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Barbie, Nike Air, Cheetos, Mario: Why Movies Are All About Brands Now 2023-07-20 - Hollywood's penchant for capitalizing on fleeting trends has given us many eerily similar "twin films" released at the same time. 1998 alone brought us "Deep Impact" and "Armageddon," "Saving Private Ryan" and "The Thin Red Line," and "Antz" and "A Bug's Life." 2011 served up "Friends with Benefits" and "No Strings Attached." But the release of half a dozen movies about brands — Barbie, Flamin' Hot Cheetos, Tetris, Nike Air, BlackBerry, and Beanie Babies — in six months isn't just the result of Hollywood groupthink and coincidence. Movies about brands have something original concepts don't: audience prerecognition. Because people already know something about the story, the studios surmise, they're more likely to be interested in it. People like Flamin' Hot Cheetos, so they'll probably click on a movie called "Flamin' Hot," the thinking at Hulu went. In a tightening economy, Hollywood has turned toward these kinds of safe bets: 13 more movies based on toys from Mattel, the company behind Barbie, have been announced, and another 45 are in development. Most of these brand-centric movies have another thing in common, compounding their twinness: Instead of just using the brand as a jumping-off point, they focus on the brand's origin story. That's no coincidence either; the rise of this kind of branded success story is an attempt to capitalize on the increasing demand for workers to brand themselves to make a living. Success in the growing gig economy, the market for short-term and freelance work, is predicated on the cultivation and maintenance of strong personal brands. In a sense, successful brands are the new American movie stars. But just as these brand-centric movies ring hollow, so does the gig economy they're catering to. The new movie stars Between this spring and this summer there will have been five movies released whose plots are about the creation of a brand: "Flamin' Hot," "Air," "Tetris," "The Beanie Bubble," and "BlackBerry." They're all named after the main character, the product. You don't need to get into the specifics to know the plot: an underdog tale about how something we like to buy came to be. "Flamin' Hot" is a rags-to-riches account of an industrious janitor who seizes his last chance to pitch a spicy variation of the crunchy corn puff and become a marketing executive. "Air" tells the story of a nearly forgotten shoe brand whose struggling basketball division doggedly pursues a deal with an unproven college basketball player, to everyone's massive success. "The Beanie Bubble" follows Zach Galifianakis as Ty Warner, the unsuccessful toy salesman who landed on the overnight success of Beanie Babies. While glossing over the real barriers to success people face — things like abusive bosses, wage theft, and the precarity of unemployment — the movies focus on how, with some plucky perseverance, anyone can build a world-conquering brand. ("Barbie," which is lining up to be the hottest movie of the summer, is a bit of an outlier in this regard. While the plot isn't about the making of Barbie, Barbie and Ken do step outside Barbie Land to peek behind the curtains of their creation.) While "Barbie" stars Margot Robbie and Ryan Gosling and "Air" stars Ben Affleck, most of these movies lack star power. The human characters often play second fiddle to the brands. This is what makes these movies feel so hollow: Any excitement or positive feelings they engender are ultimately in service of consumer packaged goods. Each movie asks us to feel something … about Flamin' Hot Cheetos. But the narrative is selling because millions of Americans are trying to build similarly successful brands — of themselves. The gig economy's empty promise The gig economy promises a shortcut to the freedoms enjoyed by the entrepreneurs and owners valorized in these films — you get to work when you want to and be your own boss. So far, the pitch has been successful. Since Uber, Fiverr, and other gig companies hit the scene in the early 2010s, the gig economy has been growing: Some 35% of workers in 2021 were freelancers. In the wake of COVID-19, an unprecedented number of people quit their jobs, and many turned to freelancing. The reasons varied: wage stagnation, the precarity of at-will employment, the ever present threat and unpredictability of layoffs. From 1979 to 2020, productivity in the US grew by 61.8% while wages grew by 17.5%. For companies, a big appeal of gig work is the cheap cost of labor. Some studies suggest that using independent contractors — the formal classification of gig workers — instead of full-time employees can save companies up to 30%. As more companies look to gig workers to replace full-time jobs, more workers take up gig work. But just like the films, the gig economy largely hasn't delivered on the goods. In the gig economy, a person is both the product and the business. As such, many gig workers attempt to differentiate themselves from their competitors by crafting a personal brand on social media. With an estimated 58 million American gig workers, it's a race to the bottom to stand out and secure work. In a 2020 survey conducted by the Shift Project, 14% of gig workers said they earned less than the federal minimum wage of $7.25 an hour. The majority — about 64% — of gig workers said they earned between $0 and $14.99 an hour, whereas about 89% of W-2 workers, those employed by a company, said they earned at least $10 an hour. Since almost all gig workers are classified as independent contractors, they don't receive the standard protections and benefits that ordinary employees typically receive. This includes things like a minimum wage, health insurance, access to unemployment insurance if they get laid off, paid sick days, and health-and-safety protections. They also don't have the same right as W-2 employees have to organize and negotiate with their employers for better working conditions. More startlingly, reports of wage theft are widespread: In the Shift survey, 62% of gig workers said they hadn't been paid for their work in at least one instance, and 36% said they'd lost wages three or more times. This adds up. In 2021, the Federal Trade Commission forced Amazon to pay $61.7 million to settle allegations that over two years it'd been stealing tips from contracted delivery drivers. An analysis published by the Economic Policy Institute in 2021 suggests that while earners in all income levels experience wage theft, most are independent contractors and hourly workers. Gig workers have begun to push back on their raw deal. Following three separate strikes this year, Uber and Lyft drivers in New York received pay increases. App-based delivery drivers in New York recently won a minimum wage of nearly $18. There's the rise of Fuck You Pay Me, an app for creators to share and compare the deals they receive from companies and describe what it's like to work with them; before, there wasn't a centralized place, like a Glassdoor, for creators to share their experiences with clients. These recent fights highlight the rot underlying the promise of the gig economy. As the economy continues to emphasize the importance of self-branding through gig work, brand movies will continue to resonate. We're all brands now. And if you decide to wade into the freelance waters, it's best to have your branding floaties equipped. Jared Holst is a Brooklyn-based writer focused on the ways branding impacts all facets of life from pop culture to policy. In addition to Insider, Jared has been published in Naked Capitalism, and self-publishes on Substack at Brands Mean a Lot.
Medicare is barred from paying for weight-loss drugs like Wegovy. Lawmakers just took the first step to change that. 2023-07-20 - Medicare is barred under a 2003 law from paying for weight-loss medications like Wegovy. Lawmakers on Thursday reintroduced a bill that would expand Medicare coverage to the drugs. The legislation faces an uphill battle, because of the high cost of weight-loss treatment. Morning Brew Insider recommends waking up with, a daily newsletter. Loading Something is loading. Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address By clicking “Sign Up,” you also agree to marketing emails from both Insider and Morning Brew; and you accept Insider’s Terms and Privacy Policy Click here for Morning Brew’s privacy policy. A major roadblock has long stood in the way of older Americans getting treatments for obesity: Medicare. The federal program that provides health coverage for people 65 and older is prohibited by a 2003 law from paying for weight-loss drugs such as Wegovy — the expensive injection that's taken the world by storm. And without insurance, most people can't afford the shots, which can cost upwards of $1,000 a month. But US lawmakers on Thursday took steps to broaden access to weight-loss treatment for seniors. They introduced a bill, titled The Treat and Reduce Obesity Act of 2023, in the Senate and House of Representatives that would allow Medicare to pay for weight-loss drugs for the first time. Previous versions of the bill have languished in Congress for more than a decade. This time, though, the proposal is being reintroduced amid an avalanche of demand for new and effective weight-loss drugs and a lobbying blitz by the drugmakers behind them. Should the legislation become law, the implications could extend beyond seniors. Medicare coverage might prod other health insurers to pay for weight-loss medications, as private health plans tend to follow Medicare's lead. About 65 million people are enrolled in Medicare, while more than 150 million people get health coverage from an employer. "With obesity rates on the rise in our country, we must do more to combat this epidemic head on. Too many of those in need are being denied care because of the high cost of medications or inaccessible treatment options," Democratic Sen. Tom Carper said in a press release. Carper reintroduced the bill along with Republican Sen. Bill Cassidy and Representatives Raul Ruiz, a California Democrat, and Brad Wenstrup, a Republican from Ohio. Lawmakers have balked at the cost of weight-loss drugs About 42% of Americans have obesity, a figure that has risen drastically in the last two decades, and about the same amount of older folks have the condition. A new class of weight-loss injections known as GLP-1 agonists — drugs such as Novo Nordisk's Wegovy and Ozempic, and Eli Lilly's Mounjaro — have proven effective at helping people lose a significant amount of weight. But steep price tags and a dearth of insurance coverage have kept the drugs from getting to many people who need them. Lawmakers have balked at the high cost of covering treatment for a condition that historically was seen as cosmetic. One analysis by Vanderbilt University researchers in March estimated that if just 10% of Medicare beneficiaries were treated with Wegovy, the cost to the program would total $26.8 billion a year and premiums for drug plans would increase. Still, lawmakers are facing pressure from drugmakers, obesity doctors, patients, and advocacy organizations that argue obesity should be treated like any other chronic disease, regardless of the cost. Novo Nordisk and Eli Lilly, which have seen their sales soar as Americans clamor for their weight-loss medications, stand to gain even more if Medicare expands coverage, so they're lobbying Congress to make moves. Novo Nordisk spent $4.6 million on lobbying in 2022, the Wall Street Journal reported. Chris Gallagher, a lobbyist and policy consultant for the Obesity Action Coalition, which advocates for obesity treatment, said the bill has a better chance of progressing during this Congress than in the past. That's in part because the agency overseeing the health plan for millions of federal employees clarified that it couldn't exclude anti-obesity medications from coverage. It wouldn't be a good look for lawmakers to deny Medicare beneficiaries a benefit that federal employees have, he said. The buzz in the public around the drugs also helps. "Clearly the excitement about the new medications that are out and in the pipeline, their great efficacy, is also front and center," he said.
A Speedo vs 'outdated swimwear' analogy has officially entered the US-China tech war conversation 2023-07-20 - Xie Feng, the Chinese ambassador to the US, said Washington isn't playing fair in its tech race with China. Restrictions on China are like forcing it to wear outdated swimwear while the US wears Speedos, he said. The tech war between the world's two largest economies has been intensifying. Morning Brew Insider recommends waking up with, a daily newsletter. Loading Something is loading. Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address By clicking “Sign Up,” you also agree to marketing emails from both Insider and Morning Brew; and you accept Insider’s Terms and Privacy Policy Click here for Morning Brew’s privacy policy. It's no secret the US and China are locked in a strategic rivalry — from geopolitical influence to tech — but the competition is now entering bizarre territory. We know that because a reference to Speedos, the purveyor of tight swim briefs, just got thrown into the fray. On Wednesday, Xie Feng, the Chinese ambassador to the US, found the most unexpected analogy to the US-China tech competition by comparing American restrictions on China to different types of swimwear. "It is like forcing the other side to wear outdated swimwear in a swimming contest while you yourself are wearing a Speedo Fastskin," Xie said at the Aspen Security Forum in Colorado on Wednesday. The envoy was referring to the swimwear brand's high-tech performance wear for the sport. Hear the full quote in this tweet from China's state-run CGTN news network. The tech war between the world's two largest economies has been in turbo mode since October last year when the US imposed restrictions on exporting chips to China. And we've now entered the tit-for-tat segment of the tech wars. Earlier this month, China announced it will be banning exports of gallium and germanium — two little-known raw metals used in chip making, electronics, and solar products. That was just days after the Netherlands, a US ally, restricted the sale of high-end chipmaking equipment abroad — a move that appears to be targeting China. The Biden administration now wants to curb Chinese companies' access to US-based cloud-computing services, the Wall Street Journal reported on July 4, citing people familiar with the situation. It also wants to slap further export restrictions on AI chips to China, the Wall Street Journal reported on June 27. China's lined up its own comeback. In May, Beijing banned the sale of chips from Micron, a US company, to China's key domestic infrastructure operators. Xie said China wouldn't shy away from competition but complained that the US was not being fair in its race with China. "The Chinese government cannot simply sit idly by," he told the security forum on Wednesday. "We will not make provocations, but we will not flinch from provocations. So, China definitely will make our response."
87% of classic video games are 'critically endangered.' As a millennial, I'm worried it means a huge chunk of my childhood will disappear. 2023-07-20 - Almost 90% of classic video games are critically endangered, according to a new study. Restrictive copyright law and games fading from distribution means some might never be played by future generations. As a millennial, I'm worried a huge chunk of my childhood will be gone forever. Morning Brew Insider recommends waking up with, a daily newsletter. Loading Something is loading. Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address By clicking “Sign Up,” you also agree to marketing emails from both Insider and Morning Brew; and you accept Insider’s Terms and Privacy Policy Click here for Morning Brew’s privacy policy. My first video game console was the Game Boy, a portal to many hours of adventure and excitement. I got it when I was nine. For every test I did well on in school, my reward was a new game. I spent many evenings glued to it with my brother, immersed in a colourful new worlds. But today, much like other gadgets that have gone out of style, the Game Boy is a relic mostly kept by collectors and those with the know-how to maintain it — a representation of how fleeting video game culture feels. For the first time, a joint July 10 study by the Video Game History Foundation and Software Preservation Network puts a number to that feeling: About 87% of video games released in the US before 2010 are "critically endangered." The Game Boy's days are limited Games released on the Game Boy or the historic Commodore 64 are especially vulnerable, per the report. The study was conducted by checking the availability of 1,500 randomly selected video games released before 2010 across every type of console and PC. The reason behind this doomsday prediction is that games don't stay on store shelves forever and are constantly falling out of commercial distribution. Only the most popular games — like Pokemon or Sonic — get re-released, per the study. Copyright laws also prevent cultural institutions like libraries from preserving and sharing games the same way they do with books and films, the report said. That means a large swathe of classic games — like Metal Gear or Unreal Tournament — are now inaccessible. The study's author says the availability of these classic video games is even worse than the survival rate of silent-era films. Bidding farewell to my millennial childhood The video game industry is bigger than both the film and music industries, the Federal Trade Commission said in a report last year. Globally, video games raked in $170 billion in 2022. The industry is valued at $180 billion today, per the July report. And despite raking in more than five times the revenue of global box office sales last year, video games are still treated as a class of their own under copyright law — without the exemptions needed for us to preserve them. While a huge chunk of the video game industry is at risk, for me, this feels like an important part of my millennial childhood could be gone forever. The next discussion over video games' copyright law is slated for 2024, and the clock is ticking. Our cultural history of play is too precious to let 87% of it slip away.
I've worked as a data analyst at companies like Amazon for 20 years. Using ChatGPT for data analytics is a risky move — AI will never be able to do the work we do. 2023-07-20 - Brandon Southern is the former head of analytics at eBay, Amazon, and GameStop. He says that using ChatGPT for data analytics is a risky move. AI can't do the work of a data analyst, he says, because there are multiple sources of truth. Morning Brew Insider recommends waking up with, a daily newsletter. Loading Something is loading. Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address By clicking “Sign Up,” you also agree to marketing emails from both Insider and Morning Brew; and you accept Insider’s Terms and Privacy Policy Click here for Morning Brew’s privacy policy. I frequently see posts from people suggesting ChatGPT can easily be used for data analysis.I also hear daily comments suggesting that ChatGPT will replace data analyst jobs. As a former head of analytics at Amazon and a 20-year tech and analytics veteran, I'm not all that concerned about ChatGPT replacing data analyst jobs. But what I am concerned about is leaders believing that it can or should replace data analysts' jobs. This would be a disastrous decision given the current state of analytics environments and how ChatGPT works. Using ChatGPT as a replacement to data analysts will accelerate poor decision-making and propagate bad data across corporate networks at a rate that we've never seen before. To ensure decision quality, leaders must avoid putting the cart before the horse when it comes to AI tools and models such as ChatGPT. They must first focus on fully understanding the challenges within their analytics environments and resolve those challenges before building automated tools on top of these environments. Failure to do so will almost certainly result in poor decisions, corporate and financial risk, and erosion of trust by employees and customers. ChatGPT is basically a predictor ChatGPT is a large language model, which sounds fancy, and the responses that it provides has users feeling like it's an intelligent being. But it's far from that. At a basic level, the model is taking a set of information as an input and then it predicts an outcome based on those inputs. To provide an accurate prediction, the model must learn from several different scenarios and been given accurate information. The model will respond with an answer that will be correct or incorrect depending on how it was trained. If you train the model to believe that 2 +2 = 10, it will give you that answer, even though it is wrong. This is why using such models are a major problem for analytics teams. The problem is that we have multiple sources of truth I've worked at Amazon, eBay, GameStop, VMWare, and a handful of start-up companies over the last 20 years. I've also provided consulting and advisory services to many others in the analytics field. What I've learned is that regardless of the company size, age, or industry, they all face the same problems, and one of these problems has to do with multiple sources of truth. For example, a report that the finance team uses says that the company has 10,000 new customers. But a report that the marketing team uses says that the company has 12,000 new customers. Who is correct? Are either of those figures, correct? Is there different context for each of those figures where both reports could be correct? We don't know, at least not without a significant amount of investigation. And that's the current state of analytics teams, without trying to apply machine learning models on top of the current environment. ChatGPT can't do the work of a data analyst Data analysts today don't have accurate and consistent data, along with the proper context for that data in their existing reports, dashboards, and databases. If data analysts can't agree and multiple sources of truth are used to train ChatGPT or other large-language models, we can't expect the model to produce accurate results. Unfortunately, stakeholders are already using this inconsistent information through self-service dashboards and reports, many times without the help of data analysts. The saving grace in today's environment is the protection offered by data analysts. In the current environment, data analysts provide additional context to data output, and they navigate these data issues in real-time as they construct their data analysis. As self-service capabilities increase, data analysts are becoming less involved with assisting stakeholders with data interpretation. This has created a slippery and dangerous slope for the organization as more stakeholders take facts from various dashboards without context provided by an analyst or without additional quality assurance checks. It's a situation that will be accelerated by the ease of use of tools like chatGPT and the blind trust of the results, without understanding the challenges that data-driven organizations face today. Leaders should understand the risk they're taking If leaders subscribe to the notion of ChatGPT being a viable internal analytics solution for their organization, without first resolving the challenges within their analytics organizations, they will be putting the company at risk. Here's how the situation would likely progress: Individual or company-wide teams would believe that chatGPT is a valid solution and implement ChatGPT. They would train the model with the internal data today, even though proper context is lacking, and the current reports have inconsistent results. This would likely happen without team members even realizing that these are issues today. Easy access would be granted to the ChatGPT, much like team members already have with Tableau and Power BI dashboards. The stakeholder would ask ChatGPT questions as they do today, but now without the clarifying follow-up questions being asked by data analysts. These questions are vital to receiving the proper answer but are frequently taken for granted and overlooked in the initial requests by stakeholders. Stakeholders would likely take the most efficient route — a non-verbose prompt — without realizing the potential for inaccurate results. The public has provided sufficient evidence that they don't want to read or write long emails. Instead, they prefer to use quick chat messages, even going as far to use emoji's instead of providing explicit words. This is also true in verbal conversations that I've had directly with stakeholders and with my team members speaking with stakeholders over the last 20 years. Sufficient and detailed information and requirements are almost always lacking from stakeholder requests. Because of these issues, not only will the models receive a bad education and be at risk of producing inaccurate results, even with the most accurate and detailed prompts, but there's a high probability that the prompts will not be sufficient. There's a real risk of chatGPT being used and trusted in organizations. Brandon Southern is the former head of analytics at eBay, Amazon, and GameStop. He also creates TikToks about data analytics and career development.
3 travel agents for the world's wealthiest people share exactly where the 1% are traveling this summer, from Botswana to the Côte d'Azur 2023-07-20 - Summer travel can be done on a budget, but for the world's wealthiest people, no expense is spared. Top travel agents shared the hottest spots they're seeing this year, from Paros to the Côte d'Azur. Luxurious trips to the destinations on yachts or in secluded villas can cost up to $290,000 a week. Get the inside scoop on today’s biggest stories in business, from Wall Street to Silicon Valley — delivered daily. Loading Something is loading. Thanks for signing up! Access your favorite topics in a personalized feed while you're on the go. download the app Email address By clicking ‘Sign up’, you agree to receive marketing emails from Insider as well as other partner offers and accept our Terms of Service and Privacy Policy If you want to know where the richest 1% is traveling this summer, forget Instagram — they're too smart to tag freely and give away their go-to getaways (well, not until they've gotten home, at least). Instead, look to the elite group of agents who help wrangle those jaunts and cater to the wealthiest, most demanding vacationers. Jules Maury. Courtesy of Jules Maury Jules Maury, who runs Scott Dunn Private, the firm within global travel agency Scott Dunn, is available to clients willing to spend at least $100,000 with her every year — but most spend far more. John Clifford. Courtesy of John Clifford John Clifford in San Diego runs International Travel Management and has expertise with LGBTQ+ travel. His client base spends around 10,000 euros a day, or about $11,180, on the trip's basics, before bolting on private experiences — such as a tour of the Vatican without crowds — that cost between 10,000 euros and 15,000 euros each. Edward Granville. Courtesy of Edward Granville Edward Granville runs Red Savannah, a London firm that works with wealthy travelers worldwide. The average trip he books costs around £35,000, or about $45,000, though many cost more than double that amount, and he's regularly booking million-dollar jaunts. Insider asked these travel professionals to share the secrets of where and how the richest 1% are vacationing in summer 2023. The newest trend is 'surf-and-turf travel' Enes Yilmazer Boat sales boomed earlier in the pandemic, and wealthy people's love for chartering sailboats hasn't ebbed in COVID-19's wake. "We're doing so many more yachts than we did before the pandemic, and they're bigger and better as well — the budget has changed from, perhaps, $25,000 per week to up to $90,000," Granville told Insider, citing the new Galapagos-based Aqua Mare as a prime example. Guests aren't seeking flashy, oligarch-style superyachts but comfy sailing vessels that come well furnished, filled with space, and packed with sundecks, aqua foils, and other water toys. Maury agreed. Call it "surf-and-turf travel": Many of her clients now often tack on a week aboard a sleek vessel after seven days at a luxury hotel on land, or vice versa. "I've just spent £140,000 on a yacht with six suites — they want to go and stay on a Greek island, then do something totally bespoke at the end," she said. "It's the element of getting away from people: having amazing accommodation and food, every toy you'd want, and you don't have to share it with anyone." Clifford said he's regularly booking charters this summer in Europe for 75,000 euros a day. "Clients just want to do the whole thing," he said of the Mediterranean voyages he'd organized. "We do an extended itinerary and have everything preplanned." The much-repeated 1% mantra is wanting to get away during a getaway The exterior of the French villa. Côte d'Azur Sotheby's International Realty The ultrawealthy's urge to get away is twofold: Firstly, they're keen to escape everyday life, like any vacationer. Second, they want to escape holidaymaking hoi polloi. Private islands and hotel buyouts have become the default decision for the summer as a result. Properties such as the brand-new Le Grand Jardin, a villa on its own private island just off the Cannes coast on the Côte d'Azur in France, which rents for around $290,000 a week, are in high demand, Granville said. "It has cachet because it's new to the market and it's on its own island, but you really have an entire hotel to yourself, and you're not on the mainland surrounded by other people's villas and traffic," he said. Rather, should you wish to spend an evening dancing at a beach club until dawn, you can take the island's speedboat over for a quick visit. "There's a one-upmanship to it, looking back at all the mess but diving into it whenever you like. That's probably what really gives it that X factor," Granville said. Maury said the words "avoid the crowds" were coming up more and more. She's seen a rise in clients seeking camp buyouts in Africa, where a single group of travelers opts to rent every room in a hotel, effectively turning it into their own private property for the duration of the stay. "We've got seven 1 percenters in Botswana this summer and another three in Namibia, and every booking is over £150,000," she said, adding that three of these bookings were at the new 12-room high-design lodge Xigera in Botswana's Okavango Delta. Botswana is a favorite, she added, because the camps are smaller than in somewhere like Kenya, making buyouts more viable, and the bush teems with life. "At Mombo, you're blown away — turn the corner, and there are 15 leopards, 15 cheetahs, 300 elephants. In Botswana, you pay for the game," Maury said. The ultimate secluded vacation, though, is renting a property that isn't even publicly available, Granville said. Take one property in Porto Heli in Greece, which is more like its own village: a seven-house complex complete with taverna and a town square. It costs $185,000 to rent for one week from the shipping magnate who built it for himself. "He doesn't want it advertised or promoted," Granville said, adding that it's not listed on the firm's website. "You have to be slightly vetted to even be accepted to book it," he said. Greece stands out as a clear favorite for 2023 Getty Images/Rod Stables / EyeEm The Med remains a superrich playground for summer. One country, though, is outpacing its rivals for bookings with these agents: Greece. "If I had to put Italy, Spain, Greece, and France in a league table this year, Greece would be winning — Italy has forever been No. 1, but it's probably No. 2 now," Granville said. Greek travel remains island-centric, but he said that longtime mainstays, especially Mykonos, had fallen from favor, displaced by a set of up-and-comers. Granville listed Paros as the most mentioned new destination. "In the last year or so, when people say they want to go to Greece, it's Paros they mention. Everyone knows Mykonos is full and a rip-off, but Paros is back to a Greece that existed before it got taken over by the party animals and beach clubs," Granville said. It's a startling makeover for Paros, which, in recent years, effectively acted as a stopover for ferries sailing from Athens to other islands. Hotels such as Cosme, Parilio, and the Nobu-endorsed Avant Mar, which debuted this summer, have upgraded the accommodation options to be worthy of the richest people — another obstacle it long faced. Maury said she's seeing the same interest in her clients. "Nobody really wants to go to Mykonos," she said, adding that she'd been working on a sailing itinerary that hit Paros and Milos instead. "People want to go to uninhabited beaches, somewhere off the grid, and the only way you can do that is by yacht," she said. The 'White Lotus' effect has caused a backlash among travel's elite The exterior of the hotel shown in the second season of "The White Lotus." HBO Don't count Italy out, entirely, though: Maury, for example, was juggling 11 simultaneous bookings in early June, all of them on the Amalfi Coast and costing at least £100,000 each. Clifford called his bookings to Rome "balls-to-the-wall crazy," driven mostly by the opening of a slew of attractive five-star hotels, including the new Bulgari, a homecoming for the Rome-born jewelry brand, and Six Senses Rome, which imports the brand's signature spa-driven hospitality to the center of the old city. One place that the superrich are likely to skip, though? Sicily. That island is experiencing a tourism boom, driven in huge part by the latest season of the megahit "The White Lotus" — not just the Four Seasons-operated San Domenico Palace, where the show was based, but also the entire island. For that very reason, its appeal to the true upscale traveler is tarnished, Clifford said. "The Four Seasons is happy as a clam, as they're now booked all through next year," he said. "But for real luxury travelers, especially the top 1% — they don't want to be stuck anywhere with selfie-snapping children."
Convicted Ponzi schemer granted clemency by Trump charged with new Ponzi scheme 2023-07-19 - Former US President and 2024 Republican Presidential hopeful Donald Trump gestures about weight lifting as he speaks at a Republican volunteer recruitment event at Fervent, a Calvary Chapel, in Las Vegas, Nevada, July 8, 2023. WASHINGTON — A New Jersey man who had his prison sentence for running a massive Ponzi scheme commuted by Donald Trump on the final day of his presidency was charged Wednesday with orchestrating a similar scheme. Eli Weinstein and four accomplices are accused of overseeing a new Ponzi scheme that prosecutors say has defrauded 150 victims out of more than $35 million. Weinstein has now been charged with defrauding investors three times. The first came in 2013, when he pleaded guilty to 45 counts of fraud and conspiracy for stealing over $200 million from investors. In 2015, he pleaded guilty in a second case, this time to committing wire fraud while he was on trial for the Ponzi scheme. Weinstein had served eight years of his 24-year prison sentence when Trump granted him clemency in 2021, as one of 143 people who received either pardons or commutations during Trump's final hours in office. His release from prison capped a costly lobbying effort that enlisted people close to Trump, including attorney Alan Dershowitz, to argue that Weinstein never got a fair trial. The campaign to get Trump to grant clemency to Weinstein was later the subject of a New York Times story, which detailed how Weinstein's allies paid for access to various Trump insiders.
Google Tests A.I. Tool That Is Able to Write News Articles 2023-07-19 - Google is testing a product that uses artificial intelligence technology to produce news stories, pitching it to news organizations including The New York Times, The Washington Post and The Wall Street Journal’s owner, News Corp, according to three people familiar with the matter. The tool, known internally by the working title Genesis, can take in information — details of current events, for example — and generate news content, the people said, speaking on the condition of anonymity to discuss the product. One of the three people familiar with the product said that Google believed it could serve as a kind of personal assistant for journalists, automating some tasks to free up time for others, and that the company saw it as responsible technology that could help steer the publishing industry away from the pitfalls of generative A.I. Some executives who saw Google’s pitch described it as unsettling, asking not to be identified discussing a confidential matter. Two people said it seemed to take for granted the effort that went into producing accurate and artful news stories.
Analysis Says Biden’s New Student Debt Plan Could Cost $475 Billion 2023-07-19 - President Biden’s new repayment plan for federal student loans will cost the government $475 billion over the next decade, according to a new economic projection. The updated income-driven repayment plan would surpass the $400 billion cost of the debt forgiveness plan that the Supreme Court rejected last month. The new repayment plan, announced last year and completed this month by the Education Department, offers borrowers a new option that caps payments for undergraduate loans at no more than 5 percent of the borrower’s income. After a borrower makes payments for either 10 or 20 years (the term depends on the size of the loan), any remaining balance would be forgiven. The government — the largest lender to Americans who borrow to pay for college — already offers a variety of income-based repayment plans. But a new and revised plan, which the administration has named Saving on a Valuable Education, or SAVE, is vastly more generous. That means the government, not borrowers, will ultimately pay a bigger share of the recipients’ educational costs. Economists for the University of Pennsylvania’s Penn Wharton Budget Model, a nonpartisan research group, estimate that payment reductions in the $1.6 trillion in outstanding federal student loans will cost the government $200 billion. But the biggest chunk of the program’s cost — a projected $275 billion — will come from reduced payments on the $1 trillion in new loans that the researchers expect will be made over the next decade.
This Yield Curve Inversion Is ‘Different,’ Goldman Sachs Says 2023-07-18 - (Bloomberg) -- While the deeply inverted yield curve has stoked anxiety among investors about the prospect of a recession, Goldman Sachs Group Inc. has a different message: stop worrying about it. Most Read from Bloomberg “We don’t share the widespread concern about yield curve inversion,” Jan Hatzius, the bank’s chief economist wrote in a note Monday, cutting his assessment of the probability of a recession to 20% from 25%, following a lower-than-expected inflation report last week. Hatzius stands in opposition to most investors who point out that the curve inversion has an almost impeccable track record of foretelling economic downturns. The three-month T-bills yielded more than 10-year notes before each of the past seven US recessions. Currently, the short-term yields are more than 150 basis points above the longer-maturity notes, close to the biggest inversion in four decades. Read more: Goldman’s Hatzius Cuts Odds of US Recession in Next Year to 20% Normally, the curve is upward sloped because investors demand higher compensation — or term premium — for holding longer-maturity bonds than short-term ones. When the curve turns upside down, it means investors are pricing in rate cuts large enough to overwhelm the term premium, such a phenomenon only occurs when recession risk becomes “clearly visible,” Hatzius explained. This time, though, things are different, the economist said. That’s because term premium is “well below” its long-term average, so it takes fewer expected rate cuts to invert the curve. In addition, as inflation cools, it opens “a plausible path” to the Federal Reserve easing up on interest rates without triggering a recession，according to Hatzius. When economic forecasts became overly pessimistic, Hatzius added, they put downward more pressure on longer-term rates than justified. “So the argument that the inverted curve validates the consensus forecast of a recession is circular, to say the least,” he wrote. --With assistance from Liz Capo McCormick. Most Read from Bloomberg Businessweek ©2023 Bloomberg L.P.
US sues 'consent farm' operator for 'massive' telemarketing deception 2023-07-18 - FILE PHOTO: Signage is seen at the Federal Trade Commission headquarters in Washington, D.C. By Jonathan Stempel (Reuters) - The U.S. government on Monday sued a New York-based company for allegedly operating a so-called "massive 'consent farm' enterprise" to trick nearly 1 million people a day into providing personal information and consent to receive telemarketing calls. Fluent LLC was accused of having since 2011 used deceptive ads and websites to promise free rewards, including from familiar brands such as Amazon and Walmart, that were impossible to obtain, and interviews for jobs that did not exist. The Department of Justice and Federal Trade Commission said Fluent's true purpose was to sell "leads" to telemarketers that later inundated consumers with robocalls, texts and emails about auto warranties, debt reduction, for-profit education, pain cream, solar energy and other products and services. According to a complaint filed in the West Palm Beach, Florida federal court, tens of millions of people were deceived, including many on the National Do-Not-Call Registry, with Fluent in 2018 and 2019 alone generating $93.4 million in revenue from selling more than 620 million leads. Fluent operates under such names as Flash Rewards, the National Consumer Center, The Reward Genius, Up Rewards, FindDreamJobs, JobsOnDemand and StartACareerToday, the complaint said. A lawyer for the company did not immediately respond to requests for comment. The complaint seeks civil penalties and an injunction against further violations of federal telemarketing laws. On Tuesday the FTC, in conjunction with 101 federal and state law enforcers, plans to announce "Operation Stop Scam Calls," a crackdown on telemarketers, lead generators and others responsible for billions of illegal telemarketing calls. The case is U.S. v. Fluent LLC et al, U.S. District Court, Southern District of Florida, No. 23-81045. (Reporting by Jonathan Stempel in New York; Editing by Aurora Ellis)
The Youngest-Ever Harvard Law Graduate Earned Over $100 Million From An Unknown Tech Company — More Than Apple CEO Tim Cook 2023-07-18 - The Youngest-Ever Harvard Law Graduate Earned Over $100 Million From An Unknown Tech Company — More Than Apple CEO Tim Cook Kiwi Camara, CEO of Austin-based legal technology firm CS Disco Inc., is one of the few executives who can claim a compensation package surpassing that of Apple Inc. CEO Tim Cook. While Cook is expected to face a pay cut this year of around 40%, following shareholder guidance and his own recommendation, his compensation for fiscal 2022 reached $99.4 million, as disclosed in Securities and Exchange Commission filings. Don’t Miss: CS Disco, with a book value slightly exceeding $500 million, stands in stark contrast to Apple's massive $2.98 trillion net worth. According to data from analytics company C-Suite Comp, nine CEOs crossed the $100 million mark in total compensation last year. Among these executives are Blackstone Inc. CEO Stephen Schwarzman, who received $253 million, and Alphabet Inc. CEO Sundar Pichai, who earned $216 million. Hertz CEO Stephen Scherr also joined the exclusive club with a compensation package totaling $182 million. Camara, a 39-year-old entrepreneur, secured almost $110 million in earnings last year, a substantial increase from his previous year's earnings of $1 million. This achievement was the result of a combination of $500,000 salary and $109 million in stock options. The value of the stock options is tied to specific targets, which must be met by 2032, or in the event of an acquisition or Camara's departure from his position. While the compensation is amongst the highest in the world, many companies are often happy to pay millions for some of the top talent in the world. While this can often be a contentious point for investors and stakeholders alike, top executives have experience growing companies into the billions ultimately adding unparalleled valued. Startups are often nothing more than a founder and an idea. Even Microsoft Corp. was once a startup, and while Bill Gates made hundreds of billions on its rise to the top, so did many of its shareholders. The potentially lucrative nature of startup investing has helped propel the recent spike in startup investing on platforms like StartEngine and Wefunder. To stay updated with top startup news and investments, sign up for Benzinga's Startup Investing & Equity Crowdfunding Newsletter About Camara Born in the Philippines, Camara migrated to the United States as an infant, but his path was not without its share of controversy. In 2002, while a 16-year-old Harvard University law student, he uploaded class notes online, inadvertently revealing his use of a racial slur in reference to legal covenants restricting Black people from purchasing land. This incident sparked a considerable outcry among his peers. Camara issued an apology for his use of the offensive term and later revealed that it hindered his prospects of securing a prestigious position at a law school. He graduated from Harvard at age 19, making him the youngest graduate in the school's history so far. But in 2007, he made headlines again for being the 22-year-old whiz kid who couldn't land a job, which he said was a result of the racial slur. In 2013, Camara ventured into the world of legal technology by establishing CS Disco. The company focuses on cutting-edge technologies such as artificial intelligence (AI) and cloud computing, aiming to streamline workflows for lawyers and law firms. CS Disco made $135.2 million in revenue during its 2022 fiscal year. However, the company also reported a net loss of $70.8 million, marking an increase from the previous year's net loss of $24.3 million. The number of CEOs surpassing the $100 million threshold in 2022 compared to the previous year has declined. Last year, Bloomberg reported that more than 30 public company executives exceeded $100 million at the end of 2021. This trend is indicative of the growing skepticism among shareholders and investors regarding executive pay. As an example, Netflix Inc. shareholders recently voted against a pay package for Co-CEO Ted Sarandos, which included a $3 million salary, $20 million in stock and a potential bonus of up to $17 million. Although the vote was nonbinding, it was initiated by striking writers who voiced their concerns over the executive's compensation. Such developments reflect a broader shift in attitudes toward CEO pay and the increasing scrutiny being placed on these remuneration practices. See more on startup investing from Benzinga: Don't miss real-time alerts on your stocks - join Benzinga Pro for free! Try the tool that will help you invest smarter, faster, and better. This article The Youngest-Ever Harvard Law Graduate Earned Over $100 Million From An Unknown Tech Company — More Than Apple CEO Tim Cook originally appeared on Benzinga.com . © 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Civil rights groups sue Florida officials over new immigration law 2023-07-18 - MIAMI (AP) — Several civil rights groups filed a federal lawsuit on Monday challenging Florida’s new immigration law. The Southern Poverty Law Center, American Civil Liberties Union, ACLU of Florida, Americans for Immigrant Justice and the American Immigration Council filed the lawsuit in Miami federal court against Florida Gov. Ron DeSantis, Attorney General Ashley Moody and Statewide Prosecutor Nicholas B. Cox on behalf of the Farmworker Association of Florida and others, according to court records. The legislation that DeSantis, a Republican, signed into law in May bolsters his migrant relocation program and limits social services for immigrants lacking permanent legal status. It also expands requirements for businesses with more than 25 staffers to use E-Verify, a federal system that determines if employees can legally work in the U.S. Another provision requires hospitals that accept Medicaid to include a citizenship question on intake forms. The lawsuit specifically focuses on provisions that criminalize the transportation of individuals into Florida who may have entered the country unlawfully and have not been “inspected” by the federal government since. The complaint states it is unconstitutional for a state to unilaterally regulate federal immigration and subject people to criminal punishment without fair notice. It also asserts Florida’s use of the term “inspection” is incoherent and unconstitutionally vague. DeSantis launched a campaign for the 2024 GOP presidential nomination in May, playing up his tough stance against illegal immigration. DeSantis has sent Florida National Guard soldiers to Texas for border security and directed Florida to pay for charter flights carrying migrants from Texas to other parts of the country. The governor’s office didn’t immediately respond to a message seeking comment about the lawsuit on Monday. A spokesman for the governor’s office previously has said the new law targets illegal immigration, not those who are in the U.S. legally.
As the Dow hits 2023 high, one of the oldest stock-market forecasting tools is making a comeback 2023-07-18 - One of the oldest methods for anticipating where the U.S. stock market could be headed is making a comeback as the Dow Jones Industrial Average touches a fresh 2023 high. It’s called the Dow Theory, and it dates back to the dawn of the 20th Century, when U.S. investors chiefly had two major stock-market benchmarks to examine: the Dow Jones Industrial Average DJIA, +0.22% , and its sibling, the Dow Jones Transportation Average DJT, -0.01% . On Monday, the Dow industrials logged a fresh 2023 closing high, finishing at 34,585.35 after climbing 76.32 points, or 0.2%, according to FactSet data. That marked the blue-chip gauge’s highest close since Nov. 30, 2022, when it finished at 34,589.77, the Dow industrials’ current 52-week high. As of Monday’s close, the Dow roughly was 0.1 percentage points away from reaching a fresh 52-week high, according to Dow Jones Market Data. Meanwhile, just last week, the Dow transports, a gauge of 20 stocks related to railroads, airlines and delivery and logistics services like FedEx Corp. FDX, -1.06% , reached a new 52-week high of its own. The timing looks auspicious, with one longtime stock-market analyst saying the Dow Theory is sending its first bullish signal in more than 15 months. “Despite numerous warning signals from cross asset analysis, including the still deeply inverted yield curve, Dow Theory, which is one of the most historically accurate strategies to identify the primary trend in the stock market, is now saying the path of least resistance is higher for the first time since April of 2022,” said Tom Essaye, founder of Sevens Report Research and a former Merrill Lynch trader, in a Monday note to clients. Craig Johnson, chief market technician at Piper Sandler Technical Research, was slightly more cautious in his assessment, but not by much. While the Dow Theory signal hasn’t technically been issued yet, he said it likely will emerge soon, once new 52-week highs have been cemented, barring a sudden swoon for markets. “Dow theory is alive and well, for sure,” Johnson said in a phone interview with MarketWatch. “We’re not quite there yet, but you’re getting very close to getting a Dow Theory buy signal.” What’s the Dow Theory? Pioneered by Charles H. Dow, one of the founders of The Wall Street Journal and Dow Jones & Co., and the publisher of MarketWatch, the theory states that if two stock-market averages, most commonly the Dow industrials and transport gauges, reach notable new highs within the same short period, then the broader market is likely headed higher. It also was one of the first theories that sought to codify a methodology for prognosticating where the market might be headed in the intermediate future. For more than a century, it’s been a staple in the repertoire of technical strategists, who aim to glean insights through analysis of stock-market charts and indicators. Dow Theory has lost some of its luster in modern times, especially as the Dow has taken a backseat in recent years to the S&P 500 SPX, +0.39% and highflying tech-heavy indexes like the Nasdaq Composite COMP, +0.93% and Nasdaq-100 NDX, +0.95% . Critics also have lambasted it as overly simplistic. But proponents of the Dow Theory can still point to a wealth of historical data showing it generally works as a buy signal, especially if its broadened to include other indexes like the now-dominant S&P 500. What is it telling us? Dow Theory is telling investors that the market rally will likely continue as cheaper areas of the market catch up to highflying megacap technology names. Some say this trend already appears to be under way, since the Russell 2000, a gauge of small-cap stocks, and previously lagging sectors like the S&P 500 Industrials Index, have picked up over the last month. Over the past 30 days, the S&P 500 industrials sector has risen 3.8%, beating gains over the same stretch for information technology stocks, the market leaders so far this year, according to FactSet data. “What’s amazing to me when you look at this whole thing and you put it together, there’s got to be a catch up with small- and mid-cap stocks,” Johnson said. Although the S&P 500 and Nasdaq already have seen impressive gains this year, there’s plenty of room for other areas of the market to power higher. Johnson noted that the record highs for the Dow transports and industrials are still a ways off. The industrials are still 6.4% shy of the record highs reached in early January 2022, FactSet data show, while the transports are still more than 13% below their record highs from early November 2021. But according to Johnson, bullish signals aren’t only emanating from the charts. There’s a common-sense component as well. “What are portfolio managers going to do that have been fighting this tape all year? If you’re bearish and this market makes a record high, you’re not going to have a lot of friends.”
Women’s World Cup: Australian team targets FIFA over prize money inequity 2023-07-18 - Just days before the Women’s World Cup kicks off in New Zealand and Australia, the Australian women’s team has called out soccer’s global governing body FIFA over prize money inequity compared with the Men’s World Cup. “Collective bargaining has allowed us to ensure we now get the same conditions as the [Australia men’s national soccer team] Socceroos, with one exception,” the Australian players said, in a video statement tweeted by Professional Footballers Australia on Sunday. “FIFA will still only offer women one-quarter as much prize money as men for the same achievement.” MarketWatch has reached out to FIFA with a request for comment on this story. Related: Megan Rapinoe may be retiring, but her story ‘is not done yet,’ says U.S. Soccer Federation chief In March, FIFA President Gianni Infantino announced that $110 million of basic prize money will be awarded at the Women’s World Cup, up from $30 million for the 2019 tournament. However, that is dwarfed by the $440 million in prize money available at last year’s Men’s World Cup in Qatar. Infantino said that FIFA aims to have equality in payments for the Men’s and Women’s World Cups in 2026 and 2027, respectively. Last month, FIFA also announced a new financial distribution model ahead of the Women’s World Cup, detailing player payments at the tournament. Players whose teams exit the tournament at the group stage will receive $30,000, according to FIFA, with payments rising depending on how far teams progress in the tournament. Related: Women’s World Cup could be worth $300 million in media rights “Under this unprecedented new distribution model, each individual player at the FIFA Women’s World Cup 2023 can now fully rely on remuneration for their efforts as they progress through the tournament,” Infantino said in a statement. “The captain that ultimately lifts the iconic FIFA Women’s World Cup Trophy on Aug. 20 in Sydney will receive $270,000, as will each of her 22 teammates.” “The global salary of women’s professional footballers is approximately $14,000 annually, so the amounts allocated under this unprecedented new distribution model will have a real and meaningful impact on the lives and careers of these players,” Infantino added. New Zealand faces Norway in the World Cup’s opening game Thursday, with the Australian team, known as the Matildas, playing Ireland later that day. Related: Women’s World Cup 2023: When does it start? How much do the players make? Other national teams have been fighting for pay equity. Last year the U.S. women’s national team won their long fight for equal pay with the men’s national team. The Canadian women’s national team, winners of the gold medal at the Tokyo Olympics, has also been embroiled in a fight for pay equity with Canada Soccer.
IBM has been talking up AI, but here’s what investors should really focus on in earnings 2023-07-18 - International Business Machines Corp. may be hitching to the artificial-intelligence bandwagon with its new WatsonX initiative, but analysts are more interested in areas of Big Blue’s business that are translating into serious revenue in the here and now. When IBM IBM, +0.63% reports second-quarter earnings after Wednesday’s market close, analysts will be keenly watching for commentary on the company’s open-source software platform Red Hat, with UBS analyst David Vogt pessimistic about the potential for upside there in the second half of the year. “By segment, Red Hat growth in the second quarter remains an important metric to monitor as management expects Red Hat to contribute ‘about half of the expected 5 points of software growth’ in 2023,” wrote Vogt, who has a sell rating and a $110 price target on IBM’s stock. Vogt forecast Red Hat growth of 11% for the second quarter, which would require “a sharp acceleration” in the second half of the year to hit the midpoint of the company’s 11% to 13% guidance. Given cautious commentary from other Linux companies, Vogt sees reports of “push outs and [a] reduction in contract lengths” as potentially risky signals heading into the second half of the year. Meanwhile, Red Hat is facing backlash over its new source-code policies that are reportedly making it difficult to create operating systems compatible with Red Hat Enterprise Linux, according to ZDNet. As companies rush to convince investors of their involvement with AI, IBM has played up its WatsonX enterprise-AI offering, but while JPMorgan analyst Brian Essex was “encouraged” by the product, he’s not expecting a sizable financial role for it in the near term. Essex wrote that he does “not expect meaningful revenue contribution until next year at the earliest and think[s] investors will need to see evidence of traction before underwriting an AI contribution due to mixed results IBM has had in the past with traditional AI efforts.” He rates IBM shares at neutral with a $145 target price. Also read: Amazon, Microsoft and Google cloud services bet heavily on AI, but do their customers even want it? Stifel analyst David Grossman said that while it’s too early for WatsonX to contribute to material growth, the product “appears to be a solid open-AI platform integrating IBM’s core technologies.” “IBM will have a seat at the enterprise AI table given its legacy Watson initiative, increasing security concerns and enterprise positioning,” Grossman said, recommending the stock as a “defensive market hedge” for “dividend-sensitive” investors. He has a buy rating and a $140 price target on the shares. Last earnings report: IBM boasts how AI can improve productivity, pays up to $260 million in ‘stranded costs’ after laying off thousands “While IBM continues to trade below primary peers in core markets and the company has seen meaningful margin expansion over the past few years, we think greater consistency and more favorable macro conditions are needed for fundamental upside and multiple expansion,” Grossman said. IBM confirmed in late June an $4.6 billion all-cash deal for cloud-based business software company Apptio. Grossman estimates that Apptio could come to add up to 40 basis points to software growth and less than 20 basis points to IBM’s overall growth rate. IBM is forecast to report second-quarter earnings of $2.02 a share on revenue of $15.57 billion, compared with $2.31 a share on revenue of $15.54 billion in the year-ago period, according to FactSet data.
Verizon’s lead ‘overhang’ may limit dividend increases, analyst says in downgrade 2023-07-18 - Verizon Communications Inc.’s stock has been under pressure in the wake of recent reporting on legacy lead-sheathed cables used within the telecommunications industry, and one analyst worries the stock could stay in the penalty box. Edward Jones analyst David Heger downgraded Verizon shares VZ, -7.50% to hold from buy Monday, writing of his concerns after the Wall Street Journal reported on the lead cables that were used in the past by telecommunications companies and that are still in the ground and elsewhere today. “We are uncertain if remediation measures could be required by environmental regulators and whether health concerns could cause sizable litigation liabilities,” Heger wrote. “Similar to other companies that have faced environmental health issues, we think that uncertainty around these issues could limit share appreciation for Verizon.” Shares of Verizon were down 7.5% Monday, while shares of AT&T Inc. T, -6.69% , downgraded at Citi Monday, were off 6.8%. See also: Verizon’s stock slides toward lowest level in more than 12 years amid longest losing streak since 2017 Heger keyed in on Verizon’s dividend in his note to clients. The stock’s yield had already been “elevated” at upwards of 7% before Monday’s trading began, “which may indicate concern about the dividend’s sustainability,” he wrote. While Verizon’s dividend coverage is expected to improve as 5G spending falls this year and next, Heger wonders if the “overhang” related to lead-sheathed cables will limit the company’s flexibility. The cost of potential environmental-remediation measures “is difficult to estimate and might limit Verizon’s ability to increase its dividend while covering these costs,” he wrote. “We think these concerns are balanced with our expectations for improvements in consumer wireless, continued growth in wireless revenue, and improving free-cash flow as Verizon completes 5G network investments.” Read: AT&T sees ‘incredibly healthy’ wireless market, even as several factors will ding growth this quarter Verizon directed a request for comment to USTelecom, a trade association of which it is a member. “We have not seen, nor have regulators identified, evidence that legacy lead-sheathed telecom cables are a leading cause of lead exposure or the cause of a public health issue,” a spokesperson for the trade group said last week. The spokesperson added Monday that there are various considerations that determine “whether legacy lead-sheathed telecom cables should be removed or should be left in place, including those regarding the safety of workers who must handle the cables, potential impacts on the environment, the age and composition of the cables, their geographic location, and customer needs as well as the needs of the business and infrastructure demands.” The industry “stands ready to engage constructively on this issue,” the spokesperson said. Raymond James analyst Frank Louthan IV, meanwhile, wrote that Wall Street seems to be “materially off base” with expectations for the cost of cable removals, which he thinks won’t be as high as investors anticipate. He’s also not sure if the cables will all need to be removed given “apparent lack of action to date” on the part of regulators. “When we put all this into perspective, and given that this was within the environmental regulations of the time and risk of increased contamination is low, it seems reasonable that the cost of this will be spread out over 10+ years, further minimizing the risks to the carriers and their investors,” Louthan wrote. He added that the focus likely “will shift from cable removal to liability for workers that had reasons to claim ingestion and the related harm, which has a higher likelihood of being covered with various insurance the industry has.” Don’t miss: Verizon CEO says the wireless market isn’t such a bad business after all
Did you inherit an IRA? IRS offers some breathing room on how much you can withdraw this year. 2023-07-18 - The Internal Revenue Service says many people inheriting IRAs are required to empty out the account within 10 years of the original owner’s death, but the tax agency recently gave some account holders more breathing room. Exceptions to this rule include the original owner’s spouse, a minor child, or an heir who is chronically ill or disabled. For everyone else, the IRS waived the penalty if the heirs choose not to take a 2023 required minimum distribution for an IRA they inherited in 2020 or later, the tax agency said in a Friday notice. The penalty relief, which was also granted last year for the same reasons, applies to inherited accounts where the original owners were old enough to start taking required minimum distributions before their death, tax experts told MarketWatch. “It just means for another year, you can skip it,” said Ed Zollars, of Thomas, Zollars and Lynch in Phoenix, Ariz. “It’s a very narrow case, but it could be important” — especially for the segment of people who are affected, he added. The Friday penalty waiver applies to other retirement accounts inherited from 2020 and on, including inherited 401(K) accounts, an IRS spokesman said. The penalty for not taking a required minimum distribution is up to 25% of the amount that would have come out that particular year. The issue began with new federal laws in the SECURE Act of 2019, which said inherited IRAs had to be emptied out 10 years after the owner’s death (again, if the heir was not the original owner’s spouse or a minor child). People who inherited the accounts, but did not fall in these categories, had a 10-year window to close the accounts. Confusion over the rules Despite the IRS’s onetime view of the 10-year rule, proposed Treasury Department regulations did require heirs to make minimum yearly payouts before finally emptying the account, said Robert Dietz, national director of tax research at Bernstein Private Wealth Management. In an effort to bridge the confusion between the IRS rules and the Treasury’s regulations, the IRS introduced temporary penalty relief. “The big question is — are these annual distributions going to be required when we see final regulations?” Dietz said. The IRS taxes the money from inherited accounts as ordinary income. Thus, if taxpayers are already expecting a high income this year, they can hold off on that IRA payout —- under the latest penalty relief greenlit by the IRS on Friday — to avoid potentially pushing them to a higher tax bracket, Zollars said. But Dietz said it may not always be in your best interest to wait before taking the IRA distributions. Taking regular distributions over time may make more sense “versus just waiting until year 10 and having more of that income at a top marginal rate.” There’s another unknown — namely, what income tax rates will look like from 2026 onwards. The 2017 Tax Cuts and Jobs Act temporarily lowered five of seven income tax rates (the top rate fell to 37% from 39.6%). Without Congressional action before a sunset at the end of 2025, the rates revert to their higher levels — not to mention a slew of other rules for individual taxpayers. Some people, Dietz said, who have inherited IRAs may have the following revelation: “Maybe we ought to get all this out within a three-year period versus waiting.”
Commercial real estate prices are still expected to crater, Morgan Stanley warns 2023-07-18 - The U.S. economy isn’t the only thing unwilling to capitulate despite sharply higher interest rates. Commercial real-estate prices have been heading lower in the wake of the pandemic and the Federal Reserve’s inflation fight, but the bulk of the pain still looks poised to come, according to Morgan Stanley analysts. Prices for apartment buildings, offices properties and retail centers were pegged at about 8%-14% lower in May from peak levels (see chart), or less than Morgan Stanley’s initial estimates (blue line). Commercial real-estate prices are about 12% lower nationally, but still expected to fall by almost 30% in this cycle. Real Capital Analytics, Morgan Stanley Research But the worst for property owners looks yet to come, according to Morgan Stanley’s REIT research team led by Ronald Kamden. The team reiterated its call for a 27.4% peak-to-trough price drop for all commercial property types through the end of 2024. That compares with a 34.9% drop roughly 15 years ago during the global financial crisis, but also a subsequent period in which prices rose nearly 150% through the pandemic, according to Morgan Stanley data. Prices have been heading lower overall, but with retail, industrial and office properties in the suburbs and central business districts, still facing the majority of their anticipated price declines “as transaction activity and distressed sales rise,” the team wrote in a Monday client note. Up to 42% price drop? Half-empty office buildings in the heart of financial districts in major U.S. cities are expected to be hit particularly hard by hybrid work, tighter credit and higher interest rates. See: San Francisco’s office market erases all gains since 2017 as prices sag nationally: chart New York magazine recently wrote how big Manhattan office landlords are looking to shed buildings now worth less. The hardest-hit cities could see demand for office buildings tumbling by as much as 38% from 2019 levels, according to a McKinsey Global Institute report from earlier in June. The report also pegged office prices as falling about 26% on average in a moderate scenario through 2023, but skidding 42% in a severe scenario. BofA Global researchers led by Alan Todd also said that pressure in the office sector could “spill over” into other property types, including hotels and retail, by making refinancing more difficult. “For example, to the extent airline costs remain elevated, flight cancellations remain a common problem, or corporate belt tightening limits fly-to in person meetings, we see it as a headwind for hotel revenues, which can fluctuate significantly with the public’s ability or willingness to travel,” Todd’s team wrote, in a weekly client note. The Dow Jones Equity REIT index DJDBK, -0.77% was up 3.1% on the year through Monday, according to FactSet. Stocks have punched higher in 2023 in the wake of a resilient U.S. economy, despite the Fed already having raised rates by about 500 basis points to a range of 5%-5.25%. Fed officials indicated that two more rate hikes could still be in store this year, likely with another 25 basis point rate increase expected later this month. The S&P 500 index SPX, +0.39% was up about 17.8% on the year through Monday, while the Dow Jones Industrial Average DJIA, +0.22% was 4.3% higher and the Nasdaq Composite Index COMP, +0.93% was up 36%, according to FactSet. Related (February): Losing the trophy? A $45 billion mortgage bill is coming due for some of America’s signature commercial properties Read next: Do Not Disturb: Tenants brace for more office landlords to go belly up on their property debts
Opinion: ‘We’re missing the point when it comes to the crisis of student debt.' 2023-07-18 - Last month, the Supreme Court ruled that the Biden administration’s student-loan forgiveness program, which would have forgiven $430 billion in loans held by 40 million borrowers, cannot move forward as originally proposed. This is regrettable, but in some ways, we’re missing the point when it comes to the crisis of student debt. Where is the call for wise student borrowing? Isn’t anyone making the connection between this national problem and the financial-illiteracy crisis? (Financial illiteracy cost Americans roughly $1,819 each in 2022, according to this survey from the National Financial Educators Council.) A lack of financial knowledge and skills leads to wildly different approaches. One student may enroll in an expensive private college in their town, and decide to live on campus, despite having to take on debt that will be very difficult to pay off, given their choice of major. Another student may set their sights on the same school, but plan to save thousands of dollars by going to the local community college for two years before transferring. Not everyone agrees that the community college as a gateway to a more elite institution is a foolproof plan. As Chana Schoenberger, now editor-in-chief of American Banker, noted in this 2017 article on MarketWatch, students in the American Honors program at some community colleges can apply to transfer to top schools like Amherst College, Duke University, the Massachusetts Institute of Technology, and George Washington University. But she cautions: “Keep in mind that transfer students may pay a price for entering a four-year school after freshman year, since they will have missed out on some important social aspects of college, including extracurriculars and relationships with professors and students.” “The average student-loan debt is $37,338, but that rises to $54,921 per borrower for private student-loan debt. The average starting salary for students graduating last year was $55,000.” Bottom line: the student-debt crisis exists in large part because young people borrow thousands of dollars for college, and oftentimes end up with jobs that make it difficult for them to pay off their loans in a timely manner. A rough guideline is that your total loans should not exceed the annual salary of your first job. The average student-loan debt is $37,338, but that rises to $54,921 per borrower for private student-loan debt. Now for more bad news: The average starting annual salary for students graduating last year hovers at just over $55,000. Why are students and parents so quick to take loans that will be such a burden? It is partly because of tuition costs, but careful planning can take some of the bite out of these costs. And careful planning requires personal-financial knowledge and skills. For starters, this recent study by the National College Attainment Network, a nonprofit membership and advocacy association, shows that 2022 high school graduates left $3.58 billion in Pell grants on the table last year. These grants are designated for students with financial need, but all families can and should look first for local, state and national grants and scholarships. You can learn more here from deputy enterprise editor Jillian Berman and Rachel Fishman, acting director with the Education Policy program at New America, about why financial-aid offers are so hard to understand and get more strategies for cutting through all the jargon. Financial advisers also recommend putting your budget on paper and figuring out your own strengths and weaknesses (including your “wants” vs. “needs”), remembering to factor in taxes when you are calculating your student loans and expected salary upon graduating, saving early, protecting your credit, and learning from your mistakes. After all, we all make them. Frank kitchen table conversations should occur about the impact of not only the cost of various college majors, but also what earnings can be expected if one majors in math, sociology, physics or finance. “As of this month, 22 U.S. states guarantee that every student will take a full-semester personal finance course. Many more states are considering following suit.” This Georgetown University study does just that. “The top-paying college majors earn $3.4 million more than the lowest-paying majors over a lifetime,” the study found. “STEM (science, technology, engineering, and mathematics), health, and business majors are the highest paying, leading to average annual wages of $37,000 or more at the entry level and an average of $65,000 or more annually over the course of a recipient’s career.” Every high-school student in America should know about college loans. Some states, like Pennsylvania, are proposing that all students be required to fill out the FAFSA, or the federal financial-aid forms, based on the fact that in states with such laws, college completion rates are higher. I applaud this, as we have found that even states that teach personal finance don’t always include college loans. As of this month, 22 states guarantee that every student will take a full-semester personal finance course. Many more states are considering following suit. Free online curricula abound, and some lessons, like this game released by my nonprofit organization, Next Gen Personal Finance, which has been played by more than 4 million students. It focuses on college loans, and is designed to help students and parents make realistic decisions to keep their college debt manageable. Student debt in the U.S. currently exceeds $1.6 trillion — and rises to $1.7 trillion if you add on private student loans. A recent report by Moody’s Investors Service states that slow repayments are a bigger cause of the mounting national student debt than are increased enrollment and tuition costs. I’d add a lack of personal financial education as another major cause, and it’s a problem we can solve. Tim Ranzetta is co-founder, Next Gen Personal Finance, a Palo Alto, Calif. non-profit that provides free curriculum and professional development for teachers across the nation. Its affiliate, the NGPF Mission 2030 Fund, advocates for states to guarantee a personal-finance course for all high school students by 2030. Related: Take MarketWatch’s 2023 Financial Literacy Quiz. Will you get 10/10? Financial jargon is scaring people into not saving for retirement Americans of all ages are failing at financial literacy