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CFPB rule to save Americans $10 billion a year in late fees faces possible last-minute freeze 2024-05-09 18:41:00+00:00 - A Consumer Financial Protection Bureau regulation that promised to save Americans billions of dollars in late fees on credit cards faces a last-ditch effort to stave off its implementation. Led by the U.S. Chamber of Commerce, the card industry in March sued the CFPB in federal court to prevent the new rule from taking effect. That effort, which bounced between venues in Texas and Washington, D.C., for weeks, is now about to reach a milestone: a judge in the Northern District of Texas is expected to announce by Friday evening whether the court will grant the industry’s request for a freeze. That could hold up the regulation, which would slash what most banks can charge in late fees to $8 per incident, just days before it was to take effect on Tuesday. “We should get some clarity soon about whether the rule is going to be allowed to go into effect,” said Tobin Marcus, lead policy analyst at Wolfe Research. The credit card regulation is part of President Joe Biden’s broader election-year war against what he deems junk fees. Big card issuers have steadily raised the cost of late fees since 2010, profiting off users with low credit scores who rack up $138 in fees annually per card on average, according to CFPB Director Rohit Chopra. New fees, higher rates As expected, the industry has mounted a campaign to derail the regulations, deeming them a misguided effort that redistributes costs to those who pay their bills on time, and ultimately harms those it purports to benefit by making it more likely for users to fall behind. Up for grabs is the $10 billion in fees per year that the CFPB estimates the rule would save American families by pushing down late penalties to $8 from a typical $32 per incident. Card issuers including Capital One and Synchrony have already talked about efforts to offset the revenue hit they would face if the rule takes effect. They could do so by raising interest rates, adding new fees for things like paper statements, or changing who they choose to lend to. Capital One CEO Richard Fairbank said last month that, if implemented, the CFPB rule would impact his bank’s revenue for a “couple of years” as the company takes “mitigating actions” to raise revenue elsewhere. “Some of these mitigating actions have already been implemented and are underway,” Fairbank told analysts during the company’s first-quarter earnings call. “We are planning on additional actions once we learn more about where the litigation settles out.” Trial ahead? Like some other observers, Wolfe Research’s Marcus believes the Chamber of Commerce is likely to prevail in its efforts to hold off the rule, either via the Northern District of Texas or through the 5th Circuit Court of Appeals. If granted, a preliminary injunction could hold up the rule until the dispute is settled, possibly through a lengthy trial. The industry group, which includes Washington, D.C.-based trade associations like the American Bankers Association and the Consumer Bankers Association, filed its lawsuit in Texas because it is widely viewed as a friendlier venue for corporations, Marcus said. “I would be very surprised if [Texas Judge Mark T.] Pittman denies that injunction on the merits,” he said. “One way or another, I think implementation is going to be blocked before the rule is supposed to go into effect.” The CFPB declined to comment, and the Chamber of Commerce didn’t immediately respond to a request for comment.
Supreme Court says cops can keep your stuff pending forfeiture hearings 2024-05-09 18:27:09+00:00 - The Supreme Court’s Republican-appointed majority yet again went further than it had to. This time, the court approved stingy safeguards for civil forfeiture proceedings, when law enforcement takes your personal property, such as a car, that is allegedly tied to crime, even if you’re innocent. Led by Justice Brett Kavanaugh, the majority said Thursday that, while timely forfeiture hearings are required, the Constitution doesn’t require a preliminary hearing to determine whether police can keep your property pending such a hearing. In declining to grant that “minimal safeguard,” Justice Sonia Sotomayor wrote in dissent, the majority “sweeps far more broadly than the narrow question presented and hamstrings lower courts from addressing myriad abuses of the civil forfeiture system.” Joined by Justices Elena Kagan and Ketanji Brown Jackson, Sotomayor wrote that she “would have decided only which due process test governs whether a retention hearing is required and left it to the lower courts to apply that test to different civil forfeiture schemes.” Kavanaugh was joined by Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch and Amy Coney Barrett. (Gorsuch joining the majority is somewhat notable, given his sometimes libertarian approach, and he did write a lengthy concurring opinion, joined by Thomas, that criticizes civil forfeiture — but that didn't stop them from going along with the majority.) Dissenting, Sotomayor recalled the procedural history of the appeal that the majority has stretched to reach this result. She noted that the court took the case to address the question of which test should govern due process challenges regarding retention hearings. Instead, she wrote, the majority “reaches far beyond that question to hold that people whose cars are seized by the police never have a due process right to a retention hearing.” The majority’s reasoning was flawed, too, she explained, because it takes precedent out of context. Sotomayor stressed that the ruling only applies to retention hearings and doesn’t “foreclose other potential due process challenges to civil forfeiture proceedings.” In light of Gorsuch’s separate opinion, there may be gettable court majorities against the government on future civil forfeiture–related appeals. Indeed, the Donald Trump appointee wrote that he agreed with the dissent “that this case leaves many larger questions unresolved about whether, and to what extent, contemporary civil forfeiture practices can be squared with the Constitution’s promise of due process.” So this may end up being a silver lining from the decision. On the broader point of the court making its decisions broader than it has to, the Democratic appointees’ dissent echoes their similar recent complaint in Trump v. Anderson. There they faulted the majority (with whom they agreed on the bottom line) for going further than necessary in cementing Trump’s place on the presidential ballot. Thursday’s decision in the forfeiture case, Culley v. Marshall, comes as the justices are starting to issue their final decisions of the term. Still among the pending rulings is Trump’s immunity appeal, in which the court has signaled it’s poised to go further than needed again and to further delay the federal election interference trial in the process. There are many more appeals for the court to decide — both related to the former president and otherwise — over the next couple months. Today, the court isn’t off to a great start. Subscribe to the Deadline: Legal Newsletter for weekly updates on the top legal stories, including news from the Supreme Court, the Donald Trump cases and more.
Cazoo car crash, skidding on a shares fall of 99.9%, ends an American dream | Nils Pratley 2024-05-09 18:22:00+00:00 - One of life’s unfairnesses, officials at the London Stock Exchange sometimes grumble, is that high-profile flotation flops in the UK tend to be remembered for years whereas IPO disasters in New York are quietly forgotten as the locals move on and look for the next big thing. The complaint has some merit. Take Cazoo, whose car crash for investors would surely have generated many more headlines if it had happened in London. The UK-based used-car website opted for a New York listing in 2021 because high-growth companies “are better understood by US investors”, as its founder, Alex Chesterman, put it at the time. Ho, ho. It turns out that the American assessment that Cazoo was worth $8bn (£6.4bn) could not have been more wrong. With the shares down 99.9% since debut, Cazoo quietly told its shareholders this week that the end of road may be nigh. It has filed a notice of intention to appoint administrators in the high court in London in respect of some of its “material subsidiaries”. Cazoo’s implosion is a shame, of course – not least for its employees (vastly reduced in number these days). The reputation for excellent customer service was deserved and the company proved one point in showing that punters are willing to buy cars online; it has sold 160,000 vehicles since launch in 2019. But the business model generated astonishing losses of £700m in 2022, and a retreat from continental Europe two years ago came as one of many “realignments”. In March, Cazoo said it would dispose of all its stock and adopt an “online marketplace” model serving the car dealers it was established to challenge. Higher interest rates and a UK recession haven’t helped, but the primary winners from this experiment in building a brand, while worrying about profits later, have been all those football clubs (Aston Villa, Everton and more) and sporting events (horse racing, darts, snooker, cricket) who benefited from Cazoo’s marketing budget. The company was god’s gift to the sports sponsorship industry. A stock market lesson here is that we should be more sceptical of the caricature that UK fund managers are a bunch of dinosaurs, who don’t “get” cash-burning tech companies. Sometimes investors are simply making rational judgments. If they wouldn’t award Cazoo a £6bn-plus valuation in London in 2021, that is surely to their credit. One that did get away in London in the 2021 vintage was Deliveroo, which was also absurdly overpriced (shares down two-thirds from the initial £7.6bn valuation) but it has not been a “floperoo” like Cazoo has. Deliveroo is still standing, is talking about the prospect of profits and has been buying back shares. The other lesson is for UK companies contemplating a Cazoo-style path to the US markets: the UK record over there ain’t great. Yes, there are successes – the Oxford-based biotech Immunocore Holdings and Arm Holdings – but the overall statistics are poor. The London Stock Exchange has inspected the public numbers (as it would) and found that, of the 20 UK companies that have raised over $100m in the US over the last decade, eight have already delisted, only three are trading above their IPO price, and the rest are trading down by an average of 71%. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Those numbers don’t even include the UK exports, such as Cazoo and the failed electric van firm Arrival, that adopted the briefly fashionable method of going public in the US via a special purpose acquisition company, or Spac; performance in that category has been worse. None of which alters the correct view, that the London stock market desperately needs an injection of new companies. But at least it avoided the Spac silliness.
Financial executive convicted of insider trading in case over acquisition of Trump’s media company 2024-05-09 18:12:22+00:00 - NEW YORK (AP) — A financial executive was convicted Thursday of enabling his boss and others to make over $22 million illegally by trading off his tips ahead of the public announcement that an acquisition firm was taking former President Donald Trump’s media company public. An agitated Bruce Garelick dropped his head and repeatedly wiped his face with his hands after a jury convicted him of all charges in Manhattan federal court. Garelick, who had testified in his defense, was convicted of tipping others in 2021 to news that the special purpose acquisition company, Digital World Acquisition Corp., or DWAC, was merging with Trump Media & Technology Group. Garelick sat on DWAC’s board. His co-defendants pleaded guilty before trial, admitting that they made over $22 million illegally. Sentencing was set for Sept. 12 for Garelick, who remains free on bail. The indictment against the men did not implicate Trump, who is seeking the presidency again this year as a Republican; or Trump Media & Technology Group, which owns his Truth Social platform and began trading on the NASDAQ stock market on March 26. When the events that led to the charges took place in 2021, Garelick, of Providence, Rhode Island, was chief investment officer of the New York-based venture capital firm Rocket One Capital LLC, though he has primarily worked in the Boston area throughout his career. The firm was owned by Michael Shvartsman of Sunny Isles Beach, Florida. Shvartsman and his brother, Gerald Shvartsman of Aventura, Florida, pleaded guilty several weeks ago to insider trading charges, admitting that they made over $22 million illegally. They are scheduled to be sentenced in July. During his testimony earlier this week, Garelick insisted that he did not possess any secrets about the potential merger when he bought securities in DWAC that eventually enabled him to earn nearly $50,000 in profits. And he said he followed the law by not sharing secrets with others. On cross-examination, though, a prosecutor confronted him with the fact that he said, “We made $20 million dollars” after the public announcement of the merger deal. “I did say those words, yes,” he admitted. “You said: ‘We made $20 million dollars on it,’” the prosecutor said. “That’s correct,” he answered.
Ford's recall of Bronco and Escape raises "significant safety concerns" federal regulators say 2024-05-09 18:04:00+00:00 - Investigation into Ford crashes involving Blue Cruise Investigation into Ford crashes involving Blue Cruise partially automated driving system 06:15 Federal regulators are questioning the method that Michigan automaker Ford took to repair thousands of SUVs it recalled early last month. In April, Ford recalled nearly 43,000 Bronco Sports and Escapes SUVs because gasoline can leak from the fuel injectors onto hot engine surfaces, increasing the risk of fires. Ford said the SUVs have fuel injectors that will crack, allowing gas or vapor to leak near the hot engine parts. Ford's remedy for the defect was to add a drain tube to send the gas away from hot surfaces, and a software update to detect a pressure drop in the fuel injection system. If that happens, the software will disable the high pressure fuel pump, reduce engine power and cut temperatures in the engine compartment. But the U.S. National Highway Traffic Safety Administration (NHTSA) says the tube method doesn't actually fix the problem. In a letter to Ford released Thursday, the NHTSA said its Office of Defects Investigation has opened an investigation into the recall, noting "significant safety concerns" about Ford's repair method. The NHTSA added that it "believes the remedy program does not address the root cause of the issue and does not proactively call for the replacement of defective fuel injectors prior to their failure." Ford said Thursday that it is working with the NHTSA during its investigation. Ford said the Bronco Sport and Escape recall is an extension of a 2022 recall for the same problem. The repair has already been tested on vehicles involved in the previous recall. In its letter, the NHTSA is asking Ford to send the agency details about the fuel injector fix, including any testing the company conducted to verify that their remedy resolved the fuel injector problem and the question of whether hardware repairs were needed. NHTSA is also asking the company to explain any other remedies that were considered and any cost-benefit analysis the company did when it selected the fix. The agency also wants to know how much fuel will leak and whether the amount complies with federal environmental and safety standards. It also wants to hear Ford's take on "its obligations (legal, ethical, environmental and other) to prevent and/or limit fuel leakage onto the roadway at any point during a vehicle's lifespan." NHTSA is also asking Ford to detail how the software will detect a fuel pressure drop, how much time elapses between cracking and detection, and what messages will be sent to the driver. It also asks what effect disabling the high-pressure fuel pump has on other fuel system parts, and how the SUVs will perform when the pump is disabled. Ford has to provide the requested information to NHTSA by June 21, the letter said. Depending on the results of its investigation, the agency can seek additional repairs that fix the fuel leaks. —The Associated Press contributed to this report.
UK farmers consider quitting after extreme wet weather and low profits 2024-05-09 17:51:00+00:00 - British farmers are considering walking away from their farms as the recent record run of wet weather has left the sector “on the brink”, rural bodies have warned. The Agriculture and Horticulture Development Board (AHDB) and the Soil Association raised concerns over the perilous situations facing many in their industry, with profits being squeezed and extreme weather driven by the climate crisis putting financial and mental strain on farm owners. Helen Browning, the chief executive of the Soil Association, said: “A lot of farmers are really considering their options, and thinking about walking away from their farms, as they could make far more money doing something else.” Browning, who runs a livestock and arable farm in Wiltshire, added: “If you were economically rational, you wouldn’t farm.” The trade bodies’ comments came during a briefing on Thursday run by the Energy and Climate Intelligence Unit (ECIU) thinktank ahead of the second annual Farm to Fork summit being hosted by Rishi Sunak at No 10 next week. The summit is expected to discuss the UK’s future food security against the backdrop of extreme wet weather that has affected four in five farms in the past 12 months. The UK has been hit by 11 named storms since September, and experienced the wettest 18-month period since records began in 1836. Tom Clarke, a board member at the AHDB, said the biggest effect on farms this year had been the poor weather, with many farms planting fewer crops, or no crops at all, due to fields being flooded. “It’s been a hell of a year, I think farmers across the UK are really on the brink, not only mentally, but financially and ecologically as well.” Clarke, who farms wheat, sugar and other combinable crops in Cambridge, said the rain meant some of his fields had no crops for the first time in decades, while a large percentage of those planted were in bad condition. The AHDB’s arable crop report for April showed that only 45% of winter wheat was rated as being in good or excellent condition in the month, well below the 88% in the same period last year. Clarke also pointed to the phasing out of EU basic payment scheme subsidies as another challenge faced by farmers. The payments were supposed to be replaced by the UK government’s sustainable farming incentive subsidies, but the rollout of these has been delayed. “This means that there is less money in the system for farmers, that affects the viability of farming economics in this country,” he said. skip past newsletter promotion Sign up to First Edition Free daily newsletter Our morning email breaks down the key stories of the day, telling you what’s happening and why it matters Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Last week, the National Farmers’ Union annual survey revealed that farmers’ confidence had hit its lowest level in at least 14 years, with 16% of respondents saying their farms were not profitable and may not survive – the highest percentage ever recorded. Thursday’s ECIU briefing also heard from the Food Foundation charity, which warned that the climate crisis in the UK and overseas was leading to price volatility and many British households were unable to cope with soaring costs. Anna Taylor, the charity’s executive director, said: “Inflation may be out of the news but a basic food basket remains 25% higher than it was two years ago and wages have not kept pace. “The result is 8 million adults and 3 million children living in food insecurity and struggling to put food on the table.”
Despite inflation complaints, Trump's second term plans involve raising prices on everything 2024-05-09 17:44:16+00:00 - Donald Trump has long cited his economics degree from the prestigious Wharton School as evidence of his “super genius stuff” skills in business. But if he were a student there right now, he’d get a failing grade for his proposals’ effects on rising prices. With polls showing that inflation remains a top concern among voters, the presumptive Republican nominee has somehow put together a campaign platform featuring multiple proposals that would raise prices on everything from groceries to new cars, both directly and indirectly. Some of the ideas would lead to higher prices as a side effect of tackling some other issue. Some might make sense if economic conditions were different. And some come from the oddball theories of his motley assortment of advisers. Lowering interest rates in the current environment would supercharge spending, spurring demand and, again, leading to higher prices for consumers. But added together, they amount to a massive own goal on one of the most important policy issues in the 2024 presidential election, with Trump undercutting one of his strongest arguments against President Joe Biden’s performance. There’s a lot to unpack here, but stick with us and we’ll walk through it step by step. Lesson No. 1: Tariffs lead to higher prices In recent decades, tariffs fell out of favor as the U.S. embraced free trade, allowing other countries to sell their goods cheaply here in return for American companies selling their wares overseas. Trump, who brought tariffs back into the mainstream, now wants to impose a 10% “universal tariff” on all imports, plus a 60% tariff on Chinese goods and a 100% tariff on foreign cars. But, as I’ve explained before, foreign companies respond to tariffs by raising the prices on their products sold in the U.S. The result? American consumers would pay more. Lesson No. 2: Low interest rates lead to higher prices When inflation is high, the Federal Reserve raises interest rates, making loans more expensive. That helps cool the economy, reducing the demand that is driving prices higher. Some Trump allies are reportedly drawing up plans to put the traditionally independent Federal Reserve more under the president’s control. And Trump has long made clear that he would actually prefer lower interest rates. But lowering interest rates in the current environment would supercharge spending, spurring demand and, again, leading to higher prices for consumers. Lesson No. 3: Tax cuts can lead to higher prices When taxes go down, people have more money in their pocket, and they’re likely to spend more of it. That’s not a bad thing; governments facing a recession will often cut taxes to boost spending and get things back on track. In his campaign, Trump has proposed making permanent the individual and estate tax cuts from his 2017 bill that are set to expire and keeping the corporate income tax rate at 21%. There are all kinds of arguments on both sides about the wisdom of these proposals (and Biden wants to cut some taxes, too) but suffice to say, they would probably end up boosting spending and increasing demand. Coming on top of Trump’s other inflationary proposals, that would likely lead to higher prices as well. Lesson No. 4: Fewer workers leads to higher prices When you buy something at the store, a big chunk of the price is determined by how much the company had to pay its workers. When the labor pool is tight, as it is right now, salaries go up, and so do prices. Again, not always a bad thing. But Trump’s hard-line immigration plans would further shrink the labor force. He’s proposed tightening worker visas, changing immigration laws, cutting the number of refugees and rolling back Temporary Protected Status designations. He has also proposed large-scale raids and deportations of potentially millions of undocumented immigrants. Depending on the scale and success of these various proposals, the U.S. labor force could be reduced dramatically as a result, again, leading to higher prices. Lesson No. 5: A weak dollar leads to higher prices Everyone loves the dollar. When foreign investors get nervous, they exchange their own currency for the greenback. When foreign leaders want to keep their currency stable, they tie its value to the dollar. All of this has led to what is called the “strong dollar.” A top Trump adviser has called for undoing that, seeking to devalue the dollar in an effort to boost U.S. exports. The resulting “weak dollar” would have complicated effects on the global economy, but a major side effect here in the U.S. would be to make imports even more expensive. Again: higher prices. In conclusion, prices would rise under Trump On their own, these proposals can be defended by reasonable people. Economics is complex, and there are always trade-offs. But each of them just happens to have a downside of raising prices at a time when high inflation is a major concern for voters. As the terminally online might put it: Tariffs? In this economy? These proposals also wouldn’t happen in isolation. If Trump succeeds with all of these plans, American consumers will pay more for imported goods, while the economy overheats due to increased spending, right as domestic manufacturers find themselves paying more in labor costs due to worker shortages. Then there’s the risk of trade wars and global economic turmoil caused by massive shifts in U.S. policy. All of this points to higher and higher prices. The economic misery that would bring would end up being studied for years to come in textbooks bought by students at Trump’s alma mater of Wharton. “Super genius stuff” indeed.
Third pilot of household hydrogen heating shelved by UK government 2024-05-09 17:20:00+00:00 - A third pilot project to test the use of hydrogen heating in homes has been shelved by the UK government in the clearest sign to date that households will rely on electricity for low-carbon heating in the coming decades. The government said it would shelve plans to develop a “hydrogen town” to test whether hydrogen could help to heat homes at scale before taking a final decision after 2026. The decision comes after the government abandoned plans for two smaller “hydrogen village” trials – in Redcar, on Teesside, and at a village near Ellesmere Port, Cheshire – after months of strong opposition from concerned residents who feared they may become unwilling “lab rats” for a technology that would never take off in the UK. The government said in a statement that it still believed that low-carbon hydrogen “may have a role to play” in cutting emissions from the UK’s heating sector, alongside heat pumps and low-carbon heat networks, “but in slower time in some locations”. “We plan to take a decision in 2026 on whether, and if so how, hydrogen will contribute to heating decarbonisation,” it said. The government is due to make a decision about whether its net zero climate plans will include replacing household gas with hydrogen by 2026. It will assess evidence from a pilot in Fife in Scotland, and similar schemes in Europe. Many experts, including the government’s infrastructure tsars, believe that the UK should focus its efforts on electric heating options, such as heat pumps, while hydrogen should be reserved for use in heavy industry, which is not always able to use electricity. Juliet Phillips, the head of UK energy at E3G, an independent climate change thinktank, said the government’s decision had made clear “that all attention and investment should be focused on readily available clean heat solutions, like heat pumps and heat networks. “Discussions on hydrogen for heating are an unhelpful distraction that muddy the waters on the future of how we heat our homes,” she said. “Widespread use of hydrogen for heating is widely understood to be an extremely expensive and inefficient way to meet net zero targets, which could exacerbate fuel poverty.” Jess Ralston, the head of energy at the Energy & Climate Intelligence Unit , said the decision would pave the way for more investment into heat pumps, which boost energy security by lowering the amount of gas the UK needs to import, as output from the North Sea continues to decline. “The US and Europe are already installing heat pumps in their millions in response to the gas crisis that has already cost the UK over £100bn, and it looks like we might be starting to catch up,” she said.
Financier Found Guilty in Trump Media Insider Trading Trial 2024-05-09 17:15:07+00:00 - A federal jury in Manhattan on Thursday convicted a financial executive on securities fraud charges arising from a multimillion-dollar insider trading scheme that involved the merger of former President Donald J. Trump’s social media company with a publicly traded shell company. Federal prosecutors had charged Bruce Garelick with five counts of securities fraud and conspiracy. The authorities claimed Mr. Garelick leaked confidential information to his boss and at least one other person that Trump Media & Technology Group, the parent company of Truth Social, was getting close to announcing a merger in October 2021 with Digital World Acquisition Corporation, the shell company. The information helped two brothers — Michael Shvartsman and Gerald Shvartsman — make nearly $23 million in illegal trading profits by buying Digital World securities in advance of the announcement, which sent the stock soaring. Mr. Garelick, who worked for Michael Shvartsman at a small Miami-based venture capital firm, Rocket One, made about $50,000 by trading off what the authorities said was nonpublic information. Last month, the Shvartsman brothers decided to forgo a trial and pleaded guilty to securities fraud charges. In their plea agreements, prosecutors have recommended a sentence of roughly four to five years for Michael Shvartsman and three to four years for his younger brother.
Neuralink brain-chip implant encounters issues in first human patient 2024-05-09 17:04:00+00:00 - Elon Musk's "Neuralink" looks to implant chips into the human brain "Neuralink" looks to implant chips into the brain "Neuralink" looks to implant chips into the brain Neuralink's brain-computer interface device has encountered issues since it was implanted in its first human subject, according to the company owned by Elon Musk. Some of the device's electrode-studded threads started retracting from the brain tissue of quadriplegic Noland Arbaugh about a month after it was surgically implanted in late January, causing it to transmit less data, Neuralink wrote in a blog post on Wednesday. The Wall Street Journal first reported on the malfunction that caused a reduction in bits-per-second, a measure of the speed and accuracy of the patient's ability to control a computer cursor by thinking. Neuralink made up for the malfunction with multiple software fixes, resulting in a "rapid and sustained improvement in BPS, that has now superseded Noland's initial performance," the company said. The company is now focused on improving text entry for the device and cursor control, which it hopes in the future to broaden its use to include robotic arms and wheelchairs. Neuralink in September said it had received approval from U.S. regulators to recruit human beings for the trial as part of an effort to use technology to help people with traumatic injuries operate computers with only their thoughts. The Food and Drug Administration approved the trials of the device, which has not been given broad regulatory approval needed for widespread or commercial use of the technology.
Post Office deceived barrister reviewing Horizon conviction, inquiry hears 2024-05-09 16:49:00+00:00 - A barrister who advised the Post Office to stop prosecuting branch owner-operators told a public inquiry he was “now sure” that the state-owned company “must have deceived” him because it failed to provide him with “highly relevant material”. Simon Clarke, who worked for the law firm Cartwright King when it was advising the Post Office, was being questioned on Thursday as part of the judge-led hearings looking into the Horizon IT scandal. The inquiry is examining the wrongful prosecution of hundreds of branch owner-operators who were hounded by the Post Office because of financial shortfalls in their branch accounts that turned out to be caused by IT bugs in the Horizon computer system. Clarke said in his witness statement that in hindsight: “I am now sure that POL [Post Office Ltd] must have deceived both me and CK [Cartwright King]; I say this because it is now obvious to me that highly relevant material was not provided to me either at all, or when it should have been provided. I conclude that this failure to properly inform me was a decision taken by those in a position to do [and] act as they did.” He told the inquiry he felt the Post Office had “deliberately withheld” a key document from him when he was asked in 2014 to review the case of Seema Misra, a branch operator who had been wrongly convicted in 2010 and who was seeking to overturn her conviction. Misra was sentenced to 15 months in prison for theft and was jailed on her son’s 10th birthday while eight weeks pregnant. She was among those exonerated by the court of appeal in 2021. Clarke said that when he began to review Misra’s case, he was told the Post Office’s prosecution file was not available. He told the inquiry he now believed it was “deliberately withheld” from him. “That is now my view, he said, adding: “It crystallises my view that I was misled and deceived.” He said he also felt “misled and deceived” in general. “Post Office repeated their protestations that since day dot there was nothing wrong with Horizon when clearly they knew there were issues,” he told the hearing. Clarke wrote the key legal advice for the Post Office in July 2013 that made it clear there was a problem with its past prosecutions because the state-owned company had relied on testimony from the expert witness Gareth Jenkins, who was an engineer at Fujitsu, the company that developed the IT system. The barrister concluded in his legal advice that Jenkins was an “unreliable witness” who may have breached his duties to the court by failing to disclose information he knew about bugs in the Horizon software to defendants who could have used it to challenge their convictions. Clarke said prosecutions of branch owner-operators effectively stopped after he had produced his 2013 advice and he said in his witness statement that he was now “professionally and personally proud” of that fact. skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion By 2015, the internal view at Cartwright King was that the law firm “had been mis-instructed” by the Post Office about whether the IT system could be accessed remotely by Fujitsu staff, he said. “By this time, we were coming to the realisation that something was seriously wrong with POL’s corporate culture when dealing with Horizon-related issues whether in a criminal or civil arena,” he added. The inquiry continues.
Here's the Income and Net Worth You Need to Reach the Top 50% of American Households 2024-05-09 16:45:00+00:00 - Every three years, the Federal Reserve publishes a financial snapshot of the American population with its Survey of Consumer Finances (SCF). The report explores income, net worth, asset ownership, and debt burden across households in different economic and demographic categories. The most recent SCF was conducted in 2022. American households reported an average annual income of $141,900 and an average net worth of $1 million. However, averages are skewed by outliers in the data. For instance, 10% of American households control about two-thirds of total household wealth. As a result, the median -- which simply selects the middle value -- is more informative than the average when dealing with asymmetrical data. Read on to see the median income and net worth by age among American households. Image source: Getty Images. The median income and net worth by age The median is also referred to as the 50th percentile. That means 50% of the values are smaller than the median, and 50% of the values are bigger than the median. The chart below shows the median income and net worth by age (of the reference person) among American households. For context, net worth is equal to assets minus liabilities. Age Median Income Median Net Worth 34 and younger $60,500 $39,000 35-44 $85,900 $135,600 45-54 $91,900 $274,200 55-64 $81,900 $364,500 65-74 $60,900 $409,900 75 and older $49,100 $335,600 All households $70,300 $192,900 Source: Federal Reserve 2022 Survey of Consumer Finances (SCF). The chart shows the median income and median net worth by age among American households. Note: For couples, the reference person is the male in mixed-sex couples and the older individual in same-sex couples. As shown above, the median income was $70,300 in 2022, meaning households that earn more income are in the top 50%. Similarly, the median net worth was $192,900 in 2022, meaning households with more wealth are in the top 50%. Readers may be curious about other distributions. The chart below shows the median net worth for American households at the first quartile (25th percentile), the second quartile or median (50th percentile), the third quartile (75th percentile), and the top decline (90th percentile). Percentile Net Worth 25 $27,100 50 $192,900 75 $658,900 90 $1.9 million Source: Federal Reserve 2022 Survey of Consumer Finances. The chart above shows the median net worth among American at the 25th, 50th, 75th, and 90th percentiles. Statistical jargon can be tedious. Here's how to interpret the data shown in the chart: Story continues 25% of households reported a net worth under $27,100, which means 75% reported a higher net worth. 50% of households reported a net worth under $192,900, which means 50% reported a higher net worth. 75% of households reported a net worth under $658,900, which means 25% reported a higher net worth. 90% of households reported a net worth under $1.9 million, which means 10% reported a higher net worth. That information will likely elicit one of two reactions. Some readers will feel happy and other readers will feel disappointed by their current financial position. However, individuals in either group can grow their net worth through prudent budgeting and smart investments. Increase your net worth through prudent budgeting Financial advisors often recommend the 50-30-20 rule for budgeting money. In that scenario, an individual would divide their income into three groups, as detailed below: Needs: 50% of income should be allocated to necessities like food, housing, utilities, and minimum debt payments. Wants: 30% of income should be allocated to nice-to-have items like travel, entertainment, and luxury goods. Savings: 20% of income should be allocated to debt payments (above the minimum) and retirement savings. The 50-30-20 rule leaves some wiggle room where debt payments are concerned. To elaborate, minimum debt payments count against income allocated to the needs category because they are nonnegotiable. Incurring late fees or penalties is tantamount to throwing money away, so individuals should do everything in their power to make those minimum payments. However, financial advisors generally recommend paying more than the minimum on high-interest debt, meaning debt that carries an interest rate of at least 8%. In other words, it makes sense to pay down high-interest debt before saving money in 401(k) plans, individual retirement accounts (IRAs), or brokerage accounts. Why? The outstanding balance on high-interest debt is likely to snowball more quickly than the capital gains earned on investments. That means individuals that prioritize investment accounts over high-interest debt payments could actually dig themselves a deeper hole. Asset management company Vanguard provided the following insight in a blog post: "We believe you should first prioritize paying off any high-interest debt like credit cards. But for debt that's comparatively low interest, it's a good idea to compare the debt's interest rate against the rate of return you hope to achieve with your investments." Increase your net worth with an S&P 500 index fund One of the easiest ways to make money in the stock market is to buy and hold an index fund that tracks the S&P 500 (SNPINDEX: ^GSPC). The S&P 500 is a popular benchmark for the overall U.S. stock market. The index comprises 500 large companies, representing value stocks and growth stocks, that span all 11 market sectors. There are two primary reasons investors should consider an S&P 500 index fund. First, the index has increased in value over every rolling 20-year period in history, meaning investors that patiently hold an S&P 500 index fund are virtually guaranteed to make money. Second, more than 87% of large-cap funds underperformed the S&P over the last decade, meaning even professional money managers struggle to beat the index. With that in mind, the S&P 500 returned 1,950% during the last three decades, compounding at 10.5% annually. At that pace, $200 invested monthly in an S&P 500 index fund (less than $50 per week) would be worth $15,600 in half a decade, $42,100 in one decade, and $162,100 in two decades. As a caveat, readers should not assume the S&P 500 will return 10.5% every single year, but rather that it will return an average of roughly 10.5% per year (plus or minus a point or two) over long periods. Should you invest $1,000 in S&P 500 Index right now? Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $554,830!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. See the 10 stocks » *Stock Advisor returns as of May 6, 2024 Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Here's the Income and Net Worth You Need to Reach the Top 50% of American Households was originally published by The Motley Fool
Biden finally appears to find his red line on Gaza 2024-05-09 16:38:34+00:00 - President Joe Biden said he will halt weapon shipments to Israel if it launches a ground invasion on Rafah, the southernmost city in Gaza where approximately 1.3 million people are sheltering. “If they go into Rafah, I’m not supplying the weapons that have been used historically to deal with Rafah, to deal with the cities — that deal with that problem,” Biden told CNN on Wednesday. “We’re going to continue to make sure Israel is secure in terms of Iron Dome and their ability to respond to attacks that came out of the Middle East recently,” he said. “But it’s — it’s just wrong.” It is the first time that Biden has articulated any sort of restrictions on U.S. arms shipments to Israel in this war. For seven months, as the death toll in Gaza climbed to more than 34,000 and most of its population became displaced, Biden publicly refused to place conditions on U.S. military support for Israel’s war on Hamas, even as he publicly urged Prime Minister Benjamin Netanyahu to protect civilians in Gaza and approved airdropping aid to a starving population. But it seems the president may have reached the limits of his support for Israel’s brutal military campaign in Gaza, which began after the Oct. 7 Hamas attack that killed 1,200. Netanyahu has long vowed to launch a full-scale invasion of Rafah to eliminate what Israel has called the last Hamas stronghold. Israel’s military has continued to bomb cities in Gaza, including Rafah, but amid reports of an imminent invasion, the U.S. announced on Wednesday that it had paused shipments of 2,000-pound bombs to Israel. In his interview with CNN, Biden acknowledged that those deadly bombs have been used to kill civilians. “Civilians have been killed in Gaza as a consequence of those bombs,” he said. But, Biden added, Israel’s current attacks on Rafah do not meet the threshold for pulling other weapon shipments. “They haven’t gone into population centers. What they did is right on the border,” he told CNN. “But I’ve made it very clear to Bibi and the war Cabinet, they’re not going to get our support if in fact they do go into those population centers.” Meanwhile, Republican leaders — who have sought to exploit divisions within the Democratic Party to portray themselves as the pro-Israel party — criticized Biden over his latest remarks. “I hope it’s a senior moment, because that would be a great deviation in what is said to be the policy there,” House Speaker Mike Johnson told Politico.
FDA issues recall statement after insulin pump-related IOS app causes injuries 2024-05-09 16:00:00+00:00 - The FDA has issued a statement following the Class I recall for an IOS app used in conjunction with insulin pumps after 224 injuries were reported. The mobile app in question is version 2.7 of t:connect, which functions with the t:slim X2 insulin pump with Control-IQ technology. While the FDA says the recall is a correction rather than a product removal, more than 86,000 devices have already been recalled in the U.S. According to the FDA, Tandem Diabetes Care Inc., the company behind the app, issued the recall due to an issue with the software which may result in the app crashing and automatically relaunching repeatedly. This leads to excessive Bluetooth communication which could drain the battery life of the insulin pump, causing it to shut down abruptly. Such a shutdown could delay insulin delivery to the body and cause life-threatening injuries and conditions like hyperglycemia or diabetic ketoacidosis. The FDA statement said Tandem Diabetes Care Inc. sent all affected users a letter which requested they update the software to version 2.7.1 or later, which is currently available for download in the Apple App Store. Customers are then to complete an online form confirming receipt of the notice and are expected to monitor the pump battery level closely at all times. The FDA also encourages users to carry backup supplies for insulin delivery should pump failure persist. Customers with any questions or concerns regarding the recall can reach Tandem Diabetes Care Inc. at (877) 801-6901.
A Little-Known Way Home Buyers Can Beat High Mortgage Rates 2024-05-09 15:52:58+00:00 - Home prices were already high when Ellen Harper, a software architect living in Atlanta, started searching for a house in 2021. But she couldn’t have anticipated the quick surge in interest rates the following year and, even with a large down payment, the new math made her uneasy. Earlier this year, however, she stumbled upon what felt like a portal to the not-so-distant past: listings of thousands of homes that come with a low-rate mortgage, which can be transferred from the existing homeowner to a new home buyer, known as an assumable mortgage. Ms. Harper, who is in her 50s, managed to snag one of these homes, closing two weeks ago on a four-bedroom brick colonial, in Fairburn, Ga., with a $1,400 monthly payment. It’s an amount she’ll be able to comfortably afford into retirement thanks, in large part, to a 2.49 percent mortgage rate. That’s less than half the current rate of 7.09 percent on 30-year-fixed loans, the most popular type of mortgage. “I didn’t want to get a bad mortgage and be in a ball and chain situation where all I would be able to do is pay the mortgage,” Ms. Harper said. She found her home through Roam, a start-up that went live in September that lists homes with assumable low-rate loans, and assists buyers through the process. “There were other homes — they were nice and everything,” she added, “but I went for the lowest rate I could find.”
Right-wing group offers money for voter fraud allegations 2024-05-09 15:36:33+00:00 - Republicans’ election denialism has ramped up in recent months, the most notable example being an April press conference in which former President Donald Trump and House Speaker Mike Johnson peddled false claims about immigrants swaying federal races. Noncitizens, of course, are not allowed to vote in federal elections, and neither Johnson nor his party have provided any proof that undocumented people are doing this at any scale that would influence federal races. That was made clear yet again at a press conference Tuesday, when Johnson falsely claimed “we all know” that “illegals” are voting in federal elections, but then conceded that that conclusion is mostly vibes-based because “it’s not be something that’s easily provable.” Big “I have a girlfriend, she just goes to another school” vibes from Johnson there. And to get to the bottom of these vibes, right-wingers are pulling out all the stops in an effort to conjure up some proof or, failing that, the next best thing — propaganda. Fox News reported last weekend that a conservative organization is embarking on a multimillion-dollar campaign to crowdsource stories of purported voter fraud to spread far and wide. The Fair Election Fund (its name apparently taken directly from Newspeak) is offering to pay people who come forward with claims that support the GOP’s voter fraud conspiracies. The organization claims such allegations will be used in “aggressive paid and earned media campaigns.” One could argue the financial incentive is basically inviting a deluge of nonsensical voter fraud claims. To that, however, the organization's press release says allegations will be vetted by a team of "experienced election law attorneys." The release doesn't name these attorneys (in fact, the website doesn't identify anyone involved), but lawyers can get suckered by election conspiracies, too. Just ask Jenna Ellis, John Eastman, Ken Chesebro and Rudy Giuliani. So we’re likely to see a lot of bigoted fearmongering about undocumented people's nefarious influence over U.S. politics and society as a whole, similar to some of the right-wing ads and conservative media coverage about purported spikes in violent crime. Even without wielding the full power of the federal government, right-wingers are devising ways to surveil and potentially intimidate their perceived enemies. Because Republicans love a tip line: for Americans to report people who’ve received gender-affirming health care or abortions in states where draconian laws have banned these things; to catch teachers whose lesson plans reference racism; to snitch on transgender people just trying to use the bathroom. And this proposal marks yet another right-wing initiative that promotes snooping on your neighbors, a trend some writers have noted is emblematic of repressive societies.
Senate Races to Pass Bill to Reauthorize F.A.A. and Improve Air Travel 2024-05-09 15:19:12+00:00 - The Senate is racing against a Friday deadline to pass legislation to reauthorize the Federal Aviation Administration at a moment of intense uncertainty and disruption in the air travel system, but a host of policy disputes and unrelated issues are threatening to prolong the debate. As one of the few remaining bills considered a must-pass item this year, the F.A.A. package has become a magnet for dozens of amendments and policy riders that lawmakers are fighting for a vote on, which has slowed its progress in the Senate. Regional interests have also scrambled the usual political alliances among lawmakers, making quick action trickier. “All of us need to work constructively and with urgency to finish the job on F.A.A.,” Senator Chuck Schumer of New York, the majority leader, said on the Senate floor on Wednesday. “Nobody, absolutely nobody, should want us to slip past the deadline. That would needlessly increase risks for so many travelers and so many federal workers.” The bill, which would reauthorize the agency for the next five years, would provide more than $105 billion to the F.A.A. and another $738 million to the National Transportation Safety Board for airport modernization, technology programs and safety. It also would bolster the hiring and training of air traffic controllers, codify airlines’ refund obligations to passengers and strengthen protections for passengers with disabilities.
A Pithy YouTube Celebrity’s Plea: Buy This Video Game 2024-05-09 15:00:10+00:00 - Freewheeling assessments of the gaming industry have attracted millions of fans to the YouTube reviews of the personality nicknamed Dunkey, whose self-deprecating humor sweetens his critiques of popular video games. “Kirby is a lot like me,” he said while reviewing the pink puffball’s latest adventure. “He is a big fat guy that sucks up all the food.” “I’m just a referee on this one so you cannot get mad,” he explained in a middling review of Spider-Man 2, aware of the game’s rabid fan base. “This is an evil game made by an evil man,” he proclaimed about Elden Ring’s difficulty. “And whoever’s job it was to balance the damage-scaling on enemies did not show up for work.”
Roblox: The Bottom Just Fell Out of the Metaverse 2024-05-09 13:41:00+00:00 - Key Points Roblox's good quarter is overshadowed by high expectations and weak guidance, resulting in a 30% stock implosion. The company is growing and building leverage, but the stock may not rebound soon. Expect analysts to provide a headwind for stock prices with downgrades and lowered price targets. 5 stocks we like better than Roblox There were high hopes for Roblox NYSE: RBLX going into the Q1 release, and they were shattered on the rocks of reality. The reality is that the metaverse, as neat as it sounds, just isn’t producing the accelerating growth that market participants had come to expect. The last report, Q4 2023, provided hope and pointed to much stronger results than were reported for Q1. The Q1 results aren’t bad but are far short of expectations and compounded by even weaker guidance that has deflated the market. The upshot is that Roblox may now trade at a reasonable level. The market is down 30% from the pre-release level in pre-market trading and is still above critical support at the bottom of its trading range. The market may fall another 10% to retest the bottom, but support is expected to be as strong at this level as it has been. The risk is that RBLX shares will fall to a new low, opening the door to a deeper decline that could shave another 50% off the price. Get Roblox alerts: Sign Up Roblox's Good Quarter Falls Far Short of Expectations Roblox Today RBLX Roblox $30.42 -8.61 (-22.06%) 52-Week Range $24.88 ▼ $47.20 Price Target $47.60 Add to Watchlist Robust bookings figures from Q4 led the market to expect a significantly larger growth spurt in Q1 and 2024. The Q1 revenue of $801.3 million is up 22% compared to last year and slightly outpaced the consensus estimate but is offset by whisper numbers that were higher, weak bookings and guidance. The booking miss is more profound, considering that analysts have been trimming their targets and lowered the bar during the quarter. Also, top-line growth is slowing from the high-20% range to the low-20% range and may fall into the teens by year-end. Bookings in Q1 came in at +19%, decelerating from +25% in Q4, suggesting additional slowdown should be expected. The internal data is not all bad but aligns with an outlook for decelerating growth. Average daily active users and average monthly unique players grew solidly at 17% and 13%, but the growth slowed sequentially from 22% and 18%, with no pickup expected this year. Bookings growth is sequentially flat at up 6% but is offset by decelerating engagement growth. Hours are up only 2% compared to 21% in Q4 and unlikely to accelerate this year. The margin news is the best, but it comes with a caveat. The company significantly improved its operating losses, cash flow, and free cash flow to drive outperformance on the bottom line but at the cost of investment. The business cut its CAPEX by 50%, which may have something to do with the quarterly results, but GAAP losses persist. Guidance is among the worst news items. The company lowered its guidance for FY bookings, increased its outlook for annual losses, and provided a weak outlook for Q2, which may lead to another guidance reduction for this tech stock. Expect Analysts to Cap Upside for Roblox Roblox MarketRank™ Stock Analysis Overall MarketRank™ 3.09 out of 5 Analyst Rating Moderate Buy Upside/Downside 56.3% Upside Short Interest Healthy Dividend Strength N/A Sustainability N/A News Sentiment 0.54 Insider Trading Selling Shares Projected Earnings Growth Decreasing See Full Details Ironically, Roblox is listed among the Top Rated Stocks by analysts on the Marketbeat platform. That is because the trend in analysts' sentiment has been bullish over the last twelve months, playing into the post-release disappointment felt today. Upgrades and price target revisions lifted the rating to Moderate Buy from Hold and the price target by 25%, but that trend is unlikely to continue. Investors should expect downgrades and price target reductions over the next few days and weeks. The risk now is that Roblox will remain range-bound and at the low end of its range. The technical outlook could be better. The 30% discount is an attractive entry but may not lead to gains soon, if at all. Roblox is growing and building leverage but continues to struggle with growth outside of its largest demographic, nine to twelve-year-olds, and profitability is still years away. With growth slowing and analysts on track to reset the consensus outlook, the risk of a new low is high. Before you consider Roblox, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Roblox wasn't on the list. While Roblox currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Airbnb Stock Plummets After Earnings, But is It a Buy? 2024-05-09 13:25:00+00:00 - Key Points Airbnb stock is plummeting by 8.5% after reporting first-quarter 2024 earnings, an opportunity for investors to squeeze. The business fundamentals grew, with free cash flow leading into a potential multi-bagger. Wall Street analysts and markets agree that Airbnb is a winner. 5 stocks we like better than Booking First-quarter earnings are arguably the most important reports for any stock to release, as they set the tone for the rest of the year and give investors insight into their current—and potential—holdings. After reporting its own set of first-quarter 2024 results, shares of Airbnb Inc. NASDAQ: ABNB fell by 8.5% on what could be the wrong conclusions coming from the market. After digesting what happened within the company’s financials, investors could renew their hopes to see Airbnb stock return to its former glory and even make potentially new all-time high prices. Markets and analysts give investors enough evidence to believe in Airbnb’s bullish potential, but that’s not all. Get Booking alerts: Sign Up Compared to peers like Booking Holdings Inc. NASDAQ: BKNG and Trip.com Group Limited Inc. NASDAQ: TCOM, Airbnb holds the most market attention for good fundamental reason. Investors could soon realize that the price reaction is more part of a broader economic worry within the consumer discretionary sector. Understanding Investor Worries After expanding month after month since 2020, the ISM services PMI index has fallen into a contraction, according to its latest reading for April 2024. Because discretionary spending and services stocks like Airbnb fall into this category, investors may have gotten slightly spooked. Nothing wrong with taking profits – if there are any -though investors should consider if they can stomach the realization of how many percentage points of upside they potentially left on the table. The services sector isn’t the only one contracting; manufacturing businesses have also been contracting for over 15 months. Because of this, the Federal Reserve (the Fed) may consider cutting interest rates sooner rather than later, even with stubbornly high inflation rates. Rate cuts could push consumer discretionary spending toward Airbnb, as it is directly tied to domestic and international travel budgets. At the same time, even if the Fed doesn’t cut rates, rent inflation is reported to be one of the main drivers of the sticky U.S. inflation rates experienced today. Because consumers – in their right minds – won’t lock in leases at record high rates, nor are they looking to finance a new home at 7.5% mortgages and an average home price that is now 32% higher than pre-pandemic prices, Airbnb also becomes a solution for those looking to weather the housing inflation storm. Airbnb’s Fundamentals Show The company’s key performance indicators (KPIs), such as gross booking value and nights and experiences booked, rose by attractive rates over the year. According to management’s shareholder letter, gross bookings jumped by 12% to reach $22.9 billion, with nights and experiences booked advancing by 9.2% during the same period. Because of these drivers, Airbnb’s revenues rose by 18% over the year, far from the potential fears coming from investors today. Net income broke a first-quarter record of $264 million, or a 12% jump over the year. But here’s where investors can get all the benefits. Airbnb’s free cash flow (operating cash flows minus capital expenditures) reached $1.9 billion, or a margin of 41%. Using this significant free cash flow, management bought back as much as $750 million worth of stock in the past quarter. Share buybacks typically mean management – the true insiders – think the stock may be undervalued or has a high probability of heading higher shortly, and that’s something that markets and Wall Street analysts agree on. Wall Street’s Take: Airbnb’s a Winner Airbnb analysts could be conservative in their expectations of 16.8% EPS growth in the next 12 months since the company’s reported app downloads rose by 60% over the year, and the past quarter saw EPS growth of 127% alone. Because of this wide runway ahead for the stock, markets felt comfortable bidding it up in all the important ways. Starting with price action, Airbnb stock trades at 93% of its 52-week high, suggesting bullish momentum ahead. On a forward P/E basis, or how markets place a value today on tomorrow’s earnings, Airbnb leads the way. A multiple of 30.2x puts Airbnb at 73% above Booking’s 17.4x valuation. Airbnb is also above Trip.com’s 14.8x multiple, or a premium of roughly 104%. Stocks trade at premium valuations for good reason, and investors can point to the company’s financials when questioned. Analysts at the Mizuho Financial Group also saw good reasons to boost Airbnb’s price targets higher, this time to $200 a share, or 26.5% higher than today’s prices. Over the past month, despite contracting services data and an inflation-choked housing market, short interest for Airbnb stock declined by 7.4%, meaning bears won’t even act on harmful data, knowing the company’s fundamentals may rise above the current trends. Before you consider Booking, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Booking wasn't on the list. While Booking currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here