WELCOME BACK TO ST. PADDY’S CELEBRATIONS & NATION INFLATION
Welcome back to a new edition of The Weekender… where two large banks in the western United States collapsed after a bank run. Also, Americans are growing nostalgic for prices before inflation. Plus, U.S. President Joe Biden proposes a national limit for “forever chemicals” in American waterways. There’s a lot to discuss and more to learn below in the latest edition of The Weekender.
P.S. Strategic Elements is proud to announce Hillary Maxwell Beightel has been named Senior Vice President of Strategic Communications. Hillary specializes in creating and executing campaigns incorporating innovative communications and public affairs strategies and targeting specific audiences across platforms with the right message at optimized times. Her ability to seamlessly tie her diligent landscape understanding, strategic plans, and thoughtful execution has solidified her role as an invaluable asset to the Strategic Elements team and our clients.
Bank Failure is the Cherry on Top of the Inflation Sundae
Bank Failure is the Cherry on Top of the Inflation Sundae
The U.S. economy is currently a living testament to Murphy’s Law: anything that can go wrong will go wrong. As inflation and a looming recession plague Americans, two large banks in the western United States collapsed with blurring speed after bank runs. Silicon Valley Bank (SVB) collapsed as start-ups, and tech-centric companies began withdrawing deposits at an accelerated rate, forcing the bank to sell a massive chunk of its long-term bonds at a significant loss. As word spread and withdrawals grew exponentially, Silicon Valley Bank became insolvent and was shut down by the feds. This marked the largest bank failure since the economic collapse caused by the 2008 financial crisis. The Biden Administration was forced to backstop the financial system to protect depositors by ensuring customers will be made whole beyond the $250,000 covered under federal law. While this move explicitly protects those investing in Silicon Valley Bank, it relieves individuals’ and companies’ fears to quell the potential for nationwide bank runs. Despite the feds immediate action, Wall Street is on edge, given regulators seized both the Silicon Valley Bank and the Signature Bank after the devastating runs. For those considering making a quick stop at their bank to pull out their deposits, one piece of advice: don’t. If you have less than $250,000 in your FDIC-insured U.S. bank, you can be assured that you are insured/ensured to receive every penny of that if the bank collapses. If you have a joint account, that number doubles to $500,000. Read more at The Associated Press.
Nostalgia for the Prices of Yesteryear Growing Alongside Inflation
Inflation has been hurting American families in the grocery store, at the pump, and in virtually every spending category for nearly two years. Long enough that consumers are forming a genuine nostalgia for pre-inflation prices. As prices for everything from avocados to gasoline to rent rise, paying more for goods and services leads to headaches for families already struggling to keep their heads above water. When we think of “price nostalgia,” we tend to think of older generations remembering the cost of movie tickets, houses, and Big Macs from decades ago (I remember when you could get a Coke and a Hershey Bar for $.50!). Now, people are reminiscing about the prices from just two years ago. It is unsurprising as the consumer price index now sits at 6% compared to 1.7% in February 2021. Although more Americans rely on credit cards and struggle to make ends meet, a resilient labor market is keeping many people afloat with lower-value, disposable income. As the Federal Reserve deliberates whether to raise rates to alleviate the pain caused by inflation, experts fear a recession in future quarters (though this will-it-won’t-it recession talk has already been dragging on for nearly a year). For now, it appears that American families are caught between a rock and a hard place with inflation and impending recession at our doorstep. Read more at The Wall Street Journal.
EPA Not Waiting Forever to Fight Forever Chemicals
This past week, the Biden Administration put forth the first nationwide limit on “forever chemicals,” which have become increasingly prevalent in the United States’ drinking water supplies. If passed, the Environmental Protection Agency (EPA) proposal would require drinking water facilities to limit their quantity of certain chemicals to four parts-per-trillion. Known as per-and polyfluoroalkyl substances (PFAS), these forever chemicals earned the moniker of “forever chemicals” because they sustain themselves in both the environment and human body. These tasteless chemicals are found in 83% of domestic waterways and in the blood of 97% of Americans, and are known to cause kidney and testicular cancers, thyroid issues, and fertility problems. The New York Times reports that as many as 200 million Americans have been exposed to the chemicals through their drinking water. These substances do not break down into component parts and therefore seep into the soil, eventually finding their way into our food supply. It has also been discovered in toilet paper and turf. Google the city where you live and the words “forever chemicals,” and you will likely see incidents and traces reported in your local drinking water. As it stands, it is unclear in what exact quantity Americans on average are ingesting these chemicals, when it will start to impact each person, and how severely. Environmentalist Erin Brockovich (yes, that Erin Brockovich) is hoping to change that by launching a website that details citizen reports of forever chemicals throughout the United States. Last year, the EPA determined there is no safe level at which a human being can ingest these chemicals; therefore, it intends to reduce the legal threshold for drinking water to four parts-per-trillion from its current 70 parts-per-trillion (by way of comparison, lead must be less than 15,000 parts-per-trillion). If the EPA continues with their proposal, municipalities and water utility providers will face fines and citations if test results do not show a reduction in these chemicals. Read more at The Hill.
ChatGPT Causing Chatter
Step aside Bing, there’s a new search engine in town. The new artificial intelligence (AI) chatbot, ChatGPT, has already surpassed Bing in website traffic. The OpenAI website was accessed 306.5 million times between February 22 and 28, overtaking Bing, which received 291.9 million visits during the same period. ChatGPT may have moved ahead of Bing in website traffic, but they have now joined forces. In January, Microsoft announced it was extending its partnership with OpenAI and would incorporate its technology into Bing. People make 10 billion search queries a day but around half go unanswered because the search tool is used to do things it wasn’t designed to do—leading Microsoft to incorporate AI chatbots into its search engine. If ChatGPT hasn’t already made a big splash, becoming a worldwide sensation, the highly anticipated GPT-4 will take the cake. On Tuesday, OpenAI launched the newest version of its language software, an advanced tool for analyzing and mimicking human speech. GPT-4 is a state-of-the-art system capable of creating words and describing images in response to a person’s simple written commands. The public had a sneak preview of the tool as Microsoft announced that the Bing AI chatbot had been using GPT-4 all along. From the looks of it, ChatGPT and Microsoft are making a pretty good team. Read more at Newsweek.
Cue “The Office” Theme Song
High-profile companies like Meta and Amazon are calling staff back to the office, marking a new standard for remote work in the tech industry. The return orders come as U.S. office occupancy this year passes 50% for the first time since the start of the pandemic. Some executives (such as JPMorgan Chase & Co.’s Jamie Dimon) believe productivity increases when workers in their industry are in the office together, while others say it helps to increase in-person collaboration. Companies with 2022 in-office work mandates, like Goldman Sachs Group, Morgan Stanley, and Apple, have influenced other businesses to follow suit. Companies that aren’t requiring their staff to report back in the office to work have tried rebranding their efforts to get employees to show up in person. In a recent survey of 1,000 business leaders by ResumeBuilder.com, 66% of employers currently require employees to work from the office, and 90% of these companies will look to require employees to return to the office in 2023. Our advice, work hard wherever you are. Read more at Bloomberg.
INTERNATIONAL SPOTLIGHT
The U.S. Government’s Cybersecurity Strategy
The White House released the new U.S. National Cybersecurity Strategy, which outlines steps the government is taking to secure cyberspace and build a resilient digital ecosystem against terrorists and hackers worldwide. The strategy is part of a larger effort by the Biden Administration to strengthen cyber and technology governance. With cyber threats growing more sophisticated and cyber insecurity reported as the eighth biggest risk in terms of severity of impact, the United States needed to take action. In 2022, the average ransomware attack was reported to cost more than $4.5 million, and state-sponsored cyberattacks targeting users in NATO countries increased by 300% compared to 2020. The COVID-19 pandemic accelerated the world’s digital transformation, forcing more people to rely more on digital technology and putting livelihoods at risk from cyber threats. The U.S. National Security Strategy recognizes the need to rebalance responsibility onto public and private organizations to defend cyberspace and build resilience by balancing the need to address immediate threats. In the new cybersecurity strategy, there are five pillars:
- Defend critical infrastructure
- Disrupt and dismantle threat actors
- Shape market forces to drive security and resilience
- Invest in a resilient future
- Forge international partnerships to pursue shared goals
These are goals for the federal government to hold countries accountable for irresponsible behavior in cyberspace and to disrupt the criminals behind cyber-attacks. The hope is that these tools will help protect national security, public safety, and economic prosperity while helping rebuild America’s technological infrastructure. Read more at the World Economic Forum.
DATA POINTS
- $161.1 billion: The net income that Saudi Aramco reported in 2022, up 46.5% from the previous year. This amount is the largest annual profit ever achieved by an oil and gas company.
- 50%: The percentage that the Instant Pot dropped in sales last year to $344 million. The company’s troubles show how hard it can be for a business to grow sales on the back of one big hit product.
- 7: The number of Oscar’s that the movie Everything Everywhere All at Once won last Sunday. The award-winner took home the titles Best Picture, Best Actress, Best Supporting Actor, and Best Supporting Actress.
- $6.1 million: The amount the jury awarded the parents of a Louisiana State University student who died in an alcohol-related hazing incident. Maxwell “Max” Gruver died in 2017 at 18 years old while pledging a fraternity.
- $10 billion: The amount of money reported to the Federal Bureau of Investigation as lost to online scams in 2022. It marks the highest annual loss in the last five years, largely driven by a surge in cryptocurrency investment fraud.
- 10,000: The number of employees Meta plans to lay off, just four months after the company laid off 11,000 staff members. In addition to the 10,000 jobs cut, 5,000 vacancies at the firm will be left unfilled. There have been more than 128,000 job cuts in the tech industry so far in 2023.
- 8: The number of people who died after two migrant smuggling boats capsized off the coast of San Diego over the weekend. Officials reportedly estimated 23 people were on the boats. The Southern California coastal region has seen a 77% increase in human trafficking since 2017.
- 30 minutes: The amount of time people lose in sleep each night following Daylight Saving Time. The sleep loss brought on by the transition to daylight saving time has been associated with increases in the prevalence of stroke or heart attack in the days following the springtime change.
FEATURED TWEET
When will spring 🍃 come where you live? Or has it already?
For my Climate Lab column, I made a tool that lets you look up any place in the contiguous U.S. and find out if leaves came earlier or later than usual.
Check it out: https://t.co/Y0Xy6knWAp pic.twitter.com/6rezruKVg5
— Harry Stevens (@Harry_Stevens) March 15, 2023
