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Trump to Waive Interest on Federal Student Loans ‘Until Further Notice’

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President Donald Trump on Friday said that he wouldeliminate the intereston federal student loans “until further notice” as part of a package of emergency executive actions designed to address the economic fallout from the coronavirus pandemic. Politico reports:

The unprecedented move will provide relief to the more than 42 million Americans who owe more than $1.5 trillion in outstanding federal student loans…

It’s not clear how much money the interest waiver will save borrowers, but it could be billions of dollars, depending on how long the Trump administration keeps the policy in place. In fiscal 2019 alone, the Education Department reported that it charged more than $100 billion in interest on all federal student loans…

The Education Department on Friday was still determining the mechanics of how to carry out Trump’s announcement.

Wuhan Coronavirus Could Financially Cripple Many Americans

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Americans’ health may not be the only thing at stake as the coronavirus continues its unrelenting spread in the U.S. The virus could also prove financially crippling for many individuals. Uninsured patients could expect to pay at least $500-$1,000 just to get tested for the virus, and a 10-day hospital stay could amount to a bill of at least $75,000, according to one expert. CNBC reports:

One of the most acute financial strains for Americans if they get the coronavirus will be related to cash flow — the loss of a paycheck for those who can’t go to work or dramatic reductions in revenue for business owners whose foot traffic evaporates, according to experts.

The U.S. is one of the only developed countries that doesn’t require workers to get paid time off when they’re sick…

Further, 54% of Americans report not being financially prepared to manage a contagious disease outbreak that furloughs them for several weeks, according to Prudential Financial.

The Rich Are Preparing for Coronavirus Differently

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The new coronavirus knows no national borders or social boundaries. That doesn’t mean that social boundaries don’t exist. The New York Times reports:

“En route to Paris,” Gwyneth Paltrow wrote on Instagram last week, beneath a shot of herself on an airplane heading to Paris Fashion Week and wearing a black face mask. “I’ve already been in this movie,” she added, referring to her role in the 2011 disease thriller “Contagion.” “Stay safe.”

Business executives are ditching first class for private planes. Jet-setters are redirecting their travel plans to more insular destinations. And wealthy clients are consulting with concierge doctors and other V.I.P. health care services. Why spend $3.79 on a bottle of hand sanitizer from Target when Byredo, a European luxury brand, makes one with floral notes of pear and bergamot for $35 (although that, too, is sold out)?…

At a time when every stray cough from three rows back sounds like a ghostly greeting from Typhoid Mary, those who can afford it are paying extra to sidestep crowded security lines and jampacked planes and flying private — which might be an attractive option for those who wish to flee the teeming cities for, say, a safe house in Telluride, Colo. Some wealthy people say they have been staying in their Hamptons homes and are prepared to jet off to cabins in Idaho if things get worse. And The Guardian reported that executives have chartered jets for “evacuation flights” out of China and other affected areas. For some private jet companies, fear equals opportunity. Southern Jet, a charter jet company in Boca Raton, Fla., recently sent out a limited test marketing email with the tag line: “Avoid coronavirus by flying private … Request a quote today!”…

In certain pockets of Silicon Valley, where tech-elite survivalists drool over abandoned missile silos that were converted into luxury bunkers, coronavirus is precisely the doomsday scenario they’ve been preparing for. Marvin Liao, a partner at the venture capital firm 500 Startups, has been stocking up on canned food, water, hand sanitizer and toilet paper in anticipation of an outbreak, and has lately been scoping out a high-end air purifier called Molekule Air, which costs $799. “I don’t know if you’re ever ready for this,” Mr. Liao said of coronavirus. “But I think that you’re probably better prepared than a lot of people, because at least you’ve thought about it and at least you’ve stocked up. Worse comes to worse you’ll have a lot more cushion than a lot more people out there.”

Preparing for Coronavirus to Strike the U.S.

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Preparing for the almost inevitable global spread of this virus, now dubbed COVID-19, is one of the most pro-social, altruistic things you can do in response to potential disruptions of this kind. Zeynep Tufekci writes for Scientific American:

We should prepare, not because we may feel personally at risk, but so that we can help lessen the risk for everyone. We should prepare not because we are facing a doomsday scenario out of our control, but because we can alter every aspect of this risk we face as a society.

That’s right, you should prepare because your neighbors need you to prepare—especially your elderly neighbors, your neighbors who work at hospitals, your neighbors with chronic illnesses, and your neighbors who may not have the means or the time to prepare because of lack of resources or time.

Prepper and survivalist subcultures are often associated with doomsday scenarios and extreme steps: people stocking and hoarding supplies, building bunkers and preparing to go off the grid so that they may survive some untold catastrophe, brandishish weapons to guard their compound while their less prepared neighbors perish. All this appears both extreme and selfish, and, to be honest, a little nutty—just check the title of the TV series devoted to the subculture: Doomsday Preppers, implying, well, a doomsday and the few prepared individuals surviving in a war-of-all-against-all world.

It also feels like a scam: there is no shortage of snake oil sellers who hope stoking such fears will make people buy more supplies: years’ worth of ready-to-eat meals, bunker materials and a lot more stuff in various shades of camo. (The more camo the more doomsday feels, I guess!)

The reality is that there is little point “preparing“ for the most catastrophic scenarios some of these people envision. As a species, we live and die by our social world and our extensive infrastructure—and there is no predicting what anybody needs in the face of total catastrophe.

In contrast, the real crisis scenarios we’re likely to encounter require cooperation and, crucially, “flattening the curve” of the crisis exactly so the more vulnerable can fare better, so that our infrastructure will be less stressed at any one time.

TurboTax Owner Intuit to Buy Credit Karma for $7 Billion

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Intuit Inc. is nearing a deal to buy personal-finance portal Credit Karma Inc. for about $7 billion in cash and stock, in a move that would push the bookkeeping-software giant further into consumer finance, according to people familiar with the matter. USA Today reports:

The TurboTax owner Intuit may acquire the personal-finance portal Credit Karma in a $7 billion deal this week, The Wall Street Journal reported.

Intuit is expected to announce the acquisition as early as Monday, sources familiar with the arrangement told the Journal. The move would be the largest purchase Intuit has made in its 37-year history. 

Credit Karma would still function as a standalone business with its CEO Kenneth Lin remaining at the helm, sources told the Journal.

More than 85 million Americans use Credit Karma to better understand and improve their credit scores. The startup makes money through credit cards and loan referral commissions. Intuit is the maker of TurboTax, the online tax filing service used by millions of Americans to file taxes.

U.S. Household Debt Exceeds $14 Trillion for the First Time

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Total U.S. household debt rose by $601 billion in the fourth quarter from a year earlier, or 1.4%, surpassing $14 trillion for the first time, the New York Fed’s quarterly household credit and debt report showed. Bloomberg reports:

That’s $1.5 trillion above the previous peak in the third quarter of 2008. Overall household debt is now 26.8% above the second-quarter 2013 trough.

Mortgage borrowing rose by $120 billion to $9.56 trillion. The rate for a 30-year mortgage has fallen by about 100 basis points over the past year, adding to home purchasers’ buying power. For example, a $500,000, 30-year loan costs about $300 less per month.

“Mortgage originations, including refinances, increased significantly in the final quarter of 2019,” Wilbert Van Der Klaauw, vice president at the New York Fed, said in a statement.

Record 90% of Americans Satisfied With Personal Life

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Nine in 10 Americans are satisfied with the way things are going in their personal life, a new high in Gallup’s four-decade trend. The latest figure bests the previous high of 88% recorded in 2003. Gallup reports:

These results are from Gallup’s Mood of the Nation poll, conducted Jan. 2-15, which also recorded a 20-year high in Americans’ confidence in the U.S. economy. The percentage of Americans who report being satisfied with their personal life is similar to the 86% who said in December that they were very or fairly happy — though the happiness figure, while high, is on the low end of what Gallup has measured historically for that question.

Despite some variation, solid majorities of Americans have reported being satisfied with their personal life over the past few decades, with an average of 83% satisfied since 1979. The historical low of 73% was recorded in July 1979, as the effects of that year’s oil crisis took a toll on U.S. motorists. During that poll’s fielding dates, then-President Jimmy Carter delivered his “malaise speech,” which was interpreted by some as placing blame on Americans themselves for the rough economic spot the country was in.

A 2019 survey on 10 aspects of Americans’ lives found that they are most satisfied with their family life, their education and the way they spend their leisure time — and least satisfied with the amount of leisure time they have, their household income and their job.

Coronavirus is Now a Public Health Emergency in the United States; Avoid Traveling to China

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The Donald Trump administration declared the coronavirus outbreak to be a public health emergency in the United States on Friday, setting quarantines of Americans who have recently been to certain parts of China. USA Today reports:

Centers for Disease Control and Prevention officials said it was the first quarantine order issued by the federal government in over 50 years. Marty Cetron, director of CDC’s Division of Global Migration and Quarantine, said the last time a quarantine was used was in the 1960s for smallpox.

U.S. citizens who have been in China’s Hubei province during the past 14 days and are returning to the U.S. States will undergo health screenings and be monitored during mandatory quarantines of up to 14 days, officials said.

Alex Azar, secretary of Health and Human Services, also announced a temporary suspension of entry into the United States of foreign nationals who pose a risk for the transmission of the coronavirus.

New Safety Gizmos Are Making Car Insurance More Expensive

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American car insurance rates are going up up up. In the past decade, they climbed 29.6 percent, to an average of $1,548 in 2019 from $1,194 in 2011. Wired reports:

The surge, detailed in a new report from insurance shopping site The Zebra, outpaced both inflation (by far) and the increase in average car prices (more narrowly). And it came even as the rate of crashes has fallen year over year…

It turns out that new features designed to keep vehicles in their lanes and out of trouble are contributing to rising insurance rates.

That’s because the sensors that power those systems make cars much more expensive to fix when they do crash. Dent a steel bumper, and a few hammer blows gets you back on the road. Smash one on a new car, and it could mean replacing a radar, a camera, and ultrasonic sensors, then calibrating them so they work properly. Replacing a cracked windshield now comes with the extra cost of having someone readjust any cameras that look through the glass.

While some studies have shown the effectiveness of emergency braking, insurance companies haven’t yet seen enough evidence to justify a break in rates for most of these features. That’s not to say lane keeping, parking assist, and the rest don’t work. They’re all relatively new, and the actuaries aren’t yet confident that their benefits outweigh the extra costs they incur to repair. Complicating the picture is the fact that each automaker offers its own version of each feature, and that drivers may not keep the systems engaged.

American Households Waste Nearly A Third Of Their Food, Study Finds

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According to research led by agricultural economics professor Edward Jaenicke of Penn State University, the average American household wastes nearly a third of its food. The value of that waste is estimated at $240 billion annually. When divided among the 128.6 million American households, that’s an average of $1,866 being wasted per household on a yearly basis. Study Finds reports:

Jaenicke says all that wasted food has far-reaching consequences, and negatively impacts overall American health, food marketing, climate change, and food security.

“Our findings are consistent with previous studies, which have shown that 30% to 40% of the total food supply in the United States goes uneaten — and that means that resources used to produce the uneaten food, including land, energy, water and labor, are wasted as well,” Jaenicke says in a university release. “But this study is the first to identify and analyze the level of food waste for individual households, which has been nearly impossible to estimate because comprehensive, current data on uneaten food at the household level do not exist.”

Over 40% of Americans Don’t Have $1,000 for an Emergency!

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Many of us would be in trouble if we had to foot the bill for an unplanned expense. Bankrate’s January Financial Security Index survey reveals that just four in 10 U.S. adults (41 percent) would cover the cost of a $1,000 car repair or emergency room visit using savings. Bankrate reports:

The findings echo what previous Bankrate studies and others — including the Federal Reserve and the Pew Charitable Trusts — have found about Americans’ lack of rainy-day savings.

The higher your household income, the more likely you would be to use savings to pay for unanticipated costs. That’s true for nearly six in 10 (59 percent) households earning $75,000 or more annually.

Men (45 percent) were more likely than women (38 percent) to say they would draw from savings when faced with the unexpected. And when their backs are against the wall, just 36 percent of younger millennials would turn to emergency funds to pay $1,000 (compared with 41 to 44 percent of older folks who would say the same).

2,153 Billionaires Are Richer Than 4.6 Billion People

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The world’s richest 2,153 people controlled more money than the poorest 4.6 billion combined in 2019, while unpaid or underpaid work by women and girls adds three times more to the global economy each year than the technology industry, Oxfam said on Monday. Reuters reports:

The Nairobi-headquartered charity said in a report released ahead of the annual World Economic Forum of political and business leaders in Davos, Switzerland, that women around the world work 12.5 billion hours combined each day without pay or recognition.

In its “Time to Care” report, Oxfam said it estimated that unpaid care work by women added at least $10.8 trillion a year in value to the world economy – three times more than the tech industry.

Google Parent Company Alphabet Hits $1 Trillion Market Cap

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Google parent-company Alphabet has hit $1 trillion in market capitalization, making it the fourth U.S. company to hit the milestone. CNBC reports:

Apple was the first to hit the market cap milestone in 2018. Then, Microsoft and Amazon followed. Apple and Microsoft are still valued at more than a trillion dollars while Amazon has since fallen below the mark.

Analysts are bullish on the company’s newly appointed CEO, Sundar Pichai. In a surprise announcement in December 2019, Alphabet founder Larry Page announced plans to step down as CEO, along with co-founder and president Sergey Brin.

Pichai had already been the CEO of Google, which includes all the company’s core businesses — including search, advertising, YouTube and Android — and generates substantially all its revenue and profits. But he reported to Page, who also oversaw other businesses making long-term bets on experimental technology like self-driving cars and package delivery drones. Now, he’s in charge of the whole conglomerate, although Page and Brin still have control over most of the company’s voting shares, giving them significant influence in major decisions.

Comcast Settles Lying Allegations, Will Issue Refunds and Cancel Debts

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Comcast has agreed to issue refunds to 15,600 customers and cancel the debts of another 16,000 people to settle allegations that the cable company lied to customers in order to hide the true cost of service. Comcast will have to pay $1.3 million in refunds. Ars Technica reports:

Comcast will have to pay $1.3 million in refunds. The settlement with Minnesota Attorney General Keith Ellison, announced yesterday, resolves a lawsuit filed by the state against Comcast in December 2018.

The attorney general’s lawsuit alleged that Comcast “charged Minnesota consumers more than it promised it would for their cable services, including undisclosed ‘fees’ that the company used to bolster its profits, and that it charged for services and equipment that customers did not request,” the settlement announcement said. Comcast also “promised [customers] prepaid gift cards as an inducement to enter into multi-year contracts, then failed to provide the cards,” Minnesota alleged.

Refunds to the 15,600 customers will total $1.14 million. Comcast must also pay another $160,000 to the state attorney general’s office, which can use any or all of that amount to provide additional refunds. That brings the total amount Comcast will pay to $1.3 million.

All U.S. Metros Enjoyed Income Gains For First Time in 26 Years

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Americans in every U.S. metropolitan area experienced economic prosperity in 2018, according to a recent report from the Bureau of Economic Analysis. For the first time in 26 years, no metro area saw per-capita incomes fall that year — the latest available data — and it was only the fourth time since 1970 that every U.S. urban region experienced prosperity. Bloomberg reports:

Americans in fewer than 6% of metropolitan areas have experienced uninterpreted gains in personal income since 1970. In contrast, as the country began to recover from the Great Recession in 2009, residents of 84% of metro areas saw incomes decline. A large number of areas saw significant decreases in 2013 and to a lesser extent in 2016.

Metros that haven’t experienced per-capita income drops in recent years include Washington D.C. and Pittsburgh. The nation’s capital is buffered from sector-based recessions by a federal government that pulls tax revenue from a variety of sources and geographies. The Pennsylvania city, meanwhile, has emerged as a health care, education, and technology hub even as its population declines.