foreign adventures'? Or Thomas Massie? And will Baked Alaska – Lisa Murkowski – yet be Trump's dessert? 'The New Colossus' is a sonnet by Emma Lazarus written in 1883 to raise money for the construction of the Statue of Liberty's pedestal. It is engraved on a bronze plaque inside that pedestal. Its most famous lines are: Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door! This welcome does not apply in 2025. What then does the future hold for an America that is no longer a Statue of Liberty lifting a lamp beside a golden door? In the first version of the film The Planet of the Apes, the closing image is of a partially buried Statue of Liberty rising rusted from a deserted beach. The film's lead, played by Charlton Heston, realises the gruelling odyssey he has just survived has all been in vain: he was always back on Planet Earth. This powerful scene surely echoed Shelley's 1818 sonnet, Ozymandias: Poetry for thought. DM
Hindustan Times
24-05-2025
- Entertainment
- Hindustan Times
Netflix's Sirens filming locations: Where is Lloyd Harbor and what makes it special?
Netflix's latest show about the elite, Sirens, has caught its audience in a chokehold; not just because of the plot it delivers, but also the exquisite scenery and stunning visuals it unfolds its storyline. If you felt the show exuded a sense of exuberance ever since you hit play, you weren't wrong, since the show was primarily filmed in one of Long Island's most gatekept and exclusive communities- Lloyd Harbor. Located in Long Island's North Shore, Lloyd Harbor is not just home to the ultra-wealthy but also offers the kind of expansive greenery and polished hobbies most people can only dream of. The history of the region can be traced back to the Matinecock Native Americans, who inhabited the island long before European settlers arrived on its shore. The place is named after one of its early settlers, James Lloyd, who acquired the land now defining the harbor back in 1676. Its impressive 9.2 square miles of area covered with a negligible population of merely 3,400 individuals ensures quality of life to all residents. Though demographics point to Caucasians dominating most of the populace, a small number of Asians, African-Americans, and Hispanics also live in the area. A staggering 95.3% of people own the houses they live in, rendering rented properties almost negligible. Hobbies and interests of residents are naturally affected by the quality of life they enjoy. Since affordability is no barrier, the vast expanses of land and open scenery encourage people to indulge in activities like the yacht club or equine sports for recreation. Historic parks and natural reserves also dot the landscape, including one of the filming locations for the show, called Caumsett State Historic Park Preserve. With massive English-style mansions, the harbor houses more rustic antique homes than polished modern ones. Needless to say, the fine gentry inhabiting the island also uptick in the quality of life they relish. The crime rate in the region is almost negligible, poverty is almost non-existent, and the majority of the residents come from well-educated college backgrounds. Though transportation can be considered a bit tough considering the lack of any direct train connected to New York, most people own and travel in their own cars. A 2009 Business Week article ranked the community as the 14th wealthiest town in America. The harbor also hosts the much-famed 'Gold Coast'- an extension along Long Island's North Shore that features some of the most architecturally stunning private residences built by wealthy industrialists back in the wee years of the 20th century. The place boasts of an unchanging landscape that big names like Billy Joel and Jerry Seinfeld once called home. If elegance and exuberance were at the root of Sirens, then Lloyd Harbor undoubtedly provides the perfect setting for the audience to understand each character and the place they come from.
Yahoo
30-04-2025
- Business
- Yahoo
Fears of the U.S. dollar's decline are overblown, say experts
'The dollar fades as a reserve currency,' warned the headline of a BusinessWeek story, blaming presidential mismanagement for a loss of confidence in the U.S. economy. The story notes how investors around the world no longer want the U.S. dollar, and are moving their cash into German bonds, Japanese yen, and Swiss francs. Based on this account, it's clear the dollar's dominance is over but for one thing: The article is dated 1978 and describes the events of the Carter administration. In reality, of course, the U.S. dollar became stronger than ever, and its position as the world's number one currency remains undisputed—until this April, that is. That's when investors responded to President Donald Trump's 'Liberation Day' tariffs by dumping U.S. assets, and causing the yield on Treasury bills to soar as high as 4.62%, up from 3.87% days earlier. These events have given rise to fears, similar to those expressed in the BusinessWeek article, that the market has lost confidence in the U.S. economy and that the preeminence of the dollar—the backbone of foreign reserves and trade finance—is coming to an end. Not so fast, says Steven Kelly, a scholar of financial stability at Yale University. He says that the recent selloff of U.S. assets is a response to current market conditions rather than the beginning of a global realignment away from the dollar. 'I reject this idea of a new world. It's a trade war, not a financial crisis,' said Kelly. 'The dollar weakening is a totally different thing from its reserve status.' Kelly says there is little evidence to support a narrative that foreign governments are strategically dumping Treasury bills to weaken the dollar. He added that it would not be in their financial interest to do so and that, in any case, there is no obvious alternative: 'The market can't pick a new reserve currency overnight.' Marc Chandler, a managing director at Bannockburn Capital Markets and an authority on forex markets, agreed with this assessment. He pointed to recent data from the Federal Reserve, which acts as a custodian for the Treasury holdings that make up the bulk of most other nations' foreign reserves. According to Chandler, the central bank's holdings of those foreign reserves have actually increased year over year. 'Central banks typically move at glacial speeds. They don't move in a vacuum,' he said, adding that any concerted move to drop the dollar as the world's reserve currency would take place over years, not in the span of a week. All of this suggests the dollar's preeminent status is secure for now. There are still questions, though, about the long-term future of the dollar, as well as what exactly drove the dramatic selloff that caused Treasury yields to spike this month. There's no denying something unusual happened on the night of April 8, following Trump's 'Liberation Day' announcement. The tariff news sparked a mass selloff of U.S. stocks, which is the market's typical response to bad economic news, but investors also began dumping Treasury bills and other bonds as well. In the normal course of things, those investors would be buying Treasury bills as part of a flight to safe assets. The fact investors sold instead gave rise to theories that nation states like China were dumping their holdings as part of a permanent, worldwide shift away from the dollar. The reality is more banal. As a recent Fortune investigation revealed, the events of early April were not the result of a concerted effort by nation states or hedge funds, but a broader desire by the market to reduce exposure to U.S. assets. Chandler, the Bannockburn Capital Markets exec, expressed a similar sentiment, saying the selloff coincided with broader cyclical events that had seen U.S. assets become over-valued compared with those from other regions of the world. The tariff shock didn't help, of course. The 'Liberation Day' announcement didn't only spark a selloff that was likely overdue, but magnified it to a point that it triggered further selloffs. In particular, Chandler points to a meltdown in the highly leveraged basis trade, which revolves around short-term bets on Treasuries, as a primary cause of soaring yields. Yale's Kelly offered a similar assessment, saying the tariff-induced drop in equity prices led hedge funds and other leveraged traders to sell off Treasury bills to meet margin calls. He added that Treasury yields have declined significantly since their April 8 highs, and that their future direction is going to be primarily informed by trends in inflation and interest rates—standard macroeconomic factors in other words. As for the dollar's recent slump against other global currencies, Kelly noted that this reflects an ongoing push by investors to reallocate global equity portfolios, and the poor near-term outlook for the U.S. economy. 'If you zoom out, we are not in extreme territory. If this turns into a true financial crisis, expect appreciation of the dollar,' he said. It has now been a century since the dollar surpassed the U.K. pound as the world's favorite currency and, despite the recent tariff shocks, it faces no obvious challengers. Still, there is only so much shock and unpredictability that investors will tolerate, warns Chandler, who invoked Coca-Cola's ill-fated attempt in 1985 to change its famous formula. 'I do think something serious is happening in the U.S. Compare it to what happened to Coca-Cola when they changed the brand,' said Chandler. 'The potential damage to the U.S. is a long-term branding issue where even a political shift might not be enough to reassure people they can trust the U.S.' This story was originally featured on Sign in to access your portfolio
Malaysian Reserve
29-04-2025
- Business
- Malaysian Reserve
Scale Smarter This Business Week: Monport's Deep Discounts Help Laser Engraving Businesses Beat Rising Tariffs
NEW YORK, April 29, 2025 /PRNewswire/ — As the global market prepares for anticipated tariff hikes and higher import costs in the latter half of 2025, Monport Laser, a leading U.S.-based provider of laser engraving solutions, is urging entrepreneurs and small business owners to take full advantage of Business Week 2025—a rare opportunity to invest, expand, and save big before operational costs rise. As more entrepreneurs explore scalable, low-barrier business models, laser engraving has emerged as a top choice in the small manufacturing, personalization, and craft industries. Monport's Business Week campaign aims to equip these professionals with the powerful tools needed to meet demand and accelerate profitability in 2025. Business Week Promotions – Built for Business Growth During this week-long event, Monport is offering: Up to 30% Off CO2 Laser and Fiber Laser Machines Free Water Chiller for Specific 80- 150W CO2 Laser Purchases Free Rotary Axis + LightBurn Software for Specific 60W-150W CO2 Laser Machines Free Rotary Axis for Specific Fiber Laser Engravers $130 Off Pre-Built Bundle Packages 30% Off All Engraving Materials These promotions are crafted to maximize the startup potential and profitability for small businesses, makerspaces, Etsy sellers, educators, and sign shops looking to expand production capabilities or enter the fast-growing engraving market. Why Now Is the Time to Invest With global supply chain volatility and pending trade policy adjustments, small businesses relying on imported machinery are likely to face higher tariffs and longer lead times by late 2025. Monport's Business Week sale allows customers to lock in current prices, secure their equipment, and prepare for growth—before these external cost pressures impact margins. 'This isn't just a promotional event—it's a strategic moment,' said a Monport CEO. 'Smart entrepreneurs are buying now to protect their bottom line and avoid getting caught in post-summer price spikes or tariff surcharges. Business Week 2025 is about giving them the tools to succeed today and plan confidently for tomorrow.' How Monport's Laser Lineup Empowers Modern Businesses CO2 Laser Machines: The Creative Engine for Makers and Designers Monport's CO2 laser engravers are a cornerstone for creative and small manufacturing businesses, capable of precisely cutting and engraving wood, acrylic, glass, leather, fabric, rubber, and more. These machines are ideal for crafting personalized products, signage, packaging, and décor. Key Benefits for Businesses: High-Speed, High-Precision Cutting: Perfect for producing custom orders at scale. Versatile Material Compatibility: Allows creators to diversify product offerings. Plug-and-Play Operation: User-friendly design reduces the learning curve for new users. With Business Week's promotion, each CO₂ laser purchase includes a FREE water chiller—an essential accessory that ensures optimal temperature control and prolongs the life of the laser tube during extended operation. Users also receive LightBurn software, the industry's most powerful design and control platform, plus a rotary axis to engrave cylindrical items such as tumblers, mugs, and pens. These bundled tools give business owners the ability to produce premium products, charge higher rates, and reach more niche markets. Fiber Laser Machines: Precision for Professionals and Industrial Applications For those targeting metal engraving markets—including jewelry, ID tags, barcodes, tools, and industrial parts—Monport's fiber laser machines offer unmatched speed and accuracy. Benefits for Industrial and Commercial Users: Deep Engraving on Metals: Ideal for stainless steel, brass, aluminum, and gold. Zero Maintenance Fiber Optics: Longer lifespan with minimal upkeep. Compact, Desktop-Friendly Designs: Fits into offices, studios, and workshops. Fiber laser machines also come with a free rotary axis during Business Week, unlocking the ability to engrave on round metal objects—great for producing high-end products like engraved rings, watch casings, and custom metal pens. For professional-grade metal marking operations, Monport's fiber lineup provides the capacity to take on bulk B2B orders or create intricate one-off pieces—making it the ultimate tool for product personalization businesses and industrial service providers alike. Laser Engraving: A Booming Business Opportunity in 2025 From custom tumblers and signage to industrial part marking and personalized gifts, laser engraving continues to be one of the most versatile and in-demand services in the digital manufacturing economy. Industry reports forecast the global laser engraving market to grow steadily through 2030, fueled by demand for personalization, e-commerce, and eco-friendly production techniques. 'The laser engraving business is no longer just a niche—it's a proven revenue stream that's accessible and scalable,' said a Monport CEO. 'With the right laser machine, even a single operator can serve hundreds of clients monthly across industries like retail, education, interior design, and corporate gifting.' Monport's lineup is designed with entrepreneurs in mind, offering commercial-grade quality with a compact footprint, intuitive operation, and competitive price points. With the added value of free software, premium accessories, and material discounts, this Business Week 2025 event represents a pivotal opportunity to launch or expand a laser engraving business. Try Before You Fully Buy – The Monport Mega Advantage A highlight of this year's promotion is the Monport Mega 70W CO2 laser engraver—touted as the world's most intelligent 70W desktop laser engraver. Engineered for professionals seeking exceptional accuracy and reliability, the Monport Mega includes: Enclosed Guide Rail Design – Cleaner cuts, reduced wear, and safer operation High-Precision Vision Recognition – Optimized engraving alignment and material scanning Advanced Air Duct System – Improved smoke and fume management Smart Touchscreen Controls – Streamlined UI for rapid workflow Precision Speed Modulation – Consistent results on all substrates To support new users, Monport offers a 60/40 payment plan: pay just 60% upfront, and finalize the balance after a 30-day trial period. This flexible purchase model reflects Monport's confidence in its product and commitment to empowering growing businesses. Click here to buy Mega 70W CO2 Laser. Supporting the Creative Economy with Tools and Education In addition to state-of-the-art hardware, Monport supports its customers with free technical support, a learning center full of tutorials and business tips, and a vibrant online community of laser entrepreneurs. This ecosystem is a cornerstone of Monport's long-term strategy to uplift creators across sectors—from product designers and educators to small manufacturers and hobbyists. 'As more people seek side hustles and flexible income streams, we're seeing a surge of interest in laser engraving businesses,' said Monport's CEO. 'Business Week is our way of acknowledging these innovators and helping them take their business ideas to the next level—whether they're custom engraving iPhone cases or producing signage for local storefronts.' Where to Buy All promotions are available exclusively at Monport's official sale page. Click here. The event is a limited-time offer, or while supplies last. Customers are encouraged to explore bundled deals and material markdowns, including essential wood, acrylic, leather, and metal-compatible engraving substrates. About Monport Laser Monport Laser is a U.S.-based provider of high-performance CO2 laser and fiber laser engraving machines, trusted by thousands of users across North America and beyond. Known for precision engineering, easy-to-use interfaces, and exceptional value, Monport empowers makers and manufacturers of all sizes to turn ideas into income. The company's extensive product lineup includes entry-level desktop laser engravers, mid-range to high powered laser CO2 models, and industrial fiber lasers built for metal marking. Monport also offers a full catalog of compatible engraving materials, rotary attachments, and productivity software. Media Contact Company: Monport Laser Email: official@ Website:
