Prices in the US could keep going up if the US doesn't "reindustrialize" its economy, Richard Bernstein said.
The US has a "massive" trade deficit at a time when world trade is becoming fragmented, he noted.
Deglobalization could disrupt supply chains and push up costs, market experts have warned.
Inflation will climb higher if the US economy doesn't reindustrialize its economy, according to investment manager Richard Bernstein.
The Richard Bernstein Advisors CEO pointed to the US's "massive" trade deficit, with the difference between imports and exports clocking in at $773.4 billion last year, according to the Commerce Department.
That trade imbalance could lead to trouble for the economy, considering the ongoing trend of deglobalization. World trade has become more fragmented since the pandemic, and rising geopolitical tensions are a sign that the trend is continuing, he said.
That suggests the US needs to reindustrialize its economy or face higher prices as a long-term consequence, he warned.
"It has to happen. If it doesn't … we're going to have tremendous inflation here in the United States," Bernstein said to CNBC on Monday. "We're dependent on the world for everything at a time when globalization is starting to contract. Not a good combination. It changes the story from secular disinflation to secular inflation."
Market commentators have warned that deglobalization could be a major factor keeping inflation elevated for years to come. Billionaire investor Ken Griffin predicted last year that high prices could stick around for decades as fragmented world trade will disrupt supply chains and push up costs for consumers.
Bernstein has been calling for a reindustrialization of the US economy over the past decade. In 2012, he published a whitepaper calling for an "industrial renaissance," which would take US manufacturing back to levels recorded in the 50s and 60s. That renaissance will be the predominant theme in the market over the next 10 years, he said in a note earlier this year.
Apple's unveiling new products today, but they're not the ones you might be thinking of.
The tech giant's event will reportedly showcase a new family of… iPads and iPad accessories.
The crowd goes mild!
You're forgiven if you weren't aware iPads were still a thing, let alone getting updated. Apple's tablet didn't upend industries like the iPod or iPhone.
The tablet's main issue has been its existence in a no-man's land. Less powerful than a computer but not much better than a mobile phone, the iPad has a limited set of specific use cases. The new iPads will reportedly feature better displays, a thinner design, and a MacBook processor.
(Personally, my iPad primarily serves as a second TV when my wife gets sick of me watching sports in the living room.)
The update comes not a moment too soon for Apple. iPhone sales have noticeably dipped, which is why you're hearing Apple tout its "services" business, writes BI's Peter Kafka.
But even that's a bit of a misnomer. A good chunk of that growing "services" business is the billions of dollars it receives from Google for giving the search engine prime real estate, Peter writes.
I decided to ask Katie what she'd like to see out of the Apple event today:
"New iPads aren't really too exciting unless you're already planning to buy a new iPad. (I'm not planning on it, and if I was, I'd probably get an iPad Mini, which isn't expected to get an update at this event.)
But I am curious to see if the new iPad Pros will have the latest M4 chip, which isn't even in MacBooks and Macs yet. If it is, we'll get a peek at what it's capable of when it comes to regular computers later on.
I'm also looking forward to watching the livestream, because even if the Apple Pencil is kind of boring (to me), these Apple events are always fascinating: a huge marketing spectacle that always has some subtle clues about how Apple wants to position itself."
3 things in markets
Getty Images; Alyssa Powell/BI
Blackstone's $114 billion real-estate fund has veteran analysts worried. The private-equity giant found success pitching ordinary investors on BREIT, a commercial real-estate fund. But some veteran analysts, accountants, and investors believe Blackstone's estimates of BREIT's assets are wildly inflated, making it essentially a house of cards.
You thought your interest payments were bad… The US government is shelling out $2 million a minute for interest payments on its debt. The first three months of the year saw the US Treasury foot a $234 billion bill in interest expenses.
Recession watch. Official data from the National Bureau of Economic Research shows a promising trend — that economic slumps are becoming less common. But some analysts, including veteran forecaster Danielle DiMartino Booth, are warning that the recession might already be here as job cuts accelerate.
3 things in tech
James Devaney/GC Images via Getty Images; Roger Kisby/WWD/Penske Media via Getty Images
Jack Dorsey's in his "I love Elon" era. Dorsey has loved and hated Elon Musk over the years. Now it looks like he's fawning over the Tesla CEO. Most recently, Dorsey announced he was no longer on the board of Bluesky, a prominent rival of Musk's X.
Satya Nadella could prove Microsoft doesn't need OpenAI. The company is reportedly working on its own in-house AI model called MAI-1. Its successful development could prove Microsoft doesn't need ChatGPT maker OpenAI to get ahead in the AI wars.
Tech titans have weird management habits. From Jeff Bezos' "two-pizza rule" to Mark Zuckerberg wearing the same outfit every day, here's a round-up of the unconventional practices employed by some of the world's best-known CEOs.
3 things in business
Wlad74/Getty Images
Nuclear power + data centers = "perfect marriage." Data-center operators like Amazon have sought out nuclear power to fuel soaring growth. Nuclear execs see it as a boon, but energy experts worry about the implications for the power grid.
How much Warren Buffett lost on Paramount. The Berkshire Hathaway investor says he lost "quite a bit of money" betting on the media company. He didn't disclose how much money he lost, but we tried doing the math. It could be around $1.5 billion.
a16z joins the Big Tech "fake work" debate. In an interview published Monday with Emily Sundberg for her Substack newsletter "Feed Me," Andreessen Horowitz general partner David Ulevitch called Google "an amazing example" of a corporation employing people in "BS jobs." Around half the tech giant's white-collar staff probably do "no real work," he added.
Apple revealed a new iPad Air at its "Let Loose" event on Tuesday.
Apple announced new iPad Air models with two size options.
The iPad lineup has been getting a bit stale, seeing its last major overhaul in 2022.
Apple unveiled the new iPad Air, the first of its newly overhauled iPad lineup, on Tuesday during its "Let Loose" event in California.
The iPad Air will now come in two sizes —a 13-inch display or the smaller 11-inch option.
The front-facing camera is now located on the side of the bezel for the first time.
Apple is looking to boost iPad revenue as the lineup grew stale. The last major iPad release was in 2022. In Apple's fiscal Q2, iPad sales missed analysts' estimates with a revenue of $5.56 billion — down 17% from last year.
The Black Lotus Magic: The Gathering Card is among the rarest and most sought-after among collectors.
YouTube/openboosters
An ultra-rare Magic: The Gathering card just sold for a record $3 million.
The "Black Lotus" card from 1993 is considered one of the game's most powerful and sought-after cards.
The new record exceeds Post Malone's $2 million purchase of a one-of-a-kind Magic: The Gathering card last year.
An ultra-rare Magic: The Gathering card just shattered records and sold for $3 million, according to CGC Cards.
The "Black Lotus" card sold is considered to be one of the most powerful and sought-after cards in the game, so much so that the card is banned from most competitive Magic: The Gathering game formats.
CGC Cards, a grading and certification company for trading cards and other collectibles, said last week the sale occurred via a private exchange between Adam Cai of Pristine Collectibles and "a mystery buyer."
"This particular Alpha Black Lotus is not only rare but also in impeccable condition, graded CGC Pristine 10. Its sky-high price demonstrates the high value collectors place on CGC Cards' Pristine 10 grade," CGC Cards said in an announcement of the sale last week.
Malone also acquired his own Black Lotus card in 2022 for $800,000. That card was "an artist proof" and signed by the original artist of the card, Christopher Rush.
The buyer of the $3 million Black Lotus card remains unknown.
The author, not pictured, has seen more older students in her classes.
Hill Street Studios/Getty Images
I've been a college professor for 20 years, and I'm seeing more Gen X and Baby Boomer students.
The older students have a ton of life experience that they bring to the classroom.
I no longer lecture to the class and instead let the older students take the lead.
I've been a college professor for over 20 years in the field of medical sociology, and lately, I've noticed something different about the students in my classroom. An increasing number of college students aren't kids anymore; they're older — many of whom are my generational peers.
In recent years, there's been an increase in older adults, including Gen Xers and Baby Boomers, heading back to classrooms. This means many people in their 50s, 60s, and even 70s who, for various reasons, feel like the time is right to head back to school.
So, how does this impact my college classroom? It's changed the way students learn and the way I teach.
Older people are in the classroom for different reasons
Today's learners represent greater diversity than ever before, and they all come to class for different resons. The older students I've chatted with in my classes cited demographic and economic factors, such as increased longevity, delayed retirement, career reboots, and a genuine interest in the pursuit of knowledge. Some simply want to keep up with the times, which helps them create a generational bridge between themselves and their grandchildren.
Older students also say they share the same learning objectives as their younger counterparts — like career enhancement or a desire to increase their creativity at work.
Many are rethinking the social trajectory of aging altogether, promising to remain active contributors to the economy and society for as long as possible.
I quickly realized they learn differently
I've noticed that older learners engage in ways that are different from traditional college students. For starters, most of them have completed an entire life cycle in the workforce, raised kids, and balanced a household's financial budget. All of this arms them with practical skills yet to be cultivated among their younger cohorts.
All of this life experience has allowed them to develop what's called crystallized knowledge, or a form of intelligence that draws from deep pools of facts, much like a database. Information rooted in crystallized learning can be transferred to new experiences, situations, and ideas. Essentially, this vast mental library is a "superpower" acquired in our advanced years that these students use in the classroom.
Older cohorts, unlike their younger classmates who have an intuitive relationship with tech, are also more inclined to want to know why and how technology benefits them. Beyond this, they want to understand their education's inherent, lasting meaning. Acknowledging the way academic ideas and theories fit into a worldview paradigm is an essential and critical part of the learning process for them, I found.
It has changed the way I lead my classes
Having older students with a wealth of knowledge and experience in their back pockets has allowed me to move from a traditional "sage on the stage" model of teaching to a more modern role as a "guide on the side." So instead of lecturing at my students, I now act as a facilitator while my students gear the conversation.
Working in a more collaborative environment presents opportunities for older students to sometimes take the lead in discussions, positively influencing younger learners. In this way, my older students have become great contributors as I tap them for insights by engaging in the mutual sharing of knowledge, co-teaching, or harnessing the power of personal storytelling.
In turn, my 20-something students are eager to reciprocate by taking the lead as designated tech mentors.
I'm still learning to bridge the generation gap in the classroom
As the college student body diversifies, I am looking for new ways to break free from traditional college teaching because I need to reach a broader group of people now.
Education can be a lifelong pursuit that challenges each of us to move outside of our respective comfort zones. Unexpected and even unlikely relationships are often forged, encouraging us to find meaning in new endeavors. These transformative experiences make learning worthwhile for all of us — at every stage of life.
A stock image shows a woman lying sick in the hospital.
Getty Images
A man said he killed his wife because he couldn't pay her medical bills, per a police statement.
Ronnie Wiggs said he choked his wife and covered her nose and mouth, the police statement said.
He faces a second-degree murder charge, punishable by up to life in prison, per Missouri law.
A man charged with strangling and killing his wife at the hospital said he did it because he couldn't pay her medical bills, according to a detective's probable cause statement.
Ronnie Wiggs reportedly told police he choked his wife and covered her nose and mouth to keep her from screaming while she was staying at Centerpoint Medical Center in Independence, Missouri.
She was there to get a new port for dialysis, per the statement issued by Detective Todd Winborn.
Winborn said Wiggs made the confession after being read his Miranda rights.
On Friday, medical staff at the hospital were alerted to a "Code Blue" around 8:30 p.m., local time. They found the victim unresponsive and with no pulse, the statement said.
The victim was not pronounced dead at the time but had no brain function, prompting medical staff to stop any life-saving measures, according to the statement.
The statement said that medical workers heard the victim's husband say: "I did it, I killed her, and I choked her."
Wiggs was subsequently arrested by a police officer working off-duty at the hospital, per the statement.
He admitted to killing his wife by choking her and covering her mouth and nose to keep her from screaming, before leaving the hospital, according to the statement.
He later returned with a relative, it said.
According to the statement, Wiggs told a police officer he'd tried to kill the victim on two other occasions while she was hospitalized, adding that he was depressed and killed her because he could not afford the medical bills.
Wiggs faces a second-degree murder charge and is being held on a $250,000 bond, Jackson County Prosecutor Jean Peters Baker said in a statement on Saturday.
Under Missouri law, a person convicted of second-degree murder faces class A felony charges with penalties of up to 30 years in prison, or life in prison without the possibility of parole.
Medical indebtedness is a growing concern for many Americans.
More than 100 million Americans, including 41% of adults, carried medical debt in 2022, according to a joint investigation by NPR and The Kaiser Family Foundation, based on a nationwide poll conducted that year.
A ferry on October 10, 2022, with the Kerch Bridge in the background.
AFP via Getty Images
Satellite images show Russia has stopped using the Kerch Bridge for military freight, analysts say.
The bridge has been a key military artery into occupied Crimea and southwest Ukraine.
But following Ukrainian attacks, Russia appears to be relying on other routes to supply its army.
Russia has all but stopped transporting military equipment via a strategic Crimean bridge, Ukrainian analysts say, based on satellite imagery.
In an examination of Maxar satellite images by open-source intelligence agency Molfar, analysts said that between February and mid-April, they saw no Russian freight trains carrying military equipment on the Kerch Bridge.
"This may indicate a reluctance on Russia's part to transport military cargo via the bridge after previous attacks and the use of alternative routes," Molfar said in a report.
It also said it saw no trains carrying military equipment on the bridge between May and September 2023.
Business Insider was not able to independently verify the findings.
But they appear to echo Ukraine's Security Service chief Vasyl Malyuk, who said in March that rail traffic had been reduced to a handful of passenger trains since Ukraine attacked the bridge.
The Kerch Bridge connects Russia to occupied Crimea by road and rail, allowing a direct path into the strategically crucial peninsula, as well as an alternative route into occupied southwestern Ukraine.
In the course of Russia's full-scale invasion, Ukraine has significantly damaged it twice. The first explosion, in October 2022, saw the bridge's road section collapse, and a subsequent attack in July 2023 using sea drones appears to have targeted its support struts.
Molfar's analysis suggests that the military usefulness of the bridge has been all but halted and that Russia is instead relying on land routes.
A brand new 450-mile rail line linking Russia's Rostov-on-Don to occupied cities like Melitopol is almost complete and "could pose a serious problem," Ukrainian military intelligence chief Kyrylo Budanov said last month, according to The Telegraph.
Molfar CEO Artem Starosiek suggested to BI that rail targets like this may now be more urgent to strike than the Kerch Bridge for Ukraine.
A potent symbol
An explosion causes fire at the Kerch bridge in the Kerch Strait, Crimea on October 08, 2022.
Vera Katkova/Anadolu Agency via Getty Images
Despite this, Starosiek said that "if I had the possibility to push the button and hit the bridge, I will do it right now."
That's because of the significance of the bridge, and not its current military usefulness to Russia, he said.
The Kerch Bridge has considerable emotional value — both to Putin, who sees it as one of his key achievements — and to Ukraine, which sees it as a hated symbol of Russian occupation.
Ukrainian officials have long talked about destroying it entirely.
Ukrainian President Volodymyr Zelenskyy has previously pointed to the bridge's military use as a basis for designating it a legitimate target.
On Tuesday, in a post on X, Ukrainian MP Inna Sovsun said that claims the bridge "wasn't being used for war & therefore not a legitimate target" emanated from a "powerful" Russian disinformation campaign "to prevent the destruction of the Crimean bridge."
It's unclear if Sovsun was reacting to Molfar's report. She did not immediately respond to BI's request for comment.
Responding to Sovsun's post, Molfar CEO Artem told BI it is clear Molfar is "not on the Russian side" and highlighted the data behind the work.
"As a regular Ukrainian citizen, I really want to hit this bridge because it's in my heart," he said. "But I think sometimes it's better to do something with more influence right now, and we always have time to destroy the bridge."
A recession by early next year could send stocks down 30%, says BCA strategist Roukaya Ibrahim.
Continued unemployment and headwinds from China's limping economy will be drivers of a downturn.
Wall Street veteran Gary Shilling holds a similar forecast, he told BI this week.
There are two factors signaling a recession by year-end or early 2025, and a downturn could spark a 30% correction in stocks, according to BCA strategist Roukaya Ibrahim.
The strategist said on Monday that the US stock market is highly valued, and growth the PE estimates will sink back to levels more in line with the five years before the pandemic.
"I think that raises the likelihood that they're more vulnerable to the downside. And our expectation if we do get this recession, late 2024, early 2025, the S&P 500 is most likely going to fall to around 3600," Ibrahim told Bloomberg TV on Monday.
According to Ibrahim, Friday's so-so jobs report for April, which showed employers added 175,000 jobs and boosted confidence in the soft landing narrative, actually contained worrying signs of a weakening economy. A closer examination of the report shows lower job openings, hires, and quit rates, signaling a shift in the narrative toward a recession.
"I think that there's still a runway for the soft landing narrative to continue over the coming months," she said. "But eventually, the unemployment rate is going to take higher and that's going to lead to concerns about a recession."
Another major headwind will blow in from China, where the government is unlikely to inject a large stimulus into the struggling economy, she said.
"[Chinese policymakers] haven't really signaled that there's going to be enough stimulus to really revive the Chinese economy. And so any sort of recovery that we see in the near term in terms of the global manufacturing cycle, that's going to be short-lived," she said.
Meanwhile, Ibrahim noted that China's impact on the US economy pales in comparison to its effect on Europe, but hurdles in European countries are going to prevent any durable recovery in global manufacturing.
"The euro area will not be able to escape a recession if the US falls into it, so this is a global phenomenon that we're expecting," she said.
Ibrahim isn't alone in calling a recession and a steep plunge in the stock market.
Wall Street veteran Gary Shilling, known for predicting the mid-2000s mortgage bubble, is also forecasting a 30% stock market crash by the end of this year, with a recession likely to crush speculative bets that have piled up in recent years.
The attacks took place just hours after President Joe Biden had urged Israeli Prime Minister Benjamin Netanyahu not to invade Rafah, where hundreds of thousands of refugees fleeing the war elsewhere in Gaza had made temporary homes.
But throughout its eight-month war, Israel has shown that it is willing to reject and ignore the advice of its most important international ally, the US.
That is despite Israel being the world's biggest recipient of US military aid. According to the reports, Washington gives it around $3.8 billion worth of weapons and defense systems each year.
"We're having this conversation about how horrible it would be for US credibility and US leadership if we fail to support Ukraine," Matt Duss, the executive vice president of the Center for International Policy, told Time in March.
"The same applies here. Our inability to exert any meaningful influence on Israel—a state that is hugely reliant on US support—is also enormously damaging."
A snub to Biden
The Israeli escalation came after hopes were raised of a cease-fire when Hamas said it accepted a deal to halt the conflict proposed by Qatar and Egypt.
John Kirby, the White House spokesman, said on Sunday that Biden told Netanyahu the US would "not support ground operations in Rafah" unless it shows how it plans to protect the lives of civilians.
Israel on Monday warned civilians in eastern Rafah to evacuate, indicating that an attack may be imminent. At the moment, its strikes on the Rafah appear more limited than the ground invasion Biden warned against Sunday.
However, they show that US pressure hasn't been enough to completely deter a Rafah offensive. Ahead of the assault, the US held back a shipment of ammunition to Israel, according to reports. But that didn't appear to be enough.
A growing rift between the US and Israel
Biden initially offered Israel the US' full support in the wake of the October 7 terrorist attacks by Hamas, which killed around 1,200 people and seized hundreds of mostly civilian hostages.
But as the war has progressed, the rift between Biden and Netanyahu on how to conduct the campaign to destroy Hamas has become more pronounced.
Biden is trying to restrain Israel and get it to wind down the campaign. Israel's attacks on Gaza have killed tens of thousands of civilians, according to Gazan health authorities, provoked a wave of protests on US campuses, and corroded support for Israel internationally.
Fear that the conflict could spiral into a wider regional war remains intense.
US President Joe Biden meets with Israeli Prime Minister Benjamin Netanyahu in New York City on September 20, 2023.
JIM WATSON/AFP via Getty Images
But Netanyahu sees things differently from Biden, and Israel has claimed that it remains determined to destroy the six Hamas battalions that it says are holed up in Rafah.
He's outright rejected calls for the creation of a Palestinian state after the war, a measure backed by the US and another key US regional ally, Saudi Arabia, which has held out the prospect of a deal to normalize relations if Israel agrees.
The US says that negotiating a cease-fire with Hamas remains the best way of securing the lives of the 128 Israeli hostages that remain in Gaza.
But Netanyahu appears to be prioritizing the political demands of his cabinet over the advice he's getting from Biden, say some analysts. His coalition is fragile, and he relies on the support of far-right lawmakers who are demanding an attack on Rafah.
"Netanyahu's calculation is much more focused on maintaining his coalition than he is on keeping Joe Biden happy," Aaron David Miller, a former US peace negotiator who is now at the Carnegie Endowment for International Peace, told The Wall Street Journal.
At the same time, Netanyahu is under pressure to secure the lives of the 128 Israeli hostages that remain in Gaza.
There remains the possibility that Israel, by attacking Rafah, is pushing for the upper hand in a cease-fire agreement, not positioning itself for a wider invasion.
The New York Times, citing Biden administration officials, said that the rapidly changing prospects for a cease-fire over the weekend are likely part of a bid to "gain leverage at the negotiating table with a clear resolution not yet in sight."
But if Netanyahu pushes ahead with his threats to invade Rafah, the consequences for the US could be grave, some warn.
The Gaza war has repeatedly threatened to spill into a wider regional conflict, and scenes of new civilian suffering in Rafah could intensify that threat. Meanwhile, Biden could see his global influence eroded if Netanyahu continues to ignore his warnings.
Dave Harden, a former mission director at the US Agency for International Development in the West Bank and Gaza, recently told the BBC that Netanyahu "almost treats Biden as some kind of inconsequential second secretary of a low-ranked European power."
The limits to his influence over Netanyahu's actions could soon become even more apparent.
Google is co-funding a $2.8 million guaranteed income pilot in California's Bay Area.
The program will give $12,000 over a year to 225 families to help them secure long-term housing.
Universal basic income programs have surged in popularity as a poverty-fighting tool.
Alphabet-owned Google is co-funding a pilot program that will give $2.8 million to 450 California families on the verge of homelessness to test whether the cash helps them secure long-term housing.
Google.org, the search giant's philanthropic arm, will help provide 225 families with $1,000 a month in guaranteed basic income for 12 months, on a rolling basis over five years. Another 225 families will serve as a control group and receive $50 a month over the same period.
Google's funding partner is J-PAL North America, a regional office of the Abdul Latif Jameel Poverty Action Lab, a global research center based at MIT.
The "It All Adds Up" program will hand the no-strings-attached cash to families that have recently taken part in housing programs provided by non-profits, and are one to three months away from losing their housing subsidies.
The program's website says that more than 70% of the families enrolled in the pilot are headed by single mothers of color with children under five.
NYU's Housing Solutions Lab will analyze the pilot's results to gauge how effective the payments are in helping families remain in long-term housing. The university's researchers will also assess the impact on participants' health and financial outcomes.
Google's financing role is part of its $1 billion pledge to fight the housing crisis in San Francisco and surrounding areas. Basic income projects have surged in popularity in recent years, in part because data shows they're an effective tool in combating poverty, and participants overwhelmingly spend the money on essentials such as food, housing, and transportation.
Google is known for the generous perks it provides employees, including free food, transportation, and a discounted on-campus hotel.
While it has cut back on perks in recent years, there's a stark contrast between the immense wealth of California's biggest tech companies and their well-remunerated employees, and the many locals struggling to afford basic living expenses.
Alphabet's stock price has jumped 20% this year as investors bet it will be a massive winner from the AI revolution. Revenues surged 15% to $80.5 billion last quarter, driving net income up 57% to about $23.7 billion.