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Bloomberg / Contributor via Getty Images
Bloomberg / Contributor via Getty Images
You would be forgiven for thinking that the whole crypto thing is finally over, a dubious chapter in financial history ignominiously closed. After all, most NFTs are worthless, shitcoins are still in the toilet, and the biggest names from crypto’s recent bubble are all in jail. But some investors aren’t seeing it that way—denizens of the crypto world are currently debating whether they are, in fact, so back.
Cryptocurrencies had a breakout moment during the pandemic, with the price of Bitcoin skyrocketing from under $10,000 in April 2019 to $60,000 in April 2020. This rising tide lifted all boats, regardless of seaworthiness, and an explosion of tokens ranging from doge-themed memecoins to so-called “decentralized finance” coins that promised huge returns based on risky mechanisms followed. Millionaires and billionaires were newly-minted—at least on paper—and a genuine craze took hold. Celebrities promoted the idea that JPEGs were the future of investing. A disheveled Sam Bankman-Fried pitched himself as a benevolent savior using profits from his crypto exchange, FTX. Matt Damon told Super Bowl viewers that investing in speculative internet money was the bravest thing anyone could do.
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It didn’t last. In 2022, dominoes fell one after the other as “stable” crypto protocols imploded, “safe” coins crashed, and budding empires crumbled over night. The fallout was severe. Investors lost a lot of money, and fraud charges quickly followed. The list of former crypto paragons currently in jail or facing criminal charges is staggering: FTX’s Sam Bankman-Fried was found guilty on all fraud charges; Alex Machinsky (CEO of felled crypto bank Celsius) was arrested and charged with fraud; the chief figures behind the popular SafeMoon crypto project have also been arrested and charged with fraud; TerraLuna’s Do Kwon is sitting in a Montenegro jail cell and faces fraud charges in the U.S.; Su Zhu, co-founder of the cratered Three Arrows Capital crypto hedge fund, was arrested and jailed for not cooperating with liquidators. His partner, Kyle Davies, renounced his U.S. citizenship and his location is reportedly unknown. Where can crypto possibly go from here? According to remaining hopefuls: Up. The emerging narrative around crypto, after a brief and puzzling tangent into AI hype, is that traditional finance will soon lend the industry some much-needed legitimacy. In mid-October, a Morgan Stanley strategist named Danny Gelindo wrote a blog post declaring that “crypto winter” might already be over. This was widely covered by crypto news outlets. Numerous articles have also predicted that the Securities and Exchange Commission (SEC) will soon approve a spot ETF—a fund holding Bitcoin or other cryptocurrencies that lets investors buy shares that track the price—based on scraps of information. For example, an anonymous source claimed that Grayscale Investments is in contact with the SEC after a court decided that the regulator’s previous denial of its ETF was “arbitrary and capricious.” Reports that BlackRock, which is also seeking approval for a Bitcoin spot ETF, registered a corporate entity called “iShares Ethereum Trust,” similarly excited investors. These bits of news, and their supposed implications, have boosted cryptocurrency prices. Bitcoin is currently sitting at $37,000, and Ethereum is over $2,000. There’s a sense of desperation to all of this—after the endless waves of fraud charges, collapsed houses of cards, and wrecked futures, institutional sign-off may well be the final bid for crypto’s acceptance back into the mainstream. Case in point: A viral tweet from a popular cryptocurrency news outlet claiming that BlackRock’s ETF had been approved sent Bitcoin’s price soaring for about 20 minutes, before it was proven to be false. Can crypto really mount a true comeback, outside of a niche subset of risk-taking investors? It seems unlikely, even if regulators approve an ETF. All of the building excitement may be nothing but vapor, leaving the industry in search of a new narrative to fuel the hype cycle. But for now, despite all of crypto’s anti-establishment posturing over the years, the financial system crypto was once destined to disrupt is what believers think can save it.
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The Biden administration wants to give 3.6 million workers access to overtime pay.
Under proposed changes from the Department of Labor, any salaried employee making less than $55,000 per year, or $1,059 per week, would be eligible for overtime. That would be a significant jump from the current cutoff at $35,568 per year.
“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices,” Acting Labor Secretary Julie Su said in a statement.
Under current laws, hourly workers are automatically due time-and-a-half pay when they put in more than 40 hours a week. But salaried workers can only receive the same overtime pay if they earn less than $35,358 per year.
From 2004 to 2019, the cutoff was all the way down at $23,660 per year. The Obama administration attempted to raise it to $47,476, but the move was struck down in court.
In 2019, the Trump administration set the number at $35,568 as a compromise. An estimated 15% of salaried workers are covered by that regulation, a number that would increase to 27% under the new rule. However, even the new mandate would lag way behind the 1970s, when an estimated 60% of salaried workers were eligible for overtime.
“We are committed to ensuring that all workers are paid fairly for their hard work,” said Jessica Looman, the Labor Department’s Principal Deputy Wage and Hour Division Administrator. “For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts.”
The Biden administration also wants to update the salary threshold every three years to keep up with inflation.
The Labor Department said 600,000 health care and social services employees, 300,000 manufacturing workers, 300,000 retail workers and 180,000 hospitality employees would be covered by the new overtime standard.
The proposed rule is subject to a 60-day public comment period before it can take effect. Business interests are expected to challenge the decision, as they did with the Obama administration’s attempt.
“Public input is essential as we consider the needs of today’s workforce and industry demands, and we encourage continued stakeholder input during the public comment period,” Looman said. | Workforce / Labor |
Investors seeking refuge from inflation are again embracing gold, as often happens when the stock market turns stormy. But with prices of the shiny metal now near an all-time high, some people may be tempted to sell and lock in a profit.
The spot price for gold is about $1,958 an ounce, according to financial data provider FactSet. That's about 11% higher than a year ago and 62% higher than five years ago.
Buying gold might be the easiest part of investing in the metal — after all, buyers can purchase 1-ounce bars from theor through a number of . Others may end up with gold through inheritance, with coins, bars or jewelry passed on by relatives.
But selling your gold has potential pitfalls, such as failing to secure a decent price or even getting scammed, experts say.
"Selling can be expensive," noted Kathy Kristof, a personal finance expert and the founder of Sidehusl.com, a site about making money on the side. "It's like exchanging currency — you buy at one price and sell at another — so you have to be careful where you sell your gold."
See Managing Your Money for more on buying gold:
In other words, even though you bought that 1-ounce gold bar from Costco for $1,999, you might not be able to get the same price when you sell it. The key is aiming to get a price that's as close to the current spot price as possible, Kristof said.
Research, research, research
It's essential to do your research before you sell your gold to a third-party company. Brick-and-mortar buyers might not be able to provide as high a price as online buyers because they incur more costs, such as maintaining a storefront. Two online gold buyers that Sidehusl has researched and recommends to people seeking to sell their gold are The Alloy Market and Express Gold Cash, Kristof said.
"Alloy and Express Gold Cash are giving you close to the spot price," she said.
In doing your research, she recommends sifting through reviews to look for red flags, such as complaints from dissatisfied customers, lawsuits or even cases where a company claims the gold never arrived.
"That is a really important thing to do if you are using someone you don't know well," she noted.
Check reviews on Yelp, Trust Pilot and the Better Business Bureau to screen for problems. Also carefully read through the terms and conditions before sending your gold to a company, because some services state that they aren't responsible if items are lost after you ship them, Kristof said.
"Red flags are when there are complaints about them not receiving the gold or not giving the appropriate value for the gold content," she noted.
Set your expectations
Generally, gold buyers like Alloy Market and Express Gold Cash will buy gold in multiple forms, from old dental crowns to jewelry to gold coins.
But not all gold is created equal. For instance, some jewelry might be 18-karat gold, which means it's only 75% pure gold, with 25% alloy content. In that case, the price you'll fetch for that 18-karat jewelry won't be as high as for 24-karat pieces.
Some jewelry might command higher prices if you sell it to a jeweler or other purchaser who is interested in the item for its aesthetics, rather than the gold content alone, Kristof noted.
Insurance coverage
If you plan to sell through an online site, make sure your gold is ensured before you ship it, Kristof noted.
Some buyers include insurance in their service, such as Alloy Market, which says it provides up to $100,000 worth of insurance on gold shipped to the company. If you need more coverage, you can often work with the buyer to raise the insurance.
"What we liked about Alloy and Express Gold Cash is they send you the package, they insure it and they have extremely good reputations in terms of how people talk about how the process went for them," Kristof said. "It is a very transparent process."
for more features. | Personal Finance & Financial Education |
If you find yourself with $1.5 million in retirement savings, you’re doing more than five times better than the average retiree, who only has $279,997. It is true that $1.5 million can last indefinitely in retirement if you don’t spend a cent, or it can last you one day if you buy a new yacht. How quickly you spend your money will have a large impact on how long it lasts, but so does where you keep it. Risky investments can make it disappear quickly, but keeping it “safe” in cash will make you actively lose against inflation. Working with a financial advisor can potentially help you maximize your savings and extend how long your money will last in retirement.
Determining How Much You Have
You may think that you have $1.5 million for retirement, but a closer inspection of your assets and income streams may make you realize you have more. Taking a thorough inventory can help you determine not only how long $1.5 million will last, but how much you can reasonably spend each year.
Retirement Assets
In addition to your $1.5 million, you may have other assets that can be used to supplement your income at a later date or will be included in your estate for your heirs. Other assets that should be considered in your calculation can include:
Real estate assets that can be used to provide rental income, sold at a later date or gifted to heirs, like vacation homes or investment properties.
Recreational equipment that can be sold or rented like boats, RVs, travel trailers and off-road vehicles.
The equity you’ve built in your home if you’re considering downsizing or moving to a cheaper area to reduce expenses.
Retirement Income
In addition to income from your retirement accounts, you likely have other sources of income that will reduce the amount you need to withdraw to sustain your lifestyle. Other types of income you may have in retirement include:
Pension benefits
Part-time income
Consulting income
Rental income
Interest income
Profit from selling a business or property
Calculate how much you can expect on a regular monthly basis and subtract that from how much you’ve determined you need monthly from the monthly expenses section below. For irregular income or annual income like royalties or inheritances, you can choose to amortize it based on when you expect to receive it or disregard it from your planning altogether.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
How to Determine How Much You Need Monthly
Most financial advisors agree that the average retiree will need to replace 80% of their pre-retirement income in retirement. That 80% is likely to be variable. Some years you may have weddings or trips to pay for and some you may stay at home.
Research from the University of Michigan’s Retirement and Disability Research center found that retirement spending declines over time across all socioeconomic levels. While you can expect to spend more on healthcare in your later years, you won’t be spending anywhere near as much as you did in your early retirement years of cruises, travel, dining and entertainment.
If you’re brand new to retirement, you can plan to spend 80% of your income monthly, but don’t panic too much if you’re spending more in some years, especially in the beginning. You spent your entire life saving for these years and it’s time to enjoy them while you still can.
Use a budget tracking tool like Mint, Personal Capital or You Need a Budget to plan and track your expenses. Schedule a quarterly check-in with your spouse to make sure that you’re spending where it matters most to you. Schedule an annual check-in or more often, speak with your financial advisor to make sure you’re still on track.
Investing for Retirement
It can be tempting to put all of your savings in cash when you’re nearing or in retirement. After all, cash doesn’t lose money, right? Wrong. Keeping your money in cash is the only investment that will actively lose you money because of inflation.
If you retire at 62, you can reasonably expect to live to 82 if you’re a man or almost to 85 if you’re a woman, according to data from the Social Security Administration. That means your $1.5 million portfolio needs to last at least 20 years, but it can also grow. Time is every investor’s friend.
Here’s how fast you would run out of money with each portfolio type, assuming you have a $1.5 million portfolio and withdrew $60,000 annually, taking out 3.8% more every year for inflation, which is the historical average annual inflation rate since 1960.
Cash Portfolio
Withdrawing $60,000 annually from a $1.5 million portfolio kept in cash would cause you to run out of money in 18 years. While $1.5 million divided by $60,000 is 25 years, the inflation rate means that you would need to progressively withdraw more every year to have the same buying power and run out of money faster.
Bonds Portfolio
A $1.5 million portfolio consisting entirely of bonds meant to keep pace with inflation can reasonably be expected to last 25 years. While you’ll need to progressively take out more from your portfolio to have the same buying power, your portfolio should keep up with or even beat the inflation rate.
Stocks Portfolio
The average annualized rate of return of the stock market, as measured by the S&P 500, has historically been around 10%. Using that rate of return and still withdrawing $60,000 per year, increasing our withdrawal rate by 3.8% for inflation annually, a $1.5 million portfolio could last indefinitely.
But average annualized rates of return don’t tell the whole picture. Some years are down and some years are up. While the stock market as a whole does well over time, if you pick individual stocks you could lose it all. Diversifying in an index fund that allows you to own tiny slices of the whole stock market can help mitigate risk but doesn’t make stocks a safe bet.
If you lose a significant portion of your portfolio, panic and sell your investments, you’ve locked in a loss. If the stock market tanks right when you enter retirement and have increased expenses with higher withdrawals, your portfolio may never recover. Only you know your risk tolerance. Working with a financial advisor can help you determine the right way to invest your portfolio for long-term stability.
The Bottom Line
How long $1.5 million will last in retirement depends foremost on how quickly you spend money. If you have a steady and reasonable withdrawal rate and keep your portfolio invested in a safe and smart way, your money could last indefinitely. If you take out too much, especially in the beginning, invest it in volatile assets, or leave it in your bank account, you’ll likely run out of money before you’ve run out of time to spend it.
Tips for Retirement Planning
Working with a financial advisor can make all the difference in making sure you’re on the right track for how much money you’ll need in your golden years. Advisors can help you create a retirement plan and even manage your assets for you. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Taxes are another retirement consideration that shouldn’t be taken lightly. You may want to plan out where you live based on certain tax benefits. Here are the best states to retire for taxes.
Photo credit: ©iStock.com/Goodboy Picture Company, ©iStock.com/roberthyrons, ©iStock.com/Moyo Studio | Personal Finance & Financial Education |
In a few short years, China-based apps Shein and Temu have surged within the U.S. consumer landscape, offering a seemingly endless variety of clothes, makeup and household goods for rock-bottom prices.
Now, the two are locked in a legal battle, each accusing the other of illegal conduct in their quest to woo American shoppers.
Temu sued Shein in federal court in Massachusetts, accusing the older company founded in 2012 of strong-arming suppliers into exclusivity agreements to deprive Temu of goods, in violation of U.S. antitrust laws.
Shein forces manufacturers "to sign loyalty oaths certifying that they will not do business with Temu," reads the complaint, filed July 14. If they decline, Shein imposes "extrajudicial fines" on the manufacturers and publicly shames them. These alleged antics have led to 10,000 products being pulled from Temu's site, according to the suit.
Shein's alleged strong-arming is a problem, according to Temu, because there are only a relative few manufacturers in China who can keep up with the lighting-fast turnaround required by Temu, and Shein has locked up 8,338 of them into exclusivity agreements, according to the suit. Temu claims that it has lost tens of thousands of listings after suppliers were bullied by Shein into ending their relationships with Temu.
Such exclusivity agreements are illegal under U.S. antitrust law. It's also a bad deal for consumers, because "Temu beats just about everyone else on price," the suit claims.
Copyright claims galore
As the complaint lays it out, Shein and Temu are both part of the "ultra-fast-fashion" world, which "distinguishes itself … by offering not only an overwhelming number of products, but also frequently replacing those products with new designs." Suppliers to Shein and Temu hold almost no inventory; rather, they generate thousands of new designs, produce small production runs of as few as 100 items, frequently change styles depending on shoppers' feedback and do it all on razor-thin margins, resulting in prices as low as $3 for a T-shirt or $15 for a dress.
Temu also accuses Shein of filing frivolous copyright claims against suppliers to punish sellers who use both platforms, resulting in Temu losing out on merchandise.
Shein sued Temu for copyright and trademark infringement earlier this year in Illinois. Earlier this week, three fashion designers sued Shein in California, accusing the company of and stealing fashion designs.
Shein declined to comment on that suit. In a statement on Temu's suit this week, Shein said, "We believe this lawsuit is without merit and we will vigorously defend ourselves."
A fight in the fast-fashion aisles
The legal battle is unfolding as the two companies fiercely compete for U.S. consumers in the face of scrutiny from U.S. lawmakers.
Shein, which entered the U.S. market in 2017, has come to dominate the fast-fashion industry, where it beat out competitors like Fashion Nova, Forever21, H&M and Zara, taking in more than 50% of sales, according to Temu's suit — a position that makes it a "monopolist," according to its competitor.
Temu burst onto the U.S. shopping scene in September 2022 with a heavy advertising campaign that included influencer sponsorships, a series of paid promotional articles in major U.S. newspapers and a $45 billion Superbowl ad. It quickly became the most-downloaded app on Google and Apple and is currently among the top 10 shopping apps, according to Similarweb.
"It's been pretty unprecedented to see a shopping app take off so quickly and get so much traction early on," Sky Canaves, a senior retail and e-commerce analyst at Insider Intelligence, told CBS MoneyWatch.
The app has also Bureau, where it currently has a C-minus rating.with many asking if the too-good-to-be-true low prices are some kind of scam. In the past year, customers have filed nearly 600 complaints against Temu with the Better Business
"You have a lot of consumers wondering, what is this company? Is it real? But because it's been so cheap and low-risk to try out … a lot of consumers have been willing to at least give it a try," Canaves said.
In Canaves' view, Temu has benefited from the intense inflation in the U.S. over the past year, as well as heavy advertising on social media and a willingness to sell at rock-bottom prices. Its overnight popularity, however, might not be enough for long-term profitability, she said.
"I think they are selling a lot of goods at a loss," she said.
Serious concerns of slave labor practices
U.S. lawmakers have also raised concerns about Temu and Shein's data collection and labor practices. A Congressional report published last month suggested that neither company is fully complying with bans on goods from China's Xinjiang region, writing, "American consumers should know that there is an extremely high risk that Temu's supply chains are contaminated with forced labor."
The U.S.-China Economic Secuity and Review Commission also flagged numerous "controversial" business practices by the two firms in an April report, which described the growth of Shein as "a case study of Chinese e-commerce platforms outmaneuvering regulators to grow a dominant U.S. market presence."
for more features. | Consumer & Retail |
Image source, Getty ImagesThere are growing fears that 2023 could see a wave of company collapses as the cost of living crisis continues.The number of firms on the brink of going bust jumped by more than a third at the end of last year, said insolvency firm Begbies Traynor.It expects this number to rise due to higher costs and consumers cutting back their spending.Paul Jones, co-founder of brewery Cloudwater Brew, said the pressure felt like a "never-ending nightmare".Julie Palmer, partner at Begbies Traynor, said it was receiving an increasing number of calls from businesses owners like Mr Jones who were concerned over whether they could carry on.'Survival mode'Image caption, Paul Jones says he feels like continuing his business is either not possible or not worth itMr Jones said his Manchester-based company has been in survival mode since March 2020, with high costs, debt, low consumer confidence and post-Brexit trading problems all bearing down on the business. "The cost to me has been pretty bleak," he said. "I have a heart condition from stress and I feel constantly on the edge of what I can personally cope with."His thoughts have turned to closing his business "probably once a month since 2020," he said."I feel like continuing is either not possible or not worth it," he said. "We're going to keep going. What else can we do?" But he remains downbeat about business prospects in 2023.Financial distressBegbies Traynor said the number of companies in critical financial distress jumped by 36% in the last three months of 2022.A firm is in critical financial distress if it has more than £5,000 in country court judgments or a winding up petition against it.The number of county court judgments served against companies in the same period jumped by 52% compared with 2021.Ms Palmer said that up until now low interest rates and loans had helped firms. In the pandemic, Covid loans and a longer time to pay taxes had meant that support had continued."[The support] all seems to be coming to an end at the same time, with nothing really on the horizon in terms of what might replace them," she said.A backlog in the insolvency courts due to Covid has also delayed some company collapses."The courts were closed for business so nobody could take recovery action against non-payers and we are beginning to see those cases pushed through now," she said.Image caption, Chef Mary-Ellen McTague had to close her restaurant last yearThis cocktail of challenges has already proved lethal for some. Chef Mary-Ellen McTague set up a restaurant The Creameries in Manchester back in 2018. It received rave reviews and was trading well until the pandemic hit the following year, and the business never fully recovered.High energy costs were the final straw. She had to close the restaurant in September last year. "It became apparent that no matter how hard I worked, how hard I tried, how many different tactics we tried to turn it around, we were just never going to get enough customers through the door to make it work. And that was a horrible moment," said Ms McTague.She said running a business during such a difficult period took a huge emotional toll. "I think it can be a really lonely experience being in that position," she said. "If you are the head of a small business, you've got close relationships with your staff, your suppliers. And you don't want to worry anyone, so you don't necessarily talk to your friends, family, or even your partner about it," she added."You don't want to worry your children. There's a lot of trying to keep the worry from others, which means you hold it in yourself. "There's still quite a lot of stigma around it, and feeling this sense of shame of things not working out, even when it's completely out of your hands."She admitted that she had mixed feelings when she finally had to close the business "Once you're at the point where you can see what's going on and you can't make it better, there is definitely a sense of relief afterwards."'Little investment'NatWest boss Alison Rose said that while the UK's biggest business lender is yet to see widespread company failures she is concerned that firms are unable or not confident enough to invest for the future. "We are seeing very little investment thanks to very low business confidence. That for me is a real concern because it will affect future growth."But there were still reasons for optimism in 2023, she said."If you think we have had a global pandemic, the end of low interest rates, a war in Europe, massive price rises - what we have seen is incredible resilience in UK business," she said."We are also at full employment which is really positive. We are seeing record number of start-ups and banks like ours that is in a strong position to support customers. So it is a tough environment, but we should never forget how resilient business owners have been."Are you affected by the issues discussed here? Share your experiences by emailing [email protected] include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:If you are reading this page and can't see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at [email protected]. Please include your name, age and location with any submission. | Inflation |
GameStop will still sell you NFTs, but you now have to store and secure them yourself. The game store is ending the wallet app it offered for iOS devices and Chrome browsers as of November 1 and is telling customers to double-check their "Secret Passphrase."
GameStop's notice at the top of its wallet page and other crypto-related sub-sites cites "the regulatory uncertainty of the crypto space" for the removal of its wallet extension and app. The Securities and Exchange Commission sued Binance and Coinbase in June, citing the exchanges' failure to provide protections for customers, keep records, and accept inspection by the SEC.
"We advise that all customers ensure that they have access to their Secret Passphrase by October 1, 2023," GameStop's notice continues. That passphrase should allow wallet holders to "recover their account in any compatible wallet." GameStop's wallet FAQs suggest that MetaMask and some hardware wallets should be compatible after exporting keys, though there are a lot of details to read up on.
GameStop launched the wallet in May 2022, less than two weeks after Bitcoin and other virtual currencies experienced widespread destabilization and sell-offs. Still, GameStop seemed bullish on the blockchain and launched its own late-coming NFT marketplace in July of that year to non-epic returns.
News that GameStop was moving into blockchain gave the company's stock yet another rocket-boost in early 2022, after short squeezes and "meme stock" status boosted it more than 1,500 percent at one point in 2021. Besides failing to attract the expected revenue and interest, GameStop's NFT marketplace also angered indie game developers whose work was being embedded and sold without permission or compensation.
During a December 2022 conference call, GameStop's CEO at the time, Matt Furlong, said that the retailer had "proactively minimized exposure to cryptocurrency risk throughout the year," held no materials crypto assets, and would "not risk meaningful stockholder capital in the space." Furlong was fired in June "without cause" after GameStop reported a more than $50 million net loss for the quarter. GameStop's executive chair, Ryan Cohen, said at the time that the company would focus on "capital allocation and overseeing management," while seeking to "achieve sustained profitability."
Ars reached out to GameStop for comment and will update this post if we receive new information.
Listing image by GameStop | Crypto Trading & Speculation |
A Hong Kong court will convene a hearing Monday on troubled Chinese property developer Evergrande’s plans for restructuring its more than $300 billion in debts and staving off liquidation.
The company, the world’s most indebted property developer, ran into trouble when Chinese regulators cracked down on excessive borrowing in the real estate sector.
Last month, the company said Chinese police were investigating Evergrande’s chairman, Hui Ka Yan, for unspecified suspected crimes in the latest obstacle to the company’s efforts to resolve its financial woes.
The Hong Kong High Court has postponed the hearing over Evergrande’s potential liquidation several times.
Judge Linda Chan said in October that Monday’s hearing would be the last before a decision is handed down.
Evergrande could be ordered to liquidate if the plan is rejected by its creditors.
In September, Evergrande abandoned its initial debt restructuring plan after authorities banned it from issuing new dollar bonds, which was a key part of its plan.
The company first defaulted on its financial obligations in 2021, just over a year after Beijing clamped down on lending to property developers in an effort to cool a property bubble.
Evergrande is one of the biggest developers to have defaulted on its debts.
But others including Country Garden, China’s largest real estate developer, have also run into trouble, their predicaments rippling through financial systems in and outside China.
The fallout from the property crisis has also affected China’s shadow banking industry — institutions which provide financial services similar to banks but which operate outside of banking regulations.
Police are investigating Zhongzhi Enterprise Group, a major shadow bank in China that has lent billions in yuan (dollars) to property developers, after it said it was insolvent with up to $64 billion in liabilities.
Real estate drove China’s economic boom, but developers borrowed heavily as they turned cities into forests of apartment and office towers.
That has helped to push total corporate, government and household debt to the equivalent of more than 300% of annual economic output, unusually high for a middle-income country.
To prevent troubles spilling into the economy from the property sector, Chinese regulators reportedly have drafted a list of 50 developers eligible for financing support, among other measures meant to prop up the industry. | Asia Business & Economics |
Shanthala FMCG Products IPO Allotment Finalised: Where & How To Check Allotment Status
All you need to know about Shanthala FMCG Products IPO
Shanthala FMCG Products recently had Initial Public Offering (IPO). They aimed to raise Rs 16.07 crores by selling 17.66 lakh new shares. The IPO subscription period ended on October 31.
The share price is Rs 91, and retail investors were required to apply for a minimum of 1200 shares, which amounted to Rs 109,200. High Net Worth Individual (HNI) investors had to apply for 2 lots, which is equivalent to 2,400 shares, and the total cost for them was Rs 218,400.
Shanthala FMCG Products IPO was subscribed 3.91 times on the final day of subscription. The public issue was subscribed 3.05 times in the retail category, 4.76 times in the Other category by October 31, 2023.
Shanthala FMCG Products IPO Allotment Date
The allotment of shares for Shanthala FMCG Products IPO is likely to be finalized on Friday, November 3. As per the latest update the allotment has now been finalised.
Shanthala FMCG Products IPO Listing Date
The shares of Shanthala FMCG Products Limited are likely to be listed on NSE SME on Wednesday, November 8.
Where to check Shanthala FMCG Products IPO allotment status
Investors can check the allotment status of Shanthala FMCG Products IPO on the official website of Bigshare Services Pvt Ltd.
How to check Shanthala FMCG Products IPO allotment status On Bigshare Services Pvt Ltd.?
Visit the official website of Bigshare Services Pvt Ltd: https://ipo.bigshareonline.com/ipo_status.html.
Select any one server to check your IPO Allotment Status.
Choose "Shanthala FMCG Products Limited" from the list of companies.
In the Selection Type dropdown, choose either Application number, Beneficiary Id, or PAN ID.
Enter the required information, which could be your application number, PAN (Permanent Account Number), or Beneficiary Id.
Complete the 'captcha' to verify that you are not a robot.
Finally, click the "Search" button to check your allotment status.
Shanthala FMCG Products IPO Timeline (Tentative Schedule)
IPO Open Date: October 27
IPO Close Date: October 31
Basis of Allotment: November 3
Initiation of Refunds: November 6
Credit of Shares to Demat: November 7
Listing Date: November 8
Shanthala FMCG Products IPO Issue Details
Total issue size: Rs 16.07 crores
Face value: Rs 10 per share
Fresh issue size: 1,766,400 shares
Shares for fresh issue: 1,766,400 shares
Price: Rs 91 per share
Lot size: 1200 shares
About Shanthala FMCG Products Limited
Shanthala FMCG Products Limited, founded in 1996, is a company that distributes various everyday products like packaged foods, personal care items, stationery, matches, agarbatti, and tobacco to major FMCG companies. They aim to offer good quality products at reasonable prices, delivered on time.
In 2007, they became an authorized distributor for ITC, a well-known FMCG brand. Shanthala is known for its strong relationships with customers and a skilled management team with good knowledge of the industry. | Stocks Trading & Speculation |
MILLIONS of pounds worth of cuts to public services in Wales have been outlined in a bid to prop up the NHS and public transport.
The Welsh Government’s finance minister, Rebecca Evans, warned of “extraordinary” financial pressures ahead due to a £900 million shortfall in the budget.
She told the Senedd the pressures are due to the triple impact of inflation, more than a decade of austerity and the ongoing fallout from Brexit.
The budgets for education and Welsh language, climate change, finance and local government, economy, rural affairs and social justice all face cuts.
Ms Evans said: “The UK Government’s economic mismanagement, including the disastrous mini budget, have combined to place the Welsh budget under unprecedented pressure.”
However, opposition parties raised concerns about the Welsh Government’s spending on ‘pet projects’ and Wales’ health boards failing to break even.
Ms Evans warned the NHS in Wales is facing the toughest financial pressures in recent history due to rising costs as well as demand for planned and emergency care.
She announced an additional £425 million for the NHS but warned that health boards will still need to make difficult decisions this year, and next, to balance their budgets.
She told the Siambr that the revenue support grant (RSG) for councils has been protected and Transport for Wales (TfW) will get an extra £125 million.
Ms Evans outlined how spending has been reprioritised with day-to-day revenue spending and capital expenditure for long-term investments in assets such as roads revised as follows:
- Health and social services: +£425m revenue, capital unchanged;
- Education and Welsh language: -£74m revenue, -£40m capital;
- Climate change: +£82m revenue, -£37m capital;
- Finance and local government: -£28m revenue (excluding RSG), -£8m capital;
- Economy: -£28m revenue, -£36m capital;
- Rural affairs: -£17m, revenue, -£20m capital;
- Social justice: -£7m revenue, -£4m capital;
- Welsh Government running costs: -£27m (revenue).
‘Pet projects’
Peter Fox – the Conservatives’ shadow finance minister – argued that the financial position is a result of short-sighted decision making and poor management.
He said the budget is the largest ever at nearly £25 billion, with next year’s projected at £26 billion, and criticised the Welsh Government for “taking its eye off the ball while focusing on pet projects that have syphoned millions away from core services”.
“I’m disappointed, but not surprised that the Welsh Government is looking to again blame the UK Government,” he said.
“The decision to implement the default 20mph limit is a perfect example – a £33 million price tag with a cost of £4.5 million to the Welsh economy demonstrates well what I’m saying.”
The Conservative MS for Monmouth said the NHS should not be at breaking point because Wales receives 20 per cent more to spend per person on health than in England.
Peredur Owen Griffiths, for Plaid Cymru, welcomed the additional NHS funding but he raised concerns about six of the seven health boards failing to break even in the past three years, in violation of their statutory duties.
He asked: “Can we assume that, by adding to this shortfall, we shouldn't expect them to break even anytime soon, and, as a consequence, targeted intervention is going to be a long-term feature of the Welsh Government's health agenda?”
The finance committee chair also questioned the £125 million for TfW, asking: “Is this an admission the service is not performing as it should be and becoming a bit of a money pit?”
Lib Dem Jane Dodds welcomed the decision to protect council funding, particularly children’s services, as well as the commitment to the basic income pilot for care leavers.
She raised concerns about the resilience of the Welsh Government, in light of ministers drawing on more than £100 million from reserves. | United Kingdom Business & Economics |
If Only Digital Cash Worked In Hong Kong Taxis
Persuading cabbies who refuse to take anything but physical bills is the most important use case for the e-HKD.
(Bloomberg Opinion) -- The Hong Kong dollar is very likely to go digital. Major deposit-taking institutions, as well as payment firms like Visa Inc., Mastercard Inc. and Ant Group Co.’s Alipay, have all run pilots around e-HKD, a paperless version of the city’s currency. Everyone is optimistic.
But the e-HKD pilot — or at least its first phase, whose results were reported by the Hong Kong Monetary Authority this week — didn’t cover that one utility everyone is waiting for: cashless payments for taxi rides. For visitors, it can be a little bewildering that most cabbies in this bustling, modern financial center only accept physical currency. For residents, it’s a constant pain point.
Almost every other aspect of daily life is now cashless. The Octopus card, which helped people cope with a coin shortage during the former British colony’s 1997 handover to China, is now an efficient digital wallet as well. Multiple rounds of handouts from the government since the 2020 outbreak of Covid-19 have boosted people’s familiarity with online payments. Nobody with a bank account needs to go to a 7-Eleven any more to settle utility bills: The so-called Faster Payment System allows bank accounts to be debited instantaneously by scanning QR codes or selecting the payee’s mobile number.
In these aspects, Hong Kong is like any major metropolis. So how will a central bank digital currency add value to the retail payment landscape?
All of this is still hypothetical. Authorities are yet to decide whether or when they will issue a CBDC. The central bank has only recently set up a group to study privacy protection, cybersecurity and interoperability. Still, purely on the basis of what banks and fintech have come up with so far, it doesn’t look like the case is overwhelmingly strong. Singapore has decided that there is no compelling reason for it to join the retail CBDC craze for now. It is readying itself for a future in which interbank clearing and settlements are on the blockchain. Amid soaring global interest rates, helping institutions reduce intraday liquidity costs may be more useful than giving individuals a new payment option they won’t really use — at least, not every day.
Financial institutions and fintech in Hong Kong seem to think otherwise. For them, the proposed e-HKD’s appeal lies in its ability to handle complexity at scale. Some of the Phase 1 pilots experimented with a programmable currency responding to self-executing computer code, while others explored those rare situations where there is no internet connection. A third type of trials focused on a new way to take out home loans, a fourth emphasized using the Hong Kong dollar in other blockchain transactions, such as buying nonfungible tokens. HSBC Holdings Plc, the island’s biggest bank, teamed up with Visa to gauge the prospect for tokenizing deposits.
Some of these innovations have high practical utility. In a city of prohibitive homeownership costs, people will welcome an e-HKD loan that helps with a part of their upfront payment burden, including stamp duties. Smart contracts can tie down e-HKD to specific uses, so that lenders will have the assurance that unsecured credit is being used for the right purpose.
Small merchants might also benefit. Take the case of neighborhood spas. They offer hefty discounts against lump-sum advance payments that get drawn down over time. But these are small businesses that can go bankrupt at any time. If an e-HKD advance stayed in an escrow account, the merchant would know it is there and the customer would see the unspent balance as her money until she signs the invoice for the next pedicure.
It is also possible that e-HKD will have a second layer of embedded programming. The spa would pledge its e-HKD advance against a cheap working-capital loan from a bank. The customer would still enjoy a discount, but without supplying liquidity to the business.
Still, in evaluating tokenized money, the HKMA should ask just one question: “Will our cabbies accept it?” A currency issuer won’t want to confuse the public with an upgrade that comes up short on the original, especially since the existing Hong Kong dollar is a success no authority will want to trifle with. Standard Chartered Plc and HSBC have been putting banknotes in circulation since 1862 and 1865, respectively. Bank of China (Hong Kong) Ltd. joined them in 1994. The city has held the value of the local tender at 7.8 to the dollar for 40 years.
HSBC has run a pilot to see if a central bank digital currency would serve as full-fledged alternative to cash and credit cards. But nothing in Hong Kong will ever be a real competitor to paper money without a thumbs-up from the drivers. Octopus cards have made an inroad into the taxi market, but it doesn’t go deep enough. A senior executive visiting from Singapore was reminded by her partner to change money at the airport. The irony is that she is in town for the Hong Kong Fintech Week.
If e-HKD turns out to be useful only to crypto bros — for them to buy and sell Bitcoin or images of bored-looking apes — then pursuing it is really not a good use of HKMA’s time and effort. But if it works in taxis, it should be allowed to hit the road.
More from Bloomberg Opinion:
- Hong Kong Is Asia's New Crypto Capital: Andy Mukherjee
- Crypto Bros Have the Fix for a $1 Trillion Problem: Tim Culpan
- Matt Levine’s Money Stuff: When Is a Token Not a Security?
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.
©2023 Bloomberg L.P. | Asia Business & Economics |
- Helping your child build credit is one of the most important things you can do to set them up for financial success.
- Young adults often don't have a credit score, unless they already have a credit account.
- While there is an important role for schools to play, financial education should begin at home.
It can be hard for young people to build credit, but some parents seem to think they have it figured out.
However, what's considered a wise strategy is fraught with pitfalls, according to Erik Beguin, CEO of Austin Capital Bank and former member of the Consumer Financial Protection Bureau Community Bank Advisory Council.
Children "piggybacking" on a parent's credit history forgoes the opportunity for children to build their own credit profile, Beguin said. Since authorized users are not responsible for paying the credit card bill, those payments won't show up on their credit report and contribute to their own payment history in the eyes of the credit bureaus.
Beguin recommends adding your child as a co-signer instead. That way, they take on the risk and reward that comes with being responsible for the bill.
Co-signing on credit cards can help your children build healthy credit while they're young to ensure they won't need to lean on you in the future, Derek Miser, a financial advisor and president of Miser Wealth Partners in Knoxville, Tennessee, also said.
However, in this case, you may be responsible for their debt if your child cannot pay it back.
Either way, "it's important to use this as a steppingstone to establish credit in your own name," said Ted Rossman, a senior industry analyst at CreditCards.com.
Rossman advises young adults to establish their own credit within six months or a year after piggybacking on their parent's card, while they are still living at home but starting to be more independent. "It's good to start early."
A secured credit card is also designed to do just that. Often, secured cards require a cash deposit that then serves as the credit line, which can be a good fit for those without a proven payment history.
Young adults often don't have a credit score, unless they already have a credit account.
Credit scores represent your credit risk and affect whether you can get a loan, as well as the interest you'll pay. Generally, the higher your credit score, the better off you are.
FICO scores, the most popular scoring model, range between 300 and 850. A "good" score generally is above 670, a "very good" score is over 740 and anything above 800 is considered "exceptional."
Once you reach that 800 threshold, you're highly likely to be approved for a loan and can qualify for the lowest interest rate, according to Matt Schulz, LendingTree's chief credit analyst.
Before families decide which credit card is best, "what's really important is the conversation about how to manage your credit and responsible use of debt," Beguin said. That largely boils down to paying your bills on time and keeping your credit-card balance low.
While there is an important role for schools to play, financial education should begin at home.
Those conversations could start well before the teenage years, most experts say. Too frequently, talking about finances is considered taboo, and that's another mistake. | Personal Finance & Financial Education |
- A jury found Sam Bankman-Fried guilty of financial crimes in his five-week Manhattan trial.
- Prosecutors argued Bankman-Fried and co-conspirators funneled money from unknowing FTX customers.
- The defense said Bankman-Fried simply didn't know and his executives were to blame.
A jury found Sam Bankman-Fried guilty of seven counts of fraud and conspiracy in his criminal trial in Manhattan federal court after deliberating for about four and a half hours on Thursday.
The verdict was first reported by Inner City Press.
Prosecutors charged Bankman-Fried with seven counts of financial crimes after his FTX cryptocurrency exchange empire collapsed a year ago – almost to the day.
They say Bankman-Fried and several former members of his executive circle used his hedge fund, Alameda Research, to funnel money from FTX customers to themselves. They spent the money on lavish real estate in the Bahamas and political donations to gain influence in Washington, D.C., prosecutors argued.
Charges against Bankman-Fried included wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, and conspiracy to commit money laundering.
Bankman-Fried's defense attorneys made a case that the crypto mogul was unaware of how intermingled the funds between FTX and Alameda had become. They also blamed the companies' collapse on poor decision-making by Caroline Ellison, the former co-CEO of Alameda as well as Bankman-Fried's on-and-off girlfriend.
Ellison – along with execs Gary Wang and Nishad Singh – pleaded guilty to wire fraud and conspiracy charges and testified against Bankman-Fried at the trial, each emphasizing how they committed crimes at Bankman-Fried's direction. The group all lived and worked together out of a penthouse in the Bahamas, which served as offices for both FTX and Alameda.
A longtime proponent of engaging with the press, Bankman-Fried kept onlookers on their toes over whether he would take the stand in his own defense. Though it was widely considered a bad idea for a defendant to take the stand in such a bombshell case, he did so anyway. | Crypto Trading & Speculation |
Mayor Adams will amend his financial disclosure form to reflect that he owns cryptocurrencies, his spokesman said Thursday after the Daily News brought to his attention that the form doesn’t include info on the Bitcoin and Ethereum the mayor claimed he invested in at the outset of his term.
In the mandatory form, which was filed with the city Conflicts of Interest Board this year, Adams answered “no” to a question asking if he “at the close of 2022″ held stake in “any security (such as stocks, bonds, ETFs, mutual funds, or cryptocurrencies) with a market value of $1,000 or more.”
Adams offered that answer in spite of the fact that he said upon taking office that he would convert his first three paychecks — worth some $30,000 before taxes and other deductions — into Bitcoin and Ethereum, two popular cryptocurrencies. As recently as November 2022, when cryptocurrency markets were crashing, Adams said he still held that cash in Bitcoin and Ethereum.
“My money’s already there,” he told reporters at the time, referring to the three paychecks.
Even though the question on the form specifically mentions crypto, Adams spokesman Fabien Levy said Thursday evening that the mayor didn’t list off his Bitcoin and Ethereum holdings on the disclosure because he thought he only needed to report securities, not currencies.
Levy said the mayor still owns crypto and that he will amend the disclosure to reflect how much those holdings were worth at the end of 2022 in light of The News’ outreach. He declined to immediately specify the value.
Though the mayor apparently misunderstood the form’s instructions, two of his top aides, Deputy Mayor of Public Safety Phil Banks and senior adviser Timothy Pearson, both answered “yes” to the crypto question in their annual financial disclosures. Banks and Pearson, who have been close with Adams since all three served in the NYPD, even specified the dollar amount of their Bitcoin and Ethereum holdings.
Pearson’s form states he owned less than 5% of a Bitcoin stake worth at least $60,000 at the end of 2022. Banks’ form states he held at least $6,000 in Bitcoin and at least $5,000 in Ethereum.
The confusion over Adams’ financial disclosure comes after he spent his first year in office publicly boosting cryptocurrencies — cheerleading that at times has made him a target of criticism.
The way some forms of crypto are produced exacerbates climate change, and environmental advocates have accused Adams of ignoring that reality as he’s vowed to make the city the “crypto capital” of the country and called for loosening state regulations on how it’s traded.
The mayor has also drawn heat from anti-crypto activists for raising campaign cash from crypto industry executives at a fundraiser in the Hamptons last year, as first reported by The News. | Crypto Trading & Speculation |
Oghenetega Lortim built Nigerian-based cold chain startup Figorr after imagining better means of storage and transportation of temperature-sensitive products, following the post-harvest losses from his fresh agro-produce venture.
Figorr (previously Gricd) runs IoT-powered solutions that provide businesses, especially those in healthcare and agriculture, with key data such as location, humidity, and temperature of highly-perishable products, helping entrepreneurs to cut the losses that emerge from lack of such visibility. Figorr’s devices, which are placed/stuck in cold storage setups, come at no cost, but users subscribe to access the collected data.
Lortim says Figorr is currently on an expansion bid, following an increase in demand for its solutions outside Nigeria. The expansion is driven by a successful $1.5 million seed funding it has raised in a round led by Atlantica Ventures, with participation from Vested World, Jaza Rift and Katapult. The startup has so far raised $1.7 million equity funding, and $275K grants from various entities such as the Google Black Founders Fund, Africa Business Heroes by Jack Ma Foundation, FbStart, and Lafiya Innovators by Impact Hub.
“Kenya is a very interesting market for us, especially because of the agricultural play. We also believe it could be a very key springboard into new markets,” Lortim, Figorr founder and CEO, told TechCrunch.
Figorr is also set to launch a risk management platform before the year ends, which will provide insurance companies with the data needed to introduce tailor-made products to their customers. The platform will be built against the data that Figorr has been collecting over the last three years to show the risk profiles of its customers.
Lortim believes that with suitable and specific data, insurance companies will be better placed to provide tailored products.
“One major challenge we have seen by serving the sector is that a lot of our customers fear getting notifications that their products are being exposed to harsh conditions, and this is simply because historically, perishables are a risky sector,” said Lortim.
“We are helping insurance companies to see the opportunity by providing them with the data [and] for our customer, if something goes wrong, they will have some comfort that insurance is providing them with some level of coverage,” he said.
He says the insurance solution its building will revolutionize the way business is done, especially for smallholder farmers.
Lortim said having insurance will not only insure businesses from losses, but also ensure products are cheaper as businesses will not need to pass costs emerging from losses down to their customers.
Lortim launched Figorr in 2019, as a provider of mobile solar-powered storage boxes, before pivoting to double down on the IoT component of the product.
“When we built the solution, a lot of people were more interested in that IoT component, and in 2020 we decided to focus on helping businesses monitor, temperature-sensitive products, informing them on the location as well, helping them preempt and prevent losses from happening,” he said.
Lortim expects Figorr to continue growing buoyed by the fast-rising opportunities in Africa’s agriculture and health sectors.
In Nigeria, the device is mainly used in the healthcare sector to monitor temperature-sensitive products like vaccines and insulin, while in markets like Kenya, there is demand in the agriculture quarter, especially by horticulture businesses.
In sub-Saharan Africa, 37% of the food produced, or 120-170 kg/year per capita, is lost or wasted due to poor storage and handling, yet this is preventable if the food is kept safely and monitored in real-time to prevent losses. It is estimated that half of the vaccines in the world go to waste mainly due to cold-chain breaches.
Startups like Figorr are helping prevent these losses caused by poor storage, and lack of monitoring.
“What we are building is something that really impacts people,” said Lortim. “You can actually see the real effect on people’s lives in terms of accessibility to health care, and improved incomes.” | Africa Business & Economics |
Mega-retailer Target is now letting customers make in-person returns from the comfort of their cars in an effort to streamline the returns process for shoppers.
"Want to make a product return even easier? You'll soon be able to skip the line or mailbox and pull right in — to your nearest Target Drive Up spot," the retailer said in a statement this week.
The move comes after a successful trial of "Drive Up" purchase options at Target stores in the Minneapolis-St. Paul area.
The new policy can benefit consumers with kids or pets in tow, or those with disabilities for whom entering and exiting a vehicle can be more difficult and time-consuming, said Mark Schindele, Target's executive vice president and chief stores officer.
Customers also receive refunds on returned goods faster, because there's no shipping involved, and the retailer processes the returns immediately. The service is free to use.
"Our journey to expand our fulfillment options starts with making it easier for our guests to shop with us," Schindele said. "Allowing our guests to process a return from the comfort of their car underscores our commitment to helping our guests shop — and return — however they choose."
The move is an extension of the "buy online, pickup in-store" — or BOPIS — retail offering that became popular among consumers during the pandemic because it allowed shoppers to browse inventory virtually and get their merchandise immediately without having to enter a physical retail store.
Target said customers will be able to return products to stores from their cars at all of its 2,000 locations by the end of this summer.
Goods must be new and unopened to be eligible for return within 90 days of purchase.
for more features. | Consumer & Retail |
A mother said she felt like her four-year-old son was "being left to slowly die" due to mould in their rented home.
Demi Rock moved into the Grand Union Housing Group property in Bletchley, Milton Keynes, with her family in 2019.
He son Kyden is asthmatic and has a mould allergy, and a paediatric asthma specialist said he was "at increased risk of death" due to the housing.
Grand Union Housing acknowledged his condition was "really serious" and it was working to find suitable housing.
Ms Rock said she, Kyden and her daughter Elisa should have been moved three years ago.
She said Kyden became unwell about six months after moving to the ground floor social housing flat.
"He got asthma symptoms and he would be fine one minute, then it would just hit him and I'd be on the phone to the ambulance and he would be in hospital for a couple of days and then bedbound at home," she said.
Kyden has to use a nebuliser twice a day and can end up in hospital once a month, Ms Rock said.
He also has eczema which Ms Rock said was aggravated by the mould allergy.
Ms Rock said she had contacted both Grand Union Housing and Milton Keynes Council but felt the situation was not being taken seriously enough.
"It's just awful," she said.
"I can't understand how we can be left in these conditions when we have all these tests to prove he is allergic to the property.
"He's just being left to slowly die - that's how I feel."
Dr Ian Sinha, paediatric respiratory consultant and honorary associate clinical professor in child health, said Kyden had "significant respiratory vulnerability" and was "at increased risk of death in childhood, or premature adult mortality".
"I think the housing in which you live is putting him at increased risk of these outcomes, and that this is affecting his ability to have a happy childhood and fulfil his potential," he said.
"As a paediatrician, I am concerned that failure to move you as a matter of the utmost urgency could have grave and indeed fatal consequences."
Aileen Evans, chief executive of Grand Union Housing, said she understood Kyden's condition was "really, really serious".
"We are working really closely with the council to find somewhere more suitable - that's the ultimate solution to this problem," she said.
A spokesman for Milton Keynes Council said: "We've spoken to the housing association to remind them of their responsibilities towards their tenant, and they are urgently seeking an interim property,
"At the same time we're also searching for a permanent property of the right size.
"We do step in to help housing association tenants who are having issues with their landlord, and to aid with this we also recommend a complaint is raised to the Housing Ombudsman." | Real Estate & Housing |
Hi, lovely people, and welcome to Week in Review (WiR), TechCrunch’s regular newsletter that highlights the top news in tech over the past week (or so). If you haven’t already, sign up here to get WiR in your inbox every Saturday.
Most read
Reddit’s CEO lashes out: Reddit CEO Steve Huffman is not backing down amid protests against API changes made by the platform, Ivan writes. In interviews with The Verge, NBCNews and NPR, Huffman defended business decisions made by the company to charge third-party apps, saying that the API wasn’t designed to support these clients.
Subreddits go dark: In related Reddit news, more than 300 subreddits, including popular ones like r/aww, r/music r/videos, and r/futurology, went dark — preventing users from accessing them — indefinitely after a large protest against Reddit’s API changes ends on June 14. Over the last several days, (June 12-14), thousands of subreddits have joined in solidarity to protest Reddit’s aforementioned API changes, which will potentially shut down many third-party apps.
Twitter evicted: Twitter owes three months’ rent to its Boulder, Colo., landlord, and a judge has signed off on evicting the tech giant from its office there, court documents show. Since its takeover by Elon Musk, Twitter’s business has more or less fallen into disarray, and there have been numerous reports of unpaid bills.
Carvana comes crashing down: Carvana’s big rally is now looking more like a blip on the radar, Harri and Alex write. The company has secured billions in equity and debt financing since launching in 2013, and it’s bought a couple of startups — namely, Car360 and Adesa. But through it all, the company has yet to record a real profit.
Ransomware gang lists victims: Clop, the ransomware gang responsible for exploiting a critical security vulnerability in a popular corporate file transfer tool, has begun listing victims of the mass-hacks, including a number of U.S. banks and universities. The Russia-linked ransomware gang has been exploiting the security flaw in MOVEit Transfer, a tool used by corporations and enterprises to share large files over the internet, since late May.
Check skin conditions with Google Lens: Google’s enhancing Google Lens, its computer vision-powered app that brings up information related to the objects it identifies, with a useful new feature. Lens can now surface skin conditions similar to what you might see on your own skin, such as moles and rashes — working from an uploaded photo.
Minimum wage for NYC delivery workers: New York City has established a new minimum wage for food delivery workers who deliver for platforms like Uber Eats, DoorDash, Grubhub and Relay. It should be a historic win for gig workers, but Rebecca writes about how both delivery workers and companies are unhappy with it.
YouTube lets more users monetize: YouTube is lowering the requirements for creators to get access to monetization tools under the YouTube Partner Program (YPP). Specifically, the company is expanding its shopping affiliate program to U.S.-based creators who are already a part of YPP and have more than 20,000 subscribers.
Audio
TechCrunch’s podcast collection is the gift that keeps on giving — although this writer might be a little biased. Equity was off this week, but The TechCrunch Podcast revisited Inside Startup Battlefield, the four-part series that takes you behind TechCrunch’s Startup Battlefield competition.
Found, meanwhile, featured Amy Brown, the co-founder and CEO of Authenticx, a Midwestern startup that helps insurance companies and medical organizations extract data from their call centers using AI.
And on Chain Reaction, Patrick Kaminski, the director of digital innovation for web3 and metaverse at L’Oreal, and Manon Cardiel, head of strategic planning and partnerships within web3 and metaverse at L’Oreal, spoke about their experiences in the burgeoning blockchain space.
TechCrunch+
TC+ subscribers get access to in-depth commentary, analysis and surveys — which you know if you’re already a subscriber. If you’re not, consider signing up. Here are a few highlights from this week:
Corporate America makes bets on AI: Hype or not, the potential of AI has tech companies enamored, and businesses large and small have begun betting heavily on efforts that leverage AI in some fashion to spur their growth to new heights. Alex and I investigate.
Small VCs have a diversity impact: Smaller funds — especially those that have $50 million or less in assets under management — are helping to usher in a new wave of diversity within venture capital. As Dominic writes, the latest crop of investors stems from historically overlooked or marginalized communities that are setting up funds and then investing back in those funds. | Consumer & Retail |
Indian Exchanges - Strong, Steady Volume Trends In Exchanges On Higher Base: ICICI Securities
MCX options ADTV declines 13.4% month-on-month to Rs 851 billion, futures ADTV declines 11% MoM to Rs 200 billion in Nov-23
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Exchange volumes remain largely steady as a trend notwithstanding monthly volatility. We are witnessing NSE cash average daily trading volume of ~Rs 700 billion, NSE derivative ADTV of ~Rs 320 trillion (flattish) and BSE derivative ADTV of Rs 35 trillion (growing).
Within BSE options, BANKEX contributed 6.7% in Nov-23. MCX volumes were lower in Nov-23, but there are growth levers ahead.
There is a strong likelihood of continued growth in exchange volumes which should benefit the entire ecosystem. However, valuation multiple for capital market plays is significantly higher now.
Overall volume growth has tapered on a high base in FY24 (BSE/NSE derivative growth of 33.1/-5.8% in the last two months versus 641%/32.2% growth in eight months-FY24 to-date.
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 |
Year's Best-Performing Crypto Token Is Tied To Sam Bankman-Fried
Almost a year after the demise of Sam Bankman-Fried’s crypto empire, one of the blockchain projects most associated with the now disgraced entrepreneur is emerging from under the cloud his downfall cast over the digital-asset world.
(Bloomberg) -- Almost a year after the demise of Sam Bankman-Fried’s crypto empire, one of the blockchain projects most associated with the now disgraced entrepreneur is emerging from under the cloud his downfall cast over the digital-asset world.
Solana’s SOL token has surged about 340% to $41 in 2023, outdoing the 114% rally in market bellwether Bitcoin and becoming the best performing token among the largest cryptocurrencies tracked by Bloomberg. That follows a 94% drop last year as Bankman-Fried’s FTX and Alameda Research — two major backers of the project - collapsed into bankruptcy.
The token has doubled over the last 30-days amid the launch of a software solution dubbed Firedancer and the broader rally in the crypto market. Testing of the Firedancer network was announced this week at a Solana-themed Breakpoint conference in Amsterdam that attracted developers, investors and users of the blockchain.
Solana is among the blockchains competing with Ethereum, crypto’s key commercial highway, for a bigger share of digital-asset activity. It differentiates itself by offering lower transaction costs and faster processing speeds. VanEck Associates wrote in a recent report that the Firedancer update “promises to exceed Solana’s current capacity by a factor of 10.”
Matthew Sigel, head of digital asset research at VanEck Associates, told Bloomberg that SOL’s recovery this year is proof that the project has moved beyond the FTX overhang.
“One or a handful of layer-one smart contract platforms are likely to capture the majority of value intermediated by open-source blockchains. We think Solana is undervalued based on the probability we ascribe to SOL being the first blockchain to host an application with 100 million users,” Siegel said.
Often riddled with network outages, Solana has seen only one such incident this year against 14 such in 2022, as per Solana Status.
Despite this year’s recovery, SOL is still trading at a fraction of the $260 achieved in 2021 during the pandemic-era frenzy that lifted crypto. And some market observers say the network still faces additional challenges.
“In the upcoming bull cycle, Solana will encounter stiffer competition than it experienced in the prior cycle,” said Kunal Goel, a research analyst at Messari. “We’re witnessing the rise of blockchains which rival Solana’s speed like Sei, Aptos, and Sui.”
Even so, there’s been strong institutional interest in SOL as it stands as the best performing altcoin from an inflows perspective. In October, SOL saw a net inflow of $67 million via exchange-traded products, the second highest after Bitcoin, according to data shared by asset manager CoinShares.
A recent digital asset fund manager survey by CoinShares also showed that around 7% of the respondents believe Solana to have the most compelling growth outlook, an increase from 3.4% respondents last year.
“People are following the movements of FTX estate [and] I think people realize the selling pressure probably isn’t as much as expected,” said Shiliang Tang, chief investment officer at crypto investment firm LedgerPrime.
--With assistance from Muyao Shen.
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
The UK is losing out on economic growth worth up to £38bn every year because of unsuitable childcare, exclusive figures reveal.
A report from the thinktank Centre for Progressive Policy (CPP), shown to Sky News, shows the lost economic output is between £27bn and £38bn, the equivalent of 1% of GDP.
Their figures are translated from the survey results of 2,545 mothers which found that 27% said they would like to work more hours if they had access to suitable childcare.
If those hours were realised it would result in at least £9.4bn in additional earnings per year, with an estimated economic output the equivalent of 1% of GDP.
The CPP are calling for childcare to be viewed as physical infrastructure.
Ben Franklin, director of research and policy, described it as "a big economic prize".
"At the moment, the government can borrow to invest in hard physical infrastructure, so railways and roads," he said, "but we think there's a strong economic case for treating childcare in the same way.
"The gains to be made from supporting mums and employment are substantial.
"And the gains over a child's life, developing their own ability in terms of education and the future human capital of the country.
"So we think that childcare should be treated the same as other forms of hardhat infrastructure, that are often seen as more sexier within the corridors of power."
Based on the survey results, CPP also estimate that an additional 540,000 mothers have been prevented from getting paid work.
It also found that 880,000 have cut down their hours, and 470,000 have quit their jobs.
Cherry Fitzsimmons is a paediatric occupational therapist in London - an understaffed sector in the NHS - who had twins last year.
She describes the "madness" of a "flawed system" that has forced her to take an extra six months of unpaid leave because of childcare costs.
"In my area (at work) we're looking at overseas recruitment and paying for visas from our budget," she said.
"It just feels ironic that my team are paying for visas for people to come from other countries to help fill the gaps, but then I can't work because I can't afford to because of this childcare system."
She says by the time her three children go to school she would have spent around £100,000 on nursery fees.
"I think the government know that it's not working," she said, "and this feels like negligence, when they're just not doing anything about it."
Three and four-year-olds in England are eligible for either 15 or 30 free hours a week depending on whether their parents work.
The funding, however, given to nurseries to cover this is often not sufficient.
Kate Wright, who runs Little Buddies preschool in Lowestoft, has had to take on extra work as a cleaner to help pay staff wages.
"I get more money cleaning toilets than I do working and owning a business," she tells Sky News.
The living wage is set to rise in April and she says she is "starting to get really worried".
"That's going up by 92 pence per hour, bear in mind we've got six members of staff doing six hours a day 38 weeks of the year, and the funding isn't going up in accordance with that." she said.
"The ratios for two year olds is one to four, and the two year old funding is only going up 17 pence per hour, which is only 68 pence - so where is the deficit of the 24 pence coming from to pay for the members of staff?"
Figures from the Early Years Alliance show that over a third of childcare settings say it is likely that rising costs will force them to close this year.
Claire Richmond, who runs Goslings Day Nurseries Ltd in Coventry, says she has had three members of staff who have left to go and work in Sainsbury's.
"People are exiting the sector and getting a job at Sainsbury's on more per hour," she said.
"Because the accountability and the responsibility that's put on us is massive. Those things rightly should be in place, we're very happy to carry out those things.
"But we just need to have a fair amount coming in to fund amazing staff… the numbers just don't stack up."
She says her nursery is only just breaking even and is calling for business rates to be scrapped for childcare settings as a financial aid.
'On the brink of collapse'
Joeli Brearley, from campaign group, Pregnant Then Screwed, describes the childcare sector as "on the brink of collapse".
She says the system is also exacerbating gender inequality with "a big exodus of women from the labour market".
"We have a skills shortage in the UK and yet we know we have hundreds of thousands of women who are now stay at home mums, who desperately want to work but they can't afford to do so," she said.
A Department for Education spokesperson said: "We recognise that families and early years providers across the country are facing financial pressures. That's why we have spent more than £20bn over the past five years to support families with the cost of childcare.
"This government has doubled the entitlement for working parents of three and four-year-olds to 30 hours and introduced 15 free hours a week for disadvantaged two-year-olds.
"On top of this, working parents on Universal Credit may be eligible for help with up to 85% of their childcare costs through Universal Credit to support with the costs of childcare." | United Kingdom Business & Economics |
Thousands more people have started selling things in online marketplaces to help pay ever growing bills.
Sites like Facebook Marketplace and eBay have seen an increase in the number of individual sellers.
They put this down to the increased cost of living.
Sarah Bryant, head of small businesses at eBay UK, said: "Some are like you and me, the average Joe, who just want to sell some of their items to make a bit of side-money.
"It goes all the way through to those side hustles that are growing and growing until they become people's full time jobs."
Sami Cirant is one of the so-called "side-hustle sellers".
From his parents' home in Easton, Bristol, he buys and sells high-end trainers, or sneakers as his customers call them.
It started by accident, when a pair of sneakers he bought didn't fit well.
He found he could sell them easily online so he bought a few more, and sold them in a few hours.
"That's when I realised that it could actually be something that could make me a little bit of side money," Mr Cirant explained.
For six months the 23-year-old juggled his new business with a full-time job at a local charity.
Then he decided to try the online sneaker sales full time, which he said was a brave decision.
"It was a bit of a risk to quit my job, but I figure, if you don't take risks in life, then you might end up on a path that you don't want to be," he said.
Mr Cirant's costs are low, he still lives at home and his parents are supportive.
But other side-hustle sellers have grown into full-scale businesses.
I met Jade Oliver in a rabbit warren of rickety old rooms above a shop in Ross-on Wye, picking flowers from a rainbow of colours.
There are thousands of them, and they're all artificial, or "faux flowers" as she prefers. There are candles too, vintage plant pots, scent burners, silk feathers. A thousand different things to make your house beautiful.
A team of packers wrap them and box them up, sending parcels off across the UK.
Jade Oliver is 38, and her business, Heavenly Homes and Gardens, is now ten years old.
She started as a side hustle too, earning money to pay for her college law course.
In the early days, she ran her online sales alongside her first job.
She said: "I used to do the post run every morning before work, I'd spend my lunchbreak replying to customer messages and I'd come home from work to pack parcels. It really was a double life.
"Even on my honeymoon I was working."
Eventually something had to give, and it was the law firm. Ms Oliver weighed up selling interior décor against the life of a solicitor, and took the plunge.
She explained: "Being my own boss, and choosing my own products was just so much more interesting."
She sold her products on all the main online marketplaces, instead of just picking one.
It means more work, with a special page to design for each website but it has paid off.
Throughout the pandemic people were sat at home, often with spare cash, trying to make their houses more enjoyable. Ms Oliver's business grew, and she now employs 14 people picking and packing.
There are risks in leaving a salaried job of course, and small business advisers recommend people plan carefully.
But Michelle Ovens, founder of Small Business Britain, said that both the pandemic and the cost of living crisis have prompted more people to set up on their own.
So can a side hustle really help pay the bills when everything is going up?
Ms Ovens thinks so.
She said: "If you've got a passion for something, you can absolutely turn it into a business.
"Don't put all your eggs in one basket. Use all the marketplaces, sell a range of products.
"Also, ask other people. Small businesses are helpful and friendly, and they have learnt along the way.
"And get professional help, there is loads of free advice out there. Make use of it." | Consumer & Retail |
Softening growth and rising debt servicing costs are re-awakening debt sustainability concerns, which call for a swift return to primary surpluses. How big these will have to be will also depend on whether the government will manage to effectively implement the Recovery and Resilience Plan
Italian GDP stagnated in the third quarter as monetary tightening finally bites
The Italian economy is no exception. After a relatively quick post-Covid rebound, accommodated by the coexistence of expansionary monetary and fiscal policies, the economy has been cooling down since the second quarter of 2023, mainly on the back of softening domestic demand. After contracting by 0.6% quarter-on-quarter in the second quarter, Italian GDP was flat in the third – just about avoiding a technical recession.
With a notable delay since the start of the tightening cycle, the cumulated effect of past interest rate hikes has finally started showing up in credit data. In August, loans to non-financial corporations contracted by 7.9% year-on-year and loans to households for house purchases just expanded by 0.6% YoY. According to the latest Bank of Italy bank lending survey, loan demand is also expected to remain weak over the fourth quarter.
Not the best environment for investments; consumption looking better
High interest rates, credit contraction and an increasingly uncertain geopolitical backdrop are a bad mix for investments. The ongoing phasing-out of very generous tax incentives (the so-called “super bonus”) should continue to act as a drag on the residential sector in the fourth quarter of 2023, whilst the non-residential component could potentially benefit from the recent payment of the third tranche of the Recovery and Resilience Facility, worth some €18.5bn, partially compensating.
Consumption, which had been a key growth driver during the re-opening wave, is likely holding up better, helped by a resilient labour market. In August, revamped employment and falling unemployment brought the unemployment rate down to 7.3%, a level not seen since January 2009. Hiring intentions in recent business surveys continue to suggest that risks of a swift turnaround in employment remain low. Resilient employment and a progressive renewal of expired wage contracts at higher rates (hourly wage growth has stabilised at 3% YoY in the June-August period) should help support disposable income through the next winter, paving the way to a gradual recovery in consumption over 2024, and allowing for a gradual recovery of the savings ratio to pre-Covid levels (c.8%). Within the projected winter stagnation, private consumption should not be a drag on growth.
Disinflation should help, more likely in 2024
The prospective growth profile will also be affected by developments on the inflation front, at least in 2024. The October CPI release marked a sharp fall in headline inflation to 1.8% (from 5.3% in September), thanks to a favourable base effect on energy products. Even though a return above 2.0% through the winter seems inevitable, the disinflationary wave should resume over 2024, creating a better growth environment via an improvement in households’ purchasing power but also supporting a recovery in consumer confidence.
All in all, we expect the Italian economy to stagnate in the fourth quarter of this year and the first quarter of 2024, but see room for a gradual acceleration starting in the second quarter of next year. As 2023 will leave 2024 with a poor statistical carryover, it will be hard for average 2024 GDP growth to do better than 0.5% YoY.
Debt sustainability concerns re-awakened by a normalising environment…
Softer growth and the rising cost of debt are resurrecting debt sustainability concerns, given the sheer size of the Italian public debt. The recent widening in the BTP-Bund spread (now hovering just below the 200bp level in the 10y tenor) has accompanied the genesis of the draft budgetary plan (DBP) recently submitted by the Italian government to the EU Commission. To be clear, the DBP, while projecting a deficit decline delayed with respect to the original plan (deficit at 5.3% in 2023 and 4.3% in 2014), is not a disruptive one.
The profile of deficit data is being affected by the impact of the new accounting rules adopted by Eurostat for tax credits, which tend to penalise 2023 with respect to 2024 (when part of the incentives will be phased out). In this context, the 1.1% correction in the structural budget foreseen for 2024 in the DBP, at face value a substantial one, should be treated with some caution. The tax credit accounting factor also shows up in public debt dynamics with a small delay, i.e. when the tax credit is actually cashed in.
The combined effect of slow adjustment, accounting rules and slowing inflation translates into an unpleasantly flat debt profile in the DBP, with the debt/GDP ratio down a whisker from 140.2% in 2023 to 139.6% in 2026. A flat profile with upside risks attached, given the underlying assumptions of 1.2% GDP growth in 2024 and optimistic expectations of (undefined) privatisations worth 1% of GDP over the 2024-2026 time span.
The uncomfortable flat debt
GDP profile of Italy's Draft Budgetay Plan
Calls for a return to sustained primary surpluses of around 1.5% of GDP
Looking beyond 2026, when the bulk of the tax credit noise should disappear from public finance data, a declining debt dynamic will almost inevitably call for a sustained return to solid sustained primary surpluses. In fact, in 2025, the Italian debt/GDP ratio dynamic will likely cease benefitting from the current positive 'snowball effect' (i.e. a negative difference between the average cost of debt and nominal GDP growth) driven by the solid post-Covid economic rebound and by the inflation surprise accentuated by the war in Ukraine. As expiring debt is refinanced at higher interest rates and inflation cools down, the snowball effect looks set to turn negative, as it has historically been when low growth-normal inflation environments prevailed.
How big should primary surpluses be to secure debt stabilisation under reasonable macro assumptions? To find out, we ran a simulation with our base case growth and rates forecasts, which foresee a temporary acceleration in GDP growth towards the 1% level in 2025 and 2026 (the last two years of the implementation of the National Recovery and Resilience plan) and assuming a subsequent stabilisation of growth at 0.6% and inflation at 2%. What we get is that a primary surplus of c.1.5% of GDP would be required to stabilise the debt/GDP in a normalised interest rates environment. While seemingly ambitious, this is a level that Italy has been able to sustain for prolonged periods in the past.
Growth enhancing reforms and investments are key
As debt stabilisation would unlikely be deemed acceptable by any prospective fiscal rule (be it the old SGP or an amended version of the EU Commission proposal) a bigger effort would be required to secure a declining debt/GDP profile, the alternative being managing to sustainably increase the growth potential of the economy. The Italian government has a powerful tool to this end: the Recovery and Resilience Plan and its mix of reforms and investments. Its thorough implementation will likely become the single most important mission for the rest of the legislature, also for debt sustainability reasons.
This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more | Europe Business & Economics |
Neighbours in one of the UK’s so-called poorest areas have opened up on the struggles during a “tough winter” amid the cost of living crisis.
Countless Brits have found the past winter extremely tough on their wallets as soaring fuel prices and inflation combine.
It has left more and more people struggling to make ends meet amid the cost of living crisis.
The area has the lowest average household income in Nottinghamshire according to data from the Office for National Statistics.
After housing costs residents have £16,000 a year, which contrasts sharply to nearby areas like Wollaton which have over double that at £42,800.
Pensioners are being forced to dip into their savings whilst local shops have to up their prices to stay afloat.
Radha Karuppiah, a Beechdale resident who lives with her husband and 15-year-old daughter, told NottinghamLive: "Prices are high, everything is expensive, it's been a tough winter.
"I've been paying a lot more for everything, energy bills and food prices. Even the leisure centre is more expensive, I was going to get a membership, but I saw the price had gone up. I can't afford that."
The 42-year-old added: "Some snacks we can't have. My daughter wants to go out every week but because of the prices we can't do that. We're paying £300 to £400 more a month for our home, we moved when mortgage interest rates were really low but now everything is very high."
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Mohsin Kamal, 21, who works at Kamal Store in the area, said: "We've been doing alright but high prices have had an impact, we've had to put the prices up of items. Even if it's a little thing customers will ask about it, they could go up by 10p and they'll complain.
"We have had to raise prices to make a profit but in comparison to a lot of shops it's cheaper."
An 80-year-old pensioner, who did not wished to be named, said: "I'm the same as most people, the only thing I find irritating is that I just found out my pension would only be going up by 25p a week, that's £1 a month, I find that absolutely shameful.
"That's not going to be enough to pay my bills. We're having to dip into our savings which we have had to work for all our lives."
The retired nursery teacher added: "We have to have the heating on as my husband has health issues, but we have to go without some things."
Another retiree, aged 84, said she was using her savings to help pay for rising energy bills. "I'm retired and renting but I'm getting by, I manage," she said.
"The government could do more, hopefully we're through the worst of it."
A HM Treasury Spokesman said: “We want hard-working families to keep more of what they earn and our plan to halve inflation this year will allow everyone’s incomes to go further. We are also providing significant support over this year and next – worth on average £3,500 per household –as well as uprating benefits and the state pension by 10% in April." | United Kingdom Business & Economics |
China Mega Banks Weigh Further Deposit Rate Cuts to Boost Growth
China’s biggest state-owned banks are considering lowering deposit rates for at least the third time in a year, according to people familiar with the matter, as they ramp up efforts to boost the economy and protect margins.
(Bloomberg) -- China’s biggest state-owned banks are considering lowering deposit rates for at least the third time in a year, according to people familiar with the matter, as they ramp up efforts to boost the economy and protect margins.
Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and other lenders may cut rates on local currency deposits across key tenors by between 5 and 20 basis points, said the people, asking not to be identified discussing a private matter. Regulators have signed off on the plan, the people added. The cut may come as soon as Friday, one of the people said.
The move, following similar rate reductions in June and last September, would be the latest piecemeal step rolled out by Beijing as authorities try to spur consumer spending, drive more funds into the stock market and alleviate pressure on lenders.
China’s state-owned banks are attempting to protect their profit margins while at the same time heeding government directives to shore up support to the world’s second-largest economy. The People’s Bank of China, the nation’s central bank, called for the maintenance of “reasonable” interest margins for banks in its most recent monetary policy report.
The central bank this month lowered the rate on its one-year loans by the steepest amount in three years. But even with that interest rate cut — the second this year — Beijing has refrained from unleashing massive stimulus implemented in past downturns.
The PBOC didn’t immediately respond to a request seeking comment. Representatives of ICBC and CCB declined to comment.
Earlier this month, Chinese banks kept a key interest rate that guides mortgages on hold and made a smaller-than-expected cut to another rate, seen as a move to protect interest margins. Lowering deposit rates may give banks more room to provide better terms on corporate and home loans.
Deposit rate cuts could also encourage households to shift away from bank deposits toward other investments and consumption. Chinese households increased the share of their income that they save during the pandemic, and shifted their financial assets toward bank deposits, hitting the performance of funds that buy stocks and bonds on behalf of households.
The measures come as China’s real estate sector is unraveling and risks are spreading to the country’s $60 trillion financial system. China’s existing policies have failed to sustain a rebound in the property market as price declines extend across the nation. Country Garden Holdings Co. — a developer that was once a pillar of the industry — is on the verge of default, suggesting no company is too big to fail.
Economists see China’s gross domestic product expanding 5.1% in 2023 from the prior year, according to the median estimate in the latest Bloomberg survey. That’s down from an earlier expectation of 5.2% and brings projections closer to the government’s target of about 5% — a number widely seen as conservative when it was set in March.
Top officials also this week vowed to strengthen policy support and speed up government spending. Finance Minister Liu Kun and Zheng Shanjie, chairman of the National Development and Reform Commission, made the pledges in reports to the country’s legislature on Monday, according to the official Xinhua News Agency.
Growth momentum isn’t strong, the foundation for sustainable recovery isn’t solid, and the environment is “full of uncertainties,” Zheng said in the report, according to Xinhua. The remarks were largely a repeat of Beijing’s policy stance.
--With assistance from Emma Dong and Tom Hancock.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Asia Business & Economics |
Titan Q2 Results: Net Profit Up 9.7%, Margin Takes A Hit
The net profit of the country's largest branded jewellery maker rose to Rs 916 crore in the quarter ended September.
Titan Co.'s profit and revenue rose in the second quarter of fiscal 2024, beating analysts' estimates even as margins remained under pressure.
The consolidated net profit of the country's largest branded jewellery maker rose 9.7% to Rs 916 crore in the quarter ended September, according to an exchange filing on Wednesday. That compares with the Rs 866.6 crore consensus estimate of analysts tracked by Bloomberg.
Revenue for the owner of the Tanishq brand rose 36.7% to Rs 12,529 crore, against the Rs 9,772.5 crore forecast.
Titan Q2 FY24 Highlights (Consolidated, YoY)
Operating profit 13.2% to Rs 1,411 crore, as against an estimate of Rs 1,273.5 crore.
Margin was at 11.3% versus 13.6% on higher expenses. Analysts had forecast it at 13%.
The Tata Group company opened 68 stores during the quarter, taking the total count to 2,613, as of September 2023. The highest number of stores were added for jewellery business at 39, followed by 20 stores for watches and wearables, five eyecare stores. Four Taneira outlets were also added.
Shares of Titan rose 2.65% at Rs 3,286.4 apiece after the results were declared, as compared with a 0.52% gain in the benchmark NSE Nifty 50. | India Business & Economics |
London, the laundromat for dirty money billionaires?
Updated: 2 days ago
-'Britain is the biggest enabler of financial crime in the world'
That's a quote I came across while watching a YouTube video about the city of London's financial systems. This sparked me to look deeper into the workings of arguably the biggest financial hub on the planet.
So how does dirty money get laundered through London? The first part of the puzzle is the city of London, not the London metropolitan area, specifically the city of London. It is a square mile in the centre of London and contains recognizable buildings such as the walkie talkie and the gherkin. It's also the main business district in London along with canary wharf. What makes the city of London different is it is not governed by parliament and is its own governing body, therefore this square mile in London has its own set of laws. Laws that uniquely benefit people wanting to hide money.
Now we know why the money can be hidden let’s look at how they hide it. There are so many nuances and laundering money is an extremely complicated process but at simplified level it mostly comes down to offshore trusts and shell companies. By layering their business and assets in multiple levels of anonymous shell companies and trusts it becomes extremely difficult to tie money to someone. Although it may be possible to find out who the money belongs to the hard part is proving that in the high court due to the city of London's banking secrecy laws. However, it isn't just the unclear laws that allow this to happen it's also the lack of enforcement by regulators; but this is completely unsurprising when the whole of the UK's serious fraud office has a yearly budget of £50 million. The billionaires hiding the money are making that in just a few months. Another one of the many components of this complicated money laundering machine is London's accountants and lawyers are a highly connected network that will work tirelessly to hide their money. The demand for these services in the private sector means that the serious fraud office is completely outgunned.
Once the money is in its offshore trust it is then sent around the different 'self-governing' overseas territories of the UK such as the British Virgin Isles or the Cayman Islands before it is sent back to London. The UK is one of the only places in the world that allows you to buy property through an offshore company allowing them to gain assets in Britain, which due to its reputation legitimizes their wealth and there is no governing body that can realistically enforce it. But this isn't just something that is allowed within the UK it is encouraged; this can be seen with the golden visa scheme which allowed high net worth individuals to buy UK citizenship further streamlining the process of cleaning dirty money.
This isn't just a theory though, let’s look at some examples of people who have abused this system. First up we have, unsurprisingly, Russian oligarch Andrey Guryev with a net worth of $8.3 billion. As with most other oligarchs he acquired his wealth during collapse of the Soviet Union in the 1990's when select people obtained previously state-owned assets at much below the market value. This was a theft from the Russian people as a result of criminal government corruption which has resulted in 500 people who are closely connected to Putin owning more wealth than the bottom 99.8% of the population. Yes, 99.8%. Guryev is also the owner of the biggest house in London second only to Buckingham palace. This property and his assets in London were bought using dirty money stolen from Russian people and former soviet states, yet we facilitate them hiding it so they can continue to live a lavish lifestyle.
There are hundreds of examples to choose from when talking about billionaires who hide money in London but next, we'll look at Dmytro Firtash, a Ukrainian with close ties to Putin and the Kremlin. Firtash bought gas at under market value from Russian giant Gazprom before he sold it to Ukraine for a huge profit, making him 3 billion dollars. In addition, he has funnelled his money into Ukrainian politics trying to instil pro-Russian leaders. It’s clear that this man has being stealing from the Ukrainian people since the collapse of the Soviet Union. He then took the billions he made and put it into London buying a mansion and various other assets. The worst part about this is he wasn't just allowed to hide his money here, but he was welcomed by high society; he donated millions to Cambridge university and even meeting the duke of Edinburgh.
It's clear that the UK's financial system allows these people to profit from crimes but what are the effects of this economically? By nature, it is something very difficult to collect data on, but it is estimated that it costs the world over £100 billion a year in lost tax revenue. This means there is an opportunity cost as the money stays with the wealthy elite instead of contributing to society through government spending. There's an endless number of ways this money can be spent; it could be used to build transport infrastructure that could reduce structural unemployment or maybe invested into education systems increasing the productivity of the labour pool and therefore boosting international competitiveness, the possibilities are endless.
So, if all of these benefits can be had by not allowing this why does it still exist? The simple answer is corruption, all it takes is to look at how much Russian oligarchs have donated to the conservative party. Or maybe if parliament isn't enough how about Evgeny Lebedev media millionaire and member of the house of lords. If that name doesn't sound British it’s because he isn't, his father is an ex-KGB officer and Russian oligarch. This problem goes to a systemic level and maybe there are some economic benefits to the money bought into the UK as a result of this, but I don't think it is fair that the UK provides a place for criminals to shelter their money from the law. | United Kingdom Business & Economics |
Prime Minister Rishi Sunak has again refused to say if the Birmingham to Manchester leg of HS2 will be axed.
Asked by the BBC's Laura Kuenssberg if the high-speed line would reach Manchester, he said: "We're getting on with delivering [the project], I'm not going to comment on this speculation."
Rising costs have led to growing doubts over this second leg of HS2.
The first leg, between London and Birmingham, is already under construction.
HS2 is seen as key to the government's pledge to "level up" the country. Labour and some Tory MPs have warned against scaling it back.
On Saturday, former PM Theresa May became the latest Conservative voice to warn against downgrading the project.
Andy Street, the Tory mayor of the West Midlands, has also criticised the idea, while London mayor Sadiq Khan warned it could make the UK a "laughing stock".
But Mr Sunak said he "completely" rejected the criticism, telling Kuenssberg that the government was "absolutely committed to levelling up across this country".
He highlighted a levelling up fund for 55 towns, adding that the UK was attracting "billions of pound of investment into this country, creating jobs everywhere".
On Sunday, Levelling Up Secretary Michael Gove described HS2 as an "important project" but added that "we do need to look at value for money".
"The costs of this project have been significantly greater than originally estimated," he told Sky's Sunday Morning With Trevor Phillips.
He also said that transport links in the North need to be improved between and within cities.
Speculation around the future of HS2 has been swirling for weeks, with the PM and other ministers repeatedly declining to confirm whether the project will be scaled back.
Many in Westminster had expected an announcement to have happened before the start of the Conservative Party Conference in Manchester, which kicks off on Sunday.
No 10 appears to have concluded it can get through the four days of conference without clarifying its position.
A senior government source told the BBC: "We are in Manchester - but we are not speaking to Manchester, we are speaking to the country."
With no announcement this week, it may be that the fate of HS2 is not clarified until Jeremy Hunt's Autumn Statement - which won't take place until 22 November.
Delays and cuts
The HS2 scheme has already faced delays, cost increases and cuts. The planned eastern leg between Birmingham and Leeds was axed in late 2021.
In March, the government announced that building the line between Birmingham and Crewe, and then onto Manchester, would be delayed for at least two years.
The last official estimate on HS2 costs, excluding the cancelled eastern section, added up to about £71bn. But this was in 2019 prices so it does not account for the rise in costs for materials and wages since then.
The possible scrapping of the leg to Manchester has also raised concerns over other plans to improve rail services across northern England.
The Northern Powerhouse Rail (NPR) scheme plans to speed up links between Liverpool, Manchester and Leeds through a mixture of new and upgraded lines.
However, these plans include a section of the HS2 line from Manchester Airport to Manchester Piccadilly, as well as planned upgrades to Manchester Piccadilly station.
Earlier this week, the mayor of Greater Manchester, Andy Burnham, said scrapping the HS2 extension to Manchester risked "ripping the heart" out of the NPR scheme. | United Kingdom Business & Economics |
Interest rates are predicted to rise less sharply after the UK saw a surprise drop in inflation in June.
The Bank of England has put up rates 13 times since December 2021 to try to cool soaring price rises, driving up borrowing costs for millions.
But experts say it is now under less pressure to do so after inflation fell sharply to 7.9% in June, down from 8.7% the previous month.
It means UK inflation has fallen to its lowest level in more than a year.
Falling fuel prices contributed to the drop in June, while food prices are rising less quickly.
However, experts cautioned that the UK's inflation rate remains almost four times higher than the official target - and far above other developed countries.
"It is a large drop but let's forget that last month we saw no change at all in headline inflation so in some ways what we are seeing this morning is catching up with the falls we've seen in other similar countries," Grant Fitzner, chief economist at the Office for National Statistics (ONS), which publishes the figures, told the BBC's Radio 4's Today Programme.
"It still looks like we may have the highest rate of inflation in the G7 [group of developed nations], so still some way go."
In the US, inflation is 3%, and in the eurozone it is 5.5%.
Prices of food, energy and services have shot up since last year, squeezing households.
In response the Bank of England has put up interest rates 13 times since December 2021 to try to ease inflation, which is the rate at which prices rise over time.
It hopes that by making borrowing more expensive, consumers will spend less and price rises will cool. However, inflation has remained stubbornly high, worrying policymakers.
Rising interest rates have also driven up mortgage borrowing costs to their highest level in 15 years, leaving millions of homeowners facing higher monthly repayments.
It appears that most measures of inflation are now heading in the right direction, with inflation expected to fall below 7% next month, as drops in household energy bills impact the numbers.
So called core inflation - which strips out volatile elements like fuel and energy prices - also dipped in June.
However, annual food price inflation remained stubbornly high at 17.3%.
It means the Bank of England is still expected to raise interest rates again at its next decision in two weeks. Last month it hiked rates to 5% from 4.5%. This time it is expected to opt for a smaller rise of 0.25 percentage points.
When inflation is falling it does not mean prices fall too, just that they rise less quickly.
However James Smith, research director at the Resolution Foundation, which campaigns to improve living standards, said June's "chunky inflation rate fall" offered some "unambiguously good news" after months of disappointing data on the state of the economy.
"The scale of the fall will ease pressure on mortgages and wages, with the Bank of England less likely to keep interest rates higher for longer."
He added that an 18-month squeeze on peoples real wages, which account for rising prices, was "coming to an end".
But Yaelâ¯Selfin, chief economist at KPMG UK, said that while inflation was likely to continue falling in the coming months, it would not return to the Bank of England's 2% target before early 2025.
As such, the Bank is "unlikely to substantially change its hawkish policy stance" on interest rates in the short term.
Chancellor Jeremy Hunt welcomed June's inflation figures but said the government wasn't complacent. "We know that high prices are still a huge worry for families and businesses".
But Rachel Reeves, Labour's shadow chancellor, said inflation had been "persistently high and remains higher than our international peers".
And Liberal Democrat Treasury spokesperson Sarah Olney said June's figures would "bring cold comfort to countless families worried about their mortgage going up".
How can I save money on my food shop?
- Look at your cupboards so you know what you have already
- Head to the reduced section first to see if it has anything you need
- Buy things close to their sell-by-date which will be cheaper and use your freezer | United Kingdom Business & Economics |
More than 50 Conservative MPs are demanding that Rishi Sunak scrap the “morally wrong” inheritance tax.
The proportion of homes under threat from the levy has more than doubled since the Conservatives came to power, despite George Osborne, the former Chancellor, pledging to abandon the death tax for all but the most wealthy in the run up to the 2010 election.
Instead, the threshold has been frozen since 2010 and almost 40 percent of homes sold in England and Wales last year were worth more than the basic allowance.
The levy is regarded as profoundly unfair as it penalises people who have saved money throughout their lives after paying tax on their income – and is punishing middle class families who want to help children or grandchildren to own homes.
The Telegraph is launching a campaign to scrap inheritance tax – a move which should be put at the heart of the Conservatives’ next election manifesto amid growing fears that Labour is plotting to target savings and assets to fund even higher levels of state spending.
This newspaper is receiving a growing number of letters from readers facing intrusive probate investigations into their estates at one of the most difficult moments in their lives. Many other countries are removing similar levies.
Writing in this newspaper, former chancellor Nadhim Zahawi describes the death duty as “morally wrong” and warns that it is adding inflationary pressure to house prices.
Mr Zahawi writes: “Inheritance tax is that other spectre that haunts us alongside death. As well as being morally wrong to take someone’s assets on their death, it also creates all sorts of inefficient and damaging distortions in our personal finances, and the wider economy.”
Former business secretary Jacob Rees Mogg said inheritance tax raised only a “modest amount” for the Treasury and should be scrapped. The taxman collected £7.1bn in inheritance tax last year.
He said: “Death duties are an inefficient form of taxation that is unfair and economically damaging. Unfair because it is a double tax on already taxed assets.
“Economically damaging because it leads to the misallocation of capital as investments are made to avoid a distortive tax rather than to maximise investment return.”
The tax remains deeply unpopular, with around half of the public judging it to be unfair or very unfair according to a recent poll by YouGov.
Former home secretary Priti Patel described the inheritance tax system as both “regressive and punitive”.
She said: “People should be in control of their income and have the ability to determine the future of the assets they have worked hard to save and build up during their lifetime.
“Substantial long term reform is required and I would encourage proactive steps to support hard pressed families across our country.”
The campaign comes more than 15 years after the then shadow chancellor Mr Osborne pledged to raise the inheritance tax threshold to £1m – ensuring that only millionaires would pay the levy under the Tories.
The move was so popular that it was widely credited with deterring Gordon Brown from calling a snap election.
However, the inheritance tax threshold has remained at £325,000 since 2010 and Chancellor Jeremy Hunt has now frozen it until 2028.
The Conservative Growth Group of 55 MPs will launch a campaign in June to convince the Treasury to abolish inheritance tax in the Autumn Statement later this year. An election is expected in 2024.
The group, led by allies of former PM Liz Truss, will publish a paper justifying why parents should have the freedom to pass their wealth to their children without sacrificing a chunk to the state.
The Tories behind the campaign believe such a move could provide a much needed boost for the Conservatives, who are lagging behind Labour by double digits in the polls and haemorrhaged more than 1,000 seats in May’s local elections.
Ranil Jayawardena, a former member of Mrs Truss’s Cabinet and co-chairman of the Conservative Growth Group, told the Telegraph: “We need to be bold and abolish inheritance tax altogether – no ifs, not buts.
“It’s a death tax. It’s also a double tax, because it’s a tax on money that has already been taxed. It’s not fair, it’s not Conservative and it’s not very British. It needs to go.”
Inheritance tax is charged at 40 per cent on wealth over the £325,000 threshold. Individuals have an extra £175,000 allowance towards their main residence if it is passed to children or grandchildren, and spouses can share their allowances.
However, rising house prices over the past decade have dragged an increasing number of ordinary families into paying the tax and forced many more to take action to avoid falling into the trap.
Analysis for the Telegraph today reveals that the number of families forced to pay the tax will surge by 45 per cent over the next decade with 60,000 hit in 2033 and the average bill topping £300,000.
Growing numbers of grieving families must also face the burden of filling out paperwork and consulting financial advisers to ensure they claim their allowances and do not pay more than they need to.
Homeowners in the South East have been hit particularly hard, where almost two-thirds of properties sold last year exceeded the minimum threshold, Hamptons found.
A series of stealth tax rises have pushed the national tax burden to a record £786.6bn and it is on course to hit the highest level since the Second World War.
Yet Rishi Sunak has so far put off reducing Britain’s tax burden, stressing that his priority is to get inflation down as prices have soared in the wake of the Covid crisis and war in Ukraine.
A Treasury spokesman said: “More than 93 per cent of estates aren’t expected to pay any inheritance tax in the coming years – however the tax still raises more than £7 billion a year to help fund public services like the NHS and schools.
“Estates of surviving spouses and civil partners can pass on up to £1 million without an inheritance tax liability – significantly more than the average UK home of £285,000.” | United Kingdom Business & Economics |
Analyst Who Called Chinese Bank Turmoil Says Trusts Are Next
Many of these firms are “deeply distressed, potentially with their capital solvency at risk,” said Jason Bedford.
(Bloomberg) -- The analyst who predicted the troubles that cascaded through China’s regional banks four years ago now has similar warning for the nation’s $2.9 trillion trust industry.
Many of these firms are “deeply distressed, potentially with their capital solvency at risk,” said Jason Bedford, a former analyst with Bridgewater Associates and UBS Group AG.
Bedford made his name by issuing early warnings about troubles roiling China’s smaller banks after combing through nearly 250 financial statements. He’s now done the same for China’s trust firms, a corner of the country’s shadow banking sector that can offer returns several times that of a bank deposit.
Of the 55 trust companies that issued financial statements for 2022, 14 reported non-performing and special mention assets that topped one third of their total assets, according to Bedford’s calculations. Many of the 13 firms that didn’t report could also be in trouble, he said.
The National Administration of Financial Regulation, which oversees trust firms, didn’t respond to a request for a comment.
Cracks have already appeared in the sector which has lent extensively to troubled real estate developers. Missed payments from Zhongrong International Trust Co. sparked protests earlier this year, while the industry saw its first bankruptcy in May when New China Trust Co. folded.
Trusts typically take deposits from wealthy individual investors and companies to make investments in stocks, bonds and others assets, including loans to firms that can’t access traditional banks. Trusts, which operate with fewer regulations than banks, account for almost 10% of total loans in China, according to Bloomberg Economics.
Read more: Why Crisis at China Trust Firm Stokes Contagion Fears: QuickTake
While Zhongrong did not display the typical stress indicators, with distressed assets representing just 3.7% of total assets last year, its problems appear to stem from the broader Zhongzhi Enterprise Group Co. and its possible role in raising financing that was potentially rolling over other products, said Bedford.
China this month opened a criminal investigation into the money management business of Zhongzhi, just days after the shadow banking giant revealed a shortfall of $36.4 billion in its balance sheet.
In recent years, even as rival trusts pared risks, Zhongzhi and its affiliates, especially Zhongrong, extended financing to troubled developers and snapped up assets from companies including China Evergrande Group.
Compared with banks which have a relatively uniform business model, trust companies are much more varied. “While some have a future, the era of high-interest rate lending to real estate developers, which has long been a mainstay for many trust companies, appears over,” said Bedford.
--With assistance from Zhang Dingmin.
©2023 Bloomberg L.P. | Asia Business & Economics |
NEW YORK -- A three-year pause on student loan payments will end this summer regardless of how the Supreme Court rules on the White House plan to forgive billions of dollars in student loan debt.
If Congress approves a debt ceiling deal negotiated by House Speaker Kevin McCarthy and President Joe Biden, payments will resume in late August, ending any lingering hope of a further extension of the pause that started during the COVID pandemic. Even if the deal falls through, payments will resume 60 days after the Supreme Court decision.
That ruling is expected sometime before the end of June. No matter what the justices decide, more than 40 million borrowers will have to start paying back their loans by the end of the summer at the latest.
Here's what to know to get ready to start paying back loans:
HOW SHOULD I PREPARE FOR STUDENT LOANS PAYMENTS TO RESTART?
Betsy Mayotte, President of the Institute of Student Loan Advisors, encourages people not to make any payments until the pause has ended. Instead, she says, put what you would have paid into a savings account.
“Then you’ve maintained the habit of making the payment, but (you're) earning a little bit of interest as well," she said. "There’s no reason to send that money to the student loans until the last minute of the 0% interest rate."
Mayotte recommends borrowers use the loan-simulator tool at StudentAid.gov or the one on TISLA’s website to find a payment plan that best fits their needs. The calculators tell you what your monthly payment would be under each available plan, as well as your long-term costs.
“I really want to emphasize the long-term,” Mayotte said.
Sometimes, when borrowers are in a financial bind, they’ll choose the option with the lowest monthly payment, which can cost more over the life of the loan, Mayotte said. Rather than “setting it and forgetting it,” she encourages borrowers to reevaluate when their financial situation improves.
WHAT'S AN INCOME-DRIVEN REPAYMENT PLAN?
An income-driven repayment plan sets your monthly student loan payment at an amount that is intended to be affordable based on your income and family size. It takes into account different expenses in your budget, and most federal student loans are eligible for at least one of these types of plans.
Generally, your payment amount under an income-driven repayment plan is a percentage of your discretionary income. If your income is low enough, your payment could be as low as $0 per month.
If you’d like to repay your federal student loans under an income-driven plan, the first step is to fill out an application through the Federal Student Aid website.
TALK TO AN ADVISER
Fran Gonzales, 27, who is based in Texas, works as a supervisor for a financial institution. She holds $32,000 in public student loans and $40,000 in private student loans. During the payment pause on her public loans, Gonzales said she was able to pay off her credit card debt, buy a new car, and pay down two years’ worth of private loans while saving money. Her private student loan payment has been $500 a month, and her public student loan payment will be $350 per month when it restarts.
Gonzales recommends that anyone with student loans speak with a mentor or financial advisor to educate themselves about their options, as well as making sure they're in an income-driven repayment plan.
The Federal Student Aid website can help direct you to counselors, as well as organizations like the Student Borrower Protection Center and the Institute of Student Loan Advisors.
“I was the first in my family to go to college, and I could have saved money with grants and scholarships had I known someone who knew about college,” she said. “I could have gone to community college or lived in cheaper housing … It’s a huge financial decision.”
Gonzales received her degree in business marketing and says she was “horrible with finances” until she began working as a loan officer herself.
Gonzales's mother works in retail and her father for the airport, she said, and both encouraged her to pursue higher education. For her part, Gonzales now tries to inform others with student loans about what they're taking on and what their choices are.
“Anyone young I cross paths with, I try to educate them.”
CAN I SET UP A PAYMENT PLAN FOR MY STUDENT LOANS?
Yes — payment plans are always available. Even so, some advocates encourage borrowers to wait for now, since there’s no financial penalty for nonpayment during the pause on payments and interest accrual.
Katherine Welbeck of the Student Borrower Protection Center recommends logging on to your account and making sure you know the name of your servicer, your due date and whether you’re enrolled in the best income-driven repayment plan.
WHAT IF I CAN'T PAY?
If your budget doesn’t allow you to resume payments, it’s important to know how to navigate the possibility of default and delinquency on a student loan. Both can hurt your credit rating, which would make you ineligible for additional aid.
If you’re in a short-term financial bind, according to Mayotte, you may qualify for deferment or forbearance — allowing you to temporarily suspend payment.
To determine whether deferment or forbearance are good options for you, you can contact your loan servicer. One thing to note: interest still accrues during deferment or forbearance. Both can also impact potential loan forgiveness options. Depending on the conditions of your deferment or forbearance, it may make sense to continue paying the interest during the payment suspension.
HOW CAN I REDUCE COSTS WHEN PAYING OFF MY STUDENT LOANS?
— If you sign up for automatic payments, the servicer takes a quarter of a percent off your interest rate, according to Mayotte.
— Income-driven repayment plans aren’t right for everyone. That said, if you know you will eventually qualify for forgiveness under the Public Service Loan Forgiveness program, it makes sense to make the lowest monthly payments possible, as the remainder of your debt will be cancelled once that decade of payments is complete.
— Reevaluate your monthly student loan repayment during tax season, when you already have all your financial information in front of you. “Can you afford to increase it? Or do you need to decrease it?” Mayotte said.
— Break up payments into whatever ways work best for you. You could consider two installments per month, instead of one large monthly sum.
ARE STUDENT LOANS FORGIVEN AFTER 10 YEARS?
If you’ve worked for a government agency or a nonprofit, the Public Service Loan Forgiveness program offers cancellation after 10 years of regular payments, and some income-driven repayment plans cancel the remainder of a borrower’s debt after 20 to 25 years.
Borrowers should make sure they’re signed up for the best possible income-driven repayment plan to qualify for these programs.
Borrowers who have been defrauded by for-profit colleges may also apply for borrower defense and receive relief.
These programs won’t be affected by the Supreme Court ruling.
___
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. | Personal Finance & Financial Education |
When you are on the breadline there’s always this fear at the back of your mind, says Ben. “You are constantly thinking: have I got enough to cover even the normal everyday basics? You get stuck in a cycle, living at this level of subsistence; it’s dehumanising, horrible.”
Ben, 39, is a former hospitality worker who lives in Warrington. A recovering alcoholic, he has been claiming universal credit for a year. It is hard, he says, but he reckons it is far worse for many other people: “In a sense, I’m in a fairly privileged situation,” he says.
What he means is that he is single, with no immediate dependants (he is living apart from his partner and child). He has time on his hands to search out bargains on the supermarket’s “reduce to clear” shelves. He can walk everywhere and not use the bus. “I can eat hand to mouth,” he says. “It sounds quite ‘survivalist’ I suppose.”
After paying a top up to his landlord, Recovery Homes, which is a specialist accommodation for recovering addicts, and child maintenance, Ben estimates he has £150 of his £360 a month universal credit left to cover basic living costs. It is just about do-able, he says, if you adopt a super-thrifty mindset.
“I buy staples in bulk. Let’s say I’m frugal with fruit and vegetables. Yoghurt was £1 a pot, now its £1.50, so that’s a luxury rarely indulged,” he says. Milk often feels a bit extravagant. Haircuts are tightly rationed– a £10 cut once every two months. “I haven’t had to use the food bank for a while now,” he adds cheerily.
Ben volunteers at Warrington food bank, part of the Trussell Trust network. There he sees up close the relentless stress endured by people he believes are “stuck in quicksand” and really struggling. “It’s heartbreaking to see the families – parents who are powerless to do what they need to do for their children.”
The food bank is a window into how things have got worse over the past year, he says. More people are coming for food parcels, and making repeated visits, and their situation rarely seems to improve. “I’ve witnessed that shift, where people have gone from ‘heating or eating’ to ‘clutching at straws’, where they can’t afford to do either.”
He praises the government’s cost of living support programme, but is unimpressed by its 10.1% uprating of universal credit from April, generous though it may seem. The basic rate will be £85 a week for someone like him. “When you are that far beneath the poverty line, 10% of very little is still very little.”
What does he make of Joseph Rowntree Foundation and Trussell Trust’s proposed essentials guarantee, which would raise his weekly basic allowance to £120? He reckons it is far from excessive. “I’d call £120 a week the ‘maintain-your-basic humanity’ level.” | United Kingdom Business & Economics |
We are taught to revere the judiciary because divining legal truth is supposed to be heady stuff.
We probably shouldn’t.
For evidence, witness the bizarre rationale provided by Supreme Court Justice Ketanji Brown Jackson to support affirmative action. “For high-risk Black newborns,” she wrote in her dissent on the recent SCOTUS ruling, “having a Black physician more than doubles the likelihood that the baby will live and not die.” I would love to see the “research” on that doozy.
Another gem from the judiciary came about two weeks ago courtesy of a Manhattan federal judge named Analisa Torres. Securities law experts say that she, in essence, ruled that small investors don’t deserve the same type of protections as some dude working at a hedge fund.
Yeah, you read that right.
Judge Torres, of course, didn’t say those exact words, but you don’t need to be a legal scholar to decipher the upshot on her weird decision that’s roiling the $1.2 trillion crypto market.
It involves the digital token XRP, utilized and sold by a crypto company named Ripple, and it’s further proof that judges can be acutely witless. More important, that Congress needs to take crypto regulation out of the hands of the judiciary ASAP and fix this possibly transformative business before it moves to places where there’s more rational regulations, like China.
To get a better understanding of this mess, let’s go back to around 2012, when Ripple (no known relation to that cheap wine people used to drink back in the day) unveiled its cross-border payment system that uses blockchain technology to facilitate faster transactions.
It’s basically a crypto version of the SWIFT system used by banks to transfer money across the globe. By most accounts, it’s a decent product, and its goal is to make money transfers cheaper and more seamless via the blockchain.
The trouble began around 2017 when Ripple, which also created the digital coin XRP, began selling tons of it. Some proceeds went into financing Ripple’s platform; execs who had XRP sold as well.
Some of these sales were to big investors, so-called institutions. Company officials, such as its CEO, Brad Garlinghouse, and its founder, Chris Larsen, and the company itself also sold additional XRP to small investors, not directly but by pumping the stuff through crypto exchanges.
Cost of doing business
The way securities laws traditionally work, when a company like Apple does something like this via a private placement or selling pre-IPO shares, an IPO or a secondary offering of stock, they go to the SEC and file a bunch of stuff about their operations. Depending on the type of sale (IPOs demand more disclosure than private placements), this can be time-consuming and expensive, but it’s the cost of doing business.
The reason: Stocks find their way into the hands of small investors, who aren’t plugged in like the hotshots at the big Wall Street asset management firms, aka institutions, that have the CEO and CFO on speed dial. Average people who buy stocks need to be able to see what the company is up to in a way that they can understand. The legal term for all of that is known as “disclosure.”
Ripple didn’t do that in selling all that XRP and it’s the reason why in 2020, the SEC sued the company and its top execs looking for damages and disclosure.
I’ve spoken both to SEC types who brought the case, and Ripple officials including Garlinghouse; both make compelling arguments for why they did what they did. The SEC, according to Ripple, is picking crypto winners and losers. Other cryptocurrencies, like Ethereum, did similar stuff, and the SEC hasn’t sued those guys. Plus crypto is an animal all its own and under law can’t be regulated like public companies.
The SEC worries about the Wild West stuff that goes on with digital coins — recall the notorious SBF. Plus, what’s the harm if Ripple just came in and filled out some paperwork about its operations?
Torres’ ruling, meanwhile, makes some of the most absurd legal arguments impacting securities laws and now crypto regulation. Some of Ripple’s XRP sales to those Wall Street fat cats were in fact securities, and demand disclosure because these were so-called investment contracts, she declares.
Then she rules that Ripple’s disclosure-free sales to small investors were totally kosher. According to her (il)logic, because they purchased their XRP through an intermediary like an exchange, they were not entering into investment contracts. These “blind” sales aren’t securities, so it’s perfectly legal for Ripple to stiff the little guy on disclosure.
In her words, both sides won, both lost. And now one really knows how to proceed going forward.
What may have escaped Torres and her law clerks is that the vast majority of regular stock purchases on apps or from your broker are similarly “blind.” Yet Apple, like all public companies, provides lots of disclosures because the law says small investors need them more than hedge funds.
Maybe there’s a method to Torres’ madness. She’s an Obama appointee and could be looking to emulate the Biden-appointed Brown Jackson and her legal reasoning to join SCOTUS when Sleepy Joe gets around to packing the court.
In the meantime, the crypto industry will have to live with one of the more bizarre and dangerous court rulings I’ve ever seen in covering finance for three decades. | Crypto Trading & Speculation |
Global Central Bankers Warn Of Uncertainty Amid Rate Debate
Central bankers from Australia, England and Thailand warned that the monetary policy outlook remains uncertain, despite growing global expectations that interest rates are at or close to their peak.
(Bloomberg) -- Central bankers from Australia, the UK and Thailand warned that the monetary policy outlook remains uncertain, despite growing global expectations that interest rates are at or close to their peak.
The Reserve Bank of Australia is grappling with “a wide range of uncertainties and experiences,” Governor Michele Bullock said at a monetary conference in Hong Kong. Economic activity has held up more than expected and services inflation is proving “a bit sticky,” she added.
Bank of England Deputy Governor Dave Ramsden noted that he’s becoming more confident about the outlook, though many uncertainties remain. Markets have internalized that rates will remain higher for longer, he said, while noting the volatility of the rates markets and its sensitivity to data releases.
Higher interest rates have boosted bank profitability, but the effect will be short term, said Bank of Spain Governor Pablo Hernandez de Cos. He warned that at some point credit risks may arise, and there may be losses in assets.
“We are sending the message that the banking sector should remain very prudent,” he said, suggesting banks should use their high profitability to increase their resilience.
Bank of Thailand Governor Sethaput Suthiwartnarueput expressed concern about the high level of household debt, which stands at about 90% of gross domestic product. Other factors complicating policy include that credit growth has turned negative for small and medium-sized businesses, and tourism from China has not returned to pre-pandemic levels.
In addition, Sethaput said Thailand and some other emerging markets may end up with lower rates than in the US, something that hasn’t been seen before.
“We’re in a pretty decent position to handle the volatility,” he said. “That said, I think it’s important not to be too sanguine.”
Hong Kong Financial Secretary Paul Chan gave the opening remarks at the conference organized by the Hong Kong Monetary Authority and the Bank for International Settlements.
The trend toward deglobalization and de-risking is a concern, Chan said, warning it would hinder economic growth, limit access to markets and impact supply chains. On the plus side, a full-blown decoupling seems less likely due to a recent easing in geopolitical tensions.
Still, the change is sizable enough to alter the face of the global economy — and the way future economic crises unfold, according to Philipp Hildebrand, vice chairman of BlackRock Inc. and former head of the Swiss National Bank.
Fragmented trade, along with aging populations and a move toward net zero means many countries will be facing significant supply-side constraints, Hildebrand said. “This means that we’re going to constantly bump up against sticky inflation, even when we get to 2%.”
Central banks should not be caught unaware by another inflation spike, the way many were post-pandemic, said Jacob Frenkel, ex-Bank of Israel governor.
“Are the shocks permanent or transitory is the wrong way to pose the question. The role of the central banker is to ensure those shocks that come to the system become temporary because of the actions the central bank will take,” Frenkel said. “If they becomes permanent, then it means that you failed.”
The coming years are going to be “much more difficult” than the previous ones, said Philip Lowe, who was governor of the RBA until mid-September this year and was Bullock’s predecessor.
“I think we’re going to see a lot more variability in inflation than we’ve had for the last 30 years,” he said, adding the world is now in the first instance of this more volatile price environment.
“This is why the current inflation test is so important, it’s so important we pass it,” said Lowe. “Central banks have to be able to convince people that inflation will return to target fairly soon. If they don’t, then the next time inflation moves away from target — and there will be plenty of examples — people won’t believe that it’ll come back and that’ll make” the job much harder.
Lowe said he hopes most central banks have done enough, but he worries that “they haven’t and it’s doubly important that we pass this first inflation test.”
--With assistance from Suttinee Yuvejwattana, Michael Heath and Claire Jiao.
(Updates with comments from former governors.)
©2023 Bloomberg L.P. | Interest Rates |
Spending plans outlined in the chancellor's Autumn Statement represent "a very big fiscal risk", according to the UK's official economic forecaster.
Richard Hughes, chair of the Office for Budget Responsibility, told MPs on the Treasury Select Committee that spending plans carried a level of "uncertainty".
He explained that much of the spending promised is funded by projected savings rather than income already received.
Last week, the OBR slashed its forecast for UK economic growth.
In March, the OBR said it expected GDP - a measure of the size and health of a country's economy - to grow by 1.8% in 2024 and 2.5% in 2025.
Those predictions have now been cut, with a new forecast suggesting the UK economy will grow by 0.7% in 2024 and 1.4% in 2025.
Presenting his Autumn Statement last week, Chancellor Jeremy Hunt announced tax cuts, tighter welfare rules, and further measures aimed at getting more people into work.
"It is very difficult to assess the credibility of the government's spending plans, because after March of 2025 the government doesn't have any spending plans," Mr Hughes said, as he and other members of the OBR faced questions on the Autumn Statement.
The chancellor's speech, delivered to the Commons, is the government's main opportunity outside of the Budget to make tax and spending announcements.
Bigger-than-expected cuts to National Insurance (NI) and frozen tax brackets were raised in Tuesday's hearing in parliament.
The main rate will go down from 12% to 10% from January - although previous tax changes mean many workers will not be much better off.
However, members of the OBR told the committee that the impact on economic growth from this measure was "unambiguously" positive.
While Mr Hunt announced the cut to NI rates, he opted to leave NI and income tax thresholds untouched, meaning they remain frozen until 2028.
It means that as workers secure pay rises, they may end up paying more tax if they are dragged into a higher tax band than before.
Some 2.2 million more workers now pay the basic rate income tax of 20% compared with three years ago, according to official figures, while 1.6 million more people have found themselves in the 40% tax bracket in the same period.
Prof David Miles, a member of the Budget Responsibility committee, told MPs it wasn't clear how this measure would impact growth.
"It would mean that living standards would be lower and so may mean that workers would have to do additional hours," said Prof Miles. | United Kingdom Business & Economics |
- Ulta Beauty said revenue climbed 6% year over year during the third quarter.
- Shares rose as much as 10% in extended trading.
- The company also said its chief financial officer would retire in April.
Shares of Ulta Beauty rose in after-hours trading on Thursday, as the company said its third-quarter sales rose while shoppers showed once again they're willing to spend on makeup, face masks and more even when the budget is tight.
The specialty beauty retailer raised the bottom end of its range for full-year sales and earning expectations. It said it expects net sales for the fiscal year to be between $11.10 billion and $11.15 billion, and comparable sales to range from 5.0% to 5.5%. It said adjusted earnings per share for the year will range from $25.20 to $25.60
In a news release, CEO Dave Kimbell said the retailer saw healthy sales trends and added customers to its loyalty program. He said it's ready for the holidays and believes "the outlook for the Beauty category is bright."
Here's what Ulta reported for the three-month period that ended Oct. 28:
- Earnings per share: $5.07
- Revenue: $2.49 billion
It was not immediately clear if those numbers were comparable to consensus estimates from LSEG, formerly known as Refinitiv.
The company's shares rose as much as 10% in extended trading.
Ulta also announced a leadership change on Thursday. Chief Financial Officer Scott Settersten is retiring in April after nearly two decades at the beauty retailer. The company said he will be replaced by Paula Oyibo, Ulta's senior vice president of finance.
In the fiscal third quarter, net income rose to $249.5 million, or $5.07 per share, from $274.6 million, or $5.34 per share, in the year-ago period. Revenue increased from $2.34 billion in the year-ago period.
Comparable sales, a metric that tracks Ulta stores open at least 14 months along with online sales, increased 4.5% year over year.
During the quarter, customers made more trips to Ulta's stores and website, but spent slightly less. Transactions went up by nearly 6% and average ticket declined by 1.4% compared with the year-ago period.
Beauty has been one of the hottest categories for retailers over the past year. Even as consumers pull back on other types of discretionary purchases, they have continued to spend on makeup, face masks, fragrances and more.
That's inspired retailers, including Macy's, Target and Kohl's to lean into the category by adding new brands, products and square footage. Target, for example, has a growing number of Ulta shops in its stores.
As of Thursday's close, Ulta shares had fallen about 9% so far this year. That compares to the S&P 500, which is up about 19% year to date.
Shares of the company closed at $425.99 on Thursday, bringing the company's market value to about $20.97 billion.
This is breaking news. Please check back for updates. | Consumer & Retail |
- In afternoon testimony on Monday, FTX former engineering chief Nishad Singh told the jury about his one-on-one meetings with Sam Bankman-Fried regarding the company's finances.
- One meeting took place in the opulent balcony of FTX's property in the Bahamas.
- Singh told Bankman-Fried that he was "really freaked out" about FTX's net asset value situation.
In afternoon testimony on Monday, former FTX engineering chief Nishad Singh told a Manhattan jury about two one-on-one meetings he held with Sam Bankman-Fried last year to discuss the dire state of the crypto firm's finances.
Singh, who joined sister hedge fund Alameda Research in 2017 and then helped build the FTX exchange two years later, said that at most he would have a single private meeting with Bankman-Fried a year, so it was rare for him to get this much face time alone with the boss.
Singh said he asked for a meeting following a text exchange he had in June 2022 with Caroline Ellison, who ran Alameda, and Gary Wang, an FTX co-founder. The trio had a Signal chat called #organization to discuss the steep public relations costs to FTX if Alameda's financial problems were made public. During that exchange, Singh said he learned from Wang that Alameda was borrowing $13 billion from FTX.
Until that point, Singh testified, he thought FTX's assets were greater than its liabilities. To discuss the matter, Singh said he and Bankman-Fried met on the lush rooftop deck at the Orchid, the Bahamas residential building where the FTX and Alameda crew had an 11,500-square foot apartment.
Singh is cooperating with the prosecution as part of a plea deal he agreed to in February. At the time, Singh pleaded guilty to six charges, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws. Bankman-Fried faces seven criminal fraud charges and the potential of life in prison. He pleaded not guilty.
Over the course of a conversation that Singh said lasted an hour to an hour and a half, Bankman-Fried reclined on a white chaise lounge chair. Singh said he started the conversation by saying, "Caroline is really freaked out about the NAV situation, and so am I." NAV refers to net asset value, or the value of assets minus liabilities.
Bankman-Fried tried to reassure Singh, telling him "I'm not sure what there is to worry about," because NAV was "super positive."
When Singh asked about the $13 billion that Alameda couldn't pay back to FTX, Bankman-Fried responded, "Right, that, we are a little short on deliverables," according to the testimony. Singh asked about the size of the shortfall, and Bankman-Fried said that was the wrong question to be asking. The right question, he said, was how much the company could deliver. Bankman-Fried said he thought it could deliver $5 billion relatively quickly and "substantially more" in the next few weeks to months.
Singh responded with an expletive. Bankman-Fried then said the issue had been taking up 5% to 10% of his productivity that year.
But Bankman-Fried said he wasn't too worried, and that Alameda could sell assets. FTX could also raise money from investors and was launching its U.S. futures soon, which would be a boon for the business, Bankman-Fried said, according to Singh's testimony.
After Singh asked if he would finally agree to curb spending, Bankman-Fried said, "yes, definitely." Singh testified that after five years of putting everything into the company, he "felt betrayed" that it "turned out to be so evil." He said he considered leaving every day but wasn't sure if he could live with himself if his exit resulted in the business failing.
Bankman-Fried told Singh that he and FTX product head Ramnik Arora would be in New York in two weeks, and then in a month he'd be heading to the Middle East with Anthony Scaramucci, an FTX investor.
Singh then described in detail a second meeting that he'd requested upon Bankman-Fried's return from the Middle East. He said the FTX founder had come back in the middle of the day and immediately attracted a crowd, "like he so often does."
That next meeting took place in Bankman-Fried's second Bahamas apartment, which he called the Gemini 1D apartment. There Singh told the jury that he thought he might quit but instead asked Bankman-Fried for a real sense of how things went on the overseas trip.
Bankman-Fried said it was still possible to get another $5 billion. Singh wanted to know the plan for getting the rest needed to fill the $13 billion hole. Bankman-Fried told him the main plan was that FTX remain successful, adding that Singh was one of the few people who could make that happen.
Singh described Bankman-Fried as on edge during that conversation. He appeared mad and had his hands back, grinding his fingers and grinding his teeth.
"He glared at me with some intensity," Singh testified. Singh then asked, "Dear god, what else is there?" At the end, he apologized to Bankman-Fried for asking for the meeting.
Singh told the jury that he faces a max of 75 years in prison but is "hoping for no jail time." | Crypto Trading & Speculation |
For millions of Americans who buy their own health insurance through the Affordable Care Act marketplace, the end of the year brings a day of reckoning: It’s time to compare benefits and prices and change to a new plan or enroll for the first time.
Open enrollment starts Nov. 1 for the ACA’s federal and state exchanges. Consumers can go online, call, or seek help from a broker or other assister to learn their 2024 coverage options, calculate their potential subsidies, or change plans.
In most states, open enrollment lasts through Jan. 15, although some states have different time periods. California’s, for example, is longer, open until Jan. 31, but Idaho’s runs from Oct. 15 to Dec. 15. In most states enrollment must occur by Dec. 15 to get coverage that begins Jan. 1.
Health policy experts and brokers recommend all ACA policyholders at least look at next year’s options, because prices — and the doctors and hospitals in plans’ networks — may have changed.
It Could Be Another Record Year
ACA plans are now well entrenched — an estimated 16.3 million people signed up during open enrollment last year. This year may see even larger numbers. Enhanced subsidies first approved during the height of the covid pandemic remain available, and some states have boosted financial help in other ways.
In addition, millions of people nationwide are losing Medicaid coverage as states reassess their eligibility for the first time since early in the pandemic. Many of those ousted could be eligible for an ACA plan. They can sign up as soon as they know they’re losing Medicaid coverage — even outside of the open enrollment season.
Another important caution: Don’t wait until the last minute, especially if you are seeking help from a broker. Consumers this year will be asked to certify that they voluntarily agreed to brokers’ assistance and that their income and other information provided by brokers is accurate.
It’s a good protection for both parties, said broker Joshua Brooker, founder of PA Health Advocates in Pennsylvania. But brokers are concerned the requirement could cause delays, especially if clients wait until right before the end of open enrollment to apply.
“Brokers will need to stop what they are doing right at the end before they click ‘submit’ and wait for the consumer to sign a statement saying they reviewed the policy,” Brooker said.
Premiums Are Changing
While some health plans are lowering premiums for next year, many are increasing them, often by 2% to 10%, according to a Peterson-KFF Health System Tracker initial review of rate requests. The median increase, based on a weighted average across its plans for each insurer, was 6%.
Premiums, and whether they go up or down, vary widely by region and insurer.
Experts say that’s a big reason to log on to the federal website, healthcare.gov, in the 32 states that use it, or on to the insurance marketplace for one of the 18 states and the District of Columbia that run their own. Changing insurers might mean a lower premium.
“It’s very localized,” said Sabrina Corlette, research professor and co-director of the Center on Health Insurance Reforms at Georgetown University. “People should shop to maximize their premium tax credit, although that might require not only changing to a new insurance plan, but potentially also a new network of providers.”
Most people buying their own coverage qualify for the tax credit, which is a subsidy to offset some, or even all, of their monthly premium. Subsidies are based partly on the premium of the second-lowest-priced silver-level plan in a region. When those go up or down, possibly from a new insurer entering the market with low initial rates, it affects the subsidy amount.
Household income is also a factor. Subsidies are on a sliding scale based on income.
Subsidies were enhanced during the pandemic, both to increase the amount enrollees could receive and to allow more families to qualify. Those enhancements were extended through 2025 by President Joe Biden’s Inflation Reduction Act, passed last year.
Online calculators, including one at healthcare.gov, can provide subsidy estimates.
You May Qualify for Lower Deductibles and Copays
In addition to the premium subsidies, most ACA enrollees qualify for reduced deductibles, copayments, and other types of cost sharing if their income is no more than 2.5 times the federal poverty level, or about $75,000 for a family of four or $36,450 for a single-person household.
ACA plans are grouped into colored tiers — bronze, silver, gold, and platinum — based largely on how much cost sharing they require. Bronze plans offer the lowest premiums but usually the highest copayments and deductibles. Platinum plans carry the highest premiums but the lowest out-of-pocket expenses for care.
Cost-sharing reductions are available only in silver-level plans and are more generous for those on the lower end of the income scale. New this year: To help more people qualify, the federal marketplace will automatically switch eligible people to a silver plan for next year if they are currently enrolled in a bronze plan, as long as the enrollee has not made an adjustment in coverage themselves.
There are safeguards built in, said insurance expert and broker Louise Norris, so that people are auto-enrolled in a plan with the same network of medical providers and a similar or lower premium. Additionally, nine of the states that run their own marketplaces — California, Colorado, Connecticut, Maryland, Massachusetts, New Jersey, New Mexico, Vermont, and Washington — have enhanced their cost-sharing reduction programs by extending eligibility or increasing benefits.
Some 26-Year-Olds Will Get to Stay on Parents’ Plans Longer
Happy birthday! Existing federal marketplace rules allowing adult children to stay on their parents’ plans though the calendar year in which they turn 26, rather than lose coverage on their 26th birthday, were codified into regulation.
States that run their own markets can set similar rules, and some already allow for longer periods on a parent’s plan.
Networks May Still Be Small
Insurance plans often try to reduce premiums by partnering with a limited set of doctors, hospitals, and other providers. Those can change year to year, which is why insurance experts like Norris say enrollees should always check their plans during open enrollment to ensure their preferred physicians and medical centers are included in the network.
It’s also a good idea, Norris said, to look closely for changes in prescription drug coverage or copayments.
“The general message is, don’t assume anything and make sure you check to see who is in the network,” Norris said.
Last year, the Biden administration set rules requiring health plans to have enough in-network providers to meet specific driving time and distance standards. A proposal to limit how long patients wait for a routine appointment has been delayed until 2025.
What We Still Don’t Know
A few things remain uncertain as the end of the year approaches. For example, the Biden administration proposed this summer to reverse a Trump-era rule that allowed short-term insurance plans to be sold for coverage periods of up to a year.
Short-term plans are not ACA-compliant, and many have fewer benefits and can set restrictions on coverage, including barring people with health conditions from purchasing them. As a result, they are far less expensive than ACA plans. The Biden proposal would restrict them to coverage periods of four months, but the rule isn’t final.
Also pending: a final rule that would allow people to sign up for ACA coverage if they were brought to the U.S. as children by parents lacking permanent legal status — a group known as “Dreamers.” | Personal Finance & Financial Education |
Tech Review Explains: Let our writers untangle the complex, messy world of technology to help you understand what's coming next. You can read more here.
Before most people could realize the extent of what was happening, China became a world leader in making and buying EVs. And the momentum hasn’t slowed: In just the past two years, the number of EVs sold annually in the country grew from 1.3 million to a whopping 6.8 million, making 2022 the eighth consecutive year in which China was the world’s largest market for EVs. For comparison, the US only sold about 800,000 EVs in 2022.
The industry is growing at a speed that has surprised even the most experienced observers: “The forecasts are always too low,” says Tu Le, managing director of Sino Auto Insights, a business consulting firm that specializes in transportation. This dominance in the EV sector has not only given China’s auto industry sustained growth during the pandemic but boosted China in its quest to become one of the world’s leaders in climate policy.
How exactly did China manage to pull this off? Several experts tell MIT Technology Review that the government has long played an important role—propping up both the supply of EVs and the demand for them. As a result of generous government subsidies, tax breaks, procurement contracts, and other policy incentives, a slew of homegrown EV brands have emerged and continued to optimize new technologies so they can meet the real-life needs of Chinese consumers. This in turn has cultivated a large group of young car buyers.
But the story of how the sector got here is about more than just Chinese state policy; it also includes Tesla, Chinese battery tech researchers, and consumers across the rest of Asia.
When did China start investing in EVs and why?
In the early 2000s, before it fully ventured into the field of EVs, China’s car industry was in an awkward position. It was a powerhouse in manufacturing traditional internal-combustion cars, but there were no domestic brands that could one day rival the foreign makers dominating this market.
“They realized … that they would never overtake the US, German, and Japanese legacy automakers on internal-combustion engine innovation,” says Tu. And research on hybrid vehicles, whose batteries in the early years served a secondary role relative to the gas engine, was already being led by countries like Japan, meaning China also couldn’t really compete there either.
This pushed the Chinese government to break away from the established technology and invest in completely new territory: cars powered entirely by batteries.
The risks were extremely high; at this point, EVs were only niche experiments made by brands like General Motors or Toyota, which usually discontinued them after just a few years. But the potential reward was a big one: an edge for China in what could be a significant slice of the auto industry.
Meanwhile, countries that excelled in producing gas or hybrid cars had less incentive to pursue new types of vehicles. With hybrids, for instance, “[Japan] was already standing at the peak, so it failed to see why it needed to electrify [the auto industry]: I can already produce cars that are 40% more energy efficient than yours. It will take a long time for you to even catch up with me,” says He Hui, senior policy analyst and China regional co-lead at the International Council on Clean Transportation (ICCT), a nonprofit think tank.
Plus, for China, EVs also had the potential to solve several other major problems, like curbing its severe air pollution, reducing its reliance on imported oil, and helping to rebuild the economy after the 2008 financial crisis. It seemed like a win-win for Beijing.
China already had some structural advantages in place. While EV manufacturing involves a different technology, it still requires the cooperation of the existing auto supply chain, and China had a relatively good one. The manufacturing capabilities and cheap commodities that sustained its gas-car factories could also be shifted to support a nascent EV industry.
So the Chinese government took steps to invest in related technologies as early as 2001; that year, EV technology was introduced as a priority science research project in China’s Five-Year Plan, the country’s highest-level economic blueprint.
Then, in 2007, the industry got a significant boost when Wan Gang, an auto engineer who had worked for Audi in Germany for a decade, became China’s minister of science and technology. Wan had been a big fan of EVs and tested Tesla’s first EV model, the Roadster, in 2008, the year it was released. People now credit Wan with making the national decision to go all-in on electric vehicles. Since then, EV development has been consistently prioritized in China’s national economic planning.
So what exactly did the government do?
It’s ingrained in the nature of the country’s economic system: the Chinese government is very good at focusing resources on the industries it wants to grow. It has been doing the same for semiconductors recently.
Starting in 2009, the country began handing out financial subsidies to EV companies for producing buses, taxis, or cars for individual consumers. That year, fewer than 500 EVs were sold in China. But more money meant companies could keep spending to improve their models. It also meant consumers could spend less to get an EV of their own.
From 2009 to 2022, the government poured over 200 billion RMB ($29 billion) into relevant subsidies and tax breaks. While the subsidy policy officially ended at the end of last year and was replaced by a more market-oriented system called “dual credits,” it had already had its intended effect: the more than 6 million EVs sold in China in 2022 accounted for over half of global EV sales.
The government also helped domestic EV companies stay afloat in their early years by handing out procurement contracts. Around 2010, before the consumer market accepted EVs, the first ones in China were part of its vast public transportation system.
“China has millions of public transits, buses, taxis, etc. They provided reliable contracts for lots of vehicles, so that kind of provided a revenue stream,” says Ilaria Mazzocco, a senior fellow in Chinese business and economics at the Center for Strategic and International Studies. “In addition to the financial element, it also provided a lot of [road test] data for these companies.”
But subsidies and tax breaks are still not the whole picture; there were yet other state policies that encouraged individuals to purchase EVs. In populous cities like Beijing, car license plates have been rationed for more than a decade, and it can still take years or thousands of dollars to get one for a gas car. But the process was basically waived for people who decided to purchase an EV.
Finally, local governments have also sometimes worked closely with EV companies to customize policies that can help the latter grow. For example, BYD, the Chinese company currently challenging Tesla’s dominance in EVs, rose up by keeping a close relationship with the southern city of Shenzhen and making it the first city in the world to completely electrify its public bus fleet.
Okay, so China is the global EV leader. But how does Tesla, the most popular individual producer of EVs, fit in?
The development of China’s EV industry has actually been deeply intertwined with Tesla’s rise as the biggest EV company.
When the Chinese government handed out subsidies, it didn’t limit them to domestic companies. “In my opinion, this was very smart,” says Alicia García-Herrero, chief economist for Asia Pacific at Natixis, an investment management firm. “Rather than pissing off the foreigners by not offering the subsidies that everybody else [gets], if you want to create the ecosystem, give these subsidies to everybody, because then they are stuck. They are already part of that ecosystem, and they cannot leave it anymore.”
Beyond financial incentives, local Chinese governments have been actively courting Tesla to build production facilities in the country. Its Gigafactory in Shanghai was built extremely quickly in 2019 thanks to the favorable local policies. “To go from effectively a dirt field to job one in about a year is unprecedented,” says Tu. “It points to the central government, and particularly the Shanghai government, breaking down any barriers or roadblocks to get Tesla to that point.”
Today, China is an indispensable part of Tesla’s supply chain. The Shanghai Gigafactory is currently Tesla’s most productive manufacturing hub and accounts for over half of Tesla cars delivered in 2022.
But the benefits have been mutual; China has gained a lot from Tesla as well. The company has been responsible for imposing the “catfish effect” on the Chinese EV industry—meaning it’s forced Chinese brands to innovate and try to catch up with Tesla in everything from technology advancement to affordability. And now, even Tesla needs to figure out how to continue being competitive in China because domestic brands are coming at it hard.
What role did battery technology play?
The most important part of an electric vehicle is the battery cells, which can make up about 40% of the cost of a vehicle. And the most important factor in making an EV that’s commercially viable is a battery that’s powerful and reliable, yet still affordable.
Chinese companies really pushed battery technology forward on this front, says Max Reid, senior research analyst in EVs and battery supply chain services at Wood Mackenzie, a global research firm.
More specifically, over the past decade Chinese companies have championed lithium iron phosphate batteries, known as LFP technology, as opposed to the lithium nickel manganese cobalt (NMC) batteries that are much more popular in the West.
LFP batteries are safer and cheaper, but initially they weren’t the top choice in cars because they used to have much lower energy density and perform poorly in low temperatures. But while others were ditching LFP technology, a few Chinese battery companies, like Contemporary Amperex Technology Co. Limited (CATL), spent a decade researching them and managed to narrow the energy density gap.
Today, the EV industry is again recognizing the benefits of LFP batteries, which made up one third of all EV batteries as of September 2022. “That shows you how far LFP has come, and that’s purely down to the innovation within Chinese cell makers. And that has brought Chinese EV battery [companies] to the front line, the tier-one companies,” says Reid.
China has also had one key advantage in battery manufacturing: it controls a lot of the necessary materials. While the country doesn’t necessarily have the most natural resources for battery materials, it has the majority of the refinery capacity in the world when it comes to critical components like cobalt, nickel sulfate, lithium hydroxide, and graphite. García-Herrero sees China’s control of the chemical materials as “the ultimate control of the sector, which China has clearly pursued for years well before others even figured that this was something important.”
By now, other countries have indeed realized the importance of battery materials and are signing deals with Chile and Australia to gain control of mines for rare-earth metals. But China’s head start has given domestic companies a longstanding stable supply chain.
“Chinese-made EV batteries … not only come at a discount but also are available in much higher quantities because the manufacturing capacity has been built out in China and continues to be built out,” says Reid.
What does China’s EV market look like now?
As a result of all this, China now has an outsize domestic demand for EVs: according to a survey from the US consulting company AlixPartners, over 50% of Chinese respondents were considering battery-electric vehicles as their next car in 2021, the highest proportion in the world and two times the global average.
There are a slew of Chinese-built options for these customers—including BYD, SAIC-GM-Wuling, Geely, Nio, Xpeng, and LiAuto. While the first three are examples of gas-car companies that successfully made the switch to EVs early on, the last three are pure-EV startups that grew from nothing to household names in less than a decade.
And the rise of these companies (and other Chinese tech behemoths) coincided with the rise of a new generation of car buyers who don’t see Chinese brands as less prestigious or worse in quality than foreign brands. “Because they’ve grown up with Alibaba, because they’ve grown up with Tencent, they effectively were born into a digital environment, and they’re much more comfortable with Chinese brands versus their parents, who would still rather likely buy a German brand or a Japanese brand,” says Tu. The fact that these Chinese brands have sprinkled a little bit of nationalism into their marketing strategy also helps, Tu says.
Can other countries replicate China’s success?
Many countries are almost certainly now looking at China’s EV experience and feeling jealous. But it may not be that easy for them to achieve the same success, even if they copy China’s playbook.
While the US and some countries in Europe meet the objective requirements to supercharge their own EV industries, like technological capability and established supply chains, ICCT’s He notes that they also have different political systems. “Is this country willing to invest in this sector? Is it willing to give special protection to this industry and let it enjoy an extremely high level of policy priority for a long time?” she asks. “That’s hard to say.”
“I think the interesting question is, would a country like India or Brazil be able to replicate this?” Mazzocco asks. These countries don’t have a traditional auto industry as strong as China’s, and they also don’t have the Chinese government’s sophisticated background in handling massive industrial policies through a diverse set of policy tools, including credits, subsidies, land use agreements, tax breaks, and public procurements. But China’s experience suggests that EVs can be an opportunity for developing countries to leapfrog developed countries.
“It’s not that you can't replicate it, but China has had decades of experience in leveraging these [systems],” says Mazzocco.
Chinese brands are now looking to other markets. What challenges are they facing?
For the first time ever, Chinese EV companies feel they have a chance to expand outside of China and become global brands. Some of them are already entering the European market and even considering coming to the US, despite its saturated market and the sensitive political situation. Chinese gas cars could never have dreamed of that.
Nevertheless, their marketing language and strategies may have to change for other markets. They will need to adapt to the different technical standards and preferred software services. And they will have to learn to accommodate different consumption habits and customer service requests.
“I think we take for granted that a company like Toyota or Honda is comfortable navigating different markets, but that’s taken decades of experience to build up for these companies, and it didn’t always look pretty for them,” Mazzocco says.
In the current geopolitical environment, these companies are also making themselves vulnerable by entering more countries that aren’t exactly maintaining good relations with China. Some of them may want to protect their own homegrown auto industries, and others may even see the entrance of Chinese brands as a national security risk.
For these and other reasons, the most growth potential will likely come from “emerging Asia,” García-Herrero says. That region will continue to need more EVs for its energy transition even after China’s domestic market becomes saturated.
This is why the benefits from China’s focus on EV supply are twofold: it both reduces China’s need for car imports from Western countries and creates another long-lasting export industry. Some countries, like Indonesia, are already courting Chinese investment to build EV factories there.
In 2022, China exported 679,000 EVs, a 120% increase from the year before. There’s little reason to doubt the numbers will only grow from here.
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Sam Bankman-Fried is struggling to defend himself on the witness stand.
He claims that Alameda Research, his crypto hedge fund, was treated the same as everyone else on FTX, his now-collapsed crypto exchange.
Prosecutors have plenty of evidence that's simply not true.
As with any secret relationship, the stuff going on behind closed doors between FTX and Alameda Research was hard to explain and probably inappropriate.
As Sam Bankman-Fried testifies on the witness stand in his criminal case, he has struggled to get past a core, key contradiction at the heart of his legal defense.
According to prosecutors, Bankman-Fried violated a slew of criminal fraud and money-laundering laws by stealing money from customers on FTX, the cryptocurrency exchange he ran that was once valued at $32 billion.
Prosecutors allege he siphoned the money to Alameda Research, his cryptocurrency hedge fund, spent it on flashy advertising, and used it to make loans to himself and other executives for personal investments. The hole in customer funds became clear in November 2022, when customers tried to withdraw their funds en masse and FTX lacked the cash to fulfill them.
Bankman-Fried took the unusual — and extremely risky — step of testifying in his own defense. He told a different story, pointing out that the vast majority — around three-quarters — of FTX's users had opted into the risky spot margin trading system.
That system allowed for highly leveraged cryptocurrency trades with the possibility that — in rare occasions when other safeguards were insufficient —customers could lose the funds kept in their accounts through socialized losses.
Alameda was one such trader on the spot-margin system, and the ultra-rare combination of illiquidity, mass withdrawals, and a crypto market crash that November meant that FTX customer accounts were effectively drained, Bankman-Fried claimed.
It's up to the jury to decide which story is the real one. The trouble with Bankman-Fried's story, however, is that it is abundantly clear that Alameda was treated completely differently than every other entity trading on FTX.
Alameda, which SBF owned, had multiple roles on FTX
Bankman-Fried's defense requires convincing the jury that Alameda was the same as any other account trading on FTX, which is why its losses in November of 2022 affected every other account in the spot-margin trading system.
He also concedes, at the same time, that Alameda was much more than just that. It was at once an ordinary trader, a market maker and liquidity provider that ensured customer trades were fulfilled, and a stablecoin converter that turned government-issued fiat currency like dollars into cryptocurrency for trading.
On the witness stand, Bankman-Fried suggested his crypto hedge fund was not dissimilar to Jane Street Capital, the traditional trading firm where he worked before founding Alameda.
His desk at Jane Street, he pointed out, acted as a market maker for international exchange-traded funds in addition to doing more ordinary trading. If Alameda had multiple roles on an exchange like FTX, there was nothing wrong with that, his lawyers argued.
But it is clear, especially as cross-examination began in his downtown Manhattan trial on Monday, that Alameda was unique.
At the very beginning of cross-examination, Assistant US Attorney Danielle Sassoon reminded the jury that Bankman-Fried owned 90% of Alameda and had a substantial stake in FTX. He made money through all of Alameda's functions on the FTX exchange.
Alameda's deep-rooted relationship with FTX goes back to the exchange's beginnings. Before FTX had its own bank accounts, the customer deposits were wired straight into an account owned by Alameda, which had an easier time opening accounts with banks.
And unlike any other user on FTX, Alameda's main sub-account had a $65 billion line of credit, which effectively allowed the crypto hedge fund to borrow unlimited amounts of money.
That Alameda account had a balance, on average, of negative $2 billion throughout 2021, Bankman-Fried testified. It was OK, he said, because the company had assets in places outside FTX, and their net value was billions of dollars more.
But normal customers had no way of getting a line of credit on FTX at all. On the witness stand, Bankman-Fried could name only one other institution with a line of credit: the hedge fund Crypto Lotus, which he said could borrow $100 million from FTX, far less than Alameda's line of credit.
According to contracts Sassoon showed at the trial, companies with lines of credit needed to keep collateral for their withdrawals on the FTX exchange, so that their assets could be liquidated if a leveraged trade went badly. The only company that could take its money elsewhere was Alameda.
Perhaps most damningly, Sassoon brought up an entry from FTX's database with information about Alameda's main account on the exchange. It wasn't even involved in the spot margin trading program, meaning its losses shouldn't have impacted other accounts at all.
Bankman-Fried downplayed Alameda's importance — and how much he knew
Jurors have heard a lot of this before. Three people in Bankman-Fried's inner circle who pleaded guilty to conspiring with him have pleaded guilty and agreed to testify as part of their cooperation agreements.
FTX co-founder Gary Wang, former FTX executive Nishad Singh, and former Alameda Research CEO and Bankman-Fried's ex-girlfriend Caroline Ellison all took the stand earlier in the trial and discussed Alameda's unique role in FTX, and how it was treated differently behind the scenes.
Bankman-Fried has distributed the blame for FTX's failures among them.
He had largely stepped away from Alameda after he appointed Ellison to a CEO role in 2021, he said, and was no longer involved in its day-to-day trading. As CEO, Ellison failed to make the trades and investments he suggested to hedge in case of a crypto market downturn, Bankman-Fried testified.
As for Alameda's enormous line of credit? Bankman-Fried said he didn't know about it until shortly before FTX's collapse. He only understood that Wang and Singh had programmed some kind of "speedbumps" to ensure Alameda wasn't accidentally liquidated from over-leveraged trades and caused chaos on the rest of the exchange.
He has also more generally downplayed Alameda's non-trading roles on FTX. While FTX may have put customer deposits into Alameda's bank account at first, the exchange later got its own bank accounts. And while in FTX's early months Alameda may have handled half of the exchange's market-making volume, that dwindled to 3% once FTX grew in popularity and other market makers came on the scene, he said.
Bankman-Fried tried to stress that the market conditions in November 2022, when FTX and Alameda collapsed, were an anomaly. He said that, before then, FTX typically saw $50 million in withdrawals on a typical day. At its height, that November, there were $4 billion in withdrawals per day. It was no wonder, he said, that the exchange couldn't get liquid cash fast enough.
Sassoon previously pummeled Bankman-Fried on the witness stand on Thursday in an unusual hearing without the presence of the jury to determine whether he could bring up testimony related to what his lawyers had told him while running FTX.
While Bankman-Fried gave long, meandering answers in that hearing — much to the judge's frustration — he kept things tighter on Monday, answering many of Sassoon's questions with a chipper "Yep!" or "I don't recall that."
Bankman-Fried's supposedly failing memory introduced the opportunity for Sassoon to bring up exhibits from his testimony to Congress and interviews with journalists, where he had repeatedly extolled FTX's high standards for protecting customer assets.
Bankman-Fried said that the passages from his congressional testimony were being taken out of context and that he "disagreed" with the articles journalists wrote about FTX at the time.
"Would you agree that you know how to tell a good story?" Sassoon asked Bankman-Fried.
"I don't know," Bankman-Fried responded. "It depends on what metric you use."
Read the original article on Business Insider | Crypto Trading & Speculation |
The Bank of England "regrettably" made mistakes that have fuelled inflation in the UK, its former chief economist has told Sky News.
Andy Haldane said the Bank had printed money through its programme of quantitative easing "longer than it needed to" as it tried to help the economy recover from COVID - and also suggested it had acted too slowly to increase interest rates.
While inflation has been coming down from its peak of 11.1% last October, the rate of price rises - which was 6.8% in the year to July - remains high and continues to put a major strain on many households amid the cost of living crisis.
Mr Haldane, who stepped down from the Bank in September 2021, also said it was "an evens bet" whether the UK would fall into a recession.
He further criticised what he described as a lack of investment in infrastructure such as hospitals and schools - as highlighted by the classroom concrete crisis this week.
Mr Haldane, who now heads the Royal Society of Arts, made the comments during an interview for Politics Hub with Sophy Ridge, which will be broadcast on Sky News on Tuesday.
When asked about inflation, Mr Haldane said: "It [the Bank of England] kept on printing money for a bit longer than it needed to.
"I think with the benefit of hindsight ... we probably did a little bit too much for a little too long. I make no apologies about the greater sway of that easing - that was needed, I think, at the time of COVID to protect jobs and to protect households and to protect businesses.
"But did we persist with that a little longer than we needed to? And did they step on the brakes a little too late - and therefore a little harder now than they needed to? I think that is probably where we find ourselves, regrettably."
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It comes following criticism of the Bank over its strategy to bring inflation down to its target of 2%.
Its Monetary Policy Committee hiked interest rates for the 14th time in a row last month to 5.25%. But some commentators have warned the UK could tip into a recession if rates remain high.
Mr Haldane described the economy as "pancake-like" and "flatlining for 18 months", even with the recent upward revisions to the UK's growth figures.
He added: "The story of the last 18 months remains intact. That is to say, we have been stuck. Growth is absent. That means it would take only the tiniest of tilt for us to enter recessionary territory."
When asked if recession was still a danger, Mr Haldane replied: "It's definitely still a danger. I would hope not a sharp recession. But could that rise in the cost of borrowing take the legs from beneath an embryonic recovery? I think it could and that is definitely a risk.
"I'd say it's an evens bet as things stand."
On the wider economy, he said there had been "underinvesting in the assets of UK plc" and claimed the concrete crisis in schools had been "foreseeable".
He added: "We fare poorly when it comes to the amount we save as a country, save as a nation and the amount we invest as a nation. And that's the main reason why we're seeing these problems, these fragilities in our infrastructure show up - whether it's crumbling schools or congested motorways and railways."
The Bank of England has defended its strategy to try and bring down inflation, while chancellor Jeremy Hunt has said he is confident it will be halved by the end of the year.
Mr Haldane's successor as chief economist, Huw Pill, said last week the Bank was determined to "see the job through" - but also admitted he was wary about the risk of "unnecessary damage" being inflicted on employment and growth if interest rates increased too much.
The full interview with Mr Haldane will be broadcast on Politics Hub with Sophy Ridge at 7pm on Tuesday 5 September on Sky News. | United Kingdom Business & Economics |
A suspected Ponzi scheme that has ensnared Melbourne racing identities and a senior AFL figure was offering returns of up to 8 per cent before the sudden death of its alleged mastermind last month.
Key points:
- The ABC has obtained a letter showing in 2019 John Adams was offering investors returns about eight times those offered by banks for term deposits
- Mr Adams's business partner of almost 50 years, Shane Maguire, alerted authorities to the potential fraud earlier this week
- The Victorian Legal Services Commissioner is working with police to investigate the scheme
Some estimates have put the scale of losses in the scheme run by suburban Melbourne lawyer John Adams at $100 million – more than four times the amount high-profile Sydney con woman Melissa Caddick stole from her victims before disappearing in 2020.
The Victorian Legal Services Commissioner is now working with police to investigate claims that solicitor Mr Adams, who passed away suddenly at the age of 81 last month, misappropriated funds invested in the mortgage lending scheme he operated out of his firm's Ivanhoe office for more than 40 years.
ABC Investigations has obtained a letter Mr Adams sent to a client in 2019 promising returns of up to 8 per cent, at a time when major banks were offering about 1 per cent annually on term deposits.
"Investments are managed by the firm's professionals and embrace prudent lending policies and loan-to-value ratios," the letter says.
"The interest rate payable will be the rate negotiated at the time the mortgage rate is negotiated and rates currently range between 7.5 per cent and 8 per cent per annum."
It says investors are paid the interest in monthly instalments. One investor told the ABC their payments continued up until the week before Mr Adams's death.
The letter provides the first glimpse inside the scheme that prompted Mr Adams's business partner of almost 50 years, Shane Maguire, to alert authorities of the potential fraud earlier this week.
Mr Maguire has declined requests for an interview, but in a statement said that following Mr Adams's sudden death "we have identified a number of concerns in relation to mortgage investments he had arranged".
"We have reported these concerns to the Victorian Legal Services Board, which is undertaking its own preliminary assessment of the matter. I am continuing to conduct our practice with the assistance of our capable team."
There is no suggestion that Mr Maguire or any other employees of the firm, AMS Ivanhoe Lawyers, were involved in the potential misappropriation of funds or other misconduct.
A 'grandfatherly' figure who did not want to stop working
A former AMS Ivanhoe Lawyers staff member, who asked not to be identified, said they were shocked to learn about the allegations against Mr Adams.
"He was the last person I would even have expected to be involved in something like this," the former staff member said.
"I literally fell off my chair when I heard. He was a really grandfatherly type figure around the office.
"The one thing that surprised me about him was that he wanted to keep on working at such an old age. I used to see him sitting exhausted at his desk and think, 'don't you want to stop working and enjoy your life?'"
The Victorian Bookmakers Association (VBA) earlier this week revealed it stands to lose about $1.8 million it invested with Mr Adams.
The VBA's co-chairman Lyndon Hsu said the operation had the hallmarks of a Ponzi scheme.
"We have invested through AMS Lawyers for decades, and in 2019 we invested about $300,000 into the scheme," he said.
"The way it works is that we would be connected with individual borrowers and individual properties and provided with documents showing that we would have a mortgage over the property.
"But unbeknownst to us at some stage that mortgage has been discharged and we no longer have control over the property."
Mr Hsu said the association has been flooded with inquiries from bookmakers who also had personal savings invested in the scheme.
But Mr Adams's clients extend beyond the racing industry.
The ABC has also spoken to a senior AFL figure who said he stands to lose more than a million dollars through the scheme.
In the 2019 offer letter, Mr Adams told the potential investor their funds would be lent out to borrowers in the form of a "first mortgage of a legal interest in residential real estate".
"The firm's policy on loan to value ratio is not to exceed 60 per cent of the capital improved value," the letter says.
"This is to ensure that in the unlikely event of a default requiring the security property to be sold the realisation price would be more than sufficient to recover the full capital investment."
In other words, investors in the scheme would lend up to 60 per cent of the value of a borrower's property.
That would ensure investors could get their money back if the borrower defaulted on the loan and their property had to be sold — even if there was a big decline in the value of the property after the initial investment.
Members of Mr Adams's immediate family have not responded to the ABC's request for comment. | Banking & Finance |
Bisto gravy granules have become the latest food item to shock shoppers as research finds supermarket prices have risen as much as 51 percent since January, with a 550g tub of gravy granules now costing up to £5.50.
Figures showed around 50 Bisto products have seen sharp increases in price since the new year across leading supermarkets such as Sainsbury's, Morrisons and Asda.
A 450g tub of Bistro original granules rose by 50.9 percent on 1 January in Sainsbury's, from £2.65 to £4, according to research by The Grocer using Assosia.
Shoppers have dubbed the brand 'the new Lurpak' after the cost of the butter rose sharply last year due to the cost of living crisis.
It comes as new figures show the price of a bag of pasta has doubled in two years as food inflation continues to bite, with a standard basket of grocery essentials now costing £21.
Horrified shoppers took to social media to express their shock at Bisto prices.
A 450g pot currently costs £4.50 at Asda, while 550g tubs are up to £5.50 in Tesco and £4.99 in Morrisons.
One Twitter user shared a photo of Bisto granules priced at £5.50, writing: 'Seriously, have Bisto started putting flecks of gold in their gravy granules? This was £4 at the beginning of January.
Meanwhile a second shopper share a photo of a £4.50 tub at Asda, writing: 'One of the most ridiculous things I've seen whilst out shopping today. when will this madness end?,' The Mirror reports.
A second added: 'I just won't pay this for Bisto out of principle, to hype it to this price is absolutely taking the pee. They will lose money.'
Smaller tubs of the popular gravy brand remain priced between £2 and £3, but have also risen since the start of the year.
Other price hikes at Asda include Best Beef Gravy 230g, Best Chicken Gravy 230g and Best Pork Gravy 230g, which each increased 33.8 percent from £2.99 to £4 on 5 January.
In Morrisons Bisto Gravy Granules 190g rose 50.3 percent from £1.99 to £2.99 on 3 January, according to Assosia data.
Meanwhile the average cost of 15 food items, including oven chips and a jar of jam, has been monitored by retail research firm Assosia at supermarkets such as Asda, Tesco and Morrisons, and has increased by a third in two years.
Official figures suggest UK inflation peaked at 11.1 percent in October - but food inflation is estimated to be at around 16.7 percent.
It comes after new data released yesterday showed those relying on the cheapest groceries are the people most affected by rising prices.
The overall cost of the basket has risen by a third from £15.79 in 2021 to £21.13 in 2023, with a standard 500g bag of pasta rising from 50p to 95p, the BBC reports.
Strawberry jam has risen from 73p to £1.15 in the same period, and oven chips from £1.24 to £1.80.
Director at Assosia Kay Staniland, said the figures show the price rises that shoppers face.
'It's inflation on top of inflation at the moment,' she said.
The items are a mix of everyday essentials, from oven chips and strawberry jam to pasta sauce and potatoes.
It comes as new data revealed yesterday that shoppers relying on the cheapest supermarket ranges are bearing the brunt of grocery inflation.
Price rises on value items are far outstripping those of branded and premium products, figures for Which? show.
The price of value items was up 21.6 percent in January on a year before, well in excess of overall grocery inflation of 15.9 percent, Which? found.
In comparison, branded goods rose by 13.2 percent over the year, own-label premium ranges were up 13.4 percent and standard own-brand items increased 18.9 percent.
Which? analysed inflation on more than 25,000 food and drink products at eight major supermarkets - Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury's, Tesco and Waitrose.
Its findings suggest those who are likely to be already struggling to feed their families and pay their bills during the cost-of-living crisis are being hit disproportionately with the sharpest food price increases.
Some of the biggest price increases on supermarket value items include Sainsbury's muesli rising 87.5 percent from £1.20 to £2.25, tins of sliced carrots up 63 percent from 20p to 33p at Tesco, and pork sausages up 58.2 percent from 80p to £1.27 at Asda.
The butter and spreads category continued to show significant inflation as did milk, which went up by 26.1 percent on average across all eight supermarkets.
Overall prices were up 23.6 percent at Lidl and 22.5 percent at Aldi on a year ago, compared with 10.4 percent at Ocado, 13.2 percent at Sainsbury's, 13.6 percent at Tesco, 14.4 percent at Morrisons, 15.2 percent at Waitrose and 16.8 percent at Asda.
Which? is campaigning for all supermarkets to ensure that budget line items that enable an affordable and healthy diet are widely available, particularly in areas where people are most in need.
However Which? found the discounters were generally still cheaper than their competitors.
Sue Davies, Which? head of food policy, said: 'It's clear that food costs have soared in recent months, but our inflation tracker shows how households relying on supermarket value ranges are being hit the hardest.
'Supermarkets need to act and Which? is calling for them to ensure everyone has easy access to basic, affordable food ranges at a store near them, particularly in areas where people are most in need.
'Supermarkets must also do more to ensure transparent pricing enables people to easily work out which products offer the best value and target their promotions to support people who are really struggling.'
The British Retail Consortium and supermarkets blame the higher prices on increases in the cost of ingredients and energy, plus a need to pay suppliers, including farmers, more.
Asda said: 'We're working hard to keep prices in check for customers despite global inflationary pressures and we remain the lowest-priced major supermarket - a position recognised by Which? in their regular monthly basket comparison which has named Asda as the cheapest supermarket for a big shop every month for the last three years.'
Sainsbury's said: 'With costs going up, we are working hard to keep prices low. Last year we announced that we would invest over £550m by March 2023 into lowering prices as part of our goal to put food back at the heart of Sainsbury's.
'We're committed to doing everything we can to support customers with the rising cost of living.'
An Aldi spokesperson said: 'We are working hard to shield shoppers from industry-wide inflation, and our promise to our customers is that we will always provide the lowest grocery prices in Britain.
'That's why Which? named us as the cheapest supermarket in 2022 and why it has again confirmed that we were the lowest-priced in January 2023 as well.' | Inflation |
JCPenney said Thursday it plans to spend more than $1 billion by the end of 2025 in a bid to revive the storied but troubled 121-year-old department store chain.
The money is going toward remodeling JCPenney stores, upgrading its online shopping site and app, and making its supply network more efficient so that online orders are delivered more quickly.
JCPenney's CEO Marc Rosen, who took the company's helm in November 2021 and has served as an executive at Levi Strauss and Walmart, is renewing the chain's focus on its core middle-income shoppers with affordable fashion and housewares.
"Now is the time more than ever to lean into that and make sure that we're delivering that experience for our customer," Rosen said in an interview with The Associated Press. That's a change of tactics from previous management teams that pursued wealthier shoppers with offers of trendy items and major appliances.
As part of the plans unveiled Thursday, check-out stations that had been located throughout JCPenney's stores will be replaced with a single area of cashiers. Shoppers will also see brighter lighting and a fresh coat of paint. Store employees will be equipped with mobile devices to scan inventory and ring up shoppers' purchases. And the chain is making upgrades to its Wi-Fi networks to speed up in-store connections.
But JCPenney is playing catch-up with its competitors — from discounters to department stores like Macy's and Walmart — that have been upgrading their stores and online businesses, underscoring the challenges faced by the retailer based in Plano, Texas.
Emergence from bankruptcy
JCPenney, which emerged from Chapter 11 reorganization in December 2020 with new owners, not only has grappled with years of internal issues but also faces an uncertain economy that has challenged healthier department stores.
The chain's core customers are budget-conscious families, whose median income ranges from $50,000 to $75,000. They've been particularly hit hard by higher costs basic items and high interest rates, making borrowing on credit cards and taking out a mortgage more expensive.
Rosen said JCPenney's customers are spending $700 more per month than two years ago just for basic necessities, like rent, gas and food. He noted they're seeking competitive prices as well as a good shopping experience.
But in this tough economy, JCPenney has a role, Rosen said. He believes shoppers are finding other department stores too expensive, while online retailers and off-price stores don't give them the customer service JCPenney shoppers are looking for.
The company filed for bankruptcy reorganization in May 2020 after the pandemic-induced temporary closing of stores put the already struggling retailer deeper in peril.
Under new owners — mall companies Simon Property Group Inc. and Brookfield Property Partners LP — JCPenney shuttered nearly a quarter of its 850 stores. It now has roughly 650 stores. It has less than $500 million in debt, down from nearly $5 billion at the time of its bankruptcy filing, Rosen said.
Push to remodel 50 to 100 stores a year
As part of the latest remodeling push, Rosen said 100 stores have been refurbished. The plan is to remodel anywhere from 50 to 100 per year, he said.
The retailer has been rebuilding its beauty business after Sephora announced a deal to leave the chain for rival Kohl's three years ago. As part of its overhaul, it has been highlighting beauty products that cover a wider range of skin tones. One third of its customers are of color.
Simon Property made an unsuccessful bid to acquire Kohl's back infor $8.6 billion the New York Post reported at the time, citing sources familiar with the talks.
The retailer launched new store label brands like Mutual Weave men's clothing and reintroduced some national brands like Adidas. It launched national labels such as Forever 21, owned by Authentic Brands Group LLC, which has a minority stake in JCPenney. It also teamed up with celebrity stylist Jason Bolden to recreate collections for two of its store label brands, J. Ferrar and Worthington, a long-time brand it brought back.
Most importantly, Rosen said JCPenney has worked hard to keep the basics like jeans, white T-shirts, and sheet sets in stock with the full size range or full color assortment, a problem that has plagued the chain and frustrated shoppers.
Rosen said the changes have helped increase the number of repeat visits of existing customers to both stores and online. More than 50 million customers have visited JCPenney in the past three years, he said. After about five years of declines, it's now seeing customers coming to JCPenney more frequently — a 5% increase. As for its beauty departments,25% are new customers, he noted.
"That's showing us that if we get the basic relevant experience right, then they're going to come to us more frequently because they know the brand, they're shopping us already and they're now starting to shop across more areas of the store and come more frequently, " he said.
Rosen arrived at JCPenney when its annual revenue was around $8 billion to $9 billion and that number was unchanged last year. He expects it could decline slightly this year because of all the economic uncertainty. It had annual sales of roughly $11.2 billion when it filed for bankruptcy.
Neil Saunders, managing director of GlobalData Retail, said he was recently at a JCPenney store in Phoenix, and the stores looked messy, and there were gaps on shelves. But he did praise the beauty area.
"They may have steadied the ship, but they have not revived the brand," he said.
for more features. | Consumer & Retail |
- Summary
- PM Sunak says Britain taking 'radical' action on migration
- Government aims for 300,000 fewer migrants than last year
- Higher minimum salary for skilled workers announced
- Unions raise concern over crackdown on dependents
LONDON, Dec 4 (Reuters) - Britain announced plans to slash the number of migrants arriving by legal routes on Monday, raising the minimum salary they must earn in a skilled job by a third, amid pressure on Prime Minister Rishi Sunak to tackle record net migration figures.
High levels of legal migration have dominated Britain's political landscape for more than a decade and were a key factor in the 2016 vote to leave the European Union. Sunak has promised to gain more control after lawmakers in his Conservative Party criticised his record ahead of an election expected next year, with the opposition Labour Party far ahead in opinion polls.
But businesses and trade unions both attacked the measures as counterproductive and challenging for the private sector and state-run health service, both dogged by labour shortages.
Figures last month showed annual net migration to the United Kingdom hit a record of 745,000 in 2022 and has stayed at high levels since, with many migrants now coming from places like India, Nigeria and China instead of the EU.
Home Secretary (interior minister) James Cleverly said the new measures could reduce that number by 300,000.
"Immigration is too high. Today we’re taking radical action to bring it down," said Sunak, who is also trying to deport migrants who arrive illegally to Rwanda.
Cleverly said the government would raise the minimum salary threshold for foreign skilled workers to 38,700 pounds ($48,900), from its current level of 26,200 pounds, though health and social workers would be exempt.
Other measures included stopping foreign health workers bringing in family members on their visas, increasing a surcharge migrants have to pay to use the health service by 66%, and raising the minimum income for family visas.
TIGHT LABOUR MARKET
The measures could spark new disputes with business owners who have struggled to hire workers in recent years given Britain's persistently tight labour market and the end of free movement from the EU since Britain's 2020 exit from the bloc.
In October, the government's independent migration adviser recommended abolishing the so-called shortage occupations list, one of the main routes for businesses to hire migrant workers in sectors where there are severe staff shortages.
Cleverly said the government would end the current system that lets employers pay migrants only 80% of the going rate to do jobs where there is a worker shortage, and that the list of shortage occupations would be reviewed.
"We will stop immigration undercutting the salary of British workers," Cleverly told lawmakers. "We will create a new immigration salary list with a reduced number of occupations."
However, some studies have shown foreign workers have little or no impact on overall wage or employment levels, and Britain's acute shortage of candidates to fill vacancies remains a problem for many company bosses.
"These changes will further shrink the talent pool that the entire economy will be recruiting from, and only worsen the shortages hospitality businesses are facing," said Kate Nicholls, chief executive of trade body UKHospitality.
"We urgently need to see an immigration system that is fit-for-purpose and reflects both the needs of business and the labour market. The system at the moment does none of that."
The Bank of England said last month that businesses were finding it a bit easier to hire but persistent skills shortages remained in some sectors.
Trade unions also voiced concerns at Cleverly's plan. Christina McAnea, the general secretary of UNISON, the main union in the health sector, saying it spelled "total disaster" for the health service.
"Migrants will now head to more welcoming countries, rather than be forced to live without their families," she said.
($1 = 0.7921 pounds)
Additional reporting by William Schomberg; writing by Alistair Smout; editing by Andrew MacAskill, Sarah Young, Kate Holton and Mark Heinrich
Our Standards: The Thomson Reuters Trust Principles. | United Kingdom Business & Economics |
RBI Plans To Introduce Wholesale CBDC In Call Money Market Soon
RBI will showcase various digitial initiatives in the financial sector at the exhibition pavilion at the G20 Summit later this week.
Reserve Bank is planning to extend wholesale Central Bank Digital Currency as token for interbank borrowing or call money market, RBI sources said on Tuesday.
The pilot in wholesale segment, known as the Digital Rupee -Wholesale (e₹-W), was launched on November 1, 2022, with use case being limited to the settlement of secondary market transactions in government securities.
"RBI is now planning to go into interbank borrowing market. The purpose of wholesale CBDC has been to try out different technologies...experimenting on technology is relatively easier for wholesale pilot because participants are related," RBI sources said.
The introduction of CBDC was announced in the Union Budget 2022-23, by Finance Minister Nirmala Sitharaman and necessary amendments to the relevant section of the RBI Act, 1934 was made with the passage of the Finance Bill 2022.
The RBI began the pilot project wholesale CBDC and picked up nine banks -- State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, YES Bank, IDFC First Bank, and HSBC.
Besides, RBI has already rolled out a pilot in the retail version of the CBDC (e₹-R), on December 1, 2022. The e₹-R is in the form of a digital token that represents legal tender.
It is being issued in the same denominations as the paper currency and coins. It is being distributed through financial intermediaries, i.e., the banks. Users are able to transact with e₹- R through a digital wallet offered by the participating banks.
With regard to RuPay, sources said no instructions have been given to promote this.
However, sources said, this has to be popularised by making it attractive.
Asked when CBDC pilot ends, sources said, there is no deadline as of now and 10.83 crore transactions amounting to Rs 24,000 crore witnessed in August.
Meanwhile, RBI will showcase various digitial initiatives in the financial sector at the exhibition pavilion at the G20 Summit later this week.
These include Public Tech Platform for Frictionless Credit, CBDC, UPI One World, RuPay On-The-Go, and Bharat Bill Payment System.
At Public Tech Platform, visitors can experience an interactive demonstration of the entire process i.e., from onboarding to sanction and disbursement of the KCC and dairy loans in an entirely digital manner in a few minutes, revolutionising rural credit.
Sources said going forward this platform can be used for distribution of small ticket loans like MSME, personal loans etc.
Besides, the central bank will showcase an informational video on the RBI's digital rupee and its journey and there would be live digital rupee transactions demonstrated by select banks which are participating in the pilot.
UPI One World would enable visitors to be on boarded to UPI without having a bank account in India.
RuPay On-The-Go would allow customers to carry out contactless payment transactions through accessories they wear (watch, ring) or use (key chain) every day and highlight the adaptability of the domestic card scheme associated products at par with such global products.
Bharat Bill Payment System cross-border bill payment will highlight the adaptability of the BBPS platform to integrate with fintechs and conventional financial players to facilitate domestic as well as cross-border payment transactions. | India Business & Economics |
The government has unveiled a package of measures to reduce the number of people coming to the UK.
Home Secretary James Cleverly said the changes, which are due to take effect from next spring, would deliver the biggest ever cut in net migration.
It comes after net migration - the difference between the number of people coming to live in the UK and those leaving - reached a record 745,000 last year.
Minimum salary for UK skilled worker visa to increase
To be eligible for a skilled worker visa to come to the UK, your job offer must meet a minimum salary requirement.
At the moment this is whichever is highest out of £26,200 per year, £10.75 per hour or the "going rate" for your job.
From next spring, this will rise to £38,700 per year.
However, crucially health and care workers - who account for almost half of people on work visas - will be exempt from the increase.
People on national pay scales, such as teachers, will also be exempt.
The Migration Observatory says the main impact is likely to be on middle-skilled jobs like butchers or chefs, where pay tends to be less than £30,000.
Minimum income requirement for family visa to rise
The minimum income required for British citizens who want to bring a foreign family member or partner to live with them in the UK is rising from £18,600 to £38,700 a year.
An estimated 70,000 people came to the UK on family visas in the year ending June 2023.
As the change affects those on lower incomes, it will have a bigger impact on groups who tend to earn less, such as women, younger people and those living outside London and south-east England.
Ban on care workers bringing family dependants to the UK
Overseas care workers will no longer be able to bring their partner or children with them to the UK.
Home Office data suggests health and care workers are more likely to be joined by family members than people on other work visas.
In the year to September, more than 101,000 visas were issued to care workers, with an estimated 120,000 visas granted to associated dependants.
Care companies are worried the ban on dependants will put off potential recruits from coming to the UK, making staff shortages work.
But the government says it believes there will still be high demand from overseas workers for care roles in the UK, even if individuals cannot bring family members with them.
Salary discount for shortage occupation list scrapped
Currently jobs on a shortage occupation list can be paid at 80% of the usual going rate to qualify for a skilled worker visa.
The list covers a wide range of sectors including health, education, care work and construction and is designed to make it easier for employers to fill vacancies where there is a shortage of workers in the UK.
The government says it wants to stop immigration undercutting British workers and is planning to scrap the 20% discount.
Healthcare surcharge to rise
The annual fee visa holders must pay to use the NHS - known as the immigration health surcharge - will rise from £624 to £1,035.
There are some exemptions, for example health and care workers do not have to pay the charge, and there is a reduced rate for students and under-18s.
Students: review of graduate visa
A graduate visa allows someone to stay in the country for at least two years after successfully completing a course in the UK.
The government has launched a review of this visa route to prevent what it's called "abuse" of the system.
More than 98,000 graduate visas were granted in the year to June.
The government has already announced plans to limit the number of students who can bring family members with them to the UK.
The changes, which come into force in January, remove the right of international students to bring dependents unless they are on postgraduate research courses.
Students will also no longer be allowed to switch onto work visas before their studies are completed. | United Kingdom Business & Economics |
NEWYou can now listen to Fox News articles! After downplaying concerns about the economy in the last year, some media outlets are now panicking that high gas prices and inflation will tank Democrats in the midterm elections, with some pundits even scolding voters for making it a priority.Washington Post columnist Catherine Rampell told readers that it was a "wild fantasy" to believe the GOP could lower gas prices, as she warned voters to "think carefully about what they’ll get if they cast their ballot based on gas prices," in a Sunday opinion piece."The president does not have some super-secret special dial on his desk that can adjust gas prices, but many voters believe otherwise," she wrote. Fuel prices at a Chevron gas station in Menlo Park, California, US, on Thursday, June 9, 2022. Stratospheric Fuel prices have broken records for at least seven days with the average cost of fuel per gallon hitting $4.96 as of June 8, according to the American Automobile Association. (Photographer: David Paul Morris/Bloomberg via Getty Images)BACKLASH ENSUES AS PRESIDENT BIDEN SUGGESTS INFLATION A ‘CHANCE’ TO MAKE ‘FUNDAMENTAL TURN’ TO CLEAN ENERGY"They’re counting on voters to project their hopes and dreams — including their wildest fantasies about cheaper gas — onto Republican challengers," her analysis continued.But Rampell claimed that neither party had "serious" solutions to dealing with gas prices or inflation and there were "relatively few tools" that President Biden or Congress could use to "help boost oil production or moderate inflation." So, she advised voters to ignore the gas price problem at the voting booth.Quoting colleague E.J. Dionne, she cautioned that if Republicans win in November that could lead to "far more radical and sinister forces" trying to "undermine democracy."On MSNBC's "Morning Joe," branding guru Donny Deutsch fretted that pocketbook issues would win out with voters this year and in 2024 as more important to them than America's democracy being "in peril.""I'm concerned and everything in my gut tells me… unfortunately, the gas prices and bread is going to be more compelling," he said Thursday.Polling bears that out, with surveys consistently showing inflation is the most significant issue to Americans right now. A recent Fox News poll found 41 percent of voters say inflation will be an important factor in their midterm decisions, well above issues like guns (12 percent) and abortion (10 percent). Another poll from ABC News earlier this month found 71% of Americans disapprove of Biden on inflation.MSNBC host Joy Reid and political analyst Matthew Dowd characterized a red wave as a "threat" the media needed to warn voters against on Monday.MEDIA, DEMOCRATS DOWNPLAYED INFLATION AND GAS PRICES, GOT FORECASTS WRONG: ‘WINNING ECONOMY’"We have to tell the voters what the threat is just like we do, Joy, we tell them about inflation, and we tell them about job growth, and we tell them about a hurricane, and we tell them about tornadoes, and we tell them about wildfire, we have to treat this assault just like we have to tell them about the assault on democracy," Dowd said. People shop in a supermarket as rising inflation affects consumer prices in Los Angeles, California, U.S., June 13, 2022. (REUTERS/Lucy Nicholson)Fellow MSNBC host Tiffany Cross took the same approach on her show Saturday, complaining that inflation was more of a concern for voters than the Jan. 6 committee hearings."Come this November, will voters be more concerned with saving money than saving democracy?" the "Cross Connection" host asked.GAS PRICES FUELING COMING DEMOCRATIC BLOODBATH IN MIDTERMS, REPUBLICANS SAYCross griped that inflation and "high prices" dominated media coverage, which led Americans to be less interested in the "compelling testimonies and evidence" in the Jan. 6 committee hearings. Condition of Economy Poll (Fox News)"This constant storyline of inflation, and people are feeling it at the grocery store. So it is challenging when, come November, when it's time to cast a ballot," she began, adding that she wondered "how seriously" voters took the threat of Republicans winning in November."The View" host Joy Behar absolved Biden of any responsibility for the energy crisis and said Republicans just wanted to make Biden "look bad.""And by the way, inflation is a worldwide problem, he's getting blamed for that. The gasoline is a worldwide problem, yes its $5, $6 here, it's like $11, $12 in Europe. So you cannot blame the president for every single thing," Behar continued on the June 6 show.CNN ECONOMIC ANALYST SAYS IN ORDER TO HAVE A ‘KINDER’ ECONOMY, INFLATION NEEDS TO OCCURResponding to the media defense of Biden, PRICE Futures Group senior market analyst Phil Flynn said Biden administration policies like drilling moratoriums and killing the Keystone Pipeline are driving down investment in oil and gas, hurting supply and raising prices."I think out of every president in recent history, if you can blame a president for rising gasoline prices, President Biden owns this gasoline price hike," Flynn told Fox News Digital. "Why? Because every policy he has put into place has raised the cost of gasoline." "The View" host Joy Behar shut down the notion that a "red wave" was coming in November on her show last week. (Screenshot/ABC/TheView)Behar and her liberal peers also shot down the idea that a red wave was coming in November, largely as a result of voters blaming Democrats in power for high inflation. "You don't know that," she told co-host Alyssa Farah Griffin.Associate Professor of Business and Economics at The King’s College and Fox News contributor Brian Brenberg criticized the media’s messaging as "a desperate attempt to deal with a problem they know is going to be pinned" on Democrats."By pleading with voters to not let inflation affect their vote, the media is essentially asking people to ‘please ignore everything that affects your life on a daily basis,’" he said, citing the high costs of groceries, travel, gas and electricity impacted by inflation and energy policies.The economics expert said media pundits who won't acknowledge that President Biden's anti-oil rhetoric and promises to end fossil fuels have negatively affected energy costs are engaging in a "willful denial of reality."NPR ARGUES ECONOMY IS ‘STURDIER THAN IT LOOKS’ AMID SHRINKING REPORTFlynn said the media shouldn't be flippant about so-called "kitchen table issues.""America always votes their pocketbook," Flynn said. "At the end of the day, you know, what they disparagingly call kitchen table issues are real issues to American because it affects their daily lives. Listen, people elect leaders so their life improves, not so it can get worse… The American people are smart. They see this as a facade. They see, you know, the media trying to make excuses for this administration."Some liberal media outlets and Democrats have defended Biden energy policies and tried to sell the public in recent months that there was hope on the horizon for the economy. U.S. President Joe Biden speaks during an event at the Royal Castle, amid Russia's invasion of Ukraine, in Warsaw, Poland March 26, 2022. (Reuters)In December, CNN host Don Lemon and reporter Matt Egan hyped a government forecast that suggested gas prices would fall below $3 in 2022, touting how Americans were going to get "some relief" at the pump.Pundits moved on to minimizing voter concerns about the economy, Biden's energy policies and rampant federal spending, while parroting the White House's messaging that a "Putin price hike" was to blame for soaring inflation, in the spring.Brenberg said that polls showed voters weren't buying the media's messaging and had "made up their own minds" on who to blame for the country's economic woes."The media should be holding the administration’s feet to the fire on that with data, not with an ideological agenda but on data, on the facts. They’re not doing that," he blasted.CLICK HERE TO GET THE FOX NEWS APP"So voters therefore have made up their own minds. They have determined what cause and effect is going on here, and you’re seeing that in the polls," he said.Fox News' David Rutz contributed to this report. Kristine Parks is an associate editor for Fox News Digital. Story tips can be sent to [email protected]. | Inflation |
While unemployment is rising across the UK, one employer is still on a hiring spree: the Government.
The public sector has grown by 133,000 workers over the past year alone. Over the same period, the number of private sector staff has edged down by 3,000.
The significant rise in the size of the state points to a major headache for Chancellor Jeremy Hunt and Prime Minister Rishi Sunak as the next election looms.
A ballooning public sector means ballooning costs, making the tax cuts harder to deliver. On top of that, increasing labour unrest in the public sector is threatening Sunak’s key pledges to get the economy growing and get inflation down.
Striking doctors and radiographers were behind the largest knock to GDP in July, new data showed on Wednesday. They contributed to output shrinking by 0.5pc, denting Sunak’s pitch to voters when it comes to growth.
Meanwhile, the bill for paying the 5.7 million people employed by the taxpayer rose by a record 12.2pc in the year to July when including bonuses. It is placing ever greater pressure on fragile public finances.
Paul Mortimer-Lee, an economist who has worked for influential institutions like the Bank of England and the International Monetary Fund, says a “lack of control” has let the public sector spiral in size and cost.
“I blame it on Sunak when he was chancellor. He had unlimited resources because the Bank of England was financing the public sector by printing money. And he went mad, basically. He went crazy in terms of public spending. Where we are now is in a very fragile condition.”
Figures from the Office for National Statistics (ONS) show that despite successive governments attempting to chip away at the size of the state since 2010, headcount is up by just over 100,000 since then by one measure.
“There’s a real problem with efficiency in the public sector,” says Mortimer-Lee.
He believes some of the recent increase in staff numbers can be explained by the rise in working from home.
He says: “The public sector is still addicted to working from home and that [has] impacted productivity. So if your productivity has suffered because your staff are working from home, what do you do? The answer is you go and hire some more staff to work from home.”
While productivity across the economy is 0.8pc higher than before the pandemic, it remains 9.8pc lower for government services, according to the ONS.
These figures could be revised after the statistics body recently discovered the economy took a smaller hit than initially believed from Covid. But the gulf is still stark and Jeremy Hunt has ordered a review of public sector productivity.
Working from home is not a realistic option for public sector workers such as teachers and nurses, but it is prevalent in the Civil Service and government departments such as HMRC.
As prime minister, Boris Johnson pledged to reduce the size of departmental workforces to 2016 levels. In absolute terms, that would have meant cutting 91,000 jobs.
Sir Jacob Rees-Mogg, who led the drive to cut headcount as minister for government efficiency under Johnson, says: “We were making progress. We were getting returns from other departments, some better than others.
“It wasn’t all up and running, but it was certainly beginning to filter through.”
However, Mr Sunak scrapped the 91,000 target and ordered departments to find efficiency savings instead. There are now more than half a million people employed by the Civil Service, an increase of 69,000 compared with pre-pandemic levels.
Sir Jacob says that efforts to streamline the Civil Service were opposed fiercely by some colleagues, including Boris Johnson’s decision to suspend the Government’s graduate fast stream, which hires around 1,000 people every year.
“That was opposed at every step of the way to try and pretend the decision hadn’t been made,” he says. “And then I discovered that while I was still minister for government efficiency and everyone knew a new government was about to come in, they had prepared the brief for my successor reversing the decision. The pushback was so strong by the civil servants themselves.”
Some say the impetus to slash the Civil Service was lost under Liz Truss.
“As soon as Liz came in [as prime minister], she wasn’t that interested in it. And then when Rishi came in, he wasn’t interested at all,” says one former Cabinet minister.
However, the ballooning size of the public service is becoming harder to ignore. It is increasingly restricting Hunt and Sunak’s room for manoeuvre.
“Anything that’s unproductive hurts economic growth. If you’re not going to run the Civil Service efficiently… You’re not going to be able to afford tax cuts,” says Sir Jacob.
Fulfilling the pledge to cut 91,000 civil servants would have freed up enough cash to slash inheritance tax, he argues.
Meanwhile, further strikes threaten Rishi Sunak’s key pledge to grow the economy.
Junior doctors who are asking for a 35pc pay rise are planning further walkouts this month and next, with some days coinciding with walkouts by consultants.
NHS England said that recent junior doctor strikes led to 101,977 acute inpatient and outpatient appointments being cancelled. This all counts towards how the ONS measures economic activity.
Unions are also embroiled in heated talks with local authorities for pay deals that could trigger more disruption.
Soaring public sector pay risks stoking inflation further and driving up debt levels, the International Monetary Fund has warned.
The IMF had said “further increases in public wages and other social spending” have put Britain’s debt pile on a “steeper upward trajectory” compared with other advanced economies.
Its analysis of almost three dozen economies spanning three decades, showed that large public sector pay rises “may have a significant and lasting effect on private wages” by influencing pay demands. Higher pay typically drives inflation, threatening another of Sunak’s pledges to half the rate of price rises.
History also suggests the impact on prices and wages continues “for many quarters after the spike”, according to the IMF.
Funnelling more money and workers into the public sector will ultimately come at the expense of other parts of the economy, warns Mortimer-Lee.
“You can only have more public sector if you have less of other stuff like investments and private consumption. You cannot have your cake and eat it.”
There is no sign that the state will get smaller any time soon. Analysis by the Institute of Fiscal Studies of hiring plans set out by NHS England suggests one in eleven workers in England will be employed by the health service by 2036.
It means Britain is on a path to higher taxes as a rapidly expanding public sector extracts an ever higher levy from the private sector to fund itself.
“At the moment, the public sector is just gobbling up too much cake,” says Mortimer-Lee. | United Kingdom Business & Economics |
The claim: Protestors dumped manure at a French McDonald's for its support of Israel
"Protests have taken place in France by dumping animal dung in front of a McDonald’s branch supporting Israel," reads the post's caption.
More from the USA TODAY Fact-Check Team:
Guidelines: How we identify, research and rate claims
Our rating: False
The demonstration shown in the Instagram video isn't related to the ongoing Israel-Hamas war. A French farmers union was protesting McDonald's decision to use imported meat.
Video shows agriculture union protest
Similar pictures of a truck dumping manure at a McDonald's were shared on Facebook and X on Nov. 24 by a French farmers union based in Haute-Saône, France. The red truck and the exterior of the McDonald's are identical to those shown in the Instagram video, and the scenery matches that of a McDonald's in Vesoul, a commune in Haute-Saône, according to Google Street View.
Neither post shared by the union mentions anything about the Israel-Hamas war.
Instead, the Nov. 24 posts focus on fast food chains' use of imported meat.
"Union action of the farmers of Haute-Saône against Mac Donald's (sic) and Burger King in Vesoul," reads an English translation of part of the posts' captions. "The number of farms is constantly decreasing in France as in Haute-Saône. At the same time, French beef consumption continues to open the door to imported meat arriving in out-of-home restaurants, especially in 'fast-food.'"
Margaux Wacheux, a spokesperson for McDonald's France, told USA TODAY in an email that the video shows "a local farmers' demonstration that took place (Nov. 24) against several fast-food chains."
USA TODAY reached out to the user who shared the post for comment but did not immediately receive a response.
Reuters also debunked the claim.
Our fact-check sources:
Margaux Wacheux, Nov. 30, Email exchange with USA TODAY
FDSEA Haute-Saône, Nov. 24, Facebook post
FDSEA Haute-Saône, Nov. 24, X post
Google Maps, October 2020, McDonald's Vesoul, Bourgogne-Franche-Comté
L'Est Républicain, Nov. 25, Manure dumped in front of McDonald's and Burger King: "These brands lie to consumers"
Ouest France, Nov. 24, Des agriculteurs déversent du fumier devant les McDonald’s et Burger King de Vesoul
Thank you for supporting our journalism. You can subscribe to our print edition, ad-free app or e-newspaper here.
USA TODAY is a verified signatory of the International Fact-Checking Network, which requires a demonstrated commitment to nonpartisanship, fairness and transparency. Our fact-check work is supported in part by a grant from Meta.
This article originally appeared on USA TODAY: Video shows farmers union protest at French McDonald's | Fact check | Agriculture |
The SEC charged a company called Stoner Cats 2 LLC — which produced an animated web series “Stoner Cats” funded by sales of NFTs that were priced at $800 each — with conducting an unregistered offering of crypto asset securities.
The NFT sale of the Stoner Cats in July 2021 raised approximately $8 million to finance “Stoner Cats.” The voice cast of the “Stoner Cats” series included Ashton Kutcher, Mila Kunis, Chris Rock, Dax Shepard, Gary Vaynerchuk, Jane Fonda, Michael Bublé, Seth MacFarlane and Vitalik Buterin.
More from Variety
According to the SEC, “Without admitting or denying the SEC’s findings, SC2 agreed to a cease-and-desist order and to pay a civil penalty of $1 million.” The order establishes a fund to return money that “injured investors paid to purchase the NFTs,” according to the agency. SC2 also agreed “to destroy all NFTs in its possession or control and publish notice of the order on its website and social media channels.”
Variety has sent to a request for comment to the email contact listed for Stoner Cats but did not receive a reply as of press time.
On July 27, 2021, SC2 offered and sold more than 10,000 NFTs for approximately $800 each, selling out in 35 minutes, according to the SEC. The Stoner Cats website says six episodes of “Stoner Cats” were produced, accessible only to those holding the NFT digital collectibles. “Stoner Cats NFTs gave holders access to the content creators of the show, making it one of the first projects to use NFTs to create a community of holders who get to see behind the curtain as an animated series is made and interact directly with top-level Hollywood talent,” the project’s site says.
The SEC alleges that the marketing campaign behind the Stoner Cats NFTs “highlighted specific benefits of owning them, including the option for owners to resell their NFTs on the secondary market.” In addition, the agency’s order finds that, as part of the marketing campaign, the SC2 team “emphasized its expertise as Hollywood producers, its knowledge of crypto projects, and the well-known actors involved in the web series, leading investors to expect profits because a successful web series could cause the resale value of the Stoner Cats NFTs in the secondary market to rise.”
According to the SEC, SC2 configured the Stoner Cats NFTs to provide the company a 2.5% royalty for each secondary market transaction in the NFTs — leading purchasers to spend more than $20 million in at least 10,000 transactions. According to the SEC’s order, SC2 violated the Securities Act of 1933 by offering and selling these crypto asset securities to the public in an unregistered offering that was not exempt from registration.
“Regardless of whether your offering involves beavers, chinchillas or animal-based NFTs, under the federal securities laws, it’s the economic reality of the offering – not the labels you put on it or the underlying objects – that guides the determination of what’s an investment contract and therefore a security,” Gurbir Grewal, director of the SEC’s enforcement division, said in announcing the action against SC2.
According to Grewal, the SEC’s order found that Stoner Cats marketed its knowledge of crypto projects, touted that the price of their NFTs could increase and took other steps that led investors to believe they would profit from selling the NFTs in the secondary market. “It’s therefore hardly surprising, as the order finds, that Stoner Cats sold its entire supply of NFTs in just 35 minutes, generating proceeds of over $8 million, most of which were then resold — not held as collectibles — in the secondary market within months.”
The Stoner Cats website said the show was developed by Ash Brannon, Chris Cartagena and Sarah Cole. Based on Cole’s personal experience with her mother, “‘Stoner Cats’ is a story of a woman who uses medical marijuana to alleviate her early Alzheimer’s symptoms and her beautiful family of cats who will do literally anything to save her,” the site says.
Per the Stoner Cats site, “Once Mila Kunis and her Orchard Farm Productions partners heard this story, they knew that a hilarious and intimate story like this needed to have deep direct engagement with its audience. So they formed a formidable collective of voice talent, animators, and creatives of all kinds to come together with technology and NFT experts (including the brilliant minds behind CryptoKitties) to bring this story to life using NFTs.”
Best of Variety | Crypto Trading & Speculation |
One in 10 county councils in England are facing effective bankruptcy - putting vital services at risk, local government leaders have warned.
In September Birmingham City Council was forced to slash spending after declaring itself effectively bankrupt.
More local authorities fear they could be next, according to a survey by the County Councils Network.
They are calling for emergency funding from the government to stave off financial collapse.
The government said it had already made £5.1bn extra available to local authorities for 2022/23 - and was ready to talk to any council concerned about its financial position.
Labour-run Birmingham City Council faces a bill of up to £760m following equal pay claims and a flawed IT system that spiralled over budget, leading to questions about the council's governance.
However, local government leaders are warning other, "well-managed" county councils could follow suit.
As well as increased funding, councils are calling for longer-term budget settlements to allow them to plan their finances.
Soaring inflation has driven up costs and many councils are facing an increase in demand for the services they provide - such as adult social care, education and highways.
Children's services
County councils are forecasting they will overspend their budgets in 2023/24 by £639m this year - an average of £16m per council.
Growing demand for children's services - including care placements for vulnerable children and foster care - accounts for almost half of the projected overspend.
The County Councils Network, which represents some of England's largest local authorities, surveyed its members and found one in 10 are not sure they can balance their budgets in this financial year.
The BBC has contacted dozens of councils - at both district and county level and led by all parties - that have previously been reported to be facing financial pressures or have high debt loads.
All were confident of balancing their budgets and avoiding a Section 114 notice, which means the council is effectively bankrupt and cannot commit to any new spending other than for essential services required by law.
Some councils told the BBC their finances are in good shape - but others said they are facing intense pressure on their budgets and making difficult decisions on spending.
The Royal Borough of Windsor and Maidenhead said it was introducing "emergency controls of non-essential spending", while Hampshire County Council said its budget was "stretched to breaking point".
'Act now'
Stoke-on-Trent City Council said that without an overhaul in funding it would "not be able to sustain services", while Coventry City Council said it was facing a "devastating" financial crisis and that "local government stands on the precipice of financial disaster".
Barry Lewis, vice-chairman of the County Councils Network, said: "Last year the chancellor stepped in with much-needed additional resources for adult social care.
"We now need the same priority to be given to vulnerable children, providing emergency funding this year and next."
He said Birmingham's recent financial difficulties - which led to it issuing a Section 114 notice - were "undoubtedly made worse by the council's performance and governance".
But he added: "Unless we act now, this analysis shows that other well-managed councils are running out of road to prevent insolvency."
The organisation said its members, which cover almost 27 million people in England, had already identified more than £2bn of "challenging" spending cuts over the next three years.
But a legal obligation to provide certain services such as care for adults and children for which demand and costs are "spiralling" meant there was little "wriggle room" to bring down costs further.
The survey of its 41 members found one in 10 were not sure they could balance the books this financial year, with that number rising to six in 10 in two years' time.
'Tough questions'
Councils have been raising concern about financial pressures for some time, but across the sector there are increasing warnings that the system is becoming unsustainable.
Earlier this month, the Local Government Association wrote to Chancellor Jeremy Hunt, outlining a £4bn funding gap over the next two years.
The District Councils Network, which represents hundreds of smaller authorities, said "cherished local services", including those which support vulnerable people, would disappear in a "growing financial crisis".
Jonathan Carr-West, chief executive of the Local Government Information Unit think tank, said: "Council finances are in a really precarious position. We've seen this over more than a decade.
"There have been some well-publicised failures in places like Birmingham, Thurrock, Slough and Woking, but our research shows even if councils haven't got to the point where they're issuing Section 114 notices saying they can't balance the books, even the councils that aren't there yet are very anxious that they're on that pathway.
"We need to ask tough questions about governance and decision-making, but we've also seen the overall precarity of council finances has meant that where mistakes are made there's no resilience to cope with them and I think we're seeing more and more well-run councils telling us they're moving much closer to the edge."
A spokesperson for the Department for Levelling Up, Housing and Communities said: "We continue to monitor pressures on all councils and we stand ready to talk to any council that is concerned about its financial position.
"Councils are ultimately responsible for the management of their own finances, but the government has been clear that they should not take excessive risk with taxpayers' money. We have established the Office for Local Government to improve the accountability for performance across the sector." | United Kingdom Business & Economics |
In a world where the stock market is unpredictable and interest rates are rising, many investors are looking for someplace to put their money that is as close to risk-free as possible — even if it means forgoing the chance for a bigger reward. One increasingly popular pick are I Bonds, savings bonds issued by the U.S. government. These bonds are virtually risk free and have a robust fixed interest rate. There is generally a $10,000 limit per year for purchasing I Bonds, but there are a few ways to get around this limit.
For more help working I bonds into your financial strategy, consider working with a financial advisor.
I Bonds Basics
I Bonds are issued by the federal government and carry a zero-coupon interest rate — plus, they are adjusted each year for inflation. The variable return will sit at 9.62% through October 2022.
Unlike other U.S. securities, these bonds are sold at face value — meaning if you purchase a $100 bond, the price will be $100. The bond duration runs from one year to 30 years.
Interest is paid on a monthly basis and compounds every six months. The following deadlines apply to I Bonds:
Within one year of purchase: You cannot cash the bond.
Within one year and five years of purchase: You can cash the bond but forfeit the previous three months’ interest payments. This is known as “early redemption.”
After five years of purchase: You can cash the bond with no penalty.
After 30 years of purchase: The bond ceases to pay interest.
You don’t have to cash the bond after 30 years, but it will start to lose value against inflation.
How to Get Around the $10,000 I Bond Limit
These bonds are popular, but there is a limit of $10,000 per year that an individual can purchase. That said, there are some loopholes you can exploit if you want to put even more money into these bonds to nab that healthy 9.62% yield:
Tax Refunds
If you are expecting to get a tax refund, you are able to purchase an additional $5,000 in I Bonds. There is one catch, though — they have to be paper I Bonds, not the more popular digital I Bonds. While this adds a bit of a rigamarole, you can eventually convert these paper bonds to digital.
Family Ties
The limit is per person — so if you’re married, each spouse is allowed to purchase $10,000 in I bonds (plus the paper bonds if they have a tax return).
You can also purchase up to $10,000 in I Bonds for your children, but they must be used for the child, to save for college, perhaps.
Businesses and Trusts
Entities like businesses and trusts can also purchase up to $10,000 in I Bonds. This means that if you own a business and you have a living trust, you can purchase up to $30,000 in I Bonds each year.
The Bottom Line
I Bonds are a virtually risk-free investment, which makes them very popular in times of market uncertainty such as right now and as inflation devalues your cash. That said, there is a $10,000 limit each year for purchasing them. There are a number of ways around this limit, though, including using your tax refund, having your spouse purchase bonds as well and using a separate legal entity like a trust.
Investing Tips
For help using I Bonds as part of your strategy, consider working with a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Building a dividend stock portfolio is another way to use investments to create income.
Photo credit: ©iStock.com/jetcityimage, ©iStock.com/FreshSplash, ©iStock.com/Jitalia17
The post How to Buy More than $10,000 in I Bonds Through This Loophole appeared first on SmartAsset Blog. | Bonds Trading & Speculation |
- The criminal trial of FTX founder Sam Bankman-Fried continued on Monday, with the crypto firm's former engineering director Nishad Singh taking the stand.
- Singh said he frequently complained to Bankman-Fried that the company's spending "wreaked of excessiveness."
- Singh said he owned around 6% or 7% of FTX, making him a paper billionaire before the company collapsed.
Nishad Singh, FTX's former director of engineering, told jurors on Monday that Sam Bankman-Fried, the founder of the failed crypto exchange, spent huge sums of money on everything from real estate and venture investments to campaign donations and celebrity endorsements.
Singh took the stand in Manhattan Federal Court, as the third week of Bankman-Fried's criminal trial kicked off, with prosecutors continuing to call the defendant's closest one-time confidants to the stand. Ex-girlfriend Caroline Ellison, who ran sister hedge fund Alameda Research, testified last week. She was preceded by Bankman-Fried's former close friend and college roommate Gary Wang, who was an FTX co-founder.
In response to questions from Assistant U.S. Attorney Nicolas Roos, Singh said he frequently went to Bankman-Fried to voice his concerns over the company's spending. He told the court that he would tell Bankman-Fried he was "embarrassed" and "ashamed," and that the level of spending "wreaked of excessiveness" and "flashiness."
How Bankman-Fried, 31, spent FTX money is a critical piece of the prosecution's case because the bulk of the alleged fraud revolves around what happened to billions of dollars of customer funds that were supposed to be invested in crypto and held in client accounts but later disappeared. Bankman-Fried faces seven criminal counts related to the collapse of FTX and Alameda, including wire fraud, securities fraud and money laundering that could put him in prison for life. He's pleaded not guilty.
Like Ellison, Singh is cooperating with the prosecution as part of a plea deal he agreed to in February. At the time, Singh pleaded guilty to six charges, including conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate campaign finance laws.
Singh, who grew up in the Bay Area, testified that he met the defendant during his sophomore or junior year of high school, through Bankman-Fried's younger brother, Gabe. Singh studied electrical engineering and computer science at the University of California at Berkeley and briefly worked at Facebook before joining Alameda in 2017.
Regarding the technology at FTX and Alameda, Singh said, "Sam didn't code himself but he was very involved in the coding process" and the minutiae of the architecture. "Sam designed all the rules for margin system and the liquidation engine," which were "core to FTX," he said.
Singh said he lived with Bankman-Fried in late 2021 at FTX's lavish property in the Bahamas. He said he had "always been intimidated by Sam," calling him a "formidable character." But he said his admiration and respect "eroded over time."
In mid-2022, Singh said he first learned of the hole in the balance sheet and the massive amounts of money Bankman-Fried had spent on real estate, startup investments speculative bets and political donations.
The court showed a spreadsheet of investments made in 2021. They included $1 billion to Genesis for a mining company, $499 million to startup Anthropic and $200 million to investment firm K5.
Singh said the K5 outlay was most troubling. He said Bankman-Fried sent him a term sheet detailing hundreds of millions of dollars of bonuses to the owners, Michael Kives and Bryan Baum. That followed a K5 dinner Bankman-Fried attended alongside Hillary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio, and Kris and Kylie Jenner.
Singh said he told Bankman-Fried he was very concerned and that the K5 investment was "value extractive." He also said he asked Bankman-Fried if the investment was his with his money, not FTX's. The spreadsheet showed it came from Alameda.
Before the court took a break, the jury was given a separate spreadsheet of celebrity sponsorship deals. They included $205 million for FTX arena in Miami, $150 million to Major League Baseball, $28.5 million to Stephen Curry, $50 million to Tom Brady and Giselle Bundchen and $10 million to Larry David. The deals on the spreadsheet amounted to a total of $1.13 billion.
Singh admitted that even after learning customer money was involved in FTX spending, he still implicitly and explicitly gave the green light for transactions.
Singh said he owned 6% or 7% of FTX, making him a paper billionaire when the company was valued by private investors at $32 billion in early 2022.
When he brought his concerns about profligate spending to Bankman-Fried, Singh said he often got no response. If Bankman-Fried did reply, he would say that Singh didn't haven sufficient context, according to the testimony.
Singh gave an example of a more public interaction at work, when he said the company was "fleeced for $20 million." Singh said Bankman-Fried lashed out at him and said people like him were responsible for sewing seeds of doubt and were the real problem.
Prior to the resumption of the trial at 9:30 a.m. on Monday, Bankman-Fried's lawyers placed a late-night appeal on Sunday to U.S. District Judge Lewis Kaplan, requesting that their client be given more Adderall before being taken to the courthouse. Bankman-Fried told a Bahamas judge in December that he took medication to treat depression and attention deficit hyperactivity disorder (ADHD), which is among the most common neurodevelopmental disorders in children.
The trial is expected to last well into November.
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The sudden resignation of Changpeng "CZ" Zhao has shocked the crypto world. But who is the new boss of Binance, Richard Teng?
A native of Singapore, Mr Teng joined the world's largest crypto exchange just over two years ago as the CEO of his home country.
That was the year when Binance came under a Justice Department investigation, and as regulatory scrutiny of the company and Mr Zhao intensified, Mr Teng was rapidly climbed the ranks in the background.
He only stayed in his original position as the Singapore CEO for 5 months, according to his LinkedIn page, before he was promoted to Regional Head of Europe, Asia and the Middle East and North Africa in April 2023.
Mr Teng later moved on to become Head of Regional Markets this May before he was appointed to the top job on Tuesday - just slightly more than two years after he was first employed by Binance.
In announcing his successor, Mr Zhao called Mr Teng a "highly qualified leader", adding that "with over three decades of financial services and regulatory experience, he will navigate the company through its next period of growth".
Prior to joining Binance, Mr Teng worked in the more traditional financial and regulatory sectors as a director of corporate finance at the Monetary Authority of Singapore (MAS) and a chief regulatory officer of the Singapore Exchange (SGX).
He then moved on to the become CEO of the Abu Dhabi Global Market (ADGM), an international financial centre in the United Arab Emirates, where he stayed for six years. The ADGM regulates the trading of digital assets.
In a statement on Wednesday, Mr Teng said he was honoured to step into the role, adding that he would focus on reassuring Binance's 150m users about "the financial strength, security and safety of the company".
But his new role will come with its air share of challenges. Retaining customer confidence will be an item on Mr Teng's agenda, with Binance having suffered reputational damage in recent months.
In March, US regulators sought to ban the company, alleging it had been operating in the country illegally. It was also accused of breaking numerous US financial laws, including rules intended to thwart money laundering.
The Justice Department later ordered Binance to pay $4.3bn (£3.4bn) in penalties and forfeitures.
Despite this, Mr Teng has reiterated that Binance was "here to stay", adding that company's foundation stands "stronger than ever". | Crypto Trading & Speculation |
Caroline Ellison’s testimony at Sam Bankman-Fried’s trial spread into a second day, digging deep into the state of crypto trading firm Alameda Research’s faulty balance sheets.
“We were in a bad situation,” Ellison said, referring to the time period between May and June 2022. “[We were] concerned if anyone found out it would all come crashing down.”
At the time, Terra/LUNA collapsed, causing a number of crypto market players to struggle and cryptocurrencies to lose value. The stablecoin’s implosion came months before FTX itself collapsed, an event that was triggered when a balance sheet was leaked by CoinDesk that cast doubt on its solvency. Ellison testified that the balance sheet was one shared with lenders, not the accurate one the company used internally. This means that the balance sheet CoinDesk reported on was also “dishonest” and still “understated true risk” of Alameda and FTX.
Ellison testified that Alameda had to repay crypto lenders like Genesis, who were asking for loans to be repaid. She said FTX customer deposits were used to repay lenders, and when lenders requested balance sheets in mid-June 2022, FTX modified them because “Alameda was in a very bad situation” and didn’t want “[Genesis] to know that.”
But instead of sending truthful balance sheets, showing how much money Alameda “borrowed” from FTX, they modified it to “make [its] leverage and risk look lower.” This was done at the direction of Bankman-Fried, Ellison said.
She added that this was done for several reasons, one of which was that Alameda didn’t want Genesis to recall all of Alameda’s loans or for the news to spread because it would add concern about the firm.
“I didn’t want to be dishonest but also didn’t want to tell the truth,” Ellison said on the stand.
So she prepared seven balance sheets for Bankman-Fried to review with “alternative ways” of presenting their financial situation to “conceal things” that they “both thought were bad.” These balance sheets were made “to look better to lenders,” Bankman-Fried said at the time, according to Ellison.
At the time in June 2022, Alameda borrowed $9.9 billion from FTX customers, which “made it clear Alameda was in a risky situation,” Ellison said, and would make FTX “look very bad.” It also had open term loans worth $1.8 billion that would have to be paid back at any time a lender reached out to ask for the money back, as well as $2.9 billion in fixed term loans that were “long-term liabilities,” Ellison said.
The company at the time had around $12 billion in liabilities and $3 liquid billion in assets, per Ellison. | Crypto Trading & Speculation |
Stock Market Live: GIFT Nifty Signals Cautious Open; Bajaj Finance, TCS, Dabur, Paytm, Brightcom In Focus
Live updates on India's equity markets on Nov. 16.
KEY HIGHLIGHTS
- Oldest First
Asian Markets Trade Lower
Bajaj Finance Witnesses Substantial Drop in Trading Volume
Bajaj Finance, a non-banking financial company, has experienced a significant decline in trading volume on Nov. 15.
The trading volume on Nov. 15 stood at 7,41,972 units, while the average volume over the past seven days is at 19,23,440 units.
Source: Cogencis
Global Cues
U.S. Dollar Index at 104.4
U.S. 10-year bond yield at 4.50%
Brent crude down 0.85% at $80.49 per barrel
Nymex crude down 0.91% at $75.96 per barrel
GIFT Nifty was down 12 or 0.06% at 19,752.5 as of 8:05 a.m.
Bitcoin was down 0.45% at $37,479.25
Trading Tweaks
Price band revised from 10% to 5%: EMS
Price band revised from 20% to 10%: Bliss GVS Pharma
Ex/record date Interim dividend: Bayer Cropscience, Cigniti Technologies, Container Corp. of India, MSTC, Power Grid, Saksoft, and Sundram Fasteners.
Move into a short-term ASM framework: Centrum Capital.
Insider Trades
Sasken Technologies: Promoter Arti Mody bought 8,952 shares on Nov. 12.
Som Distilleries & Breweries: Promoter Jagdish Kumar Arora bought 11 thousand shares on Nov.13.
Usha Martin: Promoter Nidhi Rajgarhia sold 3000 shares from Nov. 12. to Nov. 13. | India Business & Economics |
The collapse of the FTX empire didn’t just set in motion a crypto market downturn. The unraveling of FTX’s misuse of customer funds also exposed the risks of using crypto wallets controlled by centralized trading platforms, prompting users to seek self-custodial wallets.
As their name implies, self-custodial wallets allow users to have full control over their digital assets. While FTX’s demise and the subsequent troubles of its affiliated companies have dampened the crypto market, there’s no lack of wallet solutions still trying to vie users.
One such player is Account Labs, which today is announcing its fresh $7.7 million Series Pre-A funding round. The investment is led by investors from both the web3 and established internet tech arenas, namely, Amber Group, MixMarvel DAO Ventures, and Qiming Ventures.
The crypto wallet space has started to see signs of consolidation as centralized exchanges and established wallet solutions look to meet new user demand, particularly the combination of asset control and friendly interface, which weren’t possible until recent technical upgrades in the blockchain community.
Legacy wallet players are paying attention to teams well versed in so-called “account abstraction”, which allows developers to write smart contracts into self-hosted wallets and subsequently enable features that we take for granted in the web2 world, like Google login and account recovery via email.
Account Labs was born out of this new wave of wallet consolidation. Its funding round arrived off the back of a merger between hardware wallet provider Keystone Account Labs, which has amassed some 40,000 users, and account abstraction wallet builder UniPass in May this year, which led to the inception of Account Labs.
The new funding will go towards launching the startup’s new self-custodial wallet for consumers called UniPass (the namesake startup before the merger focused on B2B solutions).
Cross-border payments
As the U.S. government hits crypto giants like FTX, Coinbase and Binance with a flurry of actions, blockchain startups are still trying to prove their real-world use case elsewhere in the world. We’ve previously covered how Nairobi-based Kotani is working to let Africa’s overseas workers send money home cheaply and fast by using crypto. UniPass has a similar vision for Southeast Asia.
Running on Polygon, a blockchain network known for speed and low fees, UniPass aims to first target Filipino freelance workers, with other markets to come.
“Payments are still one of the untapped segments of Web3. It’s bizarre that the industry which started on the promise of global payments still doesn’t have successful payment apps. UniPass’ wallet looks to be a great attempt at the payments use case,” Sandeep Nailwal, cofounder of Polygon Network, said in a statement.
There are plenty of remittance options in the Philippines, but they are riddled with red tape, slow, and expensive like PayPal, Lixin Liu, CEO at Account Labs, told TechCrunch in an interview.
In contrast, Filipino users who already hold stablecoins — which Liu reckoned should be common in the digitally savvy freelancer tribe — can instantly transfer funds to UniPass. The wallet partners with a third-party vendor that has been licensed by the Philippine government to convert crypto into fiat, which can then be deposited into the popular domestic e-wallet GCash. The total transaction and forex fees amount to about 1%, compared to the 8-10% attached to PayPal, said Liu.
UniPass doesn’t take commissions from transactions at the moment; rather, it’s focusing on “user growth,” said the CEO. In the future, it might monetize by asking users to watch ads to redeem free transfers.
“We want to challenge web2 payments. We want to challenge PayPal, Wise and Stripe,” said Liu. | Crypto Trading & Speculation |
- Resale platforms at fast-fashion retailers like H&M, Shein and Zara are projected to have a minimal impact on reducing emissions, a new study has found.
- The companies can have a greater impact on the environment if they focus on using more sustainable materials or recycling.
- Premium apparel companies like Ralph Lauren can meaningfully reduce their emissions with resale, the study found.
Fast-fashion retailers like Zara, Shein and H&M are using resale platforms to reduce their carbon footprints, but the programs are projected to do little to reduce emissions, a new study released Tuesday found.
The brands could more effectively reduce their toll on the environment if they redirected those efforts to their supply chain, such as by using more sustainable materials or investing in recycling innovations, according to the analysis.
The study was conducted by Trove, which helps brands like Lululemon and Canada Goose implement resale programs, and Worldly, a data analytics firm that focuses on ESG, or environmental, social and corporate governance. The study's methodology was validated with third parties and reviewed by Deloitte, McKinsey and University of California, Berkeley, among others, Trove's founder and one of the study's authors Andy Ruben told CNBC.
The study analyzed five brand archetypes, spanning fast fashion to premium apparel, and how reselling previously owned items could affect their overall carbon emissions between 2023 and 2040.
It found that fast-fashion retailers, which create about 11.5 kilograms (25.3 pounds) of carbon dioxide for every item they make, will only reduce their emissions by 0.7% with resale programs.
In comparison, premium apparel brands like Tory Burch and Ralph Lauren create about 16 kilograms of CO2 for every item they make, and could reduce those emissions by 14.8% with resale programs, the analysis said. Outdoor brands, like Patagonia and the North Face, create about 12.5 kilograms of CO2 per item and could reduce emissions by 15.8%, according to the study.
The projections factor in lower production of new items, which would help to cut emissions. Companies could offset decreased sales of new products with revenue gained from reselling a previously owned item.
The findings come as a slew of companies – from apparel retailers like Gap to home goods companies like The Container Store – implement resale programs to capture customers who care about sustainability, or might just be looking for a deal. The initiatives allow companies to make money off of items they've already sold and show investors and consumers they're focused on sustainability, especially as they prepare for new ESG reporting requirements from the U.S. Securities and Exchange Commission.
Ruben said it takes a lot of work for fast-fashion retailers to implement resale programs, but "you're not getting a lot of juice for the squeeze."
"It really comes down to how many people want your items after you've sold them the first time," Ruben said in an interview with CNBC. "So if you sold an original T-shirt for $8, and you resell it for 20 cents, you're not offsetting much revenue and you're doing a lot of activity that adds to the carbon footprint to move it back around."
Fast-fashion retailers have faced broad criticism for the negative impacts they can have on the environment. Some of the largest players in the space – H&M, Zara and Shein – have started resale programs in a bid to be more sustainable.
Earlier this year, H&M announced it was partnering with ThredUp to debut a resale program that allows customers to shop for pre-owned items. Zara and Shein both announced peer-to-peer resale platforms last fall.
The programs, which some criticized as insufficient, help the environment in the sense that it's more sustainable to buy a used item than it is to buy a new product. However, the programs can be difficult for fast-fashion retailers to scale profitably, which could limit investments in the efforts. Further, the study indicates resale platforms aren't enough to meaningfully increase sustainability at fast-fashion companies.
"It's misplaced effort," said Ruben. "What they're basically doing is moving around items that hold none of their value, which is a marketing program."
Both Zara and H&M are working to achieve net-zero emissions by 2040 and have disclosed some of the progress they've made in reducing their water consumption and using more sustainable materials, among other initiatives.
In a statement, an H&M spokesperson said the company agrees with Trove's report, which is why it's "working with different levers" to reduce its impact on global carbon emissions.
"We are working towards decarbonizing our supply chain and logistics operations by strengthening the availability and usage of renewable energy and funding the innovation and distribution of technology needed," the spokesperson said.
The spokesperson said the company is increasing its use of recycled and more sustainably sourced materials, and aims to increase its use of recycled fibers to 30% by 2025.
Zara didn't return a request for comment from CNBC.
Shein, for its part, often touts its inventory-light model as a crucial factor that reduces waste on the back end. The company has invested in strategies that reduce water use throughout its production process and launched its "evoluSHEIN" product line, which features garments made with recycled polyester, forest-safe viscose and other materials that are more eco-friendly.
"We continue to scale SHEIN's on-demand business model, which allows us to achieve average unsold inventory rates in the low single digits, dramatically reducing waste, and invest in building circular systems and accelerating sustainable solutions through sustainably focused materials, technologies and production processes," a Shein spokesperson told CNBC.
"As a fashion leader, we acknowledge our role in creating a more sustainable and responsible fashion industry, and SHEIN Exchange is just one step we are taking as part of our larger commitment to prioritizing waste reduction and circularity," the spokesperson said.
To reduce their impact on the environment, fast-fashion retailers are better off redirecting their resale investments into recycling innovations and sustainable materials, among other practices that can reduce emissions, said Gayle Tait, Trove's CEO.
"What the research is underpinning is that brands have to demonstrate meaningful investment into shifting their model," said Tait. "When they're kind of skirting around the edges, by doing either a branded peer-to-peer site or working closely with a marketplace, they're not actually shifting their model. They're continuing to do the things that got their carbon emissions." | Consumer & Retail |
Beginning early July, mirrored spheres have been popping up in cities across the world—from New York and São Paulo to Paris and Dubai. No, it’s not a global Jeff Koons takeover, nor is it a new interpretation of Cloud Gate. Actually, it is not public art at all but rather an effort by an A.I. company to establish digital identities for the world’s citizens by scanning their eyeballs.
The company behind the project is Worldcoin, founded some three years ago by Alex Blania and Sam Altman, CEO of OpenAI, with the intent to create “a new identity and financial network connecting billions of people in the age of A.I.”
The plan encompasses a privacy-ensuring digital identity it calls World ID and a digital currency, WLD—the former a global identity protocol enabling individuals to prove their personhood online in an era of rampant A.I. deepfakes, and the latter a tool to build toward an “A.I.-funded UBI [universal basic income].”
“Worldcoin is an attempt at global scale alignment,” the founders wrote in a statement. “The journey will be challenging and the outcome is uncertain. But finding new ways to broadly share the coming technological prosperity is a critical challenge of our time.”
According to Worldcoin, its beta phase has seen two million people, including more than 150,000 individuals in Spain, sign up for World ID by allowing the company to collect their biometric data.
To “5x” those numbers, Worldcoin has rolled out about 1,500 of its reflective spheres, dubbed Orbs, to pop-ups in more than 35 cities in 20 countries.
Developed by Tools for Humanity, the Orb is a 6.2 pound biometric imaging device custom-built to verify humanness in a secure way. Passersby need only gaze into its mirrored surface, whereupon the device will scan their irises and generate a unique hash or numeric code attached to their particular set of eyes. In exchange, each participant will receive a World ID and a WLD token.
While Worldcoin has emphasized its privacy protocols throughout the process—biometrics data is deleted after the scan, leaving only the numeric code, which is securely encrypted—its iris-scanning project has raised concerns about how the company might be collecting and sharing its data. (Worldcoin’s early investors, which allegedly include Sam Bankman-Fried of FTX and Three Arrows Capital, have also raised eyebrows.)
Vitalik Buterin, founder of Ethereum, penned a lengthy blog post on July 24 that, while stressing the importance of proof of personhood and leaps in security, highlighted vulnerabilities in Worldcoin’s project, not limited to the risk of hacks, ID-selling, and the 3D-printing of fake people.
“As a community,” he wrote, “we can and should push all participants’ comfort zones on open-sourcing their tech, demand third-party audits, and even third-party-written software, and other checks and balances.”
Earlier still, whistleblower Edward Snowden, upon the project’s announcement in October 2021, decried the company’s use of biometrics and its privacy implications.
“This looks like it produces a global (hash) database of people’s iris scans (for “fairness”), and waves away the implications by saying ‘we deleted the scans!’ he tweeted. “Yeah, but you save the *hashes* produced by the scans. Hashes that match *future* scans.”
He added: “Don’t catalogue eyeballs.”
In emailed comments, Worldcoin told Artnet News: “Privacy is the bedrock on which Worldcoin is built and spans the protocol’s entire ecosystem including users, developer partners, and Worldcoin Operators. Each aspect of Worldcoin is designed with privacy as a focal point.”
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Just two kinds of people will stay in Whitehall if the government doesn’t get serious about pay, those “who aren’t any good” and those who have access to “the bank of mum and dad”. It’s time to break the taboo and properly train up ministers. The civil service should have an assembly on its own reform.
These were some of the standout remarks on the state of the civil service and how it should be reformed at a panel discussion this week including former cabinet secretary and civil service head Gus O’Donnell.
The discussion, led by ex-Levelling Up Taskforce chief Andy Haldane, and also featuring Reform director Charlotte Pickles and ex-fast streamer Amy Gandon, came alongside the launch of a report from Gandon on civil service unrest which found a civil service “deeply frustrated” with Whitehall’s flaws and eager for change.
Here are some of the key insights from the event, including the three panellists vision for the civil service in 2050.
Just two kinds of people will stay: Why Whitehall is becoming ‘incredibly non-diverse’
Gandon’s report – Civil Unrest – published on Monday, highlighted how a squeeze on pay, among other issues, is making the civil service a less attractive place to work.
O’Donnell’s warning over pay was even starker. “Rubbish” pay and the cost of living in London will leave Whitehall bereft of talent, with only flawed employees who struggle to leave and those propped up by parents sticking around, he cautioned.
“If you think about it, you're going through the ranks… junior levels, and you're in London, right? You're a policy person because most of them are, apart from the wonderful Darlington. You're trying to get on the property [ladder] and your income is rubbish. So you've got no chance. So if you're good, and you want property, you'll get out,” he said.
“The two people who remain will be the ones who aren't any good because they can't get out so you're stuck with them… and the other group are the ones like my darling daughter, who is a civil servant, and her husband who's a former civil servant, but my daughter gets on the property ladder because of the bank of mom and dad.
“Now, what does that do to the civil service of the future? It makes it incredibly non-diverse. It distorts it radically.”
O’Donnell’s remarks expanded on previous comments he made in an Institute for Government that a lot of civil servants are “voting with their feet” and getting out and “the only ones you’ve got left are the ones with the bank of mum and dad”.
Let’s get serious and trade pensions for pay
To change this situation, O’Donnell said the government has to start “getting serious about pay” and sacrifice the quality of the civil service pension for better pay.
“We could do a bit of a pay-pension trade off,” he said. “Because if you talk to your 28-year-olds, how many of them said to you, I'm staying here because of the wonderful pension. We are myopic. We don't see that pension for what it is so we can cut that back.”
O’Donnell said he had suggested this many times to chancellors who had always refused because “the way the accounts work, this won’t help the Treasury at all”. He said an increase in pay would sharpen the deficit, while reduction of future tax liabilities on pensions “goes nowhere, doesn't reduce your debt”.
Give head of the civil service more authority over pay
O'Donnell also bemoaned the head of the civil service’s lack of authority over pay, calling it a “ridiculous” situation. Pay guidance for delegated grades is set by ministers, on the advice of the Treasury and Cabinet Office officials, with departments setting pay within this framework. For senior civil servants, a review body gathers evidence and advises government, which makes the final decision.
“You’re head of the civil service, but you're not in charge of pay. In what sense are you the head of the civil service? I mean, it's just ridiculous, right? So we have a bonkers system at the moment,” O’Donnell said.
Covid Inquiry: The big mistake?
The former cab sec also warned that the UK is getting its probe into Covid wrong by focusing inwards.
“One of the things about Covid – and I really, really hope we find a way not to make this mistake, because we're making it at the moment – is we are enquiring into how we managed Covid, which is the wrong question.
"The world manage Covid in different ways, with different outcomes. We need therefore to study the world. Curiously enough, whenever I've done experiments, a sample size of one doesn't really work.""
‘We need a civil servants assembly on its own reform’
Gandon interviewed 50 civil servants, mostly policy professionals, for her Civil Unrest report, gathering their views on the state of the civil service in the last few years and seeking their ideas for reform.
The report recommended seven reforms, but Gandon said the key take away from Civil Unrest should be the need to get the civil service more involved in its own reform.
“Let's try something radical,” she said. “Let's have a civil servants' assembly on its own reform and let's give government transformation the very best chance of success.
“Let's try something radical. Let's have a civil servants' assembly on its own reform and let's give government transformation the very best chance of success"
“Not only would the involvement of civil servants, especially mid-ranking ones, like most of my participants, make for better design reforms, but it would also give them a following wind over the natural human response to fight or in many cases seek flight from the hostility of some reformers in recent years."
The civil service in 2050
When the panellists were asked to described what they expect or would like the civil service to be like in 2050, O’Donnell said ministers will have gone to university to study how to be ministers, will have degrees in being ministers and will have to come through local government first. And he said the civil service will be "full of creative people", because “virtually all of the other stuff, the AI will be doing”. Therefore, officials will all be thinking about how digital systems fail, he said.
Pickles, a former political appointee at the Department for Work and Pensions, said she would like Whitehall to be “a lot smaller” and a “a lot more dynamic and agile”, with automation and AI deployed in a way that means that people are really using human skills like relationship building and problem solving. The government would have the brightest and best ministers and civil servants, with the latter “really well paid and so it's the most attractive place to go and work”.
Gandon said her hope is the civil service will be much more responsive and able to engage in a much more human way with the people that it serves. But she said her fear is that all the issues there are now will still be around in 27 years, pointing to the Fulton Report of 1968, an inquiry into the service’s structure, recruitment, training and management.
"That's longer than the time we have to get to 2050 and all the things that were said in the Fulton report still stands today," she said. Gandon said this is why the government needs to try "participative engagement with the civil service to make reform happen". | United Kingdom Business & Economics |
Donald Trump Jr. delivered a "worse" testimony during the civil fraud trial than his brother Eric Trump and did little to fight the case aimed against his father, according to a legal expert.
The eldest son of the former president answered questions under oath on Wednesday and Thursday, followed by his younger brother Eric, as part of New York Attorney General Letitia James' lawsuit accusing Donald Trump, his two sons, and Trump Organization executives of filing fraudulent financial statements that inflated the value of several properties and assets for years. The Trumps deny all wrongdoing in connection to the civil trial.
During his testimony on Wednesday, Trump Jr. said he had no direct involvement in working on the financial statements cited in James' lawsuit as part of his role as executive vice president at The Trump Organization, and doing so was the job of accountants who worked at the real estate company. Trump Jr. also told the New York court he did sign off on paperwork, but was not involved in deciding the valuations in the financial statements which a judge has already ruled fraudulent.
Neama Rahmani, a former federal prosecutor and president of West Coast Trial Lawyers, said that Trump Jr. and Eric Trump "stuck to the script" by minimizing their roles at the company and blamed the family's accountants for the inflated valuations.
"Though that may have helped deflect blame from them and their father, their testimony didn't actually justify the overvaluations, so neither of them were effective witnesses for the defense," Rahmani told Newsweek.
"Donald Jr. signed off on the accuracy of the financials and he was the trustee of the family trust, so in many ways, Donald Jr.'s testimony was worse."
The Trump Organization has been contacted for comment via email.
Trump Jr. testified that he did sign off on financial statements which are cited in James' lawsuit, but the valuations were decided by those with "more intimate understanding of the specifics of those things," than he did.
Rahmani added that Trump Jr. was "surprisingly less combative" during his testimony than expected, and even joked with the courtroom sketch artist and engaged in lighthearted remarks with Judge Arthur Engoron, who is overseeing the civil trial.
In comparison, Rahmani said Eric Trump "lost his temper" during his Thursday testimony after being confronted with emails that contradicted his claim that he was not involved with the alleged fraudulent financial statements.
"We're a major organization, a massive real estate organization—yes, I'm fairly sure I understand that we have financial statements. Absolutely," Eric Trump, who is executive vice president at the family company alongside his brother, told the court. "I had no involvement and never worked on my father's statement of financial condition."
Reacting to Eric Trump's testimony, Rahmani added: "Eric was impeached with emails discussing the company's financial statements, but he seemed to be further removed than Donald Jr. and more focused on 'pouring concrete' than the company's financials."
The former president has long maintained that the civil trial is a politically motivated "witch hunt" that aims to hinder his chances of winning the 2024 election.
Trump has also called for the case to be thrown out following the testimony of his former lawyer Michael Cohen, who contradicted his previous testimony during cross-examination to state that the former president never directly instructed him to inflate the numbers of financial statements. Cohen added that Trump spoke like "a mob boss" and that the former president "tells you what he wants without specifically telling you."
Trump is scheduled to testify in the civil fraud trial on Monday, November 6, followed by his eldest daughter Ivanka Trump on November 8.
Engoron has already ruled that Trump had committed fraud by misrepresenting the value of his properties for years. The civil trial is now considering six remaining allegations in James' lawsuit, as well as the size of the penalty.
The former president faces being banned from doing business in New York state, having his properties removed from his control, or being forced to pay a fine totaling hundreds of millions of dollars.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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About the writer
Ewan Palmer is a Newsweek News Reporter based in London, U.K. His focus is reporting on US politics, domestic policy and the courts. He joined Newsweek in February 2018 after spending several years working at the International Business Times U.K., where he predominantly reported on crime, politics and current affairs. Prior to this, he worked as a freelance copywriter after graduating from the University of Sunderland in 2010. Languages: English.
You can get in touch with Ewan by emailing [email protected].
Ewan Palmer is a Newsweek News Reporter based in London, U.K. His focus is reporting on US politics, domestic policy... Read more
To read how Newsweek uses AI as a newsroom tool, Click here. | Real Estate & Housing |
The Treasury is analysing whether the removal of the “tampon tax” – trumpeted last week by Rishi Sunak as one of the benefits of Brexit – has helped lower prices at all, amid concerns the saving is not being passed on by retailers to women.
Responding to a written question from Labour MP Ruth Cadbury, the government said a tax reduction was able to “contribute to the conditions for price reductions” and it was “looking into whether this important zero-rating is being passed on by retailers to women as intended”.
Sunak scrapped the 5% VAT rate on tampons when he was chancellor, with the change kicking in on 1 January 2021. Last year The Guardian reported stores were thought to have banked £10m a year from the tax change.
A new snapshot for the last 12 months shows prices have risen again, in many cases by much more than the current 10% rate of inflation.
A pack of 20 supermarket own-label tampons is now £1.16, up from 91p a year ago. This works out as a 27% increase, based on the average price across Tesco, Sainsbury’s, Asda and Morrisons, according to the data firm Assosia. Meanwhile, at £2.38 for a pack of 18, a box of Tampax Compak Super Plus tampons costs 35p, 17% more than in May 2022.
When it comes to sanitary towels, a pack of eight to 10 Bodyform Ultra Goodnight pads costs 21p – or 16% – more at £1.51, while a 14-pack of Always Sensitive is up by 3p at 98p. Some products are cheaper. The price of a 14-pack of supermarket own-label ultra regular pads is down by 3p to 63p.
Laura Coryton, who started the Stop Taxing Periods campaign that helped bring about the policy change, said the 300,000 people who signed her petition to end tampon tax “wanted to make period products more accessible”. “They didn’t want to make supermarkets richer.”
Coryton has started a new petition calling on retailers to pass on any savings from the tampon tax to women.
On his way to the G7 summit Sunak cited cheaper sanitary products and beer – a new alcohol duty regime will come into being this summer – as among the “very tangible benefits of Brexit”.
However in the past year the cost of nearly everything, including beer and tampons, has gone up. Cadbury suggested his comments showed “how out of touch he is about the cost of living crisis”, adding the rising cost of period products is “having a huge impact”.
Researchers at the not-for-profit advisory firm Tax Policy Associates, which produced research last year showing how retailers benefited, compared tampon price changes with those of 13 similar products, including tissues and nappies, for several years before the tax was removed and up until March 2022, when inflation started to accelerate.
Founder Dan Neidle said its analysis showed that, at most, tampon prices were cut by about 1%, with the majority of the benefit, worth about £10m a year, retained by retailers.
Neidle suggested that if you want to make a vital product more affordable to people on lower incomes it is “much better to distribute it free to those in need than cut VAT”. “Otherwise we’re just using taxpayer funds to boost retailers’ profits.”
A government spokesperson said: “Having left the EU, we have kept our promise to scrap the tampon tax to make sanitary products more affordable. We urge retailers to pass the savings on to shoppers.” | Inflation |
Bitcoin Ordinal Inscriptions have significantly impacted the Web3 space since the Ordinals protocol was introduced in January 2023. Millions upon millions of Inscriptions have been minted, inspiring established projects to expand from Ethereum and Solana to Bitcoin.
Ordinals also seem to have inspired Ethscriptions — a recently launched (and quickly adopted) protocol that enables the creation and sharing of digital entities on the Ethereum blockchain (as long as they’re under 96 kilobytes).
Created by Tom Lehman, co-founder of Genius.com, the innovation has sparked considerable interest since its June 17 launch, with over 130,000 Ethscriptions generated to date. To add to the excitement, Lehman also introduced Ethereum Punks, a collection consisting of 10,000 Punks that were all claimed within hours.
So what exactly are Ethscriptions? We dive into the new protocol, how it works, and why Lehman believes it’s needed.
How do Ethscriptions work?
Ethscriptions work by harnessing Ethereum “calldata” — the data passed along in a token that allows us to send messages to other entities or interact with smart contracts — to inscribe non-financial data directly onto the Ethereum main chain. According to Lehman, this allows for a more affordable and decentralized alternative to contract storage.
It's cheaper and more decentralized than using contract storage.— Middlemarch (@dumbnamenumbers) June 17, 2023
Also protocol guarantees global uniqueness of the content of all valid Ethscriptions!
Plus it's skating to where the puck is going in an L2 world.
Ethscriptions operate on the Ethereum platform in the following manner:
- An Ethscription is created whenever an Ethereum transaction is successful, and its input data (interpreted as UTF-8) forms a valid data URI. This URI must be unique, meaning duplicate content is disregarded. Ethscriptions support all valid mimetypes.
- The URI’s uniqueness is guaranteed by ensuring that no prior block or transaction within the same block has identical content as the Ethscription.
- The input data of any Ethereum transaction can also serve as a valid Ethscription transfer, as long as the data is the transaction hash of a valid Ethscription and the sender of the transaction is the rightful owner of the Ethscription.
- When an Ethscription is created, the recipient becomes the initial owner, while the sender is designated as the Ethscription’s creator.
Right now, Ethscriptions can only be images, but Lehman says this will change in the future.
The future of Ethscriptions
Lehman believes that Ethscriptions are essential to the Web3 space. He detailed his reasoning in a June 20 tweet, where he essentially explained that they provide an affordable solution to those seeking decentralized solutions and unlocking Ethereum’s full potential.
The short version pic.twitter.com/5BPlVXDGRA— Middlemarch (@dumbnamenumbers) June 20, 2023
Since Lehman announced the protocol in a June 16 Twitter space, most of the Web3 community has reacted with excitement and interest, with many questioning whether Ethscriptions will see the same success as Ordinals. However, some have criticized the new protocol, with others pointing out that it’s really nothing novel.
Regardless of the initial reception of the launch, which Lehman sees as a “huge success,” he plans to keep innovating on Ethscriptions. “I also have lots of plans for extending the protocol that I can’t wait to share, but the foundation must come first,” Lehman shared on Twitter.
Ethscriptions represent a promising frontier in the crypto landscape. As a unique protocol that navigates the balance between decentralization and functionality, Ethscriptions open a new avenue for accessible, affordable, and secure data transactions on Ethereum. Despite being in its early stages, the relevance and potential of Ethscriptions are only just beginning. | Crypto Trading & Speculation |
Ed Miliband has said that energy firms are bringing in “unearned, unexpected profits” due to Russia’s invasion of Ukraine driving up gas prices.
Labour’s shadow secretary of state for climate change and net zero told BBC Breakfast this morning that the long-term answer is to move away from fossil fuels quickly by increasing on-shore and off-shore wind and solar energy systems.
He added: “My regret is not just that we don’t have a proper windfall tax, we don’t have a government committed to that green sprint either.”
It comes after energy group Centrica posted a surge in earnings this morning as the owner of British Gas continues to profit from rising energy prices.
Centrica made a statutory operating profit of £6.5 billion it was announced for the first six months of this year, an increase from a £1.1 billion loss in 2022.
The figures were boosted by a 900 per cent surge in profits at British Gas, which made £969m from January to June up from £98m a year ago.
The profit boom comes largely because of a change to the regulator Ofgem’s energy price cap which sees the supplier to recoup some of the costs of supplying its 10 million customers during the energy crisis.
Centrica chief executive Chris O’Shea, who faced anger over his £4.5m pay packet earlier this year, said: “Nothing is more important than delivering for our customers — it’s why we are here. Today’s results allow us to increase our customer support package to more than £100m, and the new green investment strategy we’ve announced will see us invest several billion pounds in the energy transition, creating thousands of new well-paid jobs.
“Our robust balance sheet has allowed us to invest heavily in the UK and Ireland’s energy security and will make sure that our customers have cleaner energy at the right price”.
Conversely, energy giant Shell has reported a drop in profits, down from its results a year ago, due to the drop in energy prices this year.
Adjusted earnings at Shell roughly halved in the second quarter of 2023 from the preceding year, but that still left the company with profits of £3.86 billion.
In response, the TUC has blasted the UK government for allowing energy companies to “laugh all the way to the bank”.
TUC General Secretary Paul Nowak said: “While families across Britain have struggled to pay their bills, energy companies have been allowed to laugh all the way to the bank.
“The government could have imposed a proper windfall tax on excess profits. But instead it has chosen to leave billions on the table.
“This was a political choice that has benefited shareholders instead of hard-pressed households. Big oil and gas have gotten away with treating the public like a cash machine.
“Our failing energy retail companies should be brought into public ownership. That’s the way to bring down bills and invest in home improvements.”
Liberal Democrat leader Sir Ed Davey has also responded: “It beggars belief that after all these months this Conservative Government is still allowing energy firms to rake in extraordinary profits while millions of families struggle.” | Energy & Natural Resources |
HSBC Cuts At Least Four Bank Jobs In Hong Kong As Deals Dry Up
The bank cut staff within its commercial banking origination unit for Greater China.
(Bloomberg) -- HSBC Holdings Plc has seen at least four Hong Kong-based bankers leave amid a dearth of deals in the region, according to people familiar with the matter.
The bank cut staff within its commercial banking origination unit for Greater China, the people said, asking not to be identified discussing internal information.
A bank spokesperson declined to comment.
HSBC and firms including Goldman Sachs Group Inc. and Citigroup Inc. have been cutting staff in the region as deals slow amid macro-economic concerns and tumultuous markets. In a bad year for deals globally, the value of mergers and acquisitions in mainland China and Hong Kong is on course to be the lowest for any year since 2013, and little more than half the annual average since then.
Read more: HK Bankers Have More Free Time and Tension: Bloomberg Deals
HSBC’s commercial bank origination team is focused on driving investment-banking opportunities among the lender’s mid-cap clients. Despite the slowdown, the bank has been investing further in China, and in October agreed to buy Citigroup’s retail wealth management portfolio. It also raised its stake in its Chinese securities venture last year.
Separately, Eric Bai, HSBC’s global co-head of the financial institutions group has quit recently, according to the people. He plans to start his own artificial intelligence venture, one of the people said.
Alexander Paul, the other co-head, will become sole leader of the group, people familiar said, asking not to be identified discussing internal information. A spokesperson for the London-based bank declined to comment.
Bai was based in Hong Kong and previously worked at Goldman Sachs Group Inc, according to LinkedIn. He took on the role of global co-head of investment banking coverage serving financial institutions in 2020, when the lender reshuffled the ranks of its investment bank.
©2023 Bloomberg L.P. | Asia Business & Economics |
Doctors and nurses will volunteer for weekend work to bring down waiting lists if they are paid more overtime, Sir Keir Starmer has told the BBC.
The Labour leader wants to spend £1.1bn a year on higher overtime payments in NHS England to get waiting lists down.
The cash would come from scrapping non-dom tax status.
The plan relies on doctors and nurses volunteering for extra shifts - but Sir Keir said it would be in their interests to do so.
He acknowledged that NHS staff are already under strain and that many of them can earn more by working in the private sector at weekends.
Labour's overtime payments would not match the wages doctors and nurses can earn in the private sector, but Sir Keir said the party had spoken to staff organisations and he was confident they would get behind his plan.
"They are up for this because they know that bringing down waiting lists will relieve pressure on them in the long run," he told the BBC's Victoria Derbyshire.
He said it would not require a new pay deal with NHS staff.
"You don't need to change the contract because we will be paying them proper rates out of hours," he said.
Sir Keir said his plan - which he claims would create two million hospital appointments a year - was crucial to his "mission" to get the UK's economy growing.
Labour is committed to making the UK the fastest growing economy in the G7 group of leading industrial nations.
"I am confident we will get that growth. It is the single defining mission of an incoming Labour government," Sir Keir said.
Asked how quickly people would see results, he said "within months", claiming policies such as planning reforms and moves to attract investment could happen "very quickly" after Labour takes office.
The UK economy has grown strongly since the end of 2019 and is no longer the worst performer in the G7, doing better than Germany, although still lagging behind the United States, Canada, Japan, Italy and France.
Labour has set out a string of policies it says will be paid for by scrapping non-dom tax status, which the party claims will raise just under £2bn a year.
These include spending £171m on doubling the number of CT scanners in NHS hospitals, £111m on improving dentistry and £365m on free breakfast clubs in primary schools.
Under Labour's NHS waiting list plan, neighbouring hospitals would also be encouraged to pool staff and use shared waiting lists. Patients would be given the option of travelling to a nearby hospital for treatment on an evening or weekend, rather than wait longer.
In June, Prime Minister Rishi Sunak announced plans to recruit and train thousands more doctors, nurses and support staff in a major NHS England workforce plan. | United Kingdom Business & Economics |
JD Wetherspoon has credited a surge in sales and reduction in costs for its first annual profit since the COVID pandemic.
The value pub and hotel chain, which trades from 826 sites across the UK and Ireland, reported profit before tax for the year to the end of July of £42.6m.
That compared to a loss of just over £30m during the previous 12 months.
Like-for-like sales rose by 12.7% and total sales by 10.6% to £1.92bn. Food sales were a major factor behind the revenue rise while bar sales were up 9%.
Wetherspoons said that momentum had continued since the end of the financial year with sales, on a comparable basis, up by just shy of 10% over the nine weeks to 1 October.
Its value offering has proved attractive as budgets continue to be squeezed by the effects of the cost of living crisis.
The pub, and wider hospitality sector, has had a particularly tough time since March 2020 when COVID restrictions forced sites into temporary hibernation for weeks at a time on several occasions.
Surging ingredient and energy costs, enforced wage increases and staff shortages have been among the challenges facing the industry since - with the effects of higher prices forcing pubs in England and Wales out of business.
A total of 13,000 were lost during 2020 and 2021, with a further 450 going last year according to British Beer and Pub Association (BBPA) data.
Recent figures from commercial real estate specialists Altus Group showed closures in England and Wales were running at a rate of two per day.
Read more on Sky News:
Metro Bank kicks off £3bn mortgage book sale
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The BBPA has called for an extension of business rates relief, beyond the current financial year, to prevent further permanent closures.
The Wetherspoons model has provided it with protection but it told investors there would be no final dividend payment.
Charlie Huggins, portfolio manager at Wealth Club, said of the performance: "Wetherspoons seems to be moving in the right direction, following a very difficult few years.
"The rise in energy and food costs over the last 18 months has posed major headaches for Wetherspoons and put pressure on margins. However, inflation now appears to be moderating which should bode well for profits in 2024.
"Despite these rising costs, Wetherspoons has been committed to maintaining low prices. This is helping to keep customers loyal, as shown by the robust like-for-like sales growth.
"These value credentials are critical, and should mean the group is better placed than many of its peers to weather any downturn in consumer spending." | United Kingdom Business & Economics |
US borrowing costs have climbed above 5pc for the first time since 2007 amid growing fears that the country’s central bank will have to keep interest rates higher for longer to tame inflation.
Yields on 10-year Treasuries crossed the psychologically important threshold on Monday morning, hitting 5.018pc.
Meanwhile, yields on 30-year British government bonds rose to their highest in more than 25 years. The yield on the benchmark 30-year gilt rose as high as 5.209pc, the highest since the summer of 1998.
Borrowing costs have climbed sharply over the past two weeks amid growing signs that inflation is proving to be more persistent than expected, prompting investors to demand higher returns, particularly on longer-dated government debt.
While investors believe the Fed will leave interest rates on hold at 5.25pc to 5.5pc at its September meeting, policymakers still expect to hike rates one more time this year.
Last week, Jerome Powell, the Fed’s chairman, also suggested that central bankers would hold rates at their November meeting, but left the door open to further rate rises.
He said policymakers were “proceeding carefully” as he suggested that recent turmoil in the bond market could limit the need for further rate rises.
Speaking in New York, Mr Powell said it was too early to judge the full impact of the war between Israel and Hamas as countries only begin to count the economic and human cost.
Mr Powell described the recent surge in long-term US borrowing costs as “significant” and signalled that higher long-term interest rates could effectively substitute for further Fed rate rises if they are sustained.
Read the latest updates below.
12:02 PM BST
How to tell if your boss is a corporate psychopath
Do you ever feel like your boss is always taking credit for your work while belittling you and focusing on themselves? If so, your manager might be a corporate psychopath.
Clive Boddy, professor of management at Anglia Ruskin University, will on Monday present his research on “ruthlessly self-serving” psychopathic bosses and what they mean for the economy at the Chelmsford Science Festival.
Prof Boddy has pioneered the study of the corporate psychopath in academia, arguing that the unique combination of character traits they possess contributed to the 2008 financial crisis among other disasters.
Melissa Lawford has the full story.
11:24 AM BST
German economy probably shrank last quarter, Bundesbank says
Germany’s economy probably contracted “somewhat” in the third quarter, the Bundesbank said in its monthly report.
The German central bank said the economy was weighed down by weak foreign demand and higher borrowing costs.
However, the Bundesbank said a robust labour market and strong wage increases were providing suppoer, while households haven’t yet used the additional ability to spend to increase consumption.
German inflation is expected to slow further in the coming months, though the core rate that excludes energy and food may remain above 4pc in the near future due to price pressures in the services sector.
11:03 AM BST
Oil giant Chevron to buy rival Hess for $53bn
US oil behemoth Chevron has agreed to buy rival Hess for $53bn (£44bn) in the country’s latest major oil takeover.
Chevron will pay $171 per share for Hess in an all-stock transaction, marking a premium of about 10pc. Hess shareholders will receive 1.025 shares of Chevron for each Hess share, giving the company a total value of $60bn.
It is the second major deal in the US oil industry in only a few weeks after Exxon Mobil agreed to buy share oil producer Pioneer Natural Resources for $58bn.
The deals reflect a belief that oil and gas will remain central to the world’s energy mix for decades to come, despite the shift to renewable energy sources.
Mike Wirth, chief executive of Chevron, said: “This combination positions Chevron to strengthen our long-term performance and further enhance our advantaged portfolio by adding world-class assets.”
10:50 AM BST
Volkswagen cuts forecasts as costs rise
Shares in Volkswagen are in decline this morning after the car maker slashed its forecasts on higher costs and hedging losses.
Europe’s biggest car manufacturer now expects operating return on sales for the year to be as low as 7pc, down from at least 7.5pc.
Shares fell 3.3pc in early trading - the biggest one-day decline in more than a month.
VW missed expectations on higher product costs for its volumes brands. Flooding that impacted a supplier in Slovenia also hit vehicle output.
The company reported preliminary third-quarter results late on Friday. Full results are scheduled for Thursday.
10:34 AM BST
The jobs downturn is here – who will get hurt and how bad will it be?
John Lynes was one of the first to notice when companies slowed hiring. His recruitment firm, Ashdown Group, was seeing 100 applicants per job at the start of the year. Now he sees 150 on average – a 50pc rise.
“It’s a much harder market this year for businesses and for employees,” he says. “There are slightly more people available and fewer jobs. Employers are not hiring for growth and they are not giving the salary increases that they were.”
Britain’s jobs market remains historically active: there are still 162,000 more open roles available than there were before Covid.
But for Lynes, who receives 20,000 to 30,000 applications a month for jobs in areas such as IT, human resources and accounting, it doesn’t feel that way.
Eir Nolsoe and Szu Ping Chan report on the crisis in the jobs market. Read their full story here.
10:21 AM BST
Gas prices slump amid mild weather
It’s not just oil in decline today – gas prices have also fallen sharply.
European natural gas prices dropped more than six per cent this morning as traders weighed up mild weather forecasts and rising fuel supplies.
This added to relief across markets after Israel held off on its ground offensive into Gaza.
Temperatures across Europe are expected to be milder than usual until early November, while markets are also following a recent wave of new long-term liquefied natural gas supply deals.
Still, traders will have a close eye on any potential escalation in the Middle East conflict and gas prices remain almost 30pc higher than they were before the Hamas attacks on Israel on October 7.
09:49 AM BST
Mortgage rates rise as lender price war subsides
Mortgage rates have climbed in a sign that the lender price war has hit its limits.
The average rate on a two-year fixed-rate mortgage rose from 6.33pc to 6.35pc on Monday, according to data provider Moneyfacts.
Average five-year fixed rates rose from 5.89pc to 5.9pc. Two- and five-year buy-to-let fixed rates were unchanged at 6.25pc and 6.18pc respectively.
Rates had been falling steadily since their August peak, when the average cost of a two-year fix hit 6.85pc.
Lenders were battling to boost falling demand from homebuyers, but now the market appears to have bottomed out.
The recent price cuts were triggered by a drop in swap rates, which reflect future interest rate expectations and flow into mortgage pricing, at the end of the summer.
However, a senior source at a high street lender said recent cuts from major lenders were “lower than you’d expect” from the decline in swap rates, suggesting there is now little headroom for further declines.
09:26 AM BST
Roche to pay $7.1bn for experimental medicine developer
Roche Holding AG will buy Telavant Holdings Inc for $7.1bn (£5.8bn) to boost its pipeline of experimental medicines.
The deal means the Swiss pharmaceutical company will gain rights to develop and market RVT-3101, a drug to treat inflammatory bowel disease, in the US and Japan, according to Bloomberg.
It will be Roche’s largest acquisition for nearly a decade, since it bought InterMune Inc in 2014.
Telavant’s antibody therapy has shown it can be used safely in clinical trials so far. Roche said that because it treats both inflammation and fibrosis, it has potential to be used to treat many other diseases.
Roche plans to launch a third-phase trial as soon as possible.
Roivant Sciences Ltd, which owns Telavant, alongside Pfizer Inc, estimates the market for inflammatory bowel disease treatments is worth $15bn (£12.3bn) in the US.
08:28 AM BST
Qatar signs agreement to supply Italy with LNG for 27 years
Qatar has signed a deal to supply Italy with up to one million tons of liquified natural gas (LNG) for 27 years.
Affiliates of the state-owned QatarEnergy and Italian energy company Eni have signed a long-term LNG sale and purchase agreement which will start in 2026.
This means that Qatar will supply Italy with fossil fuels for three years beyond Italy’s 2050 net zero deadline.
The deal follows two other long-term deals announced in the last two weeks for Qatar to supply LNG to France and the Netherlands past 2050.
Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs, said: “Together, we will continue to demonstrate commitment to the European markets in general, and to the Italian market in particular.”
Qatar has been supplying more than a tenth of Italy’s natural gas since 2009, he added.
The LNG for the new deal will be sourced from the joint venture between QatarEnergy and Eni in Qatar’s North Field East (NFE expansion project), in which Eni has a 3.125pc share. Deliveries will be made to the port of Piombino in Tuscany.
08:15 AM BST
Chinese stock index slumps to 4.5-year-low
China’s blue-chip stock index has slumped to its lowest level in four and a half years as its property crisis spirals and investors bet on lower chances of economic stimulus.
The CSI300 Index fell by 0.6pc to hit its lowest level since February 2019 on Monday morning in China. This followed a drop of 4.2pc last week.
The Shanghai Composite Index fell by 0.8pc on Monday, hitting the lowest level since 2022.
Stronger than expected economic data last week means markets now have lower expectations of support measures from the government.
Last week, property giant Country Garden missed a coupon payment on an offshore bond, sparking fears of a fresh escalation in China’s years-long property downturn, which began with the collapse of developer Evergrande at the end of 2021.
New US export restrictions on AI chips to China, announced last week, alongside the deepening conflict in the Middle East, have also spooked investors.
07:54 AM BST
More people working in the office than hybrid
More people are travelling to the office five days a week than those who work partly from home for the first time since lockdown restrictions eased.
The share of people working full-time from the office hit 43pc in September, up from 36pc the same time last year, according to a survey of 15,000 professional staff by recruitment company Hays.
By contrast, the share who have a hybrid working pattern slumped from 43pc to 39pc over the same period. Less than a fifth work from home full-time.
Bosses have plans to get more employees back into offices. Nearly one in four plan to increase the number of staff coming into work over the coming year.
But there is a conflict between employers, who want workers back, and employees, who want to maintain flexibility. Separate research shows staff typically come to work for far fewer days than their bosses ask them to.
London has the lowest share of workers back in the office full-time of any region in the country, but the capital also has one of the lowest rates of full-time home working.
07:28 AM BST
Good morning
Oil prices have dropped as Israel delays its ground invasion of Gaza amid hostage negotiations.
5 things to start your day
What happened overnight
Asian markets extended last week’s sell-off Monday on fears of a regional conflict in the Middle East and worries that US interest rates will remain elevated for longer than initially thought.
Still, oil dipped as Israel’s expected ground offensive against Hamas in Gaza was delayed as diplomats tried to secure the release of more hostages, with some suggesting it could change Tel Aviv’s strategy.
Uncertainty caused by the crisis - sparked by Hamas’s deadly October 7 attack - has seen risk assets tumble with the Vix fear gauge hitting its highest level since March.
Equity traders extended their US counterparts’ selling, with Tokyo, Sydney, Seoul, Shanghai, Singapore, Taipei, Manila and Jakarta deep in the red. Hong Kong was closed for a holiday.
The uncertainty was also keeping the dollar higher against its peers, and briefly broke 150 yen on bets the Federal Reserve will hold interest rates at their two-decade highs for some time as officials battle inflation. | Interest Rates |
Biden’s unworkable nursing rule will harm seniors
What could be wrong with wanting to have a registered nurse (RN) in every nursing home in the United States at all times? Nothing — it’s just not possible.
As most facilities are already staffed by a combination of certified nursing assistants (CNAs), licensed practical nurses (LPNs) and RNs, mandating such a requirement would devastate both nursing homes and the seniors for whom they care. But, this is exactly what the Biden administration is attempting to do.
A new rule proposed by the Centers for Medicare and Medicaid Services (CMS) seeks to radically increase federally mandated staffing levels in nursing homes in two ways. First, the rule, if finalized, would require every nursing home in the nation to have an RN on-site at all times, which is much more than the current requirement of eight hours daily, five days weekly. It would separately impose new minimum staffing ratios, requiring a certain number of RNs and CNAs per resident per day.
This is a well-intentioned goal and I, as much as anyone, want seniors to have the best care possible. But, good intentions are not enough. Policy needs to be informed by reality and what is possible. And unfortunately, the current reality is pretty bleak for America’s nursing homes.
At the moment, there are nearly 15,000 nursing homes throughout the country. Of these, 29 percent are in rural areas that are more difficult to staff. In my home state of Kansas, this number is even higher — 53.7 percent of nursing homes are in rural areas. Not even half of the nation’s nursing homes are currently staffed at the level required by the proposed rule, as facilities across the nation are contending with a workforce shortage.
The nursing home workforce has declined by 12 percent since the start of the COVID-19 pandemic, part of an overall contraction of the aging services workforce. Some of this can be explained by the burnout employees felt due to the intensity of the pandemic, but that is not the whole picture.
Since President Biden took office in 2021, inflation is up more than 17 percent. That puts an incredible strain on anyone running a business and the seniors and their families trying to afford care. Labor costs for nursing homes are now 22 percent higher than they were at the start of 2020.
Somehow, under these strained conditions, CMS expects nursing homes to find an additional 3,267 RNs to satisfy the 24/7 RN part of the rule. This would cost nursing homes $349 million per year and would increase annual costs for residents by almost $2,180. In the Sunflower State, that would rise to an additional $2,600 in resident costs each year. To meet the rule’s minimum staffing ratio requirement, an additional 12,639 RNs and 76,376 CNAs would be needed nationwide, costing nursing homes $4.2 billion per year at an average cost of $13.24 per resident per day. So, implementing the two parts of this rule would require upwards of 15,000 new RNs, plus more than 76,000 CNAs.
These numbers put nursing homes in a catch-22. Implementing the rule will cost money that most nursing homes don’t have. But even if money were not a problem, it wouldn’t solve the workforce issues. Remarkably, the CMS rule does nothing to address either of these concerns and help facilities find a way forward.
CMS has actually made it more difficult for long-term care facilities to comply by narrowly defining the type of staff that qualifies toward the requirement. Inexplicably, the CMS rule excludes licensed practical nurses (LPNs) from counting toward the minimum. By leaving out a fully credentialed and licensed type of nurse that has long been present in nursing homes, CMS further shrinks the already limited workforce facilities have to lean on.
Instead of their heavy-handed approach, the president and his administration should take a step back. They should let Congress, representing America’s senior citizens, drive the conversation. There are innovative solutions coming from within the People’s House that address the workforce, Medicare and other issues associated with giving seniors the best possible care.
In fact, I proposed one such solution in May. The bipartisan Ensuring Seniors’ Access to Quality Care Act addresses a critical shortage of CNAs who, unlike LPNs, count toward the minimum staffing requirement. The bill allows nursing homes that have been forced to suspend in-house CNA education programs, due to restrictions from violations, to resume those programs once quality standards are again met.
This is a commonsense bill. It accounts for the current workforce challenges nursing homes face without compromising on a commitment to quality care for residents.
In-house CNA programs, often free, offer a pathway to certification for qualified candidates who may not be able to afford an outside program or who do not live near such a program or school. Through these programs, nursing homes can attract, retain and build a pipeline of skilled staff.
At a time when employees, much less highly skilled employees, are hard to come by and the cost of school is prohibitive for many, every effort should be made to keep in-house CNA programs running. If a facility has corrected the deficiency for which it received a penalty, it would be allowed to resume its training of CNAs with additional oversight if deemed necessary.
Legislative solutions like this are needed before CMS proceeds with any federal minimum staffing rule. It is imperative that the Biden administration holds off on implementing this rule until sufficient plans are put in place to build up the necessary workforce to satisfy staffing ratios like this.
The Biden administration should join Congress in doing the hard work to address these issues and support seniors instead of trying to bend reality to fit their whims.
Ron Estes, one of only a handful of engineers in Congress, worked in the aerospace, energy and manufacturing sectors before representing Kansas’ 4th District since 2017. He is a fifth-generation Kansan, former state treasurer, and serves on the House Committee on Ways and Means, Budget Committee, and Education and the Workforce Committee.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Workforce / Labor |
There will be a lot of positive talk from the chancellor when he delivers his autumn statement on Wednesday, but this will be a fiscal event full of illusory gains.
The government is on track to borrow less than previously forecast, which will give rise to a fantasy that Chancellor Jeremy Hunt has more space to slash taxes than he actually has.
It's a fantasy because these gains on borrowing are largely the product of high inflation, which has bolstered tax receipts. The government hasn't admitted it yet, but inflation will inevitably drive up spending too.
It means Hunt's room for manoeuvre is actually limited if he wants to meet his target of getting debt falling as a proportion of gross domestic product (GDP).
Although interest rates, which have been higher than expected, will weigh on the public finances, the windfall from higher taxes bolstered by inflation and wage growth will more than offset this. The Office for Budget Responsibility (OBR) will likely show that the government's headroom against that target has grown from £6.5bn to around £13bn.
Jeremy Hunt will want to claim this as a victory, while also tempering expectations for tax cuts. His message will be that the public finances are improving under this government but they are in too poor a shape to allow for any tax cuts.
This is where the political infighting begins. Many MPs within his own party want him to use that headroom to cut taxes. They are perturbed by the fact that a Conservative government has overseen growth in the tax burden to its largest in the post-war era.
Among the most egregious of these tax rises is the freezing of thresholds, a stealth tax which will see taxpayers pay £40bn a year more by 2028. It has dragged millions of public sector workers, including teachers and nurses, into the higher band of tax.
Tensions over taxation have been simmering in the party and will likely flare up again because Hunt is unlikely to make any big giveaways. The government is insistent that the priority must be to bring inflation down because any tax rises could drive inflation higher. However, with the target to halve inflation now met, MPs will be asking when the tax cuts can begin.
Both Hunt and Rishi Sunak are sensitive to this and will probably throw a bone or two. Downing Street has been looking for options that are relatively inexpensive and less likely to increase inflation.
There are a number of policies under consideration, including the scrapping of inheritance tax, or a reduction in the rate from 40% to 20% on estates above £325,000. The government could also cancel a planned increase on stamp duty. Together, these policies would cost about £5.2bn. The chancellor is also expected to cancel the planned 5p increase in fuel duty from April next year, which will cost £6bn.
So, any giveaways would quickly swallow up the headroom, at a time when government spending will inevitably have to rise. Departmental budgets are set in cash terms and high inflation means that the cost of paying prison guards and running courts has gone up. Without substantial increases, public services face real-terms pay cuts.
On current plans, unprotected departments would see their spending power cut by 16% between 2022-23 and 2027-28, which would be a similar pace of cuts to those implemented by George Osborne in the early 2010s. The Resolution Foundation, a left-leaning think tank, described this scale of the cuts as a "fiscal fiction" that is "undeliverable".
Read more:
Jeremy Hunt signals tax cuts as lower inflation means economy has 'turned a corner'
David Cameron's official peerage title revealed
Hunt contradicts PM on Rwanda flight take off position
The opposition will be keeping a hawk eye on this and will be quick to decry any signs that the country is returning to a period of austerity. It will also be quick to attack any of the government's tax-raising plans - and there will be a number of them.
Tax thresholds will probably remain frozen into 2029, a policy that could raise another £6bn. The Treasury will also be cracking down on benefits, uprating them in line with October's inflation rate of 4.6% instead of September's figure of 6.7%. That could save £2bn. A tweak to the triple lock calculation for pensions could net £600m.
So, for all the large upward revisions to the numbers coming out of the OBR, it's a fiscal event that is unlikely to inspire. There will be some tweaks around the edges and some big talk on plans to boost economic growth.
However, the government will probably want to keep its powder dry for the budget in March. Unfortunately, that may not be enough to satisfy Tory MPs, who are hungry for tax giveaways now. | United Kingdom Business & Economics |
Singapore Central Bank Wants DBS To Restore Digital Banking Services
DBS Bank will not be allowed to acquire new business ventures during this period or reduce the size of its branch and ATM networks in Singapore. The actions were taken following the repeated and prolonged disruptions of DBS’ banking services this year.
Singapore's financial regulator has imposed a six-month pause on DBS Bank Ltd's (DBS Bank) non-essential IT changes to ensure that the bank keeps sharp focus on restoring the resilience of its digital banking services.
DBS Bank will not be allowed to acquire new business ventures during this period or reduce the size of its branch and ATM networks in Singapore. The actions were taken following the repeated and prolonged disruptions of DBS’ banking services this year.
In April 2023, the Monetary Authority of Singapore (MAS) directed DBS Bank to engage an independent third-party to conduct a comprehensive review of the effectiveness and adequacy of the people, processes, and technology supporting its digital banking services. Shortcomings were identified in the following areas: system resilience; incident management; change management; technology risk governance and oversight.
Following the independent review, DBS Bank has set out a technology resiliency roadmap to address the shortcomings, improve system resilience, and better position the bank to meet future digital banking needs. The roadmap is being implemented in phases, with the changes affecting its system architecture design taking more time to complete.
MAS has reviewed DBS Bank's remediation plan under the roadmap and is satisfied with its scope and the planned measures to improve system resilience. In line with MAS’ expectations, DBS Bank will hold senior management accountable for the lapses and the board will enhance its governance approach to oversee implementation of the roadmap.
The financial regulator has directed DBS Bank to suspend all changes to the bank’s IT systems except for those related to security, regulatory compliance and risk management for a six-month period. This is to ensure that the bank dedicates the needed resources and attention to strengthen its technology risk management systems and controls. MAS will not approve any new business acquisitions by the bank during this period.
MAS has also directed DBS Bank not to reduce the size of its branch and ATM networks. This is to ensure there are adequate alternative channels for its customers in the event of further disruptions while the bank works to enhance the operational resilience of its digital channels. This direction will be in force until MAS is satisfied with the progress of DBS Bank’s remediation plan.
MAS will review the progress made by DBS Bank on its remediation efforts at the end of six months. MAS may extend the duration of the measures, vary the additional capital requirement currently imposed, or take further actions at that point. In the meantime, MAS will retain the multiplier of 1.8 times to DBS Bank’s risk weighted assets for operational risk, which was imposed after the March and May 2023 incidents.
It will take up to 24 months for DBS Bank to put in place the planned structural changes to improve the resilience of its digital banking services. In the meantime, it is possible that disruptions may still occur. In such situations, MAS expects DBS Bank to promptly recover its services and communicate to its customers in a clear and timely manner.
Ho Hern Shin, Deputy Managing Director (Financial Supervision), MAS, said: "DBS must put in place immediate measures to ensure service reliability while it continues to invest in the longer-term efforts to bolster its operational resilience. We have imposed this six-month pause on the bank to give it the space to take the actions needed to maintain customer trust." | Banking & Finance |
The maker of Guinness slammed them. While, Mr Sunak was heckled at the Great British Beer Festival where he tried to promote the duty shake-up. Landlord Rudi Keyser, 46, yelled: “Oh, the irony that you’re raising alcohol duty on the day that you’re pulling a pint.”
Mr Keyser later said Mr Sunak’s claim that drinkers and businesses will benefit is “smoke and mirrors”. He added: “It’s robbing Peter to pay Paul.” Mr Keyser, who runs a pub in Wimbledon, South West London, joined the teetotal Prime Minister at the event in West London. Under plans announced by Chancellor Jeremy Hunt in March, alcohol duty rose by about 10% yesterday.
It came amid a shake-up set out by Mr Sunak in 2021 when he was Chancellor, with booze now taxed by strength. Nuno Teles, boss of the UK arm of Diageo, which makes Smirnoff vodka as well as Guinness, called the duty rise “a hammer blow for consumers”. He added: “The Chancellor could have done better.”
Mr Teles said the tax burden on the average priced bottle of Scotch whisky now stood at 75%. The changes mean lower duty on low alcohol drinks but higher taxes on some others. The Scotch Whisky Association has also blasted the duty increase.
Director of strategy Graeme Littlejohn said: “At a time when inflation has only just started to creep downwards, this tax increase will continue to fuel inflation and make it more difficult for the Scotch whisky industry to invest in growth and job creation in Scotland and across the UK supply chain.
According to the Wine and Spirit Trade Association, duty on a typical bottle of 12% strength wine will rise by 44p. Mr Hunt said: “The changes we’re making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low alcohol drinks and boosting growth in the sector by supporting small producers financially.”
How YOUR favourite tipple could be affected:
* Bottle of vodka - 37.5% alcohol by volume (ABV) - 76p more tax
* Bottle of red wine - 12% ABV - 44p more tax
* Bottle of sherry - 15% ABV - 97p more tax
* Bottle of port - 20% ABV - £1.30 more tax
* 500ml bottle of beer - 4.5% ABV - 4p more tax (no change to draught duty). | Inflation |
Fedbank Financial Services IPO Subscription Day 2 Live Updates
The IPO has been subscribed 0.45 times, or 45%, as of 10:50 a.m. on Thursday.
Fedbank Financial Services launched its initial public offering on Nov. 22. On its first day, the IPO was subscribed 38%.
The retail-focused NBFC, targeting MSMEs and emerging self-employed individuals has fixed its IPO price bank in the range of Rs 133 to Rs 140 per equity share. The face value of the issue is Rs 10.
The share sale is a mix of fresh issue of 4.29 crore shares, aggregating to Rs 600.7 crore; and an offer for sale of 3.52 crore shares to the tune of Rs 492.26 crore.
Through OFS, the Federal Bank's overall holdings will come down to 61% from the current 73%, and True North's will come down to 8.5% from the current 25%.
The company intends to use the net proceeds from the fresh issue towards augmenting Tier-I capital base to meet its future capital requirements arising out of the growth of business and assets.
ICICI Securities, Equirus Capital, IFL Securities, JM Financial are managing the IPO.
The company has raised Rs 330 crore from anchor investors via a pre-IPO placement on Monday. The pre-IPO placement comprises 23.5 lakh equity shares, according to an exchange filing.
SBI Life Insurance, Star Union Dai-chi, Yasya Investments, Nuvama Crossover III, and Nuvama Crossover IIIA are some of the key investors.
IPO Details
Offer Opens: Nov. 22.
Offer Closes: Nov. 24
Fresh Issue Size: Rs 600 crore shares.
OFS Size: 3.52 crore shares
Price Band: Rs 133–140 per share.
Lot Size: 107 shares.
Face Value: Rs 10 per share.
Listing: NSE, BSE.
Business Model
Fedbank Financial Service Ltd is a retail-focused NBFC, promoted by the Federal Bank Ltd.
Fedbank Financial Service has the second and third lowest cost of borrowing among MSMEs, gold loan and MSME & gold loan peer set in India in financial year 2023, and three-months period ended June 30, 2023, respectively, according to CRISIL.
The financial service is the one of the top five NBFCS promoted by private banks in India. Fedbank Financial witnessed a three year CAGR of 33% between FY2020 and FY2023, and the fourth fastest year-on-year asset under management growth of 42% for three-months period ended June 30, 2023, according to CRISIL.
Subscription Status: Day 2
The IPO has been subscribed 0.45 times, or 45%, as of 10:50 a.m. on Thursday.
Institutional investors: 0.0 times
Non-institutional investors: 0.25 times
Retail investors: 0.79 times
Employee Reserved: 0.47 times | Banking & Finance |
Nigel Farage has called for the whole NatWest board to follow boss Dame Alison Rose in quitting as the row over his bank account closure escalates.
"The board of NatWest endorsed her position... They simply all have to go," the ex-UKIP leader told GB News.
Dame Alison Rose quit abruptly early on Wednesday after admitting she had made a mistake in speaking to the BBC about Mr Farage's relationship with the bank.
It came after the chancellor expressed significant concerns over her conduct.
Chair Sir Howard Davies said hours before Dame Alison resigned that it was in the interest of shareholders and customers that she stayed on as chief executive despite admitting she had made a "serious error of judgement".
The BBC has been told Sir Howard intends to remain on until mid next year when he is expected to retire.
City minister Andrew Griffith said given Sir Howard was already on his way out, there was no need for him to resign.
"There's already a search under way... for his replacement. We should let that continue and then in due course, obviously, the bank will need to appoint a new chief executive" he added.
Mr Griffith said it was important that lessons are learned from what has happened at NatWest, which is 39% owned by the taxpayer.
"It's not the job of the bank to tell us what to think or what political party we should support,"
Mr Farage, the former leader of the UK Independence Party and a Brexiteer, said in early July that his account at private bank Coutts - which is owned by NatWest - had been closed and that he had not been given a reason.
How the Farage bank row unfolded
- 29 June: Nigel Farage posts a video on Twitter, claiming he'd been told his bank accounts would be closed. He doesn't name the banking group at this stage. He says he's been with the bank since 1980. He says he was told it was a "commercial decision", but he didn't believe that reasoning
- 4 July: BBC article runs suggesting Farage fell below the financial threshold needed to hold an account with Coutts. Farage confirms Coutts is the bank in question, says at "no point" had he been given a minimum threshold and calls it a "political decision"
- 18 July: Farage posts another video, saying he has obtained documents (access subject request) showing Coutts decided to close his account because his views "do not align with our values"
- 19 July: The Telegraph reports Dame Alison sat next to Simon Jack at charity dinner the day before the BBC story was published
- 20 July: First apology by Dame Alison for "deeply inappropriate comments". She says papers that were prepared for the Wealth Reputation Risk Committee "do not reflect the view of the bank"
- 21 July: The BBC changes the headline and copy in its original story saying Farage fell below the financial threshold needed to hold an account with Coutts to say the claim had come from a source and added an update to recognise the story had changed
- 24 July: Simon Jack and Deborah Turness apology to Mr Farage
- 25 July: NatWest releases a statement saying Dame Alison had made a "serous error" but that the board still had "full confidence" in her
- 26 July: Dame Alison resigns. Nigel Farage calls on the whole NatWest board to go.
The BBC reported that it was closed because he no longer met the wealth threshold for Coutts, citing a source familiar with the matter. Mr Farage subsequently secured an internal document from Coutts which indicated his political views were also part of the decision.
The BBC has since apologised for its inaccurate report.
Mr Farage had highlighted to the BBC what he said was a discrepancy between the BBC's apology on Monday from its chief executive Deborah Turness, which said the BBC had gone back to the source to check the information, and NatWest's statement on Tuesday.
"There is no way, if the BBC went back for a second time to confirm the story, that they [the BBC] would not have checked that it was the balance of my account that led to that commercial decision," he said.
Following her resignation the government said she was also "no longer a member of the Prime Minister's business council".
She was also asked to step down from the government's energy efficiency taskforce and the net zero council. | United Kingdom Business & Economics |
The U.S. government’s instant payment system, FedNow Service went live this week.
Here’s a quick refresher on what that is: FedNow is an instant payment infrastructure for transferring money that promises to be a faster payment rail for financial institutions, offering immediate access to funds no matter the day or time. As you know, this is huge because banks aren’t traditionally open 24/7 or let you receive money and use it on the same day.
It’s also something that the U.S. has been considered “behind” on in light of the fact that other countries have been live with similar services for some time, including Brazil, India, the United Kingdom and the European Union.
The Federal Reserve said banks and credit unions of all sizes can sign up and use the tool. There are about 35 such financial institutions on the list already. In addition, 16 service providers are on board to support payment processing for banks and credit unions.
As TX Zhuo, managing partner of Fika Ventures, noted in a June guest column, contract employees can now get paid immediately and by other means than cash, and smaller financial institutions can now offer the same level of service that large institutions and fintechs can. The ability to get paid quicker through FedNow may also reduce the need for people to take out payday loans.
Future FedNow features coming down the pipeline include bank and credit union customers being able to send instant payments “quickly and securely” via their financial institution’s mobile app or website.
If the success of Pix in Brazil is any indication, then the potential for FedNow to be a game-changer in the U.S. is massive. Payments company Matera reviewed data from the Central Bank of Brazil and found that Pix transactions for Q1 2023 totaled 8.1 billion vs. 4.2 billion credit card and 3.8 billion debit card transactions. Noted Matera: “This is the first quarter where the number of Pix transactions were more than credit and debit combined.”
Industry reaction
FedNow might be immediate, but some in the financial industry, like Airbase CEO Thejo Kote, believe it will take some time for this to catch on.
“Banks on both the receiving end and the sending end have to be able to support these new protocols and this new kind of rails, and that’s a slow process,” Kote previously said in an interview. “I’m optimistic that over the next few years, the coverage will continue to get much better. However, in the here-and-now, the vast majority of dollars are still flowing through the Automated Clearing House network, and that has a whole host of challenges that you have to work [with].”
Nacha, the organization which governs the ACH network in the U.S., issued a statement noting that “instant payment systems (such as FedNow and RTP) and ACH, including Same Day ACH, will together meet the evolving needs of the marketplace,” and that “large volumes of scheduled and recurring payments between known counterparties on known due dates–payroll and benefit Direct Deposits, bill payments, B2B payments and account transfers –will continue to be served well by ACH.”
There is already a bit of drama surrounding the launch. Caitlin Long, founder and CEO of Custodia Bank, tweeted about why Adyen, a public European fintech company was able to get on the list of participants offering FedNow, when, in her words, “isn’t the Fed keeping #fintechs out???”
In a statement, Adyen confirmed that it had obtained a U.S. banking branch license in 2021 and was “among the first to complete testing and receive certification to utilize the FedNow(R) Service.”
For its part, the Financial Technology Association released a statement on July 20, welcoming the new instant payments system in the U.S. FTA President and CEO Penny Lee said in a statement:
“FedNow means more consumers and businesses can send and receive payments in seconds instead of days through their financial institutions. Instant payments will provide additional options for consumers to pay bills on time, access their paychecks more quickly, and avoid overdraft fees and predatory lenders. It will also help businesses better manage expenses, decrease errors, and reduce costs.”
Some fintech leaders too seem enthusiastic.
Dimitri Dadiomov, CEO of fintech startup Modern Treasury, applauded FedNow’s launch, saying: “Greater access to instant payments in the U.S. marks a sea change in the speed of money movement, which will enable businesses and consumers to transact faster and with more confidence and ease than ever…Everyone benefits when economies are more efficient and instant payments are a pillar of a more efficient money movement ecosystem.”
Still, as one Twitter user points out, there is one group of people that may not yet be on board: the American consumer. A startlingly larger-than-expected number of the population still prefer paper payments. But with the government’s very public endorsement of digital payments with the launch of FedNow, that may be changing.
Want more fintech news in your inbox? Sign up for The Interchange here. | Banking & Finance |
Shadow chancellor Rachel Reeves has ruled out any version of a wealth tax on the richest in society should Labour win the next general election.
She told the Sunday Telegraph extra money for public services would have to come from economic growth.
Ms Reeves confirmed Labour would not target expensive houses, increase capital gains tax or put up the top rate of income tax.
"I don't see the way to prosperity as being through taxation," she said.
The shadow chancellor told the newspaper Labour would instead do "whatever it takes" to attract business investment into the UK.
The interview comes as Labour steps up efforts to demonstrate it can be trusted with the economy - and further distance itself from the policies of former leader Jeremy Corbyn - ahead of an election that is expected next year.
Ms Reeves also told the Sunday Telegraph her preparations for government include "spending an awful lot of time with businesses".
Labour says it has it has attracted a surge of interest from businesses at its key party conference, which takes place in October. The party said the number of attendees at its business forum has gone up by 50% in a year.
The party's leadership has been insisting for some time that it will not make unfunded spending commitments.
But the left has said Labour should instead raise taxes, rather than lower its sights - and left-wing campaign group Momentum described the latest move as "shameful".
The group said in a post on X, formerly Twitter: "Wealth taxes are hugely popular. This is a Labour Leadership in hock to corporate interests."
Labour's strategists are content to provoke the ire of the left, partly as a way to emphasise how far the party has changed since the Corbyn era.
But they are also trying to insulate Labour from anticipated Conservative attacks at the next election.
By explicitly ruling out tax options, they believe this will blunt Tory warnings of a Labour tax bombshell to come.
The Conservatives, though, have accused Labour of taking people for fools, arguing that even the party's existing policies would push taxes up.
Meanwhile, Labour Party chair Anneliese Dodds defended Labour's decision to rule out a wealth tax, telling BBC Radio 4's Broadcasting House programme the party wanted to be "very careful with tax policy".
Ms Dodds said Labour wanted to avoid what she said was "economic chaos" under the Conservatives, "particularly following the mini-budget" under Liz Truss. She said Labour wanted to "rebuild" investors' confidence in the UK economy. | United Kingdom Business & Economics |
Back-to-work schemes across England previously paid for by the EU are being forced to close and lay off staff, despite a last-minute rule change by the government aimed at allowing councils to fund them.
Michael Gove’s Department for Levelling Up, Housing and Communities (DLUHC) wrote to local authorities last week giving them the green light to spend their shared prosperity fund (SPF) allocations on job schemes, from April.
The SPF is the government’s £2.6bn replacement for the EU structural funds that went to some of the UK’s poorest areas. Previously, government rules for England had specified that grants from the fund could not be spent on “people and skills” until April 2024, the third year of the fund.
This temporary restriction – which did not apply in Scotland or Wales – baffled councils and charities and led to warnings of a “funding gap” in the provision of back-to-work support.
In a message sent to councils on 23 March and seen by the Guardian, DLUHC officials said: “The prime minister recently set out a clear direction to focus on building the skills capability of people across the UK, so that they can realise their potential and increase workforce participation rates and our prosperity and productivity as a country … to maximise the impact of the [shared prosperity] fund in this area, we will remove the restriction on people and skills spending from April 2023 in England.”
Providers of back-to-work schemes, which include charities and private sector firms, welcomed the change of heart, which followed intensive lobbying.
But several the Guardian spoke to are already winding down schemes and making staff redundant.
Stephen Evans, the chief executive of thinktank the Learning and Work Institute, said: “It’s great the government is now saying local areas can invest in what they’d like, but they’ve already made plans based on the previous rules. So this is a positive step, but it’s so late that some projects have already closed and there’ll be an inevitable gap in support.”
He added that many of the schemes previously funded by the European social fund (ESF) in the UK were aimed at helping exactly the groups highlighted by Jeremy Hunt in his recent “back to work” budget – the over-50s, the economically inactive, and disabled people.
The shadow work and pensions secretary, Jon Ashworth, said: “This U-turn is just typical of this government. By changing their minds at the 11th hour, ministers have thrown local areas’ plans into disarray with just days to go until the new financial year.
“Local areas having access to funding for employment support is welcome, but this is too little, too late.”
Liz Tapner, the chief executive of the Lancashire social enterprise network Selnet, said: “I’m serving redundancy notices to 12 members of my team today, it’s so sad.”
Selnet has been delivering an employability scheme for people with complex needs since 2016, funded by the ESF and matched by the national lottery. “It might be somebody who’s homeless, a woman who’s escaping domestic violence, somebody that is just so exasperated by the debt, they’ve got themselves into they can’t see the wood for the trees,” she said.
“Yes, the government’s made this decision, but how quickly will we be able to pick up with individuals in Lancashire in real poverty?”
Peter Tomlinson, the director of operations at Social Enterprise Kent, which has been part of a consortium running an employability scheme across south-east England, said he was also having to lay off staff.
“Some of them have naturally gone because they knew the project was ending, but there’s two going next week, and then we’ll have another round of people being laid off probably in June if we don’t have any other projects coming in,” he said.
“They’ve said the shared prosperity fund will replace EU funding. It’s a drop in the ocean compared to what the EU were funding on these types of projects.”
Ian Ross, the managing director of Whitehead Ross Education and Consulting, said one project his company had been running closed before Christmas, with the loss of “six excellent staff”, and another, in Dorset, aimed at boosting skills for young people, is ending this month.
With five more ESF-funded schemes due to finish in December, he hoped the government’s change of heart could help to bridge the funding gap to next April, but added: “This is one of the consequences of Brexit and the piecemeal shared prosperity fund: it’s been shambolic.”
Kevin Bentley, the chair of the Local Government Association’s (LGA) people and places board, welcomed the government’s decision but warned: “Given this announcement comes so close to the new April 2023 date within which provision can be delivered, and many areas will have committed most of their funds for this year already, it may be a challenge to maximise the impact of this new flexibility.”
The LGA is calling for longer-term, sustainable funding for tackling economic inactivity.
Elizabeth Taylor, the chief executive of the Employment Related Services Association, which had pressed ministers for the rule change, called for a new funding round for 2023-24, instead of relying on councils to tear up their plans. “There cannot be a reliance on local authorities to bring this money forward without a national initiative,” she said.
A DLUHC spokesperson said: “We are levelling up and spreading opportunity across the UK through our £2.6bn shared prosperity fund. Our decision to relax spending across the fund from year two will give councils even greater flexibility to deliver what their areas need.” | Unemployment |
Petrol stations and retailers have "pocketed" the benefit of a 5p fuel duty price cut, the chair of the Treasury Select Committee has claimed.
Conservative MP Harriet Baldwin accused retailers of not passing on the tax reduction to drivers.
The UK's competition authority has found that drivers paid an extra 6p per litre for fuel at supermarkets.
It said on Monday retailers had passed on the fuel duty cut to customers, but had charged more than they should.
"The thing that annoys me from a Treasury point of view is that the Chancellor cut fuel duty by 5p to help families with their cost of living and yet it doesn't seem to have been passed on," Ms Baldwin told the BBC's Today programme.
"The CMA highlights that it actually 6p per litre extra that the retailers are pocketing in margin so basically that whole £2.4bn cost to the Exchequer has gone straight to the bottom line of the petrol retailers."
The competition watchdog has been investigating the UK fuel market following concerns that falling wholesale prices are not being passed on to consumers.
It said supermarkets were usually the cheapest place for fuel but competition was "not working as well as it should be".
Petrol and diesel prices spiked to record highs in the aftermath of Russia's invasion of Ukraine, but have since dropped.
The CMA said it plans to force supermarkets and other fuel retailers to publish live prices under a new scheme aimed to stop overcharging.
But last week, supermarkets bosses, who were quizzed over fuel and food prices by MPs, denied they were making too much money from higher prices.
Morrisons' chief executive David Potts told the Business and Trade committee that the supermarket passed on the 5p cut to customers "one the same day" it was announced.
He said energy, transport and labour costs had "all added to the oil barrel", but added "we can always do more".
"Right now the prices on our supermarket forecourts are lower than the independents and continue to be so," he said.
The BBC has contacted the Petrol Retailers Association, which represents independent forecourts, for comment.
All supermarkets have backed the idea of a price transparency scheme, similar to the type in place in Northern Ireland, where fuel is cheaper.
However, the CMA has admitted petrol and diesel in Northern Ireland is less expensive than in other parts of the UK because of competition from filling stations in the Republic of Ireland. | United Kingdom Business & Economics |
Natco Pharma Q2 Results Review - Strong Growth On Low Base; Weak Q3 Expected: Nirmal Bang
Natco Pharma’s Q2 FY24 revenue was below non-binding indicative estimates; however, Ebitda margins were in line.
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
Natco Pharma Ltd. Q2 FY24 revenue was below non-binding indicative estimates; however, Ebitda margins were in line.
Revenue grew by ~139% YoY, on account of a low base in the export business and ramp up in crop protection business led by calculated total peripheral resistance. Domestic Formulations grew by ~10% YoY, while export formulations grew 180% YoY aided by Revlimid sales. Ebitda margins improved to 44.4%, mainly due to Revlimid contribution.
We remain cautious about Natco Pharma as growth is highly contingent on the performance of Revlimid and CTPR. Excluding these two, we do not see any near-to-medium term visibility in both the U.S. as well as domestic market.
Also, restructuring of the business to diversify into multiple geographies and segments as opposed to being a focused U.S. centric player is likely to weigh on base business margins in the short to medium term.
We maintain 'Accumulate' on Natco Pharma with a revised SOTP-based target price of Rs 861, valuing it at 24 times price to earnings on September FY25E base earning per share of Rs 28.5 and net present value of Rs 176 for Revlimid.
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I wrote back in February that raising corporation tax to 25% could take the effective rate of tax to the highest it’s ever been in the UK. We now have more data, and can say with some confidence that UK companies will indeed pay more tax in 2023, as a percentage of their profits, than at any time since the 1970s, and plausibly than at any time since 1946.
The Johnson government increased corporation tax from 19% to 25% from April 2023. The mini-Budget reversed this. Then Jeremy Hunt’s Autumn Statement reversed the reversal, taking the rate back to 25% from April. How should we assess the merits of the increase to 25%?, almost one year later? Should we reverse the reversal of the reversal?
The standard argument for the increase goes something like this:
“We’ve been cutting corporate tax for 25 years, it’s gone too far, and it’s time to go back to 25%. After all, the rate was 33% in the 80s, and is now 19%, so 25% is still a pretty good deal.”
That argument is usually accompanied by this chart, showing the headline rate falling dramatically:
But nobody pays the headline rate. They pay their “taxable profits” (often called the “base”) multiplied by the headline rate. And what that chart doesn’t show is the change in the definition of “taxable profits”. It’s half the story – some would say much less than half.
We get more of a clue of what’s going on if we look at the corporate tax actually paid – here’s an overlay showing UK corporation tax receipts (in red) as a % of GDP:1GDP data from the OECD tax database.
The rate fell. The revenues bounced around with the business cycle, but fundamentally didn’t change much, if at all – there’s no statistically significant pattern here2p=0.54.
Could it just be that corporate profits rose, so the declining rate multiplied by increased profits kept revenues broadly constant? We can test that by dividing corporation tax revenues by the corporate “gross operating surplus” in the national accounts,3Source for GOS of all corporations is ONS data here, for GOS of oil/gas is ONS data here, historic CT data from the IFS and most recent data from HMRC here excluding oil and gas on both sides of the equation. 4This is for two reasons: it is taxed differently, the oil/gas price is subject to significant fluctuations, and the tax regime has changed frequently – if therefore doesn’t tell us anything about normal corporate tax. I’ve also excluded the energy profits levy for the same reason. I’ve included the bank surcharge, because it’s just a higher rate of corporation tax for banks. I’ve excluded the bank levy, because it’s not a tax on profit. I’ve also excluded the residential property developer tax, largely because I’m unfamiliar with the detail – however the numbers are small (£157m in 2022) This gives us a reasonable proxy for the overall effective tax rate on corporates:5One big caveat: GOS is not the same as accounting profit, and in particular excludes depreciation (so the accounting profit will (all things being equal) be lower and the chart therefore understates ETR). So the trend is a useful indicator, but that absolute number cannot be compared with actual tax rates. Note that ONS CT receipts data now takes account of the time-lag between economic activity and tax payment (which has changed several times).
Now we do see a trend, but it’s the opposite of what we might expect. The plummeting headline rate didn’t reduce the actual effective rate (the yellow line); in fact there was a slight, but statistically significant, increase (p=0.03). How can the corporate tax take increase when the rate has fallen so dramatically?
The answer isn’t “Laffer Curve” – there is no sign of any correlation between rate cuts and increases in profitability.6Another factor we can dismiss is the wave of incorporation by small businesses. That artificially inflated corporation tax revenues, but at the cost of (greater) reductions in income tax. The effect, however, is too small to impact the trends visible in the charts above, being around £1bn (there was a much larger reduction in income tax revenues, because people were essentially avoiding income tax and opting into a significantly smaller amount of corporation tax). That pushed the apparent ETR up by approximately 0.2% – not material. It’s that the base – that definition of “taxable profits” – expanded dramatically.7 Some of this was the crackdown on avoidance, but technical changes were more significant, particularly the abolition of industrial buildings allowance So, through accident or brilliant HM Treasury design, nothing much changed.8Another hypothesis that’s often suggested is that what’s been happening is profit-shifting by corporations outside the UK, so that GOS has disappeared from the national accounts. Hence, whilst that profit then isn’t (much) taxed, it doesn’t impact on this chart. Only the mugs that have stayed behind are paying the high rate. This is absolutely a real effect, albeit that real and forthcoming changes make it more difficult. However the evidence is that the UK is a net beneficiary of profit-shifting, so this effect does not explain the trend in the chart.
The rate increase to 25% is, by contrast, accompanied by very little9We do have “full expensing” – enhanced relief for investment. There are good grounds to believe that permanent full expensing would materially boost investment; however this is a short term measure that is unlikely to have such effects. Most likely it functions (in essence) as a tax reduction for businesses making investments that were already planned before the policy was announced. It does therefore somewhat reduce the tax base. I missed this point in the original draft of this article – thanks to Chris Giles for spotting my error that narrows the tax base. We haven’t gone back to where things were last time the rate was 25% – we are in new territory, where companies pay significantly more tax for each % of the rate.
That means that, if we project forward to 2023, the chart looks like this:10This is a simple projection which assumes the 2022 GOS nominal figures go up with inflation (which itself won’t change the ETR), and then adds in the effect of the increased rate: in other words, increasing the overall onshore CT take by 25/19, leaving offshore CT untouched, and reducing the bank surcharge to 3/8ths of where it was. It deducts the HMT projected cost of “full expensing” (from page 77 of the Budget Red Book. I make no attempt to take account of dynamic effects, but I’m unconvinced anyone really knows what those will be.
This is easily the highest effective rate of tax UK companies have paid since the 1970s – it’s not even close. It would be even higher if we focussed on large companies (as small companies pay a lower rate and get more reliefs).
I haven’t been able to find comparable CT data for earlier periods, but I’d be reasonably confident the ETR is now the highest since the WW2 excess profits tax was abolished in 1946. The tax system is much, much, “tighter” than it was in previous decades, and so (counter-intuitively) companies pay much more tax at 25% today than they did at 52% in the 1970s.
For completeness, here’s how the UK rate compares to everyone else:
Or we can reorder it to see where the UK would have been if the rate had stayed 19%:
I am fundamentally a small C conservative when it comes to tax, and I worry about the effect of dramatic changes. I, therefore, remain convinced that raising corporate tax to this unprecedented level is a bad idea.
The problem, however, is that the 25% increase has been “banked” in government accounts. The Kwarteng cancellation of the increase in the mini-Budget was unfunded, meaning that the £16bn+ the cancellation cost would have been distributed opaquely throughout society through inflation and/or higher interest rates. I don’t regard that as good tax policy.
Alternatively, we could take the rate back to 19% by cutting spending, or raising taxes elsewhere. That would certainly be an intellectually coherent position to take (whether you agree with it or not), but it’s an argument that I don’t hear anyone making right now.
And, finally, you could argue that increasing the rate to 25% will actually bring in no more revenue, because profits will drop. The 25% is, the argument goes, past the “revenue maximising point”, and cutting back to 19% won’t actually cost anything. The problem is that there’s no evidence for “Laffer Curve” effects of this kind in the response to previous rate reductions.
So keeping the rate at 25% feels like the least bad of several bad ideas. I therefore unenthusiastically continue to support it.
- 1GDP data from the OECD tax database.
- 2p=0.54
- 3
- 4This is for two reasons: it is taxed differently, the oil/gas price is subject to significant fluctuations, and the tax regime has changed frequently – if therefore doesn’t tell us anything about normal corporate tax. I’ve also excluded the energy profits levy for the same reason. I’ve included the bank surcharge, because it’s just a higher rate of corporation tax for banks. I’ve excluded the bank levy, because it’s not a tax on profit. I’ve also excluded the residential property developer tax, largely because I’m unfamiliar with the detail – however the numbers are small (£157m in 2022)
- 5One big caveat: GOS is not the same as accounting profit, and in particular excludes depreciation (so the accounting profit will (all things being equal) be lower and the chart therefore understates ETR). So the trend is a useful indicator, but that absolute number cannot be compared with actual tax rates. Note that ONS CT receipts data now takes account of the time-lag between economic activity and tax payment (which has changed several times).
- 6Another factor we can dismiss is the wave of incorporation by small businesses. That artificially inflated corporation tax revenues, but at the cost of (greater) reductions in income tax. The effect, however, is too small to impact the trends visible in the charts above, being around £1bn (there was a much larger reduction in income tax revenues, because people were essentially avoiding income tax and opting into a significantly smaller amount of corporation tax). That pushed the apparent ETR up by approximately 0.2% – not material.
- 7Some of this was the crackdown on avoidance, but technical changes were more significant, particularly the abolition of industrial buildings allowance
- 8Another hypothesis that’s often suggested is that what’s been happening is profit-shifting by corporations outside the UK, so that GOS has disappeared from the national accounts. Hence, whilst that profit then isn’t (much) taxed, it doesn’t impact on this chart. Only the mugs that have stayed behind are paying the high rate. This is absolutely a real effect, albeit that real and forthcoming changes make it more difficult. However the evidence is that the UK is a net beneficiary of profit-shifting, so this effect does not explain the trend in the chart.
- 9We do have “full expensing” – enhanced relief for investment. There are good grounds to believe that permanent full expensing would materially boost investment; however this is a short term measure that is unlikely to have such effects. Most likely it functions (in essence) as a tax reduction for businesses making investments that were already planned before the policy was announced. It does therefore somewhat reduce the tax base. I missed this point in the original draft of this article – thanks to Chris Giles for spotting my error
- 10This is a simple projection which assumes the 2022 GOS nominal figures go up with inflation (which itself won’t change the ETR), and then adds in the effect of the increased rate: in other words, increasing the overall onshore CT take by 25/19, leaving offshore CT untouched, and reducing the bank surcharge to 3/8ths of where it was. It deducts the HMT projected cost of “full expensing” (from page 77 of the Budget Red Book. I make no attempt to take account of dynamic effects, but I’m unconvinced anyone really knows what those will be. | United Kingdom Business & Economics |
Australian hardware giant Bunnings to make biggest expansion in 20 years by entering $10 billion petting industry
The iconic Australian store has made its biggest move in two decades by expanding into one of the nation’s hottest multi-billion-dollar industries.
Bunnings will soon expand its offerings beyond hardware and into the lucrative pet care sector from next month.
The iconic Australian retailer, which has begun fitting out its stores to accommodate the new range, will stock more than 1,000 products such as food, toys and other accessories in the fast growing multi-billion industry.
It will now go head-to-head with the likes of established industry leaders such as Petbarn and Woolworths, which has invested more than $500 million into PETstock.
In a statement, Bunnings Managing Director Mike Schneider noted that upwards of 60 per cent of Australians are pet owners, who would welcome the news.
He added Bunnings is already welcoming of pets in its stores across the nation, a clear advantage it holds over Woolworths.
“What we are going to be bringing to life in our stores over the next four weeks is quite a comprehensive step change in our pet range, probably the biggest category expansion in Bunnings for 20 years,” he told The Australian.
“If you look at the last few years I think it is 60 per cent of Australians now own at least one pet, it has become a very important part of many, many families across Australia and we think that connection that people have with the Bunnings brand, bringing those pets into the store, creates a great advantage.”
Mr Schneider said Bunnings will bring a “very competitive offer” into the estimated $10 billion industry.
“We believe Australians have a really deep passion for everything around their home and everything that’s in their home,” he said.
“And we do think we can bring a very, very competitive offer into this market and we think that given the sort of comfort that the customers have bringing their pets into the business it’s going to be a very good complementary category for us.”
After Bunnings confirmed the expansion, the market responded positively with its parent company Wesfarmers seeing a slight increase in its share price.
Its move to different growing markets is the biggest since it introduced kitchen fitouts two decades ago. | Australia Business & Economics |
Ex-BOE Governor Warns of UK Recession Risk With New Rate Mistake
The Bank of England risks triggering a recession in the UK by tightening interest rates too much in a bid to stamp out inflation, its former Governor Mervyn King warned.
(Bloomberg) -- The Bank of England risks triggering a recession in the UK by tightening interest rates too much in a bid to stamp out inflation, its former Governor Mervyn King warned.
King said in an interview with Bloomberg podcast “Merryn Talks Money” that the central bank is ignoring signals from money supply data, which had predicted soaring prices before the BOE acted.
The comments add to concerns about the impact that the BOE’s sharpest series of rate rises in three decades is having on the economy. Money supply economists correctly predicted the sky-high inflation and are now warning that a collapse in the data could point to recession.
“The risk is that having ignored money when inflation was rising, they’re now ignoring money when inflation is actually about to fall,” King said in the interview. “What we could see, therefore, is a mistake in both directions over a period of three or four years.”
“If they carry on for the next six months or so, tightening monetary policy, it could well be that they generate both a recession as well as a sharp fall in inflation.”
After rocketing in 2020 and early 2021, money supply growth in the UK has tumbled and was flat in May, the latest available data. For monetarists, growth and inflation are a function of the quantity of money in circulation and its velocity — the number of times it changes hands.
However, the BOE re-accelerated its most aggressive hiking cycle in three decades last month, hiking rates by half a percentage point to 5% after signs that price and wage pressures are proving much stickier than expected.
Inflation data released on Wednesday suggested that price growth is finally cooling with the inflation rate falling below 8% for the first time in 15 months in a larger than expected cooling.
The BOE has faced fierce criticism for its handling of double-digit inflation. King said they could now be over-correcting after miscalculating the initial surge.
“It’s quite possible that having lost control of inflation and therefore having lost a good deal of credibility that central banks will see that the safest course for them is one of overkill now so that they do bring inflation back to 2%,” he said.
“Having made a big mistake, it would have been better to have tightened much faster in 2022, even better not to have printed the money in 2020 and 21.”
King accused central banks and the economics profession of “group think” and said policymakers had “printed far too much money through quantitative easing.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Interest Rates |
Supreme Court Justice Clarence Thomas says he accepted five private jet flights from personal friend and GOP megadonor Harlan Crow last year, according to financial disclosure documents released Thursday.
On one trip in February 2022, Thomas reports accepting a return flight from Dallas, Texas, "due to unexpected ice storm." On a separate occasion in May 2022, Thomas cited the recommendation of his security detail to take roundtrip noncommercial travel because of "increased security risk following the Dobbs opinion leak," referring to the draft of the decision that would later overrule Roe v. Wade in June.
Last summer, Thomas says he was a guest at Crow's upstate New York estate, accepting roundtrip transportation, meals and lodging from his friend.
The items are listed as "reimbursements" in Thomas' 2022 Financial Disclosure Report, which federal law requires all federal officials to complete each year. It details sources of income, gifts, reimbursements, and investments.
Thomas said he consulted with the Supreme Court's legal office, Judicial Conference Financial Disclosure Committee and his personal counsel in making sure he was in compliance with the guidelines and whether an amendments of past reports should be required.
The justice did not amend any past reports to list previously undisclosed private flights or hospitality from Crow, noting that only in March of this year did the federal judicial guidelines change to explicitly require judges to report "transportation that substitutes for commercial transportation." Previously, the rules stated any "personal hospitality" did not need to be reported.
Thomas did, however, determine that some information was "inadvertently omitted" from past reports.
In an addendum, Thomas lists personal bank accounts and his wife Ginni Thomas' life insurance which were left off reports from 2017 to 2021, and a real estate transaction with Crow first revealed earlier this year by the investigative news site ProPublica.
The outlet reported that Crow had purchased three Georgia properties from Thomas in 2014 -- including the home that Thomas' mother still lives in -- in a transaction that was never publicly reported.
Thomas confirms the $133,000 deal in the new filing, explaining that he "inadvertently failed to realize" that the sale was reportable even though it "resulted in a capital loss."
Controversy over Justice Thomas' financial disclosure compliance has triggered intense scrutiny of the Supreme Court's ethics practices and prompted Democrats in Congress to advance legislation aimed at tightening the rules and imposing independent oversight. Republicans say the focus on Thomas is a partisan smear aimed at discrediting the conservative majority.
In the new report, Thomas vows to comply with the federal judicial guidelines for disclosure, noting that going forward, all trips provided by Harlan Crow and other friends will be reported. | Real Estate & Housing |
(Bloomberg) -- Bankrupt cryptocurrency exchange FTX has abruptly halted the sale of one of its most sought-after assets: a stake in artificial intelligence startup Anthropic.
Most Read from Bloomberg
Perella Weinberg Partners, the boutique investment bank that acts as an adviser to FTX, informed bidders this month about the pause, according to people familiar with the matter who asked not to be named discussing confidential information.
The halt came after several months during which multiple potential buyers assessed private information about the Anthropic stake, the people said. Semafor reported earlier in June that FTX had been shopping its Anthropic holding with an expectation of fetching “nine figures.”
Privately-held Anthropic, founded in 2021 by former OpenAI employees, has become one of the hottest companies of the current AI boom. Anthropic said in May that it had raised $450 million to support the development of its AI bot, dubbed Claude.
Buyers in the secondary market for shares in private companies have been actively seeking opportunities to acquire stakes in Anthropic, including at a premium, according to Rainmaker Securities co-founder Glen Anderson. According to Semafor’s June report, Anthropic is valued at $4.6 billion.
Read: AI Frenzy Draws Hordes to Private Markets in Industry Gold Rush
Sam Bankman-Fried’s FTX and Alameda made a $500 million investment in the startup, according to an internal document circulated before last November’s bankruptcy filing and reviewed by Bloomberg News.
The Anthropic stake represents one of the biggest bets made by the now-failed crypto exchange, behind its $1.5 billion investment in crypto miner Genesis Digital.
Perella had asked potential bidders to sign non-disclosure agreements, the people said. Requiring would-be bidders to sign NDAs before accessing private information about a target’s finances is a standard practice.
FTX declined to comment. Neither Perella nor Anthropic responded to requests for comment.
This week, the new management of FTX published a report detailing the alleged commingling and misuse of customer assets at the exchange. The report cited certain transactions, including political donations and VC investments, that appear to have been funded in part by commingled customer deposits.
Read: FTX Creditor Tokenizes Bankruptcy Claim, Sells It as an NFT
--With assistance from Hannah Miller, Saritha Rai, Yiqin Shen and Nina Trentmann.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
Shortages of some fresh fruit and vegetables such as tomatoes and cucumbers could be the “tip of the iceberg”, the National Farmers’ Union (NFU) has said.
Certain products are hard to come by in UK supermarkets due to poor weather reducing the harvest in Europe and north Africa, Brexit rules and lower supplies from UK and Dutch producers hit by the jump in energy bills to heat glasshouses.
The NFU’s deputy president, Tom Bradshaw, said a reliance on imports had left the UK particularly exposed to “shock weather events”.
He said the UK had now “hit a tipping point” and needed to “take command of the food we produce” amid “volatility around the world” caused by the war in Europe and the climate crisis.
“We’ve been warning about this moment for the past year,” Bradshaw told Times Radio on Saturday. “The tragic events in Ukraine have driven inflation, particularly energy inflation, to levels that we haven’t seen before.
“There’s a lack of confidence from the growers that they’re going to get the returns that justify planting their glasshouses, and at the moment we’ve got a lot of glasshouses that would be growing the tomatoes, peppers, cucumbers, aubergine that are sitting there empty because they simply couldn’t take the risk to plant them with the crops, not thinking they’d get the returns from the marketplace.
“And with them being completely reliant on imports – we’d always have some imports – but we’ve been completely reliant on imports [now]. And when there’s been some shock weather events in Morocco and Spain, it’s meant that we’ve had these shortages.”
Bradshaw also acknowledged that the current shortage was an indirect result of the UK’s decision to leave the EU.
He added: “It’s really interesting that before Brexit we didn’t used to source anything, or very little, from Morocco but we’ve been forced to go further afield and now these climatic shocks becoming more prevalent have had a real impact on the food available on our shelves today.”
On Wednesday, Tesco followed Aldi, Asda and Morrisons in introducing customer limits on certain fresh produce as shortages left supermarket shelves bare.
Tesco and Aldi are limiting customers to three units of tomatoes, peppers and cucumbers as a precautionary measure, while Asda is also limiting customers on lettuce, salad bags, broccoli, cauliflower and raspberries.
Meanwhile, Morrisons has set a limit of two items per customer across tomatoes, cucumbers, lettuce and peppers.
It comes as the shortage of tomatoes in UK supermarkets has widened to other fruit and vegetables due to the combination of bad weather and transport issues.
The environment secretary, Thérèse Coffey, caused a furore after she suggested people should “cherish” seasonal foods such as turnips as bad weather cleared supermarket shelves of tomatoes and other fresh produce.
She told MPs: “A lot of people would be eating turnips right now rather than thinking necessarily about aspects of 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 try to satisfy.”
However, there have been reports of a shortage in turnips since the environment secretary’s comments.
While Waitrose has reportedly discontinued selling the root vegetable, shoppers at Sainsbury’s complained of a lack of turnips in their stores. | United Kingdom Business & Economics |
The Question Isn’t Whether to Shop, It’s Where
After a brief burst of in-store activity, there are signs consumers are returning to their online spending ways. Are retailers ready for the next wave of e-commerce?
(Bloomberg Opinion) -- The long-running tussle over how people shop — online or in-store — has a new wrinkle.
Coming out of the worst of the pandemic, stores got a new lease on life: shoppers freed of mask mandates bumped up traffic and retail landlords experienced the kind of swelling demand they had all but forgotten. The respite has been brief, with signs that people are returning to their old online ways. And really, that reversion seems inevitable, given how accustomed we’ve grown to the ease of online shopping and free returns — a process that the pandemic only turbocharged.
Now, as the dust settles from the whiplash of Covid spending habits, the real test of strength for retail’s online businesses is beginning. Data last week showed back-to-back declines for retail sales at primarily brick-and-mortar stores, while spending grew online. Year-on-year online prices have been falling for seven consecutive months, drawing shoppers. The question this raises is whether traditional retailers have successfully absorbed the lessons of the pandemic; and whether the billions of dollars pumped into e-commerce technology and supply chains will be enough for them to hold on — or even flourish — in the next era of online shopping. Walmart Inc., for one, invested just short of $13 billion over 2021 and 2022 in such upgrades, and in building out its hybrid online and offline services such as buy online and pick up in store. A chunk of its estimated $18 billion in capital spending this year is likely to go in the same direction. Target Corp., Macy’s Inc., Nordstrom Inc. and really the whole industry has pumped billions of dollars into sortation centers, same-day delivery, online platforms and other digital-aligned services. The investments were a long time coming — but the question of whether companies have done enough remains to be answered. One key lingering challenge for many is expensive and money-losing storefronts. Walmart and Target have both closed some stores this year, even as they renovate others; American Eagle Outfitters Inc., Bath & Body Works Inc. and Foot Locker Inc. all have plans to shrink their physical footprint. Even Amazon.com Inc. is closing stores, though Whole Foods Market remains untouched.Walmart has seen monthly declines in store traffic since July, when compared with the previous year, while Target’s numbers have also softened, according to data from Placer.ai, a location analytics company. That’s offset by shoppers staying longer, says Ethan Chernofsky, a senior vice president of marketing at Placer.ai, who interprets any declines as a shift to “mission-driven shopping,” where people do more in fewer visits. He added that the investments both companies are making to stay ahead of hybrid online and in-store shopping trends should strengthen their positioning.
Even though stores often fulfill online orders, they can still drag on profitability amid slower consumer spending and more online shopping. Analysts at UBS Group AG estimated in a report last week that more than 50,000 stores will close by 2027 under their forecast for e-commerce penetration to go from the current 20% to 26%. But they predict that the leading retailers may benefit as greater e-commerce penetration is likely to hit smaller chains and mom-and-pop stories hardest, leaving some $285 billion in sales up for grabs — some of that will flow online, but the rest will flow to the streamlined brick-and-mortar survivors.There’s little doubt that stores will always have a place in our modern era of retail, though their ubiquity and utility are changing. Stores have more success now as a “vibe” that embodies the company’s brand, and as a place to show off new merchandise, and quickly exchange or return products. As retail companies struggle to find the right online-offline balance, our shopping-scape will continue to morph even as our passion and need for shopping remain intact.More From Bloomberg Opinion:
- Inflation Makes Us Want to Dress Like the 1%: Andrea Felsted
- Walmart Exits Aren't About Crime, Just Business: Leticia Miranda
- It’s Schultz, Not Starbucks, That Seems to Be Lost: Beth Kowitt
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Leticia Miranda is a Bloomberg Opinion columnist covering consumer goods and the retail industry. She was previously a business reporter at NBC News and a retail reporter at BuzzFeed News.
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Consumer & Retail |
Health insurance giant Cigna will pay more than $172 million to settle federal claims that it knowingly submitted false diagnosis codes under the federal Medicare Advantage program.
Federal prosecutors alleged in a lawsuit last year that Cigna submitted inaccurate and untruthful codes for Medicare Advantage between 2016 and 2021. The U.S. Department of Justice said in a statement Saturday that Cigna violated the False Claims Act by failing to delete or withdraw incorrect codes.
"Cigna knew that these diagnoses would increase its Medicare Advantage payments by making its plan members appear sicker," said Damian Williams, U.S. Attorney for the Southern District of New York. "The reported diagnoses of serious and complex conditions were based solely on cursory in-home assessments by providers who did not perform necessary diagnostic testing and imaging."
Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare. The program is mainly for Americans 65 and older. More than half of the nation's Medicare beneficiaries are in Medicare Advantage, and the federal government pays private insurers more than $450 billion a year for health coverage, according to Michael Granston, the DOJ's deputy assistant attorney general.
In one example, federal prosecutors said Cigna submitted reimbursement documents for patients who are morbidly obese but did not submit medical records that showed their body mass index being above 35, which is a requirement for that particular diagnosis code.
Cigna said the settlement with the government resolves a long-running legal case and "avoided the uncertainty and further expense" of a drawn-out legal battle. Cigna also said it will enter a corporate-integrity agreement for five years with the Department of Health and Human Services' inspector general office. That deal is designed to promote compliance with federal health program requirements.
The settlement comes as Cigna facesthat accuses the company of using an algorithm called PxDx to save the insurer money by denying certain medical claims. The system also reduces the company's labor costs by cutting the time needed by doctors to look at each claim, according to the lawsuit.
for more features. | Banking & Finance |
By Selena Li and Sumeet Chatterjee
HONG KONG (Reuters) - BNP Paribas plans to make at least a dozen hires in its equities business in Asia next year and will end a research outsourcing pact with Morningstar, two sources with knowledge of the matter said, in a revamp to boost market share.
BNP's move to add more research analysts, salespeople and traders comes as a bank spokesperson said in Asia Pacific it had started integrating and expanding coverage by Exane, a global platform it fully acquired in 2021 that specialises in cash equities execution and research.
The spokesperson said "key hires" would join the bank as part of the revamp, but declined to provide the hiring target. The French bank also did not comment on plans to end its research partnership with Morningstar after more than four years.
The sources declined to be named as they were not authorised to speak to the media.
Morningstar did not immediately respond to a request for comment.
The expansion of the equities business by BNP comes as its Wall Street peers have reduced investment banking headcount this year amid sluggish trading and dealmaking activities.
The move also comes close on the heels of BNP completing the integration of Exane with its existing cash equities operation in Europe and in the U.S., resulting in the platform's transfer of all the clients, teams and technology to BNP.
Under CEO Jean-Laurent Bonnafe, the euro zone's biggest bank has bolstered its investment banking business, a move that has benefited BNP in recent years as market volatility propelled trading, particularly last year after Russia invaded Ukraine.
The bank has also invested in building up its equities trading business in the last few years, notably by acquiring Deutsche Bank's electronic equity and prime broking operations, a deal that was completed in early 2022.
In Asia, BNP competes with large Western banks including Morgan Stanley, Goldman Sachs, JPMorgan and UBS, as well as a host of local investment banks in the cash equities business.
One of the sources said BNP could boost its Asia equities headcount by as much as 20 over the next year.
Equities capital market business in Asia has been sluggish for a period of time, but BNP sees the need to be ready for an "inflection point" of a bounceback in activity, said Jason Yates, BNP's head of cash equity in Asia Pacific.
"Some clients are pulling back (from Asia), but other clients are telling us that actually they are committing to Asia and are adding more resources," said William Bratton, the bank's Asia-Pacific head of cash equity research.
INCREASING STOCK COVERAGE
In 2019, BNP entered into a pact with Morningstar as part of which the French bank sourced the bulk of its Asia-Pacific equity research from the independent research provider, joining other banks seeking to cut costs after regulatory changes.
The bulk of BNP's in-house equities research team, mainly in Hong Kong and Singapore, departed as a result of that deal.
The bank has now started unwinding its outsourced research partnership in the region, said the first source. The second source said the tie-up with Morningstar was expected to end in 2024, as Exane gradually takes control of the function.
BNP aims to increase its stock coverage in the Asia-Pacific region by three to four times in the coming years, the spokesperson said. It was not immediately clear how many regional companies are covered by BNP and Morningstar as part of the partnership.
The research coverage within the bank will be strengthened initially in the industrials, technology and consumer sectors, Bratton said, adding BNP would also add to the coverage of automobile, semiconductor and consumer companies in China, and new energy companies from China and South Korea.
"It's very important that you have a view ... rather than having independent research and expecting clients to piece that together," Yates said, adding it was easier to bring the talent and product management in-house than use external parties.
India, a market where BNP did not outsource its research coverage, will be fully integrated into the Exane platform on Thursday, said the spokesperson, making it the first Asian market to be integrated as part of the gradual regional rollout.
(Reporting by Selena Li and Sumeet Chatterjee; Editing by Jamie Freed) | Asia Business & Economics |
U.S. Compels Saudi Fund To Exit AI Chip Startup Backed By Altman
The U.S. is heightening scrutiny over the activity of Middle Eastern wealth funds.
(Bloomberg) -- The Biden administration has forced a Saudi Aramco venture capital firm to sell its shares in a Silicon Valley AI chip startup backed by OpenAI co-founder Sam Altman, an exit that could have broader implications for the Middle Eastern country’s growing investments in US technology.
Prosperity7, a lead investor in a funding round that raised $25 million for Rain AI in 2022, sold its shares in the startup after a review by the Committee on Foreign Investment in the United States, people familiar with the matter said. The agency, the primary US watchdog for deals with national security implications, instructed the Saudi fund to unwind that deal sometime over the past year, the people said, asking to remain unidentified because the information is private.
The US is heightening scrutiny over the activity of Middle Eastern wealth funds, part of a growing resistance toward entities regarded as having close ties with China. CFIUS is reviewing several multibillion-dollar deals this year on concerns they could pose national security risks, Bloomberg News has reported.
Rain AI, partly financed by Altman, is a startup that designs AI chips inspired by the way the brain works. Prosperity7 sold its stake in the firm to Silicon Valley investment firm Grep VC, according to data firm PitchBook. Altman, Rain, Prosperity7 and Grep VC did not reply to requests for comment. CFIUS said in an emailed statement it couldn’t comment on transactions it’s reviewing but that it’s “committed to taking all necessary actions within its authority to safeguard U.S. national security.”
Read More: Mideast Wealth Funds Draw Greater US Scrutiny Over China Ties
Beijing has sought to strengthen ties with the Middle East while tensions escalated with the US and Europe. In November, China and Saudi Arabia signed a local-currency swap agreement worth around $7 billion. Saudi Aramco, which controls Prosperity7, has invested billions of dollars in China’s energy sector even as the kingdom tries to attract Chinese tech companies.
The selloff by Prosperity7 — a $1 billion venture capital fund owned by Aramco Ventures — is notable because of the White House’s campaign to contain China’s technological ascendancy. That endeavor is focused in particular on the semiconductors that will drive future innovations including artificial intelligence.
Still, Altman is working to raise billions of dollars for a new AI chip venture to compete with Nvidia Corp. and had traveled to the Middle East to fundraise for a project codenamed Tigris, Bloomberg News reported this month. It wasn’t clear whether Rain AI is connected to that effort and its technology is still at an early stage of development.
While the market for AI chips is dominated by Nvidia, Rain AI and Altman join dozens of startups from Asia to Europe looking to design chips that could prove cheaper and more energy efficient. The US has banned the sales to China of the highest-performance chips required to develop the next generation of AI services, hamstringing China’s ambitions to compete in the burgeoning sphere.
With the advent of OpenAI’s ChatGPT, there has been concern about how data centers creating large AI models are overly power hungry. Rain AI and other so-called in-memory chip startups aim to reconfigure how data is processed so as to reduce the need for transfers and cut power consumption.
While Altman is an early investor in Rain AI, it’s not clear whether he remains active in the company or how he views the technology today.
Read More: China and Saudi Arabia Sign Currency Swap Worth $7 Billion
--With assistance from Rachel Metz, Ben Bartenstein and Mackenzie Hawkins.
©2023 Bloomberg L.P. | Middle East Business & Economics |
WASHINGTON, Nov 14 (Reuters) - The U.S. Postal Service on Tuesday reported a $6.5 billion net loss for the 12 months ending Sept. 30 with revenue down 0.4% to $78.2 billion as first-class mail fell to the lowest volume since 1968.
The Postal Service said results were significantly affected by the impact of inflation on operating expenses. The agency has been aggressively hiking stamp prices and is in the middle of a 10-year restructuring plan announced in 2021 that aims to eliminate $160 billion in predicted losses over the next decade.
Postmaster General Louis DeJoy said USPS is "addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue generating strategies."
First-class mail volume fell 6.1% in 2023 to 46 million pieces and is down 53% since 2006, but revenue increased by $515 million because of higher stamp prices.
The net loss was also impacted by accounting for its underfunded retirements caused by actuarial revaluation and discount rate changes. USPS, which has 640,000 employees, said it had 28 million less work hours in the 2023 budget year but reported a 2.6% increase in employee compensation and benefits costs to $52.8 billion.
Total operating expenses were $85.4 billion for the year, an increase of $5.8 billion, or 7.3%. USPS said to preserve liquidity it did not make the full $5.1 billion in retirement plan payments due.
In April 2022, U.S. President Joe Biden signed legislation providing USPS with about $50 billion in financial relief over a decade.
Last month, USPS said it was seeking approval to raise the price of first-class stamps to 68 cents from 66 cents effective Jan. 21.
First-class mail, used by most people to send letters and pay bills, is the highest revenue-generating mail class, accounting for $24.5 billion, or 31% of USPS 2023 revenue.
Reporting by David Shepardson Editing by Chris Reese and Aurora Ellis
Our Standards: The Thomson Reuters Trust Principles. | Inflation |
Crypto Token Of Key DeFi Exchange Curve Finance Sinks After Exploit
The CRV token has shed about 15% since the problem emerged, trading at approximately 63 U.S. cents as of 9:30 a.m. in Singapore.
(Bloomberg) -- The native token of one of crypto’s top decentralized exchanges tumbled after the platform said it had been “exploited” as a result of a vulnerability in a programming language.
Curve Finance, like other decentralized finance projects in crypto, relies on different kinds of software built on top of blockchain technology. A glitch in a particular version of Vyper — a programming language similar to Python and widely used in DeFi applications — led to the exploit, Curve tweeted Sunday.
Curve Finance’s CRV token has shed about 15% since the problem emerged and was trading at approximately 63 US cents as of 9:30 a.m. in Singapore on Monday, according to data compiled by Bloomberg.
BlockSec, which provides security audit services for crypto software, estimated the hack had already led to more than $40 million in losses. Tarun Chitra, chief executive officer and founder of crypto risk modeling firm Gauntlet, estimated the exploiter made away with about $20 million of CRV and a version of Ether.
“We are assessing the situation and will update the community as things develop,” Curve said.
Curve Finance is the largest decentralized exchange after Uniswap, according to data provider and aggregator DeFiLlama. Curve’s founder Michael Egorov did not immediately respond to a request for comment.
CRV is used as collateral on a decentralized lending service known as Aave. Gauntlet’s Chitra said that so far there were no signs of “bad loans” on the Aave platform due to the slide in CRV. Aave’s token has declined about 4% in the past 24 hours, CoinGecko figures show.
Digital assets like Bitcoin and Ether wobbled a tad on concerns about wider potential knock-on effects but later stabilized. Bitcoin was little changed at about $29,450, while Ether was steady at $1,870.
Hackers pilfered a record $3.8 billion worth of crypto in 2022 and Curve Finance was among the long list of organizations impacted.
The pace of incidents has cooled but the risk of security breaches still clouds decentralized finance, or DeFi, where people rely on blockchain-based software known as smart contracts to undertake activities like trading or lending.
(Updates with latest CRV token performance in the third paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
After journalists revealed several years ago that former President Donald Trump was likely not as wealthy as he claimed, executives at his company scrambled to justify new allegedly inflated valuations, volleying around ideas like applying a "premium for presidential property" to certain assets, according to evidence presented during Trump's civil fraud trial in New York.
The internal deliberations began after Forbes magazine revealed in 2017 that Trump's Manhattan triplex, or three-story apartment, was about a third of the size he had long claimed — about 11,000 square feet, instead of more than 30,000 — and thus far less valuable.
When Trump began reflecting the true size of the property on financial statements, its value dropped by as much as $207 million, according to a Sept. 26 ruling in the case that found Trump and others liable for fraud. A trial on allegations related to the ruling is ongoing.
Allen Weisselberg, the former chief financial officer of the Trump Organization, testified on Tuesday that the difference was a proverbial drop in the bucket compared to Trump's net worth, claiming that "when you look at the value of that apartment relative to his net worth [it] is non-material." But in late 2017, Weisselberg was particularly interested in unique ideas for finding extra value from Trump properties, according to Friday testimony from another Trump Organization executive.
The executive, company vice president Patrick Birney, was shown a spreadsheet compiled that year in which the company proposed assessing a "premium for presidential" properties — calculating a series of re-valuations.
"15% Premium for Presidential winter residence," read one line under Mar-a-Lago. Another line, for Trump's Bedminster golf club, read, "15% premium for presidential summer residence." The line for the triplex listed, "25% Premium for Presidential Personal Residence."
All told, the nine new valuations would have added more than $144 million to Trump's estimated wealth. Ultimately, though, the idea was scrapped.
But the episode is core to a case in which the state of New York is trying to claw back at least $250 million in what it calls "ill-gotten gains." The state's argument works like this: Trump, two of his children and his company lied about how much properties were worth, and how much Trump was worth, in order to get favorable loan rates and insurance deals. By doing so, the state's argument goes, they benefited to the tune of hundreds of millions of dollars.
And, New York Attorney General Letitia James claimed in her 2022 lawsuit, those high valuations were also personally important to Trump.
"This public desire to inflate his net worth was well known amongst his children and employees," James' office wrote in its complaint, highlighting internal emails and deliberations about publications that assess and rank society's wealthiest.
Weisselberg acknowledged during his Tuesday testimony another directive he gave to former Trump Organization controller Jeffrey McConney that was intended to boost the value of properties: simply say some of them are worth 30% more. That "30% premium" was not disclosed in Trump statements of financial conditions given to banks.
On Wednesday, the court heard testimony from a former Deutsche Bank executive who was involved in assessing loans to Trump. He testified that the golf courses were "unusual" collateral for a loan that he "didn't know had value," since the potential buyers market for golf courses is particularly small.
Still, he testified, "I assumed that the representations of the value of the assets and liabilities were broadly accurate."
Weisselberg and McConney are also defendants in the case. Attorneys for the defense have argued in filings that the company was within its rights to add so-called "brand premiums" to its valuations.
On Friday, Birney testified about another moment, in 2018, when the public's understanding of Trump's wealth sent company executives scrambling.
A Bloomberg reporter emailed Weisselberg and two other executives about its "billionaire's index." The company was prepared to slightly reduce its estimate of Trump's wealth, from $2.9 billion to $2.8 billion.
The executives assigned Birney to research data that might combat Bloomberg's analysis.
Birney fired off a series of emails to the company's bankers and others — some he said may have been dictated by Weisselberg — seeking information related to the values of various properties.
Bloomberg ultimately published its decreased $2.8 billion estimate, but the importance of Birney's assignment is clear in his emails.
The matter, Birney wrote, was "urgent."
for more features. | Real Estate & Housing |
Britain’s biggest supermarkets are facing calls for the UK’s competition watchdog to investigate claims of profiteering amid the cost of living crisis, as industry figures show food price inflation soared to a record high in April.
With the rising cost of a weekly shop adding to pressure on households across the country, the Liberal Democrat leader, Ed Davey, called on the Competition and Markets Authority (CMA) to investigate whether any profiteering was taking place among supermarkets and food multinationals.
Government figures show food and drink prices rose by almost 20% in the year to March, the fastest annual rate since 1977. Analysis by the Lib Dems showed the cost of a typical weekly shop has now risen by nearly £12, or £604 in the space of a year.
Davey criticised supermarkets for raking in millions of pounds in profits while food inflation has soared. Large grocers have reported a drop in profits in recent weeks, but experts have said more could be done to help shoppers struggling with rising prices.
“We need to bring soaring food prices back under control and offer relief to families. That means cracking down on profiteering by food multinationals and the big supermarkets so customers get a fair deal,” he said.
The UK’s biggest supermarkets have made billions of pounds in profits between them over the past year, drawing sharp criticism from union leaders who say supermarket bosses are gouging customers to benefit from “greedflation” – when firms exploit high inflation to create excessive profits.
The Lib Dems said the CMA should investigate reports that food producers and supermarkets could be unfairly using their market power to inflate their markups and raise prices even further. A similar investigation into petrol prices was launched last year.
Last week, Sainsbury’s announced profits of £690m for the year to 4 March, beating expectations. Chief executive Simon Roberts said the retailer’s profit margins had slipped from 3.4% to 2.99% amid the impact of rising costs, while arguing it was “absolutely determined to battle inflation for our customers”.
Tesco recorded profits of £753m last year, half the level a year earlier. Ken Murphy, the Tesco chief executive, said the retailer was “robustly challenging every cost increase” with suppliers and had not passed on all its additional costs to shoppers.
The call for an investigation comes as figures from the British Retail Consortium show food price inflation soared to the highest level on industry records in April. However, analysts said costs may have peaked and should start to come back down over the coming months.
The latest snapshot from the retail industry body showed food price inflation accelerated to 15.7% in April, up from 15% in March.
The BRC said ready-meals became more expensive due to the knock-on effect from increased production and packaging costs. Coffee was more expensive due to the high cost of beans and major producers exporting less.
“Meanwhile, the price of butter and vegetable oils started to come down as retailers passed on cost savings from further up the supply chain,” said Helen Dickinson, the chief executive of the BRC.
Dickinson said grocery prices should start to reduce over the next few months as “the cut to wholesale prices and other cost pressures filter through”.
Overall shop price annual inflation decelerated to 8.8% last month, down slightly from 8.9% in March, helped by spring sales for clothing, footwear and furniture.
Dickinson said: “We should start to see food prices come down in the coming months as the cut to wholesale prices and other cost pressures filter through. In the meantime, retailers remain committed to helping their customers and keeping prices as low as possible.” | United Kingdom Business & Economics |
Sam Bankman-Fried's defense attorneys have argued that FTX's collapse is complicated and he didn't know everything.
They've argued his ex-friends who pleaded guilty just want a lighter sentence.
But all of Bankman-Fried's lieutenants and former friends have implicated him in the scheme to take customer funds.
During opening statements at Sam Bankman-Fried's trial, it quickly became clear that prosecutors and his defense attorneys had very different approaches.
Prosecutors told a simple story of straightforward theft. Bankman-Fried, they alleged, stole funds deposited by customers of his cryptocurrency exchange, FTX, by moving it to his hedge fund, Alameda Research, and took out loans for his own benefit.
Three of his close friends and associates — Caroline Ellison, Gary Wang, and Nishad Singh — had already pleaded guilty to conspiring with Bankman-Fried and would testify in the trial. The mechanics, involving financial concepts like cryptocurrency, highly leveraged loans, and market-makers, could be esoteric. But in a federal courthouse in downtown Manhattan, Assistant US Attorney Thane Rehn put it in plain terms.
"He spent the money on lavish houses for himself, his parents, and his friends," Rehn said. "He spent it so he could get introduced to celebrities. He spent millions more on political donations to gain influence in Washington. He poured money — other people's money — into his own investments to try to make himself even richer."
Bankman-Fried's attorneys say it was a little more complicated.
According to his lawyer Mark Cohen, the whole case is in the mechanics. Alameda took legitimate loans from FTX for legitimate business purposes, including for market-making purposes, he said. "Some things got overlooked" in the details at FTX, and Ellison made irresponsible decisions as the CEO of Alameda, Cohen said, leaving FTX exposed to disaster if cryptocurrency prices fell.
Crypto prices did fall in 2022, Cohen said, which led to the mess where customers couldn't withdraw money from their FTX accounts. But, he suggested, the losses could also be attributed to risky margin trading from customers. Very unfortunate? Sure. Criminal? Absolutely not, Cohen argued.
As the trial has gone on, it's become clear that Bankman-Fried's lawyers have a problem.
According to testimony from Bankman-Fried's former friends and business associates, the excuses about Alameda's market-making capabilities and spot margin trading are red herrings.
They just took the money, they've all said.
It's complicated, SBF's lawyers say
In their opening statement and cross-examination of witnesses, Bankman-Fried's lawyers have tried to complicate the story in two particular ways.
One, FTX allowed users to engage in spot margin trading. That allowed users to put up collateral in order to make particularly risky trades on the exchange. In certain circumstances where they were on the wrong side of a trade, they could lose money from their accounts.
Two, Bankman-Fried's lawyers have stressed Alameda's role as not just a trading firm on FTX, but as a market maker. Alameda had special privileges that allowed it to hold a negative balance on FTX — ultimately, negative $65 billion. Ellison, the now-former CEO of Alameda, testified that meant Alameda had an essentially unlimited line of credit from FTX, without any regard for whether the money belonged to customers.
To secure an acquittal in a criminal trial, defense attorneys need to convince just one juror to have reasonable doubt of their client's guilt. Prosecutors have accused Bankman-Fried of fraud, money laundering, and conspiracy, with a potential sentence of over a century. If any juror doubts even one count, it could help Bankman-Fried, who is 31 years old, spend less time in prison.
It's a high bar to clear, according to Sarah Krissoff, an attorney at Cozen O'Connor and former federal prosecutor in New York. But Bankman-Fried's attorneys may convince jurors that Bankman-Fried genuinely believed his actions were acceptable in the wild-west cryptocurrency industry.
"He thought this was okay in this world where crypto wasn't regulated, and so he had sort of no concept that this was a fraud," Krissoff said. "Now, the issue is that if all of the other insider witnesses have said, 'I knew this was wrong, and I pled guilty to crimes related to it.'"
Ellison, Singh, and Wang were all in Bankman-Fried's inner circle. Ellison led Alameda Research for much of 2021 and 2022. Wang co-founded Alameda and FTX with Bankman-Fried and led the latter as its chief technology officer. Singh knew Bankman-Fried since he was in high school and was the top developer at FTX, having intimate knowledge of its code. All of them lived together in a $35 million penthouse that Bankman-Fried purchased in the Bahamas with Alameda's funds. And all of them pleaded guilty to conspiring with Bankman-Fried to take customer money.
The challenge for Bankman-Fried's attorneys is to convince jurors that he didn't know about any wrongdoing. They've suggested that Bankman-Fried's former lieutenants and close friends are motivated to testify against him in hopes of getting lighter sentences for themselves.
"The question isn't so much necessarily, 'Is all of that wrong, or is that stuff criminal?'" said Paul Tuchmann, an attorney at Wiggin and Dana, and a former federal prosecutor in New York. "It's 'Did SBF know about it? Did he direct them to do it?'"
Everyone has pointed fingers at SBF
But while the defense attorneys have tried to obfuscate each witnesses' relationship with Bankman-Fried and his knowledge of wrongdoing, those witnesses have been forthright on the witness stand.
"The government has flipped everybody else in order to prosecute Sam Bankman-Fried," Krissoff said. "And by doing that, the fact that multiple other individuals have agreed 'I knew I was doing something wrong, I was committing a crime, I did something wrong, I knew it was illegal at the time' — it doesn't help his intent argument."
Bankman-Fried does have some points in his favor. In one memo shown to jurors, circulated in the fall of 2022 — before FTX and Alameda collapsed — Bankman-Fried lamented Ellison's skills running Alameda while he focused on FTX. He said the trading firm would have done better if he were at the wheel, which bolsters the defense attorneys' argument that Ellison, but not Bankman-Fried, is to blame.
It was Bankman-Fried, she testified, who directed her to spent "in the ballpark of $10 billion" in customer deposits to repay loans as Alameda was collapsing.
"He was the one who set up the systems that allowed Alameda to take the money, and he was the one who directed us to take customer money to repay our loans," she said.
Who told Ellison to come up with a bunch of alternative balance sheets to give a rosy portrait of Alameda's finances to lenders?
"Sam directed me to," Ellison testified.
Who was responsible for the margin trading system that Bankman-Fried's lawyers suggested was to blame for lost customer deposits?
"Sam directed a lot of these specifics of how the code should run and what it should be doing," Singh testified. "As an example, Sam designed all the rules for the margin system and the liquidation engine, and Gary implemented them."
Every witness who developed FTX's software also pointed out that the spot margin trading program — which actually did introduce the possibility of customers losing funds — was something that individual customers needed to opt into. And FTX often bragged that its liquidation engine was so well-designed that losing funds would be extremely rare. In order to lose those segregated funds, customers would need to have their collateral liquidated, for market makers to reject those positions, and for a separate insurance fund to be completely drained, according to Can Sun, FTX's former top lawyer.
"It has been FTX's consistent position that they have never depleted the insurance fund, we have never clawed back users, and we have no intention of clawing back users as well," Sun testified in the trial. "It was one of FTX's main marketing and selling points."
Bankman-Fried's lawyers will have a tough time changing the narrative in front of the jury. One way to do it would be if Bankman-Fried took the witness stand himself and testified about his version of the story.
Doing so would be incredibly risky, particularly because Bankman-Fried has given so many interviews about his experience already. If prosecutors catch him in a lie during cross-examination, his potential sentence could be much harsher.
"He's challenged here," said Krissoff, the former federal prosecutor. "He would be in a much better position if he had not spoken out publicly so much about this before and he could just craft his testimony fresh."
The trial is expected to wrap up in the next week or two, depending on whether or not Bankman-Fried decides to testify.
Read the original article on Business Insider | Crypto Trading & Speculation |
- Gita Gopinath, first deputy managing director of the International Monetary Fund, told CNBC that central bankers "should continue tightening and importantly [interest rates] should stay at a high level for a while."
- Both the U.S. Federal Reserve and European Central Bank have raised rates significantly over many months.
- "It is taking too long for inflation to come back to target that means that central banks will have to remain committed to fighting inflation, even if that means risking weaker growth or much more cooling in the labor market," Gopinath added.
Major central banks will have to keep interest rates high for much longer than some investors expect, Gita Gopinath, first deputy managing director of the International Monetary Fund, told CNBC.
"We also have to recognize that central banks have done quite a bit … But that said, we do think they should continue tightening and importantly they should stay at a high level for a while," Gopinath told CNBC's Annette Weisbach at the European Central Bank Forum in Sintra, Portugal.
"Now this is unlike, for instance, what several markets expect, which is that things are going to come down very quickly in terms of rates. I think they have to be on hold for much longer," she said.
The ECB began raising rates in July 2022 and has increased its main rate from -0.5% to 3.5% since then. The U.S. Federal Reserve, meanwhile, embarked on a hiking cycle in March 2022 but opted to pause this month, diverging from Europe.
A survey of U.S. economists in late May showed they had pushed back their expectations for the Fed to cut rates from the final quarter of this year to the first quarter of 2024.
However, for the IMF it is clear that reducing inflation needs to be the priority.
"It is taking too long for inflation to come back to target that means that central banks will have to remain committed to fighting Inflation even if that means risking weaker growth or much more cooling in the labor market," Gopinath said.
She described the current macroeconomic picture as "very uncertain."
This is a developing story and will be updated shortly. | Interest Rates |
"Bitcoin on Friday shot up to its highest level in about a year," reports CNN: The cryptocurrency rose above $31,400 a coin on Friday, its highest level since 2022, before paring back its gains. Bitcoin, the world's largest cryptocurrency by market capitalization, earlier this week traded above $30,000 for the first time since April, when the collapses of Silicon Valley Bank and Signature Bank sent investors in search of safer places to hold their cash.
Bitcoin is up by about 87% this year. Its most recent gains come after a wave of interest in crypto from financial giants. BlackRock last week applied to register a bitcoin spot exchange-traded fund, according to a US Securities and Exchange Commission filing. Crypto exchange EDX Markets, backed by firms such as Charles Schwab, Fidelity Digital Assets and Citadel, also launched its digital asset trading platform this week...
Despite its surge this year, bitcoin remains well below its all-time highs of more than $60,000 in 2021.
Bitcoin is up by about 87% this year. Its most recent gains come after a wave of interest in crypto from financial giants. BlackRock last week applied to register a bitcoin spot exchange-traded fund, according to a US Securities and Exchange Commission filing. Crypto exchange EDX Markets, backed by firms such as Charles Schwab, Fidelity Digital Assets and Citadel, also launched its digital asset trading platform this week...
Despite its surge this year, bitcoin remains well below its all-time highs of more than $60,000 in 2021. | Crypto Trading & Speculation |
LONDON, Nov 5 (Reuters) - The British government plans to legislate to mandate annual North Sea oil and gas licensing rounds, in a move Prime Minister Rishi Sunak says would create certainty for the industry during a transition to greener energy.
In July the government said more than 100 new oil and gas licences in the North Sea would be granted, and the new legislation on future rounds will be set out on Tuesday when King Charles outlines the government's legislative agenda at the start of a new parliamentary session.
Sunak has said the new licences are compliant with the government's environmental targets, and the requirement for new rounds each year will be conditional on domestic production being greener than imported alternatives.
"Domestic energy will play a crucial role in the transition to net zero," Sunak said, adding the legislation would provide "clarity and certainty".
Sunak is hoping to use the King's Speech on Tuesday to gain positive momentum ahead of a national election expected next year, with the opposition Labour party currently enjoying a double-digit lead in opinion polls.
He has sought to differentiate the government from Labour on green issues, delaying a ban on petrol cars and easing a transition away from gas boilers, while sticking with a legally binding target of hitting net zero by 2050.
Labour has said it will stop issuing new oil and gas licences in the North Sea, though it will respect any that are granted before any election.
Under the government's proposals, the North Sea Transition Authority (NSTA) will be required to invite applications for new production licences on an annual basis.
The licensing rounds would only go ahead if Britain is projected to import more oil and gas from other countries than it produces at home and if the production of UK gas is associated with lower emissions than importing liquefied natural gas (LNG), the government said.
Reporting by Alistair Smout; editing by David Evans
Our Standards: The Thomson Reuters Trust Principles. | Energy & Natural Resources |
Rishi Sunak’s change of government targets on immigration has prompted discontent among restless Conservative backbenchers, with some seeking a meeting with the home secretary, Suella Braverman.
It comes after the prime minister set a new goal of bringing migration down below the level he “inherited”, which was about 500,000 net arrivals a year when he took office.
Sunak redefined his target on immigration while in Japan for the G7 meeting after earlier in the week backing away from the Tories’ 2019 manifesto promise to reduce it below the level then of about 220,000.
Adam Holloway, the Conservative MP for Kent, said the party’s electoral prospects were “shattered” by the migration figures of recent years and said he would seek a meeting with Braverman.
Asked by the former Brexit party leader Nigel Farage on GB News why backbench MPs were not raising their voices, Holloway replied: “I would go further, it’s completely insane. Who would think that a Conservative government was presiding over effectively uncontrolled immigration?
“I know that at least a group of us are asking to see the home secretary next week, because it’s not just about the Tory party’s electoral prospects that are shattered by this,” he told Farage.
Another MP told the Guardian they expected it to be raised at next week’s meeting of the 1922 Committee of backbench MPs.
“It’s already popping up on the WhatsApp groups and people will be raising it with ministers, I’ll put it like that,” they said.
“Essentially, a lot of people voted Conservative on the back of a promise to bring numbers down below 200,000, and I don’t think they are going to be hugely pleased if we are now saying that we have a vague intention to bring it down to around half a million.
“That attitude of just shrugging one’s shoulders and saying, ‘Well, I have inherited it’ is just not going to cut it. Voters don’t see party pledges as sort of corporate statements.”
Asked by political journalists in Westminster on Friday if the prime minister had spoken to the home secretary before making his comments about immigration figures, a spokesperson for Sunak said they worked “incredibly closely” on immigration policy.
The No 10 spokesperson added that the prime minister would not “put a number” on his ambition to bring overall migration down but that he would “take stock” of official net migration figures due to be released this month.
Other Conservative backbenchers were waiting for the latest figures to be released after data in November showed net immigration was 500,000 for the year to June 2022.
Experts believe net immigration figures for this year could be between 600,000 and 1 million, prompting a backlash among Conservative backbenchers.
Speaking to broadcasters at the G7 summit in Hiroshima, Sunak said he was “crystal clear” he wanted to reduce immigration. But when pressed on how far, he said: “I’m not going to put a precise figure on it but I do want to bring them down.”
The development comes amid signs that Braverman had become frustrated, with the Times reporting that measures she had put forward on immigration had been blocked by cabinet colleagues.
In an intervention that was seen as a rebuff to cabinet colleagues calling for an easing of visa rules to boost economic growth, Braverman said in a speech that there was no good reason to bring in overseas workers to compensate for shortages in the haulage, butchering or farming industries.
“We need to get overall immigration numbers down. And we mustn’t forget how to do things for ourselves,” she told the recent National Conservatism conference in an address that was seen as part of a veiled future leadership bid.
Sunak has repeatedly said he wants to bring down levels of net immigration but also defended the system of legal migration to the UK. | United Kingdom Business & Economics |
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