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Sunteck Realty - Redefining The Growth Path: Motilal Oswal
Multiple growth levers at play; Initiate coverage with a 'Buy' rating.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Sunteck Realty Ltd. is one of the leading real estate developers in the Mumbai Metropolitan Region, which is the largest micro-market in the country. MMR has reported 70% higher absorption than pre-Covid levels.
Sunteck’s multi-micro-market presence, luxury offerings across price points, and proven execution track record have made it one of the biggest beneficiaries of the strong demand.
Its three new project launches (out of the eight projects it acquired) resulted in 22% pre-sales compound annual growth rate during FY18-23.
The company is likely to post 25% CAGR over FY23-26 (reaching Rs 31 billion), as it is gearing up for 2-3 new project launches. Further, Sunteck’s strong balance sheet (debt-to-equity of 0.1 times), robust cash flows (cumulative operating cash flow of Rs 16 billion over FY23-26E) and recent platform with International Finance Corporation would enhance its future growth potential.
We arrive at our target price of Rs 640 based on the SOTP approach, indicating 41% upside potential. We initiate coverage with a 'Buy' rating.
Key risks:
A delay in the launch of new projects; and
Subdued sales velocity, which would lead to a longer monetization timeline and a lower discounted value.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Real Estate & Housing |
I am 70 and I have $1.4 million in traditional IRAs. Is it best to do $160,000 in Roth conversions for the next 1-3 years to reduce my high RMDs in about 5-10 years? That would put me in the 24% tax bracket and $330 Medicare premium rate. Please give me advice.
– Dennis
I do think you’re on the right track to at least be considering this. There are plenty of good reasons that Roth conversions could make sense. As I'm sure you're aware, a lot depends on the specifics of your circumstances and what your end goals are. I'll go through some of the considerations here that will hopefully help you decide what is best for you.
Do you need additional help with decisions like Roth conversions? Speak with a financial advisor today.
When Do Roth Conversions Make Sense?
There are several reasons why a Roth conversion could make sense.
From a tax perspective, Roth conversions make sense when you believe you are in a lower marginal tax bracket now than you might be in later. Since the money will be taxed at some point, why not decide to do it when you'll take the smallest tax hit?
Roth conversions also increase the control you have over your retirement savings since Roth IRA accounts aren’t subject to required minimum distributions (RMDs). This means it's up to you to decide when you'll withdraw money, based solely on your individual wants and needs.
Converting pre-tax accounts into Roth accounts may also make sense if you think you’ll end up leaving the money to heirs who are in a higher tax bracket than you. If they inherit a pre-tax account, they will have to withdraw the money and include it on their own tax return. By converting the money into Roth assets, you will increase the after-tax value of their inheritance. (A financial advisor can help you learn and decide on a Roth conversion.)
How to Decide
It sounds like you’re primarily thinking about the tax implications of Roth conversions, and possibly the flexibility that reduced RMDs may offer.
If so, I suggest estimating what you think your taxable income is going to be in a few years if you don't do any Roth conversions. Then, compare it to what it might be if you do. This will require you to make some assumptions about the return you expect for your investments since your RMDs are a function of your age and account balances. You can then compare your tax liability now with what you think it might be in the future. When you do this comparison, you'll also have to make some assumptions about future tax rates.
From a pure tax perspective, it would make sense to convert if you think paying 24% now will save you money over time. And yes, you are absolutely correct to consider ancillary effects like Medicare surcharges or changes to your combined income for Social Security taxation. (But if you need more help with your retirement income plan, consider matching with a financial advisor.)
Current Tax Rates vs. Future Tax Rates
Politicians decide tax laws, and I am the last person who would have you believe that I have any insight into what they may or may not do. I am also not in the business of predicting the future. However, my personal belief is that tax rates are likely to be higher in the future than they are today for a few reasons.
The simplest reason is the current tax law. The Tax Cuts and Jobs Act of 2017 (TCJA) is due to sunset at the end of 2025. Unless Congress extends provisions of the law, the personal federal income tax rates will return to pre-TCJA levels in 2026. This is simply the truth as we know it today. I personally use this as the baseline assumption when working through this decision with clients.
Then, there is logic. We are in a whole dadgum lot of debt as a country. We will eventually have to pay for that debt somehow. Couple that with the fact that our current income tax environment is very low compared to historical averages and it seems reasonable that we should expect taxes to go up in the future. (A financial advisor can help you interpret tax laws and how they could affect your retirement plans.)
Bottom Line
Roth conversions make sense if you believe you’ll save money by paying taxes now rather than later. They can also work if you want more control over your withdrawals or want to leave your heirs tax-free assets.
While you can't predict future tax rates, you’ll have to make some assumptions about what your tax rate may be later on in order to calculate whether Roth conversions are viable. My personal belief is that tax rates will go up at some point, and using the expiration of the TCJA can be a baseline to start with.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It's important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor in an interview.
Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you'd like answered? Email [email protected] and your question may be answered in a future column.
Please note that Brandon is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article.
Photo credit: ©iStock.com/ijeab, ©iStock.com/AJ_Watt | Personal Finance & Financial Education |
Drugstore workers around the country started calling in sick Monday to highlight a lack of support from their employers, protest organizers said.
The extent and impact of the demonstration, which is planned until Wednesday, were not clear as of Monday afternoon.
Pharmacists and technicians for dozens of drugstores had called in sick as of midday, said Lannie Duong, a pharmacist who is helping to organize the protest. She said organizers estimate that “at least hundreds” of pharmacists and technicians — mostly for Walgreens and other big retailers like CVS Health — were involved.
Pharmacists say they have been dealing with difficult working conditions for years. Those problems worsened during the COVID-19 pandemic, when stores saw waves of people seeking tests, vaccines and treatments.
Walgreens spokesman Fraser Engerman said Monday afternoon that the company had to close three of its nearly 9,000 U.S. locations “due to workforce disruptions.”
CVS Health spokeswoman Amy Thibault said the company was not seeing “any unusual activity regarding unplanned pharmacy closures or pharmacist walkouts.”
The retail pharmacists are not looking for more pay or vacation time, although they would support better wages for the technicians, said Duong, a California clinical pharmacist. She said the protest is more about giving employees the ability to do their jobs safely.
Pharmacists and technicians fill prescriptions, answer customer calls about drug shortages, work the drive-thru window and provide a growing amount of care and health counseling.
Pharmacists in many stores now help people quit smoking and monitor their blood sugar. Many also test and treat for the flu, COVID-19 and strep throat.
Then there’s vaccines. Many shots are administered year-round, but each fall drugstores see a wave of people seeking protection against the flu and COVID-19. This year, there’s also a new shot for people ages 60 and older for a virus called RSV.
Administering a lot of vaccines leaves less time to check and fill prescriptions, said Shane Jerominski, a former Walgreens and CVS pharmacist who helped organize this week’s protest.
He said companies often prompt pharmacists to ask people about their vaccine needs at the cash register.
“Pharmacists and technicians are being put in positions like the perfume salesman at every mall,” said Jerominski, who now works at an independent drugstore in California. “You’re trying to upsell with everyone who comes in.”
Drugstore representatives say they are listening to employees' concerns. Thibault said CVS Health is working to give its pharmacies room to schedule more staff. It also is trying to improve pharmacist and technician recruiting and hiring.
Walgreens has opened 11 processing centers around the country that aim to fill regular prescriptions for chronic medications and take some workload off store pharmacists.
Engerman also noted that the company has removed performance-based metrics for its pharmacists.
Ultimately, retail pharmacies need more staffing to avoid creating dangerous working conditions that lead to medication errors, Duong said.
“There’s no way around that,” she said.
___
The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content. | Workforce / Labor |
DoorDash added a 'tip nudge' feature in June, which reminds customers to tip.
It's the latest example of how common tip requests have become for food delivery.
Some gig workers say their base pay is just a few dollars for each order, making tips a key source of income.
Customers have long been asked to tip the people who deliver their take-out or groceries. Now, that pressure is even greater, thanks in part to "tip nudging."
At the center of the latest tipping debate is DoorDash. In late June, DoorDash rolled out a new app feature that allows delivery customers to increase a tip for drivers up to 30 days after a food delivery is completed. Customers that have not tipped will be prodded to do so. These nudging notifications are becoming more common — Uber Eats, Instacart, and Starbucks have similar messages for customers.
"These new nudges and reminders will encourage customers to tip and show their appreciation after their Dasher delivers an order," DoorDash executive Austin Haugen said during a media event in late June.
"Consumers who are waiting to see how the Dasher provides service … now have a way to actually reward Dashers," Shroff said.
Some DoorDash drivers say the new nudge might bother customers. But for many drivers, tips have become increasingly important.
"I think it would be annoying to 80% of customers," said Heather Taylor, who drives in Corpus Christi, Texas. But she added, it could improve her income.
Base pay for DoorDash orders is as low as $2, making tips a key source of income for workers
DoorDash's tip nudges come as some delivery workers have aggressively attempted to increase tips. Some delivery workers have tried to increase their gratuity by asking DoorDash customers for higher tips mid-delivery. In other cases, Dashers have shamed customers over low tips. DoorDash prohibits these sorts of actions.
DoorDash's nudges will appear for customers who have not already added a tip to their order. "Customers get a maximum of one nudge per order that does not include a tip," the company said in a statement. "This is not unique to DoorDash and is common practice across gig platforms."
Uber and Instacart are a bit more intrusive with their tip nudging.
"We've rolled out tipping prompts to encourage customers to consider increasing their tip anytime they rate a shopper five stars," Instacart said. "The prompts also encourage customers to recognize their shopper's hard work by leaving a tip if they initially choose not to leave one."
Uber Eats told Insider it has "invested heavily into improving the tipping experience for drivers and couriers" over the last two years. That includes adding tipping prompts throughout the user experience, including encouraging tips during inclement weather.
Uber Eats said it has made app improvements to improve tipping behavior, including encouraging customers to tip when placing the order, during the order, and after the order.
As a result, the average food delivery tip has increased by 20% from 2020 to 2022, Uber Eats told Insider.
DoorDash told Insider that base pay "generally ranges from $2 to $10 per order, depending on various factors including the estimated duration, distance, and desirability of the order. With tips and base pay, DoorDash said on average, Dashers make $25 per hour on active deliveries.
"Dashers on our platform are earning more today than ever before on delivery and have earned more per active hour every year for the past four years," DoorDash told Insider.
Many gig delivery workers make below minimum wage and say their earnings have fallen since the height of the pandemic
A 2020 study found many gig delivery workers are struggling to make minimum wage. The survey of gig workers from the Economic Policy Institute found that about 14% of gig workers made less than the federal minimum wage, and 29% earned less than their state's minimum wage. The survey was conducted in 2020, a banner year for gig workers due to demand for delivery early in the pandemic.
Sergio Avedian, a spokesman for The Rideshare Guy blog who delivers about 20 hours a week in Los Angeles, said his base pay ranges on DoorDash or Uber Eats from $1.50 to $3 per order — 50% less than the height of the pandemic when earnings surged due to demand. Other drivers speaking to Insider quoted similar declining base pay.
"When base pay is so low, we have to look for high-tip, low-mileage orders," he said. "We are literally working for tips."
Are you a delivery driver with insight to share? Got a tip? Contact this reporter via email at [email protected] or text at 714-269-8873.
Read the original article on Business Insider | Consumer & Retail |
The number of homes available to rent in the UK has fallen by a third over the past 18 months.
The sharp drop in the number of listings has helped drive up rents for new tenants by 11%.
Lettings agencies typically have 10 rentals compared to over 16 before September 2021, figures shared with the BBC by property website Zoopla show.
This has left people like Ruth searching for months without luck. "It seems completely hopeless", she said.
Ruth fell ill with fibromyalgia in 2015 and had to give up work. After splitting up with her long-term partner, she's been stuck in the house they shared in Kent whilst looking for somewhere smaller and more affordable to rent.
"I keep the browser open on Rightmove, Openrent, Zoopla, Facebook Marketplace and there has been nothing," she said. "I'm trying to keep positive but it's difficult."
Ruth is on benefits and has no guarantor. She believes this is stopping her being offered viewings.
"It made me feel like a lower-class citizen," she said.
As part of the BBC's Rental Health week, listeners, viewers and readers from across the UK have been in touch about their experience of the rental market at the moment.
Higher demand
The number of rental properties UK hasn't actually fallen. In fact, it has barely moved since 2016.
But people like Ruth are finding it difficult because they're competing with far more other people in their search for a home. Demand for rented accommodation has risen to more than fifty per cent above normal levels, Zoopla's figures show.
Zoopla draws its information from listings on its website, which cover 85% of UK properties listed for rent.
People who want to move but can't find anywhere new are having to stay put. That means their old place doesn't become available. And with people unable to move, fewer properties become vacant and appear in the estate agent's window.
Even if people do find somewhere suitable, they're likely to have to pay much more than they did before.
"We've seen a big increase in demand for rented housing from record high immigration, the economy reopening [after the pandemic]," said Richard Donnell, executive director for research at Zoopla.
"But at the same time, we just haven't seen much new investment by landlords in rented housing. And that's creating a real crunch in availability."
Higher mortgage rates, tax changes and new regulations for rented properties have made it less profitable for landlords to buy houses and offer them for rent.
Lou Valdini from York has been a landlord for 20 years. He used to rent out three homes, but now has just one. The mortgage on his property has gone up from £294 a month to £621 and says he's "not making any money" and is "actually losing an awful lot."
As well as the mortgage, Mr Valdini has to pay several thousand pounds a year for ground rent, insurance, service charges and agent's fees. He's just put his tenants' rent up to £645 a month.
"She hasn't missed a day's rent since lockdown, so I'm not going to put the rent up an extortionate amount for her," he said. "But it does mean I'm subsiding her."
Your device may not support this visualisation.
Large numbers of landlords are leaving the market - 11% of homes for sale on Zoopla were previously rented.
For others, short-term lets such holiday lets or Airbnb offer better returns than long-term tenants. Zoopla has seen a three-fold increase in short-term lets since 2019.
But with private renters spending on average almost a third of their income on rent, Mr Donnell and other experts believe rents can't go on increasing, as people simply won't be able to pay any more.
The government is due to introduce a new Renters' Reform Bill in England before the summer, which it says will redress the balance in the market and provide more security for tenants. Housing rules are different in each of the devolved nations, Scotland currently has tighter controls on landlords than the rest of the UK.
'I'm not able to live with my partner'
Emily, her partner, and their baby son MJ had been renting a two bedroom flat in Aylesbury. The landlord wanted to put up the rent at the end of their current tenancy but the family couldn't afford it. They began searching for somewhere else to live, but it's been frustrating.
"There's been times when I've said, 'Yes, I'll take this one'," said Emily, "I love it, it's perfect, and then they'll say, 'It's gone'." It has been, she says, "the most stressful time of my life - other than having a baby,"
After months of searching, the family had to move out of their home earlier this month. But they hadn't found somewhere new, so they had to move back in with their families - which means Emily and her partner staying under different roofs.
"On our actual relationship it's been really difficult," she says.
The family now have one goal: "To find a two-bed house, because then it'll have enough space for us three."
What are your renting rights?
- How much can my landlord increase the rent? It depends on your agreement but rises must be fair, realistic and in line with local properties and there's usually a months notice.
- Can my landlord evict me? Landlords need to follow strict rules such as giving written notice. Once the notice period ends, the landlord can start eviction proceedings through court.
- Can a landlord refuse people on benefits? No. DSS policies are unlawful discrimination. says charity Shelter. Some councils have lists of private landlords who rent to tenants claiming benefits.
There's more on your renting rights and where to go for help here. | Real Estate & Housing |
- The two oldest sons of former President Donald Trump are set to testify in the $250 million New York fraud trial against the Trump family and business.
- Donald Trump Jr. is set to resume speaking in the morning in New York Attorney General Letitia James' case.
- Eric Trump is expected to be called to the witness stand after.
- The former president himself and his daughter Ivanka Trump are expected to be called in the coming days.
Donald Trump Jr., who began his testimony Wednesday afternoon, is set to resume speaking in the morning. In his first day on the stand, Trump Jr. said he relied largely on the expertise of accountants and did not recall working on financial records at the heart of New York Attorney General Letitia James' case.
Eric Trump, described in the lawsuit as being "responsible for all aspects of management and operation of the Trump Organization," is expected to be called to the witness stand later Thursday.
James' civil lawsuit alleges a decade-long scheme to falsely inflate Trump's net worth by billions of dollars in order to get various financial perks, including tax benefits and better loan terms.
The case poses a massive threat to Trump's ability to do business in New York, the longtime headquarters for the Queens native's operations. In addition to seeking around a quarter of a billion dollars in damages, James wants to permanently bar Trump and his sons from running a New York business.
Manhattan Supreme Court Judge Arthur Engoron has already found Trump and the other defendants liable for fraudulently misstating the values of his assets on financial statements. The trial, which is taking place without a jury, centers on six other claims alleged by James. The defendants are appealing Engoron's pretrial ruling.
The brothers and co-defendants, who took over the Trump Organization as executive vice presidents after their father went to the White House in 2017, arrived at the Manhattan Supreme Court together on Thursday morning.
They are the first of four members of the Trump family expected to testify in the trial. The former president himself is expected to be called on Monday, and his daughter Ivanka Trump is set to take the stand on Nov. 8.
Ivanka Trump was originally listed as a co-defendant but was removed on statute-of-limitations grounds by a New York appeals court earlier this year.
This is developing news. Please check back for updates. | Banking & Finance |
Children's social care in England will be revamped with more early support for families, backed by £200m extra funding over two years, ministers say.
"Children in care deserve the same love and stability as everyone else," said Children's Minister Claire Coutinho.
But Mr MacAlister said the government's plan needed to go "further and faster".
The plan also faces wider criticism that many of the changes are being rolled out as localised pilots rather than nationally.
The trials of their killers highlighted the inadequacies of a system meant to protect children at risk.
The government wants to "put families at the heart of reform", with better support for vulnerable children "to stay with their families in safe and loving homes", and reduce the need for crisis intervention.
Pilots in 12 local authorities will deliver:
- More early support for families struggling with challenges such as addiction, domestic abuse and poor mental health
- More family-type placements for children in care, with relatives, friends or foster families
Other changes include:
- A recruitment drive and above-inflation rise for foster carers
- A simpler process and better training and support for relatives or friends who take on children
- Finding homes near family, friends and communities will be a priority for children in care
- The leaving-care allowance will rise by £1,000 from April
- Support for councils to recruit and retain more social workers
Mr MacAlister welcomed "notable measures" in the plans.
"Yet, without a whole system reset on the scale set out by the review, outcomes for children and families will remain stubbornly poor, more children will grow up in care and costs will continue to spiral," he said.
"The government's plan gets us started down the right path but it must go further and faster if it is to reach the tipping point of change that children need."
Annie Hudson, chair of the national Child Safeguarding Practice Review Panel, said that what happened to Arthur Labinjo-Hughes and Star Hobson "reinforces the importance of reform" across the children's social care system.
She welcomed the government's plan, describing it as "very broad in scope" and "bold in its intentions and ambitions".
She told the BBC Radio 4's Today Programme that the key to tackling issues within the children's social care system was the establishment of "multi-agency specialist teams" that work together "as one team".
"Unless we have that kind of approach we won't address some of the perennial problems of fragmented information systems, fragmented decision-making that we saw with Arthur and Star," she said.
Children's Minister Ms Countinho said the government was "setting out an ambitious set of packages to start a transformation in children's social care".
"What we're trying to do is make sure that families can get the early help that they need, they don't end up escalating in crisis and we can keep more families together," she said.
Rolling out some changes as local pilots was "to make sure we've got the exact right approach as we push forward", Ms Countinho told BBC News.
'Long overdue'
Stacy Porter, who took on the care of her niece, Jorgie, nearly five years ago, says the process was "incredibly confusing".
The 33-year-old feels lucky to live in Durham, where a council-run kinship team offers support and guidance "worth its weight in gold".
She says the government's promises of better training and support are "brilliant and long overdue" but is frustrated there is no commitment to a kinship payment, similar to a foster-care allowance, despite it being recommended in the review.
Kinship charity chief executive Dr Lucy Peake said there was "still a long way to go to equalise support".
"We especially need the government to commit to introducing financial allowances for all kinship carers," she said.
Since 2010, pressure on council budgets has seen early support for vulnerable families cut in many areas but the government now acknowledges early intervention can prevent problems escalating.
Shani Smith's four-year-old son, Ellis, has severe autism and she says the support the family have received through their local children's centre, in Camden, north London, has been crucial.
"The nursery have just been amazing," she says, "their staff have just been fantastic.
"Ellis now says four words - we never thought he was going to even talk. Early intervention was a big thing for him."
Camden council's director of children's services Martin Pratt says the focus on early intervention, involving teams of NHS staff, council workers, voluntary and community groups and parents, has meant "a dramatic and sustained reduction" in the number of children going into care in the borough.
Keith Glazier, of the County Councils Network, agrees the emphasis on preventative services and keeping families together is key. But the funding "falls short... while the pilots are only taking place in a select few areas".
National Society for the Prevention of Cruelty to Children (NSPCC) chief executive Sir Peter Wanless warned without "substantial national investment and a reform programme delivered at greater pace", the government's ambitions would not be realised. | Nonprofit, Charities, & Fundraising |
LONDON, July 7 (Reuters) - As Thames Water's financial troubles raise questions about such investments, Britain will next week try to persuade pension schemes to plough billions of pounds into infrastructure and start-ups in its next leg of post-Brexit reforms.
British Finance Minister Jeremy Hunt will on Monday set out the government's latest thinking on getting cash locked up in pension pots to work in the economy.
Britain is trying to re-establish its position in the world of global finance as it feels the impact of leaving the European Union's single market on one of its most important sectors.
Hunt is expected to announce a list of insurers and asset managers signed up in principle to invest more in alternative assets, a senior industry source said, during his annual speech to grandees of finance at the City of London's Mansion House.
The Conservative government's long-trailed policy focuses on persuading pension schemes to invest a portion of their money in infrastructure, start-ups and 'green' technology.
But the problems at Thames Water, which is battling for survival under 14 billion pounds ($18 billion) of debt, would leave some pension schemes that had made large investments in it embarrassed, said independent pensions consultant John Ralfe.
"It's not good news for a government that is banging the drum for companies investing in infrastructure," Ralfe said.
The finance ministry had no immediate comment on Hunt's speech, but the pensions industry has already said it opposes mandatory investment quotas.
A second senior industry source said they feared some reforms under discussion could introduce unnecessary risk to older, so-called defined benefit pension schemes, though there was some support for voluntary targets on defined contribution schemes where payouts for members were less certain.
These targets could include investing 5% of a pension pot in infrastructure and 5% in venture capital, but could mean higher fees due to their complexity. A public consultation on firmer proposals is expected in the autumn.
"They look like they are flailing around for a policy that might win them votes. But something as big as this will require primary legislation, and frankly, I don't think they will be able to fit this all in before an election," the source said.
Britain is expected to go to the polls next year, meaning time is running out to put forward new legislation.
Another executive at a global asset manager, who also declined to be named, said the most effective policy would be to combine pension pots in Britain's fragmented savings industry and emulate Australia's 'superannuation' pensions system, which could take time as previous attempts made slow progress.
"Nobody forced the Australians to invest in alternatives," this source said, adding that bigger pensions pots would likely be more inclined to allocate a proportion of their funds to riskier asset classes.
BREXIT IMPACT
Britain's financial services were largely cut off from the EU due to Brexit, with Amsterdam overtaking London as the region's biggest share trading centre.
UK chip designer ARM's decision to list in New York and not London has also piled pressure on Britain to bolster the City's attraction as a global financial centre.
An initial batch of reforms are already underway, and Hunt's speech will signal a new leg that also includes the outcome of a report which is expected to recommend ways to ease so-called 'unbundling' rules inherited from the EU.
These dictate how banks charge customers for research on companies to attract more listings. The EU is already easing its own version.
An update is also expected from a report on digitalising how stock and bond transactions are processed, which is expected to call for improvements in how companies communicate with their investors, and push for a fully paperless transaction trail, an industry source said.
Hunt could indicate if Britain intends to mirror Wall Street's move to halve the time for completing a stock trade to a day to increase efficiency and ease burdens on banks, the source added.
($1 = 0.7831 pounds)
Our Standards: The Thomson Reuters Trust Principles. | Banking & Finance |
Many younger people, struggling with high rents, student loans and low wages, are scratching their heads about why the government has decided to throw billions of pounds at people already wealthier than many of them ever will be.
A little over a week ago, chancellor Jeremy Hunt used his first budget to announce a multibillion-pound tax giveaway to Britain’s wealthiest pension savers – a decision Labour is vowing to reverse.
Ministers hope the overhaul of tax-free pension allowances will encourage experienced NHS consultants to work longer.
But the policy – forecast to cost more than £4bn between now and 2028 – has prompted a debate on whether a huge tax break for the top 1% of earners is a good use of taxpayers’ money, as the vast majority of UK workers will be unable to benefit.
The millennial generation (generally those born in the 1980s and mid-1990s) is shaping up to be in a significantly worse financial position by retirement age than many of their parents and grandparents.
And with the oldest now in their early 40s, many are arguably running out of time to save for retirement – if they can squirrel any money away at all – and are less likely to own a home, or receive a generous company pension.
The Observer asked UK millennials to get in touch via an online callout to tell us how much they were paying into a private pension .
Mike, 32, a solicitor from Yorkshire, was one of hundreds who responded. “I pay nothing, and have no savings,” he says. “It’s likely that I’ll die before I can retire.
“I earn an OK salary of £32,000, but because I live alone, my living costs are enormous – rent is over 45% of my salary. I have student loans to repay from university and law school.
“My work insists I have a car. I don’t have a wealthy family who can help out. So, if I paid into a pension, I would essentially have no money left for myself.”
A few did say they were on track to achieve a comfortable retirement income, having managed to accrue several hundred thousand pounds by middle age.
But almost all of these were white-collar workers with high-paying jobs in London or the wider south of the country, with generous company pension schemes.
However, many of those who say they are far behind with pension contributions are living in places the government has repeatedly said it wants to “level up”.
Among them is Josh, a 29-year-old IT worker living in Lincoln, which has recently been awarded £20m in levelling-up funding. “I have no pension plan at all, apart from contributing £80 a month to my workplace scheme since I started my current job last year. My employer pays in £120. I only have about £1,200 in my pot,” he says.
“I’ve been told you’re supposed to put 10% of your pay into a pension, but I’ve never earned enough to do that, despite having a specialist job in the education sector. I currently make about £25,000.”
The Pensions and Lifetime Savings Association advises that a single householder will need a retirement income of about £37,300 a year for a “comfortable” retirement – assuming they live mortgage and rent-free.
“This stat makes me feel quite upset,” Josh says. “I’m renting a council flat as I can’t afford to rent privately, or save enough for a mortgage. In this cost of living crisis, it’s hard to even buy a week’s worth of food – I’m struggling from pay cheque to pay cheque.
“Jeremy Hunt’s new pension scheme feels very unfair. I’m going to work until I’m a very old man.”
Only about a quarter of millennials have done “a great deal of planning or thinking” about retirement, according to a study by Standard Life.
Many respondents told us they were confused about how much they should pay into a pension, or how much they might need to even be able to afford to retire.
May, from London, works in transport and says she has only recently increased her pension contributions to 10% of her salary after accidentally reading about the importance of pension saving.
“I feel there is very little education about pensions,” she says. “I had the idea that my dad lives happily off his company pension, so surely so will I.
“Then I saw an article saying this isn’t the case for millennials, and now I’m worried. I didn’t even know people had pensions beyond their workplace one.”
Rather typically for someone her age, she has moved jobs several times and has lost track of six different small workplace pension accounts. “I have been trying to track three of them down. I do save, but a lot of that will go on housing, and if I have children, I can’t imagine being able to save.
“I look at the pensions triple lock, and what the budget just did, and think, ‘I won’t benefit in the way that current retirees do’. I feel like the old and young are being pitted against each other.”
Scores of millennials, many well into their late 30s and early 40s, shared the view that high housing costs were the main reason they could not afford to pay enough into their pensions, and that they were prioritising saving up for ever-rising house deposits.
Scott Wright, a 38-year-old retail manager from Sheffield, is paying £700 in rent a month and has a pension pot much smaller than recommended for his age because he is still saving for a home deposit.
“I have about £10,000 in there at the moment, and have reduced my monthly pension contribution to 10% of my salary about six months ago.
“My employer contributes 4%. This isn’t enough for the retirement I want – I’d have to contribute much more – but I’m balancing saving for a pension, saving for a house, and living. I can’t imagine I’ll ever retire fully.”
Hunt’s new pension allowances, he says, “are never going to affect me”.
Isabel*, a product manager from London, is among many who said they had opted out of paying into their workplace pension scheme in order to save for a mortgage deposit.
“I’m on £85,000 but I have zero pension savings. I always opted out,” she says. “In two years I’ll have enough for a deposit, and then I’ll start paying into a pension plan.”
Buying a home in a cheaper area will not be feasible, she adds, as her work is in bigger cities, and she worries about not being able to pay off what would be a large mortgage before retirement.
“I honestly have no idea how I’ll pay my bills when I’m retired – it’s a bleak prospect, so I try to not think about it. I honestly don’t know how I’m going to live.”
*Name has been changed | Personal Finance & Financial Education |
Byju's AGM To Approve FY22 Financials Set For Dec. 20
On the board's agenda will be to approve its financials for FY22, which have overshot its self-imposed September deadline.
Think & Learn Pvt., the owner and operator of Byju's, has called for an annual general meeting on Dec. 20 to approve its much-delayed FY22 earnings amid multiple headwinds for the edtech company.
It issued a notice to shareholders, stating that the company's 11th AGM will be held on Wednesday at 6 p.m.
On the board's agenda will be to consider and approve the standalone and consolidated financials for FY22, which have overshot the company's self-imposed September deadline. The company will also approve the appointment of MSKA and Associates (BDO in India) as its auditors, according to the notice seen by BQ Prime.
The company's FY23 financials were supposed to come out in December, but there is no notice of the same.
Once valued at $22 billion, Byju's has seen a rapid decline over the past 15 months, with valuation drawdowns as severe as below $3 billion, according to long-time backer Prosus.
It is facing legal battles, with a $1.2-billion term loan B fight with lenders, a National Company Law Tribunal insolvency petition filed by the Board of Control for Cricket in India, and Foreign Exchange Management Act allegations of violations on an amount of Rs 9,300 crore, which the company has said would only result in a "nominal fine".
It is in the midst of an organisational restructuring, with newly returned Chief Executive Officer Arjun Mohan at the helm. Its chief technology officer and chief financial officer have also been replaced recently, as part of the shuffle. | Consumer & Retail |
Sam Bankman-Fried’s Lawyers Fail To Shake Ellison’s Account About FTX Crimes
Practically since FTX and Alameda filed for bankruptcy in November 2022, Bankman-Fried has been suggesting Ellison was to blame.
(Bloomberg) -- Caroline Ellison emerged from hours of questioning by Sam Bankman Fried’s lawyer with her story largely intact, as the defense struggled to shake her testimony that the FTX co-founder masterminded a multibillion-dollar fraud.
Ellison, the government’s star witness against her former boss and boyfriend, appeared relaxed in the face of the high-stakes cross-examination during her third day on the stand in Bankman-Fried’s fraud trial in Manhattan federal court. Prosecutors claim the FTX co-founder orchestrated a scheme to funnel customer funds from the cryptocurrency exchange to Alameda Research, its affiliated hedge fund, where Ellison was chief executive officer.
Practically since FTX and Alameda filed for bankruptcy in November 2022, Bankman-Fried has been suggesting Ellison was to blame, heightening expectations for Thursday’s cross-examination. Anticipating her testimony, Bankman-Fried leaked her private messages to the media in an apparent effort to discredit her, getting his bail revoked for potential witness-tampering in the process.
But over the course of three hours, defense lawyer Mark Cohen only managed to score subtle points. He got Ellison to admit that Bankman-Fried didn’t oversee daily operations and that she herself was not a good manager. But Cohen didn’t elicit any bombshells that cast major doubt on the sprawling case prosecutors have built against Bankman-Fried.
“There are some nicks in the bark,” said Michael Weinstein, a white-collar defense lawyer not involved in the case. “But the defense is still chipping away at a big oak tree,” he added.
Responsibility
One of Bankman-Fried’s main arguments has been to claim Ellison was responsible for the amount of money Alameda borrowed from FTX, as well as failing to hedge the risk it created. Ellison agreed that there were times when Bankman-Fried did not participate in Alameda’s daily operations. Bankman-Fried founded Alameda and held a 90% interest in the fund.
“There were periods of time when he wasn’t paying attention to Alameda” or interacting with the firm’s executives, Ellison said in court. She had day-to-day responsibility for Alameda’s trading strategies, but “Sam gave the ultimate direction on what he thought we should do.”
Read More: FTX Latest: Ellison Laughed Nervously at Meeting Before FTX Fall
Ellison, 28, has pleaded guilty and agreed to cooperate with the government in the case against Bankman-Fried. Since Tuesday, she’s detailed how Bankman-Fried directed certain actions to conceal Alameda’s borrowing of customer funds, mainly for risky, illiquid investments. Efforts to hide the liability increased as the crypto markets stumbled in 2022. She said he asked her, at one point, to create alternative spreadsheets that would hide a multibillion-dollar hole in Alameda’s balance sheet.
Breakup
The defense successfully put some distance between Bankman-Fried and Alameda’s operation when they questioned Ellison about FTX customer deposits that were still wired directly into Alameda accounts after the exchange opened its own bank account. Ellison said she told prosecutors that “it seemed like he might not know” about those transfers.
Cohen suggested that Ellison’s romantic involvement with Bankman-Fried may have meant she didn’t communicate with him as often about conditions at Alameda. She acknowledged that their contact was affected by their spring 2022 breakup.
“I found it difficult to have in-person, one-on-one conversations,” Ellison said, “so I tried to avoid that and to avoid social situations with him.”
‘Ambition’
But she added that the two of them continued to have conversations over the messaging app Signal, including about Alameda.
The defense lawyer tried to draw a distinction between her personality and Bankman-Fried’s, suggesting she didn’t handle pressure as well, which may have affected her management of Alameda.
Ellison agreed that Bankman-Fried was more “driven” and “ambitious,” while she was often highly stressed and not effective as a manager. But she also said she felt that some of Bankman-Fried’s outlook rubbed off on her.
“I didn’t think of myself as ambitious before I started at Alameda, but I believe I became more ambitious,” she said.
Wrongdoing
As the cross-examination came to a close, Cohen focused on a November 2022 meeting with Alameda’s staff at which she came clean to them about the firm’s financial condition and told them it was likely to shut down.
“Were you admitting wrongdoing to the employees?” Cohen asked.
“Yes, I was,” Ellison said.
After Cohen finished his questioning, prosecutors also asked her about that meeting. Ellison said that, while Alameda employees seemed upset about wrongdoing but were grateful she had been open and honest with them.
Prosecutors have built their case by tapping into Bankman-Fried’s inner circle and reaching cooperation deals with some of his closest confidants. In addition to Ellison, Gary Wang, FTX co-founder and former chief technology officer, took the stand last week and testified that Bankman-Fried asked him to alter the exchange’s code to allow Alameda to borrow essentially unlimited amounts from FTX accounts. Nishad Singh, FTX’s former engineer chief, may also take the stand in the fraud trial. Wang and Singh have also pleaded guilty to fraud.
Read More: The Key Players at Sam Bankman-Fried’s Historic Fraud Trial
--With assistance from Allyson Versprille, Hannah Miller, Teresa Xie, Beth Williams and stacy-marie ishmael.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
Is it best to work with an advisor who’s independent or part of a large firm? I am not investment savvy and I’m entering retirement. I need to make sure I hire someone or a firm that is going to help and maybe is somehow insured.
-Sharon
That’s a great question, Sharon. I’ll provide some context that I think will help you as you look for an advisor, whether that person works for a large firm or a smaller independent practice. Although I am independent (which I and my clients specifically like), I don’t think one is inherently better than the other.
It’s more about the firm’s culture, the individual advisor, the services they offer as well as your preferences as the client. Ultimately you may be comfortable with one over the other and that’s perfectly OK. It’s your money and you should be happy with where you keep it. (And if you need help finding a financial advisor, this tool can help match you with one.)
Is the Firm Insured?
You specifically brought up insurance. The way you phrase the question makes me think it may be worthwhile to explain how firms might be insured. The two most common types of insurance that you might want to know about are SIPC and E&O.
SIPC Insurance
The Securities Investor Insurance Corporation, or SIPC, provides a similar type of insurance to brokerage firms that FDIC does to banks. SIPC insurance protects you in the case of the brokerage firm fails. Notably, it does not protect you from the risk of market loss.
SIPC normally covers accounts at both large and small independent firms. This is something you can ask and is easily verified.
Errors and Omissions Insurance
This is professional liability insurance. It protects the firm and advisor in the event a mistake or omission on their end causes harm to a client and the client takes legal action against them. It helps ensure they can actually pay you any judgments that may arise.
Again, large and small firms alike often have E&O insurance and it’s perfectly OK to ask about it. (And if you’d like to hire a financial advisor but don’t know where to start, consider matching with one here.)
What Is a Custodian?
You may not be aware, but most independent firms utilize larger institutions’ infrastructure for accounts and investments through custodial agreements.
In the investment world, a custodian is an institution that handles client accounts and securities. Independent advisors that work with individuals rarely take possession (custody) of client funds themselves, but instead use an established firm for backend logistics. Some of them are household names like Charles Schwab, Fidelity or TD Ameritrade (which is owned by Charles Schwab). Others, like Altruist, SEI and TradePMR exclusively serve independent advisors and don’t have a public-facing retail division so you may not have heard of them. (This tool can help match you with an advisor who might meet your needs.)
How Are Firms Regulated?
Whether a firm is large or small they are subject to regulatory oversight. So are the individual advisors that work there. You can check a firm and its advisors on the SEC website.
Depending on how much money they manage and other criteria, investment advisory firms are required to register either with the SEC or state regulatory authorities.
What About the Services They Provide?
Make sure the firm offers the services you want. For example, you may want everything from your mortgage, insurance, retirement savings and bank accounts all managed under one roof. A smaller independent firm is less likely to do that, although some do.
Of course, the flip side is that you are more likely to be just another customer at a larger firm. If it’s important to you to have a closer relationship with your advisor, an independent is more likely to provide that. However, just because someone works for a larger firm also doesn’t mean that they won’t provide quality service with a personal touch. (A financial advisor can help with a range of needs and services, including retirement planning, investment management and estate planning.)
Bottom Line
There are safeguards in place at both large and small firms that protect clients and their money. Of course, that doesn’t make it risk-free. You should always verify your advisor and their firm, and ask questions about anything that might concern you. You should be comfortable with where your money is kept and who is managing it. Ultimately, the decision to work with an independent advisor or a large firm often comes down to personal preference.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email [email protected] and your question may be answered in a future column.
Please note that Brandon is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article.
Photo credit: ©iStock.com/ArtistGNDphotography, ©iStock.com/PeopleImages
The post Ask an Advisor: Is it Better to Work With an Independent Advisor or One From a Large Firm? appeared first on SmartReads by SmartAsset. | Personal Finance & Financial Education |
Web3-focused software technology company Aave Companies is rebranding to Avara, its founder Stani Kulechov told TechCrunch exclusively.
The crypto parent entity best known for supporting Aave Labs, Aave Protocol, its native stablecoin GHO and decentralized social network protocol Lens, among others. About $8.66 billion of liquidity is locked in Aave across eight networks and over 15 markets like Ethereum, Avalanche, Optimism, Polygon and Base, according to its website.
Before being called Aave and now Avara, the company was known as ETHLend. But this is the company’s final name change, Kulechov shared on TechCrunch’s Chain Reaction podcast. Aave will still exist but through Aave Protocol and Aave Labs, under Avara’s umbrella brand.
Avara also shared its strategic acquisition of Los Feliz Engineering, the team behind Ethereum-based crypto wallet Family. The terms of the deal were not disclosed.
Avara plans to use the Family crypto wallet acquisition as a means to help users enter the web3 ecosystem. “We really want to send a signal that we are in a time now with web3 where we’re building that interface on the existing infrastructure where people can actually interact in a way where it’s familiar to them,” Kulechov said.
The crypto wallet is currently in a beta phase, but users can download it to try it out. This is the company’s second acquisition after obtaining Sonar, a metaverse mobile application, in December 2022.
But the rebrand and acquisition signifies the companies want to “do more” and focus beyond DeFi by bringing web3 to “all users globally with different kinds of use cases,” Kulechov said. This new mission nods at the rebrand, Avara, which symbolizes a Finnish colloquial meaning for “seeing more than you see,” Kulechov said.
“We’ve always been known for building decentralized finance and using the blockchain for creating smart contract-based protocols,” Kulechov said. “More recently, with Lens Protocol, we’ve been building virtually social, so decentralized social media, that basically any developer can actually build their applications on top.”
When looking at Avara’s entities, Kulechov said he’s most excited about Lens because there are “micro communities” within the protocol like web3 social apps Orb and Phaver. Lens has been in beta since May 2022, but Kulechov is hopeful that it will transition out of it by the end of 2023.
This story was inspired by an episode of TechCrunch’s podcast Chain Reaction. Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to hear more stories and tips from the entrepreneurs building today’s most innovative companies.
Connect with us: | Crypto Trading & Speculation |
- Retailers argue that the swipe fees incurred by Visa are simply too high for smaller businesses to survive.
- Meanwhile, those in support argue that Visa actually supports merchants.
Americans are increasingly using plastic to spend their money, enabling Visa to grow its dominance in the credit and debit card space.
People in the U.S. spent $6.7 trillion through credit and debit cards in 2019, up 88% from 2009, according to a 2020 report by HSN Consultants. Of those transactions, more than 60% were made with Visa cards.
This has helped Visa grow into one of the world's most valuable companies. As of Oct. 19, Visa has a market valuation of more than $491 billion. Its shares are also up more than 170% over the past five years.
However, some retailers argue that Visa's success has come at the expense of merchants who rely on them to process payments. Some have even said the fees imposed by Visa are too high for businesses to survive.
"I know a lot of business owners and it saddens me because so many people have come to accept it as it is what it is," Hub Convenience Stores CEO Jared Scheeler said. "These prices are so ridiculous. The amount we pay in swipe fees is so high that we have to do something about it, somebody has to do something about it."
Swipe fees collected by Visa and Mastercard ballooned to $67.6 billion in 2019 from $25.6 billion in 2009, according to data from the National Retail Federation. The overall processing fees paid by U.S. merchants to accept all card payments jumped to $116.4 billion in 2019, up 88% since 2009.
"This is a central part of the problem with their dominance," Merchants Payments Coalition executive committee member Doug Kantor said. "The exact way they were set up was to be this dominant price-setting entity and the fact that it's gone on this long is a problem for everybody else in the economy."
Visa declined to comment on this story.
To be sure, those in support of Visa argue the company is on the merchants' side.
"Visa on some level is a victim of their own success in the sense that they're so ubiquitous and so secure and so easy to use that people begin to take it for granted," MoffettNathanson analyst Lisa Ellis said. "Visa's business structure is very balanced and if anything is actually skewed, believe it or not, towards the merchants. They actually get the majority of their revenue from the banks and the ecosystem that's supporting the merchants."
Watch the video to find out more about how Visa makes money. | Consumer & Retail |
Unsuitable childcare causing UK to miss out on up to £38bn in growth, says thinktank
Unsuitable childcare causing UK to miss out on up to £38bn in growth, says thinktank Figures obtained exclusively by Sky News show that 27% of mothers would like to work more hours if they had access to suitable childcare.
The UK is losing out on economic growth worth up to £38bn every year because of unsuitable childcare, exclusive figures reveal.
A report from the thinktank Centre for Progressive Policy (CPP), shown to Sky News, shows the lost economic output is between £27bn and £38bn, the equivalent of 1% of GDP.
Their figures are translated from the survey results of 2,545 mothers which found that 27% said they would like to work more hours if they had access to suitable childcare.
If those hours were realised it would result in at least £9.4bn in additional earnings per year, with an estimated economic output the equivalent of 1% of GDP.
The CPP are calling for childcare to be viewed as physical infrastructure.
Ben Franklin, director of research and policy, described it as "a big economic prize".
"At the moment, the government can borrow to invest in hard physical infrastructure, so railways and roads," he said, "but we think there's a strong economic case for treating childcare in the same way.
"The gains to be made from supporting mums and employment are substantial.
"And the gains over a child's life, developing their own ability in terms of education and the future human capital of the country.
"So we think that childcare should be treated the same as other forms of hardhat infrastructure, that are often seen as more sexier within the corridors of power."
Based on the survey results, CPP also estimate that an additional 540,000 mothers have been prevented from getting paid work.
It also found that 880,000 have cut down their hours, and 470,000 have quit their jobs.
Cherry Fitzsimmons has described the 'madness' of the childcare system
Cherry Fitzsimmons is a paediatric occupational therapist in London - an understaffed sector in the NHS - who had twins last year.
She describes the "madness" of a "flawed system" that has forced her to take an extra six months of unpaid leave because of childcare costs.
"In my area (at work) we're looking at overseas recruitment and paying for visas from our budget," she said.
"It just feels ironic that my team are paying for visas for people to come from other countries to help fill the gaps, but then I can't work because I can't afford to because of this childcare system."
She says by the time her three children go to school she would have spent around £100,000 on nursery fees.
"I think the government know that it's not working," she said, "and this feels like negligence, when they're just not doing anything about it."
Three and four-year-olds in England are eligible for either 15 or 30 free hours a week depending on whether their parents work.
The funding, however, given to nurseries to cover this is often not sufficient.
Kate Wright, who runs Little Buddies preschool in Lowestoft, has had to take on extra work as a cleaner to help pay staff wages.
"I get more money cleaning toilets than I do working and owning a business," she tells Sky News.
The living wage is set to rise in April and she says she is "starting to get really worried".
"That's going up by 92 pence per hour, bear in mind we've got six members of staff doing six hours a day 38 weeks of the year, and the funding isn't going up in accordance with that." she said.
"The ratios for two year olds is one to four, and the two year old funding is only going up 17 pence per hour, which is only 68 pence - so where is the deficit of the 24 pence coming from to pay for the members of staff?"
Figures from the Early Years Alliance show that over a third of childcare settings say it is likely that rising costs will force them to close this year.
Kate Wright has had to take on extra cleaning work to pay staff wages
Claire Richmond, who runs Goslings Day Nurseries Ltd in Coventry, says she has had three members of staff who have left to go and work in Sainsbury's.
"People are exiting the sector and getting a job at Sainsbury's on more per hour," she said.
"Because the accountability and the responsibility that's put on us is massive. Those things rightly should be in place, we're very happy to carry out those things.
"But we just need to have a fair amount coming in to fund amazing staff… the numbers just don't stack up."
She says her nursery is only just breaking even and is calling for business rates to be scrapped for childcare settings as a financial aid.
Claire Richmond has had staff leave to go and work in Sainsbury's
'On the brink of collapse'
Joeli Brearley, from campaign group, Pregnant Then Screwed, describes the childcare sector as "on the brink of collapse".
She says the system is also exacerbating gender inequality with "a big exodus of women from the labour market".
"We have a skills shortage in the UK and yet we know we have hundreds of thousands of women who are now stay at home mums, who desperately want to work but they can't afford to do so," she said.
A Department for Education spokesperson said: "We recognise that families and early years providers across the country are facing financial pressures. That's why we have spent more than £20bn over the past five years to support families with the cost of childcare.
"This government has doubled the entitlement for working parents of three and four-year-olds to 30 hours and introduced 15 free hours a week for disadvantaged two-year-olds.
"On top of this, working parents on Universal Credit may be eligible for help with up to 85% of their childcare costs through Universal Credit to support with the costs of childcare." | United Kingdom Business & Economics |
Capital Goods - Winds Of Change; Powering Up For Sustainable Growth: Motilal Oswal's Thematic View
Correction in raw material prices bodes well for sector particularly for companies where fixed-price contracts have dominant share
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
The capital goods sector has started benefitting from the government’s initiatives towards incremental capex spending, revival in select pockets of the private sector, improving growth outlook from international geographies (particularly GCC nation) and favorable raw material prices.
Government has already set the ball rolling by undertaking long-term capex across key areas such as transmission, clean energy, railways, Make in India, production linked incentive, defense indigenisation, et al. until FY30, which provides a strong addressable market for capital goods companies.
Energy transition-related investments too are driving capex across domestic as well as international markets. The combined capex of government and listed corporates increased to Rs 21.3 trillion in FY23 from Rs 14.3 trillion in FY19.
This is budgeted to grow to Rs 26 trillion in FY24 and will move up further with these initiatives. As per our analysis of BSE500 companies, private sector capex has also started growing over last two years and will get further boost from PLI led capex, expected investments in energy transition initiatives as well as growth seen in data centres, electric vehicle etc.
Thus, we believe that the entire capex is falling in place for the next decade that will augur well for the capital goods companies.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Energy & Natural Resources |
Trump Org Credited Wall Street Skyscraper’s Valuation to a Real Estate Executive Who Just Disavowed It
The $735 million appraisal for 40 Wall Street was based on the assessment of Cushman & Wakefield official who on Tuesday denied ever providing it
During the summer of 2016, before his surprise upset presidential election victory, Donald Trump’s company valued the price of his Wall Street skyscraper at more than $735 million.
The Trump Organization claimed to have arrived at that figure using a capitalization rate provided by the then-executive director of Cushman & Wakefield, one of the world’s largest real estate services firms.
On Tuesday, that executive, Douglas Larson, testified that he never gave the advice attributed to him.
The Trump Organization’s assertion, reflected in Trump’s 2016 statement of financial condition, indicates that it is “[b]ased on information provided by Douglas Larson of Cushman & Wakefield on 11/23/2015, which reflects a rate cap of 3.04% for [40] Wall Street.”
New York Attorney General Letitia James accused the Trump Organization of fraudulently inflating the value of 40 Wall Street from $540 million to $735 million for 2015, and trial evidence suggested that the cap rate is at the heart of the alleged deception, a figure of great significance in determining the building’s value.
Larson testified that the Trump Organization never tasked him to provide any appraisal, a task that he performed for the lenders. But the company’s financial statements claimed that the executive relayed the cap rate estimate over the phone.
“Based on a telephone conversation with Doug Larsen on 2/1/2016, since the ground lease still has about 190 years left, the effect on the cap rate is minimal,” the financial statement claimed. “To be conservative, we increased the cap rate .25% to 3.29%.”
- New York vs. Trump on Day 9: Trump Org Considered Puffing up Properties With a Presidential ‘Premium’
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But Larson denied that any such phone call took place.
Asked if he ever worked with then-Trump Organization controller Jeffrey McConney, Larson responded flatly: "No, I did not."
During cross-examination, Larson was shown his interview with the attorney general’s office from late 2019, where he emphasized that he was not responsible for the $735 million valuation.
“It’s not my valuation, yes,” Larson said on Oct. 29, 2019. “It could be his valuation or Trump’s valuation, but it’s not my valuation.
Trump’s legal team showed the passage to emphasize their position that valuations are subjective, and the former president’s rosier estimates weren’t fraudulent, an argument rejected by the judge.
When asked if valuations are an art rather than a science, Larson pushed back at the metaphor: “It’s an estimate of market value by the purchaser based on experience, knowledge of the market, and their best estimate at the time they’re doing the appraisal.”
His cross-examination remained ongoing by press time.
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Walmart+, the U.S. retailer’s Prime competitor, is introducing a new program designed to help those on government assistance take advantage of its membership benefits, like free shipping and delivery, gas discounts and access to streaming service Paramount+. The company announced this morning the launch of Walmart+ Assist, a way to purchase a Walmart+ membership at 50% off ($49 per year, or $6.47 per month) for those on government assistance.
Typically, a Walmart+ membership costs $98 per year or $12.95 per month, plus applicable taxes.
Those on the Assist membership will still be able to utilize the full range of Walmart+ features and perks, which include free shipping on Walmart.com purchases with no order minimum (excluding most Marketplace items), free grocery delivery with a $35 order minimum, free returns from home (no printing or repackaging required), savings of 10 cents per gallon at 14,000 locations (including Exxon, Mobil, Walmart and Murphy stations), a free Paramount+ subscription, ad-free video streaming with Pluto TV, mobile scan & go in-store for contact-free checkout, and other special offers and savings for members only, including early access to Black Friday deals.
To qualify, new and existing Walmart+ members must first visit Walmart.com/Plus/Assist to verify their eligibility through a third-party verification provider called SheerID. Customers will be taken to the SheerID website to fill out their eligibility form, then returned to the Walmart site or app to continue enrollment upon completion. They can then sign up for the Assist membership at the discounted rate.
Walmart’s discounted program comes several years after Amazon announced a similar program for Prime members.
In 2017, Amazon debuted a low-cost version of Prime for those on government assistance, also bringing the cost down by about half. Amazon’s program at launch supported those on a number of government assistance programs, including Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and Women, Infants, and Children Nutrition Program (WIC). The full list now also includes Medicaid, SSI (Supplemental Security Income), Direct Express Prepaid Debit Card, TTANF (Tribal Temporary Assistance for Needy Families), NSLP (National School Lunch Program), LIHEAP (Low Income Home Energy Assistance Program), NAP (Puerto Rico’s Nutrition Assistance Program card –Tarjeta de la Familia).
Walmart+ Assist is similar in terms of its support, as its FAQ notes the eligible programs include SNAP, WIC, Medicaid, SSI, TANF, TTANF, NSLP and LIHEAP.
Walmart has worked to address the needs of those on government assistance in other ways prior to this launch, as it was one of the first retailers to participate in the USDA’s SNAP Online Purchase pilot in 2019. The company began the test by allowing customers to pay for their online grocery orders using their SNAP (Supplemental Nutrition Assistance Program) benefits — more casually known as food stamps. The program has since expanded to include support for using SNAP benefits for both order pickup and delivery.
Today, Walmart announced that with the addition of Alaska, it’s now the first retailer to accept SNAP benefits in all 50 U.S. states. | Consumer & Retail |
Years after it got initial approval, Jacobi Asset Management’s bitcoin spot exchange traded fund (ETF) went live this week, making it the product the first of its kind in Europe.
This is only the latest sign that Europe is making steady progress towards integrating crypto assets inside traditional financial instruments. Meanwhile, the U.S. Securities and Exchange Commission (SEC) is dragging its feet by delaying deadlines for similar applications.
That’s not to say there hasn’t been any progress state-side. According to Eric Balchunas, senior ETF analyst at Bloomberg, bitcoin futures ETFs do exist in the United States, but they only account for about $1 billion in total AUM, “So that does exist, but the spot is the holy grail. The spot bitcoin ETF [will be] major,” he said on TechCrunch’s Chain Reaction podcast.
The difference between a spot ETF and a futures ETF is that the former actually purchases and holds the underlying assets. It’s a more popular approach than futures-related ETFs. Spot gold ETFs, for example, Balchunas said, have consumed the majority of gold ETF activity, and bitcoin could be traded similarly if it gets regulatory approval.
For an advisor, a bitcoin spot ETF wouldn’t be the main part of their portfolio; it would be like hot sauce — a small bit on top. Eric Balchunas, senior ETF analyst, Bloomberg
Lots of money is potentially up for grabs. “The stakes are high” for the various entities working to bring a spot bitcoin ETF to the American market, Balchunas argued. About 10 firms are competing to get the first bitcoin spot ETF approved in the U.S., and BlackRock, which has more than $9 trillion in assets under management, filed for its own offering in June.
BlackRock also partnered with Coinbase in 2022 to provide its institutional clients with access to cryptocurrency, and later launched its own spot bitcoin private trust for U.S. institutional clients.
“The question is, will [the SEC] approve [a bitcoin spot ETF], when will they approve it and how many they’ll approve at once,” Balchunas said. Right now, he and other Bloomberg analysts estimate 65% odds that the regulator will approve one or more by the end of the year. The odds are even higher for next year.
“Everything is evolving towards that,” Balchunas added. “I don’t think it’s going to completely change the face of crypto. I think what it does is offer a portal for a big lump of money that largely would not probably deal with bitcoin, [but] might now. That would be the $30 trillion that financial advisors manage in America.”
In other words, a bitcoin spot ETF could be considered the bridge that connects trillions of dollars to crypto. “Not everyone is going to cross that bridge, but you’ll certainly find some traffic there,” Balchunas said. | Crypto Trading & Speculation |
As many as 80% of aging adults in America lack the financial resources to pay for two years of nursing home care or four years of an assisted living community.
That’s according to a new study from the National Council on Aging (NCOA) and the LeadingAge LTSS Center at the University of Massachusetts Boston.
Additionally, 60% of older adults — or 24 million households — would not have the funds to pay for in-home long-term care, despite the fact that they would prefer to “age in place,” per a report from NCOA.
Researchers analyzed 2018 data from the Health and Retirement Study, which was a joint effort by the National Institute on Aging and the Social Security Administration that surveyed some 20,000 U.S. adults about their net wealth.
When the researchers first began looking at the data several years ago, they were initially surprised to see that so many older adults were at significant risk of financial insecurity, Dr. Jane Tavares, a lead researcher at the LTSS Center at UMass Boston, told Fox News Digital.
“There is a common misconception that older adults are asset-rich, but we have found in our research that this is not generally true,” she said.
Dr. Tavares also noted, “We expect that there will probably be some worsening once we examine data for the time period covering the COVID pandemic.”
Rising costs of assisted living
The national average cost for assisted living is around $4,500 per month, according to the 2021 Cost of Care Survey from Genworth, a Virginia-based company that helps older adults with financial planning.
“The cost of assisted living can vary significantly depending on the location and level of care needed,” said Dr. Steven Norris, a senior health and care expert who is also the medical director at Transitions Care in Chicago, Illinois.
“As the population continues to age and demand for these services grows, it is likely that the cost will continue to rise,” he said.
With the widespread shortage of qualified caretakers, facilities are having to pay more to secure the right people, the doctor explained.
“Additionally, recent increases in minimum wage requirements and changes in overtime payment legislation are increasing assisted living costs,” he said.
The cost could range from $3,000 in rural areas to $7,000 to $9,000 in urban locations, noted Bennett Kim, a senior housing expert and CEO of Las Vegas-based ZNest. It’s an online platform designed to help older adults find places to live.
Upscale assisted living could be higher than $12,000 per month.
“For decades, there has been a lack of awareness of how expensive assisted living really is,” Kim told Fox News Digital.
“Some people thought health insurance would cover long-term care costs, while other people optimistically believed that they would live a healthy life forever.”
The pandemic hasn’t helped matters, as the industry saw a surge in operating expenses, Kim said.
“Assisted living companies had to continually raise prices just to keep up with their costs, but retirees did not see the same growth in savings or investments,” he added.
Several factors contribute to financial struggles
Middle-aged and older adults are now facing a very different financial landscape than the generations before them did, Tavares pointed out.
“For starters, greater longevity comes with a higher cost, as well as a higher risk of facing serious chronic health conditions,” she told Fox News Digital.
Additionally, the increases in household income and assets have not been large enough to keep up with the rising costs of living, health care and inflation, she added.
And even when older adults do have assets, they are often tied up in property and not readily available to help them cover costs, Tavares explained.
The changing retirement model has also contributed to gaps in savings.
While past generations had private, employer-sponsored pensions that provided predictable payments, many Americans now rely on 401(K) accounts, which leave individuals responsible for saving enough money to cover their retirement years, Tavares said.
“With all of this combined, few older adults have any kind of significant savings in retirement accounts — and most can’t afford long-term care insurance that would help cover the expensive costs of assisted living or nursing home care,” she explained.
“This means there is a greater reliance on Social Security income and social safety net programs like Medicaid.”
Potential solutions exist — but many seniors aren’t aware of them
There are over 2,500 public state and federal benefit programs designed to boost older adults’ economic security — but many of them are not being used to their full extent, according to Tavares.
“Many of these programs are under-enrolled, with individuals not realizing they exist or not knowing about their eligibility status and how to apply,” she told Fox News Digital.
In 2020, an estimated $30 billion of public benefits went unused each year, per the National Council on Aging.
“These programs are an important buffer for financial insecurity, and it’s critical that they are properly utilized and maintained by state and federal governments,” Tavares said.
Education is seen as another key component of improving seniors’ financial stability.
“This means educating individuals about retirement savings and strategies for determining when to file for Social Security that take into consideration their sources of retirement income/savings, health and realistic retirement goals,” Tavares said.
“Individuals need to be thinking about and preparing for how they will weather a likely financial shock as they age,” she added, “and policymakers need to be prepared for the heavy financial burden that will likely fall on public state and federal benefit programs and begin crafting solutions for handling that burden.”
Some older adults may have the option to tap into their home equity to fund their retirement, but Tavares said they need resources that help them understand and navigate that process.
There is also a clear need for policymakers to improve long-term care coverage, according to Tavares.
“With private long-term care insurance being unaffordable for most older adults, it is key to begin considering combined public and private initiatives that can put the cost of coverage within reach and make it more appealing to consumers,” she said.
Future research is planned
The LTSS Center at UMass Boston and the National Council on Aging plan to continue updating these reports as new data becomes available.
Researchers are already working on analyzing the impact of the COVID pandemic on these financial trends, Tavares said. | Personal Finance & Financial Education |
A New Crypto Banking System Arises Under The Shadow Of A Regulatory Crackdown
As a result, crypto’s new banking system is more fragmented, less US-centric and, at times, less advertised.
(Bloomberg) -- Two months after the collapse of Silvergate Capital Corp. and Signature Bank, a new banking landscape for crypto companies is taking shape amid an expanding crackdown on the industry in the US.
In the US, crypto firms are turning to a handful of smaller regional lenders to open bank accounts. Customers Bancorp Inc., a Pennsylvania lender, has become a popular destination. Swiss and Asian banks are also playing a bigger role, though they still remain selective about their crypto clients. In the UK, where access to banking has also worsened, companies are instead turning to payment-service providers to bridge the gap.
As a result, crypto’s new banking system is more fragmented, less US-centric and, at times, less advertised. Bloomberg News spoke to more than a dozen of industry participants, including banks, digital-asset exchanges, trading firms, startups and consultants to compile a list of banks globally that are receptive to clients in the sector.
The changes come as mainstream US banks became warier of processing wire transfers and holding deposits for the crypto industry, following last year’s turmoil and amid growing regulatory scrutiny. La Jolla, California-based Silvergate and New York-based Signature, two banks that supported the bulk of the industry’s money transactions, closed in March, setting off a scramble among crypto firms to find alternatives.
“Now it’s more of a handful of names, where you have to go and do your own due diligence because they are not as well-known, at least for the crypto community,” said Rich Rosenblum, president and co-founder of crypto trading firm GSR.
This week, the US Securities and Exchange Commission sued crypto exchanges Binance Holdings Ltd. and Coinbase Global Inc. for breaking its rules, delivering a one-two punch against the biggest players in the industry. Both firms denied the allegations and vowed to defend themselves in the court. Binance.US, which Binance claims is run as a separate entity, is set to lose its banking access later this month after the trading platform was cut off by its US payment and banking partners.
Read More: SEC’s Coinbase Lawsuit Heralds Deepening US Crypto Crackdown
“These high-profile lawsuits call attention to different issues that have been widely discussed and acknowledged among industry participants,” such as the legal status of certain tokens, said John Popeo, partner at Gallatin Group, which advises banks and other firms on regulatory issues. “It could create additional challenges for firms to find banking partners, as these partners will engage in due diligence and look at the additional issues related to the firms.”
Crypto exchanges have historically had difficulties finding banking partners to store deposits and facilitate money transfers for the buying and selling of digital assets. Losing banking access means crypto would be further isolated from the traditional finance industry.
Banking access for crypto firms in the US has become worse than in the pre-2018 era, when digital assets was still a nascent industry, said J. Austin Campbell, adjunct professor of Columbia Business School, who runs an independent consulting business for crypto firms. Banks want to open operational accounts for corporate use without touching users’ money, “but that’s not enough to run the business,” he said.
Still, the rebuilding and stitching together of a crypto-banking system is slowly happening. One upside is that the diversification of banking-service providers means the new system could be more resilient. While banking isn’t as seamless as it was a year ago, should one of the today’s banks stop supporting crypto, “you wouldn’t have this rejiggering of the system,” Rosenblum said.
Explainer: Why Crypto Still Needs Banks
Here are some of the banks crypto firms are turning to, broken down by region:
The US
Customers Bancorp
Some of the biggest crypto firms have leaned on Customers Bancorp, a West Reading, Pennsylvania-based lender led by founder and Chief Executive Officer Jay Sidhu.
The bank pushed into serving crypto clients in late 2021, launching a real-time payments platform, similar to Signature’s Signet, that caters to trading firms, exchanges and institutional investors, allowing them to settle US dollar transfers underlying crypto transactions seven days a week.
Circle Internet Financial Ltd., the issuer of the USD Coin stablecoin, now uses Customers’ CBIT payments network for real-time settlement of dollars. Crypto exchanges Coinbase and Bitstamp USA Inc., as well as trading firm GSR, have been Customers clients.
A Customers spokesperson declined to comment.
Cross River
Cross River Bank, a Fort Lee, New Jersey-based firm known for its ties to financial-technology firms, has provided banking services to some crypto firms, such as Coinbase and Circle. It also offers real-time money movement, with a limit of $1 million per transaction.
While Cross River has seen an increase in requests for partnerships and businesses looking for a bank to place their deposits, the firm is considering only companies with existing relationships and “blue-chip customers who are integral to the fintech ecosystem,” Josh Vlasto, a spokesperson for Cross River, said in an email.
Western Alliance
Western Alliance Bancorp, based in Phoenix, has a blockchain and digital-assets team that serves clients in the sector. It also offers real-time payments capability, powered by Tassat.
The bank takes a “very deliberate and measured approach to who we bank through the network,” a Western Alliance representative said in an email.
Axos Financial
Axos Financial Inc., based in Las Vegas, opens bank accounts for some crypto firms. It’s listed as one of the banks used by Binance.US, according to the SEC’s lawsuit against the exchange. The bank earlier had broader ambitions of pushing further into crypto, including supporting retail crypto trading and launching a stablecoin — plans now on hold.
“Given the change in the market that have occurred over the last year, Axos has no current plans to support retail crypto trading, provide clearing and transaction services, or launch a stablecoin,” Johnny Lai, senior vice president of corporate development and investor relations at Axos, said in an email. “We do not expect those plans to change in the immediate future.”
FV Bank
FV Bank International Inc., registered in the US territory of Puerto Rico, was the first bank of the commonwealth to roll out a digital-asset custody service. It allows clients to hold their Bitcoin and US dollars within the same bank account. It is launching the settlement of certain crypto tokens to US dollars, using third-party prime brokers for the exchange.
Asia
Standard Chartered
Standard Chartered Plc has made a major push into some emerging markets. It holds majority stakes in two UK subsidiaries, crypto-trading platform Zodia Markets and custodial unit Zodia Custody Ltd., the latter of which closed a $36 million funding round led by Japan’s SBI Holdings Inc. in April.
London-based Standard Chartered offers banking services to a “very select” group of digital-asset service providers and supports them in offering on- and off-ramping to users of their platforms, said Rene Michau, global head of digital assets.
“We see digital assets as an important part of the future of financial services,” Michau said in an emailed statement. The bank’s services to digital-assets firms include corporate accounts, client-money accounts and foreign exchange, predominantly located in Singapore, Hong Kong and the United Arab Emirates.
DBS
DBS Group Holdings Ltd. is Singapore’s biggest bank and the largest listed company in the city-state. It was founded in 1968, three years after Singapore was separated from Malaysia and became an independent country.
The bank offers deposit accounts to regulated digital-asset and blockchain firms. It also provides on- and off-ramping to the bank’s corporate, institutional and accredited clients through its own digital platform, DBS Digital Exchange, it said in a statement.
ZA Bank
ZA Bank Ltd., Hong Kong’s biggest virtual bank, plans to offer token-to-fiat currency conversions over licensed exchanges. It also plans to provide account services to the digital sector.
Founded by Chinese billionaire Ou Yaping and others, ZA Bank will act as a settlement bank for clients to allow withdrawals in Hong Kong, China and US currencies after they deposit crypto tokens with exchanges. Currently it offers on- and off-ramping to the two licensed exchanges in Hong Kong, OSL and HashKey.
Europe, the UK
BCB Group
London-based BCB Group offers customers access to its payment network for digital-asset outfits. Known as Blinc, the network operates like Silvergate’s now-defunct SEN for the European region, allowing members to pay each other instantly across multiple currencies.
The payment-services provider offers business accounts, over-the-counter crypto and currency trading, digital-asset custody and treasury services for clients including exchanges, market makers, lenders, funds, brokers and traders.
Bank Frick
Bank Frick & Co., based in Liechtenstein, offers banking services such as business accounts for both established firms and startups in the blockchain and cryptocurrency sectors. It also offers trading and custody of select tokens, including Bitcoin and Ether.
Binance Holdings, the world’s biggest crypto exchange, has been discussing a proposal to let some of its institutional clients keep their trading collateral at a bank, with Bank Frick mentioned as a potential intermediary for the service, Bloomberg News reported late last month. Bank Frick declined to comment.
Read More: Binance Explores Letting Some Traders Keep Collateral at a Bank
SEBA Bank
Swiss firm SEBA Bank AG offers individuals, companies and institutional clients access to trading, investment in structured products, custody and borrowing for digital and traditional assets.
Like a traditional bank, SEBA has fixed-term deposit accounts and payments services, but it also offers crypto-investment trackers and a credit card for spending crypto. The Zug-based bank saw increased website traffic globally, but more so in the US, after the collapse of Signature and Silvergate, the company said in March, adding that crypto firms were applying for its accounts.
Read More: Crypto Scours Globe for Banks to Replace Collapsed US Lenders
“We have experienced an uptake in inflows as a direct result of the current market landscape because we recognize that clients’ digital wealth should be managed in the same way as their traditional finances,” said Yves Longchamp, managing director at SEBA Bank.
Sygnum Bank
Spread across Switzerland and Singapore, Sygnum Bank AG specializes in digital assets for institutional and private qualified investors, corporate clients and financial institutions. It offers custody, brokerage, tokenization, asset-management, lending and business-banking services, facilitating deposits in Swiss francs, euros, Singaporean dollars and US dollars to buy, trade and hold cryptocurrencies.
“We continue to see a significant increase in onboarding inquiries from institutional investors, asset managers and blockchain projects looking to diversify their crypto investments with a trusted Swiss partner like Sygnum Bank,” said Mathias Imbach, the firm’s co-founder and group chief executive officer.
Clear Junction
Payment-services provider Clear Junction offers financial institutions including cryptocurrency companies access to UK accounts, virtual international bank account numbers, payment networks, currency exchange and electronic wallets. Companies can receive deposits for the purchase of digital tokens, enable payment acceptance using traditional bank transfers and hold funds under their own names using what’s known as a correspondent accounts.
--With assistance from Kiuyan Wong.
(Updates to reflect changes to Binance.US’s banking access in sixth paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
“You get on an exchange for as long as you can, until they shut your ass down,” says Knox. “You quickly [run out of exchanges], so you sit on a lot of useless money. The whole ‘crypto is permissionless and censorship-resistant’ thing is a bunch of bullshit.” (Knox suspects she has ended up on a blacklist at Plaid, a provider of technology plumbing to large crypto exchanges like Gemini, Kraken, and Robinhood, leading to the repeated bans. Freya Petersen, spokesperson for Plaid, says no such list exists, but that all firms that wish to use its services are subject to a standard risk assessment process, factoring in the industry in which they operate.)Meanwhile, banks’ increasing unwillingness to work with crypto-related businesses is causing problems for firms trying to make it easier for sex workers to interface with the crypto world.In February, SpankChain (a company to which Knox is an advisor) was forced to close its SpankPay service, which made it easy for creators to convert crypto into regular money, after payment processing firm Wyre terminated a partnership. The justification was that SpankChain had violated the terms of another company with which Wyre partnered, Checkout.com, which has tried to distance itself from the porn business.WetSpace, a crypto-centric alternative to OnlyFans established by Rae, searched for months to find a bank willing to provide a business account, but was repeatedly rejected because of its ties to both the adult and crypto industries. “It was a double whammy,” says Rae. “We spoke to every dang bank there is.” Eventually, after appealing directly to the board of one bank, WetSpace managed to secure an account, but months later received a notice suggesting that support may soon be rescinded. The company is “riding on borrowed time,” explains Rae.Without a banking partner, crypto firms cannot accept dollar deposits in return for services, or manage the conversion of crypto to dollars for clients, or pay their employees and vendors—they cannot function. The viability of the plan to develop a parallel financial system free of intermediaries is dependent, therefore, on a rapidly disintegrating truce with those same intermediaries: the banks and payments firms. For sex workers, as long as crypto cannot be used to pay for goods and services, its usefulness will remain limited, because it can be thwarted at the junction with conventional finance.The efforts of sex work advocates are better invested, says Stabile, in campaigning for new laws that would make it illegal for banks to discriminate against sex workers on the basis of their profession, than in developing an alternative financial system. “The first step is banking stability,” he says.There is broad sympathy for businesses facing banking access issues on both sides of the aisle, explains Stabile, who spent time in May meeting with members of the US Congress. The political right is concerned with the de-banking of gun manufacturers and oil companies, and the left with the treatment of cannabis businesses and marginalized workers. Lobbying groups like the FSC hope to capitalize on this accord, a rarity on Capitol Hill, to the benefit of the adult industry, even if legislation specific to the plight of sex workers is “too great a political hill right now.”The biggest hurdle, explains Stabile, is the “snail’s pace” at which Congress moves. In April, Democratic Senator Jeff Merkley introduced the SAFE Banking Act, which calls for mandatory provision of banking services to legal cannabis businesses. In July, the Fair Access to Banking Act was tabled by Republican Senator Kevin Cramer, with the aim of penalizing banks that refuse to do business with law-abiding citizens. Neither bill has progressed beyond the point of initial introduction.In the absence of real legislative progress, the adult industry will continue to exist “like a weed,” says Stabile, growing in “the cracks and hostile conditions that other businesses would never survive in, because it has to.” In crypto, sex workers found a temporary means of survival, but one whose billing as a permanent remedy proved to be inaccurate.“Some sex workers might see crypto as a form of financial liberation,” says Van Meir. “But the majority probably just see it as a necessary evil—one among the few options they have left.” | Crypto Trading & Speculation |
Fed Or ECB Policy Error Is Now A Big Risk, Allianz’s Subran Says
For Subran, a danger of error might materialize if central banks keep policy too tight for too long.
(Bloomberg) -- The prospect that US or euro-zone policymakers might overdo tightening is now one of the most prominent threats to the global economy, according to Allianz Chief Economist Ludovic Subran.
Speaking to Bloomberg Television, he said his outlook for a so-called “soft landing” hinges on policymakers not going overboard in their drive to tame consumer prices.
“It depends vividly on central banks’ determination to kill inflation,” he said. “One of the main risks to the economy is the risk of policy mistakes from central banks, and this toxic policy mix risk between fiscal and monetary tightening at the same time.”
Policymakers from advanced economies are still showing a concerted bias toward more interest-rate hikes, with both the US Federal Reserve and the European Central Bank poised to deliver increases later this month. In Australia, officials kept borrowing costs unchanged on Tuesday, but held out the possibility of more action if needed.
For Subran, a danger of error might materialize if central banks keep policy too tight for too long. He referenced a discussion among officials at the ECB’s annual retreat last week.
“What would happen if the ECB were to hold rates high on top of adding a couple more hikes for the full of ‘24 to see the full transmission?” he asked. “This for me would qualify for a policy mistake because that would mean we would start seeing the real economy effect of this embedded tightening, so that would be already too late for the central bank to pivot.”
Memories of policy mistakes by the ECB this century still linger. Twice, in 2008 and 2011, officials began policy tightening cycles that were soon aborted.
Questioned on lingering risks to the financial system, Subran said that “they haven’t disappeared.”
“I stand by my call to be very cautious with the liquidity situation” for at least a year, he said. “I still see a lot of leverage and a lot of concern about credit risk, and to be fair a lot of financial institutions also that need to continue to do the right testing. Remember, financial accidents could also come from exogenous shocks, think about climate risks.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
- Americans applied for U.S. passports in record volume in 2023 and passport processing delays are lengthy as a result.
- The State Department recommends applying for a passport at least six months ahead of travel or passport expiration.
- A routine passport now takes 10 to 13 weeks to process, plus another month for mailing.
- There are some ways to get your passport faster, however.
While the State Department expects delays to shorten through the rest of 2023, travelers should continue to plan well ahead, a Department spokesperson said.
The Department's message to U.S. citizens: Apply at least six months in advance of your planned travel or passport expiration date, the spokesperson said.
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More Americans planned trips abroad this year as their pandemic-era health fears waned and countries largely reopened their borders to visitors.
The State Department issued a record 22 million passports in fiscal 2022. It's on track to break that record again in fiscal 2023, which ends Sept. 30, a spokesperson said.
Secretary of State Antony Blinken testified to Congress in March that the volume of passport applications has been "unprecedented." Applications typically ebb and flow with the seasons, peaking from March to late summer, but "basically it's full time now," Blinken said.
The State Department also had to restaff positions that were reassigned or eliminated when passport demand cratered in 2020 at the beginning of the Covid-19 pandemic.
The State Department's six-month recommendation takes into account longer processing times, as well as padding for things such as mailing on both ends of the process.
Americans should review current processing times before making any definite or nonrefundable travel plans, a State Department spokesperson said.
A routine passport application currently takes 10 to 13 weeks to process, according to the State Department. A traditional passport — a passport book — costs $130. First-time applicants must pay an additional $35 acceptance fee.
Travelers can pay more for faster service. Expedited passport processing costs an extra $60. Expedited passports currently take seven to nine weeks.
For comparison, before the pandemic, it took two to three weeks for expedited passports and six to eight weeks for routine passport processing, the State Department said. It hopes to return to that cadence by year's end.
The time estimates for expedited and routine passports haven't changed since March 24.
Processing estimates don't include mailing times. That may take an additional month — up to two weeks for applications to arrive at a passport agency or center, and another two weeks to receive a printed passport.
Travelers can buy expedited delivery of a new passport book by mail — for delivery in one to two days — for an extra $19.53.
They can also send an application more quickly by purchasing Priority Mail Express service from the United States Postal Service. The price varies depending on the area of the country, according to the State Department.
In some circumstances, travelers may be able to speed up the process further.
Life-or-Death Emergency Service is available for people with a qualified emergency who are traveling abroad in the next three business days. Urgent Travel Service is for those traveling abroad within 14 calendar days for those who haven't yet applied for a passport, or five days for those who have already applied.
Whether you've opted for routine processing or some form of expedited help, you can check your application status online and sign up for email updates.
U.S. passports are generally valid for 10 years. They're valid for five years if issued before age 16.
In some cases, Americans may not be allowed to travel even if their passport hasn't yet expired. Some countries disallow entry if a passport's expiration falls just a few months after a trip's end date.
Many countries in the Asia-Pacific and Middle East require at least six months of validity for permission to enter. Other areas, such as Hong Kong and Macau, require one month.
"Even if you don't have a trip on the books yet, but your passport is going to expire sometime in the first half of 2024, I'd absolutely just renew it now," Sally French, a travel expert at NerdWallet, previously told CNBC.
You may also need to apply for a separate visa to enter certain nations, a process that requires additional time and planning. The State Department has information about passport and visa requirements for specific countries. | Consumer & Retail |
Rampant food inflation and poor state support are forcing people in Britain to make impossible choices, says the Joseph Rowntree Foundation.
Millions in Britain are having to cut down or skip meals amid the cost of living crisis, according to a charity.
The Joseph Rowntree Foundation (JRF) found 5.7 million low-income households don't have enough money for food, which it called a "horrendous new normal".
It said "exceptionally high food inflation" and inadequate government assistance was to blame, forcing those on the lowest incomes to make impossible choices about how often they eat and which foods they buy.
Around 7 million households were going without items such as food, heating or basic toiletries, it found.
Meanwhile, three-quarters of homes on Universal Credit - the UK government's social security payment - had gone hungry or skrimped on meals in the last 30 days.
The findings come before the new inflation figures on Wednesday.
Price increases have eased off - with the Consumer Prices Index rising by 8.7% in the 12 months to April, down from 10.1% in March, according to the Office for National Statistics - but they remain stubbornly high.
"Things are simply not getting better," wrote the JRF in a press release.
"The number of low-income households going without essentials, going hungry and in arrears has not budged in over a year, and this is likely to have long-lasting consequences on their family life, finances and health."
Record food inflation, which reached 19% during the charity's survey, replaced energy prices as one of the largest contributors to inflation in April 2023.
These increases have been blamed on the Ukraine war, with Ukraine and Russia major wheat producers, but climate change is also playing a role, hammering crop yields.
The JRF found 2.3 million low-income households on Universal Credit were forced into changing the kind of food they buy, including making less nutritious choices.
Almost 1.5 million low-income households, more than four in ten on Universal Credit, also experienced a poor diet, increasing the risk of future poor health.
The JRF urged the government to implement an "Essentials Guarantee" to ensure that state support covered life essentials.
"Without this, many families face the bleak prospect of running to catch up but never being able to because they are in a spiral of debt, rising prices and worsening health," said Rachelle Earwaker, Senior Economist for the charity. | Inflation |
Pubs in England and Wales will be able to continue selling takeaway drinks after the government decided to keep Covid licensing rules.
They were allowed to serve customers through hatches when they were forced to close under pandemic laws in 2020.
The rules were due to expire on 30 September, but the BBC has been told they will now continue.
The move - aimed at saving the trade from financial ruin - was previously extended twice during the pandemic.
It is understood Prime Minister Rishi Sunak stepped in to enable the current licensing rule to continue.
The Sun newspaper, which first reported the story, quoted a source saying the prime minister had "listened to the industry and heard them loud and clear".
The rules, which were granted in July 2020, allows pubs without an off-premises licence to sell takeaway alcohol without having to apply to their local council for permission.
The change allowed them to keep trading during Covid restrictions.
Emma McClarkin, chief executive of the British Beer and Pub Association, whose members own over 20,000 pubs, welcomed the decision, saying landlords would be pleased not to have to apply for additional licences.
"This was a measure introduced to support our pubs during difficult times and the prime minister must recognise that these businesses are still under immense pressure," she said.
Martin McTague, national chair of the Federation of Small Businesses, said the move would provide pubs with an "extra revenue stream to mitigate the rising costs".
With the rules having been expected to expire at the end September, pubs that wanted to continuing serving takeaway pints would have had to apply to local councils for permission.
Before its decision to keep the rules in place after all, the Home Office had said that it had sought opinions from councils, residents' groups and drinks retailers - and that the majority of those who responded were in favour of returning to the pre-pandemic rules.
There were concerns from pub groups that such a move would have forced landlords to go through a lengthy application and approval processes to keep takeaway sales. | Consumer & Retail |
One Lakh Income Tax Notices To Be Resolved By March 2024, Says Finance Minister
Only cases which are as old as six years or less can be reopened and must involve a threshold of escaped income above Rs 50 lakh.
Finance Minister Nirmala Sitharaman has said that around one lakh income tax notices sent to taxpayers in fiscal 2023 are expected to be resolved by the Central Board of Direct Taxes by March 2024.
Sitharaman highlighted the department's speedy resolution of back-dated cases that were reopened for further scrutiny.
"There is also a need for me to say about a particular instance where cases were reopened due to the decision of the Supreme Court, in the particular case referring to Ashish Agarwal..." Sitharaman said while speaking at the 164th Income Tax Day celebrations on Monday.
"About 55,000 such cases were opened up as a result of that decision. These have been completed by May 2023 this year. So, the board (CBDT) today is not sitting over notices which have been issued..."
According to her, the reopening of cases happens only when:
Non-filers have been identified by the department.
Filers have been noted with evidence of understatement of income.
Section 147 of the Income Tax Act of 1961 provides for the reopening of assessment proceedings. It gives discretion to the assessing officer to reopen the assessment proceedings when he/she has reason to believe that some of the income has escaped assessment.
Under the existing provisions, only cases that are as old as six years or less can be reopened and must involve a threshold of escaped income above Rs 50 lakh, the Finance Minister said.
According to Nitin Gupta, chairman of the Central Board of Direct Taxes, cases in specific situations where notices have been sent are usually required to be cleared within one year's time.
Reopening of particular cases that match risk parameters and further qualify for reassessment happens on a rolling basis and is likely to be an annual exercise, Gupta said on the sidelines of the Income Tax Day celebrations.
In the current tax filing season, Gupta said that over 4.2 crore returns had been filed by July 23, of which 2.21 crore returns had been processed and 80 lakh refunds had been issued.
The figures are dynamic and subject to change as the last day for filing is July 31, he said.
Last year, the department recorded 5.8 crore in tax filings as of July 31, 2022.
The chairman said that the department aims to process all refunds by early August. "We want to complete processing as early as possible ... early next month," he said.
Of the approximately 4.2 crore tax filers as of July 23, 7% are first-time filers, the chairman said.
The 164th Income Tax Day celebrations in New Delhi were also attended by Union Minister of State (Finance) Pankaj Choudhury and Revenue Secretary Sanjay Malhotra, among other officers and officials of the department. | India Business & Economics |
Undistributed Funds Worth Rs 25,000 Crore With SEBI In Focus After Death Of Subrata Roy
According to SEBI's latest annual report, the regulator issued Rs 138.07 crore in refunds to investors of two Sahara Group firms.
The undistributed funds totalling over Rs 25,000 crore lying with the capital markets regulator SEBI's account have come back into focus after the demise of Sahara Group's chief Subrata Roy.
Roy passed away in Mumbai on Tuesday night at the age of 75 after battling a prolonged illness.
He faced multiple regulatory and legal battles in connection with his group firms that were accused of circumventing regulations with Ponzi schemes, allegations his group always denied.
In 2011, capital markets regulator SEBI ordered two Sahara Group firms — Sahara India Real Estate Corporation Ltd. and Sahara Housing Investment Corporation Ltd. — to refund the money raised from nearly 3 crore investors through certain bonds known as Optionally Fully Convertible Bonds.
This order came after the regulator ruled that the funds were raised by the two firms in violation of its rules and regulations.
After a long process of appeals and cross-appeals, the Supreme Court on Aug. 31, 2012 upheld SEBI's directions asking the two firms to refund the money collected from investors with 15% interest.
Sahara was eventually asked to deposit an estimated Rs 24,000 crore with SEBI for further refund to investors, though the group has been maintaining that it had already refunded more than 95% of investors directly.
According to the capital markets regulator's latest annual report, the Securities and Exchange Board of India issued Rs 138.07 crore in refunds over 11 years to investors of two Sahara Group firms.
Meanwhile, the amount deposited in specially-opened bank accounts for the repayment has risen to more than Rs 25,000 crore.
In the absence of claims from a majority of the bondholders of the two Sahara companies, the total amount refunded by Sebi inched up by just about Rs 7 lakh during the last fiscal 2022-23, while the balance in SEBI-Sahara refund accounts rose by Rs 1,087 crore during the year.
Going by the annual report, SEBI received 19,650 applications involving 53,687 accounts as of March 31, 2023. Of these, "refunds have been made concerning 17,526 applications involving 48,326 accounts for an aggregate amount of Rs 138.07 crore, including the interest amount of Rs 67.98 crore."
The remaining applications were closed due to their records not being traceable in the data provided by two Sahara Group firms.
In its previous update, SEBI had put the total amount refunded by it as of March 31, 2022, at Rs 138 crore concerning 17,526 applications.
Further, SEBI said under various orders passed by the Supreme Court and the attachment orders passed by the regulator, an aggregate amount of Rs 15,646.68 crore has been recovered by it as of March 31, 2023.
This amount along with the accrued interest after due refunds to the eligible bondholders was deposited in nationalised banks in terms of the judgment dated Aug. 31, 2012, of the Supreme Court.
As of March 31, 2023, the total amount deposited in nationalised banks is around Rs 25,163 crore, SEBI stated.
This amount stood at Rs 24,076 crore, Rs 23,191 crore, and Rs 21,770.70 crore as of March 31, 2022, March 31, 2021, and March 31, 2020, respectively.
Meanwhile, the Centre in August started the process to refund Rs 5,000 crore of depositors whose funds are struck in four cooperative societies of Sahara Group.
Before this, Cooperation Minister Amit Shah launched the 'CRCS-Sahara Refund Portal' in July to facilitate the return of the money to investors. Around 18 lakh depositors have been registered on the portal.
In March, the government announced that the money would be returned to 10 crore investors of the four cooperative societies within 9 months.
The announcement followed a Supreme Court order directing the transfer of Rs 5,000 crore from the Sahara-SEBI refund account to the Central Registrar of Cooperative Societies. | Stocks Trading & Speculation |
Chancellor Jeremy Hunt has said it will be "virtually impossible" to deliver tax cuts until the UK economy improves.
A less gloomy economic outlook and the high cost of living had led to calls for measures to reduce the tax burden in the Autumn Statement in November.
Speaking on LBC, Mr Hunt said the country's high levels of debt left him with some "very difficult decisions".
The UK's debt currently stands at 98.8% of GDP, a level not seen since the early 1960s.
With the Conservatives well behind Labour in the opinion polls, a debate is playing out about what, if anything, the party can do to win back ground before a general election, expected as soon as next May.
A significant number of Conservative MPs argue that keeping taxes at historically high levels, particularly given the high cost of living, is a political mistake.
They want ministers to cut tax - or at least set out a path to doing so.
A slight fall in inflation - the rate prices are rising - last month also meant the Bank of England kept interest rates at 5.25% after two years of incremental rises, meaning the cost of national borrowing did not increase as some had expected.
But speaking on the Tonight With Andrew Marr programme, Mr Hunt said that the cost of servicing the country's debt remained higher that it was when he delivered the Spring Budget in March, meaning there was no "extra headroom" for tax cuts.
"It makes life extremely difficult," he said. "It makes tax cuts virtually impossible, and it means that I will have another set of frankly very difficult decisions.
"All I would say is, if we do want those long-term debt costs to come down, then we need to really stick to this plan to get inflation down, get interest rates down.
"I don't know when that's going to happen. But I don't think it's going to happen before the Autumn Statement on 22 November, alas."
It is not surprising that tax cuts are not being considered right now - government insiders have been saying that for months.
But the Treasury is preparing voters for another fiscal event where significant commitments are unlikely - as ministers continue to prioritise reducing inflation further.
Figures released on Wednesday showed that inflation in August stood at 6.7%, lower than many had feared but still significantly higher than the target level of 2%.
Tax cuts typically increase demand in the economy and could risk fuelling price rises back up towards levels seen earlier this year.
Sign up for our morning newsletter and get BBC News in your inbox. | Inflation |
Using multiple bank accounts can be a good way to separate funds for different financial goals. However, if you forget about one of those accounts it could end up falling dormant. A dormant bank account is an account that registers no financial activity for an extended period of time. The amount of time that it takes for a bank account to be considered dormant can depend on the bank.
For help with your own banking needs, consider working with a financial advisor.
Dormant Bank Account Definition
A dormant bank account is a bank account that has no financial activity occurring for an extended time period. Generally, a bank account may be ruled dormant if there are no new:
Deposits
Credit transactions
Debit transactions
ACH transfers in or out of the account
ATM withdrawals
Debit card purchases
Automated transactions, such as preauthorized bill payments
In other words, leaving a bank account dormant means that it’s sitting and doing nothing. A dormant savings account may continue to earn interest on the existing balance, but there are no new deposits being made.
What kind of bank accounts can become dormant? Generally, any deposit account could fall into dormancy. That includes checking accounts, savings accounts, money market accounts and certificate of deposit (CD) accounts. Safe deposit boxes aren’t necessarily excluded either, as your bank may consider your account dormant if your rental fees go unpaid for an extended period.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Why Do Bank Accounts Become Dormant?
There are lots of reasons why a bank account may become dormant. Here are a few scenarios that can result in a dormant account:
Death of the account owner. A dormant bank account situation can happen when the owner dies and there is no beneficiary to claim it, or the executor overlooks it when completing their inventory of the deceased person’s estate assets.
Changing banks. You may leave a dormant account behind when changing banks if you’re not taking steps to ensure the old account is properly closed. No new transactions may go through to the account but it’s still technically open.
Forgetfulness. Sometimes, a dormant bank account is simply the result of someone forgetting that they have the account. For instance, you might open a new savings account and make an initial deposit, then let it slip your mind.
Dormant bank accounts aren’t necessarily a bad thing. However, letting an account go dormant could lead to fees or worse, the loss of the funds in the account.
How Long Does It Take for a Bank Account to Become Dormant?
Banks can define dormant accounts differently. For example, your bank account may be considered after six months with no activity of any kind at Bank A, while Bank B might not mark an account as dormant until 12 months or more have passed with no new transactions.
In terms of how long a bank account can sit dormant before the bank does anything about it, that can vary by the financial institution as well. After enough time has passed the account can be deemed unclaimed property.
State law can dictate when a bank account is considered to be dormant and what happens to the money in it. A typical time frame is three to five years, though again, the rules can depend on where you live.
What Happens When a Bank Account Goes Dormant?
Bank accounts don’t just become dormant overnight. There are a series of things that need to happen first before the bank assigns accounts a dormant label.
Typically, these are the steps:
You don’t make any new deposits, withdrawals or other transactions to or from the account for a set time period, which can vary depending on the bank.
The bank deems your account to be inactive. At this point, the bank may begin charging a monthly or yearly inactivity fee.
After additional time passes with no new activity, the bank can transition the account from inactive to dormant.
At this point, the bank can close the account. If there is no current contact information on file for you, the bank can send any funds in the account to the state. The money then becomes unclaimed property. All of this is allowed under state escheatment rules.
How to Retrieve Funds From a Dormant Bank Account
If money from an old bank account ends up in the state’s hands, you have the right to try and get it back. Your state may have a specific process for doing so, but it may be as simple as filling out a form and paying any applicable fees.
Not sure where your bank account went? Your state may offer an online unclaimed property database that you can use to search for old bank accounts. You can also search through national unclaimed property databases like MissingMoney.com or Unclaimed.org.
Once the state reviews your claim and approves it, you should get a check in the mail for the account balance, less any other fees that might apply. You could then put that money into an existing bank account or use it to open a new account.
If it’s a large amount of money you might consider investing it instead. You can talk to your financial advisor about the best ways to use a forgotten cash windfall to further your money goals.
How to Avoid a Dormant Bank Account
The simplest way to avoid having a bank account go dormant is to make sure it’s registering regular activity. You could do that by:
Scheduling a small recurring deposit to it each month from a linked bank account.
Making a once-monthly or once-quarterly withdrawal.
Using the account for a specific purpose, like paying a particular bill each month.
Logging in to online or mobile banking to download your statements or update your contact information.
If you don’t think you’re going to use a bank account again, you may be better off closing it altogether. That way, you could avoid any inactivity fees the bank might charge if you’re not using it. Remember to verify with the bank in writing that the account is closed.
The Bottom Line
Letting a bank account go dormant may not be something you do intentionally, but it’s important to know how to manage accounts that have fallen by the wayside. Waiting too long to reactivate a dormant account or close it down entirely could mean having to do a little more work to track that money down with the state later.
Banking Tips
Consider talking to your financial advisor about the best types of accounts to have to manage your money. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’d like to be able to combine banking with investing, you might consider opening a cash management account in place of a regular checking account. Cash management accounts combine features of checking accounts and savings accounts, and it’s easy to open one at the same brokerage that holds your investment account or IRA. You can use your account to pay bills while earning interest on the money that you eventually plan to invest, or sweep in funds when selling investments in your brokerage account.
Photo credit: ©iStock.com/damircudic, ©iStock.com/RgStudio, ©iStock.com/Moon Safari | Banking & Finance |
Union members at KP’s factory in Hellaby, Rotherham are being balloted from today on whether to take strike action to secure pay rises after the company’s profits continue to soar. If workers choose to strike it will shut down KP Snacks’ sole site of nut production and disrupt supplies of KP Nuts throughout the UK.
A total of 135 workers at the Yorkshire KP factory, including cleaners, will have the opportunity to vote on strike action, as their union, Unite, claims that average pay at KP has fallen 14% in real terms since 2018.
Profits at the company in the same time period have increased from £13.8m to £39.9m in the last publicly available accounts, which track the year ending 31st December 2021. According to those accounts, the company authorised a dividend payment in 2021 of £54,563,470.
The snack company’s most recent offer is for a 6% pay increase with a one-off £1,000 payment. The Office for National Statistics’ most recent measure from the Consumer Prices Index (CPI) in May showed inflation at 8.7%.
KP’s 6% pay offer is not extended to cleaners, who according to Unite earn £10.66 an hour. The lowest workers over the age of 23 can legally be paid - the National Living Wage - is £10.42 an hour.
Unite general secretary, Sharon Graham said: “KP Snacks has increased its profits by 275 per cent since 2018. This year workers won’t accept being paid peanuts.
“To exclude the lowest paid workers from the pay negotiations altogether is corporate greed in action. Especially when KP Snacks made £54 million in profit. The workers have Unite’s steadfast support.”
Unite regional officer, Chris Rawlinson said: “KP Snacks in Rotherham is the sole producer of KP Nuts. So if the strikes go ahead pubs and supermarkets will be hit hard. Unite members are determined to get a fairer portion of the company’s huge profits. It’s time for management to put a serious pay offer to the workforce.”
KP Snacks did not respond to a request for comment. | Workforce / Labor |
Managing your taxes can be one of the most complex aspects of estate planning and a new IRS rule change continues that trend. The rule, published at the end of March, changes how the step-up in basis applies to assets held in an irrevocable trust. If you need help interpreting the IRS rule change or setting up your estate, consider speaking with a financial advisor.
What Is a Step-Up in Basis?
When someone inherits an asset with unrealized capital gains, the basis of the asset resets or “steps up,” to the current fair market value, wiping out any tax liability for the previously unrealized capital gains.
For example, if you purchased stock for $100,000 more than a year ago and sold it now for $250,000, you would pay capital gains tax on the $150,000 profit above the original basis of $100,000. If you inherit that stock, however, your new basis steps up to $250,000 and you’ll pay tax only if you sell the stock for more than that amount.
To protect their assets, many people place them in an irrevocable trust, which means they lose all ownership rights to the assets. Instead, the trust becomes the owner of the assets for the benefit of the trust’s beneficiaries.
How IRS Rule Change Impacts Irrevocable Trusts
Previously, the IRS granted the step-up in basis for assets in an irrevocable trust but the new ruling – Rev. Rul. 2023-2 – changes that. Unless the assets are included in the taxable estate of the original owner (or “grantor”), the basis doesn’t reset. To get the step-up in basis, the assets in the irrevocable trust now must be included in the taxable estate at the time of the grantor’s death.
That’s the bad news.
The good news is that because of the $12.92 million per-person exclusion in 2023 ($25.84 million for married couples), few estates in the United States pay even a portion of the estate tax.
In 2021, 6,158 estates were required to file estate tax returns, with just 2,584 of them (42%) paying any tax at all. By including the irrevocable trust assets in the taxable estate, heirs who are the beneficiaries of the trust will dodge the tax hit and receive the step-up in basis. However, that situation could change for some people in 2026 when the estate tax exemption limit reverts to the 2017 amount of $5 million, adjusted for inflation.
Why would someone be using an irrevocable trust? A typical reason is to remove assets from your ownership in order to qualify for Medicaid nursing home assistance. A parent could place a home worth $500,000 into the trust, qualify for Medicaid but, by including the home in their taxable estate, then pass the property on to their children tax-free at a basis of $500,000.
Bottom Line
Anyone using an irrevocable trust should be reviewing their estate plan to make sure it complies with the updated IRS rule and preserve the step-up in basis for assets that the trust will pass on to their heirs. Building a sufficient estate plan is also something that most people should try to have in place in order to limit issues for their family down the road.
Financial Planning Tips
A financial advisor can help you make sense of important rule changes so your financial plan stays on track. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Life insurance can play a vital role in the financial planning process so that your loved ones are protected in the event that something happens to you. SmartAsset has a life insurance tool specifically designed to help you determine how much coverage you need.
Photo credit: ©iStock.com/shapecharge, ©iStock.com/kate_sept2004 | Personal Finance & Financial Education |
Digital Public Infrastructure Can Help In Climate Adaptation, Mitigation: Nandan Nilekani
Nilekani, speaking at the B20 Summit India, further said India has found a 'balance' between responsible regulation and innovation.
The approach of Digital Public Infrastructure, which has gained global prominence, can also help in the area of climate adaptation and mitigation going forward, Chairman and Co-Founder of Infosys and the founding Chairman of UIDAI, Nandan Nilekani said on Sunday.
Nilekani, speaking at the B20 Summit India organised by CII, further said India has found a 'balance' between responsible regulation and innovation due to its participatory model, as he showcased the country's success story on digital public infrastructure, which has accelerated inclusion in the country.
India's DPI is gaining global recognition, Nilekani said, noting there is a major move afoot to take this model to 50 countries in five years.
Many multilateral agencies and global groups are coming forward and showing interest, and the next fe years will see proliferation and prevalence of digital infrastructure at population-scale around the world.
Going forward, the approach of digital public infrastructure can also help in climate adaptation and mitigation, Nilekani said.
"For example, one of the things which will happen in climate adaptation is you want to give anticipatory financing for building more resilient homes, in anticipation of higher sea levels etc. And you can do that using DPI or using ONDC (Open Network for Digital Commerce), another great innovation to create an open network for commerce, we can create a circular economy where things get recycled," he said.
Hence, not only has DPI has helped so far, it will also be useful in the future.
The digital public infrastructure issues a challenge for societies, he said, adding that other countries today are fighting the question of how to balance regulation and innovation, something that India has successfully manoeuvred.
While the US, a hotbed for innovation, is now looking at approaching regulation, Europe has plenty of regulations, but not enough innovators.
"In India, we have found the balance between regulation and innovation because of the participatory model of coordinated governance from the central government, from the regulators like the Reserve Bank, technology companies and the private sector, everybody has come together to create an architecture which finds the balance between innovation and regulation," he said.
Such a model ensures that there is innovation but within the framework and guardrails of responsible regulation.
India has transformed in many ways, and this digital transformation is at the heart of economic growth.
"India is going from an offline, informal, low productivity, multiple set of micro economies to a single online, formal, high productivity mega-economy. And this is the trend of the next 20 years and you get to see all this happening every year, year by year," he said.
The transformation, he observed, has been enabled by a new approach to solving society's issues through the digital public infrastructure.
Digital public infrastructure has extended the ability of the country to use digital technology at population scale to transform society, and involves a number of building blocks.
"Each block does one thing well, but all the blocks talk to each other, they interoperate. And when these blocks come together, they create all kinds of solutions at population scale," he said and went on to cite India's success with Aadhaar, UPI, and use of Aadhaar KYC for banking and mobile inclusion.
India has achieved in nine years what would otherwise have taken 47 years by traditional means, he said pointing to the financial inclusion acceleration that has been triggered by the rapid digitisation.
UPI has scaled up from 100,000 transactions a month in October 2016, to become the world's largest payment system with 9.66 billion transactions per month, 350 million users, and 50 million merchant acceptance.
India's data empowerment architecture allows every individual and business to use digital footprint, giving rise to a whole new idea of 'digital capital'.
According to Nilekani, the powerful mix of digital capital and DPI is paving the way for a 'new grand bargain' that fosters an inclusive society. | Renewable Energy |
In 2022, Stephen Sangster had an uneventful year behind the wheel of his brand-new Dacia Jogger, covering 6,000 miles with no accidents or traffic offences. So the father of four was shocked when his car insurance renewal quote landed and the price had soared by a “shocking” near-90%.
“My quote has come through 87% higher, and that’s with no accidents, points or anything else that would increase my risk,” Sangster says. “With inflation where it is, you would swallow 10%-15% … but it’s such a jump.”
Although this week’s cost of living bulletin from the Office for National Statistics showed inflation slowed to 7.9% in June, as the price of petrol and diesel dropped by more than a fifth, the devil was in the detail. The data also revealed that the price of car insurance – which for most Britons is their biggest household bill after council tax and energy – shot up 50.9% in the last 12 months.
When the Dacia Jogger launched last year, it was lauded as the cheapest seven-seater on the market, so it appealed to households on tighter budgets. Now members of a Facebook group dedicated to the car that Sangster belongs to are sharing horror stories as insurance quotes arrive for the coming year.
“It’s quite a basic, affordable family car, so it attracts the cost-conscious,” he says. “When I opened the discussion about insurance costs, it seemed the cost of renewing in March or April was not so bad but since then it has gone through the roof.”
Sangster’s renewal offer from Admiral came in at £614, up from £328 in 2022, and even after going online, the cheapest deal he could find was from Churchill, and it still cost 40% more for a less generous policy.
In recent weeks, Direct Line and Saga customers have also contacted Guardian Money after being alarmed by their renewal quotes for 2023. One driver reported Saga had increased the cost of insuring her four-year-old Audi TT by 77% to £2,044, even though her driving record was unchanged; however, she was able to find a cheaper deal elsewhere.
The average car insurance quote increased by 34% in the year to May, according to the market research firm Consumer Intelligence. It says a typical policy now costs £2,145 for under-25s, £850 for the 25-to-49 age group, and £568 for over-50s. In bad news for new drivers, there are also fewer of the telematics policies (where a black box or smartphone app measures how you drive) that are usually a cheaper option.
While consumers, struggling with higher food and energy costs, fear they are being milked to boost insurers’ profits, experts counter that they aren’t making any. They say car insurance has slim profit margins, and that many firms were caught out during 2022 by the steep rise in claims costs and are making up ground with higher premiums.
The timing of new car registrations means September is a big month for renewals, and Ian Hughes, the chief executive of Consumer Intelligence, says that when Britons come back from their summer holiday, “they will be in for a big shock”.
He adds: “Last year, lots of people didn’t see any increase in their car insurance. This year will be a double whammy because insurers underpriced last year and have to play catchup; then they also need to think about where we will be six to 12 months from now, and price for that.
“Car insurance is a tough market. There’s a misconception about fat cat insurers making loads of money but that is not the case. Most of them lost money last year, and some people lost their jobs as a result.”
Although prices are up, anyone shopping around will find that the number of policies has proliferated as companies use different logos or brand them like supermarket food ranges. Hastings, for example, sells Hastings Essential, Hastings Direct and Hastings Premier policies.
The cheapest ones are the most basic, and features often considered standard may be removed, making it important to read the small print. They also typically have a higher compulsory excess, which is the amount you pay yourself if you make a claim.
James Daley, the managing director of the research foundation Fairer Finance, says the financial watchdog’s decision to put an end to companies charging a loyalty penalty has also contributed to price rises.
In 2021 the Financial Conduct Authority banned “price walking” – the practice that resulted in loyal customers, who automatically renewed their policy every year, being charged higher premiums than new customers.
“All the people who shop around for their car insurance are going to have to pay more because that’s the nature of banning differential pricing,” Daley says. “Obviously, for some people, it has brought prices down but they were probably ignorant to the fact they were paying too much in the first place.
“If it hadn’t been for the end of dual pricing, we wouldn’t be seeing premiums go up by quite so much, but they would still have gone up.”
Daley criticises the “hollowing out of products” so that insurers can offer – at least superficially – more competitive prices and get to the top of price comparison tables.
“There might be multiple brands from a name you know and trust but products that actually are quite different,” he says. “Some of the essentials policies don’t cover windscreen damage, for example, which is something that’s just been part of all car insurance policies for ever. It’s very confusing.”
After studying the price comparison sites, Sangster, who lives in Orpington in south-east London, found a cheaper deal with Churchill, albeit one that still cost more than 40% more. It also involved compromises, such as a bigger excess and no cover for driving in Europe.
Armed with this information, he went back to Admiral, which offered an improved quote of £482 – a 47% increase on 2022’s premium – for a policy akin to his existing one, albeit with the excess upped from £250 to £375.
“When it was £300 a year for car insurance, you could pay it as a one-off sum but when it’s double that, you start to think it might be more affordable to pay monthly, but then you pay interest as well. I don’t think many people can swallow a cost like this in one go.”
The Association of British Insurers says motor insurers paid out £2.4bn in motor claims in the first three months of this year – up 14% on the same period last year. This was the highest quarterly payout since it started collecting data 10 years ago.
The trade body highlighted that the cost of vehicle repairs was up by a third, at £1.5bn, on the same period last year because of rising costs, including energy inflation, and more expensive repairs.
The cost of providing replacement cars was also up 29% because of longer repair times, it said. Payouts for vehicle theft, at £152m, were also up by the same amount because of the higher prices now commanded by secondhand cars. In addition, firms paid out £642m in personal injury claims.
Laura Hughes, the ABI’s manager of general insurance, says motor insurers “continue to deliver when motorists and personal injury claimants need them the most”.
She adds: “Like most other business sectors, motor insurers face sustained cost pressures which they are finding increasingly challenging to absorb. Despite this, they are doing all they can to ensure competitively priced motor insurance, as well as offering the best possible claims service.” | Inflation |
America’s rich deadbeats just won’t stop deadbeating.
On Thursday, Senate Finance Committee chair Ron Wyden (D-Ore.) revealed that his committee had IRS data for tax years 2017-2020 showing that more than 1.4 million wealthy Americans had neglected to file a federal return. All told, these shirkers potentially owe the government as much as $66 billion.
More than 10,000 of them, Wyden wrote in a letter to the IRS commissioner, were repeat offenders. “Perhaps most alarming,” he noted, “was the extraordinary amount of unpaid taxes owed by a small subset of ultra-wealthy non-filers.” They included 8,729 people who potentially owed more than $500,000 each—nearly 1,000 had incomes in excess of $1 million a year. The top 500 non-filers each year—2,000 all told—owed a combined $923 million, Wyden added, yet only two were under active criminal investigation and only 58 had been subjected to liens and levies.
The taxman, clearly, has a long way yet to go.
“I think Americans are rightfully concerned when very wealthy families use loopholes and accounting strategies to avoid paying their fair share,” Wyden told me via his staff. “The people in this letter didn’t even bother with any of that.”
Indeed, America’s oligarchs and their hired guns have become increasingly skilled at tax avoidance in recent decades, and have succeeded in shaping the tax code to their preferences. The deeply unpopular tax cuts Republican leaders shoehorned through Congress in 2017 were the result of an unprecedented lobbying frenzy by corporations and wealthy interests, and it paid off. The nonprofit Americans for Tax Fairness released a new report on Wednesday, based on Forbes data, noting that the wealth of US billionaires has swelled by 77 percent—$2.2 trillion—since the “Trump” tax cuts took effect.
The default mode of the wealth protection industry (tax lawyers, money managers, estate planners, etc.) has always been to maximize investment returns while stiffing the government—mostly legally, but sometimes illegally. and often deploying strategies that fall into legal gray areas. And then, when the IRS pursues a civil action against a member of the wealthiest 0.001 percent, the legal firepower these billionaires wield in Tax Court (a real thing) can be overwhelming.
Even beyond all of that, a subset of super-rich Americans has wagered, thus far successfully, that they can simply ignore their tax obligations. Back in May 2020, the Treasury Department’s Inspector General for Tax Administration issued a report stating that nearly 880,000 “high income” non-filers owed the Treasury $46 billion for tax years 2014-2016, but that the IRS—whose budget congressional Republicans had systematically gutted—didn’t have the resources to collect. Fifteen percent of the non-filer cases had been closed without examination by IRS staffers, the report said, and another third weren’t even in line to be “worked.”
In 2021, the IRS finally got a big funding infusion from Congress. It was vehemently opposed by Republicans, who launched a disinformation campaign to frighten the public and who have since tried to abolish the IRS (and income taxes) entirely. The Republicans did succeed, however, as part of a recent deal to raise the federal debt ceiling, in clawing back some of IRS enforcement cash—a move, ironically, that will add to the federal deficit, according to the Congressional Research Service.
But the IRS still has a substantial enforcement budget, and Wyden wants the agency to use it to go after every last millionaire non-filer. “Civil and criminal enforcement, as well as financial penalties like liens and levies could easily be used to collect the taxes and identify these tax cheats,” he told me, adding. “It appears now the IRS has changed their policy, and I hope they take steps to bring the population in the new data into compliance.” | Inflation |
Analjit Singh Resigns As Chairman Of Max Life Insurance
Rajiv Anand will take his place as the chairman of the board of directors from Dec. 5.
Analjit Singh, the founder and chairman of Max Life Insurance Co., has formally stepped down from the position and as a member of the board as of Dec. 4.
Rajiv Anand will take his place as chairman of the board of directors on Dec. 5.
In its meeting held on Dec. 4, the board of directors noted the resignation of Singh and approved the appointment of Anand, the company said in its exchange filing.
"As the promoter of Max Financial Services and Max Life Insurance Company, it has been most fulfilling and rewarding to be an integral part of the startup and witness the company's achievements and growth over the last 23 to 24 years," Singh said in his resignation letter.
There is no doubt that the company will continue to excel under the leadership of the board and the talented management team, he said.
Singh was awarded the Padma Bhushan by the President of India in 2011. He served as a director on the board of Sofina NV/SA, Belgium. Till August 2018, he was also the non-executive chairman of Vodafone India.
Singh has served on the Prime Minister’s Indo-U.S. CEO and Indo-U.K. CEO Council and served as the Honorary Consul General of the Republic of San Marino in India. | Banking & Finance |
The prime minister will host a group of leading business figures on Monday at Hampton Court to highlight foreign firms' plans to invest in the UK.
Rishi Sunak said £29.5bn of new investment had been promised, which he described as a "huge vote of confidence" in the UK economy.
Last week's Autumn Statement included a raft of measures to encourage more business investment.
But it came against a backdrop of lower growth forecasts.
The Autumn Statement measures were largely designed to persuade domestic firms to invest more, an area in which the UK has been lagging behind its G7 peers.
However, the government said the UK's track record on attracting foreign investment remained strong.
Labour, on the other hand, said the government's policies had been a "total failure" when it came to growth and business investment.
"The past 13 years of Conservative government has been marked by a complete lack of stability, consistency and ambition which has turned potential investors away from Britain," Jonathan Reynolds, shadow trade and business secretary, said.
On Monday the government will be rolling out the red carpet at Hampton Court Palace - where King Henry VIII famously stepped away from day-to-day business matters to enjoy feasting and jousting - for what the government says will be an "historic" event, celebrating the UK's track record in innovation, "from the steam train to quantum computing".
It will be followed by a dinner with King Charles III at Buckingham Palace.
Some of those attending are themselves deemed global investment royalty. They include Stephen Schwarzman, the chief executive of investment group Blackstone, David Solomon from Goldman Sachs and Jamie Dimon at JP Morgan Chase.
"Global CEOs are right to back Britain - we are making this the best place in the world to invest and do business," Mr Sunak said.
Mr Sunak pointed to the UK's "culture of innovation and thriving universities" and highlighted "clean energy, life sciences and advanced technology" as key areas where he said inward investment was already creating jobs and driving growth.
Among the projects that will be confirmed on Monday are a £10bn investment from Australia's IFM Investors into infrastructure and energy projects and a commitment to build a new lab in Cambridge from BioNTech, the firm which pioneered the mRNA Covid vaccine.
Some of the sums on the list of projects that are being announced at the summit are ones that investors have previously announced and are now ready to attach a specific investment figure to. Others, such as IFM's investments, have already begun, and future investment sums are now being clarified. Other firms are adding new investments to existing portfolios.
Among the projects being highlighted are a £7bn boost to the amount Spain's Iberdrola is investing in UK electricity transmission and distribution; a £5bn investment from Australia's Aware Super in a range of businesses including the energy transition and affordable housing; and a £2.5bn from Microsoft in AI infrastructure. | United Kingdom Business & Economics |
An Anglican vicar has slammed Yorkshire Building Society for closing his account after he accused them of promoting gender ideology.
Rev Richard Fothergill, a longstanding customer with the building society, wrote to them in June to complain about their public messaging during Pride month.
The 62-year-old says within four days, he received a reply telling him his internet savings account would be closed, The Times reports.
Rev Fothergill, of Windermere, Cumbria, has since accused the banking giant of 'bullying' and said: 'I wasn't even aware that our relationship had a problem. They are a financial house – they are not there to do social engineering. I think they should concentrate their efforts on managing money, instead of promoting LGBT ideology.
'I know cancel culture exists and this is my first first-hand experience of it. I wouldn't want this bullying to happen to anyone else.'
The retired vicar insists his observations were a polite rebuttal of transgenderism, in response to material on YBS's website.
But the building society wrote it has a 'zero tolerance approach to discrimination' and their relationship with the customer had 'irrevocably broken down'.
Rev Fothergill, who no longer serves a parish but founded the Filling Station evangelical network online, wrote his letter on June 18 in response to a monthly email from YBS asking for feedback.
He says he penned a couple of paragraphs objecting to trans ideology — the concept of a gender identity separate from the body — being relayed to children.
Insisting he had been 'polite all the way through' he rounded on the bank and said they should be 'worrying about financial issues' - not LBGT ones.
YBS, which looks after savings over three million customers, disputed Rev Fothergill's description of what occurred.
A spokesman said: 'We never close savings accounts based on different opinions regarding beliefs or feedback provided by our customers.
'We only ever make the difficult decision to close a savings account if a customer is rude, abusive, violent or discriminates in any way, based on the specific facts, comments and behaviour in each case.'
Nigel Farage told MailOnline yesterday that three members of his family have recently had accounts closed by UK banks - as lenders were accused of dumping customers who say things they don't like on gender and LGBT issues or Brexit.
Mr Farage has not named the bank who plan to shut his own personal and business accounts this summer, but is understood to be Coutts, the famous 327-year-old private bank whose clients include members of the Royal Family.
It is owned by high street giant NatWest, which is still 38.6% owned by the British taxpayer after it was bailed out following the 2008 financial crisis. MailOnline has asked Coutts and Nat West to comment.
Comparing Britain to 'communist China', Mr Farage told MailOnline: 'Some of these ridiculous rules and closures have been extended to my immediate family. I am enraged and also have a feeling of guilt that members of my family are being punished for my campaign to leave the European Union'.
Warning that anyone in Britain could be next he added: 'The banking industry in the UK has become politicised. We are going down a road where anybody in Britain could say something on Facebook or Twitter that a bank doesn't like and lose their accounts'.
First Direct has also been accused of closing the account of the founder Wings over Scotland pro-Scottish independence blog, run by journalist Stuart Campbell. Mr Campbell has suggested that his accounts were closed because of his views on gender and sex, including declaring: 'Women don't have penises'.
He said: 'I've banked with them for 25+ years, but last week I was in Sainsbury's buying some milk during a Bear Patrol and my card got declined. I rang them up, and after over an hour on hold, they told me all my accounts had been cancelled. Was it political? Was it to do with Wings' very public stance on gender, after the fiasco of PayPal pulling their services from the Free Speech Union and other similar incidents from woke financial service providers? Who knows? But it stinks'.
A First Direct spokesman said they would not comment on individual cases. But said: 'In general terms, decisions to end a customer relationship are not taken lightly, but are absolutely not based on individual beliefs'.
Journalist Toby Young, of the Free Speech Union, told Mr Farage on GB News last night that he was contacted by a Yorkshire Building Society customer who claimed he asked why their branches were festooned with Pride flags. The bank allegedly replied that his account would be closed down. MailOnline has Yorkshire Building Society to comment.
PayPal has also pulled services from groups and people in recent years, including Mr Young himself, before a U-turn on his account three days later. The TRIGGERnometry free speech YouTube show and podcast claims Tide has shut down its business account.
In 2021 Laurence Fox's political party 'Reclaim' was also denied a bank account. Mr Fox said recently: 'The Reclaim Party cannot get a uk bank account. Despite three years of box ticking and immaculate compliance. In fact, entire new compliance departments are created just to stop us existing.
Nigel Farage said the banking group he has been with for more than 40 years warned him around two months ago that his accounts will be closed. He claims that it has given him no reason, other than that it was a 'commercial decision' - but has so far declined to name them.
He has accused 'the Establishment' of trying to 'force me out of the UK'. Seven other banks have also refused to open an account for him. And today he told MailOnline that three members of his family have suffered the same fate.
He said he thought there were three possible reasons for the fiasco. The first was that he may have been flagged as a 'politically exposed person' – a label designed for those who could be vulnerable to bribery or corruption.
The second possibility was that 'big corporate structures' were taking revenge on him for Brexit.
And the third was that it was as a result of claims made by Labour MP Chris Bryant that Mr Farage received large donations from the Russian government. He insisted he 'didn't receive a penny'.
He said it was 'nonsense' and 'wholly wrong' to suggest he received hundreds of thousands of pounds from the Russian state.
He has said he received 'two small appearance fees' with both 'well under £5,000' from Russia Today. He said this related to some work in 2015 and 2016 and insists he didn't do any work with them in 2018 – the year Bryant claimed he received almost £550,000. He claims Mr Bryant 'abused' Parliamentary Privilege to avoid being sued for libel. The Labour MP has not repeated the same claims in public.
Mr Farage has said that last night he received a 'snivelling' phone call from the bank saying they had looked again could get him a personal account – but not a business account, which he also uses to pay his three members of staff.
The politician turned broadcaster said that he is having to consider banking abroad - on mainland Europe but outside the EU - and admits Switzerland is an option. He has also instructed lawyers and is considering suing them at the High Court.
He is also campaigning for the law to change to match other countries where having a bank account is a legal right. He said 1.3million in the UK don't have one, some through choice, others because of the banks themselves.
He said the Post Office used to serve that function but this was changed when it was privatised by Coalition chancellor Vince Cable.
The furore began yesterday when the former Brexit Party and Ukip leader said he was a victim of 'political persecution' and suggested he was trying to be forced out of the UK.
Mr Farage claimed the banking group told him earlier this year his personal and business accounts would be closed over the summer. He did not name the group, but told his 1.7million followers that he had been banking with them since 1980.
Painting himself as the victim of a 'serious political persecution', Mr Farage claimed that the extraordinary measure was effectively tantamount to making him a 'non-person', adding: 'I won't really be able to exist or function in a modern 21st century Britain.
'I'm beginning to think that perhaps life in the United Kingdom is now becoming completely unliveable because of the levels of prejudice against me.'
Mr Farage speculated that the 'establishment' was targeting him due to his role in campaigning for Brexit during the 2016 referendum on British membership of the EU. He also suggested that his reputation had been smeared by Labour MP Sir Chris Bryant, who last year used parliamentary privilege to claim that Mr Farage was paid more than £500,000 by the Russian state through his appearances Russia Today in 2018. He vehemently denied this, saying: 'I didn't receive a penny from any source with even any link to Russia.'
Sources close to the politician at the time claimed the £548,573 figure quotes in the House of Commons, using parliamentary privilege, was his firm's total income for the year, not an amount he received from Russia Today, on which he made a series of appearances that year.
Last year, British film-maker Graham Phillips was added to the UK Government's sanctions list, accused of being a conduit for pro-Russian propaganda.
The video blogger was filming pro-Kremlin material from Russian-occupied areas of Ukraine shortly after the conflict first broke out.
As a result of being on the sanctions list, his assets were frozen.
In his bombshell video, Farage speculated a range of possible reasons for the alleged closure, including suggesting that he had been deemed a politically exposed person (PEP).
A PEP is an individual that holds a prominent public position or function, and may be deemed more susceptible to bribery, corruption or other money laundering offences due to their role.
In his post on social media this morning, the GB News host wrote: 'I have been given no explanation or recourse as to why this is happening to me.
'This is serious political persecution at the very highest level of our system. If they can do it to me, they can do it to you too.'
Speaking of the importance of having a bank account, he added: 'You effectively become a non-person, you don't actually exist.
'It's like the worse regimes of the mid-20th century, be they in Russia or Germany, you literally become a non-person.
'I won't really be able to exist or function in a modern 21st century Britain.'
It comes after Mr Farage yesterday blasted the Television and Radio Industries Club Awards for 'deleting' a tweet that announced him as winner of News Presenter of the Year.
He accused the organisation of taking down the congratulatory message because he 'committed the cardinal sin of questioning the Barb figures.'
The 'Barb' figures show the TV ratings of programmes and are compiled daily by the Broadcasters' Audience Research Board.
Mr Farage criticised the way viewing numbers are collated during his acceptance speech and on his show last night, accusing the industry of 'marking their own homework' and being 'out of touch.'
At this week's ceremony, the presenter called on hecklers to 'keep the abuse coming' as he was booed after beating established veteran journalists Eamonn Holmes and Susanna Reid to the gong.
Sir Chris declined to comment when approached by MailOnline.
Nigel Farage's full statement on the closure of his bank accounts I've been living with something for the last couple of months that may well fundamentally affect my future career going on from here and even if I can stay living in this country. I have been with the same banking group since 1980. I've had my personal accounts with them since that date and my business accounts right through the 1990s when I worked in the City of London and in recent years too. I'm with one of the subsidiaries of this big banking group, one with a very prestigious name, but I won't name them just yet. I got a phone call a couple of months ago to say 'we are closing your accounts'. I asked why, no reason was given. I was told a letter would come and explain everything. The letter came through and simply said we are closing your accounts we want to finish it all by a date, around about now. I didn't know what to make of it. I complained, I emailed the chairman who phoned me to say it was a commercial decision which I have to say I don't believe for a single moment. I've been to seven banks, asked them all if I can have a personal and business account, and the answer has been no in every single case. There is nothing irregular or unusual about what I do. The payments that go in and out every month are pretty much the same. I maintain in my business account a pretty big positive cash balance which I guess with interest rates where they are is pretty good for the bank too. So why is this happening to me? One explanation is that a few years ago the European Union came up with the definition of Politically Exposed Person (PEP) – this can range from anybody from a Prime Minister down to a local councillor. I think the reason for it was 'were people in politics open to bribery from foreign governments in Ukraine or China or wherever else it may be, pumping money into the accounts of corrupt politicians'. I understand and get that. But it's all about interpretation, isn't it? What the banks argue is that to maintain an account for a PEP gives them increased costs of compliance. Now, I have spoken to the city minister in this country and there's some hope that this EU definition which came into British law may be moderated in some way, we'll have to see. But any bank or organisation can choose to interpret a PEP and whether they want the account in any way they choose. To my knowledge I don't think anybody has been treated like me in the world of politics. But the banks themselves are part of the big, corporate structures in this country, the organisations who did not want Brexit to happen. In my case, probably the corporate world will never, ever forgive me. They know if I hadn't done what I did, without the help of thousands of people in our people's army, there never would have been a referendum, let alone the victory. I'm the one that is to carry the blame. That's the second possible reason why I can't get a bank account: prejudice that comes from our institutions. But I think there's a third reason. A few months ago, in the House of Commons, Sir Chris Bryant, chairman of the Priviliges Committee said using parliamentary privilege that I have received large sums of money directly from the Russian government and named the calendar year he said it happened. The truth is I didn't receive a penny from any source with even any link to Russia. And yet because he said it, it stands. I wrote to the Speaker, I demanded an apology, but nothing has been forthcoming from Sir Chris Bryant. I wonder if that is what's given me part of the problem. I have employed a top firm of London lawyers, I'm going through a series of subject access requests to find out what is held on me by the international agencies and the bank that wants to close me down. Think about it, without a bank account, you effectively become a non-person, you don't actually exist. It's like the worse regimes of the mid-20th century, be they in Russia or Germany, you literally become a non-person. You don't any more have a right to be entitled to a bank account. There is a possibility, through a fintech company that I could find some means of receiving and paying money, which could be a little bit of a lifeline. But it's not a bank account because I won't be able to earn any interest on positive cash balances. I won't be able to borrow money if I need to at any point, or take out a mortgage should I so desire, that will be completely denied to me. I won't be able to have a debit card linked directly to my account. I won't really be able to exist or function in a modern 21st century Britain. I'm beginning to think that perhaps life in the United Kingdom is now becoming completely unliveable because of the levels of prejudice against me. | Banking & Finance |
The public has been urged to stop ringing the taxman for help with the “simplest of tasks” by a Treasury minister after it emerged that 10 million calls go unanswered a year.
Victoria Atkins said that at least 500 people at the HM Revenue and Customs (HMRC) could be freed up if people who called with basic questions instead went online for answers.
A Treasury source later said that issues such as deadlines for self assessment and obtaining a National Insurance number or a tax code were the kind of questions that Ms Atkins had in mind.
Others include checking the rates, thresholds and bands for different taxes and obtaining an online password for dealing with tax matters.
Although the information is online, some taxpayers may not feel confident using the service and prefer to speak to an official.
Ten million calls to HMRC go unanswered a year while 80 per cent of the body’s staff work from home, the Mail on Sunday reported last weekend.
Ms Atkins’ remark came in an exchange during Treasury questions in the House of Commons, when MPs are able to press Government ministers who have economic briefs for answers.
‘Appalling level of customer service’
Philip Hollobone, the Conservative MP for Kettering, asked: “Ten million calls went unanswered at the HMRC last year.
“Of those who did get through two thirds had to wait more than 10 minutes. Meanwhile, four out of five HMRC staff are working from home.
“What is being done to improve the appalling level of customer service at HMRC?”
Ms Atkins said that she takes the issue “very, very seriously” and added: “Just to put this in context, last year HMRC received 38 million telephone calls, around three million of which are to do the simplest of tasks which can be done digitally if at all possible.
“If we’re able to move people on to digital channels that will free up at least 500 people to be able to help with more complex tax affairs and to help the most vulnerable.
“This is a period of transition for the organisation and one which we take very seriously.”
The Mail on Sunday obtained the figures for last year’s unanswered calls by the HMRC. The paper said that, by contrast, 4.3 million went unanswered in 2018.
‘HMRC closed telephone lines’
The HMRC has some 67,000 employees. The paper reported that only one in five were in the office at any one time in July.
Dame Meg Hillier, who chairs the Commons Public Accounts Committee, was quoted as saying: “Our committee found at the beginning of this year that taxpayers were still not receiving acceptable levels of customer service, and surprisingly we heard that HMRC at times had simply closed their telephone lines.
“We will be discussing these issues and more at our forthcoming scrutiny session with HMRC.
HMRC responded to the newspaper by saying: “There are various reasons why calls to HMRC are unanswered, including customers choosing to ring back at another time or deciding to use our highly rated online services instead – for example, after hearing a recorded message reminding them of this option.”
Earlier this year it emerged that taxpayers were being left with huge phone bills after accidentally using rip-off call connection services to contact HMRC.
Taxpayers who need to call HMRC have been urged to carefully check online search results and avoid calling numbers that begin with 09, 087 and 084 after the Low Income Tax Reform Group noticed an increase in online adverts from companies that put callers through to HMRC at hugely inflated costs.
Connection services charge a premium rate – usually £3.60 a minute – to direct callers to popular companies and government bodies. The callers often do not realise they are using a premium rate number. | Inflation |
An Internal Revenue Service pilot might just eventually bring US citizens a free direct-file alternative to commercial options like TurboTax and H&R Block. Yesterday, the agency announced that 13 states are joining its pilot program for the 2024 filing season, four of which will also be able to integrate their state taxes into the pilot.
Since 2001, a partnership between companies like TurboTax maker Intuit and the IRS called the Free File Alliance has given consumers a free alternative to paying for tax preparation. However, it turned out that when you try to get companies to offer an alternative to giving you money, they will do their best to hide that option. When the IRS updated the agreement to forbid companies from doing that — and give itself permission to create its own free file option — both H&R Block and Intuit left.
According to the IRS, these are the states joining the pilot:
- States with state income tax: Arizona, California, Massachusetts, and New York
- States without state income tax: Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming
The pilot doesn’t guarantee a nationwide rollout of the program. Danny Werfel, who heads the IRS, says this will test the government’s capacity to do this, adding that the Internal Revenue Service will work closely with participating states to gather the information it needs to see if the program works.
The IRS says its scope could change, but the pilot is starting small. Only some people can participate, depending on their income, tax credits, and deductions. For instance, if you’re filing a W-2 and have basic deductions like student loan interest or the standard deduction — the default one that everyone gets unless they need to deduct more — you can directly file. If you’re an independent contractor, though, it sounds like you may be stuck with your usual options. | Personal Finance & Financial Education |
Druckenmiller Digs In on Criticism of Yellen, Disputes Her Math
Billionaire investor Stanley Druckenmiller isn’t letting up in his verbal sparring with Treasury Secretary Janet Yellen, saying her department is defending itself with faulty arithmetic.
(Bloomberg) -- Billionaire investor Stanley Druckenmiller isn’t letting up in his verbal sparring with Treasury Secretary Janet Yellen, saying her department is defending itself with faulty arithmetic.
It began with a critique of Yellen that her department had made “the biggest blunder in history” by not taking advantage of near-zero interest rates to sell more longer-term bonds. Then, Yellen pushed back at the criticism Thursday, saying the Treasury was pushing out maturities to the longest in decades. And on Friday, Druckenmiller weighed in again, saying the Treasury’s computations omitted critical borrowing on the Federal Reserve’s balance sheet.
“The only debt that is relevant to the US taxpayer is consolidated US government debt,” Druckenmiller said in an interview. “I am surprised that the Treasury secretary has chosen to exclude $8 trillion on the Fed balance sheet that is paying overnight rates in the repo market. In determining policy, it makes no sense for Treasury to exclude it from their calculations.”
The dispute pits two of the highest-profile names in US financial circles: Druckenmiller, 70, is a former investor for George Soros who now runs his Duquesne family office, while Yellen, 77, is an economist and former Federal Reserve chair and a pillar of the Biden administration’s relationship with Wall Street.
Ironically, the backdrop for their exchanges has been a period of huge moves down in interest rates, with yields on 10-year Treasuries headed for their biggest weekly decline since March. On Wednesday, the Treasury’s quarterly refunding plan showed a smaller increase than investors expected, spurring hope that a glut of government debt would soon abate.
The Druckenmiller-Yellen tit-for-tat began last week with a video clip in which Druckenmiller, speaking in an interview with hedge fund manager Paul Tudor Jones at a conference, leveled his accusation about a missed opportunity to lower debt costs. Yellen’s riposte came in a CNN interview.
“I disagree with that assessment,” she told the network. The agency has been pushing out the average maturity of its bond portfolio and “in fact, at present, the duration of the portfolio is about the longest it has been in decades.”
Yellen said in the interview that “we have found in regular discussions with Wall Street professionals having regular and predictable issuance of maturities across the spectrum — both long, intermediate and short — is critical to having deep and liquid markets for US Treasuries, which is critical to lowering our costs over time.”
“And that is exactly what we’ve been doing,” she added.
The average maturity of US government marketable debt declined last quarter to 72 months, from 74 months, Treasury Department data show. The maturity had held at 74 months since reaching that mark in the third quarter of last year, which was the highest level on record in data going back to 1980.
Those are the figures that drew Druckenmiller’s fresh objections on Friday. He also said the Treasury had failed to refinance its obligations in the way that US mortgage holders and corporate borrowers did when rates were low.
“Look at the contrast with what US households did,” he said. Average mortgage maturities went from 3 1/2 to eight years as homeowners eased their payment burdens, he said, and “they’re not getting hit with all the interest rate increases now, but Treasury is.”
Druckenmiller said the real challenge for US fiscal policy is the ballooning federal debt — the annual deficit roughly doubled in the fiscal year that ended Sept. 30, effectively reaching $2.02 trillion.
“We have a big problem,” he said. “And ultimately that’s up to Congress.”
--With assistance from Laura Curtis.
©2023 Bloomberg L.P. | Interest Rates |
It was in March, as he tried to check his account on his phone, that Matthew first suspected something might be wrong.
His Natwest app wouldn’t let him log in, so he called the institution he had banked with for more than a decade to see what the problem was. “We have closed your business account,” said the staff member on the other end of the line.
Natwest said it had sent him a letter 90 days previously explaining that the bank had decided to “cease its banking relationship” with him, but Matthew says he never received it.
“If you have a relationship with a bank for 13 years, you think you might get a phone call at least,” said Matthew, a 30-year-old who runs his own marketing company. “But I got nothing. All I got was: we have closed it.”
After four days, Natwest reopened Matthew’s account for a further 90 days. During this time, Matthew estimates that he built up around £400 in charges — some were standard payments for the business account, even though he was using this time to close it, while others were penalties for becoming overdrawn as he tried to move to a new account but payments were still coming out.
He said: “I knew the account was going to close, so I was trying to move all my direct debits across and move money out, but I’ve ended up with all these charges.
“Because they were closing the account, I couldn’t use the standard switching service that does this all automatically. I’ve had to go through every single business payment and try to switch it over. I’ve lost days and days of my own time dealing with it.”
A Natwest spokesperson said: “Like all UK regulated banking institutions, NatWest is subject to legal and regulatory requirements, and we treat compliance with them as a matter of priority.
“This may mean NatWest is required to delay or refuse to act on a customer’s instructions, and/or suspend or restrict a customer’s accounts and/or services.”
It did not comment on the specifics of Matthew’s case.
Matthew, who says he is left wondering if he did something wrong and nervous about his accounts being closed again, is one of thousands of customers from a number of banks who say they have had their accounts closed without reason over the past few years.
After Coutts — the private bank owned by Natwest — closed the politician Nigel Farage’s account, there has been a backlash over the rights of banks to “de-bank” customers with little warning.
NatWest’s chairman is now under mounting pressure to determine whether Dame Alison Rose, the bank’s chief executive, played a role in the leaking of Nigel Farage’s private information.
The BBC apologised earlier this week for an inaccurate story that claimed Coutts shut down Mr Farage’s bank accounts because he did not meet its financial requirements.
Sir Howard Davies, NatWest’s chairman, is now facing calls to launch an inquiry into the matter. The Treasury has called an urgent meeting with banking bosses this week to discuss the issue.
But as far as Matthew’s concerned, Sir Howard didn’t do anything wrong. He can’t think of any potential red flags, and his personal account at the bank remained open.
“Everything was above board,” he said. “We pay our taxes, run the business through a proper business account. The business was being run the same as it always was.”
In reality, banks are allowed to close your account with limited notice and without giving a reason. The bank might suspect fraudulent activity, no longer accept your credit rating or believe you are “politically exposed” to illegal actions such as bribery.
If you are suspected of fraud, you might have a “Cifas” marker (effectively a red flag) put against your name. It lasts for six years. During this time, you may struggle to open other accounts or take out a mortgage.
While the markers are a good tool in the fight against fraud, there is evidence that banks have been somewhat heavy-handed in dishing them out. The consumer group Which? found that banks were wrongly closing customers accounts in more than three in 10 cases.
Banks have come under increasing pressure from the regulator to prevent money laundering and fraud in recent years. Part of the problem for banks is that they cannot “tip off” customers who are suspected of fraud that an investigation may be happening.
This means that they cannot tell one customer that their account is being closed due to poor credit but leave another in the dark as it could indirectly inform the latter that they are being investigated.
For the customer, however, this one-size-fits-all approach can cost time, stress and money.
“Having your bank account closed without warning can be an incredibly stressful experience, not least at a time when millions of households are struggling to pay bills,” said Sam Richardson from Which? Money.
“We need to see better communication to customers on what they need to do to challenge decisions, and fairer reviews by banks of these decisions.”
Since Farage’s case, the Treasury has announced plans to create stricter rules over how banks can close customer accounts. If the changes go ahead, banks will have to explain the reason for the closure, give a notice period of 90 days in all cases and allow people more time to appeal against the decision.
What can you do if your bank account is closed?
It’s frustrating, but there is little that you can do if your bank tells you it will close your account.
Contact your bank and ask them about the closure. It is unlikely to give you a reason or u-turn on its decision, but it’s worth trying.
Make a list of all the payments that typically go in and out of your bank account. Open an account with another bank, and start moving these direct debits over. Move out most of your money, but leave a buffer in the account in case any bills slip through the cracks.
Complain to the bank. If you are considering taking the bank to the Ombudsman over the closure, you need to complain to the bank first. The complaints process should be on the bank’s website, and make sure you keep a record of any calls or emails.
The bank has eight weeks to resolve your complaint, and should send you a final response letter which confirms their decision and any action they may take to put things right. If you are still unhappy, you can go to the Financial Ombudsman Service.
If the Ombudsman upholds your complaint, it is still unlikely that you will get your bank account reopened. However, you may receive compensation and an apology. | Banking & Finance |
The heat generated by a washing-machine-sized data centre is being used to heat a Devon public swimming pool.
The computers inside the white box are surrounded by oil to capture the heat - enough to heat the pool to about 30C 60% of the time, saving Exmouth Leisure Centre thousands of pounds.
The data centre is provided to the council-run centre free of charge.
Start-up Deep Green charges clients to use its computing power for artificial intelligence and machine learning.
Founder Mark Bjornsgaard said the company would also refund the leisure centre's electricity costs for running the "digital boiler" - and seven other England pools had signed up to the scheme.
The concept, developed over five years, is relatively straight forward - the hot oil is pumped into a heat exchanger to warm the water in the pool.
Sean Day, who runs the leisure centre, said he had been expecting its energy bills to rise by £100,000 this year.
"The partnership has really helped us reduce the costs of what has been astronomical over the last 12 months - our energy prices and gas prices have gone through the roof," he said.
"Looking at different ways of how we can save money as an organisation has been awesome."
Swim England chief executive Jane Nickerson said it was good to see pools "embracing innovative solutions".
Last summer, BBC News revealed 65 swimming pools had closed since 2019, with rising energy costs cited as a significant reason.
'Huge problem'
Cambridge University professor of engineering and the environment Dr Julian Allwood said: "If it's a sensible idea and it saves the leisure centre some money, then why not?" adding data centres on the whole used less energy than previously reported.
But large ones can require billions of gallons of water and millions of pounds to keep cool.
Some are even built under water - or in caves or very cold parts of the world.
And in Danish and Swedish cities, huge data centres power thousands of homes.
"Data centres have got a huge problem with heat," Mr Bjornsgaard said.
"A lot of the money that it costs to run a data centre is is taken up in in getting rid of the heat.
"And so what we've done is taken a very small bit of a data centre to where the heat is useful and required." | Energy & Natural Resources |
New Brands Will Not Cannibalise Sales Or Buyers, Says Wipro Consumer CEO
The acquisition is part of the FMCG maker's strategy to tap the lower end of the country's Rs 28,000-crore soap market.
Wipro Consumer Care and Lighting Ltd., a subsidiary of Wipro Enterprises Pvt., has acquired three soap brands—Jo, Doy, and Bacter Shield—from Mumbai-based VVF India, marking its third acquisition over the past 12 months.
The acquisition is part of the consumer goods maker's strategy to tap the lower end of the country's Rs 28,000-crore soap market and enter new geographies in a bid to grab the number one crown from Hindustan Unilever Ltd.
Jo toilet soap has a significant role in the country's north, east, and west markets, while Doy operates in the premium soap segment. Bacter Shield has an antibacterial range of soap and handwash. These brands have a combined market share of 11%. Together, they recorded revenue of over Rs 210 crore during the financial year 2023, the company said in a release.
The company didn't disclose the deal value.
"The three new brands complement our existing portfolio and will give us a stronger foothold in key markets," Neeraj Khatri, chief executive officer of Wipro Consumer Care and Lighting, India and SAARC, told BQ Prime.
Wipro already sells brands such as Santoor, Yardley and Chandrika in the country. Santoor is the second-largest soap brand after HUL's Lifebuoy. In FY23, the brand reported sales of over Rs 2,650 crore.
Still, the new brands will not lead to cannibalisation of existing customers or sales, Khatri said.
A sub-popular segment, or products priced below Rs 25, comprises a big chunk of the toilet soap market. But this market has remained untapped by Wipro so far, said Khatri. Jo, he said, "perfectly" fits into the segment as it will help the company attract buyers put off by the price of Santoor.
Jo, for instance, will be priced below Rs 25 for a 100 gm pack as compared with Santoor's 100 gm pack worth Rs 35.
"Santoor caters to the popular price segment and does significantly well in the south and west, while Chandrika is a sub-premium brand and does well in certain markets, while Yardley is a premium play in soaps," he said.
Both Jo and Doy are expected to help Wipro Consumer penetrate deeper into the northern and eastern parts of the country, where Santoor isn't that big.
"North and east comprise 65% of sales for sub-popular brands," he said.
Wipro Consumer Care recorded sales of Rs 10,000 crore in FY23, half of which was generated from its overseas operations. In India, the company grew 17.7% to become the fastest-growing FMCG brand.
This year, however, Khatri expects growth to taper off in line with that of the industry due to an inflation-led consumption slowdown. "Our growth would probably be in high single digits this year, unlike last year, yet we are hoping to grow ahead of the industry," Khatri said. He expects the urban markets to drive sales, while rural demand may take time to recover.
Inorganic expansion has been Wipro's key growth strategy.
The latest deal marks the company's 15th acquisition so far. The other acquisitions by the company over the years include Glucovita, Chandrika, North-West, Unza, Yardley, Bio Essence, and Splash Corp.
In the past 12 months, the company has acquired two Kerala-based brands—Nirapara and Brahmins—as it seeks to consolidate its position in the market and expand beyond its traditional home and personal care offerings. | Consumer & Retail |
Cineplex Is Said to Weigh Sale of Digital Advertising Business
Cineplex Inc., Canada’s largest theater chain, is weighing the sale of its digital advertising business, which operates electronic displays at restaurants and shopping malls, according to people familiar with the matter.
(Bloomberg) -- Cineplex Inc., Canada’s largest theater chain, is weighing the sale of its digital advertising business, which operates electronic displays at restaurants and shopping malls, according to people familiar with the matter.
The unit generated sales of C$39.5 million last year, according to the company, or about 3% of Cineplex’s total revenue. Its screens are in more than 30 countries in venues such as Tim Hortons cafes and McDonald’s Corp. restaurants. The proceeds from a sale would be used to reduce debt, said the people, who asked not to be identified discussing nonpublic information.
A representative for Toronto-based Cineplex declined to comment.
On the company’s most recent earnings call in November, Chief Financial Officer Gord Nelson said that “in addition to deleveraging through operating results, we will continue to evaluate value-creating liquidity events, which could include asset sales.”
Cineplex agreed last month to sell its Player One Amusement Group arcade business to private equity firm OpenGate Capital for C$155 million.
Cineplex shares rose as much as 9.4% earlier on Friday after Bloomberg reported that Kinepolis Group NV, one of the largest theater operators in Europe, recently considered making a bid for the company but chose not to proceed after concluding a deal would struggle to win regulatory approval.
Kinepolis may still pursue a deal if it can partner with another bidder to acquire some of Cineplex’s theaters, people familiar with the matter said.
Read More: Kinepolis Is Said to Have Weighed Bid for Canada’s Cineplex
©2023 Bloomberg L.P. | Consumer & Retail |
Debt-Burdened World Leaders Love To Hate Ratings Companies
The US downgrade from AAA by Fitch Ratings this week is just the most high profile episode in a new era of scrutiny over global public finances that deteriorated in the wake of the Covid pandemic.
(Bloomberg) -- No amount of power and prosperity can stop the irritation of getting judged for your borrowing habits, as the world’s biggest economy just experienced.
The US downgrade from AAA by Fitch Ratings this week is just the most high profile episode in a new era of scrutiny over global public finances that deteriorated in the wake of the Covid pandemic.
Rich-world peers from Italy to France and the UK are in the spotlight as higher interest rates impact debt levels exceeding 100% of annual output. Stakes are even higher for capital-hungry developing nations, where potentially ill-timed, negative revisions can push up borrowing costs for years.
Italian newspapers in 2018 with front page stories about Moody’s rating on Italy are displayed on sale in a newsstand in Rome, Italy.Photographer: Alessia Pierdomenico/Bloomberg
Countries run the gauntlet of rating companies because they’re hard-wired into the global investment system. Their uneasy relationship often fuels political ire, even if such assessments just hold up an awkward mirror to governments for decisions taken to keep voters happy.
“Everybody can kind of see what political and economic events are going on in a country, and so credit-rating agencies aren’t really revealing hidden information,” said Alison Johnston of Oregon State University, co-author of a book on ratings companies. “It’s kind of a thankless business, so to speak, because it’s really easy for credit-rating agencies to take the heat if they don’t get it right.”
She reckons the companies are taking a gentler approach in the wake of the pandemic than they did in the years after the 2008 global financial crisis.
That period saw S&P Global Ratings first cut the US from AAA. Both France and the UK began to lose top-rung status around then, while ratings downgrades punctuated the euro region’s debt crisis too.
Moritz Kraemer, the chief economist and head of research at LBBW Bank, recalls the harrowing time when he was at S&P during the euro crisis in the early 2010s.
“This was very, very hard because it was also fueling the intra-eurozone conflict that was between the periphery and the core, which was quite furious at the time,” he said in an interview. “We had analysts which had received death threats and had to be taken to a nondisclosed location for a while.”
Read More: AAA Is No God-Given Right, Says Ex-S&P Analyst Who Cut US in ‘11
Now, years of ultra-low rates have come to an end, just as countries nurse piles of debt built up during the pandemic, and try to meet widening commitments while keeping restless voters at bay.
“Public-sector debt has of course gone up very sharply,” Klaus Baader, global chief economist at Societe Generale SA, told Bloomberg Television. “Longer-term prospects for public-sector debt are poor in pretty much all advanced economies and in many, many emerging economies.”
This year, France was lowered to AA- by Fitch, the fourth-highest notch. It rates the UK at the same level, but with a negative outlook dating from Liz Truss’s disastrous 44 days in office last year. Italy, with debt above 140% of gross domestic product, could be cut to junk at Moody’s Investors Service.
Emerging-market borrowings have swollen drastically too, reaching an all-time high of $100 trillion in the first quarter, led by sovereigns and non-financial companies.
Public Spats
Rating cuts are often met with fury by officials incensed at the accusation that they’re seen as less likely to meet their debt commitments, a sentiment that chimes with the US Treasury’s reaction this week.
The most common rebuttal is to challenge the analysis. When Poland got cut by S&P in 2016 for example, its Finance Ministry said the assessment was “dishonest.”
Pre-emptive criticism falls into this category. In 2011, the Bank of France’s governor, Christian Noyer, told ratings companies that if they wanted to lower France’s top rating, they should downgrade the UK first.
Giorgia Meloni opted for an even earlier rebuttal on Facebook in 2020 — well before she became Italian premier last year — to say that “ratings agencies don’t like political parties that defend the national interest.”
Kraemer was the S&P analyst in 2004 when it first downgraded Italy. “At that point, no rating agency had ever downgraded any eurozone country — and there’s still sort of a flock of Italians who know me by name and sometimes troll me on social media. It’s very personal.”
Other countries choose to shun the assessment altogether. Ukraine stopped talking to Moody’s several years ago, furious that its rating was kept low while S&P and Fitch were raising theirs.
Russian President Vladimir Putin started a homegrown credit-ratings company in 2016 and is no longer assessed by major rivals. El Salvador’s president, Nayib Bukele last year opted for a rude acronym on Twitter to communicate his disdain.
Turkish reactions lurch between being dismissive and annoyed. And in Africa, leaders including Senegalese President Macky Sall have demanded an overhaul of the credit-rating system, complaining that Western prejudice keeps borrowing costs unfairly high. Finance ministers are considering establishing a rating agency as an independent entity of the African Union.
Big Shrug
Timing is a frequent criticism of governments. In the US this week, the common refrain was “Why now?” Highlighting limited investor reaction to downgrades is another. But that’s often because ratings companies are making assessments in slow motion that simply validate what investors have already determined for themselves.
Michel Janna, a former Colombian public credit director and head of sovereign risk Management at Goldman Sachs Group Inc., said that markets most commonly shift well before credit decisions.
“You see depreciations or appreciations of those type of assets way before a ratings agency makes a change on their rating,” he said.
Japan has been downgraded by all three major rating firms for more than a decade, but the actions have had little effect. Since Moody’s Investors Service downgraded China’s debt in 2017 for the first time in three decades, total foreign holdings of Chinese bonds in the interbank market have risen by almost three times. India’s Finance Ministry accused companies in 2021 of “bias and subjectivity.”
Political Weapon
Meanwhile the threat of a downgrade can sometimes become a political weapon. Former UK Chancellor George Osborne cited that as a reason for austerity in 2010. As Israel descended into political upheaval this year after efforts by Prime Minister Benjamin Netanyahu’s to overhaul the judiciary, critics touted the risk of a rating cut against him.
It’s a rare thing for a government to applaud a downgrade, but they’re always enthusiastic when ratings companies go the other way.
In Ireland, which won an upgrade from Moody’s this year, Finance Minister Michael McGrath didn’t hesitate to respond with a statement of applause.
What is clear and established is that ratings companies aren’t infallible, as the global financial crisis experience showed, notoriously so for their actions in awarding lots of top ratings for securitized mortgage debt.
On sovereigns, they have even found themselves forced into embarrassing reversals. Brazil’s upgrade by Moody’s to investment grade in 2009 on the back of a commodities boom lasted only until 2016, for example.
Meanwhile the self-reinforcing nature of downgrades are a particular sensitivity, often because ratings companies were too slow to change their prior assessments.
“If they start to engage in downgrades very suddenly and very severely, that really has the potential to produce a market panic,” said Johnston. “They learned this really well during the European debt crisis, when they were kind of blamed for initiating it.”
For all the prior moments of clumsiness or flawed analysis by ratings companies however, it doesn’t change the overall picture of mounting borrowings that both they and the investors they serve are seeing. Governments may not like the message, but their debt figures tell their own tale.
--With assistance from Ethan Bronner, James Mayger, Clarissa Batino, Claire Jiao, Vrishti Beniwal, Rebecca Choong Wilkins, Guy Johnson, Alix Steel, Dani Burger, Kriti Gupta, Piotr Skolimowski, Chiara Albanese, Zoe Schneeweiss, Galit Altstein, Paul Richardson, Matthew Bristow, Onur Ant and Beril Akman.
(Adds new comments from former head of sovereign ratings starting in eighth paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
How Billionaire Lakshmi Mittal’s Brother Got A $500 Million Bailout In Nigeria
Pramod Mittal, whose career in the steel industry has been less glittering than sibling Lakshmi Mittal, has a string of abandoned factories and a trail of unpaid debts to his name.
(Bloomberg) -- Billionaire Lakshmi Mittal’s younger brother is effectively getting a helping hand — and a possible way out of financial distress — from Nigerian taxpayers, after the country’s government agreed to pay his company almost $500 million to settle a contract dispute over a deal that a previous administration said was tarnished by fraud.
Pramod Mittal, whose career in the steel industry has been less glittering than his better-known sibling — the tycoon behind the €20 billion ($21.2 billion) ArcelorMittal SA conglomerate —, has a string of abandoned factories and a trail of unpaid debts to his name. Five years ago, his Isle of Man-registered Global Steel Holdings Ltd., or GSH, was put into liquidation over $167 million owed to Moorgate Industries Ltd., a company spun off from one of the world’s biggest steel traders.
Pramod Mittal in London, in February 2016. Photographer: David M. Benett/Getty Images Europe
As a UK court weighed Moorgate’s request to declare Pramod personally bankrupt three years ago, the London-based Indian national held out the prospect of a payout from the Nigerian state to clear his debt. The judge was unconvinced at the time, but the settlement subsequently reached with Nigeria last year now looks like the 67-year-old’s best route out of insolvency. Still, while payments from the Nigerian government have reached GSH’s liquidators, as of Oct. 4, Moorgate had yet to see any of those funds despite having asked for them, court documents show.
With Pramod’s bankruptcy winding its way through English court rooms, a new Nigerian president has taken office, and last month his steel minister said one of the administration’s top priorities is to finally fire up the furnaces of the massive plant at the heart of the younger Mittal’s $496 million compensation. The government has justified the agreement with a former unit of Pramod’s GSH, which was announced in September 2022, saying it frees the state to pursue its ambitions for the sprawling 24,000-hectare (92 square mile) site.
The settlement — representing about 1.5% of Nigeria’s foreign reserves — is just the latest twist in the saga of the vast Soviet-built factory complex begun 44 years ago. The project has sucked up more than $7 billion in public investment and has yet to produce any metal. The story of the Ajaokuta steel mill on the banks of the Niger River 190 kilometers south of the capital, Abuja, is often cited as emblematic of the corruption, poor governance and incompetence that bedevils the West African nation. The country’s most notorious white elephant still sparks passionate debate over whether it should be written off or revived.
“Ajaokuta has been a black hole that has gobbled up billions of dollars, enriching multiple generations of politicians and foreign enablers,” says Matthew Page, a former Nigeria expert for US intelligence agencies and now an associate fellow at London-based Chatham House. “This last failed reboot — and the giant price tag that came with it — is a preview of the next failed re-concessioning attempt. At this point, Ajaokuta’s dilapidated machinery is capable of doing only one thing: making public funds disappear.”
Neither Pramod’s representatives nor the spokespeople for the newly elected President Bola Tinubu and Steel Minister responded to requests for comment. Abubakar Malami, Nigeria’s attorney general from 2015 to earlier this year, on whose watch the settlement was reached, said last year that the administration of former President Muhammadu Buhari “rescued the steel industry from interminable and complex disputes as well as saving the taxpayer from humongous damages.”
Pramod’s Involvement
Pramod entered into the Ajaokuta picture in 2004, when then President Olusegun Obasanjo awarded GSH a series of contracts, including an arrangement first to manage and later to buy the steel mill.
Shortly after GSH took over the plant, Solgas Energy Ltd., a small US company, sued it in Texas. Solgas claimed that GSH discussed becoming Solgas’ subcontractor on Ajaokuta before breaching a confidentiality accord and bribing Nigerian officials, including one of Obasanjo’s sons, to “steal the concession.” While the case was thrown out on jurisdictional grounds, in December 2008 a separate arbitration tribunal ordered Nigeria to pay Solgas $15.2 million in damages for the wrongful termination of the contract — while noting the US firm hadn’t provided evidence to support the corruption allegations.
By then, Umaru Yar’Adua had taken over as Nigeria’s president, and he canceled GSH’s contracts after a panel that his steel development minister set up said the concessions were rife with irregularities. GSH’s claim it had invested $200 million was “a ruse,” the inspectors said. Rather, the company had used its Nigerian assets to borrow more than $192 million from local banks — funds they “strongly” suspected had been dispatched abroad, they said.
The panel’s full report — never made public but seen by Bloomberg — said rescuing Ajaokuta was beyond the “financial, technical and experiential capabilities” of GSH, which instead had been “systematically cannibalizing, vandalizing and moving valuable equipment” out of the factory. GSH and its Nigerian unit initiated arbitration proceedings against the government and later entered mediation, which produced last year’s settlement.
Pramod had signed two earlier agreements with the Nigerian government – in 2014 and 2016 – that would have seen his firm retain the right to manage an idled state-owned iron ore mining company but receive no payout.
“I threatened them with criminal proceedings for tax evasion, in addition to other criminal infractions that they had clearly committed,” Mohammed Adoke, a former attorney general who had reached the first of these accords, wrote in his memoir titled “Burden of Service.” “To amicably resolve the issue, I insisted that Global Steel should relinquish (Ajaokuta) for free without any form of compensation.”
Adoke’s successor, Malami, who was the attorney general when the half-a-billion-dollar settlement was struck, modified the terms of the deal to take back the mining firm and award a payment. Malami didn’t respond to a request for comment.
Moorgate’s Case
Even before finalizing the Ajaokuta windfall, Pramod had suggested using the money to pay down the Moorgate debt. In June 2020, as Moorgate sought his bankruptcy, he told Judge Catherine Burton that GSH’s liquidators had failed to account for the “very real prospects of a payment” from Nigeria. He said his Abuja-registered subsidiary would settle the obligation to Moorgate “out of whatever money it receives from the mediation,” according to the decision issued by Burton, who — unpersuaded — ruled in favor of the creditor.
Pramod also tried another way to skirt bankruptcy — using an individual voluntary arrangement, or IVA. He proposed repaying less than £5 million out of £2.5 billion ($3.1 billion) — or 0.2% of what a handful of companies and individuals said they were owed by the businessman.
Moorgate countered that “friendly creditors” who approved this meager offer were either associated with Pramod or relying on loan agreements that were “not true or contemporaneous documents.” A UK judge revoked the IVA last November, expressing “serious doubts” about the authenticity of the paperwork. In the IVA, Pramod said he was worth £117,000, claiming he didn’t control GSH. The family’s London mansion is held through an offshore company whose directors were senior managers at GSH.
Contrary to Pramod’s argument, the court determined he controlled the British Virgin Islands-registered company that owned GSH through his influence over a family trust, with an Isle of Man judge similarly describing him as that firm’s “driving force.”
Pramod made other apparent attempts to distance himself from the group and its subsidiaries. Since April 2021, GSH’s Nigerian unit — the settlement’s beneficiary — has been owned by a Mauritian entity named Luminous Star Ltd., classified as defunct for a decade and with a director who was formerly a GSH employee. While Pramod ceased to be a director of the Nigerian firm in late 2020, his son sits on the board.
In January, Nigeria’s then Information Minister Lai Mohammed said the government had paid $446 million to GSH’s local unit in multiple instalments under the settlement. The law firm hired by the Nigerian subsidiary for the mediation made six transfers from these funds to GSH’s account, totaling £219 million ($272 million) between October 2022 and February 2023, according to reports filed by the company’s liquidators. The law firm, King & Spalding LLP, declined to comment on the rest of the money.
In December and again in March, Moorgate asked to be paid out of funds recovered by GSH’s liquidators, according to a court decision issued last month in the Isle of Man. The liquidators, who estimate that only £40 million is available for creditors once GSH’s potential tax liability and additional costs are taken into consideration, are yet to comply with the request, the judge said on Oct. 4, ruling that Moorgate is entitled to receive part-satisfaction of the debt. Moorgate and GSH’s liquidators declined to comment.
Emulating Lakshmi
Like his brother Lakshmi, who built the world’s second-largest steel producer after splitting from the family business in the mid-1990s and embarking on a legendary deal-making spree, Pramod’s efforts also hinged on international acquisitions. As Lakshmi, the UK’s sixth-richest person, entered the wealth stratosphere, his brother sought to emulate him.
In 2004, Lakshmi’s daughter got married in a lavish ceremony at Versailles, France. Nine years later, the younger Mittal spent £50 million on his daughter’s wedding in Barcelona, according to Moneylife, an Indian media outlet, and Spanish news site Vanitatis. Pramod’s spokespeople didn’t comment on the figure. Just this year, Pramod’s son got married to his long-term partner in a “multi-million pound ceremony” at a five-star UK hotel, the Daily Mail reported.
Pramod’s steel ambitions took him not only to Nigeria, but also to Bosnia, Bulgaria, Libya, Zimbabwe and the Philippines where his companies ran up nearly a billion dollars in debts. During the mid-2000s expansion, GSH agreed to take a loan of up to $35 million from an offshore company owned by his brother Lakshmi, board meeting minutes show. Neither Lakshmi nor the group he heads “have any business connection to the investments” of Pramod, a spokesperson for ArcelorMittal said by email.
In the Philippines, GSH bought a shuttered steel plant in 2004. Within five years, activity at the facility stopped amid a legal battle, with lenders claiming Pramod’s firm had defaulted and the company accusing the banks and liquidator of reneging on an obligation to clear tax arrears. In Bulgaria, where GSH failed to turn around a communist-era steelmaker, a Sofia court put the company owning the mill into bankruptcy in 2008 after it defaulted on a Є325 million bond.
Authorities in Bosnia-Herzegovina arrested Pramod in July 2019 and charged him in January this year with “heading an organized crime group.” Prosecutors alleged that GSH “illegally appropriated” about $11.5 million from a manufacturer of iron-ore smelting coke that the firm took control of in 2003. In a statement following his detention, GSH said the “complaints are categorically false,” according to Mumbai-based news outlet Global Prime News. Pramod was released on bail shortly after being questioned and has not returned to Bosnia. He and his family have initiated arbitration proceedings against the Bosnian state.
Meanwhile, in Nigeria, the attachment of the country’s leaders to the Ajaokuta plant shows no sign of abating, even though critics including the World Bank have called the facility obsolete. President Tinubu pledged during his election campaign to get the steel mill up and running. His predecessor’s government, which left office in May, congratulated itself not only for liberating Ajaokuta from Pramod’s legal claim but also securing it for a settlement significantly smaller than the $5.3 billion that GSH had apparently demanded.
Just last month, touting the potential of the complex to one day create half a million jobs, Vice President Kashim Shettima said the “Ajaokuta plant can be a game changer for the Nigerian nation.”
--With assistance from Misha Savic, Slav Okov and Swansy Afonso.
©2023 Bloomberg L.P. | Africa Business & Economics |
The Conservative party is going in a “very dark direction”, a Tory former minister has said, as misinformation around climate continues.
Chris Skidmore, the MP for Kingswood in Gloucestershire, served as energy minister under Theresa May when she signed the target of net zero emissions by 2050 into law. He was appointed last year as Liz Truss’s net zero tsar, and asked to review the UK’s net zero plan, which is now being published in paperback.
Skidmore, a loyal Tory who once served as vice-chair of the party, has found himself left behind as many of his colleagues turn their backs on net zero. He was the only Conservative MP to vote with Labour on its amendments to the energy bill in September.
“I don’t feel I have moved in my position,” he said. “I am a liberal Conservative who came in under David Cameron. We used that language of hope, of opportunity, of facing the future, not turning to the past and claiming that things were somehow better.”
Many critics believe Rishi Sunak has focused on stoking the culture wars since becoming prime minister. Ministers have referred to those campaigning for climate action as “zealots”, criminal law has been changed in a way that targets fossil fuel protesters, and there has been a change of tone on many other issues, from immigration to homelessness.
“I think there are certain values that have been established by certain groups in the Conservative party that are not my values,” Skidmore said. “Politicians [are] turning their backs towards people who need help; speaking out about what they are against, rather than what they are for.”
He described the Conservative party as a broad church. “But there are certain individuals who want to take it in a very dark direction. I think the challenge is, as a politician, how you frame your arguments. [They] should be towards the greater good, and not towards the lowest common denominator.”
Asked if he was referring to Suella Braverman’s comments about homelessness being “a lifestyle choice”, Skidmore nodded and said: “That remark has already been called out by members of the cabinet, so I think I’m not alone in thinking that is a deeply regrettable thing she said.”
Skidmore was more positive about the opposition leader, Keir Starmer, than about Sunak. “What Keir Starmer has done, he’s got a mission-based approach; taking that long-term approach and focusing on outcomes. What we [the Conservatives] are lacking at the moment is the positive, future-facing confident approach.”
Skidmore suggested Sunak lacked the confidence of his convictions. “If you’re confident in your abilities you don’t waste your energy going after people, you just get on with your job of knowing: ‘This is what I believe and this is what I’m going to achieve.’ If you aren’t confident in your abilities, you start attacking other people and framing your beliefs in a negative way.”
He said he had stopped voting with his party out of loyalty and instead saw his responsibility as being to his constituents and to the climate. “My responsibility is to my constituents, while I’m still in power, to make sure that they have the best possible chance for cheaper bills. I’ve not got much time left in parliament; I’m going to make the case for net zero. Net zero is measured, proportionate and will achieve economic growth.
“I will be speaking in contrast to those extreme voices that want to somehow suggest that net zero is an imposition. What is the alternative they are offering, apart from maintaining the industries of the past that are going to be shutting down anyway?”
Skidmore said he thought some of the more extreme rightwing views espoused by some parts of the media were partly to blame for Sunak and his cabinet’s veer to the hard right.
“In certain parts of the media, on these new channels, the attack on net zero is a proxy war,” he said. “I think the challenge has always been, to what extent you engage with those who have genuine concerns about costs, versus wanting to just use this as a means by which to delay, go slow, to deny. And I think my concern is obviously whether those individuals are given an equal platform or not. Because there are still those who doubt the science, and we haven’t got enough time now to be playing games.”
“There is a world of just the private sector getting on with it, and a world that wants to basically play to a base of the Telegraph, GB News, that doesn’t represent reality. This has caused a myopic focus in Westminster and Whitehall which I’ve seen as being behind the curve on issues that are not the issues that will encourage economic investment in this country.”
Skidmore said he was particularly angry about attacks on the Climate Change Committee, an independent body that advises the government on five-year “carbon budgets” necessary to meet its 2050 target, which has been politicised of late by politicians and the media.
“There have been specific attacks coming from the Telegraph, claiming that it has powers that it does not have. It’s an advisory body. It doesn’t have any ability to make specific policy recommendations. All it does is report on the impact of the government’s policy recommendations. This is another classic case of misinformation.”
However, Skidmore said he did believe there was a future for the tradition of conservative environmentalism.
“I really feel as a Conservative that there are thousands of people who have voted Conservative in the past because their understanding of what it is to be conservative is to conserve, is to protect nature, is to protect the environment, is to look at how to do things in maybe a measured and modest way and to balance various different competing interests. That is what it is, to me, to be a conservative.”
Mission Zero is published on 28 November by Biteback Publishing | Renewable Energy |
Australia’s big banks are leaning on new borrowers to keep profits rolling as they prepare for more of their existing customers to succumb to rising borrowing costs.
Mortgage rate analysis shows lenders are lifting rates for new borrowers at a faster pace than official cash rate increases. Fixed rates are also leaping higher.
Banks were preparing their mortgage books for increasing bad debts, as rising rates affected households, said Paul Kofman, business and economics faculty dean at the University of Melbourne.
“When inflation crept up and interest rates started to increase, profit margins of banks increased considerably. But what we are seeing now is a provision for mortgage defaults,” Kofman said.
“Banks are getting spooked about increasing default rates when interest rate rises continue. We’ve come to the peak of profit margins and beyond that point they are getting eroded by bad debts.”
The sector was able to endure the initial stages of the pandemic, before banks started boosting profit margins through the inflationary period by increasing lending rates faster than their deposit rates, their primary source of funding.
As the pace of rate hikes slowed, they turned their gaze to new customers to maintain profit margins.
The big banks have now lifted rates on offer to new customers by 0.32 percentage points more than official cash rate increases since the start of the year, according to mortgage broker Finspo.
This has created an unusual scenario with advertised specials now often priced higher than rates applied to existing customers, the Finspo chief executive Angus Gilfillan said.
“There’s been so much change it’s getting pretty confusing for mortgage holders; we are finding a lot of customers are unsure what a good rate is,” said Gilfillan.
Many lenders have also reduced or stopped offering cash backs, which are commonly used to entice new customers.
The changes contrast with the usual strategy of enticing new borrowers with more attractive rates than those applied to existing customers.
If banks were to start lifting rates on exisiting customers at a faster pace than official rate rises, they would likely face intense public and political pressure, and risk pushing more already heavily indebted households into financial distress.
An Australian Banking Association spokesperson said lenders might be able to assist customers by restructuring loans, offering interest-only payments, extending the term of a loan or offering payment deferrals.
Forced sales are most prevalent among first homeowners who bought homes when rates were low during the early stages of the pandemic and who have now found repayments unaffordable, and among mortgagees nearing or in retirement, according to financial counsellors.
Fixed rates have also risen significantly, but they are less correlated to official cash rate movements than variable rates.
The Reserve Bank’s cash rate has jumped from 0.1% to 4.1% since this rate-hiking cycle started in May last year, pushing most mortgage rates well above 6%.
Someone with a $750,000 home loan would need to find more than $1,700 extra a month to meet variable rate changes.
Australia’s biggest lender, Commonwealth Bank, is scheduled to release its full-year results on Wednesday, which should provide some insight into the sector’s profitability.
The bank’s arrears and default figures will also show how rising borrowing costs are weighing on customers.
At its half-year results reported earlier this year, CBA’s chief gauge of profitability, net interest margins, spiked to 2.1%, an historically healthy level.
A CBA spokesperson said rate changes on products for new customers did not impact existing borrowers.
“As part of our ongoing review of interest rates, market conditions and funding costs, we periodically make changes to new home loan borrowings on certain home loan products,” the spokesperson said. | Banking & Finance |
London mayoral candidate Paul Scully has become the first minister to support scrapping the tourist tax.
The frontbencher, who formally announced his candidacy on Thursday, admitted he has struggled to “hold the line” on the 20 per cent sales levy charged to all non-British visitors.
Mr Scully, the science, industry and technology minister, urged Jeremy Hunt to model the benefits of VAT-free shopping and that the current policy is costing London hundreds of millions in sales.
“I’ve been campaigning within [the] government, clearly, as a Minister of collective responsibility,” he told LBC’s Nick Ferrari.
“But there are a few little areas where I struggle to hold the line, shall we say, and this is one. Because, you know, some people see this as luxury brands and big shops getting a tax rebate. It’s millions of pounds, hundreds of millions pounds of lost revenue to this country.”
Mr Scully went on to argue people are “going to Milan, going to Paris, rather than coming to London” in order to avoid paying the additional fee.
“What I've asked the Treasury to do is instead of seeing it as a cost of lost revenue, the static modelling. They just see it [as] £2 billion they're going to lose.
“Do some dynamic modelling, see what the behaviours change as a result of restoring VAT-free shopping. What they'll find is they get more money, as a result, in revenue and tax.”
Asked about Mr Scully’s remarks, a No 10 spokesman said Mr Scully was “speaking on a specific issue”, while continuing to speak on behalf of the Government as one of its ministers.
Pressed on whether Mr Sunak’s view on the tax had changed, he insisted tax policy was a matter for Mr Hunt as Chancellor and that such decisions would be taken “in the usual way”.
A new digitised version of VAT-free shopping for tourists was among policies supported by Liz Truss and Kwasi Kwarteng in their short-lived mini-Budget.
Alongside his science brief, Mr Scully has also been the minister for London since February 2020, serving under three successive prime ministers, but has recused himself from this role during the mayoral race.
Elsewhere in the interview, he suggested he would have the confidence of Boris Johnson.
“I know he's got every faith in me,” he said. “I don't want to speak for him and give him a virtual endorsement. But, as I say, I served in his government… I know he'll have faith in me.” | Consumer & Retail |
Most voters believe it would be a mistake for Rishi Sunak to hand the country’s richest extra wealth by slashing inheritance tax.
The Prime Minister is considering reducing the levy or ditching it altogether in a desperate bid to win voters at the next election. The levy was only paid by 4% of estates in 2021, with couples able to hand up to £1million to their children without paying a penny.
A poll shows the majority (60%) believe those over this threshold should continue to pay the same or be taxed more. According to the survey, commissioned by the Trades Union Congress, just 20% believe they should pay less in inheritance tax.
TUC General Secretary Paul Nowak said: “Nothing works in this country anymore. But instead of getting on with fixing our public services, the Conservatives are considering a tax giveaway to millionaires." He said scrapping the charge would be a "huge tax cut for a very small, very wealthy minority" and "drain £7bn from the public purse each year."
Mr Nowak added: “Slashing it would be reckless in the extreme and an act of levelling down. It’s no surprise that a clear majority of the public oppose lower inheritance tax thresholds and instead want the wealthiest to pay their fair share."
"At a time when our NHS is on its knees, school buildings are crumbling and runaway inequality is blighting every corner of the country, the last thing we need is an unfunded tax cut for the wealthiest. The Conservatives have broken Britain, and they seem hell-bent on making things even worse. It's time for a reset. We need an economy that rewards work, not wealth."
Quizzed earlier this week on inheritance tax, Mr Sunak refused to rule out scrapping the charge after a Cabinet minister labeled it "punitive". The Tory leader said he would "never comment on tax speculation, of which there is always plenty".
He added: "What I would say is that the most important tax cut I can deliver for the British people is to halve inflation. "It is inflation that is putting up prices of things, inflation that is eating into people's savings and making them feel poorer - and the quicker we get inflation down, the better for everybody.
It comes after the Institute for Fiscal Studies said the wealthiest 1% would get half the benefit of abolishing the tax. Opinium interviewed 2,085 adults in the UK between 23 and 25 August on behalf of the TUC. | United Kingdom Business & Economics |
Kmart stores in Australia have yanked a Christmas-themed bag for hams emblazoned with “Merry Ham-Mas” — after it sparked outrage for resembling the terror group Hamas.
The festive drawstring bag, which features holiday decorations and is intended to store a ham in the fridge, first drew ire from the Australian Jewish Association.
“K-MART STUFF-UP! Check out the special Christmas bag currently available via Kmart online. Yes, it’s real!!” the group wrote on X, where it posted an image of the $4 terror-evoking tote.
“Although this is potentially funny (the AJA committee has tossed around some non-PC jokes) it’s really not a good look. We suspect some product manager may cause the company some embarrassment,” it said.
“So we’ve politely written to Wesfarmers corporate suggesting the product be pulled,” the AJA added.
Kmart later apologized for the cringeworthy gaffe.
“We got it wrong on this occasion, and we apologize unreservedly,” a company rep told Politico Thursday.
“When designing this product we clearly didn’t think through all the implications and the product has been removed from sale,” the spokesperson added.
The Jewish rights’ group later posted an update, saying it had been contacted by “senior management” from Kmart announcing that the bag was “being pulled out from the website and all stores.”
In an interview with The West Australian, AJA president David Adler praised Kmart for yanking the product.
“It’s not normal times, there are people that will distort things and will harass the Jewish community,” he told the outlet.
“Of course, there are bigger issues to be addressed, dealing with the actual terrorism is important, but one of the other things we are dealing with is propaganda,”? Adler said.
“I want to give credit to Kmart management as they acted very quickly,” he added.
Christmas ham is a staple of holiday traditions in Australia, where it is often served cold. | Consumer & Retail |
Birmingham city council, the local government body of the U.K.’s second-largest city, effectively declared itself bankrupt on Tuesday because it doesn’t have enough money to pay £760 million ($955 million) in equal pay claims it owes to female government employees who were paid less than men in the past.
The council, which is Europe’s largest local authority, issued a section 114 notice to cut all nonessential spending, declaring that it faces a deficit of £87 million ($109 million) in the current financial year.
“The Council has insufficient resources to meet the equal pay expenditure and currently does not have any other means of meeting this liability,” the Birmingham City Council said in a statement.
“The notice means all new spending, with the exception of protecting vulnerable people and statutory services, must stop immediately.”
In 2012, the Supreme Court ruled in favor of a group of mostly female employees who didn’t receive bonus payments that were given to those occupying traditionally male-dominated roles at Birmingham’s council.
Birmingham’s council said in June that it had already paid £1.1 billion ($1.4 billion) in equal pay claims over the last decade, but still had some remaining claims which it estimated would accrue at the rate of between £5 million ($6.3 million) and £14 million ($17.6 million) a month.
“This is one of the biggest challenges this council has ever faced, and we apologize for the failure to get this situation under control,” the council said at the time, adding that it was in talks with external auditors to find possible solutions.
Councils are typically funded through a combination of sources including central government grants, parking services, and taxes.
A spokesperson at Prime Minister Rishi Sunak’s office said “it’s for locally elected councils to manage their own budgets” but said the government was providing additional support worth £5.1 billion ($6.4 billion) to councils this financial year, according to the Guardian. Sunak had previously ruled out the possibility of a bailout, blaming Birmingham’s leaders for mismanaging funds.
Birmingham joins other cash-strapped councils like Woking, Croydon, and Thurrock in declaring bankruptcy. While the council plans to shield the vulnerable sections of the population from the impact of this austerity measure, councils elsewhere have hiked taxes to shore up finances in the past.
The funding gap for local authorities in England and Wales is expected to climb to £2 billion ($2.5 billion) or more in the 2023–2024 financial year, according to political organization Local Government Association.
Apart from the mountainous bill for settling equal pay claims, Birmingham’s city authorities face financial challenges due to inflation and increasing cost of social care. The city also hosted big events including 2022’s Commonwealth Games and implemented a new IT system, which added to its financial pressures. At the same time, the council has invested in regeneration projects that have boosted the tech sector and made Birmingham among the best-performing city economies.
A representative at the council directed Fortune to its Tuesday statement when asked for comment. | United Kingdom Business & Economics |
- Homeownership is synonymous with the American dream for a large share of U.S. adults.
- Renting may be a better idea for prospective homebuyers.
- That's due to flexibility of rentals, and a "nuisance" factor and hidden costs associated with homebuying, financial advisors said.
Have the money to buy a home? If you follow through, it may not be money well spent.
For generations, Americans have thought of homeownership as a hallmark of success. Even today, 74% of U.S. adults say owning a home is a cornerstone of the American dream — ranking higher than milestones like retiring, having a good career, getting a college degree or having kids, according to a recent Bankrate poll.
But there are reasons not to buy a home, even for those who can afford to do so.
"I don't think it should be an automatic for everyone," said certified financial planner Jude Boudreaux, senior financial planner with The Planning Center in New Orleans and a member of CNBC's Financial Advisor Council. "You could live your whole financial life renting and be very happy."
Here are three reasons it may be smarter to rent.
Prospective homebuyers should have conviction about where they want to live, said Kamila Elliott, a CFP based in Atlanta and a member of CNBC's Advisor Council.
For example, would they enjoy living for several years in a particular city or suburb, or in a specific neighborhood? If they had relocated for a job, would they still want to live there if they lost that job?
If the answer to any of those questions is no, renting is likely best, said Elliott, co-founder and CEO of Collective Wealth Partners.
"If you can't commit to being there [at least] three years, don't buy," said Elliott.
Flexibility is a big plus for renters, Boudreaux said.
For example, if you move to an unfamiliar place, "renting can be a nice pathway," he noted, in order to avoid buying and then discovering you don't like the location.
The benefits can be both psychological and financial.
Home prices can be volatile, making it more likely a buyer wouldn't make a profit if selling after just a short period of ownership, Elliott said.
Upfront transaction costs like realtor's fees are also generally "very expensive," making it harder to break even on a short-term home purchase, Boudreaux said.
There's also a certain lifestyle benefit to renting instead of buying, advisors said.
Renters don't have to deal with the "nuisance factor" of scheduling appointments with landscapers and exterminators or paying for home repairs, Elliott said. That's typically a landlord's responsibility.
"You don't have to worry about fixing the dishwasher, garage door, or HVAC unit," Elliott said.
Depending on the building, renters may feel safer if there are additional security cameras or a doorman, or get convenience and social benefits if there are amenities like a gym or pool, she added.
Conversely, a house may be the right lifestyle choice for someone who wants a big yard with a nice garden and room for a dog to run around, Boudreaux said.
The financial benefits of homeownership are "vastly overstated," Boudreaux said.
"Buying a home because you feel it's the thing you should do can be [financially] dangerous" and lead to regret, he added.
For one, a financial assessment of affordability is incomplete if consumers only compare monthly rent and mortgage costs. The true cost of homeownership also includes costs for utilities, home improvements and maintenance, property taxes, and homeowners insurance, advisors said.
The average homeowner paid more than $15,000 a year in addition to their mortgage to cover these costs in 2022, according to Clever Real Estate.
Secondly, a tax deduction for mortgage interest isn't as valuable as it once was, Boudreaux added.
A 2017 tax law passed during the Trump administration reduced the mortgage interest threshold; married couples can claim a tax deduction on the first $750,000 of their mortgage, down from $1 million.
In a general sense, it's also more difficult to get the financial benefits of a tax deduction. The law doubled the standard deduction (it's $27,700 in 2023 for married couples) and capped a deduction for state and local taxes at $10,000.
Taken together, a tax break for mortgage interest "is not the benefit it used to be," Boudreaux said.
Of course, owning a home is often seen as an investment, as well as securing a place to live.
Homeownership "allows families to build wealth and serves as a measure of financial security," according to a 2018 paper by Laurie Goodman of the Urban Institute and Christopher Mayer of Columbia University. Home equity can play an important role in retirement savings, for example, if retirees are able to tap that wealth, they wrote.
But there are "substantial variations" in homeowner experience based on factors like purchase timing, holding period and location, they said.
For example, wealth building depends on one's ability to hold on to a home during downturns; lower-income and minority borrowers are less likely to do so, and thus benefit less from homeownership, Goodman and Mayer wrote. Additionally, homeowner returns "have been less favorable" in areas like Cleveland and Chicago relative to other metro areas like Los Angeles, Dallas and New York.
Historically, residential real estate returns and those of stocks have been "very similar and high," according to a paper published by the Federal Reserve Bank of San Francisco, which examined global investments from 1870 to 2015.
But in the U.S., investors have gotten a better net return on stocks relative to housing during that time: 8.3% versus 6% a year, on average, after accounting for inflation, according to the paper. | Real Estate & Housing |
Hammered by inflation, recession fears and doubts about the future of Social Security, an increasing number of working Americans say they plan to claim their Social Security benefits early while staying on the job. Here are the factors driving this trend and the pros and cons of following suit.
Consider working with a financial advisor to create a retirement plan that fits your goals, risk profile and timeline.
More People Claim Social Security Early
42% of Americans said they plan to file for Social Security before their full retirement age while also continuing to work, according to a 2022 survey by the Nationwide Retirement Institute – up from 36% in 2021.
Workers who've paid into the retirement system can claim their Social Security benefits as early as age 62, but that decision can result in a monthly benefit check that's as much as 30% less than the payment they'd receive at full retirement age, which is between ages 66 and 67 depending on what year you were born. By waiting beyond longer to file, a retiree can increase their Social Security payment by 8% each year beyond the full retirement age they wait to file, topping out at 70 years.
As of February 2023, the average monthly Social Security check among all retirees is $1,693.88, according to the agency. Meanwhile, the average check for a 62-year-old retiring this year would be $1,247.40, while the average payment at the full retirement age of 67 would be $1,782.
Over a 20-year retirement, the monthly difference of $534.6 would add up to more than $128,000 in retirement income, not counting any cost-of-living increases. These adjustments increase benefits by a set percentage calculated each year to keep retirement income paced with inflation.
Collecting benefits early isn't always wrong, planners note. Many workers start taking Social Security benefits when they're forced to retire because of corporate downsizing, age discrimination in hiring, illness or the need to care for a sick family member.
The Break-Even Point
Waiting to collect a higher benefit check later means the recipient is foregoing some cash flow. The "break-even" point – where the total benefits collected at full retirement are more than all the cash that could have been collected by starting early – usually comes somewhere around age 80, financial planners say.
Using this year's average benefit amounts, someone who starts collecting benefits at 62 would collect a total of more than $254,000 over 17 years before they would have collected slightly more by waiting to claim the higher full-retirement benefit. By the year 2040, the higher benefit amount for waiting would produce slightly more than $2,000 in additional total cash (unadjusted for inflation).
Tax Considerations
Social Security benefits themselves aren't taxable, but a downside of receiving Social Security payments early is that many of the beneficiaries will continue to work, which can make some or even much of their benefits taxable. In fact, that tax can apply to anyone collecting benefits who receives additional income.
A single tax filer receiving Social Security payments who makes more than $25,000 of what the IRS calls "combined income" will be taxed on 50% of his or her benefits, up to a limit of $34,000 in income. At that point, the tax apply to 85% of their benefits. The limits for joint tax filers are $32,000 and $44,000, respectively. Combined income is a taxpayer's adjusted gross income, plus nontaxable interest income from bonds and half of their Social Security benefits.
Bottom line
The number of workers claiming Social Security early in their 60s is increasing, which may be due to a multitude of reasons. Everyone's retirement path is different, so it's important to calculate your needs and apply your Social Security accordingly. And if you continue to work while receiving benefits remember to estimate your tax penalty.
Tips on Retirement Planning
Deciding when to claim Social Security is only one part of retirement planning. A financial advisor can help you see and understand all the variables that go into a retirement plan. If you don't have a financial advisor yet, finding one doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
Use our no-cost retirement calculator to get a quick estimate of what your net worth will be when you retire.
Photo credit: ©iStock.com/JJ Gouin, ©iStock.com/Charday Penn, ©iStock.com/PixelsEffect
The post More Workers Plan to Retire on Less Money by Claiming Social Security Early appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
Metro Brands Shares Jump Over 8% On Foot Locker Partnership
Under the partnership, Metro Brands will operate the New York-based sports shoe retailer's stores in India.
Metro Brands Ltd.'s shares surged over 8% to hit an all-time high on Thursday after it signed a long-term trademark licensing agreement with Foot Locker Inc.
Under the partnership, Metro Brands will operate the New York-based sports shoe retailer's stores in India, as per a press release.
Nykaa Fashion will be the exclusive e-commerce partner, and will handle Foot Locker's India website. Nykaa will also sell its authorised merchandise on its existing platform.
Shares of the company rose as much as 8.52%, the most since listing on Dec. 12, 2022, before paring gains to trade 3.78% higher at 9:51 a.m. This compares to a 0.1% decline in the NSE Nifty 50.
The stock has risen 56.24% on a year-to-date basis. Total traded volume so far in the day stood at 34 times its 30-day average. The relative strength index was at 67.34.
Of the 18 analysts tracking the company, 11 maintain a 'buy' rating, three recommend a 'hold,' and four suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside 11.0%. | Consumer & Retail |
WASHINGTON -- The IRS is showcasing its new capability to aggressively audit high-income tax dodgers as it makes the case for sustained funding and tries to avert budget cuts sought by Republicans who want to gut the agency.
IRS leaders said they collected $38 million in delinquent taxes from more than 175 high-income taxpayers in the past few months.
In one case, an individual had used money owed to the government to buy a Maserati and a Bentley, and roughly 100 high-income people tried to get favorable tax treatment through Puerto Rico without meeting certain tax requirements. Many of those cases are expected to face criminal investigation.
“It just shows you how much money is out there in delinquent taxes, and there are so many more cases for us to tackle," said new IRS Commissioner Daniel Werfel, just four months into the job. “There’s just a significant opportunity there.”
No comparable figures exist for how those high-dollar tax collections compared with previous years, said Jodie Reynolds, speaking for the agency. Rather, the new data reflect an initiative that started after the agency received a new funding stream through the Inflation Reduction Act passed in August by Democrats.
The new data collection “is an example of work we expect to continue to focus on with IRA funding,” she said.
Werfel, in a call with reporters on Thursday, also cited the federal tax collector's enhanced ability to identify tax delinquents from resources provided by the Inflation Reduction Act.
The agency was in line for an $80 billion infusion under the law but that money is vulnerable to potential cutbacks.
House Republicans built a $1.4 billion reduction to the IRS into the debt ceiling and budget cuts package passed by Congress this summer. The White House said the debt deal also has a separate agreement to take $20 billion from the IRS over the next two years and divert that money to other non-defense programs.
Now, the agency is trying to show the value of the Inflation Reduction Act funding for taxpayers as appropriations season closes in, and to show the impact of its efforts to do more to audit high-income taxpayers. Last summer Treasury Secretary Janet Yellen gave the IRS leadership instructions not to increase audit rates on people making less than $400,000 a year annually, and to focus on high-income taxpayers.
A team of academic economists and IRS researchers in 2021 found that the top 1% of U.S. income earners fail to report more than 20% of their earnings to the IRS.
The IRS said its workers answered 3 million more phone calls than in the last filing season, cut wait times to 3 minutes from 28 and cleared the backlog of unprocessed 2022 tax returns that had no errors. It is opening new taxpayer assistance centers and holding events to help people who live far from the agency's in-person offices.
“The mixed results here of some taxpayers, still frustrated, and some taxpayers seeing dramatic improvements tells us we have more work to do,” Werfel said.
The IRS’s enforcement staff has shrunk by about one-third since 2010 and has been operating with outdated technology that the agency said it is gradually automating.
In April, the agency released a report outlining how it would spend the money allotted through the Inflation Reduction Act, such as bringing more paper-based systems online and answering taxpayers’ phone calls promptly.
Other plans are more ambitious, including exploring ways to create a government-operated electronic free-file tax return system, which is currently being piloted.
The idea of providing additional money for the agency has been politically controversial since 2013, when the IRS under the Obama administration was found to scrutinize political groups that applied for tax-exempt status.
A Treasury Department inspector general report found that both conservative and liberal groups were chosen for scrutiny. | Inflation |
- Federal regulators say they lack sufficient assurance over the safety of $2.2 billion of U.S. customer assets nominally under the control of Binance's U.S. subsidiary.
- SEC lawyers filed an emergency motion, and have argued that Binance's main business and its founder Changpeng Zhao exert effective control over billions of dollars of client funds.
- The SEC is asking a federal judge to institute a temporary restraining order that would freeze those assets.
The $2.2 billion of U.S. customer assets held by Binance is at "significant risk" of being stolen by founder Changpeng Zhao unless a freezing order is in put place, federal regulators said in a filing Tuesday night, after the crypto regulator was charged by the Securities and Exchange Commission.
Lawyers from the SEC filed an emergency motion earlier, citing a risk of capital flight and asking a judge to repatriate and freeze U.S. customer assets to prevent illicit transfers by Zhao or Binance entities. The SEC sued Binance and Zhao on Monday, alleging they engaged in the unregistered offer and sale of securities and commingled investor funds with their own.
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The latest filing described Zhao as a "foreign national who has made overt his views that he is not subject to the jurisdiction of this Court." SEC lawyers alleged that two Binance U.S. subsidiaries — BAM Trading and BAM Management — were controlled by Zhao and had already garnered "illicit gains" of at least $420.4 million in profits and venture fundraising.
Years of communications between the SEC and Binance, which claims no official headquarters, suggest that Binance.US couldn't clearly indicate who controlled customer assets, according to the filing.
"Zhao and Binance have had free reign," the SEC alleged, over "customer assets worth billions of dollars."
Zhao's attorneys say the billionaire is not subject to U.S. law, despite his control over or beneficial ownership of U.S. companies and bank accounts that sent billions of dollars to Swiss and British Virgin Islands-based holding companies, the SEC said.
The SEC says federal law and precedent establish the court's jurisdiction over Zhao and Binance.
"There is no doubt that the Court has personal jurisdiction over all Defendants," the SEC said.
While Binance's U.S. arm has said it maintains control over much of its technology and financial infrastructure, the SEC says Zhao's ultimate control puts investor assets at risk unless action is taken immediately.
"Given the history of Zhao's and Binance's open desire to avoid U.S. regulation and oversight, and their surreptitious control over BAM Trading and commingling of and movements of BAM Trading assets through a web of Zhao-controlled entities outside of the United States, there can be no assurance that BAM Trading employees are not influenced by Zhao or Binance today," the filing said.
Federal regulators are also requesting the court allow them to serve Zhao by emailing his lawyers, saying his "pattern of geographical elusiveness" makes it difficult to identify his exact residence or whereabouts. Zhao is reportedly a resident of the UAE.
Binance did not immediately responded to a request for comment. | Crypto Trading & Speculation |
(Bloomberg) -- The coders who maintain Bitcoin’s blockchain are clashing over whether to stamp out the meme tokens swarming the network.
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A torrent of speculative coins led to a record number of transactions and an 11-fold spike in processing fees on the blockchain in May, creating a logjam and forcing the Binance exchange to temporarily halt Bitcoin withdrawals.
The tumult has since eased, but some crypto purists fret that future frenzied trading of memecoins like the frog-themed Pepe will again snarl the network and disrupt Bitcoin’s use for payments and as a store of value. They advocate deploying software to block the transactions — a kind of spam filter.
“I do think the system is being abused,” said Bitcoin developer Ali Sherief. “Bitcoin was never intended to serve as a base layer for meme tokens.”
In an earlier email to the largest digital asset’s developer group, Sherief wrote that “worthless tokens threaten the smooth and normal use of the Bitcoin network as a peer-to-peer digital currency.”
Others defend the software innovation, called Ordinals, that allows Bitcoin’s blockchain to host large numbers of memecoins and nonfungible tokens — digital collectibles — for the first time, arguing it can have wider applications.
Developer Casey Rodarmor created Ordinals to enable users to inscribe digital content like videos, images and text on satoshis, the smallest unit of Bitcoin. There are 100 million satoshis in one Bitcoin.
Rodarmor’s innovation took off this year and was seized on by pseudonymous blockchain analyst Domo to develop the Bitcoin Request for Comment — or BRC-20 — standard, which led to the explosion of memecoins.
There are now about 25,000 meme tokens on the Bitcoin blockchain with a market value of roughly $475 million, according to website brc-20.io. The figure had soared past $1 billion in early May.
Jameson Lopp, co-founder of crypto storage solutions provider Casa, said the Bitcoin network is meant to be an “auction market for the block space” — the place where data is stored — and Ordinals merely stoked demand for it.
As a result, viewing the memecoins as a denial-of-service attack is “like saying any form of auction is a denial of service, and whoever wins is denying all of the losers of the auction,” Lopp said.
At one point last month meme tokens and NFTs accounted for 65% of the transactions on the Bitcoin blockchain. The proportion has dropped back but remains elevated. The average fee per transaction began April at $2.80, hit $30 in early May and cooled to $4 by the end of the month, Coinmetrics data show.
The jump in fees has been a boon for miners, the operators of the computer rigs underpinning Bitcoin, who have raked in $45 million from Ordinals-related activity, according to figures from Dune Analytics.
Read more: Memecoin Mania, NFTs Bring ‘Seismic Shift’ for Bitcoin Mining
Bitcoin itself fell almost 8% in May amid the turbulence on its blockchain. The token, which has rebounded more than 60% in 2023, was little changed at $27,160 as of 7:41 a.m. in Singapore on Monday.
For veteran Bitcoin developer Luke Dashjr, Ordinals transactions are like spam and should be kept off Bitcoin’s blockchain. He’s even created a program, Ordisrespector, to enable computer nodes on the network to do that.
“Action should have been taken months ago,” Dashjr wrote in a developer group. “Spam filtration has been a standard part of Bitcoin Core since day 1.”
Given that no single person or entity controls the Bitcoin network, nobody knows if sustained action against memecoins and NFTs will emerge over time. Another possibility is that some people could decide to create a version of Bitcoin — called a hard fork — that won’t support Ordinals.
“I don’t see a critical mass of people coming together on a single alternative to Bitcoin which is incompatible with BRC-20 tokens,” said Andrew Poelstra, director of research at Blockstream.
Amid the controversy, the key takeaways from the Ordinals phenomenon include the ability to use the Bitcoin network in novel ways and the need to scale up its transaction capacity to avoid future traffic jams.
The true value of Ordinals is the capacity to store arbitrary data on the Bitcoin network, according to Sami Kassab, a research analyst at Messari.
“Whether it’s artists, activists or even governments that end up leveraging this storage space, it’s clear that the demand and cost for it will likely rise in the future,” Kassab said.
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©2023 Bloomberg L.P. | Crypto Trading & Speculation |
A Romanian jobseeker has accused British firms of 'name discrimination' after claiming she was only offered interviews after she sent out a fake 'English' name on her CV.
Georgiana Popescu moved to Leeds, West Yorkshire, in 2015 to complete her undergraduate and master's degrees before starting her job search.
The 26 year-old claims she applied for more than 100 jobs but only secured roles in warehouses and retail - while her British course mates went into jobs related to their degree.
Georgiana then decided to apply for 40 roles using two identical CVs and applications while changing her name to the 'traditionally British' Sarah C.
She claims she 'wasn't surprised' to hear back from 11 companies offering her interviews as 'Sarah', while her identical applications with the name Georgiana Popescu were seemingly tossed aside.
Georgiana says she doubts her applications under her Eastern European name were read at all.
After years of warehouse and retail work, she was delighted to finally land a job as a fraud analyst in March last year.
She said she feels confident enough to speak out about her 'heart-breaking' experience three years on as she feared people's reaction would telling her to 'go back to her own country'.
Georgiana, originally from Bucharest, Romania, but still living in Leeds, said: 'It's a serious issue.
'I submitted the exact same CVs but with different names. I got 11 replies for Sarah and none for Georgiana.
'I got the feeling that it didn't matter what I was doing, but that it would never be good enough because of my name.
'I have no words to describe how it felt. It affected my mental health so, so badly.
'I kept the story to myself for years because I was scared I'd get hate comments such as "go back to your country" or "you are here to claim benefits"... I didn't get any benefits and I wasn't even eligible for a maintenance loan.
'It's a huge issue. It really made me realise the issue was my name rather than my application and skills.
'Clearly they didn't even look at my application because surely they would have noticed it was the same CV.'
She added: 'Before moving here, I was an intern at a local newspaper. After moving to the UK I didn't get any job offers other than warehouses for years. If you look at the statistics, they are Eastern European specific jobs.
'At the time, I wasn't too stressed because I'd just moved here and didn't know the language very well.
'I was still a student. I did some volunteering for a year and warehousing jobs, then after applying to a 100 other jobs I managed to get a job as a sales assistant. It was a retail job.
'I cried that day. I was so happy because I could finally get out of warehouses.
'After I got my degree with an upper second class, I applied for 100 jobs again, most of them criminology-related but also customer services such as banks, call centres and data entry.
'I remember looking and seeing English criminology graduates getting jobs while I didn't get an interview. That's the moment I realised my name could be the issue.' | Workforce / Labor |
Some Britons don't want to "get out of the house and work the necessary hours" after the Covid pandemic, ex-Tory leader Lord Hague said on Tuesday.
The peer also believes that some people in the UK are not working because they are obese.
He was asked why jobs were not being filled by workers already in the UK, given that there are around a million vacancies, with hospitality chiefs stressing that they are struggling to recruit staff after the Covid pandemic and the furlough scheme.
Asked about how the domestic workforce could be energised, Lord Hague told Times Radio: “Public health is a large part of this...you have heard me go on and on in the past about obesity and things like that which do ultimately affect the productivity of the workforce, the ability of people to go to work...and be relatively free of illnesses.
He highlighted the view that the “generosity of furlough...seems to have affected some people’s attitude to work and how many hours that they want to work”.
He added: “We seem to have a slightly less motivated workforce in terms of getting out of the house and working the necessary hours than we had pre-2020.
“It is really important to put that right otherwise there will be huge migration needed permanently for the future.”
Lord Hague backed the Government’s clampdown on immigration as “perfectly sensible” measures.
* Hiking the skilled worker earnings threshold by a third to £38,700, in line with the median full-time wage.
* Scrapping “cut-price” labour by stopping shortage occupations being able to pay 20 per cent less than the going rate and reforming the shortage occupation list.
* Ensuring the Migration Advisory Committee reviews the graduate immigration route to prevent abuse.
Professor Brian Bell, chair of the Migration Advisory Committee, said some industries could struggle with recruitment because of the Government’s new visa rules.
He said: “It looks like most of the sort of jobs in the £20,000 to £30,000 brackets, most of them won’t be eligible because even if they get a discount it won’t be enough to let them recruit.
“I think we’re going to see quite a lot of what you might describe as middle-skilled jobs, where there is a reasonable amount of training required but not graduate level jobs, there are the ones that are going to struggle.
“So, your butchers, your carpenters, your welders, those kind of jobs.”
While the changes would not affect the NHS, he believes it is likely there will be fewer social care workers coming from overseas.
“The big puzzle that I’m left with is what the Government’s long-term strategy for social care,” he added.
While the changes may deal with immigration, he said ministers needed to do more on “pay and terms and conditions” in social care otherwise they would not tackle the “fundamental problems” in this sector.
Immigration minister Robert Jenrick said: “We don’t think asking care workers not to bring dependents to the UK will have a material impact.
“What we think will happen is it will lead to a reduction of about 20 per cent in the number of foreign care workers coming into the UK.
“We hope those places can be filled by British workers and the Department for Health has a plan to do that, a ten-year workforce plan for social care backed by £2 billion of investment .”
However, he refused to commit to publishing the Home Office’s own impact assessment on changes announced on Monday. | Workforce / Labor |
Income Tax Return Filing Rose 6.18% In FY23, Says Nirmala Sitharaman
Maharashtra had the highest number of tax return filers, owing to the size of the tax base in the state.
The number of people filing income tax returns rose by 6.18% in FY23 as compared with FY22, said Union Finance Minister Nirmala Sitharaman.
The total number of people who filed tax returns as of FY23 stands at 7.4 crore, she said in response to a question posed during the ongoing monsoon session of Parliament.
Of this, 5.1 crore incurred zero tax liability, indicating that the taxpayer is below the taxable income threshold in a particular financial year. This effectively brings the total number of people who contributed to government tax revenue to 2.2 crore.
The Finance Minister also provided data on the number of tax filers from each state since FY20.
Under the new tax regime, the taxable income threshold begins at Rs 3 lakh per annum. However, in a move to incentivise the salaried class to switch to the new tax regime, the Union Budget 2023 announced a tax rebate for those with an annual income of up to Rs 7 lakh.
Maharashtra had the highest number of tax return filers, owing to the size of the tax base in the state.
Of the 7.4 crore tax filers, 1.13 crore belonged to the state in FY23. It was followed by Gujarat with 74,000 odd tax return filers and Uttar Pradesh with 71,000 filers.
The department has taken various measures to increase the number of taxpayers, such as the expansion of the scope of Tax Deducted at Source and Tax Collected at Source, the simplification of personal income tax, pre-filed IT returns, allowing updated returns, the new Form 26AS that serves as an annual information statement with details on deductibles, and non-filer monitoring systems, among others.
"The government has undertaken several measures, such as setting up taxpayers’ lounges at various events, trade fairs, and exhibitions to raise tax awareness among the general public and school-going children," Sitharaman said.
Publicity campaigns are also run through SMS, emails, YouTube, and the Twitter handle of the department, urging taxpayers to file their returns on time. | India Business & Economics |
The Roth IRA is a favorite among personal finance experts as a top choice for retirement savings. But a Roth 401(k) could be an even better option for many people.
If your employer offers a Roth 401(k) option and you've been ignoring it, you may be missing out on some big advantages over a Roth IRA. A Roth 401(k) could be the exact thing you need to increase your savings while providing more financial flexibility.
Here are three reasons to stop investing in a Roth IRA and use the Roth 401(k) instead.
1. The employer match
If you prioritize a Roth IRA over saving in your company's 401(k), you'll forego any matching contribution your employer makes. That's like leaving free money on the table.
Employers are able to offer up to 25% of your compensation as a matching contribution. Most stick to between 3% and 6%, but it's not too uncommon to see employers contribute up to 10% of your salary. The catch is you usually have to contribute to the 401(k) plan yourself to get that matching contribution.
Employer matches are typically put into a pre-tax account, but most plans now allow for matching contributions in a Roth account following the passage of the SECURE 2.0 Act. If you value the characteristics of a Roth account, it's worth talking to your HR department about implementing Roth accounts for employer contributions to your 401(k).
2. The 401(k) loan option
A Roth IRA allows penalty-free and tax-free access to your contributions at any time, but a Roth 401(k) can give you access to up to half of your account, including the growth.
The 401(k) loan option allows you to withdraw 50% of your account balance up to $50,000 as a loan to yourself. If you need cash temporarily, using a 401(k) loan is a much better option than withdrawing funds from a Roth IRA.
The biggest benefit is that you're able to put the money back into your retirement savings. You have up to five years to pay back your 401(k) loan. If you withdraw your contributions from a Roth IRA, you're unable to put that money back beyond the annual contribution limits.
However, there's a catch to the Roth 401(k) loan: You have to repay it. You accrue interest (owed to yourself), and stiff penalties can come into play if you don't pay back the loan in time.
While you want to avoid withdrawing from your retirement savings if at all possible, sometimes you may need the additional cash. In those cases, a 401(k) loan is a much better option for most people.
3. Simplicity
One of the beautiful things about a Roth 401(k) is that it's extremely simple once you set it up.
It's funded straight from your paycheck, so you never see the money hit your bank account. Automatic payroll deductions make it much easier to stick with a savings plan than manually transferring the money from your checking account to an IRA every pay period. (Some employers may allow you to set up auto-IRA contributions from your paycheck, simulating this benefit.)
401(k)s typically have fewer investment options than an IRA, and while this may be seen as a drawback for some, it can actually be beneficial for many. Fewer choices means less tinkering with investment strategies. The best way to invest in a 401(k) is to continuously buy shares of low-cost index funds offered by the plan. There's no need to overthink it, and in this case, there's usually no option to overthink it either.
Making the switch
If you're currently ignoring the Roth 401(k) option, you should consider making the switch from a Roth IRA to a Roth 401(k).
That said, there is one drawback to investing in a 401(k) you should consider first: the fees. If your 401(k) plan has high fees, you may want to limit your contributions. Be sure you're still getting your employer match, but you may not have a need to contribute beyond that.
A Roth 401(k) is great but often overlooked option for investors committed to using Roth accounts for their retirement savings. | Personal Finance & Financial Education |
Muthoot Finance Shares Tumble Over 7% After Q2 Profit Misses Estimates
The lender's Q2 standalone net profit rose 14.3% year-on-year to Rs 991 crore, missing Bloomberg estimate of Rs 1,057.8 crore.
Shares of Muthoot Finance Ltd. fell over 7% on Friday after its second-quarter profit rose but missed analysts' estimates.
The lender's standalone net profit rose 14.3% year-on-year to Rs 991 crore in the quarter ended September, according to an exchange filing. Analysts polled by Bloomberg had estimated a standalone net profit of Rs 1,057.8 crore.
Sequentially, it rose 2%. The company's total income stood at Rs 3,074 crore, up 23% year-on-year.
The loan assets under management were up 21% year-on-year to Rs 69,002 crore.
Muthoot Finance Q2 FY24 (Standalone)
Total income up 22.8% at Rs 3,073.6 crore. (YoY).
Net profit up 14.3% at Rs 990.9 crore. (YoY) (Bloomberg estimate: Rs 1,057.8 crore).
Stage 3 gross loan assets at 4.01% vs 4.26% (QoQ).
Stage 3 net loan assets at 3.59% vs 3.82% (QoQ).
Shares of the company fell as much as 7.41% to Rs 1,216 apiece, the lowest level since Oct. 10. It pared losses to trade 5.88% lower at Rs 1,236 apiece, as of 9:48 a.m. This compares to a 0.22% decline in the NSE Nifty 50 Index.
It has risen 16.35% on a year-to-date basis. Total traded volume so far in the day stood at 21 times its 30-day average. The relative strength index was at 40.
Out of the 24 analysts tracking the company, 15 maintain a 'buy' rating, five recommend a 'hold,' and four suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 14.6%. | Banking & Finance |
Image caption, Sharon Hearn and her cat Toby often try to keep warm togetherA disabled woman who cannot afford to heat her home for more than two hours a day said she puts her cat down her jumper to keep warm.Sharon Hearn has been told she can no longer claim winter fuel bill discount despite the cold limiting her mobility.She said even during December's cold spell her home was only heated to 10-12C (50-54F).The UK government said Warm Home Discount changes prioritise those most likely to struggle to heat their homes.Households are eligible if they are either on pension credit guarantee, a means-tested benefit or on tax credits with an income below a certain threshold. Charity Scope estimates about 300,000 disabled people in Wales and England will not be eligible because of the changes. Ms Hearn, 50, from Newtown, Powys, is registered disabled and is a part-time wheelchair user due to spinal cord damage, rheumatoid arthritis and a brain injury. "People in my condition do feel the cold a lot more," she said. "Sitting in these conditions is making my arthritis worse and making my joints worse, and making my mobility worse. "At night and during the day, normally I have three to four blankets on. "I normally have two jumpers on, two socks on and I'm very lucky to have a cat. Because he's cold I put him down my jumper and we sort of warm each other up." Image caption, Sharon Hearn has been left wondering how she will afford to pay for her electricityHer council house has an air source heat pump which takes warmth from the air outside to heat the home inside, but costs £8 per day to run."Two hours, that's all I can afford," Ms Hearn said. "I tend to get to hypothermic stage, end of November beginning of December. "I will then be forced to put it on two hours a day, and even by March or April, I'm having bills of five, six, seven hundred pounds. "If that's the case, if I have it on 24 hours a day, then how much is that going to equate to?" Ms Hearn said she was told by the Warm Home Discount (WDH) helpline she was no longer eligible because her bungalow has a D-rating on its energy performance certificate. But the UK government's Department for Business, Energy and Industrial Strategy disputed this, saying the WHD is not "awarded according to the energy efficiency of the property but on people's financial circumstances".A spokesman added: "We are prioritising households most in need this winter, with over three million homes across Great Britain receiving as additional £150 energy bill discount through the Warm Home Discount. "This will mean an extra 780,000 pensioners and low-income families will benefit this year compared to last." Alex Osborne, from Disability Wales, said the WHD "was just a little bit of breathing space for disabled people". "Not having the heating on 24/7 in their homes can make them really very ill," she added. "So they're having to either take the risk they're going to get seriously ill by turning it off, or have it on and wonder how they're going to be able to afford the bills." | Inflation |
Treasury Bond Bears Look Ready To Hibernate
The sharp drop in 10-year government bond yields points to a possible shift in sentiment after an abysmal three months.
(Bloomberg Opinion) -- Sometimes Mr. Market just wakes up on the right side of the bed.
Yields on 10-year Treasury notes plummeted 20 basis points on Wednesday, the most since the banking crisis in March. For all the macroeconomic news of the day, it was hard to pinpoint what changed so meaningfully from one trading session to the next. But the rally suggested that we may be seeing a meaningful shift in sentiment after an abysmal three months, with the potential for it to fuel a virtuous cycle.
Consider the developments:
- 8:30 a.m. EST: The Treasury said it was selling $112 billion of longer-term securities at auctions next week; firms surveyed by Bloomberg had expected $114 billion. Bond yields fell about 7 basis points intraday on easing supply concerns, and were down about 10 basis points from the previous close.
- 10 a.m.: A slew of economic data gave credence to the view that the economy could be slowing (a “good thing” if you want lower interest rates.) Among them, the Institute for Supply Management’s manufacturing gauge posted its biggest monthly decrease in more than a year and trailed all economist estimates. Bond yields fell another 3 basis points.
- 2 p.m.: The Federal Reserve held policy rates steady at 5.25%-5.5%, as was widely expected, and Chair Jerome Powell came off as modestly less hawkish than some investors anticipated — all while keeping his options open for further rate increases and an extended period of elevated rates. Bond yields fell about 7 basis points more.
If I had to pinpoint a single catalyst, I’d say the Treasury announcement got the market off on the right foot. Three months back, a worse-than-anticipated refunding announcement helped set in motion the August-October selloff. This time, markets took solace in the more-modest-than-expected increase in bond supply. But a few billion here or there is of little significance to the massive Treasury market, and none of the other developments were game changers either. Instead, with yields at 4.93% on Tuesday, the market had been effectively braced for more terrible news — and mediocre news was good enough to set off a riotous celebration.
Remember how we got here in the first place. From the end of July through Tuesday, 10-year bond yields surged 97 basis points for equally ambiguous reasons. Investors have blamed factors including the ballooning deficit, increasingly hawkish monetary policy expectations and retreating foreign demand for US debt.
But the math never quite added up. The US budget problems didn’t materialize yesterday (and couldn’t explain such a large bond move in any case); monetary policy expectations haven’t shifted much in the space of three months; and foreign demand dynamics are as slow-moving as a tanker. The real problem — at least as I see it — was the violent collision of Bond yields temporarily reflected an “everything is going wrong at once” premium.
Academic studies of deficits and interest rates across countries have found that each percentage point increase in the deficit-to-GDP ratio tends to push yields higher by about 30-60 basis points, according to a survey of the literature by Emanuele Baldacci and Manmohan S. Kumar in their International Monetary Fund working paper. Based on that, the fiscal 2023 increase in the budget deficit to 6.3% from 5.4% would explain only part of the July-October selloff, even if you assumed the shortfall was relatively long-lasting.
Meanwhile, investors have been seriously considering the possibility that Fed policymakers may keep rates elevated well into the future. In the Federal Reserve Bank of New York’s September Survey of Primary Dealers, the median respondent expected rates to average 3% over a 10-year period, up from about 2.83% at the end of 2022 — a change of about 17 basis points in 2023. Combine that with the shifting fiscal concerns and it still wouldn’t fully account for the rout.
A lot of it, evidently, was driven by the sense of panic that comes when everything seems to be going wrong at once: Concern about the Treasury's refunding plans, coupled with a Fitch Ratings downgrade to the US in early August, aggravated by famous investors — notably, Bill Ackman — publicly stoking the selloff.In normal times, US bond investors exhibit a special ability to completely ignore gaping budget deficits. They only start to pay attention when sentiment is already grim — at which time deficits are like gasoline on the fire. The closest historical parallel I can identify is the early part of the Reagan Administration, when inflation and interest rates were still high and Reagan’s spending and tax cuts seemed to arrive at just the wrong time.
Eventually, the pendulum tends to swing back in the other direction, though. And there’s good reason to believe we’re at that point now on the fiscal front. Here’s how Morgan Stanley analysts including Ariana Salvatore and Michael Zezas summarized the outlook in their recent report, “Figuring Out Fiscal Policy” (emphasis mine):
Fiscal expansion is often cited as a reason for positive US growth surprises & government bond yield increases in 2023. Yet, we assess that expansion has peaked, at least until after the 2024 election. Hence, investors focused on upside catalysts for growth & yields should look elsewhere... Recent drivers of the nearly 1% of GDP growth in the federal deficit, most notably deferred tax revenues and the ramp in spending from key bills, will soon be in the rearview. Further, barring a recession that incentivizes a Congressional response, we think legislative action that expands deficits is unlikely until at least after the 2024 election.
I don’t want to come off as a deficit apologist, and I hope that the recent bond selloff triggers some serious soul-searching among politicians in Washington. But I now doubt that the current deficit narrative will continue to punish this bond market any more than it already has. So much negativity has already been priced in over the past several months, and now there’s even a chance for some near-term deficit relief. At the same time, Fed policymakers appear to be sending some modestly encouraging signs about interest rates, with Chair Powell hinting that bond yields may be doing some of his work for him. With all of that, the panic premium is likely to keep fading. That’s why there may be reason to trust the hard-to-explain bond rally that took hold on Wednesday. If we’re lucky, it could even have more room to run.
More From Bloomberg Opinion:
- Ackman Wins Even If Treasury Rout Keeps Going: Jonathan Levin
- Are Stocks a Better Buy or Bonds With 5% Treasuries: Aaron Brown
- The Fed Pivot Turbulent Treasuries Need: Mohamed A. El-Erian
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Jonathan Levin is a columnist focused on US markets and economics. Previously, he worked as a Bloomberg journalist in the US, Brazil and Mexico. He is a CFA charterholder.
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
The maker of Pyrex glassware and Instant Pot has filed for Chapter 11 bankruptcy protection as the company that was already struggling is stung by inflation, with Americans pulling back on spending.
According to a filing with the U.S. Bankruptcy Court for the Southern District of Texas this week, Instant Brands, based outside of Chicago, has more than $500 million in both assets and liabilities.
Inflation has buffeted consumers after a pandemic-fueled binge on goods for the home, but spending has also moved elsewhere as people are again able to travel, or go to restaurants and shows.
And Instant Pots, which became a must-have gadget several years ago, have been disappearing from kitchens.
Sales of "electronic multicooker devices," most of which are Instant Pots, reached $758 million in 2020, the start of the pandemic. Sales had plunged 50% by last year, to $344 million.
Dollar and unit sales have declined 20% from last year in the period ending in April, according to the market research company NPD Group.
Just last week, S&P Global downgraded the company's rating due to lower consumer spending on discretionary categories and warned that ratings could fall again if Instant Brands seeks bankruptcy protection.
"Net sales decreased 21.9% in the first quarter of fiscal 2023, relative to the same period last year," S&P analysts wrote. "This marked the seventh consecutive quarter of year-over-year sales contraction. Instant Brands' performance continues to suffer from depressed consumer demand due to lower discretionary spending on home products."
U.S. manufacturers have also been hit, like consumers, by elevated inflation and higher interest rates.
Ben Gadbois, CEO and president of Instant Brands, said the company managed its way through the COVID-19 pandemic and global supply chain issues, but has run short of cash.
"Tightening of credit terms and higher interest rates impacted our liquidity levels and made our capital structure unsustainable," Gadbois said in a prepared statement Monday.
Instant Brands, whose brands also include Corelle, Snapware, CorningWare, Visions and Chicago Cutlery, said it has received a commitment for $132.5 million in new debtor-in-possession financing from its existing lenders.
The company was acquired four years ago by the private-equity firm Cornell Capital and it was merged with another kitchenware company, Corelle Brands.
Instant Brands' entities located outside the U.S. and Canada are not included in the Chapter 11 filings. | Inflation |
Prime Minister "economically illiterate" if key net zero commitments rolled back
The leaked news that Rishi Sunak is planning to row back on green policy pledges this week by weakening net zero commitments has caused widespread outrage across the political spectrum.
Green Party MP Caroline Lucas hit back by accusing the Prime Minister of being, “economically illiterate, historically inaccurate and environmentally bone-headed.”
Lucas said the ‘absurd rollback’ will result in higher energy bills, colder homes, few jobs, more air pollution and climate chaos, before she stated, “Game, set and match to the climate dinosaurs?”.
Speaking on BBC News last night, Lucas laid into Sunak, summing up her disbelief before going on to explain what delaying energy efficiency measures will mean for bills and emissions.
“People are paying more than they need to in order to heat their homes right now because we are locked into more and more fossil fuels,” said Lucas.
“There were going to be standards that would mean homes would be more efficient. By scrapping those what Rishi Sunak is going to do is consigning yet more people to paying far more for their energy bills.
“When it comes to investment in the green economy he’s now going to make so many businesses extremely angry and confused because he’s changing the goal post when it comes to green investment.
“We know investment in the green economy is good for jobs, it’s good for our environment and the economy. So basically, he seems to be doing this simply to draw some dividing lines with Labour.”
Businesses in the auto industry have already expressed their concerns, with Ford and BMW saying they ‘need more certainty and consistency’ from the government. Whilst Tory MPs have condemned the move, with Lord Zac Goldsmith accusing the UK of turning “its back on future generations”.
Ed Miliband has declared the plans, “a complete farce from a Tory government that literally does not know what they are doing day to day”.
“13 years of failed energy policy has led to an energy bills crisis, weakened our energy security, lost jobs, and failed on the climate crisis,” wrote Miliband.
According to reports the possible changes include; delaying a ban on new petrol and diesel car sales, delaying a ban on off-grid oil boilers to 2035, no new taxes to discourage flying, no policies encouraging carpooling and phasing out 80% (no all) new gas boilers by 2035 and ruling out “seven bin” recycling schemes.
The campaign organisation GreenPeace said that Sunak was ‘taking the public for fools’.
“He claims he’s helping ordinary people by playing politics with the climate, but we know the real winners will be big corporations like the oil and gas lobby,” siad Greenpeace UK’s policy director, Doug Parr.
Hannah Davenport is news reporter at Left Foot Forward, focusing on trade unions and environmental issues
As you’re here, we have something to ask you. What we do here to deliver real news is more important than ever. But there’s a problem: we need readers like you to chip in to help us survive. We deliver progressive, independent media, that challenges the right’s hateful rhetoric. Together we can find the stories that get lost.
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Many Pointers For Rising Health Claim Costs Underline Strong Likelihood Of Price Hikes: ICICI Securities
Portability implies many nuances to health insurance business
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Rising health claims has been a dominant trend in health insurance, as is evident from loss ratios for most players in H1 FY24. Hospital indicators also corroborate similar trends with rising revenue per bed and high average hospital occupancy rates.
This is against the backdrop of continuous reports of high medical inflation. As such, further price hikes by insurers is a distinct possibility. However, rising portability is likely to further put pressure on claim ratios and as such will test the underwriting discipline of insurers.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Inflation |
International study suggests female corporate leaders make firms less likely to greenwash
Companies with a gender diverse board of directors tend to be more open and honest with their environmental, social and governance (ESG) performance, according to new research.
A team from the University of Portsmouth, Brunel University and Loughborough University, observed 3,902 firms from 29 countries over a fourteen-year period.
They looked at ESG decoupling data, which is the term used to describe the gap between what firms disclose about their ESG practices, and what their performance actually is.
The study found companies with more female corporate leaders were less likely to exaggerate how positive their environmental impact is; a process known as greenwashing. This relationship is also more noticeable in firms operating in controversial industry sectors.
Dr. Ahmed Aboud, from the University of Portsmouth's School of Accounting, Economics and Finance, said, "ESG decoupling is a major issue in the current corporate landscape, with many firms misrepresenting their actual ESG performance in their disclosures.
"Our study supports existing theories that women directors are crucial players in preventing this, as they are more likely to speak out against unethical behavior, and support environmentally conscious decisions."
The team also examined the role of religiosity in ESG decoupling. They found the impact of board gender diversity on ESG decoupling is stronger for firms located in countries with a low level of religious beliefs.
"This finding is consistent with other studies which suggest religious differences among countries can influence corporate decisions," explained Dr. Yasser Eliwa from the School of Business and Economics at Loughborough University.
"Countries with higher levels of religiosity tend to adopt views supporting traditional gender roles between men and women, and as a result see female directors being less influential in their roles."
Over the past decade, regulators began measuring and monitoring corporations not just on traditional economic metrics, but also by their environmental impact, commitment to social issues and the soundness of their corporate governance.
However the paper, published in Business Strategy and the Environment, says ESG laws and regulations need to do more to tackle greenwashing for them to make a considerable difference.
While 21% of the firms observed in the study are from countries that have a mandatory board gender diversity law issued, the remaining 79% are from countries with no female directors' quotas.
Dr. Ahmed Saleh, from Brunel Business School at Brunel University, added, "These findings have important implications for policymakers, investors, and other stakeholders interested in promoting responsible and sustainable corporate behavior.
"They provide additional insights to the importance of improving gender diversity on boards and may motivate decision-makers to mandate board gender diversity quotas."
The paper recommends further research to examine the impact of "hard law" and "soft law"; quotas on the relationship between board gender diversity and ESG decoupling, as these vary from country to country. It also suggests exploring other attributes of board diversity, including age, ethnicity, nationality, financial and industry expertise.
More information: Yasser Eliwa et al, Board gender diversity and ESG decoupling: Does religiosity matter?, Business Strategy and the Environment (2023). DOI: 10.1002/bse.3353
Provided by University of Portsmouth | Consumer & Retail |
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
UK households who relying on supermarket value ranges are being hit the hardest by the cost of living squeeze, after grocers hiked their prices sharply.
New research from Which? released this morning found that the price of value items that make up the supermarkets’ most basic ranges has risen by 21.6% since January 2022 – or twice the current rate of consumer price inflation.
Standard own-brand food prices were up by 18.9%.
Overall inflation across supermarket shelves was 15.9% in the year to January, Which?says, with pricier goods rising by less that typically cheaper ones. Branded groceries were up 13.2% year on year, while premium ranges went up by 13.4%.
The cost of everyday staple items had surged over 12 months, Which reports:
Among the most alarming items soaring in price include muesli, which went from £1.20 to £2.25 at Sainsbury’s (up 87.5%), tins of sliced carrots went from 20p to 33p (up 63%) at Tesco, and pork sausages went from 80p to £1.27 (up 58.2%) at Asda.
The report is the latest evidence that poorer households are being hardest hit by the squeeze on budgets. Charities warned this week that one in four households regularly run out of money for essentials.
Prices were up 23.6% at Lidl and 22.5% at Aldi on a year ago, compared with 10.4% at Ocado, 13.2% at Sainsbury’s, 13.6% at Tesco, 14.4% at Morrisons, 15.2% at Waitrose and 16.8% at Asda.
However Which? found the discounters were generally still cheaper than their competitors.
Sue Davies, Which? head of food policy, says supermarkets should make more efforts to help shoppers find the best value products on the shelves.
“It’s clear that food costs have soared in recent months, but our inflation tracker shows how households relying on supermarket value ranges are being hit the hardest.
“Supermarkets need to act and Which? is calling for them to ensure everyone has easy access to basic, affordable food ranges at a store near them, particularly in areas where people are most in need.
“Supermarkets must also do more to ensure transparent pricing enables people to easily work out which products offer the best value and target their promotions to support people who are really struggling.”
Food producers have blamed rising energy bills and labour shortages for pushing up their costs, which are being passed onto customers.
As we’ve been covering this week, supermarket shoppers now face shortages of fruit and vegetables, and restrictions on how many items they can buy at many supermarkets.
Yesterday, environment secretary, Thérèse Coffey, has caused a furore after she suggested people should “cherish” seasonal foods such as turnips, if they can’t get hold of tomatoes and lettuce this winter.
With a love of turnips more commonly associated with the long-suffering manservant Baldrick in Blackadder, Coffey handed her critics the kind of material they could normally only dream of.
“Let them eat turnips!” suggested the Labour MP Ben Bradshaw, using the hashtag #TomatoShortages, as “turnips” started to trend on Twitter timelines for possibly the first time.
Coffey made her comments after being called to the Commons to answer an urgent question about supermarket rationing of salad ingredients, owing to shortages caused by bad weather in Spain and north Africa. She had been trying to make a point about eating seasonally.
The turnip tumult has also made two front pages this morning, with the Daily Star offering a ‘cut out and keep’ vegetable.
As well as pitching seasonal veg, Coffey predicted that the current shortages of some fruit and vegetables should be resolved in two to four weeks.
The agenda
7am GMT: German Q4 GDP (second estimate) and consumer confidence report
7.45am GMT: French consumer confidence report
Noon GMT: Mexico’s Q4 GDP report
1.30pm GMT: US PCE survey of consumer inflation
1.30pm GMT: US personal income data for January
3pm GMT: University of Michigan consumer sentiment report | Inflation |
Credit card debt hit $1 trillion for the first time on record, according to new data, a troubling development as interest rates and delinquencies also rise.
That’s the highest level on record and $193.4 billion more than the start of the year and $264 billion above the $736 billion in April 2021, the lowest level since the onset of the pandemic.
The increase in indebtedness comes as interest rates on credit cards remain near 40-year highs and delinquencies, especially among younger borrowers, increase. And with the federal student loan forbearance set to end this fall, millions of Americans may find themselves relying on credit even more.
"Consumers are going to have to resume their payments of federal student loans soon," VantageScore President and CEO Silvio Tavares told Yahoo Finance. "The problem is that if they haven't had to pay a loan for three years, a lot of people don’t have that money in their budget."
'People are losing sleep over their financial situation'
Younger generations and folks with lower income levels are more likely to experience delinquency or borrow more over the next year, several reports found.
In fact, some are already struggling to keep up with payments as they contend with rising rates, piling debt and ever-present inflation concerns.
According to the New York Fed, the youngest Americans (18 to 29) had the highest credit card delinquency rates in the first quarter of 2023. At least 8.5% were at risk of slipping 90+ days behind on payments. This was followed by 30 to 39 year olds, which had a delinquency rate of 6.1%, while those 40 and up carried delinquency rates below 5%.
Overall, consumers flow into serious delinquency increased to 4.57% within the first three months of the year, up from 3.04% a year ago. Delinquency transition rates for credit cards also increased by 0.6%, surpassing pre-pandemic levels, the New York Fed found.
The New York Fed is scheduled to release its second quarter data on household finances on Tuesday.
In a separate survey conducted in June, 53% of millennials and 41% of Gen Zers felt they were more reliant on credit cards than ever before. The poll by Quicken Inc., which consisted of 1,002 US adults, found that 39% of Americans were living paycheck to paycheck with "no end in sight."
According to LendingTree chief credit analyst Matt Schulz, these borrowers have to act fast before rates tick even higher.
"People are losing sleep over their financial situation," Schulz said in a statement. "Cardholders' best move is to assume that rates will continue to rise and use that as further motivation to continue to knock down their credit card debt."
Interest rates continue to inch higher
Worsening folks' ability to pay off their piling credit card debt are rising interest rates.
Rates on credit cards have been driven to record highs by the Fed’s relentless campaign to cool inflation. In July, the central bank raised its key lending rate for the 11th time since March 2022. The quarter-point increase put the benchmark rate at 5% to 5.25% – its highest level in 22 years.
Those sharp upticks in the federal funds rate have trickled down to credit card APRs. The average credit card interest rate in the US as of Aug. 2 was 20.53% – the highest level since 1985, according to Bankrate. The Fed’s latest rate hike is expected to filter down to credit card rates within the next 30-45 days.
Translating that to dollars, a higher rate tacks on quite a bit to your monthly credit card payment.
For instance, someone with $5,000 credit card debt on a card with 20.53% APR and a $250 monthly payment, would pay $1,172 in interest and take 25 months to pay off the balance. By contrast, the same borrower a year ago with a rate of 17.01% would pay $921 in interest, and it would take 24 months to pay off the debt.
"In normal times, given that most Americans' financial margin for error is tiny, that’s a big deal," Schulz wrote. "However, these aren’t normal times, so those savings are even more important."
Plan ahead before student loan repayment resumes
With the end of student loan forbearance just around the corner, credit card borrowers may face yet another bite out of their budgets, making it tougher to pay off existing debts or creating a situation where they need to lean on debt more.
According to Experian, the average borrower could be facing a monthly payment of $203 once student loan payments resume. Out of all generations, younger adults have the most outstanding loan debt.
That’s why before payments resume, borrowers who also carry credit card debt should make a plan to budget each month, Schulz noted. They could also seek alternatives to lower their credit card interest rate — such as applying for a zero-interest balance transfer card.
According to LendingTree, at least 76% of cardholders who asked for a lower APR for their credit card in the past year got one. The average reduction was roughly 6 percentage points, which could save $500 or more depending on how much debt you carry.
A 0% balance transfer card also could allow you to go up to 21 months without accruing interest. That could be a bit of relief for folks who are also managing student loan repayments.
"The fact that card issuers are still willing to give breaks like that, even in the wake of a year of frequent rate hikes, is very, very good news for cardholders," Schulz said. "However you slice it, it is well worth your time to make that call."
Gabriella Cruz-Martinez is a personal finance reporter at Yahoo Finance. Follow her on Twitter @__gabriellacruz. | Banking & Finance |
While taxes are inevitable for most Americans, the government doesn’t require those with sufficiently low incomes to file. However, choosing not to file usually means forfeiting profitable tax breaks and other financial advantages. Plus, you’ll be penalized if it turns out you owe taxes or made too much to avoid filing. Individuals under age 65 must file taxes if they make a minimum of $12,950 in 2023 ($25,900 for joint filers under age 65). However, your status can affect your obligation to file. Here’s what you need to know.
For help with your own tax situation, consider working with a financial advisor.
How Much Do You Have to Make to File Taxes?
Your income level and marital status determine if you must file taxes. As a result, it’s crucial to understand how tax regulations affect your individual circumstances. This table shows the tax requirements for every possible scenario for the 2022 tax year (filed by April 2023.) Remember, you can still file taxes if your income falls under the threshold for mandatory filing.
Income Threshold for Mandatory Filing Filing Status Age of Taxpayer at the End of 2022 Income Threshold for mandatory filing Single Under 65 $12,950 Single 65 and older $14,700 Head of household Under 65 $19,400 Head of household 65 and older $21,150 Married filing jointly Both spouses under 65 $25,900 Married filing jointly One spouse 65 or older $27,300 Married filing jointly Both spouses 65 or older $28,700 Married filing separately Any age $5 Qualifying surviving spouse Under 65 $25,900 Qualifying surviving spouse 65 or older $27,300
Filing Status Definitions
It’s crucial when filing to understand what status you fall under. Knowing your status allows you to file correctly and receive the appropriate tax advantages. Here’s how to tell your status:
Single
You have single filing status if you’re unmarried or have legally ended your marriage. In addition, you have single status if you aren’t a surviving spouse or head of household (read on for descriptions of these, as they both provide more tax benefits than single status in most cases).
Married Filing Jointly
If you’re married or haven’t ended your marriage legally, you can file jointly or separately with your spouse. If your spouse passed away in 2022, you can file jointly, separately, or as a qualifying surviving spouse for that tax year. However, remarrying the same year your spouse passed away means you’ll file a separate return with your old spouse and a joint or separate return with your new spouse. On the other hand, if your spouse passed away more than two tax years ago, you’ll have single or head of household status if you haven’t remarried.
Married Filing Separately
You can also file separately if you’re married. Filing jointly usually grants more tax deductions and credits. However, you may reap more advantages by filing separately if one or both spouses are self-employed or want to minimize their student loan payment amounts.
Head of Household
Unmarried filers have the head of household option if they pay over half their housing costs for the year and have a qualified dependent living with them (or pay for a dependent parent’s living expenses regardless of the parent’s home).
Qualifying Surviving Spouse
Those who became widows or widowers within the past two tax years can file as a surviving spouse. To qualify, you can’t have remarried when filing. In addition, you must pay more than half your housing costs for the tax year and have a dependent son, stepson, daughter, or stepdaughter.
Married but Filing as Unmarried
Marriage tax situations can be complicated when couples separate but don’t legally end their marriage. However, you can file unmarried for tax purposes even if you have a spouse. To do so, you must file a separate return and pay for more than half of your annual housing costs. In addition, you must have a dependent whose primary home was your house. Specifically, the dependent can be a biological child, stepchild, or foster child. Lastly, your spouse can’t have lived in your home for the second half of the year.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Factors that Impact Filing Requirements
As a taxpayer, you’ll have various obligations depending on several elements in your individual circumstances, such as:
Gross Income
Your income is the primary determining factor in whether you must file taxes and how much you owe. The money you make from your job, side hustle, business, international transactions, and investments is subject to taxes. Generally, these income streams contribute to your ordinary income and capital gains tax brackets.
Filing Status and Threshold
As demonstrated above, your filing status influences the benchmark for when you must file taxes. For example, a married couple filing jointly can make more money than a single filer before needing to file.
Self-Employed versus Employee
Working for an employer means you file taxes once per year. Therefore, if your income is solely from wages your employer pays you, you’ll file annually in April. For example, W-2 workers have until April 18, 2023, to file this year. On the other hand, if you generate self-employment income of at least $400, you must pay estimated taxes each quarter or risk incurring financial penalties from the IRS. So, for 2023, your quarterly filing dates are April 18, June 15, and September 15 of 2023. The final quarterly filing date for 2023 is January 15, 2024.
Dependent Status
Regarding tax filing, a dependent relies on someone else for the majority of their financial support. However, being a dependent doesn’t exempt you from filing taxes because dependents can receive income. For instance, a 17-year-old who lives with their parents might have dependent status but earn $13,000 of gross income by working part-time. In this case, their gross income requires them to file or have their parents file on their behalf.
In addition, a dependent with over $1,100 of unearned income (such as money from a trust) must file taxes.
Reasons to File Your Taxes Even if You’re Not Required to
If your tax status and income level don’t require you to file taxes, filing is still a good idea. Generally, filing will put money in your pocket in this situation for a few following reasons.
First, your paychecks had federal income tax withheld. If you fall beneath the filing threshold, the government will return that money to you when you file.
Similarly, your quarterly tax payments as a self-employed worker will come back to you. If your income is under your filing threshold, the state and federal government will return the money to you when you file.
There are also numerous tax credits are available for filers with income under the required level, such as:
American opportunity tax credit
Child and dependent care credit
Credit for federal tax paid on fuel
Credit for sick and family leave
Health coverage tax credit
Premium tax credit
Benefits of Filing Taxes
While your income and individual circumstances influence whether you must file taxes, filing regardless allows you to reap a host of advantages:
Maximize Your Refund
Filing taxes means you’ll get the highest possible refund. Therefore, it’s best to file regardless of your income level because you’ll see if you qualify for money back due to your individual circumstances, such as childcare costs or healthcare expenses.
Prevent Penalties
Not filing a tax return puts you at risk of incurring penalties and interest on unpaid taxes if your income is above the threshold. Remember, underestimating your income by a few dollars can be the difference between filing being optional and mandatory. For example, a 65-year-old who thinks their income is $14,695 (and therefore under the filing threshold) while it’s actually $14,705 will owe taxes. In addition, finding out too late means they will owe additional fees for filing after the deadline (April 18, 2023).
Access Governmental Assistance
Applying for financial aid from the government requires your filing status to be up to date. For example, if you want student loans, you must fill out the Free Application for Student Aid (FASFA) form, which requires information from your most recent tax return.
Increase Social Security
The government bases your Social Security benefit on your reported income. Therefore, filing taxes annually will help increase your Social Security check when you retire.
Acquire Loans
Banks and credit unions provide loans to borrowers with sufficient income. These financial institutions look at past tax returns to determine your eligibility, so filing taxes means you can apply for a mortgage or personal loan from your bank.
Peace of Mind
There is no penalty for filing taxes, but failing to file may incur financial penalties and disadvantages. Therefore, filing can only help you: you’ll preempt taxes you weren’t aware of, and you’ll receive the tax credits for which you were eligible.
How to File Your Taxes
The federal tax code is complex, and getting your information to the IRS in time can be challenging. Fortunately, you have numerous ways to file taxes for free:
Get In-Person Tax Help
The IRS offers tax preparation through the Volunteer Income Tax Assistance (VITA), Tax Counseling for the Elderly (TCE), and AARP Foundation Tax-Aide programs. These services are free for those with disabilities. In addition, if your income is $60,000 or lower, you’re 60 or above, or you struggle with understanding English, you can access them at no cost.
If you don’t qualify for free assistance, you can visit a tax preparation business to sit down with a professional and file your taxes.
File Online with Professional Help
IRS-certified volunteers can help you file on myfreetaxes.com if your income is $73,000 or less. In addition, you can get help from VITA online at getyourrefund.org if your income is $66,000 or less.
File Yourself Online or Physically
If you’re confident in your tax knowledge, you can file for free through the IRS Free File online tool or print out the forms to fill out physically, regardless of your income level. Remember, you can get free help with filing if you have an income of $73,000 or less.
Use Military Service Benefits
Miltax is a free tax preparation service for those in the military, National Guard, and Coast Guard. In addition, qualifying family members can use the service, as can certain civilian employees of the Defense Department.
Tax Filing Tips
NOTE TO MIKE: I wasn’t sure if this section was needed, but since the article is aimed at people who might be a bit less financially literate than our average reader, I left it in. If you disagree, go ahead and cut)
Filing taxes might not be your favorite annual occurrence, but you can make the most of it with an informed approach. Here’s how to minimize stress and maximize your return when filing:
Keep Tabs on Tax Information
Remaining organized throughout the year will streamline the filing process. So, keep all tax-related documents in one place, such as:
Identification (such as a Social Security card) for yourself and your dependents
Your bank account and routing numbers if you want to receive your refund by direct deposit
Your most recent W-2s and pay stubs
Business documents
Estimated quarterly tax payment records
Documents for your rental properties
Retirement income forms, like a 1099-R from your IRA
1099 forms from other income sources, such as a savings account or stock transaction
Your state and income tax returns from the previous year
Weigh Tax Documents Against Your Expectations
Your tax documents should arrive by the first week or two of February. You can review them to see your annual income, federal tax withholdings, student loan and mortgage interest paid, and more. These numbers will likely reflect last year’s financial and tax circumstances and provide continuity when you file. However, a significant life change, such as a job change or the birth of a child, can mean submitting new information when you file.
Assess Your Needs
On that note, life changes and circumstances dictate your tax situation’s complexity. For instance, profiting from the sale of stock means you’ll owe capital gains taxes. Or, buying a home can lead to increased tax breaks. If the details are overwhelming, it’s best to seek professional help to file. Or, if you have a simple tax situation that hasn’t changed since last year, you may feel comfortable filing on your own.
Remember, errors on your tax return can hurt you in two ways: first, you may leave money on the table by failing to claim the deductions and credits you qualify for. Second, you might make a mistake calculating your owed taxes, leading to penalties from the IRS for underpaying.
Determine Your Status
Usually, you can file in multiple ways, so the question remains each year of which status can provide the most financial benefit. For instance, married couples can choose between joint or separate filing. While filing jointly is usually better, that’s not always the case. For instance, paying expensive COBRA premiums throughout the year can lead to a hefty deduction for a spouse filing separately. Fortunately, tax preparation volunteers and professionals can help identify your optimal status.
Hunt Down Deductions and Credits
Deductions are the primary way to reduce your taxable income. Therefore, taking as many as possible will minimize your tax burden. For example, you can deduct student loan interest, charitable giving, municipal sales taxes, jury duty expenses, and more.
Tax credits are even better than deductions because they can put money in your pocket even if your tax burden is $0. For instance, popular tax credits include the Earned Income Tax Credit and Child and Dependent Care Credit. However, don’t hesitate to explore obscure credits, such as the Residential Clean Energy Credit for installing solar panels.
Put Money into Your IRA and HSA
Your traditional IRA contributions can lower your income taxes. Fortunately, if you forgot to deposit money throughout the year or realize you could have contributed more, you have recourse. Before the filing deadline (usually April 15), you can maximize contributions to a new or existing IRA. For the 2022 tax year, the maximum IRA contribution is $6,000 or $7,000 if you’re 50 or older. Regulations for the 2023 tax year increase this amount to $6,500 and $7,500.
Similarly, you can deposit funds into your HSA retroactively. However, your health insurance plan must meet IRS standards for deductible and out-of-pocket costs. In addition, you can’t open an HSA if you have Medicare or a plan without deductibles or co-pays. Lastly, you’re disqualified if someone else claims you as a dependent.
Be Calendar-Conscious
Working the timetables can improve your tax situation. Generally, you’ll want to perform transactions or incur expenses before the end of the tax year to do so. For example, having a costly surgery before the year’s end can create a medical expense deduction. Likewise, paying your January mortgage payment before December 31 of the previous year will maximize your mortgage interest deduction.
The Bottom Line
Filing taxes is a necessity for most Americans. However, if your income is beneath the filing threshold for your status, it’s best to file taxes nonetheless. You’ll receive tax credits, accumulate Social Security benefits, and eliminate the possibility of unpaid taxes creating financial penalties. As a result, it’s crucial to keep accurate records during the year and work with a tax professional to determine your ideal tax filing status.
Tips for Assessing Tax Status by Income
Taxes are difficult to figure out, regardless of your income level. Fortunately, help from a professional is available. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Tax credits are lovely because they pay out even if you don’t owe taxes, unlike deductions. To ensure you get every credit possible, here’s a guide to this year’s tax credits.
Photo credit: ©iStock.com/Delmaine Donson, ©iStock.com/Khanchit Khirisutchalual, ©iStock.com/Milan_Jovic | Personal Finance & Financial Education |
Coinbase Is Facing A ‘Life or Death’ Battle With The SEC
Coinbase Global Inc. knew all along that it could be courting trouble with regulators.
(Bloomberg) -- Coinbase Global Inc. knew all along that it could be courting trouble with regulators.
More than two years ago, when the crypto exchange filed with the US Securities and Exchange Commission to start publicly trading its shares, it said there was a “high degree of uncertainty” regarding the legality of its operations, warning that “regulators may disagree” with the company’s view that it wasn’t covered by their rules.
That possibility became reality on Tuesday, when the SEC sued Coinbase for failing to register with the agency as a broker, an exchange or a clearing firm — all roles that the company plays in a cryptocurrency market where many tokens are, according to the agency, actually unregistered securities. The regulator also alleged that Coinbase’s staking program, which allows customers to lock up their coins in return for a share of rewards offered by various blockchains, violates securities laws, as well.
The charges came a day after the SEC brought a similar case against rival Binance Holdings Ltd., marking a sharp escalation of its efforts to rein in a shadowy industry that burned investors with blowups like the collapse of FTX last year. The SEC’s push is particularly fraught for Coinbase, which generated over 80% of its revenue in the US last year and is now facing a near existential threat to its business model.
“For Coinbase, this case is life or death since it is more concentrated on the US market,” said Ashok Ayyar, counsel at Ashbury Legal. “Expect Coinbase to litigate this vigorously — it is alleged that virtually their entire US business is illegal.”
Chairman and Chief Executive Officer Brian Armstrong responded to the suit on Twitter, saying he’s proud to represent the industry in court. He repeated his defense that the SEC had reviewed its business and allowed Coinbase to become a public company when it registered the stock. Yet the regulator made it clear in its complaint that approving the company’s plan to go public was not the equivalent of giving its business model a green light: “Declaring effective a Form S-1 registration statement does not constitute an SEC or staff opinion on, or endorsement of, the legality of an issuer’s underlying business.”
Legal experts are inclined to agree.
“Coinbase has publicly asserted that going public means the SEC has somehow approved their business or its legality — that is mistaken,” said Ayyar. “Going public just means the SEC reviews the offering prospectus and that the document meets the filing requirements. It is not a stamp of approval for the company, its products or businesses.”
Armstrong indicated that the company plans to challenge the SEC to get more legal clarity for his industry. One major issue will be which of the thousands of cryptocurrencies on the market are considered securities. Altcoins — tokens other than Bitcoin and Ether — made up almost half of Coinbase’s trading revenue in the first quarter of this year, according to a letter to shareholders. In its lawsuit, the SEC said several such coins are securities.
Oppenheimer & Co. analyst Owen Lau anticipates a long-term legal battle. While the company may operate normally in the short term, he said, the potential reputational damage caused by the SEC’s claims could lead users to pull their money from the platform. During the first quarter, Coinbase’s revenue was already less than a third of its late 2021 peak. Over the past two days, its shares have tumbled 20%.
In the longer term, Coinbase is facing a bigger hit should the SEC’s lawsuit prevail. The case could force the company to stop providing custody and trading of coins considered securities, threatening a big chunk of its business.
“If the SEC stops Coinbase from trading some tokens they deemed securities, that could have a huge impact on Coinbase’s financial health,” Lau said. “I would say the revenue at risk could be over 50%.”
But, he added, it’s possible the SEC may not prevail on all of the charges: “The caveat is the probability to lose everything could be very low.”
The SEC also may seek to compensate customers who traded unregistered securities on Coinbase, according to John Reed Stark, a consultant and former chief of the SEC’s Office of Internet Enforcement.
“The SEC would figure out an amount of penalty and an amount of disgorgement and find a distribution agent to distribute the funds to aggrieved investors,” he said.
--With assistance from Olga Kharif and Emily Nicolle.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
Tokenize Stocks, Bonds, Funds, But Proceed With Care
Replacing a 700-year-old system of recording asset ownership with digital chips comes with its own set of risks.
(Bloomberg Opinion) -- Earlier this year, Singapore jailed three Chinese nationals for putting strong glue on their palms to steal casino chips from other gamblers. Substitute “chips” with digital tokens, and “glue” with deceptive computer code, and you could be talking about theft of bonds, equities, mutual funds or any other ownership interest that can have a parallel life on the blockchain.
Turning financial securities into cryptographic representations that can be bought and sold in tiny fractions of what is possible today opens up a new avenue for the masses to accumulate wealth. Using blockchains to democratize finance is an idea that Asia, in particular, has fallen in love with.
Last week, the Singapore central bank announced five new pilots — in partnership with Ant Group Co., Franklin Templeton, JPMorgan Chase & Co. and other private-sector players — to explore different aspects of tokenization. Hong Kong’s Securities and Futures Commission issued a circular this month for those planning to bring tokenized digital assets to the market.
For both large institutions and financial hubs like Hong Kong and Singapore, it makes sense to build the shiny new rails on which much of tomorrow’s money may move. Transactions will be a lot faster, with fewer intermediaries and at a lower cost. Citigroup Inc. has estimated issuance of tokenized securities at between $4 trillion to $5 trillion by 2030. But enforceability of property rights in a public blockchain — a decentralized network where nobody knows or trusts anyone — may emerge as a thorny issue.
The conventional way of recording asset ownership goes back at least 700 years. In 1494, Luca Pacioli wrote his treatise on double-entry bookkeeping, a system that he claimed had by then been in vogue in Venice for a couple of centuries. The technique relies on crediting one account to reflect is acquired, such as real estate, and debiting another account, like bank deposits, to show the increase came about.
The newly created assets and liabilities of investors and issuers get translated into claims of their financial institutions on one another. If only a single currency is involved, the IOUs are settled with absolute finality on the balance sheet of the national monetary authority where these banks have accounts.
Digital tokens will shake up this entire edifice. Stablecoins, or crypto assets that target a fixed monetary value, have been described by US Securities and Exchange Commission Chair Gary Gensler as “the poker chip in the casino.” Tokenized securities will be somewhat different. Their values will fluctuate based on demand and supply, and they will come with built-in software that directs the issuer to pay interest or dividends to investors.
But just like chips represent cash, tokens will stand in for securities, delinked from accounts. Value will shift from player to player, with distributed ledger technology, or DLT, keeping track of fund movement. But what is the legal finality of these transactions? If a dispute crops up, will blockchains be recognized by the courts as final books of records, an ownership ledger? One can’t be very sure.
Asset manager Schroders Plc and global funds network Calastone are running a pilot under the Monetary Authority of Singapore’s Project Guardian that will seek to “apply the security attributes inherent in DLT to evolve traditional forms of bookkeeping and demonstrate proof of ownership through tokens.”
Authorities won’t be in a hurry to trust a layer of technology as the final basis for ownership, not when a ransomware attack can force Industrial & Commercial Bank of China Ltd., the world’s largest bank, to settle trades with counterparties via messengers carrying USB sticks.
Hong Kong’s circular is clear: The regulator would treat the token as only a wrapper around something that is valuable. The usual rules will apply. Intermediaries will conduct due diligence on issuers of tokenized securities and their technology vendors, make disclosures to the public, and take additional precautions before offering tokens on public networks that don’t have a central authority and where anyone can participate.
This is dangerous territory. According to one industry researcher, fraudsters deployed more than 200,000 scam tokens between September 2020 and November last year. Why are institutions so keen, then, to back an idea that takes them away from the time-tested system of recording property rights? Especially when it risks exposing them (and their clients) to new problems such as fraudulent computer code embedded in self-executing smart contracts? A possible answer: Satoshi Nakamoto.
The pseudonymous creator of Bitcoin may have failed in inventing a better form of money, but a payment system based on cryptographic proof, the technology he sketched out in his 2008 paper, is ready. The public sector, which is wary of cryptocurrencies, wants to be in control of this new architecture with central bank digital currencies, or CBDCs. That could potentially erode the importance of private-sector intermediaries, unless banks and asset managers take the lead and insert themselves into the equation.
The custodial institutions’ best bet is to hope that courts will be reluctant to come up with a “Law of The Horse.” That dictum was made famous by a US judge in the 1990s who wanted to stress the point that every innovation (cyberspace, back then) does not require a new set of rules. Tort laws are perfectly capable of taking care of people getting kicked by someone else’s horse; there are other legal codes to deal with prize money from racing or the standard of veterinarian care.
Ditto for tokens. When disputes arise — as they inevitably will — courts and regulators would throw away the cryptography, and go back to the underlying securities. Their ownership rights would be legally honored not much differently than was the custom 700 years ago in Venice. The same institutions that Nakamoto was going to make extinct with his push for decentralization of finance would remain in charge, albeit they would be using the new technology to spread the reach of their products.
Still, it’s one thing for institutions to exchange value among themselves in private digital networks supervised by a central authority, but intermediaries selling tokenized stocks, bonds or funds to the public in an open marketplace where anyone can participate anonymously? That could get messy. Even if you catch swindlers with chips glued to their hands, it may be hard to return stolen property to its rightful owners if it has changed hands at five other tables — or outside the casino, for that matter. Regulators need to temper their optimism, and make haste slowly.
More from Bloomberg Opinion:
- Hong Kong Is Asia's New Crypto Capital: Andy Mukherjee
- SBF Won't Be the Last Crypto Mogul Behind Bars: Lionel Laurent
- The Menace of Central Banks' Crypto Dreams: Marcus Ashworth
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.
©2023 Bloomberg L.P. | Banking & Finance |
Jeremy Hunt today hailed the debunking of Britain's reputation for having the slowest bounceback from Covid.
Official figures previously showed that UK plc was still 1.2 per cent smaller by the end of 2021 than immediately before the pandemic hit.
That led to questions about why the economy was performing so much worse than rivals - with Brexit often blamed.
However, the Office for National Statistics (ONS) has now overhauled the numbers after finding that companies spent more and had more stock than previously thought.
In fact, the ONS believes GDP - a measure of activity - was 0.6 per cent bigger than before Covid by the fourth quarter of 2021.
A jubilant Chancellor said 'once again those determined to talk down the British economy have been proved wrong'.
The change casts a new light on the UK's resilience to the pandemic.
Data had been showing that even as of the second quarter of this year real GDP was still 0.2 per cent below the level at the end of 2019.
By contrast the US was 6.2 per cent bigger than before Covid, the Eurozone 2.7 per cent and France 1.7 per cent.
It remains to be seen how the upgrade will affect the UK figures since 2021, as it takes the ONS time to assemble the more accurate 'Blue Book' numbers.
However, it suggests the economy has been faring better than expected.
Mr Hunt said: 'The fact that the UK recovered from the pandemic much faster than thought shows that once again those determined to talk down the British economy have been proved wrong.
'There are many battles still to win, most of all against inflation so we can ease cost of living pressures on families.
'But if we stick to the plan we can look forward to healthy growth which according to the IMF will be faster than Germany, France, and Italy in the long term.'
In a blog, ONS Head of National Accounts Craig McLaren said: 'The UK economy has recently been through unprecedented times, first with the COVID-19 pandemic in 2020 and 2021 – that led to the biggest fall in GDP ever seen – followed closely by the impact of the Ukraine War from 2022 – which has seen prices rise at their fastest rate for over 40 years.'
He added: 'Producing estimates of GDP in unprecedented times, when much of these data we need to produce complete national accounts are not available for a couple of years after the event is clearly a challenge.
'We are among the first of our international colleagues to update our initial estimates with more detailed data.
'We will continue to review our assumptions, methods and sources to produce the best estimates of changes in the UK economy as soon as possible.' | United Kingdom Business & Economics |
The Securities and Exchange Commission is charging Coinbase with operating its crypto asset trading platform as an unregistered national securities exchange, broker, and clearing agency.
Coinbase was also charged for failing to register the offer and sale of its crypto asset staking-as-a-service program.
Users of trading platforms can stake their cryptocurrency, essentially locking up some of their assets, in exchange for payment later, much like earning interest rates in a savings account. Those assets are used by platforms like Coinbase Global to guarantee other transactions taking place on the blockchain. Coinbase has been critical of regulations related to staking, calling them vague.
The SEC complaint also alleges that Coinbase’s holding company, Coinbase Global Inc., is a control person of Coinbase and therefore is also liable for some of Coinbase’s violations.
Shares of Coinbase Global tumbled nearly 17% before the market open on Tuesday.
The SEC, which had warned Coinbase in March that it could face securities charges, says in its complaint that Coinbase has made billions of dollars unlawfully since at least 2019 by facilitating the buying and selling of crypto asset securities. The agency claims Coinbase intertwines the traditional services of an exchange, broker, and clearing agency without having registered any of those functions with the commission, as required by law.
"While Coinbase’s calculated decisions may have allowed it to earn billions, it’s done so at the expense of investors by depriving them of the protections to which they are entitled. Today’s action seeks to hold Coinbase accountable for its choices,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a statement on Tuesday.
Coinbase did not immediately respond to a request for comment.
The SEC’s complaint was filed in U.S. District Court for the Southern District of New York. It seeks injunctive relief, disgorgement of ill-gotten gains plus interest, penalties, and other equitable relief.
The announcement comes one day after the SEC filed a lawsuit against Binance and its founder Changpeng Zhao, accusing them misusing investor funds, operating as an unregistered exchange and violating a slew of U.S. securities laws.
In a social media post, Binance said that it has been cooperating with the SEC’s investigation but said that the agency “chose to act unilaterally and litigate.”
Binance, the world’s largest cryptocurrency exchange, is a Cayman Islands limited liability company founded by Zhao, and the charges are familiar to practices uncovered after the collapse of the second largest cryptocurrency exchange, FTX, last year.
U.S. prosecutors and the SEC charged FTX’s founder Sam Bankman-Fried with a host of money laundering, fraud and securities fraud charges in December. His criminal trial is likely to be in the fall. | Crypto Trading & Speculation |
IREDA Shares Debut At 56% Premium Over IPO Price
Shares of IREDA debuted at Rs 50 apiece on the National Stock Exchange and the BSE, a premium of 56.25%.
Shares of Indian Renewable Energy Development Agency Ltd. debuted at Rs 50 apiece on the National Stock Exchange and the BSE on Wednesday. That's a premium of 56.25% over its IPO price of Rs 32 apiece.
The Rs 2,150 crore-IPO was subscribed 38.80 times on its third and final day. The bids were led by institutional investors (104.57 times), non-institutional investors (24.16 times), portion reserved for employees (9.8 times), and retail investors (7.73 Times).
The Indian Renewable Energy Development Agency raised Rs 643.26 crore from anchor investors ahead of its initial public offering on Nov. 21.
The integrated facilities management company allotted 20.1 crore shares at Rs 32 apiece to 58 anchor investors.
The investors included SBI Banking and Financial services Fund, HDFC Mutual Fund, ICICI Prudential, Nippon Life India Trustee, and Kotak Mahindra Trustee, among others.
SBI Banking and Financial services Fund secured 5.05% of the allocation, while HDFC Mutual Fund-HDFC Multi Cap Fund and HDFC Mutual Fund- HDFC Business Cycle Fund each netted 2.33%.
13 mutual funds have applied through a total of 32 schemes, the company said in an exchange filing. They have collectively netted 42.36% of the anchor portion of Rs 272 crore.
This is the first government IPO in 18 months. The government is considering granting Indian Renewable Energy Development Agency Ltd. the 'Navratna' status, according to Chairman Pradip Kumar Das.
The state-run non-banking financial services company was upgraded to 'Schedule A' category public sector enterprise from 'Schedule B' in September.
Business
Incorporated in 1987, Indian Renewable Energy Development Agency Limited is a public limited government company. It is a Mini Ratna (Category - I) government enterprise and is administratively controlled by the Ministry of New and Renewable Energy.
The company operates in four key sectors: solar, wind, hydro, biomass, biofuels and cogeneration.
IREDA is a non-banking financial institution that promotes, develops and extends financial assistance for new and renewable projects. With 36 years of experience under their belt, the company provides a comprehensive range of financial products and related services, from project conceptualization to post - commissioning, for renewable energy projects and other value chain activities, such as equipment manufacturing and transmission.
Financials
As of September 2023, the total term loans outstanding stood at Rs 47,514.48 crore. The term loan outstanding compounded annual growth rate between FY21 and FY23 stands at 30%.
The company has sanctioned loans worth Rs 4,744.50 crore for the six months ending in September 2023, and the loans sanctioned in FY23 stood at Rs 32,586.61 crore. Loans disbursed as of FY23 and six months ended September 2023 stand at Rs 216,39.21 crore and Rs 6,273.25 crore, respectively.
The net interest margin and net NPA as of March 2023 stood at 3.32% and 1.66%, respectively | Stocks Trading & Speculation |
Many businesses have warned they are in serious trouble as the cost of living crisis continues to bite.
A study found that one in nine micro businesses – that’s around 630,000 in total – fear they will be forced to close this year.
Micro businesses usually have fewer than 10 employees.
* Read more on the GoDaddyVenture Forward study at www.godaddy.com/ventureforward
Key task is to outline a vision that’ll excite people
Online gift company owner Steph Douglas, 42
Steph says the number of small firms being forced to close is “terrifying”.
The owner of Don’t Buy Her Flowers, in Stroud, Glos, adds: “Brexit and the red tape involved makes it very difficult for us to sell to the EU, shrinking the potential market...“
The biggest thing the Government can do for small businesses is to set a vision for the UK that gets people excited and boosts consumer sentiment.
“The impact of fear and uncertainty has been huge since last April. We’re seeing the fallout of that in the number of [closures].”
Help us with rising costs and invest in infrastructure
Sue Pankhurst, 54, runs a guest house
Sue has been forced to close most of the winter because her energy bills are around five times what they were this time last year.
She says: “It’s not just help with energy bills that we need. We provide breakfast, and the price of basics like bread has also shot up.”
Sue, who runs Cranborne House in Poole, Dorset, adds: “Small businesses get it from both sides – they’re hit by the cost of living on a personal and professional level.
“In the short term we need help with rising costs but in the longer term the Government needs to invest more in infrastructure.”
We won’t last far beyond summer if it stays like this
Chris Fryer, 41, and wife Sarah, 42, run a pie firm
Chris says the Government must act fast to stop more small businesses shutting.
He adds: “Financial support needs to be continued and ramped up where required to help with uncertain and still-rising energy prices.“
Specific support for the small business sector is needed. For example, VAT could be reduced or scrapped, or other tax breaks could be applied.”
Chris says his business, Magpye in North Shields, Tyne and Wear, is particularly exposed to the economic climate because they use a lot of energy for their ovens.
He adds the extra money to pay for the firm’s energy bills, which have doubled to £800 a month, has to come out of their own pockets.
He says: “If things remain as they are or get worse we won’t be able to manage far past this summer. It feels like we’ve been hung out to dry.”
I don’t think things have been this bad before
Cleo Morris, 29, founder of Mission Diverse
Cleo says it’s tougher now than she has ever known.
She runs a diversity and inclusion training provider in Birmingham, and adds: “The companies we work with are struggling with the cost of living which means resources become harder to obtain.
“On the community front where we deliver our enterprise programmes it’s the opposite. We have an influx of people who have been made redundant and are looking for a support service which we offer too.
“I’ve been in business over 10 years. I don’t think things have been this bad.” | Inflation |
- Former crypto king Sam Bankman-Fried and his associates donated $50 million during the 2022 election cycle toward politically active nonprofit groups that don't disclose their donors.
- Groups linked to Senate leaders Mitch McConnell and Chuck Schumer, as well as other lawmakers, saw millions of dollars from Bankman-Fried and his allies.
- The documents give the first full look at Bankman-Fried and his allies' contributions to so-called "dark money" organizations.
Former crypto king Sam Bankman-Fried and his allies donated $50 million during the 2022 election cycle toward politically active groups that do not publicly disclose the names of donors, according to documents recently made public by prosecutors.
Bankman-Fried, his cryptocurrency exchange FTX and at least two of his former colleagues gave to nonprofits aligned with Senate Minority Leader Mitch McConnell, R-Ky., and other senior Republican senators; a group linked to Democratic Senate Majority Leader Chuck Schumer, D-N.Y.; and a wide range of obscure groups that have quietly influenced politics.
The documents give the first full look at Bankman-Fried and his allies' contributions to so-called "dark money" organizations. Nishad Singh, FTX's former head of engineering, provided further testimony earlier this week that shed light on how Bankman-Fried used a private signal chat called "Donation Processing" to request certain contributions be made in Singh's name.
Bankman-Fried's mother, Barbara Fried, also encouraged donations that were actually from her son to be made in Singh's name, according to evidence tied to a lawsuit brought by FTX.
Bankman-Fried is on trial for several federal fraud charges, as well as for allegedly using FTX customer funds to help finance over $100 million in political giving during the 2022 midterms. He faces a potential life sentence in prison. He has pleaded not guilty.
Bankman-Fried said in an interview last year that he gave what he called "dark" contributions because he didn't want the public to know that he was giving money to Republican-leaning organizations. While Bankman-Fried quietly funded more conservative dark money groups behind the scenes, he publicly cultivated a profile that was clearly aligned with the Democratic Party.
Separately, Bankman-Fried registered over $36 million in donations to Democratic campaigns and outside groups that disclose the names of their donors during the 2022 cycle, according to data from the nonpartisan OpenSecrets. He was a vocal and major financial supporter of charities promoting the concept of effective altruism, which argues people should work and use their money to better the world.
Bankman-Fried became a known entity in Washington, D.C., as he directly advocated for crypto to lawmakers.
Prosecutors on Monday filed into evidence a list of organizations that received money from Bankman-Fried and those close to him. Then, on Wednesday, prosecutors filed charts showing how millions of dollars from FTX customers and affiliated accounts linked to the cryptocurrency company were used to help make political donations by Bankman-Fried and his allies.
The documents show that Bankman-Fried was clearly the lead "dark money" donor among the listed former FTX executives and the company itself.
Ryan Salame, who was the CEO of FTX's digital markets division, donated millions of dollars to Republican political action committees and affiliated "dark money" groups with funds from FTX's affiliated hedge fund, Alameda Research, according to the documents. Salame pleaded guilty last month to federal campaign finance and money-transmitting crimes.
Caroline Ellison, who ran Alameda and once dated Bankman-Fried, also gave millions to right-leaning nonprofit groups, the documents say. She pleaded guilty to multiple federal charges and testified against Bankman-Fried in dramatic testimony last week.
Government watchdog Citizens for Responsibility and Ethics in Washington said in a complaint to the Federal Election Commission that it anticipated Bankman-Fried's "dark money" donations would amount to around $37 million. The list that prosecutors made public this week shows Bankman-Fried's "dark money" donations were closer to $47 million during the 2022 cycle alone.
A spokesman for Bankman-Fried declined to comment. A lawyer for Ellison declined to comment. A lawyer for Salame did not return a request for comment.
Bankman-Fried donated $10 million to a McConnell-linked group named One Nation in August 2022, according to the evidence filed by prosecutors. The money came directly from an Alameda Research account, prosecutors said.
The donation came two months before the November elections. At the time, One Nation was running ads in U.S. Senate races in Wisconsin, Ohio, Georgia and Arizona, according to the group's website. Republicans won in Wisconsin and Ohio but lost in Georgia and Arizona.
One Nation has been staffed for years by several alumni of McConnell's office. Steven Law, McConnell's former chief of staff, is the president of One Nation. Bobby Burchfield, who once worked as a lawyer for McConnell, is the chairman of the group, according to the organization's latest business records. The contribution was first reported by Puck News.
One Nation and its affiliated super PAC, the Senate Leadership Fund, spent millions to support Republicans running for Senate, as well as their policies, during the 2022 midterms. Law also runs the Senate Leadership Fund. FTX itself registered a $1 million donation to the Senate Leadership Fund late last year, according to a Federal Election Commission filing.
Salame allegedly used $5.5 million from a subsidiary of Alameda to donate to One Nation, according to another chart recently filed into evidence.
A press representative for One Nation did not respond to requests for comment.
Salame used funds from the same affiliated Alameda Research account to donate $2.8 million to the American Action Network, a conservative nonprofit that supports House Republican policies, according to the evidence.
A spokeswoman for the American Action Network did not respond to a request for comment.
Salame also allegedly made a $3.2 million donation to a nonprofit group called American Prosperity Alliance with funds from the subsidiary of Alameda. The group boasts on its website that it was the leading issue advocacy organization opposed to the Inflation Reduction Act, a sweeping tax, health and climate bill that was signed into law by President Joe Biden in 2022. It said it spent over $11 million on ads and public opinion research.
The group is led by longtime lobbyist Steven Stallmer, according to OpenSecrets. Stallmer's recent lobbying clients have included health insurance agency MVP Health Care and the Healthcare Association of New York, according to disclosure reports. Sen. Catherine Cortez Masto, D-Nev., ripped the group on the Senate floor last year for what she saw as false advertising about her stance on drug pricing.
Stallmer did not respond to a call and text seeking comment.
Ellison donated $6 million last year to a group called Defending America Together, according to the prosecutor's evidence. Defending America Together poured millions of dollars into the Alabama and Pennsylvania congressional midterm races, according to OpenSecrets. Puck News reported last month that Ellison gave $3 million to Defending America Together.
Bankman-Fried played both sides of the aisle, according to prosecutors.
The onetime billionaire also donated $8.5 million to Majority Forward from August 2022 through late September of that year, according to the donation list. The group is a rival to One Nation and is aligned with Schumer. At least $6 million of that $8.5 million came from an Alameda Research account, according to the documents.
A spokeswoman for Majority Forward did not respond to a request for comment.
Bankman-Fried listed total donations for $17.5 million to Guarding Against Pandemics, which is abbreviated on the list as "GAP." The nonprofit, which pushes for more public funding to prevent pandemics, was run at the time by Bankman-Fried's brother, Gabe.
The nonprofit once boasted on its website that Sam Bankman-Fried was a donor but never said how much he gave. Prosecutors showed in one of their charts that at least $10 million from Bankman-Fried came from an Alameda Research account.
Gabe Bankman-Fried resigned in November from the group's leadership ranks. A representative of Guarding Against Pandemics did not respond to a request for comment.
FTX was a key funder of more obscure "dark money" organizations linked to Republican senators, according to the evidence.
In August 2022, FTX gave $50,000 to the American Leadership Fund, a little-known nonprofit allied with GOP Sen. Steve Daines. The group's most recent public tax returns show that through 2021, it raised $820,000. The tax documents list a UPS Store in Washington, D.C., as the group's mailing address.
Daines, who represents deeply conservative Montana, was reelected to the Senate that year.
The organization's past tax documents list Stephen Replogle, a veteran lobbyist, as its president. Replogle's client list includes Oracle, Verizon, Walmart and Samsung, according to OpenSecrets.
Replogle did not respond to a LinkedIn message seeking comment.
FTX also gave $25,000 to The Bastion Institute in August, according to the list.
The Bastion Institute registered with the Internal Revenue Service in 2022 as a 501(c)(3) nonprofit, which by law means the group cannot participate in or intervene in any campaign on behalf of a candidate for public office.
Yet its website and social media pages show the nonprofit supports Sen. Joni Ernst, an Iowa Republican.
The group's website features Ernst in virtually every one of its videos. Its account on X, formerly known as Twitter, also features videos of Ernst and retweets of posts from the Iowa senator's page. The group also has a board loaded with political players, including Barry Jackson, a former chief of staff to ex-House Speaker John Boehner, and Morgan Ortagus, who previously worked in the Trump administration.
The Bastion Institute did not respond to a request for comment. | Crypto Trading & Speculation |
Rishi Sunak has delayed a ban on new petrol and diesel cars in a major change to the government's approach to achieving net zero by 2050.
The prime minister announced exemptions and delays to several key green policies, alongside a 50% increase in cash incentives to replace gas boilers.
The government could not impose "unacceptable costs" linked to reducing emissions on British families, he said.
Mr Sunak denied he was "watering down" the government's net zero commitments.
There has been criticism of the changes from Labour, business leaders and from within Mr Sunak's own party. But many Conservative MPs have come out in favour Mr Sunak's new direction, alongside some in the car industry.
The changes come as Mr Sunak seeks to create dividing lines with opposition parties ahead of a general election, expected next year.
Framing the changes as "pragmatic and proportionate", the prime minister has unpicked several of Boris Johnson's key policies, many of them launched when Mr Sunak was serving as chancellor.
And the political choices outlined in his speech preview more announcements later this autumn, as Mr Sunak promised he would set out "a series of long term decisions".
In a speech from Downing Street on Wednesday, Mr Sunak said moving too fast on green policies "risks losing the consent of the British people".
Among the key changes announced were:
- A five-year delay in the ban on the sale of new petrol and diesel cars, meaning a requirement for all new cars to be "zero emission" will not come into force until 2035
- A nine-year delay in the ban on new fossil fuel heating for off-gas-grid homes to 2035
- Raising the Boiler Upgrade Grant by 50% to £7,500 to help households who want to replace their gas boilers
- The ban on the sale of new gas boilers in 2035 remains, but the government will introduce new exemption for poorer households
- Scrapping the requirement on landlords to ensure all rental properties had a Energy Performance Certificate (EPC) of grade C or higher, from 2025.
The announcement was brought forward after plans to change the proposals were revealed by the BBC.
Mr Sunak ran the changes past a hastily-organised Cabinet meeting on Wednesday morning.
Responding to the statement, Labour unequivocally committed itself to keeping the 2030 ban on the sale of new petrol and diesel cars.
Without the ban the UK will miss its target "for a fully carbon free economy by 2050", shadow environment secretary Steve Reed said.
Mr Reed said the prime minster had "sold out the biggest economic opportunity of the 21st century" for Britain "to lead the world in transition to well-paid secured new jobs of the green economy".
Mr Sunak also announced he would be "scrapping" a range of proposals which had been "thrown up" by the debate, including hiking up air fares to discourage foreign holidays and taxes on meat consumption - proposals that were not government policy.
Announcing the policies, Mr Sunak said the country needs "sensible green leadership", saying that without transparency and "honest debate" on the impact of green policies there would be a "backlash" against net zero.
"That's why we have to do things differently," he said.
Billions of pounds has already been invested across multiple industries, including car makers and energy firms, in preparation of the previous deadlines.
Korean carmaker Kia, which has plans to launch nine new electric vehicles over the next few years, said the announcement was disappointing as it "alters complex supply chain negotiations and product planning, whilst potentially contributing to consumer and industry confusion".
The CEO of E.On energy, Chris Norbury, said watering down net zero plans was a "mis-step on many levels."
"We risk condemning people to many more years of living in cold and draughty homes that are expensive to heat, in cities clogged with dirty air from fossil fuels, missing out on the economic regeneration this ambition brings," Mr Norbury said.
Jaguar Land Rover, which announced hundreds of new jobs in the West Midlands a few days ago, welcomed the change, calling it "pragmatic" and adding that it brings the UK in line with other nations.
"Pragmatic" was also how Toyota described the changes.
Wise or wobbly
Liberal Democrat leader Sir Ed Davey accused Mr Sunak of being "selfish" and said the changes "epitomise his weakness".
"The prime minister's legacy will be the hobbling of our country's future economy as he ran scared from the right wing of his own party," he said.
The UK was now "at the back of the queue as the rest of the world races to embrace the industries of tomorrow", Sir Ed added.
But the shift in policy has gained support from some within Mr Sunak's party.
Former cabinet minister Jacob Rees-Mogg backed the changes, telling the BBC: "The problem with net zero and having regulations coming in so quickly was that it was a scheme of the elite on the backs of the least well off."
Mr Sunak is instead "going with the grain of the nation and moving for 'intelligent net zero' by 2050 but not putting in costly bans in the next few years."
The BBC's Chris Mason says Mr Sunak and his advisers will hope that beyond the criticism, many voters might quietly conclude he is on to something and being reasonable.
Mr Sunak's proposals are dividing his party, Parliament, and many in the country, but the PM will be looking at Labour's lead in the opinion polls and concluding he has no choice but to gamble. | Energy & Natural Resources |
Food prices in the UK continued to surge at the fastest rate in nearly 45 years in April as inflation fell at a slower pace than expected.
The rate at which grocery prices rose slowed marginally in the year to April, but at 19.1% is close to record highs.
It comes as the overall UK inflation rate fell sharply to hit single figures for the first time since last August.
However, it did not decline as much as expected and the chancellor said food prices remained "worrying high".
Prices rose by 8.7% in the year to April, according to the Office for National Statistics (ONS).
This is down from 10.1% in March but above the 8.2% figure widely forecast by analysts.
The drop is due to the fact that energy price rises are slowing from the extreme hikes seen a year ago just after Russia, a major oil and gas producer, invaded Ukraine and was hit with sanctions.
However, it does not mean prices are coming down, only that they are rising less quickly.
Chancellor Jeremy Hunt told the BBC that while the sharp fall in the headline rate of inflation was "welcome news", he admitted: "There are things underneath those numbers which show that this battle is far from over.
"We've got a long way to go."
The ONS said some vegetables were more expensive than a year ago, including potatoes.
However, it said that while food price inflation was still close to its recent peak, the price of staples like bread, cereal, fish, milk and eggs had fallen.
"If you look at what prices businesses are facing and how much they're paying for domestic food materials, that has come down from over 15% annually last month to under 10% this month," ONS chief economist Grant Fitzner said.
The prices that companies are paying for imported foods have also fallen "considerably".
However, he said: "Of course, those aren't reflected on supermarket shelves yet."
Retailers claim that falling wholesale prices take time to filter through to supermarket shelves due to the long-term contracts they typically sign with food producers.
Mr Hunt met food manufacturers on Tuesday to discuss the cost of food and look for ways to ease the pressure on households.
This follows the Competition and Markets Authority opening an investigation into the pricing of food and fuel at UK supermarkets.
Despite the fall in the headline rate, so-called core inflation - which strips out food and energy prices - rose to a 31-year high of 6.8% in April.
Mr Hunt said that the government would "be relentless in sticking to the plan to bring down inflation", saying it was causing industrial unrest and "enormous pressure" on households.
However, Labour's shadow chancellor, Rachel Reeves, said that families would be worried that food prices and the cost of other essentials were still high.
"They will be asking why this Tory government still refuses to properly tackle this cost of living crisis, and why they won't bring in a proper windfall tax on the enormous profits of oil and gas giants."
The rate of inflation in April is still four times higher than the Bank of England's target of 2%.
It has raised interest rates 12 times since December 2021 to stop rapid price increases.This should benefit savers but has pushed up costs for borrowers including millions of mortgage holders.
Samuel Tombs of Pantheon Macroeconomics predicts that another interest rate rise is "now is firmly on the table" when the Bank of England meets on 22 June, potentially lifting borrowing costs from 4.5% to 4.75%.
Apart from the fall below double digits, there was not a great deal to cheer in this latest inflation number. It is difficult to see how it reflects a material change for households.
The headline rate is still close to 9%, but that should continue to fall.
It is the spike up in core inflation - a measure of price pressures that strips out the most volatile components such as food and energy - that is most concerning. At 6.8% this is now at the highest level for 31 years, and is the measure most watched by central banks such as the Bank of England.
Markets now calculate a further interest rate rise is a certainty. The jump in core inflation may also bring another rise in August into play. In less well-reported remarks yesterday, the International Monetary Fund warned of "premature celebration" on defeating inflation.
When an economy hits double digit inflation, it tends to take years, not weeks to get it out of the system.
It is not just households who are being hit by surging price rises. Welsh farmer Llyr Jones said the last 12 months had been "challenging" with the price of feed, fertiliser, diesel and electricity increasing.
Mr Jones, 44, runs Derwydd Farm in Corwen and has 32,000 hens and also raises cattle.
He told the BBC that Russia's war with Ukraine has added to the pressures because he buys feed from global markets.
But Mr Jones said there was "a slight glimmer of hope for the next few months" because of the cost of fuel and diesel had started to fall.
How can I save money on my food shop?
- Look at your cupboards so you know what you have already
- Head to the reduced section first to see if it has anything you need
- Buy things close to their sell-by-date which will be cheaper and use your freezer | Inflation |
Muthoot Finance Q2 Results Review -Net Interest Margins Declined Further; Slow Gold Loan Growth: IDBI Capital
Gold holdings increased by 1% QoQ (up 3% YoY) to 183 tonnes while loan per 1gm of gold has increased by 1% QoQ to Rs3,771.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
IDBI Capital Report
Muthoot Finance Ltd. reported further decline in net interest margins led by rise in cost of funds. However, management guided for spreads to be maintained in the range of 9 -10% in FY24. Gold loan grew slowly by 2% QoQ (versus 7% QoQ Q1 FY24) due to lower disbursements.
Overall assets under management growth stood at 20.6% YoY versus 19% YoY (Q1 FY24) due to base effect.
Muthoot Finance's management maintained AUM growth guidance of 15% growth for FY24. Asset quality improved as non-performing assets sold to asset reconstruction company (first time in Company history).
Net interest income declined by 2% QoQ led by decline in margins; Provisions declined by 86% QoQ as asset quality improved; profit after tax grew by 2% QoQ.
We maintained estimates as guidance remains intact and maintain ‘Hold’ rating with target price of Rs 1,300, valuing it at two times price/adjusted book value FY25E.
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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Banking & Finance |
A review of veterinary services in the UK has been launched over concerns that pet owners could be paying too much.
The Competition and Markets Authority (CMA) said vet fees were rising faster than other goods and services during the cost of living crisis.
When pets need urgent treatment, owners may not have all the information to decide on the best deal, the CMA said.
The vet industry is worth £2bn after pet ownership rose to two-thirds of UK households during the Covid pandemic.
Pet owners often did not know the price of treatments until after their appointment, leading them to foot "eye-watering" bills, consumer group Which? found during its work with the CMA.
It also said people had difficulties shopping around for cheaper medication, and called for a more competitive sector to provide cheaper drugs.
The coronavirus pandemic saw more people working from home and now about 60% of households have a pet, the CMA said.
But now many owners are struggling with squeezed household budgets as price rises reach near-record highs, meaning more needs to be done to make sure vet cost are fair, it said.
The CMA said that when pets need urgent treatment, owners may not receive full information to make informed decisions at what can be a distressing time.
George Lusty from the CMA told the BBC's Today programme that the costs of specific treatments, such as booster jabs, were rising rapidly.
"We're seeing that most people are paying about £45 for an individual booster jab. But there's many other services and costs that people cannot have predicted and they can find themselves unexpectedly facing some really high bills
"When other household bills are going up very steeply at the moment we want to do everything we can to make sure that people can predict how much it's going to cost to see a vet - both the routine stuff but also if there's a crisis."
The CMA was also concerned about changes in ownership of vet practices in recent years.
Independent practices accounted for 89% of the UK veterinary industry in 2013 - but that had fallen to about 45% by 2021, said the CMA.
"In some cases, a single company may own hundreds of practices and it may be unclear to people whether their vet is part of a large group", the CMA said. "This could impact pet owners' choices and reduce the incentives of local vet practices to compete".
Last week, the Celia Hammond Animal Trust said a shortage of vets due to Brexit means people are struggling to get their animals neutered.
Ms Cardell said: "There has been a lot of consolidation in the vet industry in recent years, so now is the right time to take a look at how the market is working."
The CMA would like to hear from pet owners, veterinary surgeons, veterinary nurses, practice managers and veterinary businesses as part of the review. It said it will provide a further update and its next steps in early 2024.
The CMA's review follows its annual plan which sets out that the regulator "will act in areas of essential spending and where people are under particular financial pressure, such as accommodation and caring for ourselves and others".
Are your vet bills on the rise? You can get in touch by emailing [email protected].
Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways: | Consumer & Retail |
- Trump plans to call Palm Beach real-estate broker Lawrence Moens at his NY fraud trial next week.
- Moens has sworn Elon Musk, Bill Gates, and "kings" would pay $1B for the club, where he's a member.
- On Friday, the judge OK'd Moens' testimony despite the state saying it will waste "an entire day."
Elon Musk, Bill Gates, and "kings" would pay $1 billion dollars for Mar-a-Lago, according to a Palm Beach real-estate broker whom Donald Trump plans to call to testify next week, as an expert defense witness in his New York civil fraud trial.
"It's like a fantasy list," the broker, Lawrence Moens, said in a pre-trial deposition over the summer, describing the dozen-or-so ultra-billionaires he thinks would spring that high for the property.
"I could dream up anyone from Elon Musk to Bill Gates and everyone in between," he told lawyers for the state attorney general's office during the July deposition, previewing next week's trial testimony. "Kings, emperors, heads of state."
"If they want the best house in the country, that would be one of the top two or three that would be available if they were for sale," he added, according to a transcript.
"I wish he'd let me sell it, but it's not for sale," he said.
Moens is scheduled to testify on Trump's behalf Tuesday in the ongoing trial, where lawyers for state Attorney General Letitia James are trying to prove the former president exaggerated his net worth by as much as $3.6 billion a year in a decade's worth of financial statements to banks, insurers and tax officials.
Mar-a-Lago is chief among those exaggerations.
The AG's office alleges that as part of an effort to trick banks into charging him better interest rates, Trump intentionally valued the property at astronomical levels, saying it was worth as much as $739 million. That's the number he used in 2018, when state officials say it was only worth $25 million.
In doing so, the state alleges, Trump relied on the false premise that Mar-a-Lago was an unrestricted property. Trump misrepresented that he could develop the 17 waterfront acres even though the former president had personally signed deeds donating away his residential development rights for tax purposes, the state alleges.
Trump has fixated on the value of Mar-a-Lago during the trial's nine weeks, as a matter of personal pride and as part of his defense that his net-worth statements actually underestimated the value of his properties.
What's at stake
The trial judge, New York Supreme Court Justice Arthur Engoron, already found in a pretrial ruling in September that Trump's net-worth statements were frauds.
At issue now, in the non-jury, civil trial, is whether the over-valuations of Mar-a-Lago and other Trump properties fit the legal definition of fraud under New York criminal law, and if so, how many millions in ill-gotten gains he must pay back.
The state alleges that over the course of a decade, Trump pocketed more than $250 million in interest savings and property sales proceeds that he'd never have had if he'd told banks what his assets were really worth.
The state fought hard on Friday against Trump's side calling Moens as an expert witness.
Kevin Wallace, a lead lawyer on the case for James, called the broker "a friend of Trump" whose valuation of the club can't be recreated or tested.
The judge had already found in his ruling from September that those deed restrictions severely limited the club's value, Wallace noted.
"The defendants now want to spend a whole day arguing that you're wrong," he complained.
"And that Mar-a-Lago should be valued at $1 billion because Elon Musk might want to go to Palm Beach," he added, sounding exasperated.
"And that's what we're going to do," the judge responded. "I'm very reluctant to allow this but it's the defense case."
An unbiased witness?
Moens is likely to be questioned on the witness stand Tuesday about whether he can give a truly unvarnished view of Mar-a-Lago's worth. He and Trump go back a long ways, and a lot of money has passed back and forth between them.
In 2008, Moens brokered a record $95 million sale of Trump's starter Palm Beach oceanfront mansion to a Russian fertilizer billionaire.
"And did you receive a commission?" Moens was asked during the July deposition.
"Well, it was a few million dollars," he answered. "I don't remember the amount."
"Do you recall receiving $225,000 for consulting work" from Trump, an attorney for the AG, Alex Finkelstein, asked the broker, showing him Trump Organization documents saying that money crossed hands in 2014.
Moens answered that he'd have to check his records.
Moens also testified that he has been a broker for Eric Trump, and a member of Mar-a-Lago since 1996, months after it opened. He knows Donald Trump, Jr., and Ivanka Trump, who he testified was "a very lovely person."
"I've known her since she was a little girl," Moens said.
He was more circumspect about Trump, though.
"He's someone I've known for probably three decades, maybe longer," he told the state's lawyers, when asked how he'd describe his relationship to the former president.
"How do you describe the word 'friend?'" the state's lawyer then asked.
"I have very few friends, so I would describe them as people that are very close to me, that I see often, that I spent time with, that I have a relationship with," Moens answered.
"Is Donald Trump one of those people?" the broker was then asked.
"I don't see Donald Trump enough or spend enough time with Donald Trump to call him a friend," he answered.
Asked "What would you call him?" Moens added, 'I'd like to think he's my friend, but I would call him someone that I've had an association with for many years." | Real Estate & Housing |
It’s time for banks and asset managers to start pushing Bitcoin to clean up its pollution, Greenpeace argues in a new report. The environmental organization wants to see Bitcoin change its code to slash energy consumption and greenhouse gas emissions. That’s a big ask, but Greenpeace argues that financial institutions could have an outsize influence on the Bitcoin network through its business dealings.
“The report focused on nine major financial institutions that are providing the glue that keeps the Bitcoin ecosystem together,” says Joshua Archer, who leads Greenpeace USA’s Bitcoin campaign. “Financial institutions have an important responsibility, but they’re currently ignoring the severity of the problem.”
“The report focused on nine major financial institutions that are providing the glue that keeps the Bitcoin ecosystem together”
Those financial institutions — including BlackRock, Vanguard, JPMorgan Chase, and others — controlled shares in Bitcoin mining companies that were valued at more than $1.35 billion in April 2023, according to Greenpeace’s report. Many of the financial companies are also expanding their services to make it easier for customers to deal in Bitcoin. That could increase the cryptocurrency’s already hefty environmental footprint, the report says. Crypto companies are facing a storm of scrutiny from regulators after FTX’s spectacular collapse. Democrats are also pressing companies on Bitcoin’s impact on power grids and climate goals. Despite those headwinds, Bitcoin’s emissions can still rise every time its price rallies.
Bitcoin is by far the most polluting cryptocurrency. That’s not just because it’s the biggest by market cap but because of the way the blockchain validates transactions. Bitcoin miners run data centers full of specialized machines that solve complex puzzles around the clock. They earn new Bitcoin this way, but all that puzzle-solving comes with energy and environmental costs. The cryptocurrency uses about as much electricity annually as the country of Sweden.
Greenpeace isn’t asking these companies to divest from Bitcoin. Instead, it’s pushing for the blockchain to switch to a new way of validating transactions that gets rid of energy-sucking puzzles. That’s what the second most popular cryptocurrency, Ethereum, did last year — drastically slashing its energy consumption and emissions in the process.
There’s been resistance to do the same thing with Bitcoin, though. Miners have already invested in their equipment and would be hard-pressed to throw it all away, for one. And to make the switch, every node on the network would need to be on board. That’s a tough sell for folks who might have bought into Bitcoin in the first place because it’s supposed to be decentralized — theoretically free from any single institution telling them what to do.
Greenpeace makes the case that financial institutions actually do hold sway. BlackRock is a leader in the pack when it comes to asset managers’ support for Bitcoin, according to the Greenpeace report. Its shareholdings in 18 Bitcoin mining companies were valued at more than $595 million in April. The report also “draw[s] a direct line from BlackRock’s Bitcoin mining investments to the revival of fossil fuel infrastructure.” For example, BlackRock is the biggest institutional shareholder in Greenidge Generation Holdings, a company that uses a previously shuttered gas power plant almost exclusively to mine Bitcoin.
Among banks, JPMorgan Chase & Co. was the leading Bitcoin supporter, according to the Greenpeace report. It controlled shares in 17 Bitcoin mining companies valued at more than $26 million in April and offers different products and services to help customers invest in Bitcoin. That contradicts the bank’s goal of helping the world reaching net zero greenhouse gas emissions by 2050, the Greenpeace report says. And Chase hasn’t been transparent about whether it includes emissions from Bitcoin in its carbon accounting — a problem for the financial sector overall, Archer says.
JPMorgan Chase didn’t immediately respond to a request for comment from The Verge, and BlackRock declined to give comments on the record. | Crypto Trading & Speculation |
Archean Chemical Q2 Results Review -See Bromine Volume Off-Take Improving In H2: ICICI Securities
Muted bromine business; salt steady
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Archean Chemical Industries Ltd.’s Q2 FY24 Ebitda dipped 19.5% YoY to Rs 955 million due to lower revenue in bromine business, while industrial salt revenue grew 57.1% YoY.
Archean Chemical's Ebitda margin has been severely impacted by lower bromine revenue mix which has much higher margins. The company expects bromine volume to improve in H2 FY24 with restocking and new customer addition. FY25 may have the benefit of commissioning of derivative plants where sampling has started.
However, our estimates have been impacted by lower bromine price assumption (now at $3.5/kg from $3.6/kg earlier), and cut in SOP volumes in the near term.
We cut our earnings per share estimates by 22.5% for FY24E and 12.8% for FY25E.
We trim our target price to Rs 660 (from Rs 750) with an unchanged FY25E PE multiple of 13 times. Maintain 'Buy'.
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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Chinese officials have launched an investigation into one of the country's biggest shadow banks, which has lent billions to real estate firms.
Zhongzhi Enterprise Group (ZEG) has an asset management arm that at its peak reportedly handled more than a trillion yuan ($139bn; £110bn).
Authorities said they are investigating "suspected illegal crimes" against the firm, in a statement on the weekend.
This comes days after reports that ZEG had declared it was insolvent.
The struggling firm reportedly told investors in a letter last week that its liabilities - up to $64bn - had outstripped its assets, now estimated at about $38bn.
While authorities said they had taken "criminal coercive measures" against "many suspects" it's still unclear who they are, and what role they play in the firm. The company's founder, Xie Zhikun, died of a heart attack in 2021.
ZEG is a major player in China's shadow banking industry, a term for a system of lenders, brokers and other credit intermediaries who fall outside the realm of traditional regulated banking. Shadow banking, which is unregulated, is not subject to the same kinds of risk, liquidity and capital restrictions as traditional banks.
China's shadow banking industry is valued at around $3tn. It often provides a financial lifeline to the country's property sector. The once-booming industry has been hit by a severe credit crunch, with some of the biggest firms now on the brink of financial collapse.
"For several decades China been chasing this property bubble - and in order to create this bubble, or to fuel growth in China, they needed capital. So they started getting a lot of money from individual investors offering very, very high returns. And it worked for quite a while because the property prices were going up and it's a win-win for everybody," says Andrew Collier, a shadow banking expert at Orient Capital Research.
Informal lending has always existed in China's economy, but shadow banking really took off in the aftermath of the global financial crisis in 2008, when credit was scarce.
Given China's slowing economy and the crisis in the real estate sector, Mr Collier says the troubles at ZEG may just be the start of a bigger problem: "This is going to spread further into other forms of shadow banks and potentially into the actual real brick-and-mortar banks."
Embattled property developers currently owe Chinese banks money worth as much as 30% of the banks' assets.
"That is going to take a long time to unwind," Mr Collier says.
China's property sector makes up a third of its economic output. That includes houses, rental and brokering services, as well as construction materials and industries producing goods that go into apartments.
The latest figures show that China's economy expanded by 4.9% in the three months between July and September. That is slower than the previous quarter, when the economy grew by 6.3%. | Banking & Finance |
House Republicans released bank records of President Biden's brother, James Biden, Friday, that they argue raise more questions about whether President Biden personally benefited from his family's business ventures.
Bank records released by the GOP-led House Committee on Oversight and Accountability revealed a $200,000 personal check paid to Mr. Biden from his brother, James Biden, and sister-in-law, Sara Biden. The personal check, which was labeled a loan repayment, was issued before Biden's presidency, on the same date in 2018 when Americore Health LLC, a healthcare company that manages rural hospitals across the United States also wired a $200,000 loan into James Biden's PNC bank account.
In video remarks posted to X, Rep. James Comer, the Republican chairman of the House Oversight and Accountability Committee claimed, "Joe Biden's ability to be paid back by his brother depended on the success of his family's shady financial dealings."
In a bankruptcy filing last year, Americore Health LLC claimed James Biden received hundreds of thousands of dollars in loans from the company on the promise that his last name "could 'open doors' and that he could obtain a large investment from the Middle East, based on his political connections."
After Americore Health LLC later filed suit for non-payment, James Biden agreed to a settlement payment with Americore Health LLC for $350,000.
James Biden's attorney took issue with the way the GOP-led panel has described the check.
"The Oversight Committee's description of the $200,000 check is highly selective and misleading," said Paul Fishman, attorney for James Biden. "The Committee has the bank documents that show both the loan Jim received from his brother in January 2018 and the repayment by check six weeks later. At no time did Jim involve his brother in any of his business relationships."
This latest document release comes after Rep. Comer pledged to "continue to follow the money" in its investigation into the Biden family's businesses, even as the House remains in disarray, without an elected speaker for over two weeks. Shortly after Rep. Kevin McCarthy was ousted as speaker, Comer asserted the Oversight Committee would continue to "read emails, text messages, put together timelines trying to get people to come in."
In September, the Oversight Committee said it had "uncovered how the Bidens and their associates created over 20 shell companies – most of which were created when Joe Biden was vice president – and raked in over $24 million dollars between 2014-2019," adding committee investigators had "identified nine members of the Biden family who have participated in or benefited from these business schemes." President Biden was not among those named by the committee.
The House of Representatives remains paralyzed, and Republicans, who are in the majority, are back to square one, afteras their speaker nominee following his third failed attempt to win the speakership Friday. Republicans will try again to settle on a candidate Monday, nearly three weeks after Rep. Kevin McCarthy first lost his speakership earlier this month.
"It's no coincidence they rushed out a new distraction mere minutes after yet another failed Speaker vote," Ian Sams, White House spokesman for oversight and investigations said in a statement to CBS News.
"After rummaging through thousands of pages of a private citizen's bank records, they have again turned up zero evidence of wrongdoing by President Biden – and that's because there is none."
for more features. | Banking & Finance |
- The U.S. State Department is now processing routine passport applications in seven to 10 weeks, an improvement from earlier this year.
- The State Department issued a record number of passports during the 2023 fiscal year.
- Delays are likely to ease further by year end.
Long delays to get a new U.S. passport have eased from earlier in 2023 but haven't yet returned to their pre-pandemic baseline.
As of Nov. 6, the U.S. State Department is processing routine passport applications in seven to 10 weeks, the agency said. It's processing expedited applications — which cost more — in three to five weeks.
Travelers who applied for a passport between March 24 and Oct. 1 — the peak of the backlog — waited 10 to 13 weeks for routine passport processing, and five to seven weeks for an expedited application.
After factoring in additional mailing time, the State Department had been recommending travelers apply at least six months ahead of planned travel or passport expiration.
"Passport processing times are definitely shorter than they were," said Sally French, a travel expert at NerdWallet. "[But] it's still a really long period of time if you're trying to jump on some sort of last-minute airfare deal" like ones typically offered on "Travel Tuesday," which falls on Nov. 28 this year.
Passport processing delays resulted from high demand for international travel as pandemic-era health fears and travel restrictions loosened.
The State Department issued more than 24 million passport books and cards between October 2022 and September 2023, a record number during a federal fiscal year.
The agency has tried to cut the backlog by "aggressively" recruiting and hiring across passport agencies and centers, having passport staff log "tens of thousands" of overtime hours a month, and opening a satellite office to help process applications, it said.
"As more Americans are traveling internationally again, we are directing resources to meet the unprecedented demand seen so far in 2023," the State Department said.
Though delays have improved, they're not yet back to normal.
Before the pandemic, it took two to three weeks for expedited passports and six to eight weeks for routine passport processing, the State Department said.
"It's always been a fair amount of time," French said. "You've always needed to plan well in advance to get that passport."
The State Department anticipates additional updates to processing times later this year.
Passport demand generally fluctuates throughout the year. Processing times are typically faster during the slower season from October through December, according to the State Department.
A traditional passport — a passport book — costs $130. First-time applicants must pay an additional $35 acceptance fee.
Travelers can pay more for faster service. Expedited passport processing costs an extra $60.
Travelers can buy expedited delivery of a new passport book by mail — for delivery in one to two days — for an extra $19.53.
They can also send an application more quickly by purchasing Priority Mail Express service from the United States Postal Service. The price varies depending on the area of the country, according to the State Department.
In some circumstances, travelers may be able to speed up the process further.
Life-or-Death Emergency Service is available for people traveling abroad in the next three business days and who have a qualified emergency. Urgent Travel Service is for those traveling abroad within 14 calendar days.
U.S. passports are generally valid for 10 years. They're valid for five years if issued before age 16.
In some cases, Americans may not be allowed to travel even if their passport hasn't yet expired. Some countries disallow entry if a passport's expiration falls just a few months after a trip's end date.
Many countries in the Asia-Pacific and Middle East regions require at least six months of validity for permission to enter. Other areas, such as Hong Kong and Macau, require one month.
This is among the reasons why it's generally wise to consider renewing a passport a year out from its expiration date, French said.
You may also need to apply for a separate visa to enter certain nations, a process that requires additional time and planning. The State Department has information about passport and visa requirements for specific countries. | Consumer & Retail |
Mortgage rates will stay high for years and beyond end of most fixed-rate deals, warns former Bank of England boss as average deals could hit 6% within days
- Former Bank governor Mark Carney warns of 'higher longer-term interest rates'
- Inflation revealed next Wednesday at 7am and Bank rate next Thursday at 12pm
Britain will face high interest rates for years to come, a former Bank of England governor has predicted as concern continues over soaring mortgage deal prices.
Mark Carney, who ran the Bank from 2013 to 2020, warned 'big tectonic shifts in the global economy' will result in 'higher longer-term interest rates for a period'.
He said anyone who fixed 'just at the right time' and still has a low interest rate on their deal should 'recognise that there will be an adjustment over the medium term'.
His comments came as the average two-year fixed rate mortgage deal rose to 5.92 per cent today – up from 5.9 per cent yesterday and 5.49 per cent a fortnight ago.
It means the average two-year deal is now nearly at 6 per cent - and, if it continues to rise at a rate of 0.02 points per working day, it will hit that figure next Wednesday.
Data released by Moneyfacts also showed the average five-year rate rose to 5.56 per cent today - up from 5.54 per cent yesterday and 5.17 per cent two weeks ago.
Meanwhile the number of mortgage products available also increased today - now standing at 5,082, which was a rise from 5,018 yesterday and 4,967 a fortnight ago.
Experts have warned of a 'huge week' for mortgages as the latest inflation rate is released next Wednesday, before any change to the Bank's base rate one day later.
The Bank is widely expected to raise the base rate next Thursday from its current level of 4.5 per cent, marking the 13th consecutive rise in just 18 months.
Inflation is currently running at 8.7 per cent, with the latest figure due out next Wednesday
The Bank of England base rate is currently at 4.5 per cent and is set to rise further next week
Former Bank of England governor Mark Carney told ITV's Peston last night that 'big tectonic shifts in the global economy' will result in 'higher longer-term interest rates for a period'
Stronger-than-expected growth in wages and the UK economy has piled further pressure on the Bank to raise rates to curb inflation which stands at 8.7 per cent.
What Bank of England Monetary Policy Committee members have said about rates
The Bank of England is weighing up whether to raise interest rates for the 13th meeting in a row next week.
Here is a summary of recent comments by members of the Monetary Policy Committee (MPC).
MPC MEMBERS WHO VOTED IN MAY FOR 25 BASIS-POINT HIKE
ANDREW BAILEY, GOVERNOR
June 13: 'We still think the rate of inflation is going to come down, but its taking a lot longer than expected.'
He said British food price inflation had been slower to drop than global commodity prices, despite past reassurances from the Bank's contacts in the retail industry that prices would fall. 'We've been told for some time, you know, they've reached their peak, they're going to come down, the rate of inflation is going to come down. And then the contacts come back and say 'Sorry, we got that one wrong.''
May 23: On interest rates, he said: 'I can't tell you whether we're near to the peak, I can't tell you whether we are at the peak. I think we are nearer to the peak than we were.'
BEN BROADBENT, DEPUTY GOVERNOR
May 11: 'A lot of ... global prices are declining.'
'And we expect for that reason predominantly - so independently of the rate of unemployment - (that) that will bring down wage growth.'
DAVE RAMSDEN, DEPUTY GOVERNOR
May 18: 'There is more of a concern (among investors) about persistence of inflation (in Britain) and therefore an expectation that our short-term rate - set by us - will be higher. That feeds through into yields'
JON CUNLIFFE, DEPUTY GOVERNOR
Has not commented on monetary policy in recent months.
HUW PILL, CHIEF ECONOMIST
May 12: He said there was evidence of a 'more favourable pattern in terms of the inflation outlook' but 'there may be more work to do.'
'To the extend that we see elements of greater persistence, there may be scope, at least to continue with the tightening of policy we have at the moment.'
'If we were to see more evidence that inflation is falling and most inflationary pressures are easing ... then the outlook for interest rates would be different.'
CATHERINE MANN, EXTERNAL MPC MEMBER
June 12: She said central banks like the BoE could find it hard to communicate the end of their rate-tightening cycle. 'Fine-tuning is something that monetary policy is not very good at if the ultimate objective is to focus on inflation.'
'I called it the policy boogie ... you hike, you cut, you hold and you're just kind of giving signals that are hard to determine and hard for the market to understand why you're doing it.'
'Inflation expectations, in fact, are on the downswing even as some of these core and services prints have been more robust than we would have hoped for.'
JONATHAN HASKEL, EXTERNAL MPC MEMBER
June 12: He said the BoE is 'closely monitoring' indicators of inflation momentum and persistence, in an article for the Scotsman newspaper. 'My own view is that it is important we continue to lean against the risks of inflation momentum, and therefore that further increases in interest rates cannot be ruled out.'
May 25: 'I prefer to lean against the risks of inflation momentum. As difficult as our current circumstances are, embedded inflation would be worse.'
MPC MEMBERS WHO VOTED IN MAY TO STOP RAISING RATES
SWATI DHINGRA, EXTERNAL MPC MEMBER
June 13: 'The lags in monetary policy transmission imply that there is little we can do to affect inflation in the immediate future.'
'There are reasons to suspect that policy transmission will be slower than previous cycles.'
SILVANA TENREYRO, EXTERNAL MPC MEMBER
April 14: 'We need to be patient (to see the effects of past rate increases). We don't want to get burned. We don't want to get an ice-cold shower.'
Financial markets suggest interest rates have a one in three chance of hitting 6 per cent by the end of the year, and experts warn more mortgage pain will therefore be on the way.
Mr Carney told ITV's Peston show last night: 'One of the things that governments in the UK and Canada, elsewhere, have to get used to now is that they are going to be paying higher rates of interest for their debt for the foreseeable future.
'Not just measured in 12 months, 24 months, but actually, the big tectonic shifts in the global economy mean that we are likely to have higher longer-term interest rates for a period.'
He added that it was 'good working assumption' that if governments face higher long-term borrowing costs, so will consumers.
Mr Carney continued: 'If you have still a few years of low interest rates on your mortgage, if you fixed just at the right time as it turns out, recognise that there will be an adjustment over the medium term. It's a question of degree but direction is very clear.'
Now, mortgage brokers will be braced for two key announcements next week – the first being Office for National Statistics data on Consumer Prices Index inflation next Wednesday at 7am.
Then, the Bank will announce any changes to the base rate next Thursday at 12pm - with mortgage lenders having already prepared for a widely expected increase.
Gary Bush, financial adviser at MortgageShop.com in Potters Bar, Hertfordshire, told MailOnline: 'Mortgage lenders have priced in early for an increase in the Bank of England base rate on June 22 so 'hopefully', with fingers crossed, we should see some calm for at least the next week.
'With the inflation figure also coming out on June 21, next week is going to be a big week for UK mortgage finance and we are hoping, praying for a further sizeable drop in the inflation rate, which could lead to the Bank of England pausing at this next Monetary Policy Meeting.'
Charles Ayton, commercial director at London-based Largemortgageloans.com, added: 'Core inflation has to drop before swap rates do. Until this happens, the base rate and mortgage rates will stay higher for longer.
'Next week on the 21st we will know more. It is shaping up to be a huge week for the mortgage market next week.'
Lenders have rushed to hike their rates and withdraw entire ranges of deals in recent weeks amid predictions that the base rate could hit 6 per cent.
HSBC pulled its mortgage offers from the market for the second time in a week yesterday after the bank struggled to meet a flood of applications from borrowers. Its mortgage deals will be back on sale today at higher rates.
And one of Britain's biggest building societies, Coventry, announced it was suspending its residential and buy-to-let deals from the market at 8pm yesterday before launching new, more expensive products tomorrow.
Charley O'Neill, senior mortgage and protection broker at The Mortgage Mum, said today that the situation could be perceived as ‘scary’ by some observers.
Asked if she was expecting more lenders to follow HSBC's lead in increasing rates, she told BBC Radio 4's Today programme: 'Yes, yeah. We heard yesterday from HSBC that they were increasing their rates again - so new increased rates out on the market this morning.
'We found out yesterday afternoon that they were doing that. Obviously they've done that twice in a week at the moment, so it's quite a bit of a scary kind of sounding thing to everybody else.
'But they have been incredibly busy for the last week, so I think they've kind of got to their limits on how much they can lend on those rates that they released last week and that's caused them to have to pull away quite quickly.
'We are seeing other lenders increase - the majority of them are. However we have had a couple of people decrease their rates this week, not but a huge amount but there are some sort of positives filtering through as well.’
Asked why any lenders would decrease their rates, she said: 'They price based on how much business they want as well. So it may be that they weren't necessarily the cheapest on the High Street before and they've realised that actually they want to get a little bit more business so they can lower their rates to be able to attract more people in to borrow from them, so that's one reason they may have lowered the rates as well.'
Speaking about whether she is getting a sense from banks and lenders that things are going to calm down, Ms O’Neill added: 'It feels like we've got a bit of a way to go just yet.
‘There's no indication from anyone that's saying we're definitely not going to increase rates and it's definitely not going to happen. The Bank of England is due to look at their base rate again on June 22, so potentially that's impacting the rates at the moment. For now we're expecting them to continue to rise at the moment.'
Chancellor Jeremy Hunt warned the UK has 'no alternative' but to hike interest rates again to tame runaway inflation.
He said the Government would be unstinting in its support for the Bank of England 'to do what it takes' to slow the rate of price rises, which is now the 'number one challenge we face'.
Mr Hunt said: 'We understand there is real pressure on families with mortgages, on businesses with loans, as interest rates go up.
'In the end there is no alternative to bringing down inflation if we want to see consumers spending, if we want to see businesses investing, if we want to see long-term growth and prosperity.'
The Bank yesterday admitted that it had underestimated inflation and bowed to pressure to review its forecasts.
Lord Macpherson, a former permanent secretary to the Treasury, suggested the Bank will have no option but to raise interest rates so high that a recession becomes inevitable next year.
He criticised the Bank of England for being 'behind the curve on interest rates' and signalled further pain for homeowners as bond yields continue to rise.
How mortgage rates and deals are changing
TWO-YEAR FIXED DEAL
- TODAY Thursday, June 15: 5.92%
- Wednesday, June 14: 5.90%
- Tuesday, June 13: 5.90%
- Monday, June 12: 5.86%
- Friday, June 9: 5.83%
- Thursday, June 8: 5.82%
- Wednesday, June 7: 5.79%
- Tuesday, June 6: 5.75%
- Monday, June 5: 5.72%
- Friday, June 2: 5.64%
- Thursday, June 1: 5.49%
- Wednesday, May 31: 5.45%
- One month ago (May 15): 5.32%
- Nine months ago (Sep 2021): 4.24%
- One year ago (June 1, 2022): 3.25%
FIVE YEAR FIXED DEAL
- TODAY Thursday, June 15: 5.56%
- Wednesday, June 14: 5.54%
- Tuesday, June 13: 5.55%
- Monday, June 12: 5.51%
- Friday, June 9: 5.48%
- Thursday, June 8: 5.49%
- Wednesday, June 7: 5.47%
- Tuesday, June 6: 5.44%
- Monday, June 5: 5.41%
- Friday, June 2: 5.32%
- Thursday, June 1: 5.17%
- Wednesday, May 31: 5.12%
- One month ago (May 15): 5.02%
- Nine months ago (Sep 2021): 4.33%
- One year ago (June 1, 2022): 3.37%
Total mortgage products
- TODAY Thursday, June 15: 5,080
- Wednesday, June 14: 5,018
- Tuesday, June 13: 4,917
- Monday, June 12: 4,952
- Friday, June 9: 5,056
- Thursday, June 8: 4,831
- Wednesday, June 7: 4,597
- Tuesday, June 6: 4,707
- Monday, June 5: 4,686
- Friday, June 2: 4,888
- Thursday, June 1: 4,967
- Wednesday, May 31: 4,995
- One month ago (May 15): 5,284
- Nine months ago (Sep 2021): 3,890
- One year ago (June 1, 2022): 4,987
SOURCE: Data from Moneyfacts
The cost of UK government borrowing reached its highest levels since the financial crisis on Tuesday, exceeding levels seen in the aftermath of Liz Truss's mini-Budget last September.
Experts warn this will send further shockwaves into the mortgage market.
Analysis published in the Daily Mail today found homeowners with a £300,000 mortgage could see their annual payments rise by £13,200 by the end of the year compared with 18 months ago.
So far, the interest rate increases have added £9,564 a year – or £797 a month – for homeowners with a standard variable rate mortgage of £300,000, according to broker L&C Mortgages.
Around 1.6million homeowners have a SVR mortgage, which typically increase in line with the base rate.
But further shock increases to mortgage payments are on the way as rates continue to rise.
An increase in the base rate to 6 per cent by the end of the year, as widely predicted, would see repayments on a £300,000 mortgage jump by £13,231 a year, or £1,103 a month, compared to 18 months ago, analysis found.
The increases will pile further pressure on to households already struggling with soaring food, fuel and energy prices.
David Hollingworth, of L&C, said lenders could face even more pressure yet as borrowers will continue to rush to lock in rates.
Homeowners and buyers have raced to snap up deals before they disappear.
He said: 'As forecasts point to more base rate rises to come many will prefer the security of a fixed deal but the cost of that security is currently still climbing in what remains a turbulent market.'
Anyone opting for a standard variable rate (SVR) mortgage will be stung with sky-high costs as the average is currently 7.99 per cent, up from 3.59 per cent in December 2021, L&C said.
Around 1.6 million homeowners have a tracker or SVR mortgage, which typically increase in line with the base rate.
Jamie Lenox, a mortgage broker at Dimora Mortgages, said there was no end in sight for the turmoil in the mortgage market and warned there was more pain to come for homeowners.
'The mortgage market is looking so bleak. It is not the news the hundreds of thousands of homeowners will want to hear because they face a race to secure a deal before they rise even higher,' he said.
It came as official figures showed yesterday that the British economy bounced back over the spring as households splashed out despite a squeeze on family finances.
The Bank Rate is shown from its 0.1 per cent level in late 2020 to the current 4.5 per cent rate
The Office for National Statistics says the Consumer Prices Index inflation rate is 8.7 per cent
The Office for National Statistics said output rose by 0.2 per cent in April having fallen by 0.3 per cent in March.
The figures fuelled hopes that the UK will avoid recession this year even as the Bank of England hikes interest rates.
The ONS reported strong trade in pubs, bars and restaurants, which helped offset the negative impact of four days of strikes by junior doctors.
Ruth Gregory, deputy chief UK economist at Capital Economics, said the figures 'will further raise hopes that the economy will escape a recession this year' - unlike Germany and the wider eurozone.
But she added: 'With the full drag from high interest rates yet to be felt, it is too soon to sound the all clear.'
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Natco Pharma Q2 Results Review - Miss On Earnings: Dolat Capital
Traction in agro sales while domestic business declines sequentially
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Natco Pharma Ltd.’s Q2 FY24 results were below our estimates on account of lower than expected growth across segments.
Revenue stood at Rs 10.3 billion (below estimate– Rs 11.6 billion), grew by 138.7% YoY and declined by 9.6% QoQ. Ebitda stood at Rs 4.6 billion (below estimate – Rs 5.9 billion), grew by 380.6% YoY and declined by 20.9% QoQ.
Natco Pharma's Ebitda margin at 44.4% (below our estimate of 50.8%), expanded by 2235 bps YoY and contracted by 636 bps QoQ.
We downgrade our earnings per share estimates by 9.6%/12.6% in FY24E/FY25E assuming lower than expected Ebitda margin in agrochem segment and base business. Rolling over to FY26, we maintain 'Accumulate' with revised target price of Rs 858.
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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Rep. Jared Golden, D-Maine, unloaded on "radical left elitists" as he defended his vote against President Biden’s student loan forgiveness plan.
Golden’s leadership as co-chair of the moderate House Democratic Blue Dog Coalition was spotlighted by the Maine Beacon Friday after financial disclosures showed the group got a donation from student loan servicing giant Sallie Mae about two weeks after he voted against Biden’s plan.
He was one of just two Democrats to do so in the lower chamber.
"Sadly, this is what radical leftist elites are learning about ‘democracy’ these days — silence and destroy anyone who disagrees with your views or goals. I stand by my vote and my opposition to forking out $10,000 to people who freely chose to attend college," Golden said in a statement posted to X, formerly Twitter.
He did not directly address the Maine Beacon or Sallie Mae’s donation, though he linked the relevant article in his post. Golden dismissed the scrutiny as a product of social media outrage.
"The Twitterati can keep bemoaning their privileged status and demanding handouts all they want, but as far as I’m concerned, if they want free money for college, they can join the Marines and serve the country like I, and so many others, have in the past, and many more will in the future," Golden said.
"If they want a career and hard skills without college debt, they should join a union and enter an apprenticeship. But if they choose to attend college, they can pay back their loans just like working class people pay back home mortgages, car loans, and many other expenses that people choose to take out loans for."
A House Republican-led bill aimed at repealing Biden’s student loan proposal, which has since been struck down by the Supreme Court, passed the House nearly along party lines in May.
Golden and his fellow Blue Dog co-chair, Rep. Marie Gluesenkamp-Perez, D-Wash., were the only Democrats who voted with the GOP to pass it. The measure also passed the Senate with some Democratic support but was eventually vetoed by the president.
On June 14, the Blue Dog Coalition received a $5,000 donation from Sallie Mae, according to public financial disclosures. It’s the maximum amount allowed under current law.
Biden has pledged his administration would pursue alternative pathways aimed at student debt forgiveness. | Banking & Finance |
Scrapping the HS2 rail link to Manchester would be a "gross act of vandalism", the former chancellor, George Osborne, has said.
Writing in The Times, Mr Osborne and Lord Heseltine said cancelling the extension would be an "act of huge economic self-harm".
The government has refused to guarantee that the high-speed line will continue between Birmingham and Manchester.
The BBC understands a decision on HS2 could be made as soon as this week.
At the weekend, Grant Shapps, the current Defence Secretary and former Transport Secretary, said it would be "crazy" not to review plans for HS2 given how costs have soared.
He told the BBC that the Ukraine war and a spike in inflation meant any government would need to make "serious decisions" on affordability.
HS2 is intended to link London, the Midlands and the north of England - the first part, between west London and Birmingham, is in mid-construction.
But the scheme as a whole has already faced delays, cost increases and cuts - including to the planned eastern leg between Birmingham and Leeds.
The last official estimate on HS2 costs, excluding the cancelled eastern section, added up to about £71bn.
Chancellor Jeremy Hunt said last week that costs were getting "totally out of control".
However, in The Times, Mr Osborne and Lord Heseltine said scrapping the route to Manchester, and potentially the link between west London and Euston station, would be "an act of huge economic self-harm, and be a decision of such short-sightedness that we urge the prime minister: don't do it".
"How could you ever again claim to be levelling up when you cancel the biggest levelling-up project?", they ask.
"It is difficult to conceive of a more damaging decision than cancelling a project that has been promised by six different British governments.
"Where would a cancelled HS2 leave the North and Midlands? Abandoned is the answer."
Labour has so far refused to confirm it would fund the HS2 line to Manchester if the Conservatives axe it.
On Sunday, Darren Jones, new shadow chief secretary for the Treasury, said the Labour party would "love to build the HS2", but said little "proper" information had been made available by the government. | United Kingdom Business & Economics |
Georgia Gov. Brian Kemp has declared a state of emergency in response to high inflation, blaming policies coming out of Washington, D.C.
Kemp is temporarily suspending Georgia's excise tax -- taxes enforced on particular goods, services and activities -- on motor and locomotive fuel, his office said in a press release on Tuesday.
"From runaway federal spending to policies that hamstring domestic energy production, all Bidenomics has done is take more money out of the pockets of the middle class," Kemp said in the press release. "While high prices continue to hit family budgets, hardworking Georgians deserve real relief and that's why I signed an executive order today to deliver it directly to them at the pump."
He added that his administration will work with Georgia's General Assembly "to help Georgians weather the economic headwinds caused by this president, his administration, and their allies in Congress."
Kemp's executive order goes into effect at Midnight on Wednesday and lasts until Oct. 12.
Consumer prices increased 3.2% in July compared to a year ago, according to the Bureau of Labor Statistics.
Core inflation, which strips out volatile food and energy prices, rose 4.7% in July compared to a year ago, particualrly because price increases for commodities like new vehicles and housing stand above the overall inflation rate.
The U.S. Department of Labor will release the latest inflation numbers on Wednesday.
The governor said Georgia residents will save "31.2 cents per gallon of gasoline and 35 cents per gallon of diesel fuel" under the state of emergency.
In March 2022, Kemp signed legislation suspending the state's gas tax following Russia's invasion of Ukraine, which led to a spike in gas prices across the country.
During that 10-month suspension, Georgians saved $1.7 billion at the gas pump, Kemp said in Tuesday's press release. | Inflation |
Labour's deputy leader has refused to promise to raise the state pension in line with the "triple lock" if her party wins power.
Angela Rayner said it could not commit to the policy, under which pensions rise by the highest of prices, average earnings or 2.5%, until an election.
She added it would need to inspect the country's finances before deciding.
PM Rishi Sunak has also refused to say whether it will be in the next Conservative election manifesto.
He has confirmed, however, it remains current government policy, signalling that it will be used to decide the next year's pensions increase.
It comes as new earnings figures published on Tuesday show the increase, to apply from April 2024, will be at least 8.5%.
Both Labour and the Tories have committed to maintaining the triple lock at every election since the Conservative-Lib Dem coalition government first made the pledge in 2010.
But rising inflation over the past year has made the promise more expensive for the government to maintain, whilst the UK's ageing population has raised questions over its long-term viability.
Asked whether Labour would recommit to the policy ahead of the next election, expected next year, Ms Rayner replied: "We will have to see where we are when we get to a general election and we see the finances.
"We will not make unfunded spending commitments, because Liz Truss did that and she crashed the economy," she told BBC Breakfast.
A Labour Party spokesperson said the party wanted the government to stick to its commitment to maintain the triple lock. They added it was "usual practice" for Labour to see the public finances before making manifesto commitments.
In June, a spokesman for Labour leader Sir Keir Starmer told reporters people could expect to see the party continue its support for the triple lock if it enters government.
The same month, Work and Pensions Secretary Mel Stride said a commitment to maintain the triple lock would "almost certainly" be in the next Tory manifesto.
Labour's pensions predicament
For some time now, Labour's position on the triple lock has been that it won't call for it to be scrapped - but if the government decides to ditch it, then Labour would not commit to restoring it.
That's because this would then clash with the one thing that is a cast-iron commitment from the opposition: not making unfunded spending commitments.
But this formulation hasn't been tested in the glare of publicity, and amid a debate in Conservative ranks about the triple lock's future.
And it is proving tricky.
If Angela Rayner had said "we'll keep it if the Tories do" - essentially the party's position - it would look like Labour was following and not leading.
So she said Labour would have to look at the books before committing - but that it looks like the party is watering down its 2019 manifesto commitment to pensioners.
So the Conservative-supporting papers that would denounce unfunded spending commitments will now also happily denounce Labour for putting a question mark over the future income of pensioners.
And even the most loyal trade union leaders - never mind the Labour leadership's critics - at the TUC conference are calling for an unequivocal promise to keep it.
Under the annual pensions-setting process, the government normally decides in the autumn on the increase that will apply from the following April.
Being committed to the triple lock therefore requires the government to make an unknown spending commitment, since it ties the cost of pensions to future inflation data it cannot forecast precisely.
The figure used to measure rising prices - the CPI figure for September - is unlikely to be higher than the 8.5% figure for average earnings announced on Tuesday.
It means the cost of pensions next year could be around £2bn higher than estimated at the March Budget, when it was estimated that pensions would have to rise by just over 6%.
'Runaway train'
The Institute for Fiscal Studies (IFS), a think tank, has estimated that maintaining the triple lock could cost an extra £5bn and £45bn per year, on top of inflation, by 2050.
Writing in the Times, former Tory leader William Hague urged the two main parties to give themselves the "space" to change stance on the triple lock, calling it "unsustainable" in the long term.
He said neither party could afford to "commit electoral suicide" by promising to scrap it alone, but "sometimes in politics, you have to help each other a bit".
"Everyone on a runaway train has a common interest in letting someone fix the brakes," he added. | United Kingdom Business & Economics |
Sam Bankman-Fried’s ex-girlfriend Caroline Ellison confronted the disgraced crypto titan in court Tuesday — matter-of-factly telling jurors that he bears the blame for deciding to steal billions in FTX customer funds.
“He directed me to commit these crimes,” Ellison said in Manhattan federal court, during her highly-anticipated testimony at a trial where Bankman-Fried faces criminal fraud charges stemming from the November 2022 disappearance of $8 billion from his now-bankrupt cryptocurrency exchange.
Ellison, 28, also set the record straight on why her on-and-off-romance with the fallen crypto king, 31, ended — accusing him of being emotionally distant and not devoting enough attention to their relationship during their time living together inside a $35 million Bahamas penthouse.
“There was a general theme that I sort of wanted more from our relationship,” Ellison told jurors. “I sort of felt like he was distant or not paying attention to me.”
The Stanford-educated math whiz disclosed that the pair first slept together in the fall of 2018, and went on to date for about a year, from summer 2020 to summer 2021.
During the entirely of the relationship, Bankman-Fried “was also my boss at work, which created some awkward situations,” Ellison testified.
Bankman-Fried — who was prone to crunching the numbers on every aspect of his life — bizarrely boasted while they were dating that there was a “five percent chance that he’d become president some day,” Ellison told the court.
“President of what?” asked federal prosecutor Danielle Sassoon.
“The United States,” answered Ellison.
Wearing thin rectangular glasses, a mauve dress and a gray blazer, Ellison did not make eye contact with her former flame as she entered the packed federal courtroom in lower Manhattan just before 1 p.m.
When Sassoon asked her how she knew the former crypto golden boy, Ellison said that they “dated for a couple of years,” later specifying that the relationship unfolded on and off between the summer of 2020 and spring of 2022.
Ellison was then asked whether she committed crimes as the CEO of Bankman-Fried’s crypto hedge fund Alameda – which the feds say stole $8 billion of FTX users’ deposits to pay off lenders.
“Yes,” said Ellison, who has pleaded guilty to her role in the scheme and is testifying in the hopes of receiving a more lenient sentence.
Sassoon asked Ellison to describe Bankman-Fried’s involvement in the alleged scheme.
“He was originally the CEO of Alameda, and after, the owner of Alameda, and he directed me to commit these crimes,” said Ellison, who spoke slowly and clearly during most of her testimony.
Despite their whirlwind romance, Ellison testified that Bankman-Fried did not increase her $200,000 base salary after appointing her to run Alameda as co-chief executive in October 2021 — while the pair were on a “break,” Ellison said.
Ellison did receive a bonus worth $20 million while heading the fund, she testified. But that sum, though staggering, is far less than what Bankman-Fried paid himself and FTX co-founder Gary Wang during the same time period.
Bankman-Fried also denied Ellison’s request to own a portion of Alameda even after she took over as sole CEO, and continued calling the shots in the fund’s big decisions — including to use FTX customer funds without disclosing it, she testified.
“I handled day to day decisions, but for any major decisions, I would always run it by Sam,” Ellison said.
Ellison first had a bit of trouble identifying Bankman-Fried – who has shed his signature outfit of a T-shirt and cargo shorts for a suit and his unruly hairstyle for a new, shorter hairdo.
But after standing up from the witness chair and looking around for a full minute, she finally picked out her ex-beau sitting with his lawyers at the defense table.
“He’s over there, wearing a suit,” she said, gesturing at her former lover with her hand.
Ellison walked right by Bankman-Fried to leave the courtroom for a lunch break and at the end of the day Tuesday
Both times, Bankman-Fried started straight ahead and didn’t make eye contact with her.
Ellison is just the latest former FTX insider to testify against Bankman-Fried.
Wang – who has also pleaded guilty on fraud charges and is cooperating with the feds – has already testified that Bankman-Fried directed him to write computer code allowing Alameda to withdraw “unlimited” FTX user funds, with consumers left in the dark.
Adam Yedidia, a former FTX developer, told jurors that he resigned from the company — days after texting his former boss, “I love you, Sam” — when he discovered that the firm repaid its creditors using customer deposits.
“What Alameda did seemed like a flagrantly wrong thing to have done,” Yedidia testified.
Ellison is expected to resume her testimony Wednesday morning. | Crypto Trading & Speculation |
Gone are the days of collecting pay stubs, receipts, and government forms...hopefully. For the first time, the IRS will give taxpayers the option to go paperless for the 2024 tax season ahead of a more widespread digitization effort for the 2025 season.
The IRS announced the plan in a press release yesterday with the hopes that a push toward digital can cut processing time in half. With resources from the Inflation Reduction Act, starting with the 2024 tax season, taxpayers will have the option to go paperless directly through the IRS. The IRS says that filers will be able to submit all correspondence, non-tax forms, and responses to notices, 20 different tax forms, and 20 of the most common non-tax forms.
In 2025, the IRS will begin a more aggressive digital push, with 150 more non-tax forms going digital in both desktop and mobile formats. The service also says that they will digitally process all returns that tax returns are filed by paper and mailed in, while half of the paper-submitted correspondence, non-tax forms, and notice responses will be handled digitally. The IRS says it receives 76 million paper tax returns and related forms annually, while also handling 125 million pieces of correspondence and non-tax forms.
“Digitization has far-reaching implications for improving IRS service. Digitizing paper returns will eliminate errors that result from manually inputting data from paper returns, which will speed up processing, reduce storage costs, and allow IRS to focus more resources on customer service,” the IRS wrote in the release.
Like most things with the American government, however, the road very well may be bumpy and rife with hiccups. Last year, the IRS announced plans to install a biometric security check option via face recognition to allow filers to access their filing data more securely. After well-deserved backlash from the public and privacy experts, the service eventually walked back that decision just a few weeks later. At the same time, Americans famously have poor Internet coverage, which could throw a wrench in the already complicated filing process for millions of citizens across the country. | Personal Finance & Financial Education |
WASHINGTON -- The world's largest cryptocurrency exchange Binance and its founder Changpeng Zhao are accused of misusing investor funds, operating as an unregistered exchange and violating a slew of U.S. securities laws in a lawsuit filed by the SEC.
Filed in the U.S. District Court for the District of Columbia, the Securities and Exchange Commission lawsuit on Monday lists thirteen charges against the firm — including commingling and divert customer assets to an entity Zhao owned called Sigma Chain.
Binance is a Cayman Islands limited liability company founded by Zhao and the charges are familiar to practices uncovered after the collapse of the second largest cryptocurrency exchange, FTX, last year.
The lawsuit lays out the extent to which the firms owners knew of the alleged legal violations: "Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.”
SEC Chair Gary Gensler in a written statement that Zhao and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”
“The public should beware of investing any of their hard-earned assets with or on these unlawful platforms,” Gensler said.
In a social media post, Binance said that it has been cooperating with the SEC's investigation but said that the agency “chose to act unilaterally and litigate.”
“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously,” the company said in a Twitter post. “Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry.”
The lawsuit comes roughly eight months after the collapse of FTX, which was also accused of co-mingling customers' funds and investing the proceeds in high-risk investments that customers were unaware they were participating in.
U.S. prosecutors and the SEC charged FTX's founder Sam Bankman-Fried with a host of money laundering, fraud and securities fraud charges in December. His criminal trial is likely to be in the fall.
“The new complaint from the SEC against Binance is a laundry list of charges laying out exactly the same claims that many in the Bitcoin and crypto communities have made against Changpeng Zhao and his companies for many years. These practices of Binance have essentially been open secrets, so no one who operates in the space will be surprised by any of the charges,” said Cory Klippsten, CEO of Swan Bitcoin, a bitcoin financial services company.
U.S. regulators have gone after Binance before.
In March, the Commodity Futures Trading Commission filed an enforcement action against Binance and Zhao in the U.S. District Court for the Northern District of Illinois charging them with numerous CTFC violations.
The complaint also charges Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting Binance’s violations.
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AP Business Writer Ken Sweet contributed to this report from New York. | Crypto Trading & Speculation |
A hot potato: As Sam Bankman-Fried's trial concludes its second day, we learn that many FTX employees knew that Alameda Research had a backdoor into customers' wallets. However, when they voiced concerns, their cries went nowhere, and the problem was never fixed.
The Wall Street Journal notes that several anonymous employees who worked for FTX subsidiary Ledger X reported the issue to the company's Chief Risk Officer, Julie Schoening. Schoening's response seemed somewhat casual, considering the seriousness of the situation.
"There are less rigid rules [governing crypto], but yeah, we should clean up this sort of stuff," Schoening said before running it up the chain of command.
Her boss brought it up with FTX Director of Engineering Nishad Singh, and the buck stopped there with no action taken. The backdoor was reportedly a code that allowed Alameda to carry a negative balance with FTX. No other account on the platform could do this. At any time, Alameda could "borrow" up to $65 billion in crypto from customer funds.
"We gave special privileges to Alameda Research to allow it to withdraw unlimited funds [from FTX] and lied about it," a former FTX exec testified.– m a r c ð§ (@MarcHochstein) October 5, 2023
Banger coverage today from the @CoinDesk Crüe: @nikhileshde @realDannyNelson and @HeleneBraunn https://t.co/9ySURpwmC5
Singh was one of three executives arrested in connection with the scam. Alameda's CEO Caroline Elison and FTX co-founder Gary Wang were the other two. All three signed plea deals agreeing to testify against SBF. Constance Wang, FTX's COO, also agreed to testify against her former boss, even though she was never charged with a crime, so it's not looking too good for the former crypto tycoon.
Bankman-Fried recently leaked select portions of Elison's private journal to The New York Times. Prosecutors claim it was an effort to discredit Elison and taint the jury pool by painting her as a jilted lover. The stunt landed SBF in jail – he was formerly out on bail and under house arrest at his parents' home.
It was the last straw for the judge, who had previously shown leniency when SBF broke the terms of his bail conditions by contacting former associates to allegedly "get their stories straight." The judge could have revoked bail then but banned SBF's online and computer privileges instead.
Prosecutors have hammered SBF during the first couple of days of his trial, and it's not likely to let up. Meanwhile, defense attorneys are trying to paint SBF as an "MIT math nerd who didn't drink or party." The young entrepreneur just got overwhelmed running a company with such skyrocketing growth.
"[It was] like building a plane as you're flying it," SBF's legal team said.
I don't think that defense is gonna fly. | Crypto Trading & Speculation |
Subsets and Splits