article_text
stringlengths 294
32.8k
⌀ | topic
stringlengths 3
42
|
|---|---|
CBI To Probe Multi-Crore Scam By Three Co-op Banks In Karnataka: CM Siddaramaiah
The CBI will investigate fraud committed by the directors, chief executives and staff members of the management board of three cooperative banks from Bengaluru.
The Central Bureau of Investigation will probe into the financial irregularities that took place in three co-operative banks in Karnataka, the state government said on Saturday.
In a post on X, Chief Minister Siddaramaiah said, "It has been approved to hand over the scams of Guru Raghavendra Cooperative Bank, Vasishtha Bank and Guru Sovereign Bank to the CBI."
Thousands of depositors had invested their lifetime savings in the bank, keeping their dreams, like marriage of children, buying their own house as a basis for their retirement life. All of them are clueless about their future life due to bankers' fraud, the chief minister said.
"Even when I was the Leader of the Opposition earlier, I was vocal inside and outside the House and participated in protests to get justice for the defrauded depositors. Even then, it was our insistence that this case should be investigated by CBI," he stated.
"I have seen the frustration and suffering from those who have lost their deposit money. For this reason, I am handing over the case to the CBI with the intention of conducting a proper investigation and getting justice for all the victims," he added.
The government order said, "Government of Karnataka hereby accords sanction to the Central Bureau of Investigation, under Section (6) of Delhi Special Police Establishment Act,1946..."
The CBI will investigate the multi-crore fraud committed by the directors, chief executives and staff members of the management board of Sri Guru Raghavendra Co-operative Bank Ltd., Sri Vasista Credit Souharda Co-operative Ltd., and Sri Guru Sarvabahuma Souharda Credit Co-operative, the order said.
The agency will identify and investigate persons involved in connection with the alleged fraud.
Concerned officers and others have been asked to hand over the data, information and records as and when required by the CBI and provide place, resources, manpower and logistic support including Camp Office and vehicles to CBI in connection with the case, the order said.
Thousands of investors had time and again staged protests seeking justice but to no avail.
|
Banking & Finance
|
Investors Slash China Local Government Bond Tenors To Shortest On Record
In the first half of 2023, the average tenor of onshore LGFV bond issuance fell to 2.51 years, down from 2.95 years in 2022.
(Bloomberg) -- Investors in China’s local government financing vehicles are cutting the length of time they are prepared to extend credit and demanding higher returns, as cracks appear in the $9.1 trillion market.
In the first half of 2023 the average tenor — the length of time before a debt matures — of onshore LGFV bond issuance fell to 2.51 years according to Bloomberg calculations. That’s down from 2.95 years in 2022 and the shortest since at least 1999 when the data series began.
Additionally, the average coupon on LGFV yuan bonds jumped to 4.39% in the first six months of the year from 3.94% last year despite the fact that China is easing monetary policy.
This increased investor caution points to looming refinancing challenges for a sector considered China’s top financial stability risk. If provinces are only able to refinance at less favorable rates, that may force them to scale back spending, dragging on China’s already spluttering economy. Moreover, if any were to miss these new higher payments, that could force a rapid repricing of credit and send borrowing costs soaring to unaffordable levels.
“Heavily relying on shorter-tenor bonds for financing will make these regions’ ability to refinance even more fragile,” said Zhao Guojun, credit analysis director at the fixed income department of Wanlian Securities Co. “If market sentiment weakens, there may be liquidity risks or technical defaults.”
Focus of Concern
While no LGFV has yet defaulted on a public bond, the majority of regional governments face a severe funding crunch. The property slump has slashed income from land sales while public spending jumped during the pandemic. Half of cities experienced difficulty in managing debt interest payments last year, Rhodium Group said.
The new, more cautious, funding environment is particularly tough for weaker regions.
Take Qinghai, a sparsely populated western province. Its funding costs hit 7.1% this year, compared to just 3% for financial hub Shanghai, Bloomberg’s calculations show. Tianjin, a manufacturing center known for over-development, saw its average coupon jump nearly a percentage point in the first half of 2023.
As well as higher costs, it’s these same regions that also have to borrow on shorter terms.
“It is hard for LGFV issuers to issue long-dated bonds, especially those in weaker areas,” said Janet Lu, head of fixed income China, Eastspring Investment Management (Shanghai) Co. “There’s also uncertainty on how the government policy in handling LGFV debt will evolve in the longer term.”
In a reflection of the difficulties in rolling over debt, overall net refinancing fell 6.5% in the first half of the year. That could force LGFVs to turn to other channels to fill their funding gaps — and these are getting harder to find. Chinese banks recently stopped buying a type of debt called “free-trade-zone bonds” where LGFVs were the major issuers.
Intervention Watch
The underlying problem is most infrastructure projects built by LGFVs never generated enough money to cover their debts, relying instead on cash injections from local government and refinancing to stay afloat.
While LGFV bonds are classed as corporate debt, investors generally assume they are backed by an implicit government guarantee. LGFVs had about 13.5 trillion yuan of outstanding onshore bonds at the end of 2022, according to data from S&P Global Ratings — representing about 40% of China’s non-financial corporate bond market.
The vast majority of that debt is held by domestic investors, spanning all types of financial institutions from commercial banks to insurers and mutual funds. That means any problems could ripple through the whole financial ecosystem.
Already there are concerns that banks may incur losses after some state-owned lenders started to offer additional credit support. Banks including Industrial & Commercial Bank of China Ltd. and China Construction Bank Corp. are offering loans that mature in 25 years, instead of the prevailing 10-year tenor for most corporate lending, people familiar with the matter told Bloomberg in July.
Despite all of these issues, there is still no panic in the market. Key spreads between yuan-denominated LGFV bonds and similar-maturity sovereign debt even narrowed earlier this year.
That’s partly because while the recent last-minute payment of a note raised concerns about the sector’s debt-servicing abilities, even struggling regions appear to be prioritizing timely bond payments.
Despite the central government’s attempts to discourage the idea it will bail out the sector if things go wrong, most investors fundamentally don’t believe it. Options for possible targeted intervention include the establishment of debt service funds to provide liquidity to weaker platforms or extending financing channels through state-owned companies.
“The market is now expecting some policy measures from the central government,”said Moody’s Investors Service Associate Managing Director Ivan Chung. “If any of these debt problems leads to systemic risks or undermines social and economic stability, I think the central government will step in.”
--With assistance from Ailing Tan, Yoshihiro Sato and Kevin Zhang.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
|
Bonds Trading & Speculation
|
SEBI Introduces ASBA-Like Facility For Secondary Market Trading
The new facility will become live by Jan. 1, 2024, the Securities and Exchange Board of India said in a circular.
With an aim to safeguard investors' money from misuse and default by stock brokers, SEBI on Monday introduced a supplementary process for trading in the secondary market based on blocked funds in an investor's bank account instead of transferring them upfront to the trading member.
This is similar to the Application Supported by Blocked Amount (ASBA)-like facility already available for the primary market, which ensures that money from an investor gets moved only when an allotment happens.
The new facility will become live by Jan. 1, 2024, the Securities and Exchange Board of India (SEBI) said in a circular.
Under the framework, funds will remain in the account of the client but will be blocked in favour of the Clearing Corporation (CC) till the expiry date of the block mandate or till the block is released by the CC, or until the block is debited towards obligations arising out of the trading activity of the client, whichever is earlier.
Further, settlement for funds and securities will be done by the CC without the need for the member to handle the clients' funds and securities.
The process safeguards clients' assets from misuse, brokers' default, and consequent risk to their capital.
While a UPI block upon creation would be considered collateral, the same would also be available for settlement purposes. For clients who prefer to block lump sum amounts, their block can be debited multiple times, subject to available balance, for settlement obligations across days.
The facility will be provided by integrating the Reserve Bank of India (RBI)-approved Unified Payments Interface (UPI) mandated service of single-block and multiple-debits with the secondary market trading and settlement process called the 'UPI block facility.'
To begin with, the facility will be made available in the equity cash segment. The CCs may extend the facility to additional segments subsequently.
Explaining the features of the new framework, SEBI said that the facility would be optional for investors as well as stock brokers. Since an investor is allowed to have trading accounts across multiple stock brokers, an investor can choose to avail of the UPI block facility under some brokers and non-UPI-based trading under others.
This would result in lower working capital requirements for the members.
The new framework would eliminate the custody risk of client collateral, which is presently retained by the members and not transferred to the clearing corporation.
Moreover, there would not be any adverse impact on client pay-out even in the case of a member's or fellow client's default.
Further, detailed operational guidelines, including the mode of brokerage collection, would be issued by Clearing Corporation in consultation with relevant stakeholders such as stock exchanges and depositories, among others.
This comes after the board of SEBI approved a proposal in this regard in March of this year. Before that, the regulator had issued a consultation paper on the subject.
|
Stocks Trading & Speculation
|
The online shop Book Depository is due to close at the end of April, vendors and publishing partners have been told. This comes after the bookseller's parent company Amazon announced it had decided to "eliminate" a number of positions across its Devices and Books businesses. The Guardian reports: The Gloucester-based bookseller was founded in 2004 by Stuart Felton and Andrew Crawford, a former Amazon employee, with the mantra of "selling 'less of more' rather than'more of less'". It aimed to sell 6m titles covering a wide variety of genres and topics, as opposed to focusing solely on bestsellers. While originally a rival to Amazon, it was acquired by the retail giant in 2011, causing some in the publishing industry to worry about the tightening of the American company's "stranglehold" on the UK book trade.
According to the trade magazine the Bookseller, an email sent out to vendors and publishing partners explained that Book Depository will be closing, and that the last date customers will be able to place orders is 26 April. "Over the coming weeks we will complete a winding down of the business, including discontinuing our listings as a marketplace seller and closing our website," Andy Chart, head of vendor management, wrote. "I would like to take this opportunity to say a big thank you, from everyone at Book Depository and our book-loving customers, for your supportive partnership over the years in helping us to make printed books more accessible to readers around the world," he concluded.
According to the trade magazine the Bookseller, an email sent out to vendors and publishing partners explained that Book Depository will be closing, and that the last date customers will be able to place orders is 26 April. "Over the coming weeks we will complete a winding down of the business, including discontinuing our listings as a marketplace seller and closing our website," Andy Chart, head of vendor management, wrote. "I would like to take this opportunity to say a big thank you, from everyone at Book Depository and our book-loving customers, for your supportive partnership over the years in helping us to make printed books more accessible to readers around the world," he concluded.
|
Consumer & Retail
|
Unpaid carers say increased financial pressures mean they are unable to buy even basic essential items and feel forgotten by those in power.
A young carer who supports three disabled adults said her family could not afford haircuts and underwear.
Those who care for someone for at least 35 hours a week can claim £69.70 a week but do not get paid extra for caring for more than one person.
The Welsh government said it valued unpaid carers.
Tegan Godden, 19, from Newport, lives with her grandparents, her two uncles, her aunt and her brother.
Her grandmother is the primary carer for three disabled family members - Tegan's grandfather, one of her uncles and her aunt.
Tegan supports her grandmother by taking her relatives for days out or to hospital appointments, giving medication, washing her aunt and helping around the house, all while running her own cake and hot food business full time.
Tegan said her family struggled financially - her grandmother's caring responsibilities mean she is unable to work and she can only claim Carer's Allowance for one person she cares for.
"With the number of mouths she has to feed it's really hard," said Tegan.
She said she believed her grandmother often skipped meals and she often witnessed her going without other essentials.
"I see my nan not even being able to buy socks or pants, walking around the house with holes in her socks," she said.
"It's really upsetting seeing what she has to go through.... she's so selfless. It's upsetting a lot of the time for us."
Tegan wants to see people like her grandmother paid for the work they do.
"If she went out and worked as a carer for other people, she'd be paid by the hour or by the day," she said.
The family try to make ends meet by cooking in bulk and sticking rigidly to shopping lists, Tegan said.
"Everything's gone up in price and the government expects people to eat healthy and eat nutritious meals but the cheapest food in the supermarkets is the most unhealthy that you could buy," she said.
"We try to keep as healthy as we possibly can but it's just the biggest struggle, we just pick meals that we're able to afford."
She said another struggle was the cost of energy.
The family live in a specially adapted council house where two three-bedroom properties have been knocked into one, making it expensive to heat.
The family also uses lots of electric equipment for her aunt, such as a blender for her meals, her mobility bed and feeding pump which pushes their bills up further.
In a recent UK-wide survey of 1,109 young carers by Carers Trust, 56% of respondents said the cost-of-living crisis was always or usually hitting them and their family.
Non-profit organisation Carers UK has said unpaid carers are facing unprecedented financial difficulties because of the UK's current cost of living crisis.
It said without urgent support from government it was "extremely worried that many will simply be unable to cope".
"We don't want charity," said Tegan.
"We don't want to be treated any differently or pitied on but I think there's so many other families like us who are struggling and need support and just don't have it."
Shaun Moore, 60, from Blackwood in Caerphilly county has been an unpaid carer for four years after leaving his job to care for his mother who had dementia.
His mother died two years ago and weeks later his father had a stroke. Shaun now cares for his father full time.
"I've got to do everything for Dad," he said.
"Your life stops dead in its tracks.
"I'm not blaming my father or my mother for that because it's my duty to look after them, the same as they would do for me ."
Shaun said it was very difficult to have any kind of life outside of caring for his father.
"You can't go anywhere, and you can't do nothing [sic]," he said.
"I can't go out with friends for a night out and have a pint because I know for a fact I've got to keep my wits about me. If I have a phone call I would have to get back home straight away.
"You've got no life.
"Mentally it's draining. I have about one hour a night sleep - Dad wants to go to the toilet five, six, seven, eight times a night.
"We don't moan about it because we have to do it but it strips you of everything."
Shaun's father has two carers who call to see him for 15 minutes in the morning and again in the evening.
He claims £69.70 a week in Carer's Allowance and £576 in Universal Credit a month out of which he pays £420 rent as well as all his other outgoings such as running his car, food and all his bills.
"We are the forgotten," he said of himself and other unpaid carers.
"What would the government do if carers like myself - not that we would - but if we turned around and said 'we can't do this anymore. You're going to have to take all our parents and loved ones into care, we're not doing it'," he said.
"They couldn't cover it. They haven't got enough places to put people and they haven't got enough carers. It would be pandemonium."
He believes people like himself are "saving the government thousands of pounds".
"It's not fair," he said.
He wants to see an increase to the benefits unpaid carers are able claim and would like to be taken off benefits and paid a wage for the care he gives.
"I'm not saying I want thousands, but I could do without a little bit extra to make life a little bit easier, so I wouldn't have to struggle," he said.
'Feeling of isolation'
Alan Wilson, 78, from Pontypridd, Rhondda Cynon Taf, has cared for his wife Coral, 79, for almost 40 years.
Coral was diagnosed with sensory neuropathy in her mid-40s and in the past four years she has had two strokes and a bleed to the brain and now needs 24/7 care.
"It is the lack of support and the feeling of isolation," he said.
"I feel constantly tired and I fear what the future holds for Coral.
"If I was to be taken ill how would Coral manage? That is my major concern."
Alan gets 12 hours a week respite which he uses to shop, go to appointments or sleep.
"Without that I'd really struggle," he said.
Alan receives his state pension and a private work pension which means he is unable to claim Carer's Allowance.
Those who care for someone but earn more than £128 a week or receive other benefits such as a state pension are not entitled to Carer's Allowance.
"I feel a bit aggrieved about it," he said.
"When I was working I paid 12% of my pay into the private pension.
"Don't get me wrong, I'm happy to care for my wife but if she was in a nursing home you're looking at £1,500 a week and I think the carers are saving the government millions if not billions every year."
A Welsh government spokesperson said: "We identify and value unpaid carers and are committed to helping carers access the support they are entitled to.
"Our national Carers Delivery plan sets out how we will meet this commitment. We are working with our partners to help more carers access advice and support, including their right to a carer's needs assessment.
"We have listened to unpaid carers' calls for help with respite and are investing £9m into a new Short Breaks Scheme. Our £4.5m Carers Support Fund has also helped thousands of carers access financial support and services."
A UK government spokesperson said: "We know families caring for those with disabilities face extra costs, which is why we are increasing disability benefits in line with inflation, making an extra £150 disability support payment as well as £900 cost of living help for those on means-tested benefits and saving households around £1,300 on energy bills this winter."
Tegan, Shaun and Alan first spoke to spoke to Dot Davies on BBC Radio Wales
|
Inflation
|
Some meat and vegetable lines at supermarkets have almost doubled in price over the past year, research has found, prompting fresh calls for the government to intervene as food industry figures gather for summit in Downing Street.
Annual inflation on supermarket own-label budget items stepped up to 25% in April, according to the data from consumer group Which?, while the rate of price increases on branded goods remained steady at just under 14%.
However, some individual items rose at a far faster pace. The price of a pack of Morliny frankfurters at Asda shot up from an average of £1.25 to £2.42, an increase of nearly 94% in a year, while a four-pack of brown onions at Morrisons went from 65p to £1.24 – a 91% rise.
The highest rate of inflation by category last month was on cheese and milk – both over 20% – while inflation eased slightly on both premium and regular supermarket own-brand items.
Sue Davies, the head of food policy at Which?, urged Rishi Sunak to ask grocery bosses gathering at No 10 on Tuesday to commit to doing more to hold prices down, “including stocking budget lines in convenience stores to ensure easy access to basic, affordable food ranges that support a healthy diet”.
Supermarkets, farmers and food industry leaders are meeting the prime minister to discuss how to tackle food price inflation, which rose to 19% in March, according to official government figures.
Before the summit, agriculture and food lobby groups called for more access to overseas workers to help pick crops and better regulation of suppliers’ relations with supermarkets as well as help to adapt to cope with an anticipated rise in extreme weather conditions prompted by climate change.
The UK’s competition watchdog announced on Monday that it would look at whether a poorly functioning market was contributing to food price inflation, alongside a similar investigation into fuel prices.
Anna Taylor of the sustainable food lobby group the Food Foundation called on the government to reinstate its horticulture strategy, which was abandoned earlier this month, in order to secure supplies of fresh fruit and vegetables from the UK, as farmers both here and overseas face difficulties in growing crops in increasingly volatile conditions.
She also said the government should expand the Healthy Start voucher scheme, which ensured that low-income households could afford fresh produce.
“Climate shocks are going to be worsening as we go into the future, and we should be expecting food price inflation to be normal state of affairs. We need to be thinking seriously about how we cope with inflation better than we are now,” Taylor said.
Vicki Hird, head of farming at the Sustain alliance of farming, environmental and community groups, said the government was “failing to support farmers properly” amid a crisis in horticultural production caused by rising costs and lack of labour availability.
She said the government should extend the powers of the independent Grocery Code Adjudicator so that rules such as no automatic delisting of suppliers’ products could be legally enforced.
Fears about the UK’s food supplies have increased after supermarkets were forced to ration supplies of tomatoes, peppers and cucumbers in February owing to extreme weather interrupting supplies of salad and vegetable crops from southern Spain and north Africa.
UK supplies of salad crops have also been restricted by a cold, grey spring and a rise in the cost of energy that has prompted greenhouse growers to cut back on production.
Despite problems with supplies, the government ditched plans for a horticulture strategy, one the few recommendations it had agreed to take forward from a government-commissioned report by the founder of Leon restaurants, Henry Dimbleby.
Fears have arisen that large companies have used the cover of inflation to boost profits, with those on lowest income suffering the most.
|
Inflation
|
PM Jan Dhan Yojana Completes 9 Years Of Implementation; Here Are Some Interesting Facts
The PM Jan Dhan Yojana was announced by Prime Minister Narendra Modi in his Independence Day address on August 15, 2014.
The Pradhan Mantri Jan Dhan Yojana (PMJDY) on Monday completed nine years of successful implementation, the Finance Ministry said.
The PM Jan Dhan Yojana was announced by Prime Minister Narendra Modi in his Independence Day address on August 15, 2014.
While launching the programme on August 28, 2014, PM Modi had described the occasion as a festival to celebrate the liberation of the poor from a vicious cycle.
In a statement issued by the finance ministry on the 9th anniversary of the scheme, Finance Minister Nirmala Sitharaman said, "The 9 years of PMJDY-led interventions and digital transformation have revolutionised financial inclusion in India. It is heartening to note that more than 50 crore people have been brought into the formal banking system through the opening of Jan Dhan Accounts."
"Among these accounts, approximately 55.5% belong to women, and 67% have been opened in Rural / Semi-Urban areas. The cumulative deposits in these accounts surpass Rs 2 lakh crore. Furthermore, about 34 crore RuPay cards have been issued to these accounts without charge, which also provides for a Rs 2 lakh accident insurance cover," she added.
According to the finance ministry, here are the major aspects and achievements of this scheme so far:
PM Jan Dhan Yojana: Achievements
As of August 9, 2023, the number of total PMJDY Accounts: 50.09 crore; 55.6% (27.82 crore) Jan-Dhan account holders are women and 66.7% (33.45 crore) Jan Dhan accounts are in rural and semi-urban areas
During the first year of scheme 17.90 crore PMJDY accounts were opened.
PMJDY accounts have grown three-fold (3.4) from 14.72 crore in March 2015 to 50.09 crore as of August 16, 2023.
Total deposit balances under PMJDY Accounts stand at Rs 2,03,505 crore.
Deposits have increased about 13 times with increase in accounts 3.34 times (Aug’23 / Aug’15).
Average deposit per account is Rs 4,063 as of August 16, 2023.
Total RuPay cards issued to PMJDY account holders: 33.98 crores.
As informed by banks, about 6.26 crore PMJDY accountholders receive direct benefit transfer (DBT) from the Government under various schemes.
About PM Jan Dhan Yojana
Pradhan Mantri Jan Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, Banking/ Savings and Deposit Accounts, Remittance, Credit, Insurance, Pension in an affordable manner.
Objectives:
Ensure access of financial products & services at an affordable cost
Use of technology to lower cost & widen reach
Basic tenets of the scheme:
Banking the unbanked - Opening of basic savings bank deposit (BSBD) account with minimal paperwork, relaxed KYC, e-KYC, account opening in camp mode, zero balance & zero charges
Securing the unsecured - Issuance of Indigenous Debit cards for cash withdrawals & payments at merchant locations, with free accident insurance coverage of Rs. 2 lakhs
Funding the unfunded - Other financial products like micro-insurance, overdraft for consumption, micro-pension & micro-credit.
|
Banking & Finance
|
Welcome back to Chain Reaction, a podcast that unpacks and dives deep into the latest trends, drama and news in crypto with some of the biggest names in the industry to break things down block by block for the crypto curious.
For this week’s episode, Jacquelyn interviewed Maria Shen, a general partner on the investment team at Electric Capital, an early stage venture firm focused on crypto, blockchain, fintech and marketplaces.
Before Electric Capital, Shen was the CTO and co-founder of Bambify, which helped small to medium-sized businesses create more efficient supply chains with manufacturers globally. Prior to that, she worked at Microsoft.
In March 2022, the firm announced that it closed $1 billion for a pair of crypto funds: a $400 million vehicle for making equity investments in startups, and a $600 million fund intended to invest directly in crypto tokens. Its website currently showcases a portfolio with about 75 investments with crypto startups including Magic Eden, ConsenSys and Bitwise, to name a few.
Earlier this year, Electric Capital put out a report indicating that the number of blockchain developers in the U.S. has declined every year since 2017, dropping to 29% last year from 40% in 2017. We dove into what that report really means and how it will affect the growth of developers domestically and internationally.
“A lot of founders have already moved out of the United States or are looking to move out of the United States,” Shen said. “That also means when we’re looking at investing we are increasingly looking outside the United States for opportunities and interesting founders.”
We also discussed what crypto sectors she’s watching for investments, why she’s betting big on NFTs, and the general venture capital market sentiment amid a shaky crypto market. She thinks the ongoing bear market is “going to last a while and is going to be increasingly difficult for companies to fundraise.”
As for VCs, the macro environment has “shifted so much” and firms “are raising less capital and deploying less capital. A lot of firms are almost at the end of their fund lifetimes.”
Overall, Shen said the crypto fundraising environment will probably become worse going into next year. But on a positive note, she sees the current bear market in a better light compared to the previous one in 2018 when “prices were falling off a cliff.” This market cycle feels “completely different,” she said. “A lot of the things we were really dreaming about and talking about theoretically have been shipped now.”
Today, the crypto ecosystem has Ethereum-focused scaling solutions, more stablecoin options, decentralized finance, onchain governance and NFTs, Shen noted. “These things didn’t exist in 2018, 2019, so it’s interesting to see the market maturing beyond transmitting tokens or money to one another.”
Chain Reaction comes out every other Thursday, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest in web3 and crypto. To get a roundup of TechCrunch’s biggest and most important crypto stories delivered to your inbox every Thursday at 12 p.m. PT, subscribe here.
|
Crypto Trading & Speculation
|
America's sovereign debt is considered the gold standard by investors and nations across the globe, with Treasuries viewed as a source of safe and stable returns. But on Tuesday, that sense of security was shaken when credit agency Fitch Ratingsfrom its highest level.
The decision roiled markets on Wednesday, with the Dow falling almost 1% and the tech-heavy Nasdaq shedding about 2% of its value. Treasury prices also fell on the downgrade, which Fitch attributed to the nation's swelling debt, serious fiscal challenges and what it described as a "steady deterioration in standards of governance" in the U.S.
The ratings cut, the first for U.S. debt in more than a decade, immediately drew objection from the Biden administration, with Treasury Secretary Janet Yellen saying she "strongly disagrees" with Fitch's rationale. Indeed, the timing of the downgrade may seem puzzling given that the U.S. isn't currently in a political deadlock over spending, as lawmakers were duringearlier this year, or facing another imminent crisis.
The "timing surely caught everyone off guard," noted Edward Moya, senior market strategist at OANDA, in a note to investors, adding that Fitch had previously warned it could downgrade the nation's debt. Here's what experts are saying about the impact of the downgrade.
Why did Fitch downgrade U.S. debt?
Fitch, which cut the U.S. credit rating a notch from to "AA+", from its previous "AAA" level, cited long-term challenges facing the nation.
The agency, which along with rivals like Moody's and Standard & Poor's evaluates the creditworthiness for governments and businesses, pointed to the bitter partisan gridlock that has prevailed in Washington in recent decades.
"The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management," Fitch said.
The most recent of these standoffs came earlier this year over the so-called, when the U.S. risked defaulting as Democrats and Republicans battled over how much the federal government can borrow to pay its debts. Within days of a potentially catastrophic default, GOP lawmakers and President Joe Biden struck a deal to avert a crisis.
Why did the downgrade happen now?
Fitch also cited factors including the nation's "complex budgeting process" and lack of medium-term financial planning. Of course, none of these are immediately pressing issues. But market observers noted that Fitch had warned two months ago that it was considering a downgrade. The firm also cut its rating after a recent Treasury Department announcement that it plans to increase borrowing.
"Fitch's downgrade followed the announcement by the U.S. Treasury on Monday, July 31 that it plans to borrow a higher-than-expected $1 trillion in the third quarter and will release the details of its plans on Wednesday," noted Marc Dizard, chief investment strategist for PNC Asset Management Group, in a report.
What does Wall Street think about the downgrade?
Stocks fell on Wednesday, but Wall Street economists and analysts expect the short-term impact to be muted.
"The market reaction so far is a far cry from that in the summer of 2011, when S&P became the first of the three main rating agencies to downgrade its rating of US sovereign debt," analysts with Capital Economics told investors.
When S&P cut the U.S. credit rating in 2011, the S&P 500 dropped about 15% with in a month, it noted. Investors may be more focused on Friday's jobs report, which will inform the Federal Reserve's decision on whether or not to boost interest rates at its September meeting, the group added.
Alec Phillips, chief political economist at Goldman Sachs, told clients that the "downgrade contains no new fiscal information." Notably, Fitch's outlook is based on projections from the Congressional Budget Office — not new information that might indicate an near-term deterioration in the the U.S. financial stability.
What does the Biden administration say about the cut?
Treasury chief Janet Yellen on Wednesday pushed back against the downgrade, calling it "flawed" and "based on outdated data."
"Fitch's decision is puzzling in light of the economic strength we see in the United States," she added, citing data such as the nation's low unemployment rate of 3.6% and the 13 million jobs created since January 2021.
Have the other credit agencies changed their ratings?
Not yet. Moody's has maintained its rating on U.S. debt at "Aaa." S&P's rating remains at AA+, where it left the rating after cutting it in 2011, according to LPL Financial.
Still, some analysts say that downgrades from other ratings agencies could be in the cards.
"[C]ontinued fiscal expansion/deficits could result in additional downgrades from rating agencies," noted Lawrence Gillum, chief fixed income strategist for LPL Financial, in a report. "So, until the U.S. government gets its fiscal house in order, we're likely going to see additional downgrades."
Will Fitch's downgrade impact people's investments?
Although markets dropped on Wednesday, Wall Street analysts said they don't believe Fitch's cut alone is likely to have a near-term impact on financial markets.
"While not necessarily wrong in its assessment, the rating downgrade will likely not have an impact on U.S. government debt or markets broadly," Gillum of LPL said.
He added, "The U.S. remains the safe haven during times of market stress and the downgrade will likely not change that."
Even so, the downgrade, especially if followed by additional ratings agencies, could undermine investors' faith in U.S. debt and the stability of markets more broadly in the long-term, experts note.
for more features.
|
Bonds Trading & Speculation
|
By Ludwig Burger
FRANKFURT (Reuters) - Bayer said on Wednesday it was looking into splitting off either the diversified group's Consumer Health or Crop Science division, but ruled out a three-way split.
"We considered simultaneously splitting the company into three businesses. We're ruling that option out," new CEO Bill Anderson said in a statement, adding that maintaining three divisions, including its prescription drugs business, remained an option.
The German maker of medicines, seeds and crop chemicals also said that it would remove several layers of management to speed up decision-making, confirming a Reuters report in September.
"By the end of next year, Bayer will remove multiple layers of management and coordination," the company said in a statement.
It also confirmed its full-year outlook and reported that third-quarter earnings before interest, taxes, depreciation and amortisation (EBITDA), adjusted for one-offs, fell 31.3% to 1.685 billion euros, on lower earnings at its Crop Science division.
That came in shy of an average analyst estimate of 1.725 billion posted on the company's website.
(Reporting by Ludwig Burger; Editing by Miranda Murray)
|
Consumer & Retail
|
Less than a year after it first became clear that George Santos was a serial liar of the highest order, the New York congressman’s time in Congress has drawn to a close. On December 1, 2023, he was officially expelled from the House of Representatives, following the release of a report from the House Ethics Committee accusing him of, among other things, ripping off donors and spending campaign cash on himself. (For these things and more, Santos has also been charged by federal prosecutors. He has pleaded not guilty to everything and has said the Ethics Committee report is “littered in hyperbole” and “opinion.”)
As Santos lies like people breathe, it is virtually impossible to inventory literally all of his cons and deceptions, and one should simply assume that basically anything he says is not the truth. For the biggest and most absurd ones, though, here’s a handy-dandy guide.
According to federal prosecutors, while running for office Santos told a political consultant to tell would-be donors their money would go toward helping him get elected to the House of Representatives. Later, after two donors cut $25,000 checks, Santos allegedly spent the money on himself. What, specifically, did he splash out on? According to the House Ethics report, the money went to, among other things: purchases at Hermès and Sephora, meals, and OnlyFans.
Prosecutors also allege Santos stole donors’ identities and made charges on their credit cards, which most people could tell you is a very, very big no-no.
Is there anything more vile, f--ked up, and shameless than claiming you had family members who were hunted by Hitler as he systematically murdered 6 million people? Don’t ask Santos that, because he would clearly view the question as a challenge. In 2021, the then candidate said in a campaign video that his “grandparents survived the Holocaust.” Several months later, speaking with the Jewish News Syndicate, he said, “I’m very proud of my grandparents’ story,” which he claimed included “fleeing Hitler.” Speaking to Fox News Digital, Santos, perhaps girding himself for getting caught in a lie, declared: “For a lot of people who are descendants of World War II refugees or survivors of the Holocaust, a lot of names and paperwork were changed in name of survival.” However, that does not, in fact, appear to be the case for Santos’s family. According to genealogist Megan Smolenyak, who spoke to CNN, “There’s no sign of Jewish and/or Ukrainian heritage and no indication of name changes along the way.” Meanwhile, according to CNN, multiple genealogy records indicate that his grandparents were born in Brazil.
In a November 2023 interview with CNN, Santos claimed to have spent the 10 previous months obtaining proof that his grandparents really were Ukrainian Jews who fled Holocaust, but that his effort was being delayed because “unfortunately, Ukraine is in the middle of a freaking war.”
In an interview with The New York Times that was published in October 2023, Santos told reporter Grace Ashford that his young niece had been kidnapped from a playground in Queens, in what he implied may have been retaliation for his public comments about the Chinese Communist Party. A high-ranking member of law enforcement subsequently told Ashford that the matter had been looked into—and that there was no evidence of any kidnapping, period, or really any connection to the Chinese Communist Party. “We found nothing at all to suggest it’s true,” the official said. “I’d lean into, ‘he made it up.’”
Santos’s campaign website claimed that his mother “was in her office in the South Tower on September 11,” adding that she “passed away a few years later when she lost her battle to cancer.” On July 12, 2021, he wrote on Twitter: “9/11 claimed my mothers life.” While there have obviously been many people who have died as a result of the toxic debris they inhaled on 9/11, NBC News notes that although Santos has claimed his mother was a financial executive, “public employment records show only one employer for Santos’ mother: Imports by Rose, a company based in Queens that shuttered in 1994.” There’s also the awkward matter of documents indicating she was in Brazil on the day of the attacks.
In December 2022, Santos told a Brazilian podcast: “We have already suffered an attempt on my life, an assassination attempt, a threatening letter, having to have the police, a police escort standing in front of our house.” He also claimed to have been mugged, in broad daylight, on the corner of Fifth Avenue and 55th Street.
You may or may not be surprised to hear that, to date, no evidence has emerged to support either of these claims.
One of the first lies Santos got caught in was claiming he had graduated from Baruch College with degrees in economics and finance in 2010, a college he did not even attend. Objectively even funnier? The fact that Santos reportedly told multiple people that he was the “star” of the Baruch volleyball team.
Incredibly, Santos went into even greater detail than that, saying in a 2020 radio interview that he:
- Attended Baruch on a volleyball scholarship
- Was part of the team that “slayed” Yale and Harvard
- Could have played basketball but went with volleyball because “it was easier”
- “Sacrificed both…knees” and “got very nice knee replacements…from playing volleyball” because “that’s how serious I took the game”
During the same interview, he also told the host: “We were champions across the entire Northeast Corridor. Every school that came up against us, they were shaking at the time. And it’s funny. I was the smallest guy and I’m 6 [feet] 2.” Naturally, according to the New York Post, the Baruch men’s volleyball team “never played Yale during the period Santos claimed to have attended school there.”
Santos’s employment history—which, no, did not actually see him working at Goldman Sachs or Citigroup—included time at a financial firm called Harbor City, which the Securities and Exchange Commission accused of running a Ponzi scheme and was later shut down. According to CNN, he insisted to a prospective investor that it was “100% legitimate,” despite having reportedly been told the firm had been accused of circulating fraudulent documents.
In 2008, Santos was charged with fraud by Brazilian prosecutors for stealing the checkbook of a man his mother was working for and then spending nearly $700 using a stolen checkbook and a fake name. He admitted to this in 2009 and then again in 2010. Then, he moved to the United States and reportedly stopped responding to authorities, who didn’t know his whereabouts. In an interview after many of his lies came to light, Santos insisted: “I am not a criminal here—not here or in Brazil or any jurisdiction in the world.” Prosecutors in Brazil have said they plan to re-charge him with fraud.
Ex-roommates of Santos—who know him as Anthony Devolder, the middle name he was going by as recently as 2019—have said he stole numerous items from them, including a Burberry scarf that he then wore to a “Stop the Steal” rally, where he claimed his unsuccessful 2020 bid for office had been “stolen” from him, just as the 2020 presidential election had been stolen from Donald Trump.
Santos has claimed—in a sworn statement!—that he was mugged while attempting to deliver a check for back rent owed to his Queens landlord. Shockingly, there is no record of this happening.
The Patch reported that in 2016, Santos—then going by Devolder—connected with a homeless veteran whose service dog had developed a life-threatening tumor and needed surgery that cost $3,000. According to the vet, Santos/Devolder set up a GoFundMe for the dog and, appealing to donors, wrote: “Dear all, When a veteran reaches out to ask for help, how can you say no […].” The necessary funds were raised and then Santos allegedly “disappeared” with the money and the dog died in January 2017. (Santos and his attorney did not respond to emails from Patch.)
Veteran. Homeless. Dying service dog. Yes, it really hits all the “Wow, this guy is a true piece of s--t” notes. (Santos has insisted the dying dog scheme never happened.)
In an interview with WNYC following his successful bid for Congress, Santos claimed that he’d “lost four employees” in the 2016 Pulse nightclub shooting in Orlando. Does it surprise you to hear that is not actually true, and that, according to the Times, not one of the 49 victims appear to have worked at any of the companies Santos has worked for? It shouldn’t!
In January 2022, the Post reported that a staffer working for Santos’s election bid would call rich donors and pretend to be Representative Kevin McCarthy’s chief of staff to raise money. Seemingly confirming that this crazy story did actually happen, McCarthy’s attorney told the outlet, “When this issue came to our attention last year, I raised it with the Santos campaign and felt it was resolved to our satisfaction.” While it’s unclear if Santos knew about this trickery at the time, it’s hard to believe he didn’t, given, uh, everything.
In an interview with Curbed, pharmacist Yasser Rabello, who lived with Santos for a few months between 2013 and 2014, said he was regularly fed a deluge of lies. Per Rabello, said lies included that Santos, who went by Devolder at the time, was a model who was set to appear in Vogue. That may just be the wildest lie of them all.
This post has been updated throughout.
|
Nonprofit, Charities, & Fundraising
|
For years, the world's largest cryptocurrency exchange, Binance, has been dogged by rumors of malfeasance and federal investigations. Today, in a set of accusations that will rock the already tumultuous world of crypto, the US Department of Justice revealed criminal charges against the company and its chief executive, Changpeng Zhao, claiming they enabled the laundering of vast flows of dirty money across the globe, from Cuba to Iran to Russia.The indictment against Binance, unsealed ahead of a press conference by US attorney general Merrick Garland, accuses the company of billions of dollars of transactions that violated US anti-money laundering laws, including well over a billion dollars of actual criminal transactions and sanctions evasions. Another indictment specifically charges Zhao with allowing those illicit transactions to take place.Garland announced Tuesday that Zhao had pleaded guilty to a felony money laundering violations charge and that the company had agreed to pay a $4.3 billion fine as part of a settlement with the DOJ. Zhao has also stepped down from his role running the company.“Binance prioritized its profits over the safety of the American people,” Garland said in the press conference. “Binance became the world’s largest cryptocurrency exchange in part because of the crimes it committed. Now it is paying one of the largest corporate penalties in U.S. history."The charging documents describe a company that allegedly turned a blind eye, sometimes willfully and knowingly, prosecutors claim, to the trading of funds from sanctioned countries and regions like Iran, Cuba, Syria, and the Russian-occupied areas of Ukraine such as Crimea and Donbas, as well as the now-defunct criminal dark web market Hydra.“Their illicit financing problems were overwhelming to an unsolvable degree,” a former Binance executive tells WIRED, echoing the charges. The former executive was granted anonymity because they are not authorized to speak about internal company matters. “It was a nightmare trying to get a handle on all the sanctions evasions taking place. The execs were more and more hostile to compliance teams trying to mitigate a lot of issues that they were seeing.”The indictment alleges, for instance, that Binance allowed more than 1.1 million transactions between US persons and Iranians—each one an alleged sanctions violation—totaling to a value of nearly $900 million. It also alleges $106 million in direct flows of money from the Russian dark web market Hydra, which offered narcotics, stolen data, and money laundering services, to Binance accounts.US prosecutors claim Binance processed around $275 million in both deposits and withdrawals to BestMixer, a cryptocurrency “mixing” service designed to make cryptocurrency transactions harder to trace before Dutch law enforcement shut down that service in May of 2019 as part of a money laundering investigation. The charging document goes on to allege that Binance users included ransomware gangs, hackers who had plundered crypto from other exchanges, and scammers.For years after its founding in 2017, the prosecutors say, Binance had virtually no know-your-customer requirements, in violation of US money laundering laws, despite offering its services to US users. In the indictment against Zhao, he’s accused of encouraging the company to operate in a “grey zone,” telling employees that it was “better to ask forgiveness than permission.”Even once Binance appeared to enact more stringent know-your-customer rules for users in 2021, the indictment alleges, the company often ignored sanctions violations or knowingly allowed users to circumvent its money laundering checks. More than 12,500 users, the indictment claims, listed Iranian phone numbers on their accounts but were allowed to continue trading on the exchange.“Iran is very tricky,” a Binance staffer wrote in an internal communication at one point, according to the indictment. “We definitely do not want to acknowledge we have them onboard … our official stance is we gotten rid of all of them [sanctions] and blocked.”Binance's investigations and compliance team, according to the charging document, was instructed to check on a user's “VIP level" before banning their account for violations—or to even give VIP users new accounts despite known violations. In one internal conversation, a Binance staffer allegedly told another to warn a VIP user to “be careful with his flow of funds, especially from darknet markets like hydra,” according to the indictment. Prosecutors add that the user “can come back with a new account [but] this current one has to go, it's tainted.”Rumors and reports of Binance's use by criminals have circulated for years. Reuters reported in June of 2022 that Binance had enabled more than $2.35 billion in money laundering by hackers and drug traffickers, which Binance denied. In December of last year Reuters wrote that the Department of Justice was considering criminal charges against the company.The charges and settlement come on the heels of the fraud conviction of Sam Bankman-Fried, the former CEO of FTX, which once rivaled Binance as one of the biggest cryptocurrency exchanges in the world. “In just the past month, the Justice Department has successfully prosecuted the CEOs of two of the world’s largest cryptocurrency exchanges in two separate criminal cases," Garland said in Tuesday's press conference. "The message here should be clear: using new technology to break the law does not make you a disruptor, it makes you a criminal.”
|
Crypto Trading & Speculation
|
Vulnerable families could increasingly be forced into destitution this winter because of the impact of universal credit deductions, anti-poverty campaigners have warned.
People get reduced benefit payments when they owe the government money. This can be through no fault of their own such as mistaken overpayments, or debt owed to other creditors such as landlords.
More than 800,000 households on universal credit received less money last year because they were previously awarded too much in tax credits, the BBC has found. More people will go on to the scheme from September.
To repay the debt, monthly benefits can be reduced by up to 25% by the Department for Work and Pensions (DWP).
The government said it was right to recover debts owed to the UK taxpayer.
But some MPs have dubbed universal credit deductions a "poverty tax" because of the impact the reduced income has on vulnerable families' ability to afford basic essentials.
Food inflation remains 30% higher than two years ago, and energy prices remain around double what they were in 2021 despite a recent dip.
Research shows this has a disproportionate impact on poorer households, with lower income families on average spend twice as much as wealthier households on food and energy.
Debt charities have also warned of a "debt timebomb" this year as more people seek help who do not have enough to cover basic essentials; personal debt levels have risen by an average of £791 per UK adult between 2022 and 2023, according to statistics compiled by the Money Charity.
This is aggravated, campaigners say, by less direct government support for struggling families than in previous years, with some politicians calling for the return of the £400 energy rebate this autumn to help shield families from the impact of potential further price rises.
'Before I get paid I'm already in debt'
Kellylee lives in Greenock and claims money from universal credit on a fortnightly basis. She's been out of work on a long term basis for mental health reasons and has three children.
Recent data shows an average of around £60 is deducted from claimants across the UK. She gets over £150 deducted for reasons including advanced payments and a spare bedroom.
It leaves her with around £400 every fortnight - which quickly goes on bills and essentials, leaving her with no choice but to rely on food parcels.
"After paying food and bills I'm not left with much elseâ¦before I get paid I'm already in debt. The money I owe is for loans for universal credit.
"If I didn't have the deductions I would be able to just make ends meet. I wouldn't have to borrow from family and friends. It's your pride at the end of the day.
"I've read inflation is supposed to be coming down but the price of one thing goes down and something else goes up so it doesn't make a difference trying to budget.
"Even if the deductions were smaller, which I can request but then I would just be paying for a longer period of time. So I would just be in more or less the situation.
"The government could put a hold on the deductions for people just so people have time to recover a little bit from the cost of living.
"If they didn't deduct so much money that would mean people would make ends meet."
Recent data shows that the total monthly amount deducted from Scottish universal credit recipients increased by £600,000 between December 2022 and February 2023, from the previous three month period and the number of households impacted grew by 12,000.
In England, the number of families facing deductions increased by 122,200 in the same period, and the amount deducted from families increased by £6,623,000; while and in Wales, the amount deducted increased by £394,000 and increased by 7,400 families.
SNP MP Chris Stephens, who obtained the figures, said deductions are pushing people into "deep financial hardship", saying the policy should be scrapped.
"There should be an amnesty on deductions resulting from the DWP's own errors, a replacement of upfront loans with grants, and a much lower cap on the monthly rate of deductions," he said.
Chris Birt, from poverty campaigners the Joseph Rowntree Foundation said families impacted by deductions will be looking at winter wondering whether things are going to get worse.
He said he was particularly concerned about people requesting budget advances during the five week wait period when claimants first apply for universal credit that is then deducted from payments.
"Many of these deductionsâ¦are because of the design of the universal credit system. They're nothing to do with how people manage money. People on low incomes manage daily miracles just to provide the basics for their family."
Pauline Gilgallon, development manager at Good Food Scotland, oversees a number of affordable food spaces in the Glasgow area, offering basic items at a significantly reduced price, including one in Sandy Hills.
The constituency where Sandy Hills is based, Glasgow East, has the highest claimants of universal credit in Scotland, according to the most recent figures, and the highest number of people facing deductions to their benefits.
"Even your basics, your bread, your milk, your dairy your eggs, it's become so so expensive. So we fill in a gap for people who maybe can't afford the normal supermarkets."
She says she's "deeply concerned" about the impact of universal credit deductions in the months ahead.
"Deductions are biting hard we're seeing it across all our projects."
She says she's heard stories of people being left "penniless" and is urging the government to ease off deductions.
"People assume it's food, it's fuel, but it's cutting so much deeper than thatâ¦I think the government don't have a clue."
A government spokesperson said that while it was right it balanced a duty to recover debts owed to the UK taxpayer, affordable repayment plans can be offered to claimants, as well as referrals to independent and free debt advice.
They also said recent increases in the National Living Wage and Minimum age will leave millions of workers better off.
A DWP spokesperson added: "Universal Credit deductions help protect claimants from enforcement actions such as eviction, ensure priority debts such as child maintenance are paid, and recover taxpayers' money when overpayments are made.
"But we recognise the pressures of the rising cost of living which is why the UK government is bearing down on inflation and providing record financial support worth an average £3,300 per household."
Labour have been contacted for a comment.
|
Inflation
|
ORLANDO, Fla. -- AAA won’t renew “a very small percentage” of homeowners and auto insurance policies in hurricane-wracked Florida, joining other insurers in limiting their exposure in the Sunshine State despite efforts by lawmakers to calm the volatile insurance market, the company said Tuesday.
AAA said in a statement that it wasn't leaving Florida, but that last year's devastating hurricane season had led to an “unprecedented” rise in reinsurance rates, making it more costly to operate.
Officials with the company refused to say how many policies in Florida wouldn't be renewed but said that they were “higher exposure” package policies which bundle homeowners and auto policies and were underwritten by Auto Club Insurance Company of Florida. An AAA spokesman wouldn't explain how the company defined “higher exposure," when asked.
“This is a decision we do not take lightly,” the AAA statement said. “We acknowledge that this is a difficult time for those affected.”
The affected policyholders already have been notified, and they can apply for auto coverage from sister carrier, Auto Club South Insurance. AAA also said it would continue to write other, new home and auto policies, despite the decision not to renew some policies.
Florida’s insurance woes are leaving some homeowners like Lawrence Kolin in the lurch. His insurer wouldn’t renew a policy for his stucco and brick, Spanish-tile-roofed home near downtown Orlando. With 30 days left until his coverage lapses, he can’t get another insurance company to give him a quote.
“My house has survived 84 years of hurricane seasons,” Kolin, a mediator and trial attorney in Orlando, said Tuesday. “It’s just an untenable situation.”
Florida has struggled to maintain stability in the state insurance market since 1992 when Hurricane Andrew flattened Homestead, wiped out some insurance carriers and left many remaining companies fearful to write or renew policies in Florida. Risks for carriers have also been growing as climate change increases the strength of hurricanes and the intensity of rainstorms.
The decision by AAA comes a week after Farmers Insurance said it was discontinuing new coverage of auto, home and umbrella policies in Florida, joining a long list of insurance woes to hit the Sunshine State recently.
At least six insurers went insolvent in Florida last year. At the end of 2022, average annual property insurance premiums had risen to more than $4,200 in Florida, which is triple the national average. About 12% of homeowners in the state didn’t have property insurance, compared with the national average of 5%, according to the Insurance Information Institute, a research organization funded by the insurance industry.
The Legislature and Florida Gov. Ron DeSantis have grappled with the issue each of the last two years, including a special session in December. Most of the focus has been on shielding insurance companies from lawsuits and setting aside money for re-insurance to help protect insurers. Critics of DeSantis, who is seeking the 2024 GOP presidential nomination, say he has focused too much effort on divisive cultural issues and not enough on making housing and insurance more affordable.
___
Follow Mike Schneider on Twitter at @MikeSchneiderAP
|
Real Estate & Housing
|
A mum has claimed her damp and mouldy council house has left her son "disfigured" with sores all over his body.
Catherine Odigie, 42, Stockwell, says her nine-year-old son Raphael has suffered from itchy skin and swollen eyes and lips because of the problems in her house.
Ms Odigie says the problems first started in her property on the the Mursell estate after she suspected a leaking water tank in her block was causing damp and mould.
She said she complained to Lambeth council about the problem but 10 years on her bedroom walls and ceilings have allegedly been left covered in black mould.
Ms Odigie claims her son has suffered skin problems due to the mould in the property.
She told My London: “All his skin has been disfigured because of the mould and damp problem. He is on full medication from the GP because they don’t know what else to do for him.
“It’s scratch, scratch, scratch. It’s like sores all over his body and it’s itchy. His eyes and lips are swollen and he has been sleeping downstairs for the last few years. His teacher said he was coming to school tired all the time. He can’t have a good sleep because of the problem and it’s affecting his education.”
Ms Odigie said her mould and damp nightmare started two years after moving into the flat, while pregnant with Raphael.
Problems had gotten so bad in the upstairs bedrooms, Ms Odigie was forced to sleep downstairs in her living whilst pregnant.
When Lambeth Council finally treated the problem, the mould and damp returned even worse in the following years because the leak remained unfixed, Ms Odigie claims.
In August 2012, an independent surveyor inspected Ms Odigie's property and who wrote a list of the issues that needed fixing.
But when workmen sent by the council arrived to solve the issue, Ms Odigie claims they sprayed the household with mould killer.
“It was like something you could buy at the supermarket. I couldn’t believe it. I could have done that", she said. "The problem is with the building. The mould is going to come back if you just wipe it and don’t sort out the leak.”
A doctor recommended Ms Odigie and her family be moved to to a less mouldy property in an attempt to relieve Raphael's symptoms, in a 2020 letter seen by the Local Democracy Reporting Service.
Ms Odigie says she was shocked to find she was allocated Band D - the lowest priority for rehousing - and was only eligible for a one-bedroom flat.
When she appealed, Ms Odigie said the council moved her up the priority list by just one step to Band C2.
She said: “My GP said that Lambeth hadn’t even been in touch in December last year, even though I filed a medical assessment about Raphael with them.
"Lambeth now has an arbitration scheme for repairs but I don’t trust it. How can we trust Lambeth and their own solicitors? Do people think we are fools or what?”
The Mirror has contacted Lambeth Council for comment.
|
Real Estate & Housing
|
Origin Delays Vote As Brookfield Revises $12.5 Billion Bid
Origin Energy will ask investors to vote on a revised $12.5 billion offer from a Brookfield Asset Management Ltd.-led group next month.
(Bloomberg) -- Origin Energy Ltd. will ask investors to vote on a revised A$19.1 billion ($12.5 billion) offer from a Brookfield Asset Management Ltd.-led group next month, postponing a scheduled meeting after proxy results showed the existing proposal would fail.
The utility will hold a new ballot on Dec. 4 on the current A$9.43 takeover offer and if the the deal is rejected, Brookfield and partner EIG Global Energy Partners will pursue an alternative plan to acquire the business in separate parts at a lower price, Origin said Thursday in a statement.
Under the amendments, institutional investors would be given an opportunity to re-invest into Origin’s energy generation and retailing business after the unit is sold to Brookfield as part of the existing offer, the target said.
In the event investors vote against the deal, Brookfield has proposed to acquire Origin’s energy business for A$12.3 billion and EIG would make a off-market takeover offer for the remaining business, which would comprise of liquefied natural gas assets.
Under that scenario, investors could receive a total payments of as much as A$9.30 a share, Origin said.
Origin’s board has “significant reservations as to the complexity, conditionality and differing value, and potential adverse tax outcomes to Origin and shareholders,” of the new proposals, and will assess the plans before offering a view on their merits, the Sydney-based company said.
How Australia Pension Funds Are Becoming Global Force: QuickTake
Shares in Origin rose as much as 3.6% to A$8.72 in Sydney, the biggest intraday rise since Oct. 10, and traded 1.7% higher as of 1:30 p.m. local time.
The delay to a shareholder vote will give the Brookfield-led group more time to make the case for its revised proposal after AustralianSuper, Origin’s top investor, confirmed it would oppose the existing deal and vote it down.
Proxy ballots cast ahead of a meeting that had been scheduled for 2pm Thursday had indicated that the takeover would not receive the required 75% approval from participating shareholders, Origin said.
AustralianSuper, the country’s largest pension fund, declined to comment on the revised proposals.
The investor has lifted its holding in Origin in recent weeks to at least 16.5%, according to data compiled by Bloomberg. AustralianSuper argued the consortium’s proposal was well below the utility’s long-term value, and raised concerns about a shortage of opportunities to invest in the nation’s energy transition.
(A previous version of this story corrected a currency in the fifth paragraph.)
--With assistance from Amy Bainbridge and Georgina McKay.
(Updates share price in 7th paragraph, adds chart)
©2023 Bloomberg L.P.
|
Energy & Natural Resources
|
Michael M. Santiago/Getty Images
toggle caption
A person pumps gas at a BP gas station in Brooklyn, New York, on June 12, 2023. Annual inflation eased to 3% in June, the lowest in over two years, and there's hope that it could go lower.
Michael M. Santiago/Getty Images
A person pumps gas at a BP gas station in Brooklyn, New York, on June 12, 2023. Annual inflation eased to 3% in June, the lowest in over two years, and there's hope that it could go lower.
Michael M. Santiago/Getty Images
Inflation has been bruising Americans for more than two years — and it's finally losing some of its punch.
The Labor Department reported Wednesday that the consumer prices in June were up just 3% from a year ago — the smallest annual increase since March 2021. What's more, forecasters say inflation could fall further in the months to come.
But two years of high inflation has left its scars, and people are adjusting their habits, potentially in permanent ways.
Here are five things to know about the state of inflation today.
Inflation has fallen sharply from its peak last year
It was a totally different picture this time last year. Back then, inflation had topped 9%, fueled in part by record-high gasoline prices following Russia's invasion of Ukraine.
Since then, gasoline prices have tumbled more than 26%. And that's having a big impact on the day-to-day lives of many Americans, especially commuters like Kate Blacker from Jersey City, N.J., who travels about an hour each day to her job at a community college.
"I'm a lot less worried now than I was six months ago, eight months ago, when the prices were rising so rapidly and I didn't know when that was going to cool down," says Blacker.
Grocery prices also leveled off last month, in a welcome relief to consumers' budgets.
And in another positive development in the midst of the summer, the price of airline tickets and hotel rooms fell in June, despite strong demand for travel.
Inflation likely has further to fall
Here's more good news: Even lower inflation rates are in the pipeline. Rent was a big driver of inflation in June, but people signing new apartment leases this summer are seeing smaller rent increases than they did a year ago.
That takes time to show up in the government's inflation tally, but the writing is on the wall.
Likewise, the wholesale price of used cars has been falling for several months, so those savings should continue to produce lower prices on dealers' lots.
Omair Sharif, who heads the forecasting firm Inflation Insights, believes the next several months will be marked by mild cost-of-living increases, much like June was.
"This is kind of the leading edge of the summer of disinflation," Sharif says.
Companies may no longer be able to pad their profits
Economist Lael Brainard says some companies added to their profit margins during the last two years of strong inflation — a trend that could soon be reversed.
Brainard served as Vice Chair of the Federal Reserve board before moving to the White House in February to direct the National Economic Council. She points to what she calls a "price-price" spiral, when companies see their costs go up, then raise their own prices even more.
"It will be important for corporations to continue to bring their markups down after having raised them to unusually elevated levels over the past two years," Brainard told the Economic Club of New York Wednesday.
Brainard says those higher markups "should unwind if consumers are more price-sensitive and firms have to compete more intensely."
Many people are becoming more careful shoppers
Two years of high inflation has left a mark on the way people spend money, and some of those changes may be lasting.
Blacker, for example, postponed a trip to Los Angeles this summer, hoping to find cheaper plane tickets in the fall. She also canceled her gym membership, and says she and her partner are more thoughtful now about their food purchases than they used to be.
"We didn't really look so much at the grocery prices before," Blacker says. "It was more like, 'Oh, let's look up a recipe and just get whatever it is that we need.'"
With restaurant prices still climbing, she's also eating out less often.
"It's something we have to be much more conscious about, in terms our budgeting for that," Blacker says.
The Federal Reserve is not ready to declare victory just yet
The data showing easing inflation on Wednesday will likely be greeted as welcome news to the country's inflation fighters, but the battle is probably not over.
The Fed has raised interest rates aggressively over the last 16 months in an effort to curb demand and bring prices under control.
Although the central bank opted to hold rates steady at its last meeting in June, forecasters expect at least one additional, quarter-point rate hike when Fed policymakers meet in two weeks.
If inflation continues to trend down, however, that may just be the last increase in this cycle.
|
Inflation
|
Rishi Sunak has hinted there will be no tax cuts on offer from the government before the next general election, as his party faces three by-elections next week.
A number of Conservative backbenchers have been pushing the prime minister for reductions to a range of levies - including corporation tax, income tax and fuel duty.
But asked about his tax plans by reporters during the NATO summit in Lithuania, Mr Sunak said cutting inflation was the "overriding priority" that took "precedence over everything else".
Politics live: Migration bill 'will consign more people to slavery'
The prime minister said he and Chancellor Jeremy Hunt were "completely united in wanting to reduce taxes for people" - adding: "Of course we are, we're Conservatives. We want people to be able to keep more of their own money.
"But the number one priority right now is to reduce inflation and be responsible with government borrowing. That is absolutely the overriding priority. That takes precedence over everything else.
"Given the context we face, we are going to make sure we bring inflation down and we don't do anything to make the situation worse or last longer. That is our overall approach."
Mr Sunak's comments come as his party prepares for three ballots next Thursday, with predictions looking gloomy for the Tories.
One of the constituencies up for grabs, Uxbridge and South Ruislip, used to be served by former prime minister Boris Johnson, who quit as an MP last month after a committee found he had lied to parliament over lockdown-breaking parties in Downing Street.
The second seat, Selby and Ainsty, was vacated by Mr Johnson's close ally Nigel Adams - soon after reports he had been lined up for a peerage but rumours the nomination was blocked by Number 10 to avoid a by-election.
And the third, Somerton and Frome, became empty when former Tory MP David Warburton resigned following accusations of sexual harassment and drug use - allegations he denies. He has since been granted an appeal to the findings of an investigation into his conduct.
Both Labour and the Liberal Democrats have been campaigning relentlessly in the three areas and both believe they have a good chance of unseating the Conservatives.
Mr Sunak said midterm ballots "are always difficult" for serving governments, but he believed he had set the right course from Downing Street.
"Clearly the circumstances for these by elections are obviously challenging," he said.
"When I was out talking to people, the message I heard loud and clear ... was focus on the things that matter to people and make a difference to them.
"Whether that's getting inflation under control, halving it, whether that's tackling NHS waiting lists, stopping the boats ... and local issues ... putting more police officers on the streets, tackling rural crime, which is what exactly we're doing."
Pointing to his five priorities again, the PM added: "Of course I know things are tough - I can see that, I talk to people about it every week. I always knew it was going to take some time to improve things. But it doesn't mean the course we're on is the wrong one.
"Is inflation more persistent than people expected? Yes. When I set that target [to halve inflation] lots of people said it was too easy. I didn't think it was gonna be too easy, I knew inflation was going to be a challenge.
"I don't hear anyone saying those aren't the right priorities to focus on. I think people just wanna see them delivered. I totally get everyone would like to see that happen as soon as possible. These things are gonna take time, [they are] not easy. They're absolutely the right priorities and I'm giving it everything I got."
|
Inflation
|
DHS Previews Federal Register Notice Extending and Separately Redesignating Venezuela for Temporary Protected Status
Redesignation Allows Additional Eligible Venezuelan Nationals Who Arrived in the U.S. on or Before July 31, 2023 to Apply for TPS and Employment Authorization Documents
Venezuelan Nationals Who Enter After July 31, 2023 are not Eligible for TPS. Those Who Do Not Enter the U.S. via Lawful Pathways Will be Subject to Enforcement Consequences
WASHINGTON – Today, the Department of Homeland Security is previewing a Federal Register notice for an 18-month extension of Venezuela’s 2021 Temporary Protected Status (TPS) designation and a separate redesignation of Venezuela for TPS. The notice explains how to register for TPS under Venezuela’s redesignation and how to re-register for the extension. Applicants for TPS are eligible to apply for an Employment Authorization Document (EAD) during the duration of the TPS designation.
Secretary of Homeland Security Alejandro N. Mayorkas announced on September 20, 2023 the extension and redesignation of Venezuela for TPS for 18 months due to extraordinary and temporary conditions in Venezuela that prevent individuals from safely returning.
Individuals may be eligible if they have continuously resided in the United States on or before July 31, 2023, and been continuously physically present in the United States on or before October 3, 2023. The redesignation of Venezuela for TPS (Venezuela 2023) will allow an estimated 472,000 additional Venezuelan nationals (or individuals having no nationality who last habitually resided in Venezuela) to file an initial TPS application.
Venezuelan nationals who arrived in the United States after July 31, 2023, are not eligible for TPS. Those who do not enter through one of the many lawful pathways will be subject to enforcement consequences. Since May 12, we have removed or returned over 253,000 individuals to 152 countries, including to Mexico. DHS has removed or returned more family members in the last 4 months than in any previous full fiscal year.
Under the new redesignation of Venezuela (Venezuela 2023), eligible individuals who do not have TPS may submit an initial Form I-821, Application for Temporary Protected Status, during the initial registration period that runs from October 3, 2023 through April 2, 2025. Applicants can apply for a TPS-related EAD by submitting a completed Form I-765, Application for Employment Authorization, with their Form I-821, or separately later. Applicants may also submit Form I-765 online.
The extension of TPS for Venezuelans who are already registered (Venezuela 2021) runs from March 11, 2024 through September 10, 2025 and allows approximately 243,000 current beneficiaries to retain TPS through September 10, 2025, if they re-register and continue to meet TPS eligibility requirements. Re-registration is limited to beneficiaries of TPS under Venezuela 2021. Current beneficiaries under TPS for Venezuela must re-register in a timely manner during the 60-day re-registration period from January 10, 2024, through March 10, 2024, to ensure they keep their TPS and work authorization. DHS recognizes that not all re-registrants may receive a new EAD before their current EAD expires and is automatically extending through March 10, 2025, the validity of certain EADs previously issued under Venezuela 2021.
U.S. Citizenship and Immigration Services (USCIS) will continue to process pending applications filed under Venezuela 2021. Both initial applicants and re-registering current beneficiaries who have a pending Form I-821 or Form I-765 as of October 3, 2023 do not need to file either application again. If USCIS approves an individual’s pending Form I-821 re-registration application, USCIS will grant them TPS through September 10, 2025. Similarly, if USCIS approves a pending TPS-related Form I-765, USCIS will issue the individual a new EAD that will be valid through the same date.
The Federal Register notice explains the eligibility criteria, timelines, and procedures necessary for current beneficiaries to re-register and renew EADs under Venezuela 2021, and for new applicants to submit an initial application under the redesignation and apply for an EAD under Venezuela 2023.
For more information on USCIS and its programs, please visit uscis.gov or follow us on Twitter, Instagram, YouTube, Facebook and LinkedIn.
|
Workforce / Labor
|
Fewer than half of American workers qualify for a retirement plan through their job. But that lack of access is markedly worse in some states, which researchers warn could face a spike in senior poverty as a result, according to new study.
About 69 million workers, or 56% of the nation's workforce, lack access to a retirement plan through their workplace, the Economic Innovation Group found in its analysis of 2021 Census data. The share is highest in Florida, where almost 7 in 10 workers are unable to put money away in an employer-sponsored plan, and lowest in Iowa, where it is about 4 in 10.
Americans' retirement readiness is cleaved by income and profession, with higher-income households far more likely to have socked away funds for their later years than low-wage workers. But there's also a geographic divide, with workers in the South less likely than those in the Midwest to have access to employer-sponsored plans, the analysis found.
"It definitely limits the ability of those workers to really take advantage of probably the more prominent vehicle" for retirement savings in the U.S., Benjamin Glasner, associate economist at EIG, told CBS MoneyWatch.
He added, "If you don't have access to it, you can't even begin to start taking advantage of the tax benefits of those plans. And that's a pretty big hurdle to try to overcome solely on your own."
Midwestern workers are the most likely to have access to employer-based retirement plans, at 49%, while those in the South are the least likely, with only 42% able to tap a 401(k) or the like, the research found.
The retirement plan gap isn't necessarily linked to state politics or a blue-red divide, Glasner noted. For instance, Democratic-run California is among the states with a higher share of workers without access to employer-sponsored plans, which is likely due to its share of low-wage workers in industries that don't typically offer retirement plans, such as construction.
"If we don't have the ability to get [workers] involved in generating a real nest egg, then it's going to prove to be high rates of elderly poverty in those states long-term," Glasner said.
America's yawning retirement gap
The findings underscore the gulf between what people will need as they age and what they've actually socked away. Recent research found that almost 3 in 10 Americans nearing retirementfor their post-employment years.
Not surprisingly, the issue is more acute for low-wage workers, with EIG finding that people with annual earnings of less than $37,000 are less likely to have access to retirement plans through their workplace. About 70% of Americans who are working and who earn below this amount don't have access to 401(k)s or other employer-sponsored plans, the research found.
And even when low-wage Americans have access to employer-sponsored retirement plans, they are less likely to participate in saving than higher-income workers, the research found.
At the same time, the retirement gap is worsening for older low-wage Americans. In 2019, only 1 in 10 low-income workers between the ages of 51 and 64 had set aside anything for retirement, versus 1 in 5 in 2007, according to aby the U.S. Government Accountability Office.
"A low-income worker is trying to decide whether they need to put that dollar in cash savings to help deal with their present needs versus being able to try and save it for the long term," Glasner noted. "They're going to have a much harder time justifying putting it farther away if they have needs today."
for more features.
|
Personal Finance & Financial Education
|
A woman claims British Gas debt agents broke into her home before force-fitting a pre-pay meter as she cared for her dying dad.
Elizabeth Garrett, 34, says she was struggling with her mental health after spiralling into debt when they entered her property back in 2011.
The mum says as she returned from visiting her dying father in hospital, she found the doors off their hinges BirminghamLive report.
Miss Garrett, who was 23 at the time, claimed debt agents used her toilet without flushing and even made themselves cups of tea during their visit.
It comes as complaints to the Energy Ombudsman reached record levels, passing 100,000 last year, as anger grows at the pre-payment scandal that has seen people's homes broke into by British Gas subcontractors.
She was stunned to discover her home in Northfield, south Birmingham, had been broken into after the hospital dash 12 years ago.
A card was left on the worktop telling her that British Gas had switched her meter to pay-as-you-go.
It also informed her that they'd entered the property to check her gas wasn't leaking, she said.
British Gas say the firm had attempted to contact Elizabeth on "multiple occasions" about an outstanding balance.
After receiving no response, the company said a prepayment meter was installed in December 2011 'under warrant'.
Elizabeth decided to speak out after the Times told how British Gas would send debt agents to break into customers’ homes - even if they were known to be vulnerable - and fit pay-as-you-go meters.
The energy firm has since said it will stop applying for court warrants to enter homes.
The part-time cleaner, who is now debt-free, said: "I had a two-bed council house at the time, but unfortunately my circumstances changed and I only had £108 each month to live off. My mental health worsened and I wasn't well enough to go back to work.
"I phoned British Gas and told them that I couldn't pay the full bill and would pay a bit back each month. They agreed on this.
"I asked for a prepayment meter, but they said I need to be 'in more debt' to be eligible - so I stopped paying all together. I think my arrears was around £860.
"As this was going on, my dad was in hospital with pancreatic cancer. We were later told he wouldn't make it.
"When I got home after visiting him one day, I was in disbelief to find British Gas had entered my property, without warning. I looked through my mail but there was nothing to suggest that this would be the plan - and I'd never agreed to it.
"While they were there, they used my toilet and didn't flush. They also made cups of tea."
Elizabeth added that the incident "knocked" her "confidence" and continues to do so "even after all these years".
A British Gas spokesperson said: "The warrant process would be a last resort after multiple attempts to contact a customer over many months.
"For this particular case, from 12 years ago, our records show that we attempted to engage with Ms Garrett to try to offer help and assistance on many occasions without success."
|
Energy & Natural Resources
|
The Bank of England will raise its main interest rate by 0.25 percentage points today, bringing it to 4.5 per cent, the highest level since 2008. This is bad news for those buying a house, a car, or anything else that’s paid for with debt. Conversely it should be good news for savers, because as a saver you’re lending money to the bank.
But no: it’s good news for banks, who will update their mortgage rates today, and their savings rates when they’ve given it a bit more thought, or never.
This is the conclusion of the Treasury Select Committee, whose MPs wrote again to banks yesterday asking them to justify charging ever higher interest to borrowers while savings accounts, especially the standard “instant access” ones, pay rates that Harriett Baldwin, the chairwoman of the committee, described as “measly”. “They adjust mortgage rates, literally, the day the Bank of England raises rates – but savings rates have been incredibly sticky,” said Baldwin.
Baldwin has written to all the big banks asking how much they’re making from savers, and has in every case been told this is too “commercially sensitive” to share, but we can get a good idea of how it’s going from their first-quarter earnings reports, which list their “net interest income”. This is the amount they make from the interest they charge borrowers, minus the interest they pay depositors.
HSBC’s pre-tax profits for the first three months of 2023 were triple the previous year, and the most significant factor in HSBC’s climbing profits was a 38 per cent increase in net interest income against the same period last year, representing $2.48bn in extra profit. Barclays’ net interest income was up 21 per cent year-on-year in the first quarter of the year, while Natwest’s was up 43 per cent.
Net interest income is, “for a typical bank, the largest and most important part of their profits”, explains the economist and banking expert Frances Coppola. It’s also the part that has been squeezed, since the financial crisis – interest rates have been close to zero, and because banks were never going to be allowed to pay savers less than zero interest, that didn’t leave much room for margin. After this 15-year damper, Coppola says, there is a sense among banks that interest margins – and therefore profits – can get “back to normal”.
In their replies to Baldwin, banks have been quick to point out that they are offering accounts with what look like very attractive interest rates. First Direct (which is owned by HSBC) offers a savings account with a 7 per cent headline rate. But (as is the case with most of this type of account) you can only pay in £300 a month, and you need to switch to First Direct’s current account and make a regular deposit, so basically you’ll use it as your main account. Which is fine (First Direct scores very highly for customer service) but it means that 7 per cent rate is effectively a bribe for switching bank, and not a huge one, because it’s interest paid on £300 a month for one year – a grand total of £136.50. If you plan to save £3,600 in a year, this is great, but if you’re an older person with a career’s worth of savings being rapidly eroded by inflation, it won’t help.
It’s these people Baldwin is most concerned about – millions of “older, loyal customers who don’t feel comfortable shopping around” online, who previously relied on a bank branch that isn’t there any more, and who are being “exploited” as a result.
But it’s also unfair to everyone else. Let’s return to what the Bank of England is doing today: raising rates. There are two ways this helps to lower inflation: it makes debt more expensive, so that people buy less with debt, demand falls and prices rise more slowly; but it’s also supposed to make saving more attractive, so that people with money put it in the bank rather than spending it (which again lowers demand and subdues prices). If you have an HSBC Flexible Saver or a Lloyds Easy Saver, you’ll earn less than 1.5 per cent interest at a time when inflation (CPI) is 10.1 per cent. “The incentive is to spend the money, not save it,” says Coppola. “So it’s actually leaning against what the Bank of England is trying to achieve.”
A bank might read that and think (not out loud, of course) that if inflation trebles one’s profits, a little inflationary price-gouging is good for business. The fun might not last, though: in the US disgruntled consumers have been moving their deposits from savings accounts to higher-paying options such as money market funds for several months, with serious consequences for some mid-sized banks. In the UK and Europe consumers are still incentivised to seek returns from risky investments or scams such as cryptocurrencies. “There is an argument,” says Coppola, “that the refusal of banks to pass on interest rate rises to depositors actually increases financial stability risk.”
Things may change in July, when the Financial Conduct Authority’s new “consumer duty” comes into effect and makes offering “fair value” a requirement for any institution offering savings accounts. If inflation (and the rates that fight it) remains stubbornly high, however, the gulf between borrowing and saving will become more evident and the calls for stronger measures, such as windfall taxes, will get louder.
|
Interest Rates
|
Ed Miliband is to announce Labour’s plan for an energy independence act that would boost Britain’s energy independence and cut bills for families.
The party says the bill will enable a Labour government to establish a UK electricity system fully based on clean power by 2030, with the largest expansion of renewable power in Britain’s history, and establish “GB Energy”, a publicly owned energy company announced by Keir Starmer last year.
Labour sources have suggested the party would aim to include the act in the king’s speech so it could become law soon after a general election win. One source said the act showcased “modern public ownership, working with the private sector without the need to nationalise”.
In his speech on Monday, Miliband, the shadow secretary of state for energy security and net zero, will attack the Conservatives’ record on energy security, saying the UK was the most exposed economy in western Europe to the energy price spike caused by Russia’s invasion of Ukraine.
He will accuse the government of being “anti-prosperity, anti-growth, anti-business, anti-worker”, telling Labour party conference: “You’re paying record energy bills because they left us exposed to Putin’s war. Every time they turn their back on a clean energy future, they leave us exposed to global fossil fuel markets, at the mercy of dictators and petrostates, driving up bills, making us more insecure.”
Criticising Rishi Sunak’s U-turns on net zero policies, Miliband will add: “These Tories want a fight about who can tackle the cost of living crisis, we say bring it on. These Tories want a fight about who can ensure energy independence in our country, we say bring it on.
“These Tories want a fight about who can stand up for working people, we say bring it on. The Tories’ climate culture war is not just anti-planet; it’s anti-prosperity, anti-growth, anti-business, anti-worker, anti-jobs, anti-young people, anti-future.”
Labour insiders say internal party polling suggests Starmer’s plan to launch GB Energy is extremely popular. The Guardian understands the proposals will feature heavily in Labour’s election campaign.
A Labour source said it “taps into a patriotic argument that we should take back control of our energy system”, noting that Starmer had turned the party around to be proud of its heritage.
The act would also set out a framework for the party’s national wealth fund, a new body that would invest in partnership with the private sector.
Referring to the act in his speech, Miliband will add: “Energy produced in Britain, jobs and wealth created in Britain. Taking back control of our energy system. In the 20th century through North Sea oil, Britain powered the world and controlled our destiny. In the 21st century, with Labour, Britain will be an energy superpower once again, exporting clean power to the world and controlling our destiny. British families and business never again held to ransom by Putin.”
The shadow chancellor, Rachel Reeves, will vow to speed up connections to the country’s National Grid network as part of investment in clean energy.
As Labour puts its green industrial strategy at the centre of its offer to the country, Reeves announced plans “to rewire” Britain, which she said would remove barriers to connections and “facilitate the largest upgrade to national transmission infrastructure in a generation”.
|
Energy & Natural Resources
|
FRANKFURT (Reuters) - The Federal Reserve and the European Central Bank may mop up as much as 90% of the money they pumped into banks over the last decade now that high inflation and interest rates make that extra liquidity unnecessary, a paper by a Fed economist showed on Thursday.
The world's two largest central banks have been raising interest rates at a brisk pace to fight inflation and unwinding some of their massive bond purchases, which flooded banks with cash when price growth was sluggish and borrowing costs already at zero.
The Fed paper, which will be presented to top central bankers next week at the ECB's annual get-together in Portugal, delves into the question of how much cash the Fed and the ECB should keep in the banking system to satisfy demand for reserves now that monetary stimulus is no longer needed.
Its author, a senior adviser to the Federal Reserve Board, estimates the Fed could reduce total reserves from their current $6 trillion to between $600 billion and $3.3 trillion depending on whether it would accept U.S. government bonds or less coveted assets in return.
U.S. Treasuries and German government bonds command a premium on the market because of their liquidity and safety, meaning banks have less of an incentive to swap them for deposits at the central bank.
Similarly, the ECB could shrink its own provision of liquidity from 4.1 trillion euros ($4.51 trillion) at present to as little as 521 billion euros, if it only accepts German government bonds, or 1.4 trillion euros against other assets.
Neither scenario is entirely plausible in the near term as both the Fed and the ECB have a mix of government bonds and other types of debt on their balance sheet.
The paper narrowly focuses on the supply and demand of reserves and the relative convenience of assets received by the central banks in return.
It does not consider other variables; for example the ECB is beginning to debate whether to change its current framework, in which reserves are ample and borrowing costs for banks pinned at the interest rate that the central bank pays on deposits.
The paper also doesn't take into account the potential side effects of a large balance sheet, such as inflating the price of some financial assets or weakening the incentive for governments to run a sound fiscal policy.
"I view my estimates as a benchmark from which policymakers can adjust balance sheet size up or down depending on their view of the importance of other factors," author Annette Vissing-Jorgensen said in her paper.
($1 = 0.9093 euros)
(Reporting by Francesco Canepa; Editing by Christina Fincher)
|
Interest Rates
|
Coinbase Global (COIN), the country’s largest crypto exchange, posted its seventh consecutive quarterly loss as its trading volumes and the number of people trading on its platform fell.
Investors pushed the company's stock as much as 5% lower in after-hours trading following a nearly 9% rise during regular trading hours on Thursday.
Its loss of $2 million in the third quarter, however, did beat Wall Street expectations. It is also is the closest Coinbase has come to a positive earnings result since the fourth quarter of 2021, when a crypto boom was still raging.
"Amid multi-year low levels of volatility, we are pleased with our financial results," Coinbase said in a statement.
Coinbase is still in the middle of a legal fight with the US Securities and Exchange Commission, which sued the exchange in June for allegedly operating an unlicensed crypto securities exchange, broker and clearing agency, putting its future earnings at risk.
The company is choosing to defend itself in court and its CEO Brian Armstrong has been vocal about his disagreements with the SEC. Oral arguments set to be heard January 17 in a Manhattan courtroom.
The company is also actively lobbying Washington for more clarity around how the crypto world is regulated.
"While legislating can be slow and unpredictable, we are still optimistic the US will get this right," the company said Thusday.
Despite the legal and regulatory challenges, Coinbase's stock is up 128% since the beginning of the year.
Its stock has benefitted from a year-long rally in bitcoin and other digital assets amid speculation that that the SEC might grant approval for spot bitcoin ETFs, which would allow investors to get exposure to the cryptocurrency without having to own it.
That rally kicked into higher gear in October, pushing the price of bitcoin to its highest point in a year and a half. But that came after the third quarter ended.
During the third quarter, the number of people transacting on Coinbase's platform per month fell below levels not seen since the first quarter of 2021.
Coinbase's trading volume in the third quarter also fell more than 17% from the previous quarter and 52% from a year ago.
"While rising retail take rates may have saved the day" in the quarter, "the underlying fundamentals continue at COIN to worsen," Mizuho Securities analyst Dan Dolev said in Thursday note, pointing to the lower trading volumes.
Coinbase's transaction revenue fell to $288 million, 21% below its amount for the year ago period and the lowest quarterly results for its trading platform in two years. Its monthly transacting users also fell to 6.7 million, 21% lower than transacting customers it had in the second quarter of last year and 8.2% lower than in the previous quarter.
Subscriptions and services rose to $334 million, a 59% increase from the second quarter of last year, driven by Coinbase's stablecoin and interest income revenue streams.
The company's net revenue rose by 5.5% from the year-ago period, not as high as analysts had hoped.
Meanwhile, operating expenses fell 4% from the previous quarter and 32% from the year ago period to $754 million, driven lower by "a shift in timing of certain sales and marketing and legal-related expenses"
David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto.
|
Crypto Trading & Speculation
|
The Securities and Exchange Commission cracked down on the biggest names in the cryptocurrency world last week.
What does all of this mean for the industry, crypto stocks and digital currencies?
Investors have a lot of questions. Yahoo Finance asked experts for some answers.
Is this an existential threat?
One legal expert said the two new lawsuits pose existential threats to Binance and Coinbase even though the cases are civil and not criminal.
"These, obviously, are pretty much life-and-death stakes for these companies,” University of Kentucky securities law professor Alan Kluegel said.
That’s because the SEC holds wide authority within American financial markets to shut down trading firms and exchanges, reverse the unlawful sale of unregistered securities to the public and suspend or permanently bar actors from the industry, Kluegel said.
If the SEC is successful in its actions against either platform, it can also force them to either stop trading crypto on behalf of American consumers or to set up as registered exchanges and broker-dealers.
Ratings agency Moody’s Investors Service on Thursday changed its outlook on Coinbase from stable to negative, citing "the uncertain magnitude of impact the SEC’s charges will have on Coinbase’s business model and cash flows."
There will be an early test this week of how serious the SEC’s case is for Binance. The regulator has already asked a federal court to freeze the assets of Binance’s US entity Binance.US, and a hearing is scheduled for Monday on that request.
Binance.US said in a Thursday tweet that it was stopping US dollar deposits and that users would soon not be able to withdraw dollars from the exchange. It intends to change to a "crypto-only exchange."
It’s likely that these two lawsuits will take years to reach a resolution.
There is, however, an older case that could help set a precedent much sooner. The SEC filed a lawsuit in 2020 against a startup company called Ripple, alleging the sale of its XRP token represented an unregistered securities offering. XRP is now the world’s sixth-largest cryptocurrency.
"I don't think that this SEC under this leadership necessarily cares whether they win or lose in the courts," Ripple’s chief legal officer Stuart Alderoty said at the Piper Sandler Global Exchange & Fintech Conference on Wednesday. "I think what they are engaging in is a coordinated campaign to essentially destroy the crypto economy in the United States."
One investor, Cathie Wood, doesn’t appear worried about the potential impact on Coinbase. Her flagship fund, the ARK Innovation ETF (ARKK), bought more than 400,000 shares of Coinbase on Tuesday after the exchange had been sued by the SEC. She has been a longtime proponent of crypto.
The scrutiny of Binance was "a good thing longer term for Coinbase," she told Bloomberg.
Will Congress write new rules?
The good news for investors, perhaps, is that these legal battles could help establish how, and whether, cryptocurrencies are regulated in the US.
"We've needed regulatory clarity in the United States for many years now," Moffett Nathanson Partner Lisa Ellis told Yahoo Finance Live.
One key area of debate in Washington is whether certain digital currencies are securities or commodities and therefore fall under the oversight of the SEC or the Commodities Futures Trading Commission.
"The digital asset regulatory environment in the United States is opaque," said Daniel Stabile, co-chair of Winston & Strawn’s digital asset practice group. "At this point, the best solution is for Congress to sort out the regulatory morass."
Earlier this month House Financial Services Committee Chair Patrick McHenry (R-NC) and House Agriculture Committee Chair Glenn Thompson (R-PA) unveiled a draft discussion bill as a possible framework to regulate cryptocurrency.
The draft bill aims to create clarity around gaps between the rules of the CFTC and the SEC. It also tries to direct what firms need to do to register with the SEC and requires the SEC to write new rules that are customized to govern crypto.
The House Financial Services Committee is also working on a new bill pertaining to stablecoins, which are cryptocurrencies linked to a currency like the US dollar. A new discussion bill quietly put out Thursday night incorporates some concerns from Democrats.
In the Senate, Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) are planning this month to reintroduce sprawling crypto legislation after making some changes to it following the 2022 meltdown of crypto exchange FTX.
"There is some semblance of a bipartisan consensus in favor of regulating crypto, and most people feel the collapse of FTX was a wake up call about the urgent need to regulate a status quo that is dangerously deregulated," said House Rep. Ritchie Torres, a Democrat who serves on the House Financial Services Committee.
Who is safe from the SEC's dragnet?
There are thousands of cryptocurrencies. The SEC considers some of these assets to be securities, and therefore under its oversight. That belief is central to its cases against Coinbase and Binance.
The SEC alleged last week that 13 crypto assets available to Coinbase customers were “crypto asset securities” that should have been registered, including Solana’s SOL token, Cardano’s ADA token and Polygon’s MATIC token. It said Binance had been offering 12 coins without registering them as securities.
If the courts uphold the SEC’s arguments, a number of digital currencies may not be able to trade on exchanges.
One prominent online brokerage is already responding to the SEC’s actions. Robinhood Markets (HOOD) on Friday announced it would no longer allow trading of SOL, ADA or MATIC as of June 27. Robinhood currently allows trading in 15 crypto currencies, including bitcoin (BTC), ether (ETH) and dogecoin (DOGE).
The values of SOL, ADA and MATIC slid by double-digit percentages Saturday, a sign of nervousness among investors. Bitcoin was also down Saturday, as was ether.
The SEC could also still go after other crypto exchanges that allowed investors to trade the tokens at issue.
Some exchanges have already been a target of the SEC. US crypto currency exchange Kraken paid $30 million in fines to settle SEC charges in February, for allegedly violating securities rules by failing to register its crypto asset staking program.
One exchange based in Singapore, Crytpo.com, said Friday that it would shut down its institutional exchange service for US customers due to "limited demand" in "the current market landscape." It was unclear if the move was at all related to the SEC's campaign.
There is one big exception to the SEC’s securities dragnet: bitcoin, the world's largest cryptocurrency.
"The SEC has been extremely clear. Bitcoin is not a security," Steven Lubka, managing director of Swan Bitcoin, told Yahoo Finance. "We’re very, very confident that never changes."
The Howey Test
The SEC's framework for evaluating digital assets as securities relies on the so-called Howey Test. This test has its origins in a 1946 Supreme Court case dealing with tracts of Florida orange groves sold by W.J. Howey Co. and leased back to the company.
The Supreme Court labeled these leaseback deals as investment contracts, meaning they needed to be registered with the SEC. It also defined what constituted a security: "an investment of money in a common enterprise with profits to come solely from the efforts of others."
The SEC still uses that measure today. Bitcoin, its defenders say, doesn't meet that test because it was created by anonymous software developer Satoshi Nakamoto in January 2009 as an open-source concept.
SEC Chair Gary Gensler as well as former Chair Jay Clayton have indicated in numerous public comments they do not believe bitcoin is a security.
"It's not," Gensler reiterated on Wednesday.
|
Crypto Trading & Speculation
|
While a plethora of products have been developed to meet the crypto needs of consumers, there are limited options designed to assist enterprises in managing digital assets. Many companies thus find themselves storing a significant amount of cryptocurrency in centralized exchanges and self-custodial wallets that are ill-suited for enterprise requirements, akin to a business utilizing a consumer bank to manage its finances.
Recognizing this gap, Jason Li and his co-founders established MPCVault, which offers non-custodial, multi-signature crypto wallets as a service with the goal to serve crypto businesses similar to an enterprise bank catering to traditional businesses.
The addressable market is potentially enormous, according to Li. The founder cited one research, which estimated that stablecoins settled more than $7 trillion in value last year, not far off from Visa’s $12 trillion given the new asset class hasn’t been around long.
The success of MPCVault of course hinges partly on the state of the crypto industry — which has yet to recover after a major crash in token prices and trading volume and is seeing plunging VC funding. But there continues to be a substantial volume of business-to-business transactions, as indicated by customer data from MPCVault, Li said.
MPCVault completed a $3 million seed funding round in March 2022, which hasn’t been disclosed before. Headquartered in Sunnyvale, California with offices in London and Singapore, the startup raised money from Fenbushi Capital, Tess Ventures, Youbi Capital, and angels including Joe Chen, the founder of China’s early-day Facebook equivalent Renren, and Shuhong Ye, former CFO of China’s food delivery giant Meituan.
Since launching its multi-sig wallet service in January, the startup has surpassed $500 million in assets under management and has moved over $1 billion in assets. It boasts more than 100 institutional customers, including crypto exchanges, venture capital firms, and other kinds of web3 projects.
Non-custody, multi-sig
Being non-custodial means that users, rather than MPCVault or any other centralized party, retain complete control over their wallet keys, a feature that is increasingly sought after as centralized wallets lose credibility.
“Companies like FTX and Celsius had qualified custody licenses, but things still went wrong, so the market is now starting to understand the importance of non-custody, why you must be able to see your own money, and why the platform shouldn’t be able to move your funds,” Li said in an interview with TechCrunch.
Following the FTX incident, which revealed the mismanagement of customer funds by the exchange, many businesses turned to the cold wallet Ledger and other self-custody mobile solutions to store cryptocurrencies. But Li pointed out that “not everyone can use these solutions very safely.”
While many consumer crypto wallets require just one private, encrypted key to authorize transactions, business decisions often involve approvals from multiple parties for internal control. “It is undesirable for any single individual to have access to the full private key, as they would have unfettered access to all assets,” Li suggested. “There needs to be redundancy built in for handling private keys since it is not difficult for people to lose the 24-word seed phrase.”
To solve the problem, MPCVault’s wallets employ multi-party computation algorithms and offer transaction approval policies, meaning users don’t have direct access to the full private key and can set up policies that ask for several signatures before a transaction goes through.
Aside from safeguarding keys, an enterprise-facing wallet should also provide protection for client assets in a manner that web2 antivirus software works to protect users from attacks, reckoned Li. To that end, MPCVault’s wallet solution comes with a security layer that scans for phishing URLs, detects suspicious behavior, checks for interacted addresses, and performs semantic analysis and transaction simulation to help users understand what transactions they are actually signing.
Crypto banking
While the traditional banking system provides a wide range of products tailored to security, payments, wealth management, and other use cases, the crypto banking sector lacks many of these toolsets, argued Li. MPCVault’s goal is to become the “financial operating system for crypto companies,” or simply, the PayPal of crypto, with services ranging from multichain wallets and salary payments to reconciliation and statement reporting.
Crypto banking is fundamentally different from traditional banking, which calls for the development of new infrastructure to manage assets. In the traditional web2, world, only a few individuals in a company would handle money, Li pointed out. In web3, however, almost everyone on the team will need to interact with a blockchain as crypto wallets serve purposes beyond financial transactions.
A startup’s business development team, for example, may need to use a shared wallet to access the firm’s social account; the marketing department may require a wallet to engage with other protocols; and the operational team may oversee another wallet that manages the company’s daily expenses.
While traditional banks deal primarily with fiat currencies, crypto banks handle private keys that facilitate asset movement on blockchains. Therefore, instead of obtaining regulatory licenses to operate various currencies, MPCVault focuses on “protecting cryptographic keys” and “implementing complex mathematical algorithms,” said Li.
When it comes to competition, Li pointed out that while there are institutional wallets out there, none of them is currently catering to small and medium-sized businesses. He also believed his team holds a technical advantage due to the challenge of building a team with expertise in traditional web security, cryptography, mathematics, computation, cloud infrastructure, and front-end user experience all at once.
“Who’s going to use a wallet if it doesn’t come with all these capabilities?”
|
Crypto Trading & Speculation
|
Staff at Tesco stores are to be offered body cameras amid a rise in violent attacks, the supermarket's chief executive has said.
The company has seen physical assaults increase by a third since last year.
It mirrors findings by the British Retail Consortium (BRC) published earlier this year, which found abuse against retail staff had almost doubled compared to pre-Covid levels.
Similar action has already been taken by Sainsbury's, Waitrose and Co-op.
Writing in the Mail on Sunday, Tesco boss Ken Murphy called for tougher laws targeting offenders.
He noted changes had been made to make attacking a shop worker an aggravating factor in convictions, but wants "abuse or violence towards retail workers" to be made an offence in itself.
Mr Murphy called for the change to bring England and Wales in line with Scotland, where the Protection of Worker's Bill makes it an offence to assault, threaten or abuse retail staff.
He also called for the supermarket to have the right to be kept informed about how a case proceeds.
"Crime is a scourge on society, and an insult to shoppers and retail workers. It is time we put an end to it," he added, saying the abuse suffered was "heartbreaking".
In the BRC's Crime Survey published in March, it recorded more than 850 daily incidents in 2021/22, a steep rise from pre-Covid level of 450 a day in 2019/20.
These incidents included racial and sexual abuse, something it said was having a "huge emotional and physical impact on people".
The trade association, which represents more than 200 retailers in the UK, said the cost of retail crime was £1.76bn in 2021/22, with £953m lost to customer theft, and £715m spent on prevention.
"The pandemic has normalised appalling levels of violent and abusive behaviour against retail workers," said Helen Dickinson, the group's chief executive.
In July, food retailer Co-op warned that some communities could become "no-go" areas for the company due to the rising levels of crime, which it said had increased by more than a third in the past year.
It cited a Freedom of Information request which suggested many police forces were not prioritising retail crime, with 71% of serious retail crime not responded to by police.
Waitrose has said an increase in shoplifting has come from a proliferation of steal-to-order gangs.
The supermarket is owned by the John Lewis Partnership, which has said staff in John Lewis stores have also been given bodycams and de-escalation training to deal with a rise in incidents.
Sainsbury's has used body-worn cameras since 2018, a policy it was was one of "a number of security measures" to support customer and colleague safety.
Have you been affected by any of the issues raised here? You can get in touch 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:
|
Consumer & Retail
|
Online grocery carts tend to include less variety and fewer fruits and vegetables than those in a trip to a brick-and-mortar supermarket – but online shoppers are less susceptible to unhealthy impulse buys, a new Cornell study has found.
In an analysis of nearly 2 million shopping trips, the researchers – doctoral student Sai Chand Chintala; Jura Liaukonyte, the Dake Family Associate Professor in the Dyson School of Applied Economics and Management, in the SC Johnson College of Business; and Nathan Yang, assistant professor in Dyson – found that within a given household, Instacart baskets are more similar to each other from week to week than in-store carts, with more than twice as many overlapping items between successive trips to the same retailer.
Nutritionally, however, the difference in the baskets can be viewed as a wash: Instacart baskets had 13% fewer fresh vegetables but up to 7% fewer impulse purchases such as candy, baked goods and chips.
These systematic shopping pattern differences can have implications for consumers as well as retailers.
“This affects a lot of things – how brands are competing, how grocery markets are competing,” Liaukonyte said. The paper, “Browsing the Aisles or Browsing the App? How Online Grocery Shopping is Changing What We Buy,” published Oct. 30 in Marketing Science.
According to digital consulting firm Mercatus, around 54% of U.S. households placed an online grocery order in March 2021 – a 328% increase from August 2019. And even as pandemic-era restrictions and behaviors have changed, some people have found online shopping has gone from a necessity to a convenience.
“There’s a new equilibrium,” Liaukonyte said. “Online shopping penetration has increased significantly – while it is not as high as it was during the peak of COVID, it remains considerably higher than pre-pandemic levels.”
For this work, the authors analyzed data by Numerator, a market research company that uses a mobile app receipt uploads to analyze brick-and-mortar store purchases, and proprietary methods to access Instacart purchases from the same participants. The researchers’ algorithm looked at three years’ worth of grocery purchases from 4,388 participants to get a sense of their typical in-store and online carts.
The researchers discovered a few key differences:
- Online basket variety is around 10% lower compared to brick-and-mortar basket variety within the same household;
- Instacart trips are 27% more similar to each other than offline trips within the same household when comparing categories; and
- The number of overlapping items in Instacart baskets is more than double that of in-store carts when comparing items across successive trips to the same store.
One reason for the similarity and reduced variety in online baskets, the researchers suggest, is Instacart's “Buy it again” feature. This function simplifies the process for shoppers to initiate their new shopping baskets with items purchased during prior visits.
“We can’t definitively say that this is the precise reason the online carts are more similar, as we cannot directly observe users utilizing this feature,” Yang said. “However, it’s an explanation that aligns with our observations and informal conversations with consumers about their shopping habits on Instacart.”
Overall, Liaukonyte said, the findings of the paper indicate that there might be greater consumer loyalty and inertia when shopping online.
“If we don’t pay attention,” she said, “we might fall into an echo filter bubble of repeatedly buying the same items online. This seemingly simple online convenience could make us less sensitive to price changes and limit product discovery, enhancing the pricing power of existing brands.”
Chintala added that the heightened brand loyalty and consumer inertia could make it difficult for new brands and products to enter the market.
“Industry reports suggest that if a product isn't in a person’s cart by their first five or six online orders, it’s very unlikely that the product will ever make it in,” he said. “This highlights the importance for brands to advertise early on to ensure they are top-of-mind for consumers and make their way into their baskets.”
Yang noted that traditional in-store promotional strategies, like product displays and samples for product discovery, don’t translate seamlessly to online settings.
“Brands need to rethink their online product introduction methods, potentially leaning more on sponsored listings to ensure visibility,” he said. “The long-term impact of these trends on online grocery shopping remains to be seen.”
|
Consumer & Retail
|
Withdrawal Of Rs 2,000 Notes Pushes Deposit To Six-Year High In June: Report
The credit/deposit ratio has been generally trending upward since the later part of FY22.
Withdrawal of Rs 2,000 notes by Reserve Bank on May 19 and the subsequent near total return of the currency to the system has buoyed deposit accretion to a six-year high of Rs 191.6 lakh crore in June, according to a report.
Earlier this month, the RBI said more than three-fourths of the total 3.62 lakh crore of Rs 2,000 bank notes have come back to the system by way of deposits (over 85%) and the rest as note exchanges.
According to Sanjay Agarwal, a senior director with Care Ratings, deposits witnessed a healthy on-year growth of 13% to Rs 191.6 lakh crore, which is the highest in the past six years (since March 2017) in the fortnight ending June 30, partly supported by the withdrawal of the Rs 2,000 currency notes and higher interest rates on deposits.
Deposits rose 13% in the reporting fortnight and sequentially, it expanded by 3.2% to Rs 191.6 lakh crore and in absolute terms, deposits rose by Rs 22 lakh crore in the trailing 12-month period when it had stood at Rs 185.7 lakh crore.
As a result, the spread between credit and deposits growth dropped to 326 basis points in the reporting fortnight as against 875 bps in November 2022, which was the largest. This can be attributed to a rise in deposits in the last two to three fortnights.
This has had the short-term weighted average call rate rising to 5.94% as of June 30 from 4.3% as of July 31, 2022, primarily due to the elevated policy rates. The WACR had peaked at 6.69% as of May 4, 2023.
Meanwhile, credit offtake continued to remain elevated at 16.2% on-year to reach Rs 143.9 lakh crore for the reporting fortnight ending June 30 driven by personal loans, NBFCs and agriculture & allied activities. In the same period last year, credit pickup was 14.5%.
The outlook for credit demand continues to be positive due to rise in capital expenditure on the back of the production linked incentive scheme, and retail credit push. However, it is still expected to moderate from 15% in FY23 to 13-13.5% in FY24.
The credit/deposit ratio has been generally trending upward since the later part of FY22 and generally hovering above 75% since December 2022. For the reporting fortnight, it stood at 75.1% expanding by 210 bps on-year from July 1, 2022, due to faster growth in credit compared to deposits.
However, on a sequential basis, it dropped by 40 bps from June 16, 2023. On the other hand, the incremental C/D ratio declined to 63.7% as of June 30, 2023, compared to 99.2 per cent as of July 1, 2022.
The share of bank credit to total assets rose by 54 bps to 67.3% in the fortnight to June 30, 2023 due to higher credit growth. It also expanded by 20 bps from the immediate fortnight. Investment to total assets fell by 21 bps to 26.7% in the fortnight due to slower growth in investments. Meanwhile, it also declined by 46 bps from the immediate fortnight.
|
Banking & Finance
|
My landlord wanted to put the rent up 35% despite cap
- By Georgina Hayes
- BBC Disclosure
Rents in Scotland have risen by more than England despite a high-profile 3% cap on increases imposed by the Scottish government earlier this year.
Catherine Sheldon is one of thousands of young Scots struggling with the cost of living crisis who thought they would be protected from a large rent rise.
However, a "loophole" in the Scottish government's rent cap rules allows her private landlord to seek a 35% rise because one of her flatmates gave notice to move out, ending the tenancy agreement.
The 26-year-old shared the three-bedroom flat in Glasgow with two friends for two-and-a-half years.
Catherine describes the flat as her home but in order to stay living there she would have had to accept her share of the rent rising from £520 per month to £700.
She says her landlord's justification for the increase is that the new price is simply the market rate for the flat - and they appear to be correct.
But Catherine says the new rent represents more than half her monthly income.
"I don't see how these price increases can be sustainable for anyone," she told BBC Disclosure.
"I don't understand who is actually affording it."
Negotiations to agree a new tenancy with a lesser rent rise failed and Catherine says she is now having to leave the property, with nowhere else to go that she can afford.
"We've basically just decided that we need to leave and find somewhere else to live," she said.
"We've been fighting this since February, and we're all just completely exhausted by the whole situation and we don't think there's anything else we can do."
But Catherine, who is a recent graduate and hospitality worker, is struggling to find anything within her price range and she says she is worried she will be forced out of Glasgow altogether.
"I'm really scared," she said.
"I'd move further out but all my friends and everyone I know live here.
"I'd be worried about being isolated from everyone. I've just been completely overwhelmed by the whole thing."
Over the past decade, rents in Scotland's largest cities have almost doubled, according to exclusive data commissioned by BBC Scotland News.
The Rightmove research reveals that between September 2013 and September 2023, the average rent for a two-bedroom flat in Edinburgh climbed by 92% to £1,441, while in Glasgow this increased by 82% to £978.
Despite the emergency legislation capping rent rises at 3%, private rents across Scotland have increased by 6% in the past year, according to the latest Office for National Statistics (ONS) figures.
This figure is higher than London (5.9%).
The statistics show annual private rental costs increased by 5.5% across the UK as a whole, with England at 5.4% and Wales at 6.5%.
England and Wales do not currently have any rent control legislation in place.
'Joint tenancy loophole'
In Scotland, as the impact of cost of living rises such as energy prices began to bite last year, the Scottish government announced a temporary freeze on rent rises.
In April this changed to a 3% cap on increases.
However, campaigners have warned the "joint tenancy loophole" means that, in many flat-shares, landlords are free to increase the rent by as much as they want when one person leaves.
This is because the emergency legislation only applies to tenancies, rather than properties.
Economist and co-director of think tank Future Economy Scotland, Laurie Macfarlane ,described the rent cap as a "sticking plaster" amid a housing crisis in Scotland that private renters are at the very sharp end of.
He told the BBC rent rises were outstripping the growth in incomes and people were spending more of their income than ever before on keeping a roof over their heads.
Sinead McNulty, a Living Rent organiser in Edinburgh, had spent months helping tenants fight rent increases when she was hit with one of her own.
She shares a four-bedroom flat and, like Catherine, was hit with a substantial rent hike when one of her flatmates needed to move out.
"We were shocked to find that the rent had increased by £500, which means that our rent individually each was up by £125," she told the BBC.
She says her generation is particularly vulnerable to the "massive loophole" in the rent cap because young people "have no other choice but to flat-share" due to increasing costs.
"People say it's because we live in the city centre, but I know from my friends and my job that wherever you are it's completely unaffordable," Sinead said.
"My friends, my colleagues, can't afford to live in the city any more. For me that's really upsetting but, more than upsetting, it makes me really angry.
"I am genuinely afraid of moving out of this property and spending much more money on rent and actually being homeless," she said.
"If I cannot live here anymore, I know I will struggle to find a home."
Landlords are also being hit by cost of living pressures with mortgage rates rising rapidly along with the cost of complying with regulations.
John Blackwood, chief executive of the Scottish Association of Landlords, said he was "not surprised" that some tenants were feeling exploited.
"I think tenants are finding it really difficult at the moment, as landlords are finding it difficult," he told the BBC.
"And I feel the government is letting all parties down here. They're not working with us to find these sustainable solutions."
Mr Blackwood said one solution would be "looking at greater predictability of rents and rent increases in the future" in a way that protects the landlord's business.
He added that due to a shortage of alternative affordable housing, private landlords had been asked to provide housing to many more people than they ever expected to and that it had become the "only resort for many renters".
"That's unsustainable and it's not the Scotland that we should be aspiring towards," he said.
In an interview with BBC Scotland, Housing Minister Paul McLennan said he would look at longer-term rent controls in the upcoming Housing Bill.
He said: "There are obviously things we can do in terms of the short-term measures that are in place just now, but looking beyond that and looking to longer-term rent controls, obviously something like that needs to be considered."
The minister added: "I think if you look at rents in other parts of the UK, be that London and Manchester and Newcastle, they are going up with approximately the same kind of figures."
"A lot of it comes down to supply and demand. We need to be building more houses and I am not going to shy away from that."
Top Stories
Features & Analysis
Most read
Content is not available
|
Real Estate & Housing
|
The public deadline for the Reddit API changes is July 1. Popular third-party client Apollo is one of the casualties, and just released its swan song update asking users to decline a refund on their outstanding subscriptions. Many other clients are also shuttering in two days time, with API usage costs set to skyrocket.
However, the developer of popular third-party client Narwhal Rick Harrison posted a surprise announcement that goes against the trend, saying that Narwhal will be able to continue operating (after originally stating that it would have to close down). A major new version, Narwhal 2, is also apparently coming soon and will be funded exclusively by a subscription pricing model.
For most third-party apps, they are basically forced to close down as they face impending short-term costs with no buffer zone to transition users to a different business model.
For instance, Apollo developer Christian Selig previously said that he faced $50,000/month in fees from next month, and that it would be cheaper for him to close down the app altogether and refund existing paid users. If Reddit had given him more than 30 days to transition existing users to a new pricing structure, it is possible a solution could have been found to keep the app going.
Rick Harrison, developer of Narwhal, appears to have to come to some kind of special agreement with Reddit that avoids incurring exorbitant charges beginning July 1.
In a previous update, he had said that the planned Reddit API fees would cost him $1 million to $2 million annually – an obviously unsustainable affair. At the time, he floated a compromise where Reddit would zero-rate his API usage as long as he himself made no money from the app.
It has not been explicitly confirmed if that request was granted by Reddit, but it does seem like something like that has been arranged. As part of the latest announcement, Harrison said the currently shipping Narwhal will no longer show advertising, removing the main source of Narwhal revenue.
In contrast, the developer said that Narwhal 2 will only be available to paying subscribers, with an estimated price of $4-$7 per month to cover the Reddit API fees. There may also be a way for heavy users to top up their plan to pay for more monthly API requests.
FTC: We use income earning auto affiliate links. More.
|
Consumer & Retail
|
After Saturday night's drawing came and went without a winner, the Powerball jackpot has ballooned to a staggering $1.2 billion (yes, billion with a b.) The next drawing is Wednesday, Oct. 4, and according to the Multi-State Lottery Association, it's the third largest jackpot in Powerball history.
The last Powerball winning ticket was sold in California on July 19. Since then, there have been 32 consecutive drawings without a Powerball lottery winner.
While the odds of becoming a Powerball winner are slim (1 in 292.2 million to be exact), it’s hard to resist daydreaming about what you’d do with all that money. But how much of the lottery prize would you take home after taxes? We’ll break it down – and suggest five ways to safely invest your windfall.
How are lottery winnings taxed?
No matter how lucky you are, Uncle Sam will still come knocking. The IRS taxes lottery prizes differently depending on how the winner chooses to get paid. You have two choices: lump sum payout or annual payments spread over 30 years. In truth, most lottery winners opt for the cash lump sum upfront, even though it ultimately means fewer dollars in their pocket.
What do federal taxes look like on a lump sum payment? The federal tax rate on any prize over $5,000 is 24%, which gets immediately deducted from your winnings. And for a large prize like the Powerball, that lump sum will also catapult you into the highest income tax bracket, so you’ll pay the top federal tax rate of 37% the following year.
The annuity option gives you the whole $1.2 billion pot over a longer time span, but you’ll still see that 24% taken off the top of every payment. And for gigantic lottery prizes like the Powerball, you’ll also be in the highest federal income bracket come tax time and have to pay any federal taxes you owe beyond that withholding.
There’s also the state tax bill
Just when you thought your windfall was safe, here come state taxes. How much you’ll pay in state income taxes depends on where you live. New Yorkers pay the highest state tax rate at 13%, but the applicable state tax rate across the country varies from 2.9% to 8.82%.
Of course if your luck holds, you might find yourself in one of the following states that doesn’t charge state tax on income:
Alaska
Florida
New Hampshire
Nevada
South Dakota
Tennessee
Texas
Wyoming
Washington
What would you pocket after paying Powerball taxes?
Counting your chickens before they hatch might be bad luck, but let’s say you win that billion-dollar jackpot. If you choose the lump sum payout, you’ll be paid $551.7 million up front.
However, because your winnings are also subject to a 24% tax withholding, that cash value means you’ll only walk away with $912 million to put in the bank. Depending on your filing status the following year, that sum is also subject to a tax rate as high as 37%, which means that money dwindles down significantly before you even file your state tax return.
If you’re willing to wait for three decades, the annual payments start at $18 million the first year and increase by 5% every year, topping $74 million by year 30. That's before federal taxes.
If you want to run the numbers and see the fine print, you can use the Powerball Taxes Calculator to learn more.
5 investments that make lottery winnings pay off
Enough with the tax talk. Let’s say you hit the jackpot (literally) and have joined the billionaires club. Here’s what experts say lottery winners should do to maximize the winnings and secure a less stressful financial future.
1. Hire a financial adviser
Before you even roll up to claim the check, it makes sense to hire a financial adviser and a tax attorney or accountant who can help you manage your tax liabilities and invest money wisely.
2. Diversify your banking strategy
You might think you're being responsible for stashing money in the bank, but remember banks are only insured for deposits up to $250,000. So be intentional about where you’re putting your money and how you’re splitting it up.
3. Pay off outstanding debts
It’s going to be a big relief to live debt-free, potentially for the first time. Paying off outstanding loans like mortgages or credit card debt is generally a smart idea as it prevents interest from accumulating. However, keep an eye on your credit scores before leaning into living off cash on hand.
4. Invest wisely
Having extra income might tempt you to try new investment strategies, but be careful about jumping feet first into financial products you don’t understand. Stick with low-risk investments like bonds and safer stocks or equities for the first few months before branching out – and get educated about the power of compound interest.
5. Consider establishing a charitable foundation
While you might choose to keep the fact that you won the lottery quiet, family and friends will inevitably find out. It’s helpful to have a charitable foundation set up to deal with requests or gifting strategies that won’t incur an additional tax burden.
And last but not least, if you do win the Powerball, put your winnings to work living the dream without worrying about your bank account balance.
|
Personal Finance & Financial Education
|
Discover more from The Serving Times
The Karen Index
Customers Feel Pinch of Inflation as the Spending Threshold to Feel Superior to Customer Service Workers Rises
Samantha DeVos is a regular Target customer from Orange, CT. Today, however, Samantha’s experience has been anything but regular.
As Samantha scans her items at self-checkout, a red light begins to flash and an electronic voice announces that a store associate is on the way. Samantha looks to the ceiling and sighs.
“Sorry about this,” says the store employee as she checks the terminal to see what the problem is and punches in her code so that Samantha could continue. “These things are really fickle sometimes.”
“You know, what?” says Samantha, “this is absolutely ridiculous. If I wanted to–”
Just then Samantha looks at the items listed on the self-checkout screen which stops her speech dead in its tracks.
“I’m sorry,” says Samantha, smiling at the associate. “Thank you for your assistance.”
So what went wrong?
Subscribe to The Serving Times and never miss an article! It’s free and therefore will remain unaffected by inflation!
Inflation has been out of control over the past year. Even while it “cools” customers are finding it a regular annoyance while shopping, an annoyance that seems to have manifested in some unforeseen ways.
“I was at the McDonald’s last week,” says Jerry Kromp, “and I walked back up to the counter to let them know my fries were too salty to see if maybe I could get a voucher for a future visit, you know, just a typical lunch. But I don’t know, I just figured I only got a cheese burger, small fries, and a coffee and it just didn’t seem worth bothering the manager over. It was weird.”
“I was shopping at the Stop & Shop,” tells Meridith Peters, “and I only had like six items in my cart. I saw they stopped carrying the kind of tomato paste I like, and I was about to get into it with the stock clerk but thought better of it, like I didn’t see the point.”
“My dollar doesn’t go as far as it used to at the Kohl’s,” says Kendra Polataivao, “but I don’t see why that means I should go easy on the returns manager, but I can’t help but think maybe it’s not worth telling her to find a real job when all I’m returning is a tub of three-flavor popcorn after I ate all the caramel and then decided I didn’t like it. Yes, that does entitle me to a refund, and if what you’re saying… You know what, I’m sorry, I’m just not feeling it.”
What do these stories all have in common? At first glance you may think that people are just deciding to treat customer service workers like normal people and respecting their workplaces, but you’d be dead wrong with not only your assumption but also for your overly optimistic view of humanity. No, the quotes above all point to one thing: The amount of goods customers need to buy in order to feel morally justified in berating customer service workers has risen.
“I used to be able to come in here for a small basket of toiletries and verbally bulldoze any employee who even slightly looked at me cockeyed,” says Target customer Samantha DeVos, “but now if I want to talk down to someone just trying to do their job I feel obligated to add a Toblerone and a case of La Croix to my buggy just to feel right about it!”
“It’s a vicious cycle,” says Bernie Lagadec during a recent visit to Kroger. “Like I want to yell at the boy there about how high the prices have gotten, but then I remember that even though the prices have gone up his pay probably hasn’t. But if I spend enough money to assuage the guilt from yelling at their low-paid employees, doesn’t that just encourage the Kroger to keep raising prices? It’s a real 1984 is what it is!”
I think he meant “Catch 22” but I honestly can’t tell if that’s more or less accurate.
“Thanks a lot, Biden!” says Craig Perrett, whom we didn’t ask for comment but was just walking by and heard us mention store prices.
“I find it’s worth the extra cost,” says Lilith Farmer who recently bought a box of movie theater Raisinets so she’d feel alright yelling at the ushers later because the movie was too loud. “It’s part of the experience of going out on a weekday afternoon and I don’t intend to stop.”
For insight into this strange economic phenomenon, we spoke to Professor Jackson Donnell of the Tallulah Falls Community College economics department.
“Everybody has a spending threshold they need to hit before they can feel morally justified in belittling or berating customer service employees,” says Donnell. “In retail economics, we refer to that threshold as The Karen Index. It varies from person to person depending on things like financial status, age, race, etcetera, but everybody’s got a level where they’d feel like they spent enough to be entitled to treat service workers like human garbage.”
So is there an actual dollar amount?
“Yes,” says Donnell, “indeed there is. The pre-pandemic Karen Index usually averaged out to about sixteen dollars per transaction, but nowadays it’s suggested that the index has risen to about twenty-one to twenty-three dollars. Data also shows there is a positive correlation between inflation and The Karen Index as one would imagine: As prices rise so does the index. Our best theories suggest that customers, subconsciously at least, have a set price for the privilege of being a jerk to workers and like grocery, dining, and consumer good prices, that cost has risen as well, perhaps exponentially.”
The rise in The Karen Index hasn't gone without government attention. Federal Reserve chair Jerome Powell describes it as "An unfortunate consequence of [The Fed's] plan to fix inflation by forcing as many Americans as possible into destitution" and key business figures like Andy Putzder, CEO of such fast food chains as Eat the Drumstick Slowly and Hät Bräts, hopes that customers at his restaurants feel comfortable being dicks to employees for any transaction. Property developer and gigantic forehead haver Tim Gurner has even proposed a pay-it-forward system where wealthier shoppers can opt to cover part of the Karen Index costs for future customers which he believes will help “ensure these workers don’t get any bright ideas that they deserve to be treated any better than what their lowly, loathsome station dictates”.
And what of the retail corporations in all this? Well, of course they’re not going to balk at a few extra bucks per transaction. In fact, in a recent blog post on The National Retail Federation website, which we in the business news media regard as an actual source of reliable data for some reason, NRF CEO Matthew Shay had this to say on the topic:
“Look, if our valued customers feel they need to spend a little bit more to get what they believe is the full retail experience, who are we to tell them they’re wrong? Yes, we always strive to ensure our customers feel comfortable talking to our associates in any kind of way as they see fit, and we’d never stand in the way of that. Rest assured we do not take changes in the economic landscape surrounding retail lightly and are looking into how we can use this new information to give our guests the very best shopping experience, even if that means raising prices a little to ensure they always feel content in our stores, no matter who they’re talking down to or rebuking.”
Ultimately though, as is typical for the retail industry, the cost of rises in The Karen Index fall back onto the customer. Which is ironic because complaining about it would just make them have to spend more.
“You hate to see it,” says Target manager Bethany Sharan. “Just yesterday some lady wanted to yell at me because the store was closed and she couldn’t keep shopping. Then she saw her total and demanded I add a ten-dollar Buffalo Wild Wings gift card from the impulse standee. But wouldn’t you know, I had already closed down the register and was unable to ring up additional items and she had to forgo her little tantrum. Like I said, you really, uh, really hate to see it.”
While inflation and thus The Karen Index are finally cooling off, Federal Reserve chair Jerome Powell still plans on raising interest rates later this year to keep the hurt on American workers which somehow will fix the economy.
“We may be stretching the limit,” says Powell, “of how much Americans will endure before they stop being jerks to customer service workers, but we’re still quite far from the limit at which they’ll take any real, meaningful action against the entities who actually cause them economic harm, and we intend to come as close to that limit as possible without crossing it.”
For the time being, customer service workers should take comfort in the knowledge that their mental state and right to work without fear of personal attack are worth losing for the sake of that upsell. Well, at least to their employers and the economy at large it is.
Have you read this whole article without subscribing? For shame!
|
Inflation
|
Unveiling significant tax cuts before next year’s general election would put Britain’s “scary” public finances in further peril and risk the nightmare scenario of even higher interest rates, one of the country’s most influential economists has said.
Paul Johnson, director of the Institute for Fiscal Studies, also made a plea for honesty from both main parties over the profound tax and spending choices they would face should they win power.
Rishi Sunak and his chancellor Jeremy Hunt remain under intense pressure from their own MPs to cut taxes in March, in the run-up to the next election. While the prime minister has been clear that cutting inflation is his only economic priority for now, officials have privately hinted he is interested in making a cut, such as reducing income tax by up to 2p.
However, Johnson said such a cut would be a “political and not an economic decision” that came with risks. “Two pence off income tax is quite a big change,” he said. “That’s something like £15bn. The big question for the chancellor then would be, how’s the Bank of England going to respond?
“The nightmare scenario will be a nasty market reaction, a la Truss. But an almost equal nightmare reaction would be the Bank saying, ‘We were effectively saying that we were keeping interest rates steady, but now you’ve just injected an extra £15bn into the economy. We’re still worried about inflation and we’re going to put them up’. That should weigh very heavily in any decision on tax cuts.
“A £15bn cut in tax this side of March - without concrete tax rises or spending cuts proposed to offset it - it would be a political and not an economic decision.”
Cabinet sources said the government had been desperate to return economically inactive people to the workforce because doing so had a major impact on economic models produced by the Office for Budget Responsibility, which serves as the official arbiter of the state of the public finances. There remains hope among senior ministers that achieving an increase in active workers will give Sunak and Hunt enough wiggle room to make a major tax cut next spring.
In a plea to both main parties, however, Johnson called for an honest acknowledgement that large swathes of the electorate would have to pay more tax if incoming ministers wanted to improve public services.
“I characterise it as quite scary, actually,” Johnson said. “If you look at the OBR at budget time, they were essentially saying that on the set of assumptions then, debt would be stable at the end of the five-year period. That is in a world in which we’ve had the biggest tax increases in living memory and completely implausibly tight spending plans, post-election. Things have got worse since then.
“My plea, in a sense, is that it would be really quite helpful if [both parties] could be open about the scale of the challenges … The part we’re not going to get any honesty on, I don’t think, is on tax and spending.
“If you, oh electorate, want more spending on health and education then you, oh electorate, and not someone else - not the rich and not the multinational corporations - are going to have to pay more tax. That’s the bit where I didn’t expect anyone to be standing up saying that.”
Sunak pledged to cut tax by 1p in 2024 while serving as Boris Johnson’s chancellor – a measure costing about £6bn a year. It was cancelled in the wake of the market turmoil that followed last year’s mini budget. During his leadership battle with Liz Truss last year, Sunak also pledged to cut the basic rate of income tax to 16p by the end of the decade.
However, he said last month that he and Hunt were “completely united in wanting to reduce taxes for people”. He added: “Of course we are, we’re Conservatives. We want people to be able to keep more of their own money. But the number one priority right now is to reduce inflation and be responsible with government borrowing. That is absolutely the overriding priority. That takes precedence over everything else.”
|
Interest Rates
|
Atlantic City casino profits fall 7.5% in 3rd quarter of 2023
New Jersey gambling regulators say Atlantic City’s casinos and two internet-only entities earned $281 million in the third quarter of this year
ATLANTIC CITY, N.J. -- Atlantic City's casinos and two internet-only entities earned $281.2 million in the third quarter of this year, a decline of 7.5% from the same period a year ago, New Jersey gambling regulators said Tuesday.
Figures released by the state Division of Gaming Enforcement show that while the nine casinos collectively surpassed the level of profitability they enjoyed in the third quarter of 2019, before the COVID-19 pandemic, that was largely due to the strong performance of the two newest casinos, and an accounting change by another one.
Hard Rock posted a gross operating profit of $44.3 million in the third quarter, up less than 1% from a year earlier. And the Ocean Casino Resort had a profit of $43 million, up more than 10% from a year earlier.
Gross operating profit reflects earnings before interest, taxes, depreciation, and other expenses, and is a widely accepted measure of profitability in the Atlantic City casino industry.
“In keeping with the experiences of many resort communities along the New Jersey shore, Atlantic City saw a bit of a cooling off in summer 2023 compared to the pent-up post-pandemic energy seen in 2021 and 2022, said Jane Bokunewicz, director of the Lloyd Levenson Institute at Stockton University, which studies the Atlantic City casino industry. ”That said, it did outperform pre-pandemic 2019 for both net revenue and gross operating profit, suggesting that this could be part of a cycle of stabilization."
James Plousis, chairman of the New Jersey Casino Control Commission, noted that third-quarter gross operating profit was the third-best in Atlantic City since 2008, despite negative effects from a cybersecurity issue affecting the parent companies of four casinos.
The Borgata reported a profit of $73.5 million, down 1.7% from a year ago. But the gaming enforcement division said the Borgata recently changed the way it treated some rent expenses, moving them from the category of an operating expense to a non-operating expense for accounting purposes.
That significantly increased the amount of the casino's reported gross operating profits, the division said.
The Tropicana had a profit of $36.7 million, down 11.5%; Harrah's had a $30 million profit, down over 13%; Caesars had a $21.1 million profit, down nearly 18%; Golden Nugget had an $11 million profit, nearly 4%; Bally's had a $7.3 million profit, down over 32%; and Resorts had a $7.2 million profit, down nearly 43%.
Among internet-only entities, Caesars Interactive Entertainment NJ had a $5.1 million profit, down 18%, and Resorts Digital had a profit of nearly $1.6%, down nearly 50%.
For the first nine months of this year, the casinos and the online operations earned $632.1 million, down 4.2% from the same period a year earlier.
In terms of casino hotel rooms, Hard Rock had the highest occupancy in the third quarter at over 96%; Golden Nugget was lowest at just over 67%.
The highest average nightly room price was $346.87 at Ocean; the lowest was $147.89 at Resorts.
___
Follow Wayne Parry on X, formerly known as Twitter, at www.twitter.com/WayneParryAC
|
Consumer & Retail
|
In the 2019 general election, the term “Workington man” was used to represent the group of lifelong Labour voters who dramatically switched to the Conservative party and spurred Boris Johnson’s victory across the “red wall” in the north and Midlands of England.
Nearly four years on, and after Rishi Sunak’s first conference speech as Tory leader, my research group More in Common spoke to first-time Tory voters in the Cumbrian town about their impressions of the prime minister and whether his attempt to present himself as a “change candidate” had landed.
Their verdict will be disappointing for the Conservatives. The public’s willingness to give Sunak a chance has disappeared. Far from the nuanced comments we heard in focus groups when he first came to power, when people were angry with the Tory party but willing to give Sunak credit for introducing the furlough during Covid and being a “safe pair of hands”, this group felt that the prime minister was invisible and unable to relate to the challenges facing the country.
Asked whether they thought Sunak could be the change they all felt Britain needed, it was Mike, a 30-year-old sales manager, who summed up the mood: “How can he say he’s going to bring change when he’s a multimillionaire? He and his missus just don’t understand the rest of the country.” Josh, a 25-year-old technician, added: “I just don’t think he cares about anyone other than his mates.”
For some, the prime minister’s tone in speeches and interviews was also starting to grate. A few mentioned the prime minister’s exchange with a junior doctor on LBC this summer as an example of him not showing enough respect.
From this week’s Conservative party conference, the group had heard only about the cancellation of HS2 – and their reaction was universally negative. Here the challenge for the government is not that this group were wedded to the idea of fast train travel – in most of our focus groups, big infrastructure comes close to the bottom of people’s levelling up wishlists. The problem instead was the symbolism of stopping the line at Birmingham, and what that said about the government’s views of the north. Sacha, 50, who works in cabin crew for an airline, explained: “They’ve said anything Birmingham upwards, we’re just not going to bother.” Dale, a 29-year-old account manager, asked: “Why doesn’t the north deserve it?” Madeline, 25, a nurse, wanted to know: “How can he make these big decisions and cancel the rail when the country never elected him?”
The promise to reinvest HS2 money in local rail projects fell on sceptical ears. The group were willing to accept it might be a better use of money, but after cancelling HS2 they just didn’t believe new investments would happen. As Danielle, a 37-year-old social worker said: “It’ll be another half-finished job.” She and the others we spoke to were not in the mood for promises of jam tomorrow.
While most of what we heard would be difficult listening for No 10, there were two bright spots for the government.
First, when played clips of Sunak’s conference speech, the group approved of lines about “life meaning life” for serious criminals, clamping down on benefit claimants who are able to work and making sure hospitals talk about men and women.
Second, even though almost all the participants in the group thought that Keir Starmer would be prime minister after the next general election – because “the country needs a change” – there was almost as much hostility to the leader of the opposition as there was to the current prime minister.
In some recent focus groups, people seemed to be warming to Starmer, but this group were openly frustrated he had not spelled out what he would do differently.
Josh called him “a solicitor who is quick to point the blame somewhere else”, Dale “couldn’t trust him as far as he could throw him”, while Sacha told us “they’re all the same and so I don’t know who I’ll vote for”. If the Labour leader is to win over this sceptical group, he will have to use next week to show the country not what is wrong, but how a Labour government may make things better.
Ultimately though, if those we spoke to reflect the public mood, the Tories leave their party conference in much the same state as they went into it: having lost a good deal of trust and struggling to hold those new voters they won in 2019.
That may change if, and when, the economy improves, but what should worry Conservative strategists the most is the extent to which much of what the government has to say is now falling on deaf ears, with very little appetite for giving the Tory party another shot.
Luke Tryl is the UK director of More in Common, a research group dedicated to building more united and inclusive societies.
|
United Kingdom Business & Economics
|
If you’re a fan of Reddit, you’ve likely heard of the Apollo for Reddit app. Well, it might not be around much longer if the founder gets priced out with Reddit’s new API pricing.
Christian Selig, the creator of the Apollo for Reddit app, took to Twitter today to announce that he had just gotten off a call with Reddit about its new API pricing. According to Selig, the new policy will require an app like Apollo to pay $20 million per year to continue to use its API.
In a more lengthy post on Reddit (of course), the company says that Reddit’s new API pricing is similar to Twitter’s, which was met with widespread criticism by those who enjoyed clients like Tweetbot and Twitterrific. Twitter, of course, went further and even banned third-party clients like Tweetbot and Twitterrific from using the API, effectively killing those businesses. Tweetbot’s owner then pivoted and released Ivory for Mastodon.
According to Apollo’s team, Reddit’s new API pricing would stick the company with a roughly $20 million bill every year:
Apollo made 7 billion requests last month, which would put it at about 1.7 million dollars per month, or 20 million US dollars per year. Even if I only kept subscription users, the average Apollo user uses 344 requests per day, which would cost $2.50 per month, which is over double what the subscription currently costs, so I’d be in the red every month.
Selig says that “while Reddit has been communicative and civil throughout this process with half a dozen phone calls back and forth that I thought went really well, I don’t see how this pricing is anything based in reality or remotely reasonable. I hope it goes without saying that I don’t have that kind of money or would even know how to charge it to a credit card.”
If Reddit does go through with this pricing change, it could mean that the Apollo for Reddit app goes away like the Tweetbot and Twitterrific Twitter clients before it. Unless, of course, Reddit changes its mind or Apollo increases its pricing, and people actually pay for it.
|
Consumer & Retail
|
The Prince of Wales has opened a homelessness-charity project for young people in work or apprenticeships who need help finding affordable housing.
Centrepoint says the project opened by Prince William - bringing 33 new mini flats to Peckham, south London - is a response to the "housing crisis".
The homes are constructed in Hull and transported to London by lorry.
Residents will pay different amounts based on income, with the rent capped at a third of each tenant's pay.
And solar panels will cut heating bills to £200 per year.
Without stable accommodation, it could be impossible for young people to keep their jobs or to stay in training, the homelessness charity says.
Figures published earlier this year showed an average UK 11% annual increase in private rents, with some areas seeing over 20%.
The project provides independent living, Centrepoint's Sally Orlopp says, giving young people their own front door and a "stepping stone" for those struggling to rent or buy and who might have been stuck in temporary accommodation.
It also helps those facing other barriers, such as landlords wanting a previous track record of paying rent.
"It's not just in London, it's getting more and more difficult for young people," she says. And even so-called "affordable" property is often too expensive for many, with the charity estimating there are 129,000 homeless young people across the UK.
Prince William, patron of Centrepoint, met some of those moving into the low-cost housing units, called Reuben House, on his visit to Peckham.
They have to be working more than 30 hours per week and earning no more than £32,000 a year.
The first residents have jobs in construction, information technology (IT), social services and hairdressing, Ms Orlopp says.
"This is a real mix of young people," she says, with the project challenging stereotypes about who might be at risk of becoming homeless.
The project highlights the issue of work not necessarily protecting people from poverty - with the Trussell Trust charity reporting that about one out of every five people using their food banks is from a working household.
"There are many negative stereotypes associated with homelessness that are at odds with the evidence," Centre for Homelessness Impact chief executive Dr Ligia Teixeira says.
The research group says almost a quarter of households at risk of homelessness who ask local authorities for help include someone working.
Ms Teixeira welcomes Prince William's visit as a way of shifting attitudes on homelessness.
He could use "compassion, empathy and evidence to challenge stereotypes and prejudices and fundamentally change how homelessness is perceived, in the same way that his late mother, Diana, helped to shed the stigma associated with HIV [Human Immunodeficiency Virus] and Aids in the 1980s", she says.
The prince has made homelessness one of his biggest causes, also working with charities such as the Passage and the Big Issue magazine.
|
Real Estate & Housing
|
IREDA IPO Allotment Date, Where To Check Allotment Status, Subscription Details
All you need to know about IREDA IPO Allotment
Indian Renewable Energy Development Agency (IREDA) recently concluded its Initial Public Offering (IPO) subscription period on November 23. The IPO, amounting to Rs 2,150.21 crores, witnessed robust demand on the final day of subscription, the enthusiasm for IREDA's IPO soared, with an impressive total subscription of 38.80 times.
The IPO offered a mix of fresh issue and an offer for sale, with a price band of Rs 30 to Rs 32 per share. Notably, retail investors needed a minimum investment of Rs 14,720 to participate, with subscription numbers reflecting a strong interest from various investor categories.
IREDA IPO Allotment Date
The allotment of shares for Indian Renewable Energy Development Agency Limited (IREDA) is expected to be finalised on Friday, November 24.
*This is a tentative date and is subject to change.
IREDA IPO Listing Date
Shares of Indian Renewable Energy Development Agency Limited are set to be listed on the stock exchanges (BSE & NSE) on Wednesday, November 29.
*This is a tentative date and is subject to change.
Where to check IREDA IPO allotment status?
Investors can check the IREDA IPO allotment status on the official registrar website for IPO, Link Intime Pvt Ltd and on the official website of BSE.
IREDA IPO Subscription Status
Subscritpion Day 3
Total Subscription: 38.80 times
Institutional investors: 104.57 times
Non-institutional investors: 24.16 times
Retail investors: 7.73 times
Employees reserved: 9.80 times
Subscription Day 2
Total Subscription: 5.31 times
Institutional investors: 2.69 times
Non-institutional investors: 7.74 times
Retail investors: 4.25 times
Employees reserved: 4.97 times
Subscription Day 1
Total Subscirption: 1.96 times
Institutional investors: 1.34 times
Non-institutional investors: 2.73 times
Retail investors: 1.97 times
Employees reserved: 2.11 times
IREDA IPO Timeline (Tentitive Schedule)
IPO Open Date: Tuesday, November 21
IPO Close Date: Thursday, November 23
Basis of Allotment: Friday, November 24
Initiation of Refunds: Friday, November 24
Credit of Shares to Demat: Tuesday, December 28
Listing Date: Wednesday, November 29
IREDA IPO Issue Details
Total issue size: Rs 2,150.21 Cr
Face value: Rs 10 per share
Fresh issue size: Rs 1,290.13 Cr
Shares for fresh issue: 403,164,706 shares
Offer for sale size: Rs 860.08 Cr
Shares for offer for sale: 29,571,390 shares
Price band: Rs 30 to Rs 32 per share
Lot size: 460 shares.
About Indian Renewable Energy Development Agency Limited
IREDA, founded in 1987, is a government-owned company that supports renewable energy projects. In 2021-22, it provided record loans of about Rs. 23921.06 crores for projects. With over 36 years of experience, IREDA offers financial assistance for the entire project cycle, from start to finish, promoting a greener and sustainable future. As of June 30, 2023, the company has a diverse portfolio with outstanding loans totaling Rs 472,066.63 million.
|
Stocks Trading & Speculation
|
DES MOINES, Iowa -- There is no mystery why the Mega Millions jackpot has grown to $1.55 billion, making it the third-largest ever ahead of Tuesday night's drawing.
The prize has ballooned because no one has matched the game's six winning numbers since April 18, amounting to 31 straight drawings without a big winner. The nearly four-month-long unlucky streak could be all the sweeter for the person who finally lands the top prize, which is inching toward the record lottery jackpot of $2.04 billion won in 2022 by a player in California.
“It’s a fun thing,” said Merlin Smith, a retired real estate appraiser who stopped Monday at a gasoline station in Minneapolis to buy five tickets. “But if you’re depending on winning, you’d be disappointed a lot.”
WHY DOES IT TAKE SO LONG FOR SOMEONE TO WIN?
It has been a long stretch of jackpot futility, but Tuesday night's 32nd straight drawing since the last winner still isn't a record. The longest run for a Mega Millions jackpot was 36 drawings that ended on Jan. 22, 2021, with someone winning a $1.05 billion jackpot. The record number of lottery draws was for a Powerball prize that ended after 41 drawings when someone won the record $2.04 billion jackpot.
Wins are so rare because the odds are so miserable, at 1 in 302.6 million. When a drawing fails to produce a big winner, the prizes roll over for weeks. Bigger prizes sell more lottery tickets, which also drives more revenue for the state services lotteries fund.
HOW MANY NUMBER COMBINATIONS ARE THERE?
There are roughly 302.6 million possible number combinations for the five white balls and separate gold Mega Ball in Mega Millions. The white balls are numbered from 1 to 70 and the Mega Ball goes from 1 to 25.
To put that number in perspective, consider that all the tickets sold for last Friday's drawing produced only about 35% of the possible number combinations. That means about 65% of possible combinations — or nearly 200 million options — were not covered. Lottery officials expect that as sales increase ahead of Tuesday night's drawing, the potential combinations covered will rise to just over 41%.
DON'T EXPECT TO PUT $1.55 BILLION IN THE BANK
Yes, the money will come pouring in if you win the Mega Millions jackpot, but don't expect a $1.55 billion check to pop into your bank account.
That's because the estimated $1.55 billion prize is for a sole winner who chooses to be paid over 30 years through an annuity. Jackpot winners almost always choose a lump sum payment, which for Tuesday night's drawing would be an estimated $757.2 million.
For either prize option, a big slice of the money would go toward federal and possibly state taxes.
State lotteries typically lop off 24% of winnings for federal taxes, and the bill can run even higher because the top federal income tax rate is 37%. Many states also tax lottery winnings.
As more people buy tickets, the chances also increase that more than one person could match all six numbers. For example, a $1.586 billion Powerball prize was won in 2016 by three players in California, Florida and Tennessee. That means a winner could end up with only a portion of a very large jackpot.
WHAT IS THE BEST WAY TO CHOOSE MY NUMBERS?
Players overwhelmingly choose the easy pick option when buying tickets, letting the machine generate numbers for them. In Iowa, for example, more than 90% of Mega Millions purchases were to people who let the machine choose, rather than selecting the numbers themselves.
The odds are the same no matter if the machine chooses the numbers, or you do.
___
WHERE IS THE LOTTERY PLAYED?
Mega Millions is played in 45 states, Washington, D.C., and the U.S. Virgin Islands. The game is not played in Alabama, Alaska, Hawaii, Nevada and Utah.
___
Associated Press writer Trisha Ahmed contributed to this report from Minneapolis.
|
Consumer & Retail
|
The top official at the Treasury who was sacked days after Liz Truss became prime minister received an exit payout of £335,000.
Sir Tom Scholar was fired after Ms Truss pledged to change "Treasury orthodoxy" during the Tory leadership campaign last year.
His dismissal was criticised by former officials, who said it was an attack on the impartiality of the civil service.
At the time, the Treasury thanked Sir Tom for his "dedicated service".
The details of Sir Tom's severance payment for "loss of office" were included in the Treasury's annual report and accounts for 2022-23.
The figures show Sir Tom's total pay for 2022-23 was more than £550,000, including salary and pension benefits.
The Treasury's latest accounts also revealed the severance payments made to ministers during the 2022-23 period.
Ms Truss and her predecessor as PM, Boris Johnson, both received £18,660 after resigning, while the former chancellor, Kwasi Kwarteng, was given £16,876.
Prime Minister Rishi Sunak received a payment of £16,876 after resigning as chancellor in July 2022, but later repaid this amount.
Severance payments of £7,920 were handed to three ministers, including Chris Pincher, who resigned as deputy chief whip in June 2022 over allegations he groped two men at a club in London.
The deputy leader of the Liberal Democrats, Daisy Cooper, called for the payouts to be given back.
She said: "This is a slap in the face for all those who have seen their mortgages soar because of Truss and Kwarteng's disastrous mini-budget."
Dismissal criticised
Large exit payouts to senior civil servants have proved controversial and Sir Tom's is higher than those handed out to other senior officials in recent years.
For example, the Department for Education handed former permanent secretary Jonathan Slater a £277,780 payout after he left in 2021.
A Treasury spokesperson said Sir Tom's payment was a "contractual amount resulting from the Civil Service Compensation Scheme - the payment is based on length of service and includes pension payments".
The Treasury says Sir Tom left his role as permanent secretary on 8 September, two weeks before the then-chancellor Kwasi Kwarteng delivered a financial statement widely known as the mini-budget.
The mini-budget caused turmoil on the financial markets and after a period of political and economic turbulence, Ms Truss resigned as prime minister after 45 days in office.
James Bowler, who was appointed as the permanent secretary to the Treasury in October last year, told a committee of MPs that Sir Tom's departure "wasn't normal".
Mr Bowler said: "I think the then-chancellor of the exchequer said he didn't want Tom to continue as the permanent secretary, so Tom stood aside and the process was undertaken to appoint someone in his stead."
Sir Tom had served as the permanent secretary to the Treasury for six years before his sacking brought an end to his career in the civil service.
In a brief statement following his dismissal, Sir Tom said: "The chancellor decided it was time for new leadership at the Treasury, and so I will be leaving with immediate effect.
"It has been the privilege of my career to lead this great institution since 2016. I wish the Treasury all the best for the times ahead, and I will be cheering on from the sidelines."
Throughout her campaign to be Tory leader, Ms Truss blamed "Treasury orthodoxy" for slow economic growth over recent years.
Ms Truss, a former Treasury minister, accused her old department of promoting an "abacus economics" and insisted there needed to be a greater focus on stimulating economic growth.
She promised to boost the economy through "bold" tax cuts - a move that her leadership rival and successor as prime minister, Mr Sunak, predicted would stoke further inflation.
Ms Truss was ultimately forced to ditch her economic plan and quit as as prime minister after a Tory revolt sapped her of authority.
|
United Kingdom Business & Economics
|
MCX- Earnings Upside Beyond Rs 500 Crore Limited In FY25 But Multiple Expansion Could Happen: ICICI Securities
MCX has applied for approvals and renewals with the SEBI for select products.
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
Multi Commodity Exchange of India Ltd. has some tailwinds to help it maintain momentum, including the establishment of new software platform and the possible surge in options from miniaturisation of contracts.
We, however, highlight that our FY25E earnings well capture the upside potential, considering monthly future/option average daily trading volume growth estimate of 1.6/9.3% in FY24E and 1.3/4.9% in FY25E.
This is post consideration of volume growth till November 2023. We must also remain cognisant that weekly expiry options may have lower premium rates.
Having said that, multiple expansion can happen considering:
Growth in top line options volume as seen in BSE,
there are examples of multiple expansion in case of CME between 2004-06 and
little threat from competition in case of MCX.
Maintain 'Add'.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
|
Stocks Trading & Speculation
|
Subscribe to Here’s the Deal, our politics
newsletter for analysis you won’t find anywhere else.
Thank you. Please check your inbox to confirm.
Jennifer Peltz, Associated Press
Jennifer Peltz, Associated Press
Leave your feedback
NEW YORK (AP) — Donald Trump is set to testify Nov. 6 at his New York civil fraud trial, following his three eldest children to the witness stand in a case that threatens to disrupt their family’s real estate empire, state lawyers said Friday.
It was already expected that the former president and sons Donald Jr. and Eric would testify. The timing became clear Friday, after Judge Arthur Engoron ruled that daughter Ivanka Trump also must appear, rejecting her bid to avoid testifying.
The schedule sets up a blockbuster stretch in the trial of New York Attorney General Letitia James’ lawsuit. She alleges that the former president, now the Republican front-runner for 2024, overstated his wealth for years on financial statements that were given to banks, insurers and others to help secure loans and deals.
Trump denies any wrongdoing and has called the trial a politically motivated sham. The case could strip Trump of some of his corporate holdings and marquee properties such as Trump Tower. James and Engoron are Democrats.
Donald Trump and the two sons are defendants in the lawsuit, but the state is initially calling them to the stand before the defense begins its case. The defense can then call them again.
NEWS WRAP: Judge orders Ivanka Trump to testify in father’s civil fraud trial
In a surprise preview, Donald Trump ended up briefly testifying Wednesday to answer Engoron’s questions about whether an out-of-court comment was aimed at his law clerk. The judge had earlier barred participants in the trial from talking publicly about court staffers.
Trump said his remark wasn’t about the clerk; Engoron called that testimony “not credible” and fined Trump $10,000, on top of a $5,000 fine imposed days earlier over an online post about the clerk. Trump’s lawyers paid both fines on his behalf but still might appeal them, according to a court filing Friday.
Donald Trump Jr. is now set to testify next Wednesday, brother Eric on Thursday and sister Ivanka on Nov. 3, though her lawyers may appeal to try to block her testimony.
An appeals court dismissed her as a defendant in the lawsuit in June, saying the claims against her were too old. Ivanka Trump announced in January 2017, ahead of her father’s inauguration, that she was stepping away from her job as an executive vice president at the family company, the Trump Organization. She soon became an unpaid senior adviser in the Trump White House. After her father’s term ended, she moved to Florida.
Her lawyer, Bennet Moskowitz, told the judge Friday that state lawyers “just don’t have jurisdiction over her.” One of Donald Trump’s attorneys, Christopher Kise, maintained that state lawyers “just want another free-for-all on another of President Trump’s children.”
WATCH: What Sidney Powell’s guilty plea means for Trump in his Georgia election subversion case
“The idea that somehow Ms. Trump is under the control of the Trump Organization or any of the defendants, her father — anyone who has raised a daughter past the age of 13 knows that they’re not under their control,” Kise said.
However, the state’s lawyers argued that Ivanka Trump was a key participant in some events discussed in the case and remains financially and professionally intertwined with the family business and its leaders.
Engoron sided with the state, citing documents showing that Ivanka Trump continued to have ties to some businesses in New York and still owns Manhattan apartments.
“Ms. Trump has clearly availed herself of the privilege of doing business in New York,” Engoron said.
During her years at the Trump Organization, Ivanka Trump was involved in negotiating and securing financing for various properties, including a lease and loan for a Washington hotel and loans for Trump’s Doral golf resort near Miami and a Trump-owned hotel and condo skyscraper in Chicago, according to court filings.
According to the New York attorney general’s office, Ivanka Trump retained a financial interest in the Trump Organization’s operations even after leaving for the White House, including through an interest in the now-sold Washington hotel.
In court papers that included emails and other documents, the state lawyers said the Trump Organization and its staff also have bought insurance for Ivanka Trump and her businesses, managed her household staff and credit card bills, rented her apartment and paid her legal fees.
In 2021 federal disclosures, she reported $2.6 million in income from Trump entities, including revenue from a vehicle known as TTT Consulting LLC. A company bookkeeper testified that TTT was set up for her and her brothers to reap a share of fees from some licensing agreements.
Associated Press writer Michael R. Sisak contributed to this report.
Support Provided By:
Learn more
Politics
Oct 27
|
Real Estate & Housing
|
Third-party merchants on Amazon who ship their own packages will see an additional fee for each product sold starting on Oct. 1st. Sellers could previously choose to ship their products without contributing to Amazon, but the new fee means members of Amazon’s Seller Fulfilled Prime program will be required to pay the company 2% on each product sold.
The new surcharge is in addition to other payments Amazon receives from merchants starting with the selling plan which costs $0.99 for each product sold or $39.99 per month for an unlimited number of sales. The company also charges a referral fee for each item sold, with most ranging between 8% and 15% depending on the product category.
Since the program launched in 2015, merchants could independently ship their products without paying a fee to Amazon but the new shipping charge may add pressure to switch to the company’s in-house service. As it stands, sellers can already incur other additional charges including fees for stocking inventory, rental book service, high-volume listings, and a refund administration fee, although Amazon does not list the costs on its website.
The company claimed in a blog post on Monday that independent sellers want to keep coming to their site, saying merchants “keep choosing Amazon for the value we provide.” Yet sellers told Bloomberg they were blindsided when they received a notice saying they would be charged yet another fee for choosing to fulfill orders themselves, even as the Federal Trade Commission (FTC) is investigating Amazon for violating antitrust laws.
“We’re sitting here waiting for the FTC to take action against Amazon for antitrust issues, and this fee shows Amazon is not scared at all,” Jason Boyce, whose Avenue7Media helps about 100 businesses sell products online, told the outlet.
The FTC reportedly plans to file an antitrust lawsuit against Amazon’s online marketplace over allegations that the company rewards third-party merchants who use its logistics services while punishing sellers that fulfill their own orders. Lina Khan, the chairperson of the FTC, planned the latest lawsuit against the marketplace powerhouse for months, but it is expected to be filed in the coming weeks.
Amazon’s marketplace accounts for 60% of its total retail revenue, with sellers generating $32.3 billion in revenue in the second quarter of this year, an increase of 18% from the same period in 2022.
Speaking on the condition of anonymity, one seller told Bloomberg that Amazon sellers were only given a few weeks’ notice about the 2% fee. The shortened timeframe made it difficult for merchants to adjust to the added fee because many already ordered inventory for the upcoming holiday season, the seller added.
Amazon did not immediately respond to Gizmodo’s request for comment, but a spokesperson told Bloomberg: “We are excited to offer Seller Fulfilled Prime to sellers as a way to independently handle fulfillment of their products while also making those products available to Prime customers with fast, free delivery, great customer service, and free returns.”
|
Consumer & Retail
|
The government faces a legal challenge to its decision to cut investment in walking and cycling in England, over claims that the move bypassed legal processes and risks scuppering commitments over the climate emergency and air pollution.
Lawyers acting for the Transport Action Network (TAN), a campaign group, have written to the Department for Transport (DfT) to formally seek a judicial review of the cuts announced in March by Mark Harper, the transport secretary.
The action comes at a perilous time for Harper and his team, who are expected to face heavy criticism later this week when the National Audit Office publishes a report on the DfT’s wider strategy for walking and cycling.
Although Rishi Sunak’s government remains officially committed to a target established under Boris Johnson that half of all urban journeys should be walked or cycled by 2030, Harper announced a 50% reduction in the money for active travel in England in March.
According to TAN, whose lawyers at Leigh Day, have sent a pre-action legal letter to Harper, outside London the funding dedicated to active travel in England will be only £1 a head per year over the rest of the current parliament, against equivalent figures of £23 for Wales and £58 in Scotland.
Harper’s announcement in March, justified on the basis of the turbulent economic situation, said that of £710m pledged for active travel in the 2021 spending review, only £100m more would be spent, amounting to a £380m reduction.
While the DfT says more than £3bn is being spent on active travel overall during this parliament, TAN argues this figure includes budgets from other departments that will benefit active travel, without proper evidence as to how this will happen.
The group notes that even if £3bn is being spent, this is still much less than the estimates for what is needed to meet the 2030 target, with some experts arguing that up to £18bn would be required. Even before the cuts, official estimates were that the 2030 target would be missed.
The legal letter argues that Harper’s move to cut spending even further contravenes his obligations under the government’s walking and cycling strategy, and that a shift towards more active travel is an integral part of net zero targets.
Other grounds for the challenge are that failure to shift more people out of cars will mean ministers miss targets for improved air quality, and that active travel is an important element of equalities obligations.
Chris Todd, TAN’s director, said the cuts to active travel risked being “the Jenga block that makes climate, air quality, levelling up and health plans all come tumbling down”.
He said: “Legally binding targets to cut carbon and air pollution rely on big increases in walking and cycling by 2030. But official forecasts predict we’ll miss this ambition by a mile. Rather than increasing effort, ministers seem to be deliberately sabotaging these efforts.”
TAN is trying to crowdfund £40,000 to pay for the case.
The challenge comes amid more general concern among active travel groups that Harper and Sunak have minimal commitment to the issue, and prefer instead to court culture war-related headlines criticising a supposed “war against drivers”.
When a tranche of active travel schemes were unveiled in May, anonymous government sources briefed newspapers that Harper had committed to not funding any low-traffic neighbourhoods and road filtering schemes that make walking and cycling safer.
A DfT spokesperson said: “We cannot comment on possible legal proceedings. We are committed to delivering active travel infrastructure that enables everyone to build healthier journeys into their daily lives. That is why we are investing over £3bn into active travel – more than any other government.”
|
Renewable Energy
|
The International Monetary Fund (IMF) has reached a staff-level agreement with Pakistan on a $3bn standby arrangement, the lender said, a decision long awaited by the South Asian nation which is teetering on the brink of default.
The deal, subject to approval by the IMF board in July, comes after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.
“Praise be to God,” tweeted Finance Minister Ishaq Dar after the deal was announced early on Friday. Dar had said on Thursday the deal was expected any time soon.
With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have spiralled into a debt default in the absence of the IMF deal.
The $3bn funding, spread over nine months, is higher than expected for Pakistan. The country was awaiting the release of the remaining $2.5bn from a $6.5bn bailout package agreed in 2019, which expired on Friday.
The new standby arrangement builds on the 2019 programme, IMF official Nathan Porter said in a statement on Thursday, adding that Pakistan’s economy had faced several challenges in recent times, including devastating floods last year and commodity price hikes following the war in Ukraine.
“Despite the authorities’ efforts to reduce imports and the trade deficit, reserves have declined to very low levels. Liquidity conditions in the power sector also remain acute,” Porter said in a statement.
“Given these challenges, the new arrangement would provide a policy anchor and a framework for financial support from multilateral and bilateral partners in the period ahead.”
Porter also pointed out that liquidity conditions in the power sector remained acute, with a buildup of arrears and frequent power outages.
Reforms in the energy sector, which has accumulated nearly 3.6 trillion Pakistani rupees ($12.58bn) in debt, has been a cornerstone of the discussions with the IMF.
Painful reforms
Islamabad has taken a slew of policy measures since an IMF team arrived in Pakistan earlier this year, including a revised 2023-24 budget last week to meet the lender’s demands.
Other adjustments demanded by the IMF before clinching the deal included reversing subsidies in power and export sectors, hikes in energy and fuel prices, jacking up the key policy rate to 22 percent, a market-based currency exchange rate and arranging for external financing.
It also got Pakistan to raise over 385bn rupee ($1.34bn) in new taxation through a supplementary budget for the 2022-23 fiscal year and the revised budget for 2023-24.
The painful adjustments have already fuelled all time high inflation of 38 percent year-on-year in May.
“The FY24 budget advances a primary surplus of around 0.4 percent of GDP by taking some steps to broaden the tax base and increase tax collection from under-taxed sectors,” Porter said, adding it also ensured space to strengthen support for the vulnerable through a cash handout programme.
He said it will be important that the budget is executed as planned, and authorities resist pressures for unbudgeted spending or tax exemptions in the period ahead.
“This new programme is far better than our expectations,” said Mohammed Sohail of Topline Securities, adding that there were a lot of uncertainties on what will happen after June 2023 as there will be a new government coming to power.
“This funding of 3bn dollars and for 9 months will definitely help restore some investor confidence,” he said.
|
Banking & Finance
|
Container Corp Q2 Review - Lower LLF Provisioning Drives Ebitda; Volume Growth Set To Improve: Motilal Oswal
Container Corporation’s market share at various ports in H1 FY24 stood as follows: JNPT - 60%, Mundra - 36%, Pipavav - 45%
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Container Corporation Of India Ltd.'s reported volume growth of 8% YoY in Q2 FY24. Revenues increased 11% YoY to Rs 21.9 billion in Q2 FY24 (6% above our estimate). Total volumes increased 8% YoY to 1.23 million twenty-foot equivalent unit's with export import/domestic volumes at 0.97 million /0.26 million teus (up 4%/up 26% YoY).
Domestic volumes were 17% above our estimate, while EXIM volumes were largely in line with our estimate.
Blended realisation increased 3% YoY to Rs 17,797/ teu. Exim/domestic realisation stood at Rs 14,888/Rs 28,605 per teu (up 6%/down 9% YoY).
Ebitda margin came in at 24.5% (versus our estimate of 21.3%). Margin was down 80 basis points YoY. Ebitda increased ~8% YoY to Rs 5.4 billion (against our estimate of Rs 4.4 billion).
Land license fee for Q2 FY24 stood at Rs 850 million (Rs 1.3 billion in Q1 FY24). The LLF for H1 FY24 stands at Rs 2.15 billion (compared to Rs 1.91 billion in H1 FY23). Recently, one terminal was surrendered, and another will be partially surrendered in Q3 FY24.
Therefore, the LLF for FY24 and FY25 will be ~Rs 4.5-4.6 billion. Strong operating performance led to growth of 18% YoY in profit after tax (31% above our estimate of Rs 2.7 billion)
Container Corporation's volumes are expected to register double-digit growth, driven by-
pick up in EXIM volumes,
continued momentum in domestic volumes and
commissioning of the dedicated freight corridor from Mundra to Dadri.
As EXIM volumes pick up, the margins are expected to remain strong ahead. Lower than previously estimated LLF provisioning of Rs 4.5 billion for FY24 and FY25 would also support margins.
We raise our earning per share estimates for FY24/25 by ~12%/5%, factoring in higher volume growth and lower LLF provisioning. We reiterate our 'Buy' rating with a revised DCF-based target price of Rs 840.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
|
Stocks Trading & Speculation
|
When the Securities and Exchange Commission denied Grayscale its petition for a Bitcoin ETF, that action was “arbitrary and capricious,” an appeals court ruled today. The SEC ruling has been vacated.
Last year, Grayscale applied for the approval for the fund and was denied. An ETF, or exchange-traded fund, is a pooled investment that is tied to a specific set of assets, which might be an index, a sector, a set of commodities, or something else. Grayscale’s is “something else” — Bitcoin. That could let large investors, such as pension funds, invest in Bitcoin.
The SEC has previously approved ETFs that track Bitcoin futures, but not so-called spot ETFs, which directly track Bitcoin price. Grayscale wanted to convert its Bitcoin trust to an ETF, which would let investors trade shares more freely than the closed-end trust currently allows. Because it’s difficult for investors to trade their shares, Grayscale’s trust often trades below the actual price of the Bitcoin it represents. The switch to an ETF would make it easier to create and destroy shares, so that discount would vanish.
The appeals court found that the Grayscale ETF was treated differently than similar products, such as Bitcoin futures ETFs. If the appeals court’s ruling stands, it may open the door for other Bitcoin ETFs. Firms such as BlackRock and Fidelity have applied for their own ETFs. The SEC has 45 days to appeal this ruling.
|
Crypto Trading & Speculation
|
(Bloomberg) -- Tyson Foods Inc. plunged the most since March 2020 after the biggest US meat company cut its full-year sales forecast on what it described as “challenging” market conditions.
Most Read from Bloomberg
The company said it now sees revenue of $53 billion to $54 billion this year, below its earlier forecast of $55 billion to $57 billion. The midpoint of Tyson’s revised range is lower than the lowest of analyst estimates compiled by Bloomberg. Shares fell 15% to $51.38 at 11 a.m. in New York to its lowest intraday price in more than three years.
“I can’t remember a time when our business faced the highly unusual situation that we’re currently seeing, where all three of our core protein categories – beef, pork and chicken —- are experiencing market challenges at the same time,” Chief Executive Officer Donnie King said Monday on the company’s quarterly earnings call.
Tyson and other meat producers have been squeezed by record-high cattle costs and elevated animal feed prices, just as inflation-hit consumers have been trading down to cheaper foods. That’s a shift from recent years, when disruptions linked to the Covid-19 outbreak resulted in record profits for meat companies.
The protein producer posted an unexpected loss in its second quarter and also cut its margin guidance for the full year, according to its Monday earnings statement. A 3.3% increase in sales was less than analysts expected, with a 2.9% drop in beef revenues blunting higher volumes for chicken and pork.
“This was a far worse quarter than we (or the Street) expected, for reasons not yet entirely clear to us,” Ken Goldman, an analyst at JPMorgan Chase & Co., said in a note. He added that Tyson paid more to feed its chickens than a year ago, even though “most observers were expecting this item to be much less of a headwind.”
(Updates shares and adds analyst comment in fifth paragraph.)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.
|
Consumer & Retail
|
Labour has pledged to cover public land and housing estates with solar panels as part of a net zero plan aimed at cutting £93 billion from the nation’s energy costs.
Sir Keir Starmer, the Labour leader, said he would win support for new “clean power” infrastructure by making sure that local people experience the benefits, including through discounts on bills.
On Monday, the Labour leader will launch the latest of the party’s five “national missions” for government – this time on its vow to “make Britain a clean energy superpower”.
To hit its target of achieving a clean power system by 2030, Labour will announce that its proposed publicly-owned energy company, GB Energy, will strike deals with devolved governments, local mayors and the private sector to plant renewables infrastructure in cities, towns and villages.
‘Cheaper clean power’
Under a “Local Power Plan”, the party will commit to GB Energy developing up to 8GW of renewable energy projects – more than twice the size of the world’s largest offshore wind farm – within five years.
This could include partnering with councils to put solar panels on public land or the roofs of housing estates or letting communities come forward with projects owned by local people.
“Co-investment” opportunities will meanwhile be offered to the private sector for larger projects, such as onshore wind and solar farms.
The party said the crucial condition for investment would be letting communities feel the benefit of clean power in “direct cost of living support”, such as reduced energy bills.
To get the projects off the ground, GB Energy will make £600 million available in funding for local authorities, while up to £400 million in low-interest loans will be offered each year for communities – with the loans recycled back to GB Energy to invest in future projects.
Sir Keir said: “The next Labour government will be builders, not blockers when it comes to cheaper clean power. I want local people to see the benefit of that power and with Labour they will.
“We will bring power home with our GB Energy, a publicly-owned energy company building clean power for the first time in generations, with the profits flowing back to the British people.
“People want to know what our plans mean for their community: from onshore wind in Wales, to rooftop solar panels in our cities, to community energy in Scotland, Labour will seize the power of Britain’s sun, wind and water to put cheaper clean power in the grid and profits in the pockets of the British people.”
Ed Miliband, the shadow energy secretary, said: “In every other country driving forward with clean power, publicly-owned energy generation is creating wealth and benefitting local people, but not Britain.”
Earlier this month, Labour was forced to backtrack on a flagship economic plan to spend £28 billion a year on new green jobs and technology.
Rachel Reeves, the shadow chancellor, admitted that the pledge would not be met until after 2027 because “financial stability has to come first”.
She blamed the watering down of the pledge on the Tories’ stewardship of the economy.
“We will get to the investment that is needed. But we’ve got to do that in a responsible way,” she said.
|
Renewable Energy
|
Working age benefits could be cut in real terms as part of the Government’s drive to reduce public spending and fund tax cuts, The Telegraph understands.
Whitehall sources have told The Telegraph that ministers are considering uprating benefits in line with earnings instead of inflation next year, in a move that could save £1 billion.
While Rishi Sunak is likely to stick with the pensions triple lock - which raises state pensions by the highest of inflation, average earnings growth or 2.5 per cent - working age benefits are viewed as a possible area to squeeze out savings, sources said.
While disability benefits are required under law to go up in line with the consumer price index (CPI) figure for inflation, the Work and Pensions Secretary Mel Stride has wider discretion over what happens to other benefits, and will formally consider changes for next year as part of a review in the autumn.
Working age benefits like Universal Credit are usually uprated in April in line with the CPI figure for September, but discussions are already taking place in Whitehall about potentially increasing them in line with wages growth if this is below inflation.
A Whitehall source said that the Government was gearing up for a “fight about what to do with benefits”. “The discussion will be about increasing working age benefits in line with earnings,” they said.
The source pointed out that while inflation was running at roughly 10 per cent last autumn compared to earnings growth of about 5 per cent, inflation currently stands at 8.7 per cent with regular pay rising by 7.2 per cent.
“The gap is smaller, but it’s still a decision that will need to come,” they said.
Another Whitehall source familiar with discussions on benefits said there were talks “here and there about what the options would be as and when the decision point comes, and how the decision can be approached”.
They said the decision would involve “weighing up the cost of living pressures versus what the fiscal situation is and what is the fairest way to approach it”.
“It will be a more live discussion than it might be if we were in a 2 per cent inflation world,” they said. However, they emphasised that it was still “early days” and that the metrics involved were “volatile”.
Last autumn, the then prime minister Liz Truss came close to uprating benefits in line with earnings but was stopped from doing so when Cabinet ministers such as Penny Mordaunt broke ranks to publicly warn against the idea.
A source close to Ms Truss told The Telegraph that there was “no question” that she still believed that benefits should rise in line with earnings, saying she thought it was “unfair” if benefits were “increased at a faster rate than people’s wages”.
Linking benefits to earnings would appeal to others on the Right of the Tory Party.
Craig Mackinlay, the MP for South Thanet, told The Telegraph that he would “fully support” such a policy.
“I know we’re in a higher inflation environment and I could appreciate the arguments for this very stiff rise last year of 10.1 per cent,” he said. “But on a philosophical level, we’ve tried in 13 years in government to try and make the gap between working and not working as wide as we possibly can.
“I want measures that are getting people into work, to make work pay and to be worthwhile doing… that is not unconservative.”
He also said it would be consistent with the Government’s policy on public sector pay, where ministers have stressed the need for fiscal discipline and pushed for salary rises below inflation. “This is an extension of the public sector isn’t it? People on benefits,” Mr Mackinlay said.
However, the move would also carry political risks. Julian Jessop, a fellow at the Institute of Economic Affairs, said he believed the case for uprating in line with earnings was “weaker” than last year.
“The gap between inflation and earnings growth will be much smaller, if there is one at all. So any fiscal savings would be much smaller too,” he said.
Mr Jessop said that on the latest data the first year saving might exceed £1 billion, but that it could fall below this come September.
He also said the “political costs” would be “greater” than last year. “A Tory government would be cutting the real value of benefits in the run up to a general election – a gift for Labour,” he said. “It would also look very odd to link benefits to the lower of inflation or average earnings growth while at the same time recommitting to the pensions triple-lock,” he added.
A Department for Work and Pensions spokesman said: “As is the usual process, the Secretary of State will conduct his statutory annual review of benefits and state pensions in the Autumn, using the most recent prices and earnings indices available.”
|
Inflation
|
A County Antrim woman who had to choose between caring for her husband or her sister has called for greater support.
Miriam Murray, who is also recovering from cancer, said the appointment of a dementia carers co-ordinator by the charity Praxis was "progressive".
But she feels more needs to be done to support unpaid carers.
More than 220,000 people provide unpaid care for a sick or disabled family member or friend in Northern Ireland, about one in eight people.
Caring for people at home reduces pressure on the health and social care system including reducing the number of people in residential care and hospital.
'I am not the person I was'
According to Miriam, who is 77, her life was "torn apart" when she had to choose to care for her husband Ian, 89, at home while her sister Jennifer, 73, was placed in assisted living accommodation.
Ian, who was an engineer as well as a keen cyclist and photographer, was diagnosed with vascular dementia in 2020 while Jennifer is living with young onset Alzheimer's disease.
Miriam said she had to "let one go" to look after the other.
"It is just exhausting; I am not the same person that I was."
When asked if she was patient with Ian, she laughed and said: "I am working on that."
To help people like Miriam, Praxis, the largest registered care charity in Northern Ireland, has for the first time appointed a Dementia Co-Ordinator to focus entirely on carers.
While it supports people with mental health, learning disabilities, autism and dementia, the demand for support from carers has also increased.
'Neglected and forgotten'
Tracy Smyth, who took up the post in January, said carers are neglected and are a forgotten part of society.
"They are the glue that keeps it all together. They do so much for caring and our health care system is so much under pressure - without our carers we just couldn't cope," she said.
Ms Smyth's post is funded by the Department of Health for two years. It is not clear what will happen after that.
"Nobody signs up to be a carer. It is a journey that most loved ones take on with little or no skills and the very least they deserve is someone to be there to offer them that advice and help learn more about the condition and who they can turn to find support," Miriam said.
It is early days for Ms Smyth and Miriam, who are still getting to know one another and working out what exactly Miriam needs.
Miriam said having someone like Ms Smyth to signpost where she can get help for her family is a great start.
There is also advice about how to organise people to sit with her husband while she visits Jennifer.
Miriam said she takes "each day as it comes".
"That is the thing about carers - you are locked into a situation that you have no knowledge or experience of unless it has been in your family before. I feel completely boxed in and I have lost my own identity," she said.
The last carers strategy for Northern Ireland was published almost two decades ago.
According to Ms Smyth, the document is out of date and does not reflect the lives and needs of unpaid carers in 2023.
Last month, the Coalition of Carers Organisations Northern Ireland published a report which said it was "high time" that Northern Ireland made a start and began to treat unpaid carers as a strategic priority for government and society in general.
According to Ms Smyth, Northern Ireland is lagging behind the rest of the UK and no-one whatever their circumstances should battle the dementia journey alone.
|
Nonprofit, Charities, & Fundraising
|
With help from Derek Robertson
The revolution will not be copyrighted.
Everyone from billionaire moguls to anonymous coders working in the digital equivalent of their parents’ garage is betting on a future where more of the computer code running the world is free and open-source.
Open-source software is nothing new. But with coding know-how and tools for collaborative software development more plentiful than ever, more code is being given away for free, for a mix of altruistic and strategic reasons. The trend is shaping recent developments across fields like AI, social media and private communications.
An online landscape that increasingly runs on open-source code presents a number of regulatory challenges, though. Open-source tools have the potential to evolve more rapidly than code housed in private companies since anyone is free to take the code and develop it. The added level of transparency allows users to ensure a piece of software does not contain secret encryption backdoors that are sometimes used for government surveillance. And open-source code is also more difficult to ban since new instances can pop up if regulators attempt shut down a website or tool that uses it.
Combined with other decentralizing features, these open-source projects have the potential to disrupt not just Silicon Valley’s business model, but the governance models of Washington and Brussels.
In some cases, open-source code could accomplish regulators’ goals for them, for example, by disrupting software monopolies by offering free alternatives. In other cases, open-source tools are making it harder for law enforcement to monitor private communications, and could stymie efforts to enforce limits on the uses of artificial intelligence.
The latter issue reared its head earlier this month when a memo leaked from Google that reportedly bemoaned the success of open-source large language models in keeping pace with tech companies’ privately owned AIs.
Open-source, decentralized social networks are also gaining steam — following censorship controversies at Twitter and Elon Musk’s chaotic takeover last fall — as alternatives to those owned by tech giants.
On Thursday, MeWe, a social network with 20 million users, announced it was beginning to give new users a “universal handle” as part of its migration to a Web3 setup that uses Frequency, a blockchain, and DSNP, an open-source protocol for social networks. According to MeWe, the universal handle is used to create people’s social identity and give them control of their own data.
Both Frequency and DSNP are products of real estate developer Frank McCourt, former owner of the Los Angeles Dodgers.
McCourt argues that his open-source protocol, developed by his Project Liberty nonprofit, is more compatible with American values than the existing business models of social media giants, because it gives individual users greater control over their data and online identity. Amplica Labs, a part of McCourt’s family company, McCourt Global, contributed to the development of both Frequency and DSNP.
“You can’t have democracy with autocratic technology,” he told DFD during a sit-down last week.
Other decentralized, open-source social media projects have seen user growth in recent months on the back of Twitter’s controversies and discontent with other social media giants.
They include NOSTR, an open-source protocol created by a pseudonymous developer that is favored by Jack Dorsey and popular among Bitcoiners, as well as Mastodon, which is popular among academics and journalists.
Following its rollout to Android users last month, the invite-only beta version of BlueSky has been getting online buzz as celebrities test-drive the platform. The decentralized social media project was started by Dorsey while he was still at Twitter.
These alternatives remain tiny, but the success in recent years of disruptive open-source projects like Bitcoin, Ethereum, and the popular encrypted messaging app Signal have inspired grand ambitions.
While Google famously adopted an unofficial motto of “Don’t Be Evil,” moguls today are incorporating open-source ideas into more elaborate statements of philosophy, like Dorsey’s “Web5” concept.
In December, crypto exchange Bitfinex, sister company of stablecoin issuer Tether, released its “Freedom Manifesto,” which touts the development of distributed, open-source software to further the libertarian ideas of Austrian School economists and cypherpunks — the philosophical forerunners of Bitcoin.
To that end, Tether and Bitfinex have funded the development of HolePunch, an encrypted, peer-to-peer communication platform that made its code open-source in December.
“This technology is actually the Bitcoin of communications,” Paolo Aordino, the Lugano, Switzerland-based chief technology officer of Bitfinex and Tether, told DFD.
Open-source code can make software tools freely available and open to audits, but it is not a silver bullet for improving the internet.
“Open-source allows for a modicum of transparency,” Meredith Whittaker, president of the Signal Foundation, which oversees the messaging app, told DFD. “That can be good. It is not an end in itself.”
Whittaker said there are limits to the transformative potential of freely available code, such as the need for servers to host the code/infrastructure, and the fact that the tech ecosystem is dominated by massive private companies.
“It’s really important to not conflate open source with outside of the tech industry,” Whittaker said.
Indeed, while open-source projects tend to employ lofty rhetoric, their designers often look to build for-profit companies on top of them. While that fact deals a blow to the dreamers, it may also offer a point of entry to regulators worried about how they will get a handle on an open-source world.
A new competitor has entered the ongoing race between open-source and closed AI models.
BLOOMChat, a ChatGPT-like tool from the AI company SambaNova, launched at the end of last week with some impressive features — namely, a relatively sophisticated multilingual chat trained on 176 billion parameters. SambaNova’s announcement touts that BLOOMChat was “preferred 66% of the time compared to mainstream open-source chat LLMs across 6 languages in a human preference study,” and that it even performs competitively with OpenAI’s GPT-4.
This particular tool might not be the one to knock ChatGPT off its throne. But its power under the hood — and apparent ability to compete with the more popular tech in a blind test — reflect how quickly the Davids of the AI world are leveraging technological advances to catch up with the Goliaths. — Derek Robertson
After last week’s flurry of AI action on the Hill, one of Silicon Valley’s top legislators used today’s Morning Tech newsletter to take a wide-lens view of the regulatory landscape surrounding artificial intelligence.
Speaking to POLITICO’s Brendan Bordelon, Rep. Zoe Lofgren (D-Calif.) covered everything from compensation for content creators whose work is used to train AI, to the second-order question of where to even begin when it comes to regulating AI: “This is moving like a freight train,” Lofgren said. “How we proceed in a way that’s effective is not yet known to us. And I don’t think it’s known to the technologists either. Altman can’t come up with it.”
In the meantime, she’s apparently doing her best to use her role in Washington to coordinate behind the scenes between the AI and music industries. Lofgren described to Brendan her efforts to convene OpenAI’s Sam Altman and the architects of 2018’s Music Modernization Act, which rewrote copyright law for the streaming era, to see if regulators and industry can work together more proactively in the age of AI-generated music than they did in that one. — Derek Robertson
- Service robots are a permanent part of the post-pandemic landscape.
- AI-generated, false information is already proliferating across the internet.
- The people training ChatGPT have to see some pretty messed-up stuff.
- Check out some scenes from this year’s scaled-back Bitcoin party in Miami.
- Singapore badly needs AI talent for its financial sector.
Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Mohar Chatterjee ([email protected]); Steve Heuser ([email protected]); and Benton Ives ([email protected]). Follow us @DigitalFuture on Twitter.
|
Crypto Trading & Speculation
|
Cello World IPO Allotment Finalised: Where & How To Check Allotment Status
Follow steps to check allotment status, subscription details and more
Cello World Limited recently offered its shares to the public for the first time through an Initial Public Offering (IPO). This IPO was open for subscription from October 30, and closed on November 1. The company aimed to raise Rs 1,900 crores by selling 2.93 crore shares to investors. The IPO price ranged from Rs 617 to Rs 648 per share, and investors needed a minimum of 23 shares to apply, which amounted to Rs 14,904 for retail investors.
The IPO has been subscribed 38.90 times as of 5:06 p.m. on Wednesday, the final day of its subscription.
Cello World IPO Allotment Date
The allotment of shares for the Cello World Limited are likely to be finalized on Monday, November 6. As per the latest update the IPO has now been finalised.
*This is a tentative date and is subject to change.
Cello World IPO Listing Date
Shares of Cello World Limited are likely to be listed on both the stock exchanges (BSE and NSE) on Thursday, November 9.
*This is a tentative date and is subject to change.
Where to check Cello World IPO allotment status
You can check the allotment status of Cello World Limited IPO on the official website of the IPO registrar, Link Intime India Private Ltd. or on the BSE website.
How to check Cello World IPO allotment status on Link Intime website?
Visit the official website of Link Intime India Pvt Ltd here: https://linkintime.co.in/mipo/ipoallotment.html
Choose "Cello World Limited" from the list of companies.
In the Selection Type, choose either Application number, Dp Client ID, or PAN and enter the required information.
Click on the "SUBMIT" button.
Download or print the allotment status for your records.
How to check Cello World IPO allotment status on BSE website?
Go to the official BSE website: https://www.bseindia.com/investors/appli_check.aspx
Select the issue type as 'Equity.'
Choose "Cello World Limited" from the dropdown menu.
Enter your application number or PAN (Permanent Account Number).
Complete the 'Captcha' for verification.
Click on the "Search" button to view your allotment status.
Download or print the allotment status for your records.
Cello World IPO Subscription Status
Subscription Status Day 3:
Total Subscription: 38.90 times
Institutional investors: 108.57 times
Non-institutional investors: 24.42 times
Retail investors: 3.06 times
Reservation portion shareholders: 2.60 times
Subscription Status Day 2:
Total Subscription: 1.44 times
Institutional investors: 0.05 times
Non-institutional investors: 4.35 times
Retail investors: 1.04 times
Reservation portion shareholders: 1.25 times
Subscription Status Day 1:
Total Subscription: 0.38% times (or 38%)
Institutional investors: 0.02%
Non-institutional investors: 0.94 times (94%)
Retail investors: 0.35 times (35%)
Employee Reserved: 0.42 times (42%)
Cello World Limited IPO Timeline (Tentative Schedule)
IPO Open Date: Monday, October 30
IPO Close Date: Wednesday, November 1
Basis of Allotment: Monday, November 6
Initiation of Refunds: Tuesday, November 7
Credit of Shares to Demat: Wednesday, November 8
Listing Date: Thursday, November 9
Cello World Limited IPO Issue Details
Total issue size: Rs 1,900.00 crores
Face value: Rs 5 per share
Offer for sale size: 29,320,987 shares
Shares for offer for sale: 29,320,987 shares
Price band: Rs 617 to Rs 648 per share
Lot size: 23 Shares
About Cello World Limited Limited:
Cello World Limited is a renowned Indian consumer product company that operates in three main categories, including writing instruments and stationery, molded furniture, and consumer housewares and related products. The company has over 60 years of experience in the consumer product industry, allowing them to understand consumer preferences and choices better.
As of March 31, 2023, the company has 15,841 stock-keeping units ("SKU") across all product ranges and a national sales distribution team with 683 members. Cello World Limited is known for its strong market position, diverse product ranges, and an experienced management team with domain expertise.
|
Stocks Trading & Speculation
|
The California Reparations Task Force is asking the Democrat-controlled state legislature to eliminate interest on past-due child support, as well as any back child support debt for Black residents of the state.
In its final report released last week, the group claimed "discriminatory" laws "have torn African American families apart," and that one effect of that is the "harms" caused by "the disproportionate amount of African Americans who are burdened with child support debt."
The nearly 1,100-page document stated that Black Californians represent a larger percentage of those who owe child support debt than their proportion of the state's population.
It also claimed the 10% interest the state charges on back child support "hinders" their ability to finance further education, attend job training, find employment and maintain housing because of the legal consequences of not paying such debt.
The report cited a 2003 California Department of Child Support Services study that estimated 27% of owed child support in the state was unpaid interest, that those who owed child support had lower incomes than "the typical California worker" and that such interest required a larger portion of their income to actually pay the debt.
"The Task Force recommends that the Legislature enact legislation to terminate all interest accrued on back child support, requiring only the payment of the principal owed. At a minimum, the proposal recommends that the Legislature eliminate the prospective accrual of interest on child support debt for low-income parents," the report said.
"The Task Force further recommends that the Legislature amend Family Code section 17560, the 'offers in compromise' provision, to allow for offers in compromise and forgiveness of child support debt based solely on a parent’s fnancial (sic) circumstances and ability to pay," it added.
The report is a culmination of two years of research done by the task force into what it says is the historical discrimination faced by Black Californians and their ancestors in the state.
It also offers a broad account of the ways it accuses the state of wronging descendants of Black slaves.
The state legislature will now determine what aspects of the report, including monetary compensation for Black residents, it will approve or deny.
|
Inflation
|
For anyone who anticipates retiring one day, planning is critical. This means saving throughout your career, calculating your future Social Security benefits and anticipating your expenses in retirement. But retirement planning for high-net-worth individuals can be even more complex. These people, who have at least $1 million in cash or investable assets, have a lot to think about when it comes to planning for retirement.
Below, we break down how you should plan for your golden years if you’re considered a high-net-worth individual and the steps you can take to maximize this time of your life. Beyond these strategies, consider enlisting a financial advisor to tailor a retirement plan that’s right for you.
What is Considered a High Net Worth in Retirement?
A high-net-worth individual or HNWI is generally anyone with at least $1 million in cash or assets that can be easily converted into cash, including stocks, bonds, mutual fund shares and other investments. The U.S. Securities and Exchange Commission (SEC) uses a slightly different definition of a HNWI for its Form ADV documentation. The SEC considers anyone with $750,000 in investable assets or $1.5 million in net worth to qualify as one.
Not only does being a HNWI mean you have considerable wealth, it also means financial institutions will extend exclusive services to you, including access to specialized investment accounts and financial advisors who cater specifically to the needs of the wealthy.
Now on to steps you may consider taking as you plan for retirement as a HNWI.
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Calculate How Much You Need to Save
Retirement means that you’ll no longer receive a regular paycheck for full-time work. As a result, you’ll need to have a significant sum of money saved to cover your expenses and fund your lifestyle.
But how much? Everyone’s answer to this question will be different. It depends on a number of variables, including your fixed monthly expenses, discretionary spending, where you live, streams of retirement income and life expectancy. This shouldn’t be an arbitrary number, though. You’ll need to have a good estimate of your monthly/annual income needs in order to calculate just how large of a nest egg you’ll need to build.
However, spending in retirement often doesn’t remain static. Researchers at the Center for Retirement Research at Boston College found that household consumption falls each year by an average of 0.75-0.80% for retirees, reaching double digits 20 years into retirement. Then again, wealthier retirees typically don’t reduce their spending as much as others, the study found. Of the retirees sampled in the CRR study, the wealthiest reduced their consumption by only 0.35% per year, while those in the middle and bottom brackets required more dramatic declines in consumption, spending 0.8% and 1% less per year, respectively. As a HNWI, you may anticipate your annual spending falling by just 10% over the course of a 25-year retirement.
After calculating your monthly expenses and projecting your post-retirement consumption rates, you’ll also need to have a sense of how long you may live. This may feel uncomfortable, and even a bit morbid to think of how much life you have left to live, but how many years of retirement you need to fund is a vital part of the equation. The good news is that it’s relatively easy to estimate using the Social Security Administration’s Life Expectancy Calculator. This online tool offers a life expectancy estimate based on your current age and future ages.
Taking consumption trends, life expectancy and your individual spending habits into account, you should be able to calculate an accurate savings goal.
Max Out Your Retirement Accounts
Whether you’ve begun seriously planning for retirement or not, contributing to a retirement account is a must. As a high-net-worth individual who presumably earns a substantial income, you should max out your employer-sponsored plan, as well as an IRA. Even if your income precludes you from deducting these contributions from your paycheck, your investment earnings will still grow tax free.
In 2022, the IRS allows individuals to contribute up to $20,500 to a 401(k) and $6,000 to an IRA. People ages 50 and over can contribute an extra $6,500 to their 401(k) and $1,000 to their IRA.
As mentioned above, you won’t be able to deduct your IRA contributions from your income in 2022 if you already have access to a workplace retirement plan, file single and make over $78,000. Married couples who file jointly cannot deduct IRA contributions if their combined income exceeds $214,000 and one person has access to a workplace retirement plan. However, a non-deductible IRA can still be an effective way to save for retirement, especially when paired with a maxed-out 401(k).
Plan for Medical Expenses and Long-Term Care
Beyond housing, travel and the other typical expenses that you’ll incur in retirement, health care and long-term care are two vital areas that you must also consider.
Researchers from the Employee Benefit Research Institute recently calculated the savings that different retirees need to cover the cost of various medical expenses: Medicare Parts B and D premiums, Part B deductibles, Medigap Plan G premiums and out-of-pocket spending on prescription drugs. The EBRI study concluded that a married couple in the 90th percentile of prescription drug needs must save $361,000 to maintain a 90% chance of having enough money to cover their medical bills in retirement. However, people who spend less on prescription drugs can get by with less. A 65-year-old man with median prescription drug expenses and $114,000 in savings has a 75% chance of having enough for medical expenses throughout retirement. The same applies to a woman with $131,000 in savings.
The findings of the EBRI analysis not only quantify medical expenses in retirement, but also underline the importance of saving for these eventual costs. Contributing to a health savings account (HSA) is one way to do so in a tax-efficient manner. While HSAs are only available to people enrolled in high deductible health plans, these savings tools can not only help you save for medical expenses, but also serve as long-term savings vehicles for retirement. That’s because you can typically invest a portion of your HSA balance in mutual funds, stocks and other assets. And here’s the catch: you won’t be taxed on your investment gains!
Unlike contributions made to flexible savings accounts, an HSA balance carries over from year to year and never lapses, meaning you can build a large balance and use it to pay for the medical care you may need in retirement.
As a high-net-worth individual, you should consider making the maximum contribution to an HSA, if you have access to one. In 2022, the IRS allows individuals to contribute up to $3,650 ($7,300 for families).
But your personal care needs in retirement may go beyond traditional health care. The EBRI analysis did not take into account long-term care, like homemaker services and home health aides. Medicare generally does not cover these services, which can be costly and severely eat into your retirement savings. For example, the national median cost of homemaker services in 2021 was $4,957 per month, while the median monthly cost of an assisted living facility was $4,500, according to Genworth. Meanwhile, the monthly cost of a private room at a nursing home exceeded $9,000.
The good news is that not everyone will require this type of care. CRR data indicates that around 17% of retirees won’t need any long-term care. However, the flip side is that approximately a quarter of retirees will have severe needs, with the remaining people needing either minimal or moderate care.
Long-term care insurance can help blunt the financial blow that these important expenses can deal to retirees. Then again, you may be able to absorb the cost of long-term care without insurance, depending on your level of wealth.
Minimize Your Tax Liability
Optimizing your tax strategy is an important element of an effective retirement plan, and can include everything from delaying your 401(k) withdrawals to moving to a more tax-friendly state. Minimizing your tax liability means having more money to spend in retirement or to leave to loved ones.
One strategy for doing so is converting your traditional IRA into a Roth account. While 401(k)s and traditional IRAs are subject to required minimum distributions (RMDs), Roth IRAs are not. However, since the IRS bars individuals who earn more than $144,000 ($214,000 for couples who file jointly) from contributing to a Roth IRA in 2022, you’ll need to convert your traditional IRA into a Roth account using a backdoor Roth conversion. While you’ll pay income taxes on the money in the year you complete the conversion, the maneuver will mean you won’t have to start withdrawing the money at age 72 with RMDs. As a result, your money can stay invested for as long as you like. In fact, you can simply pass the account on to beneficiaries as part of your estate.
However, it should be noted that the backdoor Roth conversion has recently been the target of Democrats’ legislative plans. President Joe Biden’s Build Back Better plan sought to close this legal loophole, but the massive $1.75 trillion spending bill stalled in Congress. It’s possible that the plan, and the provision ending backdoor Roth conversions, could be resurrected at some point.
For a retiree with a traditional IRA or 401(k), a qualified charitable distribution (QCD) can be a particularly effective way to avoid paying taxes on your RMDs. Instead of making the required annual withdrawals from your IRA, you can donate the money to charitable organizations using a QCD. This can be especially useful for retirees who already make charitable donations. Rather than donating money that’s already been taxed, a QCD allows you to send pretax dollars to an eligible charity while satisfying your RMD obligations. However, it should be noted that QCDs are not available within 401(k) and 403(b) plans. You’ll need to roll over assets from these accounts into a traditional IRA to complete a QCD.
For high-net-worth individuals who live in high-tax areas, you may want to consider relocating to a state that does not tax income. Florida, for example, is a haven for retirees since it does not tax wages, retirement income or Social Security. In addition to Florida, the following states either have no state income tax, do not tax retirement income or offer significant tax deduction on retirement income:
Alaska
Georgia
Mississippi
Nevada
South Dakota
Wyoming
Create an Estate Plan
While most of our focus has been on saving and preserving money for retirement, it’s also important to consider what happens to your assets when you’re gone. That’s where estate planning enters the equation. Estate planning is the process of officially arranging how your assets and property will be distributed upon your death.
As a high-net-worth individual, your financial situation will likely require more than just a standard will. Setting up a trust can protect your assets from creditors, reduce your estate’s tax liability and enable you to place restrictions or conditions for how your assets are passed to beneficiaries. A trust can also help your beneficiaries avoid probate, a legal proceeding by which a deceased person’s will is validated by a court. This process can be lengthy and the legal fees required for it can chip away at a decedent’s estate.
The type of trust you choose to establish will depend on your specific needs. For example, a charitable trust can be created specifically for the purpose of charitable giving. An A/B or bypass trust, on the other hand, allows a married couple to split their assets between two trusts and avoid estate taxes.
While there are many different types of trusts, they all must name a trustee who will oversee the trust for you. As the grantor (the person creating the trust), you may also serve as the trustee if the trust is revocable. However, if you create an irrevocable trust (one that cannot be changed once it’s created), you’ll need to appoint someone else as your trustee. All trusts also must name beneficiaries, the people who are in line to receive assets or property from the trust.
The process of setting up a trust is generally more involved than writing a simple will. As a result, working with an estate planning attorney or financial advisor who specializes in estate planning can be helpful.
Bottom Line
Planning for retirement can be a complicated and extensive process. And if you’re fortunate enough to have a high net worth, you’ll want to spend even more time planning for this important period of your life. An effective high-net-worth retirement plan includes calculating the savings you’ll need to support your lifestyle, optimizing your tax strategy, planning for medical care and long-term care, maxing out your retirement accounts and creating an estate plan that protects your assets.
Retirement Planning Tips
Sometimes it just pays to have a professional in your corner. A fiduciary financial advisor can help you plan for the future and act in your best interests. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
It’s important to gauge your progress from time to time. SmartAsset’s retirement calculator can help you determine whether you’re on track to hit your savings goals by estimating how much money you’ll have by the time you’re ready to retire.
While annuities are sometimes maligned for being complex and expensive, they can offer a guaranteed stream of income in retirement and superior peace of mind. The SECURE Act of 2019 made it easier for the sponsors of 401(k)s and other retirement plans to offer annuities as investments. This has led to a steady stream of financial institutions rolling out annuity products that are embedded in 401(k)s.
Don’t miss out on news that could impact your finances. Get news and tips to make smarter financial decisions with SmartAsset’s semi-weekly email. It’s 100% free and you can unsubscribe at any time. Sign up today.
For important disclosures regarding SmartAsset, please click here.
Photo credit: ©iStock.com/kate_sept2004, ©iStock.com/FlamingoImage, ©iStock.com/Dean Mitchell
|
Personal Finance & Financial Education
|
More councils could be at risk of insolvency over the coming months as local authorities in England struggle to fill a £3bn funding black hole caused by inflationary costs and soaring demand for services, town hall leaders have said.
According to the Local Government Association (LGA), several councils are in “an endgame” where, without an increase in funding, they face the prospect of taking increasingly drastic action to meet their legal duty to balance the books.
The cost of providing current levels of council services over the next few months is set to exceed existing available funding by at least £2bn, and by nearly £1bn next year, the LGA said, because of high wage and fuel inflation.
Should inflation stubbornly fail to drop in line with the government’s March budget forecasts, and instead match recent Bank of England inflation projections, it would add an extra £740m to council costs this financial year, and an extra £1.5bn in 2024-25, it said.
Pete Marland, the chair of the LGA’s resources board, said that while recent council insolvencies such as Thurrock, Croydon, Woking and Slough were characterised by governance failures, even well-run councils were “at risk of coming to the end of the road” financially.
After 13 years of cuts, councils were now reaching the point where there was no more room to reduce statutory services, and no financial reserves left to fill budget gaps. “We will start to see more and more councils starting to declare virtual bankruptcy because they can’t cut services any further,” Marland said.
Several councils have only been able to sign off their books for 2022-23 by drawing down one-off, multimillion-pound lump sums running into millions of pounds from reserves. While this keeps them afloat for now, it leaves them vulnerable should they be unable to cut costs in the coming months.
“We are in an endgame where, unless something changes in the medium- to long-term funding settlement, we start to see more and more councils taking more drastic action,” Marland told the FT.
The financial warnings came as the first Labour chair of the LGA for nearly nine years addressed the conference. Shaun Davies, 37, the Leader of Telford and Wrekin council and the youngest ever LGA chair, called for a new local deal for councils – to stabilise town hall services.
He said: “Simplify our funding, cut out wasteful and unnecessary bidding for resources, and give us long-term certainty and stability. With this we can get on with working to improve people’s lives in our villages, towns and cities.”
Davies said councils faced a wave of homelessness from late August after about 8,000 Afghan individuals and families had been served notice to leave the bridging hotels they had been put up in. “We are at crisis point,” he said.
|
Inflation
|
A falling population could make the UK better off in the coming decades despite fears about the burden from older people, according to a study.
Research by the OBR watchdog's chief forecaster suggests that fears about numbers plateauing and coming down could be unfounded.
Professor David Miles said that while many experts believe immigration of younger working people is needed to counterbalance rising numbers of pensioners, that did not take account of the cost of maintaining infrastructure and services.
He concluded that if the population in the UK and other developed countries does reduce 'the economic impacts are likely, on balance, to be positive', with a higher quality of life.
Immigration has been the driver of the UK's population growth over recent decades, with a rise of almost four million to 67million in the decade to 2021.
However, the OBR's estimates based on a lower immigration scenario are that by 2070 the population will drop to around 66million.
If current trends continue the proportion of the population aged over 65 will rise from around 19 per cent to more than 29 per cent by 2072, according to Prof Miles' paper in the Journal of the Economics of Ageing.
Many other developed nations are facing similar situations, with fertility rates falling and lifespans increasing.
Prof Miles posed the question of 'what rate of population growth might generate a level of average consumption per person which is sustainable and as high as it can be?'
'For the UK there are some strong reasons to believe that the answer to that question is likely to be a lower rate of growth than we have seen in recent decades – probably one that would mean a fall in the overall level of the population,' he said.
'In the absence of large inward investment from other economies a country's saving rate has to generate enough investment to replace depreciating assets (roads, buildings, vehicles, factories and computers wear out and need repair or replacement)...
'The higher is population growth the less is your ability to maintain assets per person unless you raise savings – but that means lower consumption.'
Prof Miles said there was evidence that high net migration would improve the fiscal outlook, but a rising population could actually leave Brits worse off.
'If you raise the population fast enough you keep the ratio of the relatively old to the relatively young down,' he wrote.
'But what that leaves out of the picture is the extra resources needed to maintain capital assets per person.
'If the public sector is unable (or unwilling) to do that maintenance then the fiscal position can improve with fast population growth while the quality of life may decline.'
Prof Miles conceded that there were 'many economists who take a radically different view on all this'.
'Some argue that the UK and other European countries need to raise the birth rate or maintain very high levels of net migration so as to counter the impacts of an ageing population,' he said.
'A better strategy to address fiscal challenges that an ageing population brings is to encourage and expect some continued labour force participation among those who in the past might have left the world of work completely.'
|
United Kingdom Business & Economics
|
Rising interest rates have sent profits at HSBC soaring as the banking giant set out plans to hand billions more dollars to its shareholders.
HSBC said profits more than doubled to $7.7bn (£6.35bn) in the three months to September from the same period a year ago, although that was below forecasts.
It said it had benefited from higher interest rates which allow it to charge more to lend to people and businesses.
The Bank of England will announce its latest decision on rates on Thursday.
It is widely expected to hold it for a second month at 5.25%. Prior to that, the central bank had raised interest rates 14 times in a row from a historic low of 0.1%.
Other central banks have also been lifting rates - the US Federal Reserve will publish its latest decision on Wednesday - and HSBC said "the higher interest rate environment" had spurred growth globally.
The company expects its net interest income, which is the difference between what it earns from lending money and the interest it pays to savers and depositors, to rise above $35bn this year. In the latest results for the three months to 30 September, it rose to $9.2bn from $8bn in the same period last year.
Banks have been under pressure to pass on higher interest rates to savers, including from Chancellor Jeremy Hunt who said in June that it was "taking too long".
But Alicia Garcia-Herrero, chief economist for the Asia Pacific region at investment bank Natixis, said that before interest rates began to increase, banks made relatively little from lending money but still had to make payments to people and businesses that deposited money.
"Let's not forget that banks were in dire shape before because they had no room. So they have gone from no room to lots of room," she told the BBC's Today programme.
HSBC said that it would return a further $3bn to its shareholders, taking the total it will hand back to investors to $7bn this year. It will also pay out dividends.
Although the bank's profit jumped over the past three months, the figure fell short of the $8.1bn expected by analysts.
HSBC's operating expenses rose due, in part, to performance-related pay as well as higher technology costs and the impact of inflation.
Last week, the government announced that a cap on bankers' bonuses will be removed. It will come into force on Tuesday, 31 October nearly a decade after the measure was introduced following the 2008 financial crash.
For the last financial year, HSBC trimmed its bonus pool by 4% to $3.4bn.
The bank, which has its headquarters in London, generates most of its income in Asia.
It said it had taken a $500m hit related to China's crisis-hit property market led by Evergrande.
"We continue to monitor risks related to our exposures in mainland China's commercial real estate sector closely, and there remains a degree of uncertainty in the forward economic outlook, particularly in the UK," it said.
Last week, HSBC's Asia-focused rival Standard Chartered reported an unexpected plunge in its third-quarter profit due to a near-$1bn combined hit from its exposure to China's real estate and banking sectors.
|
Interest Rates
|
Half of working private renters are only one paycheque away from potentially losing their home, according to new research.
Some 51% of private renters surveyed by housing charity Shelter said they would not be able to keep paying their rent for a full month from their savings if they lost their job.
More than a third (34%) said they would be unable to pay any rent at all from savings if they became unemployed.
The charity’s survey showed that more than half (55%) of private renters have experienced a rent hike in the past year.
Politicians must commit to building more social homes to address the “precarious” situation that many renters find themselves in, the organisation said.
Shelter commissioned YouGov to survey 1,498 working adults in England in June who are private renters and said the situation appeared to have worsened since a similar survey in 2021.
Those findings showed a lower proportion – 39% – of working renters said they would struggle to pay a month’s rent from their savings if they became unemployed.
The latest survey also suggested more than a third (37%) of the 1,401 private renters who were struggling to pay or are already behind on their rent said an increase in monthly payments is a reason.
A separate survey carried out in March of 2,002 social renting adults in England showed that more than three-quarters (76%) said that without their social home, they would not be able to afford to live in their local area.
Polly Neate, chief executive of Shelter, said: “The severe lack of social homes means swathes of people are barely scraping by as they’re forced to compete for grossly expensive private rentals, because there is nothing else.
“With food and household bills continuing to surge, the situation is precarious for thousands of renters who are one paycheque away from losing their home, and the spectre of homelessness.
“The time for piecemeal policies is over. To jam the brakes on the housing emergency, we need a genuinely affordable alternative to private renting.
“We know social housing works for most people because it’s secure and the rents are tied to local incomes. Instead of empty words, the Government and every political party must sign up to building thousands more social homes.”
A Government spokesman said: “We have a strong track record of delivering affordable homes to rent and buy across the country.
“Since 2010, we have delivered over 659,500 new affordable homes through our £11.5 billion affordable homes programme, including 166,300 homes for social rent.
“Our landmark Renters (Reform) Bill will also deliver a better deal for renters, giving tenants greater security in their homes and preventing large rent increases being used as a backdoor method of eviction.”
|
Real Estate & Housing
|
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.
The digital asset space is still trucking along, while there were some big headlines, the week was arguably a little less chaotic (for now). Check out what caught our attention below.
This week in web3
- A bitcoin spot ETF could open the floodgates for wider crypto demand
- Web3 gaming adoption is skewing toward Asia, and the rest of the world may have to play catch-up
- CoinDesk to cut staffing ahead of potential sale
- Former FTX CEO Sam Bankman-Fried’s bail revoked ahead of October trial
- Worldcoin ignored initial order to stop iris scans in Kenya, records show
The latest pod
Balchunas is the author of “The Institutional ETF Toolbox” and “The Bogle Effect.” He also co-hosts Bloomberg’s Trillions podcast and ETF IQ show.
Spot bitcoin exchange traded funds, or ETFs, have been a hot topic in the crypto community for many years, but have recently gotten more attention due to Jacobi Asset Management listing Europe’s first bitcoin spot ETF almost two years after its initial approval. Meanwhile, the U.S. Securities and Exchange Commission recently delayed deadlines for bitcoin spot ETF applications.
We dive into what’s going on with the bitcoin spot ETFs in the U.S., why it matters and the odds of the SEC approving one in the near future. We also talk about Europe’s first bitcoin spot ETF, how these investment vehicles in general could impact crypto exchanges’ trading volumes and what else is in store for them.
Follow the money
- BitGo raised $100 million in its Series C round at $1.75 billion valuation
- Chain-agnostic platform ZetaChain raised $27 million to improve cross-chain interoperability
- Web3 virtual world platform ZTX raised $13 million in round led by Jump Crypto
- Decentralized stock trading platform Dinari raised $7.5 million in a seed round
- Advertisement-focused web3 startup HypeLab raised $4 million
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.
- The tech jobs market is as strong as it ever was
- 7 VCs explain why the creator economy still has legs
- The pre-seed market is recovering, but investors increasingly have the upper hand
- It’s never too late to align product-market fit metrics with your company’s values
- The startup landscape has shifted dramatically: Accelerators must adapt or fade away
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.
|
Crypto Trading & Speculation
|
Labour's deputy leader has refused to promise to raise the state pension in line with the "triple lock" if her party wins power.
Angela Rayner said it could not commit to the policy, under which pensions rise by the highest of prices, average earnings or 2.5%, until an election.
She added it would need to inspect the country's finances before deciding.
PM Rishi Sunak has also refused to say whether it will be in the next Conservative election manifesto.
He has confirmed, however, it remains current government policy, signalling that it will be used to decide the next increase, due in April next year.
New earnings figures published on Tuesday suggest it could be 8.5% - although Downing Street is yet to commit to a specific figure.
It is understood officials are looking at using a lower figure, by stripping out the effect of bonuses to public sector workers.
Both Labour and the Tories have committed to maintaining the triple lock at every election since the Conservative-Lib Dem coalition government first made the pledge in 2010.
But rising inflation over the past year has made the promise more expensive for the government to maintain, whilst the UK's ageing population has raised questions over its long-term viability.
Asked whether Labour would recommit to the policy ahead of the next election, expected next year, Ms Rayner replied: "We will have to see where we are when we get to a general election and we see the finances.
"We will not make unfunded spending commitments, because Liz Truss did that and she crashed the economy," she told BBC Breakfast.
A Labour Party spokesperson said the party wanted the government to stick to its commitment to maintain the triple lock. They added it was "usual practice" for Labour to see the public finances before making manifesto commitments.
In June, a spokesman for Labour leader Sir Keir Starmer told reporters people could expect to see the party continue its support for the triple lock if it enters government.
The same month, Work and Pensions Secretary Mel Stride said a commitment to maintain the triple lock would "almost certainly" be in the next Tory manifesto.
Labour's pensions predicament
For some time now, Labour's position on the triple lock has been that it won't call for it to be scrapped - but if the government decides to ditch it, then Labour would not commit to restoring it.
That's because this would then clash with the one thing that is a cast-iron commitment from the opposition: not making unfunded spending commitments.
But this formulation hasn't been tested in the glare of publicity, and amid a debate in Conservative ranks about the triple lock's future.
And it is proving tricky.
If Angela Rayner had said "we'll keep it if the Tories do" - essentially the party's position - it would look like Labour was following and not leading.
So she said Labour would have to look at the books before committing - but that it looks like the party is watering down its 2019 manifesto commitment to pensioners.
So the Conservative-supporting papers that would denounce unfunded spending commitments will now also happily denounce Labour for putting a question mark over the future income of pensioners.
And even the most loyal trade union leaders - never mind the Labour leadership's critics - at the TUC conference are calling for an unequivocal promise to keep it.
Under the annual pensions-setting process, the government normally decides in the autumn on the increase that will apply from the following April.
Being committed to the triple lock therefore requires the government to make an unknown spending commitment, since it ties the cost of pensions to future inflation data it cannot forecast precisely.
The figure used to measure rising prices - the CPI figure for September - is unlikely to be higher than the 8.5% figure for average earnings announced on Tuesday.
It means the cost of pensions next year could be around £2bn higher than estimated at the March Budget, when it was estimated that pensions would have to rise by just over 6%.
'Runaway train'
The Institute for Fiscal Studies (IFS), a think tank, has estimated that maintaining the triple lock could cost an extra £5bn and £45bn per year, on top of inflation, by 2050.
Writing in the Times, former Tory leader William Hague urged the two main parties to give themselves the "space" to change stance on the triple lock, calling it "unsustainable" in the long term.
He said neither party could afford to "commit electoral suicide" by promising to scrap it alone, but "sometimes in politics, you have to help each other a bit".
"Everyone on a runaway train has a common interest in letting someone fix the brakes," he added.
|
Inflation
|
Sir Keir Starmer and Rachel Reeves have formally ordered the Shadow Cabinet not to make any unfunded spending pledges ahead of the next general election, i can reveal.
The Labour leader and Shadow Chancellor moved to stamp their authority on the top team with a stern warning that any loose promises by frontbenchers risk gifting the Tories a key political weapon.
The move follows claims by the Institute for Fiscal Studies (IFS), reported by i last week, that the party could struggle to pay for its more ambitious policies without putting up taxes, claims pounced on by the Conservatives.
Reeves and Shadow Treasury Chief Secretary Pat McFadden effectively “read the riot act” to their colleagues during a meeting of Starmer’s top team in the Commons this afternoon.
The pair simultaneously sent the Shadow Cabinet a formal letter that declared “there will be no unfunded spending commitments – if something is not signed off, it is not policy”.
“The economy is the territory on which the next general election will be fought, and Labour’s fiscal responsibility must be the foundation on which we build our campaign, “ the letter stated.
“It is important that everyone appreciates the high level of scrutiny we are under. The test of being trusted with the public finances is not optional – it is essential – and if we pass it, it gives us the space to talk to the electorate about how a Labour Government will transform Britain.”
Reeves and McFadden also warned that “events over recent weeks have told us more about how the Tories are likely to attack us during the election”.
“They are not going to run on their record because it is so abysmal – failing public services, higher taxes and the Tory mortgage penalty. And they won’t run on their plans for the future – because they have none.
“Instead, they will do whatever they can to portray Labour as a risk on fiscal responsibility – on taxation, borrowing and spending. We will not allow this and will not give the Tory Party the election campaign they want to fight..”
The letter states that Starmer and his Shadow Treasury team want to ram home “the importance of demonstrating to the public that Labour can be trusted to treat taxpayers’ money with care, and to grow the economy for the benefit of working people”.
Last week, an i analysis suggested Labour’s policies may require an additional £20bn of funding every year – the equivalent of raising the basic rate of income tax by more than 3p – beyond that already promised through small tax increases such as imposing VAT on private school fees and ending non-domiciled tax status.
Among the spending floated by the party has been the extension of childcare to youngsters aged 11 and under, estimated at between £13bn and £18bn, plus a £5.5bn restoration of the foreign aid spending target to 0.7 per cent of GDP and a £1bn “contingency fund” for the energy industry.
Some Shadow Cabinet ministers have also expressed concern that their loose-lipped colleagues had effectively committed the party to “billions of pounds” in spending on a full Northern Powerhouse Rail link and on extending the HS2 link to Leeds.
Labour insisted that none of the pledges was official party policy, but Tory chairman Greg Hands pounced on the IFS remarks last week to declare Starmer’s “mask has slipped”.
The party’s main capital spending promise is a “green prosperity plan” worth £28bn, a policy that the IFS’s Paul Johnson suggested could drive up the total stock of Government debt, currently totalling just under 100 per cent of GDP.
A senior party figure told i: “We’re doing this to tell the Shadow Cabinet the need for fiscal discipline in everything we do. Truss’s mini-Budget disaster puts an even bigger responsibility on us to stay disciplined.”
Reeves and McFadden’s letter added that the Conservatives “are not going to run on their record because it is so abysmal – failing public services, higher taxes and the Tory mortgage penalty”.
“And they won’t run on their plans for the future – because they have none. Instead, they will do whatever they can to portray Labour as a risk on fiscal responsibility – on taxation, borrowing and spending. We will not allow this and will not give the Tory Party the election campaign they want to fight.”
One source said after the meeting that there was “real agreement on spending discipline on our side and to take the fight to the Tories over the mini-Budget of last year, and its ongoing impact on mortgage holders.”
|
United Kingdom Business & Economics
|
NEW YORK -- Donald Trump will be back in court next week for his New York civil fraud trial, a person familiar with the former president’s plans told The Associated Press on Thursday, setting up a potential face-to-face showdown with fixer-turned-foe Michael Cohen, who is expected to testify.
The 2024 Republican front-runner voluntarily attended the first three days of the trial last week, turning the Manhattan courthouse into a campaign stop as he watched testimony and complained to TV cameras about the case, which cuts to the heart of his image as a successful businessman and threatens to cost him control of marquee properties such as Trump Tower.
Trump is expected to attend the non-jury trial Tuesday through Thursday next week, according to the person who confirmed the plans, which were first reported by news website The Messenger. The person spoke to the AP on condition of anonymity before an official announcement.
“It’s been 5 years since we have seen one another," Cohen said via text message, adding: "I look forward to the reunion. I hope Donald does as well.”
Trump’s trip to the trial last week attracted hordes of news media and led to enhanced security measures at the courthouse, including extra screening checkpoints, metal barricades along the streets and Secret Service agents lining the courtroom walls.
Trump seethed at the defense table last week as a lawyer from New York Attorney General Letitia James’ office blasted him as a habitual liar. Outside, Trump decried the trial a “sham,” a “scam,” and “a continuation of the single greatest witch hunt of all time.” After Trump maligned a key court staffer on social media, the judge called him into a closed-door meeting, issued a limited gag order and ordered him to delete the post.
Trump believes his presence in the courtroom is helping his defense. He is angry the state is trying to seize control of a business he spent his life building and is eager to be able to argue his side of the story before cameras as he prepares for an appeal. He's also used the appearances and the attention they've generated to energize his supporters as the fight for the Republican nomination kicks into high gear, and his campaign has sent out fundraising appeals tied to the proceedings.
Cohen is expected to be on the witness stand Tuesday or Wednesday at the trial in James' lawsuit, which alleges Trump, his company and top executives deceived banks, insurers and others by massively overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing loans.
So far, longtime Trump executives Allen Weisselberg and Jeffrey McConney have testified, along with Donald Bender, a former partner at the outside accounting firm that worked on Trump’s financial statements, and Nicholas Haigh, a former bank risk management official who approved Trump for hundreds of millions of dollars in loans based in part on the statements. Another Trump executive, Patrick Birney, took the stand late Thursday and will return Friday.
Cohen, a key witness in the state attorney general's case, spent a decade as Trump’s fiercely loyal personal lawyer before famously turning on him in 2018 amid a federal investigation that sent Cohen to federal prison. He is also a major prosecution witness in Trump’s separate Manhattan hush-money criminal case, which is scheduled to go to trial next spring.
James, a Democrat, has credited Cohen as the impetus for her civil investigation, which led to her Trump fraud lawsuit, citing his testimony to Congress in 2019 that the business mogul-turned-politician had a history of misrepresenting the value of assets to gain favorable loan terms and tax benefits.
Trump last week dropped a $500 million lawsuit that accused Cohen of “spreading falsehoods," causing “vast reputational harm” and breaking a confidentiality agreement for talking publicly about hush-money payments made to women during his 2016 campaign.
But a Trump spokesperson said he had only decided “to temporarily pause” the lawsuit as he mounts another campaign for the White House and fights four criminal cases, but said he would refile at a later date.
Cohen went to prison after pleading guilty in 2018 to tax crimes, lying to Congress and campaign finance violations, some of which involved his role in the hush-money payments.
Trump isn’t required to be in court for his civil trial until he testifies in a few weeks. Yet, in a departure from past practice, he's shown intense interest in seeing it in person. That change speaks as much to Trump’s desire to campaign as an aggrieved defendant as it does to the grave stakes involved for him and the real estate empire that vaulted him to fame and the White House.
In a pretrial ruling last month, Judge Arthur Engoron found that Trump, the Trump Organization and top executives committed years of fraud by exaggerating the value of Trump’s assets and net worth on his financial statements.
As punishment, Engoron ordered that a court-appointed receiver take control of some Trump companies, putting the future oversight of Trump Tower and other marquee properties in question. An appeals court on Friday blocked enforcement of that aspect of Engoron’s ruling, at least for now.
The civil trial, which doesn't have a jury because one is not required under the law, concerns allegations of conspiracy, insurance fraud and falsifying business records. James is seeking $250 million in penalties and a ban on Trump doing business in New York.
__
Colvin reported from Washington.
|
Banking & Finance
|
By Ross Kerber
(Reuters) - California's top public pension fund on Friday said it will more than double its climate-focused investments to $100 billion by 2030 and consider selling stocks in companies with poor plans for the energy transition.
Staff for the California Public Employees' Retirement System (CalPERS) said the plan will boost returns for the $444 billion system, the largest in the U.S., plus cut in half its portfolio's "emissions intensity," a measure of emissions relative to output.
"We believe there's a full opportunity set coming about from the transition to a lower-carbon economy," said Peter Cashion, CalPERS head of sustainable investing, in a call with reporters on Thursday.
The moves represent a big bet on new technologies and that businesses and regulators will embrace steps to limit global temperature increases as CalPERS allocates retirement assets in the heavily Democratic state.
Green energy investing faces much debate during a recent wave of oil-and-gas mergers and big writedowns for windfarm projects. But U.S. solar market values have hit record highs while gas prices have soared, supporting the business case for new infrastructure.
Cashion said the new investments will be spread among companies that do things like mitigate emissions or make infrastructure more resilient to climate change, selected across different asset classes.
New laws in California require more corporate climate disclosures. Additional proposed legislation would require state funds to sell fossil fuel stocks, following systems in other states such as Maine.
CalPERS has opposed the idea, saying it would do little to limit emissions and could compromise returns. Cashion called it "a very inelegant solution."
But he said CalPERS will develop a process to evaluate whether a company is prepared for stronger climate regulations or shifts in consumer demand. It will consider factors such as whether a company has plans validated by the Science Based Targets initiative, backed by the United Nations and business and environmental groups.
For laggards, he said, "we believe that an underweight or some tactical change would be appropriate."
(Reporting by Ross Kerber; Editing by David Gregorio)
|
Renewable Energy
|
A sharp fall in inflation delivered a boost to the housing market on Wednesday as City traders cut their bets on further Bank of England interest rate rises.
Shares in Britain’s listed housebuilders surged to enjoy their biggest one-day gain since 2008 after official figures showed inflation eased to a 16-month low of 7.9pc in the year to June.
This was down from 8.7pc in May as petrol prices tumbled and food price rises slowed. It was also well below the 8.2pc expected by economists.
The FTSE 100 surged and UK government borrowing costs tumbled, with the data also implying mortgage rates will ease in the coming weeks after more than a month of dramatic upward increases.
Oliver Laver, of Mortgage Key, said the market was likely to stabilise after a series of sharp increases in borrowing costs by high street lenders.
He said: “The latest data will enable lenders to stabilise. It’s still a volatile market. We need a few more forecasts to be right or outperformed before rates fall. But we will see a stop to rates increasing,” he said.
Britain’s blue chip index closed up 1.8pc, while the domestically-focused FTSE 250 climbed almost 3.8pc.
Persimmon, Britain’s second-largest housebuilder, led the charge among listed property developers with its shares jumping 8.3pc. The UK’s largest developer Barratt Developments and Taylor Wimpey both rose 6.4pc, while shares in Berkeley Group rose 5.2pc.
The industry had been boosted by years of low interest rates, which helped with financing to build new homes as well as aiding buyers with cheap mortgages.
But that changed when the Bank of England started a rapid series of interest rate increases in December 2021. Barratt last week said demand from first-time buyers had halved over the past year, as they are particularly vulnerable to rising borrowing costs.
While the fall in inflation was welcomed by traders, the headline rate is still almost four-times the Bank of England’s 2pc target. Sir Dave Ramsden, deputy governor at the Bank, described it as “much too high”.
As a result the Bank’s Monetary Policy Committee (MPC) is expected to raise interest rates to 5.25pc next month, rather than 5.5pc previously expected.
Traders in financial markets expect the base rate to peak at 5.75pc later this year, instead of the peak of 6.25pc forecast last week before inflation number was published by the Office for National Statistics.
In part this is because core inflation, which strips out volatile energy and food costs, fell from 7.1pc to 6.9pc, and producer price inflation, which measures input costs facing businesses, turned negative, falling 2.7pc on the year. These raise hopes that consumer price inflation is at last coming under control, after peaking at 11.1pc last October.
Sir Dave indicated the battle against inflation is not over yet.
He said: “CPI inflation has begun to fall significantly but remains much too high. The MPC has consistently stressed that monetary policy decisions will address the risk of more persistent strength in domestic wage and price settling.
“The MPC will continue to closely monitor indications of persistent inflationary pressures in the economy as a whole, including the tightness of labour market conditions and the behaviour of wage growth and services price inflation. If there is evidence of more persistent pressures, then further tightening in monetary policy would be required.”
The deputy governor added that the experience of quantitative tightening over the past year – ditching bonds which the Government bought under quantitative easing – has gone smoothly, indicating the Bank can look at “a carefully considered increase in the pace of reduction in the stock of gilts in the twelve months ahead”.
This effectively means he is considering tightening this part of monetary policy more quickly, despite expectations of smaller rises in interest rates.
The Government’s borrowing costs have fallen in line with changing expectations, with the interest rate on two-year gilts down from 5pc to 4.9pc.
Sterling fell 1.1pc against the dollar from more than $1.30 to just under $1.29, and 0.95pc against the euro, to $1.151.
Two-year swap rates in financial markets – a leading indicator for mortgage rates – fell by 0.3 percentage points on Wednesday morning, from 5.73pc to 5.42pc.
However, not all mortgages will necessarily follow this pattern immediately.
NatWest announced it is raising the interest rate on a range of home loans, with fixed-term mortgages increasing by as much as 0.4 percentage points.
The average two-year fixed residential mortgage rate rose to 6.81pc on Wednesday, up from 6.78pc the day before, according to data firm Moneyfacts.
However the main effect of the fall in markets’ rate expectations is expected to be that mortgage rates stop increasing and may ultimately start to come down sooner.
Separate data showed the number of corporate mergers and acquisitions in the first half of the year slumped by a fifth on a year earlier, as high interest rates made financing deals difficult.
The figures published by PwC showed that the 1,902 deals which took place were typically smaller than those a year ago - they totalled £42.8bn by value, down more than half from £95bn 12 months earlier.
|
Interest Rates
|
Image caption, Lynn Benson needed the trustees to sign paperwork before she could sell her mum's homeFormer clients of a law firm that went bust say they have been left out of pocket, frustrated and disappointed.McClure solicitors, founded in Greenock in 1853, had tens of thousands of clients across Britain and specialised in work such as wills and trusts.Its collapse meant some struggled to sell their late parents' homes while others faced new legal bills. McClure's former director said clients should not fear that money had been wasted. The Law Society of Scotland, which regulates solicitors, said it was monitoring the situation.'My mum would have been horrified' Image caption, Ann Benson put her house in a Trust with McClure solicitorsYears before she died in 2020, Ann Benson put her house in a trust with McClure solicitors. But in 2021 her daughter Lynn discovered McClure had gone bust. She says that was the start of her "nightmare".Trusts are used by thousands of people as a way of managing assets like property or money. Some people set them up in the hope it will protect their home from being sold to pay for care home fees.After putting a home into a trust, it is the trustees who own it but they have to follow the purpose for which it was set up.When her mother died, Lynn, from Glasgow, needed the trustees to sign paperwork before she could sell her mum's home. The trustees were two former McClure's solicitors.She had to find a new solicitor to deal with this and told the BBC that her mum's first house sale fell through as a result. She finally sold her mum's home just before Christmas more than a year after the first attempt.Lynn said if her mum had still been alive she would have been horrified.She said: "Having to deal with this after the death of my mother has been extremely difficult. To even deal with my own grieving process and dealing with matters with regard to the trust that I knew nothing about, for me it's been an emotional rollercoaster ride." Lynn said there needs to be an awareness of what has happened to McClure and "how they've left many people in a very difficult situation".A Facebook page called Victims of McClure has more than 600 members from across Britain. A number have contacted the BBC to share their experiences.When McClure went into administration another law firm called Jones Whyte took on its files.Jones Whyte has written to a number of former McClure clients saying there are "some systematic issues affecting many of these trusts". The letter states it is "incredibly important that we review your file" and the cost is £300+VAT per trust.'You think you're doing the right thing and it backfires'Image caption, Retired firefighter Joe Wylie spent more than £5,000 setting up wills, powers of attorney and trustsRetired firefighter Joe Wylie said he spent more than £5,000 setting up wills, powers of attorney and trusts with McClure about three months before the firm entered administration. He did not want his family to have to deal with extra stress after his death.Joe found out McClure had gone bust when he received a letter from Jones Whyte in November 2021 offering to carry out a review of his family's two trusts for £720.He said he was "shocked" because he thought everything was done and dusted.He did not pay for the review and through his own research discovered his trust had not been set up properly. Joe is now going to find a new lawyer and start again. He said he was relieved his house was still in his name but gutted to have wasted money."I can't really afford to throw away £5,000," Joe said. "I'll just have to write it off as a bad joke. You think you're doing the right thing and it backfires.""I'd love to be able to get some compensation but that's not going to happen."He said he wanted to make other people aware of what was going on. 'Not in hiding'The BBC asked former McClure director Andrew Robertson for an interview. He declined but sent a written response to our questions.Mr Robertson said it is "not correct that many trusts had issues" and that clients "should not fear that money has been wasted".He said the trust "was and remains a good service" and the fact McClure no longer exists "does not affect the trust".On the subject of people struggling to sell their parents' homes he said that, on occasion, the reason was that "the agents dealing with the sale have failed to contact the trustees at the outset". He said it should not be difficult to contact the trustees, adding "we are not in hiding".Jones Whyte said it was "prudent" to carry out reviews and there "was no situation in which a law firm could carry out this work free of charge".The company said from the work it had undertaken so far "the vast, vast majority of trusts are competent and valid".Rachel Wood, executive director of regulation at the Law Society of Scotland, said McClure had many thousands of clients and Jones Whyte was expected to inform all clients that their documents and funds were now safely held by them.She said: "While we cannot comment on specific commercial arrangements, anyone who doesn't want to become or remain a client of the acquiring firm is entitled to instruct another solicitor to act on their behalf or ask for the return of the documents and any funds."Any client who has suffered loss because of the demise of WW & J McClure and wishes to raise a claim, or to make a complaint, can do so. "We are monitoring the situation and will take any appropriate regulatory action required."The law society said that to make a complaint clients should contact the Scottish Legal Complaints Commission in the first instance. Claims in relation to McClure should be addressed to the administrators of McClure Solicitors at edinburgh@frpadvisory.com.
|
Real Estate & Housing
|
England’s housing crisis will push many local authorities into bankruptcy as the increasing cost of emergency accommodation for thousands of homeless families threatens to overwhelm council budgets, leaders have warned.
The worst-hit councils are now spending millions of pounds a year – in some cases between a fifth and half of their total available financial resources – to try to cope with an unprecedented and rapid explosion in homelessness caused by rising rents and a shrinking supply of affordable properties.
The scale of the crisis means smaller councils, often in affluent shire counties, are struggling to supply enough emergency homes to meet their legal duty to support homeless families. Homelessness rates in some districts have more than doubled year on year.
Councils that have enjoyed housing stability for years are now reeling at the accelerating cost of the crisis. Basildon borough council in Essex has seen spending on temporary accommodation rise from £7,000 in 2017 to £2m in 2022. Hastings borough council, in East Sussex, spent £750,000 in 2019 but expects its annual bill to be £5.6m by next April.
There is cross-party consensus in local government about the need for urgent ministerial action, with even Tory-controlled councils calling for rent controls, increases in housing benefit rates and investment in new social housing to prevent the crisis from dragging smaller districts into insolvency.
“Unless the government acts now, many of us will go over the edge financially, with a devastating impact on local services. The decline of the safety net which district councils provide will hit the most vulnerable members of our communities hardest,” said Hannah Dalton, housing spokesperson for the District Councils’ Network.
A Guardian analysis of local authority revenue expenditure found 10 councils where more than £1 in every £10 of core spending – which is not ringfenced and that councils can use to take decisions – went on temporary accommodation in 2022-23.
Many of these councils have also seen large rises in the number of people housed in temporary accommodation. In Crawley, in West Sussex, the number of households doubled between December 2019 and March this year; in Hastings the number tripled and in Havant, in Hampshire, it grow tenfold, according to government homelessness figures.
The crisis is being driven by rising evictions from private rented housing over the past two years, coupled with local housing benefit cuts and the scarcity of suitable homes as rising mortgage interest rates force landlords to sell up or switch to short-term lets, such as Airbnb, forcing potential first-time buyers to stay in rented homes.
Councils have described increasingly chaotic local private rented housing market conditions as the crisis spreads, including:
Unscrupulous private landlords evicting tenants and then offering the property to the local council to use as temporary accommodation and charging a substantially higher rent – a process known as “flipping”.
Families increasingly being placed in temporary housing miles from where they live and far from their children’s school. District councils in Essex routinely house families in Norfolk and Cambridgeshire, and one family was reportedly placed in Inverness, in northern Scotland.
Councils are in direct competition with the Home Office, and its asylum seeker housing contractors, Serco and Clearsprings, to secure scarce temporary accommodation in their area. Some councils are considering offering “golden hello” cash payments to landlords to secure priority access to homes.
The latest figures for England published last week showed a record 104,000 households in temporary accommodation, at a cost to the taxpayer of £1.7bn. Councils said these figures have been swelled by growing numbers of working families made homeless after being turfed out by landlords wishing to sell up or raise rents.
Stephen Robinson, the Liberal Democrat leader of Chelmsford city council, said: “As a country, we’ve not built enough homes for 30 years. If the crisis in homelessness is not addressed, it could bankrupt very many district and unitary councils within two years, with those in south-east England at particular risk.”
Labour-run Hastings, which has said it in effect faces bankruptcy as a consequence of rising temporary accommodation bills, said in a recent paper that the financial and social consequences were so serious that “even the term ‘housing crisis’ insufficiently conveys the systemic and embedded challenges we face”.
A spokesperson for the government said ministers were committed to ensuring that families could move out of temporary accommodation into stable housing. “Local authorities have seen an increase in core spending power of up to £5.1bn or 9.4% in cash terms on 2022-23, with almost £60bn available for local government in England.
“We are committed to reducing the need for temporary accommodation by preventing homelessness before it occurs in the first place, which is why we are providing councils with £1bn through the homelessness prevention grant over three years.”
|
Real Estate & Housing
|
The cost of living unexpectedly increased last month after three consecutive months of easing, driven by dining out and food price rises.
Inflation, which measures the increase in the price of something over time, jumped to 10.4% in the year to February from 10.1% in January.
Food costs rose at their fastest rate for 45 years with higher costs for some salads and vegetables in particular.
The prices rises come after shortages were seen in supermarkets.
Tomatoes, peppers and cucumbers were among certain vegetables that were in scarce supply, largely because of extreme weather affecting harvests in Spain and North Africa.
Shortages were also compounded by high energy prices impacting UK growers, as well as issues with supply chains.
The price of alcohol in pubs and restaurants also drove inflation to jump last month following discounting in January, the Office for National Statistics, which publishes the results, said.
Grant Fitzner, chief economist for the ONS, said higher food prices for February was "no real surprise", but added "what people hadn't been expecting is first that we've seen an increase in the price of alcohol in pubs and restaurants in February after some discounting".
"We also saw higher clothing prices, particularly for children and women's clothing," he added.
The surprise rise in inflation comes ahead of a decision by the UK's central bank, the Bank of England, over whether to increase interest rates on Thursday as it continues its fight to ease inflation.
Most economists predicted inflation would fall again in February, but Chancellor Jeremy Hunt said a slowdown was not "inevitable".
"We recognise just how tough things are for families across the country, so as we work towards getting inflation under control we will help families with cost-of-living support worth £3,300 on average per household this year."
|
Inflation
|
Brandon Bell/Getty Images
toggle caption
High inflation has been particularly tough for people who rely on Social Security for their income.
Brandon Bell/Getty Images
High inflation has been particularly tough for people who rely on Social Security for their income.
Brandon Bell/Getty Images
Inflation held steady last month — and for retirees who depend on Social Security, the pace of price hikes means a more modest, though still welcome, cost-of-living increase next year.
Consumer prices in September were up 3.7% from a year ago, on par with the previous month.
Prices rose 0.4% between August and September, compared to a 0.6% jump between July and August. Rising rents and gasoline prices during September were partially offset by the falling price of used cars and trucks.
Inflation has eased in recent months, providing some relief for consumers as well as the Federal Reserve, which has been raising interest rates aggressively since last year.
Cooling inflation matters to Social Security beneficiaries in another way. Their annual cost-of-living adjustment, or COLA, is based on the average annual inflation rate for July, August and September — though it's calculated using a slightly different price index.
That means Social Security beneficiaries are set to receive an annual increase of 3.2% next year, smaller than the 8.7% bump they got this year, which was the largest in decades.
The average retiree will receive about $55 more each month, beginning in January — compared to this year's increase which averaged $114 a month.
Smaller Social Security increases are still welcome
"Every little bit helps," says Carol Egner, a retired administrator who lives in Ketchikan, Alaska. She says her Social Security check barely covers necessities such as insurance, gas and heat.
"You just have to cut back on something," she says. "There's nothing left over for anything else."
Regina Wurst is also grateful for the cost of living adjustment, even though it's smaller than this year's.
"Any increase is very helpful," she says. "I'm 72 and I live in California, so the cost of living is quite high."
Most of Wurst's monthly Social Security check goes for rent on the house she shares with nine other family members. She's also raising two of her grandchildren.
"I was just today wondering how am I going to buy school clothes for my 10-year-old granddaughter," Wurst says. "She's really asking for more clothes. She wears the same thing every day."
|
Inflation
|
With help from Derek Robertson
In January, this newsletter took a look at emerging ideas for state-backed digital money — speculating that a new breed of e-money was poised to take the center of the global stage.
As we cross the mid-year threshold, a slew of developments from the U.S., Europe and the rest of the world show that the future of state-backed money is starting to crystallize.
By and large — despite the many obstacles to these technically demanding and politically sensitive overhauls — the world’s monetary authorities are demonstrating that they remain determined to move them forward.
Here are three takeaways from the current state of play.
Wholesale remains an easier sell. On Thursday, the New York Fed and its partners announced that a three-month digital dollar pilot for global payments had shown promising results.
This represented a notable spurt of progress in American monetary innovation, and it’s no surprise it came on the wholesale side of central bank digital currencies, which pertains to transactions between financial institutions.
Up to now, the U.S. has lagged much of the rest of the world in CBDC development. In part because the stewards of the global reserve currency have less to gain from changes to the monetary status quo. But it hasn’t helped that the idea of a CBDC has encountered populist opposition in the U.S., where opponents have speculated it could be used to impose a restrictive social-credit system.
Even in Europe, which is well ahead of the U.S. in its CBDC development, privacy concerns are proving a sticking point. When the European Commission unveiled draft CBDC legislation late last month, one commissioner felt compelled to declare to reporters, “This is not a Big Brother project.”
But such concerns are much more relevant to retail CBDCs, which are meant for use by individual citizens, leaving a path open for wholesale projects like the New York Fed’s.
Geopolitics is driving tech developments. Last week, Russian state sources reported that the emerging BRICS [Brazil, Russia, India, China, South Africa] economies are planning to introduce a new gold-backed currency at the bloc’s summit next month in South Africa.
The reports contradict comments made last week by an executive at the BRICS development bank, Leslie Maasdorp, who told Bloomberg TV on Wednesday that a new shared BRICS currency remains a “medium- to long term-ambition.”
The Russian state reports may represent wishful thinking, but they reflect the sustained desire of non-Western nations to develop alternative monetary arrangements to the dollar system, particularly in the wake of U.S. sanctions of Russia over its Ukraine invasion.
That has spurred many countries to accelerate their exploration of CBDCs — including calls for a gold-backed digital BRICS currency — which in turn has heightened the urgency around the West’s own CBDC efforts.
“Once the U.S. and Europe saw these developments, they became much more engaged as well,” said Josh Lipsky, director of the Atlantic Council’s GeoEconomics Center, which publishes the think tank’s CBDC tracker.
Governments are borrowing from crypto. As governments pursue digital upgrades of their currencies, one open question has been how much they will borrow from the wild world of crypto.
Crypto skeptics view most blockchain-based innovations as useless, while many crypto purists argue that there is little point to use a blockchain for a system in which government authorities retain control.
“They keep on wasting money and resources and time,” argued Sam Callahan, lead analyst at Bitcoin-only investment firm Swan Bitcoin.
So it’s noteworthy that the successful experiment reported last week by the New York Fed and its partners made use of a (private, permissioned) blockchain — a design element that many CBDC projects eschew.
Central banks also remain interested in some of the more exotic innovations to come out of decentralized finance, as demonstrated by an interim report published late last month by Project Mariana, a collaboration between the Bank for International Settlements and monetary authorities in Europe and Asia exploring digital upgrades to foreign exchange markets.
The interim report confirms that the initiative is continuing to incorporate crypto-native innovations like liquidity pools, automatic market makers, and cross-chain bridges.
That’s notable because many of these elements have been associated with some of crypto’s most spectacular failures.
For example, bridges, tools for making separate blockchain networks interoperable, are notorious as weak links that hackers have repeatedly exploited to steal crypto funds. (The Bank for International Settlements published a report about defending CBDCs from cyberattacks on Friday.)
While “crypto” and associated terms have acquired a taint that makes them politically unpalatable in many corners, the world’s monetary technocrats remain willing to try all available tools in the race to build the financial systems of the future.
An influential AI commentator has some advice for the U.K.’s big new regulatory push.
Jack Clark, a former policy director for OpenAI and author of the Import AI newsletter, outlined in a recent blog post how he thinks Great Britain’s £100 million “Foundation Model Taskforce” should approach its sweepingly ambitious mission of building a regulatory bridge between the U.S. and Europe.
His self-described “tl;dr,” the technical elements of which are broken down in more detail at the actual blog: the task force “should focus on evaluating frontier models. Specifically, it should suss out unknown capabilities, explore whether dangerous capabilities are possible to elicit from contemporary models, evaluate for alignment (or misalignment), better develop the science of measurement (including socio technical analysis) and experiment with different approaches to both accessing AI models and aligning AI models.”
Clark explains that he writes out of a belief that a “public option” for developing superintelligent AI is possible, but only if governments are given serious regulatory capacity over the sector and develop the commensurate technical know-how. “By public option I don’t mean state-run-AI… but I do mean a version of AI deployment which involves more input and leverage from the public, academia, and governments, and I mean something different to today where most decisions about AI are being made via a narrow set of actors (companies) in isolation of broader considerations and equities,” Clark writes. — Derek Robertson
Oh, and another voice chiming in: Former Department of the Treasury counselor Steven Rattner published an op-ed in the New York Times this morning calling for “full speed ahead” on AI as a boost to the American economy.
Rattner, a former banker who played a key role in the U.S.’ recovery from the Great Recession, writes “the problem is not that we have too much technology; it’s that we have too little” — and that automation could nudge American productivity out of its long downward spiral.
“This makes A.I. a must-have, not just a nice-to-have. We can only achieve lasting economic progress and rising standards of living by increasing how much each worker produces,” Rattner writes. “Technology… is central to that objective.”
He’s mindful, however, of its impact on workers, noting how post-industrial disgruntlement in the Midwest quite literally made recent history with Trump’s election, and that “Government can help ameliorate these dislocations,” and meet “a vast need for better education and training.” — Derek Robertson
- Learn about the Lego-like “chiplets” powering the AI boom.
- The FBI searched the home of Kraken founder Jesse Powell.
- Chatbots are already taking over the drive-thru lane.
- Generative AI might be drowning the web in spam.
- Meta is hoping to transfer lessons about governance in the metaverse to AI.
Stay in touch with the whole team: Ben Schreckinger ([email protected]); Derek Robertson ([email protected]); Mohar Chatterjee ([email protected]); and Steve Heuser ([email protected]). Follow us @DigitalFuture on Twitter.
|
Banking & Finance
|
WASHINGTON -- Millions of Social Security recipients will get a 3.2% increase in their benefits in 2024, far less than this year's historic boost and reflecting moderating consumer prices.
The cost-of-living adjustment, or COLA, means the average recipient will receive more than $50 more every month beginning in January, the Social Security Administration said Thursday. The AARP estimated that increase at $59 per month.
“This will help millions of people keep up with expenses,” said Kilolo Kijakazi, Social Security’s acting commissioner.
About 71 million people — including retirees, disabled people and children — receive Social Security benefits.
Thursday's announcement follows this year’s 8.7% benefit increase, brought on by record 40-year-high inflation, which pushed up the price of consumer goods. With inflation easing, the next annual increase is markedly smaller.
“Compared to last year's 8.7% increase, this is going to feel small and the perception is that its not keeping up with the inflation and the higher costs that retirees are still seeing,” said Martha Shedden, president of the National Association of Registered Social Security Analysts.
On top of that, an anticipated increase in Medicare premiums for 2024 will eat into the Social Security cost-of-living bump.
Medicare hasn’t announced the increase for traditional Medicare, but said the cost of Medicare Advantage plans is expected to remain stable.
Still, senior advocates applauded the annual Social Security adjustment.
“Retirees can rest a little easier at night knowing they will soon receive an increase in their Social Security checks to help them keep up with rising prices,” AARP CEO Jo Ann Jenkins said. “We know older Americans are still feeling the sting when they buy groceries and gas, making every dollar important."
Social Security is financed by payroll taxes collected from workers and their employers. The maximum amount of earnings subject to Social Security payroll taxes will be $168,600 for 2024, up from $160,200 for 2023.
Retirees whose sole income comes from Social Security are not subject to taxes on that income.
Nancy Altman, president of Social Security Works, an advocacy group for the social insurance program, said that the COLA is a “reminder of Social Security’s unique importance" and that “Congress should pass legislation to protect and expand benefits.”
However, the program faces a severe financial shortfall in the coming years.
The annual Social Security and Medicare trustees report released in March said the program’s trust fund will be unable to pay full benefits beginning in 2033. If the trust fund is depleted, the government will be able to pay only 77% of scheduled benefits, the report said.
There have been legislative proposals to shore up Social Security, but they have not made it past committee hearings.
A March poll by The Associated Press-NORC Center for Public Affairs Research found that most U.S. adults are opposed to proposals that would cut into Medicare or Social Security benefits, and 79% of people polled said they oppose reducing the size of Social Security benefits.
The Social Security Administration is still without a permanent leader. President Joe Biden in July nominated former Maryland Gov. Martin O’Malley to lead the agency.
The COLA is calculated according to the Bureau of Labor Statistics’ Consumer Price Index, or CPI. But there are calls for the agency to instead use a different index, the CPI-E, which measures price changes based on the spending patterns of the elderly, like health care, food and medicine costs.
Any change to the calculation would require congressional approval. But with decades of inaction on Social Security and with the House at a standstill after the ouster of Speaker Kevin McCarthy, R-Calif., seniors and their advocates say they don’t have confidence any sort of change will be approved soon.
The cost of living adjustments will have a big impact on people like Alfred Mason, an 83-year-old Louisiana resident. Mason said that “any increase is welcomed, because it sustains us for what we are going through.”
As inflation is still high, he said, anything added to his income “would be greatly appreciated.”
|
Inflation
|
HSBC To Sell Retail, Business Bank Units In Mauritius
The transaction includes assets and liabilities tied to about 38,000 customers, according to a statement.
(Bloomberg) -- HSBC Holdings Plc has agreed to sell its retail and business banking units in Mauritius to Absa Group Ltd., the latest push by Europe’s biggest lender to offload international divisions.
The transaction includes assets and liabilities tied to about 38,000 customers, according to a statement. The deal is subject to regulatory approval and is expected to be completed in the third quarter of next year.
HSBC will continue to offer services to mid-size companies and large corporates headquartered in Mauritius as well as to the local subsidiaries of international firms.
“Our decision to sell these operations reflects our desire to focus on our strengths as a leading international bank in Mauritius,” Greg Lowden, chief executive officer of HSBC in Mauritius. “We will continue to serve the needs of our international customers.”
The transaction will give Absa an even greater foothold in retail banking in Mauritius. HSBC had 11 retail branches on the Indian Ocean island nation, according to the bank’s website.
“We remain purposeful in our efforts to create a more diversified business,” Absa Group Chief Executive Officer Arrie Rautenbach said in a separate statement. “We will continue to deploy capital to attractive growth prospects across the continent.”
HSBC has been offloading a number of international retail banking divisions in recent years. The lender agreed last year to sell its Canadian business to Royal Bank of Canada for C$13.5 billion ($9.8 billion); in 2021, it announced it would exit its US domestic mass-market retail banking business, in a deal that allowed it to jettison dozens of branches.
Instead, the company has looked to steer billions of dollars in capital toward Asia. Just last month, HSBC agreed to buy Citigroup Inc.’s retail wealth management portfolio in mainland China, adding about $3.6 billion in assets and deposits.
(Corrects to remove reference to wealth units in headline, first paragraph.)
©2023 Bloomberg L.P.
|
Banking & Finance
|
Labour leader Sir Keir Starmer's refusal to abolish the two-child limit on claiming some benefits will be challenged at a meeting of the party's policy body this weekend.
Sir Keir is facing a growing backlash from across his party over the issue.
Labour's National Policy Forum brings together trade union representatives, party members and the shadow cabinet.
The meeting, held behind closed doors in Nottingham, is an important staging post in drawing up the next manifesto.
However, policies agreed there will not automatically be included.
The content of six policy documents will be finalised and sent to the party's annual conference in October.
The party leadership has already accepted some amendments to the draft documents - including restating the commitment to rail nationalisation and improving the provision of early years education - though without a spending commitment attached.
But a range of other proposed changes have not been agreed, and will be up for debate - including on welfare.
Both the county's largest union, Unison and the shop workers' union Usdaw are backing an amendment to "end the punitive features" of the benefit system, including specifically the benefits cap and the two-child limit.
The cap, which came into force in 2017, restricts child tax credit and universal credit to the first two children in a family, with only a few exceptions.
The Child Poverty Action Group estimates removing the limit would cost £1.3bn a year but would lift 250,000 children out of poverty overnight.
Sir Keir told the BBC's Sunday with Laura Kuenssberg the policy would not change under a Labour government.
Although he did not give a reason during the interview, members of his shadow cabinet said it was because this would constitute an unfunded spending commitment.
The leadership wants to establish economic credibility above all, and avoid giving the Conservatives the ammunition to run a "Labour's tax bombshell" campaign, which proved so successful in 1992 - also after 13 years of Tory government.
Sir Keir's critics fall in to two camps - both of which go beyond his usual detractors.
The first involve those who want to see the policy changed - from Unison, which nominated Sir Keir for the leadership, to some former shadow ministers, to Labour's moderate leader in Scotland, Anas Sarwar.
The second group - who are muttering privately rather than publicly - are with the programme when it comes to refraining from uncosted commitments.
This includes some serving shadow ministers.
Their view is roughly this:
That Sir Keir committed to not changing a Conservative policy in his interview with the BBC on Sunday.
They feel instead - like deputy leader Angela Rayner and shadow work and pensions secretary Jonathan Ashworth - he could have denounced the policy, but simply explained the money was not there to change it yet, as the Conservatives have crashed the economy.
They feel that approach would have left the door open to addressing the issue when or if the economy improves, and therefore have avoided the current row.
Sir Keir, though, will be aware that the two-child limit is far less unpopular with potential voters than it is with party members.
But a shadow cabinet ally of Sir Keir's denied that he had attempted to throw potential voters in former Labour strongholds in the Midlands and northern England - known as the "red wall" - some red meat.
The ally insisted Sir Keir was absolutely committed to tackling child poverty and that his robust response on the issue was simply to quash any speculation that an unfunded commitment could be wrung out of him.
But there is a wider frustration that while Labour is attacking the government's record - for example, on child poverty - shadow ministers are constrained in proposing solutions.
At the policy forum this weekend, there will also be a push by some unions and left-wing delegates in particular for the party to commit to free school meals for all primary school children in England.
The left-wing group Momentum will be pushing for a more radical agenda across the board this weekend - from public ownership to rent controls and increasing international aid.
They are unlikely to win many victories but in alliance with the unions their hope is that on benefits and school meals, the leadership will be given a clear message.
There are many in the party that would not sign up to some of Momentum's preferred policies.
But there is a wider concern in Labour's ranks about whether the party's programme can inspire, and not just reassure, potential voters.
Meanwhile, Momentum has accused Sir Keir of factionalism after a member of Labour's governing body, Mish Rahman, said he was blocked from standing to be the party's Parliamentary candidate in Wolverhampton West.
It comes after North of Tyne mayor Jamie Driscoll resigned from Labour after being blocked from running for another role in the North East.
The cases are the latest examples of left-leaning Labour figures claiming they are being frozen out.
|
Inflation
|
- Sam Bankman-Fried took the stand for the first time in his fraud trial on Thursday.
- However, he testified without a jury present, as Judge Lewis Kaplan sent jurors home early to decide whether some lines of defense were admissible.
- This week's testimony is just the latest example of the defense team's struggle to land a blow in the criminal fraud case.
Sam Bankman-Fried took the stand in a New York courtroom on Thursday, as he and his defense team auditioned their best legal material for U.S. District Judge Lewis Kaplan.
The former crypto billionaire had originally been scheduled to testify before the jury, but the judge sent jurors home early to consider whether some aspects of Bankman-Fried's planned testimony, related to legal advice he got while running FTX, would be admissible in court.
In a sort of mini-hearing within the trial, defense attorney Mark Cohen guided Bankman-Fried through a series of questions designed to showcase the defense's strongest arguments of his innocence, including suggesting that he relied on FTX's former chief regulatory officer and in-house attorney, Dan Friedberg, to guide some actions that the government claims are illegal.
Bankman-Fried faces seven criminal counts, including wire fraud, securities fraud and money laundering, that could land him in prison for more than 100 years if he is convicted at his trial in Manhattan federal court. Bankman-Fried, the son of two Stanford legal scholars, has pleaded not guilty in the case.
"Before the trial, I was convinced that SBF was headed to near-certain conviction on serious felony counts, and it was apparent to me that his defense team had not come up with anything that could derail that result," said Renato Mariotti, a former prosecutor in the U.S. Justice Department's Securities & Commodities Fraud Section and now a trial partner in Chicago with Bryan Cave Leighton Paisner.
"Nothing that has occurred during the trial has changed my view. The evidence of his guilt appears to be overwhelming," added Mariotti.
In the last four weeks of trial, multiple members of the C-suite at crypto exchange FTX, and its sister hedge fund Alameda Research, have all singled out Bankman-Fried as the mastermind behind the scenes. Several of these witnesses have themselves pleaded guilty to multiple charges, including Bankman-Fried's ex-girlfriend Caroline Ellison, who faces a maximum sentence of 110 years for crimes committed while she was the CEO of Alameda.
Prosecutors have also entered evidence to corroborate witness accounts, including encrypted Signal messages and other internal documents that appear to show Bankman-Fried orchestrating the spending of FTX customer money.
The defense's case — which is comprised of Bankman-Fried's upcoming testimony along with that of two witnesses who both wrapped in just over an hour on Thursday morning — hinges on whether the jury believes the defendant when he takes the stand.
"He has always been convinced that he's the smartest guy in the room and that he can talk his way out of any problem," continued Mariotti.
"But the biggest problem with SBF's testimony will be SBF himself. Given that the core issue will be intent to defraud, SBF should be portraying himself as clueless, inattentive, and in over his head. But for years he had portrayed himself as a visionary genius, and I don't expect that to change on the stand," he said.
Judge Kaplan previously ruled that Bankman-Fried's lawyers could not make a so-called advice of counsel argument in their opening remarks since it might risk prejudicing the jury. On Thursday, Kaplan sent the jury home early to reconsider in a closed-door session whether to allow this line of testimony.
Under questioning led by Cohen, Bankman-Fried appeared to place much of the criminal blame on FTX's chief regulatory officer, Friedberg, as well as outside counsel Fenwick & West, which advised the crypto exchange. Bankman-Fried spoke about Friedberg's active involvement in everything from the company-wide auto deletion policy on messaging apps like Signal, to the creation of Alameda's North Dimension bank account, where billions of dollars worth of FTX customer money was funneled.
The former FTX chief also said that the hundreds of millions of dollars in personal loans to himself and other founders of the platform were structured through promissory notes drafted by his in-house legal team and discussed in concert with his general counsel and Friedberg. Having the blessing of his legal counsel was something that SBF said he "took comfort in."
While taking the stand offers Bankman-Fried the opportunity to tell his side of the story to jurors, it also opens the door for federal prosecutors to go for the jugular in cross-examination. Following damning testimony from Bankman-Fried's closest ex-confidantes and top deputies, defense attorneys for the FTX founder have failed to flip the narrative in cross-examining key witnesses or to undermine the most troubling allegations regarding their client.
Indeed, Bankman-Fried's practice run on Thursday was tough to watch. While he came across as direct and credible in his direct examination, the grilling by prosecutors was aggressive and effective. At multiple points, the judge appeared exasperated by Bankman-Fried's responses, once saying that the defendant had an "interesting way of answering questions."
The defendant's demeanor flipped 180 degrees when U.S. assistant attorney Danielle Sassoon began her questioning. He swiveled back and forth in his chair, nervously shook a piece of paper he held in his hands, repeatedly grabbed for his water bottle before responding, and skirted a lot of questions by saying he couldn't recall what had happened.
Judge Kaplan interjected at one point, telling the defendant to "listen to the question and answer the question directly."
On Friday morning, we'll get a ruling from the judge on what's admissible from the defense's wish list of topics – as well as Bankman-Fried's debut before the jury from the stand.
"Given that he appears headed for defeat, taking the stand can be a 'Hail Mary' of sorts," said Mariotti.
"SBF will be hamstrung by his many prior statements, which could be used to impeach him. It will be difficult for SBF to weave his testimony around those prior statements."
This week's testimony is just the latest example of the defense team's struggle to land a blow in the criminal fraud case.
Prosecutors spent four weeks of the trial walking former leaders of FTX and Alameda Research through specific actions taken by their boss that resulted in clients losing billions of dollars late last year.
In trying to poke holes in witness accounts, Bankman-Fried's lawyers have repeatedly jumped around, unable to maintain a consistent timeline or coherent argument, while also opening the door for witnesses to offer additional testimony in furtherance of what they'd previously told the jury.
The scattershot approach is potentially troubling for Bankman-Fried, who's counting on his defense attorneys to keep him out of prison in what could be a life sentence if convicted. The central claim the defense has been unable to knock down is that Bankman-Fried knowingly used billions of dollars in FTX customer funds to pay for his lavish lifestyle, to make political donations and, most dramatically, to cover a gaping hole in Alameda's books following the cratering of cryptocurrency prices last year.
Cohen, a co-founder of the New York law firm Cohen & Gresser, is being joined at trial by Christian Everdell, a member of the firm's white collar defense team. Cohen, a graduate of the University of Michigan Law School, started his firm 21 years ago and previously served as an assistant U.S. attorney for the Eastern District of New York. Everdell started at Cohen & Gresser in 2017 after almost a decade working as a prosecutor for the Southern District of New York.
— CNBC's Dawn Giel contributed to this report.
|
Crypto Trading & Speculation
|
Bitcoin Flashes Signals Of Possible Spike In Volatility After Historic Lull
Bitcoin may be closer to bursting out of a period of unusually low volatility if chart patterns and the token’s history are any guide.
(Bloomberg) -- Bitcoin may be closer to bursting out of a period of unusually low volatility if chart patterns and the token’s history are any guide.
Some gauges of how much the largest digital asset swings around dropped toward a record low in the past month as Bitcoin hovered around $30,000. The lull coincided with a cooling in the token’s 2023 rebound from last year’s rout. The year-to-date gain stands at 80%, down from 90% through mid-July.
Potential catalysts for a breakout include pending applications from firms like BlackRock Inc. to start the first spot Bitcoin exchange-traded funds in the US, which could stoke demand. On the flip side, investors remain alert to the risks exposed by the 2022 crypto crash. The spotlight most recently has fallen on the health of the Huobi exchange linked to crypto mogul Justin Sun.
“An approaching ETF verdict may disrupt the slow phase of the market of late,” Bendik Schei and Vetle Lunde of K33 Research wrote in a note, flagging Aug. 13 as one of the deadlines for a Securities and Exchange Commission response to an ARK Investment Management LLC application. “Whether the SEC postpones, rejects or approves ARK’s filing could ignite volatility in the market.”
Bitcoin retreated about 1% to $29,725 as of 8:05 a.m. in London on Wednesday. Smaller virtual currencies such as Ether and Cardano also struggled for traction. Key charts below provide hints on Bitcoin’s volatility outlook.
Repeat Pattern
Bitcoin has traced a falling wedge — a narrowing price range — that resembles a pattern that presaged a June rally. Chart analysts often view a falling wedge as bullish. A break of the pattern’s upper line would boost their conviction.
“We moved to a positive bias in Bitcoin,” Tony Sycamore, a market analyst at IG Australia Pty, wrote in a note, adding technical indicators point to scope for a push toward $34,000.
Rare Stretch
Bitcoin’s 30-day historical volatility is near the 20 handle after a pronounced drop. The measure has been 20 or less only 2% of the time in the past decade, according to a Bloomberg News analysis. Instances of a retreat below 20 followed by a rebound back above are even rarer: they occurred seven times in the past 10 years and Bitcoin rose an average 16% over the next 30 days.
“Bitcoin is severely underpriced given its asymmetric upside and given the rush of cash that’s going to flood” into US spot ETFs for the token, Terrence Yang, managing director at Swan Bitcoin, said on Bloomberg Television.
Ties That Bind
A short-term correlation between the Nasdaq 100 Index of technology stocks and Bitcoin has turned positive, indicating the two are moving more in step. That suggests swings in equities could have a bigger influence on the token than in recent weeks, just as investors fret over whether elevated interest rates will finally spark a recession that hurts shares.
“At the end of the day the story is all about flows,” CoinShares Chief Strategy Officer Meltem Demirors said on Bloomberg Television. “Right now the flows are telling the story that investors are taking risk off the table.”
--With assistance from Sunil Jagtiani.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
|
Crypto Trading & Speculation
|
Spooked by the high price of Halloween candy? There’s not much relief in sight.
For the second year in a row, U.S. shoppers are seeing double-digit inflation in the candy aisle. Candy and gum prices are up an average of 13% this month compared to last October, more than double the 6% increase in all grocery prices, according to Datasembly, a retail price tracker. That’s on top of a 14% increase in candy and gum prices in October 2022.
“The price of candy has gotten to be outrageous,” said Jessica Weathers, a small business owner in Shiloh, Illinois. “It doesn’t make sense to me to spend $100 on candy.”
Weathers said she usually buys plenty of candy for trick-or-treaters and events at school and church. But this year, she only bought two bags and plans to turn off her porch light on Halloween when she runs out.
Other consumers are changing what they buy. Numerator, a market research firm, said its surveys show about one-third of U.S. consumers plan to trade down to value or store brands when buying candy for trick-or-treaters this year.
Weather is the main culprit for the higher prices. Cocoa prices are trading at 44-year highs after heavy rains in West Africa caused limited production in the season that began last fall. Now, El Nino conditions are making the region drier and are likely to linger well into the spring.
“There may be no price relief in sight, at least through the first half of 2024,” said Dan Sadler, principal of client insights for Circana, a market research firm.
Kelly Goughary, a senior research analyst with Gro Intelligence, an agricultural analytics firm, said Ivory Coast — which produces around 40% of the world’s cocoa — is already showing the signs of one of its worst droughts since 2003.
Meanwhile, global sugar prices are at 12-year highs, Goughary said. India, the world’s second-largest sugar producer after Brazil, recently banned sugar exports for the first time in seven years after monsoon rains hurt the upcoming harvest. Thailand’s output is also down.
Those costs, combined with increases for labor, packaging, and ingredients like peanuts, are pushing up prices for all kinds of candy.
Discount grocer Aldi is advertising a 250-piece variety pack of Mars Inc. chocolate bars — including Milky Way, Twix and Snickers — for $24.98. Two years ago, the same package was advertised at $19.54.
Hershey Co. — which has raised its prices by 7% or more in each of the last seven quarters —acknowledged this week that higher prices are taking a toll on demand. Hershey’s North American confectionary sales volumes fell 1% in the July-September period.
“We know that value and affordability continue to be top-of-the-line for consumers as budgets are stretched,” Hershey’s President and CEO Michele Buck said Thursday on a conference call with investors.
Buck said Hershey is trying to meet consumers’ needs with offerings in value stores and pack sizes at various price points.
|
Inflation
|
Retirement in Canada vs. America: An Overview
American and Canadian governments provide many of the same types of services who have reached the age of retirement. However, Canadian retirees have fewer worries than their American counterparts, thanks to a more generous retirement system.
According to Canada's statistical authorities, the poverty rate for Canadians over age 65 was less than 5%. That's lower than any other age group in the country, and half the poverty rate for U.S. seniors. Due to their lower incomes and the risk of running out of money, American retirees may need ways to supplement their retirement incomes.
Key Takeaways
- The Canadian Registered Retirement Savings Plans and Tax-Free Savings Account are akin to U.S. traditional and Roth IRAs.
- Canadian retirement accounts have more generous contribution limits and fewer distribution limits than American accounts.
- One of the three types of pension plans in Canada, Old Age Security (OAS), is funded by general tax revenues, unlike Social Security in the U.S. The Canada Pension Plan, on the other hand, is funded by payroll taxes, much like Social Security in the U.S.
- Canada's single-payer health insurance is available to citizens throughout their lives.
- America's Medicare is eligible only to those 65 and older and covers a lower percentage of medical costs.
A major benefit for Canadians is the publicly funded universal health care system, which provides them with essential medical services throughout their lives, as well as in retirement, without copays or deductibles.
In contrast, unless they are disabled or extremely low-income, Americans have no single-payer insurance until they reach age 65, when they can qualify for Medicare. Even that is far from comprehensive. Medicare does not cover most costs for vision, dental, or hearing care, and around 1 in 5 Medicare recipients report paying more than $2,000 in out-of-pocket expenses.
A 2022 study by the Employee Benefit Research Institute estimates that some 65-year-old couples, without employer health coverage, will require approximately $383,000 to comfortably afford Medicare premiums and out-of-pocket medical expenses in retirement.
Key Differences: Retirement Savings Plans
When it comes to saving for retirement, Canada and America both offer individuals similar financial vehicles with similar tax advantages.
Contribution Limits: RRSP vs. Traditional IRA and 401(k)
In Canada, Registered Retirement Savings Plans (RRSPs) allow investors to receive a tax deduction on their yearly contributions. Money invested in the plan grows tax-deferred, which advances the benefits of compounded returns. Contributions can be made until the age of 71, and the government sets maximum limits on the amount that can be placed into an RRSP account (18% of a worker's pay, up to CA$30,780 for 2022 and CA$31,560 for 2023).
Investors can contribute more, but additional sums over $2,000 will be hit with penalties.
Traditional IRAs
In the United States, traditional individual retirement account (IRA) contributions are more limited than their Canadian counterpart. The Internal Revenue Service (IRS) has set the maximum contribution for traditional IRAs at $6,500 per year for 2023, or the amount of your taxable compensation for the taxable year. People aged 50 and over can sock away an additional $1,000 per year in 2023 as part of a catch-up contribution.
Also, IRAs carry a 10% tax penalty if funds are withdrawn before the taxpayer reaches the age of 59½; however, there is a special exemption at the age of 55 called the 72(t) that allows distributions without penalty.
Defined Contribution Plans
Defined contribution plans, which include American 401(k) plans, offered through an employer, are more comparable to RRSPs. The annual contribution limit for 2023 is $22,500, and those who are aged 50 and over can contribute an additional $7,500 per year for a total of $30,000.
IRA Contribution Age and the SECURE Act
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed by former President Trump in December 2019. The Act eliminates the maximum age for traditional IRA contributions, which was previously capped at 70½ years old.
However, Americans who turned 70½ years old in 2019 still needed to withdraw their required minimum distributions (RMDs) in 2020 or they incurred a hefty 50% penalty of their RMD. Those who turned 70½ years old in 2020 are not required to withdraw RMDs until they are 72. The first withdrawal needs to occur before the following Apr. 1, so individuals who turned 70½ in 2019 could have waited to withdraw their RMD until Apr. 1, 2020. They were then required to take another RMD by the following Dec. 31, and every Dec. 31 thereafter. RMDs are required at age 72.
At the end of 2022, Congress passed a revision to the act called SECURE 2.0. In this bill, the age at which RMDs are required was raised to age 73 for people born between 1951 and 1959 and age 75 for those born in 1960 or later.
Withdrawals and Taxes
Withdrawals from an RRSP can occur at any time but are classified as taxable income, which becomes subject to withholding taxes. In the year in which the taxpayer turns 71, the RRSP must be either cashed out or rolled over into an annuity or Registered Retirement Income Fund (RRIF).
For American taxpayers, traditional IRAs and 401(k)s are structured to provide the same sorts of benefits, whereby contributions are tax-deductible and capital gains are tax-deferred; however, withdrawals or distributions are taxed at the person's income tax rate.
Canada's TFSA vs. America's Roth IRA
Canada's Tax-Free Savings Account (TFSA) is fairly similar to Roth IRAs in the United States. Both of these retirement-focused vehicles are funded with after-tax money, meaning there's no tax deduction in the year of the contribution; however, both accounts offer tax-free earnings growth, and withdrawals are not taxed.
Contribution Limits for TFSAs and Roth IRAs
Canadian residents over the age of 18 can contribute up to CA$6,500 to TFSAs in 2023; those who contributed in 2023 for the first time were eligible to deposit CA$88,000, provided they turned 18 in 2009 (the year the accounts originated).
The annual maximum contribution to a Roth IRA is $6,500 for 2023 or $7,500 with the $1,000 catch-up contribution for those aged 50 and over. Also, there is no limit on when one must stop making contributions and begin withdrawing money with either of these accounts.
Advantages of TFSAs Over Roth IRAs
TFSAs offer two significant advantages over Roth IRAs. Young Canadians saving for retirement are able to carry over their contributions to future years, while such an option is not available with Roth IRAs. For example, if a taxpayer is 35 years old and unable to contribute CA$6,500 into their account, due to an unforeseen outlay, next year the total allowable amount accumulates to CA$13,000.
The contribution limits have changed year-to-year since the TFSA was first introduced in 2009, with the limit sometimes set at different ranges between $5,000 and $10,000; the current cumulative limit for 2023 is CA$88,000.
Secondly, while sums equivalent to contributions can be withdrawn at any time, distributions of earnings out of Roth IRAs must be classified as "qualified" in order to avoid taxes. Qualified distributions are those made after the account has been open for five years, and the taxpayer is either disabled or is at least 59½ years old. Canada's plan does offer more flexibility in terms of providing benefits for those planning retirement.
Key Differences: Government Pensions
Both the United States and Canada provide workers with a guaranteed income once they reach retirement age; however, these federal pension plans differ from each other in several ways.
Canada's Old Age Security
Canada has a three-part system:
- Old Age Security (OAS), financed by Canadian tax dollars, provides benefits to eligible Canadians 65 years of age and older.
- The Canada Pension Plan (CPP), funded by payroll deductions (like Social Security in the United States), makes benefits available as early as age 60.
- The Guaranteed Income Supplement (GIS) is available to the very poorest Canadians.
OAS provides benefits to eligible citizens 65 years of age and older. Although there are complex rules to determine the amount of the pension payment, typically, a person who has lived in Canada for 40 years, after turning 18, is qualified to receive the full payment (as of January through March 2023) of CA$687.56 per month from the age of 65 to 74, and CA$756.32 if they are 75 and older.
Additionally, for the time period of January to March 2023, Guaranteed Income Supplements (CA$618.15 or CA$1,026.96 dependent on marital status) and Allowances (CA$1,305.71) are provided for pensioners with an annual income of up to CA$38,592.
The OAS implements a clawback provision, known as the OAS recovery or repayment, which means that high-income earners over the age of 65 are required to repay some or all of the OAS pension. This clawback is adjusted annually for inflation and will vary by reported income.
Much like with Social Security, OAS beneficiaries who choose to delay receiving benefits can get higher payouts; currently, benefits can be delayed for up to five years, up to age 70. OAS benefits are considered taxable income and they carry certain payback provisions for high-income earners.
To subsidize universal healthcare and pensions, Canada imposes higher income taxes on its citizens than the United States does on its residents.
Social Security
American Social Security, on the other hand, does not focus exclusively on providing retirement income but encompasses such additional areas as disability income, survivor benefits, and Medicare (to the extent that Medicare premiums are taken out of Social Security benefits).
Social Security income tax issues are slightly more complex and depend on such factors as the recipient's marital status and whether or not income was generated from other sources; the information provided in the IRS Form SSA-1099 will determine the tax rate for the benefit.
Generally, Canada's retirement programs are considered safe, as they are funded out of general tax revenues. In the United States, there have been continuous fears that the Social Security system, which is instead funded through payroll taxes on employee wages, will become underfunded.
Individuals are eligible to receive partial benefits upon turning 62 and full benefits ($$3,627 per month is the maximum in 2023 and $3,822 in 2024) once they are 66 or 67, depending on the year of birth.
Eligibility is determined through a credit system, whereby qualified recipients must obtain a minimum of 40 credits, and they can earn additional credits to increase their payments by delaying initial benefit payments up to age 70.
Can a Canadian Retire Full Time in the U.S.?
A Canadian citizen cannot retire full-time in the U.S. without going through the proper immigration channels. There are ways that a Canadian can retire part-time in the U.S., as they are legally allowed to spend six months a year in the U.S. without needing visas/permits.
Can You Collect U.S. Social Security in Canada?
Yes, if you are a U.S. citizen, you can collect Social Security if you live in Canada or anywhere else outside of the U.S. as long as you are eligible for Social Security.
Does Canada Tax U.S. Retirement Income?
Yes, Canada taxes U.S. retirement income and is different for the specific type of retirement income. Social Security is only taxed in the country of residence. So if you receive U.S. Social Security income and live in Canada, that income will be taxed in Canada and not the U.S. U.S. pension income will be taxed both in the U.S. and Canada, but in Canada, the U.S. portion is available as a foreign tax credit.
The Bottom Line
The American and Canadian systems provide many similar benefits to retirees, with similar types of tax-advantaged accounts that allow people to save for retirement. Thanks to a universal health care system and more generous benefits, Canadian retirees enjoy a lower poverty rate than those on the other side of their border.
|
Personal Finance & Financial Education
|
Dick’s Sporting Goods on Tuesday blamed “organized retail crime” for sinking its quarterly profits by nearly 25% as the company slashed its full-year earnings outlook.
The popular retail chain reported a 23% drop in profits in the second quarter across its more than 700 stores nationwide — despite sales rising 3.6%.
Dick’s attributed the losses to “organized retail crime and our ability to effectively manage inventory shrink,” an industry term used to describe stolen or lost merchandise.
“Our Q2 profitability was short of our expectations due in large part to the impact of elevated inventory shrink, an increasingly serious issue impacting many retailers,” Dick’s president and CEO Lauren Hobart said.
Dick’s share price plunged more than 20% after Tuesday’s opening bell.
Representatives for Dick’s did not immediately respond to The Post’s request for comment.
The Pennsylvania-based chain became the latest major retailer to pin the scourge of brazen robberies for impacting its bottom line. Last week, Target CEO Brian Cornell said shoplifting that included “threats of violence” surged 120% during the first five months of the year.
“Our team continues to face an unacceptable amount of retail theft and organized retail crime,” Cornell said as Target reported its first quarterly sales drop in six years.
The National Retail Federation, the nation’s largest retail trade group, said its latest security survey of roughly 60 retailers found shrink clocked in at an average rate of 1.4% last year, representing $94.5 billion in losses.
Dick’s slashed its expectations for the year to $11.33 to $12.13 per share — down from its previously-issued guidance of $12.90 to $13.80.
The company reported net income of $244 million, or $2.82 share, for the second quarter — down from the $319 million, or $3.25 a share posted during the same period last year.
Inventory was down about 5% in the quarter compared to the second quarter in 2022.
Dick’s has been a frequent target for shoplifters in recent months.
Just weeks ago, three women swiped $200 worth of merchandise from a Dick’s outpost in Brookfield, Wisc., before fleeing in a Toyota with a license plate out of Texas, according to Fox 6.
In May, Barry Bree, the former deputy commissioner of public safety of Oyster Bay, NY, was arrested and accused of stealing over $1,100 worth of golf clubs from a Dick’s in Melville, NY, News 12 New Jersey reported.
The same month, a Reddit user also took to the platform to share an eyewitness account of a robbery at the sporting goods store’s location in Montgomery County, Md.
“The store alarm went off for a long time and some of the customers around me told me that a guy and a girl had loaded a few carts full of equipment and clothes and then just made a run for it,” the user wrote.
The thieves “pushed them [the carts] out the back door and dumped everything in a waiting getaway car and drove away.”
And back in March, eight shoplifting incidents took place at Dick’s in Pleasant Hill, Calif., over the course of just seven days, according to local news outlet Claycord.
The thefts began on March 2, when a man nabbed five pairs of shoes valued at $740 from the store.
Three days later, another man shoplifted a $1,400 electric mountain bike and fled the scene on the stolen vehicle in the afternoon. Later that evening, a group of men and women scooped up some jackets.
The following day, a woman walked out with a shopping cart full of items she didn’t pay for in the early afternoon, and two men stole items and then returned them for money by late afternoon, according to Claycord.
On March 7 and 8, there were three other instances of shoplifting; and on March 9, a woman snagged some Nike clothing.
Out of the eight shoplifting incidents, only one arrest was made, the news site reported.
Though Dick’s attributed part of its losses to organized crime, the company did not disclose how much of its inventory reduction was directly from theft.
Analysts at CNBC have said that retail crime is a metric that’s nearly impossible to accurately count. Retailers also aren’t required to disclose data related to shoplifting.
The earnings report comes just days after Dick’s laid off about 250 employees from its corporate workforce, a person familiar with the matter told Bloomberg.
The unnamed source said that the cuts took place mostly among the sporting goods store’s customer support jobs, the outlet reported.
Dick’s reportedly has plans to use its freed-up resources to hire more workers in other areas.
However, it wasn’t all bad news for Dick’s in the second quarter: The sporting goods chain reported that same-store sales were up 1.8% — a big improvement from the 5.1% dip in the year ago period — thanks to a 2.8% uptick in transactions.
And though profits missed ‘ expectations, the retailer’s sales were still up compared to 2019.
The Pennsylvania-based chain also opened seven new House of Sports locations during the quarter.
The stores, which are up to 100,000 square feet, combine retail with activities such as climbing walls and driving range simulators.
|
Consumer & Retail
|
KK Shah Hospitals IPO Allotment Finalised: Where & How To Check Allotment Status
All you need to know about KK Shah Hospitals IPO
KK Shah Hospitals Limited, formerly Jeevan Parv Healthcare recently concluded its IPO on October 31. The IPO, with a fixed price of Rs 45 per share, aimed to raise Rs 8.78 crores through the issuance of 19.5 lakh fresh shares. For retail investors, the minimum investment was Rs 135,000, requiring a minimum lot size of 3000 shares. High Net Worth Individuals (HNI) needed to invest Rs 270,000 for 2 lots (6,000 shares).
KK Shah Hospitals IPO was subscribed 13.58 times. The public issue was subscribed 9.41 times in the retail category, 17.75 times in the Other category by October 31, 2023.
KK Shah Hospitals IPO Allotment Date
The allotment of shares of the KK Shah Hospitals IPO is expected to be finalised on Friday, November 3. As per the latest update the allotment has now been finalised.
*This is a tentative date and is subject to change.
KK Shah Hospitals IPO Listing Date
KK Shah Hospitals Limited is expected to be listed on BSE SME on Wednesday, November 8.
*This is a tentative date and is subject to change.
Where to check KK Shah Hospitals IPO allotment status
You can check the allotment status of KK Shah Hospitals IPO on the official website of the registrar, Bigshare Services Pvt Ltd, or on the official BSE website.
How to check KK Shah Hospitals IPO allotment status on Bigshare Services Pvt Ltd
Visit the official website of Bigshare Services Pvt Ltd: https://ipo.bigshareonline.com/ipo_status.html
Select any one server to check your IPO Allotment Status.
Choose "KK Shah Hospitals Limited" from the list of companies.
In the Selection Type dropdown, choose either Application number, Beneficiary Id, or PAN ID.
Enter the required information, which could be your application number, PAN (Permanent Account Number), or Beneficiary Id.
Complete the 'captcha' to verify that you are not a robot.
Finally, click the "Search" button to check your allotment status.
How to check KK Shah Hospitals IPO allotment status on BSE website
Visit the BSE website at https://www.bseindia.com/investors/appli_check.aspx
Select 'Equity' in the issue type.
Choose 'KK Shah Hospitals Limited' in the Issue Name.
Enter either the Application Number or PAN.
Complete the captcha verification by clicking on 'I'm not a robot.'
Click on the 'Search' button to view your IPO allotment status.
KK Shah Hospitals IPO Timeline (Tentative Schedule)
IPO Open Date: October 27
IPO Close Date: October 31
Basis of Allotment: Friday, November 3
Initiation of Refunds: Monday, November 6
Credit of Shares to Demat: Tuesday, November 7
Listing Date: Wednesday, November 8
KK Shah Hospitals IPO Issue Details
Total issue size: Rs 8.78 crores
Face value: Rs 10 per share
Fresh issue size: 1,950,000 shares
Shares for fresh issue: 1,950,000 shares
Price per share: Rs 45
Lot size: 3000 Shares
About KK Shah Hospitals Limited
KK Shah Hospitals Limited, formerly Jeevan Parv Healthcare Limited, is a healthcare provider in Ratlam, Madhya Pradesh. Established in 2022, it operates a hospital with over 26 beds, offering in-patient and out-patient services. Dr. Kirti Kumar Shah, a promoter, started a clinic in 1976 and a nursing home in 1991, and in December 2022, KK Shah Hospitals acquired M/s Shah Hospital.
The hospital maintains a 27.67% bed occupancy rate and is NABH Accredited. In January 2023, it partnered with M/s. Life Care Diet Service to provide food services.
|
Stocks Trading & Speculation
|
Britons support Labour policies on taxing the rich, employment rights, doctors, and climate change, but oppose those on strikes
As we edge closer and closer to the next general election, Labour continues to maintain a consistent lead of 15 points or more in YouGov’s Westminster voting intention polls. While many people desire a change of government, how sold are Britons on Labour’s plans? A recent YouGov poll offers us some clues, by taking a look at some policy proposals that have either been announced or hinted at by Starmer and the shadow cabinet.
The most popular policy of Labour’s that we tested is their commitment to double the number of training places for doctors to 15,000. This is supported by 86% of Britons, including around nine in ten Labour (94%) and Conservative (88%) voters, and opposed by just 4%.
Britons would support Labour’s proposed expansion of workers’ rights, but want to keep the practice of probation periods
Labour has announced that in government they would expand the provision of workers’ rights in the UK. These policies are overall popular with Britons. The most popular is a ban on the practice of fire and rehire, where businesses fire employees and then offer them the same job on a contract with less favourable conditions – such a move would be supported by two thirds of Britons (68%).
A similar number would also support the banning of zero-hour contracts (67%), where employees are not entitled to any paid leave, nor guaranteed any paid hours. Extending the minimum amount of paid maternity and paternity leave granted to new parents (currently nine months and two weeks respectively) is also popular, with 56% in favour.
Less popular, however, are plans to end the practice of probation periods, where new employees have less rights in terms of job security than employees who have been there longer, which Britons tend to oppose by 47% to 40%.
Plans to make it easier for workers to take industrial action are unpopular
Keir Starmer has said he would repeal elements of the Trade Unions Act 2016, which makes it a requirement that any union ballot to strike has at least 50% turnout, and receives 40% backing for the strike.
A move to repeal either of these stipulations would be opposed by 42% and 41% respectively, with 27-28% in favour. Labour voters are most likely to support making strike action easier in general (63%), but are more divided on removing the threshold changes specifically, with around four in ten supporting the removal of each of these requirements (38% for both), compared to a third opposed (33% and 34%).
Labour’s tax reform plans for the rich are popular
The party has suggested they may back some form of wealth taxation in the UK. A previous YouGov poll in January found that wealth taxes are generally popular with Britons. However, support for the wealth tax proposal we asked people about here – a 1% tax on wealth over £500,000 collected annually – has fallen since then from 53% to 49%. This does, however, still represent a preference for such a move, with only one in four (26%) opposed. Support for Labour’s commitment to end ‘non-dom’ tax status has also fallen slightly since we last asked about it in January, from 57% to 52%.
Photo: Getty
|
Workforce / Labor
|
Fashion giant H&M has become the latest retailer to charge shoppers who return items bought online.
Customers now must pay £1.99 to return parcels either in store or online, with the cost taken from their refund. However, returns are still free for H&M members.
Rival retailers such as Zara, Boohoo, Uniqlo and Next already charge for online returns.
An H&M spokesperson told the BBC the move was introduced in the summer.
Online shopping rose strongly during the pandemic, but this has also meant a big increase in the number of items being sent back because they do not fit, or are not as expected.
Returns can be a headache for retailers, because not only do they often cover the costs of online returns as a way of winning customers from rivals, but it also takes longer for warehouse staff to process returned stock.
Analysts said other retailers were likely to follow H&M in charging for returns.
"It's interesting that companies seem to be doing it by stealth, but it's a sensible thing to be doing," said retail expert Jonathan De Mello.
"It makes economic sense, as it discourages shoppers from bulk buying online products and then returning the majority of them. That's been a real problem for companies."
He said that while some customers might react negatively, most would understand the need for companies to make this decision.
Many shoppers are also becoming more aware of the environmental impact of deliveries and returns. Fewer postal returns means fewer delivery vehicles travelling up and down with parcels.
But Mr De Mello warned that it might spark a backlash among some groups of people, such as those with disabilities, who rely on online shopping.
Your consumer rights
- You are entitled to a refund within 30 days of the sale if goods are faulty and bought from a UK-based retailer
- Shops are not forced to exchange goods if you have simply changed your mind, unless you bought them online in which case you have the right to return them within 14 days
- In most cases, goods bought online have extra protection, under the Distance Selling Regulations
- You can find more information on your consumer rights here.
On H&M's website, it tells shoppers they will not be charged the £1.99 fee if items are determined to be faulty or incorrect. It urged customers to make sure to note that information when registering their returns.
It also says its members can continue to make returns for free.
Mr De Mello said that reflects a wider trend in retailing towards loyalty schemes.
"Particularly in the cost of living crisis, retailers need to work harder to retain customers, as people are keen to shop around for the best deals," he said.
"Loyalty is fickle, but if you can provide clear incentives, such as free returns, then you're more likely to retain your customers."
Have you noticed any changes in online shopping recently? You can get in touch 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:
|
Consumer & Retail
|
Poor scrutiny of the “complex” tax system has led to relief abuse and even fraud, an influential finance committee of MPs have warned.
The Treasury Committee is calling for a systematic review into the cost of over a thousand forms of tax relief which they say are “complex, un-costed and exploited” in a new report.
Chairwoman Harriet Baldwin said: “Our tax system is too complicated, and the proliferation of un-costed tax breaks add to that complexity.
“HM Revenue and Customs (HMRC) and the Treasury need to work hand in glove to get a grip on the complexity, lack of transparency and potential for abuse.”
Tax reliefs allow individuals and companies to reduce their tax when they meet conditions, such as firms investing in research and development, or workers benefiting from their personal allowances.
During an inquiry into the system, MPs were told there are more than 1,180 tax reliefs currently operating, but just 365 have official costings, leading to risks of abuse and fraudulent usage.
‘Ever-expanding tax code’
They urged ministers to order a comprehensive review to find opportunities to simplify the system; to reclassify reliefs as government spending; and give departments more responsibility for budgeting.
HMRC analysis found 105 of the 1,180 reliefs cost the public purse a total of £195bn – and the MPs have urged the body to publish all relief costs from the tax year 2025 – 2026 onwards.
The committee also called for five-yearly reviews to remove reliefs which no longer achieve policy objectives, are vulnerable to abuse or cost significantly more than expected.
Baldwin added: “While some reliefs are very effective, others are prone to abuse or simply lie dormant, cluttering the ever-expanding tax code.
“The fact we only have costings for a third of reliefs is staggering and something which needs rectifying with urgency.”
A government spokesperson said: “Tax reliefs are a key way we can support fairness in the system and encourage activity that can help grow our economy.
“Keeping tax simple remains a priority, as seen with the recent abolition of the pensions Lifetime Allowance and reforms to alcohol duty. Additionally, HMRC continue to take action against tax relief fraud, more than doubling the number of people working in R&D compliance.”
|
Inflation
|
Aegis Logistics Q2 Results Review - Outlook Intact Amid Stable Performance: Motilal Oswal
Construction of India’s largest cryogenic LPG terminal with a capacity of 80,000 million tonne at Mangalore is currently underway.
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Aegis Logistics Ltd. reported in-line Ebitda of Rs 2.1 billion, though its revenue was down 43% YoY due to reduced sourcing volumes and lower liquefied petroleum gas prices in Q2 FY24. However, management does not expect any significant impact of this on the company’s profit level.
Throughput volumes surpassed the milestone of 1 million metric tonne in a single quarter for the first time in Q2 FY24. Management expects throughput volumes to grow 20% YoY in FY24 driven by the ramp-up of Kandla terminal.
A capex program of Rs 45 billion has been planned for the joint venture over 2023-27, which would be funded via internal accruals, debt, and some cash injections by shareholders.
However, such a high and ambitious capex will burden Aegis Logistics’ balance sheet, with the focus shifting away from the LPG business, which may elevate uncertainty.
Additionally, competition from oil marketing companies as well as private players makes the ramp-up in LPG throughput challenging.
The stock currently trades at 19.5 times FY25E earnings per share of Rs 14.5.
We value the stock at 22 times FY25E EPS to arrive at our target price of Rs 320.
We maintain our 'Neutral' rating on the stock.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
|
Stocks Trading & Speculation
|
The Securities and Exchange Commission is formally engaging with asset managers ahead of a much anticipated decision on whether the regulator will approve a bitcoin ETF, according to memos published this week.
The regulator said in a memo that it met with Grayscale on Thursday about the potential conversion of the Grayscale Bitcoin Trust into an ETF. The SEC had previously blocked this move, but Grayscale challenged that decision in court and won.
SEC officials also met with representatives from BlackRock and the Nasdaq on Wednesday, according to a separate memo. BlackRock filed for a bitcoin ETF in June, followed shortly by a handful of other asset management firms.
While the SEC could still decide to block crypto ETFs, many industry experts expect that such funds will launch in the U.S. early next year. The regulator has delayed decisions on several bitcoin funds in recent months, and may choose to approve or deny all applications at around the same time.
SEC Chair Gary Gensler has been a vocal critic of crypto, but has said in recent public appearances that he would listen to his staff's input on a potential bitcoin ETF.
Grayscale also recently hired John Hoffman, a longtime Invesco ETF executive, as a managing director. Hoffman will serve as the head of distribution and strategic partnerships for Grayscale, a sign that the crypto asset manager is gearing up to launch the fund if approved.
The growing confidence in the market that a bitcoin ETF will eventually be approved appears to have boosted the price of bitcoin. The cryptocurrency was trading above $37,000 on Thursday after falling to about $26,000 late this summer.
Don't miss these stories from CNBC PRO:
- Michael Burry reveals new bet against chip stocks after closing out winning market short
- Warren Buffett's Berkshire trimming holdings, keeping new stock secret
- It's been 2 years since the Nasdaq hit a record and it's gone nowhere since
- Deutsche Bank says this electric flying vehicle stock will more than double in the next 12 months
|
Crypto Trading & Speculation
|
SEBI Looking To Introduce 'MF Lite' Regulations For Passive Funds
Capital markets regulator Securities and Exchange Board of India is engaged with the mutual fund industry to introduce 'MF Lite' regulations for passive funds, a move that will reduce the compliance burden and foster innovation.
Capital markets regulator Securities and Exchange Board of India is engaged with the mutual fund industry to introduce 'MF Lite' regulations for passive funds, a move that will reduce the compliance burden and foster innovation.
A passive fund is an investment vehicle that tracks a market index or a specific market segment. These funds include passive index funds, Exchange Traded Funds and Fund of Funds investing in ETFs.
"Since the current MF regulatory framework was built around active fund management, SEBI is planning to introduce Mutual Fund Lite regulations for passive funds, wherein investment decisions are not discretionary, but tied to changes in the underlying benchmark index," the regulator said in its annual report for 2022-23, which was released on Monday.
These new regulations are expected to significantly reduce the compliance requirements of passive funds and foster innovation in the passive fund ecosystem, it added.
The regular mutual fund schemes, which raise money from the public, have to comply with a number of regulations.
In regular mutual funds, investment decisions are at the discretion of the fund manager and since lakhs of small investors trust mutual funds, these have stringent requirements, including high Asset Management Companies net worth, experienced investment team, among others, Sebi said.
However, if a mutual fund desires to offer only passive investment products such as ETFs and index funds -- where investment decisions are not discretionary, but are tied to changes in the underlying benchmark index -- then there is a case to provide them a regulatory framework with fewer compliance requirements, it added.
Accordingly, SEBI is currently engaged with the mutual fund industry to introduce 'MF Lite' for such entities.
Earlier in May, SEBI Whole-Time Member Ananta Barua said the regulator will come out with mutual fund light regulations for passive funds.
In its annual report, SEBI said the current regulatory rules applicable for fees and expenses charged by mutual fund schemes will be reviewed to encourage new participants, discourage cross-subsidisation across schemes, and curb malpractices.
The regulator in May came out with a consultation paper proposing sweeping changes to mutual funds' total expense ratio, which accounts for the fees and expenses charged by AMCs.
SEBI is also considering allowing them to sell credit default swaps for the purpose of taking exposure in synthetic corporate bonds to provide additional investment products for mutual funds.
In the coming year, SEBI said it expects to see the launch of more facilities that are global firsts, such as the Investor Risk Reduction Access platform -- a special window for facilitating investors to directly access the stock exchanges in the event of significant downtime of broker -- and a SaaS-based model for clearing corporations to deal with cybersecurity events.
Besides, one of the key focus areas for SEBI will continue to be the facilitation of financial inclusion in the securities market in the coming years.
"We expect that technology will enable financial products and services offerings to be made available in a cost-effective manner, in every nook and corner of the country, without compromising on risk management and prudential norms as may be necessary," SEBI said.
|
Banking & Finance
|
Republican Rep. Nancy Mace warned of the "staggering challenge" Congress faces in finding a solution to the high cost of child care as pandemic-era federal funding is set to expire within weeks, a situation being referred to as the "child care cliff."
The The Century Foundation, a progressive think tank. Millions of parents could be impacted — and weaken the labor market if they are forced out of the workforce.allocated nearly $40 billon to the child care industry to help providers stay open during the pandemic. With that funding set to expire on Sept. 30, 70,000 child care programs could close and more than 3 million children could lose their child care spots, according to
Mace and Democratic Rep. Ro Khanna recently launched the Congressional Bipartisan Affordable Childcare Caucus to address the high cost of child care.
"We talk about 4-year-old pre-K. We talk about making sure that parents have the freedom and the resources to have child care options — affordable child care options," Mace told "Face the Nation" on Sunday.
"I approach it from a less-government-regulation standpoint," she said. "We have some really crazy regulations in this country. Some places say you have to have a four-year college degree. Well, that certainly makes it harder to find child care workers, increases in cost because of it. Other places say well, if you're certified in one state, it's not reciprocal in another."
Mace said rolling back smaller regulations that could pass the Republican-controlled House and the Democratic-led Senate would be a "good start" to making a "big difference."
"It's not going to be easy to do some large comprehensive spending package," she said. "It's going to have difficulty going through [the House and Senate], so I'm looking for the small parts, big difference here policy-wise."
Khanna told "Face the Nation" they have an agreement on more training, flexibility and higher pay for child care workers, as well as "some government policy support for child care."
"The average cost of a family for child care is $10,000 a year, and 85% of women say that they can't work because of child care issues, if they're leaving the workforce," Khanna said. "So we need a short-term solution, which is continuation of some of the grants and funding the child care stabilization act, so we don't have this cliff and that the president signs. And then we need a long-term solution to reduce the cost to families."
for more features.
|
Workforce / Labor
|
Key Takeaways
- Procter & Gamble Co. (P&G) will take up to $2.5 billion in charges for a restructuring along with an impairment related to its Gillette business.
- The consumer products company said the restructuring would take place primarily in certain of its enterprise markets, including Argentina and Nigeria.
- Procter & Gamble warned that while the Gillette unit's business is strong, certain conditions could require a further impairment charge in the future.
- P&G shares were down 3.5% from the day earlier in late Tuesday trading.
Procter & Gamble Co. (PG) shares fell 3.5% on Tuesday after the consumer products giant said it would be taking up to $2.5 billion in charges over the next two fiscal years related to a restructuring of some operations and impairment costs.
The company said in a regulatory filing Tuesday that the restructuring would take place primarily in certain enterprise markets, including Argentina and Nigeria, “to address challenging macroeconomic and fiscal conditions.”
P&G said those costs would be in the range of $1.0 billion to $1.5 billion after tax, and would be recognized in the 2024 and 2025 fiscal years, with initial charges recognized in the current quarter.
The company added that also in this quarter it would record a $1.3 billion pretax ($1.0 billion after-tax) non-cash impairment charge on “intangible assets acquired as part of the Company’s 2005 acquisition of The Gillette Company.”
P&G explained that impairment charge was related to “a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate,” as well as weakening of several currencies relative to the U.S. dollar and the impact of the restructuring program.
The company warned in the regulatory filing that while the underlying performance of the Gillette business remains strong, “future adverse changes in the business or macroeconomic environment may trigger a further impairment charge.”
The news sent shares of Procter & Gamble further into negative territory for 2023.
|
Consumer & Retail
|
Cryptocurrency prices remained under pressure to end the week.
Bitcoin was lower by about 5% at $26,366.99, according to Coin Metrics, following a stunning fall late Thursday, when it dropped to as low as $25,533.70.
For the week, bitcoin is down more than 10% and on pace for its seventh weekly loss in the past eight and its worst week since mid-May. Coin Metrics measures a week in crypto, which trades 24 hours a day, from the 4:00 p.m. ET stock market close one Friday to the next.
Crypto was under pressure throughout Thursday but dropped sharply around 6 p.m. ET., following a report in The Wall Street Journal that Elon Musk's SpaceX wrote down the value of its bitcoin holdings by $373 million last year and in 2021, and sold the cyrptocurrency.
"The selloff appears to largely have been fear-induced on the back of headlines that SpaceX sold off Bitcoin assets," said Darius Tabatabai, co-founder at decentralized exchange Vertex Protocol. "No proof has emerged that happened, and thin summer liquidity led to prices gapping dramatically downward, causing cascading liquidations in derivatives markets, further amplifying the drop similarly to how we've seen selloffs occur in panic selling episodes."
"Currently, we're seeing negative funding rates for perpetual futures, which can portend bearish momentum for the time being, but in this case it could very well turn on a dime, given the speed and violence of the move," Tabatabai added.
Bitcoin has been stagnant for much of the third quarter, a historically weak one for the cryptocurrency. It's now off 13% for the quarter and about 9% for August. Despite recent softness in the market even ahead of this week's dramatic slide, bitcoin is still up about 60% in 2023.
—CNBC's Nick Wells contributed reporting.
|
Crypto Trading & Speculation
|
LONDON (Reuters) - Big U.S. investors at the top five western oil firms' shareholder meetings this year rebuffed an activist group's resolutions to align their emission targets with the Paris climate pact, in contrast to some European peers, voting data showed.
Netherlands-based activist group Follow This was created first to target Shell and subsequently expanded to file climate resolutions at other western majors including BP, Exxon Mobil, Chevron and TotalEnergies.
According to the data published by it and investors, giant U.S. investors BlackRock, Vanguard, State Street and JPMorgan all voted against the Follow This resolutions this year.
The resolutions asked the groups to align their 2030 end-use emissions targets with the Paris goal of keeping warming well below 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels, which scientists say will mean cutting greenhouse gas emissions by around 43% from 2019 levels.
France's Amundi and Britain's HSBC voted in favour of the activist group at all five energy companies, while Switzerland's UBS voted in favour of its resolution for all apart from BP.
Germany's Allianz supported Follow This at Chevron's and Exxon's meetings.
"Investors hold the key to tackling the climate crisis with their shareholder voting power at Big Oil. Amundi, Allianz, and UBS use their voting power to mitigate the climate crisis,” said Follow This founder Mark van Baal.
In 2022, Follow This resolutions received between 15% and 33% of the votes at the big five excluding TotalEnergies, where it did not file a resolution that year. This year, it received between 10% and 30% support at the five firms.
Britain's Legal & General IM voted against Follow This across the board this year, after supporting the activist resolution for Chevron and Exxon at last year's shareholder gatherings.
This mirrors big shareholder proxy voting firm Glass Lewis and ISS, which changed some of their recommendations for this year to the detriment of Follow This, including withdrawing support for the activist resolution at Chevron.
(Reporting by Shadia Nasralla; Editing by Jan Harvey)
|
Energy & Natural Resources
|
Chainalysis' head of investigations doesn't seem to have a great understanding of whether her company's flagship software even works. From a report: Elizabeth Bisbee, head of investigations at Chainalysis Government Solutions, testified she was "unaware" of scientific evidence for the accuracy of Chainalysis' Reactor software used by law enforcement, an unreleased transcript of a June 23 hearing shared with CoinDesk shows.
The fact that Chainalysis' blockchain demystification tools have become so widespread is a serious threat to the crypto ecosystem. Although industry insiders have raged against Chainalysis since it was founded, often accusing it of violating people's financial privacy, there may be a better argument to make against the company and analysis firms like it: it's within the realm of possibility that these "probabilistic" machines don't work as well as advertised. This is a big deal considering Chainalysis' surveillance tools are used widely across the industry for compliance, and have at times led to unjustified account restrictions and -- even worse -- land unsuspecting individuals on the radar of law enforcement agencies without probable cause.
The fact that Chainalysis' blockchain demystification tools have become so widespread is a serious threat to the crypto ecosystem. Although industry insiders have raged against Chainalysis since it was founded, often accusing it of violating people's financial privacy, there may be a better argument to make against the company and analysis firms like it: it's within the realm of possibility that these "probabilistic" machines don't work as well as advertised. This is a big deal considering Chainalysis' surveillance tools are used widely across the industry for compliance, and have at times led to unjustified account restrictions and -- even worse -- land unsuspecting individuals on the radar of law enforcement agencies without probable cause.
|
Crypto Trading & Speculation
|
FORT LAUDERDALE, Fla. -- Seventeen Florida sheriff's deputies appeared in court Thursday on charges that they stole about half a million dollars in pandemic relief funds.
The Broward County deputies, who are charged separately, are accused of a range of crimes, according to court records. Most are charged with wire fraud, which carries a sentence of up to 20 years in prison, though one deputy is charged with conspiracy to commit wire fraud, which has a maximum sentence of five years.
The eight law enforcement deputies and nine detention deputies have been suspended, Sheriff Gregory Tony said during a news conference. He said his office is going through the legal process of firing them.
“At the end of the day, they will be gone," Tony said.
The deputies collectively defrauded the Paycheck Protection Program and the Economic Injury Disaster Loan program out of about $500,000, said Markenzy Lapointe, the U.S. attorney for the southern district of Florida.
“No matter the amount, we will not allow limited federal tax dollars, which were intended to provide a lifeline to small businesses as they struggled to stay afloat during the economically devastating pandemic lockdown, to be swindled by those who were employed in a position of trust and cast aside their duty to uphold and abide by the law,” Lapointe said.
Tony said his office began investigating the agency's 5,600 employees in late 2021 after learning that pandemic relief fraud was an emerging trend within public service agencies and receiving a tip that some of his employees might have participated in fraud. Broward Sheriff's Office investigators found about 100 employees who had applied for COVID-19 relief loans and eventually turned the investigation over to the U.S. attorney’s office and the Federal Reserve Board.
"For five years, I’ve maintained an organization committed to transparency and accountability," Tony said. “I will continue to expect integrity and commitment to excellence from every BSO employee.”
Lapointe said his office continues to investigate possible fraud.
The Paycheck Protection Program involves billions of dollars in forgivable small-business loans for Americans struggling because of the COVID-19 pandemic. The money must be used to pay employees, mortgage interest, rent and utilities. It is part of the coronavirus relief package that became federal law in 2020. The Economic Injury Disaster Loan program is designed to provide economic relief to small businesses that are experiencing a temporary loss of revenue.
|
Banking & Finance
|
Planning red tape is holding back Rishi Sunak’s bid to make Britain a life sciences ‘superpower’, officials have been told, amid a dearth of laboratory space across the UK.
Figures seen by the Telegraph show that around 56pc of planned life science developments in Britain’s so-called ‘Golden Triangle’ of Oxford, Cambridge and London are still waiting to receive planning permission.
The analysis, compiled by the London Property Alliance and presented in a closed-door meeting to planning officials for the capital last week, reveals around 2.6 million square feet of lab space in London is still awaiting a planning decision.
Retail and pharmaceutical experts said resourcing issues within local authorities were to blame for projects being held up for longer than necessary.
It threatens to strike a blow to Britain’s ambition to take a leading position in life sciences research globally.
The Prime Minister earlier this year unveiled a sweeping plan to cement the UK as a science and technology superpower by 2030, saying Britain could “only stay ahead with focus, dynamism and leadership”. The ten-point plan included a £50m fund to help research institutes and universities improve their facilities to give researchers access to better lab space.
Sir John Bell, the UK’s life sciences champion who played a crucial role during the Covid vaccine development, has described the lack of space as a “massive problem” which would weigh on innovation in Britain. “Planning delays are rife and we have a serious shortage of lab space,” he said.
Lab vacancy rates in London and Cambridge at just 1pc and around 7pc in Oxford.
It has sparked a race for any space, with more space taken in Cambridge in the first seven months of the year than was agreed in the whole of 2022.
In London, fully-fitted lab suites are being rented for more than £75 per square foot, compared to £65 in 2022, according to Savills data. It is expected to hit £90 by 2026.
Experts warned that this was creating a bottleneck for growth, preventing researchers from being able to find enough space to develop innovations.
It comes after years of Britain being a leading global hub for biotech companies, with only the US outpacing the UK for innovation. Around 31pc of all start-ups created in Europe between 2018 and 2020 were formed in the UK, according to figures from McKinsey.
Charles Begley, head of the London Property Alliance, which represents 400 real estate companies and investors, said: “The property industry has played a key role in the emergence of clusters across the capital, helping embed a DNA of life science innovation and bringing the world’s leading companies and research professionals together.
“But we cannot take this success for granted and without action London risks losing its momentum to the likes of New York and Copenhagen, which have put in place ambitious frameworks for growth.”
The industry group urged the Government to “advance tangible plans that would help strengthen the spin out eco-system” as well as push for faster and more effective decision making over planning permission.
Estimates suggest that Boston, San Francisco, San Diego and New York have more than 20 times the amount of lab space in the UK.
Daniel Hajjar of HOK, the life science project experts, said Britain would not be able to spawn innovation and entrepreneurship without the right research facilities and ecosystem.
He said: “Frankly, a researcher will look at things like where can I get affordable space and where is it best for my staff to live, work and play.”
He said other countries would be racing to attract companies by giving start-ups “what they’re asking for”. Mr Hajjar added: “If the UK isn’t willing to invest in the sector then there’ll be somewhere else that is.”
|
Real Estate & Housing
|
When Zoe Jiang was at home in China, packing her bags to stay in Sydney, she did not think to bring an item that would prove essential — a tent.
Key points:
- Thousands of international students flooded back into Australia in January to resume their studies
- Sydney's rental vacancy rate has plummeted, leading to a 35 per cent rise in unit rents
- The Tenants Union says some international students have been forced into unlawful and abusive living situations
The 27-year-old finance student arrived in Australia in January, only to find rental prices so high that she had to rely on short-stay accommodation.
At one of the short stays, Ms Jiang had no room of her own. She had to pitch a tent in the middle of the living room so she could have some privacy from her housemates who came home late.
It cost $300 a week in rent.
"I have never had a night in a tent before," she said.
"It's a fresh experience, and I think camping in a living room is very different."
Ms Jiang has now secured long-term accommodation, but this was just one of three places she stayed in less than two months.
She is one of many international students caught in the growing rental shortage across Australia.
Housing advocates are concerned that international students are at risk of exploitation and are calling on universities and governments to step in and offer support.
International students face extra barriers to finding accommodation
Ms Jiang is one of the thousands of Chinese international students who had to rush back to Australia or risk losing their qualifications under a new Chinese government policy.
She joined the 59,000 international students who arrived in Australia in January, a number "more than double" the same period last year, according to Universities Australia.
But Sydney's rental vacancy rate has reached its lowest point, leading to a 35 per cent rise in unit rents across the city.
Hundreds of people are lining up outside rental inspections, but international students face extra barriers.
Yeganeh Soltanpour, the national president of the Council of International Students Australia, said many newly arrived international students are often overlooked by real estate agents.
"[They] don't have a rental history because they are from overseas, so the chance for them to apply for a rental and get it is a lot lower," she said.
And while local students may be able to find rental vacancies through personal and family networks, new international students have "almost zero connections" with local communities.
"They can't ask someone for help, they don't always know where to look at ... [and] they might not know a lot about the areas," she said.
"They may not even know how to use public transport properly.
"This leads to the issue that they have to choose homes within the CBD area, which means they have to pay more rent."
Students aren't to blame for rental crisis, experts say
Zoe Jiang is not the only international student forced to stay in a room not designed for sleeping.
But according to Leo Patterson-Ross, the CEO of the Tenants' Union of NSW, transforming a living room into a bedroom could be unlawful.
"The assumption is that it is unlawful under planning rules, under local councils, to convert a room to her bedroom without getting consent from council," he said.
Mr Patterson-Ross said he had seen "some very unlawful and often abusive behaviour" from landlords and head tenants who sublet rooms to students.
These include taking students' passports and threatening to report them to the immigration department if they breach the tenancy agreement.
He also said that to prevent exploitation against international students, the government needs to fix "the fundamental issue" that now affects everyone.
"We just do not have enough homes for everyone in Australia," he said.
"And that supply is not just the buildings, but also the pricing of the buildings."
He also called for an independent third-party audit to ensure rentals in the market are of good quality rather than pushing renters to bear the responsibility.
Ms Soltanpour has called on international students to support each other to counter the rental crisis while stressing that it was not their responsibility to "fix the issue".
She also said universities must step in and offer more support for students struggling to navigate the rental shortage.
The chief executive of Universities Australia, Catriona Jackson, acknowledged that securing a rental anywhere in Australia is challenging for international students at the moment.
"Universities continue to support students by providing information on accommodation options before they arrive in Australia along with various other support services," she said.
"We encourage any student struggling to secure housing or facing financial pressures to reach out to their university for assistance."
Meanwhile, life for Ms Jiang has turned a corner.
She has found her own room in north Sydney, and it costs her $300 per week — the same as when she was sleeping in a tent.
On the day she moved in, she met her new neighbour, an elderly Italian woman who migrated to Australia when she was 19.
Ms Jiang's new neighbour invited her to come over for a cup of tea and encouraged Ms Jiang to make new friends during her study in Australia because "life is a gift".
"It's such a great day," Ms Jiang wrote on social media.
|
Real Estate & Housing
|
- CNBC analyzed the balance sheets of seven retailers to determine how much money they're actually losing from shrink and retail theft.
- Generally, the inventory losses are only a small fraction of the retailers' net sales. They also pale in comparison to other factors squeezing margins, such as excessive discounting and promotions.
- Some retailers are pulling back on their contention that organized retail crime is a primary cause of losses.
A range of retailers are again blaming shrink as one of the reasons they saw another quarter of lackluster profits.
But some of those companies have started to offer more detail than ever on how much shrink, or items lost to factors like external or employee theft, damage or vendor fraud, is cutting into their bottom lines.
At the same time, certain retailers pulled back on their contention that organized theft is a primary cause of losses, as scrutiny grows over claims about how much crime contributes to their struggles.
During second-quarter earnings reports in August and September, nearly two dozen retailers said shrink has continued to weigh on profits. But the details each company provided, and the explanations they gave for losses, varied widely.
Many of them said that shrink is at an all-time high and said the industry is struggling to control it. Still, it's difficult to compare the losses to past years because most of the companies have never previously disclosed how much shrink cost them.
Generally, the inventory losses are only a small fraction of the retailers' net sales. They also pale in comparison to other factors squeezing margins, such as excessive discounting and promotions, according to a CNBC analysis of their balance sheets. While shrink is growing for some companies, losses are generally in line with the retail industry standard of 1% to 1.5% of sales — signaling the problem may not be as dire as certain retailers and trade associations have suggested.
When they reported second-quarter results, some companies like Target and Dick's Sporting Goods offered clues into how much shrink is costing them and squarely blamed theft. Target lost about $219.5 million to shrink during the three months ended July 29, while Dick's lost about $27.1 million during the same period, according to a CNBC analysis.
Meanwhile, Ulta and Foot Locker, which both blamed "organized retail crime" for losses in May, did not mention theft during their most recent results. They only used the term "shrink" when discussing how it squeezed margins.
Lowe's has some of the highest shrink numbers among the companies analyzed by CNBC. It has blamed a range of factors for the losses. Sometimes it has said organized retail crime cut into profits, but in other cases, it blamed weather-related damages.
During its second quarter earnings call with analysts, the company said shrink was in line with the year-ago period. But its annual securities filing offered more detail: the retailer revealed that its shrink in fiscal 2022 ballooned to $997 million, up from $796 million in fiscal 2021.
Other companies, like Walmart, noted that shrink isn't always related to retail theft when reporting second-quarter earnings. It said it remains focused on other causes of inventory losses that are "more controllable."
Over the last few quarters, more and more retailers have called out shrink as a drain on profits and blamed theft for those losses. But they have offered few details about how much inventory losses are actually costing them. Experts have said some companies could be using crime as an excuse to distract from other operational challenges that drive shrink, such as poor inventory management and staffing issues.
Companies that have disclosed shrink numbers and explained to investors how they're working to solve it show that they have a grasp on the problem, Sonia Lapinsky, a partner and managing director with AlixPartners' retail practice, told CNBC. Others that loosely blame shrink and theft for plummeting profits without providing much more explanation may be trying to obfuscate internal issues, said Lapinsky.
"Are you clearing way more inventory because you mis-planned it and you mis-bought it and that's what's really getting a bigger profitability hit?" said Lapinksy. "But because everybody's saying 'let's just blame the theft that's increased and that's out of my control,' let me tell the Street that that's why it's happening and not disclose what's really going on in operation."
CNBC analyzed securities filings, earnings calls, press releases and other publicly available records to try to quantify how much shrink is costing retailers and how it compares to losses from other factors, such as excessive discounts.
No retailer explicitly disclosed their second-quarter shrink. Some revealed inventory losses as a percentage of sales, while others said how much they grew compared to the prior year. Using those clues, CNBC calculated shrink estimates for seven companies.
Here's how much shrink is costing those retailers, based on a CNBC analysis.
- Fiscal 2022 annual shrink loss: $997 million
Lowe's has been citing shrink as a drag on earnings for years – well before other retailers started referencing it during earnings calls and press releases — and has called out theft as a driver.
However, theft didn't appear to fuel lower profits at Lowe's during its most recent quarter ended Aug. 4. During an earnings call, the home improvement retailer noted that shrink was in line with the prior-year period, when it reported a 0.1 percentage point hit to its gross margin "largely due to live goods damaged by unseasonable weather."
On an annual basis, Lowe's shrink has been steadily increasing at a rate that's disproportionate to its revenue increases. Between the fiscal years ended Feb. 1, 2013 and Feb. 3, 2017, Lowe's annual shrink consistently represented about 0.6% of its net revenue, according to a review of the company's annual securities filings. However, that trend began to change during fiscal 2017. By the end of fiscal 2021, the hit to profits climbed to $796 million, or 0.8% of sales. During fiscal 2022, it rose to $997 million, or 1.03% of sales.
The inventory losses are still in line with the industry standard of about 1% to 1.5% of sales and tend to be less than profit drains from other factors.
For example, shrink during fiscal 2022 hit Lowe's gross margin by 0.2 percentage points and was $201 million higher than the year-ago period. But high transportation costs and expenses associated with expanding its supply chain network squeezed profits by 0.3 percentage points. When taken as a percentage of sales, those costs came in at about $291 million.
- Second quarter shrink cost: $219.5 million
Shrink bit into Target's gross margin by 0.9 percentage points during its fiscal second quarter ended July 29, the retailer said in a securities filing. When taken as a percentage of sales, that amounts to a hit of about $219.5 million. For the first half of the year, shrink costs have reached about $444 million.
Target previously revealed it is on pace to lose more than $1 billion this fiscal year from shrink, up from $753 million last fiscal year.
Target's shrink losses in fiscal 2022 represented about 0.7% of its total sales. They paled in comparison to how much profit the retailer lost from liquidating excess merchandise and taking other inventory actions during the year.
The company noted in its annual securities filing that "merchandising" hit its gross margin by about 3.4 percentage points, which amounted to about $3.66 billion shaved off of profits. Those costs included all of the promotion and markdowns Target took to clear out excess discretionary merchandise, plus higher product and freight costs.
Target's margins have improved this year from fewer markdowns, lower freight costs and price increases.
- Second quarter shrink cost: $11.2 million
When the department store reported quarterly results for the period ended July 29, it posted a net loss of $22 million, or 8 cents per share. During a call with analysts, Macy's executives said shrink reduced earnings per share by 4 cents.
That would amount to a loss of about $11.2 million during the quarter, based on the 279 million diluted shares it had at the end of the period. Those costs are after-tax.
On the other hand, a slowdown in credit card revenue made earnings 11 cents per share less than what Macy's had projected for the quarter, which amounts to about $30.7 million.
During the prior quarter, Macy's reduced its annual outlook in part because it expects higher costs from shrink. The retailer reduced its expected earnings per share by nearly a dollar to $2.70 to $3.20, down from a prior range of $3.67 to $4.11.
The retailer attributed the slashed outlook to "heightened macro pressures" but also an expected 12 cent impact from "increased [shrink] relative to our previous expectations." That would amount to a projected shrink loss of about $33.5 million for the year.
During an interview with CNBC's Courtney Reagan last month, Macy's CEO Jeff Gennette said that shrink hit record levels in 2022 and it's "going to be higher in 2023." He attributed the uptick largely to "the change in organized theft."
During Macy's fourth-quarter earnings call in March, Gennette blamed the shrink increase on a sales channel shift from digital back to stores, along with increased theft.
- Fiscal 2023 shrink cost: $150 million higher than the year prior
The off-price retailer told analysts it expects shrink to be flat during its fiscal 2024, which is expected to end in January 2024.
While it did not outline the expected inventory losses, TJX previously disclosed that shrink lowered its fiscal 2023 gross margin by about 0.3 percentage points compared to the prior-year period. When taken as a percentage of sales, shrink was about $150 million higher during its previous fiscal year compared to the year prior. Those figures are expected to remain steady during its current fiscal year.
Meanwhile, TJX's 2023 full-year results took a 1.2 percentage point hit because of "incremental freight costs and higher markdowns," Chief Financial Officer John Klinger said during a February call with analysts. Taken as a percentage of sales, that amounts to about $599 million.
- Fiscal 2022 shrink cost: $71.46 million higher than the year prior
The makeup giant said shrink during fiscal 2022 was 0.7 percentage points higher than the previous year. When taken as a percentage of sales, shrink was about $71.46 million higher than in 2021.
Contrary to other retailers, shrink was the largest drag on Ulta's earnings during fiscal 2022, according to a securities filing.
In May, it reduced its full-year outlook for its operating margin by 0.2 percentage points "primarily" because of shrink but also because of the "increased promotional environment." Based on projected net sales of $11 billion to $11.1 billion, Ulta is factoring in about an additional $22 million in losses from shrink and promotions for the fiscal year. The company declined to tell CNBC how much of the 0.2 percentage points was related to shrink and how much was linked to promotions.
- Second quarter shrink cost: $27.1 million
For the first time in nearly 20 years, Dick's last month mentioned shrink as a drag on profits during its earnings call and press release. During the quarter ended July 29, Dick's said its gross margin fell by about 0.8 percentage points because of theft-driven shrink. When taken as a percentage of sales, that amounts to a hit of about $27.1 million.
Efforts to liquidate excess inventory from the company's outdoor category also cut into Dick's gross margin by 1.7 percentage points, the company said. When taken as a percentage of sales, liquidation cost Dick's about $54.8 million in the quarter – about double the effect of shrink.
Dick's reduced its full-year outlook in part because of shrink. It expects sales of about $12.68 billion to $12.92 billion will be reduced by 0.5 percentage points, which would result in full-year profits being about $63.4 million to $64.6 million lower for the year due to shrink.
It's now expecting earnings per share of $11.33 to $12.13, compared to a previous range of $12.90 to $13.80. The reduced outlook takes into account the retailer's second-quarter results, increased shrink and higher selling, general and administrative expenses, which includes items like payroll and advertising.
- Second-quarter shrink cost: at least $87.84 million
In its latest quarterly securities filing, Dollar Tree noted that shrink had reduced its gross margin by 0.6 percentage points for the first half of the year. Based on sales of $14.64 billion for the first six months of fiscal 2023, shrink cost the company about $87.84 million. It's unclear if that was the total amount of shrink Dollar Tree saw or just how much it increased compared to the prior year period.
Meanwhile, margins for the first half of the year were reduced by 2.2 percentage points because people bought more lower-margin items and the company saw higher costs, among other factors, according to a securities filing. Taken as a percentage of sales, that cut into profits by about $314.75 million.
Dollar Tree also factored shrink into its full year profitability outlook. It's expecting earnings to be 55 cents per share lower than previously expected because of shrink and category mix, Chief Financial Officer Jeffrey Davis said on a call with analysts on Aug. 24.
|
Consumer & Retail
|
Walt Disney’s ESPN sports network could secure an enterprise value of $24 billion and attract investment interest from sports leagues, tech firms like Apple and telecom majors including Verizon, according to BofA Global Research.
In a bid to lure an outside investor, the media giant last month disclosed the financials of ESPN that revealed declining sales and profit at the network considered to be the crown jewel of its traditional TV business.
CEO Bob Iger has said Disney wants to keep ESPN and will try to create a streaming app for it by either forming a joint venture or finding a buyer for a minority stake in the network.
That means a 36% interest in ESPN would be up for sale, assuming Disney intends to retain a 51% majority interest and accounting for media company Hearst’s 20% stake, BofA analysts led by Jessica Reif Ehrlich wrote in a note published Wednesday.
Interested parties could include leagues like the National Football League and the National Basketball Association, newcomers like Apple and Amazon, which are jostling to get into live sports, and distributors like Verizon and Comcast, the note said.
Disney would gain a lot from the deal as more capital would mean ESPN would be able to strengthen its offerings, keep the option of a spin-off open and help the network focus on high-growth streaming, the brokerage said.
Rising cord-cutting has hit the linear television business, and acquiring sports rights has become an increasingly expensive affair, with future sports rights expected to be north of $69 billion.
Benefits to prospective buyers, however, appear “nebulous,” BofA said.
“ESPN is still a strong business and a premier brand, but it sits at the nexus of possible major business transformation. Transitions have historically proven difficult and typically not conducive to significant growth,” it added.
|
Consumer & Retail
|
Britain’s weight problem costs almost £100bn a year, analysis suggests, prompting calls for a government crackdown on unhealthy food and a drive to promote fresh ingredients.
The spiralling cost shows that the growing prevalence of people being overweight is “an absolute public health disaster”, said Henry Dimbleby, the government’s former adviser on food.
The cost has soared from £58bn in 2020 to £98bn, according to the Tony Blair Institute. The costs to people affected rose from £45.2bn to £63.1bn a year, and the costs to the NHS from £10.8bn to £19.2bn, according to modelling undertaken for the thinktank by Frontier Economics.
The biggest proportional jump came in costs to society as a whole. These have risen more than sevenfold, from £2.1bn to £15.6bn, mainly from lost productivity because a record 2.4 million people are now too sick to work, often as a result of being overweight or living with obesity.
Costs have risen between a previous analysis that Frontier did and the new one because the latter includes the value of health lost due to illness or weight-related disease.
Dimbleby said Rishi Sunak was not interested in trying to tackle obesity and had wrongly chosen to try to eradicate smoking rather than improving dietary health. In 2020, Dimbleby published a government-commissioned blueprint to radically overhaul Britain’s eating habits and reliance on foods that increase the risk of killer diseases.
“You’ve got a prime minister who for his own, I think, kind of personal aesthetics almost would rather try to deal with smoking, which he sees as bad even though it is now a tiny and disappearing problem, rather than food because he likes to drink Coke,” Dimbleby told a nutrition conference at the Royal Society on Monday.
Dimbleby, a co-founder of the Leon restaurant chain, said food was a direct cause of three of the four main illnesses that are stopping the 2.4 million from working – type 2 diabetes, high blood pressure and musculoskeletal conditions – and exacerbated the other, mental ill-health.
Calling for government intervention on diet, Dimbleby said Britons spent more on confectionery (£3.9bn a year) than fruit and vegetables (£2.2bn), and 85% of the food consumed would be deemed by the World Health Organization to be too unhealthy to be marketed to children.
In order to be healthier and break “the junk food cycle”, people needed to eat 30% more fruit and vegetables, 50% more fibre and 25% less food that is high in fat, salt or sugar, he said. He urged ministers to launch a nationwide drive to teach young people to cook while at school, to close the skills gap between those who can and cannot cook from scratch and to reduce the use of prepared food.
Two-thirds of adults are classed as overweight or obese. Dimbleby said relying on weight loss drugs to tackle type 2 diabetes was misplaced and the government would be wiser to rein in the food industry and promote uptake of fresh food. It was “dystopian” to think that as many as one in three Britons could end up being on drugs such as Ozempic and Wegovy, he added.
Katharine Jenner, the director of the Obesity Health Alliance, said: “The huge increase in costs to £98bn, which now takes into account the value of health lost through illness and disease, is particularly striking as it has risen during a time the government has had a plan to address obesity – and failed to enact it.
“Thirty years ago, half of us were living with overweight or obesity, and now it is two-thirds of the population. In those 30 years, our food environment has changed beyond recognition into an obesogenic environment. It is not that our genes have changed but that we are surrounded by unhealthy food at every turn – on TV, in the shops, on our high streets and in our workplaces.
“If we only attempt to treat people without changing the environment that made them ill in the first place, we will simply be spending huge amounts of extra money in the NHS for little to no long-term benefit.”
|
Inflation
|
Finerio Connect, a Mexico City-based fintech startup, raised $6.5 million in new funding to continue development on its open finance platform providing access to personalized financial products and services.
Nick Grassi and José Luis López, both co-CEOs, started the company in 2018 with the vision of enabling the compliant sharing and consumption of financial data and data analytics across Latin America.
Prior to that, Grassi, an American, moved to Mexico on a Fulbright Scholarship. As part of that, he began working at Deloitte Consulting Mexico, where he met Lopez.
“This was around 2016, and we were tasked with starting the early fintech practice, and the industry itself was just getting started,” Grassi told TechCrunch. “We were helping a lot of different companies — banks, payment processors and insurance companies — figure out what the fintech wave might mean for them.”
Grassi and Lopez got to thinking about platforms, like Mint, where you could control your personal finances. The pair eventually created their own automated personal finance manager with Finerio Connect and launched it at TechCrunch Disrupt’s Startup Battlefield Latin America in 2018.
Knowing when to pivot
Shortly after the launch, Finerio was the fourth most downloaded fintech app that year, according to Grassi. In Mexico, the company gained about 250,000 users after one year.
Around that time, Mexico’s fintech law came out. It was one of the first countries in Latin America to regulate the industry. It’s widely known that Mexicans distrust banks, which is why an estimated 70% of the population of adults in Latin America are currently unbanked or underserved. One of the key provisions in the new law was related to transparency.
Grassi said the law hasn’t advanced much in the past five years. However, he and Lopez saw early signs of a move toward regulation around open banking, which both Brazil and Colombia were also doing. At the same time, the company was getting inbound requests by insurers, foreign banks and other fintechs asking Finerio to open up its technology.
“It became apparent to us that there was a need, so in 2020, we decided to pivot the company to business-to-business to be able to connect bank accounts, process data and analyze it to create a personal finance experience in a white label,” Grassi said.
That’s been the company’s focus ever since. It not only provides financial data aggregation and categorization, but also collaborates with regulators and financial institutions to implement and monetize that aggregation and the delivery of it in compliance with regulations.
Open banking initiatives
Today, Finerio works with over 120 financial institutions and fintechs. Last year, the company launched an API hub with Visa and OzoneAPI and began piloting it in several countries. The hub offers products and services, including digital payments, credit and personal finance management. It also provides a place for financial institutions to comply with new open banking regulations.
In the past 18 months, usage of the API grew 700%, Grassi said. Finerio is also poised to reach another 40 financial institutions in the next year. The company charges customers a minimum usage fee and then a variable fee on top which is dependent on how much data the customer is consuming. In the past year, Finerio had over $1 million in annual recurring revenue.
The new $6.5 million in equity financing was led by Third Prime with participation from strategic investors Visa, Bancolombia Ventures and Krealo, Credicorp’s venture capital arm. Alaya Capital, Gaingels, Plug and Play and Winklevoss Capital also joined in with a group of angel investors associated with Guiabolso, Dock and ClassPass. Previously, the company had raised around $3.2 million SAFE notes.
“We believe that government support of open banking initiatives across LatAm, together with the enormous population of underserved consumers, creates a tremendous opportunity to create value for investors and to meaningfully increase the financial well-being of historically disadvantaged consumers,” Mike Kim, general partner at Third Prime, said in a written statement.
Meanwhile, Grassi has already deployed some of the funds into making some key hires, including chief technology officer José Santacruz López, who held that previous role at Kushki. The company will also be expanding its API hub in two additional countries and grow usage overall.
“We’re talking about getting multiple banks onto the same standard by creating what we are calling ‘the HTML of open banking,’” Grassi said. “It’s quite a complex product, but we’re getting a lot of interest and running a couple of pilots. Our goal is to take time to convert those from pilots into customers.”
|
Latin America Economy
|
The judge overseeing the $250 million civil trial against Donald Trump and his company ordered the former president's daughter Ivanka Trump to testify in the case.
Judge Arthur Engoron said Friday she could not be called as a witness before Nov. 1, giving her time to appeal the ruling if she chooses.
Trump's attorneys had challenged New York Attorney General Letitia James' subpoena to Ivanka Trump, noting an appeals court had ruled earlier this year that she should be dropped as a defendant in the case over statute of limitations issues.
They contended the AG's office was trying "to continue to harass and burden President Trump’s daughter long after" the appeals court "mandated she be dismissed from the case."
They also argued that the AG waited too long to subpoena her, and argued the office doesn't have jurisdiction over her because she no longer lives in the state.
The AG's office countered that Ivanka Trump, a former White House official, still has information important to their case.
"While no longer a Defendant in this action, she indisputably has personal knowledge of facts relevant to the claims against the remaining individual and entity Defendants. But even beyond that, Ms. Trump remains financially and professionally intertwined with the Trump Organization and other Defendants and can be called as a person still under their control," the AG contended in a court filing.
The office said it wanted to ask her questions about Trump's former Washington, D.C. hotel, and noted she profited from the sale.
"Ms. Trump remains under the control of the Trump Organization, including through her ongoing and substantial business ties to the organization," the AG argued, adding that she "does not seem to be averse to her involvement in the family business when it comes to owning and collecting proceeds from the OPO (hotel) sale, the Trump Organization purchasing insurance for her and her companies, managing her household staff and credit card bills, renting her apartment or even paying her legal fees in this action. It is only when she is tasked with answering for that involvement that she disclaims any connection."
Ivanka Trump's siblings Donald Trump Jr. and Eric Trump and their father are all expected to testify in the case and have been listed as witnesses by both the AG and the defense.
The AG is suing Trump for allegedly inflating his assets in financial statements to secure more cost-effective loans and insurance policies. Trump has denied any wrongdoing in the case, which he has called a "witch hunt."
|
Banking & Finance
|
Subsets and Splits
List Unique Topics
Simple retrieval of unique topics from the dataset, useful for basic exploration but lacks deeper insights.