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The federal government can do more about home costs than you think 2024-05-08 19:04:00+00:00 - The cost to buy a home has reached historic highs in the U.S. — the median price of a home is $420,800, according to the Federal Reserve Bank of St. Louis — and housing and mortgage costs are increasingly turning into a November election issue. Home shoppers today need to an annual income of $114,000 in order to comfortably afford a typical home in the U.S., according to Redfin, nearly double what was needed to afford a typical home in 2020. That figure is far above the 2022 median household income of $74,580, according to the Census Bureau. Higher monthly payments are driven by higher home prices as well as significantly higher interest rates. Mortgage interest rates, which dipped to an historic low of 2.65% on a 30-year fixed mortgage in 2021, have soared beyond 7%, higher than they've been since 2001. Interest rates are set by the independent Federal Reserve, and President Joe Biden has insisted on the Fed's independence. The Federal Reserve has been raising interest rates since 2021 in order to combat stubborn inflation. So what tools does the federal government have at its disposal to make home ownership more affordable? Here are things the Biden administration and Congress could consider, according to experts who study the issue. Provide tax benefits for builders who produce entry-level homes There should be an effort to increase the housing stock, particularly of smaller, entry-level homes, several experts agree. Once interest rates are removed from the picture, "then you're left focusing mainly on the supply shortfall," said Jim Parrott, fellow at the Urban Institute and former Obama White House economic adviser. The housing market has seen a severe shortage of smaller starter homes, Parrott said. Builders, he said, are incentivized to build large, often mansion-like homes, which more easily turn a profit. "The cost of building larger homes tends to be quite high, and it's easier to recoup those costs if you're making big, expensive homes," Parrott said. The federal government needs to "make the math for building homes at the bottom of the market more favorable" for developers, Parrott suggested. And Congress can do this with the tax code. One approach would be to give a tax cut to any builder who constructs a residence for a first-time home buyer at below the median home price, Parrott said. "You need to provide some sort of tax benefit for building homes in the parts of the market where we need them the most," Parrott said. But getting this divided Congress to work together on something like this would be challenging, Parrott said. "I'm afraid that the legislative environment right now just isn't conducive to this sort of big, bipartisan effort," Parrott said. "Hopefully after the election we'll see a reboot that provides a more hopeful window." Withhold funding from localities that don't change zoning laws Most of the control over zoning lies with state and local governments. And states have been working to overhaul zoning to ease restrictions on denser residential construction. But the federal government isn't entirely powerless on zoning. Parrott said the federal government has used a carrot approach to encourage localities to rezone in favor of denser housing, but now he thinks maybe it's time to use a stick. For instance, any federal funding for communities could be conditioned on how zoning decisions are made. Communities receive substantial financial support from the Department of Housing and Urban Development (HUD), the Transportation Department and other agencies for projects, Parrott noted. "If federal policymakers were to condition even a little bit some of that funding on whether or not local decision-making is supportive of or prohibitive of more density,...then you could begin to change things at the local level in a way that would really matter," Parrott said. Such a move would be almost certain to trigger strict opposition from localities and unions. But more states have already been enacting legislation to supersede local zoning rules, said Alex Horowitz, director of housing policy at The Pew Charitable Trusts. Horowitz said nine states have passed laws allowing accessible dwelling units or ADUs — like small, independent, mother-in-law suites — on homeowners' properties. Sell federal land to use for housing "The federal government owns hundreds and hundreds of millions of acres, and we're not talking about the National Parks here," said Edward Pinto, co-director of the American Enterprise Institute's Housing Center. But that's a proposal that Congress would need to authorize. It has been tried. Sen. Mike Lee's HOUSES Act of 2022 would have approved the sale of federal land to states and localities for below-market rates for housing projects. The federal government owns two-thirds of the land in Lee's home state of Utah, and the gap between median household income and median home cost is largest in the West, according to HUD. But his bill went nowhere. The Bureau of Land Management, which oversees federal land, said in written Senate testimony that it would be forced to "sell land without sufficient evaluation of the values to the public or to future generations, or sufficient compensation to the American taxpayer." The sale of unused land could also attract opposition from environmentalist groups, though sometimes that can be overcome. In March, Washington Gov. Jay Inslee signed a law that will allow that state's Department of Natural Resources (DNR) to transfer some of its property to localities to build affordable housing. Washington state GOP Rep. April Connors, who introduced the bill, noted that that the DNR had 7,000 acres of land that was unusable for timber harvesting because it was too close to developed land. Building housing on it could ease the shortage of homes in Washington, Connors noted in a statement, pointing out that the state has the "fewest housing units per household in the nation and nearly half of renters spend a third of their income on rent." Improve consumer access to financing for manufactured housing Manufactured homes are factory-built residences built after 1976 — formerly known as mobile homes — that can be placed on land. The average new manufactured home sold for $126,600 in November 2023, according to the Census Bureau. But loans are harder for homebuyers to secure for manufactured homes than for traditional ones, Horowitz said. And since manufactured housing usually involves shipping over state lines, the federal government plays a big role. HUD controls access to financing for manufactured homes, and rules are stricter than they are for traditional homes. Interest rates are typically also higher for manufactured home loans than for traditional home loans, in part because unlike traditional homes, which tend to appreciate in value over time, manufactured homes can depreciate. The structures are also viewed as riskier than conventional homes because they're usually harder to sell on the market. Horowitz suggests HUD could make it easier for borrowers to access loans. Eliminate tax breaks for second (and third) homes Congress could increase the national housing stock over time by eliminating tax breaks for any homes that aren't a primary residence, said AEI's Pinto. Getting rid of the mortgage interest rate deduction for non-primary residences would eventually encourage many homeowners to sell, Pinto said. "Why should they be subsidized by the tax code," Pinto asked. Without that tax break, hundreds of thousands of homes would come back onto the market as primary residences, Pinto said. "It would cost the federal government basically nothing," Pinto said. "They'd actually save some money on the tax savings, and it would not increase demand at all." This isn't likely to happen soon though. Such a measure would have to be passed by Congress — and many lawmakers own second and third residences. And a number of their constituents and donors own multiple homes. Realtor interest groups would oppose it, too, Pinto said. The most Congress has done in recent years to address tax breaks for expensive residences was in 2017, when the GOP-controlled Congress capped the deduction limit for state and local income taxes, which hit coastal, heavily Democratic states like New York and California particularly hard. Still, eliminating the tax break for secondary homes is "low-hanging fruit," and would increase supply and reduce demand simultaneously, Pinto said. Lowering interest rates probably wouldn't lower housing costs Economists mostly doubt that action by the Federal Reserve to significantly lower interest rates would help much. "If the Fed were to cut rates in a way that allowed mortgage rates to fall to the 4% range, we would see both supply and demand increase in the housing market," said Chen Zhao, who leads the economics team at Redfin. And whether home prices rise or fall would depend on what then happens to housing supply and demand. "If demand increases more, then prices would grow at a faster rate than they are currently," Zhao said. "However, it's also possible that supply would increase more because sellers have been so locked in by low existing mortgage rates. If that's the case, then price growth could fall. I think it's unlikely in either case that prices would fall outright." Would Biden or Trump's policies help or hurt housing costs? Former President Donald Trump hasn't offered policy suggestions to address housing affordability yet, although he criticizes mortgage interest rates and home prices under President Biden. The president has proposed giving a $10,000 tax credit to first-time middle class homebuyers, and up to $25,000 to first generation home buyers. He's also introducing a $20 billion fund that in addition to helping build affordable rental units, is meant to peel away local barriers to housing development and spur the construction of starter homes. Down payment assistance may help home shoppers in the near term, although the tax credit probably falls short of the traditional 20% down payment on most homes. With monthly payments at record highs, this down payment assistance would not lower monthly costs. And down payment assistance could have unintended consequences, Pinto said: "It would increase the price of entry level homes." The effect down payment assistance or a buyer tax credit would have on the housing market is complicated in a supply-constrained market, Horowitz said. While Trump hasn't made specific proposals on housing, his proposals in other policy areas would likely drive home prices up, Parrott said. Mass deportations of undocumented migrants, for instance, could drive the cost of labor higher, and raising tariffs on China could drive up material costs, Parrott said. "The things that Trump has said relevant to housing almost all cut the wrong way," Parrot said. How home costs could affect the election The cost of home ownership is a top concern for Democrats and Republicans, city dwellers and rural residents alike, said Parrott. Once an issue has broken through the barriers of red and blue, metro and rural, "then it changes the probability of something happening," Parrott said. "Housing has found its way to the grownups table, in effect, for the first time," Parrott said. And even though it's the Fed that controls interest rates, Mr. Biden could be held accountable by voters. "President Biden's reelection is closely tied to the cost of homeownership and thus, the fixed mortgage rates," Mark Zandi, chief economist at Moody's Analytics predicted. "The fixed rate is currently just over 7%. If it rises above 8% for any length of time, his reelection odds will fade, and if it falls closer to 6% his odds will increase meaningfully, all else equal."

Cold Stone Creamery sued over ‘pistachio’ ice-cream with no pistachios 2024-05-08 19:01:00+00:00 - Imagine you are at the ice-cream shop, an array of colorful flavors lie before you in a glass case. A flavor calls to you, its label reads “pistachio”. After your purchase, you look online at the ice-cream shop’s website. Turns out, the pistachio ice-cream had no pistachios in it. Instead, it had “pistachio flavoring”, made up of “water, ethanol, propylene, glycol, natural & artificial flavor, yellow 5 [and] blue 1”. So what do you do? You gather other ice-cream aficionados and sue the ice-cream company. That’s what a Long Island woman did after ordering the pistachio ice-cream in July 2022 at a Cold Stone Creamery and realizing the ice-cream was devoid of pistachios. While the class-action suit has yet to go to court, Gary Brown, a federal judge at the eastern district court of New York in Brooklyn, is allowing the case to move forward. The suit targets Kahala Brands, the parent company of Cold Stone Creamery. In a ruling last week, the judge appeared sympathetic to the woman’s claims that Cold Stone Creamery misled her and other customers by not including pistachios in what the company calls pistachio ice-cream. “Had she known that the product did not contain pistachio, she would not have purchased it, or would have paid significantly less for it,” lawyers for the woman wrote in court filings. The judge wrote that the case presented a “deceptively complex question about the reasonable expectations” of those who find themselves with such an ice-cream flavor. “Should consumers ordering pistachio ice-cream at one of defendant’s establishments expect that the product will contain actual pistachios? And if the answer is no, should that leave them with a bitter aftertaste?” Brown wrote. The judge at least agrees the question is worth sussing out in court, at least when it comes to the pistachio flavor. While the lawsuit named other alleged deceptive ice-cream flavors, including mango, coconut, mint, orange, orange sorbet and butter pecan, Brown said the lawsuit moving forward can only focus on pistachio, as it only brought forward sufficient evidence for that flavor alone. skip past newsletter promotion Sign up to First Thing Free daily newsletter Our US morning briefing 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 Brown noted that lawyers for Cold Stone cited the logic behind the so-called “vanilla cases”, or a series of lawsuits that were dismissed by the southern district court of New York that claimed items that were labeled as vanilla, but did not actually contain vanilla bean as an ingredient. But the judge said the term vanilla can be both a noun and an adjective, sometimes being used to denote a flavor rather than the physical vanilla bean. For example, you can have “vanilla-scented candles and shampoos”. But the dictionary defines pistachio as a noun, describing the actual nut in question. Brown also scoffed at Cold Stone’s defense that its listing of its ingredients on its website is enough cause for dismissal. “It seems inconceivable that such a consumer should have to search online to find the relevant webpages while waiting in line to order a scoop of ice-cream,” Brown wrote. “Before advancing this argument, counsel may be well-advised to research the term ‘buzzkill’.” It is unclear when the case will go to trial. Kahala Brands did not immediately respond to the Guardian’s request for comment.

With inflation soaring, Argentina will start printing 10,000 peso notes 2024-05-08 18:36:49+00:00 - BUENOS AIRES, Argentina (AP) — Prices in Argentina have surged so dramatically in recent months that the government has multiplied the size of its biggest bank note in circulation by five — to 10,000 pesos, worth about $10. The central bank announcement Tuesday promised to lighten the load for many Argentines who must carry around giant bags — occasionally, suitcases — stuffed with cash for simple transactions. Argentina’s annual inflation rate reached 287% in March, among the highest in the world. The new denomination note — five times the value of the previous biggest bill — is expected to hit the streets next month in a bid to “facilitate transactions between users,” the central bank said. The 10,000 peso note is worth $11 at the country’s official exchange rate and $9 at the black market exchange rate. Across Argentina, hard currency — specifically, the country’s ubiquitous 1,000-peso notes — remains the most popular way to pay for things. When first printed in 2017, the 1,000-peso note was worth $58 on the black market. Now, it’s worth a dollar. Given the instability unleashed by Argentina’s worst financial crisis in two decades, vendors prefer old-fashioned cash payments for big purchases and offer steep discounts to incentivize paper bills over electronic transfers. Argentina’s libertarian President Javier Milei, who took office last December, campaigned on a promise to tame inflation and stabilize the local currency by reversing the policies of past left-leaning governments that printed money to finance public spending. But in the meantime, his harsh austerity drive has pushed prices up to levels in the U.S. and Europe, adding to the economic woes of ordinary Argentines. A massive nationwide strike, the latest in a series of protests, is planned for Thursday. Even as annual inflation remains high, Milei cites a gradual slowdown in Argentina’s monthly inflation rate since last December to insist his plan is working. Confident consumer prices can continue creeping downward, policymakers lowered the central bank’s key interest rate three times last month. The new 10,000 peso notes feature small artistic portraits of Manuel Belgrano, a founding father of Argentina, and María Remedios del Valle, a Black Argentine woman and army captain who gained fame fighting the country’s War of Independence. Argentina’s central bank said it would introduce an even bigger bill — a 20,000-peso note — later this year.

Weekly mortgage refinance demand rose 5% after a slight dip in mortgage rates 2024-05-08 18:29:00+00:00 - Mortgage rates are significantly higher than they were at the start of this year, but they pulled back slightly last week after several weeks of straight increases. That was enough to spark some new demand, especially for refinances. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 7.18% from 7.29%, with points unchanged at 0.65 (including the origination fee) for loans with a 20% down payment. “Treasury rates and mortgage rates fell last week on the news of a slowing job market, with wage growth at the slowest pace since 2021, and the Federal Reserve’s announced plans to ease quantitative tightening in June and to maintain its view that another rate hike is unlikely,” said Mike Fratantoni, MBA’s senior vice president and chief economist. The rate for Federal Housing Administration loans fell below 7% for the first time in three weeks, which is a welcome sign for first-time buyers, who tend to use FHA loans. “First-time homebuyers account for roughly half of purchase loans, and the government lending programs are an important source of financing for these homebuyers. The gain in FHA activity is a sign that this segment of the market is active,” Fratantoni added. The dip in rates caused refinance demand to increase 5% for the week, although it was still 6% lower than the year-earlier week. Rates are 70 basis points higher than they were a year ago, so there are very few borrowers who can benefit from a refinance. A basis point is one-hundredth of a percentage point. Applications for a mortgage to purchase a home rose 2% for the week but were still 17% lower than the same week a year earlier. Affordability is hitting potential buyers hard, as home prices continue to climb. Tight supply is keeping the competition high, resulting in very few bargains. Mortgage rates fell further to start this week. The next big piece of economic data comes next week, with the release of the monthly consumer price index. That could move rates sharply in either direction, depending on what it says about inflation.

British Gas boss says all UK households should be forced to fit smart meters 2024-05-08 18:18:00+00:00 - The boss of British Gas has called for households to face mandatory smart meter installations weeks after government figures showed that almost 4m meters are not working. Chris O’Shea, the chief executive of the British Gas owner Centrica, told a committee of MPs that smart meters should be installed in all homes through a “street by street” programme, in order to cut the costs of creating a smart grid. The energy boss, who has come under fire after British Gas was revealed to have used debt collectors to force-fit prepayment meters in vulnerable customers’ homes, said the company would be willing to install smart meters on behalf of other energy suppliers. O’Shea was speaking at a parliamentary hearing on how to make energy bills more affordable just weeks after government data revealed that almost 4m smart meters have stopped working properly. He told MPs: “In order to have the proper smart grid – that is required to keep costs low in the future and have a responsive grid – everyone should have a smart meter. One of the things we should consider is whether this should be a voluntary programme or a mandatory programme. “We have 1,700 smart meter installers and we would be happy to install smart meters for Octopus, for E.On, for anybody. We would split the UK up street by street, rather than customer by customer. If you mandated it, then we could have that change in programme. It could be done within the next five years or so.” O’Shea’s proposal was rebuffed by Rachel Fletcher, a director at the rival energy company Octopus and a veteran utilities regulator, in the same committee hearing. Fletcher said: “This should not be done to consumers. What we see [at Octopus] is people queueing up asking for a smart meter where we are offering tariffs or tools which allow them to save … hundreds of pounds a year.” The government launched its smart meter programme in 2011 and had hoped to install smart meters in households across the UK before 2020 to help reach its net zero ambitions. About 60% of homes have a smart meter, according to government data. Smart meters are considered a key tool in helping households reduce their energy use. They use real-time data to make better use of renewable energy when it is available and cut the need for fossil fuels, as well as relaying instant data on households’ energy use. But the programme, which is being carried out by energy suppliers, has been dogged by delays and technical faults. The government’s recent data suggested that customers with smart meters may have been overcharged on their gas and electricity bills. Officials have called on the industry regulator, Ofgem, to take action against energy providers who are not supporting customers and meeting legal obligations.

Gold bars are selling like hot cakes in Korea's convenience stores and vending machines 2024-05-08 18:12:00+00:00 - Aside from ramen and sausages, South Korea’s convenience stores have a new popular item on the menu — gold bars. The country’s largest convenience store chain, CU, has been collaborating with the Korea Minting and Security Printing Corporation (KOMSCO) to offer customers mini gold bars — and they’re selling like hot cakes. A variety of finger-nail sized gold bars weighing between 0.1 gram and 1.87 gram have been up for sale at CU outlets since April. A 1.87 gram bar sells for 225,000 won ($165.76) and a 0.5 gram bar sells for 77,000 won. Priced at 113,000 won each, 1 gram bars were sold out within two days, according to local news reports. The bars come with congratulatory messages, birthday wishes and even designs for personality types. People in their 30s were most active in purchasing these gold bars, accounting for over 41% of the total sales since their launch, according to CU’s commerce phone app Pocket CU. Those in their 40s make up 35.2% of the sales, followed by people in their 50s at 15.6%. People in their 20s accounted for 6.8% of all sales. Demand for bars and coins in South Korea rose 27% year on year to 5 tons in the first quarter of this year amid rising prices of the yellow metal, the World Gold Council said in a recent report. This was the sharpest quarterly increase in gold purchases in South Korea in more than two years, WGC noted. Other convenience stores are also riding the bullion wave. In South Korea’s GS25 convenience store chain, customers can buy small gold wafers from vending machines. “Typically in times of economic uncertainty when the local currency depreciates, the demand for gold physical jewelry will increase as domestic investors seek investment for safe haven assets,” said Heng Koon How, head of markets strategy, global economics and markets research at UOB. According to the Korea Gold Exchange, prices of gold have surged to a record 456,000 won ($335.3) per 3.75 grams, or 0.13 ounce. Conversely, the Korean won has weakened over 5% against the greenback so far this year, currently trading at 1,358.7 against the dollar. The WGC noted a recent trend of growing investment interest among a younger cohort in Asia, even as gold prices smash past record highs. “Many Asian economies are dealing with inflation and financial uncertainty for the first time in a generation,” WGC Global Head of Central Banks Shaokai Fan told CNBC via email. “It makes sense that many younger investors are exploring gold as a way to diversify and protect their assets.” Consumers in Asia’s largest economy, China, have has also been buying gold, with the collecting of 1 gram small beans in glass jars becoming a trend among the country’s youth. China is also leading consumer demand for bullion, with the country overtaking India in 2023 to become the world’s largest buyer of gold jewelry. Separately, in the U.S. last year, retail warehouse giant Costco became a popular one-stop shop for one ounce gold bars priced at close to $1,900.

Speaker Mike Johnson and Trump allies who tried to overturn the 2020 election roll out voting 'integrity' bill 2024-05-08 18:07:00+00:00 - WASHINGTON — Some of the conservative leaders of the effort to overturn the 2020 presidential election gathered in front of the Capitol on Wednesday and called on Congress to pass an “election integrity” bill to stop noncitizens from voting. Leading the group, Speaker Mike Johnson, R-La., acknowledged that undocumented immigrants voting in elections is already illegal under federal law. “Some have noted that it’s already a crime for noncitizens to vote in a federal election, and that is true,” Johnson said. But he argued that people know “intuitively” that noncitizens are voting, even though he could not provide estimates of how many. Multiple studies have shown that noncitizen voting is extremely rare in federal elections. “I mean, the answer is that it’s unanswerable," Johnson said. "That is the problem. … We all know, intuitively, that a lot of illegals are voting in federal elections. But it’s not been something that is easily provable. We don’t have that number. This legislation will allow us to do exactly that. It will prevent that from happening. And if someone tries to do it, it will now be unlawful within the states. We’ll have a mechanism to prove whether they are or not.” Mike Johnson at a news conference on the House steps of the U.S. Capitol on Wednesday. Tom Williams / CQ Roll Call via AP A constitutional lawyer and close Donald Trump ally, Johnson played a pivotal role in Trump’s push to overturn the 2020 election. He led the amicus brief, signed by more than 100 House Republicans, backing a Texas lawsuit seeking to invalidate the 2020 election results in four key swing states won by President Joe Biden. Johnson was joined Wednesday by Rep. Chip Roy, R-Texas, and Sen. Mike Lee, R-Utah, two lawmakers whose text messages to then-White House chief of staff Mark Meadows were featured prominently in the Jan. 6 committee’s investigation into the attack. Others on hand included a who’s who of MAGA conservatives. Among them were Stephen Miller, the former White House senior adviser to Trump; Jenny Beth Martin, the Tea Party Patriots co-founder who was outside the Capitol with a bullhorn on Jan. 6, 2021; and Cleta Mitchell, the conservative activist who was on the January 2021 call with Trump when he told Georgia Secretary of State Brad Raffensperger to “find” 11,000 votes, enough to overturn the state’s election results. Two other former Trump administration officials, Hogan Gidley and Ken Cuccinelli, also spoke Wednesday. When asked at the news conference whether he accepts the 2020 election results, Johnson replied: “What we’re talking about today is the 2024 election.” But he went on to say: “Nobody can go back and relitigate what happened in 2020. We know that there was ballot harvesting, we know that there was mail-in ballots. It was the Covid election. There was all sorts of irregularity occasioned by the pandemic, where states haphazardly put together new laws and opened up the systems and led to all sorts of confusion and chaos and concern that lingers even to the day.” ("Ballot harvesting" refers to a third party, such as a family member, collecting voted ballots to return. Conservatives have lambasted the practice, but the RNC is embracing it in the 2024 elections "where legal.") Miller, who’s burnished a reputation in Washington as an anti-immigration hard-liner, attempted to troll the media and Democrats as he stood on the same House steps where Trump supporters had climbed and overtaken police officers on Jan. 6, 2021. “Democracy in America is under attack,” Miller said. He railed against the “wide-open border and obstruction of any effort to verify the citizenship of who votes in our elections." Despite the lack of evidence of noncitizen voting, Miller echoed unsubstantiated conspiracy theories that Democrats are importing voters to help Biden win re-election. Johnson first unveiled the framework of the legislation last month, standing with Trump during a visit to his Mar-a-Lago resort. The Safeguard American Voter Eligibility Act, or SAVE Act, would make it harder to register people to vote by requiring proof of citizenship. That could include showing a U.S. passport, a photo ID showing that the individual was born in the United States, or a birth certificate — documents that millions of Americans do not have access to, voting rights advocates say. The speaker pushed back when NBC News pointed out that the legislation would not go anywhere in the Democratic-controlled Senate or be signed into law by Biden. “This is not a messaging bill. This is one of the most substantive … most important pieces of legislation that will be presented within our lifetime, in our congressional careers. This is at the essence of what it means to have a constitutional republic. If people cannot rely upon … the integrity of that system, then we have nothing,” Johnson said. “And so we’ll do it out of the House and we’ll send it to the Senate, and we’ll let Chuck Schumer decide whether he agrees with that sentiment or not," Johnson said. "We’re not doing this for messaging purposes."

Tory MP Philip Davies takes £500-an-hour job at slot machine company 2024-05-08 18:07:00+00:00 - The Tory MP Philip Davies has got a new £500-an-hour job as a consultant for a company in the Merkur group, which is behind slot machines in hundreds of high streets across the UK. Davies, who was recently knighted on the recommendation of Rishi Sunak, will provide “strategic advice” to Merkur Gaming, earning £1,000 a month for two hours of work in that period. Merkur Gaming is a company in the German-owned parent group, Merkur, which is behind Britain’s second-largest network of “adult gaming centres”. These increasingly popular venues, where customers can play £2-a-spin slot machines, are often open 24 hours a day. The Merkur gaming company that employs Davies appears to own companies that design and sell slot machines and their software. The Guardian reported in April that a sister company within the group, which operates high street premises, was put under investigation by the Gambling Commission over its alleged exploitation of a vulnerable customer. It was previously claimed that staff at Merkur’s Stockport branch looked on as Wendy Hughes, 64, who was being treated for lung cancer at the time, lost more than £2,000 over the course of 16 hours, spread across two days of play. At the time, Merkur told the Guardian: “We take any allegations against our staff extremely seriously,” adding that Hughes’s case had been “fully investigated” and reported to the Gambling Commission in January. “We have established that the customer interaction measures recommended by the Gambling Commission were fully in place,” it said. The Gambling Commission does not confirm or deny whether it is investigating individual operators. The Merkur group’s UK slot machine premises have thrived in recent years and the company is planning to spread further across Britain, according to filings at Companies House. Revenues – derived chiefly from punters’ losses – surged last year from £173m to £202m, although the company reported a pre-tax loss of £2m, as it invested in opening new shops that it said typically take at least a year to make a profit. Merkur opened 38 new venues in 2023, as part of its “UK expansion project”, on top of 36 the year before, with its website showing it has more than 200 sites. Davies’s new job was revealed in the latest register of MPs’ interests, which also shows Dominic Raab, the former deputy prime minister, is being paid £100,000 plus VAT a year by the World Gold Council to consult on a review of illegal activity in the gold market. Davies is well known for his links with the gambling and betting industries. As well as earning £50,000 in one year advising Entain, a sport betting and gambling company, he received up to £14,713.60 of hospitality from betting and horse-racing firms over two years, including days out at Ascot and cricket Test matches. He also has a £1,500-a-month job as a consultant on regulation and public policy for the National Pawnbroking Association. Last year, he became co-chair of the cross-party parliamentary group on betting and gaming Despite announcing plans to crack down on the digital slot machines sector earlier this year by reducing maximum stakes to £5, or £2 for those aged 18 to 24, the government is expected to loosen regulations governing high street slots. Under proposals outlined as part of the government’s white paper on gambling reform, venues are likely to be allowed to stock a higher proportion of £2-a-spin machines relative to the number with maximum stakes of £1. Philip Davies and Merkur Gaming have been contacted for comment.

Former MGM Grand casino president to be sentenced for failing to report bookie's bets 2024-05-08 18:04:00+00:00 - The former president of the MGM Grand casino in Las Vegas is set to be sentenced Wednesday afternoon on a federal criminal charge related to his failure to report millions of dollars in wagers by an illegal bookmaker at his casino. Scott Sibella, the ex-MGM executive, pleaded guilty in January to one count of failure to file reports of suspicious transactions required to be made by casinos under the Bank Secrecy Act. Sibella’s lawyers have asked that he be sentenced to probation, as have prosecutors. Sibella admitted knowing that a patron of his casino, Wayne Nix, ran an illegal bookmaking business, according to the Department of Justice. “Despite this knowledge, Sibella allowed Nix to gamble at MGM Grand and affiliated properties with illicit proceeds generated from the illegal gambling business without notifying the casino’s compliance department,” the DOJ said in a press release in January. “Not only did Sibella allow Nix to gamble at the casino, he also authorized Nix to receive complimentary benefits at the casino, including meals, room, board and golf trips with senior executives and other high net-worth customers of the casinos to further encourage Nix to patronize the casino and/or other affiliated properties,” the DOJ added in the statement. At the time of Sibella’s guilty plea, the DOJ also said it had resolved an investigation into alleged violations of money laundering laws and the Bank Secrecy Act at MGM Grand and The Cosmopolitan of Las Vegas. The casinos agreed to settlements that required them to pay a combined $7.45 million, as well as to enhance their anti-money laundering compliance program. “In their respective [non-prosecution agreements] MGM Grand and the Cosmopolitan each accepted responsibility for laundering Nix’s illicit funds and failing to properly file suspicious activity reports (SARs) on Nix, who conducted numerous transactions involving millions of dollars at the casinos between 2017 and 2020,” the DOJ said at that time.

RFK Jr. said a worm ate part of his brain, according to report 2024-05-08 17:53:28+00:00 - Robert F. Kennedy Jr., the 70-year-old independent presidential candidate who has pitched himself as the sprightly, virile antithesis to his aging rivals, has faced previously undisclosed health issues — including a worm that he said ate part of his brain, according to The New York Times. Kennedy spoke about some of the medical issues in a 2012 deposition, which the Times reviewed, during divorce proceedings from his second wife. He argued then that his earning potential had been negatively affected by cognitive issues. According to his deposition, Kennedy was experiencing severe brain fog and memory loss in 2010 and received brain scans. One doctor believed that the scans indicated “a worm that got into my brain and ate a portion of it and then died,” Kennedy said. After more testing, doctors concluded that the dark spot seen in the scans was a cyst with indeed a dead parasite. According to his deposition, Kennedy was experiencing severe brain fog and memory loss in 2010 and received brain scans. Around the same time, Kennedy found out he had mercury poisoning — a condition that’s also associated with memory loss — as well, likely from a fish-heavy diet. He also said in the deposition that he had been hospitalized multiple times for atrial fibrillation, a heart issue. “I have cognitive problems, clearly,” Kennedy said in the deposition. “I have short-term memory loss, and I have longer-term memory loss that affects me.” Kennedy told the Times that he has bounced back from his cognitive issues and that he had no lingering effects from the worm in his brain, which he said did not need treatment. Still, the Times’ report, which has not been independently verified by MSNBC or NBC News, offers a more complicated picture of Kennedy’s health than the version he has gone to lengths to present. As concerns about President Joe Biden and presumptive GOP presidential nominee Donald Trump’s age and cognitive abilities continue to weigh on voters, Kennedy has portrayed himself as a youthful, more robust, even more masculine alternative. His campaign has promoted videos of him weightlifting in jeans, skiing with professional snowboarder Torah Bright and diving with sharks. Kennedy’s campaign dismissed any concerns that he may not be as fit for the presidency as he paints himself out to be, with campaign spokesperson Stefanie Spear telling the Times: “That is a hilarious suggestion, given the competition.”

What went wrong with the electronic passport gates at UK airports? 2024-05-08 17:31:00+00:00 - Thousands of passengers were left waiting in queues for more than three hours at airports, on Tuesday evening, after a nationwide failure of the electronic passport gate technology system. Nearly all major British airports were affected as the country’s 270 e-gates, the automated facial recognition systems at the border, were closed for more than four hours. So, what exactly happened, will those affected be able to get compensation and could it happen again? What happened? Just before 8pm on Tuesday night, engineers detected a network issue on the system that runs the e-gates, which are in place at 15 air and rail ports around the country. It also affected some policing, passport and immigration systems. The problem forced the e-gates to be shut at major airports, including Heathrow, Gatwick, Manchester and Edinburgh. Border officials had to manually process travellers instead, causing huge delays and tailbacks. The system was back online by 12.30am. Despite calls for transparency over what was behind the issue, the government has so far been vague, blaming “technical issues within the Home Office network”. In a statement to parliament, Tom Pursglove, minister of state for legal migration and the border, said that Border Force was confident it had found a permanent fix for the issue. He ruled out a cyber-attack as the cause, but would not give any more details, saying he did not want to “pre-empt” the investigations the Home Office was carrying out. Pursglove said: “I sincerely apologise for the disruption that occurred. I can assure the house that the home secretary and I will be unswerving in our determination to ensure that every possible lesson is learned, to ensure that this does not happen again.” Has this happened before? The outage was the latest in a long line of failures of the e-gate system. Two weeks ago, a “nationwide technical outage” led to queues at Edinburgh, Gatwick and Bristol airports. The most significant breakdown in recent times was in May last year, when passengers at UK airports and ports experienced long delays ahead of the second May bank holiday. Again, the Home Office blamed a system fault which affected all e-gates for arrivals into the country. This came after three separate e-gate outages across UK airports in three months in the latter part of 2021. There have been repeated warnings about the system in recent years by government watchdogs. A report from David Neal, then-independent chief inspector of borders and immigration, warned of failings with the running of e-gate system in 2021. A follow-up report, in February 2024, which came after a re-inspection of e-gates last summer, found that border protections were neither “effective or efficient” and found that e-gates were sometimes left unstaffed. skip past newsletter promotion Sign up to Headlines UK Free newsletter Get the day’s headlines and highlights emailed direct to you 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 Will affected passengers be in line for compensation? It is unlikely the majority of passengers would be in line for compensation. Such incidents are seen as “extraordinary events” by airlines, and not covered by European-wide regulations that require airlines to provide assistance or compensation to passengers if a flight is delayed or cancelled. However, Rory Boland, editor of Which? Travel, says that some passengers may be able to recoup some money through their travel insurance. He says: “Apart from connecting flights there are other incidental costs that some people can incur, around things like airport parking, or parking charges for late pick-ups, and having to pay for taxis because public transport has stopped. “It is definitely worth checking your policy to see if you are covered for these.” Could it happen again? There are fears that this will not be the last time we will see a system-wide failure. One government adviser tells the Guardian that travellers could face a summer of chaos because the government could not guarantee that the system would not collapse again. “One of the vulnerabilities is that it is open to individual errors which can then affect the entire system,” the Whitehall source says. “The problem has been underinvestment under consecutive governments. And it is a glitch that cannot be easily fixed – it will require dismantling the system and starting again.” Lord Foster, who chairs the Lords justice and home affairs committee, says it is paramount that the government learns lessons from the breakdown, particularly as a new Electronic Travel Authorisation (ETA) system is due to be rolled out across the remainder of 2024. The ETA is a permit, similar to the US Electronic System for Travel Authorization, known as an Esta, which all non-UK and Irish travellers will need to enter the UK and is designed to stop potential threats to the country at the border. He said: “The government’s ambition is to have ‘the most effective border in the world’. In order to achieve this ambition, the government must get the fundamentals right.”

FTX files plan to fully reimburse customers defrauded of billions by failed crypto exchange 2024-05-08 17:27:00+00:00 - FTX says that nearly all of its customers will receive the money back that they are owed, two years after the cryptocurrency exchange imploded, and some will get more than that. In an anticipated amended Plan of Reorganization filed in a U.S. bankruptcy court late Tuesday, the exchange estimates that it has between $14.5 billion and $16.3 billion to distribute to customers and other creditors around the world. The filing said that after paying claims in full, the plan provides for supplemental interest payments to creditors, to the extent that funds still remain. The interest rate for most creditors is 9%. That may be a diminished consolation for investors who were trading cryptocurrency on the exchange when it collapsed. When FTX sought bankruptcy protection in November 2022, bitcoin was going for $16,080. But crypto prices have soared as the economy recovered while the assets at FTX were sorted out over the past two years. A single bitcoin on Tuesday was selling for close to $62,675. That comes out to a 290% loss, a bit less than that if accrued interest is counted, if those investors had held onto those coins. Customers and creditors that claim $50,000 or less will get about 118% of their claim, according to the plan, which was filed with the U.S. Bankruptcy Court for the District of Delaware. This covers about 98% of FTX customers. FTX said that it was able to recover funds by monetizing a collection of assets that mostly consisted of proprietary investments held by the Alameda or FTX Ventures businesses, or litigation claims. FTX was the third-largest cryptocurrency exchange in the world when it filed for bankruptcy protection in November 2022 after it experienced the crypto equivalent of a bank run. CEO and founder Sam Bankman-Fried resigned when the exchange collapsed. In March he was sentenced to 25 years in prison for the massive fraud that occurred at FTX. Bankman-Fried was convicted in November of fraud and conspiracy — a dramatic fall from a crest of success that included a Super Bowl advertisement, testimony before Congress and celebrity endorsements from stars like quarterback Tom Brady, basketball point guard Stephen Curry and comedian Larry David. The company appointed as its new CEO John Ray III, a long-time bankruptcy litigator who is best known for having to clean up the mess made after the collapse of Enron. "We are pleased to be in a position to propose a chapter 11 plan that contemplates the return of 100% of bankruptcy claim amounts plus interest for non-governmental creditors," Ray said in a prepared statement. FTX, technically, remains a company but its future is unclear. In early 2023, Ray said that he had formed a task force to explore reviving FTX.com, the crypto exchange. The sordid details of a company run amuck — that emerged after its assets were seized — would hamstring almost any business attempting a comeback, but there may also be different parameters for cryptocurrency exchanges. The rival crypto exchange Binance briefly explored acquiring FTX before it collapsed in late 2022. Its founder and former CEO Changpeng Zhao, was sentenced last week to four months in prison for looking the other way as criminals used the platform to move money connected to child sex abuse, drug trafficking and terrorism. Binance is still the largest crypto exchange in the world. The bankruptcy court is set to hold a hearing on the dispersion of FTX assets on June 25.

Victorinox says it's developing Swiss Army Knives without blades 2024-05-08 17:11:00+00:00 - Mother's Day gift ideas with lifestyle expert Dawn McCarthy Mother's Day gift ideas with lifestyle expert Dawn McCarthy 05:32 New versions of the iconic Swiss Army Knife could soon be missing a key component: an actual knife. Victorinox, the maker of the iconic red-handled Swiss Army Knife, said in an email to CBS MoneyWatch that it's in the "early stages of developing new pocket tools without blades." It stressed that the new products won't replace its existing lineup, which include at least one blade as well as numerous other tools, ranging from toothpicks to screwdrivers. The development of the new tools come as Victorinox CEO Carl Elsener Jr. told Swiss media outlet Blick that he was concerned about laws in some countries that prohibit people from carrying knives, according to CNN, which earlier reported the development of the new products. For instance, it's illegal in the U.K. to carry a knife that's longer than 3 inches, while airlines generally prohibit passengers from carrying Swiss Army Knives in their carry-on luggage. Victorinox said it hasn't yet announced a time frame for when the new products will be introduced. It added that the goal is to create new multi-tool devices that will help customers be "best-prepared through smart and masterful solutions for any life situation." "An example of this is a possible tool for cyclists who may require a tool without a blade," a spokeswoman said in the email. The Swiss Army Knife was created and patented by Karl Elsener in 1897, the great-grandfather of the company's current CEO. The company also produces watches, clothing, travel gear and cutlery.

AstraZeneca Is Withdrawing Its Covid Vaccine Worldwide, Citing Low Demand 2024-05-08 16:59:46+00:00 - AstraZeneca has started to pull its Covid-19 vaccine from global markets because of low demand, the pharmaceutical giant said. The decision closes the chapter on a shot that was widely used in the early stages of vaccination drives in many parts of the world before being supplanted by rivals that were better suited to take on an evolving virus. The move was not related to any concerns about the shot’s side effects, the company said. Since the vaccine was approved in Britain in December 2020, over three billion doses have been supplied globally. But in the past few years, demand has plummeted as other manufacturers have released shots tailored to newer variants and countries have opted to use those. AstraZeneca’s shot, which was developed with Oxford University, is no longer being manufactured or supplied. The company said it had decided to voluntarily withdraw all licenses to market its Covid vaccine. That process began months ago, and very few active licenses remain, the company said. The Telegraph in Britain earlier reported the decision on Tuesday. In March, AstraZeneca requested that the vaccine be withdrawn from most European countries. The European Commission approved the move, which went into effect this week.

The number of prominent Republicans backing Biden grows (slowly) 2024-05-08 16:51:13+00:00 - When it comes to Republican politics, it’s tempting to divide the party into two camps: A giant contingent fighting with great enthusiasm to return Donald Trump to power, and a smaller faction of fierce opponents of the former president. But it’s not quite that simple. Some in the party — such as former Attorney General Bill Barr, Senate Minority Leader Mitch McConnell and Chris Sununu — have been sharply critical of Trump, but they’ve nevertheless endorsed his bid for a second term. Others in the party, such as former White House National Security Advisor John Bolton and former House Speaker Paul Ryan, have said they’ll write in the name of a different Republican on their 2024 ballot. There are still plenty of other GOP partisans who’ve made clear that they don’t want Trump in power — former Rep. Liz Cheney, former Gov. Chris Christie, Sen. Mitt Romney, former Vice President Mike Pence, et al. — but they haven’t yet announced what they intend to do in the fall. And then there’s the most interesting group of them all: Republicans who’ve taken the extra step of announcing their support for the Democratic incumbent. As my MSNBC colleague Ja’han Jones noted this week: Former Georgia Lt. Gov. Geoff Duncan, a frequent critic of Donald Trump’s lies about how election fraud cost him the 2020 election, endorsed President Joe Biden’s re-election campaign. In an op-ed Monday in The Atlanta Journal-Constitution, Duncan’s remarks read like a clarion call, urging sane conservatives not to align themselves with a self-centered wannabe authoritarian. “Unlike Trump, I’ve belonged to the GOP my entire life. This November, I am voting for a decent person I disagree with on policy over a criminal defendant without a moral compass,” Duncan wrote. “[T]he GOP will never rebuild until we move on from the Trump era, leaving conservative (but not angry) Republicans like me no choice but to pull the lever for Biden,” the Georgian added. “The alternative is another term of Trump, a man who has disqualified himself through his conduct and his character.” Duncan’s name might sound familiar. He was, after all, recently considered as a top contender for the No Labels operation’s presidential nomination, before he withdrew from consideration and the third-party initiative collapsed. Duncan also made headlines in 2020 for fighting back against Trump’s efforts to overturn Georgia’s 2020 election results, and a year later he publicly denounced his own party’s efforts to impose new voting restrictions on Georgia’s electorate. The larger question, however, is how much company Duncan will have in the GOP’s pro-Biden bloc. By any fair measure, it’s an exceedingly small group. Former White House aide Cassidy Hutchinson has encouraged people to vote for Biden, and former deputy White House press secretary Sarah Matthews, said she’s voting for Biden. At least for now, that’s more or less where the list ends. I kept a close eye on this dynamic four years ago, and found quite a few GOP partisans — former Republican National Committee chairs, former Republican cabinet secretaries, former Republican governors and former Republican members of Congress — who publicly expressed support for the Biden-led Democratic ticket. Will we see something comparable between now and Election Day 2024? Watch this space.

EU reaches deal on using profits from Russia’s frozen assets for Ukraine 2024-05-08 16:49:00+00:00 - The EU has reached a deal to seize profits from Russia’s frozen assets to fund weapons and aid for Ukraine within months. EU senior diplomats meeting on Wednesday agreed a compromise on using the estimated €4.4bn windfall profits to aid Ukraine, smoothing over a dispute about taxation and management costs in Belgium, the country where most of the frozen assets are held. Euroclear, a clearing house in Brussels, holds €191bn of the €260bn of Russian Central Bank assets that were immobilised by western governments in response to Russia’s invasion of Ukraine in 2022. In February the clearing house reported €4.4bn interest on the Russian funds and forecast that the Belgian government would reap €1.085bn in taxes. The final amount for Ukraine has yet to be confirmed, but should be available in July. The EU – wary of the legal ramifications of seizing the entire cache of Russian assets – decided it could give the profits to Ukraine, after concluding Moscow had no legal right to these funds. But finding a deal has been complicated by divisions about how to spend the money, Euroclear’s management fees and Belgium’s 25% tax on corporate profits. Belgium has now said it is “prepared to consider” a voluntary plan to transfer the collected taxes to Ukraine from 2025, according to diplomatic sources. The Belgian climbdown was first reported by Politico. The Belgian state is already contributing aid to buy weapons for Ukraine, but other EU countries argued the Russian windfall should be additional to – not instead of – Belgium’s regular Ukraine aid. One EU diplomat had described the profits as “a windfall tax for Belgium” and said: “It is a little unfair because nobody else has Russian money to pay for their aid for Ukraine.” Meeting on Wednesday, the diplomats also whittled Euroclear’s management fee to 0.3%, down from the original 3% proposed. EU member states decided that 90% of the windfall profits would go on weapons for Ukraine and remaining 10% on non-lethal aid, a split designed to assuage countries including Ireland, Austria and Hungary that cannot or do not wish to fund arms. “EU ambassadors agreed in principle on measures concerning extraordinary revenues stemming from Russia’s immobilised assets,” tweeted Belgium’s EU presidency Twitter account. “The money will serve to support #Ukraine‘s recovery and military defence in the context of the Russian aggression.” Welcoming the agreement, the European Commission president, Ursula von der Leyen, tweeted: “There could be no stronger symbol and no greater use for that money than to make Ukraine and all of Europe a safer place to live.” The EU deal opens the door to a broader discussion in the G7 about using Russia’s frozen billions of assets, but many European nations, including Germany and France, are wary of a US plan to take charge of the assets, fearing a violation of international law. Separately on Wednesday EU ambassadors began talks on plans to restrict the flow of Russian liquified natural gas (LNG) via Europe, as part of a 14th round of sanctions against the Kremlin’s ability to wage war. The European Commission wants to impose restrictions on the transhipment of LNG in the EU to stop Russia exporting the highly lucrative gas to non-EU countries via EU ports. The EU also wants to ban new investment, goods and services to build LNG terminals in the Russian Arctic. The proposals, however, stop short of a ban on Russian LNG, which unlike most pipeline gas has continued to be imported into the EU. EU diplomats hope to get agreement on the latest sanctions before the European elections and certainly ahead of 1 July, when the Russia-friendly Hungarian government takes over the bloc’s rotating presidency.

Trump appeal in Georgia puts Fulton County election case deeper into limbo 2024-05-08 16:22:59+00:00 - Donald Trump’s New York state prosecution could be the only one of his four criminal cases that goes to trial, at least before the 2024 presidential election. And possibly ever. That was already true heading into this week. But we received the latest indication of that possibility on Wednesday, when Georgia’s appeals court signaled that it will consider Trump and his co-defendants’ request to disqualify Fulton County District Attorney Fani Willis. As a reminder, Judge Scott McAfee said in March that Willis could stay on the case if special prosecutor Nathan Wade, with whom she had a romantic relationship, stepped down. Wade did so — but that didn’t end the matter. Trump and his co-defendants are still seeking Willis’ disqualification and the wholesale dismissal of the state election interference case itself. McAfee previously said that the case can move forward despite the defense appeal. And he has been ruling on pretrial issues in the meantime. But regardless of whether the case gets formally paused (as Trump’s federal election interference case did), this Georgia appeal puts the state prosecution further in doubt. The appeals court could, for example, say that McAfee didn’t go far enough in the defendants’ favor and kick Willis and her office off of the case. Such a decision would require reassigning the case to another office, which would unlikely be simple or speedy, to say nothing of what another prosecutor would do with the case. The Georgia news follows U.S. District Judge Aileen Cannon’s recent move in the classified documents case to postpone a trial indefinitely in Florida. Meanwhile, the Supreme Court’s pending decision on Trump’s immunity claim has been holding up a trial in the federal election interference case. If Trump wins the November presidential election, he’ll almost certainly rid himself of these two federal cases. Presidents can’t dismiss or pardon state charges, but if Trump wins a second term, that would complicate any state cases moving forward while he’s in office. Trump’s three cases outside of New York all carry greater possibilities of prison time if he's convicted, which wouldn’t be mandatory if he’s convicted in New York. Even before this latest move in Georgia, a pre-election trial against Trump there seemed unlikely. No trial date has been set, and it’s hard to see one being set while this disqualification appeal looms. Testimony in Trump’s New York trial for allegedly falsifying business records is set to resume Thursday. The former president and presumptive GOP presidential nominee has pleaded not guilty in all four of his criminal cases. 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.

Lucid’s Stock Price is Still in Reverse: New Lows Are Coming 2024-05-08 16:03:00+00:00 - Key Points Lucid had another tepid quarter with increasing cash burn, sending shares down 15%. The company is capitalized now but will burn through it quickly, raising the risk of additional dilution. Short interest is high and will weigh on the price action for quarters to come. 5 stocks we like better than Lucid Group Lucid’s NASDAQ: LCID stock price has been down-trending since 2021, and it is not over. The Q1 results aren’t horrible, but they did nothing to improve the outlook for growth, market domination, or profits. The results frightened the market because spending is rising, and profitability is as elusive as ever. Because competition in the EV market is heating up, cost is among the largest factors driving consumers, and Lucid cars are expensive EVs, it is unlikely Lucid will change direction soon. Lucid Group MarketRank™ Stock Analysis Overall MarketRank™ 1.98 out of 5 Analyst Rating Reduce Upside/Downside 56.5% Upside Short Interest N/A Dividend Strength N/A Sustainability N/A News Sentiment -0.19 Insider Trading N/A Projected Earnings Growth Decreasing See Full Details Get Lucid Group alerts: Sign Up Lucid CEO Peter Rawlinson touted plans for a low-cost model to rival competitors like Tesla NASDAQ: TSLA , but this is most likely a pipe dream. Rawlinson thinks we could expect such a model, with a target price of $40,000, in 2026, which would be very difficult given the cost of engineering and hurdles to production. Tesla, the current EV market leader, is on the same track and has been for years but is still unable to produce such a vehicle. Tesla makes money and can sustain its operations unaided while leaning into the low-cost route; Lucid does not. Even if Lucid can bring a low-cost model to market by 2026, Tesla is projecting 2025 for its low-cost version, so it will likely retain its leadership position. Lucid Is Clearly Underperforming Expectations, Shares Fall 15% Lucid Group Today LCID Lucid Group $2.71 +0.09 (+3.44%) 52-Week Range $2.29 ▼ $8.37 Price Target $4.34 Add to Watchlist Lucid did not have a terrible quarter, but the 15.6% revenue growth is 520 basis points shy of the consensus as incentives and price cuts dig into the top line. The company says it produced 1,728 vehicles and delivered 1,967, which aided the operating performance, but increased spending offset the gain. Increases in R&D and SG&A of 25% YOY led to a GAAP loss of 30 cents, a nickel shy of the consensus and expenditure is expected to remain hot this year. Spending is necessary to ramp up new vehicle development. Among the many concerns are capitalization. The company is well-capitalized today and received $1 billion in additional funding during the quarter, but it comes at a cost. The new funding and other dilutive efforts have increased the share count by 25% since last year, and more are coming. The balance sheet highlights include 504,450 shares of redeemable convertible preferred stock that weren’t there last year. Investors should expect further dilution because the company is in a cash-burning industry, has limited finances, and has billions of unissued shares. The share count and outlook for dilution are two reasons the short sellers are interested, and the short interest is high. The short interest rate was running near 30% at the last report and has likely remained unchanged. Because the company continues to burn cash investors should expect the short interest to remain high and to increase over time. The company is well-capitalized now, but the $700,000 in quarterly burns will eat through $5 billion in a matter of quarters; additional dilution could be on the table before the end of 2024. Analysts Could Put a Bottom in Lucid’s Market Analysts' sentiment in Lucid soured to Reduce over the past few quarters and is unchanged now. However, the group has hesitated to make revisions immediately after the earnings release and views the stock as undervalued until it does. Marketbeat.com tracks 10 analysts with ratings on the stock, and they come with a consensus target of $4.35 and a low of $2.90. The $2.90 low target is above the current price action and may lead the market to rebound if left unchanged. Lucid shares are in a downtrend and may have reached the bottom, but there are risks for bulls; it could be a penny stock soon. The 15% post-release drop has the market set up to retest the recent low, and a new low may be set. The downtrend will be confirmed in that scenario and may extend to the low $2 range or lower. The MACD and stochastic favor a new low, which may come within days or weeks. Before you consider Lucid Group, 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 Lucid Group wasn't on the list. While Lucid Group currently has a "Reduce" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here

Generac Powers Ahead on the Electrification Mega-Trend 2024-05-08 15:43:00+00:00 - Key Points Generac owns a 70% market share in the backup power generation industry. Generac will gain from mega-trends like the Grid 2.0, clean energy, climate change, and the home as a sanctuary. Q1 2024 gross profit margins improved to 35.6%, up from 30.7% in the year-ago period, attributed to lower input costs, favorable sales mix, and production efficiencies. 5 stocks we like better than Generac Generac Holdings Inc. NYSE: GNRC is attempting to recover from its Q1 2024 earnings selloff. The computer and technology sector company is a leader in manufacturing backup power generators with a 70% market share. It has expanded its offerings to include a range of clean energy, battery and monitoring products. Like many companies in the post-pandemic era, Generac is dealing with an inventory glut as normalization sets in. However, the company is also a major benefactor of the electrification trend, the aging electrical grid, and the growth of mission-critical data centers. Generac's main competitors include Briggs & Stratton Co. NYSE: BGG, Cummins Inc. NYSE: CMI and Terex Co. NYSE: TEX. Get Generac alerts: Sign Up Normalization Gains Footing The company provides energy solutions in all shapes, sizes, and price points, from portable generators to systems as large as a room. Its business is known to be cyclical and reliant on consumer confidence. High interest rates, a weak housing market, rising materials costs, and low consumer discretionary spending took a major toll on its revenues from 2022 to 2023. However, all the indications point toward a turnaround as inflation continues to fall and the hope of interest rate cuts. Benefitting from Grid 2.0 Generac cites several significant mega-trends from which the company will benefit. One of them, Grid 2.0, is the evolution of the traditional electrical utility model. The supply and demand imbalances call for the adoption of renewable energy generation and the “electrification of everything." This includes grid decarbonization, decentralization, migration towards distributed energy resources, and digitization. Generac CEO Aaron Jagdfeld explained, “Power security concerns have never been more apparent as the electrification of everything, deployment of energy-intensive data centers and rising long-term trend of severe weather events pressure the aging electrical grid that is increasingly reliant on intermittent renewable power generation." Daily Ascending Triangle GNRC formed a daily ascending triangle breakdown pattern. The ascending trendline formed at the $126.46 support on April 16, 2024, and rose with higher lows for nine consecutive days to the flat-top resistance at $140.34. The Q1 2024 earnings results caused shares to collapse through the ascending trendline, falling to a double-bottom support near $125.57. The daily relative strength index (RSI) bounced through the 50-band. Pullback support levels are at $128.75, $125.57, $118.63 and $112.25. Solid Q1 2024 Results Generac Today GNRC Generac $137.16 +0.74 (+0.54%) 52-Week Range $79.86 ▼ $156.95 P/E Ratio 37.79 Price Target $142.40 Add to Watchlist Reaffirms Guidance Generac reported Q1 2024 EPS of 88 cents, beating analyst estimates of 76 cents by 12 cents. Net income was $26 million. Revenues ticked 0.2% YoY to $889.27 million, beating $886.6 million consensus estimates. Gross profit margin rose to 35.6% versus $30.7% in the year-ago period due to lower cost inputs, favorable product mix and production efficiencies. Residential product sales rose 2% YoY to $429 million. Commercial & Industrial sales fell 2% to $354 million. Generac reaffirmed guidance for full year 2024, with revenues of 3% to 7% revenue growth. This equates to $4.14 billion to $4.30 billion versus $4.21 billion consensus estimates. Generac anticipates a slightly favorable impact from forex and acquisitions. Net income margin is expected to be around 6% to 7%. The corresponding adjusted EBITDA margin is expected to be around 16.5% to 17.5%, unchanged. Strong operating and free cash flow is expected as the conversion of free cash flow generated will be nearly equal to adjusted net income. CEO Insights Generac MarketRank™ Stock Analysis Overall MarketRank™ 4.36 out of 5 Analyst Rating Moderate Buy Upside/Downside 3.8% Upside Short Interest Healthy Dividend Strength N/A Sustainability -2.45 News Sentiment 0.19 Insider Trading Selling Shares Projected Earnings Growth 29.84% See Full Details CEO Jagdfeld pointed out that shipments and activations were aligned at the end of Q1 2024. This signals that field inventory levels are reaching normalized levels. The removal of excess field inventory will amount to strong YoY growth in home generator sales this year. Power outage activity in the United States was in line historically. Home consultations rose more than 3.5X Q1 2019 pre-COVID levels. Close rates improved moderately on a sequential basis. Generac ended the quarter with 8,800 residential dealers, up 100 in the quarter. Jagdfeld concluded that the recent acceleration in data center construction activity driven by the artificial intelligence AI trend has increased supply/demand imbalances, which lends to the electrification mega-trend. Generac analyst ratings and price targets can be found at MarketBeat. Before you consider Generac, 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 Generac wasn't on the list. While Generac currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here

Oil services company John Wood Group rejects £1.4bn takeover offer 2024-05-08 15:35:00+00:00 - The British oil services company John Wood Group has rejected a £1.4bn takeover offer from a Dubai-based rival, Sidara, which “fundamentally undervalued” the company. Aberdeen-based Wood is the latest British company on the London Stock Exchange to face takeover speculation amid deepening concerns that UK-listed stocks are undervalued compared with other markets. In a statement, the Wood board said the FTSE 250 company had received an unsolicited approach from Sidara to snap it up for a price of 205p a share, but had unanimously rebuffed the offer. “The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects,” it said. A spokesperson for Sidara declined to comment. The approach emerged about a year after the US-based private equity firm Apollo Global Management abandoned a 240p-a-share bid for Wood after multiple attempts and offers, without citing any reasons. Wood is not alone in being a London-listed takeover target. A multibillion-pound bidding war appears to be developing around the FTSE 100 miner Anglo-American after it dismissed an offer from rival BHP as undervalued. The Swiss mining company Glencore is also understood to be drawing up an approach and there is speculation that the British-Australian miner Rio Tinto could follow suit. Last year, BP was forced to assure investors it was not a takeover target as its shares continued to lag rivals in the US. Wood’s share price is well below its pre-pandemic levels of about 600p a share. It jumped from 164p to 204p a share in early trading on Wednesday after the company statement, before settling at about 188p by lunchtime. It is under pressure to revive its floundering market valuation after an activist investor, Sparta Capital Management, called on the Wood board to undertake a strategic review of the business and “actively seek alternative solutions” to its lagging UK share price – including a possible sale. 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 Franck Tuil, who founded Sparta in 2021 after leaving the investment firm Elliott Asset Management, said: “If the UK public markets are unwilling or unable to engage in Wood’s story, we believe you should undertake a strategic review and actively seek alternative solutions.” He added that it might be “time to recognise that the next chapter of Wood’s journey could be best supported by different owners”, and urged the group to “explore the best way to maximise shareholder value, including a sale of the company”.