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When Patrica Roman lost her job as a cleaner, her life turned upside down.
She and her three children – aged 5, 9 and 15 – were evicted from their home in Lambeth, central London, last autumn, and faced the prospect of sleeping on the streets, had the local authority not intervened and placed them in emergency housing.
On top of this first crisis, another was soon piled on.
The family was housed in a freezing, cramped flat, nearly 60km away from their community and support network.
Now, during important exams, her eldest son must commute five hours a day across central London to go to school – often falling asleep in class he’s so tired from the 5:00am start – while Patrica has struggled to find a job in an unfamiliar area.
“It's caused stress, insomnia and anxiety,” she told Euronews, desparing at the situation.
‘Anyone can become homeless’
Patrica and her family are not alone.
According to the UK government, some 95,000 households were considered homeless and needed temporary accommodation at the end of June 2022, of which more than half were in London.
This included 121,000 children in England alone.
Under British law, if a family or vulnerable adult is made homeless then their local authority is legally obligated to put them in temporary accommodation.
Temporary accommodation comes in many forms. Yet people are most often packed into poor quality, unsuitable housing, such as emergency hostels, B&Bs, one-room bedsits and shipping containers.
“This accommodation is at the very worst end,” Liz Wyatt of the campaign group Housing Action Southwark and Lambeth told Euronews. “They are often dilapidated, overcrowded and in a very poor state.”
“Its really dangerous, shoddy, depressing, tiny, rabbit hutch living conditions,” she added.
At least 34 homeless children have died unexpectedly in temporary housing since 2019, according to a study by University College London (UCL).
One particular issue is damp and mould inside homes, which is linked to several health problems in children.
Speaking to the i newspaper, Professor Monica Lakhanpaul said: “Children are at risk of breathing problems such as respiratory infections and asthma, as well as diarrhoea and skin problems because of the conditions they are in – mould, overcrowding, poor ventilation and pollution.”
‘Forever accommodation’
As its name suggests, temporary accommodation is not designed to be lived in permanently and families can be asked to move numerous times a short notice.
At the mercy of the local authority, Wyatt says families face “constant insecurity” that is "highly disruptive", pointing to cases of children moving schools four times.
Studies show that moving schools can have a devastating impact on kids, badly impacting their achievement and ability to form social and neighbourhood relationships.
“There’s unimaginable suffering," Wyatt told Euronews. "Temporary accommodation is really, really harmful both for mental and physical health."
"Children suffer anxiety, stress and depression because they're always worried that they're going to have to move home at a moments notice and change school.”
She continued: “The crisis in temporary accommodation at this very movement is reaching devastating new heights.”
“The level of suffering is something we have never seen before.”
In January 2022, Human Rights Watch blasted the UK government, claiming “substandard and uninhabitable” temporary accommodation was violating children’s rights.
“Every child deserves a stable and decent home as a foundation to succeed in education,” it said in a statement, highlighting that much temporary accommodation lacks quiet spaces for children to study or a wifi-connection.
The number of families in temporary accommodation inched down 1% in June 2022, compared to the previous year, according to government figures. This follows year-on-year increased since 2011 - one year after the Conservative-Liberal Democratic collation took over.
Over the last decade, Wyatt told Euronews the term temporary had lost its “real meaning”, with families and vulnerable adults trapped in terrible housing for years, even decades.
And this harm does not fall evenly.
Migrant families and people of colour often experience the “worst treatment” by local authorities because they do not know their rights or have trouble enforcing them as English is not their first language, she said.
‘The bitter end of the housing crisis’
A toxic cocktail of crises are to blame for the temporary accommodation epidemic.
Property prices – especially in the capital – have soared in recent decades, while the Conservative government has slashed local authorities' budgets.
Stagnating wages and austerity-driven benefit cuts have also pushed more people than ever into homelessness.
For Wyatt, a “desperate shortage of council housing” was turbo-charging the crisis, hamstringing local authorities’ ability to house people and forcing them to use their limited budgets on unaffordable private homes.
In the 1980s, former Prime Minister Margaret Thatcher sold off huge swathes of social housing in a highly controversial scheme called right to buy.
Critics say the policy fuelled a housing crisis, forced millions of mostly younger people into grotty, overpriced accommodation; defenders say it fostered self-reliance, independence and a ‘property-owning’ democracy.
Since then, successive governments have been criticised for not building enough council homes and replacing lost stock.
In 1979, there were 6.5m council homes. Today, there are 2.2m, while 4.4m households rent privately, twice as many as 15 years ago.
“The housing crisis is a political choice”, said Wyatt. “It is possible to make sure everyone has a safe and secure home, if the government wants to.”
“Anybody could find themselves homeless.” | United Kingdom Business & Economics |
Taxpayers are funding luxury housing accommodations for Rep. Alexandria Ocasio-Cortez (D., N.Y.) and over 200 other members of Congress, many of whom boast net worths over $1 million.
As one of their last actions with their majority, Democrats quietly tucked a provision into internal House rules that grants lawmakers access to an optional $34,000 annual subsidy to pay for their Washington, D.C., housing and meal expenses. Taxpayers have doled out over $8,700 to pay for the democratic socialist's lodging and meals throughout the first half of 2023, records show.
In total, 113 Democrats and 104 Republicans have taken advantage of the program, raking in a combined $1.4 million from taxpayers during the first half of 2023, House disbursement records reviewed by the Washington Free Beacon show. Recipients of these funds include at least 17 millionaire Democrats, including Rep. Katie Porter, who reported a net worth of up to $1.8 million in her latest financial disclosure, and House Minority Whip Katherine Clark (D., Mass.), who boasts a net worth of up to $13.5 million.
House Democrats passed the housing subsidy in response to criticism from younger members including Ocasio-Cortez, who have long complained that their $174,000 salary is insufficient to maintain a home in their districts and pay for skyrocketing rent in the nation’s capital. Since taking office in 2019, Ocasio-Cortez has rented an apartment in a luxury Washington, D.C., building that boasts amenities including a rooftop pool and indoor golf simulator.
Ocasio-Cortez’s fellow members of the "Squad," six of whom voted against a House resolution last week condemning Hamas’s terrorist rampage in Israel, can also thank taxpayers for financing their Washington, D.C., living expenses. Rep. Ilhan Omar (D., Minn.) has billed taxpayers over $14,000 for lodging and meals during the first half of 2023. Rep. Rashida Tlaib (D., Mich.) has received $6,800 from taxpayers to pay for her lodging and meals.
And "Squad" member Rep. Jamaal Bowman (D., N.Y.), who was ordered last week to pay a $1,000 fine for intentionally pulling a fire alarm in a House office building in September, has received $6,200 to pay for his rent and meals. Bowman reported in his latest financial disclosure that his wife owns a pension valued at over $50 million, though his office told the Free Beacon in September that the asset is worth just $50,000. The filing has yet to be amended.
As taxpayers finance the living expenses for wealthy lawmakers, a record number of Americans are struggling to pay their own rent. A Harvard study in July found that a record 21.6 million households are spending more than 30 percent of their pre-tax income on rent. And the cost of groceries has increased by more than 20 percent since President Joe Biden took office. Median household income in 2022 was $74,580, or about 43 percent of what members of Congress make.
Rep. Matt Gaetz (R., Fla.) received the largest share of funds out of any lawmaker. The Florida Republican, who led the effort to oust former House Speaker Kevin McCarthy in part due to his budgetary policies, has billed taxpayers nearly $17,000 from January through May to pay for his D.C. living expenses. Gaetz received an additional $6,200 to pay for his meals during the same timeframe, an average of over $1,250 per month.
Gaetz’s wife, Ginger Gaetz, frequently brags on social media that the Florida Republican is a great chef and posts pictures of his culinary creations from their Washington, D.C., residence. Gaetz told the Free Beacon his taxpayer-funded meals are made with discount buy-one-get-one-free products.
Perks of having a chef husband 🦚 pic.twitter.com/Il9NU0wFDN
— Ginger Gaetz (@LuckeyGinger) October 17, 2023
"I’ve complied with the law, and my cooking is often with discount BOGO products. I try to do the best in the kitchen from the BOGO life," Gaetz said. "During my time in Congress, I’ve returned over $860,000 to taxpayers from the Members' Representational Allowance (MRA)."
By covertly authorizing the housing subsidy through an internal rule change, Democrats effectively gave representatives a pay raise without triggering political backlash, the New York Times reported. Former Rep. Mo Brooks (R., Ala.) railed against the secretive nature of the housing subsidy in January.
"You can have a good public policy debate on whether congressmen should be paid more in order to attract a better bunch, and you could have a reasonable debate on inflation adjustments, but it really ought to be done in public," Brooks said. "That’s my biggest beef, that it was a clandestine secret."
Congressional Progressive Staff Association spokeswoman Zoe Bluffstone also slammed the program, telling the Times that House offices should focus on increasing pay for staffers, who often "live paycheck to paycheck, take on debt, or work second jobs in order to survive due to persistently low wages on the Hill."
The subsidy is funded through members’ office budgets, and lawmakers can expense up to $258 per day in lodging costs and $79 per day in meals for days when the House is in session or when attending official committee meetings. The rate is set by the General Services Administration. Members of the House can be reimbursed for hotels or rentals, but cannot use the subsidy to make mortgage payments.
Lawmakers do not have to submit receipts for reimbursement, and only have to certify that they incurred the "eligible expenses," according to the Members’ Congressional Handbook.
Charles Hilu contributed to this report. | Real Estate & Housing |
An anonymous Slashdot reader shared this report from the New York Times: The collapse in cryptocurrency prices last year forced a procession of major firms into bankruptcy, triggering a government crackdown and erasing the savings of millions of inexperienced investors. But for a small group of corporate turnaround specialists, crypto's implosion has become a financial bonanza.
Lawyers, accountants, consultants, cryptocurrency analysts and other professionals have racked up more than $700 million in fees since last year from the bankruptcies of five major crypto firms, including the digital currency exchange FTX, according to a New York Times analysis of court records. That sum is likely to grow significantly as the cases unfold over the coming months. Large fees are common in corporate bankruptcies, which require complex and time-intensive legal work to untangle. But in the crypto world, the mounting fees have sparked widespread outrage because many of the people owed money are amateur traders who lost their personal savings, rather than corporations with the ability to weather a financial crisis. Every dollar in fees is deducted from the pool of funds that will be returned to creditors at the end of the bankruptcies.
The fees are "exorbitant and ridiculous," said Daniel Frishberg, a 19-year-old investor who lost about $3,000 when the crypto company Celsius Network filed for bankruptcy last year. "At every hearing, they have an army of people there, and most of them don't need to be there. You don't need 20 people taking notes."
Lawyers, accountants, consultants, cryptocurrency analysts and other professionals have racked up more than $700 million in fees since last year from the bankruptcies of five major crypto firms, including the digital currency exchange FTX, according to a New York Times analysis of court records. That sum is likely to grow significantly as the cases unfold over the coming months. Large fees are common in corporate bankruptcies, which require complex and time-intensive legal work to untangle. But in the crypto world, the mounting fees have sparked widespread outrage because many of the people owed money are amateur traders who lost their personal savings, rather than corporations with the ability to weather a financial crisis. Every dollar in fees is deducted from the pool of funds that will be returned to creditors at the end of the bankruptcies.
The fees are "exorbitant and ridiculous," said Daniel Frishberg, a 19-year-old investor who lost about $3,000 when the crypto company Celsius Network filed for bankruptcy last year. "At every hearing, they have an army of people there, and most of them don't need to be there. You don't need 20 people taking notes." | Crypto Trading & Speculation |
Patrick Semansky/AP
toggle caption
A sign outside the Internal Revenue Service building in Washington, on May 4, 2021. Effective immediately, the Internal Revenue Service will end its decades-old policy of making unannounced home and business visits — in a nod to worker safety and combatting scammers who pose as IRS agents.
Patrick Semansky/AP
A sign outside the Internal Revenue Service building in Washington, on May 4, 2021. Effective immediately, the Internal Revenue Service will end its decades-old policy of making unannounced home and business visits — in a nod to worker safety and combatting scammers who pose as IRS agents.
Patrick Semansky/AP
The Internal Revenue Service will largely diminish the amount of unannounced visits it makes to homes and businesses, citing safety concerns for its officers and the risk of scammers posing as agency employees, it announced Monday.
Typically, IRS officers had done these door visits to collect unpaid taxes and unfiled tax returns. But effective immediately, they will only do these visits in rare circumstances, such as seizing assets or carrying out summonses and subpoenas. Of the tens of thousands of unannounced visits conducted annually, only a few hundred fall under those circumstances, the agency said.
"These visits created extra anxiety for taxpayers already wary of potential scam artists," IRS Commissioner Danny Werfel said. "At the same time, the uncertainty around what IRS employees faced when visiting these homes created stress for them as well. This is the right thing to do and the right time to end it.
Instead, certain taxpayers will receive letters in the mail giving them the option to schedule a face-to-face meeting with an officer.
The IRS typically sends several letters before doing door visits, and typically carry two forms of official identification, including their IRS-issued credentials and a HSPD-12 card, which is given to all federal government employees. Both IDs have serial numbers and photos of the person, which you may ask to see.
"We are taking a fresh look at how the IRS operates to better serve taxpayers and the nation, and making this change is a common-sense step," Werfel said. | Banking & Finance |
The surveillance video, from earlier this year, is startling: Four masked men march in a line through a Home Depot store in New York -- two of them looking like menacing bodyguards -- while the two others confidently push carts stacked with almost a hundred boxes of high-value items that they take but never pay for.
When the same crew, allegedly doing the same thing, was approached by a security officer at another Home Depot store nearby, one of the men threatened the guard.
"I'll knock you out. This isn't worth dying for," he said, according to prosecutors.
As Home Depot executives describe it, that New York-area crew is part of a growing threat to Americans across the country: so-called organized retail crime, where groups of criminals steal prized items to sell online or elsewhere.
While this kind of theft has been around for years, retailers say it's reached unprecedented levels, sparking deadly violence at some stores. And federal authorities now warn it's become an "absolute threat" to public safety and public health, declaring that violent gangs, dangerous international crime syndicates, and even groups with suspected ties to terrorism are increasingly dabbling in organized retail crime across the United States.
"These criminal networks, they may be full-time drug traffickers, but they see an opportunity to work with a crew that's already stealing," said Raul Aguilar, who oversees international organized crime cases for Homeland Security Investigations, the primary investigative arm of the U.S. Department of Homeland Security. "And because it's hundreds of millions of dollars, [the money they make] can easily be diverted for [other] kinds of activities."
'Theft for greed'
"Organized retail crime is what I call theft for greed, not theft for need," said Scott Glenn, vice president for asset protection at The Home Depot, which has been hit hard by organized retail theft. "[But] they don't just come to a Home Depot and then decide to go home ... they go to Target, they go to Lowe's, they go to CVS, they go anywhere."
The groups behind organized retail theft can be expansive -- "like your traditional organized crime families," as Glenn put it -- or, as Aguilar noted, they can be just two or three people working together.
They target stores big and small, and they take whatever they know they can sell -- from power tools and spools of wire worth $3,000, to designer clothes and even medical supplies, officials told ABC News.
"They do a lot of research about what is profitable," Aguilar said. "They have shopping lists."
Glenn said The Home Depot investigated about 400 cases of suspected organized retail theft in the past year alone -- more than one per day -- and that the numbers are "growing double digits year over year."
The National Retail Federation's most recent survey of retailers across the country reported a 26% jump in organized retail crime between 2000 and 2021, amounting to tens of billions of dollars in losses. Home Depot alone loses "billions of dollars a year" to organized retail crime, according to Glenn.
Asked what's behind the recent spike of organized retail crime, Glenn cited two things in particular: the proliferation of masks during the COVID-19 pandemic, which allowed people to stay "a little bit more anonymous," as he put it, and the explosion of online marketplaces, where people can be even more anonymous.
According to the National Retail Federation, online sellers like Amazon and eBay have been particularly popular with retail thieves, but criminals are increasingly using peer-to-peer sites such as Craigslist and Facebook Marketplace, which offer more direct transactions.
'Keeps you up at night'
A Homeland Security Investigations report issued last year said estimates regarding organized retail crime found "the average American family will pay more than $500 annually in additional costs due to the impact."
But there are also much broader -- and potentially more concerning -- implications, according to retailers and law enforcement officials.
"This isn't just shoplifting," noted Aguilar, saying that it impacts the supply chain -- "and that has effect on the economy."
At the stores themselves, according to authorities and retailers, thieves are often armed with guns, knives, bear spray, or even tools taken from store shelves.
"We're starting to see a lot more violent acts taking place," said David Johnston of the National Retail Federation. "It greatly impacts the retailer's ability to keep their environment safe."
At a Home Depot in Pleasanton, California, in April, Blake Mohs, a 26-year-old employee set to be married in August, was fatally shot after he tried to stop a suspected thief. Two people have been arrested on murder charges in the case.
And late last year, 82-year-old Gary Rasor, a retiree working at The Home Depot in Hillsborough, North Carolina, died after being shoved to the ground by an alleged thief, who was then arrested on a murder charge. The case against him is still pending.
"It's unconscionable," Glenn said of the deaths. "That's something that keeps you up at night."
Home Depot executives say the company tells most employees not to intervene in suspected cases of shoplifting, but that the company also has asset-protection associates trained to confront shoplifters.
Homeland Security officials are also concerned about who's sometimes behind organized retail theft. Gangs and other dangerous groups, including the Aryan Brotherhood and crime rings from Eastern Europe and South America, have used organized retail theft to raise funds, according to Aguilar. And there are "definitely ties" between certain organized retail thieves and drug-trafficking organizations, including some of the cartels identified by the U.S. government as a global threat, Aguilar said.
In addition, said Aguilar, "some of these networks are tied to the terrorist financing networks around the world."
When pressed for more details, he said, "There's still too many active investigations, so I can't really specifically get into those."
Some media reports and others have questioned whether law enforcement officials and retailers have been exaggerating the scope of organized retail theft and the threat it poses to the U.S. homeland. As far back as 2021, the Los Angeles Times reported that although retail and law enforcement sources cite "eye-popping figures," there is "reason to doubt the problem is anywhere near as large or widespread as they say."
But Aguilar rejected such suggestions, insisting organized retail theft "absolutely is a threat."
'Part of the solution'
Glenn said The Home Depot is looking to stem the tide of organized retail theft by "taking a multifaceted approach": locking up often-targeted items behind cages, launching new forms of technology, and pushing Congress and law enforcement to do more.
Retailers expect the newly-passed INFORM Act, which requires online retailers to verify certain information about their sellers, to help combat the sale of stolen and counterfeit goods -- but they say they also want Congress to allocate funds for a federal task force specifically targeting organized retail crime. The Combating Organized Retail Crime Act, which would establish a coordinated multi-agency response and create new tools to tackle evolving trends in organized retail theft, was introduced by the House of Representatives in February.
"The feds ... actually have some really, really good data-sharing and intelligence-sharing capabilities," Glenn said.
Meanwhile, as local and state authorities try to tackle the issue in their communities with nearly a dozen state task forces, Homeland Security Investigations is "using all of its investigative authorities" to do what it can, Aguilar said.
Over the past three years, the agency has tripled the number of cases it's investigating, often using fraud-related and money laundering laws to open cases, he said.
But Aguilar said that to really help stop organized retail crime, consumers need to be "part of the solution."
"I think the first thing they could do is pay attention to what they're buying online," he said, advising consumers to be skeptical of items being sold as new with deep discounts.
"Pay attention to who's selling them, make sure to read the reviews," he said. | Consumer & Retail |
In the run-up to the EU referendum, the British people were subjected to a barrage of dire warnings about the economic consequences of voting to leave – the economy would go into recession, unemployment would rise, investment would collapse and UK exports to Europe would face a bleak future.
Voters, particularly in the Red Wall of northern England’s Labour heartlands, decided to ignore these scare tactics and put Britain’s freedom to make its own laws and determine its own destiny first. Ever since, the Left-leaning Metropolitan Remainers have heaped condescension upon them, trying to imply that Brexit has been a disaster and that they were stupid to ignore their warnings.
When the same voters, in 2019, opted to “Get Brexit done” by supporting the Conservatives, many for the first time, they were once again subjected to derision and mockery.
So, how have the predictions of doom mongers played out? Let’s start with the predictions about growth. “Brexit could lead to recession, says Bank of England” ran the headline in The Guardian in May 2016. What has happened since then? World Bank figures show that of the main European economies since 2016, France has grown 8.7 per cent, the UK 8.6 per cent, Germany 8.1 per cent and Italy 6.1 per cent. Of the G7 economies, the UK was the fastest growing in 2021 and 2022.
So what about unemployment? The Treasury said that in the “severe shock scenario” unemployment would rise by 820,000. The CBI estimate was that nearly a million jobs would be lost. The TUC and the Lib Dems claimed that three million jobs depended on our EU membership, the implicit threat being that these jobs would be lost if we voted to leave.
The reality? In June 2016, at the time of the referendum, there were 31.76 million people employed in the UK, with an unemployment rate of 4.9 per cent. Today, we have 33.05 million people working and an unemployment rate of 3.7 per cent – and that despite a global pandemic. In other words, not only were the warnings about rising unemployment completely false, we have actually added over a million jobs since Brexit.
It is a similar trend on investment, which was predicted to collapse. The UK ranks highest in Europe for new investment projects and continues to deliver more total jobs and jobs per project than Germany and France, which is in line with the Government’s focus on value over volume when attracting foreign direct investment. Alison Kay, Managing Partner for Client Service at EY goes further, pointing out that “investment intentions are at a record high and almost half of the investors surveyed think the UK’s attractiveness will improve in the near term”. Only this week, we had the spectacular announcement that Tata will invest £4 billion in its car battery manufacturing gigafactory in Somerset.
Finally, what happened to the scary forecasts about the effects on UK exports to the EU? In May 2016, the month before the referendum, the UK exported £11.6 billion of goods to the EU. It continued to climb, post-referendum to £14.8 billion by February 2019. After falling during the pandemic, exports continued to rise and, in fact, in July 2022 they reached £17.7 billion. This was not only the highest since Brexit, but since 1997.
There is a legitimate criticism of the Government in its failure to get across the true facts about the post-referendum economy, at a time when the unrelenting negativity of the hardline Remainers continues to poison our political discourse. That needs to change if the Tory position is to recover and we are to avoid a repeat of recent by-election losses.
What should we say to the voters of the Red Wall who enabled us to live in a Britain that controls its own future? It would not have happened without their courage and belief in our country. They were right. I thank them.
Liam Fox MP was secretary of state for international trade from 2016 to 2019 | United Kingdom Business & Economics |
Five million people – including children as young as five – provide unpaid care to people with long-term health conditions or problems related to old age, census data for England and Wales has revealed. With the social care system struggling with rising unmet care demand and about half a million people in England waiting for help, there has been an increase over the past decade in the proportion of people spending at least 20 hours a week on unpaid care, from 4.2% of the population to 4.7%. About 1.5 million people in England and Wales now spend more than 50 hours a week giving unpaid care.Large minorities of unpaid carers are struggling, and a survey of more than 12,000 carers last year found that a quarter were cutting back on food or heating, a third said their mental health was bad or very bad, and 29% said they often or always felt lonely.Between 2021 and 2022 there were sharp increases in the numbers of unpaid carers eating into savings and cutting back on leisure, hobbies and seeing friends, the research by Carers UK found.The census found that the areas with the highest numbers of unpaid carers were also among the most income-deprived, including St Helens in Lancashire, Neath in south Wales, Ashfield and Mansfield in Nottinghamshire and Knowsley in Merseyside, where one in 25 people provided 50 or more hours of unpaid care a week.graphUnpaid carers have told the Guardian they have lost friendships, gone through marriage breakdowns, been hospitalised and even contemplated suicide as a result of the pressures of caring for a loved one with limited help.The Conservatives’ 2019 general election manifesto pledged to introduce leave for working carers, but this has not happened. In June, the Liberal Democrat MP Wendy Chamberlain introduced a private member’s bill aiming to give employees with caring responsibilities up to a week of unpaid carer’s leave annually. It is due to have its third reading in parliament on 3 February.The total number of unpaid carers fell by 600,000 from the last census in 2011. The ONS said this may be because this time the question was framed differently and it was asked during the pandemic, when Covid restrictions reduced travel and limited visits to people from other households, and there were a higher number of deaths among elderly people, reducing the need for care.‘I never go anywhere, I never see anyone’In West Suffolk, Andrew Pearson, 64, said he wanted nothing more than to look after his wife, Amanda, 62, who needs round-the-clock care after being diagnosed with a brain tumour. But it has taken a severe toll. He has been hospitalised with heart problems triggered by staying up all night with her. He has lost contact with friends and family. Feeling “desperate”, he said, he has considered taking his own life.He gave up work as a locksmith to care for Amanda for six years. In common with many people, he wanted to care for his wife himself so did not ask for help from the social care system until he fell ill with Covid. But when he did, it was not there for them.“We tried and tried and tried with social services,” he said. “But they offered things that wouldn’t have been any help. I wanted to be able to sleep, more than anything; it was making me ill. But I was always told [night care] was not a possibility.”When carers came, they arrived at 11am to get Amanda up – too late – and at 6pm to put her to bed – too early. “It was because they didn’t have enough staff,” he said.He claims a carer’s allowance of £65 a week. The couple used to go climbing in Wales but now, he said, “I never go anywhere, I never see anyone; after a while the invites don’t come any more.”He added: “Sometimes I think: is it worth it? The only thing that is stopping me ending my life is the one thing that has caused me to want to end it [his caring duties].”Victoria Sanders, 52, who cares for her 18-year-old daughter, Rose, who has epilepsy and other complex needs, said she would “love a little bit of extra help” but “it’s just not available with the way things are”. Nor is she confident carers would be sufficiently experienced or qualified to respond to Rose’s difficulties, which include frequent seizures.Caring for Rose while holding down a part-time job as a graphic designer has put a strain on her family. Care demands were a contributory factor in the recent breakdown of her marriage, she said.“I don’t really have a life, I don’t go anywhere,” she said. “I would love to see the new Avatar film but I can’t. There are lots of things I have missed out on – but she is more important.”Helen Walker, the chief executive of Carers UK, said: “Without the support provided by unpaid carers, our health and social care systems would quite simply collapse. It is vital that the government recognises the pressing needs of this huge swathe of people and develops a funded national carers strategy for England. This would help millions of carers around the country get the practical and financial support they need to care without putting their health and livelihoods on hold.” In the UK and Ireland, Samaritans can be contacted on 116 123, or email [email protected] or [email protected]. In the US, the National Suicide Prevention Lifeline is 1-800-273-8255. In Australia, the crisis support service Lifeline is 13 11 14. Other international helplines can be found at befrienders.org. | Workforce / Labor |
NEW YORK -- NEW YORK (AP) —
Companies from toothpaste makers to even discounters are adding more premium items like designer body creams and services as they reach out to wealthier shoppers who are still spending freely even in the face of higher inflation and a volatile economic environment.
Think $10 toothpastes and $90 creams on supermarket shelves.
Retailers and consumer product companies felt justified in raising prices to offset higher costs from gnarled supply chains and Russia’s war in Ukraine last year. But as those financial pressures ease, some are looking for new ways to pump up sales and profits by focusing on premium items amid an overall sales slowdown.
“If you want to hedge against the economic challenges, you hedge your bets by chasing after the upper income,” said Marshal Cohen, chief industry adviser at market research firm Circana.
Many companies that normally cater to middle-income shoppers are unleashing a bevy of premium items in an attempt to grab consumers with more money to spare. But that could leave fewer options for consumers with less money to spare.
Walmart, for instance, features high-end $90 creams in its beauty aisles at select stores. Ketchup maker Heinz released a line of chef-inspired condiments called Heinz 57, including a 11.25-ounce container of infused honey with black truffle that costs roughly $7. Last year, Colgate-Palmolive made some waves by announcing its $10 three-ounce stain remover toothpaste, its first in the U.S. at this price, noting that premium products were essential to raising prices.
Meanwhile, Five Below — a chain known for selling toys and other impulse items for $5 and below — is creating a new store concept: Five Beyond, which sells items at $6 and higher. Last year, the Philadelphia chain converted 250 of its 1,300 stores to the concept and plans to expand that conversion to another 400 stores this year.
Five Below CEO Joel Anderson told analysts on a call in January that those who buy Five Beyond items spend more than twice as much as those who buy only Five Below items.
Some like Chipolte Mexican Grill have even publicized they are not pursuing discount-loving shoppers. The restaurant chain has been frank over the past year about how its price increases have scared off lower-income consumers. Last fall, it introduced Garlic Guajillo Steak, a limited-time offering that was pricier than regular steak.
In a conference call with investors in February, Chipotle Chairman and CEO Brian Niccol said the chain — which raised prices by 13.5% in its most recent quarter — is seeing higher-income customers visit more often.
“We made the decision not to go chasing people with discounts,” Niccol said. “That’s not what our brand is and that’s not what we’re going to do.”
Critics like Rakeen Mabud, chief economist at left-leaning The Groundwork Collaborative, believe such moves will only increasingly shut out the less economically fortunate.
“As products get more expensive and companies are focused more on the wealthier segments of our population or our consumers, everyday people are increasingly underserved and increasingly unable to afford the products they need,” Mabud said.
When AMC Entertainment, the world’s largest cinema chain, announced in February it was rolling out a new three-tier pricing system at all its locations by year end that would require customers to pay more for better seats, actor Elijah Wood — best known for his portrayal of Frodo Baggins in “The Lord of the Rings” film trilogy — blasted the move on Twitter.
“The movie theater is and always has been a sacred democratic space for all and this new initiative by AMCTheatres would essentially penalize people for lower income and reward for higher income,” he wrote.
The gap between the haves and have nots has only gotten wider during the pandemic.
Households with annual income of more than $156,000 make up 20.7% of the U.S. population, according to research firm GlobalData. However, they accounted for around 38.3% of all retail spending last year, up from 37.5% in 2021. Excluding food and other essentials, those shoppers in that bracket accounted for 41.7% of spending last year, up from 39.5% in 2021.
On the other end of the spectrum are lower-income households who are spending down the savings accumulated during the pandemic at a faster rate than anyone else. Households with incomes below $50,000 have depleted their savings by about half from a peak reached when the last stimulus check was sent in March 2021, according to data from the Bank of America Institute. Households with income above $250,000 have reduced their larger savings by just about 15%.
Low and middle-income shoppers have also been hurt by the Federal Reserve's inflation-fighting campaign to hike interest rates that have made using a credit card or getting an auto loan more expensive. But the Fed's efforts could be easing as its favored inflation gauge slowed sharply last month, while consumer spending rose modestly, according to reports by the Commerce Department released Friday.
Luxury retailer Neiman Marcus is doubling down with special services and exclusive offerings for its multi-millionaire shoppers who shop an average of 25 times a year and spend upwards of $27,000 annually. For example, the store recently teamed up with designer fashion brand Brunello Cucinelli to have a fashion show at a local ranch outside of Dallas for its top customer.
Neiman Marcus emphasized it's hardly ignoring the rest of the customer spectrum, but it noted that given a volatile economic environment it pays to invest more in its most loyal shoppers, specifically the top 2% who drive roughly 40% of its total sales.
Chief Executive for American Express Stephen J. Squeri told analysts in an earnings call in January that the company is limiting its focus to wealthier applicants.
“That premium customer base, while not immune to economic downturn, certainly right now is spending on through,” he said.
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Associated Press staff writers Chris Rugaber and Paul Wiseman in Washington and Dee-Ann Durbin in Detroit contributed to this report.
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Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio | Consumer & Retail |
Large corporations have fuelled inflation with price increases that go beyond rising costs of raw materials and wages, pushing shopping bills to record highs, according to an analysis of hundreds of company accounts.
Highlighting a trend dubbed “greedflation”, the research indicates that supermarkets, food manufacturers and shipping companies are among hundreds of major firms who have improved their profits and protected shareholder dividends, giving an extra lift to prices, while the cost of living crisis has meant workers face the biggest fall in living standards in a century.
Analysis of the top 350 companies listed on the London Stock Exchange by a team of researchers at Unite, the UK’s largest private sector trade union, showed that average profit margins – a company’s revenue above the cost of sales – rose from 5.7% in the first half of 2019 to 10.7% in the first half of 2022.
“This means the average profit margin of firms in the FTSE 350 jumped 89% in the first half of 2022 compared with the first half of 2019,” the report said.
In the UK, Tesco, Sainsbury’s and Asda made combined profits of £3.2bn in 2021, almost double pre-pandemic levels, Unite’s 170-page report shows. Global food manufacturers such as Unilever and Nestlé have also increased profits and margins over the last 18 months.
Higher profits margins are the result of “tacit collusion” by large companies, adding to the prices of hundreds of goods and services that were already under pressure after Russia’s invasion of Ukraine, the report said.
“Profiteering is a reflection of Britain’s broken economy. From price gouging to state-licensed monopolies in energy and utilities, the choices made by corporations are revealed to have caused historic ‘price spiralling’ – and governments are letting them do it,” it said.
Unite said it had also examined the accounts of international companies that sell services and materials that directly affect UK inflation figures.
“The four global giant agribusiness corporations that dominate crucial crops such as grains – ADM, Bunge, Cargill and Louis Dreyfus – saw profits shoot up 255%, making a combined $10.4bn in 2021. The world’s top 10 semiconductor manufacturers made £44bn profit between them – 96% more than in 2019,” the report said.
Tesco and Sainsbury, which together have a 43% share of the grocery market, are on course to make large profits again this year. Tesco said it expected to make profits up to £2.5bn this financial year, and Sainsbury indicated that it would hit almost £700m.
Sharon Graham, Unite’s general secretary, said households were suffering from a systemic problem. “Our research exposes where and how the economy is being rigged against workers – from supermarkets to energy bills, oil refineries to transport, we’re all paying the price,” she said.
Graham said she was concerned that policymakers in the Bank of England and the Treasury were focused on workers’ wages as a driving force behind rising prices when the analysis of corporate profits showed boardrooms played a significant role – insulating themselves from the impact of higher raw material costs by passing on price rises.
The report is an update on figures published last summer by Unite that revealed the growth of corporate profits while inflation soared and economic growth slowed to a halt across the industrialised world.
Graham said: “The profiteering crisis isn’t just a few bad apples – it’s systemic across our broken economy. Entire industries are choosing to take advantage of a crisis, resulting in the spiralling prices of goods we all need.”
The supermarket chains included in the report denied that they were partly to blame for rising prices. A spokesperson for Sainsbury’s said: “We are acutely aware of the pressures facing millions of households right now, and our number one priority continues to be doing all we can to keep prices low for our customers.
“In the last two years, we have invested over £550m in value, and we have consistently passed on less price inflation to customers than our competitors.”
An Asda spokesperson said: “Asda is the lowest-priced traditional supermarket and invested heavily during 2022 to keep prices in check for customers.
“This resulted in Asda topping the Grocer 33 weekly price comparison 43 out of 50 times last year and the Which? ‘big shop’ price survey every month during 2022,” they said, adding that “value products and a loyalty programme give customers money off every time they shop”.
Officials at the European Central Bank recently met to discuss the impact on inflation of price gouging by corporations, but have yet to reveal their conclusions.
The Bank of England official Catherine Mann recently said she was “concerned about the extent to which there is strong pricing power among firms and acceptance of those price rises by a lot of consumers”.
Paul Donovan, chief economist at UBS Wealth Management, is one of the few City economists to call attention to the increase in corporate profits as a cause of rising prices.
He said: “I believe that much of the current inflation is driven by profit expansion. Typically one would expect about 15% of inflation to come from margin expansion, but the number today is probably around 50%.
“One of the most telling signals is the decline in labour costs – automation has increased productivity, wage growth has been very weak in real terms, and as with commodity prices, moderating the inflation story rests on margin expansion.” | Inflation |
- It marks the latest push for the U.K.-headquartered firm into the Asia-Pacific region. Founded in 2020, Zodia Custody helps financial institutions store their crypto securely.
- Julian Sawyer, CEO of Zodia, said that Hong Kong was a market where demand for crypto is driven by institutions, rather than retail customers, adding this is the ideal clientele for Zodia.
Zodia Custody, the crypto security firm owned by British banking giant Standard Chartered, is launching its services in Hong Kong, the company told CNBC exclusively.
It marks the latest push for the U.K.-headquartered firm into the Asia-Pacific region. Founded in 2020, Zodia Custody helps financial institutions store their crypto securely.
Julian Sawyer, CEO of Zodia, said that Hong Kong was a market where demand for crypto is driven by institutions, rather than retail customers, adding this is the ideal clientele for Zodia.
"The Hong Kong government and the regulators see digital assets as the future and also want Hong Kong to be a hub," Sawyer said.
Zodia has been expanding aggressively in Asia. Indeed, the company opened its services in Japan, Singapore and Australia in recent months. It is part-owned by Standard Chartered, as well as Northern Trust and Japan's SBI Holdings.
Hong Kong is the last stop on Zodia's tour around the Asia-Pacific region, Sawyer said.
"What we're seeing is there are absolutely clients in all of those four markets who want to do things," he added.
"We also see a lot of other clients and prospects outside those four jurisdictions that want to come in on the institutional side."
Hong Kong has been increasingly warming to crypto assets despite a broader anti-crypto push from China, which banned bitcoin trading and mining in 2021.
The Hong Kong Securities and Futures Commission (SFC) launched a regulatory regime for digital assets earlier this year, giving companies the ability to apply for registration and offer their services in a regulated way.
So far, only two firms, OSL Digital and Hash Blockchain, have been handed licenses by the SFC.
Zodia is embarking on its Hong Kong expansion in a phased approach. At first, it will seek to provide services for Hong Kong clients in a limit set of crypto assets.
Zodia is also in discussions with both the SFC and Hong Kong Monetary Authority about becoming regulated in the financial district. | Asia Business & Economics |
- Binance.US said its banking partners would "pause" their relationship with the exchange as soon as next week.
- Binance's banking transactions and its relationship to billionaire owner Changpeng Zhao have attracted immense scrutiny as both battle the Securities and Exchange Commission, which filed 13 charges against them earlier this week.
- Zhao's ownership over Binance subsidiaries has been the subject of concern for the SEC, which filed an emergency motion for a temporary restraining order to prevent asset flight.
Binance.US customers will no longer be able to use U.S. dollars to buy crypto on the platform as early as June 13, hobbling the exchange's ability to do business in the United States, after both payment and banking partners "signaled their intent to pause USD fiat channels," the exchange said.
Binance announced the change late Thursday night on Twitter, and blamed the Securities and Exchange Commission's "unjustified civil claims against our business." The exchange said it had preemptively disabled customers' ability to buy and deposit U.S. dollars.
Binance's banking transactions are the center of immense scrutiny by the SEC, which filed a civil complaint against the exchange and its founder, Changpeng Zhao, alleging both violated U.S. securities laws.
Zhao's influence over and ownership of the U.S. and international arms of Binance — an international network of offshore holding companies the SEC alleges have moved billions of dollars of assets between themselves — prompted the SEC to file an emergency motion for a temporary restraining order. That restraining order would have frozen U.S. dollars from the exchange anyway.
Customers won't lose their money — those who haven't withdrawn their money by the shutdown date could still theoretically convert it to a stablecoin such as tether, then withdraw that and convert it back to dollars elsewhere. But it suggests that Binance's banking partners have decided the exchange is too risky a client to keep on, and that the revelations from the SEC case have grown too significant to ignore.
The exchange's disclosed U.S. banking partners, which have included Axos Bank, Cross River Bank, and the failed Silvergate, Signature, and Silicon Valley Banks, processed billions of dollars in transactions for the U.S. exchange, according to documents Binance provided to the SEC. Multiple banking partners had already stopped serving Binance, and it wasn't immediately clear which banking partners Binance retained. | Banking & Finance |
- Pasta prices rose 17.5% in March and 16.5% in April, according to Italy's ministry of business which cited Istat data.
- The jump is double that of Italy's consumer price index figures, which climbed 8.1% year-on-year for April and 8.7% for March, according to Refinitiv data.
- The elevated retail prices are owed to the fact that producers are now selling their pasta stocks which were made when the raw material costs were higher.
Whether it's a plate of spaghetti aglio e olio or penne arrabbiata, the price of Italy's beloved staple is soaring — enough to warrant a crisis meeting at the heart of the Italian government.
Pasta prices rose 17.5% in March and 16.5% in April, according to Italy's ministry of business which cited Istat data. The jump is double that of Italy's consumer price index figures, which climbed 8.1% year-on-year for April and 8.7% for March, according to Refinitiv data.
Pasta dishes in restaurants have risen 6.1% across the board year-on-year, Italy's consumer rights group Assoutenti told CNBC. According to a 2022 survey by the International Pasta Organization, an average Italian consumes almost 23 kg worth of pasta per year.
The elevated retail prices are owed to the fact that producers are now selling their pasta stocks which were made when the raw material costs were higher.
"This is due to the disposal of stocks produced with higher costs of raw materials," Assoutenti's President Furio Truzzi said, citing higher wheat and energy prices.
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In March 2022, the price of wheat peaked to its highest levels in more than a decade as Russia's invasion of Ukraine advanced. Both nations are huge suppliers of agricultural products to the global market.
However, Truzzi noted that the input costs have since dropped since that time, and higher pasta prices are now driven by other factors.
"High prices are maintained in order to have greater profits. Prices will fall only in the face of a significant drop in consumption," said Assoutent, proposing plans to reduce pasta consumption with a "pasta strike" of at least 15 days. In 2007, Italians staged a one-day strike against buying pasta when prices rose by almost 20%.
International wheat prices in April lost 2.3% to drop to their lowest since July 2021, according to the Food and Agricultural Organization.
"Wheat prices have been declining from their historic peak following the invasion of Ukraine, but remain high," the World Bank's External Affairs Officer Nandita Roy told CNBC via e-mail. She noted that the World Bank forecasts a 17.4% drop in wheat prices in 2023 relative to 2022.
The prices of durum wheat, a variety of wheat that's typically used in pasta, have also been on a decline in recent months. "However, there are many country-specific factors that would explain the rise in pasta prices in Italy," Roy added.
Two weeks ago, Italy's Minister of Economic Development Adolfo Urso convened an emergency meeting tabling a discussion over the pasta price hike.
Pasta producers, consumer associations and government officials were among those who attended the meeting — with some figures calling for a pasta price cap to put a lid on climbing prices, a motion which has since been rejected.
The latest surveys of pasta prices "are already showing the first, albeit weak, signs of a drop in prices, a sign that in the coming months the cost could drop significantly," a note from Italy's ministry of business said.
"The pasta on the shelves today was produced months ago with durum wheat purchased at the quotations of [an] even earlier period, with the energy costs of the wartime peak," said a statement by Unione Italiana Food, an association representing Italy's food producers. Higher costs of packaging and logistics have also contributed to the high prices of pasta, the association stated in the statement.
The statement added that the price of pasta production rose 8.4% in one year, which is "on a par with the average inflation index recorded for consumer goods."
"Costs have come down, it is true, but they have not returned to past levels and are still quite high compared to those recorded in 2020/2021," the organization added. "We would like to leave this day with the understanding that pasta is the solution, not the problem." | Inflation |
NatWest's chair has said he will not quit after initially backing former boss Dame Alison Rose in the row over the closure of Nigel Farage's account.
Sir Howard Davies said on Friday he would continue at the bank to ensure "stability" after the resignations of Dame Alison and the boss of Coutts.
NatWest is 39% owned by the taxpayer and Sir Howard said: "We do have the support of our main shareholder."
However, on Thursday, the prime minister refused to back Sir Howard.
When asked if he would support the chair staying on until the middle of next year when Sir Howard is due to step down, Rishi Sunak said: "This isn't about any one individual, it's about values - do you believe in free speech and not to be discriminated against because of your legally held views?"
Former UKIP leader Mr Farage has called on Sir Howard to step down.
Hours before Dame Alison resigned over the closure of Mr Farage's account, Sir Howard said the board retained "full confidence" in her.
But on Friday, he said: "The political reaction to that was such... her position was then untenable."
At the time, the chancellor said he had "significant concerns" over the row.
Following Dame Alison's resignation, Peter Flavel, the chief executive of Coutts, a subsidiary of NatWest where Mr Farage held his account, also quit.
While announcing NatWest's half-year results, Sir Howard said the bank has appointed City law firm Travers Smith to conduct an independent investigation into the closure of Mr Farage's account and how the information surrounding the issue had been handled.
Commenting on why the board continued to back Dame Alison after she admitted she had discussed Mr Farage's relationship with Coutts with the BBC, Sir Howard said: "We believe that was a rational decision to make at the time.
"However, the reaction, the political reaction to that was such that Alison and I then concluded, and the board supported the view, that her position was then untenable."
He added: "She would be running the bank in the face of very difficult headwinds and therefore we made a different decision."
In Friday's results, the last under the leadership of Dame Alison, NatWest reported a sharp rise in first-half profits to £3.6bn, from £2.6bn a year earlier.
Victoria Scholar, head of investment at Interactive Investor, said the profits are better than the £3.3bn expected by analysts.
Dame Alison left the bank "by mutual consent" with the board on Wednesday.
Earlier this month, Mr Farage said that his account at Coutts had been closed and that he had not been given a reason.
The BBC reported that it was closed because he no longer met the wealth threshold for Coutts, citing a source familiar with the matter.
However, Mr Farage later obtained a report from the bank that indicated his political views were also considered.
Ms Scholar told the BBC's Today programme: "It is a real shame that Alison Rose had to go.
"We know that she was a role model to many and a champion of diversity and inclusion but clearly her discussions [about] Nigel Farage have breached client confidentiality, which is absolutely sacrosanct in the industry and means her role is no longer tenable."
'Many struggling'
In its results, NatWest's chief financial officer, Katie Murray, said that while arrears during the first six months of its financial year "remain low, we know that people, families and businesses are anxious about their finances and many are really struggling".
"We are being proactive in our support for those who are hardest hit," she said.
Mortgage arrears of between one and three months rose to £171m from £133m in the same period last year.
Arrears of more than three months rose only slightly, to £238m from £233m last year. | Banking & Finance |
Chancellor Jeremy Hunt has reiterated the government's commitments to make benefits sanctions harsher - while also committing to raising the national living wage above £11 an hour.
In his speech to the Conservative Party conference in Manchester, the senior minister also revealed a plan to save £1bn by freezing the expansion of the Civil Service and reducing the level of staffing to pre-pandemic levels.
Mr Hunt's intervention comes around six weeks ahead of his autumn financial statement.
While not as tumultuous as his predecessor's party conference speech last year - where Kwasi Kwarteng had to admit his party was U-turning on a key part of his mini-budget - Mr Hunt is still under pressure.
Many voices within the Conservative Party want him to cut taxes, including cabinet ministers.
Speaking to Sky News' Sunday Morning with Trevor Phillips, Levelling Up Secretary Michael Gove said he would "like to see the tax burden reduced by the next election".
Mr Hunt on Saturday said the government was "not in a position to talk about tax cuts at all" - but all bets are off when it comes to party conferences.
The government has been eyeing welfare changes as a way to cut down on spending, and also encouraging people back into work in a bid to grow the economy.
Mr Hunt told the party membership in Manchester: "Since the pandemic, things have been going in the wrong direction. Whilst companies struggle to find workers, around 100,000 people are leaving the labour force every year for a life on benefits.
"As part of that, we will look at the way the sanctions regime works. It is a fundamental matter of fairness. Those who won't even look for work do not deserve the same benefits as people trying hard to do the right thing."
Read more:
Gove calls for tax cuts ahead of next election
Sunak and Johnson overseen largest tax rises since WW2
The chancellor also announced that Work and Pensions Secretary Mel Stride would look again at the benefit sanctions regime to make it harder for people to claim benefits while refusing to take active steps to move into work.
And a spokesman confirmed the proposals would be set out in the upcoming autumn statement.
Speaking last month, Mr Stride said that he was consulting on changes to the Work Capability Assessment, the test aimed at establishing how much a disability or illness limits someone's ability to work.
Mr Hunt also confirmed a new policy that could seek people looking for new jobs, with a freeze on the number of civil servants.
"We have the best civil servants in the world - and they saved many lives in the pandemic by working night and day," said the chancellor. "But even after that pandemic is over, we still have 66,000 more civil servants than before.
"New policies should not always mean new people. So today I'm freezing the expansion of the civil service and putting in place a plan to reduce its numbers to pre-pandemic levels. This will save £1bn next year.
"And I won't lift the freeze until we have a proper plan not just for the civil service but for all public sector productivity improvements."
On the national living wage, Mr Hunt said the government was going to accept the Low Pay Commission's recommendation to raise the baseline to at least £11 an hour from April 2024.
Resisting sizeable pay increases in the public sector has been part of the government's strategy to keep spending and inflation under control.
Mr Hunt said: "Since we introduced the national living wage, nearly two million people have been lifted from absolute poverty. That's the Conservative way of improving the lives of working people. Boosting pay, cutting tax."
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Ahead of the speech, Prime Minister Rishi Sunak, said: "I've always made it clear that hard work should pay, and today we're providing a well-earned pay rise to millions of people across the country.
"This means a full-time worker will receive an increase of over £1,000 to their annual earnings, putting more money in the pockets of the lowest paid.
"We're sending a clear message to hard-working taxpayers across the country; our Conservative government is on your side".
Labour's shadow work and pensions secretary, Liz Kendall, said her party "believes in responsibility - that those who can work, should look for work and take jobs when they are offered".
But she said the government also had "a responsibility to create real opportunities and not write people off", adding: "This is something the Tories have utterly failed to deliver.
"We now have record numbers of people out of work due to long-term sickness, which is costing taxpayers an extra £15bn a year just since the pandemic.
"[Labour] will tackle the root causes of economic inactivity by driving down NHS waiting lists, reforming social security, making work pay, and supporting people into good jobs across every part of the country. Real opportunities matched by the responsibility to take them up - because that's what fairness is all about." | Workforce / Labor |
LONDON, Nov 24 (Reuters) - Amazon (AMZN.O) workers came out on strike at multiple locations across Europe on Friday as protests against the U.S. e-commerce giant's working practices picked up pace on one of the busiest shopping days of the year.
"Make Amazon Pay", a campaign coordinated by the UNI Global Union, said strikes and protests would take place in more than 30 countries from Black Friday - the day after the U.S. Thanksgiving holiday, when many retailers slash prices to boost sales - through to Monday.
Originally known for crowds lining up at big-box stores in the U.S., Black Friday has increasingly moved online and gone global, fuelled in part by Amazon, which advertises ten days of holiday discounts this year from Nov. 17 to Nov. 27.
In Germany, Amazon's second-biggest market by sales last year, around 250 workers were on strike at a Leipzig warehouse and around 500 at an Amazon warehouse in Rheinberg, trade union Verdi said on Friday.
The union said a 24-hour strike across five fulfilment centres in the country had started at midnight on Thursday to demand a collective wage agreement.
An Amazon spokesperson in Germany said workers are paid fair wages, with a starting salary of more than 14 euros ($15.27) an hour, and have additional benefits. The spokesperson said deliveries of Black Friday orders will be reliable and timely.
More than 200 workers were striking on Friday at Amazon's warehouse in Coventry, England as part of a long-running dispute over pay.
Nick Henderson, a worker at the Coventry warehouse, which acts as a logistics hub for Amazon to process products to send to other warehouses, said he was striking for higher pay and better working conditions.
The striking workers were chanting their demand for a pay rise to 15 pounds ($18.69) an hour.
An Amazon UK spokesperson said minimum starting pay is between 11.80 pounds and 13 pounds an hour depending on location, and would increase to 12.30 to 13 pounds an hour from April 2024. Amazon said the strike would not cause disruption.
Italian trade union CGIL called for a Black Friday strike at the Castel San Giovanni warehouse, while Spanish union CCOO called for Amazon warehouse and delivery workers to stage a one-hour strike on each shift on "Cyber Monday", the last day of Amazon's ten-day sale.
Amazon's parcel lockers - located in train stations, supermarket car parks, and street corners, and used by many customers to receive orders - are also being targeted.
In France, anti-globalisation organisation Attac is encouraging activists to plaster them with posters and ticker tape, potentially blocking delivery workers and customers from being able to open them.
Attac, which calls Black Friday a "celebration of overproduction and overconsumption", said it expects the protest to be wider than last year, when it estimates 100 Amazon lockers across France were targeted.
Amazon has remained popular in Europe even as rivals like Shein and Temu have seen rapid growth. Amazon's app had 146 million active users in Europe in October, compared to 64 million for Shein and 51 million for Temu, according to data.ai.
($1 = 0.9168 euros)
($1 = 0.8025 pounds)
Reporting by Helen Reid and James Davey in London, Phil Noble in Coventry, Matthias Inverardi in Dusseldorf, Elisa Anzolin in Milan, Corina Pons in Madrid, Editing by Sharon Singleton
Our Standards: The Thomson Reuters Trust Principles. | Workforce / Labor |
Retailers are ramping up promotions to try to persuade shoppers to spend more after July's wet weather hit business.
Sales of clothing and shoes declined last month, which is usually a busy month for fashion, as shoppers held back from updating their summer wardrobes.
But a report on retail sales said there was a "big rise" in offers designed to persuade shoppers back.
The higher cost of living and rising interest rates are squeezing spending.
"We are starting to see a big rise in the number of promotions that retailers are putting in place in order to get shoppers through the door, as they battle to keep market share," said Paul Martin, UK head of retail at consultancy firm KPMG.
"Price conscious consumers are shopping more carefully, more aware of where bargains can be found and what they are getting for their money."
According to the British Retail Consortium (BRC) and KPMG, spending in July was dented by the damp weather, which "did no favours" to sales of clothing, and other seasonal goods.
The value of retail sales was 1.5% higher in July compared to a year ago, but volumes were lower once inflation, which is currently 7.9%, was taken into account.
"Both consumers and retailers are finding that they are having to get used to doing more with less as conditions remain incredibly challenging," Mr Martin added.
It was not just High Streets impacted last month, online sales also continued to slide, falling nearly 7% year-on-year, the report said.
However, sales of furniture, health and beauty goods held up.
"While consumer confidence is generally improving, it remains below longer-term levels," said Helen Dickinson, boss of the BRC, which represents some 5,000 businesses.
Inflation - the rate at which prices rise - fell to 7.9% in June, which is its lowest level in more than a year but still high by historical standards.
This is due to energy bills and food prices starting to fall, official figures from the Office for National Statistics (ONS) suggest.
The BRC-KPMG retail statistics are not as extensive as the ONS figures. However, reports of larger-than-usual summer discounts still suggest there could be an impact on inflation when the July data is released next week.
Economists are predicting inflation to drop to 6.8% due to energy prices falling.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said the 17% fall in households' energy bills will have "boosted disposable incomes", adding it appeared the cost of goods was now rising less quickly than wages.
Last week, the Bank of England put up interest rates for the 14th time in a row in a bid to make borrowing more expensive, dampen demand and therefore slow price rises.
This is driving up mortgage rates, something Ms Dickinson said was squeezing household budgets.
Economist Michael Hewson from CMC Markets said the slowdown in the pace of consumer spending was "not surprising", considering interest rate rises.
"This is what rate hikes are designed to do," he said.
But Mr Hewson said there was a "looming cliff edge" as there is a lag before the effect of such rises is fully felt in the economy.
He said consumers were now saving more to mitigate a sharp rise in mortgage costs as their fixed rate deals come up for renewal.
New figures from Barclaycard, which monitors about half of credit and debit card spend in Britain, also suggest there has been an overall slowdown in spending.
But there were a few bright spots, with more being spent on takeaways and streaming services as people stayed indoors away from the rain. | Consumer & Retail |
ECB Sets the Stage for a September Rate-Hike Pause
With the euro zone economy faltering, policymakers are giving themselves the option to take a break from raising interest rates.
(Bloomberg Opinion) -- The European Central Bank duly delivered a 25 basis-point increase in its official deposit rate to 3.75% on Thursday, its ninth consecutive hike in a year-long rate-hiking cycle. Despite worrying signs of economic deterioration in the euro zone, the governing council is leaving the difficult decision on whether it’s done enough for its quarterly economic review on Sept. 14. By then, perhaps the economic data will have made the decision for it — prompting a pause.
ECB President Christine Lagarde emphasized that the economic situation is deteriorating, and that there will be two inflation releases before its next meeting, which will also feature new forecasts for growth and inflation. Her comment about the central bank’s next policy decision sent as dovish a message as is possible:
We have an open mind as to what the decision will be in September and in subsequent meetings. We might hike, and we might hold. And what we decide in September is not definitive, it may vary from one meeting to another. If it is a pause, it will not necessarily be for an extended period of time.
The ECB is following in the footsteps of the Federal Reserve, which also chose to raise by a quarter-point on Wednesday to 5.5%. With Lagarde having signaled so clearly at the June meeting that a rate hike was nailed on for July, this wasn’t the time to skip. But there were sufficient changes in the wording of its statement — policy will be “set at” a sufficiently tight level rather than “brought to,” a change Lagarde said was “not just random or irrelevant” — to give room for a pause while not committing to a break. The absence of forward guidance leaves the ECB truly data-dependent.
Central banks are keeping the pressure on in the fight against too-high inflation, fearing a resurgence of consumer prices more than recessionary risks. The Fed's Jackson Hole symposium next month may offer insights into how central banks expect to manage the segue from relentless tightening to a more careful balance of economic priorities.
Quarter-point hikes are neither here nor there after official rates have been increased by more than 400 basis points. What policymakers want to avoid is another false dawn, where money-market futures start pricing in a succession of rate cuts. Their aim is to sustain the higher-rates-for-longer plateau until there is definitive proof that inflation is vanquished.
This dilemma is far more acute for the ECB as the euro-zone economy is more fragile than that of the US, with the Fed this week upgrading its growth outlook to moderate from modest. Furthermore, even though there are promising signs of headline euro-zone CPI having peaked, the core measure excluding food and energy remains stubbornly elevated. But with evidence of a slowing economy mounting, the ECB's margin for error is vanishingly slim.
Purchasing manager survey data for the bloc show the manufacturing sector is in serious decline in Germany and France. The German IFO business confidence survey was just another in a series of worse-than-expected data readings this week. Money supply data for the euro zone is turning down sharply. This is corroborated by another grim ECB bank lending survey this week which showed corporate loan demand weakening the most on record.
The ECB did deliver one surprise by deciding to no longer pay any interest on the minimum reserves that commercial banks have to leave at the central bank. This affects about €165 billion ($180 billion) of assets and will save the ECB more than €5 billion annually. In turn, it will reduce bank revenue by a similar amount. It’s a modest tightening measure and a further removal of the super-generous bank support mechanisms during the pandemic. It should improve the transmission of monetary policy and is designed to spur lending to the real economy. The governing council didn’t discuss further reduction of its balance sheet, which will be no doubt on the agenda at the September gathering.
There is plentiful evidence for the ECB to at least pause, if not to fully call time, on its rate-raising spree. The key to this will be improvement in core inflation. Having driven the deposit rate to 3.75%, a level last seen in 2000 at the early point of the euro’s existence, it is pretty hard to see the ECB going much higher given the dire economic backdrop unless inflation really disappoints. This is most probably the end of the ECB’s rate-hiking cycle, with emphasis shifting to keeping rates elevated for a longer period — and not a moment too soon.
More From Bloomberg Opinion:
- FOMZZZ... But an Inflation Spike Could Wake Us Yet: John Authers
- European Equity Bears Are Growling Again: Marcus Ashworth
- China's Economic Malaise Makes the US Look Good: Daniel Moss
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. Previously, he was chief markets strategist for Haitong Securities in London.
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Interest Rates |
A papermaker in Massachusetts named Zenas Marshall Crane is traditionally credited with being the first to include tiny fibers in the paper pulp used to print currency in 1844. But scientists at the University of Notre Dame have found evidence that Benjamin Franklin was incorporating colored fibers into his own printed currency much earlier, among other findings, according to a new paper published in the journal Proceedings of the National Academy of Sciences (PNAS).
We first reported on Franklin's ingenious currency innovations—most likely intended to foil counterfeiters (although this is disputed by at least one economist)—in 2021, when Notre Dame nuclear physicist Michael Wiescher gave a talk summarizing his group's early findings. The new paper, co-authored by Weischer, covers those earlier results along with the colored fiber evidence. As previously reported, the American colonies initially adopted the bartering system of the Native Americans, trading furs and strings of decorative shells known as wampum, as well as crops and imported manufactured items like nails. But the Boston Mint used Spanish silver between 1653 and 1686 for minting coins, adding a little copper or iron to increase their profits (a common practice).
The first paper money appeared in 1690 when the Massachusetts Bay Colony printed paper currency to pay soldiers to fight campaigns against the French in Canada. The other colonies soon followed suit, although there was no uniform system of value for any of the currency. To combat the inevitable counterfeiters, government printers sometimes made indentations in the cut of the bill, which would be matched to government records to redeem the bills for coins. But this method wasn't ideal since paper currency was prone to damage.
By the time he was 23, Franklin was a successful newspaper editor and printer in Philadelphia, publishing The Pennsylvania Gazette and eventually becoming rich as the pseudonymous author of Poor Richard's Almanack. Franklin was a strong advocate of paper currency from the start. For instance, in 1736, he printed a new currency for New Jersey, a service he also provided for Pennsylvania and Delaware. And he designed the first currency of the Continental Congress in 1775, depicting 13 colonies as linked rings forming a circle, within which "We are one" was inscribed. (The reverse inscription read, "Mind your business," because Franklin had a bit of cheek.)
“Benjamin Franklin saw that the Colonies’ financial independence was necessary for their political independence," said co-author Khachatur Manukyan. "Most of the silver and gold coins brought to the British American colonies were rapidly drained away to pay for manufactured goods imported from abroad, leaving the Colonies without sufficient monetary supply to expand their economy.”
Naturally, counterfeiters didn't take long to introduce fake currency, and Franklin and his network constantly generated new ways to distinguish fake bills. Some forms of those techniques are still used to detect forgeries today. For instance, in 1739, Franklin's printed currency for Pennsylvania deliberately misspelled the state's name. The intent was to set a trap for counterfeiters, who presumably would correct the misspellings in their forgeries.
Franklin kept a separate ledger, in addition to his main account book, in which he recorded his dealings with a papermaker named Anthony Newhouse. Franklin purchased "money paper" from Newhouse sometime in the mid- to late 1740s, and likely kept those transactions separate to keep his work on security features confidential, per the authors. “To maintain the notes’ dependability, Franklin had to stay a step ahead of counterfeiters,” said Manukyan. “But the ledger where we know he recorded these printing decisions and methods has been lost to history. Using the techniques of physics, we have been able to restore, in part, some of what that record would have shown.” | Banking & Finance |
Fans of the chocolate bar Caramac have been left "devastated" after Nestle confirmed it is discontinuing the sweet.
Nestle said it was "a difficult decision" but pointed to slower sales in recent years.
Caramac was launched more than 60 years ago, quickly gaining popularity thanks to its distinctive red and yellow wrapper and caramel flavour.
It comes as rival brands have launched similar products.
Cadbury's, for example, launched its Caramilk range in 2021 and has since made various different spin-offs like Caramilk Buttons, while supermarkets Asda and B&M have launched caramel-flavoured chocolate bars this year.
But for Nestle, the company felt it was better to concentrate on other products.
In a statement, Nestle said: "We know fans will be disappointed to see it go, but this change will enable us to focus on our best-performing brands, as well as develop exciting new innovations to delight consumers' taste buds".
News of the "blonde" chocolate bar being axed first surfaced on social media on Tuesday.
A post by a bakery in Scotland that uses Caramac in its pastries posted on Facebook and X, formerly known as Twitter, calling it a "sad day" and described how the business would be stocking up on the bars.
The post read: "It's been cancelled so I bought as many boxes as I could! They should last a while (I hope) but once they are gone, there will be no more Caramac eclairs!"
The post received almost 3,000 comments with followers expressing their shock. One fan posted about launching a petition in an attempt to convince consumer giant Nestle to reinstate the bars.
Caramac was originally created by Mackintosh's and since it launched over 60 years ago in 1959, it has been a mainstay of confectionary shelves across the UK.
The name is a combination of '"caramel" and "Mackintosh" and was determined through a competition held by the management team at Mackintosh's for their workers at a factory in Norwich.
Since its launch, the bar has been produced in the UK. In 1996, production moved to the North East of England, with a factory in Newcastle continuing to make the bars until now.
Caramac won fans over with a unique flavour and texture due to the fact it does not contain any cocoa.
But with other Nestle chocolate bars taking centre stage, Caramac has not been performing as well in a competitive confectionary market, despite customers' nostalgia and its iconic red-and-yellow wrapping. | Consumer & Retail |
The foreign secretary has cast further doubt on whether or not HS2 will ever reach Manchester, despite telling Sky News the prime minister is "absolutely committed to levelling up" - which includes the high-speed rail project.
The government only has until Tuesday this week to tell MPs about a large change to plans for the railway line, before the Commons then breaks for the conference recess until 16 October.
Labour is also being cautious with the multi-billion pound railway, with shadow chancellor for the Duchy of Lancaster Pat McFadden telling the BBC that "we want to see the railway being built, but we've also - like everything else - got to look at the cost of everything we do".
In March this year, the government announced a two-year delay to the section of the project between Birmingham and Manchester, with services not expected to begin running on that part of the line until the 2040s.
Some estimates put the total cost of HS2 at over £100bn, and the project was rated "unachievable" by the infrastructure watchdog.
Foreign Secretary James Cleverly is the most senior minister to be asked about recent reports the branch to Manchester may now be completely axed.
He told Sunday Morning With Trevor Phillips: "It's an important piece of infrastructure, the prime minister is absolutely committed to levelling up. This is part of that levelling up."
Asked if this meant the line would run to Manchester, the foreign secretary said: "We've always got to make sure that the sequencing is right.
"What leaders in devolved government want, what investors in the UK want, is predictability - and therefore we will make sure they know exactly what is going on."
Read more:
Why is HS2 being delayed?
HS2 hold ups costing taxpayer more than £360m
This mirrors a similar lack of commitment and clarity to the Manchester branch this month - from both the Home Office minister Chris Philp, and the prime minister's spokesman.
Concerns about whether the route would reach Manchester at all arose after The Independent published images showing what appeared to be government briefing documents.
These outlined how the government has already spent £2.3bn on stage two of the railway from Birmingham to Manchester, but that up to £35bn could be saved by abandoning the phase.
What's going on with HS2? "We've always got to make sure that the sequencing is right." These were the words of the Foreign Secretary, James Cleverly, as he pointedly avoided confirming that the high-speed railway line known as HS2 would be built to Manchester on Sunday Morning With Trevor Phillips. To unpick the lingo, "sequencing" essentially means when various bits of the line will be built. There was a change in "sequencing" (as ministers would no doubt call it) earlier this year, when the transport secretary delayed the Birmingham to Crewe leg and pushed back the Euston opening. At the time, Whitehall officials were noticeably vague on whether the new line would be built to Manchester at all, with the Department for Transport taking several days and several phone calls just to confirm that was still government policy. Now that looks to be in doubt with some interested parties expecting an announcement this week. As ever, money will be the motivating factor for any change - with speculation that cash saved on the project could be freed up for the East/West 'Northern Powerhouse' rail link or for other pre-election giveaways. The big political risk is ending up with a hugely expensive train line that doesn't reach Central London but doesn't reach the North of England either (remember, Boris Johnson trimmed back the Leeds leg while he was in charge). The timing may also be awkward given the Conservatives are due in Manchester for their annual conference in a fortnight's time. Of course, Tory MPs travelling there by rail will have problems anyway – as train drivers are walking out on strike at the beginning and end of the four-day event.
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Financial decisions are currently being made by the chancellor, Treasury and government as a whole in the run-up to the autumn financial statement in November.
Mr McFadden's refusal to commit to the branch gives Labour room to manoeuvre if the line to Manchester is cut - as reinstating the commitment would add tens of billions of pounds to the party's spending plans. | United Kingdom Business & Economics |
The Bank for International Settlements (BIS) publishes a report proposing that digital ID, Central Bank Digital Currency (CBDC), and tokenization can facilitate trust in money flows.
“In the realm of credit-based money, trust plays a key role,” the report reads, adding, “Trust in the holder of money can be facilitated by national (digital) identity systems, sanctions lists, and […] infrastructure.”
The authors also make the case that tokenized money would lead to greater trust in cross border payments.
However, “tokenized money is not associated with anonymity,” according to the report, adding, “the identity of token owners and the nature of transactions can still be monitored by appropriate parties.”
That’s where digital identity comes into play. Transactions won’t be anonymous like with physical cash.
Last month the BIS published a report called, “Blueprint for the future monetary system: improving the old, enabling the new,” which further explains how tokens actually work.
Basically, a token comes with both the “rules” on what the asset can and cannot do (programmability) and the background “information” on what the asset is, who owns it, and where it comes from.
When bankers and economists talk about programmability in token-based CBDCs, they are talking about rules being applied to when, where, and how you can spend your money.
As Cornell University professor Eswar Prasad told the World Economic Forum (WEF) last month:
“If you think about the benefits of digital money, there are huge potential gains. It’s not just about digital forms of digital currency; you can have programmability — units of central bank currency with expiry dates.
“You could have […] a potentially better — or some people might say a darker world — where the government decides that units of central bank money can be used to purchase some things, but not other things that it deems less desirable like say ammunition, or drugs, or pornography, or something of the sort, and that is very powerful in terms of the use of a CBDC, and I think also extremely dangerous to central banks.”
While Prasad highlighted that programming CBDC for economic or social policies could affect the integrity of central banks, European Central Bank president Christine Lagarde recently explained that programmability would be left to commercial banks.
In March, Lagarde said that a central bank would not be in charge of programming a digital currency.
“For us [central banks], the issuance of a digital currency that would be central bank money would not be programmable — would not be associated with any particular limitation, whether it’s in time, in type of use — that to me would be a voucher. It wouldn’t be a digital currency,” said Lagarde.
“Those who can associate the use of digital currency with programmability would be the intermediaries — would be the commercial banks.
“And that’s their business. They know how to do that, but if we are to say that a dollar is a dollar, whether it is cash or digital; or a euro is a euro, cash or digital — then for us [central bank] it cannot be programmable.
“It can be associated with conditionality, which is different, but not programmable,” she added.
Speaking at a high-level roundtable on CBDC in Washington, DC in October 2022, International Monetary Fund (IMF) deputy managing director and former People’s Bank of China (PBoC) deputy governor Bo Li said of CBDC programmability
Speaking at a high-level roundtable on CBDC in Washington, DC in October 2022, International Monetary Fund (IMF) deputy managing director and former People’s Bank of China (PBoC) deputy governor Bo Li said of CBDC programmability:
“CBDC can allow government agencies and private sector players to program — to create smart contracts — to allow targeted policy functions. For example, welfare payment; for example, consumption coupons; for example, food stamps.”
“By programming CBDC, those money can be precisely targeted for what kind of people can own and what kind of use this money can be utilized,” he added.
So, while Lagarde says that central banks have no interest in programming CBDCs, central banks around the world are indeed exploring programmability, even if the central banks themselves are not the ones doing the actual programming.
In May the BIS published a 10-page report called “Central bank digital currencies: ongoing policy perspectives,” which questioned if programmability could be introduced via the backdoor following a CBDC launch.
While the BIS acknowledged that blockchain could aid in programmability, the central bank for central banks pondered whether or not blockchain was actually necessary, and if programmability could be introduced later on.
According to the report, “The use of blockchain technology within CBDC systems remains a possibility, although it is not deemed essential to the functioning of a potential CBDC system.”
However, “There may be ancillary uses for blockchain technology, and associated concepts from within the cryptoasset ecosystem, that could potentially extend the functionality of a CBDC (eg enabling certain types of programmability, micropayments).“
Speaking at an event in Morocco last month, International Monetary Fund (IMF) managing director Kristalina Georgieva said that CBDCs needed to be interoperable between countries and that the IMF was working on the concept of a global CBDC platform for that reason.
“If we are to be successful, CBDCs could not be fragmented national propositions,” said Georgieva.
“To have transactions more efficient and fairer, we need systems that connect countries.
“In other words, we need interoperability.
“For this reason, at the IMF we are working hard on the concept of a global CBDC platform to trade and to manage risks,” she added.
At the same conference in Morocco, the IMF’s Tobias Adrian, who also co-authored yesterday’s BIS report on “Trust Bridges and Money Flows,” said that there was great potential in tokenizing assets and money and that “tokenized deposits themselves could be escrowed and exchanged directly.”
Speaking at COP27 in Egypt last year, former Bank of England Advisor Michael Sheren said that carbon was “moving very quickly into a system where it’s going to be close to a currency,” and that next on the agenda was the tokenization of nature and biodiversity, where places like Indonesia, Brazil, and Africa would be “absolutely critical.”
“Carbon, we already figured out,” he said, adding, “carbon is moving very quickly into a system where it’s going to be very close to a currency, basically being able to take a ton of absorbed or sequestered carbon and being able to create a forward-pricing curve, with financial service architecture, documentation.”
According to Sheren, “The southern part of the world has value far greater than large elements of the northern part.
“And we start thinking about putting prices on water, on trees, on biodiversity, we find where does that sit […]
“How do we start tokenizing?” he added.
Image by Freepik | Banking & Finance |
The UK’s consumer prices index (CPI) dropped to 4.6 per cent in October, down from 6.7 per cent in September, according to figures released by the Office for National Statistics (ONS)
It is the lowest rate of price increases in two years, and means inflation has more than halved since late last year.
In a statement released this morning, prime minister Rishi Sunak said: “In January I made halving inflation this year my top priority. I did that because it is, without a doubt, the best way to ease the cost of living and give families financial security.
“Today, we have delivered on that pledge.”
He argued that “hard decisions and fiscal discipline” from his government had contributed to the fall in inflation.
“Inflation works like a tax. It eats into the pound in your pocket, affecting the price of your food shop, your mortgage, the size of your pension pot”, the prime minister said.
“This is why halving inflation has been my number one priority. Getting it down has involved hard decisions and fiscal discipline. Official figures released this morning confirm we have halved inflation, meeting the first of the five priorities I set out at the beginning of this year.
“While it is welcome news that prices are no longer rising as quickly, we know many people are continuing to struggle, which is why we must stay the course to continue to get inflation all the way back down to 2%.”
The dramatic inflation fall comes after the latest Ofgem price cap came into effect, limiting typical household energy bills to £1,834.
Shadow chancellor Rachel Reeves has warned the government not to start “popping champagne corks” about the fall in the rate of inflation.
She said: “The fall in inflation will come as some relief for families struggling with the cost of living.
“But now is not the time for Conservative ministers to be popping champagne corks and patting themselves on the back.
“After 13 years of economic failure under the Conservatives, working people are worse off with higher mortgage bills, prices still rising in the shops and inflation twice as high as the Bank of England’s target.
“Rishi Sunak is too out of touch and his party is too divided to help people who are worried about the cost of living.
“A Labour government’s priority would be making working people better off by boosting wages, cutting people’s bills and getting the economy growing again.”
Liberal Democrat Treasury spokesperson Sarah Olney has said Sunak meeting his inflation target is “cold comfort” for working people.
She said: “Rishi Sunak congratulating himself over today’s figures will be cold comfort for all the hard-working people still bearing the brunt of this Conservative chaos.
“For months on end, people across the country have been watching as their pay cheque gets squeezed from all sides, draining every spare penny. From the ever-increasing cost of the weekly shop to skyrocketing mortgage payments.
“Enough is enough. With next week’s autumn statement, the Government must properly help families and pensioners struggling with the cost-of-living crisis and give our NHS the funding it desperately needs”.
Grant Fitzner, chief economist at the Office for National Statistics, said: “Inflation fell substantially on the month as last year’s steep rise in energy costs has been followed by a small reduction in the energy price cap this year.
“Food prices were little changed on the month, after rising this time last year, while hotel prices fell, both helping to push inflation to its lowest rate for two years.”
Alpesh Paleja, CBI Lead Economist, said: “A big drop in inflation was always expected in October, with last year’s energy price cap rise falling out of the annual comparison. But even taking this into account, inflation is heading in the right direction and the Government’s pledge to halve inflation by the end of the year has been met”.
Politics.co.uk is the UK’s leading digital-only political website, providing comprehensive coverage of UK politics. Subscribe to our daily newsletter here. | Inflation |
ICBC Hack Kept U.S. Repo Market Open, Fueled Bond Delivery Failures
Non-delivery of US debt pledged as collateral surged on Thursday as the repercussions of a cyberattack on Industrial & Commercial Bank of China Ltd. rippled through the market.
(Bloomberg) -- Non-delivery of US debt pledged as collateral surged on Thursday as the repercussions of a cyberattack on Industrial & Commercial Bank of China Ltd. rippled through the market.
US Treasury repo fails — the amount of US debt that wasn’t delivered to fulfill trade contracts — rose to $62.2 billion, the highest since March and up from $25.5 billion a day earlier, Depository Trust & Clearing Corporation data show. Such failures-to-deliver occur when either sellers do not deliver, or buyers do not receive, securities in time to settle a trade.
The repo market — which usually closes at 3 p.m. in New York — stayed open for an extra couple of hours in order to facilitate trades, according to Subadra Rajappa, head of US interest-rates strategy at Societe Generale. And the Federal Reserve kept its Fedwire settlement system open to minimize the damage, said Curvature Securities executive vice president Scott Skyrm.
The DTCC and Fed could not immediately be reached for comment on the extensions.
“We saw our fails increase by maybe 50% or doubled,” said Skyrm. “We would’ve had a lot more fails if they hadn’t stayed open. That cleaned up some of the fails and helped the congestion,” he said.
The rate on overnight general collateral repurchase agreements last traded at 5.37%, according to Clear Street LLC.
Rumors around the attack on ICBC swirled through markets on Thursday as entities responsible for settling transactions swiftly disconnected their systems to contain the damage, forcing ICBC to send settlement details via a USB drive. The drama complicated the US’s auction of 30-year debt, which was among the worst in a decade, with some market participants citing ICBC’s troubles as adding to the lackluster result.
(Updates with latest repo pricing in sixth paragraph. An earlier version of this story corrected the details of the repo extension.)
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
Lidl will have its staff wear body cameras in stores to combat shoplifting and violence against staff.
According to the supermarket chain, they are the first to ensure bodycams will be used in every store, but they will not be required for every staff member.
Lidl GB, with more than 960 stores in the UK, said it will invest £2m to ensure each shop had the new security measures. The bodycam rollout is set to be completed by spring next year.
Ryan McDonnell, chief executive at Lidl GB, said: "Safety and security has always been an absolute priority for us.
"While our stores are typically safe environments, retail crime is something that is impacting the whole industry.
"Our investment into ensuring all our stores have body-worn cameras is just one of the ways we're taking action to protect and provide reassurance to our colleagues and customers."
Last month, 10 retailers including Lidl, Tesco and John Lewis, committed £60,000 of funding and launched Project Pegasus to help fund a police crackdown on shoplifting.
Retailers also told the Home Secretary that action was needed over the sharp rise in retail crime.
In August, Suella Braverman said it was "unacceptable" crimes such as shoplifting were treated as "less important".
Read more from Sky News:
PM vows to hold Met Police 'accountable' for allowing protest
Leeds stabbing victim named
Industry lobby group the British Retail Consortium said its 2023 crime survey showed incidents of violence and abuse towards industry workers had almost doubled against pre-pandemic levels to 867 every day in the latest year.
Data released by the Office for National Statistics in October showed 365,164 shoplifting offences were recorded by police in the year to June - up 25% on the previous 12 months.
ONS data also showed that total police-recorded theft rose by 10% in the year to June 2023, still below pre-pandemic levels. | Consumer & Retail |
When I was a trainee on Teesside's Evening Gazette in the early 1980s, my chief reporter during my spell in the Stockton office was Alex Cunningham.
Since 2010 he's been Labour MP for Stockton North, a seat represented when I worked there by SDP Gang of Four member Bill Rodgers, who I used to pester with 8.30am phone calls most mornings.
Now Alex has put Stockton North firmly on the map, but not in the way he would have wished.
He claims the new home secretary called his constituency a "s***hole" during Prime Minister's Questions.
At first Mr Cleverly denied such a slur.
But now he's made a partial climbdown. He DID make a derogatory remark, he admits, but it was about Mr Cunningham, calling him a "s*** MP", not about his constituency.
The credit for the Cleverly climbdown should go not to Mr Cuningham, however, but to the Conservative mayor of Tees Valley, Ben Houchen, a Tory poster boy who received a peerage in Boris Johnson's resignation honours.
It's one thing for Labour politicians to attack a Tory home secretary.
And at Business Questions to Commons Leader Penny Mordaunt, Labour's Lucy Powell accused Mr Cleverley of "besmirching" Mr Cunningham's constituency.
At the time, Ms Mordaunt was having none of it.
"He denies it and I believe him," she replied.
But the attack on Mr Cleverly from such an influential and senior Tory as Lord Houchen clearly triggered Mr Cleverly's new admission.
The home secretary should apologise for "dragging Stockton's name through the mud", the mayor demanded, as he hit out at "childish and unprofessional language used by Westminster politicians who should know better".
After Mr Cleverly's apology for his "unparliamentary language", Lord Houchen attempted to repair the damage. "We're all human and he's a good guy who made a mistake," he said.
The Cunningham question to the PM that sparked the row was brief and to the point.
"Why are 34% of children in my constituency living in poverty?" he asked.
It was during Rishi Sunak's answer that the alleged - and disputed - derogatory remark was made, prompting the MP to raise a point of order after PMQs, claiming that although Mr Cleverly denied being the culprit "the audio is clear and has been checked and checked and checked again".
Here at Sky News, our clever technical boffins have also "checked and checked and checked again" and it's not clear what words were used and whose mouth they came out of.
When I interviewed Mr Cunningham for Sky News about the row, he eulogised about Stockton being a "wonderful town" with conservation areas and "a great place to live".
The home secretary "shames the government and shames the Tory party as well", he declared. "They don't care about us up north," he claimed.
I have fond recollections of Stockton. Billingham, in the constituency, has a top theatre, the Forum. I recall the late Leonard Rossiter performing there during my time on the Evening Gazette.
And part of Teesside folklore is how the late Carry On star Terry Scott drove his Jaguar off the famous Transporter Bridge in 1974, landing unhurt in the safety net rather than in the freezing water of the Tees, while he was appearing in a play at the Forum.
Stockton also has a wide and elegant high street and when I worked there we reporters drank in the Sun Inn, just off the high street, where a giant barman - called Graham, as I recall - offered a choice of "flat or frothy" pints of Bass.
Don't tell Mr Cunningham, but we used to write our afternoon "overnights" before going to the pub at lunchtime, then file them as soon as we returned to the office to conceal how long we'd been in the Sun Inn.
To be fair to Alex, back then we had no idea that he was even a Labour supporter or would-be MP. In his journalism he was always scrupulously neutral.
More than four decades later, he has truly helped put Stockton North on the map.
Even though it was his Tory rival Lord Houchen's "blue on blue" attack that was decisive in forcing a partial retreat by the home secretary. | United Kingdom Business & Economics |
Ahluwalia Contracts, KNR Constructions Q2 Results Review - HDFC Securities
Ahluwalia Contracts reported a strong quarter with revenue / Ebitda /APAT beating our estimates by 16.7/5.7/10.2%.
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Ahluwalia Contracts - Execution picking up
Ahluwalia Contracts India Ltd. reported a strong quarter with revenue / Ebitda /adjusted profit after tax beating our estimates by 16.7/5.7/10.2%. Ebitda margin at 10.0% was up 2 basis points YoY but down 87 bps QoQ due to higher volatility in raw material and input prices and higher employee expenses.
Ahluwalia Contracts maintained its top-line growth of 20% YoY in FY24, with Ebitda margin (including other income) expected upwards of 11%. The order book as of September 2023 stood at Rs 120.8 billion (~4.3 times FY23 revenue), excluding level-one in one private project worth Rs 28.4 billion (international jewellery park in Mumbai).
The order book is welldiversified, with government/private orders comprising 70/30% of order book and West/North/East/Overseas/South regions contributing 36/34/24/4/2% to it. Segment-wise, infrastructure / hospital and institutional are the major drivers, contributing 30/25/24%, followed by residential/commercial contributing 12/8%. 24% of the order book is fixed-price contracts.
The total order inflow in FYTD24 has been Rs 52.6 billion. Ahluwalia Contracts has a bid pipeline amounting to Rs 25 billion and it expects to win new orders worth Rs 10 billion, apart from level one.
Given the recent rally in the stock price and a limited upside to our target price, we maintain our 'Add' rating on the stock, with an unchanged target price of Rs 782 (14 times Sep-25E earnings per share).
KNR Construction - Order booking awaited
KNR Construction Ltd. reported in-line revenue/Ebitda/adjusted profit after tax at Rs 9.4/1.7/1 billion, beating our estimates by 9.9/4.8/1.0%. Ebitda margin came in at 17.7%, down 158/98 basis points YoY/QoQ, owing to volatility in input and raw material prices and higher fixed and other overhead expenses.
KNR maintained its FY24 revenue at Rs 40 billion plus, with the Ebitda margin decreasing by 200-300 bps from the FY23 margin (which was 18.6%).
The executable order book as of Sep-23 stood at Rs 56.7 billion. With no new orders recorded in H1 FY24, KNR has slashed its FY24 order inflow target to Rs 30-40 billion from Rs 40-50bn earlier. The total project pipeline is Rs 1 trillion plus, of which Rs 900//120/30 billion is from National Highway Authority of India/mining/railways projects.
Given the aggressive competition, the company is looking at projects from different segments like irrigation projects from states other than Telangana, railways, mining development, tunnelling, and metro.
The balance equity requirement in eight NHAI hybrid annuity model projects is Rs 5.4 billion as of Sep-23, of which Rs 1/3.1/0.7/0.6 billion will be infused in H2 FY24/FY25/26/27.
At the standalone level, KNR's net debt stood at Rs 0.5 billion. Given a strong balance sheet, robust execution and likely new order wins in H2 FY24, we maintain 'Buy' with an unchanged target price of Rs 341/share (18 times Sep-25E EPS).
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MANCHESTER, England -- Britain’s Treasury chief is to announce a hike in the national minimum wage on Monday, as the governing Conservative Party tries to persuade voters it is on the side of those who are struggling financially.
Chancellor of the Exchequer Jeremy Hunt has ruled out tax cuts, saying they would fuel inflation.
According to excerpts of Hunt’s speech released in advance by the Conservative Party, he will tell the Conservatives' annual conference that the hourly rate for workers 23 or older will rise in April from 10.42 pounds ($12.70) to at least 11 pounds ($13.40).
The exact amount will be set after a recommendation by the Low Pay Commission, an advisory body.
That will mean a raise for more than 2 million workers.,
Hunt is also to pledge to toughen the rules on social benefits in an attempt to stem the flow of working-age people out of the workforce, a trend that has accelerated since the coronavirus pandemic.
“Those who won’t even look for work do not deserve the same benefits as people trying hard to do the right thing,” Hunt was to say, according to the excerpts.
The party is trying to sprinkle voter-pleasing measures such as the pay increase at the conference, which may be the last before a national election due in 2024. But the government’s spending power is constricted by the U.K.’s sluggish economy and stubbornly high inflation that hit double digits last year and now stands just below 7%.
“I do want us to have lower taxes,” Hunt told Sky News. But he said “it’s very difficult to see” it happening this year.
The right-of-center Tories, in power since 2010, are lagging far behind the center-left opposition Labour Party in opinion polls. Voters are weary after years of political turmoil over the U.K.’s exit from the European Union, the coronavirus pandemic and a cost-of-living crisis fueled by Russia’s invasion of Ukraine last year.
Prime Minister Rishi Sunak, who took office just under a year ago, is facing grumbling – and even open rebellion – from some Conservative members and lawmakers.
Sunak steadied the economy after his predecessor Liz Truss crashed the pound and trashed Britain’s reputation for fiscal prudence with her tax-slashing economic plans. She left office after just 49 days.
Many Conservatives doubt whether Sunak — the party’s fifth leader since 2016 — can restore its popularity to the level that saw the party win an 80-seat majority in the 650-seat House of Commons in 2019, under then-Prime Minister Boris Johnson. He resigned in mid-2022 amid scandals over his ethics and judgment.
In recent weeks, Sunak has sought to take the initiative with a clutch of measures depicted as easing the economic burden on taxpayers. He has delayed a ban on selling new gas and diesel cars and watered down other green measures that he said imposed “unacceptable costs” on ordinary people. Critics say the measures will have little impact on people’s pocketbooks and will make it harder for Britain to reach its goal of cutting greenhouse gas emissions to net zero by 2050 in order to limit climate change.
Hundreds of party lawmakers, activists and officials attending the four-day conference in Manchester, northwest England, are being wooed by rivals to Sunak, positioning themselves for a party leadership contest that could follow election defeat.
Home Secretary Suella Braverman and Business Secretary Kemi Badenoch are both addressing meetings and receptions as they vie for the support of the party’s populist right wing, which wants tough curbs on irregular migration and a war on liberal social values derided as “woke.” Foreign Secretary James Cleverly is popular with more centrist Conservatives.
Even Truss, who resigned in disgrace less than 12 months ago, is on hand to offer her opinion, keep her name in the headlines and make life difficult for her successor.
Truss, whose plan for billions in unfunded tax cuts spooked the financial markets, is calling for the party to “revive Conservative values” such as “cutting red tape, lower(ing) taxes and trusting that markets will find the solutions we all want.” | United Kingdom Business & Economics |
Costco shoppers shifting away from specific item; CFO says it’s indicator of recession
(NEXSTAR) – Costco’s shoppers were less often choosing to purchase beef or steaks from the stores’ meat departments in recent months — a trend indicative of a recession or at least “concern” for a recession, according to CFO Richard Galanti.
Galanti, speaking with investors in a third-quarter earnings call last week, said more shoppers were choosing less expensive cuts of meat instead.
“Historically, we’ve always seen, like within fresh protein, we’ve always seen when there’s a recession, whether it was ’99, ’00 or ’08, ’09, ’10, we would see some sales penetration shift from beef to poultry and pork,” Galanti said in a third-quarter earnings call last week. “We’ve seen some of that now.”
He also said he had heard from a fellow executive that Costco was seeing “some switch even to some canned products, like canned chicken and canned tuna and things like that.”
Products from Kirkland Signature — Costco’s private label — were also seeing increased interest over name-brand items, Galanti said.
Galanti’s remarks came in response to a question about the company’s “softer” numbers on fresh food sales, though Galanti claimed those sales, albeit “weaker” than in previous quarters, “have been fine” overall.
He instead said the company’s recent dip in average daily transactions (down 4.2% worldwide, 3.5% in the U.S.) was attributable to fewer customers making big-ticket purchases, like home furnishings or electronics, than during the “two years of outsized growth” Costco saw during the pandemic.
Despite the drop in large discretionary purchases, Costco’s sales of big-ticket items were still “better” than competitors, he claimed.
“Our negative is not as negative as others out there,” he told investors and analysts.
A representative of Costco did not return a request for further comment on the prices or buying habits at the meat counter in 2023.
Costco’s observations likely don’t come as any surprise to economists. The fluctuating prices of meat, in particular, have been the subject of analysis since the early days of the pandemic. After initial rise in prices, the cost of beef had actually dropped a bit by the late summer of 2022, in part due to reduced demand for premium cuts. But even when prices had leveled off, the rising cost of other grocery items may have continued to deter shoppers from their usual beef-purchasing habits.
Earlier this year, the U.S. Department of Agriculture also warned of a low cattle inventory for 2023 — the lowest in 61 years — caused in part by drought and smaller returns on investment, Nexstar’s KDVR reported in February.
“It’s probably going to get more expensive,” Curt Werner, a Colorado rancher who spoke with KDVR, said of beef prices. “The concern now is how with inflation in all areas being as high as it is where people quit eating beef on a large scale.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Inflation |
Massive taxpayer handouts and a money-printing spree helped stoke inflation in Britain and around the world, with years of interest rate pain now needed to get the crisis under control according to a top central banker.
Agustin Carstens, head of the Bank for International Settlements (BIS), said that governments and central banks went too far in dishing out cash during Covid.
The authorities now face a battle to bring inflation under control that could last until 2027 according to the institution, which is known as the central bank of central banks.
In comments that will be regarded as critical of the policies pursued by the Treasury and Bank of England after the pandemic struck, Mr Carstens said: “While understandable as the Covid crisis broke out, with the benefit of hindsight, it is now clear that the fiscal and monetary policy support was too large, too broad-based and too long-lasting.”
In Britain, the Bank of England cut interest rates to 0.1pc when lockdown was imposed and launched two vast waves of quantitative easing, printing money and pumping it into the economy by buying bonds.
This support only came to an end in December 2021, when policymakers were forced to raise rates to tackle rising inflation that they had initially dismissed as transitory.
Mr Carsten’s comments contradict claims by the Bank, made at a select committee hearing in May, that the idea quantitative easing caused double-digit inflation “is not well supported”.
So far the base rate has risen to 5p but inflation is still at 8.7pc, more than four times the Bank’s 2pc target.
Meanwhile. the Government borrowed sums never before seen outside of wartime, and gave handouts including higher benefits and the furlough scheme to employees who were paid to stay at home for much of the pandemic.
Borrowing has stayed high ever since, with a budget deficit of around £130bn expected this financial year, while the national debt is bigger than annual GDP for the first time since 1961.
Mr Carsten suggested that in the wake of the financial crisis, central bankers had been too quick to give the impression rock-bottom rates would last forever.
He said: “Low rates as far as the eye could see encouraged further debt expansion, public and private,.
“Moving forward, policy needs to be more realistic in its ambitions and more symmetrical over the business cycle. Buffers used in downturns must be rebuilt in recoveries. Unrealistic expectations that have emerged since the great financial crisis and Covid-19 pandemic about the degree and persistence of monetary and fiscal support need to be corrected.”
The financial chief said it was critical to crack down on inflation now before it becomes embedded in economies.
Warning that “a wage-price spiral could set in” as workers push for pay rises in the face of rising prices, he said: “Once an inflationary psychology sets in, it is hard to dislodge.”
The recent falls in inflation around the world have largely come from drops in energy prices and the end of Covid’s supply chain chaos, but underlying inflation, particularly in the services sector, has not gone away.
This could mean officials mistake the fall in energy prices for proof that they have conquered inflation, and so fail to raise interest rates far enough.
Mr Carstens said: “Central banks may think that they have done enough, only to find that they need to tighten further.”
If inflation refuses to fall, interest rates may need to stay high until as long as 2027, according to one economic scenario studied by BIS.
This comes with the added risk of financial crises in a world economy which has become used to low interest rates.
BIS said that the pensions crunch in the UK last autumn, the failure of Credit Suisse and the US banking collapses earlier this year are all early signs of the strains spreading through the financial system as markets adjust to higher rates.
The Treasury insisted it was committed to getting the deficit and rising prices under control.
A spokesman said: “We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy.
“We rightly spent billions to protect families and businesses from the worst impacts of the pandemic.
“But we won’t leave future generations with a tab they cannot repay so we have taken difficult decisions to balance the books and get debt falling.” | Inflation |
In today’s world, where financial decisions affect every aspect of our lives, mastering the basics of personal finance is essential to achieving long-term financial stability and security. This comprehensive guide will provide you with the knowledge and tools to take control of your money, make informed decisions, and build a solid financial foundation, regardless of your financial background or current financial situation.
Personal finance Basics includes managing income, expenses, savings, investments, and debt. It involves developing strategies to achieve your financial goals, whether that’s buying a home, saving for retirement, or just living comfortably within your means.
Managing your money effectively provides many benefits, including:
Financial Security: Achieving a stable financial situation reduces stress and anxiety, allowing you to focus on other aspects of your life.
Achieving financial goals: Personal finance enables you to set and achieve your financial goals, whether that’s saving for a down payment on a home or financing your retirement.
Responsible Debt Management: Understanding debt management strategies will help you avoid financial burdens and achieve debt freedom.
Financial Independence: Effective personal finance skills pave the way toward financial independence, allowing you to make financial decisions without relying on outside sources.
Basic steps in personal finance
Create a personal budget: A budget is a roadmap for your finances, providing an overview of your income, expenses, and financial goals.
Track your spending habits: Identifying your spending patterns helps you identify areas where you can cut back and allocate money more effectively.
Create a Financial Emergency Fund: An emergency fund acts as a safety net, providing financial support during unexpected expenses or emergencies.
Set Financial Goals: Set your short-term and long-term financial goals to provide direction and motivation for your financial journey.
Understanding and Managing Debt: Develop strategies to pay off debt efficiently and avoid accumulating more debt.
Explore investment options: Investing allows your money to grow over time, contributing to long-term financial stability.
Delve into specific areas of personal finance
Manage debt effectively
Create a debt repayment plan: Prioritize debts with high interest rates and create a realistic repayment plan.
Consider debt consolidation: Consolidate multiple debts into one loan with a lower interest rate to simplify the repayment process.
Explore Debt Relief Options: Research debt relief programs that may be right for your situation.
Investing for the future
Understand different investment instruments: Learn about different investment options, such as stocks, bonds, and mutual funds.
Consider your risk tolerance: Evaluate your comfort level with risk and choose investments that match your risk tolerance.
Seek Professional Guidance: Consult a financial advisor for personalized investment advice that fits your financial goals and risk profile.
Retirement planning
Determine your retirement needs: Estimate your living expenses in retirement and how much savings are needed to support your lifestyle.
Explore employer-sponsored retirement plans: Use employer-sponsored plans, such as a 401(k), which offer tax advantages.
Consider individual retirement accounts (IRAs): Open an IRA, such as a Roth IRA or traditional IRA, to supplement your retirement savings.
Buying a home
Assess your financial readiness: Determine your down payment and mortgage eligibility before you start your home search.
Shop for mortgages: Compare interest rates and terms of different lenders to secure the best mortgage deal.
Understanding Closing Costs: Factor in closing costs associated with homeownership, such as appraisal fees and title insurance.
Saving for college education
Explore tax-advantaged savings plans: Use tax-advantaged college savings plans, such as 529 plans, to grow your child’s education funds.
Consider Scholarships and Grants: Research grants and grants that may reduce your child’s college expenses.
Planning for Education Costs: Estimate college costs and create a savings plan to cover tuition and other expenses.
In conclusion, empowering yourself through personal finance is a lifelong journey that requires continuous learning, adaptation, and responsible decision-making. By adopting the principles of personal finance, you can empower yourself to take control of your money, achieve your financial goals, and secure a brighter financial future. | Personal Finance & Financial Education |
Selling pick 'n' mix, stationery and even garden tools: Wilko has styled itself as a budget UK homeware chain for more than 90 years.
With 400 stores across the UK, the chain is well-known for its affordable everyday items.
But the High Street stalwart has warned that it is on the brink of collapse, putting some 12,000 jobs at risk.
Alex, a communications professional who lives in Wimbledon in London, says he'd be "gutted" if Wilkos disappears altogether.
"It's where I get my pick 'n' mix before the cinema. I always find it great value, and really good on stuff like detergent," he said.
It is also seen as a one-stop-shop for Christmas paraphernalia, famed for its low-priced tinsel and wrapping paper.
The cut-price shop was founded in 1930 when JK Wilkinson opened his first store in Leicester. Then, it was called Wilkinson Cash stores and by 1939 a total of nine stores were opened.
It expanded across the Midlands initially and by the 1990s became one of Britain's fastest-growing retailers.
James, a construction professional, remembers the first Wilko store in Leeds: "My dad loved it - a brilliant location at the Arndale Centre in Headingley. It sold such a wide range of things, all in the same place."
He added: "At Christmas for example, the tinsel and wrapping paper are good value".
In 2012, Wilkinson began rebranding its stores as Wilko, after its own-brand products marketed under the Wilko name. By 2014, most stores had emblazoned the new name on storefronts.
Woolworths gap
Although the brand is beloved by Brits, Richard Lim, boss of the Retail Economics consultancy, said: "Sadly, sentiment doesn't ensure commercial success."
Stephen from Hebburn says it doesn't have everything he wants.
"We only go in for specific items. It's good for washing up powder. It's not what it was, I don't think," he said.
Wilko stepped into the High Street gap left by the collapse of Woolworths in late 2008, but has struggled over the last decade in part owing to more competition. The likes of Poundland and B&M have meant it has had to share its traditional customer base.
Wilko's sales were larger than B&M's a decade ago, but now they are one-third of its competitor's. Its sales have also fallen below Poundland, Home Bargains, and The Range.
Some commentators have pointed out that B&M and Home Bargains seem to have a lot of the same or very similar stuff at notably lower prices.
Laura Lambie, senior investment director at Investec, said: "They haven't really been at the cutting edge of making sure that their products are priced well to compete with the competition and that I think has affected the company itself."
Retail analyst Catherine Shuttleworth said the current cost of living crisis should have been the time for Wilko to shine. Soaring prices have meant that many shoppers are looking for a bargain, but she says its customers have been going to rivals instead.
Ms Shuttleworth added: "I don't think we'll see Wilko disappear from the High Street, because it's such a well-loved brand and shoppers hold it in high regard.
"But, it could look very different in the future."
Too many stores?
The discount chain has 408 stores across the UK, many of them in High Street locations in traditional town centres.
While these locations are convenient for shoppers without cars, since the pandemic there's been a shift to bigger retail parks and out-of-town options with more space.
But some customers feel Wilko is one of the last bastions holding on amidst a decline of the High Street.
A shopper from Kingston upon Thames told the BBC that she would be "very upset" if the town lost its Wilko store.
"I use it weekly for gardening items especially - but also toiletries and cleaning supplies.
"It's a bit like the old Woolworths and it would be a huge loss - not everyone likes online shopping," she said.
Charles Allen, retail analyst at Bloomberg Intelligence, says that the locations of Wilko stores have been a bit of a turn-off for some customers.
"B&M, for example, has thrived with a similar but perhaps slightly more relevant assortment that appeals to today's consumers.
"B&M has also moved many of its locations to retail parks which are more convenient for many consumers, especially when they are buying bulky goods."
Empty shelves
Wilko has already borrowed £40m from the restructuring specialist Hilco, cut jobs, rejigged its leadership team and sold off a distribution centre as it faced a cash squeeze after falling to a loss.
Shoppers have noticed gaps on shelves after Wilko struggled to pay suppliers and at least one credit insurer withdrew trade cover, prompting some companies to pause deliveries.
Richard Lim added: "It meant that they didn't have the cash to stump up for products... and it turns the retail business on its head."
In this instance it looks like the chain might not have had deep enough pockets to get through another tough trading period - after a pandemic and a cost of living crunch.
Are you affected by the issues raised in this story? Share your experience 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: | United Kingdom Business & Economics |
Buenos Aires, Argentina — Argentina’s Minister of Economy and presidential candidate, Sergio Massa, announced a series of economic relief measures to help senior citizens, workers and small companies to combat the spiraling inflation prior to the general elections next October 22.
Controversy sparked at the end of August after it was revealed that the relief package announced by Massa is expected to cost around USD $1.5 billion, representing around 0.8% of the country’s GDP. One of the measures is a ARS 60,000 bonus for around 5.5 million employees that, as it’s supposed to be mandatory for both the public and private sector, made some people pretty angry.
Fourteen provinces have already rejected the minister’s “suggestion” as their governors said they won’t pay the USD $82 bonus to their employees. Chubut, Mendoza, La Rioja and Santiago del Estero are the only provinces that so far have confirmed they will pay it, which, with the exception of Mendoza, are governed by Massa supporters.
According to some local media outlets, the announcement came as a surprise to most governors, as they suddenly had to finance an unexpected bonus in the middle of a turbulent devaluation prior to the elections. Some even asked the ministry for financial aid to pay for it, but the idea was rejected.
The Argentina Confederation of Medium Enterprises (CAME) criticized Massa’s decision. “They put us in an obligation that cannot be fulfilled, because the companies are at their limit with their working capital,” Salvador Femenia, spokesperson of CAME, told Clarín.
Adding to the claim, the Argentine Industrial Union (UIA) released a statement saying that “The increases by decree collide with the salary consensus already signed.” But clarified that nevertheless their members will pay the bonus.
In response to all the complaints, the director of the Federal Administration of Public Income (AFIP), Carlos Castagneto, said that, “When a measure is taken in favor of the population, the economically strong sectors of Argentina do not want to pay the bonuses or this fixed sum.”
The relief package also aims to provide bonuses to senior citizens and housekeepers; it will freeze the prices of some goods like oil until November and services like private health plans for ninety days; it will provide a line of credits for independent workers at a subsidized rate and it will launch a pre-financing program for exports, among many other things.
What led to this urgent decision?
The day after the surprising results in the primary elections in early August when Libertarian candidate Javier Milei shocked the country by securing first place in the vote, the government made the decision of devaluating the Argentine peso by around 20% in order to prevent a higher jump on the USD rate.
That day the informal USD rate also took a similar jump against the peso, from ARS 600 to ARS 685 per dollar, but kept on escalating during the week until it reached stability around the actual ARS 730. | Inflation |
Tata Technologies Buy, Sell Or Hold? Here's What Analysts Say
Tata Technologies shares rose up to 180% over the issue price on the exchanges, making it the best debut this year.
Tata Technologies Ltd.'s shares rose up to 180% over the issue price as they opened on the exchanges on Thursday, making it the best market debut in the Indian stock market.
The shares listed on the National Stock Exchange at Rs 1,200 apiece and on the BSE at Rs 1,199 per share, with a premium of 140% over its IPO price. The shares touched the high of Rs 1,400 apiece, with a jump of 180% and later pared gains to trade over 160% higher than the IPO price at Rs 1,303.15 per share at 2:45 p.m. The NSE Nifty 50 was trading 0.15% higher at that time.
The engineering services company allotted 1.58 crore shares at Rs 500 apiece to 67 anchor investors. SBI Multi Asset Allocation Fund secured the highest allocation of 4.30%. Other buyers include Fidelity International, Nippon Life India, BNP Paribas, HSBC, Kotak, DSP, Motilal Oswal, Edelweiss, Goldman Sachs and others.
Here is what analysts have to say about the debut.
'One Of The Finest ER&D Plays'
"Tata Tech is one of the finest ER&D plays catering to complete product value chain in automotive and now focusing on defence, aerospace, and energy," said Gurmeet Chadha, managing partner and chief investment officer, Complete Circle Wealth Solutions LLP.
"At 150% plus premium it trades at over 70 times earnings and bridges valuation gap with KPIT and Elxsi...I would hope to get better valuations in coming weeks/months to build a long-term position in my portfolio," he said.
'Long Term Investors Can Remain Invested'
Tata Technologies Ltd. is a long term play, according to Rajnath Yadav, research analyst at Choice Broking. At current market price of Rs 1,337, the stock is trading at a P/E multiple of 75.6 times, which seems to be in-line with peers, he said.
"Thus, short term investors are advised to book profit, while long term investors can remain invested. Long only investor's can consider for investment at this level."
'Bumper Listing'
"There are very few times in the equity market when such a bumper listing happens," said Sunny Agarwal, head of fundamental equity research, SBICAP Securities Ltd.
Retail investors who are brand new to the market and have received this IPO should book profits. However, if there is an investor whose portfolio is above Rs 10 lakh, then he can hold it, considering the good growth of the company, he said.
Investors who have not received the IPO should wait for a slight decline to make the purchase, according to Agarwal.
'Strong Debut'
"Tata Technologies made a strong debut, opening with a 160% increase over its IPO price of INR 500 per share. Despite its distinctive business model, solid fundamentals, and substantial growth potential, the current share price of Rs 1,304 seems to surpass these factors," said Vinit Bolinjkar, head of research at Ventura Securities Ltd.
He has also set a target price for the stock at Rs 955 per share, with a 26.7% downside. | Stocks Trading & Speculation |
(Bloomberg) -- A wave of dealmaking has come to Europe, and corporate boards aren’t sure what to do about it.
Most Read from Bloomberg
Listed European companies have received about $40 billion in takeover bids over the past three months, as everyone from Blackstone Inc. to Cinven hunts for bargains in the region’s depressed stock markets. In several cases, the target’s directors can’t decide whether minority shareholders are getting a good deal.
Online classifieds firm Adevinta ASA and medical diagnostics provider Synlab AG recently announced private equity offers which their boards believe don’t reflect their long-term value. Both of them took the unusual step of deciding not to make a formal recommendation on whether shareholders should accept, telling investors to take their own call.
“Target boards are quietly slipping away from issuing clear recommendations, opting for qualified (on-the-fence) positions,” said Josh Rosen, an analyst at United First Partners.
EBay Inc.-backed Adevinta said Nov. 21 its independent board members think the company can generate greater value over time than the cash buyout offer from Permira and Blackstone, valued at €14 billion ($15 billion) including debt. Still, the price is “within the range” of what’s fair and some risk-averse investors may want to sell, it said in a statement.
The private equity firms are touting the 54% premium being offered to Adevinta’s three-month average price before news of their interest emerged. Adevinta directors noted the company’s stock had been in a slump — making the premium look higher — and asked the suitors to increase their bid and modify its terms. Both requests were effectively refused.
After three months of negotiations, board members felt there were limited alternatives — given the deal is supported by major investors owning a combined 72% stake — and decided they’re compelled by Norwegian regulations to present the offer to shareholders. Adevinta’s chief executive officer is accepting the cash bid, while board members will roll over half their stock holdings and cash out the remainder.
MKP Advisors CEO Mark Kelly said it’s become more difficult for boards to reject takeover bids, since they know the higher-rate environment makes it harder for buyout firms to come back with a bump.
Tough Decisions
“Many boards can’t unequivocally say ‘yes’ when they feel their shares were previously being materially undervalued by the equity market,” Kelly said. “But at the same time, high-percentage-premia offers look attractive if shareholders aren’t backing them in the organic re-rating they desire.”
Munich-based Synlab said earlier this month its management and supervisory boards see a €2.2 billion bid from buyout firm Cinven as “inadequate” from a financial perspective, and two separate fairness opinions back up that view. Still, after the board held talks with other interested parties, Cinven’s offer was “the most attractive in the current environment,” and the German company said it appreciates Cinven’s support for its strategy.
Synlab’s management and supervisory boards ultimately abstained from making any recommendation and concluded that each investor “has to decide for him- or herself.” All of Synlab’s management board will tender their shares.
Given the economic climate and uncertainty, there’s a greater likelihood of a valuation gap between suitors and target companies, according to Nick Bryans, a London-based partner at law firm Baker McKenzie.
“For private equity suitors, many of the companies that are available now likely look cheap, but are probably cheap for a reason,” MKP’s Kelly said. “Many of the higher-quality companies that could be bought were bought when financing could be secured more cheaply and easily.”
Some deals are being challenged. In October, German automotive supplier Vitesco Technologies Group AG received a €3.6 billion takeover bid from another company backed by its billionaire major shareholders. David Einhorn’s Greenlight Capital has called on Vitesco to seek an improved bid or pursue other alternatives.
Investor Concern
Vitesco’s management and supervisory boards have made multiple public statements acknowledging some shareholders view the offer as too low. They’ve also vowed to consider how to protect Vitesco’s future success within a larger corporate group.
Meanwhile, an independent committee evaluating BP Plc and Adnoc’s $2 billion offer for 50% of NewMed Energy has asked the oil and gas giants to substantially increase their bid, Bloomberg News reported in October.
As market conditions continue to deteriorate, more situations could emerge where target boards find it difficult to make a clear recommendation to minority holders.
European payments giant Nexi SpA, whose shares are down more than 60% from their peak, is getting takeover interest from private equity firms including CVC Capital Partners. Fund distribution platform Allfunds Group Plc has started gauging takeover interest from buyout funds, Bloomberg News reported this month. Its shares are down nearly 70% since late 2021.
--With assistance from Kwaku Gyasi.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Europe Business & Economics |
Operating from 2016 until 2018, the Flawless IPTV service copied subscription TV broadcasts from official (and unofficial) sources and then restreamed that content to tens of thousands of customers, at a dramatically cut down price.
For many UK football fans, Flawless granted access to the sport they love, at a price they could afford. Others viewed the service quite differently.
From the Premier League’s perspective, Flawless was a fraudulent, criminal enterprise that stole potential revenue from the country’s leading football clubs. Through its illegal participation in the subscription TV market, Flawless had a direct impact on Sky and Virgin Media subscription package sales.
More broadly, Flawless undermined the Premier League’s right to offer exclusive broadcasting licenses in the UK and that had the potential to affect how much broadcasters were prepared to pay for those licenses.
Today’s Sentencing Hearing
Following an extraordinarily deep and costly investigation, and a five-year Premier League private prosecution, five men behind the UK’s largest-ever piracy service were sentenced today at Chesterfield Justice Centre.
Mark Gould, Steven Gordon, Peter Jolley, Christopher Felvus and William Brown were sentenced to more than 30 years in prison combined. A sixth defendant, Zak Smith, did not appear in court.
In total, Flawless operated for just 22 months but still managed to generate an estimated £4.6 million in revenue. £3.7 million of that was profit, split very unequally between those sent to prison today.
Mark Gould, 36, was the driving force behind Flawless. His share of the profit was around £1.7 million. Today he received an unprecedented 11-year sentence on two counts of conspiracy to defraud and contempt of court.
Steven Gordon’s cut was significant too, roughly £1 million according to the prosecution. Two counts of conspiracy to defraud and contempt of court led to a sentence of five years and two months.
Peter Jolley’s share of the profit was reported as £773,000. He received a sentence of five years and two months, on two counts of conspiracy to defraud and money laundering.
Christopher Felvus’ share was a relatively modest £164,500. Two counts of conspiracy to defraud earned him a sentence of three years and 11 months.
William Brown made just £15,000 but after pleading not guilty and then losing his case, today he was sentenced to four years and nine months, on two counts of conspiracy to defraud.
Zak Smith appears to have made less than £5,000 from Flawless. He did not appear in court today and a warrant was issued for his arrest.
What follows are just some of the events that led to the men being sentenced today, including why Flawless was so successful, and how it all fell apart.
Flawless Won Fans By Exploiting a Restricted Market, Fraudulently
Top-tier football matches in England take place in the Premier League, a league operated by a company of the same name, owned by the clubs that play in it.
Premier League broadcasting rights cost billions, so when broadcasters like Sky and Virgin hand over their share of the cash for exclusive local rights, recouping that cash from UK football fans is reflected in costly subscription package prices.
For cash-strapped football fans in the UK, pirate IPTV providers represent choice and affordability in a market where very little exists. Subscriptions available at a fraction of the official cost are a huge draw but the elephant in the room is unavoidable.
Pirate IPTV services cost less and offer more, but that’s only because they pay nothing to rightsholders like the Premier League, while paying nothing to broadcasters whose transmissions they copy.
The end result of an aggressive Premier League private prosecution spanning five years, the sentences handed down today show that undermining corporations worth billions has the potential to end in complete catastrophe for IPTV operators. It also ends badly for football fans and the public in general.
While this was a private prosecution, the Premier League – and by extension Premier League clubs – will now recoup the costs of the investigation and prosecution from the Crown, meaning that tax paying football fans and taxpayers in general will pick up an incredibly large bill.
Flawless IPTV
Launched around August 2016, Flawless IPTV began as a three-way partnership consisting of Mark Gould, Steven Gordon, and Peter Jolley, all of whom had parted ways with another IPTV provider, known online as Overlords. Christopher Felvus, who was also active in the pirate IPTV scene, made up the quartet and for Flawless, it was game on.
In common with licensed services, pirate IPTV providers have broadly two options for reaching the market. Selling subscriptions directly to consumers makes the most money on paper but also causes the most headaches. Selling to customers via resellers makes considerably less, but in many cases a 40% cut may be considered worth it.
Flawless decided to cover both angles by selling direct from its own website and social medias, and also indirectly via a network of resellers.
With a heavy focus on Premier League content, particularly matches broadcast during the UK’s ‘3pm blackout’, Flawless and success went hand in hand. A big hit with football fans, the IPTV service went from strength to strength with a comprehensive, mostly reliable product, for just £10 per month. For a while, everything went broadly to plan.
Numerous behind-the-scenes dramas, some worthy of a TV series in their own right, kept the business on its toes in the months to come. Yet after signing up thousands of customers with no notable issues, a subscription purchased in 2017 sparked a massive criminal investigation and marked the beginning of the end for the entire service.
Charity Received Complaints
Crimestoppers, a UK charity famous for its anonymous tip lines, is said to have received complaints about Flawless in the summer of 2017. Instead of contacting the police, Crimestoppers alerted the Federation Against Copyright Theft (FACT) which led to a covert purchase of a Flawless subscription in October of the same year.
After concluding that Flawless offered streams broadcast by Sky and Virgin, among others, FACT leveraged its connections in government, law enforcement agencies, and civil authorities, calling for action to defend the Premier League’s rights.
A report to GAIN, the Government Agency Intelligence Network, led to the allocation of significant public resources. With the support of a dedicated financial investigator, a senior Trading Standards officer took over the investigation and a little over six months later, Flawless was all but finished.
Mark Gould Arrested First, Others follow
In May 2018, search warrants were executed at two addresses in London. Gould was arrested at his home in Greenwich, an apartment on the river recently purchased for £600,000 – cash.
Around a month later the authorities arrested Steven Gordon and Peter Jolley, and three weeks after that Christopher Felvus was detained. William Brown and Zak Smith were arrested early August 2018 but it would be another five months before the case was submitted to the court, and another three years before today’s sentencing.
Profitable Business, But Not For All
In total, Flawless operated for just 22 months but still managed to generate an estimated £4.6 million in revenue, £3.7 million of that in profit. As highlighted earlier, Gould is said to have made most from the operation, around £1.7 million.
William Brown made almost nothing from Flawless yet today received a sentence roughly on par with that handed to Steven Gordon, who made more than £1 million from the operation and was also held in contempt of court. In common with all of the defendants sentenced today, Brown had no previous convictions.
Warrant Issued For Arrest of Zak Smith
This curious anomaly leads us to Zak Smith, his apparent absence from court today, and a warrant for his arrest. Smith made roughly three times less than Brown, around £5,000, but was expected to receive a similar sentence today. The reasons for that are extraordinary.
The details of Smith’s involvement aren’t just interesting, they are arguably worthy of a Netflix drama series in their own right. Smith worked at anti-piracy company Friend MTS, known for working with the Premier League to ensure that pirate services are blocked by ISPs during match times.
This type of blocking is authorized by High Court injunction, the finer details of which are closely guarded secrets. Or at least that’s the usual plan. In some cases blocking programs appear suddenly ineffective, with services like Flawless operating broadly as usual, with Flawless competitors not doing anywhere near as well.
We’ll return to that story very soon and reveal how the dismantling of Flawless was interpreted as a prompt to launch more IPTV services that made even more money. | United Kingdom Business & Economics |
Retail staff are being trained to tackle violence from shoplifters after an increase in reports of the crime.
The Welsh Retail Consortium (WRC) said there was a more than a 30% rise in violence and abuse towards staff in Cardiff between 2021 and 2022.
John Lewis is one company offering "de-escalation" training, with the WRC saying stores need more support from police.
The Home Office said it had invested a record amount into policing.
The British Retail Consortium (BRC), which works with the WRC representing retailers said thefts across the sector in England and Wales rose by 26% in 2022.
In March, police forces in England, Wales and Northern Ireland recorded almost 33,000 incidents of shoplifting, while reports increased by 68% in Cardiff in the past year.
Meanwhile in Pembrokeshire, one shop has invested £15,000 in anti-theft security.
Alcohol, perfumes, cosmetics and meat were among the most stolen items, with prolific repeat offenders, organised gangs and the cost of living blamed.
In John Lewis, one of the UK's biggest retailers, staff have been given de-escalation training, which aims to help predict when a situation may become violent.
Some staff have been given bodycams to help catch offenders.
Adrian Palmer who works in Cardiff said interactions were becoming increasingly violent.
He said: "This happens fairly often, more often than you would like. I wouldn't say daily, but we're probably not far off."
He said shoplifters had also become more brazen and he once witnessed a man take a bin bag out of his pocket, fill it with goods and attempt to walk out.
"I was lucky enough that we also had a PCSO in branch at the time, so we detained him," he said.
Head of security Nicki Juniper said John Lewis was "investing heavily in training" for security and shop staff.
"Should they want to take part in some de-escalation training they'd be able to handle an incident should it arise," she said.
They are also doing training known as "love bombing", which uses good customer service to deter abuse.
"It has proven very successful in reducing levels of theft," she said, but added prolific offenders needed to face consequences.
The Association of Convenience Stores said the problem was UK-wide, with 1.1 million thefts in their stores in the past year.
Chief executive James Lowman said that was "probably an underestimate" and thefts were at "highest level it's ever been".
"Around 70% of staff say they've been verbally abused on the job, which is an extraordinary high number but sadly not a great surprise," he said.
He added he suspected repeat offenders were also committing crime elsewhere but said he could see "how the police and retailers see that as just too big a problem to tackle".
But he said focusing on these individuals "might bring real benefits to our sector, but perhaps hopefully to the wider community".
Fiona Malone, from Tenby Stores in Pembrokeshire, said she did not think the police took enough notice of thefts under £50 - but these added up over time.
The shop has invested £15,000 in new cameras and security technology this year, including headsets.
"Although some of the things stolen are things that are nice to have, such as wine and vapes, I think people are struggling," she said.
"I think it is something the government really need to think about."
She said police have a difficult job and have needed to prioritise high-value crimes but due to a lack of consequence, the thieves keep coming back.
"Losing money through theft is a huge challenge for us because we are an independent business and what people don't understand is everything that gets stolen comes out of things I can give to my children."
Sara Jones, head of the WRC said the losses were costing shops billions of pounds a year across UK but added that effect may soon be felt by customers.
She said the WRC planned to write to South Wales Police about how to deal with retail crime in Cardiff.
She said: "At the moment only 7% of retail crime gets prosecuted and we need to see that figure significantly increase.
"We understand the challenges and we are also asking the Home Office to look at some of the legislation that's in place like the Police, Crime, Sentencing and Courts Act.
"We want that to be bolstered, better reporting around the data in that, which will hopefully help our retailers in the long run."
She said retailers wanted to prioritise retail crime while protecting staff and customers.
"Over 40% of colleagues fear for their safety when they're in the workplace and that is a concern for all of us," she said.
A Home Office spokeswoman said: "Shoplifting strikes at the heart of local communities and we expect police forces to take this seriously - deterring this kind of crime but also catching more offenders."
"We have delivered more police officers in England and Wales than ever before and invested a record of up to £17.6bn in 2023/24 into policing, including for more visible patrols in our neighbourhoods and better security such as CCTV and alarm systems."
South Wales Police has been asked to comment. | Consumer & Retail |
Citi Is In Talks To Start New Private Credit Strategy By Early 2024
The initiative would complement the bank’s existing broadly syndicated leveraged finance business.
(Bloomberg) -- Citigroup Inc. is in discussions to start a new direct-lending strategy by early January, the latest in a series of bank efforts to gain a foothold in the booming $1.6 trillion private credit market.
The initiative would complement the bank’s existing broadly syndicated leveraged finance business, according to a person with knowledge of the matter. It could include teaming up with one or more outside partners that would provide capital for loans, which the bank would originate, the person said, asking not to be named because the details are private.
Citigroup may or may not use its balance sheet to win deals, the person added. Discussions are ongoing and details could still change.
A representative for Citigroup declined to comment.
The push follows similar moves this year by Wells Fargo & Co., Barclays Plc and Societe Generale SA to break into the fast-growing market for private debt, where risky borrowers bypass the high-yield bond and leveraged loan markets to get financing. Its emergence has threatened a key profit engine for traditional lenders, which until recent years generated roughly a third of their investment-banking revenue from arranging bond and loan sales.
Citigroup’s aim is to be able to offer a potential borrower a high-yield bond, leveraged loan, or private credit option, which the company, or their private equity owner, could then choose depending on their needs, the person said. The bank wants to be ready for a fresh wave of buyout deals as private equity firms eventually have to sell existing portfolio companies to pay back investors, the person said.
Connecting customers to third-party debt financing would allow Citigroup to still earn fees from the transactions, ensure it maintains a relationship with the borrower, and also help the bank sell ancillary services such as cash management or hedging strategies, the person added.
--With assistance from Josyana Joshua and Sri Taylor.
©2023 Bloomberg L.P. | Banking & Finance |
Former President Trump was fined $10,000 on Wednesday for violating the partial gag order imposed by New York Judge Arthur Engoron in the civil trial stemming from New York Attorney General Letitia James’ lawsuit against him and the Trump Organization.
Engoron imposed a partial gag order earlier this month, blocking all parties from making derogatory statements about his court staff. Engoron fined Trump on Friday $5,000 for violating the order on social media, and threatened imprisonment if further violations were committed.
On Wednesday, Engoron asked that the former president take the stand during the civil trial, and discussed statements Trump made to the press earlier in the day about "a person who’s very partisan sitting alongside" the judge.
When Engoron asked who Trump was referring to, the former president replied: "You and Cohen." Trump was referring to Engoron and Michael Cohen, his former lawyer who took the stand and testified against him on Tuesday.
The judge pressed him again, and asked if he was sure he was not referring to his clerk.
"Yes I’m sure," Trump said.
Engoron said that, in the past, Trump had criticized and referred to his clerk.
"I think she’s very unfair," Trump said, adding that she is "biased against us."
But Engoron said his principal clerk "is very close to me," and ruled, instead, that Trump was referring to his law clerk.
Engoron fined Trump $10,000, which he said is, "on the liberal side."
Trump attorneys argued against the fine, saying it was unusual to have a law clerk on the bench with the judge. Attorney Alina Habba calling it "inappropriate."
Habba said the clerk rolled her eyes, to which Habba said: "The influence from your bench is inappropriate."
Engoron fired back saying: "I make the final decisions. I value input from both of my law clerks."
In regard to the clerks sitting next to him, he says, "that’s how I do things."
Engoron ultimately ruled that Trump was referring to his clerk, and fined him $10,000.
The partial gag order was imposed earlier this month after Trump posted on his Truth Social account saying that Engoron's law clerk had a relationship with Senate Majority Leader Chuck Schumer, D-N.Y. The post also contained a photo. Trump added that because of that, the case "should be dismissed immediately."
Trump told Engoron he had deleted the post, but the judge discovered a copy of the post remained on Trump's campaign website. Engoron fined Trump $5,000 on Friday.
"Make no mistake: future violations, whether intentional or unintentional, will subject the violator to far more severe sanctions, which may include, but are not limited to, steeper financial penalties, holding Donald Trump in contempt of court, and possibly imprisoning him pursuant to New York Judiciary Law," Engoron said in a filing Friday.
The trial comes after James, a Democrat, brought a lawsuit against Trump last year alleging he and his company misled banks and others about the value of his assets. James claimed Donald Jr., Ivanka, and Eric, as well as his associates and businesses, committed "numerous acts of fraud and misrepresentation" on their financial statements.
Engoron, last month, ruled that Trump and the Trump Organization committed fraud while building his real estate empire by deceiving banks, insurers and others by overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.
Engoron’s ruling came after James sued Trump, his children and the Trump Organization, alleging that the former president "inflated his net worth by billions of dollars," and said his children helped him to do so. | Real Estate & Housing |
Banks face fines if they fail to provide free access to cash withdrawals for consumers and businesses, the Treasury has confirmed.
A new policy will state that free cash withdrawals and deposits must be available within one mile for people living in urban areas.
In rural areas, where there are concerns over "cash deserts", the maximum distance is three miles.
The move is unlikely to halt branch closures and the decline in cash use.
The Treasury said the distances were chosen to maintain the current level of coverage of free access to cash, through ATMs or face-to-face services. Those limits could be extended if cash use declines in the future.
Under the new guidance, if a service such as an ATM or branch is withdrawn and a replacement service is needed in the area, then this should be done before the closure takes place.
A voluntary arrangement is currently in place which means every High Street should have free access to cash within 1km. The detail of the new policy will come under the microscope, including the starting point and practicalities of the distances that have been stipulated.
Worries for vulnerable
An average of more than 50 UK bank branches have closed each month since 2015. Campaigners fear some retailers could stop accepting cash if it becomes too burdensome to process.
Cash remains a necessity for millions of people, research has found, with the elderly and those with disabilities among those likely to struggle. Branches have been more likely to close in disadvantaged areas.
Banks have pointed to the large reduction in branch use - a trend accelerated by the Covid pandemic - and the popularity of managing money via smartphones, as good reason for diluting their branch network.
But a recent survey by Age UK suggested that, among those who were uncomfortable about digital banking, the key concerns were fraud and scams, a lack of trust in online banking services, and a lack of computer skills.
Andrew Griffith, economic secretary to the Treasury, said that "cash is here to stay".
"People shouldn't have to trek for hours to withdraw a tenner to put in someone's birthday card - nor should businesses have to travel large distances to deposit cash takings," he said.
"These are measures which benefit everyone who uses cash but particularly those living in rural areas, the elderly and those with disabilities."
The City watchdog, the Financial Conduct Authority (FCA), will be given the power to police the provision of cash access, including the power to order fines. Legislation was voted through earlier in the summer.
"The government's new law has made it a legal requirement for the banking industry to protect the current levels of cash access and cash deposits, and to support the specific needs of different communities," said Natalie Ceeney, who authored a major report on the issue.
"That doesn't mean that nothing will change, but it does mean that where services plan to close, there need to be appropriate alternatives in place before they do so," Ms Ceeney added.
Among the alternatives are bank hubs, which are spaces shared by several different High Street banks and are meant to help communities that have seen all their bank branches close.
So far, only seven permanent hubs have opened in various areas across the UK. Another 10 leases have been signed, and organisers suggest more than 100 will be open over the next few years - a number dwarfed by the amount of branch closures.
"The Financial Conduct Authority must make use of its new powers to ensure banks meet their obligations and stand ready to direct them to address any gaps," said Jenny Ross, of Which? - the consumer group that has campaigned on the issue. | Banking & Finance |
It's not something your friends are likely to be talking about down the pub but in the City there's something fund managers and investors are increasingly worried about.
Bond markets.
They are falling and have been for some time.
It is a flashing warning sign about the state of the UK and US economies and may affect the costs of our loans and mortgages.
So how worried should we be?
What is a bond?
Governments borrow money by selling financial products called bonds. A bond is a promise to pay money in the future. Most require the borrower to make regular interest payments over the bond's lifetime.
UK government bonds - known as gilts - are normally considered very safe investments, with little risk the money will not be repaid. US government bonds - known as Treasuries - are also considered very safe.
What's going on in the bond market?
Over the last year or so, there has been a sell-off of government bonds on global markets that is having wider ramifications.
It comes as central banks warn that inflation - the rate at which prices rise - is likely to stay higher for longer than previously expected.
Since 2021, central banks have repeatedly put up interest rates to try to tame inflation, lifting them from close to zero to where they are now: 5.25% in the UK and 5.25%-5.50% in the US.
And when official rates rise, the yields on government bonds also tend to go up to attract buyers, driving up borrowing costs for governments and consumers in the process.
Benchmark 10-year US Treasury yields surged to 4.91% in mid-October - their highest level since the financial crisis of 2007. In the UK, 30-year gilt yields hit a 25-year high of 5.115% earlier in the month, with similar moves seen elsewhere in Europe.
As yields rise, investors tend to dump the older bonds they already hold in favour of newly issued ones that pay higher rates.
As a result, bond prices tend to fall, which affects anyone who owns these assets - hence the flashing lights we are seeing in the markets.
How could this affect me?
Government bond yields are used as a guide for setting the rates on everyday loans and mortgages, which have shot up over the last few years.
Average US mortgage rates hit a two-decade high of 8% last month, squeezing borrowers. In the UK, the rate on an average five-year fixed residential deal was 5.87% as on 31 October, down slightly from levels seen earlier this year but still high compared with a few years ago.
Rising bond yields are also putting pressure on governments.
That's because the higher yields go, the more governments have to pay back in debt interest, which may leave them with less to spend on other things.
It is likely to impact whichever party wins the UK general election tipped for next year, says Simon French, a managing director at investment bank Panmure Gordon.
"The higher bond rates go, the more interest that has to be repaid, the less there is for public services such as health and education," he says.
Could higher borrowing costs push countries over the edge?
That is highly unlikely, says Russ Mould, investment director at AJ Bell. "The UK hasn't defaulted on its debts since 1672 and the US has never defaulted."
However, he says investors are feeling slightly more nervous about the "manageability" of these countries' debts after years of heavy government spending on things like the 2007-08 financial crisis, the Covid pandemic and the Ukraine war.
America's total debt stands at $33.6 trillion (£27.6tn) - up from $9tn in 2007. In the UK it's risen to £2.5tn from £700bn over that time.
The more debt interest countries have to pay, the harder, theoretically, it may be for them to repay what they owe investors.
What is the risk to investors?
The immediate risk is from the sharp fall in bond prices, which is bad news for investors and companies that hold these normally stable assets as collateral on their balance sheets.
Mr French expects we'll see more "unanticipated fallout" as the bond sell-off continues but it won't become a systemic risk to the global economy.
"We are certainly not in the territory of 2008-09 or at the start of the pandemic when there was proper fear out there. But there is worry."
What about the wider economy?
The Bank of England and the US Federal Reserve both think a recession can be avoided in their respective countries.
But Mr Mould doesn't rule it out, adding that markets fear "we will end up with painful government debt or painful inflation" over the next few years.
The hope, he says, is that the UK and US central banks will steer their respective economies towards a "soft landing" by bringing down inflation without hurting the economy.
"They got us through Covid and the energy price shock, and markets are hoping they can do it again."
The big unknown is whether rising geopolitical tensions will spill over and make a bad situation worse.
Russia's invasion of Ukraine hit economies around the world as global energy prices spiked and governments were forced to intervene to help households.
Now, Middle East tensions are rising as Israel expands ground operations in Gaza following the 7 October Hamas attacks that killed 1,400 Israelis with 239 people kidnapped as hostages. Thousands of Palestinians have also been killed.
Meanwhile, an attack on Taiwan by China remains a real possibility.
Such events could cause even more economic disruption. | Bonds Trading & Speculation |
NomuPay — the payments startup that was formed out of some of the healthier pieces of the dramatically failed fintech Wirecard — has made an acquisition as it continues on its trajectory of better economies of scale. It has picked up Total Processing, a startup out of Manchester that builds payment processing solutions for functions like recurring payments, risk management, PCI (data security) compliance and payment integrations.
NomuPay is paying around $35 million for Total Processing, and says that the total value of the company is now $135 million.
For some context on that number, Total Processing appears not to have disclosed any outside funding since being founded in 2015.
Dublin-based NomuPay announced earlier this year that it had raised $53.6 million in funding, and PitchBook estimated that the startup was valued at just under $172 million in September 2022. NomuPay says PitchBook’s estimate is inaccurate and that “valuation has consistently been on the up,” according to NomuPay’s CEO Peter Burridge.
That is an important point, given how many down-rounds and write downs there have been in the tech industry in the last year.
NomuPay up to now has been focusing on acquiring or buying licenses to manage payments in Southeast Asia, Europe, Turkey and longer term the Middle East. But Burridge told TechCrunch that he sees Total Processing as an opportunity to add in more tooling around that basic payments feature, as well as customer services for its business users.
“No one drives a car without a spare tire,” he said of the deal and how it widens the funnel for what NomuPay can offer to its customers. “The value proposition is that Total Processing has this tech stack that is all about solving merchant pain. And it’s a consultative sell as well. You will never get an answer from a real person at Stripe or Adyen. You don’t talk to anyone.”
The plan will be to continue scaling Total Processing now to expand into more markets, starting with Hong Kong and Southeast Asia. Total Processing itself was most active in the UK and United Arab Emirates and so NomuPay will be leveraging that to expand its own footprint. Neither company has disclosed how many customers they have, nor turnover (that is, revenues).
M&A is coming up as a very viable option for a number of startups that might have interesting underlying business and technology, but are struggling to close rounds at terms that make sense to them yet might need more runway to operate or grow. It’s a buyers and backers market right now.
Consolidation also has been a longstanding theme in fintech that precedes the current funding downturn. Margins remain thin for many digital payments services — not least because of the many stakeholders involved looking for a cut — and so combining forces for better economies of scale over wider geographies, or by offering a fuller stack of services to customers, is a no-brainer. | Banking & Finance |
Emudhra Q2 Review - Strong Show Led By Expansion Of The Enterprise Business In Foreign Markets: Yes Securities
The demand environment remains strong led by rising digitalisation across sectors.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Yes Securities Report
Emudhra Ltd. reported inline financial performance for the quarter. The sequential revenue growth and Ebitda margin for the quarter were as per estimates. It reported sequential revenue growth of 20.8% QoQ, led by Trust Services (up 48.2% QoQ) and Enterprise solutions (up 10.6% QoQ).
The Enterprise segment continues to maintain robust growth trajectory led by strong traction in Middle East, the U.S. and Asia Pacific. The international revenue mix continues to increase led by the expansion of enterprise business in foreign markets.
The pricing pressure in the trust services business is largely over and the segment has returned to normal growth trajectory. Ebitda margin for the quarter declined by 47 basis points QoQ to 29.3% for the quarter on account of higher operational expenses incurred in expanding its presence in the foreign markets of the U.S. and Europe.
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 |
Some taxpayers may get a break next year on their taxes thanks to the annual inflation adjustment of tax brackets set by the IRS.
The tax agency hasn't yet announced the new brackets for 2024, but that is likely to come within the next days or weeks, according to Steve Grodnitzky of Bloomberg Tax, which has issued its own forecast for the new tax brackets as well as other policies that are adjusted for higher prices.
The IRS relies on a formula based on the consumer price index — which tracks a basket of goods and services typically bought by consumers — to adjust many tax policies each year, Grodnitzky noted. Last year, for instance, tax brackets weredue to the highest inflation in 40 years. Because inflation has eased this year, the annual boost is likely to be more moderate, with brackets rising about 5.4%,
Setting higher thresholds can help avoid so-called "bracket creep," or when workers are pushed into higher tax brackets due to the impact of cost-of-living adjustments to offset inflation, without a change in their standard of living. It can also help taxpayers shave some of what they owe to the IRS if more of their income falls into a lower bracket as a result of the higher thresholds.
"For the income tax brackets, the dollar amounts have now increased, so for 2023, the lowest bracket for single people is those making up to $22,000, but now it's up to $23,200, so it basically changes how much you are going to be taxed," Grodnitzky said.
New tax bracket limits
The tax brackets for the 2024 tax year, set by the 2017 Tax Cuts and Jobs Act, aren't changing, but the cutoffs for each band of taxation will shift higher. The tax rates will remain 10%, 12%, 22%, 24%, 32%, 35% and 37%.
But it will take more income to reach each higher band of taxation. For instance, a single taxpayer who earns $100,000 in 2024 will have a top marginal tax rate of 24%, whereas in 2023, their top marginal tax rate is 32%.
Tax brackets indicate the percentage you'll pay in taxes on each portion of your income. A common misconception is that the highest rate is what you'll pay on all of your income, but that isn't the case.
Take again the situation of a single taxpayer who earns $100,000. In 2023, she will take a standard deduction of $14,600, reducing her taxable income to $85,400. This year, she'll pay:
- 10% tax on her first $11,600 of income, or $1,160 in taxes
- 12% tax on income from $11,600 to $47,150, or $4,266
- 22% tax on the portion of income from $44,735 up to her taxable income of $85,400, or $8,946.30
Together, she'll pay the IRS $14,372.30 in taxes, which amounts to an effective tax rate of 16.8% on her taxable income, even though her top marginal rate is 22%.
Standard deduction
Another important change that could help lower taxes for some is the adjustment to the standard deduction, which is relied on by 86% of taxpayers. The standard deduction is used by people who don't itemize their taxes, and it reduces the amount of income you must pay taxes on.
Here are the new 2024 standard deduction amounts, according to Bloomberg Tax's forecast:
- Single taxpayers will have a standard deduction of $14,600, up from $13,850 this year
- Married couples filing jointly will see theirs rise to $29,200, up from $27,700
- Heads of households will have a new standard deduction of $21,900, up from $20,800.
for more features. | Inflation |
(Bloomberg) -- Didi Global Inc. blamed a “low-level” software glitch for a cascading outage that disrupted its car-hailing service across China this week, a major blow to a company seeking to stage a comeback and relist in Hong Kong.
Most Read from Bloomberg
Didi determined after an initial investigation that a “blockage” in software systems triggered the outage, which spurred complaints across social media from rush-hour commuters who claimed they lost pay after reporting late for work. Millions of Chinese depend on the service to navigate traffic daily, particularly in notoriously snarled cities like Beijing and Shanghai.
The incident is embarrassing for a company seeking to climb out of troughs it plumbed during China’s crackdown on the powerful tech sector. Known as China’s answer to Uber Technologies Inc., the firm this month posted its first profit since 2021, when regulators launched a probe into its data management and eventually forced it to delist from New York’s stock exchange. Didi is now trying to regain market share ahead of a relisting in Hong Kong in 2024.
Read More: Didi Is Said to Plan 2024 Hong Kong Listing in Comeback Bid
It’s working to stabilize its service to prevent a recurrence of this week’s outages, the company said in a statement. It again apologized for the disruption, which media including the South China Morning Post reported affected commuters from as far afield as southwestern Guizhou province. Users encountered glitches including stalled turn-by-turn navigation systems and inability to confirm journeys or rides, the SCMP said.
“We’re doing our best to make sure this never happens again,” Didi said on its official Weibo account. The downtime wasn’t the result of a cyberattack, it added.
Once hailed as the homegrown startup that defeated and drove Uber out of China, Didi’s downfall during Beijing’s tech crackdown of 2021 and 2022 encapsulates the uncertainty of private-sector entrepreneurship during Xi Jinping’s administration.
Its comeback and eventual re-listing could offer a signal of Beijing’s support for the tech sector, which is needed more than ever to revive a sputtering Chinese economy. It may restore some confidence after years of regulatory scrutiny humbled corporate leaders from Tencent Holdings Ltd. to Alibaba Group Holding Ltd., both Didi backers.
Read More: Didi Posts First Profit Since 2021 Ahead of Landmark HK IPO
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Asia Business & Economics |
- Kroger missed fiscal second-quarter revenue expectations as inflation cools.
- For grocers like Kroger, inflation has contributed to higher overall sales as shoppers pay more for many items that they buy.
- CFO Gary Millerchip said the grocer expects inflation to "continue to decelerate" and expects a tougher backdrop for consumers in the months ahead.
Good news for consumers is bad news for Kroger.
As prices that shoppers pay for groceries stabilize or fall, the supermarket operator's sales are sagging.
On Friday, the company posted fiscal second-quarter sales that missed Wall Street's expectations. The company stuck with its full-year outlook, but said the slowing rate of inflation will mean less revenue.
Here's how the grocer did in the three-month period that ended Aug. 12 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:
- Earnings per share: 96 cents adjusted vs. 91 cents expected
- Revenue: $33.85 billion vs. $34.13 billion expected
The company posted a net loss of $180 million, or 25 cents per share, compared with a gain of $731 million, or $1 per share, in the year-ago period.
One factor was the company's settlement of the majority of claims that it fueled the opioid crisis. The company agreed to pay $1.2 billion to U.S. states, local governments and Native American tribes to settle the majority of claims that it fueled the epidemic. Its quarter included a $1.4 billion charge, translating to a $1.54 loss per share, for that settlement.
Net sales fell from $34.64 billion in the year-ago period.
For retailers, inflation has been a mixed bag. On the one hand, it has contributed to higher overall sales as shoppers pay more for many items that they buy.
Yet it has hurt the volume of merchandise sold, as customers think twice about buying — especially when it comes to adding discretionary purchases to their shopping carts. Target and Walmart, in particular, have spoken about customers buying food and essentials, but less of the other stuff, at their big-box stores.
At Kroger locations, the slowdown in discretionary merchandise has been less of a factor since everyday items like groceries dominate the shelves. But it has created risk that customers could turn to retailers known for lower food prices, such as Walmart, Aldi or Dollar General. Kroger is made up of about two dozen grocery chains, including Fred Meyer, Ralphs and King Soopers, along with its namesake stores.
Home Depot has also seen the strange dynamic play out as inflation cools. Lumber prices, which shot up in price about two years ago, have come down and made its overall sales look lower. Yet it has also felt the pinch from consumers buying fewer big-ticket items like appliances as they are forced to spend more for basics like food and housing.
In the fiscal second quarter, Kroger's identical sales without fuel grew by 1%, slightly lower than the 1.2% gain expected by analysts, according to StreetAccount. The industry metric takes out factors like store openings and closures.
Kroger reaffirmed its full-year guidance, saying it expects identical sales excluding fuel to range between 1% and 2%. That includes the impact of ending an agreement with Express Scripts, a pharmacy benefit management company. It said adjusted net earnings are expected to range between $4.45 and $4.60 per share, including the benefit from having an extra week in the year.
Even though Kroger did not change its outlook, Chief Financial Officer Gary Millerchip said Kroger expects identical sales will be at the low end of its annual range, and slightly negative in the back half of the year when excluding fuel.
In an earnings release, he said the grocer expects inflation to "continue to decelerate" and expects a tougher backdrop for consumers in the months ahead.
The prices that consumers pay for food at home aren't rising as much as they were before, but were still up 3.6% year over year in July, according to consumer price index data from the U.S. Bureau of Labor Statistics.
Compared to pre-pandemic, food at home prices are up significantly — a jump of 25% when comparing January 2019 to July of this year.
On an earnings call with investors, CEO Rodney McMullen said the grocer has seen shoppers who feel squeezed by high inflation, reduced government benefits and rising interest rates. He said the company has tried to cater to budget-minded customers with lower-priced items from its own brands, personalized discounts, fuel rewards and weekly specials.
"We expect these broader economic headwinds to continue pressuring customer spending in the second half of the year," he said. "While the environment is difficult, we are never satisfied with sales, and we are focused on driving more units in the back half of the year."
Kroger put up strong online gains in the quarter, with digital sales rising 12% year over year. It has expanded to new markets, including Florida, by opening giant warehouses to fulfill online orders. | Inflation |
As Sam Bankman-Fried’s fraud trial heats up, so does the spotlight on Gary Gensler over his allegedly cozy ties with the fallen crypto kingpin.
Last week, the chairman of the Securities and Exchange Commission got a subpoena threat from US Rep. Patrick McHenry, chair of the House Financial Services Committee, who is demanding more information on the FTX collapse.
“You refuse to be transparent with Congress regarding your interactions with FTX and Sam-Bankman Fried,” McHenry told Gensler at a Sept. 27 hearing.
On the other side of the aisle, Rep. Ritchie Torres (D-NY) in December said Gensler was “singularly responsible for the regulatory failures surrounding the collapse of FTX.”
In response, Gensler has remained tight-lipped about his role in the crypto exchange’s downfall.
At the hearing with McHenry last week, the SEC chair “would only say that his staff would continue to work with McHenry’s on the matter” before being repeatedly cut off by the congressman, according to DLNews.
One major issue: Gensler has numerous ties to FTX.
Glenn Ellison – the father of Alameda Research CEO Caroline Ellison, SBF’s ex-girlfriend who has since turned informant to the feds — was the head of MIT’s economics department when Gensler taught a course on blockchain there in 2018.
Elsewhere, several of Gensler’s old cronies worked for FTX and were even responsible for arranging meetings between Gensler and SBF, sources said.
Ryne Miller — who a decade earlier had served as legal counsel to Gary Gensler for two years while Gensler headed the Commodity Futures Trading Commission — joined FTX as its general counsel in August 2021, according to its website.
After Miller joined FTX, Bankman-Fried nabbed his first meeting with Gensler in October 2021, according to a screenshot of Gensler’s calendar.
Miller arranged a conversation between Gensler, Bankman-Fried, and FTX US President Brett Harrison to discuss next steps for the exchange — and how it could be legitimized, according to SEC disclosures.
It wasn’t just Gensler who was wooed by FTX. Then General Counsel of the SEC Dan Berkovitz went to dinner with Bankman-Fried and Miller in October 2021 at an upscale Indian restaurant in Washington, Rasika West End, according to the LA Times.
Berkovitz left the SEC a month after FTX’s November 2022 implosion.
Mark Wetjen, who served as a commissioner of the CFTC at the same time Gensler helmed the agency, joined the dinner as well.
While it’s unclear what was discussed at the meal, Wetjen joined FTX as US Head of Policy and Regulatory Strategy shortly thereafter.
“The FTX case is one of the most significant financial frauds in decades,” Thomas Jones, president of the American Accountability Foundation, told On The Money.
“FTX hired one of Gary Gensler’s closest allies to serve as their ‘lobbyist’ in Washington and then got an unprecedented direct meeting with Gensler to plead their case.”
Wetjen, who has remained close to Gensler, also was responsible for setting up a March 2022 Zoom call just eight months before the exchange’s ultimate downfall, according to reports.
On the call, Bankman-Fried reportedly discussed the possibility of launching a new crypto trading platform with Brad Katsuyama’s IEX.
SEC insiders say it is highly unusual for an SEC Chair to discuss a work-in-progress.
SBF reportedly bragged about having access to Gensler.
The SEC declined to comment.
“FTX and their leadership was the ATM for the uniparty swamp in Washington,” Jones said. “The pay-to-play attitude of SBF and his friends in official Washington, whether they be at the regulatory agencies or in Congress, serves as evidence that Washington has too much power and influence over the American economy and the lives of average Americans.” | Crypto Trading & Speculation |
Faced with a rapid rise in food prices, Jen Butler admits she is "very particular" about planning family meals.
A weekly dinner plan is written up on a whiteboard. Prices are compared between the local Asda and Aldi. Items in the kitchen cupboards are thrown together in an "anything can happen day" meal.
A wide selection of fruit and vegetables are growing in the garden and she even swaps food with the neighbours to save on waste.
"Financially, we always try to go in the right direction, to beat the previous month," says Mrs Butler, a 43-year-old carer.
At the heart of this preparation is a paper shopping list, amended as required when the family decide on groceries for the week ahead.
Written history
List writing is proving popular as the cost of living has soared, helping people to budget and buy what they need rather than what they want. A survey provided exclusively to the BBC by retail data firm Kantar suggested that by the end of last year, 27% of those asked had either started regularly writing, or been making greater use of, shopping lists.
The habit is nothing new. Ancient Mesopotamians created shopping lists using symbols and characters on clay tablets in 3200-2000BC. The Romans did something similar with wax or ink on tablets of wood. Painter Michelangelo drew each item on his list to help his illiterate servant.
The modern equivalent is a task - even an artform - that has been celebrated with a recent exhibition at London's Museum of Brands.
It featured Lucy Ireland Gray's collection of about 200 shopping lists that she found discarded over the course of nearly 20 years in and around Hertfordshire, where she lives.
She says they show not only people's shopping needs, but also something of their lives. In one, there is a love message hidden partway down the column of groceries. In another, a child enjoys a joke about her mum, at the same time as illustrating the list.
Museum director Anna Terry says there are clear indications of shoppers being mindful about where their money goes by grouping items by meal, and conscious of food waste.
"One of the common reactions from visitors was: 'I must be more organised,'" she says.
"Making a list and having plans is better for personal finances and means less goes in the bin. But you can still see certain brand names [on the lists]. Even in tight times, people won't give up on certain things."
As that exhibition ends, so another begins, one that makes the pressure that families face with the rising cost of groceries crystal clear.
A new display features the top-selling grocery brands of last year, as compiled by The Grocer magazine. Nearly all of the suppliers of the 100 brands featured had put up their prices.
That is reflected in the latest official data. Food prices are rising at their fastest rate in 45 years, according to the Office for National Statistics (ONS).
Intriguingly, the museum itself saw a rise in visitor numbers during the recession of 2008-09, as people paid more attention to what they bought. That was key to a decision during the current financial squeeze to keep its admission prices unchanged.
Among the brands, the top 10 was relatively stable compared with the previous year, but Mrs Terry says there had been a clear impact from rising costs. Innovation among brands had slowed and, although there had been more "thoughtful buying" among consumers, there were clear signs that people were still willing to treat those they love.
"Premium pet food had a good year. It seems we still buy the best for our pets, even when we cut back on ourselves," she says.
Nostalgic visitors also point out the trend of shrinkflation - when an item may cost the same, but is smaller than before. "People point and say things were definitely bigger in the past," she says.
Changing deals
Manufacturing dynamics may have changed, but retailers' tactics are also evolving. Elsewhere in the museum, visitors can recall the popularity of Green Shield Stamps.
Under this early loyalty scheme, shoppers filled books of stamps to exchange for gifts. Complete eight books and you could claim a new toaster. A Lambretta scooter was yours for 155 full books.
Loyalty schemes have run along the same lines for years since, but recent announcements suggest Tesco with its Clubcard and the Boots Advantage card are shifting their emphasis to on-the-day discounts of own-brand products.
Such flash offers were around in the 1960s, so perhaps some of the oldest ideas are still the best.
So, when you write a shopping list today, remember you will be repeating a task that has survived for at least 4,000 years. | Inflation |
Britain’s Economic Stagnation Leaves Households £8,300 Worse Off
The London School of Economics report accompanied proposals to shake the UK out of its economic malaise and raising living standards.
(Bloomberg) -- Fifteen years of economic stagnation have left the typical UK household £8,300 ($10,550) poorer than peers in countries like France and Germany, according to a major report on the state of the nation.
The finding from the Resolution Foundation and the Centre for Economic Performance at the London School of Economics accompanied proposals to shake the UK out of its economic malaise by boosting growth, raising living standards and cutting inequality.
The 300 page report could help shape the agenda for a Labour government under its leader Keir Starmer if they win the next election.
The researchers proposed sweeping measures to boost productivity by closing the wealth gap between Britain’s cities, championing services exports and increasing public investment.
“The UK has now seen 15 years of relative decline, with productivity growth at half the rate seen across other advanced economies,” Resolution said in the 300-page final report from its “Economy 2030 Inquiry,” a collaboration with the LSE.
The task is “huge but not insurmountable,” Resolution said. Were Britain to close the average income and inequality gap with Australia, Canada, France, Germany and the Netherlands, “the typical household would be 25% — £8,300 — better off, with income gains of 37% for the poorest households.”
Starmer and Chancellor of the Exchequer Jeremy Hunt will speak at an event in London on Monday to launch the report, with further comments from Bank of England officials and prominent economists.
The event reflects growing concerns across the political spectrum about Britain’s lagging economic performance since the global financial crisis in 2008. Growth has slowed and productivity, which is vital to raising living standards, has been particularly weak relative to equivalent nations.
The government’s current plans “are not serious,” Resolution said, just days after the Autumn Statement, when Hunt cut £20 billion of taxes but signalled public services faced big budget cuts.
Prime Minister Rishi Sunak has put boosting the economy and slashing inflation at the heart of the government’s agenda, claiming Labour’s plans would threaten the progress that has been made.
“We have turned a corner,” Sunak told reporters with him for the COP28 climate talks in Dubai. “We have grown the economy, and we are now focused on controlling spending and controlling welfare so we can cut taxes. The Labour Party want to borrow £28bn a year. That’s just going to push up inflation.”
Resolution said a new economic strategy is needed and politicians must be honest about the trade offs involved. The think tank called for more public investment and funding for public services, but said taxes need to rise.
For now, the current strategy has left the economy sputtering and workers getting poorer in real terms as productivity has fallen behind other comparable nations.
As a result, Wages in Britain have flatlined, costing the average worker £10,700 a year in lost pay growth, according to the report. Nine million younger workers have never worked in an economy with sustained average wage rises.
The findings chime with analysis by Bloomberg economists Dan Hanson and Ana Andrade, who calculated that hourly labor productivity in the UK is 24% below where it would be had it maintained its pre-financial crisis trend.
They found that a lack of investment explained a quarter of the gap, with less innovation and a slowdown in the adoption of new ideas accounting for the remainder.
What Bloomberg Economics Says ...
“Jeremy Hunt found out first hand in his Autumn Statement how hard it is to move the needle on the UK’s subdued long-term growth trajectory. At the heart of the challenge — unlocking faster productivity gains, which have slowed to a crawl over the past 15 years. Lifting investment spending, aiding the flow of capital to where it’s needed most, taking advantage of opportunities presented by artificial intelligence and opening up the economy to trade should all be part of that plan. There will need to be some tough fiscal choices along the way.”
—Dan Hanson and Ana Andrade, Bloomberg Economics. Click for the INSIGHT.
Resolution estimated that its plan could boost gross domestic product by 7% over 15 years. Higher taxes and stronger growth are needed to “raise investment, rescue public services, and repair public finances.”
Public capital spending needs to to 3% of GDP to close the living standards gap with similar countries. The current government plans to cut investment to 1.8% of GDP by 2028-29. Investment should be increasingly funded by domestic savings, not borrowing from abroad, it added.
--With assistance from Andrew Atkinson and Ellen Milligan.
©2023 Bloomberg L.P. | United Kingdom Business & Economics |
Titagarh Rail Plans Rs 700 Crore Fundraise Through QIP
The wagon manufacturer said proceeds from the QIP will be used to fund future growth initiatives.
Titagarh Rail Systems Ltd. will raise up to Rs 700 crore through qualified institutional placement, following board approval.
The fundraising will be done in one or more tranches, subject to regulatory and statutory approvals, the company said in an exchange filing on Wednesday. It will also seek shareholders' nods through an extraordinary general meeting.
The wagon manufacturer said proceeds from the QIP will be used to strengthen the company's position in its core businesses and to fund future growth initiatives.
The board also constituted a committee to scout a partner for the shipbuilding, bridges and defence business. The committee will also seek assistance from external advisors or merchant bankers for this purpose.
Currently, wagons and rail passenger coaches are the company's core operations.
There will be no capital allocation for the shipbuilding business for the next couple of years, but the company will be executing old orders, the company's Vice Chairman and Managing Director, Umesh Chowdhary, told BQ Prime last month.
“The shipbuilding business will be a booster for growth once the passenger rail and freight rail systems are fully stabilised,” he said.
Titagarh Rail reported a 56.9% rise in net profit in the second quarter, while its revenue was up 54%. The company is seeing strong demand for wagons from the private sector, having finalised orders worth Rs 12 billion in the past few months and having an order backlog from the private market (26 freight rail systems order book).
The Kolkata-headquartered company recently received certification for the export of passenger rail systems and plans to grow its international business.
Shares of Titagarh Rail Systems closed 1.59% higher at Rs 796.9 apiece ahead of the announcement on Wednesday, as compared with a 0.05% rise in the benchmark BSE Sensex. | India Business & Economics |
The soaring cost of childcare in the UK is revealed in new figures today, suggesting nurseries will raise fees by £1,000 this year.
A survey of 1,156 providers by the Early Years Alliance found nine out of 10 expect to increase fees, typically in April, and by an average of 8% - higher than in previous years.
UK childcare costs are already among the most expensive in the world, with full-time fees for a child under two reaching an average £269 a week last year.
Three and four-year-olds are eligible for either 15 or 30 free hours a week depending on whether their parents work.
But the concern is that by this stage many parents - particularly mothers - have felt forced to drop out of work or cut their hours.
Most nurseries and childminders surveyed - 87% - said the money they get from the government does not cover their costs to provide the "free" hours - leaving them out of pocket.
More than half of providers (51%) said they had operated at a loss last year. A handful said they were looking at fee increases of as much as 25%.
Conservative MPs have been putting pressure on the government to help parents with childcare costs in the March budget in order to help women back into work.
Becky Burdaky, 26, from Wythenshawe, Greater Manchester, told Sky News she had taken the "daunting" decision to leave her job in sales after having her second child, Bobby, last year.
Her daughter Harriet, aged three, goes to pre-school near their home, but the family found the costs they would face for their baby son beyond their reach.
She will stay at home and they will live on the wages of her partner Steve, an electrician.
'Not asking other people to pay for my kids'
Becky said: "When we looked into the fees it was £70 a day - it would have been all of my wage. With Harriet it was about £54, so that's a huge difference.
"And if he was home poorly, I wouldn't get paid but I'd still have to pay his fee. Once we sat down and worked it out I would have been paying to go to work.
"I never envisaged myself being a stay-at-home mum, you know just cooking and cleaning and bringing up children, as I've always worked.
"It's our decision to have children - I'm not asking other people to pay for my children. And I definitely don't want people's taxes to go up because of it.
"But I think slightly subsidising the cost of fees so it's affordable for working parents means we can work and contribute.
"You don't know what it's going to be like when you return to work, you're starting from the bottom."
The campaign group Pregnant Then Screwed surveyed 27,000 parents last year and found nearly two thirds paid more for childcare than their rent or mortgage.
Although childcare costs have risen significantly in recent years, many providers are struggling to stay in business - with 5,400 closing their doors in the year to August 2022.
Fees for the youngest children, aged under three, are often used to keep the nurseries in business, and the rising cost of living means parents are cutting back.
'I've put my savings in to cover wages'
Delia Morris is the owner of Morris Minors pre-school in Croxley Green, Hertfordshire, where children used to start aged two but are now increasingly starting at three.
She is paid £5.41 an hour by the local authority for their free hours, but says providing it costs her around £7.
"Children come in later, when they are funded," she said.
"That's had a huge impact. I did raise my fees a very small amount this year but it doesn't cover it because we only have one or two children doing a couple of sessions a week [that parents pay for].
"I've had to put my own savings in to cover the wages last summer, and the staff had to drop a session."
As to what the government should do, she said: "They have to put money in. It's difficult to say, but I have to be realistic that if I can't make ends meet I will have to close and that's it."
Neil Leitch, chief executive of the Early Years Alliance, said the organisation had closed half of the 132 nurseries it operated in the last four years.
"They are exclusively in areas of deprivation, which seems to fly in the face of any levelling up agenda. These are families and children who would benefit most from support and care," he said.
According to the OECD, the UK tops the table for the proportion of a mother's income taken up by childcare costs - based on two children in full-time care.
Christine Farquharson, education economist at the Institute for Fiscal Studies, said childcare costs for two-year-olds have risen twice as fast as inflation in the past decade - with a lasting effect on women's pay.
"We ended up in a situation where the youngest children have the highest prices they're ever going to pay, with the least access to government support," she said.
"And it's coming at this critical moment where parents are making decisions about whether or not to go back to work after they've been on parental leave.
"When mothers - and it is mostly mothers - make that choice to step back from the labour market it's not just those few years. The gender pay gap just explodes and literally takes decades to come back to anything approaching the situation before they became parents."
Proposals, championed by Liz Truss, to increase the ratio of children looked after by each adult, have attracted opposition from nurseries and parents.
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But Tory MPs are pressing the government to help parents with the cost of childcare by reducing business rates for nurseries or extending free hours to two-year-olds.
Robin Walker, chair of the education select committee, said some of the existing schemes are not working effectively - such as tax-free childcare - for which uptake is only around 40%.
Universal Credit claimants are also eligible to have up to 85% of their childcare costs funded but are put off by having to make upfront payments.
"There is money there that isn't being used," he said. "Upfront payment for Universal Credit and tax-free childcare are putting a lot of parents off using them at all.
"The government is already spending more than any previous government has in this space, but other countries in Europe are spending more particularly in the 0-2 age bracket.
"If we were to make the case for more investment it would unlock those opportunities for people to continue in the workplace and stimulate children in the early years."
If they win power, Labour have promised an expansion of childcare from the end of maternity leave until the start of primary school.
Shadow education secretary Bridget Philipson told Sky News this would be a "key battleground issue" at the next election.
A Department for Education spokesperson said: "We recognise that families and early years providers across the country are facing financial pressures and we are currently looking into options to improve the cost, flexibility, and availability of childcare.
"We have spent more than £20bn over the past five years to support families with the cost of childcare and the number of places available in England has remained stable since 2015, with thousands of parents benefitting from this." | United Kingdom Business & Economics |
Charlie Riedel/AP
toggle caption
A shopper pushes two carts during last year's Black Friday sale at a Best Buy store in Overland Park, Kan.
Charlie Riedel/AP
A shopper pushes two carts during last year's Black Friday sale at a Best Buy store in Overland Park, Kan.
Charlie Riedel/AP
Is Black Friday dead? Despite this annual speculation, the Friday that historically marks the start of the holiday shopping season remains, in fact, the busiest day for U.S. stores.
Yes, most U.S. shoppers tend to say Black Friday is overhyped. But nearly 1 in 5 Americans still plan to do "most of their shopping" on Black Friday, according to a survey by the accounting and consulting firm PwC.
This year, it might not be the best of deals, nor the worst of deals — but the holiday season is expected to set yet another shopping record. The National Retail Federation estimates that 182 million people plan to shop during this long weekend, which is the most since the group began tracking in 2017.
Deal-hunting millennials are fueling some of the Black Friday flame.
People in their late 20s to early 40s are expected to account for over 40% of spending between Black Friday and Cyber Monday. And in a throwback to analog times, half of these shoppers actually said they planned to chase doorbusters, telling a Deloitte survey that they were considering shopping trips between midnight and 7 a.m.
Holiday budgets of nearly $900 — a bill to tackle next year
Shoppers are expected to spend slightly more than last year — an average of $875 — on holiday stuff. People say they plan to allocate a bit more to gifts this year, and about the same amount to decorations, candy and snacks.
The National Retail Federation predicts overall spending will grow between 3% and 4% this holiday season. That's a slowdown from the pandemic boom, but in line with the decade prior. And the total is on track to top $957 billion, which would set a record.
How can we afford it all?
Americans' credit card balances have recently grown to a record $1.08 trillion, a nearly 5% jump. And more cardholders are falling behind on their credit card bills, especially people in their 30s. Katie Thomas of the Kearney Consumer Institute described this as "the biggest risk" for the holiday season.
"But that's, I think, going to be a new-year problem," says Thomas, who leads the think tank within a consulting firm. "People are going to spend through the holiday season and then they're going to have to figure that out in 2024."
Gift cards for you, a self-gift for me
In surveys, people say this year they are prioritizing gifts for their closest relatives and themselves, making self-gifting a big theme this year. A record 28% of shoppers plan to buy makeup, beauty and other personal care items, according to the National Retail Federation's survey.
And if you ask people what they actually want to get as holiday presents? The answer, forever and always, is gift cards.
Clothes are expected to remain the top-selling category during the Black Friday weekend, according to the National Retail Federation, followed by gift cards and toys. The retailers' survey says the most popular choices include Lego bricks, Hot Wheels and cars, Barbie and other dolls.
Adobe Analytics, which tracks online prices, estimates that Friday might have the best discounts on TVs, Saturday on computers, Sunday on toys and clothes, Monday on electronics and furniture, Tuesday on appliances and next Wednesday on sporting goods.
The bad news/good news economy
Americans enter the holiday shopping season feeling stretched and focused on discounts. Families have restarted student loan payments, child care subsidies have faded, and people are paying more for food and rent than they were a year ago.
But unemployment has remained at or near historic lows for months now. It was 3.9% in October. Wages have been climbing. And while prices remain high, inflation has cooled dramatically. And so, retailers are expecting the vast majority of U.S. shoppers to splurge for the holidays.
"Ultimately, people will still spend," says Thomas. "People like to spend on the holidays [and] they know it's the best price of the year." | Consumer & Retail |
The Liberal Democrats have dropped plans to put a penny on income tax to invest in the NHS and social care.
Sir Ed Davey, leader of the Lib Dems, told the BBC "the last thing" people needed was "yet more tax rises" during a cost-of-living crisis.
The Lib Dems have called for a 1p rise on income tax since 1992 - then to fund education promises.
The party hopes it will reassure voters in Conservative-held target seats ahead of the upcoming general election.
"I don't think it's credible for any opposition party to say they want to increase the tax burden more than the Conservatives are doing," Sir Ed said.
He described the government's decision to freeze allowances over a number of years as "stealth income tax rises" which equated to more than a three pence increase on the basic rate.
Instead, he said the Lib Dems would set out plans in its "costed manifesto" to raise funding to "build an economy for the future".
At the last two elections the Lib Dems promised to fund healthcare investment by increasing each band of income tax by 1p.
Income tax is the government's single biggest source of money. Under the current system, the first £12,571 you earn per year is tax-free, but once you breach that threshold you pay at least 20p tax for every pound earned. For earnings between £50,271 and £125,140, you pay 40p in tax on every pound earned - and above £125,140, it is 45p.
Scrapping the policy puts the Lib Dems in a similar position to Labour, which has previously said it will not increase income tax.
Party leaders have identified local health services and environment policies as key to wooing traditionally Conservative voters, who they are targeting at the next general election.
At the start of the party's annual conference in Bournemouth on Saturday, Sir Ed announced an overhaul of social care worth £5bn a year.
The Lib Dems have become the first major political party to adopt an early version of its manifesto for a general election expected next year.
Keeping the triple lock for pensions and banning sewage dumping are among pledges the party says are central to the newly approved "pre-manifesto".
On Monday at the conference, Lib Dem party members will debate dropping a pledge a to build 380,000 new homes a year in England, in favour of a promise of 150,000 new council or social homes.
But the party's position on Brexit has opened up a potential split in the party. On Sunday, Sir Ed was heckled after insisting to delegates that he was "campaigning hard on Europe".
The party is "losing votes to Labour" among voters who would like to re-join the European Union, according to polling guru Sir John Curtice.
Re-joining the European Union is currently "off the table", the Lib Dem leader has said. | United Kingdom Business & Economics |
Falling milk prices have helped drive grocery inflation lower for a second consecutive month, according to industry data.
Kantar Worldpanel, which tracks supermarket sales and prices, measured the annual rate of grocery inflation at 17.2% over the four weeks to 14 May.
That was down from 17.3% in the previous four-week period but still at the third-highest level since the 2008 financial crisis.
The cost of food and other essentials has proved a drag on the cost of living crisis this year as energy-led price increases continue to filter through the supply chain.
The cost of four pints of milk, which had risen due to higher feed, production and transportation costs, fell by 8p over the four weeks.
But Kantar added that prices were still much higher than they were 12 months ago, at £1.60 currently compared to £1.30.
The report said the dairy aisle had become a battle-ground in the supermarket price war, with the established chains Tesco, Sainsbury's, Asda and Morrisons continuing to face tough competition from discounters.
Fraser McKevitt, Kantar's head of retail and consumer insight, said: "Of course, shoppers are savvy and they're skirting higher prices by choosing more own-label goods.
"These lines grew by 15.2% this month, almost double that of branded products which rose by 8.3%.
"However, the gap between own lines and brands is narrowing in most stores, helped in some cases by loyalty discounts."
The report highlighted a £218m lift to business at the tills during the week of the King's coronation, with wine and ingredients for the Coronation Quiche helping lead the way.
The latest data was released ahead of the official inflation figures on Wednesday, which are tipped to show the main consumer prices index (CPI) measure slipping sharply.
Economists polled by the Reuters news agency see the annual rate easing to 8.2% in April from the current 10.1%.
Electricity and natural gas prices leapt by 40.5% and 66.8% respectively in April 2022, data from Pantheon Macroeconomics showed, but held steady last month.
It is hoped that the gradual easing in wholesale energy costs this year will aid a slowing in the pace of food price increases as they feed into manufacturing and transport costs.
Regulatory pressure to ensure consumers are being charged fair prices was revealed last week when the Competition and Markets Authority announced fuel and grocery price investigations.
The watchdog will be looking for evidence of so-called "greedflation" - rising prices due to excessive charges.
Read more:
Greedflation? There's no evidence supermarkets are profiteering - and this is why
Food and non-alcoholic drink inflation was measured at 19.1% by the Office for National Statistics (ONS) in March.
That was the highest level since August 1977.
The Kantar data will go some way to giving hope that the pace of price hikes for groceries has more or less peaked.
However, it is unlikely to give any encouragement that any meaningful easing of prices for squeezed households is just around the corner. | Inflation |
Analysts at BNP Paribas, a French multinational bank, said that spending demands from several economic shifts meant states would likely be permanently bigger.
As a result, Marcelo Carvalho, the global head of economics, said: “I think it’s very unlikely that the tax burden is going to go down meaningfully anywhere in the world.
“It’s more likely that it either stays where it is or if anything goes higher.”
The warning comes as debt levels in many advanced economies have soared in the wake of Covid and the Europe-wide energy crisis.
Meanwhile, the UK’s tax-burden is racing towards its highest level since the Second World War, with the fiscal watchdog predicting it will be equivalent to 37.7pc of GDP by 2027-2028.
Mr Carvalho said: “With Covid, we had spending going up everywhere – in the West, in emerging markets, everywhere. Everyone’s spending increased. Now it is coming back [down] but I don’t think it comes all the way to pre-Covid levels.”
He added: “The political dynamics [mean] it is very easy to increase spending but very hard to bring it down.”
In the UK, government debt is at its highest level of more than 60 years at around 100pc of GDP, according to the Office for Budget Responsibility.
Despite all chancellors since 2010 committing to bringing debt levels down, they have only fallen in three of the past 12 years.
Mr Carvalho said that the pandemic had created demand for higher health spending “on top of the long-term needs to invest in climate-related activities”.
BNP Paribas’ chief European economist Paul Hollingsworth added demographics was among “very big structural forces that present serious challenges to the public finances in the medium term.”
The OBR has estimated that the ratio of working age people to retirees in the UK will fall from four-to-one to three-to-one over the next 50 years despite higher immigration.
Mr Hollingsworth said: “I think what we’ll be left with is a structurally higher level of spending than in the past, but against the backdrop of higher debt servicing costs than we’ve had previously.
“It means that there’ll have to be more prioritisation from governments. They won’t be able to spend on everything and will have to cut back on some areas.”
Interest rates have risen at the fastest pace in decades across advanced economies, with the UK’s borrowing costs at a 15-year-high.
Mr Hollingsworth said that the British economy would grow at a slower pace than in the past two years, when the catch-up effect from Covid triggered growth rates of 8.7pc in 2021 and 4.1pc in 2022.
Mr Hollingsworth said: “I think the fundamental principles that have been established post-pandemic is prioritising investment spending, given the challenges that we have in terms of steering towards Net Zero and improving digitalisation.
“These are very much the kind of core components of many advanced economies in terms of where the money is going to be spent.”
The Climate Change Committee has previously suggested that the cost of moving to a low-carbon economy will range around 0.5 to 0.6pc of GDP a year over the next decades, although it’s very difficult to estimate accurately.
While the UK may see its first Labour government in nearly a decade and a half next year, Mr Hollingsworth warned that the higher cost of borrowing and weak public finances put “a lot of constraints on whoever wins”.
He said: “From an aggregate fiscal position, there is not much that can be done. There was very little wiggle room anyway.
“You can change the balance of taxation and spending. That’s probably what would happen with a Labour government. You’d probably see relative to a Conservative government, higher taxes and higher spending.
“But in terms of that aggregate fiscal position, there are significant constraints. Many governments will find themselves in similar positions where it’s really a distributional question.” | Interest Rates |
The US government's credit rating has been downgraded following concerns over the state of the country's finances and its debt burden.
Fitch, one of three major independent agencies that assess creditworthiness, downgraded it from the top rating of AAA to AA+.
Fitch said it had noted a "steady deterioration" in governance over the last 20 years.
Treasury Secretary Janet Yellen called the downgrade "arbitrary".
It was based on "outdated data" from the period 2018 to 2020, she said.
Investors use credit ratings as a benchmark for judging how risky it is to lend money to a government. The US is usually considered a highly secure investment because of the size and relative stability of the economy.
However, this year saw another round of political brinkmanship over government borrowing.
In June the government succeeded in lifting the debt ceiling to $31.4 trillion (£24.6 trillion) but only after a drawn-out political battle, which threatened to push the country into defaulting on its debts.
When Congress returns from its summer recess, lawmakers will have to work to reach an agreement on next year's budget before the end of September to prevent a government shutdown.
"The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance" relative to peers, said Fitch in a statement.
"In Fitch's view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025," the rating agency said.
Ms Yellen said she "strongly" disagreed with Fitch's decision.
"Treasury securities remain the world's preeminent safe and liquid asset, and... the American economy is fundamentally strong," she said in a statement.
The timing and rationale behind the downgrade has taken many economists by surprise.
Former US Treasury Secretary Larry Summers said Fitch's decision is "bizarre and inept," particularly as the US economy "looks stronger than expected," he said in a post on Twitter, now known as X.
Mohamed El-Erian, the chief economic adviser at financial services giant Allianz, said the Fitch announcement was "a strange move".
"This announcement is more likely to be dismissed than have a lasting disruptive impact on the US economy and markets," he posted on the Threads social media platform.
Fitch also said it expects the US to slip into a mild recession later this year.
However, Nobel Prize-winning economist Paul Krugman said "the biggest economic news over the past year has been America's remarkable success at getting inflation down without a recession".
The biggest economic news over the past year has been America's remarkable success at getting inflation down without a recession, suggesting that we won't have to go through a prolonged slump in output and hence revenue 2/
— Paul Krugman (@paulkrugman) August 1, 2023
Alec Phillips, the chief US political economist at Wall Street bank Goldman Sachs said: "The downgrade mainly reflects governance and medium-term fiscal challenges, but does not reflect new fiscal information," .
The move "should have little direct impact on financial markets as it is unlikely there are major holders of Treasury securities who would be forced to sell based on the ratings change," he added.
Others questioning the timing of the Fitch announcement included Jason Furman, who was an economic adviser to former US president Barack Obama. He called it "completely absurd." | Interest Rates |
India's Per Capita Income To Grow Fivefold By FY47, Says SBI Research
25% of income tax return filers expected to move upwards from the lowest income group by FY47, the report said.
India's per capita income is expected to almost quintuple by FY47 as the country's middle-income class grows in size.
The country's per capita income is expected to increase to $12,400 (Rs 14.9 lakh) by FY47 from $2,500 (Rs 2 lakh) in FY23, according to SBI Research. This will be driven by the "great Indian middle income class" boosting the economy with 25% of taxpayers expected to move upwards from the lowest income group to middle and upper income cohorts by year ended 2047, SBI Research said in a note.
Income tax return filers are expected to surge 588% to 48.2 crore in FY47, increasing its share in the workforce with a taxable base from 22.4% in FY23 to 85.3% in FY47, the note said. The workforce is also expected to increase to 72.5 crore in FY47 from 53 crore currently.
The weighted mean income of the middle class has increased to Rs 13 lakh from Rs 4.4 lakh in assessment year 2014 (financial year 2013) on account of the increased transition to the middle and upper income groups from lower income along with higher buoyancy in the number of tax filers, according to SBI Research.
This is expected to further increase to Rs 49.7 lakh in 2047, particularly due to increase in number of tax filers as more filers transition upwards from lower income groups, said SBI.
Transition To Middle And Upper Class
In AY23 (FY22), 6.85 crore people filed income tax returns with a concentration of 64% of population still in the income group of up to Rs 5 lakh, compared to 84% in AY12.
25% of filers are expected to leave the lowest income strata by FY47 compared to 13.6% leaving in the period AY12-AY23, said SBI.
Here's how the filers are expected to transition out of the lowest strata by FY47:
17.5% filers to shift to income group of Rs 5 lakh to Rs 10 lakh
5% expected to shift to income group of Rs 10 lakh to Rs 20 lakh
3% to shift to Rs 20 lakh – Rs 50 lakh bracket
0.5% to shift to Rs 50 lakh – Rs 1 crore group
0.075% to income group of above Rs 1 crore | India Business & Economics |
Mortgage rates have fallen for the first time in two months following better-than-expected inflation figures.
Rates on both two and five-year fixed deals have dropped on hopes that the Bank of England may not raise interest rates as much as previously thought.
The rate of inflation slowed to 7.9% in the 12 months to June.
Months of increasing borrowing costs have put pressure on mortgage holders who are forced to renew deals at much higher monthly payment rates.
The average two-year fixed residential mortgage rate dipped to 6.79% on Thursday from 6.81%, according to financial information service Moneyfacts
Meanwhile, the average five-year fixed residential mortgage rate edged down to 6.31% from 6.33%.
The Bank of England has raised interest rates 13 times since December 2021 in an effort to slow soaring price rises, otherwise known as inflation.
Figures on Wednesday showed that inflation had fallen from 8.7% in the year to May to its lowest level in more than a year.
But the UK's inflation rate remains almost four times higher than the Bank's official 2% target.
However, the Bank is not expected to raise interest rates - currently at 5% - as steeply as it did during its last meeting when it lifted them by half a percentage point from 4.5%.
When the Bank next meets on 3 August to decide on interest rates, analysts now predict a quarter percentage point rise to 5.25%.
Although some economists believe stubbornly high inflation in the UK may mean rates will rise further.
Capital Economics said that rates will peak at 5.5% this year. Without the drop in inflation seen in June, that figure would have been much higher, around 6%.
How have you been affected by the changes in mortgage rates? Share your experiences.
Although average rates ticked lower, some mortgage lenders have continued to raise costs for borrowers.
Hannah Bashford, mortgage broker and director of Model Financial Solutions, said she did not think there would be a meaningful drop in mortgage rates until later in the year.
She added: "A rate drop will be largely dependent on whether energy prices don't push up inflation again in the autumn."
Last month, a series of measures were agreed with mortgage lenders aimed at supporting people who are struggling with their repayments.
In June, banks met the chancellor and agreed to a minimum 12-month period before a home is repossessed.
Borrowers will also be able to make a temporary change to their mortgage terms, for example by switching to an interest-only deal, then will be able to return to their original deal within six months without impacting their credit scores.
What happens if I miss a mortgage payment?
- A shortfall equivalent to two or more months' repayments means you are officially in arrears
- Your lender must then treat you fairly by considering any requests about changing how you pay, perhaps with lower repayments for a short period
- Any arrangement you come to will be reflected on your credit file - affecting your ability to borrow money in the future | Interest Rates |
Protean eGov Technologies IPO Allotment Finalised: How To Check Allotment Status Online
Step by step guide to check Protean eGov Technologies IPO allotment status online on the registrar's website and BSE.
Protean eGov Technologies Limited recently had an IPO worth Rs 490.33 crores and involved the sale of 0.62 crore shares. It started on November 6, 2023, and closed on November 8. The IPO's price range is between Rs 752 and Rs 792 per share, with a minimum lot size of 18 shares. Retail investors need a minimum investment of Rs 14,256. The issue also includes a special reservation of 150,000 shares for employees at a discounted price.
On the last day of the Protean eGov Technologies IPO there was tremendous demand from investors. QIBs subscribed 46.94 times, NIIs 31.62 times, and retail investors 8.93 times, indicating strong market interest in the offering.
As per the latest update, the allotment has now been finalised.
How to Ccheck Protean eGov Technologies IPO Allotment Status On Link Intime India Private Ltd.
Visit the Link Intime website: https://linkintime.co.in/IPO/public-issues.html
Select "Protean eGov Technologies Limited" from the drop-down list on the Public issues page.
Enter your PAN number, application number, or DP Client ID.
Click on the "SUBMIT" button.
Download or print the allotment status for your records.
How to check Protean eGov Technologies IPO allotment status on BSE Website?
Visit the official BSE website: bseindia.com/investors/appli_check.aspx
Click on "Equity" under "Issue Type."
Select "Protean eGov Technologies Limited" from the IPO list.
Enter your application number or PAN number.
Complete the 'Captcha.'
Click on the "Search" button to view your allotment status.
Download/print the allotment status for your records.
Protean eGov Technologies IPO Listing Date
Protean eGov Technologies Limited is set to list on BSE with a tentative listing date scheduled for Friday, November 17
*This is a tentative date and is subject to change.
Protean eGov Technologies IPO Timeline (Tentative Schedule)
IPO Open Date: Monday, November 6
IPO Close Date: Wednesday, November 8
Basis of Allotment: Monday, November 13
Initiation of Refunds: Wednesday, November 15
Credit of Shares to Demat: Thursday, November 16
Listing Date: Friday, November 17
Protean eGov Technologies IPO Issue Details
Total issue size: 6,191,000 shares (aggregating up to Rs 490.33 Crores)
Face value: Rs 10 per share
Offer for sale size: 6,191,000 shares (aggregating up to Rs 490.33 Crores)
Shares for offer for sale: 6,191,000 shares
Price band: Rs 752 to Rs 792 per share
Lot size: 18 shares
About Protean eGov Technologies Limited
Protean eGov Technologies Limited, formerly known as NSDL e-Governance Infrastructure Limited, has been in the business of creating digital solutions for the government for over two decades. They've played a crucial role in building important digital infrastructure in India, like PAN issuance for taxes and the Atal Pension Yojana for social security. They've also improved access to education and funding through platforms like Vidya Lakshmi and Vidyasaarathi. Additionally, they've supported open digital systems like ONDC for various sectors. This company is a key contributor to open-source technology that drives ONDC. | India Business & Economics |
Zomato, Action Construction, SBI — Buy, Sell Or Hold? AskBQ
Here's what experts say about Zomato, Action Construction, SBI, ITC and more.
Is it a good time to add Zomato to your portfolio? Which public sector bank is a good buy?
Amit Khuranna, head of equity at Dolat Capital Market Pvt. and Nilesh Jain, head AVP, technical and derivatives equity research at Centrum Broking answered these investor queries and more, on BQ Prime's Ask BQ show.
Zomato
Khuranna: Concerned about unit economics, while take rates have improved.
Blinket performance improvement driven by lack of store additions.
Going forward, new additions will require more capital burn.
Not recommending an 'add' at this stage.
Jain: Never breached previous bottom.
Stock structure looks positive.
Further upside to continue at least till Rs 135-140 in the short term.
Buy on decline approach, stop loss beyond Rs 108.
Not advisable to buy at current levels.
Action Construction Equipment Ltd.
Jain: Stock structure looks positive for upside momentum to continue.
Advisable to buy on decline.
Up move till Rs 900-915, stop loss at Rs 820.
Mold-Tek Technologies Ltd.
Jain: Recently seen a downtick.
Stop loss below Rs 231. Exit opportunity at Rs 282-300.
State Bank of India
Khuranna: Healthy credit growth to run into FY25, also as the cycle is conducive.
Concern around cost of funds which was expected to peak out in Q2, but will now extend till Q3 or even Q4.
Banking should do reasonably well.
Jain: Expects banking — PSU and private bank stocks— to outperform.
SBI can be bought at current levels.
Target price of Rs 650 levels. For short term Rs 610-615.
Stop loss below Rs 555.
Anand Rathi Wealth
Jain: Stock is constantly hitting all time high.
Structure looks very strong.
A run up to Rs 2,200-2,300 may happen.
Stop loss below Rs 1,950.
Can be bought at declines.
Top Picks
Khurranna: Banks at large, consumer staples, discretionary.
Jain: Bharat Petroleum Corp., SRF Ltd.
Watch The Full Conversation Here:
Disclaimer: The commentary and advice on BQ Prime digital and social media platforms is not a full financial plan. Investors are advised to consult a certified financial advisor/planner when making an independent decision regarding investments. No views mentioned on the programme are personal advice to anyone. Quintillion Business Media Ltd. (BQ Prime) is not responsible for any risk or loss that might occur as a result of using this information in any way, regardless of your interpretation of the advice. BQ Prime digital and social media platforms provide views of only SEBI registered investment advisors/analysts. | Stocks Trading & Speculation |
The Government has U-turned on its commitment to reopen the Leamside railway line, just 24 hours after making the massive announcement.
A restoration of the mothballed line, which runs from Pelaw in Gateshead to Tursdale in County Durham, was included in initial announcements about the ‘Network North’ programme revealed by Rishi Sunak on Wednesday. The Prime Minister pledged to invest in hundreds of transport projects around the North and Midlands, using £36bn he says will be saved by scrapping the northern leg of HS2.
But, just a day later, all reference to reopening the Leamside Line has been removed from the Network North website and the promise seemingly abandoned. Speaking to the Local Democracy Reporting Service on Thursday lunchtime, roads minister Richard Holden confirmed that the Government was simply “committed to looking into” the Leamside Line project.
Read More:
- Rishi Sunak promises A1 dualling and Leamside Line reopening after scrapping HS2 northern leg
- Keep up to date with all the latest breaking news and top stories from the North East with our free newsletter
A furious Henri Murison, the chief executive of the Northern Powerhouse Partnership, said pulling the plug on the Leamside Line pledge made the entire Network North project a “fairytale”. He added: “If this is what they have done and they have gone back on their word, how can we believe anything else that they have said in the last week?
"How can the prime minister have any credibility on the commitments he has made? If they don’t honour their commitments made on this it would be significant evidence of a betrayal of the North of England.”
Northumbria Police and Crime Commissioner Kim McGuinness said the Leamside announcement made on Wednesday was “always a scam”. She added: “The Leamside line was included in all the regional briefings to the media and politicians and within a day it had been deleted from their investment list. The Prime Minister’s promise to the North East didn’t even last 24 hours – only a fool would trust Rishi Sunak again.”
Restoring the Leamside Line has been one of North East leaders’ biggest ambitions for years. It would allow for an extension of the Tyne and Wear Metro through Washington and free up capacity to run more services on the East Coast Main Line, by providing an alternative route for freight trains. The cost of restoring just the northern section of the disused route, closed in 1964 under the Beeching cuts, was put last year at £745m.
On Wednesday, a bullet point list of North East projects included in Network North stated: “The Leamside Line, closed in 1964, will also be reopened.” That web page has now been taken down and there is no mention of Leamside in a 40-page Network North policy document, only a pledge to bring train services to Ferryhill.
Mr Holden, who is the Conservative MP for North West Durham, told the LDRS: “We are committed to looking into it [Leamside]. We want to work with local partners to consider the different uses for the route and what their priorities would be for transport in the area.”
The roads minister suggested that the Leamside Line decision could be made by local leaders, potentially using a £1.8bn settlement that the North East will receive from the next stage of the Government’s City Region Sustainable Transport Settlement.
He added: “This is part of much bigger discussions around mayoral devolution, the City Region Sustainable Transport Settlement going to the North East – right across the North we are seeing something like a 40% uplift, about £2bn now we are seeing for the North East CRSTS package. Some of the decisions are going to be down to local people, elected members, and how they decide to use this funding.” | United Kingdom Business & Economics |
By Davide Barbuscia and Pete Schroeder
NEW YORK/WASHINGTON (Reuters) - As talks over raising the U.S. government's $31.4 trillion debt ceiling go down to the wire, Wall Street banks and asset managers have been preparing for the fallout from a potential default.
The financial industry has prepared for such a crisis before, most recently in September 2021. But this time, the relatively short time frame for reaching a compromise has bankers on edge, said one senior industry official.
Less than two weeks remain until June 1, when the Treasury Department has warned that the federal government might not be able to pay all its debts, a deadline U.S. Treasury Secretary Janet Yellen reaffirmed on Sunday.
Citigroup CEO Jane Fraser said this debate on the debt ceiling is "more worrying" than previous ones. JPMorgan Chase & CO CEO Jamie Dimon said the bank is convening weekly meetings on the implications.
WHAT WOULD HAPPEN IF THE U.S. DEFAULTED?
U.S. government bonds underpin the global financial system so it is difficult to fully gauge the damage a default would create, but executives expect massive volatility across equity, debt and other markets.
The ability to trade in and out of Treasury positions in the secondary market would be severely impaired.
Wall Street executives who have advised the Treasury's debt operations have warned that Treasury market dysfunction would quickly spread to the derivative, mortgage and commodity markets, as investors would question the validity of Treasuries widely used as collateral for securing trades and loans. Financial institutions could ask counterparties to replace the bonds affected by missed payments, said analysts.
Even a short breach of the debt limit could lead to a spike in interest rates, a plunge in equity prices, and covenant breaches in loan documentation and leverage agreements.
Short-term funding markets would likely freeze up as well, Moody's Analytics said.
HOW ARE INSTITUTIONS PREPARING?
Banks, brokers and trading platforms are prepping for disruption to the Treasury market, as well as broader volatility.
This generally includes game-planning how payments on Treasury securities would be handled; how critical funding markets would react; ensuring sufficient technology, staffing capacity and cash to handle high trading volumes; and checking the potential impact on contracts with clients.
Big bond investors have cautioned that maintaining high levels of liquidity was important to withstand potential violent asset price moves, and to avoid having to sell at the worst possible time.
Bond trading platform Tradeweb said it was in discussions with clients, industry groups, and other market participants about contingency plans.
WHAT SCENARIOS ARE BEING CONSIDERED?
The Securities Industry and Financial Markets Association (SIFMA), a leading industry group, has a playbook detailing how Treasury market stakeholders - the Federal Reserve Bank of New York, the Fixed Income Clearing Corporation (FICC), clearing banks, and Treasuries dealers - would communicate ahead of and during the days of potential missed Treasuries payments.
SIFMA has considered several scenarios. The more likely would see the Treasury buy time to pay back bondholders by announcing ahead of a payment that it would be rolling those maturing securities over, extending them one day at a time.
That would allow the market to continue functioning but interest would likely not accrue for the delayed payment.
In the most disruptive scenario, the Treasury fails to pay both principal and coupon, and does not extend maturities. The unpaid bonds could no longer trade and would no longer be transferable on the Fedwire Securities Service, which is used to hold, transfer and settle Treasuries.
Each scenario would likely lead to significant operational problems and require manual daily adjustments in trading and settlement processes.
"It is difficult because this is unprecedented but all we’re trying to do is make sure we develop a plan with our members to help them navigate through what would be a disruptive situation," said Rob Toomey, SIFMA's managing director and associate general counsel for capital markets.
The Treasury Market Practices Group - an industry group sponsored by the New York Federal Reserve - also has a plan for trading in unpaid Treasuries, which it reviewed at the end of 2022, according to meeting minutes on its website dated Nov. 29. The New York Fed declined to comment further.
In addition, in past debt-ceiling standoffs - in 2011 and 2013 - Fed staff and policymakers developed a playbook that would likely provide a starting point, with the last and most sensitive step being to remove defaulted securities from the market altogether.
The Depository Trust & Clearing Corporation, which owns FICC, said it was monitoring the situation and has modeled a variety of scenarios based on SIFMA's playbook.
"We are also working with our industry partners, regulators and participants to ensure activities are coordinated," it said.
(Reporting by Davide Barbuscia; Editing by Megan Davies, Michelle Price and David Gregorio) | Banking & Finance |
Bank Of India Keen On Raising Non-Interest Income Via Third Party Products, Says CEO
The bank's non-interest income rose 19% YoY to Rs 1,688 crore due to rise in commission fees and recovery of written-off accounts.
The Bank of India is looking to improve the sale of third-party products in an effort to ramp up its non-interest income, according to Chief Executive Officer Rajneesh Karnatak.
In the September quarter, the bank's non-interest income rose 19% year-on-year to Rs 1,688 crore, driven by a rise in commission fees and the recovery of written-off accounts.
"We have placed a lot of marketing officers for third-party products in various zones so that we are able to increase commission," Karnatak, who is also the managing director at the bank, told BQ Prime on Monday. The bank is "very cognisant" of earnings and non-interest income from the sale of third-party products, forex trading and other segments, he said.
As the bank aims for credit growth of 11–12% in the ongoing financial year, a "healthy pipeline" of Rs 70,000 crore would steer the way, according to the CEO. "Channel financing, co-lending, and pool purchases would drive credit growth of 11–12% by the end of the year... We are seeing good traction in refinancing in the power sector," Karnatak said in the post-earnings media briefing on Saturday.
Karnatak said that the unsecured lending portfolio—which constitutes 22.8% of the bank's global gross advances—is well below the threshold limit approved by the board. Besides "some retail loans in the unsecured lending book," the bank's exposure to corporates falls under the 'AA' and 'AAA' rated categories, he said.
"There are state government and central government advances that are covered under the unsecured loan book. Even though our unsecured book is just 22%, it is well secured, cash flows are there, and it is performing well," he said.
On deposits, Karnatak mentioned that full repricing has been done, owing to a cumulative rate hike of 250 basis points by the Reserve Bank of India in the last one year. This is why the Bank of India's cost of deposits jumped 27 basis points on a sequential basis to 4.49% as of Sept. 30. The cost of deposits was 3.54% in Q2 FY23.
Watch the full interview below | Banking & Finance |
Gland Pharma Gets U.S. FDA Nod For Injection To Treat Septic Shock
Gland Pharma will launch Angiotensin II injection with its marketing partner on receipt of final approval from the U.S. FDA.
Gland Pharma Ltd. has received tentative approval from the U.S. Food and Drug Administration for injection used to treat septic shock.
The pharmaceutical company received the tentative approval for angiotensin II 2.5 ml single-dose vial injection, the company said in an exchange filing on Wednesday.
The angiotensin II injection is used to increase blood pressure in adults with septic shock and other kind of shock.
Gland Pharma will launch the product with its marketing partner on receipt of final approval, it said.
Shares of Gland Pharma were trading 0.97% lower at Rs 1,610 apiece, compared to a 0.99% advance in the benchmark NSE Nifty 50 as of 12:53 p.m.
It has risen 2.12% on a year-to-date basis. The total traded volume so far in the day stood at 30.9 times its 30-day average. The relative strength index was at 52.33.
Twelve out of 20 analysts tracking Gland Pharma maintain a 'buy' rating on the stock, three recommend a 'hold' and five suggest a 'sell', according to Bloomberg data. The average of 12-month analysts price target implies a potential downside of 6.7% | Asia Business & Economics |
The FinTech industry is picking up speed, and is changing our understanding about financial services and their uses in many fields. One of the reasons for this change is embedded finance. This technology is subtly and significantly transforming entire sectors,
as well as creating new opportunities. A study by Juniper Research revealed that the worldwide revenue generated from embedded financial services will surpass $183 billion by 2027. This impressive figure demonstrates significant growth from its 2022 value
of approximately $65 billion – a remarkable increase of 182%. The report highlighted the fact that the primary catalyst behind this expansion is the integration of embedded finance solutions by non-financial enterprises, who are keen to enhance their product
offerings. According to the CEO of Bond, Mr Roy Ng, consumers are now seeking to incorporate financial services seamlessly into their everyday lives, and they are no longer satisfied with limiting their options to traditional banks. Will FinTech be able to
take advantage of this trend?
Exciting possibilities for non-financial enterprises
The research conducted on a sample of 2,555 adult Americans, titled “The Flywheel Effect: How Embedded Finance Can Help Brands Generate Millions in Revenue and Increase Customer Loyalty?”, revealed a significant demand for financial products offered by non-financial
companies, particularly among individuals who are brand loyalists and frequent users of those specific products. For example, among gamers who consider the PlayStation to be their favourite brand, a staggering 79% expressed interest in a credit card that offers
rewards for in-game purchases. Furthermore, a significant 75% of all the gamers displayed interest in an in-game account that would allow them to deposit money and utilise it for purchasing and selling virtual in-game items, as well as earning rewards for
their game achievements and progression. Similarly, a substantial majority of fashion enthusiasts expressed their openness to obtaining an investment account offered by a luxury brand. Such an account would provide them with the convenience of easily investing
in the brand’s stock and other assets.
Another intriguing finding from the research, known as “The Flywheel Effect”, is that consumers who directly access financial services from specific brands report an increase in their spending with those brands, compared to their pre-financial service usage.
Embedded finance has already resulted in numerous success stories among non-financial enterprises. For example, Toast, a company that specialises in providing restaurants with point-of-sale hardware, has formed a strategic partnership with WebBank. The aim
of this collaboration is to offer loans ranging from $5,000 to $250,000 to Toast’s clients. These loans can then be utilised by the restaurant owners for various business purposes.
When purchasing a car online from Tesla, customers have the opportunity to secure a cost-effective loan directly from the car seller. Tesla Motors Ltd, which operated as a broker in the UK, provides this financing option.
In addition, Amazon offers the EMI (Easy Monthly Instalments) service to its buyers, providing a convenient financing option. Customers can easily request, acquire and repay loans directly on the platform, while browsing and purchasing products. This embedded
finance feature allows consumers to enjoy greater flexibility in their payment options, making it more accessible for them to manage their expenses and to make purchases on Amazon.
Emerging trends in embedded finance
From my perspective, embedded finance is poised to become the standard in the financial services sector, while reshaping our interactions with financial offerings for the foreseeable future. Let’s delve into three noteworthy trends that deserve our further
attention.
- Buy Now, Pay Later (BNPL)
BNPL serves as a method for individuals to purchase goods on credit and defer the payment to a later date. This payment method significantly enhances the accessibility to online shopping and e-commerce platforms.
By using BNPL as an embedded finance product, businesses can obtain a competitive edge by capturing missed sales opportunities and extending their invoice payments, thereby improving their cash flow management.
According to globaldata.com, BNPL is estimated to reach $309.2 billion in 2023, displaying a compound annual growth rate (CAGR) of 25.5% during the forecast period. The accelerated growth of online payments, driven by the increasing consumer preference for
online shopping, is a key factor contributing to the expanding BNPL market.
- APIs
APIs have not only facilitated exchanges of data among the various stakeholders engaged in financial transactions, including banks, third-party providers, websites and consumers, but have also revolutionised the process of developing financial apps and services.
This has resulted in faster, simpler and more cost-effective solutions than ever before.
As stated by Nordic APIs, open banking stood out as a prominent and highly-discussed topic within the API industry in 2021. The forecast suggests that a substantial number of users – specifically, over 132.2 million – will have embraced open banking by the
year 2024.
- Digital Wallets
A digital wallet empowers the user to conveniently store, manage and conduct electronic transactions with ease. Its versatility can be extended to various applications, such as facilitating in-house banking for businesses, powering crowdfunding platforms,
or facilitating transactions in online and e-commerce marketplaces without leaving the platform.
Ekmel Cilingir, Chairman of the Supervisory Board of European Merchant Bank | Banking & Finance |
Once the lord of a multibillion-dollar crypto empire under the FTX brand name, Sam Bankman-Fried will now have to prepare himself for his upcoming trial from a cell. A New York federal judge revoked Bankman-Fried’s bail and sent the crypto wiz to jail Friday to await trial later this year.
In a bail hearing, U.S. District Judge Lewis Kaplan agreed with federal prosecutors’ argument that Bankman-Fried was trying to discredit key witnesses in the case by leaking sensitive documents to the press. The U.S. Attorney’s Office alleged the defendant leaked the diary of ex-Alameda CEO Caroline Ellison to The New York Times in order to intimidate her and taint the jury pool. Ellison was once in a relationship with Bankman-Fried, but she’s since flipped on the ex-FTX head and has become a key witness for the prosecution as part of a plea deal. He had previously been incarcerated after his arrest in the Bahamas and subsequent extradition to the US. He posted $250 million bail in December.
According to reports coming from inside the courtroom, Kaplan told the court that it was probable Bankman-Fried had tried to “tamper with witnesses at least twice.” The ex-FTX CEO was remanded to federal custody, where he is slated to remain until his trial date, currently set for Oct. 2. It’s currently unclear where he will be held, but Inner City Press reported he could either be going to Putnam County Correctional Facility or MDC-Brooklyn.
Lawyers for the once-crypto kingpin, who often goes by SBF online, have claimed the 31-year-old was simply trying to strike a different chord from all the negative press circulating online about him and his dealings with FTX. According to AP, SBF’s attorneys repeated themselves Friday, saying that their client shouldn’t be thrown back in jail for battling unfavorable news coverage. They plan to file an appeal.
The judge also denied Bankman-Fried’s request for a delayed detention while he filed an appeal. SBF’s lawyers had previously whined that it would be next to impossible to create their client’s defense with him in federal custody.
According to reports from inside the courtroom, Kaplan also complained about SBF pushing the limits of his $250 million bail that let him stay in his parents’ home in Palo Alto, California. He referenced the once-crypto kingpin’s alleged use of a VPN in order to get around federal surveillance. The judge previously restricted SBF’s internet access in order to curtail his worst impulses.
This article is part of a developing story. Our writers and editors will be updating this page as new information is released. Please check back again in a few minutes to see the latest updates. Meanwhile, if you want more news coverage, check out our tech, science, or io9 front pages. And you can always see the most recent Gizmodo news stories at gizmodo.com/latest. | Crypto Trading & Speculation |
Rep. Alexandria Ocasio-Cortez held up to $50,000 in student loan debt while being one of the biggest proponents of its cancelation, according to filings reviewed by Fox News Digital.
The New York lawmaker's recently released financial disclosure shows she maintained between $15,001 and $50,000 in student loan debt in 2022. During this time, the progressive champion, who collects a $174,000 salary as a U.S. House of Representatives member, consistently advocated for actions that would also directly benefit herself.
"Now would be a great time to cancel student loan debt, take significant climate action, and pass voting rights," Ocasio-Cortez wrote on X, formerly Twitter, in May 2022 in response to a Marist poll showing President Biden's low approval rating with young adults.
After Biden announced his ill-fated student loan forgiveness plan for more than 800,000 borrowers months later, the 'Squad' member applauded the relief but vowed to push for more.
"It was YOUR pushing, YOUR pressure, YOUR organizing that got them to this point," Ocasio-Cortez wrote on Instagram. "It is up to us, and to you, to decide if we are going to stop here, or if we are going to keep pushing."
"I am very grateful for this watershed moment of a first step - it is so encouraging, thrilling, and has already changed SO many people's lives," she continued. "But I am also thinking about how this still leaves a question mark for those in the highest amounts of debt, who need the most amount of help. So let's celebrate and keep going."
The Biden administration recently returned to the drawing board after the Supreme Court canceled Biden's student loan debt handout, ruling that Congress would have to authorize such a program explicitly.
Biden said the court "misinterpreted the Constitution" and offered a "work-around" plan that will provide a 12-month "on-ramp" intended to assist borrowers struggling to resume repayment.
Ocasio-Cortez, however, was unsatisfied with the terms of the plan. In July, she said the president should suspend interest on debt payments for a year.
"I would like to see interest payments suspended during this time, especially during that 12-month ramp-up period," Ocasio-Cortez told CNN's Dana Bash. "There are millions of people in this country that have student loan debt under… $10,000 or $20,000, as outlined in the plan."
"People should not be incurring interest during this 12-month on-ramp period," she continued. "So, I highly urge the administration to consider suspending those interest payments. Of course, we still believe in pursuing student loan cancellation and acting faster than that 12-month period wherever possible."
Ocasio-Cortez's reported debt range on her new financial disclosure remained unchanged from the previous year. Her office did not respond to a request for comment.
Fox News' Chris Pandolfo contributed reporting. | Personal Finance & Financial Education |
Markets Face Short-Term Headwinds, Says Ace Lansdowne's Vikram Kotak
Kotak noted volatility may be a factor in markets around state elections and the general elections next year.
Indian stock markets face short-term headwinds due to impact of poor monsoon and trade pressure due to wars, but the macro side fundamentals remain strong, according to Ace Lansdowne Investments' Vikram Kotak.
The monsoon this year has been "upsetting" leading to rural stress, while the supply chain disruption due to two wars (Ukraine and Israel-Hamas) have added to pain on the trade front, Kotak, the co-founder and managing director of the Mumbai-based investment firm, told BQ Prime.
However, given the positive headlines in recent macro data like GDP growth, GST collections, power consumption, automobile sales and railway freight and airline traffic, this is a "magic moment" for India in the long-term, he said.
Volatility may be a factor in markets around state elections and the general elections next year, but valuations are in a good range, Kotak said.
Pockets Of Opportunities
"Markets are punishing people who are out of flavour," Kotak said in reference to stock prices. He held a favourable view towards electronic manufacturing services and private banks.
"EMS is a great story. We are still at a mobile phone journey and now we have to go the whole way. Its a great opportunity in the next five-seven years," the veteran investor said.
In terms of banks, he said risks lie in elevated interest rates and the rush in a crowded deposit market.
"Government and banks want to raise money, capex cycle is on, and global yields and rate set-up is not so easy. NIMs (net interest margins) cannot go up from here and may even contract. That can cause a short-term problem," he said.
Kotak is upbeat about asset management companies with rising interest among Indians to invest through mutual funds.
Watch the full interview here: | India Business & Economics |
- Nasdaq is putting its plans to release a crypto custody business on hold, CEO Adena Friedman said on the company's earnings call Wednesday.
- Meanwhile, Societe General's crypto arm received approval by France's financial regulator to offer crypto services, including crypto assets.
- Crypto's custody problem is seen among institutions as the key to pushing the industry into the mainstream in a post-FTX world.
Nasdaq is pausing its plans to release a crypto custody business, CEO Adena Friedman said on the company's earnings call Wednesday.
"Considering the shifting business and regulatory environment in the US, we've made the decision to halt our launch of the U.S. digital assets custodian business and our related efforts to pursue a relevant license," she said. "However, we continue to build and deliver technology capabilities that position Nasdaq as a leading digital asset software solutions provider to the broader global industry."
"More broadly, we remain committed to supporting the evolution of the digital asset ecosystem in a variety of ways, among them through our ongoing engagement with regulators, the delivery of comprehensive technology solutions across the trade lifecycle and through our partnerships with potential ETF issuers to support tradable exchange listed products," Friedman added.
The exchange operator first revealed plans to develop the custody solution in September along with the formation of its crypto business, Nasdaq Digital Assets. It expected to launch in the second quarter of this year as it waited for approval from the New York Department of Financial Services.
Crypto's custody problem is seen among institutions as the key to pushing the industry into the mainstream in a post-FTX world. Efforts have been underway this year to create new solutions that decouple the trading and custody functions of crypto exchanges.
The pause by Nasdaq comes as a minor disappointment for those who have been encouraged lately by the momentum around spot bitcoin ETF filings by BlackRock and other institutions, as well as the recent court ruling in the SEC's lawsuit against Ripple. Investors and other market participants were hoping some of the regulatory pressure that had weighed on the industry since the start of the year had been de-risked, and that allowing regulated products into the market might bring some clarity.
Meanwhile, Societe General's crypto arm received approval Wednesday from France's financial regulator to offer crypto services, including crypto custody. This adds to worries that the U.S. could lose its crypto edge as its regulators continue to crack down on the industry while other jurisdictions embrace it. | Crypto Trading & Speculation |
India's Growth Needs To Be In Tandem With Sustainable Economy: SEBI's Ashwani Bhatia
Speaking at an international finance conference on the 'Role of Financial Markets in Sustainable Growth through ESG Investments', Bhatia said, countries including India, have made a number of important commitments in the last few years to address climate change and moving to sustainable and inclusive economies.
India's rapid economic growth needs to be accompanied with the transition to a sustainable economy, SEBI's whole-time member Ashwani Bhatia said on Thursday and stressed that financial markets will play a critical role in promoting sustainable finance.
Speaking at an international finance conference on the 'Role of Financial Markets in Sustainable Growth through ESG Investments', Bhatia said, countries including India, have made a number of important commitments in the last few years to address climate change and moving to sustainable and inclusive economies.
The one-day conference was hosted by the Anjuman-I-Islam's Allana Institute of Management Studies in association with the BSE here. Anjuman-i-Islam has completed 150 years of its establishment this year.
"The Indian economy is at a stage of rapid growth. However, this growth needs to be accompanied with the transition to a sustainable economy. As regulators, we are putting in place holistic regulatory framework covering aspects of financing or disclosures and transparency," Bhatia said.
He said that this transition will be "complicated" and all the stakeholders -- investors, companies, regulators and civil society -- will have to coordinate and collaborate for its successful execution.
Noting that during the last few years there is a search in global efforts to address climate change and moving to sustainable and inclusive economies, he said countries including India have made a number of important commitments in this space.
"But commitments to act must be underpinned by funding. As per an estimate, a total investment of $10 trillion would be needed to meet India's commitments by 2070 to have zero carbon footprint," he said.
India is the first geography to start social stock exchange and to have a framework for assurance and ESG disclosures for value chain, Business Responsibility and Sustainability Reporting (BRSR) to ensure all the work that is done is sustainable in all manners, Bhatia said.
SEBI has also prescribed the light path for the implementation of the parameters, he said, adding that top 150 listed entities will have to make a reasonable assurance on BRSR in FY24.
"It will start with 150 and by 2026 we will touch 1,000 listed entities. The disclosures also require people in the value chain and your vendors to make limited assurance from the next fiscal onwards," he said.
ESG rating, Bhatia, said is another area, which is drawing SEBI's regulatory attention.
Emphasizing that the capital market plays a key role in the country's economic development, he said as the country pivots to sustainable and inclusive growth, our market will play a critical role in promoting, sustainable finance.
He said that SEBI has done considerable work on green bonds, adding that in 2017, it laid the regulatory framework for the bonds as an avenue for channelising funds in green activities.
"Unfortunately, we only have 15 issuances with approximately Rs 4,600 crore. If you compare this, on an average, every year the debt market raises Rs 7-lakh crore.
"But on the green side we are way behind. In the backdrop of increasing interest in sustainable finance, SEBI has recently undertaken a review of the regulatory framework for green-tech securities," he said.
Bhatia also said that the scope of definition of green has been enhanced to include other modes of sustainable finance in relation to pollution, prevention and control, eco-efficient products.
"We have introduced concepts of Blue bonds, which look after water, yellow bonds for solar energy and transition bonds, funds raised for transitioning to a more sustainable form of operations, like the metro rail, among others," he said. | India Business & Economics |
Media caption, 'He was in a terrible state and very lucky to be alive'The sister of a man who is facing a large medical bill after a motorbike crash in Thailand has urged others to check their travel insurance policies.The Boxing Day crash left 28-year-old Adam Davies with serious injuries, including a fractured skull.Adam, from Dinas Cross, Pembrokeshire, now faces large medical costs which are not covered by his travel insurance.His provider, Lloyds Bank encouraged customers to check the terms and conditions of their insurance.Adam's family have raised £20,000 to pay for treatment, but have warned others to check their policy's fine print.Adam's sister Jess Davies, 30, said while her brother had worldwide travel insurance, the policy would not pay out for medical expenses as he had been away from the UK for more than 31 days. Following the crash on the island of Ko Tao, he remains in a hospital in Koh Samui, with his parents at his bedside.In addition to fractures to his skull, he has bleeding on the brain, a punctured lung, broken ribs, a broken clavicle, a broken scapula and a fractured ankle.Image caption, Jess Davies said her brother had no idea of the clause in his travel insurance policy which meant his medical bills would not be covered"He was on a little island and he was driving a scooter and he just, I think he came round a bend and just went straight in to an electric pole," said Jess."We didn't find out until it was 24 hours after. He had to be shipped to another island because there was no hospital there and he had multiple injuries, some major injuries and his insurance wouldn't cover him."Jess has managed to raise £20,000 for her brother through an online fundraising page, but she is urging other travellers to be more cautious.Image source, Family PhotoImage caption, Adam's parents, Alison and Graham, are hoping to stay with him in Thailand until he is well enough to travel home to Wales"It was something in the small print. He took out an insurance policy which enabled him to travel worldwide, that's how it was sold. But it would only insure him for one country for 31 consecutive days."She's urged others to study the "small print" of policies before travelling."I know it's annoying to look through… nobody really reads the small print, but I urge everybody to do it. Even if it takes half an hour, it's worth it. Family friend, Lucie Macleod, 23, said no one expected the policy to have such a clause, which is why it is important to read the whole thing.Image caption, Lucie Macleod said it felt like a "no-brainer" to get travel insurance with your existing bank, but it's important to read the policy"Nobody would have ever thought that one of the caveats would be that every 30 days you would have to land back in the UK," said Lucie."It was worldwide insurance, and for a year. It seemed convenient to have the same bank and same insurance. Everybody should definitely read the small print."'Overwhelmed' by support Jess has thanked the hundreds of people that have raised the more than £20,000 for her brother's medical care."People worldwide have helped out and we're just amazed and overwhelmed by all the help we've had really and the support," she added."It reached the target within 24 hours, which was £15,000, and it's up to £20,000 now and keeps on climbing. We are just so grateful and so blessed to have all this help and support."Image source, Family photoImage caption, Adam Davies bought worldwide travel insurance for a trip to Thailand, but was caught out after he was injured by a clauseAdam's parents, Alison and Graham, are hoping to stay in Thailand until he is well enough to travel home to Wales.A spokesperson for Lloyds Bank, Adam's insurer, said: "We would always encourage customers looking to travel abroad for an extended period of time to check the terms and conditions of their insurance, whether that's been provided through their bank account or purchased separately. "Most providers, including Lloyds Bank, will make it clear what is covered under your policy when you first take it out, and send annual reminders to make sure it remains suitable for you." | Personal Finance & Financial Education |
Trump Org’s Fraudulent Statements Cost Banks $168 Million in Interest, AG’s Financial Expert Testifies
New York Attorney General Letitia James' lawsuit sought disgorgement of up to $250 million in 'ill-gotten gains'
The Trump Organization's fraudulent statements of financial condition may have cost banks more than $168 million in interest, which they could have made had they known the former president's true wealth, an expert hired by the New York attorney general's office testified on Wednesday.
Before the civil trial began, Manhattan Supreme Court Justice Arthur Engoron in late September found Donald Trump liable on the top count of fraud. The judge's ruling ordered the dissolution of any entity belonging to the former president, his sons Eric and Donald Trump Jr., and business associates Allen Weisselberg. The ongoing trial will determine whether they will also be forced to disgorge any ill-gotten gains, and if so, in what amount.
New York Attorney General Letitia James' lawsuit estimated that Trump owed up to $250 million in ill-gotten gains, but her top expert Michiel McCarty arrived at a lower figure during his testimony on Wednesday.
McCarty, the chairman and CEO of the investment bank M.M. Dillon & Co., was hired by the state to come up with what he described as lost interest calculations for the banks that provided loans to the Trump Organization.
Trump has long argued that sophisticated parties negotiated the transactions, and everybody made money. The attorney general countered that the banks approved loans on favorable terms, based on fraudulent statements of financial conditions (SFCs).
In his dissolution order, Engoron summarized that argument in a footnote.
"The subject loans made the banks lots of money; but the fraudulent SFCs cost the banks lots of money," the footnote states. "The less collateral for a loan, the riskier it is, and a first principal of loan accounting is that as risk rises, so do interest rates. Thus, accurate SFCs would have allowed the lenders to make even more money than they did."
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Using that reasoning, McCarty tabulated lost interest calculations based on loans to various Trump Organization properties like the Doral golf resort in South Florida, the development of the Old Post Office into a luxury hotel in Washington, D.C., his Chicago hotel and residential tower, and 40 Wall Street.
The witness calculated the grand total of that lost interest: $168,040,168.
After McCarty’s testimony, Donald Trump Jr. will become the first of four Trump family members to take the stand. He will be followed by Eric Trump, former President Donald Trump, and Ivanka Trump.
Engoron may also decide to bar Trump, his two sons, and his business associates from serving as officers and directors of a New York corporation.
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SBF Admits To A Bigger Role At Alameda Under Tough Questioning
Bankman-Fried faces decades in prison on charges that he directed the transfer of FTX customer money into Alameda.
(Bloomberg) -- Sam Bankman-Fried, the co-founder of FTX, told a New York court he was aware that Alameda Research hadn’t taken steps to properly hedge its risk even as he approved billions of dollars of investments before both companies collapsed last year.
Assistant US Attorney Danielle Sassoon used Bankman-Fried’s past interviews and other statements to undermine his attempts to distance himself from decisions at the hedge fund, which was affiliated with his FTX crypto platform. She focused on money Alameda paid out in the summer of 2022.
“At the time Alameda repaid its lenders you knew that Alameda had not hedged?” Sassoon asked Tuesday. “I knew around then,” he replied. “I can’t remember the exact date.”
Bankman-Fried faces decades in prison on charges that he directed the transfer of FTX customer money into Alameda for investments, political donations and expensive real estate before both companies filed for bankruptcy. The 31-year-old made the risky decision to testify in his own defense, in hopes of countering the testimony of five former FTX officials — including some of his closest friends — who took the stand to incriminate him.
Bankman-Fried’s performance on Monday started out much better than when he last faced questions from Sassoon, outside the presence of the jury, in a hearing on Thursday. Mostly gone were the overlong, evasive answers, replaced mostly with “yes” or “no” — frequently, a clipped “yep” or “nope.”
But as the afternoon progressed and Sassoon’s questioning got closer to FTX’s November 2022 failure, the phrase “not sure” became much more prevalent, earning him at least a half a dozen admonitions from the judge to answer questions more directly.
“From the early days of FTX, Alameda was allowed to exceed normal borrowing limits on FTX, yes or no?” Sassoon asked.
“I’m not sure,” he replied.
Sassoon, who will wrap up cross-examination Tuesday, confronted Bankman-Fried with many of his public and private statements that contrasted with the story he’d like the jury to believe about his role in the collapse of the FTX crypto exchange.
After asking Bankman-Fried about his claimed support for some regulation of the crypto industry, Sassoon pulled out a Twitter direct-message exchange between him and a Vox reporter in which he had said ”f**k regulators.”
“You wanted your followers to think consumer protection was important to you?” Sassoon asked.
“Yep,” Bankman-Fried answered.
Sassoon tried to paint Bankman-Fried as a story teller who shaped his direct testimony after months of reviewing the government’s evidence against him.
Over several hours, Sassoon methodically led Bankman-Fried through dozens of comments he made on Twitter, in press interviews, before Congress and on Slack.
Earlier Monday, just before his lawyers finished their questioning, he tried to explain why he gave a raft of interviews in the days and weeks after FTX’s failure.
“I felt like I wanted to apologize about what happened,” he said.
His parents Barbara and Joe took notes from the public gallery while author Michael Lewis, who recently published a book about Bankman-Fried and FTX, sat behind them. Ben McKenzie, the actor best known for playing Ryan in “The O.C.” and who published a book critical of crypto earlier this year, was also in the courtroom.
Bankman-Fried’s testimony has been a major inflection point in the trial, with reporters lining up all night in the cold and rain to secure one of 20-odd press seats inside the 26th-floor courtroom.
At other times the prosecutor tried to challenge his public image, questioning the reasons behind his disheveled hair and outfits.
“You think of yourself as a smart guy?” she asked. “In many ways, not all ways,” he replied.
“You thought highly of yourself?” she asked. “I did,” he said.
--With assistance from Ava Benny-Morrison.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
As inflation cools down, the odds are heating up that Social Security benefits won't rise as dramatically next year as they did in 2023.
Retirees likely could be looking at a cost of living adjustment somewhere in the 3% range — less than half of the COLA increase they saw in 2023, according to forecasts by the Senior Citizens League, a nonpartisan advocacy group. The group monitors inflation data to offer forecasts of potential COLA changes ahead.
Another estimate is expected to be released on Sept. 13 and could be higher or lower, depending on new inflation data for August. An exact percentage for the inflation adjustment will be known in mid-October.
The cost-of-living adjustment that was payable in 2022 was solid at 5.9%, too.
No one should bank just yet on how much of an increase they might see in their Social Security benefits next year. Yet, some observers expect that an increase in the range of 2.7% to 3.2% remains a strong possibility.
"We are returning to reality," said Mary Johnson, a policy analyst at the Senior Citizens League who oversees estimates regarding inflation adjustments for Social Security.
"However," she said, "the 3% is still above average."
In the last two decades, Johnson noted, the average inflation adjustment for Social Security benefits was 2.6%. Three years included no adjustment at all or 0% for inflation — 2010, 2011, and 2016.
The inflation adjustments were modest before the COVID-19 pandemic hit, the supply chains unraveled and federal stimulus payments flooded cash into the economy. During 2020, the inflation adjustment for Social Security benefits was 1.6%. It was followed by a 1.3% hike to payments in 2021.
Even so, Johnson noted, when you compare an estimated 3% against last year's 8.7% hike, for many seniors on tight budgets it "will feel like drowning."
How inflation drives up Social Security checks
A specific formula, spelled out in the Social Security Act, will be used to calculate the upcoming inflation adjustment based on monthly changes for July, August and September for the Consumer Price Index for Urban Wage Earners and Clerical Workers.
The U.S. Bureau of Labor Statistics will release inflation data for August at 8:30 a.m. Sept. 13. The September data will be released Oct. 12.
The most recently released data showed an increase of 3.2% in the consumer price index in July over the past year.
The Consumer Price Index for Urban Wage Earners and Clerical Workers or CPI-W increased by 2.6% over the last 12 months through July.
To calculate Social Security adjustments, inflation figures based on the CPI-W for July, August and September are added together and averaged.
As inflation continues, this year's third-quarter average will be compared with the third-quarter average from one year ago. The percentage difference between the two is the amount of the COLA, which would be payable for the check received in January 2024, according to an explanation by the Senior Citizens League.
If the COLA ends up at 3%, as the advocacy group now expects, the average monthly Social Security retirement benefit would increase by roughly $55 a month. The average monthly benefit for all retired workers was $1,827 in January after the COLA adjustment this year, according to the Social Security Administration. Add up the extra $55 over 12 months and some could be looking at an extra $660 a year.
In 2023, the COLA adjustment added up to an extra $146 a month based on an average benefit of around $1,681 a month for all retired workers. On a yearly basis, that kind of COLA adjustment added up to an extra $1,752 over 12 months.
About 71 million people nationwide received Social Security benefits and/or Supplemental Security Income benefits as of June, according to Social Security data.
What is the outlook for inflation?
Some economists don't expect inflation to drop in a straight line going forward. But the expectation is that inflation overall is likely to continue to fade after 11 interest rate hikes by the Federal Reserve since March 2022.
Inflation might bump up some and rebound if we see rapid wage growth that would contribute to higher prices for some goods down the line.
The year-over-year consumer price index might go up about 3.6% to 3.7% in August and rise around 3.5% to 3.6% in September, according to a forecast by Omair Sharif, founder and president of Inflation Insights in Pasadena, California. That would be up from July's year-over-year 3.2%.
"It will likely drop back in October and November," Sharif said.
Comerica Bank's chief economist is forecasting that the Federal Reserve will pause and not raise interest rates at its next two-day meeting on Sept. 19 and Sept. 20. But Comerica then expects the Fed to raise the short-term federal funds rate target by a quarter percentage point after another two-day meeting ends Nov. 1.
After a November rate hike, according to the Comerica forecast, the Fed could shift gears and begin cutting interest rates during the first six months of 2024.
Bill Adams, chief economist for Comerica Bank, said Comerica is forecasting that the consumer price index is likely to be around 3.3% in year-over-year terms in September. If so, Adams said, that would correspond to CPI-W of around 3%.
Why some retirees need to prepare for bigger tax bills
Retirees who are collecting Social Security — and receiving a pension or tapping into 401(k) savings — are likely to grumble more when it comes to their 2023 tax returns.
The taxes are complicated when it comes to Social Security benefits but unfortunately, many retirees need to review them.
If you file as an individual, you may have to pay income tax on up to 50% of your Social Security benefits if the calculation for what's called your combined income ends up between $25,000 and $34,000.
Your combined income is your adjusted gross income, plus non-taxable interest, plus half of your Social Security benefits.
If you file a joint return, you may have to pay income tax on up to 50% of your Social Security benefits if your combined income: is between $32,000 and $44,000.
In some cases, the IRS guidelines note, up to 85% of your Social Security benefits can be taxable if either of situation applies:
• The total of one-half of your benefits and all your other income is more than $34,000 if filing as an individual or $44,000 if you are married, filing jointly.• You are married, filing separately, and lived with your spouse at any time during the calendar year.
Taxpayers can review IRS Publication 915 for information on Social Security benefits and federal income taxes.
April Walker, lead manager for tax practice and ethics with the American Institute of CPAs, said the inflation-driven boost to Social Security benefits paid in 2023 would certainly increase the amount of the total combined income, all other things being equal, used to calculate any taxes on Social Security benefits when people file federal income tax returns in 2024.
“Since the (tax) thresholds are not adjusted for inflation,” Walker said, “more seniors could have to pay taxes on a percentage of their Social Security.”
Up to 50% of Social Security benefits first became taxable in 1984. The second tier, where up to 85% of Social Security benefits could be taxable, became effective in 1993. At that time, the tax was described as only affecting “high-income" seniors, Johnson said.
Unlike income tax brackets, Johnson notes, those income thresholds relating to taxing Social Security benefits were never adjusted for inflation. As a result, she said, over time a growing number of older taxpayers are winding up paying taxes on Social Security benefits as incomes grow and they pay tax on a larger portion of their Social Security benefits.
Today, Johnson said, even retirees with modest middle incomes pay a tax on a portion of their benefits, which can grow bigger with COLA increases.
Yet, Johnson noted, that changing how Social Security benefits are taxed can be lead to a complex debate because the revenue from the taxes create an important source of funding for the Social Security and Medicare trust funds.
Why you won't necessarily see an extra $55 a month
To be sure, someone who is receiving $1,000 a month in Social Security retirement benefits now — say if they retired before their full retirement age or did not work many years — would only see a $30 increase based on a 3% hike.
And, again, we don't know the exact COLA calculation just yet so the hike could be lower than 3%.
And key to many Social Security recipients: Those who are on Medicare will not know the bottom line of a COLA boost until new Medicare Part B premiums are announced later in 2023. That extra premium cost will take a chunk of money out of any COLA hike.
The Medicare trustees projected in March that the standard monthly Part B premium could go up $10 a month to $174.80 in 2024 for the standard monthly premium. A final number could be released in November or earlier.
Johnson expects that another $5 could be added to premiums to cover significant new administrative and monitoring costs associated with a new Alzheimer’s drug, lecanemab, which comes with an extremely steep price tag and is known by the brand name Leqembi. The drug is expected to cost around $26,000 per year without insurance.
This article originally appeared on Detroit Free Press: Social Security COLA benefits increase for 2024: What predictions say | Inflation |
By many accounts, the American economy is doing pretty well. The stock market is at an all-time high and unemployment sits at just 3.9%, both numbers that are especially impressive given that we are approaching the third year of the COVID-19 pandemic which has caused massive interruptions to normal life, including financially. Still, a recent survey from retirement services provider Empower Retirement and financial services company Personal Capital finds that only 34% of Americans consider themselves “very financially healthy,” a 14% drop from March 2021.
“It’s a fact of life that forces in the economy are going to impact how confident people feel about their finances,” said Empower President and CEO Edmund F. Murphy III in a press release. “Periods like this represent opportunities for savers to become even more engaged in their finances and seek the advice they need to help reassure them in their financial plan or put them on a path to help drive renewed confidence. (If you want help making sure you’re financially secure for the future, consider finding a financial advisor using SmartAsset’s free financial advisor matching service.)
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Why Are People So Unconfident?
There isn’t a simple explanation as to why so many people are losing confidence in both their personal financial situation and the economic picture for society as a whole. There are a few economic indicators, though, that may give at least part of the picture.
“It’s a complicated picture to describe what’s happening to the economy,” says Craig Birk, chief investment officer at Personal Capital. “The labor market is strong and retail growth is ticking upwards, but we’re also dealing with recent market volatility and record high inflation. It’s unsettling for many.”
Inflation especially has been in the news a lot in recent months, and it can certainly cause people to feel as though the money they have won’t go as far towards meeting their needs, let alone allowing them to save for the future. Experts are divided as to what inflation will look like on 2022, so this concern may or may not come to bear.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
What You Need to Feel Financially Secure
At the end of the day, only one thing really makes people feel financially secure -- having enough cold, hard cash on hand to guarantee you can weather most storms that life may throw at you or at society as a whole. This begs the question, then -- how much money does it take to feel financially secure?
The survey found that a person needs to earn $128,000 a year in order to feel financially secure. Of course, this number may be impacted by any number of other factors including the cost of living where you reside, potential family money and previous savings. Still, that is a fairly high number -- the Census Bureau found that the median household income for 2020 was just $67,521.
What Are Americans Doing for Financial Health in 2022?
Even though many Americans don’t feel financially secure, that doesn’t mean families aren’t taking steps to get more financially healthy in the coming year.
According to this study, the following are the top five financial goals Americans have for the coming year:
1. Paying off debts
2. Saving for retirement
3. Building an emergency fund
4. Getting a new job
5. Paying for college
Other goals that aren’t about personal finance include losing weight, exercising more, buying a new car and purchasing a home -- though, of course, all of these can indirectly impact a person’s personal finances.
The Bottom Line
Though there are some good markers to the economy right now, many Americans don’t feel financially secure, and that number has actually dropped since last year. In fact, you need to earn $128,000 a year to feel financially secure, nearly double the median household income nationwide.
Financial Planning Tips
A financial advisor can help you build financial confidence. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in 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/insta_photos | Personal Finance & Financial Education |
Warren Buffett-backed Occidental Petroleum (OXY) reportedly leads a pack of contenders vying to close a deal for a privately held Permian Basin oil producer. OXY aims to increase its share of the consolidating Permian Basin pie, following the significant recent M&A moves by energy giants Exxon Mobil (XOM) and Chevron (CVX).X
Occidental Petroleum is in discussions to purchase the privately-held CrownRock in a deal valued at more than $10 billion, according to the Wall Street Journal.
The Warren Buffett stock edged up 0.2% to 60.44 Thursday during market action. On Wednesday, OXY shares gained 0.45% to 60.33.
CrownRock is headed by billionaire Timothy Dunn, and backed by the private-equity firm Lime Rock Partners. The company owns more than 80,000 acres in the northern part of the Midland Basin in Texas, part of the prolific Permian Basin. CrownRock produces about 150,000 barrels of oil equivalent a day, according to the WSJ report.
As of August, Warren Buffett-backed OXY was the number-three producer in the Permian Basin, according to Enverus data.
Exxon Mobil firmed up its Permian Basin holdings with a $60 billion deal for Pioneer Natural Resources (PXD) in October. Chevron quickly followed up with its $53 billion purchase of Hess (HES), expanding its ownership in offshore Guyana. Warren Buffett also holds a nearly 6% stake in Chevron.
Following that rash of top tier consolidation, smaller energy companies have reportedly sought acquisitions in the Permian Basin. CrownRock — among the last large-scale privately owned producers in the region — has been a key target, according to the Wall St. Journal.
Warren Buffett And OXY
Occidental Petroleum's last major purchase was the $38 billion acquisition of Anadarko in 2019. Management was roundly criticized for adding debt to the balance sheet just before the onset of the Covid-19 pandemic.
Warren Buffett's Berkshire Hathaway (BRKB) holds a 25.78% stake in Houston-based Occidental Petroleum. Buffett told shareholders earlier this year he has no intention of taking over the company.
OXY has dropped more than 2% in November and has fallen 4% in 2023. Occidental stock has a 37 Composite Rating out of 99. The Warren Buffett stock also has a 42 Relative Strength Rating and a nine EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage. | Energy & Natural Resources |
Families will be £1,900 poorer at the end of this parliament compared with the beginning, a think tank has said.
The Resolution Foundation said this government would set a "grim" new record for living standards going down.
It also said Chancellor Jeremy Hunt's Autumn Statement changes, including a National Insurance cut, handed the next parliament "implausible" cuts to public sector spending.
But Mr Hunt said the tax cuts would put "more money in people's pockets".
Responding to the Autumn Statement, the Resolution Foundation said that with the next general election due within the next year, "this parliament is on track to be the first in which real household disposable incomes have fallen".
The independent think tank, which focuses on improving living standards for those on low to middle incomes, said Mr Hunt's plans "failed to end a wider economic stagnation".
It said people's purchasing power had been stagnating for 20 years, and that recent pay rises just reflected the reality of higher inflation.
Despite "tax-cutting rhetoric" and about £20bn of tax cuts announced in the Autumn Statement, there had already been £90bn of tax rises announced by the government - so taxes are rising by the equivalent of £4,300 per household between 2019-20 and 2028-29, the think tank said.
The chancellor managed to make these cuts at the expense of not raising public spending in line with the pace of general price rises, meaning departments such as justice, local government and the Home Office face a £17bn budget cut by 2027-28, it added.
The Office for Budget Responsibility (OBR), the government's independent economic forecaster, said that the amount of tax households pay would go up in general.
Richard Hughes, the chair of the OBR, said the tax burden was going up "to its highest level in the post-war era".
"Over the medium term, the combination of higher inflation and frozen tax thresholds means that the tax burden for this country is going up," he said.
The chancellor was able to cut certain taxes because he hadn't changed public services spending plans.
This means that government departments will face a cut in spending power of about £20bn, Mr Hughes said.
"That's roughly equal to the amount of money the chancellor has given way in tax cuts," he said.
Speaking to the BBC on Thursday, Mr Hunt said: "Taxes have gone up, but I want to start bringing them down."
He said the government had been right to help families during the coronavirus pandemic with the furlough scheme, and with energy bills during the cost of living crisis.
He added that tax rises were not long-term and that after the National Insurance cuts, "there's going to be more money in people's pockets".
Mr Hunt said he had chosen to cut National Insurance to get more people into work, and that the measure would help fill one in 10 job vacancies.
He said he did not know whether real incomes would be down, but that the pandemic and the effects of Russia's war in Ukraine had had an impact.
But he said the government plans to boost the economy by making business more competitive.
"If we want to bring the tax burden down, we have to grow the economy," he added. | United Kingdom Business & Economics |
Jeremy Hunt has blamed Brexit for more than half a decade of political instability that has undermined business investment in the UK, as he sought to defend tax cuts paid for by public sector austerity to drive up economic growth.
The chancellor said the outcome of the 2016 EU referendum had led to “political chop and change”, before the Covid pandemic added to turbulence at the heart of government.
Asked at an event hosted by the Resolution Foundation thinktank and London School of Economics’ Centre for Economic Performance (CEP) if he recognised that political instability had damaged business investment, Hunt said there were “very particular reasons why we’ve had that”.
“We had Brexit. That led to a hung parliament; that led to a politically incredibly challenging time,” he said. “British people had voted to leave the EU but parliament couldn’t agree how; and ultimately we had the fall of Theresa May’s government. And then we had the pandemic.”
His comments come after researchers at the Institute for Public Policy Research (IPPR) thinktank found more than a decade of “flip-flopping” through nine business secretaries, seven chancellors and 11 different economic strategies had damaged business investment in the UK.
Acknowledging that there had been changes in Whitehall triggered by Brexit, the chancellor said Rishi Sunak’s government had stabilised the economy after the meltdown triggered by Liz Truss’s mini-budget a year ago. “I hope we have more stability going forward because absolutely that’s a better thing,” Hunt said.
The chancellor was speaking at the launch of the Resolution Foundation and CEP’s Economy 2030 Inquiry final report, which said British workers were missing out on £10,700 a year after 15 years of relative decline on the world stage. Defending last month’s autumn statement, Hunt argued that offering £20bn of tax cuts to workers and businesses could help to boost economic growth by filling labour market vacancies and encouraging companies to invest.
Challenged that his plans included real-terms cuts to public sector funding, the chancellor said he was prioritising economic growth to raise more tax income for the exchequer. “These are tax cuts that stimulate growth,” he said. “I am a Conservative. I would like to reduce the size of the state as a proportion of GDP.”
Hunt challenged Labour to meet its pledge to balance the government finances through reducing the UK national debt as a share of the economy. “Its not possible to meet our fiscal rule to reduce debt in five years and to increase borrowing by £28bn a year within five years. One of those things has to be false,” he said.
Speaking to a room packed with the nation’s leading economists and policymakers – including current and former officials from the Bank of England, Treasury and Office for Budget Responsibility – Hunt’s comments came before Keir Starmer was due to tell the same event that Labour would not “turn on the spending taps” if it won the next election.
Bolstering the view of some senior Labour MPs that their party leader is preparing to sign up to austerity-style public sector cuts, Starmer will say it is “clear that the decisions the government are taking, not to mention their record over the past 13 years, will constrain what a future Labour government can do”. | United Kingdom Business & Economics |
Sapphire Foods - Business Model Intact; Equally Focused On Both Formats: Motilal Oswal
Rational approach towards store additions
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
We factor in a revenue/pre-Ind accounting standard Ebitda compound annual growth rate of 23%/30% over FY23-25E. Sapphire Food India Ltd. trades at an inexpensive multiple of 19 times FY25E pre-Ind AS Ebitda.
We have assigned an FY25E enterprise value/Ebitda (pre-Ind AS 116) multiple of 25 times to the KFC business, based on its robust metrics (average daily sales and restaurant Ebitda margin), and 15 times to the Pizza Hut business.
These multiples are at 50% discount to the target multiples of Devyani International Ltd..'s KFC/Pizza Hut businesses (50 times/30 times) due to the following difficulties that Sapphire faces in terms of trade:
Sapphire’s territorial rights in KFC are primarily in states with a relatively higher vegetarian population, and
Devyani International can venture into Sapphire's territories with PHD format stores, which require lower capex.
While a discount to its multiples is justified given the aforementioned challenges, the earnings growth opportunity for Sapphire is still attractive enough to warrant an investment case despite the near-term uncertainty regarding demand recovery.
Reiterate 'Buy' with an SoTP-based target price of Rs 1,670.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Splits have begun to appear in the Conservative Party over the Government’s announcement that it will grant new licences for oil and gas drilling in the North Sea.
Former Cabinet energy minister Chris Skidmore – who has been vocal in his opposition to new oil and gas drilling – said in a statement on Monday that the move puts the UK “on the wrong side of history”.
Writing on Twitter, the Kingswood Tory MP said: “This is the wrong decision at precisely the wrong time, when the rest of the world is experiencing record heatwaves.
“It is on the wrong side of a future economy that will be founded on renewable and clean industries and not fossil fuels.”
He also warned that voters will “vote with their feet at the next general election” and would favour “parties that protect, and not threaten, our environment”.
Mr Skidmore added that the announcement put the party “on the wrong side of history” and warned future generations “will not look favourably on the decision taken today”.
He went on to express concern that the announcement was made during Parliament’s summer recess, with MPs not set to return to the Commons until 4 September.
“Worryingly, this decision has also been announced when MPs are on recess, unable to hold the Government to account,” he said.
“I will be writing to the Speaker to call for an emergency debate as soon as we return.”
The Government announced on Monday it will be issuing at least 100 new licences for oil and gas drilling in the North Sea this autumn.
In a statement, Energy Secretary Grant Shapps said the move would “drive forward our energy independence and our economy for generations”.
Speaking on BBC Radio Scotland’s Good Morning Scotland programme, Mr Sunak said that the move would help the UK reach net zero emissions by 2050.
“Even when we reach net zero in 2050, a quarter of our energy needs will still come from oil and gas,” he said.
He added that using domestic oil and gas would be better for the environment than importing it.
The move was welcomed by former Tory leader Sir Iain Duncan Smith, who said that the Government is “being honest about what we have to do” to reach net zero.
He told Sky News: “These carbon targets, we’re sort of sloping our shoulders and passing them on to other people by buying gas at higher prices [from other countries].
“We need to have energy security in the UK, and so that means the North Sea […] It’s far better that we’re honest about that, we drill for that here, because in essence, that’s the position that we know what we’re producing, but we’re owning it as well.”
Sir Iain added that extracting oil and gas from the North Sea will help to get inflation and therefore the cost of living down, as it should make energy cheaper for consumers.
He is among a group of 43 Conservative MPs and peers who have expressed their concern over the 2030 target for the phasing out of new petrol and diesel cars.
In a letter to the Prime Minister on Saturday, the group argued that the policy was “heavy-handed” and would do “grave harm to the economy”.
Speaking to Sky News on Monday, Sir Iain said: “The 2030 target was plucked out of nowhere and just lobbed at the agenda in a way that didn’t have any rationale.
“The fact is that we have to get our industry through this process of converting over to possibly even hydrogen.
“If you want to get to clean emissions, you’ve got to do it in a way that still keeps our industry going in the UK.” | Energy & Natural Resources |
Hundreds of well-wishers, including scores of Saltire-waving schoolchildren, lined the streets of a Scottish town to catch a glimpse of the King on a visit to a community day centre.
The King criss-crossed Kinross High Street in Perthshire to shake as many hands as he could amid cheers and flag-waving as he made his way towards Kinross Day Centre on Friday.
Kinross & District Pipe Band performed a selection of songs to mark his arrival, including Scotland The Brave, and continued to play as he progressed down the street.
Inside the day centre, dozens of senior citizens gave the King an enthusiastic three cheers as he unveiled a plaque to mark its 40th anniversary.
Volunteers at the centre regularly serve a three-course meal to up to 40 pensioners every weekday as well as run a meals on wheels service for other elderly residents.
The King spoke to several pensioners patiently awaiting their pork lunch, and was overheard saying to one volunteer he quite fancied one of the flans made in the kitchen.
He was also heard to joke to a group sitting at one table: "At least they don't make you do the washing up."
The King met volunteer Ailsa Smith, who revealed her father Alan was the original founder of the centre 40 years ago.
She said her father secured the funding needed to convert the former church for the benefit of the community after he learned there were plans afoot to use it as a potato store.
Reflecting on her chat with the King, Ms Smith said: "He was charming to speak to. He was very interested in the centre and how my parents started it and the family connection."
Speaking about herself and the team behind the day centre, she added: "I'm very proud to be a volunteer here - they do so much for the community here, well above their remit."
Local minister Reverend Alan Reid, chair of the day centre's committee, made a short speech ahead of the King unveiling the 40th anniversary plaque.
Read more:
King wears new tartan during visit in Scotland
King Charles and Queen Camilla attend Braemar Gathering
Earlier, the King was formally welcomed to Kinross by a number of local dignitaries including lord-lieutenant of Perth and Kinross Stephen Leckie, and Perth and Kinross provost Xander McDade further up the road at St Paul's Episcopal Church.
There, the King met and spoke with Annie McCormack and Clare Slight, two of the founders of local anti-poverty charity Broke Not Broken, which provides food parcels to people and families in need.
He was given an overview of the charity's work while looking over the organisation's food store within an outbuilding at the church, which Ms Slight explained was bought for just £1 when the group was founded.
The King was overheard to remark that he was impressed with the size of the leeks when he took a tour of the group's garden nearby, where volunteers grow their own vegetables.
Ms McCormack said demand for food parcels has soared in recent times due to the cost of living crisis and the charity is grateful for all donations it receives.
"It's higher now than it was during COVID," she said.
"Everything is going up and a lot of people with jobs are coming to use the food bank now.
"We're giving out hundreds of parcels a month and spending between £500 and £1,000 a week buying in enough food to meet that demand." | Nonprofit, Charities, & Fundraising |
Manchester United Football Club and Sir Jim Ratcliffe, the petrochemicals billionaire, aim to announce within days a £1.25bn deal that will see him take a 25% stake in the Red Devils.
Sky News understands that the two sides have pencilled in early next week to confirm the long-awaited transaction, which will involve Sir Jim's Ineos Sports taking two boardroom seats at Old Trafford.
Sources said the timetable could yet slip again, but that an announcement early next week was now expected by both United and Ineos.
Neither Sir Jim nor Sir Dave Brailsford, the former cycling supremo who heads Ineos's sporting operations, is expected to join the club's public company board.
The $33-a-share deal, which Sky News revealed details of last month, will be structured as a tender offer to acquire 25% of the listed A-shares.
The Glazers will also sell 25% of their B-shares, which carry greater voting rights, to Sir Jim as part of the deal.
Sir Jim Ratcliffe plans to commit $300m (£245m) from his multibillion pound fortune to United's ageing infrastructure as part of the transaction, with the bulk of that capital being handed to the club in the near term.
However, United's home is likely to need far more than £245m to deliver the overhaul that is required to turn it into one of the world's elite football stadia once more.
It will be financed personally by the billionaire and will not add to Manchester United's existing borrowings.
Sir Jim's purchase of a 25% stake in the Red Devils will be confirmed more than a year after the Glazer family, which has controlled the club since 2005, began formally exploring a sale.
Adding together the cost of the stock purchase and the other capital for investment means that Sir Jim will be committing about £1.5bn on day one of his partial ownership of United.
The deal was reached in principle after months of negotiations with several potential buyers, including the Qatari businessman Sheikh Jassim bin Hamad al-Thani, who wanted to acquire full control of the club.
Reports have suggested that Ineos will take immediate control of the playing side of the club, where pressure is mounting on the men's first team coach, Erik Ten Hag, amid a stuttering European campaign and the team's latest Premier League defeat at the weekend.
Sir Jim is understood to be committed to investing additional sums in future, although it is unclear whether these will be publicly discussed at the time of the stake purchase.
Several other key questions remain about United's future ownership, including whether Sir Jim will ultimately seek overall control of the club.
Some United fans have expressed disquiet at the prospect of Sir Jim buying a minority stake given that it paves the way for the Glazers' continued presence at Old Trafford.
The family, who paid just under £800m to buy the club in 2005, has remained inscrutable throughout the process and has said nothing of substance to the NYSE since the process of engaging with prospective buyers kicked off last November.
Read more from Sky News:
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CBI faces autumn deadline to refinance rescue funding
Earlier iterations of Sir Jim's offers for the club, which focused on gaining outright control, included put-and-call arrangements that would become exercisable three years after a takeover to enable him to buy out the remainder of the club's shares.
The Monaco-based billionaire, who also owns the Ligue 1 side Nice, pitched a restructured deal in October in an attempt to unblock the ongoing impasse over United's future.
In addition to the competing bids from Sir Jim and Sheikh Jassim, the Glazers received several credible offers for minority stakes or financing to fund investment in the club.
Part of the Glazers' justification for attaching such a huge valuation to the club resides in the possibility of it gaining greater control in future of its lucrative broadcast rights, alongside a belief that arguably the world's most famous sports brand can be commercially exploited more effectively.
The Glazers' tenure has been dogged by controversy and protests, with the absence of a Premier League title since Sir Alex Ferguson's retirement as manager in 2013 fuelling fans' anger at the debt-fuelled nature of their takeover.
Fury at its proposed participation in the ill-fated European Super League project in 2021 crystallised supporters' desire for new owners to replace the Glazers.
Confirming the launch of the strategic review last November, Avram and Joel Glazer said: "The strength of Manchester United rests on the passion and loyalty of our global community of 1.1bn fans and followers.
"We will evaluate all options to ensure that we best serve our fans and that Manchester United maximizes the significant growth opportunities available to the club today and in the future."
The Glazers listed a minority stake in the company in New York in 2012.
Ineos and Manchester United both declined to comment. | United Kingdom Business & Economics |
Tomato Puree Runs Out Of Stock On E-Grocery Platforms
Prices of tomatoes are currently retailing between Rs 100-200 per kg in different parts of the country.
Skyrocketing tomato prices have forced consumers to turn to alternatives like puree and ketchup to keep the kitchen budget intact. This has led to a supply dearth across supermarket shelves and grocery apps.
E-grocers such as BigBasket, Amazon, Flipkart and Zepto showed 'out-of-stock' for puree packs sold by Dabur India Ltd., Hershey's and Hindustan Unilever Ltd. The item was not reflecting in the menu of the Swiggy Instamart app.
Packs of tomato puree remain out of stock on Amazon and BigBasket.
Packs of tomato puree remain out of stock on Amazon and BigBasket.
An official from Dabur, who spoke on the condition of anonymity, confirmed a surge in demand for its tomato puree. The publicly listed consumer goods maker, however, refrained from sharing more details, citing a silent period before the quarterly earnings.
Tomatoes usually become expensive in the lean production months of June and July, but the impact this year has been excessive. Prices of tomatoes are currently retailing between Rs 100-200 per kg, in different parts of the country. In the Delhi-NCR region, retail prices remained as high as Rs 199 per kg on Friday.
The soaring prices are attributed to a combination of factors, including heatwave in key producing areas and heavy rainfall, that has disrupted harvests. However, the government has taken cognisance of the issue.
The central government has directed its agricultural marketing agencies—the National Agricultural Cooperative Marketing Federation of India Ltd. and National Cooperative Consumers' Federation of India Ltd.—to immediately procure the staple vegetable from mandis, in key growing states like Andhra Pradesh, Karnataka and Maharashtra, and sell it at a discounted rate till prices cool down. In Delhi, the kitchen staple will be sold at Rs 90 per kg, according to the consumer affairs department.
"We have seen a 300% spike in demand for Safal tomato puree in the last 15 days," said a spokesperson of Mother Dairy Fruit and Vegetable Pvt., adding that the company has ramped up production to avoid short supply.
Large eateries have also removed tomato-based items from their menus.
A few days ago, McDonald's also told its customers that it was "constrained" to drop tomatoes from its menu, due to a seasonal issue in procurement. However, it has also called it a "temporary" issue and said that the operators are working to get the supplies back. The Subway outlets in Delhi have also quietly removed tomatoes from their veggie list.
Analysts, however, don't expect any immediate relief from the high prices.
"The lack of change in headline inflation in June masks a sequential pick-up in food prices," Barclays said in a note. "There does not appear to be any immediate relief on the food price front, as perishable prices, especially for tomatoes, chillies, and some spices, continue to trend higher." | Inflation |
Petra, a crypto wallet built by Aptos Labs, is integrating Coinbase Pay onto its desktop and mobile applications in hopes of alleviating web3’s growing pains, the companies exclusively told TechCrunch.
To date, Petra has integrated into over 160 decentralized applications, including Pyth, LayerZero and PancakeSwap. This partnership aims to help alleviate the headaches that many web3 users have when it comes to onramps and offramps (among other things).
“Easy onboarding in web3 is critical,” Mo Shaikh, co-founder and CEO of Aptos Labs, said.
Fiat on and offramps are essential for onboarding millions of users into web3, Shaikh said. “It may seem obvious, but in order to grow the web3 ecosystem, everyday activities like financial transactions have to be easier. “Consumer adoption does not happen without it. Full stop.”
As non-finance use cases like gaming, e-commerce and loyalty programs reach enterprise categories, payments and crypto wallets will continue to be an important part of the web3 experience for onboarding users.
Crypto wallets are currently more centered around the average crypto user and not focused on new users looking to explore the space. Over time, though, making user experiences more accessible will open the doors wider to mainstream users, but whether or not those users will enter through those doors depends on a handful of other factors.
Partnerships and integrations like this one, especially those that aim to improve the user experience, are a step in the right direction, however, because as it stands, many crypto products and services are still technical and laborious.
Aptos also recently partnered with Microsoft to work on AI and web3 integration, as well as Sushi, a decentralized exchange and automated market maker, to help provide users access to non-Ethereum based chains.
Will Robinson, VP of engineering at Coinbase, feels the integration also points towards a multichain future.
By leveraging big name partners like Coinbase Pay, Petra can potentially add greater appeal, bring more users into the space and improve user experience and interoperability across chains and ecosystems, Shaikh said. | Crypto Trading & Speculation |
- Global stock markets fell sharply on Wednesday after ratings agency Fitch downgraded the United States' long-term foreign currency issuer default rating from AAA to AA+.
- Hentov was part of the Standard & Poor's team that famously downgraded the U.S. government's credit rating in 2011, at the time citing political polarization after a prolonged and fraught squabble in Washington over raising the debt ceiling.
- "It does not take a grand sovereign and analytics genius to understand that the fiscal profile of the U.S. is much worse than it has been," said Hentov.
Growing political instability means the U.S. will not regain its AAA rating with Fitch for the foreseeable future, according to Elliot Hentov, head of macro policy research at State Street Global Advisors.
Global stock markets fell sharply on Wednesday after ratings agency Fitch downgraded the United States' long-term foreign currency issuer default rating from AAA to AA+, citing "expected fiscal deterioration over the next three years" and an erosion of governance in light of "repeated debt-limit political standoffs and last-minute resolutions."
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Big-name bank bosses and economists dismissed the decision, saying it "doesn't really matter," and Hentov agreed that he did not think it was a "material development."
"The ratings are basically a slow-moving signal," he told CNBC's "Squawk Box Europe" on Thursday.
"I think it does not take a grand sovereign and analytics genius to understand that the fiscal profile of the U.S. is much worse than it has been, the governance in charge of public debt is much worse than it has been, and it's frankly not comparable to any of the other AAAs out there."
Hentov was part of the Standard & Poor's team that famously downgraded the U.S. government's credit rating in 2011, citing political polarization after a prolonged and fraught squabble in Washington over raising the debt ceiling.
In May of this year, another standoff between the White House and opposition Republicans over raising the U.S. debt limit once again pushed the world's largest economy to the brink of defaulting on its bills, before President Joe Biden and House Speaker Kevin McCarthy struck a last-minute deal.
Asked if the U.S. was likely to regain its "risk-free" AAA rating from Fitch anytime soon, Hentov responded with a flat "no."
"That's the short answer, unless you imagine that U.S. politics takes a turn for a much more stable, predictable path."
Jim Reid, head of global economics and thematic research at Deutsche Bank, said that despite the debt ceiling dispute parallels, the August 2011 downgrade from S&P came against a very different political backdrop.
"The debt ceiling fight and downgrade happened concurrently. In addition the S&P was the first to downgrade the U.S. from AAA and the immediate shock was far more profound than it could be with a second agency doing it 12 years later," he said.
Meanwhile, the Federal Reserve had been cutting rates and committed at its August policy meeting to keep rates at an "exceptionally low level until at least mid-2023," Reid highlighted in an email Wednesday. | Stocks Trading & Speculation |
Homelessness may have been a contributing factor in at least 34 children’s deaths in England between April 2019 and March 2022, according to a damning new report shared with i. The report reveals for the first time the public health crisis of homeless children who have been forced into temporary accommodation.Dr Laura Neilson, who led the team behind the research, told i it shows “starkly that there is a correlation between child mortality and being homeless” in England.A Government spokesman said it “reinforces the urgent need to tackle poor-quality housing wherever it occurs”.A family is classed as being homeless if they need to be placed in temporary housing. This places children at greater risk of respiratory disorders and a range of other health conditions, according to studies.The report was compiled by an NHS-funded body, the National Child Mortality Database (NCMD), for the All-Party Parliamentary Group (APPG) for Temporary Accommodation.The NCMD, which was set up in 2018, found that being homeless may have been a contributing factor in the sudden and unexpected deaths of 34 children between 1 April 2019 and 31 March 2022. A “sudden and unexpected death” is one that is not expected 24 hours prior.The report, which analysed data from 6,970 children’s deaths, states: “Homelessness and temporary accommodation were recorded by the independent child death overview panels in 34 cases as factors that may have contributed to the child’s vulnerability, ill health or death.“Of child deaths reported between 1 April 2019 and 31 March 2022 there were at least 200 individual records where homelessness or living in temporary accommodation (bed and breakfast, hostel, shelter, and in extended family accommodation) were recorded as present in the child’s mother, child, or child’s family life at some stage. There were a further 114 cases in which overcrowding within the property was recorded.”Temporary accommodation is housing given to people experiencing homelessness and can include bed and breakfasts, hostels with shared kitchens and bathrooms, shelters, and privately owned properties which are rented out to local councils. If a person or family lives in temporary accommodation, though they are not sleeping rough, they are still considered to be statutorily homeless and lacking a secure home. This is sometimes referred to as being “hidden homeless”. Temporary accommodation is often unsafe and unsuitable for the needs of families. This is because conditions can be poor and because families with children can also be housed alongside people suffering from addiction and anti-social behaviour. Studies show that children who grow up in bad housing have a higher risk of severe ill-health. Professor Monica Lakhanpaul of UCL who has studied the impact of living in temporary accommodation on children experiencing homelessness, told i: “Children are at risk of breathing problems such as respiratory infections and asthma, as well as diarrhoea and skin problems because of the conditions they are in – mould, overcrowding, poor ventilation and pollution.”More on HomelessnessWhenever a child dies unexpectedly – that is, when their death was not expected 24 hours’ prior – there is a “sudden and unexpected death review”. This data is then recorded by the NCMD. These reviews are carried out by consultants under the oversight of coroners. They involve examining the body as well as a visit to the child’s place of death and home.According to the World Health Organisation, overcrowding is associated with an increased risk of disease. Living in overcrowded accommodation is also associated with a higher risk of preventable accidents. Over the last few years, i has visited homeless families living in shocking conditions, including a converted office block in south London that was covered with mould, a converted office block in Essex where there was no space for children to play and converted shipping container-style pods which are too cold in the winter and too hot in the summer on the outskirts of Reading. As the inquest into the death of two-year-old Awaab Ishak in Rochdale showed, prolonged exposure to mould can be fatal. Awaab, who was not living in temporary accommodation but was in sub-standard social housing, died from a respiratory condition caused by living in a mouldy home.As part of an exclusive investigation to coincide with the release of the Temporary Accommodation APPG’s data on child deaths, i spoke to Kelly Sheen, whose son Morgan died at the age of seven after her family were made homeless and moved to a temporary home in 2013. i has also spoken to a mother of three whose son fell from the window in the fourth floor flat where she has been housed temporarily in south London, a mother of one whose daughter has developed severe asthma in temporary accommodation in west London, and a mother of two living in a temporary flat in east London which is infested with pharaoh ants. Pharaoh ants pose a substantial health risk because they can infect food, causing food poisoning, dysentery and typhoid. The APPG say that the real number of children who died while experiencing homelessness is likely to be higher than this new data shows because, as things stand, there is no requirement for the Child Death Overview Panel (CDOP) – an organisation which reviews all child deaths nationally – to ask whether the child who has died had experienced homelessness. Moving forward, the APPG is working with the NCMD to have a question on homelessness included in all child death reviews. “We anticipate that if this question was added as mandatory then the actual number of homeless child deaths would be even higher,” says Dr Neilson, who is the founder of the Shared Health Foundation – a group which chairs the APPG and works to reduce the impact of poverty on health.More on Housing Crisis“This is the first time this research has been done. From all the work on the ground I knew as a doctor that these children were being placed into circumstances that affected their health, their education and their life chances, but when we saw that at least 34 children may have died with a direct link to their accommodation my heart broke.”“As a doctor I know this is preventable, this fixable and this is not acceptable.” Jane Williams is the founder of a charity called The Magpie Project, which works to support a growing population of homeless mothers in east London. Williams fears that there will be more child deaths if the issue of temporary accommodation is not made a political “priority”. “We see a lot of children who have ongoing respiratory problems due to their accommodation,” she told i over the phone in between urgent cases. “A lot of these homes are not safe.” “There are also a lot of accidents in temporary accommodation because a lot of it is open-plan. We see a lot of burns, falls, and trips alongside chronic health conditions such as respiratory issues in children. We also see scabies and bedbug bites.“I am shocked that housing homeless families properly is not a number one priority at every housing association, local authority or Department of Housing meeting. Because I can’t think there’s anything more important than keeping children safe.” The number of homeless families – and therefore,children – being put at risk by homelessness is growing. At the end of 2022, when the APPG’s report was written, there were 95,060 households living in temporary accommodation in England, including 119,840 children. This is part of a long-term increase. In 2010, when the Conservatives first came to power, the number was just 37,940. The rising number of homeless families housed this way is, in no small part, a symptom of England’s social housing shortage. According to the homelessness charity Shelter, more than a million people are currently on waiting lists across the country. As a result, temporary accommodation is not usually “temporary” at all but is often where mothers and their children are placed for years at a time, as councils struggle to find them more appropriate long-term homes. In their report Chance of a lifetime, the impact of bad housing on children’s lives, housing charity Shelter warned that children who grow up in bad housing have up to a 25 per cent higher risk of severe ill-health and disability during childhood and early adulthood.Professor Lakhanpaul’s research – the Champions Project – has studied the impact of living in temporary accommodation on children and found that it has “immediate and lasting effects” on their health. A Government spokesperson told i: “This report reinforces the urgent need to tackle poor quality housing wherever it occurs.“Temporary accommodation is a last resort and we are committed to driving down the need for it. Over half a million households have been prevented from becoming homeless or secured accommodation since 2018 and we have given councils £366m this year to help prevent evictions and act on their duty to ensure all families have a roof over their heads.“Our Social Housing Regulation Bill and Renters’ Reforms are designed to help improve standards in temporary accommodation, and we will review the report’s findings and continue our work with the sector.”The Renters’ Reform Bill – which will make it harder for landlords to evict their tenants and increase rents mid-tenancy – was first promised by Theresa May’s government in 2019. There is currently no date for the legislation to begin making its way through Parliament so that it can become law. | Real Estate & Housing |
Trump's Wealth Has Jumped $500 Million Since He Left The White House
The former president’s net worth has climbed to $3.1 billion since 2021, according to the Bloomberg Billionaires Index.
(Bloomberg) -- Donald Trump is getting richer.
With the former president on trial in New York, accused of inflating his wealth by billions of dollars for more than a decade, the question of how much he’s worth is as relevant as ever.
The answer may surprise: Trump’s fortune is valued at $3.1 billion, up from $2.6 billion in 2021, according to the Bloomberg Billionaires Index.
He spent a combative day in court Monday arguing about how he valued his assets. The civil fraud lawsuit, brought by New York Attorney General Letitia James, could result in hundreds of millions in penalties and the loss of some of his most iconic properties.
Read More: Trump Made a Fortune Inflating His Assets, NY Tells Court
The higher net worth comes as Trump’s businesses are proving resilient in the face of a gloomy real estate market. His move to Florida after leaving the White House coincided with a boom in the state that’s bolstered the finances of two of his best-known properties — Mar-a-Lago in Palm Beach and the Doral resort in Miami — while revenues at the rest of his golf courses have surged more than 50% since 2019. And after selling his Washington hotel and paying down loans, Trump is sitting on more cash and less leverage than at any point in the past decade.
“The company has never been stronger and never been better,” his son, Eric Trump, executive vice president of the Trump Organization, said in an interview. “We have the most cash and the lowest debt. We are in a fantastic spot.”
Bloomberg’s wealth index has been calculating Trump’s net worth since 2015, based on ethics disclosures required for presidential candidates, public filings tied to key real estate holdings and staff reporting. Thousands of pages of exhibits detailing the performance of his assets made available during the trial have provided a deeper look into his fortune.
The former president’s 2021 statement of financial condition, filed as part of the lawsuit, pegged his net worth at $4.5 billion. Bloomberg’s calculation has consistently been below Trump’s figures. At the same time, Bloomberg measured the value of some Trump properties higher than what New York state claims.
Trump took the stand Monday and testified that the properties whose values he’s accused of inflating were actually undervalued, based on the premium his “brand” adds. He also said that banks didn’t rely on his statements of financial condition when weighing loans.
“They just weren’t a very important element in banks’ decision-making process,” Trump told the court. “And we’ll explain that as this trial goes along.”
Here’s a look at New York state’s valuation of four high-profile Trump properties where the prosecution alleges fraud occurred, along with Bloomberg’s own approach to assessing the assets.
Mar-a-Lago
It’s fair to say that Trump’s most famous property these days is no longer New York’s Trump Tower but his Mar-a-Lago Club, the historic Palm Beach estate built by Marjorie Merriweather Post in the 1920s that he now calls home.
The sprawling resort has been at the center of some publicized post-presidency scandals, from classified documents being kept in one of its bathrooms to the location where Trump is said to have shared nuclear submarine secrets with an Australian businessman — something that Trump denies.
It’s also a major focus in Trump’s fraud lawsuit.
Trump made a series of agreements with Palm Beach County and the National Trust for Historic Preservation for Mar-a-Lago to be used only as a club, giving up any development rights. Consequently, Palm Beach values the property as a business on its tax rolls. In 2021, the county assessed it at $27.6 million, lower than comparable residential properties. New York State argues that this appraisal is the one Trump should have been using.
New York’s estimated value “was a shock to the real estate community and anybody with any understanding of the island and its values,” said Liza Pulitzer, a real estate agent at Brown Harris Stevens and a Palm Beach native. “It could easily fetch $500 million or more.”
That assumes a buyer views it as a single-family residence. It’s currently not zoned for such use, though Trump is able to reside there through a loophole designating himself an employee.
Trump’s legal team engaged an expert witness who argued that a future buyer could do the same thing. And if they didn’t like the idea of sharing their property with others, they could reduce the club to a membership of one. Still, it’s unclear if Palm Beach would allow that without a change to its zoning status.
Historically, Mar-a-Lago never made much money for the Trump organization, but that seems to be changing. It took in about $41 million in revenue last year, according to Trump’s most recent ethics disclosure, compared with $21 million in 2019.
Bloomberg values Mar-a-Lago at $240 million, based on a combination of comparable residential property sales in the area as well as its value as a business, reflecting some uncertainty around its future status.
That uncertainty isn’t shared by everyone. If the city and county allowed it, “there is no reason why it wouldn’t be able to converted to a full-time private residence,” said Eli Beracha, director of the Hollo School of Real Estate at Florida International University.
Trump’s Fifth Avenue Penthouse
Trump’s penthouse apartment at Trump Tower has been an integral part of his image for 40 years, so it’s not surprising that one of the world’s masters of hyperbole exaggerated its size for most of that time.
Between 2011 and 2016, Trump valued his apartment based on it being 30,000 square feet (2,787 square meters) in size — almost triple its actual measurement of 10,996 square feet. Because of this, New York State arrived at a valuation that was about a third of Trump's in those years. They haven’t provided a more recent estimate.
Space inflation wasn’t the only issue. Between 2014 and 2015, Trump increased the value of the apartment to $327 million from $200 million. The prosecution argues that was to mask a drop in the value of one of his other properties.
“A discrepancy of this order of magnitude, by a real estate developer sizing up his own living space of decades, can only be considered fraud,” Judge Arthur Engoron wrote in a September ruling.
Bloomberg values the property using recent Trump Tower sales, as well as those of comparable Manhattan penthouses. While some splashy residences in much newer buildings on so-called Billionaires Row have listed for well in excess of $100 million, they typically boast higher ceilings, more up-to-date finishes, contemporary layouts, outdoor space and better views.
A better comparison would be a 9,450-square-foot penthouse in Olympic Tower, five blocks south on Fifth Avenue, which has been on and off the market for $35 million since 2016. Then there’s Carl Icahn’s 14,000-square-foot penthouse at Museum Tower on West 53rd Street. It was listed for $35 million in 2019 before he attempted to split the space and sell it as two separate apartments. Both were eventually delisted.
It’s possible Trump would get a higher price because of his name. “There would be a Trump premium because the person that would want that property is likely to be a Trump supporter,” Beracha said. But it’s also likely that the association with Trump would turn off some buyers.
Trump Park Avenue
The residential condo tower on Manhattan’s Upper East Side, formerly the Hotel Delmonico, isn’t one of Trump’s best-known buildings, but it’s been the source of some significant asset inflations, according to the prosecution.
Its value to Trump mostly stems from unsold condo units that are owned by the Trump Organization and rented out. A varying number have been rent-stabilized, meaning tenants pay below market rates. Typically, these apartments are valued at a discount because tenants can stay indefinitely, sometimes even passing them on to children.
Read More: Fake Mansions and Rent-Stabilized Units Emerge in Trump Trial
In 2010, 12 rent-stabilized apartments owned by Trump were valued at an average of $62,500 each in an appraisal provided by a real estate company. The following year, Trump valued them at $4.1 million each — more than 65 times greater. Trump has continued to value stabilized apartments in the building at market rates, including in his 2021 statement of financial condition.
Rent-stabilized units “with a positive cash flow are often valued at 15-25 cents a dollar of the open market value, versus single digits for negative cash flow,” said Jonathan Miller, president of appraiser Miller Samuel Inc.
Still, Trump’s optimism was shown to be at least partially justified. By 2021, only five of the 12 apartments remained rent stabilized.
The prosecution also claims two additional non-stabilized apartments in the building were overvalued because Trump ignored an option his daughter, Ivanka Trump, had to buy them at a price lower than the market value he used.
40 Wall Street
In valuing his flagship lower Manhattan office tower, Trump consistently ignored more conservative appraisals he’d received from professionals, New York State argues.
For example, 40 Wall Street was appraised by a real estate company at $200 million in 2011 and $220 million in 2012. Despite this, Trump valued the property in financial statements at $524.7 million and $527.2 million, respectively, for those years.
Bloomberg uses a capitalization of net income approach in coming up with an estimate. Valuations for commercial offices across the board have taken a hit in the past 18 months amid rising interest rates and a lackluster corporate leasing market.
But 40 Wall Street has its own unique problems. Tenant departures meant occupancy slid to 77% in June, down from 98% in 2015. Its net operating income is only 61% of what was projected by underwriters.
“There’s not a lot of leasing velocity down there,” said Albert Sultan, a broker at Kassin Sabbagh Realty. The financial district used to offer a lower cost for tenants, but with Midtown rents declining, “there’s no reason to go downtown.”
The property is also subject to a ground lease that resets in 2032 at either 6% of the land value or 85% of its rent in the prior year. Based on current rent, that means the ground lease would jump to $30 million from about $2.6 million now.
The prospects for the building’s future are “not good,” said Ruth Colp-Haber, chief executive officer of Wharton Property Advisors. “As a Trump building, it’s definitely facing a reduced market to draw on. Under new ownership, it would mean massive upgrades, hundreds of millions of dollars for it to even compete with some of the other buildings in the area where owners have poured money into renovations.”
Methodology
--With assistance from Mathieu Benhamou, Jennifer Epstein and Natalie Wong.
©2023 Bloomberg L.P. | Real Estate & Housing |
John Lewis has axed its staff bonus for a second time after losses grew during a "very tough year".
The department store firm, which also owns Waitrose supermarkets, reported a £234m pre-tax loss.
Dame Sharon White, chair of the company, said that while it attracted more customers, they had spent less.
She said the higher loss meant the firm could not hand out a bonus this year for the second time since it began the scheme in 1953.
Dame Sharon also hinted that the firm may have to reduce staff numbers, or "partners" as they are known at the company.
"As we need to become more efficient and productive, that will have an impact on our number of partners."
The company said faced with a "more challenging environment" it was tripling its target to makes savings from £300m to £900m by January 2026.
It said shoppers had "felt the pain from inflation".
Despite Waitrose reporting 800,000 more shoppers in the year to 28 January, customer spent less. It said the size of the average basket fell by 15% and people were buying cheaper items.
Consequently, full-year sales at Waitrose fell by 3% to £7.31bn.
"The big online growth of the pandemic years was partly reversed," said Dame Sharon, adding: "Shoppers shifted some of their grocery spending to the discounters."
Across its John Lewis department stores, revenue edged up 0.2% to £4.94bn. For the partnership as a whole, sales fell to £12.2bn from £12.4bn in the previous year.
It is the third year of pre-tax losses for John Lewis. Last year, it reported a £27m loss, far below this most recent result.
Dame Sharon said even as inflation starts to fall the partnership is still seeing costs rise. The rate of price rises - or inflation - has been slowing but at 10.1% remains close to a 40-year high.
During the Budget announcement on Wednesday, the Office for Budget Responsibility said it expected inflation to fall to 2.9% by the end of the year. | United Kingdom Business & Economics |
Crypto Gets Its Moment of Clarity, But Not the One It Wanted
Suits against Binance and Coinbase offer even more proof that the SEC is cracking down.
(Bloomberg Businessweek) -- The crypto industry is running out of ground to stand on, particularly in the US.
Since the price of Bitcoin tumbled off its exuberant $69,000 high in late 2021, the bear market in digital assets has often been described as a “crypto winter.” That’s not bleak enough to capture what’s happened. In quick succession, crypto has seen financial contagions, multiple cases of alleged fraud and outright theft, the collapse of several trading and lending platforms, and the evaporation of about $1.8 trillion in market value across all coins. Celebrity endorsers have been embarrassed and in some cases fined, trend-chasing venture capitalists have pivoted their attention to chatbots, and the letters “FTX” have been taken down from Miami’s basketball arena. And millions of ordinary investors have been badly burned.
Through it all, regulators including the US Securities and Exchange Commission have steadily ramped up enforcement actions, with hints of more to come. Many crypto businesses have complained about a lack of clarity concerning what rules, if any, they were supposed to follow. In early June the SEC filed a pair of lawsuits that remove any ambiguity about where the watchdog stands: The agency contends that many of the business practices people in crypto took for granted during the boom years are not legal in the US.
The suits take on the world’s two largest crypto trading platforms, Binance and Coinbase, accusing both of running unregistered securities exchanges and brokerages. Both companies say they don’t offer US investors coins that can be considered securities.
“The SEC is now playing whack-a-mole with crypto exchanges,” says Ed Moya, senior market analyst at Oanda Corp., a currency trading platform. But if its arguments prevail against these two companies, the impact could be far wider, reining in the activities of other trading platforms and perhaps forcing cryptocurrency creators to register their tokens as securities if they want them to be tradeable in the US.
The suit against Binance Holdings Ltd.—the more sweeping of the two—takes aim at the supposedly decentralized nature of many crypto companies. Binance has no official headquarters and operates mainly outside the US. Americans aren’t supposed to be able to trade on Binance.com, though they can trade on Binance.US, a more limited service that’s supposed to be separate. The SEC alleges that all the businesses were closely controlled by Binance founder Changpeng Zhao and that plenty of money flowed from US investors to Binance.com.
Echoing an earlier lawsuit filed against Binance by the Commodity Futures Trading Commission in March, the SEC says that Binance quietly encouraged US customers to use virtual private networks that would hide their location and allow them to access the main exchange, and that this is only one of the ways the company knowingly violated federal securities laws. The complaint states that in 2018, Binance’s chief compliance officer at the time told another compliance executive, “we are operating as a fking unlicensed securities exchange in the USA bro.”
The SEC also says that Binance misled customers through a practice known as “wash trading,” where the same entity sells its own securities to itself. The agency says Sigma Chain, a trading company Zhao owns and controls, might have used the practice to artificially inflate crypto trading volumes on Binance.US. In other words, some of the frantic crypto trading that people raced to get in on was an illusion, the SEC says. Binance has denied the allegations and said in a blog post that the company was “disappointed” with the SEC’s decision and that the regulator had chosen to use “blunt weapons of enforcement” rather than a more nuanced approach. Responding to news of the SEC complaint, Zhao posted a tweet that started off with “4”—a shorthand signal to his customers and online fans to disregard so-called fear, uncertainty and doubt about the company. (“Ignore FUD, fake news, attacks, etc.” is fourth on a list of his New Year’s resolutions for 2023.)
Even crypto enthusiasts who don’t do business with Binance may have felt some FUD over the next part of the SEC’s complaint. It listed several digital coins, including Cardano’s ADA, Solana’s SOL and Polygon’s MATIC, as securities that were sold on Binance’s platform. SEC Chair Gary Gensler has long called out crypto companies for peddling unregistered securities, and he’s said most existing tokens probably fit that definition. The June 5 Binance complaint essentially provided a list of some of the most popular coins that the SEC regards as securities. It foreshadowed the lawsuit that would hit Coinbase the next day, because the company offers many of the same coins on its platform.
Unlike Binance, Coinbase Global Inc. is a US-based exchange, and it’s long touted its compliance with US rules. This publicly traded company files regular disclosures about its business with the SEC. But it isn’t registered as a securities exchange. If Coinbase was only a place to buy and sell Bitcoin, that likely wouldn’t be a problem, because traditionally the world’s largest cryptocurrency is considered by regulators to be more like a commodity—a digital form of gold—than an investment such as a stock, bond or mutual fund.
But the SEC says in its suit against Coinbase that ADA, SOL and several other coins are in fact securities, triggering a requirement to register. It says the coins’ success depends on the efforts and the business decisions of those offering the tokens, a legal hallmark of securities that are subject to its jurisdiction. As with stocks, token creators often raise money for their projects by selling their coins to venture capital investors and through a type of sale known as an initial coin offering, in which regular crypto enthusiasts can participate.
Coinbase also has its own product, called Earn. It allows customers to collect interest on some coins by “staking” them or allowing them to be used as part of the technology that makes crypto blockchains work. The SEC says this program also amounts to an unregistered security.
Chief Executive Officer Brian Armstrong said in a tweet that Coinbase is confident it’s followed the law and that the SEC hadn’t provided a path for the company to register with it. “We tried, repeatedly—so we don’t list securities,” he wrote. He also noted that the SEC reviewed the business when it made its initial public offering.
Anthony Tu-Sekine, who heads the blockchain and cryptocurrency group at law firm Seward & Kissel, says that Armstrong is telling the SEC, “You approved our conduct back when we went public, and now you’re saying it’s illegal.” But Tu-Sekine says the fact that the SEC reviewed a company’s IPO filing typically isn’t an adequate legal defense against alleged federal securities law violations.
Armstrong also draws a distinction between his company’s woes and the harsher allegations against Binance. “The Coinbase suit is very different from others out there—the complaint filed against us is exclusively focused on what is or is not a security,” he wrote. But as technical as the suit may sound, it poses a serious threat to Coinbase’s business. By offering a variety of coins, the company gives its users more things to trade, and trades generate fees. “If the SEC stops Coinbase from trading some tokens they deemed securities, that could have a huge impact on Coinbase’s financial health,” Oppenheimer & Co. analyst Owen Lau told Bloomberg News. “I would say the revenue at risk could be over 50%.” He added that the SEC may not win on every point.
Oanda’s Moya says the lawsuit could also have a devastating effect on the wider digital asset industry. “If you’re not able to trade your favorite currencies, you might jump ship or switch to Bitcoin,” he says. In theory, exchanges could offer coins considered securities if they registered; that means they’d be subject to extensive US securities laws including rules on disclosure and investor protection.
But many coin developers argue they don’t need to do this, because digital assets have unique features that make them unlike stocks or bonds. IOG, the developer of the Cardano blockchain, said in a statement that its ADA token is “under no circumstances” a security. The SEC’s filing “contains numerous factual inaccuracies and will not impact IOG’s operations in any way,” the statement said.
Treating coins as securities could force big changes at exchanges that choose to list them. The SEC says that both Binance and Coinbase combine the functions of an exchange, a brokerage and a clearing agency. In the securities business, those functions are typically split among separate legal entities, to avoid conflicts of interest.
The battles between the SEC and Binance and Coinbase are likely to drag out for years. A lawsuit against Ripple Labs over its XRP token was initiated in 2020, and it still hasn’t reached a conclusion. Coinbase is also pushing for legislation in Congress that may define crypto coins differently than the SEC does.
The SEC’s actions are likely to spook investors and cause venture capitalists, who were once crypto cheerleaders, to pull back even further from their fundraising efforts. And few investors want to hold a coin that could end up being difficult to trade.
Seeing the chill descending over US crypto, many in the industry have been setting their sights on other markets. Coinbase has sped up its yearslong effort to introduce new hubs and obtain new licenses around the world. “We’ve spent a lot of time doubling our core outside of the US,” says Nana Murugesan, vice president for international and business development at Coinbase, speaking before the SEC lawsuit was filed.
In the Americas, Coinbase has made Brazil one of its top priorities. It scrapped acquisition talks with Brazilian crypto brokerage 2TM Participacoes SA last year, but Murugesan says the company has had recent successes, such as an integration with Pix, the digital payment system developed by Brazil’s central bank. He adds that Coinbase is interested in using local developers to understand more uses for crypto. One of the options they’re seeing in Brazil is popularizing “play to earn” in favelas. The model allows people to earn crypto tokens that can be exchanged for cash by playing online games, and it’s become part of the gig economy in countries such as the Philippines. But it’s also been criticized for exploiting impoverished workers. Murugesan says that play-to-earn can incentivize young people to engage in learning and educational opportunities.
Murugesan calls the UK the largest international market for Coinbase and says the company recently added PayPal as a payment method for its UK customers. Armstrong said in April that relocating his company’s headquarters there is “on the table.” Venture capital firm Andreessen Horowitz, which raised the largest crypto fund last year, recently announced plans to open a new office in London, citing the welcoming environment the UK government has created for digital asset companies. (Bloomberg LP, which owns , has invested in Andreessen Horowitz.)
Binance has had a frostier reception in the UK. Chief Strategy Officer Patrick Hillmann said at a conference last month that his company is doing what it can to be regulated there, despite the country’s top market regulator banning the company in 2021 over concerns about the risks it posed to customers.
Murugesan says Coinbase already has a license in Germany, operations in Ireland and registrations in Italy and the Netherlands, and the company hopes to be able to do more now that the European Union has approved crypto asset rules. Coinbase is also considering expanding further in the United Arab Emirates, where many in the crypto industry have flocked because the government is considered friendly to digital assets. Zhao lives in Dubai, home to one of Binance’s biggest offices.
Regulators in Dubai recently clashed with a new exchange called OPNX, saying it was operating without the required local license. The startup drew attention because it’s connected to Kyle Davies and Su Zhu, the founders of the crypto hedge fund Three Arrows Capital, whose blowup last year helped trigger the crisis in digital assets. (The exchange’s CEO says it hasn’t marketed to UAE customers.)
Anywhere in the globe the crypto industry turns, it’s going to be navigating the impact of the deep crypto downturn. As part of a marketing campaign in Australia, Murugesan and his team recently posed for pictures in front of landmarks such as the Sydney Opera House while wearing Coinbase T-shirts and waving flags. Massive rains soaked the team as they took their photos. It was a far cry from earlier efforts in the US, which included a Super Bowl commercial and an NBA sponsorship. “We’re trying to be creative now,” Murugesan says, “especially in the current environment, this resource-constrained environment.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
At 68, I do not have any investments of any kind. My $80,000 condo is paid off, and I have $60,000 saved. Am I too late?
-Bernhard
It’s never too late to start investing and managing your money. But I don’t want to sugarcoat it. If you’re planning to invest for retirement, getting the ball rolling in your late 60s certainly limits your options. So, let’s discuss some of your choices. (If you have additional questions about investing or retirement, this tool can help match you with potential advisors.)
Consider Alternate Forms of Income
With limited savings, you likely can’t afford to ignore Social Security benefits and other sources of income. If you haven’t tapped your Social Security benefit yet, keep in mind that waiting until 70 will maximize the benefit you receive.
It’s also worth exploring other ways to maintain income into your golden years. Can you continue working in your current position, find part-time employment or consult on the side?
Delaying full retirement will increase your cash flow in the near term, allow you to plan for a shorter retirement period and perhaps give you room to save and invest. (If you have additional questions about maximizing retirement income, this tool can help match you with potential advisors.)
Paying off Your Home Is Great, But Consider Other Expense Reductions
The fact that you outright own your $80,000 condo is commendable. And depending on your location, there may not be many other properties in a lower price tier. So, you may have limited options for downsizing or finding less expensive housing.
But consider other moves you can make to reduce expenses when it comes to transportation, travel, food and other costs. With minimal savings, you’ll need to keep a careful eye on spending.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Determine Appropriate Asset Allocation
If you plan to have your $60,000 last decades into retirement, it’s worth evaluating an appropriate investment balance that allows for both short-term liquidity, medium-term time horizons and long-term growth. Keeping 100% of your money in cash typically doesn’t allow it to keep up with inflation and it causes your nest egg to lose value over time.
Working with a financial advisor may help you build a portfolio and project out retirement spending and income needs into the future. A holistic advisor may also be able to help you work through the tax repercussions of your income and retirement projections.
Depending on your financial situation, consider whether you’re eligible for a financial advisor or even pro bono financial help from a source such as the Financial Planning Association. (If you have additional questions about investing or retirement, this tool can help match you with potential advisors.)
Next Steps
It’s never too late to start investing, but starting in your late 60s will impact the options you have. Consider Social Security strategies, income sources and appropriate asset allocation. A financial advisor may be able to help you project out your investment and income plan into the coming decades.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Susannah Snider, CFP® is SmartAsset’s financial planning columnist and answers reader questions on personal finance topics. Got a question you’d like answered? Email [email protected] and your question may be answered in a future column.
Please note that Susannah is not a participant in the SmartAdvisor Match platform and is an employee of SmartAsset.
Photo credit: ©Jen Barker Worley, ©iStockPhoto/Moon Safari, ©iStockPhoto/Milan Markovic
The post Ask an Advisor: ‘Am I Too Late?’ I’m 68, Have No Investments and Only Have $60K Saved appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
Chantelle is yet to turn 25 and she’s already declared bankruptcy.
The Gen Zer, who works full-time for an energy company and earns $60,000 [Australian, approximately $39,000 USD] a year, was forced to declare bankruptcy after finding herself $75,000 [Australian, approximately $48,000 USD] in debt and unemployed.
Chantelle’s very open about her debts and recently went viral on TikTok and amassed more than 300,000 views by sharing her story.
The young worker explained that going bankrupt had “helped her” even though she was originally “against the idea”.
Chantelle, 24, found herself completely in over her head when she lost her job earlier this year, earning $75,000 [$48,000 USD] at the time, and she was left to try and pay a debt that was the size of her yearly wage.
She explained that she ended up in debt because she took out two personal loans and had numerous credit cards.
She pointed out that the bank chose to give her a “ridiculous” amount of money and she was surprised to find out how quickly she could spend it.
Chantelle declared bankruptcy in September this year.
Bankruptcy is a legal process where you are declared unable to pay your debts. A person who declares bankruptcy can be released from most debts and be allowed to make a fresh start.
However, there are consequences that come along with taking this course of action. It normally lasts for three years and one day and, during this time, it may affect your ability to get credit, travel overseas or gain some types of employment.
You also need a registered trustee manager your bankruptcy, who you will need to get permission from to travel overseas and who also has the power to sell your assets.
She said that she took out a loan to go on an international holiday with her boyfriend, an international student that works part-time as an UberEats driver.
Chantelle figured she’d be able to pay it back when she got home because she’d work overtime, but things fell apart when she fell ill.
“After the holiday, I got Covid, and something went wrong. I started feeling faint all the time, and my vision was blurry,” she said.
Chantelle said that she kept trying to go to work but eventually realized it was impossible due to her illness.
“I couldn’t focus and I didn’t register where I was. It started giving me panic attacks and freaking me out,” she said. “I took all my sick leave, went to doctors, and even went to a long Covid clinic but no one could help.”
She attempted to go on a management plan and said she reduced her hours, but her health didn’t improve.
“It got so bad that I was scared to even leave the house at all,” she said. “My job said that my role wouldn’t support me working from home, and they didn’t offer alternative options.”
Suddenly, she found herself already in debt with no income, which ultimately led to her getting into more debt.
Chantelle said that when she left her job she had no “savings” and she was also trying to get her health back on track by going to the doctors frequently.
“This all cost money and I only had credit now and no income,” she explained.
Things became even more difficult when she was hit with a rental increase of $250 [$158 USD] per week and realized she and her partner needed to find a cheaper place, and moving costs led to more debt.
“We then had to move and buy furniture. Then after six months I still was trying to find a job, using credit to pay for rent and food and using one loan to pay another, and it was snowballing,” she shared.
Which is how she ended up $75,000 [$48,000 USD] in debt at age 24 which she said was “a lot” for one person to manage.
Chantelle became stuck in a vicious cycle of using one debt to pay the other and barely paying off the interest every month. It felt like she was paying back nothing.
So what is a young person to do in this situation, well, she considered her options and came to quite the realization.
“You are like, I’m going to live only once … I will die one day … who cares if I was bankrupt? Who cares?” she said.
Chantelle decided she could “scrimp and save” and be “miserable” or declare bankruptcy and opt for an immediate “fresh start.”
She explained that she came to this conclusion because she felt out of options and that the bank wouldn’t do “anything” to help her.
“I called around to see the outcomes of all my options and bankruptcy was the only thing that would help me based off my situation,” she said.
Chantelle admitted that she’s made some “bad choices” and should have “saved money” when she had a good-paying job but she didn’t have enough foresight.
“I was fit. I was healthy. I always worked overtime. Because of those choices when something did go wrong, I had no safety net, and it fell apart so quickly,” she said.
Chantelle said she had “learnt her lesson” but that sometimes you had to make choices and just “do it for the plot,” so she filed for bankruptcy in September this year. | Personal Finance & Financial Education |
Hard-pressed householders will not have to pay more on their energy bills to fund production of hydrogen, Grant Shapps has indicated.
An annual levy was expected to be introduced in 2025, through the Government’s Energy Bill going through Parliament, to cover the cost gap between producing low-carbon hydrogen and polluting fossil fuels.
But signalling a coming U-turn, the Energy Security Secretary said he opposed a direct charge on the bills of energy consumers, already saddled with hefty costs.
It comes amid persistently high inflation and after a shock interest rate hike threatened more pain for struggling households.
Mr Shapps told the Telegraph: “What we need to do is make sure that, A, we can get our hydrogen industry up and running. Really, really important, massive export opportunities, great way to store energy, great way to power heavy industry and what have you.
“And, B, I don’t want to see people’s household bills unnecessarily bashed by this.”
The Onward think tank has estimated that a hydrogen levy would raise energy bills by around £118 per year for the average dual fuel household.
The Cabinet minister said he favoured other ways of funding the move towards cleaner energy and net zero.
He said he did not want to see a “levy directly on households”.
“The way that’s funded will have to be further up the chain.”
This could potentially include landing the industry with the costs or general taxation.
The newspaper reported that talks are ongoing between Mr Shapps’s Department for Energy Security and Net Zero, No 10 and the Treasury to agree an alternative, with hopes the new scheme will be put out to consultation before the end of July.
Government plans for a hydrogen levy have caused a backlash from Conservative and opposition MPs who warned against increasing energy bills that soared in the wake of Russia’s invasion on Ukraine and amid a cost-of-living crisis.
Labour said the about-turn is an effort to swerve a rebellion by Tory backbenchers.
Shadow energy minister Alan Whitehead said: “This is yet another humiliating U-turn for Rishi Sunak, showing that his Government is completely out of touch with reality.
“During a cost-of-living crisis, millions of families are already struggling to make ends meet and yet the Government have been doggedly pursuing these regressive levies for months, only to finally back down over fears of a rebellion from their own backbenches.
“Labour will continue to stand up for the millions of families across the country that are paying the cost for Tory failure. We will reform our broken energy system to we deliver the green transition we so desperately need, energy security, and bills that are affordable.” | Energy & Natural Resources |
After googling HM Revenue & Customs' contact number, BBC journalist Jared Evitts made a phone call which he later found out had cost him £119.
I typed "HMRC phone number" into Google, which seemed like the logical way to find their contact details.
After finding what I thought was the correct number, I spent 30 minutes on hold, and then had a quick chat on the phone.
In all honesty, it was a rather unremarkable call that did not cross my mind again - until my phone bill came through a few weeks later.
It turns out, the 39 minute call to the tax office had cost me £119.05, and I had absolutely no idea why.
Had I made a call from abroad? Had I been scammed? Was there a mistake?
After some research, I found the answer. I had unknowingly phoned through a call connection service operated by a company called Bounce Tech Ltd, which has been approached for comment.
This meant I had got through to the organisation I wanted to reach, but was charged for the call at a premium rate.
Regulated by the Phone-paid Services Authority (PSA), call connection services are not illegal, but charge high rates for calls to organisations that may otherwise be free or low cost.
The PSA said the price of the service must be clear, and consumers must be made aware they are not calling their desired recipient directly.
Two other women who used Bounce Tech's call connection service, Lesley Carthy and Emma Oliver, said they were also unaware they were using a third party.
Lesley Carthy, from Warrington, Cheshire, googled HMRC's contact number to try to contact them in June. She was charged £184.68 by Bounce Tech for a 51 minute phone call.
"I saw this number online, I dialled it and obviously you're in a queue. Nothing was told to me about a call charge," she said.
"Then 50 minutes went by, it got answered and then the next thing, I got my phone bill.
"Phoning HMRC, you think you wouldn't be calling on a premium number. I just can't believe it, nobody can believe it."
Emma Oliver, from Amble in Northumberland, was also charged £112.24 for a 29 minute phone call at the end of June.
"It was the week my dad had died, so I was actually off work and was making lots of phone calls to various companies regarding his death and pensions and payments," said the 52-year-old.
"I don't even know who Bounce Tech are, I wouldn't personally ring them. I just think I just assumed you were ringing the company you were trying to ring, I had no idea."
According to the PSA, while pricing information is available from Bounce Tech, it is easy to overlook due the speed at which it is played on the phone, and because of its lack of prominence on their website - particularly on a mobile device.
Lesley Carthy said she had been refunded in full by Bounce Tech for the call and Emma said she had also been refunded £104.82 by them.
How to spot a call connection service:
- Official numbers usually begin 01, 02, 03 or 0800
- If the number beings 09, 087 or 084, it is likely to be a connection service and will cost more
- When searching for a number on a search engine, be aware that the first number may not be the one you are looking for
- Look out for paid-for ads - these may be connection services.
After contacting the PSA about Bounce Tech Ltd, the regulator confirmed it had opened an investigation into the company.
The PSA said Bounce Tech operate premium rate numbers costing £3.60 per minute plus the phone company's access charge, and connect customers to organisations including HMRC and O2.
In July, the PSA issued a warning letter to Bounce Tech, explaining the company's pricing information was not clear enough, was misleading, and customers had experienced undue delay while using the service.
It was also "concerned that the message on the phone call did not clearly state the cost for continuing the call and being connected".
In addition, it said the language used may "have the potential to mislead consumers into believing they are calling the company they are looking for directly".
Bounce Tech Ltd has agreed to the action plan to resolve the issues identified by the PSA.
The action plan includes an agreement to improve the prominence of pricing, ensure consumers are aware they are not contacting the end organisation directly and ensure the required information is clearly audible at the start of the phone call.
Bounce Tech Ltd has also agreed to refund complainants who have been charged by them via their phone bill.
A HMRC spokesperson said: "Most customers prefer to deal with us online and we strongly encourage them to do so but if they need to call us, they shouldn't use costly call connection services advertised online."
It encouraged customers to contact HMRC directly on its 0300 helpline numbers that are "free or charged at the national landline rate".
The PSA said it had "very strict rules" for connection services, and enforcement action is taken if providers break these rules.
It also said it would cap all call costs at £40 from 18 September. | Consumer & Retail |
Vinati Organics Q2 Results Review - Destocking Weighs On Earnings; Long-Term Guidance Intact: Motilal Oswal
Marginal miss led by higher-than-expected RM costs/employee expenses.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Veeral Organics Pvt. Ltd. (a wholly owned subsidiary of Vinati Organics Ltd.) is set to commence production of MEHQ, Guaiacol, Anisole, and Iso Amylene. The capacity for MEHQ and Guaiacol is expected to be 3 kilo tonnes per annum, with the anisole capacity to be five ktpa; the same for Iso Amylene is expected to be 30 ktpa. This should propel Veeral Organics into the next leg of its growth story.
Veeral Additives Ltd. has commenced the commercial supply of antioxidants. Veeral Organics has received in principle approval for its amalgamation with Veeral Additives from the National Company Law Tribunal, and management expects the revenue to reflect in Veeral Organics from next quarter onwards on a consolidated basis.
Veeral Organics is set to become the largest and the only double integrated manufacturer of AOs in India.
Barring the short-term pain in terms of destocking, we continue to believe that this is one stock in the sector that will continue to do well.
The stock is trading at ~34 times FY25E earning per share of Rs 51.2 and ~26 times FY25E enterprise value/Ebitda. It had a fixed asset turnover of 2.4 times as of FY23.
We value the company at 40 times FY25E earning per share to arrive at our target price of Rs 2,050. We reiterate our 'Buy' rating on the stock.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | Stocks Trading & Speculation |
Cathie Wood Says Bitcoin Is ‘Digital Gold’ as Deflation Hedge
Cathie Wood says she would unambiguously wager on Bitcoin — rather than gold or cash — to safeguard against the possibility of deflation in the coming decade.
(Bloomberg) -- Cathie Wood says she would unambiguously wager on Bitcoin — rather than gold or cash — to safeguard against the possibility of deflation in the coming decade.
The head of ARK Investment Management reiterated her view that she expects an era of falling prices, backed by new technologies including artificial intelligence, electric vehicles, robotics, genomic sequencing and blockchain — an opinion she has held since 2021 even as markets have focused on a new era of heightened inflation risks.
In response to a question on Bloomberg’s podcast about which of the three asset classes she would choose to hold for 10 years, Wood said: “Bitcoin, hands down. Bitcoin is a hedge against both inflation and deflation because there’s no counterparty risk, and institutions are barely involved.” It’s “digital gold,” she said.
Wood has been among the most optimistic voices on the cryptocurrency as she expects it to benefit from the wider growth in new technologies and innovations. She’s previously predicted that the price of Bitcoin would exceed $1 million in the next decade. It’s currently $35,000, roughly half its 2021 peak.
But after crashing 64% in 2022, Bitcoin’s value has more than doubled this year as market participants touted it as a potential inflation hedge, despite its failure to act as one during the biggest consumer-price surge since the early 1980s. More recently, the token has rallied on bets that the US Securities and Exchange Commission may soon approve exchange-traded funds that invest directly in the coin.
Wood is among those in prime position to benefit from ETF approvals. Her firm has applied for a Bitcoin ETF alongside 21Shares and invested in the Grayscale Bitcoin Trust. Wood’s $1.2 billion ARK Next Generation Internet ETF snapped up GBTC last November, when the discount was around 40%. The trust is the largest holding in the fund and has returned about 224% this year through Wednesday. That compares with a roughly 114% rally for Bitcoin. ARK sold some of its GBTC holdings last month.
On the podcast, Wood said she also expects a convergence between AI and Bitcoin. That’s “going to enable micro tasks globally and a division of labor in a way we can’t even imagine now.”
--With assistance from Vildana Hajric.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
WASHINGTON -- Late Tuesday, Fitch Ratings became the second of the three major credit-rating firms to remove its coveted triple-A assessment of the United States government's credit worthiness, a move that contributed to sharply lower stock prices in Wednesday trading.
Fitch cited the federal government's rising debt burden and the political difficulties that the U.S. government has had in addressing spending and tax policies as the principal reasons for reducing its rating from AAA to AA+.
Fitch said its decision “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance” compared with other countries with similar debt ratings.
The downgrade may have little impact on financial markets long-term or on the interest rates the U.S. government will pay. Here’s what you need to know:
HOW DID THE GOVERNMENT GET TO THIS POINT?
Fitch’s move comes just weeks after the White House and Congress resolved a standoff on whether to raise the government's borrowing limit. An agreement reached in late May suspended the debt limit for two years and cut about $1.5 trillion in spending over the next decade. The agreement came after negotiations approached a cutoff date after which Treasury Secretary Janet Yellen had warned the government would default on its debt.
The Biden administration reacted angrily to the move. Yellen said Wednesday that Fitch's "flawed assessment is based on outdated data and fails to reflect improvements across a range of indicators, including those related to governance, that we’ve seen over the past two and a half years."
"Despite the gridlock, we have seen both parties come together to pass legislation to resolve the debt limit," Yellen said.
Standard & Poor's removed its coveted triple-A rating of U.S. debt in 2011, after a similar standoff over the borrowing limit.
Fitch said that the ratio of U.S. government debt relative to the size of its economy will likely rise from nearly 113% this year to more than 118% in 2025, which it said is more than two-and-a-half times higher than is typically the case for governments with triple-A and even double-A ratings.
WHAT TYPICALLY HAPPENS WHEN DEBT IS DOWNGRADED?
Ratings agencies like Fitch and its counterparts, Standard & Poor's and Moody's Investors Service, rate all kinds of corporate and government debt, ranging from local government bonds to debt issued by huge banks.
In general, when an issuer of debt has its credit rating downgraded, that often means it has to pay a higher interest rate to compensate for the potentially higher risk of default it poses.
WHAT COULD THAT MEAN FOR U.S. TAXPAYERS?
Many pension funds and other investment vehicles are required to only hold investments with high credit ratings. If a city or state, for example, sees its credit rating fall too low, those investment funds would have to sell any holdings of those bonds. That would force the government issuing those bonds to pay a higher interest rate on its future bonds to attract other investors.
If that were to happen to U.S. Treasury securities, the federal government could be required to pay higher interest rates, which would push up interest costs for the government and taxpayers.
WILL U.S. BORROWING COSTS RISE?
Few economists think that such an outcome will actually occur. Instead, they think Fitch's downgrade will have little impact. Few pension funds are limited to holding just triple-A rated debt, according to Goldman Sachs, which means the current AA+ from Fitch and Standard & Poor's will be sufficient to maintain demand for Treasurys.
“We do not believe there are any meaningful holders of Treasury securities who will be forced to sell due to a downgrade,” Alec Phillips, chief political economist for Goldman Sachs, wrote in a research note.
Large U.S. banks that are required by regulators to hold Treasurys won't see any changes in those rules just because of the downgrade, Phillips added in an interview, because regulators will still see them as safe investments.
For most investors, U.S. Treasury securities are essentially in a class by themselves. The U.S. government bond market is the largest in the world, which makes it easy for investors to buy and sell Treasurys as needed. The United States' large economy and historic political stability has led many investors to see Treasurys as nearly the equivalent of cash.
Rating agency downgrades typically have more impact on smaller, lesser-know debt issuers, such as municipal governments. In those cases, even large investors may not have much information about the creditworthiness of the bond and are more reliant on the ratings agencies, Phillips said.
Yet that isn’t really the case for Treasury bonds and notes, he said. Large investment funds and banks form their own opinions about Treasury securities and don't rely on the ratings agencies, he said. Fitch’s analysis also didn’t provide much new information, he added. Other entities, such as the nonpartisan Congressional Budget Office, have made similar projections about where U.S. government debt is headed.
“Nobody's holding Treasuries because of the ratings,” Phillips added.
WHAT DOES FITCH MEAN BY ‘GOVERNANCE’?
Fitch cited a decline in “governance” as a key reason for its downgrade, a reference to the repeated battles in Washington over the past two decades that have led to government shutdowns or even taken the government to the brink of a debt default.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.
At the same time, Fitch is referring to the inability of even compromise legislation to meaningfully address the long-term drivers of federal government debt, specifically entitlement programs for the elderly such as Social Security and Medicaid.
“There has been only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population,” Fitch said. | Interest Rates |
President Joe Biden's "Bidenomics" campaign platform, which (according to the White House) is the president's spending attempt to "grow the economy ... from the middle out and the bottom up," is "failing the American people," according to Gabbard. Instead, she offered her own definition on Fox News's The Ingraham Angle Thursday.
"[Bidenomics is] a national socialism where we have government bureaucrats and politicians partnering and colluding with these massive cult corporations and the ultra-rich to make these business deals, picking winners and losers that serve their own self-interest and the interest of the power elite at the cost of the well-being of the American people not only today but in the increasing debt that they are incurring that will affect us for generations to come," Gabbard said.
As a veteran, Gabbard pointed to Biden's military spending as "the perfect example" of his administration's tendencies.
"They have essentially a blank check, an unaccounted amount of spending of taxpayer dollars, and if you or I or anyone else says, 'Hey, is all that you're spending actually strengthening our national security? Is this serving the best interests of the American people? And maybe perhaps we should know where every dollar is being spent.' If we say that, we are at risk of being called unpatriotic," the former representative said. "And so people aren’t even allowed to challenge or question where this spending is going and how it’s benefiting the American people."
Consumer prices have increased by nearly 16% since Biden took office, according to the Bureau of Labor Statistics. Meanwhile, year-over-year inflation has been on the decline.
The Federal Reserve has intervened, hiking interest rates Wednesday to a range of 5.25% to 5.5%. The housing bubble in 2006 motivated the Fed to issue a short-term rate of 5.25%. The last time it sought a rate as high as 5.5% was in early 2001 during the collapse of the dot-com bubble. | Inflation |
Insufficient funds: How banking overdrafts are hurting Americans’ wallets
In 2022, Americans paid over $8 billion in fees as a result of bank overdrafts and insufficient funds (NSF). Some of this total includes “junk fees,” through which banks prey on unaware consumers.
But overdrafts and NSF are also a source of emergency credit for low-income consumers who cannot afford to miss an important payment. Prohibiting these fees may cause many consumers to lose access to utilities or other needed goods or services.
Better disclosure can help. Consumers should receive notification and the opportunity to approve every transaction that results in a fee. This notification and approval process is already in place for ATM fees. It should be extended to overdraft and NSF fees.
Overdraft and NSF fees are a logical result of the interaction between bank-account economics, consumer psychology and consumer needs. The annual cost to a bank of maintaining a deposit account is a few hundred dollars, so banks must earn this back in revenue.
Banks earn revenue on deposit accounts in essentially two ways. On large accounts, banks collect interest and cross-sell credit or investment products. For low-balance accounts, banks charge checking and especially overdraft and NSF fees. Bank accounts with low or no monthly checking fees represent a type of teaser rate. The account is nominally free, but banks know they will make profits through overdraft and NSF fees.
Around 10 percent of Americans pay an overdraft fee annually; this group is disproportionately likely to be young, low-income and from a minority group. Accounts that incur more than 10 overdrafts or NSF a year are responsible for almost 80 percent of all fees.
On the one hand, the evidence strongly suggests that this fee model preys on consumer psychology. Almost 70 percent of the consumers who have experienced an overdraft or NSF would have preferred that the transaction be declined — in other words, most consumers are paying for a service that they don’t even want.
Consistent with this view, the median transaction amount that causes an overdraft or NSF fee is around $35, which is also close to the amount of the typical fee. It is hard to believe that most consumers — if they were aware of the charge — would agree to a $35 fee on a $35 transaction. For example, if a consumer pays the fee in seven days, it is equivalent to a short-term loan with an APR of over 5,000%.
On the other hand, many consumers appear to understand that they are using overdrafts and NSF as a form of credit. Just over half of consumers who have experienced an overdraft or NSF used them to guarantee a payment when they might not have had enough funds. Prohibiting overdrafts would deprive many consumers of an expensive but possibly necessary form of credit.
Overdraft fees have been regulated through an opt-in provision since 2009, but with limited success. Under current law, financial institutions may not charge overdraft fees — incurred through use of a debit card — unless a consumer expressly opts into overdraft protection. However, a 2017 study found that nearly 63 percent of overdrafters were unaware of this right.
In 2022, the CFPB issued further guidance that surprise overdraft fees — where the bank charges a fee even though the consumer appears to have a positive balance — violate existing law. The CFPB issued similar guidance for fees charged by banks when a depositor deposits a check that bounces.
These actions, along with public scrutiny and criticism of large banks that rely on overdraft and NSF fees, have reduced total fees, but $8 billion a year is still a lot of money.
Smarter disclosure modeled on the requirements for ATM fees would help. Regulators should require that banks disclose, on a per transaction basis, the amount of the overdraft or NSF fee that would be charged as part of the transaction. Consumers who would otherwise have been unaware of their bank balance can decline the transaction, while those who need to make a payment can approve it.
Millions of Americans live one purchase away from emptying their bank account, and they pay a steep price for oversights in account management. Better regulation can stop banks from preying on consumer inattention so that overdrafts and NSF can truly function as a means of emergency credit, at least until better options emerge.
Prasad Krishnamurthy is a professor of law at U.C. Berkeley School of Law.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. | Banking & Finance |
NEW YORK -- The Federal Reserve launched a new instant payment service Thursday. FedNow allows banks and credit unions to sign up to send real-time payments so they can offer customers a quicker way to send money between banks.
FedNow, which was first announced in 2019, published a list of banks and credit unions that are already signed up to the service. However, it might take longer for customers to be able to use the service with their bank.
Here's what you need to know about FedNow.
HOW DOES FEDNOW WORK?
FedNow offers instant payment services for banks and credit unions to transfer money for their customers. Unlike other private money-transferring services like PayPal or Venmo, FedNow services are not offered to customers directly through a third-party app or website. The services will only be available through banks or credit unions. However, once banks have adopted FedNow, they're expected to make it available on their websites and apps.
Once a bank offers the FedNow services, customers will be able to send money instantly. The service is also available 24 hours a day, seven days a week.
Among the banks that will offer the FedNow services soon are Wells Fargo and JPMorgan Chase.
WHY DID THE FED CREATE FEDNOW?
By creating FedNow, the Fed is updating their Automated Clearinghouse system to make it quicker and more accessible for people to send and receive online payments. The Fed is also catching up with other countries that already have real-time payment systems like FedNow, including England, China, Sweden and India.
FedNow will also equip banks with tools to identify and combat fraud attemtps. These tools include the ability for banks to flag suspicious accounts and limit the amount and frequency of payments by those accounts.
WHO CAN USE FEDNOW?
Customers, including individuals and businesses, whose banks or credit unions offer FedNow services will be able to send and receive money in real-time. If, for example, a customer wants to send money to a friend, both people have to bank with institutions that offer FedNow services.
WHAT ARE SOME SCENARIOS WHERE I CAN USE FEDNOW?
Given the speed of transactions, this service can be beneficial for customers in many ways.
Here are some examples:
— If your employer sends your paycheck through FedNow, the paycheck will be able to clear in minutes rather than days.
— If you forgot to pay your rent until the last minute, you will be able to send the money late at night without waiting to have it cleared the next business day.
WHEN WILL FEDNOW BE AVAILABLE TO ME?
FedNow is now live but it might take months or years for customers to be able to use this service, it all depends on when your bank makes it available.
WILL MY PRIVACY BE PROTECTED WITH FEDNOW?
The Federal Reserve and the FedNow service cannot access people's bank accounts and it doesn't have the authority for additional surveillance, according to Fed officials.
WILL FEDNOW REPLACE VENMO, PAYPAY OR OTHER SERVICES?
There are key differences between the FedNow service and apps such as Venmo and PayPal. FedNow is a service offered directly to banks and not to customers, which means FedNow does not have an app or website where customers will be able to send money to each other.
WHAT IS THE DIFFERENCE BETWEEN FEDNOW AND ZELLE?
While both FedNow and Zelle allow customers to make online transactions, there are some key differences. Zelle is a private app that works with some financial institutions while FedNow is backed by the Federal Reserve and is envisioned to be adopted by the majority of banks in the country.
Zelle lets you send and receive money instantly but the money might not be available for customers until days after the transaction. With FedNow, the Fed says the money will be available within minutes. Zelle has a customer-facing platform that allows customers to send money through their app while FedNow will not directly interact with customers but rather offer the services to banks.
WILL FEDNOW REPLACE CASH?
Fed officials have stressed FedNow is unrelated to the notion of a government-run digital currency, which social media users also falsely claim would lead to the elimination of cash.
“The Federal Reserve has made no decision on issuing a central bank digital currency (CBDC) & would not do so without clear support from Congress and executive branch, ideally in the form of a specific authorizing law,” the agency wrote in a series of tweets in April “A CBDC would not replace cash or other payment options.”
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The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism. | Banking & Finance |
Alkyl Amines Q2 Results Review - Muted Led By Pricing Pressure, Higher Competition: Motilal Oswal
Miss due to lower revenue and higher other expenses
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Motilal Oswal Report
Alkyl Amines Chemicals Ltd. Q2 FY24 revenue was lower than our expectation and declined 14% YoY, primarily due to increased Chinese dumping amid the company’s aggressive pricing in two-three products. Gross margin expanded to 45.7% in Q2. Ebitda, at Rs 483 million, was lower than our estimate due to higherthan-anticipated other expenses. This resulted in an Ebitdam of 13.7%.
Management highlighted that demand from the domestic market is decent enough, although some pressure exists in the agrochemical and pharma sectors. Demand has been weaker in Europe and Middle East, Turkey, and Africa regions than it has historically been. Some customers, though, are expecting demand to accelerate once the situation normalises.
Alcohol prices are expected to remain at elevated levels for the next year and Alkyl Amines hasn’t been able to pass on the price increase completely to customers. That being said, Alkyl Amines has maintained its market share in the domestic market, if not gained, even during the slowdown. The company, though, has been sacrificing margin in order to maintain its market share.
The company has commissioned its ethyl amine capacity of ~30 kilo tonnes per annum, and steady progress is being seen from the same.
Management intends to run it at a lower capacity than the nameplate one and then gradually ramp up as demand keeps on growing (at 5-7% per year). Alkyl Amines has a 70% market share in ethyl amine in the domestic market.
Due to underperformance in H1, we have cut our revenue/Ebitda/earning per share estimates by 10%/15%/21% for FY24 and Ebitda/earning per share estimates by 6%/8% for FY25.
The stock is trading at ~39 times FY25E earning per share of Rs 55.3 and ~26 times FY25E enterprise value/Ebitda.
We reiterate our 'Neutral' rating on the stock, and value it at 35 times FY25E earning per share to arrive at our target price of Rs 1,935.
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Andy Jacobsohn/AFP via Getty Images
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The U.S. budget deficit ballooned in the first nine months of its fiscal year, both because of a sharp increase in government spending and a significant drop in tax revenues.
Andy Jacobsohn/AFP via Getty Images
The U.S. budget deficit ballooned in the first nine months of its fiscal year, both because of a sharp increase in government spending and a significant drop in tax revenues.
Andy Jacobsohn/AFP via Getty Images
The federal government's deficit nearly tripled in the first nine months of the fiscal year, a surge that's bound to raise concerns about the country's rising debt levels.
The Treasury Department said Thursday that the budget gap from October through June was nearly $1.4 trillion — a 170% increase from the same period a year earlier. The federal government operates under a fiscal year that begins October 1.
The shortfall adds to an already large federal debt — estimated at more than $32 trillion. Financing that debt is increasingly expensive as a result of rising interest rates. Interest payments over the last nine months reached $652 billion — 25% more than during a same period a year ago.
"Unfortunately, interest is now the government's fastest growing quote-unquote 'program,'" said Michael Peterson, CEO of the Peter G. Peterson foundation, which promotes fiscal responsibility.
Why the deficit is surging
The deficit ballooned both because of a sharp increase in government spending and a significant drop in tax revenues.
Treasury officials blamed the falling revenues on reduced investment gains last year. The S&P 500 stock index, for example, fell nearly 20% in 2022, during a period of uncertainty about the economy. While the index has since rebounded, investors realized fewer capital gains last year, and paid less in capital gains taxes this year.
Overall, tax revenues between October and June were 11% lower than the same period a year ago.
At the same time, government spending jumped 10%. Spending on major health care programs such as Medicare and Medicaid rose sharply. Social Security payouts jumped 11%, thanks in part to an 8.7% cost-of-living adjustment for retirees and other recipients — the largest such increase in four decades.
The government has also paid $52 billion so far to cover deposits at three regional banks that failed this spring. That money will come from the Federal Deposit Insurance Corp.'s deposit insurance fund and a special assessment on other big banks.
Can surging deficits be sustained?
The government's gusher of red ink brought renewed calls for fiscal restraint.
"We are projected to spend more on interest payments in the next decade than we will on the entire defense budget," said Maya Macguineas, president of the Committee for a Responsible Federal Budget. "How can anyone possibly think this trend is sustainable?"
The recent showdown over the government's debt ceiling brought little meaningful change in the fiscal outlook. A deal to avoid a government default imposed modest caps on discretionary spending, which is a relatively small part of the overall budget.
The ballooning deficit continues to spark political fights. Congressional Republicans have rejected any call for tax increases, while the White House has fought proposals to cut spending on major programs such as Medicare and Social Security.
Macguineas said all aspects of the federal budget should be on the table.
"We're running off the rails at an alarming rate," she said in a statement. "We need to do better."
The Fitch bond rating agency warned in June that despite the country's "exceptional strengths," the nation's AAA bond rating could be jeopardized by "governance shortcomings," including "failure to tackle fiscal challenges." | Interest Rates |
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