Inflation relief checks news summary | 17 November 2022

Another crypto business faces cashflow troubles

Hot on the heels of the drmatic collapse of online exchange FTX, cryptocurrency lender Genesis has reportedly sought an emergency loan of $1 billion from investors. The Wall Street Journal reported on Thursday that it had seen a confidential fundraising document which shows that a cash injection is needed or the company may have to limit withdrawals. 

The document suggests that Genesis is working through a "liquidity crunch due to certain illiquid assets on its balance sheet". 

Biden looks to reinstate Student Loan Forgiveness

The President's plan to introduce widespread student loan forgiveness before the end of the year has been hampered by a series of legal challenges that culminated in two crucial court rulings. Two federal judges have now imposed temporary blocks on the long-awaited program, throwing President Biden's campaign promise into disarray. The White House will be eager to get the program reinstated before repayments are due to resume in Janaury. 

Cryptocurrencies devalued by $183bn after FTX collapse

Since news of FTX's imminent demise first began circulating at the start of this month, the collapse of one of the world's most widely-used cryptocurrency exchanges has been rapid. So complete has been its downfall that it has taken the broader crypto market with it, wiping an estimated $183 billion from the total market cap since the start of the month. 

This has highlighted the instability that, while allowing cryptocurrency investors to make quick money during boom periods, is harming the chance of eventual adoption as a mode of transaction. 

CRYPTOCURRENCY

FTX cryptocurrency exchange files for bankruptcy: what is FTX and what happened?

Why did leading cryptocurrency exchange FTX declare bankruptcy earlier this month? One of the most established trading platforms collapsed in recent weeks, sparking a number of lawsuits and potential criminal investigations into the wrongdoing that may leave millions of investors out of pocket. 

Here's what you need to know about the downfall of FTX...

Is the COLA increase enough to cover inflation?

Each yar the cost-of-living adjustment (COLA) for Social Security beneficiaries is supposed to keep benefits in line with annual price rises. In October the Social Security Administration announced a 40-year high of 8.7% for the 2023 COLA boost, but there is still concern that this may not be enough. 

Senior Citizens League policy analyst Mary Johnson told CNET: "We anticipate an ongoing shortfall in 2023."

​​​​​​​She added: "The rate of inflation has fallen significantly from where it was a year ago, but we're still in a high-inflation period."

The National Council on Aging has also dismissed the 8.7% rise as "insufficient," adding: "Our nation's support programs are not meeting today's realities," 

Major stars indicted in FTX lawsuit

There are many things that united Steph Curry, Tom Brady and Larry David, but in an astonishing turn of events all three (along with a number of other celebrities) find themselves as defendants in a major lawsuit. Floundering cryptocurrency exchange FTX spent big bucks to get celebrity endorsements from major stars but after the company's collapse two investors are suing those involved in the firm in a class-action lawsuit. 

New FTX CEO slams previous board

The collapse of the cryptocurrency exchange FTX has been one of the most dramatic and high-profile cooperate failings of recent years. Not only has the company gone bankrupt but millions of users have been denied access to funds for weeks, with uncertainty spreading to the biggest names in cryptocurrency, the new CEO of FTX has revealed the extent of the company's failings. 

What is the future of cryptocurrency regulation?

Cryptocurrency regulations on the horizon

FTX has entered bankruptcy and is amplifying calls for more regulation of the cryptocurrency market. Billions of dolalrs are invested into these comapnies which have very little oversight from government or regulators.

The collapse of FTX is a danger for other companies with holdings in the now-defunct exchange. Further risks come from a likelihood that other companies may have been as acting as unscrupulous as FTX, if reports are to be believed.

We unionized to fix a lot of problems with a job we really like. It’s frustrating that the company that hired us doesn’t want to work to find a happy medium. … We want to send a strong signal to the company that, ‘Hey, this is not something we’re playing around with anymore.'

Starbuck workers to strike in largest industrial action in company's history

More than 100 Satrbucks stores are facing strikes from workers on one of the company's busiest days.

Leaders of Starbucks Workers United, which represents nearly 7,000 employees at hundreds of stores, say the company has not bargained in good faith and needlessly delayed talks on labor contracts.

How does inflation in the US compare to other large economies?

Annoucned this morning was the British government's budget, setting out government spending for the next six months. It included tax rises and spending cuts in a country already economically devastated and, as announced today, Britain is already in recession.

So far the US has been able to dodge a recession though some believe it could come at the turn of the year. In terms of inflation, the UK is experiencing 11.1% price rises while the US is 7.7%. What is also important is that US inflation is decreasing; the measure in the UK is expected to increase.

Experts concerned over COLA for seniors

Starting in January, the cost-of-living adjustment for Social Security benefits will be 8.7%. That's the biggest increase since 1981, when the COLA hit an all-time high of 11.2%.

But not everyone thinks next year's boost is enough to deal with ongoing inflation: 55% of retirees said the 2023 COLA should have been higher, according to a poll from The Motley Fool. 

They're not alone. Advocates for seniors argue that the Consumer Price Index for Urban Wage Earners and Clerical Workers --  the metric used to calculate the annual adjustment -- isn't an accurate bellwether for their economic needs.

David Avery digs into the detail.

When energy and inflation policies unite

Kristal Hansley knows firsthand how government incentives can lead to economic development. 

The founder of Baltimore-based WeSolar entered the renewable energy industry after years of working in government when the Community Solar Act in Maryland launched the field in 2015. Community solar is different from a solar farm owned by a utility that provides energy to the grid. In contrast, community solar gives people the chance to use renewable energy through buying into a solar farm and using that electricity as part of their normal energy needs.

Now, with the passage of President Joe Biden's Inflation Reduction Act (IRA) in August, local solar providers like Hansley say they expect the industry to kick into overdrive thanks to the new set of incentives and tax breaks. In front of a small crowd at the Emerging Technology Centers in Baltimore earlier this month, U.S. Energy Secretary Jennifer Granholm spoke.

Matt Hooke brings you more.

How US and UK social security compare

Have you ever wondered how the average American worker's social security benefits stack up against other major economies around the world?

As journalist Basit Mahmood shares, you have to go really far down the list to find his focus country of the UK, with the US not too much higher.

The G20 rocking down electric avenue

Electric vehicles (EVs) shuttled G20 delegations and security forces across the southern tip of Bali this week in a symbolic show of Indonesia's ambitious energy transition plans.

But interestingly, virtually none of the cars on display, led by Hyundai's retro-boxy Ioniq 5, would qualify for a new U.S. $7,500 tax credit for North American-built EVs - a sore spot for some leaders and ministers at the just-concluded G20 leaders summit.

Some U.S. allies, notably from Europe and South Korea, used the gathering to make their displeasure known to President Joe Biden and his Treasury Secretary, Janet Yellen, over the restriction of the tax credit for EV purchases to those assembled in North America only.

CRYPTOCURRENCY

Tom Brady, Trevor Lawrence among players sued for FTX crypto collapse

As you may have seen, Sam Bankman-Fried, FTX’s founder who resigned as CEO last week, is dealing with enormous legal headaches.

And yesterday an FTX investor sued Bankman-Fried as well as several celebrity endorsers of his bankrupt crypto company, including Tom Brady, ex-wife Gisele Bundchen and Steph Curry.

“The deceptive FTX platform maintained by the FTX entities was truly a house of cards,” the proposed lawsuit states.

Inflation calm

"It is way too early to conclude that inflation is headed sustainably down."

That was the message coming out of the Fed this week as thoughts turn to slowing rate hikes next month.

Calls for Biden to extend the student loan moratorium

Since the start of the pandemic the federal government has implemented a complete halt on student loan repayments, meaning that borrowers have not had to pay back the loans and their outstanding balance has not accrued interest.

Back in August President Biden announced his Student Loan Forgiveness initiative and confirmed that the loan moratorium would end on 31 December 2022. 

Why are big tech firms laying off staff?

Last week Elon Musk announced a raft of redundancies at Twitter, insisting that the site would no longer be viable without major alterations. That news was followed by confirmation that Amazon would be laying off roughly 10,000 members of permanent staff as part of a similar 'streamlining' process. 

So why are big tech companies feeling the squeeze at the moment and is it a trend that's here to stay? Speaking to Bloomberg, Khosla Ventures Founder Vinod Khosla explains...

Latest News

The deadline to claim the $3,200 stimulus payments: how to apply?

During the pandemic the federal government passed three rounds of stimulus checks, designed to offer direct financial relief to Americans. For those who have not yet filed a 2021 tax return, the deadline to submit one and trigger the support has now passed. 

However if you have already done so your stimulus check payments should be on the way. Here's what we know about those outstanding payments...

Amazon speak out about job cull

We continue to face an unusual and uncertain macroeconomic environment. 

In light of this, we've been working over the last few months to further prioritize what matters most to our customers and the business.

Amazon slashes workforce by 10,000

Yesterday, Amazon confirmed that it had begun layoffs at the e-commerce giant. The company will reportedly shed 10,000 staff this week.  Jobs in device and service teams will be impacted first according to a memo by Dave Limp, senior vice president of devices & services at Amazon.

“After a deep set of reviews, we recently decided to consolidate some teams and programs. One of the consequences of these decisions is that some roles will no longer be required. We notified impacted employees yesterday, and will continue to work closely with each individual to provide support, including assisting in finding new roles,” Limp said.

Welcome to AS USA!

Hello and welcome to our rolling blog in which we'll be bringing you all the latest news and information on inflation, relief payments, Student Loan Forgiveness and more.

Stay with us throughout the day or check in through from time to time. We've got you covered...