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A major shake-up of the way alcohol is taxed could leave many drinks costing more from Tuesday.
Under what the Treasury says are new "common-sense" principles, tax is being levied according to a drink's strength.
Duty will increase overall, with most wines and spirits seeing rises, but will fall on lower-alcohol drinks and most sparkling wine.
Taxes on draught pints will not change, an additional measure designed to support pubs.
Alcohol duties have been frozen since 2020. These changes were originally scheduled for February this year but were postponed by Chancellor Jeremy Hunt as the cost-of-living crisis continued.
Now with prices still rising, though at a slower rate, the government is going ahead with a 10.1% rise in alcohol duties, and is also overhauling the system.
Drinks with alcohol by volume (ABV) below 3.5% will be taxed at a lower rate, but tax on drinks with ABV over 8.5% will stay the same, whether it is wine, spirit or beer.
As a result, sparkling wine, which was previously taxed at a higher rate than still wine, will be 19p cheaper, for a standard-strength bottle, if retailers pass on the tax changes by lowering prices. A can of pre-mixed gin and tonic would be 5p cheaper.
Tax on a typical bottle of still wine with ABV 12% will go up by 44p, but on wine with 15% ABV, tax will rise by 98p, according to the Wine and Spirits Trade Association (WSTA).
Spirits and fortified wines, such as sherry and port, will see steep rises.
"The changes we're making to the way we tax alcohol catapults us into the 21st century, reflecting the popularity of low-alcohol drinks and boosting growth in the sector by supporting small producers financially," the chancellor said.
The government said the new system of duties had been made possible by the UK's departure from the EU, and that it would support "wider UK tax and public health objectives".
Prime Minister Rishi Sunak said lowering duties on draught beers and ciders would "reduce the price of a pint" and support pubs.
Tax on draught beer in pubs will be up to 11p lower than tax on supermarket beer as a result of the changes, the government said.
'Inflationary misery'
The WSTA said the measures represented the biggest tax rise on a standard bottle of wine for nearly 50 years.
The trade association said the government had chosen to "impose more inflationary misery on consumers".
It warned that other economic pressures, including high inflation and "rocketing prices" for glass, would mean that many businesses, especially smaller firms, would not be able to stay afloat following these changes.
"Ultimately, the government's new duty regime discriminates against premium spirits and wine more than other products," WSTA chief executive Miles Beale said.
Wine from hotter countries, where the sun naturally produces higher alcohol content, would be penalised, he added.
The overhaul of alcohol excise is being introduced in two stages, with a second adjustment coming in February 2025, which will apply a full sliding scale of tax levels according to alcohol content.
The British Retail Consortium said its latest monthly survey of shop prices showed that prices were rising more slowly in July (at 7.6%), compared to June when they were rising at 8.4%.
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Inflation
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Rishi Sunak has been confronted by a junior doctor over the NHS staffing crisis, who told him: "That's your fault."
The Prime Minister was hauled over the coals by A&E registrar Olivia in an LBC phone-in when he sought to blame strike action for spiralling NHS waiting lists.
Olivia, from Newcastle, who said she has been a junior doctor for 10 years, told the PM: “Frontline services are so stretched that we are in the position that you have had almost all healthcare workers going on strike this year. How do you think your refusal to negotiate with us improves morale or standards of care?”
The squirming PM told her: “You and I are sadly going to just disagree on this but I’m proud of what we’ve done, we’ve invested record sums in the NHS since I became Prime Minister.” He added: “Over a million NHS workers have accepted the Government’s pay deal, many of them on salaries and incomes far lower than consultants and indeed Olivia and her colleagues, that’s just the reality of it.”
He went on: “There are a few exceptions including junior doctors and consultants - that’s what’s causing the waiting lists to go up.” The PM insisted he had “done my bit by backing the NHS for the Long-term Workforce Plan and record funding” - and told her to read the document.
But she hit back: “I think it is amazing that we are blaming the increase in waiting lists on doctors going on strike. You’re losing staff because we are undervalued, and it’s not just doctors, it's everyone, we are all leaving. A happy workforce is your responsibility. You’re the Prime Minister, you’re the Government, your staff aren’t happy - that’s your fault and ultimately that’s not good for patients.”
Earlier, Mr Sunak blamed striking medics for fuelling waiting times, as the number of patients on lists soared from 7.2 million to 7.9million.
“If you look at what happened we were actually making progress, we eliminated the number of two-year waiters - people waiting a really long time - we practically eliminated the number of people waiting one-and-a-half years, and we were making progress on bringing the overall numbers down,” he said.
"What happened? We had industrial action, we've got strikes."
Mr Sunak was also challenged by Jo, a small business owner in his Richmond constituency, who said Tory policies had meant independent firms were being forced to "shut up shop". She said four well established independent businesses in the area had announced closures in the last week as "keeping going is just no longer financially viable".
Jo told the PM: "Everything from increased taxes, soaring cost, impact of Brexit, difficulty finding stuff, all combined with the fact that it was your Government that crashed the economy and left people without any spare disposable income to spend." She demanded: "What are you going to do about the fact that your Tory policies are causing small businesses to shut up shop?"
The Prime Minister heaped blame for their misery on spiralling energy bills - but claimed some firms had told him that "business is good".
Mr Sunak said he'd been told by landlords that business was on the up on a visit to a London beer festival on Tuesday. He failed to mention how he'd been heckled by a publican for posing for a photo opp pulling a pint while raising alcohol duty.
He said. "I've been out and about a lot in the last week or two.. I was actually at a beer festival yesterday, talking to landlords, breweries, many of them were telling me business is good, that footfall is up, that they are seeing confidence return."
He said it was "obviously sad" that some firms were closing but added: "Every business has different circumstances."
Another caller, Jack, a dad-of-four, was told to "talk to his bank" when he raised his crippling mortgage hike.
Jack said he is facing a rise from £1,500 to £2,800 a month in mortgage repayments and asked: “Why do I feel like I’m being unfairly punished?” He added: "I'm already on a 35-year term. I'm in my early 30s. I don't want to be paying it off until I'm in the grave."
Mr Sunak responded: "Jack, the best way for me to help you and your family and everyone else is to get inflation down. It’s not abstract - it’s inflation that is causing everyone problems with their bills. The quicker we get inflation down the quicker we can ease some of these pressures."
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Workforce / Labor
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Labour has ruled out offering universal free childcare for children over nine months old but is considering a means-tested offer, sources have told the Guardian, as the party strives to prove its fiscal credibility.
Bridget Phillipson, the shadow education secretary, told the Sunday Times earlier this year that Labour would guarantee childcare from the end of parental leave until the end of primary school, saying her reforms would resemble the “birth of the NHS”.
But shadow ministers are exploring options that backbenchers warn will fall short of that ambition. Instead of offering free or very cheap childcare to every family with a child over nine months old, Labour is looking at giving more support for poorer families, while tapering it off for those on higher incomes.
Labour officials are working on their plans even as the party’s leadership tries to reduce spending commitments in an attempt to ward off attacks about the party’s tax and spend policies.
A Labour spokesperson said: “An expansion of childcare to all children is not Labour’s policy. Last year Labour announced that as part of its plans to modernise childcare that we will deliver free breakfast clubs for all primary school pupils in England, paid for by closing the non-dom tax loophole, and allowing councils to offer more childcare provision where they are able to do so.
“Everything in our manifesto will be fully costed, fully funded, and subject to our fiscal rules.”
The UK has one of the most expensive childcare systems in the world, with some parents spending as much as 80% of their take-home pay on care for young children.
But while the Conservative government plans to expand the current offer of 30 hours’ worth of free childcare a week so that parents can claim it before their children turn three, Labour has vowed to replace the system entirely, saying it does not pay enough to providers to offer the necessary places.
Labour officials are now fleshing out the details of that policy, with sources saying they are looking at a range of options to extend support to as many families as possible without breaking the party’s pledge to ensure government debt is falling by the end of the parliament.
Party sources say they are keen to eliminate the gap that exists between the end of parental leave and when a child turns three and qualifies for the free-hours programme. One of the most effective ways to do this would be to increase means-testing, they say.
At the moment all families with an expected annual household income of below £100,000 qualify for the full 30 hours of free childcare. Labour officials are looking at whether that could be adjusted so that some families below that threshold do not get the full allocation, as a way to pay for more support to families with younger children.
Another option would be to give schools money to offer subsidised, but not free, childcare places. Estonia, for example, offers guaranteed kindergarten places from the age of 18 months at heavily subsidised rates, with fees in some settings equivalent to about £50 a month.
While Labour officials say they never promised universal childcare from nine months onwards, some backbenchers are concerned the eventual proposals will not live up to Phillipson’s rhetoric.
One Labour MP said they were concerned the childcare policy had become an “easy target” for the party as it tried to demonstrate its fiscal responsibility.
Last week Rachel Reeves, the shadow chancellor, wrote to shadow ministers warning them not to make any unfunded policy announcements. And on Friday, she announced the party would not meet its flagship promise to spend £28bn on green energy schemes until several years into the next parliament, drastically cutting the scope and cost of the plans.
Reeves has also told shadow ministers that the Green Prosperity Fund would be the only pot of money available for new capital projects, sparking a flurry of lobbying as senior figures in the party push to earmark money for a range of projects, from schools to housing.
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United Kingdom Business & Economics
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US regulators are proposing that big banks increase their capital levels to protect against future blowups following a regional banking crisis, one of the most sweeping overhauls of how lenders are regulated since the 2008 financial crisis.
Banks affected by the changes will see an aggregate 16% increase in their capital requirements. Regulators say the increase would primarily affect the largest banks and that most have enough capital already to comply. Capital is the buffer banks have to hold to absorb future losses.
Regulators also proposed changes in how these banks assess risks and widened the scope of the new rules to institutions with as few as $100 billion in assets, meaning roughly 30 banks would be subject to the same calculations.
The impact will differ from bank to bank depending on their operations. Agency officials said the eight largest banks that have huge trading desks and coast-to-coast franchises, such as JPMorgan and Bank of America, will see capital requirements rise by 19% on average.
Officials argue the changes are needed to make lenders stronger, more resilient and better prepared for shocks like the crisis of this spring, when the failures of Silicon Valley Bank, Signature Bank and First Republic triggered deposit withdrawals across the banking world.
"Recent events demonstrated the effects that stress at a few large, regional banking organizations could have on the stability, public confidence, and trust in the banking system," said acting Comptroller of the Currency Michael Hsu.
Regulators will accept comments on this proposal through Nov. 30. Some parts of the proposal would be phased in over three years, starting in July 2025. All rules would be in place by July 2028.
Some doubts within the Fed
The proposal followed a nine-month-long review conducted by Federal Reserve Vice Chair for Supervision Michael Barr.
Fed Chair Jay Powell supported putting this new capital proposal out for comment but said in statement released Thursday that regulators need to weigh the costs of capital increases overall and for specific areas, including capital markets and operational risk.
"While there could be benefits of still higher capital, as always we must also consider the potential costs," he said, noting that the proposal is tougher than international standards, could lead to a decline in liquidity for capital markets and push activities into the shadow banking system.
"This is a difficult balance to strike, and striking it will require public input and thoughtful deliberation."
Two Fed governors, Christopher Waller and Michelle Bowman, issued separate statements that were critical of the proposal.
Waller said he voted against releasing it for public comment, stating that some elements are already accounted for in annual Fed stress tests and that the new standards could put US banks at a disadvantage when competing with international rivals.
Waller also wrote that the proposal could cause lenders to push higher capital costs on consumers and potentially narrow the scope of US banking activities.
"I am not convinced that it improves the resiliency of the financial system," he added. "At the same time, it will increase costs for families and businesses and could impede market functioning. I don’t think those costs are worth bearing without clear benefits to the resiliency of the financial system."
Bowman said she believes the proposed higher capital levels would hurt lending and liquidity in markets and that they wouldn’t have addressed the problems that contributed to the regional bank failures earlier this year.
Her concern is that the new rules will force smaller banks to merge, harming competition, and would prefer to address any risk management issues through better regulatory supervision and enforcement actions when necessary.
"While there is more to learn about the recent bank failures, it seems apparent that these failures were caused primarily by poor risk management and deficient supervision, not by a lack of capital," she said.
Bank pushback
The proposed changes unveiled Thursday are part of the US version of an international accord known as Basel III that was developed by the Basel Committee on Banking Supervision, and follow a nine-month-long review conducted by Fed vice chair for supervision Michael Barr.
The goal of the Basel committee – which was convened by the Bank for International Settlements in Basel, Switzerland – was to set global regulatory capital standards so that banks would have enough in reserve to survive crises.
The last version of this accord was agreed to in 2017, but plans to roll it out in the US were delayed by the COVID-19 pandemic.
The new capital proposals are expected to face pushback from the banking industry, which argues that lenders are much more resilient than they were during the 2008 financial crisis and that higher requirements could restrict lending.
"As you raise capital requirements, it makes loans and capital markets more expensive, and that’s permanent," Greg Baer, president of the Bank Policy Institute, told Yahoo Finance. "It becomes a permanent loss to the economy."
Agency officials said regulators felt that the increases overall were modest and would be offset by the benefits of having a more resilient banking system.
'Risk weights' and paper losses
A key component of these new rules will be higher "risk weights" applied to certain assets banks hold.
The riskier the assets are, the higher the weights and the more capital banks will be required to set aside to absorb any future losses.
These assets can range from Treasuries and mortgages to derivatives and cryptocurrencies.
Another important change is how banks assess future risks. Banks will no longer be able to rely on internal models to estimate how much they could lose on loans — and therefore how much capital should be held against assets such as mortgages.
The fear from regulators is that the internal bank models can underestimate these risks. Instead, regulators will impose uniform standards.
Regulators are also concerned about how banks evaluate the risks from market swings, trading losses and unexpected operational developments such as litigation.
Thus banks would have to model market risks at the level of individual trading desks for particular asset classes, instead of at the firm level. They can continue to use their own internal models for that evaluation.
Banks with big trading desks could see higher capital requirements, as a result.
As for unexpected operational events, such as litigation expenses, banks would have to use a standardized approach provided by regulators. Banks worry this will punish lenders that rely on non-interest fee income, such as credit card fees.
Another big change announced Thursday is that banks with $100 billion in assets or more would have to count any unrealized available-for-sale securities losses against their regulatory capital.
That last rule would reverse a policy put in place last decade when US supervisors decided most small and mid-sized institutions could opt out of deducting these paper losses on bonds from key regulatory capital levels.
In essence, these banks were allowed to report assets that were stronger in theory than they would be in practice.
As Silicon Valley Bank — and the broader investing public — found out in March.
Banks with $100 billion or more in assets will also have to comply with two other requirements that were previously applied to larger banks: a supplementary leverage ratio and a countercyclical capital buffer.
Agency officials said another way to look at all of the changes unveiled Thursday is that the banks that have to comply will be asked to hold an additional 2 percentage points of capital.
They said that most banks have enough capital now but those that don't would be able to build the required amounts in two years.
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Banking & Finance
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(Bloomberg) -- A decade ago, Paul Singer did battle with the government of Argentina — and won. Next week, the notoriously pugnacious hedge fund boss is taking on a bastion of the City of London, the 146-year-old London Metal Exchange.
Most Read from Bloomberg
For Singer, the case is personal, say several people familiar with the matter. When on March 8 last year the LME decided to cancel billions of dollars in nickel trades as prices skyrocketed, Singer was appalled and affronted, seeing it as a perversion of the free market with few precedents in the modern history of finance.
Within a day, his fund Elliott Investment Management had hired lawyers to pursue action against the exchange.
Now, Singer’s fight is heading for a climax, as lawyers for Elliott and trading firm Jane Street take to the High Court in London to argue their case against the LME in a three-day hearing starting Tuesday.
Elliott is better known for its battles over sovereign debt, like the case against Argentina that included seizing one of the country’s warships, and for its activist investing – taking stakes in companies and agitating for change. Its aggressive tactics are the stuff of Wall Street lore. But Elliott is also a sizable player in commodity markets, two of the people said, trading across energy, metals and agriculture as well as more obscure markets like carbon credits.
In the run-up to the nickel crisis on the LME, an Elliott commodities portfolio manager called Tom Houlbrook had built up a bullish position in the metal, the people said. Houlbrook has worked at Elliott for 17 years, according to his LinkedIn profile. Elliott declined to comment, and the hedge fund hasn’t publicly disclosed all the details of its nickel position.
However, it had amassed a sizable position in call options in nickel ahead of the March crisis, according to legal filings and people familiar with the matter, meaning it stood to profit if prices spiked.
Which they did. Nickel surged in the early days of March, hitting a record on March 7 amid fears that Russian supplies could be shut off and a building short squeeze focused on Chinese tycoon Xiang Guangda and his company Tsingshan Holding Group Co.
In the early hours of March 8, prices more than doubled in a few hours. And by then, Elliott was selling. Over the course of the night, Elliott sold 9,660 tons of nickel for a total of $728 million — an average price of just over $75,000 a ton that effectively locked in what was set to be a sizable profit on its bullish bet.
But any sense of satisfaction only lasted a few hours. At 8:15 a.m. London time, the LME suspended the market. Just after noon, it retrospectively canceled all trades that had taken place that day.
Singer was incensed. His fellow billionaire hedge fund founder, Citadel’s Ken Griffin, described it as “one of the worst days in my professional career in terms of watching the behavior of an exchange” — a view that Singer shares, according to the people.
In the aftermath of March 8, Elliott’s lawyers engaged in a testy back-and-forth with the LME. At one point, it wrote to the LME jointly with AQR Capital Management – whose co-founder Cliff Asness has been one of the exchange’s most vocal critics – according to a filing.
But while Elliott proceeded to formally challenge the LME’s decision through a judicial review, AQR did not (although it has since filed a separate claim against the LME that could benefit if Elliott’s action is successful). That has left Elliott’s $456 million case as the standard bearer for the hedge fund industry in its battle with LME. Jane Street, with a much smaller claim of $15 million, was the only other party to mount such a legal challenge against the LME’s decision before a three-month deadline.
The LME itself is still wading through the fallout of the crisis. Beyond the legal challenges, it is also facing a rare probe from the UK’s Financial Conduct Authority over its handling of the debacle, while the nickel market itself has yet to return to normal.
Still, Elliott’s case — the first time it has pursued a judicial review — is likely to be an uphill struggle, say legal experts. Judicial reviews exist in the UK to review the decision-making of public bodies, a category that applies to the LME because it performs a regulatory role in the metals markets. But they focus on the way in which a decision has been made, rather than on its outcome.
Elliott and Jane Street will attempt to establish that the LME’s decision-making on the morning of March 8 was unfair, irrational, or motivated by improper motives. It’s an approach that has had some success before – United Co. Rusal International PJSC successfully persuaded a judge in 2014 that the LME hadn’t considered all viable alternatives when it changed its warehouse rules, although the decision was later overturned on appeal.
Circuit Breaker
While criticism of the LME has focused on the decision to cancel billions of dollars of trades, the exchange made several other controversial decisions during the crisis.
The market was left open even after the LME’s clearinghouse stopped making intraday margin calls and several members failed to pay margin calls on time on March 7, the LME has previously disclosed. On March 8, the LME’s operations staff in Asia suspended the use of its “price bands,” a form of circuit breaker designed to limit extreme moves – a decision that may have exacerbated the price spike.
Read: LME Says It Saved Nickel Market From $20 Billion ‘Death Spiral’
Based on its earlier filings, Elliott is likely to argue that the LME rejected alternative courses of action that would have had a less damaging outcome for the market than its decisions on March 7 and 8.
The LME will argue that its rulebook gives it broad powers to intervene to maintain market order, and that making it liable for Elliott’s losses could threaten the viability for all exchanges which perform a similar regulatory function, according to a person familiar with its thinking.
Still, Singer is used to fighting battles few others think he can win. It took him 15 years to secure more than $2 billion in payment from Argentina. Now, he’s determined to see the dispute with the LME through to the end, according to one of the people. Even if he loses next week’s case, he may be able to appeal the decision — and his past record suggests he’s unlikely to give up until every possible angle of attack has been explored. As he once told Bloomberg News: “If you don’t defend your rights, what do you have?”
(Updates to add regulatory probe in 14th paragraph.)
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Stocks Trading & Speculation
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It was the news that spread around nurseries and parents quicker than an outbreak of chicken pox. When Jeremy Hunt announced his £4 billion childcare expansion policy, it seemed like cause for celebration for campaigners and cash-strapped parents alike. But almost immediately there was anger from nurseries about what these plans will do to a system already in crisis, and frustration from some parents that the changes will take too long to benefit them. If this was Hunt’s “rabbit in a hat” moment for the Spring Budget, then by the end of last week, it looked a bit Watership Down.
Childcare looks set to be the major battleground at the next election, with Labour promising an overhaul of the system. The shadow education secretary, Bridget Phillipson, has likened the “scale and ambition” of Labour’s childcare reforms to the creation of the NHS — although details haven’t yet been forthcoming. On the surface, it looked like Hunt might have beaten Labour to the punch with the largest expansion of free childcare England has ever seen.
Yet many who work in the early-years sector say the Government’s plans could bring the whole system to collapse. Kelly Salambasis, one of the owners of More2 nurseries in Greenwich, was shocked by the announcement. “It feels like the sector just hasn’t been consulted at all,” she says. “We’ve been actively campaigning not to relax ratios [from September, childcare settings will be able to operate with one adult to five children, not four] because it compromises on safety and quality of care. I don’t want to sound like a greedy nursery worker and we have complete sympathy for parents because we know how expensive it is. But the fact is, these ‘free’ hours aren’t actually free, they’re funded and only partially so. In most boroughs there’s a shortfall of at least £2 an hour per child.”
Currently, nurseries use what they charge parents of under-threes to make up the difference, but if the free hours scheme is extended they won’t have that option. The Women’s Budget Group has estimated that fully funding current hours for three- and four-year-olds alone would cost an extra £1.82 billion — far greater than the amount promised in the Budget. Instead, the Government is planning to invest £84 million, which works out as an extra 21p an hour per three- and four-year-old.
So while it seemed like good news for parents — the UK has the third highest childcare costs in the world — it was very bad news for nurseries, 83 per cent of which already expect to make a loss or only break even this year.
“This is a shameful policy of appeasement which is going to crucify a sector already on its knees,” says Neil Leitch, chief executive of the Early Years Alliance. “It’s all very well saying you’ll extend the free hours scheme, but fund it properly or there simply won’t be enough places when nurseries keep closing at the rate they are.” Indeed, a study by the charity Coram found that only half of local authorities in England said they had sufficient childcare places to meet the needs of full-time parents and a 2021 report from the Mayor’s office found that two-thirds of London’s nurseries were facing closure.
So if Hunt’s “landmark” plan to get more women back to work is shambolic, what should be done instead? Neil Leitch would like to see a dedicated early years cabinet minister. Kelly Salambasis suggests a scheme such as TeachFirst, to encourage young people to consider a job in early years education. Maggie Bolger, owner of the b_together nursery in north London, says she would prefer it if parents received funding from the Government directly to spend as they wished, a plan floated by Liz Truss before she left office.
“Give it to the parents and then they can see how little funding we actually get for these ‘free’ places and they can deal with all the admin and bureaucracy,” she says. “We have a saying in our industry of ‘Champagne nurseries, lemonade funding’. We know how important early-years development is to a child, and yet we don’t respect the people that work in this sector and the wages are so low. Teachers have a starting salary of £28,000; in nursery settings you’re lucky to make minimum wage. No decent setting is going to relax ratios because it’s not safe.”
Helene Mark, who owns Outdoor Owls nursery in Richmond and Putney, thinks we need a total overhaul of early-years education. “It’s not about these misleading ‘free’ places or even ratios necessarily,” she says. “We need to make early-years settings part of the public sector, not charge them business rates, and then subsidise them properly so it’s affordable. We should get rid of Ofsted inspections which are needlessly stressful for providers. Nursery workers need unions like teachers do, and they should be paid to match their skills and the importance of their job.”
There were also those who felt that Hunt’s announcement had forgotten the parents who want to stay at home. “Where is the support for them or are they just ‘economically inactive’?” says Sarah Ockwell-Smith, author of the forthcoming book Because I Said So! Why society is childist and how breaking the cycle of discrimination towards children can change the world. “Yes, it’s great that the Government is finally talking about childcare, but this announcement is not a win. It is a platitude with a murky neoliberalism underbelly. And all this focus on childcare takes away from the bigger problems many families are facing right now, such as not being able to afford food or heating or ever afford their own homes.”
This announcement is not a win — is a platitude with a murky neoliberalism underbelly
Although Hunt’s extension of the free hours scheme will no doubt appeal to squeezed millennials — the Chancellor claims it will cut families’ childcare costs by 60 per cent — those who are really struggling may not even be able to take advantage of it. Kirsty Lowe, co-founder at MammaKind baby bank in south-east London, says many families aren’t able to take up existing free nursery places because they can’t afford nappies, spare clothing or outdoor gear. “These things may sound small but are a real barrier for families in poverty,” she says. “Perhaps increasing childcare hours is a huge help for many, but it won’t solve the problem for everyone.”
And what do most parents and prospective parents think? Although my WhatsApp groups were full of party blower emojis from friends who, like me, spend a small fortune on nursery fees, for most of us it’s too little, too late. It won’t be until September 2025 that all under five-year-olds are entitled to free hours, or 2026 that all schools will offer wraparound care. Both those dates are well after the next election, so it may not even be this Government which has to deliver on these promises.
Jenna*, an editor in Hackney, is the mother of three-year-old twins, and says her family has gone into debt just so she could go back to work. She’s far from alone — research released this week by the think-tank Nesta shows that some single parents spend up to 80 per cent of their post-tax income on childcare.
“We’ve probably spent around £60,000 in the last two years on childcare alone,” she says. “It’s made our outgoings more than we earn so every single month we go into debt. Now, we’re thinking of borrowing against our mortgage.
“Although I’m pleased for future families, this announcement is depressing for us. There needs to be a better system or even something like a 0 per cent interest loan for childcare costs which you could pay back gradually.”
Emily Milne, a stage manager from east London, has a six-month-old son, Sidney. “I can’t afford to go back to work as childcare would cost us £27,000 which is more than I earn and this funding won’t start in time for us,” she says. “I’m gutted as I love my job. I think there’ll be a lot of women like me, giving up their jobs while they wait for this to kick in. I feel like I’ve been forced back into the home like some Fifties housewife.”
* Some names have been changed
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Consumer & Retail
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Amid the debate over the dangers of widespread AI development, an important concern may have been overlooked: the huge amount of energy required to train these large language models.
A new study published this week suggests that the AI industry could consume as much energy as a country like Argentina, Netherlands, or Sweden by 2027. What’s more, the research estimates that if Google alone switched its whole search business to AI, it would end up using 29.3 terawatt-hours per year — equivalent to the electricity consumption of Ireland.
The paper was published by Alex de Vries at the VU Amsterdam School of Business and Economics.
In 2021, Google’s total electricity consumption was 18.3 TWh, with AI accounting for 10%–15% of it. However, the tech giant is rapidly scaling the AI parts of its business, most notably with the launch of its Bard chatbot, but also the integration of AI into its search engine.
However, the scenario stipulated by the study assumes full-scale AI adoption utilising current hardware and software, which is unlikely to happen rapidly, said de Vries. One of the main hurdles to such widespread adoption is the limited supply of graphics processing units (GPUs) powerful enough to process all that data.
While entirely hypothetical, the study casts light on an often unstated impact of scaling up AI technologies. Data centres already use between 1-1.3% of all the world’s electricity and adding AI to existing applications like search engines could rapidly increase the share.
“It would be advisable for developers not only to focus on optimising AI, but also to critically consider the necessity of using AI in the first place, as it is unlikely that all applications will benefit from AI or that the benefits will always outweigh the costs,” advised de Vries.
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Energy & Natural Resources
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Zee Calls Report Indicating Sony Merger Collapse 'Factually Incorrect'
News agency Bloomberg reported on Tuesday that the two-year-old merger plan risked collapse over leadership issues.
Zee Entertainment Enterprises Ltd. denied a recent media report indicating risks to its planned merger with Sony Group Corp.’s India unit, calling it "factually incorrect."
The news agency Bloomberg reported on Tuesday that the two-year-old merger plan risked collapse over leadership issues.
Zee said it is continuing to work towards a "successful closure" of the proposed merger, according to the scheme approved by the Mumbai bench of the National Company Law Tribunal in its exchange filing on Wednesday.
According to the Bloomberg report, Zee is insisting that its Chief Executive Officer Punit Goenka—also its founder’s son—helm the new entity as agreed in the pact signed in 2021, while Sony is wary of his appointment given a regulatory probe against Goenka.
The Sony-Zee deal sought to create India’s biggest entertainment company with the financial muscle to challenge global powerhouses, including Netflix and Amazon.com Inc., as well as local conglomerates such as Reliance Industries Ltd.
The proposed merger has received almost all regulatory approvals.
Sony will own a 50.86% stake in the merged entity, and Goenka’s family will own 3.99% if the deal goes through, with public shareholders in possession of the remaining stake, according to the 2021 agreement.
Shares of the Subhash Chandra-founded media company declined 2.38% on Wednesday to close at Rs 249.7 apiece after the Bloomberg report. The clarification came after market hours.
In the nearly two years since the merger was announced, the scrip has lost value by as much as 26%.
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Asia Business & Economics
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MILAN, July 5 (Reuters) - The European Central Bank could bring inflation back in line with its price stability goal by holding rates for a certain period of time rather than hiking them more, one of its policymakers said on Wednesday.
Addressing the annual general meeting of the Italian Banking Association (ABI), ECB Governing Council member Ignazio Visco said rates had reached restrictive territory.
The ECB could take the necessary time to assess the impact of its rate increases so far, the Bank of Italy chief said, rather than pressing ahead.
The ECB has raised rates at each meeting over the past year, taking its deposit rate to 3.5%, and promised more tightening as it attempts to curb inflation still running at three times its 2% target.
Visco, whose term at the Bank of Italy concludes at the end of October, is considered one of the most dovish members on the ECB's governing council.
"I don't understand and I continue to disagree with comments that have been made also recently which would indicate that the risk of more - rather than less tightening is preferable," he said, taking aim at more hawkish ECB members.
"While it's necessary to remain very vigilant and keep a steady course, it's also necessary to have large doses of prudence and patience to assess, and anticipate, the impact of the monetary tightening in place since last year," he said.
However Visco's dovish position has gained little traction in Frankfurt.
The International Monetary Fund said earlier this month the bank should continue to raise rates to bring down inflation.
Euro zone inflation is so persistent that interest rate hikes beyond July may still be needed, Slovenian policymaker Bostjan Vasle said last week, joining a growing camp of policymakers making the case for even tighter policy.
In the text of his speech, Visco said that while the restrictive monetary policy was "warranted and needs to remain in place" it is also possible to limit the damage it does to economic activity so as to avoid excessive downward pressure on prices over the medium term.
Our Standards: The Thomson Reuters Trust Principles.
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Zambia is close to resolving a dispute with Vedanta Resources (VEDJB.UL) over its Konkola Copper Mines, with a deal over the future of the partly state-owned unit "imminent", its mines minister said.
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Interest Rates
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New gambling rules are being proposed by the UK government for the first time since the invention of the smartphone. But these “reforms for the digital age” are silent on cryptocasinos, where you can bet online using cryptocurrencies. These platforms have seen remarkable and potentially dangerous developments since the government’s consultation for its reforms began in late 2020.
The first peer-reviewed paper on cryptocasinos was only published in October 2020. The gambling games discussed were laughably simple, such as bets on virtual coin flips or dice rolls. Such activities that might appeal to bored friends on a long journey must have seemed benign compared to the world of in-play sports betting and online slots available using conventional currencies.
But fast-forward a year and cryptocasinos had evolved substantially. In April 2021, Premier League football team Southampton signed a £7.5 million a year sponsorship deal with sportsbet.io, which specializes in allowing gamblers to make sports bets during matches with cryptocurrencies.
Shortly afterwards, the rapper Drake announced a partnership with Stake.com, another major cryptocasino, which would see him livestreaming six-figure wagers across sports and online casino games. Stake.com then became Everton FC’s new shirt sponsor in June 2022, causing a significant backlash among football fans and gambling harm advocates.
However, most of this opposition focused on the rise of gambling shirt sponsors in football, which will be addressed by the Premier League’s recent announcement banning them from the 2026–27 season onwards. Yet it’s not enough to just think of cryptocasinos in the same way as any other online gambling operator; they pose unique risks that have mostly gone unnoticed.
The risks
First, cryptocurrencies carry inherent risks. Becoming a crypto millionaire is now a common get-rich-quick dream, but some people get so obsessed with the high-stakes trading that they end up seeking treatment, just like with gambling addiction. It is also easy for crypto assets to disappear, such as via the collapse of the crypto exchange FTX in November 2022.
It may be that people are more willing to gamble with crypto than with more tangible forms of money. This would be analagous to the fact that digital deposits at online casinos are thought to encourage gambling more than casino chips.
In addition, cryptocasinos tend to be lightly regulated. They often obtain licenses from the Caribbean island of Curaçao, which has a more lax approach than, for example, Great Britain’s Gambling Commission. Platforms operating within Great Britain still have to abide by Gambling Commission rules, but there are workarounds.
For instance, the Gambling Commission does not allow platforms to accept crypto deposits. As a result, cryptocasinos like Stake.com redirect mainland British visitors to a “white label” version of the site that only allows deposits in conventional currencies.
But UK users can easily reach the crypto version of Stake.com (licensed in Curaçao) by using a virtual private network (VPN) to make it appear that they are from a different country, as demonstrated by investigative reporters. Stake.com responded that all operators in the sector experienced users trying to bypass such restrictions using VPNs, and pointed to an example of one user that it had shut down.
We also contributed to research that found that 22 frequently visited cryptocasinos did not even require a VPN for British users to evade such site restrictions. These sites were also part of a wider group of 37 cryptocasinos (out of 40 surveyed) that didn’t require proof of ID before allowing crypto deposits.
Meanwhile, cryptocasinos are often accessible from countries such as China where online gambling is illegal. The fundamental anonymity of cryptocurrencies makes it harder for law enforcement to intervene in these situations.
The lax regulation in this area is also apparent when you look at the safer gambling messaging. The messaging used by conventional online gambling operators is bad enough—many introduced a very weak “take time to think” message a couple of years ago, for example. But the cryptocasinos are worse, using wholly inappropriate messages emphasizing potentially huge winnings. For instance, BetBigDollar.com tells its customers:
“Yes, there is a chance of winning vast amounts of money, but, if not treated as entertainment only and nothing more, irresponsible gaming can have dire consequences for the player.”
What would help
Cryptocasinos demonstrate how online gambling will continue to evolve rapidly. The British regulatory approach is much too slow, insisting on evidence that researchers simply don’t have the tools to deliver. The new proposals give the following rationale for not recommending any substantive new restrictions on gambling marketing:
“The limited high-quality evidence we received shows a link between exposure to advertising and gambling participation, but there was little evidence of a causal link with gambling harms or the development of gambling disorder.”
A government that makes policies based on only what is known for certain, and which takes two years to react to evidence, is doomed to repeat the policy failures of the 2000s. Gambling was liberalized at that time, but few realized that smartphones would soon give people access to a casino in their pocket.
The truth is that cryptocasinos are too new, and their future evolution too uncertain, to know for sure how policymakers should respond. Cryptocasinos may ultimately require too great a degree of technical knowledge to become a widespread public health concern. But some danger signals are there.
For example, Gamstop is a service that UK-based gamblers can use to self-exclude from online gambling. Some self-excluded gamblers have posted on social media that cryptocasinos have allowed them to evade Gamstop and continue gambling again, with terrible consequences.
For now, some broad principles could be used. The trick is not to make decisions based solely on the information available, but to anticipate how things may evolve. New gambling operators are going to use all available tools to gain gamblers’ attention and increase their perceived legitimacy. That will always include marketing, not just on Premier League shirts, but via influencers and social media, so it would make sense to restrict this avenue.
The Gambling Commission’s approach to giving cryptocasinos access to UK markets via white labeling should also be reconsidered. Without question, it is much easier to use cryptocurrencies to gamble than it should be.
The Conversation
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Cryptocasinos are evolving worryingly fast. Here’s how to get to grips with them (2023, May 8)
retrieved 22 November 2023
from https://techxplore.com/news/2023-05-cryptocasinos-evolving-fast.html
part may be reproduced without the written permission. The content is provided for information purposes only.
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Crypto Trading & Speculation
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Chalet Hotels, Asian Paints, RateGain — Buy, Sell Or Hold? AskBQ
Here's what experts say about Tata Motors, Cipla, Chalet Hotels, PNB and Asian Paints.
Which is the best stock for investment in the automobile sector as demand is set to get a boost in the upcoming festive season? Are paint companies a good bet? What's the outlook on hotels industry?
Sharmila Joshi of sharmilajoshi.com and Kush Bohra, founder at Kushbohra.com, answered these investor queries and more, on BQ Prime's Ask BQ show.
Tata Motors Ltd.
Joshi: Passenger vehicles and two-wheelers are seeing good growth.
Festive season to give a boost to the sales.
Constructive on TVS Motors Co. for two-wheelers and Tata Motors for four-wheeler vehicle space.
From price perspective, Tata Motors is favourable.
Bohra: Stock was due a rebound and is in a consolidation mode right now, but bias turns positive.
From a near term perspective, Rs 680 and Rs 710 with support zone at Rs 625.
Other recommendations: Maruti Suzuki India Ltd., TVS Motors and Bajaj Auto Ltd.
Chalet Hotels Ltd.
Joshi: Target of Rs 610 on the stock.
Recommends to continue holding the stock, as it is reporting good numbers, especially with festival and holiday season coming up.
Bohra: Nothing currently suggests that the stock would decline in the medium term.
Support level is Rs 540 and is rebounding now.
Upside of Rs 600-640 levels in the short to medium term.
Book profits partially if needed.
RateGain Travel Technologies Ltd.
Joshi: Should continue holding the stock
Earning figures look good. Target is in the Rs 750 range.
Bohra: The stock is in an uptrend. Can reach Rs 760-790 levels.
Recommends to continue holding the stock. Nothing suggests a slowdown in the stock.
Seen correction from Rs 640 to Rs 540 levels, but the stock has rebounded sharply from there.
Asian Paints Ltd.
Joshi: Buy on dips.
It is a matter of time before confidence returns in the stock.
Bohra: It is not ideal to have this stock for short term horizon.
All dips are a buying opportunity.
Stock trying to create bottom formation at Rs 2,900-2,950 levels.
Stock to head to higher level till Rs 3,200, following the convergence level of Rs 3,075.
Top Picks
Joshi: MapmyIndia, IDFC First Bank, Punjab National Bank.
Bohra: Vedant Fashions Ltd., Syrma SGS Technology Ltd., Axis Bank Ltd., Cipla Ltd.
Watch The Full Conversation Here:
Disclaimer: The commentary and advice on BQ Prime digital and social media platforms is not a full financial plan. Investors are advised to consult a certified financial advisor/planner when making an independent decision regarding investments. No views mentioned on the programme are personal advice to anyone. Quintillion Business Media Ltd (BQ Prime) is not responsible for any risk or loss that might occur as a result of using this information in any way, regardless of your interpretation of the advice. BQ Prime digital and social media platforms provide views of only SEBI registered investment advisors/analysts.
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Stocks Trading & Speculation
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U.S. Is Seeking More Than $4 Billion From Binance To End Case
Negotiations include the possibility that its founder Changpeng Zhao would face criminal charges in the U.S.
(Bloomberg) -- The US Justice Department is seeking more than $4 billion from Binance Holdings Ltd. as part of a proposed resolution of a years-long investigation into the world’s largest cryptocurrency exchange.
Negotiations between the Justice Department and Binance include the possibility that its founder Changpeng Zhao would face criminal charges in the US under an agreement to resolve the probe into alleged money laundering, bank fraud and sanctions violations, according to people familiar with the discussions.
Zhao, also known as “CZ,” is residing in the United Arab Emirates, which doesn’t have an extradition treaty with the US, but that doesn’t prevent him from coming voluntarily.
Changpeng Zhao (Photographer: Zed Jameson/Bloomberg)
Binance didn’t respond to multiple emails and phone calls seeking comment. The Justice Department declined to comment.
An announcement could come as soon as the end of the month, though the situation remains fluid, according to the people, who asked not to be named discussing a confidential matter.
The BNB cryptocurrency, a token native to Binance and the BNB Chain blockchain that was created by the exchange, rose as much as 8.5% to $266.42 after Bloomberg reported the negotiations.
“A settlement with a monitoring provision in place could be a compromise that protects investors and allows Binance the option to evolve into a more institutional and compliant future direction,” said Matt Walsh, founding partner at crypto venture firm Castle Island Ventures.
The exact timing and structure of the proposed resolution and specific charges aren’t clear. However, Binance would likely be expected to pay more than $4 billion, which would be one of the largest-ever penalties in a criminal cryptocurrency case.
The investigation is being led by the criminal division’s money laundering and asset recovery section, along with the national security division and the US attorney’s office in Seattle.
Strike Balance
The agreement seeks to strike a balance that would allow Binance to continue operating, rather than risk a collapse that could cause negative fallout for markets and crypto holders, said three of the people.
Binance has sought to minimize its exposure in any settlement, including pushing for a deferred prosecution agreement, another person said.
If Binance and the DOJ agree on a deferred-prosecution-agreement, the Justice Department would file a criminal complaint against the company. The US would not go forward with a prosecution as long as the company meets prescribed conditions, which usually include paying a substantial penalty and agreeing to a detailed statement of facts outlining its wrongdoing. A process would be set up to monitor the company’s compliance.
With respect to possible sanctions violations, the Justice Department has been investigating Binance for allegedly aiding in the evasion of US sanctions against Iran and Russia, one of the people said. Binance has also been under scrutiny for whether it allowed transactions that helped finance Hamas.
FTX Case
The case is one of the largest investigations the Justice Department has ever conducted into a cryptocurrency company. A settlement would represent another historic resolution following the collapse of crypto exchange FTX, which resulted in the conviction of its founder Sam Bankman-Fried on fraud and conspiracy charges earlier this month.
While Justice Department officials have been pushing for a broad leadership change at the company, it isn’t clear if other Binance executives besides CZ would face charges in the case.
Binance has faced legal and regulatory action from other US agencies, as well as increased scrutiny from US lawmakers.
In June, the Securities and Exchange Commission filed a lawsuit accusing Binance and Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules.
Binance.US Unit
The lawsuit effectively crippled Binance’s US unit. Brian Shroder, chief executive officer of Binance.US, left the company in September amid another round of job cuts at the struggling crypto platform. The company eliminated about one third of its workforce, or more than 100 positions. Trading volumes on Binance.US have slowed to a trickle after the exchange lost its banking support and suspended US dollar deposits.
Earlier: Binance.US CEO Departs, Crypto Platform Cuts Third of Staff
The Commodity Futures Trading Commission in March alleged that Binance and Zhao routinely broke US derivatives rules as the firm grew to be the world’s largest digital-asset trading platform. Binance should have registered with the agency years ago and continues to violate the CFTC’s rules, the regulator said at the time.
Binance has contested the lawsuits and said it actively cooperated with the regulators’ probes and was disappointed by the enforcement actions. In a March statement, CZ said the CFTC complaint “appears to contain an incomplete recitation of facts” and that Binance doesn’t agree with how many of the issues are characterized. The company called the SEC filing an attempt by the agency to regulate “with the blunt weapons of enforcement and litigation rather than the thoughtful, nuanced approach demanded by this dynamic and complex technology.”
CZ worked at Bloomberg LP, the parent company of Bloomberg News, from 2002 to 2005.
--With assistance from Ava Benny-Morrison, Muyao Shen, David Voreacos, Michael P. Regan and Hannah Miller.
(Updates with market reaction from sixth paragraph.)
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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Binance Founder CZ Loses $12 Billion On Crypto-Trading Slump
Sam Bankman-Fried, on trial for fraud in New York, isn’t the only crypto founder feeling the heat.
(Bloomberg) -- Sam Bankman-Fried, on trial for fraud in New York, isn’t the only crypto founder feeling the heat.
The Bloomberg Billionaires Index slashed its estimate of revenues at crypto exchange Binance by 38% after data showed volumes at the firm declined this year. That wiped $11.9 billion from the fortune of Binance’s founder, Changpeng Zhao, known as CZ, dropping him to $17.2 billion.
CZ, 46, played a role in the events that landed Bankman-Fried in federal court. In November, the Binance founder announced he was liquidating a token linked to FTX following a report that Bankman-Fried’s hedge fund Alameda Research also owned a large position in it. Some FTX customers rushed to pull money and the exchange was unable to keep up with the surge in withdrawals. Less than a week later it declared bankruptcy.
That sent Bankman-Fried’s own fortune to zero after peaking at $26 billion in March last year.
Read More: Bankman-Fried Needs to Testify Twice: To Judge, Then to Jury
The Index calculates Binance’s revenue using spot and derivatives trading data from crypto-tracking services Coingecko and Coinpaprika.
Binance gained market share earlier this year, peaking at 62% of total on-exchange crypto trades in the first quarter, thanks to a zero-fee promotion for popular trading pairs. Once the offer ended, Binance’s share slid to 51% at the end of the third quarter, according to research firm CCData.
Representatives for Binance didn’t respond to a request for comment.
In recent months, the crypto exchange has found itself increasingly isolated from the traditional financial system.
The Securities and Exchange Commission sued Binance in June, and the Commodity Futures Trading Commission went after it earlier this year for shirking rules that allowed US users to access Binance. Regulatory officials claimed the firm lacked adequate money-laundering controls, inflated trading volumes and mishandled client assets. Binance disputes the allegations and is fighting them in court.
Read More: Crypto Exchange Binance, CEO Zhao Ask Court to Dismiss SEC Suit
In June, Bloomberg’s wealth index cut the value of Binance’s US exchange to zero after it announced it would no longer transact in dollars, shrinking volumes dramatically. Binance.US had been valued at $4.7 billion in a March 2022 funding round, while CZ’s net worth hit a peak of $96 billion in January of that year.
The pain hasn’t been confined to Binance, as regulatory uncertainty and rising interest rates make other investments more attractive. Spot trading volume at Coinbase Global Inc. fell 52% in the third quarter from a year earlier, according to CCData.
--With assistance from Vernal Galpotthawela.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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ASK Automotive Shares Debut At 8.12% Premium Over IPO Price
Shares debuted at Rs 304.90 apiece on the Bombay Stock Exchange, a premium of 8.12%.
Shares of ASK Automotive Ltd. debuted at Rs 304.90 apiece on the Bombay Stock Exchange, a premium of 8.12% over their IPO price of Rs 282 apiece.
On the NSE, the stock debuted at Rs 303.30 apiece, a 7.55% premium.
The Rs 834-crore-IPO was subscribed 51.14 times on the final day. Bids were led by institutional investors (142.41 times), non-institutional investors (35.47 times) and retail investors (5.70 times).
The Rs 834-crore initial share sale comprises entirely of an offer for sale of up to 2.95 crore (2,95,71,390) equity shares by promoters Kuldip Singh Rathee and Vijay Rathee. There is no fresh issue segment in the IPO. After the issue, the promoters' shareholding will reduce to about 85%.
Since the issue of ASK Automotive is completely an OFS, the entire proceeds will go to the selling shareholders and the company will not receive any funds from the issue.
Business
Gurugram-based ASK Automotive is a manufacturer of brake-shoe and advanced braking systems for two-wheelers in India, with a market share of approximately 50% in FY23, in terms of production volume for original equipment manufacturers and the branded independent aftermarket.
On the financial front, the company reported a consolidated turnover of Rs 2,555 crore for FY23, an increase from Rs 2,013 crore in FY22. Its net profit rose to Rs 123 crore from Rs 83 crore.
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Stocks Trading & Speculation
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The Bank of Japan stuck to its ultra-loose monetary policy Friday, though officials face increasing pressure to turn more hawkish as the yen weakens and after fresh data showed inflation remained stubbornly high.
While most other major central banks have pressed ahead with a campaign of interest rate hikes in a bid to tame prices, the BOJ has refused to shift from its long-term program of sub-zero borrowing costs in order to kickstart the world's number three economy.
Policymakers have for several months hinted that they are willing to adopt a more normalised policy, such as minor tweaks to its yield curve control scheme, which sees the bank control the band within which government bonds are allowed to move.
But there are growing calls for it to move quicker, and they will not have been tempered by data Friday showing the consumer price index excluding food and energy, prices jumped 4.3 percent on-year in August -- a three-decade high.
The CPI reading of 3.1 percent excluding just fresh food came in slightly above the three percent forecast in a survey by Bloomberg.
In a post-meeting statement it stuck to its guns, as expected, but said it "will not hesitate to take additional easing measures if necessary".
"With extremely high uncertainties surrounding economies and financial markets at home and abroad, the bank will patiently continue with monetary easing while nimbly responding to development in economic activity and prices as well as financial conditions," it said.
Analysts have said BOJ's outlier policy is harming the economy by skewing the bond market and exacerbating the yen's weakness, in turn making imports more expensive.
On Thursday the Japanese currency hit a fresh 10-month low against the dollar of 148.46, before recovering slightly on Friday to 148.11.
The yen has tumbled 11 percent this year, making it the worst-performing Group-of-10 currency, according to Bloomberg News.
This has prompted speculation that the BOJ may intervene in forex market to provide support to the currency, having done so in November for the first time since 1998.
Among key items in the CPI reading, mobile phone fees, hotel prices, and fire and earthquake insurance saw increased prices, the ministry said.
But electricity and gas bills fell as the government continued subsidies to reduce pressure on families.
Kishida has seen his popularity ratings slide since taking office in October 2021, with many voters squeezed by rising prices seen around the world in the wake of the Ukraine war.
Last week, facing a tough battle for internal party re-election next year, he promised a "drastic" economic package after reshuffling his cabinet.
BOJ Governor Kazuo Ueda said in a recent media interview that the central bank may have enough data by the year's end to decide whether to end the ultra-loose program.
Following the comments, BOJ watchers moved up their rate forecasts, with half now predicting a hike in the first half of 2024, Bloomberg News reported.
The comments may also have been aimed at easing pressure on the yen.
The Japanese economy remains fragile and the existing monetary policies may need to remain, said Tom Kenny, senior international economist at ANZ Research.
"Indeed, we expect inflation to ease as demand conditions are not strong enough to sustain ongoing pressure on prices," he said. "We don't think the BOJ is going to drop its negative rate policy by the end of the year," he said.© 2023 AFP
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Interest Rates
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The energy regulator Ofgem has this morning confirmed a cut to its price cap which will see average household bills come down this autumn.
Ofgem said the typical household paying by direct debit for gas and electricity faced an annual charge of £1,923 from October to December.
This is down from the £2,074 level set for the three months to the end of September. The cap does not apply to Northern Ireland.
Energy security and net zero secretary Grant Shapps described the news as “encouraging”, adding that it is “another milestone as we deliver on our promise to halve inflation”.
Mr Shapps said: “We acted swiftly when prices soared because of Putin’s abhorrent attack on Ukraine, spending billions and covering around half a typical household’s bill.
“And we are successfully driving Putin out of global energy markets so he can never again hold us to ransom, and we are boosting our energy independence to deliver cheaper, cleaner and more secure energy to British homes”.
The reduction is largely explained by weaker wholesale prices. And the price cap would have been lower still, by a further £100, if it had reflected a future Ofgem calculation that recognises reduced energy use.
Overall, household consumption has fallen sharply following the bill shocks of the past 18 months. However, there are warnings from industry forecasts that peak winter will likely see bills rise back above the £2,000 mark.
Shadow climate change and zero secretary Ed Miliband said: “These figures demonstrate the scandalous Tory cost of living crisis is still raging for millions of people.
“Thirteen years of failed Tory energy policy has left Britain as the most exposed economy in Western Europe to the effects of Putin’s war and Britain’s families and businesses are paying the price.
“Higher energy bills are unfortunately here to stay under the Conservatives, even with this fall, bills are significantly higher than they were only three years ago. The problem is the Tories have learnt no lessons from this crisis.”
Shadow minister Jenny Chapman also insisted that the cost of living crisis “is not going away” despite a fall in the energy price cap confirmed this morning.
She told Sky News: “I think for us, what we’re looking at – and the same with millions of people up and down the country – is the cost of living crisis.
“As we’ve just heard, it’s still raging. You’ve got food inflation at 14%, mortgages costing an average household around £3,000 a year extra. The cap’s going to be £1,923 but remember in 2021, the cap was £1,042.
“People are still in real difficulty with this. This crisis is not going away.”
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Energy & Natural Resources
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Hero MotoCorp's Pawan Munjal Offers Rs 25 Crore Deposit Against Seized Assets
On Nov. 10, the Enforcement Directorate provisionally attached three immovable properties belonging to Munjal in Delhi.
Hero MotoCorp Ltd. Chairman and Managing Director, Pawan Kant Munjal, informed the Delhi High Court on Nov. 30 that he is willing to deposit Rs 25 crore against his assets, which were provisionally seized by the Enforcement Directorate earlier in the month.
The court had issued a stay on the ED's proceedings against Munjal in mid-November. The stay pertained to the proceedings related to foreign currency registered by the Directorate of Revenue Intelligence on Nov. 3.
The court noted that Munjal had already been exonerated by the Customs, Excise, and Service Tax Appellate Tribunal based on the same set of facts, a crucial detail not disclosed during the trial court proceedings. The court found the petitioner had presented a compelling case for interim protection.
On Nov. 10, the Enforcement Directorate provisionally attached three immovable properties belonging to Munjal in Delhi under the Prevention of Money Laundering Act.
This action followed ED raids against Munjal and his companies in August, based on a PMLA case filed in response to the Directorate of Revenue Intelligence's charge sheet, accusing Munjal of unlawfully taking foreign exchange out of India.
The Delhi High Court had ruled that, considering the stay granted on the Directorate of Revenue Intelligence's complaint, which formed the basis of ED's investigation, the proceedings by the investigative agency should also be stayed.
However, the court clarified that the stay is specific to Munjal, and the Enforcement Directorate is allowed to continue its investigation for other individuals involved in the case.
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Banking & Finance
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The US lost its pristine credit rating. What does that mean?
Citing an “erosion of governance,” Fitch Ratings became the second major credit-rating firm to bump the United States government’s top-notch triple-A assessment. The downgrade may have little impact on financial markets or interest rates.
| Washington
Late Tuesday, Fitch Ratings became the second of the three major credit-rating firms to remove its coveted triple-A assessment of the United States government’s credit worthiness, a move that spurred debate in Washington about spending and tax policies.
Fitch cited the federal government’s rising debt burden and the political difficulties that the U.S. government has had in addressing spending and tax policies as the principal reasons for reducing its rating from AAA to AA+.
Fitch said its decision “reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance” compared with other countries with similar debt ratings.
The downgrade may have little impact on financial markets long-term or on the interest rates the U.S. government will pay. Here’s what you need to know:
How did the government get to this point?
Fitch’s move comes just weeks after the White House and Congress resolved a standoff on whether to raise the government’s borrowing limit. An agreement reached in late May suspended the debt limit for two years and cut about $1.5 trillion in spending over the next decade. The agreement came after negotiations approached a cutoff date after which Treasury Secretary Janet Yellen had warned the government would default on its debt.
The Biden administration reacted angrily to the move. Ms. Yellen said Wednesday that Fitch’s “flawed assessment is based on outdated data and fails to reflect improvements across a range of indicators, including those related to governance, that we’ve seen over the past two and a half years.”
“Despite the gridlock, we have seen both parties come together to pass legislation to resolve the debt limit,” Ms. Yellen said.
But Douglas Holtz-Eakin, president of the American Action Forum and former director of the Congressional Budget Office, said that Fitch’s decision was the right one, given that there are few efforts in Washington to address the government’s longstanding budget deficit.
“This is about a fundamental mismatch over the long term between our spending growth and our revenue capabilities,” he said.
Standard & Poor’s removed its coveted triple-A rating of U.S. debt in 2011, after a similar standoff over the borrowing limit.
Fitch said that the ratio of U.S. government debt relative to the size of its economy will likely rise from nearly 113% this year to more than 118% in 2025, which it said is more than two-and-a-half times higher than is typically the case for governments with triple-A and even double-A ratings.
What typically happens when debt is downgraded?
Ratings agencies like Fitch and its counterparts, Standard & Poor’s and Moody’s Investors Service, rate all kinds of corporate and government debt, ranging from local government bonds to debt issued by huge banks.
In general, when an issuer of debt has its credit rating downgraded, that often means it has to pay a higher interest rate to compensate for the potentially higher risk of default it poses.
What could that mean for U.S. taxpayers?
Many pension funds and other investment vehicles are required to only hold investments with high credit ratings. If a city or state, for example, sees its credit rating fall too low, those investment funds would have to sell any holdings of those bonds. That would force the government issuing those bonds to pay a higher interest rate on its future bonds to attract other investors.
If that were to happen to U.S. Treasury securities, the federal government could be required to pay higher interest rates, which would push up interest costs for the government and taxpayers.
Will U.S. borrowing costs rise?
Few economists think that such an outcome will actually occur. Instead, they think Fitch’s downgrade will have little impact. Few pension funds are limited to holding just triple-A rated debt, according to Goldman Sachs, which means the current AA+ from Fitch and Standard & Poor’s will be sufficient to maintain demand for Treasurys.
“We do not believe there are any meaningful holders of Treasury securities who will be forced to sell due to a downgrade,” Alec Phillips, chief political economist for Goldman Sachs, wrote in a research note.
Large U.S. banks that are required by regulators to hold Treasurys won’t see any changes in those rules just because of the downgrade, Mr. Phillips added in an interview, because regulators will still see them as safe investments.
For most investors, U.S. Treasury securities are essentially in a class by themselves. The U.S. government bond market is the largest in the world, which makes it easy for investors to buy and sell Treasurys as needed. The United States’ large economy and historic political stability has led many investors to see Treasurys as nearly the equivalent of cash.
Rating agency downgrades typically have more impact on smaller, lesser-known debt issuers, such as municipal governments. In those cases, even large investors may not have much information about the creditworthiness of the bond and are more reliant on the ratings agencies, Mr. Phillips said.
Yet that isn’t really the case for Treasury bonds and notes, he said. Large investment funds and banks form their own opinions about Treasury securities and don’t rely on the ratings agencies, he said. Fitch’s analysis also didn’t provide much new information, he added. Other entities, such as the nonpartisan Congressional Budget Office, have made similar projections about where U.S. government debt is headed.
“Nobody’s holding Treasuries because of the ratings,” Mr. Phillips added.
What does Fitch mean by ‘governance’?
Fitch cited a decline in “governance” as a key reason for its downgrade, a reference to the repeated battles in Washington over the past two decades that have led to government shutdowns or even taken the government to the brink of a debt default.
“The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.
At the same time, Fitch is referring to the inability of even compromise legislation to meaningfully address the long-term drivers of federal government debt, specifically entitlement programs for the elderly such as Social Security and Medicaid.
“There has been only limited progress in tackling medium-term challenges related to rising social security and Medicare costs due to an aging population,” Fitch said.
This story was reported by The Associated Press.
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Interest Rates
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LONDON (Reuters) - H&M plans to sell second-hand clothes and accessories at its flagship store in London from Oct. 5, as pressure increases on fast fashion companies to curb their environmental impact by encouraging the reuse and recycling of garments.
With the European Union planning new regulation to crack down on textile waste in the bloc, H&M has said it is "part of the problem" and that the way fashion is produced and consumed needs to change.
The "PRE-LOVED" womenswear collection, at H&M's Regent Street store, will include garments from several other brands and designers as well as H&M group brands, which include Arket, Cos, Monki, and Weekday.
The autumn-winter 2023 collection of the second-hand offerings will include metallic dresses and shirts, trench coats, and "trendy knits", H&M said, with new items added every day.
H&M did not immediately respond to a query about pricing and how the garments would be sourced. The retailer launched a clothing rental service at its Regent Street store in November last year.
Peer-to-peer resale of second-hand garments has become big business, with online platforms like thredUP, Vinted, and Depop multiplying and brands following suit by launching their own services.
Zara last week launched its online second-hand service in France, having trialled it in Britain since November last year.
(Reporting by Helen Reid; Editing by Alison Williams)
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Consumer & Retail
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“As a single parent, I feel like I’m letting my kids down,” one mother of five affected by the two-child benefits limit, who did not want to be named, told the Guardian. She said she is on antidepressants and skipping meals.
About one in 10 children are affected by the two-child benefit limit, a policy introduced by George Osborne that prevents parents from claiming child tax credit or universal credit for any third or subsequent child born after April 2017. Labour has now said it will keep this policy, which has been blamed for pushing families into poverty.
“I’ve had to cut down, I only eat once a day now,” the woman said. “I can’t eat two meals a day because I’m so used to it.”
She has five children, aged 19, 15, 13, eight and four. “The youngest one, I don’t get anything for her.”
She said the benefits cap has made her situation worse. “People don’t realise how bad the benefit cap is,” she said. “Even though four of my kids are eligible for the child tax credit, the benefit cap means I get the equivalent support for only two of them.
“I don’t think they realise how much of an effect it has on people’s mental health,” she added. “I am on antidepressants, with financial stress being one of the reasons.”
The two-child benefit cap was introduced as a way of encouraging parents back into work. “If I could work I would, but I only have two to three hours free,” she said. “Even then, I couldn’t afford to get childcare and with my mental state right now, I couldn’t work.”
Her children have also been affected. “I usually only take the youngest ones out. The older ones understand. The younger ones don’t know better but the older ones, it affects them more,” she said. “When they want or need something they have to wait. Luckily my kids are very understanding. When I tell them: ‘I haven’t got the money,’ they understand.”
She said she is not “totally” against the two-child limit. “I do think they need to look at cases separately. In my case, I had no choice but to get out of my relationship while I was pregnant.
“People do have accidents and you can fall pregnant … I don’t think they’re looking at the bigger picture.”
She said she has always voted Labour. “They try to look after people who are struggling and the Conservatives want to make the rich richer and the poor poorer, which they have done.”
She says she would vote Labour again despite its commitment to keeping the two-child benefits cap. “If all of them decided to keep the two-child limit, considering we’ve ended up here with the Conservatives, then I would still vote for Labour,” she said.
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Inflation
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A new report from Energy UK has indicated that the most ambitious net zero route could boost the UK economy by £240 billion by 2050.
The figure, which is in relation to Gross Domestic Product (GDP), could be 6.4% higher by 2050 in comparison to the current baseline, according to Energy UK’s latest report in its Clean Growth Gap series dubbed Path to Prosperity.
Achieving the ambitious net zero route would additionally see private investment boosted by £165 billion with an additional 226,000 jobs created in sectors such as manufacturing, construction, automotive and supply chains.
However, should the UK delay action in mitigating net zero, the GDP is forecast to be 1.1% worse than the baseline scenario, which assumes the government implements further policies consistent with stated commitments.
To achieve the 6.4% GDP increase, there is a need to provide “substantial investment” across a range of sectors including low-carbon generation, networks, manufacturing and services.
Energy UK states the majority of investment will come from the private sector but this must be matched by incentives from the UK government.
In 2050, there is a £95 billion difference between investment in the “Net Zero scenario” and the “Net Zero Transformation scenario”. By moving quickly to capitalise on this growing interest, the UK could become a global competitor for net zero investors, but delaying could result in a missed opportunity.
Achieving a “Net Zero Transformation” could also have a major impact on the development of several sectors in the UK. This includes the electricity market, manufacturing, automotive vehicle manufacturing and sectors within the supply chain of low-carbon technologies.
With many sectors turning their attention towards electrification, namely in heating and mobility, the expansion of the electricity market could result in an economic contribution (GVA) 26.7% higher than the baseline, which stands at 22.9%.
Commenting on the report, Energy UK’s deputy chief executive Dhara Vyas, said: “As this report again underlines, attracting investment is the key to reaching net zero in a way that maximises the benefits to our economy in terms of growth, productivity and job creation. Committing fully to the transition will reap rewards by incentivising private investment – so reducing the amount needed from the public purse – and creating a virtuous circle which will drive further innovation and technological advances to bring costs down further.
“Far from being a burden on the economy, a proactive and ambitious approach will boost incomes, expenditure, profits and tax receipts over the long-term – all of which will leave more money for government spending on other priorities like health and education.”
Vyas added: “In contrast, delaying action would mean blunter and more stringent measures further down the line that would have the opposite effect on the economy. This report shows that we can’t afford not to seize the opportunities offered by transforming to a net zero economy.”
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Renewable Energy
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With tens of millions of Americans burdened by medical debt, hospitals and other medical providers are increasingly shuttling their patients into loans serviced by banks, credit cards, and other financial services companies.
The arrangements have proven very profitable for lenders. But, as KFF Health News reported in November, the rise of the patient financing industry is often less welcome for patients, who can end up in loans that pile interest on top of what they owe for their medical care.
UNC Health in North Carolina, for example, historically did not charge interest on payment plans patients enrolled in to pay off their debts. But KFF Health News found that within two years of the public university health system signing a contract with AccessOne, a private equity-backed lender, to finance the plans, nearly half of its patients were in loans that charged interest.
The financial risks faced by patients and their families have sparked interest from federal regulators, including the Consumer Financial Protection Bureau. Last month, the Biden administration announced a new investigation into companies that finance medical care.
As federal scrutiny mounts, KFF Health News is posting contracts and other documents obtained through public records requests that illustrate AccessOne’s arrangements with three public systems: UNC Health, Atrium Health, and AU Health.
Both UNC Health and Atrium Health redacted significant portions of their contracts, including key terms. AU Health provided its contract without redactions.
The documents can be found below.
-UNC Health began contracting with AccessOne in 2019. As of February 2022, more than 100,000 UNC patients were enrolled in an AccessOne plan.
-Atrium Health, a nonprofit system with roots as a public hospital in Charlotte, North Carolina, signed its contract with AccessOne in 2014.
-AU Health, Georgia’s main public university hospital system, has contracted with AccessOne since 2019.
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Banking & Finance
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Banks and building societies are to meet Chancellor Jeremy Hunt to discuss the upheaval in the mortgage market.
It comes after Thursday's shock decision by the Bank of England to hike rates to 5%, up from 4.5%, as it tries to tackle persistently high inflation.
The government and lenders are under pressure to do more to help those struggling with rising mortgage rates.
But Mr Hunt and Prime Minister Rishi Sunak have so far dismissed suggestions of the government stepping in.
After the interest rate rise was announced, Mr Sunak said the government would remain "steadfast and stick to its plan" to bring down inflation.
Friday's meeting at Downing Street, which UK Finance said had been billed as a "collaborative event", will see major lenders meet with Mr Hunt, who has resisted calls for direct government intervention.
The chancellor said support such as tax relief risked stoking inflation, which figures released on Wednesday showed remained stuck at 8.7% in May.
Instead discussions are likely to focus on strengthening existing help for those facing difficulties. Lenders are expected to be asked to assist in the following ways:
- By providing more flexibility for homeowners if they ask for changes to existing deals
- By boosting support for mortgage interest payments for those on benefits
- By allowing people temporary respite from payments without impacting their future ability to borrow
Some urged more aggressive action - the National Residential Landlords Association (NRLA) called for the reintroduction of mortgage interest relief and the unfreezing of housing benefit rates.
It said the majority (85%) of buy-to-let properties had mortgages that were interest-only and were "particularly exposed" to rising rates.
The NRLA warned that interest rates of 5% could force landlords to sell 735,000 rental properties. "This will exacerbate the ongoing supply and demand crisis across the private rented sector," it said.
"Worried"
Bank of England governor Andrew Bailey admitted on Thursday that the 13th consecutive rise in rates since December 2021 would cause "difficulty and pain" for many. Those with loans would be "understandably worried" he said.
Mortgage rates have been rising for months. An average two-year fixed rate mortgage is currently tracking at 6.19%, while the five-year rate is 5.82%. In June last year those rates were closer to 3%, according to financial data firm Moneyfacts.
The latest move by the Bank of England has yet to filter through into current mortgage rates, according to David Hollingworth from London and Country brokers.
"Fixed rates have not gone into overdrive, they're still moving rapidly but there's no acceleration. We'll see how the markets react in the coming days," he said.
The BBC understands some savings rates have already been put up following Thursday's rate rise although loyal savers with easy-access accounts are yet to see noticeable rises.
Lenders have been keen to reassure borrowers that they will be able to get loans. Earlier this week Leeds Building Society chief executive Richard Fearon told the BBC the mortgage market remained strong and that "lenders want to lend".
Referring to the financial crash of 2008, he said: "This is nothing like the credit crunch."
Indeed, banks profits have benefitted from rising interest rates. Banking giant HSBC reported a near doubling of its quarterly profits earlier this year.
The London-based firm reported profit before tax of $5.2bn (£4.3bn) for the last three months of 2022, up more than 90% from the same time a year earlier.
How will the latest interest rate rise affect you? You can share your experiences by emailing haveyoursay@bbc.co.uk.
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:
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Interest Rates
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Millennials are more retirement-ready than their parents, says Vanguard
Millennials fretting about their financial future can take comfort in knowing they are on track to retire in a better financial position than they probably think.
Of all generational cohorts, older millennials are most likely to generate enough income to retire comfortably, according to the latest Vanguard Retirement Readiness report.
Specifically, millennials aged 37-41 have the greatest chance of landing a comfortable retirement.
Vanguard assesses retirement readiness assuming your post-employment income should match around 68% of your annual salary.
Millennials in the 70th percentile of earners are the only demographic on track to come anywhere close to that coveted ratio. Early millennials are expected to hit 66% of their annual salary at retirement, while Gen X lags at 53% and late baby boomers at 51%.
Despite mounting housing and education costs, millennials are still generating wealth. Vanguard says they can thank the retirement industry for that.
Defined contributions
Millennials have successfully grown their nest eggs by participating in workplace retirement plans, which shift the responsibility for retirement planning to workers.
Higher-income workers who participate in defined contribution plans have a brighter retirement outlook, according to Vanguard.
“In the past two decades, these workers have benefited from innovations such as automatic enrollment, automatic escalation of savings rates over time, and automatic investment in a mix of stocks and bonds consistent with a retirement goal,” the report says.
There’s a good reason millennials are deciding to take retirement planning into their own hands.
With millions of baby boomers scheduled to start receiving Social Security in the coming decade, many younger Americans worry there won’t be enough benefits for them once they retire.
In fact, a new survey from Nationwide and Harris Poll found that 39% of millennials and 45% of Gen Z believe they won’t receive a dime of Social Security.
Americans still underestimate the costs of retirement
Despite its rosy outlook on millennials, Vanguard acknowledged that the gap between what people have saved and what they need will likely grow over time—especially if expected cuts to Social Security benefits materialize.
Many Americans “dangerously” underestimate the impact of healthcare costs on their retirement, according to the 2023 Protected Retirement Income and Planning Study.
“It is incredibly hard for people to wrap their heads around what could happen to their health 10, 20 or more years into retirement,” said Jean Statler, CEO of Alliance for Lifetime Income.
According to the National Council on Aging, nearly 95% of people aged 65 or older suffer from at least one chronic condition. As healthcare costs continue to rise, treating such conditions could take a bite out of retirement savings.
Something to keep in mind no matter which generation group you fall into.
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Personal Finance & Financial Education
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Image caption, Olney residents say they want the cuts reversed or a new operator brought inIn October, Stagecoach East brought in new bus timetables for services in Cambridgeshire and Bedfordshire. It's left one town with just one bus each way to two of its largest neighbours. Students and commuters are marooned and businesses say the town is increasingly isolated."Right now, it's absolutely freezing - even my coat isn't enough."Charlie Smeraglia is angry, frustrated and cold."I stay at school for as long as I can but when the college shuts I have to just sit in the bus stop, because most shops are shut as well.""An hour, hour and a half."And in these winter months she is waiting around in the dark."It's quite scary because I don't know the area well enough," she says.Image caption, BTec student Charlie Smeraglia says she has to wait for up to an hour and a half for the bus homeThe 18-year-old lives in Olney, a market town of about 6,600 people near Milton Keynes, and is studying for a BTec in engineering 12 miles (19km) away in Bedford.There used to be a regular, hourly service through the day between Bedford and Olney.The number 41 still runs, but for most of the day it shuttles between Bedford and Turvey, four miles (6.4km) from Olney. There is just one bus from the town to Bedford in the morning and another one which heads back in the evening.It means Charlie now catches the 07:48 from Olney - "if it's on time" - and can only return on the 17:50 from Bedford.Transport, she says, was a "huge part" of her decision to study in Bedford."It was easy to get there and now it's completely different."Her mother is "really worried", she says, and "very uncomfortable" about her waiting at a bus stop after classes have finished."I feel really limited that I can't go out and do things I would normally do. "I would be getting home sooner and doing more school work, having a job - I've had to change my job because of the bus."Image caption, Kate Nicholas had to call the police after her 18-year-old was "inappropriately approached" while waiting for a busKate Nicholas, 59, is on her way to Turvey to collect her 18-year-old, who, like Charlie, also studies in Bedford.While waiting for the bus, she says, they were "approached by somebody inappropriately"."They were on their own. They were extremely frightened," she says."They rang us and we also rang the police as well because we weren't able to get to Bedford very quickly to go and get them."There have been other parents who have said that their children have also had real issues [while waiting for the bus]. "So there's a real safeguarding issue here at the moment."Mrs Nicholas, who is self-employed, says she has had to "turn my working life around and build my working life around being able to do the runs" to Bedford or Turvey."If I wasn't self-employed, that would put me in an impossible situation to continue working."She says she is "bewildered" that residents are becoming cut off from "essential services" and that there is also a "green issue" because more parents are driving cars to collect children."Instead of one bus running, we now have a multiplicity of cars, which has got to be against the government's climate agenda."Image caption, Olney sits between Milton Keynes, Northampton and Bedford but residents say bus cuts are leaving it increasingly isolatedJohn Quilter, 65, had his driving licence revoked three years ago because of an eye condition, and relied on the number 41 to get to Bedford and Northampton.He says he's now "fairly marooned" and recently had to pay £30 for a taxi home from Northampton."I'm reliant on friends to run me into Northampton to pick me up or I cycle everywhere where I can, which is not a lot of fun going into Northampton or Bedford on the main roads," Mr Quilter says."It's pretty tricky, pretty isolating at times."In Olney itself, businesses say fewer people are coming into shops and cafes since the bus service was reduced,Image caption, Businesses fear the town will see fewer shoppers and diners now bus connections have reducedSharon Rogers works in women's clothing shop Valeria C."I think it's impacted a lot on footfall, especially over Christmas time," she says."We really struggled and did notice that less people were shopping."Olney's growing - we've got lots of new buildings so we need to look at these bus services and we need to get them going so that people can travel and commute."You might also be interested inIn the Courtyard Brasserie opposite, owner Amir Nazary accepts that the bus cuts have come on top of the cost of living crisis and cold weather, which may have kept diners from coming out. But he says it's another factor that's making business tougher.Some of his staff are also now struggling to come in to work, especially on Sundays when the number 41 doesn't run at all."Sometimes I have to pick them up myself and drop them off myself… So that's an extra journey, with extra miles," he said.Image caption, Amir Nazary has run Courtyard Brasserie in Olney for five yearsMr Nazary said he gives lifts to some staff "every weekend and sometimes in the week as well"."It's extra pressure, which you don't want. Instead of doing your own things - ordering things to get down [here] - you've got to make sure there's staff down here, otherwise you won't be able to do the business."If he didn't offer lifts, he says he would "have to close the door or tell everybody there's only me running [the cafe]".Olney Town Council's deputy mayor, Debbie Whitworth, is now campaigning to have the services reinstated or for a new operator to run buses from the town.Mrs Whitworth, 63, said: "The impact has been huge. I think the powers that be are underestimating how huge an impact it's had on our local residents and the surrounding villages."Every day I'm receiving emails, phone calls from our residents here with a really sad tale to tell."I have two residents that have lost their jobs because of the buses."Image caption, Debbie Whitworth is speaking to other bus companies hoping to find one that will open a new service for OlneyOne, she says, is a nurse who used the bus to commute into Northampton and, after 18 years working in the NHS, is "now without work".She added: "People's lives have changed, they're losing their jobs, they're losing their livelihoods, many have got mental health issues. "We're isolated in here."Stagecoach East has been approached for comment.Find BBC News: East of England on Facebook, Instagram and Twitter. If you have a story suggestion email eastofenglandnews@bbc.co.ukRelated Internet LinksThe BBC is not responsible for the content of external sites.
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Consumer & Retail
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Aditya Baradwaj can pinpoint the “exact moment” he knew the party was over for Sam Bankman-Fried and his once-booming FTX cryptocurrency empire.
The scruffy, 31-year-old crypto kingpin had showered workers like Baradwaj, a former software engineer at FTX’s sister firm Alameda Research, with a torrent of lavish perks throughout late 2021 and 2022 – only to plunge the $32 billion company into bankruptcy last November.
While awaiting word from their bosses last Nov. 9 on whether FTX would survive, Baradwaj and other staffers huddled in Alameda’s Hong Kong office tried to order takeout on a credit card — “probably a poke bowl or fried rice,” he said.
The transaction was declined.
“We ordered our lunch in the afternoon, same as usual,” Baradwaj told The Post. “When we went to order our food in the evening, the app says ‘credit card declined.’ That’s the moment where we realized, holy s—t, the company is probably broke.”
A few hours later, Caroline Ellison — CEO of Alameda Research and also Bankman-Fried’s ex-lover — surfaced for the first time in two days for a tense, tearful all-hands meeting that is now expected to play a pivotal role in a federal trial next month, where the disgraced FTX boss faces charges for allegedly stealing billions in customer funds.
“We were afraid,” Baradwaj said. “This thing was making international news. My friends and family were calling me, I’m getting all these calls. I’m sitting in a hotel in Hong Kong and I don’t want to get thrown in Chinese jail.”
Baradwaj, detailing his experience for the first time in an exclusive interview with The Post, was in the room with Ellison when she staged her now-infamous call with employees.
As those in the Hong Kong office sat in a circle around her, some perched on beanbags and others listening in by video conference, Ellison broke down in tears.
“I guess, mostly I wanna say, like, I’m sorry. This really sucks,” Ellison sobbed, according to court documents. “I think my current default plan is that Alameda will likely wind down once we can, like, repay all of our creditors and sort of wind down a bunch of our, like, whatever remaining obligations we have.”
One Alameda staffer asked Ellison, “Who made the decision on using [FTX] user deposits?” She is said to have responded, ““Um…Sam, I guess.”
After the meeting, Baradwaj said he and his stunned colleagues had to “literally book our flights and escape the country.” The next day, he resigned, bought a plane ticket home and left Hong Kong.
“Mr. Bankman-Fried maintains his innocence and looks forward to his day in court,” Bankman-Fried spokesperson Mark Botnick said in a statement.
Ellison’s legal team did not return The Post’s request for comment.
The first clear signs of serious financial trouble at FTX had emerged a week earlier on Nov. 2, when a leaked Alameda Research balance sheet raised questions about the empire’s solvency and ultimately sparked a flood of withdrawals, according to Baradwaj.
In the days before the meeting, the 28-year-old Ellison — now famed for her reported experimentation with polyamory and her love of “Harry Potter” — had issued a series of increasingly urgent messages demanding that Alameda’s traders pull capital from other exchanges to ensure FTX could meet withdrawals.
“Her tone when she said this had a kind of urgency that none of us had ever really seen in her before. We could tell that something was going on,” Baradwaj said. “We’ve never really had to drain capital off the exchanges that we trade on and effectively stop trading on them just to be able to do something else.”
Indeed, Baradwaj, who had been working alongside Ellison in Hong Kong at the time, said that until that point she had “seemed like a a kind person” and was a good manager. Ellison was “forgiving of mistakes,” and tried to make the company a “nice social environment,” according to Baradwaj.
“My opinion of Caroline — right up to the very end where she gave us this confession and told us what they’d been doing — my impression of here was that she as a good boss,” Baradwaj said. “She seemed like a kind person.”
Less than a week later on Nov. 8, staffers were blindsided by Bankman-Fried’s announcement on Twitter that rival platform Binance had offered to buy FTX to solve its “liquidity crunch.” Binance later backed out of the rescue deal.
On the day of the meeting, Baradwaj and other employees sat around the office “doing nothing,” lacking any available capital with which to trade or any guidance from Bankman-Fried and his inner circle on their next move.
“In my head, there was one central event, which is Caroline’s confession,” Baradwaj said.
“After that meeting, we all left the office and we never spoke to Caroline after that,” he added. “Caroline even tried to make conversation with someone and she was ignored. No one even wanted to talk to her.
“For Sam, that’s even more so,” he added.
FTX, Alameda and countless other affiliates filed for bankruptcy two days later on Nov. 11 – setting up the chain of events that ultimately led to Bankman-Fried’s arrest in the Bahamas and indictment on charges of securities fraud, money laundering and campaign-finance violations. He has pleaded not guilty.
“He’s definitely guilty,” said Baradwaj. “We know he’s guilty because Caroline basically said so, and this was back in mid-November, like in the heat of the moment, before she had talked to any lawyers, before the bankruptcy even. She confessed to us and there’s a recording of the confession.”
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Crypto Trading & Speculation
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Sunak Says UK Will Be ‘OK’ As Rate Hike Exposes Tory Tensions
Rishi Sunak said he is “absolutely confident” he will meet his pledge to halve inflation this year, after the Bank of England’s decision to raise interest rates to 5% laid bare frustration among ministers and Conservative politicians about the slow progress in fixing a cost—of-living crisis.
(Bloomberg) -- Rishi Sunak said he is “absolutely confident” he will meet his pledge to halve inflation this year, after the Bank of England’s decision to raise interest rates to 5% laid bare frustration among ministers and Conservative politicians about the slow progress in fixing a cost—of-living crisis.
“Rooting out inflation is not easy, it requires difficult decisions, it doesn’t happen overnight,” the British prime minister said at a business event in Kent, southeast England on Thursday in his first public comments after the central bank’s announcement. “I’m here to tell you that I am totally — 100% — on it and it’s going to be OK and we are going to get through this.”
Rising interest rates and stubbornly high inflation are a major problem for Sunak, who has staked his premiership on fixing Britain’s economy but is now facing criticism — including from members of his own Tory party — that the government is not doing enough to help Britons facing surging mortgage costs.
The stakes are especially elevated because the Conservatives trail the main opposition Labour Party by a double-digit margin in polls ahead of a general election expected next year. The risk for Sunak is not only that he fails to deliver on his core inflation pledge, but that the Bank of England’s efforts to tame price growth tip the UK into a recession just as people prepare to vote.
Tory tensions and frustrations are starting to spill out into the open — with Bank of England Governor Andrew Bailey increasingly the target. “The Bank of England has failed, does it still deserve to be independent?” Jacob Rees-Mogg, a prominent figure on the right-wing of the Tory party closely aligned with former premiers Boris Johnson and Liz Truss, said on Twitter.
Even the government is getting in on the act. In a regular briefing ahead of the latest rate decision, Sunak’s spokesman Jamie Davies declined three times to say Bailey is doing a good job as central bank governor.
Though he said Bailey retains the “full confidence” of the prime minister, such a lukewarm endorsement reveals the exasperation at the top of government over the bank’s failure to rein in inflation, which last hit the 2% target in July 2021 and has been more than four times that level for the past 14 months.
“We’re not expecting or desiring a recession, but we will do what it takes to get inflation back down to target,” Bailey told broadcasters.
Underscoring the political nightmare for the Tories, a Survation survey published Wednesday found more people see the government as responsible for taming inflation, rather than the Bank of England. That’s despite the BOE controlling interest rates, the primary policy tool for tackling rising prices.
Still, Sunak has repeatedly said voters should judge him on bringing inflation down - a pledge which sits awkwardly with his team’s implied criticism of the Bank of England.
Part of the government’s frustration lies in how it is boxed in its own response. Policies that would grow Britain’s economy and ease inflationary pressures — such as building lots of new homes, using immigration to fill job vacancies and completing high-profile infrastructure projects like HS2 — are unpopular with large swathes of his parliamentary party.
Increasing cash support for struggling families also goes against Sunak’s promise to get public finances back on track. That’s seen as critical for his plan to try to campaign on his economic record at the next election.
“We cannot in a situation like this borrow too much money because that makes everything worse,” Sunak said. “I’d love to cut your taxes,” he added. “I can’t say ‘yes’ to every single thing people want me to spend money on.”
Meanwhile the measures Chancellor of the Exchequer Jeremy Hunt announced in March to boost economic growth — like programs to encourage more people to return to the workforce, and a significant tax break to encourage business investment — take time to affect the economy, something Sunak lacks.
Hunt is due to meet banking CEOs Friday to discuss help for mortgage-holders, and will also meet energy regulators next week to talk about how to ensure drops in wholesale prices are passed through to consumers.
“High inflation is a destabilizing force eating into pay checks and slowing growth,” Hunt said in a statement Thursday. The government’s resolve to bring down inflation is “watertight,” he said, “because it is the only long-term way to relieve pressure on families with mortgages.”
Yet the blame game is likely to persist until the government can make headway. When Sunak announced his inflation target, it was widely assumed it would fall mechanically as the energy-cost surge triggered by Russia’s invasion of Ukraine fell out of the year-on-year comparisons.
But a tight labor market has scuppered that hope, and left Sunak vulnerable to attacks from across the political spectrum.
Opposition Labour Party Leader Keir Starmer told the Times CEO Summit the Conservatives have overseen an “unprecedented” 13 years of “flatlining” wages, and the UK is “not well prepared to deal with a new age of insecurity.”
“This country always gets hit hardest, whether it’s mortgage rates, interest rates, energy prices, food prices,” he said.
--With assistance from Lizzy Burden, Alex Morales and Emily Ashton.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Inflation
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Scott Olson/Getty Images
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Tupperware is now selling some products at Target, but it still makes most of its money through individual sellers.
Scott Olson/Getty Images
Tupperware is now selling some products at Target, but it still makes most of its money through individual sellers.
Scott Olson/Getty Images
Stacey Sottung shows off a stack of colorful bowls in an Instagram video, filming for her followers a taste of the modern Tupperware party, which in addition to bowls and vintage tumblers, may include cake pans that go in the microwave, cold-brew carafes or vegetable choppers.
To this day, individual dealers like Sottung are how Tupperware makes most of its money. Many sell on Facebook or at virtual parties; Sottung has been trying out TikTok. But fundamentally, the brand's business harkens back to its 1940s roots: women selling to women, ideally in someone's living room.
"Tupperware is best when it's shown, when you can touch it, when you can feel it," says Sottung, who began selling as the Philly Tupperware Lady during the pandemic. "When I have the ability to go to a house and do a house party, I just love, love, love it."
Tupperware once revolutionized women's roles — in the kitchen and the country's economy — and sealed its place in American lore as a synonym for kitchen storage. It popularized party-style sales. Its plasticware is in museums. But now, the company faces financial peril.
Archive Photos/Getty Images
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Women attend a Tupperware Party in someone's back garden in 1955.
Archive Photos/Getty Images
Decline happened slowly over a decade. Fewer people joined the sales force. Sales stagnated, then slid. Tupperware's value is now less than a tenth the size of its debt. Since April, the company has been warning of a possible pending bankruptcy. It has now missed deadlines for at least two financial reports.
Turning homemakers into saleswomen
Fath Davis Ruffins puts on disposable gloves before opening a dream 1950s cabinet: Tupperware storage containers, little spears for finger foods, serveware and cutlery, in a rainbow of pastels. This collection in storage at the Smithsonian's National Museum of American History is proof of just how influential these products once were.
"We're in the forever business," Ruffins, a curator, explains the gloves.
Smithsonian's National Museum of American History
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Tupperware's design and historic impact landed it in museums worldwide, including these bowls at the Smithsonian's National Museum of American History.
Smithsonian's National Museum of American History
Tupperware's design and historic impact landed it in museums worldwide, including these bowls at the Smithsonian's National Museum of American History.
Smithsonian's National Museum of American History
The forever business was certainly a goal for Tupperware, the brainchild of inventor Earl Tupper. After World War II, he created a softer durable plastic and patented a lid with a double seal, said to be inspired by the paint can.
But the invention needed a show-and-tell. Enter Brownie Wise, a single mother in Detroit, who convinced Tupper to sell at Tupperware parties and oversaw their runaway success. Tupperware ladies hustled to get a cut of each sale to friends or neighbors, or win grand prizes like Cadillacs and trips to Disney.
It was the perfect moment for the company: women had lost wartime jobs to men; a spike in divorces left many, like Wise, scrambling for income with few well-paying options; and of course, the baby boom arrived, leading to bigger families and housewives at home in the sprawling suburbs.
Tupperware, praised for its modern design, became "a kind of iconic example of home life and domesticity," Ruffins says. And Wise, in 1954, became the first woman on the cover of Business Week for enabling generations of homemakers to see themselves as saleswomen.
Bill Chaplis/AP
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Brownie Wise, head of Tupperware Home Parties, receives a sales award in 1956.
Bill Chaplis/AP
Brownie Wise, head of Tupperware Home Parties, receives a sales award in 1956.
Bill Chaplis/AP
The name 'Tupperware' transcends the company
Eventually, the sales gig spread from homes to the office. Secretaries and receptionists handed out sleek Tupperware catalogues. The company's products exploded across the world. Even Queen Elizabeth was said to keep cornflakes in a Tupperware.
After Tupper's patents expired in the 1980s, versions of his special lid spread far and wide. Soon, the company name outgrew the company.
In front of a display of classic Tupperware at the Smithsonian, a group of high-school students say they weren't aware it was a brand.
"I thought it was just the regular name for, like, containers," says one of them. Another describes Tupperware they think they have at home: one square with a red lid and some with green lids — except they realize those are made by Rubbermaid and Glad.
The students conclude they'd never really seen actual Tupperware before.
The online shopping era brought more competition for Tupperware. But for years, the company also spent big on dividends for shareholders — and stuck with selling through individual consultants rather than stores, even as it discontinued the party-sales business in the United Kingdom in the early 2000s.
Pandemic boost proved brief
The company's growth has mostly come from overseas. As of 2020, Tupperware said, 3.2 million people sold its products worldwide, with nearly 600,000 of them reported as "active" sellers. Since then, the company has not updated the total number, while the "active" ranks have shrunk to 284,000. Nearly half are in South America.
Smithsonian's National Museum of American History
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Classic Tupperware bowls on display at the Smithsonian's National Museum of American History in Washington, D.C.
Smithsonian's National Museum of American History
Classic Tupperware bowls on display at the Smithsonian's National Museum of American History in Washington, D.C.
Smithsonian's National Museum of American History
During the pandemic, when everyone cooked at home, Tupperware's profits suddenly quadrupled. Executives praised this as a sign of a turnaround.
The unexpected surge didn't last. Sales slipped again. The company soon said "the pandemic, inflation and high interest rates" were hurting its business. Its prices rose. Its debt weighed heavier.
In the fall, Tupperware finally made a long-term deal to sell on store shelves in the U.S., partnering with Target. It now also offers some vintage-inspired bowls and pitchers on Amazon. CEO Miguel Fernandez, who joined in 2020 from Avon and Herbalife, has said he wants Tupperware's business to get as big as the brand.
"People's lives — American lives — changed tremendously. So it's not surprising that today might be a different day for the Tupperware company," says museum curator Ruffins. "Many American companies do not last 75 or 80 years."
There's a saying that everyone dies twice: once with your last breath and again when your name is spoken for the last time. By that measure, Tupperware did crack the forever business — even if it goes out of business.
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Consumer & Retail
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Dilip Buildcon Q2 Results Review - Debt Reduction Led By Alpha Alternative Deal: Dolat Capital
We factor order inflow estimates of Rs100 billion/ Rs 130 billion/ Rs 130 billion for FY24E/ FY25E/ FY26E.
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
Dilip Buildcon Ltd. reported revenue, Ebitda margin in line, but automatic process analysis tool above estimates.
Dilip Buildcon posted revenue growth of 7.3% YoY to Rs 24.3 billion led by better execution. Ebitda margin improved by 54 basis points YoY at 12.1% led by lower raw materials cost, employee expenses and other expenses. Adjusted profit after tax was sharply up by 284.9% YoY to Rs 833 million led by higher other income.
We expect revenue/ APAT compounded annual growth rate of 4.4%/ 91.3% over FY23-26E, with stable Ebitda margin of 12.6% over FY24E-26E.
We maintain earning per share for FY24E, however, reduce EPS by 6.4% for FY25E factoring higher tax led by exceptional gains.
We introduce FY26E. Factoring debt reduction and cash inflow, we upgrade from 'Accumulate' to 'Buy' with a revised SOTP of Rs 466.
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.
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Stocks Trading & Speculation
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HMRC’s long-delayed digital tax drive will cost six times as much as planned, a damning report from the Parliament’s spending watchdog has warned.
The Making Tax Digital programme, announced by HM Revenue and Customs in 2015, is now three years late and more than £1bn over its original budget, the National Audit Office (NAO) said.
The technology initiative intends to move three key business taxes – VAT, income tax self-assessment and corporation tax – into the 21st century by digitising records and bringing bookkeeping online.
However, original plans to have the system up and running by 2020 were “not realistic”, the NAO said, while the programme was now expected to cost £1.3bn against £226m budgeted by officials in 2016.
Making Tax Digital has now been delayed four times. The taxman has so far moved 3.2 million tax records onto its new IT systems, but more than 14 million files have yet to be transferred.
Some elements of the new technology system are online. VAT has been processed using tools from Making Tax Digital since 2019. However, self assessment has proved “far more complex” and is facing continued delays.
Demands on the tax service to redirect resources to handle Brexit and staffing strains during the coronavirus pandemic also pushed back the new system.
Gareth Davies, head of the NAO, said: “The repeated delays and rephasings of Making Tax Digital have undermined the programme’s credibility and increased its costs.”
The NAO added that HMRC had omitted to mention the £1.5bn burden the changes to the tax system would impose on companies in its May 2022 business case for the project. Companies will have to spend hundreds of pounds each altering their tax planning, updating software and paying for advice.
HMRC has said the digitisation of taxes should help boost its coffers by £3.9bn by 2033, as businesses make fewer errors and report more complete tax returns.
The taxman is now targeting implementing its digital tax regime for self-assessment by 2027, but the review body warned this still appeared to be a “very challenging plan”.
Under the new system, larger business taxpayers will also be required to provide quarterly updates to HMRC, or risk penalties.
Meg Hillier, chairman of Parliament’s Committee of Public Accounts, said: “Making Tax Digital by 2020 was never viable. HMRC wanted to increase tax revenue, but completely underestimated the cost and scale of work required to move from its legacy systems and by business taxpayers to move to digital records.
“Eight years on, many tax professionals remain unconvinced by the proposed approach, which imposes significant costs and burdens on many self assessment business taxpayers.
“HMRC has omitted much of these costs to business taxpayers when seeking additional funding. It now needs to demonstrate its plans add up.”
It comes as the tax office last week announced it would close its self-assessment helpline from today for three months over the summer so it could deploy 350 staff elsewhere.
HMRC has been under fire from MPs for poor customer service, and accountants described the latest move as a “cry for help”.
Any taxpayers trying to call the line will instead be pushed towards online guidance, digital assistant and web chat.
An HMRC spokesman said: “We welcome the NAO’s recognition of our progress in digitalising the tax system, and its confirmation that our plans can improve the system’s efficiency and effectiveness.
“A project of this scale naturally comes with challenges, but Making Tax Digital will deliver a strong return on investment for the taxpayer. We have always been wholly transparent about costs for business. We remain committed to ensuring that free software will be available for those with the simplest tax affairs.”
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Inflation
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Former Crypto Day Traders Say No Thanks Even As Bitcoin Roars Back
Bitcoin generated sparks last week when it climbed above $35,000.
(Bloomberg) -- Between 2013 and 2017, Peter To claims he made more than $1 million by day-trading Bitcoin during its bull runs.
While the world’s largest cryptocurrency has rallied in recent weeks, more than doubling from levels after last year’s epic collapse that helped blow up the FTX exchange, the 34-year-old professional stock trader in New York says it’s not enough for him to go back.
“Bitcoin is not as volatile or as driven as it was,” To said. “For traders like me who are hunting for inefficiencies in the market, it’s not as interesting. The allure is kind of gone.”
As FTX co-founder Sam Bankman-Fried waits to find out how long he’ll spend in prison following his conviction Thursday on fraud charges, many in the industry believe closure on that ugly episode will mark the end of the industry’s immature, chaotic phase and usher in a more mature era of mainstream acceptance. Yet that could also mean the market will never again provide the type of spectacular growth and once-in-a-lifetime trading opportunities seen in earlier years.
Bitcoin generated sparks last week when it climbed above $35,000. While that’s still far below its all-time high of almost $69,000 in 2021, the market was pumped on optimism that the first exchange-traded fund holding Bitcoin will be approved, with BlackRock Inc. filing an application for one in June. More positive news came as a judge in August overturned a decision to block the conversion of a Bitcoin trust from Grayscale Investments LLC into an ETF.
Related: Bitcoin ETF Momentum Spurs Biggest Monthly Gain Since January
Retail investors retreated when the industry was rocked a year ago by the collapse of FTX. Bitcoin sank below $16,000 and traders’ returns fell about 40% for 2022, according to JPMorgan Chase & Co. Crypto isn’t the only market to see a retreat by day traders. The share of retail investors in US equity market volumes plunged 40% at the end of last year from the beginning of 2021, according to the bank, while stocks once buoyed by the retail crowd vastly underperformed the market.
The situation is looking a little rosier now, even as the broader market has pulled back, with the S&P 500 down about 5% since the end of July. Retail crypto trading volume as a percentage of total volume in the US on the Bitstamp exchange has increased to 35% from 33% between the first half and the ongoing second half, while globally it’s risen to 9% from 8%.
“The retail marketplace in a bear environment is generally quite sleepy,” Bitstamp USA Chief Executive Officer Bobby Zagotta said. “I feel like we are seeing some improvement here.”
Still, many crypto daytraders have moved on. Craig Murray, who estimates he made almost $200,000 in the market, says he escaped losing everything to FTX by a hair after friends in the industry heard whispers about its imminent collapse. By that point, the 23-year-old — who lives in New York and recently dropped out of Vanderbilt University — had made up his mind.
‘Over the Edge’
“That kind of put me over the edge,” Murray said. “I just decided it wasn’t worth it. Why would I have my money in this space when there’s a chance that one day it could just all go away?”
Another sign that retail investing in crypto isn’t returning to previous levels can be seen in weekday versus weekend volumes, with the presumption that the typical person trading on a weekend is a day trader.
“It’s not unusual nowadays to see weekday trading volume average 50% higher values than weekend trading volume, whereas in the past this ratio was almost 1:1,” said Fredrick Collins, chief executive and founder of crypto data platform Velo Data.
Tim van den Berg traded everything from Bitcoin to Dogecoin between 2016 and 2019 while he was in college in the Netherlands, using Dutch trading platform Plus500. Over that period he lost about $12,000.
“I was constantly losing so much money,” he said. “I had to save up, find a better job, and worry about my studies.”
Van den Berg, 24, says he understands the market better now and is making money from trading futures, but digital assets no longer interest him.
“Crypto is so manipulated now,” he said. “It started out as a thing that would beat the banking system, but now it’s just for the rich to move a lot of money. When the US market closes, crypto basically doesn’t move at all.”
‘Different Game’
To, the stock trader, agrees. He said that back in the day, he used to make his largest crypto profits around 2 a.m.
“There would be these 20-30% dips when everybody in New York was sleeping,” To said. “In the early days, you would hunt for these glitches to make money. Now, if crypto goes up, you make money, and if it goes down, you lose. It’s more directional, which is a different game.”
While Murray no longer trades crypto as much as he once did, he holds some money on exchanges, and sometimes teaches newcomers how to trade digital assets. Still, he doesn’t think it’s a good idea for most people.
“A lot of people go into crypto thinking it’s going to be easy money because of the millions of people who made money in nonfungible tokens and other coins,” he said. “Then they take bigger risks than they intended and kind of just break their accounts.”
--With assistance from Olga Kharif.
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.
Welcome back to Chain Reaction.
Although there are a lot of builders in the crypto space, the total money being invested into the crypto market has hit 32-month lows in May.
Cryptocurrency monthly exchange volume, which calculates spot market volume across all crypto exchanges, was $439.42 billion in May, down over 27% from $604.88 billion in April, according to data from The Block.
Last month’s volume was the lowest level since October 2020 at $222.7 billion, the data showed.
Binance, the largest exchange, saw about $218 billion in monthly exchange volume during May, dropping about 26% from $293.83 billion in the previous month. Potentially as a result of the bear market and decreased demand, the exchange shared that it’s reevaluating its workforce headcount ahead of future market cycles.
Over the past six years, the exchange grew from 30 employees to a team of almost 8,000 employees across the globe, a Binance spokesperson told TechCrunch.
“As we prepare for the next major bull cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic,” the Binance spokesperson added. “This is not a case of rightsizing, but rather, reevaluating whether we have the right talent and expertise in critical roles, and therefore we will still be seeking to fill hundreds of open roles.”
The reevaluation will also include “looking at certain products and business units to ensure our resources are allocated properly to reflect the evolving demands of users and regulators.”
This statement comes after a tweet on Wednesday by reporter Colin Wu that said multiple sources confirmed that Binance has started layoffs. While the actual number is “uncertain,” the exchange may have laid off as many as 20% of its roughly 8,000 employees.
Patrick Hillmann, Binance chief communications officer, also disputed the claim in his own tweet thread and said the company is not cutting 20% of employees “as a cost-cutting measure.”
The number of employees who were laid off could be “a much smaller figure,” Hillmann said in another tweet. “We won’t know until our teams conduct the talent density audit.”
Even with the volatility of the current market and exchange volumes down substantially, Hillmann said the layoffs have “nothing to do with ‘market conditions’ today.” The company is still looking to fill hundreds of roles, the spokesperson said.
This week in web3
Solana’s core engineering and ecosystem is focused on creating a network “that feels like the regular internet, when it’s an entirely new financial internet,” co-founder Raj Gokal told TechCrunch+. There’s lots that the network is doing to keep itself fresh and competitive. “The core thesis is going to be [focused on] new businesses, new projects, independent developers,” Gokal said. “We are still in an ecosystem and a community that is optimistic about what two developers in a garage can do.”
The SEC has settled charges with a former Coinbase product manager and his brother for engaging in insider trading, the agency announced Tuesday. Ishan Wahi, the former Coinbase employee, and brother Nikhil Wahi engaged in “a scheme to trade ahead of multiple announcements regarding at least nine crypto asset securities that would be made available for trading on the Coinbase platform,” according to the SEC. The two brothers were originally charged after the agency filed a complaint on July 21, 2022.
We talked with Blockchain Capital General Partner Spencer Bogart about what gave him confidence in Worldcoin, which aims to create a global ID, a global currency and an app that enables payment, purchases and transfers. Like many others, we wondered how it can achieve its goals when, right now at least, its mission relies on convincing millions of people to allow Worldcoin to scan their irises using glossy, tech-dense orbs.
The latest pod
He’s a five-time New York Times bestselling author and previously created Wine Library, one of the first e-commerce platforms for alcohol, in the early 2000s. In 2009, he co-founded VaynerMedia with his younger brother AJ, and today the company services clients like PepsiCo, GE, Johnson & Johnson, Chase and others.
Gary Vee is a “die hard” New York Jets fan (and wants to buy the team one day), as well as an investor in a handful of major companies like Twitter, Venmo and Facebook — which we talk about in the episode.
We dove into a handful of topics surrounding the NFT ecosystem, how Gary Vee got into the space and gained traction for his collection, and where he sees the sector going long term.
We also talked about:
- VeeFriends’ origin story
- The importance of intellectual property
- Mainstream adoption
- The future of NFTs
- Advice for other projects
Follow the money
- Blockchain-based game Illuvium raised an additional $10 million from Framework Ventures
- PayPal-backed crypto wallet Magic raised $52 million
- Metaverse-focused MetaZone raised $3 million
- Fiat on-ramp and off-ramp developer Transak raised $20 million in a Series A
- M80 raised $3 million to create a web3-focused esports organization
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.
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Crypto Trading & Speculation
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A regulator has outlined concerns about the "intensity of competition" between fuel retailers.
In its first monitoring update since finding that drivers were overcharged by supermarkets last year, the Competition and Markets Authority (CMA) said it was yet to receive crucial data on fuel margins covering September and October.
It said that while margins - the difference between what a supermarket pays for its fuel and what it sells at - had come down between June and August, other data made for worrying reading.
Amid claims from motoring groups that drivers are paying over the odds again, the CMA said the retail spread - the average price that drivers pay at the pump compared to the benchmarked price that retailers buy fuel at - had widened.
"During September and October, the CMA observed significant increases in retail spread for both petrol and diesel," the watchdog said.
"In both cases, the retail spread at the end of October was significantly higher than the long-term average of 5-10ppl (pence per litre).
"While it is expected that the retail spread will increase and decrease in response to volatility in wholesale prices, over time pump prices should track wholesale prices if retail competition is effective.
"If retail spreads were to remain at these levels for much longer, this would cause concern about the intensity of retail competition in the sector."
The CMA also accused Shell and the owner of the Moto motorway service stations network, Moto-Way, of not responding to its requests for data, declaring that this had harmed the analysis it was able to provide.
But it did say that 40% of UK forecourts were now covered by its temporary fuel price comparison scheme which is aimed at boosting transparency ahead of the launch of an official tool which has to be made law by the government.
The regulator noted that prices were currently 11p up for petrol and 13p higher for diesel since May.
Much of that has been down to rising oil prices but motoring groups believe that pump costs are yet to fairly reflect fuel margins.
CMA chief executive, Sarah Cardell, said of its findings: "The underlying data shows a mixed picture in terms of what is driving this.
"Over the summer we saw rising wholesale costs, but more recent trends give cause for concern that competition is still not working well in this market to hold down pump prices.
"We will be monitoring and reporting further on this in our next update."
Read more:
Why are fuel prices on the rise and will they come down?
Oil costs drop to lowest level since July
AA fuel prices spokesman, Luke Bosdet, said: "As the AA has said in the last month, old habits die hard in the road fuel trade.
"Failure to pass on the full savings from lower wholesale costs to hard-pressed motorists, their families and businesses is unacceptable in a cost of living crisis.
"The government needs to speed up the legislation that creates the statutory fuel price transparency scheme.
"The AA has been testing public responses to the profiling of cheapest pump prices across an area or along a route.
"The feedback from drivers is that they want more transparency."
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Consumer & Retail
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Best Buy is expanding its monthly financing program, Upgrade Plus, to include more Apple devices, the company announced. Starting today, the program will finance the latest 11- and 12.9-inch iPad Pros or Apple Watch Ultra to approved customers via Citizens Bank.
Much like how Apple lets users “lease” iPhones through its iPhone upgrade program, customers can pay off their iPad Pro or Apple Watch Ultra over an extended period of time. Apple gives iPhone customers 24 months, though, while Upgrade Plus stretches things an additional year.
After the three-year period is over, customers have the option of staying in the program and upgrading to a newer model or returning the device and leaving Upgrade Plus. Alternatively, customers who want to own the device could make the final payment in the 37th month.
When you do the math, it means paying $17.32 every month for three years for the $799 Apple Watch Ultra or the base 11-inch iPad Pro model. If you want to pay off the device, you’d fork out $175.78 for the final payment due in the 37th month. If you choose to upgrade it, though, Best Buy will cover the last payment for you. Best Buy will also pay off the remaining balance of the purchase if you return the device and leave the program, which means you could potentially be saving $175.78.
However, there’s a catch: that number assumes you qualify for a zero percent APR offer. If you don’t, you could be paying a max interest of 29.99 percent, depending on your creditworthiness. Also, the program will only cover the Wi-Fi-enabled version of the iPad Pro.
Meanwhile, you’ll be able to get up to 24 months of AppleCare Plus free if you’re a paying Best Buy Totaltech member who purchases the tablet or rugged smartwatch through Upgrade Plus. You’ll have to remain an active Totaltech member during that time period, however. Non-Totaltech members won’t get AppleCare Plus for free, but they can finance the plan along with other Apple accessories through Upgrade Plus.
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Consumer & Retail
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- The Bank of England's losses on bonds bought to shore up the U.K. economy will be "materially higher than projected," according to Deutsche Bank.
- In late July, the Bank of England estimated that it would require the U.K. Treasury to backstop £150 billion ($189 billion) of losses on its asset purchase facility.
- Sanjay Raja, senior economist at Deutsche Bank, said the cost to the Treasury of indemnifying the APF losses over the next two fiscal years will be around £23 billion higher than the Office for Budget Responsibility forecast in March.
The Bank of England's losses on bonds bought to shore up the U.K. economy after the financial crisis will be "materially higher than projected until the middle of the decade," according to Deutsche Bank.
In late July, the central bank estimated that it would require the U.K. Treasury to backstop £150 billion ($189 billion) of losses on its asset purchase facility (APF).
The program ran from 2009 to 2022 and was designed to improve financing conditions for companies hit by the 2008 financial crisis. It saw the BOE accrue £895 billion worth of bond holdings while interest rates were historically low.
However, the central bank began unwinding that position late last year, initially through halting reinvestments of maturing assets and then by actively selling the bonds at a projected pace of £80 billion per year from October 2022.
Both the Treasury and the BOE knew when the APF was implemented that its early profits (£123.8 billion as of September last year) would become losses as interest rates rose.
However, the pace at which the central bank has had to tighten monetary policy in a bid to tame inflation means the costs have risen more sharply than anticipated. Higher rates have driven down the value of the purchased government bonds — known as gilts — just as the BOE began selling them at a loss.
July's public finances data showed that the Treasury transferred £14.3 billion over the month to the Bank of England to cover the losses on its quantitative easing program, £5.4 billion above the figure projected by the independent Office for Budget Responsibility in March.
Sanjay Raja, senior economist at Deutsche Bank, noted that a total of £30 billion has so far moved from the Treasury to the central bank since September, and the indemnities are likely to continue to run well above the government's forecasts for two reasons.
"First, interest rates have risen far above levels assumed in the fiscal watchdog's spring forecasts. And second, gilt prices have fallen further – particularly in the longer end of the curve, resulting in further valuation losses as the Bank actively unwinds the APF through active gilt sales," Raja said in a research note Friday.
The Bank of England has hiked rates at 14 consecutive monetary policy meetings, taking its benchmark interest rate from 0.1% in late 2021 to a 15-year high of 5.25%. The market broadly expects a 15th hike to 5.5% at the next Monetary Policy Committee meeting.
Imogen Bachra, head of U.K. rates strategy at NatWest, said the hit to public finances — and therefore to the government's coffers — is twofold.
"On one hand, QT loses money because the Treasury takes the BoE's losses when gilts are sold at a lower price than paid. This was expected: the BoE bought bonds in a falling rate environment due to disinflation, while 'success' was to be defined by reflation and so higher rates," Bachra said in a recent note.
"On the other hand, though, while QE gilts are not sold, the BoE pays Bank Rate on the ~£900bn reserves it created to buy them. The higher Bank Rate rises, the more costly this interest expense becomes."
This could throw a wrench into the government's ability to offer public spending or tax-cutting pledges ahead of a general election slated for 2024.
Any profits the Bank of England generates on printing banknotes or buying and selling bonds, beyond its required capital buffers, is passed to the Treasury to be repurposed for public spending.
Deutsche Bank assessed both the net interest costs likely to be paid on central bank reserves and the deteriorating value of the APF bonds when the BOE crystallizes the "mark-to-market" losses by selling them or redeeming them.
Raja concluded that the cost to the Treasury of indemnifying the central bank over the next two fiscal years will be around £23 billion higher than the OBR forecast in March, coming in at £48.7 billion for the current fiscal year and £38.1 billion next year before falling sharply across the following two years as the bank rate falls and the overall size of the APF stock is depleted.
"Not only is inflation running higher than expected, the indemnity cost of the BoE's balance sheet operations will almost certainly be higher than what was expected only five months ago," Raja said, adding that this additional weight on the government's debt servicing bill will be reflected in Finance Minister Jeremy Hunt's autumn budget statement.
"The good news is that with government revenues running a lot stronger — due to a stronger economy these last few months — overall borrowing will still likely undershoot the OBR's forecasts heading into the autumn fiscal statement, masking the ballooning cost of the Bank's APF bill."
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Interest Rates
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Catch-up contributions are about to change. Starting in 2024, some workers who make catch-up contributions to employer-sponsored retirement plans, like a 401(k), will have to put this money in a Roth account. This means that they cannot deduct these contributions from their income taxes, but will be able to withdraw the account’s gains later in life tax free. This change will apply to anyone who earns $145,000 or more. Here’s what’s going on.
Consider working with a financial advisor as you evaluate your options for building a nest egg.
What Are Catch-Up Contributions?
Every tax-advantaged retirement account has a maximum contribution limit. This is the cap on how much money you can put into the account each year without paying taxes. For example, in 2023, an individual can only contribute up to $22,500 to his or her 401(k) account. For IRA account, you can contribute up to $6,500.
In order to incentivize retirement savings, the IRS allows “catch-up contributions” for those who are age 50 or older. So if you’re over the age of 50, you can contribute an extra $7,500 to a 401(k) or an additional $1,000 to an IRA in 2023. This is on top of the aforementioned contribution cap.
Historically, the rules around catch-up contributions have been based on the underlying account. If you make catch-up contributions to a 401(k), for example, you receive the standard tax deduction of that account. If you put catch-up contributions in a Roth IRA, you pay taxes up front and pay no taxes on withdrawals.
For higher-earning households, however, that’s about to change.
Section 603 Changes How Catch-Up Contributions Work
In 2022, Congress passed the law known as SECURE 2.0, a sweeping collection of changes to retirement in the United States. Although it had a few signature elements, most notably the transition of 401(k) programs from opt-in to opt-out, most of the law makes detailed changes to a very large number of programs.
But detailed changes aren’t the same as small ones, a fact that has become quite clear with the now-infamous Section 603.
In Section 603 of the SECURE 2.0 Act, Congress changed how catch-up contributions work for higher-earning households. Specifically, with employer-sponsored plans such as a 401(k), if you earned more than $145,000 in the previous tax year you must make all catch-up contributions on a Roth basis. This means that you cannot deduct the income they use for catch-up contributions, but will not have to pay taxes on the money or its earnings when you withdraw it later in life.
This rule does not affect IRA plans.
Contribution limits will not change, since individuals will still contribute this money to an employer-sponsored plan. Instead, employers who allow catch-up contributions will need to begin offering Roth plans in addition to their standard pretax retirement plans. This has led to some pushback, with retirement industry groups citing the time and costs involved with establishing new Roth plans.
These changes are set to take effect beginning Jan. 1, 2024.
What Does This Mean for Taxes?
The first thing to note is that Section 603 does not phase in. Individuals who earn $144,999 or less are exempt. They may fully deduct the income that they contribute to an employer-sponsored retirement account, including any catch-up contributions.
This section fully applies to individuals who earn $145,000 or more. They may fully deduct the income that they contribute to a 401(k) account up to the standard annual limit. They cannot deduct any income that they use for catch-up contributions and must pay taxes on that money. They must put this money into a Roth account, which will return its growth untaxed.
Specific tax impact will depend entirely on an individual’s income. Take, for example, someone who earns $150,000 and makes the maximum catch-up contributions. Without addressing other deductions or other tax implications, the impact on their income tax would look like this:
Currently they would be able to deduct this contribution, allowing them the following deduction:
Income – $150,000
Top Tax Bracket: 24% for income between $89,076 – $150,000
Tax Deduction – $7,500
Remaining Taxable Income – $142,500
Tax Deduction – 24% x $7,500 = $1,800
Final Income Taxes – $24,928
Income tax deductions always come from the highest income bracket first. In this case, the individual’s top tax bracket is 24%. They can deduct $7,500 from the money currently taxed at 24%, giving them a deduction worth $1,800 in total tax savings.
Starting in 2024, this same person will not be able to deduct catch-up contributions. Assuming the same catch-up contribution limit (which will increase each year), this person’s new taxes will look like this:
Income – $150,000
Tax Deduction – $0
Remaining Taxable Income – $150,000
Final Income Taxes – $26,728
The individual has functionally $1,800 less with which to invest. However, while it will make retirement saving more expensive up front, it will also incentivize employers to establish more Roth options in their retirement plans. These plans have much larger tax advantages in the long run, since ultimately the investor pays no taxes on the larger amount withdrawn in retirement, rather than the smaller amount invested up front.
For individuals looking to avoid this tax issue, a good option would be to open an IRA. These are pretax accounts, and you can have both a 401(k) (or equivalent) and an IRA at the same time. While IRAs have much lower maximum contribution limits, you can generally invest almost as much in an IRA as you could invest through catch-up contributions, making this a good equivalent investment strategy.
This Issue Has Been Mistaken for a Mistake
The new tax cap is not a mistake. The original text of SECURE 2.0 contained a drafting error related to catch-up contributions. In brief, among its changes, Section 603 deleted a small paragraph in the Internal Revenue Code. The deleted section of the Internal Revenue Code (IRS) establishes that, if the IRS allows a plan participant to make catch-up contributions to a 401(k) or other employer-sponsored plan, those contributions qualify for pretax status.
The idea was to prevent contradictory language in the tax code. But in deleting this section, instead of specifying that it only applies to some taxpayers, Congress potentially made pretax catch-up contributions illegal for everyone. Members of Congress have since stated that this was a drafting error and they intend to correct it, although at time of writing it has not been fixed.
Some reporting has conflated this error with the new tax cap, suggesting that Congress might roll back the $145,000 cutoff. This is inaccurate. The new catch-up contributions cap was intentional.
Bottom Line
If you earn more than $145,000 per year, starting in 2024 you will not be able to deduct catch-up contributions that you make to an employer-sponsored plan. Instead, all such contributions will have to go into a Roth plan, on which you will pay taxes up front but not when you withdraw the gains.
Retirement Planning Tips
A financial advisor can help you build a comprehensive retirement plan, including how to handle catch-up contribution opportunities. 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.
Catch-up contributions can be a great way to add extra liquidity to your retirement account, particularly given that most people will work and save for almost 20 more years. So it’s worth making the absolute most of them.
Photo credit: ©iStock.com/designer491, ©iStock.com/Paolo Cordoni, ©iStock.com/zamrznutitonovi
The post Earn Over $145k? You May Have to Pay Taxes on Your Catch-Up Contributions appeared first on SmartAsset Blog.
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Victor Garcia/Courtesy of Victor Garcia
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Customers at SolDias ice cream shops in Texas are encouraged to pay with cash instead of credit cards. Owner Victor Garcia is backing a legislative effort that aims to lower credit card processing fees through increased competition.
Victor Garcia/Courtesy of Victor Garcia
Customers at SolDias ice cream shops in Texas are encouraged to pay with cash instead of credit cards. Owner Victor Garcia is backing a legislative effort that aims to lower credit card processing fees through increased competition.
Victor Garcia/Courtesy of Victor Garcia
Whenever someone uses a credit card to buy a scoop of mango ice cream at one of Victor Garcia's shops in Texas, the financial system takes a bite.
Credit card fees gobbled up more than $25,000 of Garcia's sales last year. He's now posted signs at his two shops near Fort Worth urging customers to think twice before paying with plastic.
"Most are shocked," Garcia says. "Half of them say, 'Gosh, I have no cash. I wish I did.' People don't know. They just say, 'Hey, I get points, so I'm going to use my card.'"
Retailers have long complained the so-called "swipe fees" they have to pay for accepting credit cards in the U.S. are much higher than those in Europe, where the fees are strictly regulated.
The grumbling has gotten louder since the pandemic, as more customers have switched from paying with cash to credit cards.
U.S. retailers now pay about $160 billion a year in swipe fees, according to the Merchants Payments Coalition, a group that is looking to reduce those fees. That total has increased more than 50% since 2020, says Doug Kantor, who serves on the coalition's executive committee.
Some lawmakers are hoping to reduce swipe fees by promoting increased competition in the processing of credit card transactions. The bill would require big banks issuing credit cards to allow a rival network — other than Visa or Mastercard — to process card transactions.
The bill they've drafted has triggered a high-stakes tug of war between retailers and the financial sector, with largely unwitting consumers stuck in the middle.
Reverse Robin Hood
Every time someone buys something with a credit card — at a gas station, a grocery store or online — the retailer pays a "swipe fee," typically around 2.25%. Some of that money goes to the bank that issued the credit card. Some goes to Visa or Mastercard for processing the sale. And some of it might be kicked back to the customer as a "reward."
Some gas stations and other businesses add a surcharge for customers who use credit cards to cover the swipe fee. But most retailers just raise their prices, spreading the cost of swipe fees among all their customers, whether they're paying with plastic or not.
"In general, these fees are just baked into the cost of everything we buy," says Kantor, who is general counsel for the National Association of Convenience Stores. "Even consumers who are cash-payers and maybe can't even qualify for a credit card pay more for every good that they buy than they really should."
When a customer with a rewards card makes a purchase, the swipe fee is usually even higher. So lower-income cash customers are effectively subsidizing the airline tickets, resort stays and other rewards that go to better-off card-users — a $15 billion-a-year transfer that some have described as Robin Hood in reverse.
"It is unfortunately a very unjust system and one that's hidden from most of us so that we really don't even know what's happening," Kantor says.
Frederic J. Brown/AFP via Getty Images
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A display of credit cards accepted for use is seen on a door as a shopper steps out of a store in Monterey Park, Calif., on Sept. 12, 2023.
Frederic J. Brown/AFP via Getty Images
A display of credit cards accepted for use is seen on a door as a shopper steps out of a store in Monterey Park, Calif., on Sept. 12, 2023.
Frederic J. Brown/AFP via Getty Images
The Visa-Mastercard duopoly
Swipe fees are set by the Visa and Mastercard networks, which dominate the market for processing credit cards. Fees in the U.S. are eight or nine times as high as those in Europe, says Stanford finance professor Chenzi Xu.
Some big retailers have the clout to bargain for lower fees. Costco, for example, gets a break for accepting only Visa cards in its stores. But most retailers have little choice but to pay whatever Visa and Mastercard demand.
"If you happen to walk in with just a Mastercard, they don't want to give up on your purchase," Xu says. "So the way they deal with these large fees is that they just pass on the prices to their products."
A bipartisan group of lawmakers is pushing a bill that would require big credit card issuers to allow a network other than Visa and Mastercard to process transactions, in hopes the competition would lead to lower fees.
Banks and the credit card networks are pushing back, arguing the measure would jeopardize security and credit card rewards.
"We're going to prevail because I think Americans love their rewards," says Richard Hunt, executive chairman of the Electronic Payments Coalition. "Look, if the merchant doesn't want the credit card, there are other alternatives. Cash or checks. But we know America loves their credit cards."
Victor Garcia knows that, too. He's tried offering a discount to people who pay cash at his ice cream stores and even set prices in whole dollar amounts so customers don't have to juggle change. None of it's made much difference. His swipe fee bill keeps going up.
"That's a really hard thing to try to say, 'Hey, we're going to go out and try to change consumer habits,'" he says. "We said OK, we're going to let that fee be a part of, basically build it into the price."
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Michael R. Sisak, Associated Press
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NEW YORK (AP) — Donald Trump began testifying Monday morning in his civil fraud trial, producing the spectacle of a former president and the leading Republican presidential candidate defending himself against allegations that he dramatically inflated his net worth.
Trump’s turn on the witness stand, in a case that cuts to the heart of the business brand he spent decades crafting, amounts to a remarkable convergence of his legal troubles and his political ventures at a time when he also faces criminal indictments while vying to reclaim the White House in 2024.
The testimony gives him the opportunity to try to use the witness stand as a campaign platform, but its under-oath format, before a judge who has already fined him for incendiary comments outside of court, also invites clear peril for a businessman and candidate famous for a freewheeling rhetorical style.
WATCH: Minnesota Supreme Court hears lawsuit to keep Trump off presidential ballot
Trump walked slowly to the witness stand, tugging at his suit coat as he settled in for hours of questions in a lawsuit by the New York state attorney general that accuses him and his company of inflating his property values and deceiving banks and insurers in the pursuit of business deals and loans.
Within minutes, he was asked about the financial documents at the heart of the case — his annual “statements of financial condition.” They went to banks, lenders and others to secure financing and deals. The attorney general’s office says they were grossly inflated and fraudulent.
As he has in the lead-up to testifying, Trump downplayed the statements’ significance, pointing to a disclaimer that he says amounted to telling recipients to do their own calculating.
“Banks didn’t find them very relevant, and they had a disclaimer clause — you would call it a worthless statement clause,” he said, insisting that after decades in real estate, “I probably know banks as well as anybody … I know what they look at. They look at the deal, they look at the location.
READ MORE: Donald Trump Jr. says he never worked on key documents at father’s civil fraud trial
Though Trump early on answered questions in a matter-of-fact manner, his tensions with state Supreme Court Judge Arthur Engeron — who last month fined him $10,000 for violating a gag order — were evident.
Trump complained in court that his 2014 financial statements shouldn’t be a subject of the lawsuit at all.
“First of all it’s so long ago, it’s well beyond the statute of limitations,” Trump said before turning on the judge, saying he allowed state lawyers to pursue claims involving such years-old documents “because he always rules against me.”
Engoron said: “You can attack me in whichever way you want but please answer the questions.”
The courtroom at 60 Centre St. has already become a familiar destination for Trump. He has spent hours over the last month voluntarily seated at the defense table, observing the proceedings. Trump once took the stand — unexpectedly and briefly — after he was accused of violating a partial gag order. Trump denied violating the rules, but Judge Arthur Engoron disagreed and fined him anyway.
READ MORE: Trump’s relationship with far-right groups under scrutiny during Colorado ‘insurrection’ trial
The vast majority of his speaking has happened outside the courtroom, where he has taken full advantage of the bank of assembled media to voice his outrage and spin the days’ proceedings in the most favorable way.
He will also be coming face-to-face again Monday with Engoron, whom he has lambasted on his social media site in recent days as a “wacko” and “RADICAL LEFT, DEMOCRAT OPERATIVE JUDGE” who has already “ruled viciously” against him.
Among the topics likely to be covered: Trump’s role in his company’s decision making, in its valuing of his properties, and in preparing his annual financial statements. Trump is likely to be asked about loans and other deals that were made using the statements and what intent, if any, he had in portraying his wealth to banks and insurers the way the documents did.
Trump is also likely to be asked about how he views and values his brand – and the economic impact of his fame and time as president — and may be asked to explain claims that his financial statements actually undervalued his wealth.
READ MORE: Donald Trump is set to testify Nov. 6 in civil fraud trial. Ivanka Trump also called on to testify
Trump has argued that disclaimers on his financial statements should have alerted people relying on the documents to do their own homework and verify the numbers themselves – an answer that he’s likely to repeat on the witness stand. Trump has said the disclaimer absolved him of wrongdoing.
Eric Trump, the former president’s middle son, who testified in the case last week, said his father was eager for his appearance on the stand.
“I know he’s very fired up to be here. And he thinks that this is one of the most incredible injustices that he’s ever seen. And it truly is,” the younger Trump told reporters Friday, insisting his family was winning even though the judge has already ruled mostly against them.
Unlike most Americans, Trump has ample experience fielding questions from lawyers and has a long history of depositions and courtroom testimony that offer insight into how he might respond. But Cohen, who worked for Trump for more than a decade, said nothing in Trump’s past has come close to what he’s facing now since they were largely civil matters “where even though the dollar amounts were in the millions of dollars, they were never of any real consequence to him or obviously to his freedom.”
“Right now this New York attorney general case is a threat to the extinction of his eponymous company as well as his financial future,” he said. Trump’s forthcoming criminal cases — accusing him of misclassifying hush money payments, illegally trying to overturn the result of the 2020 election and hoarding documents at his Mar-a-Lago club “have far more significant consequences, most specifically the termination of his freedom.”
___ Associated Press writer Eric Tucker in Washington contributed to this report.
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Shares of Honasa Consumer, the parent firm of direct-to-commerce beauty and personal care Mamaearth, jumped slightly in a key public listing watched by many Indian startups as they evaluate their own initial public offerings.
Mamaearth, a seven-year-old company, was trading at 331.45 Indian rupees ($3.98) per share on NSE, above its 330 Indian rupees listing price on the local exchange.
The startup — valued at $1.2 billion in early 2022 — counts Peak XV Partners, Fireside Ventures, Stellaris Venture Partners, and Sofina among its backers. It raised about $92 million in an anchor round last week from over three dozen asset managers including Abu Dhabi Investment Authority, Fidelity, Norges Bank, Invesco and Goldman Sachs. (Peak XV has made a 10x-plus return on its investment in Mamaearth, according to debut listing price.)
The firm, founded by husband-wife entrepreneurs Varun Alagh and Ghazal Alagh, operates a portfolio of six distinct brands. Its eponymous main brand, Mamaearth, accounts for approximately 80% of its revenue in the fiscal year 2023. Honasa also operates The Derma Co, Aqualogica, and Ayuga, alongside those acquired, namely BBlunt and Dr Sheth’s.
Mamaearth’s business operations hinge on third-party manufacturing, with the company holding no manufacturing IP of its own. Its products reach consumers via an omni-channel network, with online sales, including direct-to-consumer and e-commerce, delivering 59% of total revenue across nearly 18,600 pin codes. Offline channels, contributing 36% of sales, span over 154,000 retail points, incorporating a mix of traditional and modern trade outlets, exclusive stores, and BBlunt salons.
In the fiscal year 2023, Mamaearth reported revenues of approximately $170 million, with the online channel yielding around 56% of this figure. The company maintains a gross margin of 70%, alongside an adjusted EBITDA margin of 3%. Offline sales now represent 36% of the total revenue, marking an increase for the fiscal period.
About a dozen other Indian startups are keenly monitoring market conditions as they assess the timing for their initial public offerings. Mamaearth earlier sought a valuation of $3 billion at its public debut, but later cut short the target as market conditions worsened.
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- The rate hike is Turkey's first since March 2021.
- Turkey steadily lowered its policy rate from 19% in late 2021 to 8.5% in March as inflation concurrently ballooned, breaching 80% in late 2022.
- Erdogan recently appointed Mehmet Simsek as finance minister, whose aim is to return Turkey to economic orthodoxy after a prolonged cost-of-living crisis.
Turkey's central bank jacked up the country's key interest rate Thursday, almost doubling it from 8.5% to 15% as the new economic administration of recently reelected President Recep Tayyip Erdogan embarked on a dramatic monetary policy U-turn.
The bank said there will be further gradual monetary tightening until the inflation picture in the country improves.
The whopping 650 basis point rate rise is the country's first since March 2021, but was below analyst expectations of a 1,150 basis point hike to 20%.
"The Committee decided to begin the monetary tightening process in order to establish the disinflation course as soon as possible, to anchor inflation expectations, and to control the deterioration in pricing behavior," the central bank, led by newly appointed Governor Hafize Gaye Erkan, said in a statement.
Some analysts criticized the central bank's move as not going far enough, however.
"Ouch — disappointing. Not enough," Timothy Ash, an emerging markets strategist at BlueBay Asset Management, wrote in an note via email. "They needed to front load hikes. Market won't like that."
The Turkish lira weakened to around 24.1 against the dollar following the news, from 23.54 before the decision was announced — a record low, according to Reuters data.
George Dyson, a senior analyst at the consultancy Control Risks, believes there will be further hikes in order to bring the policy rate up to 20% or higher.
Turkish Finance Minister Mehmet Simsek "has to be a little cautious," he told CNBC. "I'm confident he is worried about inadvertantly triggering a debt crisis by slowing the economy too fast."
Hamish Kinnear, a senior Middle East and North Africa analyst at risk intelligence firm Verisk Maplecroft, agreed.
"This is a sign that the new governor is looking to tread carefully to avoid a clash with President Erdogan – the last central bank governor to hike interest rates was fired by the president after less than five months in the post," Kinnear said.
Turkey steadily lowered its policy rate from 19% in late 2021 to 8.5% in March as inflation ballooned, breaching 80% in late 2022 and easing to just under 40% in May. Traditional economic orthodoxy holds that rates must be raised to cool inflation, but Erdogan, a self-declared "enemy" of interest rates who calls the tool "the mother of all evil," vocally espoused a strategy of lowering rates instead.
The result was a cost-of-living crisis for Turks as the country's currency, the lira, plummeted. It's lost some 80% of its value against the dollar in the last five years, and Turkey has found itself precariously low on foreign currency reserves as it sold billions of dollars in foreign exchange to prop up the lira.
The architect of Turkey's attempted return to economic orthodoxy is Simsek, the Erdogan-appointed finance minister who previously served as deputy prime minister and finance minister between 2009 and 2018, and is widely respected by investors. After several years of Erdogan exerting heavy control over Turkey's central bank, the president appears willing to let the monetary policymakers have more independence — at least for now.
"Erdogan has accepted that short-term pain is necessary to redress the economy, and that appearing to empower Simsek will play well with markets," Dyson said.
"The question will be how long Erdogan will tolerate that pain for, and if and when societal pressure get too much and he wrests back control from Simsek," he said. "The temptation will be ever present for Erdogan to intervene once again."
In mid-June, Erdogan said his opposition to raising rates was unchanged, but said he would abide by Simsek's decisions in order to bring down inflation.
"Some of our friends should not be mistaken, such as (asking), 'Is our president going for a serious change in interest rate policies?'" he told reporters at the time. "But upon the thinking of our treasury and finance minister," Erdogan added, "we have accepted that he will take steps swiftly, comfortably with the central bank."
A number of policy changes will be necessary to bring Turkey's economy back on track. In addition to the lira sitting at its weakest ever level against the dollar, Turkey's current account deficit has widened more than market expectations in recent months and official reserves have been drawn down, declining by more than $8 billion in April alone.
"Turkey is currently enduring a lot of macroeconomic vulnerabilities thanks to the low interest rate policy that has been implemented since Sept. 2021, and obviously high inflation," Can Selcuki, director at Istanbul-based polling data firm Turkiye Raporu, told CNBC.
"So this is an attempt to take the country back to a orthodox monetary policy and reduce inflation in the meantime, and get some space to start fixing the macroeconomic problems and roll back some of the policy that has been implemented in the lead-up to the election."
While many analysts have expressed confidence in the dedication of Turkey's new monetary policymakers to raise rates and cool inflation, some note that ultimately, Erdogan's level of authority over his government means if he wants to abruptly reverse course, he can.
"If the likely impacts of orthodox policies, such as slowing economic growth from interest rate hikes, appear to threaten the president's popularity he could perform a volte face and fire the new central bank governor," Verisk Maplecroft's Kinnear said. "There are no meaningful checks on Erdogan's power that would prevent him from doing so."
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Levelling Up Secretary Michael Gove has announced he will appoint commissioners to take over Birmingham City Council and launch a local inquiry into the authority after it declared itself effectively bankrupt.
The cabinet minister said residents and businesses in the city "deserve better" after the council issued a Section 114 notice.
He said his intervention package "is formed of two complementary parts".
"First, I propose to issue statutory directions to the council and to appoint commissioners to exercise certain functions of the council as required," he told the Commons.
"And second, I intend to launch a local inquiry to consider the more fundamental questions around how Birmingham got to this position and options for how it can become a sustainable council moving forward that secures best value for its residents."
The commissioners will oversee the day-to-day running of the council and scrutinise its financial governance and decision making, Mr Gove said.
Under their oversight, the local authority will have six months to prepare and agree an improvement plan "to return it to a sustainable financial footing".
Mr Gove said: "I do not take these decisions lightly but it is imperative in order to protect the interests of the residents and taxpayers of Birmingham, and to provide ongoing assurance to the whole local government sector."
Birmingham council effectively declared itself bankrupt after being hit with a £760m bill to settle equal pay claims.
The Labour-run council is the largest local authority in Europe, comprising 101 councillors (65 Labour, 22 Conservative, 12 Liberal Democrat and two Green).
Mr Gove went on to say that although he believes strongly in local government, "when failures of local government occur, we must act".
However Angela Rayner, Labour's new shadow levelling up secretary, said there were questions for central government to answer as she pointed out other local authorities were also in financial distress.
She said a string of councils declaring bankruptcy in recent years had been "caused by the Conservative's wrecking ball".
"Local authorities across the country are struggling. After 13 years he can't seriously say that it is all their own fault. Perhaps he can confirm that only one council issued a section 114 notice before his party took over in 2010, but since then eight councils have issued notice, with warnings that another 26 councils are at risk of bankruptcy over the next two years?
"So can he tell us, why have so many local authorities of all political stripes already issued section 114 notices on his watch?
"And this isn't a one-off. So can I ask him, what work his department is doing to support local authorities that are warning of financial distress now?
"The truth is, this crisis in local government has been caused by the Conservative's wrecking ball, with every swing another local council is pushed to the brink, and another local community falls over the edge.
"That is the difference between us. A Labour government would oversee sustainable long-term funding for councils, and we would work with local authorities and push power and wealth and opportunity out of Westminster."
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Picture this - you're tidying up your email inbox, sifting through your junk folder, and you stumble upon not one but two chilling emails. Both claim that your account has been hacked, asserting full access to all your accounts. The threat? Alleged videos of you in compromising situations, ready to be broadcast to your entire contact list unless a ransom in Bitcoin, totaling around USD 500, is paid within a specific timeframe. Sounds like a nightmare, right?
This is precisely what happened to one of our very own readers, Barbara, who reached out to us with her alarming experience.
Bitcoin blackmail scams: how do they work?
These intimidating emails that Barbara encountered are a classic example of a Bitcoin blackmail scam. Here, fraudsters claim access to your sensitive information and demand payment in cryptocurrencies like Bitcoin, leveraging their perceived anonymity. The swindlers may even concoct stories of hacking into your computer or webcam or installing stealthy software to monitor you: scary stuff, but primarily tall tales.
These scams often feed on usernames and passwords obtained from previous security breaches. If the intimidating email contains one of your former – or current – passwords, it's an alarm bell ringing. It's a signal to refresh the password for that account, and while you're at it, consider updating your other passwords too.
What happens if you pay up?
If you fall victim to a Bitcoin blackmail scam and decide to pay the ransom, the outcome is far from certain. While scammers may promise to keep the alleged compromising information confidential, there is no guarantee that they will honor their word. In many cases, victims who pay the ransom find themselves trapped in a never-ending cycle of demands, with the scammers continuously seeking more money.
Challenges in recovering funds lost to cryptocurrency scams
Moreover, even if you make the payment, recovering the funds or identifying the perpetrators can be extremely challenging. Cryptocurrencies like Bitcoin offer a certain level of anonymity, making it difficult to trace transactions back to the scammers. However, in some cases, victims have sought assistance from specialized crypto forensics firms that employ sophisticated techniques to track and trace cryptocurrency transactions. While these services can help in some instances, they often come with a hefty price tag, making them inaccessible for many.
Other crypto scams to be aware of
Bitcoin blackmail scams are just one piece of the vast puzzle of crypto-related scams. From fraudulent initial coin offerings (ICOs) to phishing attempts and Ponzi schemes, cryptocurrencies have unfortunately become a breeding ground for nefarious activities. According to crypto-scams.com, various blackmail scams are circulating that exploit the reputation and perceived anonymity of Bitcoin.
Fraudulent ICOs are one example. These scams offer investors new cryptocurrencies or tokens, promising incredible returns on their investments. However, many of these projects are nothing more than smoke and mirrors, leaving investors with empty wallets and shattered dreams.
Phishing attempts are another prevalent crypto scam. Scammers craft sophisticated emails or websites that mimic legitimate platforms to trick users into divulging sensitive information, such as passwords or private keys. Once the scammers have this information, they can gain unauthorized access to victims' accounts and steal their funds.
Ponzi schemes, a classic form of fraud, have also found their way into the crypto world. These scams operate by promising high returns to investors, typically from new investors' funds rather than from actual profits. As the scheme grows, it eventually collapses, leaving the majority of participants at a loss.
Unfortunately, these crypto scams exploit cryptocurrencies like Bitcoin's reputation and perceived anonymity. The decentralized nature of crypto transactions can make it challenging to trace and recover funds, making it an appealing playground for fraudsters.
FOR MORE OF MY SECURITY ALERTS, SUBSCRIBE TO MY FREE CYBERGUY REPORT NEWSLETTER BY HEADING TO CYBERGUY.COM/NEWSLETTER
Steps to take when receiving a threatening Bitcoin email
If you are ensnared in a similar predicament and receive one of these threatening Bitcoin emails, here's the game plan:
Don’t respond to threatening emails: Do not respond or engage with the sender of a threatening email - period.
Delete the email immediately: Delete the message or email immediately. It's a scam.
Don’t send money: Never send Bitcoin that an unknown sender is demanding via email.
Update your passwords: It’s possible you received this email because your data was exposed during a data breach that occurred. That means it is time to update your passwords. Create strong passwords for your accounts and devices and avoid using the same password for multiple online accounts. Consider using a password manager, which securely stores and generates complex passwords, reducing the risk of password reuse. Check out my best expert-reviewed password managers at Cyberguy.com/Passwords.
Report the scam: You can report Bitcoin blackmail emails to the FBI, the local police, and to the FTC.
Scan your computer for viruses: Having good antivirus software installed on all your devices can help prevent hackers from accessing your personal information and protect you from clicking on malicious links, such as those found in Bitcoin email scams. Get my expert-reviewed best antivirus protection for your iPhone, Android, Mac and PC at Cyberguy.com/LockUpYourTech.
Enable two-factor authentication whenever possible. Two-factor authentication adds an extra layer of security by requiring a second form of verification, such as a code sent to your phone, in addition to your password.
Invest in identity theft protection services. Identity theft protection companies monitor your personal information, such as your home title, Social Security Number (SSN), phone number, and email address for sale on the dark web or being used to open accounts. They can also assist in freezing your bank and credit card accounts. Some providers even offer identity theft insurance and a fraud resolution team to help with recovery. Get my expert-reviewed best identity theft protection services at Cyberguy.com/IdentityTheft.
Keep your software up to date. Regularly update your operating system, antivirus software, web browsers, and other applications to ensure you have the latest security patches and protections.
Kurt's key takeaways
In the ever-evolving landscape of cryptocurrencies, scams and fraudulent activities have unfortunately become an all-too-common occurrence. From Bitcoin blackmail schemes to ICO frauds, phishing attempts, and Ponzi schemes, the realm of crypto has its fair share of pitfalls. As we strive to embrace the potential benefits of digital currencies, it becomes paramount to be aware, educated, and vigilant in protecting ourselves from these scams.
Have you ever encountered or heard of crypto scams before? How do you stay one step ahead of fraudsters in the crypto world? Let us know what you think by writing us at Cyberguy.com/Contact
For more of my security alerts, subscribe to my free CyberGuy Report Newsletter by heading to CyberGuy.com/Newsletter
Copyright 2023 CyberGuy.com. All rights reserved.
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Crypto Trading & Speculation
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Solar Industries Q2 Results Review - Record Margins; Benign Prospects: ICICI Securities
Exciting prospects but partially priced in
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Solar Industries India Ltd.’s Q2 FY24 profitability is its best-ever. Key points:
Ebitda margin surged to a record 24.9% on better price-cost spread.
Explosive volume uptick of 13% YoY.
Defence comprised 8% of overall volume.
Order book of Rs 39.2 billion, of which Rs 10.5 billion is for defence.
Going ahead, management believes that:
FY24 volume growth of 20% YoY is achievable.
FY24 Ebitda margin is likely to be higher than Solar Industries' 20-22% guidance.
Defence revenue is likely to skyrocket hereon.
We believe that the stock’s current market price already has some of these benefits priced in. Taking cognisance of management’s guidance, we raise our FY24E/FY25E earnings per share by 14%/12% and valuation multiple to 45 times FY25E EPS (earlier 40 times).
Our revised target price works out to Rs 5,920 (earlier Rs 4,700). Downgrade to 'Add' (earlier 'Buy')
Key Risks
Delay in Award of Pinaka order.
Further fall in Ammonium nitrate price leading to negative price-cost spread.
Slow traction in construction and infrastructure segment.
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.
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Renewable Energy
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In politics, as in comedy, timing is everything. From measuring progress on policies to the deadlines leaders set themselves, the “when” is often as important as the “what”.
And after Jeremy Hunt’s tax-cutting Autumn Statement, it’s no surprise that his decision to implement national insurance (NI) changes on 6 January has triggered a rash of speculation about the timing of the general election.
The Chancellor’s new year boost to pay packets certainly gives Rishi Sunak the option of going to the polls in May, especially if a Spring Budget follows up the NI cuts with lower income tax, inheritance tax or stamp duty rates.
In his morning-after media round, Hunt said “it’s silly to think about this in terms of the timing of the next election”. Some may take that with a hefty shovel of salt, not least as some in Downing Street set the hare running that the party would be on election footing from January.
But to be fair to Hunt, there was a more pressing reason than giving the Government a nice run-up to an election. “Why did I want to bring it in from January? People are still seeing their energy bills go up,” he said. “I want to bring help for families as soon as possible.”
He’s right that there is a need for urgency. As the consumer champion Martin Lewis pointed out, from 1 January the new higher energy price cap kicks in. Because people won’t get the £66 per month subsidy they had last winter, the typical home will pay £28 more in energy bills per month – and around £45 more per month in the coldest months.
That rise alone would more than wipe out the £37 per month that Hunt’s NI cuts will put back in the wage packet of the average earner on about £35,000.
The Government can try to buy votes, but with the clock ticking down to that election their main mission is to try and buy time. That’s what they most need to show the voters that the country really is on the right track, that inflation is in a better place, the economy is growing and living standards are rising.
Timing is crucial for measurement of party promises too, particularly the benchmarks used. It was notable after the Autumn Statement that Treasury officials were much keener on saying that personal taxes had been cut significantly “since 2010” rather than “since 2019”, when the current Parliament started.
The latest net migration statistics are another case in point. The figure of 672,000 for the 12 months to June 2023 looks like a slight improvement, but the figure for the whole of 2022 has been revised up to a record-breaking 745,000.
What makes this even worse is that the Tory 2019 manifesto actually promised to cut migration – from the then figure of 229,000. Amid fears that immigration will wipe out the “good news” of the Autumn Statement, the right-wing group of New Conservative MPs warned of a “do or die” moment for their party and said Sunak has to show how he’ll hit that manifesto target.
Worse still, in a brutal assessment of Hunt’s plans, the Resolution Foundation think-tank has concluded this will be the first Parliament on record in which household incomes in real terms will be lower at the end than at the beginning. Time is running out to turn that around too.
The Prime Minister talks about “long-term decisions” and suggests his growth plans need another term of Tory rule to pay off.
At the next election, Sir Keir Starmer is bound to mock Sunak’s pleas for patience from the electorate, urging the voters to finally “call time” on a weary and jaded party that’s been in power just too long. Any opposition needs to convey a sense of urgency, of the need for change.
But what could prove very tricky for Labour is its attempt to pivot straight after the election to its own plea for patience. Tony Blair famously said on the eve of the 1997 election that there were “24 hours to save the NHS” but took five years to give it a huge injection of funds.
It’s already clear from Starmer and Rachel Reeves that they think it will take at least 10 years to fix “broken Britain”.
The public are prepared to cut their governments some slack, but not indefinitely, and time ultimately is the enemy of all politicians. The only solution is to win a large majority and start work straight away on a credible plan that can deliver real progress on their promises by the time of the next election.
But with voter volatility so high these days, and with attention spans and the news cycle shorter than ever, both main parties have more in common than they admit.
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United Kingdom Business & Economics
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Americans say they'll need about, a pie-in-the-sky figure for most households given that the holds just over $113,000. But a nest egg of that size isn't out of reach — as long as you start saving at the ideal age, according to new research.
The optimal age to start socking away money for your golden years is 25 years old or younger, according to a new report from the Milken Institute, an economic think tank. And there's a very simple mathematical reason for that number. Due to the power of compounding, starting a retirement savings while in one's early 20s — or even younger, can help ensure your assets grow to at least $1 million by age 65.
"The message of early investing needs to be conveyed in ways that resonate with Americans across the board," the report noted.
Compounding — famously ascribed by billionaire investor Warren Buffett as one of the keys to his success — is the reason why it pays to save as early as possible. The term refers to the accrual of interest earned on an initial investment, which is then reinvested with the original savings. That combined savings amount goes on to earn more interest, with the original investment snowballing in value as the pattern continues year after year.
For instance, a 25-year-old who saves $100 a week in their retirement account, and receives a 7% return on that investment will retire with $1.1 million at age 65, the analysis noted.
While that may seem like an easy recipe for investment success, reaching that $1.1 million investment egg becomes much harder when starting to save at a later age, due to the smaller time period for compounding to work its magic. A 35-year-old who begins saving that same $100 per week will end up with $300,000 at age 65, the report said.
Unfortunately, some generations of Americans began saving much later in their careers, the study found. For instance, baby boomers — the generation that's now retiring en masse — typically started saving for their golden years at age 35, while Generation X began at a median age of 30, it said. There's more hope for younger generations: millennials began saving at age 25 and Gen Z, the oldest of whom are now in their early 20s, at 19.
A growing retirement gap
Also, the retirement gap, or the difference between what one needs to stop working versus what they have saved, is growing for some American workers.
Retirement savings rates are lower for women and people of color, for instance. Part of that is due to lower earnings for women and people of color, the Milken report notes. Women are also more likely than men to take time off from work to care for children and elderly relatives, which hurts their ability to save for retirement.
And low-wage workers are going backward, with just 1 in 10 low-income workers between the ages of 51 and 64 having any funds put away for retirement in 2019, compared with 1 in 5 in 2007 prior to the Great Recession, according to aby the U.S. Government Accountability Office.
To be sure, saving for retirement is easier if you've got a job that offers a 401(k) with a company match, something to which half of all workers. Expanding access to such accounts would help more Americans achieve their retirement goals, the reported added.
"The lack of savings vehicles for many workers is one of the most important issues that policymakers and the private sector must address," the Milken report noted.
for more features.
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Personal Finance & Financial Education
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Let's face it – online dating has always been a bit of a circus. Between ghosting, catfishing and breadcrumbing, it's a wonder anyone finds romance at all. It's safe to say online dating is a downright chore these days.
Remember those cringe-worthy dinner dates where you dropped a hundred bucks only to realize you'd never see the person again? Yeah, that was bad. But now there's a new threat in town that makes those expensive meals feel like chump change. This isn't your run-of-the-mill "send me a gift card" hustle.
We're talking about crypto-romance scams, a cruel blend of heartstrings and purse strings, served with a side of bitter cryptocurrency regret. So, who's behind these horrible scams you ask? They're usually run by criminal gangs in Asia in what’s known as a "pig butchering" scam.
Florida man scammed for nearly half a million dollars
Take, for instance, the case of a hapless Floridian who found himself caught in this new digital web. Using OkCupid, a popular online dating platform, he met what he thought was a potential romantic interest. As their relationship blossomed, she asked for some help in the form of Bitcoin, to be sent via Binance, one of the world's largest cryptocurrency exchanges, according to cybernews.com.
Smitten and unsuspecting, the man went through the hoops of buying Bitcoin, transferring it to Binance, and sending it to the woman he's started to care about. Only after the virtual coins had left his digital wallet did he realize he'd been duped out of $480,000. The woman he thought he was getting to know? Poof. Gone. All that's left is a heart heavier than his now-empty cryptocurrency wallet.
How romance scams exploit vulnerability and deceive victims
Let's dive a bit deeper into the mechanics of this crypto-romance scam and how an ordinary person can be scammed out of nearly half a million dollars.
Building trust
The scammer starts by establishing a relationship online, often through a dating platform like OkCupid. They create a compelling, believable persona and engage in regular, friendly conversation with the victim, building an emotional connection over time.
The financial distress story
Once a level of trust has been built, the scammer introduces a problem that requires financial help. They might say they're facing personal difficulties, have a family emergency, or are in some sort of financial crisis.
Introduction of cryptocurrency
The scammer then suggests that the fastest or most convenient way for them to receive financial help is through cryptocurrency, like Bitcoin. They guide the victim in purchasing and transferring the cryptocurrency, often using a popular exchange like Binance, Coinbase or any of the others.
The transfer
The victim, believing they're helping someone they care about, purchases the cryptocurrency and sends it to the scammer's digital wallet. This action requires some tech savviness. A person would first need to give you a long string of numbers and digits in order for you to send it anywhere. These numbers and digits represent another person's digital wallet. Think of it like a bank account and sending a direct deposit via a checking and routing number. A few steps are involved, yet overall the process is fairly quick, with the funds landing in the receiving wallet almost instantaneously and permanently.
The vanishing act
Once the scammer receives the cryptocurrency, they disappear. The victim is left out of pocket, and since cryptocurrency transactions are irreversible and anonymous, they have little recourse for getting their money back. However, with advancements in tech and forensics, investigators have been successful in retrieving funds from previous scammers in the past. Unfortunately, this option remains extremely costly and reserved for those with unlimited resources leaving ordinary folks with few options.
How to protect yourself against these scams
How do we guard our hearts and our wallets in this new era of crypto-romance scams?
Vigilance in online dating
In the digital world, not everyone is who they claim to be. Be wary of potential romantic interests who ask for money or gifts or those who want to move the relationship along too quickly. Keep your personal and financial information private, and never share it with someone you haven't met in person.
Verify the identity
Request additional information or proof to verify their identity, such as video chatting or meeting in person if possible. Exercise caution before getting emotionally invested in someone you haven't met in real life.
Research and verify
Conduct an online search using the person's name, email address, or phone number to see if any suspicious or fraudulent activities are associated with them. Reverse image search their profile pictures to check if they are stolen from elsewhere on the internet. You can also reverse-search their phone number for free by following the instructions found here.
Understand cryptocurrency
To understand crypto, you might have to read a few books. However, the gist of it is simple enough. Cryptocurrency transactions are irreversible. Once the money is sent, it's gone. Understand the risks involved (there are many), and never agree to send money via cryptocurrency unless you're absolutely certain of where and to whom it's going.
Report suspicious activity
If you find yourself on the wrong end of a scam, don't keep it to yourself. Report it to the dating site, local law enforcement, and any relevant cybercrime units. You could help stop someone else from falling into the same trap.
Use reputable dating platforms
Stick to well-known and reputable dating websites or apps with security measures to help protect their users from scams. These platforms often have guidelines for safe online dating and report suspicious users.
Trust your instincts
If something feels off or too good to be true, trust your gut instincts. Take your time in getting to know someone before sharing personal information or becoming emotionally involved.
Invest in personal information removal services
I highly recommend you remove your personal information that can be found on various people search sites across the web. If you give someone your email address or phone number, they could potentially reverse-search your information and get your home address.
While no service promises to remove all your data from the internet, having a removal service is great if you want to constantly monitor and automate the process of removing your information from hundreds of sites continuously over a longer period of time.
Kurt's key takeaways
Keeping our hearts and wallets safe in this wild ride of online dating and cryptocurrency dabbling can feel like a high-wire act without a safety net. Remember, a dash of caution, a sprinkle of knowledge, and a hearty dose of common sense can keep us balanced. If it sounds too good to be true, it probably is, right? So, let's keep our wits about us as we navigate these tricky waters.
With that in mind, here's a thought: as we're juggling the search for genuine digital Romeos while dodging smooth-talking crypto Casanovas, how do we ensure we're not the next victim of a swindle? How do we keep our hearts open but our digital wallets locked tight?
What precautions do you take to protect yourself from online romance scams? Share your tips and experiences with us by writing us at Cyberguy.com/Contact
For more of my tech tips & security alerts, subscribe to my free CyberGuy Report Newsletter by heading to Cyberguy.com/Newsletter
Copyright 2023 CyberGuy.com. All rights reserved.
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Crypto Trading & Speculation
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Crypto Resumes Drop After SEC Crackdown Led To Weekend Selloff
Bitcoin dropped 1.1% to $25,844 as of 2:55 p.m. in Singapore after tumbling as much as 3.9% on Saturday.
(Bloomberg) -- Cryptocurrencies resumed losses Monday, though staying above their weekend lows, as last week’s regulatory crackdown by the US Securities and Exchange Commission weighed on sentiment.
Bitcoin dropped 1.1% to $25,844 as of 2:55 p.m. in Singapore after tumbling as much as 3.9% on Saturday. Polygon’s MATIC slid 3.3% and Chainlink’s LINK dropped 2.7%. Both MATIC and LINK had slumped more than 10% Saturday.
The SEC launched lawsuits last week against market leaders Binance Holdings Ltd. and Coinbase Global Inc., and flagged a number of altcoins as unregistered securities, including MATIC, Solana’s SOL and Cardano’s ADA.
An index created by CryptoQuant that tracks tokens listed as securities by the SEC has tumbled by 28% since June 4, compared with a 4% drop in a combined index of Bitcoin and Ether. The tokens have lost around $23 billion in market capitalization since the SEC lawsuits last week.
Sentiment remains shaky in the digital-asset sector after the recent regulatory clampdowns in the US, spurring market makers to pull out funds, said Richard Galvin, co-founder at DACM, a Sydney-based hedge fund that invests in digital assets. “There was some bounceback after the overselling on the weekend, but markets are extremely fragile.”
Crypto exchange Binance said Friday its US-based unit will halt the use of dollars on the platform as banking partners are preparing to withdraw support.
The pace of withdrawals from Binance has slowed, and it saw $138 million in net outflows in the past 24-hours on the Ethereum blockchain, according to data from Nansen.
“Net outflows from Binance are not insignificant but still much smaller than what we saw in November during the FTX collapse, as Binance isn’t currently facing a crisis of confidence from their users,” said Caroline Mauron, co-founder of digital-asset derivatives liquidity provider OrBit Markets.
An index of the biggest 100 digital tokens declined 0.8%. The total crypto market cap slipped to $1.09 trillion on Monday, according to data from CoinGecko.
“Crypto specific factors are playing the main role given the recent SEC actions,” DACM’s Galvin said. “It seems like there is a resistance on the downside at $1 trillion market cap,” he said.
Regulatory uncertainty over the classification of crypto tokens is adding to investor jitters. While US regulators view Bitcoin as a commodity, SEC Chair Gary Gensler has said most other tokens are subject to the agency’s investor-protection laws and that trading platforms should register with the regulator.
Robinhood Markets Inc.’s decision Friday to drop certain altcoins from its platform just days after the SEC brought enforcement actions against Binance and Coinbase also weighed on sentiment.
“There is some rotation of capital from altcoins into Bitcoin given higher dominance of BTC,” said Stefan von Haenisch, head of sales trading at OSL SG Pte in Singapore. Still, “$26,000 for Bitcoin looks like immediate short-term resistance,” he said.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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"I was on universal credit. If I didn't shoplift I'd only have been able to afford packet noodles."
Ash (not their real name) is a 25-year-old south London resident "living pay cheque to pay cheque".
During the pandemic, Ash wasn't eligible for furlough. They lost their job and their shoplifting habit began.
"The cost of living started my shoplifting," says Ash, adding that food prices have only gone up since.
Shoplifting is a criminal act which can land you in prison. Yet figures suggest the number of people doing it, like Ash, is increasing.
The Co-op has warned that soaring levels of retail crime could lead to some communities becoming Co-op warns of 'no-go' areas as crime in shops soars.
The convenience store operator said crime in its outlets had hit record levels, with about 1,000 cases of crime, shoplifting and anti-social behaviour in its shops every day in the six months to June.
And data analysed by the BBC shows shoplifting offences have returned to pre-pandemic levels as the cost of living rises.
In March, police forces in England, Wales and Northern Ireland recorded nearly 33,000 incidents of shoplifting - a significant 30.9% increase compared with March last year.
But there is no published data looking at who is shoplifting or why.
"Only about 5% of shoplifters we catch go to court, so you can't ask most people why they're doing it," says Tom Holder from the British Retail Consortium, which represents supermarkets and other retailers.
I sent a freedom of information request to the Ministry of Justice (MoJ), asking for data on shoplifting arrests broken down by age, income and area. The MoJ said it holds "some of this data", but told the BBC processing it would cost too much.
To get an insight into why people are willing to break the law, I put a shout-out on my social media accounts, asking for anyone who had stolen from a shop to message me privately if they were willing to talk.
Several got in touch, and some shop workers did too, with their experiences of dealing with the crime. None wanted their real names to be used in this article - the shoplifters for obvious reasons, and the shop workers because they did not want to be identified by their employers.
Choices
Ash is now employed, earning just over £1,000 a month, which is about a third less than the London Living Wage, a calculation of what we need to earn to afford essentials.
"If I was earning enough I'd probably stop [stealing]. At the moment I have to choose between paying for food or being able to go out to see my friends. I shouldn't have to make that choice."
When asked why they don't do free activities, Ash responded: "Living in London there is little you can do for free. And then transport is still expensive."
They believe the cost of living crisis means working class people "can't do anything but go to work".
"I refuse to accept this," Ash says. "I'm stealing food - this should be affordable."
On the other side of the shopping aisle, so to speak, is Jackson, a supermarket assistant in central London.
He believes those who spend money on luxury items instead of buying essentials have got their priorities wrong.
"Some feel entitled to steal but it's not an excuse. Cut your cloth accordingly as they say. I can't afford to go to a pub on my wages, so if I want booze I get it at the shop," he says.
Jackson has 20 years' experience working on the shop floor. He believes who is stealing is changing. "All sorts of people are stealing nowadays, folk you'd not assume. Different ages as well."
Lola, a 23-year-old student at Oxford University, may not be the type of person who springs to mind when someone thinks of a shoplifter.
"I only steal things I need but I can't afford. Like instant coffee. How's it £7?" she says.
Lola is living off a £12,000 student loan while she completes her Masters. She doesn't get any help from her parents. After paying rent, she says she struggles to afford basic items so has turned to shoplifting.
"I'm a student and I can barely afford to eat. It should be everyone's right to afford a shop a week."
Last year, Lola was working full-time on a good salary and she didn't shoplift. "When you have a full-time job, paying £7 for coffee isn't as hard hitting," she says.
When asked why she doesn't buy cheaper products she said she prefers the taste. Because she used to be able to afford it, she's gotten used to it.
"I'm not defending thieving, but I think stealing £7 here and there doesn't have a huge impact."
'Police aren't interested'
Shoplifting cost retailers almost £1bn in 2021-22, according to the BRC. About 70% of this figure was for crime prevention, and the remaining 30% was direct losses due to theft.
Mark, a 37-year-old supermarket manager from Nottingham, says little is done about shoplifting.
"We don't call the police anymore. They won't come," he says. "Unless the thief has stolen around £500 worth of items the police aren't interested."
National Police Chiefs' Council (NPCC) lead for business crime, Assistant Commissioner Paul Betts, said: "When responding to shop theft all police forces have their own response model which considers the threat, harm, and risk of every call. That is why it is so important to provide as much information as possible when reporting theft.
With security guards' days already reduced, Mark believes most shoplifters are "hardly noticed" at his supermarket.
Indeed, Ash thinks security guards feel sorry for people's financial situations. "I got caught in Tesco and told security I couldn't afford the food. He ended up apologising to me."
Both Jackson and Mark told me that, while not common, there was always the potential for a shoplifter to turn violent when confronted, particularly men.
"If someone asked what's the worst part of my job, I'd say dealing with shoplifters. I'm not a naturally confrontational person and it's not meant to be part of my job," says Mark.
So what would they like to see done to tackle shoplifting?
Jackson and Mark both call for better police response, and more security.
"We used to have a guard for five days a week. Since March we only have them for two," says Mark. "It's an absolute free-for-all."
Assistant Commissioner Betts said the NPCC was doing "everything possible to tackle offenders and support retailers in reducing shoplifting and attacks on retail staff", including providing guidance and training to retailers on premises security.
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Consumer & Retail
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Government Says Over 1.06 Lakh Companies Voluntarily Exited In Last Five Years
Besides, many companies have sought voluntary liquidation under the Insolvency and Bankruptcy Code (IBC).
More than 1 lakh firms voluntarily exited under the companies law in nearly five years, the government said on Monday.
Besides, many companies have sought voluntary liquidation under the Insolvency and Bankruptcy Code (IBC).
"From FY 2018-19 to FY 2023-24 (up to Nov. 30, 2023) 1,06,561 companies have exited voluntarily under section 248(2) of the Companies Act, 2013.
"From FY 2018-19 to FY 2023-24 (up to Sept. 30, 2023) final reports of 1,168 companies have been submitted by liquidators under section 59 of the Insolvency and Bankruptcy Code, 2016 (Code), of which final dissolution orders have been passed by NCLT in 633 cases during the said period," Union Minister Rao Inderjit Singh told the Lok Sabha.
Section 248(2) of the Companies Act pertains to voluntary exit of companies while Section 59 of the IBC relates to voluntary liquidation of companies.
In the last five years, Singh said the time taken for voluntary exit under Section 248(2) of the Companies Act, 2013 has varied between an average of 6-8 months to even 12-18 months in some cases.
Under the IBC, the average time taken for dissolution of companies after submission of final report by the liquidator has been in the range of 7-9 months. The average time taken by liquidator to submit final report for Adjudication to NCLT has been about 14 months, Singh, who is Minister of State for Corporate Affairs, said in a written reply.
Earlier this year, the government set up the Centre for Processing Accelerated Corporate Exit (CPACE) to centralise and expedite voluntarily exit of companies under Section 248(2) of the Companies Act, 2013.
"Under CPACE the time taken for voluntary exit during the current year is around 110 days. 470 cases are currently pending for voluntary liquidation under section 59 of the IBC till September 2023. Further, 3,695 cases are pending for voluntary corporate exit under section 248(2) of the Companies Act, 2013 with CPACE," Singh said.
In a separate written reply, Corporate Affairs Minister Nirmala Sitharaman said 7,946 foreign companies have registered their Indian subsidiary companies during the period from FY 2018-19 to FY 2022-23 (up to November).
"The increase in foreign direct investment indicates the confidence of the foreign investors in the business atmosphere of the country," she added.
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Banking & Finance
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tudents in London are paying well above the maximum level their loans can stretch to, after prices jumped 20 per cent in just one year, new data analysis shows.
Those renting privately in purpose-built student accommodation (PBSA) can expect to pay around £19,706 to live in the capital for the 2023-24 academic year, according to PwC analysis of StudentCrowd data.
The amount is one and a half times the maximum maintenance loan available for students from England living away from home in London, which is currently £13,022.
Studying in London has come with a significant hike in rental costs over the past year, PwC found, with the average price jumping 20 per cent to £395 per week between May 2022 and May 2023.
The maintenance loan is intended to help those in education with their living costs. But rents are outstripping the maximum the Government-backed scheme can lend to students, even outside of London.
The average annual rent for private student accommodation outside of the capital for the coming academic year is £10,227, compared to a maintenance loan limit of £9,978.
“It’s not really a stress you need when you’re trying to be a student,” says Jimmy Demetriades, 19, who will be moving to London from Littlehampton to study music at King’s College in September.
Demetriades has been allocated a maintenance loan of £6,400 for his first year – £2,100 less than the cheapest accommodation offered at King’s, for which he was quoted £8,500 for nine months. On King’s College’s website, the most expensive rooms are £465 per week (£18,600 for nine months).
“Bills are included, but it’s one room,” explains Demetriades. “You’re going to have to somehow make up that money.”
Demetriades registered his interest for accommodation, but by the time King’s College responded two weeks later, there were no rooms left – leaving him to navigate London’s competitive rental market alone.
“You’re just kind of stranded…It’s even more of a problem in London because the housing market is so competitive and deposits are ridiculous, which is hard for an 18 or 19-year-old to come up with.”
Demetriades started his search for a property in June, attending viewings with up to 15 other people. He was budgeting £1,000 per month on rent.
As well as large deposits, many of the places he contacted wanted him to move in in August, which would mean paying for an extra month’s accommodation. “One viewing I went to was £750 in Shepherd’s Bush. All bills were included, but it was a tiny room – really not a lot for the money.”
Fortunately, Demetriades was able to find a “miracle” one-bedroom apartment in Acton for £600 per month, belonging to someone he knew. Although the find —and price — was a “godsend”, his maintenance loan is still not enough to cover a year’s rent.
Demetriades is already working part-time in a supermarket, but he has calculated that he will need to work 20 hours a week while studying to cover the rest of his rent and expenses. Understandably, he is concerned that this will compromise the studies and experience he is paying £27,000 for.
“It’s going to make it a lot more stressful than it could be,” he says. “[Money] is a concern. London’s expensive…It’s just a fear and insecurity of not knowing if you’ve got a place to live – and not knowing if you’ve got enough to live off.”
Glasgow and Manchester both saw similar rent increases to London, up 19 per cent and 21 per cent respectively.
“It’s clear the challenges felt by students and universities across the UK are more pronounced in London, where the rental pressures are likely to be felt to a greater extent,” said Karen Best, head of education lead advisory at PwC.
“There are no easy or fast fixes that do not come with considerable compromises, whether financial or that adversely impact student experience. However, from what we see there is widespread motivation across all market participants to relieve these pressures.”
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Real Estate & Housing
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The biggest ever public investment in childcare in England was announced in this week's Budget.Â
At the moment, eligible parents can claim up to 30 hours of free childcare for three and four-year-olds, as well as 15 hours for some two-year-olds.
The reforms will extend this to all children from nine months to five years by September 2025.
But the plans face major hurdles in funding, staff recruitment and the availability of childcare spaces.
'Get the funding right'
Nursery providers say the amount the government pays them for free childcare hours - known as funded places - does not cover the costs of providing those hours.
The shortfall is around £1.82bn, the Women's Budget Group estimates. Most make up the difference by increasing the fees for non-funded places, or charging for extras such as food and day trips.
The government said in the Budget that the hourly rate it pays to local authorities for funded places for two-year-olds will rise by 30%. For three and four-year-olds, it will rise by 4%.
Kara Jewell opened a new nursery in Portsmouth last year because of the lack of provision for families in her area - but it's currently operating a loss.
She says that with the minimum wage due to rise in April, if the funding remains this low "there will be no nurseries left" by the time the roll out of the new plan begins in April 2024.
The Institute for Fiscal Studies predicts that once the government's new reform are fully introduced in September 2025, ministers will be in charge of the price of childcare for 80% of all pre-school children in England. "It raises the stakes for getting the funding right," the think tank says.
There will be far less scope for providers to make up funding shortfalls by cross-subsiding, the Early Years Alliance explains, which could have "dire consequences for the sector".
The Department for Education said by 2027-28 it is expecting to be spending in excess of £8bn every year on free hours and early education, and that there will be further uplifts in the funding rates.
Lack of qualified staff
The government's plan also relies on recruiting qualified staff to cater for more children attending nurseries and childminders.
But the sector already struggles to recruit and retain staff.
"You can't do these developments if you don't invest in the workforce" Prof Eunice Lumsden, the head of childhood, youth and families at the University of Northampton, explains.
She says the early years sector has one of the most crucial workforces for both the economy and children's lifelong outcomes - and that "pay scales must be at the right level".
Hourly rates are well below the average of other occupations, says Kerris Cooper, from the Education Policy Institute. This puts people off entering or remaining in the sector, she says.
Prof Lumsden says the government has put money into raising the quality of the workforce - but it's not addressing the wider issues. "We never have a recruitment campaign talking about how we need the best of the brightest working with our youngest children - it is such a skilful important job that is so undervalued."
Plans to relax ratios on the number of children each adult can be in charge of from September is also likely to drive more educators out of early years, Neil Leitch, from the Early Years Alliance, claims.
Currently one adult can be in charge of four two-year-olds, but that will now be increased to five children.
The Department for Education says the change will give providers more flexibility, although its consultation on the issue found that most places were unlikely to introduce it because of safety concerns and staff workload.
It says it will work closely with the sector to develop plans to grow, develop and support the workforce.
Shortage of childcare spaces
When the government's plan rolls out, more parents will be looking for a space for their child in a nursery or a childminders - but there is already a shortage of spots.
Nearly half of areas do not have enough available spaces for children under two, and a third don't have enough space for three and four-year-olds, according to the latest Coram report.
So a key proposals from Chancellor Jeremy Hunt is to encourage more childminders to enter the workforce.
New joiners are set to receive £600 when they sign up as part of a pilot - and this will increase to £1,200 for those joining through an agency.
More than 10,000 childminders have closed in the past five years, according to Ofsted.
Kara Jewell, the nursery director at Sparkle Lodge Early Years, also works as a childminder. She says the money will help childminders to start up, and pay for things like health declarations, insurance, and resources.
But "the funding issues are the same" for childminders as with nurseries, she says - the money given by the government for the current free hours is too low.
She believes that childminding also needs to be recognised as an education profession.
The Department for Education says more will be announced on this shortly.
Prof Lumsden says that on paper, the plan looks like an amazing offer for families.
In reality, "we have to see how it works out, because for me it's about whether our kids are safe and having the right qualified staff around them".
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Workforce / Labor
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Jeremy Hunt’s Autumn Statement failed to lift the Conservatives out of a second year lagging behind in a national opinion poll.
The Tories were the party of choice for 28% of people surveyed by Deltapoll, compared to 42% for Labour and 11% for the Lib Dems.
Director Joe Twyman said: ‘There has been a narrowing of the gap between the Conservatives and Labour, but it is within the margin of error.
‘The Conservatives are up one point, Labour are down two points.
‘Crucially, there has been no change in the economic competence data either, so if you had to summarise all of this you would say the Autumn Statement as yet has had no significant impact on our polling, either voting intention or economic indicators.’
The last time the Tories were ahead in the UK public opinion consultancy’s poll was in November 2021, when Boris Johnson was in No10.
Mr Hunt’s statement was widely viewed by political commentators as preparing the ground for the election, with the package including cuts to National Insurance contributions, a rise in the National Living Wage and a commitmentRishi’s fortunes ‘dipping by the day’ as Tories hit two-year slump | UK News | Metro News to the pensions triple lock.
However there was no sign of a significant electoral revival among the 1,996 adults surveyed by Deltapoll.
‘Ultimately, most people, that is the average person in the street, is not paying attention to the specifics of the Autumn Statement,’ Mr Twyman said.
‘In the artificial construct of a survey instrument, when you ask people if they support or oppose the specific policies that were announced during the statement, most have the majority of people supporting them.
‘But the majority of people didn’t think it would make a difference to them or to the economy and their expectations for their household situation and the UK’s economic situation remained unchanged.
‘Effectively, the statement has so far not cut through.
‘It may be that further down the line, once the changes come into effect and people feel the difference in their wallets, that it changes their minds.’
The election run-up comes with the Tories emerging from a merry-go-round of prime ministers and controversies after 13 years in power.
‘If the last 10 years in British politics have taught us anything, it’s that anything can happen,’ Mr Twyman said. ‘But for every day that this gap of double figures is maintained, and it’s coming up to two years that the Conservatives were ahead in any published opinion poll, it becomes more and more difficult to see Rishi Sunak staying in Downing Street.’
In a separate poll of the most popular politicians and political figures, there was more dismal reading for the Tories. Sir Keir stood at 13, with Mr Sunak lagging behind at 29 in the YouGov list.
The General Election is due to be called by the prime minister next year ahead of the December 17 cut off.
Do you have a story you would like to share? Contact josh.layton@metro.co.uk
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United Kingdom Business & Economics
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KPMG Expands Operations In Kolkata: Officials
This expansion reflects the firm's recognition of Kolkata's vibrant talent pool and its strategic importance to KPMG's growth strategy, the firm said.
KPMG LLP, a multinational audit, tax and advisory firm, has further expanded its presence in India with the opening of a new global delivery centre office in Kolkata.
The new office, equipped with state-of-the-art facilities and collaboration spaces, will accommodate a growing team of professionals, a statement said.
KPMG currently has over 250 professionals in Kolkata and has ambitious plans to double its workforce by FY'25, it added.
This expansion reflects the firm's recognition of Kolkata's vibrant talent pool and its strategic importance to KPMG's growth strategy, the firm said.
"The professionals in Kolkata are joining a team of individuals developing critical skills that support the audit today and the more data-driven audit we are driving towards," said KPMG U.S. national managing partner (audit operations) Tim Walsh.
Global delivery centres play a crucial role in KPMG's global audit strategy, providing audit and assurance support, audit technology, and risk management services to KPMG U.S., LLP., he said.
"Given the talent pool available in the city, Kolkata is vital to the growth strategy of KPMG as we plan to strengthen our service offerings and create aspirational job opportunities," said Partho Bandopadhyay, managing director, KPMG Global Delivery Center.
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Workforce / Labor
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Recentmay have you worried about your money.
Shares of PacWest, a small regional bank based in Los Angeles,after the company confirmed it may put itself up for sale. Anxiety over potential bank runs has sent shares of smaller banks tumbling. A bank run is when large numbers of people withdraw their money from a bank all at once.
Since March, three regional banks have failed — Silicon Valley Bank, Signature Bank and First Republic Bank. If the recent bank collapses have you worried about the safety of your money, here's what you need to know:
Is my money safe?
Yes, if your money is in a U.S. bank insured by the Federal Deposit Insurance Corp. and you have less than $250,000 there. If the bank fails, you'll get your money back.
Nearly all banks are FDIC insured. You can look for the FDIC logo at bank teller windows or on the entrance to your bank branch.
Credit unions are insured by the National Credit Union Administration.
If you have over $250,000 in individual accounts at one bank, which most people don't, the amount over $250,000 is considered uninsured and experts recommend that you move the remainder of your money to a different financial institution, said Caleb Silver, editor in chief of Investopedia, a financial media website.
If you have multiple individual accounts at the same bank, for example a savings account and certificate of deposit, those are added together and the total is insured up to $250,000. (Read on for more about how joint accounts are protected.)
Federal officials have been taking steps to make sure other banks aren't impacted.
"People who have their money in insured accounts have nothing to worry about," said Mark Hamrick, senior economic analyst at Bankrate.com. "Simply make sure that deposits fall within the guaranteed limits, whether it's FDIC or the credit union equivalent."
Customers of banks that have been sold will have access to their money from the new owner, according to the FDIC. For example, JPMorgan Chase acquired First Republic Bank when it failed earlier this week and customers are able to access all of their money from JPMorgan.
Are there red flags I should look for with my bank?
If you are worried about your bank closing in the near future, there are some things you can watch out for, according to Silver:
— If it is publicly listed, watch the stock price.
— Keep an eye on the quarterly and annual reports from your bank.
— Start a Google alert for your bank in case there are news stories about it.
You want to make sure you pay close attention to the way your bank is behaving, Silver said.
"If they're trying to raise money through a share offering or if they're trying to sell more stock, they might have trouble on their balance sheet," said Silver.
Public companies, including banks, do sell shares or issue new ones for various reasons, so context matters. First Republic did so this year when the hazards it faced were well known, and it kicked off an exodus of investors and depositors.
Should I look for alternatives?
If you have more than $250,000 in your bank, there are a few things you can do:
— Open a joint account
You can protect up to $500,000 by opening a joint account with someone else, such as your spouse, said Greg McBride, chief financial analyst at Bankrate.
"A married couple can easily protect a million dollars at the same bank by each having an individual account and together having a joint account," McBride said.
— Move to another financial institution
Moving your money to other financial institutions and having up to $250,000 in each account will ensure that your money is insured by the FDIC, McBride said.
— Do not withdraw cash
Do no withdraw cash
Despite the recent uncertainty, experts don't recommend withdrawing cash from your account. Keeping your money in financial institutions rather than in your home is safer, especially when the amount is insured.
"It's not a time to pull your money out of the bank," Silver said.
Even people with uninsured deposits usually get nearly all of their money back.
"It takes time, but generally all depositors — both insured and uninsured — get their money back," said Todd Phillips, a consultant and former attorney at the FDIC. "Uninsured depositors may have to wait some time, and may have to take haircut where they lose 10 to 15% of their savings, but it's never zero."
How long does it take for insured money to be available if a bank fails?
Historically, the FDIC says it has returned insured deposits within a few days of a bank closing. The FDIC will either provide that amount in a new account at another insured bank or issue a check.
How much money can be insured in joint accounts?
If you have a joint account, the FDIC covers each individual up to $250,000. You can have both joint and single accounts at the same bank and be insured for each.
So if a couple each has individual accounts and a joint account where they have equal withdrawal rights, they can each have up to $250,000 insured in their single accounts and up to $250,000 in their joint accounts. That means each of them will have up to $500,000 insured.
What about other investments?
Customers should take a close look at the types of investments they have in their bank to know how much of their assets are insured by the FDIC. The FDIC offers an Electronic Deposit Insurance Estimator, a tool to know how much of your money is insured per financial institution.
FDIC deposit insurance covers:
— Checking accounts
— Negotiable Order of Withdrawal (NOW) accounts
— Savings accounts
— Money Market Deposit Accounts (MMDAs)
— Certificates of Deposit (CDs)
— Cashier's checks
— Money orders
— Other official items issued by an insured bank
FDIC deposit insurance doesn't cover:
— Stock investments
— Bond investments
— Mutual funds
— Life insurance policies?
— Annuities
— Municipal securities
— Safe deposit boxes or their contents
— U.S. Treasury bills, bonds, or notes
— Crypto assets
How does a credit union compare to a bank?
Both credit unions and banks allow customers to open savings and checking accounts, among other financial products.
The key difference is that credit unions are not-for-profit institutions, which tends to translate into lower fees and lower balance requirements, while banks are for-profit. Sometimes it also means that it's easier for credit union customers to be approved for loans, McBride said.
Usually, customers are allowed to join credit unions based on where they live or work.
Credit unions serve a smaller number of customers, which also allows for a more personalized experience. The tradeoff is that banks tend to have larger staff, more physical branches and newer technology.
When it comes to the safety of customer's money, both banks and credit unions insure up to $250,000 per individual customer. While banks are insured by the FDIC, credit unions are insured by the NCUA.
"Whether at a bank or a credit union, your money is safe. There's no need to worry about the safety or access to your money," McBride said.
The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc.
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Banking & Finance
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A childcare organisation has called for an urgent package of support to help a sector which they say is in crisis.
Employers for Childcare says many childcare providers are planning to raise fees by about 10% from April.
The company works on behalf of parents, employers and childcare providers.
It says rising energy bills, food costs, wages and business rates have created a perfect storm for day-care facilities.
BBC News NI has seen a number of letters addressed to parents from different settings outlining their price rises for the new financial year.
The social enterprise says there needs to be immediate support, similar to schemes rolled out during the Covid-19 pandemic.
Aoife Hamilton of Employers for Childcare told BBC News NI her team was speaking to parents who were asking themselves very difficult questions.
"They're asking themselves: 'Can I actually afford to stay in work after I have paid for the childcare I need to make that possible?'," she said.
"Many parents are reducing their hours, they're looking at what alternative arrangements they can put in place, or they're being forced to leave the workplace.
"Not only is that bad for families, but that's bad for economy and society as a whole."
The fee increase is expected to vary depending on where people live in Northern Ireland and what type of setting they are using.
Ms Hamilton spoke about one family who has contacted them recently.
"The mum is going back to work after maternity leave. She's had twins and has an older child," she said.
"They've been quoted £125 a day for a nursery place. Her take-home pay is £110 a day.
"The sums are easy.
"It's not adding up for parents like that to remain in the workplace."
Ms Hamilton added financial help needed to come from both Stormont and Westminster.
"Some of the existing forms of financial support available for families are typically available across the UK and we think some of these schemes could be amended that would put additional funding and support into the pockets of families here in Northern Ireland to help them," she said.
There have been a number of delays to the development of a childcare strategy which has been promised for a number of years, most recently in the New Decade New Approach agreement.
"What we need is an executive in place so that decisions can be made and the funding released that actually puts promises into pounds and into providers pockets and into families," said Ms Hamilton.
In a statement, the Department of Education said affordability of childcare was a key factor being considered in the ongoing work to develop an early learning and childcare strategy.
"In the meantime, the department is working with others to ensure that parents are aware of the financial support already available to help with their childcare costs," a spokesperson said, citing the UK-wide Tax-Free Childcare Scheme and the production of an Employers Guide to Childcare.
"In parallel, the Department of Health, which has statutory responsibility for regulation and inspection of childcare services is considering the regulatory framework to determine whether any changes can be made to potentially reduce some of the pressures experienced by childcare providers," they added.
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Consumer & Retail
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US Slows Pace Of Increase In Quarterly Long-Term Debt Sales
The US Treasury increased its planned sales of longer-term securities by slightly less than most major dealers expected in its quarterly debt-issuance plan, in a move that signals officials may be concerned about the surge in yields over the past several months.
(Bloomberg) -- The US Treasury increased its planned sales of longer-term securities by slightly less than most major dealers expected in its quarterly debt-issuance plan, in a move that signals officials may be concerned about the surge in yields over the past several months.
The Treasury said it will sell $112 billion of longer-term securities at its so-called quarterly refunding auctions next week, which span 3-, 10- and 30-year Treasuries. Many major dealers had predicted a $114 billion number, which would have represented the same pace of increase in longer-term debt sales as the department had unveiled at the last refunding, in August.
Compared with August, the key difference this time was a slower pace of increases in sales of 10-year and 30-year securities, with 20-year bonds kept unchanged. Treasury officials said the shift was small, and some dealers expected an even bigger slowdown in longer-dated issuance. Even so, those securities rallied on the news, with 30-year yields down about 10 basis points at 4.99% at 9:53 a.m.
Yields have surged since the August announcement, with 10-year rates up more than 75 basis points since then. While Treasury Secretary Janet Yellen has rejected the idea that increased government borrowing caused the move, market participants highlight increasing concern about the widening US fiscal deficit.
The Treasury in its Wednesday release also specified that it now expects a single additional step up in quarterly issuance of longer-term debt.
“As these changes will make substantial progress towards aligning auction sizes with projected borrowing needs, Treasury anticipates that one additional quarter of increases to coupon auction sizes will likely be needed beyond the increases announced today,” the Treasury said in its release Wednesday.
In its guidance to officials, the Treasury Borrowing Advisory Committee — a panel of bond-market participants — said that there’s been some waning in appetite for US debt. TBAC noted there’s more liquidity and demand for securities maturing sooner than 10 years.
“Demand for US Treasuries may have softened among several traditional buyers,” TBAC said, highlighting the waning role of commercial and foreign central banks. “Treasury auctions continue to be consistently oversubscribed but there may be some early evidence of waning demand.”
TBAC also said, “There is a view among market participants that the growing imbalance between supply of and demand for US Treasury debt may also have contributed to the selloff.”
The Treasury made a “smart announcement and it does denote tacit consideration of term premium and absolute rate levels,” said Russ Certo, head of rates products at Brean Capital. “Treasury gave three subtle morsels to the market, including smaller overall increases versus median forecast and sort of affirmed our view of being almost at the ‘cap’ with one more quarterly increase likely and enthusiastically guiding about buybacks” coming next quarter.
The department said its plans “will continue to depend on a variety of factors, including the evolution of the fiscal outlook” and the pace and duration of the Federal Reserve’s shrinking of its portfolio of Treasuries. The Fed is letting up to $60 billion a month of its holdings mature without replacement, forcing the government to issue more to the public.
As for next week’s refunding auctions, they break down as follows:
- $48 billion of 3-year notes on Nov. 7, compared with $42 billion at the August refunding and $46 billion at the last auction in October
- $40 billion of 10-year notes on Nov. 8, compared with $38 billion last quarter
- $24 billion of 30-year bonds on Nov. 9, versus $23 billion
- The refunding will raise about $9.8 billion in new cash
The August refunding increase, to $103 billion, was the first in more than two years. Two-year notes, which are sold as new issues each month, were increased $2 billion in September and $2 billion in October as part of the guidance in August.
This time, the Treasury boosted planned issuance of 2-year, 3-year, 5-year, and 7-year securities by the same amount as in August, while 10-year and 30-year Treasury sales were bumped up by less. There is no change in planned sales of 20-year bonds.
“Treasury plans to continue with gradual nominal coupon and FRN auction size increases, but at a more moderate rate in longer-dated tenors,” the statement said. FRNs refers to floating-rate notes. “Treasury will continue to evaluate whether additional relative adjustments are appropriate when determining future changes in auction sizes.”
With regard to bills, which mature in one year or less, the Treasury said it “expects to maintain bill auction sizes at current levels into late-November.”
By early next month, “Treasury anticipates implementing modest reductions to short-dated bill auction sizes that will likely then be maintained through mid- to late-January.” That plan comes after the department said Monday that it expects more revenue this quarter than previously expected, thanks in part to an influx of deferred taxes from much of California and other states.
Read More: US Cuts Quarterly Borrowing Target to $776 Billion, Still Record
The share of bills in total government debt pile current is currently more than 20%, the cap that TBAC has long advised as most ideal. However, in August, TBAC indicated that exceeding the peak for a time before returning to the recommended range wouldn’t pose an issue.
For its Issuance plans for Treasury Inflation-Protected Securities, or TIPS, the department said it will maintain the November 10-year maturity reopening at $15 billion and increase its new issue sale in January by $1 billion. It also said it will lift its December reopening 5-year maturity by $1 billion.
As for floating-rate notes, the Treasury plans to increase the November and December reopening auction size of the 2-year FRN by $2 billion and the January new issue auction size by $2 billion.
The Treasury also detailed increases to nominal debt of other maturities over coming months as follows:
- 2- and 5-year note auctions will each be hoisted by $3 billion per month over the next three months
- Issuance of 3-year notes will rise again by $2 billion per month
- 7-year notes go up by $1 billion per month over the next three months
- No change for the new and reopened 20-year bond auction sizes
- Increases both the new and reopened 10-year note auction sizes by $2 billion, starting in November
- Boosts both the new and reopened 30-year bond auction sizes by $1 billion, starting in November
Separately, with regard to the buyback program that the Treasury has previously said will be launched sometime in calendar year 2024, the department said it “continues to make significant progress” on its plans. An update on timing will be offered at the next refunding, the Treasury said.
(Adds strategist comments and updates rates throughout.)
©2023 Bloomberg L.P.
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Bonds Trading & Speculation
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China Injects Most Short-Term Cash Into Banking System On Record
The People’s Bank of China granted banks a net 733 billion yuan of cash with the so-called reverse repurchase contracts on Friday.
(Bloomberg) -- China pumped the most liquidity into its financial system via short-term monetary tool on record, suggesting policymakers are keen to keep funding costs low to bolster the economy.
The People’s Bank of China granted lenders a net 733 billion yuan ($100 billion) of cash with the so-called reverse repurchase contracts on Friday. That came after data released this week flashed signs of a pickup in the economy last month, when consumer spending and industrial production came in stronger-than-expected.
The injection of extra cash into the economy will offer a much-needed boost to for China to maintain its growth momentum, which had been challenged by a lack of demand and a downturn in the property market this year. It will also provide lenders with sufficient funding, as central and local governments are set to sell more bonds to finance stimulus spending and as the tax payment season approaches.
“The large injection reflects the PBOC’s efforts in stabilizing the money market funding cost,” amid a increase in issuance of central and local government bonds, said Xing Zhaopeng, a senior strategist at Australia & New Zealand Banking Group.
Earlier this week, the PBOC made the largest liquidity injection since late 2020 with one-year policy loans via the so-called medium-term lending facility. Throughout this year, China has reduced the interest rate on MLF rate twice and cut the the amount of cash lenders need to set aside as reserves multiple times.
Also on Friday, Chinese lenders kept the one-year loan prime rate steady at 3.45% while also leaving the five-year rate — a reference for mortgages — unchanged at 4.2%, according to data from the PBOC. Most economists polled by Bloomberg had forecast no change for either rate, given the central bank refrained from reducing costs of the MLF.
Beijing is considering a new round of stimulus to help the economy meet the official annual growth target of around 5%. The Ministry of Finance sold 1.2 trillion yuan of central government bonds in September, 60% higher than the average for the same period in the past three years, draining cash from the system.
“With the positive surprise in third-quarter gross domestic product and better September data, the need to step up easing measures has reduced somewhat,” said Michelle Lam, an economist at Societe Generale SA. The PBOC will likely reduce policy rates by 10 basis points and also slash lenders’ reserve-requirement ratio by year-end, she added.
The country’s property crisis has remained an overhang for the economy. The PBOC has indicated that more monetary easing is still on the cards if necessary. Its head of monetary policy recently reassured investors that Beijing still has room to deal with “unexpected challenges and changes.”
The LPRs are based on the interest rates that 18 banks offer their best customers, and are published by the PBOC monthly. They are quoted as a spread over the MLF rate.
(Updates throughout.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Banking & Finance
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DoorDash has added a pop-up in its app this week warning customers that orders with no tip might take longer to get delivered. Upon seeing the prompt in a since-deleted tweet on X, formerly Twitter, The Verge confirmed that if you enter $0 in the tip amount in the DoorDash app while placing an order, an alert appears with the below warning, prompting you to add a tip or continue without a tip:
Orders with no tip might take longer to get delivered — are you sure you want to continue? Dashers can pick and choose which orders they want to do. Orders that take longer to be accepted by Dashers tend to result in slower delivery.
The move appears to be an effort by DoorDash to show customers that drivers are likely going to prioritize more profitable work. If they don’t see a tip, they may choose not to take the job. It appears the prompt is not yet live in every locale; one Verge colleague in New Jersey got it, while another in South Carolina didn’t. (Neither proceeded to place an order without a tip, however!)
While tipping isn’t something anyone who lives in America should be surprised about doing (or should ever consider not doing without a really good reason), pre-tipping is a relatively new concept in our gig economy.
It’s entirely plausible you might be planning to tip your DoorDasher with cash or intend to bestow a giant tip on the driver when they arrive promptly and with piping hot food or perfectly packed groceries, something you can still do in the DoorDash app post-delivery.
The driver preference for pre-tipped orders may be linked to DoorDash’s somewhat convoluted courier payment method, which was reworked following revelations that DoorDash was not giving drivers the full amount of customer tips.
In 2019, DoorDash restructured its payments to drop the controversial “tipped wage” method and pay a base rate with 100 percent of tips going to drivers. The knock-on effect of this, however, makes orders without tips less appealing to drivers.
According to The New York Times, the way DoorDash’s payment structure previously worked was that if a driver got a guaranteed base rate of $6.85 for an order, but the customer tipped $3, the driver would still get $6.85. Now, it seems that an order without a tip will show at that base rate, which DoorDash says ranges from $2 to $10 “depending on the estimated time, distance, and desirability of the order.”
The difference is that the driver gets to keep all of any tip given, but without knowing they are getting one, you can see why they’d pick a $6 order (where the customer included a $4 tip) over a $2 order and the hope that the customer plans to tip.
A person claiming to be a former DoorDash driver posted on X that he often passed up offers where no tip was included, as those with tips had more of a guarantee for his time. “If you want to wait an extra 1-2 hours to get your food, then don’t add an extra dollar or two,” is his advice.
We’ve reached out to DoorDash and will update this story when we hear back.
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Consumer & Retail
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A black-market trade in delivery app accounts allows underage teenagers to sign up as riders, the BBC has found.
The family of a 17-year-old who died while working as a Deliveroo rider - despite 18 being the minimum age - say the company is "unaccountable".
The Home Office is urging Deliveroo, Just Eat and Uber Eats to reform policies that let riders lend accounts to others, known as "substitution".
Deliveroo says it has high standards and "robust criteria" for drivers.
The BBC's investigation found substitution fuels an online trade in accounts, including potentially to children.
Riders who sign up to work for the big food delivery apps have to pass background checks. They must verify their age, that they have no convictions and that they are allowed to work in the UK.
But once verified, a rider is permitted to lend their account to another person to work instead of them.
It is the duty of the original account holder - not the app they work for - to check that their "substitute" meets the legal criteria to work.
The system appears open to abuse.
'He just wanted to earn money'
Leo was just 15 when he first rented his Deliveroo account from a man in the town where he lived.
Two years later Leo was killed on a borrowed motorbike - he was only 17 but still working for the app. The minimum age to work for the company is 18.
"Leo wanted to be a millionaire. Whatever it took, he just wanted to earn money and hustle," says Leo's stepfather Patrick.
His family have decided to speak out because they feel so strongly, but have asked to withhold their surname as they are worried about a backlash from riders in their local area who use illegal accounts.
Leo's mother Preta says on the surface the work was really appealing for a teenager. "They make a lot of money and they don't want to stop. £100 or £200 a day - it's a lot of money".
Patrick says: "No-one's accountable, they just take the money. It's not right."
Deliveroo has not contacted the family, he says.
"Well they wouldn't would they? They wouldn't even know he existed."
The company told us that if a rider was found to be ineligible to work for the app "we will stop working with them with immediate effect".
'Age does not matter'
As part of our investigation, the BBC found social media account holders selling or renting accounts for the three main delivery apps.
We set up a fake social media profile, using an image of a 16-year-old boy generated by AI, and messaged the sellers.
When we told one seller offering Deliveroo accounts that he was speaking to a 16-year-old, he replied: "I want to help you, age does not matter."
Another said he would rent us his Uber Eats account for £70 per week, adding: "They don't check age, it's more like you are using my account."
Just Eat accounts were also available, this seller told us - "no one checks anything".
The company has the largest share of the UK market followed by Uber Eats and Deliveroo.
The government says it is unhappy with the situation and has called in the three big delivery apps for a round table meeting on Tuesday.
Home Office Minister Robert Jenrick told us: "This is not a victimless activity, we've seen a young person die when he was doing a job that he shouldn't have been doing."
Mr Jenrick said the policy of substitution was "perpetuating and enabling illegal working in our country".
And he called for it to be reformed so that any "substitute rider" would also be verified by the apps, not by the owner of the account.
The Home Office has been carrying out checks on riders and says, so far this year, 381 across the UK who do not have the right to work in the country have been arrested.
'High standards'
Deliveroo said: "We take our responsibilities extremely seriously and we continue to work in close collaboration with the relevant authorities to support their efforts in this area."
Just Eat released a statement saying: "We have high standards and a robust criteria in place for couriers.
"Self-employed independent couriers have the legal right to use a substitute.
"Legally the courier account-holder is responsible for ensuring their substitute meets the necessary standards to deliver on our network."
And Uber Eats said all couriers "must pass a criminal background check, be over the age of 18 and hold a valid right to work in the UK".
It added: "We understand that there are concerns around this issue, and we are working closely with the government and want to find a solution."
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Workforce / Labor
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Stock Market Today: All You Need To Know Going Into Trade On Nov. 29
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
U.S. stocks and bonds extended their November gains, and the dollar fell, with the latest Fedspeak bolstering speculation that U.S. policymakers will have more room to cut interest rates next year, Bloomberg reported.
The S&P 500 Index and Nasdaq 100 rose by 0.12% and 0.14%, respectively, as of 1:10 p.m. New York time. The Dow Jones Industrial Average rose by 0.23%.
Brent crude was trading 2.58% higher at $82.04 a barrel. Gold was higher by 1.32% at $2,040.70 an ounce.
India's benchmark stock indices closed higher after trading mostly mixed throughout the day on Tuesday.
The metal and energy sectors gained, while the information technology sector recovered. Healthcare stocks were under pressure.
The S&P BSE Sensex rose 204.16 points, or 0.31%, to close at 66,174.20, while the NSE Nifty 50 gained 95 points, or 0.48%, to end at 19,889.70.
Overseas investors stayed net buyers for the third consecutive session on Tuesday. Foreign portfolio investors bought stocks worth Rs 783.8 crore, while domestic institutional investors continued as buyers and purchased stocks worth Rs 1,325 crore, the NSE data showed.
The Indian rupee strengthened about 4 paise to close at 83.34 against the U.S. dollar on Tuesday.
Stocks To Watch
PCBL: The board has approved the acquisition of Aquapharm Chemicals for Rs 3,800 crore.
Tata Power: Unit Tata Power Renewable Energy secured a Letter of Award for the development of a 200 MW firm and dispatchable renewable energy project with SJVN.
Canara Bank: The RBI has cleared the lender's plans to divest a 70% stake in its subsidiary, Canbank Factors. The lender has also proposed to buy out the stakes of Bank of Baroda and DBS Bank India in its unlisted subsidiary, Canbank Computer Services.
Aster DM Healthcare: The company plans to separate its India and Gulf businesses in a transaction worth $1 billion. The Moopen family-owned healthcare company's subsidiary, Affinity Holdings, will transfer its shares in Aster DM Healthcare FZC—the Gulf unit—to promoter-owned Alpha GCC Holdings. After the deal, Alpha GCC Holdings will be jointly owned by Aster India and Fajr Capital Advisors in a 35:65 ratio.
Tube Investment of India: The government has approved the scheme of amalgamation of Cellestial E-Mobility and Cellestial E-Trac with Tl Clean Mobility.
Wipro: The technology services and consulting company announced the launch of their 'Continuous Compliance Solution' built on Amazon Security Lake in collaboration with Amazon Web Services.
Havells: The company has launched ‘Lloyd’, its leading consumer durable brand in the Middle East market.
Varun Beverages: The company has incorporated a subsidiary company in Mozambique, i.e., VBL Mozambique, SA, to carry on the business of distribution of beverages.
Bharat Heavy Electricals: The company has signed a Memorandum of Cooperation with a French state-owned company, Electricité de France S.A., France, to explore the opportunity to maximise the local content of the Jaitapur nuclear power project to be established by NPCIL in India. The Ministry of Defence inked a contract with BHEL to procure 16 upgraded Super Rapid Gun Mounts and accessories worth Rs 2,956.89 crore for the Indian Navy.
Zomato: Alibaba Group unit Alipay Singapore plans to sell up to 29.6 crore shares in block deals, according to Bloomberg.
R Systems International: The board of unit Velotio Technologies has approved the acquisition of an additional 60% equity share of Scaleworx Technologies. Post-acquisition, Scaleworx will become a wholly owned subsidiary of Velotio.
Trident: CFO Avneesh Barua resigned on Nov. 28.
IG Petrochemicals: The company has decided to file an appeal against an income tax demand amounting to Rs 46.26 crore with the Karnataka High Court.
Gail: The Government of India appointed Rajeev Kumar Singhal as Executive Director with effect from the date of his assumption of charge of the post till the date of his superannuation, i.e., Feb. 29, 2028.
ICICI Lombard General Insurance: MD and CEO Bhargav Dasgupta has sold 2.5 lakh equity shares in tranches, and the last transaction was undertaken by him on Nov. 28.
Global Health: Sanjeev Kumar has resigned as chief financial officer and key managerial personnel w.e.f. Nov. 28.
Yathart Hospital and Trauma: The company received an order from the Commissionerate of Sagar Sambhag, Madhya Pradesh, to take over the premises of the hospital, as the land as stated in the said order belongs to the Government of Madhya Pradesh.
Timex Group: Sylvain Ernest Louis Tatu has resigned as Non-Executive Director w.e.f. Nov. 27 due to personal reasons.
PDS: The board has appointed Sandra Campos as an additional woman independent director for a period of two years, w.e.f. Nov. 28.
Siemens India: The company reported a 24.7% rise in revenue year-on-year to Rs 5,808 crore and a 12.4% decline in net profit at Rs 571.6 crore in the fourth quarter. It announced an investment of Rs 416 crore in capacity addition for power transformers and vacuum interrupters.
New Listing
IREDA: The company's shares will debut on the stock exchanges on Wednesday at an issue price of Rs 32 per share. The Rs 2150 crore IPO was subscribed to 38.80 times on its third and final day. The bids were led by institutional investors (104.57 times), non-institutional investors (24.16 times), a portion reserved for employees (9.8 times), and retail investors (7.73 times).
Bulk Deals
Avantel: Kantheti sold 5.3 lakh shares (0.65%) at Rs 130.88 apiece.
Orchid Pharma: Dhanuka Laboratories sold 13 lakh shares (3.18%) at Rs 571 apiece. UTI Mutual Fund bought 4.45 lakh shares (1.09%) at 571 apiece.
Insider Trades
NRB Bearings: Promoter Harshbeena Zaveri bought 19,100 shares between Nov. 21 and 24.
Bajaj Electricals: Promoter group Niraj Holdings bought 4.7 lakh shares on Nov. 23. Promoter Group Rajivnayan Bajaj A/c Rishab Family Trust sold 4.7 lakh shares on Nov. 23.
Hercules Hoist: Promoter group Niraj Holdings bought 2,928 shares on Nov. 23. Promoter Group Rajivnayan Bajaj sold 2,928 shares on Nov. 23.
JK Cement: Promoter Kalpana Singhania sold 75,250 shares between Nov. 21 and 23.
Mukand: Promoter group Niraj Holdings bought 1.43 lakh shares on Nov. 23. Promoter Rajivnayan Bajaj sold 1.43 lakh shares on Nov. 23.
Advanced Enzyme: Promoter group Advanced Vital Enzymes bought 31,802 shares between Nov. 23 and 24.
Pledge Share Details
GO Fashion: Promoter Gautam Saraogi revoked a pledge of seven lakh shares on Nov. 24.
AGMs Today
Updater Services.
Who’s Meeting Whom
Mahindra Holidays & Resorts India: To meet investors and analysts on Dec. 18.
Escorts Kubota: To meet investors and analysts on Dec. 4.
Container Corporation of India: To meet investors and analysts on Dec. 4 and 5.
IKIO Lighting: To meet investors and analysts on Dec. 4.
Symphony: To meet investor and analysts on Dec. 1.
VRL Logistics: To meet investors and analysts on Nov. 29.
Dr Reddy’s: To meet investors and analysts on Dec. 4 and 5.
Kfin Technologies: To meet investors and analysts on Nov. 30.
Aether Industries: To meet investors and analysts on Dec. 4.
Supriya Lifescience: To meet investors and analysts on Dec. 4.
Brigade Enterprise: To meet investors and analysts on Dec. 4, 5 and 6.
ICICI Bank: To meet investors and analysts on Dec. 1.
TIPS Industries: To meet investors and analysts on Dec. 1.
Voltas: To meet investors and analysts on Dec. 4, 12,13 and 18.
Gati: To meet investors and analysts on Nov. 30, Dec. 4,5.
Anupam Rasayan: To meet investors and analysts on Dec. 5.
Parag Milk Foods: To meet investors and analysts on Nov. 29.
Punjab National Bank: To meet investors and analysts on Dec. 1.
M M Forgings: To meet investors and analysts on Dec 4.
Globus Spirits: To meet investors and analysts on Dec. 1.
Chemcon Speciality Chemicals: To meet investors and analysts on Dec. 4.
Ideaforge Technology: To meet investors and analysts on Dec. 1.
Lemontree Hotels: To meet investors and analysts on Dec. 1.
Tata Steel: To meet investors and analysts on Dec. 1.
Axis Bank: To meet investors and analysts on Dec. 4, 5.
NBCC: To meet investors and analysts on Nov. 30.
Trading Tweaks
Price band revised from 20% to 10%: The New India Assurance Company
Price band revised from 10% to 5%: Talbros Automotive Components
Move into a short-term ASM framework: Man Infra, Sequent Scientific.
Move out of a short-term ASM framework: Wockhardt
F&O Cues
Nifty November futures rose 0.55% to 19,936.70 at a premium of 40 points.
Nifty November futures open interest fell by 18.21% to 36,418 shares.
Nifty Bank November futures rose by 0.41% to 43,984.30 at a premium of 103.35 points.
Nifty Bank November futures open interest fell by 11.90 to 15,319 shares.
Nifty Options Nov 30 Expiry: Maximum call open interest at 20000 and maximum put open interest at 19,800.
Bank Nifty Options Nov 30 Expiry: Maximum Call Open Interest at 44000 and Maximum put open interest at 42000.
Securities in the ban period: Balrampur Chini, Bharat Electricals, Granules, Indiabulls Housing Finance.
Money Market Update
The Indian rupee strengthened by about 4 paise to close at 83.34 against the U.S. dollar on Tuesday.
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Stocks Trading & Speculation
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One of the largest childcare providers in Glasgow is closing, leaving families scrambling to find nursery and afterschool places for their children.
Rising Stars childcare centres will shut permanently on 31 March.
The move affects facilities in Easterhouse, Crownpoint, Gorbals and Pollok as well as a Govan and Calton afterschool care centres.
A spokeswoman for Jobs and Business Glasgow (JBG), which runs the centres, said they were not viable to continue.
JBG, a charity organisation, has been unable to find a buyer for the facilities.
Among those hit by the move are Cara McDermott's sons, who are aged one and four. They both attend Rising Stars nursery on Crownpoint Road.
She first heard the nursery was closing from a parent who posted on Facebook, and asked staff who confirmed the news. She then received an email from JBG.
"We have been lucky in the sense that a new nursery is opening in the area and we can send our boys there," Mrs McDermott said.
"However, it is more expensive and we are definitely anxious about being able to afford such a price hike during the current cost of living crisis.
"My eldest son should be starting school in August so the timing of the nurseries closing is extremely unfortunate, we feel let down by JBG.
"He is awaiting a referral for possible additional needs and we as parents already know how much this change is going to affect him."
She added that parents should have been made aware ahead of the information being leaked and said it had been "extremely challenging" to find childcare at short notice.
Parents were told about the closure in a letter, which was sent via email on 14 February.
It said that the childcare service was first established in the 1990s by the former East End Partnership and Govan Initiative, but the funding that allowed services to be subsidised no longer existed.
The nurseries had performed at a loss for some time, with those losses having been met from JBG's charitable reserves.
JBG said it had to consider "the appropriateness" of the charity operating so commercially.
The letter, written by Gary Hay, JBG managing director, said the organisation would be working closely with Glasgow City Council education services to support childcare needs.
Anna Kumar's three-year-old daughter, Maya, goes to the same nursery and said she heard about the closure through teachers, before receiving an email.
She said: "The closing down of the nurseries has a really huge impact, especially on our family.
"Me and my husband have already cut down our hours so that we can take care of Maya and we are struggling with childcare issues because we are still trying to work from home and manage her schedule.
"We've also exhausted all of our holidays for the year and we are hoping that we get a nursery replacement soon enough."
The family have contacted Glasgow Family Information Services (GFIS) for help finding a nursery nearby.
A spokeswoman for JBG said: "We apologise for any inconveniences we know the closure of the service will have on families.
"The business case review has been taking place for some time now and a search for a private childcare provider to take over the brand and estate has been unsuccessful in the current climate.
"It is unfortunately not viable to keep operating as a going concern."
She added: "We are working with Glasgow City Council early years colleagues to support our families to help find alternative provision across the city.
"No employee will be facing compulsory redundancy and we will work with colleagues to find suitable alternative roles."
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Nonprofit, Charities, & Fundraising
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Indicted freshman congressman and serial fabulist George Santos is the only member of Congress who has not yet filed his mandatory personal financial disclosure, a CREW analysis of filings provided by the Clerk of the House of Representatives has found. The document’s absence is especially notable a month after the final deadline blew by—and a week after the only other remaining House holdout filed—because many of Santos’s growing legal problems are centered on his self-mythologizing about his own finances.
Santos’s failure to file not only demonstrates a lack of respect for rules that exist to provide the public with information that can be used to identify serious conflicts of interest, but it also further obscures Santos’s personal finances, which are at the center of a 13-count indictment from May, alleging that Santos cheated donors, stole from his campaign and lied to Congress on previous financial disclosures he filed as a candidate. This month Santos’s treasurer pleaded guilty to helping further his illegal schemes—including a $500,000 loan Santos himself claimed to have given to his campaign when he only had less than $8,000 in the bank—and Santos was hit this week with a 23-count superseding indictment which included accusations of pocketing campaign donors’ money.
There are significant possible penalties for knowingly failing to file an annual financial disclosure. Aside from a $200 late fee, the instructions members are given to file their annual financial reports notes that “the Attorney General may pursue either civil or criminal penalties against an individual who knowingly and willfully falsifies…or fails to file” the financial filings that are required under the Ethics in Government Act. The maximum civil and criminal penalty in such cases is $71,316, according to the document.
Santos himself has acknowledged that his report hasn’t been filed, telling the AP last month that he would “rather be late, accurate, and pay the fine than be on time, inaccurate, and suffer the consequences of a rushed job.” However, far from rushing at this point, the filings were originally due in May, and Santos never filed to request an extension. Meanwhile, his fellow House members, some of whom have vastly complicated personal finances and net worths climbing into the hundreds of millions of dollars, have all managed to file the form detailing their assets, liabilities and transactions on time. For example, Rep. Darrell Issa—who has a net worth of around $460 million—filed his financial disclosure in July.
Other members facing significant legal trouble have also managed to file. Former Rep Jeff Fortenberry (R-NE) resigned from Congress in March of 2022, after being convicted of making false statements to the FBI and concealing information about his campaign donations. Four months later, Fortenberry still managed to file his termination report with the House Committee on Ethics.
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Personal Finance & Financial Education
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- The IRS on Tuesday unveiled more details about Direct File, the agency's free electronic tax filing pilot program.
- Starting in 2024, Arizona, California, Massachusetts and New York will integrate state tax filings into the pilot program.
- Taxpayers from Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming may also be eligible.
- The pilot program will initially focus on "relatively simple returns" and not all filers from these states will qualify.
The IRS on Tuesday unveiled more details about its direct filing pilot program launching for the 2024 tax season.
Known as Direct File, the pilot will allow certain taxpayers to electronically file federal tax returns for free directly through the IRS, the agency told reporters on a press call.
Starting in 2024, Arizona, California, Massachusetts and New York will integrate state tax filings into the pilot program. Taxpayers from Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming may also be eligible.
An IRS official estimates "at least several hundred thousand taxpayers across the country" will have the option to participate in the 2024 pilot program.
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"In this limited pilot for 2024, we will be working closely with the states that have agreed to participate in an important test run of the state integration," IRS Commissioner Danny Werfel said. "This will help us gather important information about the future direction of the Direct File program."
After filing federal returns through Direct File, the software will direct taxpayers to state-sponsored tools to complete separate state filings. For 2024, this integration will only include participating states.
"To ensure a good experience for taxpayers, the pilot will launch in phases," Laurel Blatchford, chief implementation officer for the Inflation Reduction Act at the U.S. Department of the Treasury said.
For 2024, the pilot will focus on individual filers with "relatively simple returns," but not all taxpayers will qualify. The IRS expects the program to include Form W-2 earnings, Social Security income, unemployment income and interest of $1,500 or less.
The agency also plans to include filers claiming the earned income tax credit, child tax credit and credit for other dependents, along with the standard deduction, student loan interest deduction and tax break for educator expenses.
However, some taxpayers will be excluded during the first year of the pilot, Werfel said.
Self-employed or contract workers filing Form Schedule C, which shows business profits or losses, won't be eligible, along with filers claiming the premium tax credit to reduce the cost of health insurance purchased through the health insurance marketplace.
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Personal Finance & Financial Education
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- A new report from Politico suggests a “billionaire-backed network” of Silicon Valley-linked AI “advisors” are working to control the regulatory agenda in Washington D.C. Boy, I sure wish stuff like that were illegal instead of just business-as-usual.
- Despite apparently having lobbying money aplenty, it looks like the AI industry is still struggling to monetize some of its platforms. The Wall Street Journal reports that some major AI platforms, like Microsoft’s Github Copilot, have been hemorrhaging money.
- Last but not least: A newly introduced draft bill would institute protections for musical artists against AI. We spoke with a music industry executive about what the policy could mean for his business.
One of the ongoing problems connected to the AI industry is just how much power it takes to run its systems. The pursuit of enough juice to run the high-octane algorithms behind apps like Bard, Bing, and ChatGPT is causing concern even among AI’s biggest proponents. Now, a new study shows the electrical resources needed for the growing AI industry could make its environmental impact even worse than previously thought.
The study, authored by Alex de Vries, who is a PhD candidate at the VU Amsterdam School of Business and Economics, claims that the AI industry’s energy needs may soon match those of a small country. “Given the expected production in the coming few years, by 2027 newly manufactured AI devices will be responsible for as much electricity consumption as my home country, the Netherlands,” de Vries told Insider this week. “This is also in the same range as the electricity consumption of countries like Sweden or Argentina.”
While the rate of electricity consumption in the tech industry has remained relatively steady for years, de Vries says that the advent of the AI chatbot wars between tech giants like Microsoft, Google, and OpenAI, may have spawned a new era. De Vries’ study looks specifically at the electricity consumption of the AI sector as it applies to something called the “inference phase” of AI production. While most environmental impact studies have so far focused on the amount of energy it takes to train large language models like GPT-4, less attention has been paid to “inferencing,” which is the process by which language models produce new information as the result of prompts. This phase of energy consumption can be massive and, sometimes, accounts for a majority of energy expended during the AI life cycle, de Vries writes. Due to the potential ballooning nature of AI energy needs over the next several years, the scholar argues that developers “focus [not only] on optimizing AI, but also to critically consider the necessity of using AI in the first place.”
De Vries’ study, like a number of other prominent environmental impact studies that have been published recently, begs the question: in an age of climate change and accelerating environmental distress, can generative AI really be justified? I mean, do we really need ChatGPT, automated email-writing, and AI stickers? Or are we killing the environment needlessly for too little in trade off?
At best, these platforms offer increased convenience for consumers and some cost savings for corporations, but—for now—that’s about it. Much of the mystification around AI has helped hide the fact that generative AI technologies aren’t—in many cases—particularly revolutionary and, in some cases, aren’t even new. Sure, there are some novel scientific applications of AI that, once refined, could have a major impact. But it would be hard to argue that those applications are the ones getting the lion’s share of attention or resources. Mostly, it’s stuff like ChatGPT that hogs the spotlight (and venture capital).
When viewed through the lens of the technology’s massive environmental impact, it seems hard to justify what is little more than an over-hyped form of content automation. Better deepfakes aren’t worth killing the planet over.
This week we spoke with Mitch Glazier, the Chairman and CEO of the Recording Industry Association of America, which lobbies on behalf of the music industry. RIAA is supporting a newly introduced piece of legislation that seeks to institute legal protections against the use of AI to replicate the visual or audio likenesses of artists. In recent months, there’s been an explosion of AI “deepfake” content that blatantly rips off well-known musicians and celebrities. The Nurture Originals, Foster Art, and Keep Entertainment Safe (NO FAKES) Act, which is currently a discussion draft bill, would enshrine a number of legal protections for artists who don’t want their visual or audio likenesses used in unauthorized deepfakes. This interview has been edited for brevity and clarity.
What role did RIAA have in connection to this bill and what do you hope this bill achieves?
We were one of several groups that were asked to give input so that they could develop the bill. SAG-AFTRA was also heavily involved. The idea was to create federal legislation because all of the protections for name, image, likeness and voice are in the states right now—and they’re all different.
What is it about AI that makes it a threat to your industry (the music business)? What’s the problem with this technology?
The problem really isn’t the technology. AI can be licensed for a variety of great purposes and uses. The problem is when AI is made based on a particular artist’s voice or image without consent, credit, and compensation. Basically, what the bill says is, ‘The technology’s great and if an artist wants to license the use of their essence—their voice, their likeness—that’s they’re choice. But what you can’t do is clone their voice without their permission.’ It’s just a basic right that exists for all other types of property—and that should exist here. It should be up to the artist to decide whether or not they want to allow you to use their image or their voice.
So it seems like this legislation actually opens the door for more AI music but the idea is that, if a particular artist is involved in an AI or a deepfake production, they would have to get credit and, presumably, get paid, right?
Well, the bill says “authorized,” so the artist would have to authorize it. If they want to negotiate compensation they can. Some may not want to. But the key is that “authorization” part. The author has to say, “Yes, you can use my voice, my image.” If they don’t say yes, you can’t do it.
What are your hopes for the passage of the bill? It seems like there are some pretty prominent Senators supporting it.
We’re very optimistic. This issue goes beyond the music and entertainment industry and it goes beyond the issue of art. It relates to every individual’s right to control their own essence, for lack of a better term. We’ve been encouraged by great bipartisan support right off the bat. To get two Democrats and two Republicans—including the chairman of the Intellectual Property Subcommittee (Amy Klobuchar D-Minnesota)—to put out this discussion draft and to do it in a way in which they’re inviting people to respond and come into the conversation, is a great sign.
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Energy & Natural Resources
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A month before veg started disappearing from British supermarket shelves, Steve Cornwell walked into a greenhouse in Morocco and realised we faced an unprecedented crisis.
The farmer, whose business supplies salad to chains like Aldi, Asda and the Cooperative, was visiting a site where tomatoes are normally ripe and ready for picking in January.
“I was gobsmacked,” says Steve, owner of MCJSC Produce in Waltham Abbey, Essex.
“Everything was green. Any other year you’d see it full of coloured fruit. You can’t harvest green tomatoes. You pick them when they’re breaking colour and I could see they were weeks away from that. I knew we had a big problem.”
It was the same all over Southern Europe, where during the winter Steve and wife Morna source supplies of everything from cucumbers to peppers.
But this year an unseasonal hot spell then an even more unusual cold spell has thrown production into chaos. He says: “Normally, you can trust the temperatures in Spain, Greece, Crete and Morocco. Between 12C and 15C at night and in the 20Cs in the day. But when I was there they were as low as 4C overnight. Most crops were not colouring up.
“Unusually warm weather from October to December meant crops matured quicker and had to be harvested earlier. So a lot of the winter crop had already gone by the time the temperature dropped, then we went from one extreme to the other.
“In Spain it had even snowed and they had lost crop. The temperature is so low in Morocco the bees supposed to pollinate the tomato plants aren’t coming out of their boxes. In 50 years in the business it was the worst I’d ever known it.”
Steve says he tried to warn the supermarkets they would need to be prepared to pay more for produce or face shortages – but claims they refused to listen, adding: “I think they thought it was never going to happen.”
He says stores are now calling him, desperate to fill empty shelves. “One supermarket rang this morning asking for round tomatoes and offering the price that last month they said they couldn’t pay. If they had listened then, there wouldn’t be empty shelves. That delay meant the product went to European supermarkets instead.”
Yesterday, Lidl became the latest supermarket to limit sales of certain fruit and veg, like tomatoes, peppers and cucumbers.
Aldi and Tesco are limiting items to three per customer, while Morrisons is letting shoppers buy two each. Failing to tackle the crisis, Environment Secretary Therese Coffey was ridiculed last week after suggesting people should “cherish” turnips – which are not even in season now.
Steve and Morna know more than anyone about what is causing the shortages – as well as growing some of their own produce, they import from Europe to fulfil their contracts.
In normal years, their packing house works 12 hours a day, sending out 36,000 packs of cherry tomatoes alone. But this week their 40 staff are only working four hours a day due to the lack of produce arriving.
Morna says: “Last year there was a brief shortage of round tomatoes but this year it’s all the tomatoes, iceberg lettuce, cucumbers, peppers, all the salad lines.”
And it’s not just due to the bad weather. Morna explains: “It’s compounded by all sorts of issues. In Europe, supermarkets set prices weekly, so if the market is short they’ll pay the higher prices.
But British supermarkets still insist on setting a price for the whole season and then are reluctant to increase them, so they end up missing out on the produce.”
Morna says Brexit has also fuelled the crisis. “Transport companies don’t want to come to the UK because of all the paperwork and logistics, the visas they need for all their drivers.
On top of that, our growers in Morocco have to pay a 3.5% duty on imports to the UK, which in July will rise to 5.7%. Yet to send their produce to the EU in the winter they don’t pay any duty.”
The biggest threat to growers like Steve and Morna, though, has been the huge hikes in energy prices. The cost of keeping gas boilers going to heat their four cucumber nurseries has risen threefold since last year.
It meant that this year, they planted a month later to save costs – and as a result there is still no sign of cucumbers on their plants.
Simon says: “We used to plant the second week in January, it was a gamble we could take as the energy costs were kinder. But this year we couldn’t risk it. Everything has gone up, transport costs, diesel, packaging. It’s just become untenable unless you get increases in your values.”
Others, however, have been hit even harder. In the Lea Valley, once known as the UK’s cucumber capital, 20 of the 80 growers in the association have shut completely. Among them are two brothers who until last year supplied cucumbers to Steve and Morna.
The brothers, who do not want to be named, knew they would not last when oil and electricity prices soared.
One says: “This time of year you have to put 20,000 litres of oil in the heaters. And prices got so high that meant £20,000 a week in oil alone. Electricity has also risen four times what it was. We didn’t know if supermarkets would pay a much higher price, so it just wasn’t worth the risk.
“It’s depressing, after all these years knowing we can’t make a living here.
“I’ve been doing this since 1977, I’ve gone from doing something to not knowing what I’m going to do.”
Steve warns we risk sleepwalking into a food supply catastrophe if the Government fails to support farmers.
He says: “We don’t feel growers get enough support. In fact, I don’t think the Government thinks about the industry at all, until times like this when the horse has already bolted.
“Like the supermarkets, they think these problems will go away. But they won’t, it will get worse. In European countries, governments support their food growers, they provide subsidies, help with energy bills. They treat it like a serious industry. That’s what we want from our Government.”
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Consumer & Retail
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A service that provides transport to elderly and disabled passengers in rural parts of Northern Ireland is at risk of closure.
The dial-a-lift service makes about 200,000 journeys annually, taking vulnerable passengers to healthcare appointments and food shopping.
It has previously received annual government funding of £2.2m each year.
But funding from the Department for Infrastructure (DfI) is due to run out at the end of April.
A spokesperson for DfI said they recognised the importance of the service but that "extremely difficult decisions" had to be taken while a budget for 2023/24 had not been confirmed.
In the absence of a Northern Ireland Executive there has yet to be an agreement on the next Stormont budget.
'Devastating'
Eleven organisations across Northern Ireland deliver the dial-a-lift service through Rural Community Transport Partnerships.
The Community Transport Association (CTA) is a national charity that supports the organisations.
Its director, Noeleen Lynch, said the situation was "devastating" for everyone who relied on the service.
"If we lose this service it will cause severe and irreversible damage to disabled people, who live in rural areas with no public transport nearby.
"Elderly and disabled people rely on this service for medical appointments and basic food shops, so you're talking about an impact on peoples' lives and livelihoods should funding be reduced or discontinued."
Ms Lynch said that although funding was guaranteed until the end of April, without news of further funding by the end of March community transport organisations would have to make tough decisions.
"In that situation unfortunately, some community transport organisations may be forced to begin winding up," she said.
"This will have a devastating impact on vulnerable people in rural communities."
The Department for Infrastructure said it understood the impact it would have on the workforce and users if funding for this scheme was to stop.
A spokesperson added: "To minimise uncertainty and operational difficulties, a funding commitment has been given to community transport providers for April 2023. Further decisions for the remainder of the year will be subject to the budget outcome."
About 40% of people in Northern Ireland live in rural areas and many rely on community transport to allow them to leave their homes because of a lack of public transport nearby.
'It is my lifeline'
Anne Mallon from County Armagh is partially sighted and uses community transport on a weekly basis.
She said: "I live on my own, I'm over 80 years of age, and I'm almost blind, so I would be completely lost without the service.
"They take me to go see my brother who has bad eyesight as well, they take me to get my hair done, I use it for eye appointments and to go to my visually impaired group."
She added: "If this services goes, I really would be isolated, just sitting in my house depressed.
"Taxis are too expensive, so I can't do without this service, it's my lifeline."
'It stops loneliness'
Diane Woods has been a driver with community transport for 20 years.
She said: "If this isn't sorted, I'll be made redundant, it's a simple as that.
"But I really feel for the people who rely on the service, not just for things like GP appointments and groceries, but just to get them out of the house."
Ms Woods said for some people it is their only way of getting social interaction and prevents loneliness.
"Most of the people I lift are very rural and live nowhere near public transport, so it just would be a massive loss to them," she said.
'Budget uncertainty'
In recent months community transport organisations have also been affected by rising fuel costs.
The Community Transport Association is calling for the service to be fully funded and ring-fenced against future cuts.
Stormont's departments have been operating without proper budgets since the start of the financial year last April due to the collapse of the executive.
BBC News NI previously reported that public services provided by Stormont departments face cuts of at least £500m in the new financial year.
It is understood that a number of other voluntary organisations funded by DfI are also at risk of losing funding.
The department said further funding decisions will be "dependant on the departmental budget allocation, which has yet to be confirmed".
Celine McStravick, chief of executive of the Northern Ireland Council for Voluntary Action (NICVA), said the transport service was the lifeblood of many communities.
"The fact that funding has been ended, and at such short notice, is a devastating blow," she said.
Ms McStravick said the sector is already under immense pressure without further funding cuts.
"In terms of the wider picture, our members have told us they are concerned about the high cost of energy, volunteer expenses and demand for services that outstrips what they can supply," she added.
"The pressure that they are under is immense, with many reporting that they are only just surviving and don't know how long they can continue."
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Nonprofit, Charities, & Fundraising
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Karnataka Bank Signs Pact With HDFC Life To Provide Insurance Products
The bank plans to provide innovative and customer-friendly solutions to those who are in search of financial security.
Karnataka Bank Ltd. has entered into a strategic corporate tie-up with HDFC Life Insurance Co. to provide products to its customers.
Through the partnership, it plans to provide innovative and customer-friendly solutions to those who are in search of financial security and life protection, the bank said in an exchange filing on Monday.
This collaboration will help in improving the services and products that are provided to the public, said Srikrishnan H., managing director and chief executive officer of Karnataka Bank.
"It reflects our dedication to providing holistic financial solutions through our wide distribution and digital network and ensuring the well-being and security of our customers and their families," he said.
"Life insurance is the first step towards financial planning, and we believe it is a must-have for every individual with responsibilities. With our rich experience in managing bancassurance partnerships, we aim to offer a comprehensive suite of product solutions and best-in-class servicing, leveraging our investments in technology," said an HDFC Life Insurance spokesperson.
Shares of Karnataka Bank closed 0.76% higher at Rs 219.90 apiece, as compared with a 0.21% fall in the benchmark BSE Sensex.
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Banking & Finance
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The Biden administration is moving to make it easier for caregivers to take in family members in the foster care system, requiring states to provide them with the same financial support that any other foster home would receive.
It also proposed a new regulation aimed at ensuring that LGBTQ+ children are protected in their foster homes from mistreatment due to their sexual orientation or gender identity.
More than 391,000 children were in foster care in 2021, according to a report from the U.S. Department of Health and Human Services. Many were removed from their homes and placed in foster care due to neglect, physical abuse or parental drug abuse. The average age of a child in foster care was 8.
The report said about 35% were placed in the home of a relative.
HHS issued a final regulation Wednesday that lets states simplify the process for family members to become caregivers.
“We’re going to start to give family a chance to really be family for these kids, especially for grandparents who oftentimes carry so much of a load and never get recognized for what they do,” HHS Secretary Xavier Becerra said.
HHS also laid out a proposed rule that, among other things, would require training for foster care providers on how to meet the needs of an LGBTQ+ child. States would be allowed to design those training programs.
That proposed rule will be open to public comment for 60 days before its finalized.
Another proposed rule would allow Native American tribes to be reimbursed for the legal costs of intervening in a state foster care court case over the parental rights of a child.
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Nonprofit, Charities, & Fundraising
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A Perfect Storm Has Begun Stifling India's Bank Credit Growth
Non-food credit slowed to 14.8% year-on-year in the fortnight ended Aug. 11, excluding HDFC-HDFC Bank deal.
Tight liquidity and higher interest rates are beginning to slow down the credit growth of India's banking sector.
The Reserve Bank of India's incremental cash-reserve-ratio requirement, its dollar sales to buttress a weakening rupee and the goods and services tax outflow are all leading to liquidity turning negative since March 2023.
Non-food bank credit rose 19.7% year-on-year to over Rs 148 lakh crore as on Aug. 11, according to the latest data by the RBI, primarily driven by the merger between Housing Development Finance Corp. and HDFC Bank Ltd.
The credit growth number would have been 14.8% without taking the $40-billion merger into account. This is below the trend of over 15% banks have been recording over the last year or so.
The RBI's move to raise CRR was targeted at sucking out the liquidity generated due to an increase in the Rs 2,000 notes into the banking system. The high cost of funds due to a cumulative 250-basis-point hike in the repo rate since May 2022 has also affected the credit offtake.
Banking system liquidity turned deficit for the first time in the current fiscal on Aug. 21 after the incremental CRR sucked out about Rs 1 lakh crore from the banking system. Currently, liquidity in the banking system is estimated to be in deficit of around Rs 23,644 crore. The last time banking system liquidity turned into deficit was on March 26.
Another repo rate hike in India would impact the loan growth outlook, reducing affordability and, therefore, demand, especially in loans for housing and micro, small and medium enterprises. It will be negative for the asset quality cycle as the higher equated monthly installments may impact serviceability of loans, according to HSBC Global Research.
Some analysts say credit growth will remain weak due to elevated interest rates and global uncertainties.
"Personal loans and services sector is driving the credit, but the issue continues to be industrial credit, where the growth in the MSME sector has come down quite significantly because of the end of (the) ECLGS," Indranil Pan, chief economist at Yes Bank, said.
The Emergency Credit Line Guarantee Scheme, launched in May 2020 as a part of the Union government's Covid-19 measures, was introduced to provide emergency loan facilities to the MSMEs, which have suffered during this pandemic.
Under the scheme, about 95% of the Rs 3.19 lakh crore guarantees issued as of March 25 attributed to the loans sanctioned to the MSMEs, according to the government data. The scheme has now been closed.
While credit to industry registered a growth of 8.1% year-on-year in June compared with 9.5% in June 2022, loans to services sector accelerated to 26.7% due to the improved credit offtake to the non-banking financial companies, according to the latest RBI data. Even personal loans grew 20.9% in June from 18.1% a year ago.
The banks' deposits have risen 13.5% year-on-year to the highest level in six years as of Aug. 11 at Rs 192 lakh crore, according to the RBI.
While the deposits have not risen as much as credit, it has certainly been propped up by the return of Rs 2,000 denomination notes.
"The higher interest rates are helping in terms of deposit growth, but it is difficult to reason out whether it is because of slowing economy going forward and people are getting cautious about spending," Pan said. "Having said that, there is some amount of resilience being seen in the economy. That, to an extent, should be helping deposit mobilisation."
Further rate hikes by the RBI are also likely to improve banks' deposits, according to Anand Dama, head of BFSI Research at Emkay Global Financial Services. "We could see some rate hikes here and there if inflation does not come in control. Looking at MPC, banks are not going to cut deposit rates going further, especially before the festive season kicks in," Dama said.
In July, India’s retail inflation skyrocketed to a 15-month high of 7.44%, marking the third instance of the CPI reading this year crossing the RBI's upper tolerance limit of 6%.
Over the past year, a steep rise in food prices amid global disruptions has compelled the central bank to raise its benchmark repo rate to 6.50% from 4.40% in May last year. At the monetary policy meeting this month, RBI Governor Shaktikanta Das said the monetary policy committee would take further actions promptly and appropriately as required to keep inflation expectations firmly anchored and to bring down inflation to the target.
The RBI projects the headline inflation at 5.4% for current financial year.
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Banking & Finance
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TL;DR: A wide range of cryptocurrency courses are available for free on Udemy(opens in a new tab). Learn about earning passive income, investment fundamentals, and trading patterns, without spending anything.
Taking your first steps into the world of cryptocurrency can feel daunting, but it doesn't need to be this way. You can learn all about earning passive income, investment fundamentals, and crypto trading patterns without leaving the comfort of your home.
Udemy is one of the most popular providers of online courses, with lessons available on everything from Python programming to artificial intelligence. You can also find a wide range of cryptocurrency courses on this platform, with something for total beginners, experience traders, and everyone in between. Better yet, some of the best examples of these cryptocurrency courses are available for free.
We've checked out everything on offer for free and lined up a selection of standout options. These are the best free cryptocurrency courses as of June 8:
You don't get access to things like a certificate of completion or direct messaging with the instructor by opting for the free courses, but don't let that stop you from enrolling. You can still learn at your own pace with unlimited access to all the course content, and you have the option to upgrade if you really want a certificate of completion to stick on your CV.
Find the best free cryptocurrency courses on Udemy.
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Crypto Trading & Speculation
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An anonymous reader quotes a report from the BBC: A thief who stole more than $470 million in cryptocurrency when FTX crashed is trying to cash it out while the exchange's founder is on trial. Sam Bankman-Fried's high-profile court case began last week. The former crypto mogul denies fraud. After lying dormant for nine months, experts say $20 million of the stolen stash is being laundered into traditional money every day. New analysis shows how the mystery thief is trying to hide their tracks. [...] On the day FTX collapsed, hundreds of millions of dollars of cryptocurrency controlled by the exchange were stolen by an unidentified thief that is believed to still have control of the funds. No one knows how the thief -- or thieves -- was able to get digital keys to FTX crypto wallets, but it is thought it was either an insider or a hacker who was able to steal the information. The criminal moved 9,500 Ethereum coins, then worth $15.5 million, from a wallet belonging to FTX, to a new wallet. Over the next few hours, hundreds of other cryptoassets were taken from the company's wallets, in transactions eventually totaling $477 million.
According to researchers from Elliptic, a cryptocurrency investigation firm, the thief lost more than $100 million in the weeks following the hack as some was frozen or lost in processing fees as they frantically moved the funds around to evade capture. But by December around $70 million was successfully sent to a cryptocurrency mixer -- a criminal service used to launder Bitcoin, making it difficult to trace. [...] Although mixers make it difficult to trace Bitcoin, Elliptic was able to follow a small amount of the funds -- $4 million -- that was sent to an exchange. The rest of the stolen FTX stash -- around $230 million -- remained untouched until 30 September -- the weekend before Mr Bankman-Fried's trial began. Nearly every day since then chunks worth millions have been sent to a mixer for laundering and then presumably cashing out. Elliptic has been able to trace $54 million of Bitcoin being sent to the Sinbad mixer after which the trail has gone cold for now. "Crypto launderers have been known to wait for years to move and cash out assets once public attention has dissipated, but in this case they have begun to move just as the world's attention is once again directed towards FTX and the events of November 2022," said Tom Robinson, Elliptic's co-founder.
According to researchers from Elliptic, a cryptocurrency investigation firm, the thief lost more than $100 million in the weeks following the hack as some was frozen or lost in processing fees as they frantically moved the funds around to evade capture. But by December around $70 million was successfully sent to a cryptocurrency mixer -- a criminal service used to launder Bitcoin, making it difficult to trace. [...] Although mixers make it difficult to trace Bitcoin, Elliptic was able to follow a small amount of the funds -- $4 million -- that was sent to an exchange. The rest of the stolen FTX stash -- around $230 million -- remained untouched until 30 September -- the weekend before Mr Bankman-Fried's trial began. Nearly every day since then chunks worth millions have been sent to a mixer for laundering and then presumably cashing out. Elliptic has been able to trace $54 million of Bitcoin being sent to the Sinbad mixer after which the trail has gone cold for now. "Crypto launderers have been known to wait for years to move and cash out assets once public attention has dissipated, but in this case they have begun to move just as the world's attention is once again directed towards FTX and the events of November 2022," said Tom Robinson, Elliptic's co-founder.
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Crypto Trading & Speculation
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This year will be remembered for a lot of things. Among them could be the growing number of stars in the startup world who were later convicted for defrauding investors.
Roughly six months after Theranos founder Elizabeth Holmes headed to jail for four counts of wire fraud, and just two weeks after Sam Bankman-Fried was found guilty on seven counts of fraud and conspiracy for his role in the collapse of his crypto exchange, another former high-flier in the startup world, Mike Rothenberg, was today convicted on 21 counts, including bank fraud, false statements, four counts of money laundering, and 15 counts of wire fraud.
The verdict, delivered by a jury in Northern California, bookends a 10-year-long journey for Rothenberg, who burst onto the Bay Area scene in 2013 at age 27 with a $5 million fund and enough charm to persuade TechCrunch his one-man firm was special enough to merit coverage.
The Austin native was a compelling subject. A self-described former math Olympian who attended Stanford before getting an MBA from Harvard Business School, Rothenberg reportedly started both a tutoring business and a real estate fund while still an undergrad. He also logged time at Bain & Co., seemingly setting himself up for a traditional career in finance or venture capital. Instead of taking a more traditional route — he was reportedly offered at least one role at a hedge fund — Rothenberg earned kudos for striking out on his own instead, and he leaned heavily into a narrative about himself as a relentless hustler who could relate to the founders he wanted to fund.
Rothenberg also found increasingly inventive ways to attract widespread attention to his relatively small shop along the way, many of them centered on organizing expensive parties for founders. Indeed, one of these gatherings – an “annual” event held two years in a row at the San Francisco ballpark where the San Francisco Giants play – inspired an episode of the HBO show “Silicon Valley.” It also raised questions, including in a story by Bloomberg that dubbed him “the Valley’s party animal,” while also observing that it wasn’t “entirely clear” how he was funding it all. (TechCrunch was told by sources that after the Bloomberg piece was published, Rothenberg sent two employees to SFO, purchasing them airline tickets so they could head to the airport’s newsstands and buy up their copies to keep them out of view.)
He never fully recovered. In 2018, he was formerly charged by the SEC for overcharging investors to fund personal projects; Rothenberg settled the next year with the agency, which sought tens of millions of dollars in disgorgement penalties that were later backed up by a federal court ruling.
In 2019, while still facing that mountain of civil penalties tied to the SEC’s findings, the DOJ separately brought charges against Rothenberg, which — four years later — led to today’s outcome.
Yet what comes next will be far worse, presumably. While Rothenberg won’t be sentenced until March 1 of next year, in its 2019 press release about its action against Rothenberg, the DOJ noted that “each of the wire fraud charges carries maximum statutory penalties of up to 20 years in prison, not more than three years supervised release, and a $250,000 fine.” It added that “two bank fraud charges” and “two false statement to a bank charges each carry a maximum of 30 years in prison, not more than five years supervised release, and a $1,000,000 fine.” The money laundering charges, it continued, “carry a penalty of imprisonment of not more than ten years, not more than three years of supervised release, and a fine of not more than twice the amount of the criminally derived property involved in the transaction at issue.”
Pictured above: a picture of Rothenberg Ventures during its heyday, with Rothenberg at center.
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Banking & Finance
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Kohl’s is the latest big retailer facing calls for a boycott after shoppers found gay Pride gear for babies — with some calling it “time for a Bud-Lighting.”
The department store saw a rising number of #BOYCOTTKHOLS hashtags online after conservative commentators posted about how it was selling a Pride onesie for 3-month-old kids.
“In case you need clothes for your Gay or Trans 3 month old, Kohl’s has you covered,” online commentator ALX wrote alongside a screenshot of the onesie. “Yes this is real.”
Benny Johnson also asked his 1.5 million followers: “Why is Kohl’s selling ‘Pride Merch’ for 3 month old babies?”
A widely shared video — which the maker said was initially removed for hate speech — also highlighted other Pride clothing for kids.
They included a shirt with Minnie Mouse ears over a rainbow-colored flag and the words: “Belong, believe, be proud” and another with “Ask me my pronouns.”
Many quickly called for a similar boycott to the one against Target, which saw the retailer lose $10 billion in market valuation over the last 10 days when anger mounted over its own LGBTQ collection for kids.
“Looks like Kohl’s didn’t learn a thing from Bud Lite and Target,” tweeted the End Wokeness account, which has more than a million followers.
“Another Company needing Bud-lighting!” wrote one “old Texan tired of the BS the left has turned our beloved country into.”
“We already know what to do. Kohl’s bud light moment,” another critic wrote.
“YOU’RE NEXT!” another commentator wrote alongside a Kohl’s ad showing a family of two dads and young kids all in Pride shirts.
“We are the reason @Target lost $10 billion in ten days!” the boycotter noted.
The onesie, which shows cartoon figures carrying a rainbow-colored flag, is currently half-priced at $9.99.
The Kohl’s listing says: “Celebrate the joy that comes from living authentically and unapologetically during Pride month and all year long with this Baby Sonoma Community® Pride Bodysuit Set.”
Loyal Kohl’s shoppers left stinging one-star reviews and further threats of boycotts in the listing.
“Anyone that puts this on their kid should be locked up for life,” one reviewer wrote, while another told the company: “Just stop it already.”
“Leave sexuality out of clothing for babies. Absolutely ridiculous. Bye Kohl’s!” another said, while a longtime tier-one customer said: “I’m OUT. This is disgusting.”
Amid the barrage of anger at the items, a handful of online commentators stuck up for the company.
“Most major retailers celebrate Pride month. You’ve been hiding under a rock,” one person wrote, while others called for shoppers to “all stick together and make sure @Kohls fights back” against the backlash.
“Kohls, Burlington, JCP, Macys, Dillard’s, Nordstrom and the GAP companies will all celebrate Pride month with special clothing lines or are inclusive. Add Pepsi, Coca-Cola, 7-Up, Dr. Pepper, Absolut, Smirnoff . . . y’all gonna boycott EVERYONE,” asked one Twitter user.
However, critics shot back to insist the anger has nothing to do with Pride, just the targeting of kids.
“A f—ing onesie?? NOBODY CARED UNTIL YOU DEMONS STARTED WITH THE KIDS!!” one person wrote.
Kohl’s did not immediately return messages seeking comment early Monday.
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Consumer & Retail
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- Sam Bankman-Fried's monthlong criminal trial has mostly wrapped up, with the FTX founder's fate now in the hands of the jury.
- In addition to testimony from former FTX and Alameda Research insiders, jurors are considering evidence in the form of emails, text messages and photos.
- Bankman-Fried, who faces potential life in prison if convicted, pleaded not guilty to all charges.
Over the past month, lawyers in the criminal trial of Sam Bankman-Fried have brought close to 20 witnesses to the stand and presented hundreds of exhibits to the 12 jurors who will decide the fate of the boy once deemed the king of crypto.
The jury, which began deliberations on Thursday afternoon, has a mountain of evidence to consider in determining whether the 31-year-old founder of FTX is guilty of seven criminal counts, which include wire fraud, securities fraud and money laundering. Bankman-Fried, who has pleaded not guilty to all charges, faces more than 100 years in prison if convicted.
While prosecutors were able to present the jury with testimony from members of the defendant's inner circle, Bankman-Fried's case rests largely on his own appearance on the witness stand.
"From beginning to end, Sam Bankman-Fried's team failed to come up with a real game changer," said Renato Mariotti, a former prosecutor in the U.S. Justice Department's Securities and Commodities Fraud Section and now a trial partner in Chicago with Bryan Cave Leighton Paisner. "His fraud was brazen and difficult to explain away, and he lacked the discipline to keep his mouth shut even after it was apparent that he was under criminal investigation."
In addition to oral testimony, the government brought in other evidence to try and prove its case and to paint a picture of an executive who got too much, too fast, and spent well in excess of his means. These exhibits include encrypted text messages, emails, promissory notes, Google docs, spreadsheets, leaked videos and photos displaying Bankman-Fried's lavish lifestyle, including of his $35 million condo in the Bahamas.
For weeks, prosecutors have shown the jury how billions of dollars in FTX customer money went to political donations, venture investments and luxury real estate. They traced the hundreds of millions of dollars that went from company coffers to Bankman-Fried's personal accounts.
The prosecution presented a series of relatively simple, two-page promissory notes. According to agreements signed by the defendant and Caroline Ellison, who ran hedge fund Alameda Research, Bankman-Fried borrowed more $1.1 billion in the year before his companies — FTX and Alameda — filed for bankruptcy.
Bankman-Fried admitted on the stand that there were likely more loans that weren't properly documented, so the borrowing probably exceeded what was presented into evidence.
Much of the government's case against Bankman-Fried hinges on the testimony, emails, and text messages from former top lieutenants who turned against him late last year.
In one email, shared by prosecutors, Bankman-Fried promised preferential treatment to Bahamian customers on the FTX cryptocurrency exchange.
In a message to Ryan Pinder, the attorney general and minister of legal affairs for the Bahamas, Bankman-Fried claimed FTX had "segregated funds for all Bahamian customers" and would be "more than happy to open up withdrawals for all Bahamian customers on FTX, so that they can, tomorrow, fully withdraw all of their assets, making them fully whole."
The email was sent Nov. 9, one day after FTX had halted withdrawals and two days before it filed for bankruptcy. FTX users had collectively pulled $5 billion off the platform in what amounted to a bank run.
Two other separate email chains show that Bankman-Fried seriously mischaracterized his role at Alameda Research, according to prosecutors.
In a message to Rob Creamer, the CEO of Geneva Trading and chairman of FIA Principal Traders Group, Bankman-Fried wrote "Alameda has a totally separate team" that he didn't manage.
Bankman-Fried wrote in an email to a Wall Street Journal reporter that Alameda's account access "is the same as others" and that its traders don't have "any special access to client information, marketdata, or trading." According to the government, those claims have been debunked through witness testimony and internal company documents and text messages.
Alameda's preferential treatment is spelled out in the two exhibits listed below. They show Alameda's "allow negative" feature, and a line of credit on FTX that was $65 billion compared to $150 million or less for all other customers on the exchange.
Executives at FTX and Alameda used Google Docs and Sheets to share important financial information, according to their testimony.
Ellison would send alternative versions of balance sheets, some omitting key financials like the amount of customer funds borrowed by Alameda to cover its liabilities, to Bankman-Fried. He would then decide what to send to lenders.
Bankman-Fried would also consider larger strategy decisions in memos to his top execs.
In one memo, Bankman-Fried laid out the merits of shuttering Alameda, pointing to the "PR hit from Alameda and FTX both existing." He wrote that, "the current Alameda leadership is good, but not good enough to be able to trust with such a big operation."
He also wrote personal memos after the business had collapsed.
In a Google Doc dated Dec. 25, Bankman-Fried referenced the $600 million-plus stake in Robinhood he'd acquired with capital from Alameda. He wondered whether he should "try calling up the broker HOOD is with and see if they'll just give me the shares without thinking about it."
A big part of the government's case revolves around the ways Bankman-Fried allegedly directed spending of money at Alameda long after he was no longer officially running the hedge fund.
In a message to FTX's then general counsel Can Sun, Bankman-Fried pushed to get a $250 million transfer to hedge fund Modulo Capital expedited in full within eight hours. Sun later testified about the transaction under a non-prosecution agreement with the government.
Bankman-Fried's chummy ties with celebrities and his enthusiasm for spending hundreds of millions of dollars on endorsement deals were areas of focus for the government.
Prosecutors showed the court a spreadsheet of investments made in 2021. They included $205 million for FTX's naming rights to Miami's NBA arena, $150 million to Major League Baseball, $28.5 million to NBA star Stephen Curry, $50 million to quarterback Tom Brady and his then wife Giselle Bundchen, and $10 million to comedian Larry David. The deals on the spreadsheet amounted to a total of $1.13 billion.
Nishad Singh, who was FTX's director of engineering, testified that the $300 million outlay on investment firm K5 was among the most troubling. He said Bankman-Fried sent him a term sheet detailing hundreds of millions of dollars of bonuses to owners Michael Kives and Bryan Baum. That followed a K5 dinner Bankman-Fried attended alongside Hillary Clinton, Katy Perry, Orlando Bloom, Leonardo DiCaprio, and Kris and Kylie Jenner.
Singh said he told Bankman-Fried he was very concerned and that the K5 investment was "value extractive." He also said he asked Bankman-Fried if the investment was made with his money or FTX's. The spreadsheet showed it came from Alameda.
In a motion to dismiss a complaint in bankruptcy court against K5, the firm's lawyers said the "plaintiffs attempt to make Kives and Baum complicit in SBF's wrongdoing has no basis in fact."
In an all-hands meeting on the evening of Nov. 9, 2022, Alameda Research employees gathered in a circle to listen to Ellison, the CEO, who was sitting on a beanbag. She told staffers about Alameda's borrowing from FTX, and said the exchange now had a "shortfall of user funds."
Christian Drappi, a former software engineer at Alameda, was one of the 15 people in attendance at the meeting in the Hong Kong office. Ten others joined via video from the Bahamas.
In his testimony, Drappi described Ellison's demeanor that night as "sunken." He said she was "kinda slouching" and "did not display confident body language."
In the recording of the Ellison meeting that was played for the jury, Drappi can be heard asking about FTX's plan to pay back customers. Ellison said the company would raise money to fill the hole. Drappi asked Ellison if Alameda's loans were collateralized through the spot margin group. She said they weren't, and Drappi said, "That seems pretty bad."
Of the hundreds of items entered into evidence, a bank of messages on encrypted app Signal paint perhaps the clearest picture of Bankman-Fried's alleged crimes.
One thread, dubbed "small group chat," included Ellison, Bankman-Fried, and Joe Bankman, the defendant's father, who advised the company on tax-related issues and other things. Also in the group were Ramnik Arora, a former product lead for FTX; Ryne Miller, who was the company's general counsel; Constance Wang, ex-operating chief; and former FTX executive Ryan Salame.
Early in the morning on Nov. 7, the defendant put forth some "potential todos," including halting withdrawals, sending a "confident tweet thread" and reaching out to firms such as Silverlake, Sequoia, and Apollo as they "wake up over the next few hours" to try to shore up cash.
Later that morning, Salame linked to a tweet from an anonymous crypto trader saying, "cant wait for my FTX airdrop for not moving any of my funds."
Bankman-Fried chimed in with different ideas about how to take advantage of the post in an apparent effort to provide false hope to FTX customers that they'd receive free tokens if they kept their funds on the platform.
The next day, Nov. 8, Ellison appealed to the group for help on optics and public messaging.
She wrote, "multiple people internally asking me whether they should continue to make statements to external parties like 'Alameda is solvent.' should i suggest they stall instead? just stall on responding to their messages? or what?"
That's the same day FTX issued a pause on all customer withdrawals. The price of FTT, FTX's native token, plummeted by over 75%. Out of options, Bankman-Fried turned to Binance CEO Changpeng Zhao, who announced he'd signed a nonbinding letter of intent to acquire FTX.
On Nov. 9, Ellison again looked to the group for guidance about how to handle the now infamous all-hands meeting of Alameda's roughly 30 employees.
She proposed saying, "Alameda is probably going to wind down" and that there was "no pressure" to stay but help with "stuff like making sure our lenders get paid" would be "super appreciated."
Bankman-Fried suggested she say something about there "being a future of some sort for those who are excited."
Author Michael Lewis, whose book profiling Bankman-Fried was published the day the trial began, was also the subject of some Signal exchanges.
In a chat on Jan. 5, 2022, Bankman-Fried alerted a group that included Ellison and Singh that Lewis would be coming to the Bahamas the next month to do reporting.
Ellison said her "instincts are more toward under the radar." Bankman-Fried, a notorious press hound, responded, "same, except exactly the opposite."
As the grand scheme collapsed months later, Ellison expressed a great deal of relief in a private chat with Bankman-Fried.
Ellison wrote, "this is the best mood I've been in in like a year tbh" ("tbh" is short for "to be honest").
In three consecutive messages, Bankman-Fried responded, "wow," "uh," "congrats?"
Ellison wrote, "I think I just had an increasing dread of this day that was weighing on me for a long time, and now that it's actually happening, it just feels great to get it over with one way or another."
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Crypto Trading & Speculation
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India’s Das Says U.S. Should Rethink Currency Manipulator List
(Bloomberg) -- The US practice of putting emerging markets countries on a watchlist as potential currency manipulators should be reviewed, said India’s central bank governor, who defended the need to buttress their economies from market swings.
(Bloomberg) -- The US practice of putting emerging markets countries on a watchlist as potential currency manipulators should be reviewed, said India’s central bank governor, who defended the need to buttress their economies from market swings.
“There has to be a two-sided appreciation of the challenges” emerging markets face dealing with spillover effects of advanced economy policies, Reserve Bank of India Governor Shaktikanta Das said Thursday at the annual meetings of the International Monetary Fund and World Bank in Marrakech, Morocco.
India was most recently on the US Treasury’s watchlist as a potential currency manipulator in late 2020 and was removed two years later. In its June update, Treasury didn’t label any major trading partner as a manipulator, however seven economies remained on its monitoring list including China, Germany and Switzerland.
India’s central bank has been one of the most active dollar buyers in the market in recent years as it seeks to build reserves to fend off any speculative attack on the currency. The RBI has added $60 billion to reserves after it fell to a two-year low of $525 billion in October last year.
The RBI Governor said India’s reserves accumulation was “as an insurance against spillover risks,” of advanced economy central bank policies.
“India, with a huge population, and with the size of our economy, we have to be self-reliant, we have to be self-dependent, we have to have our strong reserves,” Das said.
The RBI does intervene in currency markets, he said, but the objective is “not to fix,” the dollar-rupee exchange rate at a particular level.
Das also commented on the future of money:
- Central Bank Digital Currency “is going to be the future currency of the world and it is necessary that every central bank, every country works on CBDC”
- Private cryptocurrencies, including stable coins, may have negative consequences for domestic and global financial stability and monetary systems
- Private cryptocurrencies may even lead the central bank to “lose control over the monetary system”
--With assistance from Subhadip Sircar.
(Updates with details on India’s foreign reserves in fourth paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Forex Trading & Speculation
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While the holiday season may be months away, now is the best time to book your travel to visit family and friends for those winter months. Typically, the further in advance you are able to firm up your travel plans, the better the deals are.
Before you start planning for your holiday travel, you should be aware that scammers are always on the lookout for unsuspecting travelers who might fall for their sneaky tricks.
Here are some tips on how to avoid common travel scams that could ruin your holiday travel plans.
Plan ahead and do your research
This is why planning ahead is so important. Scammers prey on people who are trying to book last-minute trips with the best deals they can find.
Oftentimes, those who use search terms like "cheap flights," "last-minute deals," and "travel bargains" are the ones who end up coming across scammers first.
Verify the security of the websites you visit
Make sure you're always using official sites that you can trust and that every site URL you're viewing begins with HTTPS for that extra layer of security.
This is because official sites are more likely to have valid security certificates that protect your personal and financial information from hackers and scammers.
HTTPS stands for Hypertext Transfer Protocol Secure, which means that the communication between your browser and the website is encrypted and authenticated.
You can also look for a padlock icon in the address bar to verify the security of the travel websites you visit.
Seek out reliable reviews for your travel needs
One great trusted resource where you can find trusted reviews on hotels, travel agencies, and other travel-related businesses is bbb.org.
By using this site, you can also avoid falling victim to fraudulent offers or hidden fees that some unscrupulous businesses may try to lure you with.
You can check the accreditation status, complaint history, and customer feedback of any hospitality business before you make a reservation or a purchase.
Watch out for fake listings
Scammers love tricking people by using fake holiday rental listings. They will post a listing that either doesn't exist at all, is not up for rent, or has pictures that are not at all representative of what the rental looks like.
When looking at a holiday rental, take a close look at the cost of renting. Compare the cost with other rentals in the area to see if that cost is much lower than the other properties. That is a key sign that the listing is fake.
You should also keep your guard up if the lister is trying to get you to book the home immediately. Scammers will often try to rush you into handing over your money so that they can take it and run.
You should also see if you can find the rental property on any other sites. If you find the same rental is listed on different sites by different people or with significantly different prices, then that's a big red flag for a scam.
Don't fall for free stuff
Scammers will also try to trick you with phishing email scams to try to convince you that you've won something like a free cruise or free vacation to some tropical island, even if you've never entered any sort of contest to win that free trip. This should certainly be a warning sign for you that you're being scammed.
Oftentimes these "free" vacations are either fake or they have tons of hidden fees that you won't know about until after you commit, like hidden flight and accommodation fees.
It's just another easy way for scammers to get vulnerable people to hand over their credit card information so that they can use it for their gain.
Hotel scams
Another sneaky trick that scammers like to use is the hotel scam trick. In this scam, the criminals will target people who are taking long journeys and will target them after they've been exhausted from traveling so much.
They might try to call you and pretend to be the front desk person at your hotel, offering you a room upgrade as long as you verify your credit card information.
Hotels will rarely offer you a free upgrade to your room for no reason, and if they do, it will likely happen once you're checking in.
Use a good payment method
The most trusted payment you can use when booking something is your credit or debit card because your credit card company or bank will have a record of your transaction and will be able to trace it should something go wrong later on.
You should always avoid wiring money, paying in the form of a gift card, or other forms of payment because they are not as easily traceable.
A scammer may try to convince you to make an unorthodox form of payment, so always proceed with extreme caution or avoid it altogether if that is the case.
Kurt's key takeaways
You must always have your guard up when booking holiday travel and make sure that you're doing the proper research before booking anything.
A scammer will try anything to take your money, and the last thing you want is to have your fun holiday getaway ruined by a criminal.
If you use this helpful knowledge and read everything carefully, with any luck it will go smoothly with your upcoming holiday travel.
What more do you think booking sites could be doing to weed out these scammers from posting fake ads? Let us know by writing us at Cyberguy.com/Contact.
For more of my tech tips & security alerts, subscribe to my free CyberGuy Report Newsletter by heading to Cyberguy.com/Newsletter.
Copyright 2023 CyberGuy.com. All rights reserved.
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Consumer & Retail
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NBFC Sector - New Norms Impact Capital Buffers, Cost Of Funds: Nirmal Bang
Reserve Bank of India has increased the risk weights in respect of consumer credit exposure of NBFCs by 25% to 125%.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Nirmal Bang Report
Reserve Bank of India tightened norms related to unsecured lending portfolios of Nonbank financial companies amid concerns of abnormally high growth in these loan categories.
We expect the new norms to impact NBFCs with low capital adequacy as higher risk weights would require enhanced capital buffers. Moreover, we expect cost of funds to increase for most NBFCs in our coverage with bank credit to NBFCs becoming more expensive.
In our coverage universe, balanced advantage funds and Cholamandalam Investment and Finance Ltd. will not see a significant impact as both have recently raised capital; Mahindra & Mahindra Financial Services Ltd. could likely opt for a capital raise, while Poonawalla Fincorp Ltd. / Shriram Finance Ltd. maintain a sufficient capital buffer.
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.
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Banking & Finance
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Editor’s Note: A version of this story appeared in CNN Business’ Nightcap newsletter. To get it in your inbox, sign up for free, here.
Sticker shock, a feeling as old as commerce itself, is no longer just an irksome, unexpectedly high bill. In the era of social media, overpaying for dinner is an invitation for anyone and everyone to publicly shake their fist over the health of the global economy.
Take the $16 McDonald’s meal that struck a nerve on TikTok late last year. If you missed it, the gist is there’s a guy in Idaho who paid $16.10 for a burger, large fries and a drink.
“I get there’s a labor shortage. I get there’s wage increases and a number of other things,” he says in the video. “But $16? … It’s just crazy.”
That’s becoming an increasingly nettlesome problem for Democratic political strategists and economists who have so far failed to deliver the message that the economy is actually doing great.
Of course, fast food prices have gone up along with everything else in the past few years, but not by as much as the TikTok video suggests. The burger in the video isn’t a standard McDonald’s menu item — it was a one-off “smoky” double quarter-pounder with bacon and cheese, the kind of limited offering that fast-food restaurants often roll out in order to gin up sales in a business that runs on razor-thin margins.
The average Big Mac in America cost $5.58 this summer, according to the Economist. That’s up about 75 cents from January 2020, just before the pandemic hit. Because the vast majority of McDonald’s restaurants in the United States are independently owned, prices vary from region to region. (For example, in the wealthy town of Darien, Connecticut, a Big Mac combo meal can set you back about $18, as CBS News reported earlier this year and as I experienced first-hand on a pit stop along I-95.)
The social media megaphone
In an era before TikTok or YouTube, a $16 burger moment would have lasted a few seconds. The man who purchased it might have shaken his head and enjoyed his meal, or even gone back to the checkout to ask if there’d been a mistake when ringing up his order.
But in the social media era, the outrage gets published, elevated and amplified, feeding other people’s indignation about a world where food and housing and gas are more expensive than in the past.
Despite the inflation hangover keeping prices elevated, the economy, by almost any measure, should be one of the biggest feathers in President Joe Biden’s cap over the past three years. But American voters keep telling pollsters that they aren’t feeling all the good news that economists are seeing in the data.
In a CNN poll released earlier this month, 72% of all Americans say things in the country are going badly, and 66% said the economy will be “extremely important” when deciding whom to vote for next year.
A majority — 58% — told CNN in a poll released in September that Biden’s policies have made economic conditions worse.
Even the seemingly isolated incident of the $16 McDonald’s meal reached the desk of the White House Office of Digital Strategy, which tracked it as one of many exaggerated claims about the economy that the Biden administration is struggling to counter, according to the Washington Post.
The real beef
Perhaps the more significant economic takeaway from the viral McDonald’s meal is not that the meal actually cost $16 but that the man paid for it.
It’s not clear whether the TikTok user who posted the video, Topher Olive, saw the price of the special menu item before he ordered it. (He didn’t respond to CNN’s request to comment Monday.) But McDonald’s doesn’t hide its prices, and it’s clear Olive did pay for it because he filmed the receipt.
That part of the story mirrors a bigger economic trend — that Americans say they feel bad about the economy when asked by pollsters, but their actions tell a different story.
Despite higher prices and all-around sour mood, American consumers have been exceptionally willing to spend money on dining out, travel, concert tickets, and all manner of goods.
Consumer spending, the biggest engine of the US economy, powered US gross domestic product to grow at a stunning annualized rate of nearly 5% last quarter — more than double the quarter before that.
That doesn’t mean all Americans are thriving, but it does suggest that the historically strong labor market — unemployment has been under 4% for nearly two years — is giving workers a sense of security about their future paychecks.
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Inflation
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Crypto Traders Are Betting on Asia as a Haven After US Crackdown
Asia is fast becoming the new center of gravity for cryptocurrency markets.
(Bloomberg) -- Asia is fast becoming the new center of gravity for cryptocurrency markets.
As US regulators sued three major crypto exchanges this year, billions of dollars of trading volumes have migrated to Asia. That shift could be poised to accelerate as market makers and exchanges move resources to a region where several jurisdictions have introduced regulatory frameworks and are vying for digital-asset traders.
Investors and marketplaces are flocking to Singapore, Japan and South Korea — and more recently to Hong Kong, which this month introduced a new regulatory regime for crypto. Bitcoin trading activity in predominantly Asian hours have risen this year even as they slumped in US and European hours, data compiled by CryptoQuant show. The token accounts for almost half of crypto’s total market value.
The resilience in Asian crypto volumes is underpinned by institutional investors who perceive the regulatory environment there as less risky, according to several market participants interviewed by Bloomberg.
“With so much regulatory uncertainty in the US, Asia has become an increasingly important hub for digital-asset activity,” said Jonny Caldwell, who focuses on alternative investments including cryptocurrencies as co-head of asset management at Trovio Group. “We are observing a major shift to Asian-based exchanges and venues in the last few months.”
What makes the change even more notable is that it has occurred even as crypto trading remains banned in China, while India levies draconian taxes that have sapped activity there. The two countries together account for more than half of Asia’s population, so they represent a vast opportunity should their policies ease.
“The base for new users in Asia is huge,” said Chuan Jin “CJ” Fong, head of sales for Asia-Pacific and Europe, the Middle East and Africa at crypto market maker GSR Markets. Fong said he expects trading to continue to shift from the US, and to a lesser extent Europe, to Asia.
The pivot toward Asia was underway even before the US Securities and Exchange Commission under Chair Gary Gensler launched a wide-reaching clampdown this year. Reserves of Bitcoin and Ether, an indicator of where traders are moving their assets, plunged at US-based exchanges following the collapse of FTX in November.
That trend continued this year as the SEC filed lawsuits against Gemini, Binance, Coinbase and Justin Sun, the entrepreneur who runs Huobi Global. The agency also indicated that it considers at least 19 digital tokens to be securities, meaning they should be under its purview. The SEC’s proposed designation triggered a sharp selloff in those coins.
Read more: Why Crypto Flinches When SEC Calls Coins Securities: QuickTake
While Europe has been making strides in crypto regulation, the EU-wide Markets in Cryptoassets regime won’t come into effect until starting in 2024. The UK, which is formulating its own rules for cryptoassets, this month said it would ban the “refer a friend” bonuses that are popular in the industry as part of stricter regulations around marketing of digital assets.
Binance’s global market has held steady since April even as its share of trading in euro pairs tumbled, according to researcher Kaiko. The company on June 16 said it was quitting the Dutch market after failing to get a registration there. The same day, French authorities said they are investigating Binance.
Binance.US, a separate entity that caters to US traders, has seen its market share almost evaporate following lawsuits from the SEC and the Commodity Futures Trading Commission.
Estimating market share for Asia is difficult because the various crypto hubs use different fiat trading pairs. But “Binance has had a historically strong user base in Asia,” said Clara Medalie, director of research at Kaiko.
The shifting tides have sparked a headlong rush by exchanges and other market participants to expand in Asia, even as they downsize in the US. Since November, Binance has entered Japan and South Korea through acquisitions. Its joint venture in Thailand, Gulf Binance, received local licenses last month and will start operating in the fourth quarter.
Gemini, which has sought to dismiss the lawsuit the SEC filed in January, on Monday said Singapore will be its hub for the Asia-Pacific region and announced plans to boost headcount in the city-state to more than 100 in the next 12 months.
FalconX, a San Mateo-based digital-asset prime broker, plans to expand in Asia and has applied for a license in Singapore, said Matt Long, the firm’s general manager for APAC.
“We see a lot of appetite for crypto over-the-counter derivatives from family offices, proprietary traders and hedge funds in Singapore and Hong Kong,” Long said. “Derivatives will be a main driver for digital assets trading and we expect Asia to lead the growth.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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Sadiq Khan announces free school meals for all primary school pupils in London
20 February 2023, 10:05 | Updated: 20 February 2023, 13:30
London Mayor Sadiq Khan has unveiled an emergency scheme to extend free school meals to every primary school pupil in the capital for one year.
Mr Khan said the one-off £130m programme, which comes into effect from September, is an effort to help struggling households amid the cost-of-living crisis.
Funded by additional business rates income, it is estimated the move will help around 270,000 primary school pupils and save families in London around £440 per child across the year.
Currently, households in England receiving Universal Credit must earn below £7,400 a year before benefits and after tax to qualify for free school meals.
According to the Food Foundation, an estimated 800,000 children in England are living in poverty but do not qualify.
Read more: Heart attack and stroke patients warned ambulance not guaranteed as more than 11,000 workers walk out in fresh strike
Read more: Prince Harry's fight to have police protection in Britain has cost taxpayers £300,000, new figures show
Mr Khan said he was "stepping forward" after years of Government inaction.
"The cost of living crisis means families and children across our city are in desperate need of additional support," he said.
"I have repeatedly urged the Government to provide free school meals to help already stretched families, but they have simply failed to act.
"This is why I'm stepping forward with an emergency £130m scheme that will ensure every single primary pupil in the capital receives free school meals. This will save families hundreds of pounds over the year, ensuring parents aren't worrying about how they're going to feed their children.
"It will also guarantee every primary school student a healthy, nutritious meal - meaning they don't go hungry in the classroom and can better concentrate on their studies."
Mr Khan called free school meals a "lifeline", adding that he had personally benefitted from them as a child.
He said: "My siblings and I depended on them to eat while at school and my parents relied on them to give our family a little extra breathing room financially.
"The difference they can make to children who are at risk of going hungry - and to families who are struggling to make ends meet - is truly game-changing.
"Supporting London's families through this cost-of-living crisis and helping ensure our children are properly fed is vital as we continue striving to build a better London for everyone - a city that is fairer, safer and more prosperous for all."
Anna Taylor, chief executive of the Food Foundation, called on the Government to follow Mr Khan's lead.
She said: "We applaud London's Mayor for taking timely action to support families fighting the cost of living by ensuring every primary school pupil gets a nutritious lunch, no matter their background.
"This is a monumental step forward for safeguarding children's diets, well-being and learning across the capital.
"However, outside of London, hundreds of thousands of children living in poverty still don't qualify for a Free School Meal. Central Government must now honour its levelling up commitment by investing in Free School Meal expansion for every community in the upcoming budget.
"We know this policy has resounding support in every corner of the UK."
Mr Khan's intervention comes after TV chef Jamie Oliver in December called on the Government to extend free school meals to every household with parents on Universal Credit, warning "chaos ensues" from parents worrying about feeding their children.
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Inflation
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Di Forbes loves working for a debt charity but the growing queue of people in financial distress means helping them is becoming ever more demanding.
"It feels never-ending... it just doesn't stop," she said of the demand for help from Money Buddies in Leeds.
The charity's boss Saleem Shafi, told the BBC: "We're facing a debt tsunami and the sector is at breaking point."
Citizens Advice, Step Change and Christians Against Poverty said they had also seen record requests for help.
Money Buddies chief executive Mr Shafi told me the rising number of people in debt meant government funding through the Money and Pensions Service did not go far enough.
"We're desperate for more funding to employ more face-to-face staff," he said.
"Our staff are under far too much pressure trying to help three times as many people as at this point last year," he said.
So I asked him if I could spend a day with one of his frontline staff and see first-hand the pressure they are facing. "Sure," he said. "I know just the woman."
That's how I ended up in the passenger seat of Di's car on a cold morning at the end of January heading to the Trussell Trust foodbank at the Church of the Epiphany in Gipton, Leeds.
Di works full-time as a Money Buddy and describes it as like a triage.
"I find out as much of the basics as I can from each person and then point them in the right directions. I refer them to our benefits team, our debt team, a food bank, or a charity topping up energy," she says. Di says more people are coming to her for help than ever before - and national charities have told the BBC they recognise this experience.
Citizens Advice said in the last 12 months it helped more than 200,000 people with crisis support, like food bank referrals. It warned that 2023 could be "the year of the debt crisis".
StepChange said the number of clients it advised was up 78% in December and 34% in January compared with last year. Christians Against Poverty said it was also seeing a rise in demand for its services - in particular emergency support. The charity said rising costs mean its funding does not stretch as far.
The Treasury said it had invested £90m in free debt advice in England and was helping people to avoid debt with support worth on average £3,500 per household.
What do I do if I can't afford to pay my debts?
- Talk to someone. You are not alone and there is help available. A trained debt adviser can talk you through the options. Here are some organisations to get in touch with.
- Take control. Citizens Advice suggest you work out how much you owe, who to, which debts are the most urgent and how much you need to pay each month.
- Ask for a payment plan. Energy suppliers, for example, must give you a chance to clear your debt before taking any action to recover the money
- Check you're getting the right money. Use the independent MoneyHelper website or benefits calculators run by Policy in Practice and charities Entitledto and Turn2us
- Ask for breathing space. If you're receiving debt advice in England and Wales you can apply for a break to shield you from further interest and charges for up to 60 days.
When we arrive there's a woman waiting in line for the foodbank. We're not identifying her or any of the people Di speaks to because many of them are extremely vulnerable.
Di starts chatting to the woman and realises she can point her towards benefits she is entitled to but did not know how to claim.
Afterwards Di tells me: "I think she can see a little bit of light at the end of the very long tunnel."
Di spots an email from an elderly man telling her he'd received £200 after she helped him make a claim.
"That's a huge amount for him. That'll make a big difference," she says.
"I like the little wins. I like it when someone gets what they deserve, what they need, makes them safe, gets them sorted out. I love that," she says.
Just as the foodbank is closing, an 18-year-old woman rushes in just in time for a food parcel and a quick chat with Di. She'd just left the care system and was struggling to cope on her own. Di helped her get a foodbank voucher and an emergency top-up for her energy prepayment meter.
We were late leaving the church hall, and by the time we arrive at the Armley Community Hub where Di holds a weekly drop-in service, she's practically running up the steps.
There's already a queue, and she's not had time for any lunch. Again. As she opens a wrap she tells me: "I'm contemplating sharing my lunch and that's not an unusual thing either."
Di gets settled in a side room and helps two women with emergency food and energy top-ups.
Next she helps a woman with an eight-week-old baby and no money on her prepayment meter to heat her home.
"It feels never ending," she says. "It's like a tsunami, it just doesn't stop."
There are another two people to see, who have been waiting to talk to her for four hours.
Eventually, an hour after Di was due to clock off we turn out the lights. But the day is not over.
Di still has a couple of baby bank referrals for people who are on the breadline tonight.
"So what I'm going to do now is go home, cook tea and carry on," she says.
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Nonprofit, Charities, & Fundraising
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More than half of NHS trusts and health boards are either providing or planning food banks for staff, new research suggests, as the cost of living soars.In a survey that lays bare the catastrophic impact that the rising cost of food, energy and housing is having on health workers, NHS Charities Together and the Observer have found that thousands of NHS staff – including nurses – are already seeking help from food banks, with numbers expected to rise in the coming months.The news comes amid an ongoing dispute with the government over nurses’ pay, as the Royal College of Nursing prepares to take further strike action on 18 and 19 January after walking out for the first time last month. More than half of those surveyed also said they were looking at other ways to provide food support for staff in addition to food banks, with initiatives such as voucher programmes, subsidised canteen meals and free breakfasts.The charity, which supports every trust and health board in the UK, said that for the first time in NHS history its members were having to provide benevolent funds for staff who cannot afford basic living costs. Traditionally, charities fund causes such as staff training and research.Of the 34 NHS charities which responded to the survey, 21% said they had an active food bank for staff or were implementing one, while 35% said they were looking into it.Across the six food banks that responded, nearly 5,000 staff are estimated to have used them on a monthly basis, about 550 of whom were nurses. In an indication of how rapidly the cost of living crisis has hit the institutions, three of the food banks were opened in the past three months.Ellie Orton, the chief executive of NHS Charities Together, called it “a perfect storm”, adding that it was “heartbreaking” that healthcare staff working under such pressures were struggling to eat and having to use food banks.“It’s really important that, as a country, we continue to support staff, to understand the pressures that they’re under. This is unprecedented” she said. Staff at St George’s hospital in Tooting, south London, which is understood to be partnering with the nearby Earlsfield food bank to offer help, said that they were struggling with basic living costs – borrowing money from colleagues and cooking for one another.An administrator at the hospital visited a food bank for only the second time in her life last week – the first time was during the pandemic – because her fridge was empty and she was struggling with debt. “I know a lot of people in the hospital rely on other people. I’ve had other staff members asking me if they can borrow money, and if I can help, I do,” said the woman, who is in her 20s. A government spokesperson said: “We value the hard work of NHS staff and are doing what we can to support them in these challenging times – including by giving over 1 million NHS workers a pay rise of at least £1,400, as recommended by the independent NHS pay review body, on top of 3% the previous year when pay was frozen in the wider public sector.“We know it is a difficult time for families across the country. That is why we have acted swiftly to provide support, including the energy price guarantee, which is saving the typical household around £900 this winter, as well as £400 payments towards bills and £1,200 for the most vulnerable households.”
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Inflation
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Wes Streeting: I’ll tackle junk food and vapes for children
Society appears blind to how a whole generation has been allowed to become nicotine addicts, shadow health secretary tells The Times Health Commission
Labour is prepared to use “the heavy hand of state regulation” to force food companies to make their products healthier, the shadow health secretary has said.
Wes Streeting said the sugar tax on soft drinks had been an “effective public policy intervention on public health” and suggested it could be extended to other products.
At a hearing of The Times Health Commission, a year-long inquiry into health and care, Streeting also said the tobacco industry should expect regulation on the promotion and sale of vaping products to children. He promised to come down on shops selling vapes to children “like a tonne of bricks”, describing them as “effectively a new smoking product”.
Streeting prompted dismay from health campaigners in September when he said Labour would not ban buy-one-get-one-free deals on unhealthy food during the cost of living crisis.
The ban on promotions of food high in salt, sugar and fat is seen by some as a crucial part of efforts to reduce obesity rates. It was due to come in last October as part of the government’s strategy, but was pushed back a year.
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Streeting said that delay should have been seen as “an opportunity for the food and drink industry to demonstrate what they will do for the health and wellbeing of the nation without the heavy hand of state intervention”.
Instead, he said, “we see Nestlé introducing new Kit Kat cereal and saying it’s nutritious. I mean, this is just crackers. It’s not serious.”
Charities including the British Heart Foundation said last week that Nestlé’s new cereal was “irresponsible”. Nestlé said the accusation was “wildly unfair” and that it was open to regulation that would incentivise all companies to make healthier products.
Streeting reiterated plans to ban junk food advertising aimed at children both on broadcast media and online by 2025, saying there would be no delay and that industry should “get ready”.
He said the soft drink industry levy was “without doubt one of the most effective public policy interventions on public health under the Conservatives — about one of the only ones”.
The levy, or sugar tax, adds 18p per litre to the price of soft drinks with between 5g and 8g of sugar per 100ml, and 24p per litre to soft drinks with even higher sugar levels.
Streeting said Labour would not commit to any specific charges or levies at this stage because “Labour’s Treasury team wants to look at tax and spending in the round”, but said: “From my point of view, I think we can see the soft drinks industry levy as a successful intervention and a model to follow. And if industry doesn’t like that, well, they’d better pull their finger out and come forward with a very persuasive argument about what they will do without the heavy hand of state regulation.”
Figures released this week showed a 50 per cent rise in the past year in the proportion of children trying vaping, with 11.6 per cent of those aged 11 to 17 saying they had tried it once or twice. Most said they had tried disposable vapes bought from corner shops.
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Streeting said society appeared “blind to the fact we have now just addicted a whole generation of children to nicotine with really significant consequences for their health, and for their wellbeing”.
He said that although he was convinced of the benefits of vaping as a tool to quit smoking, “this is still a harmful product”, adding: “And the fact that the government have allowed this product to be not just sold to children but to allow younger generations to become hooked on nicotine, I think is a total failure of public policy.”
He said teachers had told him about children in classrooms “distracted and agitated” because of the need to vape.
Deborah Arnott, the chief executive of the charity Action on Smoking and Health, said it was important to note that vaping was much less harmful than smoking. She said: “We need to communicate the risks accurately so that adult smokers realise vaping is much less risky, while addressing the marketing and promotion that is helping drive the growth in youth vaping.”
Streeting said he saw the role of health secretary as leading public health improvement efforts across government, with the party talking about initiatives such as joining up health and job centre services “so that people can receive better advice about getting back into work in a more holistic way, and actually a more engaging way than they do and what can sometimes feel like the hostile environment of the job centre”.
He also said social care should not be a battleground during the next general election. He said: “I think the best contribution we could make as politicians is not to torpedo each other’s proposals and ideas on this and to try and build consensus as best we can.”
The Times investigates the crisis facing the health and social care system in England. Find out more about The Times Health Commission
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Consumer & Retail
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Cyprus has vowed to tighten controls on its financial sector as an investigation published by the Guardian and its reporting partners reveals oligarchs transferred hundreds of millions in assets while sanctions loomed after the Russian invasion of Ukraine.
The role of the blue-chip accountants PwC Cyprus and other advisers in managing transactions as Vladimir Putin’s forces launched their assault has emerged from Cyprus Confidential, a cache of 3.6m files leaked by an anonymous source to the International Consortium of Investigative Journalists (ICIJ) and Germany’s Paper Trail Media, which shared access with the Guardian and other reporting partners.
The largest ever financial data leak from Cyprus also sheds light on how opaque offshore structures managed by accountants and corporate service providers in the EU member state may have enabled undisclosed payments to an influential western journalist, and potential breaches of rules around football club financing.
The Cypriot government has responded by promising a “zero-tolerance approach” to sanctions violations as it battles to safeguard its status as a financial centre.
In response to detailed questions from the consortium, a spokesperson said Cyprus was receiving technical support from the British government to create a sanctions implementation unit next year, with plans to be submitted this month alongside a report on how its authorities investigate and prosecute financial crime. It has also joined an EU cross-border project on making sanctions effective.
The exact rules around timing and enforcement of the sanctions against Putin and the officials, politicians and business leaders close to his regime is now under scrutiny, both within Cyprus and around Europe.
The president, attorney general, key cabinet members and officials were briefed at a high-level meeting last week over the country’s progress on implementing tighter controls. The Cypriot government spokesperson, Konstantinos Letymbiotis, said: “The strategy of our government, who took office in March 2023, is of zero tolerance on matters concerning sanctions evasion and law violation, and by extension, to safeguard the country’s name as a reliable financial centre. I would like to stress that our government is unequivocally committed to fighting corruption and illicit finance and take all necessary actions to ensure full implementation of EU sanctions.”
The leak reveals the scale of Cyprus’s role as a gateway into Europe for the Kremlin-connected elite. Among the 104 Russian billionaires Forbes magazine identified in 2023, two-thirds appear alongside family members as clients of the island’s professional service providers. There are records relating to 71 Russian clients who have come under sanctions since February 2022. Many of these relationships have since been terminated, advisers say.
The Cyprus Confidential files reveal:
PwC Cyprus and other advisers helped one of Russia’s most powerful oligarchs, Alexei Mordashov, attempt to transfer £1bn in a public company on the day he was placed under EU sanctions. The Guardian has been told the transfer is subject to an “ongoing” criminal investigation in Cyprus.
€600,000 of undisclosed payments from companies linked to the same oligarch to an influential German journalist, considered a leading expert on Russia, to support the publication of two books about Putin.
Tens of millions in offshore payments made by Roman Abramovich during his ownership of Chelsea football club to agents, scouts and club officials that may have breached strict football rules on accounting and financial fair play.
Undisclosed agreements that allowed Abramovich and the super-agent Pinhas Zahavi to control the careers of 21 young footballers under controversial third-party ownership arrangements, which have been compared to bonded labour.
After being approached for this report, the Cyprus finance ministry said it had launched a criminal investigation into the transfer of Mordashov’s stake in Europe’s largest tour operator, Tui. The tycoon’s name appeared on the EU’s sanctions list on 28 February 2022, with documents appearing to show his advisers attempted to transfer his £1bn stake to Marina Mordashova, who is reportedly his life partner, on the same day.
A spokesperson for the ministry said: “We are aware of Tui share transfers and a criminal investigation is being carried out.”
Tui is one of the largest companies listed on the London and Hanover stock exchanges, and details of the transfer, which represented about a third of the company’s shares, were declared in stock market filings beginning on 4 March 2022.
A spokesperson for Mordashov said he and his companies had always acted in line with “fair business practices and strict compliance with the regulations”. They added: “All information and regulatory notifications with respect to the share transfer were duly disclosed to the relevant authorities and made public to the extent legally required short after the share transfer, which clearly demonstrates that there was no intention to hide something or to circumvent the laws.”
A spokesperson for PwC said: “Any allegation of non-compliance with applicable laws and regulations is taken very seriously, investigated and appropriate action is taken if necessary.”
Mordashov and PwC said they were unaware of the criminal investigation. The Guardian has seen no evidence of any intention to break rules.
The EU’s decision to place Mordashov under sanction was confirmed by a judgment in September, according to the European court of justice, but the oligarch can appeal again.
The leaked documents, which date from the mid-1990s to April 2022, show nearly 800 companies and trusts registered in tax and secrecy havens that were owned or controlled by Russians who have been placed under sanctions since 2014, when Russia annexed Crimea. These include more than 650 Cyprus companies and trusts.
Nikos Christodoulides, a career diplomat who was elected president in February of this year, has led efforts to bring the financial services sector into line after decades of lax regulation.
His government moved to tighten controls on Russian capital this spring when the US and UK imposed sanctions on 23 Cypriot passport holders and more than a dozen companies registered in Cyprus, including the offshore services firm MeritServus, which was revealed by the Guardian as having assisted Abramovich in transferring his assets to family members just before he was added to the sanctions list.
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Banking & Finance
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The government is still deducting money from people's Universal Credit to pay their utility bills, despite it losing a legal case concerning other benefits.
Last year, High Court judges said a scheme - which allows money to be taken from people claiming benefits to pay energy bills - was unlawful if the claimant had not first consented.
But the ruling did not cover people on Universal Credit and BBC News has found thousands are still having money taken.
The government says the policy is fair.
It said the scheme protected people from the potential "serious consequences" if bills were not paid - including homelessness, disconnection, court action and ultimately imprisonment. But critics say it is unfair.
'Unlawful'
Under the policy, private utility companies and others can apply to the Department for Work and Pensions (DWP) for up to 25% of a person's benefits to be paid directly to them - to repay a debt and meet ongoing usage costs.
However, in September last year, a disabled former Leicestershire police constable won a High Court case against the scheme.
Helen Timson, who was unable to work because of physical and mental health conditions, said deductions had left her unable to pay her rent and at one point she had to cancel an appointment for an NHS cancer scan because she could not afford to pay for a taxi.
She successfully argued it was unlawful to take money without first checking with the claimant that they could afford to repay the amount, or challenge if they owed money at all.
However, while the ruling applied to some people on so-called legacy benefits - such as jobseeker's allowance (JSA) and income-related employment and support allowance (ESA) - it did not apply to Universal Credit.
Following a separate legal change, which took effect in April 2022, households receiving Universal Credit must now be asked to agree to new deductions for ongoing usage costs for electricity or gas. However, the DWP is still not legally required to ask for consent for new deductions for electricity or gas bill that are in arrears, or any water bills.
Latest figures for November 2022 showed around 431,800 automatic deductions were in place from households receiving Universal Credit for utilities bills. A Freedom of Information request by BBC News has found 221,000 of those were for arrears.
Ms Timson said she had faced deductions several times without her consent, including when an energy company wrongly deducted £80.80 a month for a year-and-a-half for a non-existent debt up until 2019. She had already settled and closed her account with the company.
She told the BBC the scheme was "fundamentally wrong". She said: "Can you imagine the uproar if banks handed over customers' savings at the request of utility companies or employers handed over wages," Ms Timson asked.
"The DWP have wasted more taxpayer money defending the indefensible again at court, in the hope the DWP can remain taxpayer-funded debt collectors for utility companies."
In June, the DWP lost an appeal against the High Court ruling and is now allowing people the chance to submit representations before new deductions are made from legacy benefits.
However, it says it does not plan to retrospectively seek consent from anyone already having money deducted.
The DWP also confirmed it did not make any money from administering third party deductions and the final costs of contesting the judicial review and appeal with Ms Timson were not yet known.
Counselling and money advice service, Noah's Ark Centre, in Halifax, says it has helped more than 1,500 people across Calderdale since 2017 who had money taken from their benefits.
Of those, 84% were for utilities bills.
Andrew Sykes, a volunteer at the service, says he saw an "explosion" in deductions when Universal Credit was introduced fully in the area.
"Every client that comes through our doors is suffering anxiety in one form or another," Mr Sykes said.
"We get lots of referrals where people are threatening suicide. Money and debt problems are destructive and really shouldn't be underestimated."
Mother-of-three Chelsea Elliman says she faced deductions of £114.10 a month from her Universal Credit payments - most of which was to pay arrears to a water company and for her ongoing usage.
"I'd not given any consent, I'd not spoken to anyone and when I realised it was coming out, no one had sat me down and said 'can she afford to pay this?'," Miss Elliman, 27, said.
"I was resorting to a food bank. I wasn't eating. I was eating bits and scraps from the table the children didn't eat."
Jonathan Bean, from Fuel Poverty Action, said unexpected deductions from people on the breadline risked sending them into "a cash flow crisis". He said it would not help people cope with multiple unpayable bills.
Duncan Shrubsole, from Lloyds Bank Foundation, which supports around 600 charities, said: "The policy is harmful. Alongside other charities we have called for government to reduce the overall maximum deduction rate to 15%."
The DWP said safeguards were in place to allow claimants to dispute deductions and ensure payments were "manageable" including the ability to submit an appeal, called a mandatory reconsideration.
It said people claiming Universal Credit were notified in advance, via their online account, and letters were sent to people receiving legacy benefits before third party deductions were applied, stating how to challenge them.
A spokesperson said the DWP had reduced its standard cap on deductions in Universal Credit "twice in recent years" to 25%.
What to do if I cannot pay my debts
- Talk to someone. You are not alone and there is help available. A trained debt adviser can talk you through the options. Here are some organisations you can contact.
- Take control. Citizens Advice suggest you work out how much you owe, to whom, which debts are the most urgent and how much you need to pay each month.
- Check you are getting the right money. Use the independent MoneyHelper website or benefits calculators run by Policy in Practice and charities Entitledto and Turn2us.
- Ask for breathing space. If you are receiving debt advice in England and Wales you can apply for a break to shield you from further interest and charges for up to 60 days.
Tackling It Together: More tips to help you.
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Personal Finance & Financial Education
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African mobile video network StarNews Mobile has secured $3 million in pre-Series A funding. StarNews offers African content creators a platform for monetizing their work through a subscription model. Currently, the service is available in six African countries, including Cameroon (where it started), Nigeria, Ghana, Congo, Benin and Ivory Coast.
Founder and CEO Guy Kamgaing launched the startup in 2017. His inspiration for this venture draws from his extensive 10-year experience in content monetization, particularly within the VAS (Value-Added Services) business. During this period, he actively participated in text/SMS-based campaigns and monetization endeavors, which provided the foundation for StarNews.
The five-year-old mobile video network prioritizes offering monetization avenues for African content creators through distribution partnerships with major telecommunications operators like MTN and Orange. Content creators often face challenges in generating revenue due to limitations on existing streaming platforms. As a result, StarNews connects them to mobile users who often lack access to relevant content due to expensive mobile data plans and a shortage of services tailored to local markets. A win-win for both parties.
“I realized that while I could monetize jokes and horoscopes via telcos for several years, no one was monetizing content on the traditional platforms, especially in Africa,” said the Los Angeles-based Cameroonian entrepreneur to TechCrunch. “There are thousands of creators online that don’t make money on YouTube or other platforms. So it was just putting two and two together, saying, ‘Well, this content is here that no one knows about and is very difficult to get the audience on YouTube and search, but I can help creators make money because I have a relationship with the telcos.’”
Mobile operators are pivotal in propelling content within Africa’s media industry, with unmatched distribution capabilities. Collaborating closely with these operators is imperative for establishing a solid presence in the market. Over the past few years, these operators have been instrumental in driving data usage across the continent, simultaneously upselling their customers with in-house content or partnering with entities like StarNews. To draw a parallel, Kamgaing stated that you can think of Orange as the “Apple” of Africa’s telecommunications world and MTN as the “Google.”
Connecting mobile subscribers to local content creators
StarNews boasts an active subscriber base of over 4 million through its partnerships with MTN and Orange across six markets (it exited South Africa after a misalignment with MTN’s strategy for engaging content creators) and a community featuring more than 120 content creators. This approach has enabled StarNews to organically expand its user base while securing nearly $8 million (including a $900,000 friends and family round, a $2 million seed investment and a $1.8 million extension) funding from an array of U.S., European and African VCs, including Investisseurs & Partenaires (I&P), Snap via its Yellow Accelerator program, LoftyInc Capital, Graph Ventures and Expert Dojo.
The platform is structured around channels, with each creator having a dedicated channel. Kamgaing says the company works closely with creators by providing financial support and assisting in content production; additionally, it guides the creators in their digital journey, offering support in digital acquisition. As previously highlighted, a significant portion of the company’s user acquisition comes through telecom operators, as it’s a seamless process for, say, MTN to send messages encouraging its customers to sign up to Star News to watch social media personalities, including music artists, comedians and influencers. For users, the sign-up process is streamlined for convenience, followed by a straightforward payment mechanism, allowing them to pay using their airtime; this works across six different networks, each offering users various bundles, weekly subscriptions and daily plans.
In addition to content produced by creators, StarNews features deeply hyperlocal content, spanning topics such as motorbike taxis in Cameroon or food recipes in Ivory Coast. The platform also hosts genre-specific shows, including the footballing competition African Cup of Nations and a program modeled after a singing reality competition, The Voice. StarNews leverages its partnerships with telecom operators to raise awareness and significantly boost user activations for these shows. For instance, in the 2021 edition of the African Cup of Nations (AFCON), the platform actively produced exclusive content straight from the event, resulting in the acquisition of 600,000 new users. Furthermore, the company sponsors concerts, and at one point, it attracted an impressive 500,000 subscribers by offering them the chance to attend a Fally Ipupa concert.
These initiatives highlight the power of strong partnerships, where telcos take the lead, followed by content creators or show organizers, Kamgaing, an ex-PwC consultant, remarked. According to him, this dynamic results in an influx of eager users to access the content or engage with the telco’s activities while positioning StarNews remarkably well to oversee content distribution, monetization, and creation effectively.
“Production without distribution is tough and tougher without monetization. There are a lot of people creating content, but they’ll put it on YouTube and Instagram, platforms that control the distribution. There’s no real monetization. We’re able to have all three layers at the local level. We have offices in all the markets and the teams there are specifically working with creators on content production, which is unique,” said the chief executive, while adding that the platform’s content spectrum has expanded to establish significant partnerships with the likes of Sony and Universal in the region.
Opportunity in Africa’s creator economy sector
Among its markets, StarNews has observed the most impressive retention rate in Nigeria, a market that exhibits all the right metrics for exponential growth, according to Kamgaing. Acquiring users is relatively straightforward, and the platform enjoys strong user engagement and stickiness; moreover, monetization is thriving, he said. StarNews employs an internal metric to gauge monetization, known as the billing rate. This metric represents the number of individuals who have sufficient available airtime to pay for digital services; notably, the billing rate is three times higher in Nigeria compared to the Francophone markets.
Kamgaing revealed that the platform distributed $1 million to content creators last year while maintaining an average monthly payout of around $70,000 to these creators. The fresh injection of capital serves as a significant uplift for Africa’s creator economy, an underserved sector in African tech (despite that startups like e-commerce-focused Selar are holding their own). This funding will equip the Los Angeles-based company, currently with 40 employees, to better support its creators and gradually enhance payouts in the coming years, a crucial step in bolstering the region’s creative industry.
Additionally, in a press statement, Kamgaing outlined the startup’s expansion plans, noting its intent to strengthen its dominant presence in Francophone Africa while quickly expanding across strategic markets like Nigeria and Ghana. StarNews is looking to be in 11 markets by next year, the chief executive remarked on the call.
Janngo, an Africa-focused venture capital firm, led the pre-Series A funding round. Other notable investors, such as soccer players Aurelien Tchouameni of Real Madrid, Jules Kounde of Barcelona and Mike Maignan from AC Milan, all affiliated with athlete representation agency Excellence Sport Nation, participated in the round. Kamgaing, in the interview, highlighted the shared African heritage of these players, underscoring their connection to StarNews’ mission and their genuine interest in engaging with the African audience and investing in startups across the continent. These French soccer players now join the ranks of investors like Blaise Matuidi, a former French international who has previously invested in Sudanese fintech company Bloom and currently heads Origins, a VC firm in collaboration with other soccer players who serve as limited partners.
Fatoumata Bâ, founder and executive chair of Janngo Capital, affirmed the firm’s support for StarNews, accentuating the platform’s unique positioning, strategic partnerships, technology and content. This support is rooted in the belief that StarNews is well-positioned to capitalize on the immense growth potential of Africa’s creative industry, which is poised for a fourfold expansion by 2050 and the possibility to generate up to $20 billion in GDP, she said.
“I am very excited and proud to back StarNews, the first media platform that supports African creators and tells the world the real African story,” added Fernand Tchouameni, spokesperson and investment advisor for Aurelien Tchouameni. “Being of Cameroonian descent, I can also see StarNews becoming a bridge to connect with the African diaspora, and I personally look forward to being on it.”
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Africa Business & Economics
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(Bloomberg) -- Canadian financial group Fairfax Financial Holdings Ltd. offered to buy out minority shareholders of agriculture technology firm Farmers Edge Inc. at a price that would crystallize near-total losses for any longer-term holders of the stock.
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Fairfax’s takeover bid of 25 Canadian cents a share is almost 99% below the C$17 a share at which Farmers Edge offered stock in a March 2021 initial public offering.
Farmers Edge uses technology to analyze weather, soil moisture, satellite data and other information to help farmers plan crops. The IPO happened in an environment when ultra-low interest rates had opened public markets to speculative ventures; the Winnipeg, Manitoba-based company briefly enjoyed a stock market value of about C$835 million ($609 million).
But its growth plans never came to fruition and, in fact, the business has been shrinking, reporting just C$4.4 million in revenue in the third quarter. It has been consistently burning cash.
Fairfax, a Toronto-based investment and insurance company, already owns 61.4% of Farmers Edge. Fairfax has been helping to keep the company afloat by extending a credit line.
Takeover discussions are at a preliminary stage and no decision has been made on a potential transaction, Farmers Edge said in a statement Thursday night. The thinly traded shares rose as high as 24 Canadian cents Friday on the Toronto Stock Exchange, more than double Thursday’s closing price.
It’s the second time this week a Canadian technology company that went public in 2021 attracted a takeover bid far below its IPO price. Q4 Inc. agreed to a C$6.05-per-share cash takeover from Sumeru Equity Partners. It went public at C$12.
(Updates shares in sixth paragraph.)
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Stocks Trading & Speculation
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Senate Republicans failed in their efforts to pass a resolution to overturn President Biden’s new student loans income-driven repayment (IDR) plan Wednesday.
All present Republicans and Democratic Sen. Joe Manchin (W.Va.) voted in support of a Congressional Review Act (CRA) resolution that would have halted the Saving on Valuable Education (SAVE) IDR plan, ultimately falling one vote short of the 50 needed to overturn the plan.
The CRA makes it so only 50 votes would have been needed to pass the resolution instead of the 60 that is typically needed to beat a filibuster. The final tally of Wednesday’s vote was 50-49 against the effort, with Republican Tim Scott (S.C.) the lone senator not voting.
“This is irresponsible. This is deeply unfair,” Sen. Bill Cassidy (R-La.), ranking member of the Senate Health, Education, Labor and Pensions (HELP) Committee, said of Biden’s plan before the vote.
The SAVE plan is being implemented in two parts. This fall, borrowers are seeing a rise in income exemption for student loan payments from 150 percent to 225 percent above the federal poverty guidelines. Borrowers will also not see their unpaid interest grow.
Next year, borrowers will receive other benefits such as monthly payments getting cut from 10 percent of discretionary income to 5 percent.
Republicans highlighted that the plan will cost taxpayers $559 billion, saying individuals who never went to school or already paid off their student loans would wind up paying for others.
Previously, opponents in both the Senate and House were able to pass a CRA measure against Biden’s broader student debt relief program before the plan was struck down by the Supreme Court over the summer, but that resolution was ultimately vetoed by the president.
Democratic Sens. Manchin and Jon Tester (Mont.) and Independent Sen. Kyrsten Sinema (Ariz.) all voted in support of the resolution to stop the student debt relief plan back in June.
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Banking & Finance
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WASHINGTON, July 14 (Reuters) - U.S. President Joe Biden's administration will cancel $39 billion in student debt for more than 804,000 borrowers, the Education Department said on Friday, describing the relief as the result of a "fix" to income-driven repayment (IDR) plans.
Borrowers will be eligible for forgiveness if they have made either 20 or 25 years of monthly IDR payments, the department said. The IDR program caps payment requirements for lower-income borrowers and forgives their remaining balance after a set number of years.
The department said the relief addresses what it described as "historical inaccuracies" in the count of payments that qualify toward forgiveness under IDR plans.
"For far too long, borrowers fell through the cracks of a broken system that failed to keep accurate track of their progress towards forgiveness," Secretary of Education Miguel Cardona said.
Biden has said he will pursue new measures to provide student loan relief to Americans after the Supreme Court blocked his plan to cancel hundreds of billions of dollars in debt.
The Education Department has launched a regulatory "rulemaking" process to pursue his $430 billion loan relief plan. That process is expected to take months.
Friday's relatively smaller relief falls under a separate, payment count adjustment program that the Biden administration announced in April last year, the department said.
In a statement, Vice President Kamala Harris said the administration "will continue to fight to make sure Americans can access high-quality postsecondary education without taking on the burden of unmanageable student loan debt."
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Banking & Finance
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Image source, Grace BurtonImage caption, Grace Burton says her spending on nights out could be "embarrassing"With the cost of living crisis, the price of alcohol has increased along with so many other products.It's prompted some to turn their backs on boozy weekends and nights out, opting for sobriety over spending.Student Grace Burton says she would spend up to £60 on a night out and since she stopped drinking in October she has more to spend elsewhere.And it's not just a financial choice - she and others who have gone sober say their wellbeing has also improved."As a student especially, I felt like so much of my student loan was going towards going out and socialising," says 22-year-old Grace. "And a lot of that was drinking."Figures show that the amount you'd spend on a night out is increasing at its fastest rate since 1991 with all alcohol prices on the up.For Grace, the £50 to £60 she'd spend in pubs, bars and clubs could buy her two weeks' worth of groceries.Image source, Getty ImagesImage caption, Inflation means the cost of a night out is increasing at its fastest rate for 30 yearsThe third-year University of Bristol student says she's embarrassed to think of how much she would spend on nights out, which she realised she wasn't enjoying."You'd wake up and check your bank account and realise that you'd bought a round a VKs for a bunch of people you don't know," she says."I really appreciate not having that anymore."She says most of her friends supported her decision to go sober, but it made her realise how "ingrained" drinking is in society, particularly at university."There's such like a prickliness to it sometimes," she says about when she explains she's not drinking, but alcohol free alternatives help her feel like she's not missing out. As well as freeing up more cash to cushion rising prices, Grace, who is originally from Canterbury, says she's also able to spend more on things she enjoys, like meals out with friends. "That money's probably still being spent but it's just being redirected and spent in a nicer way," she says.Image source, So ShaImage caption, So Sha said alcohol became part of her lifestyle working in clubsBy not going out, artist and DJ So Sha says she could save enough money a month for three big shops. Sha grew up in the Philippines and after discovering a love of electronic music, she ran her own club there in her early 20s before moving to the UK.Performing in bars and clubs, Sha says alcohol was "part and parcel of what I do" and she noticed she was using it as a crutch."I'm the party starter - it was my job, literally I'm the party promoter," she says. So when she decided to quit drinking, "it was very confusing for some of my friends".While money wasn't the main reason she decided to stop drinking, she says she can't believe how much she's saving as a result.For both Sha and Grace, giving up sparked questions from their friends but generally they say people have been supportive of their decisions."There's this sense of I'm going to be different, I'm going to be left out," Sha says. "But some people were like, actually, you know what, me too."Before going sober, Sha spent hundreds every month on drinking but also on getting ready for nights out, buying new outfits and getting her hair and nails done."When alcohol is involved, usually it's an event," she says. For 10 months, Sha was homeless in London, relying on house-sitting for somewhere to stay. She says struggling to pay her rent took a toll on her mental health.Now living in Norwich, she says going sober has also helped her improve her wellbeing and has made her question her spending more generally."I see a ripple effect in terms of, do I really need to buy this thing, for example, buy this dress, buy the shoes, and then you save money," she says.Image source, EMILY METCALFEImage caption, Millie Gooch founded Sober Girl Society, an online community with hundreds of thousands of followersMillie Gooch was 26 when she also decided to stop drinking in 2018, but like Grace it was at university when she started to reconsider her relationship with alcohol. "I was your classic party girl binge drinker," she says. "I often wouldn't remember a lot of my night."Stopping drinking was a lonely experience and after struggling to find a community she felt would suit her, Millie decided to set up her own and now Sober Girl Society has almost 200,000 followers on Instagram."I really wanted a space where we could discuss non-alcoholic wine or how do you go on a date sober," says Millie. "So I started it and it just blew up from there. I never expected that it was going to be this big thing, or it was going to be my full time job."Sober-curious? Tips for cutting the boozeBefore you go out, set a limit for how much you're going to drink and a budget for your spending on alcohol.Tell your friends and family that you're trying to cut down.Take it steady - try cutting back a little more every time you drink.Mix up your habits, order a small glass or a half-pint instead and alternate alcoholic drinks with soft ones.Millie says she's noticed an uptick in the number of people cutting down on drinking as a result of the cost of living crisis.Pubs have reported this too - with reports that a combination of inflation, staff shortages and lower customer spending may leave pubs and bars struggling to survive."We are definitely noticing that it is one of the things to go because it is just getting more and more expensive for people," Millie says."I think what they're realising is that they really need to look at where they're spending their money and are they spending on things that really make them happy."If you've been affected by the issues raised in this article, help and support is available via BBC Action Line. Follow Newsbeat on Twitter and YouTube.Listen to Newsbeat live at 12:45 and 17:45 weekdays - or listen back here.Related Internet LinksThe BBC is not responsible for the content of external sites.
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Inflation
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Organized crime rings in New York, San Francisco, Los Angeles and Houston are targeting retail inventories, causing more financial loss, according to a report by the National Retail Federation, a trade group representing US retailers.
Big-box retailers such as Target and Kroger as well as dollar stores have sounded caution over increasing inventory theft and organized retail crime that could worsen this year’s headwinds from weakening consumer demand.
In 2022, inventory “shrink” as a percentage of total retail sales accounted for $112.1 billion in losses, up from $93.9 billion in 2021, according to the NRF report on Tuesday.
“Retailers are seeing unprecedented levels of theft coupled with rampant crime in their stores, and the situation is only becoming more dire,” said NRF Vice President for Asset Protection and Retail Operations David Johnston.
Retailers are either being forced to close a specific store location, reduce operating hours or alter in-store product selection to deal with the spike in retail crime, the report added.
Dollar Tree has said it plans to remove goods like men’s underwear, an item most prone to retail theft, from its stores.
Retailers are ramping up prevention methods with 34% of respondents increasing internal payroll to support risks related to retail crime and 46% increasing the use of third-party security personnel among other methods, according to NRF.
Even Britain is seeing more instances of shoplifting with the fashion chain Primark stepping up spending on security guards, CCTV and equipping staff with body cameras to try and combat in-store theft.
Walmart CFO John Rainey on a post-earnings call with Telsey Advisory Group said the retailer was “putting armed guards in certain cases” in some stores located in cities.
The NRF survey was conducted online among senior loss prevention and security executives in the retail industry with insights from 177 retail brands.
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Consumer & Retail
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KEY POINTS
- If you want to be rich, it can be helpful to do what wealthy people do.
- Many people who are wealthy use debt as a tool to increase their net worth.
- Rich people also often have multiple income streams, so they aren't reliant on one source of money.
If you want to be rich, it can be helpful to do things that millionaires and other wealthy people are doing. Fortunately, identifying the habits of financially successful people doesn't have to be hard. Here are four rich people habits you should copy.
1. Use debt as a tool
Wealthy people are not afraid of debt. They understand that it can be used as a tool to help them use their money as wisely as possible and increase their net worth.
Many wealthy people borrow money to do things like start businesses or invest in real estate. They also borrow when they can do so at a low rate, rather than tying up their cash in something that doesn't provide a very good return on investment.
For example, Warren Buffett got a mortgage when he bought his home even though he could have paid cash -- because he wanted to invest his money instead. He borrowed about $120,000 in 1971 (in the form of a mortgage loan) and invested the money instead of paying cash for the home. The invested funds ended up being worth around $750 million.
Rather than being afraid of borrowing, be smart about when and how you use debt. For example, it makes sense to take out a mortgage to buy a home rather than paying cash because your home is an asset that should increase your net worth, and the mortgage interest rate will usually be lower than the return you could get with other assets like stocks.
But it does not make sense to put a vacation on a credit card, as you'll just be incurring interest for something that doesn't increase your wealth in the long run.
2. Prioritize investing
Research has shown wealthy people save at higher rates. This doesn't apply to people who were born rich either. Wealthy people with "new money" tend to have even higher savings rates and earn higher returns.
When you prioritize investing, you can grow wealthier much more easily because your money is working for you. You don't have to earn every $1 that grows your net worth. Your money can earn returns, which can be reinvested and earn even more for you.
If you invest $10,000 today and earn a 10% average annual return, that $10,000 will be worth $174,494 in three decades even if you never add another dollar to your account. That's a lot of money you didn't have to personally earn.
The more you invest, the more you benefit from compound growth and the easier it is to get rich -- since less effort is required from you to make money. Open a brokerage account today if you want to build wealth. If you're not sure what to invest in, an S&P 500 index fund is a pretty smart bet.
3. Develop multiple income streams
Many rich people have multiple sources of income. Their money may come from a job, but also from investment income or other sources. If you are dependent solely on one job, unemployment could leave you without funds and the ability to build wealth. You're also limited in how much you can earn since you only have so much time to work.
But if you develop multiple income streams, your finances are less precarious and you can also earn money in multiple ways. You can develop multiple income streams by:
- Taking on a side hustle
- Turning your hobbies (such as crafting or dog walking) into a source of income
- Investing in assets that provide dividends
- Buying investment real estate
Consider where your interests are and how you can make money outside of work to help your wealth grow.
4. Set long-term goals
Finally, many wealthy people look toward the future when deciding on spending decisions. While a vacation or impulse purchase today may seem fun, it's better to look at the big picture, consider what you want to accomplish, and prioritize it.
When setting your own goals, employ the SMART principle. Your goals should be specific, measurable, achievable, relevant and time limited. For example, you could set a goal to save $500 a month toward retirement over the next year and track your progress throughout the year.
By adopting these four habits, hopefully you too can become wealthy. I've tried them all, and they've made a noticeable difference in helping my net worth grow.
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Personal Finance & Financial Education
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- Just one month before the holiday season kicks into high gear, 60% of adults said they are living paycheck to paycheck, according to a new LendingClub report.
- Yet consumers still plan to overspend during the holidays, other reports show.
- We are in a period of "hyper-consumption," says Jacqueline Howard, head of money wellness at Ally Bank.
Although inflation is cooling, households are still feeling squeezed.
Overall, 4 in 10 consumers consider themselves worse off relative to 2022, the report found.
The LendingClub report was conducted in October, just one month before the holiday season kicks into high gear.
This year, holiday spending during the Thanksgiving week may hit a record as consumers try to maximize the weekend's deals, according to a 2023 Deloitte Black Friday-Cyber Monday survey. Spending over the week is expected to jump 13% from last year, with shoppers shelling out $567 on average, Deloitte found.
Half of consumers plan to take on more debt to pay for holiday expenses, another report by Ally Bank found. Only 23% have a plan to pay it off within one to two months.
Some 74% of Americans say they are stressed about finances, according to a separate CNBC Your Money Financial Confidence Survey conducted in August. Inflation, rising interest rates and a lack of savings contribute to those feelings.
That CNBC survey found that 61% of Americans are living paycheck to paycheck, up from 58% in March.
Many households have tapped their cash reserves over the past few months, LendingClub and other reports show. More than one-third of consumers plan to dip into their savings even more to cover holiday spending, LendingClub also found.
"While consumers have found a way to manage through inflation, it's concerning that many plan to tap into savings, and even exceed their budgets, to finance their holiday purchases, which may leave them vulnerable to an unexpected emergency," said Alia Dudum, LendingClub's money expert.
Consumers are increasingly adopting a "mentality of hyper-consumption," said Jacqueline Howard, head of money wellness at Ally. That's particularly true over the holidays, when families typically overspend on gifts.
"Hyper-consumption comes from not being mindful," she added. "Consider what makes the most sense in terms of your well-being."
Howard recommends a value-based budget approach when it comes to budgeting for holiday purchases — "if your priorities are family and travel or other experiences, have that guide your spending," she said.
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Consumer & Retail
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On the fifth day of Sam Bankman-Fried’s fraud trial, the prosecution’s star witness is set to take the stand.
Caroline Ellison is the former paramour and business partner of the FTX founder, at times dating the 31-year-old and also serving as CEO of Alameda Research, the hedge fund closely associated with the failed cryptocurrency exchange. She resided with Bankman-Fried and other FTX executives in a massive Bahamas mansion where they all lived, worked and managed the company. She is slated to testify today in what could be the most damning picture yet of Bankman-Fried’s alleged financial scheme, described by prosecutors as one of the largest in US history.
The day begins with testimony from Gary Wang, an FTX co-founder who first took the witness stand last week and has pleaded guilty to wire, securities and commodities fraud. Wang testified that Bankman-Fried was not surprised to find that FTX faced enormous financial shortfalls when the exchange’s collapse began in 2022. Bankman-Fried faces seven counts of fraud and conspiracy charges in the trial. He has pleaded not guilty.
During Wang’s cross-examination, the defense attorney Christian Everdell posited that Alameda’s financial situation and its operations were not as dire as prosecutors had presented. Everdell stated that Alameda used only a fraction of its massive line of credit with FTX. He also questioned Wang on the company’s own crypto coin, FTT, which prosecutors have alleged Bankman-Fried used to cover up Alameda and FTX’s financial failings. As the cross-examination continued, Everdell pressed Wang on the decisions Ellison made as Alameda’s CEO, asking about whether she had insulated the fund from market shocks.
Ellison cut a deal with federal prosecutors in late 2022, pleading guilty to two counts of wire fraud and multiple financial conspiracy charges. Federal lawyers implied in the trial’s opening statements that her cooperation with them has been extensive. Ellison said in plea proceedings that she had “agreed with Mr Bankman-Fried and others to provide materially misleading financial statements to Alameda’s lenders”. Prosecutors allege Bankman-Fried and those in his inner circle used money from FTX customers for Alameda’s investments and trades, which led to an $8bn shortfall at FTX after the value of nearly all cryptocurrencies plummeted in 2022. The exchange eventually filed for bankruptcy.
Bankman-Fried’s defense appears likely to paint Ellison as a scorned lover and an incompetent businesswoman. His attorneys have questioned witnesses about a request from the entrepreneur for Alameda to place a hedge to protect against a market downturn that she did not follow. Bankman-Fried himself has leaked documents about her to the press. Judge Lewis Kaplan revoked the FTX founder’s bail and sent him to prison after entries from Ellison’s journal were published in the New York Times, finding probable cause for allegations of witness tampering.
Bankman-Fried’s defense attorneys have attempted to cast him as a simple, wayward boy genius who never intended to hurt anyone. One of his lawyers called him “a math nerd who didn’t drink or party”. The prosecution, by contrast, has depicted Bankman-Fried as a greedy svengali who manipulated his business associates for his own financial gain – and $10bn in fraud.
Adam Yedidia, an FTX developer who was close to Bankman-Fried, testified last week: “Sometime in early 2019, the defendant told me that he and Caroline had had sex and asked if it was a good idea for them to date.”
When a prosecutor asked what he thought of the arrangement, Yedidia said: “I said no.”
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Crypto Trading & Speculation
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We all know that America is different. But last week’s revised growth figures for the third quarter underlined this point. At an annualised rate, the economy was shown to have grown by 5.2pc which, excluding the pandemic period, was the fastest pace of growth since 2014.
What a contrast with the lacklustre performance of the UK economy and indeed much of Europe. What explains current US economic strength?
One thing that currently sets America apart is President Biden’s 2022 Inflation Reduction Act which, despite the misleading name and its unfortunate acronym, IRA, mostly comprises a package of subsidies for clean energy. They are worth about $370bn over a decade.
Yet the overall effect of this package over 10 years is supposed to be fiscally contractionary. Nevertheless, the subsidies have contributed to a boom in high tech industries, and helped to sustain growth of business investment which has been a significant contributor to the economy’s recent strength.
By contrast, as you might expect in current world conditions, net exports have not been a contributor to the economy’s recent strength. The current account of the balance of payments is in deficit to the tune of 3pc of GDP.
The overwhelming source of the economy’s strength is consumers’ expenditure. It is usually difficult to keep the American consumer down. Even so, the current strength of consumers’ expenditure is somewhat surprising. In the third quarter it was up at an annualised rate of almost 4pc, compared to 0.8pc in the second quarter.
You might think this is especially surprising because of the negative impact from the huge rise in interest rates. Official short rates have risen by 5pc in record quick time. Moreover, long government bond yields, which determine the cost of most mortgages, have risen by a huge amount as well.
But here we come up against another of the factors that marks out America as being different from almost anywhere else, namely the prevalence of long-term fixed rate mortgages.
Whereas in the UK, when we say fixed rate, we usually mean rates fixed for something like three years or, at most, five. In America it is normal for mortgages to have rates that are fixed for 30 years. For all those homeowners with such mortgages, increases in official interest rates and bond yields have had no impact on their mortgage payments.
Even so, this does not quite explain the resilience of overall consumer spending because it ignores the position of new borrowers. Over the last year, they have had to borrow at rates that were fixed for 30 years at a far higher level than earlier.
Only very recently have long bond yields, and hence mortgage rates, started to come down appreciably. The result is that over the last year, mortgage payments have increased by 7.6pc, roughly the same as the increase in rents.
Admittedly, as in the UK, the labour market remains strong, even though employment growth is slowing. Unemployment is creeping up a bit but it is still extremely low. And consumers’ net wealth is still close to a record high.
The recent sharp fall in inflation, which in October dropped to 3.2pc, down from a peak of 9.1pc in the middle of last year, will help. With average earnings increasing at 4.1pc, this means that real incomes are now rising. But over the third quarter as a whole, real earnings were unchanged.
The biggest single factor behind the strength of consumers’ expenditure is, believe it or not, the continued influence of the huge sums paid out by the US government during the pandemic.
Over 2020 and 2021, the Government dished out about $5 trillion in covid relief, much of it directly to households. For a typical family of four, this translated into a handout of about $10,000.
As happened in the UK and indeed all of the rest of Europe, initially US households could not spend much of this money. The result is that they built up a substantial holding of excess savings which they have gradually been running down. This is a one-off factor and this boost will end sometime soon. But it seems that it still hasn’t yet run its course.
But the outlook is not rosy. The signs are that the economy is slowing in the last quarter of 2023 and will probably do so further at the beginning of next year. The boost from the enormous Covid stimulus package will soon be running out of steam.
Meanwhile, for those of a monetarist disposition, the money supply figures are screaming danger, with the M2 definition of the money supply having fallen now for most of the last 18 months and registering a contraction over the last year of 3.3pc. I suspect that the US economy may just about avoid a recession but many monetarists would disagree.
Looking further out, if there is a fly in the ointment, it is the fiscal position. In the latest financial year, the US government’s deficit amounted to about 7.5pc of GDP, compared to 5pc of GDP for the UK this year.
Moreover, this follows a run of large deficits which has seen the ratio of US Federal government net debt to GDP rise to 95pc. Not only that, but if the economy goes through a very soft patch in the next year or two, never mind a recession, then the deficit will increase.
Accordingly, there doesn’t seem much prospect of the debt ratio falling back anytime soon. Indeed, the independent Congressional Budget Office reckons that over the next 30 years the debt ratio will rise to 180pc of GDP.
For a normal country, this would be dangerous territory.
Admittedly, America isn’t a normal country. Because of its size and power, it can get away with things that other countries cannot. Even so, however good the US economic performance looks at the moment, there may be a nasty shock lying out there somewhere in the not too distant future.
Roger Bootle is senior independent adviser to Capital Economics
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Inflation
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Retailers ready to kick off unofficial start of the holiday season just as shoppers pull back
Retailers are kicking off the unofficial start of the holiday shopping season on Friday with a bevy of discounts and other enticements
NEW YORK -- Retailers are kicking off the unofficial start of the holiday shopping season on Friday with a bevy of discounts and other enticements. But executives are growing concerned with a spending slowdown that could temper sales on the day after Thanksgiving as well as throughout the holidays.
Shoppers, powered by a solid job market and steady wage growth, had demonstrated a resilience that confounded economists and ran counter to sour sentiments expressed in opinion polls. Such spending, while cautious, came despite higher prices in the grocery aisle and higher borrowing costs.
But consumers are now coming under more pressure from dwindling savings, increased credit card debt and still stubborn inflation. In fact, shoppers cut their buying in October, ending six straight months of gains. Shoppers have gotten some relief from easing inflation, but many goods and services like meat and rent are still far higher than they were just three years ago.
The latest quarterly results from a string of retailers from Walmart to Best Buy have reported a weakening consumer. Walmart said it noticed shoppers cutting back in October and offered a muted annual sales outlook. Best Buy, the nation’s largest retailer, said shoppers are trading down to cheaper TVs. And Target said shoppers are waiting longer to buy items. For example, instead of buying sweatshirts or denim back in August or September, they held out until the weather turned cold.
“It’s clear that consumers have been remarkably resilient,” Target's CEO Brian Cornell told analysts last week. “Yet in our research, things like uncertainty, caution and managing a budget are top of mind.”
Even luxury retailers are noting their shoppers are feeling pinched.
"We’re taking a measured approach. There’s been some softening,” said Marc Metrick, CEO of Saks Fifth Avenue’s standalone online business, Saks. “I don’t think (the holiday season) is going to be some horrible business nor is it going to be some kind of explosive holiday season.”
The National Retail Federation, the nation’s largest retail trade group, expects shoppers will spend more this year than last year, but their pace will slow given all the economic uncertainty.
The group has forecast that U.S. holiday sales will rise 3% to 4% for November through December, compared with a 5.4% growth of a year ago. The pace is consistent with the average annual holiday increase of 3.6% from 2010 to pre-pandemic 2019. Americans ramped up spending during the pandemic, with more money in their pockets from federal relief checks and nowhere to go during lockdowns. For the holiday 2021 season, sales for the two-month period surged 12.7%.
Many retailers had already ordered fewer goods for this holiday season and have pushed holiday sales earlier in October than last year to help shoppers spread out their spending. An early shopping push appears to be a trend that only got more pronounced during the pandemic when clogs in the supply network in 2021 made people buy early for fear of not getting what they wanted.
But retailers said that many shoppers will be focusing more on deals and will likely wait until the last minute. Best Buy said it's pushing more items at opening price points, while Kohl's has simplified its deals, promoting items under a certain price point like $25 at its stores.
Barbara Lindquist, 85, from Hawthorne Woods, Illinois, said she and her husband plan to spend about $1,000 for holiday gifts for her three adult children, 13 grandchildren and three great-grandchildren. That's about the same as last year.
But Lindquist, who continues to work as a pre-school teacher at a local church, said she’ll be more focused on deals given still high prices on meat and other staples. And she plans to buy more gift cards, which she believes will help her stick to her budget.
“I go for value,” said Lindquist, who just picked up discounted sheets and towels at Kohl's for friends who will be visiting from Panama during the holidays.
Online discounts should be better than a year ago, particularly for toys, electronics and clothing, according to Adobe Analytics, which tracks online spending. It predicts toys will be discounted on average by 35%, compared with 22% a year ago, while electronics should see 30% cuts, compared with last year's 27%. In clothing, shoppers will see an average discount of 25%, compared with 19% last year, Adobe said.
Analysts consider the five-day Black Friday weekend — which includes the Monday after the holiday known as Cyber Monday — a key barometer of shoppers’ willingness to spend. And Black Friday is expected to be once again the busiest shopping day of the year, according to Sensormatic Solutions, a firm that tracks store traffic. On average, the top 10 busiest shopping days in the U.S are expected to once again account for roughly 40% of all holiday retail traffic, Sensormatic said.
Stores have been increasingly pushing Black Friday-type deals all month, helping to perk up business.
Adobe Analytics reported that from Nov. 1 through Monday, consumers spent $63.2 billion online, up 5% compared with the year-ago period and outpacing its estimate of 4.8% for the two-month holiday period.
However, Marshal Cohen, chief retail adviser at Circana, a market research firm, said he thinks that shoppers will just stick to a list and not buy on impulse. He also believes they will take their time buying throughout the season.
“There's no sense of urgency,” Cohen said. “The consumers are saying, ‘I will shop when it’s convenient for me.'”
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Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio
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Consumer & Retail
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"You get very good at lying," David tells me.
"Getting loans for home improvements that weren't for home improvements. Credit cards. Any way I could get money to gamble."
A transport worker from the north of England, David doesn't want to reveal his real name.
His gambling addiction has cost him his marriage, and many thousands of pounds. "It's just a double life," he says, "I've lost enough for a house.
"I was using online casinos, roulette machines, slot machines online. It was always on my phone. I was betting on football live, on horseracing, anything. It could be any time of day."
Now in his 30s, David is getting help and has managed to make it just past 100 days without a bet.
With the government about to announce its planned reforms to gambling laws in Great Britain (it is a devolved matter in Northern Ireland), David wants affordability checks on punters to make sure they have the money to lose.
"I only got asked if I could afford it after I'd spent thousands of pounds," he says. "I just went to another company and opened another account."
Intense lobbying behind the scenes has gone on in recent months, to shape what will be the first significant piece of legislation on gambling in nearly 20 years and since the invention of smartphones.
This white paper has already been pushed back at least four times, with delays caused by changes in prime ministers and the revolving door of the secretary of state for culture (there have been eight in five years).
Last July, the review was in Boris Johnson's Downing Street for approval, the final stage before announcement. Instead, it was shelved as Johnson's premiership faltered.
White Paper: Key battle grounds
- Statutory rather than voluntary levy for gambling firms - campaigners are hopeful this will be implemented after earlier doubts
- Affordability checks for gamblers - a consultation is expected on the level at which these would kick in
- Tighter controls around advertising and marketing - the Premier League is likely to agree a voluntary deal restricting front-of-shirt adverts
- Maximum stakes for online slots - £2 limit expected for each bet
When Tony Blair's Labour government introduced the Gambling Act in 2005, it allowed gambling firms to advertise sports betting, poker and online casinos on TV and radio for the first time.
That legislation predated the arrival of the smartphone a year or two later, a game changer in the world of online betting.
"With online gambling, there are no barriers in place," says consultant psychologist Matt Gaskell, the clinical lead for the NHS Northern Gambling Service.
"Typically, our service users are gambling from the moment they wake up in the morning in their bed. They take their phone into the bathroom with them, they take it in the car.
"They're gambling at work and they're gambling when they return home and they can keep it very secret even from their loved ones."
The NHS has clinics across England treating people with gambling problems, including three clinics in the north of England. The service is expanding further. By the end of the year, there will be 15 NHS centres in England dedicated to gambling.
Gaskell says an industry which has aggressively targeted punters with habit-forming products offering continuous gambling has caused a "significant public health crisis".
He wants the government to introduce a statutory levy on the gambling companies and to develop a public health message.
At the moment, the industry funds research, education and treatment into gambling harm on a voluntary basis.
The Betting and Gaming Council, which represents gambling companies, says its largest members have pledged £100m over four years, and that the set-up is "unlike the alcohol industry, which hands the NHS the bill for problems associated with alcohol".
In recent weeks, behind the scenes, charities and parliamentarians who want changes have been piling on the pressure.
A letter to the chancellor earlier this month from the chair of Peers for Gambling Reform, Lord Foster, and signed by Mr Gaskell amongst others, says the "overwhelming consensus is that the current voluntary funding arrangement lacks consistency, transparency and independence from industry influence".
They want a firewall; at the moment, Mr Gaskell told me, the public health messaging around gambling "is paid for by the gambling industry".
"So it's a rather meaningless, self-serving messaging⦠It doesn't help the public make good, informed decisions."
Gambling in numbers
- Excluding the National Lottery, the gambling industry made almost £10bn before tax in 2021/22
- £6.4bn of that amount came from remote (mostly online) betting, bingo and casino games
- £3.5bn was made from the Land Based Sector, also known as non-remote betting at arcades, bingo halls, casinos and betting shops
- According to the Office for Budget Responsibility, the gambling industry paid £3.2bn in tax in the 2021/22 financial year
- It is estimated that there are between 250,000 and 460,000 problem gamblers in Great Britain
You only need to watch a football match to see how normalised gambling has become - or, as the industry puts it and as many see it, how much fun can be had.
In-play betting has for many fans added extra excitement to those 90 minutes watching your team on the pitch. You can gamble on who will score the next goal, who will get the next penalty, how many minutes there will be of extra time.
Eight Premier League clubs now display gambling firm names on the front of their shirts, after sponsorship deals. There is a similar number in the Championship.
The Betting and Gaming Council told the BBC it supports the Gambling Review to "raise standards and promote safer gambling, but any changes introduced by the government must not drive gamblers towards the growing unsafe, unregulated black market online".
The BGC says the "rate of problem gambling remains low by international standards at 0.3% of the UK's adult population - down from 0.4% the year previous".
It points out that the "overwhelming majority" of the 22.5 million people in the UK who enjoy a bet each month, do so "safely and responsibly".
Campaigners for more regulation say they want to protect problem gamblers and for legislation that keeps pace with technology.
"At the moment, we are probably the country with the most liberal gambling laws in the world," the former Conservative leader Sir Iain Duncan Smith told me.
He's part of the All Party Parliamentary Group on gambling-related harm. They've spent years arguing for more protections especially for children and other vulnerable groups, including forcing gambling companies to pay a statutory levy and a ban on their names on football shirts to "stop thousands of people wandering around as advertising".
"We're not out to stamp out gambling," he says. "We want to have it better regulated so it traps fewer people in spirals of debt."
James Grimes lost £100,000 to his gambling addiction. The 32-year-old, who lives in Stockport, took out 20 payday loans and borrowed from anyone he could.
Despite being on the minimum wage at the time, Mr Grimes says the gambling industry pushed him to keep betting.
"They gave me a VIP box at a Premier league football match. They gave me tickets to the horse race and there would be a £100 free bet in my account every week."
James, who will be five years free of gambling in April, is now the head of education for the charity Gambling With Lives.
"I still get emails from gambling companies saying 'Come back in, here's 100 free spins'. You wouldn't give an alcoholic 100 free shots of vodka if they stopped drinking five years ago. So why do we allow this to happen? It's a form of grooming."
Like John, he was pulled into gambling when he was much younger. He says the impact of potentially addictive gambling products on young brains needs more research.
James wants the white paper to propose stake limits on online gambling, to bring it into line with physical betting.
He also wants restrictions on advertising and sponsorship, "especially in football, which is adored by millions of young people".
The role of the Gambling Commission, which licenses and regulates the industry, is also included in the government review.
A spokesman for the commission said it "creates an opportunity to build on the progress we have made to protect players and the public - such as strengthened age and identity verification, strict new guidance for so-called VIP schemes and banning gambling with credit cards."
John Myers' son Ryan was a football fan. It was only after Ryan took his own life that John and his wife discovered their son was addicted to gambling.
A few months before his suicide, Ryan had even written an email to one of the online gambling firms saying he was "finally admitting" he had a serious gambling problem. John shared it with the BBC.
Ryan wrote: "I've woken up this morning to find out I've pretty much emptied my bank account and don't even remember doing it.
"I know I don't deserve it and can understand if you don't do it but I was wondering if you could find it in your heart to maybe somehow refund some of what I deposited last night and then ban me."
John Myers says he doesn't want gambling banned.
"We want the predatory industry to take some blame⦠we want the government to change the rules around it so they can't be as predatory as they are now."
He hopes the white paper will put in greater protections for future Ryans.
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Consumer & Retail
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Welcome back to Chain Reaction.
To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.
This week in web3
- Stablecoin company Circle going public makes good sense (TC+)
- Faction launches $285M early-stage crypto fund
- LG’s IT arm taps Tiger Global-backed QuickNode for web3 pursuit
- a16z backs London-based crypto startup Pimlico as it ramps up UK focus
- US sanctions Russian accused of laundering Ryuk ransomware funds
The latest pod
Quigley is a former U.S. Marine, now attorney who represents clients on matters related to white-collar government investigations and commercial disputes.
Previously, he was a federal prosecutor as an assistant U.S attorney in the U.S. Attorney’s Office for the Southern District of New York, which we call SDNY. If that rings a bell it’s because one of our previous guests, Josh Naftalis, also had that role.
Brendan has tried more than 12 cases that were brought to verdicts and was a senior member of the Office’s Securities and Commodities Fraud Unit.
We talked about SBF’s verdict and future sentencing as well as how his March 2024 trial for additional charges will pan out.
Follow the money
- Stackr raised $5 million in seed round to help developers build scalable web3 apps
- Crypto and AI-focused Ritual comes out of stealth with $25 million in financing led by Archetype
- StablR raised $3.5 million to build out its euro-backed stablecoin startup
- NFT browsing platform Authentick raised $4 million in seed round
- Llama raised $6 million to help improve crypto protocols and smart contracts
This list was compiled with information from Messari as well as TechCrunch’s own reporting.
What else we’re writing
Want to branch out from the world of web3? Here are some articles on TechCrunch that caught our attention this week.
- With the power of AI, you can be mediocre, too (TC+)
- Secure messaging app Signal moves a step closer to launching usernames
- Robotics funding saw another dip in 2023
- Klarna is inching toward an IPO, and it’s not the only one (TC+)
- New pre-seed funds are popping up everywhere (TC+)
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.
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Crypto Trading & Speculation
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UNIVERSITY PARK, Pa. — Investors in commercial real estate are rethinking the values of coastal properties exposed to flood risk — even in northern U.S. locales that haven’t suffered flood damage, according to researchers. This shift in perspective has implications for investors and developers alike as they determine the value of coastal properties amid a changing climate.
Eva Steiner, associate professor of real estate and King Family Early Career Professor in Real Estate in the Penn State Smeal College of Business, and her co-authors published these findings recently in Real Estate Economics.
Steiner and her colleagues, motivated by the observation that commercial real estate investors and developers are increasingly worried about environmental risk exposures of assets tied to particular locations, set out to study how professional investors capitalized flood risk in commercial real estate markets after 2012’s Hurricane Sandy. They looked at transaction prices of properties with varying degrees of flood risk exposure both before and after this major flood event.
The researchers found, not surprisingly, that New York commercial real estate properties in areas that sustained hurricane damage continued to trade at lower values in the years following Hurricane Sandy.
“Of course there’s going to be a negative effect,” Steiner said. “A lot of buildings were damaged, and in many cases tenants couldn’t occupy the buildings for a while so owners lost rental income. But the more interesting question that we were after is this: If you put those immediate damages aside, did this event trigger a shift in how investors think about risks associated with coastal properties?”
That question led them to look at commercial real estate transactions after Hurricane Sandy in Boston as well as New York. Although Boston didn’t sustain damage from Sandy, it is a location along the Eastern Seaboard that’s considered at risk of flooding in the future. The researchers found a similar pattern of commercial properties in Boston trading at lower values — an effect that can’t be attributed to actual damaged property and is likely because of changes in investors’ perceptions of flood risks, they said.
To strengthen this conclusion, Steiner and her colleagues conducted a placebo test, looking at commercial properties along Lake Michigan in Chicago.
“We wanted to make sure there wasn’t something else about waterfront property that changed how investors feel about these properties,” Steiner said. “Here, there is zero hurricane risk because it’s an inland body of water. We found no pricing effects in this area, so based on the knowledge we have, the effects we see in New York and Boston are likely due to professional investors responding to a persistent shift in perceptions of flood risk post-Sandy, even in locations spared by the disaster.”
To conduct their study, the researchers used data that spanned about 10 years before Hurricane Sandy and five years after.
“Ideally, we would look at two properties, one coastal and one farther inland, that each traded before and after Sandy,” Steiner said. “And we would want to see the price of the exposed property go down after Sandy relative to the price of the non-exposed property.”
But because commercial real estate doesn’t trade very frequently, they matched properties that were similar based on observable characteristics.
Steiner and her co-authors chose to focus on commercial real estate because it provides a clearer, more objective picture than residential real estate.
“When you buy a home, it’s not just an investment,” she said. There is a consumption value — you are going to live in that home, and that may include an element of sentiment as well. And those factors may make you evaluate property risks a little differently from an investor who is just looking at this as a financial proposition, an economic calculation.”
The research results can help inform decisions of both developers and investors as flood risks for coastal properties continue to increase, according to the research team. Developers’ decisions about where to create new real estate assets will be affected by investors who are unwilling to pay top prices for properties that are at risk of flooding. Investors who currently hold properties that may be subject to flood risk can get a better assessment of the potential risks to the values of the assets they have in their portfolios.
“What do we do with those assets that we now know are exposed to these flood risks?” Steiner asked. “There may come a point when these assets will no longer hold much economic value, and these properties may be abandoned, or they may need significant retrofitting to make them more resilient.”
This research was supported by funds from Steiner’s King Family Early Career Chair at the Smeal College of Business.
Co-authors of the research paper are Jawad M. Addoum, associate professor of finance at Cornell SC Johnson College of Business; Piet Eichholtz, professor of real estate finance at Maastricht School of Business and Economics in Maastricht, The Netherlands; and Erkan Yönder, associate professor of finance at John Molson School of Business, Concordia University in Montreal, Canada.
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Real Estate & Housing
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Labour will create the biggest increase in affordable housing "in a generation" if it wins power, deputy leader Angela Rayner has promised.
Ms Rayner vowed to "get tough" with developers who tried to "wriggle out" of their social obligations.
The party would also free up funds for councils and housing associations to build more homes for rent, she said.
Ms Rayner was speaking as Labour gather for what could be their final conference before a general election.
The party arrives in Liverpool in high spirits after winning Rutherglen and Hamilton West back from the SNP by a huge margin in a by-election on Thursday.
The result has raised hopes in the party of a Labour comeback in Scotland, potentially paving the way to victory at the general election, expected next year.
The Labour leadership will be hoping to use their week in Liverpool to draw dividing lines with the Conservatives on issues such as housing, net zero and climate.
But it is under pressure from some in their own ranks to be bolder in spelling out what the party stands for, after being cautious in recent months about announcing big spending commitments.
Housing target
Sharon Graham, general secretary of the Unite union, which has been the party's biggest funder at recent elections, told BBC News that Labour needed policies "people can go out and vote for".
If the leadership was too cautious - on issues such as nationalisation and economic reform - it could pay the price at the ballot box, she warned.
Angela Rayner, who is shadow housing secretary as well as Labour's deputy leader, will set out the party's housing policies in a speech to conference on Sunday.
She says Labour is focused on exceeding the unmet Tory pledge of 300,000 new homes a year, although she will not be putting a figure on that.
"If I get into government, if we're fortunate enough that the British people give us that opportunity, then my number one focus is to deliver on making sure we've got those houses for the future," she told BBC Radio 4's Today programme.
Labour has pledged give local authorities greater powers to negotiate with property firms and build in the areas they need.
The party says it would prevent developers "wriggling out" of their affordable housing obligations, known as section 106 rules, by introducing an expert unit to give councils and housing associations advice on negotiating with property firms.
NHS waiting lists
It would publish guidance that would, in effect, limit companies to challenging these requirements only if there were genuine barriers to building homes.
Labour says it would also make it easier for councils to use cash from right-to-buy to build new homes.
And it would allow councils and housing associations to use a greater proportion of the grant funds they receive on buying housing stock, which they would then rent out as affordable homes.
Housing charity Shelter welcomed the proposals as a "good start", but said only a national programme "backed by serious investment" would tackle the housing crisis.
Meanwhile, Labour's shadow health secretary Wes Streeting has pledged to double the number of CT and MRI scanners in hospitals as part of a bid to cut NHS waiting times.
Labour would funnel £171m a year into a "fit for the future" fund for purchasing new equipment to help patients get diagnosed earlier, he said.
New equipment would have inbuilt artificial intelligence (AI) diagnostic tools, and would be funded by scrapping the non-dom tax status.
The British Medical Association welcomed the proposals, but urged Labour to also set out a plan to improve conditions for doctors to address the "key limiting factor" of staff shortages.
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Real Estate & Housing
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