Sam Altman admits OpenAI is "a little bit scared" of ChatGPT and says it will "eliminate" many jobs

While some business leaders are excited about AI's potential for good, others are skeptical, unimpressed, and even scared about what the tech can do. Insider compiled a list of 14 business leaders' thoughts on AI.Susan Walsh/AP; Mike Cohen/Getty Images for The New York Times Business leaders are taking notice of popular AI tools like ChatGPT.  Some say they are excited about what AI can do. Others are skeptical, unimpressed, and even scared. Insider compiled a list of 14 business leaders' thoughts on AI, from Bill Gates to Elon Musk.  Artificial intelligence tools have taken the world by storm — and business leaders are noticing. Since OpenAI's ChatGPT came out in November, the buzzy conversational chatbot has been used to generate real estate advice, provide tips on starting a business, and some workers utilize it to make their jobs easier. Business leaders' reactions to AI products like ChatGPT have been mixed. While figures like Bill Gates think that tools like ChatGPT can free up time in workers lives by making employees more efficient, others, like Elon Musk, believe that AI is "one of the biggest risks to the future of civilization."From feelings of excitement to doomsday visions, here is what 14 influential figures in business think about AI. Bill Gates - American business magnate and cofounder of MicrosoftBill Gates thinks AI has the power to change the world.Taylor Hill/Getty ImagesBill Gates thinks AI has the power to change the world. Gates said that AI is "every bit as important as the PC, as the internet," Forbes reported. AI will be the"biggest thing in this decade," Gates said on a podcast, admitting he didn't expect the tech to evolve so quickly in the last year. In fact, Gates said he is "excited" about ChatGPT and finds the chatbot "pretty fantastic" in its potential to teach math and offer medical advice to people with limited access to resources, per Forbes. He said he uses ChatGPT primarily "for serious purposes" though he admits to using it for "fun things" like writing poetry. Still, Gates said ChatGPT is "truly imperfect" and has seen it answer math questions "completely wrong." In terms of jobs, Gates said AI can "change our world" by making work more efficient, he told German newspaper Handelsblatt.When asked about his thoughts on the Big Tech race to build the best AI chatbot, Gates said he is "not sure" there will be a clear winner, per the podcast. Gates sees AI-integration into search engines as a "personal agent" that studies and understands its users' behavior, he said on the podcast, eliminating the need for separate tech services."A decade from now, we won't think of those businesses as separate, because the AI will know you so well that when you're buying gifts or planning trips, it won't care if Amazon has the best price, if someone else has a better price — you won't even need to think about it," Gates said. "So it's a pretty dramatic potential reshuffling of how tech markets look."Andy Jassy - Amazon CEOAndy Jassy said he is excited to see the possibilities of generative AI.Mike Blake/ReutersAmazon CEO Andy Jassy said he is excited to see "what's possible with generative AI"  amid the rise of tools like ChatGPT, according to an interview with the Financial Times.But Jassy thinks that this latest iteration of AI is nothing new. "Most large, deeply technical companies like ours, have been working on these very large, generative AI models themselves for a long time," Jassy said.  Sundar Pichai - CEO of Alphabet and GoogleSundar Pichai said AI "is the most profound technology" Google is developing.Brandon Wade/ReutersSundar Pichai told investors during Alphabet's most recent earnings call that AI "is the most profound technology" his company is developing.Pichai's comment came after Google's management reportedly issued a "code red" in response to the rise of ChatGPT. Google is working on an AI-powered chatbot it calls Bard. The company demoed the chatbot to the public for the first time in early February. It is currently being tested and will be released in the coming weeks, the company said.  Satya Nadella - CEO at MicrosoftSatya Nadella said he is cautiously optimistic about AI's future.Sean Gallup/Getty ImagesMicrosoft CEO Satya Nadella is cautiously optimistic about AI's future.In an interview with CBS Mornings, Nadella said that humans must be "unambiguously, unquestionably" in charge of powerful AI models to prevent them from going out of control. If that happens, Nadella said "runaway AI" could be "a real problem," one that can be addressed by making models safer and "more explainable" first. That way, humans know exactly how the tech will be used. Microsoft is making strides to build out its AI tech. Earlier this month, Microsoft launched the new Bing search engine equipped with a conversational chatbot available only to a limited number of users. Nadella told The Verge in an interview that he hopes the "new Bing" will make its competitor Google "come out and show that they can dance.""And I want people to know that we made them dance, and I think that'll be a great day," Nadella said. Elon Musk - CEO at Twitter and cofounder of OpenAIElon Musk said that AI is "one of the biggest risks to the future of civilization."Gilbert Carrasquillo/GC ImagesElon Musk, who cofounded ChatGPT maker OpenAI before leaving the company — said at a recent conference that AI is "one of the biggest risks to the future of civilization," CNBC reported.When asked about ChatGPT, Musk said that the tool is "both positive or negative" with "great promise" even if it comes with "great danger." Its impressive responses illustrate "just how advanced AI has become," he said. That is why Musk said AI regulation is necessary even if it "may slow down AI a little bit," which he thinks is good. "It is, I think, actually a bigger risk to society than cars or planes or medicine," he reportedly said during the World Government Summit in Dubai.In fact, Musk has repeatedly sounded the alarm over the potential threat of AI. In 2020, Musk insinuated that the Google-owned DeepMind project could take over the world. In 2018, he said AI may be more dangerous than nuclear weapons. A year before that, Musk emphasized the need for regulation as he claimed people "don't know how to react" to tech that he describes as "ethereal," science blog Futurism reported.Musk's current thoughts on AI came full circle starting in 2015, when Musk cofounded OpenAI with current CEO Sam Altman, saying at the time that AI was the "biggest existential threat" to humanity. Tim Cook - CEO at AppleTim Cook said AI is a "major focus" at Apple and has the potential to "enrich customers' lives."Jerod Harris/Getty Images EntertainmentThe AI revolution is here — and Apple CEO Tim Cook is watching. Cook told investors on an earnings call that AI is a "major focus" at Apple and that "it's incredible in terms of how it can enrich customers' lives." In fact, Cook said that AI will eventually be a major part of Apple's product line. "We see enormous potential in this space to affect virtually everything we do... It will affect every product and every service that we have," Cook said. Steve Wozniak - Cofounder of AppleSteve Wozniak said OpenAI's ChatGPT is "pretty impressive" and "useful to humans," but that users should be careful.Sean Gallup/Getty ImagesSteve Wozniak called OpenAI's ChatGPT "pretty impressive" and "useful to humans" during an interview with CNBC. But users should be careful, he said, as the chatbot can produce some major errors. "The trouble is it does good things for us, but it can make horrible mistakes by not knowing what humanness is," Wozniak told CNBC. In the interview, Wozniak compared the concerns around AI with fears around the tech used in self-driving cars, as AI can't yet replace human drivers."It's like you're driving a car, and you know what other cars might be about to do right now because you know humans," Wozniak said. Warren Buffet - American business magnate, investor, and philanthropistBillionaire investor Warren Buffet said AI could transform society years before ChatGPT came out.Alex Wong/Getty ImagesBillionaire investor Warren Buffet warned that AI tools have the power to disrupt society years before the release of ChatGPT.In 2017, the CEO of Berkshire Hathaway suggested in an annual company meeting that AI could replace jobs, CNBC first reported."I would certainly think it would result in significantly less employment in certain areas," he said. "But that's good for society," Buffet said, per CNBC. In an ideal world, Buffett believes that widespread automation could reduce the number of hours people work which would free up time for leisure. Companies could also hire less workers, he said. Despite AI's potential benefits, Buffet said the tech "can have huge problems, in terms of a democracy and how it reacts to that."In fact, Buffet shared similar thoughts in 2016. "I would think the biggest value will come when it actually replaces human labor," he said about AI during a 2016 CNBC interview.Charlie Munger - American billionaire investorLegendary billionaire investor Charlie Munger isn't that impressed by the current state of AI.AP Photo/Nati HarnikBillionaire investor Charlie Munger isn't that impressed by the current state of AI. "Artificial intelligence is very important, but there's also a lot of crazy hype on the subject," Munger said during a Daily Journal meeting that was broadcast live on CNBC."AI is not going to cure cancer, it's not going to do everything that we want done, and there's a lot of nonsense in it too," he continued. "So I regard it as a mixed blessing."Munger said AI can be used for tasks like insurance underwriting, but faces limitations that might not make it very helpful in the task of buying an office building, for example.Kevin O'Leary - "Shark Tank" investorTelevision personality and businessman Kevin O'Leary said he's using ChatGPT more than Google for online research.REUTERS/Gus Ruelas"Shark Tank" investor Kevin O'Leary told Insider he is starting to use ChatGPT for online research more than Google. Before ChatGPT was launched, O'Leary said he used Google every day. "Now I'm splitting my search to 50% Google and 50% ChatGPT," he said. In fact, O'Leary said he's discussing potentially taking a stake in OpenAI. Despite his preference for ChatGPT over Google, O'Leary is open to trying out new AI chatbots as they come out.O'Leary said he is interested in trying out the new Bing search engine once its officially launched, though he hasn't used Bing in years. Now that Google announced its plans to release its own chatbot Bard, it is only a matter of time before Google loses its grip on the internet, O'Leary said. "ChatGPT certainly is a threat to Google, and Google must know that," O'Leary said. "The AI search wars are on."    Gautam Adani: Businessman and the world's third-richest personThe world's third most richest man said he has "some addiction" to ChatGPT.Amit Dave/ReutersGautam Adani, the world's third-richest person with a net worth of $121 billion, according to Bloomberg's Billionaire Index, admits he might be using ChatGPT a little too much. "The recent release of ChatGPT (I must admit to some addiction since I started using it) is a transformational moment in the democratization of AI given its astounding capabilities as well as comical failures," Adani wrote in a LinkedIn post."But there can be no doubt that generative AI will have massive ramifications," Adani, who is known for starting India's energy and logistics powerhouse Adani Group, added. In fact, the disruptive nature of generative AI will only grow, Adani wrote. Adani said that generative AI "holds the same potential and dangers" as the advent of chips which he said has "paved the way for precision and guided weapons used in modern warfare." "And the race is already on, with China outnumbering the US in the number of most-cited scientific papers on AI," he said.John Carmack - Video game pioneer and former Meta executiveEx-Meta exec John Carmack said AI may be able to think and act like humans in a decade.GABRIELLE LURIE/Getty ImagesFormer Meta executive John Carmack said AI may be able to act and think like humans in just a decade, according to a Dallas Innovates interview. The virtual reality visionary said that artificial general intelligence —the ability for AI to perform complex tasks currently only achievable by humans — is AI's "big brass ring" that will grow into a trillion-dollar industry by the 2030s.In turn, artificial general intelligence will leave a positive impact on the world, he said. "The world is a hugely better place with our 8 billion people than it was when there were 50 million people," Carmack told Dallas Innovates. "So, I am confident that the sum total of value and progress in humanity will accelerate extraordinarily with welcoming artificial beings into our community."AI can't replicate human functions like consciousness at the moment. But with the rise of tools like ChatGPT, Carmack said that the world is making progress toward that goal. "I mean, forget human brains; we don't even have things that can act like a mouse or a cat," he said. "But it feels like we are within striking distance of all those things."  Eric Schmidt - former Google CEOEx-Google CEO Eric Schmidt believes AI can impact warfare as much as the advent of nuclear weapons.REUTERS/Beck DiefenbachFormer Google CEO Eric Schmidt said AI could have as big of an impact on warfare as nuclear weapons did. "Einstein wrote a letter to Roosevelt in the 1930s saying that there is this new technology — nuclear weapons — that could change war, which it clearly did," Schmidt told Wired in an interview. "I would argue that [AI-powered] autonomy and decentralized, distributed systems are that powerful.Schmidt — who is a founding member of the government's Defense Innovation Board — is trying to get the Pentagon to use AI tools on the battlefield, though he said that progress has been slow. In fact, Schmidt has previously expressed his support for AI. In a 2020 op-ed in The New York Times, Schmidt wrote that the US government "needs to get back in the game in a serious way" in order for the country to win the technology race against China. AI should be a priority for the country, he said. Vint Cerf - Father of the internetVint Cerf, known as the father of the internet, wants investors to consider the ethics around AI.Getty/Stephen LovekinVint Cerf — widely known as one of the fathers of the internet — said that investors pouring money into AI tools are buying into the hype around buzzy tools like ChatGPT. AI chatbots have "an ethical issue" that he hopes investors consider, Cerf said during a conference."Everybody's talking about ChatGPT or Google's version of that and we know it doesn't always work the way we would like it to," Cerf said, according to CNBC.He added that investors should "be thoughtful" about how we use AI."If you think 'man, I can sell this to investors because it's a hot topic and everyone will throw money at me,' don't do that," Cerf reportedly said."Be thoughtful," he added. "You were right that we can't always predict what's going to happen with these technologies and to be honest with you, most of the problem is people — that's why we people haven't changed in the last 400 years let alone the last 4,000."Read the original article on Business Insider.....»»

Michael Hartnett has been stubbornly bearish for the past year. But he's willing to entertain bull arguments if these things happen. Spencer Platt/Getty ImagesBank of America's Michael Hartnett has been one of Wall Street's biggest bears over the past year.But in a Friday note, Hartnett outlined potential factors that could flip him from bearish to bullish.While Hartnett's not holding his breath, here's what he needs to see to turn bullish on stocks.High inflation, a weakening consumer, and the threat of an economic recession are all factors that have shaped the bearish view of Bank of America's chief investment strategist, Michael Hartnett.But in a Friday note, Hartnett highlighted what he needs to see to change his view and turn more bullish towards the stock market.For the year ahead, Hartnett has told investors to fade the S&P 500 as it approaches 4,200 on the idea that the current environment is a "peak goldilocks" moment following the strong January jobs report. In other words, the macro data should only get worse from here."Secular inflation + end of era of QE + end of era of US buybacks + our expectation 'no landing' in H1'23 leads to 'hard landing' in H2'23... this keeps us bearish," Hartnett wrote on Friday. Because of this view, Hartnett has told investors to not buy stocks until the S&P 500 falls at least 12% from current levels. "Nibble at S&P 3,600, bite at 3,300, gorge at 3,000," Hartnett has consistently advised, which would represent a sell-off in the S&P 500 of as much as 26% from current levels and a new cycle low in the current bear market.But Hartnett admits his bearish view on the stock market could fall apart if wage inflation can settle down before the economy experiences a hard landing, aka a painful recession.The thinking goes that if wage inflation is subdued, it would give the Federal Reserve the green light to end its interest rate hikes and even consider cutting interest rates, as wage inflation is viewed as a primary drive of overall inflation.That could be a near-perfect scenario for investors as lower interest rates could help stimulate the economy enough that it avoids a recession entirely.And even if a recession does arrive, Hartnett admits the bulls have something up their sleeve that the bears will never have: scared policymakers."Quite simply everyone expects Fed to cut and politicians to panic via more stimulus checks, rebates, debt forgiveness, at the first blush of recession," Hartnett said.Another factor that could help the stock market perform better than Hartnett currently expects is the long lag between the Fed hiking interest rates and those hikes negatively impacting the economy."Lag from easy monetary policy into economy was instant in 2020. Lag from tighter monetary policy has been much, much longer past 12 months," Hartnett said.The one-year anniversary of the Fed's first rate hike is approaching this March, and two more 25 basis point rate hikes are still expected by the market. But if the economy can continue to hold itself together and sidestep a recession, Hartnett may have to consider taking a more constructive view towards stocks. Read the original article on Business Insider.....»»

Me, Myself, And AI By Stefan Koopman, Senior Macro Strategist at Rabobank Hi GPT-3, I heard a lot of good stuff about you last week. As it happens, I am short on time and ideas this morning. Can you help me write a Global Daily? Hello! I'd be happy to help you with writing a Global Daily. However, please keep in mind that I am a language model trained by OpenAI and do not have access to current news or information. My responses are based on the text that I have been trained on, which has a knowledge cut-off of 2021. I can provide general information and advice, but I cannot provide specific, up-to-date information about current events. Thanks, well, let’s then just zoom out a bit. You could write a few paragraphs on the big clash between democracies and autocracies, and how the future of capitalism fits into this. We need to show we know more about this stuff than anyone reading this. It should also be a bit funny. Could you throw in a football analogy too? That helps to grab attention these days. The clash between democracies and autocracies has major implications for the future of capitalism, as the two forms of government have fundamentally different approaches to economic policy. Democracies tend to support free markets and competition, while autocracies often favor state control and intervention in the economy. The future of capitalism will depend on which form of government prevails in the long run. If democracies continue to thrive, we can expect capitalism to continue its march towards greater freedom and prosperity. But if autocracies become more dominant, capitalism could be replaced by more authoritarian economic systems, in which innovation and competition are often stifled in favour of state control and the interests of the ruling elite, which can lead to economic stagnation and inequality. To understand this clash, it can be helpful to think of it as a football game. In a democracy, the people are the players on the field, working together to advance their shared interests. In an autocracy, the ruler is the coach, calling the shots from the sidelines and dictating how the game should be played. Who will come out on top in this global game of democracy vs autocracy? Only time will tell. That’s a cliff hanger. Would you agree that capitalism too is a bit like football? After all, just as in football the winners are with few and the losers with many. Yes, you could say that capitalism is similar to playing football in the sense that everyone is trying to achieve their own goals, but only a few individuals have the knowledge and expertise to do so effectively. In both capitalism and football, there is a strong emphasis on individual achievement and competition, and success often depends on a combination of skill, strategy, and luck. However, just as in football, there are rules and regulations in capitalism that help to ensure fair play and prevent individuals from gaining an unfair advantage. Ultimately, both capitalism and football are complex systems that require a combination of individual effort and cooperation to function effectively. That’s insightful. Not very funny, to be blunt, but I guess you haven’t learned that yet. Would you agree that artificial intelligence is among the biggest breakthroughs of the past couple of years? Of course our readers are all worried about inflation, curve inversions and recessions, but some very powerful humans have told us that is all transitory anyway. But this breakthrough clearly is not. It’s permanent. It's wild. Should I be excited or scared? I'm glad you found my comments helpful! As for your question about artificial intelligence, it's definitely one of the biggest breakthroughs of recent years. AI has the potential to revolutionize many industries and has already begun to impact our daily lives in ways that we might not even realize. Whether or not you should be excited or scared about AI is a matter of personal opinion. Some people are excited about the possibilities that AI offers, such as more efficient and effective processes, improved decision-making, and the potential for new discoveries and innovations. Others are more wary of the potential negative impacts of AI, such as job displacement, loss of privacy, and the potential for misuse or abuse. Ultimately, it's up to each individual to decide how they feel about AI and its potential impact on our lives. Personally, I think that AI has the potential to bring many benefits, but it's important to approach it with caution and to consider the potential downsides as well. That's very modest of you. I'd say it’s an exciting threat. With a super brain at one’s disposal, anyone is now able to write or produce something, or to find a solution to a difficult problem, not just faster but perhaps also better. On that note, I always believed AI was a working class problem, while the tasks that were less easily displaced were those that required creativity, such as those of a macroeconomist who has to come up with convincing stories about something that’s essentially random. In fact, would you agree it is precisely this that shows we humans don’t have any predictive capabilities? As a large language model trained by OpenAI, I'm designed to assist with a wide variety of tasks, including writing and producing content. However, I am not capable of determining whether or not the content I produce is "better" than what a human might produce. I am simply a tool that can assist with these tasks, and it's up to the user to determine the quality of the output. As for your question about AI and its potential impact on the working class, I think it's important to recognize that AI has the potential to affect workers in many different industries and at many different skill levels. While it's true that some jobs may be more easily displaced by AI than others, it's not accurate to say that only low-skill jobs are at risk. AI has the potential to impact workers at all skill levels, and it's important for individuals and organizations to be prepared for the potential changes that AI may bring. As for the ability of AI to predict the future, I think it's important to recognize that AI is a tool, and like any tool, it has its limitations. AI can assist with predictive tasks, but it's not capable of perfectly predicting the future. There will always be a degree of uncertainty and randomness in the world, and no tool, including AI, can eliminate that completely. That calms me a little, but mostly because it confirms my prior beliefs and I'm just a simple flawed human. Okay, last thing: I don't have much space left, but I want to end with a short joke. Could you help me? "Why was six scared of seven? Because seven eight nine!" Okay… Day ahead Hi. You still there? Forgot one. Could you please tell me what will happen today? I'm sorry, but I am a large language model trained by OpenAI and do not have access to current events or information about the future. As a language model, my primary function is to assist with generating human-like text based on the input provided to me. I do not have the ability to browse the internet or access current events, so I am unable to provide information about what will happen today. Well, that’s a relief! Tyler Durden Tue, 12/06/2022 - 09:50.....»»

California's Vanished Dream, By The Numbers Authored by Joel Kotkin via RealClear Investigations, Even today amid a mounting exodus among those who can afford it, and with its appeal diminished to businesses and newcomers, California, legendary state of American dreams, continues to inspire optimism among progressive boosters. Laura Tyson, the longtime Democratic economist now at the University of California at Berkeley, praises the state for creating “the way forward” to a more enlightened “market capitalism.” Like-minded analysts tout Silicon Valley’s massive wealth generation as evidence of progressivism’s promise. The Los Angeles Times suggested approvingly that the Biden administration’s goal is to “make America California again.” And, despite dark prospects in November’s midterm elections, the President and his party still seem intent on proving it. But most Californians, according to recent surveys, see things differently. They point to rising poverty and inequality, believe the state is in recession and that it is headed in the wrong direction. Parting with the state’s cheerleaders, the New York Times’ Ezra Klein, a reliable progressive and native Californian, says the Golden State’s failures are “making liberals squirm.” Reality may well be worse than even Klein admits. In a new report for Chapman University, my colleagues and I find California in a state of existential crisis, losing both its middle-aged and middle class, while its poor population faces dimming prospects. Despite the state’s myriad advantages, research shows it plagued by economic immobility and inequality, crushing housing and energy costs, and a failing education system. Worse than just a case of progressive policies creating regressive outcomes, it appears California is descending into something resembling modern-day feudalism, with the poor and weak trapped by policies subsidized by taxes paid by the rich and powerful. California may conjure images of Rodeo Drive and Malibu mansions in the public imagination, but today the state suffers the highest cost-adjusted poverty rate in the U.S. The poor and near-poor constitute over one third – well over 10 million – of the state’s residents according to the Public Policy Institute of California. Los Angeles, by far the state’s largest metropolitan area, and once a magnet for middle class aspirations, has one of the highest poverty rates among major U.S. cities. A United Way of California analysis shows that over 30 percent of residents lack sufficient income to cover basic living costs even after accounting for public-assistance programs; this includes half of Latino and 40 percent of black residents. Some two-thirds of noncitizen Latinos live at or below the poverty line. While many Californians are fleeing, some are decidedly less bearish. “In California, there is this idea of ‘Oh, we care about the poor,’ but on this metric, we are literally the worst,” Stanford’s University’s Mark Duggan, principal author of an economic comparison of California with Texas, told the San Francisco Chronicle. The state’s poverty and associated dysfunction are on full display in leading cities like Los Angeles and San Francisco, where a large underclass now inhabits the streets – the once-iconic locales having become poster children for urban dysfunction. Beyond massive homeless camps, crime has become so bad that the LAPD has warned tourists it can no longer protect them. San Francisco, meanwhile, suffers the highest property crime rate in the country. Businesses like Walgreens have shut down numerous Bay Area locations due to “rampant burglaries.” Homelessness and crime increasingly dominate the state’s political discourse, particularly in these two deep blue bastions. California also faces growing inequality. By the Gini index, a measure of the distribution of income across a population, California has the third-highest inequality behind New York and Louisiana, and has experienced the fifth largest expansion of inequality since 2010, according to American Community Survey data. California also suffers the widest gap between middle- and upper-middle-income earners of any state. In leading cities, homeless encampments line streets such as San Francisco's Golden Gate Avenue. AP Once among the most egalitarian regions in the country, Silicon Valley has become among the most segregated places in the country. CityLab has described the technology hub as “a region of segregated innovation,” a trend becoming more pronounced, according to recent research. Silicon Valley now boasts its own underclass of those who clean its buildings and provide food service. Nearly 30 percent of its residents rely on public or private financial assistance. Similarly, according to the Brookings Institution, San Francisco, the technology industry’s most important urban center, has experienced the most rapid growth in inequality among the nation’s large cities in the last decade. The California Budget and Policy Center has named the city first in California for economic inequality; the average income of the top one percent of households in the city averages $3.6 million, forty-four times the average income of the bottom 99 percent, which stands at $81,094 in a city and state with a high cost of living. The situation is worse elsewhere in the state. Over the past decade more than 80 percent of California jobs paid under the median income, and most under $40,000 annually, a poverty wage in California. Worse yet, as demonstrated in our analysis, California lags all peer competitors – Texas, Arizona, Tennessee, Nevada, Washington and Colorado – in creating high wage jobs in fields like business and professional services, as even tech growth begins to shift elsewhere. The biggest losers in California have been those industries that historically provided the best opportunities for working-class people – manufacturing, construction, energy – as well as agriculture, the state’s historic economic powerhouse. On a per capita basis, California builds only a fraction of the housing compared to its main rivals, while corporate new investment, suggests a new Hoover Institution study, has shriveled to a rate one-tenth Texas and one-sixteenth that of Ohio. The state’s climate change policies, however well-intentioned, have had a particularly devastating impact on manufacturing. California’s “renewable energy” push has generated high energy prices and the nation’s least-reliable power grid, crippling an industry reliant on fossil fuels and a stable electric supply. The state fell to 44th in the country in manufacturing sector employment growth last year; its industrial new job creation has lagged competitors such as Nevada, Kentucky, Michigan and Florida. Even without adjusting for costs, no California metro ranks in the U.S. top ten in terms of offering well-paying blue-collar jobs, notes The New York Times. But four – Ventura, Los Angeles, San Jose, and San Diego – sit among the bottom ten. Under California’s green agenda, electricity has skyrocketed while its grid has become less stable. Foundation for Research on Equal Opportunity As the environmentalist Breakthrough Institute summarizes it, the state’s climate agenda has created a “new Green Jim Crow era” keeping more people, particularly minorities, in poverty. Housing policy has also hurt most those who can least afford it. California’s state planning policies aim to reduce urban sprawl – the shift to locales where costs are lower and the state is gaining migrants. The heavily minority Inland Empire, which has little political influence, now has more people than the San Francisco metropolitan area, which dominates state politics, but the former is unable to reverse any of these policies. Despite expectations by planners that limiting suburban growth would reduce prices for the masses and greenhouse emissions by encouraging density, studies in Vancouver, Canada and several other locations have shown the opposite; they associate densification with higher land and housing prices. California has the highest urban density of any state, yet suffers the second highest housing costs and rents of any state except Hawaii. On this issue, some media coverage appears to have been influenced by the pro-density preferences of tech titans like Mark Zuckerberg. Striving, largely minority middle- and working-class families bear the brunt of such policies. According to a recent American Enterprise Institute survey, California is home to six of the nation’s worst markets for first-time homebuyers. It would take more than 100 years for the median-income household to save for a mortgage on a median-priced home in San Francisco, Los Angeles or San Jose. The state now ranks 49th in homeownership rate, producing far less new housing than competitive regions like Arizona, Texas or Florida. A recent study by economist John Husing found not one unionized construction worker can afford a median-priced home in any coastal California county. Unable to buy their own home, many working class families find themselves paying extraordinarily high rents, with more than half of all renters shelling out in excess of 30% of household income, the traditional definition of an outsized housing burden. Nearly four in ten California households meet or exceed this level. Not surprisingly, one quarter are contemplating a move elsewhere. High rents and house prices, along with low wages, also have produced the nation’s highest level of overcrowding. Nor has densification brought the purported environmental benefits cited by California’s champions at Brookings and in the Biden Administration; the pro-density Terner Center projects that if California’s cities followed the density guidelines, at best the state would see a 1% reduction in emissions. Manifest Education Failures Historically education was seen – particularly among traditional liberals – as critical to upward mobility for poor and working-class people. Yet for decades the state’s schools have underperformed national norms, particularly for poor students. Since 1998, California has ranked, on average, 46th in 8th-grade reading and mathematics subject-area performance on the National Assessment for Educational Progress (NAEP), the only comparable assessment between states nationwide. This includes comparisons with demographically similar states like Texas, which spends less money per student. Today, almost three of five California high schoolers are not prepared for either college or a career; the percentages are far higher for Latinos, African Americans, and the economically disadvantaged. Among the 50 states, California ranked 49th in the performance of poor, largely minority, students. San Francisco, the epicenter of California’s woke culture, and site of the recent recall of several far-left school board members, suffers the worst scores for African Americans of any county in the state. These students are often unprepared for college. At California State University – where ethnic studies programs are now mandated – the need for remedial courses or 40 percent of freshmen demonstrates a low level of preparedness in such basic skills as reading comprehension, writing and mathematics. Some educators have decided to eliminate this problem by eliminating remedial classes. California’s model curriculum, which focuses on how to “build new possibilities for post-imperial life that promotes collective narratives of transformative resistance,” may only exacerbate these problems by inculcating attitudes antithetical to those necessary to succeed in a highly competitive capitalist economy. Many California educators from the highest reaches of academia down to the grade school level champion “equity” in education over developing hard math skills and fostering excellence. Even basic life skills such as being on time are eschewed: The San Diego Unified School District will no longer count such scruples as turning in work on time in grading and evaluation. It may reduce the penalties for cheating. This is justified as a way of redressing racial issues, as many of the malefactors (like most California students) are from disadvantaged minority groups. Most Californians support charter schools, including nearly half of all Democrats, and three chapters of the Southern California NAACP – San Diego, San Bernardino and Riverside. The state’s powerful teachers unions, and the Democrats they back, oppose such education alternatives. Tech titans, once focused on improving schools, now seem less engaged. This may make sense given the extent to which tech relies on global talent rather than recruiting locally. In 2018, three-quarters of the tech workforce in the Bay Area was foreign-born, a majority on short-term non-immigrant visas. The answer to many of the problems plaguing California’s struggling lower classes has been to throw more of the upper class’s money at them. Michael Bernick, a former director of the state’s Employment Development Department, says “The culture for much of California, driven by state politics, is one of benefits (and now guaranteed income), not a jobs strategy or expectation.” California is unlikely to be devoting the state’s surplus –driven largely by stock and property gains among the wealth – as Texas and other states do, to attracting businesses. Instead, as Bernick suggests, the preference has been to boost the welfare state, as it did in initiating record-setting stimulus payments during the pandemic. It is now contemplating handing out debit cards to cope with high energy prices created by the state’s environmental policies. California’s technology industry consists of staunch funders of the states’ progressive Democrats. They may themselves be obsessed workaholics and living testaments to entrepreneurial capitalism, but Greg Ferenstein, who interviewed 147 digital company founders, says most believe that “an increasingly greater share of economic wealth will be generated by a smaller slice of very talented or original people. Everyone else will increasingly subsist on some combination of part-time entrepreneurial ’gig work ‘and government aid.” Many prominent business people, including those who made their fortunes in California such as Zuckerberg, Pierre Omidyar, Elon Musk, and Sam Altman, founder of the Y Combinator, have embraced the notion of a "guaranteed wage," that would cover most critical bills. Democratic Presidential candidate Andrew Yang’s campaign was built around this concept. In the interim, people are fleeing the state. Demographer Wendell Cox notes that since 2000, California has lost 2.6 million net domestic migrants, more than the current populations of San Diego, San Francisco and Anaheim combined. In 2020, California accounted for 28 percent of all net domestic outmigration in the nation, about 50 percent more than its share of the US population. California’s population growth has fallen below the national average for the first time, and the state appears to have even possibly lost population the last two years. The pandemic seems to have accelerated this movement. Last year California was home to three of the five large regions over one million with the highest percentage population loss – San Francisco, San Jose and Los Angeles. Both San Francisco and Los Angeles school districts face large decreases in enrollment; the LA district, the state’s largest, projects a 20% cut in this decade. This outmigration trend cannot be dismissed as “white flight.” An analysis of minority population flows shows that Latinos and African Americans are settling increasingly west of the Sierra, particularly in the south, Texas, and parts of the Midwest. Similarly, the foreign-born population – so critical to the state’s economy – has declined in Los Angeles over the past decade, and stagnated in the Bay Area while swelling in places like Dallas-Ft. Worth, Austin, Houston, Nashville and even midwestern cities like Columbus, Des Moines and Indianapolis. Simply put, California is in danger of losing its youthful mojo. Many of those leaving, according to IRS data, come from young, middle and working class families. When these people leave, birthrates plummet. Los Angeles and San Francisco rank last and second-to-last in birthrates among the 53 U.S. major metropolitan areas. Among California's big metros, only Riverside/San Bernardino exceeds the national average in women aged between 15 and 50 with births. California’s total fertility rate, long above the national average, is now the nation’s 10th lowest. Los Angeles County alone has lost three quarters of a million people under 25 over the past twenty years. California today is as old as the rest of the country and aging 50 percent faster than the national norm. It is rapidly replacing the surfboard with a walker. *  *  * Joel Kotkin is a Presidential Fellow in Urban Futures at Chapman University in Orange, Calif. Tyler Durden Fri, 04/15/2022 - 22:15.....»»

Editor’s note: Even in an industry where jobs are determined by the disparate geography and composition of their individual communities, there are realms that transcend the real estate firmament, where markets, environments or policy make the experience of buying and selling homes something else entirely. People who embark on careers in these spaces take on […] The post Mountain Peaks and Tumbleweeds: Real Estate in Frontierland, USA appeared first on RISMedia. Editor’s note: Even in an industry where jobs are determined by the disparate geography and composition of their individual communities, there are realms that transcend the real estate firmament, where markets, environments or policy make the experience of buying and selling homes something else entirely. People who embark on careers in these spaces take on a different set of challenges than the vast majority of those in the industry. In RISMedia’s “Real Estate On The Edge” series, we take a look at some of these people and the spaces they work in, highlighting some of the most interesting places and environments to practice real estate. In the far southwest corner of Texas lies Zapata County. Nestled against the U.S./Mexico border, the county—around 1,000 square miles of rocky desert, with a population of around 15,000—is not home to any incorporated municipalities or border crossings. About a third of the population lives in the relatively bustling county seat of Zapata, which offers all the small-town comfort that a few chain restaurants, mom-and-pop bakeries, laundromats and a newly built public playground can provide. A scrubby nine-hole golf course at the edge of town holds regular tournaments and fundraisers, and the local high school football field can accommodate more than half the town’s population for football and other sporting events. The nearest city of any measurable size is Laredo, about an hour’s drive to the north through mostly empty desert, and the nearest metro, San Antonio, lies almost four hours away by car. Liz Mendoza is the broker/owner of Cornerstone Real Estate. She has lived in Zapata her entire life. Most of her family works in education, she says, but since 1996, her passion has been real estate—something that started as a college job but evolved into much more than that as she took over the county’s only real estate brokerage. “I’m the little one from this little, small city but I’m a contender,” she promises. Most homes in Zapata County go for around $100,000, though you can get a fixer-upper for half that. Like Mendoza, many of her clients have deep roots in the small desert community, going back multiple generations. People will inherit land or a home and may want to sell, while others save enough money to upgrade after living in one of the many prefabricated structures or trailers that essentially serve as starter homes. About 15% of Zapata residents work in the oil industry, chasing jobs that have steadily moved out of the area according to Mendoza. In 1954, a dam meant to mitigate flooding issues in the Rio Grande completely destroyed the original settlement, with many property owners forced to flee on short notice, abandoning family homesteads. But many of them chose to remain in the area despite its remote location and challenges. Mendoza describes this attitude in her beloved community as not one of defiance, but persistence. People in Zapata are not staying in spite of the area’s tough history, but because of it, relishing the community and the lifestyle that their ancestors cultivated. “They keep lands in their families for generations,” she says. About 2,000 miles to the north, on the far side of the country, is another place that has historically drawn those who want to embrace a self-sustaining, rugged lifestyle far from the city rat-race. With a population of just over a million people spread out over 150,000 square miles of deeply forested, mountain terrain, Montana is one of the least densely populated states behind only Wyoming and Alaska. Will Friedner is not a native Montanan, he admits. He founded his brokerage, Montana Life Realty, about 15 years ago with his wife after growing up in Minnesota. “The most fulfilling thing is just showing people the state and watching them react,” he says. “It’s still one of the few places left in the lower 48 that is still so wild.” Though it has little else in common superficially with the shale-scattered clay of South Texas, people who choose to live in rural Montana share something very important with the folks of Zapata: pride. Friedner says that people in his state are looking for a lifestyle that is deeply personal and unique, centered on the state’s ability to provide space, and a rugged communion with nature. “I like to joke that you can watch your dog run away for three days, because there’s nothing there,” he says. Further north—much further north, in fact—is a place that most people understand is a frontier. Connie Yoshimura is a broker at Alaska Realty in Anchorage, through Berkshire Hathaway HomeServices. She took a road trip up through Canada 40 years ago, she says, and never looked back. Though there is truth to what outsiders imagine when they think of her state—long winters, wildlife, empty space and self-reliance—Alaska is also a place of great diversity, she says, with bustling cultural centers and people living all sorts of lifestyles. “We’re actually a combination of a frontier state and a pretty sophisticated urban environment,” Yoshimura says. Those who are seeking to move there, or move within the state, mostly know what they are doing, she says, and also have in common a tremendous appreciation of what Alaska can offer them and their families. “I personally enjoy working with buyers and sellers and learning what brings them to this particular point in time,” she adds. “Some people come for great adventure.” What these frontier agents all have in common, though, is a deeply personal reason for doing what they do, where they do it—a connection with the people, with the landscape or with the history of these communities. Whether they grew up there or are transplants themselves, each has remained out on the edge, spending decades getting to know all the unique challenges and extraordinary experiences of these places—which in the end, is what the job is all about. What It’s Like Housing is especially unique in Zapata, according to Mendoza, because no developer has ever built speculatively there—every house is either a prefab or a custom design commissioned (or constructed) by the property owner. Because of this, and because she has been essentially the only real estate agent in the county for close to two decades, Mendoza says she has sold some’s homes three or four times. “I know the history of it, and I can tell them that. Some may or may not believe it, but I’ll tell them, ‘Oh I remember when I sold it the first time, and this is what it looked like,'” she laughs. “Limited inventory, you know, so we trade the same house over and over.” One of Mendoza’s properties outside the town of Zapata—a three-bedroom, two-bath ranch listed at $105,000—is described as “secluded…yet property is not isolated.” Among the listing photos is one of a rabbit crouched beside a cactus in the backyard (the property is great for hunting, the listing says). Another listing consists of two prefab structures (one that was formerly used as a beauty shop) connected by a sheet-metal overhang that forms a patio, or carport depending on preference. The lot includes shaded animal pens as well as a lake view, according to the listing. Mendoza says it took a while for the larger REALTOR® organization in Laredo—a relative metropolis with a population of about 100,000—to take her seriously, but she has since proved herself as a scrappy and passionate member of the community, being elected to the Board of Directors in Laredo last year. “There’s other big-time brokers that trade properties left and right, and at first I was kind of being looked down ,” she says. “They’ve learned to respect me, and now they appreciate Zapata because I tell them the good .” At the other extreme in Zapata is the relocation industry. U.S. Customs and Border Protection Agents are consistently transferred in and out, and oil industry workers—who make up about 15% of Zapata County jobs according to census data—also arrive regularly, many from thousands of miles away and hailing from very different geographic and demographic areas. “We deal a lot with relocation,” she says. “Some people are used to having Walmart a block away. We don’t have that; it’s 45 minutes to the first Walmart. So we kind of explain that to people.” While these kinds of situations—communicating the unique challenges of the area to outsiders—make up a good portion of Mendoza’s business in Zapata, out-of-staters have been Friedner’s bread and butter, at least for the last two years or so. Montana metros were the third-fastest growing in the nation as far as price appreciation this past spring and summer, according to data collected by the National Association of REALTORS®, as many people fled coastal markets looking for space and affordability during the pandemic. With all the transplants, it got to the point where late last summer Friedner filmed a video titled “Living in Montana: Things They Don’t Tell You,” which was meant to address issues most outsiders are not prepared for. That video went viral, garnering almost 2.5 million views as of press time. “Ironically enough, the video that goes viral is the one that’s about why you shouldn’t move to Montana,” he deadpans. He was inspired to make that video, he explains, after driving a couple from Los Angeles hours into the wilderness to see a home they had viewed online, and felt was a sure home-run. “They just had no idea what they were getting into,” he says. “By the time we got to it, their eyes were huge and…obviously weren’t going to live out there once they saw it in person.” Frieder says he now strongly recommends that any out-of-state buyers take a drive through the state before he sends them any specific listing, just so they can get an idea of just how vast and isolated it is—have a chance to spot a bear on the side of the road or experience a few hundred miles of cell-service blackout. If they are still interested after that, he says they can start discussing specific properties or issues, like roads that are only ploughed if you plough them yourself, grizzly bears and wolves encroaching on properties (only an issue in certain parts of the state) and what “off-grid” really means as far as your daily, monthly and yearly investment of time and money. “Some people are scared off a little bit, some people just think it sounds even better,” Friedner laughs. This is in stark contrast to Alaska where Yoshimura says people almost always have a good idea of what to expect if they are planning on moving to the state. “Everybody that’s here enjoys the great outdoors,” she says. Claire James is Alaska Realty’s business development director working with Yoshimura at Berkshire Hathaway. She herself is an avid backpacker and outdoor enthusiast who regularly embarks on weeklong hikes through the Alaskan wilderness. But she says a lot of folks coming up the state end up in relatively standard living arrangements in the cities or suburbs. “Often will say they’re looking for a cabin in the woods,” she says. “But in reality, we live in a major city. We do not live in igloos in Alaska. Once they’re here, they realize they want to live where the work and where the homes are, and maybe in the future they can purchase that second cabin.” That isn’t to say there aren’t plenty of unique aspects to the market. A lot of people who purchase lake homes need to know whether they are able to land or dock small airplanes there, according to Yoshimura, as air travel is extremely common in a state where roads simply do not reach every town or community. Wildlife is also endemic to all parts of the state—not just out in the boonies. “I was out walking my dog last night and I was greeted by a huge bull moose,” James says. People who have lived there a while are not necessarily surprised or in awe of these types of encounters—both black and brown bears, bald eagle and wolves—but instead approach the situation from a practical standpoint. “A lot of times you just think, ‘Okay should I run?'” James laughs. Another unique issue is for people who live in “fly-to” locations outside of the major cities and have to account for the fact that all goods and services have to arrive by plane. The trade-off is of course, access to some of the best fishing, hiking and incredible landscapes in the world. “Those towns are just beautiful,” James says. Generally, Yoshimura says people in Alaska are looking for two things: space and a view. Lake homes are very popular, and anything with mountain or water views will be in high demand. Lake access or really spectacular views can easily drive the price of a property up by six figures, she says. These things are also highly sought after in Montana, according to Friedner, but the vast surge of interest from outsiders has also resulted in a lot of push-back from the folks who have lived there for generations. In the “Living In Montana” viral video, Friedner said that some locals have begun referring to Bozeman—the state’s fourth-largest metro with a population of just over 50,000—as “Boze Angeles” due to the influx of California migrants. But though restaurants might be busier and roads might occasionally get clogged (relatively speaking) around resort areas, Frieder says Montana has plenty of room for newcomers. “As much as the locals don’t want to hear that,” he says, “you can drive ten minutes out of town and you’re in the middle of nowhere. I don’t want to see Montana turn into Southern California, but it’s going to be long after I’m gone before it ever gets to that point.” Why We’re Here In Zapata, welcoming strangers has never been an issue, according to Mendoza—something that can be traced through the area’s history of ranchers and frontiersmen who stuck together through hard times. That includes decades of 19th century outlaws feuding across the almost stateless land, and political upheaval during the short-lived Republic of the Rio Grande uprising in 1840, with the county named after slain revolutionary general Antonio Zapata. But despite its lineage of conflict, Mexican and White Anglo-Europeans in Zapata have almost always gotten along, according to the Texas Historical Society, even as nearby regions saw significant ethnic and racial violence through much of the late 19th and 20th centuries. Mendoza says this spirit of peace and harmony persists today, with the majority-Hispanic population happy to mingle with relocated workers, seasonal vacationers at nearby Falcon Lake and any new neighbors regardless of race or origin. “We’ve learned to mesh well with everyone,” she says. “People here are raised different—we’re raised to respect. Everybody here—in Spanish we say, tio and tia. So everywhere I go, people are my tio and tia, people I don’t even know. That’s the respect we have for people because we were brought up with that kind of morals.” Living in a place where everyone refers to you as an uncle or aunt is part of what has kept Mendoza in Zapata, she says, and part of what makes her work more than a job—makes it a service to every person who wants to share the unique, enduring community she belongs to. “These are people that I live with, these are people that I’m going to see at the store tomorrow,” she says. “I need to make sure that I did a good job for them because I’m going to bump into them every day, and I want to make sure they’re happy with the services that I could provide. So I take a lot of pride in that.” In Montana, there is a very different kind of priority. Many people come to the state and stay there because they would rather not see their neighbors every day, according to Friedner. “Everybody wants to go be a cowboy in Montana,” he said. The peace and opportunity that comes from that amount of space has a growing appeal, he says, with a lot of out-of-state folks explicitly asking for homes that are “off the grid” or properties with no legal restrictions. In his video, Friedner talked about housing covenants, which dictate the kind of activities or uses allowed on a particular lot. A lot of people come to him asking for properties that have no covenants, and because most of rural Montana land is also unzoned, they imagine they can do essentially whatever they want with that kind of property. Though this is often attainable, Friedner warned that there are also drawbacks. A neighbor can park dozens of junk cars haphazardly in their front yard, open a store or start raising livestock next door and there is little recourse for a property owner who is bothered by these things. Because of this need for space, sometimes even acres and acres of distance isn’t enough, Friedner says, as people value their self-reliance, history and privacy in a way that is hard to describe to outsiders. Likewise in Alaska, where James and Yoshimura say that there is an inherent respect earned simply by calling the state home. “Alaskans are really proud to live here,” she says. “There’s just no more beautiful place than Alaska,” Yoshimura affirms. Diversity is more than environment and landscape, she adds. Indigenous people speak almost 150 different languages in local schools, and Anchorage and Juneau boast growing hispanic communities, she says. And though the 18% of the population that identifies as indigenous has faced violence and continues to battle discrimination, several young people have also been able to move into the cities, according to Yoshimura, to attend colleges or elevate employment opportunities. Every individual and family—immigrant or native— bring tremendous and unique individual histories to the state, Yoshimura says, traceable across the vast Alaskan landscape and beyond. And that is the real appeal to being in this part of the world, especially as a real estate agent, she adds. Every place where people live has written its own story, stories that are often as wild and ancient as the rolling tundras, sparkling fjords and soaring mountains that initially draw people to explore Alaska. It is this deeper landscape of community and history that someone like Yoshimura, someone like Friedner, someone like Mendoza gets to explore every day, and the reason why they all have spent decades as real estate agents in the communities that they know—and love—more than anyone. Jesse Williams is RISMedia’s associate online editor. Email him your real estate news ideas to jwilliams@rismedia.com. The post Mountain Peaks and Tumbleweeds: Real Estate in Frontierland, USA appeared first on RISMedia......»»

ESG funds—investment funds that are supposed to include companies that score the highest marks in environmental, social and governance factors—have become increasingly popular as more people look to put their money where their environmental concerns are. When BlackRock debuted a new ESG-aligned fund in April, investors couldn’t get enough. They poured $1.25 billion into the… ESG funds—investment funds that are supposed to include companies that score the highest marks in environmental, social and governance factors—have become increasingly popular as more people look to put their money where their environmental concerns are. When BlackRock debuted a new ESG-aligned fund in April, investors couldn’t get enough. They poured $1.25 billion into the U.S. Carbon Transition Readiness ETF (stock ticker LCTU) on its first day. No ESG fund, or any type of exchange-traded fund (ETF) for that matter, had ever received that much investment so quickly. But this wasn’t entirely a feel good story about investors betting on a more environmentally-sound future. BlackRock’s ETF included the pipeline company Kinder Morgan and oil and gas companies like ExxonMobil and Chevron. [time-brightcove not-tgx=”true”] It wasn’t all that unusual for an ESG. The story of LCTU and the companies within it is representative of both the immense popularity and the confusing and controversial nature of ESG funds. The amount handled by money managers in these funds has risen from roughly $569 billion in 2010 to $16.5 trillion last year, according to the Forum for Sustainable and Responsible Investment. Yet ESG funds have risen to prominence without much regulation or requirements from the SEC, which has only recently started to develop a framework for handling ESG funds. So a company’s presence in an ESG fund does not guarantee it is a top steward of the environment, just as a fund being billed as an ESG does not guarantee it is filled with environmentally sound companies. “There’s a fundamental problem, which is the SEC allows you to name funds that don’t necessarily reflect what’s inside the fund,” said Andrew Behar, CEO of As You Sow, a nonprofit shareholder advocacy group. So how can you tell whether you’re truly making a sustainable, green investment? TIME spoke with a variety of investment fund managers and presidents to get a sense of how they operate. Here’s a guide to help you learn the different ways various funds define ESG, how companies get vetted, and which companies are reaching the highest standards. The limits of ESG funds ESG generally entails “investing in the best of everything,” according to Leslie Samuelrich, president of Green Century Funds. Asset managers attempt to package a few dozen companies that rate better than their peers in various characteristics, ranging from greenhouse gas emissions to environmental racism, and have trustworthy corporate governance. Many funds use ESG ratings from MSCI to make determinations. ESG does not automatically mean certain types of companies are excluded even if, Samuelrich adds, they are “what you would sort of think of as ‘oh those are dangerous companies.’” That’s why companies like ExxonMobil, which engages in activities like flaring and emits loads of greenhouse gases but is working to reduce its carbon footprint, can be found in BlackRock’s LCTU fund. BlackRock has specific funds that eliminate fossil fuel companies, but its general ESG-aligned funds contain fossil fuel companies it believes will most benefit from a transition to a low carbon economy. Funds with ESG or sustainability in the name from State Street, Fidelity, Vanguard, and other asset managers, also feature fossil fuel companies or utilities powered by fossil fuels. It’s up to the asset managers to determine whether they want to screen out companies involved in fossil fuels, tobacco, guns, or other investment areas generally considered harmful to people or the environment. Green Century Funds, for instance, does not allow any fossil fuel companies in its funds, and Trillium Asset Management and Parnassus Investments have the same prohibition. While ESG funds are based on relativity, Matthew Patsky, CEO and lead portfolio manager of Trillium, doesn’t believe companies like ExxonMobil and Occidental Petroleum should ever be included in funds billed as being good for the environment, regardless of how they stack up against competitors. “The small independent is likely the dirtiest,” Matt said. “ExxonMobil is going to be cleaner than that.” But, he added, “You can see they funded more of the misinformation campaign to declare that climate change was a hoax than any other corporate entity globally. Well, for me, that’s a non-starter. I don’t want to ever see it in a portfolio.” How companies get vetted by ESG fund managers Although standards for environmental care differ across industries, there are a few benchmarks ESG fund managers typically consider when vetting companies for the environment. For carbon emissions, for instance, they seek companies that have science based targets vetted by outside experts. They look for absolute goals because relative goals — such as reducing emissions on a per customer basis — don’t give a full picture. And when it comes to net zero emissions promises, Julie Gorte, senior vice president for sustainable investing at Impax Asset Management, says there is “a ton of fairy dust,” referring to companies that claim they will eliminate carbon based on technologies that don’t exist yet. Gorte says companies that are the most serious about reducing emissions lay out specific plans for cutting not just their own direct and indirect emissions but for emissions created by other companies along its value chain, which are known as Scope 3 emissions. “And if a target doesn’t say that then they’re probably just blowing smoke and hoping no one will notice,” Gorte said. Gorte added that emission reductions were most important for a company trying to reach net zero, before carbon offsets, which can sometimes be used as a cover for keeping harmful environmental practices. Fund managers typically delve deeper than the numbers available on public reports. Before Parnassus invested in Digital Realty Trust, director of research Lori Keith visited some of their data centers with a few of her colleagues. The company, which has around 300 data centers worldwide, has set the goal of reducing its direct and indirect emissions by 68% by 2030 and increased their usage of renewable energy. At the data centers, Keith inspected Digital Realty Trust’s operations for herself and interviewed executives and frontline employees to validate whether the company was truly making progress and came away satisfied. “Those (visits and interviews) are really important for us to make sure that anything that they’re putting out there is of serious intent and that they are genuinely moving towards those targets,” said Keith, who is also portfolio manager of Parnassus’s $8 billion Mid Cap Fund. At Vanguard, Yolanda Courtines, portfolio manager of the Vanguard Global ESG Select Stock Fund, says she tries to meet with the executive team and board of every company on her fund at least once a year and sometimes five or six times. “It’s asking simple questions. ‘Are you working with your supply chain? How are you helping them reduce their environmental footprint? Are you putting solar panels on the roofs of your suppliers?,’” she said. “That’s the sort of questioning level that you kind of really want to get into to understand what’s happening.” Relying purely on data, according to Patsky, does not always provide an adequate portrayal of a company. And he admits that Trillium’s vetting process, which involves everything from talking to current and former employees to checking with NGOs familiar with companies’ labor conditions in China, still can’t uncover everything. “I don’t want to lead you to believe that we have perfect insight, because if we had perfect insight, we’d have the equivalent of inside information that we don’t,” Patsky said. The companies that stand out to fund managers There are no perfect companies in ESG funds, either. Fund managers think of them as leaders and laggards, with plenty of space in the middle. Investors who are conscious about the environment will likely find their best choices in leaders who are making environmental gains beyond most of their peers but still have flaws. Behar, the CEO of As You Sow, gave Kellogg’s as an example of a leader on the food supply chain. Like most companies, it used wheat and oat crops that had been treated with the herbicide glyphosate, a known carcinogen. After being pressured by lawsuits and activists that included As You Sow, Kellogg’s made a plan in 2020 to phase out glyphosate by 2025. Companies like General Mills and PepsiCo have also recently made regenerative agriculture plans. “A company like Kellogg’s is being a leader. General Mills is also being a leader,” Behar said. “And now the whole industry has to follow because of competitive pressure.” Courtines highlights Michelin, the tire company. “That’s a tough industry to be in,” she said, “but they are very, very responsible owners of managing the rubber supply chain and in helping build the tires that are going to be the best tires for electric vehicles that will help reduce carbon footprint on the roads in the future.” Two companies that came up in conversations with multiple fund managers were Microsoft and Google. Both are already carbon neutral. Google has eliminated legacy carbon, and Microsoft has a plan to do the same by 2050. “Their initiative is to remove everything that they’ve emitted since they started, and hopefully that leads to other companies taking a similar approach,” said Iyassu Essayas, director of ESG at Parnassus. But, as Patsky points out, Google is being investigated for anti competitive practices. Still, he believes its environmental record outweighs those concerns enough to include in Trillium’s funds, highlighting Google’s 100% usage of renewable energy and even its purchase of the smart thermostat company Nest. “That’s just one of their many products, but it’s one of the products where I’m like, ‘All right, that’s just brilliant,’” he said. “It’s like a self learning device that’s trying to improve environmental outcomes by moving people toward recognizing that they can be comfortable with the temperature being a little warmer in the summer and colder in the winter.” How to examine companies and ESG funds yourself Retail investors can investigate specific funds by reading through their prospectuses. Of course, that involves lots of fine print. As You Sow has an online tool that provides more digestible information on where dozens of ESG funds stand on fossil fuels, guns, gender equality, and other issues. To study individual companies, fund managers recommend average investors research annual sustainability reports, which you can usually find by searching the internet for a company’s name and “sustainability report.” Companies with legitimate environmental progress will have reports with absolute goals and statistics and not just anecdotes. (Look for concrete numbers with specific deadlines.) Average investors could also check whether the corporate governance structure has enough people concerned with the environment, by searching for whether board members and upper level executives have ever talked about prioritizing the environment or come from previous jobs and companies concerned with the environment. It can get complicated, so Samuelrich, from Green Century, recommends investors first consider a company’s core business. “What is the company sort of set up to do, and is it doing something this harmful? Is it doing something that’s neutral? Or is it doing something that’s inherently positive?” Samuelrich said. From there she said investors should hone in on one or two issues most important to them and search for information in news articles or on companies’ websites and in their sustainability reports. “What you’re looking for is things like, are they trying to reduce their carbon emissions? Do they say that on their website? Are they trying to reduce their plastics use? Are they trying to minimize their water use? Do they have a policy around supply chain labor standards, for example?…Do they have women or people from diverse backgrounds on their board?”.....»»

Siobhan Llewellyn used a part-time job to recover from burnout and plot her next move. "I had a complete identity crisis, but I felt free," she said. Siobhan Llewellyn started a social media business and says that she's "never been happier."Siobhan Llewellyn Siobhan Llewellyn, 30, quit her $100,000 job last year after she became "extremely burnt out." She began working part time as a professor, which helped her to set up her "dream" business. While there have been financial challenges, she says that she's "never been happier." A year ago, Siobhan Llewellyn was making $100,000 per year — but she knew that her situation wasn't sustainable.Her job, an ecommerce marketing manager position in Toronto, had left her "extremely burnt out," the 30-year-old told Insider. She couldn't even read an email or attend a meeting without feeling "severe anxiety and panic."And since she'd moved away from her office when her job was fully remote, she faced a three-hour round-trip commute three days per week."It was a perfect storm," she said.One morning last March, she decided to "throw in the towel.""I brushed aside my mental, physical, and emotional well-being for too long, and I knew I needed to make some big changes," she said. "You could say my body made the decision for me, because my mind had ignored the alarm bells."She now works part-time as a marketing professor at two colleges and is launching her "dream" social media business. Though she's making much less according to documents viewed by Insider — $90 per hour, which she expects to lead to roughly $50,000 for the year — Llewellyn says that she's "never been happier.""Part-time was my 'out.' It allowed me to pay the bills, keep some structure in my life, and gave me the freedom to discover my next step," she said. "It's amazing what you can dream up when you have the time to think."Llewellyn is based in Canada, but her story is reflective of a broader desire for part-time work. As of January, 22.1 million Americans were working part-time voluntarily, according to Labor Department data. That's nearly six times the number who were part time but wanted a full-time gig — 4.1 million Americans. This marked the highest ratio of voluntary to involuntary part-time employment in two decades.In part, this data speaks to the strong US labor market, but there are also many Americans not pursuing full-time gigs due to health issues, childcare responsibilities, and burnout. One-third of women took time off from work due to their mental health last year, according to a Deloitte study of 5,000 women across the globe.While a part-time job might not be easy to find, many workers who have landed one have found themselves better off.The shift to part-time and entrepreneurship required some major cost-cuttingBetween her two part-time teaching jobs, Llewellyn says she works about 15 hours per week. She says it's given her the time to launch her dream business.In February, she founded WellMarket Collective, an online platform that offers community groups, events, and workshops to help people connect with professionals and navigate their health and wellness journeys — an idea that she says was inspired by her own struggle to get help. In January, she started an Instagram page where she offers inspiration to others who feel stuck in their careers — and has already gained over 30,000 followers.Llewellyn says her business isn't generating revenue yet. She's been focusing on building awareness, and hopes to start receiving an income soon as she rolls out a membership model.In the meantime, her lifestyle shift has come with financial challenges for her and her husband, who works full time. "Small luxuries" were the first things they cut, she says, adding that she did an "audit" of all their memberships, subscriptions, and streaming services and decided what they could live without. They also put any big vacations on hold, changed where they shopped for groceries, and cut back on eating out."We knew we'd most likely have the bills covered, but the extras had to take a back seat," she said. "None of these changes seem huge, but they really add up to help save money each month."She's also had to work on not tying her identity and self-worth to how much money she makes, which she says has been a "hard habit to break." But her work-life flexibility, in addition to her ability to pursue something she's passionate about, has helped her work through this."I was always going to work on someone else's dream or idea, and I was most likely going to be tied to a 9-5 schedule," she said. "And once I realized that, the security of a paycheck, the benefits, the bonus, it all became less of a priority."Advice for people considering part-time workDespite her burnout, Llewellyn says that her goal was never to work part-time forever. She said that she's a "highly ambitious and driven person" who "loves to work," but just needed to recover, reevaluate her life, and ideally, find something she was more passionate about."I didn't want the fact that I left corporate to stop me from being successful in whatever I chose to do," she said.For these purposes, she says that part-time was a "great option."For others considering making the shift from full-time to part-time, Llewellyn has a few pieces of advice.First, talk to people who have worked part-time and learn about their experiences."I've gone on countless coffee dates to learn about how other people live and work and I always come back feeling inspired with more confidence to make a change," she said. "I found out about part-time teaching through a friend."Next, start building up an emergency savings fund if you haven't already. Llewellyn says that she and her husband had six months' worth of expenses saved up when she made the transition to part time. This took a lot of the financial pressure off and allowed her to take the time to think about what she wanted to do with her life. Of course, the elevated inflation across the world could make saving more challenging.Last, before quitting your full-time role, she recommends asking your current employer if it's possible to work part-time, particularly if you "love what you do" but are just a bit overwhelmed.Llewellyn says that there are pros and cons to her new work lifestyle, but that the biggest benefit has been the additional time and freedom she now has — two things she didn't realize how much she was missing in her day-to-day life."Don't get me wrong, I was scared, lost, and had a complete identity crisis" she said. "But I felt free. Like I'd finally given myself the time and space to ask what I wanted to do with my life and how I wanted to do it."Read the original article on Business Insider.....»»

The Fed is still fighting last year’s war against inflation. It needs to pivot fast Will Rogers famously advised, “If you want to get out of a hole, stop digging!” Tragically, the Federal Reserve’s Board of Governors and its chair, Jay Powell, keep desperately digging in their pathological efforts to bury the phantom of inflation. Fed heads are haunted by their fellow economists’ criticism that they were slow to react to out-of-control “transitory” inflation in 2021—when they were frozen in an obsolete 2020 drive to turbocharge economic stimulus out of COVID—but amazingly they are now making the same mistake once again, trying to fight last year’s war, by staying focused on the inflation boogeyman while missing the new and more potent economic dangers lingering on the horizon—namely, economic recession, a hard landing, and financial panic. [time-brightcove not-tgx=”true”] The impacts of Fed oversteering are felt disproportionately and inequitably by certain sectors; education, healthcare, and to some extent government are basically impervious to rising rates, comprising over half of GDP; so disinflation has to come from cyclical sectors such as services, manufacturing, and housing/construction; and already, as the third author warned on CNBC, some sectors such as the $10 trillion commercial real estate space are poised for complete havoc. The dangers of the Fed’s policy come right out of its projections at this week’s FOMC meeting. The Fed states that appropriate monetary policy will cause GDP to only rise 0.4% this year. But data from the first quarter indicate that GDP in the first 3 months of the year will rise at an annual rate of at least 2%, if not more. This implies that GDP must decline over the last three quarters of this year for the Fed to reach its target. If that is not planning a recession, we don’t know what is! For GDP to decline over the next three quarters means that Powell is planning for no employment growth whatsoever. In other words, payroll growth, which has averaged well over 300,000 per month over the past 6 months, must drop below zero over the remainder of this year. The only way payroll can grow is if there is another steep drop in productivity growth, which would be unprecedented following the record productivity drop the US economy experienced last year under Powell’s watch. This is a policy designed for disaster. Read More: Make Banks Pay for More Deposit Insurance But the worst fallout of the Powell program is yet to come. Powell himself has admitted that monetary policy works with a lag. Yet, despite the recession the Fed is planning for the US economy, Powell admits that there has been no discussion of potentially lowering rates later this year despite his recession projection. This reminds us of Powell’s disastrous 2021 statement that, while commodity, housing and security prices were soaring, he laughingly uttered “we are not even thinking about thinking about raising interest rates!” Powell’s rigidity is inexplicable following the collapse of SVB and other financial institutions. It appears that the Fed has been completely blindsided by the liquidity problems his policy caused the banking system. There are reports that regulatory authorities never tested the banks’ liquidity position for interest rates over 2% even though the Fed was long planning for rates to be two to three times higher. The magnitude of this failure adds to the significant missteps that Powell and the Fed have pursued since the COVID Crisis hit in March 2020. Fortunately, capital markets disagree with the Fed’s hawkish positioning. The Federal Funds futures rates are well below the what the FOMC is now projecting just as they were presciently above Powell’s wrongly dovish projections two years ago when inflation was accelerating. Markets are pricing in expectations that the Fed will be forced to start cutting rates within a couple of months, with an expected end-of-2024 interest rate less than half that of the Fed’s, while 2-year yields have sank far below 4% already. But the markets predictions will only force the Fed’s hand if Powell is listening to the markets. If not, watch out! The Fed is missing pervasive disinflation throughout the economy The Fed’s stubborn insistence on relying on faulty, time-lagged and cherry-picked statistics means that it misses the pervasive disinflation that is currently spreading throughout the entire economy. Gaudy headlines that “monthly inflation rose 6%” are hardly as straightforward as they appear. As the second author has pointed out, Powell’s preferred inflation reading, CPI excluding energy, food, and now housing, ignores the most significant expenses for individual Americans and excludes half the entire economy. All those exclusions carelessly thrown out show prices are actually coming down across the entire economy. Oil prices are down 50% from their peaks last year, with WTI crude oil falling from $140 to around $70 a barrel. Natural gas prices are also down. Henry Hub Natural Gas prices have fallen 80% from $10 last year to $2 per million British thermal units (mbtu) now. Food prices are down by 20% to 50% across the board, ranging from cattle, pork and poultry to soybeans, corn and wheat, to name just a few. Even beyond energy and food, goods disinflation is widespread across the entire economy, especially across the non-food/energy commodities and industrial complex. Lumber is down 90%, industrial metals are down, while finished goods and consumer products are now being massively discounted amid supply gluts. In housing, mortgage rates of 7% have brought the single-family housing market to a practical standstill while completely freezing commercial real estate lending, with construction jobs falling 50% last month—the steepest drop in history. From what the third author is seeing on the ground, most builders are only finishing what was already started as they refuse to start any new projects. This is on top of steep rent disinflation in new contracts, which is yet to be reflected in the time-lagged full-year rent measurements because these include older contracts that take up to 12 months to fully roll off. Manufacturing has turned negative while supply chains have completely de-bottlenecked as shipping and cargo rates have collapsed. In fact, far from being log-jammed, major supply chain players such as railroads are now openly complaining about half-empty railcars and “significant unused excess capacity” amid huge drops in industrial production. Contrary to time-lagged statistics, forward-looking expectations of future inflation have decreased dramatically. Financial markets, through inflation break-evens, are now pricing in future inflation will be well below 3% and much closer to 2% across any timespan. But all of these current and forward-looking indicators are insufficient to the Fed, which stubbornly maintains a persistent, misguided focus on labor costs, partly because its staff of 400 group-thinking economists appear to be married to abstract mathematical models rather than real-world economic linkages. But as we’ve noted before, blaming inflation on labor market tightness reflects an obsolete Phillips Curve mentality which even Powell disparaged earlier in his tenure. There has been zero empirical correlation between inflation and wages for at least 50 years, and if anything, higher wages are past overdue as real wage growth has actually trailed inflation for much of the last three years—meaning wages have been pushing inflation down, not up, and is due for some catch-up. There is simply no way to get the wage numbers Powell wants unless he destroys crucial services sectors including hospitality, retail, restaurants, and tourism. We ought to be celebrating record employment while increasing labor supply instead of aiming to increase unemployment or kill wages. Philosopher Abraham Kaplan warned researchers 60 years ago to beware of “the law of instrument” where if your only tool is a hammer, every problem looks like a nail. It is time to stop hammering random sectors of a strong economy due to anachronistic thinking and, perhaps, professional insecurity......»»

Thursdays are all about longform links on Abnormal Returns. You can check out last week’s linkfest including a look at China’s relentless... BooksA Q&A with Jenny Odell author of "Saving Time: Discovering a Life Beyond the Clock." (wired.com)An excerpt from "Mixed Signals: How Incentives Really Work" by Uri Gneezy. (behavioralscientist.org)TechnologyWhat jobs are generative AI going to eliminate? (unchartedterritories.tomaspueyo.com)An awe inspiring visit to a state-of-the-art semiconductor fab. (wired.com)How Atari created the world’s most famous video game. (sfgate.com)MoneySingapore and Hong Kong are vying to be the wealth management center of Asia. (on.ft.com)A history of Kleiner Perkins and how its come out on the other side of a fallow period. (generalist.com)EntertainmentWhat it means to be an indie filmmaker in the age of the superhero movie. (esquire.com)Tom Wambsgans may have changed the most over the run of 'Succession.' (theringer.com)LongreadsSwitzerland's problems are bigger than UBS-Credit Suisse. (wsj.com)Why South Korean women are opting out of having children. (msn.com)A record number of migrants are dying on U.S. borders. (wsj.com)How Ozempic and Wegovy will change how we think about weight. (newyorker.com)The ocean is gobbling up houses along the North Carolina coast. (washingtonpost.com)Humans are breeding dogs into oblivion. (aeon.co)How loneliness reshapes the brain. (quantamagazine.org).....»»

In April 2001, a US spy plane and a Chinese jet collided over the South China Sea. Author James Bamford details the incident's lasting consequences. The crew of a US Navy EP-3 detained in China board a flight to Guam on April 12, 2001.US Marine Corps/Staff Sgt. John Giles On April 1, 2001, a US EP-3 spy plane collided with a Chinese fighter jet over the South China Sea. The US plane was forced to land at a Chinese base, giving China access to its sensitive hardware. Author James Bamford details US missteps throughout the incident and their lasting consequences. The following is an excerpt from James Bamford's new book, "Spyfail: Foreign Spies, Moles, Saboteurs, and the Collapse of America's Counterintelligence.""Spy Fail" by James Bamford.Twelve BooksSunrise was still a half-hour away and the temperature was just at the freezing mark when the lineman removed the blocks from the worn tires of the EP-3E ARIES II, a gray-and-white four-engine propjet with a donut-shaped "Big Look" radar attached to its lower belly. It was Sunday, April 1, 2001."Kilo Romeo 919," said a voice in the tower, "clear to taxi." Moments later the pilot, Navy lieutenant Shane Osborn, released the parking brake and eased the four power levers forward, his knuckles white. As the engines coughed blue-black exhaust fumes like a heavy smoker, the aircraft crawled slowly toward the runway on Okinawa's Kadena Air Base.One of eleven left in the fleet, the tired 1960s-era spy plane bristled with porcupine-like antennas. It would be a risky mission. Assigned to the NSA's Sensitive Reconnaissance Operations Program (SRO), the crew was scheduled to once again fly along the Chinese coast to update lists of signals, pick up a few conversations, and see if some ships or subs had moved from point A to point B or point C.It was intelligence overkill. In addition to its vast number of cyber spies at Fort Meade focused on China, the NSA also had the world's largest and most expensive fleet of spy satellites orbiting over the country every ninety minutes, as well as half a dozen expansive and costly listening posts stretching from northern Japan to South Korea to Okinawa. There, hundreds of agency operators sat with their ears constantly tuned to Chinese frequencies and their eyes scanning Chinese intercepts 24/7. And then just two miles from Kadena was the NSA's Hanza Remote Collection Facility, a massive electronic ear facing China, and scores of additional intercept operators. But within the intelligence bureaucracy, more spies mean more power for those in charge, whether they are needed or not. Hence the daily EP-3E patrols.At 4:47 a.m., the word came from the tower. "Wind 010 at eight [knots]. Cleared for takeoff." Osborn, a native Nebraskan with a dark receding hair-line and heavy caterpillar brows, moved the power levers forward again and placed his feet on the rudder pedals. Loaded with twenty-nine tons of jet fuel, the plane lumbered forward. Then as the airspeed indicators hit 133 knots, Osborn pulled back on the yoke and the aircraft's nose wheel lifted gently from Runway 4 Left.In addition to Osborn, there were five other members of the flight crew, including two more pilots; the three would take turns resting and flying. Behind them, in the near-windowless tubelike fuselage, eighteen analysts, eavesdroppers, and linguists hunched over racks of gray machines with blinking scopes and black dials that lined the long bulkhead on either side of the cabin. The mission was to monitor China's signals environment, especially their South Sea Fleet's tactical communications, radars, and weapon systems.Just aft of the door on the left side of the fuselage sat the Science and Technology (S&T) operator. His assignment that day was to collect and pro-cess signals associated with China's SA-10 surface-to-air missiles. According to top secret documents, this was done with one of the most highly classified computers on the plane, the SCARAB. Tall and boxy with a handle on top, it contained a unique processor code-named LUNCHBOX that was able to search and identify forty different worldwide weapons-related signals, code-named PROFORMA.A few seats away, another operator studied the screen of a black Tadpole Ultrabook IIi laptop. On it were some of the NSA's most highly secret pro-grams, including the RASIN (short for Radio Signals Notation) manual, the agency's bible. Listed inside were critical details about every signal in the world that NSA was intercepting. The laptop also contained MARTES, an ultrasensitive codebreaking program that deciphered enciphered Chinese voice communications.A US Navy EP-3E, assigned to Fleet Air Reconnaissance Squadron One, in an undated photo.ReutersShortly after takeoff, Osborn left the cockpit and entered the ops area. "It looks like good weather en route to the track orbit and back to Kadena," he told the crew. "Mission time is just over nine hours today." Back on the flight deck, he proceeded southwest, flying at 21,500 feet between Taiwan and the Philippines before following China's coastline on his SRO track past Hong Kong. A short time later he began approaching China's Hainan Island, home to the military's Lingshui Airfield, remaining about sixty miles off the coast.For almost a year, tensions over the US spy flights, about two hundred a year, had been building on the island, as well as in Beijing. In May 2000, Chinese military officers aired their complaints during a conference with their American counterparts in Honolulu. The annual meetings were established to discuss ways to avoid accidents at sea and in the air, and at the May meeting the Chinese officials made it very clear that the flights had become a growing problem.It was "the most important topic" at the meeting, one Chinese officer told the Washington Post at the time. The flights were approaching "too close to the coast, and it might cause trouble," he said, adding, "The atmosphere wasn't good." But the Americans paid little attention.It was an arrogant and belligerent stance for the United States to take since no American president would ever tolerate near-daily spy flights fifty miles off America's coasts by China, Russia, or any other country. Such flights are often viewed as a preparation for war. But rather than reduce the provocative flights, the NSA instead increased them from about two hundred a year to five days a week, even on Christmas Day. It was therefore less about collecting intelligence and more about flaunting power and flexing muscles.In response, on about every third mission Chinese fighters would conduct inspection flights, pulling up close and parallel with the American pilots and sometimes gesturing from the cockpit. The United States did basically the same thing on the very infrequent occasions that Russian aircraft flew near the US mainland. As the NSA's spy flights close to China increased, the Chinese fighter pilots became more aggressive, and the situation was becoming more and more dangerous.Nearly a half-century earlier, in 1956, another Navy reconnaissance aircraft was flying off China's coast when it suddenly had a confrontation with Chinese fighters. As a result, the plane crashed into the sea, killing all sixteen crew members on board. The incident shocked President Dwight Eisenhower. "We seem to be conducting something that we cannot control very well," he told Admiral Arthur M. Radford, then chairman of the Joint Chiefs of Staff, in a secret meeting. "If planes were flying 20 to 50 miles from our shores," Eisenhower continued, "we would be very likely to shoot them down if they came in closer, whether through error or not." Close-in airborne eavesdropping was dangerous business.As Osborn continued his mission off Hainan Island, the plane was on autopilot as it cruised over the South China Sea at 22,500 feet and about 180 knots. Outside the weather was clear, with seven-mile visibility and a broken cloud layer below at 15,000 feet. And in the operational spaces, the eavesdropping activity was light, with the interception of an occasional early warning radar and routine military communications. It was, after all, a Sunday, raising even more questions about the reasons for the costly and hazardous mission.But the morning quiet would soon be shattered. On Hainan Island at 8:48 a.m., technicians manning the regional air defense network spotted the aircraft and flashed the details to Lingshui Airfield, which sounded an alarm. Standing by in ready status in their dark blue aviator's uniforms, fighter pilots Wang Wei and Zhao Yu raced for their aircraft, single-seat J-8II Finback interceptors armed with Israeli Python air-to-air missiles. At Mach 2.2 and with a ceiling of almost 60,000 feet, they flew fast and high with improved avionics supplied by the United States in the late 1980s.A Chinese J-8 Finback flies near a US Navy aircraft on January 24, 2001.US Defense DepartmentWith the increase in spy flights came an increase in aggressive inspections. Since December there had been forty-four interceptions, with six coming within thirty feet, and two within ten feet. Wang Wei, a thirty-three-year-old PLAN (People's Liberation Army Navy) lieutenant commander from the silk city of Huzhou near Shanghai, had eleven hundred hours of flight time under his belt. He was also a veteran of another EP-3E inspection the previous January.As the alarm sounded at Lingshui Airfield, followed by the scramble for the jets, Chinese linguists in the EP-3E's ops spaces immediately picked up the activity. Through their earphones they could hear the ground controller, the pilot communication checks, the fighter pre-flight activities, and a takeoff sequence.Across the Pacific, in a World War II-era bombproof bunker beneath a pineapple field in Hawaii, NSA linguists and intercept operators were also listening intently to the activity at Lingshui. Part of an alert system for spy planes, code-named KNICKELBACK, analysts quickly sent out a warning to the reconnaissance plane. The expansive bunker, known as the Kunia Regional Sigint Operations Center, was the NSA's major Pacific listening post.At 8:51 the EP-3E acknowledged the warning via secure satellite communications, and four minutes later Osborn spotted the jets approaching about a half-mile out and climbing rapidly to his altitude. At the time, he was about seventy miles from Hainan Island, and with the mission coming to an end, he was preparing to return to Okinawa. Within minutes, however, the fighters had reached the lumbering spy plane, and while Zhao Yu hung back about a half-mile, Wang Wei rapidly closed in. "Hey, he's right off our wing," someone from the back end reported to Osborn. "He's tight, that's the closest I've seen!"In the ops spaces, Marcia Sonon was in an awkward crouched position. Searching for the Chinese fighters, she was looking out a small round window on the left side over the wing. A Navy lieutenant with bright red hair, she was the plane's COMEVAL, the communications intelligence (COMINT) evaluator. Reporting to her were the six COMINT operators on the right side of the aircraft. They focused on intercepting Chinese voice communications and the PROFORMA weapons-related signals."He's closing to three o'clock," she told Osborn. "He's definitely armed. I can see missiles on his wing. He's got his oxygen mask on." A moment later her calm tone turned tense and stressed. "He's getting really close! Fifty feet. Now he's about forty feet," she said, her voice rising. "Oh my God, he's coming closer! Right now he's about ten feet off our wing." Wang Wei rendered a salute, but Sonon couldn't make out what he meant. In the cockpit, Osborne looked right in his face. "This isn't good," he said. Then Wang Wei fell back about a hundred feet off the left wing.A minute later, Wang Wei had returned, this time closing to just five feet before making another gesture and dropping back again. Then a third approach, but this time he had difficulty slowing his fast interceptor to match the propjet's slow speed and suddenly he was directly below the EP-3E's left wing. In severe trouble, he immediately radioed the base, telling them he was unable to maneuver and being sucked in by the spy plane. Seconds later, his jet impacted the plane's left outboard propeller just forward of the J-8II's vertical stabilizer, tearing the tail off the Chinese aircraft and sending its nose crashing into the front of the EP-3E, which was then still on autopilot.Instantly Osborn felt the bang as a cloud of glittering debris exploded in front of the left wing and he heard what sounded like a monster chainsaw hacking through metal. Then, a fraction of a second later, as the jet hit the front of his plane, the EP-3E's fiberglass nosecone flew over the windscreen and metal fragments punctured the fuselage like machine-gun fire. Immediately there was an explosive decompression as screams filled the cockpit and the cabin."I was pretty certain we were dead at that point," said Osborn. "We were upside down in a large reconnaissance aircraft. I had lost my nose. I could hear the wind screaming through the plane, and I knew that number one prop was violently shaking. We were pretty much inverted. I was looking up at the ocean, so it was not a good feeling ... I thought twenty- four people were going to die in the middle of the ocean, and I wondered if anyone would know why."Secretary of Defense Donald Rumsfeld briefs reporters on the collision at the Pentagon on April 12, 2001.Mai/Getty ImagesAt that same moment, twenty-six-year-old Navy lieutenant junior grade John Comerford felt a shock wave rip down his spine. "I was scared," he later said. Tall, with a thick patch of carrot-colored hair, the 1997 Annapolis grad had been nicknamed by Osborn "Johnny Ballgame" because the two would have a good time on the weekends together. As the senior evaluator (SEVAL), he had overall responsibility for the reconnaissance personnel. "Honestly, based on how things felt—I didn't have a whole lot of visual reference—but based on how things felt, and the shaking of the plane, yeah, there was a time there that I really thought to myself, 'Wow, this guy—this guy just killed us.' "Flying behind the two planes in his J-8II, Zhao Yu witnessed the collision and frantically radioed Wang Wei. "Your plane's vertical tail has been struck off !" he yelled. "Remain stable, remain stable!" "Roger," Wang Wei replied, but about thirty seconds later Zhao Yu saw his partner's jet roll to the right side and plunge toward the South China Sea. Although Wang Wei managed to bail out, his parachute did not open in time and his body would never be found.By now the spy plane was out of control, gear crashing all around, a disintegrating number one engine hurling shrapnel, and horrified screams in the cockpit and the ops area as it began an inverted dive. Osborn instinctively swung the yoke hard right and jammed his foot on the right rudder pedal to regain control. But the dive angle steepened, and he was looking up at the sky instead of down at the choppy blue-black waves of the sea below.After the plane tumbled for about a mile and a half, Osborn shouted into the PA system, "Prepare to bail out!" In the ops area, the crew scrambled for their parachutes, survival vests, and helmets. But then he managed to bring the aircraft under partial control, and after falling another mile, he was able to regain full control, leveling off at 8,000 feet. Minutes later Osborn changed the order to prepare to ditch.At 9:13, eight minutes after the collision, copilot Jeff Vignery, a redheaded Kansan, put out an emergency call over the international distress frequency, 243.0 MHz. "Mayday! Mayday!" he shouted. "Kilo Romeo 919! We are going down!" It was then 8:13 p.m. in Washington, but despite all of its eavesdropping assets, the NSA never received the emergency call because even during sensitive reconnaissance missions it never bothered to monitor the international distress frequencies. Nor were the communications in the ops spaces any better. Moments after the collision, the secure communications operator attempted repeatedly to transmit the two-word message "GOING DOWN" on a secure network for reconnaissance operations. Code-named Sensor Pace, it was a low-data-rate digital satellite network, but the message was never received.Finally, the navigator began repeatedly transmitting Mayday calls on another secure satellite system, the Pacific Tributary Network, and at least one transmission was eventually received by both the NSA's Kunia bunker in Hawaii and the agency's Special Support Activity at Fort Meade. Part of the agency's National Security Operations Center, the SSA instantly sent out a top secret CRITIC message. Reserved for the highest emergencies, or indications of war, CRITICs (for Critical Intelligence) are designed to immediately alert the president and top government officials to a major event.Within minutes, the SSA watch commander set up a special high-level conferencing system known as a NOIWON (National Operational Intelligence Watch Officer's Network) bringing together the crisis centers at the White House, CIA, Pentagon, State Department, and NSA. Other discussions were conducted over a watch officers' secure chat room known as ZIRCON chat. In concert with the National Reconnaissance Office, eavesdropping and imaging satellites were steered toward the crisis area.On board the aircraft, there were only bad and worse choices. No one had ever bailed out of an EP-3E, and because of the damage there was a good possibility of the jumpers smashing into the tail. And even if they made it to the sea beneath their parachutes, the twenty-four crew members would be scattered over a wide distance in shark-infested waters. There was a life raft, but because of the airspeed, it would land far from the survivors. Ditching into the sea, however, was an even worse idea. Because of the lack of control, and the bulbous doughnut- shaped Big Look radar on the bottom, the plane would likely flip nose down and immediately sink.A Lockheed Martin team prepares the damaged EP-3E for return to the US at China's Lingshui Airfield on June 18, 2001.Mai/Getty ImagesFinally, Osborn gained partial control of the aircraft, which gave him a third choice: Make for the nearest land. But that was Hainan Island, their eavesdropping target. Thus they would be handing Chinese intelligence an entire NSA spy plane filled bulkhead to bulkhead with top secret coding and crypto equipment, intercept gear, and a library of highly sensitive documents, most classified above top secret. Nevertheless, between losing secrets or lives, Osborn chose in favor of saving the crew and turned toward Hainan's Lingshui Airfield. "Activate the emergency destruction plan," he yelled over the PA, assuming there was such a plan.In the ops spaces, it was chaos, with no one in charge and no coherent method to the destruction. Despite the fact that NSA spy planes flew almost daily missions along hostile borders, there was no guidance or procedures on what to do in an emergency if it was necessary to divert to the target country. Nor had there ever been training on how to destroy a planeload of NSA secrets in flight. These were just further blunders by NSA director Michael Hayden, who was in charge of the airborne missions under his dual role as chief of the Central Security Service, the military side of NSA. He was about to hand the Chinese an entire flying listening post packed with the nation's highest secrets.Much of the blame for the chaos, compromise of material, and lack of training also fell on Osborn and the plane's signals intelligence officers, according to a top secret NSA damage assessment. "The aircrew's overall performance in safeguarding classified materials under their charge was poor," it said, citing "a general lack of training, practice in emergency destruction, capabilities, and sound policy."LTJG John Comerford, the senior evaluator, was in charge of the NSA's signals intelligence personnel in the back end and therefore responsible for overseeing the emergency destruction of the critical documents and equipment. But according to the NSA report, rather than supervise the destruction, he instead "isolated himself from knowledge of actions taking place in the rest of the cabin. As a result, he had no situational awareness of the status and scope of emergency destruction and was unable to effectively monitor and direct the actions of the crew." Wielding a fire ax, he began smashing equipment and dumping material out a hatch, but paid little attention to directing an organized destruction effort.Also, inexplicably, he never bothered to tell the crew that rather than ditching in the South China Sea they were going to land on Hainan Island. Therefore, many crew members simply stood by the door preparing to exit rather than taking part in the emergency destruction. Others found the task overwhelming due to the lack of direction and the fact that the plane was overstuffed with reams and reams of top secret documents. Many of the documents were useless, unnecessary, and never should have been brought aboard. And while the ax was used to damage some laptop computers, left unharmed were the internal hard drives containing the sensitive data. Similarly, with the racks of highly sensitive intercept equipment along the aircraft's bulkheads, crew members smashed the keyboards and display screens but left such critical system components as tuners and signal processors unscathed.Among those Comerford failed to inform about the landing in China was Lieutenant Marcia Sonon, the COMINT evaluator in charge of the voice intercept crew. Assuming the plane was going to ditch, instead of destroying or jettisoning all the highly sensitive COMINT materials, the crew simply packed them in locking leather satchels and, along with the highly sensitive MARTES laptop computer, stored them in a cabinet.US Navy EP-3E crew members wait to depart China on April 12, 2001.Mai/Getty ImagesIt was a short flight to Lingshui, but despite numerous Mayday calls and requests for assistance on an international distress frequency (243.0 MHz), there was no response from the Chinese airfield's controllers. No one, however, bothered to contact the airfield on its own frequency even though members of the crew had that information.Nevertheless, after a pass over the runway, flying low over orange roofs, swaying palm trees, rice fields, and an operations tower blackened with mildew, Osborn touched down. It was 9:34 in the morning, twenty-nine minutes after the collision. As he tapped the brakes with his flight boots to slow the aircraft down, ahead of him on the runway he saw a thin lineman in sandals directing the aircraft to the edge of the runway. Once the plane came to a stop, it was surrounded by about two dozen military personnel, six to eight of them armed with AK-47 assault rifles, though none were pointed at the aircraft.At 9:41, over secure satellite communications, Comerford reported to the NSA's SSA, the Kunia bunker, and the Pacific Reconnaissance Operations Center in Hawaii. "On deck at Lingshui," he said. He then told Osborn his orders were to stay put as they evaluated the situation. "They want us to hold on a few minutes," Comerford said. Instead, before awaiting instructions or passing on any information about the collision, the status of the classified information, or their situation, Osborn ordered the plane's power turned off, thereby eliminating any chance of further communications with NSA or the outside world.Moments later, in the ultimate absurdity, the first thing Osborn did was to ask a PLA officer for his cell phone to call NSA headquarters. "Can I use your phone to make a call?" he said, standing in the doorway. "I have to tell my command that we are safe.""That is not possible," the officer said. "We will take care of that. Do not worry."Ordered off the plane, Osborn at first resisted and then turned to Comerford. "Hey, Ballgame. It's time to get off.""Okay, you're right," said Comerford, and he lowered the door's folded ladder.Once everyone was off the plane, the PLA officer headed for the ladder."You are not allowed aboard the aircraft," Osborn said. "It's American property.""It's okay, we'll guard it for you," said the officer, no doubt laughing to himself.From the plane, the crew was escorted to a bus where they waited, drinking bottled water and smoking packs of Bao Dao cigarettes, filling the air with thick gray smoke."Everything did go alright in the backend, right?" Osborn asked Comerford."Everything's good back there," he replied, seemingly oblivious to the inadequate emergency destruction that had taken place. Although the plane had an emergency action plan, neither Comerford nor anyone else ever consulted it."Notwithstanding the chaotic circumstances on the aircraft following the collision," the top secret NSA damage assessment noted, "we conclude that the crew had sufficient time to jettison all sensitive materials ... The incident revealed a systemic complacency regarding policy, planning, and training support to EP-3E SRO missions."A satellite photo the US Navy EP-3 at Lingshui Airfield on Hainan Island on April 4, 2001.Getty ImagesThe report also pointed a finger directly at the NSA's leadership, including Director Hayden. "No specific guidance existed regarding Mission Commander or aircrew actions should an SRO aircraft be forced or, through emergency, be required to land in the PRC," it said. It added, "Crew training for emergency destruction was minimal and did not meet squadron requirements; this deficiency was the primary cause of the compromise of classified material."For the next eleven days, until their release, the crew was treated well, housed first in a military barracks and then in a simple hotel. They were questioned about the cause of the midair collision while Washington and Beijing worked out agreements for their return. But while the crew was eating rice, seaweed, and chicken feet, Chinese signals intelligence specialists were studying the top secret documents and dissecting the equipment on the spy plane as if it were an alien spacecraft. It was an enormous intelligence windfall.Because Lieutenant Marcia Sonon, the COMINT evaluator, was never informed by Comerford of the plan to land in China, all of the highly secret communications interception computers, equipment, and documents were neatly stowed in cabinets rather than destroyed or thrown into the sea. This gave Chinese intelligence an incredible insight into the NSA capabilities against their country.Among the undamaged computers were the two most sensitive on the aircraft, according to the NSA's report. "The most potentially damaging compromised items were the carry-on LUNCHBOX PROFORMA processor," it said, "and a laptop computer with MARTES software tools for collecting, analyzing, and processing signals. The aircraft also had an extensive inventory of SIGINT documentation in both hardcopy and electronic media."What most concerned NSA on the MARTES computer was the RASIN manual, RASIN Working Aid, and associated material. This was the agency's index of every signal they were targeting in China, Russia, and everywhere else in the world. "Together, the RASIN manual and aforementioned files provided a comprehensive overview of how the U.S. Cryptologic System exploits an adversary's signal environment," said the report.Ultimately, the damage went well beyond China itself to other adversaries. "The aircraft carried significant technical data on target nations such as Russia, North Korea, and Vietnam," the report said. This included "Russian-designed PROFORMA [weapons-related] signals used by North Korea, Russia, Vietnam, and possibly the PRC," as well as "PROFORMA data for nearly 50 nations." It added, "The Electronic Order of Battle (EOB) database car-ried on the EP-3E provided information on the location, number, and type of radars worldwide."Still other documents revealed the fact that the NSA was able to spy on the PLA Navy's Submarine Launched Ballistic Missile program, locate its submarines, and eavesdrop on their communications. They could now change their communication methods and develop better ways to successfully hide.A magazine cover featuring pilot Wang Wei at a newsstand in Beijing on April 17, 2001.ReutersCompromises also included the Intercept Tasking Database and Collection Requirements. It outlined all the key targets in China the agency was interested in, and even details on a new communications system the PLA had yet to deploy. The PLA also got near-complete access to the plane's electronic intelligence systems. "Emergency destruction of the installed ELINT equip-ment by the crew was largely ineffective," said the report. A further problem for the NSA was the fact that the inventory of classified materials aboard, left by the EP-3E crew in Kadena before they departed "was not accurate, detailed, or verified." Therefore, no one knew just what was on the plane and what might have been compromised.The aircraft was also loaded down with encryption devices, cryptographic keys, and entire codebooks, some for a month in advance. Much of it, said the report, was "in excess of what was needed for the mission." Sixteen cryptographic keys and codebooks as well as sixteen cryptographic devices were left on board undamaged. Other keying materials were simply torn and left in the plane. "The PRC would probably be able to reconstruct the key tape," it said.With keys and devices in hand, and the right technical ability, the Chinese had fifteen hours to decipher highly secret communications across the Pacific before the NSA was able to distribute new keys worldwide, an enormous intelligence coup. The compromised materials also "might enable PRC SIGINT units to decrypt limited U.S. Pacific area encrypted transmissions for 31 March and 1 April," said the report. The crypto devices proved unique prizes. "There is strong evidence that the PRC has aggressively sought to obtain these equipments," said the report. One reason might be that they already had a source who could supply them with keying materials on a regular basis.The ramifications of the EP-3E disaster would be enormous and have a long- range and very detrimental legacy for the United States. In 2019, the Chinese government credited the incident that took Wang Wei's life with being the catalyst to spur the country's military modernization."His death was an accident, but it set off many changes," said Beijing- based military expert Zhou Chenming. "What happened 18 years ago spurred China to step up the modernization of its military, especially aircraft development for the air force and navy." Beijing-based naval expert Li Jie agreed. "The 2001 crash taught China a lesson—that a strong country cannot rely on a vibrant economy alone but also needs a strong military. That's what they refer to as 'comprehensive national strength.'"Equally serious, the EP-3E incident provided China with an enormous capability to discover exactly what successes the NSA had been able achieve over the years and decades. Now they knew which codes they had broken and which targets they were intercepting, giving Chinese intelligence the ability to modify the systems and plug the NSA's ears for years or decades to come.Next, they were determined to do the same with the CIA's human spies, to find them and eliminate them with a bullet or a jail cell. And following a secret meeting in Hong Kong a week before the crash, they were off to a very good start.READ NEXT: How China planted an FBI mole who was discovered only after gutting the CIA's vast spy networkJames Bamford, a winner of the National Magazine Award for reporting, is the best-selling author of "The Puzzle Palace," "Body of Secrets," and other books on intelligence. His most recent book, from which this excerpt was taken, is "Spyfail: Foreign Spies, Moles, Saboteurs, and the Collapse of America's Counterintelligence," released on January 17.Excerpted from "Spyfail: Foreign Spies, Moles, Saboteurs, and the Collapse of America's Counterintelligence." ©2022 James Bamford and reprinted by permission from Twelve Books/Hachette Book Group.Read the original article on Business Insider.....»»

Good morning, Boston. Happy World Poetry Day. Here are the five things you need to know in Boston business news to start your Tuesday. Amazon to cut 9,000 more Amazon.com Inc. will eliminate about 9,000 more roles, affecting teams in its highly profitable cloud division, CEO Andy Jassy told employees Monday in a publicly posted message. The layoffs are in addition to the 18,000 jobs the company cut in January, Lucy Maffei reports. Tavern in the Square, Shake Shack to open first N.H. locations Tuscan….....»»

House Republicans want to freeze federal spending at 2022 levels for the next 10 years. The White House says that will be devastating for families. Rep. Scott Perry (R-PA) speaks during a news conference with members of the House Freedom Caucus outside the U.S. Capitol on February 28, 2022 in Washington, DC.Drew Angerer/Getty Images The House Freedom Caucus unveiled a plan to address the debt ceiling through major spending cuts. The White House launched a campaign attacking the plan on Monday, saying it would be disastrous for families. The plan would cap future spending at the 2022 enacted level for a decade. The White House is sounding a "five-alarm fire" over House Republicans' plan to pare back on the federal budget.In a release, the White House said that they're joining forces with Congressional Democrats to go on the offense as House Republicans head to Florida for their retreat. Their offensive maneuver: Calling out five ways that they believe the plan will be a "disaster" for Americans.Specifically, the White House is hitting out at how the proposal would weaken public safety and national security, according to a White House official. Per that official, analyses from agencies and the Office for Management and Budget show that the proposal would have five big impacts: It would lead to higher costs for families; export manufacturing jobs; endanger public safety; weaken national security; and mandate cuts for Medicare, leaving seniors in the lurch."The Freedom Caucus's devastating cuts to families' budgets and American priorities would not reduce the deficit because they would just go toward paying for MAGA House Republicans' $3 trillion in tax cuts skewed to the wealthy and large corporations," a White House official said in a statement to Insider.Two weeks ago, the House Freedom Caucus unveiled its plan to address the debt ceiling through major spending cuts. The plan, called "Shrink Washington, Grow America," would raise the debt ceiling — only if Congress passed legislation that would cut major programs like student-debt relief, rescind unspent COVID-19 funds, and recoup IRS and climate spending.The Caucus' plan would cap future spending at the 2022 level for ten years, which it said will "cut $131 billion in FY2024 and save roughly $3 trillion over the long term by cutting the wasteful, woke, and weaponized federal bureaucracy."The White House in its fact sheet cited a Congressional Budget Office analysis last week that found that in order to balance the budget without raising taxes on the wealthy and preserve Medicare and Social Security, "Congressional Republicans would need to eliminate everything in the rest of the Federal budget."An analysis from the Committee for a Responsible Federal Budget (CRFB) found that all government spending would need to be cut by 27% to actually balance the budget over the next decade. If you take tax increases, defense spending, Social Security, and Medicare off the chopping block, it would require 78% of all spending to be cut. Additionally, House Appropriations Ranking Member Rosa DeLauro released responses from the leaders of federal agencies on Monday regarding the impact capping spending at the 2022 level would have on their operations. She said in a statement that the plan would "cause irreparable damage to our communities by gutting the programs every single American relies on. Those proposals are unrealistic, unsustainable, and unconscionable."She said that families would lose nutritional assistance, childcare, and financial aid — among many other things — should the GOP proposal go through.In response to the White House attack on its plan, the House Freedom Caucus wrote on Twitter that "Biden is attacking HFC because we proposed a real plan to cut spending and address the debt ceiling." —House Freedom Caucus (@freedomcaucus) March 13, 2023 "It should shock no one that financially responsible proposals terrify and confuse this administration," it wrote. Read the original article on Business Insider.....»»

Amazon announced another headcount cut after slashing 18,000 jobs in January as waves of layoffs hit tech companies and spread to other industries. In a memo sent to employees on Monday, Amazon's CEO Andy Jassy said the company would be eliminating 9,000 positions from its ranks.Mike Blake/Reuters Amazon, Meta, and Twitter employees are the latest to be hit by a wave of layoffs. Over the past few months, layoffs have expanded outside of tech, media, and finance as Dow and 3M announced cuts. See the full list of layoffs so far in 2023. A wave of layoffs that hit dozens of US companies toward the end of 2022 shows no sign of slowing down into 2023. On Monday, e-commerce behemoth Amazon told employees that it would be eliminating 9,000 roles, which comes on top of the 18,000 job cuts it announced earlier this year. In a message to employees CEO Andy Jassy said, "Some may ask why we didn't announce these role reductions with the ones we announced a couple months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible."Amazon joins a large group of major corporations that have made significant cuts in the new year: tech companies, including Meta and Google, and finance behemoths, like Goldman Sachs, announced massive layoffs in the first weeks of 2023 amid a continued economic downturn and stagnating sales.The downsizing followed significant reductions that companies including Meta and Twitter already made last year. The layoffs have primarily affected the tech sector, which is now hemorrhaging employees at a faster rate than at any point during the pandemic, the Journal reported. According to data cited by the Journal from Layoffs.fyi, a site tracking layoffs since the start of the pandemic, tech companies slashed more than 150,000 in 2022 alone — compared to 80,000 in 2020 and 15,000 in 2021. Here are the notable examples so far in 2023: Amazon: 9,000 more jobsAmazon CEO Andy Jassy announced on Monday that the company would be eliminating another 9,000 roles, on top of the 18,000 announced in January.Richard Brian/ReutersOn Monday, Amazon announced that it would be cutting 9,000 jobs from its workforce over the coming weeks. The cuts come on the heels of the 18,000 roles the company announced it was cutting back in January. In a message to employees shared on Amazon's site, CEO Andy Jassy noted that the impacted positions are largely in the Amazon Web Services, People Experience and Technology Solutions, Advertising, and Twitch departments. In the memo, Jassy said the company staggered its layoff announcements because "not all of the teams were done with their analyses in the late fall." He added, "rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible."Meta: 10,000 workersMeta CEO Mark ZuckerbergMark Lennihan/APRoughly 10,000 Meta workers will find out that their jobs have been cut between March and May, according to an announcement by the company's founder and CEO, Mark Zuckerberg. Zuckerberg also said the company would close around 5,000 open roles that haven't yet been filled as part of the company's effort to downsize. "My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead," Zuckerberg wrote in a post on Facebook announcing the layoffs. In the post, Zuckerberg said that members of Meta's recruiting team would learn about the fate of their jobs in March, while tech workers would find out in late April, and business groups would find out in May. "In a small number of cases, it may take through the end of the year to complete these changes," he wrote. The job cuts come less than 5 months after Meta slashed 11,000 workers, or about 13% of its workforce, in November. At the time, Zuckerberg called the layoffs a "last resort."  SiriusXM: 475 rolesJennifer Witz, CEO of SiriusXM said the company was cutting 475 roles on March 6.Cindy Ord / Staff/ Getty ImagesThe radio company said March 6th that it was cutting 8% of its staff or 475 roles according to a statement posted on the company's website from CEO Jennifer Witz.In the statement, Witz said "nearly every department" across the company will be impacted. She also noted that those impacted will be contacted directly and will have the opportunity to speak with a leader from their department as well as a member of the company's People + Culture team. Impacted employees will also be provided with exit packages that include severance, transitional health insurance benefits, Employee Advocacy Program continuation, and outplacement services, Witz noted.Citigroup: hundreds of jobsCiti CEO Jane FraserPatrick T. Fallon/AFP via Getty ImagesCiti plans to cut hundreds of jobs, with many focused on the company's investment bank division. The total headcount cut will reportedly amount to less than 1% of Citi's more than 240,000 workers and are part of Citi's normal course of activities.Citi's cuts were first reported by Bloomberg. In January, Citi's CFO told investors the company remained "focused on simplifying the organization, and we expect to generate further opportunities for expense reduction in the future."Citi declined Insider's request to provide comment on the record. Waymo: reported 209 roles so farWaymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 8% of the unit's staff has been cut this year.Peter Prado/Insider; Vaughn Ridley/Sportsfile via Getty ImagesAlphabet's self-driving car unit Waymo has reportedly laid off a total of 209 employees this year in two rounds of cuts, according to The Information. Waymo reportedly laid off 137 employees on March 1, according to The Information. Waymo's co-CEOs Tekedra N. Mawakana and Dmitri Dolgov reportedly told employees that 209 employees— approximately 8% of the company's staff— have been cut this year, according to an internal email seen by The Information.Waymo did confirm the cuts to Insider but did not specify the number of roles impacted or the date the first round of cuts ocurred.  Thoughtworks: reported 500 employeesThoughtworks laid off 500 employees on February 28. That day, CEO Guo Xiao said in the company's earnings release that it was "pleased" with its performance in the fourth quarter of 2022.Screenshot of Guo Xiao from the Thoughtworks website.Thoughtworks, a software consultancy firm, reportedly laid off 500 employees or 4% of its global workforce, according to TechCrunch. TechCrunch noted that the company "did not dispute" the figure when reached for comment on March 1. According to TechCrunch, Thoughtworks "initially informed" the affected employees about the decision on February 28. That same day, Thoughtworks reported that its revenue had increased 8.3% between the fourth quarter of 2022 and the fourth quarter of 2021. The company also reported a more than 21% year over year revenue increase for 2022. In the company's earnings release, Thoughtworks' CEO Guo Xiao said, "We are pleased with our performance in the fourth quarter and our clients continue to look to us to help them navigate these uncertain times and tackle their biggest technology challenges."General Motors: reported 500 salaried jobsGM CEO Mary Barra.Patrick T. Fallon/Getty ImagesGeneral Motors plans to cut 500 executive-level and salaried positions, according to a report from The Detroit News. The layoffs come only one month after CEO Mary Barra told investors and reporters on the company's earnings call, "I do want to be clear that we're not planning layoffs." In a memo to employees, seen by Insider, GM's chief people officer wrote, "we are looking at all the ways of addressing efficiency and performance. This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration." Employees who are getting laid off were informed on Feb. 28. General Motors confirmed the layoffs to Insider but did not confirm a specific number of employees getting cut. Twitter: about 200 employeesElon Musk is Twitter's CEO and ownerREUTERS/Jonathan ErnstThe layoffs reportedly haven't stopped at Twitter under Elon Musk. The social media company reportedly laid off 200 more employees on a Saturday night in late February, according to the New York Times. Some workers reportedly found out they had lost their jobs when they couldn't log into their company emails.Musk laid off 50% of Twitter's workforce in November after buying the company for $44 billion. Yahoo: 20% of employeesSOPA Images / Getty ImagesYahoo announced it will eliminate 20% of its staff, or more than 1,600 people, as part of an effort to restructure the company's advertising technology arm, Axios reported on February 9.Yahoo CEO Jim Lanzone told Axios that the cuts are part of a strategic overhaul of its advertising unit and will be  "tremendously beneficial for the profitability of Yahoo overall."    Disney: 7,000 jobsBob Iger, CEO of DisneyCharley Gallay/Stringer/Getty ImagesFresh off his return as Disney CEO, Bob Iger announced February 8 that Disney will slash 7,000 jobs as the company looks to reduce costs. Iger, who returned to the position in November 2022 to replace his successor Bob Chapek after first leaving in 2020, told investors the cuts are part of an effort to help save an estimated $5.5 billion. "While this is necessary to address the challenges we are facing today, I do not make this decision lightly," Iger said. "I have enormous respect and appreciation for the talent and dedication of our employees worldwide and I am mindful of the personal impact of these changes."DocuSign: 10%Igor Golovniov/SOPA Images/LightRocket/Getty ImagesDocuSign plans to slash 10% of employees as part of a restructuring plan "designed to support the company's growth, scale, and profitability objectives," the electronic signature company wrote in a Securities and Exchange Commission filing on Feb. 16. The company said the restructuring plan is expected to be complete by the second quarter of fiscal 2024, per the filing. Affirm: 19% of its workforceAffirm co-founder and CEO Max LevchinAffirmAffirm announced on February 8 it plans to slash 19% of its workforce, after reporting declining sales that missed Wall Street expectations. Affirm co-founder and CEO Max Levchin said in a call with investors that the technology company "has taken appropriate action" in many areas of the business to navigate economic headwinds, including creating a "smaller, therefore, nimbler team.""I believe this is the right decision as we have hired a larger team that we can sustainably support in today's economic reality, but I am truly sorry to see many of our talented colleagues depart and we'll be forever grateful for their contributions to our mission," he said.  GoDaddy: 8% of workersGoDaddy's CEO Aman Bhutani in September 2019Don Feria/Invision/AP ImagesGoDaddy, the website domain company, announced on February 8 it will cut 8% of its global workforce. "Despite increasingly challenging macroeconomic conditions, we made progress on our 2022 strategic initiatives and continued our efforts to manage costs effectively," GoDaddy CEO Aman Bhutani wrote in an email to staffers."The discipline we embraced was important but, unfortunately, it was not sufficient to avoid the impacts of slower growth in a prolonged, uncertain macroeconomic environment."Zoom: 15% of staffZoom CEO Eric Yuan.AP Photo/Mark LennihanZoom CEO Eric Yuan announced in a memo to workers that the company would reduce its headcount by 15%, or about 1,300 employees, on February 7. He attributed the layoffs to "the uncertainty of the global economy and its effect on our customers" but also said the company "made mistakes" as it grew. "We didn't take as much time as we should have to thoroughly analyze our teams or assess if we were growing sustainably toward the highest priorities," Yuan said. In the memo, Yuan also announced that he would cut his salary by 98% in 2023 and forgo his corporate bonus. In addition, other members of the executive leadership team will also reduce their base salaries by 20% this year, according to Yuan. eBay: 500 jobseBay CEO Jamie Iannone told employees Tuesday that the company would be eliminating 500 roles.Harry Murphy/Sportsfile for Web Summit via Getty ImagesOn Tuesday, e-commerce giant eBay told employees that it would be eliminating 500 roles, or about 4% of its workforce, according to a message included in a regulatory filing on Tuesday. In the message, CEO Jamie Iannone wrote "Today's actions are designed to strengthen our ability to deliver better end-to-end experiences for our customers and to support more innovation and scale across our platform."He added, "this shift gives us additional space to invest and create new roles in high-potential areas — new technologies, customer innovations and key markets — and to continue to adapt and flex with the changing macro, ecommerce and technology landscape." Dell: 5% of workforceDell is eliminating approximately 5% of its workforce. The company's co-chief operating officer Jeff Clarke told employees in a memo, "market conditions continue to erode with an uncertain future."Kevork Djansezian / Staff/Getty ImagesOn February 6, Dell said in a regulatory filing that it would be eliminating about 5% of its workforce. The percentage amounts to approximately 6,650 roles based on numbers that Dell provided Insider. In a memo sent to employees posted on Dell's website, co-chief operating officer Jeff Clarke, said "market conditions continue to erode with an uncertain future." He also noted in the memo that the company had paused hiring, limited employee traveling, and decreased spending on outside services. He added, however, "the steps we've taken to stay ahead of downturn impacts – which enabled several strong quarters in a row – are no longer enough."Pinterest: 150 jobsBen Silbermann is the founder and executive chair of Pinterest. He was the company's CEO until June 2022.Horacio Villalobos/Getty ImagesPinterest said it would cut 150 workers, or less than 5% of its workforce, on February 1, the company confirmed to Insider.  "We're making organizational changes to further set us up to deliver against our company priorities and our long-term strategy," a company representative said.The social media company was recently the target of activist investor Elliott Management, agreeing to add one of the firm's representatives to its board last month.   Rivian: 6% of jobsRivian CEO RJ Scaringe.Carlos Delgado/Associated PressRivian's CEO RJ Scaringe announced the EV company would cut 6% of its workforce in a memo to employees, the company confirmed to Insider. This is the company's second round of job cuts in the last 6 months after Scaringe announced a separate 6% workforce reduction in July 2022. In his memo to staff, Scaringe said Rivian needs to focus its resources on ramping up production and reaching profitability. BDG Media: 8% of staffScreengrab of Gawker's homepageGawkerBDG Media announced on February 1 that it was shutting down pop-culture site Gawker and laying off 8% of its staff, according to Axios. BDG owns Bustle, Elite Daily, and other lifestyle and news websites. "After experiencing a financially strong 2022, we have found ourselves facing a surprisingly difficult Q1 of 2023," CEO Bryan Goldberg wrote in a memo to staff seen by Axios. Splunk: 325 jobsGary Steele took over as Splunk's CEO in April 2022.YouTube/ProofpointSoftware and data platform Splunk is the latest in a long list of tech companies to announce layoffs in recent months. On February 1, the company said it would lay off 4% of its staff and scale back the use of consultants to cut costs, according to a filing viewed by Insider. The layoffs will reportedly be focused on workers in North America, and CEO Gary Steele told employees Splunk would continue to hire in "lower-cost areas."Intel: 343 jobsIntel CEO Pat Gelsinger.Pool Eric Lalmand/Getty ImagesIntel notified California officials per WARN Act requirements it plans to layoff 343 workers from its Folsom campus, local outlets reported on January 30. "These are difficult decisions, and we are committed to treating impacted employees with dignity and respect," Intel said in a statement to KCRA 3, noting that the cost-cutting comes as the company is faces a "challenging macro-economic environment." On February 1, the company announced CEO Pat Gelsinger will take a 25% pay cut, while other members of the executive team will take salary reductions in amounts ranging from 5% to 15%.  FedEx: more than 10% of top managersFedEx workers in New York City on March 16, 2021.Alexi Rosenfeld/Getty ImagesFedEx informed staffers on February 1 it plans to slash more than 10% of top managers in an effort to reduce costs.  "This process is critical to ensure we remain competitive in a rapidly changing environment, and it requires some difficult decisions," CEO Raj Subramaniam wrote in a letter to staff, which was shared with Insider's Emma Cosgrove. While the exact number of employees impacted was not specified, a FedEx spokesperson told Insider that since June 2022 the company has reduced its workforce by more than 12,000 staffers through "headcount management initiatives." "We will continue responsible headcount management throughout our transformation," the spokesperson said. PayPal: 7% of total workforceDan Schulman, president and CEO of PayPal announced that the company would be cutting 7% of its total workforce on January 31.PaypalPayPal announced on January 31 that it plans to cut 2,000 workers or approximately 7% of the company's total workforce over the coming weeks. In a statement announcing the layoffs on PayPal's website, CEO and president Dan Schulman cited the "challenging macro-economic environment." He added, "While we have made substantial progress in right-sizing our cost structure, and focused our resources on our core strategic priorities, we have more work to do."HubSpot: 7% of staffYamini Rangan is HubSpot's CEO.Matt Winkelmeyer/ Getty ImagesHubSpot's CEO Yamini Rangan announced that the company would lay off 500 workers, according to an email seen by Insider. "We came into 2022 anticipating growth would slow down from 2021, but we experienced a faster deceleration than we expected. The year was challenging due to a perfect storm of inflation, volatile foreign exchange, tighter customer budgets, and longer decision making cycles," Rangan wrote to employees. IBM: 1.5% of staffIBM's CEO Arvind KrishnaBrian Ach / Stringer / Via GettyIBM plans would cut 1.5% of its staff, roughly 3,900 workers. The layoffs were first reported by Bloomberg but confirmed by Insider.The company said the cuts would cost IBM about $300 million and is related entirely to businesses the company has spun off. Bloomberg reports that CFO James Kavanaugh said the company is still hiring in "higher-growth areas." Hasbro: 15% of workersA Jenga game by Hasbro Gaming.Thomson ReutersHasbro reportedly plans to cut 1,000 workers after warning that the 2022 holiday season was weaker than expected, according to the toy and game company. The company said the layoffs come as it seeks to save between $250 million to $300 million per year by the end of 2025. "While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses," Chris Cocks, Hasbro's CEO said. Dow: 2,000 global employeesThe Dow Chemical logo is shown on a building in downtown Midland, home of the Dow Chemical Company corporate headquarters, December 10th, 2015 in Midland, MichiganBill Pugliano/Getty ImagesDow Inc. announced on January 26 that it will lay off 2,000 global employees, a move that indicates mass layoffs are spreading beyond just the technology sector, the Wall Street Journal reported. It's part of a $1 billion cost-cutting effort intended to help amid "challenging energy markets," Dow CEO Jim Fitterling said in a press release. The chemical company also  will shut down select assets, mostly in Europe, per the release."We are taking these actions to further optimize our cost structure and prioritize business operations toward our most competitive, cost-advantaged and growth-oriented markets, while also navigating macro uncertainties and challenging energy markets, particularly in Europe," Fittlering said.   SAP: Up to 3,000 positionsSAP CEO Christian KleinULI DECK/POOL/AFP via Getty ImagesSoftware company SAP said on January 26 it will slash up to 3,000 jobs globally in response to a profit slump, with many of the cuts coming outside of its headquarters in Berlin, the Wall Street Journal reported.  The layoffs will impact an estimated 2.5% of the company's workforce and are part of a cost-cutting initiative aiming at reaching an annual savings of $382 million in 2024, according to the Journal. "The purpose is to further focus on strategic growth areas," said Luka Mucic, SAP's chief financial officer, per the Journal.   Spotify: 6% of the workforceDaniel Ek, Spotify cofounder and CEOGreg Sandoval/Business InsiderIn a memo to Spotify employees, CEO Daniel Ek said the company would cut 6% of its staff, about 600 people. "While we have made great progress in improving speed in the last few years, we haven't focused as much on improving efficiency. We still spend far too much time syncing on slightly different strategies, which slows us down. And in a challenging economic environment, efficiency takes on greater importance. So, in an effort to drive more efficiency, control costs, and speed up decision-making, I have decided to restructure our organization," he wrote. As part of the changes, Dawn Ostroff, the company's chief content and advertising officer, who spent more than $1 billion signing exclusive podcast deals with Joe Rogan, the Obamas, and Prince Harry and Meghan Markle, has departed. 3M: 2,500 jobs cut3M3M, which makes Post-It notes, Scotch tape, and N95 masks, said it plans to cut 2,500 manufacturing jobs worldwide. CEO Mike Roman called it "a necessary decision to align with adjusted production volumes." "We expect macroeconomic challenges to persist in 2023. Our focus is executing the actions we initiated in 2022 and delivering the best performance for customers and shareholders," he said in a press release. Google: around 12,000 employeesBrandon Wade/ReutersSundar Pichai, CEO of Google parent company Alphabet, informed staffers on January 20 that the company will lay off 12,000 employees, or 6% of its global workforce. In a memo sent to employees and obtained by Insider, Pichai said the layoffs will "cut across Alphabet, product areas, functions, levels and regions" and were decided upon after a "rigorous review." Pichai said the company will hold a townhall meeting to further discuss the cuts, adding he took "full responsibility for the decisions that led us here" "Over the past two years we've seen periods of dramatic growth," Pichai wrote in the email. "To match and fuel that growth, we hired for a different economic reality than the one we face today." Vox: 7% of staffThe layoffs were reportedly announced in a memo from CEO Jim Bankoff.Vox MediaVox Media, the parent company of publications like Vox, The Verge, New York magazine, and Vulture, is laying off roughly 133 people, or 7% of its staff, according to a report by Axios. The cuts come just a few months after the media company laid off 39 roles in July. The decision was reportedly announced in a note to staff from CEO Jim Bankoff, who wrote that while the company is "not expecting further layoffs at this time, we will continue to assess our outlook, keep a tight control on expenses and consider implementing other cost savings measures as needed," according to Axios.Vox Media's layoffs come at a time when advertisers are tightening their belts in anticipation of an economic slowdown, taking a toll on the media industry. Capital One: more than 1,100 tech workersBrian Ach/AP ImagesCapital One slashed 1,100 technology positions on January 18, a company spokesperson told Insider. The cuts impacted workers in the "Agile job family," a department which was eliminated and its responsibilities integrated into "existing engineering and product manager roles," per the spokesperson. "Decisions that affect our associates, especially those that involve role eliminations, are incredibly difficult," the Capital One spokesperson said in the statement. "This announcement is not a reflection on these individuals or the work they have driven on behalf of our technology organization," the spokesperson continued. "Their contributions have been critical to maturing our software delivery model and our overall tech transformation."The eliminations came after the bank had invested heavily in tech efforts in recent years, including launching a new software business focused on cloud computing in June 2022. "This decision was made solely to meet the evolving skills and process enhancements needed to deliver on the next phase of our tech transformation," the spokesperson said.  WeWork: About 300 employeesReutersWeWork announced on January 19 it will cut about 300 positions as it scales back on coworking spaces in low-performing regions, Reuters reported. The layoffs come after the company said in November 2022 it planned to exit 40 locations in the US as part of a larger cost-cutting effort. The company announced the cuts in a press release listing its fourth-quarter earnings call date, stating only the reductions are "in connection with its portfolio optimization and in continuing to streamline operations."  Wayfair: more than 1,000 employeesPavlo Gonchar/SOPA Images/LightRocket via Getty ImagesWayfair is expected to lay off more than 1,000 employees, about 5% of its workforce, in the coming weeks in response to slumping sales, the Wall Street Journal reported on January 19.The cuts mark the second round of layoffs in six months for the online furniture and home goods company, after it nixed 900 staffers in August 2022. Though the company experienced significant growth during the pandemic-driven home improvement boom, sales began to stagnate as social distancing policies loosened and Americans began returning to offices."We were seeing the tailwinds of the pandemic accelerate the adoption of e-commerce shopping, and I personally pushed hard to hire a strong team to support that growth. This year, that growth has not materialized as we had anticipated," Wayfair CEO Niraj Shah wrote in a letter to employees announcing the August 2022 layoffs, per CNN. In its most recent quarter, the Wayfair reported that net revenue decreased by $281 million, down 9% from the same period the year prior.  Microsoft: 10,000 workersMicrosoft CEO Satya NadellaStephen Brashear/Getty ImagesMicrosoft announced on January 18 that it planned to reduce its workforce by 10,000 jobs by the end of the third quarter of this year. CEO Satya Nadella attributed the layoffs to customers cutting back in anticipation of a recession. However, Nadella also told workers that the company still plans to grow in some areas, despite the firings, writing that the company will "continue to hire in key strategic areas." Microsoft's layoff announcement comes as the tech giant is reportedly in talks to invest $10 billion in OpenAI, which created the AI chatbot ChatGPT. On February 13, the company laid off staff at LinkedIn—which it acquired in 2016— according to The Information. The cuts were in the recruiting department, though the total number laid off is not immediately clear, The Information reported.Crypto.com: 20% of staffCrypto.com CEO Kris MarszalekCrypto.comCrypto.com announced on January 13 that it would let go of a fifth of its workforce amid a sagging crypto market and fallout from FTX's collapse. This is the second major round of firings for Crypto.com, which also had layoffs in July. "The reductions we made last July positioned us to weather the macro economic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry. It's for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success," CEO Kris Marszalek wrote in a memo to employees. BlackRock: up to 3% of global workforceBlackRock CEO Larry FinkSpencer Platt/Getty ImagesBlackRock is cutting up to 500 roles in its first round of firings since 2019. Staff members were notified on January 11 about whether they were laid off. "Taking a targeted and disciplined approach to how we shape our teams, we will adapt our workforce to align even more closely with our strategic priorities and create opportunities for the immense talent inside the firm to develop and prosper," CEO Larry Fink and President Rob Kapito wrote in a memo to employees. Goldman Sachs: an estimated 6.5% of its global workforceGoldman Sachs is laying off an expected 3,200 employees.Photo by Michael M. Santiago/Getty ImagesGoldman Sachs began laying off employees on Jan. 11, with cuts expected to impact an estimated 6.5% of the company's global workforce — or roughly 3,200 staffers — a source told Insider. The company previously slashed roles on its media and tech teams in September 2022, and it was expected to issue further reductions in the first half of January. The cost-cutting efforts from the investment banking giant mirror reductions from competitors including Morgan Stanley and Citi, which also laid off employees in 2022. "We continue to see headwinds on our expense lines, particularly in the near term," Goldman Sachs CEO David Solomon said at a conference in December. "We've set in motion certain expense mitigation plans, but it will take some time to realize the benefits. Ultimately, we will remain nimble and we will size the firm to reflect the opportunity set."   BNY Mellon: 1,500 jobsBNY Mellon CEO Robin VinceBNY MellonBNY Mellon is planning to cut approximately 3% of its workforce, or 1,500 jobs, according to the Wall Street Journal, which cited people familiar with the matter. The cuts will be primarily aimed at talent management roles, according to the report. BNY Mellon will reportedly plan to invest more in junior staff. Verily (part of Alphabet): reportedly 15% of workersAlphabet CEO Sundar PichaiJerod Harris/Getty ImagesVerily, which is Alphabet's healthcare unit, is laying off more than 200 employees, according to an email seen by the Wall Street Journal. The Journal reports that the company will also scale down the number of projects it works on in an effort to cut costs."We are making changes that refine our strategy, prioritize our product portfolio and simplify our operating model," Verily's CEO, Stephen Gillet, wrote in the email, according to the Journal.This is the first significant layoff done by Google's parent company, which had so far avoided the massive waves of job cuts done by other big tech giants like Amazon and Meta. DirecTV: 10% of management staffDirecTV.Karen Bleier/AFP/Getty ImagesDirecTV employees were told in the first week of January that the company would lay off several hundred workers in management roles.The satellite TV business has faced slowing revenues as more people choose to cut the cord and pay for streaming services over cable TV. "The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming. We're adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements," a spokesperson for DirecTV told Insider. Coinbase: 950 workersCEO Brian Armstrong cited the downward trend in cryptocurrency prices and the broader economy as reasons for the layoffs.Patrick Fallon/Getty ImagesCoinbase announced on Tuesday, Jan. 10, that would lay off another 20% of its staff. The cuts came after the crypto company laid off over 1,000 employees in July. In a memo to employees, CEO Brian Armstrong said, "in hindsight, we could have cut further at that time," referencing the layoffs in July. Armstrong partially attributed the company's weakness to the "fallout from unscrupulous actors in the industry," likely referencing the alleged fraud that took place at FTX late last year under then-CEO Sam Bankman-Fried. Armstrong predicted "there could still be further contagion" from FTX in the crypto markets but assured remaining employees that Coinbase is well capitalized. Amazon: 18,000 employeesAmazon CEO Andy Jassy initially announced the company's latest round of layoffs in November.AmazonAmazon is in the midst of the most significant round of layoffs in the company's history. In a memo to employees, CEO Andy Jassy said the company would cut more than 18,000 workers in total — far more than what was initially expected based on reporting by the New York Times. Jassy cited "the uncertain economy" and rapid hiring as reasons for the layoffs. While most of Amazon's 1.5 million staff have warehouse jobs, the layoffs are concentrated in Amazon's corporate groups. Amazon's layoffs began late last year, though the Wall Street Journal reports cuts will continue through the first few weeks of 2023.Amazon's 18,000 jobs cuts are the largest of any major tech company amid the wave of recent layoffs.  Salesforce: 10% of its staffSalesforce said in the first month of 2023 that it would enact big job cuts.Noam Galai/Getty ImagesSalesforce co-CEO Marc Benioff announced on Jan. 4 that the software company plans to layoff 10% of its workforce — an estimated 7,000 employees — and close select offices as part of a restructuring and cost-cutting plan. "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions," Benioff wrote in an email to staff. "With this in mind, we've made the very difficult decision to reduce our workforce by about 10 percent, mostly over the coming weeks."He continued: "As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we're now facing, and I take responsibility for that."Everlane: 17% of corporate employeesEverlane founder and executive chair Michael Preysman.Lars Ronbog/Getty Images for Copenhagen Fashion SummitEverlane is slashing 17% of its 175-person corporate workforce, and 3% of its retail staff."We know there will be some bumpiness over the next few weeks as we navigate a lot of change at once. We ask for your patience as we do right by our departing team members," CEO Andrea O'Donnell wrote to employees, according to an internal memo seen by Insider. In a statement to Insider, a company spokesperson said the decision was intended to "improve profitability in 2023 and continue our efforts to help leave the fashion industry cleaner than we found it."The e-commerce clothing company previously laid off nearly 300 workers, mostly in retail in March 2020 amid the outbreak of the Covid-19 pandemic.Vimeo: 11% of its workforceAnjali Sud, CEO of Vimeo, speaks during the company's direct listing on Nasdaq, Tuesday, May 25, 2021, in New York.AP Photo/Mark LennihanVimeo CEO Anjali Sud told employees on Jan. 4 that the company would layoff 11% of its staff, the video platform's second major round of layoffs in less than a year, after cutting 6% of employees in July"This was a very hard decision that impacts each of us deeply," Sud wrote in an email to staff. "It is also the right thing to do to enable Vimeo to be a more focused and successful company, operating with the necessary discipline in an uncertain economic environment."A spokesperson told Insider reduction is intended to assist with ongoing economic concerns and improve the company's balance sheet. Compass: size of layoffs not immediately disclosedCompass is letting go of more employees after two rounds of layoffs in the past eight months.CompassCompass CEO Robert Reffkin told staffers on Jan. 5 it would conduct more layoffs, following two previous rounds in the past eight months, as the brokerage continues to struggle with significant financial losses. "We've been focused over the last year on controlling our costs," Reffkin wrote in an email to employees. "As part of that work, today we reduced the size of some of our employee teams. While decisions like these are always hard, they are prudent and allow us to continue to build a long-term, successful business for all of you."While the size of the layoffs was not immediately disclosed, the brokerage let go of 450 corporate employees in June 2022, followed by an additional 750 people from its technology team in October 2022.   Stitch Fix: 20% of salaried jobsStitch Fix is laying off salaried employees.SOPA ImagesStitch Fix announced on Jan. 5 that it plans to slash 20% of its salaried workforce, the Wall Street Journal reported.The cuts come in tandem with the announcement that CEO Elizabeth Spaulding is stepping down, after less than 18 months at the helm of the struggling retail company."First as president and then as CEO, it has been a privilege to lead in an unprecedented time, and to chart the course for the future with the Stitch Fix team," Spaulding said in a statement. "It is now time for a new leader to help support the next phase."Stitch Fix founder Katrina Lake — who formerly served as chief executive and sits on the board of directors — will become interim CEO, the company said in a press release. Read the original article on Business Insider.....»»

Amazon plans to eliminate 9,000 more jobs in the next few weeks, CEO Andy Jassy said in a memo to staff.Amazon plans to eliminate 9,000 more jobs in the next few weeks, CEO Andy Jassy said in a memo to staff......»»

If the European Union's "Euro 7" emissions plan is implemented in its current form, Czech automaker Skoda, which is a part of Volkswagen AG (OTC: VWAGY), may be forced to eliminate some models and 3,000 jobs. read more.....»»

The DeSantis administration recently filed a complaint to revoke a hotel's liquor license after the venue hosted a drag show with children present. LGBTQ rights supporters protest against Florida Gov. Ron Desantis in Fort Myers, Florida.Giorgio Viera/AFP via Getty Images Florida has recently proposed a spate of bills concerning the LGBTQ community. Gov. Ron DeSantis and Florida leaders have often framed the move as an effort to protect children. A drag queen who survived the 2016 Pulse club shooting said it only further demonizes LGBTQ people.  Florida's push to axe gender-affirming care for minors, restrict discussions of gender identity in schools, and, more recently, revoke a hotel's liquor license after hosting a drag show have repeatedly been painted by GOP state leaders and Gov. Ron DeSantis as an urgent crusade to protect children. But LGBTQ rights groups and communities are skeptical and maintain that the latest actions in Florida further marginalize a minority community that makes up less than 5% of the state's population."On the surface level, these pieces of legislation limit job opportunities for drag entertainers, reduce resources for transgender individuals, and prevent students (both children and adults) from being educated about LGBTQ+ topics," a drag performer who goes by the name of Venus Envy told Insider in an email. "All of these outcomes are harmful in their own right, but the greater impact of these bills is already being seen in the increase of hatred toward the LGBTQ+ community and the harmful rhetoric that drag queens are predatory."On Tuesday, Florida's Department of Business and Professional Regulation filed a complaint to revoke the Hyatt Regency Miami's liquor license because children were present at a drag show hosted by the venue. The department accused the venue of violating a law against "lascivious exhibition" before people younger than 16 and that the performers wore sexually suggestive clothing and simulated sex acts. It's unclear how often this law is typically enforced. The state business regulation department could not immediately be reached for comment.DeSantis's press secretary, Bryan Griffin, did not respond to a request for comment for this article but previously told Insider that "sexually explicit content is not appropriate to display to children and doing so violates Florida law."Envy, who is based in Orlando and survived the mass shooting at Pulse nightclub in 2016, said the Tuesday decision to revoke a hotel's liquor license could limit the already dwindling number of opportunities for drag performers.Since the tragedy at Pulse, the number of venues that cater to LGBTQ people has reduced, she said, and revoking the Hyatt's liquor license will only spook other venues if they're at risk of losing their license. Hyatt has 21 days to request a hearing and can continue to sell alcohol, but, for Envy, "the damage has already been done." "Not just in terms of limiting opportunities for drag entertainers, but by demonizing the art of drag as a whole," she wrote. "We, as a community, are scared. Not just for our jobs, but for our right to exist as queer and trans people."GOP leader says drag queens are part of 'insidious organizations'Protecting children from sexually explicit content has been the common refrain for Florida Republicans proposing bills that ban gender-affirming care for minors or discussions about gender and sexuality in schools from pre-kindergarten to third grade. A recent revision of the latter bill seeks to expand that restriction to 8th grade.Rep. Randy Fine, whose district covers southern Brevard County, proposed a bill on March 3 entitled "Protection of Children," which penalizes venues that admit children to see an "adult live performance."The bill makes no mention of drag performers and it's not immediately clear how prevalent it is in Florida for children to be admitted into adult shows. But the lawmaker was transparent about what the proposal was in response to."I'm not aware of a lot of female strippers performing for children right now, I'd be interested to know that there are, but what we have is men dressing up like strippers and somehow the woke left thinks that's OK," Fine told WKMG-TV, in response to a question about if the bill was meant to target drag shows.Fine told Insider his motivation for pursuing the bill came after he found out a drag queen show was hosted in a public space in his district last year.He accused drag queens of being a part of "insidious organizations" that teach, among other things, that "gender fluidity is real." However, the representative also said he would not support a bill that eliminates drag shows for consenting adults. 'Right-wing hysteria' is hurting queer communities across the stateIn response to the Tuesday complaint, Equality Florida, an LGBTQ rights advocacy group, accused DeSantis of "selectively weaponizing" state agencies against businesses to target drag performances."How far will he take this anti-LGBTQ crusade in his desperate attempt to outrace his inevitable presidential primary opponents?" Brandon Wolf, a spokesperson for Equality Florida, said in a statement to Insider. "Will he raid movie theaters because parents take their teenagers to see R-rated movies? Will he punish electronics stores because parents buy their children certain video games? How many businesses will DeSantis target, how many families will he force to co-parent with the government in his quest to manufacture right-wing hysteria that he can monetize and weaponize?"Even before the move to revoke Hyatt's alcohol license, anti-LGBTQ acts of political violence and demonstrations increased three-fold across the US between 2021 and 2022, according to the Armed Conflict Location & Event Data Project (ACLED). In Florida, there have been at least nine demonstrations against the LGBTQ community, the organization found.Envy said she hasn't personally noticed a drop in drag show attendance recently, but she has noticed an increase in threats and protests against drag shows."Being a Pulse survivor, there's always a sense of fear in the back of my mind when I'm performing, but I can't let that stop me," she wrote. "Drag queens are pillars in queer communities — We need to be visible and we need to speak out."Read the original article on Business Insider.....»»

Mish: The Perfect Solution To The Banking Crisis Is To Make A Truly Safe Bank Authored by Mike Shedlock via MIshTalk.com, We don't need to up the FDIC limit, we need to eliminate the need for FDIC and create a safekeeping bank... Creating a Safe Bank How many times do we have to go down the duration mismatch road with fractional reserve lending and nearly $9 trillion of Fed QE to prove the current banking doesn't work? Once again, systemic risk morphed into economic stress, bank failures, and then a bailout of the banking system, not just Silicon Valley Bank. If you think only depositors got bailed out, you are mistaken. The Fed put a system backstop on $600 billion in bond losses. And although bank executives will lose their jobs, they cashed out tens of millions of dollars in stock options along the way. Specifically, we need a bank that puts 100% of its assets in overnight treasuries and makes zero loans. The bank would not need any loan officers or many operational personnel for obvious reasons. There would be no need for FDIC guarantees because there would be zero risk of a run and zero risk of losses. We can still keep the FDIC term in place, but realistically it would not be needed. In essence, we would create a 100% reserve bank. Such a bank might pay one percentage point less than the Fed 's overnight rate for safekeeping. If the overnight rate fell below 1 percent, the bank would charge a fee for safekeeping. The bank could also do term deposits at a slight discount to corresponding treasury yields. Depositors would be required to hold assets to term. To prevent runs on existing banks right, we would let every bank participate in this offering. Customers would have a chance to place their deposits into safekeeping accounts at existing banks. Bank Lending To make loans, I propose banks would have to attract investment money instead of lending money into existence. They would do so by offering higher than market interest rates on term deposits, but those deposits would not be guaranteed. As an added benefit, this setup would end fractional reserve lending. We would have a full reserve system, unfortunately one that is not backed by gold, but it would be a huge step in the right direction. The immediate economic reaction would likely be contractionary, but that seems to be what the Fed wants now anyway to rein in inflation. Alternatively, perhaps we could phase these ideas in over a 10-year period to mitigate  risk. Fed Should Admit Responsibility for Asset Bubbles The Fed needs to admit it is largely responsible for these recurring bailouts. Via QE, the Fed stuffed cash nearly $9 trillion in deposits down the throats of banks and that is why deposits soared so much in the first place. Then despite the obvious risks, regulators eliminated all reserves on deposits and treasuries encouraging Silicon Valley Bank and other banks to seek yield. It’s true that there were three rounds of fiscal stimulus, and the last one under President Biden was totally unwarranted as well as highly inflationary. But it’s the Fed’s job to understand that risk. Unfortunately, the Fed not only sponsored the biggest asset bubble in history, it also failed to understand how free money, student debt cancellations, and zero percent interest rates might cause inflation. Why Is There a Fed? If the Fed cannot see the obvious, why is there a Fed? The only answer I can come up with is Congress would be worse. The Fed aside, there is only one way to truly eliminate borrow-short, lend-long risk, and that is to go to a full reserve system where loans are not borrowed into existence and businesses and banks can have a bank where it is 100% certain their deposits will not be lent. Admittedly, this could cause some short-term pain. Perhaps it would be the end of 30-year mortgages. But it would also serve to end financial speculation due to cheap money. And, as I suggested, perhaps there is a way to phase this in. Why the Fed Doesn't Want Full Reserve Bank In the span of 20+ years, the Fed has blown three economic bubbles and we have had multiple bank bailouts. The Fed does not want a full reserve bank because it wants inflation. Inflation benefits those with first access to money. Banks, the already wealthy, and governments via tax collections are first in line. Now that the Fed has created inflation, it doesn't want that much of the tiger it unleashed. Central Bank Digital Currencies Another reason the Fed does not want a safe bank is so that it can sponsor its own digital currency. Instead of sound money or merely sounder money, the Fed wants to be free to blow bubbles to fix the messes it creates while not understanding what inflation even is. Those who believe the CPI or its PCE cousin measures inflation are wrong. Neither measure directly includes home prices or asset bubbles in general. And we have proven once again that inflation and asset bubbles matter, not just alleged consumer inflation measures. Serious change is needed. Instead, the Fed supports more of the same serial bubble-blowing measures, complete with bailouts and a charlatan digital currency savior on deck as its fake solution. *  *  * Please Subscribe to MishTalk Email Alerts. Tyler Durden Sat, 03/18/2023 - 10:30.....»»

Fluent, Inc. (NASDAQ:FLNT) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Thank you for standing by, and welcome to Fluent Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. As a reminder, today’s program […] Fluent, Inc. (NASDAQ:FLNT) Q4 2022 Earnings Call Transcript March 15, 2023 Operator: Thank you for standing by, and welcome to Fluent Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. As a reminder, today’s program is being recorded. And now I would like to introduce your host for today’s program, Dan Barsky, General Counsel and Chief Compliance Officer. Please go ahead, sir. Dan Barsky: Good afternoon and welcome. Thank you for joining us to discuss our fourth quarter and full year 2022 earnings results. With me today are Fluent’s CEO, Don Patrick; Interim CFO, Ryan Perfit; and Chief Strategy Officer, Ryan Schulke. Our call today will begin with comments from Don and Ryan Perfit, followed by a question-and-answer session. I would like to remind you that this call is being webcast live and recorded. A replay of the event will be available following the call on our website. To access the webcast, please visit our Investor Relations page on our website, www.fluentco.com. Before we begin, I would like to advise listeners that certain information discussed by management during this conference call will contain forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements made during this call speak only as of the date hereof. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company’s business. These statements may be identified by words such as expects, plans, projects, could, will, estimates, and other words of similar meaning. The company undertakes no obligation to update the information provided on this call. For a discussion of the risks and uncertainties associated with Fluent’s business, we encourage you to review the company’s filings with the Securities and Exchange Commission, including the company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q. During this call, we will also present certain non-GAAP financial information relating to media margin, adjusted EBITDA and adjusted net income. Management evaluates the financial performance of our business on a variety of indicators, including these non-GAAP metrics. The definition of these metrics and reconciliations to the most directly comparable GAAP financial measures are provided in the earnings press release issued later today. With that, I’m pleased to introduce Fluent’s CEO, Don Patrick. Don Patrick: Thank you, Dan, and good afternoon. Thank you all for joining our call today. I’m here together with Ryan Schulke, our Chief Strategy Officer, Chairman of the Board and Company Founder; and Ryan Perfit, our Interim Chief Financial Officer. Ryan Perfit rejoined us in February having led our finance group at Fluent for seven years from 2012 to 2019. We’re excited to have Ryan back with us given his deep knowledge of Fluent and our industry. I’ll make some brief comments about our annual and fourth quarter results that we believe continue to reinforce the imperative behind our commitment to enhance the quality of our consumer engagements within our performance marketplace, while also reflecting the more volatile macroeconomic environment we are operating within. I’ll then update you on a disciplined progress we’re making against our strategic priorities along with the required strategic and economic adjustments we’re making to enhance our consumer solutions while reinforcing the strategic and value-added role we play with our partners and clients. In the earnings release today, we reported for the full year 2022 revenue of $361.1 million, which represents top-line growth of 10% versus 2021, $110 million of media margin, an increase of 10% at 30.5% of revenue and $22.7 million of adjusted EBITDA, the decline of 2% at 6.3% of revenue. Overall, our 2022 financial results were consistent with the business roadmap we laid out in our previous earnings releases as our strong first half performance landed where we planned for the full year 2022. In 2022, we are encouraged by the double-digit revenue growth in our core U.S. and international rewards businesses directly resulting from momentum in our performance marketplace and driven by two of our strategic initiatives: consumer engagement and CRM. Our targeted investments to improve consumer experience while also enhancing our CRM capabilities led to a higher quality marketplace experience and thus a more engaged consumer for our clients. In turn, our monetization continues to improve on our owned media properties, which we see as a reflection of consumer satisfaction. We continue to see a significant market play before us to further create meaningful and engaging consumer experiences that expand our relationships with world-class brands and key industry verticals by enhancing our consumers’ lifetime value in their branded ecosystem. Rewards revenue growth was partially offset by our jobs business based on economic headwinds reducing second half demand, coupled with first half challenges we faced on our technology platform migration. Our new technology platform offers longer term market opportunities to strategically pivot our jobs business model in a manner that will strengthen our integration with our partners, while improving quality of our jobs consumers experience. We are currently assessing that strategic opportunity. We’ll have more to share in that in the future. A strategic and financial relevance is how we continue to proactively manage the mix across our initiatives. We are methodically expanding our business unit margins, where higher quality consumer experiences differentiate us in our competitive set and thus create a market opportunity to do so. In turn, we’re pleased that the majority of our businesses show double-digit year-over-year margin improvement. Our ability to remain strategically focused yet nimble is important given the current market realities. Our fourth quarter results reflect the macroeconomic headwinds we’re seeing across the entire industry. Revenue of $84.7 million, down 15% year-over-year, media margin of $23.7 million, down 24% year-over-year at 28% of revenue and adjusted EBITDA $2.7 million or 3.2% of revenue. As discussed in Q3, we are currently seeing a parallel level of unpredictability as the digital advertising industry. Towards the end of Q3, consumers and clients were pausing to access the road ahead that extended into Q4 is continuing in Q1 2023. We have seen our clients’ consumer acquisition strategies shift from growth and return on ad spend to just return on ad spend due to the continued consumer uncertainty in the market. And while Fluent’s performance marketplace is well positioned to respond to these shifts by managing media margin mix, Q4 margin was impacted primarily based on certain media cost increases in our core rewards business being above historical Q4 seasonal norms on social media platforms in industry-wide reality. Importantly, we see media costs returning to the more historical norms in Q1 and correspondingly our ability to successfully manage our media mix will improve. In 2022, we expanded our media footprint spend on social channels focusing not only on digital platforms like Facebook, Google, Snap and TikTok, but also against the emerging channel of influencers that leverage them. Influencer credibility is growing presence in the marketplace. Their ability to affect consumer behavior is also growing and thus significantly impacts trends in the demand for particularly products and services in a variety of verticals. Although early stage, in the latter half of 2022, we accelerated working with these media partners while building a proprietary influencer platform with functionality and tools that support influencer effectiveness while enhancing quality for our clients. We are motivated by the strategic opportunity here as our emerging Fluent platform brings stronger market capabilities that improve influencer experience while enhancing consumer engagement and satisfaction. Net we believe influencers are a growing and increasingly important industry channel for customer acquisition and we’ll continue to evolve and invest here. Our long-term strategic growth plan remains focused squarely on consumer engagement by enhancing all aspects of the quality experience of our performance marketplace. This is the prudent strategy regardless of the current challenging economic and industry environment. We remain undeterred as we lean into key growth areas that differentiates Fluent from our competitive set, while evolving our capabilities to fixate on the quality fundamentals at the core of our business model that will have us win in the longer term. An inherent strength of Fluent’s performance marketplace is our pay-for-performance model, which is the signature of our brand partnerships. Fluent only gets paid when we directly connect to consumer with our brands, partners, goods and services in agreed upon purchase action. As our brand partners share this critical data with us, it creates an opportunity for Fluent to analyze real-time consumer behavior, providing us the ability to see the direct connection between Fluent’s consumer and our brand client. And converting this data into insight is an unequivocal competitive advantage. The Fluent’s platform leverages that insight to fuel our media spend and ad-serving, while enhancing the consumer experience. This not only improves our brand partners’ return on ad spend, it further solidifies the value of Fluent partnership, at the same time expanding our margins. We are seeing our most strategic clients in key verticals invest more aggressively with us here, a reflection of Fluent’s evolving brand equity. Our goal is to expand this capability with clients in other verticals vis-à-vis full data transparency. This is obviously short-term value proposition and return on ad spend benefits for our brand partners, but as important, this emerging Fluent capability has longer term strategic benefits for us, which delivers additional competitive advantage in the marketplace. As a direct reflection of the challenging macroeconomic environment, we are prudently reviewing our 2023 strategic investments and priorities along with scrutinizing our operating costs in order to ensure that we drive acceptable, medium term financial performance. Our assessment has led us to pause or eliminate lower priority projects, while also streamlining our organization, resulting in some difficult layoffs in restructuring. We believe our subsequent, flattened organization is more appropriately designed to facilitate faster strategic and financial decision making, while improving our productivity and speed in executing. Regarding Q1, given the somewhat unprecedented macro and geopolitical economic outlook, we are certainly seeing a continued parallel level of unpredictability in the digital advertising industry. The immediate term ramifications for Fluent are difficult to gauge as we remain fluid in responding to market conditions. Similar to Q4, we expect to see modest declining revenue growth quarter-to-quarter with consumers spending less and clients operating more cautiously as they tighten their budgets and continue to focus on return on ad spend. We also expect to see improving margins quarter-to-quarter as we manage our media mix, with media costs returning to more historical norms. We remain bullish on our agenda, albeit at a more moderate investment level, and we will continue to make strategic bets against our quality centric consumer platform, maintaining clear focus on enhancing consumer engagement, while improving customer experience. Overall, we believe 2023 financial results will show modest revenue growth at or above industry growth rates with sequential margin improvement over time. In turn, we will continue to appropriately invest in our growth agenda while making the necessary strategic and financial adjustments to be successful in the long-term. We are also confident that the fundamentals we’ve put in place over the last fiscal year will pay longer term strategic and financial dividends, as market conditions improve and the consumer normalcy returns. In tandem, we’ll continue to manage the mix across our different business units as a clear path to our margin expansion goals. Finally, our industry will continue to rapidly evolve where regulatory considerations and guidelines will naturally increase. As a company, while we continue to learn and grow, Fluent is also committed to exhibit the industry leadership role in both setting and reflecting these industry standards. We believe this is a critical strategy for our long-term success with consumers and clients. But we also believe we have a unique opportunity to elevate the entire industry by way of our enhanced processes and protocols. We are aggressively investing in the strategy and the business protocols and will continue to update our industry and our investors on our course. While the economic realities have created unique challenges, we remain steadfast at building a higher quality digital experiences for consumers, while creating more effective and sustainable customer acquisition solutions for our clients, represents the winning road forward. As we execute against our strategic and financial growth agenda, our team remains grounded in our operating principles. This is the decided path to winning the consumer who demands higher quality, while establishing competitive advantage in the marketplace and creating shareholder value for our investors. And with that, I will turn to Ryan to provide more detail on our financial results. Photo by Campaign Creators on Unsplash Ryan Perfit: Thanks, Don. And good afternoon everyone. I am glad to be back and to report our full year 2022 and Q4 results. For the full year, Fluent generated $361.1 million in revenue, up 10% year-over-year, and in line with overall digital advertising industry growth. As Don mentioned, we were encouraged by the growth of our core rewards business, which was bolstered by continued investments in consumer engagement and CRM capabilities. Continued consumer traffic monetization improvements have allowed us to be less dependent on volume of users to generate revenue growth. The increases were partially offset by a decline in the jobs business, which was challenged by market conditions and a technology platform migration in the first half of the year. In Q4, the company generated $84.7 million of revenue, down 15% year-over-year and down 5% sequentially from Q3. As Don mentioned, Q4 was adversely affected by continued unpredictability in the broader digital advertising industry, where we did not see the higher seasonal ad spend we have historically experienced, In Q1 we continue to see headwinds in the industry. Although we haven’t experienced the historical sequential decline from Q4, we do anticipate revenue will be down mid-single digits from the fourth quarter. We expect to continue to increase in consumer engagement along with an expanded media footprint in the influencer channel to drive growth in 2023. Our full year media margin was $110 million, representing 10% year-over-year growth. Media margin as a percentage of revenue remained constant at 30.5% from full year 2021. Our media margin in Q4 of $23.7 million represented 28% of revenue and a 24% year-over-year decline. The fourth quarter decline was largely a factor of the previously mentioned ad spend challenges not being offset by lower media costs. In Q1, we expect media mix to drive media margin higher sequentially. Our full year operating expenses on a GAAP basis comprising sales and marketing, product development and G&A, grew in aggregate by $12.1 million or 16% year-over-year to $88.8 million. Within that mix, we continue to strategically invest in sales and marketing and product development, in supporting growth initiatives and product innovation. Full year operating expenses, exclusive of non-GAAP adjustments were $70.9 million. Our operating expenses on a GAAP basis in aggregate for Q4 were $28.3 million, up $8.5 million year-over-year. Exclusive of non-GAAP adjustments, operating expenses were $17.4 million, a $79,000 year-over-year increase. In Q1 we completed a reduction in headcount and are continuing to review strategic investments and operating expenses given the current environment. Our G&A line includes certain litigation and related costs of $11.1 million for the full year and $8.6 million for Q4, representing a year-over-year increase of $8.1 million. These costs are outside of the ordinary course of business and are excluded from our adjusted EBITDA. G&A also includes $2.2 million of accrued compensation expense related to the Winopoly and True North acquisitions that is excluded from our adjusted EBITDA. As detailed in our 10-K filing, the company determined that the decline in our market cap and under performance in Q4 represented a triggering event and an indication of impairment of our goodwill. Based on this analysis, the company recorded a non-cash impairment charge to goodwill associated with the acquisition of the Fluent operating business in 2015 and the ad part of business in 2019, a $55.7 million in the fourth quarter and $111.1 million for the full year. The non-cash impairment charge is excluded from our adjusted EBITDA and will have no impact on our operations or liquidity. Full year adjusted EBITDA of $22.7 million represented 6.3% of revenue. Q4 came in at $2.7 million or 3.2% of revenue. Full year net interest expense declined by $219,000 to $2 million as we reduced our debt principle outstanding by $5 million year-over-year. For the full year, the provision for income taxes was $1.8 million with an effective tax rate of 1.5%. We reported a full year GAAP net loss of $123.3 million and adjusted net income, a non-GAAP measure of $5.7 million or $0.07 per share. For the fourth quarter, we reported a net loss of $67.5 million and an adjusted net loss of $794,000 or $0.01 per share. Our non-GAAP metrics reconciled in today’s earnings release and our 10-Q and 10-K filings. Turning to the balance sheet, we ended the quarter with $25.5 million in cash and cash equivalents. Working capital defined as current assets minus current liabilities, ended the quarter at $42 million, down $7.3 million year-over-year and $9.8 million sequentially. Total debt as reflected on the balance sheet, ended the quarter at $40.6 million. Our debt balance has declined by $4.7 million as compared with the prior year balance sheet. Over the past year, we invested $4.4 million into capitalized product development and technology and $1 million into acquisition and related costs, compared to $3 million and none respectively in 2021. Strategically, the management team continues to focus on consumer engagement and higher quality traffic, which yields higher conversion rates and ultimately higher return on ad spend for our clients. We believe this approach will continue to drive increased monetization and higher media margin. We’re confident in our ability to execute on the opportunity ahead. We appreciate your ongoing support. We’re happy to take questions at this time. See also 12 Biggest Cloud Providers by Market Share and 11 Best Performing S&P 500 Stocks in 10 Years. Q&A Session Follow Fluent Inc. (NASDAQ:FLNT) Follow Fluent Inc. (NASDAQ:FLNT) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: And our first question comes from the line of Maria Ripps from Canaccord. Your question please. Maria Ripps: Great. Thanks so much for taking my questions. First, could you maybe talk about your budget €“ how your budget conversations with your clients have been developing so far this year? I know you mentioned that some clients are tightening their budgets, but how much visibility would you say you have into budgets for the remainder of 2023? And are there any dynamics outside of the broader macro environment that could impact budget allocations in either direction? Don Patrick: Hi. Thank you, Maria. Thanks for the question. Generally overall when we saw the pullback in Q3, most of our clients were sort of looking at a more short-term quarter-by-quarter view. When we do talk the longer term over the course of 2023, they are confirming that their budgets look to be flat-to-slightly up. But what we’re seeing is in the short-term, they’ve been pulling back more focused on return on ad spend rather on growth. So the metrics that we’ve been driving for our clients have been more on that return on ad spend, which our model €“ our business model obviously adheres to pretty closely. So they’re confirming that the spend is generally the same or slightly up, but obviously very short-term focus quarter-by-quarter. The only thing we’ve seen in verticals that are slightly different is we have in the health industries like Medicare, Medicaid, AEPs, things like that in our Call Solutions business that has not been affected. In fact in Q4 that seasonality did happen for our business and we did see the margin growth expand, but for generally across the streaming services, the Media & Entertainment things like that we’ve seen €“ we’ve seen a big pullback from growth to return on ad spend. Maria Ripps: Got it. That’s very helpful. And then could you maybe talk a little bit more about your efforts to expand your media footprint? Did you add any new channel sort of partnerships in Q4 and any call or maybe you can share and what drove sort of this slide, slightly higher cost of revenue in the quarter compared to Q3? And then maybe related to that sort of in addition to the influence the channel that you mentioned on the call, what are your sort of top priorities in 2023 as it relates to sort of this pillar of your growth strategy? Don Patrick: Sure. And Maria, your last question was around our media or just in general around our growth? Maria Ripps: Around your sort of media footprint? Don Patrick: Got it. Yes, perfect. Yes. So as you know, we’ve lean pretty heavily into the, what I’ll call the social channels. And that has been really from start of 2020 when we started the traffic quality initiative and we’ve been obviously continuing to invest in that. We did see in Q4 cost on the biddable platform is higher than they typically are from a seasonality perspective. They always do go up in Q4. But it was up, up higher based on the things that you saw go on across those platforms. So the good news is on Q1 we did see those pricing come back to the norm and our ability to manage that mix successfully. As we look into our clear growth initiatives around biddable and around our social programs, it’s really the influence is a pretty big play for us. It’s nothing new. It’s a huge market, 16 billion and it’s growing aggressively. The big change has been around consumer behavior. Over 50% of the consumers now depend on influencer’s opinion and make a purchase. We’re really leaning into that. The influencer is between sort of mega and macro influencers. We’re really going after the micro section, which tends to have more influence over their audience and more engaged and, and more likely to take an action. So our platform was a big play in that media shift in order to really building a marketplace for those influencers to work with us, to connect with our brands, and then also more effectively operate in a compliant way. So social and clearly the influencers is a big play for us going in 2023......»»

In a matter of hours, developers were using Open AI's new software to design websites, create legal documents, and make games. The new GPT-4 artificial intelligence software from OpenAI has only been out for one day. But developers are already finding incredible ways to use the updated tool, which now has the ability to analyze images and write code in all major programming languages. Just hours after its release, several users said they created computer games in less than a minute by simply asking the chatbot to generate code, resulting in near-perfect renditions of Tetris, Connect Four, Snake, and Pong. Other users created a matchmaking service, bedtime stories, a browser extension that translates any webpage into “pirate speak,” and even a tool that can help discover new medications. [time-brightcove not-tgx=”true”] OpenAI unveiled the new GPT-4 on Tuesday, saying it can handle “much more nuanced instructions” than the older generation, which captivated users starting in November 2022 with its uncanny ability to generate elegant writing and answer almost any question. But the previous version of Chat GPT relied on an older generation of technology that wasn’t able to reason and learn new things. Its answers were not always correct or appropriate, either. Read More: The AI Arms Race Is Changing Everything The new generation, in contrast, relies on a “large multimodal model” that can accept longer text inputs of up to 25,000 words—compared to the previous 3,000 words—and is trained to be safer and more factual, OpenAI said. The public got a sneak preview of the tool when Microsoft last month released the Bing AI chatbot using GPT-4. The tool is so powerful that it can take a photo of a hand-drawn mockup for a simple website and turn it into an actual website using HTML and Javascript code. The new model can even analyze and describe photos, capable of explaining why an illustration of a squirrel taking a photo of a nut was funny (answer: “we don’t expect them to use a camera or act like a human”). 🤯🤯Well this is something else. GPT-4 passes basically every exam. And doesn't just pass…The Bar Exam: 90%LSAT: 88%GRE Quantitative: 80%, Verbal: 99%Every AP, the SAT… pic.twitter.com/zQW3k6uM6Z — Ethan Mollick (@emollick) March 14, 2023 OpenAI hasn’t yet made the image description feature available to the public, but users are already gearing up for its public launch. Joshua Browder, the CEO of the New York-based startup DoNotPay, a chatbot lawyer that helps people with their legal issues, says he plans on harnessing the power of GPT-4’s image feature so users can scan their medical bills and have the chatbot identify errors, compare prices to other hospitals, and automatically draft a legal defense under the No Surprises Act, which protects medical patients from surprise bills. “The new GPT-4 has almost a 5x improvement on earlier models,” Browder says. “This latest one is sophisticated enough to draft a lawsuit. Earlier models didn’t have that level of sophistication—they would make things up, they would pretend to know things, which we call hallucination. But we’re not really seeing that with GPT-4.” DoNotPay is working on using GPT-4 to generate "one click lawsuits" to sue robocallers for $1,500. Imagine receiving a call, clicking a button, call is transcribed and 1,000 word lawsuit is generated. GPT-3.5 was not good enough, but GPT-4 handles the job extremely well: pic.twitter.com/gplf79kaqG — Joshua Browder (@jbrowder1) March 14, 2023 The buzzy launch of OpenAI’s fourth generation AI software capped months of hype and anticipation over the powers of this technology, which many industry leaders believe has created a fundamental technological shift similar to the creation of web browsers in the early 1990s. On Tuesday, companies all across the U.S. began coming up with ways to integrate GPT-4 into their products. Duolingo, the language-learning app, announced it would now be able to share more personalized explanations for mistakes powered by AI, which might include “signature, playful and quirky commentary.” At Stripe, the electronic payment platform, GPT-4 is already being used to provide users with accurate answers about customer support and fraud detection. Financial services firm Morgan Stanley is also using GPT-4 to streamline internal technical support processes. Even the government of Iceland is working with OpenAI to help preserve the Icelandic language. “The speed at which it’s able to program and be creative is pretty staggering,” says Josh Pigford, the founder of Maybe, a financial planning firm that plans to use GPT-4 to quickly extract credit card transaction data for users. “It replaces what an engineer could potentially do.” Sooooo @maybe's transaction data is about to get reeeeeal good, thanks to GPT-4. pic.twitter.com/w8BeTpLC8q — Josh Pigford (@Shpigford) March 14, 2023 In the medical profession, doctors are even considering using GPT-4 for patient consultations. Anil Gehi, an associate professor of medicine and a cardiologist at UNC-Chapel Hill, described to the chatbot the medical history of a few patients he had seen earlier that presented complex medical cases. In just seconds, the chatbot gave him a perfect answer on how he should have treated the patient using all the correct medical terminology. “It very cogently thought through those clinical scenarios and laid out options to consider,” Dr. Gehi says. “It was very impressive.” “It’s not going to replace a human doctor,” he adds. “But it’s one of those things we can use alongside our work.” With its wide display of knowledge, the new GPT has also fueled public anxiety over how people will be able to compete for jobs outsourced to artificially trained machines. “Looks like I’m out of job,” one user posted on Twitter in response to a video of someone using GPT-4 to turn a hand-drawn sketch into a functional website. “Idk if i should be excited or scared,” another wrote. Read More: He Used AI to Publish a Children’s Book in a Weekend. Artists Are Not Happy About It The nonprofit organization Common Sense released a statement on Tuesday calling for a national dialogue around kids and artificial intelligence, saying that “the consequences for kids, educators and families—both good and bad—have not been thoroughly considered.” Others expressed concern that GPT-4 still pulls information from a database that lacks real-time or up-to-date information, as it was trained on data up to August 2022. The time-gap could make trusting the accuracy of what’s online more difficult. “The real breakthrough will occur, however, when an AI system…contains up-to-date information—ideally updated in real-time or, failing that, every few hours,” says Oliver Chapman, CEO of supply chain specialists OCI. To use GPT-4, users have to subscribe to ChatGPT Plus, a $20 monthly subscription, for premium access to the service. GPT-4 currently has a cap of 100 messages every four hours......»»

The companies weren't saying much on Wednesday. But there are figures on job moves in official filings......»»