Fewer Americans got laid off last week. What does that mean for New York?

The city’s companies are hanging on to their workers To view the full story, click the title link......»»

Category: blogSource: crainsnewyorkNov 24th, 2021

I"m a former restaurant manager who quit the industry to become an Uber Eats driver. I earn the same amount of money and I get to spend more time with my kids.

After nearly 30 years managing restaurants, I've left the industry to become a food-delivery driver and don't plan to return. Michael Urbach spent nearly three decades managing restaurants – but he left the industry during the pandemic, and doesn't plan to return.Courtesy of Michael Urbach Michael Urbach spent nearly 30 years in the restaurant industry before becoming an Uber Eats driver. He said he can't imagine ever returning to hospitality. Urbach spoke to Insider's Grace Dean about why he made the move. This as-told-to article is based on a conversation with Michael Urbach, a 51-year-old Uber Eats driver in the Los Angeles area. It has been edited for length and clarity.I've spent nearly three decades managing restaurants — but I left the industry during the pandemic, and don't plan to return.I'm now an Uber Eats driver and roughly the same amount of money but have much more flexible hours. This means I get to spend more time with my kids. And my overall quality of life is much better, too.I started out as a server straight out of high school, and began managing restaurants aged 23. Since then, I've been a general manager at a range of full-service and quick-service restaurants, including some well-known chains.But when the pandemic hit in March 2020, the restaurant I managed closed down and the industry was in turmoil as restaurants laid off workers or reduced their hours. No one was hiring, and I couldn't get a job.So I started working as an Uber Eats driver in September 2020 following a recommendation from a friend.It was amazing to see how quickly I was able to make money, though my income can change drastically week-to-week.I earned around $3,600 in February 2020 when I worked in the restaurant industry. As an Uber Eats driver I earned on average around $1,250 a week in April 2021 and $900 a week in October 2021. (Insider viewed documentation verifying Urbach's earnings.)I have two young kids and share looking after them with their mother. I generally take care of them for a week at a time, and I'm now able to balance my schedule much more easily. When I look after my kids I take weekends off and work just five or six hours while they're at school. And when I don't have my kids I work from roughly 7 a.m. to 9 p.m. every day.And my phone doesn't ring at weekends, either. I have my weekends with my kids and there is nothing that distracts me from them.In my former jobs, I was lucky if I got a week where I worked fewer than 45 hours. I often worked until 11 p.m. or midnight. Fortunately family could watch my kids, but otherwise childcare would have cost me a fortune.Some of the restaurants I worked at weren't open as late, and I was able to have better shift patterns, but these roles often meant taking a pay cut.And as a general manager in the restaurant industry, you're committed to your job 24 hours a day. The only stress-free days I had were Christmas Day and Thanksgiving, when restaurants usually shut.Restaurant staffing has always been a problem in my nearly 30 years of working in the industry. It's an industry with an incredibly high turnover rate because most people don't plan on having a career there and just see it as a stepping stone.The understaffing has got much worse over recent months, though. The pandemic has made more hospitality staff realize that they're underpaid, working long and unsocial hours, and dealing with rude managers and customers on a daily basis.And now people don't want to work in the industry any more.Restaurants are closing early or for whole days, or shutting their dining rooms because they can't find enough workers, and the remaining staff are overworked.I do believe what we are seeing happen is a change in the industry, which should have come many years ago. We are going to see many restaurants changing the way they do business or just going out of business altogether.Have you got a story about the labor shortage? Email this reporter at the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 28th, 2021

China has surpassed the US as the world"s biggest box office. Here"s the government"s 5-year plan for its movie industry.

The Chinese government laid out its five-year plan for its film industry this week as it seeks to cement itself as a cultural power. "The Battle at Lake Changjin"Bona Film Group The Chinese government laid out a five-year plan for its film industry this week. China surpassed the US as the world's biggest box office during the pandemic. Experts say that China no longer needs Hollywood, and that fewer Hollywood movies could be released there. China surpassed the US as the world's largest theatrical market last year, thanks mostly to local productions that helped it rebound quickly from months-long, pandemic-related shutdowns.Its government intends to keep the box-office crown.The China Film Administration recently laid out its five-year plan, in which it pledges to turn China into a "strong cultural power" by "adhering to the Party's total leadership over film work," according to Variety. Deadline noted that the plan was highlighted during last week's plenary session of China's Communist Party.Variety reported that the plan includes:Releasing 50 films per year that gross at least $15.7 millionReleasing at least 10 movies per year that are "critically acclaimed and popular"Local films accounting for more than 55% of total box office per yearHaving 100,000 theater screens by 2025, an increase from 77,000 currentlyEstablishing a "national high-tech film research laboratory""Promoting the overall improvement of the level of film special effects through the vigorous support of sci-fi films"Overall, Chinese productions should illustrate a "trustworthy, lovable, and respectable image of China," the plan said.The plan reflects steps that the Chinese government has already taken to control the film market.In a recent conversation with Insider, Aynne Kokas — a media studies professor at the University of Virginia and the author of the book "Hollywood Made in China" — observed a "widespread tightening" of Chinese media and the movie industry.Simu Liu plays Shang-Chi.Walt Disney Studios Motion PicturesIt's particularly impacted Hollywood releases. No Marvel movies have been approved for release in China this year, from "Shang-Chi" to "Eternals," amid controversies that have sparked the ire of some Chinese nationalists.Kokas predicted that fewer Hollywood films would be approved in China in the years to come, and those that are would face stricter regulations. China currently has a 34-film quota on foreign releases.Chris Fenton, a film producer and author of the book "Feeding the Dragon," noted that the China market is "moving away from Hollywood.""They don't need Hollywood to fill seats anymore," Fenton said. "'The Battle at Lake Changjin' can do that.""The Battle at Lake Changjin" is a Chinese war film that has grossed $882 million so far from only China, making it the highest-grossing film in the world this year. It's set to be released in other markets soon, like the US and UK. "Godzilla vs. Kong"Warner Bros.Chinese films have carried the region's box office during the pandemic. Aside from "Fast 9" and "Godzilla vs. Kong," Hollywood films have largely stumbled.If the Chinese government wants the country's own films to account for 55% of its annual box office, that shouldn't be too difficult moving forward. They made up 50% of the Chinese box office in 2016, 60% in 2018, and 85% in 2020, according to the research firm Ampere Analysis.A major part of the Chinese government's theater expansion plans, and its quest to improve its technological prowess, could be Imax, the film technology company that specializes in high-quality cameras and projection systems. CEO Richard Gelfond told Insider during a recent interview that the China market could support 1,300 Imax theaters. There are currently 750 in the region.The company has embraced Chinese films in recent years. "The Battle at Lake Changjin" was filmed with Imax cameras. "Our brand grew up with the Chinese film industry to a certain extent," Gelfond said.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 17th, 2021

I"m striking at John Deere. We"re tired of layoffs and benefit losses while the company hits record profits.

"You might think, 'Oh, they're just greedy, they want more money,'" a striking John Deere worker told Insider. "But nobody's getting rich here." John Deere workers on strike on October 15, 2021 in Davenport, Iowa. Scott Olson/Getty Images More than 10,000 John Deere workers are on strike after rejecting a six-year union contract with the company. One longtime employee told Insider about their experience with the strike and why they voted for it in the first place. This is their story, as told to freelance writer Jamie Killin. This as-told-to essay is based on a transcribed conversation with one of the 10,000 John Deere employees currently on strike, whose employment has been verified by Insider. It has been edited for length and clarity.I've worked at John Deere for 17 years on the line, and now I'm on strike fighting for fair wages and benefits for myself and future generations.Nearly two weeks ago, more than 10,000 John Deere workers - including me - began our strike. About 90% of union members rejected a proposed six-year contract just before the strike began. We feel like the company owes us more. We worked through the COVID-19 pandemic, John Deere is reporting record profits, and workers are pivotal to that. We simply want to protect ourselves and our futures.I think the supply shortages we're facing have played a role in the strike. People are getting tired of the cycle: We'll have layoffs one day, and then the next day we're working. Then we don't have parts for three days, and then our bosses will schedule us on a Saturday so we can get just one more unit out. Then we start the whole process back over on Monday.I understand that John Deere is running a business. But when you get into constant scheduling and cancellations at the last minute, that's not necessarily running a business. That's trying to scrape by.The companies that we work for have never had trouble getting applicants, until nowThe industry norm - always having more than enough applicants - has changed lately, much like it has in many other industries, where workers are quitting in droves. I think when I joined the company in 2004, I was one of 200 hired that month - and that's not to exclude the hundreds and hundreds and hundreds of applicants who didn't even make it through the hiring process.Now, they're holding job fairs and I've heard they're getting five people to show up. Maybe 10. I don't blame people for not showing up. If you have years of experience and two weeks of vacation at your current job, you're taking a big gamble coming into a company like Deere where you have very little vacation for the first year, you're low on seniority, and the wages are no better than what you're already making.John Deere hires during upticks in the economy and upticks in production, then a few years later, they lay off. We work with guys who have been hired and laid off a couple times, and they don't want to do it again.I voted for the strike because if the strike authorization doesn't pass, then you have no bargaining power. You have nothing to fall back on. The company can offer you any contract they want but you have no strike authorization, so you either accept it or that's it.The contract we got from John Deere just wasn't good enoughIn early October, our union - the United Auto Workers - came to an agreement with John Deere for a new six-year contract, but the majority of John Deere workers, including myself, rejected it.The rejected contract included UAW-represented employees 5% to 6% wage increases, as well as 3% increases in 2023 and 2025. But for workers hired after Nov. 1, John Deere would trade our pension plan for a 401(k).I support the local union 100%, but I was a bit taken aback that the bargaining committee believed that what they were presenting to us was a good contract based on the employee surveys.The union handed out surveys to people to list their top five things that they'd like to see when it came bargaining time, and it seemed like none of those were addressed. I think it was unanimous that we wanted post-retirement healthcare and post-retirement pension and wages. There was some beneficial stuff in there, but one of the top things we wanted was higher wages. But 5%? Prices are up 5.4% this year alone.I had a gentleman I work with tell me his father retired from Deere 35 years ago, and we are still not at the wages his father was at 35 years ago. Sure, $20 an hour back in the 80s was a lot of money. But when you factor in the cost of inflation, housing, food, gas, and everything else, it doesn't go very far in 2021.There's also a lot of animosity because of the different tiers of employees There's still a lot of animosity over what they call pre-97 and post-97 employees - those who were hired before 1997 with more benefits, and those hired after with fewer benefits.They're trying to do something similar now. One of the things that was presented in this new contract was that anyone hired after November 2021 was going to lose benefits, like the pensions, and a lot of the membership didn't feel that was right. There's a saying that goes, "You're not borrowing things from your parents; you're giving them to your children."That doesn't necessarily mean my children, but anybody in the community from years on down. I don't want to be one of the guys in 15 years who everybody looks at and has animosity toward because we voted in a contract that we knew wasn't in the best interest of everybody. The union is not an individual; it's about the whole.So far during the strike, community and membership support has been fantastic That's obviously just at the current moment. We haven't been on strike that long. Temperatures are still nice. It's new to everybody. Nobody's really had an effect in their paycheck. We did receive a check last week. We'll receive a partial check next week. So, we'll kind of see how it goes from here.With social media, the wage workers have had the opportunity to speak out for themselves on things that were maybe misrepresented elsewhere.A lot of the membership has been very upset, because you get bad press in that everybody looks at the Deere workers and thinks, "Oh, they're just greedy, they want more money."But they don't understand that it's not like we make a substantial amount of money. I mean, nobody's getting rich here, and if you do make more money, it's because you work so much that you might as well live here.John Deere used to be a company where one family member could work and support a family comfortably - maybe not extravagantly, but comfortably. Now, I'd say that most families require a two-income household. You wouldn't think it would need to be like that when you're working for a multi-billion-dollar business.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 28th, 2021

Alaska Airlines denies a labor shortage is behind it reducing flights to Seattle, disputing a claim by a Kansas airport

Wichita Airport said Alaska was cutting some flights to Seattle, Washington, "due to labor shortages." Alaska said it was a standard seasonal change. Wichita Airport said Alaska Airlines was cutting some services from the Kansas city to Seattle "due to labor shortages." Bruce Bennett/Getty Images Wichita Airport said Alaska Airlines was cutting some flights to Seattle "due to labor shortages." Alaska has denied this, and said the flight reductions were "standard seasonal operation changes." The airline is operating two flights fewer from Wichita to Seattle each week in December. Alaska Airlines is operating fewer flights between Wichita, Kansas, and Seattle, Washington, for November and December.Wichita Dwight D. Eisenhower National Airport said in an update earlier in October that this was "due to labor shortages," without elaborating - but Alaska denied the change was related to staffing in a statement to Insider."This is part of standard seasonal operation changes and is not a reflection on staffing changes," a spokesperson said.The airline usually runs a flight from Wichita to Seattle every day, but it's cutting its Saturday flight in November and December as well as its Tuesday service in December, Wichita Airport said.Alaska's website shows that direct flights from Wichita to Seattle aren't available on these days.The news was first reported on by Wichita Business Journal.Seattle is the only route Alaska operates from Wichita Airport, and Alaska is the only airline with direct flights between the two cities.In August, just over 2,000 passengers flew from Wichita on Alaska flights.The US is suffering from a labor shortage that's hitting industries ranging from education and healthcare to trucking and restaurants. Record numbers of Americans have been quitting their jobs in search of better wages, benefits, and working conditions.Airlines laid off workers or put them on extended leave when the pandemic brought travel to a halt. Travel has rebounded with the rollout of the coronavirus vaccine and the reopening of travel corridors, and airlines have been scrambling to get enough pilots, flight attendants, and support staff to meet surging demand. American Airlines canceled around 400 flights over a three-day period in June because of staffing shortages and maintenance issues. Spirit Airlines also canceled hundreds of flights in August due to a combination of bad weather, system outages, and staffing issues.Both sets of cancellations were exacerbated by factors beyond just understaffing, and flights were canceled with little notice.This article has been updated to include Alaska's response.Do you work at Alaska Airlines? Got a story to share? Email this reporter at Always use a non-work email.Expanded Coverage Module: what-is-the-labor-shortage-and-how-long-will-it-lastRead the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 21st, 2021

Transcript: Soraya Darabi

     The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This… Read More The post Transcript: Soraya Darabi appeared first on The Big Picture.      The transcript from this week’s, MiB: Soraya Darabi, TMV, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ BARRY RITHOLTZ, HOST, MASTERS IN BUSINESS: This week on the podcast, I have an extra special guest. Her name is Soraya Darabi. She is a venture capital and impact investor who has an absolutely fascinating background working for, first with the New York Times Social Media Group then with a startup that eventually gets purchased by OpenTable, and then becoming a venture investor that focuses on women and people of color-led startups which is not merely a way to, quote-unquote, “do good” but it’s a broad area that is wildly underserved by the venture community and therefore is very inefficient. Meaning, there’s a lot of upside in this. You can both do well and do good by investing in these areas. I found this to be absolutely fascinating and I think you will also, if you’re at all interested in entrepreneurship, social media startups, deal flow, how funds identify who they want to invest in, what it’s like to actually experience an exit as an entrepreneur, I think you’ll find this to be quite fascinating. So with no further ado, my conversation with TMV’s Soraya Darabi. VOICEOVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. My special guest this week is Soraya Darabi. She is the Co-Founder and General Partner of TMV, a venture capital firm that has had a number of that exits despite being relatively young, 65 percent of TMV’s startups are led by women or people of color. Previously, she was the cofounder of Foodspotting, an app named App of the Year by Apple and Wire that was eventually purchased by OpenTable. Soraya Darabi, welcome to Bloomberg. SORAYA DARABI; GENERAL PARTNER & FOUNDER; TMV: My goodness, Barry, thank you for having me. RITHOLTZ: I’ve been looking forward to this conversation since our previous discussion. We were on a Zoom call with a number of people discussing blockchain and crypto when it was really quite fascinating and I thought you had such an unusual and interesting background, I thought you would make a perfect guest for the show. Let’s start with your Manager of Digital Partnerships and Social Media at the “New York Times” when social media was really just ramping up. Tell us about what that was like. Tell us what you did in the late aughts at The Times. DARABI: Absolutely. I was fresh faced out of a university. I had recently graduated with mostly a journalism concentration from Georgetown and did a small stint in Condé Nast right around the time they acquired Reddit for what will soon be nothing because Reddit’s expecting to IPO at around 15 billion. And that experience at Reddit really offered me a deep understanding of convergence, what was happening to digital media properties as they partnered for the first time when nascent but scaling social media platforms. And so the “New York Times” generously offered me a role that was originally called manager of buzz marketing. I think that’s what they called social media in 2006 and then that eventually evolved into manager of digital partnerships and social media which, in essence, meant that we were aiming to be the first media property in the world to partner with companies that are household names today but back in the they were fairly unbalanced to Facebook and Twitters, of course, but also platforms that really took off for a while and then plateaued potentially. The Tumblers of the world. And it was responsibility to understand how we could effectively generate an understanding of the burgeoning demographics of this platform and how we could potentially bring income into The Times for working with them, but more importantly have a journalist that could authentically represent themselves on new media. And so, that was a really wonderful role to have directly out of University and then introduce me to folks with whom I still work today. DARABI: That’s quite interesting. So when you’re looking at a lot of these companies, you mentioned Facebook and Twitter and Tumbler, how do you know if something’s going to be a Facebook or a MySpace, so Twitter or a Tumbler, what’s going to survive or not, when you’re cutting deals with these companies on behalf of The Times, are you thinking in terms of hey, who’s going to stick around, wasn’t that much earlier that the dot-com implosion took place prior to you starting with The Times? DARABI: It’s true, although I don’t remember the dot-com implosion. So, maybe that naivete helped because all I had was enthusiasm, unbridled enthusiasm for these new companies and I operated then and now still with a beta approach to business. Testing out new platforms and trying to track the data, what’s scaling, what velocity is this platform scaling and can we hitch a ride on the rochet ship if they will so allow. But a lot of our partnerships then and now, as an investor, are predicated upon relationships. And so, as most, I think terrific investors that I listen to, who I listen to in your show, at least, will talk to you about the importance of believing and the founder and the founder’s vision and that was the case back then and remains the case today. RITHOLTZ: So, when you were at The Times, your tenure there very much overlapped the great financial crisis. You’re looking at social media, how did that manifest the world of social media when it looked like the world of finance was imploding at that time? DARABI: Well, it was a very interesting time. I remember having, quite literally, 30-second meetings with Sorkin as he would run upstairs to my floor, in the eighth floor, to talk about a deal book app that we wanted to launch and then he’d ran back down to his desk to do much more important work, I think, and — between the financial crisis to the world. So, 30-second meetings aside, it was considered to be, in some ways, a great awakening for the Web 2.0 era as the economy was bottoming out, like a recession, it also offered a really interesting opportunity for entrepreneurs, many of whom had just been laid off or we’re looking at this as a sizeable moment to begin to work on a side hustle or a life pursuit. And so, there’s — it’s unsettling, of course, any recession or any great awakening, but lemonade-lemons, when the opening door closing, there was a — there was a true opportunity as well for social media founders, founders focusing on convergence in any industry, really, many of which are predicated in New York. But again, tinkering on an idea that could ultimately become quite powerful because if you’re in the earliest stage of the riskiest asset class, big venture, there’s always going to be seed funding for a great founder with a great idea. And so, I think some of the smartest people I’d ever met in my life, I met at the onset of the aftermath of that particular era in time. RITHOLTZ: So you mentioned side hustle. Let’s talk a little bit about Foodspotting which is described as a visual geolocal guide to dishes instead of restaurants which sounds appealing to me. And it was named App of the Year by both Apple and Wired. How do you go from working at a giant organization like The Times to a startup with you and a cofounder and a handful of other coders working with you? DARABI: Well, five to six nights a week after my day job at the “New York Times,” I would go to networking events with technologists and entrepreneurs after hours. I saw that a priority to be able to partner from the earliest infancy with interesting companies for that media entity. I need to at least know who these founders were in New York and Silicon Valley. And so, without a true agenda other than keen curiosity to learn what this business were all about, I would go to New York tech meetup which Scott Heiferman of who’s now in charge LP in my fund would create. And back then, the New York Tech Meetup was fewer than 40 people. I believe it’s been the tens of thousands now. RITHOLTZ: Wow, that’s … DARABI: In New York City alone. And so, it was there that I met some really brilliant people. And in particular, a gentleman my age who’s building a cloud-computing company that was essentially arbitraging AWS to repopulate consumer-facing cloud data services for enterprises, B2B2C play. And we all thought it would be Dropbox. The company ultimately wasn’t, but I will tell you the people with whom I worked with that startup because I left the “New York Times” to join that startup, to this day remain some of the most successful people in Silicon Valley and Alley. And actually, one of those persons is a partner at our firm now, Darshan. He was the cofounder of that particular company which is called but I stayed there very quickly. I was there for about six months. But at that startup, I observed how a young person my age could build a business, raise VC, he was the son of a VC and so he was exceptionally attuned to the changing landscape of venture and how to position the company so that it would be attractive to the RREs of the world and then the DFJs. And I … RITHOLTZ: Define those for us. RREs and BFJs. DARABI: Sorry. Still, today, very relevant and very successful venture capital firms. And in particular, they were backing a lot of the most interesting ideas in Web 2.0 era when I joined this particular startup in 2010. Well, that startup was acquired by Facebook and I often say, no, thanks to me. But the mafia that left that particular startup continues to this day to coinvest with one another and help one another’s ideas to exceed. And it was there that I began to build the confidence, I think, that I really needed to explore my own entrepreneurial ideas or to help accelerate ideas. And Foodspotting was a company that I was advising while at that particular startup, that was really taking off. This was in the early days of when Instagram was still in beta and we observed that the most commonly posted photos on Instagram were of food. And so, by following that lead, we basically built an app as well that activity that continues to take place every single day. I still see food photos on Twitter every time I open up my stream. And decided to match that with an algorithm that showed folks wherever they were in the world, say in Greece, that might want spanakopita or if I’m in Japan, Okinawa, we help people to discover not just the Michelin-rated restaurants or the most popular local hunt in New York but rather what’s the dish that they should be ordering. And then the app was extremely good was populating beautiful photos of that particular dish and then mirroring them with accredited reviews from the Zagats of the world but also popular celebrity shots like Marcus Samuelsson in New York. And that’s why we took off because it was a cult-beloved app of its time back when there were only three geolocation apps in the iTunes apparently store. It was we and Twitter and Foursquare. So, there was a first-mover advantage. Looking back in hindsight, I think we sold that company too soon. OpenTable bought the business. A year and a half later, Priceline bought OpenTable. Both were generous liquidity events for the founders that enabled us to become angel investors. But sometimes I wish that that app still existed today because I could see it being still incredibly handy in my day-to-day life. RITHOLTZ: To say the least. So did you have to raise money for Foodspotting or did you just bootstrapped it and how did that experience compare with what that exit was like? DARABI: We did. We raised from tremendous investors like Aydin Senkut of Felicis Ventures whom I think of as being one of the best angel investors of the world. He was on the board. But we didn’t raise that much capital before the business is ultimately sold and what I learned in some of those early conversations, I would say, that may have ultimately led to LOIs and term sheets was that so much of M&As about wining and dining and as a young person, particularly for me, you and I discussed before the show, Barry, we’re both from New York, I’m not from a business-oriented family to say the least. My mom’s an academic, my father was a cab driver in New York City. And so, there are certain elements of this game, raising venture and ultimately trying to exit your company, that you don’t learn from a business book. And I think navigating that as a young person was complicated if I had to speak economically. RITHOLTZ: Quite fascinating. What is purposeful change? DARABI: Well, the world purpose, I suppose, especially in the VC game could come across as somewhat of a cliché. But we try to be as specific as possible when we allude to the impact that our investment could potentially make. And so, specifically, we invest in five verticals at our early stage New York City-based venture fund. We invest in what we call the care economy, just companies making all forms of care, elder care to pet care to health care, more accessible and equitable. We invest in financial inclusion. So this is a spin on fintech. These are companies enabling wealth creation, education, and most importantly literacy for all, that I think is really important to democratization of finance. We invest in the future of work which are companies creating better outcomes for workers and employees alike. We invest in the future of work which are companies creating better outcomes for workers and employers alike. We invest in purpose as it pertains to transportation. So, not immediately intuitive but companies creating transparency and efficiency around global supply chain and mobility. I’m going to talk about why we pick that category in a bit. And sustainability. So, tech-enabled sustainable solutions. These are companies optimizing for sustainability from process to product. With these five verticals combined, we have a subspecies which is that diverse founders and diverse employee bases and diverse cap table. It is not charity, it’s simply good for business. And so, in addition to being hyper specific about the impact in which we invest, we also make it a priority and a mandate at our firm to invest in the way the world truly look. And when we say that on our website, we link to census data. And so, we invest in man and women equally. We invest in diverse founders, almost all of the time. And we track this with data and precious to make sure that our investments reflect not just one zip code in California but rather America at large. RITHOLTZ: And you have described this as non-obvious founders. Tell us a little bit about that phrase. DARABI: Well, not obvious is a term you hear a lot when you go out to Silicon Valley. And I don’t know, I think it was coined by a well-known early PayPal employee turned billionaire turned investor who actually have a conference centered around non-obvious ideas. And I love the phrase. I love thinking about investment PC that are contrary because we have a contrary point of view, contrarian point of view, you often have outlier results because if you’re right, you’re taking the risk and your capturing the reward. When you’re investing in non-obvious founders, it should be that is the exact same outcome. And so, it almost sort of befuddled me as a person with a hard to pronounce name in Silicon Valley, why it was that we’re an industry that prides itself on investing in innovation and groundbreaking ideas and the next frontier of X, Y, and Z and yet all of those founders in which we were investing, collectively, tended to kind of look the same. They were coming from the same schools and the same types of families. And so, to me, there was nothing innovative at all about backing that Wharton, PSB, HBS guy who is second or third-generation finance. And what really excites me about venture is capturing a moment in time that’s young but also the energy is palpable around not only the idea in which the founder is building but the categories of which they’re tackling and that sounded big. I’ll be a little bit more speficic. And so, at TMV, we tried to see things before they’re even coming around the bend. For instance, we were early investors in a company called Cityblock Health which is offering best in class health care specifically for low income Americans. So they focus on the most vulnerable population which are underserved with health care and they’re offering them best in class health care access at affordable pricing because it’s predominantly covered through a payer relationship. And this company is so powerful to us for three reasons because it’s not simply offering health care to the elite. It’s democratizing access to care which I think is absolutely necessary in term out for success of any kind. We thought this was profoundly interesting because the population which they serve is also incredibly diverse. And so when you look at that investment over, say, a comparable company, I won’t name names, that offers for-profit health care, out-of-pocket, you can see why this is an opportunity that excites us as impact investors but we don’t see the diversity of the team it’s impact. We actually see that as their unfair advantage because they are accessing a population authentically that others might ignore. RITHOLTZ: Let me see if I understand this correctly. When you talk about non-obvious find — founders and spaces like this, what I’m hearing from you is you’re looking at areas where the market has been very inefficient with how it allocates capital … DARABI: Yes. RITHOLTZ: … that these areas are just overlooked and ignored, hey, if you want to go on to silicon valley and compete with everybody else and pay up for what looks like the same old startup, maybe it will successful and maybe it won’t, that’s hypercompetitive and hyper efficient, these are areas that are just overlooked and there is — this is more than just do-goodery for lack of a better word. There are genuine economic opportunities here with lots of potential upside. DARABI: Absolutely. So, my business partner and I, she and I found each other 20 years ago as undergrads at Georgetown but we went in to business after she was successful and being one of the only women in the world to take a shipping business public with her family, and we got together and we said we have a really unique access, she and I. And the first SPV that we collaborated on back in 2016 was a young business at the time, started by two women, that was focused on medical apparel predominantly for nurses. Now it’s nurses and doctors. And they were offering a solution to make medical apparel, so scrubs, more comfortable and more fashionable for nurses. I happen to have nurses and doctors in my family so doing due diligence for this business is relatively simple. I called my aunt who’s a nurse practitioner, a nurse her life, and she said, absolutely. When you’re working in a uniform at the hospital, you want something comfortable with extra pockets that makes you look and feel good. The VCs that they spoke to at the time, and they’ve been very public about this, in the beginning, anyway, were less excited because they correlated this particular business for the fashion company. But if you look back at our original memo which I saved, it says, FIGS, now public on the New York Stock Exchange is a utility business. It’s a uniform company that can verticalize beyond just medical apparel. And so, we helped value that company at 15 million back in 2016. And this year, in 2021, they went public at a $7 billion market cap. RITHOLTZ: Wow. DARABI: And so, what is particularly exciting for us going back to that conversation on non-obvious founders is that particular business, FIGS, was the first company in history to have two female co-founders go public. And when we think of success at TMV, we don’t just think about financial success and IRR and cash on cash return for our LPs, of course we think about that. But we also think who are we cheerleading and with whom do we want to go into business. I went to the story on the other side of the fence that we want to help and we measure non-obvious not just based on gender or race because I think that’s a little too precise in some ways. Sometimes, for us non-obvious, is around geography, I would say. I’m calling you from Athens, as you know, and in Greece, yesterday, I got together with a fund manager. I’m lucky enough to be an LP in her fund and she was talking about the average size of a seed round in Silicon Valley these days, hovering around 30 million. And I was scratching my head because at our fund, TMV, we don’t see that. We’re investing in Baltimore, Maryland, and in Austin, Texas and the average price for us to invest in the seed round is closer to 5 million or 6 million. And so, we actually can capture larger ownership of the pie early on and then develop a very close-knit relationship with these founders but might not be as networked in the Valley where there’s 30 VC funds to everyone that exist in Austin, Texas. RITHOLTZ: Right. DARABI: And so, yes, I think you’re right to say that it’s about inefficiencies in market but also just around — about being persistent and looking where others are not. RITHOLTZ: That’s quite intriguing. Your team is female-led. You have a portfolio of companies that’s about 65 percent women and people of color. Tell us how you go about finding these non-obvious startups? DARABI: It’s a good question. TMV celebrates its five-year anniversary this year. So the way we go about funding companies now is a bit different than the way we began five years ago. Now, it’s systematic. We collectively, as a partnership, there are many of us take over 50 calls a month with Tier 1 venture capital firms that have known us for a while like the work that we do, believe in our value-add because the partnership comprised of four more operators. So, we really roll up our sleeves to help. And when you’ve invested at this firms, enough time, they will write to you and say I found a company that’s a little too early for us, for XYZ reason, but it resonates and I think it might be for you. So we found some of our best deals that way. But other times, we found our deal flow through building our own communities. And so, when I first started visit as an EM, an emerging manager of a VC firm. And roughly 30 percent of LP capital goes to EM each year but that’s sort of an outsized percentage because when you think about the w-fix-solve (ph) addition capital, taking 1.3 billion of that pie, then you recognize the definition of emerging manager might need to change a bit. So, when I was starting as an EM, I recognize that the landscape wasn’t necessarily leveled. If you weren’t, what’s called the spinout, somebody that has spent a few years at a traditional established blue-chip firm, then it’s harder to develop and cultivate relationships with institutional LPs who will give you a shot even though the data absolutely points to there being a real opportunity in capturing lightning in a bottle if you find a right EM with the right idea in the right market conditions which is certainly what we’re in right now. And so, I decided to start a network specifically tailored around helping women fund managers, connecting one another and it began as a WhatsApp group and a weekly Google Meet that has now blown into something that requires a lot of dedicated time. And so we’re hiring an executive director for this group. They’re called Transact Global, 250 women ex-fund managers globally, from Hong Kong, to Luxembourg, to Venezuela, Canada, Nigeria, you name it. There are women fund managers in our group and we have one of the most active deal flow channels in the world. And so two of our TMV deals over the last year, a fintech combatting student debt and helping young Americans save for retirement at the same time, as an example, came from this WhatsApp deal flow channel. So, I think creating the community, being the change, so to speak, has been incredibly effective for us a proprietary deal flow mechanism. And then last but not least, I think that having some sort of media presence really has helped. And so, I’ve hosted a podcast and I’ve worked on building up what I think to be a fairly organic Twitter following over the years and we surprise ourselves by getting some really exceptional founders cold pitching us on LinkedIn and on Twitter because we make ourselves available as next gen EMs. So, that’s a sort of long-winded answer to your question. But it’s not the traditional means by any means. RITHOLTZ: To say the least. Are you — the companies you’re investing in, are they — and I’ll try and keep this simple for people who are not all that well-versed in the world of venture, is it seed stage, is it the A round, the B round? How far into their growth process do you put money in? DARABI: So it is a predominantly seed fund. We call our investments core investments. So, these are checks that average, 1 and 1.5 million. So for about 1.25 million, on average, we’re capturing 10-15% of a cap payable. And in this area, that’s called a seed round. It will probably be called a Series A 10 years ago. RITHOLTZ: Right. DARABI: And then we follow on through the Series A and it max around, I think, our pro rata at the B. So, our goal via Series B is to have, on average, 10% by the cap. And then we give ourselves a little bit of wiggle room with our modeling. We take mars and moonshot investments with smaller checks so we call these initial interest checks. And initial interest means I’m interested but your idea is still audacious, they won’t prove itself out for three or four years or to be very honest, we weren’t the first to get into this cap or you’re picking Sequoia over us, so we understand but let’s see if we can just promise you a bit of value add to edge our way into your business. RITHOLTZ: Right. DARABI: And oftentimes, when you speak as a former founder yourself with a high level of compassion and you promise with integrity that you’re going to work very hard for that company, they will increase the size of their round and they will carve out space for you. And so, we do those types of investments rarely, 10 times, in any given portfolio. But what’s interesting in looking back at some of our outliers from found one, it came from those initial interest checks. So that’s our model in a nutshell. We’re pretty transparent about it. What we like about this model is that it doesn’t make us tigers, we’re off the board by the B, so we’re still owning enough of the cap table to be a meaningful presence in the founder’s lives and in their business and it allows us to feel like we’re not spraying and praying. RITHOLTZ: Spraying and praying is an amusing term but I’m kind of intrigued by the fact that we use to call it smart money but you’re really describing it as value-added capital when a founder takes money from TMV, they’re getting more than just a check, they’re getting the involvement from entrepreneurs who have been through the process from startup to capital raise to exit, tell us a li bit about how that works its way into the deals you end up doing, who you look at, and what the sort of deal flow you see is like. DARABI: Well, years ago, I had the pleasure of meeting a world-class advertiser and I was at his incredibly fancy office down in Wall Street, his ad agency. And he described to me with pride how he basically bartered his marketing services for one percent of a unicorn. And he was sort of showing off of it about how, from very little time and effort, a few months, he walked away with a relatively large portion of a business. And I thought, yes, that’s clever. But for the founder, they gave up too much of their business too soon. RITHOLTZ: Right. DARABI: And I came up with an idea that I floated by Marina back in the day where our original for TMV Fund I began with the slide marketing as the future of venture and venture is the future of marketing. Meaning, it’s a VC fund where the position itself more like an ad agency but rather than charging for its services, it’s go-to-market services. You offer them free of charge but then you were paid in equity and you could quantify the value that you were offering to these businesses. And back then, people laughed us even though all around New York City, ad agencies were really doing incredible work and benefiting from the startups in that ecosystem. And so, we sort of changed the positioning a bit. And now, we say to our LPs and to our founders, your both clients of our firm. So, we do think of ourselves as an agency. But one set of our marketplace, you have LPs and what they want is crystal clear. The value that they derive from us is through a community and connectivity and co-investment and that’s it. It’s pretty kind of dry. Call me up once a year where you have an exceptional opportunity. Let me invest alongside you. Invite me to dinners four times a year, give me some information and a point of view that I can’t get elsewhere. Thank you for your time. And I love that. It’s a great relationship to have with incredibly smart people. It’s cut and dry but it’s so different. What founders want is something more like family. They want a VC on their board that they can turn to during critical moments. Two a.m. on a Saturday is not an uncommon time for me to get a text message from a founder saying what do I do. So what they want is more like 24/7 services for a period of time. And they want to know when that relationship should start and finish. So it’s sort of the Montessori approach to venture. We’re going to tell them what we’re going to tell them. Tell them what they’re telling them. Tell them what we told them. We say to founders with a reverse pitch deck. So we pitch them as they’re pitching us. Here’s what we promise to deliver for you for the first — each of the 24 months of your infancy and then we promise you we’ll mostly get lost. You can come back to use when your business is growing if you want to do it tender and we’ll operate an SPV for you for you or if you simply want advice, we’re never going to ignore you but our specialty, our black belt, if you will, Barry, is in those first 24 months of your business, that go-to-market. And so, we staffed up TMV to include, well, it’s punching above our weight but the cofounder of an exceptionally successful consumer marketing business, a gross marketer, a recruiter who helps one of our portfolio companies hire 40 of their earliest employees. We have a PR woman. You’ve met Viyash (ph), she’s exceptional with whom, I don’t know, how we would function sometimes because she’s constantly writing and re-editing press releases for the founders with which we work. And then Anna, our copywriter who came from IAC and Sean, our creative director, used to be the design director for Rolling Stone, and I can go on and on. So, some firms called us a platform team but we call it the go-to-market team. And then we promise a set number of hours for ever company that we invest into. RITHOLTZ: That’s … DARABI: And then the results — go ahead. RITHOLTZ: No, that’s just — I’m completely fascinated by that. But I have to ask maybe this is an obvious question or maybe it’s not, so you — you sound very much like a non-traditional venture capital firm. DARABI: Yes. RITHOLTZ: Who are your limited partners, who are your clients, and what motivates them to be involved with TMV because it sounds so different than what has been a pretty standard model in the world of venture, one that’s been tremendous successful for the top-tier firms? DARABI: Our LP set is crafted with intention. And so, 50% of our investors are institutional. This concludes institutional-sized family offices and family offices in a multibillions. We work with three major banks, Fortune 500 banks. We work with a couple of corporate Fortune 500 as investors or LPs and a couple of fund to funds. So that’s really run of the mill. But 50 percent of our investors and that’s why I’m in Athens today are family offices, global family offices, that I think are reinventing with ventures like, to look like in the future because wealth has never been greater globally. There’s a trillion dollars of assets that are passing to the hands of one generation to the next and what’s super interesting to me, as a woman, is that historically, a lot of that asset transferred was from father to son, but actually, for the first time in history, over 50 percent, so 51% of those asset inheritors are actually women. And so, as my business partner could tell because she herself is a next gen, in prior generations, women were encouraged to go into the philanthropic or nonprofit side of the family business … RITHOLTZ: Right. DARABI: And the sons were expected to take over the business or the family office and all of that is completely turned around in the last 10 years. And so, my anchor investor is actually a young woman. She’s under the age of 35. There’s a little bit of our firm that’s in the rocks because we’re not playing by the same rules that the establishment has played by. But certainly, we’re posturing ourselves to be able to grow in to a blue-chip firm which is why we want to maintain that balance, so 50 percent institutional and 50 percent, I would call it bespoke capital. And so, the LPs that are bespoke, we work at an Australian family office and Venezuelan family office and the Chilean family office and the Mexican family office and so on. For those family offices, we come to them, we invite them to events in New York City, we give them personalized introductions to our founders and we get on the phone with them. Whenever they’d like, we host Zooms. We call them the future of everything series. They can learn from us. And we get to know them as human beings and I think that there’s a reason why two thirds of our Fund I LPs converted over into Fund II because they like that level of access, it’s what the modern LP is really looking for. RITHOLTZ: Let’s talk a little bit about some of the areas that you find intriguing. What sectors are really capturing your attention these days? What are you most excited about? DARABI: Well, Barry, I’m most excited about five categories for which we’ve been investing for quite some time, but they’re really being accelerated due to the 2020 pandemic and a looming recession. And so, we’re particularly fascinated by not just health care investing as has been called in the past but rather the care economy. I’m not a huge fan of the term femtech, it always sounds like fembot to me. But care as it pertains to women alone is a multitrillion dollar opportunity. And so, when we think of the care economy, we think of health care, pet care, elder care, community care, personal care as it pertains to young people, old people, men, women, children, we bifurcate and we look for interesting opportunities that don’t exist because they’ve been undercapitalized, undervalued for so long. Case in point, we were early investors Kindbody, a reproductive health care company focused on women who want to preserve their fertility because if you look at 2010 census data, you can see that the data has been there for some time that women, in particular, were delaying marriage and childbirth and there are a lot of world-famous economists who will tell you this, the global population will decline because we’re aging and we’re not necessarily having as many children as we would have in the past plus it’s expensive. And so, we saw that as investors as a really interesting opportunity and jumped on the chance to ask Gina Bartasi who’s incredible when she came to us with a way to make fertility preservation plus expenses. So she followed the B2C playbook and she started with the mobile clinic that helps women freeze their eggs extensively. That company has gone on to raise hundreds — pardon me — and that company is now valued in the hundreds of million and for us, it was as simple as following our intuition as women fund managers, we know what our peers are thinking about because we talk to them all the time and I think the fact that we’re bringing a new perspective to venture means that we’re also bringing a new perspective to what has previously been called femtech. We invest in financial inclusion. Everyone in the world that’s investing fintech, the self-directed financial mobile apps are always going to be capitalized especially in a post Robin Hood era but we’re specifically interested in the democratization of access to financial information and we’re specifically interested in student debt and alleviating student debt in America because not only is it going to be one of the greatest challenges our generation will have to overcome, but it’s also prohibiting us from living out the American dream, $1.7 trillion of student debt in America that needs to be alleviated. And then we’re interested in the future of work, and long have been, that certainly was very much accelerated during the pandemic but we’ve been investing in the 1099 and remote work for quite some time. And so, really proud to have been the first check into a company called Bravely which is an HR chatbot that helps employees inside of a company chat a anonymously with HR representatives outside of that company, that’s 1099. That issue is like DEI, an inclusion and upward mobility and culture setting and what to do when you’re all of a sudden working for home. So that’s an example of a future of work business. And then in the tech-enabled sustainable solutions category, it’s a mouthful, let’s call that sustainability, we are proud to have been early investors of a company called Ridwell, out of Seattle Washington, focused on not just private — privatized recycling but upcycling and reconnaissance. Where are our things going when we recycle them? For me, it always been a pretty big question. And so, Ridwell allows you to re and upcycle things that are hard to get rid of out of your home like children’s eyeglasses and paints and battery, single-use plastic. And it shows you where those things are going which I think is super cool and there’s good reason why it has one of the highest NPS scores, Net Promoter Scores, of any company I’ve ever worked with. People are craving this kind of modern solution. And last but not least, we invest in transportation and part because of the unfair advantage my partner, Marina, brings to TMV as she comes from a maritime family. And so, we can pile it, transportation technology, within her own ecosystem. That’s pretty great. But also, because we’re just fascinated by the fact that 90 percent of the world commodities move on ship and the biggest contributor to emissions in the world outside of corporate is coming from transportation. SO, if we can sort of figure out this industry, we can solve a lot of the problems that our generation are inheriting. Now, these categories might sound massive and we do consider ourselves a generalist firm but we stick to five-course sectors that we truly believe in and we give ourselves room to kick out a sector or to add a new one with any given new fund. For the most part, we haven’t needed to because this remain the categories that are not only most appealing to us as investors but I think paramount to our generation. RITHOLTZ: That’s really intriguing. Give us an example of moonshot or what you called earlier, a Mars shot technology or a company that can really be a gamechanger but may not pay off for quite a while. DARABI: We’ve just backed a company that is focusing on food science. Gosh, I can’t give away too much because they haven’t truly launched in the U.S. But maybe I’ll kind of allude to it. They use crushed produce, like, crush potato skins to make plastic but biodegrades. And so, it’s a Mars shot because it’s a materials business and it’s a food science business rolled off into both the CPG business and an enterprise business. This particular material can wrap itself around industrial pellets. Even though it’s audacious, it’s not really a Mars shot when you think about the way the world is headed. Everybody wants to figure out how do we consume less plastic and recycle plastic better. And so, if there are new materials out there that will not only disintegrate but also, in some ways, feed the environment, it will be a no-brainer and then if you add to the equation the fact that it could be maybe not less expensive but of comparable pricing to the alternative, I can’t think of a company in the world that wouldn’t switch to this solution. RITHOLTZ: Right. So this is plastic that you don’t throw away. You just toss in the garden and it becomes compost? DARABI: Yes, exactly. Exactly. It should help your garden grow. So, yes, so that’s what I would call a Mars shot in some ways. But in other ways, it’s just common sense, right? RITHOLTZ: So let’s talk a little bit about your investment vehicles. You guys run, I want to make sure I get this right, two funds and three vehicles, is that right? DARABI: We have two funds. They’re both considered micro funds because they’re both under 100 million and then we operate in parallel for SPVs that are relatively evergreen and they serve as opportunistic investments to continue to double down on our winners. RITHOLTZ: SPV is special purpose investment … DARABI: Vehicles. Yes. RITHOLTZ: Right. DARABI: And the PE world, they’re called sidecars. RITHOLTZ: That’s really interesting. So how do these gets structured? Does everything look very similar when you have a fund? How quickly do you deploy the capital and typically how long you locked for or investors locked up for? DARABI: Well investors are usually in private equity are VC funds locked up for 10 years. That’s not usual. We have shown liquidity faster, certainly, for Fund I. It’s well in the black and it’s only five years old less, four and a half years old. So, how do we make money? We charge standard fees, 2 on 20 is the rubric of it, we operate by. And then lesser fees for sidecars or direct investments. So that’s kind of how we stay on business. When you think about an emerging manager starting their first fund, management fees are certainly not so we can live a lavish rock and roll life on a $10 million fund with a two percent management fee, we’re talking about 200K for the entire business to operate. RITHOLTZ: Wow. DARABI: So Marina and I, not only anchored our first fund with their own capital but we didn’t pay ourselves for four years. It’s not glamorous. I mean, there’s some friends of mine that thing the venture capital life is glam and it is if you’re on Sand Hill Road. But if you’re an EM, it’s a lot more like a startup where you’re burning the midnight oil, you are bartering favors with your friends, and you are begging the smartest people you know to take a chance on you to invite you on to their cap table. But it somehow works out because we do put in that extra effort, I think, the metrics, certainly for Fund I have shown us that we’re in this for the long haul now. RITHOLTZ: So your fund 1 and Fund 2, are there any plans of launching Fund III? DARABI: Yes. I think that given the proof points between Fund I and Fund II and a conversation that my partner and I recently had, five years out, are we in this? Do we love this? We do. OK. This is our life’s work. So you can see larger and more demonstrable sized funds but not in an outsized way, not just because we can raise more capital now but because we want to build out a partnership and the kind of culture that we always dreamed of working for back when we were employees, so we have a very diverse set of colleagues with whom we couldn’t operate and we’ll be adding to the partnership in the next two or three years which is really exciting to say. So, yes, the TMV will be around for a while. RITHOLTZ: That’s really interesting. I want to ask you the question I ask any venture capitalist that I interview. Tell us about your best and worst investments and what did you pass on that perhaps you wish you didn’t? DARABI: Gosh. The FOMO list is so long and so embarrassing. Let me start with what I passed on that I regret. Well, I don’t know she really would have invited me to invest, but certainly, I had a wonderful conversation a peer from high school, Katrina Lake, when she was in beta mode for Stitch Fix. I think she was still at HBS at the time or had just recently graduated from Harvard. When Katrina and I had coffee in Minneapolis were we went to high school and she was telling me about the Netflix for clothing that she was building and certainly I regret not really picking up on the clues that she was offering in that conversation. Stitch Fix had an incredible IPO and I’m a proud shareholder today. And similarly, when my friend for starting Cloudflare which luckily they did bring me in to pre-IPO and I’m grateful for that, but when they were starting Cloudflare, I really should have jumped on that moment or when my buddy Ryan Graves whom I still chat with pretty frequently was starting out Uber in beta with Travis and Garrett, that’s another opportunity that I definitely missed. I was in Ireland when the Series A term sheet assigned. So there’s such a long laundry list of namedropped, namedropped, missed, missed, missed. But in terms of what I’m proud of, I’d say far more. I don’t like Sophie’s Choice. I don’t like to cherry pick the certain investments to just brag about them. But we’ve talked about someone to call today, I’d rather kind of shine a light — look at my track record, right? There’s a large realized IRR that I’m very proud of. But more on the opportunity of the companies that we more recently backed that prevent damages (ph) of CRM for oncology patient that help them navigate through the most strenuous time of their life. And by doing so, get better access to health care. And we get to wrote that check a couple of months ago. But already, it’s becoming a company that I couldn’t be more excited about because if they execute the way I think Shirley and Victor will, that has the power to help so many people in a profound way, not just in the Silicon Valley cliché way of this could change the world but this could actually help people receive better care. So, yes, I’m proud of having been an early investor in the Caspers of the world. Certainly, we’re all getting better sleep. There’s no shame there. But I’m really excited now today at investing in financial inclusion in the care economy and so on. RITHOLTZ: And let’s talk a little bit about impactful companies. Is there any different when you’re making a seed stage investment in a potentially impactful company versus traditional startup investing? DARABI: Well, pre-seed and seed investing isn’t a science and it’s certainly not a science that anyone has perfected. There are people who are incredibly good at it because they have a combination of luck and access. But if you’re a disciplined investor in any asset class and I talk to my friends who run hedge funds and work for hedge funds about 10 bets that they take a day and I think that’s a lot trickier than what I do because our do due diligence process, on average, takes an entire quarter of the year. We’re not making that many investments each year. So even though it sounds sort of fruity, when you look at a Y Combinator Demo Day, Y Comb is the biggest accelerator in Silicon Valley and they produce over 300 companies, three or four times a year. When you look at the outsized valuations coming out of Y Comb, it’s easy to think that starting company is as simple as sort of downloading a company in a Box Excel and running with it. But from where we sit, we’re scorching the earth for really compelling ideas in areas that have yet to converge and we’re looking for businesses that may have never pitched the VC before. Maybe they’re not even seeking capital. Maybe it’s a company that isn’t so interested in raising a penny eventually because they don’t need to. They’re profitable from day one. Those are the companies that we find most exciting because as former operators, we know how to appeal to them and then we also know how to work with them. RITHOLTZ: That’s really interesting. Before I get to my favorite question, let me just throw you’re a curveball, tell me a little bit about Business Schooled, the podcast you hosted for quite a while. DARABI: So, Synchrony, Sync, came to me a few years ago with a very compelling and exciting opportunity to host a podcast with them that allowed me a fortunate opportunity to travel the country and I went to just under a dozen cities to meet with founders who have persevered past their startup phase. And what I loved about the concept of business school is that the cities that I hosted were really focused on founders who didn’t have access to VC capital, they put money on credit card. So I took SBA loans or asked friends and family to give them starter capital and then they made their business work through trying times and when you pass the five-year mark for any business, I’m passing it right now for TMV, there’s a moment of reflection where you can say, wow, I did it. it’s incredibly difficult to be a startup founder, more than 60 percent of companies fail and probably for good reason. And so, yes, I hosted business school, Seasons 2 and 3 and potentially there will be more seasons and I’m very proud of the fact that at one point we cracked the top 20 business podcasts and people seem to be really entertained through these conversations with insightful founders who are vulnerable with me about what it was like to build their business and I like to think they were vulnerable because I have a good amount of compassion for the experience of being founder and also because I’m a New Yorker and I just like to talk. RITHOLTZ: You’re also a founder so there’s going to be some empathy that’s genuine. You went through what they’re going through. DARABI: Exactly. Exactly. And so, what you do, Barry, is quite similar. You’re — you host an exceptionally successful business podcast and you’re also an allocator. You know that it’s interesting to do both because I think that being an investor is a lot like being a journalist. In both professions, you won’t succeed unless you are constantly curious and if you are having conversations to listen more than you speak. DARABI: Well, I’ll let you in on a little secret since it’s so late in the podcast and fewer people will be hearing this, the people I invite on the show are essentially just conversations I want to have. If other people come along and listen, that’s fantastic. But honestly, it’s for an audience of one, namely me, the reason I wanted to have you on is because I’m intrigued by the world of venture and alternatives and impact. I think it’s safe to say that a lot of people have been somewhat disappointed in the results of ESG investing and impact investing that for — it’s captured a lot more mindshare than it has captured capital although we’re seeing signs that’s starting to shift. But then the real question becomes, all right, so I’m investing less in oil companies and more in other companies that just happen to consume fossil fuels, what’s the genuine impact of my ESG investing? It feels like it’s sort of de minimis whereas what you do really feels like it has a major impact for people who are interested in having their capital make a positive difference. DARABI: Thank you for saying that. And I will return the compliment by saying that I really enjoyed getting to know you on our one key economist Zoom and I think that you’re right. I think that ESG investing, certainly in the public markets has had diminished returns historically because the definition has been so bizarre and so all over the place. RITHOLTZ: Right. DARABI: And I read incredible books from people like Antony Bugg-Levine who helps coin the term the Rockefeller Foundation, who originally coined the term you read about, mortgage, IRR and IRS plus measurement and it’s so hard to have just standardization of what it means to be an impact investor and so it can be bothered but we bother. Rather, we kind of come up with our own subjective point of view of the world and we say what does impact mean to us? Certainly, it means not investing in sin stocks but then those sin stocks have to begin somewhere, has to begin with an idea that somebody had once upon a time. And so, whether we are investing in the way the world should look from our perspective. And with that in mind, it doesn’t have to be impact by your grandpa’s VC, it can be impact from modern generation but simply things that behave differently. Some folks with their dollars. People often say, well, my ESG portfolio is underperforming. But then if you dig in to the specifics, are you investing in Tesla? It’s not a pretty good year. Did you back Beyond Meat? Had a great year. And so, when you kind of redefine the public market not by a sleeve and a bank’s version of a portfolio, but rather by company that you think are making demonstrable change in the world, then you can walk away, realizing had I only invested in these companies that are purpose driven, I would have had outsized returns and that’s what we’re trying to deliver on at TMV. That’s the promise. RITHOLTZ: Really, really very, very intriguing. I know I only have you for a few minutes so let’s jump to my favorite questions that I ask all of our guests starting with tell us what you’re streaming these days. Give us your favorite, Netflix, Amazon Prime, or any podcast that are keeping you entertained during the pandemic. DARABI: Well, my family has been binging on 100 Foot Wave on HBO Max which is the story of big wave surfer Garrett McNamara who is constantly surfing the world’s largest waves and I’m fascinated by people who have a mission that’s sort of bigger than success or fame but they’re driven by something and part of that something is curiosity and part of it is insanity. And so not only is it visually stunning to kind of watch these big wave surfers in Portugal, but it’s also a mind trip. What motivates them to get out of bed every day and potentially risk their lives doing something so dangerous and so bananas but also at the same time so brave and heroic. So, highly recommend. I am listening to too many podcasts. I listen to, I don’t know, a stream of things. I’m a Kara Swisher fan, Ezra Klein fan, so they’re both part of the “New York Times” these days. And of course, your podcast, Barry. RITHOLTZ: Well, thank you so much. Well, thank you so much. Let’s talk a little bit about who your early mentors were and who helped shape you career? DARABI: It’s going to sound ungrateful but I don’t think, in like a post lean in definition of the word, I ever truly had a mentor or a sponsor. Now, having said that, I’ve had people who really looked at for me and been incredibly gracious with their time and capital. And so, I would absolutely like to acknowledge that first and foremost. I think about how generous Adam Grant has been with his time and his investments for TMV in Fund I and Fund II and he’s a best-selling author and worked on highest-rated business school professor. So shout out to Adam, if he’s listening or Beth Comstock, the former Vice Chair of GE who has been instrumental in my career for about a decade and a half now. And she is also really leaning in to the TMV portfolio and has become a patient of Parsley Health, an early investment of ours and also an official adviser to the business. So, people like Adam and Beth certainly come to mind. But I don’t know, I just — I’m not sure mentors really exist outside of corporate America anymore and part of the reason why we started Transact Global is to kind of foster the concept of the peer mentor, people who are going through the same thing as you at the same time and allowing that hive mentality with an abundance mentality to catalyze people to kind of go further and faster. RITHOLTZ: Let’s talk about some of your favorite books and what you might reading right now. DARABI: OK, so in the biz book world, because I know your listeners as craving, I’m a big fan of “Negotiation Genius.” I took a crash course with one of the authors, Max Bazerman at the Kennedy School and it was illuminating. I mean, he’s one of the most captivating professors I’ve ever had the pleasure of hearing lecture and this book has really helped me understand the concept of the ZOPA, the Zone of Possible Agreement, and how to really negotiate well. And then for Adam whom I just referenced, of all of his incredible books, my favorite is Give and Take because I try to operate with that approach of business. Give more than you take and maybe in the short term, you’ll feel depleted but in the long term, karma pays off. But mostly, Barry, I read fiction. I think the most interesting people in the world or at least the most entertaining at dinner parties are all avoid readers of fiction and history. So I recently reread, for instance, all of my favorite short stories from college, from Dostoyevsky’s “A Gentle Creature” to “Drown” Junot Diaz. “Passing” by Nella Larsen, “The Diamond as Big as the Ritz” by Fitzgerald. Those are some of my very favorite stories of all time. And my retirement dream is to write a book of short stories. RITHOLTZ: Really, really quite intriguing. Are they all available in a single collection or these just, going back to your favorites and just plowing through them for fun? DARABI: Those are just going back to my favorites. I try to re-read “Passing” every few years which is somehow seems to be more and more relevant as I get older and Junot Diaz has become so incredibly famous when I first read “Drown” about 20 years ago which is an original collection of short stories that broadened my perspective of why it’s important to think about a broader definition of America, I guess. And, yes, no, that’s just — that was just sort of off the top of my head as the offering of a few stories that I really love, no collection. RITHOLTZ: That’s a good collection. And we’re down to our final two questions. What sort of advice would you give to a recent college grad who was interested in a career in either venture capital or entrepreneurship? DARABI: Venture capital or entrepreneurship. Well, I would say, learn as early as possible how to trust your gut. So, this could mean a myriad of things. As an entrepreneur, it could mean under the halo effect of an institution, university or high school or maybe having a comfortable day job, tinker with ideas, get feedback on that idea, don’t be afraid of looking or sounding dumb and build that peer network that I described. People who are rooting you on and are also insatiably curious about wonky things. And I would say that for venture capital, similar play on the same theme, but whether it’s putting small amounts of money into new concept, blockchain investing, or whether it’s meeting with entrepreneurs and saying maybe I only have $3,000 save up but I believe in you enough to bet amongst friends in Brooklyn on your concept if you’ll have me as an investor. So, play with your own money because what it’s really teaching you in return is how to follow instincts and to base pattern recognition off your own judgement. And if you do that early on, overtime, these all become datapoints that you can point to and these are lessons that you can glean while not taking the risk of portfolio management. So, I guess the real advice to your listeners is more action, please. RITHOLTZ: Really very, very intriguing. And our final question, what do you know about the world of venture investing today that you wish you knew 15 or 20 years ago when you first getting started? DARABI: Twenty years ago, I was a bit of a Pollyanna and I thought every wonderful idea that simply is built by smart people and has timed the market correctly will work out. And I will say that I’m slightly more jaded today because of the capital structure that is systematically allowing the biggest firms in the world to kind of eat up a generous portion of, let’s call it the LP pie, which leaves less capital available to the young upstart VC firms, and of course I’m biased because I run one, that are taking outsized risks on those non-obvious ideas that we referenced. And so, what I wish for the future is that institutional capital kind of reprioritizes what it’s looking for. And in addition to having a bottom line of reliable and demonstrable return on any given investment, there are new standards put into play saying we want to make sure that a portion of our portfolio goes to diverse managers. Because in turn, we recognize that they are three times more likely to invest in diverse founders or we believe in impact investing can be broader than the ESG definitely of a decade ago, so we’re coming up with our own way to measure on sustainability or what impact means to us. And if they go through those exercises which I know is hard because, certainly, I’m not trying to add work to anyone’s plate, I do think that the results will more than make up for it. RITHOLTZ: Quite intriguing. Thank you, Soraya, for being so generous with your time. We have been speaking with Soraya Darabi who is the Co-Founder and General Partner at TMV Investments. If you enjoy this conversation, well, be sure and check out any of the prior 376 conversations we’ve had before. You can find those at iTunes or Spotify, wherever you buy your favorite podcast. We love your comments, feedback, and suggestions. Write to us at MIB You can sign up for my daily reads at Check out my weekly column at Follow me on Twitter @ritholtz. I would be remiss if I did not thank the crack team that helps me put these conversations together each week. Tim Harrow is my audio engineer. Paris Walt (ph) is my producer. Atika Valbrun is our project manager, Michael Batnick is my head of research. I’m Barry Ritholtz, you’ve been listening to Masters in Business on Bloomberg Radio.   ~~~     The post Transcript: Soraya Darabi appeared first on The Big Picture......»»

Category: blogSource: TheBigPictureOct 20th, 2021

Business Travel’s Demise Could Have Far-Reaching Consequences

In 2019, Jason Henrichs took 46 flights for business, traveling to cities where he stayed at hotels, dined at local restaurants, and sometimes even visited tourist attractions like the Liberty Bell. In 2020, he took just three flights. The traveling life has its perks—Henrichs, the CEO of Alloy Labs, a consortium of community banks, has… In 2019, Jason Henrichs took 46 flights for business, traveling to cities where he stayed at hotels, dined at local restaurants, and sometimes even visited tourist attractions like the Liberty Bell. In 2020, he took just three flights. The traveling life has its perks—Henrichs, the CEO of Alloy Labs, a consortium of community banks, has Executive Platinum status on American Airlines, Gold Elite status at Marriott, and membership in not one but three private airport lounges. He has 350,000 miles, which he can use to fly his whole family across the world for free. But forced to stay at home during the pandemic, Henrichs got a taste of a life where he sees his family more, and is just as effective at work. He’s even been able to convince banking colleagues who have long been averse to giving up in-person meetings to move online. The talks he once flew across the country to deliver to boards of directors are more frequently streamed online now, and so are the meetings that would have lasted in a bank over 2 or 3 days but now are spread out over short Microsoft Teams huddles over 2 or 3 weeks. And lo and behold, he and his colleagues are getting more done. [time-brightcove not-tgx=”true”] “This isn’t about just reducing expense. This is about increasing effectiveness,” says Henrichs, who says he’ll likely travel once a month, rather than once a week, after the pandemic. Lucy Hewett—The New York Times/ReduxUnited Airlines planes in storage at O’Hare International Airport in Chicago on Sept. 11, 2020. Tens of thousands of road warriors like Henrichs—and their employers—are coming to a similar conclusion, which is going to cause a reckoning for the already-battered leisure and hospitality sector. U.S. companies’ travel budgets declined by 90% or more in 2020, according to Deloitte Insights. Even if the pandemic ebbs, companies looking to become more environmentally sustainable won’t likely go back to the same volume of travel as before; corporations like Zurich Insurance Group AG, Bain & Company, and S&P Global have announced plans to cut business travel emissions in the next few years, with Zurich aiming to reduce emissions by as much as 70% by next year. This could mean big losses for airlines, hotels, rental car companies, and other industries catering to corporate travelers. Business travelers make up 12% of airline passengers but 75% of revenues on certain flights. They brought in steady revenue to hotels when they attended conferences and events and then stayed a few extra days to vacation with their families. Some executives predict that business travel will return to 85% of pre-pandemic levels, says Lindsey Roeschke, managing director for travel and hospitality analysis at Morning Consult. She considers that an optimistic take. “Even if I’m wrong, and we do see a return to those levels,” she says, “that’s still a massive loss for the industry as a whole.” The hospitality industry is feeling it. During the pandemic, rental car companies like Hertz, hotels like the Fairmont in San Jose, and international airlines including Aeromexico, Virgin Atlantic, and LATAM all filed for bankruptcy protection. Government supports that kept the U.S. airline industry afloat ended September 30. The hotel industry is expected to earn $59 billion less in business travel revenue this year compared to 2019, according to the American Hotel and Lobby Association. Airlines are expected to lose $51.8 billion in 2021 alone. “We’ve been burning cash for 18 months,” says Dave Harvey, vice president of Southwest Business. And now the government support has ended. “We’re all flying naked at this point in the fourth quarter.” It can be hard to picture those losses in terms of billions of dollars. But it may be easier to picture the ripple effects—businesses closed, workers laid off, airlines canceling flights—of hundreds of thousands of Jason Henrichses traveling less. Tom Brenner—ReutersWaiting chairs are wrapped in plastic near a train platform at Union Station in Washington, D.C., on April 16, 2020. The ripple effects of fewer business travelers One of Henrichs’ favorite business travel destinations was Boston; he and his family lived there years ago, so he still had friends he could grab dinner with after a day of meetings. He’d stay near Back Bay, say, at the Marriott Copley Place, and wake up early to go for a long run by the Charles River before work. He hasn’t been there since October of 2019. Some of the places where he used to meet friends are now gone. He’d get dinner at Eastern Standard in Kenmore Square, or oysters at Island Creek, but both are now closed permanently after negotiations broke down between the restaurant owners and the real estate group that owned the properties. He usually flies American Airlines, but since the pandemic, that airline has dropped some routes and is considering where else to cut. American is facing staffing shortages after furloughing flight attendants and offering buyouts to pilots during the pandemic; it has about 16,000 fewer employees than it did in 2019. Henrichs stays mostly at Marriott hotels because it’s where he has elite status. Boston’s flagship Marriott, at Copley Place downtown, laid off 230 employees in September. Overall, Marriott hotels in the U.S. and Canada had a 45% occupancy rate for the three months ending June 30, compared to 80% in the same period in 2019, according to earnings reports. At least four Marriotts in New York City have closed permanently since the beginning of the pandemic. It’s not just big companies that are struggling. Elizabeth Morales was a housekeeper at the Boston Copley Place for 26 years until she was sent home in March 2020 because of the pandemic. The company kept telling her they’d call her back when it got busier, until September of 2020, when it called her and hundreds of others and said their positions had been terminated. “It was really hard for me,” says Morales, 51, who supports her elderly parents. She applied for 30 jobs before she found a new one only a few months ago. Unite Here Local 26 organized a boycott of the Marriott, alleging the hotel is contracting out operations to companies who pay workers less. Ironically, cuts like this could also make travel less pleasant for everyone when they return to travel. Business travelers subsidized other travelers, to some degree, so as they disappear, airlines are figuring out how to cut costs. They’re cutting routes to cities that people visited primarily for business, routing more flights through hubs, and talking a lot about efficiency. These cost savings also mean fewer available pilots and other flight crew, so weather delays and maintenance issues can trigger a huge chain of delays, as they did last week when Southwest canceled about a quarter of its flights after weather problems in Florida disrupted its network. Other airlines may see similar issues, especially if travel gets busier during the holidays. “We’re concerned about the holiday travel season—they say we’re going to fly more during the winter than we did in the summer, but we’re worried they don’t have the ability to fly that many planes,” says Capt. Dennis Tajer, a spokesman for the Allied Pilots Assn., which represents American Airlines pilots. (American did not return a request for comment, citing the quiet period before the company reports earnings on Oct. 21.) Henrichs has already noticed the changes. On a recent trip to Harrisburg in August, Henrichs was told on a Friday, after weather delays and mechanical issues had grounded his plane, that the airline couldn’t get him home until Tuesday. (American cut a number of flights this summer because of weather, mechanical issues, and staffing shortages.) Rather than wait around, he rented a car and drove to Philadelphia, where he hoped to get on a plane the next day, only to find that Marriott’s website had crashed and the hotel where he thought he’d made a reservation was actually sold out. He went door to door until he found a vacancy at the Homeaway Suites, but by then it was 11 p.m. and there were no nearby restaurants open, so his dinner was a Bud Light and a bag of chips. He got home the next day. “The system has become less resilient,” he says. Paul Yeung—Bloomberg/Getty ImagesLuggage carts outside Hong Kong International Airport on Jan. 26, 2021. Some companies still think business travel will return Some hospitality companies contest the idea that business travel won’t come back. “We are optimistic that we’ve turned a corner,” Anthony Capuano, Marriott’s CEO, said on an August earnings call, although special corporate bookings were down 45% compared to the same period in 2019. On a recent earnings call, Delta said it expected business travel to be back to 60% volume by the end of this year, and potentially 80-100% by the following year. Southwest Airlines has actually doubled down on business travel during the pandemic, adding 18 airports, dozens of sales staff, and making it easier for corporations to book flights through their own travel systems “There’s a pent up demand for face-to-face business meetings, conferences, events, networking—people are just starved for that,” says Harvey, of Southwest Business. Southwest is hoping to capture those travelers by attracting companies who want to pay lower fares but still want to travel, he says. He also argues that since companies have more remote employees now, there’s a new class of business travelers who have to fly to headquarters a few times a year. But even people who have spent decades on the road say that the pandemic has made them realize that technology has finally made it feasible to have good communication without traveling. Tina Perkins, who has worked for Epic Systems, a Madison, Wisc.-based electronic medical records company, for 20 years, says she loved traveling to a new city once or twice a month to help hospitals implement Epic software. But “I have been sort of shocked at how we have been able to adapt,” she says. “We are as effective in this hybrid world, which was surprising having done some things one way for such a long period of time.” She says she’ll likely travel once every 4-6 weeks going forward, rather than once every 2-4 weeks. Other Epic travelers have made the switch too; employees now take, in total, about 1,000 trips a month, down from 3,500 before the pandemic. Mario Tama—Getty ImagesAn aerial view of rental cars parked at Dodger Stadium in Los Angeles on May 20, 2020. The hotels and airlines that figure out how to make their model work without business travelers are going to be in the best position going forward, says Anthony Jackson, the U.S. Airlines Subsector leader at Deloitte. During the last recession, airlines expanded their premium economy seats to attract economy travelers who were willing to pay for an upgrade but not first class, and cost-conscious business travelers. Now, airlines will likely further expand premium economy, in part to give travelers still worried about COVID-19 a way to pay for more elbow room, says Alan Lewis, managing director for L.E.K. Consulting. Delta said October 13 that it actually made a profit in the three months that ended Sept 30, and that premium cabin seats drove much of that recovery. Business travel is still less than 50% recovered, the company said. Like airlines, hotels are going to have to think up new ways to attract traveler money, says Roeschke, of Morning Consult. They might decide to try and lure digital nomads who don’t have to pay rent anymore and are traveling around the country as they work. Or they may offer “bleisure” – business leisure – packages to people who want to work and vacation all in one trip. That may attract travelers like Henrichs, who still has to make some work trips. On his last business trip before the pandemic, Henrichs attended a weeklong conference of the American Banking Association in Orlando. Since his in-laws live near-by, he used miles to fly his wife and kids down to Orlando, too. They rented an Airbnb near the conference, and he commuted back and forth via Lyft. Still, the American Banking Assn. is holding the same conference this year in Tampa, but neither Henrichs nor his family are attending. There is a silver lining to Henrichs traveling less frequently though; he says he’s spending more locally. He and his family are going out to local restaurants and checking out neighborhoods and businesses he would have been too burned out to try back in the days when he was always on the road. He hopes this will lead to a resurgence of stores on Main Street, the type of places that business travelers might not have deigned to visit. “Normally, I travel so much that by the time I get home, I want to eat at home,” he says. “Now, I’m home plenty. So eating out can be fun again.”    .....»»

Category: topSource: timeOct 20th, 2021

Insider"s Capitol Hill reporter breaks down the Democrats" infrastructure fight, the fate of Biden"s $3.5 trillion spending, and why the House had 2 Thursdays

Economics reporter Joseph Zeballos-Roig, who spent the week reporting on Capitol Hill, explains where Congress goes from here after a wild week. U.S. President Joe Biden talks to reporters as Speaker of the House Nancy Pelosi watches after the president met with Democratic lawmakers at the U.S. Capitol to promote his bipartisan infrastructure bill on Capitol Hill in Washington, U.S., October 1, 2021. REUTERS/Tom Brenner Democrats in Congress are facing hurdles as they try to raise the debt limit and push forward Biden's social spending package. Senior editor Sarah Gray called up one of Insider's Capitol Hill reporters, Joseph Zeballos-Roig, to get some clarity on where things stand. Below is a lightly edited conversation to get you up to speed as we gear up for a new week. See more stories on Insider's business page. Sarah Gray: It's Friday, October 1, today, and this has been a crazy crazy week for you - and Congress.Joseph Zeballos-Roig: It's extremely hard to nail down where everybody is right now. So that's been the challenge.We started this week with worries that the government might shut down. And then there's also the reconciliation bill and there's the bipartisan infrastructure bill and the looming debt ceiling crisis. From Monday to Friday afternoon, how did we get here?Congress had a very big to-do list, and Democrats, in particular, going into the week. The one thing they manage to clear from the to-do list was the short-term government funding bill. So that's going to keep the government funding until December 3rd, but this is basically just punting to what's going to be a big end-of-year spending battle.In terms of infrastructure, I think that there is a little bit more clarity to what some moderates want, The infrastructure bill, a vote was yanked, but I think it also serves to start negotiations and talks on another, on the bigger part of Joe Biden's domestic agenda, which is the reconciliation package. I think overall Democrats are slowly but surely making progress on what they want to do, but it's definitely going to be playing out very messy and public for quite a while.To the best of your knowledge, do you have a sense of where Democrats are right now with their priorities?Yeah, so I think the easiest way to explain this is to go over the warring factions: moderates are insisting on a smaller bill, um, with fewer tax hikes. Progressives want a much larger bill to fund, you know, sweeping priorities like initiatives to fight climate change, and affordable childcare, and the expanded child tax credit, expanded Medicaid and Medicare. These are the priorities that a lot of Democrats favor, but they have a really wide bridge to gap between both sides.Progressives aren't holding the line on $3.5 trillion. They're starting to signal that they could go lower, but they're not going to go as low as Sen. Joe Manchin's $1.5 trillion. It seems like we're entering the new phase of negotiations, in which you're going to try and hammer down a compromise amount. But it's going to require a lot of Democrats to make some tough sacrifices on a lot of their priorities.(Editor's note: This conversation took place before a meeting between President Joe Biden and Democrats, where the president floated a $2 trillion spending package.)It's going to be a lot of horse-trading and the next couple of weeks and perhaps months, honestly when it comes to progressives you know, they've been very clear that they want this to be a big bill to fight climate change because a lot of the country has undergone climate emergencies or last couple of months - wildfires, deadly hurricanes. And when it comes to the human infrastructure aspect they're going to have to make a lot of cuts to appease the centrists who just clearly just want a smaller bill at this point.It felt like progressives were kind of holding the line Thursday night by delaying the vote on the bipartisan infrastructure bill. It is interesting to hear that they might be at a place where they're ready to make some concessions.I think a progressive are willing to making concessions, but moderates have not indicated as much willingness up to now. That's been the problem that progressives complain about: on the Senate side, Senators Joe Manchin and Kyrsten Sinema have been pretty enigmatic about what they want in the bill. Manchin just laid out yesterday ahead of what was supposed to be a scheduled vote on the bipartisan infrastructure goal that he wants $1.5 trillion. But I think there's still a lot of Democratic complaints, at least that I've heard on the Democratic side that Sinema has not been anywhere near as clear.When do you think we will see any movement or any votes on this? It felt like things were really moving during the summer. And then we had this artificial deadline to vote on the bipartisan infrastructure bill, and now it's possibly going to take months of negotiation, and next year is a midterm election year...That's definitely been a huge focus of Democrats. They want to wrap up the reconciliation bill as soon as possible so that they can provide tangible improvements in people's lives. For example, Sanders is really pushing a Medicare expansion so that it would provide dental, vision, and hearing coverage for seniors. Some of those initiatives could take years to set up, but for example, he wants to provide these types of voucher cards that seniors could start using up to a thousand dollars so that they can start feeling these improvements in their lives ahead of midterms.So that's definitely been a focus, but a problem they're already running into is a Manchin is insisting that be a long-drawn-out process. He's repeatedly called for a strategic pause so that Democrats can get their economic priorities in order. Um, and you know, Manchin is a key vote in the 50-50 Senate, they can't afford to lose anybody. A reconciliation bill for Biden's domestic agenda is basically dead in the water until he decides that he can support it, which could very well be November, December.So where are the Republicans in all of this? It's two parts when it comes to Republicans on the bipartisan infrastructure bill, which was focused on popular voter stuff like improving roads and bridges enhancing or broadband connections. There was Republican support for this in the Senate: 19 Senate Republicans voted to back the bipartisan infrastructure bill, including Senate Minority Leader Mitch McConnell. But in the House, it's a different story where Trump still has a lot of sway among House Republicans. On the larger reconciliation package, Republicans are united in opposition.They have assailed it as a huge government expansion that will intrude on people's lives; it will be financed with all these job-killing tax hikes. These are the arguments they are using to oppose the package.A lot of these investments are popular with voters, childcare, community college, raising taxes on the rich. It's not the same story among Republicans, so they're just lining up in opposition, and quite frankly, trying to block many of these popular initiatives from becoming a law, because it would derail Democratic odds of holding onto Congress and furthering Biden's domestic agenda.The Republican talking point on the debt ceiling has been trying to connect the $3.5 trillion reconciliation bill with why they won't raise the debt ceiling, but the debt ceiling has to do with borrowing for bills that the government already owes. So it'd be a lot of the debt and a lot of the spending from the past administrations, including Trump's right?That's correct. The debt ceiling needs to be raised this year regardless of spending plans. Republicans are insisting Democrats you'd do it alone and reconciliation it's technically possible, but experts that I've talked to say it could take at least two weeks if everything goes right, probably three and we're already in October 1st, so there's very little time to do it and then there's a very narrow margin of error for Democrats. Republicans are just not going for a debt limit hike, even though they approve it three times under the Trump administration and both parties accrued nearly $8 trillion in debt.So raising the debt ceiling also doesn't authorize new spending. And it needed to be done this year, regardless of Democratic spending plans.Woody Harrelson was on the Hill this week. There was also the congressional baseball game, which felt totally out of place given all of the negotiations. Pelosi was down there on her cell phone...Pelosi back in August faced a rebellion from a small group of House moderates, who demanded a vote on the bipartisan infrastructure bill before advancing the larger social spending plan. So she struck a deal with them for a late September vote. And, you know, obviously, that hasn't happened. The vote was pulled in the face of strong progressive resistance. So in a bid to try and keep her promise to these moderates, she essentially warped time last night.The House didn't gavel out, so basically it's second Thursday in the House right now. The legislative calendar is still frozen on September 30. It underscores the procedural length of she'll go in order to pacify the potent faction of her moderate wing. And I think it pretty much summarizes how wild this week was.Read the original article on Business Insider.....»»

Category: smallbizSource: nytOct 3rd, 2021

Banks Around World Are Suffering Big Outages, Leaving Millions Of Customers In Lurch At Worst Possible Time

Banks Around World Are Suffering Big Outages, Leaving Millions Of Customers In Lurch At Worst Possible Time Authored by Nick Corbishley via, Twenty banks (some suffering repeated outages), six countries (one in lockdown), five continents, tens of millions of unhappy customers. There’s never a good time for your bank’s IT system to go down. But few can be worse than in the middle of a lockdown. It’s difficult to leave home, your local branch may not be open, and as a result you are more reliant than ever on digital banking services. In New Zealand, now in its seventh week of nationwide lockdown, one of the country’s largest lenders, Kiwibank, went down on Tuesday, leaving many of its customers in the lurch. It is one of a string of IT outages the bank has suffered over the past three weeks, after a DDoS attack on New Zealand’s third largest Internet provider caused IT crashes at a number of lenders, including Commonwealth Bank and Anz Bank. In a DDoS attack hackers overwhelm a site by getting huge numbers of bots to connect to it all at once, rendering it inaccessible. Servers are not breached, data is not stolen but it can still cause plenty of disruption. 24 Million Unhappy Customers New Zealand is not the only country to have suffered major outages within its banking system in recent weeks. Other countries include the UK, Japan, South Africa, Venezuela and Mexico, though there are no doubt more (if you know of any, It would be great if you could provide details in the comments section).  On September 12, operating failures at Mexico’s largest bank, BBVA Mexico, left 24 million account holders unable to use the bank’s 13,000 ATMs, its mobile app or in-store payments for almost 20 hours. It being a Sunday, customers could not even avail of the lender’s in-branch cash services. The bank blamed the outage on a system update failure and has offered to compensate customers with cash bonuses on purchases when using their credit or debit cards. The bank was also at pains to assure them that their financial data was not compromised. “It had nothing to do with the outside world,” said Jorge Terrazas, the bank’s director of communicate and corporate identity. “The bank and its customers’ information is secure. What we did was undo the changes to the system and return everything to as it was.” Less than a week after BBVA’s outage, Santander Mexico, another Spanish-owned Mexican bank, suffered an outage that left customers across the country unable to use their debit cards at the ATM or in stores. Again, it was blamed on internal problems. In recent years, Mexico has become an important market for stolen data — enough to earn it eighth place in the world in terms of identity theft, according to the country’s central bank, Banco de Mexico (Banxico for short). This is partly a result of the widespread impunity cyber criminals enjoy in the country, due to the lack of enforcement of existing laws and the absence of adequate legal tools. Cyber theft in Mexico is not just the preserve of isolated basement-dwelling hackers but also highly professional criminal organizations. Even Banxico’s SPEI interbank transfer system, an iteration of the SWIFT global payment system, has been the target of digital heists, as WIRED reports: In January 2018 a group of hackers, now thought to be working for the North Korean state-sponsored group Lazarus, tried to steal $110 million from the Mexican commercial bank Bancomext. That effort failed. But just a few months later, a smaller yet still elaborate series of attacks allowed hackers to siphon off 300 to 400 million pesos, or roughly $15 to $20 million from Mexican banks. [Click here to read how they did it]. Since then Mexican banks have suffered repeated outages, one of the biggest of which took place during last year’s “Buen Fin”, an annual nationwide shopping event inspired by Black Friday. The online banking websites and mobile apps of many of the country’s major banks, including BBVA and Citibanamex collapsed on the same day, leaving many customers unable to complete their purchases. “A Growing Trend” In the UK the Financial Conduct Authority has been “deeply concerned” about the increasing number of technology outages for a number of years. At the FCA’s annual public meeting in 2019, the regulator’s executive director of supervision, Megan Butler, said the number of incidents of “operation resilience breaks” reported in terms of IT failings had increased 300% year-on-year. And this, she said, would probably be “a growing trend,” though it is partly due to the rise in reporting of events.   On July 22 this year, the websites of six large banks and building societies — Lloyds, HSBC, TESCO Bank, Bank of Scotland, Halifax and Barclays — were brought down by a global Internet outage allegedly caused by a botched software update at hosting service Akamai. Less than a month later, the apps of five lenders and building societies — Natwest, TESCO Bank, TSB, Santander UK and Halifax — all went down over a period of just a few days. The outage, apparently triggered by a problem with US payments company TSYS, left consumers unable to access their credit card services and account information. Since then, HSBC, Barclays Bank and the Cooperative Bank have all suffered brief outages. Some outages can last much longer and wreak far more disruption on people’s lives. In 2018 Banco Sabadell’s botched IT migration of its UK subsidiary TSB — branded the “biggest IT disaster in British banking history — left hundreds of thousands of customers unable to access their online accounts for weeks on end. Some customers lost out financially. Many saw their credit ratings deteriorate as a direct result. Business customers were unable to pay bills or make payroll and mortgage payments were missed. Over 1,300 customers became victims of fraud attacks. The crisis cost Sabadell hundreds of millions of pounds, 80,000 customers and one CEO. It was probably a key factor in scuppering BBVA’s takeover of Sabadell late last year.  “An Intense and Aggressive Cyber Attack” Almost 5,000 miles away from the UK, on the other side of the Atlantic, 16 million customers of Venezuela’s biggest bank, Banco de Venezuela, had to recently endure five days without the bank’s online platform. As tends to happen in these cases, the outage became apparent when bank customers began venting their anger on social media. When the platform was finally restored, on September 20, Venezuela’s vice president Delcy Rodríguez laid the blame on the US government, which she accused of launching an “intense and aggressive” cyber attack against the bank’s IT system. The attack was apparently an attempt to derail Caracas’ plans to launch a new currency, which went live today (Oct 1) with six fewer zeros. Whether Rodríguez’ allegations are true or not it’s impossible to tell, but Washington certainly has the capability and form. Plus, it is engaged in a no holds-barred economic war against Venezuela.  Sometimes it’s the frequency rather than the duration of the outages that is the biggest problem for bank customers. Yesterday (September 30) Mizuho Bank, one of Japan’s three mega banks, experienced its eighth IT system failure so far this year — almost one every month. In the latest episode a system glitch caused a delay to some foreign exchange transactions. The system outages at Mizuho date back almost two decades and have been broadly blamed on its failure to integrate cultures and systems from the three-way merger of Dai-ichi Kangyo Bank, Fuji Bank, and IBJ that brought the bank into existence, all of 21 years ago. The bank has already spent $3.6 billion trying to fix the problems, but to little apparent avail. Mergers of large banks have a tendency of leaving behind serious IT system issues, as Clive and I pointed out in an NC article published in December last year. This is particularly true in the case of cross-border mergers. One of the main reasons for this is that many banks are still largely run on creaky legacy systems built in the 1970s that make it all but impossible to merge IT systems without storing up big problems further down the line. In a 2019 Treasury Select Committee inquiry into what went wrong at Banco Sabadell, Alison Barker, director of specialist supervision at the Financial Conduct Authority, was asked to what extent legacy systems are still being used across the UK’s retail banking sector. Here’s what she said: “It is still pretty extensively, I’m afraid… some pretty core systems are still run on legacy. They still use code back from the 1970s on some of these systems, and they’ve just built on top of them.” Yet many of these same banks are still trying to compete with younger, smaller, fleet of foot challengers whose IT systems are much more modern and flexible. And that is causing serious problems.  Inherent Fragility of Legacy Systems “If you are a large retail bank in the UK, you are probably dealing with legacy systems”, the deputy chief executive of the Prudential Regulation Authority, Lyndon Nelson, told the inquiry.  But as fintech companies add new features to their apps, they are keen to do the same “for competitive reasons.” Nelson added that although some banks do plan to eventually phase out their legacy systems, it takes a brave chief technology officer to envisage that, due to the inherent risk in changing systems. Sabadell’s disastrous attempt to upgrade TSB’s system will hardly have encouraged others to do the same. As S&P Global recently noted, bungled IT change is a leading culprit for outages and disruptions at U.K. financial institutions. An overreliance on outsourcing could make the problems worse.   Another problem highlighted by Nelson (and NC way back in 2016) is that few programmers are left who can actually use COBOL, the primary programming language used in banks’ legacy systems. This, says Nelson, has left many banks’ IT officers asking the question: “how many times in a week can we change an app without it falling over?” When a banking app “falls over” or an IT system goes down, it can leave chaos in its wake. Ten years ago, Mizhuo Bank suffered an outage that delayed money transfers in the aftermath of the Great East Japan Earthquake and tsunami. Its seventh outage this year, in early September, was apparently the final straw for Japan’s financial regulators, which requested that Mizuho submit a work plan for system maintenance and updating, “in a rare move to effectively oversee the system of a megabank”, reported Kyodo News. Another bank that has been plagued by repeated IT system problems is South Africa’s largest lender, Standard Bank. In late April, the bank suffered “hardware issues” that downed its internet, mobile and ATM channels for over a week, leaving customers unable to pay their bills or access cash. By early September the bank’s mobile app was down once again, causing customers no end of hassle. On Tuesday this week the mobile app of another South African bank, Capitec, also went down. All of these bank outages are happening for a variety of reasons, from internal problems within a bank’s IT system (Mizuho, Sabadell) to a botched update (BBVA), to a cyber attack (Kiwibank), to the downing of a hosting service (the collapse of bank websites around the world on July 22). But one thing they all highlight is the inherent fragility of banks’ IT systems, at a time when many people are using less and less cash and are becoming more and more dependent on digital banking services.    Tyler Durden Fri, 10/01/2021 - 17:00.....»»

Category: blogSource: zerohedgeOct 1st, 2021

Shellenberger: The Real Threat To Banks Isn"t From Climate Change, It"s From Bankers

Shellenberger: The Real Threat To Banks Isn't From Climate Change, It's From Bankers Authored by Michael Shellenberger via substack, Over the last two years, some of the world’s most powerful and influential bankers and investors have argued that climate change poses a grave threat to financial markets and that nations must switch urgently from using fossil fuels to using renewables. In 2019, the Federal Reserve Bank of San Francisco warned that climate change could cause banks to stop lending, towns to lose tax revenue, and home values to decline. Last year, 36 pension fund managers representing $1 trillion in assets said climate change “poses a systemic threat to financial markets and the real economy.” And upon taking office, President Joe Biden warned government agencies that climate change disasters threatened retirement funds, home prices, and the very stability of the financial system. But a major new staff report from the New York Federal Reserve Bank throws cold water on the over-heated rhetoric coming from activist investors, bankers, and politicians. “How Bad Are Weather Disasters for Banks?” asks the title of the report by three economists. “Not very,” they answer in the first sentence of the abstract. The reason is because “weather disasters over the last quarter century had insignificant or small effects on U.S. banks’ performance.” The study looked at FEMA-level disasters between 1995 and 2018, at county-level property damage estimates, and the impact on banking revenue. The New York Fed’s authors only looked at how banks have dealt with disasters in the past, and what they wrote isn’t likely to be the final word on the matter. The United Nations Intergovernmental Panel on Climate Change and most other scientific bodies predict that many weather events, including hurricanes and floods, which cause the greatest financial damage, are likely to become more extreme in the future, due to climate change. And in February, The New York Times quoted one of six United States Federal Reserve governors saying, “Financial institutions that do not put in place frameworks to measure, monitor and manage climate-related risks could face outsized losses on climate-sensitive assets caused by environmental shifts.” But the Fed economists looked separately at the most extreme 10 percent of all disasters and found that banks impacted not only didn’t suffer, “their income increases significantly with exposure,” and that the improved financial performance of banks hit by disasters wasn’t explained by increased federal disaster (FEMA) aid. In other words, disasters are actually good for banks, since they increase demand for loans. The larger a bank’s exposure to natural disasters, the larger its profits. Happily, the profits made by banks are trivial compared to rising societal resilience to disasters, which can be seen by the fact that the share of GDP spent on natural disasters has actually declined over the last 30 years. While scientists expect hurricanes to become five percent more extreme they also expect them to become 25 percent less frequent, and now, new data show global carbon emissions actually declined over the last decade, and thus there is no longer any serious risk of a significant rise in global temperatures. Banking Against Growth The real risk to banks and the global economy comes from climate policy, not climate change, particularly efforts to make energy more expensive and less reliable through the greater use of renewables, new taxes, and new regulations. “For policymakers,” warned the three economists writing for the New York Fed, “our findings suggest that potential transition risks from climate change warrant more attention than physical disaster risks.” While they may seem like outliers, they are far from alone in expressing their concern. The second half of the quote by the Fed governor about climate change, which was hyped by The New York Times, warned that banks “could face outsized losses” from the “transition to a low-carbon economy.” (My emphasis.) And, now concern is growing among members of Congress about the dangers of over-relying on weather-dependent energy, with some members citing the New York Fed’s report after The Wall Street Journal editorialized about it last week . Proof of the threat to the economy from climate policy is the worst global energy crisis in 50 years. Shareholder activists played a significant role in creating it, according to analysts at Goldman Sachs, Bloomberg, and The Financial Times, by reducing investment in oil and gas production, and causing nations to over-invest in unreliable solar and wind energies, which has driven up energy prices, and contributed significantly to inflation. And yet a crucial Biden Administration nominee for bank regulation has openly said she would like to bankrupt firms that produce oil and gas, the two fuels whose scarcity is causing the global energy crisis. Progressive academic, Saule Omarova, nominated by Biden, said recently that “we want [oil and gas firms] to go bankrupt” and that “the way we basically get rid of these carbon financiers is we starve them of their source of capital. Biden nominee Saule Omarova said she wants to bankrupt energy companies Omarova is not an outlier. The Biden Administration’s Financial Stability Oversight Council (FSOC) is advocating 30 new climate regulations that should be imposed on banking. Many analysts believe the US Securities and Exchange Commission will require new regulations. The goal is to radically alter how America’s banks lend money, the energy sector, and the economy as a whole. And former Bank of England chief, Mark Carney, co-chair of the Glasgow Financial Alliance for Net Zero, has organized $130 trillion in investment and said recently that his investors should expect to make higher, not lower, returns than the market. How? In the exact same way Omarova predicted: by bankrupting some companies, and financing other ones, through government regulations and subsidies. Former Bank of England head Mark Carney Carney created the Glasgow Financial Alliance, or GFANZ, with Michael Bloomberg, and they did so under the official seal of the United Nations. “Carney said the alliance will put global finance on a trajectory that ultimately leaves high-carbon assets facing a much bleaker future,” wrote a reporter with Bloomberg. “He also said investors in such products will see the value of their holdings sink.” What’s going on, exactly? How is it that some of the world’s most powerful bankers, and the politicians they finance, came to support policies that threaten the stability of electrical grids, energy supplies, and thus the global economy itself? The Unseen Order Three of the largest donors to climate change causes are billionaire financial titans Michael Bloomberg, George Soros, and Tom Steyer, all of whom have significant investments in both renewables and fossil fuels. Tom Steyer, Michael Bloomberg, and George Soros Soros is worth $8 billion and recently made large investments in natural gas firms (EQT) and electric vehicles (Fisker), Bloomberg has a net worth of around $70 billion and has large investments in natural gas and renewables, and much of Steyer’s wealth derives from investments in all three main fossil fuels—coal, oil, and natural gas — as well as renewables. All three men finance climate activists and politicians, including President Biden, who then seek policies — from $500 billion for renewables and electric vehicles over the next decade to federal control over state energy systems to banking regulations to bankrupt oil and gas companies — which would benefit each of them personally. Bloomberg gave over $100 million to Sierra Club to lobby to shut down coal plants after he had taken a large stake in its replacement, natural gas, and operates one of the largest news media companies in the world, which publishes articles and sends emails nearly every day reporting that climate change threatens the economy, and that solar panels and wind turbines are the only cost-effective solution. Soros donates heavily to Center for American Progress, whose founder, John Podesta, was chief of staff to Bill Clinton, campaign chairman for Hillary Clinton’s presidential campaign, and who currently runs policy at the Biden White House. So too does Steyer, who funds the climate activist organization founded by New Yorker author Bill McKibben,, which reported revenues of nearly $20 million in 2018. The most influential environmental organization among Democrats and the Biden Administration is the Natural Resources Defense Council, NRDC, which advocated for federal control of state energy markets, the $500 billion for electric cars and renewables, and international carbon markets that would be controlled by the bankers and financiers who also donate to it. In the 1990s, NRDC helped energy trading company Enron to distribute hundreds of thousands of dollars to environmental groups. “On environmental stewardship, our experience is that you can trust Enron,” said NRDC’s Ralph Cavanagh in 1997, even though Enron executives at the time were defrauding investors of billions of dollars in an epic criminal conspiracy, which in 2001 bankrupted the company. From 2009 to 2011, NRDC advocated for and helped write complex cap-and-trade climate legislation that would have created and allowed some of their donors to take advantage of a carbon-trading market worth upwards of $1 trillion. NRDC created and invested $66 million of its own money in a BlackRock stock fund that invested heavily in natural gas companies, and in 2014 disclosed that it had millions invested in renewable funds. Former NRDC head, Gina McCarthey, now heads up Biden’s climate policy team, and Biden’s top economic advisor, Brian Deese, last worked at BlackRock, and almost certainly will return at the end of the Biden Administration. Money buys influence. In 2019, McKibben called Steyer a “climate champ” when Steyer announced he was running for president, adding that Steyer’s “just-released climate policy is damned good!” And in 2020, McKibben wrote an article called, “How Banks Could Bail Us Out of the Climate Crisis,” for The New Yorker, which repeated the claim that extreme weather created by climate change threatens financial interests, and that the way to prevent it is to divert public and private money away from reliable energy sources toward weather-dependent ones. Forms filed to the Internal Revenue Service by Steyer’s philanthropic organization, the TomKat Charitable Trust, show that it gave McKibben’s climate activist group,, $250,000 in 2012, 2014, and 2015, and may have given money to in 2013, 2016, 2017, 2018, 2019, and 2020, as well, because thanked either Steyer’s philanthropy, TomKat Foundation, or his organization, NextGen America, in each of its annual reports since 2013. At the same time, McKibben’s motivations are plainly spiritual. He claims that various natural disasters are caused by humans, that climate change literally threatens life on Earth, and is thus “greatest challenge humans have ever faced,” a statement so unhinged from reality, considering declining deaths from disasters, declining carbon emissions, and the total absence of any science for such a claim, that it must be considered religious. McKibben first book about climate change, The End of Nature, explicitly expressed his spiritual views, arguing that, through capitalist industrialization, humankind had lost its connection to nature. “We can no longer imagine that we are part of something larger than ourselves,” he wrote in The End of Nature. “That is what this all boils down to.” Indeed, for William James, the belief in “an unseen order” that we must adjust ourselves to, in order to avoid future punishment, is a defining feature of religion. Climate change is punishment for our sins against nature — that’s the basic narrative pushed by journalists, climate activists, and their banker sponsors, for 30 years. It has a supernatural element: the belief that natural disasters are getting worse, killing millions, and threatening the economy, when in reality they are getting better, killing fewer, and costing less. And it offers redemption: to avoid punishment we must align our behavior with the unseen order, namely, a new economy controlled by the U.N., bankers, and climate activists. Unfortunately, as is increasingly obvious, the unseen order is parasitical and destructive. When Nuclear Leads, the Bankers Will Follow The unseen order of bankers, climate activists, and the news media is so powerful that it is difficult to imagine how it could ever be challenged. The financial might of the climate lobby covers the wealth not only of billionaires Soros, Steyer, and Bloomberg, but also $130 trillion in investment funds, including many of the world’s largest pension funds, such as the one belonging to California public employees. The climate lobby’s political power is equally awesome, covering the entirety of the Democratic Party and a significant portion of the Republican Party, and most center-Left parties in Europe. Former German Chancellor Angela Merkel, French President Emanuel Macron, and U.S. Energy Secretary Jennifer Granholm And all of that is sustained by cultural power, which has led many elites to view climate change as the world’s number one issue, has convinced half of all humans that climate change will make our species extinct, and has served as the apocalyptic foundation for Woke religion. But serious cracks in the foundation are growing. The global energy crisis has revealed for many around the world the limits of unreliable renewables, with European governments having to subsidize energy to avoid public backlash, President Biden and other heads of state opening up emergency petroleum reserves, and all nations begging OPEC to produce more energy. The blackouts and rising unreliability of electricity in California, along with the work of the pro-nuclear movement over the last 6 years, has resulted in a growing number of Democrats supporting nuclear energy. Energy Secretary Jennifer Granholm last week publicly urged California Governor Gavin Newsom not to close California’s Diablo Canyon nuclear plant, the signature nuclear plant Environmental Progress has been trying to save since 2016. Democratic support in particular for nuclear is growing. And alternative media including Substack, podcasts, and social media platforms are increasingly providing a counterweight to the mainstream news media, exposing a huge number of issues that the media got wrong in recent years, and amplifying alternative voices. Nowhere is the change occurring faster than in Europe, where energy shortages are affecting heating, cooking, and electricity supplies in ways that undermine the legitimacy of the banker-led climate efforts. In Britain, private energy companies have gone bankrupt, forcing the government to bail them out. For-profit energy companies, like banks, ultimately depend on taxpayers, who are also voters. Outgoing German Chancellor Angela Merkel, who led her nation’s exit from nuclear energy, acknowledged that Germany had been defeated in its anti-nuclear energy advocacy at the European Union level, and that nuclear would finally be recognized as low-carbon. And French president Emanuel Macron, under pressure from the political right as voters look to elections next year, gave a passionate speech in favor of nuclear energy last month, announcing $35 billion for new reactors. As the world returns to nuclear, policymakers, media elites, and climate advocates will be increasingly confronted with the question of why consumers and taxpayers will benefit from a global carbon trading scheme and more weather-dependent renewables, particularly at a time of declining global emissions from the continuing transition from coal to natural gas, reduced deforestation, and increased reforestation. Simply building more nuclear power plants means there is no climate change justification for weather-dependent renewables, which actually require greater use of natural gas, in order to deal with the high amount of unreliability. Nuclear power goes with slow and patient capital. The obvious funders of a nuclear expansion in the West would be the pension funds, which need the secure return on investment that major construction and infrastructure projects provide, and which unreliable renewables, as the energy crisis shows, do not. And though the news media is currently ignoring the New York Fed’s report, reporters will not be able to continue spreading misinformation about climate change indefinitely. Increasingly, they, and thus policymakers and the public, will be forced to confront facts inconvenient to their narrative, including that humans are adapting remarkably well to climate change, that renewables make energy unreliable and expensive, and that only nuclear can achieve sustainability goals of reduced emissions, material throughput, and land use. As people ask, “How Bad Are Weather Disasters?”, not just for banks, but for all of us, the answer will increasingly come back, “Not very.” *  *  * Michael Shellenberger is a Time Magazine "Hero of the Environment,"Green Book Award winner, and the founder and president of Environmental Progress. He is author of just launched book San Fransicko (Harper Collins) and the best-selling book, Apocalypse Never (Harper Collins June 30, 2020). Subscribe To Michael's substack here Donate to Environmental Progress Tyler Durden Sat, 12/04/2021 - 21:30.....»»

Category: blogSource: zerohedge11 hr. 43 min. ago

Goldman: Are We Starting To See What The "New Normal" Looks Like?

Goldman: Are We Starting To See What The "New Normal" Looks Like? By Goldman strategist Chris Hussey New Normal? US stocks traded sharply lower Friday, and on pace for another decline this week, as investors reacted to a new virus variant, strong business sentiment surveys, and Friday's decidedly mixed labor report -- and contemplated how to position into a now-volatile year-end. this what it looks like? As we leg further into the last month of 2021 and the post-pandemic era, this week may be raising the question: are we starting to see what the 'new normal' looks like? It's not unreasonable to look at the Omicron variant as an anomaly that 'surprises' markets and represents a left tail risk. But after enduring the original COVID-19 outbreak followed by waves from the Beta and Delta variants, investors may be determining that COVID waves are becoming a regular thing -- seasonal like the flu the perhaps. For now, we don't yet know how much of an impact the Omicron virus will have, but what we might be learning is that the virus is still having an impact, even if that impact is not as great as it first was back in early 2020. And beyond the virus, this week may also have delivered a clearer view of what else may become 'normal' in the post-pandemic era: from inflation, to labor, shopping, sentiment and volatility. A few things to consider: high inflation. Leading into this week, our economists revised our forecast for Fed Fund rate hikes to 3 in 2022, from 2, as inflation is remaining remarkably sticky. Fed Chair Powell's testimony before Congress earlier this week only reinforced our view that the FOMC is concerned about high inflation. And high commodity prices are unlikely to provide a relief valve for inflation pressures as Jeff Currie discusses in the latest Commodity Watch. We now see a 28%+ total return for commodities over the next 12 months. tight labor. Friday's payrolls report revealed that fewer non-farm payroll jobs were added in November (210k vs 546k a month earlier) but also that fewer people are unemployed than expected (the unemployment rate fell to 4.2%). So while its tempting to look at the 210k new job adds as a disappointing indicator of US growth, the 4.2% unemployment rate may tell us more about the economy -- everyone who wants a job, has one. Also interesting in Friday's report, despite the ultra-low unemployment rate, wage growth moderated to +0.3% mom from +0.4% a month ago. But will wage pressures continue to ease in a world where so few are looking for a job but 'Help Wanted' signs seem to appear on every store you walk by? One other note on payrolls: from December 2011 through February 2020 (8 years+ of pre-pandemic data), monthly non-farm payroll additions averaged 200k (meet the new payrolls, the same as the old payrolls). Black Friday now takes place on Black Monday. The post-Thanksgiving holiday shopping stats have been somewhat uninspiring, another reason, perhaps, to doubt the growth pace of the US economy. But Eric Sheridan and Kate McShane point out that people are still shopping, they just are starting their holiday shopping a lot earlier than they used to. Perhaps people are starting to shop on October 19th rather than November 29th. And our weekly retailer activity tracker continues to show strong shopping activity throughout November. Business sentiment is very strong. On Friday, the ISM Services index was reported to have reached a new all-time high at 69.1. And the ISM Manufacturing Index rose to 61.1 in the latest survey -- near its highest level in the last 10 years (only this past March's spike to 64.7 exceeds November). Supply chain bottlenecks partly reflect the strong demand for industrial products and the inflationary impulse that such bottlenecks support. But the strong business sentiment may also reflect how Corporate America is adjusting to the 'new normal' of the post-pandemic era -- and likes what it sees. Stock market volatility is high. In the past week, the VIX has spiked back up to 32, highlighting the uncertainty that is permeating around stocks now. As we wrote in Thursday's Midday, "price discovery," the spike in volatility appears to simply reflect the increased difficulty in determining the price of risk assets in a world of rising inflation, virus waves, and normalizing growth. And as we step into the 'new normal', perhaps such uncertainty is likely to persist such that volatility remains elevated for longer than we have seen in past cycles. One other note on the VIX: in the 3+ years prior to the pandemic from December 2016 through late-February 2020, the VIX had a median weekly level of 13. Since the VIX picked up on the pandemic risk in late-February 2020, the VIX has registered a median of 22. One last item for the 'new normal' file: rates. While the stock market is going through another bout of elevated uncertainty and a spike in the VIX, yields on 10-year Treasuries have retreated back to 1.36%, well above the lows we saw at the heart of the pandemic in 2020, but at the very bottom of the range we experienced in the post-Great Financial Crisis era. Praveen Korapaty forecasts that yields will rise to 2.00% by year-end 2022 but it is interesting to see that as the economy 'normalizes', yields on 10-year Treasuries are not pushing higher -- even as inflation does. Inflation markets this week began to price in less inflation in the future -- contributing to the lower 10-year yield. But regardless of the technical factors that may be holding rates down, an ultra-low 10-year Treasury yield has provided a good backdrop for stock price appreciation in the past - especially the Tech-laden, 'long duration' US stock market. Interesting fact: beyond the Tech-laden, 'long-duration' S&P 500, index returns this year have been quite a bit less impressive. The Russell 2000 Small Cap stock index, for example, is now up less than 10% for the year. Tyler Durden Fri, 12/03/2021 - 20:31.....»»

Category: blogSource: zerohedgeDec 4th, 2021

Lawyer who hatched a plan to throw the 2020 election to Trump pleads the 5th in Congress" Capitol-riot inquiry

John Eastman is the second witness who has invoked or plans to invoke the Fifth Amendment in response to a January 6 committee subpoena. John Eastman appeared onstage with Rudy Giuliani at the pro-Trump rally that preceded the January 6 attack on the Capitol.Jim Bourg/Reuters A lawyer invoked his Fifth Amendment rights in response to a January 6 committee subpoena. John Eastman's attorney sent a letter to the committee saying Eastman asserted the rights. Eastman is the second witness who has used or plans to use the Fifth Amendment in the inquiry. A lawyer and former Supreme Court clerk who advised former President Donald Trump will invoke his Fifth Amendment rights in response to a subpoena from the House select committee investigating the January 6 Capitol riot.John Eastman's lawyer Charles Burnham sent a letter to committee's chair, Rep. Bennie Thompson, on Wednesday saying, "Dr. Eastman hereby asserts his Fifth Amendment right not to be a witness against himself in response to your subpoena."Politico first reported the news."Members of this very Committee have openly spoken of making criminal referrals to the Department of Justice and described the Committee's work in terms of determining 'guilt or innocence,'" the letter said. "Dr. Eastman has a more than reasonable fear that any statements he makes pursuant to this subpoena will be used in an attempt to mount a criminal investigation against him."Eastman is the second witness who has invoked or plans to invoke their Fifth Amendment rights in response to a committee subpoena. Earlier this week, a lawyer representing the former Justice Department official Jeffrey Clark informed the committee that his client would do the same. The panel said it expected Clark to come in on Saturday and formally assert his claim.Eastman was a law professor at Chapman University and retired on January 13, a week after the deadly Capitol insurrection in which a mob of Trump supporters tried to stop Congress from certifying then-President-elect Joe Biden's victory.Bob Woodward and Robert Costa say in their book "Peril" that Eastman sent Sen. Mike Lee of Utah a memo on January 2 falsely claiming that "7 states have transmitted dual slates of electors to the President of the Senate," who at the time was Vice President Mike Pence.Beyond claiming with zero evidence that multiple states had sent "alternate" slates of electors to Congress, Eastman's memo went a step further and "turned the standard counting process on its head," the book adds.In the memo, Eastman laid out six steps he said Pence could take to throw the election to Trump. One of them involved him unilaterally declaring that because of "ongoing disputes" in the seven states, "there are no electors that can be deemed validly appointed in those States."Eastman's assertion caught the lawmaker by surprise, the book says: "Lee was shocked. ... The possibility of alternate or dueling slates would be national news. Yet there had been no such news."The idea of "dueling electors" was previously an obscure one but gained steam in GOP circles in the run-up to January 6 as Trump advisors, pundits, and legal scholars speculated about sending an "alternate" slate of pro-Trump electors from battleground states to tilt the electoral-vote count in his favor.Once the Electoral College has met, and each state has certified its election results, there's no constitutional provision for two slates of electors.According to The New York Times, an alternate slate of electors has been sent to Congress only once since the Electoral Count Act of 1887 was signed into law: in 1960, when Hawaii's Republican governor sent a Republican slate of electors amid a dispute over the state's election results. But once the recount was finished and showed that the Democratic nominee John F. Kennedy had won the state's election, the governor sent a Democratic slate to Congress, which it accepted.No such scenario existed after the 2020 election. Every US state had certified its election results, and the states to which Trump and his allies wanted to send "alternate" pro-Trump electors had certified their results for Biden.Read the original article on Business Insider.....»»

Category: dealsSource: nytDec 3rd, 2021

Lawyer who hatched a plan to throw the 2020 election to Trump pleads the 5th in Congress" Capitol riot probe

John Eastman is the second witness who invoked or plans to invoke the 5th Amendment in response to a January 6 committee subpoena. John Eastman appeared onstage with Rudy Giuliani at the pro-Trump rally that preceded the January 6 attack on the Capitol.Jim Bourg/Reuters A Trump-aligned lawyer invoked his 5th Amendment rights in response to a Jan. 6 committee subpoena. John Eastman's attorney sent a letter to the committee saying he "hereby asserts his Fifth Amendment right not to be a witness against himself." Eastman is the second witness who took or plans to take the 5th Amendment related to the Capitol riot probe. A lawyer and former Supreme Court clerk who advised former President Donald Trump will invoke his 5th Amendment rights in response to a subpoena from the House select committee investigating the January 6 Capitol riot.John Eastman's lawyer, Charles Burnham, sent a letter to committee chairman Rep. Bennie Thompson on December 1 saying, "Dr. Eastman hereby asserts his Fifth Amendment right not to be a witness against himself in response to your subpoena."Politico first reported the news."Members of this very Committee have openly spoken of making criminal referrals to the Department of Justice and described the Committee's work in terms of determining 'guilt or innocence,'" the letter said. "Dr. Eastman has a more than reasonable fear that any statements he makes pursuant to this subpoena will be used in an attempt to mount a criminal investigation against him."Eastman is the second witness who has invoked or plans to invoke their 5th Amendment privileges in response to a committee subpoena. Earlier this week, a lawyer representing the former Justice Department official Jeffrey Clark informed the committee that his client will do the same. The panel said it expects Clark to come in on Saturday and formally assert his claim.Eastman was a law professor at Chapman University and retired on January 13, a week after the deadly Capitol insurrection in which a mob of frenzied Trump supporters tried to stop Congress from certifying President Joe Biden's victory.According to Bob Woodward and Robert Costa's book "Peril," Eastman sent Utah Sen. Mike Lee a memo on January 2 falsely claiming that "7 states have transmitted dual slates of electors to the President of the Senate," who at the time was Vice President Mike Pence.Beyond claiming with zero evidence that multiple states had sent "alternate" slates of electors to Congress, Eastman's memo went a step further and "turned the standard counting process on its head," the book said.In the memo, Eastman laid out six steps he said Pence could take to throw the election to Trump. One of them involved him unilaterally declaring that because of "ongoing disputes" in the seven states, "there are no electors that can be deemed validly appointed in those States."Eastman's assertion caught the lawmaker by surprise, the book said: "Lee was shocked ... The possibility of alternate or dueling slates would be national news. Yet there had been no such news."The idea of "dueling electors" was previously an obscure one but gained steam in GOP circles in the run-up to January 6, as Trump advisors, pundits, and legal scholars speculated about sending an "alternate" slate of pro-Trump electors from battleground states to tilt the electoral vote count in his favor.Once the Electoral College has met and each state has certified its election results, there's no constitutional provision for a "duel slate" of electors.According to The New York Times, an "alternate" slate of electors has only been sent to Congress once since the Electoral Count Act of 1887 was signed into law: in 1960, when Hawaii's Republican governor sent a Republican slate of electors amid a dispute over the state's election results. But once the recount was finished and showed that Democratic nominee John F. Kennedy had won the state's election, the governor sent a Democratic slate to Congress, which it accepted.No such scenario existed after the 2020 election. Every US state had certified its election results, and the states that Trump and his allies wanted to send "alternate" pro-Trump electors had certified their results for Biden.Read the original article on Business Insider.....»»

Category: smallbizSource: nytDec 3rd, 2021

Futures Flat Ahead Of Taper Accelerating Payrolls

Futures Flat Ahead Of Taper Accelerating Payrolls U.S. equity futures are flat, rebounding from an overnight slide following news that 5 "mild" Omicron cases were found in New York, and European stocks wavered at the end of a volatile week as traders waited for the latest jobs data to assess the likely pace of Federal Reserve tightening and accelerated tapering. Emini S&P futures traded in a narrow range, and were up 2 points or 0.04%, Nasdaq futures were flat,while Dow Jones futures were up 8 points. The dollar edged higher, along with the euro after ECB President Christine Lagarde said inflation will decline in 2022. Crude advanced after OPEC+ left the door open to changing the plan to raise output at short notice. S&P 500 and Nasdaq 100 contracts fluctuated after dip-buyers Thursday fueled the S&P 500’s best climb since mid-October, a sign that some of the worst fears about the omicron virus strain are dissipating. That said, concerns about omicron are overshadowing economic news for now with “a lot of noise and very little meaningful information,” said Geir Lode, head of global equities at Federated Hermes in London. “The prospect of a faster monetary policy tightening could -- and should probably -- lead to a clear market reaction,” he said. “It is also another argument for why we assume value stocks outperform growth stocks. At the moment, however, investors’ attention is elsewhere.” In the latest U.S. data, jobless claims remained low, suggesting additional progress in the labor market. Traders are awaiting today's big event - the November payrolls numbers, which could shape expectations for the pace of Fed policy tightening (full preview here). Bloomberg Economics expects a strong report, while the median estimate in a Bloomberg survey of economists predicts an increase of 550,000. “Assuming the omicron news remains less end-of-the-world, a print above 550,000 jobs should see the faster Fed-taper trade reassert itself,” Jeffrey Halley, a senior market analyst at Oanda, wrote in a note. “That may nip the equity rally in the bud, while the dollar and U.S. yields could resume rising.” In premarket trading, Didi Global Inc. jumped more than 14% in U.S. premarket trading before reversing all gains, after the Chinese ride-hailing giant said it began preparations to withdraw from U.S. stock exchanges. U.S. antitrust officials sued to block chipmaker Nvidia’s proposed $40 billion takeover of Arm, saying the deal would hobble innovation and competition. Elon Musk’s offloading of Tesla Inc. shares surpassed the $10 billion mark as he sold stock in the electric-car maker for the fourth consecutive week. Here are some of the other biggest U.S. movers today: DocuSign (DOCU US) plunges 32% in premarket trading as the e-signature company’s quarterly revenue forecast missed analysts’ estimates. JPMorgan and Piper Sandler cut ratings. Marvell Technology (MRVL US) shares rise 18% in premarket after the semiconductor company’s fourth-quarter forecast beat analyst estimates; Morgan Stanley notes “an exceptional quarter” with surprising outperformance from enterprise networking, strength in 5G and in cloud. Asana (ASAN US) shares slump 14% in premarket trading after results, with KeyBanc cutting the software firm’s price target on a reset in the stock’s valuation. Piper Sandler said that slight deceleration in revenue and billings growth could disappoint some investors. Zillow Group (ZG US) shares rise 8.8% in premarket after the online real-estate company announced a $750 million share repurchase program and said it has made “significant progress” on Zillow Offers inventory wind- down. Stitch Fix (SFIX US) jumped in premarket after Morgan Stanley raised its rating to equal-weight from underweight. Smartsheet (SMAR US) rose in postmarket trading after the software company boosted its revenue forecast for the full year; the guidance beat the average analyst estimate. National Beverage Corp. (FIZZ US) gained in postmarket trading after the drinks company announced a special dividend of $3 a share. Ollie’s Bargain (OLLI US) plunged 21% in U.S. premarket trading on Friday, after the company’s quarterly results and forecast disappointed, hurt by supply-chain troubles. Smith & Wesson Brands (SWBI US) stock fell 15% in postmarket trading after adjusted earnings per share for the second quarter missed the average analyst estimate. In Europe, the Stoxx Europe 600 Index slipped as much as 0.2% before turning green with mining companies and carmakers underperforming and energy and utility stocks rising. Swedish Orphan Biovitrum AB fell as much as 26% after private-equity firm Advent International and Singapore wealth fund GIC abandoned their $7.6 billion bid to buy the drugmaker. Volatility across assets remains elevated, reflecting the Fed’s shift toward tighter monetary settings and uncertainty about how the omicron outbreak will affect global reopening. The hope is that vaccines will remain effective or can be adjusted to cope. New York state identified at least five cases of omicron, which is continuing its worldwide spread, while the latest research shows the risk of reinfection with the new variant is three times higher than for others. “The environment in markets is changing,” Steven Wieting, chief investment strategist at Citigroup Private Bank, said on Bloomberg Television. “Monetary policy, fiscal policy are all losing steam. It doesn’t mean a down market. But it’s not going to be like the rebound, the sharp recovery that we had for almost every asset in the past year.” Earlier in the session, Asian stocks held gains from the past two days as travel and consumer shares rallied after their U.S. peers rebounded and a report said Merck & Co. is seeking to obtain approval of its Covid-19 pill in Japan. The MSCI Asia Pacific Index was little changed after climbing as much as 0.3%, with Japan among the region’s best performers. South Korea’s benchmark had its biggest three-day advance since February, boosted by financial shares. Still, Asian stocks headed for a weekly loss as U.S. regulators moved a step closer to boot Chinese firms off American stock exchanges. The Hang Seng Tech Index slid as much as 2.7% to a new all time low, as Tencent Holdings and Alibaba Group Holding fell after Didi Global Inc. began preparations to withdraw its U.S. listing.  “While the risks of delisting have already been brought up previously, a step closer towards a final mandate seems to serve as a reminder for the regulatory risks in Chinese stocks,” said Jun Rong Yeap, a market strategist at IG Asia Pte. Asian stocks remain stuck near a one-year low, as the delisting issue damped sentiment already hurt by omicron and the Fed’s hawkish pivot. A U.S. payrolls report later today could give further clues on the pace of tightening Japanese equities rose, paring their weekly loss, helped by gains in economically sensitive names. Electronics makers reversed an early loss to become the biggest boost to the Topix, which gained 1.6%. Automakers and banks also gained, while reopening plays tracked a rebound in U.S. peers. Daikin and Recruit were the largest contributors to a 1% gain in the Nikkei 225, which erased a morning decline of as much as 0.6%. The Topix still dropped 1.4% on the week, extending the previous week’s 2.9% slide, amid concerns over the omicron coronavirus variant. Despite some profit-taking in tech stocks in the morning session, “the medium and long-term outlooks for these names continue to be really good,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities. “The spread of the omicron variant doesn’t mean an across-the-board selloff for Japanese stocks.” India’s benchmark equity index recorded a weekly advance, partly recovering from a sharp sell-off triggered by uncertainty around the new Covid variant, with investors focusing on the central bank’s monetary policy meeting from Monday.  The S&P BSE Sensex fell 1.3% to 57,696.46, but gained 1% for the week after declining for two weeks. The NSE Nifty 50 Index dropped 1.2%, the biggest one-day decline since Nov. 26. All but three of the 19 sector sub-indexes compiled by BSE Ltd. fell, led by a gauge of energy companies. “The focus seems to be shifting from premium Indian equities to relatively cheaper markets,” Shrikant Chouhan, head of retail equity search at Kotak Securities said in a note. The cautious mood in India was heightened by the “unenthusiastic” response to the IPO of Paytm, which was also the biggest public share sale in the country, and a resurgence of Covid concerns across Europe, he added.  Investors also focused on the country’s economic outlook, which is showing signs of improvement. Major data releases this week -- from economic expansion to tax collection -- showed robust growth. “Strong domestic indicators are playing a key role in driving the market amid negative global cues,” said Mohit Nigam, a fund manager with Hem Securities. But any further spread of the omicron strain in India may cap local equity gains, he said. Two cases of the new variant have been detected so far in the country. The market’s attention will shift to the Reserve Bank of India’s policy announcement on Dec. 8, after a three-day meeting from Monday. The panel is expected to leave record low interest rates unchanged as inflation remains within its target range. The economy faces new risks from the omicron variant after expanding 8.4% in the three months through September. Reliance Industries contributed the most to the Sensex’s decline, falling 3%. Out of 30 shares in the index, 26 fell and 4 gained. Australia stocks posted a fourth week of losses amid the Omicron threat even as the S&P/ASX 200 index rose 0.2% to close at 7,241.20, boosted by banks and miners. That trimmed the benchmark’s loss for the week to 0.5%, its fourth-straight weekly decline.  Corporate Travel was among the top performers, rising for a second session. TPG Telecom led the laggards, tumbling after media reports that founder David Teoh entered into an agreement to sell about 53.1 million shares in a block trade.  In New Zealand, the S&P/NZX 50 index was little changed at 12,676.50. In FX, the Bloomberg Dollar Spot Index advanced and the greenback was higher against all of its Group-of-10 peers, with risk-sensitive Scandinavian and Antipodean currencies the worst performers. Turkish lira swings back to gain against the USD after central bank intervention for the 2nd time in 3 days. The pound weakened and gilt yields fell after Bank of England policy maker Michael Saunders urged caution on monetary tightening due to the potential effects of the omicron variant on the economy. The euro fell below $1.13 and some traders are starting to use option plays to express the view that the currency may extend its drop in coming month, yet recover in the latter part of 2022. The Aussie dropped for a fourth day amid concern U.S. payroll data due Friday may add to divergence between RBA and Fed monetary policy. Australia’s sale of 2024 bonds saw yields drop below those in the secondary market by the most on record. The yen weakened for a second day as the prospects for a faster pace of Fed tapering fans speculation of portfolio outflows from Japan. In rates, Treasury yields ticked lower, erasing some of Tuesday jump after Fed officials laid out the case for a faster removal of policy support amid high inflation.  Treasurys followed gilts during European morning, when Bank of England’s Saunders said the omicron variant is a key consideration for the December MPC decision which in turn lowered odds of a December BOE rate hike. Treasury yields are richer by up to 1.5bp across 10-year sector which trades around 1.43%; gilts outperform by ~1bp as BOE rate- hike premium for the December meeting was pared following Saunders comments. Shorter-term Treasury yields inched up, and the 2-year yield touched the highest in a week Friday’s U.S. session features a raft of data headed by the November jobs report due 8:30am ET where the median estimate is 550k while Bloomberg whisper number is 564k; October NFP change was 531k Crude futures extend Asia’s modest gains advanced after OPEC+ proceeded with an output hike but left room for quick adjustments due to a cloudy outlook, making shorting difficult. WTI added on ~2.5% to trade near $68.20, roughly near the middle of the week’s range. Brent recovers near $71.50. Spot gold fades a small push higher to trade near $1,770/oz. Most base metals are well supported with LME aluminum and zinc outperforming.  Looking at the day ahead, and the aforementioned US jobs report for November will be the highlight. Other data releases include the services and composite PMIs for November from around the world, Euro Area retail sales for October, and in addition from the US, there’s October’s factory orders and the November ISM services index. From central banks, we’ll hear from ECB President Lagarde and chief economist Lane, the Fed’s Bullard and the BoE’s Saunders. Market Snapshot S&P 500 futures little changed at 4,574.25 STOXX Europe 600 up 0.2% to 466.43 MXAP little changed at 192.06 MXAPJ down 0.5% to 625.64 Nikkei up 1.0% to 28,029.57 Topix up 1.6% to 1,957.86 Hang Seng Index little changed at 23,766.69 Shanghai Composite up 0.9% to 3,607.43 Sensex down 1.3% to 57,692.90 Australia S&P/ASX 200 up 0.2% to 7,241.17 Kospi up 0.8% to 2,968.33 Brent Futures up 3.3% to $71.97/bbl Gold spot down 0.1% to $1,767.28 U.S. Dollar Index up 0.14% to 96.29 German 10Y yield little changed at -0.37% Euro down 0.1% to $1.1286 Top Overnight News from Bloomberg “I see an inflation profile which looks like a hump” and “we know how painful it is,” ECB President Christine Lagarde says at event Friday. She also said that “when the conditions of our forward guidance are satisfied, we won’t be hesitant to act” and that an interest rate increase in 2022 is very unlikely The betting window is open in the fixed-income market as hedge funds and other traders hunt for mispriced risk heading into 2022 -- whether it’s predictions for accelerating inflation or rising interest rates The U.K. Municipal Bonds Agency aims to sell the first ethical bonds on behalf of local governments early next year. The body, set up to help U.K. councils access capital markets, is looking to issue a couple of sustainable bonds in the first quarter of 2022, according to officials advising on the sales. It expects to follow that with a pooled ethical bond to raise money for a group of different local authorities Low- income countries indebted to Chinese commercial and policy banks could buy specially-created Chinese government bonds and then use these as collateral to support the sale of new yuan debt, Zhou Chengjun, head of the People’s Bank of China’s finance research institute, wrote in an article published in the ChinaBond Magazine Chinese tech shares briefly touched their record lows in Hong Kong, as Didi Global Inc.’s announcement to start U.S. delisting and rising scrutiny on mainland firms traded there dealt a further blow to already soured sentiment The yuan is set to weaken for the first time in three years in 2022, as capital inflows are expected to slow amid a shrinking yield gap between China and the U.S., a Bloomberg survey shows Turkish inflation accelerated for a sixth month in November to the highest level in three years, driven by a slump in the lira that continues to cloud consumer price outlook A more detailed look at global markets courtesy of Newsquawk Asian equities eventually traded mostly higher following the cyclical-led rebound in the US, but with the mood in the region tentative as Omicron uncertainty lingered after further cases of the new variant were reported stateside and with the latest NFP data drawing near. ASX 200 (+0.2%) lacked direction as resilience in cyclicals was offset by underperformance in defensives and amid ongoing COVID-19 concerns which prompted the Western Australian government to widen its state border closure to include South Australia. Nikkei 225 (+1.0%) was initially subdued amid recent currency inflows and with SoftBank among the worst performers amid several negative headlines including the FTC suing to block the Nvidia acquisition of Arm from SoftBank, while the Japanese conglomerate also suffered from its exposure in “super app” Grab which tumbled 20% in its New York debut and with Didi to start delisting from the NYSE in favour of a Hong Kong listing, although the index eventually recovered losses in latter half of trade. Hang Seng (-0.1%) and Shanghai Comp. (+0.9%) were varied with US-listed Chinese companies pressured as the US SEC moved closer to delisting Chinese ADRs for failing to comply with disclosure requirements, while the mood across developers was also glum with Kaisa shares at a record low after its bond exchange offer to avert a default was rejected by bondholders and China Aoyuan Property Group slumped by double-digit percentages following its warning of an inability to repay USD 651.2mln of debt due to a liquidity crunch. Furthermore, participants digested the latest Caixin Services and Composite PMI data which slowed from the prior month, but both remained in expansion territory and with reports that advisors are to recommend lowering China’s economic growth target to 5.0%-5.5% or above 5%, fanning hopes for looser policy. Finally, 10yr JGBs gained and made another incursion above 152.00 with prices supported amid the cautious mood in Japan and with the BoJ also present in the market today for a total of JPY 1.05tln of JGBs heavily concentrated in 1yr-5yr maturities. Top Asian News Astra Said to Sink Advent’s $7.6 Billion Buyout of Biotech Sobi BOJ Is Said to See Omicron as Potential Reason to Keep Covid Aid Kaisa Swap Rejected, Developer Bonds Slide: Evergrande Update Permira Is Said to Near Deal for U.K. Blood Plasma Lab BPL The positivity seen heading into the European open dissipated as the session went underway, with the region seeing more of a mixed configuration in cash markets (Euro Stoxx 50 -0.1%; Stoxx 600 Unch) – with no clear drivers in the run-up to the US jobs report. The release will be carefully watching measures of labour market slack to gauge the progress towards the Fed's 'three tests' for rate hikes, whilst the Fed appears almost certain to announce a quickening in the pace of asset purchase tapering at its December meeting (Full NFP preview available in the Newsquawk Research Suite). The recent downside in Europe also seeps into the US futures, with the RTY (-0.2%), NQ (-0.2%) and ES (-0.3%) posting broad-based losses as things stand. Sectors have shifted from the earlier firm cyclical layout to one of a more defensive nature, with Healthcare, Food & Beverages, and Personal & Household Goods making their way up the ranks. Travel & Leisure still sits in the green but largely owed to sector heavyweight Evolution (+6.3%) as the group is to acquire its own shares in Nasdaq Stockholm. Oil & Gas sits as the current winner as crude markets claw back a bulk of this week's losses. On the flip side, Basic Resources are hit as iron ore tumbled overnight. In terms of individual movers, Dassault Aviation (+8.0%) shares soared after France signed a deal with the UAE worth some EUR 17bln. Allianz (+1.0%) stays in the green after entering a reinsurance agreement with Resolution Life and affiliates of Sixth Street for its US fixed index annuity portfolio, with the transaction to unlock USD 4.1bln in value. Top European News U.K. Nov. Composite PMI 57.6 vs Flash Reading 57.7 The Chance of a BOE Rate Hike This Month Has Fallen: BofA’s Wood AP Moller Holding Agrees to Buy Diagnostics Company Unilabs Permira Is Said to Near Deal for U.K. Blood Plasma Lab BPL In FX, it’s debatable whether this month’s US jobs data will carry as much weight as normal given that Fed rhetoric in the run up to the pre-FOMC blackout period has effectively signalled a faster pace of tapering and the likelihood of more hawkishly aligned dot plots. However, the latest BLS report could be influential in terms of shaping the tightening path once QE has been withdrawn, as markets continue to monitor unfolding COVID-19 developments with the main focus on vaccine efficacy against the new Omicron variant. In the meantime, Buck bulls have resurfaced to lift the index more firmly back above 96.000 and towards loftier levels seen earlier this week within a 96.075-324 range, eyeing Monday’s 96.448 peak ahead of the semi-psychological 96.500 mark and then the w-t-d best at 96.647 set the day after. Back to Friday’s agenda, Fed’s Bullard is due to speak and the services ISM rounds off the week. AUD/NZD - The high betas are bearing the brunt of Greenback gains, but also bearish technical forces as the Aussie and Kiwi both lose sight of key chart and simple round number levels that were keeping them afloat or declines relatively contained at least. Aud/Usd is now probing 0.7050 and a Fib retracement just above, while Nzd/Usd is hovering around 0.6775 as the Aud/Nzd cross holds in the low 1.0400 zone. JPY/CAD/CHF/GBP/EUR - All softer vs their US counterpart, with the Yen looking towards 113.50 for support with added protection from option expiry interest up to 113.60 in 1.1 bn, while the Loonie is relying on WTI to maintain recovery momentum before Canada and the US go head-to-head in the employment stakes. Usd/Cad is meandering in the low 1.2800 area as the crude benchmark regains Usd 68+/brl status from a sub-Usd 66.50 base and even deeper trough below Usd 62.50 in knee-jerk response to OPEC+ sticking to its output plan yesterday. Elsewhere, the Franc continues to straddle 0.9200, Sterling has retreated from 1.3300+ terrain again post-fractionally softer than forecast final UK services and composite PMIs, whilst a less hawkish speech from BoE hawk Saunders took Cable to a session low of 1.3255 and a 15bps Dec hike pricing fell from 51% to 26%. The Euro has also reversed from recent highs beyond 1.1300 amidst rather mixed Eurozone readings and pretty routine ECB rhetoric from President Lagarde plus GC members Knot, de Cos and de Guindos. In commodities, WTI and Brent front month futures continue to nurse losses seen earlier this week, with the post-OPEC downside completely erased alongside some more. To recap, oil contracts were under pressure from compounding COVID headlines at the start of the week and in the run-up to OPEC+ whereby ministers opted to keep production plans despite the Omicron variant and the recent SPR releases. Delving deeper into these themes, desks suggest that a dominant Omicron variant could actually be positive if the strain turns out to be milder than some of its predecessors – with the jury still out but initial reports from India and South Africa suggesting so. Regarding OPEC+, some oil traders suggest the move to maintain plans was more of a political strategy as opposed to an attempt to balance markets, with journalists also suggesting that tensions with the US have simmered down and the prospect of further SPR releases have significantly declined. Further, it's also worth bearing in mind that due to maintenance and underinvestment, the real output hike from OPEC+ producers will likely be under the 400k BPD. In terms of Iranian developments, updates have been less constructive, with sources suggesting that Iran is holding a tougher stance than during the June talks. Negotiations will break today and resume next week. Crude contracts are modestly lower on the week and well-off worst levels, with Brent Feb now back around USD 71.50/bbl (65.72-77.02 weekly range), while WTI Jan resides around USD north of USD 68/bbl (62.43-72.93/bbl). Elsewhere, spot gold and silver vary, with the former finding some overnight support around USD 1,766/oz as risk sentiment erred lower, whilst the cluster of DMAs remain around the USD 1,790-91/oz region. In terms of base metals, LME copper is flat on either side of USD 9,500/t. Overnight, Dalian iron ore futures fell amid a decline in mill demand, whilst China's steel hub Tangshan city is to launch a second-level pollution alert from December 3-10th, the local government said – providing further headwinds for iron demand. US Event Calendar 8:30am: Nov. Change in Nonfarm Payrolls, est. 550,000, prior 531,000 Nov. Change in Private Payrolls, est. 525,000, prior 604,000 Nov. Change in Manufact. Payrolls, est. 45,000, prior 60,000 8:30am: Nov. Unemployment Rate, est. 4.5%, prior 4.6% Nov. Underemployment Rate, prior 8.3% Nov. Labor Force Participation Rate, est. 61.7%, prior 61.6% 8:30am: Nov. Average Hourly Earnings YoY, est. 5.0%, prior 4.9% Nov. Average Hourly Earnings MoM, est. 0.4%, prior 0.4% Nov. Average Weekly Hours All Emplo, est. 34.7, prior 34.7 9:45am: Nov. Markit US Composite PMI, prior 56.5 Nov. Markit US Services PMI, est. 57.0, prior 57.0 10am: Oct. Factory Orders, est. 0.5%, prior 0.2% Oct. Factory Orders Ex Trans, est. 0.6%, prior 0.7% Oct. Durable Goods Orders, est. -0.5%, prior -0.5% Oct. Cap Goods Ship Nondef Ex Air, prior 0.3% Oct. Cap Goods Orders Nondef Ex Air, prior 0.6% 10am: Nov. ISM Services Index, est. 65.0, prior 66.7 DB's Jim Reid concludes the overnight wrap I got great news yesterday. It was the school Xmas Fayre last weekend and at one stall we had to guess the weight of the school duck that lives in their pond. I spent a long time analysing it outside and was trying to mentally compare it to the weights of my various dumbbells at home. I learnt yesterday that I’d won. My prize? A rubber duck for the bath. In more trivial news I also learnt I was voted no.1 analyst in four categories of the Global Institutional Investor Fixed Income Analyst awards for 2021. So many thanks for all who voted. It is very much appreciated. However in terms of physical mementoes of my achievements yesterday, all I actually have to show for it is a brown rubber duck. Guessing the weight of a duck is a walk in the park at the moment compared to predicting markets. Indeed it’s been a wild week. If you’ve managed to time all the various swings you can surely only have done it via a time machine. If you have done so without one though I will happily hand over my prized rubber duck. By the close of trade, the S&P 500 (+1.42%) had begun to recover following its worst 2-day performance in over a year. The VIX index of volatility ticked back down beneath the 30 mark again, but finished above 25 for the fourth day in five for the first time since December of last year. Meanwhile Oil plunged and then soared on OPEC+ news and curves continued to flatten as 2yr yields got back close to their pre-Omicron levels after a near 20bps round journey over the last week. I’m glad I’m a research analyst not a day trader, and that’s before we get to today’s payrolls print. We’ll start with Omicron, where yesterday predictably saw a number of new countries report confirmed cases for the first time, as well as a second case in the United States during market hours, this one with roots in New York City, which reported more than 11,300 new cases yesterday, the highest daily count since January. After the market closed, an additional five cases were identified in New York, which sent futures over -0.5% lower at the time. They are back to flat as we type possibly helped by a late deal and vote in Congress to fund the US government through to February 18th and avert a shutdown at midnight tonight. Back to the virus and governments continued to ramp up their defence measures, with Germany yesterday announcing a range of fresh restrictions as they grapple with the latest wave, including a requirement that you must either be vaccinated or have recovered from Covid in order to get into restaurants or non-essential stores. There’s also set to be a parliamentary vote on mandatory vaccinations, and incoming Chancellor Scholz said that he expected it to pass. In the US, President Biden announced new measures to fight the impending winter wave and spreading Omicron variant, including tighter testing guidelines for international visitors, wider availability of at home tests, whilst accelerating efforts to get the rest of the world vaccinated. Over in South Africa, the daily case count rose further yesterday, with 11,535 reported, up from 8,561 the previous day and 4,373 the day before that. So definitely one to keep an eye on as we look for clues about what this could mean for the world more broadly. That said, we’re still yet to get the all-important information on how much less or more deadly this might be, as well as how effective vaccines still are and the extent to which it is more transmissible relative to other variants. Back to markets, and the revival in risk appetite led to a fresh selloff in US Treasuries, with the 2yr yield up +6.7bps, and the 10yr yield up +3.7bps. Nevertheless, as mentioned at the top, the latest round of curve flattening has sent the 2s10s slope to its flattest since before the Georgia Senate seat runoff gave Democrats control of Congress. It’s now at just +82.0bps, whilst the 5s30s slope is now at flattest since March 2020, at +55.0bps. So a warning sign for those who believe in the yield curve as a recessionary indicator, albeit with some way to go before that flashes red. In Europe there was also a modest curve flattening, but yields moved lower across the board, with those on 10yr bunds (-2.6bps), OATs (-3.2bps) and BTPs (-5.6bps) all down by the close. Over in equities, there was a decent rebound in the US following the recent selloff, with the S&P 500 (+1.42%) posting a solid gain. It was a very broad-based advance, with over 90% of the index’s members moving higher for the first time since mid-October. Every S&P sector increased, which was enough to compensate for the noticeable lag in mega-cap shares, with the FANG index gaining just +0.15%. The STOXX 600 decreased -1.15%, though that reflected the fact Europe closed ahead of the big reversal in sentiment the previous session. Aside from Omicron, one of the other biggest stories yesterday was the decision by the OPEC+ group to continue with their production hike, which will add a further +400k barrels/day to global supply in January. The news initially sent oil prices sharply lower, with Brent crude falling to an intraday low beneath $66/bbl, before recovering to end the day back at $69.67/bl in light of the group saying that they could adjust their plans “pending further developments of the pandemic”, with the ability to “make immediate adjustments if required”. Even with the bounceback yesterday however, oil has been one of the worst-performing assets over recent weeks, with Brent hitting an intraday high of $86.7/bbl in late-October, followed by a November that marked its worst monthly performance since the pandemic began. Overnight in Asia stocks are trading mostly higher with the KOSPI (+0.86%), Shanghai Composite (+0.58%), CSI (+0.35%) and the Nikkei (+0.29%) up but with the Hang Seng (-0.74%) under pressure amid the ongoing regulatory clampdown in technology from China as Didi prepares to delist on US markets. Looking forward now, the main highlight on today’s calendar is the US jobs report for November, which comes less than two weeks’ away from the Fed’s meeting where they’ll decide on the pace of tapering. In terms of what to expect, our US economists are looking for nonfarm payrolls to grow by +600k, which would be the fastest pace of job growth since July, and that in turn would take the unemployment rate down to a post-pandemic low of 4.4%. Ahead of that, we had another decent weekly claims report (albeit that took place after the jobs report survey period), with the number for the week through November 26 coming in at a stronger-than-expected 222k (vs. 240k expected). The previous week’s number was also revised down -5k, sending the 4-week moving average down to its own post-pandemic low of 238.75k. Looking at yesterday’s other data releases, the Euro Area unemployment rate fell to a post-pandemic low of 7.3% in October, in line with expectations. However producer price inflation shot up even faster than anticipated to +21.9% (vs. 19.0% expected). To the day ahead now, and the aforementioned US jobs report for November will be the highlight. Other data releases include the services and composite PMIs for November from around the world, Euro Area retail sales for October, and in addition from the US, there’s October’s factory orders and the November ISM services index. From central banks, we’ll hear from ECB President Lagarde and chief economist Lane, the Fed’s Bullard and the BoE’s Saunders. Tyler Durden Fri, 12/03/2021 - 07:55.....»»

Category: blogSource: zerohedgeDec 3rd, 2021

FDA Expedites Review Process For Omicron Vaccines And Drugs

FDA Expedites Review Process For Omicron Vaccines And Drugs It's been one week since the omicron variant first rattled markets and prompted the Federal Reserve's latest rethink of its plans for rolling back its monetary stimulus. And in that time, vaccine-makers have talked their book by sharing plans to produce new omicron-targeted vaccines, while others claim that there are no data suggesting the Pfizer-BioNTech jab is less effective against omicron. Assuming the world still does care about omicron three months from now (the first cases of the variant have only just been confirmed in the US in recent days), the FDA and its advisors are reportedly working on an expedited approval process that will allow "tweaked" versions of extant vaccines and remedies to be sheperded through in a matter of weeks. WSJ reports that the FDA has been quietly meeting with drug makers to establish guidelines for expedited approval of the next generation of vaccines, if they're needed (and that's still a big "if"). According to the new rules the FDA is adopting, drugmakers are working on new vaccines and would be expected to meet standards similar to those required for authorization of boosters. This means vaccine-makers would be spared the effort of conducting massive, time-consuming trials where they monitor a vaccine test group and a placebo group and wait to see which group reports fewer COVID casualties. Instead, vaccine-makers could study the "immune response" elicited by the new jabs. Companies like Pfizer would have 3 months to create and test the jabs, with two or three weeks for the FDA to approve them. Pfizer CEO Albert Bourla said this week that the company and its partner BioNTech could have the vaccines ready in 100 days, while Moderna has said the company can advance new candidates to clinical testing in 60 to 90 days. Only three cases of omicron have been confirmed in the US, and fewer than 300 have been confirmed globally. Scientists are still trying to figure out whether new treatments are necessary to protect people from the variant, especially since South African scientists at the institute that first identified the new variant are saying that it produces milder infections than delta, especially in patients who have already been vaccinated. A WHO spokesman said Friday that the agency hasn't seen any deaths linked to the omicron variant just yet - a good sign. Bottom line: while the FDA is doing everything in its power to make sure it's prepared for omicron, at this point it's not yet clear whether the world will still care about this latest "variant of concern" three months from now. Tyler Durden Fri, 12/03/2021 - 08:05.....»»

Category: blogSource: zerohedgeDec 3rd, 2021

Colorado Confirms 3rd US Omicron Case, New York Counts Most New COVID Cases Since January

Colorado Confirms 3rd US Omicron Case, New York Counts Most New COVID Cases Since January Update (1600ET): Just hours after officials in Minnesota confirmed the second case of omicron in the US, a local ABC affiliate reports that a third case of the omicron variant has been identified in Colorado.  Colorado Gov. Jared Polis announced Thursday that a case of the omicron variant of the coronavirus has been documented in his state. "Just moments ago, Colorado Department of Public Health and Environment confirmed the first Colorado case of the omicron variant," Polis said in a press conference. "It is somebody who just traveled to southern Africa and returned." More details about the patient will likely be widely disseminated in the press. Despite all the hype around the third confirmed case, Omicron is still a novelty, and few would deny that it's a long way from taking over (although, as we have previously explained, speculation that omicron is more mild than delta might mean that an omicron takeover would ultimately benefit the economy and markets). But whether it's being driven by omicron or not, it appears the winter surge that scientists have been bracing for since...last year's seasonal surge appears to have officially arrived. To wit: New York state on Thursday reported the largest number of daily new cases since January. The Empire State counted 11,300 new COVID cases, the most since January, as dozens of hospitals report nearing capacity once again. Total patients hospitalized for the virus in New York has increased by more than 1K in the span of a month, reaching 3.093K on Wednesday. As of Thursday, 56 hospitals in the state had a bed capacity of 10% or less, including Albany Medical Center Hospital, Mercy Hospital of Buffalo, Long Island Jewish Medical Center and Mount Sinai Hospital in New York City, according to the state health department. Gov. Kathy Hochul famously issued an executive order last week allowing state officials to limit non-essential hospital procedures in an effort to increase bed capacity and address staffing shortages. The order takes effect tomorrow. There were also 49 deaths reported, bringing the state's total to 46,623. Elsewhere, the US has confirmed a second case of the omicron variant in a traveler who recently visited New York City's Javits Center for an anime convention. He was confirmed to have the variant in Minnesota. President Biden unveiled his five-point winter plan to try and avert a surge in cases on Thursday afternoon. * * * After teasing various aspects of his plan to protect Americans from the omciron variant (which is arriving at the start of the latest 'winter wave') while the CDC quietly collects names of travelers who recently visited southern Africa, President Joe Biden is preparing to share his plan, which will impose tighter restrictions on foreign travelers while extending a mask mandate and (potentially) double down on vaccine restrictions for American workers (even as multiple federal judges have rejected the mandate). Biden's comments are expected later on Thursday, but during the early hours of the US session, Germany's outgoing Chancellor Angela Merkel and her successor, Olaf Scholz, agreed on a plan to effectively mandate vaccinations by imposing stringent restrictions on Germans who haven't voluntarily gotten the jab. As governments scramble to use omicron as an excuse to crack down on the unvaccinated, makers of vaccines and COVID remedies have continued to share data about their products' efficacy at combating the omicron variant. And unsurprisingly, many of the big-name firms are saying they expect their jabs to "hold up" against the variant. Despite Moderna CEO Stephane Bancel's market-rattling warnings that the first generation of mRNA vaccines - including Moderna's - might need to be retooled in order for them to protect against omicron, a senior Pfizer executive told Bloomberg that the company expects its jabs to offer significant protection against omicron, with more data expected in the coming weeks. "We don’t expect that there will be a significant drop in effectiveness," Ralf Rene Reinert, vice president of vaccines for international developed markets, said in an interview with Bloomberg Television. "But again, this is speculation. We will check this. We will have the data in the next couple of weeks." Pfizer has already started working on new versions of its vaccine twice, with the emergence of the beta and delta variants, and concluded both times that the original shot provided good protection, Reinert said. Now its scientists will evaluate whether that’s the case for omicron, Bloomberg reports. "It’s not that we start from scratch," Reinert said. "We know what we have to do." These reassurances have arrived at a critical time: on Wednesday afternoon, the US became the 29th country to identify a case of the omicron variant. A US traveler in the San Francisco area was identified as the first patient known to be infected with the new variant (though it's likely that many others have already been infected, since the variant has been detected in Europe more than two weeks ago). The US has seen a slight uptick in new cases in recent weeks as the 'winter wave' appears to be starting. Source: Reuters The global trend is moving in the same direction as Europe and other continents see rising numbers of cases. Source: Reuters And on the medical front, Pfizer isn't alone: GlaxoSmithKline said Thursday that its COVID antibody treatment looks to be effective against the new omicron variant in early tests. Lab tests of the mutations found in the variant showed the drug is still active against the virus, Glaxo said in a statement on Thursday. GSK is now conducting in vitro experiments to confirm the response against a combination of all the omicron mutations. As a result, Sotrovimab, the GSK antibody treatment, has been approved by the UK's Medicines and Healthcare products Regulatory Agency following a "rigorous" review of its safety. Meanwhile, back in South Africa, scientists are tweaking their initial warnings about the variant. One day after reporting a massive surge in new cases (which some dismissed as a quirk resulting from a change in how public health officials count positive cases), scientists for the Diseases Institute are saying that while they expect a surge in cases due to omicron, the intensity of infections should be markedly more mild. Above all, the scientists expect fewer active cases and hospitalizations during this wave. Here are some additional omicron-related headlines from Thursday: Indian officials have seen mild cases in Omicron patients. India reported two cases of the variant. UK Health Secretary Sajid Javid announced the UK secured 54mln additional doses of the Pfizer (PFE) / BioNTech (BNTX) jabs and 60mln additional doses of the Moderna (MRNA) vaccine for the next two years which he said will help the UK to "buy time" with the new variant. South Korea's government is considering coronavirus measures including banning social gatherings and reducing business hours, while it was also reported that South Korea is considering halting its gradual return to normal life as COVID-19 infections rise and it also reported a fresh record daily increase in cases, as well as confirmed its first case of the Omicron variant. The Japanese government will temporarily invalidate special visas issued to foreign nationals who meet certain conditions in an effort to curb the spread of the Omicron variant. Finally, President Biden is planning to include additional measures like forcing insurers to pay for at-home COVID tests as part of his plan for mitigating the 'winter wave' of COVID cases. Private insurers already cover COVID tests administered in doctor’s offices and other medical facilities, but there are now at least eight at-home tests on the US market that can be used by individuals at home. Biden is scheduled to deliver remarks on his 'winter plan' beginning just before 1400ET on Thursday. He will be speaking from Bethesda, Maryland. Tyler Durden Thu, 12/02/2021 - 16:21.....»»

Category: worldSource: nytDec 2nd, 2021

Kirkland"s Reports Third Quarter 2021 Results

NASHVILLE, Tenn., Dec. 2, 2021 /PRNewswire/ -- Kirkland's, Inc. (NASDAQ:KIRK) ("Kirkland's" or the "Company"), a specialty retailer of home décor and furnishings, announced financial results for the 13 and 39-week periods ended October 30, 2021. Third Quarter 2021 Financial Summary vs. Prior Year Quarter Net sales decreased 2.0% to $143.6 million, with 3.1% fewer stores Comparable sales decreased 0.7%, including an e-commerce increase of 7.3% Gross profit margin decreased 140 basis points to 34.7% Earnings per diluted share was $0.51 compared to $0.82 Adjusted earnings per diluted share was $0.51 compared to $0.66 EBITDA was $14.1 million compared to $18.9 million Adjusted EBITDA was $14.8 million compared to $18.7 million Operating income was $9.0 million compared to $13.1 million Cash balance of $26.5 million with no outstanding debt; total liquidity of $100.9 million Share repurchases of $16.5 million in the quarter Store count at quarter end of 369 Management Commentary "While the third quarter had its challenges, we remain confident in our overall position as we continue executing upon our long-term transformation strategy," said Steve "Woody" Woodward, president and CEO of Kirkland's. "We experienced softer than expected sales in the final weeks of the quarter but ended with an 8.4% two-year comparable sales increase. We continue to navigate the broader macro issues related to supply chain and labor constraints, which affected year-over-year profitability. Stripping away the incremental freight costs in our supply chain, we continued to achieve gross margin expansion. "Looking at our results through the end of November, we were impacted by inconsistent traffic patterns and broader supply chain constraints. During Black Friday, we saw in-store traffic remain relatively flat on a year-over-year basis, but there was a meaningful decline in e-commerce traffic, which led to a total sales comp decline for the first month of the fiscal fourth quarter. Given our third quarter results, along with continued supply chain headwinds and choppy sales patterns, we are revising our outlook for the remainder of the year. "Despite these headwinds, we are excited about the progress we've been making as we enter 2022. We've started a brand awareness campaign ahead of our rebranding launch to Kirkland's Home, which we expect to take place in the first quarter of 2022. Additionally, we are working to strengthen our digital capabilities within the e-commerce site to further enhance the omnichannel experience for our customers. We are also prioritizing our in-store floor layouts for new furniture and outdoor product assortments that we are rolling out in the first half of the year. We believe having a strong furniture and outdoor merchandise mix will help mitigate our seasonal reliance on holiday shopping and help drive new customer growth going forward. "Overall, we remain on track to achieve our long-term financial targets and are firmly committed to the strategic initiatives we've set forth. Our commitment to optimizing our merchandising assortment, stabilizing margins and driving profitable growth has not wavered, and we firmly believe we are on track to become a high-performance specialty home furnishing retailer with quality products at affordable price points. Although we don't have a clear indication of when supply chain constraints will subside, we are experiencing strong sell-through with the new product assortments that we are able to get to our floor, which gives us further confidence that our merchandise transformation is working and resonating with consumers. We believe we have the necessary infrastructure and team in place to continue executing upon our strategy, ultimately driving long-term shareholder value." Revised Fourth Quarter 2021 Outlook The Company now expects a mid-to-high-single-digit same-store sales decrease for the fourth quarter of fiscal 2021 and a mid-single digit same-store sales increase for fiscal 2021. With the expected sales decline and freight impact, the Company anticipates earnings in the fourth quarter to be lower than the prior-year period, while still expecting year-over-year earnings growth of approximately 50% for fiscal 2021. Strategic Initiatives and Financial Targets Kirkland's key strategic initiatives include: Accelerating product development to reinforce quality and relevancy as the Company continues its transformation into a specialty retailer where customers are able to furnish their entire home on a budget; Bolstering its omni-channel strategy via website enhancements, more focused marketing spend, an expanded online assortment, and an improved in-store experience; Improving the customer experience with the Company's re-launched loyalty program, extended credit options and broadened delivery options; and Utilizing its leaner infrastructure to be nimbler to changes in consumer preference and buying behaviors. Kirkland's annual financial targets include: Comparable sales growth, driven by e-commerce, merchandise improvements and brick-and-mortar store productivity. The Company expects e-commerce to continue to grow as a percent of its total business to over 50% of sales. The Company also intends to focus on improving the contribution of its remaining store base, which is an integral part of its omni-channel strategy and supports improved profitability of its e-commerce sales. Increasing gross margin by continuing with the Company's current discipline of limited promotional offers, expanding direct sourcing, improving supply chain efficiency and reducing occupancy costs. With improved merchandise quality and to support a better customer experience, the Company will continue to move towards more targeted promotions. Direct sourcing is expected to increase from approximately 20% of purchases in 2020 to 70% by 2025. With these improvements, continued efficiencies in the Company's supply chain and lower occupancy costs, Kirkland's goal is to improve its annual gross profit margin to a mid-to-high 30% range over the next one-to-two years. Improving profitability by leveraging the leaner infrastructure with comparable sales growth. The Company believes its ideal store count should be approximately 350 stores with additional opportunities for more favorable rent terms during ongoing lease renewals. With approximately $45 million in annualized operating expenses eliminated from the business in 2020, the Company expects annual EBITDA as a percent of sales to be in the low-to-mid double-digit range in the next one-to-two years and annual operating income as a percentage of sales to be in the high-single-digit range in the next one-to-two years. Maintaining adequate liquidity and generating free cash flow while continuing to invest in key strategic initiatives and returning excess cash to Kirkland's shareholders. The key strategic initiatives and financial targets are based on current information as of December 2, 2021, and are dependent on, among other things, consumer preferences, economic conditions and Kirkland's own successful execution of these initiatives. The information on which these initiatives and financial targets is based is subject to change, and investors are cautioned that the Company may update the initiatives and targets, or any portion thereof, at any time for any reason. Investor Conference Call and Web Simulcast Kirkland's management will host a conference call to discuss its financial results for the third quarter ended October 30, 2021, followed by a question and answer period with Steve Woodward, president and CEO, and Nicole Strain, CFO. Date: Thursday, December 2, 2021Time: 9:00 a.m. Eastern timeToll-free dial-in number: (855) 560-2577International dial-in number: (412) 542-4163Conference ID: 10162053 Please call the conference telephone number 10-15 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Gateway Investor Relations at (949) 574-3860. The conference call will be broadcast live and available for replay here and via the investor relations section of the Company's website at The online replay will follow shortly after the call and continue for one year. A telephonic replay of the conference call will be available after the conference call through December 9, 2021. Toll-free replay number: (877) 344-7529International replay number: (412) 317-0088Replay ID: 10162053 About Kirkland's, Inc. Kirkland's, Inc. is a specialty retailer of home décor in the United States, currently operating 369 stores in 35 states as well as an e-commerce website, The Company's stores present a curated selection of distinctive merchandise, including holiday décor, furniture, textiles, wall décor, decorative accessories, art, mirrors, fragrances, and other home decorating items. The Company's stores offer an extensive assortment of holiday merchandise during seasonal periods. The Company provides its customers an engaging shopping experience characterized by affordable home décor and inspirational design ideas. This combination of quality and stylish merchandise, value pricing and a stimulating online and store experience allows customers to furnish their home on a budget. More information can be found at Forward-Looking Statements  Except for historical information contained herein, the statements in this release, including all statements related to future initiatives, financial goals and expectations or beliefs regarding any future period, are forward-looking and made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the finalization of the Company's quarterly financial and accounting procedures. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Kirkland's actual results to differ materially from forecasted results. Those risks and uncertainties include, among other things, risks associated with the Company's progress and anticipated progress towards its long-term objective and the success of its plans in response to the novel coronavirus ("COVID-19") pandemic, the spread of COVID-19 and its impact on the Company's revenues and supply chain, risks associated with COVID-19 and the governments responses to it, the impact of store closures, the effectiveness of the Company's marketing campaigns, risks related to changes in U.S. policy related to imported merchandise, particularly with regard to the impact of tariffs on goods imported from China and strategies undertaken to mitigate such impact, the Company's ability to retain its senior management team, continued volatility in the price of the Company's common stock, the competitive environment in the home décor industry in general and in Kirkland's specific market areas, inflation, fluctuations in cost and availability of inventory, interruptions in supply chain and distribution systems, including our e-commerce systems and channels, the ability to control employment and other operating costs, availability of suitable retail locations and other growth opportunities, disruptions in information technology systems including the potential for security breaches of Kirkland's or its customers' information, seasonal fluctuations in consumer spending, and economic conditions in general. Those and other risks are more fully described in Kirkland's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K filed on March 26, 2021 and subsequent reports. Forward-looking statements included in this release are made as of the date of this release. Any changes in assumptions or factors on which such statements are based could produce materially different results. Kirkland's disclaims any obligation to update any such factors or to publicly announce results of any revisions to any of the forward-looking statements contained herein to reflect future events or developments. Contact: Kirkland's Gateway Investor Relations              Nicole Strain Cody Slach and Cody Cree (615) 872-4800 (949) 574-3860   KIRKLAND'S, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME (In thousands, except per share data) 13-Week Period Ended October 30, October 31, 2021 2020 Net sales $ 143,630 $ 146,609 Cost of sales 93,817 93,738 Gross profit 49,813 52,871 Operating expenses: Compensation and benefits 19,549 21,343 Other operating expenses 19,145 16,682 Depreciation (exclusive of depreciation included in cost of sales) 1,655 1,613 Asset impairment 444 177 Total operating expenses 40,793 39,815 Operating income 9,020 13,056 Other (income) expense, net (9) 9 Income before income taxes 9,029 13,047 Income tax expense 1,800 691 Net income $ 7,229 $ 12,356 Earnings per share: Basic $ 0.54 $ 0.87 Diluted $ 0.51 $ 0.82 Weighted average shares outstanding: Basic 13,405 14,249 Diluted 14,268 15,075   KIRKLAND'S, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share data) 39-Week Period Ended October 30, October 31, 2021 2020 Net sales $ 381,989 $ 348,578 Cost of sales 252,223 249,751 Gross profit 129,766 98,827 Operating expenses: Compensation and benefits 60,326 60,157 Other operating expenses 52,491 44,843 Depreciation (exclusive of depreciation included in cost of sales).....»»

Category: earningsSource: benzingaDec 2nd, 2021

Futures Rebound Fizzles On Slowing iPhone Demand, Omicron Fears

Futures Rebound Fizzles On Slowing iPhone Demand, Omicron Fears U.S. index futures regained some ground alongside Asian markets while European stocks slumped to session lows in a delayed response to yesterday's late Omicron-driven US selloff, as markets remained volatile following the biggest two-day plunge in more than a year, spurred by concern about the omicron coronavirus variant and Federal Reserve tightening. Investors await data for unemployment claims, as well as earnings from companies including Dollar General and Kroger. Tech is the weakest sector, dropping in sympathy after Apple warned its suppliers of slowing iPhone demand. Nasdaq futures pared earlier gains of up to 0.8% to trade down 0.1% while S&P futures are only 0.2% higher after rising as much as 0.9%. While the knee-jerk reaction of stock investors may “continue to be to take profits before the end of the year,” there is “plenty of liquidity available to drive stock prices higher as dip-buyers enter the market,” Ed Yardeni wrote in a note. The U.S. economy grew at a modest to moderate pace through mid-November, while price hikes were widespread amid supply-chain disruptions and labor shortages, the Federal Reserve said in its Beige Book survey Tuesday. Cruise-ship operator Carnival jumped 3.8% in premarket trading, while Pfizer and Moderna fell as the World Health Organization said that existing vaccines will likely protect against severe cases of the variant. Boeing contracts gained 3.4% after a report that the flagship 737 Max aircraft has regained airworthiness approval in China. With lots of uncertainty surrounding the pandemic and Fed policy, the size of potential market swings is still considerable.  Here are some other notable premarket movers today: Apple (AAPL US) shares fell 1.8% in premarket trading after the iPhone maker was said to tell suppliers that demand for its flagship product has slowed. Wall Street analysts, however, remained bullish. U.S. stocks tied to former President Donald Trump rise in premarket trading following a report his media group is in talks to raise new financing. Digital World Acquisition (DWAC US) +24%, Phunware (PHUN US) +38%. Katapult (KPLT US) shares sink 14% in premarket after the financial technology firm said its gross originations over a two-month period were lower than 2020 levels. Vir (VIR US) shares jump 8.1% in premarket trading after its Covid-19 antibody treatment, co-developed with Glaxo, looked to be effective against the new omicron variant in early testing. Snowflake (SNOW US) is up 17% premarket following quarterly results that impressed analysts, though some raise questions over the data software company’s valuation. CrowdStrike (CRWD US) shares jumped 5.1% in premarket after it boosted its revenue forecast for the full year. Square’s (SQ US) shares are 0.4% higher premarket. Corporate name change to Block Inc. indicates “a symbolic rebirth,” according to Barclays as it shows a broader set of possibilities than those of a pure payments company. Okta’s (OKTA US) shares advanced in postmarket trading. 3Q results show the cybersecurity company is well- positioned to deliver growth, even if some analysts say its guidance looks conservative and that its growth was not as strong as in prior quarters. The Omicron variant also hurt risk appetite, making the safe-haven bonds more attractive to investors, pushing yields down - although yields picked up again in early European trading. Volatility in equity markets as measured by the Vix hit its highest since February on Wednesday, before easing on Thursday, but remained well above this year’s average and almost twice as high as a month ago. Investors are braced for volatility to continue through December, stirred by tightening central-bank policies to fight inflation just as the omicron variant complicates the outlook for the pandemic recovery. The recent market turmoil may offer investors a chance to position for a trend reversal in reopening and commodity trades, according to JPMorgan Chase & Co. "Investors will need to maintain their calm during a period of uncertainty until the scientific data give a clearer picture of which scenario we face," said Mark Haefele, chief investment officer at UBS Global Wealth Management in Zurich. “This, in turn, will help shape the reaction of central bankers." Also weighing on stock markets, and flattening the U.S. yield curve, were remarks by Federal Reserve Chair Jerome Powell, who said that he would consider a faster end to the Fed's bond-buying programme, which could open the door to earlier interest rate hikes. In his second day of testimony in Congress on Wednesday, Powell reiterated that the U.S. central bank needs to be ready to respond to the possibility that inflation does not recede in the second half of next year. read more "In this past what we’ve seen is central banks using COVID as an excuse to remain dovish, and what we're seeing is central banks turn hawkish despite rising concerns around COVID, so it is a bit of a shift in communication," said Mohammed Kazmi, portfolio manager at UBP.  That said, the market is now so oversold, this is where we usually see aggressive dip-buying. In Europe, tech companies were the worst performers after Apple warned its component suppliers of slowing demand for its iPhone 13, the news dragged index heavyweight ASML Holding NV more than 4%. Meanwhile, travel shares were among the worst performers as the omicron variant continued to pop upin countries around the world, including the U.S., Norway, Ireland and South Korea. The Euro Stoxx 50 dropped as much as 1.7% while the Stoxx 600 Index fell 1.5%, extending declines to trade at a session low, with all sectors in the red and led lower by technology and travel stocks. The Stoxx 600 Technology Index slumped as much as 3.9%, the most in two months. Vifor Pharma surged by a record 18% following a report that Australia’s CSL is in advanced talks to acquire Swiss drugmaker. Here are some of the biggest European movers today: Vifor Pharma shares rise as much as 18% on a report that Australia’s CSL is in advanced talks to acquire the Swiss-based drug maker and developer while working with BofA on a A$4 billion funding package. Argenx jumps as much as 9.5% after Kepler Cheuvreux upgrades the stock to buy, saying the biotech company is on the brink of launching its first commercial product. Duerr gains as much as 7.2%, most since Aug. 10, after Deutsche Bank upgrades to buy and sets aa Street-high PT of EU60 for the German engineering company, citing the digitalization of the industry. Daily Mail & General Trust rises as much as 3.9% after Rothermere Continuation raised its bid for all DMGT’s Class A shares by 5.9% to 270p a share in cash. Klarabo surges as much as 54% as shares start trading on Nasdaq Stockholm after the Swedish property company raised SEK750m in an IPO. Eurofins Scientific declines for a fourth session, falling as much as 3.2%, as Goldman Sachs downgrades the company to neutral from buy “following strong outperformance YTD.” Deliveroo drops as much as 6.4% after an offering of 17.6m shares by CEO Will Shu and CFO Adam Miller at a price of 278p a share, representing a 4.2% discount to the last close. M&S falls as much as 3.4% after UBS cut its rating to neutral from buy, citing limited upside to its new price target as well as “little room for meaningful upgrades.” Earlier in the session, Asian stocks erased an earlier loss to trade slightly up, as traders continued to assess the potential impact of the omicron virus strain and the Federal Reserve’s efforts to keep inflation in check.  The MSCI Asia Pacific Index rose 0.2% after falling 0.4% in the morning. South Korea led regional gains, helped by large-cap chipmakers, while Japan was among the worst performers after the government dropped a plan for a blanket halt to all new incoming flight reservations. Asia’s equity benchmark is still down about 4% so far this year after rebounding in the past two sessions from a one-year low reached earlier this week. Despite the region’s underperformance against the U.S. and Europe, cheap valuations and foreign-investor positioning have prompted brokerages including Credit Suisse Group AG and Nomura Securities Co. Ltd. to turn bullish on Asia’s prospects next year. “Equity markets continue to play omicron tennis and traders looking for short-term direction should just wait for the next virus headline and then act accordingly,” said Jeffrey Halley, a senior market analyst at Oanda Corp. “Volatility, and not market direction, will be the winner this week.” Chinese technology shares including Alibaba Group Holding slid after Beijing was said to be planning to close a loophole used by the sector to go public abroad, fueling concern over existing overseas listings. Japanese equities declined, following U.S. peers lower after the first American case of the omicron coronavirus variant was confirmed. Electronics makers and telecoms were the biggest drags on the Topix, which fell 0.5%. SoftBank Group and TDK were the largest contributors to a 0.7% loss in the Nikkei 225.  The S&P 500 posted its worst two-day selloff since October 2020 after the first U.S. case of the new strain was reported. Federal Reserve Chair Jerome Powell reiterated that officials should consider a quicker reduction of monetary stimulus amid elevated inflation. “Truth is, there’s probably a lot of people who are wanting to buy stocks at some point,” said Naoki Fujiwara, chief fund manager at Shinkin Asset Management. “But, with omicron still an unknown, people are responding sensitively to news development, and that’s keeping them from buying.” India’s benchmark equity index climbed for a second day, led by software exporters, on an improving economic outlook and as investors grabbed some beaten-down stocks after recent declines. The S&P BSE Sensex Index rose 1.4% to close at 58,461.29 in Mumbai, the biggest advance since Nov. 1. Its two-day gains increased to 2.5%, the most since Aug. 31. The NSE Nifty 50 Index also surged by a similar magnitude. All of the 19 sector sub-indexes compiled by BSE Ltd. were up, led by a gauge of utilities companies. “India underperformed the global markets in recent weeks. Investors are now going for value buying in stocks at lower levels,” said A. K. Prabhakar, head of research at IDBI Capital Market Services. The Sensex gained in three of the past four sessions after plunging 2.9% on Friday, the biggest drop since April. The rally, however, is in contrast to most global peers which are witnessing volatility on worries over the spread of the omicron variant. High frequency indicators in India, such as tax collection and manufacturing activities, have shown robust growth in recent months, while the country’s economy expanded 8.4% in the quarter ended in September, according to an official data release on Tuesday. Mortgage lender HDFC contributed the most to the Sensex’s gain, increasing 3.9%. Out of 30 shares in the index, 27 rose and three fell. In rates, trading has been relatively quiet as bunds and gilts bull steepen a touch with risk offered, while cash TSYs bear flatten, cheapening ~5bps across the curve.Treasuries retraced part of yesterday’s rally that sent the benchmark 30-year rate to the lowest since early January. A large buyer of 5-year U.S. Treasury options targets the yield dropping around 17bps. 5s10s, 5s30s spreads flattened by ~1bp and ~2bp to multimonth lows; 10-year yields around 1.43%, cheaper by more than 3bp on the day while bunds and gilt yields are richer by ~1bp. Front-end and belly of the curve underperform vs long-end, while bunds and gilts outperform Treasuries. With little economic data slated, speeches by several Fed officials are main focal points. Peripheral spreads tighten with 10y Spain outperforming after well received auctions, albeit with a small size on offer. U.S. economic data slate includes November Challenger job cuts (7:30am) and initial jobless claims (8:30am) In FX, the Bloomberg Dollar Spot Index fell to a day low in the European session and the greenback traded mixed versus its Group-of-10 peers as most crosses consolidated in recent ranges. Two-week implied volatility in the major currencies trades in the green Thursday as it now captures the next policy decisions by the world’s major central banks. Euro- dollar on the tenor rises by as much as 138 basis points to touch 8.22%, highest in a year; the relative premium, however, remains below parity as realized has risen to levels unseen since August 2020. The pound rose along with some other risk- sensitive currencies following the British currency’s three-day slump against the dollar. Long-end gilts underperformed, leading to some steepening of the curve. The yen fell for the first day in three while the Swiss franc fell a second day. The Hungarian forint rose to almost a three-week high after the central bank in Budapest raised the one-week deposit rate by 20 basis points to 3.10%. Economists in a Bloomberg survey were evenly split in predicting a 10 or 20 basis point increase. The Turkish lira resumed its slump after President Recep Tayyip Erdogan abruptly replaced his finance minister amid deepening rifts in the administration over aggressive interest-rate cuts that have undermined the currency and fueled inflation. Poland’s central bank Governor Adam Glapinski sent the zloty to a three-week high against the euro on Thursday with his changed rhetoric on inflation, which he no longer sees as transitory after prices surged at the fastest pace in more than two decades. Currency market volatility also rose, with euro-dollar one-month volatility gauges below Monday's one-year peak but still at elevate levels . "Liquidity in some areas of the market is still quite poor as people grapple with this news and as we head towards year-end, a lot of it is really liquidity driven, which is leading to some volatility," said UBP's Kazmi. "Even in the most liquid market of the U.S. treasury market we've seen some fairly large moves on very little newsflow at times." In commodities, crude futures extend Asia’s gains. WTI adds 2.2% near $67, Brent near $70.50 ahead of today’s OPEC+ meeting. Spot gold finds support near Tuesday’s, recovering somewhat to trade near $1,774/oz. Base metals are mixed: LME aluminum drops as much as 1.1%, nickel, zinc and tin hold in the green Looking at the day ahead now, and central bank speakers include the Fed’s Quarles, Bostic, Daly and Barkin, as well as the ECB’s Panetta. Data releases include the Euro Area unemployment rate and PPI inflation for October, while there’s also the weekly initial jobless claims. Lastly, the OPEC+ group will be meeting. Market Snapshot S&P 500 futures up 0.7% to 4,540.25 STOXX Europe 600 down 1.0% to 466.37 MXAP up 0.2% to 192.07 MXAPJ up 0.7% to 629.36 Nikkei down 0.7% to 27,753.37 Topix down 0.5% to 1,926.37 Hang Seng Index up 0.5% to 23,788.93 Shanghai Composite little changed at 3,573.84 Sensex up 1.3% to 58,436.52 Australia S&P/ASX 200 down 0.1% to 7,225.18 Kospi up 1.6% to 2,945.27 Brent Futures up 2.4% to $70.53/bbl Gold spot down 0.6% to $1,771.73 U.S. Dollar Index little changed at 96.03 German 10Y yield little changed at -0.35% Euro little changed at $1.1320 Top Overnight News from Bloomberg Federal Reserve Bank of Cleveland President Loretta Mester said she’s “very open” to scaling back the Fed’s asset purchases at a faster pace so it can raise interest rates a couple of times next year if needed A United Nations gauge of global food prices rose 1.2% last month, threatening to make it more expensive for households to put a meal on the table. It’s more evidence of inflation soaring in the world’s largest economies and may make it even harder for the poorest nations to import food, worsening a hunger crisis Germany is poised to clamp down on people who aren’t vaccinated against Covid-19 and drastically curtail social contacts to ease pressure on increasingly stretched hospitals Some investors buffeted by concerns about tighter monetary policy are turning their sights to China’s battered junk bonds, given they offer some of the biggest yield buffers anywhere in global credit markets Pfizer Inc. says data on how well its Covid-19 vaccine protects against the omicron variant should be available within two to three weeks, an executive said GlaxoSmithKline Plc said its Covid-19 antibody treatment looks to be effective against the new omicron variant in early testing A more detailed look at global markets courtesy of Newsquawk Asian equity markets traded tentatively following the declines on Wall St where all major indices extended on losses and selling was exacerbated on confirmation of the first Omicron case in the US, while the Asia-Pac region also contended with its own pandemic concerns. ASX 200 (-0.2%) was subdued amid heavy losses in the tech sector and with a surge of infections in Victoria state, although downside in the index was cushioned amid inline Retail Sales and Trade Balance, as well as M&A optimism after Woolworths made a non-binding indicative proposal for Australian Pharmaceutical Industries. Nikkei 225 (-0.7%) weakened after the government instructed airlines to halt inbound flight bookings for a month due to fears of the new variant and with auto names also pressured by declines in monthly sales amid the chip supply crunch. KOSPI (+1.6%) showed resilience amid expectations for lawmakers to pass a record budget today and recouped opening losses despite the record increase in daily infections and confirmation of its first Omicron cases, while the index also shrugged off the highest CPI reading in a decade which effectively supports the case for further rate increases by the BoK. Hang Seng (+0.6%) and Shanghai Comp. (-0.1%) were choppy following another liquidity drain by the PBoC and with tech pressured in Hong Kong as Alibaba shares extended on declines after recently slipping to a 4-year low in its US listing. Beijing regulatory tightening also provided a headwind as initial reports suggested China is to crack down on loopholes used by tech firms for foreign IPOs, although this was later refuted by China, and the CBIRC is planning stricter regulations on major shareholders of banks and insurance companies, as well as confirmed it will better regulate connected transactions of banks. Finally, 10yr JGBs were higher as prices tracked gains in global counterparts and amid the risk aversion in Japan, although prices are off intraday highs after hitting resistance during a brief incursion to the 152.00 level and despite the marginally improved metrics from 10yr JGB auction. Top Asian News Asia Stocks Swing as Investors Weigh Omicron Impact, Fed Views Apple Tells Suppliers IPhone Demand Slowing as Holidays Near Moody’s Cuts China Property Sales View on Financing Difficulties Faith in Singapore Leaders Hit by Record Covid Wave, Poll Shows Bourses across Europe have held onto losses seen at the cash open (Euro Stoxx 50 -1.4%; Stoxx -1.2%), as the region plays catchup to the downside seen on Wall Street – seemingly sparked by a concoction of hawkish Fed rhetoric and the discovery of the Omicron variant in the US. Nonetheless, US equity futures are firmer across the board but to varying degrees – with the cyclical RTY (+1.1%) and the NQ (+0.3%) the current laggard. European futures ahead of the cash open saw some mild fleeting impetus on reports GlaxoSmithKline's (-0.3%) COVID treatment Sotrovimab retains its activity against Omicron variant, and the UK MHRA simultaneously approved the use of Sotrovimab – but caveated that it is too early to know whether Omicron has any impact on effectiveness. Conversely, brief risk-off crept into the market following commentary from a South African Scientist who warned the country is seeing an exponential rise in new COVID cases with a predominance of Omicron variant across the country – with the variant causing the fastest ever community transmission - but expects fewer active cases and hospitalisations this wave. Back to Europe, Euro indices see broad-based losses whilst the downside in the FTSE 100 (-0.7%) is less severe amid support from its heavyweight Oil & Gas sector – the outperforming sector in the region. Delving deeper, sectors see no overarching theme nor bias – Food & Beverages, Autos and Banks are towards the top of the bunch, whilst Tech, Telecoms, and Travel &Leisure. Tech is predominantly weighed on by reports that Apple (-2% pre-market) reportedly told iPhone component suppliers that demand slowed down. As such ASML (-5.0%), STMicroelectronics (-4.4%) and Infineon (-3.6%) reside among the biggest losers in the Stoxx 600. Deliveroo (-5.3%) is softer following an offering of almost 18mln at a discount to yesterday's close. In terms of market commentary, Morgan Stanley believes that inflation will remain high over the next few months, in turn supporting commodities, financials and some cyclical sectors. The bank identifies beneficiaries including EDF (-1.5%), Engie (-1.2%), SSE (-0.2%), Legrand (-1.3%), Tesco (-0.5%), BT (-0.8%), Michelin (-1.6%) and Sika (-0.9%). Top European News Shell Kicks Off First Wave of Buybacks From Permian Sale Omicron Threatens to Prolong Pain in Bid to Vaccinate the World Apple, Suppliers Drop Premarket After Report Demand Slowed Valeo, Gestamp Gain After Barclays Raises to Overweight In FX, currency markets are still in a state of flux, or limbo bar a few exceptions, and the Greenback is gyrating against major peers awaiting the next major event that could provide clearer direction and a more decisive range break. Thursday’s agenda offers some scope on that front via US initial jobless claims and a host of Fed speakers, but in truth NFP tomorrow is probably more likely to be influential even though chair Powell has effectively given the green light to fast-track tapering from December. In the interim, the index continues to keep a relatively short leash around 96.000, and is holding within 96.138-95.895 confines so far today. JPY/CHF - Although risk considerations look supportive for the Yen, on paper, UST-JGB/Fed-BoJ differentials coupled with technical impulses are keeping Usd/Jpy buoyant on the 113.00 handle, with additional demand said to have come from Japanese exporters overnight. However, the headline pair may run into offers/resistance circa 113.50 and any breach could be capped by decent option expiry interest spanning 113.60-75 (1.5 bn). Similarly, the Franc has slipped back below 0.9200 on yield and Swiss/US Central Bank policy stances plus near term outlooks, and hardly helped by a slowdown in retail sales. GBP/CAD/NZD - All firmer vs their US counterpart, though again well within recent admittedly wide ranges, and the Pound perhaps more attuned to Eur/Gbp fluctuations as the cross retreats to retest 0.8500 and Cable rebounds to have another look at 1.3300 where a fairly big option expiry resides (850 mn). Indeed, Sterling has largely shrugged off the latest BoE Monthly Decision Maker Panel release that in truth did not deliver any clues on what is set to be another knife-edge MPC gathering in December. Elsewhere, the Loonie is straddling 1.2800 with eyes on WTI crude ahead of Canadian jobs data on Friday and the Kiwi is hovering above 0.6800 after weaker NZ Q3 terms of trade were offset to some extent by favourable Aud/Nzd headwinds. AUD/EUR - Both narrowly mixed against US Dollar, with the Aussie pivoting 0.7100 in wake of roughly in line trade and retail sales data overnight, but wary about the latest virus outbreak in the state of Victoria, while the Euro is sitting somewhat uncomfortably on the 1.1300 handle amidst softer EGB yields and heightened uncertainty about what the ECB might or might not do in December on the QE guidance front. In commodities, WTI and Brent front-month futures are firmer intraday as traders gear up for the JMMC and OPEC+ confabs at 12:00GMT and 13:00GMT, respectively. The jury is still split on what the final decision could be, but the case for OPEC+ to pause the planned monthly relaxation of output curbs by 400k BPD has been strengthening against the backdrop of Omicron coupled with the coordinated SPR releases (an updating Rolling Headline is available on the Newsquawk headline feed). As expected, OPEC sources have been testing the waters in the run-up, whilst yesterday's JTC/OPEC meetings largely surrounded the successor to the Secretary-General position. Oil market price action will likely be centred around OPEC+ today in the absence of any macro shocks. WTI Jan resides around USD 66.50/bbl (vs low USD 65.41/bbl) whilst Brent Feb briefly topped USD 70/bbl (vs low USD 68.73/bbl). Elsewhere, spot gold has eased further from the USD 1,800/oz after failing to sustain a break above the 50, 100 and 200 DMAs which have all converged to USD 1,791/oz today. LME copper is on the backfoot amid the cautious risk sentiment, with the red metal back under USD 9,500/t but off overnight lows. US Event Calendar 7:30am: Nov. Challenger Job Cuts -77.0% YoY, prior -71.7% 8:30am: Nov. Initial Jobless Claims, est. 240,000, prior 199,000; 8:30am: Nov. Continuing Claims, est. 2m, prior 2.05m 9:45am: Nov. Langer Consumer Comfort, prior 52.2 DB's Jim Reid concludes the overnight wrap With investors remaining on tenterhooks to find out some definitive information on the Omicron variant, yesterday saw markets continue to see-saw for a 4th day running. Following one of the biggest sell-offs of the year on Friday, we then had a partial bounceback on Monday, another bout of fears on Tuesday (not helped by the prospect of faster tapering), and yesterday saw another rally back before risk sentiment turned sharply later in the day as an initial case of the Omicron variant was discovered in the US. You can get some idea of this by the fact that Europe’s STOXX 600 (+1.71%) posted its best daily performance since May, whereas the S&P 500 moved from an intraday high where it had been up +1.88%, before shedding all those gains and more to close -1.18% lower. In fact, that decline means the S&P has now lost over -3% in the last two sessions, marking its worst 2-day performance in over a year, and this heightened volatility saw the VIX index close back above 30 for the first time since early February. In terms of developments about Omicron, we’re still in a waiting game for some concrete stats, but there was positive news early on from the World Health Organization’s chief scientist, who said that they think vaccines “will still protect against severe disease as they have against the other variants”. On the other hand, there was further negative news out of South Africa, as the country reported 8,561 infections over the previous day, with a positivity rate of 16.5%. That’s up from 4,373 cases the day before, and 2,273 the day before that, so all eyes will be on whether this trend continues, and also on what that means for hospitalisation and death rates over the days ahead. Against this backdrop, calls for fresh restrictions mounted across a range of countries, particularly on the travel side. In the US, it’s been reported already by the Washington Post that President Biden could today announce stricter testing requirements for arriving travellers. Meanwhile, France is moving to require non-EU arrivals to show a negative test before arrival, irrespective of their vaccination status. The EU Commission further said that member states should conduct daily reviews of essential travel restrictions, and Commission President von der Leyen also said that the EU should discuss the topic of mandatory vaccinations. There was also a Bloomberg report that German Chancellor Merkel would recommend mandatory vaccinations from February 2022, according to a Chancellery paper that they’d obtained. That came as Slovakia sought to incentivise vaccination uptake among older citizens, with the cabinet backing a €500 hospitality voucher for residents over 60 who’ve been vaccinated. As on Tuesday, the other main headlines yesterday were provided by Fed Chair Powell, who re-emphasised his more hawkish rhetoric around inflation before the House Financial Services Committee. Notably he said that “We’ve seen inflation be more persistent. We’ve seen the factors that are causing higher inflation to be more persistent”, though yields on 2yr Treasuries (-1.4bps) already had the shift in stance priced in. New York Fed President Williams echoed that view in an interview, noting it would be germane to discuss and decide whether it was appropriate to accelerate the pace of tapering at the December FOMC. 10yr yields (-4.1bps) continued their decline, predominantly driven by the turn in sentiment following the negative Omicron headlines. That latest round of curve flattening left the 2s10s slope at its flattest level since early January around the time of the Georgia Senate race that ushered in the prospect of much larger fiscal stimulus. In terms of markets elsewhere, strong data releases helped to support risk appetite earlier in yesterday’s session, with investors also looking forward to tomorrow’s US jobs report for November that will be an important one ahead of the Fed’s decision in less than a couple of weeks’ time. The ISM manufacturing release for November saw the headline number come in roughly as expected at 61.1 (vs. 61.2 expected), and also included a rise in both the new orders (61.5) and the employment (53.3) components relative to last month. Separately, the ADP’s report of private payrolls for November likewise came in around expectations, with a +534k gain (vs. +526k expected). Staying on the US, one thing to keep an eye out over the next 24 hours will be any news on a government shutdown, with funding currently set to run out by the weekend as it stands. The headlines yesterday weren’t promising for those hoping for an uneventful, tidy resolution, as Politico indicated that some Congressional Republicans would not agree to an expedited process to fund the government should certain vaccine mandates remain in place. An expedited process is necessary to avoid a government shutdown at the end of the week, so one to watch. After the incredibly divergent equity performances in the US and Europe, we’ve seen a much more mixed performance in Asia overnight, with the KOSPI (+1.09%), Hang Seng (+0.23%), and CSI (+0.23%) all advancing, whereas the Shanghai Composite (-0.05%) and the Nikkei (-0.60%) are trading lower. In terms of the latest on Omicron, authorities in South Korea confirmed five cases, which came as the country also reported that CPI in November rose to its fastest since December 2011, at +3.7% (vs +3.1% expected). Separately in China, 53 local Covid-19 cases were reported in Inner Mongolia, whilst Harbin province reported 3 local cases. Looking forward, futures are indicating a positive start in the US with those on the S&P 500 (+0.64%) pointing higher. Back in Europe, sovereign bonds lost ground yesterday, and yields on 10yr bunds (+0.5bps), OATs (+1.1bps) and BTPs (+4.2bps) continued to move higher. Interestingly, there was a continued widening in peripheral spreads, with the gap between both Italian and Spanish 10yr yields over bunds reaching their biggest level in over a year, at 135bps and 77bps, respectively. Another factor to keep an eye on in Europe is another round of increases in natural gas prices, with futures up +3.42% to their highest level since mid-October yesterday. Lastly on the data front, the main other story was the release of the manufacturing PMIs from around the world. We’d already had the flash readings from a number of the key economies, so they weren’t too surprising, but the Euro Area came in at 58.4 (vs. flash 58.6), Germany came in at 57.4 (vs. flash 57.6), and the UK came in at 58.1 (vs. flash 58.2). One country that saw a decent upward revision was France, with the final number at 55.9 (vs. flash 54.6), which marks an end to 5 successive monthly declines in the French manufacturing PMI. One other release were German retail sales for October, which unexpectedly fell -0.3% (vs. +0.9% expected). To the day ahead now, and central bank speakers include the Fed’s Quarles, Bostic, Daly and Barkin, as well as the ECB’s Panetta. Data releases include the Euro Area unemployment rate and PPI inflation for October, while there’s also the weekly initial jobless claims. Lastly, the OPEC+ group will be meeting. Tyler Durden Thu, 12/02/2021 - 07:57.....»»

Category: dealsSource: nytDec 2nd, 2021

Online mortgage startup Better reportedly laid off 9% of its staff — about 900 employees — as its plan to go public looms

Two months ago, Better was named America's top startup. CEO Vishal Garg has hired 7,000 people ahead of going public with a $6.9 billion valuation. Better CEO Vishal Garg.Better Mortgage startup Better is laying off 9% of its staff, or about 900 people, TechCrunch reported. The company recently hired 7,000 people and is set to go public with a $6.9 billion valuation. The firm also got a $750 million cash infusion from its backers, which include SoftBank. Online mortgage startup Better is laying off 9% of its staff, or about 900 people, TechCrunch reported Wednesday.The firm hired 7,000 people ahead of an imminent SPAC merger with blank-check company Aurora Acquisition Corp to go public that puts the value of the company at $6.9 billion.This week, the New York-based company, which LinkedIn named the best startup in America in both 2020 and 2021,  got a $750 million cash infusion from its backers, which include Aurora and SoftBank. Citing anonymous sources, TechCrunch said one reason for the layoffs is that rising mortgage rates are expected to result in a contraction of the mortgage market. In addition, it reported, Better's emphasis on automating loans might mean less need for manual labor.The company, which declined to comment to TechCrunch, sent a statement from CFO Kevin Ryan: "A fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market."Better didn't immediately respond to a request for comment.Do you work at Better? Do you have a story to share about working there or insight into its layoffs? Contact reporter Alex Nicoll via encrypted messaging app Signal at +1 (646) 768-4772 using a non-work phone, email at, or Twitter DM at @AlexONicoll.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 1st, 2021

South Africa Sees Cases Double As White House Extends Federal Mask Mandate

South Africa Sees Cases Double As White House Extends Federal Mask Mandate Update (1800ET): Now that the first case of the omicron variant has been confirmed in the US (even though Dr. Anthony Fauci insists that all of the case's close contacts have been identified and tested, and that there's no sign of additional cases - at least not right now), the Biden Administration has decided to extend a federal mask mandate through mid-March. The mandate requires travelers to wear masks on airplanes, trains and buses, and at airports and train stations. President Biden is expected to share his plans for imposing tighter travel restrictions on foreigners on Thursday. The CDC is reportedly already collecting names to give to local authorities so that their viral status can presumably be tracked. * * * As European countries from Germany, to Austria to the Netherlands tighten lockdown measures amid a surge in COVID cases (while deaths remain slightly elevated but more subdued), the continent's unelected bureaucrat in chief, European Commission President Ursula von der Leyen, asked during a speech on Wednesday that EU members consider adopting a vaccine mandate. All members should "think about" imposing mandates of their own in a coordinated fashion that's in keeping with the Continent's new approach. Source: Reuters Speaking during a news conference, the European Commission chief suggested that member states need mandates to help prevent the spread of cases and a further spike in infections due to the emergence of new variants, such as the omicron strain. "I think it is understandable and appropriate to lead this discussion now, how we can encourage and potentially think about mandatory vaccination within the European Union," von der Leyen stated, adding that fighting the pandemic requires a "common approach" across the bloc. Meanwhile, a former president of EU member Ireland published an editorial in Politico Europe Wednesday slamming the WTO's refusal to approve sharing of intellectual property that would allow emerging countries to produce their own vaccines. Epidemiologists warned us time and again that allowing the virus to spread around the world is a recipe for new mutations to develop and that they will indiscriminately harm us all. This waiver, which has now dominated WTO talks for over a year, is a necessary global solution to end the pandemic. Yet one powerful voice at the WTO has continued to undermine this effort — and that must change. Isn't it interesting how world leaders talk about vaccine mandates, while simultaneously ensuring that emerging countries will need to purchase their jabs from American pharmaceutical giants? But let's put a pin in that. South Africa has seen the number of new COVID cases doubled between Wednesday and Tuesday, according to official data released by the same people who issued the first warnings about the omicron variant. What's more, a top South African health official said the omicron variant would likely still be susceptible to the T-cell response caused by both natural and vaccine-induced causes. But that hasn't stopped the country from seeing a surge in infections and reinfections, which has been particularly notable among the older population, officials said. Back in Europe, outgoing Chancellor Angela Merkel has proposed new nationwide restrictions on people who haven't been vaccinated. Coincidentally, the WHO said earlier that indications are that most omicron cases will be mild, not severe. Of course, that's true of delta and all the other strains as well. The organization later said that the world is still "in the midst" of the pandemic. But the point is - as even some of South Africa's top virology experts discussed earlier this week and over the weekend - that even if omicron does break through natural and vaccine-induced protections, infections will likely be mild in nearly all of these patients, and the body's T-cell response will leave most people protected. Confirmed cases of the omicron variant remained fewer than 300 (closer to 250 still by midday) while omicron cases were confirmed for the first time in South Korea (which has already imposed travel restrictions on southern African states), Saudi Arabia and Norway. More cases were found in new locations in the UK, Switzerland, Nigeria, Brazil and elsewhere. No cases have been confirmed in the US, but several have been identified in Canada. Source: Bloomberg Here are some other important stories regarding COVID and the omicron variant: Poland reported 29K new COVID cases, the highest in almost eight months, and 570 fatalities, on Wednesday. More alarming: the Health Ministry said 25% of the deaths were among vaccinated patients, mostly elderly people with comorbidities. Prime Minister Mateusz Morawiecki called on the nation to get boosters ahead of Christmas. The country has imposed new restrictions on travelers but hasn't confirmed a single case of omicron. WHO members voted to start drafting an international agreement to help avoid future pandemics as more cases amid the spread of the omicron variant. The WHO’s members approved a proposal Wednesday that set a deadline of 2024 to try to implement such a measure. They didn’t resolve the biggest disagreement, however: whether the accord should be a legally binding treaty. OECD chief economist Laurence Boone says it would cost $50 billion to vaccinate the world, a sum that pales in comparison to the $10 trillion G-20 countries have spent mitigating the impact of the pandemic. Too bad the US-controlled WTO won't share the recipe with the emerging world. The EU is preparing to recommend that member states review their travel rules daily. They should pursue a "coordinated approach" and be prepared to impose new controls if necessary. Finally, Israel’s coronavirus czar Salman Zarka said the country should look at mandatory vaccination now that the omicron variant has emerged. "Mandatory vaccination needs to be considered, whether through legislation or otherwise, especially given the fact that not only is the pandemic here, but I fear it will get worse," Zarka said on 103FM radio. He said he changed his mind following the appearance of omicron, which has been identified in several Israelis. The US is preparing to impose new travel restrictions while the CDC plans to tighten COVID screening and testing at airports around the country by requiring international travelers to have a negative COVID test result from the past 24 hours. WHO adds that vaccine makers shouldn't rush to rework their vaccines because they're not sure whether new vaccines are necessary. Austrian lawmakers extended a nationwide lockdown for a second 10-day period to suppress the latest wave of coronavirus infections before the Christmas holiday period. Nigeria, meanwhile, has detected a case of omicron from October, the latest piece of evidence to suggest that the variant has likely already spread around the world. The Netherlands says it has found a case of omicron from two weeks ago. Before this, the earliest known sample of the variant was collected on Nov. 9 in South Africa. Tyler Durden Wed, 12/01/2021 - 18:25.....»»

Category: dealsSource: nytDec 1st, 2021

The pistol police said the Oxford high school shooting suspect used was one of nearly 700,000 firearms that Americans bought or tried to buy during Black Friday sales

The FBI conducted 687,788 background checks related to firearm purchases during the week leading up to and including Black Friday. Gun sales on Black Friday 2021 soared, ranking among the top ten highest days for gun-related background checks.Keith Srakocic/AP The FBI conducted 687,788 background checks related to firearm purchases during the week leading up to Black Friday. The bureau processed 187,585 background checks on Black Friday alone, topping the 2020 gun sales record.  Police in Oxford, Michigan said the firearm used in Tuesday's deadly high school shooting was a pistol purchased on Black Friday. As more news emerges about the Oxford High School shooting in Michigan, police have said that the suspect used a pistol purchased on Black Friday by his father. The firearm is one of the hundreds of thousands that were either purchased or Americans attempted to buy on the sales holiday.According to data by the Federal Bureau of Investigation, Black Friday was one of the most productive days in gun sales to date. This year, the National Instant Criminal Background Check System (NICS) processed a total of 687,788 background checks in the days leading up to and including Black Friday, November 26, according to FBI data. On Black Friday alone, 187,585 background checks were made, a slight increase from 186,645 in 2020.The FBI uses the NICS to process background checks when people attempt to purchase a firearm or explosive. The agency is required by law to conduct background checks on prospective firearm buyers, and the data has historically been used to measure gun sales. As a result, Black Friday 2021 now ranks among the top 10 highest days for NICS background checks dating back to 1998. A renewed debate over gun safety and policiesA researcher simulates a check done for the National Instant Criminal Background Check System for Black Friday in 2014.AP Photo/Matt StroudWhile school shootings in Michigan are rare, the Oxford high school shooting that left four students dead and several people injured has renewed debate over gun laws and safety in the state. The Giffords Law Center, which collects information about gun laws nationwide, ranked Michigan 20th in the nation for states with the strictest gun laws, the Washington Post reported. A lawyer for the center told the Post that Michigan's gun laws "could be a lot stronger." Democrats in Michigan have advocated for stronger legislation on gun control, but many of those bills have stalled in the Republican-led legislature. Michigan Gov. Gretchen Whitmer, a Democrat, on Tuesday called gun violence a "public health crisis," adding that "no one should be afraid to go to school."Meshawn Maddock, the Michigan Republican Party co-chair, tweeted Tuesday that many people "would give anything for a gun carrying teacher in Oxford today," adding, "I personally LIKE being around people with guns." Tuesday's high shooting marks the sixth mass shooting this year, according to the Mother Jones mass shooting database. There were only two mass shootings in 2020 amid a record number of gun violence deaths, as per the database. Gun control advocates nationwide have called for stricter background checks, among other initiatives, to reduce rates of gun violence. A 2018 study found that states with stricter background checks for weapon and ammunition purchases had fewer school shootings.However, support for stricter gun control has fallen, according to a recent Gallup poll. Only 52% of respondents said they wanted stricter gun laws, the lowest recording since 2014.It is not clear yet where the handgun — a 9mm Sig Sauer SP 2022 pistol — used by the 15-year-old shooting suspect had been purchased. The firearm was bought by the suspect's father just four days before the shooting, police said. Prosecutors said on Wednesday that they may charge the suspect's parents.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderDec 1st, 2021