🐂 Overpowered

Markets

Retail sales numbers for December indicated a strong shopping trend among Americans. However, this positive news made investors anxious that the Federal Reserve might delay rate cuts, leading to a decline in stocks. Spirit Airlines experienced significant losses for the second consecutive day, with its stock dropping notably. The downturn was attributed to investor reactions following a judge's decision to block JetBlue from acquiring Spirit Airlines, adding to the airline's challenges.

Government

Supreme Court taking over power

Yesterday, the Supreme Court considered two cases with the potential to undermine the authority of federal agencies in regulating various industries, ranging from crypto to pharmaceuticals. Surprisingly, these cases revolve around fishing.

Attorneys representing Atlantic herring fishermen in the Northeast contested a regulation that mandated fishing boats to cover the daily cost of carrying government-required conservation observers, amounting to approximately $700. Despite the apparent simplicity, the program is now obsolete, and the fishermen have already been reimbursed. This has led to speculation that the focus on herrings may be a diversion.

The fishermen's legal representatives, associated with two conservative groups backed by Koch Industries, urged the Supreme Court to overturn the 1984 precedent set by the Chevron v. Natural Resources Defense Council case. This precedent, known as the Chevron doctrine, holds that in cases of unclear federal laws, judges should defer to the interpretation provided by a federal agency with expertise, as long as it is deemed reasonable. This has granted significant interpretive power to agencies like the SEC, EPA, and various government departments.

If Chevron is overturned, it could reshape the power dynamics within the government. Solicitor General Elizabeth Prelogar cautioned that such a reversal would send a "convulsive shock to the legal system." Some conservative Justices, including Clarence Thomas, Samuel Alito, Neil Gorsuch, and Brett Kavanaugh, have criticized Chevron for granting excessive power to bureaucrats.

A ruling favoring the fishermen could severely limit the authority of hundreds of federal agencies responsible for setting rules in areas such as public health, workplace safety, and consumer protections. This potential shift could particularly impact evolving industries, such as finance and trade regulators overseeing crypto and AI. Without the Chevron doctrine, the interpretation of laws would rely more on the courts, a process known for its costliness and time-consuming nature

Politics

The Biden admin wants overdraft fees cut to as little as $3

Yesterday, the Consumer Financial Protection Bureau (CFPB) introduced new regulations aiming to limit the fees imposed by banks on customers attempting to spend beyond their account balance. The proposed upper limits for these fees are set at $3, $6, $7, or $14, and the CFPB is actively seeking public input to determine the appropriate amounts. Predictably, banks, accustomed to charging $35 per overdraft and facing the potential loss of billions in annual revenue if these regulations are implemented, are anticipated to strongly oppose these measures.

World

Iran says it’s not backing down

Tensions persist in the Middle East, and Iran's foreign minister asserted yesterday that groups backed by Iran will continue launching attacks as long as the Israel-Hamas conflict endures. This statement followed the US's decision to reclassify the Iran-supported Houthis, responsible for Red Sea ship attacks, as global terrorists. Additionally, Iran launched missiles at targets in Pakistan, Iraq, and Syria this week.

International

China’s population is falling faster than a plummeting elevator

The Chinese government, akin to concerned relatives, is eager to witness an increase in baby showers. The country's overall population experienced a second consecutive annual decline in 2023, primarily attributed to the seventh consecutive yearly drop in the number of births, as announced by China's National Bureau of Statistics.

Last year, China's population decreased by 2.1 million, reaching 1.4 billion. The decline was influenced in part by a surge in Covid cases, leading to a 6.6% increase in the death rate to 11.1 million people, surpassing the 5.7% decrease in the birthrate to 9.02 million.

Recognizing the concerning trend, China, which abandoned its decades-long one-child policy in 2016, has shifted its messaging to encourage childbirth. Even President Xi Jinping has urged young women to have children. However, challenges persist:

• Young people, facing escalating housing and education costs, are hesitant to start families.

• Some women, in particular, are choosing to forgo marriage and motherhood, citing concerns about the legal system's inadequacy in protecting their property, financial freedom, and personal safety.

In a broader context, numerous high-income countries are grappling with declining birthrates. France, for instance, recently announced improvements to parental leave after experiencing its lowest birthrate since World War II. Reversing these trends poses significant challenges and costs for governments, even for marginal changes in birthrates.

Tech

Its too cold for the EV’s to survive

While you were busy asking your mom about your old snow pants, electric vehicle owners faced challenges navigating town during the polar vortex.

In Chicago, where the wind chill plummeted to as low as -25 degrees Fahrenheit this week, Tesla owners encountered significant difficulties in charging their vehicles. Some individuals were compelled to abandon their non-functional cars, resulting in charging stations humorously dubbed "Tesla graveyards." Drivers reported enduring lengthy queues to charge their EVs and spending even more time waiting for their Teslas to complete charging due to the extended process in lower temperatures.

Why the struggle? Similar to the Miami Dolphins, electric vehicles don't handle cold weather well. While gas-powered cars are also affected, the impact is more pronounced with EVs because they can't be quickly refueled. Freezing temperatures can slash EV battery life by up to half, as noted by AAA. Additionally, using the heater further drains the battery.

On the flip side, in Norway, where one in four cars is electric, and winter temperatures remain below freezing, this isn't a significant issue. Scandinavians are well-prepared, with better charging infrastructure and drivers adept at "preconditioning" or warming up their cars before charging, ensuring a more efficient process.

And as for Cybertrucks, not only do they require charging, but Tesla's new electric pickup trucks also seem to have a penchant for getting stuck in the snow.

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