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A new Labour government would give all towns and cities in England new powers and funding to boost local economies, deliver thousands of new homes and create high-quality jobs, Keir Starmer will announce.
In the biggest expansion of devolution since Labour was last in power, he will pledge that councils and combined authorities would get more control over housing and planning, skills, energy and transport of the kind currently held by London, the West Midlands and Greater Manchester.
“If we want to challenge the hoarding of potential in our economy then we must win the war against the hoarders in Westminster. Give power back and put communities in control,” Starmer will tell party activists at their annual conference.
“An economy that works for the whole country is what the British people want. The Tories know that. They stood at this crossroads before. They called it levelling up. But as soon as they counted their votes, they turned back.”
Starmer’s devolution plans, which Labour aides say would give towns and cities the tools they need to develop their own long-term growth plans, mean that local leaders could request more powers – with a presumption they would be granted if they can demonstrate a strong record on managing public money.
There could also be an expansion of the combined authorities model across England, with other groups of local councils working together to deliver key public services in their region.
They would be handed Whitehall department-style funding settlements for housing investment, bringing together existing schemes and picking their own priorities in areas such as affordable housing, brownfield remediation and regeneration.
Mayors would get more control of strategic planning in their areas, while local authorities would be able to keep more of the money they raised through additional development, including residential and commercial sites.
Among the most potentially transformative elements of the plan is the proposal to let local authorities run their own local buses, reversing the so-called deregulation nearly 40 years ago, where services were put in the hands of private companies.
In recent months, Greater Manchester and Liverpool have been able to take control of bus services again, allowing them to set fares, routes and service levels, and also to integrate these with other local transport.
Currently, smaller councils without combined status are not allowed to do this, which would change under the devolution plans, helping them to plan bus services around new homes and other infrastructure.
Starmer will announce local power plans as part of GB Energy, a publicly owned clean energy company, under which residents would benefit from about 20,000 community energy projects such as small-scale wind and solar farms and heat generation schemes, giving them cheaper bills and so – Labour hopes – a stake in the developments.
The Labour leader will also give all metro mayors and combined authorities powers over adult education, something already the case in 10 areas across England including London, Greater Manchester and the West Midlands.
The plan will involve mayors and the combined authorities playing a central role in turning some further education colleges into so-called technical excellence colleges, a new type of institution aimed at providing local areas with specific skills. Local firms could invest in the colleges, helping design courses to match their need.
Universities will be drafted in to improve a system known as local skills improvement plans, which already liaise with employers about the skills needed in the area, or potentially required in the future. | United Kingdom Business & Economics |
ECB Warns Weak Economy Heightens Stability Risks From Hikes
Sluggish growth in the euro-zone economy is threatening to amplify risks to financial stability posed by higher interest rates, the European Central Bank warned.
(Bloomberg) -- Sluggish growth in the euro-zone economy is threatening to amplify risks to financial stability posed by higher interest rates, the European Central Bank warned.
As the impact of the ECB’s historic monetary-tightening campaign continues to unfold, household incomes, corporate revenues and public finances could feel an additional squeeze if the economy continues to disappoint, the central bank cautioned in its bi-annual Financial Stability Review.
“The weak economic outlook along with the consequences of high inflation are straining the ability of people, firms and governments to service their debt,” ECB Vice President Luis de Guindos said in Frankfurt. “It is critical that we remain vigilant as the economy transitions to an environment of higher interest rates coupled with growing uncertainties and geopolitical tensions.”
The outlook for the 20-nation euro area has worsened of late and a recession is possible after output shrank 0.1% in the third quarter. Activity is only expected to pick up slightly next year, while downside risks such as the uncertain impact of rate hikes and geopolitics were seen dominating when policymakers met in October.
Still, financial markets currently expect a “soft landing,” where inflation moderates without a significant hit to growth, according to the report. Historical evidence suggests such a scenario is “difficult — although not impossible — to achieve in practice, especially given the magnitude of rate increases in a short period of time,” it said, adding that negative surprises to growth risk a “disorderly correction.”
The ECB has raised rates 10 times since mid-2022, but left them on hold last month. While the effect of that campaign is increasingly being felt in sectors such as real estate, much of the tightening has yet to filter through as borrowing costs for households, companies and governments only gradually shift higher.
Corporate insolvencies, though, are starting to pick up and could rise further as the economic downturn becomes more broad-based and credit costs rise, the ECB said.
“There could be more defaults going forward, with potential knock-on effects on bank balance sheets, non-bank investors in corporate debt and household employment prospects,” it said.
Officials also warned that the environment is getting rougher for banks, which have so far benefited from rising rates. Lenders now face higher risk provisions as more borrowers struggle to repay loans.
Banks’ funding costs are also set to rise as competition for deposits heats up, more customers shift their cash into higher-yielding term deposits and maturing liabilities need to be refinanced.
Sovereign Debt
To limit risks, the ECB urged authorities to preserve the so-called macroprudential capital buffers that can be drawn on if conditions in the sector worsen. Current bank-profitability levels could even allow an increase in some countries, it said.
Turning to budgetary matters, the ECB warned that “risks of fiscal slippage” could re-emerge, despite Italy’s credit rating — the top focus of investor concern — being pulled back from the brink of junk by Moody’s Investors Service.
Guindos highlighted that “the situation of the sovereign markets is good” and that “we haven’t seen any sort of excessive volatility in terms of spreads — we even have seen a narrowing of spreads.”
However, the ECB said that European Union negotiations over new fiscal rules “are inducing significant uncertainty,” and that reaching a deal “is critical in order to anchor expectations for debt sustainability and sustainable, inclusive growth.”
“The worst scenario for the ECB would be that we do not reach an agreement” as markets require clarity over the “framework and the rules that apply,” Guindos said.
--With assistance from Nicholas Comfort.
(Updates with Guindos starting in third to last paragraph)
©2023 Bloomberg L.P. | Europe Business & Economics |
- Choosing between pretax versus Roth 401(k) plan contributions can be more complicated than you expect, experts say.
- Pretax 401(k) deposits provide an upfront tax break, but you'll owe levies when you withdraw the funds.
- By comparison, Roth 401(k) contributions happen after taxes, but your money can grow tax-free.
- However, the best choice depends on more than just your current and future tax brackets.
While pretax 401(k) contributions reduce your adjusted gross income, you'll owe levies on growth upon withdrawal. By comparison, Roth 401(k) deposits won't provide an upfront tax break, but the money can grow tax-free.
Some 80% of employer retirement plans offered Roth contributions in 2022, compared with 71% in 2018, according to a recent Vanguard report based on roughly 1,700 retirement plans.
While your current and future tax brackets are part of the puzzle, experts say there are other factors to consider.
"It's hard speaking in broad terms, because there are so many things that go into making that decision," said certified financial planner Ashton Lawrence at Mariner Wealth Advisors in Greenville, South Carolina.
Here's how to decide what's right for your 401(k) plan.
One of the big questions to consider is whether you expect to be in a higher or lower tax bracket in retirement, experts say.
Generally speaking, pretax contributions are better for higher earners because of the upfront tax break, Lawrence said. But if your tax bracket is lower, paying levies now with Roth deposits may make sense.
Roth 401(k) contributions are typically good for younger workers who expect to earn more later in their careers, explained Lawrence Pon, a CFP and certified public accountant at Pon & Associates in Redwood City, California.
"If you're in the 22% or 24% bracket or lower, I think the Roth contribution makes sense, assuming you'll be in a higher bracket upon retirement," he said.
Although it's unclear how Congress may change tax policy, several provisions from the Tax Cuts and Jobs Act of 2017 are scheduled to sunset in 2026, including lower tax brackets and a higher standard deduction.
Experts say these expected changes may also factor into the pretax versus Roth contributions analysis.
"We're in this low-tax sweet spot," said Catherine Valega, a CFP and founder of Green Bee Advisory in Boston, referring to the period before tax brackets may get higher. "I say taxes are on sale."
While Roth contributions are a "no-brainer" for young, lower earners, she said the current tax environment has made these deposits more attractive for higher-income clients, as well.
"I have clients who can get in $22,500 for three years," Valega said. "That's a pretty nice chunk of change that will grow tax-free."
Plus, recent changes from Secure 2.0 have made Roth 401(k) contributions more appealing for some investors, she said. Plans may now offer Roth employer matches and Roth 401(k)s no longer have required minimum distributions. Of course, plans may vary based on which features employers choose to adopt.
"Legacy goals" are also a factor when deciding between pretax and Roth contributions, said Lawrence from Mariner Wealth Advisors.
"Estate planning is becoming a larger piece of what people are actually thinking about," he said.
Since the Secure Act of 2019, tax planning has become trickier for inherited individual retirement accounts. Previously, nonspouse beneficiaries could "stretch" withdrawals across their lifetime. But now, they must deplete inherited IRAs within 10 years, known as the "10-year rule."
The withdrawal timeline is now "much more compact, which can impact the beneficiary, especially if they're in their peak earning years," Lawrence said.
However, Roth IRAs can be a "better estate planning tool" than traditional pretax accounts because nonspouse beneficiaries won't owe taxes on withdrawals, he said.
"Everyone has their own preferences," Lawrence added. "We just try to provide the best options for what they're trying to achieve." | Personal Finance & Financial Education |
Boris Johnson has used his latest column in the Daily Mail to attack Sadiq Khan's "bone-headed" ultra-low emissions zone (ULEZ) - despite coming up with idea while he was London mayor himself.
The former prime minister, who dramatically resigned as an MP last month, pointed to divisions within Labour's ranks over the expansion of the scheme, saying members of the party hierarchy "have begun to ditch Khan".
Earlier this week, Sky News reported that the Labour candidate in Uxbridge and South Ruislip - Mr Johnson's former constituency - had called for a delay to the zone's extension due to the rising cost of living, despite previously defending the policy.
The Conservatives - rocked by the controversial nature of Mr Johnson's resignation - hope to win support in Uxbridge by capitalising on residents' opposition to the mayor's plan to expand the zone at the end of next month.
ULEZ, which was launched in April 2019, currently covers central London and the area up to, but not including, the North and South Circular Roads.
Labour lead over Tories widens in poll of polls - politics latest
Mr Khan plans to expand the zone up to the capital's borders with Buckinghamshire, Essex, Hertfordshire, Kent and Surrey, a move that would bring around five million more Londoners into the scheme.
Mr Johnson cited the case of an 82-year-old man in Epsom who would be penalised by the daily £12.50 charge to go to his church in Orpington, Kent, because his old car does not comply with the zone's emissions standards.
" A tax must be fair; it must be justified; and it must be timely - and this tax fails on all counts," Mr Johnson.
"This ULEZ £12.50 tax on driving into London - and driving around outer London - is blatantly unfair in that it penalises such elderly motorists as the churchgoer in Epsom who are likely to have older vehicles."
He added: "It is the sheer bone-headed cruelty of Sadiq Khan's scheme - rushed in with only nine months' consultation - that is causing such indignation; and it is that indignation that is fomenting the panic in Labour ranks.
"For months the Labour stooges have played along with his claims. They have supported the ULEZ tax. Sir Keir Starmer has backed it fervently, in so far as he is capable of being fervent about anything."
However, it was in fact Mr Johnson who conceived ULEZ as an idea when he was London mayor from 2008 until 2016.
The former prime described ULEZ as "an essential measure to help improve air quality in our city, protect the health of Londoners, and lengthen our lead as the greatest city on earth" when he announced it in 2015.
Mr Johnson tacitly conceded ULEZ had been the idea of the "last Conservative mayor", but added: "It never occurred to us to impose the ULEZ on the whole city, because - as Khan has now discovered - there are vast tracts of London where it is simply the wrong tool."
Where will the expanded ULEZ zone cover?
A source close to the mayor told Sky News: "This is utter nonsense from the disgraced former mayor.
"It was Boris Johnson who first announced the introduction of the ULEZ to tackle air pollution, and around 4,000 Londoners still die prematurely every year as a result of toxic air.
"Boris Johnson also made the woeful deal with government to remove TfL's entire operational grant at a cost of nearly £1bn a year."
A handful of Labour politicians have begun to speak out against the scheme's expansion, which is due to take place at the end of next month.
At a hustings chaired by Sky News' political correspondent Rob Powell earlier this week, Labour's Uxbridge candidate Danny Beales said it was "not the right time" to expand the scheme due to residents' concerns over the rising cost of living.
His concerns have been echoed by Labour MP Siobhain McDonagh, who said Mr Khan's policy would "make lives harder".
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Sir Keir has also struggled to state his position on the ULEZ expansion, telling LBC that the mayor has "no choice" but to go ahead with his plans, while also defending Mr Beales's decision to speak out against them.
Addressing a listener question on LBC, Sir Keir said: "I accept that the mayor has no choice but to go ahead because of the legal obligation on him.
"I think Danny is right to stick up for his constituents.
"I understand the pain it is going to inflict."
There are fears within Labour that the policy could be damaging to the party in the Uxbridge by-election, with one senior Labour MP telling Sky News: "We could be in a situation where we win the others [by-elections] but we lose Uxbridge because of the ULEZ."
The Uxbridge by-election will take place on 20 July, alongside contests in Selby and Ainsty and Somerton and Frome, where the Conservatives are defending majorities of around 20,000 votes. | United Kingdom Business & Economics |
A long-term anti-poverty fund created during the government of Tony Blair doubled the economic output of some local areas and improved deprivation levels by up to 17%.
The Futurebuilders England Fund gave £142m in loans and other financing to 406 charities and enterprises in England from 2004 to 2010.
New research into the long-term effect of the fund by the Department for Digital, Culture, Media and Sport (DCMS) and Social Investment Business (SIB), which managed Futurebuilders, shows that the places where organisations received money did better than neighbouring areas.
Using hyperlocal data from the Office for National Statistics, the researchers compared areas of 1,000 to 3,000 people where social investment was spent with similar neighbourhoods close by.
In places where a charity or enterprise received £3m, the average improvement in deprivation from 2010 to 2019 was 12% compared to neighbouring areas. If £4m was spent, deprivation improved by 17%.
The researchers also examined gross value added (GVA) – the value of goods and services, less the cost of producing them – and found that in places where more than £500,000 was invested, there was a 14% improvement. Where £4m was spent, GVA went up by 106% by 2019.
Nick Temple, chief executive of SIB, said that most of the loans had been repaid. “At the time, it was viewed as quite risky because these were charities and social enterprises that no one else would lend to, primarily in the most disadvantaged areas of the UK,” he said. “It returns money to the government because the organisations have paid back over £100m of that loan. The organisations have created more jobs, they’re in a stronger position in terms of their finances, and it’s really having an impact on their communities.”
Very few government funds run for longer than two or three years since new funds garner more headlines.
“This should be music to the ears of policymakers – it’s very rare to have this 20-year or 15-year view of these sorts of investments,” Temple said. Charities that have paid back funding have also been able to approach banks that have previously refused to lend to them, he added.
Projects backed by Futurebuilders England include Save the Family in Chester, which supports vulnerable homeless families. It was able to expand its site after receiving a £2.5m loan and £1.4m grant, to include more homes, a children’s centre and other facilities, and is close to paying back the whole of the loan. The Women’s Organisation, which supports and trains women in Liverpool to create businesses, was able to buy new headquarters with space to develop new businesses. It has now helped more than 60,000 women create more than 4,000 businesses.
Stuart Andrew, the civil society minister, said: “Social investment is hugely important in reducing deprivation and is a key part of our levelling up agenda. Research such as this helps us to better understand and reach out to the most disadvantaged communities, particularly when informing future funding decisions.” | United Kingdom Business & Economics |
Small businesses and unions have hit back at the Bank of England's chief economist saying people need to accept they are poorer otherwise prices will keep soaring.
Huw Pill said a game of "pass the parcel" of workers asking for wage rises and businesses passing on higher costs was fuelling inflation.
He added there was a "reluctance to accept" households were worse off.
But the Federation of Small Businesses said his comments were "out of touch".
Tina McKenzie, policy chair of the trade body, said small firms had been left with no choice to pass on the "huge increases they have seen for energy and input costs" to customers.
"In many cases even that is not enough to fill the gap," she added.
Ms McKenzie said many firms who are "only just hanging on day by day", were not able to invest and were cutting costs.
Amanda Gearing, a senior organiser for the GMB union, said it was "absolutely outrageous to be honest, asking some of our lowest paid workers in this country, not to take a pay increase when inflation is so high".
"People can't afford to live, they're not able to pay their rent or put food on the table," she told the BBC's Today programme.
Paul Nowak, the TUC general secretary, added people didn't "need lectures" over pay and called for a plan to "make sure workers get their fair share".
UK inflation, which is a measure of the increase in price of something over time, hit 10.1% in the year to March.
For example, if a pint of milk cost £1 but went up to £1.10 a year later, then annual milk inflation is 10%.
March's inflation figure was slightly lower than February but the fall does not mean prices are coming down, it means they are rising at a slightly slower pace.
Part of the Bank of England's role is to try to keep inflation at its target rate of 2%. The Bank, which is the UK's central bank, is charged with setting interest rates and in response to the inflation rate going up in recent times, its officials have increased interest rates - which make the cost of borrowing money more expensive for people and businesses.
This strategy, in theory, is meant to make people spend less so that demand for goods reduces and prices slow down or even fall.
But with the strain of rising prices being felt by households trying to pay higher energy bills and food costs, many people have asked for pay rises to help ease the cost of living.
People working across several industries, such as rail, the NHS and the civil service, have gone on strike in recent months over various reasons including pay.
And with job vacancies still being higher than they have been in previous years, workers have had a stronger hand in asking their employers for more money.
'Reluctance to accept'
Mr Pill, who made £95,183, including benefits, in his first six months at the Bank, is paid more than £190,000 a year.
He told the Beyond Unprecedented podcast from Columbia Law School that people demanding higher pay and businesses passing on increased costs by putting prices up, added to inflation and caused prices to rise even further across the economy.
He said what the UK imports from other countries, such as natural gas, was costing a lot more than what it exports.
"You don't need to be much of an economist to realise that if what you're buying has gone up a lot relative to what you're selling, you're going to be worse off," he said.
"Somehow in the UK, someone needs to accept that they're worse off and stop trying to maintain their real spending power by bidding up prices, whether through higher wages or passing energy costs on to customers."
He added: "What we're facing now is that reluctance to accept that. That pass-the-parcel game that's going on here, that game is one that's generating inflation, and that part of inflation can persist."
Thomas Moore, senior investment director at Abrdn, told BBC 5Live Mr Pill's words "need to accept" were a "red rag to the bull".
But he added: "You can see that underlying all of this, he has got a point which is as long as inflation stays high, we are going to demand higher wages and as long as we demand higher wages, inflation is going to stay high."
But although pay has been going up, it has not matched inflation, meaning people are worse off.
There have been arguments by some economists that employers giving out large pay rises could spark a "wage-price" spiral, when pay increases help force prices up and high inflation lasts for a longer time. | Inflation |
If you are a devoted vinyl collector, an obsessive music fan, or — as is often the case — both, Discogs is very nearly a lifestyle. The site has become the internet’s foremost database of recorded music and one of the most extensive marketplaces available for physical music media, with every bit of it generated and offered by users. You can catalog your collection, look up information about even the most obscure artists, cross-check record store prices to see if your local shop has a markup, and purchase records, typically at something close to their “market rate.”
“Some people just buy records for the album art hanging on the wall,” says Doug Martin, who started selling on Discogs in 2020. But the Discogs users were different. “These were real fans listening to real music who cared about the format and the medium. That’s what attracted me in the beginning.”
The site has become a central part of the music internet, surviving through physical music media’s replacement by MP3s and then streaming — and rebounding as interest in vinyl, CDs, and tapes did throughout the 2010s. But sellers who use the platform say the site’s old tech has started to wear on them, and new fees and restrictions have made it harder to do business. Changes within the company are threatening to turn a bastion for vinyl fans, record stores, and anyone who cares about music into just another dysfunctional website — and dismantle a singular record of music history, even if just by pushing the sellers and users who have created that record away.
A fastidiously detailed Wikipedia for music
What was initially conceived of as something of a Wikipedia for recorded music — although, founded in 2000 by Intel programmer Kevin Lewandowski, it predates the encyclopedia site by a few months — hasn’t changed a great deal since its conception, besides the introduction of the marketplace in the mid-aughts. Discogs is a fairly clunky, definitely old-fashioned website devoted to even older technology: a vestige of an earlier, more idyllic internet that has spent the last decade walking the record-needle-thin line between 2020s algorithmically driven tech monolith and niche unprofitable obscurity.
A big part of its ability to walk that line is the passion of its user base. Sellers have to submit a record’s information if it’s not already in the database in order to sell it — that’s how the database has become so complete. And many entries, even for deep obscurities, are fastidious: album covers and liner notes are scanned for inclusion and album credits are fleshed out with hyperlinks that are almost more useful and thorough than the Wikipedia equivalent, plus reviews by devotees. There is even a lively forum where all of these details get litigated. It is an insular community in many ways. But it is also, and has always been, a money-making endeavor for both Discogs and the sellers who use it.
Discogs is now the source of many people’s full-time employment. A European Discogs seller, who has been on the platform since 2008 and requested anonymity for fear of retribution by the company, says he does 80 percent of his business on the platform. He does not operate a brick-and-mortar storefront but has four employees and nets around €20,000 a month on Discogs. According to him, his sales have shrunk by half over the past year, and he’s in the process of building his own site to try to move away from the platform.
“I’ve made my living with this company for the past decade,” says a Connecticut seller who also does the majority of his business on Discogs and requested anonymity for the same reasons. “It’s just the frustration that you have no control over what they’re doing, and it doesn’t even make any sense.” The vinyl renaissance has occurred in tandem with the growth of Discogs, making the site fairly integrated into any record business — regardless of whether a business has a brick-and-mortar storefront. A major change to the site, then, could mean a major shift in the record market as a whole.
Underlying the sellers’ complaints is a kind of dismay, the feeling that what had previously been a safe haven for nerds to buy and sell $2 records is being threatened — that one more corner of the internet that wasn’t yet a glossy behemoth designed to subsume and capitalize on your personal information was about to collapse.
“When you get any kind of community built around a business, and you tweak that a little bit, you’re gonna make a lot of people upset,” says Martin. “This is their Discogs, they built it.”
The problems started in earnest when the company raised its fee from 8 to 9 percent on May 22nd of this year, and — crucially — started charging that same fee on shipping costs for the first time, an issue considering how international the record market is. One of the beauties of Discogs had previously been finding and purchasing rarities from sellers in Japan or Germany; the most expensive record I’ve ever purchased, for example, was a copy of Cannonball Adderley’s debut album from a seller in Switzerland. Now, the site is taking considerably larger slices of those kinds of sales. (Discogs declined to comment for this story.)
To make up for the lost revenue, Discogs suggested sellers use a tool it had created to raise the prices of all of their inventory by a percentage; another Discogs email to sellers suggested they offer free shipping to avoid the fee, without accounting for the fact that the seller would then be either covering that cost out of pocket or integrating it into the price of the record — which would, of course, result in the same amount of money going to Discogs. Essentially, sellers were told to raise their prices and / or offer free shipping — two options that threaten their bottom lines. “Their communication, too — it’s like, ‘I said what I said, and we’re done,’” says Martin. “Well, you’re really not, because we all have to live with this and so do you.”
The tension between Discogs’ old-internet charm and its attempts at growth came to a head earlier this summer around a since-deleted viral Twitter thread by artist and label head Mike Simonetti lamenting “the fall of discogs.” Simonetti sounded the alarm about increasing fees and subsequently increasing prices, a growing influx of scammers, rising shipping costs, and the dysfunction of the website itself, among other issues.
“We had kind of thought Discogs was on our side as sellers,” says Gene Melkisethian, who runs Joint Custody, a record store in Washington, DC, and sells on Discogs. “But when they started charging fees on shipping, it just felt really punitive.”
“In their communication, it was beyond insulting the way they framed it. Like, ‘Oh, you can just not charge for shipping,’” says the Connecticut seller. “The sudden fee increase was a huge, huge blow to a lot of people.”
The fee increase arrived shortly before USPS raised the price of its Media Mail service (the lower rates at which anyone can send media products like books, music, and movies) by an average of 7 percent — and a year after the site had switched all its transactions to PayPal, which charges its own fees on each transaction, ones that are higher on international purchases. PayPal also requires that every shipment has a tracking number, which can be a significant extra expense for international sales.
The changes also arrived at the tail end of a phenomenon alluded to in the same original thread. The pandemic had created something of a record sales bubble: people who were already vinyl aficionados were stuck at home with their record players, stimulus checks, and nothing to spend them on besides survival and things you could do at home — like listen to music. Melkisethian says his sales actually grew during the pandemic in spite of the fact that his brick-and-mortar sales disappeared. According to him, the boom inflated record prices; now, with the higher fees Discogs is imposing, a sales decline that was almost inevitable post-lockdown has become steeper.
“They’re under the impression that they’re the only game in town.”
Even with all of those increasing costs, Discogs is still less expensive (albeit now only slightly) than alternatives like eBay or Amazon. But those alternatives, being considerably larger and more mainstream, offer a much broader base of potential buyers as well as a more solid infrastructure and support system.
“eBay has much more of a user base, so for the little bit of extra cost it’s a no brainer,” says Martin, who says that, for him, eBay’s fees are usually around 1 percent higher than Discogs’. “It’s probably double [the business] I do on Discogs, and that’s only grown since they raised the fees.” He sells primarily new vinyl and uses Amazon, Walmart, eBay, and Discogs, along with his own website, apocalypsevinyl.com. With the new fees and the competitiveness of the Discogs market, the platform is becoming less and less useful as a selling channel.
“They’re under the impression that they’re the only game in town,” says the Connecticut seller of Discogs. “The fees were relatively low, but now that they’re higher, there doesn’t seem to be a reason to use that anymore.” He’s been selling on Discogs since 2009; since the recent changes, he’s lowered his prices to offset the higher shipping costs and was compelled to institute an order minimum — a major shift for a marketplace that had done considerable business in selling records under $10 and even under $5.
Discogs attributed the need to raise fees to its “significant investments in recent years to ensure compliance with various regulatory programs, including tax support and privacy protection.” The company said the change would allow it to “continue to devote resources to maintaining the Discogs Marketplace and develop better tools for collecting, selling, and enjoying music.”
Many sellers who spoke with The Verge speculated, in line with the viral thread, that the company was trying to pump up its valuation for a potential sale. All of them, though, had the sense that Discogs was trying to increase its profit margins without necessarily offering any improvements to its product in return.
“It just seems like they’re actively trying to stop sales,” says the Connecticut seller. “You can raise your fees, but maybe you could do some promotions, coupon codes, sales — something that offsets the shift. Sellers can do it on their own, but that’s going to require them to lower their prices — it’s going to be a race to the bottom. If you were trying to ruin a sales forum, this is how you’d do it.”
Discogs did have a sale in late August, but it featured just 11 of the site’s largest stores. “When I first saw it, I thought, maybe they’ll be randomly promoting stores or the best products,” says Martin. “I don’t know a big sale that most people are not part of that you promote to further depress our prices is the right direction.”
The website itself is a frequent source of complaints, as is the lack of support. (My query for a press contact was sent on July 25th, for example; I received a response on August 23rd.) “I guess the most apparent thing has been the lack of updates, or any positive progress in the operation of a website,” says Melkisethian, who has been selling on Discogs since 2011. “It was a little bit quaint back then, but it has not improved in any way. It’s actually only gotten worse, which is kind of funny — but knowing how much money I’ve given them and other people give them, it’s like, who’s steering the ship?”
Discogs is in the process of rolling out a redesign, one that — to look at the forums at least — doesn’t have many fans among the Discogs lifers but is definitely sleeker-looking. According to the sellers who spoke with The Verge, bugs abound: the European seller, for example, had just been dealing with an issue with the platform’s refund button. “Discogs said it was PayPal’s fault, and PayPal said it was Discogs’ fault,” he says. “It caused stress for the buyers, and so I had to do direct refunds — which meant I was refunding not just what I made but Discogs’ and PayPal’s commissions as well, effectively losing money on the refund.” Melkisethian, speaking a month later, had just noticed a shift in the way shipments are processed that required manually entering information in steps that used to be automated.
Besides the baseline functionality of the site, there are other improvements that could bring Discogs closer in line with its competitors. “There are other seller tools and seller initiatives that we’ve been asking for for years that have never been done — like any kind of tie-in with Google, any kind of integration with social media, the kinds of things basically other platform has,” says Martin.
The database is another aspect of the site that could be threatened by the fee increases. If sellers and buyers move elsewhere, that database will likely become less exhaustive. “Ever since the price increases, I’ve noticed that less and less new albums are being added to the database,” says Martin. “When we get new stock in, we have to match it up with a UPC on Discogs and we’re noticing it’s not there as often as it used to be.”
A beloved internet sanctuary gets bled for profit to the detriment of its functionality — by 2023, it’s become just about the most familiar story online. Discogs, hopefully, will not become the latest in a long line of formerly useful sites; for the moment, though, sellers feel alienated by the small company they once viewed as an ally in an optimistic mission to share knowledge about music.
“There are a lot of good things about Discogs, and I think Discogs is worth fighting for and saving,” says Melkisethian. “I think it’s still more of a good than a bad. But the people at Discogs need to be aware of what makes it special — to think about the little guys with the records.” | Consumer & Retail |
Patricia De Melo Moreira/AFP via Getty Images
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Binance Co-Founder and CEO Changpeng Zhao, widely known as CZ, speaks during a press conference at the Europe's largest tech conference, the Web Summit, in Lisbon on Nov. 2, 2022. The SEC sued Binance and CZ on Monday, saying the company misled customers among other charges.
Patricia De Melo Moreira/AFP via Getty Images
Binance Co-Founder and CEO Changpeng Zhao, widely known as CZ, speaks during a press conference at the Europe's largest tech conference, the Web Summit, in Lisbon on Nov. 2, 2022. The SEC sued Binance and CZ on Monday, saying the company misled customers among other charges.
Patricia De Melo Moreira/AFP via Getty Images
U.S. regulators have targeted another giant in the world of crypto.
The Securities and Exchange Commission has filed 13 charges against Binance, the world's top crypto exchange, as well as its billionaire co-founder and CEO, Changpeng Zhao, who is widely know as CZ. It's the latest in a string of actions being taken against crypto companies.
In a lawsuit filed in the U.S. District Court for the District of Columbia, the S.E.C. accused Zhao and his company of misleading investors about Binance's ability to detect market manipulation as well as of misusing customer funds and sending some of that money to a company controlled by CZ, among other charges.
The SEC also accused Binance of running an unregistered trading platform in the U.S. and allowing U.S. customers to trade crypto on an exchange that is supposed to be off-limits to U.S. investors.
"Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law," said SEC Chair Gary Gensler, in a statement. "They attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so they could keep high-value U.S. customers on their platforms."
Regulators are going after crypto companies
SEC's actions are the latest in a barrage of actions being taken by regulators against crypto companies.
So far, the biggest target has been FTX, a company that collapsed in spectacular fashion and faces a slew of criminal charges that threaten to send its founder and former CEO, Sam Bankman-Fried, to prison for over 100 years.
Gensler himself has often compared the crypto world to "the Wild West."
Binance's market share has grown dramatically since FTX went out of business, and in recent months, it has been the focus of regulators and law enforcement agencies in the U.S. and around the world.
Most recently, in March, the Commodity Futures Trading Commission, accused the company of violating the Commodity Exchange Act and several CFTC regulations.
Kevin Dietsch/Getty Images
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Securities and Exchange Commission (SEC) Chair Gary Gensler testifies before the Senate Banking Committee on Capitol Hill, Washington D.C., on Sept. 15, 2022. Gensler has compared the crypto sector to the "Wild West."
Kevin Dietsch/Getty Images
Securities and Exchange Commission (SEC) Chair Gary Gensler testifies before the Senate Banking Committee on Capitol Hill, Washington D.C., on Sept. 15, 2022. Gensler has compared the crypto sector to the "Wild West."
Kevin Dietsch/Getty Images
Binance accused of not properly registering U.S. exchange
Like other large crypto companies, Binance operates products tailored to different countries and regulatory regimes.
Since 2019, Binance has run a separate exchange for customers in the United States, known as Binance.US, to comply with U.S. laws. As such, U.S.-based investors aren't supposed to use Binance's global platform, known as Binance.com.
But in today's filing, the S.E.C. says the company and its chief executive "subverted their own controls to secretly allow high-value U.S. customers" to trade on its international exchange.
Two subsidiaries, BAM Trading and BAM Management, supposedly controlled the U.S. operations independently, but according to the S.E.C., that firewall has been more permeable than the company has let on publicly.
"Zhao and Binance secretly controlled the Binance.U.S. platform's operations behind the scenes," the agency said, in a statement.
In speeches and congressional testimony, Gensler has called on crypto companies to register with the S.E.C. In today's filing, the S.E.C. says Binance failed to do that.
The defendants "chose not to register, so they could evade the critical regulatory oversight designed to protect investors and markets," the S.E.C said, in its suit.
The agency points to a message Binance's chief compliance officer sent to a colleague in 2018:
"[w]e are operating as a fking unlicensed securities exchange in the USA bro," he wrote. | Crypto Trading & Speculation |
The cost of the unaccountable CFPB keeps getting higher
The Consumer Financial Protection Bureau faces a constitutional reckoning when the Supreme Court hears arguments on Oct. 3 in CFPB v. Community Financial Services Association of America. Trade associations successfully argued at the Fifth Circuit Court of Appeals that the CFPB’s structure violates the Appropriations Clause because the CFPB does not receive appropriations from Congress, making the agency unaccountable.
Why should you care? Because until congressional oversight becomes a reality, the CFPB will continue to adopt and enforce inconsistent, unpredictable positions that harm consumers and financial institutions alike.
Nowhere is the CFPB’s fickle regulation-by-hindsight more evident than in the campaign against so-called “junk fees.” Nobody likes paying fees, but the CFPB’s quest for simple proclamations over studied solutions creates more problems than it solves, harming the very people the agency claims to protect.
Let’s say you buy lunch with your debit card. At the time you put down your card, your bank’s best estimate — without knowing about any outstanding checks, upcoming pre-authorized payments, or the amount of a tip you will leave, if any — is that you have the money available to cover the meal. But by the time the transaction is actually paid (typically a few days later), your account balance may have turned negative. Maybe checks you wrote cleared just after you ate. Maybe the tip on that meal put you into the red, or other pending charges settled.
If you’re not tracking your spending, when that debit-card lunch transaction from a few days ago is paid, you could end up overdrawing your account. If that happens, your financial institution may charge you an overdraft fee for covering that transaction when you lacked sufficient funds.
A few years ago, the CFPB cautioned consumers about exactly this scenario. “Just because your account has enough funds when you’re at the checkout counter doesn’t mean you’ll have the funds later when the transaction finally settles,” said the agency, noting that “overdraft fees can occur” in such a situation.
Fast forward to 2022, when the CFPB ordered Regions Bank to pay more than $140 million for charging what the agency now called “unlawful authorized-positive fees.” Regions “charged overdraft fees even after telling consumers they had sufficient funds at the time of the transactions,” said the CFPB press release. In a bizarre reversal, the CFPB now views it as unfair for banks to wait until someone actually overdraws their account to determine whether they have overdrawn their account.
Forgive the bank compliance officers straining to read these tea leaves.
The ironic result of the CFPB’s positional change will be an increase in overdraft fees for consumers. Financial institutions seeking to avoid CFPB scrutiny on overdraft fees must now determine whether an account is overdrawn when a card is swiped, rather than when the funds leave the account (that is, at the time of payment). This means consumers may get hit with overdraft fees on transactions that never overdraw the account, because funds arrive between authorization and payment, the customer transfers funds between accounts through a mobile app, or because an initial authorization hold (say, when you checked into a hotel or rented a car) is greater than the ultimate purchase amount.
We see the same counterproductive, anti-consumer effects in other CFPB policies. The CFPB prides itself, for example, on limiting or eliminating overdraft fees. But as counterintuitive as it may seem, data show that limiting overdraft fees harms low-income people’s access to banking services. The Federal Reserve Bank of New York recently examined what happened several years ago when national banks were exempted from state overdraft fee caps. Those banks did charge customers more for overdrafts, but they also used that revenue to reduce required minimum balance requirements. And minimum balance requirements “rank first among reasons unbanked households are without an account.”
As a result, the share of low-income households with a checking account rose by 10 percent, and the rate at which checks were returned due to insufficient funds declined by 15 percent. Capping overdraft fees, the report concluded, has the net effect of hampering, rather than fostering, “financial inclusion.”
So the road to hell really is paved with good intentions.
If the CFPB were subject to congressional oversight, or if it were engaged in formal rulemaking rather than coercive enforcement actions, it could learn these facts and examine the policy trade-offs that it currently refuses to consider.
Both consumers and bankers should hope the Supreme Court restores accountability to an agency that has none.
Fred Burnside is a partner in the national financial services practice at Davis Wright Tremaine LLP and regularly defends class action lawsuits challenging fees charged by banks and credit unions.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
Netflix phases out 'basic' streaming plan from its subscription options in Canada
Netflix Canada is done with being basic.
The streaming giant says it's phasing out the $9.99 "basic" option from its price plans, taking away the cheapest subscription without ads.
That means new Netflix subscribers will have to decide whether they're ready to sit through commercial breaks or fork out a bit more money for an ad-free experience.
Netflix's ad tier costs $5.99 and allows viewing on up to two screens at once with commercial interruptions.
The next level up is $16.49 per month to watch without ads, with simultaneous viewing on two devices. There's also the premium plan for $20.99 with 4K high-definition video and the option to add up to two members who don't live in their household.
The change in subscription options comes months after Netflix used the Canadian market as a testing ground for its password-sharing crackdown.
Netflix has already removed the basic tier for new subscribers and a company representative said it will also be removed as an option for current members "in the near future."
Subscribers currently on its $9.99 basic service will be grandfathered into the plan unless they switch to another option or cancel their account.
This report by The Canadian Press was first published June 23, 2023.
YOUR FINANCES
Are you debating whether you should pay your taxes off with a credit card? Paying your taxes off with a credit card could work to your benefit. However, there are also some considerable drawbacks to take into account, says contributor Christopher Liew.
Is there ever a good time to discuss your salary? Personal finance contributor Christopher Liew outlines some basic salary disclosure etiquette and goes over the pros and cons of discussing your salary with coworkers.
Personal finance contributor Christopher Liew explains how First Home Savings Accounts work, who’s eligible for the program, and outlines the contribution rules.
Opening a Registered Education Savings Plan (RESP) is a great way to fund your child’s future education. Personal finance contributor Christopher Liew outlines the contribution rules for RESPs and explains how to find out how much contribution room you have left so that you can avoid penalties.
opinion | Is it a good time to buy a new vehicle?
If you're like many would-be vehicle shoppers, you may be wondering when prices will finally drop. The good news is that the vehicle market seems to be finally stabilizing, says personal finance contributor Christopher Liew.
Personal finance contributor Christoper Liew shares the latest information about who’s eligible for the grocery rebate, when they can expect their payments, and some helpful tips on making the most of your grocery rebate.
opinion | Dos and don'ts of money while travelling
As a former financial advisor, I’ve always been fascinated by how the 'culture' around money differs from one region of the world to another,' writes personal finance commentator Christopher Liew. 'Today, I’ll outline some of the interesting money habits that I’ve noticed while travelling the globe, starting with some of our own!'
With the rising cost of food and living expenses, you might be considering asking for a raise. On CTVNews.ca, personal finance contributer Christopher Liew explains how inflation could determine the extent of your raise, as well as other key factors. | Consumer & Retail |
LT Foods Aims At Crossing Rs 10,000-Crore Consolidated Revenue In 4 Years
LT Foods Ltd., is aiming at crossing the Rs 10,000-crore revenue mark in 4 years
Global FMCG company LT Foods Ltd., which owns the 'Daawat' brand of basmati rice, is aiming at crossing the Rs 10,000 crore revenue mark on a consolidated basis in the next four years, an official said on Monday.
At the group level, the revenue was close to Rs 7,000 crore in FY'23, he said.
The company is also focusing on value-added products, including those in the ready-to-cook and ready-to-eat categories, in a bid to strengthen its position globally.
"We have grown by 28% in the last fiscal and will maintain a 10-12% compound annual growth rate over the next few years. At the group level, the revenue was close to Rs 7,000 crore in FY'23 and will cross the Rs 10,000 crore mark in the next four years," LT Foods CEO (India and Far East) Ritesh Arora said.
The company is diversifying into new value-added product categories, and the revenue from this segment is projected to grow four-fold to be 10% of the company's total turnover in the next 4-5 years, he said.
"We are open to acquisitions in the value-added segment to grow inorganically. The company had acquired 51% of the Jasmine rice brand 'Golden Star' in the U.S. last year," Arora said.
"Daawat Biryani Kit' in three flavours and Cuppa rice are among the products placed in ready-to-cook and ready-to-eat categories," he said.
"The new categories are getting good traction, and the company will deepen the geography of its presence", Arora said.
With its portfolio of six brands and a significant market share in the basmati rice category, the company is 'well-positioned to capitalise on the growing demand for food products in India and abroad', he claimed.
India accounts for about 30% of the company's total consolidated revenue, while the rest comes from various international markets like the US, Europe, the Far East, and the Middle East.
Arora said, "LT Foods has a market share of nearly 30% in the basmati rice category in 1 to 10 kg pack SKUs."
The company is also involved in the bulk basmati segment.
Commenting on India's growth plans, he said, "We see good traction in demand."
On the promoters' holding, which is now at 51%, Arora stated that they will not dilute their stake further.
Saudi Agricultural and Livestock Investment Company, through its arm, SALIC International Corporation, acquired about a 9% stake in LT Foods last year. | India Business & Economics |
- Alibaba founder Jack Ma held off on plans to trim his stake in the Chinese e-commerce giant after the share price fell.
- Ma has not sold a single share, Alibaba's Chief People Officer Jane Jiang told employees in an internal memo seen by CNBC.
- Alibaba's regulatory filings last week revealed Ma is looking to sell 10 million shares at a value of around $870 million.
Alibaba founder Jack Ma held off on plans to trim his stake in the Chinese e-commerce giant after the share price fell.
Ma has not sold a single share, Alibaba's Chief People Officer Jane Jiang told employees in an internal memo seen by CNBC. Alibaba's stock is currently trading below the company's actual value, Jiang said, citing this as a reason Ma has not cut his stake.
Alibaba's regulatory filings last week revealed Ma is looking to sell 10 million shares at a value of around $870 million. Those plans were revealed in a regulatory filing on Nov. 16, the day Alibaba released its September quarter earnings.
As part of its earnings release, Alibaba said it would no longer proceed with a spinoff of its cloud computing business, something investors were closely monitoring. This sent shares tumbling around 9%.
However, the plans to sell shares were made in August and coincidentally were made public on Nov. 16, Jiang said.
In August, Alibaba's U.S.-listed shares were trading as high as $101. On Wednesday, they closed at $78.94. That would mean if Ma sold 10 million shares, it would net around $789.4 million, significantly lower than the $870 million he was seeking.
Jiang added that Ma's plan to sell down his stake at a higher selling price shows his confidence in the business.
Alibaba was not immediately available for comment.
Ma and his empire were targeted by Beijing as part of a broader crackdown on China's technology sector that sought to reign in the power of its domestic giants.
The Alibaba founder has dedicated his time to teaching and research in areas such as agricultural science. | Asia Business & Economics |
- Retailers who have blamed organized theft for lower profits could be overstating the crime's impact to cover up internal flaws such as steep discounting and bloated inventories, experts told CNBC.
- Companies are quick to blame organized theft for shrink losses, but behind closed doors the parallel issues of employee theft and self checkout are their primary focus areas, experts say.
- Foot Locker pointed to organized retail crime in part for slimmer margins in May when the retailer reported dismal quarterly results.
This is part two of a three-part series on organized retail crime. The stories will examine the claims retailers make about how theft is impacting their business and the actions companies and policymakers are taking in response to the issue. Read the first story here and stay tuned for part three.
During recent earnings calls, major companies have blamed disappointing bottom lines or shrinking margins in part on roving bands of organized gangs that ransack their shelves. The issue could come up again as a string of major retailers start to report second-quarter results next week.
But behind closed doors, retailers are facing other issues they can better control, including theft by their own employees, that are contributing to losses, according to two sources who advise major retailers. They spoke on the condition of anonymity because they're not authorized to speak publicly about clients.
Many retailers have invested in technology to better understand what leads to shrink, or the gap between the inventory a company has and what it sells. Some companies have since identified theft from employees as a major contributor to losses, even as they blame external theft in public, said one of the sources.
Losses from self-checkout theft have also become a major issue, the people said.
While some retailers may be seeing higher rates of shrink because of poor hiring practices and self-checkout machines, others such as Target and Foot Locker could be using retail crime as a crutch to obscure internal challenges, experts told CNBC.
"Shrink has been going up but sometimes it's very difficult to unpack how much is down to theft and how much is down to internal retailer issues and stumbles," Neil Saunders, a retail analyst and the managing director of GlobalData, told CNBC.
"It is a problem, we know that, it does take money off margins, we know that, but there's too much opacity in the way in which it's reported and it is being partly used as an excuse for generally bad performance," Saunders said.
In the age before shoppers found deodorant and candy bars locked up in drugstores across America, employee theft largely drove shrink, said Patrick Tormey, an adjunct professor at the Lehman College School of Business, who spent more than 40 years in the retail industry.
The trend may not have changed much, despite what companies say in public, according to experts.
"The theme that comes back the most right now is internal theft … they're realizing that a lot of [losses] come from there," said one of the sources who advises retailers. "If there's an occurrence of external theft they would steal let's say 10 bucks worth of merchandise, but if it's internal theft, it'd be 40 bucks."
There is no conclusive data to indicate that employees do steal more goods than outsiders, but retailers have gotten better at identifying internal theft, the person said.
Retail workers have access to entire cases of merchandise in backrooms and it's "relatively easy" to take large quantities of goods without anyone noticing, one of the sources said. The theft can also go undetected for a long period of time because it's not as noticeable as a shoplifter who is in public view, the person said.
Internal theft also happens at warehouses and in aisles where online orders are prepared, one of the people said. In some cases, a worker may know the person receiving the goods and may add extra merchandise into a shipment, one of the people said.
"It's a little bit like organized crime in some way, but not like mafia-style, just a few people [working together]," said the person.
Sonia Lapinsky, a partner and managing director with AlixPartners' retail practice, told CNBC that retailers have struggled to properly staff stores over the last few years. They can't always find the right workers, and some have also felt pressure to lower staffing levels to control costs, she said.
"Folks are notoriously working multiple jobs these days and just feeling the pressure and having to pick up jobs everywhere," said Lapinsky. "If this is not something that they're necessarily loyal to, or see as a long-term place, then there's probably more risk of theft as well."
David Johnston, the vice president of asset protection and retail operations at the National Retail Federation, said employee theft has long been the largest contributor to shrink and staff have at times been involved in organized theft rings. However, he thinks internal theft is now "second place" to external theft.
Retailers have another self-made problem that can lead to more stolen goods. Self-checkout machines also increase the risk of theft, and they have become a major source of losses, the two company advisors told CNBC.
The machines come with increased costs. In some stores with high rates of theft, losses are outweighing the investments companies made in them, the people said.
"You create a problem where there wasn't one," one of the people said.
Retailers started to blame organized theft for lower profits as the industry's performance started to suffer.
Janine Stichter, a retail analyst and managing director at BTIG, has been covering the retail industry since 2008. She didn't really hear companies talk about shrink in their earnings calls until about a year and a half ago — right around the time the economy started to soften, she said.
"It's really kind of hit a fever pitch," said Stichter.
Home Depot, Best Buy and Walgreens were some of the first retailers to start speaking out about theft. Now a range of companies are saying it has reduced their margins, some for the first time in recent years.
"I think there is a bit of bandwagoning at the moment," said Saunders from GlobalData. "I think one of the things that happens is somebody mentions it and it then becomes a bit of a buzzword and then everyone pays attention to it and it suddenly starts getting called out."
In May, Target rattled investors when it said it was on pace to lose $1 billion this year from inventory losses driven by stolen goods. Two days later, Foot Locker said "theft-related shrink" contributed to a 4 percentage point drop in its gross margin.
"This has been a multiyear dynamic in the industry. We are not immune to it. It's increasing. You've heard Target talk about it and others. And so, it's having an increased impact on Foot Locker," CEO Mary Dillon said on a call with analysts. "We've seen a significant increase of theft from stores and usually through this lens of an organized retail crime type of action."
The reference came as Foot Locker reported dismal results for the quarter. It was the first time it called out shrink cutting into its profits in more than 14 years, according to records accessible on FactSet.
The retailer said its merchandise margins fell 2.5 percentage points because of "higher promotions" and the rise in theft-related shrink.
Three analysts who cover Foot Locker told CNBC the vast majority of that drop likely came from promotions. At the time, the company was grappling with high inventory levels and soft sales, forcing it to rely on discounts to drive revenue.
Foot Locker did not return repeated inquiries from CNBC about how much of its margin hit came from promotions and how much of it was due to shrink.
Tormey, the Lehman College professor, said retailers have thrown around the words shrink and theft so often, investors "chalk it off as a sign of the times," which can allow companies to use it as a "crutch" for poor merchandising, store design and other internal flaws.
"It's just a quick aspirin for the headache, so to speak," said Tormey. "It's a lot harder to pin down exact numbers so they can use it and people just kind of nod their head, 'Oh, yeah, it's a shame,' without really [questioning], was it your employees stealing from you? Was it shoplifting? Was it vendor misconduct? You know, are you a sloppy retailer?"
Over the last two decades, Target had not mentioned shrink hitting its margins during earnings calls until August 2022, when the company and other retailers were buried in inventory they were having trouble unloading, according to FactSet.
At the time, Target's inventories had climbed 36% year over year and its profits had dropped nearly 90% in the quarter ended that July. The company had marked down items significantly to clear out excess merchandise that was no longer in demand.
When Target explained why its gross margin had fallen nearly 9 percentage points year over year, it blamed higher markdown rates, lower-than-expected discretionary sales and higher shrink.
By the following quarter, when inventories had begun to moderate but were still up 14%, Target mentioned organized retail theft during an earnings call for the first time in its modern history. It said shrink had contributed to profits plunging by about 50%.
"As [CEO Brian Cornell] mentioned, this is an industrywide problem that is often driven by criminal networks, and we are collaborating with multiple stakeholders to find industry-wide solutions," Target's finance chief Michael Fiddelke told analysts. "For example, because stolen goods are often sold online, Target strongly supports the passage of legislation to increase accountability and prevent criminals from selling stolen goods through online marketplaces."
While theft has hit Target's bottom line, it also has to contend with high shrink from other parts of its business. Spoiled food from the retailer's grocery aisles and its inventory practices can both weigh on profit.
When companies deal with higher than usual inventories, more items can be lost or damaged. As Target grows its e-commerce business and pickup and delivery options, there's more room for error as merchandise moves around.
"Target is not always the best at managing its own inventory. It does tend to have a lot of out of stocks at stores, it does tend to have a supply chain that's quite fragmented and it's very easy for things to be misallocated and mis-accounted for within that," said Saunders. "I'm sure bundled in with their number there's a lot of things where Target has just lost stuff, broken stuff, put stuff in the wrong stores, put it in the wrong location, can't find it."
In response, Target said its shrink numbers vary widely by location and do not correlate with inventory levels. The retailer said it sees a relationship between levels of shrink and stores with higher safety and crime incidents, rather than overall levels of inventory in a store. | Consumer & Retail |
Retirement, ideally a period of relaxation and enjoyment after years of hard work, is often envisioned as a time to pursue hobbies, travel or simply unwind.
But for many, this phase of life is marred by financial worries, transforming what should be a golden era into a source of dread. A recent study from Zety sheds light on this growing concern, revealing that 40% of Americans fear retirement more than death, primarily because of financial insecurities.
This fear is more acute among married couples, who face the added complexity of planning for two people with varying financial needs. A NerdWallet study, using the 2022 Survey of Consumer Finances, underscores this challenge, indicating that 60% of Americans lack a retirement-specific account. The disparity in average household retirement savings by age group further illustrates this issue:
Under 35: $49,130 (median: $18,880)
Ages 35 to 44: $141,520 (median: $45,000)
Ages 45 to 54: $313,220 (median: $115,000)
Ages 55 to 64: $537,560 (median: $185,000)
Ages 65 to 74: $609,230 (median: $200,000)
These figures show a significant gap between the average and median savings, pointing to a broad spectrum of financial preparedness across different age groups.
To guide couples in their retirement planning, T. Rowe Price provides savings benchmarks as multiples of income, varying by household income and marital status. For example, a dual-income married couple with an annual income of $75,000 at age 55 should have retirement savings equal to five times their income, which should increase to 8.5 times by age 65. In contrast, a sole earner at the same income level should aim for 4.5 times their income at age 55, increasing to seven times by age 65. These benchmarks scale up for higher-income brackets.
Take Action: Locate a financial advisor near you, for free.
To address these concerns, financial advisers are key. They offer personalized guidance, helping couples create comprehensive retirement plans based on their unique financial situations and goals. For those anxious about their retirement funds, several practical solutions exist:
Increase savings rate: Even small increments in savings can yield significant long-term benefits.
Maximize retirement accounts: Use employer-sponsored plans and individual retirement accounts (IRAs) to their fullest potential.
Reduce debt: Lowering high-interest debt frees up resources for retirement savings.
Delay Social Security: Postponing benefits can lead to higher monthly payments.
Diversify investments: A balanced mix of assets can optimize returns and mitigate risks.
Create a budget: Tracking expenses helps identify savings opportunities.
Consider working longer: Additional working years can boost retirement income and savings.
Review and adjust regularly: Keeping retirement plans up to date ensures alignment with changing financial circumstances.
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This article The Average American Couple Has Saved This Much Money For Retirement — How Do You Compare? originally appeared on Benzinga.com
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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. | Personal Finance & Financial Education |
Earning more money can make it easier to pay the bills, fund your financial goals and spend on hobbies or “fun,” but what income is considered to make you rich? The answer can depend on several factors, including where you live, what type of job you have, how much you save or invest and how you typically spend your money. If you’re looking for help to reach your financial goals and be considered “rich” in your own eyes then consider building a plan and working with a financial advisor.
What Income Is Considered Rich?
Pinning down an exact income level that qualifies you as “rich” is difficult, as there are numerous studies and surveys that attempt to measure it. To keep things simple, let’s consider where the Internal Revenue Service (IRS) sets the bar for the top 1% of earners first.
According to the most recent data available for fiscal year 2019, an income of $540,009 per year puts you in the top 1% category. Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you’re in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
What Is a Rich Monthly Income?
The amount of money you need to make each month to be rich depends on which metric you’re using. If you’re going by the IRS standard, then you’d need to make approximately $45,000 a month to be rich. On the other hand, if you’re aiming for the top 1% as measured by the EPI, you’d need a monthly income of $68,277.
To reach that level of income, you’ll likely need to have something more than the typical 9-to-5 job. Examples of people with monthly incomes in that range can include successful business owners, celebrities, athletes and online influencers or content creators.
How Much Income Do You Need to Be in the Top 20%?
The real median household income in the U.S. is around $71,000, according to the latest Census Bureau data. In order to be in the top 20% of income, you’d need to earn nearly double that amount or an average of $130,545 per year.
That’s according to a SmartAsset study of income distributions in the 100 largest U.S. cities. The study found a wide range of income distributions geographically, with residents of San Francisco needing an income of $250,000 or more per year to land in the top 20%. Meanwhile, you’d need an income of $70,444 to be a top 20% earner in Detroit.
It’s important to remember that the definition of what it means to be rich is subjective. Someone who makes $250,000 a year, for example, could be considered rich if they’re saving and investing in order to accumulate wealth and live in an area with a low cost of living.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Rich vs. Wealthy: What’s the Difference?
Being rich is one thing, but being wealthy can mean something entirely different. Someone who’s rich may have cash available to spend on luxury goods or take expensive vacations. A wealthy person, on the other hand, might be more focused on increasing their net worth and creating a long-lasting financial legacy.
So, what’s the cutoff to be considered wealthy? Again, it’s subjective and there are lots of different numbers that may be tossed around. Someone who has $1 million in liquid assets, for instance, is usually considered to be a high net worth (HNW) individual. You might need $5 million to $10 million to qualify as having a very high net worth while it may take $30 million or more to be considered ultra-high net worth.
That’s how financial advisors typically view wealth. The average American, on the other hand, sees $774,000 as a sufficient net worth to be financially comfortable and a net worth of $2.2 million to be wealthy, according to Schwab.
How to Become Rich
If you’d like to reach millionaire status or join the ranks of the rich, you’ll need a strategy for achieving that goal. Short of winning the lottery or inheriting a fortune, becoming rich takes some effort. Just how much effort can depend on where you’re starting from.
Here are some of the most impactful steps you can take to become rich.
Earn more: Increasing your income means you’ll have more money to save, invest and pay down debt, all of which can help to boost your net worth. There are different ways to increase income, including negotiating a pay raise, pursuing higher-paying roles, taking on a part-time or second job and starting a profitable business or side hustle.
Budget: Budgeting is one of the simplest ways to take control of your money and become rich. When you budget, you’re deciding how to allocate the income that you have each month. That makes it easier to work toward your goals of saving and increasing your net worth.
Reduce debt: Your net worth is calculated based on how much you owe versus what you have in assets. Paying down debt can help you get on the path to becoming rich if you’re able to free up more money for saving and investing. If your debt is expensive due to high-interest rates, consolidating or refinancing it or using a 0% APR balance transfer could make it easier to pay down what you owe.
Invest: Investing and saving money are both important but they’re entirely different. When you save money, you’re typically putting it into a savings or CD account at your bank where it can earn a little interest. When you invest, you’re putting your money into the market where it has the potential to earn much higher returns. If you’re not investing yet, the easiest way to get started is to contribute to your retirement plan at work. You might have a 401(k), for example, which you can contribute to from your paychecks automatically. As an added bonus, your employer might match some of what you put in, which is free money for you. In addition to a workplace retirement plan, you can also begin building wealth through an Individual Retirement Account (IRA) or a taxable brokerage account.
Get professional advice: Talking to a financial advisor can help you formulate a plan for saving and investing in order to build wealth. Your advisor can also guide you through the basics of making a budget and creating a workable debt payoff plan.
The Bottom Line
In terms of what income is considered rich, there’s no single number to go by. How you define being rich for yourself can depend on the amount of money you need to feel financially comfortable and how you use the income and assets that you have. To one person it means not worrying about money while to others it just means having enough money in retirement to not impact their lifestyle. Once you define what rich means to you then you can build a financial plan to help you reach that goal.
Financial Planning Tips
Consider talking to your financial advisor about the best ways to approach financial planning if becoming rich or wealthy is one of your goals. If you don’t have a financial advisor yet, finding one doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can 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.
Earning a higher income can mean paying more in taxes. So while you might be rich from an income perspective, you could be handing back a large chunk of your earnings to the IRS. You can use SmartAsset’s free income tax calculator to estimate what you might owe.
Photo credit: ©iStock.com/Moyo Studio, ©iStock.com/Inside Creative House, ©iStock.com/recap-bg | Personal Finance & Financial Education |
Rachel Reeves has refused to say whether a Labour government would reverse any inheritance tax cuts introduced in the Autumn Statement this week.
Jeremy Hunt, the Chancellor, is said to be considering cuts to inheritance tax as part of a pre-election strategy to reduce the tax burden and boost growth.
However, Ms Reeves, the shadow chancellor, said on Sunday that cutting the tax was “not the right thing to do” now, but added that she was not going to make any manifesto commitments ahead of an election.
“I will set out all of our plans that will be fully costed and fully funded in our manifesto,” she told BBC’s Sunday with Laura Kuenssberg.
“I don’t want to write the manifesto here on your programme. I don’t think I can be any clearer.”
She added: “Cutting inheritance tax in the middle of a massive cost of living crisis and when public services are on their knees is not the right priority.
“I understand people’s desire to pass onto their children what they have worked hard for, but right now that is not the right thing to do and we would not support it.”
Rishi Sunak is said to be reconsidering announcing the tax cut amid concerns over a backlash from Red Wall Tory MPs if he uses his fiscal windfall of £20 billion to deliver cuts for the rich rather than ordinary families.
The Institute for Fiscal Studies estimated that four-fifths of any inheritance tax cut would benefit those with more than £1 million upon their death. Each person with more than £1 million would receive an average tax cut of £180,000.
It has raised speculation that Mr Sunak and Mr Hunt could delay any inheritance tax cut until next year’s Budget. Instead, they are said to be considering income tax cuts through raising the thresholds at which families pay higher rates, and reforms to National Insurance.
Ms Reeves also refused to say whether she would reverse the Government’s plans to cut wider benefits of those who refuse to engage with their jobcentre or take on work offered to them.
The plans could see those sanctioned denied access not just to welfare payments but also associated benefits such as free prescriptions or help with energy bills.
Ms Reeves said: “They have been in power now for 13 years. If it’s the case that people can play the system and not look for work whilst claiming taxpayers’ money, that’s on them, what have they been doing for 13 years?
“For me, it’s about tackling the root cause of the problem. There are 7.8 million people on hospital waiting lists and there are 2.6 million people who are off work sick. Those two things are linked, we have got to get our NHS functioning properly, because that’s the way to get our economy working properly.”
Asked repeatedly if people play the system, she added: “It’s my personal belief that people are desperate to improve the lives of them and their families, that there are too many people who come to see me at my surgeries who are struggling to put food on the table, are struggling to pay their rents, and I want to help them to get work, and that starts by fixing our National Health Service.”
Ms Reeves also said that Labour would raise benefits in line with September inflation figures if elected.
“The election is likely to come in a year’s time and the Government will have already implemented that, but in government I will use the inflation rate that is traditional, the September inflation, to uprate benefits,” she said.
“If you pick and choose from year to year which inflation number is the cheapest thing to do, then what you see is the gradual erosion of people’s incomes.” | United Kingdom Business & Economics |
Higher Losses During Natural Disasters Due To Abysmally Low Insurance Cover Of 8%: Report
India has been ranked third, after the U.S. and China, in recording the highest number of natural disasters since 1900.
Calling for out-of-the-box solutions to address the rising cases of natural disasters, which have since 2001 killed almost 85,000 people and thousands of crores in losses, a report has said the higher losses are due to the abysmally low insurance cover of just about 8%.
India has been ranked third, after the U.S. and China, in recording the highest number of natural disasters since 1900.
The country had 764 natural disasters, such as landslides, storms, earthquakes, floods, droughts etc since 1900, with 402 events occurring during 1900-2000 and 361 during 2001-22, indicating the preponderance of tail events at an alarming frequency and each such event setting new records of economic stress, SBI Research said in a report Monday.
By disaster type, the country is marred mostly by floods. Almost 41 per cent of disasters that occurred were floods, followed by storms. Since 2001, as many as 100 crore people have been impacted, and almost 85,000 people lost their lives.
And the country has the highest loss ratio, given its abysmally low insurance coverage for disasters.
Globally, the overall protection gap has increased to $151 billion in 2022, which is much higher than the 10-year average of $130 billion, and as much as 54 per cent of the total losses are uninsured. Though still large, this is less than the 61% average protection gap of the previous 10 years.
Among all the countries, France has a nationwide insurance scheme since 1989. From 2016, insured losses have exceeded 550 euros million each year, with the average annual loss standing at 810 million euros compared to an average annual loss of 310 million euros in 2000–15.
But for India, this is a staggering 92%, which means that an average Indian is insured of roughly 8% of what may be required to protect a family from financial shocks following the death of the breadwinner.
This means having savings and insurance of just Rs 8 for every Rs 100 needed for protection, leaving a protection gap of Rs 92, the report said and called for out-of-the-box solutions to tide over the losses.
"What we need is a public-private solution, say a disaster pool, for natural disasters as insurance can offer many benefits over government crisis loans and grants," the report said, pointing out that if just 2020 floods are considered, the total economic loss was Rs 52,500 crore but the insurance cover was of only 11%.
"If the government would have insured it, then the premium for the sum assurance of Rs 60,000 crore would have only in the range of Rs 13,000-15,000 crore."
And the losses due to the ongoing floods in the north is the range of Rs 10,000-15,000 crore as the calamity has severely hit Himachal Pradesh, Uttarakhand, Punjab, Uttar Pradesh, Rajasthan, J&K and Delhi. Himachal alone would have lost Rs 3,000-4,000 crore by way of damaged roads, transformers, electric sub-stations and water supply schemes, according to the report.
In the MSME sector, only 5% are insured and herein comes the role of the government, which could launch a partnership programme to cover MSME employees and provide social security to them in terms of insurance benefits and income protection for their families by insuring MSME promoters.
The contours of such a programme can involve bonuses to MSME entrepreneurs for running businesses sustainably for over a decade with regular payment of interest to banks and taxes to the government.
Even a bank can annually provide 0.5% of interest earned into a linked account with a lien, and after the successful running of the business with no default, the corpus built in the lien-marked account should be paid to the borrower as a mark of recognition of running a business, with the fulfilment of all financial discipline with a clause that it should be used for welfare of the employees.
Similarly, the PM-Jan Dhan Yojana scheme, which now benefits 120 million, can be provided to all the residents with an opt-in facility. | India Business & Economics |
Prosus-Backed PayU’s India Unit Seeks IPO Within Next 12 Months
The Indian unit of Prosus NV’s PayU financial technology firm is seeking an initial public offering within the next 12 months, according to Prosus interim Chief Executive Officer Ervin Tu.
(Bloomberg) -- The Indian unit of Prosus NV’s PayU financial technology firm is seeking an initial public offering within the next 12 months, according to Prosus interim Chief Executive Officer Ervin Tu.
“We are preparing for a potential listing of PayU, aiming for the second half of next calendar year,” Tu said on a call Wednesday after Prosus published its fiscal first half results.
The Indian payments business, which is PayU’s biggest, revenues grew 15% to $211 million in the period, driven by growth from existing merchants, its Wibmo unit and its omnichannel business, Prosus said in a statement.
India has a large, young and tech-savvy population that is increasingly using smartphones and the internet for services, driving demand for app-based services. Consumers in the South Asian country are switching to payment systems instead of cash-based transactions.
In India, PayU competes with the likes of Tiger Global Management-backed Razorpay and Walmart Inc.’s PhonePe.
Prosus this year said it plans to sell part of PayU to Israel’s Rapyd for $610 million in a deal that excluded units in India, Turkey and Indonesia.
©2023 Bloomberg L.P. | India Business & Economics |
The world’s largest crypto exchange, Binance, and its founder, Changpeng Zhao, pleaded guilty yesterday to criminal charges in the US, releasing a wave of pent-up tension that had hung over the crypto industry for years.Zhao, who also went by CZ, was one of the poster boys for crypto’s freewheeling and rebellious spirit, which hearkens back to the origins of the technology, built to undergird a parallel financial system outside the control of any government or bank. Under his leadership, Binance grew to become by far the world’s largest crypto exchange, but frequently clashed with regulators in the US and elsewhere. The company refused to establish a formal headquarters. According to the criminal indictment filed against Zhao in the US, he “prioritized growth and profits over compliance” and sought to take advantage of what he described as the “gray zone.” Zhao instructed employees that it was “better to ask for forgiveness than permission,” the indictment states.Although Zhao frequently tried to shrug off criticism of Binance on X, formerly Twitter, the investigation into the firm by the US Department of Justice was an open secret. It was also a source of collective anxiety for stakeholders across the industry, in which Binance had become deeply entrenched. If the exchange were to have buckled under the stress of a criminal conviction, the damage to investors would have been catastrophic and the ripple effects far-reaching.The agreement cut between Binance and the DOJ—under which the exchange must pay a $4.3 billion penalty, operate under tightened supervision by US authorities, and replace Zhao as CEO—is among the best possible outcomes for crypto. “It cleans up the industry’s image,” says market analyst Noelle Acheson, formerly of crypto brokerage Genesis. “Zhao could have laid low in any one of a number of no-extradition jurisdictions,” she says, but his guilty plea sends the message that Binance “wants to work with regulators going forward.”There is an extent to which Zhao was the last of his breed. In the wake of the collapse of crypto markets in May 2022, which brought to an end a period of frenzied hype and reckless spending that sent the price of crypto tokens to record highs, many of the industry’s figureheads have either been charged with or convicted of felonies. In February, the US government brought charges against Do Kwon, creator of the Terra-Luna stablecoin whose collapse in spring 2022 tipped the first fateful domino in the industry. In July, the DOJ charged Alex Mashinsky, founder of bankrupt crypto lender Celsius, with “orchestrating a scheme to defraud customers.” Earlier this month, Sam Bankman-Fried, leader of crypto exchange FTX and archrival to Zhao, was found guilty of overseeing a multibillion-dollar fraud.Binance’s new chief executive is of a pointedly different flavor, though. Replacing Zhao is Richard Teng, a former regulator who has little public profile. Teng had been tipped as a successor to Zhao since his promotion to head of regional markets at Binance in June, though he refused to be drawn on the question in an interview with crypto outlet CoinDesk at the time. He previously held the role of head of Asia, Europe, and MENA at the exchange.A source with knowledge of the company’s succession plan tells WIRED that Teng is well respected among Binance employees and a popular choice for the role.Acheson says the appointment of Teng—formerly CEO at Abu Dhabi Global Market, a financial regulator in the United Arab Emirates—can be interpreted as another sign that “Binance wants to cooperate with regulators.”The agreement between Binance and the DOJ “signals a regime change in the industry,” says Nic Carter, general partner at crypto VC firm Castle Island Ventures. “The paradigm of offshore, largely unregulated exchanges running rings around their onshore, more regulated counterparts is over … [The deal] makes it clear you can’t win by refusing to follow the rules.”The “optics of the deal” might be “challenging” in the medium term, says Carter, giving “more ammo to folks on the Hill that consider crypto a tool for illicit finance.” But overall, he says, the feeling is one of “relief.”In his first post on X after taking the role, Teng signaled that his experience in the regulatory sphere will dictate his approach to steering Binance, which had charted a more unpredictable course under Zhao. “To ensure a bright future, I intend to use everything I’ve learned over the past three decades of financial services and regulatory experience to guide our remarkable, innovative, and committed team,” Teng wrote.In a public statement detailing its settlement with the DOJ, Binance struck a similar tone. “Binance has been systematically working to restructure our organization and personnel, upgrade our systems, and establish a new industry standard in compliance,” it said. The word “compliance” appears in the statement on 20 separate occasions.The implied message: Things are about to get a whole lot more boring. | Crypto Trading & Speculation |
Seventy years ago, a Welsh woman started a fabric printing business from the kitchen of her London flat.
From those humble beginnings, Laura Ashley and her husband Bernard went on to grow a global brand.
They designed and produced fashion, fabrics and homeware from their headquarters in a small mid Wales village.
Now a plaque has been unveiled in Newtown, Powys to commemorate the links between the area and the company.
An exhibition of Laura Ashley Heritage quilts has also opened in the town's library.
Laura Ashley was born in Dowlais near Merthyr Tydfil in 1925.
She was inspired to design and print headscarves and tea towels by a visit to the Victoria and Albert museum in 1953.
She and Bernard opened their first shop in Machynlleth in 1961, and in 1967 established the headquarters in a huge factory in Carno, 12 miles from Newtown.
In its heyday, the factory in Carno employed more than 500 people and garments made there would go to shops around the world.
The company would pay for buses to bring workers in from towns and villages across north Powys. Laura Ashley was also seen as being ahead of her time in allowing mothers to leave work early to collect their children from school.
Lynne Jones worked as a wallpaper printer in Carno from 1979 to 1995.
He said: "I did an apprenticeship after leaving school for four years, and earned £40 a week. After coming to work for Laura Ashley, within a month I was earning £70 a week.
"She looked after women and children. They were allowed to come and go as they liked, and work from home too.
"I remember helping my mother to turn clothes inside out when I was very small. She was a farmer's wife and sewed for Laura Ashley from home, and earned good money too."
In a letter to the organiser of the exhibition, Laura and Bernard's son, Nick Ashley, wrote that Laura "used to freely admit that she owed all of her success to the people of mid Wales".
He added: "My mother offered plenty of opportunity as she was designing and making sewn products. This was a winning formula, local women were flocking to Carno to join in the friendly working atmosphere."
David Emanuel, another iconic Welsh fashion designer who designed Princess Diana's wedding dress, said Laura Ashley was an inspiration.
"The thought of a Welsh woman from Merthyr setting up this global operation, it gave you hope and you think, 'Well, perhaps I could be like that one day'," he said.
"She was wonderful and of course the look - it just took over the planet really."
Before her marriage, the Princess of Wales had been photographed wearing Laura Ashley's designs. David Emanuel says that, while Laura Ashley was not a direct inspiration for the famous wedding dress, she was a big overall influence on work of the time.
"Did Laura have an influence on the gown? Well, you live through it, you know it was fashion. Talking about Diana's wedding gown, we did our history, we looked at other royal brides through the ages.
"It was a very romantic time and Laura Ashley was right on the button, right there in this huge global business, and I think she has to be Wales's first fashion brand worldwide.
"I'm delighted that she's being honoured and quite rightly so. Her name is in fashion history. You cannot forget Laura Ashley."
The exhibition has been organised by Ann Evans, who worked for Laura Ashley for 20 years.
She said : "It's a celebration of the legacy of Laura Ashley in mid Wales, and the wealth of jobs that they provided for young people.
"She had an inspirational view on things and she empowered younger people and even older people that were working from home.
"She was definitely ahead of the time in terms of making sure that the women were dictating their hours, not the business."
The company surpassed agriculture as the largest employer in north Powys, at its peak employing more than 13,000 staff in 500 shops and 13 factories worldwide.
Carys Mair Jones, a lecturer in Art and Design in Newtown who has her own clothing brand called Barn Dancer, says Laura Ashley still has a place in contemporary fashion.
"She's definitely still relevant. It might not be obvious, but maybe subconsciously with all the floral prints, they're still around on the high street, just on a slightly different garment, and just in a more contemporary way," she said.
"We're still talking about her now, so it's obvious that she made a big impact."
Laura Ashley died in 1985, after falling at her daughter's home when she was just 60 years old.
The company went on, but over the following decades there was a gradual decline and hundreds of jobs were lost in mid Wales and elsewhere. The factory in Carno closed in 2005. The brand is still available, producing fashion and homeware.
Although nothing is made in mid Wales anymore, many people still remember the good years with affection
Ann Evans added: "A lot of people in this area still love their memories of working with Laura Ashley. The friendships that grew within the business have lasted a lifetime." | United Kingdom Business & Economics |
THE cost of food has been on people’s minds since the start of the Tory cost of living crisis.
The price of basic ingredients has soared, and there is an ever-growing need for both food banks and emergency food parcels – it is a worrying trend that shows no sign of slowing down, and the Westminster Tory government shows no sign of a willingness to help.
In fact, while I sat to write this column, the UK’s latest inflation figures were released. The Office of National Statistics reported that the price of food rose at the second-highest rate in 45 years.
The normalisation of food poverty is a pandemic in itself.
Consecutive Westminster Tory governments have dismantled the social security system and caused economic chaos – resulting in people being unable to place food on the table. The reliance on food banks must be seen as a systemic failure in the UK’s social security system, as well as a symptom of remaining within an unequal union.
It sickens me that it is now commonplace to read reports of formula milk being stolen, or statistics showing there are more food banks than McDonald’s. The ability to purchase food has almost become a luxury.
Ensuring that people are able to put food on the table is not an unreasonable expectation, it is a necessity. A necessity that the Westminster Tory government seems to have forgotten about.
The use of food banks should not be normal – and I strongly believe that we should always remind ourselves of this. It is not normal that people rely on the goodwill of others and charity to be able to meet the basic need of eating – but it has become normal, and it is a failing of the Westminster Tory government; a government that has sat by, making the political choice to take little to no action to remedy the problem it has created.
The problem is, however, that food banks were never intended to become a permanent solution to tackling hunger and poverty. Their rapid emergence comes from Tory reluctance to invest in a social security system that protects the most vulnerable in society.
Food banks have now become a lifeline for far too many households and, as such, we are experiencing an increasing trend whereby charities and local organisations are playing the role of the state.
I know this first-hand from working with organisations in my Airdrie and Shotts constituency such as Paul’s Parcels.
It is a lifeline charity for people across Shotts and the surrounding villages. Paul’s Parcels runs projects that remove the need for people to choose between paying bills or buying food. I recently volunteered at its community fridge and the team have just finished their “Meet, Heat and Eat” project, with the hard-working group delivering around 3000 meals to those struggling with the rising cost of food.
I’m also helping Airdrie Foodbank find premises – it is struggling with the cost of renting a facility to store supplies. Yes, you read that correctly – a charity that provides food for many of my constituents cannot afford to rent a space to store the supplies. The very charities that are propping up the broken system are themselves struggling with the cost of running the service that helps keep food on the tables of households. It is simply unsustainable.
Short-term measures like these are not viable solutions to solving the entrenched inequality that has been created by Tory austerity policies. We have witnessed consistent underfunding of the social security system, but if we are to create long-term change, the Westminster Tory government must urgently rethink its approach and attitude towards welfare.
The Scottish and Westminster governments take two different paths – and not tackling food poverty is a political choice from Westminster.
Within its limited powers, the SNP Scottish Government is mitigating against Tory austerity. In the last financial year, it allocated almost £3 billion through a range of measures which help alleviate the cost of living impact on households.
Maintaining the Scottish Welfare Fund, tripling the Fuel Insecurity Fund and uprating the Winter Heating Payment are just some of the measures being taken by the Scottish Government – but these measures are being taken with both hands tied behind Scotland’s back.
I am proud that in Scotland we have built our own welfare system that is constructed on the understanding of dignity, fairness and respect. The Westminster government must follow suit, changing the way it views social security.
Instead, the Chancellor Jeremy Hunt failed to reinstate the Universal Credit uplift, as well as scrapping the benefit cap and two-child limit. Our call as SNP MPs in Westminster remains clear – the Tories must use all the powers available to them to tackle the cost of living crisis.
The House of Commons Library found that the UK Government’s planned expenditure on Trident renewal for 2023/24 is £3bn.
This is just a small glimpse of a Tory government that has its priorities all wrong – one that is happy to fund nuclear weapons, rather than supporting households during the cost of living crisis.
As charities, food banks and businesses prop up a broken system, the Tories must take ownership of the system they have broken.
I want to live in a country where food banks do not exist – not because people should not have access to emergency food, but because we have built a social security system so strong that no-one slips through the net.
It has never been clearer that Scotland should have the full powers of independence – to build a stronger, more dignified, fairer and respectful social security system that sees foodbanks as a distant memory of a broken and unequal Union.
If you are aware of any office space that can house Airdrie Foodbank, please call me on 01236 793900 or email me: [email protected]
The payment for this article will be donated to Paul’s Parcels in Shotts. | United Kingdom Business & Economics |
The average American’s 401(k) balance plunged 4% in the latest fiscal quarter, attributed to an uptick in “hardship withdrawals” as consumers continued to get hammered by inflation, according to a new study.
Fidelity Investments found that the typical 401(k) fell from $112,400 in the second quarter to $107,700 in the latest three-month period ended Sept. 30 — a drop of nearly $5,000.
Individual Retirement Account (IRA) balances experienced a similar drop, falling to $109,600 from $113,800 in the same time period, according to Fidelity.
Fidelity reported that 2.3% of workers took out what the IRS considers a “hardship withdrawal” — for large, unexpected payments — up from 1.8% in the year-ago period.
These withdrawals are subject to income tax, plus a potential additional 10% tax if they’re made before age 59.5 or aren’t used for medical bills, school tuition or home repairs, among other immediate financial needs.
Eight in 10 respondents cited inflation as reason for their financial stress.
“The increasing use of hardship withdrawals and loans underscore the need to help retirement savers develop emergency savings, which Fidelity has found to be the No. 1 savings goal among employees, after retirement,” Fidelity wrote in its report.
The top reasons account holders took such withdrawals: to avoid eviction and to pay for medical costs, per Fidelity, which analyzed more than 45 million retirement accounts in a study earlier reported on by CNN.
Meanwhile, in-service withdrawals — for expenses that don’t fall under “hardships” and require tax and penalty payments — also rose in the third quarter to 3.2%, up from 2.7% in the year-ago period, Fidelity reported.
In another sign of sweeping financial stress, the percentage of account holders taking out loans against their 401(k) accounts also moved higher to 2.8%, up from 2.4% in 2022’s second quarter.
Outstanding loans on a retirement plan — which cap out at $50,000 or 50% of the account holder’s assets, whichever is less — also saw a subtle increase, from 17.2% in last year’s third quarter to 17.6% this year.
The latest figure is a whole percentage point higher than the all-time low percent of participants taking loans from their 401(k), 16.6%, which was achieved in early 2022.
Borrowers generally have to pay back loans taken out of retirement accounts within five years, with payments made at least on a quarterly basis.
Both 401(k)s and IRAs are retirement accounts, though the former is offered by employers while the latter is opened by an individual through a bank or broker.
No matter the retirement account, account holders aren’t intended to withdraw funds until age 59.5 — though Americans aren’t considered of retirement age until their 67th birthday.
According to Fidelity, 57% of American adults told the financial firm that they wouldn’t be able to afford a $1,000 emergency expense.
The increasingly difficult ability to stash funds away for a rainy day is underscored by the latest inflation figures, which remain uncomfortably above the Federal Reserve’s 2% target.
October’s Consumer Price Index climbed 3.2% from last year — a deceleration from the September’s 3.7% advance but a cold comfort to consumers who are still getting socked by stratospheric prices for just about everything.
Indeed, compared to October 2020, when the US was under a COVID-induced lockdown, prices are up a blistering 18.2%.
Meanwhile, President Joe Biden has been pushing his Bidenomics agenda that has consistently claimed to “reduce the [government’s] deficit” despite recently-released Treasury data showing the red ink has doubled over the past year, from about $1 trillion to $2 trillion (yes, with a “T”). | Personal Finance & Financial Education |
Sir Keir Starmer is set to warn that the UK will face "huge constraints" on public spending if his party win the next General Election.
On Monday, he will say anyone expecting an incoming Labour government "to quickly turn on the spending taps is going to be disappointed".
Growing the economy will be a battleground for both Labour and the Conservatives at the next election.
The Conservatives claim Labour's borrowing plan would raise taxes.
The cost of living in the UK has put the economy at the centre of political debate as inflation and high interest rates put pressure on household budgets.
The UK has not slipped into recession but there have been concerns over weak growth. Prime Minister Rishi Sunak has made economic growth one of his key pledges.
But the Bank of England's governor, Andrew Bailey, said last week that productivity rates in the UK "concern me a lot".
In a speech to economists and think-tanks later on Monday, Sir Keir will say economic growth "will have to become Labour's obsession if we are to turn around the economy".
But he will argue that decisions taken from the government and previous Conservative administrations over the past 13 years "will constrain what a future Labour government can do".
"The comparison between 2010 and today is instructive," the Labour leader will say.
"Now, debt and interest rates are much higher. Britain's standing is diminished. Growth is stagnant and public services are on their knees.
"Taxes are higher than at any time since the war, none of which was true in 2010. Never before has a British government asked its people to pay so much, for so little."
His comments will come after the Resolution Foundation claimed a "toxic combination of low growth and high inequality" had left the average household in the UK more than £8,000 worse off than those in countries such as France and Germany.
The think tank, which focuses on improving living standards for those on low to middle incomes, made a series of recommendations including increasing public services investment and improving transport systems and housing outside of London.
Last month, Labour was forced to deny claims it could further water down its flagship green prosperity plan, after a senior source had suggested to the BBC that the level of investment previously promised - of £28bn a year - might never be reached.
In June, shadow chancellor Rachel Reeves watered the pledge down. A senior source in the Labour leader's office said the decision was made because of the state of the public finances.
However, a Conservative spokesman said Labour's policy "presents a major risk" to the British economy at a time when the cost of borrowing is "so high".
Richard Holden, the Conservative party chairman, said: "The largest 'constraint' to growing the economy would be Labour's £28bn a year borrowing plan - which independent economists warn would see inflation, interest rates and people's taxes rise."
As well as focusing on growth, Sir Keir will outline his plans which include changing "restrictive planning laws and get Britain building again" and creating a "proper industrial strategy drawn up with business".
He will also declare Labour would secure "a new deal to make work pay with increased mental health support, fully-funded plan to cut NHS waiting lists, an end to zero hour contracts, no more fire and rehire, and a real living wage".
The government has announced it will increase the minimum wage by more than a pound to £11.44 next April, but the government's forecaster, the Office for Budget Responsibility (OBR), has said living standards are also not expected to return to pre-pandemic levels until 2027-28.
Sir Keir will say that the current parliament is "on track to be the first in modern history where living standards in this country have actually contracted".
Most recent official figures show the economy failed to grow between July and September, after a succession of interest rate rises that have increased borrowing costs.
Chancellor Jeremy Hunt announced several tax cuts in his autumn statement.
One policy move included making permanent a tax break which allows businesses to deduct the full cost of investing in machinery and equipment from their tax bill.
But the decisions will not prevent taxes staying at their highest level on record and economic growth is forecast to be sluggish.
Sir Keir will also say in his speech that "it's not the case that 'any growth' will do".
"No, we can't be agnostic about the sort of growth we pursue, anymore. The growth we need must better serve working people. And must raise living standards in every community," he will argue. | United Kingdom Business & Economics |
I’ve got some shitty ex-boyfriends, but none of them made me the CEO of their sin-eater hedge fund while refusing to give me equity and bragging about how there was a 5 percent chance they’d become the President of the United States, you know? Absolutely counting my blessings after Caroline Ellison’s first day on the stand. I wonder how many of the nine women on the jury are doing the same.
Ellison was the head of Alameda Research, the aforementioned hedge fund, during the implosion of it and FTX. She’s already pleaded guilty to criminal charges stemming from one of the worst romantic relationships I’ve ever heard of, and her testimony was widely anticipated before the trial. Today, that took the form of discussing a damning spreadsheet — one she prepared for her ex and boss Sam Bankman-Fried, now the defendant in a criminal fraud trial.
The day started off promisingly for the defense as it cross-examined Gary Wang, the chief technology officer of FTX and co-owner of both FTX and Alameda. Christian Everdell, one of Bankman-Fried’s defense attorneys, couldn’t undo the damage of last week’s code review. But he managed to shake the rust off long enough to make Wang sound less reliable, drowning the jury in confusing technicalities.
Last week Wang testified that Alameda got access to a special credit line and an option to take its balance into the negative without triggering liquidation — something he alleged other accounts at FTX didn’t get. Everdell tried to undermine this claim by talking about the spot margin program, which let users lend each other assets for margin trading. In those cases, it was possible to have a negative balance in a specific coin. It was not, however, possible for those accounts to avoid liquidation, as Wang testified Alameda could do — or to have an overall negative balance. But I’m betting the defense is hoping the jurors will throw up their hands in confusion thinking about this.
“We ultimately took about $14 billion, some of which we were not able to pay back.”
Wang didn’t exactly help himself out, either. Apparently, what Wang said in court contradicted something he’d said in earlier interviews with the government about market making. I say “apparently” because Everdell was probably giving him his previous testimony to refresh his recollection, but Wang was insisting he didn’t remember. In any event whatever Wang was shown wasn’t submitted as evidence or shown to the court. I got the gist, though, and I bet the jury did too — probably the strongest work the defense has done so far.
But by the end of the day, that all seemed like a sideshow. Bankman-Fried had been vibrating slightly during Wang’s testimony. During Ellison’s testimony, his bouncing became more noticeable.
Ellison was hunched in on herself as she walked into the courtroom, wearing a dusty rose dress with a gray blazer over it, looking less like an executive than like a girl who’s borrowed her boyfriend’s coat because she’s cold. When the prosecution asked her to identify Bankman-Fried, she had trouble finding him and gazed around the courtroom for more than 20 seconds — apparently he was incognito with his new haircut. After she did spot him, she was asked to identify him, which she did by identifying him as wearing a suit. This got chuckles from the rest of the defense table, also all in suits.
She listed off the crimes she’d already pleaded guilty to, and added that Bankman-Fried “directed me to commit these crimes,” Ellison said. (Fraud, conspiracy to commit fraud, and money laundering, in case you were wondering.) “We ultimately took about $14 billion, some of which we were not able to pay back.” She tilted her head down to answer the questions, then lifted her head when she’d finished her answer.
Bankman-Fried called this being “risk-neutral,” which seems like a fancy way of saying he was a gambling addict
In Ellison’s telling, Alameda was troubled from her earliest time there in 2018. “Shortly after I started, I learned the company was in worse shape than I realized,” Ellison said. Alameda had initially been funded with loans “from acquaintances,” she said, and those loans were recalled a few weeks after she arrived. (There was a staff revolt within Alameda Research, over lost millions and general financial chaos, according to Michael Lewis’s Going Infinite.) Ellison asked Bankman-Fried why he hadn’t shared the company’s shaky circumstances in the job offer. “He hadn’t known how to tell me,” she said.
Ellison was also, of course, in a more personal relationship with Bankman-Fried. (A juror who’d been asleep for a discussion of the FTT token woke up when she started discussing it.) The two started sleeping together in the fall of 2018, on and off. At the time, she was a trader and Bankman-Fried was the CEO. They didn’t date until later — twice. Their first relationship stretched from the summer of 2020 through the summer of 2021; they agreed to keep it secret. (Some people found out, as they usually do.) The second time, from the fall of 2021 until the spring of 2022, they lived together.
That gave Ellison an unusual view of his character. “He was very ambitious,” she said. Besides telling her about his presidential chances, he also told her that if there was a coin flip where tails destroyed the world and heads made the world twice as good, he’d flip the coin. He called this being “risk-neutral,” which seems like a fancy way of saying he was a gambling addict.
She was named co-CEO of Alameda with Sam Trabucco in 2021, while she and Bankman-Fried were broken up, and CEO in 2022. The goal, Bankman-Fried told her, was to “optically” separate Alameda Research and FTX. “The whole time we were dating, he was my boss at work,” she said. They broke up because she wanted more from the relationship; Bankman-Fried was distant and not paying enough attention to her.
Using the effectively unlimited funds “allowed us to make profitable trades we couldn’t have made otherwise.”
Bankman-Fried didn’t grant Ellison equity, even though she asked; he told her it would be too complicated. Instead, she got a $200,000 salary, even as CEO, and bonuses twice a year, which ranged from $100,000 to $20 million.
Initially, Alameda and FTX were “very integrated,” Ellison said. They were run by the same team, from the same office. And when Alameda was scrounging for funds, Bankman-Fried told Ellison that FTX would be a good source of capital. The $65 billion line of credit Alameda Research had meant that it did not have to post collateral. There was no contract, and no written terms, she testified. It also wasn’t visible to FTX’s auditors — she’d raised the question with Bankman-Fried and he told her not to worry about it.
Alameda’s credit line — which was taken in increments of $100,000 to $10 million at a time — was used for trading. Using the effectively unlimited funds “allowed us to make profitable trades we couldn’t have made otherwise,” Ellison testified.
Customer funds were also used when Bankman-Fried bought back FTX shares from Binance, an early investor, in the summer of 2021. Bankman-Fried told Ellison it was “really important,” otherwise “Binance would do things to mess with FTX.” Ellison says she told him Alameda didn’t have the money. So Bankman-Fried took $1 billion of FTX customer funds to buy out Binance, the first time Ellison recalled an amount that large. It was Bankman-Fried’s decision, she said, as he was the CEO of FTX.
FTT was one of several “Sam coins”
There was also the FTT token, which was created by Bankman-Fried and Wang. Alameda got its war chest — 60 percent to 70 percent of the initial supply — for free, while seed investors got FTT at 10 cents a coin, and FTT first listed at $1 a coin. Bankman-Fried felt that $1 per coin was psychologically important, Ellison said, and that he directed her to buy up FTT using Alameda if its price fell below a dollar.
FTT was one of several “Sam coins,” a nickname for tokens which Bankman-Fried was heavily involved in and owned a lot of, either personally or through Alameda. Those coins were almost certainly worth less than the value displayed on the balance sheet, because trying to sell them all at once would crater the prices. Bankman-Fried directed her to put those coins on the balance sheets Alameda showed to lenders, even though she felt it was “somewhat misleading.”
Alameda was also getting loans from outside lenders, such as Genesis, because when FTX started, there weren’t a lot of customer funds to borrow, Ellison testified. That was the basis of the worst of her testimony — and the spreadsheet from hell.
Ellison said she’d prepared the spreadsheet at Bankman-Fried’s request in the fall of 2021 and shared it with him. The point was risk analysis around paying back Alameda’s loans if they were abruptly recalled by Genesis, their lender. Bankman-Fried wanted to use $3 billion for venture investments, so Ellison was ballparking what that would do to Alameda’s risk. In the as-is scenario, if things went south, she figured there was a 30 percent chance they wouldn’t be able to meet the loan recalls. If Bankman-Fried used $3 billion to make investments, there was a 100 percent chance they couldn’t meet the recalls, even with FTX customer funds.
Echoing Bankman-Fried and Ellison’s romantic relationship, FTX was keeping cozy private ties with Alameda yet publicly holding it at arm’s length
The problem here wasn’t really the math, which seemed pretty arbitrary. It was that Ellison’s calculations assumed Alameda could borrow $1.8 billion in normal dollars and $1.5 billion in crypto from FTX. The spreadsheet makes this clear with a row labeled “FTX borrows,” which Ellison said were customer funds.
Meanwhile, echoing Bankman-Fried and Ellison’s romantic relationship, FTX was keeping cozy private ties with Alameda yet publicly holding it at arm’s length. On January 14, 2022, Bankman-Fried tweeted, “We’re launching a $2b venture fund: FTX Ventures!” Those funds came from Alameda, Ellison testified. But Bankman-Fried didn’t want to go public with the source of the funds. He said he thought Alameda’s brand was less good, and he didn’t want his name associated with it. Alameda also bought Robinhood shares for Bankman-Fried, who moved them to a vehicle called “Emergent Fidelity Technologies” to avoid association with Alameda.
The day ended with a document that had been shared between Ellison and Bankman-Fried — with his comments appearing in bubbles along the main text. Ellison wrote she was worried about “both actual leverage and presenting on our balance sheet.” Bankman-Fried responded with a note: “Yup, and could also get worse.”
Things did, indeed, get worse. | Banking & Finance |
TK Maxx and Homesense are closing stores in another blow to the High Street - is your local branch affected?
- Stores in Edinburgh and Manchester are due to close in the next few weeks
- Read more: The changing face of the High Street - as fake shop fronts used
TK Maxx and Homesense will be closing stores across the country in yet another blow for the struggling UK high street.
Edinburgh's TK Maxx will open its doors to customers for the final time on February 15 as the landlord pulls the lease.
Homesense - a subsidiary of TK Maxx which sells homeware - will see shops in Manchester and Swansea close.
The closures come amid more trouble for the UK high street as the economy narrowly avoids recession.
TK Maxx has 352 stores in the UK and hundreds more operating throughout Europe and owns 77 Homesense stores across the country.
The Ediburgh TK Maxx will see its doors close to customers on February 15 as the landlord has not renewed the lease
Shoppers in Swansea will have to travel to a new Llanelli store for their homeware after the Parc Fforestfach shop closes at the end of March
The Manchester Arndale branch will close on March 1. Workers have been offered new positions at nearby stores
Scottish shoppers will have until Wednesday to search the shelves in the Edinburgh TK Maxx before it closes its doors for good.
A spokesperson told Edinburgh Live that the staff at the shop were hoping to get jobs at other nearby stores.
The spokesperson for TK Maxx said: 'Our senior managers have been in store supporting the team. We're currently in consultation with all affected associates and our intention is that all associates will be offered roles in other local TK Maxx or Homesense stores.'
The Homesense Manchester Arndale shop will remain open until March 1, when its lease is also due to end.
The Swansea site, located at Parc FForestfach, will close by the end of March.
A spokesperson for Homesense told the Manchester Evening News that all Manchester-based staff will be offered roles in nearby TK Maxx and Homesense stores.
Which TK Maxx and Homesense shops are closing?
Edinburgh TK Maxx - February 15
Manchester Arndale Homesense - March 1
Swansea Homesense - end of March
New stores will be opened in Llanelli and a new logistics centre is planned for Crewe to keep up with online demand.
But Manchester shoppers can breathe a sigh of relief as there are Homesense stores in Altrincham and Trafford, which will remain open.
The Welsh branch of the homeware shop will be relocated to the Trostre Retail Park.
The company confirmed that everyone currently working there will be offered positions at the new Llanelli shop.
A new TK Maxx will also be opening in Llanelli.
Deborah Dolce, group director, TJX Europe told the Mirror: 'We are proud of our continued investment in communities across the country through new store openings, store modernisations and relocations.
'Last year we opened two new stores – a TK Maxx in Bromborough and a Homesense in Altrincham.
'This year, we're opening another three new TK Maxx stores and a new Homesense store in Stevenage.
The clothing company is also opening a new logistics centre in Crewe to keep up with online demand.
Ms Dolce added that the company was looking forward to opening the new stores and offering more retail careers to the communities. | United Kingdom Business & Economics |
The discovery of the dead body of a newborn baby abandoned behind a school in the Namibian capital, Windhoek, last November shows that a change in the law was not enough to solve the problem.
In 2019, Namibia passed legislation saying that women who, out of desperation, took the drastic step of abandoning their child, would no longer be prosecuted.
Safe places where an infant could be left were established, but there is still not enough awareness of the legal changes.
Two years ago, Linda, which is not her real name, used one of these places to leave her child.
Linda cries when she talks about the baby she had to give up.
"It was not an easy decision, as a mother, to carry a baby for nine months and give it away. But I still did it because of the situation I was in," Linda says in a low voice. She is talking about being unable to afford another child.
Linda shares a tiny house with her other children and her boyfriend in an informal settlement near the coastal town of Swakopmund.
She sometimes finds it difficult to afford a meal, and says her four children understand that if "mum has nothing today, we will not eat today".
She adds: "But for the fifth born, if there is no meal, he would not understand anything. So I just thought: 'I have to give this baby away, to someone who would take better care of him.'"
Linda is remorseful but believes she did the best for her baby at the time.
"I do miss him, I miss my baby because I breastfed him for three days, but I know he's okay, he's with the right people."
'Dearest mommy'
The reason she knows he is being looked after is that she left him in what is called a baby-saver box - a drawer built into a wall of a compound in Swakopmund that has a mattress and a blanket inside. There is also a letter.
"Dearest mommy⦠please know that we do not judge you," reads the reassuring note.
"We cannot begin to understand the circumstances that have brought you [here]," it adds.
The message is from the Ruach Elohim Foundation, which was set up in Swakopmund by Ronel Peters and her husband Dick to create a haven for babies.
"We received this little one, only yesterday," Mrs Peters says, cradling a tiny boy.
"He's four days old. Unfortunately we were very busy, we haven't even named him yet."
The baby-saver box is her foundation's initiative and there are similar projects elsewhere in the world.
The box, the first and only in Namibia, is one way that mothers can bring babies, usually newborns, and leave them anonymously in a safe place to be found and cared for.
It was already in existence before the law changed but Mrs Peters is hoping to set up more, elsewhere in the country.
Any time a baby is left in the box, Mrs Peters and her team of seven receive a notification on their phones and someone then goes to collect the infant.
The mother has 30 days to claim her baby back if she changes her mind.
"If the 30 days elapse and she doesn't come back, then obviously we assume she is happy with the decision she made, and⦠this baby can be registered as an adoptive baby in Namibia," Mrs Peters explains.
Inside the home, there is a board on the wall with photos of the babies and the dates they each came in. Nikolai, Miracle, Gabriel and Joshua are just a few that make up the display.
The baby-saver box is just one way that children arrive and, since it was established just over four years ago, 10 babies have been left there.
But despite the change in the law, babies continue to be abandoned in unsafe places.
According to police statistics, between 2018 and 2022 close to 140 babies were abandoned nationwide - far more than those left in safe places, and a high number given the country's small population of just 2.5 million.
Mrs Peters wishes more people were aware of the baby-saver box.
"Mothers must be educated that they are allowed to leave their babies, unharmed, at a safe place, and anonymously, if they wish to do so.
"Every time I hear of another baby that was dumped, I feel very guilty, it feels that it's my fault, because I didn't do enough awareness."
'I pray he will forgive me'
Poverty, such as in the case of Linda, is one reason why mothers feel they are not able to look after a child. But other babies have been abandoned because their mothers felt they were too young, or they were the result of a rape, or that fathers have walked away from the family, says Donata Tshivoro, a leading social worker at the gender ministry.
The move to decriminalise baby abandonment in 2019 was made to encourage mothers to leave their babies in safe places, such as a hospital or police station - or in a baby-saver box.
The child must show no sign of abuse, neglect, or malnutrition. Once the baby is handed in, the child is given to a social worker.
Mercia Chingwaramusee, a social worker who works on this issue, acknowledges that despite the change in the law, there is a stigma and "the fear of people knowing that you went to drop your child there".
Nevertheless, she adds that a mother making the decision to give up her child as she is unable to keep them is actually giving that baby "an opportunity to live".
The authorities acknowledge that more still needs to be done to make people aware of the safe way to leave a baby to prevent further deaths.
"We do talk on radios, in different vernacular languages, we do go to schools, and we do community meetings, the social workers also go to the head men at the village," Ms Tshivoro says.
While there are now safe ways to give up a child, troubling feelings for people like Linda never go away.
"I just pray to God that one day he will forgive me," she says, "or maybe come to me one day." | Africa Business & Economics |
Families on housing benefit are being driven to live in areas of high crime and low employment because only one in 20 private rented homes are now affordable – the lowest level on record, new analysis reveals.
A freeze on housing benefit rates since April 2020 and waves of rent hikes have pushed the number of homes on the market that can be paid for through welfare down from 23% in April 2020 to 5%, according to the Institute for Fiscal Studies. Around 2 million households in England and Wales receive housing benefit.
Dave Lockyer, who is disabled with a 16-year-old son, told the Guardian it recently took him six months to find a flat in Woking that was within his welfare budget. The process was “insane”, he said, and left him facing homelessness or being moved to emergency accommodation in Essex, hours from his son’s school.
The problem represents a new front in an increasingly urgent housing crisis that is already seeing mortgage holders facing a huge financial squeeze from soaring interest rates and private landlords threatening to sell up. Meanwhile, social housebuilding remains modest; just one in five of all new homes are built by housing associations or councils. On Tuesday, the latest annual rough sleeping figures for London are set to be published amid fears that the problem is again getting worse.
The freeze in housing benefits also means renters are being forced into homes that are less well-insulated. The IFS found that affordable properties had heating and hot water costs that were 19% higher.
Polly Neate, chief executive of Shelter, the housing charity, said: “We have families coming to us who are forced to put up with disrepair like mould and damp because they can’t move anywhere else that’s covered by housing benefit. We’re also regularly hearing from people who have been given an eviction notice and are facing the real threat of becoming homeless because they can’t find anywhere they can afford locally as rents are skyrocketing.”
Rents on new lettings advertised on Zoopla increased by 10% or more every month from February 2022 to January 2023, and new-let rents are up by a fifth since September 2019.
“It’s crucial that the government unfreezes local housing allowance and ensures it reflects market rents so that families aren’t forced to choose between homes that are unsafe or homes they can afford,” said Darren Baxter, policy adviser at the Joseph Rowntree Foundation, which funded the IFS study.
Lockyer, 51, said he searched almost every day for almost six months for places within his monthly housing allowance of £1,096 in Woking for a two-bedroom flat.
“You get zero results, then one result, but it’s out in the middle of nowhere with no public transport. You occasionally get one or two come up, but then you get the other barriers – you’re on benefits so they want six months’ rent in advance or a guarantor.”
He eventually found a place with only hours to go before he would have been made homeless. “We would have been God knows where in emergency housing, which they said might be Southend, it might be Buckinghamshire,” he said.
He called for ministers to introduce rent controls and said: “If you put the local housing allowance up and don’t do anything else, the landlords will just put rents up to match.”
A government spokesperson said: “We’re helping ease the pressure of rising rents by maintaining 2020’s £1bn boost to Local Housing Allowance rates, giving more than a million people an extra £600 a year on average.”
Local Housing Allowance rates were increased in 2020, but ever since they have been frozen, during which time rents have kept rising.
“We are set to spend over £30bn on housing support this year, on top of significant cost of living support worth an average £3,300 per household,” the spokesperson added. “Building more affordable homes is key, which is why we’re investing £11.5bn to deliver more social and affordable rented homes across the country.” | Real Estate & Housing |
Welcome back to The Interchange! If you want this in your inbox, sign up here. We’re back after a brief hiatus, with lots of fintech news, including Robinhood’s latest acquisition, Plaid’s newest product and a ChatGPT-powered AI tool that aims to help you save money on bills.
Robinhood’s motives
When Robinhood announced on June 22 that it was acquiring credit card startup X1 for $95 million, it caused all sorts of chatter in the fintech world.
Why would Robinhood want to buy a credit card startup? Did it get a good deal, considering that X1 has raised only $62 million over its lifetime? Did its investors get a good deal or just a return on their investment? Why X1 in particular over the many other credit card startups out there?
Let’s talk about that last point first.
When we talked to X1 in December at the time of its last fundraise, founder and CEO Deepak Rao told us the company was launching a new trading platform that would give its cardholders the ability to buy stocks by using earned reward points. He even singled out Robinhood as a company he was hoping to compete with, telling TechCrunch: “By using credit card points to buy stock instead of cash or their savings, we feel this is a safe way for many consumers to start investing. There is no real downside as their investing is technically free.”
Aha.
Could that be what drew Robinhood to X1??
On this week’s Equity podcast, we chatted about that possibility, with co-host Alex Wilhelm noting that one would have to earn a lot of rewards before being able to buy many stocks. He also pointed out that Robinhood perhaps had some money to burn, as well as the company declaring that it was looking for something new as a way of “broadening [its] product offerings” and “deepening” its relationship with existing customers.
If you’ve been following Robinhood’s performance over the past year, a desire to diversify its business is probably not a surprise. We noted that not only has Robinhood’s crypto trading slowed, but also the company has seen significant user attrition. So an X1 acquisition gets Robinhood into the credit card space and an additional revenue stream.
Still, one observer noted that while X1’s basic premise of offering credit based on income rather than credit score was innovative, since it first formed in 2020 it has not really since delivered anything — other than the new stock feature — that stands out in the market.
Fintech analyst Alex Johnson shared a similar sentiment, tweeting: “The brand alignment is strong. Both companies have a certain unearned machismo about them. Other than that though, I don’t get this for Robinhood. X1 doesn’t have a lot of customers (did it ever even fully launch?) and none of its features are revolutionary.”
It is true that X1 may not have had a lot of customers, especially in comparison to a giant like Robinhood, but the company claimed to be on a growth trajectory, with Rao telling us last December that the company saw $3 million a month in revenue last October, giving it an annual revenue rate of $36 million.
Not everyone is down on the deal, though. Better Tomorrow Ventures’ Sheel Mohnot tweeted that while X1 may not have a lot of customers, Robinhood does. He added: “[T]his seems like a good acquisition to me, cheaper to cross-sell than to sell to new customers.”
— Mary Ann and Christine
Weekly News
Fintech startup Plaid got its start as a company that connects consumer bank accounts to financial applications but has since been gradually expanding its offerings to offer more of a full-stack onboarding experience. And on June 22, Plaid announced even more new product releases that moved the company into a whole new direction while also helping to diversify its revenue streams. At the top of that lies Beacon, which it is describing as a “collaborative anti-fraud network enabling financial institutions and fintech companies to share critical fraud intelligence via API across Plaid.” More here.
Navan (formerly TripActions) offers both a corporate card and a subscription to its software. In a twist, the company announced on June 12 the launch of a new product called Navan Connect, which it describes as a patented card-link technology that gives businesses a way to offer automated expense management and reconciliation without having to change their corporate card provider. For the initial launch, Navan has partnered with Mastercard and Visa, with plans to announce additional network tie-ups in the near future. More here.
Spend management startup Brex was named to Time’s 100 Most Influential Companies list. As it made the recognition, Time wrote: “Co-CEO Henrique Dubugras says think of Brex as a ‘spend platform.’ The company launched its corporate charge card for startups five years ago, and has since grown into a fintech conqueror. Valued at $12.3 billion in 2022, it has made 10 acquisitions, and after Silicon Valley Bank’s collapse, it received $2 billion in deposits and opened 4,000 new accounts. Last year Brex launched Empower, software that links Brex cards and accounts to a custom expense-management service. The company services startups, helping new businesses get off the ground, as well as enterprise clients, including DoorDash, Indeed, Coinbase, SeatGeek, and Lemonade.”
Brubank, an Argentina-based digital bank founded by former Citibank executive Juan Bruchou, shared with TechCrunch that since launching in 2019, it has brought in nearly 3 million clients, making Brubank “the largest Spanish-speaking digital bank in Latin America, with a 50% activity rate,” according to the company. It also has been sustaining bottom line profitability for the past 12 months.
At least two companies are poised for a credit card launch this summer: Snowfoll, one of three startups that pitched at TC Early Stage Boston in April, will launch a credit card in July that is tailored to users in the U.S. and India so they can more easily transmit cash cross-border. The company said users in the U.S. are eligible for limits as high as $30,000, and the card reduces the need for having separate bank accounts in the U.S. and India. In addition, the process is instant and cost-free. Meanwhile, Step, the financial platform tailored to teens, their families and young adults, opened up a waitlist for its latest card, Step Black Card. Cardholders will be eligible for perks, including earning 5% on savings balances up to $1 million and up to 8x the points on purchases. Read TechCrunch coverage on Step here and here.
Other headlines
Funding 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 |
It's no secret that Vanguard, Fidelity and Charles Schwab are three of the most popular and well-known brokerage firms. These financial institutions are also some of the largest, offering a wide range of products and services, from banking and investment products to financial advisors and financial planning services. However, there are some important differences, from fees to financial services to research resources, each of which could impact your customer experience. If you want help investing, use SmartAsset's free financial advisor matching tool.
Overview of Vanguard vs. Fidelity vs. Schwab
Vanguard, Fidelity and Schwab are three of the biggest players in the brokerage space, offering a wide range of investment and banking products. In fact, you can open just about any type of account any of these institutions. But they stack up slightly differently when it comes to fees and their specific suite of services.
Vanguard made a name for itself by creating and offering low-fee investment products such as mutual funds and exchange-traded funds (ETFs). It still does this, and even non-Vanguard clients can buy Vanguard funds via a brokerage account. The firm has grown to now offer non-proprietary investment products and funds. However, it's not as great of a product when it comes to trading individual equities.
Fidelity is perhaps best known for its personal investment products, namely brokerage accounts that allow users to trade stocks. Clients can invest in a wide range of stocks, bonds and other investment products using a Fidelity brokerage account. Fidelity also makes an effort to provide investment resources to its clients and doesn't charge much in the way of fees, though more and more brokerages and broker-dealers are moving towards fee-free investment models.
Charles Schwab, known as Schwab for short, is probably the most holistic of the three. While not as well known for its funds than Vanguard, Schwab still has a number of passively and actively managed funds that you can invest your money into. You also have the option to trade individual equities. It also offers free robo-advisor services, and those who want to work with a real advisor will have that option as well.
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Vanguard vs. Fidelity vs. Schwab: Fees
Most brokerage platforms have gotten rid of transaction fees over the past couple years, and Vanguard, Fidelity and Schwab are no exception. Brokerage account holders at each of the three institutions won't have to pay any commissions or trading fees for trading stocks. Trading mutual funds is mostly free at all three institutions, particularly for in-house mutual funds. Certain non-proprietary mutual funds may incur transaction costs of up to $49.95 at each institution.
The one place where you'll incur consistent transaction costs is when it comes to options trading. However, transaction costs for options at each institution are comparably quite low. Both Fidelity and Schwab charge $0.65 per option, while Vanguard charges $1. Keep in mind that these are contract fees, not commissions.
While some, more specific transactions may incur additional fees, the experience using each of these three institutions is quite low cost and can be entirely free if you only invest in individual equities and in-house funds, among other investments. Other investments may cost you. For example, you'll need to pay $35 per transaction if investing in mortgage-backed securities with Vanguard.
It's worth noting that these fee schedules don't include the charges you'll incur for owning shares of certain funds. Fidelity has a wide variety of funds that have no expense ratio, and both Vanguard and Schwab have average expense ratios that are a lot lower than the industry standard.
Vanguard vs. Fidelity vs. Schwab: Services and Features
When it comes to investments and brokerage accounts, Vanguard, Fidelity and Schwab each offer a relatively similar suite of services. As mentioned before, each institution allows clients to trade individual equities fee-free. Each offers a wide range of accounts as well, including 401(k)s, 529 plans, custodial accounts, a variety of individual retirement accounts (IRAs), joint accounts and more.
Each of the three institutions have $0 investment minimums for most accounts. However, Vanguard does have minimums for investing in some of its mutual funds, typically ranging from $1,000 to $3,000. However, certain funds have even higher minimums.
As noted before, Vanguard is lately known for its fund offerings, allowing investors to passively manage their money instead of constantly monitoring a portfolio of individual stocks. While you have the option to trade similarly to how you would with any other brokerage account, Vanguard's service are particularly geared towards those who want to invest in mutual, exchange-traded and index funds.
Fidelity stands out with two of it's offerings. First, it's much easier to trade with no fee and minimums with Fidelity. You'll of course have access to commission and fee-free trading, but you'll also have access to loads of fee-free funds from which to choose. This makes passive investing even simpler. On top of that, Fidelity offers one-of-a-kind investment education resources for clients to use, free of charge.
While Fidelity and Vanguard both have their own versions of a robo-advisor service, Schwab's stands out a bit above the rest. Schwab Intelligent Portfolios takes into account your preferences by having you take a short quiz, and then invests your assets in low-cost funds based on your answers. This service is optional, so even if you don't decide to use it, you'll still have access to Schwab's range of brokerage services. Like Fidelity, Schwab has a solid suite of financial and investment resources.
Fidelity's robo-advisor service is called Fidelity Go. It provides a relatively light advisor service and carries no minimum balance requirement. If you have between $10,000 and $50,000 in your account, you'll pay a $3 monthly fee. Accounts with more than $50,000 are charged an annual fee of 0.35% of assets under management.
Vanguard also has a robo-advisor service called Vanguard Personal Advisor Services. This service blends both automated and personalized investment services and charges a 0.3% management fee. It also has a minimum of $50,000, so you may be better off working with a financial advisor.
Vanguard vs. Fidelity vs. Schwab: Online and Mobile Experience
Vanguard, Fidelity and Schwab each offer both mobile experiences and desktop versions. You can even contact the companies directly online or over the phone.
Each company has solid functionality when you visit the desktop website, and you might even say that this is how they're designed to be used. From the desktop website of each platform, you can buy and sell equities, funds and more. You can also access any robo-advisor services, transfer money, utilize educational resources and more.
The mobile apps of each of these institutions vary in popularity and usability. Schwab sits somewhere between Fidelity and Vanguard when it comes to how valuable its mobile apps are. While the Schwab app has a 4.8 star rating on the Apple store and a 3.5 star rating on the Google Play store, a common criticism is that Schwab overwhelms customers with information. This could be a positive for more seasoned traders, but new investors may feel overwhelmed. In either case, you'll still be able to use all the platform's services both on your phone and at your computer.
The Vanguard app isn't nearly as highly rated. On the Google Play store it has just a 1.6 star rating. In fact, the company seems to have gotten so much flack about its mobile offering that it's releasing a new version of the app that promises to have additional features. That said, the Apple version of the app has a 4.7 star rating.
Fidelity seems to have the best overall online and mobile experience for customers. While it has a similar reputation as Schwab of being a little hard to synthesize for newer investors, it still seems to be easier to navigate. Plus, with the company's suite of education resources, new investors should have no problem figuring out how to best use the platform to invest their money. On the Apple store, the Fidelity app has a 4.8 star rating, and on the Google Play store it has a 4.5 star rating.
Who Should Use Vanguard, Fidelity and Schwab?
As we've mentioned throughout this review, Vanguard, Fidelity and Schwab boast many of the same important features. Each allows you to invest in a variety of securities, from equities to funds, without paying fees and commissions. Each has low to non-existent expense ratios for funds. And each is a capable online trading and account management platform that you can take advantage of. However, there's potentially a bit of learning about the platforms first. That said, each stands out for a different reason.
Vanguard stands out because of its impressive suite of exchange-traded, index and mutual fund offerings. Some of these have high minimums, but it makes the platform excellent for anyone with some money to invest. You can also trade individual stocks and bonds with Vanguard, but you'll usually be better off taking advantage of the fund offerings that the company has curated to make a name for itself.
Fidelity stands out slightly above its two competitors, largely because there isn't much that the company doesn't do. The company boasts a robust trading platform that can be taken advantage of by experienced investors and beginners alike. You can use Fidelity's comprehensive suite of investment tools and educational resources to fine tune your investment abilities.
Schwab holds up quite well against the competition too, especially when it comes to its robo-advisor service. You can take advantage of it or you can invest on your own. Even those that choose the latter shouldn't have too hard a time taking advantage of Schwab's wide variety of offerings. However, the firm's platform tends to focus on investors with more experience.
Bottom Line
Vanguard, Fidelity and Schwab are three of the most robust, well-known and popular brokerage firms in the country. They each cover the basics and much more. This makes them valuable and useful platforms for all investors, from beginners to advanced traders.
While each platform may differ at the margins when it comes to their offers and specialties, each allows clients to trade without fees and commissions and to do so both online and on their mobile devices. Vanguard, Fidelity and Schwab are three solid options for anyone looking to take their money and invest in for the future in the way they see fit.
Investing Tips
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If you decide to invest on your own, it pays to know what you're doing. SmartAsset has you covered there as well. For example, check out our free investment calculator. | Banking & Finance |
Advocates are calling for insulation to be regulated in all Australian rental properties as research shows some people swelter through temperatures above 30C in their homes for extended periods in summer.Many of the hottest homes are those of people living in social housing, with some residents forced to go into debt to buy air conditioners, or hose down their houses to stay cool.The tenant advocacy organisation Better Renting is tracking temperatures in 75 rentals across Australia to see how far they exceeded the recommended safe limit of 25C for more than nine hours a day.Joel Dignam, Better Renting’s executive director, said renters were recording temperatures of up to 70C in their roofs, with the heat travelling down and keeping the rooms above 30C for long periods of time.One participant reported their Melbourne home reached 67C in the roof on Boxing Day, when the temperature outside was 31C.“In winter insulation plays a big difference in keeping the warmth inside the home,” Dignam said. “In summer it provides benefit in the opposite direction.“With the hot weather, it makes a difference to protect you from the heat from above.”An infrared image of Claire Phelan’s roof taken on a 31C day. The yellow and orange areas show where there is no ceiling insulation. Photograph: Claire PhelanHe said some of the monitored homes were fitted with air conditioning, but because of the heat coming from the roof it did little to combat the temperature.“Having insulation in a home is like having glass in the window pains, like having a flushing toilet,” Dignam said. “It should be seen as an absolute basic. Leaving it out is not making an adequate home to rent.” Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup Perth renter Claire Phelan is taking part in the research. She is in social housing with her partner, and while they have insulation in the roof, part of it has been removed.“Since I moved in, I’ve been complaining about the difficulties I’ve had regulating the temperature inside the house,” she said.“In summer all I can do is drip sweat and sit in front of a fan or portable air conditioner in my underwear.”Claire Phelan says subsidised housing residents should not ‘subsidise our dignity’. Photograph: Claire PhelanAn infrared image taken on a 31C day shows the part of the roof without insulation heating up to more than 36C.Phelan said last summer her digital thermometer recorded indoor temperatures of up to 43C. At one point she and her partner had to go on a payment plan to afford their energy bill.“During heatwaves, I spray down the bricks so they can cool,” Phelan said.“Just because we are poor and living in subsidised housing, doesn’t mean we should subsidise our dignity.”Wongi woman Janine Tremlett lives in the Kimberley in Western Australia’s north, one of the hottest places in the country. For at least 207 days a year, parts of the Kimberley hit 35C – the temperature at which heat becomes dangerous to humans.During a recent heatwave, with outside temperatures above 40C, there was only one livable room in Tremlett’s house, where she lives with her son.“You have to have the aircon on all day,” Tremlett said. “You can’t even walk outside or do anything. You can’t go to the shops, anywhere, it’s just so hot.”Tremlett initially bought a cheap fan but it broke down, so she spent months saving up for an air conditioner that cost her more than $1,000.“You need a strong aircon that can make it cool,” she said. “Living in the desert, it’s hot, very hot.”Tremlett said in her community a lot of people couldn’t afford air conditioning, so they slept outside, kept their clothes wet or hosed down the tops of their homes to keep cool.A Melbourne renter with no insulation recorded 67C in their roof during the Better Renting study. Photograph: Better RentingGrace Dudley, an advocate at Kimberley Community Legal Services, said air conditioners are not provided in social houses across WA under current policy, although homes for government employees have air conditioning and an energy subsidy to cover their bills.“Tenants are unable to control the temperature inside due to the poor quality of the housing, outstanding maintenance issues and high rates of overcrowding, which is really prevalent in Kimberley,” Dudley said.Almost half of the renters in the Kimberley are in social housing, and Dudley said with climate change the issue will just get worse.“In 10 or 20 years the days over 40 or 45 will increase. It will become unliveable and could have dire consequences,” she said.Union calls for homes to be assessed before being rentedLeo Patterson Ross, chief executive of the Tenants’ Union, said most states have loose rules around air conditioning and insulation, despite many renters suffering now the hot weather has arrived.“In every state and territory there’s a broad statement that rentals have to be fit for habitation, but that’s not enough to give tenants the certainty,” he said.“If you went to see a place that didn’t have a door or a roof, everyone would accept that that is not up to scratch.”Patterson Ross said an independent third party should have to assess each house before it’s put on the market.“A lot of this problem is that the standards of housing are built into the tenancy contracts but it’s to each tenant to enforce,” he said.“What needs to change is that an independent third party comes in and ensures the properties are up to the standards.”The ACT is leading the country in terms of insulation requirements: from April this year, private rentals and public housing properties will begin having to be fitted with high-standard ceiling insulation. | Australia Business & Economics |
Nov. 8 (UPI) -- Ivanka Trump will take the stand Wednesday in the penalty phase of the $250 million civil fraud trial against her father Donald Trump after he was found liable for inflating the value of his real estate properties in New York.
The former president's eldest daughter will answer questions from state prosecutors after several years of trying to disassociate herself from the family business before a ruling in September found the Trump Organization consistently lied about the value of its holdings, which defrauded banks and insurers throughout the state for years.
Ivanka once served as the executive vice president of the Trump Organization before she became a senior White House adviser after Trump won the 2016 election, forcing her to step away from her role in the family business.
Since her father left office in 2021, she has neither sought public office nor taken part in his 2024 campaign.
Previously, she sat for a deposition in August 2022 when she denied any involvement in the family's bookkeeping and said she wasn't privy to financial documents that fraudulently reported the company's value.
"I have my own. I've never prepared one. I don't know. I never made one. I'm not an accountant," Ivanka Trump said at the time.
New York Attorney General Letitia James, who brought the multimillion-dollar civil case against Trump, initially named Ivanka Trump as a co-defendant, claiming she was involved in leveraging her father's financial statements, but an appeals court dismissed her from the case in June, citing the statute of limitations.
Ivanka Trump filed an appeal to avoid her upcoming testimony, claiming she lacked any pertinent information regarding the alleged misconduct, but in court documents, James asserted that Ivanka Trump "indisputably has personal knowledge of facts relevant to the claims."
In his ruling nearly two weeks ago, Judge Arthur Engoron ordered Ivanka Trump to testify, saying the state presented sufficient evidence to prove that she has business interests in New York and should testify.
An appeals court also rejected Ivanka Trump's request for an emergency stay, which argued that her testimony "in the middle of a school week" would be overly burdensome to the mother of three.
Now forced to appear, Ivanka Trump will face direct questions under oath about what she did or didn't know about the extensive paper trail of fraud inside the Trump Organization.
Ivanka's name has come up several times in connection with the trial, with James alleging she played a pivotal role as an intermediary between Deutsche Bank and the Trump organization in securing loans that were contingent on her father's bogus financial statements.
The valuation of her own New York apartment has come into question as part of the case after it was priced at two and a half times the rate she paid for the property, court papers say.
Three New York business entities linked to Ivanka Trump were sent subpoenas after evidence emerged that the Trump Organization was covering all of her expenses, including household staffing, credit cards, taxes and New York housing -- highlighting the depth of her ongoing involvement with the family business.
"Ms. Trump, even after her formal resignation, has remained intertwined with the Trump Organization and we believe that she is still amenable to service through that enterprise," Assistant Attorney General Sherief Gaber wrote in a Sept. 26 email.
Meanwhile, Trump's sons, Eric Trump and Donald Trump Jr., testified in the trial last week as the defense sought to shirk responsibility onto accountants who were involved in preparing financial statements for the Trump Organization.
Trump Jr. testified he approved his father's financial statements but emphasized that other executives in the company were responsible for keeping track of the books.
Eric Trump testified he had no knowledge of his father's financial statements, and before explaining his role.
"I understood we had financials as a company. I was not personally aware of the statement of financial condition," Eric Trump said. "I did not work on the statement of financial condition. I've been very clear about that."
Testifying in his own defense on Monday, former President Trump became combative with the judge on the stand, while asserting that he was aware his properties could have been overvalued, but argued that it was a result of the high worth associated with his brand name.
All the testimony is being used to determine the amount of damages the former president will pay after Engoron issued a summary ruling on Sept. 26 that found Trump inflated the value of his New York real estate, including his hotels and golf clubs.
Previously, James said her office was using the civil trial to pinpoint the individuals inside the Trump Organization most responsible for cooking the books and was seeking at least $250 million for fraud that she asserts inflated Donald Trump's wealth by $2.2 billion.
Trump continues to deny he did anything wrong, while claiming the civil trial was an attempt to interfere with his 2024 campaign.
"This is a case that should have never been brought and it's a case that should be immediately dismissed," Trump said after emerging from his courtroom testimony on Monday. | Real Estate & Housing |
Labour's bonfire of private schools' tax breaks would raise £1.5billion, economists found.
The Institute for Fiscal Studies debunked Tory claims the move would lead to an exodus of pupils into the state system.
Keir Starmer has pledged to axe tax perks enjoyed by fee-paying schools and use the cash to improve normal schools instead.
But Rishi Sunak and his Cabinet, crammed full of privately-educated Tories, have rejected the idea.
Private schools including Eton College currently do not have to charge VAT on fees. In England and Wales, they also get at least 80% relief on business rates.
The Institute for Fiscal Studies found removing these tax breaks would push 3%-7% of private pupils back into the state school sector. But even taking into account extra annual spending of £100million-£300m for this influx of 20,000 to 40,000 pupils, the public purse would still be £1.3bn-£1.5bn better off per year, the IFS said.
In a speech last week, Mr Starmer said money raised from removing tax breaks on private schools would be used to give primary schools cash for "world-class early language innovation". The party has previously said the funds raised from ending tax breaks for private schools would also be used to help recruit more than 6,500 new teachers into the state sector.
Luke Sibieta, IFS research fellow and author of the report, said: "Labour's proposals to remove tax exemptions are likely to raise an extra £1.3billion to £1.5billion after allowing for exemptions, deductions and extra school spending to cater for any pupils moving to the state sector. The evidence suggests higher fees are likely to have a weak effect on demand.
"As it is, we expect that the change in private school attendance levels will be small. This leads to surer increases in tax revenues and less need for additional public spending on state schools.”
Bridget Phillipson, Labour's shadow education secretary, said: "This analysis reinforces the fact that all of Labour's policies are fully-costed and fully-funded, because we take fiscal responsibility seriously. The Conservatives have crashed the economy and have no plan for growth which will mean we face tough choices in government.
"Labour will fund our fully-costed plans to drive high and rising standards in our state schools by ending private schools' unjustifiable tax breaks." | United Kingdom Business & Economics |
- Health savings accounts carry a three-pronged tax advantage.
- To keep those tax breaks intact, consumers must use their HSAs for qualified health expenses.
- Health insurance premiums generally don't count.
- There are some exceptions: People who are on Medicare, receiving unemployment benefits, paying for long-term care insurance or getting COBRA coverage can pay premiums with HSA funds.
Health savings accounts have powerful tax benefits that make them an efficient way to save for future medical costs.
But to harness their full potential, HSA funds must be used for qualified medical expenses.
There's a long list of qualifying costs — from artificial limbs to birth control pills, lead-based paint removal and fees to attend medical conferences. (Approved costs are those that generally qualify for the medical and dental expenses tax deduction, the IRS said.)
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Insurance premiums — one of consumers' main ongoing health-related costs — generally don't qualify. However, there are four exceptions to this rule, according to the IRS. They are outlined below.
HSAs carry a triple tax advantage: Account contributions are tax-free, as are investment earnings and withdrawals if used for qualified expenses.
Consumers can use HSA funds for a non-qualified purchase — but they'd lose a prong of the three-tiered tax benefit. A withdrawal would be taxed as income, similar to the way a pre-tax 401(k) or individual retirement account works.
In an ideal world, consumers would be able to fully fund their HSA each year and pay for current health costs out-of-pocket, leaving the accounts untouched until retirement, according to financial advisors.
"The compounding of earnings could fund all your health care when you're old," said Carolyn McClanahan, a physician and certified financial planner, based in Jacksonville, Florida.
But it's not always possible to use HSAs that way — especially for lower and middle earners who may not be able to shoulder those expenses. HSAs are typically paired with high-deductible health plans which, depending on the plan, could generate big bills for medical care.
Here are four cases in which HSA funds can be applied to premiums:
Premiums for health-care continuation coverage such as COBRA count as a qualified expense, according to the IRS.
COBRA lets people who lose health benefits — due to circumstances like job loss, reduction in the hours worked, jobs transitions, death or divorce — continue their workplace health coverage on a temporary basis.
COBRA coverage typically allows consumers to keep the same health-care providers, but the coverage is often pricey.
When employed, workers generally only pay a share of the total premium, with the rest subsidized by their employer. With COBRA coverage, however, individuals may have to cover the full premium, up to 102% of the cost to the plan.
The total average premium for single coverage through a workplace plan in 2023 is $703 a month, or $8,435 a year, according to KFF, a nonprofit health data provider. For families, it's $1,997 a month, or $23,968 a year.
Health premiums paid by someone receiving unemployment compensation under federal or state law are also eligible.
These might be premiums for COBRA or a health plan purchased over an Affordable Care Act marketplace, for example.
Medicare premiums for people age 65 and older are also qualified, according to the IRS.
This would include premiums for Parts A (hospital insurance), B (medical insurance) and D (prescription drug coverage).
However, premiums for Medicare supplemental health policies — like Medigap plans — aren't qualified.
"The big mistake I see over and over is people thinking they can use HSAs for Medigap expenses," McClanahan said.
Medicare beneficiaries don't have to pay their premiums directly with an HSA to get the benefit. They can pay from their Social Security checks or from a bank account, for example, and reimburse themselves with their HSAs later, McClanahan said. Keep records and receipts of all these transactions, she advised.
There's an additional caveat: If the HSA owner isn't 65 years or older, then Medicare premiums for a spouse or a dependent who is 65 or older generally aren't qualified, the IRS said.
Consumers can also use their HSAs to pay for long-term care insurance premiums.
There are dollar limits on qualified premiums on based on age. Here was the breakdown for 2022:
- Age 40 or under — up to $450
- Age 41 to 50 — $850
- Age 51 to 60 — $1,690
- Age 61 to 70 — $4,510
- Age 71 or over—$5,640
The age corresponds to the person for whom the premiums were paid. The dollar limits are updated annually.
The insurance must be a "qualified long-term care insurance contract," as defined in IRS Publication 502.
Ideally, consumers would pay out of pocket for their long-term care premiums before they retire, McClanahan said. However, it generally makes sense to use an HSA to pay these qualified premiums if they're retired and now living off their savings, she said. | Personal Finance & Financial Education |
While the term ‘Stimulus Checks’ might not be in use currently, the Internal Revenue Service (IRS) is set to provide financial relief through Tax Rebates for the month of December. This initiative comes as a continuation of the support provided during the Global Pandemic when the IRS issued three rounds of stimulus checks.
These checks, which significantly aided millions of Americans, varied in amount based on each individual’s prior tax returns. Presently, there’s ongoing discussion and speculation regarding the issuance of a fourth stimulus check. Despite these debates, official sources confirm that there are no concrete plans to implement such a measure at this time.
However, there is a notable development for residents of Alabama. The state is slated to receive specific financial assistance in the form of Tax Rebates. To be eligible for these rebates, one critical criterion must be met: taxpayers need to have filed an individual Income Tax Return for the year 2021, which should have been received by the Alabama Department of Revenue (ALDOR) by October 17, 2022.
It’s important to note that certain groups are excluded from this rebate program. This includes individuals who were not Alabama residents during the 2021 tax year or those who were listed as dependents on someone else’s tax return. Additionally, estates and trust funds are not eligible for these rebates, told Marca.
The distribution of these tax rebates is scheduled to commence on December 1, 2023. What makes this process convenient for eligible taxpayers is the lack of requirement for any additional action on their part, provided they have already filed their 2021 tax return. The IRS has streamlined the process, ensuring that these rebates will be automatically issued to every qualifying taxpayer.
The amount of each Tax Rebate is determined based on the filing status of the taxpayer for the 2021 tax year. Single taxpayers, heads of households, and those who are married but filing separately can expect to receive a rebate of $150. On the other hand, married couples who filed jointly are set to receive a higher rebate amount of $300.
As for the mode of payment, the IRS has arranged for these rebates to be delivered either via direct deposit to the taxpayer’s bank account or through a traditional paper check. Taxpayers who meet the eligibility criteria should therefore be vigilant from December 1, 2023, onwards, as these rebates will start being distributed from this date.
In summary, while the prospect of a fourth nationwide stimulus check remains uncertain, the state of Alabama is poised to provide its qualifying residents with a financial boost through these Tax Rebates. This move by the IRS is a significant step in continuing to support Americans in the aftermath of the pandemic’s economic impacts. | Personal Finance & Financial Education |
EastEnders star Michelle Collins will today deliver a petition to Downing Street demanding free school meals for all primary school pupils.
The soap legend qualified for free school dinners as a child but her single mum often worked three jobs so she and her sister could be spared the stigma.
Michelle, 60, said all children should get a nutritious meal at school regardless of background as she echoes mounting calls for the Tories to feed more hungry kids.
Pupils living in Universal Credit families are eligible if their parents earn less than £7,400-a-year from work.
The Mirror and the National Education Union (NEU) are calling on the Government to extend the benefit to all primary school children in England, in line with commitments in Scotland and Wales.
Under current rules, children in England can get free school meals up to the end of Year 2 but after that it only applies to households on certain benefits.
This leaves an estimated 800,000 children living in poverty but who do not qualify for free school meals.
Michelle will join campaigners from Barnardos to deliver a petition calling for change to No10, which has been signed by more than 32,000 people.
She said: “As a child of a single parent mother, my sister and I were eligible for free school meals, but it was a separate queue in the seventies, and kids were made to feel humiliated.
"So, my mum decided she wouldn’t put us through that, and she managed to get the money together. She often had three jobs going at one time. I think sadly there is still a stigma around free school meals.
Why every child deserves a free school meal
The country’s children should not be the victims of the cost of living crisis.
They should not have to pay the price because their parents cannot afford to put food on the table or heat the family home.
But at the moment there are nearly four million children living in poverty. Many of them are being brought up in homes where there is not enough money to pay for a hot meal. Some are having to skip meals entirely.
That is why the Mirror is calling on the government to provide free school meals for every primary pupil in England.
The Scottish and Welsh governments are introducing universal free school meals. It’s time England did the same.
If a child is hungry they cannot learn. It makes it harder for them to concentrate in class and harder for them to reach their potential.
Free school meals for all primary-age children would save parents vital pennies - money which could be used to pay for warm clothes, school activities or heating.
It would reduce the bureaucracy attached with deciding which pupils are eligible. Most importantly, it would mean every child have the chance to flourish.
"I think it should just be universal free school meals so, for whatever reason parents can’t pay, everyone is treated the same - no questions asked."
Barnardo’s Chief Executive Lynn Perry said: “It is unacceptable that children are going hungry in a country which has the sixth largest economy in the world.
"The cost-of-living crisis is driving more and more families into poverty, and we know from our frontline work that this will affect children now and long into the future.
"Not having enough to eat can affect children’s growth, make it difficult to focus at school and harm their future life opportunities.
"Whether children have enough to eat shouldn’t be determined by their postcode. That is why we are calling on the Government to introduce free school meals for all primary school children in England, to support struggling families across the UK, and to do more to tackle hunger during the school holidays.” | United Kingdom Business & Economics |
U.S. consumers are treading water at the start of the summer, despite a buoyant job market and gasoline prices that are 25% lower than last summer. This supports the view that only one more rate hike might offer the best chance of cooling inflation without dunking the consumer. U.S. retail sales in June were up 1.5% from a year earlier, according to the U.S. Census Bureau. Retail sales (which are reported on a nominal basis) including inflation grew at half the pace of the Consumer Price Index, which was up 3% in June. At a June conference, Walmart CFO John David Rainey said while headline inflation is coming down, but a cart of groceries is still 20% more expensive than it was two years ago. That's forcing shoppers to make hard choices. Sales at food and beverage stores rose just 1.3% last month, even as food-at-home prices were up 4.7% according to the CPI report. Shoppers are trading down to store brands and eating hot dogs rather than steak. As well, an increasing number of shoppers who make more than $100,000 a year are switching to Walmart and other discount grocers. Weakness in discretionary categories, including furniture stores (-4.6%), building materials, garden equipment and supplies dealers (-3.2%), and department stores (-5.2%) show that consumers are reluctant to tap credit cards at record-high rates. Business at restaurants and bars remained strong, jumping 8.4% as consumers allocate extra cash to services rather than goods. Retail trade sales, which exclude food services and drinking places, were up just 0.5% year-over-year. The nonstore retailers category, dominated by e-commerce, was up 9.4% year-over-year. | Inflation |
OMAHA, Neb. -- With the Powerball jackpot topping $1 billion for this week's drawing, millions of people across the country will be lining up at convenience stores, grocery and gas station counters hoping to hit it big.
HOW DOES THIS LATEST POWERBALL JACKPOT STACK UP?
The new jackpot for Wednesday’s drawing would be the seventh highest in U.S. history and the third largest for Powerball. If a sole player picks all five numbers plus the Powerball number drawn, they have the option of taking the $1 billion prize in yearly increments paid out over 29 years or a $516.8 million one-time lump sum before taxes. The last time someone won the Powerball jackpot was April 19 for a top prize of nearly $253 million. Since then, no one has won the grand prize in the past 38 drawings. The jackpot will keep growing until someone wins.
WHAT CAN YOU BUY WITH $1 BILLION?
Pretty much anything you want. A billion dollars could buy you around 200 Bugatti Mistral Roadsters, dozens of eight-seater private jets, or several private islands in the Caribbean. But don't make the mistake of thinking you could never spend it all, warned Shean Fletcher, a wealth advisor in Kansas City, Missouri.
Among things to keep in mind are that huge jackpots also bring huge tax bills, he said. Not just on the money itself, but high-dollar houses, cars, planes and other property also usually come with big recurring tax and upkeep bills. The idea that lottery winners can just spend lots of money daily forever is a fallacy that has seen more than one lottery winner blow through their winnings, he noted.
“So by far, the biggest misconception that we hear or read and see is, is that the money seems to be infinite when it certainly is not,” Fletcher said.
SO WHAT SHOULD YOU DO IF YOU WIN?
First and foremost is to secure the winning ticket by putting it in a safe place such as a fireproof safe. Then you should start putting your “team” together, Fletcher advised. That likely includes your closest, most trusted family members, like your spouse, a parent or sibling, as well as a financial adviser, lawyer and certified public accountant. Then you can start making plans on what you want to do with the money.
“After the initial excitement, you know, take a deep breath and take it slow,” Fletcher said.
MEGA MILLIONS JACKPOT IS SOARING, TOO
The $1 billion Powerball top prize is drawing the lion's share of attention, but the competing Mega Millions lottery jackpot is also reaching massive heights. Ahead of a drawing Tuesday night, that jackpot stood at $640 million, the seventh-largest in the game’s history.
WHY ARE LOTTERY JACKPOTS SO LARGE THESE DAYS?
That's how the games have been designed. The credit for such big jackpots comes down to math -- and more difficult odds. In 2015, the Powerball lottery greatly increased the odds of winning from 1 in 175.2 million to 1 in 292.2 million. Mega Millions followed two years later, lengthened the odds of winning the top prize from 1 in 258.9 million to 1 in 302.6 million. The largest lottery jackpots in the U.S. have come since those changes were made.
WHAT ARE THE BIGGEST JACKPOTS EVER WON IN AMERICA?
The largest — a whopping $2.04 billion — was a Powerball jackpot that hit on Nov. 8, 2022, with the winning ticket sold in California. The next largest jackpot was also a Powerball prize, at $1.586 billion on Jan. 13, 2016. But that prize was split among three winning tickets, sold in California, Florida and Tennessee. The third, fourth and fifth largest were each Mega Millions prizes, at $1.537 billion going to a single winner in South Carolina on Oct. 23, 2018; $1.35 billion won in Maine earlier this year on Jan. 13; and $1.337 billion won in Illinois on July 29, 2022.
AS THE LOTTERY ADS SAY: PLAY RESPONSIBLY
Your odds of winning are only slightly improved by buying more than one ticket. And the odds are so long that it's certainly not worth spending money you'll miss for more tickets, experts warn. If buying one ticket gives you a 1 in 292.2 million chance of winning the jackpot, spending $10 for five number combinations improves your chances to only 5 in 292.2 million. The same is true is you spend $100. So you could spend a lot of money on tickets and still almost undoubtedly not hit the jackpot. Lottery officials say the average player buys two or three tickets, meaning they’re putting money down on a dream with very little chance it will pay off in a jackpot win.
WHERE IS POWERBALL PLAYED?
Powerball is played in 45 states, as well as Washington, D.C., Puerto Rico and the U.S. Virgin Islands.
___
Ingram contributed from Kansas City, Missouri. | Consumer & Retail |
A leading charity has criticised proposals to restrict items that form part of meal deals - arguing the move could be "very dangerous" for people with eating disorders.
The Welsh government has been consulting the public on plans which could see food items that are high in fat, sugar or salt content excluded from meal deals, with other restrictions on offers such as buy one get one free.
But the UK eating disorder charity BEAT has said that the proposed move could make it harder for people with eating disorders to follow prescribed meal plans or consume "safe foods" which aid their recovery.
The Welsh government says that no final decision has been made after the consultation and that it is working with charities including BEAT.
Jo Whitfield, the charity's national officer for Wales, told Sky News: "This move will make getting the food they need even harder.
"The Welsh government has made this proposal obviously in order to reduce the general population's calorie intake, but for people with eating disorders, they risk becoming even more unwell if they try and reduce the amount of calories they're eating, so it could be very dangerous for people who have an eating disorder."
As part of the consultation, the government has also looked at introducing calorie labelling on menus in Wales which Ms Whitfield described as "dangerous for people either susceptible to or who have an eating disorder".
"We would just ask the question back to the Welsh government, when will the needs of people with eating disorders be considered?"
BEAT says that the government should listen to the specific needs of people with eating disorders when consulting on policies like this one.
"It's crucial that the government considers the health and well-being of the 58,000 people in Wales with eating disorders when creating their policies," added Ms Whitfield.
In a joint letter to the Welsh government, the Welsh Retail Consortium, the Association of Convenience Stores and Food and Drink Federation Cymru say that there is a "lack of evidence" to support restrictions on meal deals.
The Welsh Conservatives, the largest opposition party in the Senedd (Welsh Parliament) has said that the proposals would "hit the poorest in our communities hardest".
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A Welsh government spokesperson said: "We have been discussing the proposals with people with eating disorders and charities, including BEAT, as part of our ongoing discussion around healthy food environments.
"Through the consultation process, which began last year, we have been clear that we will fully consider the impact on people with eating disorders and we will put measures in place to support them."
The Welsh government adds that no final decision has been made following the consultation and that they are not planning to "ban" meal deals outright. | United Kingdom Business & Economics |
Free Coffee Mondays Are Returning to Dunkin' Starting Sept. 1
KEY POINTS
- Dunkin' is offering free coffees on Mondays starting in September.
- You'll need to purchase an additional item to get a coffee for free.
- Be mindful of your spending on coffee and other Dunkin' treats if money is tight.
Inflation has been hammering consumers for more than two years now. And while it's thankfully been cooling, many people are still grappling with higher bills than they're used to. That's inevitably forced a lot of people to cut back on leisure spending so they can focus on essential bills, like rent or mortgage payments.
If you're bemoaning the small luxuries you used to enjoy but can no longer comfortably swing, like store-bought coffee, there may be some good news in store. Beginning Sept. 1, Dunkin' is bringing back its Free Coffee Monday promotion. And it's an opportunity you may want to jump on.
The Dunkin' details
Many people who work a traditional schedule dread Monday mornings because it represents the start of the workweek. Dunkin' is sweetening the deal, however, with its Free Coffee Mondays. Members of the chain's rewards program, which is free to join, can enjoy a free medium hot or iced coffee with the purchase of another item on the Dunkin' menu.
Of course, it can be argued that Dunkin's free coffees on Monday aren't totally free because you're required to purchase another item at full price. But if you're someone who would normally pick up a muffin and coffee from Dunkin', then you can at least get one free item out of the deal. And at a time when costs are generally still higher, every bit of savings counts.
When will inflation ease completely?
In July, annual inflation was measured at 3.2%, per that month's Consumer Price Index (CPI). That's a vast improvement from June 2022, when annual inflation was measured at 9.1%.
But still, even as of July, the cost of many common goods was up substantially. Food at home (otherwise known as groceries) was up 3.6% annually, while electricity costs were up 3%. And one of the biggest increases noted on last month's CPI was shelter costs. Those rose 7.7% on an annual basis.
On a positive note, gas prices are way down from where they were a year ago, and some other expenses have decreased, too. But all told, life's still pretty darn expensive these days. And it's hard to say when inflation will reach pre-pandemic levels. It could end up taking many more months to get to that point. So it definitely doesn't hurt to take advantage of free offers like Dunkin's as they arise.
Also, if you're someone who does frequent Dunkin', pay attention to other savings opportunities. Dunkin' frequently runs promotions that run the gamut from discounted food items to free beverages. And remember, if you're on a "no-spend" kick but you have Dunkin' reward points banked, you can always cash them in for free food and drinks if you could really use a pick-me-up.
Dunkin' is far from the only chain to offer a rewards program, so think about the places you like to go for a quick lunch or morning beverage and see what programs they have available. You may be in a place where you have to cut back on smaller treats to conserve cash, but that doesn't mean you can't find ways to score freebies that boost your spirits.
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Comparing the UK economy with its pre-pandemic size has become an almost totemic way of highlighting its sluggish performance post-COVID.
It has certainly been a gift for Opposition politicians and in particular when - in September last year - the Office for National Statistics (ONS) produced evidence that the UK was the only economy in the G7 group that remained smaller than it was in February 2020.
However, today brought news that the UK economy actually fared better in the post-COVID period than previously thought.
The ONS unveiled a series of revisions for past GDP growth - affecting both 2020 and 2021.
It said that the UK economy contracted by 10.4% in the main pandemic year of 2020 - less worse than the 11% contraction previously reported.
And it said UK GDP grew by 8.7% in 2021 - considerably better than the previously reported growth of 7.6%.
Put together, it means that at the end of 2021 - rather than being 1.2% smaller than it was going into the pandemic as previously reported - the UK economy was actually 0.6% bigger.
Some will say that this is all just rear-view mirror stuff and does not really matter.
But it does.
Even in its most recent estimates for quarterly growth, the ONS was suggesting that, during the three months to the end of June, the UK economy remained 0.2% smaller than it was during the final three months of 2019, the last full quarter before the pandemic struck.
Carry these revisions across to the latest data though, and it means that, rather than being at the bottom of the G7, the UK's economic recovery post-pandemic was well ahead of Germany and not far behind those achieved by France and Italy.
The Treasury was also quick to point out that, as of the end of 2021, the UK's recovery trailed only those of the US and Canada in the G7.
Chancellor Jeremy Hunt said: "The fact that the UK recovered from the pandemic much faster than thought shows that once again those determined to talk down the British economy have been proved wrong.
"There are many battles still to win, most of all against inflation so we can ease cost of living pressures on families. But if we stick to the plan we can look forward to healthy growth which according to the IMF will be faster than Germany, France, and Italy in the long term."
The ONS explained the rather dramatic upward revision thus: "These revisions are mainly because we have richer data from our annual surveys and administrative data, we are now able to measure costs incurred by businesses [intermediate consumption] directly and we can adjust for prices [deflation] at a far more detailed level."
Part of the revision can be explained by the fact that the ONS now has a more detailed understanding of how much people were being paid in the 2021-22 financial year following the availability of more up-to-date information from HM Revenue & Customs. More up-to-date information on household spending during 2021, for example on telecoms services, has also been incorporated into the assessment of GDP.
Put together, these led to some pretty dramatic upgrades in parts of the services sector, which makes up four-fifths of UK GDP. The ONS now thinks the services sector as a whole grew by 10.9% in 2021, way ahead of the previous estimate of 7%, which is a pretty extraordinary upward revision.
The biggest contributors to that, according to the ONS, was from the wholesale and retail trade, and repairs to cars and motorcycles in particular.
Another contributor was accommodation and food services, which is now reckoned to have grown by 31.3% in 2021, up from the previous estimate of 30.9%.
Clearly the rush among Britons to eat out and stay in hotels after lockdowns ended was even bigger than previously thought.
Other sectors where activity was stronger than previously assumed were professional scientific and technical activities and healthcare services.
The commercial property sector, previously thought to have contracted during the year in question, is also now reckoned to have enjoyed growth.
These revisions are really important in terms of how we view the UK's economic performance.
As Simon French, the chief economist and head of research at the investment bank Panmure Gordon was quick to note, the entire UK economic narrative, post-pandemic, has just been revised away. All those headlines about the UK economy not being back at pre-COVID levels, or bottom of the G7, are now obsolete.
He added: "But as a macro guy who has had to talk to international investors [about] why gilts and UK equities do or do not deserve [to trade at] a discount, this has cast huge doubt on recent investor conclusions.
"I may be biased but this deserves to lead every UK economic and business story today - to provide symmetry to the coverage that the sluggish post-pandemic recovery that has shaped investor/business/household sentiment."
There has been much hand-wringing in recent months about why international investors are shunning UK assets and why some UK companies have sought to switch their main stock market listing from London to New York.
Much of that negativity will have been informed by headlines about the UK's lacklustre growth post-pandemic.
There is a word of caution, though. One is that the national statisticians of other countries are embarking on similar revisions to their GDP statistics using something called the "SUTS" - supply and use tables - framework. This approach is reckoned to provide a more accurate assessment of how a particular industry or sector has performed and, by extension, the economy as a whole. The statistics offices of the UK and the US are, at present, the only ones to have done this.
As the ONS pointed out today: "This means that the UK has one of the most up-to-date sets of estimates for this period of considerable economic change. Other countries follow different revision policies and practices, which can result in their estimates being revised at a later date.
"It is important this is considered when comparing the UK with other countries and our international comparison position is likely to change once other countries fully confront their datasets over time."
And there is a broader point to make, too, which is that it is debatable whether GDP is that meaningful a measure, these days, of how the economy is doing and how all of us, as individuals, are living their lives.
As Savvas Savouri, economist at the hedge fund manager Toscafund and one of the Square Mile's smartest economists, has told clients in the recent past: "GDP is a nonsensical measure of the modern UK economy… it fails to do justice to the ever-growing service-side of the UK economy.
"After all, measuring the production of textiles is very much easier to do than capturing the volume and value of coding for gaming, e-commerce and e-finance, architectural design, writing of legal contracts, insurance underwriting, academia to students from overseas and so forth."
The ONS would doubtless argue, in response, that this is why it is seeking to finesse its methodology.
And, for now, it is helping paint a more encouraging picture of the UK economy. | United Kingdom Business & Economics |
As the artificial intelligence market continues to heat up, a number of crypto players — big and small — are diving in.
The Solana Foundation, the nonprofit organization behind the layer-1 blockchain Solana, has officially integrated AI into its network with a ChatGPT plug-in developed by Solana Labs, the team exclusively told TechCrunch+. (Solana Labs is the team building products and tools for the blockchain.)
The plug-in, which was teased by Solana Labs in late April, will be geared toward end users initially, with a focus on helping them onboard into the web3 space. It can be used to buy and list NFTs, transfer tokens, check out transactions, interpret data and find NFT collections by floor price, Solana Foundation shared.
Solana is plugging ChatGPT into an RPC node that will read data from multiple sources on-chain and disseminate that information to questioning users, said Tal Tchwella, head of product at Solana Labs.
For example, users can ask the AI questions about NFT collections, which NFTs they can buy with the SOL tokens they have in their account and so on. “There’s a lot of places this could be useful … we’re hopeful to see more experimentation by dApps — and that’ll be the exciting part.”
The ChatGPT plug-in will initially focus on NFTs and given that Solana’s NFT sales by volume was about $58 million in the past 30 days, the subsector is likely a good choice given that it is already heavily used by the blockchain and its users.
But there’s also initiatives on the developer front to help accelerate the growth of AI within its ecosystem, too, Tchwella shared.
The ChatGPT integration offers a new way for Solana users and developers to ask the AI service questions, while “making the experience simpler,” Tchwella said. As opposed to reading an 800-page document on a Solana-based project, the AI does it for you and then can share answers to people’s questions.
“We believe that the blockchain space is way too technical,” Tchwella said. Bringing the popular ChatGPT service to Solana “offers a new opportunity for people to engage with it and understand what’s really happening.”
In addition to the plug-in, the foundation also announced an AI-focused accelerator program for university-level students in early April and, separately, expanded its grant program for AI-focused projects building on Solana from $1 million in late April to $10 million today. In less than a month, over 50 applications were submitted for grants and a few companies have been awarded grants already, a spokesperson shared.
The grant program isn’t about coming up with ideas and trying to build them but showing Solana the proof of concept of what’s actually working in the realm of AI and will make using the blockchain easier, Tchwella said.
“We’re just at the beginning of AI integration,” Tchwella said. “It’s the early innings of all this.” | Crypto Trading & Speculation |
The "Ultimate Endless Shrimp" deal reeled in too many hungry customers at Red Lobster and now the company is turning the tide after reporting millions in operating losses.
In June, the seafood restaurant chain turned its historically limited-time shellfish special into a permanent menu fixture for diners to enjoy. The special offered diners the option to choose two types of shrimp dishes, unlimited, for just $20, with a side of Red Lobster's famous Cheddar Bay Biscuits.
While the move certainly accomplished getting more hungry customers into restaurants -- 4% year over year -- the company posted an operating loss of over $11 million in its third quarter, with the discounted offer contributing to that loss, according to Red Lobster's Thailand-based parent company, Thai Union Group.
Last month, Thai Union Group reported that Red Lobster had "higher losses from operations than expected" in its third quarter of 2023. On its latest earnings call, the company's CFO Ludovic Regis Henri Garnier said Thai Union Group wasn't aware the initial deal price was so cheap.
"We wanted to boost our traffic, and it didn't work," Garnier told investors, as first reported by Restaurant Business. "We want to keep it on the menu. And of course we need to be much more careful regarding what are the entry points and what is the price point we are offering for this promotion."
The seafood company cited "Ultimate Endless Shrimp" as a key factor in the financial misstep and has since raised the price of the deal to $25 at all 670 restaurants.
All in, Thai Union said it expects a $20 million loss for 2023.
Restaurants have long had to grapple with getting seats filled and the thin margins from overhead operational costs, which became glaringly apparent in the thousands of closures that took place during the COVID-19 pandemic, and again as food costs and inflation created more price-conscious consumers.
Red Lobster did not immediately respond to ABC News' request for additional comment. | Consumer & Retail |
Adani Stocks Surge To Add Over Rs 75,000 Crore In Investor Wealth
The Supreme Court on Friday questioned where's the material 'to doubt SEBI' over its probe into the Adani-Hindenburg matter.
Shares of Adani Group companies jumped on Tuesday after the Supreme Court upheld its confidence in the market regulator's probe into the Adani-Hindenburg Research matter.
Adani Total Gas Ltd. was trading 14% higher and Adani Energy Solutions jumped 11%, leading the gains. Adani Power Ltd. and Adani Green Ltd. were trading above 6%, while NDTV Ltd. and Adani Wilmar Ltd. were above 4%.
Adani Group stocks added Rs 75,621 crore in investor wealth, taking total market capitalisation to Rs 11 lakh crore, intraday, before paring some of of the gains to Rs 10.91 lakh crore as of 10:05 a.m.
On Friday, the Supreme Court reserved its judgment on the matter related to the Securities and Exchange Board of India's probe into the Adani-Hindenburg case. The case involved petitions that sought contempt of court proceedings against the markets regulator. The petitioner had alleged that SEBI had not completed its investigation on stock-manipulation allegations in a timely manner.
Chief Justice of India DY Chandrachud, during the hearing, questioned where's the material "before us to doubt SEBI". The top court also questioned the “wisdom” of allegations of conflict of interest against members of the committee appointed to look into allegations of Hindenburg Research against the Adani Group.
On Monday, the Adani Group condemned attempts to link the conglomerate with the collapse of the Uttarkashi tunnel, saying the group had no direct or indirect involvement with its construction.
"We clarify with utmost emphasis that the Adani Group, or any of its subsidiaries, has no direct or indirect involvement of any kind in the tunnel’s construction," an Adani Group spokesperson said in a statement. "We also clarify that we do not own or hold any shares in the company involved in the tunnel’s construction."
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 |
Travel is back on the agenda after a Covid-19 hiatus, and today a mobile startup out of Canada is announcing a healthy round of funding to capitalize on that. Airalo — which uses software-based eSIM connectivity to provide a wide range of lower-cost mobile data packages, nearly 700 in all, for international travellers — has raised $60 million in a Series B round that it will be using to expand its business.
The all-equity round, values Airalo at $250 million post-money, includes a long list of financial and strategic backers, a mix that speaks to who works with the startup as a business partner as a complement to their own direct operations.
e& Capital, the venture arm of e& (better known as the UAE-based carrier Etisalat), is leading the round with participation also from startup incubator Antler Elevate, Liberty Global, Rakuten Capital, Singtel Innov8, Surge (the early-stage fund run by Peak XV, formerly known as Sequoia Capital India and SEA), Orange, T.Capital (the venture arm of Deutsche Telecom), KPN Ventures, Telefónica Ventures, I2BF Global Ventures, GO Ventures, and LG Technology Ventures. This fundraise is a big step up for the company, which had previously raised just $7.3 million.
Although Airalo’s only just closed the round, the company is currently on a strong growth rate — 20% revenue growth month on month, with nearly 1 million downloads monthly for the past three months. And from what we understand, that’s leading to further interest from other potential investors. There are already discussions to bring extra backers on at a considerably higher valuation of between $800 million and $1 billion.
Launched in 2019, Airalo is one of a group eSIM providers that have received an injection of life thanks to handset makers like Apple promoting the software-based standard as an easier way for users to move from one mobile carrier to another, doing away with requiring customers to physically change the small SIM card in their phones.
eSIM has been both a blessing and curse: it means carriers might have a better chance of wooing away customers from their current providers, but it also means it’s harder to lock in the customers they have. Overall, for consumers it’s a huge win, since it means mobile operators have to be a lot more creative and competitive to win business.
And that’s where Airalo has been showing promise. After a very slow start due to the pandemic when COO Abraham Burak said growth basically “stalled” for two years, it started to pick up momentum in 2022.
Although carriers these days have become more savvy with building and offering travellers more cost-effective mobile data plans, many of these tend not to be as flexible, and thus cheap, as what consumers want or need. eSIM offerings promise an alternative: more granular offerings at smaller pricing increments.
Currently Airalo says that it has 5.1 million customers buying its eSIM products. These products are presented in a matrix of combinations covering some 200 countries, geographic regions, service durations, and data package sizes — in all currently totally 689 different combinations.
“We are seeing exponential growth in sign ups because travel is picking up,” said Burak, who co-founded the company with Bahadir Ozdemir (the CEO).
Burak and Airalo overall refers to this matrix of eSIM plans as its “marketplace”. That appears not to be a reference to multiple eSIM providers — Airalo is the only one selling to users — but to the large bazaar of carriers and carrier plans underpinning the deals.
Behind the scenes, Airalo builds out its many eSIM options by way of a network of carrier agreements that it brokers and then stitches together across the globe, some involving direct capacity purchased on a wholesale basis, and others involving reselling international roaming plans already structured by individual mobile carriers. Airalo has also built technology that measures demand and corresponding costs and pricing for these different eSIM packages.
If you are asking yourself, why would a carrier work with a third party like Airalo, which might compete directly against it? It’s for the same reason that a brand might sell through many retailers while also selling goods directly through its own-branded storefronts: if a customer is already looking somewhere else for a good mobile roaming plan before travelling, chances are the carrier has already lost that customer. Cutting a deal with Airalo gives that carrier a chance — albeit one at a smaller margin — to still win some business.
It’s enough of an opportunity that Burak said that there have been acquisition approaches already from the carrier world.
That’s not to say that all eSIM providers are swimming in opportunity, or necessarily capitalizing on it just yet.
Another big name in the space, Truphone, which had raised hundreds of millions of dollars, recently faced a period of significant turbulence when its biggest shareholder, Roman Abramovich, was slapped with international sanctions over his connections to Russia and he and other Russian shareholders were forced to sell their holdings in the company. Despite some very interesting deals it had on the books including services to banks and a partnership with Apple, Truphone had never made a profit in 15 years of operations, so its sale and its future definitely looked uncertain.
It look almost a whole year, but in the end Truphone was sold for £1 to two entrepreneurs, German businessman and tech entrepreneur Hakan Koç and former telecoms executive and private equity investor Pyrros Koussios, who pledged to invest more into the business and to expand the kinds of services it offers to enterprise customers.
(Indeed, stitching together data connectivity as an eSIM provider is not that far in concept from privacy-focused VPNs, which is something Truphone was already building for business customers, and may have been one of the interesting services that caught the eye of its Russian oligarch former owners.)
On that note, the idea of expanding what else an eSIM company can be providing to its customers beyond basic data is something that it seems Airalo is also taking on board, too. One new service it will be using the funding to help introduce is “Airalo Partners,” which it describes as “an innovative connectivity solution tailored to businesses and organizations across the globe.”
UAE has a number of international expat residents and itself has a population that is widely travelled, so it makes sense that an eSIM provider caught e&’s eye as an interesting investment opportunity.
“We are pleased to lead the Series B financing round for Airalo, a company that has come a long way over the past 18 months with a focus on providing exceptional customer experience,” said Kushal Shah, managing director, e& capital, in a statement. “We have complete confidence in Airalo’s ability to expand its user community, strengthen its diverse team, and introduce its latest product Airalo Partners, a groundbreaking connectivity solution for global businesses and organizations. We believe that Airalo has the potential to become a travel essential and are excited to support their journey towards becoming the definitive gateway to instant connectivity worldwide.” | Consumer & Retail |
The Culture Secretary has said she is concerned banks may be closing customer accounts for political reasons following claims from Brexiteer Nigel Farage.
Lucy Frazer said it is something banks "should be thinking about carefully".
Last week, Mr Farage said his bank was closing his accounts, claiming it was "serious political persecution" from an anti-Brexit banking industry.
The government is investigating payment providers over account closures.
Last year, Paypal closed accounts run by Toby Young, who is general secretary of the Free Speech Union. They were later reinstated by the US payments company.
The government subsequently announced a review into payment services regulations, including the practice of firms apparently closing down the accounts of people or businesses that hold views the lender does not agree with.
Mr Frazer told LBC, the radio station: "I'm concerned people's accounts might be closed for the wrong reasons and it's something they [the banks] should be thinking about carefully.
"Banks are regulated, and those are the sort of things regulators should consider."
Mr Farage said that he was told two months ago that his bank, who he did not name but is understood to be Coutts, was closing down his personal and business accounts.
The BBC has approached Coutts' parent company Natwest for comment.
'Commercial decision'
Mr Farage, who is the former leader of UKIP and a former member of the European Parliament, suggested that the reason for the decision could be related to laws that banks follow on "politically exposed person" or PEPs.
These are people who hold a prominent position or influence who may be more susceptible to being involved in bribery or corruption.
Banks are required to do extra due diligence on PEPs.
Mr Farage said he was told by his bank that closing his accounts was a "commercial decision".
UK Finance, which represents the banking industry, said lenders should discuss the closure of an account with a customer "so far as is feasible and permissible".
It said though there will "be situations where it may not be appropriate or permissible for a bank to engage in a dialogue to explain their reasoning".
This would include a breach of terms and conditions, "abusive or threatening behaviour to colleagues" or if banks have been directed not to by "regulators, HM Government, police and other authorities".
Mr Farage said he approached seven other banks to open personal and business accounts and was turned down by all of them.
However, he claimed there were other reasons why his existing bank acted.
"Either for reasons of being active in politics, or having opinions that modern day corporate banks don't agree with, far too many accounts have been closed in recent years," he told the BBC.
"I hope that my case blows the lid off the whole thing and that we can get changes to legislation. Everyone in the UK should be entitled to a bank account."
Speaking in the House of Commons on Monday, security minister Tom Tugendhat, said "This sort of closure, on political grounds - if that is indeed what has happened and after all we only have the allegation of it at this point - should be completely unacceptable.
"PEPs is there to prevent the corrupt use of banking facilities by politicians in corrupt regimes. It is not here to silence individuals who may hold views with which we may or may not agree."
The result of the government consultation on payment services regulations is expecting in the next few weeks.
The Treasury declined to comment. | United Kingdom Business & Economics |
- Costco is selling one-ounce gold PAMP Suisse Lady Fortuna Veriscan bars, handsomely detailed and ready for purchase.
- CFO Richard Galanti said the bars are in hot demand and don't last long when in stock.
Costco is well-known as a place to get bargain prices on any variety of items, from food to luggage to appliances to gold bars.
Wait, gold bars?
Yes, the retail warehousing giant is your one-stop shop for one-ounce gold PAMP Suisse Lady Fortuna Veriscan bars, handsomely detailed and ready for purchase.
They're available for the bargain price of ... well, you have to be a member to know that, but apparently they were selling for a little shy of $1,900 recently, according to chatter on Reddit. Spot gold most recently was going for $1,876.56 an ounce as of Wednesday afternoon.
Regardless of the price, gold is selling like hotcakes, judging by comments Tuesday from Costco CFO Richard Galanti. Speaking on the company's quarterly earnings call, Galanti said the bars are in hot demand and don't last long when in stock.
"I've gotten a couple of calls that people have seen online that we've been selling one ounce gold bars," he said. "Yes, but when we load them on the site, they're typically gone within a few hours and we limit two per member."
A couple of important points from that thought: The bars indeed are only available online, and only if you're a Costco member, which costs either $120 or $60 a year, depending on which program you pick. The retailer also is limiting the purchases to two to a customer, meaning it would be pretty hard to build a position that would lead to financial security.
At the very least, though, it's an effective promotion and one that could appeal to a certain sector of Costco's shopping clientele, said Jonathan Rose, co-founder of Genesis Gold Group.
Rose noted that the company seems to have accelerated it's offerings of dried foods and other survivalist goods at a time when worries about the future are running high. For example, the company markets a 150-serving emergency food preparedness kit that could come in handy, you know, just in case. Gold meshes with that that type of product.
"They've done their market research. I think it's a very clever way to get their name in the news and have some great publicity," he said. "There is definitely a crossover of people living off the land, being self-sufficient, believing in your own currency. That's the appeal to gold as a safe haven as people lose faith in the U.S. dollar."
Precious metals have been on a run over the past several years. Gold has risen more than 15% over the past year and more than 55% over the past five years.
With inflation still elevated, banks under the gun from a regulatory standpoint and looming issues in the commercial real estate market, the safe-haven aspect of gold and silver should be strong, Rose said.
"We know what the road map looks like: Bank failures, commercial loans defaulting at an alarming rate ... they don't seem to have a handle on inflation, and that's why they keep raising interest rates," he said. "The outlook for stability in the market isn't good and people want a tangle asset that's going to be a safe haven. That's what gold and silver provide." | Consumer & Retail |
Diane Abbott says Corbyn will win as independent
Sir Tony came out this morning to tell the Labour Party it cannot hope to tax and spend its way out of economic turmoil, unlike him in 1997.
The last PM to win a general election for Labour said the Tories have “taxed and spent to the point [of]… economic crisis” and warned Sir Keir Starmer he is facing an even gloomier situation that left for him by Sir John Major 26 years ago.
He said that in lieu of tax and spending changes, the Labour Party must focus on “understanding, mastering, harnessing the technological revolution - everything else is secondary to that”.
Sir Tony also told the Financial Times it is a “shocking indictment” that he remains the only Labour leader born in the last century to win a general election.
He said: “I’m afraid it has not been a successful political project… I didn’t give up on Labour.
“But I think the Labour Party would have been finished if we had carried on under Corbyn.”
Sir Tony’s attack on Jeremy Corbyn swiftly prompted return fire from one of his closest allies, Diane Abbott.
Ms Abbott said his interview “is a very clear indication of the utter failure of Blairism”.
"My policies work only if I inherit a growing economy. Otherwise, I have no answers.”
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The Corbynite activist and pressure group Momentum added that Sir Tony “is morally disgraced and politically toxic”.
Other social media users pointed out that Tony Blair’s characterisation of the economy left by John Major was “completely wrong”, with Sir John leaving a “booming economy”.
Sir Tony also told the FT that he meets with Sir Keir Starmer “reasonably frequently” and said his critics who said his current policy offering is too bland are talking “nonsense”.
Surprisingly he delivered some limited praise of Dominic Cummings, Boris Johnson’s former chief of staff, who also desired to reform the civil service.
Sir Tony said the civil service has to be completely overhauled to reflect the coming change.
He added: “Some of what [Cummings] says is sensible. Some I totally disagree with”. | United Kingdom Business & Economics |
(Bloomberg) -- Chinese developers’ bonds gained along with their shares after authorities began drafting a list of 50 real estate firms that would be eligible for a range of financing as Beijing sought to support the embattled property sector.
Most Read from Bloomberg
A Bloomberg gauge of China developer stocks gained as much as 7.6% to head for its biggest advance since September. Sunac China Holdings Ltd., the first major Chinese builder to reach a restructuring agreement, led the sector’s rise as it rallied as much as 27%. Seazen Group Ltd. and Agile Group Holdings Ltd. also climbed.
The so-called white list, which is intended to guide lenders as they weigh support for the industry via bank loans, debt and equity financing, may help alleviate fears of further contagion in China’s property sector. Still, it remains to be seen if the move will halt the industry’s long-running slump given that it does not represent a directive to banks to extend loans to real estate firms.
China Vanke Co., the nation’s second-biggest developer by sales, led gains in property bonds after its 3.5% notes due 2029 rose 2.7 cents to 61 cents on the dollar as of 1:53 pm in Hong Kong. Longfor and Seazen’s notes also advanced, although the bonds still trade at distressed levels.
China Vanke, Seazen and Longfor were among the companies that were named in a draft of the funding list, people familiar with the matter said, asking not to be named because the information is private. It couldn’t be determined which other developers were included on the list.
While the measure may help to boost confidence, the event is unlikely to mark the end of developer defaults, according to JPMorgan Chase & Co. analyst Karl Chan.
“Directionally this would be positive as it should enhance confidence from both homebuyers and banks,” Chan wrote in a note. “But if property sales of a non-SOE deteriorate substantially, we believe most banks may still be reluctant to extend support, as a white list may likely only serve as a ‘reference.’”
China Guides Banks to Cap Early 2024 Loans, Shift Some Forward
The real estate industry contracted 2.7% in the third quarter, the biggest drop this year. Home prices declined the most in eight years in October and funding for property development dropped 13.8% on-year in the first 10 months of 2023.
China’s biggest banks, brokerages and distressed asset managers were told to meet all “reasonable” funding needs from property firms at a Friday gathering with the top financial regulators, according to a government statement that didn’t mention a white list. Financial firms were also asked to “treat private and state-owned developers the same” when it comes to lending.
Still, some investors remain doubtful that the measures can reverse the sector’s slide.
“We want to see which private developers are actually on the list, as well as the size of the funding eventually delivered, because in reality, banks that have low risk appetite might not provide that much support,” said Andrew Zhu, fund manager at at Hainan Shire Asset Management Co.
(Updates throughout. An earlier version of this story was corrected to refer to private developers in the final paragraph)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Asia Business & Economics |
Goodbye for now That's all for our coverage on the cost of living crisis today - thanks for following along. Scroll down to see the latest on the National Grid's plan to pay households to use less electricity this evening and on Tuesday.Also, don't forget to get in touch with your stories - you can share them here: Your Report on Sky News appsWhatsAppEmailBy sending us your video footage, photographs or audio you agree we can publish, broadcast and edit the material. What is the Demand Flexibility Service and how can I save £100 off my energy bill if I sign up? People are being asked to cut down on their energy usage in exchange for money off their bills for the first time.Twenty-six energy suppliers are offering customers with smart meters the chance to save money in return for reduced usage at certain times.Tonight's timings are from 5pm until 6pm. The National Grid's Demand Flexibility Service will help avoid the need for emergency generators to be used or blackouts to be enforced when the grid comes under pressure during peak times this winter.How does it work?You can only take part in the scheme if you have a smart meter and your energy supplier is signed up.This is because the grid needs to monitor your energy every 30 minutes, which is only possible with a smart meter.On 12 days between 1 November 2022 and 31 March 2023 your energy company will ask you to reduce your energy usage - four times in the first month - and twice in each subsequent month.This will usually be between 4pm and 7pm.Customers are notified the day before so they can opt in or out depending on whether it suits their schedule.The "energy saving sessions" will only last for around an hour and will require you to reduce your normal energy consumption by around 30%.How can I save £100 off my bill? The easiest way to reduce your consumption is by not using energy-intensive appliances such as cookers, washing machines and dishwashers.Light bulbs and TVs use very little energy - so there's no need to turn the lights off or abstain from watching your programme during that time.The grid then compares your energy usage in 30-minute increments with your normal levels – and your supplier will give you around £3 for every unit (kilowatt-hour) you save.This could total up to £100 over the five-month period, which will be automatically deducted from your bill. Try out hobbies, turn off your phone and exercise: Experts reveal how to reduce cost of living stress With temperatures dropping, food prices rising and many still trying to figure out how to survive until pay day, it's fair to say the cost of living crisis has added to people's everyday stresses. Over the past month, online searches for "reduce stress" increased by 216%, and searches for "is stress normal?" saw a huge 635% rise. The company Simply CBD have revealed some tips on how to reduce your stress levels as part of your weekly routine. Self-careBeing mindful of your own needs is essential, and focusing on self-care will help reduce stress and anxiety tremendously. Forget spa days or trips away, you can easily indulge in pampering at home:Take a hot bath or shower.Pop on a face mask and read your favourite book – time away from blue light from your phone also helps relax the mind.Light some candles and listen to a meditation podcast.Treat yourself to your favourite home-cooked meal (or take away if you prefer).ExerciseBeing active is one way to release tension and endorphins (aka the body's natural pain killers). Going on a walk, taking part in an exercise class or following an online workout can be good low-cost options. Listen to musicListening to music gives the brain a total workout, and can help reduce blood pressure, improve memory, reduce anxiety and help make your sleep quality better. Experiment with hobbiesHobbies can be a great distraction and a good way to relax. If you're struggling to think of a hobby, it's never too late to find one. By making a list of all the hobbies you want to try, you are already one step closer to widening your range of skills, keeping your brain working and mind off all things stressful.Turn the phone off and stay off social mediaBy turning off your phone or limiting the time spent on social media, you can shut off the constant updates and remain solely focused on other things that make you happy. Plans to offer discounts for cutting electricity usage extended into tomorrow Earlier, we told you an early alert had indicated that the National Grid was preparing to run an electricity saving scheme tomorrow for the second day in a row. Now, the move has been confirmed. The National Grid's electricity system team has said it will pay households to slash their electricity use again on Tuesday in what would be the second live-run of its Demand Flexibility Service.The Electricity System Operator said on Monday that it was looking for bids from suppliers to help save up to 341 megawatts (MW) of power between 4.30pm and 6pm on Tuesday.The plan, which could still be abandoned if conditions improve, would help the grid balance supply and demand by paying people to reduce the amount of electricity they use.The service will be used live for the first time this afternoon between 5pm and 6pm.The scheme entitles households with up-to-date smart meters, who are signed up to the scheme via their supplier, to discounts if they cut their use of electricity by turning off energy intensive appliances during set times.So far, 26 energy suppliers are offering customers the chance to join, including British Gas, EDF and Octopus Energy. You can see a full list of the providers taking part here. When bread becomes deadly - paying the allergy premium in a cost of living crisis For most people, the type of bread they buy is rarely a matter of life and death.But for millions of Britons with allergies, eating the wrong food could put them in hospital - or worse.As the cost of living rises - and spiralling food prices mean customers get little change from a fiver for a loaf of specialist bread - these families are facing particular pressure.The Bolton family, from Southampton, faces a double whammy of food restrictions.Eli Rana, aged 14, is allergic to dairy, egg and soya while his older sister, Darshi Rana, aged 17, has coeliac disease - which means a single crumb of gluten can leave her feeling like "all her internal organs are being squeezed".The family cannot eat something as simple as the same loaf of bread.A comparison of foods by Allergy UK in December found it costs on average 157% more for some free-from alternatives.Read the full story from Megan Baynes, cost of living reporter, here... Owning a dog now costs more than £20,000 - here are the most expensive breeds From vaccinations and pet insurance to food, toys and poo bags – owning a pet has never been an inexpensive commitment. But now, the average lifetime cost of owning a dog has reached more than £20,000, according to ProDog Raw. Data collected by the dog food company showed 68% of owners found it was more expensive to look after their pet in 2022 compared to 2021.It also revealed the most expensive pooches to ownMedium dog breeds – such as Border Collies, Beagles and Springer Spaniels – cost the most on average at £16,498Large dogs - such as Great Danes, Newfoundlands and St. Bernards - came in at a slightly lower cost of £16,277 on averageToy and small breeds were found to be the cheapest dogs to own, costing £12,308Factors considered in the research included annual pet insurance, vet bills and grooming costs, as well as the price of toys, poo bags, dog beds, and food.Those with dogs that require regular grooming are looking at adding an extra £5,862 to their care costs, which includes bathing, clipping, nail cutting and dental care. "With the ongoing cost of living crisis, those planning on buying or adopting a puppy need to consider the real cost of owning a dog now more than ever," said the dog food company's chief executive Heidi Maskelyne. "It's truly heartbreaking to hear that the number of animal abandonments is rising, and while this can be due to various reasons, statistics tell us that a predominant cause for concern is the affordability of a pet." Energy price cap could fall below £3,000 from April - but here's why it won't make a difference to you The energy price cap might drop below the £3,000 mark as early as April, the boss of Ofgem has said in a prediction that could save the government billions of pounds.Jonathan Brearley said that it was "possible" that falls in the wholesale cost of gas and electricity could mean that bills would fall below that level for the average household.It is more optimistic than recent projections from independent analysts at Cornwall Insight, who last week forecast the price cap would still top £3,200 in April before falling significantly in July.What impact would it have? If the price cap does fall below £3,000, it won't mean much for households, as the government has already overridden the price cap to ensure that average bills do not rise above that level.However, It could save the government billions of pounds. This is because it promised to pay suppliers to make up the difference between what they are allowed to charge customers and the price they have to pay to buy energy. Midwives in Wales announce eight-hour strike Midwives in Wales are set to strike for eight hours on Tuesday 7 February, the Royal College of Midwives (RCM) has announced.RCM members – including midwives and maternity support workers – will walk out from 8am to 4pm, the union said.They will also be taking industrial action short of a strike by claiming payment for any overtime worked in the week following strike action, it added.During industrial action, midwives will provide "bank holiday cover" to ensure women in labour or those in need of emergency care still get the support they need. Money saving hacks: Six ways to cut down the cost of pet care With costs seeming to be ever-increasing, looking after your pets can come with a pretty hefty price tag. As our cost of living reporter Megan Baynes revealed earlier, the "excessive" price hike of one brand's food has sparked outrage among the animal-owner community. So to help you keep hold of your pennies, Animal Friends Pet Insurance has come up with a list of ways to reduce costs. Don't always buy new - pop into your local charity shop to look for supplies such as beds, blankets and toys. They are bound to be cheaper and your pet will love them just the same. Share with others - when it comes to larger items like carriers and crates, why not share with friends or neighbours? Make do and mend - from an easy treat roll made from a cardboard tube to a towel braid toy, you can DIY some things to keep your pet entertained instead of having to buy them.Don't cancel your pet insurance - although it may be a tempting way to curb costs, try discussing changing your cover level instead, or haggle for a better deal.Buy food in bulk - like with most human goods, buying pet food in bulk can sometimes work out cheaper than buying a bag or some tins as and when you need them. Remember pet food banks exist as well.Shop around for medication prices - if you’re given a prescription by your vet, you might find that the medication you require for your pet is available to purchase online at a cheaper price. Spotify to cut 6% of staff as tech sector prepares for possible recession Spotify has become the latest tech company to announce large scale lay-offs, with the streaming giant planning to cut 6% of its workforce.Working out at around 600 jobs, one of the people that wil lose their job is chief content and advertising business officer Dawn Ostroff. Spotify, which had about 9,800 full-time employees as of September, said it
expects to incur about €35m-€45m (£30m-£39.6m) in
severance-related charges.It joined tech companies in hiring aggressively during the COVID-19 pandemic, but since then the sector has seen a downturn in demand. Even the likes of tech giants Meta and Microsoft have been forced to shed thousands of jobs as a result. | Inflation |
Talbros Automative Shares Surge 19% To A Record After Rs 580 Crore Order Win
Along with a market share gain in both domestic and the export, the orders will also help in improving margin, it said.
Shares of Talbros Automative Components Ltd. surged over 19% to a record high on Monday after it received multi-year orders worth Rs 580 crore from domestic and overseas customers.
Commencing the next financial year, these orders are to be executed over the five years covering gaskets, heat shields, forgings, chassis and rubber hoses, according to an exchange filing.
Along with a market share gain in both domestic and the export market, the orders will also help the company in improving margin, it said.
Talbros' stock rose as much as 19.23% during the day to Rs 279.90 apiece on the NSE. It pared gains to trade 14.3% higher at Rs 268.35 apiece compared to a 0.08% decline in the benchmark NSE Nifty 50 as of 10:16 a.m.
It has risen 136.43% on a year-to-date basis. The total traded volume so far in the day stood at 11 times its 30-day average. The relative strength index was at 68.9. | Stocks Trading & Speculation |
Welcome back to The Interchange, where we take a look at the hottest fintech news of the previous week. If you want to receive The Interchange directly in your inbox every Sunday, head here to sign up! After a bit of a quiet period, things in the world of fintech picked up in a big way this past week. We wrote about some notable fundraises, how PayPal was hit with an antitrust lawsuit, how Bolt is trying to move on after an SEC probe, and much more.
Rainforest takes on the bigger players
It’s not every day that we’re pitched companies that feel like they are taking on bigger players in a really meaningful way. This past week, I wrote about Rainforest, an Atlanta-based startup that is taking on incumbents such as Fiserv and FIS, as well as trying to take market share from other fintechs such as Stripe with its offering. Rainforest works with software companies to help them embed financial services and payments into their platforms. In an interview with TechCrunch, CEO and co-founder Joshua Silver respectfully disagreed with a16z general partner Angela Strange about her 2019 statement that every company would become a fintech. In his view, most software companies don’t actually want to be fintechs and deal with all the regulatory and compliance issues that go with that. They really just want to be able to accept payments and generate more revenue from being able to do so.
Accel led the company’s $8.5 million seed round, which included participation from Infinity Ventures, BoxGroup, The Fintech Fund, Tech Square Ventures, and Ardent Venture Partners.
It’s always cool to see startups outside the coasts growing, and Silver’s confidence that what Rainforest is building will make it a formidable player in the space feels like it has merit. Founded in 2022, the startup has seen impressive growth in a short period of time, securing client commitments representing more than $500 million in processing, with much of the volume guaranteed.
Silver believes the company’s exclusive focus on software companies only gives it an edge.
“None of the modern processors were built specifically for software platforms. Most of them were built directly for merchants, and they’ve all had to retrofit their platforms even to accommodate basic payment processing and reporting functions for software companies,” he told TechCrunch.
As such, the startup is capturing volume as software platforms migrate from legacy processors such as Fiserv and FIS. As that happens, it competes against companies like Stripe (and its Connect product) to embed financial services and payments.
Nik Milanović of The Fintech Fund posted on X that he believes that one of the biggest stories of the next decade will be about Stripe, “which looks invincible from the outside, losing market share to nimble competitors.”
He added: “I think Rainforest is going to be a big part of that story.”
Meanwhile, Infinity Ventures’ Jeremy Jonker and former PayPal exec said he’s been in payments for 13 years and has “never before seen anything like Rainforest.” He told me via email that “Joshua’s background as a software platform founder and then as a payments consultant is a big part of the secret sauce. He’s lived the pain of payments himself, and you can’t underestimate the power of being in your clients’ shoes. He knew that taking on risk and compliance burdens, and offering features like data portability, would be hugely attractive to platforms. We also like that it’s not just him who has a wealth of payments experience — it’s the entire team he’s recruited to the company. Many are longtime payments and SaaS vets who knew there was so much potential for a better provider, and now they’ve built it themselves.”
Listen to TC+ editor Alex Wilhelm and I talk more about how there’s plenty of market share to go around in Friday’s episode of the Equity podcast below. — Mary Ann
PayPal is being sued for alleged “Draconian” payment policies
On October 5, Mary Ann broke the news that PayPal has been hit with a class action lawsuit by consumers represented by law firm Hagens Berman alleging that the fintech giant’s anti-steering rules stifle competition against lower-cost payment platforms such as Stripe and Shopify. Specifically, according to an investigation conducted by the firm’s consumer rights attorneys, PayPal has subjected consumers to excess charges when purchasing from online merchants that accept PayPal or Venmo.
Someone commented on social media that they didn’t see the problem with what PayPal is doing and questioned whether or not Visa and Mastercard do the same thing. So I went back to the attorneys who filed the lawsuit, who noted that the “anti-steering rules” are not the first of their kind. They said: “Visa and MasterCard once imposed similar anti-steering rules on merchants accepting their cards but, after the Justice Department sued the networks for antitrust violations, they agreed in 2010 to eliminate their anti-steering rules as part of the settlement. With payments transitioning into the digital realm, PayPal has simply ripped a page right from the Visa and MasterCard [sic] playbook.”
Meanwhile, Patrick McGahan, a partner at Scott+Scott who focuses on antitrust litigation, had an interesting take that actually involves both of those card giants. He told TechCrunch that the case illustrates that “the tensions between merchants and the payment system providers are not over, and that litigation regarding this key cost faced by merchants is likely to continue for some time.”
He added: “Platform companies that operate as gatekeepers in their market, such as PayPal, will continue to be the subject of antitrust litigation as a result of the significant fees they charge. PayPal’s fees are, however, driven by the costs imposed upon them by the dominant card schemes, Visa, Mastercard and American Express. So, we can expect PayPal will respond to this suit by arguing that it is as much of a price taker as the merchants themselves, and that the terms imposed upon it by the card schemes drive some of its anti-steering rules.”
PayPal did not respond to requests for comment. — Mary Ann
Bolt CEO gets frank about SEC probe
Bolt Financial CEO Maju Kuruvilla told me in an interview that the one-click checkout company is putting a recent U.S. Securities and Exchange Commission probe behind it and is moving on.
“It obviously is a very, very involved process, but we’re really happy to put that behind us,” Kuruvilla told TechCrunch. “We look forward to focusing on the momentum for the business and how we can help the retailers, especially the big retailers who are looking to us to innovate for them, because this is a tough year for retailers.”
You might remember that Bolt, which provides checkout technology to merchants, and its co-founder Ryan Breslow, were subpoenaed last year by the SEC to investigate whether the company violated any securities laws during fundraising in 2021 when Bolt was seeking its $355 million Series E round that valued the company at $11 billion.
The investigation took about 15 months, but news of that probe didn’t go public until July of 2023. Shortly thereafter on August 23, the SEC said, in a letter viewed by TechCrunch, it was not recommending an enforcement action for the company.
Kuruvilla spoke with me about how, exactly, the company can put something like this behind it, what it told customers and what’s next. Read more. — Christine
Weekly News
Banking-as-a-service startup Synapse confirmed Friday that it laid off 86 people, or about 40% of the company. The San Francisco–based company, which operates a platform enabling banks and fintech companies to easily develop financial services, has been open about past layoffs. In June, CEO Sankaet Pathak wrote in a blog post that the company had let go of 18% of its workforce as “the current macroeconomic conditions” had begun to impact its clients and platforms, affecting its anticipated growth. More here.
Visa plans to invest $100 million in companies developing generative AI technologies and applications “that will impact the future of commerce and payments,” Mary Ann reports. Visa Ventures head David Roff told TechCrunch that the fintech giant has “a lot of flexibility” with regards to how many investments it would make out of the new fund, and average check size. More here.
As reported by Manish Singh, “Indian unicorn fintech Slice is merging with North East Small Finance Bank after receiving the approval from the central bank, in an extremely rare feat that has eluded many tech giants, top financial startups and tycoons for decades. Slice — which earlier offered credit card–like cards and at peak issued over 400,000 cards in a month, more than any other fintech or bank — said the merger with the Guwahati-headquartered bank will allow the combined entity to better serve their shared mission and reach more consumers who currently lack access to basic banking services.” More here.
“CRED grew its operating revenue by a staggering 255% to $168.1 million in the financial year ending March as the fintech startup, which garners an unusually high level of attention, finds rising adoption of its lending and commerce offerings among India’s affluent individuals. The Bengaluru-headquartered startup had a total income of about $50 million in the financial year ending March last year and $11.4 million in the prior year. More here from Manish Singh.
Brex co-CEO and co-founder Henrique Dubugras chose the very picturesque island Fernando de Noronha in northeastern Brazil to be the location of four days of festivities around his marriage to software engineer Laura Fiuza, Brazilian publication Globo reported last week. Some 400 guests are reportedly attending the wedding, which led to the closing of the Forte dos Remédios — one of the island’s main tourist attractions — for more than a week, according to Globo. Parabéns, Henrique and Laura!
CB Insights also released its Fintech 100 list, made up of the “most promising 100 fintech startups of 2023.”
Other items we are paying attention to:
Funding and M&A
As seen in TechCrunch
Seen elsewhere
Logistics company Loop raises $35M to modernize the supply chain (Also, check out TechCrunch’s previous story on Loop.) | Banking & Finance |
- New York City mayor Eric Adams reportedly pledged to correct his annual financial disclosure form after failing to report his cryptocurrency holdings.
- When asked whether he held any security, including stocks, bonds, ETFs, mutual funds, or cryptocurrencies with a market value of $1,000 or more, the mayor responded "no" in his filing.
- A spokesman for the mayor told the Daily News on Thursday that Adams had omitted his stakes in bitcoin and ether, because he had misunderstood the question and believed it only referred to securities.
When asked whether he held any security, including stocks, bonds, ETFs, mutual funds, or cryptocurrencies with a market value of $1,000 or more, the mayor responded "no" in his filing. A spokesman for the mayor told the Daily News on Thursday that Adams had omitted his stakes in bitcoin and ether, because he had misunderstood the question and believed it only referred to securities.
Two top aides to the mayor both disclosed the exact amount of their bitcoin and ether holdings.
The mayor's office did not immediately respond to a CNBC request for comment outside of business hours. It is unclear how much Adams' crypto holdings are worth.
The mayor was quick to embrace cryptocurrency back in 2021 when he was fresh off an election victory and bitcoin was racing toward an all-time high of nearly $70,000 a coin. Since then, the world's largest cryptocurrency has slipped to trade around $31,500 amid the wider downturn in the digital asset market.
In November 2021, Adams said he planned to accept his first three mayoral paychecks in bitcoin. Even as the sector plunged to the depths of crypto winter in 2022, Adams remained bullish on crypto, telling the press that he had kept his investment in crypto.
Adams' pro-crypto platform was part of the politician's efforts to give Miami a run for its money as one of the country's top destinations for industry enthusiasts.
Miami mayor Francis Suarez's progressive crypto policies drew start-ups, venture firms, and crypto exchanges to Florida during the pandemic. Meanwhile, lawmakers in New York have enacted some of the country's most stringent and restrictive rules on the crypto industry.
In a similar disclosure by Suarez, the Miami mayor reported crypto holdings of $71,321 at the end of 2022, according to documents obtained by The Miami Herald via the county elections department. Suarez, who uses Jack Mallers' Strike wallet to accept his salary in bitcoin, also saw his net worth double to $3.4 million last year.
It is unclear whether Suarez converted some of his crypto holdings into fiat cash, since his annual salary is $130,000, or whether his mayoral income dwindled due to bear market pricing. CNBC reached out to Suarez's team but did not immediately hear back. | Crypto Trading & Speculation |
Public Debt Markets Just Got Their First Cyber-Catastrophe Bond
Long Walk Reinsurance Ltd. issued a $75 million bond to insure against a cyber-catastrophe event across its main underwriting units.
(Bloomberg) -- For the first time, a cyber-catastrophe bond has made its way into public debt markets.
Long Walk Reinsurance Ltd. issued a $75 million so-called cat bond, sponsored by Axis Capital, to insure against “a cyber-catastrophe event” across its main underwriting units, the Bermuda-based firm said Tuesday. The deal was oversubscribed, which “allowed us to tighten pricing,” said Peter Vogt, Axis Capital’s chief financial officer.
“We expect this transaction will serve as a template that the catastrophe bond market will use to support the availability of cyber insurance capacity in the years to come,” Vogt said in an interview.
The bond protects Axis and its subsidiaries against systemic cyber shocks over a two-year period, starting in January. In return for taking on that risk, investors in the bond stand to get an annual return of 9.75% above a US Treasury money market fund in which the collateral is invested.
The Long Walk 144A cyber-cat bond transaction was structured and distributed to investors by Aon Securities and involved risk-analysis modeling provided by CyberCube.
Read More: Cyber ‘Catastrophe Bonds’ Set to Test Public Debt Markets
Insurers have typically used catastrophe bonds to shield themselves from losses tied to extreme-weather events such as hurricanes or earthquakes. But as cyberattacks become more frequent and destructive, companies have started looking to cat bonds as a way to protect against increasingly uninsurable risks.
Read More: ICBC Hit by Cyberattack, Tells US Clients to Reroute Trades
In exchange for above-average returns, investors agree to take on significant risks, including the possibility that they can lose the money they put into the bond. They also have limited data around which to model loss probabilities. For that reason, cyber cat bonds have so far been limited to private debt markets, in which investors have more control over the terms.
The Long Walk cat bond will test demand for such products beyond the private markets. UK-based insurer Beazley Plc, which privately placed three cyber cat bonds this year, also is exploring moving into public markets, according to Artemis, a research firm specializing in insurance-linked securities.
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
Labour would create dozens of new quangos costing tens of millions of pounds as part of a “ballooning” in the size of the state, new analysis suggests.
The Tories have looked at Labour’s policy announcements in order to create a list of new arm’s length bodies planned by Sir Keir Starmer.
For example, the Labour leader has promised an Office for Value for Money which he said would “chase down every penny we spend”.
And Rachel Reeves, the shadow chancellor, has promised to launch a National Wealth Fund “so that when we invest in new industries, in partnership with business the British people will own a share of that wealth and the taxpayer will get a return on that investment”.
A new publicly owned clean energy company, Great British Energy, would also be set up to help pursue net zero.
Angela Rayner, the deputy Labour leader, has pledged an independent Integrity and Ethics Commission to “stamp out corruption in government, strengthen the rules and ensure they are enforced”, while a new quango, Skills England, would “oversee the national effort to meet the skills needs of the coming decade across all regions”.
Nick Thomas-Symonds, the shadow trade secretary, has said that a Labour government will create a “nationwide network of Climate Export Hubs” to “work with businesses, universities and other innovators, to take UK climate science innovations and export them to the world”.
And Steve Reed, the shadow justice secretary, is planning “community payback boards”, where victims of crime would oversee community sentences, choose the unpaid work to be done by offenders and make sure that sentences are carried out in full.
Over in health. Labour’s national “mission” to “build an NHS fit for the future” proposes a “mission delivery board”, which would have a role “akin to the Climate Change Committee”.
Plethora of proposed task forces
In other cases, it is unclear whether policies proposed by Labour constitute fully fledged arm’s length bodies or internal units within Whitehall.
For example, the party has promised a plethora of different task forces, including a National Cladding Taskforce, Illicit Finance Taskforce and a supply chain taskforce.
Elsewhere, the party is backing the creation of quangos that are already part of Tory Government policy, such as an independent regulator for English football. The Conservatives said that Labour’s policies reflected a “never-ending obsession with bureaucracy and ballooning the size of the state”.
It is unclear how much the new bodies would cost in aggregate, but the Tories pointed to the £3.9 million annual budget of the Office for Budget Responsibility – the watchdog upon which the Office for Value for Money is based – as an indication of the cost of individual quangos.
‘Hell bent’ on having millions of officials
Commenting on the Office for Value for Money, Greg Hands, the Tory chairman, said: “This is classic Labour – proposing to set up an entire government agency to do what the Cabinet should be doing - looking after taxpayers’ money.”
He went on: “They are incapable of making a decision – or sticking to one – which is why they are hell bent on having millions of officials to rely on to stuff government with process, process, process.”
Mr Hands added: “The Conservatives streamlined government after Labour last left office – saving taxpayers’ billions of pounds helping us deliver on our priorities to halve inflation, grow the economy, reduce debt, cut waiting lists and stop the boats.”
According to the Cabinet Office, there are currently 295 arm’s length bodies, accounting for over £220 billion of taxpayer’s money.
The Tories have repeatedly pledged to reduce the size of the state.
In last summer’s leadership contest, Rishi Sunak’s campaign promised to “demand greater savings from quangos”, while his rival Liz Truss took aim at “too many bureaucratic bodies” which she claimed were diverting money from frontline services.
A Labour Party spokesperson said: “This is a laughable attack from a party that cannot defend its own track record, has no solution to the cost of living crisis and apparently now cannot even do their own sums properly.
“Labour’s plans will tackle the dysfunction and waste that have set in after 13 years of Tory rule. For too long, working people have paid the price for their failures.
“Labour will use existing resources better to tackle the long-term problems we face as a country while investing in the industries of the future, ending the sticking plaster politics of this Conservative government and saving taxpayers money.” | United Kingdom Business & Economics |
Binance.US, the U.S. affiliate of cryptocurrency exchange Binance, announced that it would halt dollar deposits and urged customers to withdraw their funds by Tuesday following a request from the U.S. Securities and Exchange Commission (SEC) to freeze its assets. Reuters reports: Binance.US, the purportedly independent partner of Binance, said in a tweet on Thursday that its banking partners were preparing to stop dollar withdrawal channels as early as June 13. The SEC sued Binance, its CEO and founder Changpeng Zhao, and Binance.US's operator on Monday, in a dramatic escalation of a crackdown on the industry by U.S. regulators. The SEC sued major U.S. exchange Coinbase a day later.
Binance.US said in the tweeted customer notice that it would no longer accept dollar deposits as part of plans to change to a "crypto-only exchange". It called the SEC's civil charges "unjustified" and said it would "vigorously defend" itself. The SEC alleged in 13 charges on Monday that Binance had in a "web of deception" artificially inflated trading volumes and diverted customer funds, as well as failing to restrict U.S. customers from its platform. The SEC on Tuesday asked a federal court to freeze Binance's U.S. assets. Binance.US called the motion "unwarranted", saying it had addressed SEC concerns over the safety of customer assets.
The SEC said it had not received "sufficient reassurance" that Binance.US's customer assets were controlled by its operator, BAM Trading, "rather than under the control or influence of Binance or Zhao, a person who has openly expressed his desire to avoid compliance with U.S. law." Zhao and Binance had "free reign" to handle Binance.US assets, the SEC said. "They have exercised this control over U.S. investor assets with no oversight or controls to ensure that those assets are properly secured," it added. . It has said it would "defend our platform vigorously," saying the SEC was limited in reach as Binance was not a U.S. exchange. Binance.US's customer assets total more than $2.2 billion held in crypto and some $377 million in U.S. dollar bank accounts, the SEC said.
Binance.US said in the tweeted customer notice that it would no longer accept dollar deposits as part of plans to change to a "crypto-only exchange". It called the SEC's civil charges "unjustified" and said it would "vigorously defend" itself. The SEC alleged in 13 charges on Monday that Binance had in a "web of deception" artificially inflated trading volumes and diverted customer funds, as well as failing to restrict U.S. customers from its platform. The SEC on Tuesday asked a federal court to freeze Binance's U.S. assets. Binance.US called the motion "unwarranted", saying it had addressed SEC concerns over the safety of customer assets.
The SEC said it had not received "sufficient reassurance" that Binance.US's customer assets were controlled by its operator, BAM Trading, "rather than under the control or influence of Binance or Zhao, a person who has openly expressed his desire to avoid compliance with U.S. law." Zhao and Binance had "free reign" to handle Binance.US assets, the SEC said. "They have exercised this control over U.S. investor assets with no oversight or controls to ensure that those assets are properly secured," it added. . It has said it would "defend our platform vigorously," saying the SEC was limited in reach as Binance was not a U.S. exchange. Binance.US's customer assets total more than $2.2 billion held in crypto and some $377 million in U.S. dollar bank accounts, the SEC said. | Crypto Trading & Speculation |
Inflation has hit levels not seen in 40 years, and Americans' wallets are feeling the strain.
Prices are rising on everything from energy to food to shelter, costing the average American household an additional $327 per month, according to a Moody's Analytics analysis. That's higher than last month's estimate of $296 per month.
The latest figure is based on the Consumer Price Index's 8.5% year-over-year rise in March. The index measures a basket of goods and services.
Food rose 1% from last month and 8.8% over the last 12 months, while gasoline jumped 18.3% since February and 48% from last year.
However, there is some good news, according to Moody's Analytics' senior director of research, Ryan Sweet, who conducted the analysis.
"Our forecast is that March was the peak for year-over-year growth in inflation and that it will gradually moderate," he wrote.
Yet it's expected to take some time for inflation to cool off. With that in mind, here are things you can do now to try to mitigate that $327 monthly dent in your budget.
Since prices are increasing so frequently, it's a good idea to review and reassess your budget on a weekly basis, said money expert Sahirenys Pierce, founder of personal finance blog Poised Finance & Lifestyle.
"You want to be aware of where all of your money is going and give yourself the opportunity to lower another area of your budget to make the numbers work," she said.
One way to lower your costs is to cut out things you don't need, such as subscription services. You can also try negotiating to lower bills like your cable bill or car insurance, suggests Misty Lynch, a certified financial planner with Walpole, Massachusetts-based Sound View Financial Advisors.
Save on energy by unplugging appliances when they are not in use or using power strips with switches that allow you to completely turn off the products plugged into it. By doing so you could save 5% to 10% of your residential energy use, according to the Department of Energy. Turning down the heat can also help save money.
To save on gas, be strategic about the use of your car. If you have to run errands, do them in one trip and at a time when there is not a lot of traffic, Lynch suggests.
When grocery shopping, be armed with a meal plan for the week that's already in place.
"It does help people save money if they know what they are going to eat and stick with it," Lynch said.
Pierce likes apps such as Flipp to look up grocery store ads. She creates a meal plan for the week that incorporates items that are on sale and prepares three of those meals on Sunday. Having a plan in place for the remaining days of the week helps her avoid picking up takeout or fast food.
"This strategy has helped my family save hundreds of dollars during our debt-free journey, the pandemic and now during times of high inflation," Pierce said.
If you don't need a specific brand item, you may save money at a discount grocery store. Buying items in bulk in a warehouse store, like Costco or BJ's, may help you avoid future price hikes.
To comparison-shop, look at a product's unit price, which is essentially the cost per unit of a particular product. For instance, canned goods may be priced per ounce and paper goods may be priced by sheet or feet. So while a product may seem cheaper at first, it may not be the best deal because it has fewer units than a higher-priced item.
Use coupons in-store and online. You may get them as part of a retailer's reward program or credit card. Meanwhile, browser extensions such as Rakuten and Honey automatically search for coupon codes and apply them at checkout when you shop online.
It might be tempting to ride out the storm by accumulating credit card debt. Don't do it, said Dawit Kebede, senior economist at the Credit Union National Association.
Credit card interest rates are already high, clocking in at an average of 16.26%, according to CreditCards.com. They are expected to rise as the Federal Reserve continues to hike interest rates this year to help contain inflation.
The worst thing that people saving for retirement can do is stop putting money aside to help pay for increased costs now, Lynch said.
"Twenty years from now, things are going to be twice as expensive," she said. "Don't stop investing."
"It is one of the only ways that has been proven to fight inflation."
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns. | Inflation |
How much is a pint of milk? It’s a question that has long been used by journalists to test whether politicians have any sense of the budgetary constraints of the people they govern. If you know the price of milk then you have had to think, at some point, about whether you can afford it. In 2012, David Cameron and George Osborne were described by Nadine Dorries (then a publicity-hungry backbencher) as “two posh boys who don’t know the price of milk”; Cameron later began carrying a crib sheet of prices in an attempt to appear in touch. In a 2013 interview Boris Johnson flunked the milk question (“I can tell you the price of a bottle of Champagne,” he later retorted) and Rishi Sunak struggled with the same question in 2021.
The milk question is becoming harder to answer because prices are changing very rapidly. This morning’s new inflation figures show that the cost of the goods and services in the consumer price index (CPI) are still growing at a very high rate of 10.1 per cent, but still more worrying is that food price inflation is at its highest level for more than 45 years, with prices rising by 19.2 per cent in a year.
Milk is one of the fastest-growing prices in the inflation basket: milk price inflation was 38.4 per cent in the year to the end of March. Prices hit 95p a pint before the “spring flush” – higher milk supply generated from cows newly released into pasture – prompted supermarkets to make a 5p price cut last week.
There’s a clearly intelligible story about why milk prices have risen: inflationary pressures have emerged from multiple sources. Labour is more expensive and input costs are higher – the cost of ammonium nitrate fertiliser more than doubled from August 2021 to August 2022, although it has now fallen back below pre-Ukraine war levels. Plot a graph of factory-gate milk prices against retail prices and you get what looks like a straightforward narrative: a hump in the prices charged by suppliers, followed by a hump in the prices charged in shops.
However, plot a graph of the price difference between the factory gate and your fridge, and a different story emerges. The mark-up on milk remains fairly static and then rises precipitously, as retailers make the most of the fact that consumers expect – and for the moment, tolerate – rising prices.
Paul Donovan, chief economist at UBS Global Wealth Management, says this is causing a third wave of inflation: first came the massive increase in demand for durable goods after the lockdown periods, as people spent their pandemic savings; next came the dramatic spike in energy costs caused by the war in Ukraine; and now, with those events present in consumers’ minds, businesses across the economy have a “convincing story” to tell about why prices must rise.
“With the milk price,” Donovan told me, “you have a genuine cost increase – the farm-gate milk price has risen – but the point about profit-led inflation is that you pass on a genuine cost increase, and then you expand your margin on top of it. And that’s what does appear to have been happening.”
This may not always be evident in the profits of large companies, which can use a period of profit-driven inflation to absorb other costs. Nor is it solely the work of giant supermarkets. “Large companies are involved in this,” says Donovan, “but the small corner-shops are also ramping up prices, because they can get away with it… the grandmother in the back kitchen is just as capable of price-gouging as a large company.”
Some of the narrative used to justify price rises is flatly untrue, says Donovan, such as the idea that wage rises are contributing to inflation: “No one’s facing real higher labour costs. Real wages have been catastrophically negative for two years.”
Such narratives can only last for so long, however. “A period of profit-led inflation works when consumer demand is stable,” says Donovan. “You can trade on the loyalty of your customers for a while, as long as you can convince your customers that you're really raising prices for reasons beyond your control.”
One way in which the government could intervene would be to address the facts about the drivers of inflation more frankly. This is happening in other countries, such as the US and Sweden, where competition regulators are investigating companies’ use of their market power to inflict “greedflation” on the economy. But George Dibb, head of the Centre for Economic Justice at the Institute for Public Policy Research (IPPR) think tank, says that while the UK’s competition regulator is investigating price-gouging by petrol stations, “we haven’t had the same focus on corporate profits in this country compared to the US or the EU. The attention is much more on wages than profits, even though the data would indicate that wages are not driving inflation right now.”
Dibb says that in practice the “first line of defence” against greedflation has to be the welfare system, because steep rises in the prices of basic foods such as milk are felt most seriously by people on low incomes. But the windfall taxes levied on energy companies could also provide a model, “where there is a strong evidence of windfall profits, the government can legitimately take action to recoup some of those excess profits… It is hard to argue it’s fair for supermarkets to be growing their profit margins at a time that people can't afford food.” | Inflation |
The latest Federal Reserve study revealed a concerning trend among American households, particularly those outside the wealthiest 20%, according to a Bloomberg report. Since the onset of the COVID-19 pandemic, they have depleted their extra savings and have less liquid assets than they had before the pandemic began. If this is you, consider speaking to a financial advisor.
As of June, the bottom 80% of households by income, when adjusted for inflation, had lower bank deposits and other liquid assets compared to their status in March 2020. The decline marks a significant shift from the initial phases of the pandemic, where various factors, including government financial support and restricted spending opportunities during lockdowns, led to an accumulation of excess savings.
The Federal Reserve, along with Bloomberg calculations, identified a rapid drawdown of these excess savings, particularly stark among the lower-income groups. While all income groups have experienced a decrease in real-term cash balances from the peak in 2021, the disparity is noteworthy. The wealthiest one-fifth of households still have cash savings approximately 8% above their pre-COVID levels. In stark contrast, the poorest two-fifths have witnessed an 8% decrease, and the next 40% — broadly representing the middle class — have seen their cash savings fall below pre-pandemic levels.
This situation indicates a dwindling financial buffer for the majority of U.S. consumers. Their spending has been a driving force in keeping the economy active and averting a widely anticipated recession. But as these households’ financial reserves deplete, concerns about an impending economic downturn are resurfacing. The Federal Reserve Bank of San Francisco predicts that the aggregate stock of excess savings will likely be exhausted in the current quarter.
Despite these challenges for individual households, the overall household net worth in the U.S. surged by approximately $5.5 trillion in the April-June period, reaching a record high. This increase, primarily driven by housing market gains and stock market upticks, reflects a wealth accumulation that predominantly benefits wealthier households, who are more likely to own stocks and real estate.
Take Action: Locate a financial advisor near you, for free.
Compared to previous recessions, the large-scale government support and enforced savings during the pandemic initially boosted Americans’ financial standing. This increase in disposable income contributed to a rapid economic recovery. As these extra savings are exhausted, the long-term sustainability of a recovery is becoming uncertain, especially for those not in the top income bracket.
What can people do to navigate these challenging times if they aren’t part of the 20%? The key to maintaining financial stability lies in a combination of prudent budget management, strategic debt reduction and wise investment choices.
Creating and adhering to a budget is crucial. It’s not just about tracking expenses but understanding where your money goes and identifying areas where you can cut back. This exercise helps in reallocating resources to more critical areas, such as building an emergency fund. An emergency fund, even if modest, can be a lifesaver in times of unexpected financial needs.
Tackling high-interest debt, particularly from credit cards, is essential. These debts can rapidly escalate, consuming a significant portion of your income. Paying them off should be a priority, and if needed, seeking financial advice for debt management can be beneficial.
Investing in traditional stocks is a common choice, but exploring alternative investment options like startups can offer the potential for substantial long-term gains. Of course, such investments carry risks and require careful research or consultation with financial experts.
Diversifying income sources, reducing non essential spending and staying informed about government assistance programs are also crucial steps in this journey toward financial stability.
Finding ways to supplement income through part-time jobs or freelance work can provide extra financial cushioning. Staying informed about government assistance programs and tax benefits is another avenue to explore for potential financial relief.
Educating oneself on financial management and investment strategies is invaluable. The more you understand about personal finance, the better equipped you are to make informed decisions that can positively impact your financial health.
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This article 80% Of American Households Are In A Worse Financial Position Now Than They Were Before The COVID Pandemic Hit — What You Can Do To Keep Your Head Above Water originally appeared on Benzinga.com
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© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved. | Personal Finance & Financial Education |
Chancellor Jeremy Hunt has insisted he did not make "crowd-pleasing" tax cuts as giveaways ahead of the next general election in his Autumn Statement.
Mr Hunt used Wednesday's statement to announce a £10bn National Insurance cut for millions and an uplift in benefits.
The Conservatives claimed they had delivered the biggest tax cuts in decades in a move to boost the UK's stagnant economy and top up incomes.
But the UK's overall tax burden is still on course to hit a record high.
The percentage of the nation's income being paid in tax is set to rise to its highest level in 80 years, according the Office for Budget Responsibility (OBR).
Speaking to the BBC, Mr Hunt denied the Conservatives were being "dishonest" about the UK's tax burden.
Mt Hunt said "contrary to speculation" about a spring general election, "we didn't choose the crowd-pleasers, the inheritance tax or income tax cut".
The chancellor argued he instead chose "tax cuts that are going to help businesses" and stimulate economic growth.
More on the Autumn Statement
The promise to cut National Insurance for millions at the beginning of January, rather than by April as is standard after an Autumn Statement, has fuelled speculation of a potential May election.
The next general election must be held before the end of January 2025, but the prime minister can call it earlier.
Conservative MPs were generally pleased with the Autumn Statement but privately few think it will be enough to narrow the gap with Labour.
"It's good to finally see tax cuts. I think Jeremy has handled the last year really well. But it's not going to be enough to shift the dial," one minister said.
Another Conservative MP said: "I think the chancellor made the right decisions with the money he had available. But there's going to have to be a lot more tax cuts in the budget for us to go into the election with."
For weeks before the Autumn Statement, Mr Hunt had repeatedly insisted that tax cuts were "virtually impossible" given the dire state of the nation's finances.
But in his statement, Mr Hunt said he had decided to cut some taxes because inflation - the rate at which prices go up - had eased and forecasts showed reduced borrowing.
In a decision affecting 27 million people, the chancellor said he would cut the main rate of National Insurance from 12% to 10% from 6 January.
The chancellor said the reduction "means someone on the average salary of £35,000 will save over £450 a year".
Labour has backed the chancellor's National Insurance reduction, but say workers will be paying more tax at the next election than the last.
Labour's shadow chancellor Rachel Reeves she was "under no illusions about the scale of the challenge" facing her if Labour won the next general election.
She said a Labour government would have made different choices in the Autumn Statement, including putting more money into the NHS by abolishing the non-dom tax status, and reforming to the planning system.
Ms Reeves said the Autumn Statement did not "remotely compensate for the tax increases" already announced by the government.
Mr Hunt's decision last year to freeze the level of income at which workers start paying National Insurance means millions will be dragged into paying higher rates or be forced to pay the tax for the first time.
The Autumn Statement's £20bn of tax cuts compare to about £90bn being raked in by tax changes announced last year, according to the Resolution Foundation think tank.
The think tank says tax as a share of GDP is forecast to rise by 4.5 percentage points between 2019-20 and 2028-29 - the highest level in 80 years.
Richard Hughes, the chairman of the OBR, said the chancellor was able to cut certain taxes because he had not changed spending plans for public services.
Mr Hunt said "of course" taxes were going up to pay down debt built up during the pandemic and following the spike in energy prices driven by the war in Ukraine.
"But yesterday I did make a start in bringing down the tax burden," Mr Hunt said. "I've never said that we were going to get there all in one go."
Other Autumn Statement announcements included:
- Confirmed the "full expensing" tax break - allowing companies to deduct spending on new machinery and equipment from profits - would be made permanent
- Set out stricter welfare rules for unemployed people and those with disabilities who are judged to be not doing enough to find work
- Increased the minimum wage by more than a pound to £11.44 per hour from April next year
- Froze alcohol duty until August next year, with no increase in duty on beer, cider, wine or spirits
- Increased tobacco duty by 2% above inflation, with the duty on hand-rolling tobacco to rise an additional 10% above inflation
In its economic analysis of the chancellor's plans, the OBR slashed the UK's growth forecasts for the next two years, to 0.7% in 2024 and 1.4% in 2025.
The financial watchdog also said living standards would not return to pre-pandemic levels until 2027/28.
The reason for this, the OBR said, is that inflation is expected to "remain higher for longer", returning to its 2% target in 2025, a year later than forecast in March. | United Kingdom Business & Economics |
Another 40 bank branches will be lost from the UK's high streets after Lloyds and Halifax announced yet more closures.Lloyds Banking Group is to close 18 Halifax sites and 22 Lloyds branches between April and June this year, with all but one of the closures being in England. The new closures will bring the total number of Lloyds outlets in the country to 693, and Halifax branches to 518. The group said the branches selected for closure have seen visits drop by about 60 per cent on average in the last five years. The move is yet another hammer blow for Britain's beleaguered high streets, with banks and building societies having closed or planning to close more than 5,000 branches since January 2015, at a rate of 54 each month on average. Britons are also continuing to grapple with a cost of living crisis brought on by sky-high energy prices and an inflation spiral that is only just starting to abate. Responding to the announcement, Age UK's charity director Caroline Abrahams said elderly customers risk being 'cut adrift' from banking services and banks should be doing 'everything they can' to ensure 'essential' services continue to be provided.And Tory MP Alexander Stafford branded the move an 'absolute disgrace', saying Lloyds has a 'duty of care' to local communities. The number of people using in-person services at banks has been falling for years as more and more turn to online banking. This increased during the pandemic as those who relied on bank branches were forced to learn how to bank from home.But branches are still vital for the vulnerable, elderly and anyone needing face-to-face advice. The South East has seen the biggest drop in branches since 2015, with 704 having been shuttered before the latest announcement.Barclays has closed 149 outlets in the region, with 114 Natwest branches and 129 Lloyds outlets also gone - before the further closures by Lloyds announced today. Scotland was the first part of the UK to see more than half its banks close, according to consumer rights group Which?.Royal Bank of Scotland has closed 160 branches in Scotland since 2015, and Bank of Scotland has shut 128. The latest announcement brings the total number of bank branch closures to 64 this year. > Are you about to lose your bank branch? Check our interactive map Earlier in the month TSB announced it would be shutting nine sites, and Barclays named 15 for closure.A Lloyds Banking Group spokesman said: 'Branches play an important part in our strategy but we need to have them in the right places, where they are well used.'We'll continue to invest in branches that are being used regularly, alongside our online, mobile app and telephone services.' This chart shows how branches of big six banks declined between 2014 and last year According to the Financial Conduct Authority (FCA), the UK had an average of 2.3 branches per 10,000 inhabitants in 2012. Five years later, this had decreased to 1.47, a drop of 27 per cent This branch of Lloyds, in Beckenham, south-east London, will close on April 20The bank branches that will close include 18 Halifax sites in Golders Green, north London, Maldon, Essex, and Bletchley, Buckinghamshire, among others.The 22 Lloyds branches include those in Dagenham, east London, Ipswich, Suffolk, Twickenham in south-west London and Harrow in north-west London.The only site not in England is Halifax's Bangor branch in Wales.All the branches are within a third of a mile of at least one free-to-use cashpoint and a Post Office, the group said.The closures will not lead to any job losses, it added.Responding to the news, Mr Stafford, the MP for Rother Valley, said: 'It is an absolute disgrace that they are cutting this essential life line off from our streets with such little notice.'Lloyds has a duty of care to the local community and this will further damage high streets and local businesses. I urge them to rethink their decision and help support great British High Streets.' Age UK's Ms Abrahams said: 'Access to face to face banking is becoming more and more restricted, as this latest news highlights. 'With swathes of local branches closing and others adopting reduced hours it's creating real problems for older people who are unwilling or unable to bank online, or who would simply like the choice of being able to walk into a bank and talk to someone if they have a query. Having often been loyal bank customers for many years, older people are entitled to feel aggrieved that a normal part of their everyday life - the opportunity to visit their local bank - is disappearing for commercial reasons, when it would be much easier for them if it was to remain.'The rapid move towards online banking over the past few years has caused significant problems for many older customers, particularly those with visual impairments and poor dexterity. These difficulties are exacerbated when branch closures coincide with poor public transport locally, a lack of ATMs, substandard internet service and mobile black spots, making it increasingly difficult for customers to access their money.'The recent announcement by the banks about how they will protect cash through shared banking hubs, Post Offices and community cashback is welcome. 'However, some customers are still at risk of being cut adrift and the banks should do everything they can to ensure the continued provision of essential banking services for years to come.'The Daily Mail revealed last month how Britain's five biggest banks have closed more than half their branches since 2015. Lloyds, Barclays, NatWest, HSBC and Santander had a combined total of 7,553 branches in 2015.Critics slammed the closures because in many areas they have left swathes of society with little access to banking services - such as cash withdrawal. HSBC, which has reduced its branch network from around 1,070 to 327, has closed 69 per cent of its UK branches. Barclays has shut 67 per cent and NatWest 64 per cent. Last November, HSBC announced it will begin closing 114 branches from this April.They said the outlets are serving fewer than 250 people a week, confirming its remaining network will total 327 after the new wave of closures.NatWest also said last year that it will close 43 branches this year, including in Coventry, Cheltenham, Tonbridge and Kent. The closures started this month and will continue until March.The South East has seen the biggest fall in branches since 2015, with 704 having shuttered before the latest announcement.Barclays has closed 149 outlets in the region, with 114 Natwest branches and 129 Lloyds outlets gone - before the further closures for Lloyds announced today. Scotland was the first part of the UK to see more than half its banks close, according to Which?.Royal Bank of Scotland has closed 160 branches in Scotland since 2015, and Bank of Scotland has shut 128. Which?'s data also showed that Wentworth and Dearne, in South Yorkshire, holds the unwanted title of being the first parliamentary constituency to have lost 100 per cent of its banks.Nearby Sheffield Hallam has now also lost all of its banks since 2016.Areas such as the rural constituency of Arundel and the South Downs, in West Sussex, have also lost most of their banks since 2016.The upmarket market town, home to Arundel castle, the seat of the Duke of Norfolk, lost its last bank, a Lloyds branch, six years ago.The constituency of Erith and Thamesmead in East London also lost all of its remaining banks. Barclays pulled the last bank in the constituency in February 2021.Other areas to suffer big losses in bank branches in the last six years include South Devon, a large, mostly rural, constituency, which has lost 87.5 per cent of its banks in the last six years. This branch of Halifax, in Park View, Whitley Bay, will close on June 21Other areas to feature high on the list by Which? include the Wirral West (87.5 per cent decline since 2016) and nearby Liverpool West Derby (100 per cent decline since 2016).But while rural areas and those in the north-west were among the biggest losers in terms of bank branch losses, city areas and upmarket towns saw the smallest decline.Walthamstow in London lost just 11 per cent of its banks according to Which?, while Carshalton and Wallington saw a 14.3 per cent decline.Outside of cities, Banbury in Oxfordshire saw a 10.5 per cent decline, while Sittingbourne and Sheppey, in Kent, saw a decline of just 7.7 per cent.But West Bromwich East, in the Midlands, was the only constituency not to see any decline. The area still has branches of all of the major banks, including Halifax, Santander, Lloyds, Natwest, TSB, Barclays and HSBC.As well as the closures of banks, an increasing number of outlets are rejecting cash. ATM network Link recently found that nearly half (45 per cent) of the public had been somewhere where cash has not been accepted, or has been discouraged. Trade association UK Finance's figures show that 1.1million people mainly use cash when doing their day-to-day shopping. The shift to digital payment is happening despite previous warnings that moving cashless could leave the UK vulnerable to malicious actors online. > Five of the best bank accounts to switch to: This is Money's pick of the top deals | United Kingdom Business & Economics |
Former Prime Minister David Cameron has said it was a "mistake" not to consider different types of diseases when preparing for future pandemics.
Giving evidence to the Covid Inquiry, Mr Cameron said "group think" meant his government did not focus enough on pandemics other than flu.
He also denied that his government's austerity policies damaged the UK's ability to cope with Covid.
The inquiry is currently considering preparedness ahead of the pandemic.
George Osborne and Jeremy Hunt, the chancellor and health secretary under Mr Cameron, will give evidence to the inquiry later this week.
Questioned by the inquiry's lawyer Kate Blackwell KC, Mr Cameron said: "Much more time was spent on pandemic flu and the dangers of pandemic flu rather than on potential pandemics of other, more respiratory diseases, like Covid turned out to be.
"This is so important - so many consequences followed from that."
The Conservative former leader said that on becoming prime minister he had sought to improve the UK's planning for risks by changing government structures, including by setting up a National Security Council.
However, he added that there was "always a danger of group think - perhaps that is what is happening here".
"I think the failing was not to ask more questions about asymptomatic transmission."
Mr Cameron was also asked about Exercise Alice - a hypothetical scenario exploring how government departments would cope with an outbreak of the Mers respiratory coronavirus.
He said a report following the exercise included useful suggestions on creating stockpiles of PPE (personal protective equipment) and added: "If you're asking does it look like failures to follow through from this I think there answer is yes."
During the hearing, Mr Cameron was pressed on whether his austerity policies hampered the UK's resilience when facing the pandemic.
Writing in a blog ahead of the hearing, British Medical Association council chairman Phil Banfield said politicians in Mr Cameron's government should be "taken to task over the decisions they made that left us so unprepared".
He argued that cuts to spending and a re-organisation of the NHS meant the health service did not have enough staff or beds.
And at a hearing held last week, Sir Michael Marmot, a professor of epidemiology at University College London told the inquiry that the UK had entered the coronavirus pandemic with "depleted" public services.
Mr Cameron said he didn't accept that description and defended the austerity drive overseen by his government.
He said it was needed to get the public finances in order and without doing so there would have been less money for the NHS.
"Your health system is only as strong as your economy - one pays for the other."
He also pointed out that while other public services were cut, the NHS was actually protected by his government.
During his premiership, the NHS budget rose by an average of 1% to 2% after inflation.
However this compared to an average of 4% during the rest of the health service's history - so while the budget did rise it still represented a squeeze.
And it is a major reason why waiting times have worsened and the UK has fewer staff and beds per head than many other western European countries.
But what was not protected was other areas of health spending, such as training and public health.
However, it is worth noting the Conservatives were not alone in advocating this approach - at both the 2010 and 2015 elections Labour was not promising significantly more for the NHS.
What is the UK Covid-19 inquiry?
- It is about going through what happened and learning lessons
- No-one will be found guilty or innocent
- Any recommendations made do not have to be adopted by governments
- The inquiry has no formal deadline but is due to hold public hearings until 2026
- Scotland is holding a separate inquiry in addition to the wider UK one | United Kingdom Business & Economics |
Emergency measures to help run Birmingham City Council during its financial crisis have been announced by the government.
Commissioners are to be appointed to oversee the effectively bankrupt authority.
Levelling Up secretary Michael Gove told the Commons senior leadership figures in Birmingham had "harmed the city".
A local inquiry is also set to be launched, he said.
The council is facing the prospect of a £760m bill to settle equal pay claims.
It has also warned the bill is increasing by £5m to £14m each month.
"Poor leadership, weak governance, woeful mismanagement of employee relations and ineffective service delivery have harmed the city," said Mr Gove in Parliament.
"I do not take these decisions lightly, but it is imperative in order to protect the interests of the residents and taxpayers of Birmingham, and to provide ongoing assurance to the whole local government sector."
The commissioners would "exercise certain functions of the council", he said, with the inquiry set to consider "the more fundamental questions of how Birmingham got to this position".
The city's Labour leader, John Cotton, had previously said he had met Mr Gove and was having ongoing communication with his department and the Local Government Association as the authority recognised its challenges and a need for assistance to address them.
But a government source told the BBC the scale of difficulties was "much worse than thought" and accused the authority of failing in its basic duties.
The council is also facing a projected deficit of £87m in this year's budget.
As a result of the inability to balance the books, it earlier this month announced that all new spending would cease, although services it had a statutory duty to provide - including education, social care and waste collections - would continue.
Two months before the issuing of that Section 114 notice, which formally outlined the constraints, the council said it had taken the decision to stop spending on all "non-essential" services. What those are have yet to be announced.
An extraordinary general meeting of the full council is due to be held next Monday to discuss a financial recovery plan.
In a report released ahead of it, chief executive Deborah Cadman said work to address problems "must be urgent, will involve hard choices about what we deliver and how we operate and will result in a smaller organisation".
What is a Section 114 notice?
- Under the Local Government Finance Act 1988, if a council's chief financial officer believes the authority cannot meet its expenditure commitments from its income, they have to issue such a notice
- They do not need the consent of councillors to do so
- Local authorities in the UK cannot go bankrupt but the issuing of the notice is often described as "being effectively bankrupt", meaning they cannot make new spending commitments and must meet within 21 days to discuss next steps
- No new expenditure is permitted with the exception of funding statutory services, including safeguarding vulnerable people, but existing commitments and contracts will continue to be honoured
- Most councils in such a position pass an amended budget, reducing spending on services
- Thurrock, Croydon, Slough and Northamptonshire have issued section 114 notices in recent years
(Source: House of Commons Library)
On Monday, the council's chief executive wrote to staff to say the authority had been in "constant discussion" with the government.
"I will make sure I let you know when there is an update to share," she added.
The council is set to formally ask the government for "exceptional financial support", likely to take the form of permission to borrow money to service debt, or sell assets, such as buildings and land, to raise cash to deal with its financial liabilities.
This has led to speculation over which assets could go.
Prof Tony Travers, visiting professor in the London School of Economics' Department of Government, said selling off assets "would not provide money immediately to relieve 'annual' budget pressures".
But he said the government had in the past allowed Birmingham to "capitalise" spending earmarked for equal pay, meaning the council could use the money from asset sales to cover such liabilities.
Councillor Robert Alden, leader of the Conservative opposition in Birmingham, said residents deserved better and called for more transparency from the authority over equal pay claims.
The Labour administration had "failed to get a grip" of the issue, he said.
"The problem is the council hasn't listened; they haven't listened to the opposition, they haven't listened to the officers, they haven't listened to the auditors and they haven't even listened to the trades unions who have all been raising concerns with them because they have put their heads in the sand instead of facing up to the mess they've made." | United Kingdom Business & Economics |
Finance Commission Expected To Be Constituted By November End: Finance Secretary
It suggests the ratio in which tax is to be divided between the Centre and states for five years from April 2026.
The government is expected to constitute the 16th Finance Commission by end of November, Finance Secretary TV Somanathan said.
Finance Commission is a constitutional body that gives suggestions on Centre-state financial relations.
It suggests, among other things, the ratio in which tax is to be divided between the Centre and states for five years, beginning April 1, 2026.
"The Finance Commission is expected to be constituted by end of November because that's the statutory requirement," he told PTI in an interview.
The Terms of Reference for the commission is being finalised, he said.
The previous Finance Commission submitted its report on Nov. 9, 2020, for the five fiscals—2021-22 to 2025-26—to the President.
The 15th Commission under NK Singh had kept the tax devolution ratio at 42%—at the same level suggested by the 14th Commission.
The central government accepted the report of the commission, and accordingly, the states are being given 42% of the divisible tax pool of the Centre during the period 2021-22 to 2025-26.
The 15th finance commission's recommendations include the fiscal deficit, debt path for the Union and states, and additional borrowing room to states based on performance in power sector reforms.
As per the glide path for fiscal consolidation, the government aims to bring down the fiscal deficit to 4.5% of gross domestic product by the 2025-26 fiscal.
For the current fiscal, the deficit is projected at 5.9% of GDP, lower than 6.4% in the last fiscal ended March 31, 2023.
He also said the government will stick to the fiscal deficit target of 5.9% of the GDP as robust tax, non-tax collections will help meet the spending requirement and make up for any shortfall in disinvestment proceeds.
Although there would be a shortfall with respect to disinvestment, he said, this shortfall would be met by non-tax revenue mobilisation.
"Disinvestment target is unlikely to be met. However, I would say in aggregate the collective amount between disinvestment and non-tax revenue is likely to be very close to the budget," he said.
The total of disinvestment receipts, plus non-tax receipts are likely to be very close to the Budget Estimates, he said.
"We expect to adhere to our fiscal deficit target this year.... None of the events so far have caused anything for us to deviate from it," he said.
The government has already got a higher dividend from the Reserve Bank of India and expects higher dividends from public sector banks and other PSUs than estimated in the budget.
The RBI in May approved a Rs 87,416-crore dividend payout to the central government for 2022-23, nearly triple of what it paid in the preceding year. The government was expecting Rs 48,000 crore from the RBI, public sector banks and financial institutions in the current fiscal.
The dividend payout by the RBI was Rs 30,307 crore for the accounting year 2021-22. With public sector banks posting record profits of over Rs 1 lakh crore in fiscal 2022-23, the government's earnings from them are likely to be higher. | India Business & Economics |
This story is part of CNBC's College Money Guide 2023, a series to help students and recent graduates understand their money and start their adult life off on a solid financial path.
A lot of students are unprepared for one major thing when they go off to college: how to manage their own money. But starting good money habits in college is crucial to setting yourself up for financial success in life. And that means setting up — and sticking to — a budget.
"Transitioning to college is a significant milestone for most young adults, as it marks the first time they are truly away from home and have the opportunity to make financial decisions on their own," said Winnie Sun, managing director of Sun Group Wealth Partners in Irvine, California. "Hello, adulting!"
College students consistently cited money as the aspect of college life they felt least prepared to tackle, in a survey of more than 20,000 college students by Everfi. Just 33% answered that they felt prepared to manage their own money. And only about 40% said they had ever set up or used a budget.
Yet you need money for everything from buying your books to going out to eat. And if you took out student loans for thousands of dollars, those are contracts you signed, and many of those loans are going to start coming due about six months after graduation.
So, college is the time to set yourself up for success.
"It's crucial to understand how money works and practice good financial habits," said Sun, who is a member of CNBC's Financial Advisor Council. "After all, money is the 'tool' that will help you move from where you are today to where you hope to be in the future, achieving your financial goals."
Here are five key steps to setting up a budget.
The first step to getting a grip on your finances is to know your numbers.
Figure out:
- How much money you have coming in every month.
- What your fixed expenses (housing/rent, phone, tuition, books, etc.) are.
- How much, on average, you spend extra per month (food, clothes, going out, etc.)
- What's left over (savings).
A lot of college students think — "Oh, I don't have a lot of money, so I don't need a budget."
Not true!
That's actually when you need a budget the most — so you can start building solid financial habits that will set you up for the rest of your life.
Whether you have a part-time job in college and are getting a regular paycheck, or you're living off of a lump sum from financial aid, loans, gifts from birthdays or money you saved up from that summer job — you have money and you have to make sure it covers your living expenses, plus leaving a little padding for unexpected expenses like a flat tire, a busted laptop or an unexpected trip home for a family emergency.
You don't think about these things because generally it was your parents' responsibility to handle the budget and cover emergency expenses but now — that's on you.
Certified financial planner Stacy Francis, founder of Francis Financial in New York and nonprofit financial literacy initiative Savvy Ladies, said one of things she sees college students get wrong about money all the time is that they behave like they have blinders on, focusing only on what's in front of them — and not looking to the future.
Then, "when you do look up, you're going to find yourself unable to pay your bills, your student loans, your credit-card debt and having to move back home with mom and dad until you do," said Francis, who is also member of CNBC's Financial Advisor Council. "I don't know many college students that want to move back with Mom and Dad!"
So, bottom line: You need a budget.
Setting up a budget isn't as hard or cumbersome as you think. It's pretty easy — and it doesn't have to take a long time.
I'm going to guess that most of us spend more time complaining about money than it would actually take to set up a budget to get more money.
We also spend a lot of time stressing about money and how we don't have any (I see you, broke college student) but if you take a few minutes — say, the time it takes to watch a few TikTok videos — to set up your budget and learn a little bit about money, you can alleviate all that stress and instead, watch your money grow, which is very satisfying.
Satisfying or stressful? Seems like a no-brainer. But that is all up to you.
One popular formula for budgeting that Francis recommends is the 50-30-20 rule. That means 50% of your income goes to your basic living expenses, 30% goes to discretionary/fun stuff and the other 20% goes into savings or investments.
Generally, that means you start by putting the 20% away in a savings account like a high-yield savings account (right now, the top accounts are earning 4% to 5% interest, according to Bankrate) with the aim of not touching it unless you absolutely need it for an emergency expense. And, if you keep money in there and really try hard not to tap into it, you will be surprised at how it grows, thanks to something called compound interest.
Maybe $100 a month or 20% of your income sounds a little steep right now. Save whatever you can — $10, $20 a month. What's important is that 1) you are saving money and 2) you are building a habit of saving money. Automate it, where it automatically comes out of your paycheck and into your savings account, and you will get to a point where you won't even miss that money. But you will be pleasantly surprised when you see how it's grown!
But you should always be working toward a goal of saving more. Up the amount you are automatically moving into savings whenever you can.
Most college students don't have a lot of money, so you may wind up saving a little less than 20% some months or dipping into that account to pay an unexpected bill. But by having that money set aside, "it's protecting you from having to dip into credit cards for those unexpected expenses," Francis said.
Sun prefers more of a 50-25-25 rule — 50% for basic living expenses, 25% for fun stuff and 25% for savings.
"I think savings should be as much of a priority as wants," Sun said. "Let's face it, if the pandemic has taught us anything, it's good to be prepared."
And, she said she thinks it's easier to think in quarters.
"And if it's easier, we have a tendency to stick with it, making savings more sustainable," Sun added. "When it comes to managing your money, the simpler you can make it, the better it'll be for you."
Everyone agrees you need a budget but, as you can see, even financial advisors vary in how they think it's best to budget and manage your money. So, no one is telling you that you have to do something a certain way — figure out what works for you.
There are a variety of ways you can keep track of your budget — you can use a budgeting app, set up a spreadsheet yourself or write it in a simple note on your phone. You can even go old school and write it down in a notebook. Or, you might want to try cash-stuffing, an all-cash budgeting method that has become popular on TikTok. Essentially, you convert your paycheck into cash and have a physical set of envelopes that you "stuff" for different expenses like your phone bill, rent, groceries, spending money, etc.
Everyone processes things differently so it's important to figure out which tools work best for you.
Apps will help you track exactly where each dollar you earn is going and help you earmark different savings goals — like a vacation — and how much you'll need to save each month to reach your goal. The nice thing is that they do the calculations for you. So, you plug in the numbers and then it's a minimal lift on your part. Some will even let you track other accounts, like your 401(k) when you get that first job, or sync up with your partner's accounts to track your household finances.
Sun says it's OK if you prefer to track your expenses in a Google spreadsheet. Her team has also created a simple college budget worksheet you can download — MyBudgetWorksheet.com. Or, if that's not your style to have to track every detail yourself, use your debit or credit cards to track your expenses and set up an alert to let you know when an expense goes through.
The bottom line: You have to be tracking what money is coming in — and where you're spending it.
Once you figure out your method for tracking your budget, it's important to schedule regular check-ins with yourself to make sure your spending is in check and you're not spending more than you're making — or that you're not saving any for emergencies.
Maybe that's once a week or once a month. Again, you have to find what works for you. If you struggle with keeping your spending in check, maybe make it weekly (at least at first) to really put those numbers in front of you and make any adjustments you have to before it gets out of hand.
Francis likens money check-ins to stepping on the scale when you're on a diet. "I have a love-hate relationship with my scale, but what I will tell you about the scale is that it doesn't lie," she said. "It tells me exactly where I'm at so I can make better decisions."
At the end of the day, it's about making sure you are on track.
Sun recommends taking a look at what you have left in your savings and reviewing your expenses during these money check-ins. Then ask yourself:
- Are you surprised by how much money you have left?
- Do you have any spending regrets?
- Would you like to set a new spending, savings or earning goal for next month?
"Commit to spending less and saving more," Sun said. "Shop online and do curbside or in-store pickup rather than going into stores, as this can prevent impulse shopping that can really wreak havoc on a limited budget. Get in and get out, and save more of your money."
And, if you do overspend — don't beat yourself up.
"No one is perfect!" Francis said. Instead, "look to the next month to see if there are some areas you might be able to cut down a little bit."
The value of that weekly or monthly check-in with yourself is to get real about what you're spending.
"Our brains are not powerful enough to keep track of every dollar we spend," Francis said. "They're just not.
"It's not until you see the numbers tallied that you actually realize what you've spent," she added. "The vast majority of us underestimate what we spend and we forget those one-offs."
During these check-ins is also a good time to see if you are able to increase the amount you are putting into savings. Make that a regular part of your check-in — can I go from saving $20 a month to $25? And, if you take on any side hustles or odd jobs like babysitting or walking someone's dog, try not to blow all of that money. Put some — or all — of it into savings. It was money you weren't expecting anyway, right? Why not squirrel it away and let it grow? Then, maybe one day, the thing you were going to buy with it, you can buy with the interest you made on that money. And you still have the initial amount for something else!
It's really all how you frame it. You can look at money as boring and something that "isn't your thing." Or, you can look at it as a way to have money for all the fun stuff you want now — and in the future.
I mean, why didn't anyone tell me money could be fun?!
It's easy to get caught up in the peer pressure — if your friends are going out and spending a lot of money, you want to go, too. You have to remember that they may have a bigger budget than you do. Or, they are blowing their budget and either don't know or don't care. Never make assumptions about people and their money. And don't concern yourself with their money! That's wasted energy. It would be so easy to complain about how other people have more money than you — or, you could get in there and start figuring out how to make — and save — money yourself.
You have to make your own decisions. So, let's say you can't afford to go out. That doesn't mean you have to sit home and feel sorry for yourself that you're poor. Do something else (that doesn't break the budget). You don't have to be rich to have fun!
One way to make it a little easier, Sun suggests, is to try the buddy system — just like you might do when you're dieting or exercising. Get a friend who agrees to track their money along with you and you can compare notes. You can cheer each other on when you're crushing it, have a sympathetic ear to turn to when you've overspent or got stuck with an emergency expense, and just generally discuss your questions about money, seek out the answers — and share what you've learned.
And, you don't have to make it a boring business meeting. This is your meeting — you set the rules! So, maybe you discuss money over ice cream or plan to watch a movie afterward. Make it something you're looking forward to. And, if you find you're both crushing it, why not celebrate by treating yourself to something fun?
"With the confidence to discuss it, you'll have people to go to with your money questions, and you'll start to see money as a 'tool' rather than a social or status identity. This will help you identify 'needs' versus 'wants' and make decisions that benefit you and your finances," Sun said. "For example, if you're invited to a dinner, concert, event, or shopping trip that you really shouldn't splurge on, you want to be comfortable enough to speak up and advocate for your financial priorities."
We've all been there, where we can't afford something that we want. That's a bummer. But it's even worse when you can't afford something you need.
"Saving money and having personal wealth isn't just nice to have; it's essential. You need to be able to afford the things you need in life, and money, as a tool, can help you buy a car to get to a better job, move you into a more practical or safer neighborhood, pay for more education, and more," Sun said. "Getting into that money-saving mindset takes practice. The earlier you start saving and investing, the harder your money can work for you."
That is perhaps one of the most important money lessons of all for college students and new grads: The decisions you make about money now will set the foundation — the building blocks — for everything else you want to do in your life. You might say — Oh, I'll worry about that later when I'm older. If you get yourself into debt now, "older" you will actually have a lot more to worry about. Let's say older you wants to buy an apartment, get married, have kids or go on a vacation. They may not be able to — or they might have to delay those things — if you've saddled them with debt. On the flip side, if you are smart with money now, you will build a strong foundation so that you can do the fun things you want now and older you can do any of those things whenever they're ready. No regrets.
See why we keep telling you that you need a budget now? It's because we want you — and older you — to have the life you want.
Darreonna Davis, a student at Howard University who wrote about budgeting while you're in college for CNBC's "College Voices" series, said that before writing the story, she didn't have a budget because she wasn't sure where to start — or if she even needed to because she didn't have a lot of money.
I'll bet a lot of college students can relate to that! I know that is exactly how I felt when I was in college and even into my 20s.
"I learned that budgeting is essential to saving and, eventually, building your money. I learned that all the things it takes to start a budget are already at my fingertips, and it isn't as hard as I thought!," Davis wrote. "Believing that just because my income was limited and I had few expenses was a mistake on my part in my financial journey. Now, while in college, is the best time to begin practicing money management."
Yes, Darreonna! So well said. And, by starting while you're in college, it gives you a strong foundation to build on so that your money — and what you can afford to do today, tomorrow, next week or five years from now, keeps growing. | Personal Finance & Financial Education |
I’m trying to nail down what metrics I should use to evaluate how well my retirement account is being managed. I’ve vetted the company that “actively” manages my account. I have $1.5 million invested in a 50/50 mix of stocks and bonds and pay a 0.75% management fee. I would like to know if I’m getting the best bang for my buck.
-Chris
To know what metrics to track, you first need to consider what you’re expecting from the company managing your account and what they say they provide you. Ultimately, whether or not you are getting your money’s worth is a function of how satisfied you are. If they are meeting your needs and you have no complaints, then great! If not, you may want to look for someone new to manage your portfolio. Service and investment performance are two common areas you’ll want to consider. (And if you need help finding financial advice, this tool can help match you with potential advisors.)
What Services Do They Provide?
Services can vary widely from one firm or advisor to another. Some advisors are financial planners who, in addition to managing accounts, also provide comprehensive financial advice. Others may focus on a specific area like retirement, self-employment considerations or equity compensation. Meanwhile, some advisors strictly manage investments. You’ll first want to consider whether or not you’re happy with the services that you’re receiving.
Then, think about the level of communication you have with the advisor managing your account. No amount is objectively right or wrong as long as you are satisfied. You may not want to hear from your advisor very often or you may want to hear from them frequently. It’s up to you. The point is that you’re able to communicate with your advisor as frequently as you want and need and that the communication is useful to you. In other words, do you walk away from those conversations feeling overwhelmed or does that communication actually provide clarity?
One thing that sticks out to me in your question is that you refer to a company rather than a person. This makes me wonder how personal the advice and relationship are. (And if you need help finding a new financial advisor, this tool can help you connect with potential matches.)
How Have They Done Managing Your Investments?
Just as services differ from one advisor to the next, there are different investment styles that may produce different results. It’s very important that your investment philosophy and goals align with your advisor’s approach. Some advisors are going to be more active than others and be focused on different asset classes or strategies.
Again, the way to assess your portfolio performance is to determine if your advisor is following through on what they say they are going to do for you.
If your advisor is investment-focused and suggests their methods will provide you with superior investment performance, you can compare your return against a relevant benchmark to see how your returns stack up.
If your advisor is more planning-focused and suggests that they will manage your investments in a way to meet various goals, nominal returns may not be the best metric for evaluating them. In that case, you’ll want to assess whether you are in fact meeting your goals in a timely fashion.
Then again, your advisor’s investment style could be a blend between these two. For example, they might manage your investments with the goal of generating a specific amount of tax-free income or dividends per month. (Whether you need help managing investments or creating a financial plan, a financial advisor can help.)
How Much Does It Cost?
Of course, then there’s the cost. Again, it will vary from one advisor to the next and depend on the level and type of service you are receiving, but 0.75% is within the normal range.
Some advisors may charge twice that amount. If you want cheaper management it is certainly available. You can likely find a robo-advisor for half that cost, just be mindful of the general trade-off between service/communication and cost. You can even do it yourself and save the cost entirely. That’s a legitimate option, but before you decide to do that make sure it’s a viable route for you. (And if you need help in your search for financial advice, this tool can help match you with potential advisors.)
Bottom Line
When evaluating your financial advisor or the company that’s managing your investments, you’ll want to consider the services they provide, how much they communicate with you, how well your investments have performed and how much it all costs. If you’re unsatisfied in any of these areas, perhaps it’s time to look for a new advisor.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Photo credit: ©iStock.com/mixetto, ©iStock.com/AndreyPopov | Personal Finance & Financial Education |
Independent greengrocers which have remained fully stocked despite the ongoing vegetable shortage say they have seen 'queues out the door' - while supermarket shelves are left bare.
Thomas Hagon, 39, from Reg The Veg green grocers in Clifton, Bristol, claimed 'the produce is there for supermarkets to purchase but higher prices have turned the chains off'.
The likes of Aldi, Morrisons, Asda and Tesco have limited sales of tomatoes, peppers and cucumbers as frosty weather in Spain and Morocco has hit imports - with customers in all four stores given limits to how much produce they can buy.
But despite an increase in cost price, Mr Hagon claims greengrocers have been able to remain stocked up, and says he has fresh tomatoes, peppers and cucumbers because 'customers are happy to pay extra for them'.
He predicted supermarkets will be forced to increase prices in the near future - after Environment Secretary Therese Coffey warned the crisis could last for another month.
Meanwhile, some restaurants struggling to cope with the shortages have been forced to remove tomato-dependent items such as pizza and pasta from their menus.
Mr Hagon said Reg The Veg had a period of low stock a few weeks ago when supermarkets were selling the vegetables at a lower price.
But since the wholesale price has reportedly nearly doubled, averaging at £15 before and now as much as £30, Mr Hagon said supermarkets 'won't pay it', while greengrocers, like Reg The Veg, will.
He said: 'We had shortages due to availability and low numbers about three weeks ago and supermarkets were still pumping out vegetables at low prices.
'It's got to the point where now supermarkets can't buy it at the right price as it's increased so much.
'It is available they just won't pay the money for it.
'Whereas we can, and we can then supply our customers and pass on the slight increase in price.
'We've still had to increase our own prices in some areas - cherry vine tomatoes are now £9.99 a kilo which is around double the normal price.
'We do say to customers that these peppers or tomatoes for example can be quite expensive but they're happy to pay that.
'Of course, nationally it's very difficult because of the volumes that supermarkets get in, but if they're quoted £25 or £30 pounds for a wholesale shipment, and they wont pay for it.'
Why are there shortages of fruit and veg in the UK? Rising prices, heating costs and bad weather abroad are all blamed What is causing the shortages? Cold weather in Spain and Morocco has drastically hit the availability of vegetables in British markets along with soaring energy prices. The supply problems are blamed on bad weather and high energy costs making greenhouses more costly to heat. Some critics have cited red tape on post-Brexit imports from the EU as an issue. Tim O'Malley, of major importer Nationwide Produce, said volatile growing conditions had seen wholesale spot prices for fresh produce lines soar by as much as 300 per cent. Growers in Spain and elsewhere on the Continent are reportedly sending produce to European supermarkets rather than to the UK because they are more willing to pay the higher prices. High energy prices - linked to Russia's invasion of Ukraine - are also a factor because it has become more expensive to heat greenhouses. Which fruit and veg are affected? The problem started with tomatoes but has since widened to peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries. While some critics have cited red tape on imports from Europe, industry expert Mr O'Malley said the single biggest factor behind the crisis was 'Mother Nature'. He said: 'I can honestly say that in the 40 years I've been in this trade, I've never seen such high spot prices across such a broad range of products for such a prolonged period of time.' He added: 'It's not about Brexit - it's about different buying models'. Farming minister Mark Spencer said at the NFU conference yesterday: 'What has driven some of this is a frost in Morocco and Spain in November and December. 'This can damage a lot of the salad and brassica crops, which we have traditionally relied on at this time of year so that has created a gap in the market. 'It's very difficult for UK producers to grow cauliflowers, for example over winter. They are not resistant to frost. It's not possible to grow cauliflowers in January in the United Kingdom unless you grow them in a greenhouse.' Why are European supermarkets not suffering from shortages? Experts say that it is because of the way that British supermarkets buy produce compared to those on the continent. Tim O'Malley says retailers in the UK tend to agree prices once or twice a year so they and shoppers can get certainty on price. This tends to be a winter deal for produce from Spain and Morocco and a summer deal for UK produce. Mr O'Malley says that in Europe they tend to agree monthly prices, meaning that supermarkets find it easier to buy when prices change. Adam Leyland, Editor-in-Chief of The Grocer, said that UK supermarkets are 'in denial' and need to be more nimble to avoid shortages like the current one. What are the other factors? There has been strong winds disrupting ferries from Morocco and flooding in the country. Frost has also slowed growth and damaged crops. Phil Pearson, group development director at APS Produce said delays are likely to continue until, 'the end of April into May.' Andrew Opie, director of food and sustainability at the British Retail Consortium, which represents UK supermarkets, said: 'Difficult weather conditions in the south of Europe and northern Africa have disrupted harvest for some fruit and vegetables including tomatoes and peppers. 'While disruption is expected to last a few weeks, supermarkets are adept at managing supply chain issues and are working with farmers to ensure that customers are able to access a wide range of fresh produce.'
One of his colleagues said there were queues stretching out the door on Sunday after customers scrambled for tomatoes and peppers.
She initially wasn't sure why but then realised it may have been down to the supermarket shortage.
Mr Hagon said he isn't sure what the solution to the problem is, but that it will probably result in supermarkets having to charge more.
He said conditions on the continent have left prices at an 'exceptionally high' rate.
He added: 'I don't know what the solution is to it, they'll just have to charge more - some fruit or veg hasn't gone up for a decade or more.
'When there's more competition from other European countries that supply produce it'll bring prices down - It's always high at this time of the year, it's just exceptionally high at the moment.
'We've seen the cold weather in Morocco. They've got snow - it's crazy.
'We've got used to eating what we want to eat all year round so when things go a bit short it can be a bit of a shock.'
Other greengrocers have also found themselves with no choice but to double their prices.
Paul Semple, 43, of Lloyds Green Grocers in Bristol, said: 'Tomatoes are hard to get, courgette, cucumbers all hard to get hold of.
'They're twice the price, that's how scarce they are.
'It's always hard to get produce this time a year but this year we're nearly at £10 a kilo for tomatoes when we rarely go above £5.
'We're still getting the gear, just prices are up and very expensive.'
Another fruit and veg trader urged people to head to their local market stalls for fresh groceries.
Baz Dawson, owner of Fresh and Fruity, in Preston, revealed his salad stocks have not been directly affected during the national shortage because he buys locally.
The Preston Market trader said that while big supermarkets will now struggle to get hold of their usual cheaper items from abroad, he will continue to buy from farmers in Lancashire and the surrounding areas.
Four of the UK's leading supermarkets - Tesco, Aldi, Asda and Morrisons - have put limitations in place on the amount of certain items customers can buy.
The problem started with tomatoes but has since widened to peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries.
Tesco and Aldi have introduced limits of three per customer on sales of tomatoes, peppers and cucumbers. Asda is limiting customers to three on sales of lettuce, salad bags, broccoli, cauliflowers and raspberry punnets, along with tomatoes, peppers and cucumbers. Morrisons has set a limit of two on cucumbers, tomatoes, lettuce and peppers.
Mr Dawson says it is the international transportation that has got the supermarkets in a pickle, with fewer places for them to buy their goods.
But because traders like him keep things local, they are not worried about stocks lasting. He says every day can be different when it comes to buying locally and because of that, he is less worried he'll face what the supermarkets are currently dealing with.
Mr Dawson said: 'We only deal with top end fresh fruits, veg and salads. There's currently such a national shortage on salads and foreign vegetables.
'We go to the wholesalers and buy either direct or off the farmer or the wholesaler to cut costs, but to stick with the quality. With it being such a struggle nationally, the supermarkets will struggle but with us going direct to the wholesalers, we can still get hold of limited salad stock.
'Most of our vegetables are grown and cut within a ten mile radius during certain seasons of the year. Even for us, when we're in the depths of winter we sometimes have to go for the cheaper produce too.
'Supermarkets have not got the stock of salads in now whatsoever but here we do have, from the wholesaler. Because they haven't got it in the supermarket, like they didn't when the pandemic hit, they come to us in the market to buy fresh produce and salad. We keep going, like we did two years ago.'
Fluctuating stocks can occur daily in the market trade, Mr Dawson says, but having already dealt with it since the day he began selling, he says the fear of low stocks of certain items is less of a fear.
In the winter months the UK imports around 95 per cent of its tomatoes and 90 per cent of its lettuces, mostly from Spain and northern Africa. The British Retail Consortium said disruption was expected to last a few weeks.
Retailers have stressed that buying limits are temporary until supplies improve in the coming days or weeks, helped by the UK moving into its growing season.
It comes after the Environment Secretary suggested yesterday that Brits could consider eating turnips to ease the national vegetable shortage.
Farmers also warned of a shortage of leeks that is likely to hamper St David's Day celebrations in Wales next week.
Therese Coffey told MPs the 'temporary' shortages were caused by 'very unusual weather' but were expected to end in another four weeks.
Ms Coffey said that consumers might want to turn to British 'specialisms' at this time of year to support domestic farmers.
She added: 'I am led to believe by my officials... we anticipate the situation will last about another two to four weeks.
'Even if we cannot control the weather it is important that we try and make sure the supply continues to not be frustrated in quite the way it has been due to these unusual weather incidents.'
Ms Coffey agreed with Tory MP Selaine Saxby who suggested eating seasonal vegetables could solve the issue.
Ms Saxby said: 'We should be eating more seasonally and supporting our own British farmers', adding that if shoppers did so, 'a lot of these problems would be avoided'.
Ms Coffey said: 'It's important to make sure that we cherish the specialisms that we have in this country.
'A lot of people would be eating turnips right now rather than thinking necessarily about... lettuce and tomatoes and similar, but I'm conscious that consumers want a year-round choice and that is what our supermarkets, food producers and growers around the world are trying to satisfy.'
Labour's environment spokesman Jim McMahon questioned suggestions that food shortages were entirely caused by external forces, claiming ministers could have done more to support farmers with access to 'the energy-intensive support scheme', and increased quotas on labour to help with workforce shortages.
Conservative former minister Sir Desmond Swayne ridiculed suggestions that Brexit was responsible for the shortages.
He told the Commons: 'If only I had been told before I voted for Brexit that it was going to cause frosts in Morocco, I could have made a different decision, couldn't I?'
Asked about the turnip suggestion, a No 10 spokesman said: 'We don't believe it's for us to tell people what they should or shouldn't buy.'
He added: 'What the Secretary of State was doing was setting out the importance of celebrating the produce that we grow here in the UK.'
Ms Coffey drew further criticism for suggesting people struggling to afford food bills could consider working more hours.
She said: 'One of the best ways to boost their incomes is not only to get into work if they're not in work already, but potentially to work some more hours.'
After the debate, Labour's Rachael Maskell accused Ms Coffey of 'shifting blame for food poverty on to people because they are on low wages and are poor'.
Budget supermarket food is seeing average annual price rises of an astonishing 21.5 per cent.
A Which? study found the poorest homes were the worst hit.
Some products have seen huge increases, such as tins of Growers Harvest sliced carrots up 63 per cent at Tesco to 33p, and packs of pork sausages at Asda up 58 per cent to £1.27. Budget Creamfields French brie also saw a 96.6 per cent rise at Tesco to £1.57.
Farmers are warning of an 'extraordinary' shortage of leeks which threatens St David's Day celebrations in Wales next week.
British producers of the much-loved seasonal vegetable, as well as onions, cauliflower and broccoli, have had to write off crops due to a lack of rain and deep frosts.
Some supermarkets have already run out of leeks, while the ones that do reach the shelves are often of poor quality and stunted – bad news for anyone planning to serve up traditional dishes such as a Welsh cawl or Wrexham bake on March 1.
Leek Growers Association chairman Tim Casey said yields were down by as much as 30 per cent following the 'most difficult growing season ever'. He added: 'We are predicting the supply of home-grown leeks will be exhausted by April, with no British leeks in the shops during May and June.'
Reputedly introduced to Wales by the Phoenicians when they were trading for tin in the British Isles, the leek has long been associated with the Welsh Saint David.
In 640AD, according to legend, the Briton King Cadwaladr and his men wore leeks in their hats to distinguish themselves in battle against invading Saxons. The leek has remained a national symbol ever since. | United Kingdom Business & Economics |
Bloom Money, a U.K.-based fintech, has raised £1 million to digitize an informal financial management system employed by ethnic communities across the world.
Often referred to as “rotating savings and credit association” (ROSCA), the microcredit system varies in the details around the world, but usually, it involves an informal gathering of people from a certain community who act as a bank, collecting and saving money that members can withdraw. The system is called different names across the world, such as “hagbad” in Somalia or “pardna” in parts of the Caribbean.
The goal is to avoid conventional banking systems, many of which discriminate against minority communities, especially in the U.K., CEO Nina Mohanty said. “Some of it is just blatant racism. We don’t have clear red-lining like in the U.S., but there are definitely postcode look-ups,” she said.
The ROSCA system is a way to conduct financial matters with people you trust, she said, “whether that is by race, nationality, we’ve even got people down to the tribe level.” Bloom Money wants to digitize this ROSCA process.
A daughter of two immigrants to the U.S., Mohanty says she decided to work on this problem after she moved to the U.K. and learned for herself just how difficult it can be for an immigrant to set themselves up financially. “I just felt that there was not just an economic justice point to this, but also a huge opportunity, where people only think of the U.S. as a country of immigrants, but increasingly across Europe, we know migration is growing,” she said.
Her co-founder and CTO Dan James believes in the system because he’s seen how effective it can be, growing up in an ethnic community in central Birmingham. “I saw first-hand the benefits that using ROSCAs can bring people, especially those entering the U.K. who have historically been underserved by the existing financial sector,” he said.
The company will use the funds from the pre-seed round to continue building its digital savings features, which has all funds safeguarded by an electronic money institution. The fundraising was led by Zinal Growth, and saw January Ventures, Pact VC, and angel investors Berenice Magistretti and June Angelides participating.
Bloom Money lets people create groups, known as Bloom Circles, to share and save money with. It also has educational materials on the basics of life in the U.K., such as how to get a driver’s license, setting up a trust fund, and an explainer on credit scores.
Mohanty described the fundraising process as “really interesting.” She said the most challenging part was explaining to investors that the company intended to target very underserved communities. At first, there was a lot of misunderstanding, she said. “Some very racist, xenophobic things were said to us,” she said. “Even going through the regulation process, there was a lot of prejudice that we had to overcome.”
Mohanty and James say they wanted ethnic and gender diversity on their cap table, and they seem to have managed that so far: nearly 70% of their cap table identifies as women, almost 50% comes from a minority ethnic background, and about half identify as first or second-generation immigrants.
Angelides, an angel investor, said Bloom Money was her first angel fintech investment, and she knew right off the bat how big of a problem the company is trying to solve since she grew up in Nigeria, where cash is king. “Communities have struggled for generations with trust in financial systems and have preferred to use community-based saving methods, such as Ajo (the Nigerian version of the ROSCA system).”
“This comes with its own set of problems, from people absconding with funds to people being unable to significantly grow wealth. This is where Bloom Money comes in,” Angelidas added. “A lot of migrant communities remit large amounts to their home countries each year. With Bloom, they now also have an opportunity to build stronger ties with the U.K., grow their wealth and qualify for additional products that they ordinarily would have struggled to access.” | United Kingdom Business & Economics |
American shoppers are shunning London in favour of European cities such as Paris, Milan and Madrid in the wake of Rishi Sunak’s controversial tourist tax, new data reveals.
The luxury boutiques and retailers of London’s West End, which have long been a draw for wealthy tourists, have seen a drop off in spending from US visitors despite increased footfall.
Figures from the New West End Company (NWEC), which represents businesses in central London, found that the number of flight bookings to London from the US rose by 17pc in the three months to June 2023 compared to the same period in 2019.
Yet, the amount of cash being spent by US tourists over that period in the West End fell by 1pc.
By contrast, the amount American shoppers spent in France rose by 183pc compared to 2019, and 174pc in Spain, NWEC said, citing data from tax-free shopping company Global Blue.
Dee Corsi, chief executive of NWEC, said: “When visitors from further afield, including those from the US, come to the UK, they are often on a multi-stop trip which takes them all around continental Europe.
“With shopping a key priority for long-haul travellers, we know that they research in advance where their dollar can go furthest – and at the moment, that’s not in London.”
Wealthy tourists from Gulf countries, such as Saudi Arabia and the UAE, have also cut spending in London, according to the data, which showed visits from Gulf Cooperation Council (GCC) countries rose 7pc in the three months to June but spending fell 17pc.
Meanwhile, GCC tourists’ spending in France and Italy rose by 118pc and 112pc respectively, according to NWEC.
The Government has faced repeated warnings from luxury industry bosses that the decision to axe VAT-free shopping in 2021 has harmed the capital and made it less competitive compared to continental European destinations.
When high-end handbag retailer Mulberry closed its longstanding New Bond Street store in February, the company’s chief executive Thierry Andretta said the combination of falling trade from overseas visitors and surging costs had made it unviable.
Around 50pc of the store’s sales came from overseas tourists before VAT-free shopping was scrapped, compared with about 5pc after.
The managing director of Harrods, Michael Ward, said earlier this month the company had been forced to replace luxury handbags with lower-priced goods in its airport shops due to the tourist tax.
Mr Ward said: “We used to be able to sell a £1,000, £1,500 handbag and people would save up and say ‘I’m going to have that bag and I’ll buy it at the airport because I can get £200 or £300 tax back’.”
The discount – which previously allowed tourists to claim back the VAT paid on certain purchases such as upmarket clothes – was scrapped in 2021 in the wake of Brexit.
Ministers argued at the time it was not a significant enough lure for tourists and did not benefit the wider UK outside Central London.
Liz Truss planned to reinstate VAT-free shopping when she was Prime Minister, but this was quickly reversed once Jeremy Hunt took over as Chancellor after the mini-budget in September. | United Kingdom Business & Economics |
1 in 8 kids in the U.S. experiences food insecurity. One simple grocery choice can help.
It's truly a win-win.
When you’re a kid, summer means enjoying the fun of the season—plentiful sunshine, free time with friends, splashing in pools and sprinklers. But not every child’s summer is as carefree as it should be.
For some, summer means going hungry. According to Feeding America, summer food insecurity affects some 22 million kids—that’s 1 in 8 children—in the U.S., largely because families lose the free or reduced-price meals at school that help keep them fed during the school year.
But back-to-school time doesn’t make food insecurity disappear, either. Hunger is a year-round issue, and with the increased cost of groceries, it’s gotten harder for families who were already struggling to put food on the table.
So what can be done—or more specifically, what can the average person do—to help?
The good news is that one simple choice at the grocery store can help ease the burden a bit for those experiencing food insecurity. And the even better news is that it’s also a healthy choice for ourselves, our families and our planet. When we’re out on our regular shopping trips, we can simply look for the O Organics versions of things we would already buy.
But wait—aren’t we all feeling the pinch at the checkout stand? And isn’t organic food expensive? Here’s the thing: Organic food is often much more affordable than you might think. The cost difference between organic and non-organic products keeps narrowing, and many organic and non-organic foods are now almost identical in price. Sometimes you’ll even find that an organic product is actually cheaper than its brand-name non-organic counterpart.
Since 2005, O Organics has helped give health-conscious shoppers more options by making organic food more accessible and affordable. And now, it’s helping those same shoppers take action to fight food insecurity. For every O Organics product you purchase, the company will donate a meal to someone in need through the Albertsons Companies Foundation—for up to a total of 28 million meals.
Look for the O Organics label in every aisle.O Organics
Here’s what that means in real-world terms:
Say you’re throwing an end-of-summer backyard BBQ bash. If you were to buy O Organics ground beef, hamburger buns, ketchup and sea salt potato chips, you’d be donating four meals just by buying those four ingredients. If you added O Organics butter lettuce and O Organics sandwich slice pickles, you’d be donating two more meals, and so on.
And where are those meals going? Albertsons Companies Foundation works with a network of national and local charities fighting hunger, and regional divisions choose organizations to fund locally. So every O Organics product you purchase means a meal on the table for someone in your area who might not otherwise have the nourishment they need.No kid should have to worry about getting enough food to thrive. We all make conscious choices each time we walk down a grocery store aisle, and by choosing O Organics, we can make a difference in a child’s life while also making healthy choices for ourselves and our families. It’s truly a win-win. | Consumer & Retail |
Theresa May has said the “best long-term decision” the government can make is on climate change because action is integral to the “long-term future” of the UK.
She explained: “It’s no good waking up on January 1 2045 and saying we’ve got five years to do something.”
The King’s Speech contained plans to have licences for oil and gas projects in the North Sea awarded annually.
There have recently been questions raised about the government’s ability to meet its 2050 net zero target, with its climate advisers warning the UK risks falling behind without much faster action.
In its latest progress report, the Committee on Climate Change (CCC) said the “expansion of fossil fuel production is not in line with net zero“.
But ministers insisted new projects would have to meet net zero targets and claimed the policy would “bolster energy security”.
Rebuking the prime minister yesterday, May said: “I think in relation to the King’s Speech, and the government’s programme on climate change and environmental degradation, the government is missing an opportunity.
“What we need to do now is press the accelerator on the transition to a green economy not try to draw back, and I fear that despite the fact that the King’s Speech says ministers will seek to attract record levels of investment in renewable energy sources, that that is not sufficiently strong in ambition from the government to make sure that they are making that transition quickly enough to ensure that we reach net zero in 2050.
“It’s no good waking up on January 1 2045 and saying we’ve got five years to do something. Let’s do it now because that will be even more costly for members of the public.”
May said she was worried about the Government “giving some mixed messages to investors”.
She told the commons: “They need to have the confidence to invest in our transition to a green economy and we need to show that the government is pressing the accelerator on that, because the best long-term decision that we can make is about climate change because the long-term future of this country and of the people of this country depend on us dealing with climate change and environmental degradation.
“So I want the government to press the accelerator, not to roll backwards.”
She also reminded MPs it was her government that legislated for a net zero emissions target by 2050.
She said: “I welcome the long-term ambition that the government has expressed, its need to take long-term decisions.
“Because good government is not about grabbing short-term decisions to get a headline, it is about doing what is in the national interest and in the longer-term future interest of this country.
“But on that point, I was rather surprised recently when I received an email in the name of the Prime Minister sent out I think by the Conservative Party, where it said the following: from net zero to HS2, smoking to education, we are going to tackle the challenges that other politicians have been afraid to even talk about.
“Now since I read that I’ve been racking my brains as to which prime minister it was [who] put net zero in 2050 into legislation? Answers on a postcard please.”
Politics.co.uk is the UK’s leading digital-only political website, providing comprehensive coverage of UK politics. Subscribe to our daily newsletter here. | United Kingdom Business & Economics |
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WASHINGTON (AP) — Millions of Social Security recipients will get a 3.2 percent increase in their benefits in 2024, far less than this year’s historic boost and reflecting moderating consumer prices.
The cost-of-living adjustment, or COLA, means the average recipient will receive more than $50 more every month beginning in January, the Social Security Administration said Thursday.
About 71 million people — including retirees, disabled people and children — receive Social Security benefits.
Thursday’s announcement follows this year’s 8.7 percent benefit increase, brought on by record 40-year-high inflation, which pushed up the price of consumer goods. With inflation easing, the next annual increase is markedly smaller.
READ MORE: Most Americans oppose Social Security, Medicare cuts, AP-NORC poll says
Still, senior advocates applauded the annual adjustment.
“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” AARP CEO Jo Ann Jenkins said. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important.”
Social Security is financed by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes will be $168,600 for 2024, up from $160,200 for 2023.
The social insurance program faces a severe financial shortfall in coming years.
READ MORE: How Biden reignited debate over Social Security and Medicare during his State of the Union
The annual Social Security and Medicare trustees report released in March said the program’s trust fund will be unable to pay full benefits beginning in 2033. If the trust fund is depleted, the government will be able to pay only 77 percent of scheduled benefits, the report said.
There have been legislative proposals to shore up Social Security, but they have not made it past committee hearings.
The COLA is calculated according to the Bureau of Labor Statistics’ Consumer Price Index, or CPI. But there are calls for the agency to instead use a different index, the CPI-E, which measures price changes based on the spending patterns of the elderly, like health care, food and medicine costs.
Any change to the calculation would require congressional approval. But with decades of inaction on Social Security and with the House at a standstill after the ouster of Speaker Kevin McCarthy, R-Calif., seniors and their advocates say they don’t have confidence any sort of change will be approved soon.
The cost of living adjustments have a big impact for people like Alfred Mason, an 83-year-old Louisiana resident. Mason said that “any increase is welcomed, because it sustains us for what we are going through.”
As inflation is still high, he said, anything added to his income “would be greatly appreciated.”
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RBI Chief Pitches For Global Debt-Sharing Platform To Help Indebted Nations
In the interim, "we may examine the possibility of constructing suitable proxies for debt flows," he said.
RBI Governor Shaktikanta Das on Friday called for a global debt data-sharing platform to help countries needing multilateral assistance get relief on a timely basis.
Addressing a G20 seminar on the global economy, organised by the Finance Ministry and the Reserve Bank of India here, Das said there is a need for realistic assessment of debt sustainability of countries seeking assistance.
However, such assessment should be based on realistic growth and fiscal projections which are fully founded on accurate and comprehensive debt data, he noted.
Given this, the best way forward is setting up a global debt data-sharing platform that can help in this regard, Das said and added that establishing such a platform could be very challenging and may take several years.
In the interim, "we may examine the possibility of constructing suitable proxies for debt flows," he said.
Such proxies may be derived from data on capital flows and locational banking statistics from sources such as the Institute of International Finance and the Bank for International Settlements, the Governor added.
On a priority basis, Das pitched for having a system in place for a multilateral debt relief programme providing targeted assistance to low-income countries with high debt levels.
This initiative can be designed with a clear focus on utilisation of debt relief for sustainable development projects and poverty reduction efforts. To this end, instruments such as debt-for-development swaps and green debt relief programmes can be employed, Das suggested.
He also called for increased public and private investments in Global Public Goods, which play a crucial role in shaping developmental strategies and securing human welfare across borders and generations.
According to him, providing finance in this segment has become a critical issue in the wake of the pandemic, the unsettled geopolitical environment, climate change, fractures in international supply chains, and tectonic shifts in financial market conditions and global liquidity.
"Our sustained engagement in the India Stack and the UPI, especially during the pandemic and thereafter, has filled us with the conviction that digital public infrastructure like the UPI can become a critical part of global public goods when scaled up beyond national borders," he said.
Calling for private capital in building public goods infrastructure, he said that while the UPI has been a public sector-led initiative, it is not necessary that public goods can only be developed and financed by the public sector.
"The private sector needs to engage in the provision of GPGs not just because they create an enabling ecosystem for businesses to thrive but also because they'll be a commercially viable endeavour," he said.
In the investment cascade, keeping in view the very large investment requirements, the trigger financing can come from public investment, which will help minimise the risks and expand market access, he said and added that subsequent finance can be met by the private sector.
This means that risk sharing should be an important design element in fostering private financing for GPGs and multilateral development banks can catalyse private sector investment through risk sharing mechanisms, Das said. | Banking & Finance |
ESAF Small Finance Bank IPO Allotment Finalised: How To Check Allotment Status
Step by step guide on how to check the ESAF Small Finance Bank allotment status online
ESAF Small Finance Bank Limited had launched its initial public offering November 3 and the issue closed on November 7. On the last day of subscription the ESAF Small Finance Bank IPO was subscribed 73.15 times. ESAF Small Finance Bank IPO comprises a fresh issue of 65,116,667 shares, amounting to up to Rs 390.70 crore. The price band for the issue is fixed in the range of Rs 57– 60 per share.
As per the latest update, the allotment of shares have now been finalised.
Investors who had shown interest in the ESAF Small Finance Bank IPO can now check their allotment status by following the steps provided below.
Where to check ESAF Small Finance Bank IPO allotment status?
Investors can check the ESAF Small Finance Bank IPO allotment status on the official website of registrar, Link Intime India Private Ltd and on the official BSE website.
How to check ESAF Small Finance Bank IPO allotment status on Link Intime India Private Ltd.
Visit the Link Intime website: https://linkintime.co.in/IPO/public-issues.html
Select "ESAF Small Finance Bank Limited" from the drop-down list on the Public issues page.
Enter your PAN number, application number, or DP Client ID.
Click on the "SUBMIT" button.
Download or print the allotment status for your records.
How to check ESAF Small Finance Bank IPO allotment status on BSE
Visit the official BSE website: bseindia.com/investors/appli_check.aspx
Click on "Equity" under "Issue Type."
Select "ESAF Small Finance Bank Limited" from the IPO list.
Enter your application number or PAN number.
Complete the 'Captcha.'
Click on the "Search" button to view your allotment status.
Download/print the allotment status for your records.
ESAF Small Finance Bank IPO Listing Date
Shares of ESAF Small Finance Bank may list on BSE and NSE on Friday, November 10, 2023.
ESAF Small Finance Bank IPO Timeline (Tentative Schedule)
IPO Open Date: Friday, November 3
IPO Close Date: Tuesday, November 7
Basis of Allotment: Thursday, November 9 (finalised)
Initiation of Refunds: Thursday, November 9
Credit of Shares to Demat: Thursday, November 9
Listing Date: Friday, November 10
ESAF Small Finance Bank IPO Issue Details
Total issue size: 77,166,667 shares (aggregating up to Rs 463.00 Cr)
Face value: Rs 10 per share
Fresh issue size: 65,116,667 shares (aggregating up to Rs 390.70 Cr)
Shares for offer for sale: 12,050,000 shares
Price band: Rs 57 to Rs 60 per share
Lot size: 250 Shares
About ESAF Small Finance Bank Limited
ESAF Small Finance Bank Limited is a finance bank incorporated in 1992, mainly focuses on lending loans to rural or semi- rural customers. Provide micro loans, retail loans, MSME loans, loans to financial institutions. Domestically they have 581 ATM’s. Bank has a network of 700 outlets, 743 customer service centers, 20 business correspondents and 481 business facilitators, as of 2023.
Bank is making it easy for the customers for digital or online usage by providing internet banking portal, a mobile banking platform, SMS alerts, bill payments and RuPay branded ATM cum debit cards. There are a total of 4100 people working with them as of March 2022. | Banking & Finance |
Russia’s plans to launch a crypto-based “Digital Ruble” are not going to help it avoid Western sanctions in the foreseeable future, experts say, despite Russian officials’ claims that the new currency could deal a fatal blow to the U.S.-led global financial system.
A new law paving the way for the roll-out of the Digital Ruble comes into force on Tuesday, establishing the blockchain-based currency as a new form of legal tender inside Russia.
Although designed as a new domestic payments system, since Russia invaded Ukraine in February 2022, Russian lawmakers, analysts, think tanks and state media outlets have touted the Digital Ruble as a game-changer in helping Russia skirt Western restrictions.
“We will be able to use this technology ... to carry out settlements with foreign countries and foreign companies. Thus, it will be very difficult for our enemies, including the United States, to influence our financial activities. It’s a big step forward, both in terms of payments and as an opportunity to protect ourselves from sanctions,” said Russian lawmaker Anatoly Aksakov, a co-author of the Digital Ruble laws.
Independent experts tend to disagree.
“I cannot see how the Digital Ruble can help with sanctions avoidance,” said Alexandra Prokopenko, a former Central Bank staffer and now a visiting fellow at the German Council on Foreign Relations.
“Sanctions limited the ability of Russian businesses and the state to use the dollar and euros. The Digital Ruble in this case isn’t helpful at all. I can’t imagine how it will work.”
What is the Digital Ruble?
The Digital Ruble is a new form of currency in Russia, which will be issued by the Central Bank. It is Russia’s version of a central bank digital currency (CBDC) and will be based on blockchain technology. It will sit alongside cash and existing forms of electronic money as a means of payment. The Central Bank says the Digital Ruble will reduce transaction costs for businesses, add an extra layer of security for consumers and help combat corruption. It is currently being tested by the regulator and commercial banks.
Once launched, businesses will be able to accept payments in Digital Rubles in shops, potentially including through offline methods like NFC payments. Digital Rubles will be stored directly in accounts with the Central Bank, but accessible through wallets with commercial banks. Digital Rubles will be fully convertible into both cash and other electronic payment forms. The Central Bank will not pay interest on holdings of Digital Rubles and will not allow borrowing in Digital Rubles.
Russia claims that the Digital Ruble, if used for international transactions, will enable payments without the involvement of foreign commercial banks or Western financial infrastructure, like the SWIFT financial messaging system.
Commercial banks are on the frontline of enforcing Western sanctions, with the power and responsibility to block transactions involving sanctioned entities. Given the high importance of carrying out transactions in U.S. dollars, even financial institutions in countries on friendly terms with Moscow — such as China, Turkey and the United Arab Emirates — have been cautious in their transactions with Russia, wary of being hit with secondary sanctions.
But because CBDCs, in theory, do not need the involvement of a commercial bank, Russian analysts say the Digital Ruble will let foreign companies trade directly with their Russian counterparts, away from the prying eyes of Western financial regulators.
“The main advantage of the Digital Ruble for cross-border payments is that such payments will be made without using the banking system of other countries, only through the Digital Ruble platform, operated by the Bank of Russia,” said Nikolay Zhuravlev, general director of TFA.RF, a consultancy on digital financial assets.
“We know that there are many companies in the world that are interested in doing business with Russia, but today their capabilities are limited by … sanctions against Russian banks. Thanks to the Digital Ruble, banks are removed from the equation, and all companies ready to trade with Russia will be able to do it directly,” he added.
In practice, the system is unlikely to play out that way, analysts say.
In its first stage, the Digital Ruble will be a purely domestic payments system. The Central Bank has mentioned the possibility of using it for cross-border payments sometime in the future, but has not given any indication that it has started any serious effort in developing the required financial architecture.
That would require detailed bilateral agreements and technology sharing with other central banks, or some kind of unified clearing system for CBDCs. Both would take years to set up.
“The worries about the use of CBDCs to circumvent sanctions are currently exaggerated … It requires technical compatibility with other CBDCs. The cross-border central bank-to-central bank infrastructure isn't there yet,” said Maria Shagina, a senior research fellow for economic sanctions at the International Institute for Strategic Studies (IISS).
“In theory, if cross-border CBDC infrastructure is created with enough partners, it could be potentially used to circumvent the U.S. nexus and hence sanctions. But we are not there yet,” she added.
Even if the infrastructure were in place, two large barriers to widespread uptake remain: the toxicity of the Russian ruble as a currency, and sanctions fears in other countries about dealing with Russia.
“If people want to work around sanctions, they can already do that with rubles. The Digital Ruble doesn’t add anything. The problem is that nobody wants rubles,” said David Gerard, a blockchain researcher and author.
Russia has spent years trying to convince its trading partners — particularly in Asia — to switch to settling payments in rubles, but only recently has it had success in transferring some of its imports and exports payments into Chinese yuan.
Shagina says this switch to non-Western currencies, and the use of non-Western traditional payments systems — like Russia’s and China’s domestic alternatives to SWIFT — are much more realistic as a potential means to avoid sanctions than an untrusted blockchain-based Digital Ruble.
Moreover, using the Digital Ruble for Russia’s international trade doesn’t address the issue of companies outside Russia being targeted with sanctions — a factor even Russian analysts admit is a serious barrier.
“It’s impossible to rule out secondary sanctions against the central banks of Russia-friendly countries that carry out settlements with Russia in Digital Rubles. It could be interpreted by unfriendly countries as assisting Russia in circumventing sanctions,” the Stolypin Institute, a Moscow-based research center, wrote in a recent report.
For its part, the Central Bank has been cautious in pushing the Digital Ruble as a sanctions-avoidance tool, focusing mainly on its domestic functions. But that hasn’t stopped Russian lawmakers and analysts from talking up its potential — and that’s due to both domestic political reasons, and a lack of understanding about what the Digital Ruble actually is, Gerard says.
“People don’t understand that it doesn’t do anything that they can’t already do,” he told The Moscow Times.
“The sanctions nonsense is essentially this: They need something, the Digital Ruble is something, so they’re seizing upon it — whether or not it makes sense.” | Crypto Trading & Speculation |
From pot noodles to biscuits and chocolate desserts: The ultra-processed foods being promoted by NHS 'healthy eating' app after bombshell study linked them to cancer
- NHS Food Scanner describes biscuits, cakes and crisps as a 'good choice'
- Campaigners described revelation as 'astonishing' and demanded review
- The free app regularly recommends instant noodles and an energy drink
An NHS healthy eating app promotes ultra-processed junk food and describes biscuits, cakes and crisps as a 'good choice', an investigation has found.
Obesity campaigners last night described the revelation as 'astonishing' and demanded an urgent review of the NHS Food Scanner.
The free app, which has been downloaded more than half a million times, regularly recommends users buy ultra-processed products and even endorses instant noodles and an energy drink, the Soil Association discovered.
Ultra-processed food is made using ingredients or processes not found in a typical kitchen and has been linked to cancer, heart disease, depression and early death.
The free app, which has been downloaded more than half a million times, regularly recommends users buy ultra-processed products and even endorses instant noodles and an energy drink, the Soil Association discovered. It also says McVitie's Rich Tea Biscuits and Mr Kipling Bakewell Slices are healthy options
Products endorsed or recommended by the app include biscuits, cakes, crisps, chocolate puddings, fizzy pop, energy drinks and instant noodles
WHAT SHOULD A BALANCED DIET LOOK LIKE?
Meals should be based on potatoes, bread, rice, pasta or other starchy carbohydrates, ideally wholegrain, according to the NHS
• Eat at least five portions of a variety of fruit and vegetables every day. All fresh, frozen, dried and canned fruit and vegetables count
• Base meals on potatoes, bread, rice, pasta or other starchy carbohydrates, ideally wholegrain
• Thirty grams of fibre a day. This is the same as eating all of the following: Five portions of fruit and vegetables, two whole-wheat cereal biscuits, two thick slices of wholemeal bread and a large baked potato with the skin on
• Have some dairy or dairy alternatives (such as soya drinks), choosing lower fat and lower sugar options
• Eat some beans, pulses, fish, eggs, meat and other proteins (including two portions of fish every week, one of which should be oily)
• Choose unsaturated oils and spreads and consuming in small amounts
• Drink six to eight cups/glasses of water a day
• Adults should have less than 6g of salt and 20g of saturated fat for women or 30g for men a day
Source: NHS Eatwell Guide
British children have the highest levels of ultra-processed food intake in Europe, with under 14s getting two-thirds of their daily energy intake from this source.
The Government has encouraged parents to download the app to their mobile phone so they can make healthier decisions when food shopping.
Users scan the barcode on products to see how much fat, sugar and salt they contain, with those below a certain threshold awarded a 'Good Choice' badge.
If a product is deemed to be too fatty, sugary or salty, the app suggests 'Smart Swaps' that it considers to be a healthier alternative.
But the probe found health officials are failing to consider the processing food and drink has gone through before certifying them.
Suggested swaps often contain less sugar or fat than the scanned product but a long list of ingredients that would never be found in a home kitchen, such as emulsifiers, additives and artificial sweeteners.
Products endorsed or recommended by the app include biscuits, cakes, crisps, chocolate puddings, fizzy pop, energy drinks and instant noodles.
Tam Fry, from the National Obesity Forum, said: 'It is astonishing that an NHS healthy eating app is pushing this food without considering how it is produced.
'Everyone needs to eat a bit of fat, sugar and salt but it is how the food is processed that is the real killer. You can't look at these things in isolation.
'The government should be recommending healthy foods, such as fresh fruit and vegetables, rather than just more junk food with a little less sugar.
'This app needs to be reviewed as it certainly won't improve the nation's health in its current form.'
A Soil Association report into its investigation says a 'growing body of research' has linked ultra-processed food to ill health and weight gain.
It highlights studies that show the damaging effect industrial additives and processing techniques have on the gut microbiome and overall health.
This means these foods carry health risks even when relatively lower in fat, sugar and salt, the charity says.
It criticises the UK government for failing to follow other nations in adopting legislation or measures aimed at limiting intake of these foods.
The report adds: 'Despite the UK being one of the highest consumers of ultra-processed food and British children having the highest levels of ultra-processed food intake in Europe, these products have been ignored in UK government guidance addressing dietary ill health.
'Worse still, recent efforts to help parents and carers choose healthy products for their children have actually encouraged the purchase of ultra-processed food and drink.
'We have found products encouraging unhealthy snacking, artificially sweetened beverages and even energy drinks awarded the UK government's Good Choice badge and promoted as healthy swaps by its NHS Food Scanner App.
'Our campaign calls on UK government to stop taking the biscuit, remove their Good Choice badge from these products and support people to eat less ultra-processed food.'
Researchers from the Soil Association asked 17 parents to scan three food and drink products they regularly bought for their children and to note the 'Smart Swaps'.
Analysis revealed 104 of these products had been awarded a 'Good Choice', 'High-5 go go green' or 'Healthier Choice' badge but 80 per cent of these were ultra-processed.
Cathy Cliff, campaign coordinator at the Soil Association, said: 'We are shocked to see the government not only ignoring the health risks around ultra-processed foods but actively encouraging families to consume them.
'It seems like the government is more concerned about corporate profits than children's health.
'When every penny counts, it is near criminal that families are being misled to waste money on junk food that doesn't fill you up with anything other than health risks.
'The government's dietary advice is severely out of date and its failure to provide good advice is putting us all at risk.
'It is wrong that fizzy drinks and crisps are being promoted to children.
'The government is taking the biscuit. We are calling for them to cut the crap – stop telling families that ultra-processed is a good choice and show true leadership by helping us all to eat better.
'Other countries like France, Chile, and Brazil are taking action to make it easier for people to eat less of these unhealthy foods – why is the UK dragging its feet?'
Miss Cliff added: 'Many of the products given a thumbs up or high five by the NHS Food Scanner app are unhealthy, ultra-processed food and drink sold by some of the most popular British brands.
'The government's Better Health campaign has been linked to commercial food businesses from the start.
'With junk food manufacturers endorsed by the Good Choice badge, it is unforgivable that a public health campaign is at times benefiting food businesses more than families.'
Parent Rachel Childs, who completed the survey, and said: 'The NHS app doesn't account for level of processing and doesn't suggest switching to nutrient-dense foods – why buy biscuits slightly lower in sugar when I could be encouraged to buy fruit instead?
'It misses the whole idea of planning a nutritionally balanced diet.
'Just swapping processed foods for other processed foods misses concepts such as the need for dietary diversity and reducing snacking.'
A healthy living campaign run on TV, radio, streaming services and social media encouraged parents to download the app.
Promotional leaflets were also given to parents and carers at school.
The app has been downloaded more than 500,000 times according to the Google Play store.
However, this does not account for downloads via other app stores, including Apple, so the figure is likely to be significantly higher.
A Department of Health and Social Care spokesperson said: 'Diets high in ultra-processed foods are also high in calories, sugar, saturated fat and salt, which can cause chronic illnesses including cardiovascular disease, type 2 diabetes, and some cancers.
'The Food Scanner app helps families to see what's in their food and drinks and gives choices of products that can help them cut down on sugar, saturated fat and salt, including alternatives to family favourites such as biscuits, crisps and fizzy drinks.
'We are always looking to improve the app experience, including extending and personalising messaging around different food and drink categories and we welcome feedback from parents as well as organisations to aid us in this process.' | United Kingdom Business & Economics |
The culture and media secretary has intervened to scrutinise a sale of the Daily Telegraph and the Spectator magazine to a company backed by the Abu Dhabi ruling family.
The titles were taken over by Lloyds Bank as it sought to recover £1.1bn owed by the owners, the Barclay family.
An Abu Dhabi-backed firm this month agreed to pay the sum and take control.
It was understood that after the debt was paid to Lloyds, the titles would be passed on swiftly to the new owners.
Sheikh Mansour bin Zayed Al Nahyan, best known in the UK for his ownership of Manchester City football club, has thrown his considerable financial heft behind RedBird IMI, the investment consortium looking to take control of the Telegraph and the Spectator.
The consortium is run by Jeff Zucker, the former president of CNN.
As the BBC reported on Wednesday, the Secretary of State, Lucy Frazer, did not feel it appropriate to intervene in a debt repayment transaction.
However, as she has previously indicated and now confirmed, the transfer of the politically important titles to what is essentially a foreign power is a matter the UK government and other regulators need to scrutinise.
Jeff Zucker is a very experienced news chief and has hit back at any suggestion that the editorial independence of the Daily Telegraph, the Sunday Telegraph and the Spectator would be compromised by Gulf ownership.
But former editors, senior politicians and grassroots Conservatives have voiced grave concerns about the deal.
Simply put, the Barclay family, who have twisted and turned for many years from Lloyds to preserve their ownership of the Telegraph, have now replaced their Lloyds debt with a debt to the Abu Dhabi royal family.
Lionel Barber, the former editor of the FT, has pointed out that the UK has allowed a convicted fraudster, Conrad Black, to own the Telegraph and the son of a former KGB agent, Evgeny Lebedev, to own the Independent and the Evening Standard.
But former Telegraph editor Charles Moore insists that the nature of those involved here - a foreign state alongside a Tory-leaning paper - makes these circumstances different.
Sheikh Mansour is taking a financial risk in wiring the money to Lloyds when it is unclear whether he will ever get to take control of the assets he is paying for, but as someone close to the deal said, that seems to be "a risk he's willing to take". | United Kingdom Business & Economics |
NBFC Sector Q2 Results Review - Unsecured lending To Slow Down; Cost Of Funds To Rise In H2: Nirmal Bang
Our coverage universe saw strong growth momentum in affordable housing and consumer/ small and medium-sized enterprises lending.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
Our coverage universe saw strong growth momentum in affordable housing and consumer/ small and medium-sized enterprises lending. However, we expect a general slowdown in unsecured lending with Reserve Bank of India increasing risk weights, necessitating the need for enhanced capital buffers.
We revise growth estimates for bachelor of accounting and finance as it has a higher exposure to unsecured loans. Moreover, with a ban on equated monthly instalment cards, we expect near-term growth to be impacted till it is reversed.
We revise our target price to Rs 9,100 (from Rs 9,520 earlier), at 5.2 times September -25 adjusted book value factoring in lower growth.
We expect net interest margin to be under pressure on account of a further increase in cost of funds as bank credit/ non-convertible debentures become more expensive for all non-banking financial companies. However, CV financiers can use the priority sector lending refinance window and housing finance companies can offset the impact by raising funds from National Housing Bank.
In our view, while Q2 was a strong quarter for NBFCs in terms of growth, we will watch out for –
Growth guidance especially for unsecured loan portfolio in H2,
Cost of funds movement,
Asset quality trends.
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 |
To begin with, Abigail Barnes loved her voice assistant. Now it lives in the drawer.
"I used [my Amazon Alexa] to turn on the lights or set a timer, and as a speaker for books and podcasts," says the 43-year-old Londoner. "She turned my fan on and off during the heatwave and played me Christmas music in the winter."
Ms Barnes would ask her device to set alarms, tell her the time or for the weather forecast.
"I kept my first Alexa in the kitchen and, a few months later, I got a second Alexa and set it up in my bedroom."
However, Ms Barnes fell out of love with her voice assistants when they began giving her frequent delivery notifications, asking her to review purchases or prompting her to reorder items.
"It started giving me random updates or asking me to rate a product I'd bought last month," she says, "which I found really irritating."
She became concerned about conversation data "being stored in a cloud somewhere". Then she found the voice commands became unreliable.
"I stopped asking her to turn off the lights when I went to bed, as I'd ask a number of times and then manually turn them off anyway."
What started out saving her time, she says, quickly became something that cost time.
The Internet of Things (IoT) - the ever-growing network of physical objects connected to the internet - is increasingly becoming embedded in our lives.
There is a wide range of smart devices on the market from light bulbs, ovens and washing machines, to speakers, fitness trackers, toothbrushes and baby changing mats.
Voice assistants, such as Amazon's Alexa, Google Assistant and Apple's Siri, enable users to control IoT devices by voice command.
However, after several boom years, the big tech companies are making cutbacks, with their voice assistant units in particular trouble.
Amazon is in the process of cutting 18,000 jobs. Of those cuts 2,000 will fall on its devices and services unit, which develops Alexa and smart speakers.
Do these mounting losses and job cuts point to the downfall of the voice assistant?
When Alexa launched, Amazon pioneered a new business model. The goal wasn't to make money from selling the devices themselves but for shoppers to make purchases using the voice assistant.
In terms of engagement Amazon's voice assistant has been a success. Amazon says it has more than doubled the number of active Alexa customers over the last three years and Alexa has "billions" of interactions every week.
"Voice assistants have not become as socially sticky as promised," says Helen Jambunathan from consumer insights agency Canvas8.
"A number of factors have fed into this, including concerns about privacy."
In its defence, Amazon says it reviews only a tiny fraction of Alexa requests to help improve the service.
Add the cost-of-living crisis to this, she continues, and voice assistants have become a luxury item "unable to compete with other aspirational luxury or tech purchases".
When it comes to people with dementia, ADHD (attention deficit hyperactivity disorder), sight problems and mobility challenges, Alexa is "a game changer", says Eric Saarnio, international business lead for Amazon Alexa.
"Smart assistants are evolving - it's early days," he says. "We've come a long way over the past eight years and we're certainly not stopping. What we're doing can change people's lives."
Majesticare provides residential, nursing and dementia care, and is one of the UK's first care groups to introduce Alexa Smart Properties for Senior Living into their homes.
"It's just amazing to walk into a resident's room and know that they are listening to music they have chosen, or catching up on their favourite radio shows," says Angela Boxall, CEO of Majesticare.
Residents are able to connect with family and friends. They can ask for a drink, find out what's on the menu, or ask what activities are planned that day - simply by talking.
"Video calls with loved ones bring peace of mind," says Ms Boxall, "and [the residents have such] wonderful smiles when they see the ones they cherish."
While voice assistants might have found a useful niche in healthcare, their appeal in the broader market may be on the wane.
Abigail Barnes's Alexa won't be seeing daylight again any time soon.
"I do miss her," she says. "I may revisit her, but [if I do] I'll invest time in looking into the notification settings, and reading the terms and conditions." | Consumer & Retail |
Sam Bankman-Fried wasn’t just a crypto wunderkind, he was an ambassador for improving the world through effective altruism. And if you were wondering how he squared those values with all the lying he allegedly did during his time at FTX, wonder no more: the answer is utilitarianism.
Lying and stealing were permitted, as “the only moral rule that mattered would be maximal utility,” Caroline Ellison testified on her second day at Bankman-Fried’s fraud trial. I glanced over at his parents, Joseph Bankman and Barbara Fried, to see what they made of this; both appeared to be busy scribbling into legal pads. In any case, the approach apparently worked for much of Bankman-Fried’s life — right up to demanding doctored balance sheets for the company Ellison supposedly ran.
Bankman-Fried’s cavalier attitude toward lying rubbed off on her, Ellison testified. Ellison choked up a little as she went on: “When I started working at Alameda, I don’t think I would have believed you if you told me I would be sending false balance sheets to our lenders, or taking customer money, but over time, it was something I became more comfortable with.” Later, testifying about the days when the crypto hedge fund Alameda Research and exchange FTX fell, she cried.
Ellison’s second day of testimony delved into the collapse of Bankman-Fried’s empire. Though she answered her questions with the attitude of a student trying to get an A in a difficult class, during court sidebars — where the lawyers bickered with each other in front of the judge and out of earshot of the rest of us — she slumped into herself, looking forlorn. She wore a gray blazer over a white v-neck blouse with black dots tucked into a black skirt, and she still didn’t quite summon up the appearance of an executive. That made sense. The text messages we saw suggested she made few consequential moves without first consulting Bankman-Fried — not exactly a real CEO.
The day picked up with Ellison discussing May 2022, when crypto markets entered freefall as the Terra/Luna coins collapsed. Amid the chaos, lenders started demanding their funds back. We saw Telegram chats with employees at Genesis, a crypto lender, which was asking Alameda to return its money. There was a tick-tock of Alameda getting its loans called by lenders across the board. In June, Bankman-Fried directed Ellison to repay the loans using FTX customer funds, she said.
“I was in sort of a constant state of dread at that point.”
Ellison knew this likely wasn’t possible. FTX customer funds had been used to pay off those loans, she testified. If a large number of FTX customers withdrew all at once, the exchange wouldn’t have the money. “I was really stressed out,” Ellison said. “I was in sort of a constant state of dread at that point.”
Bankman-Fried’s defense lawyers seem to be teeing up the notion that the customer funds were still there, just in an investment portfolio. The problem is that putting those funds in an investment portfolio is still stealing the funds. Crypto exchanges aren’t banks; they don’t lend out customer money. At least, the honest ones don’t.
During opening statements, the defense suggested that the failures at Alameda were Ellison’s fault — and that Bankman-Fried acted appropriately given what he knew at the time. In order to prove fraud occurred, the prosecution must show that Bankman-Fried knowingly lied. And Bankman-Fried was cagey about what he put in print. He had the company set their Slack and Signal messages to disappear, resulting in a lot of blank Signal chats in previous court exhibits, and again today.
During opening statements, the defense suggested that the failures at Alameda were Ellison’s fault
Ellison said he told her not to put anything in writing that she wouldn’t want to see on the front page of The New York Times. She violated that rule with a set of memos about their relationship. Later, Bankman-Fried would literally leak them to that paper.
Still, it’s impossible to run a business without documents. So today we saw a lot of documents that back Ellison’s claims that she worked at Bankman-Fried’s direction, even if we didn’t actually see his directions.
Part of Ellison’s job was pulling together balance sheets — by definition, writing something down. Alameda’s original balance sheets included a row called “FTX borrows,” which she said marked the customer funds. She says she wanted to identify it — but didn’t feel she could do so directly. That original balance sheet did contain $4.59 billion in related-party loans to Bankman-Fried, Gary Wang, Nishad Singh, and others. This is where the justified lying came in.
Alameda tried opening accounts using the IDs of “Thai prostitutes”
In an attempt to “conceal the things on our balance sheet we thought looked bad,” Ellison says she made seven fake balance sheets to run by Bankman-Fried. The one we saw was dated June 19th, 2022. The “FTX borrows” and related party loans had vanished. Some of the money that Alameda had borrowed from FTX was put in long-term loans — a second lie on top of the first, since customers could withdraw at any time.
The balance sheet Bankman-Fried chose made Alameda look less risky than it really was and hid the FTX funds, Ellison testified. She sent the balance sheet to a contact at Genesis, the crypto lender, the next day. That person replied that he’d “just caught up with Sam btw” and suggested that they stay “in tight contact this week.” She was asked to repay $500 million in loans because Genesis was “basically in the position where this is no longer a luxury.”
Ellison offered some other examples of Bankman-Fried’s apparently casual attitude toward lying. For instance, when Alameda funds got stuck on two Chinese exchanges, Huobi and OKX, Bankman-Fried first tried using a lawyer to negotiate. When that failed, Alameda tried opening accounts using the IDs of “Thai prostitutes” in order to create transactions that would get the funds back. We didn’t get a lot of detail about that except that it didn’t work, and I nearly expired from curiosity right there in the courtroom.
Finally, Bankman-Fried directed the company to pay a bribe, over the objections of a Chinese employee, who Ellison says he told to “shut the fuck up.” Later, Bankman-Fried and another Alameda executive would mock that employee on Signal.
He also thought his famously wild hair was “very valuable”
Ellison also testified that Bankman-Fried’s famously slovenly personal appearance was an act of careful public relations. He wanted to project the image of a smart, competent, and somewhat eccentric founder. He found Twitter particularly valuable for controlling the narrative, she said. Bankman-Fried also made investments in Semafor and The Block, and considered investments in Vox and Forbes, she testified. (Ellison didn’t testify to this, but Bankman-Fried’s philanthropic foundation, Building a Stronger Future, awarded our sister website Vox a grant for a reporting project.)
“He said he believed in a very proactive approach to public relations,” she said. He also thought his famously wild hair was “very valuable” and had led to higher bonuses at Jane Street, she testified. In the courtroom, Bankman-Fried visibly shook while she said this. Though Ellison and Bankman-Fried initially had “luxury cars,” Bankman-Fried felt it would be better for his image to drive a Toyota Corolla, so he switched cars.
At least he did really sleep on a bean bag in the office, according to Ellison. This had been thrown into question by Bankman-Fried’s college roommate in earlier testimony.
Because PR was so important to Bankman-Fried, when Bloomberg was preparing a critical — and, it seems, prescient — article about the ties between Alameda and FTX, Bankman-Fried considered shutting Alameda down. Both Bankman-Fried and Ellison lied to the reporter to make the two companies sound more separate than they were. Also, to increase the appearance of separation, a venture fund was renamed to remove “Alameda,” even though that’s where the money was coming from.
In hand-written notes, Ellison outlined the problems with shuttering Alameda. Among them? Alameda’s job was “market making for shitty things” — which was how Ellison referred to creating liquidity for thinly-traded assets. Plus, Alameda was a backup liquidity provider for FTX.
“It was finally happening.”
Ultimately, they did nothing.
But Bankman-Fried was right to worry about reporters. On November 2nd, 2022, CoinDesk published an article presumably based on a version of Ellison’s doctored balance sheet. (I expect that if the reporter had seen insider loans, that might have been somewhere near the lede.) That kicked off a flurry of communication between Bankman-Fried and Ellison, which we saw because Ellison started preserving her messages. “I was terrified,” she said. “It was finally happening.”
Bankman-Fried thought the move was to make bold tweets, but he didn’t want to do it. Instead, Ellison did — writing in her own words a workshopped version of a tweet Bankman-Fried originally wrote, which began, “Heh, I see *someone* is really trying to FUD us.”
Of course, then Changpeng “CZ” Zhao jumped into the mix, saying he wanted to liquidate his remaining FTX token, FTT. After a discussion on Signal with Bankman-Fried, Ellison responded on November 6th that she would buy FTT at $22. An eventful few days ensued, which ended in Alameda’s and FTX’s bankruptcy.
We saw a remarkable text from Ellison as the collapse was happening. “This is the best mood I’ve been in a year tbh,” Ellison messaged Bankman-Fried. It’s not clear what date the screenshot came from, though Bankman-Fried was the source. Ellison cried looking at the messages. “To be clear,” she said, “that was overall the worst week of my life. I had a lot of mood swings that week, and a lot of different feelings.”
One of those feelings was relief. The truth coming out was “something that had been in my mind every day,” she said. The thing she’d been dreading had happened and “I didn’t have to lie any more.” She said she felt “indescribably bad” about all the people “who trusted us that we had betrayed.” A court clerk passed her a tissue.
Bankman-Fried was right. The things you put in writing can come back to bite you. Your awful ex-boyfriend might leak your diaries to The New York Times. In those notes — memos, really — Ellison discussed her concerns about her personal relationship with Bankman-Fried affecting their professional relationship. She felt like an unequal partner in their relationship. Today’s evidence suggested that was certainly true in their professional life.
It also suggested something else: the things you put in writing can, potentially, save you. It’s a lot harder to paint Ellison as the sole decision-maker when she’s got contemporaneous evidence that she didn’t make a move without running it by Bankman-Fried. | Crypto Trading & Speculation |
NEW YORK -- The Federal Reserve’s expected move Wednesday to raise interest rates for the 11th time could once again send ripple effects across the economy.
Mortgage rates, which have surged since the Fed began lifting rates in March 2022, could rise further. So could rates on credit cards and some business loans.
Perhaps no one has felt the pain more than car buyers. It's not just that sticker prices are way up. Or that lenders have tightened credit standards. On top of all that, steadily higher auto loan rates have elbowed many would-be buyers out of the market.
Consider: A study by the New York Federal Reserve has found that 14% of applicants for auto loans were rejected over the past year — the highest such proportion since the New York Fed began tracking the figure in 2013 — up from 9% in February.
Auto-loan applicants, of course, aren't the only borrowers being turned down in larger numbers these days. In that same June 2022-June 2023 period, applicant rejections for credit cards, mortgages, mortgage refinancings and higher credit card limits all rose, too, according to the New York Fed. Overall, the rejection rate for credit applicants reached 21.8 percent, the highest level since June 2018.
Some of those rejections reflect the subpar credit of loan applicants. But some are a direct consequence of the Fed's rate increases — the most aggressive in four decades. Those hikes, in turn, have made high-cost purchases out of reach for some.
HOW WILL BORROWERS BE AFFECTED BY THE FED'S LATEST MOVE?
Credit card rates are at or near all-time peaks, and mortgage rates have more than doubled in two years.
“No one should expect them to stop rising anytime soon,” said Matt Schulz, chief credit analyst of LendingTree. “Perhaps the scariest thing of all for folks with credit card debt is that interest rates are actually rising more quickly than the Fed is forcing them to.”
The average Annual Percentage Rate (APR) on a currently held credit card that charges interest is 22.16%, according to the latest data from the Fed. That’s up about 6 percentage points from the average rate in the first quarter of 2022. The average APR on a new credit card offer is 24.24%, the highest rate since LendingTree began tracking it in 2019.
Whenever possible, Schulz recommends that card users consider asking their issuers to lower their APR. LendingTree recently concluded that a majority of cardholders who had asked their card issuers for a lower rate received one. The average reduction was significant — 6 percentage points.
“It is well worth your time to make that call,” Schulz said.
I NEED TO BUY A CAR. WHAT’S THE OUTLOOK FOR AUTO LOANS?
Many people were already having trouble affording new vehicles before Wednesday’s expected quarter-point hike. The average price paid for a new vehicle last month was nearly $48,000 — about 25% above the pre-pandemic average. Used vehicle prices have jumped by even more: The average one now costs nearly $30,000, a stinging 45% above what it was before the pandemic.
In some cases, even people with good credit are being rejected for auto loans. The problem for them is that with vehicle prices up sharply, the additional burden of higher loan rates — from 4.5% on average in March 2022 to 7.2% in June — has made monthly payments unaffordable.
“I think people are just not able to qualify for the payments,” says Jessica Caldwell, executive director of insights for Edmunds.com.
The average monthly auto payment last month, she said, was $736. Over the life of an an average loan — just under six years — a typical borrower is paying nearly $9,000 in interest.
David Kelleher, who owns David Dodge-Chrysler-Jeep-Ram in Glen Mills, Pennsylvania, said he has seen loan rejections rise even in his affluent Philadelphia suburb, though not as much as they have nationally. The larger loan sums that borrowers are now financing, along with a small uptick in delinquencies, have made lenders more cautious.
“I think that’s probably making them tighten the reins a little bit,” he said.
Kelleher said he hopes the Fed stops raising rates after this week, given that vehicle prices, a key component of inflation, have begun to ease. Prices had skyrocketed in 2021, a result of high demand as the economy roared out of the pandemic recession and clogged supply chains caused a severe shortage of vehicles for sale.
“These interest rates," Kelleher said, “are really starting to hurt us.”
Still, Caldwell said she doesn't expect the Fed's latest quarter-point hike in its benchmark rate to significantly affect auto loan rates. With factories cranking out more autos and vehicle availability improving, she expects automakers to spend more to subsidize loan rates to help fuel sales.
Despite the rising cost burden, auto sales have remained relatively solid as prices have eased slightly and the supply of vehicles has grown: For the past two months, sales have hit an annual rate of 15 million.
WHAT’S IN STORE FOR SAVERS?
That's where the good news lies: Yields on savings accounts and certificates of deposit (CDs) have reached their highest levels in a decade, said Ken Tumin, a banking expert and founder of DepositAccounts.com. The average online savings account yield is 4.08%, up from 3.31% at the start of this year, according to DepositAccounts.com.
Even juicier yields are available from CDs. The average online one-year CD yield is now 4.89%, up from 4.37% on Jan. 1 and from a puny 1.90% one year ago. The average online five-year CD yield is 3.93%, down from 4.04% on Jan. 1, but up from 2.89% a year ago.
All that said, those richer yields might not last if price pressures across the economy ease further.
“If we continue to get good news on inflation in the coming months," Tumin said, “expect long-term CD rates to drift downward.”
WHAT ABOUT MORTGAGES?
If the economy does cool, Jacob Channel, senior economist for LendingTree, predicts that mortgage rates will end the year closer to 6% than to 7%. The current national average for a 30-year fixed-rate mortgage, according to Freddie Mac, is 6.78%.
Rates have fluctuated sharply this year. The average 30-year fixed rate, which had pierced 7% back in October, fell to just above 6% in early February before surging back to 6.96% in mid-July. On the heels of better-than-expected inflation data for June, the average mortgage rate has eased a bit again.
“This goes to show just how much mortgage rates can vary from week to week and how hard it can be to truly determine what trend they’re going to follow in the long term,” Channel said. “It’s likely that mortgage rates will continue to fluctuate in the face of the uncertainty that permeates today’s economy.”
IS THE FED MANAGING TO DEFEAT INFLATION?
The Fed has clearly achieved progress. Inflation, which peaked above 9% last year, was just 3% in June compared with a year earlier. That's thanks, in part, to easing prices for gasoline, airline fares, used cars and groceries.
Even so, current measures of inflation remain above the Fed’s 2% target. The result is that many households are still being squeezed by higher prices and struggling to afford basic necessities. Reducing inflation back to the Fed’s target level will require more time.
And that means high rates on consumer and business loans are likely to remain in place well into 2024.
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Krisher contributed from Detroit.
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The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism. | Interest Rates |
Chancellor Jeremy Hunt has refused to commit to tax cuts ahead of the next election, despite growing calls from inside his party.
His cabinet colleague Michael Gove told Sky News on Sunday that he wanted to see "the tax burden reduced" by the time the public goes to the polls.
But speaking to Kay Burley this morning, Mr Hunt said "big tax cuts now... would be inflationary", and "nothing is going to compromise the battle" to bring that figure down.
Politics live: Chancellor refuses to say if decision taken on HS2
Asked if we could see a headline tax cut before the next election, he said: "It's very difficult to see having that kind of tax cut this year."
The comments came ahead of the chancellor's speech to the Conservative Party conference in Manchester this afternoon, where he is due to announce a rise in the living wage and stronger benefits sanctions.
But it also came before the return of former prime minister Liz Truss to the annual event, where she will speak at the Great British Growth Rally to demand a cut in corporation tax - a policy that was part of her disastrous mini-budget just 12 months ago.
Some Conservative backbenchers have long called for tax cuts from Number 11 as the current burden on households is at a 70-year high.
But the row reignited on the first day of this year's conference after Mr Gove's remarks to Sky News - followed by Prime Minister Rishi Sunak's refusal to sign up for the pledge.
Pushed on whether there would be tax cuts ahead of the next election, Mr Hunt said: "I would love to see tax cuts for working people and obviously tax cuts for everyone.
"[However], if we gave big tax cuts now, that would put more money in people's pockets [but] that would be inflationary. And right now, we are in a big battle which is succeeding to bring down inflation." | United Kingdom Business & Economics |
Disabled people in England are finding themselves in severe financial hardship owing to rising social care costs and the increase in the cost of living.
Social care, unlike the NHS, is not free at the point of need. As disabled people are being forced to pay for their care out of their benefits, some are finding themselves thousands of pounds in arrears to councils. Others are having to give up essential care because they cannot afford the fees, or skip meals or hygiene products to pay for care.
Some of the readers affected spoke to the Guardian.
‘I’ve now got to find an extra £118.67 per week’
“I’ve been receiving social care for personal care, help around the home, and shopping since medically retiring from the civil service over a decade ago.
“My local council wrote to me in December 2022 stating that they had reviewed their care policy and that my care charges were to increase from £27.33 per week to £146. They offered me and others affected by the change in their policy transitional protection for 12 months. So from December this year, I have now got to find an extra £118.67 per week. I’ll be forced to be total financially dependent on my husband, who only works part-time so he can give me the additional care I need.
“I provided 13 receipts to my local council for my financial assessment, with a written explanation as to why it was necessary for me to buy or spend that money. On appeal, my council refused them all.
“I can’t believe that in the 21st century, disabled people are being treated in this manner. It’s archaic.”
Debra, 60, who has a congenital joint condition
‘I don’t know what I’m going to do as I can’t pay’
“I’ve never had to pay for my social care but in 2022 I received a letter from my local council asking me to pay around £2,000 for the year. I don’t have an income aside from my benefits, so to pay it I ended up selling things including silver trinkets from my christening. It was so stressful I couldn’t sleep at night.
“A long battle with cancer when I was a child had repercussions on my body, and recent major spinal surgery means I use a wheelchair. I have 29 hours of care a week and the help I get is my ticket to a life – full stop.
“Even with care, I use a food bank and eat one meal a day. A shower is now a treat.
“I’ve not been sent a charge for this year yet and I’m terrified of how much it will be. I don’t know what I’m going to do, as I can’t pay.”
Louise*, 37, has complex physical needs and mobility issues, from north Northamptonshire
‘I live in fear that debt collectors will knock on my door’
“In 2019 my local council asked me to pay £76 a week towards my social care from my benefits, but I was unable to pay. Six months ago they said it’s now £90 a week.
“I’ve been able to push back on the understanding that I will complete a continuing healthcare application to apply for NHS funding and, depending on the result, either pay for the care or submit a new financial assessment and contribute what I can. I suspect I now owe around £30,000-40,000.
“I worked full-time for most of my life but had to stop 11 years ago when my health deteriorated – I use a ventilator to help me breathe when I sleep. I never asked to become seriously unwell and now I feel like a leech on the system.
“I receive six hours of care a day from an amazing company who help with medication, hygiene and cleaning. I would be lost without them. I get £1,200 a month for employment and support allowance and personal independence payment, including a severe disability premium. It’s still not enough with the cost of living and I’m paying for bills using credit cards.
“I feel under enormous pressure and I live in fear every day that debt collectors will knock on my door.”
Mac, 35, former manager who has multiple heart, endocrine and immune conditions, from Essex
‘I can’t even afford sanitary supplies’
“I haven’t had any social care since 2006 because it costs too much. I get around £450 a month in benefits, and Asda’s Just Essentials chicken soup has been my saving grace as I can eat it with frozen veg and bread. It used to be 23p a can but it’s now 45p, which has crushed me.
“How can people work if they don’t even have food in their stomachs? That’s the level of poverty people like me are facing. I used to work, but my hands are so bad I can’t write at all. I have hypermobility and my joints constantly pop out and don’t always go back in. I need support getting to the shower, cleaning and doing things in a timely manner. It’s not that I can’t do those things, but it’s not easy. It would be nice to be able to afford support and care.
“I’m going through menopause which is not great. It’s also expensive and I can’t even afford sanitary supplies. The anxiety of not knowing how to pay for things causes more and more distress.”
Rachel*, 49, full-time student who has hypermobility and fibromyalgia, from London
*Some names have been changed. | United Kingdom Business & Economics |
Britain’s squeezed “sandwich generation” is being forced to foot the bill for a surge in inactivity among older and younger workers, the Bank of England’s former chief economist has said.
Andy Haldane, who is now chief executive of the Royal Society of Arts, warned that soaring long-term sickness was piling ever greater demands on those aged between 35 and 50.
He said: “Right now we’ve got pressures among the young and pressures among the old, and that’s putting pressure on those in the middle.
“The sandwich generation are footing the bill of supporting both the young and the old in financial and non-financial terms.”
The post-pandemic rise in sickness means people aged between 35 and 50 are having to pay higher taxes and take on far greater caring responsibilities, he said.
The UK is one of the only advanced economies where the share of people in work or looking for a job remains lower than before Covid.
Official data published last week showed more than 2.6 million Britons are currently out of work because of long-term sickness.
They now account for 29.6pc of the population who are neither in employment nor looking for a job, up from 25.2pc before the pandemic.
Mr Haldane pointed to NHS data which showed one in five 17 to 24-year-olds reported a mental health condition in 2022.
He said: “Our education system is very badly failing very large fractions of our young people. And because that then generates poor prospects for jobs and lifestyles, it contributes reactively to those mental health problems.”
He added that the UK was desperately in need of greater investment to avoid “the blight of short termism” that was leading to “crumbling schools”, “congested roads” and overburdened hospitals.
Mr Haldane said he was particularly concerned about the lifetime implications for young people unable to start or stay in work because of mental health conditions.
He added: “We know that health and inactivity problems are very persistent. If you drift into ill health, or if you drift into unemployment inactivity at an early age, it hugely increases the chances of you facing this problem throughout your life.”
The UK’s employment rate remains 1.1 percentage points below where it was prior to Covid at 75.5pc.
Some 462,000 people dropped out of the labour force because of long-term sickness from 2019 to 2022, according to the ONS. This was more than 10 times the predicted increase of 40,000 because of people living longer.
A surge in early retirement during the pandemic has also contributed to Britain’s growing economic inactivity, with the number of Britons aged 50 to 64 out of work growing by 300,000 to 3.5 million since pre-Covid levels.
Jeremy Hunt, the Chancellor, has been battling to get early retirees back to work and plug shortages in the job market.
Mr Haldane added that the UK should reassess how it views its ageing population.
He said: “People living longer lives as long as they are healthy and active, that’s a good thing.
“When you look at the skill system, our skill system is simply ill equipped to re-equip a 50 to 60-year-old to retrain to re-enter the world of work. We should look at ageing as an opportunity, not a threat economically, and one that delivers a growth dividend not a growth drag.”
Separately, Mr Haldane warned that borrowers face a painful return to higher borrowing costs, as interest rates are unlikely to fall back to the post-financial crisis lows of the past 15 years.
It comes ahead of the Bank of England’s meeting on Thursday, which is expected to see policymakers raise rates for the 15th consecutive time to 5.5pc.
Mr Haldane said that interest rates will likely settle around their current level in the long term, meaning borrowers are unlikely to see the cheap mortgage deals of the past 15 years again.
He said: “What we’re seeing now is interest rates returning to something that’s closer to a sort of normal level.
“I don’t think that the normal is the sort of 0pc, 1pc, 2pc that we’ve seen over the last couple of decades but probably somewhere closer to the levels we see right now.”
Mr Haldane, who was chief economist of the Bank from 2014 to 2021, said the odds of the UK falling into recession had risen in recent months.
The “lion’s share” of the Bank’s monetary tightening was yet to make its way through to people’s bank accounts, he added.
Mr Haldane said: “The savings pool has evaporated, if it existed, for a great many people. So if they are paying an extra £1,000 or £2,000 or £3,000 on their mortgage that will have to come from lower spending elsewhere.” | United Kingdom Business & Economics |
Here's what the shopping weekend tells us about the state of the economy
JUANA SUMMERS, HOST:
Americans say they worry about the economy, but they are really shopping. The busiest retail weekend of the year ends today, and that is paving the way for a record holiday season. What does this all tell us about the state of the American shopper? NPR's Alina Selyukh is here in studio to explain. Hi.
ALINA SELYUKH, BYLINE: Hello, hello.
SUMMERS: All right, Alina, what did we learn about the state of the economy over Black Friday and today on Cyber Monday?
SELYUKH: Well, let me tell you about a little microcosm that I personally witnessed. I went to two outlet malls in eastern Maryland on Black Friday, and I waited more than 20 minutes just to park.
SUMMERS: Oh.
SELYUKH: There were roadblocks diverting traffic. There were people walking for, like, a mile on foot with their shopping bags to get to their cars. It was mayhem at Old Navy.
SUMMERS: This sounds wild. It does not sound particularly fun. Go on.
SELYUKH: So to summarize, Americans might say they're really anxious, but they are splurging for the holidays. We have been seeing this for over a year now. People will say they are concerned about the economy broadly, but then they're still going on trips and going out to eat individually. And we are spending more on holiday gifts. We don't have all the data for the long weekend yet, but we know Black Friday has already set a record on top of last year's record. Just online, people spent $9.8 billion on Black Friday, which is more than last holiday. And that's according to Adobe Analytics. It's a firm that tracks online transactions. And the firm is forecasting another 10 billion in spending for Cyber Monday - also more than last year. Add in all the offline spending, and we are on track for a record holiday season again.
SUMMERS: OK. So how well then are people's budgets prepared for all of the spending that we seem to be doing?
SELYUKH: Yeah, people are definitely price-conscious. I actually think that's part of the reason why Black Friday and Cyber Monday are so big this year. People are hunting for bargains. And so a lot of folks, I think, waited for these big discounts. And these are best prices of the year. We're also swiping credit cards more. We paid them off during pandemic lockdowns. Then we started charging them again. And now more people are falling behind on their credit card bills, though economists do say credit card debt is still pretty low by historic standards.
SUMMERS: Right. And, I mean, I'm thinking here, many folks, like me, are once again facing those student loan payments that started back up. And with inflation, prices for everything are higher. How does that all add up to us getting a record shopping season?
SELYUKH: Yes. Well, to note, some prices are coming down. But overall, economists will point to one really powerful thing, and that is people have jobs. Here's what I heard from Michelle Meyer, who is the chief economist for North America at the Mastercard Economics Institute.
MICHELLE MEYER: What's happening in the labor market - absolutely the No. 1 dynamic. Because if people are employed and they believe they'll continue to have their job, they'll have income creation, that's the biggest driver for spending.
SELYUKH: So unemployment has been near record lows. People might feel anxious, but companies are hiring and wages have been growing. And that's big. As a nation, we are getting paid more. And Meyer says our raises are actually outpacing price increases, which is something new this holiday season compared to last.
SUMMERS: OK, Alina, so is the takeaway here that we all say we're worried but we're actually secret optimists?
SELYUKH: I think old habits die hard is another one. The word that's been coming up talking with economists is a reset. Like, we're resetting to a version of an even keel after the wild swings of the pandemic economy and, you know, sitting in traffic jams and parking lots in front of stores.
SUMMERS: Indeed. NPR's Alina Selyukh, thank you.
SELYUKH: Thank you.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record. | Consumer & Retail |
- Summary
- Companies
- EU to make companies tackle millions of tonnes of waste
- Inditex invests 3.5 million euros in Spain garment reuse
- Large scale textile recycling faces big challenges
BARCELONA/LONDON, Sept 1 (Reuters) - In a warehouse on the outskirts of Barcelona, women stand at conveyor belts, manually sorting T-shirts, jeans and dresses from large bales of used clothing - a small step towards tackling Europe's towering problem of discarded fashion.
Within a year, the sorting centre run by garment re-use and recycling charity Moda Re plans to double the volume it handles to 40,000 metric tonnes annually.
"This is just the beginning," said Albert Alberich, director of Moda Re, which is a part of Spanish charity Caritas and runs Spain's biggest second-hand clothing chain.
"Increasingly we are going to turn used clothes into raw material from Europe for fashion companies."
Partly funded by Zara-owner Inditex (ITX.MC), Moda Re will expand sites in Barcelona, Bilbao, and Valencia, in some of the first signs of a planned ramp-up in garment sorting, processing, and recycling capacity in response to a barrage of new European Union proposals to curb the fashion industry.
Also in Spain, rivals including H&M, Mango and Inditex have created a non-profit association to manage clothing waste, responding to an EU law requiring member states to separate textiles from other waste from January 2025.
Despite such efforts, less than a quarter of Europe's 5.2 million tonnes of clothing waste is recycled and millions of tonnes ends up as landfill every year, the European Commission said in July.
Precise data on the growth of clothing waste is scarce but collection for recycling and reuse increased gradually in several European countries from around 2010, a 2021 EU report said.
Fast fashion, or making and selling cheap clothes with a short lifespan, is "highly unsustainable", the Commission said in July. The textile industry is a major contributor to climate change and environmental damage, it noted.
Inditex, which in March said it placed 10 percent more items of clothing on the market globally last year than in 2021, aims to use 40% recycled fibres in garments by 2030 as part of sustainability goals announced in July.
"The main problem that we are facing is overconsumption," said Dijana Lind, ESG analyst at Union Investment, Frankfurt-based asset manager that holds shares in Adidas (ADSGn.DE), Hugo Boss (BOSSn.DE), Inditex, and H&M (HMb.ST).
Lind said she had been engaging with Adidas, Hugo Boss, and Inditex about the need for those companies to increase their use of recycled textiles, and for the apparel industry as a whole to increase textile recycling.
Hugo Boss said in a statement to Reuters that "overproduction and overconsumption are, in general, an industry-wide problem," adding that it was using data analysis to better adjust production to demand.
Between 6 and 7 billion euros of investment will be needed by 2030 to create the scale of textile waste processing and recycling that the EU is aiming for, consultancy McKinsey estimated in a report last year. Reuters could not establish what level of investments were currently being made in the industry.
Lind said companies had introduced some first steps but "more needs to be done."
Inditex said it would invest 3.5 million euros in Moda Re over three years and had recycling containers in all its Spanish stores. It did not respond to a request for comment on the suggestion it needed to do more.
In a statement to Reuters, H&M said it recognized it was "part of the problem."
"The way fashion is produced and consumed needs to change – this is an undeniable truth," H&M said.
OBSTACLES
The obstacles to significantly reducing clothing waste are formidable, despite the EU crackdown, industry sustainability commitments and initiatives like the Moda Re expansion.
Hundreds of similar plants, along with investment in technology and market interventions will be needed to meet industry goals to recycle 2.5 million tonnes of textile waste by 2030, McKinsey said in the report.
Fourteen textile recycling companies in Europe have plans to increase their production capacity, according to Fashion For Good, a recycled fibre start-up investment company that surveyed 57 recyclers in a September 2022 report.
The EU has not set specific targets for recycled content in garments, but by 2030 aims for all textile products sold in the bloc "to a great extent" be made of recycled fibres, as well as being durable, repairable and recyclable.
To create the capacity to meet the goals, ReHubs Europe, an association set up by garment lobby group EURATEX, promotes investments in "fibre-to-fibre" recycling: processes that turn used garments into yarn to make new textiles.
EURATEX did not immediately respond to a Reuters question about the level of investments made in the technology.
Less than 1% of clothes are currently recycled in this manner and the processes are still being developed. Challenges include separating different types of fibre into feedstock suitable for recycling.
With such techniques still in their infancy, the higher cost of recycled fabric compared to new fabric remains a barrier to widespread adoption.
AFRICA AWASH
At the Barcelona plant, garments arrive from more than 7,000 donation bins in supermarkets and Zara and Mango stores. Infrared machines donated by Inditex identify the fibre make-up of garments to speed up the largely-manual sorting.
Currently around 40% of the clothes Moda Re receives are sent to other facilities for recycling. Of that, just a fifth is then recycled fibre-to-fibre, a share that Moda Re expects will grow to 70% over the next three to four years.
For now, most of the recycling is instead for lower grade products like dishcloths.
Almost half the clothes donated to Moda Re are shipped for resale in African countries including Cameroon, Ghana, and Senegal. Moda Re says the clothes it exports can be reused.
According to United Nations trade data, the EU exported 1.4 million tonnes of used textiles in 2022, more than twice as much as in 2000. Not all those clothes get reused, and exports of used clothes from Europe to Africa can lead to pollution when clothes that can't be resold end up in dumps, the EU has said.
Proposed European Commission rules seek to clamp down on unscrupulous operators that export damaged items destined for dumps, and would require countries to demonstrate their ability to manage the material sustainably.
Moda Re said it aims to reduce the volume of clothes it sends to Africa.
Only 8% of the donations are currently resold at Moda Re's second-hand shops, the method widely seen as the more efficient way of reusing old clothes. A similar amount ends up as European landfill.
The company aims to double the amount it resells by expanding to 300 second-hand shops in Spain over the next three years from just over 100 presently, it told Reuters.
Despite the challenges, employees at Moda Re said they felt their work was positive.
"We take the clothes that have been thrown away to make new clothes," said Aissatou Boukoum, a young Senegalese worker, feeding garments through a machine that slices them into ribbons to be sent for recycling. "For me, it is good."
COMPANY RESPONSIBILITY
As well as the efforts by Inditex, Puma (PUMG.DE) has partnerships with garment collecting and sorting companies I:CO in Germany, Texaid in Switzerland and Vestisolidale in Italy.
The Commission's legislative push includes rules to make retailers contribute to the cost of collecting used clothes for reuse and recycling.
Under the proposed rules, retailers would pay a fee of roughly 12 euro cents per item for each garment sold in the bloc, with higher rates for garments that are harder to recycle, the Commission estimated in July.
As in Spain, textile waste associations would be set up in each country. In France this system has already been in place since 2008 under an organisation called Refashion.
Reuters asked ten leading fashion companies including Adidas, H&M, and Primark how the fees would hit their profitability. None provided an estimate. All said they hoped the fees would be the same across the EU.
"It's a tsunami of legislation," said Mauro Scalia, director of sustainable businesses at EURATEX.
Reporting by Corina Pons in Madrid, Helen Reid in London; Additional reporting by Horaci Garcia and Nacho Doce in Barcelona and Kate Masters in New York; Editing by Frank Jack Daniel
Our Standards: The Thomson Reuters Trust Principles.
Read Next
- SportsYonex debuts partly recycled sneakers at badminton World Championships
As the world's best badminton players travel home after the World Championships in Denmark, the sport's leading manufacturer Yonex told Reuters some of them were fighting it out for the first time in sneakers made partly from recycled materials. | Europe Business & Economics |
In this week’s edition of The Interchange, we get into M&As in the fintech space as AngelList nabbed a startup and Uplift got bought for less than it raised in venture funding. We get into those deals and much more. Want to receive this in your inbox every Sunday? Sign up here.
Shopify’s credit bet, Jeeves’ update and AngelList’s second buy
Last week, Shopify announced a new offering — Shopify Credit, a business credit card designed exclusively for its merchants. The new product marked Shopify’s first pay-in-full business credit card, said Shopify president Harley Finkelstein. It is powered by Stripe and issued by Celtic Bank, “and accepted everywhere Visa is,” he added. My editor and I were intrigued by the fact that Shopify insisted it would charge no fees — no late fees, no foreign transaction fees, and no interest. But upon further digging into the fine print, as fellow fintech enthusiast Sar Haribhakti tweeted about, it turns out that Shopify is also describing the new offering as a “pay in full credit card.” So, merchants have 25 days after the close of their monthly billing cycle to pay their balance. And if they don’t? Well, according to Shopify’s website, the card will be locked and the merchant won’t be able to make any new purchases until the balance has been repaid. That explains how/why the company is not charging any interest! Unfortunately, I was traveling early last week and didn’t get to actually speak to Harley — our interview was over email, and somehow this little tidbit of information got left out. It certainly was not something that Shopify publicized. It feels like retail/commerce companies deciding to go into the credit card space should proceed with some caution, though, if Apple’s experience is any indication. The Information did a deep dive last week on how “the tech giant and the Wall Street titan went from ‘the most successful credit card launch ever’ to Goldman trying to exit the partnership.”
I also gave us an update on fintech startup Jeeves, which did something that us reporters wish more (actually, all) private companies would do — share financials. We’ve been covering the goings-on at Jeeves since the startup first emerged from stealth in July of 2021, announcing $131 million in debt and equity financing from investors such as Andreessen Horowitz (a16z). It then announced a $57 million Series B exactly three months later. Jeeves is among the many players in the corporate card space — but CEO and founder Dileep Thazhmon believes it’s got an advantage over competitors in that it can serve clients in Latin America (its biggest market) and other regions by offering cards that can be paid in local currencies. That’s a big deal, he says, because businesses can save money on foreign transaction fees, for example. He told us: “This is a really big differentiator because it means we’re the only expense management company that can issue local cards in Latin America, North America and Europe. It takes time to build rails in other countries. If you look at U.S.-based expense management platforms, they cannot onboard a company headquartered in Mexico. If you look at Mexican expense management providers, they cannot onboard a company [that] is headquartered in the U.S. Jeeves can do both.” Read about how Jeeves entered 2023 with annualized revenue of $40 million, its recent expansion beyond corporate cards into prepaid cards and cross-border payments, and what its plans for the future are here.
I also got the exclusive on some big news out of AngelList — its purchase of fintech startup Nova and formal expansion into the private equity space. I talked both with AngelList CEO Avlok Kohli and Nova founder Pradyuman Vig about how the deal came about and what the expansion means for the organization. On Friday’s episode of the Equity podcast, Alex Wilhelm, Kirsten Korosec and I dug into what some might consider an unexpected move for AngelList — which has historically served early-stage investors. Hint: We thought it might have a little something to do with its 2022 raise that was co-led by a global investor that rhymes with Kiger. Private equity talk aside, it’s always cool to see a young founder with not just one exit under their belt, but two — by the age of 26. — Mary Ann
Weekly News
What do caregiving and divorce have in common? Financial stress for employees. This week, Christine reported on Helpful raising $7.5 million. The new app brings together insurance benefits, medical records and caregiving resources into one dashboard.
As reported by Manish Singh: “The world’s largest asset manager is re-entering India — and it’s doing so in a partnership with Asia’s richest man. Jio Financial Services and BlackRock have struck a deal to form a joint venture, called Jio BlackRock, aimed at serving India’s growing investor base. BlackRock and Reliance’s finance unit are targeting an initial investment of $150 million each into the new 50/50 venture, which will seek to offer tech-enabled access to ‘affordable, innovative’ investment solutions for millions of investors in India, they said.” More here.
Dan Macklin, co-founder of SoFi, has joined Summer as president to help more students and families navigate and reduce student loans. TechCrunch reported on his original departure from SoFi here.
We spotted a tweet (or whatever it’s called now) by Forbes’ Alex Konrad this week about his interview with Victor Lazarte (the former CEO of Brazilian games startup Wildlife Studios), who is Benchmark’s newest equal partner. Lazarte told Forbes that he will invest broadly but has an interest in startups in games, consumer and fintech. TechCrunch’s Connie Loizos caught up with Benchmark’s Miles Grimshaw in June to discuss AI investment. More here.
Also, feds raised rates, and now some fintechs are doing so, too. Wealthfront announced on X that the rate on its “Cash Account” is increasing to 4.80% APY (annual percentage yield), up from 4.55% through its partner banks. If you refer a friend, you get 5.30% APY. Perhaps an interesting note is the up to $5 million FDIC insurance (and $10 million for joint accounts) being offered. Not to be outdone is Robinhood, which also announced via X that it was offering 4.9% APY on accounts that were FDIC-insured up to $2 million through program banks.
What else we’re reading
Fundings and M&A
Seen on TechCrunch
Upgrade acquires travel-focused BNPL startup Uplift for a song (This is particularly notable considering that Uplift got acquired for far less than it raised over its lifetime.)
Seen 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 |
Good aims to defund White House’s climate jobs initiative in new bill
The Virginia representative offered new legislation Friday that would prevent the Biden administration from using federal appropriations to fund its planned 20,000-person climate workforce initiative.
The White House’s plan to establish a climate-based workforce initiative is little more than a month old, and now there’s a bill in the House of Representatives proposing to block spending on it.
Rep. Bob Good, R-Va., introduced the No American Climate Corps Act in the House on Friday, seeking to prevent a program that aims to offer skills-based training to more than 20,000 people, as well as the Biden administration’s Justice40 initiative, from receiving any federal funding.
“Instead of recognizing that family budgets are already stretched thin by sky-high energy prices, President Biden is focused on deploying a climate army that will increase regulatory burdens on business owners and drive inflation across the economy even higher,” Good said in a statement. “My bill will fight Biden’s climate extremism and continue our work towards the goal of American energy independence.”
The White House introduced the American Climate Corps on Sept. 20 as a plan to offer job training and service opportunities for careers centered on “conserving and restoring our lands and waters, bolstering community resilience, deploying clean energy, implementing energy efficient technologies and advancing environmental justice.”
The program was part of the Biden administration’s Justice40 initiative — which aims to make 40% of the overall benefits of certain federal investments go to underserved communities impacted by climate issues and pollution — and planned to use AmeriCorps’ Segal AmeriCorps Education Awards grants to boost enrollment towards a targeted 20,000 people in its first year.
Under the plan, the departments of Labor, Interior, Agriculture and Energy would sign a memorandum of understanding with the National Oceanic and Atmospheric Association and AmeriCorps to help create what White House officials call an “American Climate Corps hub” that will help coordinate federal recruitment.
The Office of Personnel Management would also use proposed rulemaking to help speed pathways to jobs in supported state, local, or tribal service programs, and the American Climate Corps will coordinate with established climate programs in five states and additional incoming state programs.
In October, the GOP-controlled House Oversight and Accountability Committee sent a letter to AmeriCorps CEO Michael Smith, inquiring about the agency sources of funding and expenditures of the program, asserting that the White House established it without congressional authorization and without clear guidance for how it would pay for it.
House Republicans also passed an amendment to an appropriations bill that would block federal funding for the ACC, but it is unlikely to advance in the Democrat-controlled Senate.
Good, a member of the House Freedom Caucus, said the policy was part of investments driving “hyperinflation” on the American public and the proposed 20,000 ACC would be tasked with implementing “Biden’s radical ‘environmental justice’ and green energy systems.”
The bill has been referred to the House committees on Energy and Commerce, Natural Resources, Education and the Workforce and Oversight and Accountability.
NEXT STORY: House proposes slashing $4B from the EPA | Renewable Energy |
The home secretary has said that "we're not going to save the planet by bankrupting the British people" in response to reports the government is looking at watering down its green pledges.
Among the changes being considering are the pushing back of a ban on the sales of new vehicles with internal combustion engines from 2030 to 2035 - and a weakening of plans to phase out gas boilers by 2035.
Suella Braverman told Sky News that, while the government remains committed to the goal of achieving net zero by 2050, "we need to put economic growth first".
Politics latest: Tory row as Sunak set to delay net zero policies
"We need to put household costs and budgets first. We need to put the cost of living first," she added.
"And we're only going to achieve that net zero target whereby people and the British people can go about their daily lives using their cars, using the facilities that are available."
Prime Minister Rishi Sunak is set to lay out further details in a speech in the coming days. The reported change in stance has led at least one Tory MP to "seriously" consider putting in a letter of no confidence in Mr Sunak's leadership.
In a statement released last, Mr Sunak said: "No leak will stop me beginning the process of telling the country how and why we need to change.
"As a first step, I'll be giving a speech this week to set out an important long-term decision we need to make so our country becomes the place I know we all want it to be for our children."
Conservative MPs are particularly angry at the potential delay to the ending of the sale of internal combustion engines to 2035.
One branded the move "anti-business" given how much has been invested into electric vehicles.
What will the PM's net zero review look like? Ever since the surprise Tory Uxbridge by-election victory, attributed to the party's opposition to the ULEZ congestion charge scheme, Rishi Sunak has been reviewing the government's net zero commitments. The PM has personally long been cautious about the costs that tackling climate change will impose if done too hastily, and is, it appears, keen to seize the opportunity to do something he believes will go down well with parts of the Tory voter base after a rocky six weeks. What will that look like? We already know the headline conclusion of that review, since new Energy Secretary Claire Coutinho spelled them out in an article in The Sun at the weekend. She made clear - as No 10 does tonight - that the party will remain committed to reaching net zero carbon emissions by 2050. However, this was coupled with a new promise that no "hard-working families [would be] forced to change their lives or have extra financial burdens put on them," as she puts it. That rang immediate alarm bells amongst environmental groups on Sunday. Now we are about to find out how that complicated circle is squared - and the questions that change in approach will raise. Two big areas have to change in order for Britain to meet its net zero obligation. One is in the home - ending the dependence on gas boilers to heat the majority of British homes while making them more energy efficient; the other is moving away from petrol and diesel cars towards electricity powered vehicle The targets designed to drive both those changes look as if they are about to be softened.
They told Sky's deputy political editor Sam Coates that a push back on the petrol and diesel ban would mean breaking a promise the prime minister made to Conservative MPs privately.
One minister said they would be "staggered" if the ban was delayed, telling Sky News: "Every automotive company is investing in EV, we've just given Tata all this money to make batteries, it's bonkers."
This breaking news story is being updated and more details will be published shortly.
Please refresh the page for the fullest version.
You can receive Breaking News alerts on a smartphone or tablet via the Sky News App. You can also follow @SkyNews on X or subscribe to our YouTube channel to keep up with the latest news. | Renewable Energy |
Liz Truss has launched a broadside against Rishi Sunak, claiming he has spent £35 billion more than she would have as prime minister.
In her first major intervention on the economy since she was ousted from office, the former prime minister will suggest on Monday that Mr Sunak was wrong to throw extra money at areas of the public sector like the NHS and schools.
The comments are likely to reopen wounds within the Conservative Party and reignite debate about whether the Government should pursue immediate spending reductions.
Two Cabinet sources told The Telegraph they thought Mr Sunak would have to find savings to deliver pre-election tax cuts.
In a speech at the Institute for Government on Monday, almost one year on from her ill-fated mini-budget, Ms Truss will claim that spending would have been £35.5 billion lower over two years if her plans had been carried through.
She will suggest that Mr Sunak was wrong to grant extra money to public services last autumn and in the spring Budget.
Ms Truss is expected to say: “What I sought to do was change the trajectory of spending by holding spending down and not allowing any new spending to take place over the coming spending review period.
“Not reopening the spending review represented a tough approach on spending, given the levels of inflation.”
According to Ms Truss, such a decision would have saved £13.6 billion in 2023-24 and £12.3 billion in 2024-25 compared with additional commitments Mr Sunak made relating to the NHS, schools, childcare and defence.
Ms Truss also confirmed that she had wanted to “increase welfare benefits by wages and not prices” – a move that would have saved £9.6 billion over two years.
However, she was prevented from seeing through the policy last October after senior Tories including Penny Mordaunt broke ranks to oppose the idea.
The former prime minister will claim that the benefits policy and not reopening the spending review would have meant that “compared to what we are spending now, we would have saved £18.4 billion in 2023-24 and £17.1 billion in 2024-25”.
But she will add: “Even those modest savings did not command the support of the parliamentary party.
“It is a very serious issue for those of us who want to see smaller government that currently making significant changes to spending simply doesn’t have enough political support.”
The intervention is likely to exacerbate the divisions which have simmered among Tories since Boris Johnson’s removal, the acrimonious leadership battle between Mr Sunak and Ms Truss, and her resignation after the mini-budget.
‘Catastrophic premiership’
A Cabinet source told The Telegraph: “After the most catastrophic premiership in the history of the country, she wants to find a way of justifying herself.”
However, when asked whether the Government would have to find spending cuts before the election to pay for a tax giveaway to voters, the source said: “I suspect we will.”
A second Cabinet source claimed that Ms Truss’s “maximalist” spending to subsidise energy bills had been part of her undoing.
But the source agreed with the need to find cuts to pay for tax reductions, saying voters needed “some reason to vote Conservative”.
“Having some tax cuts before the election is very important,” they said. “I do think that although they haven’t said so publicly, that is what Rishi and Jeremy [Hunt] are trying to do.”
A source in Conservative Campaign Headquarters meanwhile hit back at Ms Truss. They said: “Liz Truss had the opportunity to cut spending. She didn’t. She had the opportunity to cut benefits. And she didn’t.
“I’m not sure giving less money to hospitals, schools and policing is the winning electoral strategy she thinks it is.”
Disputing Ms Truss’s claims, a Whitehall source said that by reforming her energy price guarantee for households alone, Mr Sunak’s government had “saved taxpayers triple what she claims she would save by not giving extra funding to schools and hospitals”.
However, a number of Tory MPs said they agreed with the former prime minister.
One former member of her Cabinet said: “Liz’s ideas when it comes to the economy were absolutely the right ones.
“We’ve got a Conservative leader who at times seems like a Labour leader.”
Call for lower taxes
Meanwhile, Sir John Redwood, the veteran backbencher, said “spending control” was “crucial to economic revival and growth”, while Craig Mackinlay, the South Thanet MP, said: “The drive now should be lower tax on the back of lower spending.”
However, David Davis, the former Cabinet minister, claimed Ms Truss had discredited her own arguments.
“When people ask me why I didn’t vote for Truss as a low-tax Tory, I said Truss was going to give low taxes a bad name and that’s what she’s done,” he said.
The Telegraph can also reveal that Ms Truss considered including a “flat tax” in her mini-budget that would have meant all workers paid just 20 per cent of their incomes to the Treasury.
Under the proposal, submitted in a memo by Sir Jacob Rees-Mogg, corporation tax and capital gains tax would also have become 20 per cent.
The move, if adopted, would have been the biggest shake-up of the tax system for decades. Its estimated cost was £41 billio, more than any other measure in the mini-budget.
In the end Kwasi Kwarteng, Ms Truss’s chancellor, firmly rejected the proposal.
The revelation is contained in The Right to Rule, a new book by The Telegraph’s political editor Ben Riley-Smith that explores, via interviews with more than 120 key players, how the Conservatives have held power since 2010,
In her speech on Monday, Ms Truss will also argue that “25 years of economic consensus” have transformed the UK from a free market capitalist economy into a “corporatist social democracy” where state spending now accounts for 46 per cent of GDP.
She will say: “I believe it is vital that we understand that and shatter that economic consensus, if we are to avoid worse problems in the future.” | United Kingdom Business & Economics |
Crompton Greaves Q2 Results - Increased Investments Lead To Lower Margin; Maintain 'Neutral': Yes Securities
The company has delivered industry leading growth with fans and pumps doing well.
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.
Yes Securities Report
Crompton Greaves Consumer Electricals Ltd. has reported lower than estimated revenue with electrical consumer durable growing at 16.5%, while lighting and Butterfly Gandhimathi Appliances Ltd. products registering decline of 11.5% and 16.9% respectively. ECD growth was on back of strong growth in fans (+18%) and small domestic appliances (+17%).
Pumps too has exhibited growth of 10% led by robust traction in residential and agriculture segment. Lighting segment continues to be impacted by industry level challenges in business to consumer lighting, with price erosion being witnessed across players as competition continues to remain high.
On Butterfly front shift in festive season has resulted in delayed pre-buying, this coupled with one off corporate sale in the base quarter has accentuated revenue decline.
Gross margins at 31.3% have been lower as increased cost on shifting to BEE ratings in fans have not been passed on, while operating margins were lower as company continues to invest in business, leading to increased advertising and promotion spends and investing in alternate channels.
Crompton have started to implement its 2.0 strategy where its aiming at accelerated growth by premiumisation of the portfolio and focusing on the alternate channel has started to see initial success.
Premium fans for Crompton has seen growth of 31% in Q2 and now contributes 28% to overall fans sales, while its alternate channel is has growing at two times the rate versus its GT with salience of 17% versus 13% of the overall sales.
Crompton will have to continue with its investments which will result in lower profitability in the near term, while heightened competitive intensity and sluggish demand trend will result in longer than expected time to reap benefits of the changes that have been under implementation.
We now feel recent initiatives taken by Crompton will require sustained efforts and investments. Considering increased investments, we have trimmed our margin estimates for FY24 and FY25.
We now bake in FY23-25E revenue/Ebitda/profit after tax compound annual growth rate of 10%/12%/17% and arrive at our target price of Rs 306 valuing the company at 30 times FY25 earning per share maintaining our 'Neutral' rating.
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 |
By Tommy Wilkes and Isla Binnie
LONDON/NEW YORK (Reuters) - Corporate loans whose costs are linked to environmental, social and governance (ESG) goals are being redesigned by banks in response to rising regulatory pressure and to inject more credibility into a market they hope to grow.
Sustainability-linked loans (SLL), which were first used in 2017, offer slightly cheaper borrowing, typically around 2.5-10 basis points less, if companies meet goals such as cutting their carbon emissions or improving board diversity.
Banks need to balance tougher standards without killing demand for SLLs, which unlike loans tied to specific projects allow borrowers to use the money raised however they choose, as they count towards lenders' own sustainable finance commitments.
"There is no more hype," said Constance Chalchat, chief sustainability officer for BNP Paribas Corporate and Institutional Banking. "If you are not 100% bulletproof, it can create greenwashing or reputational risks."
Of 14 major banks reviewed by Reuters, JPMorgan was the only one which did not automatically count labelled loans and bonds towards its own sustainable finance target.
Amid increasing regulatory scrutiny and suggestions that SLLs enable companies to inflate their green credentials, LSEG data shows issuance has slumped by 36% to $310 billion so far in 2023, from $480 billion in 2022. Total loan volumes also fell in the period, but by a less sharp 21%.
This drop is despite big SLL deals this year from repeat borrowers such as German utility RWE, automaker Ford Motors and French energy group Engie.
In a sign of how the market is changing, an Engie spokesman said the most recent documentation it had signed for SLLs, of which LSEG data shows it has agreed $4.8 billion, included "declassification" clauses.
These let banks strip the sustainability-linked label from the loans if targets are no longer deemed appropriate.
The banks' tougher standards are discouraging some borrowers from using SLLs entirely, bankers and lawyers told Reuters.
Others are first "looking at structures more closely", said Credit Agricole CIB's Head of European Corporate - Sustainable Investment Banking, Pascale Forde Maurice.
Britain's Financial Conduct Authority (FCA) warned in June of "market integrity" concerns, including weak incentives, potential conflicts of interest and unambitious goals.
The FCA said banks' remuneration incentives to hit ESG financing targets may have created potential conflicts of interest, encouraging them to accept weak corporate targets.
'SEVERE CONTROVERSY'
Banks have responded by including more penalties in SLLs that raise the borrowing cost if a company misses targets.
They are also insisting on the right to remove the SLL label for a "severe controversy", and are using untested language such as the company or its products having an "adverse impact" on the environment, the borrower's social principles or governance, said Elliot Beard, a partner at Simmons & Simmons.
They are broadening definitions of a "sustainability amendment event" too, which was traditionally invoked if an acquisition or disposal altered a firm's sustainability profile.
Beard said this is being stretched to include regulatory change, business strategy shifts and "any other event" which banks believe materially impacts sustainability goals.
"That would give lenders significant latitude to say let's get round the table and renegotiate ... I've not seen that accepted but that's what some banks are pushing for," he added.
Lenders and lawyers are also considering clauses to trigger a default, which requires immediate repayment, if a borrower is deemed to have reneged on sustainability commitments.
Already appearing in some private deals, such a clause "provides more teeth" but could scare away more borrowers, said David Milligan, partner at Norton Rose Fulbright.
The Engie spokesman said the utility would not agree to linking an event of default to sustainability targets.
PUBLIC SCRUTINY?
The London-based Loan Market Association, which tightened guidelines for lenders structuring SLLs alongside industry bodies in North America and Asia, says standards are improving.Its head of sustainability Gemma Lawrence-Pardew said banks and borrowers need to go further still, by publishing the sustainability elements of loans for public scrutiny.
Private lenders are also aiming to be more rigorous.
"We have stated our willingness to walk away when sustainability targets were too soft," said Brittany Agostino, vice president in the environmental, social and governance group at Los Angeles-based Ares.
"We request historical data on energy efficiency targets, and we built in safeguards to prevent companies from using M&A (mergers and acquisitions) just to meet these."
However, some doubt the value of sustainability-linked debt.
BMW completed an 8 billion euro ($8.5 billion)revolving credit facility in June, but unlike fellow automaker Porsche, decided against an SLL.
Corporate finance director Fredrik Altmann told Reuters that such debt serves BMW and its investors poorly.
"Our investors need to understand what drives BMW," he said. "That won't happen if one KPI (key performance indicator) or two KPIs decide if a labelled transaction is green or not."
(Reporting by Tommy Reggiori Wilkes and Isla Binnie; Additional reporting by Shankar Ramakrishnan in New York; Editing by Simon Jessop and Alexander Smith) | Banking & Finance |
Uber and Lyft have agreed to pay a combined $328 million in settlements following a wage theft investigation by the . According to New York AG Letitia James, the companies’ policies “systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits.” They’ll both now have to pay settlement funds to more than 100,000 current and former drivers in New York, and offer both minimum hourly pay rates and paid sick leave.
In the two settlements, Uber has to pay $290 million, while Lyft must pay $38 million. The AG’s office found both Uber and Lyft shortchanged drivers by deducting sales taxes from drivers’ commissions that should have been paid by riders between 2014 and 2017. They also did not offer paid sick leave. As a result of the settlement, drivers outside of New York City will be guaranteed an earnings floor of $26 per hour (NYC drivers already have minimum rates under Taxi & Limousine Commission regulations), and will earn one hour of sick pay for every 30 hours worked. This will be capped at 56 hours per year.
NYC drivers will get $17 per hour for sick leave, while drivers outside of the city will get $26 per hour. Both rates will be adjusted annually for inflation. Drivers can put in a claim for their share of the settlement on the . The companies will also be required to update their apps to improve the process for putting in sick leave requests and provide support for pay-related questions, plus earnings statements for drivers which explain their compensation in detail.
New York has been cracking down on app-based service providers in recent years amid to see gig workers classified as employees. A California court, however, , allowing companies to continue classifying their drivers as contractors. But NY has made progress recently in securing more protections. In September, Uber, GrubHub and DoorDash were told they must . | Workforce / Labor |
A Congressional investigation concluded that several tax prep providers shared sensitive filing data with Meta and Google. It follows a 2022 report from The Markup highlighting the practice in which TaxSlayer, H&R Block and TaxAct used Meta’s Pixel tracking tool to harvest info like filing status, approximate adjusted gross income, refund amount, names of dependents and which text-entry fields users clicked on. Meta is already facing a lawsuit connected with the initial reporting.
The panel sent the conclusions to the IRS, FTC, DOJ and Treasury Inspector General for Tax Administration (TIGA), urging the agencies to investigate and prosecute if applicable. “Big Tax Prep has recklessly shared tens of millions of taxpayers’ sensitive personal and financial data with Meta for years, without appropriately disclosing this data usage or protecting the data, and without appropriate taxpayer consent,” the report reads. “The findings of this report reveal a shocking breach of taxpayer privacy by tax prep companies and by Big Tech firms that appeared to violate taxpayers’ rights and may have violated taxpayer privacy law.”
The review found the Meta Pixel tracker also gathered data about “whether taxpayers had visited pages for many revealing tax situations, such as having dependents, certain types of income (such as rental income or capital gains), and certain tax credits or deductions.” In addition, it transmitted the full names, email, country, state, city, zip codes, phone numbers and gender as hashed values. The information was also collected from taxpayers using TaxAct’s Free File service — which is through a partnership with the IRS.
Congressional investigators listed in the report include Senators Elizabeth Warren (D-MA), Ron Wyden (D-OR), Richard Blumenthal (D-CT), Tammy Duckworth (D-IL), Bernie Sanders (I-VT) and Sheldon Whitehouse (D-RI) and Rep. Katie Porter (D-CA).
“The tax prep firms were shockingly careless with their treatment of taxpayer data,” the investigation concluded. “They indicated that they installed the Meta and Google tools on their websites without fully understanding the extent to which they would send taxpayer data to these tech firms, without consulting with independent compliance or privacy experts, and without full knowledge of Meta’s use of and disposition of the data.” The panel also chided Meta and Google for acting “with stunning disregard for taxpayer privacy.”
The report cites laws that say, “a tax return preparer may not disclose or use a taxpayer’s tax return information prior to obtaining a written consent from the taxpayer,” while mentioning that the tax prep companies failed to do that. Although tax-filing companies can legally hand data to “auxiliary service providers in connection with the preparation of a tax return,” the panel said Meta and Google don’t meet that definition since the tracking was used for advertising. Violations can lead to fines of up to $1,000 per instance (likely pocket change for these companies) and up to a year in prison. | Banking & Finance |
Prices Of Essential Food Items To Remain Stable In festival Season: Food Secretary
The secretary was briefing the media on the domestic supply and prices of key essential food items like wheat, rice, sugar and edible oils.
Prices of essential food items, including sugar and edible oils, will remain stable during the festival season, Union Food Secretary Sanjeev Chopra said on Thursday.
The secretary was briefing the media on the domestic supply and prices of key essential food items like wheat, rice, sugar and edible oils.
"Prices are expected to remain stable during the festival season. We are not anticipating any manner of hike (in food item prices) in the festival season. Hopefully, prices should rule stable in the next couple of months," Chopra told reporters here.
The government has taken some decisions recently to ensure price stabilisation, the secretary said.
The government has recently used all tools at its command, whether trade policy, customs duty or stock limit. These tools have been used judiciously to ensure prices remain stable, he added.
He also clearly mentioned that the restrictions imposed on some commodities to keep prices under check will not be removed in the near future as the government continues to monitor the prices of essential commodities.
Several curbs imposed to check price rise include a ban on wheat export since May 22, an extension of export duty of 20% on parboiled rice till March 2024, stock limits on pulses and an extension of sugar exports under the 'restricted' category beyond Oct. 31.
In the case of sugar, consumption of which usually rises during the festival, the secretary said the country has enough stock to meet the domestic requirement, and the arrival of fresh sugar from next month should further reduce the rates.
There was an opening stock of 57 lakh tonnes of sugar as of Oct. 1, sufficient to meet the domestic requirement for two and a half months.
On sugar exports, Chopra said the decision on allowing exports during the current 2023-24 marketing year (October-September) will be taken after the agriculture ministry comes out with the production estimates of sugarcane.
Cane crushing in the new season 2023-24 that started this month has begun in some places, and the fresh sugar in the market will be available from next month, he added.
The secretary also said that Indian sugar is among the cheapest in the world, and about 2% retail price inflation in one decade is less than the increase in the fair and remunerative price of sugarcane for farmers.
Currently, sugar prices in India are ruling at Rs 44 per kg, lower than Pakistan and the US (Rs 50/kg), Brazil (Rs 76/kg), Nepal (Rs 100/kg), Bangladesh (Rs 102/kg), China (104/kg), the UK (Rs 110/kg) and Sri Lanka (Rs 112/kg), according to the food ministry data shared in the press briefing.
In the case of edible oils, retail prices of edible oils, barring groundnut oil, have shown a decline.
On rice, Chopra said its inflation has been at 11-12% for the past about 3-4 months.
"With new crops coming into the market, I anticipate there will be a sharp decline in prices," he added.
He also shared that the government's effort to sell rice from the central pool to bulk users under the open market sale scheme (OMSS) to control prices has not been as effective as in the case of wheat.
Out of 25 lakh tonne, 97,000 tonnes of rice was sold under OMSS and "now, we don't expect much of the offtake as not much demand is seen with the harvesting of paddy has begun", the official said.
On wheat, the secretary said the sale of 25.6 lakh tonnes of wheat under OMSS so far has led to an increase in the availability of the crop in the domestic market and also in moderating retail and wholesale prices in the country.
The retail inflation in wheat is about 3.% in one year, while the minimum support price of the grain has been increased by 5.46% for rabi 2023, he said.
There is enough stock of rice and wheat with the government to meet the domestic requirement and tackle the price rise, he added. | Inflation |
Openly discussing the topic can be uncomfortable. But you’ve probably wondered who can be considered truly rich and whether you fit that definition (or ever will). According to Schwab’s 2022 Modern Wealth Survey, the average American thinks being rich means having a net worth of $2.2 million. However, wealth has no universal definition. Just as beauty is in the eye of the beholder, being rich depends on your personal definition and circumstances. Here’s what you need to keep in mind when determining whether you are rich and what most people consider to be rich.
A financial advisor can help you create a financial plan to grow your savings and investments.
What’s the Amount of Money You Must Have to Be Considered Rich?
Schwab’s survey showed Americans’ conception of being rich means having a net worth of $2.2 million. This number represents a $300,000 increase from the survey’s results last year.
Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.
That said, Americans’ feelings about wealth go beyond dollar figures. For instance, the survey indicated that over half the country’s workforce would take lower pay for employment with a company aligning with their values. Additionally, almost 90% of employees want fulfillment from their work and orient their careers around their beliefs.
As a result, while Americans have a defined dollar number for being rich, they prioritize their principles as highly in the workplace, going so far as to take a pay cut to work for a company that resonates with their ideals.
And because being wealthy is subjective, some Americans might also believe that being financially comfortable is identical to being wealthy. Specifically, participants in Schwab’s survey reported that a net worth of $774,000 or more means being comfortable. Therefore, you might have a lower target for what it means to become wealthy – it depends on your lifestyle and financial priorities.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Factors That Determine If You’re Rich
Since the dollar amount regarding wealth is subjective, you can analyze your financial situation in multiple ways to determine if you’re rich. Different facets of beliefs about wealth include the following:
You’re Able to Save
A rule of thumb for accumulating wealth is to spend less than you earn. In other words, if you can meet your monthly expenses and deposit surplus income in a savings or investment account, your net worth can rise in the millions within a couple of decades. As a result, financial habits, such as budgeting and setting goals, are essential to becoming wealthy, no matter what dollar amount you have in your head.
You Live Below Your Means
Fintech company LendingClub recently reported that almost two-thirds of Americans live paycheck to paycheck. This financial approach can be stressful and unsustainable, and it’s unlikely you’ll save a significant amount of wealth. So, monthly cutting expenses – whether you reduce monthly subscriptions or eat dinner at home more often – can help create room in your budget to save money and pay for necessities. Plus, you’ll be prepared for financial emergencies.
You Can Afford the Things You Want
If you save money and live below your means, you’ll likely be able to afford what you want. Whether it’s a new car or a Caribbean cruise, setting a financial goal and meeting it requires wealth-building habits. So, being financially capable of accomplishing your short- and long-term goals is a sign of wealth.
You’re Motivated By the Life You Want, Not Strictly Money
Your ideal life might look like you running your own small business. Or, it could mean getting out of debt and saving a specific amount for retirement each month. But, whatever your vision might be, it’s more vital that you simply have one. In other words, your motivation is fundamental to becoming wealthy. Greed isn’t sufficient fuel for making tough financial decisions. From restricting luxuries in your budget to taking a business risk, your choices will be strongest when they come from your vision for your life.
You’re on the Path to Afford the Retirement You Want
How much you need to save for retirement can be challenging to discern. But, once you set your retirement goal by consulting with a financial advisor or estimating your expenses in your golden years, it’s crucial to start saving now. Being wealthy means preparing for retirement with a solid financial foundation.
You Know Money Is a Tool, Not Your Enemy
Financial struggles can create the perception that money is your problem. Unfortunately, this mindset can bar you from the reality that money is your way to a better life. For example, if you’re living paycheck to paycheck and have serious credit card debt, thinking about money might be the last thing you want to do because it’s so stressful. However, avoiding the topic is going to keep you from becoming debt-free.
Instead, set a small goal, like putting an extra $25 per month toward the debt with the highest interest rate or lowest balance. This approach helps you see that money is not your enemy – it’s your means of building a brighter future.
You Have Options
Wealth means flexibility in meeting life’s challenges. For instance, you might want to take several months off work for the birth of a new child. Or, you want to fund a business idea with your savings. In any case, a reliable sign of being rich is exercising options to improve your life, learn a new skill, or expand your wealth.
Bottom Line
Being rich currently means having a net worth of about $2.2 million. However, this number fluctuates over time, and you can measure wealth according to your financial priorities. As a result, healthy financial habits, like spending less than you make, are critical to becoming wealthy, no matter your definition.
Tips on Understanding Your Wealth
A financial advisor can assess your finances and help you create a wealth-building budget. 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.
Some of the world’s most famous entrepreneurs started with a few dollars in their pockets and dreams for the future. But they didn’t become rich overnight. To follow in their footsteps, use this guide on how to build wealth.
Photo credit: ©iStock/visualspace, ©iStock/skyNext, ©iStock/gorodenkoff | Personal Finance & Financial Education |
A mum-of-two has said she may have to sell her home to afford childcare.
Stephanie Thomas said it would cost her and her husband £2,000 a month to have two children in full-time childcare.
Ms Thomas said she would need highly paid work to afford this for daughter Hayden, aged four, and eight-month-old son Avery.
The Welsh government said it was rolling out "high quality" childcare to all two-year-olds across Wales.
Ms Thomas said the cost of childcare meant they were making some tough decisions.
"It means we'll have to consider selling our home to afford childcare," she said.
The 37-year-old said she and her husband had decided not to have more children because of the cost.
"We just couldn't afford three children in full-time childcare," said Ms Thomas, from Sully, in Vale of Glamorgan.
The couple are also considering taking their children out of swimming and dancing clubs.
"Though we'd like them to be in those clubs, we might not be able to afford them," Ms Thomas said.
Ms Thomas, who was made redundant while on maternity leave, said the cost of daily childcare since having Avery had risen by £12.
She is now looking for work that will cover that cost.
"My husband and I are higher than average earners, so we are fortunate in that sense," she said.
"But the cost of childcare is so high, for us to have wraparound care allowing us to work full time hours, and with mortgage rates going up, it just means it's unaffordable."
Ms Thomas said some people she knew had decided not to return to work after having children because of the cost of care.
What help is there with childcare costs in Wales?
The Welsh government has two funded childcare schemes for children aged two, three and four.
The first, called the Childcare Offer for Wales, means those with three or four-year-olds can claim up to 30 hours of free childcare each week, for up to 48 weeks of the year.
The second, called Flying Start, provides 12.5 hours of free childcare to some two-year-olds in deprived parts of Wales.
That is being expanded to cover all two-year-olds.
Tax free childcare is also available to working families across the UK, including the self-employed, earning under £100,000 and at least £152 per week.
'We need to have universal childcare'
Ms Thomas said she had benefitted from tax free childcare.
"It bought our bills down by £200," she said.
"We then had access to 30 hours free when my daughter turned three years of age and that made a big difference. It took our bills down from £800 for childcare to around £300 which was a huge saving.
"But that's not accessible for Avery and I think we need to have universal childcare as soon as statutory maternity cover ends."
In March, it was announced free childcare for working parents in England would be expanded to all children under five by September 2025 to help parents get back to work.
An Oxfam Cymru report has found childcare costs and a lack of Welsh government funded childcare is pushing parents into poverty.
The report, which examined 300 parents' experiences, also found:
- More than a quarter (27%) said they spent over £900 a month on childcare.
- About two-thirds (67%) reported having to cut working hours because of a lack of childcare.
- More than half (53%) said after paying for childcare costs, it made no financial sense for them to go to work.
- About two-thirds (67%) said that childcare costs put them off having more children.
Oxfam Cymru boss, Sarah Rees, said: "Childcare costs are either trapping parents in poverty or leaving them on the precipice of poverty as they are forced to make impossible choices about their career and future plans to have more children."
She urged ministers to get expert advice on overhauling Wales' childcare system.
Children's Commissioner for Wales, Rocio Cifuentes, said early care and education should be available to all children.
The current childcare system, she said, reinforced the gap between children from lower and higher income families.
"This new report shows that high childcare costs are also pushing families towards poverty, and we know about the widespread impact that living in poverty can have on a child's life," said Ms Cifuentes.
"As part of its work in tackling child poverty the Welsh government should review childcare provision to make sure that the significant amount of public money currently invested is reaching those who need the most help."
The Welsh government said addressing child poverty was "an absolute priority" and that it was working to achieve a Wales where all children, young people and families could prosper.
"We are rolling out high-quality childcare to all two-year-olds across Wales through our successful Flying Start programme as part of the Co-operation Agreement with Plaid Cymru," a spokesman said.
"We are also investing £70m in capital investment in this sector so it can continue to grow. Â
"Our Childcare Offer provides 30 hours of funded childcare a week for up to 48 weeks a year for three and four-year-olds of eligible parents, which includes parents in education or training, compared to 38 weeks of the year in England, for working parents only." | United Kingdom Business & Economics |
Country Garden Shares, Dollar Bonds Jump On Financing Aid Hopes
The developer’s dollar notes continued to rise Thursday morning, according to credit traders.
(Bloomberg) -- Country Garden Holdings Co.’s shares and bonds jumped as news that the distressed Chinese builder will make a draft list of firms eligible for financing support relieved concerns over liquidity woes.
Shares in Hong Kong jumped more than 16%. That came after its 5.625% dollar bond due 2030 rallied 40% to close at 7.1 cents on the dollar Wednesday, according to Bloomberg-compiled data. The developer’s dollar notes continued to rise Thursday morning, according to credit traders. A gauge tracking property developer shares advanced 7.1%.
Authorities have been taking more forceful steps to end the nation’s property crisis, with the expected inclusion of Country Garden in the so-called white list showing Beijing’s pivot toward helping troubled builders. Country Garden’s plunge into default last month shook investor confidence as it showed few builders will be spared from the years-long housing market slump plaguing the economy.
China’s plan “underscores the importance it places on developers completing projects, and will help reassure suppliers, workers, and home buyers amid ongoing financing challenges,” said Chang Wei Liang, a strategist at DBS Group Holdings Ltd. “Debt investors could still face risks of restructuring, but there is some relief if financing helps to ward off risks of liquidation.”
Sino-Ocean Group and CIFI Holdings Group Co., which have also missed debt payments, are among the 50 developers in the list, Bloomberg reported Wednesday. Regulators are set to finalize the roster and distribute it to banks and other financial institutions within days, according to people familiar with the matter.
Country Garden, once the country’s largest builder by contracted sales, in October posted its biggest sales drop in at least six years. The slump raised concerns among potential buyers of its ability to complete projects amid a cash crunch. Sales are hovering around a sixth of their average monthly level in 2021 and 2022.
READ: Country Garden Sees Biggest Sales Drop in Years Amid Cash Crunch
While shares have rallied 40% this month, it remains a penny stock with prices below HK$1. At its 2018 peak, they were worth more than HK$17. The gains in November track a broad uptrend in developer shares amid signs that support for the sector is broadening.
Thursday’s gains took a Bloomberg Intelligence gauge of Chinese developers up nearly 16% in November.
“Most developers in China face a liquidity rather than solvency crisis, meaning they can survive if the government provides enough financing cash flows,” said Gary Ng, senior economist at Natixis in Hong Kong.
--With assistance from Alice Huang, April Ma and Jeanny Yu.
(Updates with latest market moves.)
©2023 Bloomberg L.P. | Asia Business & Economics |
What Really Happened the Night the Nickel Market Broke
Hundreds of pages of legal filings describe how the LME sleepwalked into a crisis, unaware of a massive short squeeze centered around metals giant Tsingshan.
(Bloomberg) -- Matthew Chamberlain had just presided over one of the wildest days in the history of metals markets when he sat down to type a late-night memo to the UK’s financial regulator. But the London Metal Exchange’s chief executive was optimistic.
It was the evening of March 7 last year and nickel prices had surged as much as 90% to an unprecedented $55,000 a ton, causing huge strains across the market. A large Chinese bank had missed a margin call in the hundreds of millions of dollars. The Financial Conduct Authority was beginning to demand updates.
Now, after a long day of meetings, calls and emails, Chamberlain summed up the LME’s position: the price spikes were explainable because of jitters over Russia’s invasion of Ukraine, and the market was still functioning. It didn’t see a need to intervene.
“We will see where we stand 0800-0900 tomorrow,” Chamberlain wrote. “If the nickel price has fallen overnight, we’ll be in a much better position.” At 9:36 p.m., he pressed send.
By the time he woke up at 5:30 a.m. the market was in chaos.
The broad outlines of what happened in the nickel market last year are by now well known. Prices did start rising because of worries over Russian supply, but by the time of Chamberlain’s memo the nickel market was in the grips of a violent squeeze centered around a short position built by Xiang Guangda of Tsingshan Holding Group Co., the world’s top nickel and stainless steel producer. A few hours after Chamberlain woke up, the LME announced it was cancelling all nickel trades that had taken place on March 8.
Now, documents made public in a court hearing this week recount in unforgiving detail the LME’s fateful decisions in early March, and how it sleepwalked into a crisis with little precedent in the modern history of finance.
Read: The World’s Most Feared Investor Faces Showdown Over Nickel
Across 649 pages of filings and witness statements, they reveal that the LME was largely in the dark about Tsingshan’s role as the major driver of the price spike until after it had decided to cancel billions of dollars of nickel trades; that the exchange’s top decision makers were asleep as the market spiraled out of control; and that Chamberlain made the key decision that the market was disorderly in about 20 minutes after he woke up on March 8 – unaware until much later that the LME’s staff had allowed prices to move more rapidly by disabling its own automatic volatility controls.
Death Spiral
The LME has acknowledged that it has lessons to learn from the events of last year, but insists it acted in the best interests of the market to avoid a “death spiral” that threatened to bankrupt a dozen banks and brokers and posed a risk to the wider financial system .
Its handling of the saga has been criticized by everyone from the International Monetary Fund to Citadel Securities’ Ken Griffin. And the crisis threatened the existence of the 146-year-old LME itself. In the words of its chief risk officer, the situation carried “a significant risk of market collapse leaving the LME unable to function as a venue for the world’s non-ferrous metals markets.”
The outcome of the legal battle playing out this week in London’s High Court could be similarly existential for the LME. Hedge fund Elliott Investment Management and trading firm Jane Street are seeking $472 million in damages in a judicial review, but the $12 billion of trades the LME cancelled on March 8 is more than 100 times its annual profit. Even if the LME prevails, it faces an uphill struggle to rebuild its reputation among investors and an ongoing investigation from the FCA.
Big Bets
Six months before the crisis, in September 2021, traders at Elliott had started placing a bet that nickel prices would rise. The hedge fund, run by billionaire Paul Singer and best known as an activist shareholder and ferocious litigator, is a significant player in commodity markets with a taste for big wagers .
Around the same time, at Tsingshan’s offices in Shanghai, Xiang was coming to the opposite view. Like Elliott, Xiang, who’s known as ‘Big Shot’ in Chinese commodities circles, also has a history of betting big. He’d built Tsingshan from a modest start into a global metals behemoth, and now he was backing himself to deliver again: with plans to boost production significantly, he reckoned prices could only fall. He started building up a large nickel short position.
By February 2022, it was clear that Elliott’s view of the market was prevailing. Stocks were low, demand for nickel in electric car batteries was booming, and traders were fretting that supplies from Russia could be cut off.
“Wow,” Elliott’s contact at JPMorgan said in an instant message. “We did that at the right time.”
The market started trading in a self-reinforcing cycle, known as a “short squeeze.” Higher prices forced Xiang to post more margin, leading him to reduce his position by buying back contracts – and so pushing up prices further.
Yet the LME remained largely unaware of Tsingshan’s role in driving prices higher as the chaotic events unfolded.
The LME’s senior management first became aware of Tsingshan’s short position when Bloomberg wrote about it on Feb. 14, according to the witness statements. However, while Chamberlain recognized that the position was large, he did not see it as “a particular cause for concern,” and therefore did not request any further information.
Margin Calls
Without that, the LME only had access to data about Tsingshan’s on-exchange position, and not the portion of its position that was held bilaterally, or over-the-counter. Bloomberg has since reported that Tsingshan's total position was five times the size of the on-exchange part the LME could see.
On the morning of March 7, nickel prices leapt to $36,000 a ton, and the strains were becoming apparent in the market. Four LME brokers were late in paying their margin calls that morning.
One of them, a unit of China Construction Bank Corp., was unable to pay a margin call in the hundreds of millions of dollars for the entire day. It told the LME that the reason was because clients including Tsingshan had not paid margin calls to it.
Defaults are not an everyday occurrence on the LME, or any other exchange. The LME’s clearinghouse had never put a member into default since it started operations in 2014. That CCBI, as the unit is known, was unable to pay its margin call was a sign of the extreme stress on the market.
As prices surged, the LME began to hold discussions about whether and how it should respond. The key question at the time, and one raised repeatedly during this week’s legal case, is whether the market had become “disorderly.”
LME executives discussed suspending the market on a call on the morning of March 7. By 1:30 p.m., with prices up 60% for the day, James Cressy, the LME’s chief operating officer said in an email that there was “a question of how orderly the mkt is and whether we suspend.”
Still, nickel continued to trade.
But in a recognition of the strains spreading through the market, the LME’s clearinghouse resolved to stop making margin calls until the following morning – giving members more time to find cash, but also potentially exposing LME Clear to a greater risk if prices moved even higher.
When the LME’s “Special Committee” met at 4 p.m., it decided that the market should remain open. The nickel price move could be explained by geopolitical and macroeconomic factors, it concluded, deciding not to impose any limits on the market.
About half an hour later, Chamberlain was forwarded a market commentary from an LME broker that read, “
To Bed
And when the LME’s key decision makers went to bed, CCBI’s margin call remained unpaid. By that time, the exchange’s executives were becoming increasingly concerned.
At 8:47 p.m. Adrian Farnham, the chief executive of LME Clear, sent a WhatsApp message to Nicolas Aguzin, the chief executive of LME parent company Hong Kong Exchanges & Clearing Ltd. He asked Aguzin to try to speak to China Construction Bank, "because obviously we can't really allow" its CCBI unit "to not pay again."
Nonetheless, Farnham, like Chamberlain, remained optimistic. “I went to bed expecting that the nickel price would come back down,” he said in a witness statement.
Elliott, on the other hand, was preparing for prices to spike. The hedge fund’s traders sent a series of orders to their broker, Goldman Sachs Group Inc., seeking to sell nickel should the price rise to certain predetermined levels.
The nickel market opened as usual at 1 a.m. As Farnham and Chamberlain slept, the market was calm for a few hours, but then resumed its rise as panicky banks sought to reduce their exposure to Tsingshan by covering part of the short position.
Jane Street alleges the very fact that the LME’s key decision makers were asleep was a breach of the exchange’s regulatory duties, since it meant that “no-one had been monitoring transactions in order to assess whether there were disorderly trading conditions.” The LME disputes that it was in breach.
What oversight there was came from the exchange’s trading operations team. They were in charge of operating the LME’s price bands, a form of speed bump designed to limit extreme price moves, such as in the case of “fat finger” trades.
But in the early hours of March 8, the operations team received numerous complaints from market participants that the price bands were preventing them from booking trades. At 4:49 a.m., they suspended them altogether.
Dizzying Ascent
It was soon after this that nickel prices started the most dizzying part of their ascent. By the time Chamberlain woke up, at 5:30 a.m., the price was already $60,000 a ton. In the next 38 minutes, it rose another $40,000.
“The abandonment of price bands caused or at least materially contributed to the speed and scale of the increase in prices,” Jane Street said in its court filing. “Without price bands in place, the LME could not control price volatility at all.”
Chamberlain spent twenty minutes searching on his phone for a real-world explanation for the price move – browsing Bloomberg, the Financial Times and Google – before concluding that the market was disorderly. “I had never witnessed such extreme price movements in nickel (or any other metal traded on the Exchange) before,” he recalled.
Chamberlain wasn’t aware that his operations team had suspended the price bands, as he made his pivotal decision to suspend the nickel market. In his witness statement, he said that the information wouldn’t have affected the decision, as the price would have risen anyway, even if the trading curbs were still in place.
“Wow,” Elliott’s contact at JPMorgan said in an instant message. “We did that at the right time.”
The exchange still didn’t have a handle on the scale or the importance of Tsingshan’s position — the real reason behind the runaway rally.
Gay Huey Evans, the LME’s chair, had asked for an update on Tsingshan’s position the previous evening, but when the FCA asked that morning what was driving the nickel price, an LME staffer did not even mention the possibility of a short squeeze.
“This is, as you’d expect, related to the ongoing situation in Ukraine,” he wrote.
Chamberlain said he “was not aware of Tsingshan being in any difficulty” until later that day.
That morning, CCBI, having enlisted support from its parent company, paid its margin call from the previous day.
Panicking Brokers
But now there was a new problem. Brokers on the LME would normally need to pay their first margin call of the day by 9 a.m., based on prices prevailing at around 7 a.m. If that had happened on March 8, the LME would have needed to request $19.75 billion from 28 banks and brokers – an unprecedented sum that was more than 10 times the previous daily record before March 2022.
LME executives were bombarded with calls and emails from panicking brokers. “We will not be able to meet intra-day margin calls,” one wrote, warning of their company’s imminent bankruptcy. “We are in serious difficulties and will be invoking actions to halt the business.”
Another requested a call with “someone senior” at the LME to convey their company’s “pain.”
One member, who was among roughly 10 brokers through which Tsingshan held its short position, wrote to Chamberlain saying: “You shouldn’t have opened in Asia – now you have to cancel trades and reset to the London close.”
Suspend the Market
At 7:30 a.m., Chamberlain led a conference call for the senior management of LME and LME Clear, as well as several executives from its parent company HKEX. They agreed to suspend the market as soon as possible. No minutes were taken.
By now, Elliott had sold 9,660 tons of nickel at the elevated prices of March 8 via three brokers. The bulk of it was sold, in a single trade, via JPMorgan Chase & Co. – in a deal that was confirmed at 8:14 a.m.
Having sold at an average price of just over $75,000 a ton, Elliott stood to make a profit of around $50,000 a ton on its bullish bet.
“Wow,” Elliott’s contact at JPMorgan said in an instant message. “We did that at the right time.”
But the real bombshell was still to come. At 9 a.m., the LME held a 52-minute call to discuss what to do next. It considered and rejected several options, including allowing the trades of March 8 to stand, allowing them to stand but changing their price, and allowing them to stand but calling margin based on the prices of the previous day. Finally, Chamberlain made the decision to cancel the entire trading session.
On March 9, as recriminations flew and with the nickel market still closed, Chamberlain finally held his first call with Tsingshan. The same day, Elliott’s lawyers wrote their first letter to the LME.
Why the Nickel Meltdown on the LME Still Matters: QuickTake
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You can’t beat death or taxes. But you can avoid having to pay off federal student loans — if the borrower kicks the bucket, according to The New York Times.
The Gray Lady gave the morbid advice on the heels of Friday’s Supreme Court decision striking down President Biden’s student loan forgiveness plan.
In a financial advice column titled “Ways You Can Still Cancel Your Federal Student Loan Debt,” writer Ron Lieber lists “plenty of ways to get your student debt wiped away.”
Under a subheading titled “death,” Lieber wrote: “If you’re a young adult wondering about the federal PLUS loans your relatives took out to pay for your education, you may be wondering whether the debt dies with the person or people who take it on.”
“It does.”
“The federal government will not make a claim on their estate, and you will not inherit the balance.”
A screenshot of the subheading was posted to Twitter by commentator Parker Molloy.
The Times later changed the subheading to “Debt Won’t Carry On.”
The Post has sought comment from the Times.
The Supreme Court’s conservative majority effectively killed Biden’s $400 billion plan to cancel or reduce federal student loan debts for millions of Americans.
The 6-3 decision, with conservative justices in the majority, said the Biden administration overstepped its authority with the plan, and it leaves borrowers on the hook for repayments that are expected to resume in the fall.
The court held that the administration needed Congress’ endorsement before undertaking so costly a program.
The majority rejected arguments that a bipartisan 2003 law dealing with national emergencies, known as the HEROES Act, gave Biden the power he claimed.
“Six States sued, arguing that the HEROES Act does not authorize the loan cancellation plan. We agree,” Chief Justice John Roberts wrote for the court.
Justice Elena Kagan, wrote in a dissent, joined by the court’s two other liberals, that the majority of the court “overrides the combined judgment of the Legislative and Executive Branches, with the consequence of eliminating loan forgiveness for 43 million Americans.”
Biden was to announce a new set of actions to protect student loan borrowers later Friday, a White House official told the Associated Press.
With Post Wires | Banking & Finance |
I'm 73 and my 401(k) hasn't been doing well for the last few years. Would it be a good idea for me to withdraw my money from my 401(k) and pay the tax that I will have to pay eventually anyway, and then invest the rest of my money in CDs?
-Archie
Your desire for some stability is completely reasonable Archie, but I would be careful not to move too quickly in search of it. There are some big potential costs to what you're talking about here that could really hurt your ability to support your retirement needs.
Instead, I would encourage you to find a balance that allows you to get the best of all worlds. Here's how I would think about it. (And if you need help with retirement planning, consider speaking with a financial advisor.)
The Tax Cost Is Real
While you're correct that you'll pay taxes on this money eventually, there are two main reasons that paying them all at once could hurt you.
First, we have a progressive tax code that pushes you into higher tax brackets as your income increases. If you withdraw your entire 401(k) in a single year, it's likely that a large portion of that balance will be taxed at the highest rates. If you instead spread those withdrawals out over a number of years, more of it will be taxed at lower rates and you'll be able to keep more of it for yourself.
Second, your 401(k) offers tax-deferred growth. This allows your money to grow faster inside a 401(k) than it would within a taxable account like a certificate of deposit (CD), which requires you to pay taxes on your earnings each year.
In other words, taking the tax hit now could significantly reduce the odds of your money lasting as long as you need it to.
With that said, you can certainly strike a balance between the safety you're looking for and the growth and tax benefits offered by a 401(k). (And if you have other retirement-related questions, this tool can help match you with potential financial advisors.)
Keep a Large Cash Reserve
Many retirees find it both useful and comforting to keep a large amount of cash reserves, separate from their invested portfolio. Something in the range of one to three years worth of expenses is often a wise move.
This money could be kept in some combination of checking accounts, savings accounts and CDs that ensure its safety while also allowing it to earn some interest along the way. And you can replenish it every six to 12 months with tax-efficient withdrawals from your 401(k) or other retirement accounts.
This kind of strategy allows you to get the long-term benefits of investing while also knowing that you have plenty of safe money to cover all of your needs. (And if you need help spreading your assets across different accounts, consider speaking with a financial advisor.)
Implement an Efficient Investment Strategy
As appealing as CDs can be, the reality is that they do not provide the long-term growth that an efficiently diversified investment portfolio can provide. And that growth is key to ensuring that your money lasts as long as you need it to.
For example, while CD rates are relatively high right now, average rates on a one-year CD have fluctuated between 0.14% and 1.72% since 2021. In comparison, the Vanguard LifeStrategy Moderate Growth Fund (VSMGX), which maintains a steady asset allocation of 60% stocks and 40% bonds, has a three-year return of 5.12% as of July 21, 2023.
If I were you, in addition to the cash reserves strategy above, I would simply make sure that your 401(k) is properly invested. That means that you have the right asset allocation and you are implementing it with a simple but diversified collection of index funds.
If you can't do that within your 401(k), you could consider rolling that money into an IRA. Doing so would maintain all of the tax benefits of your 401(k) while giving you more control over how you invest. (And if you need help planning your managing retirement accounts or completing a rollover, consider working with a financial advisor.)
Bottom Line
There are several factors to consider when you have concerns about a poorly performing 401(k) combined with a desire for a secure source of retirement income that a CD would provide. Moving the entire 401(k) balance into a CD could bump you up to a higher tax bracket. Remember, too, 401(k) money grows tax-free. Consider keeping one to three years of expenses in cash. Make sure your 401(k) assets align with your goals. If not, you may want to roll it over into an IRA that you control.
Again, your desire for stability is completely reasonable. It's hard navigating the ups and downs of the stock market when you're retired and reliant upon that money for your needs. But there's a way to get there without overpaying in taxes or sacrificing the growth that a good investment plan offers. If you can implement some version of the plan above, you should be in good shape.
Tips for Finding a Financial Advisor
If you don't have a financial advisor yet, finding one doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have free introductory calls with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It's important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Matt Becker, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you'd like answered? Email [email protected] and your question may be answered in a future column.
Please note that Matt is not a participant in the SmartAdvisor Match platform, and he has been compensated for this article.
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