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Many student loan borrowers may be surprised they have a different loan service provider when payment pause lifts this fall. That could complicate restarting their monthly payments.
Around 44% of federal student loan borrowers who begin repayment in October have a new loan service provider, according to the Consumer Financial Protection Bureau, after three loan service providers didn’t renew their contracts in 2021.
That means borrowers shouldn’t assume the provider they had before the pandemic is the same, and for those who had their accounts transferred to new loan servicers, they should anticipate some issues and possible mistakes as repayment starts.
"Communication leading up to the resumption of student loan repayments over the next several months will be key to ensuring borrowers are set up for success," Justin Draeger, CEO and president of the National Association of Student Financial Aid Administrators, said in a press release. "Transitioning millions of borrowers back into repayment cannot happen at the drop of the hat."
Who are the loan service providers
Navient, Pennsylvania Higher Education Assistance Agency (PHEAA), and Granite State Management and Resources are no longer loan service providers.
"The big changes were PHEAA, which serviced more than 9 million borrowers and Navient, which serviced 6-7 million borrowers," Mark Kantrowitz, author and student loan expert, told Yahoo Finance.
PHEAA had been accused of mismanagement of the Public Service Loan Forgiveness (PSLF) program and ended its servicing contract with the Education Department in 2021 amid lawsuits from state attorneys general in New York and Massachusetts.
Granite State Management and Resources announced it would not renew its contract two weeks after PHEAA.
Navient, formerly part of Sallie Mae, was accused of "systematically and illegally failing borrowers at every stage of repayment" by the Consumer Financial Protection Bureau. Lawsuits were filed before the servicer terminated its contract with the Education Department in 2021.
The current loan service providers for the Federal Student Aid (FSA) program are: Great Lakes Educational Loan Services, Edfinancial, MOHELA, Aidvantage, Nelnet, OSLA Servicing, ECSI, and the Default Resolution Group.
"Although Great Lakes is listed separately in the U.S. Department of Education's list of servicers, it is now owned by Nelnet," Kantrowitz said.
Common issues and mistakes
When a new loan service provider is added, the chance for mistakes increases as accounts are transferred.
"Common issues that occur with a change of servicer include errors in the loan balance and interest rate, incorrect payment status reported to credit bureaus, missing payments in the borrower's payment history, and changes in due dates," Kantrowitz said.
More concerning are instances of a lack of communication with borrowers about loan service provider changes.
"The transition itself can be disruptive and introduce unforeseen challenges including lost paperwork, communication breakdowns, and program confusion," Cody Hounanian, executive director at the Student Debt Crisis Center, told Yahoo Finance. "We are already seeing cracks in the system, whether it is MOHELA's failure to implement Public Service Loan Forgiveness reforms, erroneous communications sent to Nelnet's new accounts, and much more."
Recently, Democratic senators released a joint statement regarding concerns over the transition to new loan service providers, including the more than 7 million borrowers who have yet been assigned to a payment plan.
"Most of these borrowers have graduated or are otherwise no longer enrolled in a school, raising concerns that servicers may have trouble locating or contacting these borrowers ahead of the payment resumption," Sens. Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Sherrod Brown (D-Ohio), Edward Markey (D-Mass.), Bob Menendez (D-N.J.), and Chris Van Hollen (D-Md.) said in a press release.
Additionally, EdFinancial is transitioning to a new servicing platform. It is unclear how this will impact borrowers. The servicer said in its announcement that it will send several notices during the process of transferring loans.
"Please read each notice closely for instructions and additional details about the transition," the servicer said.
Steps borrowers can take
Borrowers should not assume their provider before the pandemic is the same.
The Education Department has begun sending notifications to borrowers about loan servicers, but borrowers who haven’t updated their accounts and contact information, may not receive them.
“For borrowers preparing for repayment and dealing with new loan servicers, it is crucial to stay informed by making sure their contact information is up to date at the Department of Education and their new student loan servicer,” Hounanian said. “Borrowers should also maintain their account records. These records can serve as evidence in case of any discrepancies or disputes.”
Update your account on FSA
You can find out who your servicer is by logging into StudentAid.gov. Make sure your contact information is correct and change it if it’s not. Once logged in, you can find out who your loan service provider is and what your expected monthly payment will be.
Consolidate commercially held FFEL loans
If you have commercially held FFEL, Perkins, and HEAL loans, you must consolidate to Direct Consolidation Loan to take advantage of the new Saving on a Valuable Education (SAVE) plan — a new income-driven repayment plan the Biden administration is rolling out — and the one-time payment adjustment by Dec. 31.
When you consolidate your loan, you may have a new loan service provider.
Enroll in an income-driven repayment plan
Enroll in an income-driven repayment plan to lower your monthly payment.
The Saving on a Valuable Education (SAVE) plan is the replacement for the REPAYE income-driven repayment plan and available to all borrowers regardless of income. Borrowers already in the REPAYE plan will automatically be transferred to SAVE.
Borrowers on other income-driven plans can apply to switch to SAVE later this summer. The Education Department will send out notices when the application is available.
Enrolling or switching an income-driven plan does not change your loan service provider.
Enroll in other loan forgiveness programs
Borrowers with a total and permanent disability are eligible for disability discharge. Typically, military veterans who have a 100% disability connected to military service or who have a serious disability and are receiving Social Security benefits qualify.
If you work in public service with federal, state, local government or certain nonprofit organizations, you are eligible to have your student debt forgiven after 10 years of payments through the Public Service Loan Forgiveness (PSLF) program.
Enrolling in PSLF may change your loan service provider.
Enroll in autopay
Once you know who your servicer is, enrolling in autopay can help lower your interest rate.
“Loan servicers provide a quarter of a percentage point interest rate reduction as an incentive to sign up for autopay, so you will also save money,” Kantrowitz said.
Even if you had autopay before the pandemic, you may need to sign up again because auto-debit likely won’t restart for most borrowers, according to the FSA.
“Borrowers may need to sign up again for autopay, since the autopay agreements don't necessarily transfer, even if their servicer didn't change, as it has been more than three years since the last payment was made through autopay,” Kantrowitz said.
Check your credit report
President Biden announced his “on-ramp” program that won't penalize borrowers for late, missed, or partial payments for 12 months.
Kantrowitz recommends that borrowers check their credit reports a few months after the change of a loan servicer to make sure there are no errors on their credit report.
Ronda is a personal finance senior reporter for Yahoo Finance and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda | Banking & Finance |
Story at a glance
- Bed Bath & Beyond filed for bankruptcy Sunday.
- The company said it anticipates closing all of its stores by June 30.
- There are some key dates if you want to avoid missing out on your coupons, gift registries, gift cards and more.
(NEXSTAR) – It’s time to use those Big Blue coupons that have been pinned to the fridge for weeks or forever lose them in the wake of Bed Bath & Beyond’s bankruptcy announcement.
The beleaguered home goods chain made the filing Sunday in U.S. District Court in New Jersey and said it will start an orderly wind down of its operations, while seeking a buyer for all or some of its businesses. In the bankruptcy filing, the retailer said it anticipates closing all of its stores by June 30.
For now, the company’s 360 Bed Bath & Beyond stores and its 120 Buy Buy Baby sites as well as its websites will remain open to serve customers.
However, there are some key dates if you want to avoid missing out on your coupons, gift registries, gift cards and more.
On Wednesday, April 26, stores will stop accepting coupons as they start to deeply discount items for closing sales which are slated to begin that day.
You’ll have a little more time to make use of gift cards, which will be honored through May 8, the company says.
Have credit from a previous return? Merchandise credits can be redeemed until May 15, which is also the cutoff date for Welcome Rewards.
Shoppers with Welcome Rewards+ store credit cards are still able to use them at this time. Bed Bath & Beyond didn’t say when that might change. You can also still use both the Bed Bath & Beyond and Buy Buy Baby apps for now.
If you have a gift registry with Bed Bath & Beyond or Buy Buy Baby, don’t panic, the company says. If you’re considering online shopping, Bed Bath & Beyond says all online orders of in-stock items that have yet to be received are expected to be fulfilled.
“Your registry data is safe and you can still view your registry at this time,” Bed Bath & Beyond said in a news release. “We expect to partner with an alternative platform where you will be able to transfer your data and complete your registry. We will provide details in the coming days.”
Meanwhile, Bed Bath & Beyond says all purchases made before April 26 will be given standard 30-day return windows, which will end May 24. Purchases made at store closing sales will be final.
Founded in 1971, Bed Bath & Beyond had for years enjoyed its status as a big box retailer that offered a vast selection of sheets, towels and gadgets unmatched by department store rivals. It was among the first to introduce shoppers to many of today’s household items like the air fryer or single-serve coffee maker, and its 15% to 20% coupons were ubiquitous.
But for the last decade or so, Bed Bath & Beyond struggled with weak sales, largely because of its messy assortments and lagging online strategy that made it hard to compete with the likes of Target and Walmart, both of which have spruced up their home departments with higher quality sheets and beddings. Meanwhile, online players like Wayfair have lured customers with affordable and trendy furniture and home décor.
The store closings will put thousands of jobs at risk. The company employed 14,000 workers, according to the court filing. That’s drastically down from the 32,000 as of February 2022.
“It’s the death of an icon. A lot of people have grown up with it,” said Neil Saunders, managing director of GlobalData Retail. “It’s an institution in retailing, but unfortunately being an institution doesn’t protect you from financial woes.”
The Associated Press contributed to this report.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Consumer & Retail |
In February, egg prices fell 6.7% compared to January, according to seasonally adjusted data released Tuesday by the Bureau of Labor Statistics. Groceries rose .3% in that time, while menu items got .6% more expensive, for overall food inflation of .4% in February.
It’s a welcome reversal: Egg prices have been astronomically high, fueled by short supply caused by the deadly avian flu, high input costs and egg producers’ increasing their own profits. Some of those constraints have eased, sending wholesale prices down earlier this year. In February, retail prices finally followed.
Still, eggs remain far more expensive than they were a year ago. In the 12 months through February, egg prices rose 55.4%.
And food prices still outpaced inflation overall on a year-over-year basis. Food prices rose 9.5%, compared with 6% for all items, for the year. The difference was even more pronounced when looking just at grocery prices, which rose 10.2%. Menu prices, which also factor into overall food inflation, rose 8.4% throughout the year.
Food prices have remained stubbornly high in part because the tools used by the federal government to try to fight overall inflation don’t work as well when it comes to food. Higher interest rates don’t prevent bad weather, diseases including avian flu, or international events like the war in Ukraine, which all go into food prices.
Plus, those factors have given food manufacturers cover to raise prices, and their own profits, in recent years, raising consumer prices.
What got more expensive in the grocery store this year
Though the rise in egg prices has been the most dramatic, plenty of other food items got more expensive over the past year.
Margarine shot up 39.8%, and butter spiked 20.7%. Flour got 19.8% more expensive, bread rose 15.8% and breakfast sausage got 9.7% pricier, with poultry rising 9.5%.
Ice cream got 13.9% more expensive, cheese jumped 9.4%, and milk rose 8.1%. Overall, fruits and vegetables rose 5.3%, with a 15.8% spike in frozen fruits and veggies. Some fresh vegetables got much more expensive, too: Potatoes rose by 13.5%, and lettuce went up 10.4%.
Beverages also got more expensive, with coffee up 11.4% and juice rising by 12.8%.
But it wasn’t all bad. Bacon dropped 5.9%, and beef and veal together fell 1.4% over the course of the year. Citrus fruits fell 1.2%.
Monthly food price changes
And the monthly data from February paints a rosier picture.
Month-over-month, lettuce got 4.7% cheaper, and butter fell by 1.9%. Oranges dropped 1.8%, and bacon got 1.5% less expensive. Breakfast cereal dropped 1.1%.
The meats, poultry, fish, and eggs index ticked down 0.1%, last month, marking the first decline since December 2021, according to the BLS.
Still, many items did get more expensive last month.
Together, frozen fruits and vegetables jumped 4.5% in the past month. Ham prices rose 3.3%, and pork chops grew 2.3%. Potatoes went up 2.8%, bananas rose 1.7%, and bread went up 1.2%. | Inflation |
Is certainty the new spending? When I talk to business, they often tell me that what they want, more than anything else, is certainty. And it isn’t hard to see why. These days government policy (and personnel) seems to change as often as the British weather.
The obsession with certainty can be overplayed. You rarely hear someone argue for sticking with a policy they think isn’t working for the sake of certainty. And entrepreneurs aren’t adverse to change, in fact, their frustration is often that long promised reforms, such as to the way energy markets work, are yet to be delivered.
Yet, investors’ expectations about the rate of corporation tax and how much of their investment they can deduct from it matter a lot. After all, businesses invest because they think they’ll make a decent enough return on their investment after tax.
In both cases, businesses have been on a roller coaster ride. When our new Foreign Secretary had his first stint in Government, the headline rate of corporation tax was 28%. Since then it’s fallen to 19% before shooting back up to 25%.
But, when you compare the headline rate to the base (i.e. what is and isn’t taxed by it), then it gets even more chaotic.
The Annual Investment Allowance, which incentivises SMEs to invest in new plants and machinery has jumped all over the place – changing no more than six times between 2010 and 2019. Each change was billed as temporary too.
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The Annual Investment Allowance was made somewhat obsolete when Rishi Sunak as Chancellor announced the Super Deduction, a whopping 130% tax deduction for all qualifying investments in plants and machinery. Again, this was temporary and set to expire when Corporation Tax went up to 25%. Yet, at the very last minute, the Chancellor announced a new temporary policy of full expensing, allowing firms to deduct the full cost of any new investment in productivity-enhancing equipment from their corporate tax bill just like any other day-to-day expense. It means that for every pound they invest in qualifying plants and machinery, they can cut their tax bill by 25p.
It is a powerful pro-growth policy. A number of studies from Britain, the US and further afield suggest that full expensing could boost investment by almost 20%. It is no surprise business groups and think tanks have repeatedly made it their top ask ahead of every Budget.
And thanks to the full expensing policy, Britain has one of the most investment friendly corporate tax codes in the world. We currently sit joint top, but before Sunak brought in the super-deduction, Britain ranked 34th out of 39 OECD countries for what’s known as ‘capital cost recovery’. In 2026 when full expensing expires, the UK’s will plummet down the international tax competitiveness rankings once again.
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A ‘use or lose it’ time limited sale might be a great way for DFS to shift some sofas, but it is a terrible way to get business to make multi-million pound investments. And we really need them to make those investments – every year, bar three, for the past three decades, Britain has been in the bottom 10% of the OECD for investment (new equipment and machinery).
The key problem with the DFS approach to tax policy is that businesses do not consider each investment in isolation. Rather they look at how they fit into investment cycles that last the best part of a decade. Businesses won’t respond to a temporary tax break at the start of an investment cycle if they aren’t confident that the follow-on investments in year five, six and seven will benefit from the same relief.
And businesses want to know that if a machine breaks down early, they can replace it without incurring a larger tax liability.
The news that Jeremy Hunt is planning to extend the £10bn tax reform to the end of the next Parliament should be welcomed then. Yet there’s no good reason why he shouldn’t go further and make it permanent.
The main blocker to making it permanent will be how it affects Hunt’s fiscal rule. Hunt has committed to debt as a share of GDP falling by the fifth year of the OBR forecast. It isn’t a bad rule in principle, yet it does bias against policies like full expensing which front load their costs.
As the Resolution Foundation points out, full expensing’s long run cost is likely to be much lower than the £10bn or so, the OBR score it. First, some of the increase comes from firms bringing forward future investments. Second, the annual cost will decline as yearly depreciation allowances exit the system. Third, and most importantly, the cost will be offset by higher GDP growth as businesses become more productive thanks to all the new investment.
In fact, the Resolution Foundation estimates that the growth boost could be big enough to raise tax revenues in the long run.
After last year’s bond market chaos it is understandable that Hunt doesn’t want to deviate from his fiscal rules, yet there’s no benefit to sticking to a fiscal rule if it rules out a policy that will cut debt in the long term.
In the Autumn Statement, Jeremy Hunt has an opportunity to end the DFS approach to tax policy and give businesses the confidence (and the incentive) to invest in the long term. Let’s hope he takes it.
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For a second year running, Revolut, the jewel in the UK’s fintech crown, will fail to file its annual accounts on time. It’s not a good look.Since it launched in 2015, Revolut has grown quickly to 6,000 staff and 25 million customers. In pursuit of a “one app, all things money” vision, it has expanded its product suite aggressively too, pushing into services like crypto trading and international money transfer, and earning the “neobank” moniker. In 2021, Revolut secured a $33 billion valuation, and earlier this year it announced its first ever year of profitability.But it has suffered a host of unflattering setbacks too; from an exodus of executives to late financials, costly cyber incidents, and reports of high staff turnover and unhealthy work climate published in WIRED. When Revolut eventually filed its last set of accounts in March, six months late, there was a catch: Its auditor, BDO, could not verify with certainty three-quarters of its revenues—£476.9 million ($591.6 million)—because of problems with its IT practices. Another delayed financial audit was the last thing it needed.Though Revolut declined to comment on the record, it has reportedly attributed the delay to a lag in its audit process caused by the lateness of the previous set of accounts. That “sounds like a weak excuse,” says Shaul David, a former banker, fintech executive, and adviser to the UK government. “Revolut has had a long series of own-goals—and the latest delay is just another one.”Word that Revolut will miss its deadline will cause “tongues to wag” all over again, says Simon Jaquiss, a veteran banker, previously of Standard Chartered and Citibank. And speculation about disorder at Revolut, he says, could be bad for business. For more than two years, the firm has attempted to convince the Prudential Regulation Authority (PRA), the body that supervises UK banks, that it’s worthy of a UK banking license. A license would allow Revolut to expand beyond low-margin money transmission services, into lending products like mortgages, credit cards, and business loans. It would also be able to offer customers regulator-insured deposits, like the banks do.Without a UK banking license, says Ruth Wandhöfer, an author and fintech consultant—who helped negotiate the terms of the EU payments legislation that opened the door to fintechs like Revolut—the company would have to completely rethink its growth strategy. There would be a “whole ecosystem of financial products” the firm wouldn’t be able to offer, she says. “Basically, you’re not participating in the real action.”Under a separate license issued by the Bank of Lithuania, Revolut is able to operate as a bank within the EU and currently provides banking services in 28 EU countries. But the UK is by far its largest market—and a UK banking license, seen as a gold standard worldwide, would open doors to new territories, like Australia and the US. It’s a crucial piece of the puzzle, but one that might depend on Revolut’s ability to better project the sense that its house is in order.The second audit delay is not reason in itself for the application to be rejected, says Mick McAteer, a former board member of the Financial Conduct Authority (FCA), the UK’s top finance regulator, which will assist the PRA in deciding whether to award Revolut a license. Some experts, like Jaquiss, say the general “sentiment and feeling” around the company will have nothing to do with the decision. It’s about measurables, he says, like “capital adequacy, liquid assets, and stress testing.”But others believe the “soft data”—qualitative observations about the stability and competence of the firm—will be taken into account. “Naturally, there must be a level of intangibles that have an impact on the regulators. It’s not a scientific process; all of this data gets fed in,” Wandhöfer says. Another delay of accounts is “part of a body of evidence that may cause a swing” toward not approving the application, she says—it makes things “incrementally more difficult” for Revolut. The regulator will not make an arbitrary decision based on some ill-defined feeling about the firm, but “you cannot ignore softer elements,” she says. “You’d expect a fair judgment of all of these variables.” The PRA and FCA declined to comment.The implications of a rejection would be serious, says David. Not only would Revolut struggle to raise capital at its peak valuation, which was likely pegged to the ability to lend in its largest market, he says, but potentially to obtain banking licenses in other jurisdictions too. “If the UK regulator says it cannot trust [Revolut] with a banking license,” he says, “other regulators will ask themselves whether they want to be the one” to give the thumbs up. | United Kingdom Business & Economics |
The government's plan to expand funded childcare for working parents "will not work" unless the amount paid to providers is right, MPs have warned.
Underfunding had left the sector "straining to provide" enough places for children, the Education Committee report found.
Early-years charities have welcomed the inquiry's focus on the challenges facing the sector.
The government says it is increasing the amount it pays childcare providers.
Working parents of three- and four-year-olds are eligible for 30 hours of government-funded childcare during term time - but by September 2025, this will be extended to cover children aged nine months and above.
Robin Walker, who chairs the committee, said the childcare market faced significant challenges in "affordability and availability" and "simply extending the number of hours that the government calls 'free' will not work unless the funding rates accurately reflect the costs of providing high-quality early education and childcare".
The report warns it is vital the government "gets this right, or the already struggling childcare market will see even more closures" and the sector needs "radically more financial and regulatory reform".
The MPs also want better evidence of the effects of formal childcare on under-twos and say there should be more support for parents who choose to stay at home to look after their children.
Many settings currently charged children not on funded hours more, to compensate for the hours government paid for, the inquiry heard.
Nicola Fluery, who owns the Kidzrus Nursery Group, in Salford, Greater Manchester, said funding had been an issue "for many years" and she had had to supplement the amount the government paid for those children eligible for funded hours, in other ways, "for example, bank loans".
In April, the government's planned rollout of the extension of funded childcare for working parents will begin, starting with 15 hours for two-year-olds. And Kidzrus nurseries are already receiving calls from parents keen not to miss out.
Demand "will far outweigh the number of places available", Ms Fleury fears.
National Day Nurseries Association chief executive Purnima Tanuku agrees "the policy could fail" if it fails to tackle underfunding.
From September, the average hourly rate the government will pay will rise from:
- £5.29 to £5.62 for three- and four-year-olds
- £6 to £7.95 for two-year-olds
It is also consulting on proposals to increase the rates for next year.
But also from September, the number of two-year-olds a staff member is expected to look after will rise, which the report said was deeply concerning and should be closely monitored and "reversed if quality and education outcomes suffer".
The wide-ranging report had a number of recommendations, with the committee calling for:
- business rates for nurseries to be abolished
- mandatory training for staff working with children with special educational needs and disabilities
- the teachers' early-career framework to apply to all early-years staff
Parents in training or education should also be able to access government-funded hours, the report recommends.
The Department for Education said it was rolling out" the single biggest investment in childcare in England ever, set to save a working parent using 30 hours of childcare up to an average of £6,500 per year and give children the best quality early-years education".
"To make sure that we are supporting our fantastic early-years workforce, we will be investing hundreds of millions of pounds each year to increase the amounts we pay childcare providers," an official said.
"We also are consulting on how we distribute funding to make sure it is fair." | United Kingdom Business & Economics |
Three pro-Palestine terrorist groups — including Hamas, the organization behind the surprise attacks that killed more than 250 Israelis on Saturday — have been funding their operations with tens of millions of dollars raised through cryptocurrency.
Between August 2021 and June 2023, Hamas, Palestinian Islamic Jahid (PIJ), and its Lebanese ally, Hezbollah, have collectively received over $134 million in crypto, according to Israeli government seizure orders and blockchain analytics reports reviewed by The Wall Street Journal.
Hamas received some $41 million in digital currency over the nearly two-year period, The Journal reported. PIJ — whose militants from the Gaza Strip joined Hamas in storming Israel over the weekend — has received crypto funds to the tune of $93 million between August 2021 and this June, according to the outlet.
Crypto funds were seized from crypto exchange Binance in June reportedly belonging to Hezbollah, a longtime foe of Israel based in Lebanon, though it’s unclear how much digital currency the group had.
A Binance spokesperson told The Journal that the Singapore-based company “has been working in real-time, around the clock, to support ongoing efforts” to keep terrorist groups from having access to crypto.
It wasn’t immediately clear whether the funding was used to finance Hamas’ recent airstrikes and raids that have obliterated Israeli cities and left residents defenseless.
Researchers who study Hamas’ funding, however, told The Journal that crypto remains a top resource the group uses to generate funds, including bringing in cash from Gaza and Egypt.
The US has said that Hamas — which governs Gaza — is heavily subsidized by Iran, with funding from the nation’s capital, Tehran, coming in at around $100 million per year.
Hamas’ military wing, the Izz ad-Din al-Qassam Brigades, has asked supporters on its Telegram channel to donate bitcoin from as early as 2019, which it transferred into the organization’s accounts via Binance, according to The Journal.
Representatives from Binance did not immediately respond to The Post’s request for comment.
“The reality of jihad is the expenditure of effort and energy, and money is the backbone of war,” the group wrote in a 2019 post with a crypto wallet that received about $30,000 in bitcoin that year, The Journal reported.
In April, Izz ad-Din al-Qassam Brigades’ account shared a post thanking people who donated bitcoin to “support the Palestinian resistance,” but said the group would no longer be taking financial gifts in the form of digital currency, citing “concern for the safety of donors.”
The group also cited a “doubling of hostile efforts against everyone who tries to support the resistance through this currency.”
According to The Journal, Hamas has received donations through payment processors that generate addresses in an effort to conceal its true crypto wallet. Links to those processors are reportedly embedded in the al-Qassam Brigades’ fundraising websites.
Cryptocurrency allows users to bypass the traditional banking system by instantly transferring tokens to a digital wallet via decentralized blockchains, meaning there’s no single person or group that has control over the transaction.
The US Treasury Department has said that there are gaps in financial crime controls at crypto exchanges that allow terrorist groups including Hamas, Islamic State, and al Qaeda to misuse them, according to The Journal.
After the Israeli government led an operation to seize crypto belonging to Hezbollah earlier this year, Israeli Defense Minster Yoav Gallant said the use of digital currencies was making the job of eliminating terrorist organizations much more difficult, the organization reported.
“This is not an easy task,” Gallant said of prohibiting these groups from crypto exchanges.
The Israeli government also said this week that it’s working to freeze Hamas’ crypto accounts that they use for donations solicited on social networks in an effort to locate the “financial infrastructure in cryptocurrencies used by terror entities to fund their activities,” per The Journal.
The Post has sought comment from the US Treasury Department. | Crypto Trading & Speculation |
Vince McMahon is selling a significant portion of the stock he acquired as a result of the WWE sale.
McMahon, the ex-CEO of WWE, plans to offload 8.4 million shares of Class A common stock in TKO Group Holdings. This entity emerged from the WWE and UFC merger orchestrated by Endeavor, the owner of UFC. As of TKO’s latest closing share price, these shares are valued at approximately $713 million.
TKO in a press release have announced that Vince McMahon is selling 8,400,000 shares of his TKO stock. pic.twitter.com/NIf6w1Ihoa
— Wrestle Ops (@WrestleOps) November 9, 2023
TKO stated in a Thursday filing with the SEC that McMahon “will receive all of the net proceeds from this offering.” According to a regulatory filing, the sale of stocks constitutes roughly 30% of the 28 million shares owned by McMahon in TKO as of August.
TKO has expressed its intention to buy back around $100 million worth of shares of its Class A common stock from the underwriters participating in McMahon’s stock sale.
McMahon, serving as the executive chairman of TKO Group, held a 16.4% economic interest in the company when the deal establishing it concluded in September. In 2022, McMahon resigned as WWE’s chief executive amid a board investigation into alleged hush-money payments to women accusing him of sexual misconduct. He resumed his role in January 2023 as executive chairman to oversee the sale of WWE.
Regarding McMahon’s stock sale, Ariel Emanuel, TKO’s CEO and director (also CEO of Endeavor), along with Mark Shapiro, president, COO, and director (and president and COO of Endeavor), have both “indicated an interest in purchasing up to $1.0 million” in TKO stock. Furthermore, “certain other of the company’s directors” have indicated their intention to purchase shares worth $850,000. The offering will be managed by Morgan Stanley & Co. as the book-running manager, with MUFG Securities Americas serving as the co-manager.
Vince McMahon is selling 8,400,000 of his shares in $TKO.
This is about 30% of his roughly 28 million company shares he holds before this transaction.
Ari Emanuel and Mark Shapiro "have indicated an interest" in buying $1.0M and $1.850M worth of those shares, respectively. pic.twitter.com/VLuIE3EAvU
— Brandon Thurston (@BrandonThurston) November 9, 2023
TKO disclosed its third-quarter financial results on November 7, marking its inaugural report as a publicly traded entity. The Q3 outcomes presented a mixed picture: the company recorded revenue of $449.1 million, marking a 32% increase from the same quarter the previous year, and adjusted earnings before interest, taxes, depreciation, and amortization rose by 26% to $239.7 million. However, net income experienced a decline to $22 million, compared to $129.7 million in the corresponding period the previous year.
Following the establishment of TKO, Dana White has assumed the position of CEO at UFC, while Lawrence Epstein retains his role as senior executive VP and COO of UFC. Nick Khan remains in his capacity as president at WWE, maintaining his position on TKO’s board after previously serving as CEO.
Upon the completion of the TKO Group deal, Emanuel was awarded restricted stock units (RSUs) in TKO Class A common stock valued at $40 million. These RSUs are set to vest in four equal installments on each of the one-year, two-year, three-year, and four-year anniversaries of the closing date, contingent upon his ongoing employment. Similarly, Shapiro received RSUs of TKO stock amounting to $6.25 million, with vesting scheduled on the one-year anniversary of the closing date, contingent upon his continuous employment.
Furthermore, among WWE executives who obtained cash payments as “sale bonuses” related to the TKO deal were Nick Khan ($15 million), Kevin Dunn, the executive producer, and chief of global television distribution ($7 million), Chief Content Officer Paul “Triple H” Levesque ($5 million), and CFO Frank Riddick ($5 million). | Stocks Trading & Speculation |
- A big part of Sam Bankman-Fried's journey to criminal court traces back to the $35 million Bahamian property he shared with nine people.
- The 11,500-square foot apartment overlooks the marina and the Atlantic Ocean.
- A Signal thread labeled "People of the House" was provided by a key witness in the trial.
Sam Bankman-Fried has traded a luxury penthouse in the Bahamas for a decidedly different top-floor setting: a criminal courtroom in downtown Manhattan.
He's roughly 1,100 miles away from the tropical paradise he called home until late last year, and is facing a potential lifetime in prison if convicted for financial crimes tied to the collapse of cryptocurrency exchange FTX, which was once valued at $32 billion.
Bankman-Fried, 31, is spending much of his time now on the 26th floor of 500 Pearl Street, one of two federal courthouses of the Southern District of New York. He sits just feet away from 12 jurors who will decide his fate.
Bankman-Fried, who faces seven federal fraud charges, has pleaded not guilty.
A big part of Bankman-Fried's journey traces back to the $35 million Bahamian property he shared with nine people, including friends from high school, an ex-girlfriend, college roommates and top execs at FTX and sister hedge fund Alameda Research.
Many of his former bunkmates now comprise the prosecution's star witness list. Gary Wang, the lesser-known co-founder of FTX and Alameda and a roommate at the Massachusetts Institute of Technology, took the stand last week and will appear again on Tuesday. Adam Yedidia, a senior FTX developer and also a roommate at MIT, testified last Wednesday and Thursday. And then there's Caroline Ellison, who ran Alameda and had been Bankman-Fried's girlfriend. She's slated to appear on Tuesday.
The group was cliquey, and became even more intimate during the Covid outbreak, as the 20-somethings fled Hong Kong to ride out the pandemic in the Caribbean. They freely mixed work with pleasure, and some reports of their shared time together on the island of New Providence chronicle sexual explorations.
During the first week of Bankman-Fried's criminal trial, prosecutors were focused on how Bankman-Fried paid for the dwelling worth tens of millions of dollars.
Lawyers for the U.S. Attorney's office entered into evidence a series of photos featuring the penthouse condo in a building dubbed the "Orchid," where Bankman-Fried and his fellow co-workers resided. The 11,500-square foot apartment overlooks the marina and the Atlantic Ocean.
The defense tried to strike some of the images, concerned that photos featuring yachts in the background might be mistaken for property owned by Bankman-Fried. The request was denied by Judge Lewis Kaplan.
Yedidia, the second witness called to the stand by the government, testified that Bankman-Fried's crypto hedge fund ultimately paid for their opulent surroundings.
In his testimony, Yedidia recalled a group Signal thread labeled "People of the House," which referred to Bankman-Fried's $35 million penthouse. In a screenshot of a text exchange, admitted as evidence by the government, Bankman-Fried said he'd "been assuming that it's basically just Alameda paying for it in the end."
A superseding indictment claims Bankman-Fried misused billions of dollars worth of customer money for his personal benefit, including purchasing more than $200 million on upscale real estate properties in the Bahamas and making more than $100 million in campaign contributions for the 2022 midterm elections.
Another estimate by Bahamian lawyers claims Bankman-Fried and Ryan Salame, a former top FTX executive, spent $256.3 million to buy and maintain 35 different properties across New Providence — real estate that Bahamian regulators wanted to retrieve in FTX's U.S. bankruptcy protection proceedings.
Separate to the criminal case, the bankruptcy estate of FTX has independently alleged that Bankman-Fried's parents, Joseph Bankman and Barbara Fried, "exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly, by millions of dollars."
Lawyers representing FTX have sued Bankman-Fried's parents in an attempt to claw back luxury property and "millions of dollars in fraudulently transferred and misappropriated funds." The lawsuit goes on to claim that Bankman and Fried discussed with their son the transfer of a $10 million cash gift and a $16.4 million estate in the Bahamas.
"This is really just old fashioned embezzlement," John Ray, FTX's new CEO who previously led the Enron bankruptcy proceedings, previously told lawmakers on Capitol Hill. "This is just taking money from customers and using it for your own purpose. Not sophisticated at all."
Ray said the company had "no record-keeping whatsoever."
The Orchid is widely regarded as the crown jewel of the Albany, an oceanside resort that spans 600 acres and reportedly boasts a consortium of celebrity backers, including Tiger Woods and Justin Timberlake. Its ultra-rich residents ride around in golf carts, moving from their home to one of the many restaurants and then to the beach or padel courts, where they can play a sport that's a mix of tennis and squash.
The penthouse had en suite bathrooms, walk-in closets, Venetian plaster walls and Italian marble floors, along with a balcony-lined perimeter with its own private spa, outdoor pool and jacuzzi.
In his new book, "Going Infinite: The Rise and Fall of a New Tycoon," here's how best-selling author Michael Lewis described the exterior:
"At night its penthouse was lit purple, and the purple light made it seem glamorous, and elicited envy even from those accustomed to being envied."
Lewis depicts the interior of the luxury condominium as more of a "flophouse" with one wall "obscured by a row of computer monitors whose cords snaked across the marble like jungle vines."
A CoinDesk journalist, who visited the apartment in September 2022, described the scene as a "cross between a luxury dorm room and a jury-rigged trading floor," adding that the "curved marble living room was rimmed with computer desks, each supporting various configurations of conjoined monitors."
One of Bankman-Fried's iconic bean bags that he used for napping was apparently kept under the baby grand piano in the room that defense lawyers have compared to the common area of a dorm room.
Mark Cohen, Bankman-Fried's attorney, said in his opening statement that his client was a "math nerd who didn't drink or party." Donning a glass of wine was tantamount to "an act of hedonism," Lewis writes in his book.
As for the epic views, Lewis added that Bankman-Fried and his housemates "seldom so much as glanced" at them.
Outside of the Albany were six stadium-lit padel courts. Yedidia said it was there that he and Bankman-Fried spoke about concerns he had about the business.
During the summer of 2022, and while fixing a bug in FTX's code base, Yedidia had discovered an $8 billion debt that Alameda apparently owed FTX.
Prosecutors asked why he was worried about the budget hole.
"Because if they spend the money that belongs to the FTX customers, then it's not there to give the FTX customers should they withdraw," Yedidia testified.
Near the little hut at the edge of the net, Yedidia asked his boss if things were OK. He was concerned because it "seemed like a lot of money" from FTX customers was at risk.
In June 2022, Yedidia submitted a report to Bankman-Fried on Signal that showed $8 billion in customer money held in an internal database tracking the cash wired to an Alameda account called "fiat at ftx.com" was missing.
While Bankman-Fried appeared "worried or nervous," Yedidia said he trusted Bankman-Fried and Ellison to "handle the situation."
Yedidia testified that he hadn't talked to Bankman-Fried or seen him in person since November. The day before FTX filed for bankruptcy, Yedidia resigned after a fellow developer told him that Alameda had used FTX customer deposits to pay back creditors.
Bankman-Fried hosted journalists from around the world at his Bahamas complex. In a September 2022 interview with CNBC there, he boasted that he had $1 billion in free cash to deploy across the industry. As late as Oct. 2022, in a fireside chat with CNBC at DC Fintech Week, Bankman-Fried spoke of FTX's role in helping to prop up the industry through 2022's cascade of bankruptcies.
— CNBC's Dawn Giel contributed to this report. | Crypto Trading & Speculation |
Plans for a tourism tax on holidaymakers in Wales have moved a step closer.
Legislation allowing local authorities to introduce a levy will be put to the Senedd within the next two years, the Welsh government has said.
It has also published the findings of a public consultation on the topic.
Supporters say the tax would contribute towards maintaining and investing in holiday destinations - opponents say it would put people off visiting Wales.
Similar charges are commonplace around the world, used in more than 40 destinations including Greece, Frankfurt, Amsterdam and Catalonia.
Manchester introduced a tourist tax last year for people making overnight stays in the city, with 74 hotels and guesthouses signing up to the scheme for an extra £1 per night.
"Some local authorities are for it - I don't think we're talking a huge amount of money, it'll be a couple of pounds extra for the accommodation sector," said joint chairwoman of Anglesey Tourism Association Nia Jones.
"The important part is that is spent on the tourism infrastructure and if that happens and people can see the visible and tangible benefits of the tax then we wait to see how it works."
However, Ms Jones accepted there are opponents to the tax, describing it as a "hot potato" in tourism.
"The accommodation sector is still struggling after Covid, I'm hearing that many places are not full for Easter," she told BBC Radio Wales Breakfast.
"It's particularly quiet, there's still a degree of nervousness in businesses operating at the moment so there will be a split in how the trade will view a tourism tax in Wales.
"We're nervous [about the tax] because it's new, because the industry is still quite volatile after Covid."
What do people in Llandudno make of the plans?
Lynette Esposito, who runs the Elm Tree Hotel, said she was concerned tourists would choose to go elsewhere instead.
"As much as Wales is exceptional and has a unique selling point, the UK isn't short of tourism destinations and tourists are discovering  that daily," she said.
"It's a very real threat - they'll just decide that other destinations are more competitive. All these little layers of extra cost - people will think about it."
But tourists Barbara and Brian Langley from Bradbury, Stockport, said the tax would not deter them from holidaying in Wales, although they acknowledged it could deter others.
"It wouldn't put us off, we're 85 and we keep coming here four times a year," they said.
Hasina and Nisha Mansurali from Shropshire said the tax might encourage them to spend their holidays abroad.
"It is quite expensive going on holiday in the UK and maybe it would put me off a bit. So then I'd think: 'Well let's just go abroad rather than spending the extra money'," Nisha said.
Suzy Davies, chairwoman of the Wales Tourism Alliance, said: "To try and introduce another burden for businesses, which is also taking money away from those businesses, is a really crazy thing to do."
Speaking to BBC Radio Wales, Jonathan, a hotel owner from Llanarmon Dyffryn Ceiriog, in Wrexham, said: "It just shows how completely out of touch with reality the Welsh government are. The timing of this alone couldn't have come at a worse time for our industry.
"In two days' time, all our energy support disappears. That means that my electricity bills are going to go from £1,600 a month to £8,000 a month. This is a kick in the teeth for our industry.
"The industry cannot survive this."
Minister for Finance and Local Government, Rebecca Evans, said: "Tourists across the globe can be sure of a warm Welsh welcome when they come here.
"But, we can't pretend that tourism doesn't have an impact on our communities and this really is just about doing what countries, regions and cities around the world are doing - asking tourists to pay a small contribution."
Ms Evans said the tax amount is currently in development, looking at where other countries have pitched their tourism tax rate.
"We do understand the impact that day visitors have on local communities but I think that in terms of creating a tax that is simple, fair and stable, an overnight levy is much more easy to implement than one which taxes day visitors," she said.
"For example, how you go about identifying day visitors and collecting a levy in a proportionate way?"
Welsh Conservatives Shadow Minister for Tourism Tom Giffard said: "Nothing says welcome to Wales more than Labour announcing they will be pressing ahead with their toxic tourism tax as families gear up for the Easter holidays.
"Tourism supports one in seven jobs in Wales enabling people to pay council tax, helping to tackle the issues that Labour claim a tourism tax would fix.
"The Labour government should be working with the industry to boost this vital sector instead of taking a sledgehammer to crack a nut."
Visit Pembrokeshire said it was "very disappointed" at the announcement.
"It's disheartening to hear that the strong opposition from the trade across Wales has not been listened to," said Emma Thornton, its chief executive.
The tax would need to be paid by anyone staying overnight in Wales, to contributes to the costs which local authorities face.
The Welsh government has previously said that the levy would be for each council to control.
They would choose whether or not to introduce the charge "according to the needs of their communities".
The Welsh government said it received more than 1,000 responses to the public consultation about how best to implement a tax, which closed last December.
It found support across most local authorities and across other organisations, it added.
However, it also said many responses came from representatives of the tourism industry and many disagreed with the principle of a visitor tax. | United Kingdom Business & Economics |
Voters in Red Wall seats targeted by Labour support taking energy back into public ownership, a poll reveals.
Around two in three (64%) people living in constituencies in the North, Midlands and Wales seized by the Tories in 2019 think the UK’s domestic energy industry should be brought back into public ownership. The Survation poll of 2,000 voters for the Unite union also found that seven in 10 (73%) said the National Grid – gas and electric – should be publicly-owned again.
It comes as Labour conference was due to debate a motion on Monday arguing privatisation of key national infrastructure has failed and should be taken back into public hands. Unite, Labour's biggest union backer, has been putting pressure on the party to be more radical on energy, with a grassroots campaign across a string of industrial constituencies.
Unite General Secretary Sharon Graham told the Mirror: "These are their voters, this is where they want to go and to get votes from. If they don't take any notice of these voters, then apathy may well be the winner at the election."
Ms Graham, who has been publicly critical of the Labour leader, urged Mr Starmer to take inspiration from the 1945 Government led by Clement Atlee rather than being "timid". "For 13 years we've had a shameful Tory government, batting for business, batting for the city, dragging all the spoils into the very small group of people's hands," she said.
Asked about criticism of her attacks on Labour, she said: "I will campaign for a Labour Government, I want a Labour Government and it's something that is the country absolutely 100% needs there is no doubt about that. But it needs a 'Labour' government. Why I think it's important for me to say what I'm saying... that's what everyone is saying up and down the country".
It comes as Labour set out plan to "rewire Britain" with a clean energy grid as party of its blueprint for a new publicly-owned energy company known as GB Energy. Under the plans, GB Energy would work in coordinating the transmission operators to launch a super-tender to procure the grid supply chain that Britain needs.
Research from the Common Wealth think-tank, reported in the Sunday Mirror, found Britain’s privatised energy network has handed £28 billion since it was sold off by the Tories in 1990. But it still takes an average of 13 years to connect renewable projects like wind farms to the grid.
When wind farms create more energy than the grid can handle, National Grid pay them to shut down at a cost of up to £62 million a day. The researchers argued that renationalising the grid would save billions of pounds and allow the Government to invest in infrastructure rather than paying shareholders. | United Kingdom Business & Economics |
Luke Hickmore, investment director of fixed income at abrdn, also stressed that many people will be forced to renew their mortgages in the autumn having taken them out two years ago during the Covid pandemic when stamp duty was reduced, often at a rate of around two per cent.
The Bank of England’s Monetary Policy Committee was expected to hike interest rates on Thursday, by 0.25 percentage points, or even 0.5, after official figures showed inflation entrenched at 8.7 per cent in May.
Asked what a six per cent Bank of England interest rate by the end of the year would mean for a two-year fixed, Mr Hickmore told BBC Radio 4’s Today programme: “The linkage between the two is never as clean as you want it to be when you trying to predict where things are going to go.
“But it would suggest in the high six, maybe even touching seven per cent for two-year fixed.”
Markets are predicting that BoE interest rates could rise to six per cent to force down inflation.
Economists agree that the Bank's Monetary Policy Committee (MPC) is likely to raise interest rates on Thursday, from the current rate of 4.5 per cent, and that more hikes are on the horizon.
Financial markets are expecting interest rates to rise by 0.25 percentage points to 4.75 per cent. But there is a 40 per cent chance that the rate could be pushed up even higher, by 0.5 percentage points to 5 per cent.
"Settling on the larger of the two risks adding fuel to the fire for rate expectations, a message the MPC will think long and hard about given the impact this would have for what is now termed the 'mortgage time bomb' for households and landlords that refinance borrowing," said Sandra Horsfield, an economist for Investec Economics.
It comes as concerns have mounted over the mortgage market, with the average two-year fixed residential mortgage rate surpassing 6 per cent, according to data from Moneyfactscompare.co.uk.
Moreover, expectations of where rates will peak have surged in recent weeks, with markets now anticipating a high of 6 per cent by early next year. It would mean rates hit the highest level in more than two decades.
Chancellor Jeremy Hunt said he has spoken to consumer champion Martin Lewis, who on Tuesday said that a mortgage ticking time bomb is now "exploding", ahead of meeting with Britain's major lenders on Friday.
Banks have also come under fire from a group of MPs on the Treasury Committee for not raising savings rates as much as borrowing costs.
However, the Bank of England has said it will continue to raise interest rates as long as it sees signs of inflationary pressure.
Economists have said that important indicators of persistent inflation, namely core inflation, which strips out the price of energy, food, alcohol and tobacco, and wage growth, have remained elevated, which is likely to worry MPC policymakers.
Core CPI rose to 7.1% in May from 6.8% in April, the ONS said, and is often more in focus for the Bank when it sets interest rates.
Rob Morgan, chief investment analyst at Charles Stanley, said: "Getting the inflation genie back into the bottle is proving troublesome for the Bank of England.
"With price momentum continually running above expectations alongside strong wages data, the Bank has no choice but to continue on a path of raising interest rates several more times."
However, a spokesman for the Prime Minister said he is still on track to meet the Government's target of halving inflation by the end of the year, despite last month's setback. | Interest Rates |
The north Wales rail line is to be electrified using £1bn that was earmarked for HS2, the prime minister has said.
Rishi Sunak announced HS2 will only run from London to Birmingham and not on to Manchester because of spiralling costs.
Money will instead be used for alternative projects across the UK, including the one in north Wales.
Business leaders in north Wales had called HS2 a "vanity project for England" and welcomed its demise.
"Today's announcement will unlock north Wales' unique potential by transforming its economy and infrastructure," said Welsh Secretary David TC Davies after the announcement.
"For too long the people of north Wales have been ignored by an incompetent Labour Welsh Government in Cardiff Bay - but the UK government is correcting that wrong.
"Under the Conservatives, north Wales is being given the attention it righty deserves."
Maria Hinfelaar, vice-chancellor of Wrexham University, said "half an HS2" was "actually worse than useless" and "totally irrelevant".
"I would've been supportive of a fully-completed HS2 from London to Manchester, it would have benefitted us as a university," she told BBC Radio Wales Breakfast.
"We have 3,000 international students, many that fly into London. To tell them they could get on this train, it would have been a selling point."
She called on investment to improve links between north Wales and Cardiff, London and the north west of England.
HS2 had been classified an England and Wales project - with the UK government arguing that HS2 would boost reliability, connectivity and capacity on routes across the UK, including services into Wales.
A station at Crewe was earmarked as an interchange for north Wales, and because of this, Wales was initially denied any consequential funding.
Askar Sheibani, chairman of Deeside Business Forum which represents 2,000 members and supporters, was scathing about the original project.
"We did not believe this vanity project in England would have any benefit for north Wales. We were never consulted," he told BBC Radio Wales Breakfast.
His group straddles the Wales-England border in Flintshire and Cheshire, with a meeting and debate on the initial HS2 plans showing little support.
He believes more benefit for north Wales would have come from improving links to the two major international airports in north west England - Liverpool and Manchester - as well as the port of Holyhead on Anglesey.
He added: "We were ignored as usual and never consulted. This is a result of their madness."
Mr Sheibani said firms he represented had been opposed to HS2 for more than a decade and the return on the investment was "abysmally low".
Analysis by Gareth Lewis, BBC Wales political editor
Wales has got something, having previously had nothing, and now has something that might or might not be as good as what it felt it should have had.
HS2 is officially an England and Wales project, justified by quicker journeys via Crewe. But it never really washed - Wales wouldn't have had a millimetre of high speed track.
And it meant Wales missed out on equivalent funding, as is the way when a project is designated England-only. It could have been as much as £5bn.
Now Wales has the promise of £1bn to electrify the North Wales mainline, although at time of writing, with no confirmed timescale.
It is much-needed and much-demanded and should mean quicker, cleaner and more frequent services.
Will this wash with voters and businesses in a part of the world where seven seats will be keenly contested at the next general election?
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Eric Trump is expected to take the stand Thursday in the non-jury civil trial stemming from New York Attorney General Letitia James’ lawsuit against the Trump family and Trump Organization.
The former president’s son is an executive vice president at the Trump Organization. Eric Trump has oversight over the company’s operations, while his brother, Donald Trump Jr., has been involved in running the company’s property development.
Eric Trump’s expected testimony is scheduled for a day after his brother, Donald Trump Jr., another executive vice president at the company, took the stand.
Donald Trump Jr. testified Wednesday that he does not have professional training with generally accepted accounting principles and instead relied on accountants with regard to financial statements at the Trump Organization.
The lawsuit centers on whether the former president and his business misled banks and insurers by inflating his net worth in financial statements.
Donald Trump Jr. also testified that he reported to former Trump Organization Chief Financial Officer Allen Weisselberg for a short time and later reported to his father until he became President of the United States.
The former president's son said his father did not make any business decisions while he was in the White House.
Meanwhile, Ivanka Trump was dismissed as a defendant from the case over the summer after a decision by a New York Appeals Court, but she was scheduled to appear for testimony Friday. Her attorneys on Wednesday, however, filed a notice of appeal to the decision requiring her to testify at her father’s civil fraud trial.
Former President Trump, Don Jr. and Eric Trump are all still listed as defendants.
The former president is expected to take the stand Monday.
The trial comes after James, a Democrat, brought a lawsuit against Trump last year alleging he and his company misled banks and others about the value of his assets. James claimed Donald Jr., Ivanka and Eric, as well as his associates and businesses, committed "numerous acts of fraud and misrepresentation" on their financial statements.
The appellate ruling from over the summer, which dismissed Ivanka Trump as a defendant, also prevented James from suing for alleged transactions that occurred before July 13, 2014, or Feb. 6, 2016, depending on the defendant.
Trump has blasted James for bringing the lawsuit, for the trial not having a jury and Judge Arthur Engoron, presiding over the trial, calling him "corrupt."
"The attorney general filed this case under a consumer protection statute that denies the right to a jury," a Trump spokesperson said. "There was never an option to choose a jury trial. It is unfortunate that a jury won’t be able to hear how absurd the merits of this case are and conclude no wrongdoing ever happened."
Engoron last month ruled that Trump and the Trump Organization committed fraud while building his real estate empire by deceiving banks, insurers and others by overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.
Engoron’s ruling came after James sued Trump, his children and the Trump Organization, alleging that the former president "inflated his net worth by billions of dollars" and said his children helped him to do so.
Fox News' Maria Paronich and The Associated Press contributed to this report. | Real Estate & Housing |
Most Americans have less in their retirement accounts than they’d like, and much less than the rules say they should have. So, obviously, if that describes you then you’re not alone. Now, most financial advisors recommend that you have between five and six times your annual income in a 401(k) account or other retirement savings account by age 50. With continued growth over the rest of your working career, this amount should generally let you have enough in savings to retire comfortably by age 65.
Consider working with a financial advisor as you flesh out your retirement plan.
What Your Retirement Savings Should Look Like by Age 50
Financial experts sometimes suggest planning for your retirement income to be about 80% of your pre-retirement income. So, for example, someone who earned $100,000 per year going into retirement would plan on having about $80,000 per year while retired. The reason for this discrepancy is that most households tend to have fewer needs and responsibilities while in retirement, and therefore fewer expenses. The only major exception to this rule is when it comes to healthcare. You should expect those costs to rise in your later years.
To make your savings last, financial experts recommend that you plan on withdrawing about 4% per year from your retirement fund. This will depend on three main factors:
How much money you have in your retirement fund
The average rate of return that your retirement fund generates
Your anticipated Social Security income
So, for example, say you plan on needing $80,000 per year in retirement.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
First, you should look up how much money you can expect each month from Social Security. This income will depend on how much you made during your working life, as well as when you choose to retire. If you are an average Social Security recipient it will come to approximately $1,650 a month, or $19,800 a year. So you should plan on withdrawing an additional $60,200 per year to make up the difference.
Applying the 4% rule of thumb, $60,200/0.04, suggests that this household will want about $1.5 million in their retirement fund. Other, more conservative, recommendations suggest making these plans without accounting for Social Security. In that case, you would want about $2 million in your retirement fund.
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The 4% rule may entail withdrawing too much. It comes from, in part, conservative estimates of your retirement fund’s returns. By the time you retire you should have shifted your portfolio to safe assets. Many retirement funds, with comparatively safe assets, will have a return rate of around 3% to 5% by this point, allowing you to hover right around the replacement rate for your withdrawals.
So someone who earns $100,000 per year will want to have around $1.5 million in their retirement fund by age 65. At age 50, then, many experts suggest that this retiree would need to have – at a bare minimum – around $600,000 up in a 401(k), or other tax-advantaged account. That would give the retiree 15 years to boost their retirement nest egg by an additional $900,000, or grow by an average of $60,000 annually for each of the next 15 years. That is unlikely to happen without significant capital appreciation in the retiree’s tax-advantaged account. Many advisors recommend seeking a rate of return around 7% to 8% to reach the needed $1.5 million.
Reaching the Retirement Finish Line
Besides making sure that the asset allocation of your retirement fund is sufficiently aggressive, there are at least four other steps you can take to get from $600,000 at 50 to $1.5 million at 65.
Max Out Your Catch-Up Contributions
This is the most important thing you can do. The IRS limits how much you can contribute to 401(k), individual retirement account (IRA) and Roth IRA in a single year. After you turn 50 it raises the cap, allowing you to make what are called “catch up contributions.” In 2022, for example, most workers can only contribute up to $20,500 to their 401(k) account. However, anyone age 50 or older can contribute up to $27,000. That extra $6,500 is significant, and between age 50 and age 65 it has time to add up to something very real. Take advantage of it.
Open Simultaneous Retirement Funds
The IRS allows you to contribute to a 401(k), an IRA and a Roth IRA in the same year. However, there is overlap between the contribution limits for an IRA and a Roth IRA.
If you are already maximizing your contribution limits to your 401(k) but are still concerned that it isn’t enough, consider opening an IRA or a Roth IRA to supplement your savings. Doing so will allow you to put money into multiple retirement accounts at the same time, helping you to boost your savings considerably.
If you already have simultaneous retirement accounts, consider simply opening an earmarked account. Even though it won’t see the same tax advantages, there’s no reason that you can’t save for retirement with an ordinary investment portfolio. You can put as much money into it as you like then just plan on leaving it there for retirement.
Manage Debt, Manage Spending
An excellent way to free up some cash is to stop making interest payments on debt. If you have existing debt, paying it off more quickly will reduce the amount that you spend on interest and fees. This will, in turn, give you more cash to dedicate toward your retirement account.
When it comes to long-term debt, like a mortgage, paying it off more aggressively can also reduce your potential expenses in retirement. You won’t have to make those payments, which can reduce the amount of money you’ll need each month once you’ve stopped working.
At the same time, consider your overall lifestyle. If you think you may not have enough for your retirement, are there ways that you can shift your lifestyle over the long run that will reduce expenses? Is there someplace less expensive you could live, for example? This isn’t as simple as skipping your morning latte. Instead, consider whether you can shift your monthly needs in a way that might significantly change your budget both today and in retirement.
Consider Working More and Retiring Later
If you don’t have enough money to fund additional retirement accounts, consider taking on additional work to earn that money. This can range from freelance or gig work to a formal part-time job.
This is not a recommendation we make lightly. By the time you’re in your 50s, the last thing most people will want to do is “hustle.” However, secondary work is a good way to boost your finances, and if you need the money for retirement then it has to come from somewhere. More importantly, while it would be unpleasant to need a second job at 55, it would be far worse to need a job at 75. Working today might help ensure that you don’t have to do so tomorrow.
The jump in Social Security payments from normal retirement age to 70 is significant. If you were born between 1943 and 1954, If you start receiving benefits at age 66 you get 100% of your monthly benefit. Should you start receiving retirement benefits at age 67, you’ll get 108% of the monthly benefit because you delayed getting benefits for 12 months. If you start receiving retirement benefits at age 70, you’ll get 132% of the monthly benefit because you delayed getting benefits for 48 months.
Bottom Line
Most financial experts suggest that retirees should have around five to six times their annual income saved up in their retirement account by age 50. If you haven’t hit that mark, it’s probably a good time to maximize catchup contributions and consider opening one or more additional retirement accounts. In addition, make sure your investments are poised for capital appreciation, which of course entails more risk, and cut your discretionary spending.
Tips on Retirement Planning
We can all use help with our finances, and never more so than when it’s time to save for retirement. That’s where a financial advisor can offer valuable guidance and insight.
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Use SmartAsset’s 401(k) calculator to get a quick estimate of how much you’ll have in your 401(k) by the time you retire.
Photo credit: ©iStock.com/Andranik Hakobyan, ©iStock.com/AndreyPopov, ©iStock.com/DNY59 | Personal Finance & Financial Education |
(Bloomberg) -- Investors in Chinese bank stocks are getting a painful reminder of who’s likely to bear the brunt of government efforts to shore up the embattled real estate sector and revive economic growth.
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A Bloomberg Intelligence stock index of Chinese lenders has tumbled 14% from this year’s high in May, erasing $77 billion of market capitalization and leaving the industry’s shares on the cusp of their lowest-ever valuations.
Already under pressure from China’s monetary loosening and tepid demand, banks are facing renewed scrutiny after authorities asked the sector to extend debt relief to developers as the nation’s housing crisis continues. Some Wall Street analysts also have turned cautious, with Goldman Sachs Group Inc. taking a bearish view on the industry, a move that drew a rare rebuttal from a state-run Chinese newspaper last week.
The Bloomberg Intelligence gauge of Chinese bank stocks is trading at 0.27 times book value, just a whisker away from late October’s record low. That compares with 0.9 times for an index of global peers. The China gauge was little changed on Tuesday after registering mild gains early in the trading session.
The extension of relief measures for developers “will likely provide more of a sentiment boost to investors without fundamentally easing investors’ concern on commercial banks’ credit risk on troubled developers,” Citigroup Inc. analysts including Griffin Chan and Judy Zhang wrote in a note. Banks with high mortgage exposure could be more vulnerable, they added.
Regulators said late Monday they have asked banks to ease terms for real estate firms by encouraging negotiations to extend outstanding loans, a move that aims to ensure the delivery of homes still under construction. Some outstanding loans — including trust loans due by the end of 2024 — will be given a one-year repayment extension.
Chinese lenders’ risk exposure to property amounted to about 20 trillion yuan ($2.8 trillion) as of the end of last year, including loans and bonds, accounting for about 5% of their total assets, according to estimates by China International Capital Corp. analysts including Lin Yingqi. Meantime, the non-performing loan ratio of real estate debt was about 4% at that time, they added.
The sector also stands conspicuously at the receiving end of risks from the $9 trillion debt pile among China’s local government financing vehicles as an economic recovery falters. Worries about their balance-sheet health have grown after Bloomberg News reported that top state lenders are offering LGFVs loans with ultra-long maturities and temporary interest relief to prevent a credit crunch.
Goldman estimates that 34 trillion yuan of local government debt sits on the balance sheets of banks it covers. These lenders’ combined assets account for 61% of the banking system’s total, according to the brokerage.
Chinese commercial banks’ net interest margin slid to a record low of 1.74% in March, according to data from the National Financial Regulatory Commission, below the 1.8% threshold that analysts and industry practitioners deem necessary to maintain reasonable profitability.
The lenders have seen their margins squeezed as they were urged by authorities to provide cheap loans to small businesses and home buyers to help prop up the economy. Loan demand from businesses and households, however, has weakened as a property bubble deflates and companies scale back investment.
“Since it’s hard for developers to improve their liquidity, banks still have to suffer the high possibility that most of their lending could turn into bad loans,” said Shen Meng, a director with Beijing-based investment bank Chanson & Co. “The latest policy can only help banks postpone their risk exposure.”
It’s a different picture in credit markets, where Chinese lenders’ bonds have been a sanctuary for investors even as the nation’s housing crisis unfolded and during the recent global banking turmoil.
Yield premiums over Treasuries for Chinese investment-grade dollar bonds, which are dominated by banks and financial institutions, reached a three-year low late last month and have since been hovering near the level, according to a Bloomberg index.
“Chinese bank bonds trade at very tight levels and inside of global banks as their debt is used as a proxy for the sovereign,” said Pri De Silva, a Bloomberg Intelligence analyst. “All banks are majority government-owned anyway and are crucial to public policy in China. So, they are basically treated as an extension of the central government.”
--With assistance from Dorothy Ma.
(Updates prices for stocks and bonds, as well as analyst comments)
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©2023 Bloomberg L.P. | Asia Business & Economics |
Want to Save More in 2024? Take This Step Right Now to Boost Your Odds of Success
KEY POINTS
- Saving more money in 2024 doesn't have to involve making huge financial sacrifices.
- Laying the groundwork for your New Year's resolution right now can help you get off to a strong start in January.
Saving more money is one of the most popular financial New Year's resolutions people make, and it's easy to see why. More money means more freedom to buy what you need and do what you want. But it's not always easy to pull off.
The traditional view of saving more means making sacrifices and forgoing things you want so you can stash more cash in the bank. But there's another, much easier way to beef up your savings next year. And if you take this key step right now, you can dive right into saving in 2024.
Lay the groundwork now
Technically, you don't need a savings account to save more. You could stash the money under your pillow if you wanted. But there are two reasons why having a savings account makes sense.
First, it'll keep your money safe. Bank robberies of the sort seen in old Western movies don't really happen these days, but home break-ins happen quite often. Your cash is much more likely to remain in your possession if you keep it in a bank account. Plus, any reputable bank is going to protect your cash with FDIC insurance up to $250,000 per person per account, so you won't lose anything if your bank goes under.
The second reason you should have a savings account is because you can earn interest on your cash over time. This is something you can leverage to grow your wealth more quickly and with fewer sacrifices on your part. You can't just choose any bank, though.
Brick-and-mortar banks typically offer low interest rates that earn you a few pennies a year if you're lucky. And even worse, a lot of them charge maintenance fees that could actually cost you money if you don't keep enough money in your account.
You need a high-yield savings account from an online bank if you really want to grow your money quickly. Rates fluctuate over time, but right now, the best savings account interest rates are hovering around 4.50%. That could put $450 in your account in one year if you have a $10,000 initial balance.
Banks that offer these types of accounts typically don't charge maintenance fees either. So all the money you earn stays in your pocket.
How to find the right high-yield savings account for you
Opening a high-yield savings account today can help you get a strong start on your New Year's resolution because you can begin saving from day one. But there are a lot of options out there, and it's easy to get overwhelmed. So here are a few tips to help you in your search.
You don't need the highest possible interest rate
It's tempting to hunt for the highest possible interest rate before settling on a savings account, but this probably isn't worth the effort. Savings account interest rates fluctuate over time, and the savings account with the highest rate today may not hold that title tomorrow. Instead, focus on finding a rate that's among the best.
Check its fees
You probably won't have to worry about too many fees with online banks, but it's helpful to look over the bank's fee schedule anyway. Think about how you intend to use your account and what charges that might lead to. For example, if you frequently send money out via wire transfer, make sure your bank doesn't charge costly wire transfer fees.
Think about the features you want
Those who want to withdraw cash from their savings account directly should look for a bank that includes a free ATM card. Make sure the bank has a large network of fee-free ATMs in the areas you frequent as well so you can access that cash without penalty.
If you have any questions about a bank's savings account or how to apply, don't hesitate to reach out. Start exploring your options now and aim to have your new account opened by the end of December so you can start making your initial savings deposits in early January.
These savings accounts are FDIC insured and could earn you 11x your bank
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you 11x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2023.
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How community markets for all could be a sustainable alternative to food banks
The number of people using food banks in the UK has increased from 26,000 in 2008–09 to more than 100 times that in 2023. Nearly one in five British households experienced moderate to severe food insecurity in September 2022.
However, they are not perfect. Food banks offer people little choice, are dependent on unreliable supply chains. Research has also shown that people who use food banks often experience shame and stigma when doing so.
My research, with colleague Heather Hartwell at Bournemouth University, has found a viable alternative. Community markets selling food and household items at subsidized rates to all could be a sustainable solution to the problems with existing food support programs.
Food banks rely heavily on donations. But rising food prices means even would-be donors are struggling to buy that extra can of beans and other items. Beneficiaries of food banks also told us that parcels were mostly made up of dried, tinned and processed foods.
While it is important that parcels have a long shelf life, people experiencing food poverty want a choice of fresh and frozen food items, including meat. The constraints in the range and quality of food available are also associated with health problems such as diabetes, asthma and obesity.
Food banks also do not empower people who use them to become self-sufficient. Rather, they often result in long-term reliance on food aid. Hence, food banks offer temporary relief from hunger without addressing the bigger issues that lead to food insecurity.
Community markets
Community markets operate differently to food banks. They are open to everyone in the local community, regardless of income level, and provide a range of food choices along with other items such as school uniforms and toiletries.
We interviewed 38 people who regularly used or were involved in the operation of these programs in the UK. Through these discussions, we assessed how well community markets address the challenges of food security, and found that they are a possible solution to the limitations of food banks and parcel distribution.
Community markets do not solely rely on donations from the public or businesses. They pay a subscription to charity networks such as FareShare, which provide the market with items in bulk, which are sold to the community at a subsidized rate. All revenue from sales is reinvested to pay for future bulk purchases.
People with low incomes who shop at community markets told us they enjoyed having food at affordable food prices and felt a stronger sense of autonomy, and being part of the community. They did not feel their reliance on food support was a barrier to being part of society. As one person said, "I very much prefer being able to choose my food instead of being given parcels. … It just feels dignified to be able to pay for goods, even if it is at subsidized rates, and then being able to choose what I want based on what I would like to eat."
Food for all
These markets can be used by people from across the community, including those on a higher income. People who were more well-off told us they wanted to shop at the markets because they felt they were giving back, spending their money to be reinvested in the program: "I thought that people who would come to the market … would be very needy, not only financially but mentally as well but it isn't like that … I like shopping here because the money I pay is invested back into the community."
Additionally, community markets serve as a hub, offering organized group activities and services for people, such as cooking and gardening classes, yoga and sewing. Through these activities, the community markets are tackling loneliness and other health issues—not just hunger.
Community markets are economically self-sufficient. They use revenue generated from selling products at subsidized rates to subscribe to charitable food surplus redistribution organizations. This financial independence sets them apart from food banks, which often rely on grants. They can also be environmentally sustainable, actively reducing food waste and their carbon footprint by redistributing surplus food to local emergency services and farms.
As more people rely on food aid, it's important that local councils and national governments support alternatives to food banks. For the family struggling to fill the fridge or the student coping with higher rent, our findings show community markets could be of significant help, while allowing people to maintain their dignity and be part of their community.
Provided by The Conversation | United Kingdom Business & Economics |
HUMZA Yousaf will announce a key step towards normalising a four-day working week as he tries to put his stamp on the Government he inherited from Nicola Sturgeon.
The First Minister is expected to announce a series of initiatives in the annual Programme for Government at Holyrood on Tuesday to differentiate himself from his predecessor.
With a general election next year and a Holyrood vote two years after that, the aim is to focus on solid, deliverable policies and avoid a repeat of recent failures.
Mr Yousaf is expected to confirm a four-day working week will be piloted within parts of the public sector by the end of the calendar year.
It is understood to the experiment will run for around 12 months, with some government enterprise bodies having already expressed an interest in taking part.
If successful, it could be rolled out far more widely within central government, councils and quangoes, potentially acting as a catalyst for the private sector to follow suit.
Last year, a six-month pilot involving 61 companies employing 2,900 people in the UK ended with 56 firms reporting they would continue with the set-up, 18 permanently.
Employees reported feeling less stressed, anxious, fatigued and sleepless afterwards, while company revenues stayed broadly the same or higher.
Almost one in six employees said they would not accept a return to a five-day week because of the improved work-life balance.
The Programme for Government (PfG) contains the list of bills the Government plans to introduce at Holyrood in the coming year, most already identified in the SNP manifesto.
Bills on justice, the environment and tackling climate change are expected.
Although taxation is technically a matter for the Budget later in the autumn, Mr Yousaf is expected to address the issue in his speech to MSPs.
Opposition parties have warned his commitment to “progressive taxation” could mean income tax rises “hammering” families already struggling with rising bills.
To ease concerns, Mr Yousaf is expected to say that Scotland cannot tax its way out of the cost of living crisis, and that he is committed to growing the economy.
However progressive tax and spending decisions will remain part of the package.
Mr Yousaf sounded a cautious note on tax in an interview with the Daily Record yesterday in which he said he wanted to “reform” council tax, despite the SNP coming to power in 2007 on a promise to abolish and replace it.
The Scottish Government is currently consulting on a structural increase in bills for Band E to H homes of between 7.5% and 22.5% on top of annual council-set rises.
Similar jumps were imposed in 2017, and the consultation was supposed to lead to a new round in 2024, but Mr Yousaf said he was open to bringing the rises in gradually.
“I'd be open to any sensible suggestions such as phasing,” he said.
He also said he wanted the SNP, Labour, Tories, Greens and Liberal Democrats at Holyrood to come together for a summit on tackling climate change.
In his first keynote speech as First Minister, Mr Yousaf delayed or dropped plans on recycling, a fishing ban in 10% of Scottish seas, and a ban on alcohol advertising.
He announced a “reset” of the government’s relationship with business, which had withered under Nicola Sturgeon’s administration.
Ms Surgeon’s final months in Bute House also saw her hopes of Indyref2 without Westminster consent crushed by a unanimous ruling of the UK Supreme Court.
Her back-up plan to use an election as a ‘de facto referendum’ then collapsed as well.
Government insiders realise that, having ditched a series of policies in the first half of the parliament, the second half must be much more positive and produce results.
Tuesday's goal is a series of deliverable 'wins' for the SNP going into the general and Holyrood elections, with cabinet secretaries more clearly accountable for policies.
There is expected to be a focus on anti-poverty measures and social protection, as well as a commitment to independence, although no new concrete plan to secure it.
Mr Yousaf told the Record: “What we'll see is a PfG that says tackling poverty and growing our economy go hand in hand. If you grow that economy, you increase the tax base, you increase the revenue that you can spend on anti-poverty measures.
“Childcare will be absolutely central to my plans in terms of tackling poverty. In fact, I would say childcare is the perfect example of an initiative that is both pro-growth and anti-poverty.”
He also hinted at pay rises for childcare and adult social care staff.
He said: “One of the biggest challenges we have in early learning centre provision is workforce. So you will hear… plans around how we will attempt to bolster the workforce.”
He added: “There's just no recovery of the health service without recovery of the social care sector. And the number one issue… amongst our adult social care providers is workforce.” | United Kingdom Business & Economics |
A convenience store owner says he witnesses up to nine shoplifting incidents a day, with criminals who are "more brazen and aggressive".
Benedict Selvaratnam says it is because shoplifters know they are not a police priority.
His situation is being echoed in small shops across the UK, according to the Federation of Independent Retailers.
The group, which represents 10,000 shopkeepers, is calling for government help to tackle the problem.
It says the situation is worsening day by day.
Mr Selvaratnam, from south London, says his staff face both verbal and physical abuse.
He has run his family business, Freshfields Market in Croydon, for eight years and says he has seen a significant rise in shoplifting in the past year.
"We're getting it from mums who are putting products in prams, we're getting it from pensioners, children and teenagers coming in on bicycles.
"We've seen a big increase in organised gangs stealing to order, whether it's coffee, honey or meats."
In the past week, one of Mr Selvaratnam's employees was taken to hospital after being hit in the head with an iron nail. Another staff member was attacked with a stick of sugar cane.
Some female staff members have left the store over safety fears.
One woman, who doesn't want to be named, says she has been threatened when challenging shoplifters. She says they tell her, "I know what time you close the shop, so let's deal with this outside."
The woman now says she's scared to come to work. "I used to close [the shop] most of the time, but I'm not doing it much now because of those threats when I go outside."
A glass screen has been put up recently to protect cashiers from abuse, and 34 CCTV cameras have been installed inside the store with another 12 outside.
But that's not enough to deter criminals, says Mr Selvaratnam.
"We need more police presence, especially in the evenings."
He adds that incidents often go unreported because "the few times we have called the police, they haven't come".
Mr Selvaratnam thinks the situation is getting worse because the shoplifters know police won't attend. "[It] emboldens these criminals to continue doing what they are doing and others to follow," he says.
The Metropolitan Police told the BBC it was not "realistic" for the force to respond to every case of shoplifting because of demand, but that officers would be dispatched "where appropriate".
The Met added it was collaborating with shops across London to improve reporting of shoplifting.
Muntazir Dipoti, President of the Federation of Independent Retailers, says the situation is urgent.
"I know of members who fear for their lives inside the shops, and others who are making the decision to close up."
His organisation is calling on the government to provide independent shops with a £1,500 one-off grant to improve security measures.
"The big supermarkets have introduced body cameras, headsets and expensive equipment, but there's no way most independent retailers can afford that," he says.
Dame Sharon White, the boss of John Lewis, has told the BBC that shoplifting has become an "epidemic" in the past year..
Figures earlier this year from trade body, the British Retail Consortium (BRC), show retail thefts in England and Wales rose by 26% in 2022.
Its crime survey suggests incidents of violence towards shop staff have also been rising, with staff being threatened with weapons and physically assaulted in some cases.
The BRC previously told the BBC that high levels of theft cost retailers almost £1bn in the 2021 financial year.
A group of 10 larger retailers, including John Lewis, have agreed to fund a police operation called Project Pegasus, which aims to clamp down on shoplifting.
They will spend £600,000 on the project, which will use CCTV images and data from shops to create a target list of the most prolific offenders. This will then form a national shoplifting database.
Policing Minister Chris Philp told the BBC that the scheme will "help all retailers, not just the big ones" in identifying criminal gangs.
Retailers including Tesco, Co-op and Iceland have said they are spending heavily on anti-theft measures, including increasing the number of items with security tags and fitting staff with body cameras.
Waitrose and John Lewis are offering free hot drinks to on-duty officers, aiming to deter criminals by increasing police presence in stores.
However, this is not an option for Benedict Selvaratnam's store in Croydon.
"We can't afford to offer the police free drinks or food to encourage them to be in the shop," he says.
He says he has considered selling up, but that the offers have not been high enough to cover the investment he has made.
"It's like we have to accept that this is the price of running a small business," he says.
"Until things improve, we just have to stay here and try to deal with this ourselves." | United Kingdom Business & Economics |
(Bloomberg) -- One corner of crypto has shaken off a prolonged digital-asset slump to come within touching distance of an all-time high.
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The sector is liquid staking, which offers easier access to the rewards earned when tokens are pledged to help operate blockchains. DefiLlama data shows that the value of assets locked in liquid staking services has jumped 292% to $20 billion from a June 2022 low, when crypto was reeling from a crisis.
That’s helped to make liquid staking the biggest segment of decentralized finance, or DeFi, which lets people trade, lend and borrow without intermediaries via automated, blockchain-based software. Previously, lending was the top application of DeFi technology.
Liquid staking protocols such as Lido and Rocket Pool peaked in April last year with just over $21 billion of assets before sliding as the collapse of the TerraUSD stablecoin exacerbated a $2 trillion crypto-market rout. The prices of major tokens and interest in the bulk of DeFi services remain far below records set in 2021 and 2022, a sharp contrast with the recovery in liquid staking.
Staking has grown in popularity after being embraced by Ethereum, the most important blockchain commercially, as part of upgrades to the network over the past year. People who lock up Ether tokens to help operate Ethereum currently earn the equivalent of about 4% annually in the form of more coins. Rival blockchains such as Solana and Cardano also offer staking rewards.
The number of validators — participants who pledge coins and help to approve Ethereum transactions — rose almost 40% after a major related enhancement of the network in April, according to Steve Berryman, chief business officer at staking service provider Attestant.
Directly participating in staking involves complex software and hardware. In the case of Ethereum, it also requires locking up at least 32 Ether — equivalent to about $52,000 at present prices — for a certain period of time. Liquid staking protocols shoulder the technical burden, accept smaller investments and give users a version of pledged coins that they can deploy elsewhere.
Risks, Regulations
Kunal Goel, Messari research analyst, described the services as “the onchain equivalent of government bonds.” He said that “while they aren’t entirely risk-free, they represent lower risk and haven’t yet had any hacks or exploits.”
The rebound in liquid staking protocols comes amid a regulatory crackdown on crypto in the US, including on staking products from centralized exchanges that led the likes of Kraken and Bitstamp to discontinue the products there.
Other regimes have also taken a tough stance on staking. Hong Kong’s rulebook for digital-asset platforms is viewed as outlawing such products, while Singapore has banned them for retail investors.
“The regulatory crackdown around staking products offered by centralized exchanges has definitely helped liquid staking,” said Richard Galvin, co-founder at DACM.
Lido now ranks as the largest DeFi service based on the $14 billion of assets locked on the platform, according to DefiLlama. Lido’s native token has advanced 60% this year, exceeding the 27% increase in a gauge of the largest 100 cryptoassets.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
More than three quarters of U.S. small business owners believe that their company is equipped to handle any upcoming economic instability, according to a new poll.
The new survey of 1,000 small business owners revealed that increased interest rates and inflation are their top economic concerns for the remainder of 2023.
But despite those economic concerns, 72% of small business owners feel more optimistic now about the financial prospects of their company than they did at the beginning of the year.
The entrepreneurs have tapped into various financial resources to cope with the economic changes, including savings accounts and loans (61%) and raising prices (50%).
Conducted by OnePoll on behalf of Melio, the random double-opt-in survey found that 48% of those surveyed (which included a statistically significant amount of African Americans, Hispanic/Latinos, and women small business owners) have raised their prices by an average of 7% over the last six months.
But they are still reporting an increase in repeat business (66%), sales (63%) and number of new clients (56%).
Having an online presence is more important to small businesses than it used to be, which led to some of the changes made this year: 66% of respondents have increased their advertising and marketing efforts, 58% increased their digital presence, and more than half started selling products online.
“Small businesses are the foundation of the economy,” said Tomer Barel, Melio’s president and COO. “And, despite the challenges posed by inflation and interest rates, small business owners seem to adapt and demonstrate impressive agility and resilience.”
Beyond the importance of digitizing aspects of their businesses—like, inventory management (51%) and customer service (42%)—three-quarters feel that it is most imperative to accept forms of payment beyond cash—more than it used to be.
“Since the pandemic began over three years ago, small businesses are embracing new technologies that can help them take control over their finances and weather economic uncertainty,” said Melio’s CBO Prashant Gandhi. | Inflation |
Bank Of England May Leave Rates At 15-Year High
Investors are leaning toward the next move in the key rate being a cut, probably in the second half of next year.
(Bloomberg) -- The Bank of England is likely to hold the line on its “Table Mountain” strategy to keep interest rates at the highest level since 2008 after mounting evidence that the UK economy, labor market and inflation are weakening.
Economists and investors expect the Monetary Policy Committee to leave the benchmark lending rate at 5.25% for the second consecutive meeting, with new forecasts from the BOE thrust into the spotlight instead.
Investors are leaning toward the next move in the key rate being a cut, probably in the second half of next year. Traders will be looking for any hint of an easing in monetary policy ahead in new forecasts that are set to show a rising risk of recession with weaker growth and inflation expected in the near term.
Governor Andrew Bailey has pushed back against speculation over cuts, saying that discussion is premature while inflation remains well above the 2% target. The US Federal Reserve on Wednesday left open the prospect of a further hike despite growing bets the next move there will also be a reduction. The European Central Bank also put its hiking cycle on pause last week with President Christine Lagarde calling any speculation over a rates reduction “totally premature.”
For Prime Minister Rishi Sunak, high rates to tackle stubborn inflation are a headache ahead of an election expected next year after he pledged to boost the economy and cut price rises in half this year. The BOE’s decision is due at 12 p.m. London time, with a press conference led by Bailey following a half hour later. Here’s what to watch:
Decision and guidance
There’s been little in the data since September’s meeting that could shift views on the MPC. Chief Economist Huw Pill, speaking in Cape Town at the end of the summer, described a “Table Mountain” path for rates in its guidance in reference to the landmark looming over the city. That’s a heavy hint that rates will remain elevated for a prolonged period.
The MPC could repeat much of September’s guidance, noting that policy will stay “sufficiently restrictive for sufficiently long” to get inflation back under control.
What Bloomberg Economics Says ...
“The lack of alarmingly hot data releases since the Bank of England last met in September, points to rates staying on hold for a second straight meeting. The decision will likely be accompanied by a warning from the central bank that tightening will recommence if progress in its inflation fight either stalls or goes into reverse.”
—Dan Hanson and Ana Andrade, Bloomberg Economics. Click for the PREVIEW.
Should the BOE project that inflation will fall below its 2% target in the coming years, investors may make more bets on a rate cut. That could spark a rally in gilts and also dent the appeal of the pound.
Martin Weale, a former ratesetter and now professor of economics at King’s College London, said he remained concerned about wage growth and that “there are still material risks” of an inflation overshoot.
Guidance After September Decision
“Monetary policy would need to be sufficiently restrictive for sufficiently long to return inflation to the 2% target sustainably in the medium term, in line with the Committee’s remit. Further tightening in monetary policy would be required if there were evidence of more persistent inflationary pressures.”
—Bank of England minutes of Monetary Policy Committee meeting on Sept. 20.
Vote Split
The meeting is likely to once again expose divides at the BOE’s nine-member rate-setting panel. The MPC voted 5-4 for no change in September.
Since the meeting, the MPC has lost one of the hawkish dissenters with the departure of Deputy Governor Jon Cunliffe, who has been replaced by internal pick Sarah Breeden. She is seen as likely to vote with Bailey and the other internal policy makers on her first outing on the MPC. She also previously signaled her concerns over the potential impact of hikes on financial stability.
Forecasts
The BOE’s latest forecasts are likely to warn of a darkening near-term outlook, with many City of London economists braced for a recession.
Rising unemployment and the drag of higher interest rates are likely to depress the economy. In September, the BOE warned it now expects third quarter growth to be 0.1%, down from the 0.4% expansion projected in August. Recent surveys suggest the weakness also spilled over into the final quarter of the year.
There may be better news on inflation. UK consumer prices rose 6.7% in September, slightly lower than the 6.9% the BOE expected in August. Citigroup sees the figure dropping to 4.7% when October’s figures are released on Nov. 15.
“We expect the BOE to cut near-term growth and inflation forecasts, mirroring the weaker data flow,” said Robert Wood, UK economist at Bank of America. “We expect the Bank to raise growth and inflation forecasts at the two- and three-year horizons, reflecting lower interest rates and lower sterling.”
Mortgage Rates
Mortgage rates have eased since surging in the summer but remain stubbornly high, putting a dampener on activity in the housing market.
Even with the BOE halting its rate rises in September, the recent unwinding has only put a small dent in the rise in borrowing costs for homeowners after the most aggressive rate hiking cycle in generations. The average two-year fixed mortgage rate is still well above 6%, a near tripling since the start of 2022, Moneyfacts data shows.
The rise in Bank rate since the end of 2021 from 0.1% to 5.25% has added an average of £540 to monthly repayments for those on tracker mortgages, according to UK Finance.
Quantitative Tightening
The BOE stepped up the pace it is unwinding its balance sheet of bonds after starting the second year of its quantitative tightening program in October.
It announced in September that it will run off £100 billion ($121 billion) of bonds in the second year through sales and allowing debt to mature, up from £80 billion in the first year.
The BOE judges that the unwinding of the vast bond purchases after the financial crisis and pandemic has had little impact on the economy and bond yields. However, there are concerns over QT’s impact amid bouts of volatility on global bond markets in recent months with UK borrowing costs close to their highest level since 2008.
--With assistance from Greg Ritchie, Zoe Schneeweiss and Philip Aldrick.
©2023 Bloomberg L.P. | United Kingdom Business & Economics |
Lloyds Rejects Latest Bid By Barclay Family For U.K.’s Telegraph
Lloyds Banking Group Plc has turned down the latest bid from the Barclay family to reclaim the Telegraph newspaper, as it looks to reassure potential bidders in an ongoing auction process.
(Bloomberg) -- Lloyds Banking Group Plc has turned down the latest bid from the Barclay family to reclaim the Telegraph newspaper, as it looks to reassure potential bidders in an ongoing auction process.
The lender rejected a £1 billion ($1.2 billion) offer backed by a Middle East investor, according to a person familiar with the matter. The bank has told the family to either bid in the auction or return with a transparently funded offer for the full amount it owes.
Lloyds seized the Telegraph titles along with the Spectator magazine from the Barclay family in June to claw back debts, removing Barclay family members from their director positions and placing the businesses in receivership.
The Barclays — not related to the bank of the same name — bought the titles in 2004 for £665 million. The family did not immediately respond to a request for comment.
Goldman Sachs Group Inc. has been appointed by the receivers to run the sales process for the Telegraph Media Group Ltd. and the Spectator (1828) Ltd.
The politically influential titles have already attracted interest from media bidders. US billionaire and major Republican donor Ken Griffin and hedge fund manager Paul Marshall have discussed a potential bid for the Telegraph, people familiar with the matter said previously. News Corp. Chairman Rupert Murdoch bid for the Spectator as recently as two years ago, separate people have said.
Will Lewis, a former Telegraph journalist and a Prime Ministerial adviser, said in September that he’d lined up funding for a takeover of his ex-employer. Middle Eastern investors have held talks with Daily Mail & General Trust Plc about supporting potential offers from the rival news publisher.
The Financial Times reported the news earlier.
©2023 Bloomberg L.P. | United Kingdom Business & Economics |
(Bloomberg) -- Binance.US Chief Executive Officer Brian Shroder has left the crypto trading platform and been replaced on an interim basis by Chief Legal Officer Norman Reed, according to a company spokesperson.
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The departure comes as the company controlled by embattled digital entrepreneur Changpeng “CZ” Zhao is eliminating about one third of its workforce, or more than 100 positions, as a regulatory crackdown erodes its business. The exchange, which is formally called BAM Trading Services Inc., was started in 2019 for US users, who are prohibited from using Binance Holdings.
It’s the second round of job cuts this year at the Miami-based firm as it faces a series of mounting legal and operational challenges. In June, the US Securities and Exchange Commission accused Binance Holdings, Zhao and Binance.US with mishandling customer funds, misleading investors and regulators, and breaking securities rules. Zhao and the companies have denied the allegations.
In March, the US Commodity Futures Trading Commission charged Binance and Zhao with “willful evasion of federal law.” The Justice Department is probing Binance as well; it hasn’t accused the company of any wrongdoing.
Soon after the SEC action, customers of Binance.US became unable to deposit or withdraw dollars, a consequence of multiple banking partners cutting ties with the platform. The company has had to resort to an alternative method for Binance.US’s users to convert dollars into crypto.
Binance.US’s share of the global market has shrunk to about 0.6% from around 2.39% in April, according to Jacob Joseph, an analyst at researcher CCData. Monthly trading volume has fallen below early 2020 levels, he said.
“The actions we are taking today provide Binance.US with more than seven years of financial runway and enable us to continue to serve our customers while we operate as a crypto-only exchange,” a spokesperson said in a statement. “The SEC’s aggressive attempts to cripple our industry and the resulting impacts on our business have real world consequences for American jobs and innovation, and this is an unfortunate example of that.”
Binance.US laid off an unspecified number of workers after the SEC action, Bloomberg reported in June.
Binance Holdings has been shedding executives and other employees in recent months as well. This month, two executives overseeing regions including Eastern Europe and Russia left. In August, Binance lost its Asia-Pacific’s head and in July, a slew of executives including its chief strategy officer.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
A slowing economy may lead to a decline in sales of pricey beef cuts, but don’t look for any bargains just yet.
Market forces that have been building for a long time, including devastating droughts, will likely keep hamburger and steak prices steady — and relatively expensive.
In part, that’s because there’s less beef. A contraction in beef supplies “has been coming for a while,” said David Anderson, a professor in Texas A&M University’s agricultural economics department. “We’re starting to see the effects that we knew were going to be coming for a couple of years.”
When extreme drought hit the United States in recent years, farmers started to rapidly sell cattle because the dry conditions, along with higher feed costs, made it expensive or impossible to maintain their herds. That wave of sales, particularly of cows used to breed, has led to supply constraints this year.
“Tightening cattle supplies are expected to cause a significant year-over-year decrease in beef production, the first decline since 2015,” a March market outlook from the US Department of Agriculture noted.
“If we produce less beef, the pressure’s on for higher prices,” said Anderson. The “big unknown is going to be consumer demand.”
The beef supply tends to grow and shrink in roughly 10-year cycles, said Lance Zimmerman, senior beef analyst for the North American market with Rabobank. When supply shrinks, consumer prices tend to go up. But with people nervous about the economy, this year’s more complicated.
“The biggest thing that looms large, in all of our minds as market analysts right now, is do we have recession risk that we need to price into the market for next year,” Zimmerman said. “If that’s the case, beef prices may be steadier.”
And with food inflation stubbornly high, consumers are already cutting back on certain items, including beef.
Tyson (TSN), which processes about a fifth of the country’s beef, poultry and pork, noted a sales dip in beef in the three months ending December 31, 2022.
Beef sales “were down 5.6% compared to record high sales in the prior year,” said CFO John Tyson during a February analyst call discussing the quarterly results, noting that prices were down in the quarter due to “softer domestic demand for beef.” The company said that it expects its beef margins to fall this year because of the smaller domestic supply.
“Retailers through last year continued to push price on the consumer,” said Adam Speck, senior livestock analyst at Gro Intelligence. Now they have to answer a question as they plan for the year: Will demand be high enough to warrant raising prices even more?
“The answer is probably no,” said Speck. That may not be a huge relief, as beef prices are still relatively high. In 2022, fresh choice beef retailed for $7.59 per pound, according to March data from the USDA. That’s up from $7.25 per pound the previous year.
Stores may try to test the waters during barbecue season.
In the spring, “we’re at the bottom of our traditional seasonal demand,” said Bernt Nelson, an economist with American Farm Bureau Federation. Demand for beef typically dips after the holidays, and picks up when people fire up their grills in the summer, he noted. If demand remains strong, “we may see some higher beef prices,” towards the fall and later, Bernt said. | Inflation |
Hinduja Renewables on Monday said it has bagged a 250 MW solar project under a tariff-based competitive bidding by state-owned hydro power giant NHPC.
Hinduja Renewables on Monday said it has bagged a 250 MW solar project under a tariff-based competitive bidding by state-owned hydro power giant NHPC.
"Hinduja Renewables was awarded by NHPC the tender for putting up a solar capacity of 250 MW at the tariff rate of Rs. 2.53/kWh," the Hinduja Group firm said in a statement.
The consolidated project bid was for setting up a 3,000 MW Interstate Transmission System Connected Solar Power Projects anywhere in India.
Hinduja Renewables was one of the eight bidders for the capacity.
Sumit Pandey, the CEO of Hinduja Renewables, said, "With this winning bid, Hinduja Renewables would be able to reduce the carbon emissions equivalent of over 5,51,000 tons annually. Hinduja Renewables is well on its way to creating a multi-GW suite of renewables." Hinduja Renewables, part of the Hinduja Group, is an independent renewable power producer. | Renewable Energy |
Discover more from Politics with a lean
Labour Conference
Pledges and Propositions
This will be a quick round-up of what was promised, pledged or otherwise presented during the Labour conference, interspersed with my opinions on the pledges and my predictions about them, should I have any. I intend to do this exact thing for each of the conferences that have taken place recently, I’m merely starting with Labour here. Alongside these I intend to do much the same as each party releases their new manifesto moving towards the next general election.
Rwanda deportation scheme
Labour have pledged to scrap this highly controversial scheme, they continued that they would still do so “even if it works”. By all accounts a good sign, quite an unpopular scheme publicly, so I’m sure this pledge will go down well. Something to consider with this though, is that a lot of this is already in motion, it could be a situation where stopping this scheme may take longer than initially assumed.
£1.1bn NHS evening & weekend overtime plan
Now, the proposition here is to provide a further £1.1bn to the NHS to allow for further evening and weekend overtime shifts, with a view of reducing the currently sky-high waiting list. Frankly I don’t see this making much of a dent. There are already severe staff shortages across the NHS, asking what little staff are still there to double down on overtime is likely to cause more issues – remains to be seen how effective this plan will be, if at all.
Workplace Reforms
The main proposals here are a ban on zero-hour contracts, fire & rehire tactics and a fairly vague promise of “bolstering basic workers rights”. Banning zero-hour contracts and fire and rehire seems like an absolute win as far as I’m concerned, should have been done long ago but better late than never. As for the other vague promise I’m entirely unsure. They have also pledged to provide a boost to collective bargaining and work closely with unions moving forward.
Alongside the above they have pledged to close the gender pay gap, make work more family-friendly and tackle sexual harassment in the workplace. I’m not entirely sure what they’re going for with ‘family friendly’ but the other two pledges I can absolutely get behind. It’s also worth noting that Labour have committed to having all of these workplace reforms in place within 100 days of being in office.
Housing ownership and development reform
Labour have pledged to provide what they are calling “the biggest boost in affordable and social housing for a generation” as well as a proposing house planning system reforms, strengthening the rights of renters and abolishing both leasehold land tenure and ‘no fault’ evictions. Continuing they have proposed giving first chance preference to first time buyers on new developments in their communities as well as a comprehensive mortgage guarantee scheme. Details are a little light on a lot of this, “the biggest boost” is a fine enough sound bite, but there is very little meat on these particular bones right now. The rest looks good assuming it is actually put into place, a lot of these proposals are strong socialist policies which I’m happily surprised to see.
Miscellaneous pledges/proposals
Rounding these off then, they have pledged to slash government spending on consultants, something that has risen sharply the last 10 years. As well as a pledge to more robustly enforce the ministerial code on the use of private jets, a clear shot at Rishi Sunak who has been criticised a lot recently over his continued use of private jets. Something I am quite interested in, is a pledge to create a ‘covid corruption commissioner’ to help recoup about £2.6bn of taxpayers’ money that has been lost to corruption, mismanagement or otherwise. This will no doubt be an absolute win with voters as the overwhelming majority are in favour of clawing that money back, understandably. Finally, there were propositions to place a fiscal lock on ministerial spending, in essence stopping it from rising further, and also to speed up the planning system for major infrastructure projects, think transport, energy etc. Labour has also recently pledged to bring rail back into public ownership as well as “hand local councils control over bus services” though it remains to be seen how that will look.
My thoughts
Whilst it does seem like there is a considerable amount to work with here, it is always worth mentioning that a considerable amount of this may never see the light of day under a Labour government. Healthy scepticism aside, though, there is a decent mix of policies here that I think will be a good foundation to build upon with the release of a new manifesto moving towards the next general election. Should Labour win in the next election, as is currently being widely assumed, I will be keeping an eye out to see if the policies that were promised here within 100 days, will actually be delivered.
On top of the above, as somebody from Wales myself, the considerable lack of Welsh specific information of propositions was resounding. I’m aware that Welsh Labour conferences separately, but for many it’s clear that Starmer is just as much the head of Welsh Labour as he is the English branch and to have him not mention Wales even a single time could well be taken as a slight by many in Wales, perhaps rightfully so. | United Kingdom Business & Economics |
Axis Bank - Deposit Mobilisation Remains Key Focal Point: Systematix
Axis Bank has all the ingredients in place to be a leading banking franchise in India.
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.
Systematix Research Report
Axis Bank Ltd. hosted its ‘Analyst Day’ today to showcase its achievements and the various strategic projects currently underway at the bank. Key takeaways are:
Impact of the recent Reserve Bank of India regulations on unsecured lending: the bank expects the yields on these products to increase to compensate for the higher capital charge. Non banking financial companies/Fintechs are expected to be impacted due to higher capital requirements and anticipated higher cost of funds. The bank has always been cautious in terms of lending to NBFCs.
There is no plan to raise equity capital for the bank. Management believe current capital levels are adequate for growth (for next year) and protection (rating agency actions). Net CET1 accretion in H1 FY24 has been 54 basis points.
Deposit growth is important but so is maintaining current return on equity levels of 18%. Liquidity coverage ratio management has ensured that the bank didn't have to aggressively price its deposits.
Margins, which are currently at ~30 bps above its structural net interest margins of 3.8%, can be expected to remain above the 3.8% mark.
Overall, management presented the view of One Axis as a strong, future ready and all weather franchise. Key components of this franchise being viz, -
Self sufficient capital structure to fund growth,
Strong balance sheet and best in class asset quality metrics,
Structural improvement in quality of earnings with consistent delivery
Driven by higher growth in high risk-adjusted return on capital focus segments,
With significant improvement in in quality of deposit franchise,
With multiplicative forces to win across businesses,
Deliver world class customer experience through its SPARSH project ; build India's most profitable Bharat banking franchise ; leadership in Digital with best-in-class capabilities.
In our view, Axis Bank has all the ingredients in place to be a leading banking franchise in India. Over the forecast period, considering its credit-deposit ratio of 94%, strong deposit mobilisation would be the key to meet management's stated guidance of advances growth of 400-600 bps above sector average for FY24 maintain.
Taking into account the intense competition amongst the banks to raise deposits, margins of the bank should reflect the pressure on cost of funds (visible for the other larger private banks during Q2 FY24).
We retain our 'Buy' rating with Dec-24 target price of Rs 1,125 valuing the bank at 1.85 times December-25 adjusted book value per share.
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. | India Business & Economics |
The pandemic forced many people across the country to rethink their job and how they worked.
People have been speaking to BBC Radio Gloucestershire about how Covid prompted a career change they were "strangely" grateful for.
Rachael Willoughby, George Hill and Pete George all started their own business.
Ms Willoughby started a pizza business with her partner.
Mr Hill went from working in a gym to creating an online fitness business and Mr George fast-tracked his axe throwing business to run it full time.
Former gym worker, George Hill from Cheltenham, took his business online as a result of restrictions and "never looked back".
Mr Hill set up C&G fitness with his friend Callum Stewart and said they "basically had to make the best of a bad situation at the time".
"When Covid came around, lockdown happened and no one had a clue how long it would last.
"I was lucky as living at my parents I didn't have too many overheads."
The pair worked out a plan for an online business as "pretty much everything had moved online" and focussed their ideas on helping busy women get fit and healthy.
"We've been doing it for about two-and-a-half years and it's just grown and grown and grown."
He said the online approach is "much more beneficial for the client" as it offers more flexibility around a busy life and the pair are able to a wider "holistic" service including nutrition and support.
It has also allowed geographic flexibility with Mr Hill moving to London and Mr Stewart to Australia while growing their business.
Mr Hill said: "The lockdown and the Covid side was really rubbish but for me personally, what we've been able to create off the back of it, there's a lot of positives as well."
"Without the lockdown⦠I don't think online coaching would have been as popular... so I have a strange gratitude for it," he added.
Pete George, from Cheltenham, was working as an IT consultant when the pandemic hit.
He began setting up escape rooms in 2018 and ran it as a company in 2019 after it began doing well.
He added axe throwing as part of that, having learned a few years before but said it all "shut overnight" in 2020.
Mr George said originally the "idea of chucking in my relatively well paid IT job and the business I've been running for 20 years never really occurred to me.
"But I suppose Covid just said 'well you can just chuck everything to start again overnight so why not?," he added.
He now runs the axe throwing business Eat Sleep Axe and escape rooms full time.
Rachael Willoughby and Elliot Richmond from Cleeve, Tewkesbury, started making and delivering pizzas in lockdown.
"Elliot has been making pizza for years for friends and family and they've always said you should sell it," said Ms Willoughby.
The pair ran a software development company and were discussing how businesses would have to pivot during the pandemic.
Then they lost "almost 50% of our work through contract work".
Mr Richmond made a comment about how takeaways would "really boom" in the climate of lockdowns and they decided to give their pizza plan a go. CassaGee's pizza was born.
"In the early days it was literally six pizzas and now there are 17 pizzas and about 28 toppings..."
However, Mr Elliot said "we don't put pineapple on our pizzas".
Ms Willoughby said they have regular Italian customers who tell them "it's the best pizza outside of Italy".
Now they have it running "like clockwork", Ms Willoughby said they have decided to franchise the business.
"We've got this system we've honed down.. and in this climate it feels like a good idea to help people and show them how they can make dough from making dough," she added.
From hobby to business
Rachel Clark, from Longlevens, started teaching just before the pandemic so her training was broken up by the lockdown.
She said: "When I took my first [teaching] job it was the first September back after Covid so it was very stressful."
She started doing nails as an "escape" from her day job and said it was her son that made a permanent change more important.
"Before I had Teddy, I was very career focused or goal oriented and I'd do what it took to get there.
"But when we had the enforced lockdown I didn't have anything to do - I wasn't teaching onlineâ¦"
She said it was "much slower and more relaxed" and she had the time to spend reading and crafting with her son.
"Before I always knew he'd be in nursery full time as I was working full time and so he'd probably say his first word or walk the first time at nursery.
However, lockdown made her realise she did not want to miss those parts of his development and she decided to make her nail hobby into a business and Beauty Scape by Rachel was born.
She said her clients are often "busy mums", so much of her work is evenings and weekends and she does not need to work during school holidays.
"Having the freedom is worth it," she added.
She said: "I think lockdown changed a lot of peoples perspective about what was necessary and⦠a lot of peoples outlook on how life has to be.
"I think just work out what it is you want and try and work out a plan to get thatâ¦" she said. | Workforce / Labor |
The job market may be cooling from its pandemic-era highs, but there's one important metric where workers have finally notched a win.
After two years of crushing inflation — wiping out most workers' pay gains, American workers are seeing a reprieve. Pay is finally rising faster than consumer prices, according to data from the Bureau of Labor Statistics.
Average worker pay has grown at an annual rate of 4.4% for the last three months, beating the Consumer Price Index, which grew 3% in June and 4% in May.
The figures are encouraging to economists, who are increasingly optimistic the U.S. can avoid falling into a recession as wage growth remains strong enough to allow consumers to keep spending. Economists surveyed by the Wall Street Journal lowered their expectations of a recession in the next year to 54%, from 61%, while Goldman Sachs on Monday lowered recession probability to 20%.
Falling unemployment, a still-strong housing market and a "boom in factory building all suggest that the U.S. economy will continue to grow," albeit more slowly, Goldman wrote.
What's more, the recent fall in inflation looks to be long-lasting, as the cost of many goods and services that drove up inflation in 2021-22 ticks lower. Used car prices — a major driver of the cost surges in recent years — are falling as automakers produce more new vehicles and work out supply-chain issues. Just this week, Ford reversed a year of price hikes on its F-150 Lightning electric truck byon various models. Tesla has also announced several on its popular vehicles.
Nationwide, gas costs about $3.50 per gallon, down from a peak of $5 last year. Grocery costs are growing more slowly, with prices on some items, like eggs, since the start of the year. Rents have plateaued in many cities, and are beginning to fall in places like California and Florida, according to ApartmentList. And a report on digital spending by Adobe showed that online prices in June grew at the slowest rate in over three years.
"All in all, 'disinflation' is having its first annual anniversary, and more decline could be in store," Ben Emons of Newedge Wealth wrote in a recent note.
To be sure, many categories of spending are still seeing major price hikes. So-called core inflation, which excludes volatile food and energy prices, is growing at an annual rate of 4.8%. That's far faster than the Federal Reserve's 2% target, driven higher by burgeoning prices for services, such as travel, car insurance and child care. But the strong job market increases the odds the Fed can lower inflation without crushing the consumer.
"The sustained decline in inflation is encouraging news for the U.S. labor market outlook," ZipRecruiter chief economist Julia Pollak said in a note. "It increases the likelihood that the Fed will be able to pause rate hikes after one final July increase, and gradually lower rates through 2024, encouraging private sector investment to pick up again. It also increases the likelihood that U.S. workers will finally receive real wage increases and see their purchasing power expand."
for more features. | Inflation |
Prime Day 2023: 22,190 Orders Were Placed In A Single Minute, Says Amazon; Details Here
The 7th annual Prime Day 2023 sales event was held on July 15-16. Here are the highlights.
Amazon has said that the 7th edition of Prime Day was the biggest ever for Prime members, sellers, and brand partners this year.
In a statement, the company said that Prime members discovered joy through great deals, new launches, and blockbuster entertainment.
Thousands of sellers, brands and bank partners came together this Prime Day to help Prime members save over Rs 300 crore, Amazon claimed.
Amazon said that 1 in 3 orders in metros were delivered before Prime Day got over, and 1 in 2 orders across most tier 1 & tier cities were delivered in less than 2 days.
Highest number of same day deliveries were recorded this Prime Day than any previous Prime Day events.
"14% more Prime members shopped this year, making it the biggest Prime Day event in India. Prime members shopped for 45,000+ new product launches from 400+ top Indian and global brands," the company said.
Amazon Prime Day 2023 In Numbers
The 2023 Amazon Prime Day saw a staggering 22,190 orders getting processed in a single minute which is a new benchmark for a Prime Day event. Here are some highlights:
The large appliances category sold an appliance every 2 seconds during the event
There was a huge spike in premium electronics led by premium audio brands like Sony, Bose, and JBL where a noise-cancelling headphone was sold every 20 seconds
70% of demand for smartphones was from Tier 2 & 3 cities, with foldable smartphones seeing 25x growth among customers
Home appliances and kitchen products category had the highest sales recorded for mixer grinders, water purifiers, and water heaters
Toys recorded the highest ever single-day sales, with an average of 1.8 toys being sold every second—a 48% growth from last year
Over 1 lakh litres of cooking oil, 7,000 kgs tomatoes, and 23,000 kgs sugar were sold on Amazon Fresh, and over 600 brands grew by at least 2x during this time
Prime members ordered a new pair of shoes every 0.4 seconds, and purchased a handbag every 1.6 seconds which had a great discounts across top brands like Marks & Spencer, Tommy Hilfiger, Ray-Ban, Biba, and Levi's
30 TVs were sold every minute with premium 4K, QLED, and OLED TVs seeing the most demand.
Prime members enjoyed incredible savings on Amazon devices with customers buying a Fire TV, Echo (with Alexa), or Kindle device every 2 seconds. The Fire TV Stick and Echo Dot 4th Gen were among the best-selling products on Amazon.in during Prime Day
SMBs on Amazon.in received 20 orders every second during this Prime Day event. Over 90,000 SMB sellers received orders from Prime members across 19,000+ pin codes.
Over 15,000 SMBs saw their best ever sales during Prime Day 2023.
Amazon Prime Entertainment Unlimited
Prime Video released 12 new films and series out of which 8 were ranked within the top ten most viewed titles on Prime Video India during this time.
International films and series that debuted during Prime Day 2023 were enjoyed by viewers in 97% of all Indian pin codes. Alongside these, Amazon Music introduced 15 exclusive podcasts. | India Business & Economics |
Across the plains of America known as the Corn Belt, farmers are spending their days and nights nurturing, tending to and praying for the wellbeing of this common yet globally significant food.
Scott Haerr, who harvests 4,000 acres of corn every year (an area nearly five-times the size of New York's Central Park), is one. Inside a massive grain silo on his farm in western Ohio, the third-generation farmer examines corn kernels from last year's harvest. "That's some real good corn," he says, sifting through a handful.
But while the quality of last year's harvest may have been good, the quantity produced by US farmers was anything but.
Rising fertiliser and fuel prices saw the number of acres planted fall by 3.4m compared to 2021. On top of that, a drought in the western plains fuelled an increase in the price of US corn on the international market.
"We had a weather-reduced crop, and we had the Mississippi River drying up last fall and early winter that slowed our exports way down," Mr Haerr says. "Because of that, the price of corn went up which made us less competitive."
American farmers' hard work and technological expertise has cemented its place at the top of the pile when it comes to corn exports. Every year, tens of millions of tonnes are shipped from the US to more than 60 countries around the globe.
But its corn superpower status may be coming to an end. In fact, after decades at the top, it is on the verge of being overtaken as the world's biggest exporter of the crop.
Buyers in China - the world's biggest importer of corn - have been cancelling orders from the US, in large part because there are cheaper alternatives elsewhere.
In January, sales of US corn to China were as much as 70% below previous years' levels. And in May, China started buying South African corn for the first time. It is a troubling trend for US farmers.
It is not just China backing away from US corn: Reuters recently reported that exports to all destinations excluding China were at their second-lowest in two decades. Mexico, which buys about $5bn (£3.9bn) worth of US corn every year, is moving away from the genetically modified variety, a large amount of which comes from its northern neighbour.
One country alone stands to benefit from this trend - Brazil.
Farmers there have been converting swathes of agricultural land from pasture to corn fields in recent years, experts say. Brazil's additional advantage is that its farmers are able to harvest not one but two crops of corn a year.
"Last year in particular, they had a lot more exportable stock than we did here in the US," says Frayne Olson, a crop economist at North Dakota State University. "The longer-term trend is that Brazil is increasing its corn production, it's becoming a much more dominant player."
China has moved accordingly, increasing its orders of Brazilian corn significantly. The two countries have also signed a series of agreements that will allow more corn be shipped from Brazil to China.
The move by China to diversify food imports is likely spurred by a combination of factors, according to Harry Murphy Cruise, a China economist at Moody's Analytics. Aside from price advantages, increased tensions between the US and China are pushing Beijing to quickly diversify in case things deteriorate.
"Trade is a key tool in the arsenal of all policymakers," he said. "There is a potential that China is using trade as a form of economic coercion."
More on China-US relations
Mr Cruise said high-profile battles over things like semiconductors, electronics and batteries were not the only examples of how China has changed its trade relationship with the US.
"It's broader than that," Mr Cruise said, noting that China was looking to mitigate risk and shore up supply chains for critical goods.
"Food and livestock feed are about as critical as it gets," he said.
Back in the US, corn prices have been high for many of the same reasons most other products and services are expensive today: inflation. For farmers, the rising costs of machinery, seeds and farmland have eaten into their bottom line.
"When you look at the biggest differential in the cost of producing corn in the US versus Brazil or South Africa or Argentina, it's probably land," says Frayne Olson.
The price per-acre of land in Iowa, the largest corn-producing state in the US, increased 29% in 2021 and a further 17% in 2022, the highest on record. In Illinois, the second-largest producer of corn, farmland rent hit record prices last year.
Economists say, however, that Brazil's rise is not likely to have a major impact on the day-to-day lives of Americans - agriculture does not carry the same economic weight of decades past.
"Agriculture is important - food supplies are critical - but it's not a huge piece of the whole economy," says Mr Olson.
Farmer Scott Haerr, meanwhile, says he is not planning to reduce the number of acres of corn he plants, since the cost of fertiliser and fuel has eased from last year's highs.
"But we are ready to pivot, if we need to," he says. He believes there's little to be done to stop Brazil's rapid rise, but that doesn't mean American farmers are out of the export game.
"Indonesia is not importing any corn right now, but their potential for ethanol (produced from corn) growth is huge," he says. Earlier this year he and other Ohio corn farmers toured countries in South East Asia to hear first-hand what buyers want.
"We need to make sure we are trying to develop new markets," he says.
Additional reporting by the BBC's Derek Cai in Singapore | Agriculture |
Business NewsRBI Slaps Penalties Totalling Rs 10.34 Crore On Citibank, Bank Of Baroda, IOB
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RBI Slaps Penalties Totalling Rs 10.34 Crore On Citibank, Bank Of Baroda, IOB
A fine of Rs 4.34 core was imposed on the state-owned Bank of Baroda for violation of certain directions related to the creation of a central repository of large common exposures, and others, another release said.
RBI committee has noted that there has been a significant jump in financial inclusion-related activities. (Photo: Reuters)
The Reserve Bank on Friday imposed penalties totalling Rs 10.34 crore on Citibank, Bank of Baroda, and Indian Overseas Bank for contravention of various regulatory norms. The highest penalty of Rs 5 crore has been imposed on Citibank NA for non-compliance of norms related to depositor education and awareness fund scheme, and code of conduct on outsourcing of financial services, the RBI said in a statement.
The Reserve Bank on Friday imposed penalties totalling Rs 10.34 crore on Citibank, Bank of Baroda, and Indian Overseas Bank for contravention of various regulatory norms.
The highest penalty of Rs 5 crore has been imposed on Citibank NA for non-compliance of norms related to depositor education and awareness fund scheme, and code of conduct on outsourcing of financial services, the RBI said in a statement.
A fine of Rs 4.34 core was imposed on the state-owned Bank of Baroda for violation of certain directions related to the creation of a central repository of large common exposures, and others, another release said.
Chennai-based public sector lender Indian Overseas Bank was slapped with a Rs 1 crore fine for contravention of directions concerning loans and advances.
In all three cases, the Reserve Bank of India said, penalties are based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers. | India Business & Economics |
Ultra-wealth non-dom taxpayers have been hit by a record raid from HMRC amid fears that surging costs will drive wealth creators out of the country.
Non-doms and deemed domiciled individuals paid £12.4bn in tax in the financial year ending 2022, despite the fact that the number of people with non-dom status has slumped since the pandemic, according to official data.
This was up by 10pc year-on-year and the largest total on record since the statistics first began to be collected in 2008.
The tax take was up despite a drop in the number of non-doms compared to the pre-pandemic years, because rule changes introduced in 2017 mean more and more wealthy internationals are losing their tax perks.
People classified as non-doms for tax purposes – those who are UK residents but have a permanent home outside the country – pay British taxes only on income earned here for the first seven years. After this point, they pay an annual fee to benefit from this remittance. This starts at £30,000 and rises to £60,000.
In 2017, the Government changed the rules so that if a non-dom has been resident in the UK for 15 of the 20 years leading up to the year in which they are doing their tax return, their tax status changes to deemed domicile. This means that they have to pay UK tax rates on their worldwide income – putting them at risk of huge increases in their tax bills.
Lucy Woodward, a partner in the private wealth team at Saffery Champness, said the shift to becoming deemed domiciled has already pushed some wealthy internationals to leave the UK.
Chris Etherington, private client partner at RSM accountants, said the 2017 measures were “an attack on non-doms”. But he warned that much bigger blows are in the pipeline.
In the tax year after 2022, those deemed domiciled will also get hit by the Chancellor’s stealth tax raid on incomes and inheritance. Higher earners face a disproportionate hit from the tax threshold freezes because a larger share of their income falls into the top tax bracket.
Labour, currently leading in the polls to win the next general election, has pledged to scrap the non-dom system altogether.
Mr Etherington said: “The biggest concern among a lot of our clients is around what Labour’s proposals are in abolishing the non-dom status altogether. I think individuals who are globally mobile will take action if the domicile status was taken away.”
The number of new arrivals is already tapering off, he added.
Ms Woodward said she already has a high net worth client who says he will leave the UK if the non-dom system is scrapped.
She added: “It is also the public opinion against non-doms and that sense feeling unwelcome.”
Labour announced its plans after the media storm that followed revelations that Akshata Murty, the Prime Minister’s wife, had nom-dom status, which she has since revoked. | United Kingdom Business & Economics |
The number of people sleeping rough in England rose by more than a quarter last year, official statistics suggest.
On a single night in autumn, 3,069 people slept outside, 26% more than in 2021, says the Department of Levelling Up, Communities and Housing.
The rise follows four years of decreases in rough sleeping, partly due to initiatives during the pandemic.
Rising prices are forcing people who have never slept rough before on to the streets, say charities.
But, in Bristol, military veteran Simon Gilchrist blamed his drug addiction for keeping him on the streets. The 48-year-old fears he will be dead by 50.
"Either the streets will kill me or the drugs. People who say 'go get a job' don't know about addiction or why people take crack cocaine and heroin and alcohol," he said.
During the pandemic, the Everyone In initiative provided more than 37,000 rough sleepers with a place to stay.
But many were not found permanent homes and were at risk of being back on the streets.
The new figures suggest the number of people sleeping rough is 35% lower than the peak in 2017 - but 74% higher than in 2010.
Charities say they are seeing a difference in the type of people who have been seeking their help in recent months - many have never slept rough before.
Julie Dempster, from Bristol Outreach Services for the Homeless, puts it down to the rising cost of living.
"It's really frightening for those people who have not been homeless before," she said.
"The rental increase in Bristol is absolutely huge."
It is a common refrain in the city. The cost of a one-bed flat, for instance, has increased by almost 20% since 2019, to £950 a month.
However, the maximum level of housing benefit for such properties has been frozen for three years, at £695 a month.
"We're seeing more people starting to sleep rough who haven't had the experience of homelessness before," said David Ingerslev from homeless charity St Mungo's.
He said the rising cost of energy, fuel and food means "people aren't always able to prioritise their rents".
"They may choose to move out, to sleep in the car for a short time, hoping they'll be able to find something. It doesn't come to pass and so people end up sleeping rough," he said.
We meet 23-year-old Samuel Atkinson sitting outside the Julian Trust night shelter, waiting for the doors to open.
Samuel has been homeless for two months, after his relationship broke down, deciding to walk away from a "toxic environment" even though he had nowhere to go.
A trained bricklayer, he counts himself as one of the "lucky ones", as he has found cover in Bristol's bus shelter on nights he could not get a bed.
"It's warm, you feel secure. It's somewhere you can rest your head for a few hours," he said.
Despite his situation, Samuel has a smile on his face. He is due to move into his own flat in the next few weeks, and describes himself as "on an upward curve".
"It will mean the world to me to know I've got my own place... somewhere I can feel safe," he said.
The night shelter has room for 12 beds. All are pre-allocated to referrals from Bristol City Council but occasionally someone doesn't show up, allowing staff to offer any spare beds on a first-come, first-served basis.
On the night we visit, Samuel gets a bed but, behind him in the queue, Simon Gilchrist isn't so lucky.
Simon has been sleeping rough in Bristol for the past fortnight, having recently lost a hostel place. He has been homeless off and on for many years, a consequence of his drug addiction.
He often sleeps on concrete behind a hotel, using the hot air the air conditioning unit pumps out to try to ward off the cold.
"It gets into your bones," he said.
"I feel very alone." | United Kingdom Business & Economics |
- IMF's Kristalina Georgieva said that the public sector should keep preparing to deploy central bank digital currencies 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 Georgieva, managing director of the IMF, at the Singapore FinTech Festival 2023 on Wednesday.
- As of June 2023, only 11 countries have adopted CBDCs, acccording to data from the Atlantic Council.
SINGAPORE — Central bank digital currencies have the potential to replace cash, but adoption could take time, said Kristalina Georgieva, managing director of the International Monetary Fund on Wednesday.
"CBDCs can replace cash which is costly to distribute in island economies," she said Wednesday at the Singapore FinTech Festival. "They can offer resilience in more advanced economies. And they can improve financial inclusion where few hold bank accounts."
CBDCs are the digital form of a country's fiat currency, which are regulated by the country's central bank. They are powered by blockchain technology, allowing central banks to channel government payments directly to households.
"CBDCs would offer a safe and low-cost alternative [to cash]. They would also offer a bridge to go between private monies and a yardstick to measure their value, just like cash today which we can withdraw from our banks," the IMF chief said.
The IMF has said that more than 100 countries are exploring CBDCs – or approximately 60% of countries in the world.
"The level of global interest in CBDCs is unprecedented. Several central banks have already launched pilots or even issued a CBDC," the IMF said in a September report.
According to a 2022 survey conducted by the Bank for International Settlements, of the 86 central banks surveyed, 93% said they were exploring CBDCs, while 58% said they were likely to or may possibly issue a retail CBDC in either the short or medium term.
But as of June, only 11 countries have adopted CBDCs, with an additional 53 in advanced planning stages and 46 researching the topic, according to data from the Atlantic Council.
Referring to a 2018 speech by her predecessor Christine Lagarde, when the former IMF chief encouraged policymakers to follow the "winds of change" and explore the use of CBDCs, Georgieva said: "Five years on, I'm here to provide an update on that voyage."
"First, countries did set sail. Many are investigating CBDCs and are developing regulation to guide digital money developments," said Georgieva referring to the speech.
On Wednesday, the fund launched a CBDC handbook as a reference guide for policymakers around the world. Georgieva said many countries are investigating CBDCs and developing regulation to guide digital money developments.
"Second, we have not yet reached land. There is so much more space for innovation and so much uncertainty over use-cases," Georgieva told an audience which included industry experts, investors and journalists.
"In some countries the case seems dim today, but even they should remain open to potentially deploy CBDCs tomorrow. Why?" said Georgieva. "This is not the time to turn back."
"The public sector should keep preparing to deploy CBDCs and related payment platforms in the future. Fourth, these platforms should be designed from the start to facilitate cross-border payments, including with CBDCs," the managing director said.
Countries that have issued retail CBDC include the Bahamas, Jamaica and Nigeria.
Singapore's Monetary Authority of Singapore has said that cash is "generally incompatible" with the digital economy. In a 2021 report, the country's central bank said the demand for cash as a means of payment is set to decline further.
According to the BIS, using CBDCs for cross-border payments could lower the costs of obtaining, storing and spending foreign currency, depending on design and regulations.
Georgieva also said that artificial intelligence "could amplify some of the benefits of CBDCs" by providing accurate credit scoring and personalized support.
Demand for generative AI has boomed following the release of OpenAI's ChatGPT in November last year, which was estimated to have reached 100 million monthly active users within two months after launch.
"It could improve financial inclusion by providing rapid, accurate credit scoring based on various data. It could provide personalized support to people with low financial literacy," said Georgieva.
"To be sure, we need to protect personal privacy and data security, and avoid embedded biases so we don't perpetuate inequality but aim to reduce it. Managed prudently, AI could help," she added. | Banking & Finance |
- Summary
- Companies
- Italy trading at 50% discount to world stocks
- Domestic firms hit hardest by fiscal, growth outlook
- Some shares too cheap to ignore - investors
LONDON/MILAN, Nov 7 (Reuters) - Italian stocks are trading at their deepest discount in 35 years compared to world shares as investors fret over the fiscal outlook in one of Europe's most indebted economies, although some reckon the shares are too cheap to ignore.
While Italian equities (.dMIIT00000PUS) have historically been cheaper than global peers, their discount has now widened to 50%, the biggest gap since 1988, and has held at that level for a couple of months. This is twice as wide as the average gap seen over the past two decades.
Yes, Milan's blue-chip index (.FTMIB) has rallied this year as it is geared heavily towards banking stocks that have benefited from the steepest rise in euro area interest rates on record.
But domestically focused companies in sectors such as consumers and industrials have been hurt by an aging population, debt at over 100% of GDP and two decades of near-zero economic growth that was only briefly interrupted by a post-COVID rebound.
That has left Italian equities overall more cheaply valued than even battered UK shares (.dMIGB00000PUS), which are trading at a 33% discount to global peers.
Italy's domestic stock market "is not particularly an area I want to be exposed to," said Chris Hiorns, head of multi-asset and European equities at EdenTree, citing concern about Italy's fiscal outlook.
Recent cuts to economic growth and increases to budget deficit forecasts have revived concern about potential sovereign stress, pushing the premium investors demand to hold 10-year Italian bonds over safer Germany above 200 basis points (bps) last month .
That gap has narrowed but remains vulnerable. A test looms on Friday when Fitch reviews Italy's BBB credit rating and stable outlook.
"A change in the outlook cannot be ruled out, given lower growth, higher interest rate expenses and the deterioration in Italy's fiscal position," Barclays said in a note.
Goldman Sachs estimates that each 10 bps rise in sovereign spreads takes around 2% off Italian bank shares and 1.5% off the FTSE MIB index. It advises avoiding the blue chip index after its outperformance.
Italy's funding needs are being further complicated by its difficulties in meeting conditions set by the European Commission in return for billions of euros of post-pandemic recovery funds.
Conflict in Ukraine and in the Middle East meanwhile threaten to spark a fresh surge in energy prices and weaken growth.
The number of outstanding units in BlackRock's iShares MSCI Italy ETF has more than halved to 8.6 million from 18.9 million in October 2021. Its MSCI Europe ETF has seen the number of units fall by less than 10% over the same period.
"RIDICULOUS MULTIPLES"
While Italy's weak economic outlook and high debt suggest a significant re-rating of shares is unlikely anytime soon, investors expected some clawing back given just how deeply discounted some parts of the market are.
The FTSE Italia Star (.FTSTAR) index, tracking companies with a market cap of up to 1 billion euros ($1.07 billion), has fallen 10% so far in 2023 after last year's near 30% plunge. By comparison, the FTSE mid-cap index (.FTMC) is down 5% this year.
Smaller Italian stocks have been hit by outflows due to the end of a government-sponsored scheme to promote investment into small-sized domestic stocks, said Giuseppe Sersale, strategist and portfolio manager at Anthilia in Milan.
"Many companies are trading on ridiculous multiples. A window of value is opening up on small caps, which is worth seizing," he said.
Andrea Scauri, senior portfolio manager at asset manager Lemanik, said high visibility on earnings due to elevated rates and stronger balance sheets make Italian banks less vulnerable to debt jitters than before.
"If the spread widens, this will have a short-term impact," he said.
Banco BPM shares are trading at around 0.55 times its price-to-book value and Monte dei Paschi at 0.39 times, much cheaper than UniCredit (CRDI.MI), Italy's No.2 lender by market value and trading at 0.66 times, according to LSEG Datastream.
UniCredit shares are up almost 80% this year and among the best performing euro zone banking shares.
Fidelity International portfolio manager Alberto Chiandetti, said he was chasing opportunities in battered industrials and consumer sectors in the FTSE Italia Star index.
"In many cases, valuations have already factored in the economic slowdown, while not reflecting the value and growth that many of these companies will have in the coming years," he added.
Reporting by Joice Alves in London and Danilo Masoni in Milan, editing by Dhara Ranasinghe and Toby Chopra
Our Standards: The Thomson Reuters Trust Principles. | Europe Business & Economics |
- More than three in 10 Americans think credit cards are "dangerous" or "evil," according to a NerdWallet poll.
- But having at least one credit card and using it responsibly can be a financial benefit, especially for those looking to establish good credit, experts say.
- There are benefits and drawbacks to having more than one credit card.
Who'd think a little plastic rectangle could be associated with so much mystery and angst?
Yet, financial advisors and credit experts say the typical consumer should have at least one card.
More from Personal Finance:
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57% of people are uncomfortable with their level of emergency savings
"I would say two cards is optimum … and three would be maximum to keep finances simple," said Cathy Curtis, a certified financial planner based in Oakland, California, and a member of CNBC's Advisor Council.
The ultimate number depends on the consumer, experts said. Here are some tips to keep in mind.
Having a credit card — and using it responsibly — is a good way to start building strong credit, said Ted Rossman, senior industry analyst at CreditCards.com.
Establishing good credit is "essential" for qualifying for loans such as a mortgage or auto loan, and for other things such as buying a cell phone, renting a car or getting a job, the Consumer Federation of America notes. Strong credit also helps consumers qualify for lower borrowing costs.
Not everyone uses a credit card in a financially optimal way, however. Eighty-two percent of American adults had a credit card in 2022, according to the U.S. Federal Reserve. About half of them carried balances from month to month at least once in the prior year. Since credit cards often carry high interest rates, carrying a balance (i.e., not paying off a card in full each month) can add significantly to household costs.
Rossman recommends first-time cardholders get a card without annual fees and with zero-interest, at first, at least, and that they pay their balance in full and on time each month. It is important to make sure the interest rate will be relatively low after the initial no-interest offer runs its course.
There are virtues to sticking with just one card, experts said.
Among the biggest: There's a simplicity to keeping track of just one set of due dates and other key details such as card benefits, said Bruce McClary, senior vice president at the National Foundation for Credit Counseling.
"If you're limiting yourself to one card, it helps simplify the process of debt management," McClary said.
However, there can be drawbacks to having just one credit card. For one, not all businesses will necessarily accept your card brand.
"In those cases, in might make sense to have two different card types: Visa and Mastercard, for example," McClary said.
Similarly, a consumer who operates a business can separate their personal and business expenses by using two cards, he added.
Consumers can prioritize a solid all-around card as a primary one, experts said. A good "foundation" for users may be a card with no annual fee that pays 2% cash back on all purchases, for example, Rossman said.
A second would likely be based on how consumers shop and how various cards divvy up rewards and benefits, experts said. For example, frequent travelers may benefit from a card geared toward travel rewards and comes without foreign transaction fees.
"This is where you have to make some choices for yourself," McClary said. "You have to think about your daily life, where you shop and where you'll be most likely to redeem the points you're earning."
Websites such as NerdWallet and CreditCards.com can help determine the best reward card for you, McClary said.
In addition, having a second credit card, or more, can help build a person's credit utilization ratio, said Curtis, founder and CEO of Curtis Financial Planning.
This is the ratio of what consumers owe relative to their total credit limit. Credit utilization is an important determinant in one's credit score and having one that's too high can reduce your score.
Cardholders should keep their ratio under 30% across all accounts, experts said. So, in a basic example, a consumer with a $10,000 credit limit wouldn't want their balance to exceed $3,000.
Having more than one card raises one's overall credit limit, and with responsible use, can reduce one's credit utilization ratio.
"If a person needs more than one card to keep their credit utilization ratio low, then I would say that is a good reason to have more than one card," Curtis said.
But this is a balancing act.
Having too many cards can sometimes make users look like overeager borrowers and thereby reduce their credit score, even if they have low balances, McClary said. Lenders get the perception of a "compulsive borrower" if there are too many applications for credit in a short time frame, he added.
Spreading applications out — one or two in a six-month period, and no more than five in a two-year span — is generally safe, Rossman said. That includes applications for all types of debt.
Additionally, having multiple credit cards may add to the costs of carrying credit if they have annual fees, McClary said.
It's "critical" for consumers who are disorganized or tend to overspend and carry balances on their cards, instead of paying their balances in full each month, to limit their cards, perhaps to just one, Curtis said.
"If a person is more fiscally responsible, I see no harm in having more than one card," she said.
Generally, consumers should always strive to pay off balances each month, automate their monthly payments and secure a card with the lowest interest rate possible, she added. | Personal Finance & Financial Education |
FIRST ON FOX: A large bipartisan coalition in the House is introducing legislation Friday that would reverse a provision in the Inflation Reduction Act (IRA) targeting oil and gas producers.
The Promoting Domestic Energy Production Act — authored by Reps. Mike Carey, R-Ohio, and Vicente Gonzalez, D-Texas, and joined by more than a dozen fellow members — would aim to ensure the oil and gas industry is able to enjoy the same tax benefits as other capital-intensive industries. Specifically, it allows companies to receive tax deductions on intangible drilling costs (IDC).
"American energy independence is neither a right nor left issue, but one that should unite us all," Carey told Fox News Digital in a statement. "Our bipartisan legislation fixes a provision within the Inflation Reduction Act that unfairly penalizes America’s energy producers."
"At a time of sky-high inflation, the American people need any help they can get when it comes to lowering the cost of energy," the Ohio Republican continued.
The Inflation Reduction Act, President Biden's $739 billion climate and tax package passed last year, imposes a book minimum tax on American companies. However, while companies in most industries can still reduce taxable income by the amount of depreciation deductions received under corporate tax, oil and gas companies are not able to do so.
IDCs, which account for about 85% of oil and gas exploration costs like labor and safety costs, are not eligible for accelerated cost recovery deductions allowed for tangible personal property under the IRA. As a result, the IRA’s book minimum tax has led to American oil and gas producers experiencing the third-highest tax hike compared to 30 different industries.
"Our country must be ready to face the energy challenges of the next few decades," Gonzalez said in a statement shared with Fox News Digital.
"This commonsense bipartisan bill promotes our nation’s domestic energy production capabilities — ensuring we keep and create American jobs, lower energy prices, and decrease our dependence on foreign energy sources," he said.
According to Carey's office, IDC tax deductions have been included in the U.S. tax code for decades due to the costly and risky nature of oil and gas exploration.
And such deductions aren't subsidies, his office added, because IDCs don't reduce overall taxes paid. Instead, they are designed to allow companies to recover costs for future investment.
The legislation, meanwhile, is the latest effort to chip away at the IRA which passed in August 2022 along party lines. Republican lawmakers have set their sights on billions of dollars earmarked under the law for various green energy projects, funds the Biden administration is racing to dole out to avoid a future GOP Congress or administration from clawing it back.
However, the Promoting Domestic Energy Production Act introduced by Carey and Gonzalez could represent the effort chipping away at the IRA with the highest likelihood of success. The bill could also be included in a broader tax package when Congress returns from its summer recess.
In addition to Carey and Gonzalez, Reps. Henry Cuellar, D-Texas, Alex Mooney, R-W.Va., Ryan Zinke, R-Mont., Dan Meuser, R-Pa., Greg Pence, R-Ind., and Tom Cole, R-Okla., who chairs the House Rules Committee, signed onto the bill. | Energy & Natural Resources |
A Tale of Two Retirements: Why CEOs Get Bigger Retirement Subsidies Than the Rest of Us
Sarah Anderson | Scott Klinger
Introduction:
In the eight years we’ve been analyzing the retirement divide, we’ve seen ordinary workers struggle with rising insecurity while corporate executives enjoy ever larger gilded nest eggs.
One largely overlooked factor in this disparity? Our tax code for government retirement subsidies gives preferential treatment to the wealthy corporate executives who need it least.
Ordinary employees with access to 401(k) plans face strict limits on the amounts they can set aside, tax-free, for their golden years. Most senior executives of large corporations, on the other hand, have unlimited tax-deferred compensation accounts. Often called “top hat” plans, these special perks for executives are growing rapidly.
From a policy point of view, no rational argument exists for allowing certain members of society to shelter unlimited amounts of compensation from taxes simply because of the kind of work they perform. It’s especially obscene because many corporations pay their workers so little that employees can’t afford to contribute to their retirement plans in the first place.
This report explains that double standard, highlights the large low-wage corporations where the retirement divide is starkest, and lays out how to make the system fairer for the workers who make these companies so valuable in the first place.
Key Findings
“Top hat” plans offer the rich one more way to avoid paying their fair share of taxes.
- The top five executives at S&P 500 firms held a combined $8.9 billion in special tax-deferred accounts at the end of 2021. Such perks became even more common over the past year.
Low-wage employers have among the largest deferred compensation accounts while many of their workers can’t afford to contribute to 401(k) plans.
- At more than 20 low-wage employers, executives have sufficient deferred compensation funds to generate monthly retirement checks larger than their workers’ median annual pay.
- Walmart CEO Doug McMillon held more than $169 million in his deferred compensation account at the end of 2022 — enough to generate a monthly retirement check worth more than $1 million.
- 46 percent of Walmart workers have zero balances in their company 401(k)s.
- Median pay at Walmart is just $27,136, meaning half of their 2.1 million employees make even less.
- Hyatt Hotels Board Chair and billionaire Thomas Pritzker is sheltering $91 million from taxes in his deferred pot.
- 36 percent of the hotel chain’s employees have not been able to set aside any funds in their 401(k) accounts.
- Half of Hyatt employees make less than $40,395.
- 53 percent of eligible participants in Home Depot’s 401(k) plan have zero balances.
- Meanwhile, former CEO and current Board Chair Craig Menear is sitting on $14.8 million in deferred compensation — enough to generate a monthly retirement check three times larger than the company’s median worker pay of just $30,100.
As ordinary families struggle with rising housing costs, real estate executives are sitting on massive tax-sheltered funds.
- Paul Saville, Executive Chairman of NVR, the owner of Ryan Homes, has the fattest “top hat” account in the S&P 500.
- The $488 million in his account at the end of 2022 is enough to generate a $3 million retirement check every month for the rest of his life.
- That’s 1,514 times as much as a typical American retiree could expect to receive every month, based on the average U.S. Social Security benefit and median 401(k) accounts.
- Two leading rental apartment corporations, Camden Property Trust and AvalonBay Communities, are also near the top of the “top hat” list.
- At Camden, two executives have more than $80 million each in their deferred accounts while the Executive Chair of AvalonBay has $23 million.
Health care executives have amassed huge deferred compensation accounts, buoyed by taxpayer investments
- The CEO of Centene, the nation’s largest Medicaid provider, had the second-largest “top hat” plan in the S&P 500 in 2022, valued at $328 million.
- Fueled by COVID-19 vaccine profits, Pfizer CEO Albert Bourla enjoyed a 37 percent increase in the value of his deferred compensation account over the past year, from $29.5 million to $44.4 million at the end of 2022.
The deferred compensation double standard is widening the retirement divide
- Among S&P 500 CEOs with tax-deferred accounts, the average balance at the end of 2021 was $14.6 million.
- Nationwide, just 35 percent of working-age adults have tax-deferred 401(k)-type defined contribution plans through their employer and another 13 percent have defined benefit or cash balance plans.
- Among S&P 500 CEOs with company-provided retirement assets (either or both a “top hat” plan and a pension) the average balance at the end of 2021 was $19.4 million.
Obscene Retirement Divides at America’s Low Wage Employers
Recommendations: How to Narrow the Divide
1. End the double standard in government retirement benefits.
Corporate executives should be subject to the same rules that govern the retirement assets of the people they employ. The 2020 CEO and Worker Pension Fairness Act (S.3341), for example, would revise Section 409A of the tax code, which currently allows executives to shelter unlimited amounts in accounts where their money can grow tax-free for years and years until they withdraw the funds. Under this bill, executives would owe taxes on their compensation when it vests.
Revenue from the bill, estimated at $15 billion over 10 years, would be transferred to the Pension Benefit Guaranty Corporation to shore up multiemployer pensions, plans negotiated by two or more employers with one or more labor unions.
2. Expand Social Security and require CEOs to pay their fair share.
To narrow the retirement divide, we also need stronger labor rights, a federal minimum wage increase, expanded defined benefit pensions, and other pro-worker policies so that ordinary Americans can afford to save more to ensure financial security in their golden years.
Perhaps most importantly, we need to expand Social Security. Funding for expansion could come from lifting the wage cap on payroll taxes so that CEOs and other high earners pay roughly the same share of their total income into the Social Security fund as ordinary workers. Under the current wage cap of $160,200, people who make more than $1 million a year stop paying payroll taxes in February, while most working people pay all year.
Across-the-board Social Security benefit increases, combined with targeted increases for low-income workers and other vulnerable groups, would make an enormous difference in American seniors’ quality of life.
3. Cap retirement benefits for major federal contractors and subsidy recipients at the level received by the U.S. president.
Taxpayer money should not be used to widen the retirement divide.
The executive branch should wield the power of the public purse to demand that companies receiving large federal contracts and subsidies not provide executives retirement benefits that are worth more than what the president of the United States receives. Former presidents receive a pension equal to the salary of a Cabinet secretary, currently set at $235,600.
When Marillyn Hewson retired as CEO of mega-contractor Lockheed Martin in 2020, she had $63.2 million in her deferred compensation plan and $54.5 million in her pension.
4. Increase retirement benefit transparency.
In researching this report, we were frustrated by the lack of publicly available data needed to get a clearer picture of employer-provided retirement benefits and how much they are actually helping workers prepare for their golden years. We recommend requirements to disclose:
Median 401(k) plan balances: Using companies’ Form 5500 reports, we could calculate the average balance in their 401(k) plans. But given how top-heavy these accounts are, it would be much more revealing if corporations were required to report median account balances.
Unclaimed matching funds: Many companies boast of their matching benefits, but these are virtually meaningless if workers are paid so little they can’t afford to save enough to take advantage of this perk.
CEO-worker retirement benefit ratio: Publicly held corporations are required to report the ratio between their CEO and median worker pay. These pay gaps are staggering. But the CEO-worker retirement divide is no doubt even wider. It would be most revealing if they were required to report the estimated monthly retirement check the CEO and other named executives can expect compared to the estimated retirement check for the firm’s median worker.
5. Tax excessive CEO pay.
One way to reduce executive deferred compensation is to reduce executive compensation. The Tax Excessive CEO Pay Act would encourage corporations to lower executive pay levels and lift up worker wages.
Under this bill, the wider a company’s gap between CEO and median worker pay, the higher their federal corporate tax rate. Tax penalties would begin at 0.5 percentage points for companies that pay their CEO between 50 and 100 times more than their median worker. The highest penalty would apply to companies that pay top executives over 500 times worker pay.
Companies with pay gaps of less than 50 to 1 would not owe an extra dime. Similar taxes are already raising revenue in two cities, San Francisco, California and Portland, Oregon. | Personal Finance & Financial Education |
Shoppers stocked up on wine, fresh cream and pastry over King Charles's coronation, with sales of those products soaring, figures suggest.
Research firm Kantar said people "got into the spirit" of the occasion and had a go at making the official Coronation quiche.
It also said food inflation ticked lower in the four weeks to the middle of May, but remains "incredibly high".
At 17.2%, it is still the third fastest rate Kantar has recorded since 2008.
Inflation is the rate at which prices are rising. A drop in inflation does not mean prices are falling, but just that the rate of increases is slowing.
Chancellor Jeremy Hunt is meeting food manufacturers on Tuesday to discuss the cost of food and look for ways to ease the pressure on households.
Fraser McKevitt, head of retail and consumer insight at Kantar, said the fall in grocery price inflation was "without doubt welcome news for shoppers but it is still incredibly high".
Rising food prices are helping to fuel stubbornly high inflation, which hit 10.1% in March. The latest official figures on Wednesday are expected to show inflation fell during April.
Despite the price pressures, people made the most of the extra bank holiday this month, Kantar's research suggests, with an extra £218m passing through tills during the week of the Coronation.
Sparkling and still wine proved popular, with sales rising by 129% and 33% respectively.
People also stocked up on ingredients to make the official Coronation quiche with sales of chilled pastry soaring by 89%, while fresh cream sales were up by 80% and frozen broad beans by 57%.
"We'll have to wait and see whether it becomes as much loved as its 1953 counterpart Coronation chicken and cements its place on the British picnic and garden party menu," Mr McKevitt said.
Shopping around
Food prices have surged in the last year after soaring energy prices drove up the cost of production and supply chains were disrupted.
Wholesale prices have been falling, but there is a time lag before that feeds through to prices on supermarket shelves.
Last week, the prime minister held a food summit at Downing Street, and on Tuesday, the chancellor will meet food manufacturers to discuss the persistently high prices.
Mr Hunt will also meet the Competition and Markets Authority about the scope of its investigations into the fuel and grocery markets.
According to Kantar's data, this is the second month in a row that like-for-like grocery price inflation has fallen.
But households are still facing an increase of £833 to their annual grocery bills if they do not "shop in different ways", Mr McKevitt said.
Shoppers are finding ways to save money, including by opting for supermarkets' own-brand equivalents, he said.
He added that supermarkets are battling to offer value to shoppers to lure them through their doors.
"In the fierce contest for market share, eyes have been on the dairy aisle in particular, where the average cost of four pints of milk has come down by 8 pence since last month," he said.
"Prices are still much higher than they were 12 months ago, at £1.60 currently versus £1.30 last year, but retailers know just how important it is to offer even small savings on staple products like milk to get customers through the door."
In April, Aldi, Lidl and Asda joined rival supermarkets Sainsbury's and Tesco in cutting the price of milk.
While the drop will be welcomed by people struggling with higher living costs, milk still costs more than double the average price before Covid.
Taken as a whole, Waitrose benefited from a sharp uplift in sales in the week of the coronation, while Aldi was the fastest growing grocer this month, according to Kantar. | Inflation |
The governor of the Bank of England, which has raised interest rates to a 15-year high, has said the UK labour market and not Brexit is to blame for stubbornly high inflation.
Andrew Bailey said the tight jobs market - with near-record low unemployment, more than a million jobs vacancies and wage growth of 7.2% - was the reason the UK inflation rate is higher than both the US and Eurozone.
While the US has brought inflation down to 4%, and the twenty countries using the euro recorded a price rise rate of 6.1% earlier this month, the UK has grappled with persistently higher levels.
The latest official figures show the consumer price index measure of inflation defied expectations and remained at 8.7%.
But that is not because of Brexit, Mr Bailey told the European Central Bank (ECB) forum on central banking on Wednesday.
Instead, he pointed to the number of people who left the workforce after COVID-19 and are classed as economically inactive - neither looking for nor in work.
He said: "I think more of it is to do with the response to COVID, frankly. We saw people come out of the labour force in COVID, other countries tended to see that reverse more quickly and more strongly than we've seen in the UK."
There were a record number of people out of the workforce because they are long-term sick last year, according to data from the Office for National Statistics.
"We are seeing some reversal of that now but we're still not back to where we were pre-COVID. That is causing our position in the labour market to be very tight," Mr Bailey said.
A shrunken workforce has led to competition for staff and higher wages.
Many employers are retaining and planning to keep staff in the event of a downturn because of their concerns over recruitment, Mr Bailey said he has been told by businesses across the country.
Increased inflation means consumers facing higher prices, on everything from fuel to food.
On the potential for further interest rate rises, amid some market expectations this week that the base rate set by the Bank of England could reach 6.25%, Mr Bailey said: "Well, we'll see."
He added: "We can't make promises about future interest rates but based on where we stand today, we think bank rate will have to go up by less than currently priced in financial markets."
The bank has increased interest rates in an attempt to bring inflation down.
The ECB event was attended by the head of the US and UK central banks. Both Mr Bailey and ECB president Christine Lagarde said they discussed interest rate decisions.
"We do talk a lot and I think it's important," Mr Bailey said. "It's particularly important at the moment because shocks are global... we do see each other quite a lot."
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The role of artificial intelligence at the Bank of England was also raised with Mr Bailey, who said the organisation is looking at how AI will affect the economy and how it can be used in its analysis and operations.
The bank is having to devote "quite a bit of time" to the potential of AI, he said.
"We're looking at it with very open eyes," he added. "You can see the strengths and the current weaknesses of it and of course it moves very rapidly." | United Kingdom Business & Economics |
The Conservative Party must be “decent and humane”, the justice secretary has said.
It come as the chancellor is considering real-terms cuts to benefits in the government’s autumn statement.
Alex Chalk, a moderate Conservative MP appointed justice secretary in April, urged his colleagues that Conservatism must provide support to the most disadvantaged in society, adding.
This appears to put Chalk at odds with the chancellor, Jeremy Hunt, who is weighing real-term cuts to benefits.
Hunt is reportedly considering capping benefit rises next April to free up cash for tax cuts ahead of the general election.
According to a report from Bloomberg, which cited people close to Hunt, real-terms benefits cuts were among cost-saving options being drawn up for the chancellor before the autumn statement, scheduled for 23 November.
It would see the government break with the tradition of lifting working benefits in line with inflation.
Asked by Sunday Morning With Trevor Phillips on Sky News if he would be comfortable with the plan, Chalk said: “We must do everything we can for the most disadvantaged in society. That is why we put up the benefits by 10.1 per cent and also universal credit, but also pensions as well.
“We want to ensure, I will want to ensure, my colleagues will want to ensure, that we are decent, humane and we want to support people.”
Phillips replied: “I am taking that as a no.”
Chalk responded: “Take it as you like.”
Although a source subsequently told the Times newspaper that Chalk was not in fact expressing a view on the plans and that it was a “matter for the chancellor”.
Speaking to broadcasters at the G20 summit in Delhi, prime minister Rishi Sunak declined to “speculate” about Hunt’s plans ahead of the Autumn Statement when asked if he could guarantee benefits would rise with inflation.
Speaking to broadcasters at the G20 summit in New Delhi, the PM said there was a legal process which was worked through “every year to do benefits uprating and a whole host of other things”.
“And those decisions are announced at the Autumn Statement, that’s entirely normal”, he added.
However, the PM did commit to the ‘triple lock’ on pensions, which sees the state pension rise each April by whatever is highest out of average earnings, inflation, or 2.5 per cent | United Kingdom Business & Economics |
Remaining supplies of British-grown leaks will be eaten up by April, growers are warning, compounding the shortage of other fruit and vegetables such as tomatoes, cucumbers and peppers.
The "most difficult season ever" has been blamed on high temperatures and a lack of rain, followed by a period of cold weather.
It comes in the same week the National Farmers' Union warned on Sky News of a risk of "rationing", shortly before supermarkets began limiting the sale of tomatoes and other vegetables due to both a lack of imports and high energy costs impacting British harvests.
Meanwhile, a cereals farmer warned the same problems from energy prices were brewing for other crops.
Environment Secretary Therese Coffey said on Thursday that we should cherish British produce, perhaps including turnips, though added that "consumers want a year-round choice".
But some local, seasonal vegetables are getting harder to come by as the Leek Growers Association said shoppers will have to rely on alliums grown abroad through May and June.
They warn that some people may even have to go without traditional British-grown leeks on St David's Day on 1 March, relying instead on imported leeks to make traditional dishes such as Welsh cawl, leek and potato soup or a Wrexham bake.
"Leek farmers are facing their most difficult season ever due to the challenging weather conditions," Tim Casey, chairman of the Leek Growers Association, said.
Read more:
These vegetables could be rationed this year
Fish and chips 'yet to reach price peak'
"Our members are seeing yields down by between 15% and 30%.
"We are predicting that the supply of homegrown leeks will be exhausted by April, with no British leeks available in the shops during May and June, with consumers having to rely on imported crops."
Leeks are usually sown in spring and harvested from early autumn through to late winter.
Much of England and Wales suffered a prolonged drought last summer amid record heat, made 20 times more likely due to climate change, according to scientists.
East Anglia, Devon, Cornwall and the Isles of Scilly remain in drought status.
Andrew Blenkiron, a root vegetable farmer in Suffolk, said he is planning to reduce the size of his crop this season by 300 acres in case of more hot and dry weather like last year.
Leeks are used to celebrate Wales' national day in memory of a battle in 640 AD, when King Cadwallader defeated the invading Saxons in a battle in which the Welsh army distinguished themselves by wearing leeks on their helmets.
The National Drought Group has said the country is one hot, dry spell away from plunging more areas into drought conditions.
"We dare not take the risk of planting these crops that demand volumes of water through the summer if we can't guarantee that supply," Mr Blenkiron said.
"So we've had to back off. And I would suggest that's fairly common across certainly East Anglia."
The extra watering during last year's heat "depleted our reservoir stocks and... increased the costs significantly" just as electricity prices also soared amid the energy crisis, he added.
"So it was a real double whammy."
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The show investigates how global warming is changing our landscape and highlights solutions to the crisis. | United Kingdom Business & Economics |
Everyone loves seeing growth in their portfolio. However, a good year of investing doesn't necessarily indicate a sound long-term investment strategy. Generating sufficient retirement income means planning ahead of time but being able to adapt to evolving circumstances. As a result, keeping a realistic rate of return in mind can help you aim for a defined target. Many consider a conservative rate of return in retirement 10% or less because of historical returns. Here's what you need to know.
Need help planning for retirement? A financial advisor can help you manage your portfolio, figure out how much income you'll need and assist in other important decisions.
What Is a Realistic Rate of Return for Retirement?
Understanding a realistic rate of return will help you create an accurate retirement plan. However, doing so requires diving deeper than the nominal rate of return, which is the income generated by your investments before accounting for administration fees, taxes, and inflation.
Focusing on the nominal rate of return can give you a false idea of how much income you'll receive from your investments. Instead, the real rate of return will help you understand how much money you'll have in your pocket in retirement.
For example, say you invest in a fund that historically provides an 8% nominal rate of return. However, the fund has a 0.5% management fee, and inflation is 3%. Therefore, you subtract 3.5% of the return before it hits your wallet. This means your holdings are actually generating a 4.5% return. So, if you invest $100,000, you'd see a real return of $4,500 due to fees and inflation.
Then, if your retirement account isn't a Roth account, you'll also pay income taxes. Depending on your tax bracket, you'll would pay between 10% and 37%. As a result, the 8% rate of return is a surface-level indicator of the investment's performance. In an environment with high inflation and taxes, your real return could be next to nothing.
That said, investments can still be an excellent source of retirement income. For example, the stock market has provided about a 10% return over the last 50 years, as seen specifically with the S&P 500. Adjusted for an average inflation rate of 3%, that's a 7% return before administration fees (which you can keep low by finding an inexpensive investment firm) and taxes (which vary from person to person).
Factors That Determine Your Rate of Return in Retirement
Your rate of return is also subject to factors beyond taxes, fees, and inflation. They vary due to individual circumstances and preferences. These are the key factors to pay mind to:
Risk Tolerance
High returns come with high risk when investing. As a result, younger investors tend to have more risk tolerance because they can make up for early losses. However, your risk tolerance usually drops as you age and enter retirement. After all, seeing your $1.5 million portfolio drop 20% a week before retirement can raise concerns about whether your nest egg will be sufficient.
Therefore, it's crucial to note the stage of life you're in and how much risk you can handle. For example, a conservative investor may want to allocate more of their portfolio to bonds, even if they have decades before retirement.
Investment Types
Likewise, your investment types will affect your returns. For instance, you might choose two or three of the following assets to create your nest egg:
Stocks
Bonds
Each of these investments comes with its particular rate of return, fees, and unique features. For example, life insurance provides a payout to your beneficiaries upon your death, while certificates of deposit last up to five years before you need to renew them. Therefore, your choice of asset type will influence your income streams and the income level you'll expect in retirement.
Retirement Timeline
When you retire also impacts your portfolio's rate of return. For instance, those who retired in 2022 likely did so when their portfolios were suffering (the S&P 500 fell by approximately 19%). However, those with plans to retire in 2023 and onwards will have a chance for their investments to recover before relying on them for investment income. Therefore, when you retire can determine your investment's success as much as your asset selection.
Fluctuating Returns
On that note, realizing that even historically reliable indexes like the S&P 500 have fluctuating returns is essential. In other words, a stock blend with a 15% return last year might take a -10% dive this year. While this dynamic complicates retirement planning, it's best to look at an asset's return over time to understand how it may benefit your portfolio. This way, you'll get an idea of how it performs over the long haul. Just keep in mind that past performance doesn't guarantee future results.
Annualized vs. Compounding Returns
Whether your returns compound or not puts another wrinkle in retirement planning. Specifically, compounding returns means reinvesting your earnings. A savings account works the same way. Your bank provides an interest payment each month, which combines with your principal and earns more interest in the future.
That said, your retirement account will provide compounding returns until you retire and begin withdrawing money. In other words, if your nest egg grew at a rate of 7% over your career and reached $1 million, it did so by compounding your returns.
However, you'll use that $70,000 to live on during retirement instead of adding that money on top of the pile to be reinvested. As a result, differentiate between annualized and compounding returns when you need income. Otherwise, you'll get a false sense of how healthy your portfolio will be 10 years into retirement.
Historic Rates of Return for Different Asset Classes
As mentioned previously, returns vary over time. Therefore, it's helpful to review how they have performed through the past decades.
For example, stocks are profitable but volatile. The S&P 500 returned 37.2% in 1995 and 37.39% in 2013, but it dipped to -37 in 2008 and -19.64% in 2022.
In addition, J.P. Morgan reports annualized returns for numerous asset classes. For example, it reported the 10-year annualized returns for the following from 2012 to 2021:
REITs: 12.2%
Single-family homes: 7.8%
Bonds: 2.9%
Small Cap stocks: 13.2%
60/40 stock/bond blend: 11.1%
J.P. Morgan also reported 20-year annualized returns for the following from 1999 to 2018:
Gold: 7.75%
Oil: 7%
Furthermore, Fidelity Investments provides a report of annualized returns for portfolios of the conservative, balanced, growth, and aggressive growth varieties if you invested from 1926 through 2022. Here are the numbers:
Conservative: 50% bonds, 30% short-term investments, 14% U.S. Stock, and 6% foreign stock.
Average annual return: 5.75%
Worst 12-month return: -17.67%
Best 12-month return: 31.06%
Worst 20-year return: 2.92%
Best 20-year return: 10.98%
Balanced: 40% bonds, 35% U.S. stock, 15% foreign stock, 10% short-term investments.
Average annual return: 7.74%
Worst 12-month return: -40.64%
Best 12-month return: 76.57%
Worst 20-year return: 3.43%
Best 20-year return: 13.84%
Growth: 49% U.S. Stock, 25% bonds, 21% foreign stock, 5% short-term investments.
Average annual return: 8.75%
Worst 12-month return: -52.92%
Best 12-month return: 109.55%
Worst 20-year return: 3.1%
Best 20-year return: 15.34%
Aggressive Growth: 60% U.S. stock, 25% foreign stock, 15% bonds.
Average annual return: 9.45%.
Worst 12-month return: -60.78%
Best 12-month return: 136.07%
Worst 20-year return: 2.66%
Best 20-year return: 16.49%
How to Determine Rates of Return for Retirement Projections?
All these numbers may leave you with the question of how to project future rates of return for your retirement account. Fortunately, several techniques can help you get accurate figures.
Understand Your Asset Class
The assets you invest in will determine your rate of return. For instance, if you want high returns and can tolerate risk, steer clear of bonds. Sure, they'll sit and provide a modest return, but they won't fit your preferences (stocks would be a better fit). So, it's a good idea to have basic knowledge of the various asset classes before sinking money into an investment.
Adjust to the Circumstances
A 25-year-old will likely invest in a growth fund with plenty of stocks. This move makes sense because they can take advantage of higher gains while having plenty of time to overcome losses.
However, when that same person is 10 years away from retirement, it may be time to shift a portion of their portfolio away from stocks and into low-risk, low-reward assets, like bonds. In other words, at each stage of life, it's wise to ask yourself what your goals are and how your investments are helping you get there. Then, you can make suitable changes.
Plan for Multiple Scenarios
There is no guarantee of future investment gains, so it's best to run your nest egg through multiple calculations to see where you'd land in different circumstances. Anticipating various scenarios can allow you to plan for different outcomes, reducing stress and increasing your quality of life.
For example, how much retirement income would you receive if your assets performed exactly as predicted? On the other hand, if your assets only performed as well as their lowest return in the last decade, how much would that change your income? The answers to these questions will help you respond effectively if your investment fund underperforms.
How to Maximize Your Rate of Return in Retirement
Maximizing your real rate of return is crucial to maintaining a robust income. Use these tips to keep your cash flow healthy in a volatile market.
Fight Inflation
While inflation impacts working and retired Americans alike, you can combat its effects to make your dollar stretch further. First, you can relocate when you retire to a more affordable place to live. For example, Georgia and Mississippi have a low cost of living and burgeoning retirement communities. Meanwhile, states like Florida and Nevada do not levy state income taxes.
Additionally, your asset class can protect against inflation. For instance, stocks can be effective inflation hedges because corporate profits usually rise during bouts of inflation. Specifically, value stocks (as opposed to dividend stocks or growth stocks) are excellent for insulating you against inflation. So, seeking undervalued stocks is an effective strategy in a high-inflation environment.
Buy Inflation-Linked Bonds
Moreover, a specific bond type can take advantage of inflation. Treasury Inflation-Protected Securities (TIPS) increase their par value when inflation increases. For example, a $1,000 TIPS with a 0.5% interest rate provides a $5 return before inflation. However, if inflation rises 5% for the year, your asset gains $50 more in value. Therefore, TIPS are low-risk assets with a niche role in inflationary settings.
Prioritize Short-Term Bonds
Likewise, bonds also help with inflation because they offer varying timelines before you sell them. Bond interest rates rise with inflation, and short-term bonds respond quickly to market dynamics. So, you can purchase these assets and sell them after a maturity period of one to five years.
Diversify Your Portfolio
Diversification is a key strategy for all investors to follow. Whether you're dealing with a bull market, extreme inflation or impending retirement, spreading your investments among numerous asset clases will decrease your risk and provide exposure to different industries. However, this doesn't mean reallocating assets during times of economic turbulence, where emotions run high and judgment isn't clear. Instead, it's best to be proactive and diversify your portfolio from the outset.
Keep Moderate Cash Reserves
Although stuffing all your hard-earned money under your mattress is a simpler approach, it won't sustain you during retirement. Inflation constantly devalues currency, meaning the $100 in your wallet will probably be worth about $98 or $97 the next year during periods of normal inflation. But a market downturn can expose new retirees to sequence of returns risk. As a result, it's recommended that retirees keep a maximum of two years worth of expenses in cash and invest everything else to generate retirement income.
Bottom Line
A realistic rate of return for retirement depends on your asset allocation, investment management fees, inflation, and taxes. As a result, calculating your real rate of return means accounting for these factors when assessing your investment gains. While inflation impedes returns, you can adopt several strategies, like investing in stocks and inflation-linked bonds, to overcome this obstacle. Remember, diversifying your portfolio and keeping a cool head in difficult times often leads to better outcomes.
Portfolio Management Tips
Managing investments yourself can be a lot to juggle when you're sifting between stocks and bonds, and aren't sure how much income you'll need. 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.
Diversifying your investments means more than blending stocks and bonds in your portfolio. Here is a guide to 10 investment types and how they work.
Photo credit: ©iStock.com/Andrii Yalanskyi, ©iStock.com/porcorex, ©iStock.com/FangXiaNuo
The post What Is a Realistic Rate of Return for Retirement? appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
A supermarket which prides itself on selling only British meat has become embroiled in a major beef fraud investigation.
The National Food Crime Unit (NFCU) – part of the Food Standards Agency (FSA) – is carrying out the probe and revealed that a supplier has been selling “large volumes” of pre-packed meat and deli products from South America and Europe to the retailer in question.
See also: Analysis: 10 years on from ‘horsegate’
Farmers Weekly was made aware of the massive investigation into the supermarket supplier, which involves the review of about 1.3m documents, by the NFCU’s deputy head, Reginald Bevan.
He said the products were being sold to consumers as “best British beef”.
The NFCU has so far declined to name the supermarket, as the case is ongoing, but Farmers Weekly understands it is not one of the six biggest supermarkets.
Products pulled
At present, the investigation is looking at only one retailer, which has since pulled the products from its shelves.
But insiders have warned it would be “naive” to think the problem is not more widespread, including actors in wholesale supply chains.
The farming industry has responded with surprise and anger to the revelations, which come 10 years after the horsegate scandal that rocked Europe.
National Beef Association chief executive Neil Shand said anyone who was caught falsely labelling or adulterating food products should “have the book thrown at them”, while NFU president Minette Batters said it “showed how the system can be abused”.
“Horsegate brought this country, as all food scares do, to a standstill and created a huge level of mistrust,” Mrs Batters added. “We have to learn lessons from that era.”
Other industry bodies, such as the British Meat Processors Association and the Association of Independent Meat Suppliers (Aims), hit out at the NFCU and the FSA for failing to share details of the investigation with them.
An Aims spokesman said: “It is only today that we have found the product concerned is beef, and it is our belief, given the popularity of sliced cooked beef across all trade channels, that its sale by food fraudsters will not have been limited to a single supermarket.
“The NFCU’s current play book has the potential to damage UK overseas trade simply by their policy of a lack of transparency and industry engagement.”
Traceability concerns
Concerns have also been raised about the traceability of South American beef more generally, with some reports suggesting cattle from illegally deforested areas are making their way into legitimate supply chains.
Jim Walker, a former NFU Scotland president and Quality Meat Scotland chairman, said: “The price of traceability in South America is a bung.”
Andrew Quinn, deputy head of the NFCU, told Farmers Weekly the retailer concerned continued to work closely and co-operatively with the investigation, to progress the case against the supplier.
“This is not a food safety issue, but a matter of food fraud,” he added.
“Any fraud investigations of this nature take time to go through evidence and bring to any outcome, including any potential prosecution. We take food fraud very seriously and are acting urgently to protect the consumer.” | Consumer & Retail |
Tory MPs are demanding urgent explanations from ministers over the levelling up agenda after an official report said plans to move thousands more civil service jobs from London to Birmingham and Newcastle had been scrapped.
The Government Property Agency (GPA), which falls under the Cabinet Office, said in a brief reference in its recent annual report and accounts that a decision had been “made by ministers” to axe the proposals after “a review identified that they no longer aligned with strategic requirements”.
This was despite the fact that more than £1m had been spent on the two projects as part of the flagship government drive to spread the civil service out of Whitehall and boost growth in the regions.
Amid signs of Cabinet Office panic over a gathering backlash, the Tory MP John Stevenson, who chairs the Northern Research Group (NRG) of Conservative MPs from “red wall” seats, described the move as a “step backwards”. He added: “I expect a full explanation on parliament’s return and alternative policy initiatives to ensure that the movement of civil servants does proceed. I will also be asking the public administration and constitutional affairs committee to look at this issue.”
Many Tory MPs in the north and Midlands are becoming increasingly nervous that failure to deliver on levelling up will put them in increasing danger of losing their seats at the next general election.
The government has a longstanding commitment to move 22,000 civil service posts out of Whitehall by 2030. Several thousand have already moved to towns and cities including Glasgow, Darlington, Wolverhampton, Birmingham and Newcastle.
But the decision to axe the latest phase affecting Birmingham and Newcastle has raised questions about the level of commitment to completing the task, with government insiders citing the short-term cost implications as a brake on progress. The Conservative mayor of the West Midlands, Andy Street, has said the project in Birmingham has fallen victim to the trend toward working from home.
Last month, the cross-party public administration and constitutional affairs committee was highly critical of the way the government was carrying out the project. While noting that the government said in March that it had already relocated 11,000 posts from London, it added that “a lack of clear information published by the Cabinet Office makes it difficult to judge how substantial its achievements are” for a variety of reasons.
It accused the government of “adopting a boosterish approach to reporting progress, which is likely to give an exaggerated picture of its achievements”. It also criticised the government for failing to publish any underlying research that supported its “high-profile statements about the economic benefits to be delivered by moving posts to new regional offices”.
The NRG is expected to raise the issue again when it tables its manifesto for the north at the Tory party conference in Manchester.
The government’s current commitment to relocating large numbers of civil service posts out of London dates back to the Conservative party’s 2017 general election manifesto. In the 2020 budget, the then chancellor, Rishi Sunak, translated this commitment into the specific target to move “22,000 civil service roles out of central London by the end of this decade [ie 2030]”.
In the 2022 levelling up white paper, the government further stated that the 22,000 posts would be moved out of Greater London, and that the first 15,000 of these would be relocated by 2025.
This weekend, a government spokesperson suggested that what had been written in the GPA report had been “misinterpreted” and that the plans were, in fact, still all firmly on track.
“We are committed to launching new government hubs in Birmingham and Newcastle,” the spokesperson said. Officials said that 1,150 roles would be relocated to Birmingham from London by March 2025 and that 850 had already moved. In addition, 350 more jobs would be relocated to Tyneside by 2025 on top of the 400 already relocated. | United Kingdom Business & Economics |
While media attention remains largely fixed on crypto’s best-known players, there are a host of startups in the web3 industry trying to make a name for themselves despite bear-market conditions.
TechCrunch+ got to see a number of those startups during web3 accelerator Alliance DAO’s latest demo day for All11 program participants, which we’re covering exclusively.
The three-month-long accelerator program brings in web3 founders for at least 10 hours per week twice a year. “Each startup in our latest cohort received an average of over 50 intro requests after demo day,” from major VC firms like Paradigm and Multicoin, according to Alliance’s website. Alliance also invests $250,000 in startups that take part in the program.
The most recent cohort had 1,083 applications, down 36% from its previous batch, All10, which had a record 1,692 applicants. Of that number, only six teams made it through and are graduating from the program, as well as two startups from All10 are presenting too (the last cohort had 16 graduating projects.) “This is the most exclusive cohort in our history,” Qiao Wang, a core contributor at Alliance DAO, said during Alliance’s demo day.
Mentors for the All11 cohort include Kain Warwick, founder of Synthetix; Jason Yanowitz, co- founder of Blockworks; Anatoly Yakovenko, co-founder of Solana; Ilja Moisejevs, co-founder and CEO of Tensor (from Alliance’s ALL9 cohort) as well as David Vorick, co-founder of Sia and lead developer of Glow.
Here’s a breakdown of the eight startups:
Company name: Kravata
What it does: Fiat to crypto on and off-ramp for LatAm
Stage: Seed
The pitch: Kravata is a Colombia-based platform that aims to connect traditional financial infrastructure and fiat currencies with cryptocurrencies for businesses wanting to get into web3 in Latin America. Its services include on and off-ramps to convert fiat to crypto (and vice versa) as well as market making and cross-border transfer systems. Its investors include Circle Ventures, Framework Ventures, Alliance DAO and others. It’s raising a seed round.
Company name: Thunder
What it does: Onchain trading terminal
Founders: Jackson Denka
Stage: Seed
The pitch: Thunder, which is a product of Eversify, is an onchain “intent-based” trading terminal that aims to give users “an unfair advantage in every way possible,” according to its website. The platform aims to provide users with support for major blockchains and exchanges like OpenSea, Uniswap, Base, Polygon, Blur and Solana, to name a few. It’s currently looking for strategic investors for its seed round.
Company name: Sleepagotchi
What it does: NFT-Powered Sleep Game
Founders: Anton Kraminkin
Stage: Seed
The pitch: Sleepagotchi is a mobile app game that aims to help people develop healthy sleep habits through gamifying sleep with NFTs. The application is currently available on Apple’s app store. Its game rewards users daily for hitting sleep goals and also provides the ability to collect items in an effort to motivate people to sleep better. The game has 14,000 monthly active users and a 41% one-year retention rate, its founder Anton Kraminkin said during demo day. According to its website, 60.2% of users reported improved sleep since using its game. In January, it raised $3.5 million from investors including 6th Man Ventures, Sfermion, 1kx and Shima Capital. It’s currently raising from strategic investors.
Company name: Blockcast
What it does: Decentralized Broadcast Delivery Network
Stage: Seed
The pitch: Blockcast is a decentralized content delivery network and marketplace that aims to help broadcasters have more traffic and reach wider audiences. The Berkeley-based content delivery platform aims to help broadcasters by bridging the gap between television and online streaming through tokenizing unutilized TV spectrum to deliver content, its co-founder, CEO and CTO, Omar Ramadan said during the demo day. The cost of streaming a 4K movie to 10,000 viewers is typically about $1,000 through servers like Cloudflare, but with Blockcast it can reduce the cost by 96%, Ramadan said. It’s currently raising a seed round.
Company name: Tailwind
What it does: Cosmos-based smart wallet
Founders: Bao Mai
Stage: Seed
The pitch: Tailwind is a crypto wallet focused on the Cosmos ecosystem. It aims to help users focus on decentralized applications, by abstracting away from chains and allowing users to pick a single gas token for transactions. Bao Mai, the founder of Tailwind, previously was a founding engineer at Junoswap, an automated market maker. It’s raising a seed round.
Company name: Tazz
What it does: Debt market for protocols
Stage: Seed
The pitch: Tazz is a decentralized lending protocol that aims to make buying and selling debt tied to digital assets more efficient. It allows users to trade debt through decentralized exchange Uniswap V3. It accepts any type of crypto collateral, according to its website. The company is in “discussions with a very large protocol to issue $5 million in debt,” Alan Hampton, CEO and co-founder of Tazz said during his demo day presentation. It’s raising a seed round.
Company name: Upshield
What it does: Web3 security platform
Stage: Seed
The pitch: Upshield is a full stack security platform for web3 protocols, assets and communities. It aims to be user friendly for people building applications that are non-security experts. The startup launched two weeks ago after being in beta mode for two months and currently has an ARR of $120,000, Paul Vijender, co-founder and CEO of Upsheild said during his presentation. Its engine has over 100 web3 threat detectors as well as onchain and offchain coverage for projects across smart contracts, application front ends and social channels, to name a few. It can work with web3 applications built on eight blockchains and networks like Coinbase’s Base, Ethereum, Avalanche, Binance and Polygon, to name a few. It is raising a seed round.
Company name: Inco
What it does: Encrypted ethereum virtual machine
Founders: Remi Gai
Stage: Seed
The pitch: Inco Network is an encrypted ethereum virtual machine (EVM) layer-1 protocol that aims to help decentralized applications (dApps) operate onchain. Its technology is fully homomorphic encryption (FHE), which is jargon for encryption that allows computations to be performed on encrypted data, without having to decrypt it – meaning its confidentiality is maintained throughout the computation. With that said, the FHE helps users write private smart contracts and perform computations. The network can be used for a number of different use cases like card games and private voting and is live on Devnet (developer network) with its mainnet launching in 2024, founder Remi Gai said during his demo day presentation. Inco is currently raising a seed round.
Building in bad times
These eight companies are not building in the most winsome conditions. “The crypto industry is likely near the bottom of the cycle in terms of venture funding and developer activity,” Wang told TechCrunch. Despite a chilly market, there were a number of novel startup ideas among Alliance startups. And if history is an indication, the winners of the next cycle are likely being built now. | Crypto Trading & Speculation |
House GOP advances bill to block Biden’s student loan repayment program
More than 4 million borrowers are enrolled in the program, according to the Education Department.
House Republicans on Thursday advanced legislation to overturn President Joe Biden’s new student loan repayment program that lowers monthly payments and caps interest.
The House education committee voted 23-19, along party lines, to approve a resolution, H.J. Res. 88, that would block the new income-driven repayment plan — dubbed the SAVE plan — that was finalized by the Education Department earlier this year.
Biden officials are promoting the program as a crucial tool to help millions of Americans manage their federal student loan payments, which are set to resume in October for the first time in more than three years.
More than 4 million borrowers are enrolled in the program, according to the Education Department, and the Biden administration has launched a public outreach campaign to get more Americans to sign up.
But Republicans have blasted the new repayment plan as a backdoor loan forgiveness program that provides wasteful subsidies to millions of borrowers at taxpayers’ expense.
The Biden administration estimated that its new plan would cost $156 billion over the next decade. The Congressional Budget Office previously pegged the figure at $230 billion, and outside analysts, such as Penn Wharton Budget Model, have said it could be as high as $475 billion.
GOP lawmakers are seeking to nullify the repayment plan under the Congressional Review Act, a tool that allows lawmakers to swiftly overturn recently enacted executive branch policies. It will allow Republicans to force a vote on the measure in the Democratic-controlled Senate.
A similar GOP-led effort to repeal Biden’s student debt relief program earlier this year, before the Supreme Court struck it down, passed Congress with a handful of Democratic votes, though Biden swiftly vetoed the measure. | Personal Finance & Financial Education |
There are certain businesses that are supposed to be recession-proof. Healthcare, groceries, and funeral homes are the obvious ones – services and goods that people will always need, whatever the economic climate.
Then there are those that are expected to thrive during a downturn: repair shops, DIY outfits, pawn shops, off licences and – the most obvious – discount retailers.
So on the face of it, the demise of budget chain Wilko is an odd one. With consumer confidence in the doldrums and households desperately seeking value for money, this was its moment to shine.
Instead, with the usual distressed buyers thought to be giving it a wide berth, an army of insolvency experts is poised to step in, bringing the curtain down on 400 shops and 12,000 jobs.
The fear is that it is the first of a flood of casualties as the twin forces of record inflation and sharply rising interest rates start to really bite.
It is one of the reasons why the Bank of England should have put its foot on the brake on Thursday and paused the relentless increase in rate rises to allow its medicine to take effect.
Monetary tightening tends to take between 18 months and two years to filter through and with inflation now coming down meaningfully on every key measure, there is a very real risk that Threadneedle Street goes too far, unnecessarily triggering a deep recession and sending thousands of businesses and households to the wall.
Even its own forecasts show that additional interest rate hikes will make little difference to inflation in the medium term with inflation falling to 1.4pc over three years if rates simply stay where they are, and yet another one or two increases are expected.
The Bank can whine all it likes about the possibility of a dangerous wage-price spiral – but is it any wonder that workers are demanding bigger wage rises when faced with such a grim picture?
Perhaps we should all just meekly accept our fate instead: sky-high energy costs; astronomical grocery bills; unaffordable mortgages; and eventually penury, all because Andrew Bailey and his band of nodding dogs failed to spot the inflation train hurtling down the track.
How telling that the Bank has gone from insisting repeatedly that the current bout of eye-watering price spikes is transitory to now warning that inflation is in danger of becoming embedded unless everyone stops chasing surging prices with pay increases.
Wilko could turn out to be one for the ages. Discount retailers tend to operate on super-thin margins because their prices are so low.
But it is in a dire financial mess, too – debts of £261m at the last count and the sale and leaseback of its Worksop warehouse for £48m indicate a company grappling with severe short-term liquidity issues. Some £25m of the proceeds were used to repay an existing credit facility.
Ordinarily, survival might have been possible – but with operating costs going through the roof at the same time as borrowing costs ramp up, it becomes a death spiral from which it is hard to escape.
Loss of supplier insurance, which quickly led to shortages on many shelves, as well as owners happy to pay themselves a total of £3m in dividends at a time when the company had sunk nearly £37m into the red, sealed Wilko’s fate.
In the end, it was the victim of a classic cash squeeze. An emergency £40m loan from distressed specialist Hilco in January, alongside a flurry of panicked cost-saving measures merely bought it a few more months on life support.
There’s another factor at play, too.
In past downturns, companies have been able to “kick the can down the road” – banker parlance for a new loan or the extension of an existing one and a far more preferable outcome for lenders than pulling the plug or having to step in and take ownership of a business they don’t know how to run.
But many companies can no longer afford to meet the terms of borrowing facilities negotiated when rates were close to rock-bottom, never mind what they’d be charged now.
Small businesses have gone from paying nothing in the first year of a bounceback loan during the pandemic and a fixed rate of 2.5pc per annum after that to anything from 6pc to 15pc on a typical business loan. Borrowing costs have more than doubled in the space of just two years.
Profit warnings have risen for seven consecutive financial quarters – the longest run since the financial crash with one in five companies citing changing conditions in credit markets for their predicament.
Insolvencies are the highest they’ve been since those dark days too and yet thousands of companies remain shielded from a completely different borrowing environment by virtue of existing loans that have yet to expire. A brutal new world awaits.
Insolvency experts liken the situation to a dam bursting: lots of people will get very wet; others will be quickly washed away. | Inflation |
More Than 97% Of Rs 2,000 Notes Returned To Banking System: RBI
On May 19, the RBI announced the withdrawal of Rs 2,000 denomination bank notes from circulation.
The Reserve Bank of India (RBI) on Wednesday said that more than 97% of the Rs 2,000 bank notes have been returned to the banking system and only about Rs 10,000 crore worth of the notes are still with the public.
On May 19, the RBI announced the withdrawal of Rs 2,000 denomination bank notes from circulation.
"The total value of Rs 2,000 bank notes in circulation, which amounted to Rs 3.56 lakh crore as at the close of business on May 19, 2023 when the withdrawal of Rs 2,000 bank notes was announced, has declined to Rs 0.10 lakh crore as at the close of business on Oct. 31, 2023," it said in a circular.
Thus, more than 97% of the Rs 2,000 bank notes in circulation as on May 19, 2023, have since been returned, the central bank said.
Public can deposit and/or exchange the Rs 2,000 bank notes at the 19 RBI offices across the country.
"Members of the public are requested to avail the facility of sending the Rs 2,000 bank notes through post offices of India Post. This will obviate the need for travel to RBI offices for deposit/exchange of the Rs 2,000 bank notes," the central bank said.
Public and entities holding such notes were initially asked to either exchange or deposit them in bank accounts by Sept. 30. The deadline was extended to Oct. 7. Both deposit and exchange services at bank branches were discontinued on Oct. 7.
Starting Oct. 8, individuals have been provided with the choice of either exchanging the currency or having the equivalent sum credited to their bank accounts at 19 offices of the RBI.
Meanwhile, long queues are being witnessed during the working hours at the RBI offices for exchange/deposit of Rs 2,000 notes.
The 19 RBI offices depositing/exchanging the bank notes are in Ahmedabad, Bangalore, Belapur, Bhopal, Bhubaneswar, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Jammu, Kanpur, Kolkata, Lucknow, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthapuram.
The Rs 2,000 bank notes were introduced in November 2016 following demonetisation of the then prevailing Rs 1,000 and Rs 500 bank notes. | India Business & Economics |
Modifi Plans To Expand Market With Focus On SME
Modifi is projecting an increase in its Indian operations, targeting aggressive growth in business within the country by 2024, the company said in a statement.
Modifi, a global fintech platform, on Thursday announced an expansion strategy to enhance its presence in the Indian market with focus on the SME trade sector.
Modifi is projecting an increase in its Indian operations, targeting aggressive growth in business within the country by 2024, the company said in a statement.
This expansion builds on an already impressive 1,000x business growth since the company's launch in India in 2019, it said.
Modifi has been a catalyst in supporting Indian businesses and entrepreneurs with over $1.5 billion in cross-border financing since it began operations in India, it said.
"Our solutions are designed to bridge the financing and payments gaps for Indian SMEs, helping them emerge as key players on the global manufacturing stage by addressing critical issues like working capital access, effective payment solutions, and risk management," Nelson Holzner, CEO and Co-founder of Modifi said.
In light of the challenges faced by small and medium-sized manufacturers in dealing with larger buyers, Modifi is committed to changing the dynamics, promoting equitable and sustainable business relationships, he said. | India Business & Economics |
A sprinkling of question marks are being thrown around what in Westminster is called the "triple lock".
It is a promise that dates back to the Coalition Agreement in 2010 - when the Conservatives and Liberal Democrats came together in government.
On page 26 of that document, they committed to what they actually called the "triple guarantee".
"We will restore the earnings link for the basic state pension from April 2011, with a 'triple guarantee' that pensions are raised by the higher of earnings, prices or 2.5%," they said.
Combatting pensioner poverty and acknowledging older folk have fewer ways to increase their income was the justification.
Oh, and there is also the power of the grey vote.
Older folk are more likely to vote than young people, so if you're a politician, you mess with pensioners at your peril.
The political consequences of that promise, though, made in the scramble of five days of assembling a government in May 2010, have been - and will continue to be - long lasting.
Arguments have since raged about inter-generational fairness.
Are younger people let down by the political system, and older people prioritised?
Oh, and the triple lock is mighty expensive, not least because each year's rise is baked in.
Thirteen years on, three big questions about its future linger.
Question 1 - What to do about the triple lock now?
What should the government do this autumn in deciding how much the state pension should go up next April?
Up to now, when earnings have been higher than either prices or 2.5%, it is a figure representing total earnings that has been used. But the Work and Pensions Secretary Mel Stride won't commit to that.
And sources in government are letting it be known that they are contemplating something a little lower.
The argument is made that this year's total earnings figure is distorted by some one-off payments that were agreed to resolve strikes in the public sector - and a figure that discounts this would be more reasonable.
A rise of 8%, rather than 8.5%, for example, would save the Treasury hundreds of millions of pounds.
It has been argued, by folk I have spoken to in government, that there is the legal underpinning to do this.
And, indeed, there is.
It is the Social Security Administration Act 1992. This says "in each tax year the Secretary of State shall carry out a review of the general level of earnings in Great Britain, taking into account changes in that level which have taken place since his last review".
In other words, that you could look at earnings across the whole year, rather than the figures for May to July, which includes these extra payments.
But that is the law. And here is the politics: the convention is to use the overall earnings figure, and not doing that could be interpreted by some as breaking the spirit of the triple lock.
Which brings us toâ¦.
Question 2 - What to do about the triple lock at and after the next general election?
Neither the Conservatives nor Labour have committed to keeping the triple lock come the next general election.
Here is the bind they are both in: It is very expensive.
And some argue it is unfair to younger generations.
But it is mighty difficult for politicians to take stuff away, particularly if you fear your opponent will not.
I suspect that if the Conservatives keep it, Labour will too. If the Tories tweak it, Labour may well follow suit.
But what about the long term? That brings us toâ¦.
Question 3 - Is the triple lock sustainable?
Enter again the Work and Pensions Secretary Mel Stride, who has told the BBC it is not sustainable in the "very, very long term".
Usually at Westminster, folk talking about the "very, very long term" mean a week on Friday. I exaggerate, but only a bit.
Politics, by its very nature, is very often very short term.
Mr Stride was actually talking decades ahead and projections from the government's official forecaster, the Office for Budget Responsibility, which point to its astronomical costs in decades to come if it is maintained.
The Institute for Fiscal Studies (IFS) have also looked into this too - and arrived at similar conclusions.
You can hear Jonathan Cribb from the IFS talking to us about this on the latest edition of the BBC's Newscast podcast.
But Lord Hague, the former Conservative leader, wrote in The Times that the triple lock is "a very fierce sleeping dog that hates anyone to tread on its paws".
The politics of waking up that pooch, this side of the election - doing anything radical about the triple lock - looks mighty difficult for either main Westminster party. | United Kingdom Business & Economics |
TALLAHASSEE — If it hadn’t been for a fender bender on Interstate 75 near Chattanooga, Tennessee, Tuesday morning, most folks wouldn’t know that Gov. Ron DeSantis was using state government vehicles for his 2024 run for president.
Tuesday’s four-vehicle collision on the way to a campaign fundraiser draws a curtain back on the campaign’s use of state resources. But finding out who’s paying for it is nearly impossible thanks to a new law passed by the Legislature to protect the governor’s travel records from public view.
“The legislature has enabled him to hide his travel records so we don’t know and have no way to hold him accountable if he is using state resources in his campaign or if that is even the case,” said Ben Wilcox, research director for Integrity Florida, a nonprofit government watchdog.
It was frustrating enough when trying to monitor his use of government resources while traveling around the state, Rep. Anna Eskamani said, but to take those people and vehicles out of state is even worse.
“It’s absurd that he’s using public resources and public infrastructure to campaign.” said Eskamani, D-Orlando. “He’s using state resources to boost himself politically.”
The governor’s campaign motorcade was on their way to a fundraiser in Chattanooga when an accident up ahead caused traffic to slow down. A Tennessee Highway Patrol officer leading the motorcade stopped short, Chattanooga police reported, causing the vehicles behind it to rear-end each other.
“If the accident hadn’t been reported, we wouldn’t have known otherwise about the use of state vehicles,” Eskamani said. “It makes you wonder how often state vehicles and public employees are being used at out-of-state campaign events.”
A female staffer was treated on the scene for minor injuries, but no one else was hurt, police said. Other accident victims included Florida Department of Law Enforcement agents. All the vehicles involved were government vehicles, the police report said.
The accident occurred at the start of a long day of campaign fundraisers scheduled in Tennessee, including in Knoxville and Nashville.
The DeSantis campaign did not respond to a request for more information about the use of state vehicles and personnel.
“We’ve never answered questions about our protective operations assets (number of agents used, vehicles etc.),” FDLE spokeswoman Gretl Plessinger said when asked how much the agency was charging for travel and security for the governor’s campaign.
The FDLE puts out an annual protective services report in August, but Plessinger didn’t say whether it would break down campaign expenses or show reimbursements for them.
The DeSantis campaign’s federal campaign finance report filed July 15 for the three-month period ending June 30 doesn’t show any payments to FDLE for travel or security expenses.
It does show the campaign spent $76,256 on private security firms, including $64,588 to Rubicon Protection security services of Sun City, Ariz.
The accountability issue comes at a time when the governor’s campaign has burned through contributions at an alarming rate, forcing DeSantis to tighten the belt and lay off 38 people, or a third of his campaign staff.
The largest expenditures seem to meet at the crossroad of staff and travel, as he’s been known to travel with a large entourage of staffers and security.
The campaign raised $20 million through June 30. Of the $8.2 million spent through that date, just over $1 million was spent on payroll and nearly that much on travel.
His presidential campaign spent $896,000 on travel-related costs through June 30, with more than half of that going to one company, N2024D LLC, located in Athens, Ga. It filed incorporation papers in Florida on May 22, two days before DeSantis officially announced his candidacy for president.
One of the LLC’s officers, Paul Kilgore, is a GOP operative responsible for running political committees and super PACs supporting candidates for federal office, including former Texas Gov. Rick Perry when he ran for president, and Montana Rep. Ryan Zinke. He currently is heading up a fundraising committee for North Dakota Gov. Doug Burgum, who is also seeking the Republican nomination for president.
Kilgore owns several of companies that do political consulting, marketing and campaign compliance, including Capitol Hill Lists and Professional Data Services.
Another $98,000 went to Empyreal Jets and $31,205 to Avion Aviation, both charter services out of Houston.
It’s well-documented that DeSantis has a penchant for flying on private jets provided by a group of wealthy donors representing hoteliers, developers, restaurateurs, investment bankers, trucking magnates and oil and gas distributors.
Questions have dogged DeSantis since his reelection campaign began about whose private jets he’s traveling on and whether they are being reported as in-kind contributions or gifts.
An Orlando Sentinel review of state records in November documented more than $500,000 to cover his transportation costs for his re-election in 2022, on top of millions in straight-up donations.
It’s unprecedented, Wilcox said. “I don’t think we’ve ever had a sitting governor run for [president].”
DeSantis is also setting a precedent for lack of transparency, said Michael Barfield, director of public access for the Florida Center for Government Accountability.
“At the end of the day, taxpayers don’t know what their money is being spent on,” Barfield said.
His group is talking to its lawyers about next steps.
“We’re questioning the validity of the exemption,” Barfield said. “We don’t think it meets a public purpose, so we will brainstorm about potential legal action.”
Eskamani said if the Legislature wanted to make the governor more accountable, it could repeal the public records exemption.
But, she said, that would be a long shot. “It would take a political will that doesn’t exist, even for something as nonpartisan as access to travel records.” | Nonprofit, Charities, & Fundraising |
Gland Pharma Q2 Results Review - Slowly Getting Back On Track: Motilal Oswal
Work-in-progress to enhance commercial benefits from Cenexi
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Gland Pharma Ltd. delivered an in-line operational performance in Q2 FY24. Core markets and India showed superior performances, with a normalization in certain key products. Gland Pharma continued its effort to improve the operational performance of Cenexi as well.
We maintain our FY24/FY25 estimates. We value Gland Pharma at 26 times 12 months forward earnings to arrive at a target price of Rs 1,920.
After posting a 31% earnings decline YoY in FY23 due to several headwinds, Gland Pharma’s base business is back on track with a superior performance. It continues to enhance its complex portfolio, with one first-to-file product already filed and at least two to be submitted to regulatory authorities soon. The company has also expanded its facility for the plasma protein portfolio.
Accordingly, we estimate a compound annual growth rate of 30%/23%/14% in sales/Ebitda/profit after tax over FY23-25. Reiterate 'Buy'.
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. | India Business & Economics |
Parents on universal credit will be able claim hundreds of pounds more to cover childcare costs from the end of June, the government has announced.
The government will allow parents on the benefit to claim back £951 for childcare costs for one and £1,630 for two or more children - a 47% increase.
The policy was announced as part of the 2023 Budget and applies across Britain.
Labour said the plans did not go far enough and there would be no increase in childcare workers this year.
At the moment, people in England, Scotland and Wales who are eligible for support pay childcare costs upfront and then claim a refund.
Until now the amount parents on universal credit could claim had been frozen at £646-a-month per child for several years. Meanwhile, the cost of childcare increased by 44% since 2010, according to analysis from the Trades Union Congress.
The government announced it will also support eligible parents with their first month of childcare costs when they either enter work or increase their hours, by providing childcare funding upfront. Those parents will receive up to 85% of their childcare costs back before their next month's bills are due.
And the Department for Education has also launched a consultation aimed at increasing the early years' workforce in England. A recruitment campaign to attract and retain talent is planned for early next year, which will consider how to introduce new accelerated apprenticeship and degree apprenticeship qualifications.
In the Budget, Chancellor Jeremy Hunt also extended the current scheme offering some families 30 free hours of childcare per week to cover younger children. The changes will be phased in for households in England where the parent or parents earn at least £152 a week but less than £100,000 a year.
The cost of childcare in the UK is among the most expensive in the world, according to the Organisation for Economic Cooperation and Development (OECD). For a couple with two young children childcare costs take up nearly 30% of their income, according to the OECD.
The average annual price for full-time nursery childcare in England for a child under-two was more than £14,000 in 2022, according to children's charity Coram.
A survey of 24,000 parents, which was published in March by campaign group Pregnant Then Screwed, found 76% of mothers who pay for childcare feel it no longer makes financial sense for them to work.
Work and Pensions Secretary Mel Stride said the changes will "cut inactivity and help grow the economy".
Mr Stride said: "These changes will help thousands of parents progress their career without compromising the quality of the care that their children receive.
"By helping more parents to re-enter and progress in work, we will be able to cut inactivity and help grow the economy."
Shadow education minister Helen Hayes said: "The Conservatives are piling pressure on a broken system.
"Their plans come with no plan to increase the workforce, who are so critical to delivering an expansion of childcare.
"What parents and children both need is higher standards, better availability across our country, and a flexible system that supports families from the end of parental leave to the end of primary school." | United Kingdom Business & Economics |
- Coinbase CEO Brian Armstrong told CNBC's Joumanna Bercetche that the U.S. government's enforcement action against Binance will allow the crypto industry to "turn the page."
- Binance was hit by the U.S. government with a $4 billion settlement last week, which saw its founder and CEO Changpeng Zhao step down and plead guilty to charges of money-laundering violations.
- Armstrong pushed back on the suggestion that crypto is mainly used for nefarious purposes such as fraud, money laundering, and terrorist financing, however.
The crypto industry can finally close the chapter on a litany of scandals and problems after Binance was hit with a historic settlement by the U.S. Department of Justice, Coinbase CEO Brian Armstrong said Monday.
"The enforcement action against Binance, that's allowing us to kind of turn the page on that and hopefully close that chapter of history," Armstrong said in an interview with CNBC's Joumanna Bercetche.
"There are many crypto companies that are helping build the crypto economy and change our financial system globally. But many of them are still small startups."
"I think that regulatory clarity is going to help bring in more investment, especially from institutions," he added.
Binance was hit by the U.S. Department of Justice with a $4 billion settlement last week, which saw its founder and CEO Changpeng Zhao step down and plead guilty to charges of money laundering violations.
The government accused Binance of violating the U.S. Bank Secrecy Act and of breaching sanctions in Iran.
Armstrong pushed back on the suggestion that crypto is mainly used for nefarious purposes such as fraud, money laundering, and terrorist financing, a common refrain from financial firms that have avoided jumping into the space due to compliance concerns.
"It's true that there have been some small amount of illicit activity in crypto but it's actually less than 1% from what we've seen. If you look at illicit uses of cash it's oftentimes more than that," Armstrong told CNBC.
Some players, he conceded, have been "bad actors," referring to the case of Binance, as well as the collapse of crypto exchange FTX and the sentencing of its founder Sam Bankman-Fried to jail over allegations of fraud.
Armstrong is in the U.K. Monday for the Global Investment Summit, which gathers a host of business leaders to encourage foreign investment in the U.K.
Coinbase was the only crypto company invited to the summit, which Armstrong termed an "endorsement" for the company, but not necessarily the broader industry.
Armstrong said he is "impressed" with U.K. Prime Minister Rishi Sunak's leadership when it comes to digital currencies and that Coinbase was investing more in the U.K. as a result.
The U.K. is seeking to bring digital assets such as cryptocurrencies and stablecoins into the regulatory fold.
Coinbase is currently engaged in a tense legal battle with the U.S. Securities and Exchange Commission over allegations that the company is violating securities laws with its platform.
On that point, Armstrong said he feels very good about Coinbase's chances fighting the lawsuit. He also disputed the idea that the SEC's actions have forced Coinbase to move offshore, adding that the company is still investing actively in its home market. | Crypto Trading & Speculation |
Biden Administration Proposes Changes In H-1B Visa Rules To Improve Efficiency
The rules aim to streamline eligibility, provide more flexibility to F-1 students, entrepreneurs and those working for non-profits.
The Biden administration is proposing changes in the H-1B foreign workers programme to improve efficiency by streamlining eligibility, providing more flexibility to F-1 students, entrepreneurs and those working for non-profit bodies and ensuring better condition for other non-immigrant workers.
The rules, which are scheduled to be published by the U.S. Citizenship and Immigration Services on Oct. 23 in the Federal Register, have been proposed without changing the Congress-mandated 60,000 limit on the number of such visas the U.S. issues every year.
The H1B visa is a non-immigrant visa that allows U.S. companies to employ foreign workers in speciality occupations that require theoretical or technical expertise.
It is typically issued for three to six years to employers to hire a foreign worker. But H-1B holders who have begun the Green Card process can often renew their work visas indefinitely.
The technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.
Making the proposed rules public for stakeholders to give their comments and feedback, the Department of Homeland Security said the proposed changes in the rules are aimed at streamlining eligibility requirements, improving programme efficiency, providing greater benefits and flexibilities to employers and workers, and strengthening integrity measures.
The H-1B programme helps US employers hire the employees they need to meet their business needs and remain competitive in the global marketplace, while adhering to all US worker protection norms under the law.
In a statement, the Secretary of Homeland Security Alejandro N Mayorkas said the Biden-Harris administration’s priority is to attract global talent, reduce undue burdens on employers, and prevent fraud and abuse in the immigration system.
Observing that the H-1B non-immigrant visa programme allows U.S. employers to temporarily employ foreign workers in speciality occupations, defined by statute as occupations that require highly specialised knowledge and a bachelor’s or higher degree in the specific speciality or its equivalent, the DHS said the proposed rule would change how USCIS conducts the H-1B registration selection process to reduce the possibility of misuse and fraud.
Under the current process, the more registrations that are submitted on behalf of an individual, the higher the chances of that person being selected in a lottery. Under the new proposal, each individual who has a registration submitted on their behalf would be entered into the selection process once, regardless of the number of registrations submitted on their behalf, the DHS said in a statement.
“This would improve the chances that a legitimate registration would be selected by significantly reducing or eliminating the advantage of submitting multiple registrations for the same beneficiary solely to increase the chances of selection. Furthermore, it could also give beneficiaries more choice between legitimate job offers because each registrant who submitted a registration for a selected beneficiary would have the ability to file an H-1B petition on behalf of the beneficiary,” it said.
Under the proposed rule, the criteria for speciality occupation positions would be revised to reduce confusion between the public and adjudicators and to clarify that a position may allow a range of degrees, although there must be a direct relationship between the required degree field(s) and the duties of the position.
The proposed rule codifies that adjudicators generally should defer to a prior determination when no underlying facts have changed at the time of a new filing.
Under the proposed rule, certain exemptions to the H-1B cap would be expanded for certain nonprofit entities or governmental research organisations as well as beneficiaries who are not directly employed by a qualifying organisation.
The DHS would also extend certain flexibility for students on an F-1 visa when students are seeking to change their status to H-1B. Additionally, the department would establish new H-1B eligibility requirements for rising entrepreneurs.
Strengthening integrity measures in addition to changing the selection process, misuse and fraud in the H-1B registration process would be reduced by prohibiting related entities from submitting multiple registrations for the same beneficiary. The rule would also codify USCIS’ authority to conduct site visits and clarify that refusal to comply with site visits may result in denial or revocation of the petition, the DHS said.
Indian American Ajay Bhutoria, a leading advocate for immigration reform welcomed the proposed 'Modernizing H-1B Requirements, Providing Flexibility in the F-1 Programme, and Programme Improvements Affecting Other Nonimmigrant Workers' regulation.
These proposed changes mark a significant step towards streamlining our immigration system and making it more accessible for highly skilled professionals and students from around the world, Bhutoria said.
“The proposed reform plan reflects a thoughtful approach to addressing some of the long-standing issues in the H-1B visa programme, including providing more flexibility to F-1 students and improving conditions for other nonimmigrant workers. We appreciate the DHS's commitment to fostering an environment that is conducive to attracting global talent and maintaining the competitiveness of American industries,” Bhutoria said. | Workforce / Labor |
Campaigners have warned that Vodafone turning off its 3G network will lead to people with older and more basic phones falling into "digital poverty."
Vodafone will be the first UK telecoms firm to stop providing 3G when it begins a nationwide phase-out in June.
This will free up radio frequencies for faster 4G and 5G services, it says.
Vodafone says it is working to support vulnerable customers, but campaign group Digital Poverty Alliance has criticised the switch-off.
Vodafone UK's chief network officer, Andrea Dona, said 3G use had "dropped significantly" - with less than than 4% of its customers' data being used on its 3G network, compared with more than 30% in 2016.
She said that meant it was now "time to say goodbye to 3G and focus on the current benefits and future possibilities of our 4G and 5G networks".â¯
The company says it is working with third parties, including charities, to help customers.
It has also pointed to the support it is providing for customers, including information on its website about how to check if a phone is capable of accessing 4G. It has worked with a body called We Are Digital to set up the Digital Skills Helpline, which is free to call from all UK mobiles and landlines.
Digital Poverty Alliance, which says its objective is help people access the "life-changing benefits" of digital services, says 14 million British people rarely engage online, with 18% of adults relying on their their phone to access digital services. It said switching off 3G would have "detrimental effects".
"Older and basic devices do not have 4G capabilities, so individuals who can only get online using a basic device will fall into digital poverty," it warned in a statement.
"Switching off 3G will have an adverse effect on the mission to help more people access the digital world," it added.
'You rely on the service'
Vodafone says it is pressing ahead with a nationwide phase-out after successful pilots across Plymouth and Basingstoke.
However, some customers have expressed concern about how it will affect them.
Dan Jones, 36, a self-employed IT consultant who lives in a village near Manchester, told the BBC he only got a 3G signal at his home office.
He said he was informed by Vodafone in October that it was going to shut 3G services and since then 4G and 5G in his area had been "pretty much non-existent".
Mr Jones said he was now contemplating changing providers.
"I'm self-employed, I'm an IT consultant - when your living is made through phone calls and that sort of thing, you rely on the service," he told the BBC.
"It's not like I live out in the sticks."
The regulator Ofcom has said all 2G and 3G services will be shut off by 2033 at the latest, with 3G networks being shut first. | United Kingdom Business & Economics |
WeWork Says No Impact On Indian Business Amid Reports Of Potential Bankruptcy Of Global Unit
In WeWork India, Embassy Group holds a 73% stake, while WeWork Global has a 27% shareholding.
Amid reports that U.S.-based WeWork Global Inc. plans to file for bankruptcy soon, coworking major WeWork India Pvt. on Wednesday asserted this will have no impact on its business, saying the Indian business is backed by realty firm Embassy Group and has achieved consistent growth.
In WeWork India, Embassy Group holds a 73% stake, while WeWork Global has a 27% shareholding. WeWork Global, which is a leading provider of flexible workspace, in June 2021 invested $100 million in WeWork India.
There are reports that Softbank-backed WeWork Global is planning to file for bankruptcy. A few months ago, U.S.-based WeWork Global made a statement that "substantial doubt" exists about the company's ability to continue as a going concern.
In a statement on Wednesday, WeWork India CEO Karan Virwani said, "WeWork India is a separate entity from WeWork Global. The recent news around the potential bankruptcy and Chapter 11 filing in the U.S. will have no impact on the members and stakeholders in India."
Any development globally has no bearing on the operations of the business, he asserted.
"In India, we will continue to operate and serve our members, landlords, and partners as usual," Virwani said.
WeWork India is backed by Embassy Group which holds the majority stake and control to run and operate the business in India.
"We have achieved consistent and sustainable growth, operationally and financially. WeWork India is the leader in the flexible workspace industry and has transformed the way India works. We are committed to the robust growth and success of the business and the industry," Virwani added.
While replying to a query whether Embassy would consider buying WeWork Global's stake in India business, Virwani had in August told PTI, "I will always be a buyer of this company's equity if anyone is willing to sell it whether it's at a discount or even a slight premium. We see a long-term value to be much much higher than what it is today. So I am always going to be a buyer."
Virwani had described WeWork Global as a great partner who helped India business during the tough Covid period by making investments.
WeWork India has 50 centres, covering 6.5 million square feet area across 7 cities -- New Delhi, Gurugram, Noida, Mumbai, Bengaluru, Pune and Hyderabad. WeWork India's revenue grew by 40% to Rs 400 crore during the first quarter of this fiscal year on rising demand for flexible workspace across major cities from corporates. | India Business & Economics |
Keir Starmer has backed Sadiq Khan’s call for the government to put money behind a more generous scrappage scheme to help Londoners upgrade older vehicles as the party seeks to limit the electoral fallout of the policy.
The Labour leader said that ministers should help fund a “proper scrappage scheme” for owners of more polluting cars affected by the London mayor’s plans to expand the clean air zone, as they have done for similar schemes in Bristol and Birmingham.
He also said that Khan should “look more broadly” at extra support and mitigations that could be put in place, after the expansion of the mayor’s ultra-low emissions zone (Ulez) was blamed for Labour failing to seize Uxbridge and South Ruislip in last week’s byelection.
However, Starmer refused to say whether he supported the extension of the scheme, which is the subject of judicial review at the high court by outer London councils. He pointed to the mayor’s legal obligation to improve air quality in the capital.
Conservative strategists believe they can use discontent about the Ulez in last week’s byelection as a weapon to save a raft of Tories under threat in the city’s outskirts.
Rishi Sunak has indicated the government could delay or even abandon green policies that impose a direct cost on consumers as he attempts to create dividing lines with Labour at the next election.
Downing Street said the government would “continually examine and scrutinise” measures including a ban on new petrol and diesel cars by 2030, phasing out gas boilers by 2035, energy efficiency targets for private rented homes and low-traffic neighbourhoods.
Further questions have been raised about Labour’s commitment to measures to tackle the climate crisis after Starmer delayed plans for his £28bn green investment fund by two years because of economic turmoil.
In BBC Radio 5 Live phone-in, Starmer said: “I want [Khan] to reflect on the impact it’s having on people … to look at the scheme and see whether there are things that can be done to make it easier for people.
“The first is the scrappage scheme, the money that people get if they actually change their car. The government has put money behind similar schemes in Birmingham and Bristol but not in London. A proper scrappage scheme massively helps people. But the government at the moment won’t do it. That’s one measure, but I want the mayor to look more broadly.”
However, Starmer added: “We can’t pretend that this is a simple political decision. You can’t just say yes/no without regard to the legal context. If the law requires a measure to be taken, it is not in the gift of the mayor to say ‘I’m simply not going to do it’.”
Khan is under mounting political pressure to rethink his plan to extend the Ulez at the end of August. He told the Financial Times: “The government has given other cities hundreds of millions of pounds for scrappage schemes and clean air zones. All we are asking for is fairness and that London gets the same.”
He added: “It’s not right that the government hasn’t provided a penny for Londoners while giving so much to other cities.”
Transport for London, chaired by Khan, has set up a £110m vehicle scrappage scheme for small businesses, charities and Londoners in receipt of child benefit or universal credit affected by the Ulez.
However, drivers have complained that the £2,000 on offer for cars is only a fraction of the cost of replacing their vehicles. | United Kingdom Business & Economics |
Every October, the Social Security Administration announces its annual cost-of-living adjustment, a tweak to the monthly benefits of 71 million recipients that's meant to keep them abreast with inflation. The upcoming benefit hike is likely to fall far short of the current year's 8.7% increase, with experts warning that some seniors around the U.S. are at risk of losing ground.
The 2024 cost-of-living adjustment (COLA) for 2024 is likely to be 3.2%, according to the Senior Citizens League, an advocacy group for older Americans. That's based on recent inflation data, including, which found that prices rose by an annual rate of 3.7% in August amid higher gas costs.
That means headline inflation continues to run hotter than the 3.2% annual COLA adjustment expected by the Senior Citizens League. Even with this year's 8.7% increase, which was the largest in four decades, many retirees say they're still falling behind, according to Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League.
About 7 in 10 retirees said their monthly costs are about 10% higher than this time a year ago, she noted.
"COLAs are intended to protect the buying power of older consumers," Johnson told CBS MoneyWatch in an email. "But because Social Security benefits are modest at best, the dollar amount of the boost often falls short of the actual price hikes during the year."
She added, "Prices remain elevated for housing, medical and food costs. Those three categories alone can account for 80% of most retirees' budget."
How does Social Security calculate the COLA?
The reason a COLA that could run lower than the current rate of inflation comes down to how the figure is calculated.
First, the Social Security Administration relies on an inflation index that's slightly different than the main CPI that the Federal Reserve and economists use to gauge pricing trends. The agency instead bases its COLA on what's known as the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI-W, which some critics say doesn't accurately reflect the spending of older Americans.
In August, the CPI-W rose 3.4%, slightly lower than the 3.7% increase in the Consumer Price Index for All Urban Consumers, the primary inflation index relied on by economists.
Next, the agency bases its COLA on the percentage increase in the CPI-W in the third quarter — July, August and September — compared with the prior year. If there's no increase between the two figures, there's no COLA adjustment.
The average Social Security benefit
If Social Security increases the COLA by 3.2% next year, the average monthly retiree check would increase to $1,790, or $57.30 in additional benefits, the Senior Citizens League said.
But many retirees have monthly costs that exceed that average benefit, with the group finding that 52% of seniors say they spend more than $2,000 a month.
"Social Security benefits are modest, replacing roughly one-third of a middle earner's average wages," Johnson said, citing an analysis from Social Security's chief actuary.
Medicare premiums for 2024
Another key questions for Social Security recipients is whether Medicare premiums will eat into retirees' COLA in 2024. Typically, Medicare announces its premiums in November.
Medicare premiums are an issue because the Social Security Administration automatically deducts Part B costs from monthly Social Security benefits before they're sent to retirees. In March, Medicare Trustees forecast Part B monthly premiums would increase 6% to $174.80.
However, that forecast was issued before Medicare said it wouldthe , which could cost $26,000 annually without insurance and which could increase the program's costs.
for more features. | Inflation |
Pubs in England and Wales will be able to continue selling takeaway drinks after the government decided to keep Covid licensing rules.
They were allowed to serve customers through hatches when they were forced to close under pandemic laws in 2020.
The rules were due to expire on 30 September, but the BBC has been told they will now continue.
The move - aimed at saving the trade from financial ruin - was previously extended twice during the pandemic.
It is understood Prime Minister Rishi Sunak stepped in to enable the current licensing rule to continue.
The Sun newspaper, which first reported the story, quoted a source saying the prime minister had "listened to the industry and heard them loud and clear".
The rules, which were granted in July 2020, allows pubs without an off-premises licence to sell takeaway alcohol without having to apply to their local council for permission.
The change allowed them to keep trading during Covid restrictions.
Emma McClarkin, chief executive of the British Beer and Pub Association, whose members own over 20,000 pubs, welcomed the decision, saying landlords would be pleased not to have to apply for additional licences.
"This was a measure introduced to support our pubs during difficult times and the prime minister must recognise that these businesses are still under immense pressure," she said.
Martin McTague, national chair of the Federation of Small Businesses, said the move would provide pubs with an "extra revenue stream to mitigate the rising costs".
Kate Nicholls, chief executive of UK Hospitality, said many businesses had benefited from so-called pavement licences and had built outdoor areas for takeaway sales and al fresco dining.
She added the government's decision to continue them was a "welcome dose of common sense" and would avoid restaurants, bars and pubs being hit with "additional bureaucracy".
With the rules having been expected to expire at the end September, pubs that wanted to continuing serving takeaway pints would have had to apply to local councils for permission.
Before its decision to keep the rules in place after all, the Home Office had said that it had sought opinions from councils, residents' groups and drinks retailers - and that the majority of those who responded were in favour of returning to the pre-pandemic rules.
There were concerns from pub groups that such a move would have forced landlords to go through a lengthy application and approval processes to keep takeaway sales. | United Kingdom Business & Economics |
Stock Market Live: GIFT Nifty Signals Lower Open; Tata Motors, Infosys, Zee, ICICI Bank, HAL In Focus
Live updates on India's equity markets on Nov. 10.
KEY HIGHLIGHTS
- Oldest First
Asian Markets Trade Lower
Global Cues
U.S. Dollar Index at 105.9
U.S. 10-year bond yield at 4.48%
Brent crude unchanged at $80.01 per barrel
Nymex crude down 0.11% at $75.66 per barrel
GIFT Nifty was down 35 points of 0.18% at 19,387 as of 8:15 a.m.
Bitcoin was up 0.27% at $36,639.35
Trading Tweaks
Price band revised from 20% to 10%: IFGL Refractories.
Ex/record date dividend: 360 One WAM, Amara Raja Energy & Mobility, CARE Ratings, Dabur, Indian Metals & Ferro Alloys, Insecticides (India), Indian Oil Corp, Indian Railway Finance Corp, Navine Flourine International, NIIT, Petronet LNG, Safari Industries, Surya Roshni.
Ex/record date special dividend: ADF Foods, Navine Flourine International.
Ex/record date stock split: MK Proteins.
Move out of short term ASM framework: GOCL Corp, Indo Count Industries, Swan Energy.
Insider Trades
ISMT: Promoter group Kirloskar Industries bought 12,909 shares on Nov. 8.
Linc: Promoter group Ekta Jalan and Divya Jalan bought 3,500 and 4,000 shares respectively on Nov. 7 and Nov. 8 respectively.
Block Deals
Reliance Industries: The Master Trust Bank of Japan bought 3.47 lakh shares and Copthall Mauritius Investment sold 3.47 lakh shares at Rs 2,335.9 apiece.
Bulk Deals
Aegis Logistics: Smallcap World Fund sold 18.26 lakh shares (0.52%) at Rs 294 apiece.
Orient Green Power Co: Axis Trustee Services sold 1 crore shares (1.01%) at Rs 17.43 apiece. | India Business & Economics |
Ubiquitous tip prompts on touchscreens appear to be affecting Americans' propensity to generously tip service workers in the flesh, as was once the norm around the holidays.
Theto add gratuities to all manner of bills have worn out Americans on tipping, particularly as inflation chews into their own budgets, a new survey shows.
Sixty-two percent of Americans say they don't plan to give holiday tips or buy gifts for service workers this year, according to the survey from digital personal finance company Achieve. A different survey from Bankrate last year found that 54% of people planned to tip the people they normally do, including waiters and hairstylists, more generously around the holidays.
Bankrate also found in its annual tipping survey in June that Americans are tipping less in general, despite the growing number of requests for something extra.
Only 65% of diners said they always tipped waitstaff at at sit-down restaurants, compared to 77% of diners who said they did so four years ago.
An "annoying trend"
"Being asked for tips on even the smallest in-person purchases is a presumptuous and annoying trend that's making people less generous this holiday season," said Achieve co-founder and co-CEO Andrew Housser.
Indeed, the prompts appear even when a consumer has been served by a machine, making it unclear whose pocket the tip would actually line.
Housser said the makers of the cashless payment apps sometimes earn a cut of a bill's total, and therefore may have an incentive to get retailers to charge consumers as much as possible.
"That's the frustration. It's about the ubiquity of point-of-sale tipping," Housser told CBS MoneyWatch. "And if it's driving behavior to not tip people who you'd argue probably are deserving of a tip, that would be an unfortunate outcome."
Other factors are eating away at Americans' generosity too.
Dwindling savings
People are close to depleting excess savings they built up during the pandemic, thanks to government stimulus programs. "That is rapidly burning down and it's projected to run out by early to mid-next year," Housser said.
At the same time, Americans are carrying more debt than they ever have, currently owing more than $1 trillion on their credit cards, and $17.3 trillion in all kinds of debt combined, according to the Federal Reserve Bank of New York.
"Excess savings are running out and people have more debt, and we're in an uncertain economy, too," Housser added. "That, combined with the ubiquity of point of sale tipping prompts, has people throwing their arms up and saying, 'This has always annoyed me and now all of a sudden it is a much bigger problem than it was because the economy is so uncertain.'"
Creating confusion
Digital payment systems' tipping prompts have also generated new, upending the old consensus that tips are generally owed in exchange for exceptional service.
A recent study from Pew Research Center found only 34% of Americans say it's easy to determine whether to leave a tip. These days, many aren't even sure what tipping is for.
"Is tipping something we're supposed to do because society tells us to do it? Is it something we're supposed to do because we're obligated to the server to do it? Is it something we do because we choose to do it?" Pew Research Center Drew DeSilver told CBS News.
Of the 38% of Americans who do plan on handing out holiday bonuses, 17% say they'll make donations to charities. The category of worker most likely to receive a holiday tip includes mail carriers, package delivery and newspaper delivery people, with 12% of consumers saying they'd tip these workers, according to the Achieve survey.
Only 6% of consumers said they would tip their hair stylists and beauticians, followed by 5% who said they would tip their garbage collectors.
Even fewer Americans responded saying they would tip their housekeepers, childcare providers, pet sitters fitness instructors and building staff.
for more features. | Consumer & Retail |
Labour has overturned huge majorities in two Tory strongholds: voters in Mid Bedfordshire have decided they want an MP for whom the seat isn’t merely a platform for a TV career, and the people of Tamworth have turned down the opportunity to be represented by someone who makes crass jokes about hungry children.
Calls for a general election sooner than the last possible moment (January 2025) will now increase, and are likely to be ignored, because the Conservatives will want as much time as possible to deliver on targets such as reducing inflation (see here for a full explanation). We’re going to hear a lot about Rishi Sunak’s “zombie government”.
The downside for the Conservatives of waiting longer is that more of the public realm is going to crumble under their watch. Headline inflation will come down for Sunak and Jeremy Hunt in the year to come, but for local government it is yet to peak, according to the Local Government Association (LGA), which released new figures this morning showing that the rising cost of providing council services will lead to a record £2.4bn funding gap for local government this financial year, and £4bn over the next two years.
More councils will go into “effective bankruptcy” by issuing Section 114 notices – of which there are different types, but the most common involves halting all spending except on wages and statutory services – before the next election.
Council services are mostly bought using service contracts, which are typically uprated against the previous year’s inflation (as is, for example, your mobile phone contract). The LGA says this means peak inflation is arriving for councils now, in the form of service contracts that will cost £15bn per year more by 2024/25 than they did in 2021/22. This difference alone is enough to swallow a quarter of the funding (£60bn) that councils currently receive from central government.
At the same time, councils have run up huge debts – total borrowing is up 50 per cent over the last decade, to £133.5bn – and debt across the global economy is becoming more expensive. Meanwhile, much of their long-term, low-interest debt – such as the £95.4bn owed to the Public Works Loan Board – has been invested in assets such as commercial property, and the dwindling returns from these investments make that debt harder to service.
Austerity is the root cause: in the decade from 2010, the government-funded spending power of local authorities fell by 52 per cent, according to the National Audit Office, leading to a 26 per cent decline in spending power overall. Worse still, cuts elsewhere demanded more spending on social care, so councils were forced to slash spending on services such as non-school education and housing. The £200m “potholes fund” given to the Department for Transport in the 2023 Budget is dwarfed by the £1,847m councils had to cut from transport in the first decade of austerity.
Northamptonshire County Council (Con) became “the ground zero of government breakdown” when it declared insolvency after attempting to outsource its way out of the conundrum, but Thurrock (Con) is the most notorious example of a council trying, unsuccessfully, to make money rather than saving it. Much like Silicon Valley Bank, Thurrock’s treasury management strategy was to borrow short (from other councils) and lend long (to high-risk businesses); as with Silicon Valley Bank, it did not go well. Many other councils have tried, with mixed results, to get other people to make money on their behalf; last week Warrington (Lab) began unwinding its position in a hedge fund that invests in junk bonds, a considerable risk that has not paid off.
The latest data on local government borrowing and investing gives some sense of how much gambling is going on: councils have invested £7.4bn in externally managed funds, £2.7bn in public companies, and £5.9bn in “other investments”, while lending between councils now adds up to £8.8bn.
Parties should not underestimate how influential this could be when it moves from a point on an Office for Budget Responsibility report to a question of bin collections and potholes – or how long it will take for the next government to clean up. | Inflation |
There’s been a lot of talk recently about NFTs, mainly that the vast majority of them are now damn near worthless.
Or at least, that’s what the detractors are saying. One report from crypto analysis firm dappGambl that’s making the rounds looks at the price of current NFTs using public crypto scanning sites like CoinMarketCap and NFT Scan found that 69,795 out of 73,257 NFT collections have a market cap of 0 (yes, zero) Ether. That means the vast majority of NFTs are not even worth the data it takes to load up each individual .JPG. Further, the data says that 95% of NFT owners have lost money because their digital tokens are worth squat.
The NFT proponents are still there, mumbling about how this is just a flash in the pan, and that there’s still reason to be bullish on their big dream for Web3 and digital scarcity. It’s also true that the market cap for NFTs has been down for more than a year. It’s also true that most NFT drops have failed, though even the “successful” NFT projects like the poster boys at Bored Ape Yacht Club aren’t exactly celebrating. As the report mentions, there’s little to be gained from flexing “on the have nots” if there’s no real market for NFTs as a whole.
Despite this downturn, there are still major companies that jumped on the NFT hype train last year and have yet to jump off. It’s a trolley problem for major brands. Either the company keeps on making NFTs in the vain hope it hasn’t wasted any money on a speculative tech bubble, or it bows its head and calls it quits. For instance, GameStop was hyping up its NFT marketplace a little more than a year ago, but now it’s looking to jump out of that crypto kiddie pool and get rid of its NFT store this November. The company is citing “regulatory uncertainty of the crypto space.”
Many of these companies simply let their projects stall out, at least publicly. Skin and body care brand Nivea hasn’t mentioned NFTs since it released its “The Value of Touch” branded NFT drop. The same can be said for Anheuser-Busch, which last released NFTs in 2022 to promote its non-alcoholic beer. The company has not publicized any new NFT projects in the year since. Those who still keep talking up NFTs can’t help but seem lame compared to two years ago. Samsung has promoted the fact that its 8k TVs can show off “realistic looking NFT digital art.” So, you mean, like a printed picture?
Other companies are more quiet about their continued exploration of the non-fungible token space. Recently revealed documents show CBS Studios filed a patent for more NFTs based on the Star Trek franchise. This was shortly before the company that had previously been supplying NFTs, Recur, went under during this incredibly frigid, seemingly never-ending crypto winter.
That being said, the new silent trend among some companies is to try and use NFTs to put products behind a paywall. Shopify built a service for merchants to build their own blockchain-based products. With it, sellers can literally “tokengate” users based on who decides to buy an NFT and those who don’t. A few brands are testing out similar setups to see who will be willing to spend money on worthless digital assets just for the chance of joining an exclusive club where you have the chance to spend even more money.
Some of these major brands may still be holding out hope customers would be willing to drop money on nonfungible assets. If so, they may be in for a rude awakening. Click through to see the 11 major brands that just can’t quit their dreams of lambos and going to the moon. | Crypto Trading & Speculation |
MCX Q2 Results Review - Contribution To SGF Hits Profitability: Motilal Oswal
MCX has migrated successfully to its new Commodity Derivatives Platform.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Research Report
Multi Commodity Exchange of India Ltd. reported a loss of Rs 191 million versus our expectation of a profit of Rs 16 million. Overall volumes improved 86% YoY to Rs 67 trillion. Total revenue grew 30% YoY to Rs 1.65 billion (in line with expectations).
MCX reported Ebit loss of Rs 353 million versus our forecast of an Ebit loss of Rs 184 million. This variance was primarily due to a contribution of Rs 114 million to Settlement Guarantee Fund in Q2 FY24. Additionally, an extra contribution of Rs 131.2 million was made in October- 23.
For H1 FY24, revenue increased 32% YoY to Rs 3.1 billion, whereas profit after tax declined 99% YoY to Rs 6 million.
We have cut our FY24 earning per share estimates by 22% to factor in the higher contribution to SGF, on account of an increase in open interest, while broadly maintaining our FY25 estimates.
We reiterate our 'Neutral' rating with a one-year target price of Rs 2,300 (premised on 30 times FY25E EPS).
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. | Stocks Trading & Speculation |
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NEW YORK (AP) — Donald Trump‘s company no longer prepares the sweeping financial statements that New York state contends were full of deceptive numbers for years, an executive testified Monday at the former president’s civil fraud trial.
Trump’s 2014 to 2021 “statements of financial condition” are at the heart of state Attorney General Letitia James‘ lawsuit against him, his company and some of its key figures. The defendants deny wrongdoing, but James says they misled lenders and insurers by giving them financial statements that greatly inflated Trump’s asset values and overall net worth.
Nowadays, the Trump Organization continues to prepare various audits and other financial reports specific to some of its components, but “there is no roll-up financial statement of the company,” said Mark Hawthorn, the chief operating officer of the Trump Organization’s hotel arm.
He wasn’t asked why the comprehensive reports had ceased but said they are “not required by any lender, currently, or any constituency.”
READ MORE: Judge rejects Trump’s request for a mistrial in his New York civil fraud case
Messages seeking comment on the matter were sent to spokespeople for the Trump Organization.
Hawthorn was testifying for the defense, which argues that various companies under the Trump Organization’s umbrella have produced reams of financial documents “that no one had a problem with,” as lawyer Clifford Robert put it.
A lawyer for James’ office, Andrew Amer, stressed that the suit is about Trump’s statements of financial condition, calling the other documents “irrelevant.”
Now finishing its second month, the trial is putting a spotlight on the real estate empire that vaulted Trump into public life and eventually politics. The former president and current Republican 2024 front-runner maintains that James, a Democrat, is trying to damage his campaign.
Trump asserts that his wealth was understated, not overblown, on his financial statements. He also has stressed that the numbers came with disclaimers saying that they weren’t audited and that others might reach different conclusions about his financial position.
During cross-examination, Hawthorn acknowledged that Trump’s financial statements could have been audited by the company, rather than just compiled, though he noted that auditing wasn’t required.
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 current proceeding is to decide remaining claims of conspiracy, insurance fraud and falsifying business records.
James wants the judge to impose over $300 million in penalties and to ban Trump from doing business in New York — and that’s on top of Engoron’s pretrial order that a receiver take control of some of Trump’s properties. An appeals court has frozen that order for now.
Associated Press writer Michael R. Sisak contributed.
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Politics
Nov 21 | Real Estate & Housing |
Rishi Sunak is reportedly considering an inheritance tax cut as he attempts to woo voters and create dividing lines with Labour, who are comfortably ahead in the polls.
The plans would make way for the eventual scrapping of the levy, the Sunday Times has reported.
However, Downing Street has sought to play down speculation that the prime minister was drawing up such plans regarding slashing the tax.
At present inheritance tax is charged at 40% for estates worth more than £325,000, with an extra £175,000 allowance towards a main residence if it is passed to children or grandchildren. A married couple can share their allowance, which means parents can pass on £1m to their children without any tax to pay.
The publication cited three sources who have said there is a “live discussion” at the highest level of government about reform of the levy.
Among the proposals under consideration is for Sunak to reduce the 40% rate in the budget in March, paving the way to abolish it in “future years”, the paper said.
A senior government source said: “No 10 political advisers have been looking at abolishing inheritance tax as something that might go in the manifesto. It’s not something we can afford to do yet.”
They added that it is the “most hated tax” in Britain, according to the polls.
“It’s the most hated tax at every income [level],” said the source. “People also feel it is just wrong to tax people on income that has already been taxed – and at a time when they are grieving.”
The latest figures for the tax year 2020-21, showed only 3.73% of UK deaths resulted in an inheritance tax charge.
Labour MP and shadow chief secretary to the Treasury Darren Jones said: “A year ago Liz Truss trashed the economy with unfunded tax cuts. Now Rishi Sunak is doing what Liz Truss wants.
“Abolishing inheritance tax – which 96% of people never pay – is an unfunded tax cut of £7.2bn per year. The biggest threat to the economy is the Conservative party.”
Downing Street sources insisted that formal plans were not being drawn up and pointed to Chancellor Jeremy Hunt’s insistence that tax cuts are “virtually impossible” given the state of the public finances.
Meanwhile, Sunak will pledge to keep the pension “triple lock” as he fights the next election, according to the Mail on Sunday,
The triple lock increases pensions each April by whatever is the highest out of three factors: average wage growth, inflation or 2.5%.
There had been discussions about ditching the guarantee in the next manifesto, however, Sunak has been told it would be “political suicide” to abandon it, said the paper, despite spiralling costs.
Under the current system, the full-rate state pension is £203.85 a week. This rose by 10.1% this year, and is due to increase to £221.20 next year.
The Mail on Sunday reported that voters’ reaction to the potential dumping of the policy was so negative Tory strategists have vetoed any changes.
One source told the publication that while the rise in wages and inflation had made it a “very expensive measure” the political cost of scrapping it would be “suicidal”. | United Kingdom Business & Economics |
Singapore Plans Investment Rules To Shield Critical Entities
Singapore plans to introduce a bill that sets out a new investment management regime for investors in a bid to ensure the continuity of so-called “critical entities.”
(Bloomberg) -- Singapore plans to screen investments more closely in sectors critical to its national interests, as part of a new regime to boost security without undermining the Asian financial hub’s reputation for ease of doing business.
The proposed Significant Investments Review Bill seeks to allow the government to review ownership or control transactions in the ‘critical entities,’ the Ministry of Trade and Industry said in a statement on Friday.
Singapore already relies on a range of laws to monitor and manage entities in sectors such as telecommunications, banking and utilities. The new bill, if passed, will be implemented in 2024 and seeks to widen the scope to any entity that is incorporated, operates or provides goods or services in Singapore.
Australia, China, Japan, the UK and the US have similar investment regimes to safeguard strategic sectors, including artificial intelligence, production of semiconductors, cybersecurity, aerospace, or energy. While Singapore didn’t specify the sectors, Minister for Trade and Industry Gan Kim Yong said he expects only a handful of critical entities to be designated under this bill.
“In an increasingly competitive world, there are increasing numbers of actors, both state and non-state, who will seek to advance their own interests and influence those of other countries,” said Nicholas Fang, director of security and global affairs at the Singapore Institute of International Affairs. Those tools can include military conflict or economic leverage, he added.
Such designated entities will be subject to controls, including approval for change in ownership, appointment of key officers, and official nod for even winding up or dissolution, the MTI said.
“It is critical for Singapore to remain open and connected to the world, and as such we must continually strengthen our position as a trusted hub for businesses to invest with confidence,” Gan said.
Here are some key details of the proposed bill:
- Buyers into designated entities are required to notify after becoming a 5% controller
- Must seek approval before becoming a 12%, 25%, or 50% controller, an indirect controller, or acquiring as a going concern (parts of) the business or undertaking
- Sellers are required to seek approval when ceasing to be a 50% or 75% controller
- Transactions that occur without the necessary approvals will be rendered void
- Materially affected parties can apply for validation notices
- Office of Significant Investments Review will be set up under MTI
--With assistance from Low De Wei and Ranjeetha Pakiam.
(Adds analyst comment in fifth paragraph.)
©2023 Bloomberg L.P. | Asia Business & Economics |
It was a short week and that was reflected in the amount of news we covered in fintech land last week. But there was still plenty to talk about, including Clair’s raise, some allegations against Deel and exclusive post-SVB growth numbers shared by banking services startup Mercury.
On-demand pay gets a boost
Some 82% of people are considered frontline workers who work on shifts and are likely paid hourly. The global pandemic shed a light on these workers when their fatigue and burnout resulted in “The Great Resignation” of hundreds of thousands of workers who left their jobs after feeling disrespected by employers and customers, as well as feeling they weren’t making enough money, according to a Pew Research study.
This ignited the tech sector — and subsequently the venture capital market — to build modern solutions to help employers give their employees the best experience possible and improve retention.
Much of the early solutions focused on productivity and communication — consider Flip, Blink, AskNicely, Salt Labs and Snapshift. More recently, we’ve seen startups attracting some solid VC funding for on-demand pay offerings for workers: Rain, DailyPay and Minu to name a few.
The latest is Clair, which raised $25 million in equity funding for its approach to helping workers get paid after completing a shift. The company also announced $150 million as part of a new consumer lending program from partner bank Pathward, which holds the FDIC-insured accounts for Clair and provides the wage advances to frontline workers.
What makes Clair more compelling than its competitors, explains co-founder and CEO Nico Simko, is that rather than take on the wage advance risk itself, Pathward does that.
“We’re the first provider that went to a bank and convinced the bank to do those advances, basically as micro loans, $50 loans,” Simko said. “Most early-stage, on-demand pay companies are the ones advancing the funds. By convincing a bank to do this, it gives regulatory certainty to our partners and consumers because there is a national bank backing it.”
Clair is already working with 10,000 employers; however, the U.S. Chamber of Commerce recently reported that industries, including healthcare, accommodation and food, continue to have a high number of job openings, so we’re likely to see the need for employee benefits like these also grow. — Christine
Maza update
On June 28, I wrote about Maza, a fintech company claiming to help undocumented immigrants gain access to the U.S. financial system by providing them with an individual tax identification number (ITIN) and banking services. A few days after that article went live, fellow fintech enthusiast Jason Mikula published a newsletter challenging some of Maza’s claims. We reached out to a couple of immigrant-focused organizations but unfortunately did not hear back. But we did hear back from Maza regarding Mikula’s allegations. Here is what Maza co-founder and CEO Luciano Arango wrote via email:
We apologize that our website included some unclear and outdated language, all of which has been corrected. In fact, our bank previously notified us of this, but unfortunately we did not make the changes immediately due to an internal Maza communications issue. All of the updates have now been made, and we have since put in place new procedures to ensure oversights like this do not happen again.
In addition, he added that Maza updated its website and app for further clarity around eligibility and compliance:
- Eligibility: Maza’s services have always been available to all U.S. residents who can provide proper documentation verifying their identity. We’ve updated our terms, disclosures to make that clearer. We have always sought to provide a wealth of information to our customers regarding the purpose of an ITIN, including all the benefits and limitations of obtaining one.
- Compliance: The uses of certain logos and language in Maza’s marketing materials have since been updated as well. Maza customers’ deposits are held by our banking partner, Blue Ridge Bank, N.A. to be eligible for FDIC insurance, and the individual tax ID numbers (ITINs) we provide to customers are issued by an IRS certified acceptance agent.
Arango also said he wanted to address a few topics raised in Mikula’s newsletter, which Maza viewed as “incorrect or incomplete”:
- BaaS: As I stated during the interview, Maza is not a bank, which was accurately portrayed in the TechCrunch piece.
- Expiring ITINS: The newsletter stated that Maza does not make it clear that users’ ITINs will expire if they do not use them to file tax returns. This is not accurate. Maza does make customers aware of when their ITIN is expiring.
- Monthly Charges: The newsletter stated that Maza charges a monthly fee, which is incorrect. The information referenced in the newsletter was part of an early test of alternative revenue models that were never put into practice, and no customers were ever charged for Maza’s services in this way.
To be clear, Maza said that it offers the banking portion (checking account, debit card) of its services for free with no monthly charge. There is a separate service for ITINs, where Maza charges $150 a year to help obtain the ITIN and then renew. Arango emphasized that “[o]ne can be a banking customer their whole lives and *never* decide to get an ITIN. He/she, in that case, will *never* pay a $150 annual fee. Conversely, one can register for Maza’s ITIN service and have no interest in the banking component. He/she would pay the $150 annual fee and engage with the free banking product if they like (just like a non-ITIN user).”
The company also claimed that it does not market specifically to customers based on their documentation status, noting that “all U.S. citizens are eligible to apply, including those that need an ITIN because they cannot obtain a SSN.” — Mary Ann
Weekly News
As reported by Mary Ann: “Last week, Senator Steve Padilla (D-San Diego) sent a letter to Stewart Knox, California Secretary of Labor, alleging that fintech-turned HR decacorn Deel has hired hundreds of employees but classified them as independent contractors. By doing so, Senator Padilla charged, Deel is “effectively denying them the full suite of employment and social safety net benefits and labor protections they are entitled to, including healthcare, retirement, unemployment insurance, worker’s compensation, collective bargaining, and overtime pay.” Further, Senator Padilla claimed that Deel “appears” to be advising its own customers (which include the likes of Nike, Subway, Reebok, Forever 21 and Klarna) “to misclassify their own employees and evade taxes in California,” as well as avoid paying employee benefits. Deel denied the allegations, saying they were “completely made up and regurgitated from old news, most likely based on competitor hearsay.” Knox responded that his office would look into the information that Padilla provided and “follow up” with their findings. More here.
As reported by Rita Liao: “The regulatory crackdown that has shaken up China’s fintech industry since late 2020 appears to be coming to a close with the imposition of hefty fines on the country’s two digital payments giants: Tencent and Alibaba.” More here.
Mary Ann interviewed Mercury CEO and co-founder Immad Akhund about the fintech company’s recent surge in customers (he shared new customer growth figures exclusively) following the collapse of SVB, which you can read about here. You can also hear more about that growth as well as Immad’s advice on how startups can avoid “falling into a startup death spiral” in the podcast below. Did you know that Immad has backed over 300 startups, including Airtable, Rappi, Substack, Deel and Jasper.AI, as an angel investor?? We didn’t either!
As reported by Harri Weber, ICYMI: “Four years after partnering with Apple on the launch of the Apple Card, Goldman Sachs may be eyeing the exits. The Wall Street Journal reported that Goldman is “looking for a way out” of its high-profile deal with Apple, which recently expanded to include savings accounts for Apple Card holders. The investment banking firm is apparently in talks to offload the partnership to American Express, the WSJ report added, but so far nothing seems to be set in stone, nor is it clear whether Apple would support the handoff.” More here.
Other headlines
Fundings and M&A
Seen on TechCrunch
And elsewhere
Join us at TechCrunch Disrupt 2023 in San Francisco this September as we explore the impact of fintech on our world today. New this year, we will have a whole day dedicated to all things fintech, featuring some of today’s leading fintech figures. Save up to $600 when you buy your pass now through August 11, and save 15% on top of that with promo code INTERCHANGE. Learn more. | Banking & Finance |
The ravaging of retirement accounts is on a roll.
The number of participants taking hardship withdrawals from their 401(k) was up 13% in the third quarter versus the second quarter, according to a new survey from Bank of America, which tracks about 4 million clients’ employee benefit programs.
That tallies up to more than 18,000 plan participants, the highest level in the past five quarters since Bank of America started tracking this data, and up 27% compared to the number of withdrawals during the first three months of the year.
To be clear, while these numbers have ticked up, they are still a very low percentage of overall plan participants.
Taking a loan from retirement savings is undeniably a quick cash move during uncertain times, but consequences exist.
"In looking at our data across 401(k) plans, economic hardships continue to be a factor," Lisa Margeson, managing director, Retirement Research and Insights Group at Bank of America, told Yahoo Finance.
"While there could be several factors at play, the economic environment, following a year of high inflation and the rising cost of living, could be influencing this ongoing trend."
Read more: Retirement planning: A step-by-step guide
According to the Bank of America survey, the average worker hardship withdrawal from a 401(k) plan in the third quarter of the year was $5,070, on par with the average withdrawal in previous quarters this year.
Borrowing from retirement savings was also up. The percentage of 401(k) participants who got a loan from their workplace plan in the third quarter was 2.5%, the same as in the second quarter and up from 1.9% in the first three months of the year.
The average loan amount: $8,530, consistent with the average loan amounts borrowed in the first six months of the year.
The generations with the highest percentage of loans outstanding were Generation X (23.3%) who were born between 1965 and 1980, followed by millennials (15.1%) who were born between 1981 and 1996.
Loans, however, are not permitted from IRAs or from IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRA plans.
"Things are starting to crack," Cary Carbonaro, a certified financial planner, told Yahoo Finance. "This is a direct result of the Fed raising rates. We are just starting to see the effects of these hikes — whether it is auto loans at almost 10% mortgages at 8% or credit cards at 20-plus%. Add on the inflation and resumption of the student loan payments, budgets are stretched to the max for almost everyone but the very wealthy."
The fall-out from a retirement raid
Withdrawals, of course, are the most damaging for savers because an early withdrawal triggers some weighty taxes and penalties.
A withdrawal from your 401(k) account is typically taxed as ordinary income. Also, you’ll pay a 10% early withdrawal penalty before age 59½, unless you meet one of the IRS exceptions. These include certain medical expenses, qualified tuition payments, and up to $10,000 for first-time homebuyers. Some employer plans, too, will allow a non-hardship withdrawal.
With a loan, it’s not a total loss.You pull money from your retirement savings and then pay it back to yourself, typically within five years, with interest — the loan payments and interest go back into your account. Depending on what your employer's plan allows, you can take out as much as 50% of your savings, up to a maximum of $50,000, within a 12-month period.
One caution: If you leave your current employer, you might have to repay your loan in full straightaway. When you can't repay the loan, it's considered defaulted, and you'll be on the hook for both taxes and a 10% penalty if you're under 59½.
Financial experts are rarely on board with clients tapping their 401(k) plans until you're up and over the 59½ year old hump.
"Typically, taking a loan from your 401(k) should be one of the last resorts since you will miss out on potential market appreciation as the borrowed amount is not invested," Ryan Haiss, a certified financial planner at Flynn Zito Capital Management in Garden City, N.Y., told Yahoo Finance.
Another fallout from using your retirement cache for short-term expenses is that by pulling cash out, even for a short period, your retirement funds miss out on compounding growth on the borrowed amount.
"We haven’t had many clients reach out to us about drawing from their 401(k) just yet," Haiss added. "Before investing, we strongly encourage our clients to build an emergency fund, which can be anywhere from 3 to 6 months of expenses. That would of course be the best place to draw from in the event of an emergency."
If taking a loan or withdrawals from your 401(k) is unavoidable, then "you should attempt to continue contributions while repaying the loan, especially up to the employer match, if available," Haiss said. "Otherwise, you are missing out on ‘free money’ from your employer."
Kerry Hannon is a Senior Reporter and Columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist, and the author of 14 books, including "In Control at 50+: How to Succeed in The New World of Work" and "Never Too Old To Get Rich." Follow her on Twitter @kerryhannon. | Personal Finance & Financial Education |
China Local Governments Are Finding It No Longer Cheap To Borrow
China’s local authorities are finding it more expensive to sell bonds, the latest sign of rising stress.
(Bloomberg) -- China’s local authorities are finding it more expensive to sell bonds, the latest sign of rising stress as policymakers ramp up borrowings to stimulate growth and defuse short-term payment risks.
Of the local government yuan bonds sold so far this year, 50 carry coupons with a premium of more than 25 basis points with comparable sovereign debt, according to Bloomberg-compiled data. That’s the most since 2020.
The jump is a departure from the success enjoyed by these borrowers in the past two years, when they had priced almost every note with a yield spread of less than 25 basis points, the lower end of an unofficial band set by regulators. The higher coupons come as local authorities grapple with dwindling land sales and taxation, as a housing-led economic slump persists.
If the demand indigestion worsens, it will heap pressure on the People’s Bank of China to step up liquidity support or ease monetary policy further to fund Beijing’s stimulus plans.
“Banks are already well fed after absorbing a large amount of local government bonds,” said Liu Lin, deputy general manager of investment banking at Bank of China Ltd. “Pricing may need to better reflect the market dynamics in the fourth quarter.”
Chinese banks owned 83% of the debt at the end of August, the lowest proportion based on Bloomberg-compiled data going back to 2019.
A surge in the debt sales and signs of economic stabilization — raising fears of less easing — have hurt the world’s second-largest bond market in recent months, pushing benchmark sovereign yields to a fourth-month high at one point.
The splurge comes because local authorities had used up over 90% of their special bond quotas for 2023 in the first three quarters, Bloomberg-compiled data show, while sales by the central government also picked up in September.
Debt Deluge
More supply is arriving, including a 1 trillion yuan ($137 billion) program to help regional governments refinance hidden debts — a risk that Beijing is keen to reduce. Policymakers are also weighing additional sovereign bond sales of at least 1 trillion yuan for spending on infrastructure, Bloomberg News reported on Oct. 11.
Local authorities traditionally exert strong influence on guiding banks to bid at lower yields, said Yang Hao, a fixed-income analyst at Nanjing Securities Co. However, when sentiment weakens, “the low yields become harder to sustain”, he said, adding that demand looks weaker for long-dated notes from fiscally vulnerable regions.
Provinces such as Hunan, Jilin, Jiangxi and Anhui are among those paying higher coupons this year, Bloomberg-compiled data show.
PBOC
To be sure, the chances of defaults by local governments remain slim, even for those with strained finances, said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc. “If local debt yields deviate too much from those on sovereigns, we would expect some intervention or guidance from government to correct it.”
The nation’s central bank may also be called upon to do more.
The prospect of increased government bond supply means “the PBOC may need to step up its liquidity support and lower interest rates to accommodate the issuance, which adds conviction to our call for another cut to RRR and a policy rate cut in the fourth quarter,” Goldman Sachs Group Inc. analysts including Maggie Wei and Hui Shan wrote in a note, referring to banks’ reserve requirement ratio.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Asia Business & Economics |
Stocks To Watch: Asian Paints, Wipro, Adani Energy, RVNL, Biocon, IDFC First Bank, Grasim, Manappuram Finance
Here are the stocks to watch before going into trade today.
U.S. stocks pared losses after posting big gains this month, with traders awaiting the latest inflation data, remarks from Federal Reserve speakers and results from giant retailers, Bloomberg reported.
The S&P 500 index and Nasdaq 100 fell by 0.21% and 0.25%, respectively, as on 11:18 a.m. New York time on Monday. The Dow Jones Industrial Average rose by 0.01%.
Brent crude was trading 1.03% higher at $82.27 a barrel. Gold was higher by 0.13% at $1,942.68 an ounce.
The S&P BSE Sensex closed 326 points down, or 0.50%, at 64,933.87, while the NSE Nifty 50 ended 82 points, or 0.42%, lower at 19,443.55.
The Nifty 50 ended below 19,500, and Sensex was below the 65,000 mark.
Overseas investors remained net sellers of Indian equities for the 14th day in a row on Monday. While foreign portfolio investors offloaded stocks worth Rs 1,244.4 crore, domestic institutional investors mopped up equities worth Rs 830.4 crore, the NSE data showed.
The Indian currency closed flat at 83.33 against the U.S dollar on Monday.
Earnings Post Market Hours
Grasim Industries Q2 FY24 (Consolidated, YoY)
Revenue up 10% at Rs 30,221 crore vs Rs 27,486 crore.
Ebitda up 31.8% at Rs 6,053 crore vs Rs 4,591 crore.
Margin at 20.02% vs 16.7%.
Net profit up 34.1% at Rs 2,024 crore vs Rs 1,509 crore.
Manappuram Finance Q2 FY24 (Standalone, YoY)
Total income up 17% at Rs 1,456 crore vs Rs 1,245 crore.
Interest income up 13.4% at Rs 1,405 crore.
Net profit up 20.3% at Rs 420 crore vs Rs 349 crore (Bloomberg estimate: Rs 386.9 crore).
NRB Bearings Q2 FY24 (Consolidated, YoY)
Revenue up 8.3% at Rs 2,790 crore vs Rs 2,575 crore.
Ebitda up 48.4% at Rs 455.2 crore vs Rs 306.7 crore.
Margin at 16.31% vs 11.9%.
Net profit up 85.6% at Rs 246.3 crore vs Rs 132.7 crore.
Narayana Hrudayalaya Q2 FY24 (Consolidated, YoY)
Revenue up 14.3% at Rs 1,305.2 crore vs Rs 1,141.6 crore (Bloomberg estimate: Rs 1,293.1 crore).
Ebitda up 26.4% at Rs 308.1 crore vs Rs 243.7 crore (Bloomberg estimate: Rs 288.5 crore).
Margin at 23.6% vs 21.34% (Bloomberg estimate: 22.30%).
Net profit up 34.2% at Rs 226.7 crore vs Rs 168.9 crore (Bloomberg estimate: Rs 178.8 crore).
Stocks To Watch
Asian Paints: The company's original installed production capacity of the Khandala plant has been increased to 4 lakh Kilolitre per annum from 3 lakh Kilolitre per annum in order to meet the medium-term capacity requirements of the company for Rs 385 crores.
Wipro: Designit Tokyo Co., a step-down subsidiary of Wipro Ltd., has been voluntarily liquidated with effect from Nov. 13, 2023. Revenue contribution from such unit is 0.004% as of March 2023.
Adani Energy Solutions: The distribution arm of Adani Energy Solutions Ltd., Adani Electricity Mumbai Ltd., announced a tender offer to buyback up to $120 million of its outstanding 3.949% $1,000 million senior secured notes due 2030. The tender offer is being fully funded through its cash surplus and internal accruals.
RVNL: The company received Rs 311 crore LoA from Central Railways for the construction of tunnels and bridges in Madhya Pradesh. Time period by which the order is to be executed is 18 months.
PTC Industries: India-based PTC Industries and Safran Aircraft Engines, the French global leader in aero engine design, development, and manufacturing, announced a multi-year contract to develop industrial cooperation for LEAP engines casting parts. Under the terms of the contract, PTC Industries will produce titanium-casting parts for Safran Aircraft Engines.
Biocon: Biocon Biologics, a subsidiary of Biocon ,has announced that MHRA, Medicines and Healthcare products Regulatory Agency in the U.K., has granted marketing authorization for YESAFILI, a biosimilar of Aflibercept. In September, YESAFILI, received marketing authorization approval from the European Commission for the European Union.
Indian Overseas Bank: The Bank decided to increase the base rate by 35 bps w.e.f. Nov. 15, 2023. The effective base rate will be 9.45%.
IDFC First Bank: The company received PFRDA nod for the merger of IDFC and IDFC Financial Holding Co with IDFC First Bank. Company also received BSE and NSE's nod for merger of IDFC and IDFC Financial Holding Co with self.
GMM Pfaudler: Promoters to buy 4.5 lakh shares or 1% stake from Pfaudler Inc. at Rs 1,700 per share. Acquisition cost is at a premium of 1.4% to the stock's previous close of Rs 1,676.05 on NSE.
Knowledge Marine & Engineering Works: The company bagged a project from Mumbai Port Authority for hiring of two dock tugs for a period of 7 years for an amount of Rs. 34.49 crores.
Electronics Mart India: Commercial operations of the company’s one of the stores in Hyderabad were temporarily disrupted due to a fire accident during the intervening night of 12th and 13th November 2023. The estimated amount of loss suffered by the company is yet to be ascertained.
Pfizer: Milind Patil has resigned as a Director on the Board of Directors of the company with effect from close of business on Nov. 13, 2023, consequent to the expiry of his 5 year term as Executive Director.
New Listing
ASK Automotive: The shares will debut on the stock exchanges on Wednesday at an issue price of Rs 282. The Rs 834-crore-IPO was subscribed 51.14 times on the final day. Bids were led by institutional investors (142.41 times), non-institutional investors (35.47 times) and retail investors (5.70 times).
Bulk Deals
Swan Energy: Jainam broking bought 23.7 lakh shares (0.89%) at Rs 430.21 apiece, while 2I capital PCC sold 20 lakh shares (0.75%) at Rs 427.81 apiece, Montego Realty sold 23.38 lakh shares (0.88%) at Rs 432.06 apiece and Kasturi vintage sold 32.84 lakh (1.24%) at Rs 428.21 apiece.
MSPL: SBI sold 19.29 lakh shares (0.5%) at Rs 18.53 apiece.
Nuvama: The Pabrai Investment Fund sold 1.8 lakh shares (0.51%) at Rs 2,785.17 apiece.
Insider Trades
Bajaj finserve: Promoters Rishab Family Trust Rajivnayan Bajaj and Rajivnayan Bajaj sold 13 lakh and 2.55 lakh shares, respectively, while promoters Madhur Securities, Rupa Equities, Rahul Securities, and Shekhar Holdings bought 3.89 lakh shares each on Nov. 8.
Pledged Share Details
Inox wind: Promoter Inox Wind Energy released a pledge of 79.5 lakh shares on Nov. 9.
Trading Tweaks
Price band revised from 5% to 2%: Usha Martin.
Ex/record date Interim dividend: Emami, PDS, SAT industries,Steelcast, Chambal Fertilizers and chemicals, Indraprastha gas.
Move into short-term ASM framework: Antony Waste handling cell, BMW Industries, Carysil, Swan Energy.
Move out of short-term ASM framework: Vodafone Idea.
Who's meeting whom
NMDC: To meet analysts and investors on Nov. 17.
Endurance Technologies: To meet analysts and investors on Nov. 15.
MCX: To meet analysts and investors on Nov. 17.
Punjab Chemicals and Crop Protection: To meet analysts and investors on Nov. 17.
Kotak Mahindra Bank: To meet analysts and investors on Nov. 22.
BASF India: To meet analysts and investors on Nov. 17.
F&O Cues
Nifty November futures fell 0.26% at 19,488, at a premium of 4.5 points.
Nifty November futures open interest rose by 0.39% by 874 shares.
Nifty Bank November futures fell 0.11% to 44,005, at a premium of 114 points.
Nifty Bank November futures open interest fell by 7.35% by 13,116 shares.
Nifty Options Nov. 16 Expiry: Maximum call open interest at 19,500 and maximum put open interest at 19,400.
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Securities in the ban period: Chambal Fertilisers and Chemicals, Delta Corp, Hindustan Copper, India bulls housing finance, Sail, Manappuram finance, Zee Entertainment
Disclaimer: AMG Media Networks Ltd. (AMNL) currently owns 49% stake in Quintillion Business Media Ltd. (QBML), the owner of BQ Prime Brand. AMNL has entered into an MOU to acquire the balance 51% stake in QBML. Post acquisition, QBML will become a wholly owned subsidiary of AMNL. | India Business & Economics |
Indulgent Personal Loan Borrowers Face A Moment Of Reckoning
The lending rates on personal loans are likely to rise by 50–100 basis points across the system, bankers say.
Suraj Kumar is under a pile of debt. In about six years, his burden has doubled to Rs 16 lakh.
The Mumbai-based media professional has at least six credit cards from different banks in a desperate effort to repay the personal loans taken from non-bank lenders since 2017. What started as an easy solution to arrange funds for personal use has now led to a mountain of financial troubles.
Either way, Kumar (who didn't want to disclose his real name) will not be able to opt for another personal loan hereon, especially after the Reserve Bank of India increased risk weight on unsecured personal loans and credit card receivables by all lenders. This is likely to push up the cost of borrowing for retail users, making it difficult for those like Kumar to refinance their debt.
The lending rates on personal loans are likely to rise by 50–100 basis points across the system, owing to the RBI's move, said bankers. Currently, personal loans are priced at 10–15% on an annual basis. Any increase in rates would inevitably slow down personal loan growth, at least for a while, bankers said.
Under the RBI's tighter norms, unsecured personal loans will attract a credit risk weight of 125% compared with 100% earlier. For non-banking financial companies, consumer loans will attract a risk weight of 125%. In case of credit card debt, these have been raised by 25 percentage points to 150% and 125% for banks and non-banks, respectively. The tougher norms exclude home, education, vehicle, gold and microfinance loans.
As a consequence, banks and NBFCs would have to adjust their lending practices to meet the new capital requirements.
For some well-capitalised banks, the 25-percentage-point increase is not significant to compel a curb in unsecured credit as they can absorb the hit without passing on the costs to borrowers, according to bankers.
State Bank of India Chairperson Dinesh Khara, however, said the RBI's new norms would naturally bring down unsecured credit growth for the banking system.
"Currently, unsecured credit growth is overrated, and there is a need to bring it down," Khara had said on the sidelines of the FIBAC 2023 Conference. "Rise in risk weights will impact SBI's capital adequacy by 60–65 bps." India's largest bank has sizable exposure to unsecured retail loans, at about 13% of total loans, of which 9% are personal loans.
Exuberance In Unsecured Lending
Since the beginning of 2020, personal loans in the Indian banking sector grew around 82% and credit card loans grew 105%, compared with overall banking sector's credit growth of around 72%, according to the RBI's data.
The pivot in consumer behaviour after the coronavirus pandemic had led to a manifold surge in unsecured personal loans, particularly for consumption. Ballooning household debt has also pushed borrowers to tap unsecured credit to refinance their earlier dues.
The RBI's latest report shows that the household savings in India slumped to a 47-year low at 5.1% of the gross domestic product in the last financial year, mainly on account of a rise in household financial liabilities. This implies that people are relying more on borrowings to cover their consumption demands.
This is the "exuberance" in consumer credit, RBI Governor Shaktikanta Das said at the FIBAC event, calling the increase in risk weight is a pre-emptive measure and lenders must stress-test their loan books.
At least, anecdotal evidence suggests the governor's caution is warranted.
Ayush Yadav, a 21-year-old student based out of Bengaluru, took multiple small-ticket loans from January this year from two fintech platforms. He pays an interest rate as high as 55% per annum.
While he can take a loan up to Rs 10,000 only at such convenience, he will not be able to afford another such personal loan if the interest rates increase too much, Yadav said. A loan exceeding Rs 10,000 would require him to provide salary slips, which he cannot furnish.
Adhil Shetty, chief executive officer of BankBazaar, suggests borrowers must cut down on discretionary spending and use savings to repay the loan.
"Small-ticket personal loans will become harder to find because the cost of capital is going up on them," Shetty said. "Consumers with a credit score below 750, who want to take a small-ticket personal loan, the supply is going to shrink for them."
Das has also stressed upon the need to account for risks while pricing of such loans. While most bankers say that the risk assets are adequately priced to bear the extent of build-up in stress in unsecured credit, some hold a different view.
Inappropriate pricing of risk assets is a "little alarming," according to PR Seshadri, CEO of the South Indian Bank Ltd. This points at a possibility of increase in lending rates. In the September quarter, the South Indian Bank's personal loan book grew 48% year-on-year to Rs 2,107 crore.
"We need to be paid for the risk that you are taking," Seshadri said. "We believe that in certain categories, the pricing is not appropriate."
"In terms of convenience, personal loans will always grow quickly," the South Indian Bank CEO said. "But the growth rate in personal loans across the sector will moderate."
Delinquencies May Rise Temporarily
In the last monetary policy meeting in October, the RBI governor had cautioned against the risks of "very high growth" in personal loans and urged lenders to strengthen their internal surveillance mechanisms and address the build-up of risks.
As banks are most likely to become more risk-averse due to increased credit risk weight, they may tighten their lending criteria.
Borrowers, especially those with lower credit scores or in sectors perceived as riskier, may find it harder to qualify for loans or may face more stringent approval processes. More so, the borrowers who rely on such loans for funding requirements would be in a fix.
This would eliminate a large section of borrowers and result in an increase in delinquency levels for a while.
As the measure itself is aimed at containing stress in personal loan segments and is a pre-emptive move, analysts said it is still early to assess any long-term impact on asset quality.
"Any event, which restricts credit flow, could result in some kind of buildup in overdue. This holds true for most loan segments," AM Karthik, sector head-financial sector ratings at ICRA Ltd., said.
"So, whatever headline stress seen at this point in time could be absorbed considering the provision and capital buffers of the lenders, but any further buildup of stress is certainly contained by this new regulation," he said.
A part of the potential rise in delinquencies in the coming months would be on account of stricter underwriting measures taken by banks and NBFCs at the time of disbursing unsecured credit, analysts said.
"They will be a bit more prudent," Karthik said.
However, the base situation is that any rise in delinquencies due to inability of borrowers to finance their debt through personal loans would be offset by no or lesser incremental stress from tighter underwriting measures.
In such a situation, Kumar has no other option than to follow what BankBazaar's Shetty advises: manage cash flows to repay the hefty amount of Rs 16 lakh. | India Business & Economics |
The new Cost-of-Living Adjustments (COLA) go into effect on October 1 each year and are active through the following year. For the upcoming federal fiscal year (Oct. 2023 to Sept. 2024), the U.S. Department of Agriculture Food and Nutrition Service increased allotments for 48 states and Washington, D.C., as well as Alaska, Guam and the U.S. Virgin Islands. Hawaii was the only state that saw a decrease in benefits, from $1,794 to $1,759 for a family of four.
So, what is the maximum SNAP EBT benefit for the rest of 2023?
Here are the maximum allotments for SNAP in the 48 contiguous states and D.C., according to the USDA website:
Household size 1: $291
Household size 2: $535
Household size 3: $766
Household size 4: $973
Household size 5: $1,155
Household size 6: $1,386
Household size 7: $1,532
Household size 8: $1,751
Each additional person: $219
Shelter cap values increased — shelter caps being the amount of money SNAP recipients can deduct for rent, repair costs and utilities that exceed half of their net income. Unless one person in the household is elderly or disabled, the shelter cap increased by $48, up to $672, in the 48 contiguous states and D.C.
The resource limit for all states and territories remains unchanged at $2,750. For households where at least one person is age 60 or older or is disabled, the limit will also remain unchanged at $4,250.
Monthly income eligibility standards increased for the 48 states and D.C., Alaska, Hawaii, Guam and the U.S. Virgin Islands. Here is the maximum gross monthly income cap, which is 130% of the federal poverty level, for the 48 contiguous U.S. states and D.C.:
Household size 1: $1,580
Household size 2: $2,137
Household size 3: $2,694
Household size 4: $3,250
Household size 5: $3.807
Household size 6: $4,364
Household size 7: $4,921
Household size 8: $5,478
Each additional person: $557
Josephine Nesbit contributed to the reporting for this story.
More From GOBankingRates
This article originally appeared on GOBankingRates.com: Food Stamps: What Is the Maximum SNAP EBT Benefit for 2024? | Inflation |
The Republican-controlled House is once again targeting the Internal Revenue Service, this time voting to cut some of the agency’s funding to pay for a $14.3 billion emergency aid package for Israel.
The bill, put forth by the House’s newly minted speaker, Mike Johnson, passed the House Thursday, but is unlikely to even get brought up for a vote in the Democrat-controlled Senate. Many Democrats are committed to supporting an overhaul of the IRS, funded with an $80 billion federal investment they approved last year through the Inflation Reduction Act.
But Johnson’s bill highlights how cutting funding from the IRS, which has been repeatedly proposed by Republicans, doesn’t actually save money.
In fact, the nonpartisan Congressional Budget Office said Wednesday that cutting $14.3 billion from the IRS would increase the deficit by almost $12.5 billion over the next 10 years.
So instead of offsetting the $14.3 billion that House Republicans wants to send to Israel, and making the bill budget neutral, the combination of sending aid and cutting IRS funding would add a total of about $26.8 billion to the deficit over a decade, according to the CBO.
IRS cuts would reduce tax revenue
Cutting IRS funding would hamper its enforcement efforts and could lead to fewer audits of tax cheats. As a result, the CBO and other budget experts agree that the agency would not be able to collect as much tax revenue.
The CBO estimates that the IRS would take in nearly $26.8 billion less in revenue over a decade if Johnson’s proposal takes effect.
Nearly 60% of the new IRS funds approved by the Inflation Reduction Act are expected to be used for strengthening enforcement efforts. The IRS intends to crack down on high-income earners and large corporations that have not been paying what they owe in federal taxes.
By ramping up enforcement on millionaires this year, the IRS has already collected $160 million in back taxes.
“House Republicans’ legislation would increase the deficit by helping wealthy individuals and corporations cheat on their taxes, increasing the tax burden on honest, hardworking families who pay their taxes with every paycheck,” said Treasury spokesperson Ashley Schapitl this week.
House Republicans make IRS funding cuts a priority
No Republicans voted for the Inflation Reduction Act, which included $80 billion for the IRS, when it passed Congress last year.
Since then, the House GOP has made several efforts to claw back some of the money, and some representatives have even called for abolishing the IRS altogether.
Republicans were successful in rescinding $20 billion from the IRS as part of a deal reached earlier this year to address the debt ceiling.
Some Republican lawmakers have repeatedly made the exaggerated claim that the IRS will be using the new funds to hire 87,000 auditors who will go after average taxpayers and small business owners. The Biden administration has said that taxpayers earning less than $400,000 a year won’t face an increase in taxes due to the new funding.
The federal investment in the IRS is also being used to help modernize the agency and improve customer service after suffering from years of budget declines.
The new funds have already helped improve taxpayer services at the IRS. In the 2023 filing season, it answered 3 million more calls and cut phone wait times to three minutes from 28 minutes compared with the year before.
The IRS is currently working on building its own free tax filing program, known as Direct File, that will launch as a limited pilot program next year.
The agency has also put a plan in motion to digitize all paper-filed tax returns by 2025. The move is expected to cut processing times in half and speed up refunds by four weeks.
CNN’s Morgan Rimmer contributed to this report.
This story has been updated with additional information. | Inflation |
A council has been told that it must take action to reduce its multi-million pound overspend or it will face bankruptcy.
Somerset Council has an estimated budget gap of £80m for 2024/25, with a further £50m forecast for 2025/26.
The warning from auditors comes just six months after the unitary council was formed in April.
Deputy leader Liz Leyshon said: "The projected overspend needs to be reduced significantly."
Somerset Council was formed by the merger of Mendip, Sedgemoor, Somerset West & Taunton, South Somerset District Councils and Somerset County Council in a move that had meant to save about £18m a year.
However, budget forecasts show a large overspend which is expected to grow unless major savings are made.
Auditors have stopped short of taking formal action but said they need to see significant changes in the forecasts if the Liberal Democrat-run Somerset Council is to avoid being issued with a Section 114 notice, which effectively means bankruptcy.
Ms Leyshon said she "understood people's disappointment" at the news coming so soon after the new council was formed.
"We could not have gone into local government reorganisation at a worse possible time," she said.
"When business cases were written we were in a different place. If we can't get the overspend down in this year then we will not be able to set a budget for next year.
"We need the government to take note and we need to do our own work in reducing the overspend.
"We will have some draw on reserves this year but we cannot cover overspend by pulling on reserves, you only spend your reserves once.
"We have delivered savings when we set the budget for the current year in February but the pressures are much, much greater and the savings needed are on the same scale - much greater."
Uncertain future
The deputy leader warned that Somerset Council would lose the ability to commit to new spending and take decisions if it was issued with a Section 114 notice.
She said: "(It) is the equivalent of bankruptcy but no council closes down so its not the same as a company going bankrupt, but the government send in commissioners to run the council.
"I don't think anyone in local government can be truly confident about what the future holds."
Councillor David Fothergill, leader of the opposition Conservatives and former leader of Somerset County Council, said he was disappointed but not surprised and that May's local elections had not helped with continuity.
"I think after the election there was a loss of momentum, a loss of urgency and the loss of expertise in taking the project forward and I'm afraid that momentum has not been regained now," he said.
"I think a 114 bankruptcy notice is possible in the next couple of years.
"The way to avoid that is for the leadership and the administration to get a grip of the challenge and to really make some tough decisions because if you don't do them the council will fail and that will have a devastating impact on the people of Somerset," he added. | United Kingdom Business & Economics |
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NEW YORK (AP) — Eric Trump returned to the witness stand Friday to testify at the civil fraud trial accusing his father of exaggerating his wealth and the value of his assets to deceive banks and insurers.
It’s the second day of testimony from Eric Trump, who helps run the former Republican president’s real estate empire that is now threatened by the lawsuit brought by New York Attorney General Letitia James.
READ MORE: Donald Trump Jr. says he never worked on key documents at father’s civil fraud trial
Eric Trump, an executive vice president of the Trump Organization, testified on Thursday that he wasn’t involved with financial statements at the heart of the case. James’ office says those documents were fraudulently exaggerated to secure loans and make deals.
Another executive of his father’s company testified that Eric was on a video call about his father’s financial statement as recently as 2021. But the son insisted he had no recollection, telling the court: “I’m on a thousand calls a day.”
Donald Trump and other defendants — including sons Donald Jr. and Eric — deny any wrongdoing. The former president has called the case a “sham,” a “scam,” and “a continuation of the single greatest witch hunt of all time.”
The civil lawsuit is separate from four criminal cases the former president is facing while he campaigns to retake the White House in 2024.
The former president, who has periodically appeared in court to watch the trial, is expected to follow on the witness stand on Monday. His daughter Ivanka Trump is also scheduled to testify next week after an appeals court late Thursday denied her request to delay her testimony.
READ MORE: Trump fined $10,000 over comment about judge’s staff in New York civil fraud trial
The Trumps are being summoned to the stand by James’ office, but defense lawyers will also have a chance to question them and can call them back as part of the defense case later.
Judge Arthur Engoron has ordered that a court-appointed receiver take control of some Trump companies, putting the future oversight of Trump Tower and other marquee properties in question. But an appeals court has blocked enforcement of that aspect of Engoron’s ruling for now.
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At first glance, the sharp fall in the rate of inflation to 6.8% puts the UK on a path to a more normal economic situation.
However, the underlying measures of inflationary pressures across the economy, are no longer going in the right direction.
The falls in domestic energy bills have caused the headline rate of inflation to come down for a second month in a row.
But services inflation was back up to 7.4%, the joint highest level since 1992. This mean that core inflation, which strips out volatile food and energy, stopped falling, remaining at 6.9%.
This figure shows how much inflation is left in the economy, after the direct impacts of the energy shock has passed through.
Core inflation are the most closely watched measures by the Bank of England. This set of figures increase the likelihood of further rate rises in September and perhaps October too.
The international comparisons show that in the year to July, despite inflation falling everywhere, the UK rate remained higher than comparable economies. Core inflation in Germany, France, across the EU, and in the US, fell in July, while remaining stuck in the UK.
So what we are left with is the mechanical effect of the peak in domestic energy bills when the energy price cap came into effect to limit the amount suppliers could charge per unit.
The next energy price cap change will be announced on 25 August. That will kick in in October and should bring the inflation rate closer to 5%.
Food price inflation has eased but remains very high at 14.8%, so the cost of living crisis remains for millions of households. But the inflationary genie has spread to other parts of the economy, where it does not tend to fall so quickly.
The UK recovery is becoming a tale of three economies. The level of energy prices and the ongoing rises in food prices and rents continue to squeeze the poorest households.
In the middle, homeowner households are being squeezed by rate rises and mortgage costs, but are adjusting their spending.
But at the top end pandemic savings and low rates until last year continue to cushion spending on leisure, travel, and restaurants. It's why top retailers are increasing their profit forecasts, and airlines and travel companies are reporting bumper custom.
So even as many millions of households still feel squeezed by the cost of living crisis, there are likely to be further interest rate rises. Demand in some parts of the economy remains robust.
The PM yesterday said there is "light at the end of the tunnel". Today's figures confirm that we can see that tunnel out of this. It may yet be some time before the light is reached.
What to do if I can't pay my debts
Interest rate rises mean borrowing on mortgages and credit cards becomes more expensive. Here are some things you can do if you can't afford your repayments:
- Talk to someone. You are not alone and there is help available. A trained debt adviser can talk you through the options. Here are some organisations to get in touch with.
- Take control. Citizens Advice suggest you work out how much you owe, who to, which debts are the most urgent and how much you need to pay each month.
- Ask for a payment plan. Energy suppliers, for example, must give you a chance to clear your debt before taking any action to recover the money
- Ask for breathing space. If you're receiving debt advice in England and Wales you can apply for a break to shield you from further interest and charges for up to 60 days.
Tackling It Together: More tips to help you manage debt | United Kingdom Business & Economics |
Emerging-Market Funding Gets Creative as Dollar Bonds Dry Up
At the BRICS summit in Johannesburg this week, a key item on the agenda was reducing dollar dependence across emerging markets. In bond sales, it’s already happening.
(Bloomberg) -- At the BRICS summit in Johannesburg this week, a key item on the agenda was reducing dollar dependence across emerging markets. In bond sales, it’s already happening.
The sale of dollar bonds from developing countries sunk to the lowest since 2021 in August as global yields spiked to multi-year highs and 15 emerging nations traded at distressed levels. Only $1.4 billion has been raised in emerging debt this month, compared with $4.5 billion in August 2022 and average monthly sales of $15.4 billion this year.
The upshot of the collapse is that alternative borrowing instruments are becoming more mainstream in emerging and frontier markets, attracting more investors pursuing priorities such as environmental, social and governance targets. The lower supply of plain-vanilla bonds also tends to support prices for the debt that investors already hold.
“If demand is greater than supply that tends to be good for bonds,” said Philip Fielding, co-head of emerging markets at Mackay Shields UK, who said he’s buying emerging debt in the secondary markets for his $134 billion bond house as new issuance abates. “In many cases it makes sense to be invested and then switch into a cheap new issue rather than wait.”
Tighter global monetary conditions are pushing both borrowers and investors to seek alternative funding routes such as loan syndication, conservation-linked securities and local-currency bonds. Such instruments can ease governments’ costs of borrowing while minimizing currency risk and uncertainty over refinancing.
For some, shifting away from the dollar also has a geopolitical motivation.
“The latest BRICS headlines point even more in the direction of new countries willing to form alternatives from the standard Western blocs,” said Sergey Goncharov, a money manager at Vontobel Asset Management in New York. “As EM countries issue less debt, they instead pivot towards alternatives — regional lenders, supranational banks, local markets.”
The stalling of China’s economic recovery and a spike in Treasury yields to the highest levels since before the global financial crisis have also helped fuel the search for alternative funding. Bahrain’s $1 billion sale of dollar bonds in July is the only non-investment grade deal so far in the quarter. Beyond smaller sales by investment-grade issuers, activity has almost ground to a halt.
“For higher-rated issuers who can wait to issue, they would rather issue later to have a better chance of borrowing cheaper,” said Reza Karim, an investment manager at Jupiter Asset Management in London. “For some of the high-yield issuers, the rate is too high and the access to capital markets is also limited.”
Partly due to the dearth of new sales, the average yield on emerging-market sovereign debt has eased recently to 8.26% as of Friday, after hitting a nine-month high of 8.43% when China’s economic troubles sparked a selloff.
“Less supply would be positive from a technical standpoint, especially if the issuers are going to the loan market,” said Uday Patnaik, London-based head of emerging-market fixed income at Legal & General Investment Management. “The problem would be if the issuer could not find alternative funding sources.”
Conservation Capital
One area for which capital is more readily available is environmental protection. Gabon, where nine-tenths of the landmass is covered by trees, completed a $500 million debt-for-nature deal this month to help refinance a portion of its debt and raise funds for marine conservation.
Though there were hiccups to complete the sale — the issue got delayed and had to be priced at a higher-than-anticipated yield — it’s the latest in a string of transactions showing that committing to conservation goals can help governments overcome borrowing challenges. Belize, Barbados and Ecuador have struck similar deals, and Mozambique is in talks with Belgium for one.
Read More: Social Bonds Make a Comeback with Global Sales at Two-Year High
“Sovereigns should consider them,” said Carlos De Sousa, an emerging-markets money manager at Vontobel Asset Management AG in Zurich. “It saves money to the sovereign, deploys money for nature conservancy, increases the supply of green and blue bonds, and boosts bond prices of the sovereign in question. Everyone wins, basically.”
But nature-linked deals are complex and require lengthy preparation by issuers. Borrowers who need funds more quickly are going for loan syndications, where multiple lenders contribute. In Africa alone, there were 225 such loans worth $32 billion extended to governments and businesses over the past year.
“Market conditions will remain challenging, especially for the most vulnerable frontier economies,” said Bartosz Sawicki, a market analyst at Polish financial technology company Conotoxia. “Consequently, the rise in popularity of syndicated loans, which spread the risk of default between parties, will probably prevail.”
Local Bonds
But if reducing reliance on dollar-bond sales is the goal, nothing beats developing an active local market. Countries around the world are now looking to attract more foreign investors to their local bonds.
In Latin America, where real yields are higher than the emerging-market average, investors bought $8.5 billion of local bonds this year through early July, the most since 2019. Peru, Chile and the Dominican Republic were the most prominent issuers. Some of the proceeds were earmarked for environmental projects, making them more attractive to ESG investors.
Read more: Wall Street Sees Blueprint in Suriname’s Oil-Linked Debt Swap
New Development Bank, the multilateral lender founded by the BRICS nations, said it aims to increase the share of its local-currency borrowing to 30% from less than 20%, and issued its first rand-denominated bonds last week. It says bonds denominated in Indian rupees are next.
What to Watch
- China reduced a levy on stock trades to 0.1% to 0.05%, alongside other measures, triggering a brief surge in mainland shares that quickly fizzled
- Turkey and India will release 2Q GDP data. Bloomberg Intelligence expect Turkey’s data to show that economic activity slowed down slightly, even as it was supported by elections-related spending
- Poland will report its inflation data for August. Consensus is for CPI to show that prices continued to decline for a second consecutive month. Sri Lanka’s is also expected to fall amid declining food prices
- China’s Caixin manufacturing PMI will likely signal a steeper retrenchment in August, as persistent weakness in demand at home and from abroad takes a toll
- Hungary’s central bank will make a decision on interest rates
- Both Ghana and Hungary will be up for sovereign rating reviews by Moody’s
--With assistance from Carolina Wilson.
(Adds China measures in What to Watch section.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
Pencil Maker DOMS Industries IPO To Open On Dec 13
The company's IPO comprises a fresh issue aggregating up to Rs 350 crore and an Offer For Sale (OFS) aggregating up to Rs 850 crore by promoters.
Pencil maker DOMS Industries is set to launch its Rs 1,200-crore Initial Public Offering (IPO) on Dec. 13.
The three-day maiden public issue will conclude on Dec. 15 and the anchor book of the offer will be opened for a day on Dec. 13, according to the Red Herring Prospectus (RHP).
The company's IPO comprises a fresh issue aggregating up to Rs 350 crore and an Offer For Sale (OFS) aggregating up to Rs 850 crore by promoters.
Under the OFS, corporate promoter F.I.L.A. -- Fabbrica Italiana Lapis ed Affini S.p.A. -- will offload shares worth Rs 800 crore and individual promoters -- Sanjay Mansukhlal Rajani and Ketan Mansukhlal Rajani will sell shares to the tune of Rs 25 crore each.
The funds raised through the fresh issue would be used for setting up a new manufacturing facility to expand the company's production capabilities for a range of writing instruments, watercolour pens, markers and highlighters, as well as for general corporate purposes.
The company designs, develops, manufactures, and sells a range of stationary and art products, primarily under the flagship brand 'DOMS' and sub-brands C3, Amariz, and Fixy Fix, in the domestic market as well as in over 40 countries, covering the US, Africa, the Asia-Pacific, Europe, and West Asia.
The products are classified into seven categories, including scholastic stationery, scholastic art material, paper stationery, kits and combos, office supplies, hobby and craft, and fine art products.
As of FY23, the company's core products such as pencils and mathematical instrument boxes, enjoy a market share by value of 29% and 30% respectively.
JM Financial, BNP Paribas, ICICI Securities, and IIFL Securities are the book-running lead managers to the issue. | Stocks Trading & Speculation |
Banking Sector Well Prepared To Withstand Reverses From Hardening Yields: RBI Paper
The banking sector is "well prepared" in the current phase of hardening yields, said a paper by RBI officials published on Thursday.
The banking sector is "well prepared" in the current phase of hardening yields, said a paper by RBI officials published on Thursday.
The timely creation of the "investment fluctuation reserve" has helped the lenders as it provides adequate buffers to withstand trading losses, the paper published in the RBI Bulletin for October said.
In the paper which does not represent the institutional views of the RBI, authors Radheshyam Verma and Rakesh Kumar noted that hardening of G-sec (government securities) yield is a market risk that banks confront in an environment of rising inflation and monetary policy normalisation process.
It said there may be some disproportionate impact of the reversal of the monetary policy stance on bank profitability, and added that bigger banks are in a better position to withstand changing policy environment courtesy the advantage of scale.
"Overall, the banking sector appears to be well prepared in the current phase of hardening of yields as the timely creation of investment fluctuation reserve (IFR) provides adequate buffers to withstand trading losses," the paper said.
The empirical analysis suggests that the short-term yield and slope have a differentiated impact on trading income (negative) and net interest margin (positive), the paper said.
For larger banks, the impact of short-term yield on trading income was found to be smaller, it said, adding the net interest margin was found to be a bit more responsive to the short-term rate in the case of larger banks.
With the systemic impact of interest rates on financial markets, the MTM (mark-to-market) losses have been a major source of concern for both banks and regulators, it said.
"Going forward, strengthening of risk management practices and internal controls by banks remains of paramount importance," it said. | Banking & Finance |
Dialling 999 as my baby’s face swelled to unrecognisable proportions was not how I had hoped our early days of weaning would go. The telltale signs of allergy had plagued my daughter since she was a newborn: the “colic”; the eczema that weeped and crusted despite the cocktail of steroid creams; the hives that erupted at random across her tiny face and eyes. I knew as I mixed peanut butter into her breakfast that morning there was a possibility that things could be about to go sideways. But what I didn’t know was just how much our lives were about to change.Discovering she was severely allergic to peanuts when she was six months old was just the first piece of the puzzle. By the time she was crawling, we knew she was allergic to dairy, soya, egg, tree nuts, avocado and kiwi, too, along with a handful of other more obscure foods. Those with experience of parenting allergic children will know what I mean when I say it’s almost broken me. The stress is undoubtedly compounded by the financial burden that comes with keeping them safe, which largely goes unrecognised.A recent study by Queen’s University Belfast found that people with food allergies spend an extra £1,400 a year due to their conditions. “Food allergy is a costly condition, to those who live with it, and the multiple stakeholders with which they interact,” wrote the authors of another 2022 study.UK food price rises soared at a record rate in December, and those affecting alternative milks, vegan yoghurts and cheeses, and gluten-free items have been particularly dramatic, according to a recent survey by the Allergy Team. Between March 2021 and June 2022, Alpro Junior Growing Up Soya Drink increased in price from £1.08 to £1.70 at Tesco, a rise of 57%; while two pints of semi-skimmed cow’s milk rose from 80p to 99p during the same period – by 24%. In Sainsbury’s during the same period, a loaf of Genius gluten-free soft white bread rose from £2 to £2.90, compared with an ordinary white loaf, which increased from 55p to 65p. Some 70% of parents surveyed said they had seen prices rise for the foods they relied on to keep their children safe. For families shopping for highly restrictive diets, many have no choice but to find the cash for expensive free-from products, or simply go without.Why is going without so dangerous? Alternative and “free-from” products are often fortified with vitamins D and B12, and calcium, to replace vital nutrients the children won’t get from the milk, cheese, nuts or fruit they’re allergic to. “Parents know that when you’ve got a child with allergies, you need to be making sure their meals are nutritionally sound, particularly when you start excluding more than one food group,” says paediatric dietitian Lucy Upton, who runs The Children’s Dietitian and has already seen an “escalation” over the past six months of parents making drastic cuts in order to be able to afford the most nutritious “free-from” brands. One mother of three children with allergies tells me that her and her partner “are probably eating less than we should” in order to pay for safe foods for their children. The cost of living crisis has increased her family’s food bills by 30%. In a worst-case scenario, families who are priced out of these products could see their children’s nutritional status, growth, brain development and milestones at risk, says Upton.All new parents can tell you that feeding a toddler is a trial at the best of times, but trying to feed an allergic toddler when the stakes are this high could be considered a form of torture. After an eight-month wait, an NHS dietitian helped me figure out how best to feed my daughter. Not all milk substitutes are made equal, I have learned, and now we buy a brand of oat milk that is high in calories and fortified vitamins. But it is also £1.50 a litre – £2 at my local supermarket, much pricier than supermarket own brands, and more than double the price of cow’s milk at roughly 70p a litre.Having access to an NHS allergy service allows the professionals to problem-solve to find the cheapest, most nutritious products for a family’s budget. But some parents are facing waiting lists for an allergy clinic appointment of almost two years, says Upton. “You can’t bumble along for that long in the dark,” she says, adding that many parents, in desperation, are turning to the private sector, despite the high costs.Eating in our formative years sets the tone for our relationship with food for years to come, which is why pleasure, fun and exposure to different colours and textures are so important for children. When my daughter attends other children’s birthday parties, I always bring cake and snacks that she can eat, even if such allergy-friendly foods are very expensive to buy or bake. For many families with allergic children, eating can no longer extend further than meeting their most basic nutritional requirements. Is it really so extravagant to expect more?More than 40% of British adults now suffer from at least one allergy, with figures on the rise. Rates of paediatric allergy are growing at an alarming rate, along with incidences of serious food allergy. If it can happen to my family, it can happen to yours. “This new generation appears less likely to outgrow food allergy than their predecessors, with long-term implications for disease burden,” wrote the authors of a recent paper.We are staring down the barrel of an allergy epidemic that has gone unrecognised by government for too long. If investing in NHS allergy services looks too much like Nero fiddling while Rome burns, then now is the time to think creatively on realistic solutions, such as subsidising “free-from” products, offering specific food vouchers to families with allergies, increasing access to food prescriptions, and overhauling our food labelling legislation, which is woefully unfit for purpose. As food prices steadily climb, the cost of doing nothing is only getting higher. Lucy Pasha-Robinson is a writer and commissioning editor | United Kingdom Business & Economics |
Beyond Meat cuts non-production workforce by 19% as plant-based meat demand weakens
The reduction of is part of a broader corporate review, the company says.
Beyond Meat is cutting 19% of its non-production workforce after a weaker-than-expected third quarter.
The plant-based meat company said Thursday that the reduction of about 65 employees is part of a broader corporate review. The company is also considering exiting some product lines, changing pricing, shifting its manufacturing and restructuring its Chinese operations.
Beyond Meat's shares rose 20% in afternoon trading Thursday.
“We anticipated a modest return to growth in the third quarter of 2023 that did not occur,” Beyond Meat President and CEO Ethan Brown said in a statement.
U.S. demand for plant-based meat has plummeted this year. U.S. retail dollar sales of fresh meat alternatives, like sausage and burgers, were down 21.5% this year through Oct. 8, according to Circana, a market research firm. Frozen plant-based meat sales, including items like tenders and nuggets, were down 6%.
Brown has said that plant-based meat sales were hurt by high inflation, which sent some shoppers back to cheaper animal meats. Plant-based meat is also fighting perceptions that it's overly processed and unhealthy, stoked in part by ads released by rival food companies.
Beyond Meat plans to release its third-quarter earnings on Nov. 8. In the meantime, it said it expects revenue of $75 million for the July-September period. That would be 8.5% lower than the same period a year ago.
Beyond Meat also said it now expects full-year net revenue in the range of $330 million to $340 million, which would be 19% to 21% lower than the previous year. Wall Street had expected full-year sales of $365 million, according to analysts polled by FactSet.
The layoffs aren't the first for Beyond Meat. Last year, it laid off around 240 people in multiple rounds of cuts, citing pressure from inflation and intensifying competition.
The El Segundo, California, company said it saw weaker sales in U.S. retail and food service and lower-than-expected return on promotional programs. The company recently launched U.S. ads that try to counter negative perceptions.
Beyond Meat has seen a better reception for its products in Europe, where its burgers and chicken nuggets are featured on McDonald's menus. McDonald's has tested Beyond Meat's products in the U.S. but hasn't added them to its permanent menu. | Consumer & Retail |
Making a Big Purchase? Follow These 5 Steps Get the Biggest Discount and Boost Your Rewards
KEY POINTS
- By taking a few extra steps before checkout, you can save more money and boost your rewards.
- You can use cash back websites, coupon codes, credit card offer programs, and credit card rewards to save money and earn more back on purchases you were going to make anyway.
I'm a big fan of getting a good deal and earning rewards. Before making an expensive online purchase, I go through a routine to ensure I save as much money as possible and maximize my rewards potential. Doing this means I keep more money in my bank account and reach my cash back and credit card rewards goals sooner. Here's what you need to do to get the biggest discount possible and boost your rewards when shopping online.
Do this to get the best deal and earn more rewards
Life is expensive, so any money saved can be a win for your personal finances. When making more costly purchases, paying attention to sales and discount opportunities to keep more money in your checking account can be especially worthwhile.
If you use cash back apps or cash back credit cards, taking steps to maximize your rewards potential can also be beneficial. Who doesn't like free money? I know I do. Here's what I recommend doing before you complete the checkout process for an expensive purchase.
1. Compare prices to find the best deal
The first step is to do some price comparison research. Making a purchase when an item is on sale is an excellent way to keep more money in your pocket. Sometimes, multiple retailers have the same products on sale, so comparing prices is worthwhile. Otherwise, you could end up paying more than you need to for your purchase.
2. Use coupon code apps to score a bigger discount
Many retailers have coupons or promotional codes to help you get a more significant discount. You can use cash back apps and websites to find active codes. If an eligible code is available, you can enter it at checkout to save more money on your purchase. I usually spend a few moments comparing codes before I check out. Some websites will send you a coupon code in exchange for joining their email newsletter list.
3. Check to see if you can use a cash back app to earn more rewards
The next step I take is to see if the retailer partners with cash back apps like Rakuten. By using cash back apps and browser extensions, you can earn cash back rewards on purchases you already planned to make. These websites are easy to use, and the earnings can add up quickly if you're a frequent shopper, so don't forget to use these money-saving tools.
4. Review your credit card offers to boost your rewards potential
Some credit card companies offer additional ways for cardholders to boost their rewards with credit card offers. Amex Offers and Chase Offers are examples of such programs. Through these programs, you can activate offers with popular retailers and earn cash back rewards for eligible purchases. Most offers pay eligible cardholders as a statement credit to their credit card account. Don't miss this step to maximize your cash back earning potential.
5. Pay with the credit card that offers the most rewards
The final step I take is to consider what credit card to use during the checkout process. I have several credit cards in my wallet, but some earn more rewards than others. If you want to maximize the cash back, points, or miles that you earn, consider which credit card will offer the highest reward potential for the purchase category you plan to make and use it as your payment method.
Being strategic when you shop can be a win for your wallet
Once you get used to this routine, it only takes a few extra moments to get a better discount and earn more rewards. The next time you shop online, consider whether you can save more money or boost your cash back earnings by utilizing resources like coupon apps, cash back apps, and rewards credit cards. These valuable tools continue to help me save and earn more on my purchases.
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An Italian holiday may be a priceless experience for those who have enjoyed all this country has to offer. But the summer of 2023 will go down as one of the priciest in history after a slew of price gouging scandals at cafes and restaurants that have affected foreign tourists and Italians alike.
Take the couple charged 2 euros ($2.20) to cut their ham sandwich in half on the shores of Lake Como, or the young mother in the Roman seaside town of Ostia charged 2 euros to have her baby’s bottle heated in the microwave.
A pair of tourists were charged 60 euros ($65) for two coffees and two small bottles of water at the Cervo Hotel in Sardinia, although the owner told CNN the prices were plainly listed and the charge is mostly for the view over the expensive yachts of the nearby port.
Tourists were also charged 2 euros for an extra – empty! – plate near Portofino in northern Italy, and 10 cents for a sprinkle of cocoa on a cappuccino at a Lake Como coffee bar. Italian cafes rarely use cocoa on cappuccinos, hence why they justified the charge.
These cases, dubbed “crazy receipts” by local media, have been documented by the consumer protection group Consumerism No Profit, which reports a staggering 130% increase in prices in tourist areas in Italy this summer.
Easy targets
It’s not just restaurateurs driving prices. High fuel and energy prices have made it an incredibly expensive summer.
The prices have become so out of control—some 240% higher than other Mediterranean destinations —that many Italians are abandoning their usual local haunts for their August vacations, instead opting for coastal countries like Albania and Montenegro, which don’t quite offer the same Italian charm or cuisine, but are affordable.
Even Italian prime minister Giorgia Meloni took a short beach vacation in Albania this year, her office confirmed.
The group Confcommercio predicts that only 14 million Italians will take their vacation at home around the traditional Ferragosto or August 15 break, around 30% down from pre-Covid figures.
“The very strong price increases in the air transport, accommodation and holiday package sectors has profoundly changed the holiday habits of Italians,” said Furio Truzzi of consumer watchdog group Assoutenti.
Truzzi added that the prices won’t stop Italians from vacationing, but it will affect how long they stay.
“And the paradox is that despite the reduction in holiday days, spending will be higher: the 2023 summer holidays will cost Italians 1.2 billion euros more than in 2022, albeit with fewer nights away from home,” he said.
Foreign tourists have more than made up for the decline, with Italy’s tourism ministry predicting that 68 million tourists will visit Italy over the summer, more than three million more than pre-pandemic figures, making them the easiest target for price gouging.
Americans and Asian tourists have come in droves this year, Italy’s tourism ministry says, replacing the higher spending Russian tourists who tended to spend more and stay longer, but who are absent this year because of the war in Ukraine.
Worst offenders
One of the worst offenders are beachfront establishments which rent sunbeds and umbrellas.
In Puglia, daily rental for two sunbeds and one umbrella during the week averages 50 euros, and nearly double on the weekend, but further north, the price to sit in the front row on a crowded beach can be triple that, starting at around 150 euros ($163) a day during the week, especially in the more exclusive areas like Portofino—that is if the front row umbrellas aren’t already reserved by locals.
“Sharm el Sheik [in Egypt] costs less, which is why so many Italians are going abroad,” Paolo Manca of the Federalberghi (Hotel Federation) says, explaining that to get to traditional Italian vacation spot like the island of Sardinia, a family can pay thousands a day, starting with an expensive ferry or airfare, inflated hotel prices and expensive meals.
When asked what they paid for two Aperol Spritzes at a café in Piazza Navona in central Rome, Americans Betsy and James Cramer said they were embarrassed to admit how much they paid. But they knew they would pay more to sit at a popular location.
“We’ve overpaid for gelato, for spritzes and for our hotel, but we knew it going in,” Betsy told CNN. “We had this trip planned before Covid and have been dreaming about it even though we read the headlines about expensive prices.
“You just have to read the menu and ask if there are extra charges. And if there are, then you have to either walk away or just eat it.”
‘Year zero’
While high prices may be impacting the average tourist, luxury tourism has risen this year, according to Italy’s tourism ministry, which says a record-breaking 11.7 million travelers will stay in five-star hotels in Italy this summer, according to reservation records.
“In August, high-end tourism continues to grow, unlike normal tourism,” Antonio Coviello, a researcher with Italy’s National Research Center wrote in a report on luxury travel issued this week, adding that the risk of over-tourism in the luxury sector is a concern because it could drive up prices in the mid-range travel sector to accommodate the bigger spenders.
Italy’s tourism minister, Daniela Santanche, said that despite a season marked with bad headlines about price gouging and fewer Italians traveling, the summer has been a defining moment in Italy’s post-pandemic recovery.
“I would not speak of a failure, but neither of a success,” she said this week. “I would say that we can finally start discussing tourism again and plan our next moves. In fact, this is the first year without pandemic restrictions, and therefore, in a certain sense, we can speak of 2023 as ‘year zero’.” | Europe Business & Economics |
The open internet once seemed inevitable. Now, as global economic woes mount and interest rates climb, the dream of the 2000s feels like it’s on its last legs. After abruptly blocking access to unregistered users at the end of last month, Elon Musk announced unprecedented caps on the number of tweets—600 for those of us who aren’t paying $8 a month—that users can read per day on Twitter. The move follows the platform’s controversial choice to restrict third-party clients back in January.This wasn’t a standalone event. Reddit announced in April that it would begin charging third-party developers for API calls this month. The Reddit client Apollo would have to pay more than $20 million a year under new pricing, so it closed down, triggering thousands of subreddits to go dark in protest against Reddit’s new policy. The company went ahead with its plan anyway.Leaders at both companies have blamed this new restrictiveness on AI companies unfairly benefitting from open access to data. Musk has said that Twitter needs rate limits because AI companies are scraping its data to train large language models. Reddit CEO Steve Huffman has cited similar reasons for the company’s decision to lock down its API ahead of a potential IPO this year.These statements mark a major shift in the rhetoric and business calculus of Silicon Valley. AI serves as a convenient boogeyman, but it is a distraction from a more fundamental pivot in thinking. Whereas open data and protocols were once seen as the critical cornerstone of successful internet business, technology leaders now see these features as a threat to the continued profitability of their platforms.It wasn’t always this way. The heady days of Web 2.0 were characterized by a celebration of the web as a channel through which data was abundant and widely available. Making data open through an API or some other means was considered a key way to increase a company’s value. Doing so could also help platforms flourish as developers integrated the data into their own apps, users enriched datasets with their own contributions, and fans shared products widely across the web. The rapid success of sites like Google Maps—which made expensive geospatial data widely available to the public for the first time—heralded an era where companies could profit through free, mass dissemination of information.“Information Wants To Be Free” became a rallying cry. Publisher Tim O’Reilly would champion the idea that business success in Web 2.0 depended on companies “disagreeing with the consensus” and making data widely accessible rather than keeping it private. Kevin Kelly marveled in WIRED in 2005 that “when a company opens its databases to users … [t]he corporation’s data becomes part of the commons and an invitation to participate. People who take advantage of these capabilities are no longer customers; they’re the company’s developers, vendors, skunk works, and fan base.” Investors also perceived the opportunity to generate vast wealth. Google was “most certainly the standard bearer for Web 2.0,” and its wildly profitable model of monetizing free, open data was deeply influential to a whole generation of entrepreneurs and venture capitalists.Of course, the ideology of Web 2.0 would not have evolved the way it did were it not for the highly unusual macroeconomic conditions of the 2000s and early 2010s. Thanks to historically low interest rates, spending money on speculative ventures was uniquely possible. Financial institutions had the flexibility on their balance sheets to embrace the idea that the internet reversed the normal laws of commercial gravity: It was possible for a company to give away its most valuable data and still get rich quick. In short, a zero interest-rate policy, or ZIRP, subsidized investor risk-taking on the promise that open data would become the fundamental paradigm of many Google-scale companies, not just a handful.Web 2.0 ideologies normalized much of what we think of as foundational to the web today. User tagging and sharing features, freely syndicated and embeddable links to content, and an ecosystem of third-party apps all have their roots in the commitments made to build an open web. Indeed, one of the reasons that the recent maneuvers of Musk and Huffman seem so shocking is that we have come to expect data will be widely and freely available, and that platforms will be willing to support people that build on it.But the marriage between the commercial interests of technology companies and the participatory web has always been one of convenience. The global campaign by central banks to curtail inflation through aggressive interest rate hikes changes the fundamental economics of technology. Rather than facing a landscape of investors willing to buy into a hazy dream of the open web, leaders like Musk and Huffman now confront a world where clear returns need to be seen today if not yesterday.This presages major changes ahead for the design of the internet and the rights of users. Twitter and Reddit are pioneering an approach to platform management (or mismanagement) that will likely spread elsewhere across the web. It will become increasingly difficult to access content without logging in, verifying an identity, or paying a toll. User data will become less exportable and less shareable, and there will be increasingly fewer expectations that it will be preserved. Third-parties that have relied on the free flow of data online—from app-makers to journalists—will find APIs ever more expensive to access and scraping harder than ever before.We should not let the open web die a quiet death. No doubt much of the foundational rhetoric of Web 2.0 is cringeworthy in the harsh light of 2023. But it is important to remember that the core project of building a participatory web where data can be shared, improved, critiqued, remixed, and widely disseminated by anyone is still genuinely worthwhile.The way the global economic landscape is shifting right now creates short-sighted incentives toward closure. In response, the open web ought to be enshrined as a matter of law. New regulations that secure rights around the portability of user data, protect the continued accessibility of crucial APIs to third parties, and clarify the long-ambiguous rules surrounding scraping would all help ensure that the promise of a free, dynamic, competitive internet can be preserved in the coming decade.For too long, advocates for the open web have implicitly relied on naive beliefs that the network is inherently open, or that web companies would serve as unshakable defenders of their stated values. The opening innings of the post-ZIRP world show how broader economic conditions have actually played the larger role in architecting how the internet looks and feels to this point. Believers in a participatory internet need to reach for stronger tools to mitigate the effects of these deep economic shifts, ensuring that openness can continue to be embedded into the spaces that we inhabit online.WIRED Opinion publishes articles by outside contributors representing a wide range of viewpoints. Read more opinions here. Submit an op-ed at [email protected]. | Interest Rates |
“We only hopped on a call maybe 36 hours ago, and then we closed the deal 24 hours ago,” Lucy Guo, the founder of Passes, told TechCrunch.
Guo declined to disclose the terms of the deal, but Fanhouse is a much more established platform. Fanhouse, founded in 2020, raised a $20 million Series A led by Andreessen Horowitz last year, while Passes raised a $9 million seed led by Multicoin Capital, a crypto-focused fund. Passes, still in its beta phase, is only currently working with about 40 creators.
Despite the speediness of the deal, not all of Fanhouse’s founders were sold. Rosie Nguyen, also a creator known as @jasminericegirl, announced her departure from the company, just hours before The Information scooped the news of the deal.
“I made the difficult decision to resign from Fanhouse earlier today,” Nguyen tweeted. “I started the company to help creators, like myself, who needed to provide for themselves & their families. I care deeply about creators and want to help creators in a way that will better align with my values.”
She added that she did not benefit financially from the deal and left the company without severance or an exit package.
The sudden changes at Fanhouse sparked concern among creators. Some people were worried about a tweet of Guo’s in which she stated that Passes was working on technology that could optionally make AI likenesses of creators. These concerns escalated after Twitch streamer Riley Rose pointed out that Passes does not have content guidelines on its website.
“It’s just that [Fanhouse’s] content guidelines are very, very specific,” Guo told TechCrunch. She said that since Fanhouse used Stripe as its payment processor, the company had to be very clear with users about what they can and cannot post. “We do have content guidelines, it’s just more lax.”
Still, there are not currently content guidelines available on Passes’ website. Guo said Passes will be more lenient with what kinds of content it allows, since it is using a different method of payment processing, but she declined to share more details. Aside from telling creators what they can and can’t post, content guidelines are also necessary for protecting users from harassment, hate speech and other unsavory behavior.
“We have high-risk credit card processing,” Guo said. “So even though we don’t do any nudity on our site, if we were to do it, it’s allowed – the credit card processors are okay with it.”
Passes has a built-in customer relationship management (CRM) system, which Guo says has helped creators better tailor their content toward their highest-paying fans.
“We’ve been stealing creators from every platform, and at bare minimum, have been 2x-ing their income,” Guo told TechCrunch. “It’s annoying competing with platforms for creators, so we could just eliminate one and bring all the creators over seamlessly.”
Nguyen, however, says that income is not the most important factor for creators when choosing to join a new platform.
“It’s not just about the money, it’s about what platform is going to take care of me,” Nguyen told TechCrunch. “Not every platform cares about its creators, and creators want to feel safe and care for over anything else.”
Creator economy companies are unique, because when two companies merge, they aren’t just combining assets. They’re responsible for the creators – essentially small businesses – who use their platform to make a living, and it can be difficult to transition to a new platform with just a few weeks’ notice. And when startups have so much investor pressure to expand, that growth can come at the expense of creators, whose businesses often scale best for the long term in slow, sustainable ways.
While Guo assured creators that Passes has their best interests at heart, Nguyen was doubtful, hence leaving Fanhouse amid the deal’s closing.
“It can be hard for companies that have taken VC money to align the incentives of their investors with those of their users,” Nguyen told TechCrunch. “That system does not work for many companies, especially creator companies.”
Nguyen added, “A creator platform that’s not founded by a creator will struggle to understand those creators.”
Now, Fanhouse creators must choose whether to keep making content on Passes. Within the next few weeks, opted-in creator and fan accounts will be transferred over to Passes, where they can use the same log-in credentials to access the site. To ease the transition, Passes is offering creators a 95% take rate for the first six months. Then, that percentage will decrease to 90%, the same as Fanhouse’s rate, which remains above industry standards. | Consumer & Retail |
Jeremy Hunt has been mocked over his claim Rachel Reeves failed to mention inflation in her keynote conference speech – when his Labour counterpart did in fact making clear the cost of living has soared under the Tories.
The chancellor attempted to insert himself into the economic conversation at the Labour Party conference on Monday, where Reeves set out Labour’s stall if they sweep to power at the next general election.
Reeves used her address in Liverpool to insist she would stick to a set of strict spending rules, impose VAT on private school fees and promise a “new era of economic security”.
Taking to Twitter/X, Hunt claimed the speech excluded “inflation” – which has remained stubbornly high since concerns over pandemic gave way to the war in Ukraine.
He wrote: “Oops…when the biggest single issue for the economy is inflation it doesn’t get ONE mention from the shadow chancellor? Because adding £28bn a year to borrowing will push it up – meaning higher mortgages, higher debt interest and lower growth…”
But that wasn’t strictly true, as Reeves’ speech made plain inflation has gone up, fuelled in part by Tory policies – she just didn’t say the i-word.
Reeves told delegates: “The price of energy – up.
“The price of the family food shop – up.
“And mortgage bills, up hundreds of pounds every single month.
“Never forget – this time last year, in their clamour to cut taxes for those at the top, the Conservatives caused market chaos, crashed the economy, and left working people to pay the price.”
Reeves’ number two, Darren Jones, shadow chief secretary to the Treasury, made the point on social media: “Odd that the Tory Chancellor doesn’t know what inflation means. As Rachel Reeves said, under the Tories: energy bills = UP. Food bills = UP. Mortgage bills = UP. Inflation = a general increase in prices and a fall in the purchasing value of money.”
And Labour party officials briefed journalists that Reeves was using “the language of normal people: rising prices”.
Twitter/X moderators later added a note to Hunt’s musing, pointing out that Reeves “explicitly mentioned rising prices (ie inflation)”.
Many others also fact-checked Hunt pretty hard. | Inflation |
Apple’s venture into financial products continues to grow, but what’s coming next?
Yesterday’s press release got me thinking about that. The company announced that Apple Card achieved the award for Best Co-Branded Credit Card for Customer Satisfaction with No Annual Fee in the J.D. Power 2023 U.S. Credit Card Satisfaction Study. The card, which was created by Apple and is issued by Goldman Sachs, has now won the award for the third year in a row.
While the award is all fine and good, it was the statement from Apple’s vice president of Apple Pay and Apple Wallet, Jennifer Bailey, that caught my attention. You can check out her full statement below:
“Since the start, we’ve been committed to delivering tools and services that help users live healthier financial lives, and it’s been rewarding to see customers using and finding value in the benefits of Apple Card. We are honored that Apple Card has been recognized as a leader in customer satisfaction. In partnership with Goldman Sachs, we are continuously working to expand the value users receive from Apple Card, most recently with the launch of Savings, and we look forward to continuing to develop tools and services that put our users and their financial health first.”
The line that really piqued my interest from this statement was towards the end when Bailey said, “…we look forward to continuing to develop tools and services that put our users and their financial health first.” It’s not hard to see that the company is hinting that it will be launching more services than just Apple Card and Apple Savings in the future.
What will the next service be? I think the Apple Spending account is a strong possibility.
An Apple checking account is the natural next step
Think about the basic accounts you have in your financial world. You might have a credit card, but that is likely the third piece of the puzzle. What was second? That was probably your savings account. So, what was first? It probably wasn’t an HSA or FSA, 401K, IRA, 501(c), or any kind of car, personal, or home loan. For almost all of us, the first financial product we started with was a checking account.
That’s a big product that Apple is still missing in its financial product lineup. We have Apple Card, the company’s self-branded credit card that offers close integration with the Wallet app, supports Apply Pay of course, and earns users up to 3% Daily Cash (occasionally 6% with the occasional special promotion). We also now have Apple Savings, the company’s recently launched savings product that offers a higher interest rate than most traditional banks and close integration with Apple Card and Apple Cash so you can automatically move earned Daily Cash into your savings account and transfer it instantly into Apple Cash.
We have yet, however, to get a checking account from the company. While some may argue that Apple Cash is already that product, sorry — you’re wrong. Apple Cash is a digital debit card that is missing a lot of features you’d come to expect from a checking account.
Apple Cash doesn’t support direct deposit, which most people have set up with their employer. It also is not currently connected from itself to the Apple Savings account. If you want to deposit money into Apple Savings, you have to do it from the Apple Savings user interface — you can’t do anything from the Apple Cash user interface at all. It also doesn’t have any kind of overdraft protection, writing checks (I know, but it’s still needed), and other common checking features.
What else is Apple Cash currently missing? Well, a physical debit card is definitely something that would be nice. Imagine having a checking account with no physical debit card at all. The reason that Apple Cash is okay is that you have a physical card from your checking account. That is absolutely needed in order to have a fully functional checking account — even Apple Card understood that when it released the titanium card at launch.
Enter Apple Spending
So, what could an Apple checking account look like? In my mind, since Apple focuses on financial education and wellness with its credit card, I would expect a lot of those kinds of features to make their way into its checking product as well. From categorizing purchases to understanding spending trends, a checking account that helps you better understand your spending is likely.
I would also love to see Apple go the way of some other financial services like Betterment and allow users to create buckets for their money so they can better understand what their balance is made up of, whether it be money for bills, a planned purchase, and more. Seeing one total balance of $1000 can be confusing if you forget that part of that balance are funds that should be set aside for bills. A total balance — and, more importantly, available balance for free spending — would be a great feature to have. The now-defunct Simple had this concept perfectly. Shame on PNC for buying their parent bank and throwing that idea in the trash.
I also would not be surprised to see Apple, once it releases Apple Spending (that’s my guess at a name as I cannot see Apple for my life ever calling it Apple Checking), change how Apple Cash and Apple Savings work. Obviously, Apple Spending and Savings will be connected to each other, and Apple Cash will likely turn into the debit card issued for Apple Spending accounts. The company will still probably allow people to have it separately as well for Apple Pay purposes, but I can’t imagine a world where I would have a separate debit card for my Apple Cash and Apple Spending accounts.
If all of this comes to fruition, I have a feeling that Apple will truly become my primary bank. I already have Apple Card and Apple Savings, but the lack of that checking account makes it impossible at this moment so I still have separate checking (and savings accounts) at a different bank, where I also have my investment accounts. However, if Apple Spending is what I hope it to be, only my investments will remain there — my checking and savings are heading Apple’s way.
After Apple Spending, could the company make a jump into investing and deeper into loans (after launching Apple Pay Later)? You bet. It’s hard to think about buying Apple stock through an Apple investment account, but it’s harder to think that Apple will stop its financial services ambitions at a checking account. The company has no reason to doubt it, especially since Apple Savings has already crossed over $10 billion in deposits.
That said, let’s get that checking account for now. I know I’m waiting for it. | Banking & Finance |
Tory MPs are used to poring over the pages of the Telegraph titles for evidence of whose political fortunes are up or down in the party’s papers of choice. Now, however, senior Conservatives are more worried about the increasingly fraught battle for the publications’ ownership than with what appears on their pages.
There is growing backbench unease over an Abu Dhabi-backed bid that appears to be the leading contender to seize the newspapers and the weekly Spectator.
And this weekend the grand figure of Lord (Charles) Moore entered the fray. In an urgent plea issued on the radio and in an opinion piece in the Daily Telegraph itself, Moore, who has edited all three of the British titles now on sale, argued that a media purchase of such significance by a Gulf state would be dangerous.
“The Telegraph and the Spectator are great British institutions. They should not be controlled by a foreign power,” he wrote. Moore added that the deal would in effect give control to Abu Dhabi’s ruling family, which is very different from the simple sale of a commercial asset to an individual owner.
Among those to share Moore’s concerns is Sir Iain Duncan Smith, the former Tory leader. “I just think it would be the wrong move,” he told the Observer this weekend. “I would just be very concerned to see one of the papers of record in the UK come under the control of somebody in the Middle East. It just seems bizarre to me. I would expect the secretary of state to call it in to have it properly reviewed. It’s a detrimental step.”
But in the run-up to Thursday’s Cop28 climate change summit in Dubai – like Abu Dhabi, one of the United Arab Emirates (UAE) – Rishi Sunak’s government clearly sees greater financial links with the UAE as an aim, rather than a risk. So tomorrow the prime minister is to host financiers from Abu Dhabi for a global investment summit at Hampton Court Palace.
The Daily Telegraph and the Sunday Telegraph, along with the Spectator, chaired by Andrew Neil, have been up for sale since Lloyds Banking Group seized the titles from Sir Frederick Barclay and his family in lieu of £1.15bn of unpaid debts.
A delayed auction of the newspapers, which began last month, saw several bidders step up, including a consortium led by hedge fund boss Sir Paul Marshall, who is a shareholder in GB News; the owner of the Daily Mail, Viscount Rothermere; and the regional publisher National World. But the Abu Dhabi-backed RedBird IMI is offering to take the titles from Lloyds in a deal repaying the Barclay family’s debt.
The potential sale also appears to have split the government. There are suggestions that the Foreign Office finessed a letter from the culture secretary, Lucy Frazer, to the Abu Dhabi-backed bid, in which she expressed her intention to have the bid examined by Ofcom, the media regulator.
But Jeff Zucker, the former CNN boss heading the RedBird IMI bid, has been angered by the threatened delay. Yesterday he accused rival bidders of “slinging mud” at his offer.
He suggested that some opponents of the deal were people who had “tried to approach us before to see if we would work with them on this bid. So let’s just be clear about that. We were fine in the eyes of our competitors before we were trying to do this on our own.”
Speaking to the Financial Times yesterday, Zucker also pledged to set up an advisory board to protect the independence of the newspapers from UAE influence. “I’ve spent 35 years running or supervising news organisations and there’s nothing I understand more than editorial independence,” he added.
RedBird IMI is largely funded by Sheikh Mansour bin Zayed Al Nahyan, the vice-president of the United Arab Emirates and owner of Manchester City football club.
Baroness (Patience) Wheatcroft, a former editor of both the Sunday Telegraph and of the Wall Street Journal, owned by Rupert Murdoch, dismissed concerns about the potential new owners. “People are being a bit pious about it, quite frankly,” she told the Observer. “We do have media plurality in this country, up to a point. But so many proprietors make their views quite evident in their coverage that I don’t think we can pretend that our newspapers are unbiased.”
Wheatcroft conceded that an arrangement like the one to limit Murdoch’s control of the Wall Street Journal could work. “He never interfered at all with editorial decisions when I was there, although I believe he did with the Sun all the time.”
If a formal investigation into the sale is set up by the department for culture, it is likely to take several months to resolve because of complex questions about how to ensure editorial independence. Lloyds is thought to be hoping a sale to clear the outstanding debt can go through before a general election is called next year. But the auction process, organised by Goldman Sachs, only officially launched in mid-October.
Muddying matters further is the involvement of Sir Simon Fraser, who headed the Foreign Office for five years from 2010, and who is now advising RedBird IMI.
It is unlikely that the tussle over the future ownership of the Telegraph will be enough to make loyal readers drop their toast and marmalade as they study the morning crossword.
But outside its own readership the idea of a major British newspaper group soon belonging to a consortium backed by Abu Dhabi is disturbing politicians from all parties, not to mention human rights campaigners.
The UAE has a poor reputation for freedom of speech and international pressure groups have repeatedly urged it to end the detention of activists, academics and lawyers. | United Kingdom Business & Economics |
The former cabinet minister Gavin Williamson has taken a job at firm launching a payment card “built for the influencer lifestyle”, which was previously hit with a consumer warning by the Financial Conduct Authority (FCA) and currently only offers its product in Brazil.
Williamson has gained permission to join the advisory board of Lanistar, whose website says it wants to roll out its payment card and crypto services to the UK and EU.
The former minister, who served in the Cabinet Office and as education secretary, who will be paid in shares, told the Advisory Committee on Business Appointments (Acoba) that he would help the firm with “providing guidance, connections (with financial institutions) and leadership to Lanistar”.
But Acoba warned Williamson about the risks of using any connections he obtained during his role in government.
“In the description of your role, you said that you would provide connections to Lanistar. You also made clear you would have no contact or dealings with government … There is a risk your connections could be used to unfairly access and influence the government and its arm’s length bodies. Making use of contacts within government even indirectly would be a breach of the rules which impose a lobbying ban on all ministers for two years on leaving office,” it said.
Lanistar’s business model involves appealing to influencers with followers of more than 50,000 to help promote its product in return for the promise of shares in the company when its card is launched. Its website says it has more than 3,000 influencers in 100 countries on board.
Celebrities from Love Island Amber Gill and Tommy Fury, and Premier League footballer Kevin De Bruyne were among those that endorsed the company several years ago in a viral advertising campaign.
The financial technology firm was set up in the UK in 2019 and later that year was issued with a consumer warning by the FCA. The regulator subsequently withdrew the warning after the firm agreed to add an “appropriate disclaimer to its marketing materials updating its regulatory status to confirm that it is not conducting regulated activities”. It was later registered as an “e-money agent” for a regulated firm in 2021, before being deregistered in August of this year.
The company was also told by the Advertising Standards Authority in 2021 that its advert claiming to offer “the world’s most secure payment card” was misleading.
Lanistar’s founder, Gurhan Kiziloz, has said in interviews that he wants it to be a fintech unicorn worth more than £1bn. Its payment card and crypto app are operational in Brazil where it has a partnership with a bank and Mastercard.
The job is Williamson’s third role on top of his work as an MP and a position at RTC Education, a university provider owned by a Conservative donor, Selva Pankaj. RTC Education pays Williamson £50,000 a year, as well as giving him a one-off bonus of £25,000 this autumn.
Williamson and Lanistar have been approached for comment. | Banking & Finance |
Valid TRQ Holders Under India-UAE Trade Pact Can Import Gold Through Bullion Exchange IIBX
Indian jewellers having a valid license to import a specified quantity of gold at concessional customs duty from the UAE can import it through bullion exchange IIBX, under the free trade agreement.
Indian jewellers having a valid license to import a specified quantity of gold at concessional customs duty from the UAE, under the free trade agreement, can import it through bullion exchange IIBX, according to a government notification.
The Directorate General of Foreign Trade notification also said that those companies can obtain the physical delivery of the consignment through International Financial Services Centres Authority registered vaults located in special economic zones, as per the authority's guidelines.
The India-UAE free trade agreement, which came into force in May 2022, provides one per cent duty concessions to domestic importers on a specified quantity of gold under tariff rate quota provisions of the pact.
The DGFT provides TRQ certificate to companies for imports and they are also notified by IFSCA.
"Valid India UAE TRQ holders as notified by IFSCA can import gold through IIBX against the TRQ and can obtain physical delivery of the same through IFSCA registered vaults located in SEZs as per the guidelines prescribed by the IFSCA," the DGFT said on Monday.
India International Bullion Exchange IFSC Ltd was launched in Jul. 2022. IIBX is promoted by India's leading market infrastructure institutions like NSE, INDIA INX (a subsidiary of BSE), NSDL, CDSL and MCX.
IIBX is established at GIFT IFSC, Gandhinagar and regulated by the International Financial Services Centres Authority.
The exchange has been conceptualised to provide a gateway to import bullion into India and provide a world-class bullion exchange ecosystem to promote bullion trading, investment in bullion financial products and vaulting facilities in IFSCs.
Bullion is kept in the vaults authorised by IFSCA and empanelled by India International Depository IFSC Ltd. Bullion on IIBX is traded in the form of Bullion Depository Receipts.
The IFSCA was set up in Apr. 2020 under the International Financial Services Centres Authority Act, 2019. It is headquartered at GIFT City, Gandhinagar.
The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre in India.
At present, the GIFT IFSC is the maiden international financial services centre in India. | India Business & Economics |
Sky News has won the data journalism award at the Press Gazette's Future of Media Awards for its Westminster Accounts project which was praised for having a "massive impact".
An interactive database lets the reader search for information about the earnings and donations declared by any MP, political party, all-party parliamentary group, or donor since the last general election.
Sky News and Tortoise Media collected and analysed thousands of public records to create a record of financial interests in Westminster from December 2019 onwards.
The first-of-its-kind searchable database makes it easy for the public to examine the millions of pounds pouring into British politics.
Search for your MP using the Westminster Accounts tool
When the project went live in January, it revealed MPs had earned £17.1m on top of their salaries in this parliament, with about two-thirds of the money going to just 20 MPs.
Sky News found the majority of the extra earnings went to Tory politicians - a total of £15.2m - while Labour MPs earned an additional £1.2m. All MPs are paid a base salary of £86,584.
The debate over second jobs dominated 2021 after former Tory MP Owen Paterson became embroiled in a lobbying scandal that eventually led to his resignation.
Read more:
Head of ethics watchdog calls for limits on MPs' second jobs
MPs vote in favour of new transparency rules
No 10 says MPs should 'focus on serving constituencies'
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The judges said of the Westminster Accounts: "This was one of the seminal digital journalism stories of the last year which has had a massive impact and been widely followed up.
"It is impressively visualised and has prompted debate in the House of Commons."
The Future Of Media Awards celebrate the best in digital journalism products and publishing innovation of the past year.
The Financial Times won in four categories: newsletter, podcast, digital storytelling and news media app.
Other winners of the 2023 awards included The Telegraph which won the award for news and current affairs website, Insider, Reach, The Times, and the Kyiv Independent. | United Kingdom Business & Economics |
Hackers stole millions of dollars of crypto from FTX after the company declared bankruptcy.
At the time, the company transferred $500 million onto a USB drive to safeguard it, per Wired.
FTX dramatically imploded late last year. CEO Sam Bankman-Fried is on trial over fraud charges.
FTX employees reportedly scrambled to stop hackers from making off with $1.1 billion in crypto as the crypto exchange went into meltdown late last year.
According to a report from Wired, FTX adviser Kumanan Ramanathan held as much as $500 million worth of assets on a USB drive for several hours to protect it from hackers.
Unnamed sources told Wired that Kumanan then hunkered down in his office with FTX general counsel Ryne Miller to safeguard the USB in the early hours of the morning after FTX declared bankruptcy.
At some point between 2 a.m. and 5 a.m., the pair called 911 to request police protection, over fears the hack was coming from the inside and that the thieves might try and physically steal the storage device.
The hackers ultimately made off with around $415 million worth of crypto assets, a figure confirmed by FTX's bankruptcy lawyers earlier this year.
Staff at FTX first became aware of the hack on the evening of November 11 but were unable to stop it as only Sam Bankman-Fried and his trusted lieutenants knew how to control the crypto wallets being drained.
Sam Bankman-Fried stepped down as CEO of FTX that day and did not appear in the crisis virtual meeting employees convened to address the hack, per Wired.
Executives at the collapsing crypto exchange scrambled to track down and move FTX's remaining funds into secure offline "cold storage" wallets managed by digital asset trust company BitGo.
"They were scrubbing various systems trying to find where various private keys were, where assets were held," an anonymous former FTX employee told Wired. "It was just chaos."
FTX's security failures have been well documented since the crypto exchange collapsed last year.
Bankman-Fried is currently on trial over his role in FTX's demise and has pleaded not guilty to seven charges including wire fraud and conspiracy to commit money laundering.
The FTX debtors, who are handling the bankruptcy estate, declined to comment when contacted by Insider.
Read the original article on Business Insider | Crypto Trading & Speculation |
The Bank of England today announced that they were hiking the rate by half a percentage point to 5% - higher than most experts had expected.
That came after yesterday’s grim news that inflation was stuck at 8.7% - well off Sunak’s target of halving it by the end of the year.
Even more worryingly, so-called “core inflation” stripping out volatile goods like food and energy, actually rose to 7.1%.
Reacting to the Bank of England announcement, chancellor Hunt said: “High inflation is a destabilising force eating into pay cheques and slowing growth.
“Core inflation is higher in 14 EU countries and interest rates are rising around the world, but the lesson from other countries is that if you stick to your guns, you bring inflation down.
“Our resolve to do this is watertight because it is the only long-term way to relieve pressure on families with mortgages. If we don’t act now, it will be worse later”.
But Rachel Reeves, Labour’s shadow chancellor, said: “Families across Britain will be desperately worried about what today’s interest rate rise might mean for them. They want to know that support will be there if they need it.
“Instead the chancellor and prime minister are burying their heads in the sand and failing to clean up the mess this Tory government has made.”
Lib Dem leader Ed Davey said: “Homeowners are being treated as collateral damage by Rishi Sunak.
“This latest rate rise will scar family finances for years to come, all because this Conservative government crashed the economy and sent mortgages spiralling.
“It is heartbreaking that this could lead to people losing their family home through no fault of their own.
“Rishi Sunak needs to provide targeted support to those hardest hit, instead of cruelly standing by as people worry about keeping a roof over their head.” | United Kingdom Business & Economics |
Lending laws are changing — and borrowers could pay the price
State and federal authorities are struggling with usury and interest rate cap limitations as new technologies change the way that financial services are delivered and allow some lenders to circumvent them. Many states are opting for traditional solutions that may actually be worse than the abuses they are trying to prevent.
On Wednesday of this week, Colorado enacted legislation opting out of a federal law that allows out-of-state banks to avoid adhering to their usury laws. In contrast, the actions by federal authorities to prevent a national patchwork of state interest rate caps from constraining commerce and broader financial markets by undercutting the “valid when made rule” were upheld by a California court. Other states, including Maine, have redefined how usury laws apply to fintech companies, which buy loans from banks that may not have been subject to their usury law when the loan was made.
This battle has been percolating for 50 years, but technology has brought it to a head once again.
Usury laws were very important when people’s access to credit was limited by how far they could ride on horseback to find it. But the world has changed as borders have disappeared in cyberspace. States are naturally reluctant to give up control over lenders even in the face of overwhelming data indicating that well intentioned interest rate caps can lead to less credit availability, higher rates and economic dislocations for those who need the credit the most.
When usury rates reflect political grandstanding rather than actual market conditions, lenders may choose not to lend to borrowers with weak credit histories in those states if they can’t do it profitably. In 1964, after an investigation into loan sharking by the New York State Investigations Commission, then Sen.-elect Robert F. Kennedy identified New York’s usury laws as a key driver of loan sharks’ success in the state and recommended modifying them so that more people with credit problems could borrow from legitimate sources.
Consider Pete, whose credit history is not the best. He takes out a 14-day payday loan of $500 at 10 percent simple interest to cover some emergency medical expenses. The $50 administrative processing fee that is also charged produces an annual percentage rate (APR) of 282 percent. That number — not the 10 percent interest — is what must be disclosed under federal and many state laws. It is a distinction that most ignore when considering the issues. Pete did not blink an eye at the 10 percent rate, given his credit history, or the $50 processing fee, but a 282 percent APR gets everyone’s attention. This example demonstrates the complexity of the issue: If the small-dollar lender can’t charge the 282 percent APR for those 14 days, it may choose not to lend, leaving Pete in the lurch.
Data about the unintended consequences of usury laws is creating a clearer picture of those consequences. Recent research assessing the impact of the 2021 Illinois law on small-dollar loans found that the interest rate caps made credit less available and more expensive by decreasing the number of unsecured short-term loans to subprime borrowers by 44 percent and increasing the average loan size to subprime borrowers by 40 percent. That was likely helped by the fact that the law shortsightedly applied its restrictions to anyone who purchased the loan in the secondary market, where most loans end up, effectively making those loans less valuable and less saleable. The law also changed the permissible interest rate that could be charged from the simple interest rate to the APR.
A 1982 Federal Reserve Bank of Chicago paper noted that “[u]sury laws can succeed in holding interest rates below their market levels only at the expense of reducing the supply of credit to borrowers.” In 2013, a study by the University of Bristol found that interest rate caps impact credit availability and reduce access for low-incomes consumers. Another paper in 2021 noted a direct link between the capping of interest rates and a 20 percent reduction in credit availability.
Egregious interest rates hurt the most vulnerable, but interest rate ceilings keyed to the APR on small consumer credit loans can have unintended consequences. Both the states and the federal government have a legitimate oversight role to play in lending markets. But when the 90 percent of consumers who are internet-connected make up lending markets, they naturally have greater choices for financial products and services, leveling the playing field.
As attractive as interest rate caps may seem, they have a checkered history and can be a painful medicine for those that need access to credit the most. Lenders simply may choose not to lend to high-risk customers who need small-dollar loans if they can’t do so safely and at a rate that is commensurate with the credit risk that they are taking. Politics should take a back seat to analytics when it comes to creating new usury laws — otherwise, we shouldn’t be surprised when consumers wonder where all the credit has gone.
Thomas P. Vartanian is executive director of the Financial Technology & Cybersecurity Center. A former bank regulator, he has acted as an expert witness in state usury cases arising from the implementation of new financial technologies. He is the author of “200 Years of American Panics” and “The Unhackable Internet.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
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