Trump Vows Changes to History and Art at the Smithsonian; Actor Malik Yoba Speaks Out - First Of All with Victor Blackwell - Podcast on CNN Audio
Trump Vows Changes to History and Art at the Smithsonian; Actor Malik Yoba Speaks Out First Of All with Victor Blackwell 43 mins
The Trump Administration is fighting to detain and deport Cornell student activist Momodou Taal. Taal's attorneys, Eric Lee and Chris Godshall-Bennett, have a warning about other foreign students they say are being targeted across the country.
President Trump says he wants to remove "improper ideology" from our nation's top historical and cultural institution, the Smithsonian. Pulitzer-prize winning historian of African American history, David W. Blight, explains why he thinks this is 'a political declaration of war.'
Latino and Black voters could have a particularly important role to play in the upcoming Wisconsin Supreme Court race that's getting national attention. Victor speaks with Milwaukee County GOP Chairman Hilario Deleon and Angela Lang, the executive director of Black Leaders Organizing Communities in Milwaukee, about their respective outreach.
Plus, Actor Malik Yoba got a lot of attention for saying "I'm no longer a Black man." He joins Victor to explain why he thinks people missed his real goal of sparking a conversation about the ongoing purge of Diversity, Equity and Inclusion.
And later, Lisa France and Victor break out their fans to talk about line dancing and Black joy as an act of resistance.
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Yahoo
8 minutes ago
- Yahoo
Commentary: What America's default risk is costing you
For decades, investors thought the risk of the US government defaulting on its debt was essentially zero. It was nice while it lasted. There's still a low chance the US government will fail to pay principal or interest on nearly $30 trillion worth of Treasury securities circulating around the world. But global investors think US debt is getting riskier, and they also think US policymakers in Congress and the Trump administration are doing nothing about it. That rising risk is likely pushing interest costs higher for every American borrowing to finance a home, a car, or a business investment. A new paper published by the Federal Reserve Bank of Chicago uses an arcane security known as a credit default swap, or CDS, to estimate the risk of the US Treasury defaulting on a payment. The analysis highlights not just the damage caused by 15 years of political squabbling in Congress over budget issues but also the startling decline in market assessments of US creditworthiness. Congress may soon make this worse by passing a tax-cut bill that makes America's fiscal position even shakier. There are two basic market concerns with America's creditworthiness. One is the sheer amount of borrowing the US government must do to finance annual deficits that are now routinely close to $2 trillion. The total national debt is $36.2 trillion, and the amount of US debt in circulation now equals about 100% of GDP, a record for peacetime. That's only going higher. The other issue is the US debt ceiling, which puts a limit on the total amount of federal borrowing the Treasury is allowed to do. The debt limit itself isn't problematic. But Congress's handling of it is. Three times — in 2011, 2013, and 2023 — Congress has refused to raise the borrowing limit until the Treasury Department was dangerously close to running out of money. If the Treasury missed even a single payment it owed, it would constitute a default and roil the global trillion-dollar market for Treasury securities, the world's most widely traded assets. In January, the Treasury hit the debt limit once again. Since then, it has been relying on 'extraordinary measures' — basically, moving money around — to pay its bills. Congress must soon raise the debt limit once again, with the Treasury likely to run out of maneuvering room sometime between mid and late summer. Credit-default swaps are private contracts that work like an insurance policy, with one party agreeing to cover losses for a second party if the issuer of a given security defaults. The market for CDS contracts on government debt has been most active during debt crises in countries such as Argentina, Brazil, Mexico, Russia, Turkey, Greece, and Italy. The market for CDSs guaranteeing US debt is often dormant. But it springs to life around the time that the US debt ceiling needs to be raised, because Congress could trigger a default by waiting too long. The Chicago Fed research uses data on CDS pricing to estimate the market's perception of the risk of US default going back 14 years. In 2011, the United States came within a few days of default before Democrats and Republicans sparring in Congress agreed to raise the debt ceiling. That standoff led S&P to downgrade the US credit rating for the first time ever. The Chicago Fed paper estimates that the risk of default in 2011 peaked at more than than 6%. During debt-ceiling showdowns in 2013 and 2023, CDS pricing suggests the risk of default peaked at around 4%. CDS pricing today suggests the risk of a US default is around 1%. It's lower now than in prior standoffs because Republicans have unified control of Congress and don't need to negotiate with the opposition party to raise the borrowing limit. That 1% risk could also go higher as the Treasury comes closer to the "X date" when it runs out of money.A 1% risk of default might seem inconsequential. But it's not. 'Everyone says the US will never default,' David Kotok, co-founder of investing firm Cumberland Advisors, told Yahoo Finance. 'Somebody is saying, we don't believe you. The CDS market is saying the risk is greater than zero.' Kotok estimates that the higher perceived risk of default pushes the interest rate on a typical mortgage up by about three-tenths of a percentage point. That's because investors demand higher interest rates on riskier securities, such as the 10-year Treasury note, which is the benchmark for most interest rates paid on business and consumer loans. Read more: What is the 10-year Treasury note, and how does it affect your finances? On a 30-year mortgage for a median-priced house, lowering the interest rate by three-tenths of a point would lower the monthly payment by about $66. That's $792 per year or $23,769 over the course of the loan. Not a fortune, maybe, but shrewd investors welcome every marginal gain. Congress could eliminate the debt limit altogether by repealing the 1917 law that was supposed to simplify government borrowing, rather than creating a default mechanism. Back then, the executive branch needed congressional approval for every unique instance of borrowing. The debt limit was supposed to let the Treasury borrow freely up to a certain limit. That worked more or less as intended until 2011, when Republicans, who controlled the House of Representatives, used the debt ceiling as leverage to negotiate spending cuts with Democrats, who controlled the Senate and the White House. Repealing the debt limit might wipe out the market for credit default swaps on US debt, since debt limit deadlines are the very thing creating the default risk. Nobody would complain about that. Kotok estimates that the 30-basis-point premium on US interest rates would disappear. Then the US government would only face one debt problem: the vast amount of it. Markets have been jeering the mushrooming national debt this year, with investors showing unprecedented reluctance to buy some US assets. That has been another factor pushing US interest rates higher, when in normal market action, they'd be holding steady or falling. JPMorgan Chase (JPM) CEO Jamie Dimon is the latest voice of alarm on the US debt, warning that a 'crack' in the bond market could signal coming market turmoil. That would most likely occur as more investors shunned US assets, including Treasurys, sending rates even higher. Treasury Secretary Scott Bessent says Dimon is overreacting, giving cover to Republicans working up the big tax-cut bill that could add another $3 trillion or $4 trillion to the national debt. Moody's downgraded US debt for the first time in May following Fitch's first-ever downgrade in 2023. Like S&P in 2011, both rating agencies cited political dysfunction and huge annual deficits. The rumble of discontent with America's fiscal recklessness is growing louder. Eventually, they'll start to hear it in Washington, D.C. Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman. Click here for political news related to business and money policies that will shape tomorrow's stock prices.
Yahoo
8 minutes ago
- Yahoo
The true cost of Trump's massive military parade seems to keep getting worse
Donald Trump's plans for a massive, expensive military parade in Washington, D.C., already seemed absurd when juxtaposed against his administration's mass firings at federal agencies and his plans to institute deep cuts to federal programs many Americans rely on. But the true cost of the parade seems to keep getting worse. The president recently told NBC News' Kristen Welker that the June 14 parade's price tag — which could reach $45 million — would be 'peanuts compared to the value of doing it.' But the actual value of hosting a parade — which, in a fashion reminiscent of dictatorships, will feature dozens of military vehicles and thousands of service members — is debatable at best. And NBC News reported recently on some of the destruction that the June 14 parade — a seemingly frivolous pet project to celebrate 250 years of the U.S. Army that just so happens to fall on Trump's birthday — stands to inflict on Washington's streets: The cost to repair Washington, D.C., streets after the upcoming military parade celebrating the Army's 250th anniversary could cost as much as $16 million, according to U.S. military officials. That's part of an estimated $45 million total cost for the June 14 military parade, which coincides with President Donald Trump's 79th birthday. The cost estimates have fluctuated as planning continues. And that's taxpayer money being spent as Trump withholds tens of millions of dollars allocated for things like climate change studies and other research grants, or any number of federal programs that stand to benefit a large number of Americans — certainly more so than a military parade. D.C. Mayor Muriel Bowser has been sounding the alarm for months on the parade's potential destruction, saying in April that military tanks 'would not be good,' adding: 'If military tanks were used, they should be accompanied with many millions of dollars to repair the roads.' Republicans have been eager to use their federal power over Washington — due to it not being an official state — no matter what the mayor says. In March, Bowser said her decision to paint over a D.C. plaza honoring the Black Lives Matter movement came amid pressure from the White House, suggesting she had acquiesced because there are 'bigger fish to fry.' And now House Republicans — who have refused to address a $1 billion funding shortfall they created for the district — are trying to pass a law that would roll back voting rights in D.C. as well. All of this appears to be aligned with Trump's declaration that the federal government should 'take over' Washington, using language befitting the leader of an occupying military. And his massive, expensive and literally destructive military parade — all at taxpayers' expense — seems like it would be a crowning achievement in that mission. This article was originally published on
Yahoo
9 minutes ago
- Yahoo
Ray Dalio: ‘We should be afraid of the bond market'
The US is at a low risk of an imminent debt crisis — but high risk in the long term, billionaire investor Ray Dalio writes in a new book. The US government debt situation is 'nearing the point of no return' and approaching a 'death spiral' that could threaten the stability of the world's largest economy, he writes in the book, 'How Countries Go Broke: The Big Cycle,' published Tuesday. Some economists and investors have been sounding the alarm about the deficit for years. But this year, Wall Street has begun to heed caution as President Donald Trump's tariffs and tax bill agenda have stoked volatility in the bond market, which is the usually quiet bedrock of the US and global economies. Investors are increasingly concerned about the potential for Trump's 'big, beautiful' tax bill to put pressure on the federal debt burden at a time when there is uncertainty about the outlook for the economy and the appeal of US assets. In May, the rate the US government has to pay investors for a 30-year loan spiked to its highest level since 2023. That's because investors either sold or refused to buy bonds and demanded higher compensation in exchange for what looked like a riskier loan to the US government. Dalio is the latest billionaire to sound the alarm over the US debt and deficit, with worries that the vast government debt will crowd out spending on essential services to leave a hollowed-out economy that can't work for its citizens and which spooks global investors. There is a 'very low imminent risk' of a US government debt crisis, but a 'very high long-term risk,' Dalio writes in the book. 'Even though this progression has happened many times in history, most policy makers and investors think their current circumstances and monetary system won't change,' Dalio writes. 'The change is unthinkable — and then it happens suddenly.' A higher deficit means the Treasury might need to sell more bonds to finance its spending and interest payments. A debt 'death spiral' describes when a government needs to issue more bonds to raise money to pay its existing debts, but faces less demand and has to pay investors more and more interest for them to bite. 'A spiral of rising interest rates leading to worsening credit risk, leading to less demand for the debt, leading to higher interest rates is a classic debt 'death spiral',' Dalio writes. The higher interest rates investors demand to loan the government money leave less money for running a country, increase interest rates for consumers and businesses and generally leave a country with fewer options to raise cash. 'To me, that suggests that US policy makers should be more, not less, conservative in dealing with the government's finances because the worst thing possible would be to have its finances in bad shape during difficult times,' Dalio writes. Trump's tax bill is set to raise the deficit because it slashes tax revenues without enough cuts to spending to balance things out. The current US deficit is on unsustainable path and is 'more than the market can bear,' Dalio said at an event on May 22 in New York ahead of the book's release. He said that he anticipates it will be roughly three years before the United States is in a 'critical situation.' 'I think we should be afraid of the bond market,' Dalio said. 'I can tell you that this is very, very serious.' Tax cuts can be a boon for Wall Street, and the stock market cheered Trump's tax cuts during his first term. But what makes this time different is adding to the deficit while the federal debt burden has ballooned: The ratio of federal debt to gross domestic product, or the total value of goods and services produced in the economy, soared from 104% in 2017 to 123% in 2024, according to the Treasury Department. 'We're now talking about deficits and a national debt-to-GDP ratio that are really going to be unprecedented, except for recent recessionary times,' Alan Auerbach, a professor of economics at UC Berkeley, previously told CNN. Dalio's book comes out days after JPMorgan Chase CEO Jamie Dimon said on Friday at the Reagan National Economic Forum that a 'crack' in the bond market 'is going to happen.' 'The US long bond is already near its highest levels since the (2008 financial crisis),' said Ajay Rajadhyaksha, an analyst at Barclays, in a recent note. 'As markets absorb the details of the new tax bill, and realize that deficits are likely to keep rising for the foreseeable future, the risk is that longer yields keep rising as well.' Nor have Democrats and Republicans shown they can work together on the problem, Dalio said at the May 22 event. 'It's like being on a boat that's headed for rocks,' he said, 'and they agree that they should turn, but they can't agree on how to turn.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
