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You would think, with prices as high as they are, that Americans would have tempered their enthusiasm for shopping of late; that they would have pulled back spending on luxury items; that they would have sought out budget and basic options, bought smaller packages, fewer things.
This is not what has happened. Consumer spending rose 0.2 percent, after accounting for higher prices, in October, the most recent month for which the government has data. Online shopping jumped 7.8 percent over the Thanksgiving long weekend, more than analysts had anticipated. The sales of new cars, dishwashers, cruise vacations, jewelry—all things people tend to give up when they are watching their budget—remain strong. Consultants keep anticipating a recession precipitated by the “death of the consumer.” Thus far, the consumer is staying alive.
People hate inflation, just not enough to spend less: This is one of the central tensions of today’s economy, in which things are going great yet everyone is miserable. And in some ways, Americans have nobody to blame but themselves.
Three years ago, the pandemic gnarled supply chains around the world, leading to shortages of many consumer goods. At the same time, the American government transferred roughly $1.8 trillion to households in the form of generous unemployment-insurance benefits, an amped-up child tax credit, stimulus checks, and delayed or forgiven student-loan payments. Less supply, more demand—it was a recipe for higher costs.
Costs really rose. A dozen eggs went for $1.33 the summer after the pandemic hit; the price topped out at $4.83 last winter. Gas prices nearly tripled. Used cars started trading for as much as or even more than new cars. The cost of leasing an apartment surged. The cost of buying a house went up even more.
More recently, prices have been driven up, if more slowly, by the strong labor market. The unemployment rate is as low as it ever gets and has been for some time, with labor shortages in a number of sectors: air-traffic control, education, retail, trucking, police and public safety, nursing, plumbing, and electric. The tight labor market has forced employers to pay workers more, boosting wages, particularly at the lower end of the income spectrum. Real hourly earnings for workers in the tenth percentile of wage distribution went up more than 8 percent in the past three and a half years, the economists David Autor, Arindrajit Dube, and Annie McGrew found. And average wages have grown faster than average prices.
Sticker shock is real. And in surveys, people say that they are trading down because of cost pressures. But in fact they are spending more than they ever have, even after accounting for higher prices. They’re spending not just on the necessities, but on fun stuff—amusement parks, UberEats.
People just have a lot of money on hand. More broadly, they seem to be less likely to change their purchasing habits in response to price shifts—even when budgets are leaner. A raft of recent studies have found that American consumers have become less price-sensitive in recent decades. Households are using fewer coupons. People are spending less time mulling over what to buy when they’re shopping.
Why? Maybe because, although prices of many consumer goods are higher than they were a few years back, they’re still much, much more affordable than they were a few decades ago, thanks to globalized trade and manufacturing advances. (The price of a television has dropped more than 90 percent since the late 1990s.) Your grandparents might have gone to three different grocery stores to get the best deals. Would it really be worth it for you to do the same now? Maybe not. Especially not if you have a job. It used to be much more common for one partner in a marriage to make the money and the other to raise the kids and spend the cash. Today, working-age women are only a little less likely than men to be employed, giving them less time and energy to pinch pennies.
Another theory: Consumers might have become more brand-loyal, less willing to trade Coke for Squirt or Nike for Sketchers. Perhaps that is because companies have gotten better at tailoring products to people’s tastes. Perhaps it is just inertia: People get more stuck in their ways as they get older, as the average American has. You’ll pay more for Starbucks coffee because you always get Starbucks coffee.
It should be good news that Americans are better off than they were pre-pandemic. It should be good news that people can afford more, even if prices are high. But then why is everyone so mad about prices? Higher prices are just vexing, making people do mental math every time they shop. Economists point to other psychological factors too: People seem to think of their swelling bank accounts as a result of their own hard work, but consider cost increases someone else’s screw up. Nor do average consumers see inflation as something that might benefit them by, say, eating away at the value of their mortgage payments.
People want to blame Joe Biden for their bills. They want to accuse stores of gouging them (though the evidence for “greedflation” is scant). The strange truth is that most people really are in a more comfortable position, even if they’re not happy about it. It’s not like a weak economy, stagnant wages, crummy consumer spending, and cheaper stuff would be better, after all.
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Consumer & Retail
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Target Will Close 9 Stores Across 4 States Due to Ongoing Crime That's 'Threatening the Safety' of Customers and Employees Target stated that it "invested heavily" in efforts to combat crime, but it just didn't work.
Key Takeaways
- Target will close nine stores in four states, citing safety concerns.
- Retail crime is on the rise, with significant financial losses reported industry-wide and increased instances of violence from organized retail crime.
Target has announced that it will close nine stores across four states, citing ongoing crime in the areas as the main reason to shut the doors.
"We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance," the company said in the release.
The affected stores are in New York, Seattle, San Francisco, and Portland and will cease operations effective October 21.
Before the ultimate decision to close the stores, Target stated that it "invested heavily" in efforts to combat the instances of crime, including increased security personnel, third-party guard services, and theft-deterrent tools, but despite the efforts, the big box retailer was unable to fully squash the problem, and can no longer operate the stores "safely and successfully."
The decision comes a month after Target CEO Brian Cornell said in an earnings call in August that incidents or threats of violence were up 120% for the first five months of 2023 as compared to the year before.
In the wake of the store closures, Target's efforts to tackle retail crime presses on. The company says it is continuing to make "significant investments," including increasing security staffing, implementing theft-deterrent tools, and enhancing cyber defense.
Target's decision to close nine stores comes amid rising instances of crime and theft in the retail space. The National Retail Federation (NRF) reported on Tuesday that the average loss due to shrinkage, which includes theft, fraud, damage, and other factors, cost retailers $112.1 billion in 2022, up from $93.9 billion in 2021. Additionally, 67% of survey respondents reported witnessing more violence from organized retail crime in 2022 as compared to a year ago.
Several big-name retailers, such as Dollar Tree, Nike, and Walmart have shuttered stores or ramped up efforts over the past year to address ongoing crime, but instances of violence and theft have continued.
This week, in an eight-hour crime rampage spanning Tuesday night through Wednesday morning, numerous retail stores in Philadelphia were looted by a large group of individuals, including many juveniles. Beginning around 8 p.m., stores including Lululemon, the Apple Store, and Footlocker were heavily damaged in what authorities believe was a "coordinated attack."
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Consumer & Retail
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A United Arab Emirates investor has been approached to take a stake in the Sizewell C nuclear power plant project in Suffolk, it has emerged.
Ministers are searching for new investors in the project, which could cost between £20bn and £44bn, after removing the Chinese state-owned CGN last year due to security concerns over UK infrastructure amid poor Anglo-Sino relations.
The Times reported on Monday that the UK government had lined up Mubadala, the Abu Dhabi fund run by Sheikh Mansour bin Zayed Al Nahyan, the owner of Manchester City football club, to back the energy project, with a decision due early next year.
However, a source close to Mubadala denied the fund was interested in Sizewell but said other UAE entities were interested. A separate source said that Emirates Nuclear Energy Corporation, which is owned by Abu Dhabi sovereign wealth fund ADQ, could be a good fit for the project.
The UAE interest comes against the backdrop of Westminster tensions over a separate Emirati deal. Last week, RedBird IMI – a joint-venture between America’s Redbird Capital and International Media Investments, an Abu Dhabi investor also backed by Mansour – announced a deal to take control of the Telegraph group. The government has indicated it will launch a public interest investigation into the newspaper deal.
The Sizewell C plant aims to generate enough energy to power 6m homes. It is backed by France’s EDF and the UK government, which has spent nearly £100m buying CGN out of the project. CGN had held a 20% stake.
Rishi Sunak hosted Mubadala’s Khaldoon Al Mubarak at a meeting of global business leaders at Hampton Court, south-west London, on Monday as he attempts to attract foreign investment to the UK.
Although a formal search for outside investment launched in September, Sizewell C has been touted to potential investors – including sovereign wealth funds, infrastructure and pension funds – for years. The government earmarked a further £341m to develop the project in August.
Bankers at Barclays have been tasked with procuring investment for the project, which has faced significant opposition in Suffolk.
The interest from the UAE – host of Cop28, which begins this week – in Sizewell C has been mooted for more than a year. Last week, campaigners parked a sign reading “Sizewell C is a toxic investment” outside the UAE embassy in London.
Alison Downes, of the Stop Sizewell C campaign, said: “There may be a dearth of UK interest in Sizewell C, but there is no energy security in handing chunks of the UK’s critical national assets to countries that don’t share our values. If the UAE is not good enough for the Telegraph, it’s definitely not good enough for Sizewell C.”
Investors in Saudi Arabia and Australia have also previously reportedly been approached to back Sizewell C. However, a source close to the project denied there was active interest from Saudi investors.
Last year, the Observer revealed that the British Gas owner Centrica – a minority investor in Britain’s nuclear power stations – was interested. Greencoat Capital, the investment firm, has also expressed an interest.
The project is set up as a 50-50 joint-venture between the government and EDF, which is behind the sister Hinkley Point C development in Somerset. That project is significantly over budget and years late.
Ministers overruled the independent Planning Inspectorate to grant Sizewell C planning consent. Backers are seeking a development consent order that will precede a final investment decision by its backers.
The plant is not expected to generate power until at least the mid-2030s, after most of Britain’s nuclear power stations have been retired.
Sunak’s government hopes to kickstart a renaissance in the nuclear power industry, and launched a new delivery body, Great British Energy, in the summer.
Separately, the boss of Rolls-Royce, Tufan Erginbilgic, is expected to urge the government to back its plans to build small nuclear power plants at an investor day on Tuesday.
Sizewell C and Mubadala have been approached for comment.
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Energy & Natural Resources
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Jeremy Hunt is reportedly considering increasing the house price cap on Lifetime ISAs.
Under the current rules, funds from a Lifetime ISA going towards a first property can only be used if the property is worth £450,000 or less.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: "A shift in the LISA price cap would be incredibly welcome.
"Runaway house price rises over the past five years have rendered the £450,000 limit much less generous than it was back in 2018.
"While you can still stretch to the average UK property – costing £291,000, Londoners would find the average home well out of reach, at £536,000."
Funds from a Lifetime ISA can only be used towards buying a property under the price cap or they can be accessed after a person turns 60.
If a person wanted to use savings for another purpose, such as buying a first home worth more than £450,000, they would have to pay a 25 percent penalty on the withdrawal.
Ms Coles said the penalty policy should also be changed and reduced to 20 percent.
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There have also been reports the Government is considering creating a new ISA product to help first-time buyers save up.
Ms Coles warned against this, saying: "If the plan is to simplify and streamline the range, adding more different types of ISA risks bringing another layer of complexity.
"The LISA has helped over 171,000 people onto the property ladder, supporting deposits of £2billion. It has also helped hundreds of thousands start their savings and investment journey, forming habits which will help them build their resilience over the longer term.
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"That’s not to be sniffed at. The Treasury doesn’t need to throw the baby out with the bathwater. Some tweaks to the LISA will give a huge head start to anyone saving for a property or for retirement.”
The Lifetime ISA comes with the significant benefit that for any amount a person saves, the Government matches this with a 25 percent bonus.
A person can deposit up to £4,000 each tax year into a Lifetime ISA, with a maximum bonus of £1,000 each year.
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
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Real Estate & Housing
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US bankruptcies soared 54% year-over-year in August.
Societe Generale warned that more business failures could follow "beyond all fears."
The Federal Reserve has hiked interest rates 11 times over the last 18 months, tightening financial conditions.
The Federal Reserve has embarked on one of the most aggressive monetary policy tightening campaigns ever, hiking interest rates 11 times over the last 18 months – and this high-rate environment and more expensive borrowing costs, according to Societe Generale, has sparked a wave of business failures that may continue to grow.
In August, there were 634 commercial Chapter 11 bankruptcy filings registered in the US, data from Epiq Bankruptcy shows. That marked roughly a 54% jump compared to the 411 filings seen 12 months prior.
"This 'new normal' certainly seems astonishingly abnormal to me," Societe Generale researcher Albert Edwards wrote in a note Thursday. "Yet if you look just below the very large-caps stocks, the old 'normal' still applies, with higher rates triggering a surge in corporate bankruptcies that will surely lay low the overall economy."
Mid- and small-cap companies appear to be in particular trouble compared to larger corporations. Edwards pointed out that these businesses are key drivers of the overall economy, especially with regards to employment, and more bankruptcies in this segment could prove dire.
Since the Great Financial Crisis ended more than a decade ago, years of quantitative easing, as well as widespread pandemic relief payments, have allowed companies with shaky balance sheets to survive and even thrive given the widespread availability of cheap debt.
In June, economists at the Federal Reserve published a paper that warned a historic surge in the percentage of distressed American companies could worsen the fallout from the central bank's inflation battle. Higher borrowing costs, they said, will bring pain to a huge number of businesses.
"The share of nonfinancial firms in financial distress has reached a level that is higher than during most previous tightening episodes since the 1970s," Ander Perez-Orive and Yannick Timmer wrote.
By their calculations at the time, about 37% of businesses were on the brink of going under.
Here's the economists again:
"Our hypothesis is that following a policy tightening, access to external financing deteriorates more for firms that are in distress than for healthy firms, while following a policy easing, external financing conditions do not change appreciably enough for the two groups of firms to trigger a differential response."
In effect, they were saying that companies feel pain in times of policy tightening, especially those with weaker balance sheets. Yet at the same time, that doesn't mean pain goes away when policy loosens again.
In any case, easy money measures have "kept so many zombie companies on life support," in Societe Generale's view. "[T]he recent sharp rise in rates really could cause a shocking rise in bankruptcies, beyond all fears."
Read the original article on Business Insider
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Banking & Finance
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Questions are multiplying around a 45-minute Zoom call that SEC Chair Gary Gensler held in March 2022 with disgraced crypto mogul Sam Bankman-Fried — including whether the controversial powwow got advance approval by the agency’s ethics team, On The Money has learned.
The now-infamous virtual meeting – which came six months before Bankman-Fried was arrested on epic fraud charges – has stoked criticism of Gensler over alleged conflicts of interest and cozy ties to the 31-year-old accused fraudster.
Now, a document recently obtained through the Freedom of Information Act shows that there is no record that Gensler ever requested permission from the SEC’s Office of the Ethics Counsel to meet with SBF.
Not only is that a breach of the agency’s own protocol, it’s also likely that if Gensler had asked for permission he would have been refused, according to experts.
A spokesman for the SEC said Gensler had approval for the meeting from the SEC’s ethics team but would not produce any documentation to support the claim. The SEC declined further comment despite repeated requests for clarification.
“The fact that the SEC appears unwilling to share all the documentation associated with the vetting of this meeting should raise enormous red flags for investigators,” Thomas Jones, president of the American Accountability Foundation, told On The Money.
“These types of special-access meetings are where some of the worst abuses in Washington happen and the American people need to know what happened in the lead up to this meeting.”
Multiple sources at the SEC said commissioners typically use email to request a meeting with the Ethics office and create a paper trail.
“The reason you put it in an email is you want to get it in writing so you can cover your ass,” a former SEC official told On The Money. “What’s the point of doing it if it’s not in writing?”
“It’s a little suspect to me that the SEC is disputing FOIA but won’t back it up,” another former counsel at the SEC said.
Gensler’s failure to vet the meeting is particularly noteworthy given the apparent conflicts he faces in the case, according to experts.
FTX’s then-lobbyist Mark Wetjen served as a commissioner of the Commodity Futures Trading Commission at the same time Gary Gensler helmed the CFTC. Wetjen, who has remained close to Gensler, was responsible for setting up the meeting, according to reports.
“The FTX case is one of the most significant financial frauds in decades,” Jones said. “FTX hired one of Gary Gensler’s closest allies to serve as their ‘lobbyist’ in Washington and then got an unprecedented direct meeting with Gensler to plead their case.”
Meanwhile, Glenn Ellison – the father of Alameda Research CEO Caroline Ellison, SBF’s ex-girlfriend who has since turned informant to the feds – was the head of MIT’s economics department while Gensler was a professor there.
While it’s unclear whether the SEC was looking into FTX or its disgraced CEO at the time, people close to the SEC say they believe Ethics would have advised against meeting with SBF given that so little was known about the exchange — and that it wasn’t even headquartered in the US.
“It’s a huge failure in judgment from Gensler,” according to Jones. “It speaks to Washington’s ‘swampy-ness’ that Gensler would take that meeting.”
On the call, Bankman-Fried reportedly discussed the possibility of launching a new crypto trading platform with Brad Katsuyama’s IEX. SEC insiders say it is highly unusual for an SEC Chair to discuss a work-in-progress.
SBF reportedly bragged about having access to Gensler.
Indeed, the friendly chat stood in contrast to what most cryptocurrency companies get — even those based in the US. Coinbase CEO Brian Armstrong has slammed the SEC multiple times for its unwillingness to meet with him. Indeed, a 45-minute meeting with an SEC chair is an “eternity,” according to Jones. “Carving out that much time is a big lift.”
Coinbase has been the subject of numerous SEC probes. This month, the SEC alleged in a lawsuit that Coinbase’s crypto asset trading platform was operating as an unregistered exchange.
Others note that Gensler’s decision to take the meeting without clearing it is indicative of the way he operates at the SEC. The agency raised eyebrows when it waited to charge SBF Bankman-Fried until the day after he was extradited to the US by the Department of Justice.
“When it comes to government failure, the public official singularly responsible for failing to expose the FTX fraud is SEC Chair Gary Gensler,” said Ritchie Torres, a Democratic Congressman from New York.
Republican members of Congress, including Chair of House Financial Services Rep. Patrick McHenry (R-NC), have also slammed Gensler and demanded more information about his correspondence with Bankman-Fried and the SEC’s relationship with FTX.
Rep. Thomas Earl Emmer (R-Minn.) characterized Gensler’s meetings as “working backroom deals with people doing nefarious things.”
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Crypto Trading & Speculation
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Allen Weisselberg, the former chief financial officer for the Trump Organization, reportedly agreed to a $2.4 million severance package that required his silence, as former President Donald Trump continues his legal battle in New York.
On Wednesday, Lisa Rubin, a legal analyst for MSNBC, shared screenshots of the severance package agreed to by Weisselberg that said: "except for acts or testimony directly compelled by subpoena or other lawful process issued by a court of competent jurisdiction, he will not: (1) communicate with, provide information to, or otherwise cooperate in any way with any person or entity, including his counsel or other agents, having or claiming to have any adverse claims against the company."
In a series of posts to X, formerly Twitter, Rubin explained that "it's not atypical to require an employee to promise not to assist with others' claims" but noted that the severance agreement wasn't signed until the day before Weisselberg was sentenced in a separate case relating to tax evasion by the Trump Organization earlier this year.
Michael McAuliffe, a former federal prosecutor and elected state attorney, told Newsweek on Thursday that "cooperation and non-disclosure provisions in severance agreements drafted by employers are not unusual."
"They create a barrier to information that helps former employers keep secrets—legitimate and otherwise. In Trump's circumstance, it has the added goal of keeping a central player from easily disclosing information about Trump. However, given that the exception—a subpoena—applies with full force, the public is hearing from Weisselberg regardless of the agreement," McAuliffe said.
Trump has been accused by New York Attorney General Letitia James of fraudulently increasing his own net worth and the value of his properties, such as his Mar-a-Lago residence, in a civil fraud case. Both of Trump's sons, Donald Trump Jr. and Eric Trump, were named in James' lawsuit.
On Tuesday, Weisselberg took the stand to testify in Trump's civil fraud cause and said he was aware that the square footage of Trump Tower was inflated on financial statements from 10,000 square feet to 30,000 square feet.
"Looking at the value of that apartment relative to his net worth is not material. It's about 1 percent," Weisselberg testified. "Looking at the statement of financial condition, there were much larger items on there that I was more concerned about."
Prior to the civil fraud trial, Trump spoke about Weisselberg during a deposition in April when he said: "He was with me for a long time. He was liked. He was respected. Now, he's gone through hell and back. What's happened to him is very sad," CBS News reported.
Since the civil fraud trial began, Trump has continued to maintain his innocence and has repeatedly criticized James and Judge Arthur Engoron, who is overseeing the case.
"By any other Judge in New York, the trial brought by the Corrupt and Racist A.G., Peekaboo James, would be dismissed and over. This case should never have been allowed to be brought - I have NO RIGHTS, & DON'T EVEN GET, UNDER ANY CIRCUMSTANCES, A JURY. Peekaboo has misrepresented values to the judge, like Mar-a-Lago being worth only $18,000,99," Trump said in a TruthSocial post this week.
"I am worth much more than my Financial Statements, so there can be NO FRAUD! I have a 100% Disclaimer Clause, so again, there can be NO FRAUD! This trial is an Election Interference Witch Hunt, and everybody knows it. New York State should intercede and stop this total travesty of Justice."
Newsweek reached out to Trump's spokesperson via email for comment.
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Banking & Finance
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With the cost of a day out rising, young people are at risk of missing out on important life experiences this summer, a charity has warned.
Go Beyond, which gives vulnerable youngsters holidays, said children could be left isolated and lacking confidence as a result.
Tickets for castles, historic sites, gardens, zoos and theme parks have gone up significantly since last year.
However, venues told the BBC they were facing rising costs themselves.
They say higher energy prices, rising wage bills and VAT increases mean they have to pass on some of those costs to visitors.
At the Titanic visitor centre in Belfast ticket prices are up from £21.50 to £24.95, a rise of 16%. Tickets for Kew Gardens in London are up more than 10% at £20.50. And Stonehenge costs 9% more than it used to, although different price rises apply to different tickets.
For parents like Hannah Clarke, a single mother with two children, these higher prices make a big difference.
"It is a massive issue," she said. "It was my daughter's seventh birthday last week and I could only afford the entry cost of where we went because I had saved up supermarket vouchers."
"The trouble is they are changing that scheme, so the vouchers won't go as far as they used to soon.
Hannah said she is trying to be "more strategic" about day trips now, looking for free places to visit, and ones that are closer to her home in Rutland, so she can make lunch before they set out.
"It isn't just the ticket cost but the price of an ice cream when you get there," she added.
Michele Farmer, chief executive of Go Beyond, told the BBC that rising prices could lead to some young people becoming isolated from children their own age, which could have a "negative impact" on relationships, wellbeing and self-esteem.
"It would be easy to take for granted just what a difference having those simple childhood experiences can make to a young person," she said.
"Giving children space away from the worries and pressures they face at home gives them the opportunity to grow in confidence.
"As this summer approaches millions of families who have never had a holiday, now won't be able to afford even the simplest days out," she added.
According to a survey by Barclays, 52% of the 2,000 people it questioned think tourist sites are pricier now than they were prior to the current squeeze on family budgets.
Two-fifths of those say they are less likely to spend money visiting these places as a result. Just under a third say that if they do visit attractions, they are less likely to spend money on extras like food, drink and souvenirs.
BBC News contacted 15 of the leading paid-for tourist sites in the UK. Most of those that responded said they had put up prices, some by more than the overall rate of inflation, which is just over 10%.
Titanic Belfast said it had made the decision to raise prices based on comparable products and that the venue regularly opened its doors to local people, who were less likely to be able to visit normally.
Tickets for the Tower of London go up from £29.90 to £33.60 this year, a 12.3% increase. Historic Royal Palaces said this rise coincided with an increase in what was available to see at the site, and that it was increasing its free and subsidised access at the same time.
The Royal Horticultural Society said it had had to pass on some costs, raising ticket prices for its gardens by an average of 6.4% this year, but it had introduced a £1 entry scheme for those on the lowest incomes, it said. There is a similar concession at Kew.
The National Trust said it had raised prices for adult entry to Bodnant Gardens in Wales from £14 to £15, an increase of more than 7%, to cover the rising costs of lighting, heating and conserving the places in its care.
Cardiff Council and Brighton Pier were the only attractions to say they had not put up either entry fees or ride wristband prices.
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Inflation
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IRB Infra Trust Completes Refinancing Of 5 BOT Projects For Rs 6,400 Crore
Of the 5 build-operate-transfer (BOT) projects, 2 each are located in Maharashtra and Uttar Pradesh, while 1 is in Rajasthan.
IRB Infrastructure Trust, the private InvIT of IRB, has completed the refinancing of five BOT projects for about Rs 6,400 crore located in three states.
Of the 5 build-operate-transfer (BOT) projects, 2 each are located in Maharashtra and Uttar Pradesh, while 1 is in Rajasthan.
"IRB Infrastructure Trust (Private InvIT) has successfully completed the refinancing exercise for its five BOT Assets for around Rs 6,400 crore," IRB said in a statement.
The new interest rate will be 8.6% against 9.7% earlier and help save the company Rs 1,000 crore over the next 5 years, it said.
Virendra D Mhaiskar, Chairman and Managing Director, IRB Infrastructure Developers Ltd, said, "Five of the operational BOT Assets under our private InvIT have successfully completed the re-financing exercise, with debt moving to the InvIT level. This will not only bring down our interest cost, reduce the amortisation in initial years, but also improve the tax efficiency of the portfolio".
IRB Infrastructure Developers Ltd (IRB) is India's first integrated multi-national transport infrastructure developer in the roads and highways segment.
As the largest integrated private toll roads and highways infrastructure developer in India, IRB has an asset base of over Rs 75,000 crore in 12 states across the parent company and two InvITs.
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Banking & Finance
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- More restaurants and retailers are launching their limited-time pumpkin items in August, according to Technomic data.
- Starbucks, Krispy Kreme, IHOP and Dunkin' are among the chains launching their fall menus before Labor Day.
- Some consumers may grumble over the early seasonal launches, but research has convinced companies that stretching out fall is worth it.
In most of the U.S., tree foliage is green and temperatures are warm. But for many restaurants and retailers, fall is already here.
Halloween candy and pumpkin spice lattes used to wait until after Labor Day to make their annual debuts, ushering in the start of fall several weeks before the season officially begins. But in the past few years, restaurants and retailers have been releasing their autumnal food and beverages even earlier.
The number of limited-time pumpkin launches more than doubled to 86 in August 2022 compared with 2019, according to Technomic, which tracked the top 500 restaurant chains and top 40 convenience stores. November is still the most popular month to launch limited-time pumpkin items timed for Thanksgiving, but August is gaining ground.
Restaurants' and retailers' extended fall also comes as pumpkin food and beverages become more popular throughout the autumn. In 2019, restaurants and convenience stores launched 268 pumpkin-themed seasonal items. By 2022, the number had more than doubled to 559 items.
Ken Harris, managing partner at Cadent Consulting Group, said three reasons have driven the shift.
"[The companies] make money from it, the stuff tastes good and they have consumer research that says they have permission to push the boundaries of timing," he told CNBC.
As schools have pushed for an earlier start to the school year, Labor Day has lost some of its status as a seasonal indicator. Since many families are preparing for school in August anyway, fall seems right around the corner. Picking up Halloween candy during back-to-school shopping helps some parents kill two birds with one stone.
Starbucks claims credit for the rise of pumpkin-themed drinks and food, stemming from the introduction of its pumpkin spice latte 20 years ago.
"Go back 20 years ago, nothing pumpkin existed in the marketplace. The only thing you could find in the grocery aisle was a pumpkin puree," Peter Dukes, one of the original creators of Starbucks' pumpkin spice latte, said at a recent press event celebrating two decades of the drink.
The coffee chain also takes the brunt of the ire of consumers who chafe at the early introduction of fall menus. Since 2018, Starbucks has re-released the pumpkin spice latte in August. Its Aug. 24 launch this year is tied with 2021 as the earliest rollout yet for its fall menu.
"It does tend to be at the end of August, which is that time that our customers are returning to their routines," Starbucks spokesperson Erin Stan said.
As Starbucks has pulled the fall season earlier, it has also adjusted its menu. In 2019, it launched the pumpkin cream cold brew, its second-ever pumpkin drink. This year, Starbucks added the iced pumpkin cream chai latte to its menu.
Both drinks address the rising popularity of cold drinks, which account for more than three-quarters of all Starbucks beverage orders, no matter the season. They also happen to be more temperature-appropriate options for late August, when many consumers are still battling the heat and seeking air conditioning.
But Eleni Demestihas, a 28-year-old lawyer based in Denver, plans to delay drinking her first pumpkin spice latte of the season, even though she prefers them iced. Demestihas said she typically waits until she can wear a sweatshirt all day — likely sometime in mid-October.
Until then, she'll just be enjoying the PSL-themed memes.
For all the grumbling over Starbucks' early fall menu, some of its rivals entered the arena even earlier. Dunkin', which is privately owned by Inspire Brands, released its autumn menu Aug. 16, eight days before Starbucks launched its items. Krispy Kreme rolled out its pumpkin spice doughnut lineup Aug. 7.
IHOP released its fall menu, including pumpkin spice pancakes and pumpkin spice cold foam cold brew, on Aug. 28, six days later than its launch last year.
"Generally speaking, for us, the timing of anything like this is really based on consumer insights," IHOP Chief Marketing Officer Kieran Donahue told CNBC.
The Dine Brands chain typically sells about one million of its pumpkin spice pancakes every time they return to menus.
"The fact of the matter is, it's a popular menu item … I think we could offer it at any time and people would buy it," Donahue said.
Lizzy Freier, director of menu research and insights at Technomic, said it's too soon for her to enjoy a pumpkin spice latte. Her hometown of Chicago is expecting temperatures to exceed 90 degrees on Labor Day.
Luckily for Freier, Demestihas and other consumers who plan to hold off on enjoying their favorite fall treats, the early kickoffs haven't led companies to pull items faster, according to Freier.
And fear not — plenty of companies are sticking to normal seasonal boundaries.
Reynolds' Hefty isn't releasing its cinnamon pumpkin spice-scented trash bags until September.
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Consumer & Retail
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Trump's business and political ambitions poised to converge as he testifies in New York civil case
When Donald Trump takes the stand Monday in a Manhattan courtroom to testify in his civil fraud trial, it will be an undeniable spectacle
NEW YORK -- When Donald Trump takes the stand Monday in a Manhattan courtroom to testify in his civil fraud trial, it will be an undeniable spectacle: A former president and the leading Republican presidential candidate defending himself against allegations that he dramatically inflated his net worth.
The charges cut to the very heart of the brand Trump spent decades carefully crafting and put him at risk of losing control of much of his business empire.
But the appearance may also mark the beginning of what will likely be a defining feature of the 2024 election if Trump becomes his party's nominee: a major candidate, on trial, using the witness stand as a campaign platform as he eyes a return to the White House while facing multiple criminal indictments.
“It’s going to be a stunning moment. This is dramatic enough if he was simply an ex-president facing these charges. But the fact that he is the overwhelming favorite to run the GOP, it makes this a staggering Monday,” said presidential historian Douglas Brinkley.
The courtroom at 60 Centre Street has already become a familiar destination for Trump. He has spent hours over the last month voluntarily seated at the defense table, observing the proceedings. Trump once took the stand — unexpectedly and briefly — after he was accused of violating a partial gag order. Trump denied violating the rules, but Judge Arthur Engoron disagreed and fined him anyway.
The vast majority of his speaking has happened outside the courtroom, where he has taken full advantage of the bank of assembled media to voice his outrage and spin the days' proceedings in the most favorable way.
He will also be coming face-to-face again Monday with Engoron, whom he has lambasted on his social media site in recent days as a "wacko” and “RADICAL LEFT, DEMOCRAT OPERATIVE JUDGE” who has already “ruled viciously” against him.
Trump will also be joined by his former fixer and attorney-turned witness, Michal Cohen, who said in an interview he was planning to attend Monday's proceedings.
“My intent is to attend Donald’s appearance as he was gracious enough to attend my court appearances,” he said.
Among the topics likely to be covered: Trump’s role in his company's decision making, in its valuing of his properties, and in preparing his annual financial statements. Trump is likely to be asked about loans and other deals that were made using the statements and what intent, if any, he had in portraying his wealth to banks and insurers the way the documents did.
Trump is also likely to be asked about how he views and values his brand – and the economic impact of his fame and time as president -- and may be asked to explain claims that his financial statements actually undervalued his wealth.
Trump has argued that disclaimers on his financial statements should have alerted people relying on the documents to do their own homework and verify the numbers themselves – an answer that he’s likely to repeat on the witness stand. Trump has said the disclaimer absolved him of wrongdoing.
Eric Trump, the former president's middle son, who testified in the case last week, said his father was eager for his appearance on the stand.
“I know he’s very fired up to be here. And he thinks that this is one of the most incredible injustices that he’s ever seen. And it truly is,” the younger Trump told reporters Friday, insisting his family was winning even though the judge has already ruled mostly against them.
Unlike most Americans, Trump has ample experience fielding questions from lawyers and has a long history of depositions and courtroom testimony that offer insight into how he might respond. But Cohen, who worked for Trump for more than a decade, said nothing in Trump's past has come close to what he's facing now since they were largely civil matters "where even though the dollar amounts were in the millions of dollars, they were never of any real consequence to him or obviously to his freedom.”
“Right now this New York attorney general case is a threat to the extinction of his eponymous company as well as his financial future," he said. Trump's forthcoming criminal cases — accusing him of misclassifying hush money payments, illegally trying to overturn the result of the 2020 election and hoarding documents at his Mar-a-Lago club "have far more significant consequences, most specifically the termination of his freedom.”
Brinkley, the historian, said there was little precedent for Trump's appearance, but said it won't be the first time a past president has taken the stand in a trial accusing him of wrongdoing. He pointed to one case in 1915, when, after unsuccessfully running for a third term as a third-party candidate, former President Theodore Roosevelt was sued for libel for criticizing New York Republican Party boss William Barnes.
The judge eventually ruled in Roosevelt's favor after a five week trial, in which the former president spent eight days on the witness stand.
“They were five weeks of great strain," he wrote in a letter to his son. “But the result was a great triumph, and I am bound that there shall be no more libel suits as far as I am concerned, and for the present at least no further active participation in politics for me.”
___ Associated Press writer Eric Tucker in Washington contributed to this report.
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Banking & Finance
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Coinbase’s CEO Brian Armstrong reportedly told the Financial Times that the U.S. Securities & Exchange Commission asked him to halt trading in the exchange with all currencies except bitcoin. According to Armstrong, the suggestion came just before the SEC sued Coinbase last month.
The SEC’s lawsuit against Coinbase accuses the company of operating as an unregistered securities exchange with the commission’s lawyers further arguing that Coinbase was trading 13 cryptocurrencies that were identified as securities. Those alleged securities could cause Coinbase to fall under the purview of the SEC, but the exchange refused to register with the commission. Bitcoin is not believed to qualify as a security under the Howey Test, according to Reuters. Armstrong denied the SEC’s guidance and opted to handle it in court.
“We really didn’t have a choice at that point, delisting every asset other than bitcoin, which by the way is not what the law says, would have essentially meant the end of the crypto industry in the US,” Armstrong told Financial Times. “It kind of made it an easy choice...let’s go to court and find out what the court says.”
Coinbase did not immediately return Gizmodo’s request for comment.
The SEC’s lawsuit alleges that by failing to register the exchange, Coinbase failed to protect its users with regulatory inspections, required record keeping, and safety against conflicts of interest. The lawsuit also targeted Coinbase’s staking program, which was a bona fide high-yield savings account in which users could earn rewards by “staking” their crypto assets. However, the SEC alleged that this program was also an unregistered security and stated in the lawsuit that Coinbase should be“permanently restrained and enjoined” from the product.
As interest in NFTs, the ‘metaverse’, and tokens, in general, has wained over the last year and regulators have increased the number of cases they’re bringing against big crypto players, the people who insist that bitcoin will be the ultimate winner are getting a boost of confidence—for now.
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Crypto Trading & Speculation
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Keir Starmer will vow to build more nuclear power stations as he slams the Tories’ failure to open a single one during 13 years in power.
The Labour leader will warn that this government’s “shambolic” approach has cost 7,000 British jobs.
The last Labour government approved 10 sites across England and Wales for new nuclear power stations in 2009.
But only one new plant, Hinkley Point C, is currently under construction and is not due to be commissioned for another four years.
Ahead of a visit to the power station site in Somerset on Monday, Mr Starmer said the UK's "ambition and potential grinds to a halt" under the Tories.
"The British people should be benefitting from our country's natural resources, but the Tories' woeful record is holding us all back," he said.
"My government will lower household energy bills, create jobs and ensure Britain's energy security.
"Nuclear is a critical part of the UK's energy mix. It's shambolic that after 13 years of Tory government, not one of the 10 nuclear sites approved by the last Labour Government have been built."
He added: “Only Labour will get Britain building and power our future."
The Labour leader will pledge to get existing projects over the line and identify places where further plants could be built.
He will also vow to reform the planning system so decisions on renewable power can be made in months rather than years.
The 10 sites approved for future nuclear plants in 2009 were Bradwell in Essex; Braystones, Kirksanton and Sellafield in Cumbria; Hartlepool; Heysham in Lancashire; Hinkley Point in Somerset; Oldbury in Gloucestershire; Sizewell in Suffolk and Wylfa in North Wales.
At the time, Labour ministers said they hoped to fast-track the construction of the new power stations so that some could be producing energy by as early as 2018.
It was confirmed last year that Sizewell C will go ahead, but construction has not yet begun. Bradwell B is still only at the early stages of the planning process.
Labour has promised to build a power system run entirely by cheap, home-grown renewables and nuclear by the end of this decade.
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Energy & Natural Resources
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Fedbank Financial Services IPO Live Updates On Day Three
The IPO was subscribed 1.08 times, as of 12:09 p.m. on Friday.
Fedbank Financial Services launched its initial public offering on Nov. 22. On its first day, the IPO was subscribed 38% and 0.90 times, or 90% on day two. The IPO was subscribed 1.08 times, as of 12:09 p.m. on Friday.
The retail-focused NBFC, targeting MSMEs and emerging self-employed individuals, has fixed its IPO price in the range of Rs 133 to Rs 140 per equity share. The face value of the issue is Rs 10.
The share sale is a mix of a fresh issue of 4.29 crore shares, aggregating to Rs 600.7 crore, and an offer for the sale of 3.52 crore shares to the tune of Rs 492.26 crore.
Through OFS, the Federal Bank's overall holdings will come down to 61% from the current 73%, and True North's will come down to 8.5% from the current 25%.
The company intends to use the net proceeds from the fresh issue to augment Tier-I capital base to meet its future capital requirements arising out of the growth of business and assets.
ICICI Securities, Equirus Capital, IFL Securities, and JM Financial are managing the IPO.
The company raised Rs 330 crore from anchor investors via a pre-IPO placement on Monday. The pre-IPO placement comprises 23.5 lakh equity shares, according to an exchange filing.
SBI Life Insurance, Star Union Dai-chi, Yasya Investments, Nuvama Crossover III, and Nuvama Crossover IIIA are some of the key investors.
IPO Details
Offer Opens: Nov. 22.
Offer Closes: Nov. 24
Fresh Issue Size: Rs 600 crore shares.
OFS Size: 3.52 crore shares
Price Band: Rs 133–140 per share.
Lot Size: 107 shares.
Face Value: Rs 10 per share.
Listing: NSE, BSE.
Business Model
Fedbank Financial Service Ltd is a retail-focused NBFC, promoted by the Federal Bank Ltd.
Fedbank Financial Service has the second and third lowest cost of borrowing among MSMEs, gold loan and MSME & gold loan peer set in India in financial year 2023, and three-months period ended June 30, 2023, respectively, according to CRISIL.
The financial service is the one of the top five NBFCS promoted by private banks in India. Fedbank Financial witnessed a three year CAGR of 33% between FY2020 and FY2023, and the fourth fastest year-on-year asset under management growth of 42% for three-months period ended June 30, 2023, according to CRISIL.
Subscription Status: Day 3
The IPO was subscribed 1.08 times, as of 12:09 p.m. on Friday.
Institutional investors: 0.60 times
Non-institutional investors: 0.71 times
Retail investors: 1.50 times
Employee Reserved: 1.02 times
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Banking & Finance
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Adani Total Gas Shares Surge 18% As Rally In Group Stocks Continues
The stock rose as much as 17.98% during the day to Rs 760 apiece on the NSE.
Shares of Adani Total Gas Ltd. surged as much as 18% on Wednesday as the rally in group stocks continued after the Supreme Court ended hearing in the Adani-Hindenburg matter last week.
The Adani Group stocks added over Rs 56,000 crore in market value in morning trading. That conglomerate had added about Rs 1.34 lakh crore in investor wealth on Tuesday in its best day in about 19 months.
Adani Total has also announced green hydrogen blending pilot project in Ahmedabad. It will blend green hydrogen—produced via electrolysis of water and renewable power—for over 4,000 residential and commercial customers in the city.
"The project is expected to be commissioned by Q1 FY24-25 and the percentage of green hydrogen will be gradually increased in the blend to up to 8% or more, depending on regulatory approvals," it said in an exchange filing on Tuesday.
After successfully completing the pilot, hydrogen blended fuel will be supplied stepwise to larger parts of the city and other licenced areas of the company, it said.
Adani Total's stock rose as much as 17.98% during the day to Rs 760 apiece on the NSE. It pared gains to trade 12.7% higher at Rs 725.70 apiece compared to a 0.6% advance in the benchmark Nifty 50 as of 09.59 a.m. The stock hit the 20% upper circuit on Tuesday.
The total traded volume so far in the day stood at 28 times its 30-day average. The relative strength index was at 83.23, suggesting that the stock may be overbought.
Disclaimer: AMG Media Networks Ltd. (AMNL) currently owns 49% stake in Quintillion Business Media Ltd. (QBML), the owner of BQ Prime Brand. AMNL has entered into an MOU to acquire the balance 51% stake in QBML. Post acquisition, QBML will become a wholly owned subsidiary of AMNL.
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Stocks Trading & Speculation
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Furious residents of a smart commuter belt village say they have been cut off from the outside world - having been unable to get any mobile phone signal for almost a year.
People living in Smallfield, Surrey, have been unable to make or receive calls or texts since last September due to a broken telephone mast.
The mast failure means they have been unable to make calls or online transactions and a range of necessary services including food shopping because authentication messages from their banks do not come through.
The mast is owned by O2 but its breakdown is affecting users of other service including those of twin company Virgin Media as well as Tesco and Sky's mobile service.
Angry residents claim to have been 'ignored' by O2 since the problems began – and are now calling for something to be done and want refunds for the massive inconvenience to their lives.
Jacqui Lacroix, who runs Jacqui's Cleaning business, says she has missed out on clients rearranging appointments because she never receives texts and calls – and left her having to leave the area to get help for her sick child.
Jacqui said: 'Some people don't have landlines and you can't get [mobile phone] signal, it is just a nightmare.
'I don't get texts if there is a problem [with my business], one customer told me not to come and I didn't even get his text.'
Manjinder Singh said: 'It has been a massive issue for day-to-day life. If we have relatives, they make fun of the area.
'My parents have medical conditions and sometimes we need to call an ambulance. But because we don't have any reception, we always worry that if, God forbid, we must urgently call the ambulance then what will happen?
'Also, we had to miss so many doctors' phone calls too.'
Annalisa Cinque, who runs Bounce Smallfield, told how it was causing major headaches for her business.
She said: 'I transferred to O2 a year ago as I run my business from the heart of Smallfield and my understanding was that O2 was the best provider.
'I can get no reception at all, for the three to four hours I am here so am uncontactable which leaves my business suffering as a result of this.
'It is quite despicable. And [we have received] no compensation.'
Jacqui said O2 told her the issue was there are trees in the way, which she disputes, and they do not have access to the site as the land owner will not let them enter.
She says: 'There are no trees, and you can clearly see the mast from the road several fields away.
'So many people do not have signal in the village and O2 don't [seem to] care as their response is telling people they can leave if they want.'
Jacqui added: 'The thing is O2 don't seem to be working on it. It's affecting everyone's lives.'
Claire Coutinho MP said: 'Since residents first contacted me about the lack of service in and around Smallfield, I have been urging O2 Virgin Media to find a swift solution to the problem. In February I wrote to their CEO to ask for a timetable for when normal service will be restored and whether customers will be entitled to compensation.
'I have since been having conversations with 02 Virgin Media who have confirmed that they have boosted coverage signal from the masts surrounding Smallfield, and that delays are a result of the bureaucracy involved in getting permission from the council to build a new mast on a different site.
'My constituents have not been able to access a service they pay for for almost a year. I am continuing to pass on the frustrations of my constituents and the details of individual residents who are still getting no service.'
A Virgin Media O2 spokesman told MailOnline: 'We're aware that some customers in the Smallfield area may be experiencing intermittent coverage issues, and we apologise for any inconvenience caused.
'Unfortunately, we've been unable to access the local mast to upgrade services as planned, so are working on an alternative solution to improve services for local people.'
They added that included the potential for using a neighbouring site.
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Consumer & Retail
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BOE to Shrink Balance Sheet £100 Billion, Stepping Up Quantitative Tightening
The Bank of England will step up the pace it’s unwinding its quantitative easing portfolio of bonds, reversing a vast stimulus program it deployed through the financial crisis and pandemic.
(Bloomberg) -- The Bank of England will step up the pace it’s unwinding its quantitative easing portfolio of bonds, reversing a vast stimulus program it deployed through the financial crisis and pandemic.
The Monetary Policy Committee said its balance sheet of government debt will shrink by £100 billion in the second year of so-called quantitative tightening through bonds maturing or being sold. That’s a faster pace than the £80 billion reduction in gilts in the first year scaling back the portfolio.
The move signals that officials led by Governor Andrew Bailey are determined to normalize policy settings after the emergency program was put in place in 2009. It presents a challenge for the UK Treasury, which is selling more bonds to finance its debt and has the added burden of having to pay for losses the BOE incurs through the program.
“A faster pace of QT will add to the pressures faced by the public finances, since the Treasury is committed to indemnifying the Bank of England on any losses made on gilts at the point of sale, at a time when gilt issuance is already high,” said Martin Beck, chief economic advisor to EY ITEM Club
The UK central bank is moving more quickly than the US Federal Reserve and European Central Bank to scale back its balance sheet, according to analysis by Columbia Threadneedle.
The BOE said that the pace is “unlikely to disrupt the functioning of financial markets” and that a £100 billion target would mean the speed of gilt sales is left “broadly unchanged” due to the number of bonds maturing in the portfolio.
“The MPC also reaffirmed that there would be a high bar for amending the planned reduction in the stock of purchased gilts outside a scheduled annual review,” minutes from the BOE’s monetary policy meeting said.
Under QE, the BOE snapped up £895 billion of government and corporate bonds to boost the economy, helping to lower long-term interest rates and stabilize markets during times of crisis. It currently has just under £760 billion of gilts remaining on its balance sheet after almost completely unwinding its corporate bond purchases.
The BOE decided to speed up the run-off of its balance sheet after judging last month that the unwinding of QE was “going smoothly” and having only a small impact on gilt yields. It said that it needed to slash its stock of bonds to give it more headroom in case it needs to use the controversial tool again in a future crisis.
However, critics have warned that QT is having a much bigger impact on gilt yields than the BOE estimates. Columbia Threadneedle has likened the unwinding to former Chancellor of the Exchequer Gordon Brown’s infamous decision to “sell gold at the bottom of the market.”
--With assistance from Andrew Atkinson and Irina Anghel.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Interest Rates
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NBFC-MFIs Largest Provider Of Microfinance: Report
Banks, on the other hand, hold the second largest share of portfolio of micro-credit with total outstanding of Rs 1,19,133 crore, comprising 34.2 per cent of the total in the microfinance space.
Microfinance Industry Network (MFIN), an umbrella body of microfinance institutions (MFIs) of the country, in its report said that NBFC-MFIs are the largest provider of micro-credit amongst other regulated entities.
In a report of the MFI sector prepared by MFIN for the year 2022-23, it said that in the microfinance space, NBFC-MFIs provided finance with loan outstanding of Rs 1,38,310 crore as on March 31, 2023, accounting for 39.7 per cent of total industry portfolio.
Banks, on the other hand, hold the second largest share of portfolio of micro-credit with total outstanding of Rs 1,19,133 crore, comprising 34.2 per cent of the total in the microfinance space.
Small finance banks (SFBs) have a total outstanding of Rs 57,828 crore with a total share of 16.6 per cent, the report said.
At the end of the last financial year, the total MFI portfolio stood at Rs 3,48,339 crore.
According to the report, the MFI sector has immense growth potential with the market size estimated by MFIN to be around Rs 13 lakh crore during the current fiscal 2023-24.
MFIN said that the new regulations have guided the strengthening of governance in microfinance operations.
MFIN said that the sector has rebounded post-COVID in terms of funding, portfolio quality and client addition by the individual MFIs. The sector has seen post-COVID that centre meeting attendance have come down significantly due to focus on digital interventions.
MFIN said that the sector needs to devise a strategy to ensure that while digital processes go on, client connect through centre meetings is not diluted, which is important to maintain collection efficiency ratio at higher levels.
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Banking & Finance
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American supermarkets are facing a blueberry shortage after extreme heat in Peru — the largest exporter of blueberries in the world — resulted in a stingy harvest, according to reports.
Peru has been crippled by the El Niño weather phenomenon, which increases global temperatures each time it purrs across the globe every two to seven years, according to the National Oceanic and Atmospheric Administration.
This year, El Niño sparked warner and drier weather conditions across the South American country, per the NOAA, causing a blueberry drought that’s slashed supplies as much as 70%, Forbes reported.
Last week, the volume of blueberries that reached US stores from Peru was less than half of what it was the same week a year ago, according to Forbes.
In a typical year, Peru sends about one-third of its 1.3 billion pounds of its blueberry crop to American grocery stores.
With that harvest hacked down to some 390 million pounds, blueberries have become a pricey treat.
Since the beginning of September, the price of blueberries have surged as much as 60%, to nearly $6 per pound, according to Forbes, citing NielsenIQ data, which analyzes thousands of receipts from US retailers.
In the past two months alone, a container of blueberries increased $2 per container in the face of dwindling supplies.
Some 27 million pounds less of the sweet, tangy fruit have sold in 2023 compared to last year, Forbes reported.
“This is the first time in this industry’s history where we have had such a large contraction of supply, because of how big Peru has gotten, globally,” Kasey Cronquist, the president of both the US Highbush Blueberry Council and the North American Blueberry Council, told Forbes.
“They were having an endless summer in Peru, and, for blueberries, that has had a consequence,” Cronquist added.
Blueberry bushes need temperatures between 32 degrees and 45 degrees Fahrenheit to thrive, though Peru has been sweltering with El Niño-induced temperatures ranging between 59 degrees and 81 degrees Fahrenheit so far this year.
This spells bad news for the US, which has come to rely on Peru for its blueberry supply over the past decade.
In 2013, Peru sent its first over 1 million-pound batch of blueberries to the US, according to Forbes.
By 2020, Peru was America’s main blueberry supplier, and as of 2022, the US imported upwards of 339 million pounds of Peruvian blueberries.
Cronquist said that the blueberry industry is working to breed different varieties of the fruit that will be more resistant to heat.
By the spring, once North America’s blueberry-growing season starts and growth ramps up in the 10 major blueberry-producing states — Oregon, Washington, Georgia, Michigan, California, New Jersey, North Carolina, Florida, Texas and Minnesota — Cronquist told Forbes that the shortage will come to and end and prices will cool.
The Post has sought comment from the US Highbush Blueberry Council and the North American Blueberry Council.
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Agriculture
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About 61% of Americans are living paycheck to paycheck, an issue that impacts both low-wage and high-income families alike, according to new research from LendingClub.
Low-wage earners are most likely to live paycheck to paycheck, with almost 8 in 10 consumers earning less than $50,000 a year unable to cover their future bills until their next paycheck arrives. Yet even 4 in 10 high-income Americans, or those earning more than $100,000, say they're in the same position, the research found.
Such a situation is viewed as financially risky because it means those households don't have enough savings to tide them over in case of an emergency, indicating that they are unable to cover their upcoming bills until their next payday. The rate of Americans who are living paycheck to paycheck is on the rise, up 2 percentage points from a year earlier, the analysis found.
Inflation is partly to blame, with consumers still grappling with higher prices —since hitting a 40-year high of 9.1% in June 2022. But a minority of paycheck-to-paycheck consumers point to another issue that's impacting their financial stability: nonessential spending on items such as travel, eating out and streaming services, the analysis found.
Beyond the basic necessities
"According to 21% of paycheck- to-paycheck consumers, nonessential spending is one reason for their financial lifestyle, with 10% saying it is their top reason for living paycheck to paycheck," the report noted. "This factor is significant: Consumers, despite financial challenges and tighter budgets, indulge in nonessential spending when possible."
Still, the majority of paycheck-to-paycheck consumers aren't splurging or spending on things beyond the basic necessities. And those essentials alone can quickly eat up a worker's paycheck.
How far does the typical paycheck go?
U.S. workers earn median pay of $4,766 per month before taxes, according data from the Bureau of Labor Statistics. That's about $57,000 in annual income, or what the LendingClub analysis considers a middle-income earner.
But monthly expenses can quickly gobble that up. For instance, median rent for a one-bedroom apartment is $1,510 per month, while U.S. households spend about $690 a month on food, including groceries and eating out, BLS data shows.
On top of that, the average monthly expenditure on travel, including car payments, gasoline and public transportation, is about $900. Health care is another $450 per month, BLS data shows.
Those basics alone add up to $3,550 per month — which already represents the bulk of a middle-income worker's pre-tax income.
The year-over-year increase in Americans who are living paycheck to paycheck "indicates that consumers are still feeling the weight of rising costs of living and remain tasked with managing and adjusting their cash flows to put aside savings," LendingClub said in the report.
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Inflation
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Single mom perfectly explains to Congress why the U.S. poverty line needs a total rehaul
"I'm not asking you to apologize for your privilege but I'm asking you to see past it."
Nearly 12 percent of the U.S. population lives in poverty. That's more than one in ten Americans—and the percent is even higher for children.
If you're not up on the current numbers, the federal poverty line is $12,760 for an individuals and $26,200 for a family of four. If those annual incomes sound abysmally low, it's because they are. And incredibly, the Trump administration has proposed lowering the poverty line further, which would make more poor Americans ineligible for needed assistance.
However, debates over the poverty line don't even capture the full extent of Americans struggling to make ends meet. For many people, living above the poverty line is actually worse. These are the folks who make too much to qualify for aid programs but not enough to actually get by—a situation millions of working American families find themselves stuck in.
Amy Jo Hutchison is a single mother of two living in West Virginia, and a community organizer for West Virginia Healthy Kids and Families and Our Future West Virginia. She has also lived in poverty and been part of the working poor herself. In an impassioned speech, she spoke to the House Committee on Oversight and Reform about what poverty really looks like for working families—and even called out Congress for being completely out of touch with what it takes for a family to live on while they're spending $40,000 a year on office furniture.
Watch Hutchison's testimony here (transcript included below):
Ms. Hutchison Testimony on Proposed Changes to the Poverty Line Calculation
"I'm here to help you better understand poverty because poverty is my lived experience. And I'm also here to acknowledge the biased beliefs that poor people are lazy and the poverty is their fault. But how do I make you understand things like working full-time for $10 an hour is only about $19,000 a year, even though it's well above the federal minimum wage of $7.25 an hour?
I want to tell you about a single mom I met who was working at a gas station. She was promoted to manager within 30 days. She had to report her new income the DHHR within 60 days. Her rent bumped from $475 to $950 a month, she lost her SNAP benefits and her family's health insurance, so she did what poor people are forced to do all the time. She resigned her promotion and went back to working part-time, just so she and her family could survive.
Another single mom I know encouraged her kids to get jobs. For her DHHR review she had to claim their income as well. She lost her SNAP benefits and her insurance, so she weaned herself off of her blood pressure medicines because she—working full-time in a bank and part-time at a shop on the weekends—couldn't afford to buy them. Eventually the girls quit their jobs because their part-time fast food income was literally killing their mother.
You see the thing is children aren't going to escape poverty as long as they're relying on a head of household who is poor. Poverty rolls off the backs of parents, right onto the shoulders of our children, despite how hard we try.
I can tell you about my own with food insecurity the nights I went to bed hungry so my kids could have seconds, and I was employed full time as a Head Start teacher. I can tell you about being above the poverty guideline, nursing my gallbladder with essential oils and prayer, chewing on cloves and eating ibuprofen like they're Tic Tacs because I don't have health insurance and I can't afford a dentist. I have two jobs and a bachelor's degree, and I struggle to make ends meet.
The federal poverty guidelines say that I'm not poor, but I cashed in a jar full of change the other night so my daughter could attend a high school band competition with her band. I can't go grocery shopping without a calculator. I had to decide which bills not to pay to be here in this room today. Believe me, I've pulled myself up by the bootstraps so many damn times that I've ripped them off.
The current poverty guidelines are ridiculously out of touch. The poverty line for a family of three is $21,720. Where I live, because of the oil and gas boom, a 3-bedroom home runs for $1,200 a month. So if I made $22,000 a year, which could disqualify me from assistance, I would have $8000 left to raise two children and myself on. And yet the poverty guidelines wouldn't classify me as poor.
I Googled 'congressman salary' the other day and according to Senate gov the salary for Senators representatives and delegates is $174,000 a year so a year of work for you is the equivalent of almost four years of work for me. I'm $24,000 above the federal poverty guidelines definition of poor. It would take nine people working full-time for a year at $10 an hour to match y'all's salary. I also read that each senator has authorized $40,000 dollars for state office furniture and furnishings, and this amount is increased each year to reflect inflation.
That $40,000 a year for furniture is $360 more than the federal poverty guidelines for a family of seven, and yet here I am begging you on behalf of the 15 million children living in poverty in the United States—on behalf of the one in three kids under the age of five and nearly 100,000 children in my state of West Virginia living in poverty—to not change anything about these federal poverty guidelines until you can make them relevant and reflect what poverty really looks like today.
You have a $40,000 dollar furniture allotment. West Virginia has a median income of $43,000 and some change. People are working full-time and are hungry. Kids are about to be kicked off the free and reduced lunch rolls because of changes y'all want to make to SNAP, even though 62 percent of West Virginia SNAP recipients are families with children—the very same children who cannot take a part-time job because their parents will die without insurance. People are working full-time in this country for very little money.
They're not poor enough to get help. They don't make enough to get by. They're working while their rationing their insulin and their skipping their meds because they can't afford food and healthcare at the same time.
So shame on you. Shame on you, and shame on me, and shame on each and every one of us who haven't rattled the windows of these buildings with cries of outrage at a government that thinks their office furniture is worthy of $40,000 a year and families and children aren't.
I'm not asking you to apologize for your privilege but I'm asking you to see past it. There are 46 million Americans living in poverty doing the best they know how with what they have and we, in defense of children and families, cannot accept anything less from our very own government."
In addition to Hutchison's testimony, a coalition of 26 patient organizations, including the American Cancer Society Action Network, American Heart Association, and United Way, wrote a joint letter opposing the proposed lowering of the poverty line, stating:
"The current Official Poverty Measure (OPM) is based on an old formula that already does not fully capture those living in poverty and does not accurately reflect basic household expenses for families, including by underestimating child care and housing expenses. The proposed changes to the inflation calculation would reduce the annual adjustments to the poverty measure and therefore may exacerbate existing weaknesses, putting vulnerable Americans – including those with serious and chronic diseases – at great risk. Further lowering the poverty line would also give policymakers and the public less credible information about the number and characteristics of Americans living in poverty."
This article originally appeared on 03.10.20
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Inflation
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The support for unpaid carers, of whom there are 5 million in England and Wales, is not good enough. The latest census release, showing that about 1.5 million carers spend more than 50 hours each week caring for elderly or disabled relatives, is an opportunity to address this. While the total number of unpaid carers has fallen by 600,000 since the last census – the pandemic may have skewed the numbers – the rise in the number of those spending at least 20 hours each week on unpaid care is a stark reminder of the demographic changes under way, the challenges these are creating for millions of families, and the inadequate public-policy response.Often, these issues are framed in terms of the pressure they put on the NHS. In particular, the chronic national shortage of social care means that many patients who are fit to be discharged from hospital end up stuck there. Unless the 165,000 vacancies for paid care workers start to be filled, it is hard to see this situation improving. The government and councils have mismanaged the sector disastrously, allowing greedy private care home bosses to extract excess profits. The revelation that the directors of one chain, Runwood Homes, received £57m in salaries and dividends over five years despite almost a third of their homes failing the most recent inspections, is an egregious example.But the unpaid work performed by carers for family members is too often ignored in policy discussions. While replacing it would cost the government tens of billions of pounds, it is frequently taken for granted or treated sentimentally. A labour of love is still labour. With the number of dementia sufferers in the UK expected to increase to 1.6 million people by 2040, from 900,000 today, the discussion around care must be an inclusive one that recognises how it affects private and domestic lives as well as public services. The Conservatives’ 2019 general election manifesto included a pledge to give people with recognised caring responsibilities a new legal entitlement to leave from work, reflecting the difficulties of balancing paid employment with unpaid care. A private member’s bill now making its way through parliament would grant them one additional week’s unpaid leave. That would be an important marker, but with poverty among the many problems they face, unpaid leave would be unsuitable for many. At Centrica, one company that already grants carers paid leave, the scheme is reported to work well.While more detailed data is needed, we already know that the areas with the highest numbers of unpaid carers are among the most income-deprived. There is also a north-south divide and a gender gap – with women doing more unpaid care as well as childcare and housework.The issue of unpaid carers is not separate from the wider social care crisis. It is partly the lack of care workers – whether privately or publicly funded – that forces people to care for relatives, and sometimes friends, themselves. There remains a pressing need for a long-term solution to the UK’s growing social care challenges. But unpaid carers’ specific circumstances also demand a specific response, from Labour as well as the government. This should include a commitment to regularly uprate the carer’s allowance – available to some of those providing over 35 hours a week care – and the earnings cap for claimants. Currently, it acts as a barrier to paid employment. Increased investment in respite care, enabling carers to take breaks, would also provide much-needed relief. Turning a blind eye to this vulnerable group of people – particularly the 2.5 million who do more than 20 hours of unpaid care every week – should not be an option, particularly now, in the midst of this cost of living crisis.
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Workforce / Labor
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DLF - Targeting 12-15% Pre-Sales CAGR Over Medium Term: Motilal Oswal
Exploring additional transit-oriented development potential in Gurugram and Chandigarh
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
DLF Ltd. reported bookings of Rs 42.7 billion in H1 FY24, flat YoY due to absence of any major launches except for a plotted project in Panipat and luxury floors in DLF city.
However, we expect the pre-sales run-rate to recover, driven by the launch of high-rise projects in Sector 77, New Gurugram and DLF 5, Gurugram, coupled with a tower launch in ONE Midtown, Delhi and the of luxury floors in DLF city.
The combined gross development value potential of these projects is expected to reach ~Rs 120 billion (includes only the first phase of the GCR project) and is expected to garner a robust market response.
Although DLF’s planned launch of a luxury project in Chennai has been delayed by a quarter, the recently acquired project in the Western suburbs of Mumbai is poised to compensate for the sales shortfall.
Based on the indicative launch pipeline, we expect DLF to clock Rs 155 billion of pre-sales in FY24, up 3% YoY. Depending upon the timing of the launch, the Mumbai project can add Rs 10 billion to FY24 pre-sales.
We maintain 'Neutral' rating with an increased target price of Rs 650.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
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Real Estate & Housing
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Morgan Stanley Favors Treasuries In Clash With Wall Street Peers
The investment bank is advising its clients buy Treasury five-year notes and 30-year inflation-linked debt.
(Bloomberg) -- Morgan Stanley has pushed back against Treasury bears, saying investors should buy US sovereign debt as markets may be too optimistic over the prospect of a soft-landing for the economy.
Treasuries are also likely to be supported as inflation can keep slowing even if growth does remain relatively healthy, strategists at the investment bank including Matthew Hornbach in New York wrote in a research note.
“We continue to suggest investors adopt an overweight stance on government bond duration,” the strategists said. “Market extrapolation of strong growth into the long term via higher long-term real rates may not pan out, leaving the rise in long-end yields vulnerable to a correction.”
The investment bank is advising its clients buy Treasury five-year notes and 30-year inflation-linked debt, according to the note.
Morgan Stanley’s bullish view clashes with a number of its Wall Street peers.
JPMorgan Chase & Co. raised its forecasts for Treasury yields last week — increasing the year-end target for the 10-year to 4.20% from 3.85%, and ended a losing recommendation to be long five-year notes. Bank of America also last week recommended its clients to take a neutral stance on US debt, saying economic resilience may cause 10-year yields to climb as high as 4.75% before settling around 4%.
The latest market positioning data echoes the Wall Street conflict. Asset managers were bullish on 10-year Treasury futures in the latest weekly figures from the Commodity Futures Trading Commission, while hedge funds extended bearish positioning in long-bond contracts.
Feeling Good
Benchmark US yields have climbed about a percentage point from this year’s low set in April as traders scrapped bets on Federal Reserve interest-rate cuts this year due to better-than-expected economic data. Ten-year yields rose another three basis points to 4.29% Monday after Treasury Secretary Janet Yellen said on Sunday she’s “feeling very good” about avoiding a recession and containing inflation.
For its part, Morgan Stanley is happy to stand out from the crowd.
“They say it’s lonely at the top,” the strategists wrote. “The same can be said for being bullish on bonds at the highs in yield. We stand alone, with conviction, telling investors to buy government bonds.”
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Bonds Trading & Speculation
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Open banking, in which traditional banks release their data via application programming interfaces (APIs) to enable the development of new financial services for their consumers, has been one of the most significant disruptions in global payments over the past decade. Less than five years ago, this innovation, in which businesses use APIs to access customers’ financial accounts and provide an array of integrated and embedded financial services, took on in Africa.
In the latest development, South African fintech Stitch, which has built an “end-to-end payments solution designed to meet the complex and evolving payments needs for its enterprise clients,” is announcing some funding to become a market leader in this payments segment.
Stitch focuses on enabling businesses to build, optimize, and scale financial products and providing API gateways to improve the conversion for online payments and optimize payment operations for its clients. The Cape Town fintech has raised $25 million in an extension round of funding led by global fintech investor Ribbit Capital, bringing Stitch’s total Series A to $46 million. Existing backers, including CRE Ventures, PayPal Ventures and the Raba Partnership, participated in the round.
This is Ribbit Capital’s third investment in Africa after leading Chipper Cash’s $30 million Series B and Wave’s $200 million Series A. Co-founder and CEO Kiaan Pillay said the team has been fortunate to have prominent local and international backers in its corner since it came out of stealth in 2021. Its earlier investors bought into the narrative that its team, targeting a vast market opportunity, could build and scale products that create value in a fledging fintech category. But as it enters the growth stage, having healthy growth numbers matters more, especially in this current venture capital slowdown.
Pillay acknowledging this, stated that the serendipitous alignment of strong traction and preexisting ties was critical in landing its lead investor and closing the round. “It was a good happenstance that we finally started to find traction in a world where hard numbers are significant for investors like Ribbit, whose team we’ve known for a while,” noted the CEO, adding that Ribbit Capital’s strong understanding of the global fintech landscape and emerging markets will be invaluable to Stitch which is on track to process over 50 million transactions, totaling $2 billion in total payment volume (TPV) this year.
These figures are across seven product features Stitch has launched since early 2022. Stitch was a quasi-data, quasi-bank-to-bank payments platform before embarking on a feature release spree. Its clients, ranging from enterprises to entrepreneurs, could use its platform to access customers’ financial accounts and innovate around providing services such as personal finance, lending, insurance, payments and wealth management.
Now it has evolved into a full payment service provider. Customers can accept payments via pay by bank, debit and credit card, recurring debits, cash and manual bank transfer; manage, orchestrate and reconcile payments across multiple methods, providers and geographies in one dashboard with PayOS; and disburse funds via payouts. Several use cases include e-commerce checkouts, finance operations, financial services, lending and insurance, marketplaces and recurring payments.
Stitch says its end-to-end payment solutions is primarily offered to enterprise businesses in South Africa. MTN, Multichoice, the Foschini Group (TFG), Standard Bank’s SnapScan and Yoco are a few names. However, it still has a handful of startups and small businesses as customers in Nigeria and other African countries where it has licenses to operate, Pillay said in the interview. The fintech, whose competitors include Mono, Okra, Revio, and MoneyHash, also serves global PSP partners and is in talks to do the same with a few global consumer internet companies.
“We moved away from being a single method platform to a next-generation PSP for local and global enterprises,” said the CEO who founded Stitch with Natalie Cuthbert and Priyen Pillay. “Initially, we just had a pay-in feature where we support bank and card payments. While we’ve added more, we now have an orchestration layer, which many enterprises use to manage payment methods and reconcile across different banks. And we do payouts, whether a disbursement, a refund, or a withdrawal. Our solution is attractive for global companies trying to enter the market for the first time because of the end-to-end process.”
From the point of view of these consumer internet companies in the U.S. or Europe, South Africa is often seen as the gateway to Africa. Unlike other African markets, the country has a functional credit card system, which makes card integration straightforward. However, it’s still essential that these outfits consider other payment options in an African market where cards aren’t prevalent, which is where Stitch comes in. According to Pillay, the demands of local enterprise clients pushed the company to develop these product features, which he believes can be tailored to the needs of global clients, within the past year,
“I don’t think large enterprises only use us for a single method. I think one of the coolest metrics for us is within the first three months of going live with a large enterprise, we’ve seen almost every single one adopt a second or a third product because we can incrementally add things in a very modular way,” he said. “We’re sort of playing in a space that we wouldn’t have expected to, but because big merchants have demanded us to have more products, it’s been an easier place to get into and scale from there.”
Stitch, which emerged from stealth in 2021, claims its platform offers customers better reliability, higher uptime, and quicker problem resolution by utilizing direct connections with banks and networks and removing intermediaries. In addition to its open banking features, Stitch provides client support, including localized insights into the payments landscape and custom-built, co-created solutions tailored towards removing the complexities of sending, receiving and managing funds. Its subsidiary, WigWag, enables small businesses and micro-influencers who sell goods and services on social media platforms to accept payment via a link and card.
The fintech has now raised $52 million in venture capital (including a $6 million seed). The company, which has over 80 employees, plans to use its Series A money to continue developing its platform, expanding its customer base, and seizing opportunities to serve new markets, Pillay expressed on the call.
“Everything we do is client-focused. We’ll continue to optimize for what they have. And then scale geographically with them and deeper in products they already have,” added the CEO. “We also want to continue adding as many first-party payment methods as possible. Our value proposition has been precision engineering and deep infrastructure, so, for instance, we are looking at connecting to card and bank rails without intermediating. Things like this are often slow and capital intensive; that’s why we raised.”
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Banking & Finance
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WORKERS fear dying before ever getting their pension amid a bleak forecast that could see millions worked to the grave.
This week The Sun revealed the Government is planning to hike the retirement age to 68 as early as 2035.
6Residents in Glasgow are concerned about the pension hike newsCredit: Tom Farmer
6Scots construction worker Nigel Love said he was 'worried' about the pension age hikeCredit: Les Gallagher
It means Brits born in the 1970s and later are likely to be told they must work for longer as early as the March Budget.
This comes despite the state pension age already due to rise from 66 to 67 by 2028.
And people in Glasgow say the grim forecast is weighing particularly heavily on them.
Here, the average remaining life expectancy after 40 is 34.8 and 39.8 years for men and women respectively. In comparison, women in London's upmarket Kensington and Chelsea can live an extra 9.3 years than those in Glasgow.
The figures coupled with news of the pension hike have left residents in the Scottish city reeling, stressing it is the working class that "suffer".
"Worried" Scots construction workers Nigel Love, 55, and Steven Munro, 28, say they would be furious if the age was increased on state pensions.
Nigel blasted: "Life expectancy means the working class will suffer and they won’t benefit from the pension. “I’ve worked my entire life and paid my taxes my whole life but if I injure myself or I’m out of work tomorrow I get nothing."
Steven added: “You just don’t know what’s going to happen especially in our job.”
Both said they feared being forced to secure money later in life, or even having to go back to work in old age just to make ends meet.
Retired amateur photographer Robin Miller, 67, said he thinks the proposed raise is “outrageous”. He explained: “There’s a question for the people who do survive to it being left with nothing unless they’re on some kind of benefits.
“That’s the way the world is: ‘look after yourself because we won’t’, money is more important than people’.”
'PLAYING WITH FIRE'
While videographer Kaitlin Wraight, believes the move is more political with a disregard for those who may need it the most.
The 22-year-old added: "The NHS is in such a crisis, by the time our health deteriorates we won’t be able to work as long.
"It’s just atrocious.”
Ministers are planning to move the pension hike date forward as the population gets older and birth rates plummet.
The plans, which could come in the March budget, would mean fewer young people forced to pay the tax bill.
But Chancellor Jeremy Hunt and PM Rishi Sunak have been warned they were “playing with fire” if the huge change came before the next general election.
Despite the backlash, retired Anne Brown stressed how people pass away every day before they can claim their pension and said the hikes were "reasonable".
She said: "There are two ways to look at it: Young people are preparing to pay into it now and pensioners have already paid in for it. “People like me, in their 60s, definitely deserve it."
A rise from 67 to 68 is not due to happen until 2046, but an upcoming review of pension ages is set to say it should be brought forward.
6Retired amateur photographer Robin Miller, 67, said he thinks the proposed raise is outrageousCredit: Les Gallagher
6Anne Brown stressed people pass away every day before they can claim their pension and said the hikes were 'reasonable'Credit: Les Gallagher
6Kaitlin Wraight says the pension age plans disregard for those who may need it the mostCredit: Les Gallagher
6Steven Munro, 28, said the future is uncertain following the news on the pension hikesCredit: Les Gallagher
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Workforce / Labor
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After more than two decades as America’s best-selling beer, Bud Light has slipped into second place.
Modelo Especial, a Mexican lager, overtook Bud Light in U.S. retail dollar sales in the month ending June 3, according to Nielsen data analyzed by Bump Williams Consulting. Modelo controlled 8.4% of U.S. grocery, convenience and liquor store sales; Bud Light fell to 7.3%.
It’s a milestone in the months-long sales decline Bud Light has experienced since early April, when critics vowed to boycott the brand after it sent a commemorative can to Dylan Mulvaney, a transgender influencer. Bud Light has also faced backlash from Mulvaney’s fans, who think the brand didn’t do enough to support her.
Dave William, Bump Williams’ vice president of analytics and insights, said Bud Light has been the top-selling U.S. beer since 2001, and it could still retain that crown this year. He noted that Bud Light’s year-to-date market share of 9% is still outpacing Modelo’s, at 8%.
But Modelo appears to have the advantage, with its sales increasing by double-digit percentages every week. The launch of a new light beer, Modelo Oro, in May is also boosting awareness of the brand.
Bud Light’s U.S. sales were down 24% the week ending June 3, while Modelo Especial sales were up 12%, according to Dave Williams.
Scott Scanlon, an executive vice president at the consulting firm Circana who follows the alcohol market, said Mexican imports like Modelo and Corona have been the biggest bright spots in the otherwise stagnant U.S. beer market for years.
When Modelo first went on sale in the U.S. in the 1990s, it was primarily marketed to Hispanic drinkers, Scanlon said. But it has long since broadened its consumer base and is especially popular among younger drinkers, who like its fuller flavor.
Scanlon said Modelo is already the top seller in markets like Los Angeles and Chicago, but it could still see a lot of growth ahead on the East Coast.
“Modelo was going to become the No. 1 beer brand. It was destiny because the growth numbers we are seeing and have been seeing are astonishing,” Scanlon said. “The only question was time."
Scanlon said the pandemic accelerated Modelo's U.S. sales, since it sees more of its sales from retail stores than from bars and restaurants. And Bud Light's missteps further accelerated its rise.
Grupo Modelo __ the Mexican brewer __ is owned by Anheuser-Busch InBev, the same parent company of Bud Light. Constellation Brands, a Victor, New York-based company, has been licensed to sell Modelo in the U.S. since 2013 as part of an agreement with antitrust regulators after InBev bought Grupo Modelo.
Messages seeking comment were left Wednesday with Anheuser-Busch and Constellation Brands.
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Consumer & Retail
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"If they weren't here I just wouldn't be living life, basically. I'd still be failing at school and I'd be in such a dark place mentally."
Anya, 16, "wouldn't be coping with life" without help from a homeless charity and a place at a hostel.
But a charity said there was a potential crisis due to higher costs and a funding shortfall which could see a cut in jobs and the help on offer.
The Welsh government said it was facing a perfect storm of financial pressures.
Home life affected Anya's mental health and, after a period of sofa surfing, she was offered a place at a hostel.
Gisda, which helps people facing homelessness across Gwynedd and runs a foodbank, stepped in to get Anya her own flat.
She said: "If [they] weren't here... I wouldn't be able to deal with my family. I did sofa surf for a bit and I'd probably still be doing that really and it's not a healthy way to life is it?
"They help with bills and if I need to do anything with universal credit or British Gas. It's like a stepping stone to being fully independent and living the adult life."
"I've had a few difficulties with attendance at school because of my home environment.
"Since moving the staff in general have been really good at helping me communicate with the school and putting across my needs and being really great advocates for me."
About 9,000 people in Wales are living in temporary accommodation - the highest number on record, according to the latest official data.Â
Gisda's chief executive, Sian Tomos, said the rising cost of living was hitting the charity.
"We've got young people centres across Gwynedd that need heating and the cost has gone up significantly over the past 12 months, so it's difficult for us.
"It's our responsibility that our young people are not affected by the cost of living crisis.
"Even though we are receiving grants from the government, I don't think it's enough to support the increasing demand on services at the moment."
Cymorth Cymru, which represents homeless and housing organisations, said without a rise in the Housing Support Grant, providers may have to cut services or jobs.
Chief executive Katie Dalton said: "We know that investing in these housing support services delivers prevention in terms of health, social care and criminal justice, so it makes financial sense to invest in these services.
"If homelessness is going to be a priority we need to make sure housing grant services are there to help people out of homelessness.
Homeless charities not only lack enough money to pay their bills, but some say they could lose staff because they cannot afford to give them a pay rise.
Ms Dalton added: "We've been hearing from some staff who've worked in the sector for 20 to 30 years - who have never been here for the pay, let's face it.
"But things have got so bad that they're leaving to work in supermarkets where they're being paid higher wages, they're becoming delivery drivers because they're getting paid much more for much less stress on the job.
The Welsh government said: "Frontline housing support services are under considerable pressure and they play an important role in preventing homelessness - the Housing Support Grant has therefore been maintained at £166.76m.
"The homelessness prevention budget will increase by £15m in 2023-24, taking our investment in homelessness and housing support services to more than £207m next year."
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Nonprofit, Charities, & Fundraising
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On January 14, 2022, former crypto mogul Sam Bankman-Fried tweeted: “First, we’re launching a $2 billion venture fund, FTX Ventures. As a founder, it’s important to support other founders creating great companies. Hopefully this will allow us to do that a lot more.”
A noble goal, to be sure. But rather than raise capital for the fund from external investors, Bankman-Fried used money from third party lenders like Genesis Global Capital that had gone to Alameda Research, Bankman-Fried’s cryptocurrency trading firm, according to testimony from Caroline Ellison, former CEO of Alameda Research.
Ellison testified Tuesday as the fifth witness for the prosecution in Sam Bankman-Fried’s six-week trial. She claimed that the former FTX CEO directed her to commit fraud and money laundering crimes.
By the time Bankman-Fried posted that tweet, Alameda had already made certain venture investments, but the executive wanted to up the ante significantly. In the “summer or fall of 2021,” Bankman-Fried sent Ellison a potential bad scenario situation for FTX and Alameda, detailing a world in which the crypto market was down, Alameda’s investments plunged and the company becomes worthless. Bankman-Fried had put that reality into the 10th percentile, according to Ellison, which is still fairly risky in the trading world.
“10th percentile scenarios happen everyday,” said Ellison.
Bankman-Fried was thinking of investing another $3 billion into early stage companies and wanted to know how that would affect Alameda’s finances if the shit hit the fan. Not surprisingly, Ellison found that it would put Alameda in a riskier position than it was already in — at the time Alameda’s net asset value was negative $2.7 billion — and make it unlikely or impossible to pay off its loans if they were called all at once.
And because Alameda was operating under the assumption that it would take FTX customer funds to repay any loans, that would mean FTX would lose a significant amount of money in this scenario, as well.
Ellison testified that she shared these concerns with Bankman-Fried and played out alternative scenarios to taking out more loans for investments, such as raising more equity, investing less in ventures and selling more FTT (FTX’s crypto token). Bankman-Fried asked her to run the numbers again assuming that all of Alameda’s loans from Genesis were fixed, rather than open-term. Most of Alameda’s loans at the time were open-term, which is more risky because it means the loan can be called at any time.
“…and then you would have to repay it even if you don’t necessarily have the funds available,” said Ellison.
In a scenario where all of Alameda’s loans could be changed to fixed-term, Ellison estimated that the company was down to a 30% chance of being unable to pay off its loans in a bad market scenario.
Bankman-Fried urged her to try to change Alameda’s loans to fixed-term. Ellison was able to change some, but the majority remained open-term. She had run a scenario for that reality, as well.
If there were to be a market downturn with Alameda’s mostly open-term loan structure, and if Alameda made $3 billion in investments, Ellison found the probability of Genesis recalling its loans would be 25%. The probability that the company would be unable to make those loan payments would go from 30% to 100%.
“That means if we made this $3 billion of investments and there was bad market news leading to a significant market downturn and our loans got called, that there was no way we would be able to make the payments,” said Ellison, noting that Alameda would be unable to repay its loans even accounting for the unlimited line of credit and access to FTX customer funds.
In the end, Bankman-Fried appears to have settled on investing $2 billion into venture investments, backed by FTX rather than LPs, but the result was the same.
Ellison’s testimony and cross examination will continue on Wednesday.
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Crypto Trading & Speculation
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Joel Dietz says crypto is rotten, and he’s going to court to try to prove it. Dietz is a self-described “founding member” of Ethereum, the computer network on which the world’s second-largest cryptocurrency is housed. He didn’t pen the code, but in 2014, before Ethereum had launched, he worked as an evangelist of sorts, “showing people how it worked and why it was important,” Dietz says. He received a batch of cryptocurrency in return.In the early days, working in crypto felt like “building the future of the internet,” says Dietz. It was about transparency, egalitarianism, and decentralization (crypto shorthand for transferring control over apps and infrastructure from the few to the many.) Dietz believed that open source—the practice of making software code available for anyone to see, use, and riff upon—could usher in this new dawn. “But things have gone offtrack from the original vision,” he says. “There’s a rotting body here, and it smells.”In a state court in California, Dietz is suing former collaborator Aaron Davis for allegedly swindling him out of an ownership stake in MetaMask, an Ethereum-based crypto wallet, as part of the kind of “seedy backroom deal,” says Dietz, that has become “endemic” in crypto. Named as codefendants are Dan Finlay, with whom Davis publicly partnered on MetaMask; Consensys, the software company that owns the wallet; and Joe Lubin, Ethereum cofounder and Consensys CEO.In a statement given to WIRED, Finlay dismissed the lawsuit as “baseless.” Dietz has been “falsely marketing himself” as a founder to garner the respect of prospective investors, he said, but “has no relation to MetaMask or any of its technology.”Dietz is certainly after financial compensation. In March of 2022, Consensys was valued at $7 billion, and MetaMask is among its most successful products. But, Dietz claims, the lawsuit is a small way of drawing attention to the state of crypto, which has been blighted by a series of legal battles, many of which boil down to an abuse of power or position. US regulators have filed civil charges against the world’s largest crypto exchanges—among them Binance, Coinbase, and Gemini—which are alleged to have either misled, mistreated, or endangered crypto investors. In July, Alex Mashinsky, founder of crypto lender Celsius, was charged by the US Department of Justice with “orchestrating a scheme to defraud customers.” Earlier this month, Sam Bankman-Fried, once the golden boy of crypto, was found guilty of overseeing a multibillion-dollar fraud at his FTX exchange. In these cases, decentralization was a mirage.“The industry needs cleaning up,” Dietz says. “It’s embarrassing.”MetaMask is a crypto wallet in the form of a web browser extension. It lets users hold crypto tokens compatible with Ethereum, of which there are thousands, and interact with software that runs on the network. Over time, it became a foundational piece of crypto infrastructure, used by more than 100 million people. Dietz says he came up with the idea.In early 2015, claims Dietz, he recruited Davis to work on a browser-based crypto wallet, codenamed Vapor. Davis handled the coding with a third individual, Martin Becze, while Dietz’s role was “that of a high-level visionary, conceptual designer and assisting with securing short-term funding,” the complaint states. Becze could not be reached for comment.The lawsuit centers on the following allegations: When funding did not materialize, Davis stopped communicating with Dietz but quietly continued to work on the project with a new collaborator, Finlay. At some unknown date, the pair either sold or transferred ownership of the company, which they had by then named MetaMask, to Consensys, run by Lubin. In the period since, Davis, Finlay, and Lubin have taken steps to erase Dietz’s involvement in the project from the public record.Through the Consensys communications department, the trio declined to be interviewed for this story and did not respond to written queries. But in an interview with another outlet in late 2021, Davis intimated that he had come up with the idea for an Ethereum wallet before working with Dietz. In a blog post published in July 2022, Consensys presented its own version of MetaMask’s origin story: Davis and Finlay wanted to build a web service atop Ethereum but found no existing login technology that was sufficient—so they “worked backwards from there” to develop MetaMask.The case will come down to two questions, says Yar Chaikovsky, global head of intellectual property at law firm White & Case, which represents neither the plaintiff nor the defendants. The first: Was a partnership ever established between Dietz and Davis? The second: By what date should Dietz have realized his ownership interest in MetaMask had been taken from him, if that’s what occurred?The original Vapor collaborators did not sign a traditional contract. Dietz claims a partnership was formalized in a series of Slack messages, which he no longer has access to. Andrew Cook, who worked with Dietz at Swarm, a startup whose Palo Alto office was used by the Vapor team, says he observed the group working on the crypto wallet. “Joel completely came up with it,” he says. Cook says he sifted through LinkedIn with Dietz in early 2015 in search of developers to build Vapor, eventually landing on Davis. MetaMask was practically “a direct copy,” he claims.WIRED has seen two applications for funding in relation to Vapor, bearing the names of Dietz and Davis, submitted to the nonprofit Ethereum Foundation and the Y Combinator accelerator program in spring 2015. In a video sent to Y Combinator, the team pitched the idea to “marry the browser and the blockchain.”Dietz became aware that Davis was working on what he considered a reskinned version of Vapor as early as November 2015, when Davis presented MetaMask at a conference. But it wasn’t clear that his ownership interest would be contested, Dietz claims. Consensys operated under an unconventional hub-and-spoke structure, whereby a multitude of software projects, or spokes, were incubated by a central entity, the hub. In a very crypto way, the structure was supposed to replace top-down decision-making with a more fluid arrangement—to “create a mesh of autonomous projects and companies,” in Lubin’s words. But it was a “very confusing structure,” says Dietz, that left him with the belief he still held a stake in the wallet, as MetaMask.It wasn’t until 2021 that Dietz began to suspect his ownership interest had been denied him, the complaint states, when Consensys “threatened” a journalist at crypto media outlet Cointelegraph who had published a story that described Dietz as a cofounder of MetaMask. The journalist, Jillian Godsil, says she didn’t feel threatened, but that Consensys representatives were “quite officious” and “more aggressive than they needed to be.” Cointelegraph ultimately amended the story, but Godsil maintains that Dietz contributed to what later became MetaMask, in some way. “I would say he was part of the thinking process,” she says. “He is important in the history of crypto.”Despite what appears to be evidence of a partnership, says Chaikovsky, there is an opening for the defense to contest the idea that Dietz was unaware of wrongdoing until six years after the alleged theft. The date is relevant because it will determine when the statute of limitations kicks in. In California, disputes over breaches of contract and fiduciary duty must be lodged within four years, or else the plaintiff forfeits their right to a grievance. Dietz is effectively saying the countdown should begin in 2021, but in a court filing on November 6, the defendants described the complaint as “woefully untimely.”“This is ultimately going to be a dispute about when the clock starts ticking,” says Chaikovsky. “The statute of limitations is there to ensure parties don’t wait until something succeeds to file suit. You file a suit when you have a problem, not when you have a valuable problem.”For now, the case is stuck in a holding pattern. The defendants have moved to have 13 of the 15 claims filed by Dietz dismissed on the grounds that the California court lacks jurisdiction. A hearing on December 13 will determine whether the motion is valid, before the rest of the case can proceed.But Dietz is not the only person suing Consensys at present. A second lawsuit in New York shares the same overarching theme: the right to ownership. In October, a group of 27 former Consensys employees filed a case alleging that Lubin and others had deliberately devalued their equity in the company by stripping its most valuable assets (including MetaMask) and transferring them to a new entity, Consensys Software Inc.According to the suit, the plaintiffs joined Consensys in its early stages, between 2015 and 2016, before it began to generate significant revenue. They were convinced to gamble on an uncertain future at the startup, the complaint states, by promises of equity made by Lubin.But the same unconventional corporate structure that confused Dietz was manipulated, the former employees claim, to cut them out of the picture. “We allege that Joe Lubin created different corporate forms in a way designed to maximize his own personal benefit and escape from what he owed our clients,” says Justin Nelson, partner at law firm Susman Godfrey and counsel to the plaintiffs. “The hub-and-spoke system was more than a metaphor. This was supposed to be a new way of thinking that would bring the world together. But when it came down to it, as we detail in the complaint, he stripped the assets.”The same plaintiffs are pursuing separate legal action in Switzerland, where the original entity, Consensys AG, was registered, in a bid to have the transfer of MetaMask and other assets to Consensys Software Inc. reversed.In an email statement, Elo Gimenez, global PR director for Consensys Software Inc., said the company is the target of “a series of baseless legal actions by a small group of disgruntled minority shareholders” of the separate entity. “Consensys Software will vigorously defend itself against this meritless lawsuit,” she said. In a separate statement, Diana Richter, head of marketing at Consensys AG, said the organization “refutes the allegations underlying the legal actions and looks forward to prevailing in Switzerland, the United States, and any other jurisdiction where these baseless accusations are made.”Dietz has not given up on crypto, but he believes the idea that everything could be made better with a “pure technology approach” has been categorically disproven. “The model—technology without law and control—attracts a lot of bad actors,” he says.There is no guarantee that either Dietz or the former Consensys staff will prevail in their respective lawsuits. But regardless of the outcome, the accusations leveled via the cases gesture to themes that have defined the latest chapter in crypto’s short history: chicanery and profiteering, concealed by a veneer of decentralization.Across the industry, says Dietz, there is a habit of “selling one thing publicly and doing something else in private.” In his naivety, it wasn’t until too late, he says, that he realized “the truth could be so far from the rhetoric.”
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Crypto Trading & Speculation
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Keir Starmer Bids To Shift Labour Focus To U.K. With ‘Big Build’ Pledge
Keir Starmer vowed to “kick-start a big build” across the UK, setting out his Labour Party’s economic priorities as a counterpoint to the government’s King’s Speech next week after weeks of media scrutiny over internal tensions triggered by the Israel-Hamas conflict.
(Bloomberg) -- Keir Starmer vowed to “kick-start a big build” across the UK, setting out his Labour Party’s economic priorities as a counterpoint to the government’s King’s Speech next week after weeks of media scrutiny over internal tensions triggered by the Israel-Hamas conflict.
Starmer said if Labour were in power, he would prioritize legislation to boost skills and investment in industry and infrastructure. The King’s Speech — in which the government sets out its priorities for the next year through a series of bills it plans to push through Parliament — will take place on Tuesday.
“We have to provide the businesses, communities and people of this nation, with the conditions to succeed. A fundamental deal, that we serve the country, while you drive it forward,” Starmer said Friday in Darlington, northeast England.
Sunak Says UK Election Probably Next Year, Making 2025 Unlikely
It’s little over three weeks since Starmer left his party conference in Liverpool, having delivered a similar message and with widespread expectations Labour was comfortably on course to win back power at a general election expected in 2024. The opposition party still leads Prime Minister Rishi Sunak’s Conservatives by about 20 points in national polls, but party splits over the fighting in Gaza have posed a significant challenge to his leadership.
Despite calls from senior Labour members including London mayor Sadiq Khan for a cease-fire between Israel and Hamas, Starmer reiterated Friday he sees a humanitarian pause as a quicker and more practical way to alleviate suffering.
“To say to a sovereign country when 200 of its civilians are being held hostage, they must give up their right to self defense, is not for me the correct position,” he said. He also said humanitarian aid needs to reach Gaza faster and called on Western nations to increase the pressure for that to happen.
Read more: Starmer Risks Hard-Won Labour Unity to Show He Can Lead UK
Starmer’s speech, though, appeared to be a clear attempt to get his party re-focused on winning back power. His call for an economic renewal was also a pitch to the thousands of voters in northern England who switched allegiance from Labour to the Tories in 2019. Citing repeated broken promises over improving the key A1 road through the region, he accused Sunak’s party of overseeing a “highway to British decline.”
©2023 Bloomberg L.P.
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United Kingdom Business & Economics
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- Jury deliberations have started in the criminal fraud trial of Sam Bankman-Fried.
- The 12 jurors will decide if the FTX founder is guilty of seven criminal counts, including wire fraud, securities fraud and money laundering, related to the implosion of his crypto empire.
- Bankman-Fried, who has pleaded not guilty to all counts, faces more than 100 years in prison if convicted.
Twelve jurors in a lower Manhattan courtroom have begun to deliberate the fate of FTX founder Sam Bankman-Fried following a month of testimony from nearly 20 witnesses.
The case was handed to the jury around 3:15 p.m. on Thursday, after U.S. District Judge Lewis Kaplan finished reading aloud 60 pages worth of instructions. A verdict could come as early as Thursday afternoon, and Judge Kaplan previously ordered the jury to stay until 8:15 p.m, offering free pizza and Uber rides home.
Bankman-Fried, who started digital asset exchange FTX in 2019, and sister hedge fund Alameda Research two years earlier, is charged with seven counts, including wire fraud, securities fraud and money laundering, related to the implosion of his crypto empire late last year.
He faces more than 100 years in prison if convicted. The 31-year-old graduate of Massachusetts Institute of Technology and son of two Stanford legal scholars has pleaded not guilty to all charges.
In order for Bankman-Fried to be found guilty, the jury must unanimously decide beyond a reasonable doubt that the entrepreneur, once hailed as a crypto genius, intended to defraud investors and customers.
The trial, initially anticipated to run until the Thanksgiving holiday, has moved swiftly. The government curtailed its witness list, and ultimately didn't bring a rebuttal case after the defense rested. The defense called only three witnesses to the stand, with the bulk of its argument relying on the sworn testimony of the defendant.
Both sides have also moved more quickly than expected on direct and cross-examinations.
Judge Kaplan has encouraged the expedited timeline, holding jurors until 6:30 p.m. on Wednesday in order to finish closing arguments. It's unclear how long the jury will deliberate, but the judge — while emphasizing that he's not rushing a decision — said he's willing to stay until 8:15 p.m. Thursday and told jurors the government would cover dinner and likely pay for their ride home.
Mark Cohen, Bankman-Fried's defense attorney, made his final plea for his client on Wednesday, arguing that the defendant should be found not guilty on all counts, in part because the FTX founder had acted in good faith and without criminal intent, believing everything would work out.
"Every movie needs a villain," Cohen said of the prosecution's case against Bankman-Fried, adding that the government had incorrectly portrayed him as a "monster," a "bad guy," and a "criminal mastermind."
Cohen claimed the case against his client was built on the false premise that FTX was a fraudulent enterprise established to intentionally steal customer funds from its "very earliest days."
While FTX's lack of a risk management system or chief risk officer reflected poor system controls, bad business decisions aren't crimes, Cohen said.
Cohen told the jury that if any members of Bankman-Fried's inner circle truly thought something nefarious was happening, they had options, including resigning, leaving the Bahamas or "blowing the whistle." None of them did, he said.
The defense's chief witness was Bankman-Fried himself, and most of his testimony amounted to a distraction, Renato Mariotti, a former prosecutor in the U.S. Justice Department's Securities and Commodities Fraud Section, told CNBC earlier this week. As an example, he cited Bankman-Fried's blaming of Caroline Ellison, his ex-girlfriend and former head of Alameda, for failing to properly hedge.
His testimony was "meant to reduce his role, like his frequent reminders that others were involved, that he had a lot on his plate, that he was young, or that he wasn't a programmer," said Mariotti, who's now a trial partner in Chicago with Bryan Cave Leighton Paisner.
During the government's closing arguments, prosecutors reminded jurors of the mountain of evidence key witnesses had provided.
"The defendant schemed and lied to get money, which he spent," Assistant U.S. Attorney Nicolas Roos told the court.
Roos said there's "no serious dispute" that $10 billion in customer money that was sitting in FTX's crypto exchange went missing, with some of it going to pay for real estate, investments, loan repayments and political donations.
"A pyramid of deceit was built by the defendant," Roos said. "That ultimately collapsed."
Critical to the failure of FTX was the use of customer funds to cover losses in Alameda's books following the plunge in crypto prices last year. Roos said Bankman-Fried is the one who gave special privileges to Alameda, allowing the hedge fund to siphon customer money. He knew it was wrong, Roos said, which is why he kept it secretive.
Roos brought up testimony from three firsthand witnesses who said that they'd spoken with Bankman-Fried about the chief issue — a giant hole in the balance sheet.
Bankman-Fried "had the arrogance to think he could get away with it," Roos said.
Bankman-Fried knew Alameda had a negative net asset value of $2.7 billion, Roos said, but wanted to make another $3 billion in venture investments. The only way to do that was with FTX customer funds, he said.
Additionally, Roos told the jury, client money went to $100 million in real estate expenses, including a $30 million penthouse in the Bahamas and $16 million for his parents' home.
In referencing the Super Bowl picture with Katy Perry and others, Roos called Bankman-Fried a "celebrity chaser."
In closing, the prosecution reminded the court that Bankman-Fried directed losses to be shifted to Alameda and that FTX's insurance fund had made up numbers. Add it all up, Roos said, and it debunks the defense's main argument that Bankman-Fried acted in good faith and believed everything would work out.
"This was a fraud that occurred on a massive scale," he said.
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Crypto Trading & Speculation
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A top US Treasury official is heading to Hong Kong as the White House continues its quest to ease tensions with Beijing and avoid a destabilizing crisis.
Joining a growing list of US officials visiting the region, Assistant US Treasury Secretary Brent Neiman is traveling to Hong Kong on Wednesday as part of an effort to “deepen ties between the world’s two largest economies,” a Treasury official tells CNN.
During the trip, Neiman — the highest-ranking Treasury official to visit Hong Kong since 2019 — plans to meet with government officials, private sector economists and executives from the financial and legal sectors. He is also set to meet with US companies that are members of the American Chamber of Commerce in Hong Kong as well as with students.
According to the US official, Neiman will discuss the “financial ties behind the US-China relationship and the importance of communicating on financial and regulatory matters as well as macroeconomic and financial developments in Hong Kong and China.”
Notably, the Treasury official also plans to address hot-button issues, including human rights, a thorny subject given Beijing’s history of human rights abuses and its complicated relationship with Hong Kong.
“Neiman will stress the United States’ focus on securing and advancing our economic and national security interests, along with those of our allies, and protecting human rights,” the Treasury official told CNN.
Hong Kong is a semi-autonomous Chinese territory that is also the country’s international financial center.
The visit comes at a delicate time. China is experiencing a slump that is casting a shadow over the world economy. Beijing is struggling to turn the page on high youth unemployment, tepid export demand and a crisis-hit property sector.
“This could be dangerous for the global economy because China is such an important contributor to world growth,” said Ilaria Mazzocco, senior fellow in Chinese business and economics at the Center for Strategic & International Studies in Washington.
iPhone ban, advanced tech battle
US-China relations hit a low early this year after President Joe Biden ordered the shootdown of a Chinese spy balloon. That incident further complicated what is already the most important and complicated bilateral relationship on the planet.
Despite criticism from some Republicans, the administration has tried to cool temperatures with Beijing by sending a flurry of officials to mainland China in the past few months, including Secretary of State Antony Blinken, climate envoy John Kerry, Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo.
Even after the visits by US officials, Washington and Beijing have continued to throw punches at each other’s economies. Following Yellen’s visit last month, the Biden administration detailed new rules limiting US investments in advanced technology industries in China.
Days after Raimondo’s visit in August, Beijing reportedly banned the use of iPhones by government officials and state-backed firms.
The apparent iPhone ban drove down shares of Apple, America’s most valuable company, raising the difficult question: If Apple, which has deep ties to China, can’t succeed there, who can?
During Raimondo’s trip, China’s Huawei unveiled a new smartphone powered by an advanced chip. The rollout set off alarm bells in the West because the smartphone relies on US technology that American officials had tried to block China from accessing.
Treasury declined to comment on whether Neiman will raise either the iPhone ban or the Huawei smartphone issue with officials during his trip to Hong Kong.
“There are some big issues that are just not going to get resolved anytime soon,” said Mazzocco, the CSIC expert.
‘Avoiding shocks to the system’
Experts say the recent trips by Yellen and Raimondo represented accomplishments, given that the bar for success was set quite low.
“This is more about creating channels of communication and a mutual understanding to avoid crises and unpredictability. It’s about avoiding shocks to the system,” said Mazzocco. “We hit a low earlier this year in US-China relations. But I wouldn’t say it was the bottom. You could always go lower. And there is always a risk of war implicit in any decline in US-China relations.”
Indeed, during a press conference in Beijing in July, Yellen said US officials’ talks with Chinese officials are part of a “broader concerted effort to stabilize the relationship, reduce the risk of misunderstanding.”
Clayton Allen, director for the United States at the Eurasia Group, expects US-China relations will continue to decline. However, he is encouraged that policymakers have been able to manage that decline.
“If US-China relations dropped off a cliff and everything broke off, it would shift to a permanent crisis response,” Allen said. “That would create a situation where everything is demonstrably worse than it is now.”
Nikki Haley: China is the ‘enemy’
Still, some China hawks argue the Biden administration is taking too gentle of an approach toward China.
“China has been practically preparing for war with us for years. Yes, I view China as an enemy,” Republican presidential candidate Nikki Haley told CNN’s Jake Tapper over the weekend. “They keep sending different cabinet officials over, Jake, and it’s embarrassing.”
In response to Haley’s criticism, Deputy Treasury Secretary Wally Adeyemo said it’s “important” for US officials to engage with China because it has the second-biggest economy in the world.
“We’re looking forward to working with China when that is America’s national interest, but also holding them accountable when they take actions that hurt our economy,” Adeyemo told CNN’s Poppy Harlow on Monday.
Andrew King, a venture capitalist and executive director of Future Union, a new bipartisan group that is calling for the private sector to pick democracy over autocracy, said the focus on cabinet officials is misplaced.
“The real issue is the vacillating approach of the American private sector and that of our allies,” said King. “By continuing to invest in China, the private sector is bankrolling a country that poses an existential threat to our system of democratic capitalism.”
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Asia Business & Economics
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Downing Street is reportedly holding talks about scrapping inheritance tax (IHT) as part of an offer to voters in a bid to win the next general election.
No 10 is discussing whether to make abolishing the levy a key commitment in its manifesto to try to shore up votes in “blue wall” seats, according to the Times.
Supporters argue the policy could be a “gamechanger” in the south of England, where the Conservatives are defending constituencies vulnerable to gains from opposition parties, according to the paper.
It said abolishing IHT was being considered as a manifesto pledge, rather than a policy to be implemented next year.
It comes ahead of byelections in Somerset and Frome, Selby and Uxbridge on Thursday.
A source familiar with the discussions told the publication: “It’s about being an aspirational country.
“You work hard, play hard and pass on your wealth. It’s a live discussion. Even though most people don’t pay inheritance tax it polls incredibly well. It would be a totemic offer.”
The Conservative party continues to trail Labour in the polls amid the cost of living crisis.
The wider economic challenges facing the chancellor and prime minister were also illustrated by official figures showing the UK economy contracted in May.
Rishi Sunak made halving inflation by the end of the year one of the five key ambitions for his leadership, and the chancellor, Jeremy Hunt, has signalled this target will be prioritised over tax cuts.
The rate of IHT is currently 40% for estates worth more than £325,000, which is charged on the portion that is above the threshold. But estates of spouses and civil partners can pass on up to £1m without any inheritance tax liability.
Some have argued abolishing IHT during a cost of living crisis should not be a government priority, while experts have suggested an overhaul of IHT would be the more sensible option.
Paul Johnson, the director of the Institute for Fiscal Studies IFS has in the past called for a reform of IHT, tweeting: “It is genuinely unfair. The very wealthy pay an average rate half or less (than) that paid by the moderately wealthy. If all you leave is the family house it’s hard to avoid. If you have millions it is absurdly easy to avoid.”
Johnson told Sky News that it was “not terribly fair the way it works at the moment” and was of “benefit to people much better off than the average”.
“There is a serious criticism of inheritance tax, which is it really doesn’t work very well for the seriously wealthy,” he said.
“The government’s own Office of Tax Simplification a few years ago put out a report showing that the effective rate of inheritance tax on estates of more than £10m was only half the effective rate on estates of £2m. The reason for that is if you’ve got lots of money outside of the family home it’s really not very hard at all to avoid significant amounts of inheritance tax. If, like most of us, most of your wealth is tied up in the family home then it’s really very difficult to avoid.”
This latest discussion of IHT comes after a recent campaign by more than 50 Tory MPs and the Telegraphcalled for it to be abolished.
In an article for the paper, the former chancellor, Nadhim Zahawi, who was sacked as Tory party chair over his own tax affairs, said the tax was “morally wrong” and a “spectre that haunts us alongside death”.
He added that abolishing IHT before the next general election would show that the government “backs families in their desire to pass on their hard-earned savings to the next generation”.
A Treasury spokesperson said: “The vast majority of estates do not pay inheritance tax - more than 93% of estates are forecast to have zero inheritance tax liability in the coming years – however, the tax raises more than £7bn a year to help fund public services millions of us rely on daily.”
They said they would not speculate on tax changes “outside of a fiscal event” but added that all taxes were kept “under review”.
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United Kingdom Business & Economics
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SACRAMENTO, Calif. -- It was a report two years in the making — one that details how California, a state that never officially sanctioned slavery, can confront decades of policies that have kept Black residents from living in the neighborhoods they choose, being treated fairly at doctor's visits and building generational wealth.
California's reparations task force completed its work Thursday and turned more than 100 recommendations over to the Legislature, the first work of its kind in the U.S. The nearly 1,100-page document recommends the state formally apologize and suggests how to calculate monetary reparations.
Here's what the task force examined:
HOUSING DISCRIMINATION
The report recounts California policies that have kept Black families from retaining property and living in certain neighborhoods. The effects of redlining, which led to Black families being denied home loans; and eminent domain, where residents' property was seized by the government, still linger, the report states.
The panel recommended returning property unjustly seized from Black residents. It also urged lawmakers to offer property tax relief to African American homeowners living in historically redlined neighborhoods.
OVERPOLICING AND MASS INCARCERATION
The task force condemned policies and practices that have led to Black Californians being disproportionally stopped by police, killed by law enforcement or imprisoned.
Recommendations include ending the death penalty, banning cash bail, requiring anti-bias training for police officers and funding education for more African American prospective lawyers. The panel also called on lawmakers to bar searches by law enforcement based on a person's consent alone.
HEALTH HARMS
The committee urged lawmakers to address disparities in maternal mortality and treatment for substance abuse. Members also called for lawmakers to set aside money to research rising suicide rates among African American youth.
Another suggestion is to fund wellness centers in historically Black neighborhoods to address mental health issues and refer patients for psychiatric or medical care.
PAYMENTS
The recommendations include paying Black Californians who lived in the state while certain discriminatory policies were in effect. The task force voted to limit eligibility to people descended from free or enslaved Black people living in the United States by the end of the 19th century. The panel stopped short of endorsing a fixed dollar amount for individuals. But the members recommended calculations from economists projecting the state is responsible for more than $500 billion for overpolicing, mass incarceration and housing discrimination.
AGENCY
The task force recommended creating an agency to implement and oversee reparations programs and help people research their family history to find out if they may be eligible for compensation.
NEXT STEPS
Any policy changes must come through legislation signed by the governor. State Sen. Steven Bradford and Assemblymember Reggie Jones-Sawyer, both Los Angeles-area Democrats on the task force, have both said they plan to introduce legislation. Bradford has previously cautioned that it would be difficult to get large cash payments approved.
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Sophie Austin is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues. Follow Austin on Twitter: @sophieadanna.
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Real Estate & Housing
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A new online shopping platform linked to one of China’s top retailers has quickly become the most downloaded app in the United States, surpassing Amazon and Walmart. Now it’s looking to capitalize from an appearance on America’s biggest stage.
Temu, a Boston-based online retailer that shares the same owner as Chinese social commerce giant Pinduoduo, made its Super Bowl debut on Sunday.
Temu, which runs an online superstore for virtually everything — from home goods to apparel to electronics — unveiled a commercial during the game that encouraged consumers to “shop like a billionaire.”
The pitch? You don’t have to be one.
“Through the largest stage possible, we want to share with our consumers that they can shop with a sense of freedom because of the price we offer,” a Temu spokesperson told CNN in a statement.
The 30-second spot shows the company’s proposition to users: Feel like you’re splurging by buying lots of stuff cheaply. A woman’s swimsuit on Temu costs just $6.50, while a pair of wireless earphones is priced at $8.50. An eyebrow trimmer costs 90 cents.
These surprisingly low prices — by Western standards, at least — have drawn comparisons to Shein, the Chinese fast fashion upstart that also offers a wide selection of inexpensive clothing and home goods, and has made significant inroads into markets including the United States.
Shein is considered one of Temu’s competitors, along with US-based discount retailer Wish and Alibaba’s AliExpress, according to Coresight Research.
Climbing the charts
Temu, pronounced “tee-moo,” was launched last year by PDD, its US-listed parent company formerly known as Pinduoduo. The company officially changed its name just this month.
PDD’s subsidiary Pinduoduo is one of China’s most popular e-commerce platforms with approximately 900 million users. It made its name with a group-buying business model, allowing people to save money by enlisting friends to buy the same item in bulk.
On its website, Temu says it uses its parent company’s “vast and deep network … built over the years to offer a wide range of affordable quality products.”
Since its rollout in September, the application has been downloaded 24 million times, racking up more than 11 million monthly active users, according to Sensor Tower.
In the fourth quarter of last year, US app installations for Temu exceeded those for Amazon (AMZN), Walmart (WMT) and Target (TGT), according to Abe Yousef, a senior insights analyst at the analytics firm Sensor Tower.
“Temu soared to the top of both US app store charts in November, where the app still holds the top position now,” he told CNN, referring to iOS and Android mobile app stores.
Yousef said the company had been particularly successful at acquiring new users by offering extremely low prices and in-app flash deals, such as 89% off certain items.
The firm is already eyeing new territory. This month, Temu said on Twitter that it plans to expand to Canada.
‘Too cheap’?
Michael Felice, an associate partner at management consulting firm Kearney, said Temu stood out simply by selling products without high markups.
“Temu might be exposing a white space in the market wherein brands have been producing at extreme low cost, and along the value chain there’s been so much bloated cost passed on for margin,” he told CNN.
“That said, American consumers might not even be ready to accept some of these price points … There’s always the question, ‘is it too cheap to be good?’”
Deborah Weinswig, CEO of Coresight Research, has cautioned that it may be too early to tell whether Temu will be able to maintain those extremely low prices, free shipping and other perks.
“Temu aims to continue to experiment in marketing and offerings, which is possible thanks to its resource-rich parent company,” she wrote in a report.
Its launch, she said, “comes at an opportune moment, as consumers search for value amid still-elevated inflation and a degree of economic uncertainty.”
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Consumer & Retail
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Flair Writing Industries Shares List At 65% Premium Over IPO Price
Flair Writing Industries shares listed at Rs 501 apiece on the National Stock Exchange, a premium of 64.80% over the IPO price.
Shares of Flair Writing Industries Ltd. listed at Rs 501 apiece on the National Stock Exchange, a premium of 64.80% over the IPO price of Rs 304 apiece.
On the Bombay Stock Exchange, the stock debuted at Rs 503, a 65.46% premium.
Flair Writing Industries was subscribed 46.68 times on the last day of its IPO. The bids were led by institutional investors (115.60 times), non-institutional investors (33.37 times), and retail investors (13.01 times).
The IPO of Flair Writing is a combination of a fresh issue and an offer for sale. The fresh issue comprises approximately 96.1 lakh shares in the upper price band of Rs 304 for Rs 292 crore. The OFS portion of the IPO comprises the sale of 99 lakh shares at the upper price band of Rs 304 for Rs 301 crore.
Flair Writing Industries has raised Rs 178 crore from anchor investors ahead of its initial public offering.
The penmaker allotted 58,51,972 shares at Rs 304 apiece to 23 anchor investors including HDFC Mutual Fund, Kotak Mahindra Trustee, Aditya Birla Sun Life Trustee, and Tata Mutual Fund, among others.
Business Model
Flair Writing is one of the top three players in the writing and creative instrument industry with a market share of overall 9%, according to CRISIL. The penmaker reported a revenue of Rs. 915.6 crore in the financial year 2023.
Flair Writing also have the fastest growth in revenue compared to others, with a CAGR of approximately 14% in the 2017-2023 in contrast to 5.5% CAGR witnessed in the overall industry.
During the three-month period ended June 30, 2023, Flair Writing sold 34.43 crore units of pens, of which 27.92 crore units or 81.09% was sold domestically, and 6.51 crore units or 18.91% was exported, and in FY2023, we sold 130.4 crore units of pens, of which 97.53 crore units or 74.82% was sold domestically, and 32.83 crore units or 25.18% was exported.
The flagship Flair brand was launched in 1976 with the involvement of certain of our promoters and with a focus on innovative designs and quality writing instruments. Since its launch, the penmaker has managed to become a key brand in the industry and aims to build on this reputation by introducing new range of products.
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Stocks Trading & Speculation
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NEW YORK, Nov 10 (Reuters) - Industrial and Commercial Bank of China's hack left its U.S. unit temporarily owing Bank of New York Mellon $9 billion as a result of unsettled trades, prompting the parent to inject capital into the unit to settle the trades, sources familiar with the matter said.
BNY has since been paid back, the sources said.
The attack, confirmed by ICBC on Thursday, is the latest in a string of ransom demands by hackers this year. ICBC Financial Services, the bank's U.S. unit, said on Thursday it was investigating the attack that disrupted some of its systems, and making progress toward recovering from it.
ICBC’s representatives told market participants on a call organized by industry group the Securities Industry and Financial Markets Association (SIFMA) earlier on Friday that it has hired a third party to make sure its systems are safe, sources said.
ICBC did not respond to requests for comment.
Reporting by Paritosh Bansal; editing by Megan Davies
Our Standards: The Thomson Reuters Trust Principles.
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Banking & Finance
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Summer Wardrobe Makeover Will Pinch Even As Cotton Prices Ease
The softening of cotton prices comes as relief for apparel makers grappling with weak demand and high inflation impacting margins.
T-shirts to jeans makers are revisiting pricing for their upcoming summer collection as cotton prices, which surged to historic highs last spring, have eased.
Cotton prices surged over the last year past Rs 1 lakh per candy (356 kilograms), propelled by bad harvests in key states like Gujarat, Maharashtra, Telangana, Karnataka and Madhya Pradesh, and the ensuing demand-supply gap. But the cost of input for the apparel industry has fallen 40% since its peak to about Rs 60,000-65,000 per candy, according to South India Spinners Association. However, the prices remain higher than the pre-pandemic rates of Rs 42,000-45,000.
Still, softer prices bring relief for apparel companies that spent the last year grappling with higher costs and figuring how much of it could be passed on to consumers to protect margins. Now, retailers are looking to pass on the benefit. Lower prices, however, won't show up on merchandise tags in stores until late summer this year.
"The winter stocks did not get the benefit of any lower yarn prices as purchases are booked at least two to three months in advance," said Anant Agarwal, chief financial officer, V-Mart Retail Ltd., in a post-earnings call.
"...There may be marginal relief available in summer 2023, but as is the practice, it will be passed on to the customers in entirety as we would want to remain very competitive in the value retail pricing segment," he said, adding that yarn prices have come down from their peak by 30% since September but they are still 30 to 40% higher than the pre-Covid level.
Deepak Bansal, managing director, Cantabil Retail India Ltd., also said that their upcoming summer collections starting May will have lower price tags.
Some companies, however, will decide over the coming weeks whether they can continue to charge more for their T-shirts, denim jeans and underwear allowing them to widen margins, or to pull back and give consumers a break.
The pressure is particularly acute for Page Industries Ltd., the maker of Jockey underwear in India, as the fabric can account for as much as 60% of the cost of a garment. While cotton prices have eased, the company is not sure for how long with that last given declining cotton productivity and weak global demand.
India's cotton production for the season (October 2022- September 2023) is estimated at 365.4 lakh bales (each of 170 kg raw cotton), according to Cotton Association of India. That's nine lakh fewer bales than the estimate at the beginning of the season in October last year.
State-wise, the CAI has reduced its Maharashtra cotton crop estimate by 2.5 lakh bales, Telangana by 3 lakh bales, Andhra Pradesh by 1.5 lakh bales and Madhya Pradesh and Karnataka by 1 lakh bales each.
"We are not looking at any immediate price interventions as of now," said V S Ganesh, its managing director, during a post-earnings call. "We can be more conservative on that [pricing intervention] only if the trend continues. We are just watching how the input costs are going to move."
Hopeful On Margins
Rising input costs had dented margins. Clothing retailers— including Shoppers Stop Ltd., Aditya Birla Fashion and Retail Ltd., Avenue Supermarts Ltd., V-Mart Retail Ltd., Arvind Fashions Ltd., and TCNS Clothing Company Ltd.— said they are counting on easing costs to help pad margins starting next year.
Value retailers V-Mart Retail and the Aditya Birla Fashion and Retail Ltd-run Pantaloons, which cater to consumers at the bottom of the pyramid, have been the worst hit by inflationary woes and subdued demand.
Page Industries expects the inventory that the company had bought at a higher price should start flowing in from the fourth quarter. "And we should then be able to see the benefits of that flowing into our system," according to Ganesh.
According to Shailesh Chaturvedi, managing director and chief executive of Arvind Fashions, some softening, not a drastic fall, in prices is good for the company given the lead times on its spring/summer collections.
While the cotton prices have come down to Rs 65,000 from the peak of Rs 1 lakh, the reduction in input costs will show up in margins and retail prices for deliveries from July onwards, he said.
Consumers, too, are getting pickier about spending as prices soared after the Covid-19 broke out. But they didn't stop buying cotton as companies feared.
According to Anant Daga, Managing Director of TCNS Clothing, which owns ethnic brands like W and Aurelia, the company failed to gauge the consumer demand.
"When we were designing our W range, the fabric prices were [at an] all-time high. So, what we thought was consumers might be looking at a slightly lower price option and they might be okay with fabrics like polyester and ornamentation like data prints and all," he said.
But that was a "wrong business call in hindsight, which has taken a toll on brand's performance this season", he said. "If you see our new collection, you'll see that you have much more cottons, natural fabric."
Most of the benefit from lower raw material prices will go to the consumer, he said. "It will reflect on the product value."
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Consumer & Retail
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Pensioners Generate 1.15 Crore Digital Life Certificates: Centre
Union Minister of State for Personnel, Public Grievances and Pensions Jitendra Singh complimented the Department of Pension and Pensioners Welfare for the successful conclusion of the nationwide digital life certificates (DLCs) campaign 2.0 from Nov. 1 to 30, it said.
As many as 1.15 crore digital life certificates were generated by pensioners across the country during the recently concluded special campaign, an official statement issued on Friday said.
Union Minister of State for Personnel, Public Grievances and Pensions Jitendra Singh complimented the Department of Pension and Pensioners Welfare for the successful conclusion of the nationwide digital life certificates (DLCs) campaign 2.0 from Nov. 1 to 30, it said.
He said that the campaign was conducted to implement the vision of Prime Minister Narendra Modi for the digital empowerment of Pensioners, according to the statement issued by the Personnel Ministry.
Singh said the government was deeply committed to improving pensioners' welfare and the campaign was an important step for the ease of living of pensioners.
During the nationwide campaign, which was held in 100 cities at 597 locations, 1.15 crore DLCs were generated, including 38.47 lakh for central government pensioners, 16.15 lakh for state government pensioners and 50.91 lakh for EPFO pensioners, it said.
"DLC submission is an ongoing activity as more than 35 lakh defence pensioners can submit life certificates in the month of their retirement. By March 2024, it is expected that total DLC submission would cross the 50 lakh mark," it said.
An analysis of the age-wise generation of DLCs reveals that more than 24,000 pensioners above the age of 90 years used digital mode, the statement said.
The leading states for DLC generation are Maharashtra, Uttar Pradesh, and West Bengal, having generated 5.07 lakh, 4.55 lakh and 2.65 lakh DLCs, it said.
The leading banks for digital life certificate generation are the State Bank of India and the Punjab National Bank, with 7.68 and 2.38 DLCs respectively.
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Banking & Finance
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Charlie Moss is your typical GAA (Gaelic Athletic Association) lifer - an avid fan, regular match-goer and volunteer, who used to be the chairman at Aghyaran St Davog's club near Castlederg, County Tyrone.
But Charlie has a problem - the GAA's move to an online-centric ticket system is putting him off going to games.
And having to buy online in advance, he said, is a nightmare.
He has particular issues in his rural area, with poor telephone signal meaning that when his bank sends him a text message to approve an online purchase, as a security measure, he sometimes doesn't receive it.
Slow internet, meanwhile, means that the ticket website often times out if the purchase is not completed in time.
"I'm fairly savvy with computers but just thinking of those who aren't, they would have no hope of getting a ticket," he said.
"There should still be a facility for the likes of pensioners to get their tickets rather than going online.
"The fact is some people will just say, 'I won't bother'."
According to Ulster GAA, a new policy of online ticketing had a "soft launch" across the island during the Covid pandemic and was fully implemented last season across its fixtures.
The system is not entirely online. Tickets can still be bought at certain Supervalu or Centra stores. An Ulster GAA spokesperson said tickets for Ulster senior football championship fixtures continue to be available via GAA clubs and county boards.
They added that the rationale for going cashless is to reduce the "burden on volunteers in managing cash, less financial risk at our stadia and improved matchday event planning".
And the move wasn't out of nowhere.
In the organisation's strategic plan for 2021-23, Ulster GAA stated its goal was to become a "cashless body" and that it would "continue working on ticketing via online and securing additional outlets/other opportunities to reduce reliance on cash".
The policy is consistent with the wider GAA organisation's move away from cash.
An online ticketing model progressed during the pandemic, in a number of sports, while many Premier League clubs in England have switched to digital tickets in a bid to stamp out ticket touting - as well as for environmental reasons - though some still rely on paper tickets.
The Northern Ireland Football League (NIFL) and Irish Rugby Football Union told BBC News NI that it is up to individual clubs within their respective sports to determine ticketing policies.
Clash over cash
But the shift in the GAA has been divisive.
When Taoiseach (Irish PM) Leo Varadkar was asked about it in the Dáil (lower house of Irish Parliament), he replied that while he was "not fully across" the issue, there should be "some provision for cash".
These comments brought a strong response from Offaly county chairman, and two-time All Ireland-winning hurler, Michael Duignan who challenged Mr Varadkar in the Irish Daily Mail: "Was he ever on a gate at a GAA match? Was he ever collecting the money?"
Mr Duignan said that while he had sympathy for older people, the ticketing policy "from an administrative point of view⦠has been transformative for ourselves in the county".
But, a campaign group is urging the GAA to ensure there's an option to purchase tickets with cash at fixtures.
Nodlaig Ni Bhrollaigh, a spokesperson for the campaign, said the policy was hurting match-goers who are uncomfortable with technology.
"The fear is that if we move to a cashless society too fast, we will leave people behind," Ms Ni Bhrollaigh said.
"The thought, for me and many in the GAA community, of leaving some of the most marginalised people behind really goes against the values of the GAA and its ethos."
'This is not progress'
Ronan McSherry, a GAA fan from Stewartstown in County Tyrone, has been relying on his daughter to get his tickets as he struggles to navigate the online sales system.
"I get my daughter to do it online during the day, because she might be heading out for a few hours with her mates," he said
"So the issue of ordering two or four hours before the match is that if it's bucketing or my own club is not playing, I might decide not to go and I'm stuck with the ticket or if I decide to go at the last minute. It takes the options out of it."
Mr McSherry said while he was annoyed at online ticketing, he felt fortunate to have his daughter for help.
He said: "I'm hearing it is keeping older people away because not everyone has a person who's good at that stuff to do it.
"This is not progress. Progress includes everybody.
"How simple is it to just have a gate where you can walk in and pay?"
Age charity writes to GAA
Age NI, a charity that advocates for elderly people, has written to Ulster GAA to urge them to provide cash ticketing at matches.
Dr Paschal McKeown told BBC News NI she fears the system "may exclude and have an adverse impact on older people, particularly those who are over 75".
Dr McKeown said it was important to ensure older people are not "left behind" in the move to cashless transactions, which could create a "digital divide".
She added: "We are urging the GAA to consider all of this and we have written to ask them to re-introduce cash payment as an alternative payment option."
An Ulster GAA spokesperson said: "Ulster GAA will always have provision for matchday personnel to assist patrons who experience difficulties with access to online purchasing."
The issue of cashless ticketing is also having an impact on people on the other end of the age spectrum.
EillÃs Mhic PháidÃn said her 15-year-old daughter was unable to attend the under-21 Donegal county final between Gaoth Dobhair and Termon because she didn't have a bank account.
"I wasn't in a position to bring her and she said, 'oh I can get a lift with my friends'.
"But then I checked online and saw it was cashless and I couldn't give her my bank card because I had stuff to do," she said.
Ms Mhic PháidÃn said the policy was contradictory because they were happy to accept the cash her daughter had previously raised for the GAA through sponsorships.
She added: "That's very unfair and inconsistent."
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Consumer & Retail
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There Is A Wide Gulf Between Ambition And Delivery For Digital Rupee
Despite ambitious targets from the RBI, technology and policy choice for India's CBDC seem far from settled.
India's central bank digital currency—the e-Rupee—is in the middle of an adoption push. But there seems to be a gap in how the project is being envisioned and how it's being implemented.
The technology and policy choices behind the e-Rupee aren't fully settled, according to three people familiar with the pilot. All of them spoke on the condition of anonymity.
Despite the lack of clarity surrounding these elements, the Reserve Bank of India has ambitious targets in mind for the digital currency.
"We should aim to increase retail CBDC transactions to 1 million per day by the end of this year," RBI Deputy Governor T Rabi Sankar said at a banking sector event on July 11. Currently, only about 5,000–10,000 transactions occur via the retail CBDC on a daily basis, Sankar said.
For the wholesale e-Rupee as well, transaction volumes are thin since it only serves a niche use case so far. Some of the measured progress is by design to help the RBI and banks establish internal processes, the first person familiar with the pilot said.
First launched in December 2022, the retail central bank digital currency's pilot was slow to gather steam. But a recent adoption push from banks—powered by phone calls, emails and WhatsApp messages to prospective users—has pushed the number of customers to 1.3 million as of June-end.
Four months earlier in February, the number of users stood at about 50,000 and merchants at around 5,000, Sankar said at the post-monetary policy committee meeting press conference on February 8.
"We want the process to happen gradually and slowly. We are in no hurry to make something happen very quickly," Sankar said at the time.
At the July 11 event, the RBI also stated that it wants a wider cohort of banks to participate in the pilot. But technological limitations could make smaller entrants dependent on bigger banks.
The decision to make Unified Payments Interface QR codes inter-operable with the CBDC will also expand acceptability but as with the larger technology and policy choices surrounding the e-Rupee, it's also yet to be ironed out.
The RBI and the National Payments Corporation of India did not respond to a request for comment on this story.
e-Rupee Meets UPI, Somewhat
By the end of July, e-Rupee users will be able to scan UPI QR codes to pay with the e-Rupee, Sankar said in his speech.
Making the two interoperable would allow e-Rupee users to transact at any store that accepts UPI. But that's so far so good on paper. On the implementation side, things are still a work in progress.
On Thursday, HDFC Bank Ltd. announced that it has integrated UPI QR codes with the e-Rupee. But things are not so simple yet.
Two people familiar with the pilot, however, said that interoperability is still in the works at the NPCI and was not finalised. That process is likely to take another month or so to be completed, the second person familiar with the pilot said.
The interoperability currently works if both the merchant and the customer are part of the e-rupee pilot, but if the merchant isn't, the transaction would fail.
The eventual plan is to make it such that the money flows automatically to a bank account via UPI in case the merchant doesn't have an e-Rupee wallet.
Mixed Wires
The e-Rupee currently operates on systems built by the NPCI, but the RBI is not wedded to that technology, two of the three people quoted above said.
"Not sure if we have completely solved the issue of which technology to use for the e-Rupee," Sankar had said last week. The RBI may consider other private technology providers in the future but will do so without disrupting the pilot, the private banker said.
Blockchain companies, such as R3, Hyperledger and others, had conducted proof-of-concept tests for the RBI as well, but the regulator has chosen to go with the NPCI's system for now, the second person said.
A total of 11 banks, including HDFC Bank, ICICI Bank Ltd. and State Bank of India, currently offer digital rupee wallets to users.
The RBI is urging smaller banks to be a part of the pilot as well and has proposed that large banks already involved in the pilot serve as transaction clearing nodes on their behalf, the people quoted above said.
This is due to a limit on the total number of nodes that can be made operational, which may cause further complications.
Put simply, nodes store a digital copy of all transactions and are continuously updated. They facilitate a common ledger maintained by different parties and, hence, counter repeated spending of the same money. Hence if you have more banks than nodes, it becomes a challenge to record transactions
To resolve this, the RBI is proposing that larger banks maintain and update ledgers for smaller lenders, the people quoted above said.
Missing Incentive
For the retail and wholesale CBDC—at their current stage—the adoption hurdles lie in two things: lack of reason to switch from existing solutions and limited use cases.
With the UPI serving as the popular and free option for retail payments, the reason to switch to the retail e-Rupee is limited.
On the wholesale side, with the e-Rupee limited to a small part of the government securities market with few participants, volumes are unlikely to rise unless use cases increase.
After starting with an average daily transaction volume of about Rs 200 crore in November, wholesale CBDC transaction volumes have since declined to about between Rs 15–20 crore per day, according to last available data with Clearing Corporation of India Ltd. On July 13, for instance, a total of two trades were carried out using the wholesale e-Rupee for a total consideration of Rs 20 crore.
If the RBI mandates that all call money transactions need to be settled in the CBDC, you will see volumes rise, one of the three people quoted earlier said.
CBDC service providers need to support central banks to ensure that consumers and merchants are willing to use CBDC. They should be capable of collecting sufficient revenue to cover costs while meeting legal and regulatory requirements and implementing the authorities’ requirements on AML/CFT and privacy protection.Some Lessons from Asian E- Money Schemes for the Adoption of CBDC, IMF Working Paper
Countries like Nigeria have tried to offer discounts on auto-rickshaws to encourage CBDC adoption in the past but that has faltered to encourage uptake.
"The average number of eNaira transactions since its inception amounts to about 14,000 per week—only 1.5% of the number of wallets out there. This means that 98.5 percent of wallets, for any given week, have not been used even once," according to a working paper from the International Monetary Fund.
The RBI has no plans to offer incentives to encourage the retail e-Rupee, Sankar had said.
Overall, banks appear to be much more charged and confident about deploying the e-Rupee than they were a few months ago. The push comes in the backdrop of ongoing deliberations on what the CBDC's technology and policy design will eventually shape up to be.
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Banking & Finance
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Eris Lifesciences Q2 Results Review - Inline Earnings; On Acquisition Spree: Motilal Oswal
Enters Nephrology space, expands dermatology offerings through acquisitions
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Eris Lifesciences Ltd. delivered an inline Q2 FY24 operational performance. The profitability of its acquired businesses (Oaknet, Glenmark brands and Dr. Reddy Laboratories Ltd. brands) improved to company level in H1 FY24.
The recent acquisition of Biocon’s business enables Eris to make in-roads in Nephrology and expand its derma offerings. In the past 12 months, Eris spent about Rs 16 billion in total on acquisitions.
We maintain our estimates for FY24/FY25. The acquisition of Biocon business is expected to be earnings neutral in FY25. We continue to value Eris at 23 times 12 months forward earnings to arrive at a target price of Rs 930.
In addition to its core therapies of anti-diabetes, cardiology and vitamins-minerals and nutrients, Eris has enhanced its presence in dermatology and nephrology through acquisitions, thereby expanding its overall offerings in the branded formulation space.
The current valuation adequately factors in the upside in earnings. Hence, we maintain our 'Neutral' rating on the stock.
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This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
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Stocks Trading & Speculation
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Maria, 22, came to the UK from Ukraine in March last year shortly after the war broke out. She and her mother travelled using the Ukraine family scheme visa to stay with her aunt. But when her aunt was evicted, they became homeless. For five months, Maria and her mother have been living in temporary accommodation in south London.“It’s horrible actually, the corridors are so old and so dirty,” Maria says. “The council haven’t been very helpful. The room is so small and it’s hard with two adults in one room.”Maria is hoping to find private accommodation, but it is unaffordable when living on universal credit. “You have to pay a deposit, and have a lot of savings but we don’t have that right now,” Maria adds.Maria, pictured with her mother Liudmyla: ‘It’s horrible actually, the corridors are so old and so dirty.’ Photograph: Graeme Robertson/The GuardianThe position Maria finds herself in is one shared by many of the more than 150,000 Ukrainians who came to the UK under the sponsorship scheme or to stay with relatives. In August, it was reported that more than 50,000 Ukrainian refugees in the UK could be made homeless in 2023 as initial six-month placements with hosts end without further accommodation in place.Anastasia Salnikova is the founder of the community interest group J&C Soul CIC, and has been supporting Ukrainian refugees as their sponsorship schemes come to an end. Difficulties in finding accommodation has been a recurring theme for Salnikova.“The problems people are facing are that some are becoming homeless when the sponsorship agreement comes to an end,” Salnikova says. “People are finding it so difficult to find private accommodation too. There are lots of single parents, or people on universal credit, and even those who have full-time jobs are struggling to find accommodation. So what is going to happen is that we are going to have lots more people facing homelessness as the scheme ends”.Anastasia Salnikova: ‘There are lots of single parents, or people on universal credit, and even those who have full-time jobs are struggling to find accommodation.’ Photograph: Graeme Robertson/The GuardianDespite having a relatively well-paying, full-time job as a chef, Oksana, who’s a single parent to her 12-year-old son, is struggling to find a place to live once the sponsorship scheme comes to an end. Since December, Oksana has enquired after at least seven properties but hasn’t been successful in finding somewhere for herself and her son to live.“The scheme is coming to an end and I’m trying to find private accommodation, but even though I’m earning good money and have a good job in central London, I can’t find accommodation because many places are too expensive or need a guarantor, which I don’t have.”“My sponsor is well-connected, and has been helping me to find somewhere too. But even with all the connections we have, and having a good job, it’s still a challenge,” Oksana says. “And so for the people without, it’s even harder”.Natalia Platonova and her partner, Andreyy Palatov, feel as if they’re in limbo. Their current sponsorship is due to end in the next few months, and although there is the possibility that it may be extended, this hasn’t been confirmed.Natalia Platonova and husband Andreyy: ‘No matter how wonderful our sponsors are, we want to be independent.’ Photograph: Graeme Robertson/The GuardianThey are from Mariupol, which has been completely destroyed by bombing, so it is not an option for them to return. They want to build a life here.“On one hand, we’re extremely grateful that we’re here and that we were able to escape and survive, our sponsors have been wonderful,” the couple say, through an interpreter.“No matter how wonderful our sponsors are, we want to be independent but we don’t speak English and we’re middle-aged. It’s frustrating because we don’t see the prospect of having our own private accommodation, not because we don’t want to but because we don’t speak English it’s more difficult to find a job or a landlord who would rent to us,” they add.A spokesperson for the Department for Levelling Up, Housing and Communities said: “Homes for Ukraine has seen 112,000 Ukrainians welcomed to the UK, thanks to the generosity of sponsors.“We’ve provided councils with extensive funding including an addition £150m to support Ukrainian guests move into their own homes, as well as £500m to acquire housing for those fleeing conflict.“All Ukrainian arrivals can work or study and access benefits from day one and we have increased ‘thank you’ payments for sponsors to £500 a month once a guest has been here for a year.”
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NEW YORK (AP) — The Biden administration will propose a new rule Wednesday that would make 3.6 million more U.S. workers eligible for overtime pay, reviving an Obama-era policy effort that was ultimately scuttled in court.
The new rule, shared with The Associated Press ahead of the announcement, would require employers to pay overtime to so-called white collar workers who make less than $55,000 a year. That’s up from the current threshold of $35,568 which has been in place since 2019 when Trump administration raised it from $23,660. In another significant change, the rule proposes automatic increases to the salary level each year.
WATCH: Are bosses cheating workers out of overtime?
Labor advocates and liberal lawmakers have long pushed a strong expansion of overtime protections, which have sharply eroded over the past decades due to wage stagnation and inflation. The new rule, which is subject to a publicly commentary period and wouldn’t take effect for months, would have the biggest impact on retail, food, hospitality, manufacturing and other industries where many managerial employees meet the new threshold.
“I’ve heard from workers again and again about working long hours, for no extra pay, all while earning low salaries that don’t come anywhere close to compensating them for their sacrifices,” Acting Secretary of Labor Julie Su said in a statement.
The new rule could face pushback from business groups that mounted a successful legal challenge against similar regulation that Biden announced as vice president during the Obama administration, when he sought to raise the threshold to more than $47,000. But it also falls short of the demands by some liberal lawmakers and unions for an even higher salary threshold than the proposed $55,000.
Under the Fair Labor Standards Act, almost all U.S. hourly workers are entitled to overtime pay after 40 hours a week, at no less than time-and-half their regular rates. But salaried workers who perform executive, administrative or professional roles are exempt from that requirement unless they earn below a certain level.
The left-leaning Economic Policy Institute has estimated that about 15 percent of full-time salaried workers are entitled to overtime pay under the Trump-era policy. That’s compared to more than 60 percent in the 1970s. Under the new rule, 27 percent of salaried workers would be entitled to overtime pay because they make less than the threshold, according to the Labor Department.
Business leaders argue that setting the salary requirement too high will exacerbate staffing challenges for small businesses, and could force many companies to convert salaried workers to hourly ones to track working time. Business who challenged the Obama-era rule had praised the Trump administration policy as balanced, while progressive groups said it left behind millions of workers.
A group of Democratic lawmakers had urged the Labor Department to raise the salary threshold to $82,732 by 2026, in line with the 55th percentile of earnings of full-time salaried workers.
A senior Labor Department official said new rule would bring threshold in line with the 35th percentile of earnings by full-time salaried workers. That’s above the 20th percentile in the current rule but less than the 40th percentile in the scuttled Obama-era policy.
The National Association of Manufacturers last year warned last year that it may challenge any expansion of overtime coverage, saying such changes would be disruptive at time of lingering supply chain and labor supply difficulties.
Under the new rule, some 300,000 more manufacturing workers would be entitled to overtime pay, according to the Labor Department. A similar number of retail workers would be eligible, along with 180,000 hospitality and leisure workers, and 600,000 in the health care and social services sector.
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Workforce / Labor
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Costco is certain to raise its membership fees in the future, but as the sixth anniversary of the last fee hike approaches, the company says there are no immediate plans to do so while membership rates are at all-time highs.
"In our view, it's a question of when, not if," Costco CFO Richard Galanti told investors on a Q2 earnings call on Thursday.
Galanti acknowledged that June would mark six years since the Washington-based retail giant last raised the price of its Gold Star membership, which currently costs $60. He said that Costco typically raises its membership fee every five years and seven months, on average. Costco last increased its membership prices in June 2017.
As to whether fees will go up soon, Galanti said, "we'll let you know."
At the end of the second quarter, Costco's membership renewal rate came in at 92.6% in the U.S. and Canada, and 90.5% worldwide, each up 0.01% from the previous quarter.
"Membership growth has remained strong," Galanti reported. "We ended the second quarter with 68.1 million paid household members and 123.0 million cardholders, both up more than 7% versus a year earlier."
Galanti said that at the end of Q2, Costco had 30.6 million paid executive memberships. Executive members now represent 45% of paid members and about 73% of worldwide sales.
The company posted $1.027 billion in membership fee income compared to $967 million a year earlier, a $60 million increase, or 6.2%.
Coscto also reported a Q2 net sales increase of 6.5%, to $54.24 billion, from $50.94 billion last year.
The company earned $1.486 billion in net income, an increase over the $1.299 billion for Q2 2022.
Addressing inflation, Galanti actually expressed optimism that prices are cooling off. He said inflation grew somewhere between 5%-6% this quarter, compared to 6%-7% in the previous quarter.
"We continue to see some improvements in many items," Galanti told investors. "Commodity prices are starting to fall — not to back to pre-COVID levels ... but continue to provide some relief — things like chicken, bacon, butter, steel, resin, nuts."
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Consumer & Retail
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Americans are protected from most surprise medical bills by the No Surprises Act that took effect last year. But there's one key item the legislation left out: ambulance rides.
A recent report found more than half of ambulance rides by insured patients result in a surprise bill. Those rides cost patients roughly $130 million a year, according to the U.S. Public Interest Research Group, or PIRG.
David Feng and Christy Shum are currently fighting their bill, which totals more than $7,000. The bill is for an ambulance ride their 1-year-old son, Theo, took from home as a newborn, a week after he was born prematurely.
"He was breathing, but very heavily," Feng said. "So he wasn't getting all the oxygen he needed."
Doctors told the couple the baby would need to be transferred by ambulance to a children's hospital with a special team and life support. At no point during that process did the cost of the ride cross their mind.
Yet a few weeks later, with Theo still hospitalized with what specialists determined were two holes in his heart, the couple got a bill for the ambulance transfer. It totaled over $7,000.
Christy's insurance company, UnitedHealthcare, paid nearly $1,000 of that, leaving them owing the rest – more than $6,000, because UnitedHealthcare said the service was an "out-of-network provider or facility."
"It's totally shocking when you see the bill and to me, it's really unfair," Feng said.
Many surprise medical bills like the one they received were eliminated by the No Surprises Act, legislation passed by Congress in 2020 that protects consumers against most surprise bills for emergency services, including life-saving helicopter flights.
But what it didn't get rid of were surprise bills from regular ground ambulances.
Patricia Kelmar with PIRG said Congress "dodged" the issue, and "decided to acknowledge the problem by creating a federal committee to look at the problem more deeply." Kelmar is on that committee.
"There are fixed costs when it comes to ambulance treatment," she said. "We should set a price that is tied to costs, and that will help make our insurance companies pay those costs, at a true price, and will protect people from these really high out-of-network bills."
But there's no firm timeline for developing a new system, leaving some families struggling.
Shum appealed their $6,000 ambulance bill, but got a letter from UnitedHealthcare saying: "Payment for this service is denied." The insurance company also took back the $1,000 it did pay – saying Feng's insurance company, Blue Cross Blue Shield of California, should have paid all the expenses for the baby's first month.
Over a year later, the ambulance bill – over $7,000 in total – remains unpaid despite hours spent on the phone with both companies, trying to get answers.
"It's frustrating," Shum said. "The fact that it's taking so much of our time and it's still not resolved and we still don't know anything."
The company that provided the ambulance told CBS News the bill had been submitted several times but had gotten "stuck" in the system. It also said specialized critical care transport is expensive to operate around the clock, and it relies on insurance companies to reimburse timely and at a fair rate.
Blue Cross Blue Shield of California told CBS News it couldn't answer questions about issues with the couple's bill due to federal privacy laws.
The family says Blue Cross Blue Shield called and promised it is working to resolve the issue, but the family says there's been no resolution yet.
UnitedHealthcare, Shum's insurer, said primary coverage for Theo was under his father's insurer, not UnitedHealthcare, but they have now "contacted both the ambulance company and (Blue Cross Blue Shield of California) to help get this bill resolved."
Still, Feng and Shum say the stress from the bills couldn't put a damper on a magical moment — the day Theo finally came home from the hospital after two and a half months. He is now healthy.
We'd like to know what you paid for medical procedures. You can email us at healthcosts@cbsnews.com.
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Consumer & Retail
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Amazon ships more than a million packages daily, but there's at least one person in a million who frowns when she encounters a smiling box placed on her doorstep.
A Canadian woman, Anca Nitu, told CBC that over the past two months, more than 50 packages have arrived at her home. Each package contained a return slip and a pair of shoes from an Amazon buyer located in North America who wrongly shipped their rejected shoes to Nitu's address.
Nitu thinks she knows what's happening. She believes that Amazon sellers stole her information from a dormant Amazon account and are using her name and home address as an easy way to get rid of unwanted return items that sellers either cannot afford to store or do not wish to store. The Better Business Bureau (BBB) told CBC that it sounded like a vendor-return scheme that's common in the US but rarer in Canada, where foreign sellers dodge fees associated with storing and shipping return items by sending the items anywhere but their own addresses.
Nitu said she has lost sleep trying to make the packages stop coming, and so far she's accrued Collect-On-Delivery customs charges from UPS that now exceed $300.
"I start shaking when I see packages at my door," Nitu told CBC. "They keep coming, and it just doesn't end."
Ars could not reach Nitu for comment, but she told CBC that neither UPS nor Amazon has helped her dispute the charges or correct the issue. The BBB is assisting Nitu in resolving the dispute with UPS, which Nitu described as being "a complete nightmare," CBC reported.
"I refused to pay, and the dispute with UPS is still ongoing," Nitu said. "They're completely unreasonable. I tried to explain the situation and they were not nice, let's put it that way."
Ars could not immediately reach either company for comment, but a UPS spokesperson told CBC that it's investigating the complaint. An Amazon spokesperson told CBC that "the case in question has been addressed, and corrective action is being taken to stop the packages."
Until the packages stop coming, Nitu has taped a typed note on printer paper to her door that says, "All COD deliveries for Anca Nitu are refused. UPS, please don't abandon packages at my door!"
She's also had to figure out what to do with all those shoes. At one point, she contacted police, who advised her to open the packages, then dispose of them, CBC reported. With no use for the shoes herself, Nitu said she's been giving them away to coworkers or donating them to Goodwill.
"I don't have storage, and I can't keep all these shoes indefinitely," Nitu told CBC.
Amazon said that typically the company advises any recipient of an unwanted package to fill out a Report Unwanted Package form. That Amazon page says to report any unsolicited packages "immediately," confirming that "third-party sellers are prohibited from sending unsolicited packages to customers."
For Nitu, her worries won't necessarily end, even if the packages ever do stop coming. She told CBC that she has no idea whether the Amazon sellers that are using her information to ship unwanted return items are doing anything else with her information. She also worries that if Amazon doesn't unlink her name from the seller accounts, she could one day be charged Amazon seller fees.
"These seller accounts for Amazon are not free," Nitu told CBC. "Amazon is charging these sellers, and my name and address are linked to a seller account."
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Consumer & Retail
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South Dakota's attorney general called on a state lawmaker Thursday to repay more than $600,000 in federal COVID-19 relief funding she received for her preschool business.
Attorney General Marty Jackley gave fellow Republican state Sen. Jessica Castleberry, of Rapid City, 10 days to return the money she accepted for Little Nest Preschool, which she owns.
In a letter dated Wednesday, Jackley cited a 2020 South Dakota Supreme Court advisory warning state lawmakers that it is unconstitutional for them to accept federal pandemic funding.
“The Supreme Court has expressly forbidden such payments to legislators,” Jackley wrote to Castleberry.
Gov. Kristi Noem has said Castleberry violated the state constitution by accepting the pandemic aid.
“The Supreme Court, could not have spoken more clearly, or on point to this issue. The Senator has a personal and ethical obligation to avoid conflict of interests,” Noem had written in an earlier letter to the attorney general.
Castleberry said she believed her company was eligible for funding after speaking with a lawyer. She said she “communicated directly and transparently” with Social Services staff regarding her grant applications.
“I am committed to resolving the issue with the State and will work with them to ensure I acted in compliance with the State Constitution,” Castleberry said in a statement.
Noem had asked the attorney general to investigate Castleberry after a state Social Services Department staffer recognized Castleberry's name on a recent $4,000 grant request, which was denied. A review by the agency turned up more than a dozen other payments to Castleberry's preschool.
Castleberry was appointed to a vacant state Senate seat in 2019 and continues to serve.
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Nonprofit, Charities, & Fundraising
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Jeremy Hunt should scrap the pension triple lock to pay for net zero policies, the Organisation for Economic Cooperation and Development (OECD) has said.
The Paris-based organisation said as high interest rates erode public spending, the Government should look for ways to free up cash and reduce the UK’s debt pile by scrapping costly policies such as the state pension triple lock.
Currently, the triple lock means the state pension rises by the highest of inflation, average earnings or 2.5pc. Next year, it is going up by 8.5pc, from £10,600 to £11,502, matching wage growth.
The anticipated rise comes as the UK faces increased decarbonisation costs and a surge in interest payments on the national debt, the think tank said.
Slashing emissions from power, cities, and industry is set to cost the Government 0.5pc of GDP per year, the OECD said – equivalent to around £14bn.
The loss of fuel duty from the move to electric cars is forecast to cost another 0.4pc, or around £11bn per year, by 2030.
“Maintaining and strengthening current fiscal efforts is essential against the challenging backdrop of high borrowing and debt, and as higher debt interest payments have eroded fiscal headroom,” the OECD said.
“Reforming the costly triple lock uprating of state pensions would help, by indexing pensions to an average of CPI and wage inflation.”
The combination of Britain’s ageing population, high inflation and the triple lock will push up spending by 0.8pc of GDP by 2027-28, equivalent to almost £25bn.
The pressure on the public purse comes at a time when the British economy is already struggling.
The OECD’s economists, led by Clare Lombardelli, formerly the chief economic advisor to the Treasury, expect UK GDP to grow by just 0.5pc this year and 0.7pc in 2024.
This is the weakest performance in the G7 aside from Germany, which is set to shrink this year.
The OECD said cuts to the headline rate of national insurance as well as the “full expensing” policy which encourages businesses to invest should help the economy in the long run.
But it also warned that “fiscal pressure on households and businesses has increased significantly since the spring Budget, due to the freeze of income tax brackets and the corporate income tax rate increase”.
It hopes Mr Hunt’s tax tweaks could ultimately boost the economy, adding that extra growth “could enable the Government to reduce fiscal pressure by gradually increasing labour market participation and business investment”.
However, this possibility then runs up against the costs of net zero policies which limit the Government’s room to loosen the purse strings elsewhere.
Debt and decarbonisation are challenges across much of the rich world, the think tank said.
“In many countries, fiscal pressures are mounting. Demographic changes, decarbonisation, and a combination of rising interest payments and slow growth mean countries face a challenging fiscal outlook,” the OECD said.
“Governments need to take bold action to reduce such pressures and give a greater focus to growth in their policy making.
“That means reforming labour market and pensions policies, increasing competition, and using fiscal levers to increase human capital and productivity enhancing investment, including the investment needed to deliver the green transition.”
When it comes to central banks, the OECD said the cost of borrowing “needs to remain restrictive until there are clear signs that underlying inflationary pressures are durably lowered”.
“Policy rates appear to be at or close to their peak in most advanced economies, although some additional rate rises could still be needed if underlying inflationary pressures prove persistent,” it said.
In the UK, the OECD does not think the Bank of England will be in a position to cut rates at all next year, from the current level of 5.25pc.
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United Kingdom Business & Economics
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Rishi Sunak has batted away suggestions he was at fault for the concrete crisis in schools, in a Prime Minister's Questions dominated by the issue.
He faced Labour leader Sir Keir Starmer who likened the government to "cowboy builders" seeking to shift blame.
But Mr Sunak said his government acted "decisively" on the unsafe concrete and branded Sir Keir "Captain Hindsight".
The government has published a list of schools in England with reinforced autoclaved aerated concrete (RAAC).
A total of 147 education settings are included on the list, which sets out the RAAC mitigation measures schools have been forced to take.
The long-awaited list was published on Wednesday, after more than 100 schools were ordered to fully or partially shut buildings before the new academic year over RAAC concerns.
The Department for Education (DfE) later said the list of schools in England where RAAC is present is only up to date as of 30 August, and the actual number is likely to be higher.
The government's record on dealing with the crisis was the main focus of PMQs, the first such session since MPs returned from their summer break.
Sir Keir read out the names of schools earmarked for repairs in 2010 under a Labour scheme, but which remain on the government's list of RAAC-exposed sites.
He quoted Gareth Davies, the head of spending watchdog the National Audit Office (NAO), who accused the government of a "sticking plaster approach" to school maintenance.
Sir Keir asked, if Mr Sunak was not to blame, "why does everyone else say it's his fault?".
Mr Sunak said he would "make no apology for acting decisively" since new information about RAAC came to light and insisted the government was doing "everything it can to fix this quickly".
He said the RAAC situation in schools had "evolved over time" and argued "it's something successive governments have dealt with".
Schools concrete crisis
Problems with the material have been known about for many years, but only came to wider attention following the collapse of a primary school's flat roof in 2018.
The incident prompted warnings from both the Local Government Association and Department for Education. Organisations responsible for school buildings were told to take steps to confirm the safety of their construction.
RAAC was used in various types of building between the 1950s and 1990s, but the material, a cheaper alternative to standard concrete, has a lifespan of around 30 years.
Although concerns about the material have been around for a while, the recent announcement about schools has sparked a political wrangle about previous levels of investment for repairs.
Since the announcement, Labour has increasingly sought to put Mr Sunak's record in the spotlight by questioning funding decisions he made when he was chancellor in Boris Johnson's government.
At PMQs, Sir Keir suggested the crisis was "the inevitable result of 13 years of cutting corners, botched jobs, sticking-plaster politics".
The Labour leader said: "It's the sort of thing you expect from cowboy builders saying that everyone else is wrong, everyone else is to blame, protesting that they've done an effin' good job even as the ceiling falls in.
"The difference is that in this case, the cowboys are running the country."
Hitting back, Mr Sunak said: "This is exactly the kind of political opportunity that we've come to expect from Captain Hindsight over here.
"Before today, he's never once raised this issue with me, across this dispatch box."
That point was contested by Sir Keir, who said Labour MPs had asked many parliamentary questions about the issue.
Sir Keir said schools now found to have RAAC which would have been replaced under Labour's Building Schools for the Future (BSF) programme, started when the party was in government.
But Mr Sunak said the BSF scheme, scrapped by the coalition government, would have been "time-consuming and expensive, just like the Labour Party".
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Real Estate & Housing
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LONDON, Dec 4 (Reuters) - Britain proposed on Monday permanent, post-Brexit rules for investment funds from the European Union that want to continue marketing themselves to retail investors in the UK, including spelling out limitations to compensation.
After Britain left the EU, it gave temporary permission for EU-based investment funds known as UCITS to continue taking UK customer cash until a permanent set of UK rules on market access for overseas funds is put in place in the first half of 2024.
The rules set out the information overseas funds will have to provide to the Financial Conduct Authority if the UK finance ministry decides that EU fund rules are "equivalent" or robust enough to grant market access.
The government has already indicated that UK investors in overseas funds won't be eligible for any compensation from Britain's Financial Services Compensation Scheme.
"Overseas funds will need to make it clear when these customer protections are not available. This will help consumers to make informed decisions about which funds best meet their needs," the FCA said in its proposals for public consultation.
Britain is expected to allow EU-based funds, many of them listed in Dublin and Luxembourg and managed from London, to continue serving UK clients, given it continually stresses the City's openness as a global financial centre.
Most overseas funds on sale in Britain are from the EU, and EU funds make up a large portion of funds invested in by UK retail customers.
Asset managers, however, worry about additional requirements the ministry may impose on EU funds in return for UK market access, such as a mandatory value assessment.
The FCA is cracking down on valuations in private assets to ensure they properly reflect the impact of higher interest rates.
Reporting by Huw Jones; Editing by Toby Chopra and Sharon Singleton
Our Standards: The Thomson Reuters Trust Principles.
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Banking & Finance
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Aim To Digitise 65,000 Cooperative Societies By March 2024: Nabard Chairman
Pointing at the regional disparity with regard to microfinance exposure, Shaji said, it is skewed more towards East and South. Microfinance exposure in these two regions is about two-thirds, while the rest of India comprising North, Central and West has only one-third, he said.
Nabard Chairman Shaji K V on Wednesday said the government aims to computerise about 65,000 cooperative societies by March 2024 in order to improve transparency and efficiency of such cooperatives.
The National Bank for Agriculture and Rural Development (Nabard) has been designated as project manager for computerisation of cooperative societies under the guidance and directions of the National Level Monitoring and Implementation Committee and Ministry of Cooperation.
"Close to 10,000 cooperative societies have already been digitised. We are targeting 65,000 societies to be digitised by March 2024," he said at a conference organised by Sa Dhan.
Observing that cooperatives have created lot of inefficiencies over the years, he said, "we are trying to clean up by improving transparency and making them important value chain players through computerisation of these entities." Nabard is also building a data warehouse for cooperatives and the rural sector, he said, adding, it should be in place in about six months. Once that is in place, it will be available for players to use data for their and borrowers' benefit.
Pointing at the regional disparity with regard to microfinance exposure, Shaji said, it is skewed more towards East and South. Microfinance exposure in these two regions is about two-thirds, while the rest of India comprising North, Central and West has only one-third, he said.
"It raises the question, whether we are addressing regional disparity properly. If you extrapolate this data with GDP contribution or with the National Income contribution, then we can find certain inequality here," he said.
The southern region, which is good in banking penetration, has got a very high credit to GDP ratio whereas North and West, which contribute much to national income, are low on priority sector lending, he said adding, this needs to be corrected.
On gender equality, Shaji said, Nabard is sensitising Regional Rural Banks (RRBs) to keep this in mind while giving credit.
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Banking & Finance
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ONGC Shares At Five-Year High On Plan To Set Up Two Petrochemical Plants
The company plans to invest Rs 1 lakh crore by 2030 in two projects to raise petrochemical capacity to 8.5-9 million tonne.
"We have plans to invest Rs 1,00,000 crore by 2028 or 2030 in two projects in two separate states," D Adhikari, chief of joint ventures and business development, said at an investor call on Wednesday on ONGC's second quarter earnings. "Our plan is to raise petrochemical capacity to 8.5–9 million tonne by 2030."
The development came in the backdrop of crude oil companies exploring new ways to utilise crude oil as the world is trying to transition from fossil fuels to green energy. ONGC contributes 71% of the domestic crude oil production in India and is the largest crude oil and natural gas company in the country.
ONGC's stock rose as much as 1.95% during the day on the NSE to Rs 203.40 apiece, the highest since Jan. 25, 2018. It was trading 0.93% higher at Rs 201.35 apiece compared to a 0.57% advance in the benchmark Nifty 50 at 11:46 a.m.
The shares have risen 37.55% on a year-to-date basis. The total traded volume so far in the day stood at 3.7 times its 30-day average. The relative strength index was at 71.72.
Twenty out of 27 analysts tracking ONGC maintain a 'buy' rating on the stock, four recommend a 'hold' and three suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 52.4%.
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Energy & Natural Resources
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Brett Favre will not give sworn testimony about the Mississippi welfare scandal this month after the Mississippi Department of Human Services notified the Hinds County Circuit Court that it has rescheduled his planned deposition for December instead. Favre’s lawyers and the State requested the change.
“Please take notice that at the request of counsel for Brett Favre, Plaintiff, Mississippi Department of Human Services by and through their attorneys of record, Jones Walker LLP, is re-noticing the deposition of Brett Lorenzo Favre in accordance with the Mississippi Rules of Civil Procedure beginning on Monday, December 11, 2023 at 9:00 a.m. CST at a location to be agreed on in the future and continuing from day to day until completed,” MDHS’s Oct. 6 court filing says. “The deposition will be conducted by oral examination before a court reporter authorized by law to take depositions and administer oaths. The deposition will be recorded by stenographic means. The deposition may be video recorded.”
The State did not give a reason for rescheduling Favre’s testimony. Previously, on Oct. 2, MDHS notified the court that it would depose Brett Favre at Hotel Indigo in Hattiesburg, Miss., on Oct. 26—just 12 days before the Nov. 7 statewide elections. The welfare scandal has been a central issue in the campaign for governor and other races.
The State and Favre’s attorneys previously motioned on Sept. 22 for the court to adopt a protective order that would have designated all deposition testimony as “Confidential or Highly Confidential” and would have concealed it from the media and public for 30 days. That would’ve kept Favre’s testimony secret until after the election, but the judge has not yet ruled on whether to adopt the protective order. If she does, Favre’s testimony could remain under seal until mid-January 2024.
Neither federal nor state investigators have accused the retired celebrity NFL star of a crime related to the welfare scandal, but he is among several dozen individuals targeted in MDHS’s civil lawsuit that seeks to claw back millions in misspent funds.
In 2020, Favre paid back $500,000 of a $1.1-million payment he received in Temporary Assistance For Needy Families funds to give motivational speeches and record advertisements. He repaid the other $600,000 after receiving a demand letter from the state auditor’s office in late 2021.
MDHS lawyers are also demanding Favre pay for millions in welfare funds that the since-indicted former MDHS Director John Davis and indicted nonprofit leader Nancy New directed to a volleyball stadium he wanted and toward a concussion drug company he was invested in.
Hundreds of text messages show that Favre sought help from Davis and New.
“If you were to pay me is there anyway (sic) the media can find out where it came from and how much?” the football star asked New in an Aug. 3, 2017, text message after New proposed directing funds toward him as part of an effort to fund the volleyball stadium at the University of Southern Mississippi, where Favre’s daughter was a volleyball athlete at the time.
Favre has denied knowing the money came from welfare funds, and the text messages do not show anyone directly telling him TANF money was involved. The quarterback also sought help from former Gov. Phil Bryant, but the former governor has denied having any role in directing welfare funds to Favre’s projects. Texts Bryant released earlier this year show that Favre and his partner in the drug company, Prevacus, also sought help from then-President Donald Trump.
Text messages the Mississippi Free Press uncovered through a public records request last year show Favre also sought help to get legislative funds for the volleyball project from current Gov. Tate Reeves in early 2020, but there is no evidence that Reeves assisted him. However, text messages Reeves’ office released last month do show that his brother, Todd Reeves, assisted Favre’s efforts to repay the State $500,000 in 2020.
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Nonprofit, Charities, & Fundraising
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For the so-called Slacker Generation, their retirement reality bites.
Just over half of Generation X born between 1965 and 1980 have little to nothing socked away for retirement, according to research by Prudential Financial of 2,000 pre-retiree Gen Xers conducted between March 31 to April 6, 2023. Thirty-five percent of the 65 million US Gen Xers have less than $10,000 saved, and 18% have no savings.
The results, echoed in two other recent surveys, reflect the burdens this generation faces and are a big wake-up call — especially for the oldest members who are about a decade from retirement age.
“Gen X is staring at one of the most complex landscapes for retirement readiness in decades,” Prudential Vice Chair Rob Falzon told Yahoo Finance, “due to the decline in defined benefit pension plans which often supported previous generations’ retirement, as well as uncertainty about the economy and long-term Social Security benefits.”
‘Gen Xers have less confidence in their financial future’
The Prudential research comes on the heels of the latest study from Allianz Life Insurance Company of North America published last week and Northwestern Mutual's 2023 Planning & Progress Study published in mid-May, both of which raised serious concerns about Gen X’s future financial outlook.
It’s a trifecta of gloomy news for Gen Xers.
In Allianz’s report, 64% of Gen Xers worry they won’t have enough saved for retirement, up from 55% in 2021. That’s even higher than the Prudential report clocked and also tops Northwestern’s finding that 55% of Gen Xers say they won't be financially prepared for retirement when the time rolls around.
If that wasn’t enough, nearly half (46%) believe they could outlive their savings, according to the Northwestern survey conducted among 2,740 U.S. adults between February 13 and March 2, 2023.
“A notable finding in our report was that Gen Xers have less confidence in their financial futures than other generations,” Kelly LaVigne, vice president of Consumer Insights at Allianz Life, told Yahoo Finance.
Overall, only 55% of Gen Xers believe they are better off than previous generations at their age, versus 70% of boomers and 61% of millennials, Allianz found. And 69% of them said they are confident in their ability to financially support all the things they want to do going forward, down from 73% last year and lower than the 76% for millennials and 86% for boomers.
Allianz Life conducted the online survey of 1,000 adults who either had $150,000 or more of investable assets, or incomes of $50,000 a year if single and $75,000 a year if married in February and March of 2023.
Why is Gen X so behind on retirement saving?
While it could be easy to blame apathy or disengagement — characteristics that Gen Xers have often been saddled with by onlookers — there are several underlying economic issues making it harder for this cohort to save.
“The goal for retirement planning is to enjoy today without feeling like you’re sacrificing tomorrow’s dreams, but Gen X is clearly more anxious than other generations about what lies ahead,” Christian Mitchell, chief customer officer at Northwestern Mutual, told Yahoo Finance.
“Many in this generation are simultaneously taking care of kids and aging parents. When so many people count on you, it’s easy to deprioritize yourself,” he said. “But as their retirement age gets closer, pressure for Gen X builds.”
Adding to those responsibilities is higher consumer prices.
More than two-thirds of working Gen Xers are concerned about reaching their savings goals due to inflation, and nearly three-quarters say the current economic environment makes it hard to plan beyond day to day, according to the Prudential research.
In fact, 67% of those canvassed by Allianz say their income is not keeping up with the rising cost of living, up from 54% just last year.
What do Gen Xers expect in retirement?
Their solution: Almost half (47%) of all working Gen Xers expect to retire later than anticipated to make up for that, and another four in ten plan to work part time after retirement, Prudential reported.
While the Prudential survey found that 58% expect to rely on Social Security as their primary source of retirement income, the Northwestern one found that just 45% were “very or somewhat confident” that Social Security will be there to support them when they need it.
That makes sense because the current projections are that, if no policy action is taken, the Social Security trust fund reserves will be depleted by 2033 when the oldest Gen Xers hit full retirement age. At that point, Social Security will be able to pay out only 77% of benefits.
Pensions are also a thing of the past. Only 20% of Gen Xers plan to use traditional pensions as a source of retirement income and a tiny 11% say they will mainly rely on a pension, Prudential reports.
“It’s a new era we are entering into, where folks are dependent on their defined contributions plans for retirement and very few lucky folks — excluding government employees — have defined benefit plans which they can use in retirement,” Tricia Rosen, a certified financial planner with Access Financial Planning in Andover, Mass., told Yahoo Finance.
And while in the past, home equity was often a kitty to fund retirement lifestyles, a slim 16% of Gen X plan to use their home value to support their retirement years.
No financial plan in place
Many Gen Xers also have their heads in the sand when it comes to even focusing on their future.
Although they know they are admittedly not financially in good shape for retirement, nearly half spend no time a week thinking about retirement, according to Prudential’s survey, while two-thirds have no retirement strategy, a real sticking point, according to many financial advisors.
“Gen Xers have not taken the time to get a financial plan in place,” Barbara Pietrangelo, a certified financial planner with Prudential in Ada, Michigan, told Yahoo Finance. “Those that have a plan tend to feel in a much better place.”
But a quarter surveyed by Allianz say “retirement is too far away for me to start worrying about it now,” while nearly half say they can’t even think about saving for retirement right now and are just trying to take care of day-to-day expenses.
To be fair, it may not be that they are blithely tuning out. There are indications that Gen Xers are, in fact, concerned and they’re increasingly cognizant that time is not on their side. Only a quarter of Gen Xers say they have plenty of time to save money for retirement later, down from 43% in 2021, the Allianz Life study found.
“They’re starting to reach that critical window in preparing for retirement, which is usually about 10 years before leaving the workforce,” Allianz’s LaVigne said. “At that point, many people are at a life stage to really focus on retirement –their kids are grown, they are likely making more money, and have already made big purchases like a home. This is the time when many people can really start buckling down.”
It can start by taking action and simply setting goals, then prioritizing those goals, and reviewing regularly, Pietrangelo added. Maxing out retirement plan contributions — including catch-up ones when they hit 50 — is also imperative.
The Prudential survey found that many Gen Xers are taking steps, with 56% saving 10% or more of their income, 40% upping retirement contributions, and 86% adjusting their lifestyle, so they can save more.
“The bottom line is this: While time to plan is running out, there is still time to act,” Mitchell said. “The data represents an opportunity for Gen X to mobilize and get organized.”
Kerry Hannon is a Senior Reporter and Columnist at Yahoo Finance. She is a workplace futurist, a career and retirement strategist and the author of 14 books, including "In Control at 50+: How to Succeed in The New Work of Work" and "Never Too Old To Get Rich." Follow her on Twitter @kerryhannon.
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Personal Finance & Financial Education
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India Set To Become Third Largest Economy By 2030: S&P
The agency sees growth rate at 6.4% in the next fiscal (2024-25) before climbing to 6.9% in the next and 7% in 2026-27.
India will become the world's third largest economy by 2030, S&P Global Ratings said on Tuesday as it forecast the nation's GDP growth reaching 7% in 2026-27 fiscal year.
In its Global Credit Outlook 2024, S&P saw a 6.4% GDP growth in the fiscal year through March 2024 (2023-24) as compared to 7.2% in the previous financial year.
The growth rate will remain at 6.4% in the next fiscal (2024-25) before climbing to 6.9% in the next and 7% in 2026-27, the rating agency said. "We see India reaching 7% in 2026-27 fiscal."
"India is set to become the third-largest economy by 2030, and we expect it will be the fastest growing major economy in the next three years," S&P said.
India currently is the fifth largest economy in the world behind the U.S., China, Germany and Japan.
"A paramount test will be whether India can become the next big global manufacturing hub, an immense opportunity. Developing a strong logistics framework will be key in transforming India from a services-dominated economy into a manufacturing-dominant one," it said.
Unlocking the labour market potential will largely depend upon upskilling workers and increasing female participation in the workforce.
"Success in these two areas will enable India to realise its demographic dividend," it said.
S&P said a booming domestic digital market could also fuel expansion in India's high-growth startup ecosystem during the next decade, especially in financial and consumer technology.
In the automotive sector, India is poised for growth, building on infrastructure, investment, and innovation, it added.
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India Business & Economics
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- Lowe's cut its full-year sales outlook.
- The home improvement retailer beat first-quarter earnings and revenue expectations.
- The company's shares dipped in premarket trading.
Lowe's cut its full-year outlook Tuesday, as lumber prices fell and do-it-yourself customers bought fewer discretionary items.
It lowered its forecast even as it beat Wall Street's revenue and earnings expectations for the fiscal first quarter.
The company's shares dipped in premarket trading.
Here's what the home improvement retailer reported for the three-month period ended May 5 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: $3.67 adjusted vs. $3.44 expected
- Revenue: $22.35 billion vs. $21.6 billion expected
Lowe's net income for the three-month period was $2.26 billion, or $3.77 per share, compared with $2.33 billion, or $3.51 per share, a year earlier.
Net sales fell nearly 6% to $22.35 billion from $23.66 billion in the year-ago period, but exceeded Wall Street's expectations.
Comparable sales dropped 4.3% in the fiscal first quarter. That's lower than the 3.4% decline that Wall Street expected, according to StreetAccount.
The home improvement retailer said it now expects total sales for the full year to range between $87 billion and $89 billion, lower than the $88 billion to $90 billion it had previously forecast. It said it projects comparable sales to decline by 2% to 4% this fiscal year, below the flat to down 2% that it had said before.
It said adjusted earnings per share will range between $13.20 and $13.60, below its previous range of $13.60 to $14.00.
CEO Marvin Ellison said in the company's news release that lumber deflation, unfavorable weather and lower spending by DIY customers hurt quarterly sales. He said the lowered forecast reflects weaker-than-expected consumer demand.
Yet, he added, Lowe's digital sales and its comparable sales among home professionals rose in the first quarter compared with the year-ago period.
He said the company remains "optimistic about the medium-to-long term outlook for home improvement and our ability to continue to grow market share."
Lowe's is the latest retailer to warn of slower sales ahead, as consumers become thriftier and reluctant to spend on big-ticket and discretionary items. Many other retailers, including Walmart, Target and Home Depot, also noticed fewer purchases outside of the necessities.
For Lowe's and Home Depot, however, the time of year adds significance. Spring is the biggest sales season for home improvement.
The companies are not only competing for shoppers' dollars as higher prices for groceries and more take up more of household budgets. They also are dealing with a shift in demand, as the spree of Covid pandemic-fueled home projects fades and consumers juggle other spending priorities, such as commutes, summer vacations and meals at restaurants.
Lowe's competitor, Home Depot, posted a rare revenue miss with its quarterly report last week. The company missed sales expectations for the second consecutive quarter and cut its full-year forecast, as customers skipped big-ticket items like grills and opted for smaller, less expensive home projects.
Like Lowe's, Home Depot also chalked up lower sales to colder and wetter weather in the western U.S. and falling lumber prices.
Shares of Lowe's closed Monday at $203.15, bringing the company's market value to $121.15 billion. Its stock is up nearly 2% so far this year, trailing the S&P 500's gains of 9%.
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Consumer & Retail
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Government To Invite Proposal From Startups, MSMEs Others To Promote R&D In Mining
The selected startups and MSMEs will be provided mentorship or incubation support and technical advisory support during the entire project development period.
The mines ministry on Wednesday said it will invite proposals from startups, micro, small and medium enterprises (MSMEs) and individual innovators in a bid to promote research and innovation in the mining, mineral processing, metallurgy, and recycling sector.
The selected startups and MSMEs will be provided mentorship or incubation support and technical advisory support during the entire project development period.
Besides from the date of technical completion, the selected startups and MSMEs will be provided additional two years of incubation support by a facilitation and mentorship team under the implementing agency.
The Centre has decided to promote research and innovation in startups and MSMEs and "has brought out guidelines for promotion of Research and Innovation in Startups and MSMEs in mining, mineral processing, metallurgy and recycling sector (S&T-PRISM)."
"Proposals will be invited from startups, MSMEs and individual innovators for up to two years duration, which has a direct bearing on the mineral sector, applied and sustainable aspect of mining and industrial applications, for funding," the mines ministry said in a statement.
This will enable them to graduate to a level where they will be able to raise investments or they will reach a position to seek loans from commercial banks, and financial institutions.
The funding is positioned to act as a bridge between the development and commercialisation of innovative technologies, products, and services in a relatively hassle-free manner.
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Energy & Natural Resources
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Labour leader Sir Keir Starmer's refusal to abolish the two-child limit on claiming some benefits will be challenged at a meeting of the party's policy body this weekend.
Sir Keir has faced a backlash from across his party over the issue.
Labour's National Policy Forum brings together trade union, party members and shadow cabinet representatives.
The meeting, held behind closed doors in Nottingham, is an important staging post in drawing up the next manifesto.
However, policies agreed there will not automatically be included.
The content of six policy documents will be finalised and sent to the party's annual conference in October.
The party leadership has already accepted some amendments to the draft documents - including restating the commitment to rail nationalisation and improving the provision of early years education - though without a spending commitment attached.
But a range of other proposed changes have not been agreed, and will be up for debate - including on welfare.
Both the county's largest union, Unison and the shop workers' union Usdaw are backing an amendment to "end the punitive features" of the benefit system, including specifically the benefits cap and the two-child limit.
The cap, which came into force in 2017, restricts child tax credit and universal credit to the first two children in a family, with only a few exceptions.
The Child Poverty Action Group estimates removing the limit would cost £1.3bn a year but would lift 250,000 children out of poverty overnight.
Sir Keir told the BBC's Sunday with Laura Kuenssberg the policy would not change under a Labour government.
Although he did not give a reason during the interview, members of his shadow cabinet said it was because this would constitute an unfunded spending commitment.
The leadership wants to establish economic credibility above all, and avoid giving the Conservatives the ammunition to run a "Labour's tax bombshell" campaign, which proved so successful in 1992 - also after 13 years of Tory government.
Sir Keir's critics fall in to two camps - both of which go beyond his usual detractors.
The first involve those who want to see the policy changed - from Unison, which nominated Sir Keir for the leadership, to some former shadow ministers, to Labour's moderate leader in Scotland, Anas Sarwar.
The second group - who are muttering privately rather than publicly - are with the programme when it comes to refraining from uncosted commitments.
This includes some serving shadow ministers.
Their view is roughly this:
That Sir Keir committed to not changing a Conservative policy in his interview with the BBC on Sunday.
They feel instead - like deputy leader Angela Rayner and shadow work and pensions secretary Jonathan Ashworth - he could have denounced the policy, but simply explained the money was not there to change it yet, as the Conservatives have crashed the economy.
They feel that approach would have left the door open to addressing the issue when or if the economy improves, and therefore have avoided the current row.
Sir Keir, though, will be aware that the two-child limit is far less unpopular with potential voters than it is with party members.
But a shadow cabinet ally of Sir Keir's denied that he had attempted to throw potential voters in former Labour strongholds in the Midlands and northern England - known as the "red wall" - some red meat.
The ally insisted Sir Keir was absolutely committed to tackling child poverty and that his robust response on the issue was simply to quash any speculation that an unfunded commitment could be wrung out of him.
But there is a wider frustration that while Labour is attacking the government's record - for example, on child poverty - shadow ministers are constrained in proposing solutions.
At the policy forum this weekend, there will also be a push by some unions and left-wing delegates in particular for the party to commit to free school meals for all primary school children in England.
The left-wing group Momentum will be pushing for a more radical agenda across the board this weekend - from public ownership to rent controls and increasing international aid.
They are unlikely to win many victories but in alliance with the unions their hope is that on benefits and school meals, the leadership will be given a clear message.
There are many in the party that would not sign up to some of Momentum's preferred policies.
But there is a wider concern in Labour's ranks about whether the party's programme can inspire, and not just reassure, potential voters.
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United Kingdom Business & Economics
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Senior sister A&E nurse Emma Chapman has received two parking fines so far this week as the nearby car park only allows people to pay for 12 hours, amid calls to extend the timeNurse Emma Chapman with her parking finesA nurse was left in tears after being given parking fines as she regularly worked longer than her 12 hour shift, before kind strangers stepped in to pay the bill. Emma Chapman received two fixed penalty notices so far this week, despite paying to park £12.50 at the council-run Oldchurch Rise car park near Queen’s Hospital in Romford. The issue arose as the senior sister A&E nurse regularly works saving lives for longer than the maximum 12 hours the tickets last for. Staff members regularly have to rush out to pay another £12.50 to avoid being slapped with tickets, although doctors, nurses and porters are often too busy to pop to their cars. Emma pays £12.50 to park her car, but often overruns the maximum time limit because she is still working (
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Susannah Ireland) When Emma’s husband posted about the issue on a professional networking site, several people stepped in to pay the bill. The 40-year-old told the Metro: “When I came home after getting the ticket again, I was in tears because I was so angry that this keeps happening. “After a busy shift treating patients in corridors and feeling disheartened by not being able to give the proper care they need, to come out and see a parking ticket on your car feels so demotivating. Emma felt demotivated (
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Susannah Ireland) “They only allow people to park up to 12 hours, whereas we are working 13-hour shifts, and I can’t just drop everything to move my car because I might be dealing with an emergency.” She has now asked her local council to extend the maximum parking times for those working at the hospital to return to their cars and not find fines. Emma's husband said it was 'beyond belief' (
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Susannah Ireland) Husband Lee told the Havering Daily: “My wife, like most nurses, is under constant pressure and their work load really is unbearable. “She had finished a 13 hour shift and it had been a really difficult one that had left her upset. All she needed was to return to her car and find that she had received her third parking ticket in the space of a week. The issue has affected several people from Queen's Hospital in Romford, east London (
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Susannah Ireland) “It is beyond belief.” The news of Emma’s fines came on the second day of mass walkouts by nurses from more than 55 NHS trusts in England over pay. On Wednesday, the GMB union said more than 10,000 ambulance workers – including paramedics, emergency care assistants and call handlers – will stage strikes on February 6, February 20, March 6 and March 20. The news was shared by Emma's husband Lee (
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Susannah Ireland) Nurses are also due to strike on February 6. Havering’s Leader of the Council, Councillor Ray Morgon said: “We appreciate all the incredible work our nurses are doing and we will act on this straight away. “We will carry out a review and see how we can resolve this situation for our nurses. “We will work with officers and have a look at Oldchurch Rise car park to see how we can help going forward and support our nurses.” The staff car park outside Queen's Hospital in Romford (
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Susannah Ireland) A spokesperson from Havering Council said: “We understand receiving a parking fine can be frustrating, but our enforcement officers can only work with the information they have. "In two of these cases, the resident paid for her parking in two to three hour intervals using the parking app, and unfortunately the payment record hadn’t been updated on our enforcement officers devices in time, therefore PCNs were issued in error. "These have now been appealed and cancelled. Cars in the car park, where Emma has asked for maximum times be extended (
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Susannah Ireland) “The car park in question does have a 12 hour limit, which we understand can be difficult for some hospital staff. "We are currently speaking with the hospital to see what options we can put in place to avoid this issue in future. "The car park is used by hospital staff, including nurses, as well as patients and visitors, so at present, we have no way of knowing which vehicles belong to staff.” Read More Read More Read More Read More Read More
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Workforce / Labor
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Image caption, Members of the Old Hall community, which dates back to 1974, are aged from one to 95A group of 60 people who live together in a large house say they are thriving during the cost-of-living crisis. The Old Hall community share a former friary in East Bergholt, Suffolk, where they live off 65 acres (26 hectares) of land.They are working towards self-sufficiency in energy and food, with group meals prepared on a rota system.The manor house has 130 rooms, shared between 44 adults and 15 children plus volunteers and guests.Image caption, David Hodgson, 74, moved to the community in 1988 and has lived in a two room unit there ever sinceDavid Hodgson has lived at Old Hall since 1988. He raised two children there and worked locally three days a week as a design lecturer, before retiring early to look after the orchards, where he is responsible for 75 apple trees and 30 plum and pear trees. "Because we work collectively and we pool our resources together - we've got someone with lawyer skills, someone with architecture skills, people who can do thatching and lay hedges, builders and plumbers - it is more economically viable and it takes the stress away," he says from the armchair in his cosy unit.David, who is 74, says he feels sorry for people his age living alone, who don't have a "fantastic social life" like him."They're very lonely and that is a terrible thing," he says. "I've always got people to talk to, like interesting volunteers from places like France, Spain, Thailand, Japan and America."Image source, David HodgsonImage caption, The group hosts volunteers, including this team of four who spent the summer working in the orchardOld Hall, which dates back to the 16th Century, was a convent, an army barracks and a friary before it was bought in 1974 by 14 families who formed the community. Some of the original members still live there, including the current eldest resident, who is 95.During Covid, they closed their doors and imposed their own lockdown earlier than the government, meaning they kept all of their elderly members safe.Every resident does around 15 hours of work a week in the house or gardens, from cleaning and gardening to milking the cows and looking after the sheep, pigs, chickens and bees. They make their own butter, cheese and yoghurt and grow their own wheat for bread.Many of the members also have part-time paid employment outside the community. "Most people find they only need to work a few days a week to pay their bills because they are so much lower. There is never a shortage of people to look after the children when they go out to work," David says. Image source, David HodgsonImage caption, The members organise their own social events including home cinema, play readings, panto, maypole dancing, games, and music eventsImage source, David HodgsonImage caption, Social historian Ken Worpole gave a talk to the members in the Queen Anne room at Old HallA large kitchen and dining room, sewing room, ballroom, library, workshops and a chapel are all shared. Members have their own private rooms, with a family likely to have several rooms, but all bathrooms are communal, David explains.If a member wants to leave, the community has to find someone to replace them. New members must buy a share in cash which goes straight to the person leaving. In return, they get a loan stock certificate which buys into a housing association.David bought a two room unit for £19,400 in 1988, which is now worth £125,000, because Old Hall keeps in line with the house price index. He pays a monthly maintenance charge of £240 which covers gas, electricity and insurance and £80 a month for food, with no other outgoings. Image caption, Old Hall is in the middle of the village of East Bergholt in Suffolk, which has several shops and pubsImage source, David HodgsonImage caption, The members took part in an apple pruning workshop last yearEach year they elect a committee, with decisions made by the whole group during weekly Friday meetings. "We don't have a religious base - we describe ourselves as a farming, family-based community," David says. "We have to vet our members very carefully because we need people who are going to give and take and we need them to have certain skills. "Of course we do have conflicts but we work through them. We talk through issues until we reach a consensus."Helen Jolly, 46, who works part-time as a doctor at a local hospice, moved to Old Hall with her six-year-old son Robin nearly five years ago, having previously visited as a volunteer.Image caption, Helen and her son Robin moved to Old Hall nearly five years ago"It is wonderful for Robin having access to the farm, the fresh food, all the space and always having friends to play with. The friendships do become intense at times, like with siblings, and there are tensions to work through but it's a lovely way to live. Compared to mainstream life it just has so many advantages," she says.Helen, who is busy preparing lunch for the members, explains they buy any food they're not able to produce in bulk to keep costs down, and growing beans is her responsibility."We are shielded from the cost of living crisis to a large extent because we share our resources," she says. "I can't see myself return to mainstream living. I've always been someone who saw the downsides of that. This was really a natural progression for me."Image caption, Robin enjoys playing in the garden at Old Hall, which features a climbing frame, swings, wooden boat, treehouse and a denImage source, David HodgsonImage caption, The children in the community enjoy playing traditional games like sack racesSolar panels supplement their electricity usage and their water - which comes from their own borehole - is heated by a large woodfired biomass boiler they call "The Dragon".Volunteer Lara Lewington, 46, is "feeding The Dragon" with waste wood as she chats about her quest to try and make the house more energy-efficient during her six month stay.Image caption, Lara is staying at the house for six months as a volunteer, working on energy efficiencyImage caption, The house is partly powered by solar panels"The Dragon has got a water jacket around the furnace area and the water is heated by the fire inside which is then pumped down a channel underground to the house to supply hot water and the central heating system," she explains.A bell rings from the chapel meaning it's time for lunch, and the members head inside to enjoy a spread of pasta, soup and roasted vegetables.Image caption, Lalima and Robin love living with a large group of peopleIn the kitchen, 13-year-old Lalima Watling is dipping raspberries grown by her family in chocolate. She moved to Old Hall four years ago from a small house nearby and goes to the local high school. "It would be very hard to go back to normal living after this because its so sociable and there's so much open space here," she says. Lalima is hoping to be a graphic designer when she grows up, but she can't see herself living traditionally in the future."I don't think I will ever live any other way again. I really believe that communal living is how humans are supposed to live."Find BBC News: East of England on Facebook, Instagram and Twitter. If you have a story suggestion email eastofenglandnews@bbc.co.ukRelated Internet LinksThe BBC is not responsible for the content of external sites.
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Real Estate & Housing
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- Sweden-based online fashion retailer Bootz AB blocked 42,000 customers for returning too many items.
- The retailer said the customers' actions were too costly for the company and the environment.
- Bootz's policy is part of a larger trend among retailers who are charging customers for making too many returns.
An online fashion retailer has blocked 42,000 customers from its site after the company said they returned too many items they had purchased.
Sweden-based Bootz AB said the returns were too costly for the company and for the environment.
Bootz's policy is part of a larger trend among retailers who are holding customers accountable for making too many returns, as Insider's Avery Hartmans recently reported. While levying these measures against customers isn't new, shoppers are making more returns than ever before, Insider reported.
And processing those returns can be expensive for retailers: Online orders can cost 21% of an order's value, analyst Zak Stambor wrote in an Insider Intelligence report.
Some retailers are now wanting customers to shoulder the cost of returns, by charging them fees to make those returns, Insider's reported. Amazon, TJ Maxx, and Abercrombie & Fitch, are just a few brands that are charging customers who make online returns.
Ask Kirkeskov Riis, a spokesman for Bootz, the multi-brand e-commerce webstore selling clothes and beauty products, said customers who were indefinitely blocked had sent back items either because they don't fit or because they regretted the purchase.
He said these customers "repeatedly exploit the high service levels of free shipping and returns at the expense of our business, other customers and the environment." In an email to The Associated Press, he said they represented less than 2% of "the more than 3 million customers on Boozt" but around 25% of the total return volume.
"By pausing these accounts and reducing unnecessary returns, Boozt saved approximately 791 tons of CO2 in 2022 which has eliminated the need for approximately 600 delivery trucks during one year," he said.
Some retailers are taking a different approach, including offering customers discounts in exchange for those customers holding onto the items they ordered, Insider reported.
But for many customers, convenient and affordable returns are part of their shopping habits — and retailers like Target and Nordstrom lean into promoting generous return policies to rope in loyal customers. Those ingrained customer habits could be hard for some consumers to break.
As Insider Intelligence's Stambor put it: "If you don't provide a good returns process, they'll go elsewhere."
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Consumer & Retail
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Allison Dinner/AP
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Preschool teacher Jaqueline Benitez depends on California's Supplemental Nutrition Assistance Program (SNAP) to help pay for food. If the debt ceiling isn't raised, SNAP and other federal payments would be delayed. (AP Photo/Allison Dinner)
Allison Dinner/AP
Preschool teacher Jaqueline Benitez depends on California's Supplemental Nutrition Assistance Program (SNAP) to help pay for food. If the debt ceiling isn't raised, SNAP and other federal payments would be delayed. (AP Photo/Allison Dinner)
Allison Dinner/AP
If the U.S. defaults on its debt, the fallout could be huge for Americans.
And not just for retirees who may not get Social Security payments on time, or military veterans who may have trouble accessing benefits, or federal employees and contractors who may see a lag in payments owed to them. The cost of borrowing money would soar, making it harder for everyone to buy homes, cars, or pay off credit card debts.
It could make things worse for families at a time when many are already under financial strain. Inflation remains high, and Americans have racked up almost $1 trillion in credit card debt. That's up 17% from a year ago, according to the Federal Reserve Bank of New York.
The Treasury Department says Congress has until June 1 to raise the federal debt limit. With negotiations still going and time running out, here are some ways to prepare your finances for a worst-case debt default scenario.
Tried and true basics
"We're advising people to prepare for a potential default as you would for an impending recession," says Anna Helhoski of NerdWallet.
That means tamping down on excess spending, making a budget, and shoring up emergency savings to cover at least three months of living expenses.
Since a debt default would likely send interest rates soaring, any credit card debt you're saddled with may soon cost you more. Personal finance experts advise paying off those debts with the highest interest rates as quickly as possible.
While tightening finances, you may find that keeping up with car payments or a home mortgage will become a struggle. Helhoski recommends reaching out to lenders early to discuss any options for lowering payments, adding that the U.S. Department of Housing and Urban Development has "housing counselors who can also help homeowners explore any alternatives to delinquency and anything that would have long lasting impacts on their credit."
Al Bello/Getty Images
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Retirees should aim to have a year's worth of essential spending at their disposal, unbound from any longer-term investments, since they "may not have a [Social Security] check anymore," says Rob Williams, managing director of financial planning and wealth management at Charles Schwab.
Al Bello/Getty Images
Retirees should aim to have a year's worth of essential spending at their disposal, unbound from any longer-term investments, since they "may not have a [Social Security] check anymore," says Rob Williams, managing director of financial planning and wealth management at Charles Schwab.
Al Bello/Getty Images
Don't panic
The stock market will certainly take a hit if the U.S. defaults on its debt. At moments, the losses could seem significant to anyone with investments or retirement accounts.
But for those with diversified portfolios who aren't nearing retirement, investment experts advise that you stay the course.
"Fight your worst instinct to act on the news," says Teresa Ghilarducci, labor economist and retirement security expert at The New School. "All the academic research shows that if you buy and hold, you will do so much better than if you try to follow market trends, whether that be responding to an economic crisis or a recession."
Historically, markets have roared back after major declines. Stocks rebounded following the Arab oil embargo in the 1970s, Black Monday in the '80s, the dot-com bubble of the early aughts, and certainly the 2008 financial crisis, according to an analysis by MFS Investment Management of market recoveries dating back to the Great Depression.
Act fast, or postpone big purchases
If you're in the market for a new car or home, what you can afford today may be well beyond reach in a matter of weeks. It may be wise to close that deal on a new car now. And make sure your interest rate is locked in, if you are working towards closing on a home.
Real estate website Zillow estimates mortgage rates could reach 8.4% in the event of a default, which would send a chill through a housing market already on ice thanks to the interest rate hikes of the last year.
"You'll see a dramatic drop in buyers and when that happens, then you're going to see property prices fall, a halt on different construction and home improvement projects," says Artin Babayan, a home loan officer based in Los Angeles.
By some estimates, housing activity accounts for nearly a fifth of the U.S. economy. A stall in the real-estate market would reverberate, Babayan notes.
"I think it'll really screw up the economy," he adds.
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Interest Rates
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Douglas Mrdeza
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Amazon faces a landmark federal lawsuit that accuses it of squeezing independent sellers like this Michigan company, Top Shelf Brands, which used to sell hair and beauty products on the platform. In 2022, the company stopped operating and filed for bankruptcy.
Douglas Mrdeza
Amazon faces a landmark federal lawsuit that accuses it of squeezing independent sellers like this Michigan company, Top Shelf Brands, which used to sell hair and beauty products on the platform. In 2022, the company stopped operating and filed for bankruptcy.
Douglas Mrdeza
Suavecito was the first product that Douglas Mrdeza listed to sell on Amazon back in 2014. He had ordered a bit too much of the specialty hair pomade for his barbershop in East Lansing, Michigan. He wanted to see whether he could offload some online.
It sold out. So, he ordered more. This time he paid Amazon some extra money to use its warehouse storage and shipping service.
"I did the calculation, bought what would have sold in a month and sent it in," Mrdeza says. "And it sold out in like a day."
He was hooked. He started selling more hair and beauty products on Amazon. Soon that part-time hustle became his full-time business, Top Shelf Brands. Within a couple of years, Mrdeza had more than 40 employees, ran four warehouses and was bringing in $10 million in revenue, he says.
"It was thriving, for sure," Mrdeza says. "We were all in."
Douglas Mrdeza
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Douglas Mrdeza's Amazon store took off after it launched in 2014. But by 2022, it was bankrupt.
Douglas Mrdeza
Douglas Mrdeza's Amazon store took off after it launched in 2014. But by 2022, it was bankrupt.
Douglas Mrdeza
None of it lasted. Today, Top Shelf Brands is bankrupt, its employees laid off and its warehouses shuttered. It's one of an untold number of third-party Amazon merchants that cashed in and then lost it all. And it serves as an illustration of their precarious position on Amazon, where everything can change from one day to the next.
Mrdeza's story is at the heart of a lawsuit that the Federal Trade Commission brought against Amazon in September. The suit, which was joined by 17 state attorneys general, alleges the company illegally used its monopoly power to stamp out rivals, which ultimately hurts consumers. The FTC says Amazon punishes third-party sellers that offer lower prices on other sites, strong-arms them into using its shipping service and hikes up fees indiscriminately.
William Kovacic, a law professor at George Washington University and a former chair of the FTC, says the commission's case is similar to those brought against railroad monopolies a century ago.
"There were long-standing concerns about how a company that owns a crucial asset can impose terms, conditions or restraints on third parties who also use that asset," Kovacic says. "So it's an older idea that's new again."
Amazon calls the FTC's lawsuit "wrong on the facts and the law." A company spokesman told NPR in an email that third-party sellers account for more than 60% of its U.S. sales and that "sellers are engaging with our store more than ever before." He added that those sellers that "purchase optional services from Amazon do so because they provide more value than they can get elsewhere."
Amazon's "optional services"
Top Shelf Brands started to tank in 2018.
"There was just a lot of moving pieces," Mrdeza says. "They all kind of stemmed back to the way Amazon is both the marketplace and a competitor."
While Amazon opens up its platform for anyone to sell for a small commission fee, it's also trying to hawk its own products. According to the FTC's lawsuit, Amazon uses several tactics to make sure its goods stay front and center. And when a third-party seller's product skyrockets on the platform, Amazon will often swoop in and sell the same thing.
This happened to Mrdeza with many of his beauty products. It also happened to seller Nicholas Parks, who's based in Alabama and has an Amazon shop called SnobFoods. It has pantry items like hot sauce, barbecue sauce and mixed spices.
He'd been selling Valentina brand hot sauce for more than a decade when Amazon began selling it too. Amazon could sell it for cheaper, put itself at the top of search queries and not pay the fees for shipping and delivery since it owns those networks, Parks says.
Nicholas Parks
toggle caption
Nicholas Parks, president of SnobFoods.com, poses in a warehouse where he stores hot sauces that he sells on Amazon.
Nicholas Parks
Nicholas Parks, president of SnobFoods.com, poses in a warehouse where he stores hot sauces that he sells on Amazon.
Nicholas Parks
"It doesn't even matter if I've sold it for 10 or 15 years. Once Amazon starts selling it, I'm just closed out of the market for that product," Parks says. "Right now, I have like seven or eight pallets of Valentina in my warehouse."
When Parks tallies up the fees for the "optional services" he pays to Amazon, including high-up search placement, warehousing and shipping, he says at least half of what he earns on the platform goes to Amazon. And if he tries to sell a product for a lower price on another platform, Amazon can yank his listing or bury it in the platform's search results.
"You can't compete head-on in any relevant way," Parks says.
Lindsay Windham, who co-founded the high-end leather accessory brand Distil Union and has a shop on Amazon, says her listings were shuttered twice on the site. One time, her bestselling item was pulled during the busy holiday season and it took nearly a month to get it relisted. She says that involved a ton of emails and calls to customer support.
Ultimately, Amazon acknowledged it was a mistake in both instances, she says.
"The default shouldn't be to shut a product off," Windham says. "It should be to look into the issues."
She says when this happens, sellers aren't allowed any contact with their customers.
"We have no access to consumer information, customers' information, so we can't follow up to provide customer support and we can no longer reply to reviews," Windham says.
"Hard to break that mold"
Amazon dominates online retail in the United States. It covers more than 40% of online shopping, and around two-thirds of U.S. adults subscribe to Amazon Prime, according to private and government research. The company has also built one of the largest delivery systems in the country, with an extensive network of warehouses, air hubs and trucking operations.
All this has made Amazon one of the world's most valuable corporations, worth $1.3 trillion.
Stacy Mitchell researches corporate power as the co-director of the Institute for Local Self-Reliance. She has spent years studying Amazon's business model and has worked with dozens of sellers. Mitchell supports not only the FTC's lawsuit but also a larger breakup of Amazon. She says more competition would make the company strive to be better.
"The idea of a breakup isn't to break Amazon as a convenient way to shop, but rather to save Amazon from itself," Mitchell says. "Otherwise, we're just going to see a diminishing of our experience online. ... When you have this kind of monopoly power, you don't have to work for it."
When Mrdeza, the Michigan barber, couldn't keep up with competition from Amazon for his beauty product business, he pivoted. He had employees to pay and warehouses to fill. He also liked selling stuff. So he started hawking sporting goods and toys — also on Amazon.
"It gets people that are entrepreneurs and have that mindset to go all in, because they know once you've gotten accustomed to doing things this way, it's very hard to break that mold," Mrdeza says.
But with the sporting goods and toys, he says, the financial margins just weren't there. In 2022, Top Shelf Brands stopped operating and filed for bankruptcy.
"You can be nimble. And we were definitely nimble," Mrdeza says. "But there's only so much you can do."
NPR's Alina Selyukh contributed to this report.
Editor's note: Amazon is among NPR's financial supporters and pays to distribute some of our content.
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Consumer & Retail
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AAA will not renew the auto and home insurance policies for some customers in Florida, joining a growing list of insurers exiting the Sunshine State amid a growing risk of natural disasters.
"Unfortunately, Florida's insurance market has become challenging in recent years," the company said in a statement emailed to CBS MoneyWatch. "Last year's catastrophic hurricane season contributed to an unprecedented rise in reinsurance rates, making it more costly for insurance companies to operate."
AAA declined to say how many customers won't have their policies renewed, saying only that the change will affect "a small percentage" of policy holders.
The company is the fourth insurer over the last year say it is backing away from insuring Floridians, a sign extreme weather linked to climate change is destabilizing the insurance market. On Tuesday,it will no longer offer coverage in the state, affecting roughly 100,000 customers.
Farmers said the move will affect only company-branded policies, which make up about 30% of its policies sold in the state.
Bankers Insurance and Lexington Insurance, a subsidiary of AIG, left Florida last year, saying recent natural disasters have made it too expensive to insure residents. Hurricanes Ian and Nicole devastated Florida in 2022, causing billions of dollars in damage and killing a total about about 150 people.
Under Florida law, companies are required to give three months' notice to the Office of Insurance Regulation before they tell customers their policies won't be renewed.
Soaring homeowner costs
Already, homeowners in the state pay about three times as much for insurance coverage as the national average, and rates this year are expected to soar about 40%.
Insurance companies are leaving Florida even as lawmakers in December passed legislation aimed at stabilizing the market. Last year,that, among other things, creates a $1 billion reinsurance fund and puts disincentives in place to prevent frivolous lawsuits. The law takes effect in October.
AAA said it's encouraged by the new measure, but noted "those improvements will take some time to fully materialize and until they do, AAA, like all other providers in the state, are forced to make tough decisions to manage risk and catastrophe exposure."
Insurers are staging a similar exodus in California, where AIG, Allstate and State Farm have stopped taking on new customers, saying thatof underwriting policies.
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Real Estate & Housing
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The UK faces another five years of high interest rates to stem rising prices, an influential global group has warned.
The International Monetary Fund expects the UK to have the highest inflation and slowest growth next year of any G7 economy including the US, France, Germany, Canada, Italy and Japan.
However, the Treasury said recent revisions to UK growth had not been factored in to the IMF's report.
The outlook was drawn up before this weekend's developments in Israel.
Forecasts are never perfect given the many factors that affect economic growth - from geopolitics to the weather. But such reports can point in the right direction, especially where they align with other forecasts.
The IMF, an international organisation with 190 member countries, has said the forecasts it makes for growth the following year in most advanced economies have, more often than not, been within about 1.5 percentage points of what actually happens.
According to the IMF's latest forecast which it produces every six months, it expects the UK to grow more quickly than Germany in 2023, keeping the UK out of bottom place for growth among the G7.
But it downgraded the UK's prospects for growth next year, estimating the economy will grow by 0.6%, making it the slowest growing developed country in 2024 - widely predicted to be a general election year.
The IMF says the UK's immediate prospects are being weighed down by the need to keep interest rates high to control inflation, which has been falling but remains stubbornly above target.
The theory behind raising rates is that it makes it more expensive for people to borrow money, so households will cut back and buy fewer things. It also might mean that firms will raise prices less quickly.
But it is a tricky balancing act, as raising rates too aggressively can cause people to cut back on their household spending, hitting businesses and economic growth.
The IMF expects inflation to be higher in the UK than in any other G7 country both this year and next year.
It believes Bank of England rates will peak at 6% and stay around 5% until 2028. Rates are currently 5.25%.
"The decline in [UK] growth reflects tighter monetary policies to curb still-high inflation and lingering impacts of the terms-of-trade shock from high energy prices," the report said.
In response, Chancellor Jeremy Hunt said: "The IMF has upgraded growth for this year and downgraded it for next - but longer term they say our growth will be higher than France, Germany or Italy.
"To get there we need to deal with inflation and do more to unlock growth," he said.
Global prospects
The attack by Hamas, the Palestinian militant group, on Israel is likely to overshadow an annual gathering of the IMF and the World Bank taking place in Marrakech, Morocco.
The IMF is already warning of signs of a slowdown in the world economy after what appeared to be a resilient start to the year.
For example, tourism had recovered following the pandemic, boosting economies with large travel and tourism sectors such as Italy, Mexico and Spain.
But a slowdown in interest-rate-sensitive manufacturing sectors was dragging on growth and there were signs that China's momentum was fading following its "reopening surge" at the start of 2023.
Global inflation had more than halved from its peak of 11.6% in the second quarter of 2022 to 5.3% a year later, the IMF said
Global growth is projected to fall from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024.
Moreover, the long-term impacts of three years of crises and rising prices had increased the number of people in absolute poverty around the world by up to 95 million, the report said.
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Interest Rates
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Northern voters believe the UK’s failure to build rail infrastructure is “baffling” and is damaging efforts to close the region’s economic divide with the South, a focus group suggests.
Some of the voters, from several constituencies in the Leeds area, said the cancellation of the HS2 high-speed rail link to the city was “a kick in the teeth”, and suggested it made them “question the overall economic situation” in the area.
They also expressed cynicism about “regular overpromising and under-delivery” from the Government, given that the city was promised both HS2 and Northern Powerhouse Rail (NPR) in full only to see those pledges watered down in the Integrated Rail Plan of 2021.
The focus group by Field Research on behalf of the High-Speed Rail Group of firms with expertise in the field came after Prime Minister Rishi Sunak was accused of attempting to “muddy the waters” ahead of next year’s expected election after another apparent U-turn on the rail links.
In July, the Department for Transport (DfT) announced it would re-examine plans to snub Bradford from Northern Powerhouse Rail (NPR) and Leeds from HS2 following criticism from the Commons Transport Committee and northern leaders.
But industry insiders and sources close to northern leaders suggested the move was part of the Prime Minister’s attempts to shore up his vote in “Red Wall” seats following a backlash at the scaling back of both projects, pointing out there was “no new money”.
The focus group showed the cynicism was matched by voters in Leeds, who insisted transport investment “should be the number one priority for the Government” in addressing the North-South divide.
The exclusion of the city from HS2 was also perceived to indicate a wider disregard for the North.
“It wasn’t surprising, but what a kick in the teeth for the North when they said HS2 wouldn’t reach Leeds,” one voter said.
Voters also noticed the “star difference between rail services in the UK and other European countries”, a view likely to have been informed by the fact that Leeds is the largest city in Europe without a mass transport system.
A Department for Transport (DfT) spokeswoman said: “We remain committed to better connecting the Midlands and North through record investment in rail.
“Construction of HS2 is well underway, and as part of our £96bn Integrated Rail Plan we’re actively exploring the best way to run HS2 services to Leeds.”
:: Field Research carried out four focus groups in the Leeds city region on 14 and 15 June. Each group consisted of six participants from constituencies in the area. The age of participants in the groups ranged between 21 and 55, with a mix of occupations and relationship status, as well as voting intentions reflective of the constituencies.
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United Kingdom Business & Economics
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The latest fashion trend in the UK seems to be brands charging customers to return items. While that sucks for consumer pocketbooks, it probably has a positive environmental impact. Free returns come with an environmental cost, namely more pollution and waste.
H&M is the latest brand to start charging for returns in the UK, BBC reported today. It joins Zara, Uniqlo, and several other clothing brands cutting their own costs by nixing free returns. The parent company that owns Zara, Inditex, and H&M make up the two biggest clothing retailers worldwide. If these policies start gaining traction outside of the UK, they could make a significant dent in the fashion industry’s environmental footprint.
Before you buy a thing, it has probably been on a lengthy journey by sea, air, truck — maybe even all three. That journey creates greenhouse gas emissions heating the planet and local air pollution (especially for what tend to be low-income communities of color near warehouses). Returning the product extends its journey, creating even more pollution. And there’s a good chance its final destination will be a landfill since it can be cheaper for a company to chuck the unwanted item rather than sell it again.
The popularity of online shopping with free returns has encouraged people to use their homes like dressing rooms. It’s easy to buy a product online, try it on at home, and then return an unsatisfactory item. And that has taken a growing toll on the environment. In the US, carbon dioxide emissions from hauling around returned goods grew from 15 to 24 million metric tons of CO2 between 2019 and 2022. That’s roughly equivalent to the climate pollution from more than 5.3 million gas-guzzling cars last year.
Around half of online purchases are returned, The Guardian reports. But that doesn’t mean the items go back on the shelf; half of those returned products go up for sale again in the US. Nearly 10 billion pounds of returned merchandise wound in landfills in the US last year, according to one estimate.
Disincentivizing returns is one way companies can cut down on that waste and their greenhouse gas emissions. They can also give consumers more accurate and detailed information about products they market online. That might be able to stave off some returns by giving customers a better idea of what they’ll be getting in real life once a package gets to their door.
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Consumer & Retail
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Beijing says upwards of 150 countries stretching from Uruguay to Sri Lanka have signed up to the BRI, a vast global infrastructure push unveiled by President Xi Jinping a decade ago.
The first decade of the initiative saw China distribute huge loans to fund the construction of bridges, ports and highways in low and middle-income countries.
But much more than half of those loans have now entered their principal repayment period, said a report released Monday by AidData, a research institute tracking development finance at Virginia's College of William and Mary.
That figure is set to hit 75 percent by the end of the decade, it added.
Crunching data compiled on Chinese financing of almost 21,000 projects across 165 countries, AidData said Beijing had now committed aid and credit "hovering around $80 billion a year" to low and middle-income nations.
The United States, in contrast, has provided $60 billion to such countries a year.
"Beijing is navigating an unfamiliar and uncomfortable role -- as the world's largest official debt collector," the report said.
"Total outstanding debt -- including principal but excluding interest -- from borrowers in the developing world to China is at least $1.1 trillion," AidData said.
AidData, it added, "estimates that 80 percent of China's overseas lending portfolio in the developing world is currently supporting countries in financial distress".
Proponents of the BRI praise it for bringing resources and economic growth to the Global South.
But critics have long pointed to opaque pricing for projects built by Chinese companies, with countries including Malaysia and Myanmar renegotiating deals to bring down costs.
And AidData said China has in recent years suffered reputational damage among developing countries, with its approval rating falling from 56 percent in 2019 to 40 percent in 2021.
But China is "learning from its mistakes and becoming an increasingly adept crisis manager", the study said.
Beijing is seeking to de-risk the BRI by bringing its lending practices more in line with international standards, it stressed.
But also among those methods are "increasingly stringent safeguards to shield itself from the risk of not being repaid", it said.
That includes allowing key BRI lenders to pay themselves principal and interest due by "unilaterally sweeping" borrowers' foreign currency reserves held in escrow.
"These cash seizures are mostly being executed in secret and outside the immediate reach of domestic oversight institutions... in low- and middle-income countries," it said.
"The ability to access cash collateral without borrower consent has become a particularly important safeguard in China's bilateral lending portfolio."
At a major summit in Beijing last month marking the project's tenth anniversary, Xi said China would inject more than $100 billion of new funds into the BRI.
But a joint report this year by the World Bank and other institutions, including AidData, said Beijing had been forced to hand out billions of dollars in bailout loans to BRI countries in recent years.
The initiative has also drawn scrutiny for its massive carbon footprint and the environmental degradation caused by massive infrastructure projects.
Tuesday, 07 Nov, 2023
- India Looks to Fast-Track Tesla Approvals by Jan
India is pulling out all the stops to get Elon Musk’s Tesla to the country with government departments working to provide all the required approvals by January 2024.Big-Bang Luxury Sales Add to Diwali Shine
What are you gifting your loved ones this Diwali? High-end stuff is hot, apparently. From desserts to bags and jewellery, sales of luxury items are surging, driven by a flourishing economy, according to retailers and companies.IT Pays? Now Not Much Higher for the New Hire
Salary hikes for technology workers switching jobs have dropped by nearly half from the previous financial year as top IT exporters reduce intake amid slowing demand for tech services globally.
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Asia Business & Economics
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Biden to reinstate labor rule shelved by Reagan, giving construction workers a pay boost
WASHINGTON – In a nod to labor unions, President Joe Biden is moving to boost wages for construction workers on projects paid for with federal funding, a step that would appeal to a key constituency ahead of next year’s presidential election and potentially shrink the pay gap between northern and southern states.
The Biden administration said Tuesday it intends to restore a definition of the “prevailing wage” that was abandoned four decades ago by Ronald Reagan. The update would change how the prevailing wage is calculated and could put thousands of extra dollars every year in the pockets of construction crews working on federal projects.
“Many workers are paid much less than they deserve, much less than the value of their work – and not just by a little, in some cases thousands of dollars a year,” Vice President Kamala Harris, who announced the rule update, said Tuesday at an event at the Finishing Trades Institute in Philadelphia.
“That is wrong, obviously, and completely unacceptable,” Harris said.
The announcement of the rule change comes as the Biden administration is pouring billions of federal dollars into new clean energy investments through the Inflation Reduction Act, which passed Congress last year, and into roads, bridges and other public works projects through a separate infrastructure law.
Companies in red-leaning states, many with laws hostile to unions, have disproportionately received incentives for manufacturing projects in wind, solar, batteries, electric vehicles and other areas that support clean energy.
Organized labor has raised concerns that some of the green jobs created through the new law are going into parts of the country with nonunion workforces. Labor groups are in favor of updating the labor rule as a way to boost the pay for workers in those areas. The Laborers’ International Union of North America said the update would protect the wages of millions of construction workers.
Prevailing wages are the basic hourly rate of pay and benefits paid to workers in a particular area. Before Reagan changed the federal rule in the 1980s, employers were required to pay construction workers on federal projects the equivalent of wages paid to at least 30% of workers in a given trade in a specific geographical area. Reagan changed that rule so that the prevailing wage was determined by wages paid to 50% of workers.
Biden plans to restore the previous definition used under the Davis-Bacon Act, the 1931 federal law that requires the payment of prevailing wage rates to all laborers and mechanics on federal or federally assisted construction contracts. The Davis-Bacon Act and its related acts apply to more than $200 billion in federal and federally assisted projects every year.
Reverting to the previous definition means the prevailing wage on federal projects would more closely align with union scale wages. Senior administration officials who previewed the change on the condition of anonymity said the update would raise the minimum wage requirements that currently affect more than 1 million construction workers, most of whom do not have a college degree.
Analysts predicted that workers in south and southwestern states, such as Florida and Texas, would benefit most under the new rule. States in the south historically have paid lower wages and have fewer union protections.
Trade groups that oppose the change argue it will cost taxpayers more money because it would make federal projects more expensive.
“This is yet another Biden administration handout to organized labor on the backs of taxpayers, small businesses and the free market,” said Ben Brubeck, vice president of regulatory, labor and state affairs for Associated Builders and Contractors.
Brubeck said his group is considering challenging the rule change in court.
The rule update has been in the works for more than a year and will take effect 60 days after it is published in the Federal Register. A court challenge, however, could it tie up for years.
Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.
Contributing: Joey Garrison of USA Today and Olivia Evans of The Courier Journal
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Workforce / Labor
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The US Securities and Exchange Commission (SEC) has expressed concern about generative AI’s impact on financial markets.
In a speech given to the National Press Club on Monday, SEC Chair Gary Gensler said recent advances in generative AI increase the possibility of institutions relying on the same subset of information to make decisions.
Gensler said the large demand for data and computing power could mean only a few tech platforms may dominate the field, narrowing the field of AI models companies can use. If a model provides inaccurate or irrelevant information, financial institutions may end up using the same flawed data and making the same bad decisions — creating the risk of something like the 2008 financial crisis, where banks played “follow the leader” based on information from credit raters, or the Twitter-fueled run on Silicon Valley Bank. Gensler compared the potential fallout to something like the 2008 crisis, which he said demonstrated the risks of a “centralized dataset or model” in finance.
“AI may heighten financial fragility as it could promote herding with individual actors making similar decisions because they are getting the same signal from a base model or data aggregator,” Gensler said. He added that the rise of generative AI and other deep-learning models “could exacerbate the inherent network interconnectedness of the global financial system.”
The financial sector has been using AI systems for a long time. Some insurance companies and creditors deploy algorithms and natural language processing to parse through financial data before deciding loan amounts. Trading firms have relied on AI to check for fraud and check for market signals much faster than humans looking at a computer screen.
Here, Gensler focused on large language models, calling generative AI and LLMs the “most transformative technology of our time.” His speech sometimes conflated this with the more general category of AI tech — though these systems don’t all present the same risks and questions. Gensler also noted that generative AI is not yet widely used in finance.
This is not the first time Gensler sounded the alarm on AI impacting financial markets. While still at MIT, Gensler and co-author Lily Bailey wrote a paper exploring how current regulatory structures cannot address issues arising from using AI in finance.
Nor is AI regulation a new topic for the SEC. The agency established FinHub, a resources center set up to answer questions around AI, crypto, and other fintech-related issues, in 2018. It has actively pursued cases against companies in emerging technology that it feels have violated the law, especially in the crypto space.
The SEC itself also uses machine learning to aid market surveillance to enforce its policies.
Gensler said current guidelines around risk management need to be updated to keep up with new and powerful technology, but he noted there may need to be a financial industrywide rethink around how to use it.
Of course, other government agencies have also begun investigating AI companies. The FTC announced last week it opened an investigation into OpenAI.
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Banking & Finance
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- Restaurant prices outpaced grocery prices on a 12-month basis for the first time since inflation started accelerating in mid-2021.
- The price of food away from home is up 8.8% over the last year, while the price of food at home is up 8.4% in the same period, according to the Department of Labor.
- The consumer price index has risen 5% over the last 12 months as inflation continues to cool.
For the first time since inflation began accelerating in mid-2021, restaurant prices outpaced grocery prices on a 12-month basis, according to the Labor Department.
It's a blow to the restaurant industry, which has already seen lagging traffic numbers as budget-conscious consumers cut back. For months, restaurant CEOs like Cheesecake Factory's Matthew Clark and Wendy's Todd Penegor have touted their meals as a relative bargain compared to eating at home, based on the consumer price index data.
March food prices rose 8.5% over the last 12 months, fueled by the jump in the cost of eating away from home, which was up 8.8% over that period. For the third consecutive report, the price of food away from home rose 0.6% month over month.
The National Restaurant Association's Chief Economist Bruce Grindy attributed the increase to the surge in food prices at schools as free lunch programs instituted during the pandemic expired.
"As a result, this price index rose sharply in recent months, which is putting upward pressure on the overall food-away-from-home index," he wrote, adding that it's expected to keep distorting the overall food-away-from-home index until the fourth quarter.
The price of food at home is up 8.4% in the last 12 months and actually fell 0.3% from February. The price of eggs fell 10.9% in March from the prior month, while the fruits and vegetable index dropped 1.3%.
For months, grocers have been putting pressure on food and beverage manufacturers to keep prices down as shoppers deal with sticker shock, trading down to private-label brands and putting fewer items in their shopping carts. Some suppliers have listened as their volume shrinks: Conagra Brands and PepsiCo have said they won't raise prices any more this year, while Old Bay seasoning owner McCormick said it's trying to hike prices but is facing pushback from retailers.
The overall consumer price index has risen 5% over the last 12 months as inflation continues to cool. Likewise, many restaurant companies have also reported that inflation is moderating, although food, labor and construction costs remain elevated.
Olive Garden's parent company Darden Restaurants, for example, said in March that prices for chicken, dairy and grains remained high in its fiscal third quarter, although they improved sequentially. Darden is forecasting low single-digit inflation for its ingredients in fiscal 2024. The restaurant company has kept its menu price hikes below the inflation rate to attract diners and win market share.
But most restaurants have instead chosen to hike prices higher to avoid a squeeze on their profit margins. As a result, consumers have been cutting back on their restaurant visits or spending less money when they do dine out.
Restaurant industry tracker Black Box Intelligence reported that the industry saw traffic growth in only two months — January and February — over the last year. Those two months lapped last year's omicron Covid outbreaks, which led to a sharp drop in restaurant sales and traffic in early 2022.
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Inflation
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Matt Kile for KFF Health News
Matt Kile for KFF Health News
Last summer, Eloise Reynolds paid the bill for her husband's final stay in the hospital.
In February 2022, doctors said that Kent, her husband of 33 years, was too weak for the routine chemotherapy that had kept his colon cancer at bay since 2018. He was admitted to Barnes-Jewish Hospital in St. Louis, not far from their home in Olivette, Missouri.
Doctors discovered a partial blockage of his bowel, Reynolds said, but she remained hopeful that his treatment would soon resume.
"I remember calling our kids and saying, 'OK, this is all really good news. We just need to get him kind of bolstered back up and feeling well,'" she said.
But years of chemotherapy had taken a toll on his body, and he told his wife that he couldn't go on any longer.
Kent was discharged and began hospice care at home. He died the next month at age 62.
When Reynolds received the bill for the hospital stay, she paid the $823.15 it said her husband owed. She scribbled "paid" on the bill, memorializing the date, June 30, 2022 — the financial endpoint, she thought, of Kent's years of treatment.
Then the bill came (again).
The patient: Kent Reynolds, deceased, had been covered by Blue Cross and Blue Shield of Illinois through his Illinois-based employer.
Medical service: A 14-day hospital stay related to complications from colon cancer, including a partially blocked bowel.
Service provider: BJC HealthCare, a tax-exempt health system that operates 14 hospitals, mostly in the St. Louis area, including Barnes-Jewish Hospital.
Total bill: The hospital charged $110,666.46 for the stay before any payments or adjustments. The insurer negotiated that price down to $60,348.77, and Reynolds paid the $823.15 the hospital said the patient owed. Then, a year after her husband's death, she received a new version of the bill from the hospital, charging her an additional $1,093.16.
What gives: Reynolds encountered a perplexing reality in medical billing: Providers can — and do — come after patients to collect more money for services months or years after a bill has been paid.
The new bill said Kent Reynolds had been enrolled in a payment plan and that the first "monthly installment" on the nearly $1,100 balance was soon due.
She said she called both the hospital and Blue Cross and Blue Shield of Illinois in search of answers but didn't get an explanation that made sense to her.
According to Reynolds, a BJC HealthCare representative told Reynolds that the insurer had paid more than it owed, meaning the health system had to reimburse the insurer and charge the patient more.
Reynolds said she grabbed a yardstick to use as a straight edge and went line by line, comparing both bills side by side, to see what had changed, a task that evoked painful memories of her husband's last days. The amount for each individual charge — medications, lab tests, supplies, and more — was the same on both bills. The total had not changed.
Bill of the Month is a crowdsourced investigation by KFF Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!
Only three aspects of the bill had changed: the adjustments; the amount paid by the insurance company; and what the patient owed.
Adjustments, or discounts, are amounts that may be subtracted from a medical bill, typically under the provider's pre-negotiated contract with an insurer. Insurers and providers agree to lower, in-network rates for services provided to patients covered by the insurer.
Reynolds also received an EOB, or "explanation of benefits," letter showing the insurer reviewed the bill again in February, a year after the hospital stay. The document said the hospital's charges for her husband's private room — amounting to nearly $77,000 — were more than his health plan's negotiated room rates, which did not cover the full cost.
The EOB noted that the patient could still owe the hospital $50,216.31 for the room charges — a startling amount — although Reynolds ultimately received no bill indicating she owed that much.
Reynolds said she spent hours trying to understand the items on the hospital and insurance paperwork, since they used medical abbreviations and were grouped differently on the documents.
"It shouldn't be this hard for a widow to figure out what the medical bills were," said Erin Duffy, a research scientist at the University of Southern California's Schaeffer Center for Health Policy and Economics.
Blue Cross and Blue Shield of Illinois declined to comment despite receiving a signed release from Reynolds waiving federal privacy protections.
The resolution: Unclear about what had changed and how much she owed, Reynolds held off on paying the second bill. After KFF Health News contacted BJC HealthCare, Laura High, a media relations manager for the system, said the charges were the result of a "clerical error." Reynolds no longer has a balance, High said in an email in May.
"I was shocked by it," Reynolds said. "I'm convinced most of the people I know would have paid this."
High did not answer questions about the cause of the billing error or how often such errors occur.
However, Duffy provided a different explanation for the charges. "This doesn't seem like an error," she said. "It seems consistent with their insurance plan design."
She said it appeared the additional $1,100 charge — assessed a year later — represented Kent's coinsurance share of the private room charges, which she found as a recurring line item on each page of the bill under the heading "Oncology/PVT."
While his coinsurance responsibility could have amounted to 10% of what the insurer paid in room charges — potentially a huge amount — he had met his out-of-pocket payment maximum for the year, so the charges did not reach the full 10% of the room costs, she said.
The takeaway: In the United States, medical bills and insurance statements create a burdensome puzzle for patients to sort through to determine what is actually owed. The first rule of thumb is: "Don't pay the bill before you've gotten the EOB," which is the insurer's accounting of what you owe and what the insurer will pay, said Kaye Pestaina, co-director of KFF's Program on Patient and Consumer Protections.
In addition, ask for an itemized breakdown of charges and compare it against the EOB.
Medical billing experts said standardizing terms and other details on medical bills and EOBs would help patients enormously in this undertaking.
A few states have taken steps toward giving patients more information about health care charges, including by simplifying medical bills. In 2019, New York state lawmakers proposed requiring hospitals to provide patients with bills in plain language, including an itemized list of services labeled as paid by the insurer or owed by the patient. The proposal, which did not advance, required hospitals to send patients a single bill within seven days of leaving the hospital.
Reynolds' experience highlights the lack of laws and standards around how long providers have to bill — and review bills — for medical services. Insurers may dictate in their contracts how long providers have to submit claims; the Medicare program has a 12-month limit to file claims, for instance. However, Dave Dillon, a spokesperson for the Missouri Hospital Association, said no laws restrict how long providers have to send a bill to patients.
Creditors may seek payment from a deceased person's estate to collect whatever they can, said Berneta Haynes, a senior attorney at the National Consumer Law Center. In Missouri, a living spouse can be held responsible for a deceased spouse's medical bills in certain instances, said Terry Lawson, a managing attorney for Legal Services of Eastern Missouri.
Experts said they did not pinpoint anything Reynolds could have done differently, noting that it is the system that needs to change.
"When can she move on from these hospital bills?" Duffy asked.
Stephanie O'Neill Patison reported the audio story. Emmarie Huetteman of KFF Health News edited the digital story, and Taunya English of KFF Health News edited the audio story. NPR's Will Stone edited the audio and digital story.
KFF Health News, formerly known as Kaiser Health News (KHN), is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.
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Consumer & Retail
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Image source, Getty ImagesTenants in properties owned by private landlords have faced the highest rise in rent since comparable records began seven years ago, official data shows.Rents rose 4% last year as landlords, who face their own squeeze from higher mortgage rates, passed on those costs.A quarter of tenants surveyed in December said their rent had risen in the past six months, the Office for National Statistics (ONS) said.Renters proportionally spend more on housing costs than owners do.On average, they paid 24% of their weekly expenditure on housing compared with 16% by those with a mortgage, the ONS said, based on the latest figures from 2021.Myron Jobson, senior personal finance analyst at Interactive Investor, said: "Higher rents have been accompanied by higher energy bills which continues to squeeze budgets. "It is a tricky situation if you are looking for a new tenancy. Many renters could decide to remain in existing tenancy agreements with fixed rents, rather than risk a move and spend more on rent."A growing proportion of people said they were finding it difficult to afford their rent or mortgage payments, rising from 27% in late September to 31% in mid-December.Media caption, What can you do about rent increases? Watch the BBC's Lora Jones tell you, in a minute.A higher proportion (45%) of adults with mortgages reported being worried about the changes in mortgage interest rates.There has been a steep rise in mortgage costs in 2022, driven in part by the doomed mini-budget during the premiership of Liz Truss. Rates surged as the markets reacted unfavourably to promises of tax cuts without an explanation of how they would be funded.The average cost of a new, two-year fixed-rate mortgage has fallen slowly since markets stabilised, but is still much higher than it was last year at 5.78%.The ONS points out that many thousands of homeowners face sharply higher mortgage costs when their current fixed-rate deal expires.The ONS said that more than 1.4 million households would be renewing their fixed-rate mortgage this year, with 57% of them currently paying an interest rate of less than 2%. This renewal peak will come between April and June when 371,000 deals expire.Should the interest rate on a £100,000 capital and repayment mortgage, borrowed over 25 years, increase from 2% to 6%, then the monthly repayment would jump by £220, the ONS said. The same increase on a £300,000 mortgage would see monthly repayments rise by £661.The impact of higher mortgage rates is not only hitting those who are re-mortgaging, but also the prospects of first-time buyers.One young family told the BBC how they had put their home-buying plans on hold, despite having two good jobs and having saved for a deposit for five years.Kathryn Yabsley and her husband David saw their potential mortgage bill soar in the second half of the year."We had that excitement and thrill. So to just be shot down, I was in bits and my husband was disappointed too. It burst our bubble," said 29-year-old Mrs Yabsley, an NHS therapy assistant from Pembrokeshire."We're holding off to see if the rates go down and we're going to rent instead."I don't want to just survive, I want to live as well."
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Real Estate & Housing
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There are benefits to taking out federal student loans rather than private ones. For one thing, the interest rates that come with federal student loans tend to be far more competitive than the interest rates private lenders charge. And also, federal student loans come with certain protections that private borrowers aren't always privy to.
One such means of protection is forbearance, or the option to hit pause on student loan payments for a period of time without being considered delinquent on that debt. There are certain circumstances where federal student loan borrowers are automatically entitled to forbearance. On the other hand, private student loan borrowers are generally at the mercy of their lenders when it comes to forbearance.
But that doesn't mean that forbearance absolutely isn't an option with private loans. So if you're having trouble keeping up with your monthly payments, it makes sense to reach out to your lender and see what leeway you have.
Your lender might surprise you
Private student loan lenders have one goal -- to make money by collecting interest on student loans. But for this to happen, they have to actually get repaid. And if you contact your lender and let them know that, based on a change in financial circumstances, you're no longer able to keep up with your debt, they may be willing to work with you so they get their money eventually.
In some cases, that could mean that a private lender agrees to a period of forbearance. That period, however, may be brief, lasting just a few months.
Your lender might also agree to modify the terms of your student loans so that your monthly payments become more affordable. And they may prefer to go this route rather than letting you pause your loan payments completely for a period of time. Whether this makes sense might largely depend on your personal circumstances.
Let's say you're forced to take a leave of absence from work, during which time you can't repay your loans. If you expect to return to work in a few months and you're able to cover your monthly loan payments based on your salary, then forbearance might be the best route to take.
But let's say you're just plain struggling to repay your loans, and you don't see your financial situation changing for the better anytime soon. In that case, altering the terms of your repayment plan might make more sense than forbearance. And that's something your lender might agree to.
Refinancing could be an option, too
Forbearance is a route worth pursuing if your inability to pay your loans is limited to a specific period of time. But if you're generally struggling to manage those payments, it could pay to look into refinancing instead. This is an especially wise option to pursue if you happen to have great credit.
Either way, though, contact your lender and see what options they're willing to offer. You may not be entitled to the same protections as someone who took out federal student loans. But that doesn't mean your lender won't work with you in some way -- if not for your sake, then for the sake of getting repaid.
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Banking & Finance
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Subscription models for goods have become so widespread, it’s possible to live an entire life without permanently owning anything. Thank the subscription economy, kick-started over a decade ago by the likes of Netflix, Spotify, Blue Apron, and Uber, and today encompassing nearly every element of daily life. Now, you can pay for monthly access to software, news, entertainment, your work wardrobe, your morning cup of joe, and even your regular dinner out.
It’s not hard to see why. Companies can make more money selling something repeatedly than selling it just once, especially if, like would-be gym-goers, their repeat buyers forget they ever signed up, leaving sellers to collect a hefty monthly payment. The problem of forgotten subscriptions is so large there’s now a robust ecosystem of startups, such as Trim and Rocket Money, promising to save users money by ferreting out and canceling the subscriptions they forgot about.
Now, researchers have put a number on the high value of customer inertia. Buyers’ inattention can boost a business’s revenue by as much as 200%, according to a new working paper from researchers at Stanford and Texas A&M submitted to the National Bureau of Economic Research.
“I knew that people forgot to cancel,” said coauthor Neale Mahoney, an economics professor at Stanford. “The magnitude, the pervasiveness of this issue was surprising.”
Mahoney, along with fellow Stanford economics professor Liran Einav and Benjamin Klopack, an assistant professor of economics at Texas A&M, calculated the cost (or—to companies—benefit) of inattention by zeroing in on a specific moment in purchasers’ lives: replacing a credit card.
New card, who dis?
Using a large dataset from an undisclosed payment system provider, the researchers first identified 10 common subscription services, and then looked at how frequently they were renewed during normal times and when the subscriber replaced a card, forcing them to update their payment information with each service.
Renewals sharply dropped off after these card replacements, even as other shopping behavior, such as buying groceries and gas, continued normally, leading them to a conclusion: When people had to actively decide to resubscribe to a service and enter new payment information, many opted out.
Working backwards from these calculations, they estimated that “inattention increases firm revenues by between 14% and more than 200%, depending on the service.”
To be sure, the 200% figure is a maximum—most companies get somewhere between a 30% and 80% revenue boost from customers’ spaciness, said Einav. For a typical consumer, though, that still means hundreds of dollars in unwanted spending. The average American now shells out nearly $220 a month on recurring subscriptions excluding cable and utility bills, according to C+R Research (and is only conscious of about 40% of that spending).
Tried for a month, trapped for two years
That tracks with Mahoney’s personal experience. “You’ll have friends who say, ‘I should have canceled this immediately, and I ended up signing up for two years,’” he noted.
The Federal Trade Commission is now looking to crack down on businesses that count on buyers to set it and forget it. Its so-called click to cancel rule, which drew more than 1,110 comments before the comment period closed in June, would require, among other things, that recurring subscription products actively force customers to reenroll at periodic intervals. If customers were required to re-up every six months, it would cut the revenue benefits of inattention by half, the Stanford and Texas A&M researchers found.
In the meantime, consumers could benefit from scrutinizing their credit card statement every month, or follow the example of Mahoney, who told Fortune of setting up calendar reminders for himself to cancel recurring subscriptions when they stop being useful.
Still, while regular autopay is annoying to many, it’s possible to go too far in the other direction, Einav said.
Imagine, “I’m going to force you every month to go through all your subscriptions and figure out, yes, no, yes, no. If you have 15 things every first of the month, that’s kind of annoying,” he said. “It’s not clear that we want [people] to go all the way to [being] fully attentive, because people have other stuff in life.”
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Consumer & Retail
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Wall Street Is On High Alert For Cracks In Treasury-Bill Demand
The US Treasury’s ongoing barrage of bill issuance has left market participants trying to gauge when investors will lose their appetite for short-dated government debt.
(Bloomberg) -- The US Treasury’s ongoing barrage of bill issuance has left market participants trying to gauge when investors will lose their appetite for short-dated government debt.
Buyers have easily soaked up the $1.56 trillion of Treasury bills issued this year through the end of September, with the bulk coming after the government suspended the debt ceiling in June. But drainage of the Federal Reserve’s overnight reverse repurchase agreement facility, where usage has dropped by over $1 trillion as cash is allocated to T-bills, to the widening gap between yields and overnight index swaps — a proxy for monetary policy expectations — are already raising concerns.
“The Treasury’s bill supply increase acknowledges robust structural demand from money market funds and other investors,” said Joseph Abate, a strategist at Barclays Plc. “But how much will this demand grow and, more significantly, how much will bill yields need to cheapen to absorb the additional supply?”
Short-end issuance is being closely watched after the Treasury Borrowing Advisory Committee — a group comprising dealers, investors and other stakeholders — on Wednesday recommended the department skew future issuance toward shorter maturities where liquidity and investor demand is stronger. The committee even supported a meaningful deviation from its historical recommendation of T-bills making up 15% to 20% of all outstanding debt, before a return to the suggested range over time.
Read more: TBAC Advised Skewing Rises to Less Term-Premium Sensitive Tenors
The department is expected to increase bill supply by $700 billion in 2024, with the market growing to 22.4% of outstanding debt from its current share of 20.3%, Barclays estimated in a research note dated Wednesday.
Here’s what to watch for potential signs of indigestion and possible knock-on effects:
Reverse Repo Facility
The Fed’s reverse repo facility has been a place where counterparties — mostly money-market mutual funds — can park excess cash to earn a market rate, currently 5.3%.
A combination of liquidity from pandemic-era monetary and fiscal stimulus programs and lack of investable assets like Treasury bills, drove counterparties to stash a record $2.55 trillion there at the end of 2022. Since the supply deluge, usage has dropped to $1.079 trillion, the lowest since September 2021.
Bank of America strategists expect that as balances fall to zero in the second half or early 2025, bills could cheapen further and funding pressures will materialize.
Treasury Bill-OIS Spread
The spread between the yield on three-month Treasury bills and overnight index swaps has widened since the department unleashed trillions of dollars of supply. The broadening gap suggests that investors are demanding more compensation to buy into the flood of supply.
Since 2001, three-month bills have traded about 9 basis points below OIS — excluding the financial crisis — so by that measure yields are already high, according to Barclays. The firm expects yields to eventually cheapen to 20 basis points or more above OIS, once the reverse repo facility is drained.
Primary Dealer Holdings
If investors tire of Treasury bills, primary dealers could find themselves sitting on even more short-term government debt.
The more supply that builds up on balance sheets increases the risk that it impedes dealers’ ability to intermediate in other markets, driving up the cost of financing those securities at a time when the US central bank has pledged to keep interest rates higher for longer.
Dealer holdings of bills reached an all-time high $116 billion in July before dropping to $49.7 billion in the week through Oct. 25, New York Fed data show, an indication supply has yet to impair market functioning.
©2023 Bloomberg L.P.
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Bonds Trading & Speculation
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Insolvency Law: Supreme Court Rejects Distinction Among Sub-Classes Of Homebuyers
IBC does not make any distinction between different classes of financial creditors, the Supreme Court says.
Under the Insolvency and Bankruptcy Code, homebuyers who have a refund decree in their favour cannot be treated differently from their counterparts who do not have a decree, the Supreme Court has said.
It said so in an appeal filed by homebuyers against an order of the National Company Law Appellate Tribunal.
The case pertained to the allotment of homes in a real estate project.
There was a delay in the completion of the project, which led certain homebuyers to approach the Uttar Pradesh Real Estate Regulatory Authority for relief.
The UPRERA ruled in their favour and entitled them to a refund of their deposited amounts along with interest.
Subsequently, insolvency proceedings were initiated against the real estate company.
In the resolution plan submitted before the adjudicating authority, a distinction was drawn between homebuyers who had opted or elected for other remedies, such as applying before the RERA and having secured orders in their favour, and those who did not do so.
Homebuyers who did not contact the authorities under the RERA Act got 50% better terms than those who did contact RERA or were decree holders.
This was approved by the appellate tribunal, which prompted the homebuyers to approach the apex court.
The court held that the provisions of IBC do not make any distinction between different classes of financial creditors for the purposes of drawing up a resolution plan.
Only homebuyers can approach and seek remedies under RERA, and to treat a particular segment of that class differently on the ground that some of them had elected to exercise their rights based on the decree of refund would be highly inequitable, the court observed.
The distinction made in the resolution plan is artificial and amounts to ‘hyper-classification’, which falls afoul of Article 14 of the Constitution, the apex court said.
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Real Estate & Housing
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European Banks Improve Results In Stress Test That’s Key For Payouts
European banks emerged stronger from a stress test on how they would weather a sharp economic downturn, giving them a sound footing to continue paying dividends and buying back shares.
(Bloomberg) -- Most European banks emerged stronger from a stress test on how they would weather a sharp economic downturn, giving them a sound footing to continue paying dividends and buying back shares.
On aggregate, the 70 lenders in the test saw their key capital-ratio slide by 4.59 percentage points to 10.4% under an adverse scenario, the European Banking Authority said in a statement on Friday. That’s less than the 4.85 percentage-point hit in the last exam two years ago, which covered fewer banks.
While the test was billed as the toughest to date, banks benefited from their strong balance sheets and a revenue bump from higher interest rates. Lenders are likely to use the results for lobbying regulators to maintain, or even increase, payouts.
Despite €496 billion ($547 billion) of combined losses in the test, European banks “remain sufficiently capitalized to continue to support the economy also in times of severe stress,” the EBA said.
Most of Europe’s major banks saw a smaller erosion of their common equity tier 1 ratio than in the last exam. Deutsche Bank AG saw its hit narrow to 5.28 percentage points, from 6.2 percentage points, while the impact at BNP Paribas SA narrowed to 3.92 percentage points from 4.4 percentage points. ING Groep NV of the Netherlands faced a bigger erosion.
The European units of major US banks were included for the first time and faced bigger-than-average hits.
Shortfalls
Two banks showed a “minor shortfall” to their capital requirements in the stress test, the EBA said. A third with a “large shortfall” meets its obligations when applying new accounting standards that took effect this year, according to the EBA
The test’s adverse scenario foresaw inflation and a global recession as well as increased interest rates. That would lead to a contraction in real economic output of 6% over three years, a more severe situation than in the previous tests.
The EBA said comparing the results with previous exams “is difficult and may be misleading,” given that the test used different scenarios, a bigger pool of banks and changed values for capital ratios and balance sheets.
The test doesn’t have a pass or fail grade. However, regulators such as the European Central Bank use the results to set individual capital requirements and review banks’ plans to maintain sufficient levels of financial reserves, including the effect of shareholder payouts.
Uncertainty over how the economy will fare shows “the importance of remaining vigilant and that both supervisors and banks should be prepared for a possible worsening of economic conditions,” the EBA said.
The impact of the test on dividends and buybacks could give banks an incentive to make optimistic assumptions. To counter this, the ECB made a forceful intervention after lenders took what the regulator viewed as an unrealistic approach, Bloomberg reported last week.
The EBA said it will continue to improve the framework for the stress test, including work on the role of so-called top-down elements which allow regulators to replace some calculations done by the banks.
(Updates with individual results in fifth paragraph)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
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Banking & Finance
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At least one of the overall truths about the politics of red and blue states is rooted in a huge dose of hypocrisy.
If, as they generally claim, Republicans want the federal government to tax less, spend less and do less, a massive transfer of wealth and resources would flow from red (Republican-leaning) states to blue (Democratic-leaning) states.
Or, to put it more precisely, if the government taxed less and spent less, rich people and businesses predominantly in blue states would save a lot of money on their taxes, and poor people and businesses predominantly in red states would lose a lot of federal aid.
I rely for that paragraph on Paul Krugman’s latest column, which in turn relied on a just-released report by the Rockefeller Institute of Government, which found that blue states pay significantly more than their per capita share into the federal treasury, and red states get significantly more than their share of the benefit of how those taxes are spent.
Why does that represent, as I said above, a huge dose of hypocrisy?
Republicans say they favor a smaller federal government, in line with general Republican fiscal philosophy, which favors both smaller government and greater respect for state autonomy or states’ rights.
Democrats are the ones always cheering on expansions of federal power and federal spending. Right? But residents of red states, as a group, get a whole lot more benefit of federal spending than do blue states.
The Rockefeller Institute’s deep dive into how the redistribution of resources via the federal budget affects each of the 50 states is full of interesting details. But the mega-finding, at least to my eyes, is that the big beneficiaries of this net transfer flows to red states (where more poor people live), while a significantly disproportionate share of the tax burden falls on blue states because that’s where more rich people live.
If, as Republicans generally say they want, Washington taxed less and spent less and allowed for more state-by-state autonomy, red states would lose, on net, gazillions in federal spending. And taxpayers in blue states would save, on net, gazillions in tax dollars.
Laura Schultz, executive director of research for the Rockefeller Institute, wrote up the results. The list of states that pay more than their pro-rata share into the federal treasury is overwhelmingly Democratic, that is to say blue. The list of states that benefit most per capita from federal spending is overwhelming red, that is to say, Republican, you know, the party that claims to favor lower taxes (perhaps especially on the rich) and less government spending in order to net more of what, in Republican rhetoric, is called freedom.
Over the past five years, the report finds, “New York taxpayers have given $142.6 billion more to the federal government than New York residents have received back in federal spending.” That’s the biggest gap of any state.
New York is a very blue state. It has given its electoral votes to the Democratic ticket in all of the nine the most recent presidential elections, including six of the last seven by more than 20 percentage points. In 2019, the last year covered by the Rockefeller report, New York received collectively $22.8 billion less in federal benefits than its taxpayers paid into the federal treasury. The rest of the list of top per capita tax-paying states is likewise dominated by blue states.
Very few blue states make the list of those receiving the most per capita benefits. (The exceptions are Maryland and Virginia, which are blue or blue-leaning states in federal elections, but which get many of those federal dollars because they surround the District of Columbia and contain many federal facilities that spend federal dollars, not because they have more poor people getting benefits.)
But, other than those exceptions, the rest of the list of biggest beneficiaries is dominated by red states. The biggest winner in receiving more in federal spending/benefits than it pays in federal taxes is Kentucky, a Republican-leaning state, which leads the list in that beneficiary category and is the home of the U.S. Senate’s Republican leader Mitch McConnell (which might have something to do with all the federal taxpayer dollars flowing into the Bluegrass State).
The list of the seven states that, according to this analysis, made out the worst by this measure, paying much more in federal taxes than they receive in federal benefits, are all blue states including our own Minnesota in fifth place. The top four: Connecticut, Massachusetts, New York, New Jersey. All blue states.
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Inflation
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Credit card giant Visa is acquiring Brazilian payments infrastructure startup Pismo for $1 billion in cash in what is likely one of the largest fintech M&A deals taking place this year so far.
Founded in 2016 by Juliana Motta (CPO), Ricardo Josua (CEO), Daniela Binatti (CTO), and Marcelo Parise (VP of engineering), São Paulo-based Pismo has quietly racked up a list of big-name customers, including Citi, Itaú (one of Brazil’s largest banks), Revolut, N26, Nubank and Cora. The startup processes almost 50 billion API calls and $40 billion in transaction volumes annually, and powers almost 80 million accounts and over 40 million issued cards.
For some context of the explosive growth Pismo has seen, at the beginning of 2021, it was doing less than $1 billion per month in transaction volume, according to Josua. It ended 2020 with fewer than 10 million accounts total.
Over time, Pismo has expanded out of its home country and now also operates in several countries across Latin America, including Mexico and Chile, as well as in the U.S. and Europe. The startup also has some customers in India, Southeast Asia and Australia.
Pismo’s cloud-native issuer processing and core banking platform is aimed at giving banks, fintechs and other financial institutions “flexibility and agility,” the company shared when it raised $108 million in Series B funding in October of 2021. It does things like allow customers to launch products for cards and payments, digital banking, digital wallets and marketplaces. Pismo also claims to allow financial institutions to “take charge of their core data and use it intelligently.”
In a written statement, Visa said that by acquiring Pismo, it “will be positioned to provide core banking and issuer processing capabilities across debit, prepaid, credit and commercial cards for clients via cloud native APIs.” The startup’s platform will also enable Visa to provide support and connectivity for emerging payment rails, like Pix in Brazil, for financial institution clients, the company added.
“Through the acquisition of Platinum, Visa can better serve our financial institution and fintech clients with more differentiated issuer solutions they can offer their customers,” said Jack Forestell, Visa’s chief product and strategy officer, in a written statement. The deal, which is subject to regulatory approvals and other customary closing conditions, is slated to close by year’s end. Pismo will retain its current management team, who will remain based in São Paulo.
SoftBank, e-commerce giant Amazon and Silicon Valley-based venture firm Accel co-led the startup’s Series B raise. Falabella Ventures, PruVen and existing backers Redpoint eventures and Headline also participated in the financing, which brought Pismo’s total funding raised to $118 million. The company did not share its valuation but Accel Partner Ethan Choi told TechCrunch that the sales price was “a very strategic multiple.”
As a SaaS business, Pismo mostly made money by charging transaction fees. It has charged per active account, so prices decrease based on volume. In other words, the more clients a customer has, the less they pay per account.
In a written statement, Josua said: “At Pismo, we aim to enable our clients to launch cutting-edge payments and banking products within a single cloud-native platform – regardless of rails, geography or currency. Visa provides us unrivaled support to expand our footprint globally and help shape a new era for banking and payments.”
Visa was reportedly just one of several companies bidding for the startup, which was not seeking to be acquired, or even fundraising, according to Choi.
“Pismo wasn’t on the block,” he told TechCrunch. Besides the transaction representing “one of the largest LatAm cross-border fintech deals that has happened,” Choi believes it is also “an example of a global card network deciding that they would like to get closer to the banks and the financial institutions they work with by providing core banking and card issuing services to them, in addition to their credit card and debit card rails.”
He added: “There are a lot of synergies to be able to sell these really critical APIs to their existing financial institution customers.”
It’s not the first infrastructure play on Visa’s part. In March of 2022, it closed on its $2.15 billion acquisition of Tink, a leading fintech startup in Europe focused on open banking application programming interfaces.
The credit card behemoth also famously abandoned its planned $5.3 billion acquisition of Plaid, a U.S.-based popular open banking startup, before having to call off the acquisition after running into a regulatory wall.
No doubt that Pismo getting scooped up by Visa is a coup of sorts for the entire Latin America region, which saw a surge in global investors pouring capital into the region in 2021 and a bit of a retreat since. It’s also a comeback story, considering that In 2019, Pismo was running out of the cash it had raised in a 2016 $900,000 seed round. In fact, things were so dire that Binatti and Parise even sold their only car in order to fund Pismo’s operations. Now, the company’s just over 400 workers will become Visa employees.
The deal also marks the second time that Accel has purchased a financial infrastructure company that ended up getting acquired soon after. In 2020, consumer financial services platform SoFi announced that it was acquiring payments and bank account infrastructure company Galileo for $1.2 billion in total cash and stock. That company was founded in 2000 and bootstrapped to profitability before Accel wrote it a $77 million Series A check in 2019.
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Banking & Finance
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Market Makes A Smart Comeback In November; Midcaps, Smallcaps Outperform Largecaps: Motilal Oswal
Mid- and small-caps back in favor after a breather in October 2023; FIIs record an inflows
BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Equity markets were justifiably anxious about the outcome of state polls and what it portends for the 2024 general elections. With the outcome overwhelmingly in favor of the incumbent BJP, the confidence of the market in the current dispensation and political continuity post 2024 Lok Sabha elections will get a boost.
This augurs well for macro and policy momentum for India, which, at the moment, is seeing the highest growth among major economies (both GDP as well as corporate earnings).
Nifty is trading at a 12-month forward price/earning ratio of 18.4 times, which is at a 9% discount versus its long-period average.
We largely maintain our sectoral allocations and weights, relying on the sectors that have shown growth potential to drive our stock selection framework.
We remain overweight on financials, consumption, industrials, automobiles, and healthcare; while we maintain our underweight stance on metals, energy, IT and utilities, and Neutral outlook on telecom in our model portfolio.
Top ideas: Largecaps – ICICI Bank, ITC, Bajaj Finance, Larsen and Toubro, HCLTech, M&M, Titan, Avenue Supermarts, Ultratech Cement, ONGC, and Zomato.
Midcaps and Smallcaps – Indian Hotels, Angel One, Lemon Tree Hotel, Ashok Leyland, Godrej Properties, Sunteck Realty, Metro Brands, Global Health, PNB Housing, and Craftsman Automation.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
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Stocks Trading & Speculation
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WASHINGTON -- After intense backlash from some shoppers, Target is removing certain items and making other changes to its LGBTQ+ merchandise nationwide ahead of Pride month.
In confirming the changes to this year's Pride collection, which has been on sale since early May, the Minneapolis retailer cited safety concerns for employees that have been Targeted by hostile customers.
“Since introducing this year’s collection, we’ve experienced threats impacting our team members’ sense of safety and wellbeing while at work,” Target said Tuesday in a written statement. “Given these volatile circumstances, we are making adjustments to our plans.”
The confrontations in Target stores are taking place as state legislatures introduce a record number of bills targeting LGBTQ+ individuals across the country. Some advocacy groups have criticized Target's response — calling on the retailer to not back down to hate-filled backlash and reaffirm its support with the LGBTQ+ community.
Here are some things to know about the controversy surrounding the Target Pride collection and the company's response.
DID TARGET PULL ITS PRIDE COLLECTION?
Target did not pull its entire Pride collection, but it has removed certain items ahead of Pride month.
The chain also made other changes to the selling of its LGBTQ+ merchandise nationwide, with Target confirming that it moved its Pride merchandise from the front of the stores to the back in some Southern locations after confrontations from shoppers in the region.
WHY IS TARGET PULLING PRIDE PRODUCTS? AND WHICH ONES?
Target said it's pulling certain items from the Pride collection due to intense and threatening backlash from some customers — which has impacted employees' sense of safety, the company said. Target said that customers knocked down Pride displays at some stores, angrily approached workers and posted threatening videos on social media from inside the stores.
The retailer added that it would be "removing items that have been at the center of the most significant confrontational behavior.” Target declined to further specify which products would be impacted.
“Tuck friendly” women’s swimsuits, which allow trans women who have not had gender-affirming operations to conceal their private parts, were among Target's Pride items that garnered the most attention. There are bogus claims on social media platforms that the swimsuits were being sold in the children's department. Designs by Abprallen, a London-based company that designs and sells occult- and satanic-themed LGBTQ+ clothing and accessories, have also created backlash.
WHAT STARTED THE CONTROVERSY AROUND TARGET'S PRIDE COLLECTION?
The controversy gained traction online last week as conservative media attacked Target’s Pride month collection — which has also been the subject of several misleading videos in recent weeks that falsely claimed the retailer is selling “tuck-friendly” bathing suits designed for kids. The backlash also spilled over into physical stores.
Target and other retailers have been expanding their LGBTQ+ displays to celebrate Pride month in June for roughly a decade. Today's confrontations in Target stores arrive amid a surge of legislation targeting LGBTQ+ people across the nation.
There are close to 500 anti-LGBTQ+ bills that have gone before state legislatures since the start of this year, an unprecedented number, according to the American Civil Liberties Union. Those efforts focus on health, particularly gender-affirming health care for transgender youth, and education. State legislatures are also pushing to prevent discussions in school regarding sexuality and gender identity.
WHAT HAS BEEN TARGET'S RESPONSE?
In addition to deciding to remove some of its items amid other adjustments to the selling of its Pride collection, Target said that the company's focus is now “on moving forward with our continuing commitment to the LGBTQIA+ community and standing with them as we celebrate Pride Month and throughout the year.”
Some activists and advocacy groups, however, have criticized Target's response — calling on the retailer to reaffirm its support with the LGBTQ+ community.
“Target should put the products back on the shelves and ensure their Pride displays are visible on the floors, not pushed into the proverbial closet. That’s what the bullies want. Target must be better,” stated Kelley Robinson, president of The Human Rights Campaign, the largest LGBTQ+ civil rights group in the U.S.
“Extremist groups and individuals work to divide us and ultimately don’t just want rainbow products to disappear, they want us to disappear,” Robinson added. “For the past decade, the LGBTQ+ community has celebrated Pride with Target — it’s time that Target stands with us and doubles-down on their commitment to us.”
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Consumer & Retail
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WASHINGTON -- The Supreme Court ruling that upended President Joe Biden's plan to forgive student loan debt changed his budget math, modestly lowering the projected deficit for this year, his budget office reported Friday.
The White House expects to pare back $259 billion in spending that otherwise would have gone to erasing student loans. This contributed to lowering expected red ink this year under Biden’s budget plans from $1.569 trillion to $1.543 trillion.
The Office of Management and Budget's Mid-Session Review represents the administration's first recalculations of the loan program since the court's June decision, which will affect millions of borrowers.
The court decision initially was expected to reduce the deficit by $400 billion. But a portion of that money will instead be used to pay for a smaller income-driven loan repayment program that goes into effect this summer, according to the report.
Millions of Americans with student loans will be able to enroll in the new SAVE repayment plan that offers some of the most lenient terms the government has ever offered borrowers.
Looking ahead to 2024, the report projects that inflation will continue to decline and the unemployment rate will average 3.8% for the rest of the year. Unemployment is expected to hit 4.4 % in 2024, then decline over the rest of the 10-year budget window to an annual average of 3.8%.
The new forecast comes as Federal Reserve Chair Jerome Powell earlier this week said staff economists no longer foresee a recession.
“There is clear evidence that the President’s economic plan — Bidenomics — is growing our economy from the middle out and bottom up, not the top down,” said Biden's budget director Shalanda Young in a statement accompanying the report.
The administration has been pushing “Bidenomics" as an approach that spurs economic growth through promoting domestic supply chains and favoring firms that use those supply chains through tax credits and other measures.
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Inflation
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- Summary
- Companies
- Tomato prices in India surge, hit record
- McDonald's takes tomatoes off menu items, blames quality
- Price rise comes when inflation was hurting consumers
- Indians cutting back on tomato consumption
NEW DELHI/MUMBAI, July 7 (Reuters) - Restaurants of fast food chain McDonald's have dropped tomatoes from their burgers and wraps in many parts of India, hit by supply shortages and quality concerns after prices of the vegetable soared to records.
In some regions, wholesale prices of the staple of traditional Indian cuisine have surged 288% in a month to a high of 140 rupees ($1.7) a kg on Friday, with retail prices still higher, spurring many people to cut back on consumption.
The government blames the higher prices of tomatoes on a lean production season when monsoon rains disrupt transport and distribution, but it comes after consumers have battled higher prices of items ranging from milk to spices in recent months.
"Despite our best efforts, we are not able to get adequate quantities of tomatoes which pass our stringent quality checks," read notices posted in two McDonald's stores in New Delhi, the capital.
"We are forced to serve you products without tomatoes."
Store managers said the problem was due to quality issues in the supply chain, rather than pricing.
In a statement to media, Connaught Plaza Restaurants, which runs about 150 outlets as McDonald's (MCD.N) franchisee in India's north and east, attributed the decision to "temporary" seasonal issues.
However, Westlife Foodworld (WEST.NS), the McDonald's franchisee for India's western and southern regions, with 357 restaurants, said there were "no serious tomato-related issues".
The problem was seasonal and forced 10% to 15% of its stores to stop serving tomatoes temporarily, it said.
McDonald's Delhi stores still offer sachets of tomato ketchup, however, and a nearby Subway restaurant said there were no issues serving tomatoes.
In the financial capital of Mumbai, vegetable vendor Vijay Sharma said sales had fallen off from the 40 kg (88 lb) he used to peddle each day.
"Most of my customers have stopped buying tomatoes," he said. "Now, I only bring five kilos."
As Indians cut back on tomatoes, some businesses suggest alternatives.
"Tomato prices running high? Cook with tomato puree instead!" exhorts an advertisement among the results thrown up by a search for tomatoes on the BigBasket shopping app of the Tata conglomerate.
Our Standards: The Thomson Reuters Trust Principles.
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Inflation
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I am approaching the time when I’ll take required minimum distributions (RMDs) from my individual retirement account (IRA). I am in a quandary about what I can do with this anticipated largesse of cash. I do not necessarily need the money dumped into my checking account.
-Tommy
Retirees who don’t need the cash from required minimum distributions (RMDs) aren’t required to dump it directly into a checking account. Fortunately, a range of options exists that allows the RMDs to work more effectively for you.
Keep in mind that how you handle your RMDs may come with tax consequences, so it’s important to keep an eye out for those repercussions. Here’s what to do with RMDs when you don’t need the cash. (If you have additional questions about investing or retirement, this tool can help match you with potential advisors.)
Consider an In-Kind Distribution
An in-kind distribution allows you to transfer or withdraw the assets from your account while maintaining their invested status, rather than cashing them out.
The benefit of distributing assets this way is that your money will stay invested in a stock, exchange-traded fund, mutual fund or other investment. That may be particularly beneficial if you’ve experienced losses recently and would like to wait to see your investments recover before cashing them in.
One downside is that you’ll still need to be able to cover the tax bill that accompanies the distribution. (If you have additional questions about the tax repercussions of investing decisions, this tool can help match you with potential advisors.)
Opt for a QCD
A qualified charitable distribution (QCD) allows taxpayers to transfer assets directly to a charity, bypassing the need to pay taxes on the distribution.
QCDs are an option for folks who truly don’t need RMD money to pay for living expenses and would prefer to use it to fund charitable causes.
Additionally, strategically utilizing QCDs can result in other important retirement benefits. They remove money from the accountholder’s taxable income, which can reduce Medicare premiums. Plus, folks who utilize this strategy before RMD age (they become available for individuals who are 70 1/2 and older) can reduce the value of their overall tax-advantaged retirement account, minimizing RMDs in the future. (If you have additional questions about investing or retirement, this tool can help match you with potential advisors.)
If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Try Converting to a Roth
As you approach RMD age, consider the benefits of strategically converting dollars from your traditional IRA to a Roth.
Roth accounts are not subject to RMDs, and executing a Roth conversion may allow you to both reduce future taxes and minimize or eliminate mandated distributions, giving you more control of that money in the future. Again, there will be a tax consequence to these conversions, so plan accordingly. (If you have additional questions about the tax repercussions of investing decisions, this tool can help match you with potential advisors.)
Bottom Line
There is a range of ways to approach RMDs that don’t involve dumping them in a checking account. But some of these approaches may have implications for your tax bill, investment strategy and retirement income. Consider working with a knowledgeable financial advisor if you’re unsure of how to proceed.
Tips for Finding a Financial Advisor
Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Consider a few advisors before settling on one. It’s important to make sure you find someone you trust to manage your money. As you consider your options, these are the questions you should ask an advisor to ensure you make the right choice.
Susannah Snider, CFP® is SmartAsset’s financial planning columnist, and answers reader questions on personal finance topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.
Please note that Susannah is not a participant in the SmartAdvisor Match platform and is an employee of SmartAsset.
Photo credit: ©Jen Barker Worley, ©iStock.com/Halfpoint, ©iStock.com/Tom Merton
The post Ask an Advisor: I Don’t Need Them ‘Dumped Into My Checking Account.’ What Can I Do With RMDs? appeared first on SmartAsset Blog.
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Personal Finance & Financial Education
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PayPal is diving into the messy world of crypto with a new stablecoin pegged to the US dollar, aptly and uninventively named PayPal USD. The company’s entrance into the industry comes at a time of deep regulatory uncertainty as federal agencies and lawmakers continue to grapple with the fallout of multiple major crypto implosions last year.
In a blog post, PayPal said its new stablecoin will be “fully backed by US dollar deposits” and can be purchased or sold for $1.00 on the company’s website or app. PayPal says owners can use the currency to make payments, fund purchases at checkout, and convert between other supported cryptocurrencies. The company believes its digital currency could “reduce friction for in-experience payments in virtual environments,” and make it easier to send remittances or transfer money between family and friends.
“Today, we’re unveiling a new stablecoin, PayPal USD (PYUSD). It’s designed for payments and is backed by highly liquid and secure assets. Starting today and rolling out in the next few weeks, you’ll be able to buy, sell, hold and transfer PYUSD,” the company tweeted.
PayPal USD is being issued by a New York firm called Paxos Trust Co, and will be built on the Ethereum blockchain. The currency officially launches today but will become more widely available to US customers with PayPal Balance accounts “in the coming weeks.” The company says its coin will also be accessible on its subsidiary Venmo as well. All of this, PayPal says, is part of a longer-term vision of using the stablecoin to “to transform payments in web3.”
“The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar,” PayPal President and CEO Dan Schulman said in a statement. PayPal declined to comment further.
As the name suggests, stablecoins are intended to function as a less volatile, safer form of crypto since they are pegged to a tangible asset. That doesn’t make them impervious to risk though. Last year, the so-called stablecoin Terra collapsed and wiped out an estimated $450 billion from the crypto market. Prosecutors in South Korea have since indicted Terra co-founder Daniel Shin and nine staff members over their alleged involvement in the currency’s demise. Meta pursued its own US dollar-pegged stablecoin dubbed Diem for years but finally gave up on the project over concerns it would be axed by federal regulators.
US Regulators are generally taking a hard look at cryptocurrencies. In June, the Securities and Exchange Commission filed a lawsuit against crypto giant Coinbase, accusing the company of violating securities laws by operating as an unregistered broker, exchange, and clearing agency. That came just days after the agency issued another lawsuit against crypto exchange Binance similarly accusing it of operating as an illegal exchange.
PayPal would not comment when Gizmodo asked about crypto’s uncertain regulatory future but noted its intends to work “closely with regulators as the industry evolves.”
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Crypto Trading & Speculation
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Gandhar Oil Refinery Raises Rs 150 Crore From Anchor Investors Ahead Of IPO
The state-run company has allotted 88.88 lakh equity shares at Rs 169 apiece to 16 anchor investors.
Gandhar Oil Refinery Ltd. has raised Rs 150.2 crore from anchor investors ahead of its initial public offering.
The state-run company has allotted 88.88 lakh equity shares at Rs 169 apiece to 16 anchor investors.
The major investors include ICICI Prudential ELSS Tax Saver Fund, HDFC Mutual Fund, Whiteoak Capital Flexi Cap Fund, Morgan Stanley Asia (Singapore) Pte, Societe Generale, and Aditya Birla Sun Life Insurance Co., among others.
Both ICICI Prudential ELSS Tax Saver Fund and HDFC Mutual Fund secured 17.8% each of the total allocation, the highest in the list.
Three domestic mutual funds have applied through a total of seven schemes, the company said in an exchange filing. They have collectively netted 47.58% of the anchor portion of Rs 71.4 crore.
Nuvama Wealth Management Ltd. and ICICI Securities Ltd. are the book-running lead managers for the offer.
About Gandhar Oil Refinery IPO
Gandhar Oil Refinery will raise Rs 500.69 crore via a fresh issue and an offer for sale.
The IPO will comprise fresh issue worth Rs 302 crore. The company also has an offer for sale of 1.18 crore shares, worth up to Rs 198.69 crore, by the promoter selling shareholder.
The price band is fixed between Rs 160 and Rs 169 per share. At the upper price band, the company is valued at Rs 1,654 crore in market capitalisation.
Gandhar Oil Refinery is a producer of white oils by revenue, with a growing focus on the consumer and healthcare end industries.
As of June 30, their product suite comprised 440 products, primarily across the personal care, healthcare and performance oils, lubricants, and process and insulating oil divisions under the “Divyol” brand.
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Stocks Trading & Speculation
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A thief who stole more than $470m (£383m) in cryptocurrency when FTX crashed is trying to cash it out while the exchange's founder is on trial.
Sam Bankman-Fried's high-profile court case began last week. The former crypto mogul denies fraud.
After lying dormant for nine months, experts say $20m of the stolen stash is being laundered into traditional money every day.
New analysis shows how the mystery thief is trying to hide their tracks.
FTX was once one of the biggest exchange platforms in the world allowing crypto investors to buy, trade and store digital currencies. It went bankrupt on 11 November 2022, with billions of dollars of customer funds missing.
Mr Bankman-Fried is pleading not guilty to misusing customer funds and money laundering while bankruptcy lawyers are trying to locate the missing billions.
On the day FTX collapsed, hundreds of millions of dollars of cryptocurrency controlled by the exchange were stolen by an unidentified thief that is believed to still have control of the funds.
No one knows how the thief - or thieves - was able to get digital keys to FTX crypto wallets, but it is thought it was either an insider or a hacker who was able to steal the information.
The criminal moved 9,500 Ethereum coins, then worth $15.5m, from a wallet belonging to FTX, to a new wallet.
Over the next few hours, hundreds of other cryptoassets were taken from the company's wallets, in transactions eventually totalling $477m.
According to researchers from Elliptic, a cryptocurrency investigation firm, the thief lost more than $100m in the weeks following the hack as some was frozen or lost in processing fees as they frantically moved the funds around to evade capture.
But by December around $70m was successfully sent to a cryptocurrency mixer - a criminal service used to launder Bitcoin, making it difficult to trace.
Without using a mixing service to hide the illicit origins of their Bitcoin, criminals risk being caught or having their funds seized by cryptocurrency exchanges.
Such exchanges allow people to exchange coins like Bitcoin and Ethereum for traditional cash.
Although mixers make it difficult to trace Bitcoin, Elliptic was able to follow a small amount of the funds - $4m - that was sent to an exchange.
The rest of the stolen FTX stash - around $230m - remained untouched until 30 September - the weekend before Mr Bankman-Fried's trial began.
Nearly every day since then chunks worth millions have been sent to a mixer for laundering and then presumably cashing out.
Elliptic has been able to trace $54m of Bitcoin being sent to the Sinbad mixer after which the trail has gone cold for now.
Experts say the activity is strange and goes against the norm for cryptocurrency hackers and thieves.
"Crypto launderers have been known to wait for years to move and cash out assets once public attention has dissipated, but in this case they have begun to move just as the world's attention is once again directed towards FTX and the events of November 2022," said Tom Robinson, Elliptic's co-founder.
Another finding from tracing the funds points to a potential link to Russian cyber-crime.
Some of the stolen Bitcoin successfully laundered last year has been traced to a wallet known to be used by Russian-linked criminal groups. Elliptic says this could point to the involvement of a broker or other intermediary with a link to Russia.
Panorama explores the breakneck rise and sensational fall of Sam Bankman-Fried, the maths genius who set out to transform the world of crypto but ended up being its biggest loser.
Watch on BBC iPlayer now and on BBC1 at 20:00, Monday 25 September (UK only)
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Crypto Trading & Speculation
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Prices for medications may be very different from pharmacy to pharmacy, even within the same ZIP code. So you may be able to save money on your medicines by shopping around for the best price.
âPrescription and over-the-counter medication prices vary, depending on where you go,â says Kyle Manera, the chief operating officer of Co-Immunity, an organization in Wichita, KS, for people with chronic illnesses.
Even if you use insurance, your out-of-pocket cost may differ, depending on where and how you buy your medications.
Are All Pharmacies the Same?
Every pharmacy, whether it's local, a chain, or a mail-order or online operation, has its own markup on drugs. Prices differ, based on their markup, the brand of the medication, and how much you order.
Your insurance plan may require you to use its "preferred" pharmacy. That's a pharmacy your insurance company has an agreement with. If you use this pharmacy, you may have a lower copay for medications.
But even if you have insurance that covers medications, you may be able to find a lower price by shopping around.
How to Get the Best Prices
Try these strategies for finding the best price on your over-the-counter and prescription medication:
Call around. You can save time and money by calling different pharmacies to find out your out-of-pocket prescription cost ahead of time.
âCall a few independent pharmacies and check out their prices vs. prices from a big-box store like Walgreens or CVS,â says Rajesh Chotalia, a pharmacist in Illinois. âYou may find a bargain at an independent pharmacy.â
"Some, like GoodRx and WebMDRx, also offer coupon cards you can use for extra discounts."
Use price-compare tools. âThere are a lot of good apps out there that can help you find the best prices,â Manera says.
Apps and websites like GoodRx, RxSaver, WebMDRx, and SingleCare help you compare the price of a medication at different pharmacies. When you type in the name of a drug, it shows you a list of prices at various pharmacies in your area.
Some, like GoodRx, also offer coupon cards you can use for extra discounts.
Try an online pharmacy. Some online pharmacies have pre-negotiated prices that can save you money. They may deliver your medication through the mail or offer local pickup.
For example, at Blink Health, you order online, then choose delivery or pickup at a local pharmacy. At HealthWarehouse.com and Marley Drug, you search and order a drug online, then itâs delivered by mail.
Check mail-order prices before you order. Some insurance plans recommend using a specific mail-order pharmacy to fill long-term prescriptions. But they donât always have the best prices. Using a mail-order pharmacy will sometimes save you money, but not always.
Compare prices with and without insurance. Your insurance plan may save you money on prescriptions. You may also be able to get certain over-the-counter medications at a lower price by using your insurance. But insurance doesnât always get you the best price. Because of deductibles and copays, you might get a better deal by buying your meds directly.
But be careful when skipping insurance. The amount you pay may not be counted toward your insurance deductible or maximum out-of-pocket, unless you can submit these expenses manually to prove you paid them. Contact your insurance company's customer service department to see how to submit your receipts. Do the same when you use coupons or discount programs instead of insurance.
âDepending on what youâre buying, ditching your insurance and looking at discount cards or sales might save you more than your own plan,â says Andrei Vasilescu, co-founder of DontPayFull, a company that provides free coupons and discount offers to online shoppers.
Look for coupons. Some drugmakers offer discounts on expensive medications. Try searching for manufacturer coupons on their websites. You can also ask your doctor if they have any coupons you can use.
Try a drug discount card. You may be able to save money with a free drug savings card. Cards like GoodRx, WebMDRx, and NeedyMeds can lower your prescription costs up to 85%.
You sign up for the card online, print it at home, then use it at pharmacies like Walmart and Walgreens to get discounts on your prescriptions.
Buy in bulk. âIf youâre going to take medication for a long time, it makes sense to get 3-6 monthsâ worth of medication,â Chotalia says.
For prescriptions, check with your insurance provider about the maximum supply of a drug they'll cover at one time (it's often a 90-day supply), then ask your doctor if they can prescribe in that amount. This may cost more up front but can save you money over time. For over-the-counter drugs, you may find discounts on bulk medications at wholesale clubs like Samâs and Costco.
Talk to your doctor. Ask your doctor to review your prescription needs. Ask if you can do without any of your prescriptions. Maybe thereâs a similar, but lower-cost, drug you can take instead. Or maybe there's a generic version of the brand-name drug your doctor prescribed.
âIf a generic medicine is available, go for the generic version,â Chotalia says. âYou will save a lot more money â and itâs the same medication.â
Talk to your pharmacist. Your pharmacist may be able to save you money by recommending a less expensive drug or by telling you about different pricing options.
Ask them what your prescription will cost with and without insurance. See if theyâll call your doctor to request a less expensive medication. And ask if they know of any prescription discount cards or patient assistance programs that could help you afford your medication.
Consider a patient assistance program. If you need help to pay for medication, you could get free or low-cost medication through a patient assistance program (PAP) offered by the drugmaker. Some government agencies and nonprofit groups have them, too. You can find information on different PAPs at RXAssist.org.
Show Sources
Photo Credit:Â Moment/Getty Images
SOURCES:
Rajesh Chotalia, pharmacist, speaker, and health and wellness consultant.
Kyle Manera, chief operating officer, Co-Immunity Foundation.
Andrei Vasilescu, co-founder, DontPayFull.
Consumer Reports: âLower Your Drug Costs with These Six Hacks.â
University of Michigan National Poll on Healthy Aging: âDoctors and Pharmacists: An Underused Resource to Manage Drug Costs for Older Adults.â
Vermont Education Health Initiative (VEHI): âLetâs Talk about Rx Costs.â
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Consumer & Retail
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Jeremy Hunt has said he will address labour supply issues and business investment when he delivers an “autumn statement for growth” next week.
The Chancellor claimed the Government is starting to “win the battle” against inflation – with new statistics expected on Wednesday – which he argued allows him to “focus on the next stage”.
He gave a preview of the November 22 fiscal event after also dismissing Labour’s criticism of the Government’s legislative plans contained in the King’s Speech.
Mr Hunt’s remarks came after a session of Treasury questions in which he faced Conservative calls to lower taxes and scrap the so-called “factory tax”, which relates to the inability to fully expense investments in machinery and buildings.
Mr Hunt used the Budget in March to announce a three-year policy of “full expensing” to ensure every single pound a company invests in IT equipment, plant or machinery can be deducted in full and immediately from taxable profit.
Labour and Tory MPs have urged Mr Hunt to make this a permanent change, with the Chancellor noting this would be a £10 billion commitment if implemented.
Speaking on day five of the King’s Speech debate, Mr Hunt told the Commons: “As we start to win the battle against inflation, we can focus on the next stage which is growth. So next week we will see an autumn statement for growth.
“Because no business can expand without hiring additional staff, I will address labour supply issues to help fill the nearly one million vacancies we have, working with the excellent Secretary of State for Work and Pensions (Mel Stride).
“This will build on the 30 hours of free childcare offer that I announced for all eligible children over nine months in the Spring Budget.
“I will also focus on increasing business investment because, despite the fact that our growth has been faster than many of our European neighbours, our productivity is still lower.”
Mr Hunt claimed the King’s Speech will deliver “more growth, more jobs, more pay, more opportunity and more prosperity”, adding in a dig at Labour: “Not following the easy path of opening the national chequebook, maxing the country’s credit card by borrowing £28 billion a year more.
“But a path that is more difficult, yes, but more durable and one that will turn us into one of the most prosperous countries in Europe.”
Shadow chancellor Rachel Reeves earlier described the King’s Speech as a “lost opportunity for our country”, saying: “It’s as if ministers have rummaged down the back of the sofa and found legislative loose change, a broken biro, some old Bills covered in fluff, and now even an old prime minister.”
She added: “The Government’s King’s Speech was a lost opportunity for our country. No legislation to reform the antiquated planning process, to accelerate decision around our critical national infrastructure; instead, planning processes continue to hold back the success of our offshore wind sector, life sciences, and 5G.
“No pension reforms to encourage growing British companies to stay here, instead being forced abroad for funding, which contributes to the UK’s stagnating growth.
“No serious plan to help get energy bills down, the energy price cap has increased by a half this Parliament.”
Ms Reeves went on to say Prime Minister Rishi Sunak is spending “more time polishing his CV, in conversation with Elon Musk, than fighting for the livelihoods of manufacturing workers in Scunthorpe, in Port Talbot, or in Derby”.
Ms Reeves’ comments follow a conversation between the tech entrepreneur and the Prime Minister at the Summit on Artificial Intelligence which took place at the beginning of November.
Mr Hunt later said concerns about steelworkers are “absolutely at the top of my mind as we try and chart a better future for British Steel”.
Ministers have come under pressure to guarantee steel can continue to be made in the UK amid concerns over British Steel’s proposals to close blast furnaces at its Scunthorpe plant.
Unions fear up to 2,000 jobs could be lost as a result of the Chinese-owned company planning to replace blast furnaces with two electric arc versions that can run on zero-carbon electricity, if it gets “appropriate support from the UK Government”.
Labour’s King’s Speech amendment has been selected for consideration on Tuesday.
It seeks to allow the Office for Budget Responsibility to produce forecasts for any Government fiscal event, which includes tax and spending decisions, in light of the fallout of last year’s mini-budget.
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Workforce / Labor
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Stock Market Today: All You Need To Know Going Into Trade On Nov. 30
Stocks in the news, big brokerage calls of the day, complete trade setup and much more!
The rally that’s driving global bonds to their best month since 2008 gained further traction, with U.S. treasuries climbing on bets the Federal Reserve will be able to start cutting rates in the first half of 2024, reported Bloomberg.
The S&P 500 Index and Nasdaq 100 rose by 0.27% and 0.25%, respectively, as of 1:01 p.m. New York time. The Dow Jones Industrial Average rose by 0.33%.
Brent crude was trading 1.29% higher at $82.73 a barrel. Gold was up by 0.23% to 2,045.62 an ounce.
India's benchmark stock indices extended gains for the second consecutive day to end at an over-two-month high on Wednesday, led by gains in HDFC Bank, Axis Bank, and ICICI Bank.
The NSE Nifty 50 ended 206.9 points, or 1.04% higher, at 20,096.60, the highest level since Sept. 15, while the S&P BSE Sensex gained 727.71 points, or 1.1%, to close at 66,901.91, the highest level since Sept. 18.
Overseas investors stayed net buyers for the fourth consecutive session on Wednesday.
Foreign portfolio investors bought stocks worth Rs 71.9 crore; domestic institutional investors continued as buyers and purchased stocks worth Rs 2,360.8 crore, the NSE data showed.
The Indian rupee closed flat at 83.33 against the U.S. dollar on Wednesday.
Stocks To Watch
Metro Brands: The company has signed a trademark licence agreement with Foot Locker Retail, Inc., granting exclusive rights for opening and operating athletic and casual footwear and apparel stores under the brand names “Foot Locker” and “Kids Foot Locker” through brick-and-mortar stores in India.
ICICI Bank: The board approved the draft scheme of arrangement for the delisting of equity shares of ICICI Securities, thereby making ICICI Securities a wholly-owned subsidiary of the bank.
Ultratech Cement: The cement manufacturer acquired the 0.54 MTPA cement grinding assets of Burnpur Cement for Rs 170 crore.
FSN E-Commerce Ventures: Foot Locker announced the signing of a long-term licencing agreement with Metro Brands and Nykaa Fashion. Nykaa Fashion will serve as the exclusive e-commerce partner and operate Foot Locker's India website.
Thomas Cook (India): The company's promoter, Fairbridge Capital (Mauritius), proposed an offer for sale to sell up to 32 lakh equity shares, representing 6.8% of the total paid-up equity share capital of the company. In the event of oversubscription, an additional 80 lakh shares, representing a 1.7% stake, will be available. The floor price of the offer is set at Rs 125 per equity share.
Shivalik Bimetal Controls: The company signed a MoU with Metalor Technologies International SA (Metalor) to explore the feasibility of setting up a joint venture in India to produce electrical contacts.
Dixon Technologies (India): ICRA reaffirmed the company's ratings and revised the outlook on the long-term rating from stable to positive.
Man Infraconstruction: The company approved a Rs 550 crore fund raise through a preferential issue. The funds will be raised through the issue and allotment of up to 3.55 crore warrants, each warrant convertible into one equity share of the face value of Rs 2 each on a preferential basis at an issue price of Rs 155, including a premium of Rs 153 per warrant.
Max Estates: Max Estates Gurgaon, a wholly owned subsidiary, proposed to develop a group housing project on the land measuring 11.80 acres in Gurugram, Haryana.
Rajoo Engineers: The company's board approved a Rs 19.79 crore buyback at Rs 210 per share.
Zee Entertainment Enterprises: The company called reports indicating risks to its merger plan with Sony "factually incorrect."
Southern Petrochemical: The company shut its plants on Nov. 29 due to plant maintenance. It expects to line up production by Dec. 2.
Karur Vysya Bank: The Karur-headquartered bank opened three new branches in Tamil Nadu and one in Karnataka.
Ramco Systems: Ramco System Korea Company Ltd. was incorporated in South Korea as a wholly owned subsidiary of the company.
JSW Infrastructure: The company has issued a corporate guarantee of $126 million in favour of Axis Trustee Services. Its subsidiary, Masad Infra Services, has entered into a concession agreement with the Karnataka Maritime Board to develop a greenfield port.
Dalmia Bharat Sugar And Industries: The company's resolution plan for the revival of Baghauli Sugar and Distillery under the corporate insolvency resolution process in terms of the Insolvency and Bankruptcy Code, 2016 was approved by the Allahabad Bench of the Hon'ble National Company Law Tribunal.
L&T Finance: The company approved the allotment of 13.07 lakh equity shares under the L&T FHL employee stock option scheme in 2013.
JSL Overseas Holding: The company released a pledge on the shares of Jindal Stainless.
Welspun Speciality Solutions: It bagged orders for an aggregate amount of Rs 15.87 crore from a domestic, unrelated customer for the supply of duplex drade seamless tubes. The order is expected to be executed by March 2024.
PCBL: The company formed a 51-49 joint venture with Kinaltek for a battery manufacturing facility. It will invest $16 million in the JV and infuse up to $28 million in stages.
Jupiter Wagons: The company has launched its qualified institutional placement to raise up to Rs 700 crore. The board authorised the opening of the issue and set the floor price at Rs 331.34 per share.
One 97 Communications: Payments platform Paytm said its mobile application is facing a "technical issue" as users complained of a service outage on Wednesday.
New Listings
Tata Technologies: The company's shares will debut on the stock exchanges on Thursday at an issue price of Rs 500 apiece. The Rs 3,042.51 crore IPO was subscribed 69.43 times on its third and final day. The bids were led by institutional investors (203.41 times), non-institutional investors (62.11 times), retail investors (16.50 times), employee reserved (3.7 times), and reservation portion shareholders (29.2 times).
FedBank Financial Services: The company's shares will debut on the stock exchanges on Thursday at an issue price of Rs 140 apiece. The Rs 1,092.26 crore IPO was subscribed 2.20 times on its third and final day. The bids were led by institutional investors (3.51 times), non-institutional investors (1.45 times), retail investors (1.82 times), and employee reserved (1.34 times).
Gandhar Oil Refinery: The company's shares will debut on the stock exchanges on Thursday at an issue price of Rs 169 per share. The Rs 500.69 crore IPO was subscribed 64.07 times on its third and final day. The bids were led by institutional investors (129 times), non-institutional investors (62.23 times), and retail investors (28.95 times).
Block Deals
Zomato: Alipay has offloaded 29.60 crore shares, or 3.44% stake, for Rs 112.7 per share. Morgan Stanley bought 4.4 crore shares, or a 0.5% stake, at Rs 112.7 per share; Societe Generale bought 3.54 crore shares (0.41%) at Rs 112.7 apiece, among others.
WPIL: V N Enterprises sold 0.63 lakh shares (0.64%), while Hindusthan Udyog bought 0.63 lakh shares (0.64%) at Rs 3111 apiece.
AGMs Today
Proctor & Gamble Health.
Who’s Meeting Whom
Arvind: To meet investors and analysts on Dec. 04.
Datamatics Global Services: To meet investors and analysts on Dec. 04.
Hindware Home Innovation: To meet investors and analysts on Nov. 30.
E.I.D- Parry (India): To meet investors and analysts on Dec. 01.
Star Health and Allied Insurance Company: To meet investors and analysts on Dec. 07.
Bharat Forge: To meet investors and analysts on Dec. 04.
Shalby: To meet investors and analysts on Dec. 04.
Angel One: To meet investors and analysts on Dec. 04 to 07 and Dec. 12
HDFC Life Insurance Company: To meet investors and analysts on Dec. 04.
Deepak Fertilisers and Petrochemicals Corporation: To meet investors and analysts on Dec .05.
UPL: To meet investors and analysts on Dec. 04.
Can Fin Homes: To meet investors and analysts on Dec. 05.
Welspun Enterprises: To meet investors and analysts on Dec. 04.
F&O Cues
Nifty November futures rose 1.03% to 20,143 at a discount of 46.4 points.
Nifty November futures open interest fell by 25.87% by 42,308 shares.
Nifty Bank November futures rose by 1.67% to 44,717.95 at a premium of 151.5 points.
Nifty Bank November futures open interest fell by 26% by 29,483 shares.
Nifty Options Nov. 30 Expiry: Maximum call open interest at 20200 and maximum put open interest at 20,000.
Bank Nifty Options Nov. 30 Expiry: Maximum Call Open Interest at 45000 and Maximum put open interest at 43,000.
Securities in the ban period: Hindustan Copper, Manappuram Finance.
Money Market Update
The Indian rupee closed flat at 83.33 against the U.S. dollar on Wednesday.
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Stocks Trading & Speculation
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IRS gears up to go after ‘complex partnerships’ despite lack of clear definition
The IRS is getting ready to go after what it calls “large, complex partnerships” as part of its push to pursue wealthy tax cheats with tens of billions of dollars in additional funding.
The IRS plans to double audit coverage for partnerships with $10 million or more in assets by fiscal year 2025 over fiscal 2021 levels.
But new research from the government’s internal watchdog finds that the specific types of legal and commercial structures the IRS is targeting need to be more clearly defined in order to recoup the uncollected funds.
“IRS has not defined or developed guidance on what a large, complex partnership is or developed measures to ensure additional audits focus on such partnerships,” the Government Accountability Office (GAO) wrote in a report released Thursday.
Pinning down partnerships
Partnerships don’t pay taxes directly but pass their tax liability onto their owners through an IRS form K-1. They can be nested within other partnerships in networked or circular structures so complex they can resemble a tangle of spiderwebs or pieces of Byzantine jewelry.
This makes it difficult to audit them, as evidenced by atrophying audit rates.
“The lack of a definition presents a challenge as IRS seeks to increase its audit coverage of partnerships,” the report read.
In a response to the criticism, the IRS acknowledged the haziness in the definition and said it’s working to be more precise.
“We plan to perform additional research and analysis to better understand the characteristics and define partnership segments,” Douglas O’Donnell, the deputy commissioner for services and enforcement at the IRS, wrote in a letter to the GAO earlier this month.
Current IRS Commissioner Danny Werfel said earlier this month on a call with reporters that the public should expect more updates on how exactly the IRS is going after big partnerships soon.
“We’re … focused on increasing our exam coverage for complex partnerships,” Werfel said. “In our upcoming next briefing we’ll provide more details on that.”
“I’m looking forward to future updates,” he said.
Partnership boom expands the tax gap
The GAO analysis found that only 54 large partnerships out of more than 20,000 got audited in 2019, for a rate of 0.3 percent.
That is just a hair shy of the audit rate for people who make $25,000 a year or less. In 2007, the audit rate for large partnerships was more than quadruple that.
Partnerships have also exploded in recent years as a commercial designation within the economy.
In 2002, there were about 3,000 partnerships worth more than $100 million in the U.S. In 2019, there were more than six times that amount.
The number of partnerships worth between $1 billion and $5 billion dollars has increased more than tenfold during that period, and the number of partnerships worth more than $5 billion has increased more than eightfold.
Unreported business income on individual income tax — precisely the type of income that pass-through entities like partnerships allow — is one of the largest segments of the “tax gap,” the amount the government is owed in taxes each year but fails to collect.
The IRS estimated the tax gap for personal business income to be $130 billion annually for tax years 2014 to 2016, which was the last time the tax gap was formally measured, but it is likely much higher than that now.
The gross tax gap was about $500 billion in those years, but last year former IRS commissioner Charles Rettig said it could be as much as $1 trillion.
A two-tiered tax system
Tax experts have long looked askance at partnerships as a potential tax dodge.
“The IRS does not treat K-1 income the same way that it does reports of people’s wages filed on W-2 forms or the reports of income from dividends, interest, royalties and contract jobs reported on Form 1099,” veteran tax reporter David Cay Johnston wrote in a 2003 book on the U.S. tax system.
“IRS computers match every wage, dividend, interest, royalty and contract job report to what is listed on individual tax returns to make sure that every dollar earned in these ways is taxed. Not so partnership and K-1 reports,” he wrote.
The differential administrative treatment of partnership income is symptomatic of what Treasury Secretary Janet Yellen has described as the “two-tiered tax system” in the U.S.
“At the core of the problem is a discrepancy in the ways types of income are reported to the IRS: opaque income sources frequently avoid scrutiny while wages and federal benefits are typically subject to nearly full compliance,” she said in a 2021 statement on Congressional tax proposals.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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Banking & Finance
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Moving away from remote working is costing parents more than £600 extra per month in childcare, Sky News has learned.
Figures shared by Pebble, a flexible childcare service, show that half of the 2,000 parents polled said they were planning on quitting their jobs as a result.
A third said they have already moved to a company with more flexible working.
The research indicates that employers are requesting an additional two days per week in the office.
Two in five parents said they are subsequently struggling to pay the extra childcare costs.
Figures given to Sky News from the professional networking site, LinkedIn, also show that remote job postings have gone down by 28% since August 2021 - the height of the pandemic.
The number of hybrid job postings, however, has gone up by 34% compared with the same period last year.
Statistics from Adzuna, the jobs website, also show the proportion of hybrid vacancies is at nearly 20%, compared to less than 1% in January 2020.
Remote working job adverts are down to just over 5% from a peak of more than 14% in February 2021.
Kevin Ellis, chair and senior partner at PricewaterhouseCoopers, a professional services company which has 26,000 UK staff, told Sky News the company is sticking with its two to three days in the office rule.
That has not changed since 2020 because the company values what it describes as "consistency".
Mr Ellis added, however, that going into the office more would help further careers.
"I wouldn't change it from two to three days a week," he said, "because I think it's really hard to message 26,000 people a kind of moving target.
"So I'll stay with two to three days a week as our policy.
"If asked a personal question, 'what would you do to make your career more successful?'... I'd say come in more, learn through observation, learn through building networks, and actually meet your mates in the office."
Sarah, not her real name, has told Sky News she was forced to quit her job at a tech company after they rolled back on remote working.
She was recruited during COVID and worked mostly from home.
She said the company decided this year they wanted her to work from the office three days a week but because of her commute and childcare times it was "impossible".
"I literally couldn't do that job anymore. It just wasn't possible," she said.
"There are not enough hours in the day for me to be able to be a good worker, be a good mum, let alone have time for myself.
"I was sat there trying to figure out all the hours and the amount of spreadsheets... and calendars I was looking at down to the minute.
"'(I was thinking to myself) 'If I dropped (my daughter) off at that time, and I get to the train station at that time'.
"There are only a certain number of hours in the day, right?"
Read more:
'Rise in staff working from home' as cost of living bites
Zoom asks staff to return to the office
'Disaster for working parents and a disaster for the economy'
Sarah faced a four-hour long commute per day and said she "had no choice but to leave" the company she worked for.
The charity Pregnant Then Screwed is highlighting how the childcare landscape has changed dramatically since COVID.
The cost has rocketed alongside fewer available places and reduction in hours for services.
It has meant remote working has become necessary for many parents.
Joeli Brearley, founder of the charity, said a lot of people being told to return to the office would have been recruited at a time when positions were "much more flexible".
She has described it as a "disaster for working parents and a disaster for the economy".
Ms Brearley said: "To suddenly pull the rug out means that the costs for those parents will drastically increase... because you're looking at a childcare bill of £14,000 a year for a full time place."
She added: "When we know there are real issues with availability ultimately it means you have to lose your job/reduce hours because you cannot cope with the cost or get the childcare you need."
Ngaire Moyes, LinkedIn UK country manager, said the rise in hybrid working posts on the site demonstrates "just how much hybrid has become a part of mainstream working life".
She described how businesses and employees are seeking "to get the best of both worlds".
"There are many advantages to remote work, but it's not without its challenges," she continued.
"There is some work that simply lends itself better to being done in-person - be that collaborative or creative work, as well as some training and development."
She said that some feel "strongly about maintaining the flexibility they gained during the pandemic".
"It gives people a much better work life balance," she added, "and many believe they can be just as productive working from home for some of the time."
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Workforce / Labor
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WINNIPEG — Manitoba's minister responsible for the province's liquor and lotteries corporation says people who are upset they can't buy alcohol due to a strike by staff at Crown-owned liquor stores should blame "the NDP and their union friends."
Andrew Smith's comments were contained in a video that was posted Friday to the governing Progressive Conservatives' Facebook page, where he said the Opposition prevented passage of government legislation that would have allowed more private liquor sales.
"It's summertime. We know that everyone likes a nice cold drink. But unfortunately that's not going to be possible this weekend thanks to the NDP and their union friends," Smith said in the video.
"You could have had alcohol purchases in grocery stores, your local corner store. These types of changes were made possible by our PC government, but unfortunately the NDP delayed that legislation."
All Liquor Marts in Manitoba except two in Winnipeg were to be closed over the weekend due to an ongoing labour dispute. Some 1,400 workers who have been without a collective agreement for more than a year started a provincewide strike last week after the Crown-owned Manitoba Liquor and Lotteries shuttered more of its locations as contract talks stalled.
The workers had been holding short-term strikes since July, but decided to ramp up efforts after Manitoba Liquor and Lotteries failed to meet their requests.
Earlier this year, the New Democrats used procedural rules in the legislature to delay passage of two liquor bills beyond the summer break.
One of the bills would pave the way for a pilot project in which liquor would be available in more retail environments such as corner stores or grocery stores. The second bill would allow private beer vendors and specialty wine stores to sell a wider range of alcohol products.
"(NDP Leader) Wab Kinew and the union bosses don't want you, the consumer, to have choice," Smith said in Friday's video, which featured him opening a beverage at the end of it.
Under legislature rules, the Opposition can delay up to five bills beyond the summer break. Normally, that pushes back the bills' passage until the fall. But with an election this year, the delayed bills may not come to a final vote.
Voters head to the polls in a provincial election on Oct. 3, and parties are already making statements about their platforms.
Kinew posted a short video statement on Sunday saying Premier Heather Stefanson could end the strike today.
"If I were the premier of Manitoba, I would ensure that you, the people of Manitoba get your beer. And I would ensure that people who serve it to you are paid a fair wage. It's that simple," Kinew said in the video.
Smith's video appeared to conflict with remarks reported in other media by Stefanson on Friday, in which she accused the striking workers' union of "politicizing" the issue. An interview request to Smith was passed on to the PC Party, which did not immediately respond to a request for comment on Monday.
The president of the Manitoba Government and General Employees' Union said last week the latest contract offer was for four years with two per cent wage hikes each year and some wage adjustments to compensate for minimum wage in the province going up to $15.30 this fall.
Christopher Adams, an adjunct professor of political studies at the University of Manitoba, said the PCs have been focusing on the NDP's ties to organized labour, and the strike at liquor stores is one that affects people closely.
Adams said a lot of people view two per cent annual increases as small compared to inflation, but those opinions could change if the strike continues.
"It depends how the middle class will perceive it over the next month," Adams said. "And I think the longer it goes for, the more chance it will start bending towards the PC's side of things as people become more affected by the strike."
Lisa Naylor, the NDP critic for Manitoba Liquor and Lotteries, said her party delayed the legislation that would have allowed more private liquor sales because it felt the issue needed more study.
Naylor said there were concerns about alcohol being available for sale in corner stores such as 7-Eleven, where families shop.
"I think Manitobans are losing patience with a government that is so bent on interfering in the fair bargaining process and doesn't care about workers, and continues to pick fights with workers, especially low-paid workers," Naylor said in an interview.
"So far, folks are supporting the workers. That's what we just keep seeing everywhere."
—By Rob Drinkwater in Edmonton.
This report by The Canadian Press was first published Aug. 14, 2023.
The Canadian Press
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Consumer & Retail
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Online marketplace Etsy has said it will change its policy after sellers complained of money being held.
The U-turn comes after the BBC reported that some sellers had 75% of their money frozen for 45 days.
Etsy said it was "substantially decreasing" the amount of money it would put on hold but did not state the new rate or time frame.
Sellers like Dan, who said said Etsy had £7,000 of his takings on hold, said the announcement "lacked detail".
Small business commissioner Liz Barclay told the BBC that sellers were "very disappointed" that the statement from Etsy was unclear.
"I have asked Etsy to explain what we tell sellers about the level of the reduction in reserves they might expect and when this will happen," she said.
On Monday, the BBC reported that hundreds of Etsy sellers had received an email from the website notifying them it was actioning its "reserve system".
Etsy told the BBC payment reserves were used to "keep the marketplace safe" and cover any potential refunds.
Dan, who sold made-to-order wood furniture told the BBC: "Etsy are holding around £7,000 of my money, leaving us to use credit cards and family loans to try and keep our business running and keep food on the table."
Ceramics seller Rachel Collyer said Etsy was holding £899 of her money, which meant she cannot afford to buy materials to keep producing.
'Pain points'
On Wednesday, in an update issued to sellers from head of payment policy Chirag Patel, Etsy said it was addressing the "pain points" of the reserve system for sellers.
Part of the changes, the company said, include "improving communications" to new sellers who are in reserve.
Ms Barclay said she had asked Etsy if sellers would have a direct contact for referring their complaints regarding the reserve.
"We are getting very anxious about the possibility that while we wait for resolution of these issues talented and crucial small and micro businesses are going to the wall," said Ms Barclay told the BBC.
Minister for Enterprise, Markets and Small Businesses Kevin Hollinrake wrote to Etsy's chief executive Josh Silverman on Wednesday, asking for the company to address the issue after a "rising number of enquires and complaints" from sellers.
"It is critical that Etsy's approach does not jeopardise the livelihood of reputable and otherwise viable small businesses," Mr Hollinrake wrote in a letter seen by the BBC.
Furniture-maker Dan said he was "sceptical" that the changes would be implemented and that the notice from Etsy "lacked detail".
"I don't believe a word of it," he said.
What is Etsy and who owns it?
Etsy is an online marketplace that allows independent sellers to set up their own shop. It specialises in bespoke items, handicrafts or things not usually available in High Street shops.
Etsy Inc. is a US-based company which trades its shares on the NASDAQ stock exchange in New York, where it listed its stock in 2015. Etsy's shares currently trading at $99 each - a far cry from an all time high of $294 during the Covid pandemic in 2021.
Its biggest shareholders are major financial institutions such as Vanguard Group, BlackRock and JP Morgan.
The company is led by chief executive Josh Silverman who has worked at an eclectic mix of businesses such as online auction site eBay, the internet chat firm Skype and American Express. He has been chief executive since 2017.
It was originally founded in 2005 by Rob Kalin, Chris Maguire, Haim Schoppik and Jared Tarbell who started the business from Mr Kalin's Brooklyn apartment. None of them remain with the firm.
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Consumer & Retail
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New population and migration figures from the Office for National Statistics show no sign of an end to UK population growth. Read our statement.
On 23rd November, the UK’s Office for National Statistics issued updated figures for the population of England and Wales, and for long-term migration. They showed that in mid-2022, there were 60.2 million people in England and Wales, an increase of around 578,000 (1.0%) since mid-year 2021. Births were up slightly on the previous year.
On migration, ONS calculations were based on new methods, and estimated that long-term immigration for year ending June 2023 was 1.2 million (long-term means with an intention to stay for more than one year). 508,000 people emigrated from the UK, meaning that net migration was 672,000.
The most recent ONS UK-wide population projections are from 2022, and may be revised upwards following these figures. They projected a total population of 69.3m in 2030 and 70 million in 2036.
our media statement
The population of England and Wales has topped 60 million for the first time, and the growth rate for the year to mid-2022 was the highest for more than 60 years. That just can’t go on. People know that a bigger population means more pressure on land, water, hospital beds, school places and public transport; more pollution, greater congestion and increasing climate emissions; and less space, less greenery, and a lower quality of life for current and future generations.
In that context, what we need, but almost certainly won’t have, is an informed, rational debate about what these numbers mean, all their implications, and what we do about them. Instead, we’re likely still to see ill-informed alarmism about low birth rates which ignores all the negative effects of population growth, as well as the available, practical policy solutions to an ageing population. We’ll also see some people leaping on these figures to justify a xenophobic anti-immigration agenda, while others will accuse everyone rightly concerned about growing population of having a xenophobic anti-immigration agenda.
We have to do better.
These figures show interesting nuances, which are likely to get lost among the rhetoric – birth rates have gone up slightly, while net migration has increased significantly, but less than ONS expected. At Population Matters, we’re campaigning for a statutory advisory body to provide independent advice to the government on demographic change, based on evidence, not ideology or politics. It’s our firm position that population growth in the UK is unsustainable for multiple reasons, but let’s all recognise that the first thing we need is a rational debate.
Taking action
Population Matters has long been calling for the UK to adopt a Sustainable Population Policy. Politicians have not been receptive, however. we believe this is partly as a result of poor understanding of the issue, as well as sensitivity about issues to do with family and migration.
In addition to our overall ask, we are now calling for an official independent advisory group to provide guidance to the government. We have written to the Prime Minister, other party leaders and, today, MPs on Parliament’s Home Affairs Committee to press this case. Please support our call by contacting politicians, including your own MP.
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United Kingdom Business & Economics
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News of Rep. Chris Stewart’s plans to retire from Congress set off a three-week mad dash by nearly a dozen Republicans to qualify for the September primary. The trio of Republicans who will be on that ballot raised more than $600,000, according to campaign finance disclosures filed with the Federal Election Commission.
Campaign cash
Becky Edwards was the first Republican to start campaigning for Stewart’s soon-to-be vacant seat, registering her campaign with the Federal Election Commission just days after news of his departure broke. She reported just over $207,000 in contributions from individuals, most from in-state donors.
GOP convention winner Celeste Maloy pulled in just over $72,000 in donations, with just over $50,000 coming from individuals. The largest chunk of Maloy’s campaign cash came from Utahns, which comprised about a third of the total.
The remaining $22,000 in donations to Maloy came from political action committees, including $15,000 from Value In Electing Women, or VIEW PAC, which was formed to help elect Republican women to federal office.
Bruce Hough reported a little less than $60,000 in donations to his campaign, nearly all from in-state contributors.
Campaign debt and personal loans
Maloy’s campaign finished June with nearly as much campaign debt as she has cash on hand. Maloy reported $41,490 in cash and $41,432 in outstanding debt. Maloy owes Texas-based KAP Strategies nearly $25,000 for campaign management and more than $10,000 for website design and software services.
Bruce Hough loaned his campaign just over $200,000. That loan accounts for more than 75% of the total donations to his campaign.
Becky Edwards added $100,000 of her own money to the District 2 race. That’s on top of the $527,000 she loaned her 2022 U.S. Senate campaign against Sen. Mike Lee.
Paying for signatures
Edwards and Hough qualified for the ballot by submitting 7,000 signatures from registered Republican voters in the 2nd District. Gathering those signatures did not come cheap.
Edwards supplemented her volunteer effort with paid signature gatherers. Edwards used Utah-based Landslide Political for signature gathering, which cost $31,700. Her campaign also listed $2,948 in payments to individuals for signature gathering.
Hough reported paying a professional signature-gathering firm $167,000 to secure his spot on the ballot, which is nearly $24 per signature.
Prominent donors
Super Bowl-winning Kansas City Chiefs coach Andy Reid and his wife Tammy each donated the maximum amount of $9,900 to Edwards’ campaign. Edwards’ husband, John, is the son of former BYU football Coach LaVell Edwards. Reid played for Edwards and later was a graduate assistant coach on his staff.
Emmy Award-winning dancer and actor Derek Hough made a pair of donations to his father’s campaign totaling $4,130. In the June report, his sister and fellow professional entertainer Julianne was not listed among the contributors to Hough’s campaign.
The also-rans
Eight Republican candidates were knocked out of the race at the GOP convention in Delta last month. Most did not file financial disclosures because they didn’t raise or spend above the $5,000 FEC threshold for reporting.
Former House Speaker Greg Hughes raised more than $107,000 in his losing effort. Hughes banked maximum contributions from House Speaker Brad Wilson, House Majority Leader Mike Schultz, and their spouses. Those contributions were among the $44,000 refunded following Hughes’ convention loss to Maloy.
Over half of the nearly $46,000 raised by economics professor Henry Eyring during his three-week campaign came from donors in California. He listed two expenditures during the reporting period related to a local television ad buy on Fox News. Eyring paid $7,000 to produce the commercial and $7,600 for the airtime.
Leeds Mayor Bill Hoster reported just over $22,000 in donations to his campaign, but most of those were in-kind donations from a Nevada campaign firm linked to the far-right Proud Boys militia. Just four people donated a total of $3,000 to his campaign.
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Banking & Finance
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Mastercard ventures further into the blockchain space. The second-largest payment processor worldwide has just announced a plan to roll out the Multi-Token Network (MTN), tailored for the payment processing and banking industries. The MTN will provide the blockchain framework for secure, scalable, and interoperable transactions, contributing to more efficient payments and settlements.
The release names four “pillars of trust” built into the network that address key industry needs:
- trust in counterparty, related to identity and permissions management with Mastercard Crypto Credentials,
- trust in digital payment asset, based on stable and regulated tokens for payment and other financial applications, including deposit platforms,
- trust in technology, resulting from the reliability of scalable and interoperable blockchain networks,
- and trust in consumer protection, based on Mastercard’s standards and rules for the company’s card network, prioritizing consumer protection and regulatory compliance.
– We believe that digital asset and blockchain technologies today are on a similar trajectory, one day becoming critical infrastructure for storing and moving value. In bringing the power of 24/7 operations, programmability and immutability to all aspects of the economy, blockchain capabilities and tokenization can reach their full potential, delivering true transformation – Raj Dhamodharan, the head of crypto and blockchain at Mastercard, said in the release.
The MTN pilot project, described by Dhamodharan as an “app store powered by blockchain technologies for building regulated financial applications,” will launch this summer in the UK, with a number of banks and financial institutions invited to participate. The beta will provide programmers with app development tools created by Mastercard in the past few months.
The MTN project follows other recent Mastercard initiatives. Earlier in June, the giant announced a collaboration with several NFT and Web3 platforms to enable NFT purchases with Mastercard cards. In April, the company launched a Crypto Card Program “that enables simple & real-time use of digital currency for consumers.” In the same month, it announced Mastercard Crypto Credential – a set of verification standards enabling trusted interactions between users and businesses, now to be used in the MTN beta.
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Banking & Finance
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Subsets and Splits
List Unique Topics
Simple retrieval of unique topics from the dataset, useful for basic exploration but lacks deeper insights.