Finance & California (July 25)
Hi all!
I’m happy to announce that Ragavan, our guest columnist, has returned from his trip, and will be able to post again!
Take it away, Ragavan!
Hi, this is Ragavan! I am the new columnist for Reed’s newsletter. My hobbies are playing the violin, investing, and spreading unbiased news to everyone I know! I am delighted and grateful that Reed has given me a chance to do what I love!
Local - California
Yosemite on Fire
An oak forest has been in flames for the past weekend, in Mariposa County, due to record temperatures. Firefighters say that the fire has spread 12 miles east of Yosemite, threatening its iconic sequoia forest. Many had to flee their homes due to the low humidity, because fuels tend to take moisture from the air. The California Fire Department used “17 helicopters, 225 fire engines, 58 dozers, and 23 water tenders” to manage the fire. Governor Newsom of California has declared a state of emergency for Mariposa County, due to the fires.
California & Masks
California COVID cases have been flattening, but it's too early to say whether we need a mask mandate again or not. However, Public Health Director Barbara Ferrer did notice “plateauing” in the last few days, she is positive that this will continue. If this continues, there could be a postpone of a universal mask mandate that was to be set on Friday.
Economy/Finance
Hi, from now on, I will be recommending one ETF (exchange-traded fund, with a bundle of stocks) per newsletter.
My recommended ETF: SPY
Why is Sri Lanka in a crisis?
The nation is on the streets in Sri Lanka, and the reasons are more than just medicine shortages. The government first blames the COVID pandemic as a reason for this crisis, as the Sri Lankan tourist industry is their main source of foreign currency. To get a further understanding of this, let us go back to 2009. At the end of the 2009 Civil War (With the Gov. pitted against the Tamil Eelam Tigers), the government decided to focus on providing its own citizens with goods, rather than exporting. This led to a big receipt for Sri Lanka, because its income from exports were low and the bill for imports were high. These factors resulted in the draining of Sri Lanka’s foreign currency reserve. These foreign currency shortages became serious in early 2021, when everyone heard about the Sri Lankan crisis. The government could no longer afford foreign products, and chemical fertilizers have been banned, which led to an all out crop failure. Now Sri Lanka couldn’t even produce its own food, and had to import it. All of these imports together kept on adding up for the Rajapaksa Government, and ultimately, they were overthrown for their failures. This ultimately shows how important foreign currency is for a government to be stable, and also why imports are essential.
Toothpaste and Toilet Paper
People are cash-strapped, and companies have found a new way to make consumers spend more in the threat of recession. According to IRI, household staple companies are now focusing more on promotions and coupons to make the average shopper keep buying name brands. Some companies even go as far as giving promotions on weeks that are not paycheck weeks, and making things expensive on paycheck weeks for consumers. Dollar Tree saw an increase of 16% in the second quarter of this year, due to their low-priced, off-brand items.
Sources
USA Today, Associated Press, BBC News, and Reuters Business.