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Lindsay Whitehurst, Associated Press
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WASHINGTON (AP) — A former contractor for the Internal Revenue Service was charged Friday with leaking tax information to news outlets about thousands of the country’s wealthiest people.
Charles Edward Littlejohn, 38, of Washington, D.C., is accused of stealing the tax return information and giving it to two different news outlets between 2018 and 2020, the Justice Department said in a statement. Littlejohn declined to comment when reached by The Associated Press, which also left a message for his attorney, Lisa Manning.
Both organizations published numerous articles about the tax information, some of which dated back more than 15 years, charging documents state.
The outlets are not named in charging documents, but the description and time frame align with stories about former President Donald Trump’s tax returns in The New York Times and reporting about wealthy Americans’ taxes in the nonprofit investigative journalism organization ProPublica.
READ MORE: What did we learn from Trump’s tax returns?
The 2020 New York Times report found Trump paid $750 in federal income tax the year he entered the White House and no income tax at all some years thanks to colossal losses. Six years of his returns were later released by the then-Democratically controlled House Ways and Means Committee.
A message seeking comment was left for the newspaper.
ProPublica reported in 2021 on a trove of tax-return data about the wealthiest Americans. It found the 25 richest people legally pay a smaller share of their income in taxes than many ordinary workers do.
A spokesman for the outlet declined to comment on the charges, adding that ProPublica reporters have previously said they don’t know the identity of the source. The stories sparked calls for reform and for an investigation into the leak of tax information, which has specific legal protections.
Littlejohn is charged with one count of unauthorized disclosure of tax returns and return information. He faces up to five years in prison if convicted.
The IRS declined to comment specifically on the case, but Commissioner Danny Werfel said “any disclosure of taxpayer information is unacceptable” and the agency has since tightened security.
Associated Press writer Fatima Hussein contributed to this story.
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Sep 27 | Banking & Finance |
Deutsche Bank saw Trump as ‘whale’ of a client, NY fraud trial documents show
Deutsche Bank eagerly pursued former President Trump as a “whale” of a client more than a decade ago, and over the years, their partnership became mutually beneficial, according to documents introduced by Trump’s legal team Wednesday during his ongoing fraud trial.
Trump’s counsel on Wednesday introduced 2011 emails between then-bank managing director Rosemary Vrablic and colleagues, where Vrablic expressed significant interest in working with the Trumps.
“We are whale hunting,” she wrote after meeting Donald Trump Jr., before she had met his father. The bankers used “whale” to refer to very wealthy clients, she testified Wednesday.
Trump’s relationship with Deutsche Bank is a core component of New York Attorney General Letitia James’ lawsuit against the former president, his business and several executives — including his adult sons. The state claims the Trump Organization falsely inflated and deflated the value of its assets on key financial statements to receive lower taxes and better insurance coverage, deceiving lenders and insurers in the process.
As part of its defense, Trump’s counsel has attempted to show that bankers were excited to work with the former president’s business and that there was “no victim” of its business dealings. According to a bank document prepared for Deutsche Bank’s then-co-chairman in 2013, shown as evidence at trial, the bank’s revenue from its business with Trump skyrocketed from around $13,000 in 2011 to a projected $6 million in 2013.
Trump testified earlier this month that his statements of financial condition — documents at the heart of the case that detail the value of his business’ various assets and were used to secure loans and deals — were “not really documents that the banks paid much attention to.”
“I’ve been dealing with banks for 50 years and probably know banks as well as anybody,” Trump said on the witness stand earlier this month. “I know what they look at; they look at the deal.”
But the attorney general’s office claims that the government was nonetheless misled and banks were shortchanged millions of dollars. Earlier in the trial, an expert witness hired by the state testified that the Trump Organization’s skewed financial statements may have cost banks more than $168 million in interest.
Judge Arthur Engoron has already found Trump and his business liable for fraud. The trial is addressing other claims, including conspiracy, insurance fraud and falsifying business records.
Four Deutsche Bank executives are expected to testify this week in the defense case, which is set to span until mid-December when Trump plans to retake the stand as the defense’s last witness.
The Associated Press contributed.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
The saga of Ripple Labs, the XRP token, and whether the sale of its crypto token constituted a securities law violation in the U.S. advanced today. In a ruling from the U.S. District Court of the Southern District of New York, Judge Analisa Torres gave a nuanced view on the matter.
In summary, after examining several different sales methods of the XRP token over time, and applying the Howey Test to each, the district judge approved the SEC’s motion for summary judgment with regard to the institutional sale by Ripple of the XRP token. This means XRP is a security when it’s used for institutional sales, according to Torres.
But, in an interesting twist, the judge then denied the SEC’s request for summary judgment as it related to programmatic sales of XRP, among other circumstances, including sales by two of the company’s former and current leaders. This means she ruled XRP as not a security when it’s sold to the broader public.
Basically, the verdict is a double-edged sword, but most of the crypto community is viewing it in a positive light, probably because they are mostly retail investors invested in the non-security side of the ruling.
For context, the SEC case against Ripple has been in court since December 2020, when the agency sued the company and its two executives Brad Garlinghouse and Chris Larsen for raising $1.3 billion in an alleged “unregistered, ongoing digital asset securities offering.”
The SDNY’s ruling comes as the SEC is ramping up enforcement actions against entities that it considers ran afoul of securities law in the United States, filing suits against international players in the crypto market, including Binance, and domestic companies, including Coinbase.
This new ruling makes it clear that beyond the SEC, there are more people who see illegal securities activity in Crypto Land, even if they do so less broadly than the SEC itself.
In the wake of the mixed ruling, XRP’s value rose 28% to 60 cents at the time of reporting. The last time that the token was worth so much was May 2022.
Why is the value of XRP rising when it did not achieve a complete legal reprieve? The legal risk of today’s ruling for XRP and Ripple Labs may be less than some investors feared, or perhaps an even partial win for XRP was better than anticipated. Either way, for holders of XRP, the judge’s decision is driving profits. | Crypto Trading & Speculation |
Real estate has become an increasingly popular choice among investors of just about all classes. Whether you’re a large investor purchasing entire properties, or a retail investor buying into REITs or ETFs, this asset class can be a strong choice for your portfolio. But, according to a recent publication from Origin Investments, there’s a risk that you should be aware of: weather.
Consider working with a financial advisor as you adjust your investment portfolio for changes factors.
“Multifamily investors are facing an unprecedented challenge of rising commercial property insurance rates due to weather-related losses and rising construction costs, among other factors,” Origin Investments said. “Respondents to the National Multifamily Housing Council’s 2023 State of Multifamily Risk Survey note insurance costs surging an average of 26% year over year. We are identifying even higher premium increases in the target markets that comprise our multifamily investments.”
Here’s what’s going on.
Real Estate Is a Profit-Based Investment
When you invest in real estate, particularly through something like an REIT, you typically invest in the operation and management of a portfolio. That is, the fund owns properties like residential apartments and commercial leases, and the profits generated by those businesses make up the portfolio’s returns.
Similarly, when you buy a property outright, you make money directly off its profits. While this is often reserved for large or institutional investors, many households own rental properties such as apartments or Airbnbs.
In all cases, the profits of the business are based on both its revenue (typically how much rent you can charge for a given space) against its costs. Rising costs eat into this performance, and that’s where Origin’s warning comes in. The real estate market is starting to get more expensive, and that’s bad for investors.
Weather Events Lead to Higher Costs
The problem is property insurance. As Origin notes in its article, global insurance premiums rose 4% in the first quarter of 2023. It was, they write, “the 22nd consecutive quarter of composite rate increases; quarterly increases peaked at 22% in the 4Q 2020.”
It gets even worse for property owners in the U.S., where rates increased by 17% in the first quarter of 2023.
These are large numbers but, if anything, they understate the issue. According to the Federal Reserve, premiums have soared to the point where it costs around twice as much to insure a property today compared with this time in 2003. These premiums make it more and more expensive to operate the same property each year. That means lower profits which, in turn, means reduced returns on a portfolio.
Behind all of this is a change in the weather.
As weather events grow more extreme, high-value insurance claims have become more common. Factors like heat, wind and extreme cold cause more damage than they once did, forcing property owners to file claims on issues from damaged pipes to structural support. At the same time, catastrophic events like fire and flood have begun to cause more total-loss claims, creating a surge in maximum-value claims against property insurance.
As Origin notes, over the past five years alone, weather-related insurance losses have increased by 162%. For investors and property owners, this has created three enormous new cost centers.
First, as noted, premiums have gone up. To cover their increased payouts, insurance companies have raised the price of insurance.
Second, many insurers have begun pulling back on coverage itself. From changing how they calculate damages to simply eliminating areas of coverage, many insurance companies have begun to alter their policies in response to changing risks. This forces property owners to seek specialty insurance or face exposure to the entire costs of a natural disaster.
Finally, even with insurance, a loss event still costs money. Damage can lead to lost revenue, high incidental costs and even reputational harm that reduces the long-term value of a property.
What Can Investors Do?
It will be difficult for investors to entirely protect themselves from this issue. To a certain degree, the market will self-resolve as property owners price their new costs into leases and other contracts. However this is only a partial solution. The new costs of insurance and loss-related events are too high to entirely pass along to customers.
For investors who own property directly, Origin advises taking steps to further insulate your business from a potentially volatile insurance market. Negotiate insurance rates as far in advance as possible, and potentially create different models for standard liability issues (such as slip-and-fall) vs. catastrophic loss scenarios (such as fire or flood). At the same time, look to buy or upgrade buildings around next-generation infrastructure such as fire-resistant materials and flood mitigation technology. While these steps increase up-front costs, they will typically save money over the lifetime of your investment.
Investors who have invested in funds, meanwhile, should look for these approaches in their portfolio. Invest in funds that have, themselves, pursued effective loss-mitigation strategies. When possible, ask about how the fund has protected itself from insurance and weather-related issues. Pay particular attention to the markets that a fund operates in. While no area is insulated from changing weather patterns, some markets are more exposed than others. If a fund owns real estate in particularly exposed places like California, Texas or Florida, among others, ask what steps it has taken to manage these risks.
Bottom Line
The costs of insurance and loss are rising. For investors, it means taking extra steps to protect yourself and your money. A recent report by Origin Investments highlights an emerging risk for real estate investors. As weather gets more extreme, the costs of insurance and losses from floods and other destructive weather events are rising, and that could take a bite out of your profits.
Tips on Investing in Real Estate
A financial advisor can help you explore how to integrate real estate investing into your financial plan. 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 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.
Real estate can still be a great investment for your portfolio. Investors looking to add some higher growth assets (while understanding that high growth can mean higher risk) may want to consider this booming field.
Photo credit: ©iStock.com/Andrii Yalanskyi, ©iStock.com/Bet_Noire, ©iStock.com/designer491
The post For Real Estate Investors, Costs Are Rising Due to This Unexpected Cost appeared first on SmartReads by SmartAsset. | Real Estate & Housing |
It's not even Halloween and some retailers are already slashing prices on goods from electronics to apparel, which means it's a good time for consumers to start their holiday shopping.
The 2023 holiday shopping season is expected to bear many of the hallmarks of pre-pandemic seasons, as consumers return to traditional behaviors such as picking out gifts in stores versus online, and retailers are better able to balance inventory levels.
To be sure, inflationary pressures are driving up the prices of goods, leading 42% of consumers to say they plan to spend more this year than last, according to an ICSC Holiday Intentions Survey.
Additionally, 68% of Americans say they are more tempted to spend impulsively during the holiday season than any other, according to a survey from budgeting app YNAB.
'Tis the season for going into debt
Impulsivity often results in overspending, which leads to regret in January, when consumers' find themselves in a financial pinch because of holiday bills. The YNAB survey showed that more than half of impulsive spenders have had debt over the past year as a result of the habit.
"So much impulsivity at the end of year is the result of a perfect storm. We have retailers holding sales and doing promotions you don't want to miss out on, plus peoples' emotions are heightened with festive displays," said Ashley Lapato, a YNAB personal finance expert and owner of @TheOrganizedWallet TikTok account.
"That brings a lot of stress, already having money spoken for when you get paid in January and the money goes to things you bought in November," Lapato added.
Here are some tips for controlling spending around the holidays and avoiding starting the new year in debt.
Set a budget, create a comprehensive list of spending
"Create a holiday budget by listing your planned expenses — gifts, and for whom; travel; decorations, and assign a dollar limit to each," said Jason Gaughan, head of consumer credit card products at Bank of America.
That list should keep track of all planned spending, including costs associated with gifts, like wrapping paper and shipping costs and other expenses, such as travel and entertaining costs. Also account for expenses such as holiday decorations, greeting cards and year-end tips for teachers and building staff.
"With Christmas lists, our brain goes to gifts first. Creating a more comprehensive list will help with impulsive spending. Add those all to the list so you have full picture of priorities you need to spend on this year," Lapato said.
As Americans return to pre-pandemic traditions, they can incur increased costs compared to the past couple of years.
"They are not just planning to buy gifts, but to spend on extras like home decor, furnishings and party apparel. We haven't seen people invest in those categories for the past few years, but we are getting back to normal trends where we are embracing the whole holiday," said Lupine Skelly, head of retail research for Deloitte.
Track your spending
Devise a tracking system that works best for you, whether it means keeping an envelope full of cash or using a debit or credit card.
"Some people use an envelope system with cash and they spend it down," said Emily Irwin, senior director of advice for Wells Fargo.
Others prefer to use credit cards and track their spending electronically.
"It allows me to categorize it and I pull it into a spreadsheet and I contrast it against the budget I set," Irwin said.
Download retailer apps
It can pay to download retailers' mobile apps, which often alert consumers to discounts and deals before they're announced to the general public.
"Along with price shopping, take advantage of technology. A lot of different retailers have wish list notifications and price-tracking tools so you can get notified if something goes on sale or comes back in stock," said Katie Thomas, who leads the Kearney Consumer Institute. "Getting tapped into technology at key retailers will be clutch for consumers."
Become a loyalist
Joining a retailer's loyalty program can also help consumers save.
"You can seek out bargains by signing up for loyalty programs, so you're first to know about deals from retailers, and you're first to be rewarded with free expedited shipping," said Adam Davis, managing director of Wells Fargo Commercial Capital. "If you're not in a position to buy today, keep an eye on items in case prices shift."
Shop early so you're not spending to "save"
Leaving holiday shopping to the last minute can easily lead to overspending.
"If you walk into a store under a tight deadline to buy something for an individual, whatever they have available and whatever the price is, that's what you're walking out door with. Try to avoid that at all costs," Wells Fargo's Irwin said.
If you're shopping online last-minute, that can lead to extra shipping costs, too. Consumers are tempted to spend more money to qualify for free expedited shipping when purchasing items just days before the holiday.
"That's what I like about getting started now, we're not racing the clock to spend more on expedited shipping. We're not playing mental games with ourselves such as, 'If I spend on this, I can get free shipping," Lapato said.
Give a gift card
If you want to spend a set amount on an individual, give them a gift card. That way, they get to choose exactly what they want while you get to stick to your budget.
"That's a way to avoid upping spending because of inflation," Skelly said.
for more features. | Consumer & Retail |
A list of transport projects to be funded using HS2 money, which included schemes that had already been built or were swiftly deleted, was intended only to be “illustrative”, the prime minister has said.
Speaking to the BBC, Rishi Sunak repeatedly dodged or refused to answer questions about the list, which was published alongside his announcement that the northern leg of the HS2 rail link would be scrapped.
Announcing the HS2 plan during his speech to the Conservative party conference in Manchester last week, Sunak promised that £36bn saved from it would be used for other road, rail and transport links.
Among projects cited were to upgrade an A-road link to Southampton which in fact goes to Littlehampton, to extend the Metrolink tram to Manchester airport, which happened in 2014, and several projects which were swiftly deleted from the list, including £100m for a mass transit system in Bristol, and reopening the Leamside line in County Durham.
Sunak told BBC Radio 2’s Jeremy Vine show that the list had not been mistaken or misleading, saying these were just examples of the sort of plans that might be included.
“There’s a range of illustrative projects that could be funded,” he said. “But ultimately, it’s going to be local leaders who are in charge. Rather than Westminster politicians dictating to areas what they should do, lots of money is going to be given to local areas for them to decide on their priorities.”
Sunak otherwise sought not to engage with questions on the transport projects. Asked why he had pledged to quadruple the number of trains between Sheffield and Leeds when there are already up to five an hour each way, he said: “I’m not sure I recognise the numbers.”
The interview came after a trip by Sunak to Nottinghamshire for a so-called PM Connect event, a break from the normal protocol of prime ministers refraining from such overtly political events when the opposition’s party conference is taking place.
Sunak’s interview took place shortly after Rachel Reeves, the shadow chancellor, had delivered her speech to the Labour conference in Liverpool.
Speaking during a visit to a Currys repair and customer service centre in Newark, Sunak also defended his HS2 decision. He faced a question from one worker who asked why people should vote for him given “the mess left by your predecessor”, winning a round of applause.
In response, Sunak reiterated the argument from his conference speech that despite being the fifth prime minister in 13 years of Conservative rule, he was the politician to oversee “change in the direction of our country”.
“I’m hungry to deliver that change for you, but I’ve got to tell you, that change is not just a function of which party is in power,” he said.
“I could spend a lot of my time talking about the past and what happened, and whatever I inherited and all the rest of it, which I’ve touched on, but that doesn’t help any of you.
“What we need to figure out is what’s the right thing for our country going forward. That’s what I’m looking forward to.” | Real Estate & Housing |
Two days before the government sets out its tax and spend plans in the Autumn Statement, the prime minister gave a speech about the UK economy.
We've been looking at some of his claims.
'I promised you we would halve inflation - we took the difficult decisions and we have delivered on that promise'
Rishi Sunak promised in January that inflation would halve by the end of this year, from its level of 10.7% in the last three months of 2022.
Inflation was 4.6% in October, which means the pledge is likely to be met unless there is a considerable increase before the end of the year.
However, Paul Johnson, director of the IFS, an influential economics think tank, has said: "The job of cutting inflation is for the Bank of England not the government."
The Bank of England has been raising interest rates to try to bring inflation down towards its 2% target.
An example Mr Sunak gave of his difficult decisions to control inflation was not giving big pay rises to striking public sector workers.
The IFS said the inflationary danger from public sector pay deals is that if they are much higher than in the private sector, those workers will also ask for bigger pay rises. However, Mr Johnson said "we're clearly not there".
'Energy bills have fallen significantly'
The cost of standard variable energy deals in England, Wales and Scotland is controlled by the energy price cap, which is set as a maximum price per unit by the regulator, Ofgem.
But it's still considerably more than the typical bill two years before (between October 2021 and March 2022) which stood at £1,277.
And when a typical household was paying £2,500 last winter, it was receiving £400 in energy bill support from the government, which is no longer available. Some groups can still get help with their energy bills.
'Borrowing £28bn a year as the Labour Party want to will make debt go up'
Mr Sunak was talking about Labour's plans to borrow in order to invest in green energy projects.
In September 2021, Labour said it would deliver an additional £28bn of capital investment each year to support the UK's transition to net zero.
However, in June, Shadow Chancellor Rachel Reeves said she would instead ramp up investment over time from a 2024 election win, reaching £28bn a year after 2027.
The figure now includes £8bn of existing investment in green schemes - making it £20bn of additional investment.
Ms Reeves has pledged to reduce national debt as a share of the economy, which is similar to the government's pledge.
The current level of the government's debt is high by historical standards at just under 100% of the size of the economy. | Inflation |
RBI's New Credit Risk Weights: SBI Card's Capital Adequacy To Take 400 Basis Points Hit
As SBI Card is well-capitalised, it does not need to raise equity. But it may raise tier-II capital, if the need arises, it says.
Capital adequacy of SBI Cards and Payment Services Ltd. is expected to decline by 400 basis points on account of the Reserve Bank of India's revised credit risk weights.
SBI Card was the worst hit non-banking financial company on Friday, with its stock price falling nearly 5% to Rs 734.20 apiece on the NSE.
Even as unsecured loans account for 100% of its assets under management, SBI Card said the RBI move is "positive to ensure prudent growth in unsecured lending". However, it may look to raise tier-II capital if the need arises.
As of Sept. 30, the capital adequacy ratio of SBI Card stood at 23.3%, with the tier-I capital at 20.8%.
"As of now, we are well-capitalised and well above the regulatory guideline of 15%... There is no need for us to raise equity," the company said in a regulatory filing on Friday.
With sufficient profit to fund growth, any hit would be managed owing to "enough sources and diversified lender base", it said.
Several analysts have flagged concerns on SBI Card's profitability going forward, given its exposure to unsecured credit and worsening asset quality. As of Sept. 30, 77% of the company's funding requirements came from bank loans, which implies a higher cost of borrowing for SBI Card.
"SBI Cards faces highest drag on tier-I CAR and highest dependence on bank funding," Jefferies said in a research note on Friday.
In its September quarter, SBI Card reported a net profit of Rs 603 crore, up 15% year-on-year from a year ago. Its gross non-performing asset ratio edged higher by 2 bps quarter-on-quarter to 2.43%, registering a consecutive rise in bad loans for the sixth quarter.
SBI Cards does not expect significant impact on cost of funds in FY24. However, it may "increase marginally in absolute terms on an annualized basis", the company said in the filing. | Banking & Finance |
Welcome back to Chain Reaction.
To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.
Hello, frens and cheers to the end of September!
We’re recovering from Disrupt 2023 and gearing up for the highly anticipated Sam Bankman-Fried trial, which starts on October 3. Keep an eye out for lots of coverage from us as it all unravels over a six-week period to determine whether the 31-year-old former CEO of FTX is guilty on seven counts of fraud and conspiracy. More to come.
As for other news, it’s been an interesting and somewhat slower week for the crypto community.
But, black hat hackers struck the industry, yet again. On Sunday, Hong Kong-based crypto company Mixin lost around $200 million to hackers in a breach. The hack on Mixin is the biggest theft in the crypto world in 2023, according to data maintained by Rekt. What was the second largest hack, you’re wondering? I can’t give everything away, so go read the story below.
This week in web3
- Worldcoin doubles down on emerging markets amid wider criticism (TC+)
- Hackers steal $200M from crypto company Mixin
- Yuga Labs security researcher warns of chilling effect after feds search phone at airport
- Telegram starts to look like a super app, echoing WeChat
- Why Solana, Polygon and Aptos expect the enterprise to drive mass adoption (TC+)
- Katie Haun believes now is a good time to invest in crypto
- Chris Lehane: The SEC isn’t handling crypto regulation ‘strategically’ (TC+)
- Akowe wants to fix Africa’s broken certificate system with blockchain
The latest pod
Tools for Humanity, which is the team building Worldcoin, raised $115 million in a Series C round back in May with investors like Blockchain Capital, a16z, Bain Capital Crypto and Distributed Global. In March 2022, Worldcoin raised $100 million at a $3 billion valuation.
The project was co-founded by OpenAI CEO Sam Altman with a three-part mission to create a global ID, a global currency and an app that enables payments, purchases and transfers with its token.
Worldcoin has been on a world tour since April, hitting major cities like Tokyo, Miami, New York City and San Francisco. It has also set up shop in major cities in countries like Kenya, India and China.
We dive into why someone would scan their eyes, alternate options and privacy concerns some skeptics have about the project.
We also talked about:
- The global adoption of Worldcoin
- Kenya “indefinitely” pausing Worldcoin iris scans
- The project’s biggest challenges for growth
- How AI can fit into Worldcoin
- Future opportunities and roadmaps
Follow the money
- On-chain leverage trading platform Avantis Labs raises $4 million seed round led by Pantera Capital
- Privacy-centric blockchain Fhenix raises $7 million in round led by Multicoin Capital
- Web3 dev platform Alchemy acquired blockchain indexing platform Satsuma
- Bitmain will invest $54 million in now-bankrupt bitcoin mining firm Core Scientific
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
What else we’re writing
Want to branch out from the world of web3? Here are some articles on TechCrunch that caught our attention this week.
- Bootstrapping is cool once again (TC+)
- The current labor market is a gold mine of talent for startups (TC+)
- What’s the best way to run a startup in a world full of advice? (TC+)
- This startup wants to verify your ID without storing your personal data
- Was tech’s ‘bull run’ simply a temporary surge? (TC+)
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more. | Crypto Trading & Speculation |
The Communities on the Edge report, published on Wednesday, reveals that nearly one in five jobs in coastal communities pay below the living wage and warns that levelling-up policies are at risk of failing to turn around decades of inequality. It points to the East of England, which has the third-highest regional average weekly pay despite parts having some of the lowest earnings in the country.
If anyone knows about the challenges of finding work in a coastal community, it is Sandy Lysaght.
The 38-year-old, from Great Yarmouth, Norfolk, has spent the last 19 years trying to find something permanent.
"When you do get an opportunity like a seasonal job or cleaning work it doesn't pay very well and as soon as the seasonal work ends, you've then got to go back on to universal credit and that is a struggle because of the wait time," she says.
Sandy, who left school with few qualifications, says a lot of the jobs are in engineering or involve driving - neither of which she can do - or travelling.
She is a single mother."I want to wake up and do something that I really enjoy that is worthwhile, but I feel that we're not looked at as being people that really deserve it, that we're not really worth it," she says.
A new report, from a group of researchers including the University of Essex, concluded that coastal communities were still in critical need, their deprivation hidden by the overall success of a region.
The report found that in the East of England, the average weekly wage is £549.
But in Great Yarmouth it is £479, in North Norfolk it is £430, East Suffolk £482 - and in Tendring, in Essex, it is £481.
The unemployment rate for the East of England is 2.8% - but in Great Yarmouth and Tendring it is 3.9%. The average disposable income in the region is £22,310 but in Great Yarmouth, it is £16,600.
Sandy works part-time as a well-being manager at the Bread Kitchen, a community group in Great Yarmouth that helps locals get work experience and qualifications in subjects like maths and English, animal care and horticulture.
"There is a desperate need, particularly here, where we've got some of the highest rates of deprivation and unemployment," says co-founder Cathy Cordiner-Achenbach, who is also a Labour local councillor.
"We're working with people with disabilities, people with mental health concerns and single parents.
"There are a lot of barriers that are stopping people being able to access mainstream training or employment.
"I think there is a sense here of feeling left behind and that, while people notice the offshore energy industry or the tourism, the people behind the seafront don't count any more."
Jamie Shackleton, 19, from Great Yarmouth, is getting support at the Bread Kitchen to pass GCSE maths.
He says he expects it to be a struggle to find work locally.
"For beginners looking for a job, they're probably going to find it hard to find anything within their possible reach," he says.
Scotty Rodger, 30, also says she has had little support to find work.
"In most places nowadays, if you don't have work experience, they don't want you," she says.
"They should just give you that experience while you're at that job."
Cathy says any extra spending is welcome - although she wonders if it is going to the right places.
And she says that after years of neglect, Great Yarmouth and other coastal communities in the region need a lot more.
The Department for Levelling Up, Housing and Communities said coastal communities "play a key role in levelling up and we continue to support them to improve their economies".
"Since 2012 we have invested over £229m through the Coastal Communities Fund to run 359 projects throughout the UK's rural and coastal communities helping to create jobs and boost businesses."
It added Levelling Up funding of £2.1bn announced earlier this month - to be shared across more than 100 places nationally - would help "to create better-paid jobs and spread opportunity right across the country". | Workforce / Labor |
Sophie Alcorn, attorney, author and founder of Alcorn Immigration Law in Silicon Valley, California, is an award-winning Certified Specialist Attorney in Immigration and Nationality Law by the State Bar Board of Legal Specialization. Sophie is passionate about transcending borders, expanding opportunity, and connecting the world by practicing compassionate, visionary, and expert immigration law. Connect with Sophie on LinkedIn and Twitter.
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Dear Sophie,
Our startup is looking ahead to next year’s H-1B lottery to fill open positions. We have three people we want to register for the lottery: Two of them are currently working for us as contractors abroad, and one is currently an F-1 student working for us on STEM OPT, whose work authorization will expire in June. When will the H-1B lottery registration and application fees increase? If selected in the H-1B lottery, how long does it typically take for an H-1B candidate abroad to get approval and come to the U.S. to live and work? Any changes we should keep in mind for the next H-1B lottery? Thanks!
— Hopeful for H-1Bs
Dear Hopeful,
I appreciate you reaching out to me with your questions — and applaud you for thinking ahead to sponsor international talent!
The U.S. tech industry is facing an unprecedented talent shortage. There are 9.6 million job openings in the U.S., but only 6 million people in the U.S. are unemployed and looking for work, according to Linda Moore, the CEO of TechNet, the national, bipartisan network of tech CEOs and senior executives. We chatted about this significant skills gap and job opening crisis facing the U.S. tech sector and how crucial immigration reform is to addressing the crisis.
“There’s a dire need for high-skilled immigration,” she said. “The biggest concern among employers is being able to find the right people with the right skills. Policymakers are starting to understand how much the skills gap is affecting our economic outlook and it’s only going to get worse. Our immigration system doesn’t allow us to attract the talent we need. Companies are forced to employ those people overseas. Those jobs and the tax revenue that goes with hiring people and having employees working in the U.S. are going to other countries.”
Let me dive into your questions to help you navigate the H-1B specialty occupation visa application process for attracting and retaining international talent.
What’s the latest on fee increases?
The registration and filing fee increases that the U.S. Department of Homeland Security (DHS) proposed earlier this year have yet to go into effect. The public comment period for the proposed rule ended in March. It’s unclear when DHS, which oversees U.S. Citizenship and Immigration Services (USCIS), will publish and implement the increased fees. Many anticipate the fee increases will go into effect sometime next year, making the cost of sponsoring international talent for work visas and green cards more expensive in the coming years.
According to this year’s proposed rule, the H-1B registration fee would increase to $215 from $10, and the H-1B petition fee would increase from $460 to $780. | Workforce / Labor |
Workers and their employers are paying a lot more for job-based health insurance this year.
The annual cost of family health insurance coverage at work soared to an average of nearly $24,000 this year, according to KFF’s Employer Health Benefits Survey, released Wednesday. That’s up 7% from last year.
Employees are shelling out an average of $6,575 for their share of the premium, up almost $500, or close to 8%, from last year, the annual survey found. Their companies are footing the rest of the bill.
“We have a huge premium increase this year. There’s just no other way to cut it,” said Matthew Rae, who co-authored the survey. “There are lots of affordability challenges for employer coverage.”
For single coverage, the average annual premium rose to $8,435, also up 7% from last year. Workers are picking up just over $1,400 of the tab, about $75 more than last year.
Though large, the jump in premiums is roughly in line with the rise in wages and inflation since 2022, as well as over the past five years, according to KFF. This is different from in the early 2000s, when premiums were soaring by double digits, but inflation and wage growth were relatively muted.
The tight job market has prompted companies to avoid watering down their health insurance coverage since it can be a recruiting and retention tool.
Deductibles remained essentially flat this year, which may reflect employers’ concerns about how much workers have to shell out when they need medical care, KFF said. The average annual deductible is roughly $1,735 among workers who have a deductible for single coverage.
“Employers want to keep offering good benefits to keep good people,” said Rae.
Still, workers should prepare for premiums to take a bigger bite out of their paychecks in coming years. Nearly a quarter of companies said they will increase employees’ premium contributions in the next two years, KFF found.
Higher costs at smaller firms
Workers at smaller firms typically pay much more for coverage than their peers at companies with at least 200 workers.
KDC Mailing & Bindery had to contend with an overall premium increase of about 13% for this year, said Steve Van Loon, director of operations at the Tempe, Arizona, firm, which has 42 workers.
The company, which only started offering health benefits in 2019 to be more competitive, raised workers’ premiums by 3% but had to hike its prices by as much as 5% to help it afford the increased cost. KDC covered the rest.
Next year, the company likely won’t be able to be as generous to its staff, Van Loon said.
“Our profit margins do not allow us to absorb these costs,” he said. “We would be out of business.”
Limits on abortion coverage
Large employers with workers in more than one state may face challenges in offering abortion coverage after the Supreme Court’s 2022 decision that ended the federal constitutional right to an abortion. Multiple states have adopted laws that prohibit or restrict abortion access.
One in 10 large firms with at least 200 employees said their largest plan does not cover legal abortions, KFF found. Another 18% said they only cover abortion under limited circumstances, such as rape, incest or health or life endangerment.
Nearly a third of large firms said they cover abortion in most or all circumstances, while 40% said they were unsure of their coverage policy, possibly because it was in flux or they were unaware of the details.
After the Supreme Court ruling, several companies said they would offer financial assistance to employees who had to travel to others states for abortions. Some 7% of large employers -— and 19% of companies with at least 5,000 workers — provide or plan to provide such reimbursement.
KFF did not ask these questions on abortion in prior surveys. | Workforce / Labor |
How to Access Capital in an Economic Downturn
Considering taking out a loan when economic hardship is on the horizon? Here's what you should know.
Opinions expressed by Entrepreneur contributors are their own.
Concerns that the U.S. is headed for a recession have been mounting for a while, especially among business owners. One survey found that eight out of 10 small business owners anticipate a recession will happen sometime this year.
Recessions affect most businesses in two ways — first, revenue takes a hit as consumers start holding onto their cash instead of spending. Second, tightening credit conditions limit the number of financial resources available to help businesses weather economic challenges.
Some businesses consider taking out a loan or line of credit when economic hardship is on the horizon, but is this the right move for your business?
Should you get a loan during a recession?
You may not like the idea of taking on additional debt and wonder if applying for a loan during a recession is a good plan, but there are situations where taking out a loan or line of credit is the smartest option.
You should start by considering how much cash you have on hand. If you're heading into an economic downturn with little cash, a business loan can provide a financial buffer. Access to cash will give you options for solving challenges, making staying profitable and committed to growth that much easier.
This is especially true since no one knows how long a recession will last. You may have enough cash to get you through the next six months, but that won't help if the downturn lasts two years or more.
Waiting until you desperately need money can significantly reduce your options. As a downturn approaches, lenders tighten their guidelines, and you may be unable to meet their inflated eligibility requirements amid economic hardship. If you think you may need additional capital, it's best to act sooner rather than later.
Lending standards are starting to tighten
Many companies struggle during recessions as demand falls and uncertainty about the future increases. They'll start to look for ways to increase capital, like taking out a business loan or line of credit, but this becomes a challenge since most banks will tighten their lending standards during an economic downturn.
As the economy worsens, banks face a higher risk when lending money. Most banks will only lend money to established businesses with strong credit histories and limited industry exposure to mitigate their risk of financial loss, which inflates eligibility criteria and makes it harder for entrepreneurs to qualify altogether.
Fortunately, banks and credit unions aren't the only lending institutions. Non-bank lenders don't follow the same guidelines as traditional lenders, so they can extend credit to a wide range of businesses, even during a recession.
Consider using a non-bank lender
A non-bank lender is a financial institution that isn't a bank or credit union. They lend money like traditional lenders but don't have a full banking license, and they don't offer things like checking and savings accounts.
There are advantages and disadvantages to going the non-bank route. While this type of lender tends to charge higher interest rates than banks or credit unions, they offer numerous quality-of-life improvements and specialized benefits, including online communications, streamlined underwriting processes, fast funding times, alternative financing solutions and more.
What you lose in the cost of capital is gained through speed and efficiency. For example, you can complete the application in as little as 15 minutes at some institutions, and many lenders provide same-day or next-day funding.
These loans also come with fewer stipulations about how you can spend the money, and the cost of capital can be offset with revenue-driving opportunities. For example, spending $10,000 on interest charges won't matter as much if you increase your revenue by $50,000.
Plus, as you continue to build a relationship with that lender and improve your business credit score, you'll be eligible for better rates in the future.
Start looking for business financing now
After the Silicon Valley Bank collapse in March, some economists lowered their economic growth forecasts for the year. The lending environment was already starting to weaken following numerous prime rate hikes, but the SVB crisis caused many banks to tighten their lending standards even further.
In particular, small banks have to be more cautious about lending money in an effort to preserve cash. Small to medium-sized banks account for roughly 50% of commercial and industrial lending, so this will impact a number of businesses.
Federal Reserve documents predicted that the fallout from the banking crisis would likely lead to a recession later this year, and it's unlikely that we'll see any significant improvements for at least two years.
If you anticipate needing funds in the coming year, you should start looking for business financing now. Although you might be apprehensive, a loan or line of credit can tide your business over until the economy improves and give you the capital you need to continue growing. | Banking & Finance |
Rishi Sunak has been accused of being out of touch with ordinary families after claiming the economy was looking up and people’s household incomes were “hugely outperforming” expectations despite the cost of living crisis.
On a flight to Japan for the G7 summit of world leaders, the prime minister said that despite consumers struggling with high inflation and the cost of food and energy, there were “lots of signs that things are moving in the right direction” with the economy.
Sunak also risked a row with his home secretary, Suella Braverman, by defending record numbers of people coming to the UK legally and refusing to commit to the Tories’ 2019 manifesto pledge to reduce net migration.
The chancellor, Jeremy Hunt, waded into the internal dispute, saying the government would maintain a “pragmatic” approach to immigration despite official data due next week being expected to show the numbers have increased by more than 700,000.
Sunak also insisted that Brexit was working by citing cheaper beer and sanitary products. It came as three big global carmakers called on the UK government to renegotiate the Brexit deal, saying rules on where parts are sourced threatened the future of the British automotive industry.
However, it was the prime minister’s upbeat assessment of the economy, when so many households are still feeling the pinch and could continue to do so for some time, that prompted criticism.
Labour’s Treasury spokesperson, James Murray, said: “Almost every word that comes out of the prime minister’s mouth shows how utterly out of touch he is and disconnected from the reality of life for working people in our country.”
Sunak told reporters on the way to the summit: “Economic optimism is increasing, consumer confidence is increasing, growth estimates are being raised.”
Official figures for real household disposable income growth had been “very pessimistic” but were now “hugely” better than predicted, he said. “That’s a very important measure of people’s living standards – hugely outperforming what people thought,” Sunak added.
Andrew Bailey, the governor of the Bank of England, struck a more downbeat note when he warned that the central bank would continue to increase interest rates – already at 4.5%, the highest rate since 2008 – if there were signs that inflation was remaining persistent.
Bailey blamed higher food prices and the tight labour market for continued inflationary pressure, and predicted that even when headline inflation falls as expected, these pressures “are unlikely to go away as quickly as they appeared”.
The Resolution Foundation said in March that typical household disposable incomes were on course to be lower by the end of 2027 than they were during the Covid pandemic, and last month Huw Pill, the Bank of England’s chief economist, said people needed to accept they were poorer.
Average living standards have been broadly stagnant since 2007. However, the latest figures, for March 2023, showed a 1.3% increase in real household disposable income after four quarters of negative figures.
Sunak acknowledged that things felt “tough” for families but highlighted the government’s contribution to energy bills. Sounding a positive note on the economy, he said two surveys of business leaders showed “enormous confidence” in the UK.
“That’s what’s actually happening with the economy, that’s what global CEOs who actually have the money and are making investment decisions are saying,” he said, adding that he was “glad to have got that off my chest”.
The prime minister conceded that the UK was dealing with high inflation and elevated borrowing but said he was sticking to his aim to “reduce the tax burden” with tax cuts after dealing with those problems first.
The Institute for Fiscal Studies said this week that one in five people would be caught in the higher rate of tax by 2027, leading to pressure on Sunak from his backbenchers to cut rates.
He is also under pressure over immigration, with ministers yet to agree on a series of measures proposed by Braverman to cut the number of arrivals amid cabinet infighting.
Braverman used a speech to the National Conservatism conference this week to warn that the government must bring down numbers before the next election, while Tory MPs argue they need to ease pressure on housing, education, health and other public services.
On the trip, Sunak backed away from a previous Tory promise to reduce migration to below a quarter of a million. Asked twice whether he was sticking by the 2019 pledge, he did not say he believed immigration should be that low and said he had “inherited” the current figures, which he wanted to bring down.
The prime minister stressed that the difficult task of stopping “illegal” migration by small boats across the Channel was a bigger priority. “I do think most people’s number one priority when it comes to migration is illegal migration, that is crystal clear to me,” he said.
Sunak defended the economic benefits of Brexit in the face of criticism that it has held back the economy and not brought promised prosperity. “I introduced freeports – a Brexit benefit around the country attracting jobs and investment to lots of different places,” he said.
“We cut VAT on sanitary products, we reformed the alcohol duties that mean this summer you will be able to get cheaper beer in pubs. These are all very tangible benefits of Brexit that I’ve already delivered.”
Sunak has been accompanied by his wife, Akshata Murty, for the meeting with leaders from the US, France, Germany, Canada, Japan, Italy and the EU.
He is expected to unveil the Hiroshima accord, an agreement with Japan, aimed at stepping up defence cooperation and improving supply chains. A key element of their discussions will be ensuring the supply of semiconductors – a crucial part of laptops, smartphones, cars, TVs and many medical devices – as the majority are made in Taiwan.
Sunak is also likely to have one-on-one meetings with France’s Emmanuel Macon and India’s Narendra Modi. However, No 10 is not expecting a meeting with Joe Biden, whose trip to Japan is being curtailed over uncertainty surrounding the US debt ceiling. | Inflation |
Orin Kramer, founder of the hedge fund Boston Provident LP, was announced in a Treasury press release Thursday as chairman of its Commission on Social Impact Partnerships, an advisory board tasked with making recommendations to the agency on millions of dollars in local and state government grants. The appointment of Kramer, who has poured hundreds of thousands of dollars into Biden's 2024 campaigns and joint fundraising committees, comes on the heels of Kramer co-hosting a “Broadway for Biden" fundraiser in September featuring performances from Hamilton maker Lin-Manuel Miranda, as well as singers Sara Bareilles and Josh Groban, a flyer shows.
"When the Biden administration promised a return to norms, apparently, one of those norms was rewarding big campaign donors or activists, or both, with plum jobs in the administration," Director Michael Chamberlain for Protect the Public's Trust, an ethics watchdog group, told the Washington Examiner. "This type of arrangement just reinforces the idea that government is no longer of the people, by the people, and for the people but rather of, by, and for wealthy and well-connected insiders."
Biden's appointment of Kramer is the latest example of the president rewarding fundraisers and close allies with top administration posts. In June 2022, the president tapped Elizabeth Hirsh Naftali, who has given millions of dollars to Democrats and was subpoenaed last week by the GOP-led House Oversight Committee in connection to her purchasing Hunter Biden's art, to sit on the Commission for the Preservation of America's Heritage Abroad, a body overseeing European monuments. In September 2022, the president appointed Monica Medina, wife of then-White House chief of staff Ron Klain, as the State Department's special envoy for biodiversity and water resources.
Kramer personally contributed $350,000 in 2020 to Biden's joint fundraising committee, plus more than $5,000 that year to his campaign, according to Federal Election Commission filings. The hedge fund founder has donated more than $100,000 this year to Biden's 2024 campaign, the Washington Free Beacon reported.
"Not only does giving influential posts to longtime political donors look bad, but also, it does little to assuage the public's concern that the administration has aggressively sought to fill senior positions with special interest activists and proxies, creating an incentive for dysfunction, ethical lapses, and corruption as taxpayer funds are distributed," Pete McGinnis, spokesman for the Functional Government Initiative, told the Washington Examiner.
Through his role on the commission, Kramer will lead the seven other members in advising Treasury Secretary Janet Yellen on the Social Impact Partnership to Pay for Results Act, which "is intended to improve the effectiveness of certain social services" and allocates taxpayer funds for programs across the country, according to the White House.
Those awards have included $20.5 million in 2022 to the New York City Mayor’s Office of Criminal Justice "to reduce gun violence among youth" and $3.9 million that year for an Oklahoma program that "provides alternatives to incarceration for women with substance use disorders," according to notices in the Federal Register.
Just last month, Biden hosted Kramer at a state dinner that featured Australian Prime Minister Anthony Albanese and his partner, Jodie Haydon, the White House disclosed. Kramer notably did a stint in President Jimmy Carter's administration, and later on the transition team and in an advisory role for President Bill Clinton.
“Federal commissions are playgrounds for rich guys who are bored with their day jobs," said Tom Jones, president of the conservative American Accountability Foundation watchdog group. "Biden should stop handing off important policy positions to rich donors who are looking for a cool board to sit on."
The Treasury Department and Kramer did not return requests for comment.
"I am honored to serve," Kramer said last week. "I am confident that the commission will continue to play a valuable role in implementing the SIPPRA program effectively." | Nonprofit, Charities, & Fundraising |
More retailers are charging customers for shipping and related fees for mailing back returns.
Roughly 41% of companies charged such fees in 2022, an increase from 33% in 2021, according to a survey.
Retailers including H&M, JCPenney, and many others are imposing some kind of fees for returns.
It's becoming more common for customers returning products to shoulder shipping fees.
About 41% of retailers charged for shipping on returns in 2022, compared to 33% the year before, according to a survey by logistics company Narvar.
The survey, which the Atlantic reported, was based on an analysis of some 200 companies, according to the firm. Narvar, which helps retailers facilitate returns, provide delivery dates for orders, and offer information on tracking packages that are en route, conducted the survey to study the trend, according to a spokesperson.
Customers can face fees for shipping, handling, and potentially restocking, and can often return items physically in stores in order to avoid facing additional charges, according to a review of return policies on retailers' websites.
Several major retailers have referenced shipping fees for returns, including H&M, which states that "Shipping and handling costs are not refundable."
H&M told Insider that its US customers would generally incur a $5.99 shipping fee to mail items back through the US Postal Service, though those in its loyalty program would be exempt from that. "Charges for online returns look different from market to market," a company representative added.
J.Crew notes on its website that customers shipping gift returns will see a $7.50 charge in their refund, while JCPenney states that shipping returns cost $8. "This has been significantly discounted and will cover your entire return from a single order," JCPenney states on its website.
Several department stores and brands including Kohl's, Uniqlo, Anthropologie, Neiman Marcus, and others are also charging fees ranging up to around $10, as Insider has reported.
Read the original article on Business Insider | Consumer & Retail |
The "shocking" findings of a Sky News investigation into the price of infant formula milk and what it's forcing parents to do to feed their babies has been raised three times in the House of Commons.
Charities and baby banks have warned that the UK is on the "brink of a public health crisis" due to the unsafe feeding methods that some parents are having to use because they can't afford formula milk.
Prices have risen on average 24% over the past two years, with the cheapest brand having jumped 45% according to new data from First Steps Nutrition.
Politics latest:
'Insane' to get rid of Rishi Sunak before next election
Alison Thewliss, Chair of the All Party Group on Infant Feeding, has already called for a price cap and has now pressed the Government to instruct the Competitions and Markets Authority to investigate the market.
The SNP MP said: "Leaving the cost of infant formula up to the markets has resulted in soaring prices, as Sky News has revealed this week with parents stealing formula from shops, relying on baby banks and formula foraging on Facebook while profits and marketing spends from the companies has soared."
"Will he instruct the CMA to investigate this sector to protect our youngest citizens?"
Minister for Enterprise, Markets and Small Business, Kevin Hollinrake, did not address the lengths parents are having to go to but said in response: "The CMA is an independent body, and it decides where it should intervene of course we keep these matters under very close scrutiny.
"Competition is the best regulator…it is very important that competition is allowed to play its role in driving down prices but it is certainly something we will certainly keep our eyes on."
Cost of living latest:
The latest on the cost of living crisis
Ms Thewliss later raised the issue again with Leader of the House Penny Mordaunt.
She responded by saying: "Supporting families through the cost of living pressures that are going on at the moment and particularly wanting to be able to support families with young children is a priority for this Government."
Labour's Andrew Western also raised the investigation in the Commons.
He said: "There have been shocking revelations this week of desperate parents forced to steal to feed their infant children."
He called on the government to look at the value of Healthy Start Vouchers which no longer cover the cost of a tub of formula milk. Mr Western pointed out that the value of Healthy Start vouchers has been frozen for the past two years.
Click to subscribe to the Sky News Daily wherever you get your podcasts
Ms Mordaunt responded by saying that the issue of families being able to feed their babies was : "A very serious and important matter to us."
Mr Western has secured a Westminster Hall debate on the issue of the value of Healthy Start vouchers next week on Tuesday 23 May. | Inflation |
SEBI Bans 9 Entities From Securities Markets For 2-years For Flouting Investment Advisory Rules
The nine entities that have been prohibited are -- Yogesh Kukadia, Rajesh R Kallidumbil, Nithin Raj, Signal2Noise Capital Partners, Investo Investment Advisers, SS Info Sales, SI Digi Sales, CT Web Sales and ML Tele Sales.
Capital markets regulator SEBI has barred nine entities from the securities market for at least two years and directed them to refund Rs 8 crore collected from investors, through unregistered investment advisory services, within three months.
Additionally, the regulator has imposed a penalty totalling Rs 18 lakh on them and asked them to pay the amount within 45 days.
The nine entities that have been prohibited are -- Yogesh Kukadia, Rajesh R Kallidumbil, Nithin Raj, Signal2Noise Capital Partners, Investo Investment Advisers, SS Info Sales, SI Digi Sales, CT Web Sales and ML Tele Sales.
Further, three individuals -- Yogesh Kukadia, Rajesh Kallidumbil and Nithin Raj -- have been restrained from associating as directors or key managerial personnel with any listed public company for two years.
In its probe, the regulator found that Yogesh and Rajesh, who were registered as investment advisers, had not conducted the IA (investment advisory) activities in their individual capacities but rather carried out IA work through the six partnership firms that were not registered with SEBI.
The regulator conducted an inspection of the advisory activities of Yogesh and Rajesh for the period April 2018 to September 2019 after receiving certain complaints.
Going by the order, the entities received Rs 810.24 lakh from the clients as fees in respect of their unregistered investment advisory activities. The amount of fees was collected from 4,536 clients for providing investment advice through the six partnership firms, which were not registered firms with SEBI.
The three individuals, who are common partners in all the six partnership firms, have collected the fees from the clients through the six partnership firms, which were not registered and hence not eligible to collect such fees.
"These activities were being carried out by the noticees 1 to 9 without obtaining the necessary certificate of registration as investment advisers and therefore, the noticees have violated ... SEBI Act along with... IA Regulations," SEBI said in its order passed on Tuesday.
Accordingly, SEBI has asked nine entities to "jointly and severally refund the amount / fees /consideration received from any complainant / investor / client, within a period of three months ... in respect of their unregistered investment advisory activities''.
Further, they have been "debarred from accessing the securities market, directly or indirectly and are prohibited from buying, selling or otherwise dealing in the securities market, directly or indirectly in any manner whatsoever, for a period of two years ... or till the expiry of two years from the date of completion of refunds to complainants/investors ... whichever is later". | Stocks Trading & Speculation |
Chancellor Jeremy Hunt has insisted his tax cuts are about "long-term growth" for the economy, calling it "silly" to think they were instead about the timing of the next election.
The Conservative Party has been told to be ready for a general election from 1 January, a senior government source told Sky News's political editor Beth Rigby, with a vote being called as early as May if Wednesday's autumn statement goes down well with voters.
In his speech to the Commons, Mr Hunt announced a raft of measures, including reducing national insurance for employees from 12% to 10% and scrapping it entirely for the self-employed.
But economists have pointed out that the overall tax burden remains at a record high because of the continued freeze on tax thresholds.
Politics live: 'Clear choice' at next election, says Hunt
The chancellor told Sky News he hadn't chosen "the most populist tax cuts", with most of the policies aimed at boosting business growth.
But he denied the NI cuts were a pre-election giveaway, saying: "It's silly to think about this in terms of the timing of the next election. We're trying to make the right decisions for long-term growth of the economy."
The tax cuts came amid long-standing pressure from the Tory backbenches to reduce the burden on both the public and business, which has been sat at a 70-year high.
But a general election is also looming, with the government having to call the ballot by January 2025 at the latest, and the Conservatives are still lagging behind Labour in the polls.
A senior government source told Beth Rigby that the Tories' campaign director, Issac Levido, is due to join the party on a full time basis from the new year in order to make sure they are ready for the election as soon as possible.
Another senior source also told Sky News' political editor that the plan was to "prepare for November" but be "ready for May", in case the tax cuts help them narrow the gap, giving them a better chance of winning an historic fifth term in office. | Inflation |
IndusInd Bank - Loan Growth Momentum To Stay; Deposit Mobilisation The Key: Nirmal Bang
Focus shifts from being defensive earlier to becoming growth oriented now.
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.
Nirmal Bang Report
We hosted the management of IndusInd Bank Ltd. at the NBIE Investor Conference held on November 21, 2023.
IndusInd Bank maintains loan growth guidance of 18-23% in PC-6, which will be driven by strong growth in vehicle finance, microfinance, mortgages, including home loans, and mid/small corporate segments. Deposit mobilisation is happening through its focus on certain strategic locations in tier-I/tier-II cities, cross selling to home loan, credit card and micro finance institutions customers, digitalisation that brings in customer volumes and through efforts at improving brand visibility.
The impact of new norms on the increase in risk weights is expected to be limited at 40-50 basis points and so with excess capital buffer, the IndusInd Bank does not require to raise capital immediately.
It is cautious on growing in the two- wheeler segment, where loss ratios are higher and in micro finance institution, it has largely stayed away from individual borrowers and larger ticket sizes.
Promoter entity IndusInd International Holdings Ltd. is expected to increase its stake in phases over the next three-five years, after it receives final approval from the Reserve Bank of India.
We have maintained our loan growth estimate at 18.4% compound annual growth rate over FY23-FY25E, which, along with stable margins and controlled credit costs, will lead to return on assets of 2% in FY25E.
We maintain a ‘Buy’ rating with a target price of Rs 1687 (valued at 1.75 times September 2025E adjusted book 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. | Banking & Finance |
Money given to the unemployed is just 17% of their previous in-work income, but how does your country measure up?
New figures have shown which country in northern Europe offers the worst unemployment benefits.
Analysis of official OECD data by the Scottish National Party (SNP) revealed the UK has the worst safety net for the unemployed, lagging far behind its European counterparts.
After two months of joblessness, the UK provides its citizens support worth 17% of their previous in-work income - compared to 90% in Belgium.
The UK replacement rate is substantially lower than every other northwestern European country, including Luxembourg (85%), Norway (78%), Denmark (78%), Iceland (75%), Switzerland (74%), Sweden (72%), The Netherlands (69%), France (66%), Germany (66%), Finland (57%), Austria (57%) and Ireland (54%).
A reason why the UK was compared to these countries is they are similar in terms of economic development. Comparing it to less economically advanced countries in southern or eastern Europe would be facile.
"The Tories have torn apart the social security safety net - and the pro-Brexit Labour Party is making it worse by admitting it would keep the most damaging Tory cuts, like the two child cap and bedroom tax," said the SNP's Social Justice spokesperson, David Linden MP in a statement.
Analysis by the pro-EU and pro-independence party found the UK had the worst unemployment benefits among its European counterparts for every year of the 21st century.
It found the replacement rate was also getting worse throughout this period, starting at 20% of in-work income in 2001 to its lowest-ever level in 2022 at 17%.
The findings come amid growing controversy over the levels of state support for lower-income households, amid bruising inflation.
Governing since 2010, the right-wing Conservatives have slashed the UK's social security safety net; introduced a two-child benefit cap; a bedroom tax (which cuts benefits if you live in a house with an extra bedroom); frozen local housing allowances and cut universal credit.
Over the last decade, the number of children living in poverty has risen by around 600,000, while half a million more pensions are in poverty, according to the government’s annual ‘households below average income’ report.
The British anti-poverty charity Joseph Rowntree Foundation in June claimed a lack of state support and rampant food price rises were forcing millions to cut down or skip meals.
However, the opposition Labour Party - which is tipped to win the upcoming next general election - recently caused an outcry by saying it would keep many of these policies.
"[Labour leader Kier] Starmer and Sunak are lurching to the right and taking millions of pounds in vital support away from families during a cost of living crisis," said the SNP's Linden. | Unemployment |
How much does the average Costco shopper spend per visit? Costco reveals the answer
(NEXSTAR) — It takes money to save money, apparently.
Bargain shoppers have long touted the savings they allege to accrue by purchasing their gargantuan boxes of granola bars or unwieldy packs of toilet paper at Costco. But before Costco members even set foot inside the store, their wallets need to be prepared to bear the immediate burden of buying in bulk — which sometimes means plunking down a more substantial dollar amount.
Recent data from Numerator, a market-research firm headquartered in Chicago, had suggested that the average Costco shopper spends just over $100 per visit for a total of around $3,000 per year, according to updated 2023 data first reported by Business Insider. Numerator data shared with Nexstar also appears to indicate that Costco’s average transaction is approximately double the average Target or Walmart transaction, which hover at around $50 and $54 bucks respectively, per the company’s findings.
But Numerator’s spending estimates relied on data provided by the firm’s own Receipt Hog app, meaning those “averages” are based only a small percentage of total Costco transactions.
So, how much does the average Costco actually spend?
The actual average transaction amount, per Costco shopper and per visit, is closer to “roughly $150 per order,” a representative for Costco told Nexstar, citing past earnings calls.
The average Executive member — i.e., a Costco member who pays for the $120 Executive membership rather than the $60 Business of Gold Star membership — “spends more and shops more” than other types of customers, Costco CFO Richard Galanti added in a March earnings call.
Despite the membership fees and relatively large per-visit transactions, most Costco shoppers also appear to feel the perks are worth the cost. Membership renewal rates are at “all-times highs,” Galanti recently noted, with around 68.1 million paid memberships as of the last quarterly report.
It remains to be seen whether those renewal rates will remain high when Costco’s membership fees ultimately increase once again. Historically, the retailer has raised the Gold Star annual price between every five or six years, and the last membership hike took effect in June 2017.
“In our view, it’s a question of when, not if,” Galanti said during the March call. “And so we’ll let you know.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Consumer & Retail |
Inflation is above 10% and millions are struggling with their finances. And that’s before the dreaded winter heating bill and huge hikes in mortgage costs drive households into despair. Britain is grappling with the worst cost of living crisis in a generation – and we’re just at the start of it.So what can you do now to genuinely reduce your bills? Even the usually ebullient Martin Lewis appears dejected as the standard money-saving hacks, such as switching utility providers, bear little fruit these days.Yet there are still some easy wins and sneaky savings that will make life this year that bit more tolerable. Do all of these and you’ll save potentially thousands over the next 12 months.1. Follow every one of these home-heating hacksWe should all know by now to turn the thermostat down one degree. The Energy Savings Trust estimates your annual heating bill increases by about 10% for every degree you turn the thermostat up. Don’t forget to bleed the radiators.Set your boiler correctly. As Which? says, you only really need to have your boiler on its highest setting in the very depths of winter. Otherwise your boiler is needlessly heating water up to a very high temperature and wasting energy.Stop heat escaping. An open fireplace lets £65 of hot air escape up the chimney. Woollen “chimney sheep” draught excluders start at £20, or make your own (breathable materials are best).Windows lose about a fifth of your home’s heat. Close the curtains as soon as the sun goes down. Put clingfilm on your windows for extra draught exclusion. Thermal curtains keep some of the heat in, but cost between £20 to £50.Stripped floorboards look lovely but are like leaving the window open. Draught-proof the gaps quickly and neatly with almost invisible V-shaped plastic from £20. Shove carpet offcuts under the sofa for extra insulation.2. Slash your electricity billThe fastest and easiest way to cut your electricity bill? Switch all your lights to LED and cut your lighting bill by nearly 90%. Bulbs are now widely available for less than £1.3. Go back to the office this winterA typical home uses about £7 a day of gas during the coldest months of the year (depending on the size of your home, age of boiler, etc). If your commute costs less than that, and you don’t buy £3 coffees and £6 lunches, then it might just be worth showing your face in the office. Switching off your home computer should also save another 50p a day.4. Save £85 haggling over broadbandDon’t be nervous. Which? polled 5,000 readers, and while just over half didn’t challenge their broadband and mobile phone provider, those who did saved an average of £85 annually. And they said they found it quite easy. A third managed to continue with the 12- or 18-month “introductory” offer after it expired. Just tell them you’ve been given a better offer elsewhere and ask them to match it. But be realistic, and polite.5. Cut your council tax billThis is one of the most popular tips on MoneySavingExpert, with typical savings between £100 and £400 if your home has been wrongly banded. But it requires a little legwork; check the Valuation Office Agency website to see if you are paying more than your neighbours, then do a valuation check (MSE has a calculator). It can backfire; a householder on a street in Hull requested a move down from council tax band B to band A. Instead, the council moved all the houses up to band B and nearly everyone got higher bills.6. End the home insurance rip-offMany homeowners have a naive loyalty to the home insurance policy sold to them years back by the bank or building society when they took out their mortgage. Some are charged as much as £1,000 a year for insurance that can be found for £250 with a few clicks on a comparison site.7. Take hundreds off your monthly mortgage billIf you’re sinking financially, ask the lender to extend the term of your mortgage loan. Say you have 12 years left on a £150,000 loan. When your current fix ends and new rates (of about 6%) kick in, the cost will be about £1,470 a month. But if you extend the loan to 25 years, the cost would drop to less than £975 a month.Alternatively, request a switch from “repayment” to “interest-only”. On a £200,000 loan at 6%, switching to interest-only cuts the monthly bill from £1,289 to £1,000. But you will, of course, not be paying the loan down.8. Stop wasting foodSainsbury’s estimates that British households chuck out 914m potatoes, 733m tomatoes and 728m carrots each year. One in five people say they don’t really know how to cook.Top tips? Never head to the supermarket without planning your meals for the week, says Lesley Negus of the ThriftyLesley food blog, and don’t get sidetracked down the aisles buying stuff you don’t need and that will probably end up in the bin.Jamie Oliver posts free budget recipes for families along with shopping checklists on his website.If you prefer videos, try the chef Ash Hamilton of the Curious Kitchen in Brixham, Devon, who set himself the task of feeding a family of four for £25 over five days, posting the meals on YouTube. That was during the pandemic, and he admits the cost will be a bit higher today. But they are tasty.9. Do a benefits checkMillions of people are missing out on thousands of pounds. Check what’s rightfully yours at the Turn2us website; all the UK’s debt advisers recommend it. It also has advice on getting grants and help with energy bills.10. Wash your clothes in cool water.Detergent manufacturers say there’s really no need to set your washing machine above 30C or run it for longer than 60 minutes for most clothes. Towels and sheets may need 40C but that’s all, according to Persil.11. Pay in cashTap-and-go is ubiquitous and super convenient. Try going back to the 90s and paying in cash; watching £100 in notes slip through your fingers brings a sobering reality to your spending.Have two bank accounts – one with your core direct debits (rent, gas, electricity, etc), so you can get a proper idea of what you have left after they have been deducted; and another just for spending.If you are already with one of the newer banks such as Starling or Monzo, you probably already have an app telling you how much you have spent on flat whites in the past month. But, used well, their apps can be brilliant at giving you insights into your spending and where you can cut back.There are also numerous standalone apps that help you budget, such as Money Dashboard, which lets you connect all your accounts with UK banks and set budgets, and warns you about overspending.12. Cut your childcare costsIt now costs on average £274 a week for a full-time nursery place for a child under two. But some parents qualify for free childcare for two-year-olds if they receive certain benefits. If you are working in England, every parent is eligible for 570 hours of free childcare a year for 3- and 4-year-olds, which works out as 15 hours a week during termtime.You’re eligible for a further 15 hours a week if you’re a parent working at least 16 hours a week on a minimum wage or above, up to a maximum of £100,000. Find out more at the gov.uk website.13. Swap to a water meterThe rule of thumb is that if there are more bedrooms in your home than people it’s probably worth switching to a water meter. Grab your last water bill and go to the calculator at ccwater.org.uk, operated by the independent Consumer Council for Water, to find out how much you could save.14. Drive more smoothlyExcessive speed is the easiest way to waste money on petrol. Driving at 80mph on the motorways is not only illegal, but can use up to 25% more fuel than keeping a steady 70mph. The same goes for pulling away fast at lights or braking rapidly – they all drink fuel.“Drive smoothly, accelerate gently and read the road ahead to avoid braking unnecessarily,” says the AA. You should try moving up a gear every time the rpm hits 2,000 in a diesel car or 2,500 in a petrol vehicle.What’s the best speed to drive? “Typically, cars are most efficient at 45 to 50mph,” says the RAC. And remove an empty roof rack or roof box – they add drag when driving faster, making your car much less fuel efficient.15. Enjoy a European holiday for almost nothingHolidays are one of the first luxuries to be cut in crisis times. But there are ways to go on holiday around Europe and stay in fabulous accommodation on the cheap.WarmShowers.org is a community of 180,000 cyclists around the world who open their doors to fellow cyclists who are touring around. It’s about reciprocal hospitality – you are expected to host other cyclists when they message you, and vice versa. No money changes hands, bar a $30 (£25) sign-up fee (it’s a not-for-profit that started in Colorado). It’s like Airbnb, except you don’t pay.Or stay in a stranger’s house – while they stay in yours. Home-swapping can dramatically cut your holiday costs and let you live like a local. Register on one of the housesitting websites, such as trustedhousesitters.com.There are numerous commercial home-swap websites connecting owners both nationally and internationally with fees from about £50 to £150 a year. Popular sites include HomeLink, HomeExchange and the Guardian’s own website, Guardian Home Exchange, run by Home Base Holidays.The drawback? You will have to seriously clean and prep your home just before you go away, make wardrobe space and leave out spotless towels and linen. And it helps if your home is close to an internationally renowned area such as Edinburgh, Oxford or Bath. | Inflation |
The rate of price rises at UK supermarkets hit a new high in the year to May due to coffee, chocolate and non-food goods.
The British Retail Consortium (BRC) and NielsenIQ said that the overall rate of inflation at grocers reached 9%.
While prices for fresh food have fallen marginally, the cost of commodities such as coffee and cocoa has jumped.
The government is in talks about asking supermarkets to cap prices on food items to help with the cost of living.
An agreement, which would be voluntary, would limit the cost of basic foods such as bread and milk.
But the BRC has dismissed caps, stating the government should focus on cutting red tape so resources could be "directed to keeping prices as low as possible", as opposed to "recreating 1970s-style price controls".
The BRC and NielsenIQ figures, covering the week between 1 and 6 May, show that overall food inflation ticked lower from 15.7% in the year to April to 15.4%.
Despite the fall, the figure is the second highest rate of food inflation on record.
A decline in the rate of price rises does not mean food costs have fallen, it simply means they are going up at a slower pace.
Meanwhile, the pace of price rises for non-food goods grew from 5.5% in the year to April to 5.8% in May.
This is despite supermarkets making "heavy discounts" on goods such as footwear, books and home entertainment, according to Helen Dickinson, chief executive of the BRC.
Fresh produce showed a slowdown in price rises, from 17.8% to 17.2% in May.
In April, supermarkets cut the price of milk by 5p, taking cost of a pint to 90p. However, that is still almost double pre-Covid prices in March 2020.
Price growth for ambient foods - which are goods that can be stored at room temperature - rose in the year to May from 12.9% to 13.1%. It is the fastest increase on ambient foods prices on record, said the BRC and NielsenIQ.
Ms Dickinson said: "The price of chocolate and coffee rose off the back of the ongoing high global costs for these commodities."
Last week, official figures showed that the overall headline rate of inflation had fallen sharply to 8.7% in April - the first time it fell under 10% since August.
However, the drop was less than economists and investors had expected after grocery price rises remained close to the highest rate in 45 years.
It is also still more than four times the Bank of England's 2% target rate of inflation. The Bank has lifted interest rates 12 times in a row to 4.5% in an attempt to calm price rises.
But following the higher-than-expected figure for April, some analysts speculated that interest rates could reach 5.5% by the end of the year.
Food production costs have risen due to a number of factors including the cost of energy which rose following the end of Covid lockdowns, which pushed up demand, as well as Russia's attack on Ukraine.
Russia, which is a major oil and gas producer, was hit with sanctions.
Ukraine - known as the breadbasket of Europe - is one of the biggest exporters of grain in the world and has seen shipments severely disrupted because of the war.
Adverse weather conditions in some parts of Europe and Africa also impacted some fresh vegetables earlier this year, leading to supermarkets introducing customer limits on sales of peppers, tomatoes and cucumber.
Wholesale gas prices have started to drop but retailers claim that falling production costs take time to filter through to supermarket shelves due to the long-term contracts they typically sign with food producers.
Mike Watkins, head of retailer and business insight at NielsenIQ, said: "Food retailing in particular is competitive, so hopefully the recent price cuts in fresh foods is a sign that inflation has now peaked, albeit ambient inflation may take a little while longer to slow." | Inflation |
Google co-founder Sergey Brin, a billionaire and prolific contributor of left-wing causes, wired millions of dollars to Rewiring America, a climate group pushing electrification policies with close ties to the Biden administration.
According to recently disclosed tax filings, Brin's nonprofit, the Sergey Brin Family Foundation — which raked in a staggering $464 million in contributions in 2021, the most recent year with information — sent $4.5 million to the Windward Fund earmarked for "general operating support" for Rewiring America in 2021. The grant represents the largest known contribution to Rewiring America since the group was founded in 2020.
Rewiring America was established to "to help mobilize America to address climate change and jump-start the economy by electrifying everything," Rewiring America co-founder Saul Griffith wrote in a September 2020 blog post. The group broadly argues in favor of electrifying homes and has pushed electric stoves as a replacement of gas stove alternatives.
The group was at the center of a recent move to restrict gas stove usage. Rewiring America research associate Talor Gruenwald was listed as the lead author on a study published in December linking childhood asthma to gas stoves. The study was promoted by Energy Secretary Jennifer Granholm and used to justify greater restrictions on the appliances earlier this year.
"Neither induction nor electric resistance stoves burn fossil fuels," Rewiring America states on its website. "They also don’t require gas hookups, which often leak methane — a potent greenhouse gas. In fact, recent studies have shown that methane leaking from gas-burning stoves installed in U.S. homes, even when they are turned off, has the same negative impact on the environment as the carbon dioxide emitted from around 500,000 gasoline-powered vehicles."
"Induction and electric stoves provide substantial health benefits over gas stoves," it adds, noting the December study's findings on childhood health outcomes. "Gas stoves burn fossil fuels in an enclosed space, releasing carbon monoxide, nitrogen dioxide, and other pollutants and carcinogens directly into our homes."
Because Rewiring America isn't an independent organization — it is a project of the Windward Fund, a nonprofit that is part of the billion-dollar dark money network managed by the Washington, D.C.-based Arabella Advisors — its funding is hidden from public view, meaning its donors remain unknown.
The group is not required to file tax documents to the IRS due to this arrangement.
Excluding the Sergey Brin Family Foundation's $4.5 million-dollar contribution, other known contributions to Rewiring America include a 2020 grant worth $300,000 from the left-wing nonprofit Rockefeller Brothers Fund and a $400,000 grant from the Climate Imperative Foundation in 2021.
And Rewiring America maintains close ties to the Biden administration and Democratic lawmakers.
Rewiring America co-founders Ari Matusiak and Alex Laskey attended a White House event on Sept. 13 to celebrate the passage of the Inflation Reduction Act. Laskey also spoke at a Dec. 14 electrification summit hosted by the White House and attended by top administration officials.
"Just to talk quickly about the benefits of electrification – from our count, 42% of all emissions come from decisions that are made at kitchen tables. That is the cars we drive as well as how we heat our homes, heat the water in our homes, cook our food and dry our clothing," Laskey remarked during the event.
Since then, Matusiak has visited the White House at least two more times, with appearances occurring in January and March, according to a Fox News Digital review of visitor logs.
The Biden administration has also repeatedly referenced Rewiring America in press releases. Last November, it announced "new actions to lower energy costs for families" that touted an initiative involving the group.
"The private sector is stepping up to this huge opportunity," the White House wrote in the press release. "Today, a group of companies led by Airbnb, Redfin, Lyft, Duquesne Light Company, Mosaic, Arcadia, and Propel are partnering with Rewiring America the launch an educational campaign for their customers and users to educate at least 10 million American households about opportunities to save money with heat pumps and other building electrification opportunities, using Rewiring America’s Inflation Reduction Act Calculator and other tools."
In an April 17 statement on the administration's new private- and public-sector investments for electric vehicles, the White House wrote that Rewiring America is "committing to launch an online personal electrification planner in 2023 with the initial goal of helping 100,000 homeowners and renters create roadmaps to electrify their homes and to choose electric vehicles and home chargers."
Sergey Brin's financial support to Rewiring America likely places him among its most generous donors in 2021. In addition to Rewiring America, his family foundation doled out millions to other far-left environmental groups like CarbonPlan, the ClimateWorks Foundation and the Rocky Mountain Institute.
GMMB, a Democratic firm that received payments from Brin's foundation for communications consulting, did not respond to a request for comment. Brin also did not respond to an inquiry by the time of publication. | Renewable Energy |
Food banks are having to buy groceries at high prices because donations fail to meet demand from families in need.
The Trussell Trust said 13% of food in emergency parcels was bought, whereas before the pandemic it was all donated.
Donations do not always match their most-needed items meaning charities have to buy more to cover shortages.
But new software may be helping solve this problem, by telling people exactly which groceries and toiletries are running low in their local food bank.
Paul McMurray, from North Shields, has created Donation Genie - a website that displays the items that are most needed at each specific food bank across the UK.
Visitors to the site can enter a postcode or area and it will show the four nearest food banks and which items they are in most need of.
Mr McMurray, a software engineer at Accenture used days offered by his company to do charity work to develop the idea.
"We want to use the simplicity of technology and kindness of people, then join them together to direct the right food to the right people."
That could lead to "less hunger, less waste, and less food poverty", he said.
The need is clear from data in his area. There was a 54% rise in food parcels handed out in the North East of England in 2022-23 compared with the previous year, among a record three million across the country, according to The Trussell Trust - the UK's largest food bank provider.
Nearby, the network of 36 food banks in County Durham and Sunderland provided food to 2,000 people at the start of last year. By this March, that had risen to more than 4,000 with children accounting for more than a third of them.
Food prices rising at their fastest rate for 45 years has "really affected donations", according to Jonathan Conlon, distribution manager for Sunderland and County Durham food banks.
"Month-on-month, donations are decreasing - less food is coming in to the warehouse from the public. At the same time, the number of people using food banks is increasing," he said.
It is the same story at the other end of the country. In Bromley, south east London, the Living Well food bank spent more than £5,000 in April on groceries to give out. Before Covid it ran on donated food alone. Among those who need it now are families with working parents, including one who has three jobs.
Elsewhere, figures from surveys by the Charities Aid Foundation show that financial donations to food banks peaked in the run-up to Christmas, then slumped in February, although there has been some recovery since. Food banks told the charity that donated supplies had been "erratic" at best.
Mr Conlon, from the Durham food banks network, said any donations were welcome but, in general, there was a greater need for toiletries, as well as tinned meat and fish.
People were more likely to drop pasta, cooking sauce and tins of beans in the collection baskets at supermarkets and churches. Evidence of the mismatch was all around him in a warehouse where a team of volunteers were sorting items primarily given by the public.
The solution, he said, was to think more creatively.
Human-centric technology like Donation Genie is one example of that, community spirit is another.
A few miles away in Gateshead, some of the residents of Bensham Court sheltered accommodation are playing bingo. Hot dog sausages and tins of coffee are the prizes, signalling the shift in what may be considered a lucky luxury as prices soar.
One flat at Bensham Court has been converted into an emergency food bank. It is a lifeline for some of the 135 residents, all of whom are aged over 50.
However, there is such togetherness, that they are planning to top this up with food grown in a new allotment in the grounds of the 1960s tower block.
According to Julie Bray, social prescribing link worker at the local GP practice, such activities are bringing health as well as financial benefits.
"That keeps them away from their GPs, it stops them from taking medication, and is making them resilient again."
Poonam lives here, has struggled financially, but said she had received vital help and support since she moved in, making her feel part of a family - and that, she said, was priceless.
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 | Nonprofit, Charities, & Fundraising |
California would like to crack down on a type of trust that lets the very wealthy avoid state income and federal gift taxes. And the Golden State is not alone: A number of state officials have taken aim at the loophole, known as an incomplete non-grantor trust (ING). In its 2023 budget proposal, the administration of Gov. Gavin Newsom proposed banning the trust.
New York state passed a similar law in 2014, and the idea has begun picking up steam in states that have seen many of their wealthiest citizens use INGs to avoid taxes. Below we dive deeper into the controversy – and explain how an ING trust works.
You can work with a financial advisor to lower your tax bill.
California Wants to Ban ING Trusts
Naturally, high-income, high-tax states have a lot to lose from tax loopholes on the wealthy. These trusts have also come under fire from some tax policy analysts, who cite it – alongside the carried interest loophole – as a substantial tax-avoidance practice employed by the very wealthy. This criticism is sharpened by the fact that an ING trust is only particularly useful to someone seeking to avoid the gift tax, which does not apply until a taxpayer has transferred roughly $13 million in total assets.
In 2014, New York state banned the use of ING trusts to avoid state taxes. They did this by redefining what New York state considers a grantor and non-grantor trust. Specifically, it updated its income tax laws to include any income generated by a non-grantor trust funded by an incomplete gift. (While this contradicts the IRS interpretation of the matter, because this law applies only to taxes in the state of New York it has not run afoul of any supremacy clause issues.)
California would like to follow New York's lead. Under Newsom's proposal, the state would update its own tax laws based on the Empire State's model. It would stop using the IRS definition of incomplete gifts and would instead set its own definitions for when a taxpayer has made a complete transfer of assets. As proposed, this change would apply to California residents, which could leave an open question regarding non-resident taxpayers. Legislators would have to resolve that issue when drafting the actual law.
This proposal "which would be effective beginning in tax year 2023, is projected to increase tax revenues by $30 million in 2023-24 and by $17 million annually thereafter," according to a state news release. At time of writing, this remained in the governor's proposed budget. However, the legislature appears to have omitted this issue from the text of the budget itself, which is scheduled for a vote later this week.
What Is an ING Trust?
An incomplete-non grantor trust is a specialized form of trust designed to shift the tax base of its assets. If properly created, it allows the creator to pay no state taxes on the assets they put in trust while also paying no federal gift taxes on the underlying transfer. Given the high IRS cap on gift taxes, an ING, which is a self-settled irrevocable trust, is typically only useful for taxpayers with a very high net worth.
To understand how this works, we need to look at the nature of trusts.
A trust is a legal entity set up to hold, manage and distribute assets. Every trust has three (or more) main parties to it:
The Grantor – The person or persons creating the trust and putting assets in it
The Trustee – The person or firm who manages and distributes the trust's assets
The Beneficiary – The person or persons getting assets from the trust
When you create a trust, you set its terms. This means you can identify who the trustee and beneficiaries will be, how and when its assets will be distributed, and any other rules for how the entity should work. The trust then becomes an independent third party that can legally own, control and distribute its assets.
While there are many kinds of trusts, there are two broad categories for tax purposes: grantor and non-grantor trust.
Grantor Trusts
A grantor trust is one in which you, as the grantor, maintain some measure of control over the assets in trust. For example, you might allow yourself to take assets out of the trust. Or you may retain the right to change the trust's beneficiaries or rules, to take loans from the trust, or collect its investment income. However you do it, if you keep a meaningful measure of ownership or control over the trust's assets, the entity is considered a grantor trust.
With a grantor trust, you pay the trust's taxes. The assets are still considered functionally yours, so any income or capital gains that the trust generates are reported on your taxes.
Non-Grantor Trusts
A non-grantor trust is one in which you, as the grantor, have no meaningful control over the assets in trust. While you might retain some de minimis connection, you have made a complete gift of the assets to the trust. Any trust that is not considered a grantor trust is a non-grantor trust.
With a non-grantor trust, you pay any applicable gift taxes at the time of your transfer. Then, as the full owner of the underlying assets, the trust itself pays all applicable income and capital gains taxes.
Incomplete Non-Grantor Trusts
An ING is a type of trust designed to thread the needle between these two categories. It is a non-grantor trust, which moves the tax burden of the trust's assets onto the trust itself. However, it is funded with a legally incomplete gift, which allows the grantor to avoid federal gift taxes while maintaining a measure of control over the assets.
Grantors take three basic steps to set up an ING trust:
Create a trust that is legally based in a state with no taxes on income and capital gains. This effectively nullifies state taxes the trust would otherwise be liable for. Keep in mind, this will not affect the trust's federal income tax status.
Fund the trust as a non-grantor trust. This shifts the tax base of any assets to the trust itself, which pays the taxes of the state in which it is based (thanks to step one, this will be zero). To do this the grantor must fund the trust with a gift that effectively relinquishes control and ownership of their assets to the trust.
Structure the gift as a defective transfer. This is where an ING gets tricky. By carefully wording the asset transfer, you can structure it as complete enough to qualify for non-grantor trust status yet not complete enough for the IRS to consider it a taxable gift. This is typically done by transferring almost all ownership rights to the underlying assets, but still retaining some narrow, specific measure of control over them. A financial advisor can help guide you.
If properly structured, you will have created a non-grantor trust that assumes all the tax liability for its assets without paying gift taxes on the assets you transfer in. Since the trust is based in a tax-haven state, it will owe no state taxes on the income and capital gains that it generates, while leaving you a small measure of control over how those assets are managed.
Bottom Line
California Gov. Gavin Newsom has proposed closing a tax loophole known as the incomplete non-grantor trust. This is a structure used by the very wealthy to avoid paying state income taxes and federal gift taxes, and which may soon be less available than it was before.
Estate Tax Planning Tips
A financial advisor with estate planning experience can help you plan for the future, including how to minimize future tax bills. 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 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.
There are grantor trusts and non-grantor trusts. There are also revocable and irrevocable trusts, intentionally defective grantor trusts, lifetime trusts, testamentary trusts and many more. Let's take a look at which, if any, are right for you.
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The post California Takes Aim at Tax Loophole for State's Richest appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
A federal jury has found Sam Bankman-Fried, the founder of FTX, guilty on all seven counts of fraud and conspiracy he was charged with in relation to the downfall of his cryptocurrency exchange. According to The New York Times, he faces a maximum sentence of 110 years in federal prison. Bankman-Fried was arrested in the Bahamas back in December 2022 after the Department of Justice took a close look at his role in the rapid collapse of FTX. The agency examined whether he transferred hundreds of millions of dollars when the exchange filed for bankruptcy and whether FTX broke the law when it moved funds to sister company Alameda Research.
During Bankman-Fried's trial that took place over the past month, prosecutors argued that he used FTX's funds to keep Alameda Research running. The fallen entrepreneur also founded the cryptocurrency hedge fund, which was ran by his girlfriend Caroline Ellison, who was aware that he used FTX customers' money to help Alameda meet its liabilities. Bankman-Fried previously denied that he deliberately misused FTX's funds. The Times says his lawyers tried to portray him as a math nerd who had to grapple with "forces largely outside of his control," but the jury clearly disagreed after the prosecution called Ellison and three of Bankman-Fried's former top advisers to the witness stand. Ellison and all of those advisers had pleaded guilty, with the Alameda Research chief admitting that she committed fraud at Bankman-Fried's direction.
Bankman-Fried was charged with wire fraud on FTX customers, wire fraud on Alameda Research lenders, conspiracy to commit wire fraud on both, conspiracy to commit securities and commodities fraud on FTX customers, as well as conspiracy to commit money laundering. He is scheduled to be sentenced on March 28, 2024 by US District Judge Lewis A. Kaplan, who also presided over his trial. | Crypto Trading & Speculation |
WASHINGTON, D.C. [09/25/23] — Today, U.S. Senators Tina Smith, Amy Klobuchar, and U.S. Representative Angie Craig (all D-Minn.) sent a letter to Postmaster General Louis DeJoy seeking answers about an apparent payroll system error that led to an estimated 53,000 rural letter carriers missing or receiving only a partial paycheck on September 1. After hearing from Minnesotans affected by the error, the lawmakers pressed DeJoy on the Postal Service’s insufficient response to their significant error, and demanded immediate back pay for the impacted workers.
“Rural letter carriers – including carrier assistants – are essential workers whose services are critical to small towns and rural places in Minnesota and around the country,” wrote the lawmakers in their letter. “As you know, these carriers deliver medications to veterans, bills to seniors, and support businesses large and small, all for relatively modest pay. Like a lot of American families, many rural letter carriers can’t afford a missed paycheck. We understand that USPS offered affected employees the option to receive a salary advance in the form of a money order at 65 percent of gross pay. However, that is an insufficient proposal that fails to address the scope of these employees’ needs, and does not demonstrate a commitment to getting these workers the pay they earned.”
In their letter, Smith, Klobuchar, and Craig called for DeJoy to answer the following questions by September 30, 2023:
- Do you commit to paying all affected employees in full by October 1, 2023?
- If not, by what date will USPS pay all affected employees in full?
- How many USPS employees were impacted by this payroll system error?
- What types of employees were impacted by this payroll system error?
- What caused this payroll system error?
- What steps have been taken to prevent such an error in the future?
- How has USPS communicated with affected employees about this error?
You can access a full copy of the letter here. | Workforce / Labor |
- About 23% of Americans over age 65 live in poverty, according to the Organization for Economic Co-operation and Development. That's one of the highest shares among developed nations.
- U.S. Census data suggests a smaller share of the elderly are poor, and that old-age poverty nationwide has been falling.
- Experts say tweaks to Social Security benefits would be the best way to address senior poverty. But it would be costly at a time when the program's finances are already shaky.
But is the system falling short in its primary goal of achieving a secure retirement for all Americans?
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Judging why and to what extent seniors may be falling behind is harder than it might sound, experts said.
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But the answer has huge policy implications, ranging from the generosity of public benefits to the prevalence of employer-sponsored plans such as 401(k)s and pensions.
"This is a fraught area," said Olivia Mitchell, a professor of business economics and public policy at the University of Pennsylvania and executive director of the Pension Research Council. "There's not a simple answer."
Consider this thought exercise: What is a tolerable poverty rate among American seniors?
By one metric, the U.S. fares worse than most other developed nations in this category.
About 23% of Americans over age 65 live in poverty, according to the Organization for Economic Co-operation and Development. This ranks the U.S. behind 30 other countries in the 38-member bloc, which collectively has an average poverty rate of 13.1%.
According to OECD data, only Mexico ranks worse than the U.S. in terms of old-age "poverty depth," which means that among those who are poor, their average income is low relative to the poverty line. And just three countries have worse income inequality among seniors.
There are many contributing factors to these poverty dynamics, said Andrew Reilly, pension analyst in the OECD's Directorate for Employment, Labour and Social Affairs.
For one, the overall U.S. poverty rate is high relative to other developed nations — a dynamic that carries over into old age, Reilly said. The U.S. retirement system therefore "exacerbates" a poverty problem that already exists, he said.
Further, the base U.S. Social Security benefit is lower than the minimum government benefit in most OECD member nations, Reilly said.
The U.S. is also the only developed country to not offer a mandatory work credit — an important factor in determining retirement benefit amount — to mothers during maternity leave, for example. Most other nations also give mandatory credits to parents who leave the workforce for a few years to take care of their young kids.
"There's very little security relative to other countries," Reilly said of U.S public benefits.
That said, the U.S. benefit formula is, in some ways, more generous than other nations. For example, nonworking spouses can collect partial Social Security benefits based on their spouse's work history, which isn't typical in other countries, Mitchell said.
Here's where it gets a little trickier: Some researchers think the OECD statistics overstate the severity of old-age poverty, due to the way in which the OECD measures poverty compared with U.S. statisticians' methods.
For example, according to U.S. Census Bureau data, 10.3% of Americans age 65 and older live in poverty — a much lower rate than OECD data suggests. That old-age income poverty rate has declined by over two-thirds in the past five decades, according to the Congressional Research Service.
Historically, poverty among elderly Americans was higher than it was for the young. However, that's no longer true — seniors have had lower poverty rates than those ages 18-64 since the early 1990s, CRS found.
"The story of poverty in the U.S. is not one of older folks getting worse off," Mitchell said. "They're improving."
Regardless of the baseline — OECD, Census Bureau or other data — there's a question as to what poverty rate is, or should be, acceptable in a country like the U.S., experts said.
"We are arguably the most developed country in the world," said David Blanchett, managing director and head of retirement research at PGIM, the investment management arm of Prudential Financial.
"The fact anyone lives in poverty, one can argue, isn't necessarily how we should be doing it," he added.
Despite improvements, certain groups of the elderly population — such as widows, divorced women and never-married men and women — are "still vulnerable" to poverty, wrote Zhe Li and Joseph Dalaker, CRS social policy analysts.
At the very least, there are facets of the system that should be tweaked, experts said.
Researchers seem to agree that a looming Social Security funding shortfall is perhaps the most pressing issue facing U.S. seniors.
Longer lifespans and baby boomers hurtling into their retirement years are pressuring the solvency of the Old-Age and Survivors Insurance Trust Fund; it's slated to run out of money in 2033. At that point, payroll taxes would fund an estimated 77% of promised retirement benefits, absent congressional action.
"You could argue pending insolvency of Social Security is threatening older people's financial wellbeing," Mitchell said. "It is the whole foundation upon which the American retirement system is based."
Raising Social Security payouts at the low end of the income spectrum would help combat old-age poverty but would also cost more money at a time when the program's finances are shaky, experts said.
"The easiest way to combat poverty in retirement is to have a safety-net benefit at a higher level," Reilly said. It would be "extremely expensive," especially in a country as large as the U.S., he added.
Blanchett favors that approach. Such a tweak could be accompanied by a reduction in benefits for higher earners, making the system even more progressive than it is now, he said.
Currently, for example, Social Security replaces about 75% of income for someone with "very low" earnings (about $15,000), and 27% for someone with "maximum" earnings (about $148,000), according to the Social Security Administration.
Reducing benefits for some would put a greater onus on such households to fund retirement with personal savings.
However, the relative lack of access to a savings plan at work — known as the "coverage gap" — is another obstacle to amassing more retirement wealth, experts said.
Research shows that Americans are much more likely to save when their employer sponsors a retirement plan. But coverage hasn't budged much in recent decades, even as employers have shifted from pensions to 401(k)-type plans.
"About 40 years ago, half of workers were covered by an employer-sponsored plan," Mitchell said. "The same is true now."
Of course, workplace plans aren't a panacea. Contributing money is ultimately voluntary, unlike in other nations, such as the U.K. And it requires financial sacrifice, which may be difficult amid other household needs such as housing, food, child care and health care, experts said. | Personal Finance & Financial Education |
According to Berkshire's 13F report, which discloses its holdings, the company purchased nearly 9.7 million shares with a market value of about $43.8 million in its September quarter.
Shares of Sirius have struggled so far this year, down about 10% compared to the S&P 500's (^GSPC) 17% gain over that same time period.
The company reported a beat on earnings in its fiscal third quarter results, but missed revenue expectations. Total revenue declined 0.4% compared to the year-ago period, dragged down by a 0.3% yearly dip in subscriber revenue.
Advertising revenue, however, gained 0.7% year over year to $460 million — bucking recent industry trends amid a shaky macroeconomic environment.
At Liberty's investor day earlier this month, Jennifer Witz, CEO and president of SiriusXM, said a special committee of independent directors is currently reviewing the proposal, adding: "What I want to emphasize is that regardless of the outcome of Liberty's proposal and any transaction hypotheticals, I am confident we can quickly deliver to our communicated long-term leverage target if need be."
The update comes as Buffett, often referred to as the "Oracle of Omaha," sold off his holdings in other companies, including General Motors (GM), Johnson & Johnson (JNJ), Procter and Gamble (PG), Mondelez (MZ), Celanese (CE), UPS (UPS), and Activision Blizzard, which completed its merger with Microsoft in October.
In addition to Sirius, the billionaire also made an investment in the publicly traded holding company that owns the Atlanta Braves Major League Baseball club and The Battery Atlanta.
He purchased 223.6 million shares worth nearly $8 million, according to the filing.
Buffett's long history with media and entertainment
Buffett's Berkshire Hathaway, which owns over 65 companies across a variety of sectors, has a lengthy history with media and entertainment businesses.
After serving as a financial adviser to help broker a deal between broadcaster ABC and Capital Cities Communications, Berkshire agreed to purchase an 18% stake in the new conglomerate for $517 million to help finance the merger. At the time, this deal was the largest non-oil deal in modern American business history.
"I like media companies as a business," Buffett told the New York Times at the time. "I'm interested in the product. I always thought the media had a bright future, but it took Wall Street a long time to appreciate that."
In 1995, Disney announced a $19 billion merger of equals with Capital Cities/ABC — another milestone corporate takeover and a key step in cementing Disney's all-encompassing entertainment legacy.
The 93-year-old billionaire has also owned 30 daily newspapers over the years, including his hometown Omaha World-Herald, along with other holdings through Berkshire's print publishing unit, BH Media Group.
"The world was changed hugely, and it did it gradually," Buffett said. "[The business] went from monopoly to franchise to competitive to ... toast."
Despite the industry's challenges, however, Buffett has always been a lifelong lover of newspapers.
The Washington Post was one of Berkshire's primary holdings until it was sold off to Amazon's Jeff Bezos for $250 million in 2014. | Stocks Trading & Speculation |
Image caption, Richard Shaw said not being able to heat his home was demoralisingA dad of two has said he had to bath his young family in the kitchen sink due to the rising cost of heating oil.Richard Shaw, 33, is from Doveridge in the Derbyshire Dales, where about one in 10 households depend upon oil to heat their homes.He said the cost of filling the 220 gallon (1,000 litre) tank had nearly tripled in the past year.The government said it recognised families were struggling with the cost of living.'Demoralising'Mr Shaw, who is disabled and not working, said when he and his family moved into the house, a year ago, the cost of filling the tank had stood at about £400 but prices had risen rapidly since then."In the end, we nearly ran out of heating oil," said Mr Shaw, a father of two children, aged 17 months and two years."We couldn't afford any more. It got to the point where we were bathing the kids in the sink in the kitchen, filling up the kettle, boiling it, then letting it cool, for the water."He said he was eventually able to get an oil delivery thanks to Rural Action Derbyshire, a charity that has started an oil bank to help people in need."We needed a delivery and we couldn't [have got] one without Rural Action Derbyshire," he said."Not being able to heat your house is demoralising. We've had some very cold days out here."Without the central heating, we'd have been in real trouble."'People are struggling'Emma Simpson from Rural Action Derbyshire said: "The oil bank has been an absolute lifeline for some people and we were delighted to be able to help Richard and his family."We are particularly keen to help vulnerable households."Vulnerable people, such as those who have health conditions made worse by the cold or damp, those with young children, the elderly or disabled are our priority as it is essential for them to stay warm and they are often at home during the day."A government spokesperson said: "We recognise people are struggling with the rising cost of living, including those who use heating oil and bottled gas to warm their homes."That is why we have increased the Alternative Fuel Payment to £200 and are committed to delivering this in February."Follow BBC East Midlands on Facebook, on Twitter, or on Instagram. Send your story ideas to [email protected] Internet LinksThe BBC is not responsible for the content of external sites. | Energy & Natural Resources |
Social Security benefits were once tax-free. That changed in 1983, when Congress decided to tax a portion of benefits for the highest-income recipients.
Back then, fewer than 10% of beneficiaries were affected. Lawmakers failed to update the law to account for inflation, however, so today most Social Security beneficiaries have to pay federal income tax on at least some of their benefits, said Ted Sarenski, author of American Institute of CPA's "Guide to Social Security Planning."
There are a few ways to reduce that tax bite, however, especially if you can plan ahead.
How Social Security taxes work
Social Security taxes are based on your annual "combined income." Combined income comprises:
●Your adjusted gross income, which includes your earnings, investment income, retirement plan withdrawals and other taxable income.
●Any nontaxable interest you receive, such as interest on municipal bonds.
●One half of your Social Security benefits.
For couples filing a joint return, a combined income between $32,000 and $44,000 means up to 50% of benefits may be taxable. For higher combined incomes, up to 85% of benefits may be taxable. Single filers may pay tax on up to 50% of benefits when combined income is between $25,000 and $34,000, and up to 85% of benefits beyond that.
People who live solely on Social Security don't have to pay income taxes on their benefits, Sarenski notes. But even a relatively small amount of other income can cause benefits to become taxable.
Defuse the tax torpedo
The unique way Social Security benefits are taxed leads to something known as the "tax torpedo" – a sharp rise in marginal tax rates followed by a decline, said William Reichenstein, professor emeritus at Baylor University and co-author of "Social Security Strategies: How to Optimize Retirement Benefits." Marginal tax rates are what you pay on each additional dollar of taxable income you receive.
Many middle-income households can face marginal tax rates that are 50% to 85% higher than their regular tax bracket because of this tax torpedo, Reichenstein said.
"You take another dollar out of your tax deferred account and it causes another 85 cents of Social Security to be taxed, so your taxable income goes up by $1.85," he said.
Moderate-income households may be able to defuse the effects by delaying the start of Social Security benefits as long as possible, Reichenstein said. Someone who waits until age 70 to start benefits, withdrawing money from retirement funds in the meantime, not only gets a larger Social Security check but could save hundreds or even thousands of dollars a year in taxes, Reichenstein said. If you're in the 10% to 22% federal tax brackets, consider talking to a tax pro or financial planner about how to mitigate the potential tax burden.
Contribute to a Roth
Having at least some money in a Roth IRA or Roth 401(k) can help reduce taxes on Social Security benefits. Withdrawals from these accounts are tax-free in retirement and aren't included in your combined income, Sarenski said.
You can't contribute to a retirement account if you don't have earned income, so people should diversify their retirement accounts long before they stop working, he said. Putting all your money in a pretax option could mean facing a whopping tax bill later.
"People should be trying to balance what they have in pre-tax income and after-tax income so they can balance their taxation in the future when they retire," Sarenski said.
Get charitable with your IRA
Once you're 70 1/2, you can make qualified charitable distributions, which are donations from your IRA to a charity. The withdrawal isn't taxable and won't count in your combined income as long as the money is transferred directly from the IRA custodian to the charity. You can transfer up to $100,000 this way.
If you've reached the age at which required minimum distributions from retirement accounts must begin – currently, that age is 73 – qualified charitable distributions can count as your RMD, Sarenski said.
Consider other ways to reduce distributions
If you've been a good saver, RMDs can push you into a higher tax bracket as well as trigger higher Social Security taxes, Sarenski said.
Tapping your retirement funds before you're forced to do so could make sense, as could a Roth conversion, Sarenski said. With a conversion, money is transferred to a Roth IRA from a pretax retirement account such as an IRA or 401(k). Conversions typically incur taxes but withdrawals in retirement are tax-free.
Again, consider talking to a tax pro or financial planner first. Taking too much from retirement accounts can trigger unnecessary taxes, increase your Medicare or Affordable Care Act premiums and have other financial repercussions, such as running out of money prematurely. Avoiding those pitfalls takes careful planning, Sarenski said.
"The idea to me is to smooth out your tax rates," Sarenski said . "You don't want years where you're paying at 40% and years where you're paying zero."
This column was provided to The Associated Press by the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of "Your Credit Score."
for more features. | Personal Finance & Financial Education |
An SNP minister has hinted a controversial plan to ban alcohol advertising in public places could be looked at again despite it previously being ditched.
Elena Whitham spoke out today after official figures showed the number of Scots killed by drink-related causes is at a 14-year high.
The minister for drug and alcohol policy also denied the Scottish Government had taken its eye off the ball on the issue.
A consultation launched when Nicola Sturgeon was still in power last year raised the idea of banning all booze advertising in public spaces.
Health campaigners have long called for a clampdown on brewers and distillers using high-profile sporting events to market their products. But it prompted a furious backlash from businesses who feared it could see whisky distilleries unable to sell their own products to tourists.
Humza Yousaf used his first major speech as First Minister earlier this year to say Government would go “back to the drawing board” on the issue. Speaking as figures showed 1,276 people died in 2022 from alcohol related deaths, Whitham said there were still 3,000 responses to the cancelled consultation to be analysed.
"While we are back to the drawing board – that doesn’t mean that it’s cancelled and it’s not going anywhere,” she said. "It just means that we’re going to have a slightly different focus on it, but my focus on it is absolutely from a public health perspective.”
Asked if Scotland could still be subject to a ban on alcohol advertising, Whitham said: "We don’t know what that’s going to look like. I think we have to look and see what the evaluation of the responses tells us and then make a move from there. But, clearly, as a public health minister, my focus is on that from a public health lens.”
Scottish politics
Whitham insisted that Yousaf had reiterated his commitment to tackling alcohol harms in a recent meeting with stakeholders. “(He) was quite frank in his statements with regards to marketing that we need to make sure that we reduce the harm to young people and that sometimes marketing can drive that," she added.
Asked if the Scottish Government had taken its eye off the ball when it came to deaths from alcohol, Whitham said: "I think the First Minister appointing me as the minister responsible for not only drugs, but also alcohol shows his eye, and my eye, is firmly back on the ball. It's my job to work with local areas and reduce alcohol-related harm where we can."
To sign up to the Daily Record Politics newsletter, click here. | Consumer & Retail |
Mahindra Finance Forays Into Co-Lending With State Bank Of India
The interest rates offered would depend on the customer's credit profile.
Launched on a pan-India level, the idea behind the partnership is to focus on priority sector lending, according to an exchange filing on Wednesday.
The interest rates offered would depend on the customer's credit profile. Mahindra Finance would serve as the point of contact for these customers, as it would also manage loan servicing, according to the co-lending agreement.
The MSME sector will continue to be a key focus area. Mahindra Finance, as a non-bank financial company, primarily serves the rural and semi-urban markets.
The partnership also comes at a time when the company's subsidiary, Mahindra Rural Housing Finance Ltd., is moving away from deep rural financing to more affordable financing.
In the second quarter, the company's net profit reported a sharp decline of 48% to Rs 235.2 crore.
Shares of Mahindra Finance were trading 1.04% higher at Rs 247.90 apiece, while SBI stock was trading 0.38% higher at Rs 567.70 apiece, compared to a 0.22% decline in the benchmark NSE Nifty 50 as of 12.45 p.m. | Banking & Finance |
A former Trump Organization executive's handwritten notes on draft financial documents could be detrimental to former President Donald Trump's defense in his civil fraud trial, a legal expert told Newsweek.
The trial, now in its eighth week, stems from New York Attorney General Letitia James' lawsuit that alleges Trump and executives at his company fraudulently inflated his wealth on his financial statements, which were used to secure loans and insurance.
Judge Arthur Engoron, who will decide the verdict in the non-jury trial, has already ruled that Trump and other defendants engaged in fraud. The trial is to decide remaining claims of conspiracy, insurance fraud and falsifying business records.
James is seeking more than $250 million in penalties and a ban on Trump doing business in New York. Trump, who is the front-runner in the race for the 2024 Republican presidential nomination, has denied wrongdoing and characterized the case as a political witch hunt by James, a Democrat.
Trump has denied involvement in preparing the annual financial documents, claiming they actually underestimated his net worth and emphasizing that disclaimers on the statements insulated him from liability for discrepancies or misstatements.
But on Tuesday, the Trump Organization's former corporate controller, Jeffrey McConney, testified it was his understanding that Trump reviewed the financial statements before they were finalized.
Trump earlier testified that he "would see them, and I would maybe, on occasion, have some suggestions," according to the Associated Press. His son, Donald Trump Jr., a Trump Organization executive vice president, testified this month that he signed off on statements as a trustee of his father's trust but left the work to outside accounting firm Mazars USA and the company's then-chief financial officer, Allen Weisselberg.
On the stand on Tuesday, lawyers for James' office presented McConney with a draft of Trump's net worth statement for 2014 which had a note in blue ink on the first page that said: "DJT TO GET FINAL REVIEW."
McConney, who worked at the Trump Organization from 1987 until February, said he had written the note. In a pretrial deposition, Trump said he did not know who had written the note on the 2014 draft document.
According to Business Insider, his testimony on Tuesday directly contradicted his testimony a day prior that he would review each year's draft net worth statement with Weisselberg, who would then provide it to Mazars. The firm cut ties with Trump last year.
McConney's handwritten notes on documents indicate it was Trump and other top executives who made final edits to the documents.
McConney's testimony "will permit Engoron to find that Trump himself approved the financial report," Stephen Gillers, a law professor at New York University, told Newsweek.
"Trump is careful to leave no written or recorded trail of what he knows. That has allowed him to blame errors on others, including employees of his organization and outside accountants, for any unlawful conduct. Even now, we can expect Trump to argue that despite McConney's sentence, in fact he did not see the report."
The draft documents with handwritten notes were handed over to the attorney general's office by Mazars, not by the Trump Organization, which could further harm Trump if Engoron draws an adverse inference about why the documents were not turned over as required by state subpoenas.
"The defense seems to have goofed here," Gillers said. "It appears to have been unaware that the attorney general had received a copy of McConney's report, with his handwritten sentence, from Mazars.
"Now not only can that sentence, along with other evidence, support a finding that Trump personally approved the inflated report, Trump's failure to produce the report with McConney's sentence will also support a finding that the report was withheld in order to avoid the true inference of Trump's knowledge and culpability. When a party to a lawsuit lies or withholds evidence in discovery, the court can find that they did so because the truth would implicate them in wrongdoing."
Newsweek has reached out to a Trump attorney via email for comment.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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About the writer
Khaleda Rahman is Newsweek's Senior News Reporter based in London, UK. Her focus is reporting on abortion rights, race, education, sexual abuse and capital punishment. Khaleda joined Newsweek in 2019 and had previously worked at the MailOnline in London, New York and Sydney. She is a graduate of University College London. Languages: English.
You can get in touch with Khaleda by emailing [email protected]
Khaleda Rahman is Newsweek's Senior News Reporter based in London, UK. Her focus is reporting on abortion rights, race, education,... Read more
To read how Newsweek uses AI as a newsroom tool, Click here. | Banking & Finance |
As crypto and blockchain technology gains more attention among regulators, many are asking what are some use cases for the industry beyond making money, all in an effort to define why it exists in the first place.
To help keep track of these use cases, Polygon Labs last month released The Value Prop, a database of the various ways web3 can be implemented. The company now has 430 total projects across 42 use cases and nine verticals, Polygon Labs exclusively shared with TechCrunch+.
Polygon Labs has been working on an initiative to provide regulators with this type of information. In June, the company wrote in a blog post that it built the database to show various ways web3 can be used in order to answer some of these questions.
Often, when people think about crypto they immediately associate it with “get rich quick” scenarios. Just think of meme coins pumping (and later dumping) and the hype around NFTs.
The 2023 economic report looked at blockchain technology and even reviewed three use cases: Walmart Canada and using blockchain technology with its supply chain; decentralized wireless network Helium; and NFTs and virtual real estate. The takeaway from the report was that those have “demonstrated only limited, if any, economic benefits so far.” But it also acknowledged that proponents still claim that the technology could find productive uses in the future as companies and governments continue to experiment with it.
This is something that has been stressed in the past by regulators in D.C. when talking about crypto or blockchain technology during hearings. Polygon’s database could potentially help them keep track of nonfinancial use cases in an easier way. | Crypto Trading & Speculation |
Michael M. Santiago/Getty Images
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Caroline Ellison leaves Manhattan Federal Court in New York City after testifying during the trial of former FTX CEO Sam Bankman-Fried, on Oct. 10, 2023. Ellison said Bankman-Fried was the main decision maker and steered her to transfer funds from FTX to Alameda Research, a financial firm she headed.
Michael M. Santiago/Getty Images
Caroline Ellison leaves Manhattan Federal Court in New York City after testifying during the trial of former FTX CEO Sam Bankman-Fried, on Oct. 10, 2023. Ellison said Bankman-Fried was the main decision maker and steered her to transfer funds from FTX to Alameda Research, a financial firm she headed.
Michael M. Santiago/Getty Images
Caroline Ellison, the former girlfriend of Sam Bankman-Fried and a top executive in his crypto business empire, has long loomed as the government's star witness in the ongoing trial of the disgraced founder of FTX.
And over a day-and-a-half of testimony in a Manhattan court, she delivered.
In testimony on Tuesday and Wednesday that got tearful at times, Ellison accused Bankman-Fried of being behind the mastermind behind a concerted effort to steal billions of dollars from customers, investors, and lenders.
And as Bankman-Fried's former girlfriend, she had intimate knowledge of both the company and of the former crypto celebrity who now faces seven criminal charges that could send him to prison for the rest of his life.
Here are five takeaways from Ellison's explosive testimony.
Painting Bankman-Fried as the mastermind
Prosecutors are trying to prove Sam Bankman-Fried engineered and orchestrated a massive fraud.
He is accused of misusing billions of dollars in FTX customer money by directing the funds to Alameda Research, an investment firm that Bankman-Fried founded before FTX, and that Ellison eventually ran.
Although Bankman-Fried's lawyers are justifying the transfer of funds as legitimate loans, prosecutors are seeking to paint it as fraud, arguing FTX customer money was used to plug financial holes at Alameda, as well as to make speculative investments, and to finance Bankman-Fried's lavish lifestyle.
In her testimony, Ellison sought time and time again to portray Bankman-Fried as the decision maker at the company she says she only nominally ran.
Ellison described Bankman-Fried as being "the one who set up the systems that allowed Alameda to take the money, and he was the one who directed us to take customer money to repay our loans."
Though Ellison was Alameda Research's CEO, she described her role as frustrating. She didn't get a raise when she was promoted, she said, and Bankman-Fried continued to make key decisions even after he left Alameda formally to focus on FTX.
"I handled a lot of day-to-day decisions and responsibilities in Alameda," she testified. "But for any major decisions, I would always run them by Sam, and I would always defer to Sam if he thought that we should do something."
When the prosecution asked her to explain why she was so deferential, Ellison noted there was always a difficult power dynamic between her and Bankman-Fried.
"I would say the whole time that we were dating, he was also my boss at work, which created some awkward situations," she said.
Describing Bankman-Fried's willingness to gamble
In her testimony, Ellison also painted Bankman-Fried as willing to take an extraordinary amount of risk with FTX's funds.
Ellison recalled Bankman-Fried's affection for games of chance — and his tolerance for risk. For example, she remembered how he once talked about being willing to lose $10 million if he drew tails in a coin flip — as long as he had the chance to win more than $10 million if he drew heads.
Bankman-Fried took that same approach to running his businesses, Ellison said.
She described how, in 2021, Bankman-Fried wanted Alameda to spend $3 billion on a series of speculative investments in start-up companies. She was charged with modeling how an investment of that size could affect Alameda's balance sheet.
Spencer Platt/Getty Images
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Ellison arrives at Manhattan Federal Court in New York City on Oct. 11, 2023, for the second day of testimony in the trial of Bankman-Fried. Ellison described desperate attempts to plug financial holes at Alameda Research.
Spencer Platt/Getty Images
Ellison arrives at Manhattan Federal Court in New York City on Oct. 11, 2023, for the second day of testimony in the trial of Bankman-Fried. Ellison described desperate attempts to plug financial holes at Alameda Research.
Spencer Platt/Getty Images
Ellison found that the $3 billion investment, as conceived, "would put Alameda in a significantly riskier position and make it much less likely or almost impossible that we would be able to pay off our loans if all of our loans were called at once."
Ellison presented those results to Bankman-Fried, and suggested that the proposed investment would be too risky given the state of Alameda's finances. But Ellison said Bankman-Fried ordered her to go through with it.
Manipulating balance sheets
Ellison described Alameda's financial position as increasingly precarious as 2022 unfolded.
She was stressed, Ellison said, and detailed how she conferred with Bankman-Fried about the balance sheet at Alameda, noting growing problems with the company's ability to pay back loans.
"This was a time of crisis for Alameda," Ellison told the court.
It was during this time period that Ellison says she and Bankman-Fried began to take even more money from FTX customers to pay back Alameda's loans. It was, she said, "the only option on the table."
In 2022, by late summer, Alameda had funneled more than $14 billion from FTX customers — all without their knowledge or consent.
"We were in a bad situation," she said.
At several times during her testimony, Ellison said Bankman-Fried directed her to manipulate spreadsheets to make Alameda's financial picture look more favorable and to ignore requests from lenders for additional information.
Over and over again, she said she did what Bankman-Fried asked her to do.
According to Ellison, when an executive at Genesis — which had provided Alameda with hundreds of millions of dollars in loans — asked for an updated balance sheet, Bankman-Fried "suggested I should find some alternate ways to present the information."
So Ellison created seven different options, and she said Bankman-Fried advised her to send a version that minimized the size of Alameda's debts, while playing up the worth the firm's holdings of FTT, a cryptocurrency Bankman-Fried created.
Michael M. Santiago/Getty Images
toggle caption
Bankman-Fried arrives for a bail hearing at Manhattan Federal Court in New York City on Aug. 11, 2023. The former FTX CEO faces seven criminal charges in an ongoing trial. If convicted, he could face the rest of his life in prison.
Michael M. Santiago/Getty Images
Bankman-Fried arrives for a bail hearing at Manhattan Federal Court in New York City on Aug. 11, 2023. The former FTX CEO faces seven criminal charges in an ongoing trial. If convicted, he could face the rest of his life in prison.
Michael M. Santiago/Getty Images
Ellison also said she disguised nearly $5 billion in personal loans Bankman-Fried and several deputies received.
As a downturn in the cryptocurrency market deepened in 2022, Alameda's situation worsened.
As Bankman-Fried and his deputies worked behind the scenes to find ways to pay back billions of dollars in loans owed by Alameda, Bankman-Fried was making public pronouncements that were at odds with what was really happening. On social media, for example, he claimed his businesses were fine.
Trying desperately to raise funds
As panic grew among the top ranks of FTX, Bankman-Fried talked a lot about how he could raise more money from lenders and investors, Ellison testified.
She said Bankman-Fried talked repeatedly about trying to get money from Mohammed bin Salman, the Crown Prince of Saudi Arabia. The plan, as she detailed it, was to use money from Saudi Arabia to pay back Alameda's lenders. But that funding never materialized.
By the fall of 2022, Ellison said, she and other executives at the company were holding onto hope, however blindly, that they could secure additional financing from someone, or that the price of cryptocurrencies would go up. That, she said, would lift up the value of the assets on Alameda's books.
"I was in a state of dread," she said.
Ultimately, however, FTX and Alameda collapsed, and in short order, FTX declared bankruptcy and Bankman-Fried was arrested. Days later, Ellison pleaded guilty to several criminal charges and agreed to cooperate with federal prosecutors in their case against Bankman-Fried.
Ellison's testimony also shed light on another incident that could land Bankman-Fried in more trouble.
In early 2021, a Chinese cryptocurrency exchange froze Alameda's trading account, and the firm lost access to approximately $1 billion in assets.
For months, Bankman-Fried tried to regain access to those assets through a variety of methods. Ellison testified how colleagues at Alameda set up accounts on the Chinese exchange tied to the identities of Thai prostitutes, hoping they could somehow use them to siphon the money away from the frozen account.
Ultimately, Ellison said, Alameda transferred $100 million in payments to what she understood to be Chinese government officials to unfreeze the account, which could constitute a bribe.
Ellison described a meeting in which a colleague whose father worked for the Chinese government protested repeatedly. Ellison said Bankman-Fried screamed at the employee to "shut the f--- up."
Judge Lewis Kaplan, who's presiding over the trial, allowed the use of that testimony "for limited purposes," — to demonstrate "the trust and confidence" Ellison and Bankman-Fried had in each other.
But Kaplan also made clear to jurors that an allegation of bribing a foreign official is not one of the charges in this trial. But at a separate trial, expected to take place next year, Bankman-Fried will face charges of bribery and bank fraud.
Why Ellison's testimony matters
Though other former top executives at FTX businesses are testifying during the trial, Ellison was always considered the most important witness.
After prosecutors first called her to the witness stand, everyone stood and faced the two wooden doors at the back of Judge Kaplan's courtroom. Moments later, Ellison was led down the center aisle to the witness stand.
When the prosecution asked Ellison if she could identify Sam Bankman-Fried for the jury, Ellison stood and squinted, and scanned the room. It took almost a minute for her to locate him.
It has been almost a year since Ellison pleaded guilty to several criminal charges, including counts of fraud and conspiracy, and agreed to cooperate with the U.S. government in its multi-count case against Bankman-Fried.
She is hoping for leniency in exchange, when she is sentenced after this trial ends.
The daughter of M.I.T. economists, Ellison was a math major at Stanford University, and in her testimony, she described how she and Bankman-Fried met at the trading firm Jane Street. She was an intern, and he was a trader.
Before long, the defendant started his own crypto-focused investment firm, called Alameda Research, and Bankman-Fried convinced Ellison to join its ranks. But their relationship wasn't strictly personal.
In 2018, she and Bankman-Fried "started sleeping together on and off," Ellison told the court. And "in the summer of 2020, we eventually started a romantic relationship."
Over the course of TK hours of testimony, she described in detail personal and professional ups and downs, and the conspiracy of which she has admitted to being an integral part.
"When you were working at Alameda, did you commit any crimes?" the prosecution asked Ellison.
"Yes," she said. "We did." | Crypto Trading & Speculation |
Department of Justice prosecutors believe disgraced FTX founder Sam Bankman-Fried leaked the diary of his sometimes girlfriend and business partner Caroline Ellison in an effort to “discredit a witness.” The contents of the 27-year-old Alameda research CEO’s private Google Docs were recently published in a New York Times article which includes entries of Ellison discussing her contentious relationship with SBF and admitting she felt unqualified to lead the company.
Hours after the Times story was published, U.S. Attorney Damian Williams made the bold claim in a court filing Thursday evening. He accused Bankman-Fried—or SBF as he’s known—of sharing the journal with a Times reporter in an effort to discredit Ellison and taint a jury pool in his fraud trial. Williams claims SBF’s attorney told the DOJ SBF had met with one of the Times reporters in person and shared documents with him that weren’t part of the government’s normal discovery material. The DOJ believes the entries quoted in the Times story, in fact, likely originated from SBF’s own Google Drive account.
SBF’s legal team did not immediately respond to Gizmodo’s request for comment.
All of that’s a problem, according to the DOJ, because civil procedure rules bar lawyers or their agents (in this case, SBF) from releasing non-public information about criminal cases if there’s “a substantial likelihood that such dissemination will interfere with a fair trial.” Other rules bar the release of statements or documents that could harm the credibility or testimony of potential witnesses. It’s expected Ellison, who’s already pleaded guilty to criminal charges, will likely testify at SBF’s criminal fraud trial later this year and say she agreed to defraud customers with SBF.
“By selectively sharing certain private documents with the New York Times, the defendant is attempting to discredit a witness, cast Ellison in a poor light, and advance his defense through the press and outside the constraints of the courtroom and rules of evidence: that Ellison was a jilted lover who perpetrated these crimes alone,” Williams wrote.
Williams requested an order from the judge preventing SBF from sharing any further extrajudicial statements.
Ellison’s diary, which came by way of various Google Docs entries, showed her at points appearing to feel overwhelmed by her role at Alameda and ruminating on her breakups with SBF. The Alameda Research head reportedly admitted she was “feeling pretty unhappy and overwhelmed” with her job just three months prior to FTX’s major implosion.
“At the end of the day I can’t wait to go home and turn off my phone and have a drink and get away from it all,” she wrote.
Elsewhere, Ellison expressed details of her fraying relationship with SBF, whom she had reportedly dated on and off. Ellison reportedly said she was worried about “making things weird” or “causing drama” with the FTX founder. In another entry directly addressed to SBF, Ellison reportedly said a previous breakup with him had “significantly decreased [her] excitement about Alameda.”
Ellison also expressed self-doubt over her ability to run Alameda, a point that SBF’s lawyers could potentially use to try and muddy her testimony. One document reportedly listing out areas where Ellsion believed she struggled included the words “decisiveness” and “leadership.”
“Running Alameda doesn’t feel like something I’m that comparatively advantaged at or well suited to do,” Ellison wrote. | Crypto Trading & Speculation |
Wall Street Giants Expect $8.9 Billion Hit From Bank Failures
In total, the six largest lenders forecast covering 56% of the $15.8 billion it cost the FDIC to protect uninsured depositors.
(Bloomberg) -- The biggest US lenders expect to pay almost $8.9 billion to help replenish the US government’s bedrock Deposit Insurance Fund after it was tapped to backstop uninsured depositors at Silicon Valley Bank and Signature Bank.
Citigroup Inc. expects to contribute as much as $1.5 billion to the Federal Deposit Insurance Corp.’s pot that was depleted to protect deposits at the two failed lenders, making it the last of the country’s biggest banks to disclose the set-asides. In total, the six largest lenders forecast covering 56% of the $15.8 billion it cost the FDIC to protect uninsured depositors. JPMorgan Chase & Co. expects to pay the largest fee, at approximately $3 billion, while Bank of America Corp. and Wells Fargo & Co. will each pay almost $2 billion.
The Deposit Insurance Fund typically covers only $250,000 in an individual bank account, but after Silicon Valley Bank and Signature fell into receivership in March, the FDIC, Federal Reserve and Treasury Department, perceiving a potential threat to the financial system, announced systemic risk exceptions for the two banks. That meant all depositors at the institutions would be made whole to prevent further destabilization.
Read More: Big Banks Face Billions in Extra FDIC Fees After SVB Failure
The fund had more than $128 billion in it at the beginning of the year — a pot that shrank with each bank failure. It’s usually filled and refilled by all insured banks kicking in quarterly fees knows as assessments, but when the government decided to cover uninsured deposits as well, it said that any losses to the fund would be recovered by a special assessment on banks, as required by law.
In May, the FDIC released a proposed rule outlining how the special assessments might be collected. The plan, which bases each institution’s fee on its estimated uninsured deposits as of December, excluding the first $5 billion, may be tweaked based on public comments, but, as it stands, big banks are on the hook.
The agency said institutions with more than $50 billion in assets would pay 95% of the fees, and those with less than $5 billion wouldn’t have to pay at all.
A week and a half before the proposal was released, First Republic Bank also failed, making an additional $13 billion dent in the Deposit Insurance Fund, the FDIC estimated at the time. But there won’t be a separate special assessment levied for First Republic, because the bank was quickly purchased by JPMorgan and a systemic risk exception wasn’t deemed necessary.
--With assistance from Hannah Levitt.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Banking & Finance |
The Sotheby's auction house has been named as a defendant in a lawsuit filed by investors who regret buying Bored Ape Yacht Club NFTs that sold for highly inflated prices during the NFT craze in 2021. A Sotheby's auction duped investors by giving the Bored Ape NFTs "an air of legitimacy... to generate investors' interest and hype around the Bored Ape brand," the class-action lawsuit claims.
The boost to Bored Ape NFT prices provided by the auction "was rooted in deception," said the lawsuit filed in US District Court for the Central District of California. It wasn't revealed at the time of the auction that the buyer was the now-disgraced FTX, the lawsuit said.
"Sotheby's representations that the undisclosed buyer was a 'traditional' collector had misleadingly created the impression that the market for BAYC NFTs had crossed over to a mainstream audience," the lawsuit claimed. Lawsuit plaintiffs say that harmed investors bought the NFTs "with a reasonable expectation of profit from owning them."
Sotheby's sold a lot of 101 Bored Ape NFTs for $24.4 million at its "Ape In!" auction in September 2021, well above the pre-auction estimates of $12 million to $18 million. That's an average price of over $241,000, but Bored Ape NFTs now sell for a floor price of about $50,000 worth of ether cryptocrurrency, according to CoinGecko data accessed today.
Investors previously sued Bored Ape creator Yuga Labs, four company executives, and various celebrity promoters including Paris Hilton, Gwyneth Paltrow, Kevin Hart, Snoop Dogg, Serena Williams, Madonna, Jimmy Fallon, Steph Curry, and Justin Bieber. The original class-action was filed in December 2022, and Sotheby's was added as a defendant in an amended complaint submitted on August 4.
Yuga describes its collection of 10,000 Bored Ape NFTs as "unique digital collectibles living on the Ethereum blockchain" that double as a "Yacht Club membership card." The website has some "members-only" areas. "When you buy a Bored Ape, you're not simply buying an avatar or a provably rare piece of art," the NFT collection's website says. "You are gaining membership access to a club whose benefits and offerings will increase over time. Your Bored Ape can serve as your digital identity, and open digital doors for you."
Lawsuit: Yuga “colluded” with Sotheby’s
The amended lawsuit alleges that "Yuga colluded with fine arts broker, Defendant Sotheby's, to run a deceptive auction." After the sale, a Sotheby's representative described the winning bidder during a Twitter Spaces event as a "traditional" collector, the lawsuit said.
The lawsuit said it turned out the auction buyer was now-bankrupt crypto exchange FTX, whose founder Sam Bankman-Fried is in jail awaiting trial on criminal charges. Ethereum blockchain transaction data shows that after the auction, "Sotheby's transferred the lot of BAYC NFTs to wallet address 0xf8e0C93Fd48B4C34A4194d3AF436b13032E641F3,77 which, upon information and belief, is owned/controlled by FTX," the complaint said. Speculation that FTX was the buyer had been percolating since at least January 2023.
The lawsuit alleges that Yuga Labs and Sotheby's violated the California Unfair Competition Law, the California Corporate Securities Law, the US Securities Exchange Act, and the California Corporations Code. The plaintiffs also claim that Sotheby's Metaverse, an NFT trading platform opened after the auction, "operated (or attempted to operate) as an unregistered broker of securities."
"FTX has several deep ties to Yuga such that it would be mutually beneficial for both Yuga and FTX (as well as Sotheby's) if the BAYC NFT collection were to rise in price and trading volume activity. Upon information and belief, given the extensive financial interests shared by Yuga, Sotheby's and FTX, each knew that FTX was the real buyer of the lot of BAYC NFTs at the Sotheby's auction at the time that Sotheby's representatives were publicly representing that a 'traditional' buyer had made the purchase," the lawsuit said. FTX is not named as a defendant.
Ape prices soared, then plummeted
After the auction, the price of Bored Ape digital assets hit a new high and kept rising for months. It peaked at over $420,000 in April 2022 but plummeted to about $90,000 six weeks later, according to CoinGecko.
The class action lawsuit's named plaintiffs are Johnny Johnson, Ezra Boekweg, Mario Palombini, and Adam Titcher. They are trying to get certification of a class consisting of "all investors who purchased Yuga's non-fungible tokens ('NFTs') or ApeCoin tokens ('ApeCoin') between April 23, 2021 and the present." There were over 103,000 account holders of Yuga securities as of December 1, 2022, the lawsuit said.
"While the Executive Defendants made hundreds of millions of dollars, investors were left with NFTs worth a fraction of their artificially inflated value," the original version of the complaint in December said.
Yuga and other defendants have a September 12 deadline to file motions to dismiss the complaint. Sotheby's told CNN this week that the "allegations in this suit are baseless, and Sotheby's is prepared to vigorously defend itself." Yuga Labs similarly called the allegations "completely without merit or factual basis." | Crypto Trading & Speculation |
NEW YORK, Nov 6 (Reuters) - Donald Trump complained of unfair treatment in defiant and rambling testimony on the witness stand at his New York civil business-fraud trial on Monday, prompting the judge to threaten to cut his testimony short.
Under questioning about his company's accounting practices, the former U.S. president repeatedly clashed with Judge Arthur Engoron, who is weighing whether to impose hundreds of millions of dollars in fines and other penalties that could hobble the real estate empire that vaulted Trump to prominence.
Engoron warned Trump, the frontrunner for the Republican nomination in the 2024 election, that he might remove him from the witness stand if he did not answer questions directly.
"Mr Kise, can you control your client?" Engoron asked Trump's lawyer, Christopher Kise. "This is not a political rally. This is a courtroom."
Trump often avoided direct answers, instead bragging about his properties and his wealth and questioning the motivations of New York Attorney General Letitia James, a Democrat, who brought the case.
"This is a political witch hunt and I think she should be ashamed of herself," he said.
Amid the fireworks, Trump acknowledged that his company did not provide accurate estimates of the value of apartment towers, golf courses and other assets. New York state lawyers said those values were pumped up to win better financing terms, and Engoron has already ruled that they were fraudulent.
But Trump said many of them, such as his Mar-a-Lago estate and Doral golf course in Florida were undervalued. He acknowledged that his Trump Tower residence in New York and his Seven Springs estate north of the city were overvalued.
He said that should not matter because the estimates included language saying they might not be accurate and banks did not take them seriously.
"You’ve made it important, but it wasn’t," Trump said of the estimates.
STATE SAYS LENDERS, INSURERS MISLED
New York state lawyers said in their lawsuit that the estimates misled lenders and insurers, earning him $100 million and exaggerating his wealth by $2 billion.
Trump accused legal authorities of paying unduly close attention to his business after he won the 2016 presidential election.
"I’m sure the judge will rule against me because he always rules against me," he said.
"This is a very unfair trial, very, very unfair and I hope the public is watching," he added later.
James brushed aside Trump's attacks ahead of his testimony.
"At the end of the day, the only thing that matters are the facts and the numbers. The numbers, my friends, don't lie," James said outside the courthouse.
At one point when Trump was on the stand, Engoron asked Kise to take Trump to the back of the courtroom and "explain the rules."
"The former and again soon to be president of the United States understands the rules," Kise responded.
Unlike the four criminal cases Trump faces, this civil trial does not threaten to put him in prison as he mounts a comeback White House bid.
James is seeking $250 million in fines, as well as restrictions that would prevent Trump and his sons Eric and Donald Jr. from doing business in their home state.
Engoron has issued a ruling that could strip Trump's control of some of his best known properties, though that order is on hold during appeal.
TROPHY PROPERTIES IN SPOTLIGHT
Evidence introduced at trial so far has revealed that Trump Organization officials, including Trump's sons Eric and Donald Jr., tried to manipulate the assessed value of trophy properties including Mar-a-Lago.
One witness, his former lawyer and fixer Michael Cohen, testified that Trump directed him to doctor financial statements to boost his net worth.
In testimony last week, Trump's sons said they were unfamiliar with the details of the valuation documents. Trump made that argument as well, saying accountants and others working for him were responsible. Asked who at the company was responsible for preventing fraud, the elder Trump said: "Um, everybody."
Engoron has fined Trump $15,000 for twice violating a limited gag order that prevents him from criticizing court staff. Trump's lawyers have chafed at that order and indicated they might use it as the basis for an appeal, but Engoron expanded it on Friday to cover them as well.
Trump's crowded legal calendar threatens to take him off the campaign trail for much of next year.
Republican voters do not seem to be bothered by his legal woes, as opinion polls show he holds a commanding lead in the party's presidential nominating contest.
The trial was originally scheduled to run through early December but could wrap up sooner as the state calls its final witnesses this week. It is unclear how many witnesses the defense will call.
Trump's daughter Ivanka is due to testify on Wednesday, though she is not a defendant in the case.
Reporting by Jack Queen and Luc Cohen; Additional reporting and writing by Andy Sullivan; Editing by Scott Malone, Lisa Shumaker and Grant McCool
Our Standards: The Thomson Reuters Trust Principles. | Real Estate & Housing |
Nov 20 (Reuters) - The U.S. Justice Department is seeking more than $4 billion from Binance Holdings as part of a proposed resolution of a years-long investigation, Bloomberg News reported on Monday, citing people familiar with the discussions.
Negotiations between the Justice Department and Binance include the possibility that the cryptocurrency exchange's founder, Changpeng Zhao, would face criminal charges in the United States, the report said.
Any resolution is likely to play a crucial role in investor sentiment toward crypto, which has taken a hit over a wave of government investigations and charges against firms and individuals in the industry, including the recent fraud conviction of FTX founder Sam Bankman-Fried.
The industry also was shaken by several high-profile collapses last year, but is looking to regain some footing after getting a vote of confidence from some traditional financial institutions.
A source familiar with the investigation said the long-running government probe was nearing conclusion, but did not give specific information on penalties or exact timeline. The Bloomberg report said an announcement on the resolution could come as soon as the end of this month.
Binance did not immediately respond to a Reuters request for comment. A spokesperson for the Justice Department declined to comment.
UNDER SCRUTINY FOR YEARS
Binance has been under Justice Department's scrutiny since at least 2018, Reuters reported last year. Federal prosecutors asked the company in December 2020 to provide internal records about its anti-money laundering efforts, along with communications involving Zhao, Reuters has reported.
The DOJ probe is one of a string of legal and regulatory headaches the world's biggest crypto exchange faces in the United States.
In June, the Securities and Exchange Commission (SEC) sued Binance and Zhao, accusing them of operating an "elaborate scheme to evade U.S. federal securities laws."
Binance denied the SEC's allegations and said it would "vigorously defend" its platform.
The Commodity Futures Trading Commission also sued the exchange in March for "willful evasion" of U.S. commodities law, alleging that Binance and Zhao operated an "illegal" exchange and a "sham" compliance program.
Zhao called those charges an "incomplete recitation of the facts."
At least a dozen executives have left the exchange in recent months, including Binance's chief strategy officer, general counsel and chief product officer.
Reporting by Niket Nishant in Bengaluru and Tom Wilson in London; Aditional reporting by Chris Prentice in New York; Editing by Arun Koyyur, Maju Samuel and Bill Berkrot
Our Standards: The Thomson Reuters Trust Principles. | Crypto Trading & Speculation |
June 5 (Reuters) - The world's largest crypto exchange Binance and its CEO and founder Changpeng Zhao were sued by the U.S. Securities and Exchange Commission on Monday for failing to restrict U.S. customers from its platform and misleading investors about its market surveillance controls, as well as for operating an unregistered securities exchange.
The SEC’s complaint, filed in federal court in Washington, D.C., also alleged that Binance and Zhao secretly control customers’ assets, allowing them to commingle and divert customer funds, and that Binance created separate U.S. entities “as part of an elaborate scheme to evade U.S. federal securities laws.”
Binance did not immediately respond to a request for comment on the charges. In a tweet, Zhao said the company would issue a response once it had viewed the complaint.
The move is the latest in a series of legal woes for Binance, which was also sued by the U.S. Commodity Futures Trading Commission (CFTC) in March for operating what the regulator alleged were an "illegal" exchange and a "sham" compliance program, with Zhao calling those charges "disappointing” and an “incomplete recitation of facts.”
Binance is also under investigation by the Justice Department for suspected money laundering and sanctions violations, according to people familiar with the probe.
The world's biggest crypto exchange, Binance was founded in Shanghai in 2017 by CEO Changpeng Zhao, a Canadian citizen born and raised until the age of 12 in China.
While its holding company is based in the Cayman Islands, Binance says it does not have a headquarters and has declined to state the location of its main Binance.com exchange.
Binance's global trading platform, Binance.com dominates the crypto trading landscape, last year processing trades worth about $65 billion a day with up to 70% of the market.
The firm has processed at least $10 billion in payments for criminals and companies seeking to evade U.S. sanctions, Reuters has previously reported.
Reuters also reported on May 23 that Binance commingled its customers’ funds with its corporate revenues in Silvergate Bank account belonging to trading firm Merit Peak, in breach of U.S. financial rules that require client money to be kept separate.
Binance denied mixing customer deposits and company funds, saying that users who sent money to the account were not making deposits but rather buying Binance’s bespoke dollar-linked crypto token.
Our Standards: The Thomson Reuters Trust Principles. | Crypto Trading & Speculation |
- The child poverty rate surged to 12.4% in 2022, up from 5.2% in the year prior, according to the Census Bureau.
- The bureau attributed the increase in child poverty to the expiration of expanded child tax credits and the end of stimulus checks.
- The U.S. had made historic gains in fighting child poverty during the pandemic due in large part to the expanded tax credits.
Child poverty more than doubled in the U.S. last year after financial assistance that supported families during the earlier days of the Covid pandemic expired, the Census Bureau said Tuesday.
The child poverty rate surged to 12.4% in 2022, up from 5.2% in the year prior, according to the bureau's data. The Census Bureau attributed the increase to the expiration of expanded child tax credits and the end of stimulus checks that helped keep people afloat during the economic downturn caused by Covid.
As pandemic-era financial assistance fell by the wayside, families were also under significant pressure from inflation. The cost of living surged 7.8% from 2021 to 2022, the largest annual increase since 1981, according to the Census Bureau.
The U.S. had made historic gains in fighting child poverty during the pandemic due in large part to the expanded tax credits. The child poverty rate fell 46% in 2021 to the lowest level on record, according to Census data released last year.
But the end of key pandemic benefits and surging inflation wiped out that progress. Liana Fox, a Census official, told reporters during a press conference Tuesday that child poverty returned to its levels prior to the pandemic.
The overall poverty rate also spiked by nearly 5%, the first increase since 2010, according to the data. The median income of all workers fell 2.2% in 2022 compared to the year prior, according to the Census.
The Democratic-led Congress injected nearly $2 trillion of stimulus into the economy through the American Rescue Plan in March 2021. The Democrats passed the relief without a single Republican vote through a process called budget reconciliation.
The massive aid package significantly increased child tax credits on a temporary basis. Working families received $3,600 for children under the age of 6 and $3,000 for kids ages 6 to 17. The legislation also provided a third round of stimulus checks, following earlier relief under the Trump administration.
The expanded child tax credits expired at the end of 2021. Republicans won control of the House in the 2022 midterm elections and Congress has been unable to reach an agreement to restore the credits.
President Joe Biden, in a statement Tuesday, blamed the GOP for the lapse of the tax credits and vowed to fight to restore those benefits as he campaigns for a second term in office.
"The rise reported today in child poverty is no accident — it is the result of a deliberate policy choice congressional Republicans made to block help for families with children while advancing massive tax cuts for the wealthiest and largest corporation," Biden said.
The Census data showing a spike in child poverty does not take into account the end of several other pandemic benefits this year. Expanded food benefits lapsed in March, and millions of people have been kicked off Medicaid after protections that kept people enrolled in the program expired last spring.
Researchers at Georgetown University estimate that more than 760,000 children have lost Medicaid coverage. The federal government has warned states that many children may have been kicked off despite still being eligible for the program.
The data published by the Census Bureau on Tuesday differs from the official poverty rate, which remained essentially unchanged at 11.5% in 2022.
The official poverty rate looks at people's income before taxes and does not include stimulus payments and tax credits. The Census data that showed child poverty doubling is an alternative measure that looks at income after taxes and includes these benefits. | Inflation |
Financial services giant Fidelity has a rule for retirement savings you may have heard of: Have 10 times your annual salary saved for retirement by age 67. This oft-cited guideline can help you identify a retirement savings goal, but it doesn’t fully account for how much of those savings will cover in retirement.
Enter Fidelity’s 45% rule, which states that your retirement savings should generate about 45% of your pretax, pre-retirement income each year, with Social Security benefits covering the rest of your spending needs.
A financial advisor can analyze your income needs and help you plan for retirement. Find an advisor today.
The financial services firm analyzed spending data for working people between 50 and 65 years old and found that most retirees need to replace between 55% and 80% of their pre-retirement income in order to preserve their current lifestyle. Because retirees have lower day-to-day expenses and don’t typically contribute to retirement accounts, their income requirements are lower than people who are still working.
As a result, a retiree who was earning $100,000 a year would need between $55,000 and $80,000 per year in Social Security benefits and savings withdrawals (including pension benefits) to continue their current lifestyle.
Fidelity’s 45% guideline dictates that a retiree’s nest egg should be large enough to replace 45% of their pre-retirement, pretax income each year. Following this rule, the same retiree who was earning $100,000 per year would need enough saved up to spend $45,000 a year, in addition to his Social Security benefits, to fund his lifestyle. Assuming the person lives another 25 years after reaching retirement age, this person would need $1.125 million in savings.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Pre-Retirement Income Plays an Important Role
But all retirement spending plans aren’t equal. Those who earned less money during their careers will have less saved than high earners, and as a result, will need to replace a larger proportion of their pre-retirement income.
“Your salary plays a big role in determining what percentage of your income you will need to replace in retirement,” Fidelity wrote in its most recent Viewpoints. “People with higher incomes tend to spend a small portion of their income during their working years, and that means a lower income replacement goal in percentage terms to maintain their lifestyle in retirement.”
According to Fidelity, a person who makes $50,000 per year would need savings and Social Security to replace approximately 80% of his income in retirement. An individual earning $200,000, however, could get by in retirement by replacing just 60%.
Social Security plays a less significant role in the retirement plans of higher-earning workers. Consider the table below:
Replacing Income Using Fidelity’s 45% Rule Pre-Retirement Income Replacement Rate From Savings Replacement Rate From Social Security Total Replacement Rate $50,000 45% 35% 80% $100,000 45% 27% 72% $200,000 45% 16% 61% $300,000 44% 11% 55%
According to Fidelity, a retiree who made $50,000 per year would receive 35% of that income via Social Security. But a high-earning individual who made $300,000 per year would only see 11% of his income replaced by Social Security benefits. While higher-earning individuals don’t need to replace as much of their pre-retirement income, retirement savings plays a more important role for these types of retirees.
Bottom Line
Fidelity’s 10x rule of thumb is a nifty guideline to follow as you save for retirement over the course of many decades. But when retirement arrives, Fidelity recommends that your savings should cover 45% of your income needs, with Social Security covering the rest. As a result, the average retiree will need to replace between 55% and 80% of his pre-retirement, pretax income to maintain his current lifestyle.
Tips for Retirement Planning
A financial advisor can be an invaluable resource when it comes to planning for retirement. Whether it’s saving in tax-advantaged accounts or mapping out your income needs, an advisor can help you with your retirement planning needs.
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ITR Filing 2023: 3 Crore ITRs For AY 2023-24 Filed Till July 18, Says Income Tax Department
The department thanked taxpayers & tax professionals for helping it reach the milestone 7 days early, compared to last year
The Income Tax Department on Wednesday said that over 3 crore Income Tax Returns (ITRs) have been filed till July 18.
In a tweet, the department thanked taxpayers and tax professionals for helping it reach the milestone 7 days early this year, compared to last year.
"Over 3 crore ITRs for AY 2023-24 have already been filed till 18th of July this year as compared to 3 crore ITRs filed till 25th of July last year," the department said.
"Out of the 3.06 crore ITRs filed till 18th July 2023, 2.81 crore ITRs have been e-verified i.e. more than 91% ITRs filed have been e-verified! Out of the e-verified ITRs, more than 1.50 crore ITRs have already been processed!," it added.
The department once again urged all those who haven't filed ITR for AY 2023-24, to file their ITR at the earliest to avoid last minute rush.
Grateful to our taxpayers & tax professionals for having helped us reach the milestone of 3 crore Income Tax Returns (ITRs), 7 days early this year, compared to the preceding year!— Income Tax India (@IncomeTaxIndia) July 19, 2023
Over 3 crore ITRs for AY 2023-24 have already been filed till 18th of July this year as compared⦠pic.twitter.com/jcGyirW2wa
ITR Filing Deadline
The Finance Ministry is not planning to extend the July 31 deadline for income tax return filing, Revenue Secretary Sanjay Malhotra has said.
He also advised income taxpayers to file their return at the earliest.
"We expect that the filing would be higher than the last year... we are hopeful that it should be more than the last year," he told news agency PTI during an interview.
About 5.83 crore income tax returns were filed as on July 31 last year, the last day for filing returns for the assessment year 2022-23.
"We would like to thank income tax return filers as ITR filing has been at a much faster pace than last year and we would advise them not to wait to the last moment and also not to hope for any extensions. So, I would advise them to file their tax return at the earliest because the deadline of July 31 is approaching fast," he said. | Banking & Finance |
Retailers offer big deals for Black Friday but will shoppers spend?
Expect big discounts and other enticements to lure shoppers to stores for Black Friday
NEW YORK -- Expect big discounts and other enticements to lure shoppers to stores for Black Friday. But retailers worry those may not be enough.
Consumers are coming under pressure as their savings dwindle and their credit card debt grows. And although they have gotten some relief from easing inflation, many goods and services like meat and rent are still far higher than they were just three years ago.
Barbara Lindquist, 85, from Hawthorne Woods, Illinois, said she and her husband plan to spend about $1,000 for holiday gifts for her three adult children, 13 grandchildren and three great-grandchildren. That’s about the same as last year.
But Lindquist, who continues to work as a pre-school teacher at a local church, said she’ll be more focused on deals given still high prices on meat and other staples. And she plans to buy more gift cards, which she believes will help her stick to her budget.
“I go for value,” said Lindquist, who just picked up discounted sheets and towels at Kohl’s for friends who will be visiting from Panama during the holidays.
Many retailers had already ordered fewer goods for this holiday season and have pushed holiday sales earlier in October than last year to help shoppers spread out their spending. An early shopping push appears to be a trend that only got more pronounced during the pandemic when clogs in the supply network in 2021 made people buy early for fear of not getting what they wanted.
But retailers said that many shoppers will be focusing more on deals and will likely wait until the last minute. Best Buy said it’s pushing more items at opening price points, while Kohl’s has simplified its deals, promoting items under a certain price point like $25 at its stores.
Target said shoppers are waiting longer to buy items. For example, instead of buying sweatshirts or denim back in August or September, they held out until the weather turned cold.
“It’s clear that consumers have been remarkably resilient,” Target's CEO Brian Cornell told analysts last week. “Yet in our research, things like uncertainty, caution and managing a budget are top of mind.”
The National Retail Federation, the nation’s largest retail trade group, expects shoppers will spend more this year than last year, but their pace will slow given all the economic uncertainty.
The group has forecast that U.S. holiday sales will rise 3% to 4% for November through December, compared with a 5.4% growth of a year ago. The pace is consistent with the average annual holiday increase of 3.6% from 2010 to pre-pandemic 2019. Americans ramped up spending during the pandemic, with more money in their pockets from federal relief checks and nowhere to go during lockdowns. For the holiday 2021 season, sales for the two-month period surged 12.7%.
Online discounts should be better than a year ago, particularly for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending. It predicts toys will be discounted on average by 35%, compared with 22% a year ago, while electronics should see 30% cuts, compared with last year's 27%. In clothing, shoppers will see an average discount of 25%, compared with 19% last year, Adobe said.
Analysts consider the five-day Black Friday weekend — which includes the Monday after the holiday known as Cyber Monday — a key barometer of shoppers’ willingness to spend. And Black Friday is expected to be once again the busiest shopping day of the year, according to Sensormatic Solutions, a firm that tracks store traffic. On average, the top 10 busiest shopping days in the U.S are expected to once again account for roughly 40% of all holiday retail traffic, Sensormatic said.
Marshal Cohen, chief retail adviser at Circana, a market research firm, said he thinks that shoppers will just stick to a list and not buy on impulse. He also believes they will take their time buying throughout the season.
“There's no sense of urgency,” Cohen said. “The consumers are saying, ‘I will shop when it’s convenient for me.'”
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Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio | Consumer & Retail |
- Ripple said on Wednesday that it has obtained a full license to operate in Singapore, its Asia-Pacific headquarters since 2017.
- "We have hired exceptional talent and local leadership, doubling headcount over the past year and plan to continue growing our presence in a progressive jurisdiction like Singapore," CEO Brad Garlinghouse said in a statement.
- It comes as Ripple continues to spar with the U.S. Securities and Exchange Commission over a lawsuit.
Cryptocurrency company Ripple said on Wednesday that it has obtained a major payments institution license in Singapore, a strategic step toward growing its presence in the Asia-Pacific region.
The new development comes less than four months after the Monetary Authority of Singapore granted an initial in-principle approval in June. With the full license, Ripple will continue to provide regulated crypto payment services in Singapore.
"Over 90% of Ripple's business is outside of the U.S., and Singapore – and to a larger degree Asia Pacific – is one of its fastest growing regions," the company said.
Ripple said it will continue to prioritize the region for adoption of its crypto payment services.
Monica Long, president of Ripple, told CNBC in an interview last month that the Singapore office's "headcount has more than doubled in the past year because our business within the Asia-Pacific region has really exploded."
Singapore has led crypto regulation in the region. The country's Payment Services Act — which regulates payment services and the provision of crypto services to the public — has been in effect since January 2020.
The city-state has also stepped up scrutiny on crypto firms. It ordered crypto service providers to safekeep customer assets under a statutory trust before the end of 2023. It also restricts such firms from facilitating lending or staking of their retail customers' assets.
"Since establishing Singapore as our Asia Pacific headquarters in 2017, the country has been pivotal to Ripple's global business. We have hired exceptional talent and local leadership ... and plan to continue growing our presence in a progressive jurisdiction like Singapore," Brad Garlinghouse, CEO of Ripple, said in a statement.
"Under MAS' leadership, Singapore has developed into one of the leading fintech and digital asset hubs striking the balance between innovation, consumer protection and responsible growth," said Garlinghouse.
The comment stand in contrast to Ripple's situation in the U.S., where it and Coinbase are embroiled in lawsuits with the Securities and Exchange Commission. The SEC charged Ripple and its founders in 2020, alleging they illegally sold its native cryptocurrency XRP without first registering it with the SEC. But in July, a landmark ruling determined the token was not, in itself, necessarily a security.
Coinbase, Ripple and other crypto firms have slammed the U.S. for a lack of clarity around crypto rules and threatened to leave the country in response to the SEC's crackdown.
Coinbase announced on Monday that it has obtained a major payment institution license in Singapore, after obtaining in-principle approval about a year ago. Ripple and Coinbase join more than a dozen firms that are licensed to offer crypto services in Singapore. | Crypto Trading & Speculation |
The prices of food staples such as oil and milk are finally "edging down", even though shopping bills remain high, new data suggests.
Research firm Kantar said shoppers paid on average £1.50 for four pints of milk in July, down from £1.69 in March.
The average cost of a litre of sunflower oil, meanwhile, is now £2.19, which is 22p less than in the spring.
It comes as grocery inflation - the rate at which overall food prices rise - remains high but is starting to ease.
Prices increased by 12.7% on an annual basis in the four weeks to 6 August, according to Kantar, which tracks the spending habits of 36,000 UK households.
That is down from 14.9% a month earlier.
Food prices surged last year, in large part because of the Ukraine war, but there are signs the pressures may be beginning to ease as wholesale prices come down.
The major supermarkets have also begun to cut the price of basics such as eggs, milk and loo roll as they face pressure to do more to help struggling shoppers.
It follows criticism that they have not passed on falling wholesale prices to customers - claims that they deny.
Fraser McKevitt, head of retail and consumer insight at Kantar, said that UK grocery prices overall were "still up year on year across every supermarket shelf", but that consumers "will have been relieved" to see the cost of some staples fall compared with earlier in the year.
Shoppers also continue to seek ways to cut their grocery bills, he said, such as shopping at discounters Aldi and Lidl or buying cheaper supermarket own-label goods.
Sales of own-label goods remained popular last month, Kantar found, climbing 9.7% on an annual basis. In what may be a sign of growing consumer confidence, however, it said sales of more expensive branded groceries also started to pick up.
It comes despite separate research from consumer group Which? that found the price of some branded goods on supermarket shelves has more than doubled in the last 12 months.
The consumer champion, which tracked almost 26,000 food products at eight major supermarkets, found:
- a six-pack of Mr Kipling chocolate slices at Tesco was the branded product that rose the most in price, going from £1.16 on average in 2022 to £2.66 in July 2023
- 1kg of Lancashire Farm natural yoghurt at Asda increased from £1 to £1.80 - up 80%
- 180g of Pilgrims Choice extra mature grated cheddar at Morrisons went from £1.20 to £2.11 - a rise of 76%.
The BBC has contacted the supermarkets for comment.
Food prices have been one of the biggest contributors to the UK's overall rate of inflation which remains stubbornly high.
New figures, due on Wednesday, are expected to show that the overall pace of UK price rises slowed to around 6.9% in July, down from 7.9% in June.
Even with grocery inflation easing, food prices are expected to remain high for the rest of the year, according to the Bank of England, leaving millions of households under pressure.
Huw Pill, its chief economist, said last week that the return of lower food prices is "something we may not be seeing for a while yet, if in the future at all". | Inflation |
When I leave the house these days, I just feel so much anxiety. Everywhere I turn I can only see how expensive things are getting. Milk has gone up. Bread has gone up. Clothes have gone up. As a single mother, I’m struggling so much to keep up with all the expenses that I have to face. And now, the fees to renew my visa are going up as well. When I found out about that, it really felt like the last straw.
The government announced in July that it is raising the fees charged to migrants like me for visa applications and NHS access – some of them starting from this week – so that it can pay higher wages to doctors and others in the public sector. I definitely think public sector workers deserve a pay rise, but why is it people like me who have to pay for it?
I have lived in the UK for 15 years. I was here during the pandemic – I was working in a supermarket, as I am now, making sure that people could buy their food and survive. I was worried all the time, constantly thinking about how I could protect my 10-year-old son and keep safe. Everyone was clapping for us key workers, but I was just clinging on, hoping for better times to come.
But better times haven’t come yet, and now the Home Office is making things a lot worse for people like me and my son – many of whom have been working and paying tax in this country for many years. Under these plans, the cost of the immigration health surcharge alone will rise from £624 to £1,035 a year for each person. That’s up 417% since this time five years ago, when the charge was £200.
Migrants are required to pay the fee upfront, so for someone moving here now, that could mean a payment of £5,175 for five years in health fees alone. Even before this hike, people like me already pay £2,608 every 30 months to renew an adult visa, which includes the NHS surcharge. It has to be paid, even though I’ve lived here for so long and even though I pay my taxes and national insurance just like everyone else.
Now that the government is raising the fees, I don’t know what I’m going to do. Next year, it will be time for me to renew my visa again. I think it’s going to cost me more than £3,800 this time. Without a visa, I would lose everything. I wouldn’t be able to work any more, rent my home, have a bank account or go to hospital if I needed to. But on a supermarket worker’s salary, where am I supposed to find the money?
I moved to the UK in 2007. To survive, I had to rely on friends and on what my parents back in Bangladesh could send. I ended up in debt just so I could keep paying my fees to the Home Office. Since then, I’ve been making ends meet and playing a part in my local community – I work and pay rent and my son is in school. He really likes to go to school every day and he loves maths – it’s his favourite subject, he’s really good at it. He has plenty of friends and they often play football together. But since I found out that I’m going to have to pay higher fees, I’ve been cutting expenses everywhere I can. I have told my son that from next month he won’t be able to go to his swimming lessons and I already had to stop his tuition in literacy and English – we can’t afford it any more. I just want to give him a better life, but I can’t do it like this.
The government should help people like me make sure that our children are safe, have enough to eat and can live well. It shouldn’t be this hard for us to look after our families. Instead, we are being forced to get into debt to pay for ever-rising visa fees.
I support pay rises for doctors, teachers and the police as much as anyone, but it’s hard to understand why it’s people who are already struggling who are expected to foot the bill and not those who can better afford it. After all, I was treated like a key worker during the pandemic, too. Have they forgotten about us already?
Monira Khatun is a supermarket worker who lives in London. Migrant rights charity Praxis supported Monira to submit her latest visa renewal application
Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. | Inflation |
Alternative investment platform Yieldstreet announced today that it has agreed to acquire Cadre, an online real-estate-focused investment platform aimed at institutional and high net worth investors.
Financial terms of the deal were not disclosed.
Founded in 2015, Yieldstreet gives people a way to invest in areas like real estate, marine/shipping, legal finance, commercial loans and other opportunities that were previously only open to institutional investors. Milind Mehere and Michael Weisz co-founded Yieldstreet with the mission of making investing more inclusive for non-institutional investors.
Cadre, founded by Ryan Williams and Joshua and Jared Kushner in 2014, is an online marketplace that helps connect accredited investors to real estate operators. It claimed to give investors a way to delve into commercial real estate deals in “a far more transparent way.” The company was once valued at $800 million but its value has reportedly dropped sharply in recent years. The Information reported earlier this year that an acquisition by Yieldstreet could value the company at around just $100 million. It has raised more than $133 million in debt and venture funding from investors such as Andreessen Horowitz, General Catalyst, Khosla Ventures, Goldman Sachs and Thrive Capital, among others.
The two companies have a collective investment value — defined as the combined capitalized transaction value in real estate equity plus committed amounts across all other investments since inception in 2014 and 2015 — of more than $9.7 billion. Investors have allocated a combined $5.3 billion on the platforms and received $3.1 billion in returns to date, according to a statement by Yieldstreet.
Together, Yieldstreet and Cadre serve more than 500,000 members across eight institutional and retail distribution channels — 450,000 of which come from Yieldstreet and 50,000 from Cadre.
Both companies are based in New York.
Williams will remain CEO of Cadre and spearhead a new division focused on broadening access to the institutional audience as Yieldstreet’s global head of Institutional Partnerships & Clients. Mike Fascitelli, an investor in and advisor to Cadre, will now serve as the global chairman of real estate and head of Cadre’s investment committee.
TechCrunch has reached out to Yieldstreet for additional details and will update the story as we get them.
Want more fintech news in your inbox? Sign up for The Interchange here. | Real Estate & Housing |
Brandon Bell/Getty Images
toggle caption
People shop at a mall in Houston, Texas.
Brandon Bell/Getty Images
People shop at a mall in Houston, Texas.
Brandon Bell/Getty Images
It's a tentative sort of anxiety. Large store chains such as Walmart, Home Depot and T.J.Maxx are steeling for a tricky year, given that shoppers have begun cutting back — but how much further? Some retailers, such as Best Buy and Macy's, are already feeling the slowdown.
More than a dozen retailers have dropped a flurry of financial reports in recent weeks. They have a broad view of consumer spending, which is a key driver of the U.S. economy. Here's what they say.
People are still spending, though stores' forecasts are cautious
Discounts during the holidays and a fairly warm January brought shoppers out to malls and department stores in a surprise shopping spree to start the year. Big-box and food giants — Walmart, Costco, Target, Kroger, McDonald's and others — reported growing sales thanks to higher prices on food and essentials.
McDonald's CEO Chris Kempczinski said the U.S. may see a "mild to moderate" recession and that U.S. inflation will continue but has likely peaked:
"Overall, the consumer, whether it's in Europe or in the U.S., is actually holding up better than what we would have probably expected a year ago or six months ago."
Arun Sundaram, who tracks many retail and food companies at the equity research firm CFRA, says companies were stung by the unexpected twists of last year, including soaring inflation and the war in Ukraine. So they want to set low expectations for another uncertain year.
Walmart CEO Doug McMillon cited "a lot of unknown unknowns" even as he forecast growth in store sales for the year:
"Customers are still spending money. ... It's obviously not as clear to us what the back half of the year looks like. ... We could tilt into a recession. We don't know what happens to consumer spending. We don't know what happens to layoffs, household income."
Food and beauty products are the splurges of the moment
Shoppers are being choosy (or "choiceful," as Walmart put it) as they buy fewer electronics, for example, spending that money instead on essentials. We heard this from Kohl's, Walmart, Target — and Best Buy, which forecast that 2023 will be the worst year yet for sales of computers and other consumer electronics.
High food inflation has meant more spending on groceries, which led to Kroger making one of the most optimistic sales forecasts for the year. Fast food prices have also increased, and Wendy's CFO Gunther Plosch said its stores haven't seen "any visible pushback from consumers." (He added that Wendy's itself saw the biggest inflation on fries — and biggest price decrease on beef.)
Makeup, skincare and perfume counters are other places where shoppers are splurging. Target and Kohl's (which has a deal with Sephora) both called out high spending on beauty products as one way they're offsetting loss of interest in other departments.
We're shifting more spending toward travel and activities
Home Depot blamed a recent slowdown in shopping on, among other things, shoppers dedicating more of their budgets to outings and trips. The retailer said people are still renovating and doing projects, but spending more carefully on big-ticket items like appliances, grills or patio furniture.
Best Buy and Macy's highlighted the same trend. Macy's CEO Jeff Gennette said he expected people of all incomes to feel financial pressure this year:
"On the surface, the consumer is in better shape than 2019. Jobs and wages are strong, and savings levels are elevated relative to historic levels. But ... inflation has surpassed wage growth, and revolving credit is rising. ... [We] expect the allocation of disposable income to continue shifting toward services and essential goods. ... [But] we believe the desire to be with loved ones, go on vacation, and attend events has not diminished, and expect gift-giving and occasion-based demand to continue.
In that vein, Costco's CFO Richard Galanti mentioned some tentative signs that people may be starting to spend more on things that they may need for activities, like camping and water-sports gear. He also flagged easing inflation:
"We continue to see some improvements in many items, commodity prices are starting to fall – not back to pre-COVID levels in some examples, but continue to provide some relief – things like chicken, bacon, butter, steel, resin, nuts...Our average transactions, our shopping frequency is up...So those things bode well, but people certainly are spending their dollars where they feel like they should be spending them."
(Wealthier) Shoppers are switching to cheaper stores and to store brands
Fast food spots like Wendy's are seeing more higher-income customers, who may be switching from pricier restaurants. These wealthier shoppers are also key drivers of Walmart's growing grocery sales.
Dollar stores and discounters like T.J.Maxx are reporting growing sales, with new shoppers coming to Dollar Tree, as CEO Rick Dreiling said:
"What we are seeing is the consumer making $80,000 a year is trading down...The current economic climate is driving more higher-income consumers into value retail."
Store brands are on the rise, too. Costco, Kroger, Walmart and Target said shoppers are increasingly picking up private brands rather than big national brands, like Kroger's private label Home Chef. These products actually give companies higher profits.
CFRA analyst Sundaram said the record-low unemployment rate and savings people built up during pandemic lockdowns have propped up a lot of the current spending.
"The consumers still have a willingness to spend, but their ability to spend has started to decline," he said, "and now it's starting to decline at maybe a more alarming rate." | Consumer & Retail |
Byju’s said on Wednesday that recent accusations by India’s crime-fighting agency regarding a breach of the nation’s foreign exchange rule are “solely technical” in nature and the startup anticipates that any resultant penalty would be minimal.
The Bengaluru-headquartered startup, India’s most valuable, said it has filed requisite intimation for all the foreign direct investment it received and is confident of successfully dealing with the case. Based on the “precedent actions” by the authority, Byju’s said it anticipates that the fines, “if any, will be nominal.”
The Enforcement Directorate last week accused Byju’s of violating rules under the Foreign Exchange Management Act (FEMA), to the tune of $1.12 billion, by failing to submit documents of imports against advance remittances and proceed of exports made outside India and delayed filing of documents for foreign direct investment received by the startup.
Byju’s asserted in a statement Wednesday evening that the ED notice does not specify any quantum of fine but “rather highlights the quantum of FDI/ODI (~ 9,000 crore) along with the deadlines that we missed in the reference period for this quantum.”
It added: “We want to reassure you that Byju’s maintains and will continue to maintain complete adherence to all relevant FEMA regulations, as verified by comprehensive due diligence conducted by reputable law firms.”
The statement is a relief for Byju’s, which is scrambling to resolve many challenges. Prosus, which owns about a 9% stake in Byju’s, added more worries to the list of challenges earlier Wednesday by noting that it had cut the edtech giant’s valuation to under $3 billion. | India Business & Economics |
Controversial UK government aspirations to replace gas boilers in some homes with a hydrogen-based alternative are likely to be scrapped, Grant Shapps, the energy minister, has indicated.
Shapps said he believed hydrogen would form part of Britain’s overall energy mix but predicted it was “less likely” that the gas would be routinely piped into people’s homes, amid growing concerns about cost, safety and perpetuating a reliance on fossil fuels.
Trials have been under way as part of a government move to phase out natural gas boilers by 2035 amid a broader effort to decarbonise domestic heating, which accounts for about 17% of the UK’s greenhouse gas emissions.
But the plans have in some cases been described as unsafe and have met with opposition in areas that have been earmarked for pilot schemes.
Shapps said: “There was a time when people thought … you will have something that just looks like a gas boiler and we will feed hydrogen into it.”
He added: “It’s not that we won’t do trials. We will. But I think hydrogen will be used for storing energy. You won’t have to switch off windfarms when you don’t need the power because you can turn it into hydrogen and use it later.”
Despite being more combustible and leakier than natural gas, energy firms have insisted that hydrogen can be made safe and have engaged in concerted lobbying of both the government and Labour to convince them of its merits.
But the assurances have failed to convince people asked to take part in large-scale trials of the technology.
Shapps said: “It is fundamentally unpopular in that area and I don’t believe in telling people we will be coming in to rip up out your boiler to replace it with this other thing that you don’t want, when they are other areas of the country that actually do want to go ahead with a trial.”
Hydrogen is derived either from splitting fossil fuel gas at extreme temperatures (known as blue hydrogen) or by splitting water using electricity from renewables, with minimal emissions – known as green hydrogen.
Critics argue that creating green hydrogen for home heating is six times less energy efficient than using heat pumps powered by electricity, and say that switching from gas boilers to heat pumps could save money as well as cut emissions.
Shapps also cited logistical concerns, such as the need to replace piping and the length of time it would take produce large volumes of low-emission green hydrogen.
Energy analysts have also warned that hydrogen could be up to 70% more expensive than gas for homeowners who make the switch. | Energy & Natural Resources |
Keir Starmer has said he is “bomb-proofing” all of his policy pledges to ensure a Labour government does not break promises, as he defended the lack of new announcements in his speech to the party conference.
On a broadcast round the day after his speech in Liverpool appealed to disgruntled Conservative voters to switch support, the Labour leader said his main feeling was defiance when a protester invaded the stage at the start of the address and sprinkled him with glitter.
“My overwhelming sense was, I’ve waited four years to get the Labour party from where we landed in 2019 to make this speech, which is very important to set up a positive case for Labour, and I was not going to be deflected from that,” Starmer told BBC1’s Breakfast.
“I had bits of glitter still in my hair, and I think on my shoulders as well, but we’ve worked so hard to change this Labour party.”
Quizzed about the lack of new policies, Starmer said this was very much the aim. “We put a lot of detail out through this conference, but I felt, when I was thinking about this speech, that just another bit of policy wasn’t what was needed,” he said.
“This needed to be an emotional connection with the future, a sense of, ‘Does Keir Starmer, does Labour, understand what people have been through these past 13 years?’
“I think too many people feel that after the last 30 years, almost the hope has been beaten out of the voters by the government, and we had to restore that.”
On one pledge made during the conference and reiterated in the speech, to build 1.5m new homes over a five-year period, Starmer said that while this was similar to Conservative promises, the difference was Labour would do it.
“The question isn’t whether the Conservatives will put a number up. They have. But they’ve consistently failed to deliver,” he said.
“What I’ve put alongside the number that we pledged yesterday is a plan for delivery, a determination to ensure that we bulldoze through the planning restrictions, and that we work with developers to make sure this is delivered.
“There was something very important that came out of yesterday, which is I am going through a process of bomb-proofing every single thing that we put to the electorate.
“After the last 30 years, I’m not prepared to have an incoming Labour government, should we be privileged to serve, that doesn’t deliver on its promises. So I have robustly tested everything.
“I don’t think it’s fair or right to ask the British public to go through more broken promises. So I will only put forward proposals if I am satisfied that we’re clear what we want to achieve, that we’ve got a plan for delivery, and we have already identified the partners who will deliver with us.”
On the idea of a series of proposed new towns, Starmer said it was not yet known where these might be, as this would be decided by a bidding process, with significant local community input.
The Labour conference finishes on Wednesday, after a final series of speeches over the morning by Wes Streeting, the shadow health secretary, Bridget Phillipson, the shadow education secretary, and Jonathan Ashworth, the shadow paymaster general, whose job involves election planning. | Real Estate & Housing |
Labour will give local authorities more power to build on green belt land to meet their area's housing needs if the party wins at the next general election, Sir Keir Starmer has said.
In an interview with The Times, the Labour leader accused the Conservatives of killing "the aspiration of homeowning for a whole generation" by removing housebuilding targets.
It comes ahead of a speech to the British Chambers of Commerce (BCC) later today when he is expected to launch an attack on so-called NIMBYS (Not in my back yard) and vow to "be on the side of builders not blockers".
Sir Keir, who has also called for more onshore wind farms to be built in England, said the issue of the green belt "cannot be reduced to a simple discussion of will you or will you not" build on it.
"This is why it's important for local areas to have the power to decide where housing is going to be," he said.
He acknowledged that objections to housebuilding on the green belt are often valid "because the control by landowners and developers mean that the houses are proposed in areas where it's quite obvious that there's going to be a local concern".
He said giving local authorities greater scope to decide would provide a solution.
Rishi Sunak has previously pledged to defend the green belt.
Last year the prime minister was also forced to drop plans for compulsory housebuilding targets in the face of a backlash from rebel backbench MPs and Tory activists.
"A generation and its hopes are being blocked by those who - more often than not - enjoy the secure homes and jobs that they're denying to others," he will say.
He will say his policy of backing "the builders not the blockers" extends beyond just new houses.
Sir Keir will pledge reforms to the planning system, saying it is holding back growth and leaving the economy "stuck in second gear".
"You can't be serious about raising productivity, about improving the supply-side capacity of our economy and about arresting our economic decline without a plan for the wind farms, the laboratories, the warehouses and the homes this country so desperately needs."
Read more:
Government unveils 'once-in-a-generation' renting shake-up
Truss urges Sunak to describe China as a 'threat' to UK security
Sir Keir will set out five key economic shifts: giving economic stability and certainty, handing power to communities across the country, seizing the opportunities of the future, increasing security at work and building economic resilience.
Chancellor Jeremy Hunt and Bank of England governor Andrew Bailey will also address the BCC gathering. | Real Estate & Housing |
Brewers in the United Kingdom are cutting the alcohol content — but not the price — of several of their most popular beers in what’s been described as another example of “shrinkflation.”
Greene King, a major UK brewer and pub chain, has cut the ABV, or alcohol content, of its popular Old Speckled Hen pale ale to 4.8% from 5%, a spokesperson for Greene King told CNN.
In March, the country’s oldest brewer, Shepherd Neame, slashed the ABV of its bottled Spitfire and Bishops Finger ales to 4.2% and 5.2% respectively, from 4.5% and 5.4%, a spokesperson said.
The Mail on Sunday newspaper, which published an investigation Sunday, said the brewers had kept the size of their bottles and cans intact, with the same amount of liquid, but slashed the amount of alcohol.
It said this “drinkflation” mirrored “shrinkflation” — the practice of food producers and supermarkets reducing the size of their products without cutting prices.
Since, under UK law, brewers pay less tax on drinks with a lower alcohol content, the newspaper claimed that the companies had pocketed this saving rather than passing it onto customers through lower prices.
But the spokesperson for Greene King told CNN that reducing the ABV had simply helped offset some of its rising costs, following years of “inflationary pressures on raw materials, packaging costs and energy prices.”
Cutting the ABV “lowers the [tax] we pay without noticeably affecting the beer’s flavor,” the spokesperson said.
The spokesperson for Shepherd Neame told CNN that it had lowered the ABV content of its beers to “expand their appeal” as consumers were “increasingly choosing drinks with a lower alcohol content as part of a healthy lifestyle.”
The spokesperson also said the brewer had seen “significant increases” in the cost of its raw materials, such as energy and glass, and had, as a result, increased the prices on all of its beers.
In January, Dutch brewer Heineken lowered the ABV content of Foster’s larger — which it sells in the UK — to 3.7% from 4%.
A spokesperson for the brewer’s UK business told CNN that it had done so because “consumers are increasingly choosing lower-ABV products as part of a balanced lifestyle,” but added that it had experienced “unprecedented cost increases.”
Stubborn inflation
Emma McClarkin, chief executive of the British Beer and Pub Association, said that, despite UK inflation cooling, businesses were “still very much feeling the pinch,” and were simply finding ways to absorb higher costs.
“Brewers have faced mounting price increases across supply chains in the past two years and, as far as possible, they have absorbed costs to avoid customers paying over the odds for their beer,” McClarkin said.
Consumer price inflation in the UK remains stubbornly high, reaching 8.7% in April. Inflation has fallen back in recent months, but still clocks in higher than in any other country in the Group of Seven.
Former Bank of England Governor Mark Carney told The Daily Telegraph newspaper Friday that Brexit was a “unique aspect” of the UK economy that helped explain why its inflation remained so high.
“We laid out in advance of Brexit that [it would create] a negative supply shock for a period of time and the consequence of that will be a weaker pound, higher inflation and weaker growth,” he said.
Carney said he did not revel in saying “we told you so,” as millions of ordinary Britons were now paying the price. | Inflation |
If I have a tax-deferred 401(k). Can I convert it to a Roth IRA without paying the deferred taxes when I roll it over?
-Tommy
Generally, the answer here is no. There’s typically no method to totally dodge taxes on a Roth conversion. Eventually, Uncle Sam will come to collect on your tax-deferred retirement accounts – either when you execute a Roth conversion, withdraw funds or collect your required minimum distributions (RMDs).
That said, your inability to totally dodge taxes doesn’t translate to an inability to reduce them. Here are some savvy strategies to reduce your tax bill on a Roth conversion. (For more information on taxes and retirement, consider working with a financial advisor.)
Strategies to Reduce Your Tax Bill on a Roth Conversion
To reduce the tax consequences of rolling a tax-deferred account to a Roth, consider these methods:
Execute a Tax-Aware Partial Roth Conversion
One strategy for reducing the tax liability of a Roth conversion involves spacing out your rollovers over several years. To use this strategy, convert just enough to push your total income to the limits of your current tax bracket without entering the next bracket up. (For more information on taxes and retirement, consider working with a financial advisor.)
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Roll Over Your Money in a Low-Tax Year
For many folks, a prime time for Roth conversions takes place during the years after retirement but before Social Security and RMDs kick in. Those can be relatively low-income years during which initiating a conversion can result in a triple benefit. Those benefits are: lower tax bills, reduced RMDs and future tax-free growth.
Speaking of timing, if you suspect tax rates will increase at the anticipated sunset of the Tax Cuts and Jobs Act or due to political machinations on Capitol Hill, making a Roth conversion now can be an option.
You’ll lock in your current tax rate and hopefully ride out any future increases. Keep in mind that nobody has a crystal ball, and this strategy involves making predictions about the future. (For more information on how tax policy may impact retirement planning, consider working with a financial advisor.)
Pay the Tax Wisely
Many experts recommend paying the tax on your Roth conversion with nonretirement assets. That’s opposed to withholding some of your retirement funds to pay the bill. This will allow you to move the greatest amount into your new Roth account and continue to watch it grow tax-free.
Work With a Financial Advisor
A financial advisor may be able to help you take a holistic look at your tax and retirement profile, identifying opportunities to minimize taxes while adhering to an investment philosophy that matches your life stage.
A good advisor can talk you through whether a Roth conversion makes sense right now. He or she can also discuss alternatives, such as converting your 401(k) into a traditional IRA, transitioning to a new employer’s 401(k) or making a partial conversion.
Tips for Handling Taxes in Retirement
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.
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.
Susannah Snider, CFP® is SmartAsset’s financial planning columnist and answers reader questions on personal finance topics. Got a question you’d like answered? Email [email protected] and your question may be answered in a future column.
Please note that Susannah is not a participant in the SmartAdvisor Match platform and is an employee of SmartAsset.
Photo credit: ©Jen Barker Worley, ©iStockPhoto/AndreyPopov
The post Ask an Advisor: I Want to Roll Over My Money to a Roth IRA. How Do I Avoid Paying Taxes? appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
People spent less on subscription services, home improvements and dating in February, analysis by Britain's biggest building society shows.
Despite being the month of love, the volume of dating transactions fell by a third (33%) last month compared with February 2022, also falling by 7% by value, Nationwide Building Society found of its members' outgoings.
Meanwhile, spending on subscriptions fell by 6% annually by volume and 3% by value.
The value of households' spending on DIY also fell by 4% compared with February 2022, though the number of transactions increased by 3% annually.
The cutbacks were made as spending on several essential outgoings rocketed.
Compared with February last year, the value of spending on utility bills rose by around a third (34%).
Spending on mortgage payments jumped by 17%, rent payments were up by 11%, spending on loans increased by 8%, and spending on insurance increased by 7% annually by value.
Nationwide's monthly report analysed millions of debit card, credit card and direct debit transactions by its customers.
It comes as a survey of more than 2,000 people by Censuswide last month found that some two-thirds (63%) of people are worried about their personal finances and their ability to cover essential costs - slightly down on the 70% of people who said this in January.
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It also showed that nearly a quarter (23%) of people said they had already reduced or cancelled TV subscriptions, with a further 14% considering doing so, the survey commissioned by Nationwide found.
In the past six months, nearly two-fifths (38%) had used credit cards to cover essential items in order to bridge the gap to their next payday.
Mark Nalder, payments strategy and performance director at Nationwide, said: "Our research shows that while the number of people worried about their finances has fallen slightly, there are people relying on credit as a way of bridging the gap for essential bills.
"We'd urge anyone (who is) struggling to talk to their bank or building society as early as possible for support. We have a dedicated cost of living hotline to do just that." | Consumer & Retail |
One grocery chain is fighting hard to keep stores open despite rampant shoplifting and an uptick in violence forcing many retailers to leave major cities across the country.
Giant Food, which operates 165 supermarkets in D.C., Maryland, Virginia and Delaware, has taken multiple measures to combat theft and keep stores safe, according to a report in The Washington Post. That includes limiting store entrances; hiring security guards; restricting the number of items at self-checkout stands; putting less high-value items on shelves; and securing razor blades in containers that make noise if opened.
Company president Ira Kress said he's seen theft rise at least "tenfold in the last five years" and violence increase "exponentially."
He hopes these measures will help keep stores open, even if they inconvenience shoppers. "The alternative is worse for customers," he told the Post. "The last thing I want to do is close stores. But I’ve got to be able to run them safely and profitably."
Several large retailers like Walgreens, Nordstrom and Whole Foods have had to close stores in cities due to increased shoplifting and safety concerns.
Fears of violent reactions from shoplifters has also changed some companies policies over the years. "We used to chase shoplifters," Kress said. "And you’d get the product back, and nobody would ever fight you. … I didn’t worry about somebody pulling a knife or gun on me [40] years ago," he told the Post.
A former worker at the recently closed Whole Foods in Downtown San Francisco also said in the report that they had taken measures to combat shoplifting, like moving high-end merchandise to the back of the store.
However, the high-end grocery chain has temporarily closed the flagship store due to safety concerns. Records showed over 500 emergency phone calls were made by workers at the store, who were routinely threatened with violence by vagrants.
A consumer and retailer industry expert said that retailers will continue to leave cities as it has become difficult for them to maintain a profit with organized retail crime and theft at an all-time high.
"We’re seeing the highest level of organized retail crime and theft ever," Lakshman Lakshmanan, senior director in Alvarez & Marsal’s consumer and retail group said in the Post report.
The former Whole Foods employee said the store faced theft "daily" and employees were forbidden from confronting or attempting to stop shoplifters.
Other retailers have similar policies in place, due to fears the employee might be harmed or killed in an altercation with a shoplifter.
In Atlanta, Georgia, two LuLuLemon employees were fired by the company after they filmed shoplifters brazenly stealing merchandise.
Keeping stores open has become even harder during this era of inflation, Lakshmanan said, as retailers have to find ways to stay afloat with increased rent, operations and wages.
Giant's president said it's "embarrassing" when politicians attack retailers for shutting stores due to these challenges.
"It’s laughable for any of our politicians — and I’ve offered to meet and talk with any of them — to be ignorant to what’s going on in their communities, in their jurisdictions, with their constituents," Kress said in the report. "And for politicians to blame businesses … for leaving is embarrassing." | Consumer & Retail |
The nonpartisan Congressional Budget Office (CBO) announced that the federal government’s budget deficit more than doubled through the first 10 months of the current fiscal year compared to a year ago.
In its latest budget review released Tuesday, the CBO found that the federal deficit was $1.6 trillion in the first 10 months of fiscal year 2023 — a significant increase over the $726 billion deficit the federal government incurred in the same period last year.
The CBO noted that federal spending was 10% higher during the reporting period than it was a year, while tax revenues came in 10% lower, which combined to cause the deficit to widen. As a result, the CBO now expects the federal deficit for FY2023 will be about $1.7 trillion — or $200 billion larger than the forecast it issued in May.
Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, said in a statement, "With just two months left in the fiscal year, we’ve now borrowed $5.3 billion per day and have already surpassed all of last year’s deficits. The deficit this year and next year are on track to be 50 percent larger than before the pandemic, despite the fact that the pandemic is over and the economy seems to be growing at a steady clip."
A federal budget deficit of $1.7 trillion would be one of the largest on record, and it comes even as many COVID-19 pandemic relief programs have concluded, which caused the largest deficits in U.S. history due to the elevated spending and reduced economic activity that diminished tax revenues.
The U.S. ran a record-setting deficit of more than $3.1 trillion in FY2020 after Congress approved trillions of dollars of new spending on temporary COVID-19 programs on a bipartisan basis, including those under the CARES Act in the early weeks of the pandemic-induced lockdowns.
Many of those programs continued into the following year when Biden took office and Democrats used their majorities in Congress to enact the $1.9 trillion American Rescue Plan Act along party lines. Those factors combined to keep the FY2021 deficit over $2.7 trillion.
The deficit narrowed further to nearly $1.4 trillion in FY2022 as more pandemic spending came to an end, although that was still the fourth-largest annual deficit in U.S. history — trailing only the two prior years and an FY2009 deficit that narrowly exceeded $1.4 trillion amid the financial crisis.
The CBO’s updated deficit projections come after Fitch Rating’s recent decision to downgrade the U.S. government’s credit rating from ‘AAA’ to ‘AA+,’ which could increase the government’s borrowing costs.
Fitch cited an "erosion of governance" characterized by partisan standoffs over fiscal policies and the debt limit as a contributing factor in its downgrade decision, in addition to an "expected fiscal deterioration over the next three years."
Fitch noted that it expects the federal government’s deficit to rise to 6.3% of gross domestic product (GDP) in 2023 and 6.9% of GDP in 2025, driven by weak economic growth and higher interest costs associated with servicing the more than $32 trillion U.S. national debt. | Inflation |
- Singapore will be piloting the live issuance and use of wholesale central bank digital currencies next year, said the city-state's central bank.
- "I'm pleased to announce that MAS will pilot the live issuance of wholesale CBDCs to instantaneously support payments across commercial banks here," said Ravi Menon, managing director of the Monetary Authority of Singapore, at Singapore FinTech Festival 2023 on Thursday.
- During the pilot, the MAS will partner with local banks to pilot the use of wholesale CBDCs to faciliate domestic payments.
SINGAPORE — Come 2024, Singapore will pilot the live issuance and use of wholesale central bank digital currencies, said Ravi Menon, managing director of the Monetary Authority of Singapore.
"We will take our experiments a step further next year," said Menon at Singapore FinTech Festival 2023 on Thursday, without specifying more details on the timeframe.
"I'm pleased to announce that MAS will pilot the live issuance of wholesale CBDCs to instantaneously support payments across commercial banks here," Menon said. MAS is the city-state's central bank and financial regulator.
Wholesale CBDC is a digital currency issued by a central bank, that's used exclusively by central banks, commercial banks or other financial institutions to settle large-value interbank transactions. It's unlike retail CBDCs which cater to individuals and businesses, facilitating everyday transactions.
"Since 2016, the MAS has conducted many experiments with other central banks and the financial industry to explore the use of wholesale CBDCs on distributed ledgers to facilitate real time cross border payments and settlements," said Menon, referring to the database spread across a network that is accessible from several geographical locations.
One such pilot project is Project Ubin, which was started in 2016 to explore the use of blockchain and digital ledger technology for the clearing and settlement of payments and securities.
MAS announced Ubin+ in November last year to advance cross-border connectivity with wholesale CBDCs through collaborations with international partners.
During the pilot, Singapore's central bank will partner with local banks to test the use of wholesale CBDCs to facilitate domestic payments, said Menon.
Banks will issue tokenized bank liabilities in the form of claims in balance sheets. Retail customers can then use the tokenized bank liabilities in transactions with merchants, who will then credit these bank liabilities with their respective banks. Tokenization refers to the process of issuing a digital form of an asset on a blockchain.
The CBDC will then be automatically transferred to the merchant as a form of payment during the transaction.
"So clearing and settlement occurs in a single step on the same infrastructure, unlike the current system in which clearing and settlement take place on different systems and settlement occurs with a lag," said Menon.
On Wednesday, the International Monetary Fund's managing director urged the public sector to keep preparing to deploy CBDCs and related payment platforms in the future.
"We have not yet reached land. There is so much more space for innovation and so much uncertainty over use-cases," said Kristalina Georgieva.
Menon is set to retire from public service and step down as managing director of MAS on Dec. 31 since being appointed to the position in 2011. He will be succeeded by Chia Der Jiun who previously spent 18 years at MAS. | Banking & Finance |
Thirty years ago, Canada could be rightly thought of as one of the more prosperous countries in the world. Canadians were not quite as rich as Americans, but we had many other advantages – and were better off than pretty much everyone else.
That’s the past. The present and future look to be a great deal less pleasant: Canada is not just losing ground relative to other countries but there is an increasing likelihood of an outright decline in living standards.
According to recent data and forecasts in a report from the C.D. Howe Institute, Canada’s relative prosperity is in steep decline, with this country’s gross domestic product per capita falling well below the average for the advanced economies that make up the Organization for Economic Co-operation and Development.
In 1993, Canada’s real GDP per capita was 106 per cent of the OECD average. The C.D. Howe Institute forecasts that in 2024 Canada will be just 89 per cent of the average of advanced economies. Canada has also fallen compared with the United States: In 2023, this country’s GDP per capita is forecast to be less than three-quarters that of the U.S. (Those statistics are relatively generous to Canada, since the institute has adjusted them for domestic purchasing power.)
Like so many of the big issues vexing Canada, the prosperity problem is long-standing, but has gathered speed in recent years, accelerating since the Liberals took power in 2015. It would not be fair to lay the problem entirely at the feet of the Trudeau government. The failure to dismantle interprovincial trade barriers is shared by all prime ministers, for instance. But the Liberals have governed while Canada’s real GDP per capita has flatlined, and their policy choices are making the problem worse.
The housing market is just the most prominent example. There are many factors that have led to a massive housing shortage and surge in prices, but Ottawa’s failure to act aggressively to curtail the market – and in some instances to add fuel to the fire in the form of subsidies – is a key part.
Household debt is bigger than the Canadian economy, with mortgages accounting for three-quarters of that total. That’s not just a burden on homeowners – the need to fund those mortgages diverts capital from loans to, say, entrepreneurs that might be riskier but could boost Canada’s economic performance.
Conversely, the prosperity problem makes stratospheric housing prices even more of a hardship. Mortgage costs would eat up a smaller share of household income if the economy were growing as fast as the OECD average. One crisis bleeds into another.
There’s a similar story to tell with immigration. The Liberals’ determination to increase immigration levels, particularly temporary migrants, does help to increase the size of Canada’s economy.
But the pace of economic growth is not keeping up with the pace of population expansion, exerting downward pressure on average living standards. As with housing, the prosperity problem intensifies the challenges of higher immigration. A richer Canada would be better able to afford to build the infrastructure needed to accommodate newcomers. One crisis feeds on the other.
The problem is complex, and there will be no simple solutions.
Spurring greater capital spending is key, including tilting the tax code in such a way to encourage investment in productive assets, perhaps through broader and more aggressive amortization rules. Tearing down barriers to competition both internal and at Canada’s borders are part of the equation, as well. Of course, smarter housing policy aimed at sustained supply increases will help, as would an immigration policy focused on boosting incomes rather than importing cheap labour.
Those ideas, and more, have been on offer for years. What has been missing is a government that sees building a high-wage economy as its core mission, and bends every policy to that end. The Liberals have been fond of saying that their government aims to help the middle class, and those working hard to join it.
Eight years on, the prosperity problem is even more urgent, and in need of a government that focuses relentlessly on the entrepreneurial class – and helping those working hard to join it. | Real Estate & Housing |
Environmental groups have voiced their horror after a rabble of Tory rebels called for a vote on scrapping green targets.
Weak Rishi Sunak has been urged not to cave in as Red Wall MPs try to tear up the Government's green agenda in the hope of avoiding oblivion at the polls. The under-fire PM has been told now is not the time to water down the Net Zero target of 2050 to please Tory malcontents.
Backbencher Marco Longhi is leading calls for a referendum on whether to scrap it - despite Net Zero having been included in the 2019 Tory manifesto. It follows a call by former Home Secretary Dame Priti Patel to "pause" the legal obligation to cut greenhouse gas emissions in order to tackle the climate crisis.
July was the hottest month on record around the world, and campaigners urged politicians not to "wage a culture war" around green issues. The PM has previously claimed to be a champion for environmental issues, but is no stranger to a U-turn.
Mr Longhi told The Telegraph that a proper debate about decarbonising "has never been had", while fellow Tory MP Karl McCartney vented his anger at "London’s woke eco-zealot crowd". The PM is under growing pressure to roll back on climate change measures following the surprise Conservative by-election win in Uxbridge and South Ruislip amid protests over the capital's ultra low emission zone (ULEZ).
Greenpeace UK’s political campaigner, Ami McCarthy, told The Mirror: "Around 98% of votes cast in last general election were for parties supporting the net zero target, including the Conservatives. Subsequent polling demonstrates the continuing huge levels of public support for it and increased action on climate change.
“Given the haunting images of devastation caused by the climate disasters around the world this summer, now is clearly not the time to be dialling down our climate commitments. Nor is it the time to hold another divisive referendum to appease a small group of MPs – who all stood on a manifesto commitment to net zero - wanting to wage culture war off the back of it.”
And Jamie Peters, climate coordinator at Friends of the Earth, said: “All major parties stood at the last election on a platform of support for the UK’s net zero target, with MPs elected on that basis – so it’s hard to see how there’s any mandate for a referendum."
Mr Peters added: “Bold and ambitious climate action is non-negotiable if we want to prevent the very worst climate impacts and leave a safe and liveable planet to the next generation. While it’s astonishing this needs to be said at all, let’s not forget that it’s a small but vocal minority attempting to seed yet more doubt about the need for climate action and stir up division and delay. The cost to us all will only be greater the longer we put off the rapid and transformational change we need to see.”
Experts have warned that scaling back on Net Zero could end up costing households more. The Association for Decentralised Energy (ADE) has called on the Prime Minister to "go further and faster". In a letter to Mr Sunak Caroline Bragg, interim chief executive officer of ADE, said: "If we are trying to avoid placing the burden of extra costs on the consumer, then halting progress on net zero is the last thing we should be considering."
Dudley North MP Mr Longhi said: “Given the complexity of this issue and its far-reaching consequences, I believe that involving the public through a referendum is right." And Mr McCartney, who represents Lincoln, ranted: “The establishment was solely focused on chasing approval from London’s woke eco-zealot crowd who have no clue what happens in the real world. Just like Brexit, the Government needs to make sure the public are on board with such radical changes, and that they hear the arguments and can make an informed decision.”
Earlier this month Dame Priti sparked a backlash when she rallied against the green agenda. She said: “It’s time for our country’s hard-working and silent majority to take back control of the green agenda and for the Government to make meaningful changes to its plans to reach net zero and environmental targets.
“The forthcoming general election is an important opportunity for hard-pressed families and businesses who have been shut out of the discussions around the environment, climate change and pollution to have their voice and vote heard.” | Renewable Energy |
Retail giants have always had to deal with petty theft, but a growing trend of organized retail crime is now not just eating into company profits, it’s threatening the safety of workers.
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The home improvement retailer has faced the loss of two employees — Gary Rasor, 83, and Blake Mohs, 26 — who were killed during separate theft incidents over the past year.
Rasor died on Dec. 1, 2022 after a shoplifter — wheeling out three pressure washers worth over $800 from a Home Depot store in Hillsborough, North Carolina — shoved him to the concrete floor when he approached to ask for a receipt.
Tragedy struck again in April, when California Home Depot security guard Blake Mohs was shot in the chest while trying to stop the theft of a small electrical item.
Organized retail crime and theft are growing in both scope and complexity across the country, according to a study from the National Retail Federation — to the extent that former Home Depot CEO Bob Nardelli recently described it as an “epidemic … spreading faster than COVID.”
What’s behind this alarming trend?
Theft at Home Depot stores has been “growing double-digit year over year,” the retailer’s VP of asset protection, Scott Glenn, recently told ABC News.
“More and more we’re seeing the risk being brought into the stores, and people being hurt or people even being killed in many cases because these folks, they just don’t care about the consequence,” Glenn said.
Home Depot isn’t alone in experiencing an uptick in organized retail crime, which the National Retail Federation defines as the large-scale theft of retail merchandise with the intent to resell the items for financial gain.
About 70% of retailers believe the threat of organized retail crime has increased over the past five years, according to the 2022 National Retail Security Survey.
To reduce the risk of theft and other crimes in its stores, Home Depot has started locking up high-value items, some of which Decker says may surprise customers.
“They’re not all big — they’re not all power tools and generators. You can have a circuit breaker — [worth] $50, $60, $80 — those are all high-theft items.”
When asked if Home Depot would have to shutter certain stores — following the footsteps of other retail giants — the CEO says the retailer has so far managed to avoid that.
However, Decker says the company is increasingly concerned over the safety of their employees and customers. As a result, they’ve invested more in security guards, more lighting in their parking lots and recording towers.
“It’s not a place in retail that many of us thought we would be,” he said.
Read more: Are you ready for your first year of retirement? Here are 4 things you might not expect — but definitely need to prepare for
Avoiding stolen goods online
When it comes to organized retail crime, “a lot of this product is [re-sold] on online marketplaces,” Decker said.
To counter this, the retail giant has been working with local, state and federal governments to help them understand the problem and come up with a viable solution.
Late last year, Congress passed the INFORM Consumers Act. The act requires online marketplaces to collect, verify and disclose certain financial and identifying information from “high-volume third-party sellers” — those with more than 200 transactions and $5,000 in revenue in a 12-month period.
INFORM Consumers, which took effect June 27, aims to increase the transparency of online transactions, while also deterring criminals from using online marketplaces to sell stolen, counterfeit or unsafe items.
Decker said he’s “super happy” the bill passed as “it’s going to make those marketplaces vet their sellers.”
In the meantime, the big-name retailer must continue “to manage” its theft challenges and cope with the “pressure on [its] gross margin,” the CEO added.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind. | Consumer & Retail |
The average annual cost of a full-time nursery place for a child under two in Great Britain is now £14,836.
A report by the charity, Coram, says average costs have risen by 5.9% in the past year while the availability of places has also dropped.
The BBC has spoken to women being forced to give up work and to nurseries closing in areas they are needed most.
The government says it has spent £20bn in the past five years to help families with childcare costs.
"I adore my children and I wouldn't change it for the world," says Jo, as she plays Lego on her living room floor in Manchester with two-year-old twins, Ben and Sam.
As a critical care nurse with more than 17 years experience, Jo worked throughout the pandemic until she was 27 weeks pregnant.
Work is "part of who I am", she says. "It is important to feel like I'm doing something worthwhile, and I don't want to give that up."
'It's completely unaffordable'
But Jo has had to cut her hours to one day a week, and says she will have to change career in the long-term, because of how the cost of childcare eats into her earnings.
The twins' nursery is increasing its prices in April. Jo and her husband James, who also works for the NHS, will pay £56 a day for each twin, as well as wraparound care fees for their four-year-old son, Charlie. That's a total of £133 a day - more than 75% of what Jo earns on a long shift.
One in four women say the cost of their childcare is now more than 75% of their take-home pay, according to a survey of 24,000 parents by the charity, Pregnant then Screwed. One in 10 break even or end up with a loss.
"I would work more if it was feasible, but it's completely unaffordable," Jo says.
BBC analysis shows the cost of a full-time nursery place for a child under two in Great Britain varies greatly. It costs an average of £285 a week, the equivalent of 44% of the average pay for full-time workers.
Costs are lower in Scotland. But in inner London, despite people earning more, disproportionately higher nursery fees amount to more than half of the average full-time wage.
The Coram Childcare Survey 2023 reports similar price rises across the childcare sector - in childminders, nurseries, pre-schools and after-school care. The UK remains one of the most expensive places in the world for childcare.
There has also been a drop in the availability of childcare in England, with some having to close. Only half of local areas have enough available spaces for children under two, the report says.
And only 66% have enough space for three and four-year-olds, who get at least 15 hours a week free, for most of the year. Both figures are down 7% on last year.
At Weston Park Pre-school in Southampton, children are lining up with their plates, excitedly pointing out what they want to eat. This is their leaving party, as the nursery is about to shut its doors for the final time.
"This shouldn't be happening," nursery manager Roxanne Maynard says. "Weston is an area of deprivation - we are not just childcare, we are early education, we are support for families. And we will no longer be here to do that."
The nursery has been a "massive support" for 31-year-old Stacey Jones and for her three-year-old daughter, Jayda.
"Especially when you are on your own as a mum," says Stacey, wiping away tears. "When you go home, you still have the teachers for support."
Roxanne is particularly concerned for families like Stacey's who have not been able to find another nursery space. She says the children will "no longer be able to socialise with their friends" which will make it less likely they will be "school ready".
Stacey has called pre-schools up to eight miles away, but everywhere is "packed" so there is no alternative nursery for Jayda until she starts school in six months.
The number of nursery closures between April and December 2022 increased by 87% compared with the same period last year, a survey by the National Day Nurseries Association shows. Nearly a third of the closures took place in the most deprived areas of the UK.
The YMCA, which owns 89 nurseries, including Weston Park Pre-school, says it is having to make "difficult decisions".
The charity says it does not get enough money from the government to cover the free childcare it has to offer, and with rising fuel bills and an increase in the national living wage due in April, its nurseries are being "forced into extinction".
At the same time there is a squeeze on other parts of the sector. More than 10,000 childminders have also closed in the past five years, according to Ofsted. Overall, there are about 26,000 fewer early years places in England than there were at the end of 2018.
"A lot of the parents live locally. They don't drive, they can't access provision out of the area," Roxanne says, as she closes the door for the last time. "We should not be leaving children without provision. The impact that will have will be devastating."
A parliamentary inquiry looking into why childcare is so expensive will report findings and recommendations in the autumn.
Among the solutions being discussed are a review of the funding rate for free hours to match what it costs nurseries, relief from business rates, and more help for working parents of children aged under two.
Support for families
The Department for Education says the number of childcare places available to families in England has remained broadly stable since 2015, and "standards remain high". A spokesperson says it has spent more than £20bn over the past five years to support families with the cost of childcare, in recognition of the financial pressures families and providers are facing.
Many families can also access tax-free childcare, although figures from the Treasury show there has been a £2.4bn underspend since that scheme began in 2017.
Labour's shadow education secretary, Bridget Phillipson, will say in a speech on Thursday that her first priority as education secretary would be to reform childcare.
Meanwhile, in Manchester, it is time to collect Charlie from pre-school and Jo is putting her twins in the pushchair.
"I don't want to sound like I'm complaining," she says as she straps them in. "I'm aware of how lucky I am and I'm also fully prepared to put my career on hold while they are small."
But she says education is not just down to parents. "They are eventually going to be the people that are running our country. Educating them properly is in everybody's interest." | Consumer & Retail |
In 2009, Bitcoin was introduced to the world, marking the dawn of the blockchain era as the premier Layer 1 (L1) technology. Today, countless companies and organizations span across multiple ecosystems, each leveraging blockchain in unique ways. Documenting the history of computing and technology is paramount, as it provides valuable context and insight for future generations who might not have access to the now-lost anecdotes and oral tales of earlier times.
Notably, Bitcoin emerged during the subprime mortgage crisis, whether by design or coincidence. Its roots can be traced back to the early 90s with the influential cypherpunk mailing list and even further back to the rise of the global Internet. Today, we refer to these evolutionary stages as Web 1.0 and the current decentralized movement as Web 3.0. However, the ideals of decentralization predate even the invention of blockchains. In truth, blockchain is just one of the myriad decentralized technologies available.
In the early days, the most common types of cryptocurrency businesses were exchanges. CoinFabrik and CoInspect stand out as pioneers, being the world’s earliest known blockchain R&D, and security service companies. Both were established in 2014 and have continued to thrive in a volatile industry. A year later, in 2015, both OpenZeppelin and ConsenSys made their debut.
Below is our compilation of pioneering blockchain companies that existed before Ethereum ushered in a new era with its transformative smart contract technology. Given the vast number of players in this space, it’s challenging to track every pioneer. We invite you to contribute any missing early company names as comments to this article.
|Year||Name||Offerings||Status|
|2010||CoinMarket||Bitcoin exchange||Defunct|
|2010||Mt. Gox||Bitcoin exchange||Closed in 2014: https://en.wikipedia.org/wiki/Mt._Gox|
|2011||BitPay||Bitcoin Payment Service||Live|
|2011||Bitstamp||Cryptocurrency exchange||Live|
|2011||BTCChina||Cryptocurrency exchange||Live|
|2011||Blockchain.com||Wallet and cryptocurrency exchange|
|2011||BTC-e||Bitcoin exchange||Defunct|
|2011||Kraken||Cryptocurrency exchange|
|2012||BTCJam||P2P Lending||Defunct|
|2012||LocalBitcoins||P2P + Escrow Exchange||Retired in 2023|
|2012||Coinbase||Exchange||Live|
|2012||Paxos||Cryptocurrency brokerage service||Live|
|2013||Bitmain||Cryptocurrency ASIC miners||Live|
|2013||Canaan||Cryptocurrency ASIC miners||Live|
|2013||Bitfinex||Exchange||Live|
|2013||SatoshiLabs||Creators of Trezor, the first Bitcoin hardware wallet||Live|
|2013||CryptoKit||Initially a Bitcoin wallet browser extension||Moved to Jaxx and then was retired in favour of https://www.andiami.org/|
|2013||BitGo||Cryptocurrency custody||Live|
|2013||Circle||In 2018 partnered with Coinbase to launch USDC||Pivoted, Live|
|2014||Xapo||Bitcoin exchange||Live as a wallet + debit card. Coinbase acquired its Xapo Custody offering in 2019|
|2014||Bitex||Bitcoin exchange||Acquired by Hubbi in 2022|
|2014||BitUSD||Crypto backed USD Stablecoin||Defunct|
|2014||Tether||Fiat pegged USD Stablecoin||Live|
|2014||CoinFabrik||Research, development, and security auditing services||Live|
|2014||CoInspect||Security auditing services||Live|
|2014||ShapeShift||Cryptocurrency swap|
|2014||Ledger||Hardware wallet||Live|
|2014||SatoshiTango||Cryptocurrency exchange|
|2014||Ripio||Cryptocurrency exchange|
|2015||Blockstream||Bitcoin and assets infrastructure||Live|
|2015||OpenZeppelin||Secure smart contracts library in Solidity||Live|
|2015||ConsenSys||Products and services||Live|
|2015||Sig3||Sig3 co-signs transactions based on the policies and criteria implemented by its users.||Defunct|
|2015||Wayniloans||P2P Bitcoin lending||Pivoted to https://www.waynimovil.ar/|
|2015||Bitwala||Cryptocurrency wallet||Live| | Crypto Trading & Speculation |
Former U.S. President Donald Trump is set to testify November 6 at his New York civil fraud trial, following his three eldest children to the witness stand in a case that threatens to disrupt their family's real estate empire, state lawyers said Friday.
It was already expected that the former president and sons Donald Trump Jr. and Eric Trump would testify. The timing became clear Friday, after Judge Arthur Engoron ruled that daughter Ivanka Trump also must appear, rejecting her bid to avoid testifying.
The schedule sets up a blockbuster stretch in the trial of New York Attorney General Letitia James' lawsuit. She alleges that the former president, now the front-runner to be the 2024 Republican presidential nominee, overstated his wealth for years on financial statements that were given to banks, insurers and others to help secure loans and deals.
Trump denies any wrongdoing and has called the trial a politically motivated sham. The case could strip Trump of some of his corporate holdings and marquee properties such as Trump Tower. James and Engoron are Democrats.
Donald Trump and the two sons are defendants in the lawsuit, but the state is initially calling them to the stand before the defense begins its case. The defense can then call them again.
In a surprise preview, Donald Trump ended up briefly testifying Wednesday to answer Engoron's questions about whether an out-of-court comment was aimed at his law clerk. The judge had earlier barred participants in the trial from talking publicly about court staffers.
Trump said his remark wasn't about the clerk; Engoron called that testimony "not credible" and fined Trump $10,000, on top of a $5,000 fine imposed days earlier over an online post about the clerk. Trump's lawyers paid both fines on his behalf but still might appeal them, according to a court filing Friday.
Donald Trump Jr. is now set to testify next Wednesday, brother Eric Trump on Thursday, and sister Ivanka Trump on November 3, though her lawyers may appeal to try to block her testimony.
An appeals court dismissed her as a defendant in the lawsuit in June, saying the claims against her were too old. Ivanka Trump announced in January 2017, ahead of her father's inauguration, that she was stepping away from her job as an executive vice president at the family company, the Trump Organization. She soon became an unpaid senior adviser in the Trump White House. After her father's term ended, she moved to Florida.
Her lawyer, Bennet Moskowitz, told the judge Friday that state lawyers "just don't have jurisdiction over her." One of Donald Trump's attorneys, Christopher Kise, maintained that state lawyers "just want another free-for-all on another of President Trump's children."
"The idea that somehow Ms. Trump is under the control of the Trump Organization or any of the defendants, her father — anyone who has raised a daughter past the age of 13 knows that they're not under their control," Kise said.
However, lawyers with the state of New York argued that Ivanka Trump was a key participant in some events discussed in the case and remains financially and professionally intertwined with the family business and its leaders.
Engoron sided with the state, citing documents showing that Ivanka Trump continued to have ties to some businesses in New York and still owns Manhattan apartments.
"Ms. Trump has clearly availed herself of the privilege of doing business in New York," Engoron said.
During her years at the Trump Organization, Ivanka Trump was involved in negotiating and securing financing for various properties, including a lease and loan for a Washington hotel and loans for Trump's Doral golf resort near Miami and a Trump-owned hotel and condo skyscraper in Chicago, according to court filings.
According to the New York attorney general's office, Ivanka Trump retained a financial interest in the Trump Organization's operations even after leaving for the White House, including through an interest in the now-sold Washington hotel.
In court papers that included emails and other documents, the state lawyers said the Trump Organization and its staff also have bought insurance for Ivanka Trump and her businesses, managed her household staff and credit card bills, rented her apartment and paid her legal fees.
In 2021 federal disclosures, she reported $2.6 million in income from Trump entities, including revenue from a vehicle known as TTT Consulting LLC. A company bookkeeper testified that TTT was set up for her and her brothers to reap a share of fees from some licensing agreements. | Real Estate & Housing |
Other than Terra, FTX is perhaps the biggest synonym for failure in the crypto industry. It’s a three-letter word dragged so far through the mud that it’s hard to distinguish it from a cow patty. Yet enough people working at the exchange think people would be interested in a reboot. So much so, FTX’s new CEO has actively worked on a so-called “2.0.”
As first reported by Decrypt, documents posted Monday by FTX in its ongoing bankruptcy reveal FTX’s current CEO John Ray III has spent several hours at a time working on a potential “restart” of the exchange. On April 17, Ray reportedly spent nearly 1 and a half hours reviewing the steps needed to restart FTX, while on the 19th of the same month he took less than an hour to “review and finalize 2.0 reboot of exchange material for distribution.” The last item of April was a “review and comment on 2.0 bidder list.”
Some of these items mention companies, like the investment bank Perella Weinberg Partners LP which supplied steps in a potential reboot plan. Ray also talked with cybersecurity firm Sygnia for “exchange fortification.” Who would be actually interested in bringing back this Frankenstein’s monster? Well, Bloomberg reported last month that venture capitalists from the firm Tribe Capital met with FTX’s creditor committee back in January to suggest a fundraising campaign. Tribe had previously invested in FTX, and any buyout would reportedly attempt to keep the name.
For each of these items, Ray charged the company thousands of dollars per hour for his efforts. He charged a total of $290,160 for his work in April alone. As a summary of his work, Ray declared he spent time implementing several elements of the exchange such as cybersecurity and cash management “that did not exist, or did not exist to an appropriate degree, prior to Mr. Ray’s appointment.”
Ray has previously mentioned in January that stakeholders were pressuring him to restart the exchange, and at least at the time he was amenable to the idea. He told The Wall Street Journal at the time “If there is a path forward on that, then we will not only explore that, we’ll do it.” Last month, an attorney for the bankrupt crypto exchange, Andy Dietderich, said the exchange’s leadership was thinking about restarting the failed company because the situation was “stabilized.” FTX will need to decide in the second quarter whether a full restart is feasible, according to his presentation.
Ray has previously called FTX a “complete failure of corporate controls” and has reported that former FTX CEO Sam Bankman-Fried and his executive cronies were such poor managers they would joke about losing millions of dollars at a time. FTX has struggled to recover billions in customer funds that went missing, but Dietderich said in April that the company had recovered $7.3 billion of the missing $9 billion, partially due to rising bitcoin prices.
In the meantime, Bankman-Fried’s name is just as sullied as his former exchange. He’s facing more than a dozen criminal charges alleging everything from fraud, to campaign finance violations, to bribing Chinese officials. But beyond that, who wouldn’t want to associate with the big old FTX brand? | Crypto Trading & Speculation |
A review into whether banks are closing accounts of people who are "politically exposed" should be prioritised, a Treasury minister has said.
In a letter to the Financial Conduct Authority, Andrew Griffith said it was vital elected officials could access banking services.
It comes after Nigel Farage said his accounts were being shut for political reasons - something people familiar with the decision dispute.
The FCA has been contacted for comment.
Mr Farage tweeted he was "delighted" the government was putting pressure on the watchdog to act.
Someone classed as a politically exposed person, or PEP, generally presents a higher risk for financial institutions as they are deemed to be more exposed to potential involvement in bribery and corruption by virtue of their position and the influence they may hold.
As a result, banks are required to do extra due diligence on them.
Mr Griffith, who is Economic Secretary to the Treasury, said in his letter to the financial watchdog that while he recognised the importance of measures to prevent money laundering, "it is crucial that an appropriate balance is struck" so that elected officials and their families can access banking services.
He added that it had been "made clear" that "some financial institutions may be failing to strike the right balance of taking a proportionate approach based on a careful evaluation of the actual risk".
"The government is clear that domestic PEPs should be treated in a manner which is in line with their risk, and that banks should not be closing individuals' accounts solely due to their status as a PEP," Mr Griffith said.
This week, Mr Farage, who is the former leader of UKIP, the Brexit Party, and a former member of the European Parliament, said his bank was closing his accounts without justification.
He said he believed his account was being shut because of his status as a PEP and that he had since been turned down by nine other lenders.
But the BBC has been told Mr Farage fell below the financial threshold required to hold an account at Coutts, the prestigious private bank for the wealthy.
On Tuesday, Mr Farage did not dispute the fact that he did not meet Coutts' threshold, but added: "They didn't have a problem with it for the last 10 years."
He added: "Are you telling me that all the other banks say it was a PEP thing and Coutts wasn't? Draw your own conclusions."
In response to the letter to the FCA, Mr Farage tweeted he was "delighted that the Chancellor and City Minister are putting pressure on the FCA to review why banks are giving UK PEPs such a hard time".
"Even better would be to change the law. It is an EU directive and a Brexit government ought to deal with it," he added.
The Treasury has previously said it would be a "serious concern" if financial services were being denied to those exercising their right to lawful free speech.
A spokesman said: "We are already looking into this issue and have passed a law that requires the Financial Conduct Authority to review how banks treat politically exposed persons - so we can strike the right balance between the customer's right to free speech and the bank's right to manage commercial risk." | Banking & Finance |
The closure of care homes could "escalate at speed" amid a cash row over a key contract, providers fear.
Scottish Care said the National Care Home Contract (NCHC) with Cosla, which sets weekly care home fees, is no longer viable due to challenges faced by rising costs and recruitment issues.
Cosla said the latest offer in March - following an "intensive period of negotiation" - was at the "limits of affordability".
However Scottish Care, which represents independent private and charity providers, said it's not enough to cover outgoings, such as paying staff £12 an hour - which the Scottish government has committed to implementing.
In a statement, Scottish Care said: "Over the last few years despite the many challenges facing the sector it has been possible to arrive at an agreement which has enabled the NCHC to continue. This year this has not been possible."
Scottish Care explained that the Scottish government's Agenda for Change settlement will see NHS staff being paid 19% more than a worker in a similar role in a care home setting.
It also said smaller care homes have seen a 500%-plus increase to their bills due to surging energy costs but have been unable to increase their NCHC rates to combat the rise.
Scottish Care added: "Faced with these significant pressures we have sadly witnessed the largest number of care home closures the sector has experienced in the last few months and the very real fear is that this will escalate at speed."
The NCHC was set up around 15 years ago to provide stability in the care sector.
The contract is renewed annually between Scottish Care and Cosla, which represents local authorities. As well as fees, the NCHC also caps profits at 4%.
Since January, Cosla has made two offers which have been rejected by Scottish Care providers.
The latest offer was an increase of 6% to fees.
Currently, NCHC rates for residential and 24/7 nursing care are £855 per week for a nursing home and £719 for a residential care home.
Scottish Care said the contract is based on an "outdated model".
Scottish Care said it has been in discussions with Holyrood since April in regards to the proposed £12 per hour wage pledge, but talks to seek "clarification and a timeframe for this commitment" are "no further ahead".
Scottish Care said: "Our care homes are at a critical juncture. We need to all work together to preserve the NCHC and to ensure continued care and support is possible in a local care home.
"The loss of the NCHC will result in the closure of many more care homes across the country, most especially in rural and remote communities, and even more importantly will cause huge damage and distress to hundreds of care home residents.
"There is a real urgency to save Scotland's care homes."
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Councillor Paul Kelly, Cosla's health and social care spokesperson, said the offer made in March was the "highest ever proposed increase" to the contract and was "the best offer we can make and is at the limits of affordability".
He added: "Local government budgets have been under severe pressure in recent years.
"Despite this, the offer sought to recognise the essential and invaluable role of care homes and their staff within our communities and was inevitably shaped by the severe financial and inflationary pressures we collectively face.
"We understand that as part of Scottish Care's rejection of this offer there was direct engagement with Scottish government in relation to the financial challenges across the sector.
"Meanwhile, councils have continued to ensure payments are timeously made to care home providers, including to enable adult social care workers to receive the Real Living Wage.
"The full offer remains on the table." | Workforce / Labor |
It was three months ago that Samaira Riffat and her daughter, Eman, decided to start sleeping in the lounge of their two-bedroom terrace house in Bolton. “We can’t afford to heat more than one room,” said 21-year-old Eman on Thursday. “So, we moved a bed downstairs for mum, and I sleep on the sofa.”Their situation is, in the call centre worker’s own words, desperate. Both bedrooms have extreme damp and rat droppings have been found in the kitchen cupboards. In December, a burglar broke in – and left with nothing. “What could he have taken?” asked Eman. “Our secondhand air-fryer?”Such tales of hardship come thick and fast at the Citizens Advice charity in Bolton – a centre which specialises in supporting perhaps one of the UK’s most vulnerable groups: those, like Samaira, whose unsettled immigration status means they have no access to any state support or benefits.Local charities such as Bury and Bolton Citizens Advice – which help the least well-off amid the ongoing cost of living crisis – will benefit from the 2022-23 Guardian and Observer charity appeal. So far, readers have donated more than £1,450,000. The appeal ends at midnight on Sunday evening.Every day here in Bolton, advisers hear stories of extreme deprivation: of people using old pasta water to make cups of tea so they don’t need to boil a kettle; of fridges being unplugged to save on electricity; of clients asking food banks for cold items so they don’t need to use ovens or hobs.Yet, even in such a crowded field of poverty, Samaira and Eman’s plight feels especially insidious. Originally from Pakistan, they have lived in the UK for five years. But when Samaira’s husband – Eman’s father – divorced her last year, it left the 53-year-old without any official right to stay in the UK.Now, while she applies to have that changed – a costly, bureaucratic and time-consuming process – she has been left, in the official parlance, with “no recourse to public funds”. Which is to say, the welfare safety net which protects the rest of us – meagre as it is – is not extended to Samaira. She is entitled to exactly no help. No benefits, no housing assistance, no hardship grants.For now, she and Eman must survive on Eman’s minimum-wage salary. “I was supposed to be going to university last September but how can I?” she said. “Even working full-time, we can barely pay rent [£650 from a private landlord] and bills. We have one meal a day because we can’t afford any more. When the burglary happened, we had to pay £300 to have a new door. I had to borrow it from an old college friend.”There are 1.4 million people in the UK who have no recourse to public funds (NRPF), including 175,000 children. They include overseas students; spouses, like Samaira, who were granted leave to remain because of their partner’s status; and people in the process of applying to remain here longer.For those who find themselves suddenly in need, the consequences of not having access to any assistance is often devastating. People with NRPF status are four times more likely to be behind on at least one essential bill, according to research by Citizens Advice. Almost one in five – 18% – have experienced homelessness or housing insecurity.“This is a small group of people but the impact of economic hardship on them is colossal because they have nowhere to turn,” said Richard Wilkinson, chief executive of Citizens Advice Bury and Bolton. “These are people who have often lived in this country for years – many have been key workers – yet, despite that, they are locked out of support when they need it most.”This is where he and his team step in. They signpost clients to charities that can help, while using their legal expertise to identify any available support. They help with immigration applications and appeals. For clients who have got into debt, there is a specialist team advising on ways to deal with repayments.“This cost of living crisis is the biggest challenge we’ve faced as a charity in my time here,” said Wilkinson. “But, for most people who come here, there is almost always something that can be done. At the very least, they leave knowing there are people on their side.”In Samaira’s case, there is good news. Advisers find that, because of certain specific circumstances, the universal credit she received while married should, in fact, never have been stopped. More, she is almost certainly also entitled to housing assistance, too.It would mean receiving roughly £700 a month. “It would change our lives,” said Eman. “All we’ve ever wanted to do is build a better life for ourselves instead of living [hand-to-mouth]. With this, maybe we could start to do that.”Donations can be made online by credit card, debit card or PayPal, or by phone on 0151 284 1126. We are unable to accept cheques | Nonprofit, Charities, & Fundraising |
- Many retailers struck a cautious tone when they provided their holiday forecasts during third-quarter earnings reports, spelling trouble for the shopping season right as it kicks off.
- Holiday spending growth is expected to slow this year after seeing outsized gains during the pandemic years.
- Companies aren't sure just how much consumers will spend this year in the face of persistent inflation and rising interest rates.
There's a dark cloud hanging over Black Friday.
A slew of retailers have issued tepid, cautious or downright disappointing fourth-quarter outlooks over the last few weeks, casting a pall over the crucial holiday season right as they gear up for the biggest shopping day of the year.
The companies, which include everyone from luxury goods giant Tapestry to big-boxer BJ's Wholesale Club, cited a host of dynamics that led them to reduce their outlooks or issue forecasts that came in below expectations.
Some, like Best Buy and Nordstrom, cited the uncertain state of the consumer following months of persistent inflation while others, like Hanesbrands, said demand is simply drying up for its basic t-shirts, socks and underwear as wholesalers look to keep inventories in check.
If there's one theme that captures the commentary, it's caution, and while some retailers may have been overly conservative with their outlooks, the resounding lack of confidence spells trouble for the holiday quarter and raises questions about the overall health of the economy.
"Consumers are still spending, but pressures like higher interest rates, the resumption of student loan repayments, increased credit card debt and reduced savings rates have left them with less discretionary income, forcing them to make trade-offs," Target CEO Brian Cornell told analysts on a call last week.
"As we look at recent trends across the retail industry, dollar sales are being driven by higher prices with consumers buying fewer units per trip. In fact, overall unit demand across the industry has been down 2% to 4% in recent quarters, and the industry has experienced seven consecutive quarters of declines in discretionary dollars and units," he said.
When asked about the upcoming holiday season, Cornell said it was too soon to weigh in on early sales, saying only that the company was "watching the trends carefully."
The holiday shopping season over the last couple of years has seen outsized growth brought on by the pandemic, which gave consumers stimulus payments and an opportunity to pad their bank accounts while they were stuck at home and unable to travel or dine out.
In 2020, holiday spend was up 9.1% from the year prior, according to the National Retail Federation. In 2021, spend was up 12.7% year over year, and in 2022, it was up 5.4%.
As 2023 comes to a close, savings accounts dwindle and consumers continue to face inflation and high interest rates, that growth in holiday spend is expected to slow to 3% to 4%, according to the NRF. That's consistent with the slower growth rates seen between 2010 and 2019 in the leadup to the pandemic.
The expected slowdown has led many retailers to approach the holiday season with more caution than Wall Street anticipated.
On Monday, Bank of America's consumer team found that out of 43 retailers that issued earnings forecasts, 37 – or 86% – came in light of Street expectations.
Take Walmart, for example. The retailer struck a cautious tone with its outlook, which came in below expectations, after it saw consumer spending weaken toward the end of October. Last week, it said it expects adjusted earnings per share of $6.40 to $6.48 for the year, lower than the $6.48 analysts had projected, according to LSEG, formerly known as Refinitiv.
"Halloween was good overall," Chief Financial Officer John David Rainey said on a call with CNBC. "But in the last couple of weeks of October, there were certainly some trends in the business that made us pause and kind of rethink the health of the consumer."
For some retailers, even good news wasn't cheery enough.
Dick's Sporting Goods raised its forecast on Tuesday after posting strong top and bottom line beats and said it now expects full-year earnings per share of between $11.45 and $12.05, compared with the $11.27 to $12.39 range that analysts had projected, according to LSEG.
But compared to its strong third-quarter results, the outlook came off as tempered.
The retailer said it was "excited" for the holiday, but couched that optimism with executives repeatedly noting they were looking forward to the things "within our control" – a refrain heard four times during the hour-long call.
"We are very excited about what we have within our control for Q4. Our products are in stock. We've got tremendous gifts… and the teams are pumped to deliver an amazing holiday experience," CEO Lauren Hobart said on a call with analysts. "We're balancing all of that with caution about the macroeconomic environment and the consumer, because we know that consumers are going through a lot right now. So, I think, we've been reasonably cautious in our guidance."
— CNBC's Melissa Repko contributed to this report. | Consumer & Retail |
- The BIS and three central banks are studying the benefit of pairing blockchain technology with central bank digital currencies, or CBDCs.
- Curve founder Michael Egorov said it’s a “no-brainer” to use a decentralised exchange to test cross-border CBDC trading.
- The report comes amid a European Union proposal to introduce a digital euro.
In a “future tokenised world,” technology from decentralised finance networks could power the world’s trillion-dollar foreign exchange market, according to a new report from the Bank of International Settlements.
Researchers at the BIS, the Banque de France, the Monetary Authority of Singapore and the Swiss National Bank are studying the benefit of pairing blockchain technology with wholesale — bank-to-bank — central bank digital currencies.
That combination could combine foreign exchange trading and settlement “into a single instantaneous step,” according to the report’s authors, “eliminating credit and settlement risk.”
Their report is the latest to suggest that advances made by decentralised finance could power the world of traditional finance in the coming years.
‘This type of initiative will help firms like us bridge the gap between centralised and decentralised finance.’— Hirander Misra, chair and CEO of GMEX
Only 11 countries have launched a CBDC, according to the Atlantic Council, which tracks their development. But 19 of 20 G20 countries are in an “advanced stage” of CBDC development.
The report comes amid a European Union proposal to introduce a digital euro. Proponents have argued CBDCs could make payments faster and cheaper, but critics, including many in the crypto industry, have blasted it as government surveillance overreach.
BIS researchers used test networks on Ethereum to trade digital euros, Swiss francs and Singapore dollars, and picked DeFi protocol Curve’s automated market maker to facilitate those trades. Curve is one of the largest decentralised exchanges, having processed almost $800 million in trade volume over the past seven days.
Curve founder Michael Egorov said it was a “no-brainer” to use a decentralised exchange to test cross-border trading of CBDCs.
‘They took their time to learn, and that’s very exciting.’— Curve founder Michael Egorov
“DeFi is the perfect [proof-of-concept] running with public stablecoins,” he told DL News. “This is something which is already tested and de-risked in many ways.”
Egorov helped the researchers design and test that technology, and said he was impressed with their knowledge of blockchain technology.
“Essentially they can do what DeFi developers can do,” he said. “They took their time to learn, and that’s very exciting.”
There may be doubters.
“There are risks with everything, any technology that you take, and I’m not sure whether decentralised trust, community based technology is good for every digital service that the state is going to offer,” Damian Boeselager, member of European parliament, told DL News. He added that he is not commenting specifically about CBDCs.
But Hirander Misra, chair and CEO of GMEX, a market infrastructure vendor, said DeFi community excitement over the project is warranted, as his industry tackles challenges of implementing “orchestration layers” in markets.
“We know the DEX part will be important too, but had not pulled the trigger on it pending regulatory clarity,” he told DL News.
“This type of initiative helps to drive acceptance and adoption, and will help firms like us bridge the gap between centralised and decentralised finance.”
In their report, the researchers noted the tests were just that — tests. They did not endorse DeFi or Curve, and the participating countries were not necessarily on the cusp of releasing their own CBDCs.
A spokesperson for the BIS did not immediately respond to a request for comment.
“It’s early to say whether this actually happens as adoption,” Egorov said, “but still, it’s the first steps.”
Disclaimer: The two co-founders of DL News were previously core contributors to the Curve protocol. | Banking & Finance |
Asset management giant BlackRock took the first steps Thursday to launch a spot bitcoin exchange-traded fund, which has long been a point of contention between crypto advocates and federal regulators.
The firm filed an application with the U.S. Securities and Exchange Commission to launch the iShares Bitcoin Trust. If approved, the ETF would allow easy access for investors to get exposure to crypto in a product from one of Wall Street's largest companies.
"The Shares are intended to constitute a simple means of making an investment similar to an investment in bitcoin rather than by acquiring, holding and trading bitcoin directly on a peer-to-peer or other basis or via a digital asset exchange," the filing said.
The SEC has so far resisted allowing the launch of a spot bitcoin ETF in the U.S. The regulator is currently in a legal battle with Grayscale over whether the firm will be allowed to convert its Grayscale Bitcoin Trust into an ETF. A decision in that case is expected later this year.
Several other firms have filed and later pulled applications to launch spot bitcoin funds. If the SEC relents, there could be a flood of those products on the market.
ETFs typically take months to launch after an initial filing, if they ever begin trading. The proposed BlackRock fund will likely face heavy resistance from the SEC, and the filing could be pulled before an ETF is ever launched, said Aisha Hunt, principal at asset management law firm Kelley Hunt & Charles.
BlackRock's move comes during a time when crypto prices remain well below their all-time highs and the industry faces increasing scrutiny in Washington, D.C.
Coinbase is listed as the bitcoin custodian for the proposed BlackRock ETF. BlackRock has an existing strategic partnership with Coinbase. The companies announced last year that Aladdin, BlackRock's institutional investment platform, would be connected to Coinbase Prime for crypto trading and custody.
The SEC did not immediately respond to CNBC's request for comment on the new filing.
The entrance of BlackRock into the bitcoin ETF space could be a boost to a sector that has had a rocky start over the past two years.
Bitcoin futures ETFs first launched in 2021, but the ProShares Bitcoin Strategy ETF (BITO) is the only one that has grown to a substantial size, with about $800 million in assets. The fund has lost more than 40% on a total return basis since the launch, according to FactSet. The price of bitcoin hit an all-time high shortly after BITO launched and is down more than 60% since its peak.
BlackRock already has an equity fund related to crypto, the iShares Blockchain and Tech ETF (IBLC), but that fund has less than $10 million in assets more than a year after its launch. | Crypto Trading & Speculation |
ED Seizes Over Rs 65 Crore Of Venkateshwara Hatcheries In FEMA Probe
The seized assets are located in Maharashtra and Karnataka.
Nine properties worth more than Rs 65 crore of prominent hatchery company — Venkateshwara Hatcheries Pvt Ltd — have been seized under the foreign exchange law for allegedly making illegal foreign remittances to purchase a 90-acre house in the U.K., the Enforcement Directorate said on Monday.
The seized assets are located in Maharashtra and Karnataka and the ED case, being probed under the provisions of the Foreign Exchange Management Act, pertains to these remittances made by the company from 2011 to its wholly-owned subsidiary named Venky's Overseas Ltd., U.K.
The total value of these properties is Rs 65.53 crore, according to the ED.
Venkateshwara Hatcheries Pvt. Ltd., the agency said in a statement, had declared the business of VOL to the RBI as agriculture and mining (rearing of ducks, hens, etc.).
After the incorporation of the VOL, the VHPL remitted 'huge funds' in the guise of equity infusion. "However, no such business activity was ever initiated by VOL even after lapse of more than 11 years from its incorporation."
Probe found the VHPL made remittances to the tune of £73,96,069 (equivalent to Rs 65.53 crore) to the VOL since its incorporation till date, the ED said.
The VOL immediately after its incorporation purchased a 90-acre immovable property named “Alexander House” in the United Kingdom through the funds remitted by VHPL with a view to provide convenience to the directors and employees of VHPL, it said.
Probe found that all the funds remitted by the VHPL to VOL subsequently were utilised for repayment of loan obtained by VOL from Barclays Bank, U.K. which was taken for acquisition of the said immoveable property.
"Investigation established that VHPL had no intention to conduct bonafide business through its subsidiary VOL and it was created as a front to purchase an immoveable property in the U.K. for the ultimate enjoyment by the directors, employees and family member of VHPL," the ED alleged.
Considering this as a violation of the law, the agency seized the equivalent value of properties held in India under the provisions of section 37A of FEMA. | Banking & Finance |
Cash-strapped mum Leanne Pengelly said her son is being given measly portions and is having to spend more on packed lunches to stop him coming home hungryFurious mum Leanne Pengelly says her son's free school meals wouldn't even fill a five-year-oldA mum says her 10-year-old son is constantly coming home hungry due to being fed "tiny" portions which "wouldn't fill a five-year-old". Leanne Pengelly has slammed the meals at her son's school, and has released a picture showing a paltry-sized lunch consisting of just potatoes, veg and gravy. Her son, who goes to Millbrook Primary School in Newport, North Wales, is eligible for free school meals which are subsidised by the government. But Leanne, 43, was furious when she realised how small the portions were after picking her child up early from school one day. “My son wasn’t well so I went to pick him up from school and they gave him his lunch to eat and I was shocked at how little there was," she said. "He has always said the meals are small, and he's starving when he gets in from school." Millbrook Primary School has defended its portion sizes and says the meals meet nutrition standards (
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Google Streetview) The mum says she has since raised her concerns with school staff, with one teacher suggesting she would raise the issue with her local council. "I brought it up with Millbrook a few years back, but nothing got done and I had never seen the size of them," she added. "My son gets free school meals, but it costs me extra money to go out and buy stuff for packed lunches because he's so hungry. "After picking him up from school I had to make him more food because he was still so hungry, so I can't imagine how he must feel every day at school. "He is a 10-year-old boy and they wouldn’t fill a five-year-old up.” The food presented to her son (
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Leanne Pengelly / SWNS) Children at the school are currently being taught at the former Brynglas Adult Training Centre two miles away from the original site, there is no confirmation on when they can return. A spokesperson for Millbrook Primary School and Newport City Council said: “All school meals supplied by Newport City Council’s contracted catering company have to meet Welsh Government’s quality standards. “They are nutritious, freshly cooked and affordable. We are sorry this parent felt this meal, which included a pudding, was insufficient but we would urge her to raise her concerns directly with the school. “The school sent the meal home with the child, who was unwell, as a gesture of goodwill. It is not something they are legally required to do.” Read More Read More Read More Read More Read More | Inflation |
Employer-sponsored, tax-deferred retirement plans like 401(k)s and 403(b)s have rules about when you can access your funds. As a general rule, if you withdraw funds before age 59 ½, you’ll trigger an IRS tax penalty of 10%. The good news is that there’s a way to take your distributions a few years early without incurring this penalty. This is known as the rule of 55. If you’re contemplating early retirement, you should know how the rule of 55 works. If you have retirement planning questions, consider talking to a financial advisor who can help you create and manage your long-term financial plan.
What Is the Rule of 55?
Under the terms of this rule, you can withdraw funds from your current job’s 401(k) or 403(b) plan with no 10% tax penalty if you leave that job in or after the year you turn 55. (Qualified public safety workers can start even earlier, at 50.) It doesn’t matter whether you were laid off, fired, or just quit.
The distributions are not completely tax-free: Like all withdrawals from a traditional 401(k) or 403(b), you do have to pay income tax. Only the 10% tax penalty is bypassed in this scenario.
In addition, note that employers are not obliged to allow early withdrawals; and, if they do allow them, they may require that the entire amount be taken out in one lump-sum withdrawal. This could expose you to a higher income tax.
This rule applies to current – not former – 401(k) or 403(b) plans. The government does not permit penalty-free withdrawals before 59.5 from plans you had with a previous employer. If you want access to that money under the rule of 55, you would have to transfer those funds into your current 401(k) or 403(b) plan.
How to Use Rule of 55 to Fund an Early Retirement
If you’re thinking about early retirement then chances are that you’ll need to take early withdrawals from your retirement account in order to fund your life. Retiring early means you won’t have access to Social Security benefits so you’ll need to not only pay for your living expenses but also some added expenses like more expensive health insurance. Unless you have a lot of money sitting around in savings and checking accounts, you may want to consider using the rule of 55 to take early withdrawals.
There are a few rules that you need to comply with in order to qualify for these withdrawals. Those rules are:
Age of Retirement: You must leave your job after turning 55, or the calendar year of. This reduces to the age of 50 if you’re a public service employee. You cannot retire earlier and then take withdrawals or the rule of 55 doesn’t work.
Work: You must leave your job to start taking withdrawals but you can return to work later. You aren’t locked into retiring forever.
Retirement Account: You can only withdraw funds from your most recent 401(k) or 403(b) account for the rule of 55 to work.
If you meet the requirements for all of these rules then the rule of 55 might be a good fit for you in order to avoid paying the early withdrawal penalty. In order to start taking these withdrawals, you’ll just have to prove that you qualify for the plan administrator. It’s important, though, that you plan the timing of those withdrawals effectively.
Planning Out the Timing of Your Withdrawals
The timing of your early withdrawals is important, says Dave Lowell, certified financial planner and founder of Up Your Money Game.
“If you were employed for most of the year and had a relatively high income, then it makes sense to not withdraw money under the rule of 55 in that calendar year, since it will add to your total income for the year and possibly result in you moving to a higher marginal tax bracket,” Lowell says.
The better strategy in that scenario may be to use other savings or take withdrawals from after-tax investments until the next calendar rolls around. This may result in your taxable income being much lower.
Alternatives to Rule of 55 Withdrawals
The rule of 55, which doesn’t apply to traditional or Roth IRAs, isn’t the only way to get money from your retirement plan early. For example, you won’t have to pay the penalty if you take distributions from a 401(k) early for these reasons:
You become totally and permanently disabled.
You pass away and your beneficiary or estate is withdrawing money from the plan.
You’re taking distributions to pay deductible medical expenses that exceed 7.5% of your adjusted gross income.
Distributions are the result of an IRS levy.
You’re receiving qualified reservist distributions.
You can also avoid the 10% early withdrawal penalty if early distributions are made as part of a series of substantially equal periodic payments, known as a SEPP plan. You have to be separated from service to qualify for this exception if you’re taking money from an employer’s plan, but you’re not subject to the 55 or older requirement. The payment amounts you’d receive come from your life expectancy.
Bottom Line
The rule of 55 allows you to take money from your employer’s retirement plan without a tax penalty before age 59.5. But that doesn’t necessarily mean you should. Whether an early retirement is right for you depends largely on your goals and overall financial situation.
“Retiring earlier than 62 means no Social Security income,” Lowell says. “The person needs to make sure they know where their income is coming from.”
For example, will you have a pension that pays out regular annuity payments to rely on? Or will you be able to draw from taxable investment accounts, savings accounts, CDs or other assets to cover your expenses in early retirement?
If you plan to retire early but you don’t think you’ll need to tap into your 401(k) just yet, consider what else you could do with it. Leaving it with your employer to continue growing is one option; rolling it over to an IRA is another. The more thought you give to how and when you’ll need to use those assets beforehand, the better you can position yourself for a financially sound early retirement.
Tips for Retirement Planning
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.
If using a 401(k), don’t forget to take advantage of any employer match!
Photo credit: ©iStock.com/AndreyPopov, ©iStock.com/shapecharge, ©iStock.com/designer491 | Personal Finance & Financial Education |
I love searching for the perfect product to fit my needs on Amazon. However, there's always a risk that what you see online is not what you get when it comes in the mail. Although Amazon has a pretty good return and refund policy, we'd all rather get a good quality product on the first try.
That's why the world's largest online retailer is offering a new feature that will help customers decide whether a product is worth buying or not.
What new feature is Amazon introducing?
The new feature is still being tested out; however, it seems that Amazon plans to begin using a new warning label for those products that have poor reviews and lots of returns. The label will have a bold headline saying, "Frequently returned item" and below will say "Check the product details and customer reviews to learn more about this item."
The labels are not yet visible to all Amazon users, so the company is likely trying it out on a few select accounts. For now, shoppers will have to do their research and look carefully at how many stars the product had and what people are saying about it until Amazon makes a wide release of the new label.
Who will benefit from these warning labels?
Amazon customers everywhere will of course benefit from this new label; however, the company itself will also strongly benefit. Believe it or not, having to return a poorly-made product is a headache for the customer and the seller. The cost for return merchandise is an expensive part of Amazon and sellers' overhead. By providing this new label and warning customers to look closely before buying a product, Amazon will likely save tons of money on processing fees as well as save valuable warehouse space for all the good products.
I hope their testing goes well and that they can release this new label within the coming weeks or months, as this would greatly benefit shoppers everywhere.
Are you looking forward to seeing this new Amazon label? Tell us your thoughts.
For more of my tips, subscribe to my free CyberGuy Report Newsletter by clicking the "Free newsletter" link at the top of my website.
Copyright 2023 CyberGuy.com. All rights reserved. | Consumer & Retail |
Food prices continued to soar over the last year, according to new research as the prime minister meets industry leaders over high costs.
Supermarkets and farmers will discuss with Rishi Sunak how the UK can improve the way it produces and sells food.
Consumer group Which? said the price of some goods jumped by as much as 25% in April compared to the same month last year.
Dairy goods such as cheese saw the biggest rise, said Which?
Overall, in a survey of the UK's eight largest supermarkets looking at 26,000 products, it said food prices rose more than 17%.
Mr Sunak is meeting around 70 food industry leaders at Downing St on Tuesday.
Supermarkets are starting to bring down the prices of bread and butter but Which? says prices remained at "shockingly high levels" compared with last year.
It also found supermarket own-label budget items were up 25% in April compared with the same period 12 months ago.
Tesco announced that it is cutting prices of vegetable and sunflower oil as well as pasta by 15p. But a 500g bag of penne pasta is still 80p - in 2021, it was 50p.
However, Bill Grimsey, the former boss of frozen food chain Iceland warned: "If anybody thinks prices are gong to come down quickly anytime soon, well they're not."
Farmers and businesses have been hit by rising operating costs, in part caused by Russia's invasion of Ukraine.
Other expenses such as shipping costs - which soared during the Covid pandemic - have since fallen but Mr Grimsey said shoppers are unlikely to see the impact of this on the prices they pay.
'No good reason'
Ahead of the summit, the government said it would offer 45,000 visas to farmers next year to recruit fruit and vegetable pickers from overseas.
The move comes after the Home Secretary Suella Braverman said there was "no good reason" the UK could not train its own fruit pickers to bring immigration down.
The government also pledged to put greater emphasis on farmers' interests in future trade deals and said it would review horticulture and egg supply chains to "ensure farmers get a fair price for their produce".
Many farmers have argued that supermarkets are not giving them a fair deal for certain goods, such as eggs.
Rising food prices are one of the main drivers behind the rise in the cost of living, but the British Retail Consortium (BRC), which represents retailers, has said they are "doing all they can to keep food prices as low as possible".
The BRC has also called on the government to streamline regulation around recycling, packaging and Brexit to try to bring down prices for consumers.
Julian Marks, chief executive Barfoots, where vegetables are grown on 8,500 acres (3,439 hectares) across the south coast of England, said costs have risen by as much as 30% in the last year.
"Home-grown food is a very useful, strategically important thing to have in the world we now live in," he said.
But with profitability halved and national minimum wage costs up 40% in five years, "it's pretty depressing", he added. "We're definitely not able to pass all our costs on," he added.
The business needed about 700 seasonal workers, but Mr Marks said the company had to rely on workers from further afield.
We've been hearing for months about the pressures our farmers and growers have been facing, from sky high costs and labour shortages to extreme weather.
Some have had to produce their food at a loss, others have been planting less leading to warnings that farmers are facing an existential crisis.
They want a fairer price for their produce. Meanwhile supermarkets are under increasing pressure to bring food prices down. Something has to give.
Former Sainsbury's boss, Justin King, says we've been through a golden era of cheap food. But getting the balance right is a hard circle for the government to square in a cost of living crisis. | Inflation |
UK grocery inflation continued to climb during February to reach a new record high of 17.1%, according to closely-watched industry data.
Kantar Worldpanel reported that the increase over the past 12 months meant that families faced a potential £811 annual rise in the cost of their regular shopping basket.
It had been hoped that a decline in the pace of grocery prices during December would mark a turning point in that element of the cost of living crisis.
But Kantar later revealed that temporary Christmas discounting had been largely responsible, as the big four chains fight to maintain market share amid the challenge posed by discounters and other cheaper rivals.
Its latest report showed that while all of the major stores, with the exception of Morrisons, had expanded sales during the 12 weeks to 19 February, Aldi, Lidl and Iceland had grown their market shares at their expense.
The lure of cheaper own-label groceries saw Aldi achieve a record market share of 9.4% over the period, Kantar said.
Tesco, Sainsbury's, Asda and Morrisons have expanded their own value offerings given the shift in consumer behaviour driven by the wider cost of living crisis.
Food, along with the cost of many other everyday products, has become more expensive largely due to the surge in energy prices seen since the Russian invasion of Ukraine.
The war can also be blamed for many commodity costs, such as wheat, rising markedly.
While the main rate of inflation has eased from its 11.1% peak seen in October last year, food and other grocery costs have been a major factor behind the CPI measure remaining stubbornly above 10%.
Unilever, which is behind a host of everyday products including Marmite and Magnum ice creams, has been among manufacturers warning that price increases are yet to end.
Producers - just one element of a complicated supply chain - are still grappling rising energy bills and other costs.
It also remains to be seen whether the shortage of salad items, which has forced most supermarkets to limit sales, will become a significant inflationary headwind ahead.
Kantar said that the issue came outside of its reporting window but that it expected to reveal a hit when its next report is published.
Its head of retail and consumer insight, Fraser McKevitt, said: "Shoppers have been facing sustained price rises for some time now and this February marks a full year since monthly grocery inflation climbed above 4%.
"This is having a big impact on people's lives.
"Our latest research shows that grocery price inflation is the second most important financial issue for the public behind energy costs, with two-thirds of people concerned by food and drink prices, above public sector strikes and climate change.
"One quarter say they're struggling financially, versus one in five this time last year.
"The numbers speak for themselves." | Inflation |
Real estate marketplace Zillow has launched a new program to help people who want to buy homes but are being squeezed out of the market by a surge in interest rates.
Zillow Home Loans is offering mortgages with a 1% down payment option for eligible homebuyers looking to own property in Arizona, the company said Thursday. Zillow also plans to expand the program to other markets.
Zillow will contribute an additional 2% at closing, the company said.
"For those who can afford higher rent payments but have been held back by the upfront costs associated with homeownership, down payment assistance can help to lower the barrier to entry and make the dream of owning a home a reality," Zillow Home Loans' senior macroeconomist Orphe Divounguy said in a statement.
The program effectively slashes the time it would ordinarily take to save for a down payment.
"The rapid rise in rents and home values means many renters who are already paying high monthly housing costs may not have enough saved up for a large down payment, and these types of programs are welcome innovations in lowering the potential barriers to homeownership for those who qualify," he added.
On Wednesday,since 2000. The average rate on a conventional 30-year fixed-rate mortgage jumped to 7.31% last week, up from 7.16% the previous week, according to The Mortgage Bankers Association (MBA).
As a result, many aspiring homeowners are being sidelined, driving mortgage applications down to a 28-year-low, according to the MBA.
for more features. | Real Estate & Housing |
Social Security supports more than 70 million Americans, ranging from retirees to disabled people and children. But it's also an incredibly complex system, with an operations manual that is 20,000 pages long, covering a tangle of 2,700 rules that can easily trip up claimants and cost them tens of thousands of dollars in lost benefits.
Some of the pitfalls are detailed in a new book, "Social Security Horror Stories," by Boston University economist Laurence Kotlikoff and personal finance writer Terry Savage. In some cases, the errors aren't the fault of beneficiaries, but stem from the Social Security Administration's own missteps. Yet claimants have little recourse for fixing the problem or otherwise protecting themselves.
There's a lot at stake in improving the system, Kotlikoff told CBS MoneyWatch. Social Security is often a person's biggest financial asset aside from homeownership, and the steady stream of monthly income keeps millions of seniors from slipping into poverty. But the program can be opaque and, perhaps unintentionally, encourage certain choices that cause people to lose out on tens of thousand of dollars in benefits, Kotlikoff said.
"We probably have about 20% of retirees who are totally dependent on Social Security for their only source of income," he noted. "This is a big deal. You have to take this seriously, and you have to do your homework."
Kotlikoff, who has published academic research about Social Security and is the co-author of the best-selling "Get What's Yours: The Secrets to Maxing Out Your Social Security," said that the mistakes can range from claiming benefits too early to following the wrong advice, such as claiming both a survivors benefit and retirement benefit at the same time, which can also lead to a loss in future payouts.
He also cautions people against relying solely on the Social Security Administration for advice, because he and Savage have heard from people who were given wrong or misleading advice by SSA employees, leading to costly mistakes that can be difficult to impossible to fix. (For instance, if you decide you claimed too early, you only have 12 months to reverse the decision.)
"People really need to understand that you're out there on your own," Kotlikoff said.
The Social Security Administration said in a statement to CBS MoneyWatch that improving its business processes "to serve our customers better remains a top priority."
Here are four common mistakes that people often make in claiming Social Security, according to Kotlikoff.
Claiming too early
This may be the single biggest issue impacting Americans because Social Security allows people to begin collecting their benefits when they turn 62, or about five years before the full retirement age for most people. By claiming Social Security early, though, your monthly benefits will be shaved by 30%.
People can also wait to claim Social Security until they are 70, when they receive the maximum payout — about 76% higher than at age 62. But only about 6% of Americans wait until they turn 70 to claim Social Security.
Kotlikoff thinks the Social Security Administration may inadvertently nudge people into claiming too early by providing a life expectancy calculator and actuarial tables that give the average number of additional years you could live. He said people should claim Social Security based on the maximum number of years they could live — not the average.
"Taking an actuarial calculation is completely irrelevant to any one person," he said. "Think about homeowners insurance. People have one house, and they want to go look at the catastrophic outcome which is, it burns downs."
Added Kotlikoff, "They have one life and they want to look at the catastrophic outcome financially, which is they live to the maximum."
Claiming too early can cost you, Kotlikoff estimated in a research paper published last year.
The "widow's scam"
Another mistake that can result in lost benefits is what Kotlikoff calls "the widow's scam," which usually stems from poor decisions about filing for benefits that can lead to lower payments.
One of the 12 types of benefits offered by Social Security is the survivors benefit, which is paid to widows, widowers and dependents of eligible workers. In the case of widows and widowers, they can file for Social Security payments based on their spouse's earnings, and claim as early as age 60.
But sometimes people mistakenly file for both survivor's benefits and their own retirement benefits, although the Social Security Administration will only pay one benefit, whichever is higher.
The problem comes if the survivor's benefit is higher because by claiming the retirement benefit at the same time, the widow or widower is locking in their retirement benefit at the age when they make that claim. That risks the person losing out on thousands of higher benefits they would have received if they waited until full retirement age, or even age 70, to claim.
"You go into Social Security and you say, 'Hey, I want my 76% higher check for the next possibly 30 years,'" Kotlikoff said. "And they say, 'No, look at our records here. You filed for both benefits, you checked off the box."
In that case, if it's been more than a year since they claimed their retirement benefits, it won't be possible to reverse that decision.
The "earnings test" scam
Another Social Security rule that can trip up older Americans is the so-called earnings test, which states that people who claim before their full retirement age and then continue to work will face a heavy tax if they earn above a fairly low income threshold.
In 2023, that "earnings test" is $21,240, which means people who collect Social Security before age 67 will get $1 deducted from their Social Security payments for every $2 they earn above that limit. That often dissuades older workers from continuing to work after they claim, given that they fear losing a chunk of income to this tax.
But what isn't widely known, Kotlikoff said, is something called the "adjustment of reduction factor," or ARF, which restores those lost benefits once the claimant reaches full retirement age.
"Know that it's a good thing to lose money to the earnings test because for every dollar you lose to the earnings test, you get about about roughly $1.20 back in benefits," Kotlikoff said. "But people aren't being told that, so they mistakenly think that going back to work just makes no sense because all they're doing is working for the government."
Of course, not everyone might be able to hold off, at least on a financial basis, for their benefits to be adjusted when they hit 67. But some people over 60 might make different decisions about working if they were aware of this issue, Kotlikoff noted.
The overpayment trap
This issue impacts about 1 million Social Security recipients a year, and can cause financial hardship and stress, asearlier this month.
This happens when Social Security overpays beneficiaries, who typically find out years later when the Social Security Administration sends a letter demanding repayment — even if it was not their fault. Often, the fault sits with the Social Security Administration, as detailed in this 2022 report from the Social Security Administration's Inspector General that found employees sometimes enter the wrong information into SSA's systems or incorrectly calculate benefits.
But if this happens, the recipient will have to pay up, as "60 Minutes" detailed. And if you want to appeal, it can take months or years to clear up, with no guarantee that it will be resolved in your favor.
That's why Kotlikoff urges people to keep careful records of their interactions with the Social Security Administration, as well as the information they send to the agency. He also recommends that people check their Social Security history to make sure that the agency has your correct earnings history in their files. You can do this by creating a "My Social Security" account on the agency's site, where you can look through your past income to check for accuracy.
In a statement to CBS MoneyWatch, the Social Security Administration said, "We continually strive to improve stewardship of our programs and reduce improper payments. While staffing losses and resource constraints have challenged our service delivery, our payment accuracy rates remain very high."
The agency also noted it is responsible to taxpayers "to be good stewards of the trust funds," referring to the financial accounts that hold money for its programs. "Each person's situation is unique, and we handle overpayments on a case-by-case basis," it added.
"If you start seeing that you're getting overpaid, you should set that money aside because they're going to come back for it at some point," Kotlikoff said. With 1 million people overpaid every year and about 70 million Social Security recipients, "Your chance of being one of those people is pretty high."
for more features. | Personal Finance & Financial Education |
The state pension triple lock is "not sustainable" and must be scaled back to ensure the Government can afford to support future retirees, a think-tank has warned.
The Institute for Fiscal Studies (IFS) said growth in pensioner benefits had far outstripped spending on working-age payments since 2010, when former chancellor George Osborne began cutting back benefits.
Prioritising pensioners implied a “significant intergenerational transfer”, which the IFS said might not be as generous in the long-term.
It added: “In the limit, this policy is not sustainable as it implies pensions becoming an ever-increasing share of national income, and it is possible that the population currently of working age will not all end up benefiting in full from the same generosity.”
The triple lock has long been championed by the Conservative Party, and ensures the state pension rises by the previous September's inflation, wage growth or at least 2.5pc.
April's 10.1pc increase will boost weekly payments for those on the full state pension to £203.85.
The IFS analysis highlighted that real spending per working-age adult had climbed from around £1,200 per year in the late 1970s to £3,200 at the start of 2010, before falling back to £2,500 just before the pandemic.
By contrast, pensioner spending has climbed steadily, including during the 2010s.
The IFS said: "On the eve of the pandemic, the working-age benefit bill made up 4.3pc of national income, while the pensioner bill accounted for 5.5pc. That 1.2 percentage point gap is around the highest since comparable records began in 1978–79, and has steadily grown since the mid 1990s.
"The priority given to transfers made in the working-age portion of life versus those made during retirement is itself an important choice, and has in recent years helped shape the austere context within which working-age transfer policy is made."
The IFS noted that basic support for a single person with no other source of income is now 137pc higher for those just over pension age than those of working age. This compares with 32pc in 1990.
It added: "This partly reflects the ageing population, but also policy change – over the past decade or so there have been significant cuts to the working-age benefit system, while pensioner benefits were largely protected or increased."
The IFS also said changes to working age benefits since the late 1990s had been successful in pushing more people into work, but had also left many trapped in low paid, part time jobs, with little incentive to work more hours.
It suggested that the benefit to taxpayers overall had been limited because many of these people who found a job paid little in tax and were often still entitled to in-work benefits due to the lack of financial incentive to work more hours. Doing so meant more of their benefits would be clawed back.
The think-tank said former chancellor Gordon Brown's expansion of tax credits, which offered income top-ups for low-earning households, mostly increased support for working 16 hours per week but “often implied strong financial disincentives to go further”.
It added that the switch to universal credit, which has replaced a raft of other benefits, "especially increases financial incentives to do so-called ‘mini-jobs’ at very low hours, and makes little difference to the incentive to shift from full-to part-time work".
Overall, it said the incentive to go from part to full-time work had been weakened. In 1997 to 1998, it implied losing an average of 52p to taxes or withdrawn benefits for every £1 earned. That amount is now 58p.
Just over 8.2 million people in the UK currently work part-time. This represents a quarter of the workforce and is up from six million in 1992. | United Kingdom Business & Economics |
IDBI Bank Stake Sale Unlikely This Fiscal, Says DIPAM Secretary
DIPAM has received Rs 28,000 crore in the form of divestment and dividend receipts from the central public sector enterprises.
The government's stake sale in IDBI Bank Ltd. is not expected to conclude this financial year, said DIPAM Secretary Tuhin Kanta Pandey.
"We practically don't expect the sale of IDBI Bank to conclude before March," Pandey told BQ Prime on the sidelines of a conference conducted by FICCI on Thursday.
According to him, the transaction is on course. However, the Reserve Bank of India is still conducting the vetting process, and there are other criteria that need to be complied with, he said.
The Indian government and the Life Insurance Corp. of India together own about 61% of the equity stake in IDBI Bank. Last year, the central government announced a sale process for the lender, and the Department of Investment and Public Asset Management was involved in closing the sale.
The government has a divestment target of Rs 51,000 crore for FY24, and with an already slow start for the proceeds this year, the delay in the sale could lead to it falling short of its target.
Government Raises Rs 28,000 Crore Via Divestment, CPSE Dividend
DIPAM has received Rs 28,000 crore in the form of divestment and dividend receipts from the central public sector enterprises till date in this fiscal.
For fiscal 2024, the department has an overall target of Rs 94,000 crore, of which, till date, it has achieved nearly 30%, or Rs 28,000 crore.
"...together, we have done about Rs 28,000 crore till date, and we have a combined target of disinvestment and CPSEs dividend of Rs 94,000 crore. We will definitely try and work hard to move near that," Pandey said. | India Business & Economics |
Two-Thirds of Ukrainian Refugees in Czechia Live below Poverty Line
Wednesday, 9 August 2023
The incomes of two-thirds of Ukrainian refugees in Czechia fall below the poverty line since a significant number working in unskilled positions.
As a study by the PAQ agency idicates, 68% of refugees live below the poverty line, while 45% of households have survived for less than a month on their savings.
67% of economically active refugees have found employment, although over half of them work in less qualified positions, and more than 40% are even working significantly below their qualifications, thus not fully utilizing their work potential.
"Unskilled work entails a lot of problems. Two-thirds of refugees earn only up to 150 Czech crowns net per hour. A quarter need to work more to sustain themselves," the research states.
A third of respondents also stated that they work without social and medical insurance, as well as without vacation days. Two-thirds of refugees claim that their earnings amount to up to 150 Czech crowns per hour.
The biggest obstacle to finding work, according to refugees, is insufficient knowledge of the Czech language (71%). Other problems include the inability to care for children (29%) or issues with recognising Ukrainian educational documents (28%).
Approximately half of the refugees (49%) live in rented accommodation. This is related to changes in legislation, according to which only vulnerable individuals, such as children, the elderly, or those caring for children under 6 years old, have the right to free housing after the first 150 days from the moment of temporary protection provision.
In a survey by PAQ Research in cooperation with the Institute of Sociology of the Czech Academy of Sciences, 1,425 households participated, including 3,789 individuals, including 1,203 children. The survey was conducted in June. | Europe Business & Economics |
A new economic organisation, set up by Liz Truss, will launch on Wednesday, with a report claiming the average British person is £10,000 worse off than people in the US.
The Growth Commission, made up of economists brought together by the former prime minister, said its work would focus on highlighting the issue of low growth - echoing Ms Truss' priorities during her short-lived premiership.
In its first piece of work, the group will claim "consistent growth levels" of 3% by 2040 are achievable in the UK, and would lead to £35,000-worth of higher spending per household.
Politics live: Migration bill will 'consign more people to slavery'
The Commission does not outline policy suggestions of how to reach this figure, but said it would provide further analysis around large scale fiscal events.
Co-chairman Douglas Williams said he hoped the report would kick off a "fruitful, non-partisan exploration" of why there is a problem with low growth and "what governments around the world can do to reinvigorate our economies and improve lives".
The report says UK GDP per capita is currently £36,568, compared to £52,996 in the US.
"The average American is earning a third more than the average Briton, roughly a £10,000 gap in annual spending power between the two, which represents a difference of £24,000 between the average household in the UK and the US," it adds.
"If over the next two decades the UK economy could achieve annual GDP per capita growth of 3% - as was achieved in the UK in 1950s and is currently being achieved in a country like Poland - the economy would be 65% bigger by 2040.
"This translates in today's money to nearly £15,000 more for each person to spend each year; and additional tax revenues of £670bn."
The group's second co-chairman, Shanker Singham, claimed opportunities for growth in the UK were "abundant and increasing".
He added: "Failure to act will see us miss out on the opportunities presented by huge technological advances that we have seen especially over the last 20 years."
But with the former PM's reputation in Downing Street to contend with, the Commission's suggestions could come in for criticism.
Ms Truss took over in Number 10 back in September, with a promise to take on the so-called "anti-growth coalition" both in parliament and Whitehall.
But following a number of un-costed tax cuts outlined in her mini-budget, the markets were sent into a spiral, damaging both the economy and her credentials.
She attempted to save her premiership by sacking her chancellor, Kwasi Kwarteng, and bringing in Jeremy Hunt to reverse the policies.
But Ms Truss lost the support of the Conservative Party and resigned after just 49 days in power.
Mr Hunt remained as chancellor in Rishi Sunak's cabinet and the pair have taken a different approach, focusing on cutting inflation rather than taxes.
However, despite promises to halve the figure before the year is out, the number has remained stubborn and the Bank of England has continued to increase interest rates as a result.
And figures released on Tuesday showed fixed mortgage rates were now higher than in the fall-out from the mini-budget. | United Kingdom Business & Economics |
ASK Automotive IPO Subscription: Day 1 Live Updates
The IPO has been subscribed 0.13 times or 13% times as of 11:48 a.m. on Tuesday.
The initial public offering of ASK Automotive Ltd. will open for public subscription on Tuesday. The three-day issue, priced between Rs 268 and Rs 282 per share, will conclude on Nov. 9.
The Rs 834-crore initial share sale comprises entirely of an offer for sale of up to 2.95 crore (2,95,71,390) equity shares by promoters Kuldip Singh Rathee and Vijay Rathee. There is no fresh issue segment in the IPO. After the issue, the promoters' shareholding will reduce to about 85%.
Since the issue of ASK Automotive is completely an OFS, the entire proceeds will go to the selling shareholders and the company will not receive any funds from the issue.
Business
Gurugram-based ASK Automotive is a manufacturer of brake-shoe and advanced braking systems for two-wheelers in India, with a market share of approximately 50% in FY23, in terms of production volume for original equipment manufacturers and the branded independent aftermarket.
On the financial front, the company reported a consolidated turnover of Rs 2,555 crore for FY23, an increase from Rs 2,013 crore in FY22. Its net profit rose to Rs 123 crore from Rs 83 crore.
Subscription Status: Day 1
The IPO has been subscribed 0.13 times or 13% times as of 11:48 a.m. on Tuesday.
Institutional investors: Zero
Non-institutional investors: 0.09 times or 9%
Retail investors: 0.23 times or 23% | Stocks Trading & Speculation |
Birmingham City Council has effectively filed for bankruptcy.
The council, which has been hit with a £1bn equal pay bill, had already announced a freeze on non-essential spending.
It has issued a Section 114 notice - an admission that it cannot manage its catastrophic financial crisis without help.
In a statement, the council said: "Today’s issuing of a Section 114 Notice is a necessary step as we seek to get our city back on a sound financial footing so that we can build a stronger city for our residents."
It adds: "Despite the challenges that we face, we will prioritise core services that our residents rely on, in line with our values of supporting the most vulnerable."
A Section 114 notice is the equivalent of a white flag surrender that officers cannot see a way out of the mess without support and intervention, usually a plea to the government for help.
Finance director Fiona Greenway revealed this morning that external auditors have ruled its accounts for 2020-22 do not fully account for equal pay liability and are therefore not closed.
The council had appointed new advisers and commissioned reviews earlier in July this year, to look into the root causes of its financial issues.
Tories react to the S114 notice - condemning the Labour leadership for a catalogue of concerns
In a statement, they said: "Today (Tuesday 5th Sept) the Labour Administration at Birmingham City Council have published a section 114 notice stating the Council's general fund is in a negative position due to the costs of Equal Pay, and that the Council has insufficient resources to meet expenditure and the is not currently able to agree a solution that will allow suitable funding or financing to be obtained for this liability.
Leader of the Opposition Cllr Robert Alden said: "Labour's failure in Birmingham has become clear for all to see, what Labour pledged was a Golden decade ahead to voters in 2022 turns out to be based on budgets in 20/21 and 21/22 that did not balance and were unfunded.
"Combined with Birmingham Labour’s refusal to deal with equal pay over the last decade this has created this mess where residents will now lose valuable services and investment."
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know... | United Kingdom Business & Economics |
In today's lightning-paced digital world, let's chat about something seriously exciting: Fintech Financial Services. It's like a magical fusion of money and tech, and it's turning our money game on its head.
From embedded finance to developing financial software and all the jazz in between, fintech is giving traditional banking a run for its money in ways we couldn't even daydream about.So, what's the deal with this fintech thing, you might wonder? Well, it's just a swanky way of saying "financial" and "technology" all wrapped up in one neat package.
Boosting Your Financial Game with Tech
Let's get down to the nitty-gritty. Fintech financial services are like the Swiss Army knife of money management.
They're using technology to turbocharge your financial journey. Picture this: online payment platforms, robo-advisors, peer-to-peer lending, and snazzy automated investment tools.
It's like having a financial sidekick that hands you superpowers - real-time access to your account, lightning-fast fund transfers, and genius-level investment choices.
Then there's the red-hot topic of embedded finance. This is where businesses weave financial services into their day-to-day operations, offering you a seamless financial experience right where you need it.
Imagine sauntering into a store and being able to buy things on credit at the checkout counter. That's the magic of embedded finance.
Changing the Money Management Game
Fintech isn't just a buzzword; it's a game-changer. Traditional banking could sometimes feel like a drag with its old-school processes, limited info access, and slow-as-molasses transactions.
But fintech financial services? They're all about real-time account access, fuss-free fund transfers, and personalized financial insights, all served up on user-friendly apps and platforms.
It's like having a financial guru in your pocket, helping you make shrewd money moves.
The Four Pillars of Fintech
Fintech stands on four sturdy pillars:
- Payments and Money Transfers: Fintech is making sending and receiving money a breeze with quick, secure payment options, international money transfers, and those nifty contactless payments we can't get enough of.
- Lending and Financing: It's like a lending revolution with peer-to-peer lending platforms and online loans, giving regular folks and businesses a shot at loans without the middleman drama.
- Investment and Wealth Management: Fintech serves up snazzy automated investment tools, robo-advisors, and clever algorithmic trading platforms, making investment strategies accessible and oh-so-personal.
- Insurance Technology (Insurtech): Insurtech is a superhero in the insurance world, with digital claims processing, custom-tailored policies, and data-driven risk evaluations.
The Flipside of Fintech: The Challenges and Hiccups
But, it's important to note that it's not all smooth sailing and clear skies. Fintech brings a few bumps in the road.
There's the risk of cyberattacks and privacy worries as more financial stuff goes digital. Plus, some folks might miss the human touch when it comes to financial advice.
The Bold Future of Fintech - Venturing into the Unknown:
Fintech isn't just a fresh coat of paint; it's a total makeover for the financial world. It's shaking traditional banks to their core, offering tailor-made experiences, real-time insights, and platforms that are as user-friendly as your favorite app.
With embedded finance gaining momentum and financial software getting smarter, the financial industry is on the cusp of a revolution.
The Engines of Fintech Magic
Five key technologies are fueling the fintech rocket:
- Blockchain and Cryptocurrency: Blockchain ensures your transactions are as secure as Fort Knox, while cryptocurrencies offer an alternative way to exchange value.
- Artificial Intelligence (AI) and Machine Learning: AI powers chatbots, robo-advisors, and top-notch fraud detection, making your financial life a breeze.
- Biometric Authentication: Think fingerprints and facial recognition, making your security a top priority.
- Big Data and Analytics: Data-driven insights offer personalized financial tips, savvy risk assessments, and keep the bad actors at bay.
- Cloud Computing: Cloud-based platforms make your financial life a breeze, providing access to your money anytime, anywhere.
The Fintech Playbook
Fintech isn't just shaking things up; it's writing a whole new playbook for the financial game.
It acts as a bridge, connecting people and businesses with financial services through slick digital platforms. It's all about convenience, efficiency, and often fewer fees compared to traditional banks.
Navigating the Fintech Legal Landscape
One of the bumps on the fintech road is dealing with complex rules and regulations. Fintech moves at such a fast pace that it sometimes leaves the rulebook in the dust.
Fintech companies need to tread carefully through these legal hurdles to stay on the right side of the law while still being pioneers.
What's So Great About Fintech
Fintech outshines traditional banks in so many ways:
- Convenience: Fintech is right there in your pocket, on your phone or laptop, anytime, anywhere.
- Personalization: It's like having your own financial guru, serving up tailor-made financial solutions.
- Speed: Fintech is all about getting things done pronto, no waiting around.
- Cost Savings: Fintech often means fewer fees and lower costs.
The Fintech Dream Team
The fintech world has a few players:
- Fintech Companies: These are the innovators creating fintech solutions.
- Traditional Financial Institutions: Banks and the old guard, jumping on the fintech bandwagon.
- Regulators: These folks keep an eye on fintech and make sure everyone plays by the rules.
- Consumers: That's you and me, folks, using fintech services to make our lives easier.
Why Fintech Can Be Tricky?
Fintech brings a few hiccups to the party, like cybersecurity risks, data privacy worries, and the challenge of following the rules. It's a tricky dance to keep the innovation flowing while making sure your finances are as safe as a vault.
Read also:
Read also:
Why Fintech Keeps Banks Up at Night?
Fintech poses a formidable challenge to traditional banks.
By providing financial services that are not only more accessible but also exceptionally efficient and tailored to the needs of the digital-native generation, fintech innovations are gradually eroding the long-standing dominance of traditional banking institutions.
This shift towards fintech signifies a significant change in the financial landscape, with banks needing to adapt and innovate to stay competitive.
The Next Big Thing in Fintech
The next big thing in fintech? Think more AI, more automation. We're talking AI-driven financial helpers, smarter fraud detection, and predictions that can rival Nostradamus.
How Fintech Will Change Banking
Fintech is giving banking a facelift. It's all about supercharging your banking experience with personalized financial solutions and slicker processes.
The line between banking and everything else is getting blurry, and that's a good thing.
How Banks Are Embracing Fintech
Traditional banks are like, We can be cool too They're jumping on the fintech bandwagon, embracing it for online banking, mobile apps, payments, risk assessment, and ensuring you feel valued as their cherished customer.
The Keys to Fintech Success
User experience and security are the golden tickets to fintech success. It's all about giving you a smooth, easy, and safe platform that you can trust with your financial secrets.
The Fintech Toolbox
Fintech is powered by tools and tech, like blockchain platforms, AI wizardry, secure payment systems, data analytics, and the magic that makes your mobile apps tick.
What Fintech Companies Want
Fintech companies are always on the lookout for the next big talent in software, data science, cybersecurity, and financial know-how. Innovation and flexibility are the stars of the show in the world of fintech.
A Slice of Fintech Life
You want an example of fintech? How about PayPal, the superhero of mobile payments? It changed the way we send and receive money, all while keeping your info safe and sound on digital platforms.
In a Nutshell: So there you have it. Fintech Financial Services are like the cool cats of the financial world, mixing tech with money in all the right ways.
With embedded finance revving up and financial software getting snazzier, we're on the brink of something big.
The dance between finance and tech is propelling us forward, breaking down old barriers and opening new doors.
Whether it's the simplicity of mobile banking, the wisdom of robo-advisors, or financial services that follow you everywhere, fintech is making money management a breeze.
In this era of non-stop innovation, staying in
the loop with the latest financial technology news and embracing
collaborations between traditional banks and fintech startups is the key to
thriving in the ever-changing financial landscape. | Banking & Finance |
It would be political suicide for Rishi Sunak to scrap the pensions triple lock, but the frustrations with it are part of how we tax income, rather than wealth, writes Will Cooling
The infamous pensions triple lock is once again in Westminster’s sights, with both the Prime Minister and Labour frontbenchers flailing over whether it will make it to their respective election manifestos. In part, this angst over the policy first introduced by Iain Duncan Smith in 2010 is because it may well lead to pensions rising by 8.5 per cent next year.
The triple lock is unusual, maybe even unique, in that it is a policy that the Tories introduced as they came into office and have largely stayed the course on. Today, the 2.5 per cent that the triple lock stipulates as the minimum annual increase, would be a devastating cut to the value of the old age pension in real terms, but several times during the 2010s it was a meaningful rise compared to the average increase in earnings or wages. At a time when inflation was low due to the aftermath of the financial crisis, the state was able to use its fiscal power to meaningfully increase the purchasing power of the poorest pensioners. If only other policy areas, like education, had benefited from ministers seizing a rare opportunity of low inflation and low interest rates.
Obviously, the return of high inflation means that it would be prohibitively expensive for pension rises to stay ahead of increases in wages and prices. And indeed, that recognition is built into the triple lock, with next year’s increase merely keeping pace with wages. Yes, there’s a technical argument about whether exceptional bonuses NHS workers received should be included in the wage statistics, but ultimately a statistical quirk that may cost the government an additional £1bn is nothing against a pensions budget that stands at more than £120bn.
Whether it is the state or working families, old people need someone to look after them. No middle-aged or young person is going to thank the government for leaving their parents or grandparents with no money for life’s essentials. And if the state pension once again starts losing value over time as it did throughout the eighties and nineties, then it will actually be the young who will stand to lose out the most. After all, it will be them being forced to put more aside for their retirement out of fear that they cannot rely on the state pension as much as today’s pensioners can. Especially as they are less likely to have generous “defined benefit” pensions that the middle-aged were allowed to enter before the private pensions system started to implode.
It makes no sense to promise that the state will look after people in their old age, only to then refuse to allocate enough money to provide everyone with a pension of sufficient worth. If politicians really feel we can’t afford such a universal benefit due to changing demographics, then they should have the honesty to say so, and suggest what means-tested safety net they want to put in its place. Of course, they won’t do that, because unpicking a century-old promise to allow all people to ultimately retire in dignity and comfort, would be political suicide.
In that case, rather than constantly talking at conferences about difficult decisions, politicians should start making some. If we need to raise more money to fund the triple lock, then increase taxes in a way that spreads the burden fairly.
Given the wider changes to the state pension, the continued existence of personal national insurance contributions now makes even less sense than before. Folding such contributions into income tax would reduce the burden placed on lower income workers and close the loophole where pensioners pay less tax on the income they earn than other people. Introducing a national property tax which was more tightly linked to a house’s value today would again reduce the burden placed on poorer Britons while taxing wealth more heavily. If such a tax was set at 1 per cent, it could raise more than £50bn a year, even after accounting for scrapping the current council tax system. Such tax bills may even persuade elderly empty nesters to downsize, freeing up much needed houses for young families.
One can sympathise with the frustration many feel as old age pensions have been better protected than other benefits or services. But the solution is not to trash the one thing that has improved under thirteen wasted years of Tory government. It is to insist that politicians take the difficult decisions to provide the public with the services and benefits they need, even if that means taxes have to go up. | United Kingdom Business & Economics |
I’m sure you’ve read, by now, about the Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase. Since they were filed last week, many Objective Journalists have covered them. I would like to get Subjective because I think there’s some interesting politicking going on here: a regulatory land grab for cryptocurrency. Directly or indirectly, these lawsuits will determine how it’s parceled out.
Any reasonably close observation of crypto suggests a lot of petty infighting about which government agencies are in charge of it. This is largely based on a simple question: are crypto tokens securities, commodities, or some secret third thing?
So far, the loudest rumbles have come from the SEC — which, unsurprisingly, considers most of them securities. The agency has already plonked some cards on the table with cases like the insider trading claims at Coinbase. With these two new lawsuits, it’s putting down the rest of them and reaching for the pot.
Because I love this sort of thing, I’ve put together my notes to what I think is happening:
- The Binance case is the most fun. It also suggests there might be a criminal case on the way.
- The Coinbase case is probably more important for setting regulatory policy.
- These two big cases threaten to upend just about everything in cryptocurrency.
“It seems they moved from nudging to a pretty swift kick, or, you might say, a one-two punch.”
These cases are the natural outcome of statements the SEC has been making for years about tokens, according to Joshua Klayman, who leads the law firm Linklaters’ digital asset practice. “I see this as a massive push, a very unsubtle move by the chairman Gensler and the SEC,” Klayman said in an interview with CoinDesk. “They’ve been trying to nudge the industry for a long time to change its practices, and now it seems they moved from nudging to a pretty swift kick, or, you might say, a one-two punch.”
The timing here is significant, and it is the first of several small but important things that are somewhat outside the scope of the actual text of the lawsuits. The crypto industry is correct to say that there are politics afoot.
The Friday before Binance dropped, Rep. Patrick McHenry and Rep. Glenn Thompson introduced a bill for regulating digital assets. The plan would determine which tokens are securities and which are commodities and give tokens that started as securities a path for becoming commodities if the blockchain network is sufficiently decentralized. That puts a lot of power in the hands of the Commodity Futures Trading Commission. That’s on top of its existing cases against FTX and Binance that mostly involve derivatives, which the agency plainly already regulates.
The CFTC has been the preferred regulator for certain segments of the crypto community, including the disgraced CEO of FTX, Sam Bankman-Fried. He even hired two former CFTC commissioners and met with current CFTC Chair Rostin Behnam several times. Bankman-Fried’s fall from grace was arguably damaging both for the legislation he supported and the CFTC itself.
We are seeing a fight about who gets to play sheriff in the crypto world
Bankman-Fried reportedly also met with SEC Chair Gary Gensler, and Gensler was supposedly less impressed — he’s said he told FTX representatives to “take their slide deck down” on their second presentation slide. But there’s still plenty of embarrassment to go around. There are persistent questions about how many times Gensler met with Bankman-Fried. Additionally, McHenry has been asking questions about Gensler’s timing in the Bankman-Fried arrest and generally pestering him about his approach to cryptocurrency.
Regulatory agencies, like everyone else in DC, ride the waves of politics. So there is one other significant bit of timing: the SEC’s Coinbase suit became public the same day the company’s chief legal officer, Paul Grewal, was scheduled to testify before House Committee on Agriculture about digital markets. I don’t know if the House Republicans got wind of the SEC cases or if the SEC filed its business as quickly as possible in response to these events. However it happened, I think it’s unlikely to be a coincidence.
“These are two of the biggest enforcement actions in the space ever,” says Josh White, a former financial economist for the SEC who now teaches at Vanderbilt University. “And they’re sandwiched between the bill and the testimony.”
There’s another reason to see all this as infighting: it’s business as usual. The Secret Service handles anti-counterfeiting efforts around the US dollar, for instance, because an entrepreneurial individual named William P. Wood established an anti-counterfeiting force without Congressional approval while running the Old Capitol Prison. Wood was then sworn in as the head of the Secret Service, formalizing the job he’d already been doing.
The cases themselves are about the rules governing cryptocurrency exchanges. But outside of the cases, we are seeing a fight about who gets to play sheriff in the crypto world. And the cowboys aren’t just in the cryptocurrency business; some of them have law degrees and work for the US government.
Binance
In politics, perception can create reality. I suspect that’s why Binance’s lawsuit was filed first, despite being more complicated than the Coinbase case. It sets the tone: “We are operating as a fking unlicensed securities exchange in the USA bro.” That’s Binance’s chief compliance officer, Samuel Lim. In writing.
“We are operating as a fking unlicensed securities exchange in the USA bro.”
It does suggest an industry knowingly operating outside the bounds of law, doesn’t it? Other Lim bangers from the earlier CFTC case against Binance include “Like come on. They are here for crime” and “On the surface we cannot be seen to have US users but in reality we should get them through other creative means.” The CFTC case charges Binance, Changpeng Zhao, and Lim with operating an unlicensed derivatives exchange, but it also hints at possible criminal conduct
Similarly, the SEC’s Binance complaint reads like a possible criminal case with some securities violations stapled to it. Some things are familiar from the CFTC case — steering big US customers to use VPNs so they can use Binance, for instance — and some from reporting from Forbes. Binance.US was effectively a front for “the mothership” — as Catherine Coley (aka BAM CEO A) put it.
There are bonus allegations of improper commingling of customer money, a bizarre purchase of an $11 million yacht, and wash trading — which, in the case of one crypto asset, allegedly accounted for 99 percent of the trading volume in the first hour it was available.
There is also an org chart — never a good sign. The org chart suggests that Zhao, CEO of Binance, directly controls several entities that do business with each other. Two of those, Sigma Chain and Merit Peak, were allegedly used to mix customer funds and engage in “manipulative trading.” Sigma Chain allegedly engaged in market manipulation. These allegations are unavoidably FTX-like.
The SEC case strongly suggests these people are pirates
One reason the SEC may have gotten the dirt for this org chart is that Binance made transactions at two banks now controlled by the Feds. Apparently, Binance ran something like $70 billion (!) through Silvergate and Signature Bank. Some of that money was funneled through to an entity controlled by Paxos, which issued BUSD, a stablecoin that the SEC alleges is also a security. If I were Paxos’ lawyers, I’d be limbering up.
Actually, let’s pause on the BUSD thing. The entire point of a stablecoin is that its price doesn’t change. It’s a token that stands in for the dollar. But in the complaint, the SEC claims that buying BUSD is investing “in a common enterprise with each other and with Binance — the BUSD ecosystem through which BUSD holders and Binance could and did earn returns through various forms of capital deployment.” There were some alleged profit-generating schemes associated with BUSD, which Protos deals with in detail — but if these coins are classed as securities, it does make stablecoins seem a little riskier than they used to be, doesn’t it?
The SEC case strongly suggests these people are pirates, and the SEC is more than justified in cracking down. The agency even requested a temporary restraining order that would pointedly let Binance.US customers withdraw their money but ban Zhao from touching it — combined with the yacht thing, it implies Zhao might attempt a more competent version of Do Kwon’s recent adventures as a fugitive. In response, Binance.US has said it will become a crypto-only exchange.
The judge in the case, Amy Berman Jackson, urged the SEC and Binance to make a deal instead of issuing the temporary restraining order. Some of the confusion about whether crypto counted as a security or not spilled over into the court, where Jackson asked the Binance.US attorney if BNB was a commodity. According to CoinDesk, the lawyer replied, “It is a crypto asset.”
One does not typically stop piracy with lawsuits
One does not typically stop piracy with lawsuits. The CFTC and SEC’s civil cases form the clear outline of a criminal case. We also know that Binance has been in the crosshairs of the Justice Department for some time. Binance lawyers have gotten around with their plea deal discussions, Reuters reported last December. Binance is reportedly under investigation for money laundering and sanctions evasion. The CFTC case accuses Zhao of the kind of compliance failures that make money laundering possible.
Binance’s response doesn’t mention the more damning allegations directly, saying only, “All user assets on Binance and Binance affiliate platforms, including Binance.US, are safe and secure, and we will vigorously defend against any allegations to the contrary.” Instead, it’s responding as though it is a paragon of propriety. “Most recently, we have engaged in extensive good-faith discussions to reach a negotiated settlement to resolve their investigations,” the response begins. These people should go into comedy; their talents are wasted in finance.
“The SEC is certainly relishing in the Binance suit and the various comically damning quotes,” crypto lawyer Erich Dylus said in an email. He expects the DOJ will follow at some point.
I agree. At this point, the Justice Department looks incompetent if it does not pursue Binance, which is not something the Justice Department generally enjoys. Should a DOJ case drop — and at this point, it’s odd that it hasn’t — it would then take precedence over the CFTC and SEC proceedings.
The SEC may be happy to see Binance kicked to a criminal court. Binance and Coinbase are huge cases that would demand heavy department resources, points out Yesha Yadav, a law professor at Vanderbilt. Crypto is only a tiny sliver of the SEC’s oversight responsibilities. There’s also one more embarrassing detail: Binance alleges that SEC Chair Gensler offered to serve as an advisor to the company in 2019.
Coinbase
As a practical matter of using limited resources, I think the SEC can really only take one case here, and it’s Coinbase. Coinbase is absolutely going to fight; the suit’s an existential threat.
The SEC’s complaint against Coinbase is — for a crypto lawsuit — bloodless. There are no group chats called “wirefraud” or even any profanity. Imagine the lawyers in their horrible cubicles, sweating into their Brylcreem, as they lay out the case that yes, these tokens are securities, and yes, Coinbase listed them anyway.
“Coinbase spent serious resources and capital meeting with the SEC and even suggesting prospective guidance for their review, only to be ghosted.”
Coinbase has consistently argued that securities laws can’t apply to crypto because crypto didn’t exist when they were written. I’m not a lawyer, and I’m not equipped to evaluate the argument. However, Bloomberg columnist Matt Levine is. “A decent rule of thumb is that all cryptocurrency exchanges are doing crimes, and if you’re lucky your exchange is doing only process crimes,” he wrote in March. More recently, he added: “The view of the US Securities and Exchange Commission, at least, is that every crypto exchange in the US is illegal.” This case will put that view to the test.
The Coinbase perspective here is that they simply want to be good boys, and the mean old SEC won’t tell them how. Remember, Coinbase sued the SEC first, in what Grewel termed a “narrow action” meant to give the company regulatory clarity. That case is ongoing, and most recently, the SEC has replied by saying, “The Commission has not decided what action to take on Coinbase’s rulemaking petition.”
It goes on to say, “As explained in the Commission’s response, agencies regularly enforce existing, applicable law while simultaneously considering whether there are reasonable policy justifications for modifying those regulations going forward.”
Coinbase is more sympathetic than Binance. “Coinbase spent serious resources and capital meeting with the SEC and even suggesting prospective guidance for their review, only to be ghosted” and sued, said Dylus.
Coinbase can win outside court
Because Coinbase is a US public company, the SEC had to send a “no surprises” letter called a Wells notice that informs the target of an investigation that the SEC is thinking of bringing a suit. Coinbase’s response to the Wells notice is a preview of its defense. First of all, the SEC approved its disclosures when it went public and ought to be consistent For The Sake of Our Democracy And Upholding Our Trusted Institutions; second, Coinbase doesn’t list securities.
Coinbase’s position, as presented by its CEO Brian Armstrong, is that the SEC’s tone began to change last year — can’t think what might have led to that. But it’s maybe worth noticing that the SEC overshadowed what appears to be a coordinated action from 10 states that also allege Coinbase is selling unregistered securities. This more narrowly targets staking programs, but if I were an Ethereum booster, I’d be paying close attention; moving to proof-of-stake may be better for the environment, but does it shift the way that Ethereum gets regulated?
Also outside the bounds of the legal arguments is the person who is making the call. The SEC’s Coinbase case is being argued before Jennifer H. Rearden, who placed a hold on Voyager’s sale to Binance.US in March; Binance.US scuttled the deal shortly afterward. She is not the most sympathetic judge Coinbase could have drawn.
The SEC’s current stance appears to be that many, if not all, cryptocurrencies are securities. If that’s true, no new law needs to be made for it to win in court. It’s a little weird that the SEC didn’t come to this conclusion sometime sooner than now, but that’s not really my business.
Coinbase can win outside court. The SEC suit will probably take years. The political process is happening in parallel to the court cases, says Moish Peltz of the law firm Falcon, Rappaport & Berkman. While the Coinbase case drags on, Congress could pass a law that renders it irrelevant — which, I’d imagine, is the ideal outcome for most of the crypto industry. The CFTC seems to be crypto’s preferred regulatory agency in both the McHenry bill and a previous bipartisan bill, so I’d assume that future bills would make the same move.
Splash damage
The suits and players are big enough that there’s a lot of collateral damage already taking place. Crypto.com is quitting its institutional business. Whether we’ll see suits against, say, Gemini and Kraken remains an open question. Robinhood has stopped listing some tokens named in the suits.
If the SEC wins, a lot of cryptocurrencies are unlicensed securities. Molly White, the unavoidable sportscaster of crypto, noticed that between the Binance and Coinbase lawsuits, that’s 22 of the top 100 cryptocurrencies by market cap — though, of course, there are questions about how real that market cap actually is.
“It seems like the SEC is saying everything is a security.”
Naturally, if your token’s been deemed a security, you should expect yourself to be in the crosshairs. Does the SEC have the resources to go after all these tokens? Maybe not, but I expect the crypto lawyers to suddenly become busy all the same.
One strategy the industry has adopted is “utility tokens,” which are designed to do specific things in the ecosystem. One of the tokens named in the SEC case as a security, MANA, is the utility token for Decentraland, which is used to buy and sell virtual assets; it also lets holders vote on governance proposals. If so-called utility tokens are actually securities, the wider cryptocurrency universe — and particularly Web3 gaming — has a problem.
“Is a utility token even a thing?” asks Peltz. “It seems like the SEC is saying everything is a security.”
More immediately, there’s been general carnage in the crypto market. Bitcoin liquidity, already shakier following the collapse of two major crypto banks, has gotten worse. BNB token, one of the Schrodinger’s securities named in the Binance suit, is down about 20 percent in response to the suit.
As for the looming possibility of the DOJ case: Binance is the biggest player in crypto right now. If Zhao goes down, goes on the run, or is otherwise In Trouble, that’s trouble for the whole market!
As these two cases currently stand, I’m not sure this is enough to kill off the entire crypto industry. There are a lot of true believers out there, and as long as they keep clapping, Tinkerbell lives. But when I explain my job in any civilian setting (e.g., making friends in yoga class) in 2023, people seem to assume crypto is inherently shady — kind of like Napster. Not a good omen for the trajectory of Number. | Crypto Trading & Speculation |
Peter Thiel, the arch-capitalist fifty-four-year-old cofounder of PayPal, was throwing one-hundred-dollar bills from the main stage, trying to signify their unimportance. When members of the crowd rushed to grab them, Thiel appeared shocked. “I thought you guys were supposed to be Bitcoin maximalists!” Raging against the “finance gerontocracy”—which, of course, had helped to make him very rich—Thiel derided legendary investor Warren Buffett as the “sociopathic grandpa from Omaha.” (Tell us about your childhood, Peter). Also on the dais were luminaries like Jordan Peterson, the Canadian psychologist who found his true, and truly lucrative, calling as an alt-right provocateur who encouraged young men to clean their rooms.
In the hall backstage, we passed Tucker Carlson, deep in expository discourse to some trailing microphones and cameras. On the conference floor, picking up on the trend, Bitcoin influencer Max Keiser, a vocal supporter of Salvadoran president Nayib Bukele, tore up some dollar bills with another attendee—caught on smartphone video, of course. They immediately posted the video, cackling at their own daring, their ultimate, performative disregard for real money.
All these histrionics felt choreographed and banal. For me, the conference was less about experiencing loud, overwrought paeans to the glory of Bitcoin than studying some of the industry’s leading personalities in their seemingly candid moments (which admittedly could be rare). It was also about retail investors, the average folks who had committed their lives to this stuff. I wanted to understand what attracted people to the Bitcoin story.
But first, I wanted some merch. Across the sprawling Miami Beach Convention Center, the product and sales pitches ranged from free NFTs to getting in on the ground floor of the next ICO (“initial coin offering”) that seemed a lot like the last ICOs. A DAO (“decentralized autonomous organization”) promised an investment scheme to “democratize yachting.” Crypto mining machines sold for thousands of dollars each. There was a surprising amount of art, loosely defined. One painter was selling a knockoff of a Jeff Koons-style balloon Bitcoin dog fucking—doggystyle, naturally—another dog representing the US dollar. We passed Panties for Bitcoin, a father-son undergarments business that was mostly an exercise in enthusiastic branding. Bars sold overpriced drinks matched by concession stands that sold overpriced stadium food. A mechanical bull, booth babes, endless giveaways, all of it filmed and tweeted and Instagrammed from every angle. In front of a small crowd, I did some push-ups for the Lord and received a “Jesus for Bitcoin” T-shirt.
If you ignored the formal hysterics and instead talked to regular folks milling about the conference, Bitcoin Miami sometimes felt like just another trade show. Big and energetic, full of boozy salesmen talking about how Bitcoin had changed their lives, with sponsorships adorning every surface, it was a Potemkin village of American consumerism and gambling addiction masquerading, in typically humble crypto fashion, as the future of the entire financial system. Eight-dollar Budweisers were offered for sale underneath the fifty-foot-tall Bitcoin volcano that burped out steam with all the grandeur of a high school science fair project. The volcano was meant to celebrate the issuance of El Salvador’s Bitcoin Bonds and tee up President Nayib Bukele’s keynote address. Sadly for the attendees, on the first day of the conference, Bukele canceled his trip to the United States to deal with the growing unrest in his country.
At the conference, the featured speaker was in the wind, but the featured volcano still spewed smoke and the bar remained well-stocked. I ordered a Budweiser and asked if I could pay in Bitcoin. Unfortunately, their Bitcoin-into-real-money machine was down, but they accepted my American dollars that conference notables seemed eager to rip up in protest. Maybe TradFi still has its uses.
Outside the convention center, all eyes were drawn to an imposing sculpture of a swaggering creature known as the Bitcoin Bull, an homage to the Wall Street original. Fashioned from thick glossy plates of material that seemed like an unholy amalgam of metal and plastic, this creature was no joke. Replete with laser eyes and a fierce stare, the bull was slick: a gleaming, furious testament to capitalist America’s macho brand of innovation. “In Miami we have big balls,” said Francis Suarez, Miami’s Bitcoin bro mayor, who has toyed with the idea of abolishing taxes and funding the city through a nearly worthless token known as MiamiCoin.
There was just one problem: Contra Suarez, the bull did not have big balls. Yes, the ferocious Bitcoin Bull was apparently of the castrated variety. I gently asked a few folks posing for pictures beside him if they had ever heard of incels. The confused responses were reassuring.
The local faithful, while zealous, were peaceful. No one yelled at me at the Bitcoin Conference or denounced me as a nonbeliever. Some people overflowed with solicitous generosity—there was at least one strip club invitation that I believe wasn’t a covert marketing stunt. The lack of open conflict was almost a letdown—and an indicator of my own latent narcissism, perhaps. Everyone was just excited to talk to some guy from TV that had cameras following him around.
I can’t say that the conversations were always coherent or that my interlocutors and I existed on the same metaphysical plane, but I learned some things about what it meant to devote one’s life to Bitcoin. After talking to folks such as Mear One—an artist and former Occupy Wall Street participant whose signature oil painting, apparently well known among crypto heads, envisioned a cabal of Jewish bankers against the ascendant righteous forces of Bitcoin—it was clear I needed to broaden my view of what constituted the “community.”
There are many different ways one could define the crypto community, but the cynic in me would say there were none, not really. The majority of the people in Miami seemed only loosely tied to one another through commerce. They had few other bonds to speak of besides a utopian vision of financial freedom. To me, they were a projection of the timeless American fantasy: getting rich for free as quickly as possible. They flew to Miami to perform the rituals of multi-level marketing-style salesmanship and gladhanding. Also, there were parties.
The physical and symbolic centerpiece of the conference—the Bitcoin volcano—was meant to represent the issuance of El Salvador’s Bitcoin Bond. The idea was that the Bitcoin true believers would invest in bonds that would finance the mining of Bitcoin by harnessing geothermal energy from a volcano (Volcán de Conchagua) on the eastern edge of the country. A gleaming Bitcoin City would be built, along with another international airport to service the new metropolis. Nayib Bukele, the marketing-pro-turned-crypto-bro president of the small Central American country, had announced the bond scheme in November 2021 alongside slick digital renderings of what Bitcoin City might one day look like. There was a lot of gold. Bukele, a devotee of Twitter who had more than a little in common with Trump, seemed to share the former US president’s Gaddafi-esque aesthetic.
Bukele clearly tried to time the volcano bond’s issuance to coincide with the conference in Miami for maximum publicity value, but unfortunately, by the time the conference was actually held only a few months later, the domestic situation in El Salvador had deteriorated significantly. Gang violence was on the rise—a result of a breakdown in a secret agreement between the government and the major gangs—and Bukele declared martial law. The bond issuance seemed to be indefinitely postponed. Bukele bailed as the conference’s headliner and recast himself as a field marshal leading a war against gangs.
Despite their political figurehead being suddenly absent, the conference attendees appeared to pay no mind. The other speakers—Thiel, Peterson, Kevin O’Leary of Shark Tank fame, NFL quarterback Aaron Rodgers, and tennis star Serena Williams, among others—filled the Bukele void and issued the requisite bits of crypto enthusiasm. O’Leary was particularly bullish, claiming that as soon as regulatory clarity arrived, crypto would explode again: “The spigots of capital are going to flood into this sector, like you’ve never seen. So for those of us that can invest in it now—you’re getting ahead of what’s going to be a huge wave of interest when policy occurs.”
We saw many crypto bros unironically sporting the black El Salvador Bitcoin Bond T-shirts that had apparently been printed prior to Bukele’s cancellation and distributed widely. Like the pre-printed shirts of the losing World Series team, they found their way to a willing host who was unconcerned with their accuracy. The Bitcoin bros didn’t care—they hadn’t been to El Salvador. It was free merch and it represented a cause that, at least in theory, they believed in.
For the people of El Salvador, the consequences of Bitcoin adoption were far more serious. At the conference, we connected with two exiled Salvadorans in Miami: Mario Gomez and Carmen Valeria Escobar. Mario, thirty-six, was a critic of Bukele’s Bitcoin policy. He had been arrested on September 1, 2021, just days before the Bitcoin law was to take effect. While driving his mother to work, he came upon a police barricade that seemed to have been set up just for him. The police confirmed his identity and hauled him down to a local station, where they separated him from his mother and placed him in an interrogation room. When he asked why he was being detained, Mario was told it involved an investigation into financial fraud. He never saw any documentation that this was in fact the case and he was never charged with any crime. Nonetheless, the police took his phones and tried to take his laptop from his mother, who was waiting outside the station. Thankfully, Carmen, a young reporter and friend of Mario’s who had been alerted to his arrest, interceded and prevented the police from confiscating it. Mario was eventually released, but a question remained: Why had he been arrested in the first place?
The day before, while watching a government presentation about the new Chivo Wallet system, Mario noticed something odd. There was a QR code on one of the slides in the deck, and when you scanned it, it took you to an address that had previously been used to scam people. In 2020, approximately 130 high-profile Twitter accounts had been compromised and used to promote a Bitcoin scam. The scammers only managed to make off with $121,000, but the case had briefly attracted global attention. To Mario, this was alarming. The government was using a scam wallet address in the promotional materials for the new Bitcoin monetary system they had developed in secrecy and were about to deploy. Maybe it was the work of a technical novice who googled “crypto wallet QR code” and used the first result that came up, or perhaps it was some scam by a contractor. Either way, it was a disaster, and Mario alerted his fellow Salvadorans via Twitter to the ridiculousness of the situation. The next day Mario was arrested.
Mario knew his stuff. A longtime technologist working on civic-minded projects, he had done stints with organizations like the United Nations World Food Programme. For him, the rush to implement the Bitcoin as legal tender wasn’t an indication of a groundbreaking, innovative government policy, but rather smelled of old-fashioned corruption. While it was unclear exactly what Bukele and his cronies were up to, both Mario and Carmen speculated that it could be a way to facilitate money laundering associated with the drug trade while enriching a close circle of insiders. (Large amounts of South American cocaine flow north through El Salvador.)
Even if none of that were true, for Mario, Bitcoin was bad tech and bad economics. I asked him what he thought of Bitcoin advocates using El Salvador’s adoption as an example of progress: “You cannot separate the people from the technology. What you are doing is…enabling a government to shut down anyone they don’t like.”
Mario was never charged with any crime, but he still feared for his safety. On the day the Bitcoin law went into effect, September 7, 2021, he fled the country, escaping first over land and then by plane to the United States, where he is now seeking asylum. He had to leave his sister, his mother, and his entire extended family behind. He told his sister that she should be prepared not to see him for a long time.
He said all this with a sense of civic principle, with grace under severe mental pressure, and with a remarkable amount of good humor. Mario had a joyful, almost childlike, high-pitched laugh. He was hard not to admire and harder not to like. On the conference floor we had watched as Salvadoran Bitcoin enthusiasts walked up to him and asked, with defiance, Why are you here? Some of the approaches were more than a bit threatening. He took it all in stride, sometimes engaging his antagonists in long, stem-winding conversations, punctuated by bursts of chest-shaking laughter. This, I thought, was the truth about Bitcoin and El Salvador: It had made Mario, a dignified, ethically engaged person worried about his people, into the world’s first Bitcoin refugee.
Carmen was soon to follow. Her journalism had already angered the establishment enough that her mother was fired from a government job. She had recently secured a position with a foreign news agency, which potentially offered some protection, and began spending time in Mexico City. It might be past time to move permanently. The week we were together in Miami, one of Carmen’s friends became the subject of a local social media campaign that tarred him as the brother of a gang member—a quick path to arrest under Bukele’s militarized crackdown. Except Carmen’s friend didn’t have a brother. The truth didn’t matter. The risk was too great. While we stood outside the press room in which Bitcoin moguls extolled El Salvador’s burgeoning economic utopia, Carmen’s friend called to tell her he was leaving for Mexico.
Bitcoin hadn’t set Mario and Carmen free, and I doubted, no matter the surrounding conditions, that it could liberate any of the rest of us. Still, as much as I trusted their stories—and as much as I had been moved by their pathos in the face of all the profoundly stupid Bitcoin hucksterism surrounding us in Miami—I had to see it for myself.
It was time to go to El Salvador.
From the book Easy Money: Cryptocurrency, Casino Capitalism, and the Golden Age of Fraud by Ben McKenzie with Jacob Silverman published by Abrams Press, Available July 18. Text copyright © 2023 Benjamin Schenkkan | Crypto Trading & Speculation |
Stock Market Live: Sensex, Nifty To Open For Special Muhurat Trading Session
Live updates on India's equity markets on Muhurat trading.
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U.S. Markets
Dow Jones up 1.15% at 34,283.10
Dow Jones Futures up 1.16% at 34,338
S&P 500 up 1.56% at 4,415.24
S&P 500 Futures up 1.56% at 4,430.5
Nasdaq up 2.05% at 13,798.11
Nasdaq Futures up 2.23% at 15,596.25
Global Cues
U.S. Dollar Index at 105.9
U.S. 10-year bond yield at 4.65%
Brent crude up 1.77% at $81.43 per barrel
Nymex crude up 1.89% at $77.17 per barrel
GIFT Nifty was unchanged at 19,585 as of 4:37 p.m.
Bitcoin was up 0.33% at $37,111.4
Indian Markets To Open For A Special One-Hour Trading Session
India's benchmark stock indices will trade for a one-hour special Muhurat trading session on the occasion of Diwali on Sunday to mark Smvat 2080.
The symbolic trading session will be held between 6 p.m. and 7.15 p.m. This includes a 15-minute pre-market session, according to NSE and BSE circulars.
The session also marks the beginning of a new Samvat—the Hindu calendar year that starts on Diwali—and it is believed that trading during the 'muhurat' or auspicious hour brings prosperity and financial growth for the stakeholders.
The headline indices advanced after falling through Friday—the last session of Samvat 2079—following the weakness in global peers. Both the Nifty and Sensex returned over 9% in Samvat 2079. On a weekly basis, the headline indices advanced for the second time.
The rupee hit a fresh record low against the U.S. dollar on Friday, and the 10-year government bond yield rose.
Looking Back At Samvat 2079
Nifty rose 10.30% in Samvat 2079, whereas Sensex scaled 9.26%. Nifty Realty and Nifty Auto were the top gainers in the Samvat gone by. Nifty Realty advanced 54.68%, and Nifty Auto gained 27.99%.
"In Samvat 2080, financials are likely to do well, supported by attractive valuations and impressive growth," said VK Vijayakumar, chief investment strategist at Geojit Financial Service.
Sustained FII selling in financials, which is impacting the sector, will be only temporary. For investors with a two-year time horizon, the leading private banks and three or four PSU banks are good buys with return potential, he said.
The Nifty Smallcap 250 Index gained 35.07%, whereas the Nifty Midcap 150 was up 30.27% in Samvat 2079. "The mid- and small-cap rally is partly driven by retail exuberance, and since the valuations in this broader market are high, investors have to exercise some caution," said Vijayakumar. | India Business & Economics |
The U.S. government's borrowing needs will decline slightly in the final three months of 2023 from the prior quarter, a potentially important development during a turbulent time for the global bond market.
In a closely watched announcement Monday afternoon, the Treasury Department said it will be looking to borrow $776 billion, which is below the $1.01 trillion in privately held marketable debt the department borrowed in the July-through-September period, the highest ever for that particular quarter.
The borrowing level appeared to be somewhat below Wall Street expectations — strategists at JPMorgan Chase said they expected the announcement to be around $800 billion.
When the Treasury announced in July its heightened borrowing needs, it set off a frenzy in the bond market that saw yields hit their highest levels since 2007, the early days of what would become a global financial crisis.
Stocks lost some of their gains but still remained strongly positive after the announcement. Treasury yields were mostly higher.
Markets have been concerned about the impact of higher yields, and the government's borrowing need, as well as restrictive Federal Reserve policy, have exacerbated those concerns.
Officials attributed the lower borrowing needs to higher receipts, which were offset somewhat by greater expenses.
Treasury said it expects to borrow $816 billion in the January-through-March period, which is the government's fiscal second quarter. That number appeared above Wall Street estimates, as JPMorgan said it was looking for $698 billion. The record for quarterly borrowing happened in the April-through-June stretch in 2020, when borrowing hit nearly $2.8 trillion during the early Covid days.
The department said it expects to maintain a $750 billion cash balance for both quarters.
Markets next will be watching a Wednesday refunding announcement from Treasury, which will detail the size of auctions, the duration being issued and their timing. Later that day, the Federal Reserve will conclude its two-day policy meeting, with markets overwhelmingly expecting the central bank to hold interest rates steady.
The Monday announcement comes 10 days after the government said the fiscal 2023 budget deficit would be about $1.7 trillion. That was an increase of some $320 billion from the prior year.
An accompanying economic summary indicated that growth has remained strong while inflation has cooled, even though it is well above the Federal Reserve's target. However, the statement indicated that growth is likely to decelerate sharply, falling to 0.7% in the fourth quarter and just 1% for all of 2024. | Bonds Trading & Speculation |
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Consumers are scouring the internet for online deals as they begin to cap off the five-day post-Thanksgiving shopping bonanza with Cyber Monday.
Even though e-commerce is now part and parcel of our everyday lives and much of the holiday shopping season, Cyber Monday –- a term coined back in 2005 by the National Retail Federation –- continues to be the biggest online shopping day of the year, thanks to the deals and the hype the industry has created to fuel it.
READ MORE: Retailers step up Black Friday deals to with consumers on tighter budgets in mind
Adobe Analytics, which tracks online shopping, expects consumers to spend between $12.0 billion and $12.4 billion on Monday, making it the biggest online shopping day of all time.
For several major retailers, the “Cyber Monday” sale is a days-long event that begins over the weekend. Amazon’s, for example, kicked off on Saturday and runs through Monday. Target’s two-day event began overnight on Sunday, while Arkansas-based Walmart kicked off its most recent discounts Sunday evening.
Consumer spending for Cyber Week — the five major shopping days between Thanksgiving and Cyber Monday — provides a strong indication on how much shoppers are willing to spend during the holiday season.
Shoppers have been resilient this year in the face of stubbornly high inflation, which recently reached its lowest point in more than two years yet remains painfully apparent in areas like auto and health insurance and some groceries, like beef and bread.
Economists, meanwhile, have cautioned that type of spending is likely to wane in the coming months.
Consumers are relying on savings to fuel their shopping and are facing more pressure from credit card debt, which has been on the rise along with delinquencies. They’ve also been embracing “Buy Now Pay Later” payment plans, which allow shoppers to make payments over time without – typically – charging interest.
The National Retail Federation expects holiday shoppers to spend more this year than last year. But the pace of spending will slow, it said, growing 3% to 4% compared to 5.4% in 2022.
A clear sense of consumer spending won’t emerge until the government releases sales data for the holiday season, but preliminary data shows some good signs for the retail industry.
According to Adobe, shoppers spent a record $9.8 billion online Friday — marking a 7.5% jump from last year. Meanwhile, Salesforce, which also tracks online shopping, estimated that Black Friday online sales totaled $16.4 billion in the U.S. and $70.9 billion around the world. And Mastercard SpendingPulse, which tracks in-person and online spending across all payment forms, reported that overall Black Friday sales excluding automotive rose 2.5% from a year ago — a smaller but still notable jump compared to 2022’s double-digit growth.
READ MORE: Why economists say falling inflation isn’t enough to relieve stress about the U.S. economy
According to the firm, online sales rose 8.5%, while in-store purchases were up just 1.1%. Those numbers are not adjusted for inflation, which means that real sales in-stores could have dipped due to high prices.
Other data showed Black Friday saw some increases in store traffic — with large crowds in stores nationwide feeling more similar to pre-pandemic days.
RetailNext, which measures real-time foot traffic in stores, reported that store traffic rose 2.1% on Friday. Sensormatic Solutions, which also tracks store traffic, saw a bigger increase — reporting a 4.6% jump in shopper visits on Black Friday compared to a year ago. That also marks a turnaround from an average decline in store traffic seen throughout 2023 to date, Sensormatic said.
Grant Gustafson, head of retail consulting and analytics at Sensormatic, said that this marked the most significant Black Friday increase that his organization has seen in recent memory.
“This is a really good barometer of what to expect for the remainder of the holiday season,” Gustafson said. “The overall trend that we saw in traffic is a really positive sign for not only physical retail, but also for e-comm retail — that the consumer is willing to spend when they find out (about significant sales).”
Electronics, clothing, toys and jewelry were among the categories that saw the most growth this Black Friday, per Adobe. Health and beauty products as well as sporting goods also saw significant sales increases.
Retailers began offering holiday deals in October this year, continuing a trend that started during the COVID-19 pandemic and has been resurrected multiple times due to supply chain clogs or inflation woes. But many consumers waited to buy until Black Friday.
The investment bank Jefferies, which tracked 54 retailers during Black Friday, said it found that a majority of them offered flat discounts compared to last year. Salesforce’s data still showed discount rates rose to 30% in the U.S. on Black Friday, enticing customers to buy.
“Consumers feeling economic pressure are taking control of their household finances and have been really diligent and patient,” said Rob Garf, vice president and general manager of Retail at Salesforce.
“They’re once again playing a game — and winning the game — of discount chicken, where they wait for retailers to discount to where they feel most comfortable,” he said. “And that’s what’s happening.”
According to Adobe’s stats, spending exceeded Black Friday during the weekend as consumers spent $10.3 billion to take advantage of discounts that have been higher than years past. On Thanksgiving Day, Adobe said shoppers had spent another $5.6 billion, up 5.5% compared to last year. That’s nearly double the amount consumers spent online in 2017, showing the continued shift to online shopping during the gift-giving season.
The resale industry, which has grown in recent years, is also expected to be a significant part of the holiday shopping season. Salesforce predicts 17% of holiday gifts this year will come from resale markets like Facebook Marketplace or ThreadUp, as well as brands like Canada Goose, Patagonia and Coach offering resale options on their sites for environmentally-conscious consumers or those who enjoy vintage offerings.
AP reporters Anne D’Innocenzio, Chris Rugaber and Wyatte Grantham-Philips contributed to this report.
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Oct 06 | Consumer & Retail |
(Bloomberg) -- Glencore Plc agreed to buy a majority stake in Teck Resources Ltd.’s coal business for $6.93 billion, ending a months-long saga and setting the stage for the commodity giant to spin off its own coal unit.
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Glencore will own 77%, and steelmakers Nippon Steel Corp and Posco will hold the remainder of the business, the companies said in statements Tuesday. The deal implies an enterprise value of $9 billion for Teck’s coal business.
The agreement will mark the end of a more than seven-month wrangle over the future of Teck. Glencore originally sought to buy the whole company in an unsolicited $23 billion bid, but was ultimately forced to scale back its ambitions to target the Canadian miner’s coal unit instead.
The deal will pave the way for Glencore to hive off its profitable but polluting thermal coal business and focus on mining metals such as copper, nickel and zinc. The company reiterated plans to split out the combined coal operations within about two years after the deal closes.
It will also finally end Teck’s struggle to find a solution for its mines that produce coking coal — used to make steel — after years of studying various options to separate it. The company had initially planned a complicated spin off that left it paying royalties to the remaining metals business, before Glencore disrupted the plan.
Teck, which will now have no exposure to the coal business, said it will use the proceeds to pay off debts, build new metal mines and return some to shareholders.
Nippon Steel, which currently owns 2.5% in some of Teck’s coal assets, will convert the ownership and put in additional cash to take a 20% stake in the business, while Posco will convert its ownership stake in Teck mines to a 3% holding in the business.
(Updates with additional details. An earlier version corrected a company name.)
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©2023 Bloomberg L.P. | Energy & Natural Resources |
Sri Lanka, Official Creditors Seal $5.9 Billion Debt Revamp Deal
Sri Lanka struck an in-principle deal to restructure debt with a committee of official creditors, including India and the Paris Club, a key step toward the nation’s efforts to recover from an unprecedented economic crisis.
Sri Lanka struck an initial deal with a group of key official creditors, including India and the Paris Club, to restructure about $5.9 billion of debt, a key step toward the nation’s efforts to recover from an unprecedented economic crisis.
The agreement covers a mix of long-term maturity extension and reduction in interest rate, the nation’s finance ministry said in a statement on its website Wednesday. The breakthrough is key for keeping its International Monetary Fund bailout on track, with the nation set for final approval of a $330 million payout in December.
“Sri Lanka now intends to focus its efforts on reaching comparable debt restructuring agreements with external commercial creditors, and in particular with its holders of international sovereign bonds,” the finance ministry said.
The nation’s dollar bonds have returned about 66% this year to become among the top performers in the world, as progress on debt restructuring and the IMF’s bailout spurred optimism over its fiscal recovery. Sri Lanka reached a tentative agreement with the Export-Import Bank of China to restructure $4.2 billion of debt last month and is in discussions on a proposal submitted by a group of dollar bondholders.
“We expect the bond complex to trade firm, the news is positive.” said Avanti Save, credit strategist at Barclays Plc. “The government is keen to keep inter-creditor comparability.”
Sri Lanka’s bonds due in 2030 were up 0.2 cents to about 50 cents on the dollar on Thursday after climbing 1.6 cents on Wednesday, according to indicative pricing compiled by Bloomberg.
The official creditors committee had delayed its proposal until it could review the Chinese deal. The deal also comes after the South Asian nation in September also restructured about $10 billion of local debt.
“The next steps will include finalizing similar agreements with our remaining official bilateral creditors, including Saudi Arabia, Pakistan, Kuwait and Iran, altogether representing a further $274 million of outstanding claims,” the finance ministry said.
Sri Lanka defaulted on its overseas debt for the first time in May last year as soaring food and oil prices during the pandemic depleted its dollar stockpile. While inflation has dramatically cooled and reserves have inched up to $3.6 billion in October, the nation remains dependent on the IMF to bolster its recovery after falling into a deep recession in 2022.
Central Bank Governor Nandalal Weerasinghe had said an official creditor proposal would pave the way for IMF board approval before the end of the year. China, which is Sri Lanka’s biggest bilateral lender, is an observer on the official creditors committee. | Asia Business & Economics |
Labour is exploring plans to bring back maintenance grants for poorer students by increasing the debt burden on wealthier graduates, The Telegraph can disclose.
Modelling being studied by the party envisages spending £2.3 billion a year to bring back grants – scrapped by David Cameron in 2016 – by levying higher student loan interest rates on higher earners. It is seen as an alternative to a system introduced last month, which increased the amount most graduates will pay over their lifetimes and which Labour says is “regressive”.
However, the prospect of a raid on middle-class graduates to fund the scheme is likely to be contentious.
In an interview with The Telegraph, Bridget Phillipson, the shadow education secretary, described the current system of funding university education as “the worst of all worlds”.
She explained: “It doesn’t deliver for universities in terms of what they need to provide courses. But alongside that, from September, that new system is going to become more regressive for lower middle earners. So it is not a sustainable system. We will have to confront that if we win the election.”
Ms Phillipson appeared to rule out an increase in the £9,250 tuition fees cap, saying: “That’s a very hard argument to make in the middle of a cost of living crisis.”
But she added: “The modelling I’ve seen demonstrates how even within the existing envelope, so without any additional borrowing or spending required, you could deliver a more progressive system that delivers month-on-month cuts in terms of the contribution required of graduates.”
It is understood Ms Phillipson was referring to modelling set out in a paper published in May by London Economics, the consultancy firm. It sets out two alternatives to the system announced by ministers last month.
Both of the proposals involve bringing back maintenance grants, funded by increased interest rates for wealthier graduates. The overall debt burden for some higher earners would double under one of the models.
From last month, students starting at universities are having to pay nine per cent of their income on earnings over £25,000, as the marginal repayment rate, over 40 years.
London Economics’ two models reintroduce real interest rates – interest rates linked to inflation – of up to three per cent for higher earners, which increase the overall debt burden at the same time as graduates make monthly payments based on the marginal rate.
They also involve “stepped repayment” so the level of the marginal rate would increase gradually from as little as two per cent to up to nine per cent, depending on how much individual graduates are earning, rather than imposing a nine per cent rate on all graduates being paid more than the £25,000 threshold.
The paper states: “The additional repayments would be concentrated amongst the highest-earning graduates, while low-income to middle-income graduates would repay less.”
Mr Cameron scrapped the maintenance grant which was paid to students from households earning under £25,000 in a move he said at the time allowed the Government to lift a cap on student numbers. The London Economics modelling puts the level of a reinstated grant at up to £4,009.
The disclosure comes as Jeremy Hunt, the Chancellor, separately claimed Labour was “clearly planning” to use “dangerous accounting tricks” that would allow it to borrow billions more pounds within fiscal rules.
The claim was based on Labour’s declaration that it would “take greater account of public sector assets as well as debt in fiscal policy”.
On Saturday, the Institute for Fiscal Studies warned of the risk of such a move being “taken as a signal that the government can afford to borrow more”. | United Kingdom Business & Economics |
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