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[McTraveller]

Queue the old jokes about how there were so many Starbucks, they started having to put Starbucks inside other Starbucks just so there was a place they could fit them.

[scriver]

Another recession? Didn’t the last one last a while?

I don't think the last one really ended.

It ended for the rich, but not for the poor.

[EuchreJack]

Damn, I thought banks were done discriminating against black & tan individuals...Nope.

[McTraveller]

Yeah, actuarial risk is a harsh mistress.

You have to be willing to accept short-term losses to invest in areas like that and, sadly, people don't like taking risks.

The only solution really is to get people to start valuing something *other* than currency, because then the risk picture changes - that is, if you value civil stability, then it's higher risk to ignore those areas.

[EuchreJack]

Yeah, actuarial risk is a harsh mistress.

You have to be willing to accept short-term losses to invest in areas like that and, sadly, people don't like taking risks.

The only solution really is to get people to start valuing something *other* than currency, because then the risk picture changes - that is, if you value civil stability, then it's higher risk to ignore those areas.

NO
That is NOT what the linked page said.

"Court system
In May 2015, the U.S. Department of Housing and Urban Development announced that Associated Bank had agreed to a $200 million settlement over redlining in Chicago and Milwaukee. The three-year HUD observation led to the complaint that the bank purposely rejected mortgage applications from black and Latino applicants.[36] The final settlement required AB to open branches in non-white neighborhoods.[37]

New York Attorney General Eric Schneiderman announced a settlement with Evans Bank for $825,000 on September 10, 2015. An investigation had uncovered the erasure of black neighborhoods from mortgage lending maps.[38] According to Schneiderman, of the over 1,100 mortgage applications the bank received between 2009 and 2012, only four were from African Americans.[39] Following this investigation, The Buffalo News reported that more banks could be investigated for the same reasons in the near future. The most notable examples of such DOJ and HUD settlements have focused heavily on community banks in large metropolitan areas, but banks in other regions have been the subject of such orders as well, including First United Security Bank in Thomasville, Alabama, and Community State Bank in Saginaw, Michigan.[40]

The United States Department of Justice announced a $33 million settlement with Hudson City Savings Bank, which services New Jersey, New York, and Pennsylvania, on September 24, 2015.[41] The six-year DOJ investigation had proven that the company was intentionally avoiding granting mortgages to Latinos and African Americans and purposely avoided expanding into minority-majority communities. The Justice Department called it the "largest residential mortgage redlining settlement in its history."[42] As a part of the settlement agreement, HCSB was forced to open branches in non-white communities. As U.S. Attorney Paul Fishman explained to Emily Badger for The Washington Post, "(i)f you lived in a majority-black or Hispanic neighborhood and you wanted to apply for a mortgage, Hudson City Savings Bank was not the place to go." The enforcement agencies cited additional evidence of discrimination in Hudson City's broker selection practices, noting that the bank received 80 percent of its mortgage applications from mortgage brokers but that the brokers with whom the bank worked were not located in majority African-American and Hispanic areas."

...these are purely racially-motivated actions based upon prejudices and NOT based upon actual data.
The "short-term losses" are imaginary, otherwise these banks wouldn't be outright deleting the black & tan applicants.

Even more relevant:
"Credit cards
Credit card redlining is a spatially discriminatory practice among credit card issuers, of providing different amounts of credit to different areas, based on their ethnic-minority composition, rather than on economic criteria, such as the potential profitability of operating in those areas.[64] "

[McTraveller]

Yeah I guess if they didn't even provide evidence of risk, and just said "we're not even looking at anything in those zip codes" or whatever, that's a political (not economic) issue.

[EuchreJack]

Told you so... Trident Mortgage caught red handed redlining.

Although, the settlement of "now go make money off of communities of color", doesn't sound like much of a sanction to me.

[McTraveller]

Interest on my money market account is now up to 1.49%.

Halfway to the 3% I was getting 20 years ago...

[EuchreJack]

Interest on my money market account is now up to 1.49%.

Halfway to the 3% I was getting 20 years ago...

...back when the inflation rate was 3% instead of 8%.

[anewaname]

First cut of the profit (from investing your money) goes to the guys investing the monies.

[EuchreJack]

First cut of the profit (from investing your money) goes to the guys investing the monies.

You forgot to mention they charge a yearly fee regardless of whether you make any profit.

[Duuvian]

U.S. automakers say 70% of EV models would not qualify for tax credit under Senate bill

https://www.reuters.com/business/autos-transportation/us-auto-trade-group-warns-ev-tax-proposal-would-make-70-ineligible-2022-08-05/

Snippets from the article:

Spoiler (click to show/hide)

An analysis by the Congressional Budget Office on Wednesday suggested just 11,000 new EVs would use the credit in 2023.

Privately, automaker executives said the measure could hinder EV sales in the short-term. They said they could quickly lose access to tens of thousands of credits that an existing law makes available with few restrictions on the first 200,000 vehicles sold before it phases out.They said this would hit automakers in the bottom line.

So far, Manchin has refused to reconsider his proposals.

"I don't believe that we should be building a transportation mode on the backs of foreign supply chains,." Manchin said on Tuesday.

Well, it seems he is going after Detroit now. Do they make car parts in West Virginia?

This is why it's a bad idea (from article):

Spoiler: snippets (click to show/hide)

John Bozzella, heads of the Alliance for Automotive Innovation that represents General Motors (GM.N), Toyota Motor (7203.T), and Ford Motor among others, said a July 27 proposal by Senators Chuck Schumer and Joe Manchin would make 70% of 72 U.S. electric, plug-in hybrid and fuel-cell EVs ineligible upon passage.
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"None would qualify for the full credit when additional sourcing requirements go into effect," he said.

Industry officials said it will be nearly impossible to achieve the domestic content rules calling for 50% of battery components to be manufactured in North America before 2024 and 60% by 2024-2025.

For 2022 to 2026, the CBO estimates the government would spend $1.78 billion on subsidies for new EV purchases - suggesting budget scorekeepers expect a total of just 237,000 EVs will qualify in those five years.

This isn't some bullshit "we don't want to spend money on domestic capital" like some industries do. It's that there are limited deposits of these minerals especially in the Western hemisphere.

The primary untapped source I know of is in Brazil and Bozo has been trying to force lithium mines open on indigenous lands for the mining industries due to rising lithium prices in the face of opposition from the locals. Notice this potential (and I would guess unethical if Bozo pushes it through before they boot him out) source of lithium is in South America, not North America where this bill is limiting sourcing from if I read the article correctly. It makes no sense whatsoever unless the objective is to kill off the tax credits to people who purchase EVs, which by the way have already hit their cap of 200k vehicles for both Tesla and GM and should be expanded due to the apparent success of the program.

The reason lithium is preferred is because it is light in weight. There are other ways to manufacture batteries but they result in a heavier product, which is important in automotive design. Heavier batteries would be more acceptable in stationary arrangements such as a home battery storage system.

The bits about limiting it to vehicles under 80k$ and under a certain income for the purchaser I'm more than fine with; those actually seem too high still. I'm not trying to help the doctor or lawyer get an expensive Tesla the $7500 tax break won't make or break the deal on, I'm proposing trying to help the high school educated worker get a cheap mass producted GM mini to go to work on the line or a family a cheap mass produced small suv or minivan, that's as close to 10k$ I can get it to with the tax break. That's an achievable price for a new car when you are earning lower wages (if the battery lasts or is under warranty as I've heard it raises service costs if that goes bad quickly), so if you want to build and sell a lot of cars and employ a lot of people that's how you do it if the cost of production allows that at the scale of production needed to closely match potential sales volume potential at that price.

When I say scale of production that's important, because if automakers are continually being pressured to keep their old IC lines running to save the oil industry instead of focused production, the scale of production is split between IC and electric engines, and that increases the price of production of both as bigger scale = lower price of production per unit generally (the risk is overproduction at that point as while demand will go up with lower prices there is still a finite demand for vehicles)

So basically this industry protectionist scheme at the cost of other industries is a bad idea that I think could be fixed if the cap on vehicle price and purchaser income were lowered as a tradeoff to accepting an actually functional supply chain for the EV industry. I think this guy is more concerned with choking off the latter though. I'd be happy to be proven wrong if anyone knows of plentiful lithium in North America that would be able to supply demand for lithium, which by the way is hitting incredible prices in commodities already last I checked.

[anewaname]

I haven't been able to find the text of the Manchin/Schumer deal anywhere, just the chatter about it, but it is not likely to require that the lithium be mined in the USA. It is likely to require that battery component production, and possibly the recycling, be based in the US or in closely allied countries.

The point that the USA doesn't have significant known lithium deposits is incredibly important. If the recycling process doesn't retain enough of the used lithium mass to make recycling worthwhile, the industry will talk loudly about recycling but actually create batteries with newly mined lithium, and this fake-recycling and mining will be done outside of the USA. This recycling process needs to be kept close to home and needs to be bound to US regulatory observance.

[McTraveller]

That bill is hilarious for so many reasons, the first of which is in the woefully optimistic name.  That, however, is treading more on Ameripol than the spirit of this economics thread though...

From the economics standpoint I just wonder if the incentives are meaningful to encourage investment or if they will prove to be adverse market distortions.

[MrRoboto75]

tbf the US can barely make good cars either way.