Greetings from New York City, where it now appears impossible to buy a submersible water pump to drain a flooded basement after last week’s freak flash flooding. Take note, climate change entrepreneurs! Business opportunities would rise if New York City regulates illegal basement apartments, in which dozens of people have died in similar, recent downpours.
The big surprise: The US narrowly averted a disruptive and costly shutdown as Congress passed legislation to keep the government running until Nov. 17. The legislation, passed in both chambers Saturday just hours before a midnight deadline, buys Democrats and Republicans time to negotiate longer-term federal funding. It doesn’t include new funding for Ukraine, though assistance may be supplied in separate legislation. President Joe Biden signed the bill late Saturday night.The big if: Kevin McCarthy’s embrace of a bipartisan deal has triggered a mutiny by far-right Republicans to depose him as House speaker. Florida Republican Matt Gaetz said Sunday he will file a motion to vacate the chair this week, seizing on a parliamentary process that hasn’t resulted in a speaker removal vote since 1910.
The big shift: Policymakers from Washington to Frankfurt head into the final quarter of 2023 with tentative grounds for optimism that their fight against inflation is making progress. A report on Friday showed the Fed’s preferred measure of underlying price growth has risen the least since 2020.
The big pullback: The US consumer is starting to buckle as rising gas prices crimp spending and the delinquency rate on credit cards reaches the highest level in more than a decade. And that’s before student loan payments restart in October. “Consumer debt quality is declining, signaling potential risks in certain credit market areas,” Moody’s Investors Service said in a report last week.
The big fix: Apple said that recent claims of new iPhones getting too hot to the touch are the result of a software-related bug and that fixes are coming soon. The company said the device can get warm in the first few days as the device works overtime to get set up and restore a user’s data, due to a bug in the latest iOS 17 software, and because of some third-party apps overloading the system. Two of the apps causing the most problems, Apple says: Instagram and Uber. Two big trials: Donald Trump is planning to attend the Monday opening of New York state’s civil trial accusing him of inflating his net worth by billions of dollars in financial transactions. The crypto fraud trial against FTX founder Sam Bankman-Fried is set to begin next week in a Manhattan federal courtroom. He lost yet another bid to be released from a Brooklyn federal jail last week.
A big difference: There’s an important distinction between the current housing crisis in China and past housing crises elsewhere, which is guiding policymakers’ response to it: The developers are the ones who are over-leveraged, not the households, according to Rayliant Global Advisors’ Jason Hsu. He joined the What Goes Up podcast to discuss the state of the property market as well as the consumer in China.
The big bummer: Even if inflation is leveling off generally, brace yourself for an exception: Chocolate risks becoming even more expensive if West Africa’s new cocoa harvest ends in disappointment. Cocoa prices have soared about 47% in the past year on fears that bad weather and crop disease will hurt output in Ivory Coast and Ghana, which make up two-thirds of world supply. An El Nino weather phenomenon could make matters worse.
We’ll be back next Sunday morning. Meantime, enjoy what’s left of the weekend.