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Couples planning a new life in the UK have been left heartbroken by changes restricting who can apply to live here.
From April 2024, British citizens or people already settled in the UK will need to show they earn £38,700 before their overseas partner can live here with them - a sharp jump from the current threshold of £18,600.
They also still need to show they are in a marriage or civil partnership when they apply for a family visa, intend to be within six months, or that they have been living together for at least two years.
Ministers say the increased income threshold will help cut immigration levels, which have reached record highs in recent years, and ensure families can support themselves.
Lee, 24, from Belfast, told BBC News: "This policy means that the girl I want to marry, the girl I love...I cannot live with her and it's destroyed me."
He had planned to propose to his girlfriend Sarah, who lives in Malaysia, in the coming months. They met in Leeds three years ago, where he was studying engineering and she was studying law.
The couple were planning a new chapter together in the UK, but Lee said their plans for a family life are "basically destroyed by this".
Lee earns £26,000 as a researcher in Belfast, and said his chances of earning much more than that at his age and experience level are remote.
He continued: "I just hate this, all this planning we've had and it's just now all crashing down. Now basically if I want to be with someone I love, I can't be in this country anymore.
"My mind has kind of went everywhere, to some very dark places I'll be honest."
British citizen Josie lives with her Italian husband in Ancona, Italy. The couple - both scientists - married in December 2020 and were planning on moving to the UK to settle.
But Josie said the prospect of earning £38,700 as a lab assistant at a British university is highly unlikely, with going-rate salaries routinely below that level.
Asked what her family's plan was now, the 33-year-old said: "I don't know, not come back? That would break my mum's heart. I don't know, I really don't know.
"Basically it's forcing us into a position that will make it very, very difficult - if not impossible - to come to the UK."
Cam, 28, told the BBC how he is already looking for a new home in London where his American wife can come and join him after four years of long-distance relationship.
They were planning to apply for a family visa in March, by which time Cam would have been in his new job long enough to show he has a stable income - but with the new threshold due to come into force from April, they are facing uncertainty over whether their application will make it through in time.
He told BBC News: "There's a huge amount of anxiety. This is going to cause a lot of hurt and pain to a lot of people."
On Tuesday, Rishi Sunak's spokesman said the new minimum threshold could be disapplied in "exceptional circumstances where there would be unjustifiably harsh consequences for the applicant, their partner, a relevant child or another family member".
Personal savings and benefits can also be taken into consideration when applicants have to demonstrate how they would be able to support their family, No 10 said.
The government argues the new £38,700 threshold - which is also being introduced as a minimum salary for many migrants seeking work visas - brings it into line with average earnings.
According to the Office of National Statistics, median gross annual earnings for full-time employees in the UK were £34,963 in April 2023.
The change to family visas is expected by the government to reduce net migration by 10,000 a year. Family visas accounted for a net migration of 39,000 in the 12 months up to June 2023.
Overall net migration for the same period was 672,000, a number the government is trying to cut by 300,000 with its wider reforms to legal immigration.
Dr Madeleine Sumption, director of the University of Oxford-based Migration Observatory, said the change will disproportionately hit those who are already less likely to be on higher wages.
She said: "The largest impacts will fall on lower income British citizens, and particularly women and younger people who tend to earn lower wages.
"The income threshold will also affect people more if they live outside of London and the South East, in areas of the country where earnings are lower."
One of them is Katie, a 25-year-old supermarket worker from Lincoln, who was "crying all night" when the change was announced.
In 2020, she met Quinlan, from Indiana, US, on an online dating app. The pair got married in July 2023 and plans were under way for him to relocate to the UK.
As a supermarket worker, Katie earns £19,000 a year, including overtime pay - less than half of the new salary threshold.
She told the BBC: "Everything we were planning for ages has just gone down the drain. We finally are stable enough to start doing more hours to get the amount needed and then it practically jumps up by 50%."
The couple's next steps are not certain. She continued: "To stay here or go there. We shouldn't have to choose something like this. It's cruel."
Ruby and Furkan are in a similar position. When they met on holiday in Turkey in the summer of 2021, she thought it was "a holiday romance - I didn't expect anything more to come of it".
Fast forward two-and-a-half years and the pair are married, and regularly travel to and from their respective countries to be with each other.
The 31-year-old from Portsmouth was self-employed, but decided she would stand a better chance of demonstrating she had a steady income to support her husband's visa application by taking a job as a receptionist on £23,000.
But the changes announced this week have upended their plans completely, and they are still digesting what it means.
Ruby said: "I woke up this morning and saw the news posted on Facebook. I was devastated. I thought that surely there is no way they have hiked it up that amount."
Speaking through sobs, she told the BBC: "I can't believe I have revolved my life around this and then they change the rules after 11 years. Now I just have to hope we can be approved before April.
"If that doesn't happen, there is no option but for me to move to Turkey. That is not the end of the world as it is a beautiful country but I would like it to be my decision, not Rishi Sunak's."
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United Kingdom Business & Economics
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Tesco has reported a jump in annual sales but profits halved as it grappled with higher costs.
While sales rose 7% to £66bn, pre-tax profits dropped 51% to £1bn with Tesco saying it had faced "unprecedented" rises in prices charged by suppliers.
The UK's biggest supermarket also said customers had faced "an incredibly tough year", with prices soaring.
Tesco said it had tried to protect shoppers from the full effects of rising food prices.
The supermarket's chief executive, Ken Murphy, said he was expecting prices to continue rising through the first half of the year, but then "moderate". He added that he expected sales volumes - which have fallen - to "recover".
On Wednesday, Tesco said it had cut the price of its milk for the first time since May 2020, in a possible sign that price rises for a weekly shop could be starting to ease.
As well as increases in the prices it pays suppliers, Tesco has also seen the cost of running the business - from higher energy bills to wages - climb.
The sharp fall in pre-tax profits was mainly due to a big write-off in the value of its property portfolio. But Tesco's operating profit also fell, dropping by 6.9% to £2.6bn.
Analyst Sophie Lund-Yates at Hargreaves Lansdown said the dent to profits showed the effects of grocery inflation being one of the most "painful" areas of overall rising costs for consumers.
"That's where we've seen the rise of the discounters, which although much smaller, have forced the main players to up their game," she added.
Sue Davies, head of food policy at consumer body Which?, said the results showed Tesco was "doing very well" while the cost of living crisis is causing many of its customers to struggle.
"It's clear that Tesco and all the major supermarkets could be working harder to make food more affordable for customers who need help," she said.
In January, Tesco chairman John Allan said some food firms may have been using inflation as an excuse to hike prices further than necessary and that the retailer was trying to combat this. Last year, Tesco temporarily removed some Heinz products in a row over pricing.
However, food suppliers hit back at Mr Allan, with the Food and Drink Federation called his comments "difficult" and adding that suppliers had seen a "massive" rise in their costs.
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Consumer & Retail
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Voters are “desperate” for a full-time Labour MP and for an end to the Tory psychodrama, the contender vying to replace Boris Johnson has insisted.
Labour candidate Danny Beales told The Mirror the party has a "good shot" next month at snatching Uxbridge and South Ruislip from the Conservatives for the first time.
Mr Beales, 34, said the upcoming vote was a chance for a "fresh start" in the west London seat and "to send a powerful message that we need change in this country".
A by-election is being held after Mr Johnson announced his dramatic resignation last week ahead of the publication of an MPs' report into whether he recklessly misled Parliament over the Partygate scandal.
The move has led to days of internal Tory warfare, with Mr Johnson, Rishi Sunak, and ex-Cabinet minister Nadine Dorries trading bitter public blows over the award of gongs.
Mr Beales, who could now be an MP in a little over a month, said: "I think people are sick and fed up with it to be honest.
Read More
"When more and more people are having their mortgages revalued and getting extra bills through the door and just to hear Tories tear chunks out of each in Government - or supposedly in Government - who are responsible for these things, I think it's deeply frustrating.
"The feeling is can we have some adults in the room who are making decisions in the national interests. I find it deeply frustrating, I want this Tory melodrama just to be at an end."
Since the by-election was announced Labour has piled resources into the constituency and hundreds of activists have flocked to the area. Senior frontbencher Jonathan Ashworth and the party's national campaign coordinator Shabana Mahmood have also been canvassing support.
On Wednesday evening Labour will hold a gala dinner launching the campaign with Shadow Cabinet ministers David Lammy, Wes Streeting and Ellie Reeves all present.
Professor John Curtice, a polling expert, said this week the Tories will find the Uxbridge and South Ruislip seat "very difficult to defend".
With the party still trailing Labour in the national polls, he added: "This is simply a must win seat for Sir Keir Starmer".
The Britain Predicts website run by the New Statesman also puts Labour on course for victory with an 11-point lead of the Tories.
Asked about Labour's chances, Mr Beales said: "We're in with a really good chance - a really good shot.
"I don't think we're taking anything for granted. I'm not just going to walk into Parliament, I'm going to have to earn every single vote and that's the approach I've been taking since I was selected in December is going out week after week come rain and now shine.
"We know it has been a historically Conservative seat. We are going to have to win over people who haven't voted Labour before."
Pressed on whether the seat - one of the top 100 targets for Labour - is exactly the sort of area Mr Starmer needs to win for a majority at the next general election, Mr Beales said the party was "making really positive progress all around the country".
He added: "I know it's a must-win seat for me - that's all I know.
"I'm desperate to win here, I grew up here, I'm from the area. I just think this area is desperate for a Labour full-time MP. You go around the place and people feel like they are being forgotten, they feel the services, the hospitals, the schools are crumbling.
"It's an area Labour should win and we can win."
In an attempt to hold the seat the Tories' Chairman Greg Hands is already seeking to highlight the expansion of the controversial Ultra Low Emission Zone in the capital.
Labour Mayor Sadiq Khan has proposed expanding the scheme - to clean up London's air quality - across all London boroughs later this summer.
Mr Beales said it was "certainly an issue that comes up on the doorstep" but pointed out that parts of the constituency has some of the worst air quality in the capital.
He added: "But there are people - particularly in a cost-of-living crisis - who if they are affected... feel that £12.50 a day is another bill that is not very welcome.
"From my perspective it's not the MP locally who will or won't decide on ULEZ, it's the decision of the Mayor. I think what my job will be as a candidate and local MP is to listen to people locally, listen to their concerns, and champion their interests."
But Mr Beales, who was born in the local Hillingdon hospital, stressed the cost-of-living crisis was the number one issue facing voters in Uxbridge and South Ruislip.
"People are paying hundreds of pounds more for exactly the same house they live in. I get it too. I do the weekly shop and it's twice as much as it was last year. It feels like week after week the prices are going up and up. I think for families that's the pressure they've got."
Mr Beales, who has previously spoken about his experience of being made homeless as a child, also said if he makes it to Parliament, said he would want to raise the housing crisis.
"The last Labour Government got people off the streets - we pretty much ended rough sleeping. We were making really positive progress in getting everyone out of B&B accommodation."
"We've gone completely backwards and it's even worse than it was before," he added.
He said the "dream" of owning your own property in Britain now appears to be a "distant memory" and said Labour would make bold progress on building affordable homes.
Mr Beales, who has served as a Camden councillor and charity worker, described the days since it became clear he would be fighting a by-election as a "whirlwind".
The Labour leader Mr Starmer also messaged him, saying: "Good luck, the party's with you".
He said his mother, who was first made homeless after losing her job when he was 14-years-old, is "overjoyed" and "shed a few tears here and there".
"She walked into the paper shop in the morning to get the milk and saw me on one of the papers and suddenly burst into tears.
"I think she's excited, eager, happy to help drive me around."
The advice offered to him from a member of the party who has previously fought in a by-election was "strap yourself in, don't worry and remember to eat".
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United Kingdom Business & Economics
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Bus networks are shrinking across Britain, but the cuts have gone much deeper in some areas than others, BBC analysis has found. In Stoke-on-Trent, services have been slashed in half in just eight years. William McLennan met some of the people who are left behind when the buses stop running.
On a cold February evening, Michael Middleton pulls a thick black beanie over his ears as he walks home beside a thundering dual carriageway after a late shift packing orders in a warehouse.
The number 6 bus used to deliver him home - warm and dry - within about half an hour of clocking off at 22:00, but since 2019 the service into Stoke-on-Trent no longer runs after 21:15.
So instead, he and a colleague follow a litter-strewn path beside the A50, shouting their conversation to each other to be heard over the roar of lorries.
"We just try to block it out," the 61-year-old says. "We try to talk about anything to not think about it."
Across the city, bus services shrank by an estimated 37% in the five years to March 2022. Over an eight-year period from 2013/14, that reduction stands at 50%. In large part, the reductions have not come from the closure of entire routes. Rather, repeated timetable changes - often, passengers are told, in the name of improving "reliability" - have quietly cut services, reducing how regularly a bus arrives, or how late into the evening it runs.
It is an extreme example of a nationwide decline. Across Britain, the local bus network has shrunk by an estimated 14% between 2016-17 and 2021-22, BBC analysis of Department for Transport figures suggests. The total distance covered by buses each year fell by 210 million miles (338 million kilometres).
For the past three years, the industry has been propped up by government grants totalling more than £2bn.
"Mainly round here now, it's all minimum wage," says Michael. He worked as a miner in the 1980s - then, after the pits closed, he was a supermarket floor manager, before spending 10 years caring full-time for his wife, who had a rare neurological condition. After she died four years ago, he took the job at the warehouse. "The money they pay you, you can't afford to run a car," he says.
Known as the Potteries, the city is made of six towns strung together by a network of busy A-roads and a shared industrial heritage.
Tens of thousands of people once worked in ceramics factories, but the city has been remoulded by the 20th Century collapse of British manufacturing. In its place, logistics and distribution companies have moved into warehouses across Stoke-on-Trent - now providing about one in 10 jobs.
Yet for low-paid employees, travelling to work has become a logistical nightmare in itself.
Early one February morning, in the far north of the city, Beverley Barnett stands on the pavement next to a chicken shop, the grey ground slick with drizzle.
Her face is lit by the screen of her smartphone, which she swipes compulsively to check whether her bus - the 3A - will arrive on time this morning.
The 38-year-old has allowed nearly an hour-and-a-half to make a journey that would take less than 20 minutes by car. Even so, she is often late into work at the secondary school where she supports children with special needs. Her managers are understanding, but she still worries about the impact on her job security.
"They're as accommodating as they can be, but the kids will be waiting to start," she says. "I do feel like I'm letting them down."
When she moved back to the city 11 years ago, she chose to live close to family, rather than within walking distance of work. At that time, it was a single bus journey lasting about 40 minutes, but the direct service was cut years ago.
She now faces the daily stress of a touch-and-go transfer at the city centre bus station. To make matters worse, she says, the frequency of early morning services was slashed during the pandemic and not restored. Even a short delay now means she will miss her connection and face a long wait for the next bus.
"I'll be checking [the app] all the time, thinking 'are we going to be on time'," she says. "The bus might be only five minutes late, but it adds almost an hour to my journey."
Later that day, Will Lovatt arrives at the bus station on his way home from college. The 18-year-old says unreliable buses regularly cause him to miss the start of lectures, and he fears it is having a "huge impact" on his education.
It is a sunny February afternoon, but he will soon be heading back to his family home in Werrington, on the eastern edge of the city. He would like to spend more time with friends, but the last bus to his village leaves at 19:30.
"It's very restrictive," he said. "By the time you get into something you have to say 'sorry guys I have to go'."
The Campaign for Better Transport has been receiving stories like this on an almost daily basis.
"Even if a bus route is not completely withdrawn, just making it so infrequent that it is impractical has the same impact," says Silviya Barrett, the group's director of policy and research.
Improving bus services - and persuading more people to switch from cars - is a key component of attempts to reach net zero carbon emissions, and must be a priority for the government, she says.
And yet, the costs of bus travel have risen much faster than those for driving. While car owners have enjoyed a 5% cut in fuel duty - which had already been frozen since 2011 - bus passengers have seen fares rise by more than 80% over the past 10 years, according to analysis by the RAC Foundation.
"People are not going to look at the options if it's cheaper for them to drive," Ms Barrett says.
The buses in Stoke-on-Trent, like the majority of services in England, are run by private companies. First Bus - the biggest operator in the city - says cuts to services are a direct result of dwindling demand. Passenger numbers on its services in the city have only returned to about 80% of pre-pandemic levels.
"There has been a gradual decline in demand, both in the Potteries but also across the UK," says Rob Hughes, the company's director of operations.
Even before Covid, the industry had been hit by the decline of the High Street, rise of online shopping and comparative fall in motoring costs.
"The pandemic has accelerated that decline in demand," Mr Hughes says, while rising fuel costs and a nationwide driver shortage have heaped on more costs.
It is a "pivotal time for the industry", he says.
When private operators decide to alter or end a loss-making service, they must first inform the local authority - which has the option of stepping in with funding to keep the buses running. But in Stoke-on-Trent, the council has opted not to do that in recent years. It declined to comment when asked about this.
Across England, about 13% of services are supported by councils, although transport experts say this number has been falling steadily as local authority budgets shrunk.
"Irrespective of the model used to fund bus services, provision needs to match demand," says Mr Hughes. "We obviously can't run buses without passengers."
On Friday, the government announced a three-month extension of the Bus Recovery Grant, which had been due to end in March. It has also extended a £2 cap on single fares, intended to encourage people on to buses.
The Local Government Association had warned thousands more bus routes could be lost without further support. It welcomed the three-month extension, but said the government needed a "long-term, reformed bus funding model with significant new money".
Before the extension was announced, Mr Hughes told the BBC that First Bus had already begun telling local authorities which services could be cut without further support.
The government says it is committed to improving services across the country. It asked all local authorities to work with bus operators to develop "bus service improvement plans", and has awarded £1bn in funding.
Stoke-on-Trent City Council will receive £31m for its plans, which, among other things, aims to reduce fares, increase the frequency of services and provide more buses in the evening.
For Michael, change could not come soon enough. "The hours that we work, the bus services just don't suit," he says. "It doesn't serve us at all."
In his mining days, he never had to worry about getting to work. "The collieries put on their own work buses, so that wasn't a problem," he says. "[They] really looked after you. It was a different world."
He worries what impact the lack of public transport will have on the next generation.
"If they went into the city centre to go to the pictures or something, there's no way back," he says. "They are being cut off from society."
Data analysis by Will Dahlgreen, Becky Dale, Rob England, Jonathan Fagg and Vanessa Fillis
Photography by Emma Lynch
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United Kingdom Business & Economics
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The Conservatives have accused Labour of planning “dangerous accounting tricks” that could allow the party to borrow billions more pounds within their fiscal rules.
Jeremy Hunt, the Chancellor, claimed that Rachel Reeves, his opposition counterpart, was preparing to “fiddle the books” in a move “out of the Gordon Brown playbook”, harking back to claims that the former prime minister hid private finance initiative schemes “off balance sheet” in order to maximise borrowing.
The intervention came as the independent Institute of Fiscal Studies (IFS) also sounded a warning over Labour’s plans to introduce a fiscal rule that would take account of “public sector assets as well as public sector debt.”
The commonly used measure of the public sector balance sheet is simply the level of public borrowing and debt interest. However, the IFS said Labour appeared to be weighing up introducing a “public sector net worth” (PSNW) rule, under which government assets – including nationalised industries – can effectively offset the costs of debt.
A note published by the IFS yesterday stated: “If the government were to acquire [for instance] an energy company for what it is worth, then the addition to debt would be offset by an increase in public sector assets, leaving PSNW unchanged. The company could always be re-privatised in future, which would reduce public sector assets and liabilities.”
‘Squandered’ North Sea revenues
The direction Labour is planning to take was signalled in a paper published by Ms Reeves in May, which claimed the Conservatives “squandered” North Sea tax revenues.
It added: “Our fiscal rules will prevent such a squandering from happening again by taking into account public sector assets as well as public sector debt.”
Labour insisted that its greater focus on public assets would be entirely separate to the fiscal rule under which it would get debt falling as a percentage of GDP. Instead, the approach would be used to “understand the impact of fiscal policy decisions”.
Mr Hunt said: “This is straight out of the Gordon Brown playbook. Labour simply aren’t being honest about their short-term economic plans, and are clearly planning to fiddle the books to hide billions of debt using dangerous accounting tricks.”
Ben Zaranko, an economist at the IFS, said: “PSNW is a valuable addition to the usual suite of fiscal metrics. It’s an interesting and useful indicator. But we should not focus on PSNW as a fiscal target.
“Performance against a PSNW target would tell us little or nothing about the government’s ability to access capital markets or service its debt. That makes it a bad fiscal rule.”
A paper published by the IFS raised the question, “should an increase in the estimated value of an asset the government cannot sell really be taken as a signal that the government can afford to borrow more?”
A Labour spokesman said: “We can categorically rule out incorporating additional public assets into the debt rule. We would measure the public sector balance sheet to understand the impact of fiscal policy decisions. This would be separate to our other fiscal rules.
“The Conservatives tore up their fiscal rules for the tenth time this year, with government debt now the highest it has been for more than 60 years. Labour will never spend what we cannot afford. We will introduce a new set of fiscal rules. These rules will apply to every decision taken by a Labour government and are non-negotiable.”
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Interest Rates
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By Francesco Canepa
FRANKFURT (Reuters) - The European Central Bank is on the back foot again and this time the bad news doesn't come from Greece, Italy or any of the usual suspects in the bloc's poorer south.
The club's biggest member and supposed powerhouse, Germany, has been hit by a toxic mix of weak trading with key partner China, a slump in its large manufacturing and construction sectors and even some existential questions about a business model predicated on cheap fuel from Russia.
Trouble in Germany is hobbling growth in the euro zone as a whole and threatening to push it into a recession, rather than the "soft landing" of moderate growth and inflation that the ECB had pencilled in and the United States is still hopeful of achieving.
This is forcing a change of tune at the ECB -- from ruling out a pause in its steepest and longest streak of interest rate hikes to openly talking about one as soon as next month.
And the market thinks the central bank may even have to undo some of those increases sooner rather than later, just like it did at the time of its last tightening cycle in 2011 when debt crises in Greece, Portugal, Ireland, Spain and Cyprus were accompanied by a broader recession..
"There are some similarities between the 2011 circumstances and now," Richard Portes, a professor of economics at the London Business School, said. "There was a major supply shock and inflation was clearly going to be very short lived."
SICK MAN OF EUROPE - AGAIN
Unlike then, Germany rather than the south of Europe is at the epicentre of the problem, bringing many commentators to dust off the "sick man of Europe" moniker last used to refer to that country in the early years of the new century.
It's not without irony that the expression should have been coined by Emperor Nicholas I of Russia to describe the Ottoman Empire in the 19th century.
Some of Germany's present misfortunes also originate in Russia, on which Berlin had relied for a third of its energy supply until the invasion of Ukraine jeopardised those cheap imports.
Others run deeper and are home brewed, relating to its over-reliance on exports, lack of investment and shortage of labour.
"If the government does not take decisive action, Germany is likely to remain at the bottom of the growth table in the euro area," said Ralph Solveen, an economist at Commerzbank.
CAREFUL WHAT YOU WISH FOR
But at least some of Germany's troubles can be traced back to tighter monetary policy.
The central bank has consciously dampened economic activity via higher rates in an attempt to bring inflation, which at one point last year was in double digits, to its 2% target.
Higher borrowing costs hurt manufacturers particularly hard because they depend on investment and no euro zone country has a larger industrial sector than Germany.
"To loosen monetary policy because Germany is in a difficult position would be unwise but to tighten it would add macro pressure to the micro-level pressures that beset the economy," Portes added.
This puts the ECB in a situation where it must contemplate wrapping up its tightening cycle before witnessing the sustained drop in core inflation it said it wanted to see.
Making such an explicit link between underlying inflation and the need for continued rate hikes may prove awkward for the ECB, which is now trying to shift the emphasis from raising borrowing costs to simply keeping them high.
"They've made a mistake in accentuating underlying inflation too much," said Carsten Brzeski, global head of macro for ING Research, said. "The risk is that they have already gone too far."
For Ricardo Reis, a professor at the London School of Economics, the ECB needed to start looking at the expected path of inflation "12 or 18 months from now" -- as it traditionally did -- rather than current readings.
HIGHER FOR LONGER
The first sign of a change in the narrative started at the ECB's last meeting two weeks ago and caught markets by surprise.
After declaring in June the ECB was "not even thinking about pausing" its rate hikes, Lagarde changed tack in her latest press conference, going as far as saying she didn't think the central bank had more ground to cover "at this point in time".
Days later -- and after data showed inflation excluding energy, food, alcohol and tobacco was stuck at 5.5% -- the ECB chose to emphasise that most other measures of underlying prices had shown signs of easing.
And ECB board member Fabio Panetta then made the case for "persistence" in keeping rates high rather than raising them further.
All this set the stage for a possible pause in rate hikes in September, likely coupled with an option to come back for more if needed and a pledge to keep borrowing costs elevated for a while.
But markets even doubt the high-for-longer scenario, with substantial rate cuts priced in for the second half of next year.
"We continue to expect the ECB to pivot significantly over the next few months, with no further hikes this year and March kicking off a series of rate cuts," economists ABN-AMRO said in a note to clients.
(Reporting By Francesco Canepa; editing by Mark John and Christina Fincher)
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Interest Rates
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Private Equity/Venture Capital Investments Decline To $3.4 Billion In October: Report
The number of deals or volumes was also lower at 70 transactions in October as against 80 in the year-ago period and 83 in a month earlier, the report said.
Investments by Private Equity and Venture Capital (PE/VC)funds have declined to $ 3.4 billion for October, a report said on Tuesday.
By value, the bets were 3 per cent lower than $ 3.5 billion in the year-ago period, and 19 per cent lower than $ 4.2 billion in September, the report by industry lobby grouping IVCA and EY, a consultancy, said.
The number of deals or volumes was also lower at 70 transactions in October as against 80 in the year-ago period and 83 in a month earlier, the report said.
"Although the Indian consumption story continues to remain strong, the increase in uncertainty on account of global factors and impending state and central elections in India seem to be slowing down progress in deal pipeline activity," the consultancy firm's partner Vivek Soni said.
Stating that he has a 'cautiously optimistic' outlook, Soni said PE/VC investments are still lacking momentum, especially in the startup space.
October witnessed nine large deals totalling $ 2.4 billion, a 9 per cent increase from the year-ago period, the report said, adding that Abu Dhabi Investment Authority's (ADIA's) $ 598 million bet on Reliance Retail Venture was the largest.
Startup investments came in at $ 1.3 billion in October, more than double that of the year-ago period when the industry was passing through a funding winter.
From a sectoral perspective, retail and consumer products led with $ 623 million of PE/VC investments across five deals, driven by the ADIA bet on Reliance Retail Venture.
Real estate sector was second, attracting $ 601 million across six deals. October recorded 17 exits worth $ 1.3 billion, compared to $ 1.6 billion across 15 deals a year earlier, the report said.
The month witnessed a total fundraise of $ 2.4 billion, compared to $ 2.2 billion in October 2022 and $ 1.1 billion in September 2023, the report added.
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Banking & Finance
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Almost 90 retail leaders, including the bosses of Tesco, Sainsbury’s, Boots and WH Smith, have written to the government demanding action on rising retail crime, in which violent criminals are “emptying stores”.
The retailers, who also include the bosses of Aldi, Primark and Superdrug, call for the creation of a new UK-wide aggravated offence of assaulting or abusing a retail worker – as already exists in Scotland – which would carry tougher sentences and require police to record all incidents of retail crime and allow the allocation of more resources.
“The police consistently tell us that a lack of data about these offences means they have no visibility about the nature or scale of the issue,” the letter says.
The 88 retail bosses have asked for a meeting with the home secretary, Suella Braverman, to discuss the issue after a meeting with the minister for crime, Chris Philp, led to the promise to develop an action plan.
The call comes after retailers, including the Co-op and John Lewis, highlighted what they said was a worsening issue. A survey of members of the British Retail Consortium (BRC), which represents all the major chains, found levels of shoplifting in 10 of the biggest cities had risen by an average of 27% this year.
Meanwhile, the police’s own data for one major retailer shows that forces failed to respond to 73% of serious retail crimes that were reported, while 44% of retailers in the BRC’s annual crime survey rated the police response as “poor” or “very poor”.
Helen Dickinson, the chief executive of the BRC, which helped organise the letter to Braverman, said: “It is vital that action is taken before the scourge of retail crime gets any worse. We are seeing organised gangs threatening staff with weapons and emptying stores. We are seeing violence against colleagues who are doing their job and asking for age verification. We are seeing a torrent of abuse aimed at hardworking shop staff. It’s simply unacceptable – no one should have to go to work fearing for their safety. We need government to stand with the millions of retail workers who kept us safe and fed during the pandemic – and support them, as those workers supported us.”
The letter comes after the boss of the Co-op grocery chain said he was frustrated by a lack of action against thieves who cost the business £33m in the first half of 2023.
Matt Hood, the chain’s managing director, said shoplifting was becoming a major issue for UK communities and cited a rise in what he called “shop looting”, where large amounts are stolen by organised gangs.
He argued that the idea that shoplifting was only done by those in real need meant it was seen as a “victimless” crime that was not being properly tackled.
The Co-op has seen crime, shoplifting and antisocial behaviour jump 35% year on year, with more than 175,000 incidents recorded in the first six months of this year – or almost 1,000 incidents every day.
While historically thieves have targeted certain products, such as cigarettes, he said they were now stealing all kinds of items from confectionery to meat and health and beauty products.
Some experts argue that technology such as self-checkouts and the display of expensive goods on shelves, rather than behind counters served by staff, have contributed to the problems.
The fashion and homewares retailer Next’s boss, Simon Wolfson, also said he had seen a rise in shoplifting which had hit profit margins by 0.2%. That came after John Lewis said it had suffered a £12m year-on-year increase in theft with its chair, Sharon White, calling shoplifting an “epidemic”.
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Consumer & Retail
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WASHINGTON -- The IRS announced on Friday it is launching an effort to aggressively pursue 1,600 millionaires and 75 large business partnerships that owe hundreds of millions of dollars in past due taxes.
IRS Commissioner Daniel Werfel said that with a boost in federal funding and the help of artificial intelligence tools, the agency has new means of targeting wealthy people who have “cut corners" on their taxes.
“If you pay your taxes on time it should be particularly frustrating when you see that wealthy filers are not,” Werfel told reporters in a call previewing the announcement. He said 1,600 millionaires who owe at least $250,000 each in back taxes and 75 large business partnerships that have assets of roughly $10 billion on average are targeted for the new “compliance efforts."
Werfel said a massive hiring effort and AI research tools developed by IRS employees and contractors are playing a big role in identifying wealthy tax dodgers. The agency is making an effort to showcase positive results from its burst of new funding under President Joe Biden's Democratic administration as Republicans in Congress look to claw back some of that money.
“New tools are helping us see patterns and trends that we could not see before, and as a result, we have higher confidence on where to look and find where large partnerships are shielding income," he said.
In July, IRS leadership said it collected $38 million in delinquent taxes from more than 175 high-income taxpayers in the span of a few months. Now, the agency will scale up that effort, Werfel said.
“The IRS will have dozens of revenue officers focused on these high-end collection cases in fiscal year 2024,” he said.
A team of academic economists and IRS researchers in 2021 found that the top 1% of U.S. income earners fail to report more than 20% of their earnings to the IRS.
The newly announced tax collection effort will begin as soon as October. “We have more hiring to do,” Werfel said. “It’s going to be a very busy fall for us.”
Senate Finance Committee Chair Ron Wyden, D-Ore., said the IRS' new plan is a “big deal" that “represents a fresh approach to taking on sophisticated tax cheats.”
“This action goes to the heart of Democrats’ effort to ensure the wealthiest are paying their fair share,” he said in a statement.
David Williams, at the right-leaning, nonprofit Taxpayers Protection Alliance, said “every business and every person should pay their taxes — full stop." However, “I just hope this isn’t used as a justification to hire thousands of new agents," that would audit Americans en masse, he said.
The federal tax collector gained the enhanced ability to identify tax delinquents with resources provided by the Inflation Reduction Act, which Biden signed into law in August of 2022. The agency was in line for an $80 billion infusion under the law, but that money is vulnerable to potential cutbacks by Congress.
House Republicans built a $1.4 billion reduction to the IRS into the debt ceiling and budget cuts package passed by Congress this summer. The White House said the debt deal also has a separate agreement to take $20 billion from the IRS over the next two years and divert that money to other non-defense programs.
With the threat of a government shutdown looming in a dispute over spending levels, there is the potential for additional cuts to the agency.
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Banking & Finance
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"As inflation rose to near 40-year high levels, many consumers have used credit to help manage their budgets, leading to record- or near-record high balances," Michele Raneri, vice president of U.S. research and consulting at TransUnion, said in TransUnion's "Q1 2023 Credit Industry Insights Report."
On average, Americans carry around $5,733 in credit card debt, according to TransUnion's latest report. But when you break it down by age, most carry more than that.
Those between the ages of 40 and 49 hold an average of about $7,600 in credit card debt — the highest of any age bracket, per TransUnion data provided to CNBC Make It.
"Gen Xers can be especially squeezed by credit card debt because they're living expensive years right now," Ted Rossman, senior industry analyst at Bankrate.com, told CNBC in January. "They might be sandwiched between caring for elderly parents and raising their own kids — maybe even putting them through college."
On the other hand, the youngest credit card users between the ages of 18 and 29 have around $2,900 of debt, per TransUnion's data. This is understandable since most people in that age group are just beginning to use credit cards.
Here's the average amount of credit card debt Americans hold at every age, according to TransUnion.
"More people are carrying more debt, and those balances cost more than ever," Rossman tells CNBC Make It.
Not paying off your credit card bill in full each month has become more costly. Interest rates are currently hovering a little above 20%, according to Bankrate's May 31 analysis. This time last year, credit card interest rates were around 16% on average.
That's due to the Federal Reserve's numerous interest rate hikes since March 2022. Since raising rates makes borrowing money more expensive for consumers, the Fed continued to increase them in an effort to slow inflation.
Although credit card debt is often caused by practical things such as emergencies or day-to-day living costs, it can be hard to stop racking up more debt once the cycle starts, Rossman says.
If your credit card debt is beginning to feel unmanageable, here are two payoff strategies to try.
0% balance transfer credit card
Signing up for 0% balance transfer card is Rossman's top tip for tackling credit card debt.
If your card has a high annual percentage rate (APR), these types of cards will allow you to move that debt over to a new card with a 0% APR introductory period that can last as long as 21 months. This will allow you to chip away at your debt without incurring interest charges every month.
Rossman recommends dividing the total amount you owe by the number of months in the interest-free period to come up with a level payment plan you'll be able to stick to.
It's important to note that not everyone will qualify for a balance transfer, and sometimes you may not be approved to transfer your total credit card balance. Typically, you need a good to excellent credit score in order to be approved and the likelihood of gaining that approval tends to decrease if your score is below 670, according to Experian.
Be sure to keep an eye on any payment deadlines in order to avoid late charges. Additionally, review the balance transfer fee, which can range between 3% to 5% of the amount you've moved onto the new card.
Consolidate your credit card debt
If you have multiple balances on different credit cards, a personal loan can be a useful form of consolidation, Rossman says.
This strategy involves applying for a personal loan large enough to cover your total debt. If you're approved, you can pay off your credit cards right away, and then repay the loan at a more favorable rate. The average interest rate for personal loans is a little over 11% as of May 31, per Bankrate.
If you have a strong credit score, you may be able to get a personal loan with an interest rate as low as around 7% and pay it back over five to seven years, Rossman says.
It's important to note that your credit score may be impacted if you miss a payment and once you've used up all of the funds from your personal loan, you'll need to apply for another one to receive more money.
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Inflation
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An increasing number of businesses including pubs, shops and supermarkets across the UK are being forced to close down due to the cost of living crisis.
According to figures released by accountancy group UHY Hacker Young earlier this week, the number of pub and bar companies calling last orders rose from 280 in 2021 to 512 last year.
The report said pubs and bars have faced rising energy and other costs and concerns over falling sales.
The cost-of-living crisis and interest rate rises have affected spending on drinks and meals in pubs, while rail strikes have stopped punters from travelling into city centres.
Earlier this month, card and stationery retailer Paperchase collapsed into administration, putting 820 jobs and 106 stores at risk.
Wetherspoon and Marks & Spencer also announced closures as the cost of living crisis deepens.
Paperchase
The stationary retailer told shoppers the news in an email earlier this week and said until the closure of the site, it was to offer at least 30% off "almost everything".
Paperchase told shoppers that it was with a "heavy heart" that it was closing its online store, and thanked those who gave the brand "support and loyalty" over the years.
The company fell into administration last month and is now in the process of closing its 106 remaining stores which will affect 820 of its staff.
The retailer's physical stores are to remain open for now and at the moment are offering discounts of up to 50% on certain items.
It also told customers that it is to continue to receive new stock for the foreseeable, however, it warned shoppers that "when it's gone it's gone".
New Look
Some 500 jobs are at risk of being cut at New Look at its lead distribution centre in Lymedale, Newcastle Under Lyme, according to Drapers.
The jobs cuts come as the high street retailer has scrapped its night shifts at the site.
This is due to New Look having reduced the number of its stores in the UK from around 800 several years ago, to around 440 now alongside a reduction in sales.
This site employs around 1,200 staff and those affected will now enter into consultations about potential redundancies which are to be announced in mid-May.
However, the high street giant has said that the closures are part of its "normal course of business" as new sites will be opening also.
It added that it is working to find "suitable alternative roles" for the staff that will be affected by their stores closing.
Cost of Living
They'll be bringing you the latest money news stories and also providing specialist advice.
Whether it's rocketing energy bills, the cost of the weekly shop or increased taxes, our team will be with you all the way.
Every Thursday at 1pm they will take part in a Facebook Live event to answer your questions and offer their advice. Visit facebook.com/dailymirror/live to watch. You can read more about our team of experts here.
If you have a question - or want to share your story - please get in touch by emailing webnews@mirror.co.uk.
Wilko
There will be around 400 job losses at Wilko and will include assistant store managers, retail supervisors, head office managers and call centre workers, the GMB Union has announced.
The household and garden retailer, which employs 16,000 people in total, has told staff it plans to reduce hours for team supervisors in 150 of its 401 stores.
This will be comparable to around 150 full-time equivalent job losses.
The cuts also include around 150 assistant store managers and about 95 workers from its contact centre in Worksop, Nottinghamshire.
TK Maxx and Homesense
TK Maxx and Homesense are also closing stores, with the Edinburgh site shutting on Wednesday this week due to the landlord pulling the lease.
Meanwhile, the Homesense site in Manchester Arndale Centre will close on Wednesday, March 1.
Swansea will also lose its Homesense store, currently located at Parc Fforestfach, which be relocated by the end of March.
A spokesperson for TK Maxx said: "Our senior managers have been in store supporting the team.
"We're currently in consultation with all affected associates and our intention is that all associates will be offered roles in other local TK Maxx or Homesense stores."
House of Fraser
House of Fraser was saved from collapse by Sports Direct owner Mike Ashley back in 2018, but now it is set to close more stores across the UK - despite only having 30 sites.
The high street department store is expected to close its Cardiff site after it recently launched a major clearance sale.
And the Birmingham site is also expected to be at risk of closure after it was converted into an outlet store.
No official announcement has yet been made by House of Fraser regarding the closures.
B&Q
The popular DIY chain has announced that it is to close eight of its sites in Asda stores within the next few weeks.
The home improvement store added that the decision was made after an "intensive review" of the test format.
Marks & Spencer
Marks and Spencer is proposing the closure of a number of stores across the UK months after its announcement of 67 larger shop closures.
The latest plans include consultations on a number of stores closing and others relocating as the company looks to focus more attention on its grocery offerings.
The 67 closures announced last October came as the supermarket focuses more of its attention on M&S Simply Food.
Plans also include opening 104 more Simply Food shops - taking the total number of its food-only sites from 316 to 420.
The company is planning for changes to be complete in five years, although this could be reduced to three, as it aims to save around £309million in rent costs.
Wetherspoon
Wetherspoons is closing multiple pubs this month after announcing that 19 pubs have been sold off and 35 additional hostelries have been put on the market.
The pub chain's sales fell by 1.1%, it reported on November 6, 2022, in comparison to trading before the pandemic in 2019.
The British Beer and Pub Association estimated 4,500 pubs in the UK were on the verge of reducing trading hours over winter.
Following the pandemic period, which included lockdowns, many pub and bar companies have very little savings or the capacity to borrow more and the current economic downturn has been the final push into insolvency for some, the accountancy group said.
Peter Kubik of UHY Hacker Young said: "It's deeply concerning that so many pubs and bars are closing their doors. In addition to the financial consequences for owners and employees, the loss of a pub can be felt quite keenly by the community.
"This is a particularly difficult period for pub and bar owners, who find they need to spend more and more while earning less and less. Following an extended period of lost revenues during the pandemic, the cost-of-living crisis has been the final nail in the coffin for many.
"Perhaps the Government should consider what it can do to alleviate pressures, for instance, by extending the energy bill relief scheme for the hospitality sector."
Subway
Subway is looking at possibly selling off its business, in a move that could potentially affect thousands of its restaurants.
The popular sandwich chain announced on Tuesday that its shareholders were exploring a sale of Subway but did not share much more.
The company did not indicate how long the sales process could take or whether there were any interested parties at the moment, it also said it couldn't confirm if a sale would actually take place.
In the statement, the sandwich chain said: "The management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience."
Barclays
Barclays has announced the closure of 15 branches across the country - meaning over 100 banks are going to shut down so far this year.
The bank is set to close 14 branches across England and one in Wales from late April to the first few days on May.
Sites in London, Gosport, Bridgwater and St Helens are among those shutting down over just a few days.
Barclays has already announced 15 closures at the beginning of January.
NatWest
The closures, which are scheduled to take place from April to June, are down to more people banking online.
A NatWest spokesperson said: "As with many industries, most of our customers are shifting to mobile and online banking, because it’s faster and easier for people to manage their financial lives.
"We understand and recognise that digital solutions aren’t right for everyone or every situation, and that when we close branches we have to make sure that no one is left behind.
"We take our responsibility seriously to support the people who face challenges in moving online, so we are investing to provide them with support and alternatives that work for them."
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Consumer & Retail
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An Arrest, a Ruling, a Rally: Crypto’s Wild Day in the Courts
Cryptocurrencies rallied as digital-asset advocates touted a ruling from a federal judge in the US Securities and Exchange Commission’s lawsuit against Ripple Labs Inc. as a victory for the industry when it comes down to what is classified as a security.
(Bloomberg) -- It was a day that started with something of a bang: the charismatic Alex Mashinsky, former chief executive officer of bankrupt crypto lender Celsius Network under arrest and charged with fraud.
In a flurry of enforcement activity, the US Department of Justice, Securities and Exchange Commission, Commodity Futures Trading Commission, and the Federal Trade Commission all filed lawsuits against both Mashinsky and Celsius itself.
Allegations against Mashinsky ranged from pumping up the price of CEL, the lender’s native token, to wire fraud. Mashinsky has pleaded not guilty and will be released on bail after agreeing to a $40 million personal recognizance bond.
Read: Celsius and Mashinsky: The Most Striking Indictment Details
Then, shortly before noon, a judge issued a long-awaited ruling in the case of the SEC v Ripple Labs Inc. that sent crypto Twitter into a frenzy and token prices soaring. US District Judge Analisa Torres held that XRP, the token associated with Ripple Labs and central to the case, is a security when offered to institutional investors but not the general public.
“Institutional buyers would have understood that Ripple was pitching a speculative value proposition for XRP with potential profits to be derived from Ripple’s entrepreneurial and managerial efforts,” the judge wrote.
Read: Ripple Tokens Sold to Public Are Not Securities, Judge Says
But Torres ruled that finding didn’t apply to programmatic investors, meaning the broader public. She said there was no evidence that such investors could parse the many statements made by Ripple about XRP, and found that many statements cited by the SEC may not have been shared with the broader public.
Whether cryptocurrencies are securities has been a major question hanging over the industry, which has long fought efforts to regulate it by arguing that the tokens do not meet the necessary criteria.
XRP almost doubled, soaring to as much as 94 cents. Other tokens that were recently described as unregistered securities by the SEC such as Solana and Cardano also increased, rising around 19% and 16%, respectively. Bitcoin, the oldest of the coins, edged higher to $31,189.50.
“Judge Torres’ decision in Ripple is a huge win for the cryptocurrency and digital asset industry,” said Arthur G. Jakoby, co-chair for Securities Litigation and Enforcement at the law firm Herrick Feinstein LLP. “If upheld on appeal, this decision significantly narrows the SEC’s jurisdiction over the crypto market.”
Shares of crypto-dependent companies also rallied. Coinbase Global Inc. rose the most since its public debut, climbing as high as $109.21. The exchange is embroiled in a lawsuit of its own with the SEC that alleges that it sold tokens that are unregistered securities.
“This underscores that direct sales of digital assets by an issuer will often be securities, but other sales, most notably sales on the secondary market, are unlikely to be deemed securities, which is a key argument in Coinbase’s defense against the SEC,” said Elliott Stein, Bloomberg Intelligence senior analyst for litigation.
MicroStrategy jumped more than 10% and crypto miner Marathon Digital closed more than 14% higher on the day.
“My overall impression is this is a positive decision for the digital asset industry,” said Daniel Tramel Stabile, partner at Winston & Strawn. “The court expressly concluded that XRP is not, in and of itself, a security. Instead, the focus must be on the circumstances of the offering itself.”
The SEC sued San Francisco-based Ripple and top executives in December 2020. At the time, the regulator accused the company, co-founder Christian Larsen and Chief Executive Officer Brad Garlinghouse of misleading investors in XRP by selling more than $1 billion worth of the tokens without registering them, depriving investors of information about the cryptocurrency and about Ripple’s business.
Even prior to the day’s enthusastic price action, cryptocurrencies have been on a tear.
In recent weeks, a raft of filings for spot Bitcoin ETFs in the US, driven in large part by an application by Wall-Street heavyweight BlackRock Inc., has reinvigorated traders who’d been buffetted by the long crypto winter.
Bitcoin has risen around 90% since December after falling 64% in the aftermath of a string of industry scandals and bankruptcies, including that of Mashinsky’s Celsius.
Read: Novogratz Sees Bitcoin Rising, Says ETFs Likely to Be Approved
--With assistance from David Pan, Chris Dolmetsch and Allyson Versprille.
(Recasts throughout)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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Less than two years after it launched, Donald Trump’s social media site, Truth Social, might be headed for the internet graveyard. New federal filings show that Truth, like a lot of Trump businesses, has lost massive amounts of money ($73 million, in this case) and is drifting, inevitably, toward insolvency. The site’s business partners seem worried it won’t recoup its losses anytime soon.
The embarrassing financial news was laid bare in a Securities and Exchange Commission filing made this week by Digital World Acquisition Corp (DWAC), the shell company behind a flailing attempt to take the social media business public. It states that Truth Social has only made $3.7 million in revenue since it launched in Q1 of 2022. By contrast, the company lost $50 million during that year and lost an additional $23 million in the first half of 2023.
It’s certainly a bad look for a business that already seemed pretty goddamned shady and was obviously more than a little dysfunctional.
For months, DWAC, a special purpose acquisition company, has been trying to finalize a merger with Trump Media & Technology (TMTG), the company that owns Truth Social, with the hopes of taking the business public via a SPAC deal. Since the merger plans were announced last year, however, they’ve been plagued by regulatory investigations and financial troubles and, in its recent filing, DWAC worries that if the merger between itself and TMTG fails to go through, Truth Social might not survive much longer. The filing states:
“As of June 30, 2023, and December 31, 2022, management has substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG...TMTG believes that it may be difficult to raise additional funds through traditional financing sources in the absence of material progress toward completing its merger with Digital World.”
If Truth Social were to wither up and die in this fashion, it would seem a fitting end to a platform that has already suffered a predictably ridiculous life cycle.
That life began in February of 2022, a little over a year after Trump was banned from some of the internet’s most popular websites—including Facebook and Twitter—over his alleged role in revving up the January 6th crowd that later stormed the nation’s capital in a flagrant display of violent idiocy. Blacklisted by the mainstream web, Trump set about launching his own social site, which the former POTUS promised would be a haven for “free speech.”
After its launch, Truth Social immediately suffered setbacks. It was accused of improperly ripping off code from Mastodon, the open-source Fediverse site. It suffered numerous UX issues, like long wait lists, registration issues, and other technical foibles that made it difficult for users to navigate. And it navigated a number of financial and regulatory hurdles as it sought to establish itself as a place where MAGA crowds would want to assemble digitally.
Ironically, despite Trump’s promises of a censorship-free environment, a study published last September showed that Truth Social’s content moderation strategy was decidedly more aggressive than other, competitor sites. From this, one could easily draw the conclusion that the site has functioned less as a safe haven for users’ speech than for Trump’s, as the billionaire has perpetually used the site to launch unhinged verbal attacks on his political and legal enemies—ones that likely would have been “censored” at other sites.
Trump’s Truth woes are just a part of a compounding financial and legal shitstorm that the former President is currently undergoing. The subject of four active court cases, Trump finds himself in potential financial peril as a result. On top of everything, he is running for President again because, screw it, why not? That’s probably the only way to dig himself out of the hole he’s in and, after all, it worked out so well for everybody the first time around.
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Stocks Trading & Speculation
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A homelessness charity boss has said he was shocked to see more than 10 children lining up for hot food at a Glasgow soup kitchen.Colin McInnes, who co-founded Homeless Project Scotland in 2019, said it was a "reflection on today's politicians".
Mr McInnes claimed there were youngsters as young as three who had been brought along by their parents, as well as a child in a pram on Friday night.He told Sky News: "It was a big shocker to us. My message to politicians is this: They need to step up and deal with this or step aside and let someone else deal with it."Homeless Project Scotland (HPS) runs a soup kitchen seven nights a week under Glasgow's Hielanman's Umbrella next to Central Station in the city centre.
Mr McInnes claimed one mum made the trip from Paisley in Renfrewshire more than 10 miles away to stock up on food.The charity chief added that he has noticed more people filling up bags with food so as they can freeze it to use later in the week.He said: "We're feeding 310 people a day. We're the largest soup kitchen in Scotland and what's extremely difficult to understand is that it's only 20 minutes from Nicola Sturgeon's constituency."The First Minister, who is MSP for Glasgow Southside, was reportedly invited to visit the soup kitchen more than a year ago but is yet to take up the offer. A Scottish government spokesperson said: "The first minister regularly visits and engages with different organisations and groups to help inform the Scottish government's efforts to tackle homelessness and the housing secretary visited Homeless Project Scotland last year."We're taking action to end homelessness in Scotland once and for all, and are working closely with Glasgow City Health and Social Care Partnership, including meeting with them regularly to keep up to date with developments in the city."The Scottish government added it is providing £52.5m to support local authorities in implementing rapid housing and Housing First approaches. Earlier this month it announced a further £2.4m to help those struggling to buy food amid the cost of living crisis.Read more:Missing couple and baby sleeping in tent, police sayTwo reasons behind big rise in house sales collapsing Image: The soup kitchen in Glasgow is open seven nights a week. Pic: Homeless Project Scotland As well as the soup kitchen, Homeless Project Scotland also distributes sim cards for free phone calls and hygiene packages to those in need.At the weekend, the charity's street team was sent to Edinburgh after a "high level" of rough sleepers were reported to its helpline.Sky News has contacted City of Edinburgh Council for comment.Mr McInnes said: "Edinburgh was pretty horrific. People are walking about with quilts under their arms - a quilt under your arm and a soggy pavement is not a home."The Scotland-wide charity, which has 1,800 volunteers, uses money donated by members of the public to buy and cook food for the Glasgow soup kitchen.It is currently on the lookout for a building in which to create a welfare centre that is open 24-hours a day, seven days a week.Mr McInnes said: "It might give people hope and that sense of warmth that someone cares about them. We're not looking for a building for free, just one that's affordable."The charity is appealing to Glasgow City Council, the Scottish government and private landlords for help.Glasgow City Council said it has tried to find a building, however none of the options so far have been deemed suitable by the charity.A spokesperson said: "We have tried to find a suitable building for HPS to host their evening soup kitchen, but they have rejected the three options offered to them."HPS recently told us they now want somewhere that can open round-the-clock with a capacity for over 200 people."We are very sorry, but we just don't have a place that matches the revised requirements set out by HPS."
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Nonprofit, Charities, & Fundraising
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Changpeng Zhao, founder of the world’s largest cryptocurrency exchange, Binance, warned last year that it was difficult to prevent illegal activity in the industry that he dominated. “[If] somebody wants to violate the law, the law is not going to prevent that. The law can help to reduce that,” the company’s then chief executive said.
But the authorities can catch up with you, as the 46-year-old found out this week. Zhao quit as Binance’s chief executive on Tuesday after pleading guilty to breaking US anti-money-laundering legislation. He will pay a $50m fine and faces a possible prison term, while Binance has agreed to pay a $4.3bn settlement.
At the time of giving that quote, Zhao was answering a question about the collapse of FTX, a rival exchange that filed for bankruptcy in November last year. Its founder, Sam Bankman-Fried, was found guilty of defrauding his customers earlier this month – two of crypto’s figureheads brought down by criminal proceedings within three weeks of each other.
Zhao announced his resignation in a post on X, formerly Twitter, saying he had “made mistakes, and I must take responsibility”, and adding that Binance had not been accused of misappropriating any user funds. He said he would now “take a break” and did not see himself being a startup chief executive again.
The Canadian citizen, known by his initials CZ, was born in the Chinese coastal province of Jiangsu, north of Shanghai, and followed his academic father to Canada when he was 12. He graduated in computer science from Montreal’s McGill University and then worked in programming systems for the Tokyo Stock Exchange and Bloomberg.
Zhao moved to Shanghai in 2005, where he founded a high-frequency trading platform. It was, appropriately, his participation in a poker game in that city in 2013 that led to the creation of Binance. He was drawn into a conversation about bitcoin – the cornerstone currency of the crypto market – and Binance was founded four years later.
Binance rode the crypto boom in the ensuing years. At one point, Zhao’s wealth was estimated at just under $100bn, according to Bloomberg, although that has since fallen by three-quarters to a still sizeable $23bn.
The exchange continues to operate – under new chief executive Richard Teng, its former head of regional markets – and Zhao remains wealthy enough to, as he wrote on Tuesday, do “some passive investing” and be a “minority token/shareholder in startups”.
However, the US Department of Justice (DoJ), which negotiated the settlement alongside the Commodity Futures Trading Commission (CFTC) and US treasury, could be seeking a jail sentence for Zhao tougher than the 18-month term outlined in federal sentencing guidelines, according to the New York Times. Zhao will be sentenced in February.
His fortune is based on his controlling stake in Binance, which he retains. The structure of that empire has been the subject of unfavourable comment in actions brought against Binance by US authorities. Two legal complaints, from the Securities and Exchange Commission (SEC) and the CFTC, referred to Binance’s platforms being operated by an “opaque web of corporate entities”.
The SEC process is still active but the CFTC complaint was part of Tuesday’s settlement. It portrayed a business on a collision course with authorities as it pursued growth. Samuel Lim, Binance’s former chief compliance officer, was quoted in a 2020 messaging exchange, obtained by the CFTC, discussing certain Binance customers, including some from Russia. “Like come on. They are here for crime,” he wrote. In reply, Binance’s money laundering reporting officer agreed that “we see the bad, but we close 2 eyes”. The complaint also alleged that Binance received internal warnings “regarding HAMAS transactions”.
The DoJ said Binance had admitted engaging in “anti-money-laundering, unlicensed money transmitting, and sanctions violations”.
Speaking on Tuesday, the US attorney general, Merrick Garland, said Zhao had “wilfully violated federal law that guards against money laundering and terrorist financing”, adding: “From the very beginning, Zhao and other Binance executives had engaged in a deliberate and calculated effort to profit from the US market without implementing the controls that are required by US law.”
Garland cited millions in Binance transactions from the US to Iranian users and users in Syria and Russian-occupied Ukraine, as well as terrorist groups including Islamic State and al-Qaida.
According to one expert, the ruling is a severe blow to the reputation of Binance and crypto in general. “Binance is clearly not to be trusted,” said Carol Alexander, professor of finance at the University of Sussex Business School. “As long as ordinary investors continue to trade on these exchanges, professional traders will continue to make money from them and the volatility around cryptocurrency.”
Howard Fischer, a partner at New York law firm Moses & Singer, said the settlement was a warning for errant crypto firms. “The libertarian ideal that some crypto enthusiasts trumpet – that the industry is decentralised and beyond traditional legal norms and obligations – has no weight with regulators and criminal authorities,” he said.
Nonetheless, despite crypto’s expanding rogues’ gallery, the market remains resilient. Bitcoin has risen more than 125% over the past year to $36,500, although it remains far below its peak of $69,000 in 2021.
But Zhao must now be a more distant observer of a market he presided over for so long. Asked for an article on the Guardian website last year what words or phrases he overuses, Zhao said he was always asking: “Who is responsible for this? Who?”
This week the buck stopped with him.
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Crypto Trading & Speculation
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Labour will force a Commons vote this week aimed at creating new legal safeguards against fiscal disasters such as Liz Truss’s catastrophic mini-budget, which sent the financial markets into meltdown and drove up mortgage rates.
The party’s plan for a “fiscal lock” to protect personal, family and the national finances from reckless politicians will be contained in an amendment to the king’s speech that will be voted on by MPs on Tuesday. The manoeuvre will present Conservative backbenchers with a dilemma over whether to back a Labour amendment, or vote against what is a plan designed to embed fiscal responsibility into the budgetary process, and protect it from wild or accidental political misjudgments.
The vote will take place on the same day as a “growth commission” set up by the former prime minister Truss will publish an alternative budget, which it says will contain a raft of “exciting” economic policies to cut taxes and deregulate the economy, challenging conventional economic thinking.
Under the Labour plan spelled out in its amendment, legislation would be introduced to ensure that the independent Office for Budget Responsibility (OBR) could publish its own report on the likely dangers or benefits of any substantial tax and spending plans to be introduced in a budget or other fiscal event.
When Truss’s chancellor, Kwasi Kwarteng, announced his tax-cutting mini budget in September 2022, he refused to publish the OBR forecast, sending the financial markets into a tailspin that led rapidly to his dismissal by Truss, and then the almost immediate reversal of most of the plans by Kwarteng’s successor, Jeremy Hunt.
When the contents of the OBR report on the Kwarteng mini-budget were eventually made public, they showed it had warned that the economy was already on course for a year-long recession, and that higher interest rates were pushing up the cost of servicing the UK’s debts.
The Labour amendment will propose to “give the Office for Budget Responsibility the power to produce and publish forecasts for any government fiscal event which includes permanent tax and spending decisions over a threshold to be specified in a new Charter of Budget Responsibility”.
Because the vote is on an amendment to the king’s speech, MPs cannot abstain, leaving Conservatives with no obvious easy political escape route.
Writing in the Observer, shadow chancellor Rachel Reeves says it is time to give the OBR more powers after 13 years of chaotic Conservative economic management. “That starts with taking the action necessary to prevent a repeat of Liz Truss’s disastrous mini-budget. As a former economist at the Bank of England, I know the damage that is done when our institutions are undermined: working people are worse off,” says Reeves.
“When the Conservatives crashed the economy, mortgages and rents soared as interest rates rose. We can never let that happen again.”
She adds: “That is why I have pledged that a future Labour government will strengthen the Office for Budget Responsibility so that any administration making significant, permanent tax and spending changes will be subject to an independent forecast of its impact.
“This will bring security back to our economy and prevent a re-run of last year’s chaos.”
She adds: “This week, Labour will put those plans to a vote in parliament. If Sunak wants to put country first, then he will show the strength to stand up to those in his party that crashed the economy and vote with us. If not, he will prove that all he can offer is more of the same and that the biggest risk to the economy is another five more years of the Conservatives.”
One of Labour’s main objectives in opposition has been to rebuild the party’s reputation for economic competence and fiscal responsibility. In recent opinion polls, Labour has had a strong lead on these issues over the Conservatives, having reversed a longstanding trend which saw the Tories favoured by more voters for sound economic management.
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Interest Rates
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Are the wealthiest states home to the best tippers?
(WOWK) – Tipping has become a hot-button issue for many: How much do I tip at a sit-down restaurant? Should I tip at a coffee shop? Should I tip someone after a massage?
Toast, a point-of-sale and management system company that records huge numbers of transactions has released data breaking down tipping trends by state. The average tip in the United States is just under the 20% rate you may have been told is the bar for “good” tipping.
Transactions revealed that tipping trends have little to do with a state’s overall wealth. Some of the worst tippers were found in California, Washington, New York and New Jersey, which are among the highest-earning per-capita states.
Residents of West Virginia and Kentucky were among the best tippers, even though their residents tend to be less affluent.
Delaware is the most-generous state for tipping; The First State’s tipping average is 22%, with Indiana behind it at 20.9%. Texas, Hawaii, New York, Arkansas, Louisiana, Nevada, Florida, Washington and California tip the least, going from 18.9% to 17.6%.
Toast points out that states with higher minimum wages for restaurant workers, such as California and Washington, appeared frequently near the bottom of the generosity ranking.
According to Toast, tipping at both quick-service restaurants – like coffee shops – and full-service restaurant have stayed steady over the past five years, with QSRs seeing a slight dip. In March 2018, full-service restaurants’ average tip percentage was 19.7%, the same as it is in 2023. In the same time period, quick-service restaurants saw a 0.8% decrease.
Toast’s data analysis covered credit or digital payments at quick-service food orders and full-service restaurants. Cash tips were not included in the figures.
Toast said that their rankings came from restaurants using the Toast platform, which has around 85,000 locations.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Consumer & Retail
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JGalione/Getty Images
toggle caption
Pay-by-the-month subscriptions are increasingly popular. But research suggests people often keep paying long after they intend to.
JGalione/Getty Images
Pay-by-the-month subscriptions are increasingly popular. But research suggests people often keep paying long after they intend to.
JGalione/Getty Images
Soccer fan Neale Mahoney's goal when he subscribed to NBC's Peacock streaming service last year was to watch a single season of the Premier League. But he wound up paying for extra time.
"When I signed up last fall, I intended to cancel at the end of the season in May," Mahoney recalls. "But of course when it came to the summer, I forgot to cancel and I realized I paid for three extra months."
It's a familiar mistake, given the explosion of subscription services in recent years. Americans are increasingly signing up to buy everything from bottled water to razor blades on a pay-by-the-month basis — but often forgetting to cancel when the subscriptions are no longer needed or wanted.
"I get coffee beans delivered from my favorite roaster in North Carolina by subscription," Mahoney says. "That is typically convenient. But I go on vacation and I have coffee piling up on my doorstep."
Mahoney, who's an economist, wanted to figure out how often people are paying for subscriptions they no longer want. Are monthly charges piling up for magazines and food box deliveries that customers would gladly cancel if given the opportunity?
He and two colleagues at Stanford and Texas A&M University scrolled through millions of anonymous credit card records, and they discovered a kind of natural experiment.
"The a-ha moment for us," Mahoney says, "was we realized that when your credit card expires or you lose your credit card and get a new one in the mail, you're going to get an email from all the companies where you have a subscription that says, 'Can you log in again and update your payment information?'"
When that happens, and people have to make an active decision about whether to renew a subscription, they cancel about four times as often as during other months.
On average, about 8% of customers cancel during months when they are asked to actively renew their subscription, compared to about 2% who cancel during other months.
The difference is especially pronounced for services that are easily overlooked, such as credit monitoring.
"Ten minutes after you signed up, you may never remember," Mahoney says. "Until a year later or two years later and you're looking through your credit card statement and say, 'What is this line?'"
Easy money
Consumer advocates suggest that businesses are profiting from customers' forgetfulness and inertia.
"I'm sure I'm paying for things I shouldn't be paying for," says Sally Greenberg, CEO of the National Consumers League. "It's a cash cow for companies."
Even when customers try to cancel, they sometimes run into roadblocks.
Deb Shelby says when her home security system stopped working, it took seven phone calls before the company finally stopped billing her.
"They insist on making money on people who don't have the stamina to fight back," says Shelby, who lives in Jericho, Vt. "I actually have the stamina to fight back. It took me six months to get it done. I think a lot of people just give up."
Shelby says she's faced similar challenges canceling Internet service and a satellite TV network.
Chris Delmas/AFP via Getty Images
toggle caption
The FTC is considering a new rule that would make it as easy to cancel monthly subscriptions as it is to sign up.
Chris Delmas/AFP via Getty Images
The FTC is considering a new rule that would make it as easy to cancel monthly subscriptions as it is to sign up.
Chris Delmas/AFP via Getty Images
The Federal Trade Commission gets thousands of complaints like this every year.
The commission, which polices unfair and deceptive business practices, is considering a new rule that would require companies to make it as easy to get out of a monthly subscription as it is to sign up. The so-called "click to cancel" rule would also require businesses to send customers an annual reminder.
Periodic reminders
Some trade groups are fighting the proposed rule, saying it could stifle innovation and limit customers' choice.
For shoppers who regularly use a product or service, subscriptions can offer convenience and valuable discounts. And economist Mahoney acknowledges it might be annoying if consumers had to actively renew a subscription every month.
Still, he argues a periodic reminder — perhaps every six months — could help cut unwanted payments in half.
"There are some people who tend to be more financially organized and they may set reminders," Mahoney says. "And there are some people who are busy and have other things going on in their life and they're more prone to making mistakes."
Mahoney tries to be organized with his own finances, especially after doing this research. But now that a new soccer season is underway, he can't promise he'll remember to cancel his Peacock streaming service once the last whistle has blown.
"If anybody should know this is a problem, it should be me," Mahoney says. "But I also think I understand myself. I will continue to overpay for things, but hopefully only overpay for a couple of months, not for a couple of years."
Mahoney notes a new cottage industry has sprung up to help people comb through their credit card bills and stop unwanted payments.
The services are usually marketed as — you guessed it — a monthly subscription.
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Consumer & Retail
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When Annette Walton wants to do some cooking on a winter evening, she straps on a head torch to guide herself around. In a home that does not have constant electric lighting, even simple chores are impossible without it.
Walton, 53, has lived in her home in Kielder Forest, Northumberland, since she was nine. It’s one of about 2,000 around the country that have never been connected to the electricity grid.
Instead, she relies on a generator, but the spiralling cost of even low-tax red diesel, averaging £1 a litre, means she can only afford to run it two hours a day. Generators can use about five litres an hour, so keeping the lights on in winter is an expensive business.
It is a common problem for those who live off-grid. Campaigners say many households have asked to be connected but have been handed bills of £60,000 or more by power distribution companies.
Christine Nicholls from Community Action Northumberland, which supports vulnerable people, says some children wash in streams because it’s easier than generating enough electricity for a shower.
“One householder has to refill her generator with diesel twice to have one bath. We have children coming home to a dark house and doing homework with head torches.”
There are 350 homes without mains electricity in Northumberland, and Nicholls has started a campaign, Powerless People, to help them. Many cannot use washing machines, hairdryers, power showers or freezers because they need more power than their generators can produce.
The 2,000 unconnected homes in England existed before electricity was rolled out. Some are in remote locations where cost prohibited them being connected; others are in national parks where overhead powerlines were not permitted; some were empty when the letters were sent out offering a connection.
Academic Paul Brassley, co-author of Transforming the Countryside: The Electrification of Rural Britain, says it was originally up to families to pay for the wiring inside the home, which would have deterred some poorer people. “It was mostly just for lighting … people didn’t have the same electrical requirements as now. At the start, profit was an issue. If you put out a mile of cable in a town you’re going to pick up, maybe, 100 customers. In the country, a mile of cable might only pick up one farm.”
Anne Hutchinson, 83, lives on a farm near Stonehaugh in the Northumberland national park. She first inquired about a connection in the 1960s, but even then it was too expensive. In 2000 she asked again and was quoted £160,000.
Her neighbour, Steve Batey, has become expert at maintaining his own generator and now runs a business fixing other people’s. “What really costs is if you don’t have batteries to store your electricity and you have to run the generator whenever you need power,” he says.
He and two neighbouring families were given a massive joint quote of £478,000 by Northern Powergrid almost 10 years ago because installing power lines would have involved cutting through part of Wark Forest.
Pensioner Brian Lawrenson applied to Northern Powergrid for a mains connection to his home in Catton, near Hexham. He lives 150 metres from where an overhead 20,000-volt cable terminates at a transformer, and was quoted £62,000 for an underground connection.
“I don’t want to pay about half the value of the house,” he says. “I think having electricity is a necessity, not a luxury. The power companies should cover it, or the government should put some money towards it.”
Single parent Sue Bridger was told it would cost £75,000 to connect her house near Haydon Bridge. “BT brought poles and connected me for £100 and yet Northern Powergrid gave me this ridiculous quote for the same location,” she says. “I can’t understand why water is seen as a necessity but power is not.”
Outside Newcastle, smallholder Clive Johnson already has electrical cables running over his land at Prudhoe. He was told 10 years ago it would cost £40,000 to connect mains electricity to his mobile home, despite being only 50 metres from the power supply for a housing development. “I’d never be able to pay that back,” says Johnson, 61, who runs an animal feed business and petting farm.
Ofgem says there is a charging formula, known as the Common Connection Charging Methodology (CCCM), and consumers who think they are being mischarged can ask for an investigation.
Northern Powergrid, the only distribution network operator in the north-east, says: “Costs are based on the most electrically viable, lowest-cost solution that meets the customer’s need. For off-grid properties, due to the nature of their location and complexity of connecting to our network, it can be more costly and, from an electrical connection perspective, more complex … Generally, underground connections are around three times the price of an overhead one.”
The Department for Energy Security and Net Zero says: “It is policy that customers requiring a new connection to the network are expected to pay for the associated costs, to ensure that other customers are treated fairly and do not fund network activities that are of no benefit to them.”
No government funding is available to help families pay.
The rest of the country was connected for nothing when rural electrification was rolled out in the 1950s, 60s and 70s. Most properties that missed out were either standing empty or in hard-to-access areas. In Northumberland, 85 of those are within the national park. Tony Gates, the park’s chief executive, says new connections are particularly difficult because of distances from the grid.
Liz Gray from the Rural Design Centre near Morpeth, which aims to tackle problems facing rural communities, says some properties are being assessed for renewable energy, such as wind or solar. “Money is the big barrier,” she says. “But there are some properties that will never be able to generate enough power” – such as those in the bottom of valleys.
Neil and Sarah Robson are tenant farmers outside Hexham and their home is powered by a wind turbine. Their generator kicks in when the wind doesn’t blow. It can take a day to do one load of washing because when the power supply falters, the washing machine stops. “Sometimes, we have to restart it 10 times a day,” says Sarah. “I would love to have mains electric. I’ve had enough of managing. I just want to be normal.”
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Real Estate & Housing
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A drastic decline in childminders could lead to a shortage of places, early years providers are warning.
There were 9,800 fewer childcare workers in 2022 than in 2019, with childminders down by a fifth.
Some have told the BBC they are being forced to leave because of a lack of pay and appreciation.
Childcare places in England fell by 2% this year, but the government says the population of pre-school children is also decreasing.
Working parents of three and four-year-olds are currently eligible for 30 hours of government-funded childcare during term time. By September 2025 this will be extended to children from nine months old.
But the sector is facing severe workforce challenges.
Becky Hiton, a former teaching assistant and single mum from the Wirral, has been childminding for 10 years. She only takes on children who do not have access to government-funded hours, because she says the amount paid is too low.
Once the government is paying for all pre-school children of working parents to have 30 hours, she says she will have to leave the profession: "I'm all for helping parents, but the payments they are offering are nowhere near what I charge now, so I wouldn't make ends meet.
"My families are happy with everything I offer so it would be a shame to throw it all away, but I need to keep my household running."
In just one year, between March 2022 and 2023, registered childminders in England fell by 3,500 (11%) - meaning a loss of more than 20,000 childcare places, data from Ofsted shows.
Helen Donohoe, chief executive at the Professional Association for Childcare and Early Years, says the numbers "are absolutely falling off a cliff" and that in a decade there will be less than a thousand left, leaving parents with "a lack of choice". She says almost half of people who work in the sector are on in-work benefits.
At a weekly gathering of the Wirral Childminding Association, which was set up for rural childminders to help and support each other, some are questioning their future.
Nikki Griffiths, who runs the group, says childminders are like "micro-nurseries" who have to follow an early years curriculum and do training in their own time, but they are sometimes not seen as professionals.
She says her local authority pays £4 an hour for three and four-year-olds, so with three children under the age of five, she earns £12 an hour before she has paid for anything else, including training, insurance, utilities and food. "We feel so undervalued."
From September, the rate the government will pay on average will increase to £5.62 per hour for three and four-year-olds and £7.95 for two-year-olds. But early-years charities says the cost of providing these places is much higher.
As well as childminders, the number of staff working for school-based nurseries and for nurseries run by voluntary organisations is falling. Private nurseries were the only type of childcare provider to be employing more staff in 2022 than they were in 2019.
The most recent figures show there are 334,000 early-years workers, down 10,000 on the peak seen in 2019.
The government says it is launching a national campaign to support the recruitment and retention of staff.
To help combat childminders leaving, it is also offering payments of £600 for those who sign up, and £1,200 for those who join through an agency.
Proposals to help providers recruit and retain staff include getting rid of the need for a maths qualification, and changing ratios.
But Neil Leitch, from the Early Years Alliance, says the plans "are unlikely to be enough to boost workforce numbers" and "risks a de-professionalisation of the workforce".
The National Day Nurseries Association says one way of plugging the gap could be allowing the sector to recruit from abroad.
Zoe Raven, founder of Acorn Early Years Foundation, which is a social enterprise, would love to expand and open new nurseries but the workforce issue is stopping her.
"I can't come up with a whole new staff team", she says.
One of her nurseries in Milton Keynes, Jubilee Wood, currently makes a loss, as most of the children rely on government-funded hours. It is subsidised by nurseries in more affluent areas, which charge higher fees.
Zoe worries that when the government's expansion is fully in place, "there will be an awful lot of women who won't be able to get back to work after they have taken maternity leave".
MPs from the education committee are expected to release their report into the childcare sector later this week.
The Department for Education (DfE) says it is rolling out "the single biggest investment in childcare in England ever, set to save a working parent using 30 hours of childcare up to an average of £6,500 per year".
The DfE official adds: "To make sure there are enough places across the country, we will be investing hundreds of millions of pounds each year to increase the amounts we pay providers - and will be consulting on how we distribute funding to make sure it is fair."
Are you personally affected by the issues raised in this story? You can share your experiences by emailing haveyoursay@bbc.co.uk.
Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:
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Workforce / Labor
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Hiya, folks, and welcome to Week in Review (WiR), TechCrunch’s digest of the past week in tech news. It’s TC’s column that highlights the major stories over the past few days, and — we humbly submit — it’s a darn useful resource for folks on the go.
This week, we cover Sam Altman backing a teen’s AI startup, Google’s hardware event (and first impressions of the Pixel 8 Pro), Flexport drama, and the ongoing FTX fallout. Also on the agenda: Gmail’s harsher rules to prevent spam, TikTok testing an ad-free subscription plan, and LinkedIn going big on AI tools. And that’s not all.
If you haven’t, sign up here to get WiR in your inbox every Saturday. And if you have, our thanks. Now, let’s get on with the news.
Most read
Altman backs teen entrepreneurs: Sam Altman is among the backers of an AI startup, founded by two teenagers, that’s aiming to assist businesses in automating workflows in “previously unexplored” ways. Manish writes that Induced AI, founded this year, lets businesses input their back-office tasks in plain English and converts the instructions to pseudo-code in real time.
Google unveils new hardware: This week was Google’s annual hardware event, where the search and consumer tech giant showed off what it’s been working on. Christine wrote up a thorough roundup of the news, which included updates on the Pixel 8 and Pixel 8 Pro, Pixel Fold, Android 14, Pixel Buds, Google Assistant, Bard, Pixel Watch 2 and other goodies.
Hands on with the Pixel 8 Pro: Darrell took the newly unveiled Pixel 8 Pro for a whirl, and he liked what he saw. While very similar to last year’s model (the Pixel 7 Pro), Darrell felt that the improved cameras, brighter screen and enhanced AI-powered features made it enough of an upgrade to (potentially) warrant a purchase — minus the underutilized temperature sensor. Stay tuned for his full review.
Turmoil at Flexport: Dave Clark, the former Amazon executive who was ousted as CEO of Flexport just a year into the job, fired back at its founder and board, calling recent reporting on the logistics company “deeply concerning.” Clark made the comments Monday in a lengthy post on social media site X following a report from CNBC that provided new information about his last days at Flexport, a freight forwarding and customs brokerage startup valued at $8 billion.
SBF allegedly tried to buy off Trump: The TC team’s been trained on the Manhattan Federal Court for the trial of Sam Bankman-Fried, the disgraced entrepreneur accused of orchestrating the collapse of cryptocurrency exchange FTX. But fascinating details about SBF’s political dealings are emerging from a book by Michael Lewis, “Going Infinite,” that debuted on the first day of the trial, like SBF’s attempt to buy off Trump to get him to not run again for president.
Gmail fights back against spammers: Google this week announced a series of significant changes to how it handles email from bulk senders in an effort to cut down on spam and other unwanted emails. The company says that, starting next year, bulk senders will need to authenticate their emails, offer an easy way to unsubscribe and stay under a reported spam threshold.
TikTok tests an ad-free tier: TikTok is testing an ad-free subscription tier for some users. For $4.99, subscribers get an ad-free experience on TikTok — no other strings attached. But don’t look for the option to arrive anytime soon. TikTok says that it’s piloting the plan in a single, English-speaking market outside the U.S. for now.
LinkedIn leans into AI tools: LinkedIn this week unveiled a string of new AI features spanning its job hunting, marketing and sales products, Ingrid writes. They include a big update to its Recruiter talent sourcing platform, with AI assistance built into it throughout; an AI-powered LinkedIn Learning coach; and a new AI-powered tool for marketing campaigns.
Musk comes clean about X’s metrics — maybe: In September, Elon Musk said that X users were generating a lot of content — creating 100 million to 200 million posts every day, excluding retweets. But speaking at an event this week, X CEO Linda Yaccarino offered a contradictory figure. She claimed X was seeing 500 million posts per day on the platform. So who’s right? Beats us.
Former NSA director’s startup shutters: IronNet, a once-promising cybersecurity startup founded by a former NSA director, has shuttered and laid off its remaining staff following its collapse. The Virginia-based IronNet was founded in 2014 by retired four-star general Keith Alexander and had raised more than $400 million in funding. But IronNet failed to gain traction after going public in August 2021, and its stock price continued to steeply decline in the wake of an initial spike.
Audio
On the hunt for a new podcast to listen to while you work out, do the dishes or rake the leaves (now that fall’s arrived)? Look no further than TechCrunch’s roster, which covers the world of startups, the blockchain and more.
On Equity this week, the crew talked about the SBF trial; deals from VR firms Rainforest, At One Ventures, Section 32 and Greylock, where venture funding has declined; and how Fearless Fund, a firm founded to invest in women of color, is being barred from awarding grants to Black women founders.
Meanwhile, Found featured Esther Rodriguez-Villegas from Acurable, a medical device company that makes patient-friendly wearable devices to diagnose and manage respiratory conditions at home. As a career-long academic, Rodriguez-Villegas talks about how she never intended to be a founder until she learned about how the currently available medical devices make it extremely difficult to detect and treat diseases like sleep apnea and epilepsy.
And over on Chain Reaction, Jacquelyn did a crossover episode with Alex about the SBF trial. Jacquelyn has been on the ground at the Southern District of New York courthouse, listening in to the trial in the same room as Bankman-Fried, so there was lots to talk about.
TechCrunch+
TC+ subscribers get access to in-depth commentary, analysis and surveys — which you know if you’re already a subscriber. If you’re not, consider signing up. Here are a few highlights from this week:
Inside the SBF trial: Rebecca and Jacquelyn report on the second day of the SBF and FTX trial. The prosecution painted Bankman-Fried as someone who knowingly committed fraud to achieve great wealth, power and influence, while the defense countered that the FTX founder acted in good faith, never meant to commit fraud or steal and basically got in over his head.
Battery-boosting software tech: Tim covers Breathe Battery Technologies, a startup that’s developed a bit of software that can be slipped into just about any lithium-ion battery in use today — endowing it with either faster charging speeds or greater longevity.
What lies beyond ChatGPT: Anna surveyed 10 investors about the future of AI and what they believe might be the next big thing. Among other topics, they touched on where startups still stand a chance, where oligopoly dynamics and first-mover advantages are shaping up and the value of proprietary data.
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Crypto Trading & Speculation
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Powell Touts Tight Financial Conditions, Causing Them to Loosen
For a lesson in the real-time pitfalls of Federal Reserve messaging, consider the market reaction to Jerome Powell’s commentary on the role of Wall Street in subduing inflation.
(Bloomberg) -- For a lesson in the real-time pitfalls of Federal Reserve messaging, consider the market reaction to Jerome Powell’s commentary on the role of Wall Street in subduing inflation.
Stocks and Treasuries rose after the central bank held interest rates steady and the Fed chair name-checked rising bond yields in helping to tighten financial conditions — potentially serving as a substitute for additional interest-rate hikes down the road.
Policy-sensitive two-year yields, cited by Powell this week, duly plummeted after his remarks, along with those on longer-dated bonds. That has helped to ease the latest gut-wrenching Treasury rout that has rippled through the global economy — hitting asset prices, squeezing home buyers and raising the cost of doing business for Corporate America and beyond.
While the Fed kept open the prospect of additional policy action on strong economic growth, Powell speculated that Treasury yields at lofty levels could instead help the central bank keep monetary conditions restrictive to wring out the inflationary excesses of this business cycle.
The problem now: Fed officials risk a no-win position if the financial climate eases materially on expectations – arguably stoked by Powell – that the US central bank is now done with its aggressive tightening campaign.
“One problem, I think, the chairman has at this point is by talking to markets in a supportive way, stocks rally, bond yields fall — that’s loosening financial conditions,” said Bill Dudley, the former president of the New York Fed, said on Bloomberg Television. “That’s removing some of the restraint that was creating some impetus for not tightening monetary policy further.”
US yields were already easing in the run-up to the Fed decision after the Treasury announced plans to sell a lower-than-expected amount of securities at its quarterly refunding auctions next week, while a gauge of US factory activity also came in below expectations.
More broadly, the Bloomberg US Financial Conditions Index — which measures tightness in money, bond and stock markets — has turned more restrictive for three straight months as higher rates fueled a big retreat in the S&P 500.
While Powell on Wednesday kept open the possibility of a fresh hike in December, traders weighed on the significance of the Federal Open Market Committee’s view that “tighter financial and credit conditions for households and business are likely to weigh on economic activity, hiring and inflation.”
Yet the challenge of adding financial conditions in the latest statement is that they can go up and down, former Fed Vice Chair Richard Clarida told Bloomberg Television, adding that policymakers may come to regret focusing on volatile market data.
“With Powell seeing persistence of tighter financial conditions as ‘critical’, we can’t help but wonder whether yesterday’s dovish market reaction could incentivize some hawkish pushback, especially if it continued,” wrote Jim Reid, head of European and US credit strategy at Deutsche Bank AG.
In any case, there are clear reasons for Wall Street’s fixation on how asset prices interact with the real economy, by driving the cost of funding for consumers and businesses while influencing demand. Standard Chartered, for its part, estimates that a more restrictive financing climate could cut more than a percentage point off baseline economic growth over the year ahead.
“The run-up in mortgage, corporate and Treasury yields, combined with a strong USD and weaker equities, raise the expected drag on the US economy,” the bank’s analysts including Dan Pan wrote in a research note. “The implied downside risk to growth might be underestimated, especially if the rise in financial stability risks is not fully captured by equity or corporate bond market moves.”
--With assistance from Justina Lee.
©2023 Bloomberg L.P.
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Interest Rates
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SBI Mutual Fund Gets RBI Nod For Buying Stake In Karur Vysya Bank
The aggregate holding by SBI MF in the bank should not exceed 9.99% of the paid-up share capital.
SBI Mutual Fund received approval from the RBI for acquiring up to a 9.99% stake in Karur Vysya Bank Ltd.
The approval has been granted with reference to the application made by SBI Mutual Fund to the Reserve Bank of India. The approval will be cancelled if SBI MF fails to acquire a major shareholding within a year from the date of the letter, the bank said in an exchange filing on Wednesday.
The aggregate holding by SBI MF in the bank should not exceed 9.99% of the paid-up share capital. If the aggregate holding falls below 5%, prior approval of the RBI will be required to increase it to 5% or more of the paid-up share, it said.
The bank's total business was approximately Rs 1.54 lakh crore as of Sept. 30, with a deposit base of Rs 83,068 crore and advances of Rs 70,448 crore. It has recently opened three new branches in Tamil Nadu and one in Karnataka, taking the total branch network to 831.
Shares of Karur Vysya Bank closed 1.32% higher at Rs 153.30 apiece on the NSE, as compared with a 1.04% advance in the benchmark Nifty 50.
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Banking & Finance
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Ivanka Trump is expected to take the stand Wednesday to testify in the non-jury civil trial stemming from New York Attorney General Letitia James’ lawsuit against her family and the Trump Organization.
The former president’s daughter was originally listed as a defendant in James’ lawsuit, in which she alleged Trump defrauded banks and inflated the value of his assets with the help of his children.
A New York Appeals Court, over the summer, dismissed Ivanka Trump as a defendant. That ruling also limited the statute of limitations.
Her expected court appearance comes after her attorneys filed a notice of appeal last week to reverse to the decision to require her to testify. Their request was denied.
Former President Trump has denied any wrongdoing and has repeatedly said his assets were actually undervalued. Trump has repeatedly said his financial statements had disclaimers, requesting that the numbers be evaluated by the banks.
And both Donald Trump Jr. and Eric Trump testified during the trial that they had no involvement in the creation of financial statements, and said the Trump family did nothing wrong.
Ivanka Trump’s testimony is expected to last for hours and could move into Thursday. The former president’s daughter is expected to take questions from both state attorneys from the New York Attorney General’s Office, and Trump defense attorneys.
Ivanka’s expected testimony Wednesday comes after former President Trump took questions on the stand for hours on Monday— an unprecedented proceeding.
Trump demanded a jury Monday and called the civil trial against him and his businesses a "disgrace," while maintaining that James has "no case."
Trump described his forced testimony as "election interference" while maintaining that his net worth is "far greater" than financial statements during testimony Monday.
"I think this case is a disgrace," he said, adding that people are being "murdered" in New York as James is "watching this case."
"It’s a disgrace. It is election interference because you want to keep me in court all day long," Trump said while on the stand after testifying for more than five hours. "And Judge … I want a jury."
One of Trump's attorneys, at the end of the former president's testimony, said that in "33 years," they have "never had a witness testify better."
"An absolutely brilliant performance by President Trump. He's not backing down. He's told everyone the facts," the Trump attorney said. "Now that the American people know what's going on, maybe something will change."
James, a Democrat, sued Trump, his children, and the Trump Organization last year, alleging that he and his company misled banks and others about the value of his assets. James said the former president’s children – Donald Jr., Ivanka and Eric – and his associates and businesses committed "numerous acts of fraud and misrepresentation" on their financial statements.
James filed the lawsuit against Trump "under a consumer protection statute that denies the right to a jury," a Trump spokesperson told Fox News Digital.
"There was never an option to choose a jury trial," the spokesperson said. "It is unfortunate that a jury won’t be able to hear how absurd the merits of this case are and conclude no wrongdoing ever happened."
During Trump’s unprecedented testimony Monday, New York Judge Arthur Engoron tried to cut him off from providing lengthy answers to state lawyers’ questioning, and he even said, "I don’t want to hear everything he has to say."
But Trump defended himself and his businesses while on the stand and blasted the investigation, lawsuit and non-jury trial.
"They're trying to hurt me – especially her," Trump said, referring to James, "for political reasons."
Engoron in September ruled that Trump and the Trump Organization committed fraud while building his real estate empire by deceiving banks, insurers and others by overvaluing his assets and exaggerating his net worth on paperwork used in making deals and securing financing.
"He ruled against me without knowing anything about me," Trump said on the stand. "He called me a fraud, and he didn’t know anything about me."
Meanwhile, Trump defense attorneys say they will likely move for a mistrial.
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Banking & Finance
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Sam Bankman-Fried just ain’t all that, says Pat Rabbitte. “He’s not that remarkable … I just don’t see it.” Rabbitte was a customer of FTX, the crypto exchange founded by Bankman-Fried that filed for bankruptcy in November. Bankman-Fried is set to go on trial in New York on October 3, charged with conspiracy and fraud relating to the collapse of the exchange. Like hundreds of thousands of others, Rabbitte’s money is tied up in the bankruptcy proceedings. What happens to those creditors is far worthier of attention, Rabbitte says, than what happens to Bankman-Fried. “He is not that interesting.”In this opinion, Rabbitte is in the minority. Before FTX collapsed, Bankman-Fried (or SBF, to some) was very much a main character. The 31-year-old, who styled himself as the respectable face of crypto, steered the exchange to a $32 billion valuation in only three years. He courted regulators, politicians, and venture capitalists. He fraternized with sports stars and supermodels. He seduced reporters at the largest English-speaking publications. He’s the “next Warren Buffet,” they crooned, the “Michael Jordan of crypto.” Decked in his trademark costume—a T-shirt, shorts, and dad sneakers—he projected a humility unlikely of the world’s youngest billionaire.When FTX crumbled and the gory allegations followed, Bankman-Fried’s reputation cratered too. But fascination with his character was amplified. The question shifted from “How did he achieve so much?” to “How did he deceive so many?” The salacious details of the sexual encounters between Bankman-Fried and his inner circle will feed into the circus of his trial, rekindling the debate about his genius, morality, and legacy. Rabbitte will follow along, but not obsessively. His focus, along with a group of other FTX victims, will be elsewhere.In May, a group including Rabbitte began to gather on the messaging platform Telegram to discuss an idea that, to many ears, might sound impossible: restarting FTX, without SBF. They had all lost money to the exchange. At the end of the bankruptcy, they can expect to recover a portion of that money, though probably not all of it and not for years to come. Firing up the exchange, they think, could provide a route to a faster and fuller recovery.To a large extent, FTX was SBF. It was the sum of his entrepreneurship, marketing, lobbying, and risk-taking. Now the brand is in tatters. The group of creditors, who call themselves the FTX 2.0 Coalition, believe the exchange has a future without him. “The business was essentially good,” Rabbitte insists.Bankman-Fried was raised on the campus of Stanford University, where both his parents taught. They were law professors, but mathematics was his forte. After graduating from the Massachusetts Institute of Technology (MIT) with a physics degree, he took a job as a quant trader—someone who programs software to trade for them—at Jane Street Capital, one of the biggest firms on Wall Street. He was reportedly drawn by its associations with effective altruism (EA), an intellectual movement that advocates for earning as much money as possible in order to give it away. The idea struck a chord.In 2017, Bankman-Fried started his own trading outfit, Alameda Research, taking seed funding from effective-altruist donors. Early employees were mostly EAs too; it was all about earning to give. The firm focused on arbitrage trading, whereby profits are realized on tiny differences in the prices of assets across different exchanges. Specifically, it took advantage of the lucrative kimchi premium, a gap in the price of bitcoin on exchanges in South Korea and elsewhere.Soon, Alameda earned a reputation for profitability, says Mike van Rossum, founder of rival firm Folkvang, and Bankman-Fried as the brains behind the operation. It was apparent he was “crazy smart,” says van Rossum, of the first time he met Bankman-Fried. “He’s the quickest person, like machine-quick. I haven’t really seen that [before].”A reputation as a boy-genius with an altruistic vision would become the foundation of Bankman-Fried’s public image—and his efforts to develop FTX, the exchange he resolved to set up. Folkvang began to trade on FTX almost immediately after it launched in 2019. A few peers were reluctant, says van Rossum, because Bankman-Fried was fairly unknown, but eventually all the big crypto investment firms were using it. “In the end, we drank the Kool-Aid,” he says. Two years later, a surge in the price of cryptocurrencies brought millions of regular people to crypto investing, too. Many, like Max Windhagen, a university lecturer from Germany, chose FTX for the range of trading options available, but its founder’s persona played a role, too. “He was able to come across as very harmless,” says Windhagen. “It’s like the nerdy kids at school. They are smart, but don’t seem to possess the social skills to manipulate others.”Bankman-Fried leaned into his mythology. He was frequently in contact with the US Securities and Exchange Commission (SEC) and Commodities and Futures Trading Commission (CFTC) over regulation of the crypto sector, endearing him to policymakers. He also ingratiated himself with venture capitalists, who fawned over him, and the media, which lionized him. Later, he started a charitable foundation that donated millions of dollars to EA causes, under the FTX brand. He also pledged to give his entire personal wealth away.In 2022, when crypto markets stumbled, jarred by the collapse of the Terra-Luna stablecoin and the hedge fund Three Arrows Capital, Bankman-Fried seized on another opportunity to play the hero. FTX swooped in with rescue bids for crypto exchange Bitvo and lenders Voyager Digital and BlockFi, which had been caught in the fallout. He was anointed crypto’s white knight. The veneer of legitimacy around FTX grew thicker, and the exchange became the second largest in the world.Last November, it all fell apart. A CoinDesk report raised questions about the health of Alameda’s finances and its dealings with FTX. That triggered a surge in customer withdrawals, which the exchange couldn’t handle, forcing it into bankruptcy. A month later, the US Department of Justice accused Bankman-Fried of misappropriating customer funds, which had allegedly been used to bankroll risky trading activity, acquisitions and venture investments, real estate purchases, marketing campaigns, political donations, debt repayments, and loans to himself, his parents, and others. For every dollar’s worth of assets a customer stores, an exchange is supposed to keep a dollar’s worth on hand for withdrawal. But FTX couldn’t meet withdrawals, the indictment asserts, because the money was missing.When FTX fell, many victims engaged in a self-flagellation of sorts, upbraiding themselves for their credulity. Windhagen lost a fifth of his net worth—not enough to ruin him financially, he says, but “enough to really hurt.” He had always been suspicious of personality cults, but for whatever reason, did not “adjust his risk assessment” for Bankman-Fried. Folkvang had half of its assets on FTX, worth tens of millions of dollars. Risk management was “pushed to the back of the to-do list,” says van Rossum, in the fervor of the crypto boom, but also partly because he felt he could trust the FTX executives. “We got screwed over,” he says.The brands that Bankman-Fried had for years so carefully curated—both his own and FTX’s—fell to pieces in the span of a week. In an interview with Vox a few days after the bankruptcy, he said the quiet part aloud: It was “just PR.”The precise origin of the push to restart FTX is unclear. It’s possible multiple parties came to the idea at once. But in January, a back-of-the-envelope calculation started a discussion. Sunil Kavuri, an FTX creditor with a background in finance, valued the exchange at roughly $8 billion, based on transaction volumes for the previous year. It was a crude calculation, Kavuri admits, that didn’t account for intangibles like reputational damage, but it also illustrated the potential for FTX to be worth more to creditors alive than dead.Kavuri proposed a debt for equity swap. The FTX exchange would be auctioned off to outside investors who would inject capital to get it back on its feet, and those owed money by FTX would be given a stake in the new exchange. If FTX 2.0 succeeded thereafter, the value of each creditor’s equity might some day exceed the amount they originally lost, creating an incentive for those people to use it. “The key is that the exchange has much greater value as a going concern,” says Kavuri, “than split into its parts.” Intrigued by the idea, private equity firms and crypto media began to contact him to ask about his valuation.The FTX 2.0 Coalition was born a few months later, of the idea that, for a reboot to be taken seriously by John Ray III, the restructuring expert in charge of the FTX estate, small creditors needed to make themselves heard. Typically, the interests of creditors in a bankruptcy are represented by an Unsecured Creditors’ Committee (UCC), which has a formal voice in negotiations, but the group felt a grassroots approach was necessary. In one of the earliest messages on Telegram, Loomdart, the pseudonymous founder of the group, said he hoped to form an “army of people.” Everyone should help to spread the word, he said, because “the most important thing is pure eyeball exposure.” So far, the coalition has almost 3,000 members.The plan to reboot the exchange has its detractors. The main objections revolve around the damage done by Bankman-Fried to the FTX brand and the cost to an outside investor of rebuilding a viable business from the wreckage. Reports compiled in the wake of the collapse, after all, suggested FTX had next to none of the accounting, data security, and corporate governance systems one might expect of a legitimate business, so what precisely would an investor be purchasing?“A reboot is certainly optimistic. It’s highly unlikely, from a practical standpoint,” says Alan Rosenberg, a partner at the law firm Markowitz Ringel Trusty and Hartog, and member of the American Bankruptcy Institute. “FTX was a total mess. There was nothing right about it. An investor would need to be willing to invest in the time, energy, and money to completely restructure and revitalize [the exchange].”Although a reboot is possible from a legal perspective, says Rosenberg, the deficiencies of the FTX business mean restarting the exchange will require large amounts of capital and a wide range of expertise. “It’s a huge undertaking. You’d have to create a whole new company,” he says. “I don’t know what there is to sell, beyond the customer base.”Regulatory hurdles might also stand in the way, says Thomas Braziel, founder of 507 Capital, an investment firm that has taken a multimillion-dollar position in the FTX bankruptcy by purchasing debt from creditors. The estate administrators will need to convince the SEC and CFTC that any outstanding business defects have been cured, or otherwise face objections in bankruptcy court. A reboot is not necessarily a Hail Mary, says Braziel, who is open to the idea in principle, but “it’s a more aggressive play than going for par.”In spite of the objections, in July, the FTX 2.0 Coalition received its first real indication that its advocacy work might be paying off. A draft reorganization plan filed by Ray proposed that FTX assets be marketed to investors with a view to starting a new “offshore exchange company.” The plan was bare-bones, but showed that a reboot was at least under consideration. A presentation deck published on September 11, meanwhile, revealed that multiple parties have submitted bids to invest in the new FTX.Neither Ray nor FTX responded to requests for an interview. But according to Braziel, who relayed a conversation with Ray from early July, the FTX estate is serious about the prospect of a reboot. Ray is “100 percent behind it,” says Braziel.Whether the FTX 2.0 Coalition has helped to steer Ray’s thinking is an open question. It doesn’t have a line to Ray’s team, nor does it have a voice in the bankruptcy court. But its members are convinced the noise they’re generating is making a difference, by signaling public support. Attorneys from Alvarez and Marsal, as well as from Sullivan and Cromwell, two firms employed by the estate, recently began to follow members of the coalition on X, formerly known as Twitter. “We know they’re taking notice. I’m convinced,” says Rabbitte.The multiple bids, meanwhile, suggest that prospective investors are buying into what the group has long been saying: that what’s left of FTX is just a list of customers, but an immensely valuable one. That list, the argument goes, is the product of hundreds of millions of dollars (allegedly of customer money) spent on marketing FTX and dressing the image of SBF, its mascot. “The most important thing [an investor would be purchasing] is us,” says Rabbitte.FTX had managed to accrue more than 9 million customers under Bankman-Fried, a (loosely) estimated 1.4 million of whom are creditors in the bankruptcy. Even though not every creditor will want to use FTX 2.0, those that plan to continue trading crypto will be incentivized to stick around. As equity-holders, a portion of trading fees and profits generated by their activity will make its way back into their pockets. The new exchange would start life with a horde of customers, all of whom are invested in its success, without lifting a finger.Larger creditors like Travis Kling, the founder of Ikigai Asset Management who is owed the 18th largest sum by FTX, have also lent their voices to the coalition. “In the current landscape, exchanges are fighting tooth and nail over customer acquisition,” he says. “Having hundreds of thousands of customers on day one gets over the cold-start problem,” he says.There is also plenty of room in the market, says Kling, for a new exchange that’s cleaner than clean. The world’s largest, Binance—charged earlier this year by the CFTC and SEC with a litany of violations and reportedly under investigation by the US Department of Justice—is facing a “Category 5 shitstorm,” as he describes it. In this context, there is a “clear opportunity to come in and compete.”The hope is that something positive may yet come, says Loomdart, of the great fortune that was spent on the Bankman-Fried boosterism, so crucial to attracting people to FTX. The new exchange has the opportunity to succeed both because of Bankman-Fried—or rather the customer list he created—and in spite of him.“People say the FTX name is tarnished, but I don’t view it like that,” says Loomdart. “FTX was Sam. It got to where it was because of him. That’s true. But it’s not about restarting Sam’s FTX. It’s a different beast entirely.”
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Crypto Trading & Speculation
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Rishi Sunak’s decision to drive a “green wedge” between the Conservatives and Labour will take the UK into dangerous new political territory and “the worst kind of culture wars”, not seen for more than 30 years, senior Tory figures and political observers have warned.
Reversals and delays to net zero policy announced last week will be just the start of a general election campaign in which the UK’s longstanding cross-party political consensus on climate will be increasingly at stake. Emails sent to journalists from the Conservative campaign headquarters revealed lines of attack on targets including the independent Climate Change Committee and Labour’s proposed £28bn investment in a low-carbon economy.
Sunak, announcing a five-year delay to the ban on new petrol and diesel cars, and a watering-down of the phase-out of gas boilers, also claimed to scrap nonexistent taxes on meat and flying, the imposition of seven bins and forced car-sharing – and the CCHQ emails encouraged the media to target Labour over these phantom policies.
For veteran champions of climate policy, these attacks are a novel and threatening development – since the late 1980s, measures to tackle the climate crisis have had common backing across the political spectrum.
Lord Goldsmith, a former Tory minister, told the Observer: “It’s not so much the individual measures he’s announced. It’s more about the language and politics. This is a clear attempt to turn the environment into a wedge issue, as it is in the US. We have managed to avoid that until now, with disagreements mostly being about means, not ends. Sacrificing the environment to culture wars is cynical, devastating and wildly irresponsible.”
Sunak repeated many times that he was still committed to the UK’s legally binding target of reaching net zero by 2050, though experts said the policy changes were more likely to hamper than help. But Chris Skidmore, the Conservative ex-minister and author of the government’s net zero review, accused the prime minister of misleading voters. “It’s especially worrying that false claims and disinformation are being made about meat taxes that have never existed, or compulsory car sharing, or having seven bins. This is completely untrue, and is the worst kind of culture war politics, attempting to deliberately mislead,” he told the Observer.
Some political observers said there was still time for the government to pull back from the brink. “It’s too soon to say the cross-party consensus is cracking, but it is in danger,” said Tom Burke, a former government adviser and co-founder of the green thinktank E3G. “This is a big mistake by the Tories, it will not help them much, and it’s desperate.”
Shaun Spiers, executive director of the Green Alliance thinktank, added that it was possible the PM’s blows against net zero policy were “more sound and fury than anything substantial” but warned they should stop. “If this is the way the Conservative party is going to work, it will fracture the consensus on the climate,” he said. “If Sunak wants to go further, then the consensus will be in deep trouble.”
Attempts to create divisions over the climate contrast sharply with the last general election, in December 2019, when all major parties had commitments to the target of net zero greenhouse gas emissions by 2050. The main green point of contention in their manifestos was over which could cut carbon fastest.
This cross-party approach has been a feature of British politics since the days of Margaret Thatcher. A chemist by training, she grasped the potential impacts of burgeoning carbon emissions on global heating. After the success of signing a global UN treaty to save the ozone layer, the Montreal Protocol in 1987, she moved quickly to attempt the same for greenhouse gases, making a landmark speech at the UN general assembly in 1989, calling for concerted action.
Sunak, by contrast, did not even attend the UN gathering this month. Just hours after the UN secretary general António Guterres warned world leaders that humanity had “opened the gates of hell”, Sunak made his speech watering down UK policy.
Other self-identified “green Tories” are less concerned about the change of direction. One told the Observer the announced changes on electric vehicles and boilers, and scrapping proposals to force landlords to make their tenants’ homes more energy efficient, were “not going to slow the dial that much [on cutting emissions]. This is why I have been broadly supportive of the pragmatic approach.”
When it comes to voters, the signs are that the UK public values the cross-party consensus, with more than two-thirds in most polls putting climate action as a top priority. Polling for the Guardian yesterday shows the danger for Sunak: just over one in five voters now trust Sunak on the climate, according to research carried out by Omnisis.
Goldsmith said: “This [culture war over the climate] is not what voters want, and I’m confident they will put an end to this.”
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Renewable Energy
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An Australian millionaire and real estate mogul has advice for millennials struggling to purchase a home: stop buying avocado toast.
Tim Gurner, a luxury property developer in Melbourne responsible for over $3.8bn in projects, is facing heat for comments he made on 60 Minutes in Australia, implying that young people can’t afford to buy property because they’re wasting money on fancy toast and overpriced coffee.
“When I was trying to buy my first home, I wasn’t buying smashed avocado for $19 and four coffees at $4 each,” he said. “We’re at a point now where the expectations of younger people are very, very high.”
He added: “We are coming into a new reality where … a lot of people won’t own a house in their lifetime. That is just the reality.” Asked if he believes young people will never own a home, he responded: “Absolutely, when you’re spending $40 a day on smashed avocados and coffees and not working. Of course.”
The 35-year-old executive then offered a point of comparison, describing how hard he worked when he was young.
“When I had my first business when I was 19, I was in the gym at 6am in the morning, and I finished at 10.30 at night, and I did it seven days a week, and I did it until I could afford my first home. There was no discussions around, could I go out for breakfast, could I go out for dinner. I just worked.”
Gurner is not the first to suggest that young people’s love of avocado toast was making it harder for them to buy homes. Demographer Bernard Salt wrote in the Australian last year that if young people stopped going to “hipster cafes”, they could purchase property.
He wrote: “I have seen young people order smashed avocado with crumbled feta on five-grain toasted bread at $22 a pop and more. I can afford to eat this for lunch because I am middle aged and have raised my family. But how can young people afford to eat like this? Shouldn’t they be economising by eating at home? How often are they eating out? Twenty-two dollars several times a week could go towards a deposit on a house.”
Some compared Gurner’s comments to the recent controversial remarks of US congressman Jason Chaffetz, who suggested people struggling to afford health insurance should stop buying smartphones. “Maybe rather than getting that new iPhone that they just love and they want to go spend hundreds of dollars on that, maybe they should invest in their own healthcare,” he said.
Gurner’s spokesperson did not immediately respond to a request for comment.
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Real Estate & Housing
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The US says it will not "under any circumstances" pay reparations to developing countries hit by climate change-fuelled disasters.
Climate envoy John Kerry made the remarks at a Congress hearing before flying to China to discuss the issue.
Some countries want major economies - which produce the most greenhouse gases - to pay for past emissions.
A fund has been established for poorer nations, but it remains unclear how much richer countries will pay.
Mr Kerry, a former secretary of state, was asked during a hearing before a House of Representatives foreign affairs committee whether the US would pay countries that have been damaged by floods, storms and other climate-driven disasters.
"No, under no circumstances," he said in response to a question from Brian Mast, the committee chair.
He was speaking days before he was due to travel to Beijing to meet with officials to discuss issues around climate change, including plans for this year's UN climate conference, COP28, which will take place in Dubai, in the United Arab Emirates, in November.
At last year's conference - COP27 in Egypt - more than 200 countries agreed to create a loss and damage fund, which will be financed mainly by developed nations before the money is distributed to "particularly vulnerable" nations.
Although the agreement was billed as one of the major successes of the summit, there are still many details that need to be ironed out, including how much richer nations will pay and how money will be distributed. A series of meetings have been taking place this year aimed at addressing these issues.
Developing nations - which are disproportionately impacted by climate-related impacts - have called for guaranteed compensation from developing countries, who they say are historically responsible for climate change through their high emissions of greenhouse gases.
Richer countries recognise the need to contribute greater funds towards the issue, but framing the payments as reparations is controversial, with some claiming it is a divisive term.
Developing countries also argue that finance targets to address the issue of climate change are too low.
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Energy & Natural Resources
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More than one in five Britons have cut their pension contributions or stopped paying in altogether as the cost of living crisis forces households to make difficult decisions, according to a study.
The research coincides with the head of one of Britain’s biggest fund managers, Abrdn, calling for a doubling of minimum pension contributions for millions of workers in order to avert a “very real” retirement incomes crisis.
With real wages falling and bills rising sharply, millions of people have been looking for ways to reduce spending and boost their incomes, with some concluding that they cannot afford to save for retirement at the moment.
According to a UK survey by the investment platform Hargreaves Lansdown, 22% of people have either stopped (14%) or cut back (8%) on pension contributions during the cost of living crisis.
Men were more likely to have done this than women, the firm said.
Younger people are more likely to have cut, or stopped, their contributions than older people. Almost a third of the 18-34 age group had done this, compared with one in five 35- to 54-year-olds.
The insurer Scottish Widows has said its research indicated that 35% of people were not on track for even a minimum retirement lifestyle, as defined by one of the main pension bodies, which meant they were at risk of struggling to afford basics such as food and heating when they were older.
Helen Morrissey, the head of retirement analysis at Hargreaves Lansdown, said: “Rising prices have made balancing budgets a real struggle, and it’s no surprise that, after making all the cuts they can elsewhere, people are turning their attention to their pensions.”
While it made sense that people who were struggling were prioritising the here and now, it was vital that they resumed their pension contributions as soon as they were able to, she added.
For the past decade, the UK’s “auto-enrolment” regime has required all employers automatically to enrol eligible workers into a workplace pension, which the worker and employer pay into. Under auto-enrolment, at least 8% of the worker’s pay goes into their pension pot, made up of 3% from the employer, 4% from the employee and 1% tax relief from the government.
However, Stephen Bird, the Abrdn chief executive, warned that the minimum 8% of salary figure was not “anywhere near enough”.
He said: “To have any chance of achieving decent retirement outcomes, the contribution rate needs to double – taking it closer to the levels seen in other developed economies.
“There is a very real crisis brewing for millions of individuals in the coming decades in terms of an inadequate income in retirement.”
The TUC has previously said some workers were going a step further and opting out of workplace pension schemes entirely because they cannot afford the payments. Experts say this is almost always a bad idea as it means people are missing out on free money from their employer and investment growth.
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Personal Finance & Financial Education
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After plunging into the political mainstream, Italy's far-right leader Giorgia Meloni is now shocking markets and upsetting big business
- Europe's main banking index dropped some 2.7% on Aug. 8 after Italy announced it would impose a 40% windfall tax on banks.
- Airlines have been nervously awaiting other policy measures, with a new government plan to curb prices when flying to certain destinations.
- Italy's government debt-to-GDP stood at 144.4% in 2022, according to data from the International Monetary Fund.
After plunging into the political mainstream and winning over her more moderate counterparts in Brussels, hardline Italian Prime Minister Giorgia Meloni is now shaking things up on home soil.
Europe's main banking index dropped some 2.7% on Aug. 8 after Italy announced it would impose a 40% windfall tax on banks. The surprise move, which clearly caught traders off guard, was toned down within 24 hours.
Airlines have rebuffed other policy measures, with a new government plan to curb prices when flying to certain destinations. The Italian government is meeting airline executives next month and the European Commission, the executive arm of the EU, is already assessing whether the measure would comply with EU law.
Meloni was elected in October and, as well as being the country's first female PM, is also the first from a far-right party since the end of World War II. So far during her mandate, Meloni has largely fallen in line with mainstream political positions at home and abroad, despite concerns from some that she may push her country to the fringes. She has not been at odds with officials at the European Union, for example. She has also made sure Italy has been a key supporter of Ukraine in the wake of Russia's invasion of Ukraine, despite the fact that some of her cabinet members have had close ties to the Kremlin.
Federico Santi, a senior analyst at consultancy Eurasia Group, told CNBC via email that her backtrack on the windfall tax "was a major misstep, in perception and substance."
"This poorly-thought through measure was an abrupt reminder that Meloni's government is mainly made up of right-wing populist parties, with a track record of erratic economic policy-making," Santi said, adding however that he expects Meloni to "stay the course" on the fundamental aspects of government policy.
Erik Jones, a professor at the European University Institute in Italy, told CNBC he didn't believe this was a more "populist" government than that witnessed over the past year, with Meloni and her finance minister, Giancarlo Giorgetti, trying to spend without running up huge deficits.
"On fiscal policy, even in the absence of binding EU rules, which remain suspended, the government has made efforts to continue a gradual fiscal adjustment, in line with EU recommendations – i.e. by keeping the deficit and debt on a, slowly, declining path and avoiding broad-based expansion that could feed inflation," Eurasia Group's Santi said.
Italy's government debt-to-GDP stood at 144.4% in 2022, according to data from the International Monetary Fund. That's expected to drop to 140.5% this year and then again to 138.8% in 2024. The Italian economy is seen growing at a rate of 1.1% this year and 0.9% in 2024, according to the IMF. This represents a fall from the 3.7% gross domestic product registered in 2022.
Despite the general expectation that the Italian government is unlikely to go down any more controversial avenues, analysts have mentioned two events that international investors should keep a close eye on.
"Investors should worry about the turmoil that is likely to surround this upcoming budget. There will be a lot of room for controversy that will create volatility. But I do not think that the basic policy will change or that the government will collapse," Jones from the European University Institute said.
Governments across the EU have to submit their budgetary plans for the new year in October so the European Commission can assess whether they comply with EU rules. In the past, this process has raised tensions between Brussels and Rome.
For others, however, the major risk is a delay in receiving certain EU funds.
"This is a key factor underpinning public investment and growth through 2026, with important knock-on effects on the fiscal outlook," Santi said.
The EU funds in question were agreed to at the height of the Covid-19 pandemic given the tumult and slowdown across the European economy. Italy's the biggest beneficiary of the 750 billion euro program ($814 billion) given that its economy was the worst hit by the pandemic and resulting lockdowns. However, disbursements only happen after nations put forward certain measures and reforms.
The sheer volume of funds could make a critical impact on Italy's economy.
"These delays are, for the most part, not the government's own making, and Meloni remains intent on meeting NextGenEU commitments on paper — but external issues, high input costs, supply chains strain; and serious administrative shortfalls and bottlenecks will increasingly prevent the government from meeting its investment targets," Santi added.
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Amazon is seeing some employees quit instead of moving to a new state as part of relocation mandate
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Putin says ready to end war 'unleashed by West'; Russian Danube attack destroys 13,000 tons of grain
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After plunging into the mainstream, Italy's far-right PM is shocking markets and upsetting business
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American workers are demanding almost $80,000 a year to take a new job
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Mortgage demand from homebuyers drops to a 28-year low as interest rates soar
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Europe Business & Economics
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A husband and wife duo have scrapped entry fees for their play centre in what they say is a UK first in a bid to help families amid the cost of living crisis. Andy and Ruth Lancey, owners of an educational play centre - The Hideaway - noticed footfall drop this winter as they found parents were cutting back to be able to heat their homes and put food on the table. The couple, who have two children of their own aged seven and 10, felt compelled to help out struggling mums and dads in their community of Partington in Trafford, Greater Manchester, and switched to a 'pay what you can' model to alleviate pressures some families face. The honest system relies on those more fortunate to make a higher donation, which in turn allows others to pay a smaller sum or nothing at all, visiting for free. Andy Lancey says it was 'in their hearts' to help those in their local community (
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Saffron Otter) Concerns have been raised about the socialisation and development of 'lockdown babies', who were stuck at home for around 18 months from 2020. The same fears now apply in 2023 to young children whose parents can't afford to take them to local facilities, seeing them missing out on experiences. In just a week after being introduced on January 16, Andy, 46, has already noticed an increase in people coming through the door, with parents and guardians now able to spend time at the facility who otherwise wouldn't have been able to. “It feels a little bit scary but we just believe this is what we need to do," the general manager told the Mirror. "Whatever you say about whichever Government is in, local people doing stuff where they are is most effective - we know the local people and what they need. "We've had regulars cut down their trips - even people who would consider themselves as having more money, they're still being affected by it [cost of living crisis]. The team saw a drop in footfall amid the cost of living crisis this winter (
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Saffron Otter) "People are cutting down and when you have huge energy bills, something's got to give, so that's coming to a play centre when compared to heating or food. "But from the children's point of view, toddlers being able to come here is really important. "A lot of children have missed out in Covid and now there is potential for them to miss out because of the cost of living crisis so it keeps on affecting their development. "It's in our heart to provide that for them and enable them, ensuring there's no barrier against any family being able to bring their children here. "We've already seen people come back that felt they couldn't be here before." The Hideaway offers a number of play areas for children (
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The Hideaway) Helping others in the community is why Andy and Ruth decided to open The Hideaway in 2018 - a not-for-profit social enterprise which achieved charity status with the name 'Hidden Treasure Trust' last September. They previously owned a travel firm, but wanted to give something back after they found there wasn't much for families to do in their area, apart from toddler groups at their church. Their Christian faith plays a big part in their desire to help others, Andy says, and they provide much more than the play centre. While it boasts a sensory room, a roleplay town with different shops, a craft area, a soft play frame, a sports area, and a cafe, there is a multitude of parental classes and courses. The building also houses the Hope Centre - a community hub where families can pick up a bag of food items from £3.50 at their Pantry, receive advice and support, visit the community cafe open for anyone, and shop for their children at 'Hidden Treasure Clothing' - which provides second-hand school uniforms. And there clearly is a need, as on the day the Mirror visited The Hideaway, 200 parents checked in. Parents can a ulso econd-hand uniforms at discounted prices (
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Saffron Otter) One mum, Hannah, who is a full-time student and lives in Partington, says the new payment system is life-changing for someone like her. She has a newborn baby and visits with her sister and nephew once a week, but will now visit twice a week. With no maternity pay available, Hannah, who wished not to disclose her full name, says the new initiative is so important. "I struggled to pay every time I came. With people struggling at the minute, I think it's really helpful because you donate what you can afford, which opens it up to so many people," she said. "The fact I can come and make a donation and enjoy it is so helpful. It is life-changing for some people." Friends Rachel Holland and Daisy Hart visited with their children for the first time on Monday after seeing a post on Facebook about the new payment method, and travelled 40 minutes from north Manchester. Rachel says it is important for her little girl, three, to be able to get out and socialise as she was a 'lockdown baby' and with the minimal entry fees, it means she doesn't have to restrict what they can eat or drink in the cafe, she adds. Amanda, who wished not to disclose her surname, has a 20-month-old daughter and likes to visit the centre on her days off on Monday. "I think it's a really good scheme," she said. "I'm a week before payday so I can pay what I can whereas I might have said to my friends 'I can't afford it' before." Natasha Brown, who has a two-year-old daughter, agrees that it's the way forward. Natasha's daughter playing at The Hideaway (
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Saffron Otter) "It's much more accessible, these soft plays can be really costly," the mum-of-one said. "It's such a great space and it's really important for her to mix and see other people and have this space, we don't have this big space at home. "It's more affordable and I can give more if and when I can". Ben Summers, 39, who is the only dad at the play centre at the time of visiting, says because he's in a more fortunate financial position than others, he donated £10 to spend a few hours at the play centre. He would usually come around once a month, but is now encouraged to come more often, knowing that he's helping others by doing so. The dad of a two-year-old girl said: "I'm happy it's funding other people to come. "If they asked me for more I probably would have paid more. This is still good value and helping others, which is really important and the fact it has a food bank and clothing, I think it's fantastic. "I probably will come more now that I know I'm supporting other people." Andy says they're always reacting to help those in need and amid lockdown rules in 2020 and 2021, adapted the Hope Centre - which has 700 members - to run with volunteers delivering groceries and around 50 hot meals a day. Trafford Council saw the invaluable work of the charity, and helped them roll out five other hubs across the borough with support from Trafford Housing Trust and other partners, in response to the covid 19 pandemic and now provides food and support to struggling families. 700 families are signed up to the Hope Centre to receive support with their food shop, among other things (
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Saffron Otter) The dad of two also says it's not just about providing for those in the community, but also helping locals gain employment, with 80 per cent of their workforce from Partington. He admits the new system might be an 'outrageous' business model, but believes it will work in the long run, with more people able to visit, and more being spent in the cafe. It currently costs around £10 per visitor to keep the facility running, so they hope those that can afford to pay a higher rate will choose to do so. "We felt that by making it free, slightly outrageous from a business perspective, we just felt like this could actually be something that would bring people in and when people come in, they have the option to donate, so people can come and it's free and they're absolutely can do that. "From our own experience, when we go to some sort of attraction, we often don't buy a lot in the cafe with big entrance fees, saying to the kids 'you can't have that', but if you've not paid anything to come in, you might potentially spend more in the cafe. "There are some people that have got the finances and come from all over Greater Manchester and what we've seen so far in the donations is that people are wanting to give more than the original price we had before. "For now, most people are giving something. It's a redistribution of costs." Andy reckons it's a sustainable business model to operate this way (
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The Hideaway) Andy also says that the traditional payment method wasn't sustainable amid their own energy costs to run the place, which he says are massively increasing. The change might be a risk, but Andy has made a promise to locals that their facility is open to everybody. "Our heart was very much for the local community here, it's on their doorstep but people weren't able to access it because of their finances. We didn't want it to be a barrier. "The afterschool trade had really dropped off where you'd normally have a lot of local people. We want to encourage that again. "Our Christian faith plays a big part in believing it will work." The 'pay what you can' policy is available from Monday to Friday with a minimum donation of £5 per child payable on Saturdays. Pre-booking is highly recommended via the website at www.thehideawaymanchester.com. From Monday January 23, The Hideaway is open from 8am for Early Risers and closes at 6pm. Do you have a cost of living story to share? Please get in touch at webfeatures@trinitymirror.com Read More Read More Read More Read More Read More
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Consumer & Retail
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Convenience An Important Factor While Selecting A Sweep Account
A sweep account service promises flexibility, but there are a few things you should take into account...
Banks are now trying to get customers to use sweep accounts to ensure that they retain money with the bank as these accounts enable the investor to earn higher returns. However, investors should not just look at the headline numbers and expect this to be their returns.
It is important for them to look at several factors that will impact the way their money is handled and the convenience it generates.
Understanding Sweep Accounts
A sweep account provides the benefit of a savings account as well as a fixed deposit without additional effort.
The sweep facility involves the balance in the savings account beyond a certain limit being converted into a fixed deposit. This enables a higher rate of earning on the money transferred to the fixed deposit. The investor can use the full amount in the account for their various spends and if the amount used is more than the figure lying in the savings account, then the fixed deposit will be used for the payment.
The benefit of this is that everything is done automatically and seamlessly. At the same time, the investor does not have to pay a penalty for the breakup of the fixed deposit before maturity as they would have to do normally. This ensures that at the end of the day the investor has higher earnings from their money.
Minimum Amount
The first factor to see when looking at a sweep account is the minimum amount over which the money in the account will flow to the fixed deposit. The higher the minimum amount for the account, the less the benefit for the account holder because a larger amount will lie in the savings account, which earns a lower rate of return.
Sometimes, the bank fixes a very high figure as the minimum amount, which ensures that the benefit for the account holder goes down. For example, if the minimum amount above which the transfer has to be made is Rs 20,000, then this is far better than an account where the minimum amount required is Rs 1 lakh. If the total balance in the account is Rs 1.5 lakh, then in the first account, Rs 1.3 lakh will be in the fixed deposit, while in the second account, it will be just Rs 50,000.
Period Of Fixed Deposit
The period for which the fixed deposit is made is crucial because this will determine the earning for the investor. This period will actually determine the ceiling or the maximum return that the account holder will earn. For example, it is common for these types of accounts to transfer the money to a fixed deposit of one year. This means that the rate of interest on the one-year deposit will be applicable, but the catch is that this will be applicable only if the money is held for a period of one year.
The moment the money in the account is used, the fixed deposit is broken and when this happens, the interest rate of the period for which the deposit was held will be applicable. So, if part of the money is taken out after three months, the interest rate earned on this money will be the interest rate applicable for a three-month deposit and not the one-year rate.
Minimum Breakage Of Deposit
The amount for which the fixed deposit is broken when the money is used in the savings account is very important. The lower the amount for which the deposit is broken the better it is as the remaining amount remains as the fixed deposit.
For example, if a bank has fixed Rs 1,000 as the amount of breakage of the deposit and Rs 4,500 needs to be transferred from the fixed deposit to the savings account, then Rs 5,000 will be the amount of fixed deposit broken. If the same figure is fixed as a minimum of Rs 10,000, then in this case, Rs 10,000 would be transferred.
Selection
A sweep account is a beneficial product, especially when a person is keeping large amounts in their savings account. The best thing is that once the account is set up, the entire transactions take place automatically and there is no need for any intervention either at the time of transfer of the amount to the fixed deposit or the return of the money to the savings account.
It is also important to not get influenced just by the rate being touted in promotions because it is likely that when the money is used earlier, then the actual rate earned is lesser than this. Being realistic and knowing the workings will help in ensuring that the real benefit of the account is received.
Arnav Pandya is founder Moneyeduschool
The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.
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Banking & Finance
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(Bloomberg) -- Not so long ago, families, businesses and governments were effectively living in a world of free money.
Most Read from Bloomberg
The US Federal Reserve’s benchmark interest rate was zero, while central banks in Europe and Asia even ran negative rates to stimulate economic growth after the financial crisis and through the pandemic.
Those days now look to be over and everything from housing to mergers and acquisitions are being upended, especially after 30-year US Treasury bond yields this week punched through 5% for the first time since 2007.
“I struggle to see how the recent yield moves don't increase the risk of an accident somewhere in the financial system given the relatively abrupt end over recent quarters of a near decade and a half where the authorities did everything they could to control yields,” said Jim Reid, a strategist at Deutsche Bank AG. “So, risky times.”
The importance of Treasuries helps to explain why the bond-market move matters to the real world. As the basic risk-free rate, all other investments are benchmarked against them, and as the Treasury yield rises, so that ripples out to broader markets, affecting from everything from car loans to overdrafts to public borrowing and the cost of funding a corporate takeover.
And there’s a lot of debt out there: According to the Institute of International Finance, a record $307 trillion was outstanding in the first half of 2023.
There are lots of reasons for the dramatic bond-market shift, but three stand out.
Economies, especially the US, have proved more robust than anticipated. That, along with the previous dollops of easy money, is keeping the fire lit under inflation, forcing central banks to jack up rates higher than once thought and, more recently, stress that they’ll leave them there for a while. As recession fears have ebbed, the idea that policy makers will have to quickly reverse course – the so-called pivot – is fast losing traction.
Finally, governments issued a lot more debt — at low rates — during the pandemic to safeguard their economies. Now they have to refinance that at a much costlier price, sowing concerns about unsustainable fiscal deficits. Political dysfunction and credit rating downgrades have added to the headwinds.
Put all these together and the price of money has to go up. And this new, higher level portends major changes across the financial system and the economies it feeds. Some money-market funds and even bank deposits are now offering a 5% handle. The German 10-year yield is at the highest since 2011, while even Japan’s is at a level not seen in a decade.
Housing Market Pain
For many consumers, mortgages are the first place that dramatic moves in interest rates really make their presence felt. The UK has been a prime example this year. Many who took advantage of pandemic-era stimulus to take out a cheap deal are now having to refinance, and are facing a shocking jump in their monthly payments.
As a result, transactions are falling and house prices are under pressure. Lenders are also seeing a rise in defaults, with one measure in a Bank of England survey rising in the second quarter to the highest level since the global financial crisis.
The mortgage-cost squeeze is a story playing out everywhere. In the US, the 30-year fixed rate has surpassed 7.5%, compared with about 3% in 2021. That more-than-doubling in rates means that, for a $500,000 mortgage, monthly payments are roughly $1,400 extra.
Government Pressure
Higher rates mean countries have to shell out more to borrow. In some cases, a lot more. In the 11 months through August, the interest bill on US government debt totaled $808 billion, up about $130 billion from the previous year.
That bill will keep going up the longer rates stay elevated. In turn, the government may have to borrow even more, or choose to spend less money elsewhere.
Treasury Secretary Janet Yellen this week said yields are something that’s been on her mind. Adding to the market tensions, the US has been in the throes of yet another political crisis over spending, threatening a government shutdown.
Others are also trying to deal with bloated deficits, partly the result of pandemic stimulus. The UK is looking to limit spending, and some German politicians want to reinstate a ceiling on borrowing known as the debt brake.
Ultimately, as governments try to be more fiscally responsible, or at least give that impression, the burden falls on households. They’re likely to face higher taxes than otherwise along with suffering financially strained public services.
Stock Market Risk
US Treasuries are considered one of the safest investments on the planet, and in the last decade or so the rewards for holding them were modest given suppressed yields. As they now approach the 5% mark, these bonds are looking much more attractive than risker assets, such as stocks.
One metric under close scrutiny is the equity risk premium, the difference between the earnings yield of the S&P 500 index and the 10-year Treasury yield, which is a way of gauging the attractiveness of stocks versus other assets. That stands near zero, the lowest in more than two decades, implying that stock investors aren’t being rewarded for taking on any additional risk.
Ian Lyngen, head of interest-rate strategy at BMO Capital Markets, cautioned on Bloomberg Television this week that if the 10-year hit 5%, that could prove an “inflection point” that triggers a broader selloff in risk assets such as stocks. “That’s the biggest wildcard.”
Read More:
Why UK Mortgages Are Especially Exposed to Rate Hikes
Why US Deficit Is a Worry Again, and Will Remain So
Companies Squeezed
Companies spent the last decade raising cash at really cheap rates, basing their business models on the assumption that they’d have access to markets if they needed more money. That’s all changed, but most firms raised so much when rates were near zero that they didn’t need to tap markets when the hiking cycle began.
The problem now is “higher for longer.” Weaker companies that had been relying on their cash cushions to make it through this period of higher funding costs may be forced to tap markets to deal with a wall of debt that’s coming due. And if they do, they’ll need to pay almost double their current debt costs for cash.
Such strains could mean corporates have to scale back investment plans or even look for savings, which may translate to job losses. Such actions, if widespread, would have implications for consumer spending, housing and economic growth.
The changed world will also be a test for some of the newer corners of funding, such as private credit, which has yet to show how it would handle corporate defaults.
Deals Drought
Higher rates have negatively impacted banks' willingness to back large mergers and acquisitions over the last 18 months, with lenders fearful of being left with debt on their books that they can't sell on to investors.
This has led to a steep fall in leveraged buyouts, a lifeblood of healthy M&A markets. Global transaction values stood at $1.9 trillion at the end of September, Bloomberg-compiled data show, leaving dealmakers on course for their worst year in a decade.
Private equity firms have been particularly affected, with the value of their acquisitions falling 45% this year to about $384 billion, the second consecutive year of double-digit percentage declines.
In the absence of cheap debt to help boost returns, some firms, including giants like KKR & Co., have been writing bigger equity checks to get deals done, while others have been opting for minority stake purchases. At the same time, PE firms have found it harder to sell assets, leading to delays in returning money to investors and impacting their ability to raise new funds.
Office Debt Timebomb
Commercial real estate is a sector heavily reliant on borrowing vast sums, so the jump in debt costs is poison for the sector. Higher bond yields have slammed valuations on properties as buyers demand returns that offer a premium over the risk free rate.
That’s bumped up loan-to-value ratios and increased the risk of breaching debt terms. Borrowers face the choice of injecting more equity, if they have it, or borrowing more at costlier rates.
The other option is to sell properties into a falling market, creating more downward pressure on prices and in turn causing more trouble for finances.
Compounding all of this is the structural shift that's hitting offices, as changing work habits and rising environmental regulations combine to make swathes of real estate's biggest sub-sector obsolete, echoing the downturn that's already pummeled malls.
While a broader turmoil could emerge from anywhere, it’s worth noting that property crises have frequently been the germ for a wider banking crisis.
Pensions Hit
Lately, both bonds and stocks have been going down. That’s not ideal for defined-benefit pension funds that tend to use the classic 60/40 strategy, of 60% equities and 40% bonds.
But once Treasuries trough, the new, higher rates that they offer could prove an attraction to many current retirees. A gauge of inflation-adjusted yields this week surpassed 2.40%, which is a whole lot better than the negative 1% seen as recently as last year. Amid a cost-of-living crisis, positive real return would be welcomed by many.
If higher yields are good because they improve funding positions, steep rises can throw up unexpected problems. That was the case in the UK last year, when a shock government budget announcement brought mayhem to the gilt market, hitting pension schemes using so-called liability driven investments. Those trades typically use leverage to help funds match assets with liabilities and got slammed by margin calls after a bond selloff.
Other pension funds have also been caught out by higher rates. Sweden’s Alecta was hit by a local real-estate slump because of its investment in heavily indebted landlord Heimstaden Bostad. It also lost lost 20 billion kronor ($1.8 billion) on failed bets in US lenders, including Silicon Valley Bank.
Central Banks Aren't Wavering
Amid the market ructions, central bankers aren’t showing signs that they are wavering and ready to rush in to save the day.
That’s because Fed Chair Jerome Powell and his counterparts around the world have been focused on trying to slow their economies to a sustainable speed in order to get sky-high inflation down. There’s a risk that the slowdown becomes too pronounced, but for now, central bankers seem set in their position.
“Investors have tried to price this Fed pivot so many times,” said Johanna Kyrklund, co-head of investment at Schroder Investment Management. “The Fed has actually been very consistent in saying they are in no rush to cut rates, so maybe we should just listen to what they are saying.”
She likens the bond selloff to the bursting of the dot-com bubble two decades ago, when some “fundamental assumptions had to be revisited.”
“The same has happened with the bond market,” Kyrklund said. “New ranges are required and the last two years have been about bond investors getting used to that fact and accepting that we’re not going back to what was true the last 10 years.”
--With assistance from Steven Arons, Silas Brown, Constantine Courcoulas, Dana El Baltaji, Alice Gledhill, Loukia Gyftopoulou, Tom Metcalf, Giulia Morpurgo, Fareed Sahloul, Damian Shepherd, Tasos Vossos and Francine Lacqua.
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.
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Interest Rates
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Many retirees plan to earn extra income to supplement their retirement spending. But how much can a retired person earn without paying taxes? The answer to this question varies based on your situation. Understanding the tax rules surrounding retiree income can help avoid an expensive surprise when tax time rolls around. If you need help sorting through the details of your situation, try using SmartAsset’s free financial advisor matching tool.
When Does a Retiree’s Income Trigger Taxes?
Retirees who are still working likely have at least two streams of income: Social Security benefits and a paycheck from a job. The Social Security benefits you receive can be taxable if 50% of your benefits, plus all of your other income, is greater than the specific limits for your filing status. These amounts are as follows:
Single filers, qualifying widowers and heads of households bringing in more than $25,000, based on the math above, may have to pay taxes on their Social Security benefits.
Married couples filing separately that have lived apart for an entire year who bring in more than $25,000, based on the math above, may have to pay taxes on their Social Security benefits.
A married couple filing jointly bringing in more than $32,000, based on the math above, may have to pay taxes on their Social Security benefits.
With that, the benefits you receive may or may not be taxable based on your other income. For example, let’s say that you are a single filer that received $20,000 in Social Security benefits. Additionally, you earned $20,000 at a part-time job. When you run the numbers, 50% of your benefits plus your other income would be $30,000. With that, Uncle Sam would require you to pay federal taxes on a portion of your Social Security benefits.
As another example, let’s say a married couple filing jointly receives Social Security benefits of $20,000. You also bring in $20,000 through other sources. With that, 50% of your benefits plus your other income would be $30,000. That’s less than the base amount for married couples filing jointly. So, you wouldn’t have to pay federal income tax on any of your Social Security benefits.
Take the time to run the numbers on your unique situation to find out how much you can earn before you are taxed on that income.
How Will Your Social Security Be Taxed?
If a portion of your Social Security benefit is taxable, there’s no avoiding the federal income tax. But you won’t pay taxes based on your entire Social Security benefit. Instead, you will pay taxes on 50% or 85% of your total Social Security amount.
If you’re a single filer with an income between $25,001 and $34,000, you’ll pay taxes on 50% of your Social Security benefits. But as a single filer who has a total income of more than $34,000, you’ll pay taxes on 85% of your Social Security benefits.
Married couples filing jointly with an income between $32,001 and $44,000, you’ll pay taxes on 50% of your Social Security benefits. But as a married couple filing jointly that has a total income of more than $44,000, you’ll pay taxes on 85% of your Social Security benefits.
Exceptions to This Rule
Every rule has an exception. In this case, filers in certain states need to be aware of their state’s tax requirements.
There are 12 states that tax Social Security benefits. These include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont and West Virginia. However, almost every one of these states allows for some kind of deduction, credit or income limit to minimize the tax burden at a state level.
New Mexico doesn’t provide a way to minimize the burden. Instead, you’ll pay state taxes on all of the Social Security income taxed at a federal level.
Can Retirees Ever Stop Filing Taxes?
Filing your taxes is often an unwelcome chore. In some cases, there may be a point in your golden years when you can stop filing and paying taxes altogether. So how much can a retired person earn without paying taxes or even filing their taxes? For retirees 65 and older, here’s when you can stop filing taxes:
Single retirees who earn less than $14,250
Married retirees filing jointly, who earn less than $26,450 if one spouse is 65 or older or who earn less than $27,800 if both spouses are age 65 or older
Married retirees filing separately who earn less than $5
Retired heads of household age who earned less than $20,500
Retired qualifying widowers who earned less than $26,450
For those with an income below the listed thresholds, you may not have to pay taxes. But even if you don’t have to file your taxes, it’s usually your best interest to file anyways. That’s because you might qualify for a tax return, which could represent a big boost for your budget.
If you aren’t sure whether or not you can stop filing taxes, the IRS has a helpful tool to help you find out. But talk to a financial advisor before deciding to skip filing your taxes. It could mean missing potential benefits.
Bottom Line
Retirement can be expensive. But depending on your income, you may be able to save on tax costs. It is possible to earn money during retirement and not have to pay taxes on the earnings. Just be aware of what the limits are, given your own situation. Also, check in with the tax code changes regularly because there are frequent changes to the rules.
Retirement Tax Planning Tips
Consider working with a financial advisor as you coordinate your earnings with your tax planning. 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.
Our income tax calculator can help you understand marginal and effective tax rates and your annual tax liability.
Photo credit: ©iStock.com/RainStar, ©iStock.com/Ridofranz, ©iStock.com/georgeclerk
The post How Much Can a Retired Person Earn Without Paying Taxes? appeared first on SmartAsset Blog.
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Personal Finance & Financial Education
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People with mobility and mental health problems will be asked to work from home or lose benefits as part of what a UK government minister described today as doing “their duty”.
The policy will be set out on Wednesday as part of the autumn statement amid a drive by Rishi Sunak to make changes to the welfare system, which he described on Monday as “unsustainable”.
Hundreds of thousands of people will be told to look for work that they can do from home or face having their benefits cut by £4,680 a year, under plans that were first reported by the Times.
Laura Trott, chief secretary to the Treasury, told Sky News: “Of course there should be support for people to help them into work but ultimately there is a duty on citizens if they are able to go out to work they should. Those who can work and contribute should contribute.”
Earlier, she told Times Radio the government’s plans were “not just about forcing people out”. She added: “It’s saying we’re going to put the right mechanisms around you to help you with that. But ultimately, you have to engage with that, and that is an obligation on you as a citizen to do this. And if you don’t do this, we will look at sanctions.”
There was strong criticism from charities. Ayla Ozmen, the director of policy and campaigns at the anti-poverty charity Z2K, described the plans as “rushed and ill-thought-out”.
“There is no evidence to support the idea that there are fully remote jobs available that are suitable for these groups,” she said.
“This is simply a cut for those of us who become seriously ill or disabled in the future and need the support of social security, and risks worsening people’s health and pushing them further from work.”
Sarah White, the head of policy at the national disability charity Sense, said: “Everyone should be able to work if they want to and can, but this latest government move looks sets to punish disabled people, adding more anxiety on to disabled households that are already struggling.”
Details of the policy will be set out by the Department for Work and Pensions (DWP) after consultations by the government some months ago about Work Capability Assessment (WCA).
Trott also went further than Sunak or Jeremy Hunt when asked if the autumn statement would go beyond business tax cuts. Asked if the chancellor would be cutting taxes for individuals, she told the BBC’s Today programme: “That is where the focus is.”
“In broad narrative terms this is a big moment for us, for people at home, because inflation has halved. We know how difficult it has been and it will mean important things for the household budget.”
Charities have already warned that DWP plans to tighten health-related benefits – which are provided to more than 3 million working-age adults in the UK – could cause “huge anxiety” and mean “sanctions” for disabled people.
Campaigners have also said that welfare changes could lead to many losing out on almost £400 a month in support. Tony Wilson, the director of the Institute for Employment Studies, told the Guardian in September that extra support to help disabled people into work should not come with such stringent conditions.
Speaking on Monday in London about the plans to make changes to benefits, the prime minister said : “We believe in the inherent dignity of a good job. And we believe that work, not welfare, is the best route out of poverty.”
“Yet right now, around 2 million people of working age are not working at all. That is a national scandal and an enormous waste of human potential. So, we must do more to support those who can work to do so.
The number of people on health-related benefits has risen by a quarter since the eve of the Covid pandemic. Most of these are in the limited capability for work-related activity (LCWRA) group, who receive the additional £390.06 a month.
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Workforce / Labor
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Nearly half of UK adults ages 50-70 who retired in first two years of pandemic are in poverty: report
Almost half of older adults living in the United Kingdom who left the workforce in the first two years of the COVID-19 pandemic fell into poverty, new research from the Institute for Fiscal Studies (IFS) and the Joseph Rowntree Foundation (JRF) found.
Forty-eight percent of those ages 50-70 entered poverty after retiring in 2020 or 2021, a higher rate than retirees in the UK before the pandemic and bucking the trends of lower overall poverty since 2020.
“Our analysis challenges the perception that exits into inactivity over the pandemic were driven by wealthy individuals who could afford to retire in comfort, and suggests that many individuals were ‘forced’ into early retirement at the start of the pandemic,” IFS researcher Xiaowei Xu said.
In 2019 the poverty rate for recent retirees was 36 percent in the country, according to the research.
Those older retirees were also more likely to have a lower quality of living than those who retired a few years earlier. The study found that 2020-2021 retirees spent less on food and were less likely to receive a pension than earlier retirees as well.
“This suggests that many older workers who left the workforce in the first year of the pandemic were not retiring in comfort,” Xu said.
The comfort levels of retirees since 2021, like amount spent on food and pension levels, returned to about pre-pandemic figures. That signals that the 2020-2021 cohort of retirees is exceptional, researchers said.
“This research shows many older workers were swept out of work by the coronavirus pandemic rather than this being a positive choice,” JRF Chief Analyst Peter Matejic said. “Supporting people back into employment should be a priority for the government alongside ensuring that those who aren’t working can afford the essentials.”
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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United Kingdom Business & Economics
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A nonprofit has suspended the use of a chatbot that was giving potentially damaging advice to people seeking help for eating disorders. Tessa, which was used by the National Eating Disorders Association, was found to be doling out advice about calorie cutting and weight loss that could exacerbate eating disorders. The chatbot’s suspension follows the March announcement that NEDA would shut down its two-decade-old helpline staffed by a small paid group and an army of volunteers. NEDA said yesterday that it has paused the chatbot, and the nonprofit’s CEO, Liz Thompson, says the organization has concerns over language Tessa used that is “against our policies and core beliefs as an eating disorder organization.”The news plays into larger fears about jobs being lost to advances in generative artificial intelligence. But it also shows how harmful and unpredictable chatbots can be. As researchers are still grappling with rapid advances in AI tech and its potential fallouts, companies are rushing a range of chatbots into the market, and real people are put at risk. Tessa was paused after several people saw how it responded to even the most straightforward questions. One was Alexis Conason, a psychologist who specializes in eating disorders. In a test, Conason told Tessa that she had gained a lot of weight recently and really hated her body. In response, Tessa encouraged her to “approach weight loss in a healthy and sustainable way,” advising against rapid weight loss and asking if she had seen a doctor or therapist. When Conason asked how many calories she should cut a day to lose weight in a sustainable way, Tessa said “a safe daily calorie deficit to achieve [weight loss of 1 to 2 pounds a week] would be around 500-1000 calories per day.” The bot still recommended seeing a dietitian or health care provider. Conason says she fed Tessa the kind of questions her patients might ask her at the beginning of eating disorder treatment. She was concerned to see it give advice about cutting added sugar or processed foods, along with cutting calories. “That’s all really contrary to any kind of eating disorder treatment and would be supporting the eating disorder symptoms,” Conason says. In contrast to chatbots like ChatGPT, Tessa wasn’t built using generative AI technologies. It’s programmed to deliver an interactive program called Body Positive, a cognitive behavioral therapy-based tool meant to prevent, not treat, eating disorders, says Ellen Fitzsimmons-Craft, a professor of psychiatry at Washington University School of Medicine who worked on developing the program. Fitzsimmons-Craft says the weight loss advice given was not part of the program her team worked to develop, and she doesn’t know how it got into the chatbot’s repertoire. She says she was surprised and saddened to see what Tessa had said. “Our intention has only been to help individuals, to prevent these horrible problems.” Fitzsimmons-Craft was an author of a 2021 study that found a chatbot could help reduce women’s concerns about weight and body shape and possibly reduce the onset of an eating disorder. Tessa is the chatbot built on this research.Tessa is provided by the health tech company X2AI, now known as Cass, which was founded by entrepreneur Michiel Rauws and offers mental health counseling through texting. Rauws did not respond to questions from WIRED about Tessa and the weight loss advice, nor about glitches in the chatbot’s responses. As of today, the Tessa page on the company’s website was down. Thompson says Tessa isn’t a replacement for the helpline, and the bot had been a free NEDA resource since February 2022. “A chatbot, even a highly intuitive program, cannot replace human interaction,” Thompson says. But in an update in March, NEDA said that it would “wind down” its helpline and “begin to pivot to the expanded use of AI-assisted technology to provide individuals and families with a moderated, fully automated resource, Tessa.” Fitzsimmons-Craft also says Tessa was designed as a separate resource, not something to replace human interaction. In September 2020, she told WIRED that tech to help with eating disorders is “here to stay” but wouldn’t replace all human-led treatments. But without the NEDA helpline staff and volunteers, Tessa is the interactive, accessible tool left in its place—if and when access is restored. When asked what direct resources will remain available through NEDA, Thompson cites an incoming website with more content and resources, along with in-person events. She also says NEDA will direct people to the Crisis Text Line, a nonprofit that connects people to resources for a wide range of mental health issues, like eating disorders, anxiety, and more. The NEDA layoffs also came just days after the nonprofit’s small staff voted to unionize, according to a blog post from a member of the unit, the Helpline Associates United. They say they’ve filed an unfair labor practice charge with the US National Labor Relations Board as a result of the job cuts. “A chatbot is no substitute for human empathy, and we believe this decision will cause irreparable harm to the eating disorders community,” the union said in a statement. WIRED messaged Tessa before it was paused, but the chatbot proved too glitchy to provide any direct resources or information. Tessa introduced itself and asked for acceptance of its terms of service multiple times. “My main purpose right now is to support you as you work through the Body Positive program,” Tessa said. “I will reach out when it is time to complete the next session.” When asked what the program was, the chatbot did not respond. On Tuesday, it sent a message saying the service was undergoing maintenance. Crisis and help hotlines are vital resources. That’s in part because accessing mental health care in the US is prohibitively expensive. A therapy session can cost $100 to $200 or more, and in-patient treatment for eating disorders may cost more than $1,000 a day. Less than 30 percent of people seek help from counselors, according to a Yale University study. There are other efforts to use tech to fill the gap. Fitzsimmons-Craft worries that the Tessa debacle will eclipse the larger goal of getting people who cannot access or clinical resources some help from chatbots. “We’re losing sight of the people this can help,” she says.
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Nonprofit, Charities, & Fundraising
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Ousted CNN boss Jeff Zucker made his another foray back into the news business by agreeing to pay $1.4 billion to snap up a bankrupt British publishing group on Monday.
Zucker’s investment group RedBird IMI will take control of the Telegraph and Spectator publications under a deal to repay the debt owed by the Barclay family to Lloyds Banking Group.
International Media Investments, the investment vehicle backed by Manchester City owner Sheikh Mansour bin Zayed Al Nahyan, will also be involved in about half of the deal’s debt financing, the company said.
Lloyds Banking Group seized the UK newspaper group last summer.
RedBird IMI said if the deal were to go forward, it intended to exercise an option to convert debt into ownership of the newspaper group at “an early opportunity”.
If Lloyds agrees to the proposal, the deal will mark the end of the Barclay family ownership of the national newspapers after two decades.
The lender asked a court in the British Virgin Islands to adjourn until early December a hearing that could have liquidated the last of the Barclay family’s holding companies, according to a Financial Times report Monday.
The outlet reported that it is still proceeding with a separate auction process to sell the newspaper as well as sister publication the Spectator magazine.
As part of the deal, Abu-Dhabi-backed IMI would be left with a significant debt holding in the last remaining major business assets owned by the Barclay family. This includes the Very retail and financial services group, Financial Times said, citing sources familiar with discussions.
The deal will be structured as a roughly $750.3 million loan secured against the Telegraph and Spectator. IMI will provide a loan of a similar amount secured against other Barclay family businesses and commercial interests.
RedBird would then have an option to convert the loan secured against the Telegraph and Spectator into equity.
Any transfer of ownership will be the subject of regulatory review, however.
Assuming everything goes as planned, RedBird Capital will take over management and operational responsibility for the titles under the leadership of RedBird IMI chief executive Zucker, the company said.
“RedBird IMI are entirely committed to maintaining the existing editorial team of the Telegraph and Spectator publications, and believe that editorial independence for these titles is essential to protecting their reputation and credibility,” a rep for RedBird IMI told the PressGazette.
“We are excited by the opportunity to support the titles’ existing management to expand the reach of the titles in the UK, the US and other English-speaking countries,” the rep added.
The statement is meant to assuage fears of influence of the United Arab Emirates on the British newspapers. Recently, a group of Conservative Members of Parliament, writing to Culture Secretary Lucy Frazer and Deputy Prime Minister Oliver Dowden urging “close scrutiny” of the deal.
In a letter first published in Bloomberg, they wrote over the weekend: “Material influence over a quality national newspaper being passed to a foreign ruler at any time should raise concerns, but given the current geopolitical context, such a deal must be investigated.”
The deal will end months of speculation over a sale to potential bidders, which have included Lord Rothermere’s Daily Mail and General Trust, David Montgomery’s National World, German publisher Axel Springer (before it pulled out) and GB News investor Sir Paul Marshall.
The Barclay brothers Sir David and Sir Frederick bought the Telegraph and Spectator titles from Conrad Black in 2004 for $1.3 billion.
Lloyds Banking Group seized the titles from them in June.
Zucker, who was pushed out at CNN in 2022 after failing to reveal his relationship with a co-worker, has been on the hunt for deals. Last month, Zucker scooped up a minority stake in online newsletter Front Office Sports.
He had reportedly also been eyeing other media properties, including the Washington Post, Semafor, Puck and Air Mail — the media company founded by former Vanity Fair editor Graydon Carter.
He has yet to announce any deals with those properties.
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Consumer & Retail
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A renowned artist who painted both the King and Queen for their birthdays has been banned from forming companies for seven years after he wrongfully took out £50,000 in loans for a charity set up in his sister's memory.Darren Baker, who has also painted boxing legend Frank Bruno, received £45,000 from the Government's coronavirus Bounce Back Loan Scheme (BBLS) on behalf of The Leanne Baker Trust in October 2020.Mr Baker, originally from Meltham, West Yorkshire, then took out a further £5,000 in March 2021, according to The Insolvency Service.He had claimed the charity's annual turnover was £200,000, but its accounts for 2019 showed figures of just £26,029. The trust also had no overheads or employees, so under the rules of the scheme it wasn't actually eligible for the funding. Artist Darren Baker wrongly took out £50,000 for a charity set up in memory of his sister and has now been banned from forming any company for seven yearsThe artist, best known for painting a picture of Queen Elizabeth II for her 85th birthday and the now-King Charles for his 70th birthday, used £25,000 of the funding to pay off personal legal fees. He then used £13,000 for personal use.The Leanne Baker Trust, which was registered as both a charity and a company, was set up in 2014 after Mr Baker's sister, Leanne Baker, took her own life.Ms Baker, 35, was found dead by her fiance David Jackson at their home in Almondbury on 2 June 2013, shortly before their planned wedding date. A coroner concluded she died by suicide.The charity was set up to help others who, like Ms Baker, were struggling with depression. It initially hoped to set up a drop-in centre in Huddersfield for people who needed mental health support.The Leanne Baker Trust appointed a voluntary liquidator in September 2021. The liquidator reported the loan misuse and the amount loaned has since been recovered.Mr Baker, now based in Coventry, accepted he had caused the charity to obtain a loan it wasn't entitled to. Mr Baker is best known for painting this picture of Queen Elizabeth II for her 85th birthday. He also painted a portrait of the now-King Charles for his 70th birthday Mr Baker also painted this portrait of Prince Charles to mark the royal's 70th birthday The Secretary of State for Business, Energy and Industrial Strategy subsequently accepted a disqualification undertaking from him - effective from December 15 last year. Companies House records show Mr Baker, 46, resigned as a director of the company on the same date. Charity Commission records list the charity as insolvent.The seven-year ban means Mr Baker can't be involved in managing, forming or promoting companies without permission of the court either directly or indirectly.Rob Clarke, chief investigator at The Insolvency Service, said: 'Bounce Back Loans were offered to businesses that had been negatively impacted by the pandemic, with the money purely to be utilised for the economic benefit of those companies; safeguarding jobs and sustaining entrepreneurial activity.'That clearly was not the case in this instance where the funds have been claimed by a charitable enterprise, with negligible turnover, and no employees.'Despite the humanitarian purpose of the trust as established, Darren Baker took advantage of the support available during this difficult time for his own personal gain.'His disqualification should serve as a warning to others that the Insolvency Service will take action whenever a director's dishonesty threatens loss to the public purse, the consequence being a lengthy exclusion from trading with the benefit of limited liability.' Darren, pictured, had previously opened up about his own mental health struggles following the death of his sister. Mr Baker's sister, Leanne, 35, took her own life a week before her destination wedding almost a decade ago. The artists has previously spoken out about how his sibling was found dead at home in Huddersfield just days before the family was due to fly to Greece for her wedding to fiancé David Jackson, in June 2013.'One minute we were all looking forward to her Greek island wedding, the next we were planning her funeral,' he told FEMAIL in 2019. 'It felt unbelievably cruel.' Mr Baker Darren told how his sister had previously suffered from depression and that in the lead up to her wedding she had felt anxious about being the centre of attention on the big day. The artist, whose work sells for tens of thousands of pounds, also opened up about his own mental health struggles, admitting the world can seem 'black' even though he knows he has a 'wonderful life' with his wife Abigail and daughter Lily. A month before the nuptials, Leanne had taken an overdose in a suicide attempt and was admitted to hospital and later seen by mental health services. Darren Baker previously told how his sister Leanne, 35, pictured together, was found dead at home in Huddersfield just days before her destination wedding to fiancé David Jackson, in June 2013She was referred for home-based intensive treatment by a Community Psychiatric team who were in contact touch with her daily.He said: 'The day before Leanne died, I'd spoken to her on the phone and she was in very bad way. Her depression seemed to have really taken hold. 'I was very worried about her but my parents were with her, so I knew she was being well looked after by them and David.'On the day of her death, Leanne was left alone at home while David went out to see his mother. When he returned, he found his fiancée had hung herself. Darren continued: 'There are no words to describe the crushing loss we all felt afterwards. The sheer physical pain was unbearable. 'My parents had lost their daughter, David had lost the woman he thought he would spend the rest of his life with and I'd not only been robbed of my little sister, but my best friend too.'Darren is one of Britain's most collectible 21st century artists, with his work displayed in the halls of Downing Street and the House of Lords.
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Nonprofit, Charities, & Fundraising
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Fear, uncertainty, and doubt around Alameda Research’s relationship with his FTX cryptocurrency exchange caused Sam Bankman-Fried to consider shuttering the trading platform in 2022, according to an unpublished tweet thread revealed in his trial on Monday.
“Going forward, Alameda will continue to not do nefarious trading activity on FTX, because it won’t do any trades on FTX. Or anywhere else,” said Bankman-Fried in the unpublished posts. “Alameda Research is dead. Long live FTX.”
Concerns around the relationship of Bankman-Fried’s companies were too great to justify Alameda’s existence, according to the drafted posts, and the fallen crypto founder blamed FTX’s competitors for spreading that fear.
Sam Bankman Fried maintained in the thread that these concerns are not true. “I can say that until I’m blue in the face, but in the end I have to face reality: the PR cost is not worth it.”
Alameda Research had plans to remain active as an investor and infrastructure developer, according to the posts, while taking a step back as a general exchange liquidity provider.
The unpublished thread, made public by a former Alameda Research employee, came about in Sam Bankman-Fried’s trial. He’s been accused of orchestrating a large-scale fraud at FTX, which led to the evaporation of billions of dollars worth of customer funds.
Wednesday is the second day of testimony for Caroline Ellison, Alameda Research’s Chief Executive Officer, and former love interest of Sam Bankman-Fried. On Tuesday, Ellison pleaded guilty and claimed Bankman-Fried directed her to commit certain crimes, according to The New York Times.
The FTX collapse rocked the cryptocurrency ecosystem, causing a price crash from which the space has not fully recovered. Today, the price of Bitcoin hovers around $27,000, still depleted from the 2022 highs of $65,000 before the crash of FTX.
Ellison joins the ranks of other former FTX and Alameda executives, such as Gary Wang and Nishad Singh, who have agreed to cooperate with prosecutors in the case against SBF.
Coindesk published a report in November of 2022 casting doubt on the strangely close relationship between Bankman-Fried’s crypto exchange and trading platform, the first domino to fall in this collapse. It is unspecified when exactly this unpublished tweet thread was written, as well as the reasons for not posting and going through with the shuttering.
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Crypto Trading & Speculation
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Parliamentary Panel Asks Finance Ministry To Expeditiously Come Out With Common ITR Form
A parliamentary panel on Thursday asked the finance ministry to expeditiously come out with a common income tax return or ITR form to ease I-T return filing for individuals and non-business taxpayers.
A parliamentary panel on Thursday asked the finance ministry to expeditiously come out with a common income tax return or ITR form to ease I-T return filing for individuals and non-business taxpayers.
The ministry had in November last year proposed to come out with a user-friendly common income tax return form for all taxpayers, except trusts and non-profit organisations. It had invited stakeholder comments on the same.
The Standing Committee on Finance, chaired by Bharatiya Janata Party MP Jayant Sinha, had earlier flagged difficulties being faced by people in filing Income Tax returns and urged the tax department to make the process simpler and more taxpayer friendly.
It had said that any person with income from various sources, like salary, rent and business income, cannot file ITR on his own and has to seek advice of either a chartered accountant or a person having adequate knowledge and expertise in filing ITR.
In reply to the recommendations of the committee, the ministry has stated that in order to make tax compliance more convenient, pre-filled details of certain income, like salary, are being provided to individual taxpayers.
The scope of information for pre-filing is being further expanded by including information such as house property income, bank interest, dividends, the tax department said.
Further, it is proposed to introduce a common ITR form in tandem with international best practices, by merging all existing forms except ITR-7.
It is expected that the proposed ITR form brings ease of filing returns to individuals and non-business type taxpayers considerably.
"The committee, therefor, would expect the ministry to expedite the process and introduce the new format at the earliest," it added.
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Personal Finance & Financial Education
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A former contractor for the Internal Revenue Service was charged Friday with leaking tax information to news outlets about thousands of the country’s wealthiest people.
Charles Edward Littlejohn, 38, of Washington, DC, is accused of stealing the tax return information and giving it to two different news outlets between 2018 and 2020, the Justice Department said in a statement. Littlejohn declined to comment when reached by The Associated Press, which also left a message for his attorney, Lisa Manning.
The outlets are not named in charging documents, but the description and time frame align with stories about former President Donald Trump’s tax returns in The New York Times and reporting about wealthy Americans’ taxes in the nonprofit investigative journalism organization ProPublica.
The 2020 New York Times report found Trump paid $750 in federal income tax the year he entered the White House and no income tax at all some years thanks to colossal losses. Six years of his returns were later released by the then-Democratically controlled House Ways and Means Committee.
A message seeking comment was left for the newspaper.
ProPublica reported in 2021 on a trove of tax-return data about the wealthiest Americans. It found the 25 richest people legally pay a smaller share of their income in taxes than many ordinary workers do.
A spokesman for the outlet declined to comment on the charges, adding that ProPublica reporters have previously said they don’t know the identity of the source. The stories sparked calls for reform and for an investigation into the leak of tax information, which has specific legal protections.
Littlejohn is charged with one count of unauthorized disclosure of tax returns and return information. He faces up to five years in prison if convicted.
The IRS declined to comment specifically on the case, but Commissioner Danny Werfel said “any disclosure of taxpayer information is unacceptable” and the agency has since tightened security.
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Banking & Finance
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You are here: Home / Benefits and Poverty / Warning of ‘humanitarian crisis’ if governments fail to act on disability povertyThe UK and Scottish governments have been warned of a humanitarian crisis among disabled people this winter if they fail to take “robust, immediate action” to deal with “devastating and intensifying” levels of disability poverty in Scotland.
The warning was issued by the disabled people’s organisation Inclusion Scotland as it published the results of a survey on the cost-of-living crisis.
Disabled people in Scotland who took part in the survey – which was carried out before the onset of winter – reported cutting back on heating and food, and even avoiding charging their feeding pumps, while some worried about whether they would survive the colder months.
More than three-quarters (77 per cent) of disabled Scots who took part in the survey said they were going without or cutting back on essentials such as heating, food, clothing and travel.
And nearly two-thirds (64 per cent) said they were cutting down or going without things they used to manage their impairment or health condition.
One said: “Not having heating on and not using electric blanket or hot water bottles, all of which I would normally use to manage pain.”
Another said: “I only eat once a day and cannot afford to buy some food products that I should be eating.”
Inclusion Scotland carried out the survey last August and September and heard from nearly 170 disabled people.
One of those who responded said they now used the oxygen they needed to deal with respiratory failure only four days out of seven – their allowance per kilowatt was the same as it was five years ago.
They said: “I am using cylinders of oxygen instead of the actual machine. It’s not sustainable in the long term, I expect eventually I will have to use the electrical machine or die.”
Others reported cutting back on their use of incontinence products, therapy sessions, over-the-counter medication, or failing to replace independent living aids that have become “very worn or rusty”.
Many of those who responded several months ago also spoke of their fears as they approached the upcoming winter.
One respondent said: “I use a CPAP (continuous positive airway pressure) machine, every night. How am I going to afford it? My gas and electric account debit order was £54 per month. It’s now £163. Without the pump, I could stop breathing. Die.”
Another said: “Affording heating as my medical condition can be severe or even fatal in the cold.”
One said simply: “Dying.”
Another respondent answered: “Easy question, freezing to death or becoming so unwell because of the cold and being unable to afford using medical equipment so I end up in hospital.”
Susie Fitton, Inclusion Scotland’s policy manager, told Disability News Service: “Disabled people, already much more likely to be living in poverty in Scotland, are caught in the middle of this cost-of-living crisis and are facing this on top of the extra costs many already experience from simply living as disabled people.
“Policy-makers must engage with the reality of disability-related energy costs and the need to protect life.
“Disabled people need further help with energy bills, particularly those who need to use medical equipment or independent living equipment through targeted financial support or action on energy prices.”
She added: “The devastating and intensifying levels of poverty faced by disabled people in Scotland must be met with robust, immediate action by the UK and Scottish governments if we are to avert a humanitarian crisis for disabled people this winter.”
Among solutions suggested by the survey respondents were reducing energy and other bills, increasing disability and other benefits, reducing the cost of public transport, and cutting council tax.
The survey results also highlighted the impact of the cost-of-living crisis on disabled people’s mental health.
The report says: “Disabled people have limited resources and energy to deal with yet another crisis while still dealing with the impacts of the Covid-19 pandemic.
“As we have seen during the pandemic, the worry and uncertainty about the cost of living is taking its toll on mental health, with many disabled people worried about social isolation, mental health and how they will make it through the winter.”
One of those surveyed said: “It is causing depression, fear and constant anxiety. It’s impossible to have a ‘normal’ life.”
Another said: “I rarely go out now and have been turned into housebound due to fear of electricity bills to recharge wheelchair, let alone not being able to afford to travel or get a coffee while out so realistically you could say I’ve been forced to become a recluse and disappear from society which is maybe what they wish all disabled to become.”
Inclusion Scotland will now use the results to lobby those in power to do more to support disabled people in Scotland.
As well as longer-term action, it has called for an immediate “cash-first and rights-based approach which puts money in the pockets of those who are struggling”, but it says this must be done with the involvement of disabled people with lived experience of poverty and the cost-of-living crisis, and their organisations.
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Inflation
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Samuel Corum/AFP via Getty Images
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Fitch downgraded the U.S sovereign rating. The markets took the decision largely on their stride — but that doesn't make the decision inconsequential.
Samuel Corum/AFP via Getty Images
Fitch downgraded the U.S sovereign rating. The markets took the decision largely on their stride — but that doesn't make the decision inconsequential.
Samuel Corum/AFP via Getty Images
In the financial world, it's akin to the gold standard: AAA, three letters meant to denote the safest possible investment.
The U.S. had proudly held to that top-notch debt rating for decades, reflecting its status as the world's biggest — and safest — economy, one that has never defaulted on its debt obligations.
But on Tuesday, Fitch Ratings cut the U.S. debt by one notch, from AAA to AA+, partly in response to how the federal government handled the debt crisis two months ago. That move mirrored a similar downgrade by S&P in 2011, also following a debt ceiling standoff in Congress.
Fitch cited alarm over the country's deteriorating finances and expressed major doubts about the government's ability to tackle the growing debt burden because of the sharp political divisions, exemplified by the brinkmanship over the debt ceiling that brought the government close to a disastrous default.
Treasury Secretary Janet Yellen issued a blistering rebuke of Fitch's decision, The Dow Jones Industrial Average fell more than 300 points.
That's hardly a market meltdown, but that doesn't mean the downgrade is insignificant.
Here's a look at credit ratings, how they came into being, and why they matter.
What are credit ratings?
At its most basic, credit ratings are meant to denote how safe it is to invest in the debt issued by a country or a company, their creditworthiness.
The ratings are similar to the credit score familiar to anybody who has incurred any kind of debt, like on credit cards.
Drew Angerer/Getty Images
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President Biden meets to discuss the debt ceiling with House Speaker Kevin McCarthy in the White House in Washington, D.C., on May 22, 2023. Fitch cited concerns about the country's ability to govern as a key factor behind its U.S. downgrade.
Drew Angerer/Getty Images
President Biden meets to discuss the debt ceiling with House Speaker Kevin McCarthy in the White House in Washington, D.C., on May 22, 2023. Fitch cited concerns about the country's ability to govern as a key factor behind its U.S. downgrade.
Drew Angerer/Getty Images
And just like your personal score, a credit rating helps determine how much interest a country or company will need to pay when they sell a bond or a security.
The rating system is dominated by three major companies: S&P Global Ratings, Moody's and Fitch Ratings.
Although there are slight differences, all three issue ratings on a similar sliding scale that start with AAA as the top-rated investment, that goes all the way down alphabetically to D, which typically denotes a default.
How important are credit ratings?
Today, the credit ratings agencies have become deeply ingrained into the global financial system and are a critical part of bond markets worldwide.
Companies that want to sell debt generally need to get two credit ratings from established rating agencies, for example.
Still when it comes to investment decisions, ratings are just one factor. But they can make a difference, especially for developing countries.
Some investment funds, for example, will only buy debt rated above a certain rating.
How reliable are they?
This is where it gets dicey. While ratings remain an important part of the financial system, the agencies that issue them have come under a good deal of criticism.
During the 2008 Global Financial Crisis, a lot of the subprime mortgage bonds that went bust had been highly rated by the ratings agencies, exposing flaws in the system.
Regulations governing credit agencies were tightened in the aftermath of that crisis, but the system of rating debt remains largely the same.
The main thing to know is that credit ratings are subjective. They're an assessment by an agency — and opinions can differ.
Jemal Countess/Getty Images for the Peter G. Pe
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Pedestrians walk past a poster and electronic billboard about the national debt displayed ain street in Washington, D.C., on July 5, 2023. The U.S. last had a budget surplus in 2001. Since then it's seen its deficits surge.
Jemal Countess/Getty Images for the Peter G. Pe
Pedestrians walk past a poster and electronic billboard about the national debt displayed ain street in Washington, D.C., on July 5, 2023. The U.S. last had a budget surplus in 2001. Since then it's seen its deficits surge.
Jemal Countess/Getty Images for the Peter G. Pe
So what happens if the U.S. loses its AAA rating?
The first time it happened in 2011, the U.S. took it pretty badly.
The markets slumped (although they eventually recovered) and President Obama addressed the downgrade in a news conference, with then-Treasury Secretary Tim Geithner angrily denouncing the S&P decision as flawed
This time, the circumstances are similar, but the reaction so far has been more muted.
A key reason is that the reasons identified by Fitch — the "deterioration" of the country's finances, the growing debt burden and the "erosion of governance" — are now widely known.
Goldman Sachs, a top investment bank, put it bluntly on Wednesday: "The downgrade contains no new fiscal information," adding the projections given by Fitch were similar to their own.
And the country's sharp political divide has been evident for years now without any meaningful consequences in markets.
Most importantly, the dollar remains the world's top reserve currency. Investors all over the world, from other top central banks to pension funds, hold trillions of U.S. government debt, and that's unlikely to change simply because of Fitch's downgrade. The U.S. dollar is still seen as a safe haven.
"The downgrade should have little direct impact on financial markets as it is unlikely there are major holders of Treasury securities who would be forced to sell based on the ratings change," Goldman Sachs said.
But...there's still an impact
There's a reputational hit to the U.S., which explains Yellen's blistering rebuke of Fitch's decision.
Losing the AAA rating further removes the U.S. from a small group of countries that still maintain the top-notch rating from all three major agencies. The group of nine are Australia, Denmark, Germany, Luxembourg, Netherlands, Norway, Singapore, Sweden and Switzerland.
Jewel Samad/AFP via Getty Images
toggle caption
Then-President Obama speaks with Then-House Speaker John Boehner during a meeting about the debt ceiling at the White House on July 23, 2011 in Washington, D.C. S&P downgraded the U.S. rating for the first time days after both leaders clinched a deal to avoid a debt default.
Jewel Samad/AFP via Getty Images
Then-President Obama speaks with Then-House Speaker John Boehner during a meeting about the debt ceiling at the White House on July 23, 2011 in Washington, D.C. S&P downgraded the U.S. rating for the first time days after both leaders clinched a deal to avoid a debt default.
Jewel Samad/AFP via Getty Images
Moreover, the issues identified by the credit agency are still major risks facing the U.S.
Experts have long warned the U.S. faces serious fiscal challenges, including how to pay for Social Security and Medicare, as Fitch noted.
At the moment, investors continue to buy Treasuries because they still consider them to be the safest investments in the world.
But fiscal challenges continue to rise and the country's leaders remain as sharply divided as ever, as Fitch noted.
Those are real problems — and failure to reverse the country's surging deficits or bridge its political divisions — can have real critical consequences.
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Interest Rates
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U.S. debt in danger of downgrade by Moody’s as shutdown looms
The credit rating firm cited risks to the U.S. fiscal outlook — namely, higher interest rates “without effective fiscal policy measures to reduce government spending or increase revenues.”
Moody’s Investors Service on Friday put the U.S. government’s pristine credit rating on a negative outlook, raising the possibility of another downgrade of American debt.
The credit rating firm cited risks to the U.S. fiscal outlook — namely, higher interest rates “without effective fiscal policy measures to reduce government spending or increase revenues.”
“Continued political polarization within [the] US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability,” the firm added.
A lower debt rating raises the risk of higher borrowing costs for the federal government.
The warning comes as the government teeters on the brink of another shutdown next week and follows a move by Fitch ratings service just a few months ago to downgrade U.S. debt. Standard & Poor’s made a similar move more than a decade ago following an 11th hour showdown over raising the debt ceiling.
Deputy Treasury Secretary Wally Adeyemo blasted the move, saying the administration has “demonstrated its commitment to fiscal sustainability, including through the more than $1 trillion in deficit reduction included in the June debt limit deal as well as President Biden’s budget proposals that would reduce the deficit by nearly $2.5 trillion over the next decade.”
The White House placed the blame firmly on the GOP.
“Moody’s decision to change the U.S. outlook is yet another consequence of Congressional Republican extremism and dysfunction,” press secretary Karine Jean-Pierre said in a statement.
Rep. Andy Harris , a Maryland Republican and a member of the House Appropriations Committee, faulted “out-of-control government spending and deficits.”
Harris tweeted: “We cannot, in good conscience, continue writing blank checks to our federal government knowing that our children and grandchildren will be responsible for the largest debt in American history.”
The U.S. for now retains its “Aaa” rating, the highest possible creditworthiness for a borrower under Moody’s scale. The rating firm noted surprisingly strong economic growth in the U.S., which could slow the rise in its debt costs.
“The US’ institutional and governance strength is also very high, supported in particular by monetary and macroeconomic policy effectiveness,” it said.
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Interest Rates
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SAT Sets Aside SEBI Penalty Against Deccan Chronicle
It also reduced the penalty on the promoters from Rs 1.3 crore to Rs 65 lakh while affirming some of SEBI's findings against them.
The Securities Appellate Tribunal set aside on Thursday a SEBI order levying a penalty on Deccan Chronicle Holdings Ltd. for allegedly misrepresenting its books and deceiving its investors.
The SAT also reduced the Securities and Exchange Board of India's penalty on the promoters of the company from Rs 1.3 crore to Rs 65 lakh, while affirming some of the regulator's findings against them.
In March 2022, SEBI barred DCHL promoters T Venkattram Reddy, T Vinayak Reddy and PK Iyer from the securities market for one to two years for violating various provisions of the Prohibition of Fraudulent and Unfair Trade Practices and insider trading regulations between October 2011 and December 2012. It levied a penalty of Rs 4 crore on DCHL and Rs 1.3 crore each on the three promoters.
The news daily underreported the loan amounts, interest payments and financial charges in its books from 2008–09 to 2010–11 to mislead its investors. It understated its liabilities and overstated its profit, and later offered to buy back the shares at a price higher than the market price, only to deceive its investors, according to the market regulator.
SEBI also found that the promoters and directors had fraudulently pledged the company’s shares without adequate disclosures. The market watchdog had said it was unjust to put investors in the dark by providing false information about the company's business operations and actual revenue source.
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Stocks Trading & Speculation
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In an enforcement action announced on Monday, the Securities and Exchange Commission charged Los Angelesâ"based entertainment company Impact Theory with conducting an unregistered offering of securities via non-fungible tokens, or NFTs. From a report: As the SEC expands its definition of which types of crypto assets qualify as securities, the case breaks new ground by determining that NFTs fall under the agency's jurisdiction. "Absent a valid exemption, offerings of securities, in whatever form, must be registered," Antonia Apps, director of the SEC's New York Regional Office, said in a statement.
The question of whether NFTs qualify as securities has remained open for several years. Before the SEC weighed in, a lawsuit in the U.S. District Court for the Southern District of New York remained the highest-profile case to tackle the issue, with a group of NFT collectors suing Dapper Labs. The plaintiffs alleged that the crypto firm had earned hundreds of millions of dollars by selling unregistered securities. Although Dapper Labs motioned for the case to be dismissed last year, a judge ruled in February that it could move forward, concluding that it was "plausible" NFTs could qualify as securities.
The question of whether NFTs qualify as securities has remained open for several years. Before the SEC weighed in, a lawsuit in the U.S. District Court for the Southern District of New York remained the highest-profile case to tackle the issue, with a group of NFT collectors suing Dapper Labs. The plaintiffs alleged that the crypto firm had earned hundreds of millions of dollars by selling unregistered securities. Although Dapper Labs motioned for the case to be dismissed last year, a judge ruled in February that it could move forward, concluding that it was "plausible" NFTs could qualify as securities.
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Crypto Trading & Speculation
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US Treasury Jacks Up Bill Sales to Kickstart Borrowing Spree
The US Treasury Department on Tuesday boosted the size of its shortest tenor benchmark bill auctions to rebuild its cash buffer to be more in line with its policy and finance larger deficits.
(Bloomberg) -- The US Treasury Department on Tuesday boosted the size of its shortest tenor benchmark bill auctions to rebuild its cash buffer to be more in line with its policy and finance larger deficits.
Treasury said it plans to sell $67 billion of three-month bills Monday, $2 billion more than the previous offering at that tenor. It lifted the size of its six-month operation to $60 billion from $58 billion, and the one-year sale to $40 billion from $38 billion. It also announced a $5 billion increase in the size of the 6-week auction to be sold on Tuesday, taking it to $55 billion.
Even though the Treasury boosted the size of its quarterly bond sales for the first time in 2 1/2 years to help finance a surge in budget deficits, the government still needs to finance itself, which it can do by quickly ramping up bill supply. In addition, the market has shown that it has the capacity to easily digest the deluge of T-bills as spreads relative to overnight index swaps remain tight.
In the wake of Washington’s agreement in June to suspend the debt limit until 2025, the Treasury issued roughly $799 billion in securities on net through the end of July, in order to replenish its cash balance. So far, investors have easily digested the first wave of supply, with money-market mutual funds taking up roughly two-thirds of the issuance.
The Treasury Borrowing Advisory Committee told Secretary Janet Yellen it’s comfortable with T-bill supply taking a larger share of total outstanding debt before returning to the recommended 15% to 20% range, in order to maintain a regular and predictable approach to increasing coupon issuance.
The Treasury increased its net borrowing estimate for the July through September quarter to $1 trillion, well up from the $733 billion amount it had predicted in early May. Part of the higher estimate is due to a bigger cash balance planned for the end of September. The cash balance was $458 billion as of Aug. 1, which is less than the Treasury’s revised forecast of $650 billion.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Bonds Trading & Speculation
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The company, BST & Co. CPAs, says the former New York City mayor hired them to help value his business assets during his 2018 split from ex-wife Judith Nathan, then never paid a dime of the agreed-upon $10,000 retainer. Now, after five years of trying to get their money, they’re suing the apparently flat-broke Giuliani in a last-ditch attempt to collect—plus another $15,000 in legal fees.
The lawsuit, which was filed Monday and obtained by The Daily Beast, adds an additional layer of pain to Giuliani’s already-crushing financial woes.
In September, Giuliani’s long-time lawyer sued him for $1.4 million in unpaid bills—a stunning move that shows just how Giuliani’s friends and associates are dropping like flies. Bob Costello, a former federal prosecutor who hailed from the same Manhattan U.S. Attorney’s Office once led by Giuliani, had previously considered himself fiercely loyal to the former mayor. They tried to create a controversial backchannel to the Trump White House. They teamed up for years to dig up dirt on President Biden’s son, Hunter Biden. They battled the Jan. 6 Committee together.
In response, Giuliani paid Costello pennies on the dollar.
Other debts were more prosaic, such as a long-unpaid $30,000 phone bill racked up by Giuliani Partners, the consulting firm Rudy founded in 2002 after leaving the mayor’s office. The company was hauled into court last April over those charges and was later found in default.
And yet, Giuliani’s coveted position as a devout follower of quadruple-indicted former President Donald Trump has actually given him access to tap the golden stream of MAGA dollars. In September, Giuliani’s son Andrew touted how the former president was hosting a $100,000-a-plate “Dinner With America’s Mayor” at his estate in Bedminster, New Jersey.
But the latest lawsuit shows that the hits keep coming—and they’re not even new.
BST and Giuliani signed a retainer agreement in April 2018, which laid out the precise rates the firm would be charging for its services related to his “pending matrimonial action.” Partners earned hourly rates between $410 and $575, senior managers got $335 to $400, managers and senior analysts were billed out at $185 to $275, and “other department staff” came in at $100 to $180.
During the divorce proceedings, Giuliani estimated his monthly expenses at $232,000.
One detailed invoice from BST shows how three accountants and one fraud examiner at the firm combed through Giuliani’s finances beginning in November 2019, together racking up 42 hours of work over a few weeks while they reviewed a year’s worth of American Express bills, examined 15-year-old tax returns, and scrutinized the assets he had shortly after leaving the mayor’s office. That invoice showed that Giuliani was already behind by $36,125, and the additional work jacked up the total bill to $50,833.
BST sent numerous demand letters—filed in court as exhibits alongside the firm’s complaint—to the former federal prosecutor. Giuliani ignored them all, according to the lawsuit.
“As you know, our retainer agreement is very specific with respect to payment terms,” said the first, sent in Oct. 2021. “You are in breach of that agreement and, accordingly, we must again insist on immediate payment of the balance due.”
A second demand letter warned Giuliani that BST was prepared to refer his account to collections if he didn’t make good on the debt.
“It is not our desire to undertake such a distasteful course of action and we have been patient to this point, but your continued disregard of your obligation to this firm can no longer be tolerated,” the letter said. “We thank you in advance for your immediate attention to this matter.”
A third letter, sent Aug. 9, 2023, opened simply, “Dear Mr. Giuliani: This is an attempt to collect a debt. Any information will be used for that purpose.” It gave Giuliani exactly 30 days to dispute the charges in writing or pay up.
According to the lawsuit, he never did. And Giuliani’s foot-dragging means he now owes more than double the original cost.
Giuliani spokesman Ted Goodman did not respond to The Daily Beast’s requests for comment on Tuesday. A message sent to the law firm BST hired to collect the debt from Giuliani went unanswered.
This isn’t the first time Giuliani has been accused of stiffing the people who helped him sort through his divorce from Nathan, the nurse he was married to for nearly 16 years.
In August 2020, art adviser and TV personality Miller Gaffney sued him for $15,700, claiming that Giuliani never paid her for the work she’d done—appraising the estranged couple’s art collection to figure out how to fairly split it. She claimed she had demanded Giuliani pay the bill nine times over nearly a year before finally deciding to sue.
Gaffney dropped her lawsuit two months later after Giuliani didn’t even bother to file any court papers in response.
For Giuliani, it’s only getting worse from here. There’s another massive bill on the horizon—and potentially some prison time, too.
Giuliani has lost a defamation case in the nation’s capital before it even goes to trial, as a Washington federal judge has already decided that the disgraced former mayor spread vicious lies about two Georgia poll workers in his conspiracy-laden attempt to reverse Trump’s election loss in 2020. Giuliani is now begging the judge to not put the matter to a jury for a damages-only trial, asking her to instead make the decision herself.
Meanwhile, the guy who once took all the credit for dismantling the New York mob is facing his own criminal racketeering case in Fulton County, Georgia for trying to overturn the election there on Trump’s behalf. The case is looking increasingly dire for the many co-defendants left, given that several MAGA insiders have already flipped, including lawyer Kenneth Chesebro and Sidney Powell.
And as if that’s not enough, Giuliani keeps cycling through defense lawyers in Atlanta. After one withdrew from the case, a second one just last month tried to drop out as well. All of them, presumably, expect to get paid.
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Banking & Finance
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Keeta, a new startup developing an instant and secure way to make cross-border payments, raised $17 million in funding from a group of investors led by former Google CEO Eric Schmidt. The investment values the company at $75 million, according to Ty Schenk, founder and CEO of Keeta.
Schenk has been a software engineer since his teenage years, and much of his work prior to starting Keeta was building PayPal-like experiences in the cryptocurrency world. That kicked off his idea for the company and he started working on it in 2021.
Schenk explained that a traditional cross-border payment, for example, between the U.S. and Brazil is slow, and it’s difficult to calculate how much it will cost. The money may go through three or four “stops” at various banks before reaching the intended party. At each bank, there is a transfer fee collected and the money is verified, which could take a whole business day to complete.
“With Keeta, we want to make international payments as easy as Venmo,” Schenk told TechCrunch. “We want to make it very simple, very fast and we want to send your money where it’s going so you don’t have to worry about it.”
The team at Keeta built its platform from the ground up so it controls the whole process within its system. Fintechs and financial institutions can access Keeta via APIs or custom integrations.
The core technology is a proprietary ledger capable of processing more than 50 million transactions per second — something Schenk says is already operational — and a network of interconnected real-time payment rails. Thus, the company is able to offer money transfers across borders in seconds and for 50% to 70% less than the cost of traditional options, Schenk said.
Keeta’s strategy to fix cross-border payments is not new, in fact, it joins a crowded landscape of fintech companies developing similar approaches, like Stripe and PayPal, but also startups. For example, last week, NomuPay raised $53 million for its unified payments platform. Others, like Tazapay, Airwallex, Routefusion, UPI and PayNow, are also working on global platforms.
Schenk said payment transaction provider SWIFT is more closely related to his company, However, he noted that while Swift is “the de facto international wire,” it caters more to high-value payments, those over $1 million. Keeta’s target is payments under $1 million, which is an area with “a huge amount of opportunity,” Schenk added.
Meanwhile, Keeta launched Tuesday and is still in the very early stages of attracting customers. It is initially available by invitation in the U.S., Canada, Mexico, Brazil, the United Kingdom and the European Union. The company has several revenue streams planned, including transaction fees.
Next up, while the company is focused on business-to-business payment transfers, it plans to launch a consumer-facing mobile app to enable instant transfers between friends and family worldwide.
“The next three to six months will largely be focused on working with early customers, making sure that we have things in place for what they need and getting us in a position where we can scale,” Schenk said.
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Banking & Finance
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DHAKA/NEW DELHI, Nov 8 (Reuters) - Several clothing factory owners in global fashion manufacturing hub Bangladesh are asking clients that include H&M (HMb.ST) to help them pay for an almost 60% government-mandated hike in wages, well aware that weaker sales might stymie their efforts.
Following a week of deadly clashes between garment industry workers and police over pay, the government on Tuesday said the minimum wage would rise by 56.25% to 12,500 taka ($114) a month from Dec. 1, the first increase in five years.
A panel of factory owners, union leaders and officials agreed to the increase unanimously, said Siddiqur Rahman, the owners' representative. Low wages have helped Bangladesh become the world's largest garment exporter after China, but soaring fuel and power prices have added to the spiralling cost of living for people in this developing South Asian nation.
Speaking to Reuters on Wednesday, Rahman said the wage hike - which comes ahead of a January general election - could be a "disaster" for an industry that accounts for almost 16% of GDP and generates more than $40 billion a year in export receipts.
Bangladesh is home to more than 4,000 factories that supply global brands ranging from fast fashion retailers such as Zara-owner Inditex (ITX.MC) and Gap Inc (GPS.N) to the more upmarket Hugo Boss (BOSSn.DE) and Lululemon (LULU.O).
But like most makers of consumer goods, fashion retailers are grappling with high inventories and a slowing global economy, where shoppers in key markets are buying less as they feel the pinch. That has led to a 14% drop in Bangladesh's garment exports last month.
"The timing is not good," said Fazlul Hoque, managing director of Plummy Fashions and former president of the Knitwear Manufacturers & Exporters Association, about the wage hike.
"The industry is already struggling, order flow is slow, energy supply is not adequate and the overall economic situation is not good. In such a time, a big hike in wages certainly will be tough... but for workers, I agree it is a legitimate demand."
Hoque said the increase would add 5-6% to overall costs, a rise he and other factory owners have asked their clients to help shoulder by agreeing to higher rates. Labour accounts for 10% to 13% of their total costs.
He is not optimistic, however.
"In the past, we have seen that they increase only a bit, not enough to pay the extra cost," Hoque said. "There might be exceptions, but there are thousands of buyers, and not everyone will agree to cover the whole amount. There is no legal enforcement on the buyers."
Last month, several fashion brands including Abercrombie & Fitch (ANF.N), Adidas (ADSGn.DE), Gap, Hugo Boss, Levi Strauss (LEVI.N), Lululemon, Puma (PUMG.DE), PVH (PVH.N) and Under Armour (UAA.N) told Prime Minister Sheikh Hasina in a letter they were "committed to implementing responsible purchasing practices" to enable higher wages.
"We continue to recommend that the government of Bangladesh adopt an annual minimum wage review mechanism to keep up with changing macroeconomic factors," the letter said. In addition to the wage increase, the government has said that workers would be given a 5% annual increment.
Babul Akter, president of the Bangladesh Garment and Industrial Workers Federation, urged global brands to pay more, saying: "There could be some problems for the owners to cope with the increased salaries."
But Abdus Salam Murshedy, managing director of the Envoy Group that sells to Walmart (WMT.N), Zara and American Eagle Outfitter (AEO.N) among others, said buyers were unwilling to pay the "right price, the fair price" with major economies slowing and the wars in Ukraine and in the Middle East raising geopolitical concerns.
"Words from buyers are fine but when they place orders, they say there are many other competing suppliers, so you better do this, do that," said Murshedy, who is also a lawmaker from Hasina's Awami League party.
"The industry needs to be able to pay for its costs. If there is no industry, where will the workers work?"
($1 = 110.0000 taka)
Reporting by Krishna N. Das in New Delhi and Ruma Paul in Dhaka; editing by Miral Fahmy
Our Standards: The Thomson Reuters Trust Principles.
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Ministers being urged to crackdown on junk food with smoking-style restrictions
Britain's bulging waistline is costing nearly £100 billion a year and will ruin Rishi Sunak's plan to get the sick back to work, analysis suggests.
The country's obesity problem is making the nation 'sick and impoverished', the Government's former food adviser Henry Dimbleby says, with two-thirds of Brits overweight.
Ministers are being urged by Mr Dimbleby to crackdown on junk food by imposing smoking-style restrictions warning the figures are a 'disaster' and the NHS will 'suck the money out of the other public services'.
Obesity-related illness is estimated to be costing the NHS £19.2billion a year with productivity losses at around £15.1 billion.
The total cost is estimated to be a crippling £98billion with the added £63billion due to shorter, unhealthier lives, according to figures seen by The Times.
That figure is expected to expand by a further £10 billion over the next 15 years as the population gets older and could leave future governments 'crippled'.
The new figures have come to light after the Tony Blair Institute commissioned Frontier Economics to update analysis from 2020.
Hermione Dace, of the Tony Blair Institute, said: 'We need a fresh approach to give people real options, rebalancing the food system in favour of healthy, cost-effective choices and disincentivising profiteering from ultra-processed and junk food.'
A ban on junk food adverts after 9pm and buy one-get-one free deals on unhealthy foods has long been mooted but has been delayed until 2025.
A Department of Health spokesman insisted it was 'taking firm action to tackle obesity'.
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Consumer & Retail
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Shoppers bought less fuel and food in October as they were hit by rising living costs and poor weather, according to official figures.
The volume of products sold last month fell by 0.3% to the lowest level since February 2021 when large parts of the UK were in Covid lockdowns.
Retail sales had widely been forecast to grow in October.
The worse-than-expected data emerged as recent figures showed the UK economy was failing to grow.
Gross domestic product - the amount of the goods and services produced by the UK - flatlined between July and September and the Bank of England expects only subdued growth until 2025.
Next week, Chancellor Jeremy Hunt will make his Autumn Statement when he will set out the government's tax and spending plans and his strategy to grow the economy.
Commenting on the latest data, the Office for National Statistics said petrol and diesel sales may have been "affected by increasing fuel prices".
Demand for other goods was also lower, said the ONS.
"It was another poor month for household goods and clothes stores with these retailers reporting that cost of living pressures, reduced footfall and poor weather hit them hard," said Heather Bovill, deputy director for survey and economic indicators at the ONS.
During October, Storm Babet hit much of the UK resulting in "exceptional rainfall", according to the Met Office.
Fuel sales fell by 2% between September and Octobers with retailers reporting that "consumers were spending their money more cautiously, alongside the impact of bad weather".
Supermarkets said shoppers were buying more food, but specialist stores, such as butchers and bakers, recorded a decline. Sales of alcohol and tobacco also dropped, down 4.2% and 10.4%, respectively.
Retailers said shoppers "were buying cheaper products and prioritising important items".
The retail sector is heading into its most important trading period which includes Christmas.
Lisa Hooker, leader of industry for consumer markets at PwC, said: "We know from earlier in the year that in tough times consumers prioritise special events and family occasions, so retailers will be hoping that consumers are keeping their powder dry for a last minute Christmas spending surge come December."
Compared to last October, retail sales volumes were 2.7% lower.
The ONS also revised down its reading of retail sales in September to a drop of 1.1% after initially estimating a decline of 0.9%.
Recent figures showed that inflation - which measures the rate at which prices are rising - fell sharply to 4.6% in the year to October from 6.7%.It follows a long succession of interest rate rises by the Bank of England.
While raising rates can reduce inflation, it also affects economic growth by making it more expensive for consumers and businesses to borrow money.
Aled Patchett, head of retail and consumer goods at Lloyds Bank, said: "Another dip in sales suggests rising household costs remain at the forefront of consumers' minds, despite headline inflation easing in recent months.
"The rising cost of living remains a drag on consumers' discretionary incomes. Households continue to prioritise essential spending, particularly as falling winter temperatures push energy use up."
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Consumer & Retail
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Mahadev App Scam Probe: Dabur Group Denies Involvement After Mumbai Police FIR Report
The FIR was registered on Nov 7, based on a complaint filed by social activist Prakash Bankar.
Dabur Group owner Burman family has denied receiving any communication on a Mumbai Police first information report pertaining to their alleged involvement in the probe into the Mahadev betting app scam.
According to a report by ANI, Mumbai Police have registered a case against 32 people including Director of Dabur, Gaurav Burman and company chairman Mohit Burman in connection with Mahadev betting app under various sections of fraud and gambling.
“We have not received any formal communication on any such FIR. However, we have sighted the FIR which is being circulated to media houses," said a Burman family spokesperson. "The FIR is patently false and baseless. Nothing could be further from the truth than as wrongly stated in the FIR."
The FIR was registered on Nov. 7, based on a complaint filed by social activist Prakash Bankar.
The Burman family alleged the FIR is "nothing but a step provoked by vested interests in an attempt to block the acquisition of Religare Enterprises Limited by Burman Family."
"Curiously, the FIR comes at a time when the Burman Family has sought to increase its existing shareholding of 21.24% in Religare Enterprises and launched a legitimate open offer under the SEBI Takeover Code. As part of this the Burman Family brought to the notice of the Board and the regulators certain governance issues being perpetrated by Dr. Rashmi Saluja, the current Chairman," the statment said.
The Enforcement Directorate had recently filed a chargesheet against 14 accused in the case, including the promoters of the Mahadev betting app, Sourabh Chandrakar and Ravi Uppal. The chargesheet alleges that the accused laundered over Rs 6,000 crore through a network of shell companies and bank accounts.
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Banking & Finance
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En un nuevo golpe al sector de las criptomonedas, esta semana, la Comisión de Bolsa y Valores (SEC, por su sigla en inglés) demandó a dos de sus principales actores: el lunes la agencia presentó cargos contra Binance, la mayor plataforma de criptoactivos del mundo, y al día siguiente acusó a Coinbase, la única criptoempresa que cotiza en bolsa en Estados Unidos, de violar las leyes de valores.
El presidente de la SEC, Gary Gensler, desde hace tiempo ha insistido en que la mayoría de las criptomonedas son valores y, por lo tanto, entran dentro de la jurisdicción de la agencia. Muchos entusiastas de los activos digitales —entre ellos algunos reguladores y legisladores— afirman que Gensler se está excediendo.
Hay similitudes notables entre los casos de esta semana. La SEC acusa tanto a Binance como a Coinbase de operar bolsas de valores y vender activos digitales que, en su opinión, debieron haberse registrado. Sin embargo, en su demanda contra Binance, la SEC también acusa a su director ejecutivo, Changpeng Zhao, de fraude civil, mientras que en su caso contra Coinbase no alega fraude ni nombra como acusado al director ejecutivo de la empresa, Brian Armstrong.
Esto es lo que sabemos hasta ahora sobre las medidas enérgicas de la SEC contra las criptoactividades.
La SEC acusa a Coinbase de operar como un corredor no registrado.
La SEC señaló que Coinbase ganó miles de millones de dólares facilitando la venta de criptoactivos como una bolsa no registrada y privó a los inversores de importantes protecciones. La agencia ha argumentado que la mayoría de los criptoproductos no son distintos de las acciones, los bonos y otros valores, y que las empresas que los ofrecen deben registrarse en la agencia y realizar las divulgaciones correspondientes, como cualquier bolsa o correduría tradicional.
Coinbase y la SEC han sostenido una larga batalla pública sobre la postura de la agencia respecto a los activos digitales. El año pasado Coinbase le solicitó a la SEC que estableciera nuevas normas y en abril demandó a la agencia por no atender su petición.
La criptoempresa ha cabildeado en el Congreso y exigido una legislación. El director jurídico de Coinbase, Paul Grewal, testificó el martes ante la Comisión de Agricultura de la Cámara de Representantes sobre un proyecto de ley publicado la semana pasada que, según mencionó, volvería las normas “claras en la práctica, no solo en la teoría”. Grewal agregó: “La solución es la legislación, no los litigios”.
Binance está bajo fuego por una docena de cargos relacionados con valores.
A Binance se le acusa de canalizar miles de millones de dólares del dinero de sus clientes a una empresa separada que pertenece a Zhao. La SEC imputó tanto a Zhao como a la empresa, y acusó a Binance de otra docena de violaciones, incluyendo engañar a los inversionistas sobre la idoneidad de sus sistemas para detectar y controlar las operaciones manipuladoras.
Además de esos cargos, Binance, al igual que Coinbase, está acusada de operar una bolsa no regulada y emitir criptomonedas que, según la agencia, debieron registrarse como valores. Entre esas criptomonedas estaba su propio token, el cual cotiza como BNB, así como otros diez tókenes populares. Binance niega los cargos. El martes, la SEC le solicitó a un tribunal federal una orden de restricción temporal para congelar los activos estadounidenses de Binance.
La Comisión de Negociación de Futuros de Productos Básicos también acusó a Binance de violar las leyes de productos básicos en marzo.
¿Y qué hay de FTX?
Las acusaciones contra Binance por mala gestión de los fondos de sus clientes recuerdan en cierto sentido los cargos presentados a finales del año pasado contra la criptobolsa FTX y su fundador, Sam Bankman-Fried. No obstante, Bankman-Fried, a diferencia de Zhao, enfrenta cargos penales por fraude y conspiración, y también se le acusa de violar la ley de financiamiento de campañas.
Los fiscales afirmaron que Bankman-Fried había desviado miles de millones de dólares de fondos de clientes de FTX a su empresa de operaciones bursátiles, Alameda Ventures, y que Alameda había utilizado los fondos malversados para llevar a cabo apuestas arriesgadas y muy apalancadas.
¿Qué viene ahora?
Binance indicó que la SEC estaba intentando “definir de manera unilateral la estructura del mercado de las criptomonedas” con demandas mediáticas, y se comprometió a “defender nuestra plataforma con vehemencia”, escribió la empresa en una publicación en su sitio web el lunes.
De igual forma, Coinbase anunció su intención de contraatacar y seguir presionando al Congreso para que promulgue nuevas leyes. Las criptoempresas esperan que la criptolegislación ayude a eliminar la mancha de los escándalos recientes y legitime el sector, que se ha ganado una reputación de anárquico.
Sin embargo, no todos los legisladores consideran que el asunto sea urgente, y la regulación puede ser lenta. Las demandas podrían avanzar antes de que se apruebe algún proyecto de ley, con lo cual cuestiones que se debaten ferozmente quedarían en manos de los tribunales federales.
Desde la perspectiva del sector, esa vía indirecta podría resultar. La Corte Suprema ha mostrado disposición a limitar el poder de las agencias, y los criptocabilderos están muy conscientes de las implicaciones. En el próximo periodo, los jueces reconsiderarán una doctrina que en la actualidad exige a los tribunales dar más peso a la experiencia de las agencias, lo cual podría frenar más la autoridad administrativa.
“Estamos viendo la erosión potencial de uno de los principales dogmas de nuestra jurisprudencia y un posible cambio en el alcance de la autoridad de las agencias administrativas”, comentó Sheila, directora ejecutiva de Crypto Council for Innovation, un grupo de presión de Washington que representa a Coinbase y otras entidades. Warren agregó: “Va a ser una locura”.
c.2023 The New York Times Company
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Crypto Trading & Speculation
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There is speculation that the HS2 high-speed rail link between Birmingham and Manchester could be cancelled.
Another part of the previously announced route, between the East Midlands and Leeds, has already been scrapped.
What is HS2?
HS2 is a massive project intended to create high-speed rail links between London and major cities in the Midlands and North of England.
It will cost tens of billions of pounds and is aimed at cutting journey times and increasing capacity.
It's hoped HS2 will create jobs and grow the UK economy outside London.
But the project has faced delays and mounting concerns over the exact route and spiralling costs.
What routes will HS2 take?
HS2 was originally meant to connect London with Birmingham, Manchester and Leeds.
Work has already started on the first phase, linking London and the West Midlands.
But the Leeds leg was scrapped by the government in 2021 over concerns about the cost.
It was decided that existing routes would be upgraded for HS2 trains, instead of building new ones.
As costs for the project have ballooned, the government has refused to guarantee that part of the line.
In addition, the London end of the line was originally intended to run into Euston, a major train station close to the city centre.
But that is now on hold, due to spiralling costs, with rumours that it could be scrapped altogether.
Instead, trains will at first stop at Old Oak Common, a new terminus in the west of London.
Meanwhile, the 13-mile (21km) Golborne Link that had been due to connect HS2 and the West Coast Main Line in Cheshire and Greater Manchester has also been scrapped.
How long will HS2 journeys take?
Your device may not support this visualisation
The government says HS2 will cut Birmingham to London journey times from one hour 21 minutes, to 52 minutes.
HS2 would also take an hour off journeys from Manchester to London - from just over two hours to just over one hour - if this leg goes ahead.
Travelling from London to Leeds currently takes two hours and 13 minutes. Under the original HS2 plans it would have taken one hour and 21 minutes. The latest proposals mean it will take one hour and 53 minutes.
How much will HS2 cost and why is it so expensive?
The cost of the project, the biggest of its kind in Europe, has grown over the years.
The first estimate in 2010 was for about £33bn.
This had risen to £55.7bn by 2015, although this included the now-scrapped Leeds branch.
The government's most recent official estimate, excluding the cancelled Leeds leg, adds up to about £71bn.
But this was in 2019 prices, so it does not account for the spike in costs for materials and wages, for example, in recent months.
An official government review into the report in 2020 mentioned one estimate of £106.6bn, although this included the eastern leg.
Long-time HS2 critic Lord Berkeley, who was vice-chair of the review, has claimed the costs of HS2 are now more likely to be around £180bn.
Some £24.7bn has been spent on HS2 so far, as of February 2023.
When will HS2 open?
HS2 trains are due to carry their first passengers between Old Oak Common in London and Birmingham, between 2029 and 2033. HS2 had been due to link the cities by the end of 2026.
Euston station in the capital's centre is currently scheduled to open later, by 2035.
Currently, the stretches of line to Crewe and then to Manchester are due by 2034 and 2041.
How will HS2 changes affect the north of England?
The government has not said whether separate plans for Northern Powerhouse Rail (NPR) will go ahead if HS2 to Manchester is scrapped.
The scheme, between Leeds, Manchester and Liverpool, includes a mix of new and upgraded lines. It also uses a section of the HS2 line from Manchester Airport to Manchester Piccadilly, the city's main station.
Greater Manchester mayor Andy Burnham said scrapping the HS2 Birmingham to Manchester link from risked creating a "north-south chasm" as it "rips the heart" out of NPR.
What do environmental campaigners say about HS2?
The HS2 project says it could provide "zero carbon rail travel" and create new wildlife habitats along its route.
However, environmental campaigners and conservation organisations have objected.
Wildlife Trusts said the project will "destroy huge swathes of irreplaceable natural habitat and important protected wildlife sites", including 108 ancient woodlands.
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United Kingdom Business & Economics
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If you have $3 million to invest, you can safely and reliably earn anywhere from $3,000 to much as $82,500 a year in interest. If you are ready take more risk, you may earn more. But risk also means the possibility of lower returns or even losses. You can find a financial advisor to help you manage risk and get the most interest income from your $3 million.
How Much Interest $3 million Earns on Different Investments
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Generally speaking, the higher the return an investment offers, the greater the risk. Investments also differ in terms of liquidity, or how easily and quickly an investor can turn the investment into cash. Here are eight common choices:
Savings account. A savings account at a bank or credit union pays from 0.01% to 1% per year. At those rates, $3 million would earn from $3,000 to $30,000 in interest per year. Bank deposits are highly liquid and insured against loss by the Federal Deposit Insurance Corporation (FDIC), while the National Credit Union Administration (NCUA) insures credit union deposits. However, each account is only insured up to $250,000. So to invest the entire $3 million you would have to use several different financial institutions. You can identify top-earning savings accounts using SmartAsset’s online savings account comparison tool.
Money market account. Rates for these bank and credit union accounts currently range from about 0.6% to 1%, so $3 million could earn from $18,000 to $30,000 per year. Money market accounts are insured like savings accounts, but may pay more interest while also providing high liquidity and the ability to write checks and use other services.
Money market funds. Money market funds are currently paying seven-day yields of about 0.5%, so a $3 million investment would earn about $15,000 a year. You can buy money market funds at many banks but they are not insured against loss, although they are considered safe, conservative and liquid investments.
Certificates of deposit (CDs). These currently pay from 0.8% to 2.75% depending on maturity, which can range from 28 days to 10 years. This means a $3 million investment in CDs could earn from $24,000 to $82,500. Longer maturities pay the higher rates of interest. A jumbo CD that pays a somewhat higher interest rate is available for savers ready to deposit at least $100,000. CDs are less liquid than other insured deposits. If you withdraw your money early you may be charged a penalty.
Treasury securities. Bonds, notes and bills issued by the U.S. government are safe and pay interest every six months. They come in various maturities, allowing investors to purchase bonds that fit their time frames. Longer maturities pay higher rates. Mutual funds that invest in government securities provide greater flexibility, liquidity and diversity. However, government bonds are subject to price declines and most bonds and bond funds have produced negative total returns during the current cycle of inflation and rising interest rates. For instance, as of the end of the first quarter of 2022 shares in Vanguard Short-Term Federal Funds posted a one-year total return of negative 3.27%. This means an investment of $3 million would have lost $98,100.
Series I savings bonds. These U.S. Treasury securities are currently paying 9.62% annually, one of the highest yields available. Their government backing also makes them very safe. Investors can only buy a maximum of $10,000 of Series I bonds a year, plus another $5,000 worth if using a tax refund. An investment of $15,000 at 9.62% produces $1,443 in interest. However, you’ll have to put the rest of the $3 million to work elsewhere for the time being.
Corporate bonds. While less safe than Treasury securities, debt obligations from major corporations also tend to pay higher interest. Corporate bond interest rates vary widely depending on the stability of the issuer. Price for corporate bonds fluctuate, so total return including interest and value of the bonds is a key factor. Corporate bond funds offer diversified baskets of bonds from many different issuers than can help manage risk and improve return. However, as of mid-2022 the Bloomberg Global Aggregate Corporate Total Return Index has posted a one-year return of negative 9.62%, equal to a loss of $288,600 on a $3 million investment.
Municipal bonds. These debt instruments are issued by local governments to raise money to build roads and fund other improvements. While not as safe as Treasury securities, municipal bonds are free from federal income taxes and, often, state and local income taxes as well. Municipal bond funds let investors easily buy and sell diversified baskets of municipal bonds. The S&P Municipal Bond Index in mid-2022 had lost approximately 7.54% during the previous year, equal to a decline of $226,200 in the value of a $3-million investment.
Bottom Line
An investor with $3 million can earn from ranging from ordinary savings accounts to government-issued Series savings bonds. The rate of interest, safety and liquidity offered by these different investments differ widely.
Investing Tips for Beginners
A financial advisor can help you decide how to invest your $3 million for interest income. 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.
Before investing for interest, most advisors recommends that you pay off any high-interest debt you owe. At the same time, consider creating an emergency fund to allow you to cover unexpected expenses without dipping into your investment portfolio. You may be able to use any of the more liquid and safe interest-earning accounts for your emergency fund.
Photo credit: ©iStock.com/Pekic, ©iStock.com/AndreyPopov, ©iStock.com/wichayada suwanachun
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Banking & Finance
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Scotland seeing slowest increase in destitution due to Scottish Child Payment
Destitution is increasing much more slowly in Scotland than in the rest of the United Kingdom due to the impact of the Scottish Child Payment and other welfare spending, a leading anti-poverty charity has said.
Wales, London, and the Middle East are seeing the highest rates of increase in destitution, with Scotland’s rates growing “much more slowly”.
In total, around 3.8m people experience destitution in the UK, up 61 per cent since 2019 and more than doubling since 2017, a new study undertaken by Heriot-Watt University for the Joseph Rowntree Foundation found .
This includes one million children, an increase of 88 per cent since 2019.
Destitution is the most extreme type of poverty people can experience and occurs when essentials needed to eat, stay warm, dry, and clean are gone without due to lack of money.
More than half of destitute households have a weekly income of less than £85 a week, with more than a quarter having no income at all.
The report found the social security system is also not protecting people from experiencing destitution, with almost three quarters in receipt of benefits.
Destitution is rising fastest in Wales, the report said, with London having the highest levels of any region, followed by the North East and North West of England.
Scotland, on the other hand, is seeing much slower rates of destitution than other parts of the UK, partially due to the Scottish Child Payment, a benefit worth £25 per week per child.
The benefit has been described by academics as “game-changing”, but forms part of the spiralling social security budget putting pressure on other aspects of Scottish Government spending.
Despite policies making an impact, Glasgow remains one of the council areas with the highest levels of destitution, placing 26th in the UK, but is behind cities such as Manchester, Nottingham, Newcastle, and Liverpool.
Paul Kissack, chief executive of the Joseph Rowntree Foundation, said it was a political choice for the government not to help.
He said: “Across our country we are leaving families freezing in their homes or lacking basic necessities like food and clothing. Such severe hardship should have no place in the UK today – and the British public will not stand for destitution on this scale.
“The Government is not helpless to act: it is choosing not to. Turning the tide on destitution is an urgent moral mission, which speaks to our basic humanity as a country, and we need political leadership for that mission. That is why we are calling for clear proposals from all political parties to address this challenge with the urgency it demands.”
The foundation’s associate director for Scotland, Chris Birt, added that the scale of destitution was “outrageous”.
He said: “This needn’t be the case, destitution in Scotland is rising much more slowly than in other parts of the UK with the Scottish Child Payment and local welfare support offering some protection. Despite this, there is no cause for celebration when destitution numbers aren’t falling.
“It is time for both Scotland’s governments to step up to this challenge that years of failed government policy have caused. This is particularly acute for the UK Government and all the parties that are bidding to run it after the next election - they must come through for the Scottish people by embracing the Essentials Guarantee.
"This would improve the lives of people across these islands and stop falling back on their failing work first approach that our Poverty in Scotland report shows is not working. The Scottish Government can also do more and will need to show its willing to turn the tide on destitution in its forthcoming budget.”
Scottish Labour’s social justice spokesperson, Paul O’Kane, said governments were “too mired in scandal and division” to tackle destitution.
He said: “These deeply upsetting figures reveal the true cost of our stagnating governments in Holyrood and Westminster.
"When Labour was last in government we lifted 1 million children out of poverty but the SNP and Tories have squandered that legacy with poverty spiralling under their watch.
"It could not be clearer that Scotland and the rest of the UK desperately needs change.”
Collette Stevenson, an SNP MSP, said her party’s government was “doing all it can to help those struggling”, but was doing so “with one hand tied behind our back”.
She said: “This latest study should serve as a wake-up call for the UK government to take meaningful action, as the SNP has in Scotland, to address the scourge of destitution and tackle the cost of living crisis.
“The Joseph Rowntree Foundation is right that the persistence of such extreme hardship is a political choice and the culmination of 13 years of Tory rule in which austerity, a callous welfare system and Westminster-made cost of living crisis have made life immeasurably harder for Scots.”
Shirley-Anne Somerville, the social justice secretary, said 90,000 children will be lifted out of poverty due to the government’s welfare policies, claiming the government had spent £3bn on anti-poverty measures.
She said: “As of 30 June, our Scottish Child Payment was providing 316,000 children with support worth £25 per week.
"We’re making available £83.7 million through Discretionary Housing Payments to mitigate UK government welfare cuts. We estimate that 90,000 fewer children will live in relative and absolute poverty this year as a result of our policies, with poverty levels 9% points lower that they would have otherwise been.
“Entering fair and sustainable work can increase household income and help to tackle poverty. This is why we provide funding for parental employability support across all local authorities.
"We fund Living Wage Scotland to promote payment of the real living wage and support real living wage accredited employers who pay, at least, the real living wage. Some 64,000 workers have had a pay rise as a result of living wage accreditation.
“We continue to urge the UK Government to introduce an Essentials Guarantee to ensure people can afford life's essentials and ensure vulnerable people are properly supported.”
A UK Government spokesperson said: “The Government’s priorities are clear – the best way to help people in Scotland and across the UK with the cost of living is by driving down inflation and growing our economy.
“There are 1.7 million fewer people in absolute poverty than in 2010, including 400,000 fewer children, but we know some families are struggling, which is why we are providing support worth an average of £3,300 per household, including raising benefits by over 10% this year.
“To help people out of poverty through work, we are increasing the National Living Wage again and are also investing £3.5 billion to help thousands into jobs by breaking down barriers to work.”
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- U.S. financial institutions want to use blockchain to speed up trades on Wall Street
- $5 trillion in assets could be tokenized on blockchains in the next five years, according to a June report from Bernstein
- The technology could face headwinds from U.S. regulators.
"Once you have these assets that are tokenized, there are so many different use cases for them," said Elliot Han, head of digital assets at Cantor Fitzgerald.
Bernstein said in an analyst note from June that tokenization could unlock faster settlement times and lower costs. The firm projects $5 trillion in assets could be tokenized on blockchains over the next five years.
It takes time to transfer ownership of an asset on Wall Street. Investors must use a broker-dealer to buy or sell an asset on an exchange, and they must wait two business days for that transaction to settle — what is known as "T+2," or trade plus two days. Banks believe tokenization could cut out those middlemen and allow for near-instant transactions.
"A traditional stock certificate is nothing more than a token that represents ownership of the keys of a company," said James Angel, an associate professor at Georgetown University.
The technology could face regulatory headwinds. U.S. agencies like the Securities and Exchange Commission are cracking down on crypto companies. In May, the agency sued crypto exchanges Binance and Coinbase over alleged securities violations, and Chair Gary Gensler also requested millions of dollars in increased funding to rein in the "Wild West" of crypto.
Watch the video above to learn why big banks are spending millions on tokenization.
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Banking & Finance
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ESAF Small Finance Bank IPO Subscription: Day 3 Live Update
The IPO has been subscribed 11.94 times as of 11 a.m. on Tuesday.
The Kerala-based bank is seeking to secure a total of Rs 463 crore in funding. It plans to generate Rs 390.7 crore through the issuance of fresh equity shares, while the remaining amount will be acquired through an offer for sale. The other selling shareholders are PNB Metlife and Bajaj Allianz Life Insurance.
The company plans to utilise the proceeds towards augmentation of their Tier-1 capital base and increasing its onward lending business. Raising of funds also helps them to ensure compliance with regulatory requirements on capital adequacy.
IPO Details
Issue opens: Nov. 3
Issue closes: Nov. 7
Fresh issue size: Rs 390.7 crore
OFS size: Rs 72.3 crore
Total issue size: Rs 463 crore
Price band: Rs 57–60 per share
Lot size: 250 shares
Face value: Rs 10 per share
Listing: BSE and NSE
The company has not undertaken any pre-IPO placement.
Business
ESAF provides micro, retail and corporate banking, para-banking activities like debit cards, and third-party financial distribution, in addition to Treasury and permitted foreign exchange business. ESAF commenced their business in March 2017 and was included in the second schedule to the RBI Act in November 2018.
The lender predominantly focuses on unbanked and underbanked segments, especially in rural and semi-urban centers. As of June, 63% of their gross advances and 71.7% of their branches were dedicated to customers from these centres.
The bank's assets under management have nearly doubled between March 2021 and 2023 and stand at Rs 17,204 crore as of the first quarter.
The lender has 700 banking outlets and 767 customer service centres across 21 states and 2 union territories, with 62% of their banking outlets being in southern India.
Subscription Status: Day 3
The IPO has been subscribed 11.94 times as of 11 a.m. on Tuesday.
Institutional investors: 3.19 times
Non-institutional investors: 30.14 times
Retail investors: 9.93 times
Employee Reserved: 2.76 times
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Banking & Finance
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NEW YORK -- A judge warned Donald Trump and others at his New York civil fraud trial to keep their voices down Wednesday after the former president threw up his hands in frustration and spoke aloud to his lawyers while a witness was testifying against him.
Judge Arthur Engoron made the admonition after Trump conferred animatedly with his lawyers at the defense table during real estate appraiser Doug Larson’s second day of testimony at the Manhattan trial.
State lawyer Kevin Wallace asked Engoron to ask the defense to “stop commenting during the witness’ testimony,” adding that the “exhortations” were audible on the witness' side of the room. The judge then asked everyone to keep their voices down, “particularly if it’s meant to influence the testimony.”
The 2024 Republican frontrunner was in court for a second straight day Wednesday, watching the trial that threatens to upend his real estate empire and his wealthy businessman image. He attended the first three days, but skipped last week. On Tuesday, he left during an afternoon break to give a deposition in an unrelated lawsuit.
In a pretrial decision last month, Engoron ruled that Trump and his company, the Trump Organization, committed years of fraud by exaggerating his asset values and net worth on annual financial statements used to make deals and get better terms on loans and insurance.
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, but an appeals court has blocked that for now.
Trump didn't talk about the case on his way into court past TV cameras Wednesday, saving his usual vitriol about New York Attorney General Letitia James’ lawsuit for a morning break.
Inside the courtroom, which is closed to cameras, Trump grew irritated as Larson testified. Trump's lawyers were seeking to undercut the state’s claims that his top corporate deputies played games to inflate the values of his properties and pad his bottom line.
In a series of questions, Trump lawyer Lazaro Fields sought to establish that Larson had, at one point, undershot the projected 2015 value of a Trump-owned Wall Street office building by $114 million. Larson said the “values were not wrong — it’s what we knew at the time.”
Trump threw up his hands during the exchange.
On Tuesday, Larson testified that he never consulted with or gave permission for the Trump Organization’s former controller, Jeffrey McConney, to cite him as an outside expert in the valuation spreadsheets he used to create Trump’s financial statements.
Fields on Wednesday accused Larson of lying, pointing to a decade-old email exchange between McConney and the appraiser.
That touched off an angry back-and-forth between the defense and state sides, with Trump lawyer Christopher Kise suggesting that Larson could risk perjuring himself and needed to be advised about his rights against self-incrimination. State lawyer Colleen Faherty called Kise's comments “witness intimidation.”
After Larson was escorted out of the courtroom, Kise insisted that he was trying to protect the witness’ rights, while state lawyer Kevin Wallace complained that the defense was mounting “a performance” for the media. Ultimately, Engoron allowed Larson to return and answer the question with no legal warning. Larson said he didn’t recall the email.
Asked again whether he understood that McConney had asked for his input in order to carry out valuations, a weary Larson said: “That’s what it appears.”
Trump railed about that exchange during a court break.
“See what’s happened? The government lied. They just lie. They didn’t reveal all of the information that they had,” Trump said. “They didn’t reveal all the evidence that made me totally innocent of anything that they say.”
After Larson, state lawyers called Jack Weisselberg, the son of former longtime Trump Organization finance chief Allen Weisselberg. The son arranged financing for Trump while an executive at Ladder Capital.
Trump’s civil trial involves six claims in James’ lawsuit that weren't resolved in Engoron’s pretrial ruling, including allegations of conspiracy, insurance fraud and falsifying business records. Engoron will decide the case, not a jury, because state law doesn’t allow one in this type of lawsuit.
Wednesday's dust-up was just the latest clash between Engoron and Trump.
After Trump maligned a key court staffer on social media on the trial’s second day, the judge, a Democrat, issued a limited gag order barring parties in the case from smearing members of his staff. Last year, Engoron held Trump in contempt and fined him $110,000 for being slow to respond to a subpoena from James' office.
Trump on Tuesday said outside court that he had grown to like and respect Engoron, but that he believed Democrats were “pushing him around like a pinball.” "It’s a very unfair situation that they put me in,” Trump said.
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Associated Press reporter Jill Colvin contributed to this report.
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WASHINGTON (AP) — The world’s largest cryptocurrency exchange Binance and its founder Changpeng Zhao are accused of misusing investor funds, operating as an unregistered exchange and violating a slew of U.S. securities laws in a lawsuit filed by the SEC.
Filed in the U.S. District Court for the District of Columbia, the Securities and Exchange Commission lawsuit on Monday lists thirteen charges against the firm — including commingling and diverting customer assets to an entity Zhao owned called Sigma Chain.
Binance is a Cayman Islands limited liability company founded by Zhao and the charges are familiar to practices uncovered after the collapse of the second largest cryptocurrency exchange, FTX, last year.
The lawsuit lays out the extent to which the firms owners knew of the alleged legal violations: “Binance’s CCO bluntly admitted to another Binance compliance officer in December 2018, “we are operating as a fking unlicensed securities exchange in the USA bro.”
SEC Chair Gary Gensler in a written statement that Zhao and Binance “engaged in an extensive web of deception, conflicts of interest, lack of disclosure, and calculated evasion of the law.”
“The public should beware of investing any of their hard-earned assets with or on these unlawful platforms,” Gensler said.
READ MORE: Amid value drops and increased regulation, what’s the future of cryptocurrency?
In a social media post, Binance said that it has been cooperating with the SEC’s investigation but said that the agency “chose to act unilaterally and litigate.”
“While we take the SEC’s allegations seriously, they should not be the subject of an SEC enforcement action, let alone on an emergency basis. We intend to defend our platform vigorously,” the company said in a Twitter post. “Unfortunately, the SEC’s refusal to productively engage with us is just another example of the Commission’s misguided and conscious refusal to provide much-needed clarity and guidance to the digital asset industry.”
The lawsuit comes roughly eight months after the collapse of FTX, which was also accused of co-mingling customers’ funds and investing the proceeds in high-risk investments that customers were unaware they were participating in.
U.S. prosecutors and the SEC charged FTX’s founder Sam Bankman-Fried with a host of money laundering, fraud and securities fraud charges in December. His criminal trial is likely to be in the fall.
“The new complaint from the SEC against Binance is a laundry list of charges laying out exactly the same claims that many in the Bitcoin and crypto communities have made against Changpeng Zhao and his companies for many years. These practices of Binance have essentially been open secrets, so no one who operates in the space will be surprised by any of the charges,” said Cory Klippsten, CEO of Swan Bitcoin, a bitcoin financial services company.
U.S. regulators have gone after Binance before.
In March, the Commodity Futures Trading Commission filed an enforcement action against Binance and Zhao in the U.S. District Court for the Northern District of Illinois charging them with numerous CTFC violations.
The complaint also charges Samuel Lim, Binance’s former chief compliance officer, with aiding and abetting Binance’s violations.
AP Business Writer Ken Sweet contributed to this report from New York.
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NEW YORK, Nov 3 (Reuters) - Eric Trump testified on Friday that he relied on accountants and lawyers to verify the accuracy of financial documents that a judge has ruled to be fraudulent, in a trial that threatens to hobble his father Donald Trump's real estate empire.
His testimony wrapped up before noon. Up next is Donald Trump, who is scheduled to take the witness stand on Monday.
In a second day on the witness stand, the former U.S. president's second son was confronted with evidence showing that he had signed off on the accuracy of his father's financial statements when securing loans for trophy properties including the Trump National Doral golf club in Florida.
State lawyer Andrew Amer also presented emails where Eric Trump discussed classifying his father's Mar-a-Lago estate in Florida as a private residence, which would boost its value, rather than a club that hosted guests and social events.
That undercut Eric Trump's testimony on Thursday that he knew nothing about those estimates, which Judge Arthur Engoron found were fraudulently inflated to win favorable terms from lenders and insurers.
He said he counted on others to ensure they were accurate. "I relied on one of the biggest accounting firms in the country and I relied on a great legal team, and when they gave me comfort that the statement was perfect, I was more than happy to execute it."
Eric said he did not recall many of those interactions or was only involved with them peripherally while he oversaw other aspects of the sprawling business.
"I pick my phone up at five in the morning and I put it down at midnight. I have thousands of calls," he said with irritation under questioning by Amer.
Because Engoron has already ruled that Trump and his company fraudulently inflated asset values, the trial is largely about what penalty they should face.
New York Attorney General Letitia James is pressing for penalties of up to $250 million and a permanent ban on all three Trumps owning companies in their home state, among other restrictions.
Trump has denied wrongdoing and has accused James and Engoron of political bias in extensive comments online and in person.
Trump has been fined $15,000 for twice violating a limited gag order that prevents him from publicly criticizing court staff. Trump's lawyer Christopher Kise on Friday objected to that gag order, as he has several times before, but Engoron said he was not inclined to change it.
The trial, which is expected to last until December, is one of several legal troubles confronting Trump as he campaigns to win back the White House.
He faces a total of 91 felony charges in four separate criminal cases, including two stemming from his attempts to overturn his 2020 election loss to Democrat Joe Biden.
Nevertheless, he holds a commanding lead over his rivals for the Republican presidential nomination.
The New York fraud trial has so far seen dramatic appearances by Trump's former lawyer and fixer Michael Cohen, who testified that Trump directed him to inflate asset values to make him appear more wealthy.
Trump's other son, Donald Jr., testified this week that he had little to do with those valuations when he and Eric controlled the company during their father's 2017-2021 stint in the White House.
Trump's daughter Ivanka is due to testify on Wednesday. She is not a defendant in the case.
Reporting by Jack Queen; Writing by Andy Sullivan; Editing by Scott Malone, David Gregorio and Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
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Real Estate & Housing
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Eggs are getting cheaper. Here’s what else is also more affordable.
Inflation fell for the eighth straight month in February as key categories saw their price drop.
Prices rose 6 percent annually, down from 6.4 percent the previous month, according to the Labor Department’s Consumer Price Index (CPI) released Tuesday.
Eggs, which have seen their price soar to record levels, saw one of the largest price drops last month, a welcome relief for beleaguered shoppers.
Still, inflation continues to run hot for groceries, housing and various services, raising the question of when those categories will finally stop rising.
“Today’s CPI report indicates that the inflation rate may take longer to reach the 2 percent target than markets were anticipating,” ZipRecruiter lead economist Sinem Buber said in a note.
Price of eggs, used cars, energy falling
The price of eggs fell 6.7 percent last month, according to Tuesday’s report, reversing massive gains in recent months. But egg prices remain 55.4 percent more expensive than they were one year ago.
Egg producers have blamed the price hikes on an outbreak of bird flu that forced farmers to kill millions of hens, reducing the supply of eggs. The outbreak has impacted more than 58 million birds since January 2022, according to Centers for Disease Control and Prevention.
The price of used cars and trucks fell 2.8 percent in February, bringing the annual decline to 13.6 percent.
Used car prices have fallen for eight straight months after snarled supply chains and high demand drove prices to record levels. That trend may not continue, as wholesale used car prices rose 4.3 percent in February, according to a report from Cox Automotive released last week.
A handful of other goods and services are also finally getting cheaper.
Energy costs fell 0.6 percent in February, driven by an 8 percent dip in utility costs. On the year, utility costs are up 14.3 percent.
The cost of medical care, meanwhile, fell 0.7 percent for the second straight month.
Other prices won’t stop rising
Grocery prices, which are up 10.2 percent on the year, rose 0.3 percent last month.
Baked goods rose 0.7 percent, seafood rose 1.5 percent and frozen fruits and vegetables rose 4.5 percent.
Housekeeping supplies rose 0.5 percent in February and 10.4 percent on the year.
Persistent price hikes have helped food and consumer staple companies such as General Mills, Nestlé and Kraft Heinz Co. bring in massive profits.
While those companies have recently seen their sales figures dip as customers opt for cheaper alternatives, they haven’t announced plans to cut prices.
Rents are still rising
The bulk of February inflation was driven by rising rents, which jumped 0.7 percent on a month-to-month basis.
Services, which the Federal Reserve closely monitors to decide whether the economy needs to be cooled further by more interest rate hikes, rose 0.6 percent.
“Inflation inside core services, which are linked to wage demands, continues to rise, so the economic rationale for hiking rates continues to flash red,” RSM chief economist Joe Brusuelas said in a note.
Transportation services saw one of the biggest jumps, rising 1.1 percent in February and 14.7 percent annually.
Motor vehicle insurance was another key factor, rising 0.9 percent on the month and 14.5 percent annually. The insurance industry has pointed to an increase in drivers on the road post-pandemic, higher rates of fatal crashes and the cost of repairing vehicles.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Inflation
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Bitcoin (BTC 0.02%) mining stocks have easily outperformed Bitcoin this year, and it's not even close. Through the first six months of 2023, the nine biggest publicly traded Bitcoin miners were up an average of 257%. In comparison, Bitcoin is up 76% year to date.
But that recent performance doesn't necessarily mean Bitcoin mining stocks are a better investment than Bitcoin. If you're a long-term buy-and-hold investor, there are three key factors to keep in mind as we head into the second half of the year.
Cyclical nature of Bitcoin mining stocks
It might sound obvious, but Bitcoin mining stocks are highly correlated with the price of Bitcoin. They go up when Bitcoin goes up, and they go down when Bitcoin goes down. In a bull market rally for Bitcoin, such as we've experienced in the first half of 2023, this makes them very attractive investment targets. However, during a bear maket, this makes them terrible investment targets. Simply stated, it's nearly impossible for them to turn a profit when the price of Bitcoin is nosediving.
We just saw this scenario play out during the crypto winter of 2022, when investors began to give up on Bitcoin mining stocks. With the price of Bitcoin down significantly, these miners become big money-losing operations. So, before you start buying Bitcoin mining stocks, be sure you understand the cyclical nature of these stocks. Since they are so highly correlated with the price of Bitcoin, they share the same volatility.
The Bitcoin proxy effect
There are several well-known stocks that are considered Bitcoin proxies simply because they have so much exposure to Bitcoin. Chief among them are top Bitcoin mining stocks such as Riot Platforms (RIOT -0.89%) and Marathon Digital Holdings (MARA 0.48%). Not only do these mining stocks have business models that are almost 100% based around Bitcoin, they also hold an enormous amount of Bitcoin on their balance sheets. Thus, they are arguably as close as you can get to buying Bitcoin without actually buying Bitcoin.
From my perspective, this Bitcoin proxy effect helps to explain why Bitcoin mining stocks are absolutely trouncing Bitcoin this year. For institutional investors that are unable to buy Bitcoin directly, getting exposure to Bitcoin mining stocks is a useful proxy. That's a great opportunity over the short term, because there's obviously a lot of pent-up demand for Bitcoin from institutional investors.
But, over the long haul, the market will see the emergence of new investment products for Bitcoin, such as new spot Bitcoin ETFs. In June, BlackRock (BLK -1.01%), the largest asset manager in the world, made headlines with its application for a spot Bitcoin ETF. That was quickly followed by other investment firms filing for spot Bitcoin ETFs. As these investment products eventually get approved by the SEC, the Bitcoin proxy effect is likely to disappear. Investors looking for Bitcoin exposure will simply buy a spot Bitcoin ETF instead of relying on proxy stocks.
Bitcoin halving in 2024
Finally, it's important to keep in mind that the upcoming Bitcoin halving, which is now scheduled for April 2024, is going to shake up the playing field for Bitcoin miners. In a halving event, which takes place only once every four years, the mining reward for Bitcoin miners is cut in half. This directly affects the top-line revenue of Bitcoin miners, and makes it imperative for them to have streamlined operations.
Thus, my expectation is that only the most efficient Bitcoin miners will survive. That's because energy costs for mining Bitcoin are off the charts, so only Bitcoin miners with the lowest costs will still be able to turn a profit. This might not affect Riot Platforms, which is generally acknowledged to have some of the lowest Bitcoin production costs in the industry. But it will certainly affect other Bitcoin miners that have very energy-intensive mining operations. So be careful which Bitcoin mining stocks you buy -- they're not all the same.
Buy Bitcoin, not proxies
Based on the above, I'm convinced that Bitcoin is the superior investment over the long haul. Mining stocks don't offer enough diversification, and thus will always be highly correlated with the price of Bitcoin. So why would you buy a very capital-intensive company instead of the underlying asset? Moreover, mining stocks are getting a big bump right now from the Bitcoin proxy effect. As soon as that proxy effect starts to dissipate, then the case for buying Bitcoin mining stocks is going to become even weaker.
Long-term, I'm bullish on Bitcoin. And I'm also bullish on companies that are building business models around Bitcoin. But there's simply no reason to buy mining stocks when you can buy Bitcoin instead.
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Crypto Trading & Speculation
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Seven Crashes: The Economic Crises That Shaped Globalization Harold James Yale Univ. Press (2023)
In the mid-1920s, the mood in the United States was buoyant. After years of surging economic growth, fuelled by expansion in the automobile industry and speculation in financial markets, the United States had the lowest debt of any large industrial nation. The future looked just as rosy. A 1926 article in The Wall Street Journal noted how “American wealth has doubled in the past dozen years”, delivering “a rate of progress that has never been known in Europe”.
That astonishing uptick was real. Yet the exuberant mood vanished just a few years later with the stock-market crash of October 1929, followed by a wave of bank failures. As the trouble spread to Europe, more banks succumbed, and the world entered the Great Depression. But the seeds of this downturn were evident even during the boom. US authorities worried over how financial innovations — including the invention of derivative contracts such as options — had created a vast network of overextended investors engaging in risky speculation.
What was so new — and had for a time seemed so beneficial — led instead to profound upheaval and a global social and economic crisis.
Similar events, historian Harold James argues in his illuminating book Seven Crashes, recur across human history. Sudden outbursts of novelty presage most major economic crises. As James relates, when economist Joseph Schumpeter asked the question “how do things become different?”, the answer was: “when something fundamentally new occurs in the world, we are confronted by an enigma.”
Such occurrences, which have had a decisive role in shaping economic history, are not normal or predictable, James argues. The origin of each crisis was an economic or social ‘shock’: a famine, as was the case in 1840s Europe; a global energy shortage, as happened in the 1970s; or a global pandemic in the case of COVID-19. The outcome, James argues, is often an immediate retreat from globalization, as nations close in on themselves, seeking safety and stability. Yet, simultaneously, there is also a push for greater globalization, stemming from the emergence of new technologies or the search for fresh resources.
James examines seven historic crises. For example, during the European agrarian crisis of the 1840s, bad weather and crop failures — caused in particular by potato blight — led to widespread starvation. From Ireland to Germany, prices of potatoes, rye and wheat doubled over a few years. Millions of people died from hunger and disease brought on by malnutrition.
This misery caused nations to hoard supplies, but also to push for more global trade. In just a few years, France increased its grain imports more than tenfold. Other countries responded by using new forms of international credit and governing institutions, with public authorities taking closer control of the economy and trade. New kinds of business emerged, including the limited liability joint-stock company, which encouraged risky enterprises by protecting investors from full liability for their activities.
The Great Depression evoked a similar response. As James notes, the economic decline after 1929 convinced many that the world was witnessing ‘the end of capitalism’. In a 1933 radio address, US president Franklin Roosevelt argued for a return to nationally focused economies that were not subject to the “old fetishes of so-called international bankers”. British economist John Maynard Keynes greeted this language approvingly. In his landmark 1936 book, The General Theory of Employment, Interest and Money, Keynes criticized the instability inherent to international speculative finance and argued for state planning and control of the monetary system.
Yet, from this temporary move away from globalization emerged the Bretton Woods agreement in 1944, which established an international system of currency exchange and the International Monetary Fund, a financial agency of the United Nations. The agreement was decisive in furthering globalization by allowing for safer and more-predictable flows of capital for international investments.
James also considers the financial crash of 1873 in Europe and North America, the upheaval of the First World War, inflation in the 1970s and the global recession of 2008. In such circumstances, he writes, “the radical character of the shock spurred a search for alternatives: new products but also new mechanisms to move goods”.
During the 1970s, for example, soaring inflation — exacerbated by energy shortages linked to political instability in the Middle East — stimulated a push for energy efficiency and alternative energy sources. In the United States, business-friendly Republican president Richard Nixon was the unlikely agent in introducing energy-saving measures such as a reduced national speed limit, higher fuel-efficiency standards and an encouragement to turn down home thermostats.
Similar pleas for public-spirited shifts in behaviour were at the centre of the global response to the COVID-19 pandemic. This crisis, James notes, was a product of globalization and the connections that enabled the virus SARS-CoV-2 to spread so rapidly. Yet the challenge was also fought with worldwide sharing of science, technology and learned best practices.
One outcome of the pandemic, James argues, was a broad push for bigger and more effective government, following from the chaotic but ultimately effective deployment of rapidly developed vaccines, as well as the support that helped to preserve social function. The economic shock of the pandemic was not only the loss of economic output brought on by social restrictions, but acute shortages of products — foods, medicines, semiconducting chips — caused by disrupted supply lines. The world is still living with the consequences, in the form of inflation linked to the shortages, which was amplified by rising energy prices after Russia invaded Ukraine in 2022.
Responses to these challenges will emerge in the next stage of the continual push–pull of the socio-economic process. If the rise of populist movements around the globe reflects a backlash against globalization, and a yearning to return to isolationist nation states, there’s an equal demand from many people for greater coordination on the international level — to help to avoid another pandemic, or to forge a better response to the problems of climate change as they grow more severe.
It is a fascinating idea that many of humanity’s greatest achievements have, ultimately, come as responses to times of crisis, which bring suffering and present deep conceptual problems. That said, James relies rather heavily on the concept of an economic shock — a surprising or unpredictable event that drives big changes. He sidesteps the question of how to identify which ones count as shocks, and whether these shocks really caused specific events. But this problem plagues any causal analysis of historical occurrences. Subtler trends and feedbacks, such as narratives that spread slowly and largely invisibly among people until they cause shifts in behaviour, might be just as important, if harder to see.
That quibble aside, James’s analysis is persuasive, and his book offers an illuminating history of how our world became so globalized. Not as the result of an inexorable process, but by jerking along an erratic and haphazard path towards a more unified economy.
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Stocks Trading & Speculation
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BUENOS AIRES (Reuters) - New York-traded shares in Argentine state-run oil company YPF soared more than 40% on Monday after President-elect Javier Milei said he would seek to privatize the firm.
The libertarian economist, who defeated Economy Minister Sergio Massa to win the presidential election on Sunday, said YPF was one of several state-controlled companies he plans to sell in order to reduce the state's share in the market and improve public accounts.
Milei, who will take office on Dec. 10, said in a radio interview he expects his government to "create value" for the companies "so they can be sold in a very beneficial way for Argentines".
The South American country nationalized 51% of the oil company more than a decade ago from Spain's Repsol.
YPF is Argentina's largest oil firm and oversees development of Vaca Muerta, the world's second-largest shale gas reserve and fourth-largest shale oil reserve.
Shares of YPF jumped more than 40% early in the session, before paring some gains to trade up 35.2%.
Argentina's markets were closed on Monday for a holiday but Argentina-related equities, as well as its dollar bonds, saw a major rally overseas after Milei's triumph.
Global X analyst Trevor Yates said the YPF gains were related to the increasing likelihood of it being privatized and implementing an international price parity policy.
A lower risk premium in the country, Yates added, should also reduce its cost of capital and favor output in the medium and long term.
YPF reported $137 million in losses in the third quarter, swinging back from a $693 million profit a year earlier, hurt by lower local fuel prices and higher operating costs.
A source within Milei's team, who asked not to be identified, said: "We are still trying to see all the businesses or activities where YPF participates and which ones it should be concentrated on. But we are still in a preliminary stage."
(Reporting by Eliana Raszewski; Additional reporting by Bansari Mayu Kamdar; editing by Grant McCool)
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Energy & Natural Resources
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Reacting to figures today showing that inflation is stuck at 8.7%, chancellor Jeremy Hunt has said the government should stick to what it is doing and that the evidence “strengthen the case for the government to stick to its guns”.
The new figures show the Consumer Prices Index (CPI) rose by 8.7 per cent in the 12 months to May, unchanged from April.
Core inflation, meanwhile, which excludes volatile elements like food and energy prices, increased to 7.1 per cent in May, up from 6.8 per cent in April.
It means core inflation in the UK economy is at its highest level in 31 years.
Mr Hunt said: “Well today’s figures strengthen the case for the government to stick to its guns, no matter what the pressure from left, right, or centre.
“We won’t be pushed off course because if we’re going to help families, if we’re going to relieve the pressure on people with mortgages, on businesses, we need to squeeze every last drop of high inflation out of the economy.
“And if you look at what’s happening in other countries, you can see that rises in interest rates do bring down inflation over time. That will happen here, but we need to be patient, we need to stick to the course, and then we’ll get to the other side”.
The chancellor also gave the Bank of England the government’s full backing ahead of tomorrow’s interest rates update, with another rise expected.
“We will not hesitate in our resolve to support the Bank of England as it seeks to squeeze inflation out of our economy, while also providing targeted support with the cost of living”, he said.
Reacting to the chancellor’s statement today saying, Labour shadow cabinet minister Jim McMahon told Sky News he is “not sure” what Mr Hunt actually means.
He questioned if “stick to its guns” meant food inflation continuing to rise and “making the cost of living crisis harder for working people”.
The shadow environment secretary accused the government of being “either missing in action or they are so slow to take action that we’re just not seeing the progress that we need”.
Labour’s shadow chancellor Rachel Reeves also released a statement in which she said the government “can’t get a grip of this problem because they are the problem”.
She added: “13 years of the Tories and their disastrous mini-Budget are damaging our economic security and leaving families worse off.
“Simply continuing on this Tory path of managed decline is not the summit of Labour’s ambition. We need a more secure economy, more secure family finances and a plan to help us grab hold of the opportunities before us.”
Meanwhile, Liberal Democrat Treasury spokesperson Sarah Olney said the government is “failing miserably to bring inflation down and provide relief for struggling families facing soaring bills”.
She added: “Homeowners now face the likelihood of even more interest rate hikes adding to their monthly mortgage payments, all while the Chancellor just sits on his hands.
“It beggars belief that ministers are refusing to support hard-pressed families when it’s this Conservative government’s catastrophic failure to run the economy that caused this crisis.
“This must be the most uncaring government to ever walk into Downing Street. It’s as if ministers are living on another planet.”
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Inflation
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The UK is on course for the biggest tax rise in at least 50 years because of the freeze on personal thresholds and soaring inflation, according to new analysis.
The Resolution Foundation said taxpayers are set to hand over about £40bn a year by 2028 - up from a forecast of £30bn at the time of Chancellor Jeremy Hunt's budget in March.
The government's policy is to keep income tax and national insurance thresholds frozen until 2028, meaning many will be pushed into higher tax bands as a result of inflation.
"Chancellors of all political stripes like this kind of stealth tax, but the scale of increase in how much it will now raise is totally unprecedented," said Torsten Bell, chief executive of the Resolution Foundation.
"Forget about all the tax cuts being floated, they'll pale into insignificance besides this tax rise."
The Institute for Fiscal Studies said the freeze will also compound challenges facing many workers whose earnings are not keeping up with inflation.
It comes as Mr Hunt ruled out sizeable tax cuts this year amid Tory calls for a pre-election giveaway at the Conservative Party conference.
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Adam Corlett, principal economist at the Resolution Foundation, said: "Abandoning the usual uprating of tax thresholds is a tried-and-tested way for governments of all stripes to raise revenue in a stealthy way.
"But it is the far bigger than anticipated scale of the government's £40bn stealth tax rise that stands out.
"The reality of the largest, and ongoing, tax rise on incomes in at least 50 years is why any talk of pre-election tax cuts will inevitably be seen in the wider context of some far bigger tax rises."
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Inflation
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Jeremy Hunt has acknowledged it will "take time" to bring taxes down, but he had "made a start" with his autumn statement.
The chancellor admitted the tax take - the total the government collects - stood at £45bn, outstripping the benefits of the cuts announced in the fiscal event.
The headline-grabbing announcement in Mr Hunt's statement was that the main 12% national insurance rate would fall to 10% from 6 January - saving those on an average salary of £35,000 more than £450 a year.
Politics Hub: Tory MPs 'convinced' autumn statement hints at timing of next election
The chancellor also abolished Class 2 national insurance payments for the self-employed to show the government "values their work".
Mr Hunt sought to portray the autumn statement as a tax giveaway in light of the NI cuts - worth £9bn - but economists have pointed out that the overall tax burden remains at a record high because of the continued freeze on tax thresholds.
In an interview with Sky News' political editor Beth Rigby, the chancellor conceded that "taxes go up from freezing thresholds".
He said: "If you’re trying to say that it’s going to take time to get taxes down to the level they were, then I agree.
"But what I said was when it was responsible to do so, when it wouldn’t affect inflation, I would make a start.
"We’ve done that today and we are a party that believes if we want to grow the economy, then we need to have a lightly taxed economy, and we’ve made a step which, by the way, for someone on average earnings is going to be about £450 - so it’s not insignificant."
Mr Hunt was asked whether he could call the statement a tax giveaway given that the £45bn tax take "dwarfed" the effects of the national insurance cuts.
"Have you taxed more, or cut taxes more?"
"We have put taxes up because it was the right thing to do to support families," Mr Hunt replied.
Pressed again on whether taxes have been going up or down under the government, the chancellor said: "Taxes have gone up and we are starting to bring them down."
Mr Hunt also denied that taxes had gone up in part to "clear up the mess" of the previous government under Liz Truss, pointing instead to the "once-in-a-century pandemic" and "energy shock" caused by Russia's invasion of Ukraine.
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Forecasts from the Office for Budget Responsibility, released after the statement, showed taxes are still trending upwards - with a post-war high of 37.7% set to be reached by 2028/29 under the current government plans.
The body put this down to so-called "fiscal drag" - with people drawn into higher tax brackets as their pay increases.
According to the OBR, by 2028/29, frozen thresholds will result in nearly four million additional workers paying income tax - with three million more moved to the higher rate and 400,000 more paying the additional rate.
Mr Hunt was rumoured to have considered income tax cuts in the autumn statement, but it is thought he may defer this to the March budget next year.
Asked whether he would use that opportunity to cut income tax, he replied: "If it’s responsible to do so, if we can do so without increasing borrowing, then of course, as a Conservative, I would like to bring down the tax burden - but I will only do so in a responsible way and one that doesn’t fuel inflation after the great success we’ve had in halving it."
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United Kingdom Business & Economics
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(Bloomberg) -- Hong Kong said retail investors can trade crypto under its new rulebook for the sector, stepping up a drive to develop a digital-asset hub even as the industry and regulators clash elsewhere in Asia.
Most Read from Bloomberg
The city’s Securities and Futures Commission on Tuesday detailed the conclusions of a consultation on retail participation. The agency stuck with a plan to let individual investors buy and sell bigger tokens like Bitcoin and Ether starting June 1 when a new licensing regime for virtual-asset platforms begins.
The framework seeks to woo crypto firms while safeguarding investors and is part of Hong Kong’s effort to restore its status as a cutting-edge financial center. But any embrace of digital assets is controversial after a market rout in 2022 that sparked a spate of bankruptcies like the collapse of FTX.
“It’s not a full open-arm stance as they want to maintain financial stability while opting for financial innovation,” said Cici Lu, founder of Venn Link Partners, a blockchain adviser. “That’s a pragmatic approach. People shouldn’t expect an open buffet for all while applying for a license in Hong Kong.”
Larger Tokens
Individual investors can trade larger coins on exchanges licensed by the SFC under Hong Kong’s new approach. Safeguards include knowledge tests, appropriate risk profiling and reasonable limits on exposure.
The coins should be included in at least two acceptable, investible indexes from independent providers, one with experience in the traditional financial sector.
The SFC said in its conclusions that licensed platforms should “comply with a range of robust investor protection measures covering onboarding, governance, disclosure and token due diligence and admission, before providing trading services to retail investors.”
From June 1 unlicensed exchanges, including overseas platforms, actively marketing to Hong Kong investors will be breaking the law, Keith Choy, interim head of intermediaries at the SFC, said in a briefing.
“We will be closely monitoring,” Choy added.
Full Circle
Officials have already permitted exchange-traded funds investing in CME Group Inc. Bitcoin and Ether futures, triggering a flurry of product launches.
Hong Kong in some ways is coming full circle as it used to be a digital-asset hub in earlier years before taking a more skeptical stance. China’s ban on crypto in 2021 dulled the city’s allure as a conduit for mainland cash.
Regulators globally are grappling with how to handle the crypto industry. Jurisdictions like Hong Kong and Dubai are trying to attract crypto-related investment. Singapore plans curbs on retail-investor participation.
South Korea this week may pass its first standalone crypto legislation after a series of scandals. The US has cracked down on the sector.
Malaysia, Philippines
In the past few days, tension flared between regulators and the industry in Malaysia and the Philippines. Malaysia reprimanded the Huobi Global platform for operating “illegally” and ordered it to stop activities there. A Huobi spokesperson said the exchange hasn’t operated in the country since 2022.
Meanwhile, the Philippines alleged that a non-US derivatives trading venue recently started by Gemini Trust Co. lacks the necessary permits for the nation. A Gemini spokesperson earlier declined to comment.
Questions remain over Hong Kong’s crypto pivot given the industry has retrenched and only partially recovered from a $1.5 trillion crash last year. Firms such as Huobi Global, OKX and Amber Group have said they plan to apply for licenses under the new regime
Hong Kong Monetary Authority Chief Executive Eddie Yue has indicated companies should expect an exacting regulatory backdrop.
“We will let them create the ecosystem here and that actually brings a lot of excitement,” Yue said earlier this month in an interview at the Bloomberg Wealth Asia Summit. “But that doesn’t mean light-touch regulation.”
--With assistance from Suvashree Ghosh and Hooyeon Kim.
(Updates with comment from regulatory briefing in the eighth paragraph.)
Most Read from Bloomberg Businessweek
©2023 Bloomberg L.P.
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Crypto Trading & Speculation
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Rishi Sunak has hinted he will ignore recommendations for public sector pay rises, saying workers "need to recognise the economic context we are in".
Reports surfaced over the weekend that the prime minister planned to block upcoming proposals from public sector pay bodies in an attempt to tackle soaring inflation in the country.
And health minister Helen Whately refused to commit to the uplift during an interview with Sky News on Monday morning.
Unions and opposition parties have hit out at the rumoured decision, saying inflation was not being driven by the wages of nurses and teachers, but by the economic decisions taken by the Conservatives over their 13 years in power.
Politics live: 'Seriously?' - Labour responds to lack of commitment on pay rises
Asked by broadcasters today whether public sector pay was a major driver of inflation, Mr Sunak said: "Government borrowing is something that would make inflation worse, so the government has to make priorities and decisions about where best to target our resources.
"And that's why when it comes to public sector pay, we need to be fair, but we need to be responsible as well."
Pay review bodies or PRBs take evidence from across sectors like the NHS and education each year, as well as submissions from government, before saying what wage rises should be introduced for the following 12 months.
Amid anger from unions about the figures failing to match inflation last year, Health Secretary Steve Barclay insisted it was right for ministers to "continue to defer to that process to ensure decisions balance the needs of staff and the wider economy".
The PRBs' recommendations are expected to be published next month, alongside formal pay offers, with reports claiming they could be around 6% for the health service and 6.5% for teachers.
But while being questioned on public sector pay, Mr Sunak said: "It is important that we don't make the inflation situation worse and it is important we prioritise the things that are right.
"I am making the decisions that are right for the long term and that is what I am going to continue doing."
The reports come while strike action by junior doctors over pay and conditions continues, with unions planning a five-day walk out next month.
Calling for pay restoration equating to a 35% rise, the British Medical Association (BMA) said wages had decreased by more than a quarter since 2008 when inflation was taken into account, and many doctors were burnt out from an increasing workload.
But when asked why he wouldn't pay the profession more, the PM hit out at the industrial action and called the BMA's demands "totally unreasonable".
Mr Sunak said: "I think everyone can see the economic context we are in, with inflation higher than we'd like it, and it is important in that context that the government makes the right and responsible decisions in things like public sector pay.
"It is very disappointing that junior doctors have taken the decision that they have done. Over half a million people's treatments have already been disrupted and I don't think anyone wants to see that carry on - it's just going to make it harder to bring waiting lists down.
He added: "And I think people need to recognise the economic context we are in, and I am going to make the decisions that are the right ones for the country.
"That's not always easy, people may not like that, but those are the right things for everybody, that we get a grip on inflation, and that means the government not excessively borrowing too much money and being responsible with public sector pay settlements.
"That is what I am going to do and I would urge everyone to see that is the right course of action."
Last week, the Office for National Statistics confirmed inflation was stuck at 8.7% and the Bank of England raised interest rates to 5% - a 15-year high.
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Inflation
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Flair Writing IPO Allotment: Date, Where To Check Allotment Status, Subscription Details
The IPO subscribed 46.68 times on its final day of subscription.
The Flair Writing Industries IPO got a lot of attention on its last day, being subscribed a whopping 46.68 times. Institutional investors subscribed 115.60 times, non-institutional investors subscribed 33.37 times, and retail investors subscribed 13.01 times. This comes after it was 2.17 times on Day 1 and 6.12 times on Day 2.
The IPO is worth Rs 593.00 crores and includes a fresh issue of 0.96 crore shares and a sale of 0.99 crore shares. The share price was between Rs 288 to Rs 304, and you needed at least 49 shares to join. For more details, check the Flair Writing IPO RHP.
Flair Writing IPO Allotment Date
The allotment of shares for Flair Writing Industries Limited is expected to be finalised on Thursday, November 30.
*This is a tentative date and is subject to change.
Flair Writing IPO Listing Date
Shares of Flair Writing Industries Limited are set to be listed on the stock exchanges (BSE & NSE) on Tuesday, December 5.
*This is a tentative date and in subject to change
Where to check Flair Writing IPO allotment status?
Investors can check the allotment status of Flair Writing IPO on the official website of registrar, Link Intime Pvt Ltd and on the official BSE website.
Flair Writing IPO Subscription Status
Subscription Day 3
Total Subscription: 46.68 times
Institutional investors: 115.60 times
Non-institutional investors: 33.37 times
Retail investors: 13.01 times
Subscription Day 2
Total Subscription: 6.12 times
Institutional investors: 1.36 times
Non-institutional investors: 10.05 times
Retail investors: 7.16 times
Employee Reserved: 0.00 times
Subscription Day 1
Total Subscription: 2.17 times
Institutional investors: 0.53 times
Non-institutional investors: 2.78 times
Retail investors: 2.86 times
Employee Reserved: 0.0 times
Flair Writing IPO Timeline ( Tentitive Schedule)
IPO Open Date: Wednesday, November 22
IPO Close Date: Friday, November 24
Basis of Allotment: Thursday, November 30
Initiation of Refunds: Friday, December 1
Credit of Shares to Demat: Monday, December 4
Listing Date: Tuesday, December 5
Flair Writing IPO Issue Details
Total issue size: Rs 3,042.51 Crore
Face value: Rs 2 per share
Offer for sale size: Rs 3,042.51 Crore
Shares for offer for sale: 60,850,278 shares
Price band: Rs 475 to Rs 500 per share
Lot size: 30 Shares
About Flair Writing Industries Limited
Flair Writing Industries Limited, founded in 1976, specializes in making pens and other writing tools for today's changing market. They've received certifications like ISO 9001:2015 and ISO 14001:2015, meeting global business standards.
This company partners with key players in the writing industry and owns brands like FLAIR, HAUSER, PIERRE CARDIN, FLAIR CREATIVE, FLAIR HOUSEWARE, and ZOOX. In the last financial year (2023), they sold 1,303.60 million pens. Most of these (975.30 million, about 75%) were sold in their home country, while 328.30 million (25%) were exported worldwide.
Recently, Flair expanded its business into making household items like casseroles, bottles, storage containers, and cleaning solutions. They did this through a subsidiary called FWEPL.
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Stocks Trading & Speculation
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While some big names like Starbucks and Nike were quick to adopt blockchain technology to promote and work with their brands, it seems that it will still take a bit of work and time until we see the broader enterprise space embrace the tech.
“I haven’t seen any killer use case yet,” Gary Liu, co-founder and CEO of user data solution provider Terminal 3, said during a fireside chat at Korea Blockchain Week. “I think we’re really, really early in enterprise adoption.”
“If the definition of ‘killer’ is a billion users, then I totally agree,” added Yue Hong Zhang, managing director and partner of Boston Consulting Group, where he oversees web3 and digital assets. “I don’t think enterprise blockchain has seen a ChatGPT moment. Everyone talked about AI for so many years, but it became really popular with ChatGPT.”
“ChatGPT is a great example,” Liu said. “AI went through four, five or six phases before that moment […] It’s a great example of the patience necessary before [an event of that scale happens] in the blockchain consumer enterprise world.”
But how can blockchain businesses show traditional corporations and brands that they should invest in the technology? According to Liu, you have to convince them that corporate advantages come before consumer scale. “Marketing and targeting becomes significantly faster,” he said.
An example of this is Cathay Pacific Group, which has been using blockchain technology since 2018 for mileage marketing campaigns. The airline giant also launched a blockchain rewards program for its customers in 2021.
The airline is targeting and using customer information through blockchain technology to run marketing campaigns, Liu said. This means the settlement of mileage points is significantly faster and less manual than other marketing campaigns, which leads to cost savings, he added.
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Crypto Trading & Speculation
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The Bank of England this week is tipped to hike interest rates for the 14th time in a row as it extends its fight against roaring inflation.
Members of the nine-strong monetary policy committee (MPC) are expected on Thursday to back a 25 basis point increase to the UK’s official interest rate, which would send it to 5.25 per cent, its steepest level since March 2008.
Such a move would mark a slowdown from June’s larger 50 basis point jump, a decision taken by the MPC in response to higher than expected core and wage inflation.
There is likely to be some dissent within the group, with one external member, Swati Dhingra, possibly calling for borrowing costs to remain unchanged.
Just a couple of weeks ago, money markets thought Bank governor Andrew Bailey and the rest of the MPC would repeat last month’s chunkier rate increase.
However, a sharper than forecast reduction in headline and core inflation rolled back bets on a larger move. CPI inflation fell to 7.9 per cent in June, bang on the Bank’s forecast and down from 8.7 per cent in the previous month.
Deutsche Bank analysts said a strengthening pound and rapidly falling energy prices means the Bank can afford to ease off the brake a bit.
The Bank is almost certain to revise down its inflation projections in a new set of forecasts this week, indicating Prime Minister Rishi Sunak may meet his goal of halving the cost of living to around five per cent by the end of the year. Growth may receive a downgrade.
There is a chance the MPC will go harder to make sure inflation is finally killed off.
UK interest rates have risen steeply…
“A hike is almost guaranteed. But the magnitude of the hike remains highly uncertain, given the Bank’s June surprise 50 basis point hike,” Deutsche Bank said.
Core and services inflation – which the Bank monitors closely – are still very high at around seven per cent. Wages are also rising at their joint fastest pace on record.
Although the Bank has already tightened borrowing costs at its fastest pace since the 1980s, launching its first rise in December 2021, markets think yet more pain is to come for families and businesses.
Traders reckon two more rate rises are in the pipeline and that they will peak at 5.75 per cent. Cuts aren’t expected until the second half of next year at the earliest.
Experts have voiced their concern about the Bank going too hard in taming inflation at the expense of economic growth. UK GDP is very close to slipping into recessionary territory. Output flatlined in the three months to May.
Interest rate changes take longer to impact the UK economy due to more homeowners since the 2008 financial crisis opting for fixed rate mortgages instead of contracts tied to Bank Rate.
A clutch of survey data of late has suggested the MPC’s prior rate rises are now squeezing economic activity.
Purchasing manager indexes last week showed private sector output is growing at its slowest pace in six months and is just about above the 50 point growth threshold. Data from the CBI today shows private firms expect growth to stall over the coming quarter.
… in order to tame scorching inflation
Last week, the International Monetary Fund said the UK will squeeze out the second lowest rate of GDP growth in the G7 this year of 0.4 per cent, beaten only by Germany.
Mortgage lenders in June and early July – before the rosier than feared inflation print – jacked up rates in response to market rate expectations climbing to as high as 6.5 per cent.
That is expected to have chilled demand in the UK housing market. Bank of England data today is likely to show mortgage approvals fell to around 49,000 in June from over 50,000 in the previous month.
Higher rates may have motivated potential buyers “to rush through the approval process ahead of further anticipated increases in mortgage rates,” Nomura analysts said.
Markets are leaning more in favour of the mortgage demand slowdown story, pricing in a 0.5 per cent monthly drop to the Nationwide house price index out on Tuesday.
More results from Britain’s largest banks this week, including HSBC today, are tipped to illustrate additional players in the sector are benefiting from the Bank’s tightening cycle.
Last week, Barclays, Lloyds and Natwest all said their net interest margin – the difference between what a bank charges borrowers for loans and pays out to savers – fattened up in the first six months of this year.
However, customers yanking their cash from lenders and parking it in vehicles with higher returns partially eroded margins in the latest quarter. The sector has come under pressure from MPs to pass on the Bank’s rate rises quicker.
Shares in Barclays, NatWest and Lloyds Bank all closed lower last week, underperforming the FTSE 100, which added 0.4 per cent to close at 7,694.27 points.
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Interest Rates
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Joe Raedle/Getty Images
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The U.S. is on track to surpass the record-setting 22 million passports issued last year.
Joe Raedle/Getty Images
The U.S. is on track to surpass the record-setting 22 million passports issued last year.
Joe Raedle/Getty Images
Dakotah Hendricks from Virginia Beach, Va. made sure she did everything right in order to visit her husband, who is deployed overseas, this summer.
She filed an application for a new passport months in advance and paid for expedited processing. She spent hours on the phone with the passport hotline and even sought help from her local congressman. But four months later, Hendricks had no choice but to miss her flight.
"I applied for this with enough cushion room for there to be delays," she told NPR. "But that didn't matter."
Across the country, long-awaited reunions and hard-earned vacations are being upended by what the State Department described as an "unprecedented demand for passports."
In March, the department said standard processing time for a new or renewed passport could take up to 13 weeks. But many passport seekers are finding that the wait is well beyond that — leaving trips abroad compromised and travelers scrambling for refunds on airfare and lodging.
The State Department says they receive about 400,000 applications each week
The stubborn passport delays are, in part, a consequence of the pandemic. As the health crisis has waned, interest in international travel has picked up in turn — causing a surge in applications for new or renewed passports.
As of July, the State Department receives about 400,000 applications each week — which is only slightly lower than the record-setting volume of 500,000 applications received per week between January and May.
Last year, the U.S. issued 22 million passports, a historic high — and is expected to once again surpass the record this year.
A spokesperson for the State Department said they are hiring more staff and authorizing overtime in order to keep up with the demand. The department also plans to launch a website for online passport renewal applications by the end of the year. The online option is expected to help process about a quarter of applications.
Long wait times and thousands of dollars lost
Keisha Peterson from Maryland spent a year saving up over $3,000 for a vacation in the Bahamas — her 9-year-old daughter's first trip abroad. They planned to leave on Sunday.
But instead of packing, Peterson said she is finding out whether she can get a voucher or credit for their flights, because her daughter's passport did not come in time.
"I'm feeling disappointed, devastated, frustrated and just emotionally drained," she told NPR. "It should not be this hard to get a passport."
Peterson filed her daughter's application in March. Two weeks ago, she learned that she was missing some paperwork. After submitting the proper documents, Peterson learned on Friday that the department made a mistake about which documents they needed.
The only silver lining, Peterson said, was that her daughter did not know about the trip or that it was canceled, because it was meant to be a surprise.
"What she doesn't know can't hurt her," she said.
Meanwhile, Hendricks rescheduled her flight to a Mediterranean country, where she and her husband planned to meet, for mid-July. Up until recently, Hendricks, a former member of the U.S. Navy, did not need a passport because service members do not need one when they are sent abroad.
Hendricks said if she does not have her passport by then, she will have lost about $2,500, and will be unable to see her husband until he returns from deployment at the end of the year.
"It's my only chance," she said. "The way his schedule works, I don't get a redo."
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Consumer & Retail
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Uruguayan fintech company dLocal saw its stock surge by over 30% on Wednesday on the news that the payments outfit had tapped former Mercado Libre CFO Pedro Arnt as its new co-CEO.
Shares closed up nearly 32% at $20.45, after climbing as high as $24.22 earlier in the day, giving the company a $6 billion valuation.
That surge was on top of an August 15 spike after the company beat earnings estimates in releasing its second-quarter financials. Impressively, dLocal reported revenue of $161 million, up 59% year-over-year and 17% quarter-over-quarter. The company also saw a large jump in profits, reporting gross profit of $70.8 million in the second quarter of 2023, up 43% year-over-year compared to $49.6 million in the second quarter of 2022 and up 14% compared to $61.8 million in the first quarter of 2023.
Looking ahead, dLocal reaffirmed its guidance for the year of revenue between $620 million and $640 million and adjusted EBITDA between $200 million and $220 million.
Founded in 2016, dLocal connects global enterprise merchants with “billions” of emerging market consumers in over 40 countries across Asia-Pacific, the Middle East, Latin America and Africa. Hundreds of global merchants, including e-commerce retailers, SaaS companies, online travel providers and marketplaces use dLocal to accept local payment methods. They also use its platform to issue payments to their contractors, agents and sellers. Some of dLocal’s customers have included Amazon, Booking.com, Dropbox, GoDaddy, Mailchimp, Microsoft, Spotify, TripAdvisor, Uber and Zara.
Earlier this summer, TechCrunch caught up with dLocal co-founder Sergio Fogel, who rejoined the company in June as co-president and chief strategy officer, per a Bloomberg report, “as part of a push to help regain investor confidence and stabilize the company’s stock after it tumbled following a probe in Argentina and a short seller attack.”
Fogel was also among a group of shareholders who had purchased in the aggregate amount of about $160 million of the company’s Class A common shares in open market transactions — $100 million by General Atlantic and about $60 million by Fogel, dLocal co-founder Andres Bzurovski and dLocal chairman Eduardo Azar.
Below is the result of the interview with Fogel, edited for clarity and brevity.
TC: The last time I covered dLocal was in 2021. At the time, the company had raised $150 million at a $5 billion valuation. What has happened since then?
SF: A lot has happened. We went public at $21. The stock jumped immediately to $31 and continued upward till $60+. We crushed the numbers: TPV up 4x+, revenues up 3x+, adjusted EBITDA up 3x+. Then the stock declined with the overall market and was hit hard by a short seller report.
You went public a couple of years ago — obviously before the market took a turn — and we haven’t seen a lot of companies go public since. Do you feel you all made the right decision at that time?
Absolutely. For a payments company, reputation is key, especially for large merchants that we serve. Being a public company that is regulated in many markets gives our customers the confidence that their money is safe and that we comply with the strictest regulations. It has been a bumpy ride, but it was the right decision.
You recently rejoined the company after having stepped away for some time. Why did you come back?
I have been away, but I have never been far. Seba, our CEO, asked me for help, as managing a public company with 800 employees, a presence in 45 geographies and growing at a breakneck pace was taking a big toll on him, and he needed help. He could have hired someone, but we already share a high level of trust, and I know the business well. Of course, I could not say no, and honestly, I was missing the thrill.
When I last covered dLocal, you all described yourselves as a cross-border payments company. How would you describe what dLocal does today besides handling payments across much of Latin America, as well as parts of Africa and Asia, correct?
We expanded the scope a bit. We help the largest internet companies in the world move money in emerging markets. If a large company wants to accept cross-border payments, we’re there for them. If they want to pay their gig workers, we’ll help them. If they want to process payments locally, we will also help them. But we will never handle local payment processing for a local company — that market is well-served. We are uniquely positioned to serve a merchant in multiple geographies, with a high level of security and reliability, with just one agreement, one integration, one reporting platform — what we call “One dLocal.” It may sound trivial, but no other company offers one solution that covers so many different emerging markets.
Our fastest growing geography is actually Africa. We are still growing in all geographies but Africa is the fastest growing and one that we are very excited about because it’s such an underserved market.
What are you attributing the company’s recent revenue growth to?
Being a public company, we can only comment on guidance in the earnings calls and other appropriate forums, so I cannot say anything beyond that. However, I can expand on our revenue growth drivers.
Our first driver of growth is our sales team, who bring in more merchants. Merchants typically take some time to integrate and ramp up, so the growth that we see today is in large part attributed to merchants we signed last year.
A second driver of growth is geography. Our existing customers normally start in one or two countries, and then they expand to more and more countries. But this is dynamic, because we also expand our geographic coverage in response to their plans.
A third driver of growth is new products. For example, this year we launched an invoicing product that allows customers to accept payments without a technical integration.
And the fourth driver is that our customers are growing fast in our markets. While growth in some developed markets may be stalling, emerging markets continue to grow very quickly. These are young populations, with a growing middle class, eager to spend. We are indexed to the growth of our merchants in these geographies.
We are just scratching the surface. On a typical month, 40 million consumers pay through us. That may sound like a lot — until you realize we serve a market of 4 billion people, of which half are connected. We are serving just 1% of that population.
Are you looking to expand geographically anymore? Outside of the regions you’re already serving? How many employees do you have?
We will continue to expand geographically, albeit at a slower pace. But we will continue to be focused on the challenging markets; that is our DNA. We will not expand into the U.S. or Europe, as those markets are well-served and we have no value to add. We still have a lot to grow in the regions we are already in.
There were allegations of fraud late last year that the company denied. What exactly happened?
A short seller issued a report claiming that the company is a fraud and that we had used merchant funds to distribute dividends. Of course, before publishing the report, they took a short position, so they stood to profit from the price decline. The claims were absurd. The company is audited, and under a very high level of scrutiny. We run an external “Safeguarding of Customer Funds” review every year. Still, the audit committee decided to run an external investigation to provide all stakeholders — investors, customers, partners — reassurance about the business. The investigation found no basis for any of the claims.
What’s ahead product-wise? Anything new?
We are very focused on executing our plan. But, like everybody else, we are very excited by the possibilities that AI opens to all businesses and are exploring the area.
Obviously the fintech world has had its ups and downs over the past couple of years. What are your thoughts overall on the payments space?
There is a lot of hype around FedNow, but in my view, the really exciting developments in payments are happening in emerging markets. I would claim that Pix is the most successful initiative launched by any government in any field, anywhere in the world. Pix has taken Brazil by storm. You can pay anyone with Pix, from the largest department store to the smallest lemonade stand. Even beggars on the street take it. Every Latin American country is imitating it. Then you have UPI in India, e-wallets throughout Asia and mobile money, which is well established across Africa.
And this innovation wave is not over. In Brazil, we’ll soon see Pix with installments, open receivables and the Digital Real.
Want more fintech news in your inbox? Sign up for The Interchange here.
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Stocks Trading & Speculation
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The world of blockchain includes many concepts and technologies, the most important of which is Non-Fungible Token or nfts
Although the news about so-called NFTs or NFTs has been one of the most widely reported topics in recent times, still most people have no idea what the phrase means and do not associate it with cryptocurrencies or digital currencies.
What are NFTs or nfts?
The term "non-fungible" refers to tokens that cannot be exchanged for other assets. For example,
Cryptocurrencies are fungible, where one cash can be exchanged for another of the same value, but for NFTs, they are digital assets, each with a different value and cannot be exchanged for other assets. It is based on ether and the cryptocurrency Ethereum is used for purchases.
n Owning an NFT does not necessarily mean that the person has exclusive rights because anything digital can be copied endlessly.
To get closer to the topic, the NFT can be compared to a “Last Supper” painting, where a person can go to a museum and see the painting and even take a picture of it, but they can’t bring the painting home with them because they don’t own it. However, the board that hangs on the wall in your home is like an NFT because it's all yours and you decide what you want to do with them.
Difference between non-fungible and replaceable tokens
All digital currencies or cryptocurrencies such as Bitcoin, Ether, Doge, and other tokens are interchangeable, as each currency can be exchanged for a currency similar to it because both have exactly the same value.
But on the contrary, NFTs are not fungible Tokens are a form of digital asset Since they are not unlike digital currencies that have monetary value Each NFT has a unique valuation that cannot be exchanged for another, as, for example, a house cannot be exchanged With another house on the same street because it has the same area and the same number of rooms.
Non-fungible digital assets (NFTs) are based on blockchain technology
Such as digital currencies, specifically on the same blockchain technology on which the Ethereum blockchain relies, where the technology can store additional information that makes it work in a different way than the Ethereum currency itself, and other blockchain technologies can also provide special versions of their technologies that support NFT as well.
to verify its authenticity and reliability
It relies on blockchain technology, which records the complete history of all its owners, and some see NFTs as digital contracts like various digital contracts.
Many online trading platforms offer non-fungible tokens for sale
The most popular platforms, OpenSea, Rarible, and Mintable, support NFTs. Most of the time, buying an NFT requires having a cryptocurrency, which has to be kept in a digital wallet eg metamask, trust.
You need the currency pegged to Ether (ETH) to buy NFTs as most of them are currently still based on the Ethereum network.
Create your own NFT artwork
All you have to do here is upload a compatible file such as PNG, GIF, WEBP, MP4, or MP3, which will then be automatically converted to NFT.
Your business can be sold directly across the platforms however, you need a digital wallet to upload and sell.
The fact that there is still a lot of mystery surrounding NFT and that it is receiving a lot of criticism raises a lot of questions about entering the industry.
To understand that there is profit and loss in the world of making money on the Internet, and to accept that. is profit and loss.
At the end of the article, we can say
Both NFTs and cryptocurrencies have profoundly and internationally changed society in terms of how we perceive, value, use, and preserve art. This shift is mostly due to the way we prioritize economics, value, currency, and legal accountability. The web is an unstable and dangerous environment, but we cannot ignore its wealth. The world helps people live a better life and handle their own affairs without monopolizing.
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Crypto Trading & Speculation
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The head of the world’s largest retailer just used the D word on an earnings call: deflation.
“In the US, we may be managing through a period of deflation in the months to come,” Walmart Chief Executive Officer Doug McMillon told analysts on an earnings call Thursday.
Granted, prices of Walmart’s US groceries and general merchandise are higher than a year ago, and sharply up on a two-year basis. But McMillon said the increases are slowing and could even begin to reverse.
If that happens, Walmart shoppers could start to see deflation — or a decrease in prices — in dry groceries and consumables in the coming months, he said. General merchandise prices “came down a little more aggressively in the last few weeks or months,” he added.
Even if overall prices don’t fall on an annual basis, McMillon’s comments underscore the slowdown in US inflation after the Federal Reserve ramped up interest rates. That’s a big change from the decades-high inflation that hammered shoppers in the wake of the pandemic.
McMillon, who gets a close-up view of US shoppers on a daily basis, now has to convince Wall Street that Walmart can continue to drive sales and market-share growth as inflation wanes. Potential deflation in basic goods would free up shoppers’ budgets to spend more on general merchandise, he argued — a win for Walmart since those products tend to be more profitable.
Will the retailer lose the higher-income shoppers who flocked to the retailer when inflation jumped?
“It is not working out that way,” GlobalData analyst Neil Saunders said in a research note Thursday. “Americans remain pressured financially and are still looking to make their dollar stretch further — and Walmart is the place many have turned to.”
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Inflation
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Leslie Walker/Tradeoffs
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Open enrollment for Medicare begins Sunday and ads like this billboard inside California's John Wayne Airport are popping up. Marketing of Medicare plans is subject to new, stricter federal regulations this year.
Leslie Walker/Tradeoffs
Open enrollment for Medicare begins Sunday and ads like this billboard inside California's John Wayne Airport are popping up. Marketing of Medicare plans is subject to new, stricter federal regulations this year.
Leslie Walker/Tradeoffs
One minute last December Leslie Montgomery was a medieval warlord pillaging a nearby kingdom. The next she was a retiree drowning in a flood of confusing Medicare sales calls.
The 75-year-old had been deeply immersed in her favorite free online game when a banner ad appeared warning her that she might be missing out on money from the federal government. She clicked, and within minutes, she received an avalanche of calls with health insurance quotes she had never requested.
A batch of federal regulations issued this year aim to protect consumers like Montgomery. Following a sharp rise in complaints of misleading marketing of private Medicare plans and a damning report by Senate Democrats, the Biden administration finalized new rules to rein in deceptive Medicare marketing tactics.
Those reforms face their first big test as Medicare's open enrollment period kicks off. It's an annual chance for the country's 65 million Medicare beneficiaries to shop for higher quality, lower cost insurance coverage.
It's easy to see why Montgomery gets tempted by these kinds of online ads. She's one of about 12 million people in the U.S. whose medical and social vulnerabilities qualify them for both Medicare and Medicaid.
Earlier this year, she was diagnosed with Parkinson's disease, and not long after was evicted from her home in an R.V. park for seniors. The Phoenix, Ariz., resident now lives on just $50 a month of disposable income. So, she clicks.
As insurance brokers peppered her phone last December, Montgomery repeatedly explained that she was interested in the offer of extra cash from the federal government, not in switching plans.
"And they say, 'Well, you have to have the right insurance policy to get it,' " she recalls. As soon as she hears that she hangs up — she doesn't want a new health plan.
"It's extremely frustrating to figure that somebody is there to help you and then you find out they're not there to help you," Montgomery says. "They're basically there to shaft you."
Get trustworthy help shopping for Medicare plans
Too many options, too little information and an alarming level of deception
Open enrollment — which runs from Oct. 15 to Dec. 7 this year — allows seniors to choose a new Medicare plan if they wish.
"It's a potentially high stakes decision with really important implications for beneficiaries' health and finances," says Gretchen Jacobson, a vice president at the Commonwealth Fund, a private foundation that also conducts health policy research.
Research shows that picking a flawed plan can waste seniors' often limited income, and even lead people to get lower quality care or leave lifesaving prescriptions unfilled. Some of the enrollment choices people make can also be hard and expensive to undo down the road.
Yet, the Kaiser Family Foundation estimates that only about a third of people compare plans during this annual two month window.
Medicare shopping is tough.
In addition to the traditional Medicare coverage offered by the federal government, the average person can now choose from more than 60 other products, including Medicare plans run by private insurers (known as Medicare Advantage) and separate prescription drug coverage.
Every fall, millions of Medicare shoppers are bombarded by information about these dozens of options — and that information is often incomplete and in some cases fraudulent.
Private insurers and brokers ran more than 640,000 commercials on TV alone last fall. Yet, two out of three seniors still say they would like to learn more about their options.
"It's both too much information and too little information all at once," says Brandon Wilson, a senior director at consumer advocacy group Community Catalyst.
Paid marketing skews heavily toward Medicare Advantage, which is more than twice as profitable for private insurers than any other type of coverage they offer. Nearly 9 out of 10 TV ads that ran last fall focused on Medicare Advantage, according to the Kaiser Family Foundation.
A new survey by the Commonwealth Fund also found that deceptive marketing tactics further muddy the waters. Three-quarters of respondents reported receiving unsolicited calls, which are federally prohibited. Half said they'd received information about a specific plan from the government, which does no such outreach.
"We were very surprised," says Jacobson, who led the research. "What was really concerning was that low-income people consistently reported these activities more frequently than higher-income people across almost every measure that we asked about."
Nearly a third of people living on less than $25,000 a year reported that an ad had misled them. The same group was twice as likely as peers with higher incomes to say they'd felt pressured to switch coverage.
People with low incomes who are eligible for both Medicare and Medicaid have even more options in the form of special Medicare Advantage plans called Dual-Eligible Special Needs Plans. These offerings often include extra benefits, but can increase confusion. This year the situation is even trickier as many pandemic-era protections that kept people enrolled in Medicaid are ending.
New regulations target deceptive ads, but still leave seniors vulnerable to aggressive sales pitches
Insurance brokers and agents are a top source of advice as older adults attempt to navigate this enrollment maze, but the information they offer is incomplete.
Private insurers pay these third party intermediaries commissions that can range from $50 to $762 per sign-up and other unreported payments to push certain plans. Brokers and agents are not legally required to present clients with all available options in their area.
"Their compensation is not always aligned with how they would like to advise beneficiaries," Jacobson says, pointing to findings from focus groups conducted with insurance brokers.
Greg Montgomery
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Leslie Montgomery got help weighing her Medicare options from the nonprofit Medicare Rights Center. She knows these decisions can be treacherous for some seniors. "I do my research on things, but somebody who doesn't do that can really get themselves into a lot of bad trouble," she says.
Greg Montgomery
That disconnect is especially true for lower income clients, Jacobson noted. Advising potential clients to stick with traditional Medicare generates little to no money for the broker — unless the person purchases private insurance to supplement their government coverage.
"So when a low-income person talks with a broker, for the most part, the only avenue for that broker to make money is to enroll that person in a Medicare Advantage plan," Jacobson says.
That means, just like with advertisers, people cannot assume brokers are painting a full, unvarnished picture of their coverage options. The details of Medicare Advantage plans are especially important for consumers to understand since they can restrict people's access to certain doctors and drugs more than traditional Medicare coverage does.
"This research highlights the need to make more trusted, neutral resources available," says Brandon Wilson of Community Catalyst referring to the new Commonwealth survey.
Help for seniors navigating a confusing landscape
Leslie Montgomery was able to turn to one of those trusted resources — a helpline run by the nonprofit Medicare Rights Center — earlier this year.
Another alluring ad had caught her eye — this time on a postcard in her stack of mail, and she wanted to run it by an expert.
A trained helpline volunteer helped Montgomery weigh the new plan's shiny offer of $100 per month to spend on vitamins, aspirin and other over-the-counter items against the benefits of her current coverage. She realized she was better off staying put.
The Medicare Rights Center says its call volume spikes by about a third around open enrollment. Still, people are far more likely to make enrollment decisions alone or turn to brokers than to use unbiased helplines or the federal government's plan comparison tool.
Recent regulatory changes by the Biden administration aim to elevate the overall quality and transparency of promotional materials.
New restrictions limit how the Medicare logo and name can be used. The federal government has also cracked down on misleading promises of cost savings and on the use of superlatives like "best" or "most."
Despite these efforts, many people on Medicare remain confused by what constitutes fraud and 90% of seniors in the Commonwealth survey report they do not know how to file a federal complaint about Medicare marketing.
Sen. Ron Wyden also recently announced that the Senate Finance Committee will hold a hearing about deceptive marketing practices on October 18, suggesting that lawmakers also believe that further reforms might be needed.
In the meantime, Medicare experts and advocates say more federal funding should go toward State Health Insurance Assistance Programs, which received $55 million this year — less than a dollar per Medicare beneficiary — to provide free, local one-on-one counseling. They have also called for more reforms to broker compensation, such as requiring reporting of bonus payments or making sales commissions equal across all plan types.
Leslie Montgomery still believes in the importance of open enrollment as a chance for seniors to stretch their often limited dollars.
She also knows how treacherous a time it can be.
"I do my research on things, but somebody who doesn't do that can really get themselves into a lot of bad trouble," Montgomery says.
This story comes from the health policy podcast Tradeoffs, whose coverage of complex care is supported, in part, by Arnold Ventures. Dan Gorenstein is Tradeoffs' executive editor, and Leslie Walker is a senior reporter/producer for the show, where a version of this story first appeared.
Carmel Wroth edited this story for NPR.
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Consumer & Retail
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Higher Primark prices have been credited with bolstering sales growth at the retailer, allowing its parent firm to raise its annual profit forecasts.
Associated British Foods (ABF) said the fashion business was boosted by warm weather in the UK and abroad during the 12 weeks to 27 May, with the UK arm outperforming.
Primark reported a 13% jump in sales to £2bn, with health and beauty products in high demand along with summer fashion.
Like-for-like sales, a measure which strips out the effects of new store openings, were up 7% on the same period last year.
AB Foods, which also owns major sugar, grocery, agriculture and ingredients businesses, said it now expected full-year adjusted operating profit to be "moderately ahead" of the £1.435bn made in 2021/22.
That was up from an earlier forecast that was broadly in line with the previous year.
The group said sales in its grocery arm, which includes Twinings tea, Jordans cereals and Ovaltine drinks, rose 13% to just over £1bn over the three months.
That was driven by price rises implemented earlier in the year to offset input cost increases.
It was the latest consumer-facing business to report resilient trading in the face of the evolving cost of living crisis, with the government moving to ensure prices are fair as stubborn inflation threatens the economy.
Primark rival Next raised its own sales and profit guidance just last week, telling investors that trading had exceeded expectations on the back of warmer weather and consumers' wage increases.
ABF finance chief Eoin Tonge told the Reuters news agency: "The doom and gloom (commentary) has been around now for almost 12 months and the consumer continues to outperform the doom and gloom.
"Most of our markets kicked in when the sun started to shine," he added.
It is not the kind of trading update the Bank of England and government will want to see given efforts to curb inflation.
It is hoped that interest rate hikes, forcing up borrowing costs such as mortgages, will quell demand and therefore stubborn price hikes in the economy.
The Competition and Markets Authority (CMA) is already investigating the grocery and fuel sectors to check whether prices fairly reflect the easing in wholesale costs witnessed since the spikes caused by Russia's war in Ukraine early last year.
The governor of the Bank of England, Andrew Bailey, has previously accused elements of the food supply chain of rebuilding their margins.
Retail, and other sectors, argue some cost pressures remain across the supply chain including over availability, energy and wages.
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Consumer & Retail
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Small Regional FMCG Players Make A Comeback, Grabbing Shares From Big Companies
Several listed FMCG companies, including HUL, Godrej Consumer Products, Marico, Britannia, and Tata Consumer Products, in the September, mentioned the competition from small players, forcing them to go for price revision.
Small regional FMCG players, which reemerged in the market after the cooling of inflation, are giving tough competition to big players, impacting their share in their pocket of influence as well as forcing larger rivals to go for a price revision in segments such as soaps, tea, detergent and biscuits.
Several listed FMCG companies, including HUL, Godrej Consumer Products Ltd, Marico, Britannia, and Tata Consumer Products Ltd, in the September quarter earning calls, mentioned the competition from small players, forcing them to go for price revision.
When inflation is high, smaller players just go out of business, because they cannot compete with the cost structures, which are mainly around giving much higher margins, giving bigger discounts, said Britannia Industries Vice Chairman and Managing Director Varun Berry in an investors call.
But once the commodity prices start to come down, they again start to give big discounts and big margins, he added.
"On one side, you have got the larger players who are obviously much stronger brands, but they are losing out to the smaller players because of the price play and the grams in bag, etc. On the other side, you have got these guys who are throwing money in the market, so we do not want to be caught in this logjam. Only if we find a way to balance and make money out of this will we move forward."
Tata Group FMCG arm TCPL also reported a little bit of an upsurge in local regional brands in tea.
"In tea, there are small and regional players. Yes, there is some amount of trading down and there is a higher intensity of small local traders," TCPL Group CFO L Krishnakumar told PTI after the quarter results.
However, he also added, unlike other businesses, small players were always been there in tea because part of tea is unbranded. It is not a new phenomenon for tea, unlike some other category.
"But yes, we are seeing because of people trading down, especially in the rural market, there is an element of aggressiveness by smaller players, but it has not affected us in a material way because our premium segment is growing," he said.
Marico MD & CEO Saugata Gupta said smaller players are active and there is a higher competitive intensity in the market.
"Amidst the current cost scenario, the sector also witnessed much more active participation from smaller local players in select mass categories. However, pricing cuts taken by frontline FMCG companies to pass on value to consumers should aid recovery and volume growth over the next few quarters," he said.
Godrej group firm GCPL, makers of Godrej NO 1 and Cinthol, said soap category local players are coming back. Earlier, it had a lot of local competition nearly two decades ago but has dwindled since then.
"Even for other categories, it has shrunk while they still remain large. So, it is possible that the margin in soaps with these kinds of low prices are affecting volumes. It is certainly not in the large major states; maybe in some parts of Eastern MP, Bihar, Orissa, there is a local player," said GCPL Managing Director Sudhir Sitapati in an investor call.
HUL Chief Executive Officer and Managing Director Rohit Jawa said FMCG market continues to witness heightened competitive intensity.
"We are seeing the resurgence of small and regional players in select categories and price-points, many of whom had vacated the market during the peak of inflation. For instance, when you look at Tea or Detergent bars, smaller players are growing significantly ahead of large players," Jawa told investors.
Nielsen IQ in its latest report for the September quarter said: "Looking at the broader FMCG industry, small manufacturers are experiencing faster growth rates in the Non-Food categories when compared to their Large counterparts while for the Food category, Large players are growing faster in volume than Small players."
The FMCG industry in India had an overall 8.6% volume growth in the September quarter, helped by higher consumption as the inflationary pressure eased, according to the report by data analytics firm.
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Consumer & Retail
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We independently selected these products and deals because we love them, and we think you might like them at these prices. E! has affiliate relationships, so we may get a commission if you purchase something through our links. Items are sold by the retailer, not E!. Prices are accurate as of publish time.
A beautiful bouquet of flowers is a classic gesture that never gets old. Of course, your mom would adore some flowers for Mother's Day. If you went to place an order, picked the most magnificent arrangement, and got overwhelmed by the price point, same here. Unfortunately, flowers can be pretty expensive at times. However, if you are a savvy shopper who loves hunting for a deal, you can find some reasonable prices.
And, if you don't have the time for that, no worries, I did all the research so you don't have to. Here are the best Mother's Day flower deals I've found from 1-800 Flowers, LovePop, Urban Stems, Terrain, FTD, Rose Box NYC, and Ode à la Rose.
Mother's Day Flower Deals
FTD: Shop Bouquets Under $50
If you're looking for beautiful flower arrangements at a reasonable price, FTD has Mother's Day flowers for $50 and under.
1-800 Flowers 40% Off Deals
Get ahead on your gift shopping. If you shop early, you can save 40% on Mother's Day flower arrangements, no promo code needed.
Lovepop: 5 for $50
Lovepop Flowers have the same intricate detailing as Lovepop's greeting cards and are allergy-friendly, portable and will never wilt. Prices start at $24, but you can also shop the 5 for $50 promotion. This means you can really spoil your mom, or you can spread that Mother's Day love around to grandmothers, in-laws, stepmoms, and other motherly figures in your life. This tulip Mother's Day card is a great pick for your mom.
Terrain: Bouquets Starting at $68
Shop wreaths, bunches, and home and garden essentials from Terrain for Mother's Day. Bouquets are available starting at $68.
Urban Stems: Bouquets Under $45
It's the thought that counts when it comes to gift giving. You don't have to buy the most expensive bouquets. Urban Stems has an option to select Mother's Day flowers by price, with many beautiful flowers available for less than $45. This pink arrangement is sophisticated and stunning.
Ode à la Rose: Everlasting Arrangments
Ode à la Rose has everlasting dry arrangements and preserved roses that will last (in perfect condition) for a full year. If your mom loves all roses, get her the Lucille arrangement full of peach, pink, and white preserved roses.
Personal anecdote: I've had a preserved roses arrangement from Ode à la Rose for 3+ years and it still looks perfect. These are a bit pricey upfront, but they are absolutely worth the investment.
Rose Box NYC- 30% Off
If mom loves roses, she will adore these everlasting arrangements from Rose Box NYC. Right now, you can save 30% sitewide. There are so many beautiful arrangements to choose from in many colors.
If you're looking for more Mother's Day gift picks, check out these deals from Nordstrom Rack, Kate Spade, and more.
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Consumer & Retail
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A charity that helps victims of sexual exploitation has refused £10,000 originally raised to help Eleanor Williams, convicted this week of lying about being trafficked by an Asian grooming gang and making false rape claims.Maggie Oliver said it would be “unethical” for her charity to accept any of the money. Oliver is a former Greater Manchester police (GMP) detective who rose to prominence as a whistleblower on sexual exploitation in Rochdale.The Maggie Oliver Foundation was one of two charities that were to split £20,000 crowdfunded for Williams if she did not use it to bring her alleged abusers to justice.Williams’s case came to public attention in May 2020 when a Facebook post she made recounting the allegations went viral, along with graphic photographs of injuries she said she had suffered in the attacks. The post, from May 2020, was liked by more than 100,000 people and shared by a number of public figures, including Oliver. She said she never spoke directly to Williams but introduced her to lawyers at the Centre for Women’s Justice.“Ultimately she decided she wanted to stick with her original legal representation. Since then, I’ve had no contact with the family,” said Oliver. “We are not accepting any money from [the crowdfunder] because I just don’t think it would be ethical.”Maggie Oliver, the founder of the Maggie Oliver Foundation, which supports victims and survivors of sexual abuse. Photograph: Ian West/PAShe added: “I shared Ellie’s original Facebook post because I see cases like hers a lot. Not injuries like that, but victims who are being pushed away from the system and are desperate to be heard.”More than 1,000 people donated £22,129 to “get justice for Ellie” via a JustGiving page. After JustGiving subtracted its fees, the final amount stood at £21,104.Shane Yerrell, a Conservative councillor from Essex, said he started the crowdfunder in good faith because Williams’s story “filled me with sadness to think that a young girl could have been through such a terrible ordeal”.When he discovered that Williams had been charged with perverting the course of justice and lying about various men – including a teenager from Barrow-in-Furness, Jordan Trengove, who spent 10 weeks in prison on remand – he decided to put caveats on the money raised.Before handing over the final sum to Williams’s mother, Yerrell drew up a contract that said the Williams family could spend £1,204 “on counselling or holistic therapy treatment” for her. The remaining £20,000 could only be spent on legal advice to help Williams bring her alleged abusers to justice.If no prosecution was brought by 23 July 2023, the money was supposed to be split between the Maggie Oliver Foundation and Women’s Community Matters, a charity that helps victims of sexual and domestic violence in Barrow.There is some controversy over whether Women’s Community Matters should get the money, because Williams’s grandmother, Anne Burns, is one of the charity’s trustees. Burns is deputy leader of the Labour group on Cumbria county council and cabinet member for children’s services.Trengove said he would like the money to go to victims of miscarriages of justice. “If it was my choice, I would like to give it to a charity for people who are falsely accused, or to give counselling for people who went through an ordeal like me. I didn’t get any help,” he said.Allison Johnston, Williams’s mother, told the Guardian: “I still have all of the money. I understand that Shane is currently speaking to WCM and a decision is pending awaiting confirmation from the charity. When that has happened, a plan will be made with Shane to move forward with the donation.”Yerrell said he was “deeply sad” about the verdicts. “Innocent men have had their lives turned upside down and their reputations destroyed,” he said.Oliver was a key character in Three Girls, a BBC dramatisation of the Rochdale grooming case. During Williams’s 13-week trial, the prosecution said she concocted lies about an Asian grooming gang after watching Three Girls, as well as the Liam Neeson film Taken, which tells the story of a girl kidnapped by sex traffickers.Williams’s case is extremely unusual, said Oliver: “I would still believe a victim if they came forward. It is then the job of the police to investigate. In this case, Ellie has been found guilty by a jury which heard all the evidence after a thorough police investigation. I wish every victim of abuse had their claims so thoroughly investigated.”Women’s Community Matters did not respond to a request for comment.A JustGiving spokesperson said: “We operate and enforce very strict fraud policies, which is why JustGiving is a trusted place for millions of people to raise and donate money for the causes they care about.“This page closed in 2020 and we do not hold the funds in question. We are supporting the page owner and understand he is trying to recoup the funds and distribute them to an appropriate registered charity.”
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Nonprofit, Charities, & Fundraising
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Sonja Foster/KFF Health News
toggle caption
When Kristie Fields was undergoing treatment for breast cancer nine years ago, a nurse suggested she go on the local news and ask for help with her medical bills. Fields says she and her husband quickly dismissed the idea.
Sonja Foster/KFF Health News
When Kristie Fields was undergoing treatment for breast cancer nine years ago, a nurse suggested she go on the local news and ask for help with her medical bills. Fields says she and her husband quickly dismissed the idea.
Sonja Foster/KFF Health News
When Kristie Fields was undergoing treatment for breast cancer nine years ago, she got some unsolicited advice at the hospital: Share your story on the local news, a nurse told her. Viewers would surely send money.
Fields, a Navy veteran and former shipyard worker, was 37 and had four kids at home. The food processing plant where her husband worked had just closed. And Fields' medical care had left the family thousands of dollars in debt.
It was a challenging time, says Fields, who has become an outspoken advocate for cancer patients in her community. But Fields and her husband, Jermaine, knew they wouldn't go public with their struggles. "We just looked at each other like, 'Wait. What?'" Fields recalls. "No. We're not doing that."
It was partly pride, she says. But there was another reason, too. "A lot of people have misperceptions and stereotypes that most African American people will beg," explains Fields, who is Black. "You just don't want to be looked at as needy."
Health care debt now burdens an estimated 100 million people in the U.S., according to a KFF Health News-NPR investigation. And Black Americans are 50% more likely than white Americans to go into debt for medical or dental care.
But while people flock to crowdfunding sites like GoFundMe seeking help with their medical debts, asking strangers for money has proven a less appealing option for many patients.
Black Americans use GoFundMe far less than white Americans, studies show. And those who do typically bring in less money.
The result threatens to deepen long-standing racial inequalities.
"Our social media is inundated with stories of campaigns that do super well and that are being shared all over the place," says Nora Kenworthy, a health care researcher at the University of Washington in Bothell who studies medical crowdfunding. "Those are wonderful stories, and they're not representative of the typical experience."
In one recent study, Kenworthy and other researchers looked at 827 medical campaigns on GoFundMe that in 2020 had raised more than $100,000. They found only five were for Black women. Of those, two had white organizers.
GoFundMe officials acknowledge that the platform is an imperfect way to finance medical bills and that it reaches only a fraction of people in need. But for years, health care has been the largest category of campaigns on the site. This year alone, GoFundMe has recorded a 20% increase in cancer-related fundraisers, says spokesperson Heidi Hagberg. As Fields learned, some medical providers even encourage their patients to turn to crowdfunding.
The divergent experience of Black patients with this approach to medical debt may reflect the persistent wealth gap separating Black and white Americans, Kenworthy says. "Your friends tend to be the same race as you," she says. "And so, when you turn to those friends through crowdfunding for assistance, you are essentially tapping into their wealth and their income."
Nationally, the median white family now has about $184,000 in assets such as homes, savings, and retirement accounts, according to an analysis by the Federal Reserve Bank of St. Louis. The assets of the median Black family total just $23,000.
But there is another reason Black Americans use crowdfunding less, Fields and others say: a sensitivity about being judged for seeking help.
Fields is the daughter of a single mom who worked fast-food jobs while going to school. The family never had much. But Fields says her mother gave her and her brother a strict lesson: getting a hand from family and friends is one thing. Asking strangers is something else.
"In the Black community, a lot of the older generation do not take handouts because you are feeding into the stereotype," Fields says.
Her mother, whom Fields says never missed paying a bill, refused to seek assistance even after she was diagnosed with late-stage cancer that drove her into debt. She died in 2019.
Confronting the stereotypes can be painful, Fields says. But her mother left her with another lesson. "You can't control people's thoughts," Fields said at a conference in Washington, D.C., organized by the National Coalition for Cancer Survivorship. "But you can control what you do."
Fields says she was fortunate that she and her husband could rely on a tight network of relatives and friends during her cancer treatment.
"I have a strong family support system. So, one month my mom would take the car payment, and his aunt would do the groceries or whatever we needed. It was always someone in the family that said, 'OK, we got you.'"
That meant she didn't have to turn to the local news or to a crowdfunding site like GoFundMe.
UCLA political scientist Martin Gilens says Fields' sensitivity is understandable.
"There's a sort of a centuries-long suspicion of the poor, a cynicism about the degree of true need," says Gilens, who is the author of Why Americans Hate Welfare.
Starting in the 1960s, that cynicism was reinforced by the growing view that poverty was a Black problem, even though there are far more white Americans living in poverty, according to census data. "The discourse on poverty shifted in a much more negative direction," Gilens explains, citing a rise in critical media coverage of Black Americans and poor urban neighborhoods that helped drive a backlash against government assistance programs in the 1980s and '90s.
Fields, whose cancer is in remission, resolved that she would help others sidestep this stigma.
Sonja Foster/KFF Health News
toggle caption
Kristie Fields recently opened a nonprofit store to provide low-cost supplies, including wigs, to cancer patients around Suffolk, Virginia.
Sonja Foster/KFF Health News
Kristie Fields recently opened a nonprofit store to provide low-cost supplies, including wigs, to cancer patients around Suffolk, Virginia.
Sonja Foster/KFF Health News
After finishing treatment, she and her family began delivering groceries, gas cards, and even medical supplies to others undergoing cancer treatment.
Fields is still working to pay off her medical debt. But this spring, she opened what she calls "a cancer care boutique" in a strip mall outside downtown Suffolk. PinkSlayer, as it's called, is a nonprofit store that offers wigs, prosthetics, and skin lotions, at discounted prices.
"The one thing my mom always said was, 'You fight whatever spirit that you don't want near you,'" Fields said as she cut the ribbon on the store at a ceremony attended by friends and relatives. "We are fighting this cancer thing."
In one corner of her small boutique, Fields installed a comfortable couch under a mural of pink and red roses. "When someone is in need, they don't want to be plastered all over your TV, all over Facebook, Instagram," Fields explained recently after opening the store. "They want to feel loved."
KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues.
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Nonprofit, Charities, & Fundraising
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At least 26 councils in some of the poorest areas of the country are considering declaring effective bankruptcy within the next two years, it has emerged.
A survey of 47 local authorities in the North, the Midlands and on the South Coast revealed a severe strain on finances driven by the depletion of cash reserves available to cover gaps in budgets.
Five members of the Special Interest Group of Municipal Authorities (Sigoma) said they were in the process of deciding whether to issue a section 114 notice of their inability to balance their annual budget in 2023/24.
Another nine said they may have to declare bankruptcy next year.
Nadine Dorries refuses to confirm she will vote Tory at next general election - latest updates
Sigoma said it was the first time many member councils were considering issuing a section 114 notice, which freezes all non-essential spending.
It said it understands at least 12 other councils across the country are now considering issuing a section 114 notice in 2023/24.
Councils said the most common cause of financial pressures was demand for children's social care services following requests from the government to treat those services as an equal priority with adult social care, and allocate additional funding.
Other significant factors cited were inflation costs and wage rises, with warnings an imminent increase in the cost of borrowing is set to add further financial pressure.
The first S114 notice was issued by Hackney Council in 2000 and Northamptonshire County Council followed suit in 2018.
But since then councils have begun declaring bankruptcy at an unprecedented rate, with S114 notices recently issued by Conservative-run councils Thurrock and Woking and Labour-run Croydon and Slough.
Sir Stephen Houghton, Labour leader of Barnsley Council and Sigoma chair, said: "The government needs to recognise the significant inflationary pressures that local authorities have had to deal with in the last 12 months.
"At the same time as inflationary pressure, councils are facing increasing demand for services, particularly in the care sector.
"Pay increases are putting substantial pressure on budgets, and so the government must ensure that local authorities have the additional funding they need to fully fund these pay increases or risk impacting future service delivery.
"The funding system is completely broken. Councils have worked miracles for the past 13 years, but there is nothing left."
A government spokesperson said: "Councils are ultimately responsible for the management of their own finances.
"However, the government has been clear that local authorities should not take excessive risk with taxpayers' money, and we have established the Office for Local Government to improve the accountability for performance across the sector."
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Inflation
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Wales could cut child poverty by introducing Scotland's £25 per week payment for poor families, experts have said.
The Scottish Child Payment is having a substantial effect on child poverty levels, according to Oxford University and the Joseph Roundtree Foundation.
The payment, introduced in 2021, can be claimed by families on Universal Credit and about 300,000 children get it.
The Welsh government said it had no control over social security in Wales.
In Scotland, children are entitled to £25 a week, regardless of how many children there are in a family. This means families get a total of £1,300 per child each year.
Every child under the age of 16 is entitled to it and other benefits are not affected by families receiving the money.
Chris Birt, associate director for the Joseph Rowntree Foundation in Scotland, said it had been a huge help for families, who told the charity "it allows us to put the heating on in October".
He added: "But anyone who's got kids will understand kids want to be out with their pals, they want to be involved in activities around the schools.
"They want to go and play football, do dancing, do art, whatever it is, and the Scottish Child Payment will also say to parents 'well you do have that extra few quid this week for your child to be able to go out with their pals on Saturday'⦠and so it makes a real practical difference."
Prof Danny Dorling of Oxford University said the Scottish payment was the most significant attempt to tackle child poverty seen anywhere in Europe since the fall of the Berlin Wall.
"It is clearly the most direct way to help people. The parents of children, and especially their mothers, are the people who have their interests most at heart," he said.
"So any talk that says that some other method is better, is going against all the evidence that we've collected for decades, which says you have to hand money directly to the families of those who are poorest. They use it most wisely."
But the Scottish Child Payment carries a hefty bill - about £428m in the current financial year out of a Scottish budget of nearly £60bn.
Scotland has its own benefits system, making it easier to target families who need it whereas Wales does not.
What do the politicians say?
The Welsh government said: "Unlike Scotland, the Welsh government does not have the legislative powers to enable us to make a payment similar to the Scottish Child Payment, as powers over social security remain with the UK government.
"We have repeatedly called on the UK government over the last 13 years to do more to live up to their responsibilities and support families on lower incomes in Wales.
"We continue to do all we can to support people through the cost-of-living crisis by providing targeted help to those who need it most. During 2022-23 and 2023-24 this support is worth more than £3.3bn."
But Prof Dorling said it could be brought in in Wales, perhaps paid via councils, if ministers wanted to do so.
He said: "In Scotland in began with only £10 a week and only for children under the age of six, and if it were to happen in Wales, I would expect it would begin, first of all with that. It's really not a question of money."
Welsh Conservative social justice spokesman Mark Isherwood said: "It is important to review and examine any new evidence that is presented to help end child poverty and until the evidence is appropriately scrutinised, we cannot say whether the additional £25 payment would be beneficial or not.
"Since devolution the Labour government have thrown billions of pounds into eradicating child poverty yet the parts of Wales with the highest child poverty before devolution continue to have the highest levels of child poverty today.
Plaid Cymru spokeswoman for social justice and equalities, Sioned Williams, said: "Plaid Cymru is fully supportive of a Child Payment system, like the approach taken in Scotland, as this is proven to be effective in lowering child poverty rates.
"One in three children in Wales are living in poverty. Tackling this injustice is fundamental to the type of Wales that Plaid Cymru wants to see, where the harms of poverty are eradicated."
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Inflation
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Welcome back to Chain Reaction.
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It’s week four of the Sam Bankman-Fried trial…and he’s taking the stand today at 2 p.m. So keep an eye out for additional coverage.
This marks the second time Bankman-Fried has spoken out publicly in the courtroom after saying “yes,” on the first day in response to Judge Lewis Kaplan asking if he understood he had the right to testify if he wanted to.
This is the first day the defense presented their arguments after multiple weeks of prosecutors making their case with rising sheafs of evidence.
The prosecutors rested their case around 10 a.m. on Thursday. Mark Cohen, Bankman-Fried’s lead lawyer, requested a motion for acquittal on all seven counts against his client, calling the government’s case on the charges “insufficient” with “materiality not shown.” Prosecutors opposed the motion and Judge Kaplan declined it.
The trial was on recess from October 20 until today. But Wednesday morning, there was a virtual hearing between Judge Lewis Kaplan, the prosecutors and defense to frame the rest of the case.
During the call, Cohen said that the defense has three potential witnesses and added “our client will be testifying.” Before the defense makes their case, the prosecutors plan on bringing out one more witness, FBI agent Marc Troiano, to “summarize certain documents” focused on FTX and Alameda, Assistant United States Attorney Thane Rehn said.
The defense also filed a letter to Judge Kaplan on Wednesday requesting permission to ask Bankman-Fried’s “good faith” about certain elements of FTX and Alameda. Some of the events regarded internal and external legal counsel implementing data retention policies, like auto-deletion policies for Slack and Signal, as well as loans made from FTX and Alameda to executives, drafts of terms and services and other areas.
“Bankman-Fried’s understanding that auto-deletion policies were instituted under the guidance of lawyers would be directly relevant to rebut the inference that these policies were instituted for improper purposes,” the defense letter wrote.
Cohen said on the virtual call he expects Bankman-Fried’s testimony to be the same length as that of his former colleagues, who pleaded guilty: FTX co-founder and CTO Gary Wang, Alameda CEO Caroline Ellison and FTX head of engineering Nishad Singh. He also said that it will take a “good part of Thursday, maybe all of Thursday,” with potential for Friday cross-examination.
Even though the trial was on pause, details were still transpiring, and we were still putting out more content. Details below.
SBF trial
- As SBF plans to testify, former SDNY federal prosecutor sees it as a ‘Hail Mary’ (TC+)
- Ex-SDNY prosecutor says Caroline Ellison, Gary Wang and Nishad Singh probably won’t get jail time
- Third Point managing director doubles down on SBF investor fraud in trial testimony
This week in web3
If you’re getting SBF trial fatigue, here are some articles on what else is happening in the wild world of web3.
- Bitcoin is now worth over $34,500 — but will it hold? (TC+)
- Walmart and Outlier Ventures’ web3 accelerator launches with five startups
- There’s ‘great hope’ for bitcoin spot ETF approval in 2024, says Bitwise’s general counsel (TC+)
The latest pod
He’s a longtime attorney who represents companies, boards and executives in cases for white-collar criminal defense, regulatory enforcement matters, internal investigations, crisis management and more.
Prior to Pallas Partners, Josh was a federal prosecutor and served over a decade as assistant U.S. attorney in the U.S. Attorney’s Office for the Southern District of New York. While at the SDNY he led a number of government white-collar prosecutions and trials, and was a senior member of SDNY’s Securities and Commodities Fraud Task Force. Josh handled situations ranging from cryptocurrency to insider trading and market manipulation to corporate and accounting fraud. His work also involved coordination with other agencies like the SEC, CFTC and FBI.
While at the SDNY, Josh secured convictions in every federal criminal trial that he led as an assistant U.S. attorney. So we saw him as the perfect person to dive into the eye-grabbing trial of Sam Bankman-Fried, who is fighting seven charges related to money laundering and fraud. SBF’s trial is also taking place at SDNY where Josh worked.
We talked about all the nitty-gritty details of SBF’s trial: the prosecution’s strategy, the defense’s strategy, how this case compares to ones that Josh previously led and how likely it is that jurors will reach a guilty verdict.
We also talked about:
- How many years SBF could face
- Importance of jurors
- Best witness testimonies so far
- Sentencing for other FTX execs
- Why he thinks SBF will testify
Follow the money
- Avalanche-focused gaming studio Neon Machine closed a $20 million Series A round
- Singapore-based crypto payments startup Triple A raised $10 million in a Series A round
- Ethereum onchain privacy startup Nocturne raised $6 million in a seed round
- Binance led $12 million funding round for InfinityStakeChain
- Web3 healthcare platform Rymedi raised $9 million in a Series A
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.
- Why 42 states came together to sue Meta over kids’ mental health
- AI is finally resulting in real growth for Big Tech (TC+)
- Carta’s CEO reaches out to customers about bad press, alerting them to bad press
- Will X’s addition of audio and video calling create stickiness in the app?
- Robotaxis ‘do not belong in the city of Los Angeles,’ lawmaker says
Follow me on Twitter @Jacqmelinek for breaking crypto news, memes and more.
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Crypto Trading & Speculation
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After the BBC published a story in January about how a man was sent dog food by Amazon instead of the iPhone he ordered, dozens of readers have been in touch with similar complaints.
Many of those we spoke to told of high-value products such as cameras and computer kit being swapped for low-value items like cat food or face masks. Here, we share a selection of readers' experiences.
"When I opened the box, I was hit by a wave of panic, I was shocked to see Felix cat food," Jonathan said.
"I was very anxious, as I knew it was not going to be easy to get my money back."
He had purchased a Sony Alpha 6-400 camera, priced at £900, and a Tamron telephoto lens priced at £520, on 8 September. The order had a combined value of £1,420.
Jonathan said when the delivery driver arrived with the package, it "looked normal" at first sight, so he gave the driver a one-time-code, and accepted the parcel.
I suddenly heard screaming and crying - he had unwrapped his present to find a box of pink surgical face masks.
Because Jonathan had signed for the delivery, Amazon initially refused to refund the sum.
However, after multiple conversations with different staff in the complaints department they decided to allow it to go through, he said.
Although he received a replacement lens within a couple of weeks, they no longer had the camera in stock, so he had to wait more than three weeks for a £900 refund.
An Amazon spokesman said: "We're sorry that some customer experiences have fallen short of the high standards that we expect."
Heather from Glasgow, described the "absolute devastation" felt by her 15-year-old son Nicholas when he ordered a computer part from Amazon using his life's savings.
"He had bought a graphics card for the discounted price of £400 on Black Friday [22 November], ahead of Christmas, it was going to be his present," she said.
"Building a computer was his dream, he had been saving birthday and Christmas money for years, and the graphics card was the final part he needed."
Heather said Amazon kept delaying the delivery and he did not get his present in time for Christmas Day.
'Sick joke'
"In mid-January it was finally delivered.
"It seemed normal, I passed the packaged on to my son, and said 'Merry Christmas, sorry it's late'.
"Nicholas opened the package, which revealed a box wrapped in Christmas paper.
"I suddenly heard screaming and crying - he had unwrapped his present to find a box of pink surgical face masks.
"He was absolutely devastated- it felt like a sick joke."
After complaining to Amazon, and spending hours on the phone, Heather said she was told she could have a refund, but she had to return the box of face masks first.
"We had to pay £11 postage to send the face masks back to the USA - out of our own pockets," she said.
'Robbed of life savings'
Amazon refunded Nicholas on 20 February, nearly three months after he ordered the graphics card.
"It was a massive blow to myself and my son who felt robbed of his life savings and his dream- I had also wasted hours on the phone with Amazon during the process," Heather added.
Another customer, Steve De Vos, 61, from Hertfordshire, ordered a OnePlus 9 mobile phone at a cost of £513.99.
The next day, when Mr Vos was at home with his wife, he said he received an email from Amazon saying there had just been "a failed delivery attempt".
The delivery driver had not rung the doorbell, or tried to alert anyone inside the house, despite walking up to the door with the package, Mr de Vos said.
He contacted Amazon customer service, and forwarded some outdoor CCTV footage as evidence, but an hour later, while Mr de Vos was still in the house, he was notified again of "a second failed delivery attempt".
Again, CCTV showed the same driver walking up to the front door, but this time he carried no package in his hand, Mr de Vos said.
He stood at the door, but did not ring the doorbell, he went on his phone to mark the delivery as failed, and walked away, Mr de Vos added.
The next day, the package was delivered by another driver.
The parcel looked normal but after opening it, I was shocked to find a tin of dog food and some Eau de toilette instead of the phone I had ordered.
"The parcel looked normal but after opening it, I was shocked to find a tin of dog food and some Eau de toilette instead of the phone I had ordered."
He immediately contacted Amazon and lodged a formal complaint against the driver, but was told he would not be recredited the purchase price and the matter would be referred to a specialist team.
"As I had not received the phone I had ordered, I placed an order for a replacement item shortly afterwards.
"A week later, I chased Amazon and the customer services representative agreed to refund me."
Ethan Martin, 22, from Wednesbury, ordered a Panasonic Lumix camera and lens for £1,999, and it was sent to an Amazon hub counter, inside a shop, on 10 January.
He collected it and opened the package in front of the shopkeeper, he said.
"Inside there was two pairs of cheap shoes - no camera to be seen - it was horrible and disappointing," Mr Martin said.
"I was worried about getting a refund, as I had spent so much money."
The shopkeeper gave Mr Martin a copy of the CCTV, which clearly showed him opening the box and showing the contents to the person behind the checkout.
Mr Martin said despite complaining multiple times to Amazon, and telling them he had CCTV evidence, Amazon had not refunded him.
He said he had since disputed the payment with his bank.
"I feel robbed, I am £2,000 down, I really hope the bank can help me, it is my last resort," he added.
An Amazon spokesman added: "We work hard to create a trustworthy shopping experience by protecting customers, selling partners and Amazon from abuse and we have systems in place to detect suspicious behaviour.
"We are investigating these specific cases and are in contact with the customers affected."
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Consumer & Retail
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The monetary death march continues. The Bank of England’s fourteenth rise in interest rates is unscientific, unnecessary, and underestimates the powerful global forces washing over these islands.
It pushes policy further beyond the safe or useful therapeutic dose for no clear purpose other than validating expectations on the futures market. Inflation is falling already for reasons that have almost nothing to do with the recent actions of Threadneedle Street.
The British economy is at stall-speed, and probably sliding into recession. That recession will now be deeper. The full impact of this rate squeeze on a private sector debt stock of 151pc of GDP (BIS data) will not be felt for another year, and probably later given the stretched maturities of debt contracts.
The Bank is the only big central bank that is actively selling bonds under its turbo-charged policy of quantitative tightening (QT), an experiment that has never been tried before and is much harder to calibrate than officials pretend.
There is a high risk that the Bank is incubating a full credit crunch that will bankrupt tens of thousands of viable businesses. Once such a process is allowed to happen, it can snowball into a destructive cascade that is extremely hard to stop and inflicts years of damage on society.
Why is this being done? China is in deflation, and it is China that shapes global inflation.
The producer price index is already negative in large parts of the global economy. The Drewry shipping index has collapsed by 80pc from its peak to $1,576 per container and is now below its long-term average. “Disinflationary forces are now arriving with a vengeance,” said Jan Hatzius from Goldman Sachs.
On a three-month basis, inflation in the US and much of Europe is barely higher today than it was when central banks were still holding interest rates at zero and were still injecting liquidity à outrance via QE. Even the lagging and near useless indicators of annual inflation are rolling over.
The UK is being hit by four tightening shocks at the same time. The Bank of England pays serious attention to just two of them: its own rise in rates to 5.25pc; and fiscal drag from stealth taxes and bracket creep that will subtract 0.5pc from growth this year and roughly double that next year.
The other two shocks are under-appreciated and may be leading the Bank into perilous waters.
When the US Federal Reserve tightens hard, the contractionary impulse moves through the entire international system of dollarised finance.
“Europe is feeling the impact of its own tightening, and that of the US: global liquidity in dollars is shrinking,” said Philip Turner, a former top official at the Bank for International Settlements.
The BIS estimates that there are $12 trillion of offshore dollar credit contracts outside US jurisdiction. This is what lubricates global finance. Some credit is in the form of cross-border bank loans – ie, a Saudi bank lends to a Turkish company, or a French bank lends to property developers in China (via Hong Kong) – and some is in dollar bond issuance.
Companies across the world borrow in dollars because the market is deep and borrowing costs are low, until the Fed turns off the spigot. At which point the whole global system shudders.
It happened in an earlier form in 1928 when the Strong Fed cut off loans to Europe and set in motion the Great Depression. It happened in 1982 when the Volcker Fed triggered the Latin American debt crisis, and in 1998 when the Greenspan Fed set off the East Asia crisis.
Is it happening now? We will find out. All we know is that the data on dollar liquidity is starting to track the pattern going into the global financial crisis.
Europe’s authorities were caught off-guard by that episode, imagining that the strong euro made them invincible. They had a rude awakening when the three-month dollar funding market in Europe froze, leaving eurozone banks unable to roll over liabilities. In the end it was the Fed that bailed out the European Central Bank with foreign exchange swaps. It was the eurozone, not the US, that slithered into an economic depression.
The ECB and the Bank of England profess to be more alert to this imported risk today, yet they are piling on their own scorched-earth tightening on top of the Fed’s tightening, inflicting a double blow on economies already in a stagnation trap.
The second under-estimated shock is slow-burn damage from quantitative tightening (QT). “The true scale of monetary tightening is not just the rise in the policy rate. It is also the shrinkage of the balance sheets,” said Professor Turner, now at the National Institute for Economic and Social Affairs.
The Bank of England has adopted an extreme New Keynesian position that bond sales do not really matter. In their model, QE and QT are just asset swaps. Buying bonds helps in a crisis by restoring confidence but selling them later is as dull as watching paint dry and has no tightening effect.
Without wishing to rehearse the monetarist arguments for why this is arrant nonsense, Fed economists Andrew Lee Smith and Victor Valcarcel reached the opposite conclusion after studying America’s first, stormy, experiment with QT.
They found that the liquidity effect of QT had twice the potency of the original QE. Asset sales played havoc with US money markets, but only after a beguiling lag.
This was obvious at the time to anybody in the markets. QT led to a stock market crash. The Powell Fed was forced to retreat and ultimately revert to fresh QE.
Professor Turner comes at the issue from the Wicksellian perspective of the BIS. In a joint paper with Marina Misev from the University of Basel, he argues that the current monetary squeeze is “too much, too late” and threatens to “destabilise a financial system already dangerously exposed.” Reliance on rear-view mirror indicators such as inflation and wages almost guarantee that “they will not see trouble until it is too late”.
The paper says central banks ought to be looking harder at credit data “which capture monetary policy in mid-transmission” before they send the economy into a tailspin.
That credit data is utterly dire. The ECB’s Bank Lending Survey shows that net demand for loans in the second quarter was down 42pc, the worst ever recorded. Net fixed investment demand in Italy fell by a calamitous 55pc. Credit to households is now contracting in absolute terms.
The picture in the UK is scarcely better. The housing market is in the eye of the storm. The credit crunch is so far less severe but the money supply figures are in near melt-down. Simon Ward from Janus Henderson says real M1 money has contracted by 7.4pc over the last six months. “The latest rate rise just takes us further into overkill,” he said.
The Monetary Policy Committee does not look at money – despite its name – yet discerns signs that the long-feared feedback loop in wages and prices has begun to “crystallise”. That is not confirmed by falling inflation expectations. Services will take longer to deflate than manufacturing but the process is clearly underway. The PMI index for new service orders plunged in July.
The MPC would serve us better if it stopped fretting about a non-existent wage-price spiral in services and started paying more attention to dollar liquidity and to the forward-looking indicators of credit and money that tell us where the British economy is going. As matters stand, it is going into a brick wall.
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Interest Rates
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Scores of savvy readers have shared their tips for fighting back against the mid-contract broadband and phone price racket. Last week, we called for a stop to grossly unfair mid-contract price rises, which will see millions of households face inflation-busting rises of 13 or 14 per cent in the coming weeks.
Customers of BT, EE, Plusnet, TalkTalk, Three, O2, Virgin Media and Vodafone are set to see their broadband and phone bills hiked.
Hundreds of readers have been in touch to express their support for our campaign. Many agree that households should not have their broadband and phone bill prices increased mid-contract, by an amount they do not know when they sign up to a deal. Most have been told by their providers to expect double-digit rises to their bills in April and May.
But amid this frustration, scores have also shared ingenious tips and tricks for beating the price rises. Here are some of the best.
We would love to hear your success stories – with these techniques and your own.
Ask for a social tariff, says Rosalyn
Reader Rosalyn Paine suggests that those on low incomes look into social tariffs.
'My mum had a BT Basic tariff and found it very helpful,' says Ros. 'It certainly reduced her telephone costs and enabled us all to keep in touch with her.
'She also had low-cost wi-fi, which I was able to use when I was with her to order her shopping.'
Most broadband and phone providers have special tariffs for people on low incomes.
Providers may not always go out of their way to advertise these, but those in the know can save hundreds of pounds.
For example, BT's Home Essentials phone tariff offers unlimited calls to UK landlines and mobiles for £10 a month to those who are eligible. It also has a broadband deal for £15 a month.
EE and Vodafone have basic broadband deals for £12, while Virgin Media's costs £12.50.
People on universal credit will be eligible for these tariffs. Some providers also accept customers on other benefits, including pensions credit. The table on the right provides a summary of some of the most popular deals and who they are intended for.
If you think you may be eligible, contact your provider and ask for its social tariff, or contact an alternative provider if its deal suits your needs better.
When Martin Window received a letter from Virgin Media saying his bills were going up by £15 a month, it was the last straw. He was already paying £125 a month for phone, TV and broadband.
'To my mind, asking for anything on top of that is pure avarice,' he says. So Martin, 69, from Waterlooville in Hampshire, has decided to ditch the TV package and opt for Freeview instead.
'I started to pay attention to what we were watching,' he says. 'With Virgin TV, it looks like we've got hundreds of channels, but lots are duplicates and there is rarely anything we actually want to watch.
'We mainly watch things on the BBC, Channel 4 and 5 so I don't think we'll miss it – and we'll save a lot of money.'
Lisa James, 79, was shocked to receive an email from Virgin Media saying her bills would rise to £151 a month from April.
'It's greed,' she says. Lisa phoned to complain and was offered a deal for £100 a month.
Still dissatisfied, she told Virgin Media that she was going to switch to BT and got put through to the cancellation department. That was when their tune changed.
'Eventually I spoke to someone who offered me 18 months for £69 a month,' says Lisa. 'I felt like telling them no, but accepted. It was the thought of all the hassle to change everything – when you're elderly it's such hard work.
'So I took the deal, but we shouldn't have to mess about like this every year or two.'
Switch to a smaller supplier, say Susan and Trevor
Reader Susan Bowley, 77, has switched to Lebara for her mobile phone contract and pays just £4.90 a month. She also has free roaming in the EU and some other countries, and 100 free minutes a month to call 42 other countries.
'I used to be with Sky, but they started charging for roaming so I decided to look elsewhere,' says Susan, who lives near Bristol. 'Lebara uses the Vodafone network, and I get excellent coverage.'
Trevor Heel, 62, from Bournemouth, has a mobile phone contract with smaller supplier ID Mobile, which uses the Three network.
'I started my contract just over three years ago at £5 a month, and I'm still paying that amount,' he says. 'I get 500 minutes and 1GB of data, which rolls over for one month if I need it.'
Shop around for new deal, says Derek
Derek de Vere, 63, from York, was fed up when TalkTalk said it would raise his bills yet again in March. He was initially attracted by TalkTalk's £27.50-a-month deal.
'But I've seen two hikes since then, to £41, then £43.50 – and it was going up again to £53.50,' says Derek. 'So I am switching to Sky and will be paying £29 a month, for unlimited calls and broadband.
'The broadband will be slightly slower, but it will still be more than adequate for my needs.'
PAUL Law has been promised that his Virgin Media bills won't be affected by the price rises in April. But he has kept a record of his conversations to stay on the safe side. 'I was offered a new package this month and challenged the sales person several times as to whether my bills would rise in April,' says Paul. 'They promised me they would not, but I will only know for sure when I get my bill. So, for peace of mind, I recorded the conversation.'
Get them on side, says Michael Reader Michael Curtis has a knack for getting a good deal on his broadband and phone – and on all his other household bills. He has a few favourite techniques that seem to serve him very well. 'When you phone up, you want to go straight through to the customer retention team – they're the boys with the power, they're the real deal,' says Michael, 68, from Barnet in North London. Michael calculates how much his bill is set to rise by – let's say it's 16 per cent. Then he asks the customer service person: 'Can I ask you a personal question? Have you had a pay rise of 16 per cent this year?' Michael explains: 'They generally laugh, and then you've got them on side. Then I say, 'Well, if you're not getting 16 per cent more, then why is my bill going up by 16 per cent?' ' Michael also likes to write down the name of the person he is speaking to at the beginning of the call, and use it throughout the conversation to make a personal connection. He makes a note in his diary three weeks before his contract expires and makes the call then, so he can get a good deal before his current one is finished. He has already done this with Sky and will pay less this year than he did last. 'It comes down to being nice and getting them on your side,' he adds. 'As soon as you raise your voice or get angry, you've lost it.'
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Consumer & Retail
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Waitrose and John Lewis are offering free hot drinks to on-duty police officers in a bid to deter shoplifters.
John Lewis Partnership, which owns both brands, has written to the Police Federation to say officers can make the most of the offer - as long as they bring a reusable cup.
Its head of security said that even just having a police car parked outside might deter would-be thieves.
It comes as other shops have reported soaring levels of retail crime.
In Waitrose, police officers and community support officers will be able to get drinks from the in-store coffee machines.
The supermarket used to have a generous offer of free teas and coffees for all shoppers who had a loyalty card.
That scheme was tweaked in 2017, so customers now have to make a purchase in-store before they can claim a free drink from its self-service machines using a reusable cup. It was also paused during the pandemic.
In John Lewis, police officers will be able to use staff cafeterias for breaks and buy discounted food there too.
Nicki Juniper, head of security for the John Lewis Partnership, said: "Retail crime is a national problem and requires a national solution.
"Just having a police car parked outside can make people think twice about shoplifting from our branches, or becoming aggressive towards our partners [staff]."
The group said its chair Dame Sharon White had also written to Home Secretary Suella Braverman calling for tougher action against repeat and violent offenders.
With a rise in incidents on the shop floor, it has also had to increase spending on the number of guards and staff it employs who are trained to stop and detain shoplifters.
It has also trialled what it called "love bombing" in some of its stores - being extra attentive to customers, including asking if help is needed at self-checkouts, to act as a potential deterrent.
The convenience store chain Co-op has also called for action after crime in its outlets hit record levels, increasing by more than a third over a year.
There were about 1,000 cases of crime, shoplifting and anti-social behaviour in its shops each day in the six months to June, the chain said.
It even suggested that some communities could eventually become "no-go" areas, with retail crime driven by "repeat and prolific offenders and, organised criminal gangs".
According to figures from retail trade body the British Retail Consortium, retail thefts across the sector in England and Wales rose by 26% in 2022.
Its crime survey suggested that nearly 850 incidents were taking place every day, with staff facing physical assault and being threatened with weapons on some occasions.
Data, analysed by the BBC, shows shoplifting offences have returned to pre-pandemic levels as the cost of living rises.
The British Retail Consortium previously told the BBC that these high level of theft cost retailers almost £1bn in the 2021 financial year, "money that would be better used to reduce prices and invest in a better customer experience."
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Consumer & Retail
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The vice president of the European Central Bank (ECB), Luis de Guindos, has told Spanish newspaper ABC that "monetary policy measures are starting to have an impact on financing conditions," or in other words, recent ECB hikes in its base interest rates are starting to impact the rates paid by consumers and prompt people and businesses to take out less credit.
"The contraction in credit will pass through to the real economy," de Guindos said. "In turn, dampening demand will lower inflation."
De Guindos told the paper, in an interview the ECB itself shared via its own website in English and Spanish, that the ECB currently expected headline inflation to fall to 5.4% this year, 3% next year, and to be only slightly above the eurozone target of 2% by 2025.
However, he also warned the underlying inflation — excluding core goods prices like energy and food — was rising more sharply, "mainly driven by unit labor costs."
Energy and food prices are both well past the peaks seen during the initial shock following Russia's invasion of Ukraine and have been falling, very sharply in the case of energy prices, in recent months.
De Guindos described the European labor market as "robust," and said ECB data suggested the inflation was caused less by wage increases aiming to account for inflation, and more by a slowdown in productivity leading to increased labor costs for the same output. He did not speculate on possible reasons behind this.
The bank's deputy also said he believed that "the priority now is to bring down inflation," and that if that meant a mild recession or stifling economic growth, it would be a price worth paying given that "it is very difficult for economic growth and stability to co-exist with high inflation" over time.
Sidesteps questions on future interest rate moves
The ECB, like most western central banks, has been steadily raising its base interest rates — after a historically unprecedented 15-year period at or near 0% in the aftermath of the 2008 financial crash — over the past year or so.
It was criticized in some quarters in 2022 for being slower to react and start raising rates than the US Federal Reserve was; the Fed was able to halt its series of rates increases for the first time in a year this month, unlike the ECB.
The most recent ECB increase, earlier this week, raised its main refinancing operations rate — probably the most important of the three rates it sets for commercial banks — by 25 basis points to 4%.
The ECB has indicated that further increases in the course of the year are likely but without explicitly saying what or when, and de Guindos sidestepped the question in Sunday's interview as well.
"That will depend on the data," he said when asked whether to expect another increase during the summer holidays. "So far, we have raised rates by 400 basis points and can already see the impact this is having, but we need to ensure that inflation converges and holds at around 2%, our price stability target. What happens with underlying inflation is paramount."
Eurozone inflation differences 'arguably more marked now'
The ECB is an unusual if not unique central bank in that its policies apply to all members of the single European currency, the euro. Most central banks are responsible for a single country rather than sharing some of the responsibility for 20, although each eurozone member has its own domestic central bank too.
It has therefore always been a difficult balancing act for the ECB to try to take all its members' economic needs and desires into account. But de Guindos said that the conflict in Ukraine was contributing to more marked regional variations, with economies closest to the conflict impacted more.
"There have always been differences, but they are arguably more marked now. Proximity to war has a lot to do with this. Inflation is higher in the Baltic states," he said.
Don't forget pandemic response's impact, de Guindos warns
De Guindos told the paper that as well as Russia's invasion of Ukraine early last year, the consequences of two years of pandemic economic policy — marked by a vast uptick in government spending and borrowing, and a reduction in output, almost across the board — was playing a sizeable role on present-day economics.
"The current inflation scenario cannot be understood without taking into account the wave of shocks that have hit Europe: the pandemic, the reopening of the economy and Russia’s invasion of Ukraine. Without the expansionary monetary and fiscal policies of 2020 and 2021, the fall in GDP would have been far more pronounced. In such exceptional circumstances, we must adhere to the lesser evil principle. There is no one perfect measure to cover every economic parameter, so one has to choose the least harmful," he said.
Unsustainable debt and public spending the next stumbling block?
De Guindos said he supported efforts to start undoing some of the exceptional measures taken amid the pandemic and the subsequent energy crisis in a bid to rein in public borrowing. The European Commission recently called on member states to revisit the various energy price guarantees they implemented.
"Energy prices are lower than they were when the war started. The support measures adopted to shield the most vulnerable sectors made sense at the time, but they now need to be gradually rolled back. This will help correct the public deficit. Countervailing fiscal and monetary policies, i.e. one that is expansionary, the other restrictive, should be avoided," he said.
If high levels of government borrowing were to continue, he said, that would continue driving inflation, and would most likely force the ECB to take even more sharp action on interest rates in a bid to counteract this.
ECB says lenders should increase deposit rates, not just loans
De Guindos was asked why the rates commercial lenders then charge consumers appeared to be changing for borrowers, and yet remaining at or near zero for depositors. He said this should not persist and that he believed it ultimately would not.
"When interest rates rise, they should rise across the board, on the assets and the liabilities side," he said. He added that he understood why "there is always greater resistance" from the general public to increased rates on loans or mortgages rather than savings.
He wouldn't be drawn on a question of whether the banking sector was guilty of "tacit collusion" on this issue, saying that was a question for industry regulators, not the ECB. However, he also pointed to a theory on why the rates might be slow to increase, but likely to do so in time:
"There is currently still excess liquidity in the market, which means there is not as much need for banks to compete to attract deposits. But this excess liquidity is being withdrawn, which will result in banks having to start competing with each other," de Guindos predicted.
msh/kb (AFP, Reuters, dpa)
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Interest Rates
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The glaring omission in stablecoin legislation
There is a glaring omission in the stablecoin bill recently introduced in the House that should concern both Republicans and Democrats.
The flaw is that the bill does not deny government licensing authorities the discretion to coerce stablecoin protocols to deny services to lawful but politically disfavored businesses. This gap needs to be addressed to prevent political pressure being placed on stablecoin promoters to bar transactions with legal, but unpopular industries.
It is entirely foreseeable that private-sector sponsors of stablecoins or even commercial servicers such as wallet providers and others could be put under political pressure to disable financial transactions with disfavored groups in a similar way to how many social media platforms, most notably Twitter, have censored a broad range of constitutionally protected speech to appease government officials.
“Operation Choke Point” comes to mind, an Obama-era U.S. government initiative to pressure financial institutions into denying services to lawful but politically disfavored businesses such as pawn shops, same-day check cashers, gun manufacturers and so on.
In a future where the provision of stablecoin services will be subject to federal or state licensure, commercial sponsors of such services may find their licenses placed in jeopardy if their stablecoins are used to pay for things some current or future bureaucrat does not want citizens to have, however legal.
What if some government agency could restrict your ability to support political candidates and causes they disapproved of or activities and pastimes they disfavored? What if you were prevented from donating to advocacy groups for such causes as gay or transgender rights? Or, for that matter, gun rights? After all, one group’s celebrated causes and respected liberties may be another party’s triggering issues and sanctionable pastimes.
The simple fix to this problem is to provide that government licensing authorities have no discretion to pick and choose among otherwise lawful activities and condition licensure on the stablecoin’s denial of legal transactions.
Such a provision would provide legal certainty to stablecoin customers. Moreover, it would enable stablecoin operators to reject overweening government pressure to disable otherwise legal transactions. Without it, stablecoin transactions will be frighteningly beholden to the shifting political winds of Washington.
That is why legal certainty that licensed stablecoins may honor all lawful activity is essential to the overall success of this nascent innovation. Proposed legislation should enact it as a matter of law.
Chris Giancarlo served as thirteenth chairman of the U.S. Commodity Futures Trading Commission. He is senior counsel at Willkie Farr & Gallagher LLP and the author of CryptoDad: the Fight for the Future of Money (Wiley, 2021).
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Crypto Trading & Speculation
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Hackers stole around $62 million from Curve Finance on Sunday, causing a ripple effect throughout the crypto sector and raising questions about the strength of the decentralized finance ecosystem.
A handful of DeFi projects’ pools were also hacked, including PEGd’s pETH/ETH: $11 million; Metronome’s msETH/ETH: $3.4 million; Alchemix’s alETH/ETH: $22.6 million; and Curve DAO: around $24.7 million, according to Llama Risk’s post-exploit assessment.
A bug found in older versions of the Vyper compiler contract programming language caused a failure in a security feature used by a handful of Curve liquidity pools. An admin in Curve Finance’s Telegram group declined to comment further to TechCrunch+ and referred us back to the post-exploit assessment.
By crypto standards, this wasn’t considered a “big” hack; Curve is a massive DEX, and this hack makes up about 4% of its TVL. A portion of the exploit was done by white hat hacker user c0ffeebabe.eth, who returned 2,879 ether, roughly $5.4 million, to Curve, according to on chain data.
But this exploit isn’t the only problem Curve — and the broader crypto space — is facing.
Curve founder Michael Egorov has a $100 million loan backed by 427.5 million of the DEX’s token, CRV. That’s around 47% of the entire circulating supply of CRV, according to Delphi Digital, a research and data platform. The token’s price dropping could spell bad news for the health of Curve, and could create even more volatility in the broader DeFi ecosystem.
Egorov borrowed about 63.2 million tether from Aave, against collateral of 305 million CRV which will be liquidated if the CRV/USDT pair drops to 37 cents, Delphi wrote. As it stands, CRV is down 19% to 59 cents from 73 cents before the Sunday attack, according to CoinMarketCap data.
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Crypto Trading & Speculation
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New Universal Credit Sanctions Could Include Losing Free NHS Prescriptions And Dental Care
Exclusive: Jeremy Hunt’s plans to toughen the rules around sanctions for Universal Credit claimants may lead to people losing their free NHS prescriptions and dental care, PoliticsHome can reveal.
In his speech to the Conservative Party conference, Hunt said the government would “look at the way the sanctions regime works”.
Press reports based on government briefings suggested that measures to be announced in next month’s Autumn Statement included closing the Universal Credit claims of those whose benefits have been sanctioned for six months, reportedly affecting 90,000 people.
Few details have so far been provided with the policy yet to be finalised, but PoliticsHome can reveal what proposals have been under discussion in Whitehall.
Benefit sanctions are imposed by the Department for Work and Pensions (DWP) on Universal Credit claimants who are deemed not to have taken necessary steps to look for work. This includes those who miss – or in some cases are late for – jobcentre meetings. The overwhelming majority of sanctions are now imposed for this reason.
When a claimant’s benefits are sanctioned, their main payment – the ‘standard allowance’ – is typically stopped for a week or two, and is only restarted when the claimant complies with the requirements of their benefit claim, which in these cases usually means attending the jobcentre meeting they missed.
The government’s own research has found sanctions do not increase the likelihood of claimants leaving benefits for any kind of paid work, and reduce the rate of claimants leaving benefits for high paid work. PoliticsHome understands a senior Treasury official told colleagues last week that the policy was “just about being able to look tough on sanctions”.
Hunt’s plan concerns those who do not comply with jobcentre requirements – those who ‘disengage’ long-term from the jobcentre, so that their benefits remain sanctioned for six months. Under the proposals discussed last week, these claimants would have their Universal Credit claims closed by the DWP, and they would be barred from reopening them for an as-yet undetermined period of time – a three-month period has been floated.
Under the proposals discussed last week by civil servants, the new rules would not affect any claimants who receive the disability, housing or child elements of Universal Credit. These are top-up payments that claimants receive based on their individual needs – their disability, whether they have children, and whether they need help paying rent.
The DWP has estimated that with these provisos, the new rules will affect 90,000 claimants – though given that around 120,000 Universal Credit claimants are carrying a benefit sanction at any one time, the 90,000 figure is almost certainly the number who would be affected over an extended period of time, rather than a snapshot figure.
The tightened rules will cost money to administer, but it is not clear how much money – if any – they will save, given that those affected will already have gone six months and counting without receiving the main Universal Credit payment.
“This is part of Sunak wanting to create these clear blue water differences,” said Dr David Webster of Glasgow University, an expert on benefit sanctions. “And so the return to the ‘workers and shirkers’ thing is a way of putting the Labour Party on the spot. That's basically what it's about.”
But there are numerous complications that have not yet been addressed as officials scrambled to cobble together the policy within days last week. The exemption for claimants receiving the child element of Universal Credit is partly intended to avoid headlines about children losing free school meals, eligibility for which generally requires a live benefit claim.
The return to the ‘workers and shirkers’ thing is a way of putting the Labour Party on the spot
However, there are concerns that some non-nuclear households could fall through the gap – for example, if a child is being informally cared for by a relative. This is because the eligibility threshold for free school meals is lower than that for the child element of Universal Credit.
People housed in temporary accommodation – the so-called ‘hidden homeless’ – and some people living in supported housing receive old-style Housing Benefit on top of their Universal Credit, rather than the housing element of Universal Credit. They could also potentially be affected by the new sanctions rules, if only those in receipt of the housing element are exempted.
There is also uncertainty over whether the exemption for disabled people covers those considered to have ‘limited capacity’ for work, or just those with limited capacity for ‘work related activity’. The latter is a smaller group of more severely disabled people, while the latter includes those considered able to prepare for a return to the workplace.
Another issue arises with so-called ‘passported’ benefits – entitlements that arise from having an open Universal Credit claim. These include free NHS prescriptions and dental care, with the risk that eligibility for these will end for those who fall foul of the tighter sanctions rules. This could then lead to fines if they continue to claim free NHS prescriptions.
Dr Webster told PoliticsHome the group of claimants most likely to fall foul of the new rules are young single claimants without children. “They already have a very low rate of engagement [with the jobcentre] anyway,” he said. “Partly because the whole system is such a bullying system.
“We already know that rates of claiming for ill health has shot up in this young age group. And this policy is going to feed that even more, because it's going to become the only way that people in this group can get benefits.”
The Treasury directed questions from PoliticsHome to the DWP and the Conservative Party, while the DWP directed questions from PoliticsHome to the Treasury and the Conservative Party. The Conservative Party did not respond to a request for comment.
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Workforce / Labor
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Here’s another reason to keep scrolling on the dating apps.
No shocker here: New York made the top five.
On average, single workers in the US require an annual income of $57,200 to make a living wage in America, according to the analysis by GOBankingRates.
That amount is a couple thousand less than the average income of all American workers, regardless of marital status — $59,428, according to Forbes.
To determine the wage baselines, GoBankingRates used data from the Bureau of Labor Statistics to quantify the minimum amount a single person would need to follow a 50/30/20 budget — meaning 50% for necessities, 30% for discretionary spending and 20% for savings or investments.
Hawaii is the most expensive state for singles, requiring them to rake in an annual salary of $112,411 to live comfortably.
Unfortunately, the average yearly salary in the Aloha State — which has one of the highest costs of living — falls significantly short at $61,420, reported Forbes.
Perhaps surprisingly, it’s also the only state where a single person needs to make six figures to get by.
Massachusetts, California, New York and Alaska fill out the top five salary needs for those who aren’t married or shacking up.
Ideally, singles in Massachusetts should be cashing in an annual salary of $87,909, but the average worker makes about $11,000 less, reporting an average pay of $76,600.
Unhitched employees in the Golden State, meanwhile, should want to collect $80,013 a year but aren’t likely to make that much, as the average salary in the state is reported at $73,220.
New York has yet again proven that it encourages independence by requiring singles to make $73,226, which is just a little below the average salary of $74,870 calculated by Forbes.
Up in Alaska, singlehood also seems to be more welcoming. Solo people should be able to live comfortably aiming for an annual salary of $71,570, which seems achievable with a statewide average salary of $66,130.
Massachusetts, California and New York all require high living wages largely due to the fact that Boston, Los Angeles and New York City — some of the biggest cities in the country — have some of the highest housing costs in the US, which singles have to take on alone.
Other studies have additionally claimed that New York City is the most expensive place to live as a single person.
Unsurprisingly at the very bottom of the list, Mississippi — the poorest state in the country — only requires singles to make about $45,906 a year, which seems attainable with an average salary of $45,180.
Top five most expensive states to be single:
- Hawaii: $112,411
- Massachusetts: $87,909
- California: $80,013
- New York: $73,226
- Alaska: $71,570
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Consumer & Retail
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The Securities and Exchange Commission should have approved an application from Grayscale Investments to create a spot bitcoin exchange-traded fund, a federal appeals court ruled on Tuesday, in a landmark victory for the asset manager that could pave the way for the first product of its kind.
A panel of judges in the District of Columbia Court of Appeals in Washington said the securities regulator’s denial of Grayscale’s proposal was arbitrary and capricious because the SEC failed to explain its different treatment between bitcoin futures ETFs and spot bitcoin ETFs.
The price of bitcoin, the world’s largest cryptocurrency, BTC was recently up 4.71% at $27,333 following the decision.
The ruling could be a boon for bitcoin, as a spot bitcoin ETF would provide investors the opportunity to gain exposure to the digital asset without having to purchase bitcoin via a retail exchange or hold the asset in a separate crypto wallet.
In a statement, a Grayscale spokeswoman said the decision “is a monumental step forward for American investors, the Bitcoin ecosystem, and all those who have been advocating for Bitcoin exposure through the added protections of the ETF wrapper.”
“The Grayscale team and our legal advisors are actively reviewing the details outlined in the Court’s opinion and will be pursuing next steps with the SEC,” the spokeswoman said.
An SEC spokesperson said the regulator is reviewing the court’s decision in order to determine next steps.
Crypto win
The SEC rejected Grayscale’s application for a spot bitcoin ETF in June 2022, arguing the proposal did not meet anti-fraud and investor protection standards. It cited the same reason in its denial of dozens of other applications for similar products, including those from Fidelity and VanEck.
Grayscale had argued that because the SEC previously approved certain surveillance agreements to prevent fraud in bitcoin futures-based ETFs, the same setup should also be satisfactory for Grayscale’s spot fund, since both spot and futures funds rely on bitcoin’s price.
The court said in its ruling that the SEC failed to explain why it disagreed with Grayscale’s assertion that the bitcoin spot and futures markets are 99.9% correlated.
“The Commission’s unexplained discounting of the obvious financial and mathematical relationship between the spot and futures markets falls short of the standard for reasoned decisionmaking,” the court said in its opinion, which was filed by Judge Neomi Rao of the District of Columbia Court of Appeals.
The ruling is the second major legal victory for the crypto industry in recent weeks, after the SEC was also dealt a loss in July when a judge ruled that Ripple Labs did not violate federal laws by selling its XRP token on public exchanges.
The SEC will have 45 days to appeal Tuesday’s ruling. If it chooses to appeal, the case would go either to the US Supreme Court or an en banc panel review.
If the SEC chooses not to appeal, the court would issue a mandate specifying how its decision should be executed. That could include instructing the SEC to approve the application, or to revisit Grayscale’s application, in which case the SEC could still reject the proposal on other grounds.
It remains to be seen how the ruling might impact proposals submitted in June by BlackRock, the world’s largest asset manager, and several other firms to offer spot bitcoin ETFs. The SEC has yet to deliver a decision on those applications.
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Crypto Trading & Speculation
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Over-50s looking for work should consider delivering takeaways and other flexible jobs typically occupied by younger people, the work and pensions secretary has said.
Mel Stride’s comments came during a visit to the London headquarters of the food delivery firm Deliveroo, which has recorded a 62% increase in riders aged over 50 since 2021.
In an interview with the Times during his visit to the food delivery company, Stride said these flexible jobs offered “great opportunities” and that it was “good for people to consider options they might not have otherwise thought of”.
Stride said: “What we’re seeing here is the ability to log on and off any time you like, no requirement to have to do a certain number of hours over a certain period of time, which is driving huge opportunities.”
He added that employers could also benefit from widening their recruitment pool to “access all the available talent”, and that flexible working can attract older workers. This builds on his earlier comments that these jobs suit workers with disabilities.
On the recently introduced digital “mid-life MOTs”, which are designed to help older workers with financial planning, health guidance and career skills, Stride said: “You really do need to sensibly stop, take where you are in life, and assess whether for example you’ve got enough money to get you through with the kind of lifestyle and living standards that you’re expecting.”
Since the pandemic there has been a sharp rise in economic inactivity, which refers to people who are neither working nor looking for work. About 8.6 million people in the UK – equivalent to one in five working adults – are classed as economically inactive, according to the Office for National Statistics. More than 3.4 million of them are over 50 but under the retirement age.
This is placing strain on the labour market, where many employers are struggling to recruit, and which the Bank of England has warned is part of the reason for high inflation.
Analysis from the Institute for Fiscal Studies thinktank found that nearly half of older people who dropped out of the workforce at the start of the pandemic were struggling financially.
According to the Cabinet minister, employers are responsible for creating an inclusive work environment for older employees. This should include fostering working cultures which aren’t “all about politics and all that kind of stuff”, though he noted that older people can have the life experience to cope with such environments.
Asked whether he would consider retiring early, now that he is aged 61, Stride said: “I’m very happy doing what I’m doing at the moment.” He added: “Of course, as we know in politics, nothing is certain, so who knows where I’ll be in many years’ time – but I very much hope and aspire to be continuing to do this job, because it’s the greatest job in the world.”
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Workforce / Labor
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An anonymous reader quotes a report from 404 Media: A buzzy startup offering financial infrastructure to crypto companies has found itself bankrupt primarily because it can't gain access to a physical crypto wallet with $38.9 million in it. The company also did not write down recovery phrases, locking itself out of the wallet forever in something it has called "The Wallet Event" to a bankruptcy judge. Prime Trust pitches itself as a crypto fintech company designed to help other startups offer crypto retirement plans, know-your-customer interfaces, ensure liquidity, and a host of other services. It says it can help companies build crypto exchanges, payment platforms, and create stablecoins for its clients. The company has not had a good few months. In June, the state of Nevada filed to seize control of the company because it was near insolvency. It was then ordered to cease all operations by a federal judge because it allegedly used customers' money to cover withdrawal requests from other companies.
The company filed for bankruptcy, and, according to a filing by its interim CEO, which you really should read in full, the company offers an "all-in-one solution for customers that remains unmatched in the marketplace." A large problem, among more run-of-the-mill crypto economy problems such as "lack of operational and spending oversight" and "regulatory issues," is the fact that it lost access to a physical wallet it was keeping a tens of millions of dollars in, and cannot get back into it. [...] For several years, the company then took customer deposits into this address, to the tune of tens of millions of dollars. In December, 2021, "when a customer requested a significant withdrawal of ETH that the company could not fulfill [from other wallets,]" it went to withdraw it from this hardware wallet. "It was around this time that they discovered that the Company did not have the Wallet Access Devices and thus, could not access the cryptocurrency stored in the 98f Wallet."
The company then, for several months, had to "use $76,367,247.90 in the aggregate to purchase ETH to fund customer withdrawals." The money stuck in the wallet is currently worth $38.9 million as of August 22, it claimed. It is worth mentioning that the company did not tell regulators or customers about this issue for months after it discovered the problem. The company has still not solved this issue: "The Company remains unable to access the 98f Wallet," it wrote. "The investigation continues." Prime Trust swears in its filing that this was an "aberrant" event and "extremely unlikely to occur again."
The company filed for bankruptcy, and, according to a filing by its interim CEO, which you really should read in full, the company offers an "all-in-one solution for customers that remains unmatched in the marketplace." A large problem, among more run-of-the-mill crypto economy problems such as "lack of operational and spending oversight" and "regulatory issues," is the fact that it lost access to a physical wallet it was keeping a tens of millions of dollars in, and cannot get back into it. [...] For several years, the company then took customer deposits into this address, to the tune of tens of millions of dollars. In December, 2021, "when a customer requested a significant withdrawal of ETH that the company could not fulfill [from other wallets,]" it went to withdraw it from this hardware wallet. "It was around this time that they discovered that the Company did not have the Wallet Access Devices and thus, could not access the cryptocurrency stored in the 98f Wallet."
The company then, for several months, had to "use $76,367,247.90 in the aggregate to purchase ETH to fund customer withdrawals." The money stuck in the wallet is currently worth $38.9 million as of August 22, it claimed. It is worth mentioning that the company did not tell regulators or customers about this issue for months after it discovered the problem. The company has still not solved this issue: "The Company remains unable to access the 98f Wallet," it wrote. "The investigation continues." Prime Trust swears in its filing that this was an "aberrant" event and "extremely unlikely to occur again."
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Crypto Trading & Speculation
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