Good morning.
Sunday in Whitewater will be partly sunny with a high of seventy-nine. Sunrise is 5:44 AM and sunset 8:18 PM, for 14h 34m 19s of daytime. The moon is a waning gibbous, with 97.4% of its visible disk illuminated.
On this day in 1958, Pres. Eisenhower establishes NASA:
On July 29, 1958, Eisenhower signed the National Aeronautics and Space Act, establishing NASA. When it began operations on October 1, 1958, NASA absorbed the 43-year-old NACA intact; its 8,000 employees, an annual budget of US$100 million, three major research laboratories (Langley Aeronautical Laboratory, Ames Aeronautical Laboratory, and Lewis Flight Propulsion Laboratory) and two small test facilities.[20] A NASA seal was approved by President Eisenhower in 1959.[21] Elements of the Army Ballistic Missile Agency and the United States Naval Research Laboratory were incorporated into NASA. A significant contributor to NASA’s entry into the Space Race with the Soviet Union was the technology from the German rocket program led by Wernher von Braun, who was now working for the Army Ballistic Missile Agency (ABMA), which in turn incorporated the technology of American scientist Robert Goddard’s earlier works.[22] Earlier research efforts within the US Air Force[20] and many of ARPA’s early space programs were also transferred to NASA.[23] In December 1958, NASA gained control of the Jet Propulsion Laboratory, a contractor facility operated by the California Institute of Technology.[20]
Recommended for reading in full —
This is the Cost of President Trump’s ‘America first’ policy:This is the cost of President Trump’s ‘America first’ policy from CNBC.
(Trump’s America First is America Poorer.)
Prof. Walter E. Block writes Trump’s Fake Fix for a Bad Economic Policy (“Using tax dollars to bail out farmers hurt by President Trump’s tariffs is not the way to strengthen the economy”):Rachel Siegel and Hamza Shaban report Top American brands say the trade war is now eating into their profits:What is driving the president’s apparent eagerness to impose tariffs is a simple and wrongheaded idea that plays to a large part of his base: A trade war will spur job growth in America. He is trying to use tariffs to give a leg up to American industries against countries that manufacture the same products that we do — whether steel, aluminum or cars — but more efficiently. And who could be against that if it creates more jobs?
In reality, however, creating jobs alone does not make for a strong economy. What we really want is to increase production. And to achieve that, we need to allocate labor as efficiently as possible. One way to do that is to ensure that if other countries can make certain goods more efficiently than we can, we trade with them for these items, rather than manufacture them ourselves. The result is cheaper goods, which is to our advantage.
But tariffs do nothing to improve this efficient allocation of labor. They also do not increase or decrease employment. They just shift jobs around, and almost always in a manner that hurts the economy.
As an illustration, assume Mr. Trump is the governor of New York. He is devoted to making the Empire State “great again.” Right now, both New Yorkers and Iowans raise pigs — but Iowa produces far more than New York. So Governor Trump sets up a protective tariff against the importation of Iowa-raised pork. Will this make New York great again?
Hardly. There is a very good reason the Empire State does not produce a huge amount of this product: economic efficiency, the true path toward economic greatness. Of course, pork product jobs will increase in New York thanks to the Trump tariffs. But this is the way to ruin the state’s economy.
Prof. Steven Pearlstein writes The junk debt that tanked the economy? It’s back in a big way.Rebecca Lindland, an analyst at Kelley Blue Book, said the pressure of tariffs has been weighing on automakers for so long that manufacturers wonder whether this is their new reality. But the industry is not nimble. Carmakers operate on a massive scale, with multiyear commitments to assembly plants and suppliers. According to Lindland, swiftly navigating the whims of the Trump administration won’t be easy.
“Trump will sometimes talk about pain in the short term and gains in the long term,” she said. “But the short term is years, and that pain could lead to very bad consequences, because you’re undermining profitability.”
Higher prices may also trigger challenges for consumers. Most car owners max out the amount of money they can borrow to buy a vehicle, Lindland said. But more expensive cars may lead to extended repayment periods, meaning people will owe more on their vehicles than what they are worth, for longer periods of time. In turn, this may delay or prevent new car purchases, she said.
Behold Ethiopia’s Chapel in the Sky:Like most people, you probably assume that the level of lending done by banks at any moment is largely driven by how much demand there is from borrowers. But in the world of modern finance, that’s only part of the story. For just as important is the level of demand from investors — pension funds, hedge funds, mutual funds, sovereign wealth funds and insurance companies — to buy the loans that banks make. Indeed, there are times when there’s so much demand for loans from investors and the profit from selling them is so lucrative that bankers are only too happy to go out and make bigger and riskier loans than they would if they were keeping them on their own books.
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It is through such alchemy that the wizards of structured finance are able to take a package of $400 million of loans rated at BBB- or below (junk) and generate $240 million worth of AAA-rated securities, along with $160 million of lower-rated instruments — a tranche to satisfy every risk appetite.
Although financial regulators have taken passing notice of the increased volume and declining quality of corporate credit, they haven’t done much to discourage it — just the opposite, in fact.
Earlier this year, after complaints from banks and dealmakers reached sympathetic ears in the Trump administration, the newly installed chairman of the Federal Reserve and the Comptroller of the Currency Office declared that previous “guidance” against lending to companies whose debt exceeded six times their annual cash flow should not be taken as a hard and fast rule.