Wall Street CEOs stare down recession with upbeat outlook
Wall Street's two most outspoken CEOs said the U.S. is more than prepared to withstand an economic downturn.
JPMorgan Chase Chief Executive Officer Jamie Dimon and his Morgan Stanley counterpart, James Gorman, both said Thursday that they aren't steering their companies toward shelter even as they see a confluence of global events denting the economy in the months ahead.
“The consumer right now is in great shape,” Dimon said on a conference call discussing his company's second-quarter results. “So even if we go into a recession, they're entering that recession with less leverage and in far better shape than they did in '08 and '09.”
Gorman, on his bank's earnings call, said a deep or dramatic recession in the U.S. is unlikely, and Morgan Stanley is “long the U.S.” in most of its businesses. “The U.S. is a great region to be in the world.”
Those verdicts come even as secondquarter results at both JPMorgan and Morgan Stanley were hurt by a slowdown from the pandemic-era bonanza that gave them record revenue and profits.
Risks abound, with soaring inflation spurring central banks around the world to dial back the easy-money policies that had pushed markets to all-time highs. Russia's invasion of Ukraine, along with worries about food and energy security as well as political instability across regions, are also keeping investors on edge.
“If I had to use one word to describe it, it would be `complicated,' ” Gorman said on the challenges facing the global economy. He said that “Europe is fighting the hardest,” with the dual threat of the war in Ukraine and pressure on gas prices that's been particularly problematic for countries such as Germany.
Dimon, meanwhile, said his previous forecast for a looming economic “hurricane” hasn't changed, but that health of the American consumer offers a possible break in the clouds.
Solid economy can handle rising rates, Fed president says
The U.S. economy is healthy and shows little sign of an imminent recession, and can withstand higher interest rates, St.
Bottom line
Louis Federal Reserve President James Bullard said Monday.
Financial markets are flashing signs that an economic downturn could arrive sometime next year, as Americans grapple with the highest inflation in four decades and the Federal Reserve pushes borrowing costs higher. But Bullard said in an interview with The Associated Press that the central bank wouldn't have to drive the economy into a recession or significantly raise unemployment to bring inflation down to its 2% target.
“Now we have lots of inflation, but the question is, can we get (inflation) back to 2% without disrupting the economy? I think we can,” he said.
Mexico agrees to invest $1.5B in `smart' border technology
Mexican President Andrés Manuel López Obrador agreed to spend $1.5 billion to improve “smart” border technology during meetings Tuesday with President Joe Biden — a move the White House says shows neighborly cooperation succeeding where Donald Trump administration vows to wall off the border and have Mexico pay for it could not.
A person familiar with a series of agreements the two countries hammered out as their leaders met in Washington said they also called for other things like expanding the number of work visas the U.S. issues and welcoming more refugees. They also would continue joint patrols for Mexico and Guatemala to hunt human smugglers along their shared border.
The agreements came hours after the meetings began with López Obrador offering more than half an hour's worth of comments. He touched on everything from Americans heading south for cheaper prices at the pump at Mexican gas stations to the New Deal politics of Franklin Delano Roosevelt, while chiding conservatives and saying the U.S. and Mexico should reject the “status quo” on the border.
López Obrador said both countries “should close ranks to help each other” amid spiking inflation and border challenges brutally underscored by 53 migrants who died last month after being abandoned in a sweltering tractor-trailer on a remote back road in San Antonio.
So why does California have this odd migration wage gap?
Coronavirus concerns nudged people to move away from densely populated places — and the Golden State has numerous, crowded metropolitan areas.
The widespread availability of remote work motivated moves out of California. And flexible office jobs — a big slice of California's tech-savvy employment — tend to have higher wages.
Still, California did draw 412,714 new filers and dependents in 2020 — the third-largest inflow. But as a share of all Californians, the new blood was just 1.3% of all taxpayers — dead last in the union. The state's inability to attract other Americans is a big slice of California's population-growth challenge.
So what places did the best in 2020 at gaining new residents from other states?
The largest share of new residents was found in Washington, D.C., at 7.8% of its taxpaying population, followed by Idaho at 5.5%, Nevada at 5.2%, Wyoming at 5.1% and Delaware at 4.7%. In a year highlighted by keeping your distance from others, note that Idaho, Nevada and Wyoming are among the nine most sparsely populated states. Also, Nevada and Wyoming have no state income taxes.
As for California's main economic rivals, both with no state income taxes, Florida's attraction rate was No. 16 at 3.7%; Texas was No. 38 at 2.4%.
The big caveat to these relocation trends was the many oddities of the first year of the pandemic. Will these trends stay, speed up or reverse themselves?
“That's the leading deterrent,” he said. “And there's more money involved when you get into all of the infrastructure costs.”
Founded in 2018, Zeem already has contracted with several Southern California companies, including Starline Tours. Starline operates double-decker buses that take visitors to tourist spots along with other vehicles that ferry them past the homes of Hollywood celebrities.
Starline Chairman Kami Farhadi said the company gradually is transitioning its fleet of gas-powered vehicles to EVs. Starline operated nearly 120 vehicles before the COVID-19 pandemic but reduced its fleet as business fell off during the outbreak.
The company still has 100 vehicles on hand, although only 30 are currently in operation.
“This will be a very positive step for us and for the future of the environment,” Farhadi said. He didn't indicate how many EVs the company ultimately plans to have on hand.
An LAX-based depot
Zeem also launched an LAX-based depot, which includes nearly 100 commercial, electric vehicles, 77 fast-charging ports and 53 Level 2 chargers. At full capacity, it will be the largest private, commercial EV charging facility in the U.S., the company said.
The company also offers “opportunity charging,” which allows businesses not directly contracted with Zeem to charges their EVs at Zeem charging stations
Much of Zeem's expansion will be fueled by its partnership with LAZ Parking Realty Investors, a division of LAZ Parking, which operates more than 3,500 parking facilities in 39 states.
The partnership will allow Zeem to co-develop new charging and service depot locations as part of an aggressive growth strategy. The charging stations and depots will be located in existing LAZ parking structures or in new add-on facilities.
Through the partnership,
LPRI will become an equity partner in Zeem.
“As an expert in commercial infrastructure, we provide a critical component to help scale Zeem Solutions' model nationwide,” said Alan Lazowski, chairman and CEO of LAZ Parking.
Zeem deals with electric vehicle manufacturers throughout China and Europe, which supply the EVs Zeem provides to its business customers.
“We buy the vehicles and let our customers test drive them,” Gioupis said. “Once they lease them they are parked in secure areas and we do all of the cleaning at night. We do everything from A to Z.”
The company, staffed by 30 employees, has plans for more California locations in Orange County and the Bay Area and will be hiring as it continues to expand.
Hard to reach
People who don't pay taxes and aren't in a benefits program run by California are hard for the state to reach quickly with aid. Social security benefits are administered by the federal government, and the state doesn't have data on recipients, said Jesse Rothenstein, a professor of public policy and economics at UC Berkeley and faculty director of the California Policy Lab.
“It's obviously not great that we're missing people, and many of them are some of the most vulnerable people in the economy,” Rothenstein said. But, he said, “It's not as if there's a mechanism available that reaches everybody.” Given a set of imperfect options, using the tax system was the best choice, Rothenstein said.
It's also the choice lawmakers made when distributing two rounds of Golden State Stimulus payments in 2021. After that move, they faced criticism from disability advocates and seniors who were left out.
“To see that they have done it again this year is just further proof that nobody's paying attention to people who need the most help,” said Charis Hill, a disability advocate who lives in Sacramento.
California's government doesn't know much about the people who don't file taxes. The Franchise Tax Board doesn't track the number of residents who aren't required to file taxes, or what share of those people live in poverty, according to statements in response to CalMatters' questions. A spokesperson for the board said that no state agencies appear to track that information.
The difficulty of reaching people with this payment exposes a weakness in the state's system “that needs to be addressed on a longer-term basis,” said Chris Hoene, executive director of the California Budget and Policy Center, which advocates for targeting aid to lower-income people. Part of the solution would be better data sharing between the federal government and the states, he said.
But given the options policymakers were considering — including giving money to car owners, as Gov. Newsom hs proposed, and cutting the gas tax — he believes that the payments based on income are a good outcome.
Weber, the San Diego retiree who missed out on both Golden State Stimulus payments and also won't receive the rebate this year, is frustrated.
“I feel like I'm shoveling doo-doo against the tide here,” he said.