Student loan repayments could slam big-name retailers this fall

 For more than three years, federal student loan borrowers have not had to make monthly payments. But that pandemic-era pause is coming to an end this fall, setting up a financial shock for millions of Americans and the big-name stores, such as Target, Nike, Under Armour and Gap, where they shop.

Ticker	Security	Last	Change	Change %
TGT	TARGET CORP.	131.05	+0.13	+0.10%
NKE	NIKE INC.	108.09	-0.94	-0.86%
UA	UNDER ARMOUR INC.	7.15	-0.11	-1.52%
GPS	GAP INC.	10.66	+0.11	+1.04%

About 44 million borrowers in the U.S. were affected by the payment pause, which initially began in March 2020 at the onset of the COVID-19 pandemic. The Biden administration extended the pause for the eighth time in November but will not do so again as part of the bipartisan debt ceiling deal approved by Congress.

Payments, which will resume Aug. 30, can be substantial. The average monthly bill hovers between $200 and $299 per person, although it is even higher for some borrowers, according to the most recent Federal Reserve data.

Collectively, borrowers will resume paying about $10 billion a month, according to an analysis from JPMorgan.

The resumption of these payments will likely force households to cut back on spending in other areas, particularly retail, according to a note from UBS analyst Jay Sole.

"Inflation and the overall macro environment has caused U.S. consumers to defer many discretionary purchases over the past 18 months," Sole wrote in the note. "Apparel has proven to be the category consumers defer most often.

Interestingly, market research of 1,392 U.S. consumers with student loans shows this trend is even more pronounced among this group. We believe this indicates student loan consumers will reduce spending on apparel in a big way when they have to start paying off their student loan debt."

A number of brands and retailers could be hit by the spending reduction, including American Eagle Outfitters, Carter's, Crocs, Foot Locker, Canada Goose, Gap, Nordstrom, Nike, Steve Madden, Under Armour and Victoria's Secret, according to UBS.

Ticker	Security	Last	Change	Change %
AEO	AMERICAN EAGLE OUTFITTERS INC.	15.72	+0.05	+0.32%
CRI	CARTER'S INC.	73.37	+0.86	+1.19%
CROX	CROCS INC.	100.59	-2.41	-2.34%
FL	FOOT LOCKER INC.	25.37	+0.01	+0.04%
GOOS	CANADA GOOSE HLDGS	16.77	-0.29	-1.70%
GPS	GAP INC.	10.66	+0.11	+1.04%
JWN	NORDSTROM INC.	21.31	-0.34	-1.57%
NKE	NIKE INC.	108.09	-0.94	-0.86%
UA	UNDER ARMOUR INC.	7.15	-0.11	-1.52%
VSCO	VICTORIA'S SECRET & CO.	20.13	+0.48	+2.44%
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UBS is not alone in its warning of trouble for retail.

JPMorgan analyst Chris Horvers said Target sales could face a hit once student loan repayments begin in early September because Target caters to millennials, who carry a large share of student loan debt.

Target

"Target over-indexes to the millennial customer and, should student loan payments come back on, the company is more exposed than others in our coverage," Hovers wrote in the note. "Buy-side client expectations are in the $6-8 million per month consumer outflow range should this happen, per our conversations, which represents a potential 1-2 point [comparable] headwind to retail spending."

Target, along with Walmart, are scheduled to report earnings next Wednesday and Thursday.

President Biden's broader student loan forgiveness plan, which the U.S. Supreme Court blocked in June, had proposed the elimination of $10,000 in student loan debt for individual borrowers who earned less than $125,000 in either 2020 or 2021 or married couples who made less than $250,000 annually in those same years. If a qualifying borrower also received a Pell grant while enrolled in school, they would be eligible for up to $20,000 in debt forgiveness.

"There are … millions of Americans in this country who feel disappointed and discouraged, or even a little bit angry, about the court’s decision today on student debt. And I must admit I do, too," Biden said following the decision.

Over the past several weeks, the White House has announced a workaround, including plans to forgive $39 billion in loans.

https://www.foxbusiness.com/economy/student-loan-repayments-slam-big-name-retailers-fall

Will America's Anti-Obesity Craze Lead To A Food Revolution

 It's hardly a secret that the US - the fattest nation on earth excluding a handful of islands in the Pacific - has an obesity problem. That, and the adverse health consequences of all this pervasive fatness, is the bad news which has ballooned US medicare/medicaid payments, one of the key factors behind the explosion in US shadow (off-balance sheet) debt into the $100+ trillion ballpark. The good news is that a handful of revolutionary new GLP-1 based weight-loss drugs courtesy of Novo Nordisk and Eli Lilly - which lead to dramatic cutting of excess pounds by way of substantial appetite reduction- may result in a dramatic reversal in this dismal trend (at least for those Americans who can afford the expensive drugs, which come with a steep price of ~$1,000 per month).

Of course, with the US food industry having itself turned fat and lazy, comfortable in assuming that nothing will ever change with America's infatuation with fast food, greasy burgers and fatty and carby junk food, even the smallest deviation could have devastating consequences for a food market that us valued at a little under $1 trillion per year in 2022.

One attempt to quantify the impact of this new weight-loss revolution on the food industry, and weed out winner from losers, comes from Morgan Stanley, which on Friday published a 60-page report titled "Food Meets Pharma: Downsizing Demand: Obesity Medications’ Impact on the Food Ecosystem" (available to pro subs), and which finds that over the long-term the US may see a substantial decline in calorie consumption (vs baseline) leading to steep losses for those companies that seek to profit from US obesity trends.

Below we excerpt the key highlights from the report, starting with the catalyst: the dramatic weight loss resulting from a consistent regime of GLP-1 drugs like Wegovy, Ozempic, Mounjaro and - coming soon - Retatrutide.

These drugs bring about meaningful weight loss through a 20-30% reduction in daily calorie intake.

One problem is that for many (obese) Americans, these drugs remain unaffordable, with just half of patients fully covered by health insurance.

Morgan Stanley then forecasts the big picture impact on the US population an finds a reduction of up to 1.7% (vs baseline) in calories consumed in the bull case.

Not surprisingly, MS found a more pronounced impact on certain food categories among those on the weight-loss drugs.

Also not surprising, the biggest losers appear to be fast food and pizza restaurants...

... confections, cookies and salty snacks...

... as well as makers of sugary drinks and snacks.

The bank then summarizes the impact of the weight-loss craze in the following matrix which look at the winners and losers across every category, from Packaged foods and restaurants, to beverages and food retail.

https://www.zerohedge.com/markets/will-americas-anti-obesity-craze-lead-food-revolution

Parents, beware: NYC specialized high schools are coming under attack again

 State Senate Minority Leader Rob Ortt and Assemblyman William Colton (D-Brooklyn) are calling on parents to prepare to mobilize as the Specialized High Schools Admissions Test is under attack yet again.

In a recent op-ed, Assemblywoman Rodneyse Bichotte Hermelyn, Brooklyn Democratic Party chair, proposed to eliminate the SHSAT as the sole admission criterion for the city’s specialized high schools because standardized tests are, she wrote, racist.

Of course, standardized tests are not racist. They are objective and anonymously scored.

And as for content, most blacks at least get to take them in their native language, whereas many Asians learned English just recently and lack cultural familiarity about America — yet outperform whites and blacks in math and verbal sections.

Bichotte Hermelyn gives scant support for her claim: some personal anecdotes, some fake history, but mainly that most colleges, post-pandemic, made standardized tests optional.

But savvy families know “optional” tests are optional only for blacks and Hispanics; whites and especially Asians better take those tests and score high: It is precisely because standardized tests work that top-tier colleges want them from Asians and whites and, for their now-illegal affirmative action, not from blacks and Hispanics.

MIT notably ended its test-optional charade; it just couldn’t maintain rigorous standards anymore.

To give affirmative action life-support, meanwhile, Harvard created extra-slow courses like Math MA (most students start math with numbered courses) and Expository Studio 10 (most take Expos 20), and Princeton devised MAT 100, which, amazingly for a top-tier school, starts with high-school review.

Against Bichotte Hermelyn’s slim evidence stands a wealth of rigorous research supporting standardized testing.

To name just some: World-renowned cognitive scientist Steven Pinker’s classic New Republic article demonstrates how the SAT doesn’t just “test for wealth,” as some claim, but predicts “a vast range of intellectual, practical, and artistic accomplishments.” 

The University of California faculty’s Standardized Testing Task Force recommends, after a year-long, sober study, the school continue using standardized tests for admission. 

A Peter Arcidiacono paper shows that among black students who entered Duke University to study engineering, those with low SATs disproportionately quit for easier humanities majors while those few with high SATs completed engineering programs at similar rates as whites and Asians with similar SATs.

My own study specifically on the SHSAT confirms the significant academic superiority of students admitted with higher SHSATs over students admitted with lower SHSATs.

Assemblywoman Rodneyse Bichotte Hermelyn proposed eliminating the SHSAT as the sole admission criterion for the city’s specialized high schools.

Photo by Michael M. Santiago/Getty Images

No surprise, then, that using the SHSAT to assemble entering classes based only on meritocratic peerage of exceptional academic abilities produced an astounding 14 Nobel Prize science winners, recipients of the Fields Medal, Abel Prize, Turing Award and other honors and many National Academy of Sciences members.

The Department of Education, in 400+ high schools and 700+ programs, couldn’t match such distinction with any other admission scheme.

Bichotte Hermelyn says she can. She vaguely proposes using a “top percentage of every school” scheme, plus grades, essays and other even more subjective criteria.

Something is immediately suspect: She wants her high schools not to operate alongside, but to replace, the specialized high schools.

The specialized schools, serving about 5% of DOE’s high-school students, are already admired worldwide; if Bichotte Hermelyn’s proposal can produce excellent schools for another 5%, why not keep both, for outstanding education to serve 10% of DOE’s students — if she is indeed interested in excellent high schools for city kids?

Or does she know her proposal is not better and needs to destroy the evidence?

Is her real agenda excellent schools for city kids or just racial politics?

Bichotte Hermelyn’s use of grades, as well as “top percentage of every school,” which relies on grades, make her proposal absurd outright because grades in DOE schools are not only incomparable and inflated but massively fraudulent.

Instead of scapegoating the SHSAT for political points, how about doing the hard work to fix schools and make grades honest again?

Bichotte Hermelyn also wants essays, which received inordinate attention after Justice John Roberts mentioned them in Students for Fair Admissions v. Harvard.

Essays are even worse than grades; they are open invitations to lie.

Bichotte Hermelyn claimed in an op-ed that standardized testing is racist.

Photo by Andrew Lichtenstein/Corbis via Getty Images

Will DOE verify 28,000 tear-jerkers like “I wasn’t born yet when my father died of heat in a human-smuggler’s truck in Arizona. My mother told me this when I was 8 years old, after I got beaten again by white kids in school. On that day, I became a different person.”

Then there’s rampant out-and-out lying on race, which 34% of white college applicants already do!

A resounding “No” to application essays.

We can have a constructive discussion about excellent schools — but we must be honest about standardized tests, which are valid measures, versus grades, essays and “top percentage of every school,” which are not.

One hundred percent of students cannot be in the top 5%; nor do all kids want that.

For those who don’t, there must be honorable pathways, but for those who do, here’s an idea: Study harder.

The Brookings Institution found that on average, Asian students spend twice as much time doing homework as white kids and four times as much as black students.

Bichotte Hermelyn should ponder this finding before complaining again that Stuyvesant has too many Asians and not enough blacks.

Wai Wah Chin is the founding president of the Chinese American Citizens Alliance Greater New York and an adjunct fellow of the Manhattan Institute.

https://nypost.com/2023/08/13/parents-beware-nyc-specialized-high-schools-are-coming-under-attack-again/

Biden censors battered — expect an epic Supreme Court showdown

 Federal judges hammered fresh nails into the coffin of the Biden censorship regime Thursday in New Orleans.

The thrashing the administration received will likely set up an epic Supreme Court battle that could help redefine freedom for our era.

A federal appeals court was hearing the Justice Department’s appeal of a July 4 decision in Missouri v. Biden that ignited pro-freedom rhetorical fireworks across the nation.

Federal Judge Terry Doughty’s opinion condemned the Biden administration for potentially “the most massive attack against free speech in United States’ history.”

Doughty delivered 155 pages of damning details of federal browbeating, jawboning and coercion of social-media companies.

He issued an injunction blocking the feds from “encouraging, pressuring, or inducing in any manner the removal, deletion, suppression, or reduction of content containing protected free speech.”

The Biden administration rushed to sway the appeals court to postpone enforcement of the injunction and then sought to redefine all its closed-door shenanigans as public service.

Federal Judge Terry Doughty condemned the Biden admin for what he called maybe “the most massive attack against free speech in United States history.”

Youtube

In its briefs to the court, the Justice Department declared, “There is a categorical, well-settled distinction between persuasion and coercion,” and castigated Judge Doughty for having “equated legitimate efforts at persuasion with illicit efforts to coerce.”

The department denies that federal agencies bullied social-media companies to suppress any information.

Instead, there were simply requests for “content moderation,” especially regarding COVID.

Actually, there were tens of thousands of “requests” that resulted in the suppression of millions of posts and comments by Americans.

Team Biden champions a “no corpse, no delicta” definition of censorship.

President Biden’s DOJ has denied pressuring social-media companies.

REUTERS

Since federal SWAT teams did not assail the headquarters of social-media firms, the feds are blameless.

Or, as Justice Department lawyer Daniel Tenny told the judges, “There was a back and forth. Sometimes it was more friendly, sometimes people got more testy. There were circumstances in which everyone saw eye to eye, there were circumstances in which they disagreed.”

It’s irrelevant that President Joe Biden publicly accused social-media companies of murder for not censoring far more material and that Biden appointees publicly threatened to destroy the companies via legislation or prosecution.

Nope: It was just neighborly discussions between good folks.

At the hearing, Judge Don Willett, one of the most principled and penetrating judges in the nation, had no problem with federal agencies publicly criticizing what they judged false or dangerous ideas.

Judge Don Willett questioned how the Biden administration approached social-media companies.

CQ-Roll Call, Inc via Getty Images

But that wasn’t how Team Biden compelled submission: “Here you have government in secret, in private, out of the public eye, relying on . . . subtle strong-arming and veiled or not-so-veiled threats.” 

Willett vivified how the feds played the game: “That’s a really nice social-media platform you’ve got there, it would be a shame if something happened to it.”

Judge Jennifer Elrod compared the Biden censorship regime to the Mafia: “We see with the mob . . . they have these ongoing relationships. They never actually say, ‘Go do this or else you’re going to have this consequence.’ But everybody just knows.”

Yet the Biden administration was supposedly innocent because the feds never explicitly spelled out “or else,” according to the Justice Department lawyer.

This is on par with redefining armed robbery as a consensual activity unless the robber specifically points his gun at the victim’s head.

As economist Joseph Schumpeter aptly observed, “Power wins, not by being used, but by being there.”

On top of censorship, the feds used deceit to taint the 2020 presidential election.

As Dean John Sauer, the state of Missouri’s lawyer, explained, the FBI “engaged in deception” by prepping social-media platforms to expect false reports on Hunter Biden and then failing to admit the FBI had verified his laptop as authentic.

That spurred pervasive suppression of the New York Post exposé in October 2020.

It was a prime example of federal meddling that Judge Doughty invoked to justify leashing the FBI and other agencies.

Because Biden ended the COVID emergency in May, the Justice Department pretends this case’s issues are moot.

But the Biden administration also pressured social-media companies “to censor misinformation regarding climate change, gender discussions, abortion and economic policy,” as the July 4 court decision noted.

There is no reason to expect Team Biden and federal censorship contractors will not seek to taint another presidential election next year.

At least two of the three judges on last week’s panel will likely uphold all or part of the injunction against federal censorship.

The Biden administration will probably speedily appeal the case to the Supreme Court, setting up an epic showdown.

If Team Biden can destroy freedom of speech by renaming censorship “content moderation,” what other freedoms will it destroy with rhetorical scams?

If endless demands by the FBI and other agencies don’t amount to “coercion,” then it is folly to expect the feds to ever admit how they are decimating Americans’ rights and liberties.

James Bovard is the author of 10 books and a Brownstone Institute fellow.

https://nypost.com/2023/08/13/biden-censors-battered-expect-an-epic-supreme-court-showdown/