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SACRAMENTO, Calif. -- A federal lawsuit alleges that health insurance giant Cigna used a computer algorithm to automatically reject hundreds of thousands of patient claims without examining them individually as required by California law.
The class-action lawsuit, filed Monday in federal court in Sacramento, says Cigna Corp. and Cigna Health and Life Insurance Co. rejected more than 300,000 payment claims in just two months last year.
The company used an algorithm called PXDX, shorthand for ''procedure-to-diagnosis," to identify whether claims met certain requirements, spending an average of just 1.2 seconds on each review, according to the lawsuit. Huge batches of claims were then sent on to doctors who signed off on the denials, the lawsuit said.
“Relying on the PXDX system, Cigna’s doctors instantly reject claims on medical grounds without ever opening patient files, leaving thousands of patients effectively without coverage and with unexpected bills,” according to the lawsuit.
Ultimately, Cigna conducted an “illegal scheme to systematically, wrongfully and automatically” deny members claims to avoid paying for medical necessary procedures, the lawsuit contends.
Connecticut-based Cigna has 18 million U.S. members, including more than 2 million in California.
The lawsuit was filed on behalf of two Cigna members in Placer and San Diego counties who were forced to pay for tests after Cigna denied their claims.
The lawsuit accuses Cigna of violating California's requirement that it conduct “thorough, fair, and objective” investigations of bills submitted for medical expenses. It seeks unspecified damages and a jury trial.
Cigna “utilizes the PXDX system because it knows it will not be held accountable for wrongful denials" because only a small fraction of policyholders appeal denied claims, according to the lawsuit.
In a statement, Cigna Healthcare said the lawsuit “appears highly questionable and seems to be based entirely on a poorly reported article that skewed the facts.”
The company says the process is used to speed up payments to physicians for common, relatively inexpensive procedures through an industry-standard review process similar to those used by other insurers for years.
“Cigna uses technology to verify that the codes on some of the most common, low-cost procedures are submitted correctly based on our publicly available coverage policies, and this is done to help expedite physician reimbursement,” the statement said. “The review takes place after patients have received treatment, so it does not result in any denials of care. If codes are submitted incorrectly, we provide clear guidance on resubmission and how to appeal.” | Banking & Finance |
Driving financial inclusion through digital payment methods is among the top priorities for the governments of Africa’s biggest tech ecosystems where cash is still king. Several initiatives launched by these governments have increased the number of banked citizens in their respective countries. In Egypt, for instance, platforms like Fawry and InstaPay — tapped into the apex bank’s policies to reduce cash dependencies — are responsible for the spread of e-wallets and cards in the North African country where 64% of Egyptians increased their adoption of digital payments solutions last year. The number of mobile phone wallets reached 46,500 per 100,000 people, according to a Mastercard report.
While e-wallets and cards dominate the digital payments landscape, Egypt’s apex bank is keen to promote another method: contactless payments, after recently issuing regulations governing payment card tokenization on mobile apps. However, with services such as Apple Pay, Google Pay and Samsung Pay — which allow customers to make contactless payments with digital cards in mobile wallets via NFC (near-field communication) tech — mostly absent in Africa, platforms like Flash provide an alternative through QR codes.
The Egyptian fintech, which provides cashless payment solutions for consumers and businesses through a scan-and-pay service, has raised $6 million in seed funding led by Addition, the venture capital firm headed by former Tiger Global executive Lee Fixel. Flourish Ventures and other strategic angel investors participated in the round, which will help the startup accelerate product development and customer and business acquisition in Egypt.
Flash, off the back of obtaining approval from the Central Bank of Egypt to operate as a technical payment aggregator, allows customers to purchase with their phones by adding any existing bank card or digital wallet to the app and scanning a QR code that is presented by a business, in-store or on-delivery. This way, businesses can accept payments without needing the tasking technical integration typically encountered with expensive NFC-enabled point-of-sale (POS) systems.
“We’re eliminating the need for cash or carrying cards for our consumers and the POS machine on the merchant side,” said Erik Gordon, Flash co-founder and CEO, in an interview with TechCrunch. “With QR codes, businesses don’t have to worry about integration, setup and maintenance fees and it’s low tech, so anyone with a camera on their phone can pay that way.”
The inefficiencies that exist in a very cash-based society such as Egypt are something Gordon noticed during his time at Uber as head of marketplace for the North African country and later the MENA region. According to the chief executive, 90% of Uber’s rides were paid in cash. When collected from the drivers at the end of each day, this turned into piles of money being counted in warehouses, which led to fraud and theft.
Finding ways to stop this leakage, which hurt consumers and businesses in Uber’s ecosystem of products, was a massive headache for his team. While they came up with stopgaps, Gordon, alongside co-founder Sherine Kabesh (another Uber alumnus who worked as the ride-hailing giant’s head of marketing in Egypt), decided to take on a new challenge to build a platform they thought addressed the issues faced at Uber and was also in alignment with Egypt’s financial inclusion strategy.
The fintech, founded in 2021, provides its services in partnership with the Egyptian bank Banque Misr. In a statement, Kabesh said Flash securing license approval and bank partnership “strengthens our commitment to developing the cashless ecosystem, introducing new products, and diversifying our digital payment portfolio,” which includes automated bill payments and behavioral insights into spending, for instance. Flash has several competitors across its slew of products, including Telda, Khazna and Paymob.
E-commerce platforms and businesses whose payment methods include cash on delivery — pharmacies, restaurants, fast-food chains and grocery shops — are Flash’s main customers. Around 80% of goods purchased online in Egypt are paid COD, per a report; among other factors driving this, consumers prefer to receive the product before paying. The problem, however, is that many businesses do not provide a POS option on delivery. As such, “Flash on Delivery” allows these businesses to present a QR code to customers, which can be scanned at the point of collection. While the executives declined to reveal how many merchants (and end customers) are using its platform, they say the two-year-old fintech aims to serve over 100 businesses in the next 12 months. Some of its current business customers include Homzmart and Rabbit Mart.
Meanwhile, payments made on delivery or in store are settled the following day, which, according to Gordon, “is the best in the market.” The chief executive officer says in addition to being cheaper than other forms of digital payments, the next-day settlement gives Flash an advantage over current digital payments products, whose settlement times take longer (up to a week in most cases), and global payment methods, including Apple Pay and Google Pay (settlement could take up to five days) should they enter the Egyptian payments landscape in the future.
“The cost of the business will be less with Flash compared to something with Apple Pay because Apple, the card companies and banks are all taking a slice versus the kind of direction Egypt is going, which is similar to what’s happened in India where QR codes, cheaper for businesses, have proliferated and become the standard,” said Gordon, further stating the pros of QR codes versus NFC tech. “The central bank is also opening this instant payment network up to third parties, which would also enable instant settlement. So longer term, I think we can also perform instant settlement and lower transaction costs.”
That’s not to say QR code technology doesn’t come with cons, some of which include tampering with codes or placing fraudulent codes over real ones to divert payments. So how does Flash avoid this? Typically, businesses on the platform are onboarded in compliance with regulations set by the CBE and Banque Misr, allowing Flash to determine if they’re legit. Afterward, only QR codes generated by Flash (for businesses) will work with the Flash app (for customers), said Gordon. “Any money paid to a QR code can only end up in the account of that business. Flash never touches the money; it goes straight from our partner bank to the business’ bank account,” the CEO remarked. “So if someone stole a QR code, it wouldn’t make sense because any money paid to it could only go to the business.”
Andrew Miskiewicz, an investor at Addition, noting why the New York-headquartered firm backed Flash, said the fintech is “transforming the payments landscape in Egypt, simplifying the complex transactional process for consumers and businesses with a safe and easy-to-use application.” The fintech, which claims to be processing 50,000 transactions, is approaching over 10 million Egyptian pounds (~$324,000) in cumulative transaction value. At the same time, its revenue, made from charging businesses a processing fee, is growing 30% month-on-month, Gordon said in the interview. | Africa Business & Economics |
- Walmart beat quarterly earnings and revenue expectations.
- The big-box retailer also raised its full-year guidance.
- Its grocery business helped to offset weaker sales of clothing and electronics.
Walmart raised its full-year forecast Thursday, as fiscal first-quarter sales rose nearly 8% and its large grocery business helped offset weaker sales of clothing and electronics.
Shares of the company rose about 3% in premarket trading, as the company beat Wall Street's earnings and revenue expectations.
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Walmart lifted its guidance to reflect the earnings beat. It said it now anticipates consolidated net sales will rise about 3.5% in the fiscal year. It expects adjusted earnings per share for the full year will be between $6.10 and $6.20, roughly in line with analysts' expectations, according to Refinitiv.
Chief Financial Officer John David Rainey said consumers are trading down to smaller pack sizes, buying fewer discretionary items and waiting for promotions before making pricey purchases like TVs.
Yet shoppers are still spending, he added.
"We're seeing in these economic indicators that there is some strain on the consumer, but the resilience has surprised us," he told CNBC. "And I think that's in part probably because balance sheets are much stronger than they were pre-pandemic, even at this point."
Here's what Walmart reported for the three-month period that ended April 30, according to Refinitiv consensus estimates:
- Earnings per share: $1.47 adjusted vs. $1.32 expected
- Revenue: $152.30 billion vs. $148.76 billion expected
Walmart's quarterly results provided the latest snapshot of the health of the American consumer. Earlier this week, Home Depot and Target said that shoppers were buying fewer big-ticket and discretionary items as they paid more for necessities.
Walmart's sales reflected that shift toward groceries and essentials, too, Rainey said. The big-box retailer is well suited for that change as the nation's largest grocer.
Nearly 60% of its annual U.S. sales come from groceries. The mix, however, weighed on the company's first-quarter gross margin rate, which declined year over year, since food has slimmer margins than other merchandise. Sales of general merchandise in the U.S. declined mid single-digits, while sales of food and consumables increased low double-digits, Rainey said on an investor call.
Net income for the big-box retailer fell to $1.67 billion, or 62 cents per share, compared with $2.05 billion, or 74 cents per share, a year earlier.
Total revenue rose to $152.30 billion from $141.57 billion in the year-ago period, beating Wall Street's expectations.
Same-store sales for Walmart U.S. climbed 7.4%, excluding fuel. The key industry metric includes sales from stores and clubs open for at least a year. E-commerce sales jumped 27% year over year for Walmart U.S.
At Sam's Club, same-store sales rose 7% year over year excluding fuel, driven by grocery sales. Its e-commerce sales grew 19%, led by curbside pickup.
Despite the sales growth, Rainey said spending trends weakened as the quarter went on, with the sharpest drop after February. He attributed that, in part, to the end of pandemic-related emergency funding from the Supplemental Nutrition Assistance Program and a decline in tax refund amounts.
On a call with investors, CEO Doug McMillon said persistently higher prices on everyday items like food and paper goods continue to squeeze families' budgets, leaving less money to spend in other ways.
He said that stubborn inflation "is one of the key factors creating uncertainty for us in the back half of the year."
Walmart said for the fiscal second quarter, it expects consolidated net sales to increase about 4% and adjusted earnings per share to range between $1.63 and $1.68. That is lower than the $1.71 per share that Wall Street expected, according to Refinitiv consensus estimates.
Shares of Walmart closed Wednesday at $149.53, bringing its market value to $403.33 billion. Its stock has climbed nearly 6% year to date. The shares have trailed the S&P 500′s roughly 8% gain but are ahead of the retail-focused XRT's nearly 2% rise during the same period.
Correction: Walmart's shares have trailed the S&P 500′s roughly 8% gain but are ahead of the retail-focused XRT's nearly 2% rise during the same period. An earlier version misstated their status. | Consumer & Retail |
The Department for Work and Pensions (DWP) has made it clear there will be no changes to the existing eligibility criteria for Personal Independence Payment (PIP), following reports that the Treasury may have been considering making it a means-tested benefit in order ro reduce annual welfare costs.
Minister for Disabled People, Health and Work, Tom Pursglove MP, confirmed there are no plans to change the disability benefit during a debate around the PIP assessments process on Monday after Labour MP Vicky Foxcroft said the reports were causing “alarm among disabled people”. She said: “In recent weeks, it has also been reported that, in a bid to reduce the welfare bill, the Treasury may consider cutting or means-testing PIP. Unsurprisingly, that has caused further alarm among disabled people and those who work with and represent them.”
However, the DWP Minister responded: “The shadow Minister (Vicky Foxcroft), touched on means-testing for the Personal Independence Payment, or changes to eligibility for PIP. I can confirm that there are no plans for that. I want to be very clear about that.”
The debate addressed concerns around the current PIP assessment process and the lack of consistency or claimants. As part of the proposed Health Transformation Programme, PIP assessments will be the only health assessment claimants will need to attend.
Earlier this year, the UK Government published the Health and Disability White Paper, which lays out proposed reforms to the benefits system. As part of its shake-up, the DWP announced plans to end the Work Capability Assessments to encourage people who need to claim benefits back into work.
Under the new proposals, instead of undergoing a WCA, the PIP assessment would be the only one used to decide whether a person will receive the new Universal Credit health element.
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It’s important to keep in mind that these planned changes in the White Paper are proposals and will be debated in Parliament before coming into force in 2026-27. WCAs currently provide decisions on whether a person is fit for work for the purpose of their Employment Support Allowance (ESA) or Universal Credit allowance.
To keep up to date with the latest PIP news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here. | United Kingdom Business & Economics |
Corruption investigators examining potential criminal wrongdoing in the awarding of multimillion-pound contracts during the Covid crisis have interviewed Matt Hancock and Michael Gove as witnesses.
The National Crime Agency (NCA) is investigating PPE Medpro, a company that won £200m in contracts and with which the Conservative peer Michelle Mone and her husband, Douglas Barrowman, were involved.
Hancock, the former health secretary, and Gove, the former Cabinet Office minister, were interviewed as NCA investigators try to understand how and why contracts were awarded and whether any criminal laws were broken.
Investigators do not suspect either senior politician of wrongdoing nor is there any suggestion of such.
The two and a half year-long criminal investigation is been overseen by the NCA’s international corruption unit.
Earlier this month, Mone acknowledged for the first time she was involved with the company that was awarded government PPE contracts worth £200m during the pandemic.
Mone’s husband has also acknowledged that he was involved in PPE Medpro.
A representative of Barrowman told the Guardian that the Isle of Man-based businessman was an investor in PPE Medpro, and chaired the operation to supply personal protective equipment.
It followed repeated denials of any involvement. Mone, Barrowman and a spokesperson for PPE Medpro have not commented on the NCA investigation.
The Department of Health and Social Care (DHSC) is taking legal action for the full return of the £122m it paid for millions of unused surgical gowns that PPE Medpro supplied under one of its contracts, with the government claiming they were unsafe for use in the NHS. The company is defending the claim.
The contracts were processed through the DHSC’s “VIP” high priority lane, which fast-tracked offers of PPE from companies with connections to the Conservative party or government.
The DHSC granted PPE Medpro two contracts in May and June 2020, near the start of the pandemic, to supply millions of face masks and sterile surgical gowns for a total of £203m.
The Guardian has previously revealed that Mone made the first approach to the then Cabinet Office ministers Michael Gove and Theodore Agnew, telling them she could source PPE through “my team in Hong Kong”.
Documents indicate tens of millions of pounds of PPE Medpro’s profits were later transferred to a secret offshore trust of which Mone and her adult children were the beneficiaries.
Last November, the Guardian reported that leaked HSBC bank documents indicated Barrowman was paid at least £65m from PPE Medpro’s profits then transferred £29m into a trust for Mone and her three adult children.
In a statement, the NCA said: “The NCA can confirm its International Corruption Unit opened an investigation in May 2021 into suspected criminal offences committed in the procurement of PPE contracts by PPE Medpro.”
A spokesperson for the NCA declined to comment on the formal witness interviews with Gove and Hancock, saying the agency did not comment on ongoing investigations.
In April 2022, the NCA investigation led to searches on several properties in the Isle of Man and London.
They included the Isle of Man office building where PPE Medpro is registered and the mansion where Mone lives with Barrowman.
The Isle of Man constabulary confirmed that search warrants were executed at four addresses on the island on Wednesday “in support of an ongoing NCA investigation”. There were no arrests.
The NCA witness interviews with Hancock and Gove was first reported by the Sunday Times. Both have been approached for comment. | United Kingdom Business & Economics |
Five car parks in Worcester are to go cashless from July following problems last year at 14 sites.
Worcester council says this is "in response to a decline in cash payments and an increase in app usage".
But Age UK has warned that the 2.4 million people aged 65 and over in the UK, who still rely on cash, risk being marginalised by such moves.
Councils using the third party apps say it saves money on machine maintenance and is more secure and convenient.
In Worcester the car parks affected are Clare Street, Tallow Hill, Tybridge Street, Commandery Road and The Moors.
However Jane Mowat, a driver at Tallow Hill, said: " I wouldn't even know how to download the app, so I would probably just go home."
And Age UK states "39% of over 65s don't feel confident using a smartphone" and struggle to deal with problems such as poor network connectivity.
There are an estimated 30 parking apps in use in the UK. To pay, a user must find the right app to download, set up a payment account and find the right location for the car park.
Another driver, Ian James, said: "I've just used the app - [but an] error message occurred. We've gone through this three times so I'm forced to go and find another car park.
"Technology, when it works it's great, but when it doesn't, there's no way you can work around it."
In Herefordshire and Worcester, Age UK says "we're hearing from more and more people who are finding that their usual car parks are becoming app-only and that's actually putting them off going out because they know they haven't got the skills to deal with that".
'Harder to make living'
As a result, high-street retailers fear the problem is reducing the number of people going shopping.
Dee Archer, owner of Snips hair salon in Stratford-upon-Avon, said: "Not everybody has a phone that they can put the app on and my older clients are struggling with this. It is going to drive people out of the town centre.
"I've owned my business for 30 years and it's becoming harder and harder in Stratford to make a living".
Warwickshire council say "there are no plans to remove the option for cash payments at on-street parking sites. We want parking to remain stress free for everyone".
In Birmingham however, journalist Peter Paphides' elderly father died weeks after struggling to pay for parking in April 2022 left him anxious about being fined.
Mr Paphides was left to deal with the parking fine, a process which took days to resolve as PaybyPhone required a death certificate, which he was still waiting for himself.
He says digital exclusion "has the effect of making old people, who already have a tendency to feel invisible, feel like the world is not really for them anymore".
It comes in the wake of the continuing closure of bank branches causing similar problems and a recent Bank of England warning that cash is becoming "less usable" as more and more shops focus on only digital payment methods. | Consumer & Retail |
New figures shared with ITV News have shown that people who receive housing benefits can afford just 4% of the homes in the private rental sector. ITV News Investigations Correspondent Daniel Hewitt has the latest
Millions of private renters on low incomes are being almost totally priced out of the housing market, as new data shows just 4% of homes are affordable.
Research by Crisis and Zoopla shared exclusively with ITV News lays bare the near collapse of rent affordability for households receiving housing benefit to help pay their rent.
In some parts of the England, there are no affordable properties at all with the cost of rent outstripping incomes.
Around 1.9 million private renters in England receive housing benefit to help pay their rent. That’s more than one in three private renters.
New data shows they can now afford just 4% of homes in the private rental market, down by 66% from 12% last April.
It’s not difficult to work out why: private rents have skyrocketed while housing benefit isn’t keeping up.
Hollie Tyrrell is a doting, single mother to her one-year-old daughter Elsie. But motherhood hasn't been how she imagined it would be. Hollie is homeless because, despite receiving housing benefits, she cannot afford to privately rent in her home borough of Thanet, Kent. Hollie and Elsie sofa surf - currently they're staying on Hollie’s mother’s sofa.
"I feel like I'm not doing the job I'm meant to be doing as a parent, knowing that no matter where we stay, she's on the sofa.
“Normally, two weeks is about three to four properties, depending on who I’m with and how my daughter is reacting. If she’s not reacting well I’ll go to somewhere where she feels comfortable,” Ms Tyrrell says.
'In two weeks, there's about three to four properties': Young mum Holly Tyrrell has been moving from house to house with her baby due to steep rent prices
Local Housing Allowance rates - which set how much government help households receive to pay their rent - have been frozen since 2020, and therefore do not reflect the cost of rent today.
It means the gap between what’s coming in and what needs to go out simply doesn’t add up.
The data shows the shortfalls between housing benefit received and how much rent is actually costing have nearly doubled in a year.
For a one-bed property the shortfall is £1,300 per year, for a two-bed it’s £1,900 per year and for a three-bed home it is £2,900.
These are averages. In some areas the shortfalls are much higher.
Back to the 4% figure though, because in some areas fewer than 1% of properties are affordable, and it’s not just affluent areas of London.
In Barnsley just 0.9% of homes are affordable to a household receiving housing benefit. In Mansfield it is 0.8%; in Wigan it is 0.5%.
In the Ribble Valley in Lancashire, analysis shows 0% of homes are affordable.
Of the top 32 areas of England that are least affordable to rent for households receiving housing benefit, 28 have a Conservative MP and four have a Labour MP.
A lot is said about rising rent prices in London, but other cities have experienced big jumps in the last year.
In Manchester rents are up 14.4%, Nottingham and Birmingham 10.9%, Bristol 10.5% and Sheffield 10%.
Matt Downie, CEO of homelessness charity Crisis, calls for an injection of funding into the housing benefits system
This is all pointing towards a rise in homelessness. An ITV News investigation has found more people in full time work are becoming homeless, unable to find anywhere to live.
During 2022, 25% (72,790) of all households seeking homelessness support were in full or part-time employment.
Laurie and her husband Fred were looking forward to a quiet life in retirement but instead are facing homelessness after they received a no-fault eviction notice from their landlord of 12 years.
Due to soaring rents in Coventry the couple have been placed in temporary accommodation by the council.
"I feel ashamed, I feel dirty although we have tried to clean it as much as we can.
"The monotony because you don’t have your own stuff around you and you can't do what you want to do. It's hard to get out because I've got my scooter and we can't park outside … I can't explain how bad it makes you feel," Laurie says.
'I feel ashamed': Laurie has been struggling to find good quality, affordable accommodation
A government spokesperson said: “We’re helping ease the pressure of rising rents by maintaining 2020’s £1 billion boost to Local Housing Allowance rates, giving more than a million people an extra £600 a year on average.
“We are set to spend over £30 billion on housing support this year, on top of significant cost of living support worth an average £3,300 per household.
“Building more affordable homes is key, which is why we’re investing £11.5 billion to deliver more social and affordable rented homes across the country.”
Coventry City Council said: “These issues are not just present in Coventry but are national issues regarding housing supply nationally, there are a number of factors contributing to this housing crisis including Local Housing Allowance being frozen nationally since 2020 putting an incredible pressure on families seeking private sector accommodation, the continuation of ‘no fault’ S21 evictions despite the government giving a commitment to address this area, as well as a general underinvestment in housing stock over many years.
“We have every sympathy for the Clark family being made homeless following the serving of a S21 ‘no fault’ notice by their landlord and the challenges they now face in moving to more settled accommodation which are as a result of the factors described above.
“Where issues are raised with the City Council in respect of temporary accommodation we take action and respond. In respect of this family one of our visiting officers has visited several times and today, 27 June 2023. The Clark family have previously been in contact with the Council regarding issues in relation to the property.
"Subsequently we made contact with the landlord who has undertaken a range of repairs including new back door, shower repairs, some redecoration and supplied a new mattress. We have had no reports of any infestations at the property.
“An Occupational Therapist has visited the family at the property earlier this month to ensure its suitability, however we recognise that the current property is not ideal and we would support the family to move to alternative temporary accommodation should this become available and our Occupational Therapist will also view any longer term properties with the Clark family to ensure suitability.”
If you would like to get in touch with the team about this story or other housing issues, please email [email protected].
Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know... | Real Estate & Housing |
A charity that helps victims of sexual exploitation has refused £10,000 originally raised to help Eleanor Williams, convicted this week of lying about being trafficked by an Asian grooming gang and making false rape claims.Maggie Oliver said it would be “unethical” for her charity to accept any of the money. Oliver is a former Greater Manchester police (GMP) detective who rose to prominence as a whistleblower on sexual exploitation in Rochdale.The Maggie Oliver Foundation was one of two charities which were to split £20,000 crowdfunded for Williams if she did not use it to bring her alleged abusers to justice.Williams’s case came to public attention in May 2020 when a Facebook post she made recounting the allegations went viral, along with graphic photographs of injuries she said she had suffered in the attacks. The post, from May 2020, was liked by more than 100,000 people and shared by a number of public figures, including Oliver. She said she never spoke directly to Williams but introduced her to lawyers at the Centre for Women’s Justice.“Ultimately she decided she wanted to stick with her original legal representation. Since then, I’ve had no contact with the family,” said Oliver. “We are not accepting any money from [the crowdfunder] because I just don’t think it would be ethical.”Maggie Oliver, the founder of the Maggie Oliver Foundation, which supports victims and survivors of sexual abuse. Photograph: Ian West/PAShe added: “I shared Ellie’s original Facebook post because I see cases like hers a lot. Not injuries like that, but victims who are being pushed away from the system and are desperate to be heard.”More than 1,000 people had donated £22,129 to “get justice for Ellie” via a JustGiving page. After JustGiving subtracted its fees, the final amount stood at £21,104.Shane Yerrell, a Conservative councillor from Essex, said he started the crowdfunder in good faith because Williams’s story “filled me with sadness to think that a young girl could have been through such a terrible ordeal”.When he discovered that Williams had been charged with perverting the course of justice and lying about various men – including a teenager from Barrow-in-Furness, Jordan Trengove, who spent 10 weeks in prison on remand – he decided to put caveats on the money raised.Before handing over the final sum to Williams’s mother, Yerrell drew up a contract which said the Williams family could spend £1,204 “on counselling or holistic therapy treatment” for her. The remaining £20,000 could only be spent on legal advice to help Williams bring her alleged abusers to justice.If no prosecution was brought by 23 July 2023, the money was supposed to be split between the Maggie Oliver Foundation and Women’s Community Matters, a charity that helps victims of sexual and domestic violence in Barrow.There is some controversy over whether Women’s Community Matters should get the money, because Williams’s grandmother, Anne Burns, is one of the charity’s trustees. Burns is deputy leader of the Labour group on Cumbria county council and cabinet member for children’s services.Trengove said he would like the money to go to victims of miscarriages of justice. “If it was my choice, I would like to give it to a charity for people who are falsely accused, or to give counselling for people who went through an ordeal like me. I didn’t get any help,” he said.Allison Johnston, Williams’s mother, told the Guardian: “I still have all of the money. I understand that Shane is currently speaking to WCM and a decision is pending awaiting confirmation from the charity. When that has happened, a plan will be made with Shane to move forward with the donation.”Yerrell said he was “deeply sad” about the verdicts. “Innocent men have had their lives turned upside down and their reputations destroyed,” he said.Oliver was a key character in Three Girls, a BBC dramatisation of the Rochdale grooming case. During her 13-week trial, the prosecution said Williams concocted lies about an Asian grooming gang after watching Three Girls, as well as the Liam Neeson film Taken, which tells the story of a girl kidnapped by sex traffickers.Williams’s case is extremely unusual, stressed Oliver: “I would still believe a victim if they came forward. It is then the job of the police to investigate. In this case, Ellie has been found guilty by a jury which heard all the evidence after a thorough police investigation. I wish every victim of abuse had their claims so thoroughly investigated.”Women’s Community Matters did not respond to a request for comment.A JustGiving spokesperson said: “We operate and enforce very strict fraud policies, which is why JustGiving is a trusted place for millions of people to raise and donate money for the causes they care about.“This page closed in 2020 and we do not hold the funds in question. We are supporting the page owner and understand he is trying to recoup the funds and distribute them to an appropriate registered charity.” | Nonprofit, Charities, & Fundraising |
Reaching $1.5 million in retirement savings is doable. While this is a lot of money, it's well within reach for most incomes. As long as you start saving early – ideally in your 20's – and take advantage of market returns, you can hit $1.5 million in retirement savings with even modest contributions to your retirement account. The key question is, will that be enough? Is $1.5 million enough to retire at 65, or should you plan on accelerating your savings or even delaying retirement? Here are five things to consider when asking that question.
A financial advisor can help you determine when you'll have enough money to retire. Find an advisor today.
How Much Retirement Income Will You Need?
A $1.5 million nest egg can be more than enough to retire on, but it depends entirely on how much money you plan on spending. The more income you expect to replace, the more you will need to draw down from your retirement account and the larger it will have to be.
As a general rule, financial experts suggest that you should plan to plan to draw down between 60% and 80% of your pre-retirement income. So, for example, say you make $100,000 per year. In order to keep your current standard of living, you should plan for a retirement account that can generate between $60,000 and $80,000 worth of income per year for the rest of your life.
This helps you decide how much you will need to hold in your portfolio. For example, say you plan on retiring at 65. Let's also assume you will beat the odds and live for another 40 years. After all, it's better to overestimate than underestimate when estimating your life expectancy. As a result, you will need a portfolio that can generate $80,000 per year for 40 years.
Now, this doesn't mean you need $3.2 million in cash on hand. Your portfolio isn't static, it will continue to grow over time. Instead, to live on $80,000 per year in retirement, you will need about $1.8 million saved up by age 65. From there, growth and Social Security will fill in the gaps. On the other hand, if you trim that down to $60,000 per year, you would only need $1.08 million in your portfolio.
Either way, if we're asking "will $1.5 million be enough to retire on," the answer is … it depends. Yes, this can be plenty of money for a comfortable retirement, but it depends entirely on how much you will withdraw.
What Are Your Expenses?
When thinking about retirement spending, it's important to ask exactly what kind of lifestyle you imagine having. How will you spend your money? Where will you spend your money? What needs will you have and what kind of flexibility do you want? All of this will determine how much you need to withdraw each year. A few important issues to consider include:
Housing
Will you own your house or continue to rent it? Renters will need to anticipate those monthly payments indefinitely. Owners who have paid off their mortgage don't have much in the way of regular payments, but they'll need to set aside money for maintenance and upkeep. After all, you may not have to send the landlord a check, but boilers are still expensive to replace.
Travel and Entertainment
What kind of luxuries do you want to enjoy? Do you want to spend your retirement traveling or are you happy just going to the movies on a Saturday night? The more money you want to spend on entertainment, travel and other luxuries in your retirement, the more money you will need to have saved.
Location and Taxes
Where you live matters. Living in a city might give you access to many of the things you love, but it will come with a far higher cost of living. Some states are much more tax-friendly than others, but that can come at the cost of not living where you want. Also, be careful when it comes to making tax-based decisions. When a state claims to have low taxes, that often means it has no income tax and makes the difference up through sales taxes. Depending on how you structured your portfolio, this might actually increase your cost of living.
Look at how you want to balance your lifestyle and costs, and consider whether location can help with that.
Healthcare
The closer you get to retirement, the more seriously you should start taking your health. In part this is because healthcare will be one of your biggest long-term expenses, and if those costs are going to accelerate early it's best to know now. Make sure that you have coverage for specific needs like dental insurance and potential long-term care insurance, and account for that in your budget.
When Will You Take Social Security?
You can begin taking Social Security as early as age 62 or as late as age 70, and that choice makes a big difference. As of 2023, if you begin collecting Social Security at age 62 you can receive up to $2,572 in monthly benefits for the rest of your retirement. If you wait until age 70, you can receive up to $4,555. At the full retirement age (66 or 67, depending on when you were born), you can receive up to $3,627.
It's important to remember that this isn't guaranteed. Social Security is built to pay higher-income households more money, so the more you earned during your working life the more money you can receive from Social Security in retirement. But the basic structure doesn't change: the longer you wait, the more money you will get from this program.
If you retire at 65, but can wait five more years before collecting Social Security, you can nearly double your benefits. Calculate what your benefits will be based on your income and your retirement age and make sure to include that in your planning.
Do You Have Significant Assets?
One of the important elements of retirement planning is, essentially, backup planning.
To put this another way, what happens if the money in your account is not enough? What will you do if you're celebrating your 90th birthday and your accounts have all begun to dip perilously low?
This is an important question because it tells you how much security you need to build into your retirement account. For households that have significant assets, these can serve as the backup plan. Selling your home or valuable keepsakes may be a bad, if not heartbreaking, option, but they can serve as a backstop against late-age poverty.
On the other hand, if you do not have significant assets to fall back on, you should account for that in your retirement planning. In that case, you may want to grow your account more before retiring.
How Is Your Portfolio Growth Structured?
Finally, it's important to consider how your portfolio is structured. There are two primary issues to consider when evaluating your portfolio. First, based on your investments, what kind of growth and risk do you expect from your portfolio? This informs your approach because the more growth your portfolio generates, the less principal it will need going into retirement. But the more risk your portfolio is exposed to, the more cash you will want to keep on hand or reinvest.
Second, do you plan to live off investment income or capital gains?
Capital gains are the profits that come from selling an asset like a stock. Selling assets with capital gains will generate retirement income for you, but it may mean dipping into your principal and drawing down a portion of your holdings.
On the other hand, some assets automatically generate income or interest payments. For example, bonds pay you an interest rate, income stocks pay dividends and annuities are contracts that pay a fixed amount every year. The key thing about these assets is that they're durable. You don't need to sell them in order to generate that money.
The more money you earn off of income-generating assets, the less you will draw down on your portfolio's overall principal. For example, say you manage to build a portfolio that generates $80,000 per year in combined dividend, interest and annuity payments. In that case, the principal is of secondary importance. Whatever the amount, this is enough to retire on because you can live off those assets indefinitely.
It's harder to build a strong collection of income assets. If you can do it, though, you can reach the retirement dream: a self-sustaining portfolio.
Bottom Line
You can certainly retire comfortably at age 65 on a $1.5 million, but your ability to do so relies on how you want to live in retirement, how much you plan to spend, when you plan to claim Social Security and how your portfolio is structured. Before making any big decisions, make sure to review your financial plan in detail.
Retirement Planning Tips
Social Security plays a significant role in most retirement plans and getting an accurate estimate of how much you can expect to collect can help you make more informed decisions about your future. SmartAsset's Social Security Calculator can help you estimate your future benefits based on how much you earn and when you plan to retire.
Good financial advice can make all the difference in retirement planning and finding a financial advisor doesn't have to be difficult. 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.
Photo credit: ©iStock.com/PeopleImages, ©iStock.com/KenTannenbaum, ©iStock.com/Chaay_Tee | Personal Finance & Financial Education |
Tesco stores have run out of turnips after the Government advised Brits to stock up on the root vegetable amid ongoing shortages of lettuce, cucumber and other everyday greens.
Environment Secretary Therese Coffey suggested turnips as a suitable alternative while other items - including tomatoes and peppers - remain in short supply due to poor weather in Spain and Morocco.
But just hours after the MP offered her advice in the House of Commons, turnips were out of stock on Tesco's website, with the supermarket instead suggesting swedes.
Tesco shopper Louis Henwood said he was met with a message saying: 'This product is currently out of stock'.
Other supermarkets such as Morrisons and Asda also do not provide turnips when searched - instead offering up swedes as well.
Meanwhile a tray for turnips in a Tesco in Ely, Cambridgeshire, was pictured empty on Friday.
It comes as Brits have been rushing to their local greengrocers, who have remained fully stocked despite the shortages.
Thomas Hagon, 39, from Reg The Veg green grocers in Clifton, Bristol, claimed 'the produce is there for supermarkets to purchase but higher prices have turned the chains off'.
Meanwhile, Baz Dawson, owner of Fresh and Fruity, in Preston, revealed his salad stocks have not been directly affected because he buys locally, as he urged people to head to their local market stalls.
And Paul Semple, 43, manager at Lloyds Greengrocer, in Bristol, said his footfall is up 10 per cent, with new customers telling him they 'can't believe how stocked up' his shop is.
It comes as the likes of Aldi, Morrisons, Asda and Tesco have limited sales of tomatoes, peppers and cucumbers as frosty weather in Spain and Morocco has hit imports - with customers in all four stores given limits to how much produce they can buy.
But despite an increase in cost price, Mr Hagon claims greengrocers have been able to remain stocked up, and says he has fresh tomatoes, peppers and cucumbers because 'customers are happy to pay extra for them'.
He predicted supermarkets will be forced to increase prices in the near future - after Environment Secretary Therese Coffey warned the crisis could last for another month.
Meanwhile, some restaurants struggling to cope with the shortages have been forced to remove tomato-dependent items such as pizza and pasta from their menus.
Mr Hagon said Reg The Veg had a period of low stock a few weeks ago when supermarkets were selling the vegetables at a lower price.
But since the wholesale price has reportedly nearly doubled, averaging at £15 before and now as much as £30, Mr Hagon said supermarkets 'won't pay it', while greengrocers, like Reg The Veg, will.
He said: 'We had shortages due to availability and low numbers about three weeks ago and supermarkets were still pumping out vegetables at low prices.
'It's got to the point where now supermarkets can't buy it at the right price as it's increased so much.
'It is available they just won't pay the money for it.
'Whereas we can, and we can then supply our customers and pass on the slight increase in price.
'We've still had to increase our own prices in some areas - cherry vine tomatoes are now £9.99 a kilo which is around double the normal price.
'We do say to customers that these peppers or tomatoes for example can be quite expensive but they're happy to pay that.
'Of course, nationally it's very difficult because of the volumes that supermarkets get in, but if they're quoted £25 or £30 pounds for a wholesale shipment, and they wont pay for it.'
Why are there shortages of fruit and veg in the UK? Rising prices, heating costs and bad weather abroad are all blamed What is causing the shortages? Cold weather in Spain and Morocco has drastically hit the availability of vegetables in British markets along with soaring energy prices. The supply problems are blamed on bad weather and high energy costs making greenhouses more costly to heat. Some critics have cited red tape on post-Brexit imports from the EU as an issue. Tim O'Malley, of major importer Nationwide Produce, said volatile growing conditions had seen wholesale spot prices for fresh produce lines soar by as much as 300 per cent. Growers in Spain and elsewhere on the Continent are reportedly sending produce to European supermarkets rather than to the UK because they are more willing to pay the higher prices. High energy prices - linked to Russia's invasion of Ukraine - are also a factor because it has become more expensive to heat greenhouses. Which fruit and veg are affected? The problem started with tomatoes but has since widened to peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries. While some critics have cited red tape on imports from Europe, industry expert Mr O'Malley said the single biggest factor behind the crisis was 'Mother Nature'. He said: 'I can honestly say that in the 40 years I've been in this trade, I've never seen such high spot prices across such a broad range of products for such a prolonged period of time.' He added: 'It's not about Brexit - it's about different buying models'. Farming minister Mark Spencer said at the NFU conference yesterday: 'What has driven some of this is a frost in Morocco and Spain in November and December. 'This can damage a lot of the salad and brassica crops, which we have traditionally relied on at this time of year so that has created a gap in the market. 'It's very difficult for UK producers to grow cauliflowers, for example over winter. They are not resistant to frost. It's not possible to grow cauliflowers in January in the United Kingdom unless you grow them in a greenhouse.' Why are European supermarkets not suffering from shortages? Experts say that it is because of the way that British supermarkets buy produce compared to those on the continent. Tim O'Malley says retailers in the UK tend to agree prices once or twice a year so they and shoppers can get certainty on price. This tends to be a winter deal for produce from Spain and Morocco and a summer deal for UK produce. Mr O'Malley says that in Europe they tend to agree monthly prices, meaning that supermarkets find it easier to buy when prices change. Adam Leyland, Editor-in-Chief of The Grocer, said that UK supermarkets are 'in denial' and need to be more nimble to avoid shortages like the current one. What are the other factors? There has been strong winds disrupting ferries from Morocco and flooding in the country. Frost has also slowed growth and damaged crops. Phil Pearson, group development director at APS Produce said delays are likely to continue until, 'the end of April into May.' Andrew Opie, director of food and sustainability at the British Retail Consortium, which represents UK supermarkets, said: 'Difficult weather conditions in the south of Europe and northern Africa have disrupted harvest for some fruit and vegetables including tomatoes and peppers. 'While disruption is expected to last a few weeks, supermarkets are adept at managing supply chain issues and are working with farmers to ensure that customers are able to access a wide range of fresh produce.'
One of his colleagues said there were queues stretching out the door on Sunday after customers scrambled for tomatoes and peppers.
She initially wasn't sure why but then realised it may have been down to the supermarket shortage.
Mr Hagon said he isn't sure what the solution to the problem is, but that it will probably result in supermarkets having to charge more.
He said conditions on the continent have left prices at an 'exceptionally high' rate.
He added: 'I don't know what the solution is to it, they'll just have to charge more - some fruit or veg hasn't gone up for a decade or more.
'When there's more competition from other European countries that supply produce it'll bring prices down - It's always high at this time of the year, it's just exceptionally high at the moment.
'We've seen the cold weather in Morocco. They've got snow - it's crazy.
'We've got used to eating what we want to eat all year round so when things go a bit short it can be a bit of a shock.'
Other greengrocers have also found themselves with no choice but to double their prices.
Paul Semple, 43, of Lloyds Green Grocers in Bristol, said: 'Tomatoes are hard to get, courgette, cucumbers all hard to get hold of.
'They're twice the price, that's how scarce they are.
'It's always hard to get produce this time a year but this year we're nearly at £10 a kilo for tomatoes when we rarely go above £5.
'We're still getting the gear, just prices are up and very expensive.'
Another fruit and veg trader urged people to head to their local market stalls for fresh groceries.
Baz Dawson, owner of Fresh and Fruity, in Preston, revealed his salad stocks have not been directly affected during the national shortage because he buys locally.
The Preston Market trader said that while big supermarkets will now struggle to get hold of their usual cheaper items from abroad, he will continue to buy from farmers in Lancashire and the surrounding areas.
Four of the UK's leading supermarkets - Tesco, Aldi, Asda and Morrisons - have put limitations in place on the amount of certain items customers can buy.
The problem started with tomatoes but has since widened to peppers, cucumbers, lettuce, salad bags, broccoli, cauliflower and raspberries.
Tesco and Aldi have introduced limits of three per customer on sales of tomatoes, peppers and cucumbers. Asda is limiting customers to three on sales of lettuce, salad bags, broccoli, cauliflowers and raspberry punnets, along with tomatoes, peppers and cucumbers. Morrisons has set a limit of two on cucumbers, tomatoes, lettuce and peppers.
Mr Dawson says it is the international transportation that has got the supermarkets in a pickle, with fewer places for them to buy their goods.
But because traders like him keep things local, they are not worried about stocks lasting.
He says every day can be different when it comes to buying locally and because of that, he is less worried he'll face what the supermarkets are currently dealing with.
Mr Dawson said: 'We only deal with top end fresh fruits, veg and salads. There's currently such a national shortage on salads and foreign vegetables.
'We go to the wholesalers and buy either direct or off the farmer or the wholesaler to cut costs, but to stick with the quality.
'With it being such a struggle nationally, the supermarkets will struggle but with us going direct to the wholesalers, we can still get hold of limited salad stock.
'Most of our vegetables are grown and cut within a ten mile radius during certain seasons of the year. Even for us, when we're in the depths of winter we sometimes have to go for the cheaper produce too.
'Supermarkets have not got the stock of salads in now whatsoever but here we do have, from the wholesaler.
'Because they haven't got it in the supermarket, like they didn't when the pandemic hit, they come to us in the market to buy fresh produce and salad. We keep going, like we did two years ago.'
Fluctuating stocks can occur daily in the market trade, Mr Dawson says, but having already dealt with it since the day he began selling, he says the fear of low stocks of certain items is less of a fear.
In the winter months the UK imports around 95 per cent of its tomatoes and 90 per cent of its lettuces, mostly from Spain and northern Africa. The British Retail Consortium said disruption was expected to last a few weeks.
Retailers have stressed that buying limits are temporary until supplies improve in the coming days or weeks, helped by the UK moving into its growing season.
It comes after the Environment Secretary suggested yesterday that Brits could consider eating turnips to ease the national vegetable shortage.
Farmers also warned of a shortage of leeks that is likely to hamper St David's Day celebrations in Wales next week.
Therese Coffey told MPs the 'temporary' shortages were caused by 'very unusual weather' but were expected to end in another four weeks.
Ms Coffey said that consumers might want to turn to British 'specialisms' at this time of year to support domestic farmers.
She added: 'I am led to believe by my officials... we anticipate the situation will last about another two to four weeks.
'Even if we cannot control the weather it is important that we try and make sure the supply continues to not be frustrated in quite the way it has been due to these unusual weather incidents.'
Ms Coffey agreed with Tory MP Selaine Saxby who suggested eating seasonal vegetables could solve the issue.
Ms Saxby said: 'We should be eating more seasonally and supporting our own British farmers', adding that if shoppers did so, 'a lot of these problems would be avoided'.
Ms Coffey said: 'It's important to make sure that we cherish the specialisms that we have in this country.
'A lot of people would be eating turnips right now rather than thinking necessarily about... lettuce and tomatoes and similar, but I'm conscious that consumers want a year-round choice and that is what our supermarkets, food producers and growers around the world are trying to satisfy.'
Labour's environment spokesman Jim McMahon questioned suggestions that food shortages were entirely caused by external forces, claiming ministers could have done more to support farmers with access to 'the energy-intensive support scheme', and increased quotas on labour to help with workforce shortages.
Conservative former minister Sir Desmond Swayne ridiculed suggestions that Brexit was responsible for the shortages.
He told the Commons: 'If only I had been told before I voted for Brexit that it was going to cause frosts in Morocco, I could have made a different decision, couldn't I?'
Asked about the turnip suggestion, a No 10 spokesman said: 'We don't believe it's for us to tell people what they should or shouldn't buy.'
He added: 'What the Secretary of State was doing was setting out the importance of celebrating the produce that we grow here in the UK.'
Ms Coffey drew further criticism for suggesting people struggling to afford food bills could consider working more hours.
She said: 'One of the best ways to boost their incomes is not only to get into work if they're not in work already, but potentially to work some more hours.'
After the debate, Labour's Rachael Maskell accused Ms Coffey of 'shifting blame for food poverty on to people because they are on low wages and are poor'.
Budget supermarket food is seeing average annual price rises of an astonishing 21.5 per cent.
A Which? study found the poorest homes were the worst hit.
Some products have seen huge increases, such as tins of Growers Harvest sliced carrots up 63 per cent at Tesco to 33p, and packs of pork sausages at Asda up 58 per cent to £1.27. Budget Creamfields French brie also saw a 96.6 per cent rise at Tesco to £1.57.
Farmers are warning of an 'extraordinary' shortage of leeks which threatens St David's Day celebrations in Wales next week.
British producers of the much-loved seasonal vegetable, as well as onions, cauliflower and broccoli, have had to write off crops due to a lack of rain and deep frosts.
Some supermarkets have already run out of leeks, while the ones that do reach the shelves are often of poor quality and stunted – bad news for anyone planning to serve up traditional dishes such as a Welsh cawl or Wrexham bake on March 1.
Leek Growers Association chairman Tim Casey said yields were down by as much as 30 per cent following the 'most difficult growing season ever'. He added: 'We are predicting the supply of home-grown leeks will be exhausted by April, with no British leeks in the shops during May and June.'
Reputedly introduced to Wales by the Phoenicians when they were trading for tin in the British Isles, the leek has long been associated with the Welsh Saint David.
In 640AD, according to legend, the Briton King Cadwaladr and his men wore leeks in their hats to distinguish themselves in battle against invading Saxons. The leek has remained a national symbol ever since. | United Kingdom Business & Economics |
Trump defense points to bankers as proof business dealings had ‘no victim’
Donald Trump and Deutsche Bank’s years-long symbiotic relationship came to the forefront of his New York civil fraud trail this week when top executives who once loaned the former president’s business hundreds of millions of dollars gave the most compelling defense yet in his trial.
The executives bolstered arguments Trump’s counsel has made from the start: that the bank wanted to work with the Trump Organization, did its own due diligence and found no fraud.
In fact, the bankers’ testimony was such a boon to Trump’s defense that his lawyers asked the judge to issue an immediate decision in their favor.
But the trial judge — who has often butted heads with Trump and his legal team, and who already found Trump’s business liable for fraud — did not appear convinced.
“I would point out that the mere fact that the lenders were happy doesn’t mean that the statute wasn’t violated, doesn’t mean that the other statutes weren’t violated,” Judge Arthur Engoron said, taking the request under advisement.
Engoron has already found Trump, his business and several executives liable for fraud, determining that New York Attorney General Letitia James proved the crux of her case. The trial is addressing other claims, including conspiracy, insurance fraud and falsifying business records.
The judge, who is overseeing the trial with no jury, will alone decide the verdict.
James sued Trump and his business last year, claiming the business mogul-turned-president misled lenders and insurers by falsely altering the value of his business’ assets on key financial statements to receive tax and insurance benefits.
The Deutsche Bank executives’ view aside, state lawyers say that misrepresentations in company financial statements nonetheless shortchanged banks by millions of dollars, also misleading the government.
Throughout the trial, Trump’s attorneys have attempted to show that banks were eager to work with the Trump Organization and excited by the outcomes of their partnerships — that there was “no victim” of the business’s real estate dealings, implying the New York attorney general had no right to bring the case because the banks did not sue him over misrepresentations.
The defense on Wednesday introduced 2011 emails between then-bank managing director
Rosemary Vrablic and colleagues, where Vrablic expressed significant interest in working with the Trumps.
“We are whale hunting,” she wrote after meeting Donald Trump Jr., before she had met his father.
She testified Wednesday that the bankers used “whale” to refer to very wealthy clients.
Vrablic would become Trump’s lead banker, and their working relationship would span a decade.
Deutsche Bank loaned Trump millions for high-end properties in Florida, Chicago and Washington, D.C., and Trump’s celebrity helped the bank lure in other high-profile clients.
Ex-Deutsche Bank risk management officer Nicholas Haigh previously testified in the New York attorney general’s case that Trump’s statements of financial condition played a vital role in the approval of two of those loans, a $125 million loan in 2011 for Trump’s Doral, Fla. golf resort and a $107 million loan in 2012 for his Chicago hotel.
Trump was able to secure bigger loans with lower interest rates thanks to the documents, Haigh said. The Doral property had roughly an 8 percent interest rate, while the Chicago property had a 3 to 5.45 percent interest rate, according to state evidence.
Trump personally passed along his statement of financial condition to Deutsche Bank when negotiating the Doral loan agreement, writing to the bank’s CEO that Trump hoped he’d “be impressed” with the document, evidence showed.
But those cushy deals had consequences for the banks, the New York attorney general’s office argues. Earlier in the trial, an expert witness hired by the state testified that the Trump Organization’s skewed financial statements may have cost banks more than $168 million in interest across four projects.
The statements of financial condition, which detail the value of Trump’s assets and were used to secure loans and deals, are at the heart of the state’s case. Trump’s three eldest children — Donald Trump Jr., Ivanka Trump and Eric Trump — distanced themselves from the documents in their individual testimonies, but for Trump, there is no escaping the financial statements that bear his name.
Trump previously played down the importance of the documents, testifying that they were “not really documents that the banks paid much attention to.”
“I’ve been dealing with banks for 50 years and probably know banks as well as anybody,” Trump said on the witness stand earlier this month. “I know what they look at; they look at the deal.”
The former president and his lawyers have also asserted that banks are required to do their “own due diligence,” not just relying on the Trump Organization’s representations in the statements.
“Banks check the work,” Trump testified.
Deutsche Bank managing director David Williams’ testimony Tuesday backed that perspective. He said Tuesday that bankers viewed their clients’ statements of financial condition as “subjective or subject to estimates,” taking their own look at the reports of net worth.
“I think we expect clients-provided information to be accurate,” Williams said. “At the same time, it’s not an industry standard that these statements be audited.
“They’re largely reliant on the use of estimates,” he added, so bankers routinely “make some adjustments.”
Vrablic testified similarly the next day, claiming that she never personally reviewed Trump’s statements of financial condition but that the bank expected it to be accurate.
“You would have had an expectation that a borrower like Mr. Trump would present their financial information fairly?” Wallace asked, according to ABC News.
“Yes,” Vrablic replied.
The Associated Press contributed.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
Rishi Sunak will take personal responsibility if inflation in the UK has not halved by the end of the year.
The prime minister was speaking to Sky News political editor Beth Rigby during a visit to Washington DC where he will meet President Biden.
Mr Sunak has made a significant amount of noise about his five priorities, which he says are also the "people's priorities".
They include: Halve inflation, grow the economy, reduce debt, cut waiting lists, and stop the boats.
He promised in January - when inflation was 10.1% - to tackle price growth to help with the cost of living crisis.
The most recent figures from the Office for National Statistics had inflation easing to 8.7% - but food inflation remained at nearly 20% and core price inflation is at a 30-year-high.
"First, we will halve inflation this year to ease the cost of living and give people financial security," Mr Sunak said in his January speech.
Speaking today, Beth Rigby asked him: "Two of your five pledges - inflation down by the end of the year, the UK out of recession by the end of the year.
"If you fail on either of them, do you take personal responsibility, you don't blame the Bank of England, you don't blame consumers, you don't blame business. It's on you personally because it's your personal pledges?"
The prime minister said: "Of course it's on me personally. I'm the prime minister. I'm the person who set out those five pledges to halve inflation, grow the economy, reduce debt, cut waiting lists, and to stop the boats, and I intend to deliver on those."
Mr Sunak added: "When it comes to growing the economy, as you mentioned, we've already avoided the recession that many predicted. People are upgrading our growth forecasts as we speak.
Read more:
Chancellor comfortable with recession if it brings down inflation
Sunak has staked his premiership on five pledges but there are no easy answers
"I'm announcing £14bn of investment into the UK, which is going to support thousands of jobs. And just this week I managed to explain to the country how we're progressing our boats plan, which means that this year, crossings into the UK down by almost a fifth over the first five months of this year.
"So look, the plans are working, but I'm not complacent. There's work to do and I intend to deliver."
Asked if it was a "dealbreaker" if he did not deliver for the British public, Mr Sunak said: "It's absolutely my responsibility. I've told the public to hold me accountable.
"They should be able to have politicians who deliver what they say, and that's what I intend to do."
Mr Sunak was also asked if - like Chancellor Jeremy Hunt said last week - he was prepared to risk a recession to bring inflation down.
Click to subscribe to Beth Rigby Interviews… wherever you get your podcasts
The prime minister did not deny this might need to happen, saying: "I think what the Chancellor was saying is that inflation is the challenge that we must confront.
"Obviously, monetary policy interest rates are a decision for the Bank of England, so it wouldn't be right for me to comment on that." | Inflation |
Planning for a no-deal Brexit was "some of the best preparation" possible for the COVID pandemic, Michael Gove has argued.
The veteran Tory, who was Cabinet Office minister and chancellor of the Duchy of Lancaster when the pandemic began in 2020, said the work on EU withdrawal made the UK "more match fit" because it "enhanced" civil servants' crisis-management skills.
Giving evidence to the COVID-19 inquiry, he denied that moving staff over to Brexit work harmed pandemic planning.
"The nature, the pace and the intensity of the work undoubtedly placed pressure on individuals and the system, but it also ensured a greater degree of match fitness for what none of us anticipated but what was to come the year after," he said.
"I would argue that the skills acquired, honed and refined during EU exit preparation helped us not only to have an organisational system that was better in dealing with the crisis, but having a cadre of people who'd been through an intense process that enhanced their ability to respond."
Mr Gove added: "The preparation for EU exit in and of itself was some of the best preparation that could have been undergone for any future crisis."
The levelling-up secretary is the latest high-profile politician to give evidence to the inquiry, which is currently examining the country's preparedness for a pandemic.
His assertion that Brexit planning helped the UK's readiness contradicts evidence given by other witnesses, including former Scottish first minister Nicola Sturgeon.
Under Boris Johnson's premiership, Mr Gove was in charge of mitigating the risks of a no-deal Brexit across government departments.
Explaining that his team had to work at an "accelerated" tempo due to the EU exit deadline, he said: "I do believe that it was helpful for all of government to be operating at that pace, because we made government more match fit overall for the terrible events that this inquiry has been set up to look at."
Mr Gove also defended the function of "amateur" politicians in resilience planning, because they ask the "daft, laddie question".
Click to subscribe to the Sky News Daily wherever you get your podcasts
"Sometimes it is only when someone asks that question that we find out that the emperor has no clothes or the pandemic preparedness plan has a huge hole in the middle," he said. | United Kingdom Business & Economics |
An actor who starred in Gavin and Stacey is walking hundreds of miles from France to Spain to raise money for charity, in memory of his beloved nephew.
Ifan Huw Dafydd, who appeared as Nessa's father, Neil Jenkins, in the BBC sitcom, is walking the 475 miles of the Camino Frances to Santiago de Compostela.
Mr Dafydd's nephew Rhys Tom, known to many as Twm, was due to run the London Marathon this year to raise money for children's hospice, Tŷ Hafan.
Twm sadly died at the age of 31 just before he was due to take on the challenge.
Mr Dafydd, 69, told Sky News his nephew was "colourful, likeable and full of life".
He decided to keep his nephew's promise by taking on his own challenge to raise money for the charity.
"You know I've never been a runner, but definitely not now and I'll never run again. But I can still walk," he said.
The proceeds will be shared between Tŷ Hafan and the Jac Lewis Foundation which provides support to families bereaved by suicide.
Thousands of pounds have already been raised for the charities and Mr Dafydd said he would like to thank everyone for their "amazing" support along the journey so far.
"Every time the phone goes with an email from someone who has made a contribution, it gives a boost to the shoes," he said.
As well as Gavin & Stacey, Ifan Huw Dafydd has also appeared in an episode of Netflix's The Crown and starred in Welsh-language soap opera Pobol y Cwm.
Having started his walk on 17 August, Mr Dafydd hopes to have completed the trek by the autumn.
"I hope I'll be back by the beginning of October but I haven't booked a return ticket," he said.
"Maybe I'll have to book a PO box in Santiago for people to send me Christmas cards."
Read more from Sky News:
Boy gets B in Welsh GCSE months after fleeing Ukraine war
'Incredible' response to chippy's £1 kids meal initiative
Mr Dafydd has been walking in the mornings as after lunchtime the temperature has reached highs of more than 35 degrees Celsisus.
"I wouldn't like to walk after 12pm, 1pm. By 12.30pm it's insufferable," he said.
"I don't think you'd see a farmer from Ceredigion out in this weather, but to be honest I haven't seen a Spanish farmer out either." | Nonprofit, Charities, & Fundraising |
By Sabrina Valle and Sarah McFarlane
HOUSTON (Reuters) - Exxon Mobil Corp Chief Executive Darren Woods is making plans to attend the COP28 climate summit in Dubai next week, two people close to the information said, in what would mark a first for an Exxon CEO, if confirmed.
Woods, currently not in the summit program, is expected to advocate for more oil production with less carbon emissions, in what became his mantra in the past couple of years. Record oil and gas attendance expected at this year's COP.
Leading the climate talks is Sultan al-Jaber, also chief executive of the UAE’s state-owned Abu Dhabi National Oil Company (ADNOC), whose work with the industry in the run-up to the summit has led to more than 20 oil and gas companies signing up to a voluntary climate pledge. However environment critics have been concerned over Exxon's plans to increase oil production and its aversion to scope 3 targets, which measures emissions from products sold to clients.
Exxon on Wednesday said it decided to join a United Nations-led initiative to monitor its methane emissions, following in the footsteps of its European rivals taken years ago.
Exxon has been catching up with industry emission reduction initiatives since 2021, when it suffered an investor rebellion over the company's lack of climate strategy.
The move, anticipated by Reuters, also follows the acquisition in October of U.S. shale producer Pioneer Natural Resources, already a member of the U.N.'s Oil & Gas Methane Partnership (OGMP).
Exxon could either join the group or face the reputation risk of removing Pioneer assets from OGMP, the world's largest initiative to monitor methane emissions. The program uses standardized, independently verified methods that are comparable across the industry.
Exxon says technology advancements allowed it to join the initiative and that the decision guards no relation with Pioneer's acquisition.
"The evolving technical landscape and ongoing collaboration with the United Nations Environment Programme (UNEP) have opened the door for us to meet OGMP 2.0’s expectations," Exxon's Chief Environmental Strategist Matt Kolesar said in a statement. More than 95 companies including Shell, BP, Total, Conoco and Occidental are part of the U.N. initiative. Chevron is the main absence among large Western oil producers.
(Reporting by Sabrina Valle and Sarah McFarlane; Editing by Josie Kao) | Energy & Natural Resources |
Alice Springs councillor calls for alcohol bans to be reinstated as he reveals startling reality of growing up in central Australia
An Alice Springs councillor has revealed what it is really like for children growing up in Alice Springs as he called on Chief Minister Natasha Fyles to "look at the data" around community crime rates and reinstate alcohol bans.
An Alice Springs councillor has lifted the lid on what it is like for children growing up in Central Australia amid soaring crime and domestic abuse rates.
Prime Minister Anthony Albanese was forced to travel to Alice Springs last week to address the crime crisis, which has been blamed on alcohol bans lapsing at the end of last year.
Locals have also been vocal about how dozens of children, some as young as seven, are roaming the streets at night because they are from unsafe homes.
Alice Springs councillor Michael Liddle said more was needed to ensure children get an education and have appropriate role models in the community.
“Alice Springs at the moment is not a happy place for anyone to grow up. The level of children not going to school is just unimaginable you don’t see that anywhere,” he said.
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“My sole focus and what I do in my work is about making better change in the man so if we get a stronger man we get a stronger house and that brings a stronger community but that’s not happening.
“When it comes to these kids to look up to a father figure they’ve got to go to prison to see him.”
In the past year property damage has increased by 60 per cent, commercial break-ins by 56 per cent, alcohol-related assault by 55 per cent, domestic violence by 54 per cent, assault by 43 per cent and car theft by 42 per cent.
Mr Liddle added the community was struggling from youth crime and a “total disregard for people and property” with children often only finding structure in juvenile detention centres.
“They’ve got to go to juvenile centres to get any form of education or purpose within their life and structures around eating, saying polite words like thank you sir and all these sorts of things around harmony and better life and better children, better people and that’s not happening,” he said.
Mr Liddle called on NT Chief Minister Natasha Fyles to reinstate the previous alcohol bans which lapsed in July last year to help the community recover.
“The proof is in the pudding and you’ve just got to have a look at the data that goes around these camps the amount of domestic violence, the amount of overcrowding, the amount of trouble in these spots in town camps,” he told Sky News Australia.
Ms Fyles has resisted the calls, claiming she does not want to have race-based controls.
Following his visit last week Mr Albanese announced a series of funding packages for central Australia including $25 million toward community services funding for central Australian organisations.
The government also pledged $2 million for the Tangentyere Women's Council, $2 million for high visibility police operations and $2 million for extra lighting and street lamps for the area.
Mr Albanese also highlighted a "severe shortfall" in emergency accommodation for Alice Springs, and pledged $4.6 million in funding to provide emergency accommodation for local residents.
In response to the intensifying situation in Alice Springs, takeaway alcohol sales will be banned on Monday, Tuesday and Sunday for the next three months.
Customers will be limited to one transaction per day in bottle shops, which will be implemented immediately through the banned drinker register.
There will also be a sharp reduction in the hours takeaway alcohol is available for purchase, with those sales now limited to 3pm to 7pm.
All newly announced restrictions will be put in place immediately for a period of three months.
A Central Australian Regional Controller – children’s welfare leader Dorelle Anderson - has also been appointed and has been tasked with preparing a report on the implementation and potential changes to alcohol restrictions.
The report will be presented to the Chief Minister and Prime Minister on February 1. | Australia Business & Economics |
The chief executive of Australian telecom giant Optus has resigned after a nationwide outage this month.
Kelly Bayer Rosmarin has been under pressure to quit after overseeing a tumultuous three years for the firm.
Along with the network failure which left almost half of Australia disconnected, she was at the helm during a major data breach last year.
In a statement, she said it had been "an honour to serve" but it was now appropriate for her to step down.
"Having now had time for some personal reflection, I have come to the decision that my resignation is in the best interest of Optus moving forward."
Ms Bayer Rosmarin will be replaced by chief financial officer Michael Venter while the firm searches for a replacement.
The chief executive of Optus's Singaporean parent company thanked her for her hard work during a "challenging period" - pointing out she had improved financial performance despite being appointed at the beginning of the pandemic.
But Yuen Kuan Moon said the Singtel Group understood her decision to resign.
"We recognise the need for Optus to regain customer trust and confidence... Optus' priority is about setting on a path of renewal for the benefit of the community and customers," Mr Moon said.
The outage on 8 November left 10 million Australians and thousands of businesses without mobile or internet coverage for over 12 hours.
The failure caused transport delays, cut hospital phone lines, shut down payment systems, and blocked about 200 people from calling emergency services.
Ms Bayer Rosmarin has faced criticism over her response to the incident, including at a Senate hearing on Friday.
There she revealed thousands of Australians were pursuing the telecom for compensation.
The company is also fighting a class action lawsuit from more than 100,000 current and former customers over the data breach in September 2022.
Affecting 10 million people, it was at the time believed to be the worst data breach in Australian history.
Optus had apologised and blamed a sophisticated cyber-attack, but critics disputed that, including the Minister for Cyber Security who said the firm had "effectively left the window open" for data to be stolen. | Australia Business & Economics |
Aster DM Healthcare - GCC Stake Sale To Unlock Value: Prabhudas Lilladher
Aster board has approved the much awaited GCC stake sale at reasonable valuations, that will unlock value for shareholders.
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.
Prabhudas Lilladher Report
Aster DM Healthcare Ltd. board has approved the much awaited GCC stake sale at reasonable valuations, that will unlock value for shareholders. Proper capital allocation strategy will be a key to scale-up India operations.
Conversely, Aster DM India’s Ebitda increased sharply over last three years (30% compound annual growth rate over FY20-23).
We estimate 23% Ebitda CAGR from India biz over FY23-26E aided by scale up in margins, healthy average revenue per occupied bed and bed additions. Our FY24E/25E India business Ebitda stand increased by 1-3%.
At current market price, adjusted for GCC stake the India business is trading at 19 times and 15 times enterprise value/Ebitda on FY25E and FY26E respectively which is at 15- 30% discount to listed peers.
We maintain ‘Buy’ rating with revised target price of Rs 430 (earlier Rs 345) valuing India hospital segment at 20 times (18 times earlier) enterprise value/Ebitda on Sept 2025E Ebitda.
Timely closure of GCC divestment and utilisation of proceeds will be key monitorable in near term.
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. | Middle East Business & Economics |
Thanks for joining me. Inflation has dropped below 5pc for the first time in two years as falling energy prices helped Rishi Sunak meet his target to halve the measure before the end of the year.
The consumer prices index fell to 4.6pc in October, coming in below the Prime Minister’s target of falling below 5.4pc.
5 things to start your day
1) Central banks will have to slash rates as the world’s fiscal bubble bursts | The main prop of global economic recovery is wobbling
2) The Cassandra warning that central banks are driving the world’s economy off a cliff | Optimism may be short-lived as the scale of interest rates hikes is yet to fully hit
3) Over-65s are stopping young families getting on housing ladder, says Zoopla | Two fifths of older homeowners live in a home that is larger than they need
4) Mortgage price war ramps up as Sunak prepares to claim inflation victory | Major lenders cut fixed-rate deals ahead of critical announcement
5) Selfridges seized by Thai retailer after debt crisis at co-owner | It ends weeks of uncertainty over ownership of the luxury department store
What happened overnight
Asian shares surged higher as they were cheered by a rally on Wall Street that was one of the best days of the year following a surprisingly encouraging report on inflation.
Tokyo’s benchmark Nikkei 225 rose 2.6pc to 33,545.14 as investors appeared to shrug off news that Japan’s economy contracted at a worse than expected 2.1pc annual rate in July-September.
Hong Kong’s Hang Seng added 3.3pc to 17,971.81, while the Shanghai Composite gained 0.5pc to 3,069.81 after economic data for October showed the Chinese economy is holding up even as some indicators slowed.
Factory output and retail sales rose but property sales fell further. Lending, exports and inflation have also been lower than expected.
Australia’s S&P/ASX 200 jumped 1.4pc to 7,105.90. South Korea’s Kospi surged 1.9pc to 2,480.51.
On Tuesday, the S&P 500 closed up 1.9pc at 4,495.70, while the technology-focused Nasdaq Composite was up 2.4pc to 14,094.38. The Dow Jones Industrial Average rose 1.4pc to 34,827.70.
Meanwhile, US Treasury yields dropped after lower than expected inflation signalled to the market that interest rates might have hit their peak - with expectations of cuts next year. The yield on 10-year Treasuries declined 18 basis points to 4.46pc. | Inflation |
7 in 10 say they’ve heard little or nothing about Inflation Reduction Act since passage: poll
Seven in 10 Americans in a new poll say they’ve heard little or nothing about the Inflation Reduction Act nearly a year after President Biden signed Democrats’ massive climate and tax bill into law.
Only 27 percent of Americans said they know a great deal or a good amount about the legislation touted by the administration as a major accomplishment, according to a Washington Post-University of Maryland poll released on Monday.
Seventy-one percent in the poll said they know little or nothing about the law.
U.S. adults polled also said they are in the dark about the climate incentives within the legislation.
Only 22 percent said they know at least a good amount about the tax credits to buy heat pumps, 24 percent said they know about the expanded tax credits to manufacture solar panels and wind turbines, 32 percent said they know about the expanded tax credits to buy electric vehicles, and 33 percent said they know about the expanded tax credits to install solar panels.
While only 39 percent of U.S. adults said they support the Inflation Reduction Act overall, the majority supported the specific climate incentives, according to the poll.
Sixty-five percent support the expanded tax credits to install solar panels and 54 percent supported both the expanded tax credits to manufacture solar panels and wind turbines and tax credits to buy heat pumps. And half of Americans polled say they like the expanded tax credits to buy electric vehicles.
Biden signed the Inflation Reduction Act into law on Aug. 16, 2022. Since then, the administration has been touting the legislation and discussed it on the campaign trail in the midterm elections.
They are keeping a focus on the law going into the 2024 election. Biden this week is traveling to Arizona, New Mexico and Utah to discuss the Inflation Reduction Act and its investments in climate and clean energy manufacturing.
Other administration officials are pitching the law’s investments in trips this week, with second gentleman Doug Emhoff traveling to Jackson, Wyo., and Environmental Protection Agency Administrator Michael Regan also in Wyoming to discuss climate action from the bill.
The poll of 1,404 U.S. adults was conducted online and by phone and has a margin of error of 3.5 percentage points.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Inflation |
In January 2023, the Competition and Markets Authority (CMA) opened a Phase 1 investigation into the completed acquisition by Asda of Arthur Foodstores Limited, a company set up by Co-op to sell its 132 petrol forecourt sites.
The CMA’s investigation focused on a number of local areas in which Asda and the Co-op sites that it acquired compete to provide fuel or groceries to customers. The CMA found that the deal raises competition concerns in 13 locations across the UK, in each of which the merging businesses currently compete for customers and would not face sufficient competition after the merger. The deal could therefore lead to consumers and businesses in these areas facing higher prices or lower quality services when shopping or buying fuel.
Asda told the CMA that competition concerns would not arise in these areas because the merger would enable Asda to bring its low-cost pricing model to more customers. But as the CMA’s investigation in this case focussed on local areas in which the merging businesses currently compete for customers, competition concerns only arise in areas in which Asda is already an important option for customers, who already have access to Asda prices. The CMA found that allowing Asda to acquire more sites in those areas, leaving it facing insufficient competition in future, could therefore risk worse outcomes for customers.
Colin Raftery, CMA Senior Director of Mergers, said:
Groceries and fuel account for a large part of most household budgets. As living costs continue to rise, it’s particularly important that deals that reduce competition among groceries and fuel suppliers don’t make the situation worse.
While competition concerns don’t arise in relation to the vast majority of the 132 sites bought by Asda, there’s a risk that customers could face higher prices or worse services in a small number of areas where Asda would face insufficient competition in either groceries or fuel after the deal goes through”.
Asda now has 5 working days to offer legally binding proposals to the CMA to address the competition concerns identified. The CMA would then have a further 5 working days to consider whether these proposals address its concerns, or if the case should be referred to an in-depth, Phase 2 investigation.
Notes to editors
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For more information, please see the Asda/Arthur (Co-op) case page.
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One of the 13 locations, in Earlston, Scotland, raised competition concerns in relation to the supply of both petrol and groceries. The 10 other petrol stations that raised concerns are in Barnard Castle; Calcutt, Caledonian Road; Gnosall (Station Road); Lauder; Minsterley; Oakdale (Ripon Road),Harrogate; Rochester; Stonehaven (Kirkton Road); and Weycock Cross in Barry. The two further areas that raised concerns in relation to groceries are the Co-op mid-size stores in St Columb Minor (Henver Road), and East Peckham.
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Asda is controlled by Mr Zuber Issa, Mr Mohsin Issa, and the private equity firm TDR Capital, who together also own EG Group.
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The transaction completed on 30 October 2022. The CMA served an initial enforcement order on 26 October 2022 under section 72(2) of the Enterprise Act 2002 on Asda, Mr Mohsin Issa, Mr Zuber Issa, TDR Capital, Co-op, and Arthur.
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For more information, journalists should contact the CMA press office by email on [email protected] or by phone on 020 3738 6460.
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All enquiries from the public should be directed to the CMA’s General Enquiries team on [email protected] or 020 3738 6000. | United Kingdom Business & Economics |
Bitcoin Turns Less Volatile Than S&P 500, Tech Stocks And Gold
Bitcoin trading volume tumbled last month amid waning volatility and little notable price swings in a market that speculators traditionally gravitate to for its turbulence.
(Bloomberg) -- Bitcoin trading volume tumbled last month amid waning volatility and little notable price swings in a market that speculators traditionally gravitate to for its turbulence.
July saw the lowest monthly trade volume for Bitcoin since November 2020, according to data from K33’s Bendik Schei and Vetle Lunde. The drop-off happened as volatility also plummeted, with the digital currency’s five-day volatility sitting below that of the S&P 500, tech stocks and gold, “a rare feat that has previously foreshadowed substantial volatility eruptions in the near term,” they wrote in a Tuesday note.
Bitcoin’s 30-day volatility is, in fact, sitting near five-year lows at levels only seen on eight occasions since January 2019.
“The market is clearly in an unprecedented stable stage, which has typically acted as a massive pressure valve for volatility once it finally re-ignites,” Schei and Lunde said. “Traders should thus be vigilant.”
The largest digital coin, at around $28,800, is hovering near the bottom of a new range it carved out following excitement over BlackRock Inc.’s application to issue the first-ever spot-Bitcoin ETF in the US. Prices have declined as commotion over such a product — which other ETF issuers are also trying for — has died down, among other reasons.
“Even though the die-hard supporters keep trading it, those who are always looking for where the action in at any given time have moved on from Bitcoin,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Active traders seem to have moved on from the crypto market, at least for the time being. That’s not good for an asset that is breaking below a sideways range.”
Many market-watchers have been tracking trading volumes fastidiously given that a great number of investors had left crypto altogether following 2022’s string of scandals and company downfalls, which left mom-and-pop investors, in particular, saddled with losses. In addition, a “substantial portion” of the decline can be attributed to exchange Binance’s re-introduction of trading fees, according to K33.
Despite the tailwinds of a possible Bitcoin ETF and some recent regulatory clarity for the sector, large investors are still in no rush to enter the crypto market, says Noelle Acheson, author of the “Crypto Is Macro Now” newsletter. That could be for a few reasons, including still-ongoing uncertainties, such as potential future adverse rulings on ongoing legal cases and the unveiling of some recent DeFi vulnerabilities, among other things. As to professional investors, they tend to move in packs and aren’t yet seeing others stepping in.
“Market volumes are unlikely to increase significantly until volatility picks up — in crypto, volatility is a feature, not a bug,” she said. But, she added, “all it takes is one big announcement — a new large market participant, maybe a known hedge fund or maybe a second-tier central bank — or a favorable Grayscale ruling — to encourage some brave investors to take the first step, and then we could get a stampede.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
NEW YORK (AP) — Donald Trump obtained hundreds of millions of dollars in loans using financial statements that a court has since deemed fraudulent, a retired bank official testified Wednesday at the former president’s New York civil fraud trial.
Trump’s statements of financial condition were key to his approval for a $125 million loan in 2011 for his Doral, Florida, golf resort and a $107 million loan in 2012 for his Chicago hotel and condo skyscraper, former Deutsche Bank risk management officer Nicholas Haigh testified.
They also helped Trump secure bigger loans and lower interest rates, said Haigh, who headed the risk group for the bank’s private wealth management unit from 2008 to 2018.
A judge last month ruled that Trump and his company, the Trump Organization, committed years of fraud by exaggerating the value of Trump’s assets and net worth on the financial statements he gave to banks, insurers and others to make deals and secure loans.
Trump's longtime finance chief, Allen Weisselberg, acknowledged in testimony Tuesday that information in the financial statements wasn't always accurate.
Trump denies any wrongdoing, emphasizing disclaimers on the documents that he says alerted lenders to do their own homework. Trump has claimed that banks he did business with weren't harmed, made lots of money in his deals and “to this day have no complaints."
Haigh is testifying in a trial in New York Attorney General Letitia James’ fraud lawsuit against Trump, his company and top executives. It’s the first time a bank official has been in court testifying in the case about the impact Trump’s financial statements had on his ability to obtain loans.
Deutsche Bank’s rules required Trump to act as a guarantor for the Doral and Chicago loans in addition to putting up the Miami-area resort and Wabash Ave skyscraper as collateral, meaning he would’ve been obligated to repay the loans if his properties faltered.
Deutsche Bank’s private wealth management unit, which handled the loans, wouldn’t have approved them without a “strong financial guarantee” from Trump, Haigh said.
Haigh said he reviewed Trump’s financial statements before approving the loans and, at the time, had no reason to doubt their validity.
The documents portrayed Trump as a wealthy businessman, heavily invested in golf courses and other real estate with strong cash flow and little debt, Haigh said. Deutsche Bank representatives also met with Trump Organization executives to go over the information, he said.
“I assumed that the representations of the assets and liabilities were broadly accurate," Haigh said of Trump’s financial statements.
Trump's 2011 financial statement listed his net worth as $4.3 billion. Haigh said he used that figure to shape a loan condition requiring that Trump, as guarantor, maintain a minimum net worth of $2.5 billion, excluding any value derived from his celebrity.
"As the ultimate decider, I needed to be comfortable with the terms of the loan, including the covenants that protected the bank,” Haigh said. The $2.5 billion benchmark, he said, was set “to ensure the bank was protected in adverse market conditions.”
Trump, the Republican front-runner in next year’s election, attended the trial's first three days last week, watching testimony, consulting with lawyers and griping about the case to TV cameras outside the courtroom. He's expected back in court as a witness later in the trial.
In a pretrial ruling last month, Judge Arthur Engoron found that Trump, Weisselberg and other defendants committed years of fraud by exaggerating the value of Trump’s assets and net worth on his financial statements.
As punishment, Engoron ordered that a court-appointed receiver take control of some Trump companies, putting the future oversight of Trump Tower and other marquee properties in doubt. An appeals court on Friday blocked enforcement of that aspect of Engoron’s ruling, at least for now.
The civil trial concerns allegations of conspiracy, insurance fraud and falsifying business records. James is seeking $250 million in penalties and a ban on Trump doing business in New York. | Banking & Finance |
- At Money 20/20 in Amsterdam this week, business-facing fintechs like Airwallex, Payoneer, and ClearBank were all the rage, while consumer apps such as Revolut were nowhere to be found.
- The area that drew the most hype from Money 20/20 attendees was artificial intelligence, with fintech and banking leaders looking to harness the technology's potential while assessing the risks.
- Several fintech executives CNBC interviewed spoke of how they're not interested in launching products tailored to crypto as the demand from their customers isn't there.
AMSTERDAM, Netherlands — At last year's Money 20/20 — Europe's marquee event for the financial technology industry — investors and industry insiders were abuzz with talk about embedded finance, open banking, and banking-as-a-service.
As nebulous as these terms may be, they reflected a very real push from tech startups, including the biggest names in the business such as Stripe and Starling Bank, to allow businesses of all stripes to develop their own financial services, or integrate other firms' products into their platforms.
This year, with fintechs and their mainly venture capital and private-equity backers reeling from a dire slump in technology valuations and softer consumer spending, the narrative around what's "hot" in fintech hasn't changed an awful lot.
Investors still love companies offering services to enterprises rather than consumers. In some cases, they've been willing to write checks for firms at valuations unchanged from their last funding round. But there are a few key differences — not least the thing of curiosity that is generative artificial intelligence.
So what's hot in fintech right now? And what's not? CNBC spoke to some of the top industry insiders at Money 20/20 in Amsterdam. Here's what they had to say.
Looking around Money 20/20 this week, it was easy to see a clear trend going on. Business-facing or business-to-business companies like Airwallex, Payoneer, and ClearBank, dominated the show floor, while consumer apps such as Revolut, Starling, and N26 were nowhere to be found.
"I think many fintechs have pivoted to enterprise sales having found consumer hard to make sufficient unit economics — plus it's pretty expensive to get a stand and attend M2020 so you need to be selling to other attendees to justify the outlay," Richard Davies, CEO of U.K. startup lender Allica Bank, told CNBC.
"B2B is definitely in good shape — both SME and enterprise SaaS [software-as-a-service] — providing you can demonstrate your products and services, have proven customer demand, and good unit economics. Embedded finance certainly is part of this and has a long way to run as it is in its infancy in most cases," Davies said.
B2B fintechs are startups that develop digital financial products tailored to businesses. SaaS is software that tech firms sell to their customers as a subscription. Embedded finance refers to the idea of third-party financial services like bank accounts, brokerage accounts and insurance policies being integrated into other businesses' platforms.
Niklas Guske, who runs operations at Taktile — a fintech start-up focused on streamlining underwriting decisions for enterprise clients — describes the sector as being in the middle of a renaissance for B2B payments and financing.
"There is a huge opportunity to take lessons from B2C fintechs to uplevel the B2B user experience and deliver far better solutions for customers," said Guske. "This is particularly true in SME finance, which is traditionally underserved because it has historically been difficult to accurately assess the performance of younger or smaller companies."
One area fintech companies are getting excited by is an improvement to online checkout tools. Payments technology company Stripe, for instance, says a newer version of its checkout surfaces has helped customers increase revenue by 10.5%.
"That is kind of incredible," David Singleton, chief technology officer of Stripe, told CNBC. "There are not a lot of things you can do in a business that increase your revenue by 10%."
Meanwhile, companies tightening their belts at the event is also a theme.
One employee of a major firm that usually attends the event said they have cut down on the number of people they have sent to Money 20/20 and have not even bought a stand. The employee was not authorized to speak to the media.
Indeed, as companies look to scale as they cut back on spending, many say a key priority is adequately managing risk.
"When funds were readily available, many fintechs could subsidize poor risk assessments with investor money," Guske said of the sector, adding that in today's climate, fintechs are only profitable if they can identify and secure the right customers.
"This is another moment where the proliferation of new data sources and the adoption of sophisticated risk modeling enables fintechs to better target their ideal customers better than ever before," said Guske, who raised more than $24 million from the likes of Y Combinator and Tiger Global.
The main area that drew the most hype from Money 20/20 attendees, however, was artificial intelligence.
That's as ChatGPT, the popular generative AI software from OpenAI which produces human-like responses to user queries, dazzled fintech and banking leaders looking to understand its potential.
In a closed-door session on the application of fintech in AI Wednesday, one startup boss pitched how they're using the technology to be more creative in communications with their customers by incorporating memes into the chat function and allowing its chatbot, Cleo, to "roast" users about poor spending decisions.
Callan Carvey, global head of operations at Cleo, said the firm's AI connects to a customer's bank account to get a better understanding of their financial behavior.
"It powers our transaction understanding and that deeply personalized financial advice," Carvey said during her talk. "It also allows us to leverage AI and have predictive measures to help you avoid future financial mistakes," such as avoiding punchy bank fees you could otherwise avoid.
Teo Blidarus, CEO and co-founder of financial infrastructure firm FintechOS, said generative AI has been a boon to platforms like his, where companies can build their own financial services with little technical experience.
"AI, and particularly generative AI, it's a big enabler for fintech enablement infrastructure, because if you're looking at what are the barriers that low code, no code on one side and generative AI on the other are trying to solve if the complexity of the overall infrastructure," he told CNBC.
"A job that typically would take around one or two weeks can now be completed in 30 minutes, right. Granted, you still need to polish it a little bit, but fundamentally I think it allows you know to spend your time on more productive stuff — creative stuff, rather than integration work."
As businesses hyper-focus on how they can do more with less, both tech-forward and traditional businesses say they have been turning to revenue and finance automation products that handle back-office operations to try to optimize efficiency.
Indeed, Taktile's Guske notes that the current demand to continue scaling rapidly while simultaneously reducing costs has driven many fintechs to reduce operational expenses and improve efficiency through an increase in automation and reducing manual processes, especially in onboarding and underwriting.
"I see the biggest, actual application of generative AI in using it to create signals out of raw transaction or accounting data," said Guske.
One thing's for sure: consumer-oriented services aren't the ones getting the love from investors.
This year has seen major digital banking groups and payment groups suffer steep drops in their valuations as shareholders reevaluated their business models in the face of climbing inflation and higher interest rates.
Revolut, the British foreign exchange services giant, had its valuation cut by shareholder Schroders Capital by 46%, implying a $15 billion markdown in its valuation from $33 billion, according to a filing. Atom Bank, a U.K. challenger bank, had its valuation marked down 31% by Schroders.
It comes as investment into European tech startups is on track to fall another 39% this year, from $83 billion in 2022 to $51 billion in 2023, according to venture capital firm Atomico.
"No one comes to these events to open like a new bank account, right?" Hiroki Takeuchi, CEO of GoCardless, told CNBC. "So if I'm Revolut, or something like that, then I'm much more focused on how I get my customers and how I make them happy. How do I get more of them? How do I grow them?"
"I don't think Money 20/20 really helps with that. So that doesn't surprise me that there's more of a shift towards B2B stuff," said Takeuchi.
Layoffs have also been a massive source of pain for the industry, with Zepz, the U.K. money transfer firm, cutting 26% of its workforce last month.
Even once richly valued business-focused fintechs have suffered, with Stripe announcing a $6.5 billion fundraise at a $50 billion valuation — a 50% discount to its last round — and Checkout.com experiencing a 15% drop in its internal valuation to $9 billion, according to startup news site Sifted.
As Money 20/20 kicked off, the U.S. Securities and Exchange Commission sued crypto exchange Binance and its founder Changpeng Zhao for securities violations. Shortly after, the SEC sued U.S. firm Coinbase alleging it is acting as an unregistered broker and exchange.
It comes after a turbulent year for the crypto industry which has seen failed projects and companies go bankrupt — likely a big part of why few crypto firms made an appearance in Amsterdam this year.
During the height of the most recent bull run, digital asset companies and know-your-customer providers dominated a lot of the Money 20/20 expo hall, but conference organizers tell CNBC that just 6% of revenue came from companies with a crypto affiliation.
Plunging liquidity in the crypto market, paired with a regulatory crackdown in the U.S. on firms and banks doing business with the crypto sector, have altered the value proposition for investing in digital asset integrations. Several fintech executives CNBC interviewed spoke of how they're not interested in launching products tailored to crypto as the demand from their customers isn't there.
Airwallex, a cross-border payments start-up, partners with banks and is regulated in various countries. Jack Zhang, the CEO of Airwallex, said the company will not be introducing support for cryptocurrencies in the near future, especially with the regulatory uncertainty.
"It's very important for us to maintain the high standard of compliance and regulation … it is a real challenge right now to deal with crypto, especially with these global banks," Zhang told CNBC in an interview on Tuesday.
Prajit Nanu, CEO of Nium, a fintech company that has a product that allows financial institutions to support cryptocurrencies, said interest in that service has "fallen off."
"Banks who we power today have become very skeptical about crypto … as we see the overall ecosystem going through this ... difficult time … we are looking at it much more carefully than what we would have looked at last year," Nanu told CNBC in an interview Tuesday.
Blockchain is also no longer the buzzword it once was in fintech.
A few years ago, the trendy thing to talk about was blockchain technology. Big banks used to say that they weren't keen on the cryptocurrency bitcoin but instead were optimistic about the underlying tech known as blockchain.
Banks praised the way the ledger technology could improve efficiency. But blockchain has barely been mentioned at Money 20/20.
One exception was JPMorgan, which is continuing to develop blockchain applications with its Onyx arm. Onyx uses the technology to create new products, platforms and marketplaces — including the bank's JPM Coin, which it uses to transfer funds between some of its institutional clients.
However, Basak Toprak, executive director of EMEA and head of coin systems at JPMorgan, gave attendees a reality check about how limited practical use of the technology is in banking at the moment.
"I think we've seen a lot of POCs, proof of concepts, which are great at doing what it says on the tin, proving the concept. But I think, what we need to do is make sure we create commercially viable products for solving specific problems, sustain customer confidence, solving issues, and then launching a product or a way of doing things that is commercially viable, and working with the regulators."
"Sometimes I think the role of the regulators is also quite important for industry as well." | Banking & Finance |
Labour has promised to hand more powers to Britain's economic watchdog if it wins the next election.
It comes after Liz Truss's mini-budget, delivered without OBR analysis, which led to market chaos and a fall in the value of the pound.
Under the plans, the Office for Budget Responsibility (OBR) would be free to publish forecasts and analysis alongside any tax and spending changes.
Labour said the package would "bring stability back to our economy".
Speaking to the BBC, shadow chancellor Rachel Reeves also said that, under Labour, all major tax and spending decisions would by law be announced in November, to reduce uncertainty for businesses and families.
Currently the government typically set outs budgets in the spring, followed by an autumn statement which can also contain significant measures.
Under Labour's plans, only very minor policy changes would be permitted in a spring update to Parliament.
The OBR usually produces forecasts only twice a year, to accompany the spring budget and autumn statement - but does provide monthly commentary on the economy.
'Never again'
The package, which Labour is dubbing its "fiscal lock", represents an attempt to seize the mantle of fiscal responsibility - and to remind voters of Ms Truss's mini-budget, whose anniversary falls on Saturday.
Some argue that Ms Truss's decision not to ask the independent OBR to assess her measures in advance was a big factor in the economic and political chaos which ensued, bringing about her rapid political demise.
If the government feels it has to rush out new measures without the OBR having time to put together its forecasts - for example in response to a financial crisis or another pandemic - the OBR would be given the power to publish analysis rapidly afterwards, Ms Reeves told the BBC.
"Never again can a chancellor be allowed to repeat the disastrous mistakes of last year's mini-budget," Ms Reeves told the BBC.
The OBR was set up by former Chancellor George Osborne, when the Conservatives entered government in 2010.
Responding to the Labour policy, Andrew Griffith, the economic secretary to the Treasury, said: "The Conservatives created the OBR to curb Gordon Brown's reckless spending binge.
"The current Labour Party is on the same, destructive path with their plan to borrow £28bn a year which would fuel inflation and push up interest rates even further."
The Institute for Government (IfG), a think tank, said Labour's proposals would "improve how fiscal policy is made".
Tom Pope, deputy chief economist at the IfG, said: "The proposed measures to strengthen the OBR's hand are welcome.
"The mini-budget demonstrated the folly of announcing large permanent changes to fiscal policy without an accompanying forecast, and Labour's changes would ensure this could not happen again."
Sign up for our morning newsletter and get BBC News in your inbox. | United Kingdom Business & Economics |
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.
Welcome back to Chain Reaction.
It’s been quite a long week (and it’s not over yet).
Unless you live under a rock, you know that the U.S. Securities and Exchange Commission came out guns blazing on Monday and Tuesday, by suing the two largest crypto exchanges, Binance and Coinbase, respectively.
It’s important to note that the lawsuits were fairly different, although both exchanges faced securities laws violations. In the Binance suit, the exchange and its CEO Changpeng Zhao as well as two other parties are facing 13 charges including lying to regulators about its operations.
Binance’s attorneys from Gibson Dunn and Latham & Watkins alleged that SEC Chair Gary Gensler offered to be an advisor to its crypto exchange in 2019, when Gensler was teaching at Massachusetts Institute of Technology’s Sloan School of Management, a filing on Wednesday stated.
The SEC’s investigations into Binance began in 2020 and 2021, about a year after Gensler and Zhao allegedly last spoke.
Given the claimed ties between Gensler and Binance and Zhao, the exchange’s lawyers asked the SEC for his withdrawal from any actions regarding the company, but the attorney’s said they haven’t gotten a response from the agency.
Separately, the SEC’s lawsuit against Coinbase came less than 24 hours after the Binance one, but was focused on the exchange operating as an unregistered securities exchange, broker and clearing agency, the agency alleged.
Both filings listed a handful of cryptocurrencies as securities, with 12 assets noted in the Binance suit and 13 in the Coinbase one, though the SEC said it was “not limited to” those.
Even through all this chaos, crypto markets weren’t hugely altered by the SEC suits. In the initial 24 hours after the two lawsuits, the crypto market was green.
But since then, the two largest cryptocurrencies by market capitalization, Bitcoin and Ether, fell 2% and less than 1%, respectively, over the past seven days, CoinMarketCap data showed. The global crypto market cap decreased 2.7% to $1.1 trillion, during the same time frame.
I’ve spoken with countless sources, read far too many court documents and interviewed Coinbase’s chief legal officer Paul Grewal to make sense of this week’s pandemonium. More details and deep dives can be found below in chronological order.
This week in web3
The charges also included misleading investors about Binance’s systems to detect and control manipulative trading; regulators say that the exchange didn’t take proper steps to restrict U.S.-based investors from accessing its platform. The SEC also alleges that cryptocurrency BNB and stablecoin BUSD are securities. Binance claimed in a post on Monday it actively cooperated with the SEC’s investigations and recently engaged in discussions to reach a “negotiated settlement to resolve their investigations,” however the SEC “abandoned that process and instead chose to act unilaterally and litigate.”
A number of sources that TechCrunch+ spoke to on Monday shared similar sentiments that the charges against Binance were unsurprising. Binance.US has been in “hot water for a while,” Chris Martin, head of research at Amberdata, said. “Just look at the CFTC suit against them, which appears to have been a warning shot.” The SEC’s action comes a few months after the CFTC filed a lawsuit against Binance and Zhao for allegedly evading U.S. rules by offering unregistered futures and options contracts to American traders.
In the Binance lawsuit, the SEC alleged that the exchange’s cryptocurrency BNB and stablecoin BUSD were securities in addition to 10 other cryptocurrencies: Solana’s SOL, Cardano’s ADA, Polygon’s MATIC, Filecoin’s FIL, Cosmos’ ATOM, Sandbox’s SAND, Decentraland’s MANA, Algorand’s ALGO, Axie Infinity’s AXS and Coti’s COTI. What made the agency highlight these cryptocurrencies, and not the hundreds of others tradable assets on the exchange, is unclear.
The SEC has lately taken an increasingly active role in the burgeoning blockchain sector, and previously served Coinbase with a Wells notice in April. Coinbase, in contrast, has taken a publicly defiant tone, arguing that the crypto market deserves a tailored package of rules. The SEC, however, disagrees, apparently determined on applying existing securities law to the American company.
If it wasn’t clear, the waters have been very hot in the crypto industry this week, thanks to the SEC. The industry is asking why these suits took so long to come to fruition, why some crypto assets are being labeled as securities and not others and whether the SEC’s actions will impact domestic and global fintech innovation — all of which SEC Chair Gary Gensler tried to address in a live interview with CNBC on Tuesday morning. “This is about both investors and issuers in the crypto space, to bring them into compliance.”
After the SEC filed 13 charges against Binance and CEO Changpeng Zhao, as well as BAM Trading and BAM Management, it has requested a temporary restraining order to freeze assets for all of the parties involved, according to a filing on Tuesday. The filing shows that the motion was granted.
We sat down with Paul Grewal, chief legal officer at Coinbase, to learn more about the company’s operations going forward, how it plans to deal with the legal process, its level of confidence amid the crackdown and plans for best and worst case scenarios. (The whole interview has also been shared in a bonus Chain Reaction episode.)
The latest pod
Grewal has been at Coinbase, the second largest crypto exchange globally, for almost three years. Previously he was the vice president and deputy general counsel at Facebook, among other roles.
This week, Grewal has been busy testifying before Congress and addressing recent legal ramifications Coinbase faced.
We dove into:
- Potential crypto legislation from Congress
- U.S. agencies’ sentiment toward digital assets
- Future of assets listed on its exchange
- Binance’s SEC case
He’s a five-time New York Times bestselling author and previously created Wine Library, one of the first e-commerce platforms for alcohol, in the early 2000s. In 2009, he co-founded VaynerMedia with his younger brother AJ, and today the company services clients like PepsiCo, GE, Johnson & Johnson, Chase and others.
Gary Vee is a “die hard” New York Jets fan (and wants to buy the team one day), as well as an investor in a handful of major companies like Twitter, Venmo and Facebook — which we talk about in the episode.
We discussed a handful of topics surrounding the NFT ecosystem, how Gary Vee got into the space and gained traction for his collection, and where he sees the sector going long term.
We also talked about:
- The VeeFriends origin story
- The importance of intellectual property
- Mainstream adoption
- The future of NFTs
- Advice for other projects
Follow the money
- Aave’s Lens Protocol raises $15 million to build the decentralized social web
- Taiko Labs raises $22 million across two rounds to build a decentralized, Ethereum-equivalent ZK-Rollup
- Haun Ventures led $10 million round for crypto game developer Argus Labs
- Meanwhile, a Bitcoin-focused life insurance provider, raises $19 million at $100 million valuation
- Cosmos ecosystem-focused Informal Systems raises $5.3 million
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here. | Crypto Trading & Speculation |
Britain Faces Recession And Flood Of Job Losses If Rates Hit 6%
Economists now fear the BOE will have no choice but induce a downturn to curtail inflation, which is coming down more slowly than Governor Andrew Bailey and his colleagues expected.
(Bloomberg) -- Economists are warning that the UK economy faces a sharp recession and a flood of job losses if interest rates hit the 6% level financial markets believe is on the cards.
Household budgets are under increasing strain again as mortgage costs spike, while rocketing corporate insolvencies suggest firms, particularly the smaller ones that account for the bulk of employment, are struggling to cope with higher borrowing costs.
The UK has so far weathered the cost of living crisis without falling into recession. The growth outlook was even upgraded recently by the International Monetary Fund. But economists now fear the BOE will have no choice but induce a downturn to curtail inflation, which is coming down more slowly than Governor Andrew Bailey and his colleagues expected.
Markets expect another quarter point hike next week to 4.75% and for rates to reach 5.75%, or possibly even 6%, next year. That would be a 22 year high and add £250 ($321) a month to the average mortgage payment, according to the Resolution Foundation – five times more than the saving from the recent drop in energy prices.
Neal Hudson, a property market analyst at BuiltPlace, has calculated that homeowners would be spending almost a quarter of their income on mortgage costs, up from 17% in 2020, with rates at 6%. For those who have to remortgage at the higher rates, or who are on tracker deals, the cost of living crisis will feel more severe than during the energy price shock.
“If the Bank does push rates up as much as markets expect there will be a recession,” said Gerard Lyons, chief economist at wealth manager Netwealth. Erik Britton, chief executive of Fathom Consulting, agreed: “A recession is in the post if rates hit 6%.”
Mortgage borrowers already are hurting from the 12 rate rises the BOE has delivered since 2021, putting the benchmark lending rate at its highest since 2008. That along with jitters in financial markets has driven up the cost of both mortgages and business loans, with both Britton and Rob Wood, chief UK economist at Bank of America Merrill Lynch, saying the corporate sector is near a tipping point.
They fear that a spike in insolvencies will drive up unemployment and trigger a second wave of layoffs as companies that are currently hoarding labor due to worker shortages let people go. Consumer spending would collapse at that point, and a downturn would be inevitable. House prices would crash as people who could no longer meet their mortgage payments turn forced sellers.
Megan Greene, who joins the BOE’s rate-setting committee next month, told Parliament this week that an “abrupt” end to “labor market hoarding … would have significant implications for consumer confidence and for consumption and could prompt a recession.”
As companies released staff they were hanging on to, unemployment would suddenly spike, said Raghuram Rajan, a former International monetary fund chief economist and professor of finance at University of Chicago Booth School of Business.
“Then you have more unemployment than you want, because these things move in a non-linear fashion. Unemployment is terrible for demand and terrible for housing because unemployed workers who can’t make their mortgage payments will sell.”
It’s a gloomy scenario that Britain may well avoid. Most economists think rates will peak below the levels markets have priced in. The current worries among investors were triggered after a jobs market report showed inflationary pressures remained much stronger than expected, and figures due in the next few weeks could well surprise to the downside.
Even so, the outlook puts Prime Minister Rishi Sunak in a tough position ahead of an election widely expected next year. While he shares the BOE’s determination to rein in runaway prices, the bitter medicine of a recession could hurt him at the polls.
Rate rises are almost as much a constraint on what the government can offer to voters as they are on households. The Liberal Democrats have called for a £3 billion mortgage support fund to help distressed borrowers but every percentage point increase in rates adds £20 billion to cost of servicing the government debt. With only £6.5 billion to spare in March, Chancellor Jeremy Hunt has no room to move without blowing up his fiscal rules.
Even without a recession, the BOE estimates the UK’s medium-term growth prospects point to a sputtering expansion of 1% a year, slow enough that living standards will slip behind G-7 nations.
As higher borrowing costs squeeze households, consumer spending will fall and consumer price inflation should decline with it. But Wood said the pass through will be slower than in previous cycles because so many people are on fixed term mortgages these days. He estimates consumer spending will shrink just 0.5%. If the same proportion of borrowers were on floating rates today as in the 2008 financial crash, the impact would be three times worse.
Although many individuals will suffer, the aggregate economic impact only becomes catastrophic if people start losing their jobs consumer demand dries up on a far wider scale, Wood said.
For that reason, Wood and Britton believe the trigger for a recession this time be in the corporate sector. Fathom analysis shows that 12% of publicly listed UK companies are already technically “zombies,” unable to pay interest costs out of earnings. The proportion will double with rates at 6%, Britton said. At that point a quarter of listed businesses would be struggling to survive.
Official government figures Friday showed insolvencies at a new high, up 40% compared with last year. “Interest rates and inflation will continue to create challenges for businesses over the summer, and could be the tipping point for those business hanging in there,” said Nicky Fisher, president of R3, the UK’s insolvency and restructuring trade body.
According to Naresh Aggarwal, associate director at the Association of Corporate Treasurers, businesses with lots of debt, such as those backed by private equity and those in interest-rate sensitive sectors like property, are already struggling to get hold of credit.
“Larger businesses that are in good shape are now much more wary of credit risk across their supply chain,” he added.
Central banks have been trying to strike the perfect balance between tightening financial conditions enough to bring down inflation and going so far that they cause a crash. Persistently high prices and wages keep piling the pressure on the BOE to raise rates further, though, adding to the risk of a “policy error” of doing more harm than necessary, said George Buckley, European economist at Nomura.
In that event, Britton said the BOE would only have itself to blame for not moving against inflation fast enough early last year. “The BOE left it too long and was too vague about what it was trying to achieve,” Britton said. “A deep recession will be seen as a failure.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Unemployment |
H&M has joined a growing list of retail stores that have begun charging customers to return their online purchases by taking the cost out of their total refund. The retailer started testing charging for returned items in September of last year in the U.S. but has now branched out to the UK with other local stores including Zara and Uniqlo to cut down on costs.
Customers in the UK are now required to pay a £1.99 ($2.47) return fee for each returned parcel, which is still a significant difference from the $5.99 customers are required to pay H&M in the U.S. The change won’t apply to in-store returns or to H&M members and was first implemented to cut costs, with the company telling CNN last year that it would be testing out paid returns in several markets.
“It all depends on how it’s received by the customer. So that’s why we do a test to see if that is something to fast track,” Helena Helmersson, H&M’s CEO said during an earnings call with analysts, CNN reported at the time. “If we’re about to roll it out, it will take some time,” she said. “We don’t have an exact time limit on it. But again, let’s see when we see the evaluation of the tests, whether this is the most impactful thing to do or not.”
By charging for returns, H&M could cut back on the amount of carbon emissions it puts out, cutting back on the negative environmental impact created by mass returns which doubles down on the amount of pollution it puts out. Carbon dioxide emissions grew from 15 to 24 million metric tons in the U.S. from returned goods alone between 2019 and 2022, with up to half of the clothing purchased online being returned to the store, The Guardian reported.
“It’s interesting that companies seem to be doing it by stealth, but it’s a sensible thing to be doing,” retail expert Jonathan De Mello told the BBC. “It makes economic sense, as it discourages shoppers from bulk buying online products and then returning the majority of them. That’s been a real problem for companies.”
H&M’s UK website tells shoppers they “will not be charged the fee if an item is determined to be faulty or incorrect” and requests they notate that when they’re inputting their return information. H&M also appears to be enticing customers to become members, meaning they won’t be required to pay the £1.99 return fee.
“Particularly in the cost of living crisis, retailers need to work harder to retain customers, as people are keen to shop around for the best deals,” De Mello told the BBC. “Loyalty is fickle, but if you can provide clear incentives, such as free returns, then you’re more likely to retain your customers.” | Consumer & Retail |
Brussels on Tuesday asked EU member states to back a 50-billion-euro ($55-billion) package to support Ukraine over the next four years, as part of a boost to the bloc’s budget.
“This financial reserve will allow us really to calibrate our financial support according to the evolution of the situation on the ground,” European Commission chief Ursula von der Leyen said.
The proposal from the European Commission, the EU’s executive arm, is aimed at helping prop up Kyiv’s finances and covering immediate reconstruction costs caused by Russia’s war.
The money, 33 billion euros ($36 billion) in loans and 17 billion ($18.5 billion) in grants, is part of the review to plug gaps in the EU’s budget for the period 2024-2027 left by the fallout of the COVID pandemic and the conflict.
Ukraine’s Prime Minister Denys Shmygal thanked von der Leyen “for such steadfast commitment to supporting Ukraine.”
The amount still could represent less each year than the 18 billion euros ($19.6 billion) the EU has committed towards Ukraine government expenditures in 2023.
Overall, the EU has already committed 30 billion euros ($32.7 billion) from its budget to support the country since Russia’s all-out invasion in February 2022.
The money for Ukraine is expected to be dependent on reforms to strengthen its judiciary and tackle corruption that are intended to spur Kyiv along the path to joining the EU.
The proposal comes ahead of a major donor conference in London this week on paying for Ukraine’s reconstruction.
The World Bank in March estimated Ukraine’s long-term reconstruction costs at over 380 billion euros ($415 billion).
As part of its budget review, Brussels is also asking for 15 billion euros ($16.3 million) more to help manage immigration and 10 billion euros ($10.9 billion) to subsidize key industries.
But the demands for a fresh injection of money will face some serious headwinds from EU countries still grappling with the consequences of the pandemic and war.
All 27 member countries have to agree to increasing the budget. Leaders are set to kickstart the discussions at a summit next week.
“We are fully aware of the fact that member states were also hit by the crises and after years of large public support to their economies it is now time for them for consolidating,” von der Leyen said.
“We come today with a very targeted and limited proposal for the absolute must.”
The EU’s initial seven-year budget agreed in 2020 was 1.07 trillion euros ($1.17 trillion).
But von der Leyen insisted that the global turmoil seen since then had necessitated the new demands.
“We saw three years of crisis after crisis,” the commission president said.
“So we are in a completely different world compared to 2020.” | Europe Business & Economics |
- Donald Trump Jr. is expected to return to the witness stand in the $250 million civil fraud trial of former president Donald Trump's New York business empire.
- The testimony comes days after Judge Arthur Engoron did not rule on another request from Trump's defense lawyer for a directed verdict that would have immediately thrown out the fraud claims.
- New York Attorney General Letitia James accuses Trump, his sons and his company of fraud, and wants to permanently bar the Trumps from running a business in the state.
Donald Trump Jr. is expected to return to the witness stand Monday as the defense kicks off its case in the $250 million civil fraud trial taking aim at former president Donald Trump's New York business empire.
Defense attorneys will lay out their case four days after failing in their latest bid to have New York Attorney General Letitia James' fraud claim thrown out.
James accuses Trump Sr., his adult sons Trump Jr. and Eric Trump, the Trump Organization and its top executives of fraudulently inflating the values of Trump's assets in order to boost his net worth and reap an array of financial benefits.
The AG seeks around $250 million in damages and wants to permanently bar Trump and his sons, who took over the Trump Organization after their father became president in 2017, from running another New York business.
Manhattan Supreme Court Judge Arthur Engoron has already ruled that the defendants are liable for fraudulently misstating the values of real estate properties and other assets on Trump's financial records. Engoron's pretrial ruling also ordered the cancellation of the defendants' New York business certificates, though an appeals court has temporarily blocked that order from taking effect.
The trial, which is being conducted without a jury, will determine penalties and resolve other claims in James' lawsuit.
State lawyers rested their case in chief last week, following testimony from Trump and three of his adult children. Ivanka Trump, who in June was dismissed as a defendant by an appeals court, was the last of more than two dozen witnesses questioned on the stand by the state.
In his first round on the stand in early November, Trump Jr. testified that he was not involved in preparing the so-called "statements of financial condition" at the heart of James' case. He said he relied on accountants employed by the company, primarily Donald Bender, a former Trump family accountant.
Bender had previously testified that the information he used to assemble the financial statements was provided to him by the Trump Organization.
Trump Jr. is expected to testify Monday and Tuesday. He will be questioned by defense attorneys, after which James' attorneys will also have the opportunity to cross-examine him.
Last week, defense lawyers requested to have the case thrown out, arguing that the AG's office had not established any victim or injury in the case. They pointed to the fact that the loans obtained via the disputed financial statements were paid back on time and with interest.
Engoron has already rejected this argument, saying last month that the case contained enough evidence to "fill the courtroom."
This is developing news. Please check back for updates. | Real Estate & Housing |
A bipartisan pair of senators unveiled a bill Wednesday to ban stock ownership by lawmakers and administration officials. The Hill reports: The bill, introduced by Sens. Kirsten Gillibrand (D-N.Y.) and Josh Hawley (R-Mo.), would establish firmer stock trading bans and disclosure requirements for lawmakers, senior executive branch officials and their spouses and dependents. The bill would ban congressional members, the president, vice president, senior executive branch members, and their spouses and dependents from holding or trading stocks, with no exception to blind trusts. Congressional members who violate this ban would be required to pay at least 10 percent of the banned investments.
The legislation also establishes harsh penalties for executive branch stock trading, requiring executive branch officials to give up profits from covered finance interests to the Department of Treasury, while also facing a fine from the Automatic Special Counsel. Congressional members, senior congressional staff and senior executive branch employees would also be required to report if they, a spouse or a dependent applies for or receives a "benefit of value" from the federal government, including loans, contracts, grants, agreements and payments. If they fail to file, they will face a $500 penalty.
The bill aims to increase transparency, requiring public databases of personal financial disclosures and financial transaction filings required by the STOCK Act, which prohibits members of Congress from using insider information when buying and selling stocks. The penalty for the failing to file STOCK Act transaction reports would also increase from $200 to $500.
The legislation also establishes harsh penalties for executive branch stock trading, requiring executive branch officials to give up profits from covered finance interests to the Department of Treasury, while also facing a fine from the Automatic Special Counsel. Congressional members, senior congressional staff and senior executive branch employees would also be required to report if they, a spouse or a dependent applies for or receives a "benefit of value" from the federal government, including loans, contracts, grants, agreements and payments. If they fail to file, they will face a $500 penalty.
The bill aims to increase transparency, requiring public databases of personal financial disclosures and financial transaction filings required by the STOCK Act, which prohibits members of Congress from using insider information when buying and selling stocks. The penalty for the failing to file STOCK Act transaction reports would also increase from $200 to $500. | Stocks Trading & Speculation |
Michael M. Santiago/Getty Images
toggle caption
After a monthlong trial, New York City jury found former FTX CEO Sam Bankman-Fried guilty of seven criminal counts, including securities fraud.
Michael M. Santiago/Getty Images
After a monthlong trial, New York City jury found former FTX CEO Sam Bankman-Fried guilty of seven criminal counts, including securities fraud.
Michael M. Santiago/Getty Images
The highest-profile cryptocurrency trial is over, and the crypto industry is eager to move on. But that isn't going to be easy.
Earlier this month, a New York City jury found the disgraced crypto mogul Sam Bankman-Fried guilty of seven criminal counts, including money laundering and securities fraud.
As the co-founder and former CEO of the cryptocurrency exchange FTX awaits a sentencing hearing scheduled to take place in March, Bankman-Fried still casts a long shadow on the industry he helped make. FTX filed for bankruptcy exactly one year ago, on Nov. 11, 2022.
Bankman-Fried and FTX introduced millions of people all over the world to Bitcoin, Ethereum and other cryptocurrencies, and his company spent a lot of money — on sponsorships, endorsement deals and a Super Bowl ad — to make FTX a household name, and to promote crypto more broadly.
Today, the industry wants to rekindle interest in cryptocurrencies. But regulators and many retail investors remain deeply skeptical.
"It's very hard for the industry to really disassociate itself completely from FTX," says Yesha Yadav, an expert on digital assets at Vanderbilt Law School. "I think the FTX debacle tainted and diminished the cryptocurrency industry."
FTX's implosion and Bankman-Fried's subsequent downfall deepened a market downturn that is referred to as a "crypto winter." One year later, they are still having a chilling effect, but there is optimism among crypto businesses and boosters that there could be a thaw soon.
Here are where things stand in crypto on the anniversary of FTX's collapse.
Crypto players try to move on
Despite skepticism in large parts of the financial sector, the crypto industry is trying hard to isolate itself from Bankman-Fried's troubles.
Key players acknowledge the seriousness of the fraud he committed, and the charges against him, but they argue they were the actions of an individual bad actor.
"The industry moved on from SBF long before the verdict was read," says Kristin Smith, the CEO of a crypto trade group called the Blockchain Association. "Sam's crimes had nothing to do with the technology underpinning blockchain networks and digital assets. This is about a crook, not crypto."
Yadav says that as soon as the jury announced its verdict on Nov. 2, the industry began to argue that crypto post-SBF is safe, that it isn't "tainted by all this kind of fraud and misappropriation."
"I think there are a lot of people who are really, really happy and delighted he has been convicted," says Yadav, adding the verdict is a way for them to "showcase to customers that bad actors have been removed."
There are signs that strategy is working.
In recent weeks, the price of Bitcoin has started to climb again. Even a virtual currency Bankman-Fried created out of whole cloth, called the FTX Token, or FTT, has gained ground.
Bitcoin is now trading around $36,000, which is about half its all-time high, but more than twice as high as it was at the beginning of the year.
But other financial industry experts remain wary crypto can make a comeback.
Though crypto proponents like to tout their industry as the future of finance, many are dubious. By design, the crypto economy is supposed to be borderless, built to operate outside the boundaries of traditional finance.
According to Timothy Massad, the former chairman of the Commodity Futures Trading Commission (CFTC), the collapse of FTX did lessen some of the wild speculative bets that characterized the crypto market during the company's heyday.
But he isn't completely convinced by what he's seen so far.
"I don't think the use case for a lot of what's been developed in this sector has really been proven," says Massad, who now runs the Digital Assets Policy Project at Harvard University. "I do think it's an interesting technology that may have very useful applications, but there are a lot of things that don't really have that much utility."
Because their prices are so volatile, cryptocurrencies aren't useful as mediums of exchange, and the fraud at FTX only heightened fears about the safety of digital assets. The company funneled billions of dollars from customers without their knowledge.
And despite what Bitcoin's boosters claimed, that the cryptocurrency would be a hedge against high inflation, that hasn't proven to be the case. When the rate of inflation rose, Bitcoin's value plummeted.
Industry backers are playing up the potential uses of blockchain technology that underpins crypto trading. They say the blockchain, a decentralized, public ledger that records transactions, has wider applications. In the future, companies say, it will improve how hospitals store and share medical records, and how insurers track claims.
Win McNamee/Getty Images
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Chair Gary Gensler has cracked down on the crypto companies during his tenure as chair of the Securities and Exchange Commission.
Win McNamee/Getty Images
Chair Gary Gensler has cracked down on the crypto companies during his tenure as chair of the Securities and Exchange Commission.
Win McNamee/Getty Images
Massad says there is a need for clearer, crypto-specific regulations. As he surveys the crypto landscape, he still sees a lot of speculative activity, scams and frauds, and he believes that new regulations could remove some of that digital dreck.
Regulators remain deeply concerned
One of the main difficulties of the crypto industry is that it's still so new — Bitcoin was introduced in 2008 — and it operates in a regulatory gray area.
So far, Congress has failed to pass any meaningful legislation on cryptocurrency, and U.S. financial regulators have grown tired of waiting for it.
In recent months, the Securities and Exchange Commission (SEC) and the CFTC have brought more enforcement actions. In recent months, they've gone after other crypto exchanges, like Coinbase, Kraken and Binance.
Patrícia de Melo Moreira/AFP via Getty Images
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As part of a broad crackdown on the crypto industry, the Securities and Exchange Commission has sued Binance, and its co-founder and CEO, Changpeng Zhao.
Patrícia de Melo Moreira/AFP via Getty Images
As part of a broad crackdown on the crypto industry, the Securities and Exchange Commission has sued Binance, and its co-founder and CEO, Changpeng Zhao.
Patrícia de Melo Moreira/AFP via Getty Images
The SEC has accused Binance of operating an unlicensed exchange, and says it sits atop a sprawling and shadowy web of corporate subsidiaries.
The SEC and the CFTC are using their existing law enforcement authority and decades-old laws to crack down on crypto companies.
But as the 2024 election approaches, it's less likely crypto legislation will be among Congress' top priorities.
At the same time, crypto isn't going anywhere
Despite tensions between regulators and lawmakers and industry, there are signs crypto is continuing to evolve.
On Wall Street, the major banks continue to take crypto seriously. Even though the size of the cryptocurrency market is a fraction of, say, the stock market or the commodities market, financial firms like Citigroup and JPMorgan Chase have analysts and strategists who are focused on crypto.
And cryptocurrencies have become more accessible.
Earlier this year, Fidelity announced it would allow customers to add Bitcoin to their retirement portfolios.
And after a recent court decision, there is new optimism among asset managers that the SEC will approve an exchange-traded fund that tracks the cryptocurrency's price.
For mom-and-pop investors who are interested in Bitcoin, but don't want to hold the asset itself, investing in a regulated, structured security could be appealing.
Twelve companies, including BlackRock, Invesco and Fidelity, have applications before the SEC to introduce crypto ETFs. Regulators there could decide whether to approve them any day now. Previous applications were rejected. The SEC said the market was too susceptible to manipulation.
And one year after FTX filed for bankruptcy, it is poised to make a comeback of sorts.
This week, The Wall Street Journal reported three companies are vying to purchase the remains of the defunct cryptocurrency exchange with the hope of rebooting it. | Crypto Trading & Speculation |
Today, the US Treasury Department announced that taxpayers will have the choice to go paperless for all Internal Revenue Service (IRS) correspondence in the upcoming 2024 filing season.
By 2025, the IRS plans to achieve paperless processing for all tax returns, still accepting paper documents but immediately digitizing them, in order to "cut processing times in half" and "expedite refunds by several weeks," the Treasury Department said.
"The IRS receives about 76 million paper tax returns and forms and 125 million pieces of correspondence, notice responses, and non-tax forms each year, and its limited capability to accept these forms digitally or digitize paper it receives has prevented the IRS from delivering the world-class service taxpayers deserve," the Treasury Department said.
By accelerating paperless processing, the IRS expects to simplify how Americans access their taxpayer data and save millions historically spent on storing more than a billion documents. Digitization can also help eliminate errors, the Treasury Department said, which can "result from manually inputting data from paper returns." And it will help taxpayers more quickly get answers to questions, as IRS customer service employees "do not currently have easy access to the information from paper returns." Starting in 2024, they will.
Next filing season, taxpayers will have the option to e-file 20 additional tax forms among the most commonly submitted when amending returns, including forms used to submit information on things like identity theft or proof of eligibility for "key credits and deductions that help low-income households."
"Taxpayers who want to submit paper returns and correspondence can continue to do so," the Treasury Department said, but "all paper will be converted into digital form as soon as it arrives at the IRS." In 2024, the IRS estimates that "more than 94 percent of individual taxpayers will no longer ever need to send mail to the IRS."
Once taxpayers arrive at the 2025 filing season, they'll have the option to e-file "an additional 150 of the most used non-tax forms," the Treasury Department said, which "will be available in digital, mobile-friendly formats that make them easy for taxpayers to complete and submit."
The IRS prioritized mobile-friendly formats because the agency estimates that "15 percent of Americans rely solely on mobile phones for their Internet access."
Crunching data to audit wealthy tax evaders
Seemingly not everyone will be stoked to see the IRS go totally paperless. The Treasury Department said that combining paperless processing with "an improved data platform" will make it easier for data scientists to extract and analyze data—potentially detecting tax evasion that the IRS has long overlooked due to a lack of resources.
"When combined with an improved data platform, digitization and data extraction will enable data scientists to implement advanced analytics and pattern recognition methods to pursue cases that can help address the tax gap, including wealthy individuals and large corporations using complex structures to evade taxes they owe," the Treasury Department said.
Back in April, the Treasury Department said that "improving enforcement among high-income and high-wealth individuals, complex partnerships, and large corporations that are not paying the taxes they owe" could end up flagging $160 billion owed but evaded annually.
"Due to a lack of resources and loss of top talent, audits of the wealthy and large corporations have plummeted over the last decade, and the amount of taxes evaded by the top 1 percent has exploded to $160 billion per year," the Treasury Department reported in April. "Audit rates for millionaires fell by 77 percent, audit rates for large corporations fell by 44 percent, and audit rates for partnerships fell by 80 percent between 2010 and 2017."
Treasury Secretary Janet Yellen said that updating the IRS technology was crucial to reduce the tax gap and ensure that "high earners play by the same rules as working and middle-class families."
Ars reached out to several organizations representing tax professionals and accountants to see how the IRS going paperless would impact individuals and corporations during the next filing season and will update this report as more information becomes available.
The IRS updates are funded by provisions included in the Inflation Reduction Act (IRA), which provides separate funds from the IRS annual budget funds that Republicans in Congress are actively seeking to slash, Reuters reported. However, last month, IRS Commissioner Danny Werfel warned that budget cuts could reduce the IRS's ability "to ramp up tax collections on millionaires," Reuters reported.
Yellen has said that budget cuts could also slow down the digitization process and hamper efforts to improve customer service.
Beefing up IRS data security
Recently, popular e-filing services have come under fire over data privacy concerns. Last month, Congress said that H&R Block, TaxAct, and TaxSlayer could be fined billions for "recklessly" sharing potentially hundreds of millions of taxpayers' sensitive personal and financial data with Google and Meta "for years" in apparent violation of laws.
To some taxpayers, e-filing and conducting all correspondence online directly with the IRS could provide more assurances of data privacy and security.
The Treasury Department said in April that recent technology investments include funds that will "also allow the IRS to continue to meet and enforce industry and government-wide cybersecurity standards and ensure continued protection of taxpayer data." That includes "system-wide technology upgrades the IRS has lacked the resources to do" in the past. | Banking & Finance |
By Pietro Lombardi and Andres Gonzalez
MADRID/LONDON (Reuters) - Inditex founder Amancio Ortega's investment firm Pontegadea is pushing further into renewable energy, closing in on a deal with Repsol to buy a 49% stake in its wind farms and photovoltaic power plants in Spain, two sources familiar with the deal told Reuters.
The Spanish fashion retail billionaire's potential acquisition would expand Pontegadea's investments in renewable energy. His family office has already bought minority stakes in energy assets, such as a 5% stake in Spanish gas grid operator Enagas's renewable and hydrogen unit Enagas Renovable.
The Repsol renewable projects up for sale have a total capacity of about 600 megawatts and the transaction values them around 700 million euros ($747.18 million), sources said. The agreement may come as soon as next week, one of the sources said.
A Repsol spokesperson declined to comment.
"As usual, we do not have any comments on rumours about market operations while they are open," a spokesperson for Pontegadea said.
The deal is in line with Repsol's strategy to fund its shift from oil and gas to renewables by selling minority stakes in renewable projects. Other companies, such as Spanish utility Iberdrola, are following the same script, raising cash to invest in new projects by selling stakes in more advanced ones.
The Spanish oil company has sold stakes in other projects to Pontegadea. In 2021, Repsol sold Pontegadea a 49% stake in a separate wind farm for 245 million euros.
Pontegadea booked a net profit of 2 billion euros last year, up from 1.6 billion euros in 2021, mainly due to dividends from Inditex.
($1 = 0.9369 euros)
(Reporting by Pietro Lombardi and Andres Gonzalez, editing by Inti Landauro and Louise Heavens) | Renewable Energy |
WASHINGTON (AP) — U.S. government officials on Wednesday started cracking down on the co-founders of the virtual currency mixer Tornado Cash, just days after a federal judge decided that the government had the authority to sanction them.
Treasury’s Office of Foreign Assets Control sanctioned Russian national Roman Semenov, one of the three co-founders of Tornado Cash, for allegedly supporting the North Korean hacking organization Lazarus Group, among other things.
Also Wednesday, the Justice Department unsealed an indictment charging Semenov and Tornado Cash co-founder Roman Storm, from Auburn, Washington, with conspiracy to commit money laundering, operating an unlicensed money transmitting business and other crimes. Storm was arrested in Washington on Wednesday by federal officials.
Semenov is believed to be in Dubai.
Tornado Cash and other mixing services combine various digital assets, including potentially illegally obtained funds along with legitimately obtained funds, so that illegal actors can obscure the origin of the stolen funds.
Tornado Cash was sanctioned in August 2022, accused of helping to launder more than $7 billion worth of virtual currency since its creation in 2019. The Justice Department says Tornado Cash facilitated more than $1 billion in money-laundering transactions, including hundreds of millions for Lazarus Group. Treasury says Tornado Cash systems were used, among other things, to launder more than $96 million drawn from the June 2022 Harmony blockchain bridge theft and August 2022 Nomad crypto firm heist.
Federal prosecutors also charged Semenov and Storm with violating the sanctions against Tornado Cash.
Brian Klein, an attorney at Waymaker LLP, who represents Storm, said “we are incredibly disappointed that the prosecutors chose to charge Mr. Storm because he helped develop software, and they did so based on a novel legal theory with dangerous implications for all software developers.”
Klein said his client has been cooperating with the prosecutors’ investigation since last year and disputes that he engaged in any criminal conduct.
The penalties and arrest come after U.S. District Judge Robert Pitman decided Aug. 17 that Treasury did not overstep its authority in sanctioning Tornado Cash. A group of crypto investors brought a lawsuit against Treasury in September 2022, alleging that Treasury overstepped its authority in sanctioning Tornado Cash.
The sanctions faced strong pushback from the crypto industry, which argued that the sanctions open the door to limiting Americans’ usage of privacy software.
A third co-founder of Tornado Cash, Alexey Pertsev, was arrested in August 2022 on money laundering charges in the Netherlands.
Legal representatives for Semenov and Pertsev were not immediately available for comment.
Last May, the U.S. sanctioned North Korean digital currency mixing firm Blender.io, which the country allegedly uses to launder stolen virtual currency and support cyber crimes.
Blender is accused of helping Lazarus Group to carry out a $620 million digital currency heist in March, the biggest of its kind to date.
—-
Associated Press reporter Larry Neumeister in New York and Frank Bajak in Boston contributed to this report.
Fatima Hussein, The Associated Press | Crypto Trading & Speculation |
As the ongoing response to last week'sramps up on Maui, the Hawaiian governor has vowed again to work with government officials to prevent residents from falling prey to opportunistic and potentially predatory offers to buy their land.
"My intention from start to finish is to make sure that no one is victimized from a land grab that we do not suffer predation against those who are suffering," Gov. Josh Green said Wednesday. Green told reporters that he has directed the state attorney general to work toward imposing a moratorium on the sale of Maui properties that were either damaged or destroyed in the blazes.
Officials previously estimated that about— most of them residential — were impacted by the fires, which tore through parts of West Maui and the island's inland Upcountry region and hit Lahaina, a commercial and cultural center, particularly hard, with the governor suggesting last week that of the historic coastal town had been decimated.
Green acknowledged Wednesday that actually imposing a moratorium on real estate transactions presents "some legal challenges" that the government is prepared to fight to prevent "transactions that take advantage of our people" and "make sure that people don't lose their land here in Hawaii." He said more details about how they plan to do that should come by Friday.
"That doesn't mean that we don't want people to come and invest in Hawaii and travel to Hawaii away from the impact zone," Green continued. "What it means is people are right now traumatized. Please don't approach them with an offer to buy land. Please don't approach their families to tell them that they're going to be better off if they make a deal. Because we're not going to allow it."
The governor said he would move to restrict land purchases if necessary.
Green said earlier this week that the state government in Hawaii would consider ways to acquire land on Maui "to protect it for our local people so it's not stolen" by people from the mainland United States. The governor's office initially addressed concerns on Monday abouttargeting Maui residents who own fire-damaged properties on the island, saying, "Residents are being approached about selling fire-damaged home sites, by people posing as real estate agents who may have ill intent."
In a news release issued the same day, officials at the Hawaii Department of Commerce and Consumer Affairs told homeowners on Maui to exercise caution and report any "unsolicited offers to buy their properties," warning that those offers could be unjustly low if predatory buys are hoping to" capitalize upon the fear of foreclosure or the cost of rebuilding to induce owners to sell their properties at below-market prices."
The release noted that state law protects owners of distressed residential properties — homes nearing foreclosure — and outlines penalties for people "who seek to exploit homeowners' hardships for economic gain."
"We are disheartened to hear that survivors of this catastrophe are being approached by unscrupulous persons whose only goal is to prey upon them. If someone approaches you with a deal or offer, and you did not reach out to them first, please hang up the phone or walk away," said Esther Brown, a complaints and enforcement officer at the department, in a statement. "Chances are high that unsolicited deals are not a legitimate operation or part of the federal, state, county and private partnership working to assist those affected."
The dand is expected to increase considerably as search efforts continue. Adam Weintraub, a spokesperson for the Federal Emergency Management Agency, said the latest estimates suggest between 1,100 and 1,300 people are still missing in the aftermath of the disaster.
for more features. | Real Estate & Housing |
Every month we report the UK's inflation figures, but what does this percentage going up or down actually mean for your money?
The inflation figure gives us an idea of how fast the cost of living is rising in the UK but here are a few things you might not know.
1. Inflation is falling - so prices are still going up, just not as quickly
According to the Office for National Statistics, UK inflation fell to 8.7% in the year to April from 10.1% the previous month. So does this mean prices are on their way down too?
Unfortunately not. Prices are still rising quite sharply compared to a year ago, just at a slower rate than they have been.
Prices are still likely to keep going up over the next few months, but not at the rate that has caused such a shock to households and businesses across the country over the last year.
2. Your costs might be rising even faster
The inflation figure is an average - so your own cost of living could be rising at a very different rate to what's reported in the news, depending on what you spend your money on.
The Office for National Statistics (ONS) which calculates inflation, bases its numbers on a basket of goods that reflects what most people across the UK are buying. But it doesn't include everything. So if you are buying a lot of unusual or niche items, or you have atypical tastes, you might find the cost of your own bag of shopping is going up more quickly - or more slowly - than the headlines suggest.
Food inflation is currently at 16.7%, much higher than the average rate, so people who spend a greater proportion of their outgoings on food will find their personal inflation rate is higher than the 10.1% headline figure.
The ONS says energy, food, and drink accounts for around 15% of lower-income households' spending, compared to 10% for high-income groups.
The Bank of England tries to control inflation by putting up interest rates which makes it more expensive to borrow money. This encourages people to borrow and spend less, and save more.
The Bank is expected to stick with that strategy - of putting up interest rates - throughout this year. So if you have a tracker mortgage or a credit card or loan you could find yourself paying more interest. That's another way your own personal inflation rate could be affected.
3. Will prices ever fall?
Occasionally prices will fall very slightly compared to the previous month, but they are much less likely to fall year-on-year.
And while this might be difficult to believe right now, falling prices aren't always a good thing - here's why.
If people expect that prices are likely to fall, they delay spending with the aim of getting a cheaper deal later on.
That means businesses have less money coming in, so they try to find ways to cut costs - most likely by cutting wages or laying off staff.
So prices falling can mean people lose their jobs, which in turn makes prices fall further. This is called "deflation", a different kind of economic crisis that brings its own set of problems.
That's why the Bank of England aims to have prices consistently rising by 2% - it's better to aim for a bit of inflation than to risk the negative effects of prices falling.
It's important to remember that the price rises we've seen recently have been primarily driven by global energy prices. These are expected to come down, but not to as low as they were before, and any fall in energy prices will take time to feed through into the wider economy. | Inflation |
How food shortages affect shopping habits and why people keep switching stores
Three-quarters of British shoppers are loyal to their usual supermarket, but the UK retail sector is no stranger to the complex and fluctuating needs of its customers.
In the last three years alone, shops have had to deal with Brexit, a pandemic and a cost of living crisis—all of which have influenced their customers' behavior. More recently, large UK supermarket retailers have struggled to meet customer demand for fresh fruit and vegetables, causing shortages, which has led to the need to impose buying restrictions.
After some people sought alternatives to satisfy their food needs and wants during recent shortages, shop owners might wonder if this switching behavior will have a long-term effect on their customer's loyalty. Will these shoppers switch back?
The concept of customer loyalty is a compelling part of any retailer's strategy. It means better retention of customers and a reduction in marketing and management costs. But loyalty can be fragile, as shown by current evidence of customers switching to independent greengrocers and farm shops amid recent food shortages.
In reality, research shows that consumers are driven to meet their shopping goals and will pursue their intended purchases until they get what they want. No amount of existing loyalty can override the desire to complete a shopping goal, whether it's buying a tomato or finding a turkey for Christmas dinner.
Fundamentally, loyalty depends on a customer's perception of what is attractive to them in the moment, as well as what they expect to be available in the future. It's no surprise then that independent greengrocers have been an attractive alternative during recent shortages, as news reports suggested they continued to carry stocks of in-demand items of fruit and veg.
Stick or switch
But if retailers are in danger of being "switched out" for an alternative at any time, what happens after the switch has been made? Certainly, the fear of permanent switching behavior is the stuff of nightmares for any retailer. But if people can't satisfy their shopping needs and so seek alternatives by switching, how long could it be before they switch back—or start shopping at an entirely new place?
Switching behavior is complex, but research shows it generally happens along a spectrum:
- complete switching, where the temporary substitution becomes a permanent choice
- partial switching, which is a blend between the already existing choice and incorporating a new substitution
- continuous switching, when shoppers regularly switch between choices to gain perceived benefits—bargain hunters fall into this category, for example.
Whether a customer becomes a complete switcher depends on a permanent change in their beliefs and habits that influences their behavior for the long term.
For example, the COVID pandemic elicited some temporary changes in customer shopping. People bought different products or more of certain types, for example.
But the crisis also led to some more permanent changes in shopping behavior, including shopping more locally and also online. People were forced to try something different during the lockdowns. Some may even have had to overcome preconceived negative perceptions and beliefs to realize the benefits of their new behavior.
A new retail era?
Perhaps the recent fresh food shortage among UK supermarkets has provided independent retailers with another opportunity to change people's attitudes and beliefs about alternative shopping options. If so, this situation may have encouraged some people to make their temporary alternative a more permanent choice.
The last three years have been particularly turbulent for retailers, suppliers and customers. The most recent problems around fresh food stock shortages for large UK retailers have further highlighted how vital both big and small shops are to the retail ecosystem—and to satisfying customer needs.
And the shortage situation should have helped retailers make a sobering realization about loyalty: while it is not guaranteed, a lack of loyalty should not be seen as a limitation. Shoppers that switch away, may well switch back.
Provided by The Conversation | Consumer & Retail |
NCLAT Adjourns Hearing On IDBI's Insolvency Plea Against Zee Entertainment To December 6
A three-member NCLAT bench deferred the hearing after the counsel appearing in the matter sought an adjournment to complete the pleadings.
The National Company Law Appellate Tribunal (NCLAT) on Wednesday adjourned its hearing to Dec. 6 over the plea of IDBI Bank seeking to initiate insolvency proceedings against Zee Entertainment.
A three-member NCLAT bench deferred the hearing after the counsel appearing in the matter sought an adjournment to complete the pleadings.
IDBI Bank in its plea has challenged the order of the Mumbai bench of the National Company Law Tribunal (NCLT), which, on May 19, 2023, had set aside the insolvency plea against the media major, observing that it was barred under Section 10A of the Insolvency & Bankruptcy Code (IBC).
In its order, the NCLT bench had said that ZEEL, which was the corporate guarantor for the loan availed by Siti Networks -- the principal borrower of IDBI Bank -- has committed a default.
However, the default was committed during the timeline specified under section 10A of the IBC.
Section 10A mandates no application for initiation of a corporate insolvency resolution process (CIRP) can be filed against any debtor by any financial and operational creditor for any default arising on or after March 25, 2020, for a period of one year.
This was a special provision inserted by the government in IBC to help the companies after the economic activities had resumed post-lockdown in phases.
The NCLT said Section 10A bars absolutely and forever, the filing of any application under Sections 7, 9 and 10 of the Code, for defaults committed on or after March 25, 2020, up to March 25, 2021.
Siti Networks has taken a loan of Rs 150 crore for a working capital facility and as per the agreement, it has to maintain a Debt Service Reserve Account (DSRA).
In DSRA, a credit balance equal to two quarters of interest on working capital was required to be maintained by Siti Networks at all times till the repayment. However, there was a default.
On March 5, 2021, IDBI Bank invoked the guarantee provided by ZEEL and called to pay Rs 61.97 crore with further interest from Feb. 18, 2021. It claimed an amount of Rs 149.60 crore in default.
ZEE is merging with Culver Max Entertainment (earlier known as Sony Pictures Networks India), for which it has been given a go ahead by a NCLT bench from Mumbai. This has also been challenged by IDBI Bank in a separate petition. | Banking & Finance |
A court-ordered financial auditor has caught Donald Trump quietly moving $40 million from the Trump Organization into a personal bank account—seemingly so the former president could pay his whopping $29 million tax bill.
Trump isn’t supposed to be moving any money around without alerting Barbara S. Jones, a former federal judge in New York tasked with babysitting the Trump Organization for its relentlessly shady business practices. But on Wednesday, she notified a New York state court about some major bank transfers that were never brought to her attention by the Trumps.
Jones described the way she discovered the Trump family company once again breaking the rules during an audit of its finances in recent months. In the run-up to the ongoing bank fraud trial that threatens to vaporize the real estate company and boot the Trumps from the business world, Justice Arthur F. Engoron ordered the company to not start shifting around funds to avoid paying what’s becoming an increasingly threatening massive penalty.
That meant the Trumps had to notify Jones anytime they moved more than $5 million out of the billionaire’s massive trust. Except they didn’t.
Jones said she and her team recently spotted unusual activity when reviewing 10 months of bank statements from 12 separate accounts belonging to the Donald J. Trump Revocable Trust. They found that Trump had pulled out $40 million in “three cash transfers” without ever notifying her.
She asked about it and got answers.
“These transactions included a cash transfer of $29 million to Donald J. Trump, which I have confirmed was used for tax payments,” she wrote.
But the rest apparently went to cover Trump’s mounting legal costs following a searing jury verdict in May that determined he sexually assaulted the journalist E. Jean Carroll—and slapped him with a $5 million penalty.
“I have also confirmed that the other transfers were for insurance premiums and to an attorney escrow account,” Jones wrote, referencing the Carroll case. | Banking & Finance |
Flair Writing Industries IPO: All You Need To Know
The IPO of Flair Writing will be a combination of a fresh issue and an offer for sale.
Flair Writing Industries Ltd. will launch its initial public offering on Wednesday, with a price band of Rs 288–304.
The company plans to raise funds through the issuance and sale of 1.95 crore shares at a face value of Rs 5 each, aggregating up to Rs 593 crore.
The IPO of Flair Writing will be a combination of a fresh issue and an offer for sale. The fresh issue comprises approximately 96.1 lakh shares in the upper price band of Rs 304 for Rs 292 crore. The OFS portion of the IPO comprises the sale of 99 lakh shares at the upper price band of Rs 304 for Rs 301 crore.
The company, in consultation with the book-running lead managers, undertook a pre-IPO placement of 24 lakh equity shares at an issue price of Rs 304 per share for a cash consideration aggregating to Rs 73 crore on Nov. 10.
The size of the fresh issue has been reduced to up to Rs 292 crore. Bids can be made for a minimum of 49 equity shares and in multiples of 49 shares thereafter.
The OFS will be held by the promoter shareholders of the company, with five members of the promoter group offering a total of 99.01 lakh shares.
According to the offer, 50% of the net offer is reserved for qualified institutional buyers, while 35% of the total issue size is reserved for retail investors. The residual 15% is kept aside for HNI/NII investors.
IPO Details
Offer Opens: Nov. 22.
Offer Closes: Nov. 24
Fresh Issue Size: Rs 292 crore.
OFS Size: Rs 301 crore.
Price Band: Rs 288–304 per share.
Lot Size: 49 shares.
Face Value: Rs 5 per share.
Total Offer Size: Rs 593 crore.
Listing: NSE, BSE.
Shareholding Pattern
The promoters of the company are Khubilal Jugraj Rathod, Vimalchand Jugraj Rathod, Rajesh Khubilal Rathod, Mohit Khubilal Rathod and Sumit Rathod.
Business
Established in 1976, Flair specialises in crafting writing instruments tailored to the ever-evolving market. With ISO 9001:2015 and ISO 14001:2015 certifications, the company aligns with global business and social standards.
It has forged partnerships with key players in the writing industry and owns brands like Flair, Hauser, Pierre Cardin, Flair Creative, Flair Houseware and Zoox. In the last financial year, Flair achieved sales of 1,303.6 million pens, with 74.82% sold domestically and 25.18% exported globally.
Recently, the company expanded into houseware products like casseroles, bottles, storage containers, and more, facilitated by its subsidiary Flair Writing Equipments Pvt.
Use Of Proceeds
The company intends to utilise the net proceeds from the issue towards the funding of the following:
Setting up a new manufacturing facility for writing instruments in Gujarat's Valsad district.
Funding capital expenditure of the company and its subsidiary, FWEPL.
Funding working capital requirements of the company and its subsidiaries, FWEPL and Flair Cyrosil Industries Pvt.
Repayment/prepayment in part or full of certain borrowings availed by the company and its subsidiaries, FWEPL and FCIPL.
General corporate purposes.
Risks
Flair Writing's success in the creative and writing instrument industry relies entirely on its capability to meet and adapt to consumer needs. Therefore, any shortcoming in effectively implementing their growth strategy and managing it could result in financial and other losses.
A substantial portion of the company's revenue is derived from the Flair, Hauser and Pierre Cardin brands. Any damage to their name and reputation may lead to a decline in revenue.
The writing instrument industry is fiercely competitive, featuring well-established brands like Reynolds, Linc and Camlin. Should these competitors provide more efficient or cost-effective products, it has the potential to make Flair's offerings obsolete. | Stocks Trading & Speculation |
Abu Dhabi Weighs Investment Pledges Worth $50 Billion For India
The United Arab Emirates is considering investing as much as $50 billion in India, its second-largest trading partner, as part of a broader bet on the world’s fastest-growing major economy.
(Bloomberg) -- The United Arab Emirates is considering investing as much as $50 billion in India, its second-largest trading partner, as part of a broader bet on the world’s fastest-growing major economy.
Provisional pledges from the UAE could be announced early next year, people familiar with the matter said, asking not to be named as the information is not public. Any new investments would follow Narendra Modi’s meetings with UAE President Sheikh Mohammed bin Zayed in July.
The countries have been seeking to bolster ties over the past decade, and aim to increase non-oil bilateral trade to $100 billion. Modi’s recent visit to Abu Dhabi marked his fifth trip to the Gulf nation since he took over as prime minister in 2014. The last Indian premier to visit the UAE before him was Indira Gandhi in 1981.
Deals being discussed include stakes in key Indian infrastructure projects and state-owned assets, with announcements likely before Modi seeks a third term in federal elections due next year, the people said. Some of the investments could involve sovereign wealth funds such as the Abu Dhabi Investment Authority, Mubadala Investment Co. and ADQ, they said.
The pledges are unlikely to have clear timelines for a large chunk of the investments, the people said. No final decisions have been made on the size or timing of the announcements.
As part of the push, entities overseen by Sheikh Tahnoon bin Zayed Al Nahyan have held early-stage talks on investing billions of dollars in India, one of the people said. Sheikh Tahnoon is the UAE president’s brother and chairman of International Holding Co., which disclosed a 5% stake in Gautam Adani’s flagship conglomerate last month. That came days after IHC sold down holdings in two Adani firms, though the firm reiterated its commitment to India at the time.
Representatives for India’s finance and trade ministries, the UAE government, and Sheikh Tahnoon’s private investment firm Royal Group didn’t respond to requests for comment. ADIA, ADQ and Mubadala declined to comment.
Growth Engine
Royal Group has long prized India, and executives there have called the country a potential growth engine of the next decade, Bloomberg has reported. Sheikh Tahnoon is also chairman of ADQ as well as ADIA — one of the world’s largest wealth funds, with close to $1 trillion in assets.
Read More: Gulf Royal’s $1.5 Trillion Empire Draws Bankers and Billionaires
Lured by a rising middle class and seeking to diversify away from traditional investment destinations like Europe, Gulf state-backed investors have boosted ties with India. Others including the Qatar Investment Authority and Saudi Arabia’s Public Investment Fund have also emerged as prominent investors in the country.
The UAE’s plan is a further indicator of the government’s push to position itself as a country that avoids taking sides in a world increasingly split between Washington and Beijing.
As one of few countries to manage close to $1.5 trillion in sovereign wealth, the UAE is a vital ally to the world’s most populous nation, which is seeking to bridge infrastructure gaps. For India, any large foreign investments would help Prime Minister Modi highlight his efforts to bolster the economy ahead of the 2024 vote.
Read More: BRICS Bloc Grows Heft With Saudi Arabia and Other Mideast Powers
Earlier this year, the UAE announced plans to support Turkey’s embattled economy with a $51 billion investment pledge, including about $30 billion in energy. Talks over one deal in that sector — just one part of the broader bilateral push — have collapsed, Bloomberg News has reported.
--With assistance from Abeer Abu Omar, Archana Narayanan and Shruti Srivastava.
©2023 Bloomberg L.P. | Asia Business & Economics |
The prime minister and the chancellor have been accused of “damaging UK plc” and failing to follow due process amid concern over anonymous briefings that triggered the early-hours resignation of NatWest boss Dame Alison Rose.
“There is a real sense of disquiet that political pressure has led to a midnight exit for such an important banking CEO,” an official at the City regulator, the Financial Conduct Authority, told the Guardian. “They should have allowed due process.”
The comments were echoed by a Treasury source, who described “a sense of disbelief” and “frustration” among banking bosses about the government’s handling of the row, and by the shadow chancellor, Rachel Reeves, who called out “bullying attitudes” towards Rose.
The first woman to run a big UK bank, Rose was forced to quit in a row over the decision to close accounts held by the former Ukip leader Nigel Farage at the exclusive private bank Coutts, a subsidary of NatWest. In a surprise to City observers, the announcement of her departure came at 1.29am on Wednesday.
NatWest’s chair, Howard Davies, had released a statement just before 6pm on Tuesday expressing support for Rose.
However, from about 10pm that night, newspapers began reporting sources close to No 10 and the chancellor as saying that the government had “serious concerns” about her staying in post. The board was forced to reconvene at 11pm, when it was agreed that Rose had to leave.
It is understood that NatWest was in regular communication with the Treasury throughout the discussions, and that it was notified of the board’s original decision to back Rose before the statement endorsing her was released. There was no pushback from ministers or Treasury officials at that time, they added.
The Guardian has been told that there was a change in position only after the release of NatWest’s statement – even though its contents had been discussed with officials – resulting in the Treasury putting in calls to the bank’s board to voice its lack of confidence in Rose. Without support from its largest shareholder, the board reversed its decision.
The turmoil reverberated on the stock market, with NatWest the bigger loser on the UK’s FTSE 100 index on Wednesday, falling by 3.7%. That wiped more than £840m from its value, including hitting the taxpayer’s stake by about £320m.
The change in approach came as a shock to the bank’s employees, given Rose’s long list of government-backed accolades. She led state reviews of female entrepreneurship and UK energy efficiency, and was included in the 2022 honours list. However, on Wednesday Rose was sacked by the government from the female entrepreneurship initiative, known as the Rose Review.
In an interview to be broadcast on Channel 4 on Wednesday, recorded before Rose stepped down from the bank, Reeves defended her and attacked Treasury ministers, accusing the government of “picking a fight with banks on behalf of Nigel Farage”.
Reeves said: “I don’t like some of what I see as bullying attitudes towards her. She’s the first female chief executive of NatWest. She took over at a time when that bank had real big problems. It seems to me that Alison Rose has done a good job turning that bank around.”
Darren Jones, the chair of the business select committee, suggested that No 10 had demonstrated double standards over the Farage case by pressuring a chief executive to resign.
The government, he argued, had previously failed to intervene directly in matters involving bosses breaking employment law, treating staff unfairly and failing to protect customers’ money.
“If ministers really wanted to crack down on CEO behaviour, they would have done so in many cases by now,” the Labour MP said. “So why intervene in the Coutts-Farage case? It’s about power. The power Farage seems to have over the Tories and the lack of it that everyday workers and customers have.”
The government is the largest shareholder in NatWest, with a 39% stake. Day to day, the relationship is managed at arm’s length and on a commercial basis by UK Government Investments (UKGI). This makes the level of recent political intervention especially unusual, according to Treasury sources.
“This should not have been a matter decided by anonymous briefings to the press,” a source at the Treasury told the Guardian. “There is frustration among some banking CEOs about what this means for their relationship with the government.”
“There was a sense of disbelief [in Treasury] that they [Downing Street] decided to add to pressure on her and precipitate a late-night exit. It was a damaging decision for UK plc.”
Multiple sources accepted that Rose’s days may have been numbered given the importance of banking confidentiality, but her chaotic exit was unnecessary.
An FCA source echoed the concerns, saying the government “should have allowed due process,” noting that NatWest had committed to an independent review of how it handled the former Ukip leader’s banking and confidentiality.
Aside from financial crisis-era interventions on executive pay and conversations around the departure of the former chief executive Stephen Hester in 2013, ministers have taken a largely hands-off approach to the management of NatWest since the financial crisis. The bank came under majority state control in 2008 after the government stepped in with a £45bn bailout in order to protect customer deposits.
Speaking on Wednesday after a meeting with bank bosses about how to treat customers regardless of their views or political status, Andrew Griffith MP, the economic secretary to the Treasury, said it was right that Rose had resigned.
“This would never have happened if NatWest had not taken it upon itself to withdraw a bank account due to someone’s lawful political views. That was and is always unacceptable,” Griffith said.
“I hope the whole financial sector learns from this incident. Its role is to serve customers well and fairly – not to tell them how or what to think.”
In a contrast to the position taken by Labour’s shadow chancellor, the party’s leader, Keir Starmer, expressed sympathy for Farage, saying NatWest had “got this one wrong” and that it was right for Rose to go.
In a radio phone-in on BBC Radio 5 Live, he was asked if he felt sorry for Nigel Farage. “Yeah, he shouldn’t have had his personal details revealed like that. It doesn’t matter who you are, that’s a general rule,” he said. “I certainly don’t think anybody should be refused banking services because of their political views, whoever they are.”
A Treasury spokesperson said: “This was a decision made by the NatWest board and Alison Rose. The NatWest board is responsible for the bank’s strategic and operational management.
“The government has been clear throughout that, as a matter of public policy, it is wrong to remove someone’s bank account because of their political views or something that they said. Free speech within the law and the legitimate expression of differing views is an important British liberty.”
The FCA and No 10 declined to comment. NatWest was approached for comment. | United Kingdom Business & Economics |
IiAS Asks Raymond Independent Directors To Appoint Interim CEO, Probe Charges Against Singhania
In an open letter to the company's five independent directors, IiAS also suggested they ask Singhania and his estranged wife Nawaz Modi, also a board member, to take time off from their responsibilities as board members.
Proxy advisory firm Institutional Investor Advisory Services (IiAS) has asked independent directors of Raymond Ltd to consider appointing an interim CEO and investigate the allegations of assault by its Chairman and MD Gautam Singhania on his wife and daughter, and the use of company funds for personal benefit.
In an open letter to the company's five independent directors, IiAS also suggested they ask Singhania and his estranged wife Nawaz Modi, also a board member, to take time off from their responsibilities as board members.
The five independent directors to whom the letter was addressed are Mukeeta Jhaveri, Ashish Kapadia, Dinesh Lal, K Narsimha Murthy, and Shiv Surinder Kumar.
Citing media reports, IiAS said Modi has alleged that she and her daughter were physically assaulted by Singhania in September 2023. She also alleged that company funds were being used for Singhania's personal benefit (CEO excesses) -- and that she was acting as a whistle-blower of sorts.
"Despite such serious and heinous accusations by one board member against another, you have been silent. Investors are worried, which is reflected in the significant erosion in stock price over the past few days. Your silence can be misconstrued -- surely you don't want stakeholders thinking that these accusations are to be tolerated," the proxy advisory firm wrote to the independent directors.
It further said, "In the interest of the company and safeguard the interests of a larger set of stakeholders, we urge you to undertake an independent investigation into the allegations of both assault and CEO excesses."
Asking the independent directors to "protect the company from what proposes to be a long-drawn acrimonious battle between the Nawaz Modi and Gautam Singhania', IiaS said, 'For the duration of this investigation, you must consider asking both, Nawaz Modi and Gautam Singhania, to take time off from their responsibilities as board members."
The firm further said asking the promoters to step aside is not easy but reminded the independent directors of their fiduciary responsibility towards minority investors, employees and larger set of the company's stakeholders.
"Therefore, you will need to dispassionately separate ownership from management," it said, adding, "We also note that the company has initiated a succession planning process for key roles. Given the leadership depth, we are sure you will be able to find an interim CEO from within the ranks, who can take over from Gautam Singhania for the duration of the investigation."
IiAS also sought to know from the independent directors if there is a possibility of criminal liabilities on the company or any of its directors and "if there is merit in the allegations of CEO excesses, what controls will you put in place to arrest any further slippage?"
Asking if the impending divorce and the allegations remain a distraction for the CMD, IiAS said, "If so, then having an interim CEO will support unhindered operations of the company, at least until the divorce settlement is done and that there are no further distractions to discharging the role."
On Monday, Singhania assured employees and board members that it is "business as usual" in the company and he is fully committed towards its smooth functioning.
In an internal mail to the employees and the board members of Raymond, Singhania who announced separation from his wife Nawaz earlier this month, said he has chosen not to comment on the reports in media "about matters pertaining to my personal life", saying, "maintaining the dignity of my family is paramount to me".
"However, I remain resolute as Chairman & Managing Director and am fully committed towards the smooth functioning of the company and its business. Even in these difficult times for me, I assure you that at Raymond it is business as usual," he asserted in his mail.
Earlier this month, Singhania announced that he has separated from his wife Nawaz, amid speculation over the future of their 32-year relationship.
The billionaire industrialist, whose net worth is reported to be over Rs 11,000 crore, made the announcement on the microblogging platform X, saying it was not the same Diwali as in the past.
The industrialist, who is helming the multi-decade group having roots in textiles and branched out into newer ones like real estate, said Nawaz, a fitness trainer.
The couple has two children and Singhania said they grew together in their years of companionship and were a source of strength for each other. | Banking & Finance |
Walmart on Thursday said consumers are acting more cautious with spending as the holiday season commences, even as the retailer raised its forecast for sales and profit for the year.
The company’s shares fell more than 7% Thursday as executives said higher interest rates and dwindling household savings have made sales “somewhat uneven” over the past two months.
Walmart’s bigger focus on groceries has provided a bulwark against the broad slowdown in discretionary spending with more than half of the company’s merchandise comprising of food and other daily essentials.
Walmart’s Chief Financial Officer John David Rainey told Reuters the company saw shoppers slow purchases in the second half of October, but rebound in early November on items including apparel and home goods that have been out of favor for most of the year.
“This gives us reason to think slightly more cautiously about the consumer versus 90 days ago,” Rainey said on the conference call.
While shopper visits rose 3.5% in the third quarter, shoppers are “still very choiceful and using discretion,” and are waiting for promotional events like Black Friday and Cyber Monday, he said, echoing comments made by Target CEO Brian Cornell on Wednesday.
US consumer spending accounts for roughly 70% of the economy, and core retail sales rose just 0.2% in October as spending ebbed due to higher borrowing costs and the lingering effects from inflation.
The Federal Reserve has raised short-term lending rates by more than 5 percentage points since March 2022, and that has had an associated effect on consumer lending and mortgage rates, which are also higher.
Cautious on the consumer
Retailers have warned that this year’s holiday season will be less robust than in years past. In addition to Walmart, retailers Children’s Place and Bath & Body Works also reported mixed quarterly results Thursday. Macy’s had strong results.
“With this type of volatility, we think it does make sense for Walmart to be slightly more cautious on the consumer heading into the holiday season, ” D.A. Davidson analyst Michael Baker said in a note.
But the forecast, which according to Art Hogan, chief market strategist at B Riley Wealth, missed the midpoint of Wall Street estimates, sets up sets up Walmart for “another beat,” Baker said.
Walmart has used its size and scale to keep prices low despite inflation, drawing in not just low-income shoppers but also more high-income consumers looking for cheaper options to stretch their budgets.
Prices on food and consumables have been “more in check” than the prior year while prices of general merchandise goods like apparel and home goods have fallen between three and six percent, Rainey said.
Falling prices in general merchandise will allow Walmart to cut prices for the holiday season, executives said on the conference call.
Walmart shares had hit an all-time high of $169.91 on Wednesday following results from rival Target, which projected fourth-quarter earnings above estimates.
Walmart’s shares are up nearly 20% this year and are relatively more expensive than peers.
Walmart now expects fiscal 2024 earnings per share between $6.40 and $6.48, up from its prior forecast of $6.36 to $6.46.
It sees comparable sales for the full year rising 5% to 5.5%, compared with an increase between 4% and 4.5% estimated previously.
Comparable sales, or sales at Walmart’s US stores open at least a year, rose 4.9% ended Oct. 31, excluding fuel, above estimates of 3.35%. Online sales rose 15%.
The company posted an adjusted profit of $1.53 per share in the third quarter. Analysts on average were expecting $1.52 per share. | Inflation |
Gen X leads in net worth, lags in retirement savings
Generation X, the next to reach retirement age, is behind on saving for retirement. A study from the National Institute on Retirement Security reports the typical Gen X household has only $40,000 saved for retirement.
That’s despite earning more than baby boomers or millennials.
Now in their 40s and 50s, Generation X is financially stressed by the largest share of national household debt. Inflation has added to this generation’s woes.
“The social and economic forces impacting Generation X have left them in a different place financially from their boomer predecessors,” report authors Tyler Bond, Celia Ringland, and Joelle Saad-Lessler wrote.
These forces have created a sizable retirement shortfall without much time to make up the difference as retirement looms.
Gen X retirement savings swallowed by debt and home equity
It’s not for lack of income that Gen X retirement accounts remain scant. Its average income in 2021 was higher than for any other generation: $117,577 before taxes.
In the decade following the Great Recession, Generation X’s median net worth rose by 115%. By holding onto their homes and paying down debt, they were able to recover the most home equity lost to the housing crisis of any generational cohort.
But the tradeoff of putting equity into their homes has come at the neglect of their retirement accounts. In addition, 22% of Gen X have no emergency savings, and 35% have less than three months’ worth of their income tucked away for an emergency.
Even though they earn the most, Xers also have the most debt out of any generation. That includes more non-mortgage debt, more credit card debt, and more student loan debt.
On average, Gen Xers carry the most non-mortgage consumer debt by far: $45,781. That’s after paying down non-mortgage debt by about 3% in the past two years.
More than one-third of that debt is auto loans. Including mortgages, the average total debt per Gen Xer is $167,493.
"Sandwich generation" faced unique challenges
This cohort had unique challenges during their entire working career.
They had to navigate the dot-com crash at job-seeking age, the housing crisis at home-buying age, and then the pandemic recession in their prime income-earning years.
These were three major economic setbacks in 25 years, Gen X’s prime working years. Meanwhile, many Gen Xers report they are a “sandwich generation” providing or helping out financially for both their children and their parents.
More than half (51%) of Gen X say rising education and healthcare costs due to inflation have hampered their ability to make retirement contributions, according to a recent Bankrate survey. | Personal Finance & Financial Education |
Ousted CNN boss Jeff Zucker lashed out at rival bidders for a conservative British publication of “slinging mud” and assured the UK government he would guarantee the newspaper’s independence, according to a report.
Earlier this week, Zucker’s Abu Dhabi-backed RedBird IMI group agreed to pay about $750 million to the Barclay family — owners of the Telegraph newspaper and Spectator magazine — that would allow them to repay their nearly $1.4 billion debt to Lloyds Banking Group.
Zucker questioned the motivation of rival media CEOs whose outlets were warning of the threat to media freedom from his proposed deal while also mounting their own bids.
“There’s a reason that people are slinging mud and throwing darts — [it’s] because they want to own these assets,” Zucker told the Financial Times on Friday. “And they have their own media assets to try to hurt us.”
Other bidders for the Telegraph include hedge fund billionaire and GB News co-owner Paul Marshall, as well as two other newspaper owners, Rupert Murdoch’s News UK and Lord Rothermere’s DMGT.
Zucker said that some of the “people throwing stones now tried to approach us before to see if we would work with them on this bid. So let’s just be clear about that. We were fine in the eyes of our competitors before we were trying to do this on our own.”
The sale to Zucker — who has been widely viewed as moving CNN to the left — sparked concern among Conservatives in Parliament over the Telegraph’s future editorial direction, which has been traditionally aligned with their party.
Some Parliament members and rival media outlets also raised red flags that Zucker’s links to Abu Dhabi could “pose a risk to the Telegraph’s editorial independence and threaten national interests,” the FT reported.
Zucker said he would “make sure that [the UK government] understand that we’re prepared to make commitments that should assuage anyone’s concerns,” according to FT.
Zucker, the CEO of RedBird IMI, promised to create an “editorial advisory board” that would uphold the independence of both the Telegraph and the Spectator magazine, adding that there are no plans to change the management of the editorial teams at either publication.
“We feel confident that with those moves that there should be no question about the editorial independence of the Telegraph or Spectator,” said Zucker, who ran CNN as well as the “Today” show and NBC News in the US.
He continued: “I’ve spent 35 years running or supervising news organizations, and there’s nothing I understand more than editorial independence. I have staked my reputation and legacy on not allowing editorial interference.”
Redbird IMI is a joint venture between the US private equity firm run by former Goldman Sachs partner Gerry Cardinale and Zucker, alongside International Media Investments, which is controlled by Sheikh Mansour bin Zayed al-Nahyan, who also owns Manchester City football club.
Zucker said that IMI would have no say in the running of its businesses, and was only involved “in the entrance and the exit” of a transaction as an investor in the fund.
IMI would “remain a fully passive investor” and would “not exercise any control of the Telegraph or the Spectator,” Zucker said, while adding that he sees “real potential” to establish the Telegraph as a “more global media brand.”
Lloyds seized the publications in June from the the Barclay brothers — Sir David and Sir Frederick — who bought the titles from Conrad Black in 2004 for $1.3 billion.
The bank launched an auction for the business, which includes Telegraph newspaper and Spectator magazine, after the Barclay family failed to pay debts of nearly $1.4 billion.
RedBird IMI interrupted the auction by agreeing to provide funding to the Barclays to repay the loans “in full” and then take over the media group. Lloyds is now assessing RedBird IMI’s proposal.
If Lloyds agrees to the proposal, the deal will mark the end of the Barclay family ownership of the Telegraph, a conservative broadsheet founded in 1855, and The Spectator, which has been published weekly since 1828.
Cardinale, founder of RedBird Capital, told the FT that “as a private equity investor, we’re not focused on influencing editorial or content curation.”
Cardinale has a reputation of partnering with celebrities who want to build their own businesses. “We don’t tell Ben Affleck or Matt Damon what movies to make at Artists Equity; and we don’t tell LeBron James and Maverick Carter what projects to take on at The SpringHill Company,” Cardinale said, referring to RedBird’s other investments. | United Kingdom Business & Economics |
The UK government is halting Jeff Zucker’s Abu-Dhabi-backed RedBird IMI from buying the Telegraph newspaper and Spectator magazine, citing concerns about the outlets retaining their editorial independence once the group takes over.
According to Mediaite, culture secretary Lucy Frazer issued a public interest “intervention notice” Thursday night, prompting media regulator, Ofcom, to investigate the proposed deal’s “potential breach of media standards.”
Roughly two weeks ago, former CNN boss Zucker, who is the CEO of investment group RedBird IMI, proposed a deal to fork over about $750 million to the Barclay family — owners of the Telegraph newspaper and Spectator magazine — that would allow them to repay their nearly $1.4 billion debt to Lloyds Banking Group.
The Barclay family would transfer ownership to RedBird IMI, a joint venture between RedBird Capital and International Media Investments (IMI) of Abu Dhabi, funded primarily by Sheikh Mansour bin Zayed Al Nahyan, United Arab Emirates’ vice-president.
The involvement of UAE leaders has sparked concerns in the UK over editorial independence at the publications should the deal go through.
In the past week, Zucker has gone on a public relations tour, telling The Financial Times he would would create an editorial advisory board to uphold the independence of The Telegraph and The Spectator and provide reassurances.
The former CNN boss also lashed out at rival bidders for a conservative British publication of “slinging mud.”
Earlier this week, the exec also told The Telegraph’s business editor Christopher Williams he would “resign” if anyone came to him with any suggestion of pressure on the editorial team from the United Arab Emirates.
The inquiry by Ofcom will “focus on ensuring the accurate presentation of news, free expression of opinion, and a sufficient plurality of views,” Mediaite said.
Frazer told the outlet that there’s a “need for a fair, transparent, and impartial process.” The investigations, to be concluded by January 26, 2024, will also involve the Competition and Markets Authority (CMA) examining competition issues.
On late Friday, The Guardian reported that the Barclay family is expected to temporarily regain control of The Telegraph and Spectator but an independent board will remain in editorial and operational control under the government-ordered probe by Ofcom. | United Kingdom Business & Economics |
Undue weight was given to scientific advice over arguments for protecting the economy during the Covid pandemic, one of the most high-profile supporters of lockdowns has said.
Sir Patrick Vallance, the former chief scientific adviser, said deficiencies in the economic arguments being put forward caused “a real problem in terms of how decisions could be made”.
Sir Patrick, who was among those pushing for what was described as a “go hard, go early” policy on curbing freedoms, also said it was a “mistake” for the Government to use a worst-case scenario projection of 4,000 deaths per day to help justify the second lockdown in autumn 2020.
Along with Prof Sir Chris Whitty, the chief medical officer, Sir Patrick was an almost constant presence on the nation’s television screens during the pandemic, flanking Boris Johnson at daily press conferences to update the nation.
Giving evidence to the Covid Inquiry in London, Sir Patrick said he had referred to Sir Chris in his diary as “a delayer” because his colleague was worried about the long-term health risks associated with shutting down the country, whereas Sir Patrick felt there was a clear need for early lockdowns.
He said: “He was definitely of the view that the treatment and the result of that treatment needed to be considered together and pulling the trigger to do things too early could lead to adverse consequences … I didn’t have exactly the same worry. I was more on the side of ‘we need to move on this’.”
Despite his enthusiasm for locking down the country, Sir Patrick said the Treasury had failed to push back hard enough when the Government insisted it was “following the science”.
He said: “The science advice was there for everybody to see. The economic advice wasn’t and it wasn’t obvious what it was based upon and therefore [it] unduly weighted the science advice in the public mind, I think, and created a real problem in terms of how decisions could be made.”
He said he had suggested that an economic advisory group, similar to the scientific advisory group Sage, should be set up and “it had one meeting but it wasn’t pursued”.
In private diary entries he criticised the Treasury, then under Rishi Sunak as chancellor, saying that its internal predictions for the economy were based on: “No evidence, no transparency, pure dogma and wrong throughout.”
‘Mistake’ to show slide detailing worst-case scenario for deaths
Sir Patrick said that when Mr Johnson announced a second national lockdown on Oct 31 2020, he was told to show the public an information slide with a worst-case scenario for deaths, which he insisted was a bad idea.
He said: “The message came back several times that the PM thought that as he had seen the slide it was only right that the public should see it.
“It was agreed that I should show that slide but try to move on to the medium-term projection which was the real thing. I think I made a mistake by agreeing to show it.”
Less than a week later, the Office for Statistics Regulation criticised Sir Patrick for failing to release the data and assumptions behind the worst-case scenario projection of 4,000 deaths per day by December 2020 if no action was taken.
Mr Johnson had been forced into a hasty announcement of the lockdown after plans for it were leaked to the media, and Sir Patrick said the then prime minister spent three to four hours on the phone before that day’s press conference trying to explain his reasoning to Tory MPs and other critics.
He said there was nothing wrong with the 4,000 deaths projection in terms of its scientific validity, but: “I just thought it was not a sensible science slide to show.”
The inquiry was shown another entry from Sir Patrick’s diaries in October 2020 in which he noted that Dominic Cummings, Mr Johnson’s senior adviser, had claimed: “Rishi thinks just let people die and that’s okay.” | Inflation |
- Retail egg prices fell by 7% in February, according to the consumer price index.
- A dozen large Grade A eggs cost $4.21, on average, down from $4.82 in January, a record high.
- Egg prices rose in 2022 amid a historic outbreak of bird flu.
- They may stay elevated as Easter approaches due to generally strong demand.
Retail egg prices retreated in February, according to federal data issued Tuesday, delivering relief to consumers who saw prices spike at the grocery store in recent months.
A dozen large Grade A eggs cost $4.21 in February, down 13% from $4.82 in January, which was a record high, according to federal data tracked by the Federal Reserve Bank of St. Louis. The monthly decline was the first since September.
Consumer prices seem to be tracking trends in wholesale prices. Wholesale egg prices, the ones grocery stores and other retailers pay to egg suppliers, cratered in January and February.
However, retail prices are still up 55% over a year ago, according to CPI data — among the largest percentage increases of any consumer good or service.
Large Grade A eggs cost $1.93 per dozen at the beginning of 2022, on average.
That dramatic increase in egg prices, economists say, largely stems from a disease called highly pathogenic avian influenza — known as bird flu.
The disease is contagious and lethal in birds. It killed a record number, including egg-laying hens, in 2022.
In past years, the virus has typically disappeared after the spring. It reappeared in the fall last year, crimping egg production while heading into peak demand season for eggs around the winter holidays, experts said.
Lower prices now partly reflect a decline in consumer demand early in the year, which is a typical seasonal pattern, said Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an egg supplier.
There also hasn't been a new confirmed case of avian flu among commercial table-egg farms since December, giving suppliers some time to recover.
"Do we expect crazy, record pricing again? No," Moscogiuri said.
However, prices may rise again heading into Easter, which is in April, due to generally strong demand around that holiday, experts said. There's also a chance that bird flu could surface again at egg farms.
General inflationary pressures are also serving to keep egg prices elevated. Those include higher corn and soybean prices, which make it more costly to feed hens, and costs for labor and transportation, Moscogiuri said.
Average wholesale egg prices increased 16% so far in March, according to Angel Rubio, senior analyst at Urner Barry, which tracks the wholesale market.
It generally takes about a month for those prices to trickle through to consumers, and the price moves are often more muted, Rubio said.
Ultimately, retailers such as grocery stores determine the timing and amount of the price increase for consumers. | Inflation |
What’s The Best Use For Crypto? Let AI Figure It Out
Web 3.0 is mostly forgotten now, but the ideas behind it will regain their relevance as bots become more common.
(Bloomberg Opinion) -- Remember Web 3.0? No? Allow ChatGPT to refresh your memory: Web 3.0, according to GPT-4, is “the next frontier in internet technology, characterized by decentralized, user-centric applications that prioritize data privacy and foster seamless, interconnected experiences.”
Today Web 3.0 stands as one of this era’s most discredited ideas, an “innovation” that was hyped for years — until crypto prices collapsed and brought down many crypto projects with them. As with crypto, advocates for Web 3.0 have never quite been able to make a real-world use case for their technology.
And yet. There is a reason I asked GPT-4 for a definition.(1) I fully expect the ideas behind Web 3.0 to make a major comeback — as the legal and institutional framework for AI bots. It’s worth thinking through how this might work.
Say you run a charity and want to create and distribute an AI bot that will teach mathematics to underprivileged schoolchildren. That’s great, but the bot will encounter some obstacles. In some jurisdictions, it may need to pay licensing and registration fees. It may need to purchase add-ons for recent innovations in teaching. If it operates abroad, it may wish to upgrade its ability to translate. For a variety of reasons, it might need money.
All those transactions would be easy enough if AIs were allowed to have bank accounts. But that’s unlikely anytime soon. How many banks are ready to handle this? And imagine the public outcry if there were a bank failure and the government had to bail out some bot accounts. So bots are likely to remain “unbanked” — which will push them to use crypto as their core medium of exchange.
Critics often point out that dollars are more efficient than crypto as a form of exchange. But if AI bots can’t use dollars, then they will have to use crypto. Yes, some owners might give bots access to their checking accounts, while others might want to OK every bot expenditure through the dollar-based banking system. But most people, I suspect, would rather let the bots operate on their own, without all those risks and hassles — and again, that brings us back to crypto.
There are well-known arguments for why “agentic” bots are often more efficient than “tool” bots, and they are going to need money that is consistent with a reasonable degree of bot autonomy. Furthermore, possibly for liability reasons (do you want to be indicted in some foreign country because of something your bot said or did?), many of these bots won’t be owned at all. That will be another force pushing the bots to operate in the crypto nexus.
At first the crypto assets will be existing ones, such as Bitcoin and Ether. But over time the bots may invent their own coins, based on principles of convenience (for the bots, of course). Presumably these bots will be good with numbers, so they might use multiple crypto assets for reasons of diversification. The bot-based crypto economy could evolve to be considerably more complex than the human-based crypto economy.
That parallel economy may be only a small percent of GDP. But it will help sustain crypto asset prices. Furthermore, if humans deal with these bots (maybe some wish to donate to your math-teaching bot?), they will need some crypto, too. So the bot-based crypto economy will bleed into the regular economy.
The plot now thickens. Once there is a bot economy based on crypto, that economy will need property rights and legal institutions, for all the reasons that human economies do. Say your teaching bot buys a translation improvement service from another bot — but it’s defective. Your teaching bot will “want its money back.”
To boost trust and lower trading costs, many bots will agree in advance to arbitration services, typically to be provided by another bot. (These bots cannot just show up at the Fairfax County Courthouse and demand justice.) The final adjudicatory judgment will be rendered by an inscription on a blockchain, using smart contracts if need be, and the new property rights will have been defined.
All this, quite simply, is a paradigmatic illustration of Web 3.0.
Some bots may wish to advertise themselves, or establish core identities, and some will do this by buying symbolic goods and having their ownership of those goods established on blockchains. That too is a Web 3.0 idea. At the peak of Web 3.0 fervor, many critics considered it absurd that humans would pay millions of dollars for NFTs. Why pay all that money for little more than a blockchain-based receipt that you had spent the money? Buyers wouldn’t even necessarily own any accompanying IP rights.
Laugh all you want, but the bots will do some version of this. Back to your math-instructor bot: Say it is competing with other math-teacher bots. It may wish to make a promotional website — “Here is my portfolio, come learn calculus here!” Maybe it’s illustrated with some amazing Midjourney images of Isaac Newton and Leibniz. All of these steps are likely to be done with the tools of Web 3.0 or their bot-innovated offshoots.
Bot growth and bot success will depend on the price of electricity, so perhaps the bots will trade actively in an electricity futures market to hedge their positions. They will probably have to trade with both other bots and humans.
Remember the DAO, the Decentralized Autonomous Organization? I’ve yet to see a human-run DAO succeed at significant scale, perhaps because humans need more authority or because the DAO is just hidden human authority in another guise (e.g., one person controls 51% of the votes). The bots already have read about DAOs and their failings, and they may give them another go. In the meantime the bots will train themselves to learn how to make their DAOs work, and bot “corporations” may end up as more democratic than their human counterparts.
Some bots might find it efficient to enjoy a version of limited liability. By dealing with such a bot, either you or your bot would stipulate that you could not sue the bot for any more than a specified amount. For hiring a bot to perform more dangerous tasks, you and the bot might agree on a tougher liability standard. These “corporate laws,” if you could call them that, will embody a lot of rapid innovation and diversity of approach. Human institutions will look all the more sluggish in comparison. Over time, perhaps, we can learn from these bot experiments.
I am sure the bots can think of many other applications for Web 3.0 — especially if we train them to.
There is a broader lesson here: Don’t dismiss a technological or institutional advance just because it is hard to see what it might be good for. Quantum mechanics was around for decades, and seemed like a fascinating curiosity, before it became a fundamental principle underlying modern computing. Critics attacked gaming for corrupting young people, but now the GPUs used in advanced games have helped to build better artificial intelligence, and Nvidia is close to a trillion-dollar company.
Of course, by the time all this comes to pass, we may be calling it Web 4.0. But Web 3.0 will eventually get its due.
Elsewhere in Bloomberg Opinion:
- The AI Gold Rush Will Take Us to Some Dark Places: Lionel Laurent
- AI Alarmists Are Taking Us Down a Rabbit Hole: Parmy Olson
- The SEC Comes for Crypto: Matt Levine
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(1) My prompt was: “Please give me a one-sentence definition of Web 3.0, something that would appeal to Bloomberg readers.”
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. He is coauthor of “Talent: How to Identify Energizers, Creatives, and Winners Around the World.”
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
The culture secretary has said she may order a probe into the sale of the Telegraph newspaper and Spectator magazine to an Abu Dhabi-backed fund, citing "concerns" about the deal.
Lucy Frazer said she was "minded to" issue an intervention notice on public interest grounds.
Earlier this week, RedBird IMI said it was poised to take control of the titles.
RedBird IMI said it believed their editorial independence was "essential".
In a written statement on Wednesday, Ms Frazer said had contacted the publication's previous owners the Barclay family, their bank Lloyds and Redbird IMI to inform them of the possible intervention.
'Further investigation'
She said: "This relates to concerns I have that there may be public interest considerations⦠that are relevant to the intended loan repayment by the Barclay family and the planned acquisition of Telegraph Media Group by Redbird IMI and that these concerns warrant further investigation."
She added: "It is important to note that I have not taken a final decision on intervention at this stage."
If Ms Frazer does issue an intervention notice, it could lead to an investigation by regulators.
The parties have been given until 15:00 GMT on Thursday to respond to the secretary of state.
Editorial independence
It comes after six Conservative MPs wrote to Deputy Prime Minister Oliver Dowden and the business and culture secretaries over the weekend to raise concerns about how RedBird IMI's offer could affect national security and press freedom.
In a statement, RedBird IMI said it welcomed the opportunity to "make further representations" to the government.
It added: "If we gain ownership of the Telegraph and Spectator we will be fully committed to maintaining the existing editorial team of the publications and believe that editorial independence for these titles is essential to protecting their reputation and credibility."
The Telegraph and Spectator were taken over by Lloyds Bank five months ago as it sought to recover debts owed by the Barclay brothers.
Lloyds launched a sales process of the business to recover more than £1bn that was outstanding.
However, on Monday RedBird IMI investment fund, which is a joint venture between US firm RedBird Capital and International Media Investments (IMI) of Abu Dhabi, confirmed it had reached a deal with the Barclays.
This would see the debts owed to Lloyds repaid, and the news titles taken out of receivership.
If the deal is approved, RedBird IMI's chief executive, former CNN boss Jeff Zucker, would run the business. | United Kingdom Business & Economics |
On 4 January, Prime Minister Rishi Sunak set out his five priorities for 2023.
"I fully expect you to hold my government and I to account on delivering those goals," he said.
What progress has been made?
Halving inflation
The government's top priority is halving inflation - the increase in prices over time - by the end of 2023.
Inflation was at 10.7% in the three-month period between October and December 2022, which means the government aims to reduce inflation to 5.3%. (It uses a measure called the Consumer Prices Index, which tracks the price of a typical basket of goods).
At the time the PM made the pledge, many experts already expected inflation in the UK to drop sharply, but it has not fallen as quickly as anticipated.
In September, CPI was unchanged at 6.7%, following three months of falls.
When will we know? Inflation figures for the fourth quarter of 2023 will be published on 17 January 2024.
Growing the economy
Downing Street said the pledge to "grow the economy" will be met if the economy is bigger in the three-month period of October to December 2023 than it was in the previous quarter (July-September).
It is using GDP (or Gross Domestic Product), a measure of all the activity of companies, governments and individuals.
This would not normally be seen as a difficult pledge, because the UK's economy is usually growing.
However, while the economy is now thought to have recovered faster from the pandemic than previously thought, it only grew by 0.2% in August after shrinking in July.
The pledge to grow the economy is made more difficult by the government's promise to halve inflation.
The Bank of England has been putting up interest rates in an attempt to stop prices rising so quickly.
However, this also reduces spending, and slows economic growth.
The Bank is only expecting the economy to grow by about half a percent in 2023 and 2024.
When will we know? GDP for the fourth quarter of 2023 will be published on 13 February 2024.
Debt falling
When governments talk about debt falling, they almost always mean as a proportion of GDP.
The idea is that debt is falling if it is growing more slowly than the economy.
It had been thought that debt rose above 100% of GDP earlier this year. However, as GDP has since been revised upwards, that is no longer the case.
But levels of UK government debt are still high by historical standards.
In the Budget in March, the government claimed to be on track to meet its pledge on debt. That's because the independent Office for Budget Responsibility (OBR) - which checks the health of the economy - forecast that debt as a proportion of GDP would fall in 2027-28.
But the OBR also issued some stark warnings about the sustainability of UK debt.
When will we know? The next debt forecasts will be published alongside the 2023 Autumn Statement.
Cutting NHS waiting lists
Mr Sunak said: "NHS waiting lists will fall and people will get the care they need more quickly."
His pledge only refers to waiting lists in England, because Scotland, Wales and Northern Ireland manage their own health systems.
On a visit to a hospital in September, Mr Sunak conceded that his target of reducing the waiting list was in doubt, saying it was "very hard". He said it would have been met without ongoing NHS industrial action.
When we asked Downing Street when the prime minister aimed to have waiting lists falling, we were pointed towards the plan for tackling the backlog of elective care (care planned in advance). This said the overall waiting list was expected to be falling by about March 2024.
When will we know?: Waiting list figures are usually published on the second Thursday of each month for the last month but one - so August's figures came out in October.
Stopping small boats
The final priority was to "stop the boats" which bring people across the English Channel, after 45,755 migrants crossed over from France that way in 2022.
The prime minister proposed to do this through new legislation. The government finally passed its Illegal Migration Bill on 17 July, giving the home secretary a legal duty to detain and remove anyone entering the UK illegally.
Mr Sunak has said that his plan to tackle small boat crossings is "starting to work".
As at 16 October, 26,116 people had been detected crossing the English Channel in 2023, according to the Home Office, which is down a quarter from the same date in 2022.
When will we know? Figures on arrivals in small boats are collected daily. | United Kingdom Business & Economics |
The UK government has removed state guarantees from almost £1bn in Covid-19 emergency loans, pushing potential losses on to banks if borrowers fail to repay them.
The taxpayer-owned British Business Bank (BBB), which runs the loan schemes, removed state guarantees from 10,786 loans worth a combined £979m up to 11 October, according to data released under freedom of information (FoI) laws.
The guarantees were removed for a variety of reasons, the BBB said, including because of data corrections, application errors resulting in “duplicate” funds being sent to companies, as well as infringements of scheme rules.
Rishi Sunak announced a series of loan schemes at the start of the pandemic, when he was chancellor, to try to support the economy as the government imposed strict lockdowns. The schemes were run by private banks but the government said it would cover some of the banks’ losses to enable them to lend to more businesses.
However, the schemes have been dogged by concerns over widespread fraud and errors on lending that reached £77bn, after the government focused on getting the money to borrowers more quickly.
Last month, the government said £7.4bn of taxpayers’ money had been paid to British banks to cover defaults, as well as fraud, while £17bn had been fully repaid by borrowers. The government also increased its estimate of total fraud by 43% to £1.7bn.
The largest of the schemes, the £47bn bounce back loan scheme, has been the subject of particular scrutiny over fraud but other business interruption loan schemes were also dogged by problems, amid complaints of poor oversight.
Theodore Agnew resigned in the House of Lords as a junior minister over what he called the “arrogance, indolence and ignorance” of government in its attitude to pursuing loan fraud.
Reuters reported that suspected fraud was not necessarily a reason for removal of government guarantees from the loans, provided other rules had been followed.
In the FoI response, obtained by Reuters and seen by the Guardian, the BBB refused to detail which banks held what amounts of the loans which had been stripped of their guarantee.
The BBB said the public interest in disclosing the information was outweighed by factors including how it “could crystallise a number of misunderstandings and misinterpretations surrounding the lenders” by incorrectly suggesting they had “a higher risk profile” depending on their share of the loans.
In January, the campaign group Spotlight on Corruption lost a tribunal aimed at forcing the government to reveal the names of companies who had benefited from the loans. The BBB claimed that disclosure of companies’ identities would breach commercial confidentiality and risked borrowers becoming fraud targets themselves.
The removal of guarantees comes after an annual report published by the business department claimed the government had improved its fraud detection, thanks to experience gained during the pandemic.
“Lessons have been learnt from the department’s approach to Covid-19 and that knowledge applied to new challenges such as the energy affordability schemes,” the annual report said.
In the past financial year there were criminal prosecutions against eight directors “for Covid-19 related misconduct”, according to the report with all leading to a conviction of which three resulted in immediate prison sentences.
A government spokesperson said: “In unprecedented times, we stepped up to support the country. If the government and lenders didn’t move as quickly, more businesses would have failed, and many more jobs would have been lost.”
UK Finance, the banks’ lobby group, said: “Lenders acted swiftly to deliver the government’s Covid-19 loan guarantee schemes, which supported millions of businesses at the height of the pandemic. The most recent data shows that the majority of businesses are on track with repayment and many have fully repaid their loans.”
The lobby group added that some lenders have removed loans from the guarantee “at their discretion” even where the guarantee may be valid.
A BBB spokesperson said: “The British Business Bank has a good relationship with scheme lenders and works with them, including through its audit process, to make certain they undertake their obligations under the guarantee agreement. This is important to ensure full compliance by lenders to the scheme rules and protects taxpayers’ money.” | United Kingdom Business & Economics |
Headlines about interest rates are grim for mortgage customers, and 1.6 million UK homeowners with a fixed rate will see their deal come to an end by December 2024, according to UK Finance.
With the help of the some of the UK's leading mortgage experts, here are a few tips on coping with rising costs.
1. Overpay now if possible
If you still have some time on a low fixed-rate deal, your mortgage could work harder for you now.
"Most lenders will allow up to 10% overpayments per annum, but make sure you keep some cash as a rainy day fund as it won't be easily accessible once used to reduce the mortgage," says David Hollingworth from mortgage brokers London & Country.
Putting money in a savings account can build up and also earn interest to help to pay down some of the mortgage ahead of fixing a new deal.
2. Switch to interest-only
Moving to an interest-only mortgage can keep your repayments affordable, says Richard Dana, chief executive of digital mortgage broker Tembo.
"However, it's best to use this as a short-term solution, otherwise you will have to pay your remaining mortgage balance at the end of your mortgage term," he adds.
Your income and the amount of equity you hold in the property will determine your eligibility.
3. Downsize
This is possibly not a realistic option for a growing family, or for the owners of a small flat.
But for older mortgage customers whose children have flown the nest, selling up and buying a smaller property could reduce the mortgage size - or potentially pay it off entirely.
"Consumers looking to re-mortgage may find it difficult to afford higher interest rates, so seeking independent advice is essential to consider every option available to them, such as downsizing," says Rachel Springall from financial data firm Moneyfacts.
4. Extend the mortgage term
The typical mortgage term is 25 years, but 30 and even 40-year terms are now available.
"Extending the term can help reduce the monthly payment but can cost tens of thousands of pounds more in interest over the life of the mortgage," says David Hollingworth.
"Make sure that you regularly review whether you could cut the term back again as your circumstances change."
5. Make money out of your property
From listing with a short-term letting site like AirBnB, renting out your parking space with an app like Just Park, or taking in a lodger or overseas student, there are several options to make a bit of cash.
"Under the government's rent-a-room scheme you will get a tax free allowance of £7,500 per year for income generated from your main home too," says Richard Dana. | Interest Rates |
(Bloomberg) -- As China’s embattled shadow banking giant Zhongzhi Enterprise Group Co. faces a criminal probe, lawyers and analysts are assessing the damage to investors. One estimate puts that at about $56 billion.
Most Read from Bloomberg
More than three quarters of investor cash would be lost, with just 100 billion yuan ($14 billion) being recovered from debt of as much as 460 billion yuan, according to one scenario outlined by Ying Yue, a lawyer at Leaqual Law Firm in Shanghai. He expects a slow and drawn out court process, based on the experience of other cases.
Sun Jianbo, founder of Beijing-based asset manager China Vision Capital, said soured assets are typically sold with a 70% discount. That means investors may recoup about 13% of their money, based on Bloomberg calculations.
Authorities over the weekend said they’ve opened criminal investigations into the money management business of Zhongzhi, days after it warned of severe insolvency and revealed a shortfall of $36.4 billion in its balance sheet. Investors were urged to report leads and file their complaints online.
The case is a wake-up call for wealthy Chinese investors who have often sought high returns in products sold by loosely regulated firms like Zhongzhi. The company first triggered concern in August after one of its trust affiliates failed to make payments to customers on high-yield investment products.
Zhongzhi’s 200 billion yuan of assets would at best fetch about 100 billion yuan, Ying said in a social media post Saturday. That means investors could only get about 23% of their money back, based on the median of some 420 billion yuan to 460 billion yuan total debt Zhongzhi earlier revealed.
The actual ratio could be much lower. The wealth manager said last week liquidity has dried up and the recoverable amount from asset disposals is expected to be low.
Similar Cases
Ying noted investment recovery ratios in similar cases are well below 23%. A criminal case that involves about 30 billion yuan is still awaiting a second trial ruling more than four years since the scandal broke out, he added, expecting legal proceedings of Zhongzhi to be much slower given its debt size.
Shadow banks like Zhongzhi often pool household savings to offer loans and invest in real estate, stocks, bonds and commodities. In recent years, even as rival trusts pared risks, Zhongzhi and its affiliates, especially Zhongrong International Trust Co., extended financing to troubled developers and snapped up assets from companies including China Evergrande Group.
Founded in 1995, Beijing-based Zhongzhi has expanded into a sprawling empire that had more than 1 trillion yuan in assets at its peak. The group holds shares in six licensed financial institutions including Zhongrong International Trust, five asset managers as well as four wealth management firms, according to its website. It also has controlling stakes in a string of listed firms across sectors from semiconductor to health and consumption.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Asia Business & Economics |
What's gone wrong at the 'disastrously understaffed' tax office? We speak to an insider
- Business owners are left waiting hours to get in touch with HMRC
- One insider tells us the tax office is 'disastrously' understaffed
- Frustrated employee? Contact: [email protected]
Business owners and accountants have become well-acquainted with the chaos at HM Revenue & Customs (HMRC) for some time.
The push for a digital tax system has left some waiting months to receive basic tax information.
The 'seasonal' closure of the self-assessment helpline until September has drawn particular ire from business owners who needed to send their quarterly tax return by 31 July.
It comes just a short while after the permanent closure of the HMRC VAT registration helpline.
Chaos at the tax office: HMRC insider tells This Is Money the tax office is 'disastrously' understaffed
It is just a snapshot of the disarray the tax office has found itself in, and now one insider tells This is Money about the reality of working there.
We look at what's gone so wrong at the tax office that has left business owners waiting hours to get through to an adviser.
Digital tax push goes off course
In 2016, HMRC announced its flagship digitisation programme, Making Tax Digital, requiring businesses and individuals to keep digital records and report their income quarterly.
It was meant to maximise tax revenue, save the Government cash and improve customer service.
But in the seven years since HMRC rolled out the programme, which has gone £1billion over budget, you'd be hard-pressed to find any such improvement.
Many say that customer service has deteriorated to an unacceptable level and business owners have spent hours on the phone trying to get through to a customer service adviser, only to be told they must go online.
One business owner told This is Money he was left waiting over three months to receive his VAT number, which had cost him a third of his income.
Since then, This Is Money has heard from more readers who have been left in the dark.
One reader has been left waiting for months to receive their VAT number before being told they'd have to wait 10 days for it to be posted.
It means they will have waited 70 days to receive their VAT number and has said they expect to only be set up properly by September and start invoicing, six months after setting up the business.
Despite HMRC's push to moving its customers to the online portal, business owners have to wait to receive confirmation of the VAT application via post, rather than its secure online system. HMRC says this is an an anti-fraud measure.
Another business owner said they had been waiting for over four months for their VAT number and it's having a knock-on effect on their business.
'I have good, regular customers that have been waiting as long as four months to reclaim VAT that I've charged them, and [they're] starting to lose patience which could be very costly to my business,' they said.
Accountants are equally as frustrated with the system. One told This is Money they had spent over nine hours on the phone to HMRC across one week, looking to chase a VAT registration.
Heather Rogers, founder and owner of Aston Accountancy, and This is Money's tax columnist, said: 'The digital services are limited at HMRC, especially if something has gone wrong. It is in these situations, that direct contact is necessary. Chatbots on tax issues do not work.
'HMRC seem to be drowning. Taxpayers and advisers are too.'
What's gone so wrong at HMRC?
The pandemic seems to have been the main catalyst for the problems.
A report by the committee of Public Accounts, published earlier this year, found post and call handling had fallen significantly during the pandemic.
In 2021-22 HMRC responded to 39.5 per cent of mail within 15 days, compared to 70.3 per cent in 2019-20.
The average speed of answering calls was 6:39 minutes in 2019-20, which rose to 12:22 minutes in 2021-22.
An HMRC insider, who works in customer services, told This is Money anonymously: 'Before Covid it was perfectly fine, there were enough people and it was a good job.
'There were busy periods but it wasn't constant. Then Covid hit and things went haywire.'
The relentless push to digitise the tax system seems to have backfired, despite HMRC's insistence in the report that the digital push would improve customer service.
This does not seem to have been the case.
The HMRC employee said that while the pandemic had not helped matters: 'it can't be held accountable… it was three years ago.'
Instead they point to a change in the way customer services advisers are managed, and each region of the UK being given their own sole skillset. They say it has meant trained advisers in different locations 'now have redundant skills'.
However, an HMRC spokesman said: 'We have a flexible workforce spread across the country who are ready to adapt to meet the needs of our customers. Where they are based is completely irrelevant.'
HEATHER ROGERS ANSWERS YOUR TAX QUESTIONS
Others suggest HMRC's home-working policy since the pandemic has slowed processes down, which is unproven.
The chair of the Treasury Committee has already written to HMRC about the temporary closure.
It has asked whether it is related to HMRC's homeworking policy, and whether it had been introduced because of staffing issues.
Harriett Baldwin MP said: 'Given the potentially significant impact closing the self-assessment helpline may have on taxpayers, we're looking for clarification that HMRC has fully considered the costs and benefits of this decision.'
An HMRC spokesman told This is Money: 'All our staff here are held to the same standards whether they are working from an HMRC building or from home.
'Hybrid working is now part of HMRC's offer to colleagues, giving them the opportunity to work from home for two days per week - subject to our operational requirements.'
The declining numbers of staff, which has occurred at the same time as the digitisation programme, seems to be the core issue though.
The average number of staff has fallen from 25,500 to 19,500 in five years and the closure of the VAT registration and self-assessment helplines will do little to plug this gap.
A letter to the Chancellor from leading industry figures, including the chief executive of the Chartered Institute of Taxation, said 'a major underlying problem is insufficient resourcing and underinvestment in HMRC's systems'.
Our source said the tax office is 'drastically… hilariously understaffed'.
HMRC says the seasonal closure of the self-assessment helpline will free up 350 advisers to assist with 'urgent' enquiries.
But an extra few hundred advisers is likely be of little help to the thousands of business owners who need to file their tax returns in the next month.
The anonymous HMRC employee told us: 'They've been trying to push digital [but] it's just not a very good service.'
Victoria Atkins MP, the Minister responsible for the UK tax system, wrote to the Association of Accounting Technicians and said HMRC are currently dealing with 70,000 calls a day and customer satisfaction is consistently around 80 per cent.
Rogers said: 'This is demonstrably not the case in my experience, nor the undersigned of the letter sent [to the Chancellor] in March, which demonstrates the frustration we are all feeling.
'It also doesn't square with HMRC's announcement, that the helpline will be closed for the summer to move staff onto dealing with amongst other matters, the backlog of post. On HMRC's website, on the summer closure of their telephone line, it states that they will be dealing with only 6,600 urgent calls a day.'
'I dread logging into work'
Business owners might have been left reeling by the abrupt summer closure of self-assessment, but an HMRC insider suggests staff were also left in the dark.
'We didn't know what was happening [with the closure of the helpline]... we found out when we logged on that day.'
HMRC did not respond to this claim.
For customer services advisers, who are paid a £22,845 full-time salary, the stress of the job is immense.
Our source said advisers, who receive just a few weeks of training, have had to deal with calls from business owners who were on the verge of a mental health crisis.
'It's understandable why people are leaving,' they said.
'It's drastically different to what I anticipated… I dread logging in.
'We don't have any power - we get told what's happening and we've just had to do it. It feels like we're yes men.'
'I'm frustrated - there's so many things that could be done so much better. The people in charge don't have a clue.'
Are you a frustrated HMRC employee or a business owner who has been left in the dark? Email [email protected] with HMRC in the subject line
The comments below have not been moderated.
The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. | United Kingdom Business & Economics |
August's Record E-Way Bills Likely To Boost September GST Collections, Say Experts
In August, the number of e-way bills generated touched 9.3 crore, beating the previous record in March at 9.1 crore.
Festive season preparations have pushed up e-way bill collections to a record high in August, and this may translate into a likely boost for September GST collections as well, according to experts.
In August, the number of e-way bills generated touched 9.3 crore, beating the previous record in March at 9.1 crore.
Rise in e-way bills, which represent the movement of goods across state borders, usually lends to a commensurate rise in GST collections of the following month. This can also be noted in the GST revenue figures of March 2023 (representing April collections), which came up to Rs 1.87 lakh crore, benefitting from a fiscal-ending boom.
GST figures are released with a lag of one month. Therefore, one month's collections reflect revenue collected over the previous month.
Divakar Vijayasarathy, founder and chief executive officer at DVS Advisors, agreed that the increase in e-way bill generation augurs well for GST collections.
The growth of the Index for Industrial Production in July could have added to the trend, he said. "The IIP grew at 5.7% in the month of July, the same would have translated into higher shipments in the month of August. Though the festive season is yet to reach its peak, it has already started in certain parts with Onam and Ganesh Chaturthi. The increase in e-way bill generation also indicates the stocking of goods before the festive season."
Despite major festivities in the month of September and beyond, August's e-way bills are in line with the usual movement indicating inventory stock-piling—that is usually led by white goods—across the country ahead of festivities, according to a GST official who spoke on the condition of anonymity.
Another reason contributing to the rise in e-way bill generation could also be a change in the e-invoicing norms, according to Bipin Sapra, indirect tax leader and partner at EY.
Starting Aug. 1, e-invoices were mandated for business-to-business supply of goods/services or for exports where the GST taxpayer's aggregate annual turnover exceeded Rs 5 crore in any fiscal. Prior to this, the e-invoicing turnover limit was at Rs 10 crore.
Reading into other economic indicators like PMI—which indicates the business activity both in the manufacturing and services sectors—Sapra said that it indicates an upward movement in the second quarter thereby hinting at economic expansion and growth as compared with the first quarter. This would lend to more e-way bill generation in the future, he said.
"... with the increased amount of boost being given to various sectors in the form of incentives for setting up businesses and manufacturing facilities, the economic activity is definitely going to increase, thereby promising an increased PMI coupled with an increasing CPI. Given the increased economic activity, it would not be incorrect to expect the EWB generation to increase in the near future," he told BQ Prime.
An analysis over the next 2-3 months will reveal how much of August's e-way bill generation was due to the lowering of the e-invoicing limit, the official quoted above said. However, it does bode well for Q2 revenue collections, comfortably placing GST collections to achieve its budgetary target, the person said.
For FY24, the government has targeted raising Rs 9.56 lakh crore from GST, an 11.9% rise from the revised estimates of Rs 8.54 lakh crore in the last fiscal. The total indirect tax collections are estimated to be Rs 15.29 lakh crore in FY24. | Inflation |
Ecstatic residents of Rhymney, in the South Wales valleys, scooped a £3.7million jackpot - with 435 local people sharing in the win, buying new cars, going on holidays and living their dreamsResidents of Rhymney, in South Wales, scooped big on the lotteryThe small industrial town of Rhymney has two pubs, three chips shops… and a whole load of lottery winners. Last May 435 of the 8,000 residents shared £3.7million. Now Channel 4 has visited the town in the South Wales valleys to find out how the win changed the lives of locals, many who were struggling in the cost of living crisis. Nine neighbours shared the biggest portion of the People’s Postcode Lottery prize, landing them £185,000 each. One, retired steelworker Edward “Ted” Owen, had played with two tickets and waltzed off with £370,000. He made plans to buy a Jaguar and go on a cruise. Ted Owen, 76, was one of the many lucky winners (
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John Myers) But the win was bittersweet for Ted after his wife died, robbing him of the chance to enjoy the fortune. He said: “I wish my wife could have enjoyed it as well. “She had cancer, she got over it and then it came back. She would have definitely bought a cruise.” Former coal merchant David Price, nicknamed Lionhead, was one of the £185,000 winners. Sadly he died three months later from heart failure at the age of 65 after battling sepsis and long Covid. 90-year-old Betty and daughter Jackie were among the winners (
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Channel 4/Handout) His niece Emma Taylor, 24, said of the moment they were told he had won: “It was like a Hollywood film. “We both started crying when we saw the cheque. It was so exciting. “So many people are struggling and to see his face light up was magical. "I feel sad he never got to enjoy the win but before he passed away, he bought himself a quad bike. “He also gave everyone in the family a share of the winnings. Nothing made him happier than giving people money and seeing their smile.” John Price and Emma Taylor won big (
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John Myers) Emma told how the residents had a street party to celebrate the win. She added: “Everyone was so happy and excited. “So many are struggling and things are going wrong. “Suddenly Rhymney won the lottery and that has been crazy. It’s been nice to see so many people having big smiles on their faces.” Mary Lewis, 54, and husband Simon won £8,000, which allowed them to go on their first UK holiday in 14 years after buying a touring caravan. Simon works 70 hours a week as a lorry driver and Mary has been unable to do her job as a cleaner due to long Covid. Mary Lewis was delighted to scoop a prize (
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Channel 4) The mum-of-seven said every spare penny from her his wages is taken up by food and energy bills. She said of their win: “I felt like a kid in the candy shop. We went to Devon and five of our children and two of our six grandchildren came with us. It was really special.” One resident called Betty, 90, won £3,894. She said: “It will be a big help. I was really pleased, with the heating going up. A lot aren’t working who have won it.” Celebrations when locals were told of the news (
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Channel 4) Janet and Ray Jenkins won £185,000. He had a stroke and the cash will help buy a wheelchair so he can be more independent. Other winners included Lewis Lance, Lisa Scanlon, Gladys Kent and Mary Brooks. Every day the People’s Postcode Lottery draw announces winners with anyone playing the game living in that area sharing the jackpot in return for a monthly £10 subscription. The amount each winner receives varies based on whether they match all or some of the postcode, and how many tickets they play with. Mary Lewis with husband Simon (
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Channel 4/ Handout) It appears there was no jealousy among those in Rhymney’s NP22 5 area who did not take part in the lottery. Mary said: “Everyone was pleased for each other. The ones that won big deserved it. “It’s helping them out at the height of the energy bills crisis. “Winning this amount of money across the community has created such a nice buzz. People still can’t stop talking about it.” “It’s great Channel four is making this documentary about us.” The Welsh Valley that won the Lottery airs next Saturday 28th January on Channel 4 at 6.05pm Welsh valley town of Rhymney (
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Channel 4/Handout) Other towns to win big Christmas came early in December for 718 people living in Goring-by-Sea who shared a whopping £16.9 million prize. Twelve of the neighbours in the full winning postcode of BN12 4TR scooped £379,062 for every ticket they played with. In October 2022, 591 people in Mablethorpe celebrated after winning a share of £7.9 million. Meanwhile in November 2022, 987 players scooped a combined jackpot of £3.2 million in Rushden. Six neighbours collected £266,666 each. Read More Read More Read More Read More Read More | United Kingdom Business & Economics |
Daniel Korski, a businessman who has called for London to be modelled on Dubai’s open to the world market-led approach, has been shortlisted as a Conservative candidate for the mayoral race in the UK capital.
The former No 10 political adviser has built his campaign on a pledge to “restore the London dream” – and said the city should be looking to the UAE for inspiration.
Mr Korski, who worked for former prime minister David Cameron before entering the tech sector, said a fresh approach that “embraces new ideas, new technologies, and a positive, entrepreneurial spirit” is needed to give London a boost. He said on Sunday night he was “delighted” to enter the next stage of the race.
His bid become mayor of London has been backed by several Tory MPs, including Foreign Office minister Tom Tugendhat and Levelling Up Secretary Michael Gove.
The Conservatives announced their shortlist for mayoral candidates on Sunday, naming Mr Korski, London Assembly Member Susan Hall and barrister Mozammel Hossain following a selection process.
Paul Scully, the minister for London, failed to make the cut.
In a social media post that included a photo of Dubai earlier this year, Mr Korski said: “The UAE feels like the new capital of the emerging markets these days, where you’re more likely to meet a Turkish architect, an Indian clean energy expert or a Nigerian businessman than in London, let alone Paris.
He said he has been visiting the UAE since 2004 and praised its “extraordinary transformation”.
The likely front-runner in the race to be the Tory candidate in the election praised Emiratis’ approach to clean energy and emerging markets as he pushed his campaign online.
He is the co-founder and chief executive of Public, a government-focused tech firm which helps clients build digitally-enabled public services.
Mr Korski was born in Denmark to Jewish parents who fled Poland in the 1960s and serves as vice president of the Jewish Leadership Council.
Mr Scully announced his candidacy last month and was seen as a front-runner for the nomination. He said he was “disappointed” by the decision but praised the “incredible” support his short-lived campaign had received.
Seen as an ally of Boris Johnson, Mr Scully had said he would look to follow in the footsteps of the former prime minister in a bid to “reach out beyond” tribal lines if he was selected.
The contestants will face off in a hustings from Monday until July 3 before Conservative Party members are given the chance to vote for their preferred candidate between July 4 and 18.
The chosen candidate is expected to be announced on July 19.
Labour’s London mayor Sadiq Khan, who was first elected in 2016, is vying for a historic third term in City Hall in the May 2024 election.
Mr Korski said Mr Khan has been “neglecting what makes our city so brilliant” and vowed to usher in a new era of prosperity and “restore the London dream” if he gets into office.
“To achieve this, we need a fresh approach,” Mr Korski said. “One that embraces new ideas, new technologies, and a positive, entrepreneurial spirit.
“That's why I'm standing to be your candidate for mayor. So we can have a London mayor with the experience, the tenacity, and the forward thinking to supercharge and unlock the full potential of our magnificent city.”
Mr Korski has said if he becomes mayor he will cancel Mr Khan's decision to expand Ulez, the controversial ultra-low emission zone, to all 32 London boroughs from August 29. Under the scheme about 700,000 more drivers will face a daily £12.50 ($15.72) fee. | United Kingdom Business & Economics |
Best Buy customers looking to purchase DVDs or Blu-ray discs will have to find another retailer after the 2023 holiday season.
Starting in 2024, sales of hard copies of movies and TV shows by the consumer electronics seller will cease, according to Variety and The Digital Bits. The outlets originally attributed the details of Best Buy doing so to unnamed sources.
FOX Business reached out to Best Buy for comment.
Variety also reported that a Best Buy spokesperson linked the planned wind-down of DVD and Blu-ray sales to changes in how people consume entertainment.
Streaming platforms have increasingly become the go-to for many for viewing movies and TV in recent years. Some well-known entities include Netflix, Amazon Prime Video, Hulu, Disney+, Max, Peacock, Apple TV and Paramount+.
Pumping the breaks on DVDs was something Best Buy concluded it should do earlier this year, according to Variety. The move will reportedly apply to sales conducted online and in physical stores.
“Making this change gives us more space and opportunity to bring customers new and innovative tech for them to explore, discover and enjoy,” the spokesperson told the outlet.
The upcoming holidays will mark some of the last opportunities for Best Buy customers to still get discs from the retailer, Variety reported.
In late August, while participating in the company’s second-quarter earnings call, Best Buy CEO Corie Barry said the retailer was “both pragmatic and optimistic” heading into the holiday season and final two quarters.
“Of course, the macro environment remains uncertain with a number of tailwinds and headwinds, soon including the October resumption of student loan payment, all of which results in uneven impacts on consumers,” she said. “Overarchingly, we believe that the consumer is in a good place. But as we have said, they are making careful choices and trade-offs right for their households.”
Best Buy adjusted its forecast for its fiscal year 2024, projecting annual revenue in the $43.8-$44.5 billion range. For non-GAAP diluted earnings per share, it told investors it expected that to now come in at $6-$6.40 for the year.
The retailer, which posted a market capitalization of $15.38 billion as of Monday afternoon, has been around since the 1960s. | Consumer & Retail |
New York state is reeling from a COVID-era exodus to low-tax locales as revenue during this fiscal year is down nearly 20%, according to a report.
New York has collected 19.5% less in levies while California has seen its state tax revenue fall by a whopping 24.9%, according to data revealed by Bloomberg News.
Meanwhile, Texas reported a 12.2% growth in state tax revenue while Florida has collected 9.9% more in levies so far this fiscal year, according to the data compiled by Urban-Brooking Tax Policy Center.
In Texas, the windfall has translated into a record $33 billion surplus, prompting Gov. Greg Abbott to seek tax cuts.
The disparity can be explained by the shrinking tax bases of New York and California.
Each state saw their populations fall by nearly 300,000 residents in the year ending last July — while Florida and Texas added 888,000 collectively, according to Census Bureau data.
Recently released data from the Internal Revenue Service show that New York and California lost a total of more than $90 billion in income during the pandemic as residents fled to areas with a cheaper cost of living.
New York lost $25 billion in adjusted gross income in 2021 and $20 billion in 2020, while California reported a net loss of $29 billion in 2021 and $18 billion in 2020.
In total, the two states lost $92 billion in two years.
On the other end of the spectrum, Florida brought in $39 billion in income in 2021 — a significant increase from the $28 billion it generated the year prior.
Palm Beach County alone reported an $11 billion gain in income in 2021, the IRS said.
New York is staring down the barrel of budget deficits after federal COVID money dried up.
The recently released state budget financial plan projects budget gaps of $5.1 billion in fiscal year 2025, $8.6 billion in fiscal year 2026, and $7.2 billion in fiscal year 2027 — totaling $21 billion.
Meanwhile, California lawmakers this week approved a $310.8 billion budget that closes a nearly $32 billion budget deficit while also extending a lucrative tax break for the state’s film and television industry.
The nation’s most populous state has had combined budget surpluses of well over $100 billion in the past few years, enabling the Democrats in charge to greatly expand government.
But this year, revenues slowed as inflation soared and the stock market struggled.
California gets most of its revenue from taxes paid by the wealthy, making it more vulnerable to changes in the economy than other states.
Last month, Democratic Gov. Gavin Newsom estimated the state’s spending would exceed revenues by over $30 billion.
With Post Wires | Inflation |
We still see regular updates on the calamitous fallout of the 2020 collapse of Wirecard, the now-insolvent fintech out of Germany that had built an elaborate house of cards on false accounting and murky business. Meanwhile, some of the assets from that operation, now under new ownership, appear to be in growth mode.
NomuPay — a unified payments business formed by VC Finch Capital out of its 2021 acquisitions of Wirecard assets, specifically local licenses, across Turkey and Asia Pacific (specifically Hong Kong, Malaysia, Philippines and Thailand), as well as separate businesses like Cardinity out of Lithuania (also known as Click2Sell) to cover European licenses — says that it has now raised $53.6 million, funding that it is using to continue expanding its operations, and building more integrations and other functionality into its API.
The $53.6 million is being called a Series A by the company in a press release, but in an interview with TechCrunch, CEO Peter Burridge described the figure as more of an aggregate of what NomuPay has raised to date: Finch’s initial acquisition of different assets came with an initial capital investment, and it was the sole owner of the new business at that point. Since then, management, unnamed individual investors, and a separate firm called Outpost Ventures (part of Neuberger Berman), have also invested, giving them also stakes in the business.
Outpost and Finch co-led NomuPay’s most recent tranche of about $15 million, and Burridge said the plan is to raise more — in his words a “proper raise” — soon. Today is the first time that the startup is announcing the details of any of this funding.
NomuPay was quietly being formed from 2021, but it launched its first commercial product — a unified payments platform for making and taking payments that is gateway-agnostic and that works with whatever payments infrastructure the business already uses — at the end of 2022 and says it is now active in 20 countries. Burridge declined to disclose any specifics on the size of its active business, but customers and partners include regional operations for Spotify, Ikea, Facebook and hospitality payments specialist Planet.
That gives an idea of NomuPay’s target customers: merchants and other online businesses that need to make and take payments (that is, payment acceptance and payouts) across international markets. Its core product is an API that businesses can use to get around the difficulties of having to negotiate and integrate the many different, fragmented payment methods and processes a business needs to have in place when transacting in across borders. NomuPay’s unified payments platform competes against the likes of Stripe, PayPal and Adyen, but also PPRO, Payoneer, and many others.
It is indeed a crowded market, but also a big enough one that Burridge believes there is room for more payment companies to meet the demand.
“Payments is still a problem that needs to be solved,” he said. “We are building new rails to do that.”
Burridge can say something that lofty with some authority because he has a long history in the world of fintech, and specifically the messier aspects of cross-border payments. He was the longtime president and COO of HyperWallet, which was acquired by PayPal to build out its global payouts operation, a business he led for PayPal as well. Previous to that, Burridge also worked for years at Travelex; and before his foray into FX, he spent a long time at Oracle and Siebel so has a pretty strong background in CRM and how to build B2B services directed at customer needs.
“While card schemes [like Mastercard or Visa] have created ubiquity, it’s [still] hard to expand globally,” he said. “For example, if I go to Turkey, I still need to open a merchant account and work with another acquirer and pay local rates and local fees. The issue globally is that cross border acceptance rates are still very poor.”
While there is a clear link between Wirecard and the formation of NomuPay — and one might even think that there are some services and customers that have carried over, since Wirecard in its heyday offered unified payments as one part of its fintech stack before it went bust — Burridge is very specific to say that the acquisition was made to pick up local licensing, which can be expensive and time-consuming to negotiate in multiple markets.
Finch’s strategy, he said, was to get “good licenses in hard-to-get-to places” after they spent time looking at the market and looking at payment methods to find the best gaps. He rolls his eyes at the mention of Wirecard fiasco and says that the technology, customers and all of the infrastructure beyond the licenses are all built by NomuPay itself, not using anything from Wirecard.
“We think of this more as a Disneyland pass to get to the front of the queue,” he said.
“Under the Leadership of Peter Burridge, NomuPay has made a series of licence acquisitions, and top level hires that has helped to take the company to the next level,” said Radboud Vlaar, managing partner of Finch Capital, in a statement. “On top of this, the company has built a Unified Payments Platform that unlocks local payment acceptance and payout disbursements in geographies that have long lacked a unified system, through a simple and single integration. We are very excited to see how NomuPay addresses the burning need of clients in these core markets.”
“We’re thrilled to partner with the deeply experienced team at NomuPay and be a partner with them in this next phase of growth,” added David Dubick, a partner at Outpost Ventures. “Throughout our conversations with NomuPay we’ve been continually impressed by the technological implementation of the uP Platform, its ability to solve a wide range of issues faced by enterprises and marketplaces in global payments, as well as their approach to distribution and the initial partners who are using the platform at scale.” | Banking & Finance |
Artificial intelligence may have a larger impact on the environment than previously thought, according to a study published Tuesday in the journal Joule. The research found that AI could undermine efforts to reduce carbon emissions by eventually consuming as much energy as a country the size of Sweden.
That could happen in just a few years, based on how quickly the technology is advancing, according to Alex de Vries, a PhD candidate at the VU Amsterdam School of Business and Economics and author of the new paper. De Vries explains in his study that large language models (LLMs) like ChatGPT consume substantial datasets to train the AI. “If you’re going to be expending a lot of resources and setting up these really large models and trying them for some time, that’s going to be a potential big waste of power,” de Vries told The Verge.
Training AI models uses a lot of energy, but that’s not the only concern. De Vries noted that Google reported 60% of its AI-related energy consumption from 2019 through 2021 stemmed from what’s called the inference phase of production. After AI models are trained, they transition into the inference phase, generating information based on new inputs. While past work has looked at the energy consumed by AI training, de Vries says more needs to be done to account for the full AI life cycle.
Energy production is responsible for more than three-quarters of global greenhouse emissions, according to the International Energy Agency. Pumping these gases into our atmosphere is warming the climate, and humanity has a “rapidly closing window” to reverse course, the most recent Intergovernmental Panel on Climate Change report warned.
“Given the expected production in the coming few years, by 2027 newly manufactured AI devices will be responsible for as much electricity consumption as my home country, the Netherlands,” de Vries told Insider. “This is also in the same range as the electricity consumption of countries like Sweden or Argentina.”
As AI products become widely available and are adopted by more companies, the demand for AI chips is on the rise, with Nvidia reportedly bringing in $13.5 billion in the second quarter of 2023, the study notes.
“The 141% increase in the company’s data center segment compared to the previous quarter underscores the burgeoning demand for AI products, potentially leading to a significant rise in AI’s energy footprint,” de Vries wrote. “For example, companies such as Alphabet’s Google could substantially increase their power demand if generative AI is integrated into every Google search.”
In August, Google unveiled new AI technology, including creating its own AI chips designed to train LLMs, and added AI-generated software to identify images. The company also added 20 AI models to its cloud service, bringing its total to 100.
De Vries acknowledges in the study: “The worst-case scenario suggests Google’s AI alone could consume as much electricity as a country such as Ireland,” but he says it is more likely that, as AI evolves, technology will likewise change to better support AI. He argues that, regardless of the end result, AI developers should be mindful of when and how they use the technology.
“Everyone should be pretty mindful about whether or not they really need to be trying to put AI into their applications,” he told Insider, adding, “It’s not a miracle cure for everything.” | Energy & Natural Resources |
Tax Collected At Source Will Apply To All Overseas Spends Above Rs 7 Lakh
The Rs 7 lakh limit includes all category of spends under the liberalised remittance scheme in any given year.
Tax collected at source will apply to all transactions beyond Rs 7 lakh a year under the liberalised remittance scheme, irrespective of reason.
In a circular, the Central Board of Direct Taxes clarified on Friday that tax collected at source will follow the following categorisation:
Education spends outside the Rs 7 lakh limit will attract 0.5% tax collected at source.
Medical spends above Rs 7 lakh will attract 5% tax collected at source.
Purchase of tourist packages will attract 5% tax collected at source up to Rs 7 lakh and 20% above that limit.
For all other purposes, 20% tax collected at source will apply after the Rs 7 lakh limit. However, up to Rs 7 lakh, there will be no tax collection.
The CBDT clarified that the Rs 7 lakh limit includes all spends under the liberalised remittance scheme in any given year.
To explain, the CBDT gave an illustration where a person spends Rs 7 lakh on foreign education, another Rs 7 lakh for medical reasons, and Rs 7 lakh more for other purposes overseas.
In such a situation, only spending worth the first Rs 7 lakh will be exempt from TCS. After that, all the spends will attract tax collected at source, depending on the category.
The ceiling will also hold for the entire year, the tax department said, even though the 20% TCS under the LRS limit will come into effect only after Oct. 1, 2023.
As the system for monitoring the remittances under LRS is still being developed by the Reserve Bank of India, the CBDT has notified that the authorised dealers will carry out the process by securing an undertaking from the remitter before the transaction. They would record the details of earlier remittances under LRS by the remitter during the financial year.
"If the authorised dealer correctly collects the tax at source based on information given in this undertaking, he will not be treated as an 'assessee in default,'" the circular said. "However, for any false information in the undertaking, appropriate action may be taken against the remitter under the Act."
No methodology has been stipulated by the ministry, and such undertakings for buying an overseas tour package will be left to the sellers.
The CBDT also clarified that overseas spends on credit cards will continue to remain outside the ambit of the liberalised remittance scheme till further order. This was first announced on Wednesday. | India Business & Economics |
REC Board Approves Hike In Borrowing To Rs 1.5 Lakh Crore For FY24
The funds under the said revised market borrowing programme will be raised, from time to time, during the financial year 2023-24, with the approval of competent authority as per powers delegated in this regard by the Board of Directors, it added.
State-owned REC Ltd on Thursday said its board has approved a proposal to increase borrowing to Rs 1.5 lakh crore from Rs 1.2 lakh crore for 2023-24.
The Board of Directors of REC Ltd, in its meeting held on Nov. 30, 2023, approved revision in its market borrowing programme under different debt segments with interchangeability among various instruments, including bonds/debentures, term loans, external commercial borrowing, commercial papers etc. on private/public placement basis from Rs 1,20,000 crore to Rs 1,50,000 crore for 2023-24, the company said in a regulatory filing.
The funds under the said revised market borrowing programme will be raised, from time to time, during the financial year 2023-24, with the approval of competent authority as per powers delegated in this regard by the Board of Directors, it added.
The board also approved the proposal of equity investment in Hindustan Power Exchange Ltd (HPX) for an amount up to Rs 14.25 crore (i.e. up to 19% of the proposed equity share capital of Rs 75 crore of HPX).
As of now, the paid-up capital is only Rs 55.25 crore, the filing said.
The cost of acquisition is Re one per equity share (at par).
HPX (formerly Pranurja Solutions Ltd) is the new-age power exchange in the Indian electricity market.
It was incorporated on April 24, 2018. It provides a comprehensive market platform for different electricity products, providing a transparent, seamless and robust exchange platform for the market participants.
HPX provides an opportunity for market participants to transact in the most equitable and transparent manner, giving its customers unmatched user experience through advanced technology and customised value-added services. | Banking & Finance |
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LONDON — Look away, Labour left: Tony Blair is in fashion again.
The former prime minister’s rehabilitation back into a party that once struggled to speak his name seemed complete on Tuesday as he shared a stage with current Labour leader Keir Starmer.
In a cosy chat at the Park Plaza Westminster Bridge Hotel just across the river from the Houses of Parliament, Blair and Starmer ended the day by congratulating each other on what a good job each had done.
A major row between Starmer and some parts of his party over social security got only a cursory mention — although Starmer did use the opportunity to hit back at his internal critics.
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“We keep saying, collectively, as a party, we’ve got to make tough decisions,” Starmer told Blair, who was interviewing him to cap a day’s conference for his Institute for Global Change think tank.
“And in the abstract everyone says, ‘That’s right Keir.’ But then we make tough decisions — and we’ve been stuck in one for the last few days — and they say ‘We don’t like that. Can’t we make another one?'”
Starmer was referring to the backlash from many of his own MPs after he declared at the weekend that Labour would maintain a Conservative cap on welfare payments for people with more than two children.
Defending that decision, Starmer told Blair that beleaguered former Tory prime minister Liz Truss had “proved the thesis that if you make unfunded commitments, then the economy is damaged and working people pay the price.”
“I will not let the next Labour government get anywhere near the equivalent of what Liz Truss did,” he declared.
A recurring theme in the pair’s discussion — which marked the first time a Labour leader has openly shared a platform with Blair since Labour was booted from government in 2010 — was the uphill climb a government with Starmer at the helm will face if it wins the next election.
Starmer — whose five “missions” for government echo Blair’s own five promises to voters from his first term — said it was “impossible to list all the challenges” his administration might face.
That didn’t stop him listing them anyway, with the Labour leader saying a cost of living crisis, climate change, an aging society, artificial intelligence, “the mess of the last 13 years,” a “botched” Brexit deal, a “mortgage bombshell,” infrastructure “starved of investment,” underfunded public services and “stagnant” productivity all needed sorting.
Blair told Starmer: “What you’re going to inherit next year is grim.”
Blair remains deeply divisive in his own party. He won three elections and ended more than a decade of Tory rule. But he took Britain into the Iraq war in 2002, and embraced the use of the private sector in running public services.
Blair has in recent years been a vocal critic of Starmer’s left-wing predecessor Jeremy Corbyn, and an ardent opponent of Brexit.
But, in a sign of the times, he heaped fulsome praise on Starmer Tuesday.
“You’ve done an amazing job,” Blair gushed. “You’ve taken the Labour Party in 2019, [when] it was on the brink of extinction, frankly … to the brink of government.” | United Kingdom Business & Economics |
James Comer has touted the fact that Joe Biden loaned his brother $200,000 as surefire evidence of the president’s criminal wrongdoing. But a new report reveals that the Kentucky Republican has done the same thing—and more.
Comer has for months accused Biden of corruption, although he has yet to produce any evidence. In late October, he dropped a so-called “bombshell”: Biden had given his brother James Biden a $200,000 check with the words “loan repayment” on the front.
But as The Daily Beast pointed out in a report published Thursday, “if Comer genuinely believes these transactions clear the ‘shady business practices’ bar, he might want to consider a parallel inquiry into his own family.”
Not only did Comer also lend his brother $200,000, he did it in the sketchiest way possible, according to the report.
Comer co-owns a farming business with his brother. Their late father was also a partner. With this business, Comer and his brother have engaged in multiple land swaps over the years. The Beast details one exchange after their father’s death in January 2019:
Chad Comer bought out his brother’s half of a piece of inherited Kentucky property, paying $100,000, according to deed records in Monroe County. Five months later, James and his wife, Tamara “TJ” Comer, bought the property out in full, this time paying Chad Comer $218,000. The buyout netted Chad Comer an unexplained $18,000 above the total value in July.
In another exchange, Comer gifted his brother his share of two inherited pieces of land, with a share value of $175,000. The cost of the transaction was only $1. Comer’s brother went on to apply for a hefty tax break and then gift Comer a more valuable piece of land in return.
And as Comer likes to say so often, it’s not just about the loan itself. While he was swapping the land from his family’s farming business, Comer held multiple important roles in agriculture oversight. Before coming to Congress, Comer was a member of Kentucky’s state legislature Agriculture Committee for eight years. He also served as the Kentucky agriculture commissioner.
When he was elected to Congress in 2016, Comer was a member of the House Agriculture Committee. Two years later, he negotiated the Farm Bill, which increased federal support for American farmers. But after Comer moved his business away from farming, he also shifted his work away from agriculture oversight.
The Beast also found that Comer supposedly runs multiple businesses that do not appear to exist on paper. The company he ran with his father and brother was called Comer Land & Cattle. There are no business filings for a company with that name anywhere in Kentucky.
Comer says he has a personal agriculture company called James Comer Jr. Farms, but the Beast couldn’t find any official records for a business with that name. And when Comer purchased the land from his brother, the deal listed a third party: a shell company called Farm Team Properties, LLC, owned by Comer and his wife.
Comer listed the company on his financial disclosure statement that year, describing it as a “land management and real estate speculation company” valued between $200,000 and $500,000. But when he listed the company on his 2021 financial statement, he valued it between $500,000 and $1 million. The Beast did not find a clear explanation for the massive increase in value.
Given this information, Comer’s accusations against Biden ring particularly hollow. It would seem the wrong politician is being investigated for “shady” business dealings. | Real Estate & Housing |
Stock Market Today: All You Need To Know Going Into Trade On Nov. 24
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
European bonds fell after a report that Germany will suspend debt limits for a fourth consecutive year, adding to concerns over more borrowing as the euro-area economy slows, reports Bloomberg.
Brent crude was trading 0.90% lower at $81.22 a barrel. Gold was up by 0.13% to $1,992.81 an ounce.
India's benchmark stock indices snapped two days of gains to end marginally lower on Thursday, dragged by losses in Cipla Ltd., Infosys Ltd., and Tata Consultancy Services Ltd.
The S&P BSE Sensex ended 5.43 points, or 0.01%, lower at 66,017.81, while the NSE Nifty 50 fell 9.85 points, or 0.05%, to close at 19,802.
Overseas investors turned net buyers on Thursday after being net sellers for four consecutive sessions. Foreign portfolio investors bought stocks worth Rs 255.5 crore, while domestic institutional investors continued to be buyers and purchased stocks worth Rs 457.4 crore, the NSE data showed.
The Indian rupee weakened 2 paise to close at 83.34 against the U.S. dollar on Thursday.
Stocks To Watch
Lupin: The pharma major has received approval from the U.S. FDA for Bromfenac Ophthalmic Solution, 0.07%, and tentative approval from the U.S. FDA for Canagliflozin Tablets.
LTIMindtree: The global technology consulting and digital solutions company, launched the Quantum-Safe Virtual Private Network (VPN) link in London in collaboration with Quantum Xchange and Fortinet.
Indian Railway Catering and Tourism Corporation: The company’s e-ticket booking and cancellation were temporarily affected today from 11:15 a.m. to 1:52 p.m. due to technical reasons, and the same has been resolved.
Granules: The company received a communication from the GST authorities directing the payment of a tax liability of Rs 43.43 lakh for the tax period July 2017 to March 2021.
Radico Khaitan: The company announced the launch of Magic Moments Remix Pink Vodka to cater to the growing demand for the coloured and flavoured beverage alcohol category.
Bharat Electronics: NSE and BSE imposed a fine of Rs 1,82,900 each on the company for noncompliance with regulations with respect to the composition of the board of directors due to the insufficient number of independent directors.
Karnataka Bank: The bank tied up with Bajaj Allianz Life Insurance Company Limited to distribute life insurance products.
JSW Steel: The steel manufacturer completes the last tranche of its Rs 750 crore investment in JSW Paints, and the company now holds a 12.84% stake in JSW Paints.
Siemens: The company received a GST demand and penalty notice worth Rs 23.7 crore from Belapur's CGST and Central Excise Commissionerate.
NMDC: The company has set the iron ore price at 5,400 per tonne w.e.f Nov. 23 and the fines price at 4,660 per tonne w.e.f November 23.
Indian Hotels: The company has made an investment of Rs 55 crore in Genness Hospitality Private Ltd. and 35 crore in Qurio Hospitality Private Ltd. by way of subscription to rights issues.
Prestige Estates: The company launched a residential project called “Prestige Glenbrook” in Bangalore, comprising 285 apartments across two high-rise towers with a developable area of 0.7 million sq ft and a revenue potential of Rs 550 crore.
Apar Industries: The company opens QIP for raising up to Rs 1000 crore at a floor price of Rs 5,540.33 per share.
Castrol India: The company entered into a tripartite agreement with KFin Technologies Ltd. and Link Intime India Pvt.
Samvardhana Motherson International: The National Company Law Tribunal gave the nod for the scheme of amalgamation between Motherson Consultancies Service Ltd., Motherson Invenzen Xlab Pvt., Samvardhana Motherson Polymers Ltd., and MS Global India Automotive Pvt. with Samvardhana Motherson International Ltd.
Bharat Heavy Electricals: NSE and BSE imposed a fine of Rs 5,42,800 each for non-compliance with the SEBI regulation.
Vishnu Chemicals: The company incorporated Vishnu International Trading FZE, a wholly owned subsidiary in Dubai, UAE.
Anup Engineering: The National Company Law Tribunal gave the nod for scheme of amalgamation between Anup Heavy Engineering Ltd. and The Anup Engineering Ltd.
Clean Science and Technology: The company made an investment of Rs 60 crore in Clean Fino-Chem Ltd., a wholly owned subsidiary of the company, by way of the right issue.
JM Financial: The company received a warning letter from SEBI for a merchant banker rule violation.
IPO Offerings
IREDA: The IPO was subscribed 38.80 times on day three. The bids were led by institutional investors (104.57 times), non-institutional investors (24.16 times), a portion reserved for employees (9.8 times), and retail investors (7.73 times).
Tata Technologies: The IPO was subscribed 14.86 times on day two. The bids were led by non-institutional investors (31.04 times), a reserved portion for shareholders (20.04 times), retail investors (11.20 times), institutional investors (8.55 times), and a reserve portion for employees (2.36 times).
Gandhar Oil Refinery: The IPO was subscribed 15.27 times on day two. The bids were led by non-institutional investors (26.24 times), retail investors (17.27 times), and institutional investors (3.14 times).
Fedbank Financial Services: The IPO was subscribed to 0.90 times on day two. The bids were led by retail investors (1.26 times), a portion reserved for employees (0.78 times), institutional investors (0.56 times), and non-institutional investors (0.52 times).
Flair Writing Industries: The IPO was subscribed to 6.12 times on day two. The bids were led by non-institutional investors (10.05 times), retail investors (7.16 times), and institutional investors (1.36 times).
Bulk Deals
Home First Finance: Smallcap World Fund and Fidelity Global Investment Fund Asia Pacific Equity Fund bought over a 3.25% stake in Home First Finance Company India Ltd. for over 249 crore. True North Fund V LLP,Orange Clove Investments B.V., Aether Mauritius Ltd., True North Fund V LLP, Orange Clove Investments BV, and Aether Mauritius Ltd. sold over a 9.8% stake in Home First Finance Company India.
D B Realty: Authum Investment & Infrastructure bought 27 lakh shares (0.53%) at 198.90 apiece, while Neelkamal Tower Construction LLP sold 73 lakh shares (1.45%) at 199.05 apiece.
Insider Trading
Usha Martin: Promoter group Nidhi Rajgarhia sold 8,000 equity shares on Nov. 21.
D B Realty: Promoter group Shravan Kumar Bali sold 81,060 equity shares between Nov. 20 and 21.
Promoter Vinod Goenka HUF sold 2.7 lakh equity shares on Nov. 21.
Ultramarine and Pigments: The promoter group sold 2,976 equity shares between Nov. 22 and 23.
Pledge Share Details
Sterling and Wilson Renewable Energy: Promoter Khurshed Yazdi Daruvala created a pledge of 1.93 lakh equity shares on Nov. 20.
Who’s Meeting Whom
Black Box: To meet analysts and investors on Dec. 1.
Premier Explosives: To meet analysts and investors on Nov. 28.
The New India Assurance Company: To meet analysts and investors on Nov. 29.
Five-Star Business Finance: To meet analysts and investors on Nov. 28 and Nov. 29.
JK Tyre & Industries: To meet analysts and investors on Nov. 28, 29 and 30.
The Phoenix Mills: To meet analysts and investors on Nov. 28 and 29.
Advanced Enzyme Technologies: To meet analysts and investors on Nov. 29 and 30.
Escorts Kubota: To meet analysts and investors on Dec. 5.
Indian Energy Exchange: To meet analysts and investors on Nov. 29.
V-Mart Retail: To meet analysts and investors on Nov. 30.
HEG: To meet analysts and investors on Nov. 29.
NHPC: To meet analysts and investors on Nov. 29.
Shriram Finance: To meet analysts and investors on Nov. 29.
Yatharth Hospital & Trauma Care Services: To meet analysts and investors on Nov. 28 and 30.
Titagarh Rail Systems: To meet analysts and investors on Nov. 25 to Dec. 1.
Care Ratings: To meet analysts and investors on Nov. 29 and 30.
Bajaj Finserv: To meet analysts and investors on Nov. 29 and 30.
Hindalco Industries: To meet analysts and investors on Nov. 29.
Tata Steel: To meet analysts and investors on Nov. 29.
Jindal Stainless: To meet analysts and investors on Dec. 12.
Oil and Natural Gas Corp: To meet analysts and investors on Nov. 30.
Rhi Magnesita India: To meet analysts and investors on Nov. 28.
Piramal Enterprise: To meet analysts and investors on Nov. 29.
Bharti Airtel: To meet analysts and investors on Nov. 29 and 30.
Grasim Industries: To meet analysts and investors on Nov. 29 and 30.
Trading Tweaks
Ex/record date Interim dividend: BMW Industries, Ddev Plastiks Industries, ESAB India, Goldiam International, Manappuram Finance, Natco Pharma, Power Finance Corporation, Uniparts India.
Ex/record date Bonus issue: Avantel
Ex/record date Buyback: Gujarat Narmada Valley fetilizers & Chemicals, Tata Consultancy Services.
Move into a short-term ASM framework: Prataap Snacks.
F&O Cues
Nifty November futures fell 0.08% to 19,868.75 at a premium of 66.75 points.
Nifty November futures open interest rose by 3.68% to 7,696 shares.
Nifty Bank November futures rose by 0.23% to 43,690.15 at a premium of 112.65 points.
Nifty Bank November futures open interest fell by 5% to 6975 shares.
Nifty Options Nov 23 Expiry: Maximum call open interest at 20000 and maximum put open interest at 19,800.
Bank Nifty Options Nov 22 Expiry: Maximum Call Open Interest at 44000 and Maximum put open interest at 43,500.
Securities in the ban period: Balrampur Chini, HPCL, Hindustan Copper, Indiabulls Housing Finance, India Cement, Manappuram Finance, MCX, RBL Bank, Zee Entertainment.
Money Market Update
The Indian rupee weakened 2 paise to close at 83.34 against the U.S dollar on Thursday. | India Business & Economics |
Eight family members have been accused of smuggling 178 tons of aluminum cans and plastic bottles from Arizona to California so they could take advantage of the Golden State's recycling programs, officials said.
They eight relatives are accused of defrauding California's beverage container recycling program of $7.6 million over an eight-month period, California Attorney General Rob Bonta said Tuesday. The family members are facing charges of recycling fraud, grand theft and conspiracy.
"California's recycling program is funded by consumers, and helps protect our environment and our communities," Bonta said. "Those who try to undermine its integrity through criminal operations will be held accountable.
Arizona does not have a recycling program that provides redemption value for bottles and cans. California's recycling program, administered by CalRecycle, allows people to redeem empty cans and bottles for a 5- or 10-cent return on eligible beverage containers, but only material from California is eligible.
The state's Department of Justice launched an investigation into a group of recycling centers in southern California's Riverside County in October 2022. During the investigation, agents served search warrants on six locations. They seized over a $1 million and more illegally imported beverage containers.
In addition to Bonta's actions against the alleged fraudsters, CalRecycle will carry out action against the involved recycling centers, officials said.
The defendants were identified in charging documents as Maria Ermelinda Saenz Gonzalez, Francisco Balmore Amaya Saenz, Jose Raul Chica, Jose Antonio Interiano Martinez, Jose Alfredo Giron Henriquez, Victor Manuel Hernandez, Manuela Rodriguez Rizo and Genaro Solis Fuentes.
Prosecutors are requesting $30,000 bail for most of the defendants, but have asked for a $50,000 bail from Balmore Amaya Saenz and a $10,000 bail from Solis Fuentes.
for more features. | Consumer & Retail |
"I have £50,000 saved but I still can't buy a house."
Freya Milner, 24, is just one young person trying to get on the property ladder with no end in sight.
And those who are renting say they feel they have no chance of saving enough money even to get a deposit together for a house.
Freya said some support from family meant she was able to get her own deposit, but high interest rates and a lack of affordable properties meant she was stuck paying almost half her salary on renting.
She has a well-paid job as a scientific content creator for an educational games company, but said she cannot see how single young professionals are expected to buy without further support.
"My salary isn't enough to cover the threshold to get a mortgage of £200,000," she said.
"I was told by previous generations 'get a good degree and the rest will sort itself' but it hasn't.
"Although I work full time I can't earn enough. I don't drink, I don't go out to eat more than once a month, normally for a friend's birthday."
Freya, who pays £775 in rent a month, excluding bills, for her one bedroom flat in Cardiff, said: "I wouldn't mind renting if it wasn't so expensive for a property that often comes with a huge amount of issues."
She said she often found properties in the Welsh capital were low quality, and a previous property she was in had a collapsed ceiling which meant she was "so cold I couldn't sleep".
"I think young people are disheartened. How can we save for the future when we can't save enough to beat the price hump from renting to owning?"
Mortgage rates have risen to highest level for 15 years - a typical five-year fixed mortgage deal now has an interest rate of more than 6% - a level not seen since the financial crisis.
The Bank of England has said mortgage payments will rise by at least £500 a month for nearly one million households by the end of 2026.
The number of homes available is down by a third, adding even more pressure to buyers.
Wales' First Minister Mark Drakeford criticised the Bank of England's actions, saying it was in "real danger" of overcorrection in raising interest rates to control inflation, causing "avoidable" misery to thousands.
He accused the central bank of being "intent on inducing a recession".
"It's very clear from what they have said that they are going to rise interest rates to a point where unemployment is going to be rising across the whole of the United Kingdom, and Wales will not be exempt from that."
"It will not have seen the impact yet of all the interest rate rises its put into the system so far," Mr Drakeford told BBC Radio Wales Breakfast..
Citing Andy Haldane, the former chief economist of the Bank of England, he added: "The bank is in danger of trying to squeeze the very last drops out of inflation, at the expense of avoidable misery in thousands and thousands of lives."
The Bank of England has been asked for comment.
But it is not just mortgages hitting housing costs. Data from Zoopla shows in the UK the average rent increase in the year leading up to January 2023 was 11.1%, while the rate in Cardiff rose by 10.8%.
Rent levels in Neath Port Talbot went up the most in Wales at 16%.
Andrew Noel, 29, said people like him who rented were being discouraged from saving if they were not able to afford a mortgage anyway.
Andrew, who also lives in Cardiff with a housemate, has been told he must leave his property in February but is having difficulty finding a new one.
"We've been trying to look for somewhere that won't completely strip our wages every month," he said.
"Obviously, we want to have wages left for our energy bills, so we can't be spending £900 each as that is so much money to be able to afford when it really shouldn't be."
He said the only option for average earners his age to buy was to live at home long enough to brace for the high interest rates or buy as a couple.
"From my point of view, buying right now is not an option unless something magical happens," he said.
He said he believes rent controls may the only way to curb the problem.
Interest rates are set for the UK by the Bank of England, while housing is a devolved issue in Wales.
The Welsh government said: "We believe everyone has a right to an affordable and decent home.
"We're committed to publishing a White Paper on the potential to establish a system of fair rents, as well as new approaches to make homes affordable for those on local incomes."
Speaking on BBC Radio Wales Breakfast earlier, Mr Drakeford also said the Welsh government would build "20,000 affordable homes... for social rent during this Senedd term".
But Housing Minister Julie James said last year the target was "hanging by a thread" because of the state of the economy.
Have you been affected by the increase in mortgage rates? Get in touch by emailing [email protected].
Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways: | Real Estate & Housing |
Image source, Getty ImagesCharities have told the BBC of their disappointment at Amazon closing its charity donation scheme by 20 February.The BBC has spoken to several UK charities about the end of AmazonSmile, a scheme that allows customers to donate to a charity of their choice when purchasing items on Amazon.The firm said the scheme had not had the impact it had wanted it to.But charities have said they are sad to see it go, with one saying small charities will suffer the most.In an email, the online retail giant said AmazonSmile had not "grown to create the impact that we had originally hoped", noting that the average donation to UK charities in 2022 was less than £137.It said it will donate an amount to participating organisations equivalent to six months of what they earned from AmazonSmile in 2022.The scheme was launched in 2013, and saw the corporation donating a small percentage of the sale price of items on its website to a charity chosen by the customer.The decision comes weeks after Amazon announced plans to cut more than 18,000 jobs, the largest number in the firm's history, as it battles to save costs.James Jackson, RSPCA head of corporate partnerships, said it was "disappointed" by the closure of AmazonSmile, through which it has raised £430,000 since 2017."While we're saddened to see AmazonSmile close, we note Amazon's commitment to prioritising other philanthropic projects instead," he said. Amazon engages with other charitable causes, as well as having a product donation programme, which it says provided more than 15 million essential goods to those in need in 2022.'Crazy' attitudeVanessa Martin, founder of the Childhood Tumour Trust, criticised Amazon for saying the scheme had not had the impact it hoped for."For tiny charities like ours that rely on fundraising to exist, the phrase 'every penny counts' couldn't be truer - particularly in the times we are living in," she said.The charity she founded aims to help families with children who have been diagnosed with neurofibromatosis, a condition that causes tumours to grow on nerves. She said it had raised £2,000 through the scheme - enough money to send five children to a therapeutic camp."It's still a lot of money," she said. "Their attitude is crazy... when we are happy with a £10 donation, are they saying it's better to not give anything? "No doubt, it will be the lesser-known [charities] that suffer."The impact has been felt at charities worldwide, with the Global Sanctuary for Elephants saying it was "upset by this inconsiderate decision", and US-based SquirrelWood Equine Sanctuary saying the donations it had received "meant the world".Cheryl George, fundraising manager at Hope Rescue, which aims to save stray and abandoned dogs in South Wales, was also critical of Amazon for questioning the impact of its charity scheme."They haven't asked what the impact is," she said."They can ask us for an impact report, they can ask the charities out there - what impact is it making?"She said the donations were not a one-way street. Charities including Hope Rescue, and others the BBC spoke to, explained they would promote AmazonSmile when emailing patrons."They've had years and years of free marketing from small charities," she said. "It hasn't been all about goodwill, there's been benefits to them doing AmazonSmile as well."I think they have a social responsibility to give back."Paul Howard, chief executive of Lupus UK, told the BBC the charity has received £14,500 as of November 2022, and the closure would result in "sorely missed income". "Our income has been significantly hit since 2020," he said. "We have vastly increased our spending on welfare grants for lupus patients to help them manage throughout the pandemic and now the cost of living crisis."Amazon has urged charities to create their own wish lists on its site. It also says it has launched a new section of its website where charitable organisations can open their own storefronts and keep all of the profits on sales.Large charities such as Cancer Research UK, which raised £1.4m through AmazonSmile donations, told the BBC it was "looking forward" to working with Amazon on its upcoming store.But Becky Rowson, corporate partnerships manager at Crohn's and Colitis UK, which helps people living with inflammatory bowel disease, said the charity simply was not able to open a store on Amazon."We, like many other charities, do not have a retail arm, and building one would take us time," she said."The funds helped us support the 500,000 people living with Crohn's and Colitis. "Every penny counts, so it is disappointing that this dependable source of income will come to an end, and we will now have to look at other ways to replace that vital funding." | Nonprofit, Charities, & Fundraising |
Sunak Faces MP Demands To Cut Taxes Before Election: Tory Latest
Prime Minister Rishi Sunak said he wants to cut taxes as many members of his UK Conservative Party want, but that his immediate priority is on bringing down inflation.
(Bloomberg) -- Prime Minister Rishi Sunak said he wants to cut taxes as many members of his UK Conservative Party want, but that his immediate priority is on bringing down inflation.
Sunak’s governing Tories hold their annual conference in Manchester from Sunday, in what will effectively trigger the countdown toward a general election expected in 2024. They trail the opposition Labour Party by double digits in opinion polls, and the prime minister is under pressure to come up with policy plans to win over voters.
Speaking to the BBC on Sunday, Sunak also said declined to commit to building the northern leg of the UK’s flagship high-speed rail project HS2 between Birmingham and Manchester. That risks undermining his efforts to galvanize the party this week.
Key Developments, Stories:
- Sunak speaks to BBC in Manchester ahead of conference
- Unions Protest Against Tory Conference With a Week of Strikes
- Shapps Weighs UK Military Trainers in Ukraine, Telegraph Says
- The Tories Auditioning for Sunak’s Job If He Can’t Save His Own
(All times UK)
Sunak Again Refuses to Comment on HS2 (9:55 a.m.)
Rishi Sunak’s government has spent days fending off questions about the future of the HS2 high-speed rail link, in particular reports ministers are considering scrapping the northern leg between Birmingham and Manchester. On Sunday, the premier again refused to say if it will go ahead.
“I’m not going to comment on further speculation, but what I can tell you we are doing is absolutely committed to levelling up across this country,” he told the BBC. He also said connections between northern cities and transport within the cities should be prioritized, another hint that a change to HS2 may be in the works.
Questions about HS2 have emerged as Sunak has begun talking about adopting a more pro-motorist agenda, which Transport Secretary Mark Harper is expected to announce in his keynote speech on Monday.
Read More: Sunak Says Filling UK Potholes as Pressing as Pricey HS2 Project
Hunt: Tories Need ‘Credible Answer’ on Tax (9:50 a.m.)
Chancellor of the Exchequer Jeremy Hunt has repeatedly rejected calls from his fellow Conservative MPs for immediate tax cuts, saying the government needs to focus on reducing inflation and boosting growth. Still, in an interview with the Times newspaper on Saturday, he acknowledged that a party that hoped to win the next election would need a “credible answer” to the question of whether taxes would rise forever.
Sunak Says He’s Focused on Inflation (9:30 a.m.)
Prime Minister Rishi Sunak, responding to a call from one of his own Cabinet ministers to cut taxes before the general election (see 8:35 a.m.), said he is focused on reducing UK inflation.
“I’m a Conservative, of course I want to cut taxes. The best tax cuts that I can deliver to the British people right now is to halve inflation,” Sunak told the BBC on Sunday. “It’s a tax that impacts the poorest people the most.”
But his refusal to commit to cutting taxes before the vote is likely to worry many members of his party, and heap more pressure on his Chancellor of the Exchequer Jeremy Hunt ahead of his fiscal statement in the autumn.
Gove Backs Tax Cuts on ‘Work’ (8:35 a.m.)
Veteran Cabinet member and Brexit campaigner Michael Gove added his voice to the chorus of Conservatives calling for tax cuts before the next election. But he said he favored tax cuts on “work,” rather than on inheritance, as been under discussion in Downing Street.
“My own view is that wherever possible, we should cut taxes on work,” Gove, who oversees the government’s efforts to “level up” less prosperous areas, told Sky News. “In other words, we should incentivize people to work harder. We should make sure that they’re better rewarded for the enterprise, the effort, the endeavor that they put in.”
Pressed for specifics, Gove said it was up to the chancellor and the prime minister to decide tax policy. While he didn’t echo calls of some MPs for immediate relief, he said “would like to see the tax burden reduced before the next election.”
Tories Call for Tax Cuts Ahead of Election (Earlier)
Tax is a major source of tension in Rishi Sunak’s governing Conservative Party, with many of his Members of Parliament hoping the government will reduce the burden on struggling Britons ahead of the next general election. In a speech at the Tory conference on Monday, former Prime Minister Liz Truss will call for corporation tax cuts and warn that millionaires are leaving the UK. Former Home Secretary Priti Patel has also weighed in as the conference gets underway.
Tory MPs fear that the burden on struggling Britons will cost them votes, following analysis by the Institute for Fiscal Studies think tank which found that taxes will have risen by about £3,500 per household since the last general election.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | United Kingdom Business & Economics |
Flair Writing Industries Raises Rs 178 Crore From Anchor Investors Ahead Of IPO
The integrated facilities management company allotted 58,51,972 shares at Rs 304 apiece to 23 anchor investors.
Flair Writing Industries Ltd. has raised Rs 178 crore from anchor investors ahead of its initial public offering on Nov. 22.
The integrated facilities management company allotted 58,51,972 shares at Rs 304 apiece to 23 anchor investors.
The investors included HDFC Mutual Fund, Kotak Mahindra Trustee, Aditya Birla Sun Life Trustee, and Tata Mutual Fund, among others.
SBI Consumption Opportunities Fund secured 15.86% of the allocation, while Kotak Manufacture In India Fund and Kotak Consumption Fund each netted 2.81%.
Six domestic mutual funds have applied through a total of 14 schemes, the company said in an exchange filing. They have collectively netted 47.34% of the anchor portion of Rs 84.2 crore.
About The IPO
Flair Writing Industries will launch its initial public offering on Wednesday, with a price band of Rs 288–304.
The company plans to raise funds through the issuance and sale of 1.95 crore shares at a face value of Rs 5 each, aggregating up to Rs 593 crore.
The IPO of Flair Writing will be a combination of a fresh issue and an offer for sale. The fresh issue comprises approximately 96.1 lakh shares in the upper price band of Rs 304 for Rs 292 crore. The OFS portion of the IPO comprises sale of 99 lakh shares at the upper price band of Rs 304 for Rs 301 crore. | Stocks Trading & Speculation |
Rishi Sunak’s determination to roll back some of the UK’s key climate policies risks opening up rifts within his own party, as senior Conservatives expressed their deep unease at the move.
Proposals to delay or water down green measures, such as pushing back the dates for ending sales of petrol and diesel cars, and gas boilers, are likely to be fleshed out later this week.
The move is intended to drive a “green wedge” between the Tories and Labour, whose leader, Sir Keir Starmer, vowed this summer to “throw everything” at the climate crisis.
But there are strong indications that the wedge could end up being driven into the Tory party itself. Many senior Conservatives, who have championed policies to support the goal of reaching net zero greenhouse gas emissions by 2050, are furious at what they see as a U-turn and betrayal.
Ben Goldsmith, the chair of the Conservative Environment Network, told the Guardian: “Any decision to backtrack in our efforts to tackle the greatest challenge of our time would be on the wrong side of history, and of the polls too. People of all political persuasions want immediate action. They want nature restored and the climate problem solved. They know that the solutions are cleaner, better and increasingly cheaper than the polluting industries which stand to benefit from continued inaction.”
Alok Sharma, the former cabinet minister who led the Cop26 climate summit in Glasgow in 2021, is in New York for the UN secretary general’s climate ambition summit, taking place on Wednesday, alongside the UN general assembly. He wrote on Twitter: “For any party to resile from this agenda will not help economically or electorally.”
Chris Skidmore, the outgoing Tory MP and former minister who wrote a review of the Tories’ net zero approach, also warned of the economic consequences. He said: “If this is true, the decision will cost the UK jobs, inward investment and future economic growth that could have been ours by committing to the industries of the future. It will potentially destabilise thousands of jobs and see investment go elsewhere. And ultimately, the people who will pay the price for this will be householders whose bills will remain higher as a result of inefficient fossil fuels and being dependent on volatile international fossil fuel prices.”
The Guardian has seen evidence that Conservative MPs are privately discussing sending letters of no confidence in the prime minister to Sir Graham Brady, the chair of the 1922 committee, with a view to gathering enough support for a vote.
Voices on the right of the Tory party, and in sections of the rightwing media, have been urging the prime minister to take an anti-net zero tack since he took office last year. They want to generate a “culture war”, akin to that seen in the US where most of the candidates hoping to bag the Republican party nomination for president have refused to affirm climate science, or shrugged off the need for climate action.
Whether such a culture war could work in the UK is a matter of doubt. In polls, large majorities of voters consistently say they want to see strong action on the climate. Young people are particularly engaged, citing the climate as a top priority. Businesses, too, have long geared up to fulfil their part in net zero – many will have their plans thrown off course by any U-turn, and will be exasperated by a recurrence of the political turmoil they thought had been settled with the defenestration of Liz Truss.
Sam Richards, a former Tory Downing Street adviser under Boris Johnson, now founder of the Britain Remade thinktank, contrasted Sunak’s actions with the green investment strategies of Joe Biden in the US, the EU and China. “At the very moment [they] and others are investing trillions in building new clean industries, the government now appears set to inject more uncertainty for businesses and put Britain further behind our rivals,” he said.
When at the Treasury, Sunak frequently obstructed or watered down green policies put forward by Boris Johnson, including hobbling measures to insulate Britain’s homes. But when he took over after the disastrous leadership of Liz Truss, who sought to roll back green measures and cast doubt on the net zero target, he appeared willing to restore a moderate approach. His cabinet contained several proponents of climate action, including the self-identified green Tory Jeremy Hunt, the defence secretary, Grant Shapps, and the former environment secretary Michael Gove.
However, members of cabinet previously identified with green issues seem to have swallowed their misgivings. Zac Goldsmith, the former MP ennobled by Boris Johnson, carried on as minister under Sunak until his resignation in late June. Shortly after his resignation, he criticised those he felt were back-pedalling. “I don’t think you can understand and care about the gravity of this issue and at the same time be willing to take your foot off the accelerator for political expediency,” he told the Guardian at the time. “I just think that would require you to be a monster.” | United Kingdom Business & Economics |
IREDA IPO Allotment: How To Check Allotment Status?
Indian Renewable Energy Development Agency IPO Allotment: Check the allotment status on the websites of Link Intime & BSE.
Indian Renewable Energy Development Agency (IREDA) recently concluded its Initial Public Offering (IPO) subscription period on November 23. The IPO, amounting to Rs 2,150.21 crores, witnessed robust demand on the final day of subscription, the enthusiasm for IREDA's IPO soared, with an impressive total subscription of 38.80 times.
The IPO offered a mix of fresh issue and an offer for sale, with a price band of Rs 30 to Rs 32 per share. Notably, retail investors needed a minimum investment of Rs 14,720 to participate, with subscription numbers reflecting a strong interest from various investor categories.
How to check IREDA IPO allotment status on Link Intime Pvt Ltd.?
Visit the Link Intime website here: https://linkintime.co.in/IPO/public-issues.html
Select "Indian Renewable Energy Development Agency Limited" from the drop-down list on the Public Issues page. (IPO will be listed once allotment is finalized)
Enter your PAN number, application number, or DP Client ID.
Click on the "SUBMIT" button.
Download or print the allotment status for your records.
How to check IREDA IPO allotment status on BSE website?
Go to the official BSE website: https://www.bseindia.com/investors/appli_check.aspx
Select the issue type as 'Equity.'
Choose "Indian Renewable Energy Development Agency Limited" from the dropdown menu.
Enter your application number or PAN (Permanent Account Number).
Complete the 'Captcha' for verification.
Click on the "Search" button to view your allotment status.
Download or print the allotment status for your records.
IREDA IPO Listing Date
Shares of Indian Renewable Energy Development Agency Limited are set to be listed on BSE & NSE on Wednesday, November 29.
*This is a tentative date and is subject to change.
IREDA IPO Timeline (Tentive Schedule)
IPO Open Date: Tuesday, November 21
IPO Close Date: Thursday, November 23
Basis of Allotment: Friday, November 24
Initiation of Refunds: Friday, November 24
Credit of Shares to Demat: Tuesday, November 28
Listing Date: Wednesday, November 29
IREDA IPO Issue Details
Total issue size: Rs 2,150.21 Cr
Face value: Rs 10 per share
Fresh issue size: Rs 1,290.13 Cr
Shares for fresh issue: 403,164,706 shares
Offer for sale size: Rs 860.08 Cr
Shares for offer for sale: 29,571,390 shares
Price band: Rs 30 to Rs 32 per share
Lot size: 460 shares. | Renewable Energy |
Cooking Pizza In Italy Is Costlier As Olive Oil Price Jumps
The total amount spent on ingredients and energy to cook the quintessential Naples dish rose 18.4% in May from a year earlier.
(Bloomberg) -- The cost of making a classic Pizza Margherita rose more than twice as fast as overall inflation in Italy last month, driven by the surging price of olive oil and mozzarella cheese.
The total amount spent on ingredients and energy to cook the quintessential Naples dish rose 18.4% in May from a year earlier, according to Bloomberg calculations based on Istat and Economy Ministry data.
The monthly gauge continues to far outstrip the overall inflation rate, which stood at 8% last month. Still, the pace of price increases eased from April and compares with a November peak of more than 30%.
The cost of buying a prepared pizza rose only 7.7% year-on-year, increasing the appeal of going out to eat.
Bloomberg’s Pizza index crunches data on flour, tomatoes, mozzarella, olive oil and the electricity consumption needed to power an oven. The biggest month-on-month increase was for tomatoes, which were 7.5% more expensive than in April. Energy was the only item that fell, down 1.4%.
Here is a breakdown of the change in the price of ingredients in May:
- Flour rose 9.4% Y/y and 0.3% M/m
- Mozzarella rose 22.1% Y/y and 0.3% M/m
- Tomatoes rose 18.2% Y/y and 7.5% M/m
- Olive oil rose 24.6% Y/y and 1.0% M/m
- Electricity rose 13.5% Y/y but fell 1.4% M/m
The cost of pasta also rose again in May, according to Istat data. Consumer advocate group Assoutenti has called for a national pasta boycott from June 22 after the government in Rome decided not to act to counter higher prices at a meeting last month.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Inflation |
PLEDGES made by Labour Party leader Keir Starmer during the 2020 leadership election have been removed from his website.
When Starmer was running for leadership of the party he made a list of ten pledges he vowed to keep, including scrapping tuition fees and ending universal credit.
However, during the course of his leadership Starmer has abandoned or watered down many of the promises made.
Now, the Labour leader appears to have erased any mention of the pledges from his website.
A link which formerly took people to a page detailing the ten pledges now comes up with an error.
But, for the sake of posterity, we’ve placed a few of the pledges below along with details as to whether Starmer appears to be keeping to them.
Economic Justice
Starmer promised to increase income tax for the top 5% of earners.
However, in three short years it seems he has changed his mind about making the wealthiest pay more.
Shadow chancellor Rachel Reeves has said she has “no plans” to increase income tax and that Labour will instead focus on growing the economy if it wins the General Election.
Social Justice
Within this pledge there were plans to “abolish Universal Credit and end the Tories’ cruel sanctions regime”.
But the party now states that it will reform rather than abolish Universal Credit.
This pledge also contained a promise to abolish tuition fees, which Starmer abandoned back in May.
Promote peace and human rights
The Labour leader promised “no more illegal wars” and said he would review all UK arms sales.
A large number of Labour MPs voted to rebel after Starmer refused to back calls for a ceasefire in Gaza.
He even claimed that Israel ‘has the right’ to withhold power and water from Palestinians living in the area.
It is a position that has been much criticised by politicians in his own party, with one Scottish Labour MSP questioning whether Starmer realised there was a “massacre happening right now in Gaza”. | United Kingdom Business & Economics |
More than 200 LGBTQ groups angered by Target’s decision to pull Pride merchandise from shelves are demanding the company “denounce extremists” and restock all the Pride merchandise in stores and online.
The Human Rights Campaign, along with GLAAD, GLSEN and other groups, released a statement asking Target and other businesses like Anheuser-Busch to “reject and speak out against anti-LGBTQ+ extremism going into Pride Month.”
More than 200 other progressive and LGBTQ organizations signed on to the statement, which argued that showing support for their community was good for business.
The organizations laid out a three-part demand that calls on Target to restock all the Pride merchandise both in stores and online, ensure the safety of Target employees and release a statement “reaffirming their commitment to the LGBTQ+ community” within 24 hours.
“When it comes to advancing diversity, equity and inclusion, there is no such thing as neutrality,” the LGTBQ coalition said.
The coalition suggested they would continue to support Target and other businesses who rejected criticism from consumers.
“Target, and all businesses, can leverage the support of LGBTQ+ organizations to navigate this hate, so that together, we can let extremists know unequivocally that, just as with every other failed anti-LGBTQ+ campaign of the past, fear will not win,” the statement reads.
Target displays LGBTQ-themed apparel annually leading into June.
However, the retail giant came under increased scrutiny after consumers noticed stores selling “tuck-friendly” women’s bathing suits for transgender people and Pride apparel for children and infants.
The company responded to widespread backlash over the Pride merchandise by moving some Pride products to less prominent sections of the store and removing other merchandise altogether.
Target said it moved the products to ensure employees’ safety.
The move angered progressives and LGBTQ groups who said Target had “caved to violent political extremists” and “betrayed” LGTBQ customers.
Several of the designers who partnered with the company spoke to the media about their disappointment in the company not standing by their products when faced with backlash.
“It’s a very dangerous precedent to set, that if people just get riled up enough about the products that you’re selling, you can completely distance yourself from the LGBT community, when and if it’s convenient,” Abprallen designer Erik Carnell told Reuters.
Another designer for the Pride collection said Target had removed most of their collection from stores “due to threats from domestic terrorists.”
Target has only released one public statement on the controversy so far.
“For more than a decade, Target has offered an assortment of products aimed at celebrating Pride Month. Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work. Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior. Our focus now is on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year,” the company said in a release on May 24.
That same day, Target CEO Brian Cornell defended the company’s decision in a letter to employees while expressing support for the LGBTQ community.
Target did not respond to Fox News Digital’s request for comment.
Fox News’ Brian Flood contributed to this report. | Consumer & Retail |
- Walmart will report its fiscal third-quarter earnings Thursday.
- Investors anticipate the retailer's earnings and revenue will be higher year over year.
- The discounter has fared better than other retailers because of its low-price reputation and big grocery business.
Walmart will report quarterly earnings Thursday as the discounter generally outperforms its rivals.
Here's what Wall Street expects from the retailer, according to consensus estimates from LSEG, formerly known as Refinitiv:
- Earnings per share: $1.52 expected
- Revenue: $159.72 billion expected
As the holidays approach, investors have bet the big-box retailer has the ingredients to drive sales, even as shoppers are more discerning. It's the nation's largest grocer, which helps drum up steadier foot traffic.
Walmart has invested in its e-commerce business by expanding its assortment through its third-party marketplace. It's also making money in newer ways, such as by selling ads and annual memberships to Walmart+, its answer to Amazon Prime.
Shares of the company touched an all-time high Wednesday dating to when Walmart debuted on the New York Stock Exchange in August 1972. The stock closed at nearly $170 on Wednesday, up about 19% for the year.
Target's performance also lifted Walmart's stock Wednesday and could bode well for Walmart's quarter. Target's sales declined year over year, but it topped Wall Street's expectations for earnings and revenue.
Walmart has outperformed Target over the past year, leaning on grocery sales and a reputation for low prices.
Michael Baker, a retail analyst for D.A. Davidson, said Walmart has taken market share because it has hit a sweet spot of carrying a heavier mix of basics and building a reputation for value.
But, he added, it could be at risk as it reports earnings again.
"To me, the concern there is, 'Have expectations gotten to be too high?'" he said. | Consumer & Retail |
It is unlikely a Labour government will be able to meet its ambition to spend £28bn a year on green initiatives, a source close to Sir Keir Starmer has told the BBC.
Labour announced the flagship policy at its annual conference in 2021.
But in June shadow chancellor Rachel Reeves watered the pledge down, saying the figure would not be reached until 2027.
Now, it is understood the figure will probably not be reached at all.
A senior source in the Labour leader's office said that was because of the state of the public finances. They stressed that Labour's fiscal rules were more important than any policy.
The Conservatives have previously warned of the alleged dangers of the policy - claiming extra borrowing could increase interest rates and mortgage costs.
During the Labour party conference in Brighton two years ago, Ms Reeves announced her ambition to be the UK's first "green" chancellor.
She unveiled Labour's Green Prosperity Plan, explaining money would go on offshore wind farms, planting trees and developing batteries. She added it would be funded by borrowing.
But in June Ms Reeves said she took the decision to scale back the Green Prosperity Plan as a result of the poor state of the economy.
"No plan can be built that is not a rock of economic and fiscal responsibility," Ms Reeves told BBC Radio 4's Today programme at the time.
She added. "I will never play fast and loose with the public finances."
Five months on, there are major doubts at the top of the Labour party about the prospect of ever hitting that level of investment due to the state of the public finances.
This is because the party's fiscal rules - which include a promise to get debt falling within five years - are viewed as the "North Star"; more important than any policy, according to the senior Labour source who spoke to the BBC.
Another Labour source told the Telegraph: "The fiscal rule matters more, and that will dictate how much is in the green prosperity fund."
Labour is determined to paint itself as the party of economic credibility - even if it means tempering one of the central planks of its programme for government. | United Kingdom Business & Economics |
The prime minister has been warned that abandoning HS2’s second leg would be a “mistake” and a “tragedy” amid reports the government is poised to scrap the line’s second stage.
HS2 is intended to greatly reduce north-south intercity journey times and also release vast amounts of capacity for local train services on existing lines.
The project is currently set to be completed in stages from 2029 onwards, however it was originally due to open in 2026.
But the line is beset by delays and rising costs and the Independent has reported that Sunak and chancellor Jeremy Hunt are understood to have reviewed £30 billion potential “savings” that could be made by scrapping parts of it at a meeting on No.10 on Tuesday.
A cost estimate of the project seen by the paper suggested the government has already spent £2.3 billion on stage two of the high-speed railway from Birmingham to Manchester and that shelving the northern phase would save up to £34 billion.
Former chancellor George Osborne, who was a key supporter of the high-speed rail project in government, commented on the reports on his new podcast with Ed Balls Political Currency.
He said: “It’s a mistake. Yes, we’ve got to get costs under control – and we’ve got to ask why other countries in Europe can build high-speed lines much more cheaply than we can,”
“But there’s a much bigger point here which is: are we prepared to take the difficult, long-term decisions which are controversial on infrastructure to provide for our country’s future?”
“If you cancel this leg that is 13 years of work, preparation … then you’re basically saying nothing is going to be built.”
He went on: “HS2 will transform connectivity to the north of England and it would be a real, real tragedy if this government abandoned it.
Rishi Sunak’s spokesperson yesterday repeatedly refused calls to confirm the government was still committed to taking the line into Manchester as promised.
Shadow transport secretary Louise Haigh said: “The Conservatives crashed the economy and now they want the North to pay the price. Their chaotic mismanagement has hit jobs, harmed growth, and cost taxpayers even more.
“Labour will call time on 13 years of failure, and deliver the infrastructure fit for the century ahead”.
Andy Burnham, mayor of Greater Manchester, also reacted to the news, saying: “It’s coming up 10 years since [George] Osborne’s ‘Northern Powerhouse’ speech and the Tories are set to scrap the last of his rail pledges”.
“The result? The southern half of England gets a modern rail system and the North left with Victorian infrastructure. Levelling up? My a**e.”
He added: “Government is guilty of gross mismanagement of HS2 and of making the North pay for their failure. Once again, passengers here are seen as second-class citizens.
“The North-South divide is no accident. It’s national policy. It’s only by waking up to that fact that we can begin to understand the level of change Westminster, Whitehall and our entire political system needs.” | United Kingdom Business & Economics |
PE firm True North Forays Into Private Credit, Raises Rs 1,000-Crore Fund
The firm said it had set up a fund in 2022, and has already raised over Rs 1,000 crore. It intends to close the fund by the end of the year, as per a statement.
Homegrown private equity fund True North on Monday announced a foray into private credit, joining a slew of other entities which have started dabbling in this space.
The firm said it had set up a fund in 2022, and has already raised over Rs 1,000 crore. It intends to close the fund by the end of the year, as per a statement.
The business christened 'True North Private Credit' will build on the capabilities by the firm over the last two decades.
A favourable risk-reward equation and a good regulatory framework make private credit a robust business, the statement said.
The business will offer agile capital solutions to well-governed and profitable enterprises and deliver superior, risk-adjusted returns to its investors, it said.
The fund, which bridges the supply-demand gaps for middle-market companies, will invest Rs 75 crore by itself into companies and Rs 200 crore along with its co-investment pools, as per the statement.
It is targeting an internal rate of returns between 15-18%.
Its managing partner Kapil Singhal said domestic institutions, family offices, high-net-worth individuals and wealth partners have supported the fund. | Banking & Finance |
America celebrates "Small Business Saturday" today with special celebrations everywhere from Houston, Texas to Buffalo, New York
NBC News reports: Sandwiched between Black Friday and Cyber Monday — historically the biggest and busiest retail days of the year — there's another standout shopping event: Small Business Saturday. Started by American Express in 2010 and co-sponsored by the U.S. Small Business Administration since 2011, Small Business Saturday aims to create awareness about the impact shoppers have when they buy "small" year round, whether they physically visit stores or shop online.
This year, 85% of consumers say they're likely to shop "small" during the holiday season, according to the American Express 2023 Shop Small Impact Study. That represents a multibillion dollar opportunity — consumers are expected to spend an estimated $125 billion at small businesses this holiday season, up 42% from $88 billion in 2022, as reported by Intuit QuickBooks.
Like CBS News, NBC has compiled its list of small businesses that can ship their products to you — and suggests leaving positive reviews online for your favorite small businesses. ("Amazon, for example, now adds badges to product pages on its site if items are sold by small businesses.")
They also recommend interacting with your favorite small businesses on social media — while "the American Express small-business map allows you to input your zip code so it can recommend local shops in your area and beyond. Google also has a 'small business' filter on desktop and mobile, and one for Google Maps on mobile."
The UK's "Small Business Saturday" will happen next week, on the first Saturday in December.
NBC News reports: Sandwiched between Black Friday and Cyber Monday — historically the biggest and busiest retail days of the year — there's another standout shopping event: Small Business Saturday. Started by American Express in 2010 and co-sponsored by the U.S. Small Business Administration since 2011, Small Business Saturday aims to create awareness about the impact shoppers have when they buy "small" year round, whether they physically visit stores or shop online.
This year, 85% of consumers say they're likely to shop "small" during the holiday season, according to the American Express 2023 Shop Small Impact Study. That represents a multibillion dollar opportunity — consumers are expected to spend an estimated $125 billion at small businesses this holiday season, up 42% from $88 billion in 2022, as reported by Intuit QuickBooks.
Like CBS News, NBC has compiled its list of small businesses that can ship their products to you — and suggests leaving positive reviews online for your favorite small businesses. ("Amazon, for example, now adds badges to product pages on its site if items are sold by small businesses.")
They also recommend interacting with your favorite small businesses on social media — while "the American Express small-business map allows you to input your zip code so it can recommend local shops in your area and beyond. Google also has a 'small business' filter on desktop and mobile, and one for Google Maps on mobile."
The UK's "Small Business Saturday" will happen next week, on the first Saturday in December. | Consumer & Retail |
I know you must be very busy these days. You probably have a lot to do, like preparing food, visiting family and friends and shopping for gifts. Although it’s a fun and festive time of year, it can also be stressful.
And you know who loves to take advantage of that stress? Scammers. They are always looking for ways to trick you and steal your money or personal information.
They have some sneaky tricks up their sleeves, especially around the holidays. That’s why I want to warn you about five of the most common scams you might encounter during this season.
5 common money scams to watch out for
1. Package delivery scam
With the holiday season in full swing, the end-of-year sales have begun and you probably have already started your holiday shopping and are expecting packages coming via different types of delivery services like FedEx, UPS or USPS. So, if you receive a text that mentions a package delivery, you may be likely to easily fall for a scam.
I was expecting a package recently and received this text out of the blue:
Even though the text says the sender is not in my contact list and that it may be junk, I almost clicked the link because I was so focused on the fact that there may have been a typo in my delivery address. But once I looked a little closer, there were a few red flags in this text message that tipped me off to it being a scam.
- First — the link does not lead you to usps.com — it's a fake link that scammers hope you won't notice. Notice it is uspsts.top...and not usps.com. This is a common scam going around called typosquatting, where a scammer uses a domain that looks close to a real website. Next, the text says "pls" which is lingo you likely wouldn't see in correspondence from the USPS. Scammers often make typos or use poor grammar when communicating, so always double-check.
- Scammers are sending emails, texts and, even occasionally, there could be a phone call regarding an issue with package delivery. It may be something like this text I received that has a link where they'll end up asking for information, or you may be asked to pay a "shipping fee" to get your package.
- Be sure to always have good antivirus software running on your devices to prevent any disasters from happening if you were to click on a malicious link. See the best 2023 antivirus protection winners for your Windows, Mac, Android & iOS devices.
How to avoid package delivery scams
If you are expecting a package and you're wondering if you've received real information or not about it, the best way to check is to go to the original confirmation you received about shipping. You most likely received an email regarding your package, and if you go to that email to get your order number, you should be able to look up the status of your order directly on any website.
2. Charity scams
Sadly, charity scams aren't new, but they are way more prevalent during the holiday season since scammers are hoping you're feeling more generous during this time of year.
Sometimes scammers may create fake names of organizations to get you to donate money, or they may reach out to you via phone/email/text, posing as someone working for a legitimate charity. Social media has also become a popular place for charities to market themselves to reach more eyes in hopes of donations, so scammers may try and pose about fake charities.
These schemes will try and appeal to your emotions during this season, so be sure to double-check where you donate your money so you don't fall for a scam.
How to avoid charity scams
Never give your money to anyone immediately who approaches you or reaches out on behalf of any organization without doing your own independent research. Either do a little googling or check with a family member to see if it's real, and if it is, you should be able to donate on an official website or to an official address. You can always mention this to anyone who asks you to donate somewhere — don't fall into the pressure of donating right then and there.
Also, always double-check the name of an organization. Sometimes (especially online), scammers will alter the name of a known organization slightly to trick you into donating.
3. Social media gift exchange scam
The Better Business Bureau is warning about a gift exchange scam with a new twist, which has been occurring during recent holiday seasons. It's an online version of the popular "Secret Santa" gift exchange. However, the BBB says these social media-driven gift exchanges are actually pyramid schemes, and you will most likely be disappointed if you participate.
In the past few years, variations of the gift exchange have popped up, with someone asking you to select a random person and send them a gift to pay it forward. Another asks you to exchange bottles of wine with someone else, and while it seems fun and light-hearted, you don't know who is on the receiving end.
How to avoid social media gift exchange scams
It may sound nice to send a holiday gift to a stranger in turn for receiving multiple gifts yourself, but you're never going to receive many (if any) gifts at all. Don't participate in gift exchanges with anyone you don't know, or you won't be able to guarantee you'll actually be gifting someone who isn't a scammer.
4. Gift card scams
Gift card scams are another popular method that has been rising in popularity recently, but it's especially important to watch out for the possibilities since you may be purchasing gift cards for friends or family for the holidays.
Scammers often steal gift cards and use the information before they make it look like they didn't. They have a number of methods for tricking you using gift cards, so if you can send an online one (so that you can ensure you've purchased it on a legitimate, official website), that would be a much safer alternative.
How to avoid gift card scams
If you're getting anyone a gift card and buying it in person, be sure to check that the package hasn't been tampered with. Double-check that nothing on the packaging looks suspicious since scammers will try and make it seem like the package was sealed, but they will already have used the gift card so you're essentially buying a useless piece of plastic.
5. Fake online shopping sites scam
One of the most common scams during the holiday season is the fake online shopping site scam. Scammers create websites that look like legitimate online stores but are actually designed to steal your personal and financial information. They may offer products at very low prices or claim to have limited-time deals or exclusive items. They may also send you phishing emails or text messages with links to these fake sites.
Some signs of a fake online shopping site are:
- The website address does not match the name of the store or brand.
- The website has poor design, spelling and grammar errors.
- The website does not have a secure connection (https) or a padlock icon in the address bar.
- The website asks for too much personal information, such as your social security number or bank account details.
- The website does not have a clear return policy, contact information or customer reviews.
To avoid falling victim to this scam, you should:
- Shop only from trusted and reputable online stores that you know and have used before.
- Check the website address carefully and look for any red flags.
- Do some research on the online store before making a purchase. Read customer reviews, look for ratings or search for complaints online.
- Use a credit card or a secure payment service like PayPal when shopping online. Do not use debit cards, wire transfers or gift cards.
- Keep track of your online purchases and monitor your bank statements for any unauthorized charges.
Kurt's key takeaways
Scammers are always looking for new ways to take advantage of your generosity, trust and stress. But you can protect yourself and your loved ones by being vigilant, cautious and informed. Remember to always verify the source of any message, email or call that asks you for money or personal information. And if something sounds too good to be true, it probably is.
What are some of the most creative or unusual money scams you have ever heard of or encountered during the holiday season? Let us know by writing us at Cyberguy.com/Contact
For more of my tech tips & security alerts, subscribe to my free CyberGuy Report Newsletter by heading to Cyberguy.com/Newsletter
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Copyright 2023 CyberGuy.com. All rights reserved. | Consumer & Retail |
Everyone is looking for a way to slash their heating bills amid soaring energy prices and the deepening cost-of-living crisis.
Now, a British start-up has come up with a new way of doing so using a method that may seem a little bizarre to some — by fitting a computer server to a household's hot water tank.
Heata claims its shoebox-sized device could help Britons save around £150 a year on their energy bills, while small companies can also make use of the computer power available on the servers rather than them being in a large data centre.
As the computer gets hot, the tank takes waste heat away from it and uses this to warm water for showers, baths and washing up.
Each unit can deliver up to 4.8kWh of hot water per day, the company says — approximately 80 per cent of the hot water required in an average UK household.
As many people will know, laptops and computers can get very hot when running for long periods, with internal fans used to cool them down.
HOW DOES THE HEATA DEVICE WORK? Computer servers in large data centres across Britain require huge cooling systems to stop them overheating. The problem with this is that some 45 per cent of energy consumed in these centres goes towards the cooling. British start-up Heata has therefore come up with a new solution to avoid having to have these cooling systems, and instead make use of the waste heat computers produce. It offers to install processes in people's homes by attaching them to their water tanks. The tanks then take this waste heat and use it to heat water for showers and washing up. It doesn't cost a homeowner anything because Heata covers the cost of the electricity the servers require. The company makes its money by essentially letting out these computer servers to companies across the UK, such as architecture firms that need to do computer-intensive rendering. Heata insists that the data is protected. Currently, however, a homeowner's broadband has to be used to run the servers, but the firm is in talks with internet service providers to find a work around for this so it doesn't use up a person's monthly data allowance.
Now imagine a data centre filled with them.
There are 480 such hubs up and down Britain where some 45 per cent of energy consumed actually comes from cooling systems used to stop the vast numbers of servers overheating.
To get around this waste, Heata has found a way to take the heat from such computers and find a sustainable use for it.
Its server harnesses the heat from the processing and transfers it to the water tank, which in turn provides a household with free hot water.
The reason it is free is because Heata pays for the electricity to run the device, not the homeowner.
The electricity used by the unit is metered and homeowners are credited with the amount used at 10 per cent above the market rate, the company said.
Heata says an electrician can install its device in under two hours using a 'British Gas approved no plumbing process'.
The unit's power supply has an integrated meter so the company knows exactly how much electricity it is using.
The machines also use the home's broadband connection to send what Heata claims is relatively small amounts of data via a secure VPN.
But it said it was in talks with internet service providers to create connections solely for the use of the devices so they don't eat into users' monthly data allowances.
They are also fitted with alarms to notify the company if anyone tries to gain access to the internal components, while all data transmission is protected by 256-bit encryption to prevent unauthorised users from accessing it, Heata said.
The company's co-founder Chris Jordan said the firm already had customers lined up to use the computer power available on the 80 servers it is installing as part of its new trial.
These include architecture firms that need to do computer-intensive rendering of 3D animations, he added.
If Heata's vision is hugely successful, experts say there would be no reason to construct dedicated buildings to host hundreds of thousands of computers anymore.
The firm claims that by re-using heat and removing a cooling energy cost from data centres, it reduces the carbon footprint of the processing it undertakes by 40 per cent vs a typical data centre.
However, critics say that although the idea looks good on the surface, questions still remain as to whether the devices are worthwhile because it depends on how much heat they generate, the ease of installation and the impact on data security and home broadband connections. | Energy & Natural Resources |
Mr Hunt is also expected to announce business tax cuts as well as measures to boost business investment by £20billion in a year in a vow to “get Britain growing”.
This comes as the Institute of Fiscal Studies (IFS) says tax levels in the UK are at their highest point since records began 70 years ago.
It is not currently clear by how much the Chancellor intends to cut the level or thresholds of National Insurance, but a one percent reduction would cost the Government around £5billion and would be worth £380 a year to someone earning more than £50,000, according to The Times.
National Insurance, which contributes towards benefits, the state pension and the NHS, is a percentage of tax a person pays on their wages if they earn more than the current threshold of £12,570 a year. However, a cut in NI will make no difference to those earning anything below this annually, as they are not subject to the tax.
For employees who earn between £12,570 and £50,268, the current NI rate is 12 percent on earnings and two percent on profits above that.
In regard to business tax cuts, the Chancellor is expected to announce that the tax break known as "full expensing" will extend through 2028 to 2029. It was previously meant to expire in 2026. Some officials have described the move as one of “biggest business tax cuts in modern British history”.
The policy enables companies to deduct spending on investment from profits, which means they pay lower amounts of corporation tax.
However, Sian Steele, head of tax at Evelyn Partners noted that such "big-ticket" moves could mean more "targeted" moves like reducing inheritance tax might be "shunted to the sidings."
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Ms Steele said: “One effect of such a big-ticket move on direct taxation of income could be that more targeted moves like a reduction in inheritance tax for instance might be shunted into the sidings until the Spring Budget or the Conservatives’ election manifesto.
“To announce cuts to a wealth tax as well as income taxes would be something of a handbrake turn from the Chancellor, and – to mix metaphors - the hat is probably not big enough for such a large rabbit.
“Mr Hunt’s newly bullish emphasis on growth as well as inflation does suggest both households and businesses can expect some tangible tax reductions on Wednesday.”
The Chancellor will also be announcing a rise in the National Living Wage, granting all full-time workers a pay rise of over £1,800 a year. Eligibility will also be extended by reducing the age threshold to 21-year-olds for the first time.
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Mr Hunt is also planning a benefit crackdown to get hundreds of thousands of people with disabilities and mental health into employment. More people will need to find jobs or face tough sanctions, such as potential benefit cuts.
But mental health charity Mind says the new rules will push more people away from work as it has a devastating impact on their mental health.
In his statement, Mr Hunt is expected to say: "After a global pandemic and energy crisis, we have taken difficult decisions to put our economy back on track. We have supported families with rising bills, cut borrowing and halved inflation.
"The economy has grown. Real incomes have risen. Conservatives know that a dynamic economy depends less on the decisions and diktats of ministers than on the energy and enterprise of the British people.
"The Conservatives will reject big Government, high spending and high tax because we know that leads to less growth, not more."
The Autumn Statement will be announced around midday on Wednesday, November 22. | United Kingdom Business & Economics |
October 17, 2023
October 17, 2023
As the battle over IRS funding continues in Congress, new figures show the difference between what Americans paid and owed in taxes grew to $688 billion in 2021, a significant jump from previous estimates. This new data underscores that last year’s boost to IRS funding under the Inflation Reduction Act was absolutely necessary and should be protected by lawmakers.
The $688 billion figure is the gross tax gap – the difference between estimated taxes owed and the amount of tax that is paid on time. It covers three main areas: non-filing ($77 billion), underreporting ($542 billion), and underpayment ($68 billion). The IRS estimates that late payments and agency enforcement efforts will generate $63 billion for 2021, narrowing the net tax gap to about $625 billion.
If the federal government could close the tax gap entirely, in theory that could eliminate most of the government’s primary deficit, the spending aside from interest payments that exceeds federal revenue, projected to be around $800 billion to $900 billion a year over the coming decade. Of course, no tax system is enforced perfectly so some tax gap will always exist, but there is no justification for its current size.
The new IRS funding will start to close the tax gap, thus generating revenue not by raising taxes but by enforcing tax laws already on the books. Funding for customer service is essential to helping honest, law-abiding taxpayers file timely and accurately. And funding for enforcement is critical to cracking down on tax cheats, especially the wealthy and large businesses who the IRS has struggled to adequately audit due to budget cuts.
It’s worth noting that these tax gap measurements don’t fully account for a wide range of tax avoidance, including the abuse of offshore tax havens and non-payment involving digital assets and cryptocurrency. In other words, the real amount of taxes not being collected is likely higher – perhaps significantly so. (The former IRS commissioner suggested that the true tax gap is more like $1 trillion a year.)
About 85 percent of taxes are paid in full and on time. The IRS is left to track down the rest and sometimes prosecute tax evasion or avoidance, especially from wealthier households and corporations, who make up most of the unpaid taxes in the gap. Inflation Reduction Act funding will increase this voluntary compliance rate by improving taxpayer service and using new technological tools. That funding already helped this tax season, cutting down this year on telephone wait times and helping taxpayers get their refunds more quickly.
Deep and persistent IRS budget cuts during the 2010s coincided with the tax gap’s rapid growth. From 2010 to 2021, lawmakers cut the IRS budget by an inflation-adjusted 19 percent, leading to a staff reduction of 22 percent even as the agency had to process a 7 percent increase in tax returns filed. The cuts to tax enforcement during this time were particularly acute, with funding reduced by 22 percent and staffing falling by 31 percent. Over the same period, the tax gap grew by 45 percent, after accounting for inflation.
The Inflation Reduction Act reversed this disinvestment by infusing the agency with $80 billion in new funding over a decade. However, House Republicans put this funding in their crosshairs immediately upon taking control of the chamber in January, ultimately leading to an agreement to cut $21.4 billion in IRS funding as part of this spring’s debt limit deal.
But that cut was not enough for some lawmakers, who have continued to push for even deeper clawbacks of the new funding. House Republicans have moved to rescind nearly all the additional IRA funding, despite the Congressional Budget Office estimating this would increase deficits by $100 billion over the next decade. And Senator Rand Paul has put forward a proposal to rescind $25 billion in IRS funding; the CBO estimates that this would lead to $49 billion in lost revenue over 10 years and therefore increase the deficit by $24 billion. It’s critically important that policymakers rebuff these attempts so we can turn the tide and start to shrink the tax gap after decades of growth. | Banking & Finance |
By the time Louise Dunbar's children reach school age she will have spent more than £100,000 on nursery fees.
When paying the most recent bill, the nursery set her a full breakdown of the amount she had paid since 2017 - which currently stands at more than £73,000.
"We didn't realise how much it had been," she said. "I would rather have not known."
Seeing the full cost in black and white "was scary - imagine the holidays, excursions, and memories we could have made with that instead", she added.
With her son almost two years old and a year away from any free childcare help, she expects their childcare costs to rise to more than £100,000 before her daughter starts school.
The Dunbar family, from Reading, are far from alone. The average cost of a full-time nursery place is £14,000 per year outside of London and as high as £19,000 inside the capital.
The average cost of a part-time nursery place (25 hours per week) for a child under two is £140 a week. An average household spends just under £70 a week on food, so this means part-time care costs are double what families pay for their weekly shop.
After giving birth Louise faced the impossible choice of returning to work and finding childcare for her oldest or risk losing her business.
"It wasn't your conventional maternity leave, and I didn't have the luxury of being able to say, well I'll just take those years off," she said.
'There's a lot of wasted talent out there'
Three and four-year-olds in England attending a nursery or childminder are eligible for either 15 or 30 free hours a week depending on whether their parents work and there were suggestions the Treasury was considering expanding this to younger children.
But on Tuesday, children's minister Claire Coutinho said there are no plans by the government to extend the 30 free hours of childcare a week beyond what is currently in place.
In a written response to a question from Labour's Thangam Debbonaire about childcare support for postgraduate students, she instead outlined the existing support available.
A report last week from charity Pregnant Then Screwed warned the ever-increasing costs are driving families into debt or preventing them from having children altogether.
"There is a lot of wasted talent out there, and people who can't go back to work because it doesn't work out financially," Louise said.
And in both the upcoming Budget and General Election (now less than two years away) the cost of childcare crisis is expected to be a big talking point.
Read more:
'I'm taking on £15k debt to pay nursery fees'
Parents quit work as nursery fees rise by £1k
Glasgow childcare centres close
Some 96% of families with a child under three years old are more likely to vote for the party with the best childcare pledge and 98% of women using childcare think the government is not doing enough to support them, the survey found.
Despite the extortionate costs, Louise said this isn't being fed back to the people who care for her children: "It's a pittance compared to the love and support they give, and the importance of that role," she said.
"I don't think it's given enough value in society at all and that is definitely another thing that is not right." | Consumer & Retail |
Axis Bank - Positioned In The Right Quadrant: Nirmal Bang
Consistently navigated GPS strategy through various challenges.
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
Axis Bank Ltd. held its Analyst Day with the management represented by Managing Director and Chief Executive Officer, Amitabh Chaudhary along with other senior management.
Axis Bank remains upbeat about maintaining growth as well as net interest margin near current levels by focusing on risk-adjusted return on capital positive segments like small business banking, small and medium enterprise, Bharat Banking and other retail loans. After the success of NEO for MSMEs, the NEO platform for corporate clients is expected to be launched in H2 FY24.
Deposit mobilisation is likely to happen through a combination of physical as well as digital expansion in strategic locations, cross selling of liability products to select asset customers and marketing efforts. The attrition levels have improved lately and currently, it is more in the entry level segments. Post-acquisition of Citi’s consumer business, 97% of Citi employees has joined Axis Bank and the entire integration of operations is expected to be completed by H1 FY25.
In line with industry, the bank plans to hike rates in these unsecured retail loans and loans to non-banking financial company in order to counter the impact of rise in risk weights. Since its capital position is comfortable with CET-1 at 13.28%, it has no immediate need for raising fresh capital.
We expect the bank to report return on assets/return on equity of 1.9%/18.4% by FY25E, which will be led by 16.7% loan compound annual growth rate, stable net interest margin, improving cost ratios and lower credit cost.
We maintain our 'Buy' rating with a target price of Rs 1,181 valued at 1.9 times September 2025E adjusted book value).
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | India Business & Economics |
Discover more from Popular Information
UPDATE: The truth about Target
On September 26, Target announced it was closing nine stores "because theft and organized retail crime are…contributing to unsustainable business performance." Target said that before making the decision to shutter the stores, it had "invested heavily in strategies to prevent and stop theft and organized retail crime." But ultimately, Target claimed, those efforts failed to make those stores "successful."
Target did not provide any data that substantiated the claim that it closed the stores due to theft. Nevertheless, the press release generated a flood of credulous media coverage from virtually every major outlet, sometimes contextualizing Target's decision as part of a larger trend afflicting many retailers. "The big box chain is part of a wave of retailers – both large and small – that say they’re struggling to contain store crimes that have hurt their bottom lines," CNN reported. "Many have closed stores or made changes to merchandise and layouts."
On October 5, Popular Information analyzed publicly available crime data for the stores Target is closing in New York and San Francisco. This data revealed that stores that are being closed had lower levels of theft than nearby stores that have remained open. A report by the Seattle Times of the stores Target is shuttering in the Seattle area follows a similar pattern.
Over the last three weeks, the narrative around Target's store closures has shifted. William Blair is an investment bank that manages about $61 billion in client assets. On October 25, William Blair published a report entitled, "Higher Levels of Organized Theft and Retailer Opportunism Boost Shrink Narrative." The report acknowledges that levels of theft in 2022 were elevated, but rather than an alarming trend, it represented "shrink normalization coming out of the pandemic, when temporary closures and subsequent in-store shopping restrictions led to a more dramatic decrease in shrink." The report states that retailers are emphasizing the impact of theft "to draw attention away from margin headwinds in the form of higher promotions and weaker inventory management in recent quarters."
Further, William Blair states it "believe[s] some more recent permanent store closures enacted under the cover of shrink relate to underperformance of these locations." The report raises questions about Target's store closures specifically, citing Popular Information's analysis, and suggests the company has "ulterior, more opportunistic motives." Many of "the stores closed by Target are smaller format locations, a concept the company started rolling out more in 2018." The report notes that "after making a big push into smaller format, Target has not discussed the initiative since 2020." According to the report, Target may be blaming increases in theft to "mask other issues." Walmart, the report notes, closed four smaller stores in Chicago in April 2023 and "did not blame crime or theft and rather acknowledged strategies like downsizing it (sic) footprint…underperformed expectations."
The William Blair report generated coverage that was much more skeptical of retailers' claims. "Chains are using theft to mask other issues," CNN reported on October 27, citing William Blair and Popular Information.
The report also states that "part of the reason companies are being more vocal on shrink relative to the incremental impact has to do with trying to stimulate some sort of government action." That strategy appears to be working.
Senators push for new bill based on industry data; industry says data doesn’t exist
Earlier this year, Senators Catherine Cortez Masto (D-NV) and Chuck Grassley (R-IA) re-introduced a bill that attempts to crack down on organized retail theft. Known as the Combating Organized Retail Crime Act, the bill seeks to create an “Organized Retail Crime Coordination Center” under the Department of Homeland Security. The authors of the bill claim that “organized retail crime…has been a growing concern to retailers, industry, and law enforcement.” The center, the bill says, will oversee “federal law enforcement efforts related to organized retail crime” and align these activities with state and local investigations. Its director would be appointed by the head of ICE.
Now, as retail lobbying groups intensify the pressure on Congress, Cortez Masto and Grassley are making a renewed call for the Combating Organized Retail Crime Act alongside the National Retail Federation (NRF). In a press release published last week, the office of Cortez Masto asserted that “[o]rganized retail crime costs retailers $720,000 for every $1 billion in sales – up 50 percent since 2015.” But the press release fails to mention that this statistic is from three years ago. According to the NRF, a trade association that represents the largest retailers in the county, “organized retail crime cost retailers an average $719,548 per $1 billion in sales” in 2020. After 2020, the NRF stopped estimating the cost of organized retail crime.
If this number is accurate, it would mean that losses due to organized retail crime made up 0.07% of total retail sales in 2020. This constitutes a very small fraction of the total “shrink” — an industry term for inventory losses from external theft, employee theft, damage, and administrative errors. The NRF reported that in 2020, the average shrink rate was 1.6% of total sales. This means that for every $1 billion in sales, retailers lost at least $15 million in inventory for reasons not related to organized retail crime. That’s more than 20 times the loss attributed to organized retail crime.
The NRF’s most recent National Retail Security Survey, published in September 2023, reveals that internal issues like “employee theft” and “process, control failures, and errors” make up a majority of retailers’ shrink. In 2022, losses due to operational mistakes and errors, for example, made up 0.4% of total retail sales. This means that for every $1 billion in sales, retailers lost $4 million due to operational errors last year.
Still, the Cortez Masto press release claims that “organized retail of (sic) crime increased over 25% across the country last year.” The Senator’s office told Popular Information that it pulled this data point from the NRF’s 2022 Retail Security Survey. But Cortez Masto’s statement is wrong. The study found that “organized retail crime incidents increased by 26.5% on average” in 2021, not in 2022. And in 2021, the year of the supposed spike in organized retail crime, the total shrink in the retail industry, according to the NRF, was 1.4% — 0.2% lower than the previous year.
The 2021 increase was based on a survey of just 63 retailers. And whether a retailer had a significant organized retail theft problem appears dependent on whether they hired a team of people to track organized retail theft. "On average, respondents with an [organized retail crime] team reported 3.3 times the increase in [organized retail crime] incidents compared with those without an [organized retail crime] team," the NRF reported.
A spokesperson for the NRF told Popular Information that the group no longer provides estimates for the cost of organized retail crime to retailers. The group says it stopped attempting to quantify the problem because it believed the estimates were too low. "One of the reasons for moving away from reporting dollar figures is that the reported dollar value of [organized retail crime] probably represents the tip of the iceberg and may greatly understate the problem," the spokesperson said. The NRF claims "there is systematic under-reporting of [organized retail crime] activity across the industry." The spokesperson also emphasized that "an important part of the impact of [organized retail crime] is unrelated to the dollar loss," citing an alleged increase in violence. | Consumer & Retail |
The United States on Wednesday imposed sanctions on a virtual currency mixer the Treasury Department said has processed millions of dollars worth of cryptocurrency from major heists carried out by North Korea-linked hackers.
The U.S. Treasury Department in a statement said virtual currency mixer Sinbad, hit with sanctions on Wednesday, processed millions of dollars worth of virtual currency from heists carried out by the North Korea-linked Lazarus Group, including the Axie Infinity and Horizon Bride heists of hundreds of millions of dollars.
Lazarus, which has been sanctioned by the U.S., has been accused of carrying out some of the largest virtual currency heists to date. In March 2022, for example, they allegedly stole about $620 million in virtual currency from a blockchain project linked to the online game Axie Infinity.
"Mixing services that enable criminal actors, such as the Lazarus Group, to launder stolen assets will face serious consequences,” Deputy Treasury Secretary Wally Adeyemo said in the statement on Wednesday.
"The Treasury Department and its U.S. government partners stand ready to deploy all tools at their disposal to prevent virtual currency mixers, like Sinbad, from facilitating illicit activities."
A virtual currency mixer is a software tool that pools and scrambles cryptocurrencies from thousands of addresses.
Sinbad is believed by some experts in the industry to be a successor to the Blender mixer, which the U.S. hit with sanctions last year over accusations it was being used by North Korea.
The Treasury said Sinbad is also used by cybercriminals to obscure transactions linked to activities such as sanctions evasion, drug trafficking and the purchase of child sexual abuse materials, among other malign activities.
Wednesday's action freezes any U.S. assets of Sinbad and generally bars Americans from dealing with it. Those that engage in certain transactions with the mixer also risk being hit with sanctions. | Crypto Trading & Speculation |
In an open letter, 15 Swiss aid organisations and associations active in the Middle East have called on the Swiss government to resume aid payments to NGOs in Israel and the Palestinian territories.
The payments were suspended by the government at the end of October due to the massacres carried out by militant Islamist group Hamas in Israel.
According to the letter, which has been seen by the Swiss News Agency Keystone-SDA, the government has not provided a factual and comprehensible explanation for the suspension of payments.
In the letter, the aid organisations also call on the government to create complete transparency about the basis on which the decision to “suspend” the funding of 11 long-standing and audited partner organisations of the Swiss foreign ministry in Israel and the Palestinian territories was made.
The suspension would not only damage the reputation of the organisations concerned but would also send a negative signal to other donors, the statement continued. Furthermore, Switzerland would lose credit as a reliable partner in international cooperation.
The 15 signatories included AllianceSud, the Swiss-Palestinian Association, the Swiss Protestant Reformed Church Aid Organisation (HEKS) and the Swiss Platform for Peacebuilding (KOFF).
In addition, a petition with over 14,000 signatures was submitted on Wednesday, which also calls on the foreign ministry to resume financial support for long-standing partner organisations in Israel and the Palestinian territories.
How we work
This news story has been written and carefully fact-checked by an external editorial team. At SWI swissinfo.ch we select the most relevant news for an international audience and use automatic translation tools such as DeepL to translate it into English. Providing you with automatically translated news gives us the time to write more in-depth articles. You can find them hereExternal link.End of insertion
In compliance with the JTI standards | Nonprofit, Charities, & Fundraising |
Rishi Sunak has cancelled plans to hold a second round of Boris Johnson's £3.6bn towns fund in a move that could anger Tory MPs.
Sky News can reveal that the £300m set aside for a further competition will instead be transferred to the levelling up fund, which has been criticised for slow delivery.
The towns fund was first announced by Boris Johnson in July 2019 and initially supported the development of 100 locations, including former Labour heartlands that turned Conservative for the first time at the last general election.
The fund quickly attracted criticism of "pork barrel" politics after analyses found that the vast majority of places benefitting from the cash were held by Tory MPs.
In November 2020, MPs on the public accounts committee criticised the process by which some towns were selected for funding over others, branding it "opaque" and with "every appearance of having been politically motivated".
While the government never officially set out a timeline for a second round of the towns fund, statements made by Mr Johnson and the housing ministry - which was responsible for it at the time - suggested places that initially missed out would be given the opportunity to bid for more funding.
Nadine Dorries to 'prolong pain' for PM by resigning later - politics latest
A government spokesperson confirmed that the money set aside for a future towns fund had been rolled into the £4.8bn levelling up funds pot "as part of our commitment to streamlining and simplifying our funding programmes".
The development comes as Tory MPs grow increasingly frustrated with the pace of levelling up and the slow delivery of funding.
'There will be angry colleagues'
One Conservative MP who spoke to Sky News said the levelling up schemes were not "operating in the way they were envisioned" and blamed the civil service "blob" for the way cash was diverted.
"We all know that these pots were meant to flow to red wall seats, but haven't," they said.
"You saw in the budget efforts to create levelling up partnerships rather than levelling up funding, because once the blob gets involved the money ends up in posh seats rather than where people actually want it to go.
"It's perverse, and so I can see why the government would want to change the delivery models."
A former minister said the move was "reasonable" as long as a third round of the levelling up fund took place before the next election "to support communities that have put so much faith in us".
"What wouldn't be acceptable would be for a delay to mean the promised investment doesn't happen - which I can't believe is the intention."
Another Tory said the move was symptomatic of Mr Sunak not wanting to "make a decision".
"The government doesn't want to spend any money at all," they said.
Read more:
Rishi Sunak denies favouring the South with levelling up funding allocations
Levelling Up department must ask Treasury to sign off on big projects, minister confirms
"Kicking and kicking it back probably helps the government, but it's a strange old strategy.
"I just don't see how the government properly functions at this rate. Normally they used to say that you build up your enemies at reshuffles, but they seem to be building up enemies whichever way they turn.
"I imagine there will be angry colleagues."
The government announced in the March budget that it would inject a further £1bn for a third round of the levelling up fund but a timetable for delivery has yet to be set out.
During a recent debate, Mr Johnson challenged Levelling Up Secretary Michael Gove to "accelerate" the pace of the "now-stalled" Levelling Up Bill, a cornerstone of the party's 2019 election win which is currently tied up in the House of Lords.
His calls were echoed by a handful of East Midlands Tory MPs, who wrote to Mr Sunak last month urging him to fast-track the Levelling Up Bill - or risk losing the next general election.
"If the government fails to pass this law… urgently, before the summer… our opportunity to seize this chance and deliver tangible, real-world benefits to our constituents ahead of the next general election will be lost," they wrote.
Lisa Nandy, Labour's shadow levelling up secretary, said: "This is yet another broken promise from this government to our poorest communities.
"A couple of months ago we found out that just 8% of the levelling up fund has been spent two-and-a-half years after it was announced, and now we learn that ministers have quietly shifted the goalposts on the towns fund.
"This sums up the problem with the Conservatives' Hunger Games-style bidding system, where local leaders have to go cap-in-hand to Whitehall.
"It leaves communities reliant on a begging bowl in Westminster and helpless when ministers renege on their promises."
A government spokesperson said: "Levelling up remains a long-term programme of reform that is breathing life into overlooked communities.
"As part of our commitment to streamlining and simplifying our funding programmes, the £300m investment that was set aside for a future round of town deals is now being delivered by the levelling up fund.
"All places have had the opportunity to apply for funding for levelling up projects, with almost £10bn allocated to support around 1,000 projects since 2019." | United Kingdom Business & Economics |
Alt-Coin-Delete: Wall Street Moves In
The US regulatory crackdown on crypto may create room for a different kind of token, something that banks can easily provide.
(Bloomberg Opinion) -- The entire business model of cryptocurrencies is at risk of falling apart, and Wall Street firms couldn’t be any happier.
Now that the US Securities and Exchange Commission has decided to regulate a range of widely traded digital coins as securities, and sued two of their largest trading venues for peddling them without first registering the tokens with the authority, there is a good chance that blockchain leadership may finally pass over to regulated banks.
From the perspective of financial stability, a change of guard will be welcome. Crypto exchanges burst through a gap left unplugged by Satoshi Nakamoto. In his 2008 white paper, the pseudonymous founder of the Bitcoin network didn’t suggest an obvious way for people to swap their dollars and euros for decentralized currencies. Digital-asset bourses, which allowed people to do that and more, morphed into shadow banks, offering traders leverage of up to 125 times on their investment, while being sparsely regulated all along.
If crises of liquidity and solvency in the crypto industry haven’t yet threatened mainstream finance, that’s only because of their limited linkages. It’s only a matter of time, however, before the two get more closely intertwined. Some of that commingling may well happen outside the US. Even as the SEC was tightening the screws, a Hong Kong lawmaker took to Twitter to invite virtual-asset trading operators to come to the city, which pushed ahead with a new regulatory regime on June 1. Hong Kong’s crypto-hub ambitions have Beijing’s quiet backing.
Ultimately, though, the thinking in Washington will prevail, as no financial center of repute will want to risk its stability for the sake of additional business. And the regulatory mood in the US is pretty clear. While Ripple Labs Inc. and its top executives were accused by the SEC in late 2020 of selling XRP tokens without registering them, it was Sam Bankman-Fried’s FTX, the most spectacular of last year’s crypto debacles, that made a major crackdown inevitable. It arrived this month with the SEC suing Binance Holdings Ltd. and Coinbase Global Inc.
Following the lawsuits, banks are withdrawing support from Binance’s US site, whose customers will no longer be able to bring in or take out dollars. Binance.US, which has described the SEC’s civil action as unjustified and vowed to fight it, will transition to a crypto-only exchange.
Meanwhile, Coinbase, which has denied the SEC’s allegations that it has acted as an exchange, broker-dealer and clearinghouse — all without registering with the agency for any of those roles — is under pressure from state regulators who’re demanding that the biggest US crypto exchange halt its staking program. Staking is a service that channels capital for decentralized finance, or DeFi, projects, by giving investors a passive income for locking their crypto assets via self-executing software known as smart contracts.
The overall message from authorities is this: Investors should be gradually pushed out of the unregulated corners of the cryptocurrency world without depriving them of the efficiencies of decentralized ledgers, smart contracts or some other vaunted innovation. Let the average retail customer of a bank put a portion of her deposits on the blockchain. As long as a well-regulated depository institution channels those savings, there will be no reason to worry about additional systemic risk. Returns for investors will come not from excessive leverage but fractionalization. Investing opportunities typically reserved for wealthy private-banking clients will become available to mass-market customers.
This fits well with the Bank for International Settlements’ vision of a unified ledger. Central-bank digital currencies will sit in one part of the ledger, while bank-deposit coins will be housed in another. Behind another partition will lie all the real-world assets one could buy — stocks, bonds, apartments, toll roads — in tokenized forms. The whole thing will be analogous to a smartphone, where all applications use the same programming environment. Just as a picture taken by the phone’s camera has no problem being read by a social-media app, money would move seamlessly between compartments of the unified ledger, and go into all kinds of utilities dreamed up by the private sector.
Mainstream finance, supervised by national monetary authorities, has long viewed the crypto industry as fundamentally unstable and socially useless. Unregulated exchanges, stablecoins resembling money-market funds and speculative altcoins (stuff other than Bitcoin and Ether) have undoubtedly pioneered many blockchain applications. Going forward, licensed financial institutions like JPMorgan Chase & Co. may as well take control of the technology. After all, tokenized customer deposits will offer all the functionalities of programmable money. So why not promote them in smart contracts, as an alternative to stablecoins like Circle Internet Financial Ltd.’s USDC?
Authorities can at times lose control of depositary institutions, as we saw with the multiple US bank failures this year. Still, the risks are largely known, which isn’t the case with digital assets. Now that the US regulators are determined to check the unbridled growth of crypto, Wall Street can move in with tokenized versions of its own traditional products — starting with the humble bank deposit.
More from Bloomberg Opinion:
- Maybe Coinbase Should Never Have Gone Public: Lionel Laurent
- Matt Levine’s Money Stuff: When Is a Token Not a Security?
- Could Coinbase and Binance Ever Be Legal Exchanges?: Editorial
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.
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
Welcome back to Chain Reaction.
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The crypto market and overall ecosystem may be showing signs of recovery after a prolonged bear market.
At the time of publication, cryptocurrencies like bitcoin and ethereum were up 30% and 28% from the month-ago date, respectively, according to CoinMarketCap data. Separately, the total crypto market capitalization is up about 31% to $1.41 trillion during the same period.
Even the NFT space, which took a tumble after its latest hype cycle in 2021 and 2022, has seen total sales increase 64% in the past 30 days, according to CryptoSlam data. The top three blockchains by NFT sales volume were Ethereum, Bitcoin and Solana, and all of them saw sales increase (44%, 1,222% and 56%, respectively) in that time frame.
Separately, the crypto venture capital landscape is heating back up after six consecutive quarters of declines of investments into web3 companies. The bullish take comes at a time when a lengthy market downturn has persisted, chilling consumer, founder and investor interest in the crypto industry.
More below.
This week in web3
- After six quarters of falling venture interest, crypto investors see recent price gains as positive signal (TC+)
- Aave Companies rebrands to Avara and acquires crypto wallet Family to expand its web3 reach
- Prosecutors will likely proceed with SBF’s second trial in March (TC+)
The latest pod
The company is probably best known for Aave protocol, its platform-focused stablecoin GHO and its social network protocol Lens.
The web3-focused software technology company announced exclusively on our podcast their rebranding as well as a strategic acquisition of an Ethereum-based crypto wallet. The name Aave will still exist, but through Aave Protocol and Aave Labs, two organizations under Avara’s umbrella brand.
We discussed the rebrand, acquisition, changes to projects under the Avara umbrella and content creator monetization on decentralized social media platforms and what it can look like.
We also talked about:
- Lens transitioning out of beta phase
- Decentralized versus mainstream social media
- The future of social networks
- What’s next for Avara
Follow the money
- Taproot Wizards raised $7.5 million (TC+) for its Ordinals project to bring the “magic” back to Bitcoin
- Baton, a music collaboration platform for unreleased material, raised $4.2 million
- Asset management firm Superstate closed $14 million in Series A financing
- Web3 social network Sleek raised $5 million in a seed round
- Beoble raised $2 million in a pre-seed round to grow web3 social experiences
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
What else we’re writing
Want to branch out from the world of web3? Here are some articles on TechCrunch that caught our attention this week.
- Feds want speed reduction tech in every new car. Are American drivers ready?
- The bull case for software growth in 2024 (TC+)
- The time to triage is over (TC+)
- How Inversion Art is trying to become the Y Combinator of the arts world (TC+)
- AI makes you worse at what you’re good at
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more. | Crypto Trading & Speculation |
- The founders of struggling space company Astra have offered to take the company private at a value of about $30 million, according to a securities filing on Thursday.
- Chris Kemp, chairman and CEO, and Adam London, chief technology officer, delivered a proposal to the Astra board of directors on Wednesday to acquire all the company's outstanding stock at $1.50 a share.
- Astra's rocket launching business has been on hiatus since a June 2022 mission failure, and the company is running out of cash.
The founders of struggling space company Astra have offered to take the company private at a value of about $30 million, according to a securities filing on Thursday.
Chris Kemp, chairman and CEO, and Adam London, chief technology officer, delivered a proposal to the Astra board of directors on Wednesday to acquire all the company's outstanding stock at $1.50 a share.
That price is a 103% premium to Wednesday's closing price at 74 cents a share, which represents a market value of about $16 million.
Astra's rocket launching business has been on hiatus since a June 2022 mission failure. The company is running out of cash, with its acquired spacecraft propulsion business yet to drive meaningful quarterly revenue. Astra cut 25% of its workforce in early August to shift focus from its rocket development to its spacecraft engine production.
Last month, Astra's cash reserve slipped below $10.5 million and it defaulted on a debt raise, it disclosed on Friday. The company then on Monday raised financing from a pair of investors to pay off that outstanding debt.
Astra went public via a SPAC merger at a $2.6 billion valuation in February 2021. The company aimed to cheaply and rapidly produce small rockets. While Astra reached orbit twice successfully, the company suffered three launch failures after going public. | Stocks Trading & Speculation |
- Walmart is pushing into in-store advertising to capitalize on its huge reach and chase growth in higher-margin businesses.
- Walmart shoppers will soon see more third-party ads on screens in self-checkout lanes and TV aisles; hear spots over the store's radio; and be able to sample items at demo stations.
- Retailers have a unique opportunity to offer targeted ads, but have to be careful not to irritate or overwhelm shoppers.
One of Walmart's latest offerings at its SuperCenters isn't a hot new toy, snack flavor or sundress. It's advertising.
Shoppers will soon see more third-party ads on screens in Walmart self-checkout lanes and TV aisles; hear spots over the store's radio; and be able to sample items at demo stations.
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Walmart's push into advertising resembles similar moves by retailers like Kroger, which struck a deal to bring digital smart screens to cooler aisles in hundreds of its stores, and Target, which began testing in-store demos and giveaways, including a recent "Barbie" branded event with Mattel that took place at about 200 stores.
For Walmart, selling ad space to its wealth of existing partners is another way to capitalize on the company's huge reach and to expand into higher-margin businesses. The discounter has nearly 4,700 stores across the U.S., with roughly 90% of Americans living within 10 miles of a Walmart store.
In the U.S., about 139 million customers visit Walmart stores and its website or app each week.
"When you think about our store, our store footprint and the the percentage of Americans that we reach through our stores, we can deliver Super Bowl-sized audiences every week," said Ryan Mayward, senior vice president of retail media sales for Walmart Connect, the retailer's advertising business.
The company plans to ramp up in-store ads using its approximately 170,000 digital screens across its locations as well as 30-second radio spots that will be available to suppliers later this year and can target a specific store or region.
And it's hoping at least one of the new advertising initiatives will be easy to digest: Free samples in stores on the weekends.
Walmart plans to sell the sampling stations to advertisers and bundle them with other ad formats that can run at the same time to make for a fuller campaign. QR codes at the demo tables will pull up online shopping options, meal ideas or seasonal information.
It tried out the new in-house approach of selling sampling stations in Dallas-Fort Worth and plans to offer the option in over 1,000 stores across the country by end of January.
Advertising still drives a small sliver of Walmart's overall revenue. Its global advertising business hit $2.7 billion in the most recent fiscal year, which ended in late January. That's less than 1% of Walmart's total annual revenue.
Yet it is becoming a more meaningful growth engine for Walmart. CEO Doug McMillon said earlier this year that he expects company profits to grow faster than sales over the next five years, driven in part by higher-margin businesses, including advertising.
In the most recent fiscal year, Walmart's global ads business grew nearly 30% and its U.S. ads business, Walmart Connect, rose about 40%. That's a sharper gain than the approximately 7% increase in Walmart's total revenue and Walmart U.S. net sales during the period.
As Walmart and other retailers grow their ad businesses, the store stands as the next frontier. Target, Kroger and others have pushed aggressively into retail media, a buzzy term used to describe marketing to shoppers based on customer data.
That side hustle has become a more substantial revenue stream for retailers, especially as brands look for new ways to reach big audiences. Retail media is on track to be a $45 billion industry this year, up 20% from the prior year, according to Insider Intelligence. The market researcher expects that growth to accelerate in the coming years and reach about $106 billion in 2027.
Yet up until recently, retailers, including Walmart, have largely focused on selling online ads and steered clear of adding digital signs or flashier ads to the places that draw higher traffic and drive the vast majority of sales: Their own stores.
Walmart's Mayward said the retailer has added advertising to stores "in a very deliberate and cautious way" after learning how shoppers respond to online ads.
When done right, he said ads can enhance the experience for shoppers and lift sales. For example, he said, a customer may spring for a sound bar after learning about the product on the TV wall when walking through the electronics department. They may decide to buy a jar of salsa after seeing a video of it near the aisle of their favorite bag of chips.
"It's a complimentary advertising moment," he said. "It's helping you make connections between two different products and decide that you maybe need that second thing."
According to Mark Boidman, head of media at New York City-based investment bank Solomon Partners, that proximity offers a unique opportunity that online advertising can't replicate.
"It's better to reach people with video when you're aisles apart as opposed to miles apart," Boidman said.
He noted it's gotten harder for brands to get in front of large audiences as customers increasingly fracture into smaller groups that watch different TV shows, subscribe to different streaming services or tune in to different broadcast channels.
Plus, he added, they want to more closely track if marketing dollars lead to sales. Grocers and big-box retailers have valuable first-party data that can better measure that, since they can advertise a product and then use a loyalty program or sales patterns to see if it became more popular.
But that additional data can be a double-edged sword. He said companies must respect shoppers' privacy concerns, too. If an advertisement is too targeted to an individual, they may feel creeped out.
With the debut of more in-store ads, retailers risk those privacy concerns as well as backlash from shoppers who may see the ads as unsightly or irritating.
That's already played out at Walgreens: The drugstore added digital smart screens that flashed ads on fridge doors in many of its U.S. stores. Some shoppers complained on TikTok and Twitter that the doors made it hard to find ice cream, pizza or other frozen and chilled items they wanted.
Walgreens CEO Roz Brewer, who stepped into her role after the deal got signed, didn't like them either, according to a lawsuit filed last month by Cooler Screens, the company behind the tech. It alleges Walgreens was in breach of contract after breaking off an installation agreement.
The drugstore chain had agreed to install the screens in at least 2,500 stores across the U.S., according to the lawsuit, but Brewer squashed the rollout after visiting the stores and comparing the screens "to 'Vegas' in a derogatory way."
Walgreens disputed Cooler Screens' claims and said it terminated its contract with the firm based on its "failure to perform."
In an interview with CNBC, Cooler Screens co-founder and CEO Arsen Avakian acknowledged that bringing ads into physical stores is tricky. But he said stores need a more modern look that allows shoppers to search, sort and discover merchandise like they do online and in apps.
Kroger plans to install Cooler Screens in 100 stores by end of year and reach 500 by next year. Walmart piloted Cooler Screens technology, but ultimately decided not to expand it.
Andrew Lipsman, a retail and e-commerce analyst for Insider Intelligence, said retailers have to tread lightly to avoid creating the real-world equivalent of pop-up ads.
"There's a concern of it looking too much like Times Square," said Lipsman, who previously worked for Cooler Screens and has closely followed retail media.
As retailers expand ads into stores, they can start with lower-risk spots like pharmacy or deli counters where customers may welcome a distraction as they wait, he said, adding that stores have plenty of subtle ads already. Brands pay for prominent spots at the end of aisles or for signs that spread the word about a seasonal snack, discount or new product.
And people have gotten used to seeing digital ads in other parts of the physical world, such as around the perimeter of major sports arenas.
"There's digital signage everywhere," Lipsman said. "It's become pervasive across many contexts. It's natural it's going to enter the store."
Disclosure: CNBC's parent company, NBCUniversal, is a media partner of Walmart Connect. | Consumer & Retail |
Rs 2,000 Note Exchange Deadline Ends On September 30: All You Need To Know
As this crucial deadline approaches, it is imperative for the public to understand the implications and take action promptly.
The deadline for depositing/exchanging Rs 2,000 currency notes is just 2 days away.
The RBI had announced the withdrawal of Rs 2,000 banknotes from circulation on May 19, 2023 and requested the members of the public holding the high-value banknote to utilise the remaining period until September 30, 2023, to deposit and/or exchange them.
As this crucial deadline approaches, it is imperative for the public to understand the implications and take action promptly.
Here's What Do To
Individuals who still have the notes can do any of the following two things:
Deposit the notes: Individuals can head to their nearest bank branch to deposit their Rs 2000 notes into their bank account.
Exchange for other denominations: Alternatively, they can exchange these notes for different currency denominations at any bank branch in the country.
Procedure For Exchanging Rs 2000 Notes
To exchange Rs 2000 currency notes, one must follow these steps:
Visit a nearby bank branch: Locate the nearest bank branch.
Requisition slip: Obtain a requisition slip, available at all bank branches.
Identification Proof: It is advisable to carry proper identification proof to ensure smooth transaction. .
Submit the notes: Present the Rs 2000 notes along with the requisition slip and identification proof (if asked).
Receive exchanged notes: Once the process is completed, the individual will receive the exchanged notes.
Earlier this month, the Reserve Bank of India said that as much as 93% of Rs 2,000 currency notes that were in circulation on May 19 -- the day when the currency was withdrawn from circulation -- have been returned to banks.
According to the data received from the banks, the total value of Rs 2,000 banknotes received back from circulation is Rs 3.32 lakh crore up to Aug. 31, 2023, RBI said in a statement.
"Consequently, Rs 2,000 banknotes in circulation as at the close of business on August 31, 2023 stood at Rs 0.24 lakh crore. Thus, 93% of the Rs 2000 banknotes in circulation as on May 19, 2023, have since been returned," it said.
Read what will happen if you miss the September 30 deadline:
Bank Holiday In Maharashtra
Government securities, foreign exchange, money and rupee interest rate derivatives markets will remain open on Thursday and Friday, according to the Reserve Bank of India.
The Maharashtra government has declared September 29 as a public holiday under Section 25 of the Negotiable Instruments Act, 1881. The public holiday on September 28, 2023 declared earlier has been cancelled.
To know more click here.
(With PTI inputs) | India Business & Economics |
Rebel Tories refuse to back any autumn statement with tax rises
A group of senior Tory MPs, including Liz Truss, has vowed not to vote for the chancellor’s autumn statement if it contains tax rises.
The 33 Conservatives have signed a pledge vowing not to “vote for or support any new taxes that increase the overall tax burden”, putting pressure on the prime minister on the eve of Conservative Party conference.
Writing in The Times, Sir Jake Berry, a former party chairman, said the government “cannot tax the economy back to health” and called on Conservative associations and Tory candidates across the country to also block tax rises.
He said: “There comes a time where we must make our position very clear that with taxes at a 75-year high — the highest since the Second World War — taxes cannot continue to go up.
“We have decided to send a clear signal to our constituents that we will not vote for any further tax rises. We want to see growth in the economy and allow people to spend their money as they wish rather than the government deciding it knows best.”
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He also raised questions about the rate of corporation tax, now at 25 per cent, and said more MPs were expected to sign the pledge, threatening the government’s majority in the House of Commons.
Truss, who is among the signatories, posted on Twitter/X: “This unprecedentedly high tax burden is one of the reasons our economy is stagnating and why we need to cut taxes to help make Britain grow again. We should always seek to reduce the tax burden, especially when there’s so much pressure on family budgets.”
Truss, the former prime minister, is expected to attend a rally at the party conference next week where she will push the government to do more to grow the economy.
The intervention is the latest in a series of rows within the party over taxation, with MPs claiming Rishi Sunak and Jeremy Hunt, the chancellor, have failed to deliver on promises to cut taxes.
The Institute for Fiscal Studies has said that the UK has the highest taxes since records began and taxes are unlikely to fall any time soon.
The pledge has gathered support across the Tory party, including among the former cabinet ministers Sir Brandon Lewis, Sir Jacob Rees-Mogg and Dame Priti Patel alongside Brendan Clarke-Smith, chairman of the Blue Collar Conservatives, John Stevenson, chairman of the Northern Research Group, Greg Smith, chairman of Conservative Way Forward, and Danny Kruger, chairman of the New Conservatives.
A senior Conservative source said that the pledge marked the start of a public battle that could block support for the chancellor’s autumn statement if the overall tax burden is increased.
Patel, the former home secretary, said: “Households and businesses face the highest tax burden in 70 years. State spending is now nearly £1.2 trillion, with over £1 trillion being raised in taxes. This level of spending, borrowing and taxation is unsustainable.
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“The British people need a tax break — we need to trust people and businesses to keep more of what they earn and spend their money to support themselves and economic growth.”
Sir Jake Berry will join Kate McCann and Adam Boulton on Sunday morning from 10am on Times Radio.
‘Throwing money at problems is not the answer’
Today 30-plus Conservative MPs have pledged to never vote for tax rises again. For far too long, ever higher taxes has been the accepted political doctrine in the United Kingdom. No problem too big or too small where tax rises weren’t the answer.
During the Thatcher years, wealth creation was spread around the country, the dream of homeownership realised for millions, and the belief in the autonomy of the individual at the heart of government.
This all happened because the prime minister believed in the true Conservative principles of low taxes and an understanding that no money is government money, but taxpayers’ money. The New Labour years were the turning point in British society in many ways, and many of the problems in today’s society stem from these governments.
One example of this is a bloated state and ever increasing taxes. Throwing money at problems became the norm and, by extension, tax rises needed to fund it.
During the coalition, George Osborne tried to make a change by decreasing corporation tax and with that tax intake was increasing — a fact unsurprising to anyone on the Conservative side of the aisle. And even though this was proven successful, we now have corporation tax at 25 per cent.
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It’s not just the UK. In 2021 the OECD’s global tax agreement was introduced, decreeing that all member countries must tax large companies at least 15 per cent. Again, this shift away from tax competition can ultimately bring taxes down and we find ourselves forcing countries, such as Ireland, to increase corporation tax.
On Friday the Institute for Fiscal Studies announced that the tax burden will have increased by 4 per cent by the end of this parliament. We all understand the pressures from the pandemic, and it was a hugely difficult time to find the balance between support and value for money.
However, I also believe that there comes a time where we must make our position very clear that with taxes at a 75-year high — the highest since the Second World War — taxes cannot continue to go up. This is why, as a group of Conservative MPs, we have decided to send a clear signal to our constituents that we will not vote for any further tax rises. We want to see growth in the economy and allow people to spend their money as they wish rather than the government deciding it knows best.
As a group of 30-plus members of parliament who have pledged to our constituents that we will not support any increases in taxes, we want to see more signatures.
We will invite colleagues in the House, and in the devolved parliaments, to sign this pledge. We also welcome any member of any other political party to sign the pledge. This is not about party politics but a vision where a growing economy stimulated by low taxes can deliver world-class public services.
Further to this, we also would like to see associations ask prospective parliamentary candidates to sign the pledge to ensure that the Conservative ideals around low tax continue.
We want to look at politics in a new way. We believe in a more prosperous future, a future where you cannot tax the economy back to health. | United Kingdom Business & Economics |
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