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The Tory party is melting down again with Boris Johnson’s resignation. The tragedy is that when they should be running the country they are fighting within their party.
Nowhere is that more true than on energy policy. Every family has seen their bill go through the roof in the last 2 years. There’s a simple reason for that—our dependence on oil and gas which is priced on the international market. That means that for as long as we are so dependent on these fossil fuels, we’re at the mercy of dictators like Putin.
The problem is that instead of acting on that lesson, the Tories are failing to deliver the homegrown power Britain needs. They continue to block onshore wind, despite the fact that their ban has driven your bills up by £180 a year since 2015. They have dithered and delayed when it comes to new nuclear. And on oil and gas, they have thrown billions in subsidies at the very same companies that have made record profits at your expense.
And it’s even worse than that because we could be creating good, secure, unionised jobs in the industries of the future like making wind turbines but the Tories won’t do that either. President Biden in the US is winning that future for America but the government here is waving the white flag when it comes to the race for those jobs.
Labour will chart a different course. We have a world leading Green Prosperity Plan to double onshore wind, triple solar power and quadruple offshore wind to get cheap, clean, homegrown power for Britain by 2030. Your electricity bills won’t be at the mercy of the political thugs of the world.
We will continue to use the existing fields of our North Sea oil and gas for decades to come, but we won’t be issuing licenses to explore new fields, which won’t take a penny off bills and are a climate disaster. We will be focused on deploying the technologies that will power our future and make us energy secure and will work in partnership with industry and workers to deliver a jobs transition that utilises all the talent and expertise in this sector.
As Keir Starmer said this week, too many times politicians see change as something to stand and stare at in awe. Not us. Labour understands what is at stake and will not stand by and let industry wither and leave communities decimated, not when there are jobs in new industries to be won.
And we are determined to win the race for those good jobs of the future. It’s time to fight for Britain and bring power home so we’ll set up GB energy, a publicly owned energy generation company. Like EDF in France, it will generate clean power, investing in the new technologies that can win for Britain
We’ll invest in our ports so they can transport the enormous wind turbines, in electric battery factories so we can have a thriving car industry and in steel so we keep those good, well paid jobs. We’ll also create hundreds of thousands of good jobs insulating homes—a plan that can cut energy bills by up to £1,000 for millions of families.
The Tories will tell you we can’t afford to invest in these jobs of the future. Labour says we can’t afford not to invest. We have a plan for lower energy bills, good jobs, energy security and climate leadership, built on the rock of economic responsibility.
The Tories can never do that because they are fighting like rats in a sack and they won’t stand up for you. It’s time to sweep away the Tories and have a Labour government putting you first. | Energy & Natural Resources |
Tata Tech's Upcoming IPO Propels Little-Known Stock To All-Time High
Tata Investment Corp. owns 0.33% stake in Tata Motors—the promoter of Tata Technologies and biggest selling shareholder in the IPO
The first initial public offering from the house of Tata in nearly two decades has propelled a little-known Tata Group stock to all-time highs.
On Monday, shares of Tata Investment Corp. surged as much as 17.65% to an intraday high of Rs 4,598.70 apiece, before giving up some of the gains to settle at an all-time high of Rs 4,501.75 apiece—up 15.17% from its previous close. The stock’s trading volume was 27 times its 30-day average, Bloomberg data showed.
On Friday, the stock was locked in an upper circuit of 20%.
The outperformance and surge in trading volume can be attributed to the Nov. 22-24 Tata Technologies IPO—a first for Tata Group since the listing of Tata Consultancy Services Ltd. in August 2004. Tata Investment Corp., a non-banking financial company of sorts, invests primarily in Tata stocks. A new investment avenue from the salt-to-software conglomerate in nearly 20 years clearly has investors enthused.
Additionally, the public shareholding of Tata Investment Corp. is tiny at 1.34 crore shares, equivalent to 26.61% of the stake, according to the company’s shareholding pattern as of Sept. 30. Promoter Tata Sons Pvt. and related entities hold 3.71 crore shares—equivalent to a 73.38% stake.
To be sure, Tata Investment Corp. owns a 0.33% stake in Tata Motors—the promoter of Tata Technologies and the biggest selling shareholder in the IPO. The pure offer-for-sale of 6.08 crore shares at Rs 475–500 apiece will see the automaker offload as much as 11.41% of its stake in the ER&D company. All the proceeds will go to the selling shareholders. | Stocks Trading & Speculation |
Using buy now, pay later can be a lifesaver for many people, especially now it's less than three weeks to Christmas.
For some, using firms like Klarna and Clearpay and spreading the payments out is the only way they can afford to buy all the presents they want in time for the big day.
For 24-year-old Tamzin McGrath, using buy now, pay later is the only way she'll be able to get through the festive period.
"I've already got money I need to pay back after using it during the Black Friday sales," she says.
"So I think I will need to use them again for Christmas to get presents."
While paying your debt off interest-free over a short period is handy for many, a lot of the schemes charge a fee if payments are missed.
People are often not given any time to pay the money back if they can't afford it, or able to get compensation if things go wrong.
Tamzin, who admits she's an "impulse spender", says she often goes through phases of using buy now, pay later platforms more than she really wants to.
"It's just a vicious cycle because it seems like such an easy option that you see on nearly every website these days," she says.
'Next month's problem'
A recent Citizen's Advice survey found that more than a quarter of British adults will use buy now, pay later to help with Christmas shopping.
And new figures given to BBC Newsbeat by debt charity Step Change suggests using the schemes is almost as common as going into an overdraft.
Their survey of nearly 2,000 UK adults found more than half of people in buy now, pay later debt are also struggling to keep up with household and credit card bills.
Tamzin, from Clackmannanshire in Scotland, says she often racks up £300 a month, "which is quite a lot, especially when you have other bills like credit cards at the same time".
"If you've not got the money right now you think it's okay because Klarna and Clearpay can pay for it for you and that becomes next month's problem," she says.
Someone who knows all about having money worries because of schemes like this is Molly Plumb.
The 24-year-old currently lives at home with her dad in Hertfordshire and is saving up to move out soon.
But she has to wait a bit longer than she wanted after her credit score was affected by using a buy now, pay later scheme.
"It dropped by half [and] right at the top it said Klarna 'overdue payment'. I was confused because I hadn't used it in so long," she says.
Firing up the app again, Molly discovered a final instalment of £5.60 had failed to go through because her debit card had expired.
"It was a big shock for me as I didn't know it could affect my credit score," she says.
"I didn't get any reminders either about my card needing updating, that was a year ago and my score's only just started building back up again."
Companies use credit scores to help decide whether they should allow someone to have a credit card or approve them for loans.
And in June 2022, Klarna began sharing information with credit agencies about which of its users pays on time and who falls behind.
Step Change say a lot of people don't realise that buy now, pay later is a form of credit and wants them to think about whether they can afford any repayments.
"The festive period can often be a difficult time for people across the country, especially during a cost of living crisis," says Richard Lane, their director of external affairs.
"Anyone seeking to use credit should stop and ask themselves whether the repayments are both affordable and manageable for them."
In separate statements, Klarna and Clearpay told Newsbeat they have steps in place to help people avoid overspending.
A spokesperson for Klarna says they "send a number of reminders including texts and emails to ensure customers know what they need to pay back when".
While Clearpay says it tells customers to only buy what they can afford.
Back in 2021, the government said it would regulate buy now, pay later products - with draft plans published in February this year.
But people like Money Saving Expert's founder Martin Lewis have recently criticised politicians for not setting a timeframe for making it the law.
A Treasury spokesperson told Newsbeat the government department would "publish a response to our recent consultation once it is finalised".
"We must ensure that regulation of these products is proportionate to ensure borrowers are protected without unduly restricting access," they said. | Consumer & Retail |
The pace of grocery inflation has eased to its slowest monthly rate this year, according to industry data that backs hopes the worst may be over.
Kantar Worldpanel, which tracks supermarket sales and prices, reported a rate of 16.5% over the four weeks to 11 June.
That was down from the 17.2% figure revealed a month ago.
It marks the third month in a row that the rate of price growth in the sector has softened - but the report acknowledged it was no cause for celebration given the wider pressures on household bills amid the cost of living crisis.
Grocery inflation, it said, was still being most propped up by the cost of eggs, "ambient cooking sauces" and frozen potato products.
The latter item includes the national favourite, the humble chip, as potato costs remain elevated Europe-wide due to high production costs and poor crop yields.
The headline Kantar grocery inflation figure backed up an assertion by the chief executive of Tesco last Friday that the worst was over for industry prices, despite cost pressures remaining in several other areas including energy and staff wages.
Supermarket chains are under pressure to keep the pace of increases fair given a Competition and Markets Authority (CMA) inquiry and a government threat to potentially cap the price of essentials.
The government is targeting a halving of the rate of inflation this year but food costs have consistently held back an easing.
The grocery sector has denied any suggestion of profiteering, insisting that prices reflect the real picture across the supply chain.
Retailers, who argue that competition has been intense since the emergence of the discounters, have been cutting prices in the past few weeks.
Marks & Spencer was the latest, on Monday, to reveal lower prices for 70 everyday items.
Morrisons, the country's fifth largest chain, also announced that it was cutting the prices of 47 products by an average of over 25%.
Sainsbury's, Tesco and Asda have also made similar adjustments since the end of Kantar's reporting period a week ago.
Fraser McKevitt, head of retail and consumer insight at Kantar, said of its data: "This is the lowest rate of grocery price inflation we've seen in 2023, which will be a relief to shoppers and retailers.
"But prices rising at 16.5% isn't something to celebrate and it's still the sixth highest monthly figure in the past 15 years.
"Price rises are now being compared to the increasing rate of grocery inflation seen last summer, which means that it should continue to fall in the coming months, a welcome result for everyone."
The latest official inflation figures are due to be released on Wednesday.
They are tipped, by a Reuters news agency poll of economists, to show the consumer prices index measure dropping back to 8.4% in May from 8.7% the previous month.
However, it will not be enough for the Bank of England to hold off on another interest rate rise the following day.
Financial markets see a 0.25 percentage point increase to 4.75% as a certainty on Thursday.
That is because data is suggesting that inflation is becoming ingrained in the economy while the latest official wage figures show the gap between pay rises and the rate of inflation is shrinking fast. | Inflation |
Appliance Makers Brace For A Hit As RBI Tightens Grip On Consumer Credit
The central bank's measures mean there will be a direct impact on consumer sentiment as loans will get costlier.
Consumer durable makers were rejoicing with sales beating expectations this festive season after months of being under stress. But the central bank's latest norms for lenders on consumer loans could spoil the party.
On Thursday, the Reserve Bank of India raised risk weights on unsecured personal loans, consumer durable loans and credit card dues in a bid to curb aggressive lending in these sectors by both banks and non-banking financial companies. Such loans will now have a risk weight of 125% versus 100% earlier.
The restrictions won't apply for mortgages, loans for vehicle purchases and education as well as debt backed by gold. The circular also stated that credit card receivables of banks will attract a risk weight of 150%, while that of NBFCs will attract 125%.
The measures could have a direct impact on consumer sentiment as loans will get costlier. This, in turn, could hurt the still-fragile sales of televisions to washing machines, according to industry executives BQ Prime spoke with. Other than higher EMIs, consumers could face difficulty in accessing unsecured credit as lenders limit their exposure to such loans, fearing stringent regulatory action as RBI steps up scrutiny on the unbridled growth in unsecured loans even after repeated nudges.
"The RBI's decision to increase risk weight is expected to have a significant impact on consumer durable sales, especially those for bigger ticket sizes," said Arjun Bajaj, director at Videotex International Pvt.—a contract manufacturer of smart TVs for companies like Lloyd, Realme, Toshiba, Hyundai, BPL, and Daiwa, apart from 15 other global and domestic brands.
The move may prompt banks to reassess lending regulations, potentially resulting in higher interest rates and a reduction in financing options, according to Bajaj.
"The accessibility of financing and the availability of affordable interest rates boosted sales of expensive appliances. As a result, it is anticipated that the increased risk weight will have a greater impact on purchase of big appliances than the ones bought with small-ticket loans," he said.
The Consumer Electronics and Appliances Manufacturers Association—the apex body for India's Rs 75,000-crore consumer electronics and home appliances industry—has termed the move "unfair".
Credit card usage is concentrated among urban, relatively high-income consumers—the population segment with the deepest pockets and those most likely to spend during the festive season.
CEAMA President Eric Braganza was relieved as the new norms have been notified after the crucial festive period. "We saw about a 20% increase in sales this quarter till Diwali compared to the last," he said. However, Braganza said that while demand typically tapers off till early next year after peaking during Diwali, one has to wait for some more time to quantify the real impact of RBI's move to tighten credit control.
Daikin India's Managing Director and Chief Executive Officer Kanwaljeet Jawa also said that it is "unfortunate" as the curbs could potentially hurt consumer sentiment, thereby hitting sales just when the industry was seeing nascent signs of recovery after a prolonged slump. Daikin India saw 15-20% higher sales this festive season.
Retailers are also likely to bear the brunt of the regulatory action imposed by the RBI on Bajaj Finance Ltd. The largest consumer goods financier has been barred from disbursing loans under its two lending products—eCOM and Insta EMI Card, due to non-compliance with digital lending norms.
Bajaj Finance has temporarily suspended issuance of EMI cards to new customers, it said in a regulatory filing on Friday.
According to a top executive at a large electronics retail chain, who didn't want to be identified for speaking candidly, its buyers benefitted from Bajaj's flexible repayment tenure and no-cost EMI options at a time when high inflation weighed on their wallets. The ban is likely to have a severe impact, especially taking away a chunk of online customers, the executive said on the condition of anonymity citing business concerns.
"There are several platforms that absorb the costs, and the consumers get to avail no-cost EMI on credit cards," according to Avneet Singh Marwah, director and chief executive officer of Super Plastronics Pvt. SPPL is the exclusive licensee of online-only brands like Thomson, Kodak and Blaupunkt in India.
"For these set of consumers, this move is unlikely to cause any impact. But there are instances when the interest cost is borne by the consumers, and the new RBI norms will mean higher cost for them," he said.
Marwah expects the brands will be left to bear the costs ultimately to push sales as the central bank looks to tame inflation and move towards a saving economy rather than a spending economy.
"The RBI works in a traditional way. And what the RBI or the government doesn't understand is more the burden you give on brands—in terms of higher costs—the consumerism will be hit badly."
The first quarter of fiscal 2024 was challenging for the consumer durable industry as weak consumer sentiment amid an inflationary setting impacted sales of several product categories. Unseasonal rains as well as competitive pricing further added to the woes, with the industry registering a flat volume growth in the April-June period.
Diwali brought some cheer to manufacturers and retailers as demand for mid-to-premium appliances spiked. But RBI's move threatens to stall this momentum. | India Business & Economics |
The Department of Justice (DOJ) has charged Toronto Cash's founders with counts of money laundering and sanction violations. The cryptocurrency mixer first faced US sanctions last year for allegedly laundering over $7 billion in stolen funds. The DOJ now alleges that Toronto Cash facilitated $1 billion in money laundering, including $455 million funneled through the mixer by a North Korean cybercrime organization, the Lazarus Group. The overall charges include "conspiracy to commit money laundering, conspiracy to commit sanctions violations, and conspiracy to operate an unlicensed money transmitting business." Co-founder Roman Storm was arrested in Washington State, while the other half of Toronto Cash, Roman Semenov, is still at large.
The US government is attempting to send a strong message about using cryptocurrency for illegal purposes. "These charges should serve as yet another warning to those who think they can turn to cryptocurrency to conceal their crimes and hide their identities, including cryptocurrency mixers: it does not matter how sophisticated your scheme is or how many attempts you have made to anonymize yourself, the Justice Department will find you and hold you accountable for your crimes," Attorney General Merrick B. Garland said in a statement.
If you're unfamiliar, a cryptocurrency mixer is a service that makes it harder to track funds from their origin to the new owner. Most blockchains, like Bitcoin and Ethereum, are visible, so a mixer helps individuals hide their money flow — whether it be for reasonable or illegal activities. Chainalysis, a cryptocurrency analysis firm, found that in 2022, crypto addresses known for unlawful activity used mixers in almost 10 percent of transactions. | Crypto Trading & Speculation |
SEBI Proposes Changes In Regulatory Framework For Special Situation Funds
Special Situation Funds (SSFs) are sub-category Alternative Investment Funds (AIFs).
SEBI on Tuesday proposed changes in the regulatory framework for Special Situation Funds to facilitate the acquisition of stressed loans.
Special Situation Funds (SSFs) are sub-category Alternative Investment Funds (AIFs).
In a consultation paper, SEBI suggested a definition of "special situation assets", eligibility of investors in SSFs in terms of Insolvency law, restrictions concerning investment in connected entities, minimum holding period, subsequent transfer of loans, monitoring and supervision of such SSFs.
The proposals have been floated after consultations with the Reserve Bank of India (RBI), which is the principal regulator for the sale and purchase of stressed loans in India.
The Securities and Exchange Board of India (Sebi) has sought comments from the public on the consultation paper till Dec. 27.
To enable SSFs to acquire stressed loans, these funds need to be part of a RBI annexure pertaining to the transfer of loan exposure.
In the consultation paper, the regulator has proposed amending AIF norms to make changes to the regulatory framework for SSFs.
Under this, SEBI proposed a definition for a 'special situation asset' that includes securities of investee companies, whose stressed loans are acquired in terms of RBI Master Directions.
Further, SSFs having prior investment in securities of stressed companies should not be disqualified or barred from acquiring stressed loans of the said companies.
In addition, SSFs should not invest in or acquire a special situation asset if any of its investors is disqualified under the IBC rule about such special situation assets. Further, special situation funds should not invest in its "related parties".
Also, it has been proposed that SSFs should transfer or sell stressed loans, only to the entities enlisted in the RBI annexure. SSFs who have acquired stressed loans should be subject to a dedicated supervisory framework.
It has been suggested that SSFs should submit information in respect of all investments in stressed loans to a trade reporting platform notified by RBI. This information includes details of units issued, details of investors subsequent changes in unit holdings, resolution strategies implemented, and recoveries effected.
In January 2022, SEBI introduced the framework for Special Situation that will invest only in stressed assets. SSFs were introduced as a sub-category under Category I AIF.
"The challenges of stressed loans faced by the Indian financial system requiring significant capital infusion in Banks, Non-Banking Financial Companies (NBFCs), etc., necessitated exploring AIFs as a potential source of risk capital to supplement the efforts of Asset Reconstruction Companies ('ARCs') in the resolution of stressed loans," SEBI said. | India Business & Economics |
Nov 21 (Reuters) – Warren Buffett said on Tuesday he has donated about $866 million of Berkshire Hathaway (BRKa.N) stock to four family charities, and told shareholders “I feel good” as he moves nearer the sunset of his storied investing career.
In a regulatory filing, the company said Buffett donated 1.5 million Class B shares of Berkshire to the Susan Thompson Buffett Foundation. Named for his late first wife, the organization works in reproductive health.
Buffett donated another 900,000 Class B shares, divided evenly among charities run by his children, Howard, Susan and Peter: the Howard G. Buffett Foundation, the Sherwood Foundation and the NoVo Foundation.
The donations supplement the $759 million of Berkshire stock that Buffett donated to the charities at this time last year, also just before the U.S. Thanksgiving Day holiday.
Buffett also issued a rare letter to shareholders, again pledging that more than 99% of his wealth would go to charity, with his children serving as executors of his will. He said Berkshire was “built to last” and would remain in good hands.
While Buffett has curbed his non-Berkshire responsibilities over the years, he has never publicly signaled a desire to step down, including after a prostate cancer diagnosis in 2012.
“At 93, I feel good but fully realize I am playing in extra innings,” Buffett said in the letter.
Buffett has over the years often referred to his success at remaining healthy despite having the eating habits of a 6-year-old, including a love of junk food and sugary drinks.
“I think happiness makes an enormous amount of difference in terms of … longevity,” he told CNBC in April. “I’m happier when I’m eating hot fudge sundaes or drinking Coke.”
Berkshire did not immediately respond to a request for additional comment.
Greg Abel, 61, a Berkshire vice chairman, is slated to succeed Buffett as Berkshire’s CEO, while Howard Buffett would become non-executive chairman.
“We have the right CEO to succeed me and the right board of directors,” Buffett wrote.
Buffett is the world’s fifth richest person, with a $120.5 billion fortune, according to Forbes magazine.
Since 2006 he has donated more than half his Berkshire stock to the family charities and the Bill & Melinda Gates Foundation. The donations totaled close to $52 billion at the time they were made, with the Gates Foundation receiving more than $39 billion.
Buffett has run Omaha, Nebraska-based Berkshire since 1965.
The conglomerate owns dozens of businesses including the BNSF railroad, Geico car insurance, energy and industrial companies, and familiar consumer brands such as Dairy Queen and Fruit of the Loom.
It also recently owned more than $318 billion of stocks, about half of which was Apple (AAPL.O).
The Howard G. Buffett Foundation focuses on alleviating hunger, mitigating conflicts, combating human trafficking and improving public safety. The Sherwood Foundation supports nonprofits in Nebraska, and the NoVo Foundation has initiatives focused on girls and women.
Reporting by Bhanvi Satija in Bengaluru and Jonathan Stempel in New York; Editing by Arun Koyyur, Lisa Shumaker, David Gregorio, Shri Navaratnam and Leslie Adler | Nonprofit, Charities, & Fundraising |
Chancellor Jeremy Hunt is confident his plan to reduce rising prices is working and will soon ease the financial strain on UK households.
Ahead of parliament returning on Monday, Mr Hunt acknowledged that many households across the country are still struggling financially.
He emphasised that "sticking to the plan" to reduce inflation is the best way to help them.
Despite the Bank of England's prediction of a 7.1% inflation rate, experts still expect it to drop to around 5% by the year-end.
Inflation has eased back to 6.8% from a recent eye-watering peak of 11.1% last October, but is still far from the Bank of England's 2% target.
Meanwhile, the Office for National Statistics (ONS) has significantly upgraded the UK's growth figures, showing that the economy rebounded from the COVID pandemic faster than previously thought, surpassing its pre-pandemic size nearly two years ago.
"As we move into autumn, I know family budgets are still stretched, but inflation is coming down and now is the time to see the job through. We are on track to halve inflation this year and by sticking to our plan we will ease the pressure on families and businesses alike," Mr Hunt said.
"And it should be no surprise, despite the doubting from some, latest figures show we have bounced back better than many other G7 economies and are one of the most attractive countries in the world to invest."
He added: "This government is unlocking the UK's potential - attracting more investment, creating new jobs and growing the economy."
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Responding to Mr Hunt's comments, Rachel Reeves MP, Labour's shadow chancellor, said he was "completely out of touch with the economic realities facing families across Britain".
She added: "Going from no growth to low growth doesn't merit a victory lap and shouldn't be the summit of our ambitions."
She said that Labour's plan for the economy is about "investing in Britain" to "unlock growth, cut household bills and make working people in all parts of the country better off".
Chancellor Jeremy Hunt will be interviewed on Trevor Phillips on Sunday tomorrow morning. Tune into Sky News from 8.30am to watch. | Inflation |
Investors who chafe at having to take required minimum distributions (RMDs) each year have a new tool to help them reduce the tax bite of these withdrawals – and provide retirement income for life.
A financial advisor can help you manage your RMDs and tax liability in retirement.
Among the many provisions in the new SECURE 2.0 Act is an option that allows IRA holders to combine qualified charitable distributions (QCDs) with a little-known vehicle called a charitable gift annuity. The result? Your charitable donations can help fund your lifestyle in retirement. Here's how it works.
How to Turn a QCD into Lifetime Income
Anyone turning 73 this year is required to take a taxable required minimum distribution (RMD) from their IRA (the rules and ages vary according to birth dates). Someone turning 73 with an IRA worth $500,000 at the end of 2022 would need to withdraw $18,868 by the end of the year. That money is taxed as ordinary income.
Contributions to qualified charities can be made directly from an IRA for up to $100,000 each year, with that money being tax-exempt and counting toward the annual RMD amount. As of Jan. 1, retirees ages 70 1/2 or older can donate up to $50,000 of that $100,000 in one single tax year only to a charitable gift annuity.
In exchange for the donation, the charity makes a fixed annual annuity payment to the donor for the rest of their life or for the lifetime of the donor and donor's spouse. The payment must be 5% of the donation or more. Most charities set the annuity payouts using the American Council on Gift Annuities suggested rates, according to The Wall Street Journal.
A recent article uses the example of a 70-something retiree who donated $25,000 from her IRA to her alma mater, which immediately reduced the taxable income from her required minimum distribution (RMD) by that amount. By directing the money to her college's charitable gift annuity program, she has a fixed 7% annuity that will pay her $1,750 a year for the rest of her life. If she lives another 15 years, she'll receive more from the annuity than the amount of her original gift.
Taxes and Other Considerations
While this strategy can help lower your tax bill in a given year, keep in mind that the annuity payments are considered ordinary income, so you'll owe taxes on the money. Additionally, any money left over after the death of the donors goes to the charity.
While the $50,000 contribution must be made in a single year, it can be broken up into smaller amounts and distributed to different charities that offer charitable gift annuities.
However, both the $100,000 charitable donation limit and the $50,000 charitable gift annuity limit adjust for inflation after 2023. The annuity is backed by the assets of the charity.
Gift annuities allow donors to make contributions to charities that they otherwise might not be able to afford if they weren't going to receive the annuity payments in return, since it provides some income for the rest of the donor's life.
Bottom Line
Recent changes to the laws surrounding required minimum distributions (RMDs) from IRAs and other tax-deferred accounts have given retirees a bit more flexibility about how to handle their withdrawals and the resulting taxes. Using RMD money to make a charitable donation reduces the amount of taxable income from the distribution. Making a donation from an IRA to a charity offering a gift annuity provides some lifetime income for donors who might otherwise not be able to afford to make a donation.
Retirement Planning Tips
Tax planning is an essential part of determining how to save and invest for retirement, and becomes even more important when you start taking withdrawals. A financial advisor can help you answer your questions about RMDs and taxes. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now.
Social Security is a key component of most retirees' income plans. Knowing how much you can expect to receive is vital to creating a financial plan in retirement that meets your needs. SmartAsset's Social Security calculator can estimate how much your benefits will be and help you determine when is the best time to claim them.
Photo credit: ©iStock.com/FG Trade, ©iStock.com/donald_gruener, ©iStock.com/izusek
The post New RMD Rules Let You Turn Charitable Donations Into Retirement Income for Life appeared first on SmartAsset Blog. | Personal Finance & Financial Education |
House Oversight Committee Chairman James Comer said President Biden, in 2017, received $40,000 in "laundered China money" from the bank account of his brother and his sister-in-law in the form of a personal check, while claiming the president has "exposed himself to future blackmail" from Beijing.
Comer, R-Ky., detailed his findings in a video posted to X Wednesday morning. The findings come after Comer subpoenaed personal and business bank records belonging to both James Biden and Hunter Biden as part of his investigation into the Biden family’s business dealings and whether the president was involved.
"Remember when Joe Biden told the American people that his son didn’t make money in China? Well, not only did he lie about his son Hunter making money in China, but it also turns out that $40,000 in laundered China money landed in Joe Biden’s bank account in the form of a personal check," Comer said. "And the Oversight Committee has it."
Comer said Biden "benefited from his family’s shady deal" with Chinese Communist Party-linked CEFC.
Comer said the "money trail" began in July 2017 when Hunter Biden demanded a $10 million payment from a CEFC associate. In a WhatsApp message, he claimed "he was sitting with his father and that the Biden network would turn on his associate if he didn’t pony up the money," Comer explained.
Hunter Biden in the WhatsApp message allegedly told a Chinese business associate from Chinese energy company CEFC that he and his father would ensure "you will regret not following my direction."
Hunter requested the $10 million wire for his joint-venture with CEFC called SinoHawk Holdings.
"I am sitting here with my father, and we would like to understand why the commitment made has not been fulfilled," Hunter Biden told Henry Zhao, the director of Chinese asset management firm Harvest Fund Management. "And, Z, if I get a call or text from anyone involved in this other than you, Zhang or the chairman, I will make certain that between the man sitting next to me and every person he knows and my ability to forever hold a grudge that you will regret not following my direction."
Zhao responded, in part, "CEFC is willing to cooperate with the family."
Comer, in his video, said that Hunter's "extortion scheme worked," noting that just days later, $5 million "flowed in from a Chinese affiliate of CEFC."
Comer, citing bank records he and his committee have obtained, said that on Aug. 8, 2017, the $5 million in funds were sent to Hudson West III, a joint-venture established by Hunter Biden and CEFC associate Gongwen Dong. The same day, Hudson West III sent $400,000 to Owasco, P.C.— a separate entity controlled and owned by Hunter Biden, Comer said.
Days later, on Aug. 14, 2017, Hunter Biden wired $150,000 to Lion Hall Group, a company owned by James Biden and his wife Sara Biden. By Aug. 28, 2017, Comer said Sara Biden withdrew $50,000 in cash from Lion Hall Group and later deposited it into her and James Biden’s personal checking account.
"A few days later, Sara Biden cut a check to Joe Biden for $40,000," Comer said, referring to the Sept. 3, 2017 check his committee obtained. "The memo line of the check said, ‘loan repayment.’"
Comer said that even if the check — which was 10% of the $400,000 sent to Hunter's Owasco — was, in fact, a loan repayment, "it still shows how Joe benefited from his family cashing in on his name — with money from China no less."
"Without his family peddling his name and his son threatening a CEFC associate with consequences that he said Joe Biden knew about, James wouldn’t have had the money to write the $40,000 check to his brother Joe," Comer said, adding that the Biden family’s business with CEFC began while Joe Biden was serving as vice president.
"In taking funds sourced to a CCP-linked company that wanted to advance China’s interests, Joe Biden exposed himself to future blackmail and put America’s interests behind his own desire for money," Comer said, vowing to "continue to follow the money" and to "hold President Biden accountable for his corruption."
While President Biden has maintained he was never in business with his son, text messages obtained by Fox News Digital back in 2020 revealed that Joe Biden, in May 2017, met with Hunter's business associates for the Sinohawk venture — specifically, Tony Bobulinski. The meeting on May 2, 2017, would have taken place just 11 days before a May 13, 2017, email obtained by Fox News in 2020, which included a discussion of "remuneration packages" for six people in the business deal with CEFC.
The email includes a note that "Hunter has some office expectations he will elaborate." A proposed equity split references "20" for "H" and "10 held by H for the big guy?" with no further details.
The "big guy" has been said to be a reference to President Biden.
Meanwhile, the committee also on Wednesday released its fourth bank records memo, revealing additional payments the committee has "traced" from "Chinese companies to Joe Biden."
So far, during his committee's investigation, Comer said he has found that Biden family members, their business associates and their "related companies" received "significant payments from individuals and companies in China, Russia, Ukraine, Kazakhstan and Romania."
Comer said the House Oversight Committee has learned throughout its investigation that the Biden family and their business associates brought in more than $24 million between 2014 and 2019 by "selling Joe Biden as ‘the brand’ around the world."
Meanwhile, last week, Comer said his panel had uncovered evidence that Joe Biden, in 2018, received a "$200,000 direct payment" in the form of a "personal check" from James Biden and Sara Biden. That check was also labeled "loan repayment."
Comer said that James Biden "received $600,000 in loans from Americore — a financially distressed and failing rural hospital operator."
"According to bankruptcy court documents, James Biden received these loans based upon representations that his last name Biden, could open doors; and that he could obtain a large investment from the Middle East based on his political connections," Comer said.
"On March 1, 2018, Americore wired a $200,000 loan into James and Sara Biden’s personal bank account — not their business bank account," he continued. "And then, on the very same day, James Biden wrote a $200,000 check from this same personal bank account to Joe Biden."
Comer said James Biden "wrote this check to Joe Biden as a ‘loan repayment.’"
"Americore — a distressed company — loaned money to James Biden, who then sent it to Joe Biden," Comer said.
The White House said the committee found that as a private citizen, the president loaned his brother his own money when his brother needed it, and after reviewing bank records, there is a record that he was repaid.
Fox News Digital has reached out to the White House for comment on Comer's latest allegations. | Banking & Finance |
The cost of child care has risen so high in recent years that some parents can't afford to work.
As of September, the average household spent more than $700 a month on child care, up 32% from 2019, according to a recent report from the Bank of America Institute. The sharply higher costs are driving some parents to leave the workforce in order to look after their children.
At the same time, many families laying out for child care are having to tap their savings while down on spending, potentially weighing on economic growth, BofA noted.
"While our data only captures payrolls deposited into Bank of America accounts and might not paint the full picture, we think the [spending] decline still points to the possibility of some working parents leaving the workforce as child care prices rise rapidly," the report states.
Child care costs refer to the out-of-pocket expenses parents pay for their child to attend daycare or to hire a babysitter or nanny. The costs typically fall or disappear once a child enters preschool or kindergarten around ages 3 or 5.
The U.S. economy ReadyNation found.when parents leave work or reduce their hours in order to stay home with young children, a February study from
Inflation has driven up child care costs, while a loss in federal funding last month is also taking a toll. The 2021 American Rescue Plan Act (ARPA) directed nearly $40 billion to child care centers nationwide to help them stabilize their business during the pandemic while keeping prices lower for parents. But.
As a result, the cost of child care services are set to rise even higher, experts say, leading the country toward what they call aMeanwhile, the roughly two-thirds of families who need child care already dedicate more than 20% of their annual household income toward paying for it, according to a Care.com.
"With child care costs set to rise substantially with government funding disappearing, a lot of people are having to look and say 'Can we afford this higher cost of child care,'" Betsey Stevenson, an economics and public policy professor at the University of Michigan, told CBS News last month. "Child care centers are wondering if they can get in enough revenue to keep their doors open when they're losing access to federal funds."
Democratic lawmakers in Washington are hoping to restore some of the lost ARPA funds under new legislation introduced last month called the Child Care Stabilization Act (CCSA). The measure would allocate $16 billion in mandatory funding to child care centers each year for the next five years, among other things.
Democrats behind the bill point to a June study from The Century Foundation, a progressive public policy group, that estimated households could lose $9 billion every year in earnings because they would have to leave work or reduce their hours in order to look after their children.
Still, the bill faces a tough road in Congress, with Republicans opposing the legislation.
for more features. | Inflation |
Almost one in four (24%) people in the south-east of England will struggle to afford Christmas this year, data has revealed.
Vikki Brownridge, the chief executive of debt counselling charity StepChange, says the public "feel pressured" to spend money at Christmas time.
"This can encourage people to spend more than they can afford," she said.
Their survey found that 7% of people in the region will have to borrow on credit to cover their festive costs.
"Against a backdrop of almost two years of high inflation, it's very likely that relying too heavily on credit at Christmas could lead to debt problems in the New Year," Ms Brownridge said.
"Many adverts around this time of year imply that spending is the way to create a happy Christmas, but in reality, people would prefer their loved ones to be free from financial worries and problem debt.
"We would urge those who are thinking about borrowing to cover festive costs to always carefully consider whether those credit repayments will be comfortably affordable when the New Year comes around."
Across England, Scotland and Wales, 75% of people cited the higher cost of living as the need to rely on credit to fund their Christmas this year.
The charity revealed that January 2023 was their busiest month for more than two years, with a 32% rise in demand compared to the previous January.
The number of people going through debt advice at StepChange has risen by more than 10% year on year, the YouGov poll revealed. | Personal Finance & Financial Education |
The Treasury is considering a proposal to massively expand free childcare to one- and two-year-olds in England in a move that would cost billions at the spring budget.
Department for Education officials have submitted a plan for a free 30-hours-a-week entitlement for working parents of children aged nine months to three years, after being asked to work up options by the Treasury.
Other options include offering a smaller number of free hours for two-year-olds, an offer of 10 free hours for disadvantaged one-year-olds, and adjusting the ratios for childcare providers to allow adults to look after more children.
It comes after Labour signalled it would make a transformational offer to parents at the next election, with the shadow education secretary, Bridget Phillipson, pledging a modern childcare system that works from the end of parental leave until the end of primary school.
The Confederation of British Industry (CBI) has also called for billions to be spent on extra free childcare and reform of the system, while a group of influential Tory backbenchers, led by Siobhan Baillie, is pushing Hunt to cut childcare costs at next month’s budget.
The current free provision in England is 30 hours a week for working parents of three-year-olds unless one parent earns more than £100,000 a year, while provision for two-year-olds is limited to 15 free hours a week for those whose parents claim some benefits. Schemes are funded and set up differently in Scotland, Wales, and Northern Ireland.
The Treasury requested the work from other departments as part of its drive to get more people into employment, including young people, new parents and the recently retired. The Department for Education is understood to be feeding into the “inactivity” package of proposals being undertaken by the Department for Work and Pensions.
Labour market changes are likely to form the centrepiece of the spring budget. However, there are already worries within the Treasury about the probable £5bn to £10bn price tag of a big childcare offer, with one source saying Jeremy Hunt, the chancellor, was “concerned about cost” and would be unlikely to approve such a big offer.
One Treasury source said a big expansion of free 30-hour a week entitlement was the most expensive of a long list of options being looked at and it was difficult to see that amount of money being committed.
Other ideas include reducing the universal credit taper rate, which could be another option to incentivise employment if the childcare proposals prove too expensive.
Another option under consideration to help with childcare costs is a drive to make it much easier to register as a childminder, as these are the majority of provisions currently closing rather than nurseries and accounting for a shortage of places. There could also be a campaign to make parents more aware of the option of using childminders, not just nurseries.
On the proposal to massively expand free childcare, Robin Walker, the Conservative chair of the education select committee, said: “If this proposal has been put forward, the Treasury should definitely look very carefully at it. And they should consider how much money it will save in the long term [through increased economic activity] rather than just how much it will cost upfront.”
While some Tory MPs have been pushing for childcare changes, others keen on tax cuts are likely to worry about the price tag at a time when they would rather see the tax burden reduced.
It comes after Labour set out its intention to transform childcare if it wins power, with Phillipson saying parents are being “held back by a childcare system that just doesn’t work”.
The party has signalled it is prepared to make big changes, with the first step being universal free breakfast clubs for every primary school child in England.
Labour has also said it will enable councils to open new maintained nursery provision where they have the capacity.
A Labour source said: “An expansion of hours without reforming our broken childcare system will not deliver for families or grow our economy. An offer of additional hours is a waste of time if it doesn’t deliver more childcare places and higher standards.
“We currently have vast childcare deserts where there is no adequate private sector provision to deliver the existing system of hours. Which providers will deliver these new hours when families can’t access available childcare as it is?”
Pressure for reform of the childcare system is not just coming from the opposition but business groups too. The CBI said this week that the government should funnel billions of pounds into free childcare to help get more parents into work to tackle acute workforce shortages.
The group said the government urgently needed to announce extra funding and changes to childcare and early years support, arguing that a more accessible and affordable system was an immediate economic priority.
The lobby group, which represents more than 190,000 businesses across the country, said as much as £9bn of investment was required to improve the system and expand free childcare to one- and two-year-olds.
Hunt’s spring budget comes as ministers review options for increasing participation in the workforce after an exodus of “missing workers” since the Covid pandemic.
Official figures show almost 9 million working-age adults are economically inactive – neither in work nor looking for a job – including men and women who are caring for family.
Studies suggest inadequate access to childcare prevents about 1.7 million women from taking on more hours, equating to more than £28bn in lost economic output each year and exacerbating cost of living challenges.
The former prime minister Liz Truss last month urged Rishi Sunak not to ditch her proposals on childcare changes, including plans to scrap mandatory staff-child ratios in nurseries and increasing funding by 20 hours a week. However, she faced opposition over the ratio plan amid concerns over the quality of care, while business leaders are understood to favour increased funding.
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 benefiting from this.” | United Kingdom Business & Economics |
Voldemort In India's Corporate Sector: Succession Planning
Though family-owned businesses have the resources to hire the best talent, they fail to implement it for succession planning.
The Indian corporates is predominantly characterised by family-owned businesses. Of the top 500 listed entities, over two thirds are family-owned. From small enterprises to massive conglomerates, the influence of these dynasties can hardly be underestimated. Yet, beneath the glittering façade of these conglomerates, there lies a potentially catastrophic oversight—the absence of robust succession planning.
That’s why the lack of succession planning is like the Voldemort character. The Harry Potter series often referred to him as the Dark Lord, "," or even "He Who Must Not Be Named". The industry just does not want to speak about succession planning.
"Stupidity, and lack of succession planning, is never felt by the person. It is much to the suffering of those around that person."
This paradox is glaring; in a nation where wisdom, age, and experience are held in high regard, it is baffling to witness the myopia surrounding succession planning, a matter of utmost importance for the corporate world. Prominent business owners extol the virtues of preparation for the future, but when the spotlight shifts to their own companies, the message is lost in the clamour of vested interests. In many of these family-owned enterprises, it is not uncommon for leadership transitions to be clouded by familial rivalries, personal biases, and a lack of meritocracy. The baton often passes from one generation to the next, not based on qualifications or competence, but merely by virtue of bloodline.
In the context of the prevailing issues in many Indian family-owned enterprises, it becomes evident that a crucial lesson must be learned—the imperative separation of ownership from management. The perpetuation of leadership based solely on familial lineage is a practice that needs to be reexamined. It is vital to understand that birthright alone should not be the determining factor for executive leadership positions. Instead, businesses should prioritise meritocracy, competence, and a rigorous assessment of qualifications when appointing successors to key roles. The tragic irony is that, while many families have the resources to hire the best talent for their businesses, they often fail to implement the same high standards when it comes to succession planning.
The absence of a well-structured succession plan in business families presents a myriad of challenges that can have far-reaching consequences. One significant challenge is the potential for internal conflicts and rivalries among family members, as the lack of a clear succession strategy can lead to power struggles and discord. This not only disrupts the harmony within the family but also jeopardises the stability of the business.
Additionally, without a well-defined successor, there is a risk of key leadership positions remaining vacant, which can hinder decision-making and strategic planning. Moreover, lack of transparency in the succession process can erode trust among employees, investors, and stakeholders, as they are left uncertain about the company's future direction. The absence of a competent successor can also expose the business to external competition and market volatility.
Many Indian promoters often claim to be the stewards of corporate governance, and profess running their entities with utmost professionalism. Yet, when it comes to having their own successor planned in advance, they fail.
In the profound teachings of Indian scriptures, we find an enduring truth that speaks of this dichotomy between mere perception and the transformative power of thoughtful action. The Bhagavad Gita emphasises the importance of discernment and decisive action. In its verses, Lord Krishna imparts to Arjuna the wisdom that seeing is distinct from truly perceiving, and true wisdom lies not in the ability to witness the world but in the capacity to process that knowledge into purposeful, outcome-driven conduct. To merely acknowledge the need for succession planning is akin to having sight without vision, as wisdom lies in the translation of that understanding into a tangible, forward-looking strategy; a message that the promoters should heed with great urgency.
Succession planning should be more than a tokenistic acknowledgment of the need for change; it should be a proactive, deliberate, and thoughtful process that ensures continuity and growth. While we acknowledge the contributions of these family-owned businesses to the Indian economy, it is imperative that they do not become stagnant ponds, but rather, continue to evolve and adapt to the ever-changing business landscape.
Promoters often wield immense power and influence in the corporate world, steering the fate of their enterprises. Yet, it's vital to remind them that they are not 'Markendaya', the immortal sage of Indian mythology. Just as no one is immortal, so too must promoters acknowledge the impermanence of their roles.
Embracing succession planning and nurturing the growth of the next generation is not a concession to mortality; it's a prudent recognition of the evolving nature of business and leadership. By cultivating a legacy that extends beyond their own tenure, promoters can ensure that their influence endures. In the absence of genuine succession planning, we risk consigning the corporate future of India to a precipice, and it is the nation and its people who will bear the brunt of this collective failure.
Srinath Sridharan is author, policy researcher and corporate advisor.
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team. | India Business & Economics |
A new tax year has now started with calls for people to be "diligent" with their finances due to tax, pension and benefit rules.
Frozen income tax thresholds mean millions of people could be pulled into a higher tax band or see a greater proportion of their salaries taxed.
But, on Monday, the state pension and a host of benefits will rise by 10.1%.
A series of bill increases - including council tax, water, and vehicle excise duty - came into force on 1 April.
Prices also continue to soar, particular the cost of grocery shopping, although the rate of increase is expected to slow later in the year.
"As keeping on top of rising prices remains a daily battle for many, the new tax year personal finance considerations can easily be missed," said Myron Jobson, analyst at investment platform Interactive Investor.
"Hoping for the best and preparing for the worst remains a diligent approach to finances."
Income tax rules
Income tax bands - or thresholds - are frozen until 2028. That means any kind of pay rise could drag you into a higher tax bracket or mean a greater proportion of your income is taxed.
Had the thresholds gone up in line with inflation, then someone earning £30,000 would have paid £398 less in tax in the coming year, according to Interactive Investor.
The Office for Budget Responsibility - which independently assesses the government's economic plans - estimated that freezing thresholds until 2028 will create an additional 3.2 million new taxpayers. It said 2.6 million more people would pay higher rate tax.
In England, Wales and Northern Ireland, you start to pay income tax on annual earnings of more than £12,570, charged at 20%. You then pay tax of 40% on earnings over £50,270 a year.
The bands are different in Scotland, where the rates for higher earners have increased. Changes announced in the Scottish Budget mean that everyone earning more than £43,662 in Scotland will now pay more income tax.
The Chartered Institute of Taxation says someone with an annual income of £50,000 will pay an additional £63 in tax in the coming year.
Anyone earning £150,000 in Scotland will pay an additional £2,432 compared with the year just gone, which will be £3,857 more than someone earning the same salary elsewhere in the UK.
Across the UK, the threshold when the highest earners start paying the very top rate of tax has fallen from £150,000 to £125,140.
Higher pension and benefits such as universal credit
The new tax year also brings a significant increase to the level of the state pension and a host of working age benefits - although it is technically on Monday that the higher rates kick in.
They will rise by 10.1%, in line with the rising level of prices.
For the state pension, paid to those aged 66 and above, the changes mean the amount received from Monday will be:
The benefits which are rising include universal credit, which is claimed by nearly six million people, many of whom are working. A single person receiving universal credit could get £400 more in the coming year than during the last 12 months, depending on their circumstances.
Neil Hugh, from savings and retirement group Standard Life, said: "It is more important than ever that people know what sort of support is available to them."
He said some people were unaware of the benefits for which they were eligible, or put off claiming because they thought they would be rejected, or it would take too long.
Benefit entitlement is also a gateway to cost-of-living payments, which can be worth hundreds of pounds and will resume later in April.
How to check if you can claim a benefit
There is a guide to benefits. when you qualify and what to do if something goes wrong, from the independent MoneyHelper website, backed by government.
Pension, dividend, and capital gains tax changes
The tax-free limit for pension savings during a lifetime has now been abolished. The annual allowance has gone up from £40,000 to £60,000, after being frozen for nine years. Those who are already drawing a pension, but want to save more can now put in £10,000 a year, up from £4,000.
The annual dividend allowance - the amount of share dividend income you do not have to pay tax on - has been cut from £2,000 to £1,000, with a further reduction to £500 coming in 2024-25.
So, anyone receiving more than £1,000 a year in dividends will have to pay tax on the excess. You do not pay tax on dividends from shares inside an Individual Savings Account or pension funds. Up to £20,000 a year can be saved in an Isa.
The tax-free allowance on capital gains, made on selling an asset such as a buy-to-let property, has been cut from £12,300 to £6,000.
Plenty of time to fill out a tax return
However, the deadline to file online is the end of January next year. | Personal Finance & Financial Education |
RBI Spent Nearly Rs 18,000 Crore On Printing Rs 2,000 Notes Since 2016
Stock of banknotes in other denominations continues to be adequate to meet the public's currency requirements, says minister.
The Reserve Bank of India has incurred a cost of Rs 17,688 crore for printing banknotes of Rs 2,000 denominations since its introduction in 2016, Union Minister of State for Finance, Pankaj Chaudhary, said on Monday.
The central bank had issued Rs 2,000 banknotes in November 2016 after the government demonetised the Rs 500 and Rs 1,000 currency notes.
Around 89% of the Rs 2,000 denomination notes were issued prior to March 2017 and are close to the end of their useful life, which spans four–five years, said Chaudhary in a written response to a question in the Lok Sabha. "The stock of banknotes in other denominations continues to be adequate to meet the currency requirements of the public."
Public sector banks spent about Rs 32 crore to recalibrate ATMs for Rs 2,000 currency notes. The State Bank of India spent approximately Rs 12.8 crore on the recalibration of ATMs, according to Chaudhary.
From fiscals 2017–19, the total value of Rs 2,000 notes in circulation stood at Rs 7.4 lakh crore, according to the RBI. The RBI did not print any new Rs 2,000 denomination currency notes in the following years.
On May 19, the central bank announced the withdrawal of these notes from circulation under the Clean Note policy, and the public can deposit or exchange Rs 2,000 notes at bank branches until Sept. 30. However, the deadline was later extended by a week to Oct. 7.
The total value of the highest-denomination currency notes in circulation stood at Rs 3.56 lakh crore, compared with Rs 9,760 crore as of Nov. 30, according to the RBI.
The returned banknotes "are being processed in (the) RBI as per the laid-down procedure for disposal', Chaudhary said.
The RBI has emphasised that the Rs 2,000 banknote continues to remain a legal tender. Depositors could also exchange Rs 2,000 banknotes for only up to Rs 20,000 at one time at the RBI's 19 issue offices. Following the date, depositors can continue exchanging the currency notes at the RBI's issue offices as well as send the bills through India Post.
BQ Prime had reported last week that several people had been making a beeline outside the RBI headquarters to exchange the banknotes for nearly two months. | India Business & Economics |
Religare Denies Charges Of Excessive Remuneration To Its Chairperson Rashmi Saluja
Religare Enterprises refuted the allegations levelled against Chairman Rashmi Saluja terming those as completely false and erroneous.
Religare Enterprises Ltd on Monday refuted the allegations levelled against its Chairman Rashmi Saluja with regard to excessive remuneration, terming those as 'completely false and erroneous'.
The statement comes within days of proxy advisory firm InGovern Research alleging that Saluja was paid excessive remuneration.
Religare said the performance-linked remuneration was paid to Saluja after approval of the Nomination and Remuneration Committee, Board, and the shareholders of REL.
"The allegation that the executive chairperson draws a remuneration of more than Rs 150 crore per annum is completely false and erroneous. As per the annual report for FY 22-23 of REL, the remuneration for the Executive Chairperson was Rs 8.12 crore. Even after including the perquisites value of the ESOPs, it reached a figure of Rs 42.06 crore," Religare said in a statement.
It further said that Saluja was reappointed as the Executive Chairperson in Feb. 2023 for a second term for a five-year period through a resolution by the Board and approval of shareholders.
Religare further said that Saluja was instrumental in creating value for all the shareholders of REL. The share price of REL, which saw a low of Rs 17 in 2020, rose to a high of Rs 280 in Sept. 2023.
"The ESOP perquisite value is also reflective of this significant value creation a part of which was also shared by her as a shareholder/employee of the company," Religare added.
Currently, Religare management is engaged in a tussle with the Burman family-- promoters of FMCG major Dabur India.
Burman family which has hiked its stake in Religare through creeping acquisition to around 26%, is now proposing to make an open offer for acquiring another 25% stake in the financial services company.
As per market regulator Sebi rules, it is mandatory for a company to make an open offer of 26% to all shareholders.
Religare also denied that the Burman family, at a meeting on Sept. 20, had informed Saluja of a proposed open offer.
The Burman family, it may be mentioned, had announced an open offer to buy additional share of REL at Rs 235 apiece, amounting to a total consideration of up to Rs 2,115 crore in cash.
Religare had objected to the open offer price and sought an independent valuation report.
On allegations that Saluja had liquidated the ESOPs after meeting a representative of the Burman family on Sept. 20, the Religare statement said, "The process of liquidation of ESOPs through financing and sale was set in motion several days before the said meeting."
The actual sale, it added, happened on Sept. 21 and 22 at the prevalent market price and the share sale proceeds were utilised to further invest in Religare group entity. | Banking & Finance |
We're Drowning In Subscriptions
If it feels like you’re drowning in subscriptions, you aren’t wrong. It’s hard to keep track and, even if you do, you may eat at Panera a lot less than you thought after the first few months of guzzling free tea.
(Bloomberg Opinion) -- It’s been more than a decade since the Internet generation became accustomed to paid subscriptions with Amazon Prime, Hulu and Netflix. It made sense when Apple Music and Spotify joined in, charging for unlimited music streaming. Some people even got into box subscriptions through the likes of beauty and trinkets box FabFitFun or grooming products box DollarShaveClub. But the subscription economy has finally gone too far. It has now expanded to include free iced tea with a $11.99 monthly Panera subscription, free delivery of 7-Eleven snacks for $5.95 a month or Chinese-American food from PF Chang’s for a monthly $6.99. It doesn’t end there. Companies from Sweetgreen Inc. to Sephora now offer subscriptions for discounts on orders or free same-day delivery.
If it feels like you’re drowning in subscriptions, you aren’t wrong. It’s hard to keep track and, even if you do, you may eat at Panera a lot less than you thought after the first few months of guzzling free tea. For some companies, that’s part of the calculation, plus there’s the bonus of scooping up data on consumers while having them pay for the privilege of free delivery. What a steal!For retailers, subscription programs as opposed to free rewards programs make business sense. But at a time when people are cutting back on their spending, retailers have a higher bar to jump to convince stretched consumers to spend extra cash amid all the subscription noise.
So why are you suddenly seeing everyone offer some kind of subscription program? There’s a few reasons. The cost to lure in new customers has skyrocketed over the last couple of years as companies and states curb data tracking. Apple Inc.’s mobile operating software allowed customers to opt-out of tracking, limiting how much data marketers collect. Mozilla and Google started to phase out third-party cookies on their networks, further curtailing data collection. California passed a privacy law in 2018, which set a precedent that other states have followed.
Companies cut off from their old data pipes are looking for new ways to learn about us and sell us things. That means they need more data collected directly from us and with our consent. Turns out that subscription programs not only allow them to get our consent to share our information, but we also agree to for that data in return for free perks. Amazon.com Inc.’s Prime membership has proven to the industry that subscription programs are a great money maker. Amazon instantly added billions of dollars to its subscription revenues when it raised the cost of Prime last year from $119 to $139 for US members. Companies new to the subscription game are seeing results too: Sweetgreen co-founder Nicolas Jammet told investors in December that Sweetpass subscribers made about five more transactions during their one-month pilot last year than they had previously.The hope for companies is that super-users are balanced off by those who don’t quite use the subscription perks as much. So maybe a portion of shoppers rack up purchases at 7-Eleven and get the full bang for their buck; another chunk passively pays for the subscription and forgets to use it. Retailers and restaurants have pretty decent odds that people will subscribe and forget. Market research firm C+R Research found last year that people pay an average of $219 a month in subscriptions, over $100 more than they estimated.
As people return to working from an office and seeing friends in person, the hope is that subscriptions will help drive routine purchases. But many pre-pandemic routines are gone. Most people have hybrid work schedules where they’re in an office for part of the week and working from home part of the week. Maybe a Sweetgreen subscription worked in the old days of a traditional workweek, but these days? Not so much when you can make a salad at home and you’ve just splurged on an upcoming summer trip.
Even for those subscriptions that we absolutely want, the preponderance of choice can be bewildering. With Showtime’s ; HBO Max’s ; and Apple TV+’s all premiering at the same time, plus live sports and (of course) Netflix, you will easily find yourself shelling out more than $100 to enjoy your evening favorites. And then, there’s the kids’ subscriptions. Not the cheaper, unbundled future people were hoping for.With a looming economic downturn, people are looking to cut costs, opting for cheaper alternatives and dropping little luxuries. Add to that subscription fatigue, and companies will need to think more creatively about how they can help consumers save either time or money. It’s finally time for the subscription economy to go into reverse. More From Bloomberg Opinion:
- Schultz Falls From Grace in Starbucks Union Fight: Beth Kowitt
- Retailers Know This Shopping Spree Won’t Last: Leticia Miranda
- Why Block TikTok When You Can Put It on Probation?: Minxin Pei
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Leticia Miranda is a Bloomberg Opinion columnist covering consumer goods and the retail industry. She was previously a business reporter at NBC News and a retail reporter at BuzzFeed News.
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Consumer & Retail |
It is absolutely critical labelling issues raised by the Windsor Framework are resolved ahead of an October deadline, a group representing British supermarkets has said.
The framework was agreed by the EU and UK in February.
It is intended to ease post-Brexit trade between Northern Ireland and the rest of the UK.
The British Retail Consortium said the government needs to provide clarity before the deadline.
Andrew Opie, from the organisation, told a House of Lords committee he expects the first guidance on labelling will be published in the next 10 days, after the Northern Ireland council elections.
The Windsor Framework aims to significantly reduce the number of checks required on goods from Great Britain to Northern Ireland by introducing a system of green and red lanes at Northern Ireland ports.
'Numbers wouldn't stack up'
Labelling is a key issue for businesses because it will determine whether or not they can trade in the red or green lane.
The green lanes will be for British goods staying in Northern Ireland, and labelled 'not for EU', while goods travelling into the Republic of Ireland - and so the EU - will use the red lane.
Products going through the green lane will not need checks and will require minimal paperwork while red lane goods would still be subject to checks.
"Labelling is one of the requirements of using the green lane, so if we don't know how to label the products then we shouldn't be using the green lane and would be subject to all the checks," said Mr Opie.
"You couldn't run a commercial supermarket by running all of their trade through the red lane, it just wouldn't work, the numbers wouldn't stack up."
As labelling changes take months, he said, supermarkets need urgent clarity.
He added that a big concern is that they do not know how to move food in a way that will be compliant and that some retailers are already looking to see what is feasible to send to Northern Ireland from October.
His message was echoed by Glyn Roberts, from Retail NI, who said "so much more clarity" is needed for his members in Northern Ireland ahead of the "fast-approaching" October deadline.
He also called for more engagement with business groups, as a lot of political engagement has either slowed down or stopped.
Different sectors will be affected in different ways by the Windsor Framework.
Declan Gormley, managing director of Dunmurry-based manufacturer Brookvent, told the committee his business exports about 75% of its products.
He said these changes will be difficult to work in practice if you sell to 11 different countries and suggested it might be easier for some manufacturers to just put everything through the red lane. | United Kingdom Business & Economics |
Bond Market’s ‘Vicious Cycle’ Risk Puts Spotlight On Fed’s QT
The worst selloff of longer-term Treasuries in more than four decades is putting a spotlight on the market’s biggest missing buyer: the Federal Reserve.
(Bloomberg) -- The worst selloff of longer-term Treasuries in more than four decades is putting a spotlight on the market’s biggest missing buyer: the Federal Reserve.
The Fed is shrinking its portfolio of government securities at a $720 billion annual pace, making the Treasury Department’s job of funding a near-$2 trillion federal deficit all the harder. Quantitative tightening, as the Fed’s program is known, ended earlier than officials expected the last time it was executed, and some market participants predict the same this time.
While Fed Chair Jerome Powell and fellow policymakers have indicated the surge in longer-term Treasury yields may reduce the case for continuing to hike the central bank’s benchmark interest rate, they’ve made no such suggestion for QT. Instead, they’ve said the process could keep going even after rate cuts have begun.
With 10-year yields surging past 5% for the first time since 2007 this week — and having climbed at the fastest pace since 1982 — the Fed may come under pressure to reconsider. At stake is the threat of surging borrowing costs ushering a harder landing for the economy, an outcome that would imperil riskier assets such as equities and corporate credit.
“They can change that very quickly if they need to — if the bond vigilantes continue to send a message,” Jack McIntyre, portfolio manager at Brandywine Global Investment Management, said of the Fed and QT. “Supply is important right now, and it’s supply during QT and that’s the interesting thing.”
Powell told US lawmakers earlier this year he was “very conscious” of the need to shrink the Fed’s balance sheet and not just leave it bloated after each easing cycle. The cost of the Fed’s past quantitative easing is now clear: it’s paying high interest on the bank reserves that QE created — leaving about a $100 billion hole in the Treasury’s revenues.
And there’s still too much liquidity, by the calculation of former New York Fed President William Dudley. He estimates reserves in the banking system are about 12% of US gross domestic product, compared with 7% in September 2019.
“A lot of people in the market are saying ‘when will the Fed stop QT?’ — Not any time soon,” Dudley, a Bloomberg Opinion columnist, said on Bloomberg Television last week.
Read More: The Fed Has a Lot of Quantitative Tightening to Do: Bill Dudley
That offers no solace to the $25.8 trillion US Treasuries market, which has seen signs of growing reticence among buyers of absorbing the increasing sizes of longer-dated debt. Auctions of 10- and 30-year Treasuries were poorly received this month. And supply will keep increasing, thanks to a widening budget deficit. The gap reached $1.7 trillion in the fiscal year that ended last month.
“Further gradual increases in coupon auctions sizes will likely be necessary in future quarters,” Josh Frost, the assistant secretary for financial markets at the US Treasury, said in remarks last month. The department’s latest borrowing plans are due for release Nov. 1.
Meantime, other onetime big buyers are also missing in action, including Japanese investors. The marginal buyers nowadays are the likes of hedge funds and others that tend to be more price sensitive — one of the dynamics driving yields up.
A market where longer-dated yields climb in the absence of notable rallies means that QT “is potentially problematic,” said Alan Ruskin, chief international strategist at Deutsche Bank AG. It also could force “more bank hedging and unrealized losses for financial lenders, and higher bond yields,” he said. “That has the makings of a potentially vicious cycle.”
What’s offering comfort to Fed officials for now is that liquidity is mainly draining from the Fed’s reverse repurchase program, known as the RRP — where money market funds and others park cash — rather than from bank reserves, which are more closely tied to the economy. It was a slide in reserves in 2019 that triggered such problems in US financial plumbing that the Fed called off QT.
Read More: New York Fed’s Perli Says Balance-Sheet Runoff Smooth, Eyes Risk
Policymakers have a dashboard of metrics they watch to know when reserves are reaching a scarce level, Dallas Fed President Lorie Logan, who previously oversaw management of the balance sheet at the New York Fed, said last week at a Money Marketeers event.
“There’s quite a bit of time still to go,” Logan said. For now, she said she’s focused on the RRP and “waiting for that to get down closer to zero.”
“Bank reserves have declined only modestly since the Fed’s quantitative tightening began last June,” said Daleep Singh, chief global economist at PGIM Fixed Income, who previously worked at the New York Fed and US Treasury. “But eventually, as the RRP facility is drained,” all else equal, “the Fed’s portfolio runoff will place downward pressure on bank reserves.” That may trigger problems for the financial system, he said.
Ten-year yields were around 4.82% late Tuesday in New York, up more than three quarters of a percentage point since the end of August. Joyce Chang, chair of global research at JPMorgan Chase & Co., wrote in a note that QT is “an under-appreciated risk contributing to higher yields for longer.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Bonds Trading & Speculation |
As price rises bite into budgets, many people are cutting back on the weekly food shop.
As well as buying less, people are looking for ways to make their money go further and to make the most of what they have. The BBC spoke to money bloggers for their tried and tested tips.
1. Keep track of what you already have
Rosie suggests taking a good look at your cupboards before each shopping trip. "We all know the value of making a list, but if you're adding to what you've already got in your cupboards, then you're going to spend money on things you don't need," she says.
"There's no point in buying more jars of pasta sauce if you've already got five of them in the cupboard."
She keeps a list of what's in her cupboards in a notebook, so she always knows what she already has when she goes shopping. She says it has helped bring her weekly food shop for her, her husband and one-year-old son down to around £40.
2. Head for the reduced section first
Lynn recommends changing how you shop when you walk into a store and to head straight for the reduced section. "If you spot something there that's on your list, you can tick that off and you've already saved some money," she says.
She suggests then going straight to the frozen-foods section, and then the canned-produce aisle.
"Frozen meat, fish and vegetables will almost always be cheaper than the fresh option," she says. "If you get what you need from there before going on to the fresh produce aisles, you're likely to make significant savings."
3. Make better use of your freezer
According to sustainability charity Wrap, the average household wastes around £700 every year by throwing food away. Lynn says making better use of her freezer has helped her cut down dramatically on waste.
"If things are getting close to their use-by date you should always try to freeze them," she says. "You'll also be able to buy things cheaper in supermarkets that are close to their sell-by date. Things like milk and cheese, even fruit and vegetables, can all be frozen and kept for when you need them."
More on the basics of freezing can be found on the Food Standards Agency website.
Kate Hall, who runs The Full Freezer website, uses her freezer as a pause button rather than a long-term storage solution. She says that while almost all foods can be frozen, you do have to change the way you use them.
"You can't defrost a banana or salad and expect it to be the same as when it went into the freezer," she explains. "But if you think about how you could use it in puddings or in soups or in casseroles, then you're going to save a lot of money."
4. Understand packaging
Rosie says that a lot of what we buy in the supermarket is packaged for their convenience and not ours. "How often have you bought a tray of mushrooms covered in cling film only to have them go off in their packaging? They're wrapped up like that to make them easier to transport," she explains.
She puts hers in a paper bag when she gets them home but says just taking off the plastic wrapping will help them last longer.
Helen White, from Wrap, which runs the Love Food Hate Waste campaign, says there are small things we can do to make food last longer, especially fresh vegetables and salads - the UK's most wasted food group.
"Just putting a piece of kitchen roll into an open bag of salad to absorb moisture is going to help it last longer," she says.
Keeping fruit in the fridge will help it last longer, but she suggests checking that the temperature is set to below 5°C. "We think millions of UK fridges are at least two degrees too warm," she says. "This is bad news for milk and other food items kept in the fridge, which can go off [more quickly] when not stored at the right temperature."
5. Make use of experts
Rosie tries to use local, smaller retailers a lot to tap into their years of experience.
"Butchers are a great resource and someone we shouldn't be afraid to talk to about saving money," she says. "If you go into your local butcher and tell them you've only got £8 for your meat for the week, they'll be able to tell you how to stretch your money by buying the cheapest cuts.
"They're the best people to advise on how to cook them and how to make them go further."
We asked you for your tips, here are some you sent in:
My wife and I sit with our iPads on both Asda and Tesco and put in the exact same things for our weekly delivery. We then check at the end total costs including delivery and whoever is cheapest 'wins' our order. We feel that writing a list of things you need then getting them online saves going to the shop where we would invariably end up throwing things in that we don't need. Russell, Portstewart, Northern Ireland
I highly recommend having a weekly menu, so you know what you are going to cook/prepare for your meals each week. I post this on our fridge and our family of five always knows what to expect. This not only saves money but eliminates the stress of "what's for dinner"? I know exactly what I need to get, and I stick to my budget because I go to the supermarket with a plan, plus I check the fridge/pantry before I go shopping. Michelle Lutchman, Surrey
Tip is not about food but about cleaning products. There is much money to be saved on laundry and cleaning products. These are full of gimmicks to make us buy additional stuff. For instance, you don't need separate washing powder for coloureds. Fading is largely due to exposure to daylight rather than brighteners in washing powder. Helen Borodzicz, Lytham, St Annes
I go to the supermarket at about 2.30 pm when they are reducing sandwiches - that's my tea sorted! Sue Tingey, Wiltshire
How is the rising cost of living changing the food you eat? You can share your experiences 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: | Inflation |
Sarah Ronan once had to resign from a job because she couldn't afford childcare.
Far from being a rare example, it's a story that's all-too-familiar in the UK, which has some of the highest childcare costs in Europe, and where women are actively discouraged from going back into the workplace after starting a family, because of the expenses involved.
“Like many parents, I had to piece together that childcare puzzle to make it all work. My son was with one set of grandparents two days a week and with another set one day a week. He was in nursery for only two days a week. And then, the situation with the grandparents changed due to ill health,” says Ronan, project lead for the Early Education and Childcare Coalition at the UK Women’s Budget Group.
“I was faced with having to put him into daycare five days a week. The cost of that was £1200 (€1356) a month. After tax, I was earning about £1700 (€1921) a month,” she tells Euronews.
The latest survey carried out by the charity Pregnant The Screwed finds that childcare in the UK can consume up to a whopping 75% of parents' incomes.
In 2022 the UK became the most expensive country for childcare across the developed world, prompting thousands of people to protest in cities across the country in what became known as the “March of the Mummies” last October.
“So far the government has not done anything about the cost of inflation in the UK. It looks as though childcare costs are going to rise by at least another 10% in April," says Joeli Brearley, the founder of Pregnant Then Screwed.
"On average, it costs £14,000 a year for a childcare place and we're looking at that going up by £1,000 a year,” she tells Euronews.
One in every three parents who participated in the survey revealed that they were already relying on some form of debt to cover their childcare costs.
Amid an ongoing cost-of-living crisis that has already made basic necessities like food unaffordable in Britain, the high cost of childcare is exacerbating socio-economic inequalities and impacting women disproportionately, forcing them to reduce their number of hours or to leave the workforce altogether.
And an estimated 1.7 million women in the UK are working less hours than they would otherwise due to unaffordable childcare, according to the Centre for Progressive Policy.
How do childcare costs compare across Europe?
Across EU countries, up to 90% of children aged three to five, and one-third of children under the age of three attend formal childcare centers. However, the costs of childcare vary wildly across the continent.
Childcare costs range from less than 5% in Germany and Austria, where parents living in the capitals even benefit from free public childcare, to almost 52% of median female earnings in the United Kingdom, according to data from the OECD.
In most European countries, parents can benefit from highly-subsidised childcare which reduces the financial burden on parents.
In the Netherlands, for example, where the market is dominated by private providers, the cost could go as high as 80% of median female earnings. However, after childcare benefits provided for by the government, low-earning parents in the Netherlands end up paying only 5%. In fact, the Dutch government is planning a scheme that would cover 95% of childcare expenses for all working parents by 2025.
UK at one end of the spectrum
In the UK, however, this isn’t the case despite the government investing £4 billion (€4.52 billion) into childcare each year for the past five years, through eight different support schemes.
“The types of support that are available really don't meet the needs of families anymore,” says Sarah Ronan from the Women’s Budget Group.
This could partly explain why an estimated one million eligible families in the UK have not taken up their right to tax-free childcare which pays £2000 (€2260) annually.
“The government's very good at talking about these benefits. The actual administration of them and the accessibility of them is dire,” says Pregnant then Screwed's Joeli Brearley.
Disadvantaged families in the UK can also apply for the Universal Credit Childcare which pays up to 85% of child care expenses for low-income families who earn £16,000 (€18,080) or less annually, but the money is paid back in arrears.
“If you don’t have the money to begin with, where can you find it? It’s not like it’s in the back of a couch?” says Ronan.
“And because of this, you end up in a situation where you've got only 13% of people that take up that offer of support, and of that 13%, 81% are single mothers.”
Germany's Kita network still has its flaws
On the other end of the spectrum are countries like Germany where the average annual cost of childcare is only €1310.
Since 2013, children older than 12-months are legally entitled to a spot in daycare centers called Kitas through their local municipality. Kitas typically charge €70 to €150 per month, but the cost is then subsidised by the state.
Clara Gruitrooy, a businesswoman and a mother of two, says she feels lucky because before she was living in Hamburg, but now she's based in Berlin where childcare is free.
Gruitrooy heads the Berlin branch of Working Moms, a German association where likeminded mothers in leadership positions can offer support to each other on how to balance motherhood with work.
“If I could not have afforded childcare, I don’t know how I could’ve gotten to where I am today”, she tells Euronews.
However, while the childcare model in Germany is enviable for countries like the UK, it is far from perfect.
In many places in Germany, Kitas are understaffed with long waiting lines, especially for children under three. In a survey done by the German Youth Institute in 2020, 49% of parents with children under three reported they needed a Kita but only 24% were able to secure the number of hours they needed.
“In Germany, it's not a question of price, fortunately, luckily, but it's also a question of finding a place,” says Gruitrooy who struggled to find a place for her daughters before they turned one at a time when she was setting up her own business.
Since her entrepreneurial career made it possible to work remotely, she managed to make it work until she could place her daughters in a Kita.
“If you have acquired the freedom to have free childcare, you don’t question this anymore,” says Gruitrooy.
“Now the debate is about quality, about equality, and about service.” | United Kingdom Business & Economics |
Tony Blair: former PM calls for tax on junk food to tackle obesity
Tony Blair has urged ministers to tax junk food and impose tougher regulations on the food industry to tackle the obesity crisis.
Speaking to The Times Health Commission, he compared the need for intervention over poor diets to the smoking ban, which he introduced as prime minister in 2007.
Blair said that preventative measures to help people take responsibility for their health and lose weight were essential to creating a sustainable future for the NHS.
“We’ve got to shift from a service that’s treating people when they’re ill to a service that is focused on well-being, on prevention, on how people live more healthy lives,” he said.
“You can’t run a modern healthcare system where people are going live much longer unless they take some responsibility. You’ve got to help them do that.
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“The way of helping them do that, particularly with poor families, is to create the circumstances in which [they can choose healthier food].”
The government has recently delayed a series of policies to tackle junk food, including a ban on advertising before 9pm, and a ban on “buy one, get one free” deals.
Two thirds of British adults are obese or overweight, and obesity costs the NHS about £6.5 billion a year, and is the second biggest cause of cancer.
Blair said he would expand the sugar tax, introduced in 2018, and introduce other taxes on foods high in fat, salt and sugar, as well as regulating the food industry through measures such as advertising restrictions.
He said: “Diet is really important. You’re also doing no favours to young people [by not taking action]. If their diet is poor, their health is going to be poor, their lives are going to be poorer. You’ve got to grip these decisions. You’ve just got to take the decision and just get on with it and drive it through.”
Blair said concerns over the “nanny state” were a “minority view”, comparing the current debate over anti-obesity policies to the debate over the ban on smoking in public places, which has been widely judged to be a success.
He said: “Smoking was a big, big moment for us. I was a bit worried because people whose political judgement I respected were saying — the working class will walk away from you completely.”
The former prime minister, who now runs the Tony Blair Institute think tank, was speaking to the The Times Health Commission, a year-long inquiry set up to consider the future of health and social care in England.
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Blair said the NHS must do more to embrace technology, including giving every patient a digital passport with their medical records, which can be shared between all NHS hospitals and GP surgeries.
He said: “You need absolutely top quality national health data infrastructure. All patients should have a personal health account, or electronic health record, whatever you want to call it.”
Blair said that concerns about privacy were overblown, adding that most people already gave personal information to firms such as Amazon and Netflix, and the anonymised data helped boost medical research.
“The [health] data is a massive national asset,” he said. “That data allows us to develop a life science industry that is already up there with the best, and could be world beating. So it’s got enormous economic implications as well for the country.”
Blair said that harnessing the “immensely exciting” advances in medical science and technology could help reduce the cost of the NHS. “We should be able to deliver a healthcare system that is both better and more cost-effective than the one we’ve got at the moment.” | Consumer & Retail |
Foot Locker’s stock plunged by nearly a third after the sneaker retailer reported dismal earnings in the second quarter that it blamed on “ongoing consumer softness.”
In the latest quarter, Foot Locker’s sales fell 9.9% to $1.8 million — a sharp drop from the $2.1 million a year earlier, the company said in its earnings report Wednesday
Foot Locker’s share price tumbled as much as 32.8%, to $15.60 in premarket trades.
The New York-based retailer, which has nearly 900 outposts across the US, slashed its yearly forecast due to “the still-tough consumer backdrop,” and now expects sales to decline 8% to 9% for the year. It originally predicted sales would be down 6.5% to 8%.
“We did see a softening in trends in July and are adjusting our 2023 outlook to allow us to best compete for price-sensitive consumer,” Foot Locker chief Mary Dillon said in a statement.
The footwear chain slashed its yearly earnings outlook to between $2 and $2.25 per share — down from the $3.35 to $3.65 a share it originally predicted and well below the $3.47 analysts were expecting.
A day earlier, Macy’s shares dropped after it posted declining sales in its second quarter earnings, which it attributed to declining consumer spending and increased credit card delinquencies
Macy’s net sales fell to $5.1 billion in the 13-week period ended July 29 — down from the $5.6 billion reported in the same period last year.
In-store sales at Macy’s 500-plus locations also dropped 8% and digital sales declined 10% compared with the year-ago period, sending Macy’s share price tumbling over 14%, to $12.57 on Tuesday.
Macy’s said there were particular challenges in the active, casual and sleepwear categories, while beauty products and fragrances performed better.
In addition, other revenues — such as earnings from credit interest and other non-operating revenues — decreased $84 million from the prior year period, to $150 million.
The New York City-based department-store chain attributed the losses to “credit card revenues which were negatively impacted by an increased rate of delinquencies.”
Customers paying their credit card bills on time is viewed as a proxy for consumer health, and an increased number of defaulted payments is an indicator that consumers will have to prioritize bills over shopping.
“In light of ongoing macroeconomic pressures and uncertainty on when those will abate, the company continues to take a cautious approach on the consumer,” Macy’s earnings report said.
The department store’s chairman and chief executive, Jeff Gennette, reaffirmed the retailer’s cautious outlook on consumer spending in an earnings call with investors on Tuesday, “especially at Macy’s where roughly 50% of the identified customers have an average household income of $75,000 or under,” he said.
“We have seen the Macy’s customer more aggressively pull back on spend in our discretionary categories. They are not converting as easily and becoming more intentional on the allocation of their disposable income with an ongoing shift to services and experiences,” he added.
Macy’s has been underperforming in the stock market this year. Its stock has fallen more than 37% year to date.
In yet another example of softening consumer spend, Target said its quarterly sales fell for the first time in six years.
Sales at stores and digital channels open for at least a year were off 5.4% from a year earlier, according to Target’s earnings report released last week, while digital sales slipped 10.5%.
Though Target’s longtime CEO Brian Cornell attributed part of the losses to “the impact of inflation,” CFO Michael Fiddelke added that boycotts of the retailer’s controversial “Pride” collection also contributed to the quarter’s results.
Dick’s Sporting Goods also missed analyst forecasts for the second quarter, reporting a 23% drop in profits across its more than 700 stores nationwide — despite sales rising 3.6%.
Dick’s attributed the losses to “organized retail crime and our ability to effectively manage inventory shrink,” an industry term used to describe stolen or lost merchandise. | Consumer & Retail |
Concerns over the soaring cost of the state pension – pushed up by high inflation and wage growth – have led to questions about whether it is sustainable in the long term.
Work and Pensions Secretary Mel Stride conceded the triple lock is “not sustainable” in the long term but said the Government remains committed to it in the immediate future.
Some Tory insiders believe an intervention by William Hague, the former party leader who is a close ally of Mr Sunak, may be a sign the Prime Minister is considering dropping the triple lock.
Lord Hague wrote in The Times that the policy was “ultimately unsustainable”, adding: “Possible solutions include giving several years’ notice of a change, after which pensions would still be protected by rising with prices, or an average of earnings and prices.”
One Tory election strategist told i: “It’s interesting that Hague has floated it, given how close he is to the machine.”
Labour has urged the Conservatives not to scrap their commitment to the pension increase this April but has not pledged to maintain it if elected into Government.
There have been suggestions that those on the Labour left were pushing the party’s leadership to maintain the triple lock promise after the next election – due by January 2025 at the latest – but they have faced resistance over concerns about the spiralling cost, i understands.
The triple lock, which was a Conservative Party manifesto commitment, ensures the state pension increases by whichever is highest between September’s inflation figure, the wage growth figure or 2.5 per cent.
The latest wage data, released by the Office for National Statistics (ONS), indicated the state pension could leap by 8.5 per cent, due to an increase in wages, bringing it from £10,600.20 a year to £11,502.40.
This would cost the Treasury around £2bn more than it had budgeted for.
The Department for Work and Pensions (DWP) said on Tuesday the Government is committed to the triple lock and, as usual, a statutory annual review of benefits and state pensions will take place in the autumn.
But speaking on the BBC’s World at One, Mr Stride said the debate as to whether the cost of the state pension was rising too quickly had “been around for a long time”.
“We have known for a long time, that in the very, very long term, you’re absolutely right, it is not sustainable. But of course, what I’m dealing with is now and where we stand at the moment, is we remain committed to the triple lock,” he said.
“And that’s the path that we will be taking. But as to the future, and after future general elections, and so on and so forth, who knows. But that’s the position we’re in at present.”
Labour, meanwhile, challenged the Conservatives to keep the triple lock in place this coming year, while refusing to say whether they would do the same in subsequent reviews.
Deputy Leader Angela Rayner refused to commit her party to the policy, telling the BBC: “We will have to see where we are when we get to a general election and we see the finances.”
A party spokesperson said: “The Conservative Party promised to maintain the triple lock at the last election and we have urged the Government to stick to that commitment.
“As Angela said, all future spending commitments for after the election will be laid out in our manifesto when we know the state of the public finances, as is usual practice.”
The commitment to the triple lock was a topic of debate at the party’s national policy forum in July, with a push for the party to commit to maintaining the triple lock for the whole of the next Parliament.
But then Shadow Work and Pensions Secretary Jonathan Ashworth was unwilling to make the commitment without the same promise from the Conservatives.
Jonathan Cribb, associate director at the Institute for Fiscal Studies, said: “Since its introduction in 2010, the triple lock, together with the introduction of the new state pension, has significantly increased the generosity of the state pension relative to earnings.
“But this comes at a cost to public finances – the triple lock has added £11bn to spending on the state pension in 2023-24 relative to price or earnings indexation. Compared with the OBR’s forecast from just six months ago, today’s figures mean spending on the state pension is set to increase by another £2bn in 2024-25.”
Rishi Sunak recently declined to say whether the policy would feature in his party’s manifesto at the general election, which is expected next year.
Downing Street said it will ensure the state pension “remains sustainable and fair across generations”.
The Prime Minister’s spokesman said: “We remain committed to the triple lock and we will ensure that the state pension remains sustainable and fair across generations while providing security and dignity in retirement for millions of people across the country.” | United Kingdom Business & Economics |
A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.
Falling leaves typically coincide with falling gas prices as the summer driving season comes to a close and demand at the pump wanes. Instead, gasoline prices are getting more expensive and are just pennies away from their highest level so far this year.
That’s because aggressive oil supply cuts in Saudi Arabia and Russia and deadly flooding in Libya have sent crude prices on a tear. Oil prices hit a 10-month high on Friday and are on pace to hit their largest quarterly increase since Russia first invaded Ukraine in the beginning of 2022.
Increasing oil prices are a bad omen on Wall Street — they mean higher inflation and introduce the possibility of more economy-crushing interest rate hikes by the Federal Reserve. More pain at the pump also means less consumer spending elsewhere and a heightened possibility of recession.
There’s already a lot to fret about this autumn: Auto workers are on strike, the federal government could face another shutdown, China’s economy is still distressingly subdued and geopolitical tensions are on the rise.
Are rising oil prices another item to add to the list?
David Kelly, chief global strategist at JPMorgan Asset Management and self-declared worrywart, doesn’t think so.
Before the Bell spoke with Kelly about why Americans don’t have to fear the pump, at least right now.
This interview has been slightly edited for length and clarity.
How high do you think oil prices will go?
David Kelly: If there’s some other shock, some big storm in the Gulf of Mexico, it could spike higher. But as we look at this, we don’t think the trend over the next year or two is going to be higher oil prices.
There are a few reasons for this.
One thing we need to remember is that the price of everything has gone up, and all of the input costs of producing oil have increased. Sure we’re at $90 a barrel right now — but if you measure by today’s dollars, we actually peaked at something like $184 per barrel back in 2008. When you adjust for inflation, oil isn’t that high right now.
Another thing is that the US has whittled away its Strategic Petroleum Reserve, we’ve reduced that a lot. There was an inventory overhang we could use to try to balance the market, and it’s not as big as it was.
Going forward, US production is growing very rapidly — we’re currently producing more crude oil than either Russia or Saudi Arabia. This is going to be a record year for US liquid fuel production, and next year is going to be even stronger.
The global economy is growing slowly, and that’s going to limit demand growth for fossil fuel energy. And frankly, the green energy transition is also limiting the growth in demand.
So when I look at the supply side I think the US and other non-OPEC members will help, and when I look at the demand side, I don’t see a lot of economic growth or demand for fossil fuels. So I don’t expect economic trends to push prices much higher, although of course some shock could.
Why are oil prices so connected to recession?
Expensive oil has a very nasty triple effect of pushing up inflation and sometimes forcing a tighter monetary policy at the very time that it’s squeezing the ability of consumers to spend elsewhere.
You saw that most obviously in the 1970s … when high gasoline prices meant people had less money to spend on other stuff, and meanwhile, the Federal Reserve pushed rates up too high to fight inflation. That’s why oil caused a recession in 1974-1975 and caused double barreled recessions in 1980 and 1982. The Great Financial Crisis in 2008 was not about oil, but consumers were in a weakened position going into it because of all the money they were spending on gasoline. These are all reasons why Americans have come to fear a spike at the gas pump.
What do elevated oil prices mean for inflation and future rate hikes by the Federal Reserve?
I certainly hope the Federal Reserve doesn’t react by raising interest rates one more time. We don’t think they’re going to raise in September, and the futures market is saying there’s a 50/50 chance that they raise one more time in November.
Economists and the rest of the world talk about inflation differently: Economists talk about inflation as being the rate of change in prices, and consumers think that you’ve got inflation when prices are high. So for inflation to go away you don’t need the price of gasoline to fall, you just need it to stop rising. I think that we are going to see continued high prices for a lot of stuff, including gasoline, but I don’t think we’re gonna see an acceleration in prices.
We believe that inflation will be below the Fed’s 2% target by the fourth quarter of next year. The Fed measures inflation year-over-year, so the fact that we’re having a spike in gasoline prices right now makes it more likely that by next year price growth will be below 2%.
We’ve been on this roller coaster, but the thing about a roller coaster is that you get off where you got on, no matter how bumpy the ride was.
What should investors do in the meantime?
People should continue to look for opportunities to invest in the energy transition. The bigger point isn’t the short term price of oil, it’s the fact that the people who are controlling it — the Saudis and Russians — aren’t particularly friendly to the United States right now. Even though we are a net exporter of oil, we’re still affected by their ability to influence the market in ways that don’t help us. I think this recent oil spike only confirms the fact that we need to invest in something other than fossil fuels.
If the Federal Reserve does raise rates one more time, I think it does increase the risk of recession. So you want to make sure that you’re positioned a little bit more defensively because of the danger that higher gasoline prices tend to increase the risk of recession.
UAW strike puts the four-day workweek back in focus
When the United Auto Workers called a strike last week against General Motors, Ford and Stellantis, one of their demands focused on an idea circulating on the periphery of labor reform circles.
In addition to calling for a 36% pay raise and increased job security, union members want a 32-hour, four-day workweek with no pay cuts, reports my colleague Eva Rothenberg.
Proposals to shorten the workweek have gained traction in recent years, with the flexibility of pandemic-era remote work fueling many of these calls. The accelerating use of artificial intelligence in the workplace has also pushed some workers to question the necessity of a 40-hour week.
Sen. Bernie Sanders has long been a vocal proponent of a shortened workweek.
“We are looking at an explosion in this country of artificial intelligence and robotics. And that means that the average worker is going to be much more productive,” the Vermont Independent told CNN’s Jake Tapper on Sunday. “The question as a nation that we have to ask ourselves is: Who is going to benefit from this productivity? We should begin a serious discussion — and the UAW is doing that — about substantially lowering the workweek.”
Get ready for a spike in marriage proposals
The pandemic dented sales of engagement rings as relationships faltered — or never even blossomed in the first place — as people stayed inside or avoided socializing outside of the immediate family says Signet Jewelers, the largest jewelry company in the United States.
This trend then created an “engagement gap” since couples get engaged, on average, about 3.25 years after they begin dating, according to Signet’s proprietary data.
But with the return of many pre-pandemic lifestyles, including dating, Signet (owner of Zales, Jared, Kay Jewelers, Blue Nile and Diamonds Direct) said the lull in proposals is expected to bottom out this year. That means engagements will likely rebound starting in early 2024, reports my colleague Parija Kavilanz.
About 2.8 million couples, on average, get engaged every year in the United States, said Signet CEO Virginia Drosos during a company presentation at the Goldman Sachs Global Retailing Conference on Wednesday. Last year, the number slipped to 2.5 million. She said it will continue to head lower to level out at 2.1 to 2.2 million in 2023 before climbing back up and fully rebounding over the next three years.
In 2024, Signet expects engagements will reach 2.4 to 2.5 million. That rebound is crucial to the company since bridal jewelry accounts for 50% of its overall merchandise sales. | Energy & Natural Resources |
Image © Bank of England
Commerzbank, a leading financial institution, has warned in a mid-year update that Pound Sterling is poised for a prolonged and significant decline against both the Euro and the Dollar.
Although analysts at the Frankfurt-based bank failed to predict the Pound's outperformance in 2023 (see below) they remain staunch bears on the UK and its currency, particularly in the wake of the Bank of England's (BoE) recent interest rate hike, which failed to bolster the currency.
In a midyear forecast update, Commerzbank says the Pound is likely to fall below 1.20 GBP/USD and 1.11 GBP/EUR as the Bank of England is expected to face continued credibility issues in its fight against inflation.
In May, consumer price inflation in the UK remained unchanged at 8.7%, defying expectations for a more pronounced drop with core inflation surging from 6.8% to 7.1%, indicating persistent price pressures.
"The shock of the inflation data must have hit hard and there is likely to be growing scepticism about whether the BoE has done enough so far and will be able to get inflation under control," says You-Na Park-Heger, FX Analyst at Commerzbank.
The Bank of England responded to this inflation surprise by implementing a 50 basis points hike, raising the interest rates to 5%. Surprisingly, says Park-Heger, the Pound did not benefit significantly from this decision, leading to mounting doubts about the central bank's efficacy in addressing inflation concerns.
Indeed, UK two-year bond yields have advanced to levels not seen since 2008 but the Pound to Euro exchange rate is set to record a second consecutive weekly decline. Meanwhile, the Pound to Dollar exchange rate also ended the week of the Bank's interest rate decision with a loss and looks set to follow suit with a second consecutive weekly decline.
At a bare minimum, the Pound is struggling to reboot its recent trends of strength despite the Bank's bigger-than-expected hike.
You-Na Park-Heger says the market's reaction to the Bank's rate decision is that it was not "convincing."
Moreover, the BoE's forward guidance did not provide a clear trajectory for interest rates. The central bank maintained a cautious stance, leaving the rate outlook open-ended.
Park-Heger notes, "the fact that the BoE explicitly refers to the fact that 'at this meeting, the Committee voted to increase Bank Rate by 0.5 percentage points, to 5%' suggests that the same might not apply at the next meeting."
This ambiguity casts doubt on the central bank's commitment to combating inflation through proactive monetary policy measures.
Commerzbank's analysis emphasises the perception of a central bank that has been slow to react and has taken smaller rate steps too early.
Park-Heger remarks, "the BoE seems to be chasing inflation developments rather than fighting them with an active monetary policy, which is damaging for Sterling."
The cautious approach adopted by the BoE is likely to weigh on the Pound's performance, particularly in relation to the Euro.
Commerzbank forecasts the EUR-GBP exchange rate will surpass 0.90 in the coming quarters.
Furthermore, Commerzbank anticipates that the BoE will eventually reverse its tightening cycle and begin cutting interest rates next year, a move that could further undermine the Pound's strength.
In contrast, the European Central Bank (ECB) is expected to maintain its key rate, displaying a relatively more hawkish stance compared to market expectations. This divergence in monetary policy is likely to support the Euro, exacerbating the challenges facing the Pound.
Commerzbank's forecast profile for the Euro-Pound sees 0.90 by the end of September, 0.91 by year-end, 0.91 by the end of March 2024 and 0.92 by the end of June 2024. By year-end 2024 a forecast of 0.93 is pencilled in. This gives a Pound to Euro profile of 1.11, 1.10, 1.10 and 1.09 and 1.08.
For the Pound to Dollar rate, the forecast profile held at Commerzbank is 1.24, 1.25, 1.23 and 1.20 for the aforementioned points in time, with weakness extending to 1.18 by September 2024 and 1.16 by end-2024.
Looking at Commerzbank's track record reveals back in January analysts had forecast the Pound-Dollar exchange rate would be at 1.18 by June 2023, whereas spot is now closer to 1.28 as month-end approaches. For Euro-Pound the January forecast was for 0.90 by June (1.11 GBPEUR), whereas spot is currently at 0.86 (1.1620). | Forex Trading & Speculation |
Shortages of fruit and vegetables on shelves are being part-blamed on ‘just in time’ supply chains at supermarkets.
Stores hold limited stock of most food, particularly fresh produce, to keep down costs and cut waste.
Now, with flooding, snow and cold weather in Morocco and Spain hitting supplies to Britain, there is no slack in the chain.
A major supermarket executive said: ‘Supply chains are run as “just in time”. To stop it spoiling, we get produce just in time for it to go on shelves and be sold. Any hiccup and shelves look empty.’
Cold weather and even snow in southern Europe and north Africa have hit harvests of tomatoes, lettuce, peppers and cucumbers. A quarter of all tomatoes in Britain come from Morocco.
British farmers would normally grow some tomatoes, peppers, cucumbers and lettuce in heated greenhouses at this time of year.
But National Farmers Union president Minette Batters said energy is too expensive for many to do that now.
She said UK growers don’t get the same help as other businesses, so greenhouses are uneconomical and at the lowest levels of production since records began.
Extra paperwork and subsidy cuts after the UK left the EU are also factors.
Turnips sold out in stores this week after Environment Secretary Therese Coffey suggested families eat them instead of tomatoes.
But supermarkets said they stock very few turnips, compared to more ‘fashionable food’, so if there is a run on them, they soon go. | United Kingdom Business & Economics |
Business NewsIndia Becoming Favoured Destination For FDI In Infrastructure Sector: Financial Services Secretary
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India Becoming Favoured Destination For FDI In Infrastructure Sector: Financial Services Secretary
The event, organised by IIFCL on Oct. 30, saw participation of investors and other stakeholders from India and the U.K. They also discussed potential avenues of investment in India's rapidly growing infrastructure sector.
Financial Services Secretary Vivek Joshi has said that India is becoming a favoured destination for Foreign Direct Investment (FDI) in the infrastructure sector as government has taken many supportive measures.
Financial Services Secretary Vivek Joshi has said that India is becoming a favoured destination for Foreign Direct Investment (FDI) in the infrastructure sector as government has taken many supportive measures.
Speaking at an event organised by the India Infrastructure Finance Company Ltd (IIFCL) in London, Joshi said flagship initiatives like the National Infrastructure Pipeline, Gati Shakti, Sagarmala, Bharatmala, UDAN and Maritime India Vision 2030, among others, have created a lot of opportunities in the infrastructure sector.
The event, organised by IIFCL on Oct. 30, saw participation of investors and other stakeholders from India and the U.K. They also discussed potential avenues of investment in India's rapidly growing infrastructure sector.
IIFCL Managing Director P R Jaishankar said the company is driving the government' goals for a robust all-round infrastructure development in the country covering all sub-sectors, including road, railways, energy (including renewable energy), ports and airports.
He also talked about how various innovative products of IIFCL such as credit enhancement, takeout finance, InvITs (Infrastructure Investment Trusts) and project bonds have proven to be a game changer for the sector, according to a release issued on Thursday. | India Business & Economics |
- FTX founder Sam Bankman-Fried resumed his testimony on Monday as his criminal trial nears its end.
- In his first day on the stand on Friday, Bankman-Fried told jurors that he didn’t commit fraud, and that he thought the crypto exchange’s outside expenditures came out of company profits.
- Bankman-Fried, who pleaded not guilty to fraud charges, spent much of his second day on the stand blaming his former top lieutenants for his crypto empire's demise.
FTX founder Sam Bankman-Fried resumed his testimony on Monday, and used his time on the stand to blame his former close friends and colleagues for the downfall of his crypto empire.
As his criminal fraud trial enters what's expected to be its last week, Bankman-Fried is trying to undermine the prosecution's key witnesses, who placed the FTX founder at the center of the crypto exchange's misuse of customer funds and its ultimate demise.
Bankman-Fried, 31, faces a potential life sentence if convicted of fraud charges stemming from the collapse in November of FTX and sister hedge fund Alameda Research. He has pleaded not guilty.
On Monday, Mark Cohen, Bankman-Fried's lead defense attorney, allowed his client to take aim at Caroline Ellison, who ran Alameda and is also Bankman-Fried's ex-girlfriend. The primary theme was Bankman-Fried's concern, expressed in conversations between June and September 2022, about whether Alameda was properly hedged given the crash in crypto prices. He said he was notably concerned about the decline in Alameda's net asset value from $40 billion the prior year to $10 billion.
The market had already dropped 70% and if it fell another 50%, he was afraid the firm would be insolvent, Bankman-Fried told the jury.
"She started crying," Bankman-Fried said, regarding Ellison's reaction when he told her that. "She agreed."
Ellison, who took a plea deal and is cooperating with the government, also said Alameda shouldn't have made some venture investments, Bankman-Fried testified. He said she offered to step down and said he told her that this wasn't about blame or past failures, but that Alameda should urgently be putting on hedges. He said he hadn't intended for her to resign.
In September, he checked in again with Ellison about the hedging activity, Bankman-Fried testified. She said Alameda had hedged. He asked about the scale of the trades and said his instinct was that they could have been twice the size. After Ellison sent him spreadsheets about the trades, she agreed there was more room to hedge and she did so, Bankman-Fried said.
Bankman-Fried's testimony on Monday follows his initial appearance on the stand at the end of last week. He told jurors then that he didn't commit fraud, and that he thought the crypto exchange's outside expenditures, like paying for the naming rights at a sports arena and its venture investments, came out of company profits.
The majority of the four-week trial so far has been highlighted by prosecutors walking former leaders of Bankman-Fried's businesses through specific actions taken by their boss that resulted in clients losing billions of dollars last year. Several of the witnesses have pleaded guilty to multiple charges and are cooperating with the government.
As questioning continued on Monday, Bankman-Fried said his analysis suggested that net asset value at Alameda was still $10 billion.
The defense then walked Bankman-Fried through activities from Nov. 1 to Nov. 11, covering the period of FTX's rapid collapse and its immediate aftermath.
Bankman-Fried said Gary Wang, a co-founder who previously testified on behalf of the prosecution, told him that the backlog of withdrawal demands had to do with a backlog of bitcoin withdrawals and that he was making a fix in the code.
FTX's engineering director Nishad Singh, who was also called as a government witness, had a problematic personal financial situation, Bankman-Fried testified. He said Singh was suicidal and had a therapist on call 24/7 to watch over him. Bankman-Fried said he was trying to comfort him about his loans and expenses and to prevent him from hurting himself.
Bankman-Fried then blamed Can Sun, who was FTX's general counsel. He said they had a talk before Bankman-Fried's follow-up call with investment fund Apollo. The spreadsheet provided to Apollo did have the $8 billion liability included, Bankman-Fried said. He told the court that he spoke with Sun and told Apollo about his best understanding of the framework around the fiat account.
In describing the swift downfall of FTX, Bankman-Fried said that customer withdrawals had quickly increased from $50 million a day to $1 billion a day. He said it was like a run on the bank and he was very concerned since the only way to withdraw all customer funds was to liquidate every open margin trade.
Bankman-Fried defended his tweets that were designed to cool customer concerns.
Regarding the "assets are fine" tweet he wrote during the panic, he said he thought Alameda's net asset value was roughly $10 billion and that FTX didn't have a hole in its balance sheet.
"My view was the exchange was OK and there was no holes in the assets," he told the court.
On Nov. 8, he realized that Alameda was going to need to be shut down. He had calls with potential investors to try and secure "significant" outside capital due to the run on FTX.
As the defense wraps up its questioning of Bankman-Fried, the focus will turn back to the prosecution. Renato Mariotti, a former prosecutor in the U.S. Justice Department's Securities & Commodities Fraud Section and now a trial partner in Chicago with Bryan Cave Leighton Paisner, said he expects the cross-examination to be "devastating given SBF's frequent prior statements about the issues in the case."
"What we've heard so far has been the direct examination — the defense telling its story," Mariotti told CNBC. "There were no big twists or shockers. The defense doesn't appear to have an ace up its sleeve."
If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor.
— CNBC's Dawn Giel contributed to this report | Crypto Trading & Speculation |
My Personal Oil Price Shock — Olive Oil, That Is
(Bloomberg Opinion) -- Oil crises have occupied plenty of time during my career covering commodities. But today I’m discussing another oil crisis afflicting just about every household in southern Europe: olive oil.Let's start here: the price of olive oil has surged to an all-time high, double a year ago. A metric ton of olive oil now costs more than 10 times a metric ton of crude. In 2019, before the pandemic, the ratio was less than five times.For me, the price shock is personal. Born and raised in Spain, I love olive oil; I consume too many liters a year. Back home for the summer break, the stratospheric cost of the golden liquid is a constant topic of dinner table conversation, best summarized by my own mother: “It’s out of control.” With myself and my sister visiting for holiday, I fear my father would put the kitchen’s oil dispenser under lock and key. How bad is it? Last week, the benchmark wholesale price of extra virgin olive oil surged to an all-time high of $8,500 per metric ton, about 125% higher than the 2000-2020 average. The previous record was set in 1996 at a little over $6,200 a ton.
In southern Europe and the Levant, olive oil is as much culture as food, a way of life around shared customs on the shores of the Mediterranean Sea. For many families in the region, its price has come to symbolize the struggle against rampant inflation.Unfortunately for me, I’m my family’s in-house commodity expert, required — and that’s the right word — to provide supply, demand and price forecasts over the kitchen table. A lot is a stake, as my father would rush into the supermarket and stockpile on my recommendation. A blown call would certainly be reflected in my next Christmas present. Right now, thankfully, my standing is high: A few months ago, I called the bull market just right. But what comes next is what really worries me. The supply outlook is “critical,” says Oil World, the industry bible that has tracked the ups and downs of the market for the last 65 years. “Demand rationing is inevitable.”At my hometown’s local supermarket, the cashier shakes his head in disbelief. “We’ve to change the prices every week,” he says — “and it’s always higher.” The most popular brand in Spain retails now for 9.99 euros ($11), more than double a year ago and about three times what many would call normal. The 10 euros-per-liter mark is a psychological price barrier for my compatriots, akin to US drivers facing $5 per gallon gasoline prices last year.For Spaniards, this is a real crisis. We generously coat our food in olive oil. And I mean properly coating it; anyone here would roll their eyes at those American-style spray bottles. The average Spaniard consumes about eight liters per year; Italians, Greeks and Portuguese do as much, if not even more. Multiply that for a family of four, and a household in Spain would spend more than 300 euros in a year, at current prices.
For the rest of the world, however, the shock is more of a curiosity. Beloved as it is in southern Europe, olive oil accounts for a tiny fraction of global edible-oil consumption. In 2020, it represented less than 2% of the global market, on par with cottonseed and coconut oil. Palm oil and soybean oil together account for 65% of the market; sunflower and rapeseed oil represent another 24% combined.Spain’s southern region of Andalusia, the Saudi Arabia of olive oil, accounting for about one-third of the global supply, is the epicenter of the crisis. The Phoenicians introduced the olive tree millennia ago there, and then Romans turned the region into a plantation. Today, Spain devotes an area roughly the size of Massachusetts to growing olive trees and produces about half of the world’s output.Spain — Andalusia in particular — has been facing a drought for the last two years, likely exacerbated by climate change. In the current 2022-23 crop year, production plunged to about 663,000 metric tons, down 56% from the 2021-22 level. The collapse, coupled with low production in Italy, where a is killing olive trees, dragged global output to 2.62 million tons, down nearly a quarter from the previous year. As demand has risen, global inventories have plunged, with the stocks-to-use ratio falling to 12.1%, the second-lowest level in more than 50 years.
With Spanish and Italian facing crop failures, the pressure is elsewhere. Turkey, one of the few countries that enjoyed a good crop in 2022-23, has banned exports in an effort to bring domestic prices down.The dwindling inventories wouldn’t be a huge problem if the 2023-24 harvest looked promising. But production in Spain may reach just 737,000 tons in 2023-24, a tiny recovery from the previous season and about half the normal size, according to the country’s main farming cooperative group. Italian and Greek producers don’t expect much improvement either. The problem remains the weather.Spanish olive trees faced an unusually warm spring, just when they flower and the fruit is set. In Jaen, the capital of the industry in Andalusia, the temperature in April was 4C higher than normal. In nearby Cordoba, another key growing town, the thermometers reached 30C (86F) every day for two weeks in April – the earliest-ever heat wave. Since then, the weather hasn’t given the trees any breathing room. In southern Spain, it has been dry and hot for months, a situation only comparable with the drought in the early 1980s, when olive oil production also tumbled.But the problem is now much worse than 40 years ago because since then global demand has nearly doubled. With the Mediterranean diet gaining popularity around the world, olive oil consumption has increase to an average of nearly 3 million tons over the last five years, up from 1.64 million tons on average from 1980 to 1985.With stocks already at critically low levels, another crop failure in Spain, let alone in Italy and Greece, would require unprecedented demand destruction. That means much higher prices. In the market, the buzz is whether wholesale prices could surge to as high as $10,000 per ton, a level no one thought possible only a few months ago. Hoarding, as my family did a few months ago, would only make the situation worse. But the alternatives look grim: Maybe I’ll have to start buying Greek or Portuguese olive oil, even if that feels like burning my national flag. Perhaps sunflower or rapeseed oil in a true emergency. My only hope is that things don’t get so bad I’ll have to consider butter.
More From Bloomberg Opinion:
- Spain's Heatflation Will Burn Our Wallets: Lara Williams
- Warnings From Medieval Times About Climate Change: F.D. Flam
- Mother Nature Is Coming for Your Cabernet: Timothy L. O'Brien
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Javier Blas is a Bloomberg Opinion columnist covering energy and commodities. A former reporter for Bloomberg News and commodities editor at the Financial Times, he is coauthor of “The World for Sale: Money, Power and the Traders Who Barter the Earth’s Resources.”
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Inflation |
Smallcap World Fund, Fidelity Global Investment Buy 3.25% Stake In Home First Finance
Smallcap World Fund bought 23.95 lakh share, 0.54% stake, for Rs 870.5 apiece
Smallcap World Fund and Fidelity Global Investment Fund Asia Pacific Equity Fund bought over a 3.25% stake in Home First Finance Company India Ltd. for over 249 crore.
Smallcap World Fund bought 23.95 lakh shares, a 0.54% stake, for Rs 870.5 apiece.
Fidelity Global Investment Fund Asia Pacific Equity Fund bought 4.76 lakh shares, a 2.71% stake, at Rs 870 apiece, according to the data available on BSE.
True North Fund V LLP,Orange Clove Investments B.V., Aether Mauritius Ltd., True North Fund V LLP, Orange Clove Investments BV, and Aether Mauritius Ltd. sold over 9.8% stake in Home First Finance Company India.
Shares of JSW Steel closed 0.92% higher at Rs 775.57 apiece on the NSE before the announcement, compared with a 0.05% decline in the benchmark Nifty 50. | India Business & Economics |
Rishi Sunak is under pressure from ministers to increase housing benefit amid record numbers of people in temporary housing, the BBC has learned.
Housing Secretary Michael Gove and Work and Pensions Secretary Mel Stride have written to the prime minister and the chancellor demanding an increase in Local Housing Allowance rates.
But the Treasury instead prefers higher universal credit for those in work.
A final announcement is likely in the Autumn Statement later in November.
The number of people in England living in temporary accommodation is at record levels as the cost of living crisis puts market rents out of reach for many households.
The latest government figures, for the three months to June, show 104,510 households were in temporary accommodation, including 131,370 children.
Experts say a major contributory factor is that while rents have soared in recent years, local housing allowance rates, which determine housing benefit levels, have been frozen since 2020.
In June, analysis by the Institute for Fiscal Studies think-tank found just 5% of new private rental properties advertised on Zoopla were covered by local housing allowance rates, the lowest level on record. Official figures show almost two in five private sector tenants receive housing benefit.
More than 150 councils in England wrote to the government last month urging ministers to increase Local Housing Allowance rates to cover at least 30% of local market rates.
Hastings Borough Council fears bankruptcy because of the cost of housing people in temporary accommodation.
Treasury resistance
The BBC understands, however, that the Treasury is resistant to these calls and is instead examining increasing universal credit levels for people in work.
Officials have drafted proposals to cut the "taper rate" - the proportion of earnings people can keep before their benefit payment is cut. The taper rate is currently 55%, meaning that for every pound someone earns above their personal work allowance, their universal credit payment is reduced by 55p.
Changes at the edges of universal credit would not help families who are homeless and do not work, according to the Joseph Rowntree Foundation (JRF) anti-poverty group.
"Reducing the universal credit taper rate is no substitute for addressing a lack of adequacy in the benefits system as a whole," said JRF Chief Economist Alfie Stirling.
"All benefits must increase in line with the higher costs people are facing if the government is serious about helping the worst off," Mr Stirling added.
In a statement, a Treasury official said: "We do not comment on speculation.
"We've maintained our boost of nearly £1bn to Local Housing Allowance, while our Discretionary Housing payments provide a safety net for anyone struggling to meet their rent or housing costs." | Real Estate & Housing |
A single mum who relies on a local food bank to help feed her daughter has told how a spike in demand has led to supplies running out.
Alison Trevellion, 57, from Aylesham, Kent, is petitioning for more support from the Government amid the cost of living crisis as thousands struggle to survive.
The mum-of-one told how she "working really hard to make ends meet" but it is immensely difficult with energy bills and groceries shooting up overnight.
Alison, who works part-time as a care worker, has recently found herself visiting community hub BeChange every Friday to collect a box of surplus food from supermarkets that would otherwise go to waste.
But the centre has been struggling to meet skyrocketing demands and supplies often run out - prompting people to queue outside in order to secure food, and the foodbank to take action.
"I do try to get there early as it saves me around £20 a week. It's got so busy now that staff have to put boxes together to make sure there's some saved for everyone," Alison told the Mirror.
"FareShare used to receive funding but it has since been axed and now the Government say it's not their job to help. Unfortunately when I went last week there was no FareShare delivery at all."
Alison, who relies on the delivery to make a "decent meal" for her 14-year-old daughter Gracie says she "couldn't survive without BeChange".
"I go to bed at night and worry about things that lie ahead. I hope and pray that my car won't break down," Alison said.
"My food bill is around £90 a week now and a few weeks ago it was £60. I always buy supermarket-own brands and we never eat out.
"Our energy bills have gone up a lot. I can't afford to put the heating on but I've got a young daughter and she needs to stay warm. At night, we have hot water bottles in bed.
"It used to be tight but now there's never any extra money. We haven't been on holiday in three years and the last one was at a friend's caravan.
"I can't take Gracie bowling or go to the cinema and I'm not in the position to buy her branded trainers or a new phone like her friends.
"It's hard for her but I think she realises how expensive everything is now when we go on the food shop."
Alison earns around £700 a month and spends £300 on gas, electricity and council tax. She has help from Universal Credit to pay her £780 rent in a housing association.
"I started the petition so the Government would see that us normal people are really struggling and it's only going to get worse," Alison said.
"I'd love to swap places with the Prime Minister for a week so he'd know what it feels like to ask yourself, 'What are we going to eat for dinner tonight? How will I afford that big bill?"
Alison has "no shame in asking for help" and urges other people struggling to afford to live to reach out too.
BeChange manager Angela Angela Doggett told the Mirror: "Our Deal Area food bank doesn't run out but FareShare on Fridays often does. Getting there early has become a bit of an issue.
"We have around 30 people queuing for it. To try and make things fair and allow time for parents who do the school run, we now open at 9:30am.
"Some people were taking everything and clearing the tables so now we limit it. We get about 11 crates a week and pre-covid we'd never have got rid of it - now it's gone almost immediately.
"We have a community fridge that stocks FareShare foods like yoghurt and cheese. If we advertise it, it always goes within a few hours."
BeChange also runs cooking courses, first aid classes and has a pay-what-you-can-afford lunch on Fridays.
"Almost everyone we talk to is struggling with their mental wellbeing. The average person who is on a low or middle income worries about how they'll cope in the future," Angela said.
"It would be helpful if the Government recognised the work that small charities like us do.
"BeChange isn't commissioned by the Government and our funding comes from grants that we've applied for or fundraising.
"Our biggest worry is always that we won't be able to keep our doors open. We've had situations where we've nearly closed but thankfully we're not near that at the moment.
"We're here for everyone and no one should ever struggle alone."
Do you rely on a food bank to feed your family? Get in touch at [email protected]. | Inflation |
Ukraine has completed more onshore wind turbines than England since it was occupied by Russian soldiers – despite the UK government’s promise to relax restrictions on onshore windfarms.
Only two onshore wind turbines have been installed in England since Russia invaded Ukraine in February last year, generating 1 megawatt (MW) of electricity in the Staffordshire village of Keele.
Ukraine’s Tyligulska wind power plant, meanwhile, the first to be built in a conflict zone, has begun generating enough clean electricity to power about 200,000 homes just 60 miles from the frontline in the southern region of Mykolaiv, with 19 turbines providing an installed capacity of 114MW.
Ed Miliband, the shadow climate change secretary, said: “This extraordinary revelation is a terrible indictment of Rishi Sunak and his staggering failure to end the onshore wind ban.
“Even governments fighting for their very survival can get on and build the clean energy infrastructure needed to tackle the cost of living crisis, the energy security crisis, and the climate crisis with more urgency than the Tories can muster.”
No 10 promised last year to dismantle an effective ban on onshore windfarms in England, which was put in place in 2015 by tightening planning restrictions in the national planning policy framework. However, the government is yet to make any changes and campaigners believe a rebellion of backbench Tory MPs threatens to pile pressure on ministers to make only modest tweaks to the framework, which would continue to hold back the rollout of English windfarms.
The ban on onshore wind, which is the cheapest source of electricity, is estimated to have cost UK billpayers £800m over the past winter when millions were plunged into fuel poverty for the first time due to rising global energy market prices, according to analysts at the Energy and Climate Change Intelligence Unit (ECIU).
British households face energy bills that are expected to remain above pre-pandemic levels until the end of the decade after Russia’s invasion of Ukraine triggered a surge in global energy markets last year. Although global prices have retreated from record highs they are likely to remain far higher than usual while European countries seek alternative energy sources to help replace Russia’s gas exports.
Miliband said the Conservatives’ “absurd ban on onshore wind” had cost every family in Britain £180 and left the energy system “dependent on fossil fuel dictators like Putin”.
Sam Richards, the founder and campaign director of Britain Remade, which campaigns for green economic growth, said: “It’s simply mind-boggling that Ukraine, while it fights for its survival, has built more onshore wind capacity than England.
“The government should start by dropping its ban on new onshore windfarms in England – at the stroke of a pen unlocking the cheapest source of energy available.”
The Labour party has put forward plans to end the onshore wind ban and make Britain “a clean energy superpower” by 2030. Part of its plan includes setting up publicly owned energy company, GB Energy, to produce “cheap, clean power in Britain, for Britain”.
Ukraine’s largest private energy investor, DTEK, said its Tyligulska windfarm was on track to become the largest onshore windfarm in eastern Europe once complete.
Maxim Timchenko, DTEK’s chief executive, said the farm was “a symbol of Ukraine’s resistance to Russian attempts to freeze Ukraine into submission”, which would help to “build Ukraine back greener and cleaner and become a key partner in Europe’s energy future”.
In January, the Labour leader, Keir Starmer, told the World Economic Forum in Davos that there would be no investment in new oil and gas fields in Britain under a Labour government.
Starmer is expected to set out his energy plans next month, including a pledge to ban all new North Sea oil and gas licences, the Sunday Times reported. | Renewable Energy |
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DENVER (AP) — Despite seeing assessed home values soar by double digits, Colorado voters on Tuesday rejected a measure that would have lowered property tax bills for homeowners in return for decreasing a tax refund unique to the state that last year that provided $750 to each taxpayer.
Under the measure the the owner of a $500,000 home would have paid anywhere from $186 to $276 less in property taxes this year than they normally would, depending on local tax rates, according to estimates by legislative analysts.
READ MORE: Your quick guide to the most-watched races of Election Day 2023
In exchange, after an initial increase in the taxpayer refund for everyone this year, the refund checks would have started to decrease and possibly disappear for people of all income levels over the next decade, depending on how much revenue the state takes in, according to legislative analysts.
And renters would have gotten smaller taxpayer refunds — known as the TABOR refund, a reference to Colorado’s Taxpayers Bill of Rights — without getting any of the direct relief that homeowners do.
Proponents of Proposition HH argued it was the best way to prevent devastating property tax bill increases and that it was targeted at helping seniors and working families. Opponents, including Republican state lawmakers and conservative groups, argued the measure could ultimately cost taxpayers more than they save on property tax bills.
The owners of primary residences would have seen greater reductions than the owners of second homes and rental properties under the complicated measure. It also would have allowed senior citizens to take an existing property tax break for those 65 and older with them if they decided to downsize to another home. Currently, they only get that break if they have lived in a home for 10 years.
This year residents would have each gotten an estimated $148 more in a flat taxpayer refund, for a total of $898. But then starting in 2024 the refund would have reverted back to the traditional method of being determined by income and start to decline below even what the old rules would dictate.
People with an adjusted gross income of $52,000 or less were expected to get a $326 refund next year, $31 less than under current law under the measure. Those with an income of $289,001 were set to get checks for $1,028, $100 less.
Put on the ballot by the Democratic-led Legislature, the property tax measure would have slowed the increase of property tax bills over the next decade in two ways. Proposition HH would have lowered the statewide assessment rate that is used to calculate how much people have to pay to their local governments based on the value of their homes. It also would have exempted a portion of a home’s value from being taxed.
READ MORE: 3 new tax rules homeowners need to know
In the latest tax assessments this year, residential property values increased by between 35% and 45% in the Denver area and up to 60% in parts of the mountains. So homeowners were still set to get bigger property tax bills for this year compared to last year. The ballot measure would have just eased the increase.
Voters approved a second tax measure that will permit millions more dollars from a tobacco tax to go toward the state’s new universal preschool program.
That measure deals with taxes on cigarettes and tobacco products approved by voters in 2020. Analysts underestimated how much it would take in so, under the Taxpayer’s Bill of Rights, voters needed to be asked if the state can keep the extra $23.65 million the taxes brought in in the first year, including interest, or if it should be refunded.
Bedayn is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.
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Rising interest rates could cause 1.4 million mortgage holders see their disposable incomes fall by more than 20%, a think tank has warned.
Some 690,000 of those set to be hit hardest will be under 40, the Institute for Fiscal Studies (IFS) said.
The body said high borrowing costs was "unquestionably going to cause serious difficulty for many families".
The Bank of England, which sets interest rates, is expected to raise them again to try to tackle inflation.
Data released on Wednesday showed inflation to be unchanged at 8.7% in the year to May, solidifying expectations that the Bank of England will raise interest rates by 0.25% to 4.75%.
Inflation is the increase in the price of something over time.
The IFS, which is a politically independent economics-focused think tank, said that given inflation was at "levels not seen in decades, rising interest rates are essentially inevitable".
Its economists said many banks had increased mortgage rates again in recent weeks, in anticipation of the Bank increasing its base rate further.
That meant mortgage holders would pay on average almost £280 more each month compared to March 2022, if mortgage rates remained at around 6%. It said people aged between 30 and 39 would typically pay about £360 more.
Overall, 60% of those with a mortgage - 8.5 million adults - are set to spend more than a fifth of their incomes on mortgage payments, the IFS said.
"This is a substantial increase. In March 2022, only 36% of mortgagors were in this position. It also higher than in 2007-08," it added.
But the think tank pointed out a third of all adults aged 20 and over have a mortgage and many were on fixed rate deals, so have been shielded by rate rises, although around a quarter of such deals are due to finish by the end of this year, exposing people to higher costs.
"For some the rise will be substantially larger: almost 1.4 million - 690,000 of whom are under 40 - will see their disposable incomes fall by over 20%," the IFS said.
The Bank of England has been hiking interest rates since December 2021 in a bid to slow the rate prices are rising at. The Bank's base rate, which is used by lenders to set interest rates on mortgages, loans and credit cards, but also for savings accounts is currently 4.5%.
In theory, raising interest rates makes it more expensive for people to borrow and they have less money to spend, meaning households will buy fewer things and then price rises will ease.
But inflation has not been falling as fast as hoped, and there have been calls for the Bank to be more aggressive with interest rates.
In recent weeks, lenders have been pulling deals and putting up rates at short notice in expectation of interest rates being hiked again.
On Wednesday, the average rate on a two-year fixed deal rose to 6.15%.
Chancellor Jeremy Hunt has ruled out the government introducing major financial support to mortgage holders over fears it would "make inflation worse, not better".
But he said he would meet lenders later to ask what help they could give to households struggling.
The IFS said the UK's benefits system currently provides "relatively little support for low income mortgagors compared to what's on offer for low income renters".
It said this meant there was "not much of a safety net for those who are particularly likely to struggle with rate rises".
As well as different age groups being impacted by higher borrowing costs, the think tank said there were also differences in where people lived.
For example, it said average rises ranged from just over £150 in Northern Ireland to £390 per month in the South East and £520 in London.
It pointed out that it was not just homeowners under pressure, with renters seeing "very large increases" in recent months.
"It is likely that at least part of the increases in rents we are seeing is due to high interest rates hitting landlords' borrowing costs," the IFS said.
Data shared with the BBC has shown rent now typically accounts for 28.3% of income, compared with 27% on average for the past 10 years. A small rise in percentage terms can still have a significant effect on people's finances. | Interest Rates |
The price of bitcoin has always been a closely monitored datapoint in the world of digital currencies given that it’s pretty much the touchstone for cryptocurrencies. And this week, the cryptocurrency’s price shot above $34,500 per token, further cementing its position at the top of the pile.
At the time of publication, one bitcoin was worth around $34,800, up 23.4% on the week and 109% from $16,625 at the beginning of the year, according to CoinMarketCap. On Monday, the cryptocurrency almost reached $35,000, marking its highest price since May 2022, when the Terra/LUNA collapse led to a sharp decline in the value of most digital tokens.
Bitcoin’s price had been rising “very smoothly for eight weeks, suggesting an accumulation phase, and early last week, it fired off several important bull market transition signals at once,” Alex Kuptsikevich, the FxPro senior market analyst, told TechCrunch+. “These signals provided an opportunity to break through the 50-day moving average… These bullish victories attract a wide range of investors and traders to focus on these signals.”
Not everyone is cheering these gains, though. The recent run has been the “perfect storm” for market participants who have been shorting bitcoin, John Glover, chief investment officer at Ledn, said.
What is driving the hike?
The primary driver of this week’s price moves has been the anticipation and “high likelihood of the approval” of a bitcoin spot exchange-traded fund (ETF), according to Michael Silberberg, head of investor relations at Alt Tab Capital.
There has been ample market speculation around a possible bitcoin spot ETF and the potential such a fund holds for unlocking new demand for bitcoin itself. More demand could lead to rising prices since the supply of bitcoin is limited, and some traders may be working to get ahead of any future value gains.
Many traditional financial players aren’t allowed to trade spot market cryptocurrencies yet, due to regulation and compliance matters. So, they do it through other regulated products like bitcoin futures.
There is a belief that a bitcoin spot ETF will allow for much pent-up institutional interest to flow in through these ETFs, Bradley Duke, chief strategy officer at crypto ETP provider ETC Group, said. “This will put upward pressure on the price of bitcoin.”
Still, the road to a bitcoin spot ETF has been bumpy. Last week, a false report surfaced of BlackRock’s ETF application being approved, which caused a slight pump in the value of bitcoin. | Crypto Trading & Speculation |
Stunning numbers out today. Investors will buy the securities, plus those the Fed steps away from. But… Crystal ball sees rising longer-term yields.
By Wolf Richter for WOLF STREET.
To set the scene for what’s to come in a moment: The total US national debt spiked by $1.19 trillion since the debt ceiling was lifted, to $32.66 trillion.
And to set the scene further: This $32.66 trillion of debt is composed of two groups of Treasury securities:
- $6.9 trillion of nonmarketable (not traded in the market) Treasury securities that have been bought by US government pension funds, the Social Security Trust Fund, etc.;
- $25.7 trillion in marketable securities (Treasury securities held and traded by the global public, from regular folks to central banks, including the Fed).
Marketable securities outstanding have spiked by $1.05 trillion since the debt ceiling was lifted on June 2, a huge amount of issuance in two months.
And in a moment, we’ll get into how much more will be issued for the remainder of the year: Another $1.5 trillion (as indicated by the green line and technical term for this phenomenon), according to the jacked-up projections released today by the Treasury Department:
Today’s debt-issuance shocker for the 2nd half.
The Treasury Department today jacked up its borrowing plans to deal with the lower-than-previously-expected revenues and the higher-than-previously-expected outlays, as the deficit keeps careening out of all control.
For the current quarter: $1.01 trillion in additional debt. This July through September quarter has only two months left, Treasury jacked up its borrowing plans by $274 billion, to total borrowing in the quarter of $1.01 trillion, up from the $733 billion it had imagined in May, according to its announcement today.
In other words, the government will issue over $1 trillion in marketable securities this quarter that the market has to buy this quarter, in addition to refinancing maturing securities.
Last time the government issued securities at this pace and faster was in 2020, but back then, the Fed was buying Treasuries hand over fist, including $3 trillion in March through May 2020. Now the Fed is shedding Treasuries at a pace of about $60 billion a month.
Markets not only have to digest the new issuance but also pick up the $60 billion a month that the Fed is walking away from.
The Treasury Department cited three main reasons for this $274 billion increase to this monster $1.01 trillion in new issuance this quarter:
- It raised by $50 billion the balance it wants to have in its checking account, the Treasury General Account (TGA), by the end of September, to $650 billion, from $600 billion as planned in May.
- It started out the quarter with $148 billion less in the TGA than projected in May. So it was behind before the quarter even started.
- It now projects “lower receipts and higher outlays” than imagined in May, requiring an additional $83 billion new debt to cover this additional deficit.
For the next quarter: $852 billion in new borrowing. In the October through December quarter, Treasury expects to borrow an additional $852 billion, to end with a cash balance in its TGA of $750 billion.
The way things are going, with these big upward revisions of borrowing estimates, along with the less than projected receipts and more than expected outlays, we can expect an upward revision of this $852 billion by the next update.
Total new borrowing in the second half: $1.85 trillion. In July – the first month of the second half – the government already borrowed nearly $300 billion. So for the five months from now through the end of December, the government projects to issue $1.56 trillion in new debt. Some of it to refill the TGA to $750 billion (from $550 billion now), and the rest of it cover the budget deficit.
Bon appétit, investors!
This is a huge amount of supply of Treasury securities coming to the market, on top of the $60 billion a month in maturing securities that the Fed is walking away from, and as they’re refinanced, the market has to pick them up too.
Yield solves all demand problems. That’s what yield is for, and it’s a good thing, we know that. You can sell even the riskiest junk bonds if the yield is high enough. So there will be buyers, but the yields will have to be high enough to attract them.
So far, the government has only increased its issuance of Treasury bills (securities of one year or less) and Cash Management Bills – a veritable flood of CMBs.
CMBs are the most flexible securities for the government. They are sold at auctions on short notice and outside the normal auction schedule. Their balance is not included in the above charted $32.66 trillion in national debt. CMBs can have peculiar terms, from one day on up to several months. For example, on July 27, Treasury announced that it will offer $50 billion in 42-day CMBs at an auction on August 1.
Even though CMBs are not included in the balance of the US national debt, they will still have to be absorbed by investors and are part of what investors have to buy.
The longer-term securities are coming. On Wednesday, Treasury is expected to announce a substantial increase in the issuance of longer-term securities – Treasury notes of 2 to 10 years and bonds of 20 and 30 years – most likely through increases of the sizes of its regular auctions.
This increased supply of longer-term securities will have to attract enough buyers with a yield that is high enough. Currently, Treasury bills are paying somewhere near 5.5%. But the 10-year yield is only around 4%. So this will be interesting.
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Indonesia issued its first “Golden Visa” to OpenAI CEO Sam Altman in a bid to bring in foreign investors who have impacted the country’s economic development. The visa was launched only last week and will allow recipients to live in the country for five to ten years and they’ll be fast tracked by immigration services.
Altman was granted a 10-year stay in the country and will receive other benefits including priority screening at Indonesian airports and easier entry and exit without the need to apply for an ITAS – temporary stay permit – at the immigration office. The Golden Visa is designated for wealthy investors who invest in the country. Those who make a $25 million (380 billion IDR) investment are eligible for a five-year stay golden visa, while those who invest $50 million (760 billion IDR) will be entitled to a 10-year stay visa.
“Because we are targeting quality investors, the requirements are more thorough,” Silmy Karim, director general of immigration said in a press release on Saturday. “The longer you stay in Indonesia, the higher the deposit amount required, especially for foreign investment, which can reach around Rp. 760 billion.”
It remains unclear whether Altman applied for the visa or if he simply qualified based on the criteria, as Karim said in a press release that the visa could also be granted to those who have “an international reputation and may bring benefits to Indonesia,” according to a translation by Bloomberg.
Karime said Altman was prioritized for a golden visa “because of his international reputation as the head of the artificial intelligence research and development company,” Channel News Asia reported.
Altman traveled to Indonesia’s capital, Jakarta in June, to speak on developments in AI as part of a tour throughout Asia, reaching countries including Beijing, Tokyo, Seoul, and Singapore. Countries around the world have introduced similar visas including the U.S., Ireland, New Zealand, the UAE, and Spain.
Karim said in Saturday’s press release: “Countries that have implemented the golden visa policy are getting a positive impact. Denmark, for example, has succeeded in becoming one of the countries at the forefront of innovation. Then, the United Arab Emirates became a favorite destination for foreign investors.”
He concluded: “Hopefully, with this policy, Indonesia will also receive a similar effect. Moreover, our country has a myriad of potentials to be fully managed and developed.” | Asia Business & Economics |
Scientists find that coin tosses aren't 50/50. Here's how you can get an advantage
The age-old method isn't as fair and practical as we originally thought.
Settling things by coin toss has been around for centuries. The ancient Romans called it “‘Heads or Ships.” Britains of the Middle Ages knew it as “Cross or Pile.” Throughout history, this game of chance was believed to be a fair, unbiased way to settle a dispute, choose which team goes first in a sports game and make decisions.
And the thought behind this makes sense. After all, there are only two sides to a coin, making the odds for each outcome an even 50/50. It doesn’t get more even than that.However, a team of scientists, led by former magician and American mathematician Persi Diaconis, have discovered that this age-old method isn’t as evenly split as we believed. And there's even a way to slightly cheat the odds to your advantage.
Diaconis made a name for himself by studying (and debunking) randomness, one of his more famous feats being determining how many times a deck of cards must be shuffled in order to truly mix up the deck. Even as a teenager, he exposed how casino scammers would shave their dice to improve their chances against customers.
When it comes to coin games, Diaconis has long argued that while it’s “pretty close to fair,” it’s definitely not 50/50. Especially when a little wobble is introduced into the toss, which increases the chance that the coin will land on the same side it started.
A group of scientists set out to test Diaconis' findings and their study, currently in preprint, revealed that coins did indeed land on the same side they were tossed from around 51 percent of the time.
“According to the [Diaconis] model, precession causes the coin to spend more time in the air with the initial side facing up,” they wrote. “Consequently, the coin has a higher chance of landing on the same side as it started (i.e., ‘same-side bias’).”
If you bet a dollar on the outcome of a coin toss 1000 times, knowing the starting position of the coin toss would earn you 19$ on average. This is more than the casino advantage for 6deck blackjack against an optimal player (5$) but less than that for single-zero roulette (27$).— František Bartoš (@BartosFra) October 9, 2023
The study recorded 350,757 coin flips, carried out by 48 people using 46 different currencies. In the end, there turned out to be a 50.8 percent chance of the coin showing up the same side it was tossed from.
They also found that some tossers showed a strong same-side bias while others had none at all, indicating that coin tosses may come down to the tosser, ever so slightly.
While this might not seem like a huge margin, the advantage becomes clear when you put into a betting scenario. "If you bet a dollar on the outcome of a coin toss (i.e., paying 1 dollar to enter, and winning either 0 or 2 dollars depending on the outcome) and repeat the bet 1,000 times, knowing the starting position of the coin toss would earn you 19 dollars on average,” the team explained.
"This is more than the casino advantage for 6 deck blackjack against an optimal-strategy player, where the casino would make 5 dollars on a comparable bet, but less than the casino advantage for single-zero roulette, where the casino would make 27 dollars on average."
You could also use physics to your advantage, not just probability. Diaconis also proved that the head side of a coin is a tiny bit heavier than its tails counterpart, causing it to land on tails more often. Especially when it comes to Lincoln Memorial pennies.
So next time you are fighting with a loved one over whose turn it is to do the dishes, you can still settle it with a coin toss. Just conceal the starting position first. Or take a peak a use this hard earned knowledge. No judgement. | Forex Trading & Speculation |
Christine Rogers of Wake Forest, North Carolina, didn’t hesitate when she was asked to fill out a routine mental health questionnaire during a checkup last November.
Her answers on the form led her primary care doctor to ask about depression and her mood, and Rogers said she answered honestly.
“It was a horrible year. I lost my mom,” Rogers said she told her physician.
After what Rogers estimates was a five-minute conversation about depression, the visit wrapped up. She said her doctor did not recommend treatment nor refer her for counseling.
“It’s not like anything I told her triggered, ‘Oh my goodness, I’m going to prescribe you medication,’” she said.
Then the bill came.
The Patient: Christine Rogers, 60, a public relations/communications worker who is insured by Cigna Healthcare through her job.
Medical Services: An annual wellness visit, which included typical blood tests, as well as a depression screening and discussion with a physician.
Service Provider: WakeMed Physician Practices, part of WakeMed Health & Hospitals, a Raleigh-based, tax-exempt system with three acute care hospitals, outpatient centers, and hundreds of physicians across a range of specialties.
Total Bill: $487, which included a $331 wellness visit and a separate $156 charge for what was billed as a 20- to 29-minute consultation with her physician. Her insurer paid $419.93, leaving Rogers with a $67.07 charge related to the consultation.
What Gives: Rogers said the bill came as a surprise because she knows annual wellness checks are typically covered without patient cost sharing as preventive care under the Affordable Care Act. And as part of an annual physical, patients routinely fill out a health questionnaire, which may cover mental health topics.
But there is a catch: Not all care that may be provided during a wellness visit counts as no-cost preventive care under federal guidelines. If a health issue arises during a checkup that prompts discussion or treatment — say, an unusual mole or heart palpitations — that consult can be billed separately, and the patient may owe a copayment or deductible charge for that part of the visit.
In Rogers’ case, a brief chat with her doctor about mental health triggered an additional visit charge — and a bill she was expected to pay.
Rogers said she didn’t broach the subject of depression during her checkup. She was asked when she checked in to fill out the questionnaire, she said — and then the doctor brought it up during her exam.
The Affordable Care Act requires insurers to cover a variety of preventive services without a patient paying out-of-pocket, with the idea that such care might prevent problems or find them early, when they are more treatable and less costly.
The federal government lists dozens of services that are classified as no-cost-sharing preventive care for adults and children, such as cancer screenings, certain vaccinations, and other services recommended by either of two federal agencies or the U.S. Preventive Services Task Force, an independent group of experts in disease prevention.
Depression screening is covered as preventive care for adults, including when they’re pregnant or in the postpartum phase.
Rogers requested an itemized bill from her doctor’s practice, which is part of WakeMed Physician Practices. It showed a charge for the wellness visit (free for her), as well as a separate charge for a 20- to 29-minute office visit. Earlier, Rogers said, she had discussed the initial bill with the office manager at her doctor’s office, who told her the separate charge, roughly $67, was for discussing her questionnaire results with her doctor.
For Rogers, it wasn’t so much about the $67 she owed for the visit, as it was a matter of principle. The separate change, she said, was “disingenuous” because she was specifically asked about her mental health.
Also, annual physicals are intended to nip health problems in the bud, which sometimes requires a few more minutes of attention — whether to discuss symptoms of depression or palpate an abdomen for digestive issues.
Sabrina Corlette, a research professor and co-director of the Center on Health Insurance Reforms at Georgetown University, agrees the charge seemed a bit over-the-top: Depression screening “is now a recommended part of the annual physical,” she said. “Implicit in that is someone looks at answers and makes an assessment, and you should not be charged for that.”
Beyond the confusion of being charged for what she thought would be free preventive care, Rogers wondered how the bill was calculated: Her conversation with her doctor about depression did not last that long, she said.
A 20- to 29-minute-visit billing code is commonly used in primary care, reflecting not just the time spent, but also the complexity of the condition or diagnosis, said Yalda Jabbarpour, a family physician in Washington, D.C. She also directs the Robert Graham Center for Policy Studies, which researches primary care in the U.S.
Billing codes exist for other, shorter time frames, though those are rarely used except for the most minimal of services, such as a quick question about a test result, she said.
Physicians said Rogers did the right thing, emphasizing that patients should be honest with their doctors during preventive visits — and not keep silent about issues because they are concerned about potential cost sharing.
“If you have a condition like depression, not only does it affect mental health, but it can have significant impact on your medical health overall,” said Stephen Gillaspy, senior director for health and health care financing at the American Psychological Association.
The Resolution: Confused by getting billed for a visit she thought would have no charge, Rogers initially called her doctor’s office and spoke with the office manager, who told her the claim submitted to her insurer was coded correctly for her visit. She then called her insurer to question whether a mistake had been made. She said her insurer said no, agreeing that the physician had billed properly.
Rogers paid the bill.
After being contacted by KFF Health News, and with Rogers’ permission, the WakeMed health system investigated the bill and said it was handled correctly.
“We do split bills when a service is provided that is above and beyond the preventive components of a physical — in this case, beyond a positive screening for depression,” WakeMed spokesperson Kristin Kelly said in an email.
By contrast, Cigna Healthcare, Rogers’ insurer, sent her a new explanation of benefits statement after being contacted by KFF Health News. The EOB showed Cigna had zeroed out any cost to Rogers associated with the visit.
Cigna spokesperson Meaghan MacDonald, in a written statement, said the “wellness visit was initially billed incorrectly with two separate visit codes, and has now been resubmitted correctly so there is no cost-share for Ms. Rogers. We are working with the physician to ensure she is refunded appropriately.”
The insurer’s website says Cigna covers a variety of preventive services without copayment and encourages doctors to counsel patients about depression.
Not long after receiving the new EOB, Rogers said she received a refund of $67.07 from WakeMed.
The Takeaway: While many preventive services are covered under the ACA, the nuances of when a patient pays can be complicated and open to interpretation. So, it is not uncommon for medical practices to narrowly interpret the term “preventive service.”
That creates a billing minefield for patients. If you respond on a questionnaire that you sometimes experience heartburn or headaches, most physicians will inquire about your responses to assess the need for treatment. But should that come with an extra charge? Other patients have written to KFF Health News and NPR expressing frustration over being billed for conversations during a checkup.
Additional time spent during a wellness exam discussing or diagnosing a condition or prescribing medication can be considered beyond preventive care and result in separate charges. But if you receive a bill for a preventive service that you expected would be free, request an itemized bill with billing codes. If something seems off, ask the physician’s office.
If you’re billed for time spent on extra consultation, question it. You know how long the provider spent discussing your health issue better than a billing representative does. Next, reach out to your insurer to protest.
Most important, be honest with your primary care provider during your annual physical.
Stephanie O’Neill reported the audio story.
Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it! | Personal Finance & Financial Education |
“The idea that crypto is on trial, I find ludicrous. An individual is on trial,” says Sheila Warren, CEO of the Crypto Council for Innovation, a body advocating for regulation of the crypto industry. “There is an extrapolation happening here and I don’t think it’s appropriate. The vast majority of this was good, old-fashioned, old-timey fraud.”Bankman-Fried has denied fraud, and pleaded not guilty to the charges he faces.The focal point of the trial, says Warren, should instead be the harm done to customers of FTX. The group will have a voice in the courtroom: The prosecution opened its case with the testimony of an ex-FTX customer who lost $100,000 to the exchange. But the emphasis of the “media frenzy” on the character of Bankman-Fried, the salacious details of his relationships with peers, and on crypto-bashing, says Warren, detracts from that central concern. “I wish [what’s going on in bankruptcy court] were the priority over ‘bad guy allegedly does bad things,’” she says. “The cult of celebrity around this is part of the problem.”The end of the trial of Bankman-Fried, expected to conclude by mid-November, may draw a line under the latest chapter in the crypto drama. But whether the industry will learn the necessary lessons from the fall of FTX and its once-celebrated founder is a separate question.Acheson is hopeful, but not convinced. She says crypto is uniquely vulnerable to the hero worship that helped to valorize and legitimize Bankman-Fried. The very-online nature of crypto discourse, she says, creates fertile ground for charismatic grifters able to amass a following. “Hopefully we’ll be ready, more vigilant, and less trusting,” says Acheson.The industry, says Warren, will only remain primed against the risky financial engineering that led to the collapse of FTX and its peers for so long. “I think it’s time-bounded,” she says. “Until you have a regulatory scheme that encodes [a clear set of rules for crypto businesses], you’ll have a new generation of people” that try to push the boundaries in dangerous ways. “One of the roles of a regulator is to contain some of that impulse and say, ‘There are consequences.’”The period of trauma can have a cleansing effect, driving out bad actors and reining in excess. But should crypto fever return, says Warren, the concern is that “a bunch of these yahoos, with their pump-and-dump nonsense, will come right back.” | Crypto Trading & Speculation |
An anonymous reader writes: Today, the US Treasury Department announced that taxpayers will have the choice to go paperless for all Internal Revenue Service (IRS) correspondence in the upcoming 2024 filing season. By 2025, the IRS plans to achieve paperless processing for all tax returns, still accepting paper documents but immediately digitizing them, to "cut processing times in half" and "expedite refunds by several weeks," the Treasury Department said. "The IRS receives about 76 million paper tax returns and forms and 125 million pieces of correspondence, notice responses, and non-tax forms each year, and its limited capability to accept these forms digitally or digitize paper it receives has prevented the IRS from delivering the world-class service taxpayers deserve," the Treasury Department said.
By accelerating paperless processing, the IRS expects to simplify how Americans access their taxpayer data and save millions historically spent on storing more than a billion documents. Digitization can also help eliminate errors, the Treasury Department said, which can "result from manually inputting data from paper returns." And it will help taxpayers more quickly get answers to questions, as IRS customer service employees "do not currently have easy access to the information from paper returns." Starting in 2024, they will. Next filing season, taxpayers will have the option to e-file 20 additional tax forms among the most commonly submitted when amending returns, including forms used to submit information on things like identity theft or proof of eligibility for "key credits and deductions that help low-income households."
"Taxpayers who want to submit paper returns and correspondence can continue to do so," the Treasury Department said, but "all paper will be converted into digital form as soon as it arrives at the IRS." In 2024, the IRS estimates that "more than 94 percent of individual taxpayers will no longer ever need to send mail to the IRS." Once taxpayers arrive at the 2025 filing season, they'll have the option to e-file "an additional 150 of the most used non-tax forms," the Treasury Department said, which "will be available in digital, mobile-friendly formats that make them easy for taxpayers to complete and submit." The IRS prioritized mobile-friendly formats because the agency estimates that "15 percent of Americans rely solely on mobile phones for their Internet access." "When combined with an improved data platform, digitization and data extraction will enable data scientists to implement advanced analytics and pattern recognition methods to pursue cases that can help address the tax gap, including wealthy individuals and large corporations using complex structures to evade taxes they owe," the Treasury Department added.
By accelerating paperless processing, the IRS expects to simplify how Americans access their taxpayer data and save millions historically spent on storing more than a billion documents. Digitization can also help eliminate errors, the Treasury Department said, which can "result from manually inputting data from paper returns." And it will help taxpayers more quickly get answers to questions, as IRS customer service employees "do not currently have easy access to the information from paper returns." Starting in 2024, they will. Next filing season, taxpayers will have the option to e-file 20 additional tax forms among the most commonly submitted when amending returns, including forms used to submit information on things like identity theft or proof of eligibility for "key credits and deductions that help low-income households."
"Taxpayers who want to submit paper returns and correspondence can continue to do so," the Treasury Department said, but "all paper will be converted into digital form as soon as it arrives at the IRS." In 2024, the IRS estimates that "more than 94 percent of individual taxpayers will no longer ever need to send mail to the IRS." Once taxpayers arrive at the 2025 filing season, they'll have the option to e-file "an additional 150 of the most used non-tax forms," the Treasury Department said, which "will be available in digital, mobile-friendly formats that make them easy for taxpayers to complete and submit." The IRS prioritized mobile-friendly formats because the agency estimates that "15 percent of Americans rely solely on mobile phones for their Internet access." "When combined with an improved data platform, digitization and data extraction will enable data scientists to implement advanced analytics and pattern recognition methods to pursue cases that can help address the tax gap, including wealthy individuals and large corporations using complex structures to evade taxes they owe," the Treasury Department added. | Banking & Finance |
Ex-crypto golden boy Sam Bankman-Fried is set to face a blistering cross-examination by Manhattan federal prosecutors Monday — and then a planned mysterious “rebuttal” witness.
The MIT grad, 31, coolly tried to weasel out of blame in court Friday for his alleged $10 billion theft from FTX investors, claiming he knew “basically nothing’’ about cryptocurrency when he started his business and that it imploded because of “mistakes,’’ not crimes.
But he won’t be able to dodge getting slammed by prosecutors under cross-examination when his criminal trial resumes Monday morning.
Prosecutors also hinted Friday that they then plan to call a “rebuttal” witness after he leaves the stand.
“We are expecting a brief rebuttal case,” a member of the federal prosecution team told Judge Lewis Kaplan after jurors were sent home for the day.
The feds did not identify the witness or explain how they would “rebut” aspects of the accused crypto crook’s account.
The accused crypto thief — who is charged with splurging with FTX user funds on such luxurious goodies as millions of dollars in Bahamas real estate — testified Friday, “We thought we could build the best product on the market,” when asked by his lawyer why he founded his company.
The lawyer, Mark Cohen, replied, “Did it work out that way?”
Bankman-Fried, dressed in a gray suit and purple tie on the witness stand inside a packed federal courtroom in lower Manhattan, responded a flat, nasally monotone, “No, it turned out basically the opposite of that.
“A lot of people got hurt,” added the defendant, whose parents are both Stanford Law School professors.
Bankman-Fried showed nearly no emotion — and little to no remorse — while providing various explanations for his companies’ November 2022 meltdown.
The fallen crypto mogul claimed that FTX, a company he owned and ran, had “significant oversights” in its “risk management.”
He also accused his ex-girlfriend Caroline Ellison, who served as CEO of his hedge fund Alameda Research, of not “hedging” the company’s bets months before the feds say Bankman-Fried stole FTX funds to pay off Alameda’s multibillion-dollar debt.
Ellison has taken a plea deal and flipped on Bankman-Fried.
While facing the friendly questioning of his own lawyer, the ex-billionaire testified Friday that he “made a number of small mistakes and a number of large mistakes” while running FTX.
But he denied “taking” customer funds, contradicting testimony from three former executives, including Ellison, who told jurors that Bankman-Fried used FTX customer assets to prop up an underwater Alameda.
“Did you defraud anyone?” Bankman-Fried’s lawyer asked him shortly after he took the stand just before 10 a.m.
“No, I did not,” the defendant replied.
Prosecutors are set to get a crack at the disgraced crypto king during a cross-examination Monday that could be brutal for Bankman-Fried, if Thursday’s dry run was any indication.
The California native tried to squirm his way out of answering questions during a surprise evidence hearing — held after jurors were sent home — repeatedly stammering, “I don’t recall” as prosecutor Danielle Sassoon interrogated him.
Later Friday, the MIT grad tried to distance himself from computer code that the feds say allowed his hedge fund to pilfer unwitting FTX users’ funds by “borrowing” money it never paid back.
“I wasn’t much of a programmer,” Bankman-Fried claimed.
His ex-girlfriend Ellison has testified that Bankman-Fried in fact directed the company’s engineering chief, Nishad Singh, to write the code allowing Alameda to access the funds.
The California native also testified that he knew “basically nothing” about crypto before founding his crypto-focused hedge fund Alameda in 2017.
“I had absolutely no idea how they worked,” he said of crypto dealings.
He also provided his version of why he split up with Ellison in the spring of 2022, saying, “I didn’t have the time or the energy.”
He also addressed his typical schlubby dress code of khaki shorts and a t-shirt.
“I found them comfortable,” he said of the clothing.
Bankman-Fried has pleaded not guilty to seven conspiracy and wire fraud charges and faces what would effectively be a life sentence if convicted.
He is being held at Brooklyn’s Metropolitan Detention Center after a federal judge revoked his bail after finding that he intimidated witnesses by leaking Ellison’s personal diary to a reporter. | Crypto Trading & Speculation |
- Binance has seen outflows amounting to more than $1 billion in the past 24 hours, not including bitcoin, according to data from blockchain analysis firm Nansen.
- Zhao and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program and for willfully violating U.S. economic sanctions.
- Binance agreed to forfeit $2.5 billion to the government and pay a fine of $1.8 billion — a combined $4.3 billion — in "one of the largest penalties we have ever obtained," according to U.S. Attorney General Merrick Garland.
Outflows from Binance have amounted to more than $1 billion in the past 24 hours, not including bitcoin, according to data from blockchain analysis firm Nansen, after founder and CEO Changpeng Zhao stepped down and pleaded guilty in a deal with the Department of Justice.
Binance also agreed to pay $4.3 billion in fines to the U.S. government. The plea deals end a years-long investigation into the crypto exchange.
The outflows are significant and close to what happened previously when the exchange and its founder were charged with 13 securities violations by the SEC.
The exchange's native token, BNB, is down more than 8% in the last 24 hours. Binance holds around $2.8 billion worth of BNB tokens, according to Nansen. And in March, after Binance phased out zero-fee trading of crypto asset pairs including bitcoin, a key incentive for customers, the exchange began to see its share of all spot trading drop.
Binance remains the world's largest crypto exchange globally, processing billions of dollars in trading volume every year.
There remains more than $65 billion of assets on the platform, according to Nansen, meaning that Binance is likely capitalized enough to withstand a sudden rush of investors away from the platform. And while withdrawals are on the up, there has not yet been a "mass exodus" of funds from the exchange.
"After the momentary shock of the agreement with the announcement, there is no significant impact on most assets," said Grzegorz Drozdz, a market analyst at investment firm Conotoxia Ltd.
"The cryptocurrency that seems to have suffered the most, losing more than 9%, is the BNB token from Binance. Of the top 100 cryptocurrencies, as many as 98 have seen a noticeable rebound over the past 24 hours. Bitcoin, meanwhile, fell 4% before rebounding and remaining with a loss of 1.3%," he added.
Drozdz added that it may be a net positive for the industry now that the dispute with regulators is behind Binance and that the company has pledged to increase security measures.
"This, combined with the likely imminent approval of an ETF based on bitcoin quotes, could positively impact the crypto market in the long term," said Drozdz.
That's the multi-billion dollar question the cryptocurrency giant faces after its CEO and founder Changpeng Zhao agreed to a plea deal and stepped down from the company. Zhao currently faces time in prison in the U.S. for his alleged crimes tied to his role in running the exchange.
Started by the Chinese-born entrepreneur in 2017, Binance went from being a relatively obscure name to being a major force in crypto in a matter of weeks.
Experts CNBC spoke with said that Binance is likely to make it through the ordeal despite a turbulent situation, citing the company's decision to comply with the DOJ process, implement a three-year strategy to get its operations into compliance, and the amount of assets held within the company's reserves.
"The sum of $4 billion is clearly very large and will create real pain for Binance's balance sheet," Yesha Yadav, Milton R. Underwood professor of law and associate dean at Vanderbilt University, told CNBC via email.
"However, this fine does not appear aimed at dealing a fatal blow to the exchange. Based on Binance's dominant position within the crypto-ecosystem over a number of years, CZ's personal wealth ... and continuing trading volumes despite declines in overall crypto trading volume as well as in Binance's market share relative to other venues, I doubt that Binance will face risks to its solvency in paying this fine."
Zhao and others were charged with violating the Bank Secrecy Act by failing to implement an effective anti-money-laundering program and for willfully violating U.S. economic sanctions "in a deliberate and calculated effort to profit from the U.S. market without implementing controls required by U.S. law," according to the Justice Department.
Binance has agreed to forfeit $2.5 billion to the government and to pay a fine of $1.8 billion. The total sum of money owed by the company stands at $4.3 billion.
U.S. Attorney General Merrick Garland said in a press conference Tuesday that it's "one of the largest penalties we have ever obtained."
"Using new technology to break the law does not make you a disruptor. It makes you a criminal," Garland said. "Binance prioritized its profits over the safety of the American people."
Zhao said Tuesday in a post on X, formerly Twitter, that he had "made mistakes" and "must take responsibility."
Richard Teng, a former Abu Dhabi financial services regulator, was subsequently named as Zhao's replacement. Teng was most recently the global head of regional markets at Binance.
He was also previously director of corporate finance at the Monetary Authority of Singapore.
The action against Binance and its founder was a joint effort by the Department of Justice, the Commodity Futures Trading Commission and the Treasury Department.
The Securities and Exchange Commission was notably absent.
Treasury Secretary Janet Yellen said in a release Tuesday that the exchange allowed illicit actors to make more than 100,000 transactions that supported activities such as terrorism and illegal narcotics and that it allowed more than 1.5 million virtual currency trades that violated U.S. sanctions.
It also allowed transactions associated with terrorist groups such as Hamas' Al-Qassam Brigades, Palestinian Islamic Jihad, al-Qaida and ISIS, Yellen said in the release, noting Binance "never filed a single suspicious activity report."
Zhao has been released on a $175 million personal recognizance bond secured by $15 million in cash and has a sentencing hearing scheduled for Feb. 23.
Binance will continue to operate but with new ground rules. The company is required to maintain and enhance its compliance program to ensure its business is in line with U.S. anti-money laundering standards. The company is required to appoint an independent compliance monitor.
The case against Binance, which was unsealed Tuesday, shows that three criminal charges were brought against the exchange, including conducting an unlicensed money-transmitting business, violating the International Emergency Economic Powers Act, and conspiracy.
Some of its rivals may look to take advantage of the situation, particularly Coinbase, Kraken, and OKX. Coinbase and Kraken are currently waging their own respective legal battles with the SEC, which hit Coinbase with a lawsuit similar to the one it brought against Binance, alleging it is operating as an unauthorized securities exchange, broker and clearing agency.
And on Monday the SEC sued Kraken, alleging that the exchange commingled $33 billion in customer crypto assets with its own company assets, creating the potential for a significant risk of loss to its users.
Vanderbilt University's Yadav said Binance's reserves were likely to come under scrutiny as investors assess where to go after the exit of the company's CEO. Attempts by Binance to create strategic transparency since the FTX collapse have "floundered," she added.
Binance published its proof of reserves, a system to show its number of assets and liabilities. But these proofs of reserves are based on limited information that can be divulged from public blockchains, and not on par with a full-scale audit.
"There is no doubt that Binance's reserves will be coming under scrutiny in the months and years to come," Yadav explained. "A big question that has hung over Binance is how it is run, the state of its internal governance and risk management."
"This is a venue that has long been known for its opacity as well as an impenetrable capital and organizational structure whose complexity has caused regulators like the CFTC to investigate these organizational interconnections as possible avenues for Binance to engage in activities violating applicable regulations," Yadav added. | Crypto Trading & Speculation |
- Consumers paying state sales tax on menstrual products will be able to get those costs on some period care purchases reimbursed.
- The initiative is the result of a new coalition of period care brands August, Cora, LOLA, The Honey Pot, Rael, Here We Flo, Saalt and DIVA.
- Twenty-one states in the U.S. tax menstrual items at standard rates like nonessential goods.
Starting Wednesday, consumers paying state sales tax on menstrual products will be able to get those costs on some period care purchases reimbursed.
The Tampon Tax Back Coalition — an initiative of period care brands August, Cora, LOLA, The Honey Pot, Rael, Here We Flo, Saalt and DIVA — will reimburse consumers for the tax paid on eligible items sold by the eight participating brands.
The coalition aims to stop the "tampon tax," a term used to describe the state sales tax imposed on products such as tampons, pads and menstrual cups in more than a dozen U.S. states. Many states exempt essential products such as food and medications from being subject to sales tax but leave out period care products, because their current state tax codes consider them nonessential goods.
"So much of the work that has to be done is changing public opinion, putting that public pressure on legislators," said Nadya Okamoto, co-founder of August, an inclusive period care brand focusing on providing products for all menstruators, not just those who identify as female. "We've made some progress, but there's still quite a bit of ways to go."
Twenty-one states in the U.S. tax menstrual items at "standard rates," meaning tampons and pads are taxed at the same rate as any other nonessential product you would pick up at your local retailer, according to data from the Alliance for Period Supplies.
The annual cost of the taxes to consumers totals roughly $80 million, according to Period Law, a group recruiting volunteer attorneys to help advance period equity legislation.
The Tampon Tax Back Coalition was born out of an initiative by August that launched in May. Now with seven additional brands on board, the coalition said it is prioritizing the customer and making the reimbursement process easier.
"This is something that shouldn't exist," Okamoto said. "A customer shouldn't have to text multiple different places or figure out the logistics of how they get the 'tampon tax' back if they're buying one brand of tampons, one brand pads."
Yanghee Paik, CEO of Rael, a clean feminine care and skincare startup, called the coalition a "big step" toward sending a message that period care products are essential to covering "basic medical needs."
"Not many people really have the awareness of this issue in the country," said Paik, adding the tax is "very, very backward."
Beatrice Dixon, CEO at The Honey Pot, said it was not until she started her own period care brand that she learned about the tampon tax: "Before that, I didn't even know that I as a consumer was even paying that."
Dixon described the decision to get involved in the coalition as a "no-brainer."
To get reimbursed, customers can visit the coalition's website and start a claim for reimbursement within 10 days of the date of purchase for eligible items sold by the eight participating brands. Customers will be refunded via Venmo or PayPal within 24 hours of their submissions, according to the coalition. | Consumer & Retail |
Tata Technologies Sets IPO Price Band At Rs 475-500 To Raise More Than Rs 3,000 Crore
A price band of Rs 475-500 per share ascribes Tata Technologies a post-IPO market capitalisation of up to Rs 20,000 crore.
Tata Technologies Ltd. has set a price band in Rs 475-500 range for its highly-anticipated initial public offering, ascribing it a post-offering market capitalisation of up to Rs 20,000 crore.
The Nov. 22-24 IPO, a first from the Tata stable in nearly two decades, is a pure offer-for-sale of 60,850,278 shares of face value Rs 2 apiece by parent Tata Motors Ltd. (46,275,000), and investors Alpha TC Holdings Pte Ltd. (9,716,853) and Tata Capital Growth Fund I (4,858,425 ), equivalent to 11.41%, 2.40% and 1.20% stake, respectively.
A portion of the offering, about 10%, is reserved for the employees of Tata Technologies and shareholders of Tata Motors. While qualified institutional buyers can bid for 50% of the net offer, 15% of the Rs 3,000-crore IPO is reserved for non-institutional investors. The rest, about 35%, is for retail investors.
At the upper end of the price band, the ER&D company will end of raising a little over Rs 3,000 crore at a post-issue implied market cap in excess of Rs 20,000 crore, according to a notice put out on Thursday.
The bid lot size is set at 30 shares and multiples there of.
JM Financial Ltd., Citigroup Global Markets India Pvt. and BofA Securities India Ltd. are the book-running lead managers for the issue.
Smaller Than Planned
To be sure, Tata Technlogies shareholders are offloading less stock than previously planned.
In the draft red-herring prospectus with the Securities and Exchange Board of India in March this year, the Pune-based ER&D services firm said Tata Motors, Alpha TC Holdings and Tata Capital Growth Fund I would offload a total of 95,708,984 shares equivalent to 20%, 2.40% and 1.20% stake, respectively.
The reduction is due to the fact that Tata Motors 9.9% of its stake in Tata Tech to new investors at an enterprise valuation of Rs 16,300 crore, or about $2 billion, ahead of the IPO. TPG Rise Climate SF Pte, a climate-focused private equity fund which had $1 billion in Tata Motors’ electric mobility unit, has bought 9% stake in Tata Technologies while Ratan Tata Endowment Foundation picked up the rest.
The transaction happened at Rs 401.81 per equity share, according to the company's red herring prospectus.
The move is part of Tata Motors’ “deleveraging agenda”, the company said on Oct. 13 while announcing the stake sale. As on Sept. 30, the company’s net automotive debt reduced to Rs 38,700 crore as against Rs 41,700 crore in the previous quarter.
Tata Motors wants its domestic business to be net debt-free by FY24.
Tata Technologies, a wholly owned subsidiary of Tata Motors, is a global ER&D services firm that offers product development and digital solutions to original equipment manufacturers, not limited to the automotive sector. It counts Jaguar Land Rover Plc and Airbus SE among its clientele. JLR its partnership with Tata Technologies for its digital transformation. | Stocks Trading & Speculation |
Head of federal green fund targeted by whistleblowers resigns
Poilievre tells House of Commons the SDTC scandal is 'only getting worse'
The president and CEO of a federal foundation with a billion dollars to spend on environmental technologies has resigned after her organization was the target of a whistleblower complaint earlier this year.
In her letter of resignation as the head of Sustainable Development Technology Canada (SDTC), Leah Lawrence said her departure was prompted by growing criticism of her organization.
"Given recent media reports, House of Commons committee testimony, and the surrounding controversy, it is clear there has been a sustained and malicious campaign to undermine my leadership," she said in a letter to her board of directors.
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"This compromises my future ability to lead the organization and puts me in an untenable situation. And I want to see this organization succeed."
- Whistleblowers secretly recorded civil servant slamming 'outright incompetence' at federal green fund
Lawrence defended her management of SDTC since 2015, which saw the foundation fund a growing number of woman-led companies.
"I look forward to a new chapter, one that will focus on continuing my work championing improved governance, corporate transparency and integrity," she said in her letter.
Under its current agreement with the federal Department of Innovation, Science and Economic Development (ISED), SDTC has $1 billion to distribute to small and medium-sized enterprises in the clean tech sector between 2021 and 2026. The amount is set to increase every year, reaching $320 million by 2025-2026.
A green fund in turmoil
As revealed by CBC last week, a senior federal official sharply criticized the foundation's senior management in conversations that were recorded without his knowledge in recent months. In his comments, ISED assistant deputy minister Doug McConnachie said the government had lost "confidence" in the leadership team at SDTC.
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Lawrence's resignation comes after the government received a complaint early this year about the management of public funds and human resources within SDTC.
In response to this complaint, the government commissioned an investigation by the firm Raymond Chabot Grant Thornton, which identified problems with management of conflicts of interest and problematic spending within SDTC.
The Office of the Auditor General of Canada announced last week it's launching its own special investigation into SDTC's spending.
During testimony before a parliamentary committee on Wednesday, SDTC chair Annette Verschuren was sharply criticized for her role in approving $217,000 in funding to her own firm.
Verschuren said she acted based on a legal opinion that said she did not have to recuse herself. She told MPs on the committee that all companies with existing agreements with SDTC obtained similar levels of funding during the COVID-19 pandemic.
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"I took the advice from my lawyer," Verschuren told MPs on the committee. "I received legal advice and I think that was the proper approach."
Verschuren has been sharply criticized by Liberal, Conservative and New Democratic MPs.
Conservative Leader Pierre Poilievre called for Verschuren's firing in the House of Commons on Thursday.
"The scandal surrounding the prime minister's $1-billion green fund is only getting worse. Not only did whistleblowers compare this fund to the sponsorship scandal, but the chair of the fund also directed $200,000 in taxpayers' money to her own company," Poilievre said.
In response, Innovation Minister François-Philippe Champagne said he took the necessary measures after receiving the complaint against SDTC.
"We expect the highest level of governance from all agencies that receive funding from taxpayers. We will continue to get to the bottom of this situation," he replied. | Renewable Energy |
Total GivingTuesday donations were flat this year, but 10% fewer people participated in the day
The nonprofit organization GivingTuesday estimates that donors gave $3.1 billion this year on what has become one of the most important fundraising dates for U.S. nonprofits, the Tuesday after Thanksgiving
NEW YORK -- Nonprofit organization GivingTuesday estimates that donors gave $3.1 billion this year on what has become one of the most important fundraising days of the year — the Tuesday after Thanksgiving.
Donations were up $20 million on Tuesday, a 0.6% increase over last year before adjusting for inflation, the nonprofit said. GivingTuesday makes its estimate by drawing on data from donor management software companies, donation platforms, payment processors and donor-advised funds.
“On the one hand, this is fantastic,” said Woodrow Rosenbaum, GivingTuesday’s chief data officer. “Tens of millions of people in the U.S. came together once again to have a huge impact for causes they care about, including donating an enormous amount of money in a 24 hour period."
But the number of donors was down about 10% from 2022, which Rosenbaum called a worst case scenario for the sector: “We’re seeing less dollars from the big donor that we’ve been relying upon and fewer grassroots donors who are so important to our resilience and long-term health of the sector.”
Nonprofit organizations and industry groups have been warning that donations this year are down, which follows a drop in overall charitable giving in 2022 for only the fourth time in 40 years, according to Giving USA.
It's still too early to know whether end-of-year giving will pull charitable donations back up this year.
Elaine Kenig, chief communications officer at Vanguard Charitable, which hosts donor-advised funds, said about 30% of the total grant dollars donated from those accounts each year go out in the last two months of the calendar year.
“We absolutely lean into those traditional cycles of giving, which I feel like GivingTuesday really capitalizes on,” she said.
But their account holders also responded with urgency to major events like the wildfires that devastated Maui in August, Kenig said.
“Giving is the nicest thing to do and the best thing to do. And you get more from it than probably what you give,” said Naomi Thompson, who works for a cancer charity in Northern Ireland. Especially when donors feel like they have less to give, she suggested really considering whether the organization's work makes an impact on the donor's community.
GivingTuesday's estimates don't include gifts to mutual aid groups, donations to political organizations or gifts made directly to individuals, Rosenbaum said. Still, the results may indicate further difficult times ahead.
“When we see this increase in the average donation on GivingTuesday,” Rosenbaum said, “We see that as a warning sign, not as something that we should be looking for.”
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Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy. | Nonprofit, Charities, & Fundraising |
Target on Wednesday forecast holiday-quarter profit largely above Wall Street expectations as the big-box retailer benefits from easing supply chain costs and its efforts to control inventory start to pay off, sending its shares up 18%.
Target’s stock has lost a quarter of its value in a turbulent year marked by elevated inflation.
Shoppers have squarely focused on food and essentials, while showing reluctance to spend on home goods, electronics, toys and apparel that are deemed less essential.
Target CEO Brian Cornell said on a post-earnings call that though shoppers are still spending, the company was not out of the woods as higher interest rates, the resumption of student loan repayments, increased credit card debt and reduced savings keep up the pressure.
Cornell said more consumers are delaying their spending until the last moment, for example shoppers who previously bought sweatshirts or denim in August or September were waiting to buy them until the weather turns cold.
“This is a clear indication of the pressures they’re facing as they work to stretch their budgets until the next paycheck,” he said.
To adapt to this shifting behavior, Target said it would place a big focus on value, for example, offering over two-thirds of its holiday toy collection and holiday decorations priced below $25 and $20, respectively.
This includes an exclusive FAO Schwarz toy collection, with 50% of the assortment under $20 and $15 ornament sets and baking products and $10 throw pillows and tree skirts.
The company is also offering four weeks of deals leading up to Black Friday where it plans to showcase its new collections with Kendra Scott jewelry, Fenty Beauty and an exclusive kitchenware brand called Figmint.
Consumer pressure
Signs emerged of easing consumer pressure ahead of the holidays, with Commerce data showing that consumer prices didn’t change in October and the annual rise in underlying inflation was the smallest in two years.
On Wednesday, Target forecast adjusted earnings to land between $1.90 and $2.60 per share in the fourth quarter.
The midpoint of that range topped analysts’ expectations of $2.22 per share, according to LSEG data.
It also expects holiday-quarter comparable sales to decline in the mid-single-digit percentage range, compared with expectations of a 3.97% drop.
Dave Wagner, equity analyst and portfolio manager at Aptus Capital Advisors said the wide range of Target’s outlook showed that executives had “no clue” on what to expect this holiday season.
Brian Mulberry, a client portfolio manager at Zacks Investment Management, said he viewed the results as things getting better from a margin standpoint.
“Investors are rewarding the stock because it is getting better than where it came from,” Mulberry said.
Target said its forecast follows a third quarter in which gross margins improved to 27.4%, from 24.7% a year earlier, due to fewer discounts, a 14% reduction in inventories and related costs, and lower freight, supply-chain and delivery expenses.
Target has faced unique challenges this year including backlash in May over its LGBTQ-themed merchandise and a spike in retail thefts that it said led it to shut nine stores in New York, San Francisco, Seattle, and Portland, Ore.
On Wednesday, executives said inventory losses caused by issues including theft and accounting errors had decreased and would not be as bad in the fourth quarter compared to prior quarters, in part due to tight control on inventories. | Consumer & Retail |
Rishi Sunak and Grant Shapps will lead an intensive series of engagements this week in a determined effort to strengthen the UK's energy independence.
The prime minister and energy security secretary are meeting with industry leaders from oil, gas and renewable sectors aimed at driving forward measures to safeguard national energy security and diminish reliance on potentially hostile states.
Drawing upon the UK's expertise in the energy industry, Mr Sunak will outline plans that emphasise job creation and economic expansion while ensuring leaders such as Vladimir Putin can never again exploit energy as a weapon to blackmail other nations.
Central to the government's energy security strategy is a significant emphasis on empowering Britain through domestic resources.
Mr Sunak is expected to unveil investment plans that prioritise powering up the UK from within. This approach seeks to reduce dependency on imported fossil fuels by bolstering the domestic oil and gas industry, investing in cutting-edge clean technologies, and isolating Russia's regime from global energy markets.
The government's goal is to ensure the UK seizes opportunities to fortify its energy infrastructure in the present, and to secure long-term energy independence, resilience, and prosperity for the future.
Another week, another policy push. On Monday the government revealed a new housing strategy, next week the focus will be on energy security. The details however are still light: Rishi Sunak will meet energy bosses, support is expected new renewables but there remains a commitment to oil and gas in the North Sea. The Sunday Times reports the prime minister will announce multimillion-pound funding for a carbon capture project in Scotland. It comes as Rishi Sunak's green credentials come under fire: the government is accused of watering down and weaponising environmental policies like ULEZ in Uxbridge, west London. There is certainly evidence in the Sunday newspapers they see green policies as an election battleground. Writing in the Sun on Sunday Grant Shapps says Keir Starmer's stance on new oil and gas licences "threatens the lights going out", and the Telegraph reports that Rishi Sunak is "on motorists' side" over anti-car schemes. What's clear is the PM wants to set the agenda in recess, with long-term strategies on energy and housing. The trouble is the Conservatives may not be in power long enough to see any of this through.
Mr Shapps said: "Energy security is national security. Since Putin's illegal invasion of Ukraine, the government has driven Putin from our energy market, paid around half of a typical family's energy bill and grown our economy by driving forward major energy projects.
"This week we will go even further. Forging ahead with critical measures to power up Britain from Britain - including supporting our invaluable oil and gas industry, making the most of our home-grown energy sources and backing British innovation in renewables."
He added: "And across government, we will champion Britain's businesses to deliver on the prime minister's priority of growing the economy - helping them to create new jobs and even whole new industries across the UK."
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In line with these efforts, the week's agenda will also highlight support for British innovation in emerging industries, particularly in areas such as carbon capture and storage. It will also showcase initiatives aimed at accelerating the adoption of cutting-edge renewable technologies across the country.
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The government's strategic push for energy security builds upon the UK's years of critical support for the North Sea oil and gas sector and its world-leading achievements in renewable energy.
The UK has so far cut emissions by 48% between 1990 and 2021, while growing the economy by 65% over the same period.
Some 41.5% of the nation's electricity comes from renewable sources in 2022 - up from 6.7% in 2010 - as the UK leads the world in the response to Mr Putin's invasion of Ukraine and driving Russia out of its energy market for good. | United Kingdom Business & Economics |
Before you head over to the produce department and grab a few tomatoes to hurl in my direction, hear me out: The proposed merger between Albertsons and Kroger, owner of Kansas’ Dillons grocery chain, could be a very good thing for consumers.
Why? Because, like it or not, the way we shop has dramatically changed. More Americans are doing their shopping online or at a discount warehouse. Fewer go inside the grocery store. For many, that weekly trip to the market is becoming a thing of the past. Online and warehouse competition has changed everything — and it has helped lower the cost of many goods.
Walmart, Amazon and Costco are now the major players in the grocery marketplace. Chances are, you’ve purchased an item at one of the three over the past 30 days.
In fact, Walmart/Sam’s Club make up nearly a third — 30% — of the U.S. grocery market share, as data reported by Axios shows. Costco tallies another 7%. Amazon is moving quickly and accounts for more than 5%. And consider this: Amazon Prime, Walmart and Costco have more than 250 million subscriptions.
Even if the Albertsons-Kroger merger proceeds, it would account for just 9% of nationwide sales, according to the International Center for Law and Economics. But what it would do is get the attention of the big three — increasing competition with their 42% of the current market share.
Kroger and Albertsons are cognizant of criticisms of the deal. The chains say they will sell 413 stores and eight distribution centers to address any questions about a monopoly in certain communities, as Bloomberg noted.
In fact, a review of all of the Albertsons and Kroger locations throughout the country shows very few places where the two stores both have locations.
The Federal Trade Commission is now reviewing the proposal and could rule sometime next year. Kroger-Albertsons says it is prepared to fight in court to ensure the merger goes through. No supermarket mergers have been litigated since 1988.
It is likely the largest dispute will be over what defines the term “supermarket.” Does it have to be a traditional brick-and-mortar location? Will online supermarkets be counted? If not, why? It is clear that Amazon, Walmart and Costco directly compete with Kroger and Albertsons, so why wouldn’t they be included in any merger analysis?
Nearly 30 years ago, supermarkets accounted for 81% of retail sales. That dropped to 61% a decade later, and today, it’s near 50%. Where have all of the customers gone? Online and warehouse stores.
An economist with the Strategic Resource Group recently told Yahoo Finance: “Kroger’s acquisition of Albertsons is the last, best, and final chance to level the playing field.”
As with any proposal, there is fear of the unknown. But we shouldn’t let fear destroy an opportunity to increase competition and improve the outlook for the consumer.
Chris Cargill is the President of Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming. Online at mountainstatespolicy.org. | Consumer & Retail |
AI Is No Easy Fix for NFT Selloff, Says Creator of Historic $69 Million Artwork
The intersection of artificial intelligence and nonfungible tokens provides no simple antidote for the slump in the market for digital collectibles, according to the artist Beeple.
(Bloomberg) -- The intersection of artificial intelligence and nonfungible tokens provides no simple antidote for the slump in the market for digital collectibles, according to the artist Beeple.
Proponents of AI-generated art claim it offers a new type of interactive creativity that can be tied to NFTs to potentially reignite interest in that marketplace, where activity has tumbled since a peak in 2022.
But Michael Winkelmann, better known as Beeple and famed for his NFT artwork that fetched $69.3 million in 2021, said on Bloomberg Television that “AI isn’t some sort of quick fix to give value to NFTs.”
“This is a tool that everybody now has,” he told Caroline Hyde and Ed Ludlow. “If it is something that is easy for you to do with AI and make, it probably won’t have lasting value because anybody could do that. You really still need to have something that is a truly new, innovative idea.”
A pandemic-era boom in crypto and NFT prices has given way to a prolonged bust, stirring doubts about whether the market can ever reclaim the heady levels it once hit. For instance, the Bitwise Blue-Chip NFT Collections Index has fallen over 80% from a high some 15 months ago.
Read more: NFT Prices Slump as Popular Collection Tumbles Following Debut
While “everything is down” and speculators have exited, the idea of owning digital things remains a fairly new concept, Winkelmann said.
“The people who are using this new medium to do innovative things and are sort of sticking with it, there are many of those people,” he said. “It will continue to grow and find an audience that this resonates with.”
--With assistance from Ed Ludlow and Caroline Hyde.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Crypto Trading & Speculation |
Mighty Dollar Can Fight Off The Digital Upstarts
The de-dollarization project is counting on blockchain technology to end the greenback’s hegemony. The hope may be misplaced.
(Bloomberg Opinion) -- Proponents of de-dollarization might resent America’s exorbitant privilege all they want. But what can they do about it?
Analysts usually trace the US currency’s hegemony to its outsized use in international commerce. Even a decade after China eclipsed the US as the world’s largest goods-trading nation, that dominance doesn’t appear to be fading. The much-awaited petroyuan has so far been just a myth, even though some dollar-starved importers like Pakistan are keen to pay for Russian crude in the Chinese currency.
An even bigger moat may be the greenback's role in fundraising. It will take the People’s Republic a long time to match the depth, liquidity and openness of the dollar-denominated capital market in which firms and banks borrow and hedge their risks. A proposed common currency for the so-called BRICS grouping of Brazil, Russia, India, China and South Africa may flounder for the same reason.
That still leaves the de-dollarization camp with a low-hanging fruit, one they can pluck with digital technologies.
When it comes to carrying value across illiquid currency corridors, the dollar is a sturdy mule. That’s a big part of the reason it ends up on one side of the trade in nearly 90% of foreign-exchange trades. Dealers often find it more efficient to use the dollar as the go-between. Funds are first converted into the US currency, and then reconverted into whatever the payee’s bank will accept: euros, yen, Swiss francs or something else. This preferred vehicle-currency status accounts for 40% of the dollar’s $6.6 trillion-per-day turnover.
This is what keeps Brazil’s President Luiz Inacio Lula da Silva awake at night. Bypassing the need for dollars as a middleman is also the vision outlined by Southeast Asian nations’ finance ministers and central bank governors in Bali last year. They want payments transacted in Thailand using an Indonesian app to be directly exchanged between rupiah and baht.
Five central banks in the region — Indonesia, Malaysia, the Philippines, Singapore and Thailand — are seeking to achieve this by syncing their domestic, smartphone-based, instant-payment systems under a protocol known as Nexus. This will solve some of the existing issues related to slow transfers. The hefty fees charged by banks for cross-border transactions will also fall, or at least become more transparent to customers.
However, the problem of foreign-exchange conversion will remain. That’s because the Singapore dollar is the only Southeast Asian currency eligible for settlement by CLS Group Holdings AG. Jointly owned by many of the world’s largest banks, CLS lines up payments so that neither party in a trade is left holding a claim after it has discharged its obligations.
Settlement risk compels banks to set aside capital to cover it. That has a charge. Therefore, for an illiquid bilateral payments corridor in Southeast Asia, both the Singapore dollar and the US dollar — or at least one of them — will still end up as vehicles because they help cut costs. Nexus won’t change this. No matter how hard the BRICS push their rival IOU, the greenback isn’t going away.
One way to edit it out will be to use blockchain technology to eliminate settlement risks. If all countries put their central bank digital currencies, or CBDCs, on a common platform, it would be easy to ensure “atomicity:” Transfers across borders will either succeed in their entirety, or fail altogether. Money won’t get stuck somewhere in the long chain of banks between the sender and the recipient. In payment journeys where the dollar is just a vehicle — and not the origin or the destination — it can be ditched. Tokenization will provide safety to intermediaries.
A multicurrency CBDC network could eliminate a big chunk of the $120 billion-a-year in transaction costs. However, the enormous coordination and trust it will require to first create such a global public good, and then agree on its ownership and governance, makes the idea a non-starter. Especially when the same blockchain technology can be more feasibly employed to preserve the dollar’s exceptionalism.
In a recent experiment with the Singapore central bank, the New York Federal Reserve showed that it could keep the dollar in play even in the blockchain world. A vehicle currency managed to deliver up to 47 payments in one second in an illiquid corridor of two other national units. Distributed ledgers that didn’t share a common technology were able to participate without requiring a central party. What’s more, the Fed didn’t need a retail digital dollar to do this. A wholesale token, available only to banks, was enough.
Experiments like the awkwardly named Project Cedar Phase II x Ubin+ show one thing: The Fed may be taking its time to decide whether to issue a retail CBDC, but it’s not wasting the interlude. The e-CNY, now available via popular WeChat Pay and Alipay wallets to 1 billion retail users, is gaining acceptance at stores within China. Sooner or later, the online yuan will go global.
Should the BRICS nations get serious about a single currency for trade, they may, too, offer a digital version. But why would any of these alternatives get a second look from intermediaries if a wholesale token of the US currency is available to carry the weight of payments across illiquid corridors? The dollar is a mule with very strong legs.
More from Bloomberg Opinion:
- Cash Is Dying But Don't Bury It Yet!: Andy Mukherjee
- The Dollar May Decline, Gradually Not Suddenly: Niall Ferguson
- Lula’s Nostalgia Tour Is a Dead End for Brazil: Eduardo Porter
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. Previously, he worked for Reuters, the Straits Times and Bloomberg News.
More stories like this are available on bloomberg.com/opinion
©2023 Bloomberg L.P. | Forex Trading & Speculation |
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NEW YORK (AP) — When Donald Trump became president in 2017, he handed day-to-day management of his real estate empire to his eldest sons, Donald Jr. and Eric.
Now, as the Trumps fight to keep the family business intact, the brothers are set to testify in the New York civil fraud case that threatens their Trump Organization’s future.
READ MORE: Trump’s relationship with far-right groups under scrutiny during Colorado ‘insurrection’ trial
Donald Trump Jr. is expected to testify Wednesday and Eric Trump on Thursday, kicking off a blockbuster stretch as the trial in New York Attorney General Letitia James’ lawsuit enters its second month.
James, a Democrat, alleges that Donald Trump, his company and top executives, including Eric and Donald Trump Jr., conspired to exaggerate his wealth by billions of dollars on financial statements that were given to banks, insurers and others to secure loans and make deals.
Donald Trump — the former president, family patriarch and 2024 Republican front-runner — is slated to testify Monday, followed by his eldest daughter, ex-Trump Organization executive and White House adviser Ivanka Trump, on Nov. 8. State lawyers are expected to rest their case after that, giving Trump’s lawyers a chance to call their own witnesses.
Donald Trump Jr. and Eric Trump are both executive vice presidents at the Trump Organization and defendants in James’ lawsuit. Eric has oversight over the company’s operations while Donald Trump Jr. has been involved in running the company’s property development. He and longtime company finance chief Allen Weisselberg were also trustees of the revocable trust Trump set up to hold the company’s assets when he became president.
Before the trial, Judge Arthur Engoron ruled that Trump’s financial statements were fraudulent. He ordered that a court-appointed receiver seize control of some of his companies — potentially stripping him and his family of such marquee properties as Trump Tower — though an appeals court has halted enforcement for now.
Like their father, both brothers have denied wrongdoing.
Eric Trump has spent several days at the trial, often on the days his dad has been there. He’s commented sporadically, mostly on social media. On Oct. 5, he posted a video montage to Truth Social of James criticizing his father. With it, he wrote: “this is the corruption my father and our family is fighting! The system is weaponized, broken and disgusting!”
Donald Trump Jr. hasn’t been to court, but since testimony began Oct. 2, he’s repeatedly denounced the case and Engoron as a “kangaroo court.” State law doesn’t allow for juries in this type of lawsuit, so Engoron will decide the case.
“It doesn’t matter what the rules are, it doesn’t matter what the Constitution says, it doesn’t matter what general practices and business would be,” Donald Trump Jr. said Monday on Newsmax. “It doesn’t matter. They have a narrative, they have an end goal, and they’ll do whatever it takes to get there.”
Building to Donald Trump Jr. and Eric Trump’s testimony, state lawyers have asked other witnesses about their role leading the Trump Organization and their involvement, over the years, in valuing their father’s properties and preparing his financial statements. Their names have also appeared on various emails and documents entered into evidence.
David McArdle, an appraiser at commercial real estate firm Cushman & Wakefield, testified that Eric Trump had substantial input on valuing planned-but-never-built townhomes at a Trump-owned golf course in the New York City suburbs. McArdle said Eric Trump arrived at a “more lofty value” than him for the project but that going with the scion’s higher number wouldn’t have been credible.
READ MORE: A federal judge reimposes a limited gag order in Trump’s 2020 election interference case
Donald Trump Jr. and Eric Trump have already been heard from at the trial, albeit in snippets of prior testimony. During opening statements on Oct. 2, state lawyers showed about a minute each from sworn depositions the brothers gave in the case.
In his July 2022 clip, Donald Trump Jr. testified about his scant knowledge of the accounting standards known as Generally Accepted Accounting Principles — which state lawyers say were used at times and disregarded at others in preparing Donald Trump’s financial statements.
Trump Jr., who’s never been an accountant, said he couldn’t recall having to use the GAAP standards in his work. He got a laugh out of a state lawyer when he said he’d learned about them “probably in Accounting 101 at Wharton” but didn’t remember much other than that they were “generally accepted.”
In his March 2023 deposition, Eric Trump testified, “I don’t think I’ve had any involvement in the Statement of Financial Condition, to the best of my knowledge.” He appeared to minimize his role as a top company executive, testifying that he tried to remain “siloed into the things I care and are passionate about” while sharing management responsibilities with his brother.
“I’m a construction, concrete and on-the-ground operations guy,” Eric Trump said, according to a deposition transcript posted on the case docket.
Questioned at another point about decision-making earlier in his career, Eric Trump said: “I pour concrete. I operate properties. I don’t focus on appraisals between a law firm and Cushman. This is just not what I do in my day-to-day responsibilities.”
Donald Trump attended the trial’s first three days in early October and showed up again for four days in the past two weeks, but his campaign schedule suggests it’s unlikely he’ll return to see his sons testify.
In his past appearances, Trump groused to TV cameras outside court, calling the case a “sham,” a “scam,” and “a continuation of the single greatest witch hunt of all time.” He also angered the judge twice, incurring $15,000 in fines for violating a limited gag order with comments about a member of the court staff.
Associated Press writer Jennifer Peltz contributed to this report.
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There are a few ways one could report the latest economic growth forecasts from the International Monetary Fund (IMF).
The first way is to declare that Britain's economy is heading for the buffers.
Its economy will grow next year at the slowest rate in the G7 group of leading industrialised economies (0.6%). This is considerably lower than, say, the 1.2% growth expected in the euro area or the 1.5% expected in the US.
And this is probably the way many outlets will report the numbers this morning.
The IMF's World Economic Outlook, published every six months by the Washington-based institution, is arguably the single most important international economic forecast out there. Who could doubt it?
But it turns out there are a couple of question marks about the IMF's latest UK growth forecasts.
The most important one is buried away in a paragraph about interest rates: "The Federal Reserve's policy rate is expected to peak at its current level of about 5.4%, the Bank of England to raise its to peak at about 6%."
There's an issue here, beyond the grammar. While it was certainly true that a few months ago UK interest rates were indeed expected to peak at around 6%, that hasn't been the case for some time.
Today, after a run of lower-than-expected inflation data, the betting in financial markets is that the Bank rate has already peaked at 5.25%.
The difference between 5.25% and 6% interest rates is, in economic terms, rather a lot.
Those higher rates would mean considerably more pressure on those with mortgages, more pain in the high street, more saving, less spending and, all told, a weaker economy.
Working out precisely how much weaker is no mean feat, but assuming 5.25% interest rates instead of 6% could quite plausibly add 0.1 or 0.2 percentage points to the UK's growth rate next year.
That in turn would mean the UK was no longer the weakest economy in the G7, with that unhappy distinction going instead to Italy.
So, the second way to report these numbers is to put a mighty big asterisk next to the UK number and to warn that the number is not altogether reliable because it doesn't reflect the current picture for interest rates.
Indeed, according to a well-placed source, the interest rate expectations baked into the IMF's forecasts date from all the way back in August.
While the IMF failed to respond to queries from Sky News about this detail of its forecasts, its chief economist later told a press conference that while its report cited expectations that UK rates would rise to 6%, its actual forecasts were based on a peak of 5.5%. While this would have a bearing on the forecasts, it would be smaller than an expectation that rates would hit 6%.
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This isn't the only reason to be a bit sceptical about the scale of the IMF's downgrade of the UK economy in this latest report. It acknowledges too that its forecasts don't incorporate the latest set of revisions of the economy from the Office for National Statistics - upwards revisions which completely changed the complexion of Britain's post-pandemic economic path.
This is less likely to have as much of an impact on the year-on-year growth figures as the path of interest rates, but all the same, it adds to the sense that we should take these figures with a fair few grains of salt.
Even so - even when you've taken these issues into account - there is another, better way one could describe the outlook for the UK economy: not good. It may not be the weakest in the G7, but it's still barely growing. And nor, for that matter, are many European economies.
The reality is that the outlook for the global economy is disappointing.
Global growth is expected to be well below typical speeds this year and next. China's economy is facing serious trauma in the face of a property slump. While the US economy is doing far better than many had predicted, its expansion rate is, by American standards, disappointing.
Britain, in short, is not doing well. But, contrary to the impression you might get from glancing at the IMF's numbers, it is far from an outlier. | United Kingdom Business & Economics |
Markets are underestimating how persistent inflation will be in the next year and interest rates are likely to remain high as a result, the governor of the Bank of England has said.
Andrew Bailey told MPs that Bank rate is likely to be kept at an elevated level for a "significant" period in order to bring down inflation further following last week's fall.
Mr Bailey told the Treasury select committee that despite inflation having passed the government's target of halving this year, domestic "second-round" impacts mean the "last mile will be the hardest" as the Bank focuses on its mandate to return inflation to the 2% target.
"I really think the market is putting too much weight on the current data releases and the fact that we've seen inflation come down quite rapidly, that's good news obviously," he said.
"We are concerned about the potential persistence of inflation as we go through the remainder of the journey down to 2% and I think the market is underestimating that."
The governor said last week's abrupt fall from 6.8% was the result of elevated energy prices falling out of the annual inflation calculation, but there were no more large "base effects" left to drop out of the figures.
"It [the fall] was obviously good news - it was largely news that we expected," he said.
"As we set out in the Monetary Policy Report, we expect a little bit more of what I would call this unwinding of last year's external shocks to come through. We're not going to get another one like last week though; that's the last of those base effects to come through."
Speaking 24 hours ahead of the chancellor's autumn statement, Mr Bailey refused to be drawn on whether Prime Minister Rishi Sunak had played any role in cutting inflation from January's peak of more than 11%, or whether tax rises of any kind could be considered inflationary.
The Bank's most recent forecast is that inflation will fall to 3% next year and return to the 2% target in 2025.
Mr Bailey said food price inflation should fall further by the end of the first quarter of next year, but that consumers were still feeling the impact of the Ukraine war in weekly grocery shopping.
He said anxiety about the cost and availability of key inputs like fertiliser meant farmers had "locked in higher prices" by agreeing higher prices on long-term supply deals that were yet to fall away.
Deputy governor Dave Ramsden told MPs constraints on the supply side of the economy were effectively a "speed limit" on growth despite quite resilient demand.
Wage inflation, currently above 7%, was a key factor particularly in the services sector, which accounts for close to half of inflation, and where pay accounts for 60% of costs.
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He also pointed to the relative lack of business investment in the UK economy since the Brexit referendum in the summer of 2016.
"Business investment is 6% higher than in the second quarter of 2016, before the Brexit referendum, that's an average of less than 1% a year. In that time US business investment has gone up 25%."
In spiky exchanges with MP's Mr Bailey also denied the central bank had been "behind the curve" in addressing inflation.
"We were the first major central bank to raise rates, so that is not true," he said. | Inflation |
(Bloomberg) -- SoftBank Group Corp.’s mobile unit is buying an Irish company that specializes in broadband for cars, placing a bet on smart and driverless vehicle technology in its biggest overseas acquisition since listing.
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SoftBank Corp. will pay €473 million ($513 million) for 51% of Dublin-based Cubic Telecom Ltd., the companies said in a statement. The transaction values privately-held Cubic at more than 900 million euros and is expected to close during the first half of next year, subject to regulatory approvals.
Web connectivity is one of the key technologies required in self-driving cars, an area of focus for Masayoshi Son. This year, SoftBank Group Corp. inked a deal to invest $280 million into Mapbox Inc., a creator of AI-powered maps and navigation software. SoftBank is also expected to invest an estimated $1 billion into Stack AV, an autonomous trucking startup.
Cubic provides connections to about 17 million vehicles in over 190 countries. That translates to roughly 10% of the global market for connected cars excluding China, according to the Irish firm. It is adding 450,000 new vehicles each month, a pace that’s expected to pick up to 700,000 in 2025. It didn’t disclose financial details including profitability.
Read More: SoftBank’s Son Edges Back Into Dealmaking With a Bet on Autonomy
The two companies plan to use the tie-up to accelerate their global expansion by leveraging SoftBank’s wide satellite coverage and Cubic’s expertise in autos. The market of connected cars is forecast to generate billions of dollars of revenue by 2030, with about 95% of new vehicles coming with web-connectivity, the two firms said, citing research by McKinsey.
Powering cars with internet entails complex technical integrations and layers of regulatory approvals and compliance requirements, according to Cubic. SoftBank’s acquisition should help Cubic double or even triple its current market share, the Irish company said.
“The focus on software rather than hardware means manufacturers can increase the value of a vehicle or device by adding new functionality, over-the-air, which will improve safety, comfort and performance,” said Barry Napier, who will retain his post as Cubic’s CEO. “The opportunities ahead of us are endless.”
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Asia Business & Economics |
When the public finances are in a tight spot, the axe often falls first on capital spending. This is government spending on buildings and facilities, not on, for example, wages and day-to-day services.
The political rationale is that it takes time, often years, to see the material impact of a squeeze on capital sending. It kicks cans down the road. But are capital spending cuts in education during the austerity years to blame for the current schools concrete crisis?
What is clear is that, overall, investment spending of all kinds has been squeezed over the last decade. Under the last Labour government, capital spending as a proportion of the size of the economy, or GDP, rose from 0.3% in 1997 to 3% in 2010. Since then, however, it has fallen back to an average of 2% where it is set to remain.
This issue is being made worse by inflation - the rate at which prices rise - which has soared and remains stubbornly high. The chancellor said on Sunday that "one of his first decisions" while he was trying to shore up the public finances last year was to protect cash spending on capital, in other words maintain it at current levels.
But accounting for inflation, it means significant real-terms cuts are coming. Indeed the Treasury's own documents forecast an average cut from departmental capital budgets of about £10bn from 2025-2028.
For schools the situation is even tougher, because since 2010 education has received a lower proportion of capital spending as money is directed elsewhere.
In 2005, for example, one in every eight pounds of capital expenditure went on education. Over the past three years it has been one in every £20. The inflation-adjusted education capital budget fell by 50% from its peak between 2010 and 2022.
The Conservatives inherited just under £10bn a year in education capital sending in 2010, and have spent £5-6bn a year since then, in real terms. Part of those savings came from scrapping the Building Schools for the Future (BSF) project in 2010, which aimed to rebuild and refurbish every secondary school in England.
In the 2010 Spending Review, which set out the government's priorities, 60% cuts to education capital spending were very clearly signalled. Indeed, this planned £4bn fall in education spending was the biggest single departmental contributor to the Coalition's austerity savings in the overall capital budget from 2010 to 2015. That document claimed "the decision to end BSF will allow new capital to be focused on meeting demographic pressures and addressing maintenance needs".
What has actually happened since then, is that government capital spending has been focussed on hospitals, transport, energy and science, and away from schools and housing. Indeed over 20 years health will have roughly swapped places with education as home for one in eight pounds of investment. This is a tangible reflection of differing political priorities - "education, education, education" for the Blair-Brown Labour administrations, and reducing borrowing while protecting the NHS for the post-2010 Conservatives.
'Critical risk'
On the BBC's Today programme on Monday, former top education civil servant Jonathan Slater said the government cut the schools' repair budget in 2021 despite a warning of a "critical risk to life" from crumbling concrete. This was when Rishi Sunak was chancellor. In 2019, the Office of Government Property calculated that in order to bring the schools estate to best practice, partly because of the concrete issue, £7bn a year in funding was required.
Mr Slater also suggested that ministers preferred to spend money on opening shiny new schools with opportunities for photos in hard hats, than the more routine job of ensuring the existing stock of school buildings were up to date.
However, the prime minister said it was "utterly and completely wrong" to blame him for failing to fund the programme.
Nevertheless, decisions over how capital spending budgets should be allocated raise significant questions for the current government and whoever wins the next election.
At times, capital investment has been exempted from the government's rules on borrowing. Governments have said it is fine to borrow money to invest in the future. But in recent years, self-imposed limits on government debt levels have directly affected capital spending decisions for the long term.
Is health gobbling up the capital budget to the exclusion of neglected schools? How does Westminster prioritise the sometimes crumbling fabric of public services?
The design life of concrete systems in post-war schools was 30-40 years. There is now a pressing requirement to replace, presumably, all of it which this government or the next will have to meet. This post-dated cheque is coming due at a time when capital budgets are being squeezed again. But the problem cannot wait until after the general election. | Inflation |
Sir Keir Starmer has refused to guarantee the tax burden - currently the largest since the Second World War - would not increase under Labour.
While the opposition leader told Sky News' Sunday Morning With Trevor Phillips programme he wanted it to come down "for working people", his "laser focus" was on growing the economy.
Sir Keir, along with shadow chancellor Rachel Reeves, have sought to stress the party's plans for fiscal prudence in the face of difficult economic conditions.
In the exclusive interview, he also dismissed Conserative Party claims about Labour's immigration plans as "complete garbage" - after the Tories argued the Opposition's proposals would increase asylum seeker numbers.
Pressed over the tax burden, Sir Keir declined to give an assurance it would reduce under a Labour government.
He said: "I want it to come down for working people.
"But also, I'm absolutely focused on growing the economy.
"If the economy in the last 13 years had grown at the same rate as the last Labour government, we'd have tens of billions of pounds to spend on our public services without raising a penny more in tax.
"And that's where I want that laser focus."
Read more:
How Labour are preparing Starmer for power
'Sense of humour failure' over 'Beach Ken' comparison
Labour rejects '1990s tribute act' criticism
'The government has been pumping out complete garbage'
Sir Keir also rejected accusations levelled by Prime Minister Rishi Sunak and Home Secretary Suella Braverman that Labour was planning to let the UK become a "dumping ground" for 100,000 migrants from the EU each year.
The political row flared after the Labour leader indicated he could be prepared to do a deal with Brussels which would involve the UK taking a quota of asylum seekers who arrive in the bloc in exchange for the ability to return people who cross the English Channel.
Labour has proposed speeding up data and intelligence sharing with Europe as part of a new post-Brexit security pact and strengthening powers to restrict the movement of those suspected of organised immigration crime.
Speaking to Sunday Morning With Trevor Phillips on Sky News, Sir Keir called Conservative claims about his plans "complete nonsense".
He said: "Let me be absolutely crystal clear about this, because the government has been pumping out complete garbage this week in terms of the numbers that they are suggesting.
"There is obviously an EU quota system for EU members. Well, it's obvious we are not an EU member.
"We will not be part of that. We are not an EU member. This is why what the government's saying, it's been complete garbage.
"And even that scheme within the EU is not working.
"I've been discussing that with EU leaders up here.
"That scheme itself isn't really working very well.
"So the idea that we're going to join the EU scheme on quotas is complete nonsense.
"We're not an EU member and that wasn't what I was talking about."
The opposition leader also brushed off Commons Leader Penny Mordaunt's Barbie-based jibe that - like Beach Ken - Sir Keir has "zero balls".
"I just think when a government has completely run out of energy and ideas and the ability to shape or change anything, they go down this rabbit hole of ridiculous insults.
"It's water off a duck's back to me," he said. | United Kingdom Business & Economics |
The Federal Communications Commission is paving the way for $75 monthly subsidies to make broadband service more affordable for low-income households in certain "high-cost" areas.
The $75 subsidy will be part of the Affordable Connectivity Program (ACP) that generally offers $30 monthly discounts to people with low incomes. The ACP was created by Congress in late 2021 and implemented by the FCC to replace a previous pandemic-related subsidy program.
The ACP already provides $75 monthly subsidies for homes on tribal lands, but not in other areas. The US law that created the ACP lets the FCC make $75 subsidies available in areas where the costs of building broadband networks are higher than average.
That's what the FCC did in its action announced yesterday. "The Infrastructure Act specified that the $75 monthly benefit would support providers that can demonstrate that the standard $30 monthly benefit would cause them to experience 'particularized economic hardship' such that they would be unable to maintain part or all of their broadband network in a high-cost area," the FCC said.
ACP subsidies are distributed to Internet service providers that enroll in the program and give customers discounts. Comcast, Charter Spectrum, AT&T, Verizon, and other ISPs last year agreed to make $30 plans with download speeds of at least 100Mbps available to eligible low-income households, essentially making the Internet service free when the $30 subsidy is applied.
19.8 million households so far
ISPs that accept ACP subsidies must let customers use them on any plan—a provision designed to prevent the kind of upselling that took place under the pandemic subsidy program. That doesn't mean getting the subsidy is easy, as some people with low incomes have been wrongly rejected by ISPs such as Comcast.
FCC Chairwoman Jessica Rosenworcel said yesterday that over 19.8 million low-income households are getting ACP discounts, including 2.8 million households in rural counties. Rural low-income households are signing up at a higher rate than urban ones, she said.
The FCC is hoping that $75 subsidies will expand the program's reach to more rural and/or low-income areas. The law defines high-cost areas as those "in which the cost of building out broadband service is higher, as compared with the average cost of building out broadband service in unserved areas in the United States." | Consumer & Retail |
Sir Keir Starmer has refused to commit to further spending under a Labour government amid growing calls from unions, including the party’s biggest donor, for him to back more of their policy priorities.
The Labour leader reaffirmed his defence of the party’s focus on economic responsibility but said it will not hinder “bold and reforming” policies.
Touring broadcast studios on Sunday, Sir Keir confirmed that he would not change the Conservatives’ two-child benefit cap and said he would wait until closer to the general election to announce Labour’s approach to housing allowance, which has been frozen since 2020.
Pressed on whether Labour would spend more in power, he told the BBC’s Sunday with Laura Kuenssberg programme: “A Labour government always will invest in our public services.”
Asked whether he is relaxed about being called a “fiscal conservative”, he replied: “I don’t mind what label people put on me. I do want to make my argument.
“My argument is this: What was absolutely plain from last year’s mini-budget is if you lose control of the economy it’s working people who pay.”
It came as general secretary of the Rail, Maritime and Transport (RMT) union Mick Lynch said people cannot “spot the difference” between the two main parties anymore.
“He (Sir Keir) won’t dare mention the word ‘socialism’,” he told Sky News’ Sophy Ridge on Sunday.
“I want to hear that word mentioned frequently, and I want to see a redistribution of wealth in our society, because there are a lot of very wealthy people and there are too many very poor people.
“And now people in the middle are being squeezed as well, with rents and mortgages skyrocketing. He doesn’t seem to be on the side of the people of this country.”
Labour also faced pressure over the weekend from Sharon Graham, head of Unite, who warned there will be “no blank cheque” for the party and urged it to be “bolder”.
The union, which is the UK’s second largest and Labour’s biggest financial backer, wants renationalisation of steel and energy companies to be near the top of the party’s priority list, the BBC reported.
Sir Keir has been emphatic about prioritising “financial responsibility” over reckless spending as Labour seeks to reassure voters it can manage the economy.
But he said on Sunday that this would not prevent the party from introducing bold reforms, including to the planning system.
“I’m not going to put an arbitrary figure on it but we need hundreds of thousands of more houses. I won’t shy away from it,” he told the BBC.
In an effort to distance the party from environmental campaign group Just Stop Oil, with which it shares a mutual donor, Sir Keir also denied that officials had met representatives.
He branded reports that Labour is engaging with the activists “nonsense”, adding: “There’s a right to protest but it’s not an absolute right.” | United Kingdom Business & Economics |
Justin Sullivan/Getty Images
toggle caption
The increase in food insecurity in 2022 reverses a decade-long decline in the number of U.S. households experiencing hunger.
Justin Sullivan/Getty Images
The increase in food insecurity in 2022 reverses a decade-long decline in the number of U.S. households experiencing hunger.
Justin Sullivan/Getty Images
Just putting three meals a day on the table was a struggle for millions of people in the U.S. last year. That's the sobering conclusion of a new report from the U.S. Department of Agriculture, which found hunger in the U.S. rose sharply in 2022.
The report found that 44.2 million people lived in households that had difficulty getting enough food to feed everyone in 2022, up from 33.8 million people the year prior. Those families include more than 13 million children experiencing food insecurity, a jump of nearly 45 percent from 2021.
"These numbers are more than statistics. They paint a picture of just how many Americans faced the heartbreaking challenge last year of struggling to meet a basic need for themselves and their children," U.S. Secretary of Agriculture Tom Vilsack said in a statement.
The findings reverse a decade-long decline in hunger and food insecurity in the U.S. And they reflect the loss of several pandemic-era measures designed to strengthen the social safety net, says Elaine Waxman, a senior fellow at the Urban Institute who studies food insecurity and federal nutrition programs.
"A lot of the programs that had buffered people's experience during the pandemic were retired or rolled back in some way," Waxman says.
Those programs included an expanded child tax credit that gave families with children extra money each month, temporarily increased benefits from the Supplemental Nutrition Assistance Program, or SNAP – formerly known as food stamps – and free school meals for every child.
At the same time, food prices and housing costs have shot up, says Kelly Horton, chief program officer at the Food Research and Action Center. And she points out an increasing number of Americans are working in unstable gig-economy jobs, like delivering groceries, driving for ride-share services or completing tasks on demand.
" So all of these things converging...we have a lot of people who are living on the edge," Horton says.
In its report, the USDA found that nearly 7 million households were so financially squeezed last year that they had to skip meals at times because there wasn't enough food to go around. Almost all of these households said they couldn't afford to eat balanced meals. In some 381,000 households with children, kids also experienced the pangs of hunger – skipping meals or going the whole day without eating. Waxman notes this could have significant health consequences, especially for kids.
"In particular, we worry about that for children because their trajectory now influences what happens to them later," says Waxman. She notes research has found children who experience food insecurity are more likely to experience worse health outcomes down the road, including cognitive or developmental delays and higher rates of hospitalization.
Overall, households with children and those of color experienced food insecurity at significantly higher rates than the national average. The rates of hunger for Black and Latino households were both more than double the rates for white households.
Food access advocates say the findings underscore the importance of protecting social safety-net programs. Right now, there's particular concern when it comes to the fate of the food assistance program known as WIC, which serves pregnant mothers and young children up to age 5.
Since the pandemic-era increases to SNAP benefits ended, more families have been turning to WIC for help with food, says Nell Menefee-Libey, public policy manager at the National WIC Association.
"We know that more families are turning to the program and find themselves needing support from WIC who may previously have not been using WIC services," Menefee-Libey says.
But some lawmakers have proposed funding cuts to WIC benefits, even as the program needs additional funding to serve the increased number of families that are seeking assistance, says Horton of FRAC.
"So there could be a case where WIC runs out of money if Congress does not give them additional funds," Horton says. | Inflation |
MPC Minutes: Members Remain Wary Of Inflation Concerns
"Our job is only half done, having brought inflation within the target band," said RBI Governor Shaktikanta Das.
India's Monetary Policy Committee decided to keep the benchmark repo rate unchanged for the second straight meeting earlier in June, even as it emphasised the need to bring inflation closer to the target of 4%.
Minutes of the committee's meeting indicate that members of the committee remain wary of inflation as they expect the pace of price rise to pick up in the coming months.
Job Only Half-Done, Says Shaktikanta Das
"Our job is only half done, having brought inflation within the target band," said RBI Governor Shaktikanta Das. "Our fight against inflation is not yet over," he said. "We need to undertake forward-looking assessment of the evolving inflation-growth outlook and stand ready to act, if situation so warrants."
"Beyond this and given the prevailing uncertainties, it is difficult to give any definitive forward guidance about our future course of action in a rate tightening cycle," he said.
The MPC will continue to remain agile and flexible in managing liquidity through two-way operations, he said, adding that durable price and financial stability are mutually reinforcing and necessitate greater policy focus at the current juncture.
Taking A Middle Stump Guard: Patra
The near-term outlook for inflation is also relatively benign vis-a-vis the 2022-23 experience, said Deputy Governor Michael Patra.
However, beyond the first quarter, pressure points emanating from specific supply-demand mismatches could impart upward pressure to the momentum of prices and offset favourable base effects, especially in the second half of 2023-24, he cautioned. "Hence, monetary policy needs to remain in ‘brace’ mode, ensuring that the effects of these shocks dissipate without leaving scars on the economy."
"My vote for maintaining status quo on the policy rate should be seen as taking middle stump guard, to prepare for a bouncier pitch," Patra reaffirmed.
Holding the rate unchanged should not be interpreted as the interest rate cycle having peaked, but as a period of careful evaluation of a decision on the extent of additional policy tightening if needed, he said.
This is part of continuous learning about the underlying structure of the economy with new information until the next meeting of the MPC, and not a prolonged pause, Patra said.
Headline inflation is edging down towards the target, but it is still well above it and the balance of risks suggests that it will go up in coming months before it comes down, the deputy governor said. "Therefore, continuing with the stance of withdrawal of accommodation is appropriate, as it adequately conveys the future course of interest rates in the economy."
Stance Shows Disconnect From Reality: Jayanth Varma
"I am of the view that the current level of the repo rate is high enough to keep inflation below the upper tolerance band on a sustained basis and also glide it towards the middle of the band," said MPC member Jayanth R. Varma.
However, there are significant risks to both inflation and growth, and the process of bringing inflation under control is still very much work-in-progress, he said. It would be premature to declare victory at this point of time, based on the inflation prints of just a couple of months.
"In this context, I am not at all comfortable with the self-congratulatory tone of ... the Monetary Policy Statement that the MPC took note of the moderation in CPI headline inflation in March-April into the tolerance band," Varma said.
"Turning to the stance, I find that with every successive meeting, this stance is becoming more and more disconnected from reality," he said.
Based on the inflation forecast of 5.1% for 2023-24, the real repo rate is now almost 1.5%, he said. In other words, the monetary policy is now dangerously close to levels at which it can inflict significant damage to the economy, according to him.
Despite this, the majority of the MPC wishes to remain focused on withdrawal of accommodation, "whatever that phrase might mean," he said. "I have therefore seriously considered dissenting on this part of the resolution, but after careful thought I have decided to confine myself to expressing reservations on it."
"The main reason for not dissenting is that, after two successive meetings at which the repo rate has been left unchanged, this stance now appears more vestigial than a serious statement of intent," Varma said.
RBI Executive Director Rajiv Ranjan said that continuity in the stance with a clear-cut objective of aligning inflation to the 4% target is important. Any premature change in stance may be hasty and could undo the hard work done so far, he explained, saying that it may also tamper with the transmission process that is currently underway. | Inflation |
- Deflation could be coming, Walmart CEO Doug McMillon said.
- Prices have fallen, especially on general merchandise and on some key grocery items, he said.
- Yet the discounter struck a cautious tone, saying customers continue to watch their spending.
Shoppers may get an early present this holiday season: Falling prices in many gift-giving categories.
On Thursday, Walmart CEO Doug McMillon said deflation could be coming as general merchandise and key grocery items, such as eggs, chicken and seafood get cheaper.
He said the retailer expects some of the stickier higher prices, such as the ones for pantry staples, to "start to deflate in the coming weeks and months," too.
"In the U.S., we may be managing through a period of deflation in the months to come," he said on the company's Thursday earnings call." "And while that would put more unit pressure on us, we welcome it, because it's better for our customers."
For more than a year, consumers have coped with inflation that peaked around four-decade highs and drove up the cost of nearly everything, including groceries, rent and utilities. But McMillon's comments echoed what the government and other retailers said earlier this week, offering signs of relief for inflation-weary consumers.
Inflation was flat month-over-month, according to the latest consumer price index report from the Labor Department on Tuesday. Core CPI, a metric that excludes the categories of food and energy that tend to be volatile, hit a two-year low. Home Depot CFO Richard McPhail said "the worst of the inflationary environment is behind us" on an earnings call on Tuesday.
Even Thanksgiving will be lighter on Americans' wallets compared to last year. Lower turkey prices mean that the average cost of a dinner for 10 people will be $61.17, down 4.5% from last year's record of $64.05, according to the American Farm Bureau Federation.
Stubborn inflation has been one of the biggest challenges for retailers, including Walmart, the world's largest retailer. It felt pressure from that again in the fiscal third-quarter, even as it beat Wall Street's sales and earnings expectations. Chief Financial Officer John David Rainey told CNBC that shoppers have waited for items to go on sale before buying them, such as holding out for a Black Friday event.
There's still some time to go before inflation completely eases, however. Across most categories, Americans are still spending more on the same items, according to the latest CPI numbers. Food at home, electricity and haircuts cost more than they did a year ago.
At Walmart, groceries are up by a mid single-digit percentage compared to last year, but still elevated by the high-teens percentage compared to two years ago, Rainey said.
Walmart's McMillon said some stubborn food prices continue to be a concern.
"The pockets of disinflation we are seeing are helping, but we like to see more, faster," he said. | Inflation |
Brookfield Raises $26 Billion On Oaktree, Infra Fund Boost
Brookfield Asset Management raised $26 billion in the third quarter and said it’s on track to bring in close to $150 billion in fresh capital this year, despite a tough fundraising environment.
(Bloomberg) -- Brookfield Asset Management raised $26 billion in the third quarter and said it’s on track to bring in close to $150 billion in fresh capital this year, despite a tough fundraising environment.
“2023 is shaping up to be an excellent year for capital raising, which sets the stage next year for excellent earnings and dividend growth,” President Connor Teskey said in a statement Monday. About $11 billion came into the funds of Oaktree Capital.
The Toronto-based alternative asset manager posted distributable earnings of $568 million in the quarter, up 8% from the prior year, according to the statement.
Fee-bearing capital, a measure of the amount from which the firm is entitled to earn fee revenue, was $440 billion at the end of September, the same as three months earlier. It has a goal of getting to $1 trillion by 2028.
The firm, which handles about $850 billion of assets including those of its parent, Brookfield Corp., has been one of the world’s most active investment firms this year, even as many of its peers have remained on the sidelines in a quiet spell for mergers and acquisitions.
Brookfield has raised $61 billion since the beginning of the year, Teskey said, giving it $102 billion of dry powder available to deploy.
During the quarter, Brookfield closed its third infrastructure debt fund at more than $6 billion; it also expects the size of its latest flagship infrastructure fund to exceed $27 billion. The Canadian firm also held a final close for its sixth flagship private equity fund at $12 billion.
Read More: Origin’s Top Investor Lifts Stake After Rebuffing Brookfield
Its most recent deals include an agreement to buy most of the assets of bankrupt data center firm Cyxtera Technologies Inc. for $775 million and Dubai-based credit card processor Network International Holdings Plc for about £2.2 billion ($2.7 billion).
But Brookfield’s efforts to buy Origin Energy Ltd. hit a snag after top shareholder AustralianSuper rejected the offer.
Brookfield expects a busy period of deal activity as markets regain confidence and liquidity starts to return, according to a letter to shareholders from Chief Executive Officer Bruce Flatt and Teskey. Interest rates are “peaking, and this is good for transaction activity,” they said.
“Economic activity has been resilient and labor markets have remained tight, particularly in the United States,” Flatt and Teskey wrote.
The firm’s $150 billion target for 2023 fundraising includes money it expects to manage for American Equity Investment Life Holding Co., which Brookfield Reinsurance is in the process of acquiring.
(Updates with additional information from the shareholder letter toward the end of the story.)
©2023 Bloomberg L.P. | Banking & Finance |
President Biden on Friday rolled out a new set of initiatives to reduce health care costs: a crackdown on scam insurance plans, new guidance to prevent surprise medical bills and an effort to reducetied to credit cards.
Mr. Biden's remarks will build on previous initiatives to limit health care costs, with the Department of Health and Human Services releasing new estimates showing 18.7 million older adults and other Medicare beneficiaries will save an estimated $400 per year in prescription drug costs in 2025 because of the president placing a cap on out-of-pocket spending as part of last year's Inflation Reduction Act.
Gearing up for his 2024 reelection campaign as inflation remains a dominant concern for voters, the Democratic president has emphasized his policies to help families manage their expenses, as well as a spate of government incentives to encourage private sector development of electric vehicles, clean energy and advanced computer chips.
Republican lawmakers have criticized Mr. Biden's policies by saying they have spurred higher prices that hurt the well-being of families.
The Biden administration plans to limit what it calls "junk" insurance plans, such as short-term policies that can deny basic coverage as people transition between employers and still need temporary health care coverage.
Neera Tanden, director of the White House Domestic Policy Council, highlighted the case of a man in Montana who received a $43,000 health care bill because his insurer said his cancer was a pre-existing condition.
"That's not real insurance — that's junk insurance," Tanden told reporters on a phone call previewing the president's remarks. "We will propose a rule to crack down on these plans."
The president also announced new guidance on medical billing stemming from 2020's No Surprises Act. The guidance would limit the ability of insurers that contract with hospitals to claim provided care was not in network and have customers pay more money. Health plans also would need to disclose facility fees that are increasingly charged to patients and can surface as an unexpected cost in a medical bill.
"Frankly, what they are doing is gaming the system — this is not allowed," Tanden said.
The Consumer Financial Protection Bureau and Treasury Department also are seeking information on third-party credit cards and loans that are specifically used to pay for health care. The higher costs and interest charges can discourage people in need of treatment from seeking care.
The president is expected to also highlight previous efforts to reduce health care costs, including a plan allowing Medicare to negotiate lower prices for prescription drugs and a $35 monthly price cap on insulin for people in Medicare Part B.
for more features. | Inflation |
Tributes have poured in for veteran investor Warren Buffett's trusted confidante Charlie Munger who has died at the age of 99.
"Berkshire Hathaway could not have been built to its present status without Charlie's inspiration, wisdom and participation," said Mr Buffett.
Munger, who would have turned 100 on 1 January, had been a vice chairman at Berkshire since 1978.
The company has said he died peacefully at a hospital in California.
Mr Buffett has built Berkshire Hathaway from a failing textile maker into a investment juggernaut which has a stock market valuation of $785bn (£618bn).
Munger worked closely with Mr Buffett on allocating its capital and he was known not to mince words when he thought his business partner was making a mistake.
Apple's boss, Tim Cook, described Munger as "a titan of business and keen observer of the world around him" who has "helped build an American institution" in his post on X, formerly Twitter.
Berkshire owns hundreds of billions of dollars of stocks in various companies, led by Apple.
Munger had been credited with steering Mr Buffett away from buying what they called "cigar butts" - mediocre companies that had a puff of smoke left and could be bought for very cheap prices.
"Charlie Munger was a legendary figure in the investment community," said Brian Moynihan, the CEO of Bank of America, adding that "there are many who benefited greatly from his wisdom".
In early 2023 Munger's fortune was estimated at $2.3bn, vastly smaller than Mr Buffett's fortune which is estimated at more than $100bn.
Munger's passing comes one week after Mr Buffett donated about $866m of Berkshire stock to four family charities.
At the time, Mr Buffett also issued a rare letter in which he acknowledged that at the age of 93, whilst he has not signalled a desire to step down, that he is "playing in extra innings".
Berkshire has two other chairmen, Greg Abel and Ajit Jain, who oversee its day-to-day businesses and Mr Abel was named by Mr Buffett as his successor in 2021.
Munger was known for his colourful quotes which often contained swear words but shareholders who gathered at Berkshire's annual gathering enjoyed his candid comments which they will be missing at the next meeting in May. | Stocks Trading & Speculation |
Stripe wants to make it easier for businesses to access credit.
The private financial infrastructure giant announced a new charge card program today from Stripe Issuing, its commercial card issuing product, Denise Ho, head of product for BaaS at Stripe, told TechCrunch exclusively.
The company originally launched its Issuing product in 2018 and since then, it’s helped companies such as Shopify and Ramp issue more than 100 million cards in the U.S., the United Kingdom and the European Union. The product is today one of Stripe’s fastest-growing, Ho said – supporting half a million transactions a day. Fintechs like Klarna “build entire businesses on it,” the company claims.
Previously, Stripe-issued cards could only be used to spend money from a prefunded account. Its expansion into charge cards, according to Ho, will companies the ability to create and distribute virtual or physical charge cards that allow their customers to spend on credit rather than using the funds in their accounts.
“Among our suite of products, Issuing has been doing really, really well,” Ho told TechCrunch. “And the No. 1 top demand within issuing has been the ability for Stripe to enable our platforms to offer credit to their users.”
This has a twofold benefit for Stripe – giving it a new revenue stream as well as the option to offer new financing capabilities to their customers “with little additional operational cost,” Stripe touts. (Operational efficiency is in vogue, after all.)
For example, platforms that use Stripe Connect offering can white label products from Stripe and provide a range of embedded financial services, such as financial accounts, working capital loans and now charge cards as well, Ho said.
Further, she added, Stripe Issuing provides the core components of a charge card program — such as funds flows, network connections, printing, and integration APIs — and then aims to “streamline” all the necessary compliance, bank partnerships and ledgering.
Ramp, Emburse, Karat and Coast are among the current users of the charge card program, which is available in beta in the US. In the coming months, Stripe will launch charge card programs in the EU and the UK.
“In the U.S., the banks are the ones that have been our sponsor … and that’s regulated,” Ho explained. “And because you’re letting the small businesses spend, that is a form of lending so that lending compliance has to come from the bank.”
For its part, she said Stripe is partnering with startups to help guide them through the process and help provide the necessary compliance and risk oversight so that they don’t get in over their heads.
When it comes to underwriting, Ho said that Stripe has received feedback that its clients ultimately want to own the underwriting decision.
“What we do is we help them put together the set of policies and ensure that these policies are actually compliant,” she said. “So we offer both sort of flexibility and the control but with guardrails.”
Over time, Ho said its clients may want “more modules” to do their own underwriting so that’s something Stripe will work on over time as it matures its offering.
Anyone can sign up for the new program, she said, even if they are not an existing Stripe user.
For its part, Stripe will make money off of interchange fees so as customers’ volume grows and users spend more, Stripe will earn more. There will also be compliance fees associated with the program.
On May 31, TechCrunch reported exclusively on Stripe’s acquisition of Okay, a startup that developed a low-code analytics software to help engineering leaders better understand how their teams are performing.
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Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at [email protected]. Or you can drop us a note at [email protected]. Happy to respect anonymity requests. | Banking & Finance |
JK Lakshmi Cement Q2 Results Review - Better Quarter; Profitability To Improve: Dolat Capital
JK Lakshmi Cement reported numbers in line with our estimates.
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.
Dolat Capital Report
JK Lakshmi Cement Ltd. reported numbers in line with our estimates. The company on consolidated basis posted +14.6%/ -9% YoY/ QoQ growth in revenue to Rs 15.7 billion led by +13.8% YoY/ -10.2% QoQ growth in volume to 2.9 million tonne coupled with +0.7% YoY/ +1.3% QoQ in realisation/tonne to Rs 5,471.
Ebitda/adjusted profit after tax reported sharp growth of +32.5%/ 51.8% YoY to Rs 2.2 billion/ Rs 927 million.
Outlook and Valuation
JK Lakshmi Cement commissioned 1.5 million tonnes per annum clinker at its subsidiary Udaipur Cement Works Ltd. in October 2023; 2.5 mtpa grinding unit expected to start by March-April 2024 (versus earlier guidance of Q2 FY25) to capture growth in demand.
JK Lakshmi Cement has also announced 1.35 mtpa brownfield grinding unit expansion at Surat, Gujarat with capex of Rs 2.3 billion which is expected to start by H1 FY26. Thus, we factor higher net debt of Rs 14.2 billion/ Rs 12.0 billion/ Rs 8.0 billion for FY24E/ FY25E/ FY26E versus Rs 10.0 billion/ Rs 11.8 bn in FY23/ H1 FY24.
We factor improvement in profitability over FY23-26E.
Stock has run up by ~29% since last update note (July 28, 2023), hence we maintain 'Accumulate' with a revised target price of Rs 879 based on eight times consolidated FY26E enterprise value/Ebitda.
Key downside risk: Lower profitability versus our estimates
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. | Asia Business & Economics |
"It's not normal is it?" asks Jo.
She still can't quite believe what she's had to do to get through this winter.
She's sold her house, where she'd lived for 40 years, and moved in with her daughter and grandchildren to ensure they can survive the cost of living crisis together.
It was the only way they could see of making things work.
Childcare costs coupled with rising energy and grocery bills meant something had to give.
That something was Jo's home.
"It was a no choice decision, it killed me that I had to sell my home after 40 years….it is either that or you watch your family go under and I'm not that type of person," she tells Sky News.
Now she has to walk past her old house every day - because she has only moved 50 yards to the other side of the same street in Ilkeston, Derbyshire.
A small move that felt like huge leap just when she was expecting to be ending her career and enjoying life a bit more.
Currently, Jo works nights at a logistics firm and during the day does childcare for her grandchildren Frank, who is at nursery and 18-month-old Felicity.
Their Mum, Jo's daughter, Fiona is a manager at the same logistics firm.
"Even with such a great job, a great career, it is still not enough," Fiona told us.
"After having Felicity, the reality hit (me) that to work full time to be able to provide for my family, the cost was £2,000 a month, which is the whole of my wages.
"So I was met with a real financial crisis."
She has overcome it through hard work, perseverance and the support and love of those around her - particularly her mum.
"I don't know how optimistic I am in terms of any change, I am just hopeful," Fiona said.
"If you haven't got hope it is just despair and then it is a never-ending vortex of mental health issues, depression and anxiety and then it kind of makes you question, what is the point?"
The local NHS health visiting team that supported Fiona with her son and then her daughter has seen a significant surge in the numbers of families falling into similar situations.
Fiona's health visitor, Gareth Hatton, now sees more and more families struggling to stay afloat financially - as the cost of living crisis has become just part of people's lives.
"The cost of paying for the pandemic, the cost of the war in Ukraine, the cost of inflation, it's in everybody," Gareth said.
"From those that have always been deprived to those that have actually never been in any sort of financial struggles, (they're) struggling in a way that's immoral."
He has lost count of the cold homes he has visited this winter, the number of people who are skipping meals to ensure their children are fed properly - it's his job to help tackle the associated health problems for both infants and sometimes their parents too.
He also believes it is further limiting the opportunities that less privileged children have in life.
"At some point there's going to be a generation of children that we'll lose because of the cost of living," he told us.
"Something's got to change. Something's got to change soon."
Whether next week's spring budget will be that moment of change for families is debatable.
There are multiple layers of problems that people across the generations are facing on childcare, energy and rising day to day living costs - but Jo isn't optimistic that politicians realise what's really happening.
'Groundhog year' Cost of living crisis set to deepen in 2023
Average household set to be £2,100 worse off
Cash payment to help millions with energy bills to begin in spring
"I think they live in a different cuckoo land altogether, talking to ordinary everyday people - no they haven't got a clue."
With a steely look she then finishes our chat by making a point that people up and down the UK will identify with.
"And we'll do everything. But the time it gets to where you work, work, work and you still have no money?
"That's when the population will start turning."
Click to subscribe to the Sky News Daily wherever you get your podcasts | Inflation |
Integrating with a payment API is something most — if not all — business-to-consumer platforms are forced to do at some point. It’s practically unavoidable if they wish to take credit card payments. The trouble is, for platforms dealing in bills and invoices, not just one-off charges, few payment APIs have all the features necessary to accommodate their workflows.
That’s why Ralph Rogge founded Crezco.
“Having worked with thousands of small businesses, it was clear that invoice payments remained an inconvenience, especially when compared to the frictionless checkout of consumer card payments,” Rogge said. (Previously, Rogge worked at YouLend, a startup offering a range of funding solutions targeted at merchants and small- and medium-business owners.) “Businesses should be building and selling products, not spending time and money setting up bill and invoice payments. Crezco makes these payments easy.”
So, does Crezco actually make payments easier? From the sounds of it, yes.
Crezco builds workflows for collecting bill payments — specifically account-to-account bill collection workflows. With these, payments, including overseas payments, are made directly from one account to another without transaction intermediaries like card networks involved.
With Crezco, businesses get automatic invoice reconciliation integrated with their existing accounting software and tools that allow them to generate payment links, collect recurring payments and split payments between multiple accounts. Crezco also offers a built-in fraud detection system, plus “instant” payment notifications via the web and mobile.
“It’s not about replacing card payment with something cheaper, but replacing manual bank transfers with something more convenient,” Rogge said. “Account-to-account and real-time payments are the future. They’ll be increasingly adopted country-by-country. It’s Crezco’s job to connect these international payment rails to a single API for our partners and their customers; the end goal is to make it easy for businesses to send and receive payments, domestically and internationally, saving time and money.”
Crezco doesn’t exist in a vacuum. Some of its more formidable competitors include Intuit and Wise, as well as Brite Payments, TrueLayer, Plaid, Melio and Tink (which Visa bought recently for $2 billion).
Rogge sees Crezco’s fraud prevention tech as a differentiator, among other capabilities.
“Beyond using account-to-account to process payments, Crezco leverages open banking to enhance its fraud systems by analyzing historic bank transactions,” Rogge said. “Most tools employ the same few data points, which are checked against public data sets, such as government sanction lists. Open banking provides ten years of every historic credit and debit transaction.”
Crezco claims to have over 10,000 active customers — and it’s hoping to dramatically increase that figure through a partnership with Xero, the U.K. accounting tech firm. Crezco will replace Wise, with which Xero previously had a deal for embedded bill payment solutions.
Investors seem pleased with Crezco’s trajectory. Today, the company announced that MMC Ventures and 13books invested $12 million in its Series A round, bringing Crezco’s total raised to $18 million. Rogge says that the proceeds will be put toward expanding Crezco’s accounts-to-accounts product and expanding the size of its team from 25 to 45.
“The structural tailwinds in business-to-business payments are significant,” Rogge said, “including the forced adoption of electronic invoicing, the rising use of accounting software and business-to-business platforms globally, the increasing adoption of accounts-to-accounts payments and open banking, and continued growing cross-border payments.” | Banking & Finance |
Intensifying Stress In Unsecured Lending Puts Banks On Watch
As the share of unsecured personal loans has doubled in the past five years, it comes with a bag full of risks for lenders.
Even though the share of unsecured loan portfolio is miniscule at most banks and non-banking financial companies, the rising stress in the segment has caught everyone's attention.
The Reserve Bank of India, in its latest monetary policy review, warned of risks arising from the personal loan segment, which are largely unsecured loans. The central bank implored banks to assess their risk strategies on their personal loan exposures.
"Certain components of personal loans are, however, recording very high growth. These are being closely monitored by the Reserve Bank for any signs of incipient stress," Governor Shaktikanta Das said, during his monetary policy speech.
It is no surprise that banks and NBFCs have ramped up commentary on rising delinquencies in their personal loan portfolio for the quarter ended September.
Small-ticket personal loans, amounting to less than Rs 50,000, accounted for only 2% of banks' overall personal loan book size as of FY23, SBI Research said in a report dated Oct. 20.
According to RBI data, unsecured personal loans disbursed by banks rose to Rs 12.20 lakh crore as of Aug. 28, up 26% year-on-year.
Banks Tiptoeing Around Unsecured Loans
ICICI Bank Ltd.'s personal loan portfolio, which accounts for 9.2% of the total loan book as of Sep. 30, grew 40.4% year-on-year to Rs 74,355 crore. The management, in its post-earnings call, said that any rise in delinquencies in the personal loan portfolio would have implications on other segments as well.
"As far as our portfolio is concerned, we have a very minimal presence in the smaller ticket size segment," Anindya Banerjee, group chief financial officer of ICICI Bank, told analysts. "...we feel that the risks should not be something which should cause too much concern. But we will continue to monitor this as we go along."
Banerjee said that a strong credit demand has helped personal loan portfolio maintain its profitability. "Otherwise, we can always prune it if required," he said.
Similarly, consumer financier Bajaj Finance Ltd. has curbed its exposure to urban unsecured retail loans by 8% and rural unsecured loans by 14%. The NBFC also signalled a moderation in the segment going forward.
Yes Bank Ltd. also concurred. The private lender's Chief Executive Officer Prashant Kumar highlighted "a slight deterioration" in the unsecured loan segment where the repayment remains outstanding beyond 30 days since due date. Personal loans comprised 16% of the bank's overall retail book as of Sept. 30.
"Size of delinquencies are on the increasing trend on unsecured loans. Overall, there are concerns, but not in a significant way. It is a function of how strong are the collections and efforts put into collections," Kumar said.
The bank, however, is strategically going slower in certain retail segments such as unsecured loans, Kumar said.
A relatively low personal loan exposure indicates "contained risk at the time", noted SBI Research.
Kotak Mahindra Bank Ltd., despite higher delinquencies from last year, does not see a need to "put the brakes or start panicking", Dipak Gupta, interim managing director and chief executive officer of the bank, said in the media briefing. But, the small-ticket loans segment is something to watch out for, Gupta added.
Further, Axis Bank Ltd.'s Sumit Bali, group executive and head-retail lending, expects the delinquencies to rise in retail loans that fall in the below Rs 50,000 bracket. While the private lender has "stayed away from" the segment, Bali said that "delinquencies are distorting the views across the unsecured loan segment".
Amitabh Chaudhry, managing director and chief executive officer at Axis Bank, said that the lender is not seeing any rise in risk in its unsecured lending portfolio. "We continue to grow our personal loan portfolio based on the risk guard rails. The growth is not coming at the cost of what we believe (is the) kind of risk to take," Chaudhry said.
The Way Ahead
As the share of unsecured personal loans has more than doubled in the past five years, it comes with a bag full of risks for lenders.
Borrowers have been stacking up personal loans without repaying previous debts, which may elevate the delinquency levels for banks. Moreover, multiple small-ticket loans of below Rs 20,000 to purchase consumer durables could have larger ramifications if they default on repayments, Marcellus Investment Managers said in a blogpost on Oct. 23.
If not now, any inflating default risks in the retail unsecured loans in the future are likely to push credit losses by 50-200 basis points, according to a report by UBS Group AG. Credit costs is the amount of provisions banks have to take to make up for loan losses.
"New PL (personal loan) disbursement to borrowers with weaker credit profiles exposes this segment to a potential downcycle, in our view. NBFC and state-owned banks have a higher share of weak PL borrowers than large private banks," the brokerage said.
While Bajaj Finance remains cautious in the personal loan segment, HSBC Research said that the company's "own delinquency metrics are much better than comparable industry metrics".
NBFCs, in general, are more prone to stress in the unsecured personal loan segment. Nomura Global Research analysts estimate 250-300 bps credit costs in personal loans.
"Risks to earnings from deterioration in the unsecured portfolio appears low for banks, especially in light of the large contingency provision buffers that these banks carry," Nomura said in an August note. | Banking & Finance |
Profits for JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) rose in the third quarter, a show of strength by the largest banks despite headwinds faced by many of their smaller rivals this year.
JPMorgan, the country's largest lender, reported earnings of $13.2 billion that were up 35% from the same period a year ago. Its revenue of $40.7 billion was up 21%. Its net income and revenue beat Wall Street expectations.
CEO Jamie Dimon said in a release that US consumers and businesses "generally remain healthy" but noted a number of economic risks, including the possibility that inflation remains elevated and interest rates continue to rise.
Wars in Ukraine and Israel, he added, could also impact energy, food markets, global trade and geopolitical relationships.
"This may be the most dangerous time the world has seen in decades," he said.
Profits at Wells Fargo were up 61% from a year ago and 2% at Citigroup. Profits fell at a regional bank, PNC (PNC), a sign that smaller lenders are having a tougher time churning out higher results.
The stocks of JPM, Citigroup and Wells Fargo were all higher Friday morning, while PNC fell.
The results kicked off a closely watched earnings season where banks of all sizes will be trying to show how they are navigating an extended period of high interest rates that is proving to be one of the most challenging for the industry since the 2008 financial crisis.
JPMorgan demonstrated its dominance during the chaos of the spring by winning a government-run auction to purchase the bulk of operations of First Republic after regulators seized the San Francisco lender.
First Republic was one of three sizable regional banks to fail, along with Silicon Valley Bank and Signature Bank. Their seizures triggered a panic in the banking system and outflows of depositors from a number of smaller banks.
A focus for many investors in the coming weeks will be what banks say about a key measure of profitability known as net interest income, which measures the difference between what banks earn on their loans and pay for deposits.
JPMorgan's net interest income of $22.9 billion beat expectations. It was up 5% from the last quarter and 30% jump from the same period a year ago. Excluding its purchase of First Republic, the figure was up 21%.
It also raised expectations for full year net interest income to between $88.5-$89 billion.
Wells Fargo’s net interest income topped Wall Street expectations and it also raised its full-year guidance.
Citigroup also showed improvement in its investment-banking fees, which were up 34% from a year ago. That bodes well for some other giant banks such as Goldman Sachs (GS) and Morgan Stanley (MS) that are heavily reliant on dealmaking for their revenues.
JPMorgan’s investment-banking fees were down 3% from a year ago but up 10% from the second quarter.
These giant banks are certainly not immune from some of the challenges roiling the industry. JPMorgan took $1.5 billion in write-offs for bad loans this quarter, more than double the amount compared to the year ago period.
That is a sign that consumers and businesses are having more problems paying their debts.
However, the bank also set aside less to cover future loan losses, a sign that it may have more confidence about the future.
Another challenge that JPMorgan noted Friday was how it will be affected by a new set of capital requirements recently proposed by US regulators. It said that the new rules will increased the amount of capital it will have to set aside by 25%, or $500 billion.
That is higher than the 19% regulators said would likely apply to the largest banks. That 19%, the bank said in a presentation, "does not tell the full story" and it believes that "increases of this magnitude are not warranted."
"There is a lot that does not make sense to us," JPMorgan CFO Jeremy Barnum told analysts Friday.
David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto. | Banking & Finance |
ITR Filing Last Date: Will Govt Extend July 31 Deadline? Here's What Revenue Secretary Said
Income Tax Department through social media channels has been constantly reminding citizens to file their return at the earliest.
The Finance Ministry is not planning to extend the July 31 deadline for income tax return filing, Revenue Secretary Sanjay Malhotra has said.
He also advised income taxpayers to file their return at the earliest.
"We expect that the filing would be higher than the last year... we are hopeful that it should be more than the last year," he told news agency PTI during an interview.
The Income Tax Department through social media channels has been constantly reminding citizens to file their return at the earliest.
About 5.83 crore income tax returns were filed as on July 31 last year, the last day for filing returns for assessment year 2022-23.
"We would like to thank income tax return filers as ITR filing has been at a much faster pace than last year and we would advise them not to wait to the last moment and also not to hope for any extensions. So, I would advise them to file their tax return at the earliest because the deadline of July 31 is approaching fast," he said.
Over 2 crore income tax returns have been filed so far this year for the assessment year 2023-24, the Income Tax department informed last week.
"Our taxpayers have helped us reach the 2 crore milestone 9 days early this year, compared to the corresponding period in the preceding year, and we appreciate the effort!" the I-T department tweeted.
We are happy to inform that over 2 crore Income Tax Returns (ITRs) for AY 2023-24 have already been filed till 11th of July this year as compared to 2 crore ITRs filed till 20th of July last year.— Income Tax India (@IncomeTaxIndia) July 11, 2023
Our taxpayers have helped us reach the 2 crore milestone 9 days early this year,⦠pic.twitter.com/ZlOAKeJpWR
With regard to the tax mobilisation target, Sanjay Malhotra said, it is more or less in line with the target growth rate, which is 10.5%.
The growth rate as far as Goods and Services Tax is concerned, it is 12% so far, he said.
However, the growth rate is lower than 12% on the excise duties front due to rate reduction.
(With PTI inputs) | India Business & Economics |
Five years ago, XRP (XRP -2.26%) was sometimes touted as the little cryptocurrency that would someday be favored by big banks. Fast-forward to November 2023, and mega-banks aren't exactly scrambling to adopt it as a form of currency.
Still, this story isn't finished and XRP might still someday be a preferred currency to facilitate foreign-exchange transactions and cross-border payments. Before that could realistically happen, though, XRP (and the company behind it, Ripple Labs) must first survive a David-and-Goliath battle with a seemingly unstoppable regulatory body.
Riding the Ripple roller coaster
Five years ago, at the end of October 2018, XRP traded at about $0.45 per token. Back then, the world of altcoins was akin to the Wild West, though regulators would step up their oversight and legal pressures soon enough.
Since then, many lesser altcoins have fallen by the wayside but XRP has survived and actually gained some value. On the last day of October, XRP traded at about $0.60, representing a 33% gain over the preceding five-year period. Therefore, a $1,000 investment would have turned into $1,333 during that time frame.
That might sound like a decent return on one's investment, but it's a fairly low risk-adjusted reward considering the high level of volatility along the way. Still, at least XRP didn't end up in the altcoin graveyard like many tokens did during the past half-decade.
Indeed, a 33% return on one's investment isn't too bad considering the legal issues that Ripple Labs has faced along the way. Just to recap, the Securities and Exchange Commission (SEC) sued Ripple Labs in 2020, claiming the company was selling the XRP cryptocurrency as an unregistered security to investors. Ripple Chief Executive Officer Brad Garlinghouse argued that XRP was a currency and not a security.
Since then, the legal drama has devolved into something akin to a soap opera. Earlier this year, a New York judge ruled that XRP is "not necessarily a security on its face." More recently, the SEC retracted its own lawsuit against Garlinghouse and Ripple Labs Executive Chairman Chris Larson.
On the other hand, the SEC is allegedly still demanding $770 million in penalties from Ripple Labs for perceived securities-laws violations. As you might expect, XRP's price has responded to these wrinkles in the story. Consequently, investors should be on the lookout for further developments in the battle of the SEC versus Ripple Labs, exhausting as that may be.
Playing follow the leader
If anything might have a greater influence on XRP's price than legal updates, it would be the price trajectory of Bitcoin (BTC -3.48%). After all, Bitcoin is the mothership that tends to drag smaller cryptocurrencies in both directions.
That's not a bad thing as Bitcoin's been on a tear lately. The prospect of an approved spot Bitcoin exchange-traded fund (ETF), whether it would be from BlackRock or Grayscale or another firm, has pushed Bitcoin's price to levels not seen in quite a while.
Again, the gatekeeper is the SEC and its current chairman, Gary Gensler, isn't exactly known for being a crypto advocate. Yet, there's hope on the horizon since BlackRock's considerable capital and clout could get the SEC to relent sooner rather than later.
Or at least, that's what XRP's investors should hope will happen. Without a doubt, an approved spot Bitcoin ETF would have a catalyzing effect on the token's price.
The domino effect could involve a spot XRP ETF and, perhaps, a slew of altcoin ETFs that include XRP as a holding. If investors can even fantasize about these possibilities, it's a sign that a lot has changed in five years' time.
So, if you feel that these apparent fantasies could become a reality, it might not be a terrible idea to buy and hold a few XRP tokens. Just be sure to keep your position size reasonable -- and be ready for whatever drama might befall XRP in the coming years. | Crypto Trading & Speculation |
A key architect of New Labour has urged Sir Keir Starmer not to give too much power to trade unions if he wins power at the next election.
Lord Mandelson said a Labour government should avoid "rigidities" that could deter investment in crucial industries.
The peer, who now advises Sir Keir, said a Labour would need private investors to boost the economy.
But it needed to be bolder than New Labour, which came to power in 1997, in shaping industrial growth.
Tony Blair's government had been too late to embrace industrial strategy, believing it "went against the grain" of a market-driven economy.
He added there had been a change in thinking since the 1990s, with an acceptance the state could play a bigger role in helping secure jobs in new industries.
The Labour peer was a cabinet minister in the Blair and Brown governments - and played a central role in the party's shift to the centre ground of British politics under Mr Blair.
He now chairs a lobbying company and has been acting as an unofficial adviser Sir Keir Starmer.
Labour's plans for improving the economy and boosting skills have been a key focus of its conference in Liverpool, which could be the last before the next general election, expected next year.
The party is seeking inspiration from the US President Joe Biden's vast package of support for green industries to rebuild Britain's "industrial foundations".
It has also unveiled plans to strengthen employment rights, including for workers in the so-called gig economy.
The plans include allowing electronic voting for strikes, and allowing for sector-based negotiations between trade unions and employers through "fair pay agreements".
'Too hands off'
Lord Mandelson said the UK would not be able to match the levels of investment in the US, but it was right to try and "adapt the technique".
He said implementing an industrial strategy should be an early priority for Labour if it wins office, noting New Labour's approach would be "just a tad too much hands off".
The Blair government, he added, had only fully embraced the idea after the 2008 financial crash, "rather than as we should have done in 1997".
He warned, however, that the party would inherit a worse-performing economy than it did in the 1990s.
Economic outlook
Whilst there could be opportunities to borrow to boost the economy, he added, the incoming government would depend "above all else" on the private sector to invest.
He warned that Labour should "take care" not to reintroduce rights for trade unions that would create "rigidities" in the jobs market.
This would include, he said, "giving all expression to "massive strike funds "so beloved of Len McCluskey and Sharon Graham" - the former and current bosses of Unite, one of Labour's biggest union backers.
He added Labour would need to avoid getting "to a point where people say 'hold on a moment, I think this government's gone too far, I think we're tilted too far in the other direction, and this is impairing Britain's investment attractiveness". | United Kingdom Business & Economics |
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Spooked by the high price of Halloween candy? There’s not much relief in sight.
For the second year in a row, U.S. shoppers are seeing double-digit inflation in the candy aisle. Candy and gum prices are up an average of 13 percent this month compared to last October, more than double the 6 percent increase in all grocery prices, according to Datasembly, a retail price tracker. That’s on top of a 14 percent increase in candy and gum prices in October 2022.
“The price of candy has gotten to be outrageous,” said Jessica Weathers, a small business owner in Shiloh, Illinois. “It doesn’t make sense to me to spend $100 on candy.”
WATCH: How Trick-or-Treat for UNICEF is changing with the times
Weathers said she usually buys plenty of candy for trick-or-treaters and events at school and church. But this year, she only bought two bags and plans to turn off her porch light on Halloween when she runs out.
Other consumers are changing what they buy. Numerator, a market research firm, said its surveys show about one-third of U.S. consumers plan to trade down to value or store brands when buying candy for trick-or-treaters this year.
Weather is the main culprit for the higher prices. Cocoa prices are trading at 44-year highs after heavy rains in West Africa caused limited production in the season that began last fall. Now, El Nino conditions are making the region drier and are likely to linger well into the spring.
“There may be no price relief in sight, at least through the first half of 2024,” said Dan Sadler, principal of client insights for Circana, a market research firm.
READ MORE: The science of keeping your jack-o’-lanterns mold free this Halloween
Kelly Goughary, a senior research analyst with Gro Intelligence, an agricultural analytics firm, said Ivory Coast — which produces around 40 percent of the world’s cocoa — is already showing the signs of one of its worst droughts since 2003.
Meanwhile, global sugar prices are at 12-year highs, Goughary said. India, the world’s second-largest sugar producer after Brazil, recently banned sugar exports for the first time in seven years after monsoon rains hurt the upcoming harvest. Thailand’s output is also down.
Those costs, combined with increases for labor, packaging, and ingredients like peanuts, are pushing up prices for all kinds of candy.
Discount grocer Aldi is advertising a 250-piece variety pack of Mars Inc. chocolate bars — including Milky Way, Twix and Snickers — for $24.98. Two years ago, the same package was advertised at $19.54.
READ MORE: Not all candy is candy, at least for tax purposes
Hershey Co. — which has raised its prices by 7 percent or more in each of the last seven quarters — acknowledged this week that higher prices are taking a toll on demand. Hershey’s North American confectionary sales volumes fell 1 percent in the July-September period.
“We know that value and affordability continue to be top-of-the-line for consumers as budgets are stretched,” Hershey’s President and CEO Michele Buck said Thursday on a conference call with investors.
Buck said Hershey is trying to meet consumers’ needs with offerings in value stores and pack sizes at various price points.
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AmiMoJo writes: In November 2022, the password manager service LastPass disclosed a breach in which hackers stole password vaults containing both encrypted and plaintext data for more than 25 million users. Since then, a steady trickle of six-figure cryptocurrency heists targeting security-conscious people throughout the tech industry has led some security experts to conclude that crooks likely have succeeded at cracking open some of the stolen LastPass vaults.
Taylor Monahan is founder and CEO of MetaMask, a popular software cryptocurrency wallet used to interact with the Ethereum blockchain. Since late December 2022, Monahan and other researchers have identified a highly reliable set of clues that they say connect recent thefts targeting more than 150 people, Collectively, these individuals have been robbed of more than $35 million worth of crypto. Monahan said virtually all of the victims she has assisted were longtime cryptocurrency investors, and security-minded individuals. Importantly, none appeared to have suffered the sorts of attacks that typically preface a high-dollar crypto heist, such as the compromise of one's email and/or mobile phone accounts.
Taylor Monahan is founder and CEO of MetaMask, a popular software cryptocurrency wallet used to interact with the Ethereum blockchain. Since late December 2022, Monahan and other researchers have identified a highly reliable set of clues that they say connect recent thefts targeting more than 150 people, Collectively, these individuals have been robbed of more than $35 million worth of crypto. Monahan said virtually all of the victims she has assisted were longtime cryptocurrency investors, and security-minded individuals. Importantly, none appeared to have suffered the sorts of attacks that typically preface a high-dollar crypto heist, such as the compromise of one's email and/or mobile phone accounts. | Crypto Trading & Speculation |
The Adelson and Dumont families of the Las Vegas Sands casino have "entered into binding purchase agreements to acquire majority ownership and the right to serve as Governor of the Dallas Mavericks," according to a statement released Wednesday.
The families are targeting a closing of the transaction by the end of 2023, subject to satisfaction of customary closing conditions and approval by the NBA board of governors, the statement said.
"The Dallas Mavericks is one of the world's most successful and recognizable sports franchises," the statement read, in part. "The team has won an NBA championship, has a long history of attracting international superstars and has been supported by a dedicated and passionate fanbase and leadership group led by Mark Cuban.
"The Adelson and Dumont families are honored to have the opportunity to be stewards of this great franchise. Through our commitment and additional investment in the team, we look forward to partnering with Mark Cuban to build on the team's success and legacy in Dallas and beyond."
The agreement would be in the valuation range of $3.5 billion and take weeks for the league to process, according to The Associated Press.
Cuban will maintain a stake in the franchise and continue to have control of basketball operations, sources told ESPN on Tuesday night. According to an SEC filing, the Adelson family is selling almost $2 billion in stock in the Las Vegas Sands Corp., "to fund the purchase of a majority interest in a professional sports franchise pursuant to a binding purchase agreement, subject to customary league approvals."
The filing identified Miriam Adelson, a medical doctor and widow of casino magnate Sheldon Adelson, and the Miriam Adelson Trust as sellers, but it didn't specify a team, league or location.
If the entirety of the $2 billion goes toward the purchase, it would mean the Adelson family could be acquiring at least 57% of the NBA team -- based on the $3.5 billion valuation.
The Sands group, led by Miriam Adelson and her son-in-law and company president, Patrick Dumont, has previously had discussions with Cuban about building a casino entertainment district in Dallas that would include a new arena for the Mavericks. Those plans would require gambling to become legal in Texas, for which Cuban has lobbied state politicians.
"The goal is to win and to have a team that proudly represents the greater DFW area and serves as a strong and valuable member of the local community," the statement from the Adelson and Dumont families said. "We believe that with this partnership and our commitment to the team, the community and the fans, the future is bright for the Dallas Mavericks."
Cuban, 65, has owned the Mavs since 2000, when he purchased a majority share in the franchise for $285 million. He recently announced he was leaving the popular business TV program "Shark Tank" after its 16th season next year. | Consumer & Retail |
Gillian Keegan will present herself as the heir to Margaret Thatcher on Monday amid speculation of a future leadership bid.
The Education Secretary is expected to appeal to the Tory Right by stressing her belief in Mrs Thatcher’s legacy of “sound money, and solid economic foundations” when she addresses the Centre for Policy Studies’ annual Margaret Thatcher Conference.
In a swipe at former Downing Street residents Liz Truss and Kwasi Kwarteng, she is expected to say: “Margaret Thatcher never thought that the way to achieve a low tax economy was by dramatically increasing public sector debt and borrowing.
“She knew that you had to deal with inflation first otherwise every tax cut or spending pledge would be eaten by inflation.”
She will add: “If you believe in the market, you must listen to the market.”
In a highly personal speech, she is understood to be planning to present herself as a Westminster outsider who grew up in a working-class family in Liverpool and learnt about how to achieve growth as a businesswoman, rather than simply pledging to deliver it in speeches.
“I didn’t just repeat the word growth and expect it to happen,” she will say.
She will also say that, like Mrs Thatcher, she learnt a lot working in a shop on Saturdays at the age of 14.
‘Tough on strikes, pro-low tax’
The speech comes days after Rishi Sunak was threatened with a Tory mutiny by supporters of Boris Johnson.
The prime minister is facing three by-elections after Nadine Dorries and Nigel Adams also said they were standing down with immediate effect.
Mrs Keegan, 55, is seen as a potential leadership candidate if the Conservatives lose power in the next general election. “I know she has been on manoeuvres in the past,” a Whitehall insider said.
“She wants to present herself as tough on strikes, pro-low tax but socially liberal.” It is understood that she considered entering the race during the Tory leadership contest last summer.
“She’s northern/working class and a successful businesswoman…[it] makes sense,” a source close to Mrs Keegan told The Telegraph last July.
The MP for Chichester is a member of the One Nation group of liberal Tory MPs.
Toughen stance on culture war
MPs on the Right of the party have questioned whether she is too “soft” on sex education and transgender issues, citing her remarks earlier this year when she suggested that 16-year-olds are old enough to decide to change their gender.
However, she has sought to toughen her stance in recent weeks on culture war issues, saying that “we need to get the voice of common sense back into the debate”.
She told the Northern Research Group conference last week that the work the Government has done on the Free Speech Act, giving more powers to cancelled academics and students, was “groundbreaking”.
She said: “I think a lot of people thought we wouldn’t be able to navigate it through, we did. And I actually had an awful lot of negative briefing against me personally on this subject as well, which was all a load of rubbish.
“And effectively the voice of common sense, which is all that I think I represent, has finally taken hold and we have a free speech director as well at the Office for Students who is just starting and it’s a huge signal.”
Keegan voted for Thatcher aged 19
Mrs Keegan left school at 16 to work as an apprentice in a car factory in Liverpool. It was there that she became disillusioned with union politics and decided to vote for Mrs Thatcher at the age of 19.
She had a 27-year career in the manufacturing, banking and technology industries, including stints living in Spain and Japan, before a chance encounter with Baroness Jenkin of Kennington inspired her to enter politics.
She was elected MP for Chichester in 2017 and lives in Petworth, West Sussex, with her husband Michael Keegan, a former Conservative councillor who works in procurement at the Cabinet Office.
Speakers at the CPS conference also include Lord Michael Spencer, the billionaire financier and Conservative donor, and Penny Mourdant, leader of the House of Commons, who has also been tipped as a future leadership contender. | Inflation |
(Bloomberg) -- PCCW Ltd., a telecommunications, media and technology conglomerate controlled by billionaire Richard Li, is mulling a significant minority stake sale in its fiber business for about $1 billion, according to people familiar with the matter.
Most Read from Bloomberg
The Hong Kong-listed company is working with a financial adviser on the potential transaction, the people said, asking not to be identified because the matter is private. The asset has drawn interest from Chinese investors as well as Middle Eastern sovereign wealth funds, the people said.
The company could use the proceeds to reduce debt while boosting growth, according to the people. Considerations are ongoing and talks may not lead to any agreement, they said.
A representative for PCCW declined to comment.
PCCW, which traces its roots to the Hong Kong Telephone Co. formed in 1925, holds interests in businesses including telecommunications, media, IT solutions, property development and investment, its website shows. Its shares have climbed about 12% this year, giving the firm a market value of roughly $3.9 billion.
The company has been selling stakes across some of its operations in recent years. In June, Canal+, the French broadcaster owned by billionaire Vincent Bollore’s Vivendi SE agreed to buy a significant minority stake in Viu, an over-the-top video service under PCCW, as part of a partnership between the two media groups.
In 2021, PCCW sold its data center business to DigitalBridge Group Inc., a digital infrastructure investment firm, for $750 million. A year later, the conglomerate divested stakes in PCCW Lenovo Technology Solutions and PCCW Network Services to Lenovo Group Ltd. for about $614 million.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P. | Asia Business & Economics |
IMF Latest: Gopinath Sees Inflation, Growth Risks If War Widens
US Treasury Secretary Janet Yellen said the Biden administration hasn’t ruled out new sanctions against Iran in relation to renewed conflict in the Middle East, but no decisions have been made.
(Bloomberg) -- The International Monetary Fund’s No. 2 official says that the war between Israel and Hamas could spur inflation and hamper global growth if it turns into a wider conflict that causes a significant increase in oil prices.
Modeling by the organization, whose mandate includes global economic surveillance, shows that a 10% increase in oil prices leads to inflation being 0.4 percentage points higher a year later, Gita Gopinath, the fund’s First Deputy Managing Director, said Wednesday in an interview with Bloomberg TV’s Francine Lacqua.
Guardians of world finance have gathered here for the annual meetings of the IMF and World Bank against the backdrop of ongoing fighting after Hamas attacked Israel from the Gaza Strip. Upcoming events include a ministerial roundtable discussion on Ukraine at 5:30 p.m. that US Treasury Secretary Janet Yellen will address.
All times are for Morocco.
Peru’s Velarde Cautious on Policy (12:03 p.m.)
Latin America’s longest-serving central bank chief, Julio Velarde, said he needs to be sure inflation has been brought under control before he can be more assertive with monetary policy in Peru.
“We have to be sure inflation is defeated before we can be more aggressive,” Velarde said. “We are going to see numbers, core inflation and expectations.”
Citigroup on Capital Buffers (11:45 a.m.)
Citigroup Inc. Chairman John C. Dugan said US plans to hike capital buffers for the biggest Wall Street banks are unwarranted and will push lending and intermediation away from the banking sector.
“We believe it really will have a material impact on the amount of lending that US companies can do generally, which is not a good thing when the economy is more or less in a precarious position,” Dugan said.
Kganyago Says More Work to Do (11:45 a.m.)
South Africa’s central bank has more work to do to rein in inflation that remains elevated, with higher food and oil costs posing risks to the outlook for price-growth, central bank Governor Lesetja Kganyago said.
“The job on the inflation front is not yet done,” he said. “We remain vigilant and we stand ready to deploy our tools as necessary.”
Yellen on Sanctions (11:40 a.m.)
US Treasury Secretary Janet Yellen said the Biden administration hasn’t ruled out new sanctions against Iran in relation to renewed conflict in the Middle East, but no decisions have been made.
“I wouldn’t take anything off the table in terms of future possible actions, but I certainly don’t want to get ahead of where we are now,” Yellen said Wednesday during a press conference.
Higher Rates May Be Needed (11:32 a.m.)
Federal Reserve Governor Michelle Bowman said interest rates may need to rise further and stay higher for longer than previously expected to get inflation down to the central bank’s goal.
Higher-for-Longer Rates Worry (11:17 a.m.)
The prospect that high interest rates will keep constricting the global economy is worrying World Bank officials as they look to the impact on nations nursing large debts.
Bigger, Better World Bank (11:04 a.m.)
Ajay Banga, the World Bank’s new president, said the lender must become bigger as well as better at measuring its impact so it can help fund some of the trillions of dollars in global development needs.
US Treasury Debt Dynamics (10:30 a.m.)
The forces underlying the Treasury debt market are extremely adverse as the US is on an unsustainable fiscal path, a senior International Monetary Fund official said.
--With assistance from Jana Randow, Ekow Dontoh, Mirette Magdy and Eric Martin.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P. | Inflation |
More than 1 million children experienced destitution last year – meaning their families could not afford to adequately feed, clothe or clean them, or keep them warm – according to a major study which reveals an explosion of extreme poverty in the UK.
Severe material hardship was “no longer a rare occurrence”, the study found, with rates of destitution more than doubling in the last five years as a result of benefit cuts and cost of living pressures, leaving struggling households increasingly reliant on regular charity handouts.
Poverty campaigners, teachers and frontline welfare workers have expressed growing alarm about the damaging effects of destitution, particularly on children, including physical ill health, undernourishment, mental illness, social isolation, school absences and poor classroom behaviour.
An estimated 1.8m UK households containing nearly 3.8 million people, including 1 million children, were destitute at some point in 2022, according to the study, published by the Joseph Rowntree Foundation (JRF). Half of destitute households tried to get by on less than £85 a week after housing costs, with a quarter reporting no income at all.
JRF’s chief executive, Paul Kissack, criticised the government for in effect ignoring the rise in destitution. “The government is not helpless to act; it is choosing not to,” he said. “Turning the tide on destitution is an urgent moral mission, which speaks to our basic humanity as a country, and we need political leadership for that mission.”
A co-author of the study, Prof Suzanne Fitzpatrick, of Heriot-Watt University, described soaring destitution as “morally reprehensible” and said the UK state had abdicated its responsibility to society’s poorest. “There must be immediate action from all levels of government to tackle this social emergency,” she said.
Destitution is defined as the inability to meet basic physical needs to stay warm, dry, clean and fed, either because of a lack of clothing, heating, shelter or food, or because household income falls below a minimum level after housing costs – ranging from £95 a week for a single adult to £205 a week for a couple with two children.
The study, the latest in a series tracking the phenomenon since 2015, also interviewed people about their experiences of destitution. It found:
Adults reported a frequent inability to afford more than one meal a day, often going without to ensure their children could eat. Nearly two-thirds (61%) said they had gone hungry in the past month. There was heavy reliance on food banks or relatives for groceries.
More than half of destitute adults (51%) regularly went without toiletries such as shampoo and toothpaste, as well as hygiene and cleaning products, often relying on food banks for these items. One respondent had to borrow money to buy incontinence pads for her disabled daughter.
New clothing and footwear “were essential items that people simply did not buy at all”, the study concluded, with many adult respondents wearing worn-out clothes, and only buying new clothes – such as school uniforms and trainers – for their children.
Destitution – once largely limited to immigrants ineligible for social security support – was now predominantly experienced by UK nationals in receipt of welfare benefits, and increasingly by families, the study revealed. One in 10 destitute households included working adults.
Disabled people and people with long-term chronic health conditions, and Black British, Caribbean and African households, were disproportionately likely to be destitute. The number of destitute lone parents almost tripled between 2019 and 2022, while the number of children experiencing destitution has tripled since 2017.
The erosion of state support for people in severe hardship, and their growing reliance on informal help from charities and parents, was one of the most striking aspects of the research, the study said. More than 574,000 destitute people were supported by food banks in 2022, up from 214,000 in 2019.
The study noted the critical role of volunteer food banks in the lives of the poorest households despite concern over their ability to meet rising demand. One charity worker told researchers: “We used to worry about food banks opening. Now we’re worrying about food banks closing. That’s how bad it is in our country right now.”
Meagre benefit rates meant a single adult on the basic £85 weekly rate of universal credit was by definition in severe hardship, falling below the £95 a week destitution threshold, the study said. The two-child benefit limit and benefit sanctions also drove destitution. The UK social security system was “full of holes”, it concluded.
The JRF called on all political parties to commit to a plan to eradicate destitution, including an overhaul of benefit rates to provide an “essentials guarantee”, which would ensure universal credit was sufficient to protect households from severe hardship.
A government spokesperson said: “Our number one priority is driving down inflation because that will help everyone’s money go further.
“There are 1.7 million fewer people in absolute poverty than in 2010, including 400,000 fewer children, but we know some families are struggling, which is why we are providing support worth an average of £3,300 a household, including raising benefits by over 10% this year, and are increasing the national living wage again.
“To help people out of poverty through work, we are also investing £3.5bn to help thousands into jobs and are removing barriers for parents with the biggest ever expansion of free childcare – providing 30 free hours of childcare for working parents and support for children from nine months old to when they start school. This will save eligible parents up to an average of £6,500 a year.”
‘I often wake up hungry at 3am’
“What’s destitution like? A complete nightmare!” says Clare Willsher, who lives with her husband and two teenage boys in Bexleyheath, south-east London. She is quite matter-of-fact about it: life has often been pretty tough, but never this tough.
Soaring energy and food costs over the last two years coincided with her husband getting cancer and having to give up work. They had personal debts, and their household income shrank just as their outgoings went through the roof.
Universal credit pays the rent on their private rented home, but the basic allowance meant for living costs will not stretch to a whole month. The family gets disability benefit for the boys, without which, she says, they would be totally scuppered.
Putting food on the family table takes time and ingenuity. A weekly grocery budget of £35 has to be supplemented with trips to food banks. Some weeks, when other bills have to be paid, she has had as little as £10 for food.
She and her husband regularly skip meals – “we never have three meals a day” – to ensure the boys always have enough to eat. But going without is hard: “I often wake up hungry at three in the morning,” she says.
Last winter was miserable, she recalls, as the cost of energy meant they could rarely afford to put the heating on, even when it was freezing. Sometimes they switched it on because it was the only way to dry the boys’ school uniforms.
The inability to afford things they used to take for granted can be demoralising, she says. She and her husband recently went out for a token one drink to celebrate their wedding anniversary. “It left us skint,” she reflects, with a hint of regret. | United Kingdom Business & Economics |
Annapurna Swadisht Eyes Britannia's And Nestle's Turf
The company is planning to double its revenue to Rs 300 crore this fiscal, said Joint Managing Director Gajanan Prasad Sah.
Annapurna Swadisht Ltd. is actively pursuing a multi-pronged growth strategy, with a focus on the tier-2 markets and beyond, hoping to expand its noodles and biscuits categories.
Annapurna's strategy involves strengthening of distribution footprint to widen the penetration of its newly added categories—noodles and biscuits—and upping marketing spends to push sales, the company's Joint Managing Director Gajanan Prasad Sah, told BQ Prime in an exclusive chat.
Sah was recently roped in by Annapurna Swadisht to steer the company onto its next phase of growth. Prior to that, he was the global chief executive officer of the FMCG division of CG Corp. Global—the makers of Wai Wai noodles.
The Kolkata-based packaged snacks, food and beverages company is also building its own product research and development team. "We believe that we have now reached a scale where we can afford to set up a dedicated department for product development, instead of outsourcing it," Sah said.
These measures combined are expected to aid Annapurna Swadisht to grow its revenue to Rs 300 crore this fiscal, from Rs 160 crore a year ago, according to Sah. For the half year ending September, the company reported a nearly 100% year-on-year jump in its revenue from operations to Rs 131.1 crore, as against Rs 65.6 crore for the same period last year. Factors like new capacity addition, penetration into newer geographies, and better penetration in few of its existing markets drove the top line growth, Sah said.
Annapurna's aggressive penetration-led growth is in sync with the marked shift in India's fast-moving consumer goods space, where smaller players have been making deeper inroads to take on the big boys in the industry.
Acknowledging the phenomenon, Britannia Industries' Vice Chairman and Managing Director Varun Berry told analysts in a recent earnings call that the company has "to be vigilant going forward", as smaller companies are eating into market share. The stronger brands are losing out because of price play and grams of biscuits they sell in each packet.
A recent Kantar report also highlighted how regional and local brands across categories—such as noodles, biscuits, detergent powder and spices—have gained volume at the expense of inflation-hit established players.
In the biscuits space, for instance, the volume of Jaya Biscuits jumped 18% and Priya Gold grew 16%, as compared with the category growth of 9%.
Balaji Wafers Pvt. has also launched Gippi masala noodles, consciously making it sound similar to ITC's Yippee. It is priced at Rs 10 for a 70 gm pack, which is also cheaper than ITC Ltd. and Nestle's equivalent packs that come for Rs 14-15. With penetration at 30%, the Gujarat-based noodles maker has grown 58% in April over the last 12 months, according to Kantar.
Annapurna is a relatively new entrant in the biscuits and noodles space. The categories currently comprise 20-25% of the company's overall sales.
Broadly, the biscuits market is worth Rs 50,000 crore, while the noodles segment is now worth Rs 12,000 crore, according to Sah.
"These are very big and highly competitive categories with the presence of several established national and regional players... But both have significant untapped potential given their low per capita consumption," he said.
The company primarily caters to towns with a population of over 5,000 and less than 20,000. It also plans to extend its presence in the urban markets, as according to Sah, "Urban presence helps create aspirational value among rural masses." Currently, the company operates in Bihar, Jharkhand, West Bengal, Assam, Odisha and Uttar Pradesh. It has a portfolio of 10 categories, including fryums, namkeens, snacks, candy and cakes.
"At the moment, however, we aren't actively focusing on the confectionary business, as the focus is on noodles and biscuits," said Sah.
Annapurna has close to 550 distributors and more than 115 super distributors. It has a total production capacity of 126 metric tonne per day and its products are available across over six lakh retail touchpoints.
About 75% of the company's revenue comes from snacks, according to Sah.
However, he remains wary of the persistent macroeconomic headwinds that could pose a challenge to Annapurna's growth. Inflation-led slowdown in rural demand remains a concern, he said.
"Farm income remains under pressure, as even though the prices of daily essentials have skyrocketed, the gain is yet to reach the farmers. And this lag seems to be stalling rural demand." Hit by higher costs and lower income, the consumers curbed spending even during the festive season, said Sah, hinting that rural demand would recover with a delay.
"Our sales were down 10% this Diwali over the previous year. We now expect it will take at least six more months for demand to normalise." | India Business & Economics |
Walmart said it won’t be making any changes to its LGBTQ-friendly merchandise in honor of Pride Month — even as rival Target has pulled some of its Pride collection from stores in the face of a customer backlash.
“We have merchandise that we sell all year that supports different groups,” Walmart Chief Merchandising Officer Latriece Watkins said Wednesday. “In this particular case, we haven’t changed anything in our assortment.”
Minneapolis-based Target has removed some items from its collection for Pride Month, saying threats from irate customers made workers feel unsafe.
But Watkins said Walmart stores hadn’t experienced any threats over its Pride-themed merchandise.
“In this particular case, when we think about security …we have not done anything in particular differently related to security in our stores,” the marketing officer said.
Walmart — which boasts more than 4,500 locations nationwide — has released clothing bearing similar messages to those that have generated controversy at Target, including T-shirts that say “Some people are gay. Get over it,” “gay AF” and woke up gay again.”
Onesies for infants, meanwhile, boast sayings like “proud love,” “I love my 2 moms” and “love will win.”
Walmart also has a whole collection of LGBTQ-friendly trinkets and accessories as part of its “Pride & Joy” collection, which includes flags, pins, tote bags, clothes for dogs and more.
One woman took to TikTok to share a sarcastic video of herself shopping for Pride-themed clothes for her baby at Walmart.
On a rack with clothes for infants aged zero to 12 months, she pulls out a onesie that says “proud love” with a sticker saying the garment is made for infants and is “gender inclusive.”
Another rack was full of infant-sized rompers that say “love wins.”
“Oh, there’s even one for me,” the woman adds sneeringly before showing an adult T-shirt that says “proud parent” with a similar sticker marking the shirt as “gender inclusive.”
The Post has reached out to Walmart.
Another user replied: “They didn’t see Target lose 9 billion over this?”
Target, which has been the victim of a 14-day boycott over its Pride Month collection, dubbed “PRIDE,” has seen its stock lose a whopping $13.8 billion as of Wednesday.
Shares of the embattled “cheap chic” chain sank 2.2% to $130.93 on Wednesday after dropping for eight straight sessions — the stock’s longest losing streak since November 2018 — giving the company a market capitalization of $60.4 billion.
That’s off 19% from two weeks earlier on May 18, when the stock was trading at $160.96 on the eve of the crisis.
It’s also the lowest levels Target shares have hit since the company was recovering from the depths of the pandemic in mid-2020.
The ongoing losses are the result of an ongoing boycott that was triggered by Target’s release of “PRIDE,” an LGBTQ-friendly line that includes clothing for children and “tuck-friendly” women’s swimwear with “extra crotch coverage.”
Last week, a Target spokesperson said the retailer would be making a nationwide “adjustment” to its Pride collection because of disgruntled customers’ violent confrontations with workers.
“Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and well-being while at work,” the Target spokesperson said. ”Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior.”
Target declined to say whether it will remove “tuck-friendly” women’s swimsuits, which allow trans women who have not had gender-affirming operations to conceal their private parts.
It was also unclear if the retailer would pull any of its Pride-themed merch for children from its shelves, which Target has been harshly criticized for selling as a way to groom children.
Wall Street is worried that Target will suffer the same fate as Anheuser-Busch, whose Bud Light sales have fallen by more than 25% since the brand tapped transgender influencer Dylan Mulvaney to promote the beer on April 1.
Investors are selling their shares on the “assumption that Target might have to lower its earnings guidance because its sales and profitability has been impacted,” Yarbrough said, adding that sales could suffer for the next nine to 12 months. | Consumer & Retail |
- A major Swiss bank admits it conspired with U.S. taxpayers and others to hide over $5.6 billion from the Internal Revenue Service.
- Banque Pictet, the private banking division of Pictet Group, has agreed to pay about $122.9 million in restitution and penalties, in an agreement with prosecutors.
- If the bank complies with the terms of its deal, the Justice Department will defer prosecution for three years and then dismiss a charge of criminal conspiracy to defraud the IRS.
A major Swiss bank admitted to conspiring with U.S. taxpayers and others to hide over $5.6 billion from the Internal Revenue Service, the Department of Justice announced Monday.
Banque Pictet, the private banking division of the 218-year-old Pictet Group, will pay about $122.9 million in restitution and penalties as part of an agreement with prosecutors.
Between 2008 and 2014, the bank had 1,637 accounts on behalf of American clients, who collectively evaded approximately $50.6 million in U.S. taxes, the DOJ said.
The accounts themselves held more than $5.6 billion of the roughly $20 billion in total assets from U.S. taxpayers that the bank managed during the relevant period.
If the bank complies with the terms of its deal, the Justice Department has agreed to defer prosecution for three years and then dismiss a charge of criminal conspiracy to defraud the IRS.
As part of the deal, the bank also agreed to cooperate with ongoing investigations into hidden bank accounts.
"Rooting out financial malfeasance remains a priority for this Office," Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement.
"We encourage companies and financial institutions to come to us to report wrongdoing before we come to you," he added.
This is breaking news. Please check back for updates. | Banking & Finance |
The boss of one of the UK's biggest food firms is calling for higher taxes on salty, fatty and sugary foods.
Food producers had not "shown enough appetite to change", said James Mayer, who runs Danone in the UK and Irish Republic.
The French firm is best known for its yoghurt brands, but also owns bottled water brands Evian and Volvic.
He said only 10% of Danone's own products would be affected by what have been dubbed "sin" taxes.
"The UK food industry's efforts to improve the health profile of its products have not moved fast enough," Mr Mayer said in comments first shared with the Observer newspaper.
He said it was time for "meaningful intervention" by the government.
"We see this as the only way industry as a whole will be incentivised to move towards healthier, more sustainable products over the often cheaper but unhealthy alternatives," Mr Mayer said.
The UK introduced a "sugar tax" on soft drinks in 2018, but has rejected more recent proposals to put extra taxes on other unhealthy products, relying instead on manufacturers to engage with voluntary programmes to reduce salt, fat and sugar.
The steep rise in the cost of food over the last year makes it a difficult time to argue for higher taxes.
But Mr Mayer said the new approach should include restrictions on advertising as well as "looking at how VAT rates can be aligned to the health credentials of products".
Currently VAT, a sales tax, is not charged on most food products, but the standard 20% VAT rate is applied to alcoholic drinks, confectionery, many crisps and savoury snacks, ice cream and soft drinks.
Mineral water, which makes up a significant part of Danone's product portfolio, is also subject to VAT.
The food industry has previously lobbied against additional taxes, arguing it would push up prices. However campaigners in favour of the strategy argue that tax revenues could be used to promote healthier eating patterns.
A Department of Health and Social Care spokesperson said the government had taken "firm action" to tackle unhealthy foods, and would continue to work closely with industry.
"Our sugar reduction programme has delivered dramatic reductions in the amount of sugar in foods eaten by children - including a 14.9% decrease in the sugar content of breakfast cereals and a 13.5% reduction in the sugar content of yogurts and fromage frais," the spokesperson said in a statement.
The government introduced restrictions late last year on where unhealthy foods can be displayed in shops, but delayed new limits on "volume" offers such as buy-one-get-one-free, until autumn this year.
A ban on TV advertising of junk food before 21:00 has been pushed back to October 2025 to give the industry more time to prepare for the restrictions.
Henry Dimbleby, co-founder of the Leon fast-food chain, appointed as the government's healthy eating "tsar", resigned earlier this year, criticising the lack of progress.
His report last year, which recommended measures including taxes on salt and sugar used in processed food, with the revenues used to provide fresh fruit and vegetables to low-income families, was not taken up by the government.
Mr Mayer said Danone UK & Ireland had committed to keep 90% of its range of products below the threshold that counts as high in fat, salt and sugar, and would not launch any new products marketed at children that were in that category. | United Kingdom Business & Economics |
U.S. employees are fighting against return-to-office policies, with the majority of workers saying they are willing to switch jobs if it means they won’t have to commute. According to a survey by Bankrate last month, an overwhelming 89% of workers say they want to exchange working in the office for a fully remote or hybrid work schedule.
“Whether currently working or aspiring to work, now that people have seen or experienced changes forced by the pandemic, there’s no putting that proverbial genie back in the bottle,” Mark Hamrich, a Bankrate financial analyst said in a statement. “At the same time, employers must adapt to these shifts while striving for success and greater productivity. Otherwise, many of their employees are going to seek work elsewhere.”
Remote work allowed people to move outside major expensive cities like New York City, Chicago, San Francisco, and Denver and relocate to areas with a more attractive lifestyle or less populated rural areas that offer more affordable housing.
New data released by the United States Census Bureau reveals which metro areas boast the most affordable rent, with residents paying less than 30% of their income to keep a roof over their heads. New York City is ranked as having some of the highest rents in the country, with roughly 47% of residents reported as paying affordable rental prices.
According to the bureau’s report, the median rental price in the U.S. is still over $2,000 per month, while Redfin reported earlier this month that the median rent increased by 4.6% in the Midwest from August 2022 to August 2023. During the same period, rent rose by 1.2% in the Northeast.
However, perhaps unsurprisingly, areas like Montana and Wisconsin are reported to offer more affordable rent. The top 10 list also reveals that the majority of the listed metro areas have 63% or more affordable rent, which is defined as locations where residents pay less than 30% of their income on rent.
These are the top 10 cheapest areas to rent in the U.S. | Workforce / Labor |
Circle, the issuer of the USDC stablecoin, has been sharpening its focus on Asia as it sees an opportunity for stablecoins to be a part of and bolster the evolving payments ecosystem in the region.
“We’re looking at how to grow a web3 business and support the broader web3 ecosystem, so Asia was a natural place to be,” Yam Ki Chan, Circle’s vice president for strategy and policy, told TechCrunch+ at Korea Blockchain Week last Wednesday.
The company forayed into the region with Singapore, where it received an in-principle approval to operate its payments business last year, and this June, it received a full license to offer digital payment and token services both domestically and internationally. “That’s our Asia hub to start, and then we’re looking more broadly in Asia — we’re considering what it looks like, who the players are, how we can work with them and what their needs are,” Chan said.
Previously known for its more friendly stance towards crypto, Singapore has recently become a bit more cautious about the web3 space after a number of scandals rocked the industry in 2022. But despite its more measured approach, the country is still moving faster than many others both in the region and globally, making it an attractive hub for startups to flock to. In fact, a number of crypto startups I spoke with at the conference noted that while they had Korea-based founders, their companies operated out of Singapore thanks to the country’s more friendly regulatory landscape. It’s similar to how many U.S. founders are based in the States but operate out of the Cayman Islands, which is more friendly to crypto businesses.
In general, Chan thinks the U.S. dollar, or digital dollars, have a great product-market fit in Asia. “As an economist by training, one thing I looked at was, if you look at the trade-to-GDP ratio, Asian economies are much higher than the United States or Europe or intra-Europe trade.”
That makes a lot of sense. It’s easy to buy and sell goods within the EU since its member countries accept a common currency. The U.S. is similar, as you can buy a product in one state and sell it in another. Sure, there might be some discrepancies, like different taxes and local regulations, but it’s pretty easy to transfer funds and not have to worry about exchange rates and the like.
“But it’s different in Asia,” Chan said. “You’re going to have a small, local business started in Seoul and their customer is in Osaka or Kyoto and they’re getting yen in revenue, but their vendors are maybe in Ho Chi Minh or Bangkok and they’re paying [Vietnamese] dong or Thai baht.”
These are all costs that Asian businesses, especially smaller firms, have to carry, which makes it more expensive for them to do cross-border trade compared to their European or U.S. counterparts.
So the big question is, how can Asian businesses send and receive payments in a cheaper way, while also increasing speed and security? Chan thinks the answer may come from blockchain technology and stablecoins, like USDC.
For merchants conducting businesses internationally, and for small ones who might not have the time or resources, using stablecoins could provide a new opportunity, Chan said. | Asia Business & Economics |
Tesco has announced it is cutting value of its Clubcard rewards scheme.
From 14 June, Clubcard points will be worth twice their value when customers cash them in, rather than three times as they are now.
The scheme enables shoppers to collect points for money spent at Tesco and exchange them for vouchers which can be used in store or for restaurant meals and day trips.
Tesco said it was not the only retailer changing its loyalty scheme.
In a message to customers, the supermarket's chief customer officer Alessandra Bellini said the move would "make sure we can continue to provide you with a wide range of exciting rewards, whilst keeping our product prices low".
She said the company was extending the time period that Clubcard rewards would be valid for to 12 months, rather than six in order for shoppers to use points at the higher value before the changes come in.
Tesco first introduced Clubcard in 1995 and within a year, customers were spending 28% more in its stores. The popular scheme enables points to be spent at the likes of Pizza Express, Legoland and Alton Towers.
When Tesco last changed its loyalty scheme, dropping the value of some rewards and raising others, customers responded angrily to the move which was implemented immediately.
However, Tesco is not the only retailer to have made its rewards scheme less generous recently.
From May, Boot's Advantage Card holders will get 25% less for every £1 they spend in store, earning 3p rather than 4p.
In November, Sainsbury's Bank cut the amount of Nectar points customers could earn by 75%, from two points for every £1 spent, to one point for every £2. | Consumer & Retail |
Donald Trump signed a document 30 years ago that gave the true size of his New York penthouse that was later listed as far larger on his financial statements, according to evidence shown Tuesday at the former president's civil business fraud trial.
The evidence appeared in an email attachment shown as Allen Weisselberg, the former finance chief of Trump's company, testified in New York Attorney General Letitia James' fraud lawsuit against Trump and his Trump Organization. Trump denies any wrongdoing.
The attachment was a 1994 document, signed by Trump, that pegged his Trump Tower triplex at 10,996 square feet — not the 30,000 square feet later claimed for years on financial statements that were given to banks, insurers and others to make deals and secure loans.
Weisselberg said he recalled seeing the email but not the attachment, explaining that the attachments were documents he already had on file in the company's offices. But in any event, he said, he didn't pay much mind to the apartment's size because its value amounted to a fraction of Trump's wealth.
"I never even thought about the apartment. It was de minimis, in my mind," Weisselberg said, using a Latin term that means, essentially, too small to care about.
"It was not something that was that important to me when looking at a $6 billion, $5 billion net worth," Weisselberg said.
Weisselberg repeatedly said he couldn't remember whether he discussed the financial statements with Trump while they were being finalized. The former chief financial officer said he reviewed drafts "from a 30,000-foot level" (9,100-meter level) but paid special attention to something "very important" to Trump: the descriptions of his properties.
"It was a little bit of a marketing piece for banks to read about our properties, how well they're taken care of, that they're first-class properties," said Weisselberg, who added that Trump scrutinized the language used in such descriptions.
"He might say, 'Don't use the word "beautiful" — use the word "magnificent,"' or something like that," Weisselberg testified.
Meanwhile, in Trump's separate election interference case in Washington, prosecutors Tuesday urged the judge to protect prospective jurors' identities, citing the former president's "continued use of social media as a weapon of intimidation in court proceedings." Trump lawyer John Lauro declined to comment.
In that federal criminal case, Trump has pleaded not guilty to illegally plotting to overturn his 2020 election loss to Democrat Joe Biden.
In New York, Weisselberg said Tuesday he learned of the Trump Tower penthouse size discrepancy only when a Forbes magazine reporter pointed it out to him in 2016. He testified that he initially disputed the magazine's findings but said he couldn't recall whether he directed anyone to look into the matter.
"You don't recall if you did anything to confirm who was right?" state lawyer Louis Solomon asked.
Weisselberg said he did not.
As Forbes zeroed in on the apartment size question in 2017, emails show, a company spokesperson told another Trump executive that, per Weisselberg, they weren't to engage on the size issue. A week later, Trump's 2016 financial statement was released, using the incorrect square footage.
Over the years, Trump Organization executives had greatly boosted their estimate of the apartment's value for reasons ranging from the boss' fame to comparing it to an asking price on another triplex — though that other one ultimately sold for 60% less, another former executive testified last week.
When The Wall Street Journal wrote about the $135 million listing for a property near Trump's Mar-a-Lago club in Florida in 2018, Weisselberg wrote a note telling a staffer to hang onto the article and "see what it ends up selling for."
Asked Tuesday to explain, Weisselberg testified: "Anybody can ask anything for a dollar amount. That doesn't mean it's going to sell."
Weisselberg, testifying as a prosecution witness, is also a defendant in the lawsuit. He took the stand after a recent jail stint for evading taxes on perks he got while working for Trump.
James' lawsuit alleges that Weisselberg engineered Trump's financial statements to meet his demands that they show increases in his net worth and signed off on lofty valuations for assets despite appraisals to the contrary.
Trump attended the first three days of the nonjury trial last week but hasn't returned since.
Weisselberg left a New York City jail six months ago after serving 100 days for dodging taxes on $1.7 million in extras that came with his Trump Organization job, including a Manhattan apartment, school tuition for his grandchildren and luxury cars for him and his wife.
During sworn pretrial questioning in May, Weisselberg, 76, testified that he was having trouble sleeping, started seeing a therapist and was taking a generic form of Valium as he tried to "reacclimate myself back to society."
Trump, in a pretrial deposition in April, said his former longtime lieutenant was liked and respected, and "now, he's gone through hell and back."
"What's happened to him is very sad," Trump said.
In a pretrial ruling last month, Judge Arthur Engoron found that Trump, Weisselberg and other defendants committed years of fraud by exaggerating the value of Trump's assets and net worth on his financial statements.
As punishment, Engoron ordered that a court-appointed receiver take control of some Trump companies, putting the future oversight of Trump Tower and other marquee properties in doubt. An appeals court on Friday blocked enforcement of that aspect of Engoron's ruling, at least for now.
The civil trial concerns allegations of conspiracy, insurance fraud and falsifying business records. James is seeking $250 million in penalties and a ban on Trump doing business in New York. | Real Estate & Housing |
With help from Derek Robertson
As Europe charges ahead on the path to a central bank digital currency, political opposition to a digital dollar is only growing in the U.S.
Though a potential U.S. CBDC remains merely a subject of government study, mainstream Republicans, Silicon Valley libertarians and anti-establishment leftists have all converged in their opposition to the idea, citing concerns over privacy and government control.
These domestic political obstacles leave a lane open for other monetary authorities to influence the design of digital money systems. The European Central Bank, for example, is expected to propose a digital euro design in October, a step that would help establish it as a global leader in the creation of digital sovereign currencies.
“It gives even more weight to the European version, which we’ll see this fall,” said Josh Lipsky, senior director of the Atlantic Council’s GeoEconomics Center. “This is now the first major Western central bank with a model, and for other countries looking to solve technical issues like offline payments, it can become a real standard setter.”
ECB Executive Board member Fabio Panetta recently said in an interview with French newspaper Les Echos that the European Commission is expected to present its proposal for digital euro legislation sometime this month.
Meanwhile, opposition in the U.S. has reignited in recent days after the Securities and Exchange Commission sued the world’s two largest crypto exchanges over alleged securities law violations. Amid the crackdown, SEC Chairman Gary Gensler told CNBC last week, “We don’t need more digital currency,” because the dollar and other sovereign currencies already exist.
Sen. Bill Hagerty, a Tennessee Republican, seized on the comments, echoing a popular line among crypto executives that this year’s crackdown on crypto is intended to ease any future rollout of a digital dollar.
“The Biden Admin wants to kill market innovation to pave the way for a CBDC, which would give the federal gov. unprecedented insight into your life. I will fight to make sure this doesn’t happen,” Hagerty tweeted Wednesday.
The issue has seeped into U.S. political discourse to the extent that Florida Gov. Ron DeSantis, a Republican, reiterated his opposition to CBDCs at his presidential campaign launch event with Elon Musk on Twitter Spaces last month.
The issue is among those that have endeared DeSantis — who signed a bill last month restricting the use of CBDCs in Florida — to a group of libertarian Silicon Valley investors, led by former PayPal executive David Sacks, who are supportive of cryptocurrencies.
Opposition to CBDCs has also gained traction on the anti-establishment left. Former Rep. Tulsi Gabbard — a critic of U.S. foreign policy who left the Democratic Party last year — condemned them during a keynote address at the Bitcoin Miami conference last month.
And Robert F. Kennedy Jr., who is challenging President Joe Biden from the left in the Democratic presidential primary, has attracted interest from several tech moguls with a broad anti-establishment message that includes condemnation of CBDCs.
Most recently, Block CEO Jack Dorsey, who has reoriented his firm around a Bitcoin-centric vision of payments in recent months, has come out in support of Kennedy.
In an interview conducted over the NOSTR social network, a Twitter alternative, Dorsey cited Kennedy’s opposition to the military-industrial complex as a primary motivator of his support. Dorsey also said he agrees with the candidate’s CBDC critique. “We have an open standard for money transmission and currency in Bitcoin,” Dorsey said. “We don’t need another.”
Asked about his plans for supporting Kennedy, the Block CEO told POLITICO he is “not sure what is needed,” but said he is set to talk with the campaign this week.
Opposition to centralized control of money is deep-seated in American political history — dating back to fights over central banking that split the country’s founders — and one that can confound observers.
John Kiff, who worked for 25 years at the Bank of Canada, and now publishes a newsletter tracking global CBDC development, described the U.S. political firestorm as “a bunch of bozos trading bullshit.”
While populist fears that a digital dollar could be used to enhance government power sound to many like the stuff of an Alex Jones “Info Wars” episode, Steven Lubka, head of private clients and family offices at Swan Bitcoin, an investment firm focused on the original digital asset, said that some sophisticated investors voice the same concerns in private. They include fears that a CBDC will be used to implement a Chinese-style social credit system, punish donors to politically disfavored causes, or impose quotas on meat consumption.
“I talk to a lot of very educated, very wealthy, very successful people that have those concerns,” said Lubka.
Lubka estimated that CBDC fears — which he first began hearing from his overwhelmingly American client base about 18 months ago — are now a major factor motivating the Bitcoin investing of about 5 percent of his clients.
A poll released last month by the libertarian Cato Institute found that 34 percent of Americans oppose a Federal Reserve CBDC, 16 percent support it, and 49 percent “don’t know.” Republicans, the poll found, were more likely to be familiar with the concept and to oppose it, than Democrats. The poll found that as Republicans learn more about CBDCs, they become more likely to oppose it, while Democrats become more supportive of CBDCs the more they learn.
In addition to popular opposition, progress on a digital dollar has been weighed down by other bureaucratic and political complications, including the concerns of commercial bankers.
London Tech Week is in full swing, and U.K. Prime Minister Rishi Sunak made big news already this morning by announcing that Google DeepMind, OpenAI and Anthropic will open their models to the British government.
POLITICO’s Laurie Clarke reported from the scene for Pro subscribers, where Sunak said the move would help the U.K. better understand the most powerful AI tools and therefore mitigate their risks. Sunak described AI as “one of the greatest opportunities before us,” and that “the possibilities are extraordinary” when one considers their coincidental arrival at the dawn of quantum computing.
Laurie also notes that Sunak “name-checked semiconductors, synthetic biology and quantum as key areas of focus for the U.K.,” part of the country’s attempt to stake out a middle ground between the U.S. and European Union on tech regulation — something that’s been a bit of a struggle to date. (To hear more of the latest on the transatlantic effort to regulate the tech world, sign up for POLITICO’s Global Tech Day on June 15 that will track the most important issues facing the U.K., EU, U.S., and elsewhere.) — Derek Robertson
The AI explosion has observers in pretty much every sector of the economy worried about its effect on the labor force — with the notable exception of the government agency charged with most closely tracking it.
POLITICO’s Olivia Olander reports this morning in Weekly Shift that the Bureau of Labor Statistics is taking a “wait and see” approach when it comes to projections for how AI will shape the labor market. One employee of the BLS’ employment projections office told Olivia that while there’s “often been talk in the past about how such and such is going to obliterate an industry,” the actual impact usually happens in a slower and subtler way than predicted during the first wave of hype.
The BLS doesn’t expect AI displacement to show up in employment projections anytime soon, and Olivia also cites a July report they published saying there’s “little support” for big structural changes to labor in the near future. Still, the BLS representative told her the technology is “really on [their] radar” and will “consume a lot of… bandwidth going forward.” — Derek Robertson
- Physicians are finding ChatGPT useful in empathizing with patients.
- Sam Altman wants to cooperate with China to reduce AI risk.
- The Dutch are escalating their chip warfare to exclude Chinese students.
- Salesforce is launching a big new AI tool to bolster its cloud computing.
- Europe wants to power the future with synthetically manufactured fuel.
Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Mohar Chatterjee ([email protected]); and Steve Heuser ([email protected]). Follow us @DigitalFuture on Twitter. | Banking & Finance |
There’s still a chance — 1 in nearly 303 million – for a lucky winner to score the Mega Millions jackpot, which climbed to an estimated $1.25 billion this week. If won, this jackpot would be the fourth largest grand prize won in the game's history, according to the Mega Millions website.
While securing the golden ticket is all a matter of luck, holding onto one’s newfound fortune after such a windfall requires some strategy. In fact, compared to the average American, lottery winners are more likely to declare bankruptcy within three to five years, due to a lack of financial planning.
Yahoo News spoke to Andrew Lokenauth, a personal finance expert and founder of thefinancenewsletter.com, for some tips on what to do, and not to do, if you are the jackpot winner. Some answers have been lightly edited for length and clarity.
Someone just won the lottery jackpot, what should they refrain from doing?
Andrew Lokenauth: One: Don't sign the ticket, because once people know who claimed it, everyone is going to be rushing after you. I would say put it in a safe place, and depending on the state you're in, you can claim it anonymously (Delaware, Kansas, North Dakota, Ohio, South Carolina or Maryland).
Two: Don't tell anybody. This leads back into the first point because you could become the victim of robbery, or people can try to extort you.
Go private until things get under control. You'd want to delete your social media or make it private until you figure things out. Legally change your address to a P.O. box. And get a new phone number and email address, because it can be easy to find both online.
What actions should lottery winners take?
Make digital copies (on encrypted storage) or print copies of your ticket. If you lose it or someone steals it ... these are time-stamped items of proof that you actually own the ticket.
You're going to want to look into hiring six different professionals. The first would be a lawyer, who would help you structure a legal entity [and set up a] trust that protects your money.
Who else should you hire?
Personal security. You want somebody to look after and monitor your bank accounts, your investments, but also professional security to protect your safety.
An accountant to give you a recap every month or every week on your money, where it's going, your spending, how your investments are looking, because you're going to want to grow your money.
A financial advisor to help you build and create your wealth so you can pass it on to future generations. Or, if you want to give back, you can set up a charity.
A tax attorney to help you save on your tax bill. The tax code is, I believe, over 75,000 pages. A lot of wealthy individuals use the tax code to their advantage and they pay very little taxes.
An estate planning attorney to help you pass down your wealth to future generations.
Is it better to cash in on the winnings in one lump sum or receive annuity payments?
Due to inflation and the cost of the dollar decreasing over time, it's always good to take the lump sum and then you can work with your financial advisor or a hedge fund [to] strategically manage that money. | Personal Finance & Financial Education |
GR Infra Q2 Review - Execution Impacted Due To Monsoon, Delayed Start Of Certain Projects: Motilal Oswal
FY24 to see muted growth
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
Amidst intense competition in the bidding process and the impact of upcoming general election on National Highway Authority of India's awarding activity, the order inflows is expected to lower than expected. G R Infraprojects Ltd. is attempting to diversify the order book and bid for projects with ticket size exceeding Rs 10 billion.
We have revised our FY24/FY25 earnings per share downward by 11%/10% to incorporate the weak H1 FY24 performance and subdued outlook. With the current order book of Rs 200 billion, we expect G R Infra to clock 7% revenue growth over FY23-25E, with Ebitda margin in the 14-15% range.
We retain our 'Buy' rating with a revised target price of Rs 1,360 based on an SoTP valuation.
We have valued the engineering, procurement and construction business at price/earning of 13 times on FY25E EPS and have valued the built-operate-transfer assets at one time Investment value.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner. | India Business & Economics |
Of the many lofty promises of cryptocurrency, one of the most commendable ones is its potential to bring financial inclusion to underserved users. Nairobi-based Kotani Pay is a crypto payments startup with a vision to make cross-border remittances easier for the large underbanked populations in Africa.
The two-year-old startup is targeting a use case that concerns the livelihood of hundreds of millions of people including in Kenya, Ghana, Zambia and South Africa. The startup, which has closed $2 million pre-seed funding round led by P1 Ventures, with participation from a number of investors including DCG/Luno and Flori Ventures, plans to further expand to Rwanda, Senegal, Ivory Coast, Tanzania, and Nigeria.
According to the World Bank, the Sub-Saharan region will receive an estimated $55 billion in remittances this year. In some African countries, remittances account for as much as 20% of GDP, according to stats from the United Nations.
Despite their key role in the African economy, remittances face an insurmountable challenge: high transfer fees. In some countries, the cut can be as high as 20% of the amount transferred. A number of factors have led to the exorbitant costs, including an underdeveloped banking system, information asymmetry, and currency fluctuation. In many cases, families at home don’t have bank accounts or even the official identifications to open one.
Recognizing these stumbling blocks in the traditional money transfer method, Kotani proposes the use of blockchain to facilitate remittances to Africa. Specifically, it’s tapping stablecoins, which are cryptocurrencies pegged to fiat currencies like USD, to move money internationally at a fraction of the costs of the old way.
Then, to actually cash out the stablecoins one holds on their mobile wallets and pay for things in local currencies, Kotani has built a middleware connecting blockchains to local payment networks, many of which let users send money on feature phones without the internet using a communication protocol called Unstructured Supplementary Service Data (USSD), as this demo shows:
Kotani is offering its technologies as a B2B solution, connecting crypto platforms’ smart contracts on the one side and mobile money APIs on the other. Some of its major crypto partners include Yellowcard, DCG, Fonbank, Celo’s Valora, Mercy Corps, UNICEF Crypto Innovation Fund and Stellar.
Kotani also allows users to “on-ramp,” or convert their local currencies into USD, a solution that’s tailored more to businesses at the moment but could open to retail users in the future with the required licenses, the founder said. The process is enabled by a “network of liquidity providers through partnerships with local forex services and money transmitter operators from whom we source local USD,” according to the co-founder.
Most of the transfers that take place on Kotani — $23 million to date — are inbound payments. Given its enterprise focus, the platform’s average transaction size is $150,000. Like other payment infrastructure providers, Kotani monetizes through an interchange fee, which is on average around 1% of the gross transaction volumes, according to Macharia.
The startup is set to introduce other products including Reconset, a Reconciliation-as-a-Service offering, and Money Ledger, a Ledger-as-a-Service solution, after acquiring Fuhlstack, a Nigerian startup. Fuhlstack founder Lemuel Okoli joins Macharia, and Samuel Kariuki, as Kotani Pay co-founders.
Crypto regulation
With a business that can potentially tip the balance of foreign currency reserves, Kotani is likely already on the radar of regulators. Macharia acknowledged that the central banks in the countries where the firm operates already “monitor these transactions as they oversee all termination points to banking and mobile money services.”
“We either work directly with the local mobile money operators or ride on the charter of regulated partners to ensure that our operations are compliant,” he continued, adding that “the central banks are actually getting excited about some of these use cases and are getting involved as they develop Central Bank Digital Currencies.”
The crypto regulatory landscape is changing rapidly, dampening investor confidence in some regions like the U.S. and creating posivie sentiments in others, such as Asia. Overall, Macharia feels “positive” about regulatory developments on the continent.
“We are seeing positive developments in the Southern part of Africa with Botswana, Mauritius and South Africa all launching Virtual Asset Service Provider Licenses that regulate Digital Asset Fintechs. MiCa passed by the European Union parliament is another positive development as it regulates stablecoin issuers, on ramps and off ramps and exchanges,” he said.
“Based on our engagement with regulators in Kenya such as the Capital Markets Authority, we believe it’s just a matter of time before other markets like Kenya, Ghana, Nigeria catch up.” | Africa Business & Economics |
No prominent UK politician has proposed taxing meat, despite government ministers insinuating it is Labour party policy. Levels of meat consumption are a problem though. And while Conservative MPs might assume it’s a proposition the public would baulk at, research on the feasibility of meat taxes isn’t so clear-cut.
Eating large quantities of red and especially processed meat is unhealthy and increases your risk of developing a number of diseases. Public sentiment overwhelmingly condemns the intensive animal farming practices that generate cheap meat products – even if that concern does not always translate into fewer purchases (researchers have dubbed this the “meat paradox”).
Livestock farming contributes to numerous environmental problems, from deforestation and biodiversity loss to pollution and climate change.
But when a meat tax is suggested to stem these problems, by reducing meat demand and financing more sustainable alternatives, such a policy tends to be interpreted as an assault on consumer freedoms or hard working taxpayers.
In new research, we investigated two claims that are often made in the political debate: that a meat tax necessarily harms low-income households and that introducing one is politically impossible. We found that neither stands up to scrutiny.
Not so taxing
Is a meat tax unfair? Since low-income households spend a larger share of their earnings on food, taxes on meat might be expected to hit them harder.
But whether a tax disadvantages poorer households ultimately depends on how the revenues it raises are used. Channelling it back to consumers in monthly or annual payments directly to their bank accounts, similar to the idea of paying out “climate dividends” from money raised by taxing carbon emissions, would mean poorer people benefit on average.
That is because richer households spend more on meat in absolute terms. Hence, they contribute more to the common pot of revenues that is then shared equally between everyone – as a result, most people on low incomes would have more money than before the tax reform.
Lowering value-added taxes on fruit and vegetables, under discussion in a few European countries, lessens the burden on low-income consumers, although it does not reverse it completely, which is why redistribution is necessary.
Our research found that meat tax rates set at levels comparable to those of carbon pricing in the UK power sector have a very small effect per person, amounting to extra expenditure of less than £10 a month on average.
In any case, price interventions on meat and other emissions-intensive foods are probably needed to meet environmental targets in the food sector. And ensuring they are designed to benefit the under-resourced could be crucial for garnering sufficient support.
Package sensibly
Is a meat tax politically impossible in the UK? Actually, other industrialised countries, facing the same problems with levels of meat consumption, are already doing or planning to do something similar.
New Zealand, where approximately half of all greenhouse gas emissions come from animal agriculture, will price emissions in this sector from 2025, effectively introducing a tax that will predominantly increase the price of meat products.
Unfortunately, the meat industry is no different from the tobacco or oil industries when it comes to spreading misinformation. One study found organisations representing the UK meat industry had led the public astray using a number of framings in their public communication strategies.
These were: “the harmfulness of meat consumption is still open for debate” (it isn’t); “most people need not worry about the health risks” (they should); “you should keep eating meat to be healthy” (there’s no need); “there is no need to cut down on how much meat you eat to be green” (there is).
Public aversion to government intervention on meat is understandable in this context. And consumers alone should not shoulder the burden of making the food system more sustainable.
Fortunately, research shows that it is still possible to win over the public with clever policy packaging. For example, survey data shows financing higher animal welfare standards and phasing out subsidies for environmentally harmful farming practices could sway public opinion on price interventions on meat products.
Other countries have followed this strategy. In Germany, there is strong public demand for improving animal welfare.
A government commission there recommended an animal welfare levy – a uniform tax on all meat products, with the proceeds to be spent on raising livestock rearing standards. Research indicates that, for Germans, animal welfare is a more compelling justification for introducing meat taxes than climate change.
In Denmark, a transition to plant-based diets is not seen as particularly controversial. The parliament recently passed a roughly £80 million fund for developing and promoting plant-based foods.
In the UK, a sugar tax on soft drinks was passed and proved successful in cutting sugar consumption. This shows there is no political barrier to making a meat tax work if political parties allow a sober and nuanced debate on this issue.
To make the cuts to meat consumption required for better public health, greater animal welfare and a stable climate, taxing meat in some form is inevitable. To make such a measure more palatable, a winning formula would deliver on public demand for higher animal welfare standards, redistribute the revenue to benefit low-income consumers and shift farming subsidies towards fruit and vegetables.
And let’s think of a different name for it. An animal welfare levy, or sustainable farming levy, might just work.
Don’t have time to read about climate change as much as you’d like?
Get a weekly roundup in your inbox instead. Every Wednesday, The Conversation’s environment editor writes Imagine, a short email that goes a little deeper into just one climate issue. Join the 20,000+ readers who’ve subscribed so far. | United Kingdom Business & Economics |
- Struggling space company Astra disclosed in a securities filing late Friday that it defaulted on a recent debt agreement and may not be able to raise needed cash.
- Astra twice last month failed to meet minimum cash reserve requirements associated with a $12.5 million note issuance to New Jersey investment group High Trail Capital.
- The company warned it "can provide no assurance that it will be able to consummate any additional transaction in a timely manner, or at all."
Astra twice last month failed to meet minimum cash reserve requirements associated with a $12.5 million note issuance to New Jersey investment group High Trail Capital.
The debt raise first required that Astra have "at least $15.0 million of cash and cash equivalents" on hand. That liquidity requirement was adjusted after Astra failed to prove compliance a first time, to require "at least $10.5 million of unrestricted, unencumbered cash and cash equivalents."
Having fallen out of compliance a second time, Astra now owes $8 million on the aggregate principal investment.
While the company is "in continued discussions with a number of other investors," it warned it "can provide no assurance that it will be able to consummate any additional transaction in a timely manner, or at all."
Shares of Astra were little changed in after hours trading from their close of about 92 cents a share. The company performed a 1-for-15 reverse stock split in September to avoid a Nasdaq delisting, which temporarily brought Astra stock above $1 a share.
The company cut 25% of its workforce in early August to shift focus from its rocket development to its spacecraft engine production. It's expected to report third-quarter results after market close on Nov. 13. | Banking & Finance |
Subsets and Splits