Economy

Lexmark Sued a Company That Let Buyers Refill Their Ink Cartridges … and Lost

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The Supreme court in a 7-1 decision found that consumers can do what they want with the printers they buy, despite Lexmark forcing buyers to “sign” a “post-sale restriction” contract that the buyer won’t tamper with their patented product after they buy it.

The case is “Impression v Lexmark.”

Lexmark makes two similar types of printers: the cheaper one comes with ink cartridges that have a chip on them that prevents users from refilling them and putting them back in the printer, so the user has to go buy a new one from a store. Impression removes the chip so users can refill their cartridges.

Lexmark sued, saying that infringes on their property rights (which they said they maintained post-sale) that prevented third parties from modifying or repairing their products.

The court reasoned that if companies could maintain property rights preventing modification and repair after a product was sold, pretty much every repair shop in the country could be sued, the “smooth flow of commerce” would be impaired, and all parties involved would end up harmed.

“The United States Will Withdraw” – Trump

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“The United States will withdraw from the Paris climate agreement,” said Trump this week.

Trump said he wants to negotiate for better terms, and that other countries are given an economic edge by the current accord. The U.S., he said, suffers lost jobs, lower wages, closed factories, and diminished economic production because of the agreement.

European countries said that the agreement could not be renegotiated, and China reaffirmed its commitment to the deal.

The U.S. entered the agreement under Obama, who decided to say yes to it without submitting it to the Senate for confirmation — analysts believe it wouldn’t have passed the Senate.

Moody’s Lowers China’s Credit Rating

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China protested when the investors service lowered its credit rating 1 notch because of China’s rising debt load (which could be difficult to service) and slowing growth.

It is the first time in the 30 years since the end of the devastation caused by Mao and the Cultural Revolution that China’s credit rating has been downgraded at all.

However, when the average of the three big ratings is made (the usual practice), the Moody’s rating means less.

U.S.’s New Spending Bill

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The new bill has been approved, and it includes an extra $20 billion for defense. Immigration and border patrol get an 8% increase, but there is nothing for a border wall between the U.S. and Mexico.

The defense amount includes a 2.1% pay raise for military personnel.

There was also nothing in the bill about hot topics planned parenthood and sanctuary cities. Both keep their current funding for now.

The Republicans traded a lot of the things they wanted in order to get funding for defense and border security.

The National Endowment for the Arts, about which there was some buzz that the program would see cuts, got a slight increase.

The UN will get $640 million less from the U.S. this year, and funding for the Coast Guard was also reduced.

New Loonie Low

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The loonie might go as low as 70 cents to the U.S. dollar in 2017, according to experts.

Right now it’s around 73 cents, a 14-month low.

The fall of the loonie is tied to the same old things: a strong period for the U.S. economy, interest rate hikes by the U.S. Federal Reserve, and oil prices that are expected to stay low.

However, business in the U.S. isn’t doing amazing: This week, the U.S. PMI was below the forcast level, and construction spending contracted very slightly.

Meanwhile, Canadian manufacturing is doing well. Their PMI reported a 6-year high this week.

U.S.’s New Health Care Bill Passes

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217 – 213 was the vote that passed without motion to reconsider, but all 193 Democrats and 20 Republicans voted “Nay.”

Democrats made news by shouting “Hey Hey, Goodbye” on the Senate floor, and protesters staged public demonstrations against the move in the streets.

Trump said of the bill, “Make no mistake. This is a repeal and replace of Obamacare.”

The bill’s writing had several changes made in order to get passed, including that states can opt out of essential benefits, spending caps, hospital care, and pre-existing conditions requirements, on the condition that the state show it would improve the market to opt out.

The bill also cuts spending on Medicaid $880b over 10 years. This is where the figure of “24m more uninsured Americans” comes from, as reported by the CBO.

Puerto Rico: Bankrupt

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The largest municipal bankruptcy in U.S. history is taking place in the territory of Puerto Rico. $120b debt and pension obligations need to be restructured.

It owes $72m to creditors, many of which will have to eat the losses.

The 3 million-strong territory will close 184 schools as part of its cutting down of social services costs (students will go to other schools). Pensions are also expected to take a hit.

The Puerto Rican economy faces many challenges. They have lost 10% of their population in the last 10 years (mostly to the U.S.), and 20% of the island’s jobs. The current unemployment rate is at 12%. Because they are a territory and not a state, they do not have representation and have a hard time getting funding from the U.S. government.

Millennials Owe Record Debt

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The group owes around $1.1t of the America’s $3.6t in consumer debt, and consumer debt it getting closer to 20% of GDP.

Where is the debt coming from? A lot comes from rising student and auto loans.

In addition to the economic risk involved in this kind of debt, it also has effects on psychology and behavior: A large portion of Americans reportedly worry about defaulting on loans in the next 12 months, and over 50% of those worriers are millennials. The group, aged 21 to 34 in 2017, are also changing spending habits by doing more searching and more waiting for lower prices before buying smaller items. Analysts are concerned that this trend will be the same when the group, entering the age where people usually buy homes and start families, shop or hold off shopping for large purchases.

Consumer Spending Low

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Q1 for 2017 GDP was weak: 0.7% annualized.

Of that, one of the weaker components was consumer spending, which rose only 0.3%, the weakest level for spending since Q4 2009.