India Plummets in Global Talent Competitiveness Index, Ranking 103rd – Lowest Among BRICS Nations

The Global Talent Competitiveness Index has witnessed a significant decline for India, plummeting from the 83rd position a decade ago to the 103rd rank in the latest report released earlier this month. Among 134 countries evaluated, India finds itself positioned between Algeria, ranked 102, and Gautemala, ranked 104, both categorized as lower-middle-income countries. This places India well below the median score of the countries assessed. Notably, India’s current standing in the index is the lowest among BRICS nations.

Developed by the renowned chain of business schools, INSEAD, the Global Talent Competitiveness Index serves as a measure of how countries and cities grow, attract, and retain talent. The index comprises two sub-indices: input, which assesses regulatory and business environments, as well as efforts to foster and retain talent, and output, which evaluates the quality of talent.

India’s decline in the GTCI is particularly worrisome, considering the government’s frequent reference to scores on various business indices such as ‘Ease of Doing Business’ and the controversial World Bank-led ‘Doing Business’ scores to bolster its case. Notably, the World Bank Report on ‘Doing Business’ was discontinued due to irregularities in its measurement.

India’s performance in the GTCI stands in stark contrast to other emerging countries that have shown improvement on this index. China, Indonesia, and Mexico, in particular, have been highlighted for their noteworthy progress. China, for instance, has transitioned from being a talent mover to a talent champion, while Indonesia has made significant strides in talent competitiveness over the past decade. Mexico has transformed from a talent laggard to a talent mover, and Brazil is on track to potentially categorize as a talent mover.

In the context of BRICS nations, China leads the group with a rank of 40, followed by Russia at 52, South Africa at 68, and Brazil at 69. In contrast, India’s rank of 103 is the lowest among BRICS countries.

The report emphasizes that India’s talent competitiveness witnessed an increase up to 2020 but has regressed in each of the three subsequent years. A primary factor contributing to this decline is a downturn in business sentiment, significantly impacting the ability to attract talent, with India now ranked 132nd out of 134 in this aspect. This decline extends to both attracting talent from overseas (127th in External Openness sub-pillar) and within the country (129th in Internal Openness).

The report also highlights an increased skills mismatch and greater difficulty in finding skilled employees, positioning India at 121st in both the ‘Employability’ sub-pillar and the ‘Vocational and Technical Skills’ pillar. However, it does acknowledge India’s strength in the ‘Global Knowledge Skills’ category, where innovation and software development contribute to its 69th position in the Talent Impact sub-pillar.

In terms of global rankings, Singapore, Switzerland, and the United States hold the top three positions. European countries continue to dominate the ‘Top 25’ rankings, with Japan dropping out for the first time, and South Korea ascending to take its place.

Despite the debates surrounding India’s position on various business indices, experts argue that focusing on whether the current situation can be labeled a genocide is a misplaced emphasis. Some scholars, like Verdeja, express the view that debates on this matter divert attention and time from addressing the ongoing crisis, stating, “Proving whether something is a genocide takes time and does not actually stop people from being killed.” Hinton concurs, asserting that the fixation on defining a specific moment as genocide can lead to a rigid focus, obscuring the broader perspective of addressing the immediate challenges and finding solutions.

In the broader context, scholars note the significance of using the term genocide to describe specific situations. Segal cites the example of the U.S. government’s refusal to label crimes against the Hutus in Rwanda as genocide, as doing so would have obligated intervention. This lack of action allowed the massacre to continue unabated. Segal emphasizes the importance of naming a situation for what it is, stating, “Without sticking to the truth, we’ll never have a truthful reckoning of how we arrived at the seventh of October, and how we go forward.”

Foreign Businesses Retreat from China Amid Economic Uncertainties

In recent months, foreign businesses have been withdrawing capital from China at a pace surpassing their investments, according to official data. The apprehension stems from a combination of factors, including China’s economic slowdown, low interest rates, and heightened geopolitical tensions with the United States. The upcoming meeting between Chinese leader Xi Jinping and US President Joe Biden is eagerly anticipated, as it may offer insights into the future economic landscape. However, businesses are already exhibiting caution, expressing concerns about geopolitical risks, policy uncertainty, and slowing growth.

Nick Marro from the Economist Intelligence Unit (EIU) highlights the prevailing sentiments, stating, “Anxieties around geopolitical risk, domestic policy uncertainty, and slower growth are pushing companies to think about alternative markets.”

The data reveals a noteworthy shift, with China recording a deficit of $11.8 billion (£9.6 billion) in foreign investment in the three months ending September – a first since records began in 1998. This suggests a trend where foreign companies are not reinvesting their profits in China; instead, they are choosing to relocate their funds elsewhere.

A spokesperson for Swiss industrial machinery manufacturer Oerlikon, which withdrew 250 million francs ($277 million; £227 million) from China last year, emphasized the need for corrections in the face of China’s economic slowdown. Despite the challenges, China remains a vital market for Oerlikon, with close to 2,000 employees, representing over a third of its sales.

Oerlikon’s spokesperson remarked, “In 2022, we were one of the first companies to transparently communicate that we expect the economic slowdown in China to impact our business. Consequently, we began early to implement actions and measures to mitigate these effects.”

The impact of the pandemic has added another layer of complexity for businesses operating in China, the world’s largest market. The stringent “zero-Covid” policy implemented by China disrupted supply chains, affecting companies like Apple, which diversified its production to India. The tensions between China and the US, with fresh export restrictions on critical materials for advanced chips, have also contributed to the shift in business strategies.

While established multinational firms may not be exiting the Chinese market, there is a noticeable reassessment in terms of new investments. Nick Marro notes, “We aren’t seeing many companies pulling out of China. Many of the big multinational firms have been in the market for decades, and they’re not willing to give up market share that they’ve spent 20, 30 or 40 years cultivating. But in terms of new investment, in particular, we are seeing a reassessment.”

Interest rates play a significant role in this reassessment. While many countries raised rates sharply last year, China took a different path by reducing the cost of borrowing to support its economy and struggling property industry. This, coupled with a depreciation of the yuan by over 5% against the dollar and euro, has prompted businesses to redirect their funds overseas for higher investment returns.

The European Union Chamber of Commerce in China emphasizes this trend, stating, “Those with excess cash and earnings in China have been increasingly transferring these funds overseas, where they will earn a higher investment return compared to investments in China.”

Michael Hart, president of the American Chamber of Commerce in China, notes that the withdrawal of profits does not necessarily indicate dissatisfaction with China but rather signifies the maturation of investments. He views it as encouraging, indicating that companies can integrate their China operations into their global operations.

Canada-based aerospace electronics company Firan Technology Group exemplifies this trend. Having invested up to C$10 million ($7.2 million; £5.9 million) in China over the past decade, the company withdrew C$2.2 million from the country last year and in the first quarter of 2023. Firan’s president and chief executive, Brad Bourne, clarifies, “We are not exiting China at all. We are investing and growing our business there and taking out any excess cash to invest elsewhere in the world.”

As uncertainties loom over future interest rates and China-US ties, analysts anticipate potential moves by China’s central bank to lower interest rates further to support the economy. However, this decision comes with challenges, as lowering interest rates could exert additional pressure on the depreciating yuan.

The business community remains cautiously optimistic about the upcoming meeting between Presidents Xi and Biden. Nick Marro suggests, “Direct meetings between the two presidents tend to exert a stabilizing force on bilateral ties.” However, he also notes that until companies and investors feel confident navigating the uncertainties, the drag on foreign investment into China is likely to persist.

The evolving economic landscape in China, coupled with geopolitical tensions and global economic shifts, has prompted foreign businesses to reassess their investments. While established companies may not be abandoning the Chinese market, the trend of redirecting funds overseas reflects a cautious approach influenced by economic uncertainties and a desire for higher investment returns. The upcoming meeting between leaders Xi and Biden is anticipated to provide some clarity, but until then, businesses remain vigilant in navigating the complex dynamics of the Chinese market.

Mortgage Rates Experience Significant Drop, Easing Burden on Homebuyers

In a notable turn of events, mortgage rates witnessed the most substantial one-week decline since November of the previous year. This marks the second consecutive week of rate reduction following seven weeks of consecutive increases. The 30-year fixed-rate mortgage averaged 7.50% in the week ending November 9, down from the preceding week’s 7.76%, as reported by Freddie Mac.

A year ago, the 30-year fixed-rate had reached 7.08%, hitting its peak in 2022. This week’s decline of 26 basis points from the previous week’s rate is the most significant one-week drop since November. Sam Khater, Chief Economist at Freddie Mac, attributes this decline to the decrease in Treasury yields. He emphasizes the potential consequences of the rising household debt, urging significant decreases in mortgage rates for the housing market to avoid stagnation.

Khater stated, “Many consumers are feeling strained by the high cost of living, so unless mortgage rates decrease significantly, the housing market will remain stagnant.”

The average mortgage rate is based on data from Freddie Mac’s thousands of lenders across the nation, focusing on borrowers with a 20% down payment and excellent credit. Notably, the rates for current buyers may differ. Lower mortgage rates could potentially encourage hesitant homebuyers to re-enter the market.

The Mortgage Bankers Association reported a 2.5% increase in all loan applications compared to the previous week, with a 3% rise specifically in applications for home purchase loans. However, despite this uptick, Joel Kan, MBA’s Vice President, and Deputy Chief Economist highlighted that applications for both purchase and refinance loans remain at relatively low levels. The purchase index lags more than 20% behind last year’s pace, indicating a cautious approach by potential homebuyers waiting for increased inventory.

The recent decision by the Federal Reserve to maintain existing interest rates provided a brief reprieve for homebuyers grappling with soaring mortgage rates. Yet, the possibility of an additional Fed rate hike remains uncertain.

Jiayi Xu, an economist at, commented on the need for more economic indicators to determine the adequacy of current policies in addressing inflation. The October jobs report, revealing moderate job growth and reduced wage pressures, might influence policymakers’ confidence in the economy’s continued easing, affecting the upcoming December 12-13 meeting of the Federal Reserve.

Despite the dip in rates, the monthly cost of buying a home has reached a record high due to unaffordability. found that the median home price in October remained similar to the previous year. However, with mortgage rates exceeding 7% since mid-August, the monthly cost to buy a home increased by over $166, marking a 7.4% year-over-year rise—a new record.

While mortgage rates are still relatively high, the difference between current rates and those of a year ago has narrowed. Lisa Sturtevant, Chief Economist at Bright Multiple Listing Service, noted that market conditions are comparable to last November, with consumers adjusting their expectations about mortgage rates. She anticipates that some buyers will act swiftly when rates dip, while others may wait until after the first of the year, hoping for lower rates and increased inventory.

Sturtevant also remarked that while rates are expected to decrease in 2024, they are not projected to return to pre-pandemic levels. She stated, “We are in a new era for mortgage rates, where prospective homebuyers can expect rates to settle above 6%.”

Blooming BRICS: Former White House Economist Warns of Dollar’s Growing Challenge

The US dollar could encounter a formidable challenge from BRICS countries due to their expanding size and influence in global trade, warns former White House economist Joe Sullivan.

Sullivan, in a recent op-ed for Foreign Policy, highlighted the rising concerns that BRICS nations might introduce a currency to rival the US dollar in international trade. This potential currency could potentially displace the dollar from its current dominant position in global trade markets and as the primary reserve currency.

Although BRICS officials have denied the existence of such a rival currency, Sullivan cautioned that the bloc of emerging market countries, which has recently welcomed Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates, poses a threat to the greenback based on its growing influence.

Sullivan also pointed out the substantial influence of the BRICS bloc in commodities markets. Saudi Arabia, Iran, and the United Arab Emirates are among the world’s leading exporters of fossil fuels, while Brazil, China, and Russia are significant exporters of precious metals.

The inclusion of Saudi Arabia, in particular, could provide BRICS+ with a significant advantage, as the Middle Eastern nation holds over $100 billion in US Treasury bonds, contributing to the total holdings of US Treasurys by BRICS countries surpassing $1 trillion, according to Sullivan.

Sullivan argued, “The BRICS+ nations do not need to wait until a shared trade currency meets the technical conditions typical of a global reserve currency before they swing their newly enlarged economic wrecking ball at the dollar.”

He also highlighted the growing prominence of China’s yuan in global trade, as Beijing’s trading partners increasingly use the renminbi.

Sullivan further warned that these trends could eventually place the US dollar in a position similar to that of the British pound in the 1800s when it lost its international dominance.

He explained, “The BRICS+ states do not even necessarily need to have a shared trade currency to chip away at King Dollar’s domain. If BRICS+ demanded that you pay each member in its own national currency to trade with any of them, the dollar’s role in the world economy would diminish. There would not be a clear replacement for the dollar as a global reserve. A variety of currencies would gain in importance.”

However, some economists hold a different view, suggesting that the US dollar’s role as the world’s primary trading and reserve currency will likely persist for an extended period. The data from the Bank of International Settlements and the International Monetary Fund show that the greenback continues to outperform rival currencies in international trade and central bank reserves by a significant margin. The yuan has only recently made modest gains in central banks’ holdings.

Economic Surge in Late Summer and Early Fall Shows Robust Growth

During late summer and early fall, the US economy experienced a significant upswing, marked by strong consumer spending. Recent data revealed that the gross domestic product (GDP) expanded at an annual rate of 4.9% in the months of July, August, and September. This growth rate was more than double that of the previous quarter and represented the highest quarterly growth since the final quarter of 2021.

This robust economic performance is noteworthy, especially considering the concurrent rise in interest rates, which have reached their highest level in over two decades. The driving force behind this growth was the American consumer, who continued to open their wallets and indulge in various expenditures, including the purchase of cars, dining at restaurants, and even buying tickets for events like Taylor Swift concerts. Moreover, an increase in exports and heightened government spending contributed to the overall economic expansion.

Potential Challenges Ahead

However, despite the recent economic boom, analysts and forecasters are cautious about the sustainability of this rapid growth rate in the upcoming months. It is anticipated that economic growth will decelerate as the effects of elevated interest rates begin to take hold. Already, higher interest rates have had a dampening effect on the housing market and could potentially impede other consumer spending as well.

The key question is the extent to which the economy will slow down. Earlier in the year, there were concerns that increased borrowing costs might push the economy into a recession. While those fears have subsided, they are not entirely eliminated, as various challenges continue to loom over the economy. These challenges include the uncertainties arising from a volatile global environment.

A Closer Look at the Strong Economic Performance

The GDP growth rate of 4.9% for the months of July, August, and September showcases the robust state of the US economy during that period. This figure is particularly impressive as it represents a growth rate more than twice as fast as the previous quarter. Notably, it is the highest quarterly growth rate recorded since the final quarter of 2021, signifying a remarkable rebound and strengthening of the US economy.

Consumer spending has played a pivotal role in driving this growth. Americans have been actively contributing to economic expansion by increasing their expenditures. This has encompassed various sectors, such as the automotive industry, where car sales have surged, and the hospitality sector, with a notable increase in restaurant dining. Furthermore, even the entertainment industry benefited, with a surge in demand for events like Taylor Swift concerts.

Additionally, it’s worth highlighting the positive impact of increased government spending on the economy. As government initiatives and projects gained momentum, they provided a supplementary boost to economic growth. Moreover, a rise in exports further bolstered the economy’s performance during this period.

Challenges Ahead for Sustaining Growth

Despite the impressive performance, economic forecasters have sounded a note of caution regarding the sustainability of such a brisk pace of growth. The impending challenge lies in the form of higher interest rates. It is expected that the cumulative effect of these interest rate hikes will eventually curtail economic growth. In fact, the housing market has already experienced a slowdown due to these elevated rates, and this trend might extend to other consumer spending areas.

The critical question centers around the extent to which the economy will decelerate. Earlier in the year, there were concerns that the increased cost of borrowing might push the economy into a recession. While such fears have somewhat receded, they have not disappeared entirely. The economy faces a complex set of challenges, including the uncertainties stemming from the tumultuous global economic landscape. This unpredictability can potentially hinder the pace of economic recovery and growth in the near future.

The economic landscape, despite its recent strength, remains subject to a multitude of external factors, and it will be crucial to monitor these closely in the coming months to assess the durability of the ongoing recovery.

The Top Economies in the World(1980-2075)

As per a new report from Goldman Sachs, the equilibrium of worldwide financial power is projected to move decisively in the next few decades.

In the realistic above, we’ve made a knock diagram that gives a verifiable and prescient outline of the world’s best 15 economies at a few achievements: 1980, 2000, 2022, and Goldman Sachs projections for 2050 and 2075.

Projections and Features for 2050

Rank Country Real GDP in 2050 (USD trillions)
1  China $41.9
2  US $37.2
3  India $22.2
4  Indonesia $6.3
5  Germany $6.2
6  Japan $6.0
7  UK $5.2
8  Brazil $4.9
9  France $4.6
10  Russia $4.5
11  Mexico $4.2
12  Egypt $3.5
13  Saudi Arabia $3.5
14  Canada $3.4
15  Nigeria $3.4

The accompanying table shows the extended top economies on the planet for 2050. All figures address genuine Gross domestic product projections, in light of 2021 USD.

A significant subject of the beyond a very long while has been China and India’s inconceivable development. For example, somewhere in the range of 2000 and 2022, India bounced eight spots to turn into the fifth biggest economy, outperforming the UK and France.

By 2050, Goldman Sachs accepts that the heaviness of worldwide Gross domestic product will move significantly more towards Asia. While this is somewhat because of Asia beating past figures, it is additionally because of BRICS countries failing to meet expectations.

Prominently, Indonesia will turn into the fourth greatest economy by 2050, outperforming Brazil and Russia as the biggest developing business sector. Indonesia is the world’s biggest archipelagic state, and right now has the fourth biggest populace at 277 million.

The Top Economies On the planet in 2075

The accompanying table incorporates the fundamental numbers for 2075. Yet again figures address genuine Gross domestic product projections, in light of 2021 USD.

Rank Country Real GDP in 2075 (USD trillions)
1  China $57.0
2  India $52.5
3  US $51.5
4  Indonesia $13.7
5  Nigeria $13.1
6  Pakistan $12.3
7  Egypt $10.4
8  Brazil $8.7
9  Germany $8.1
10  UK $7.6
11  Mexico $7.6
12  Japan $7.5
13  Russia $6.9
14  Philippines $6.6
15  France $6.5

Projecting further to 2075 uncovers a radically unique world request, with Nigeria, Pakistan, and Egypt breaking into the main 10. A significant thought in these evaluations is quick populace development, which ought to bring about a huge workforce across each of the three countries.

In the mean time, European economies will keep on slipping further down the rankings. Germany, which was once the world’s third biggest economy, will sit at 10th behind Brazil.

It ought to likewise be noticed that China, India, and the U.S. are supposed to have comparative GDPs at this point, recommending fairly equivalent monetary power. Accordingly, how these countries decide to draw in with each other is probably going to shape the worldwide scene in manners that have sweeping ramifications.

India’s IIT Graduates in High Demand Globally

A significant portion, one-third, of graduates from India’s esteemed engineering institutions, specifically the Indian Institutes of Technology (IITs), choose to move abroad. A substantial 65% of these highly-skilled individuals make up the migrants bound for the United States, as revealed in a working paper (pdf) by the National Bureau of Economic Research (NBER).

A striking statistic shows that 90% of the top performers in the annual joint entrance examination for IITs and other renowned engineering colleges have migrated. Furthermore, 36% of the top 1,000 scorers have followed suit, according to the paper released this month.

Many IIT graduates have become leading executives and CEOs in the US. The majority of these immigrants initially move to the US as students and later join the workforce. The NBER paper discovered that “83% of such immigrants pursue a Master’s degree or a doctorate.”

The report highlights the role of elite universities in shaping migration outcomes, stating, “…through a combination of signaling and network effects, elite universities in source countries play a key role in shaping migration outcomes, both in terms of the overall propensity and the particular migration destination.”

There are 23 IITs spread across India, with acceptance rates at many of these prestigious institutions being lower than those of Ivy League colleges. This is especially true for the most sought-after IITs at Kharagpur, Mumbai, Kanpur, Chennai, and Delhi. In 2023 alone, a staggering 189,744 candidates registered for the JEE, competing for a mere 16,598 seats.

Highly skilled Indians are in high demand across global economies

The NBER report highlights the US graduate program as a crucial migration pathway to attract the “best and brightest.”

In a similar vein, the UK’s High Potential Individual visa route allows graduates from the top 50 non-UK universities, including the IITs, to live and work in the country for a minimum of two years. For those with doctoral qualifications, the work visa extends to at least three years.

The report also mentions that recent IIT graduates seeking to move abroad benefit from a network of accomplished alumni and faculty members already settled overseas. Some of these connections even grant access to specific programs where they hold sway over admissions or hiring decisions.

The intriguing example of Banaras Hindu University (BHU) is worth noting

In 2012, this century-old institution, also India’s first central university, was granted IIT status. Interestingly, this elevation took place without any alterations to the staff, curriculum, or admission system at the Varanasi-based institute in Uttar Pradesh.

The NBER report examined 1,956 BHU students who graduated with BTech, BPharm, MTech, or integrated dual degrees between 2005 and 2015. The study found a remarkable 540% increase in migration probability among graduates following the IIT status designation.

The report observed that “…the quality of education/human capital acquired by the students in the cohorts before and after the change remained constant, while only the name of the university on the degree received differed.”

Google Addresses AI Job Loss Concerns with New Courses and Entrepreneur Programs

As an early innovator in artificial intelligence, Google has been striving to keep up with competitors like Microsoft and OpenAI, who have gained ground with advancements such as ChatGPT. Recognizing the need for individuals to develop skills for future job opportunities, Google is taking action to address this pressing issue.

The tech giant has officially introduced its new generative AI learning path, consisting of ten courses aimed at helping the average person gain a deeper understanding of AI and machine learning, particularly as these technologies begin to replace jobs. For investors, it’s always encouraging when prominent Big Tech companies adopt a long-term vision regarding AI.

Google’s new generative AI learning course was announced through a blog post, revealing that seven free courses were initially launched, with three more added to the platform recently. These courses cover topics such as the distinction between AI and machine learning, an introduction to Google’s Vertex AI training platform, and the ethical considerations surrounding responsible AI development.

The course serves as a starting point for users to grasp generative AI, its role within the broader AI landscape, and where to find additional learning resources to help them transition into AI-centric careers. Some may argue that this initiative is merely a strategy to attract potential AI enthusiasts to Google’s training system, ultimately leading them to use Google software for building their own AI and machine learning models and solidifying Google’s position in the AI race.

However, creating AI models requires expertise. The US Bureau of Labor Statistics has projected a 36% growth rate in data scientist roles over the next decade. As such, these new courses are not only practical but also crucial for companies like Google, which will undoubtedly require a vast number of AI-focused data scientists in the future.

AI’s impact on the future of work has generated excitement, with major companies like Microsoft, Amazon, and Nvidia investing billions in AI technologies. However, there is a pressing concern: the potential job losses resulting from AI automation. A recent Goldman Sachs survey estimates that up to 300 million jobs could be lost, with two-thirds of existing roles experiencing a reduction in workload due to AI. On the bright side, AI is expected to contribute $7 trillion to the global economy in the next decade, and 60% of today’s jobs didn’t exist in 1940.

A more optimistic Microsoft survey involving 30,000 workers and business leaders worldwide revealed that 70% of respondents would delegate specific tasks to AI. Business leaders were twice as focused on using AI to boost productivity rather than reducing headcount. Nevertheless, companies like IBM and BT are planning to cut thousands of jobs in favor of AI.

Google’s recent AI initiatives go beyond new courses. The company launched the Google for Startups Growth program in Europe, a three-month course for European AI entrepreneurs focusing on health and wellbeing. Since OpenAI’s ChatGPT debut, Google has been working on its own Bard version for users. The tech giant also announced significant changes to its search function, where it holds approximately 85% market share.

Google, Meta, and TikTok have faced criticism regarding AI-generated content labeling after the European Commission warned about the rapid spread of misinformation. Additionally, AI safety has become a significant concern, as evidenced by Dr. Geoffrey Hinton, one of AI’s founding figures, leaving Google to raise awareness on the subject. Alphabet CEO Sundar Pichai addressed these concerns in a recent Financial Times op-ed, stating, “AI is too important not to regulate, and too important not to regulate well.”

Alphabet’s share price has increased nearly 17% in the past month and over 41% since the beginning of the year. Google’s cloud computing division experienced a 28% YoY revenue growth last quarter. By focusing on upskilling future data scientists and empowering entrepreneurs to develop AI companies, Google is considering the bigger picture, leveraging its dominant search engine market share.

In summary, Google aims to bridge the knowledge gap in AI with new courses and tools, helping the company find skilled engineers and scientists for future AI projects. The stock price outpacing Microsoft may indicate that Google has regained an advantage. These learning courses form part of a strategy that increases reliance on Google’s AI products, attracting investors’ attention as they recognize the shift.

Student Loan Repayments Set to Resume with Potential Debt Forgiveness, New Repayment Plan, and Loan Servicer Changes

Following a hiatus of over three years, federal student loan payments are set to resume in the coming months. The recent debt ceiling agreement, signed into law by President Joe Biden, includes a clause that effectively ends the suspension of federal student loan repayments and may make it more difficult for the U.S. Department of Education to prolong the pause. Consequently, around 40 million Americans carrying education debt can expect their next payment due in September.

During the pandemic, the Biden administration has been actively revamping the federal student loan system. As borrowers return to repayment, they may encounter several modifications either already implemented or in the pipeline. Here are three notable changes:

Potential lower payments due to forgiveness

In August, President Biden introduced a groundbreaking proposal to eliminate $10,000 in student debt for tens of millions of Americans, or up to $20,000 for those who received a Pell Grant during their college years. However, legal challenges led to the closure of the application portal within a month.

The Supreme Court is currently reviewing two lawsuits against the plan, with a ruling expected by the end of the month. If approved, around 14 million individuals, or one-third of federal student loan borrowers, would have their entire balances forgiven, according to higher education expert Mark Kantrowitz.

These borrowers “likely won’t have to make a student loan payment again,” he said. For those with remaining balances, the Education Department plans to “re-amortize” their debts, recalculating monthly payments based on the reduced amount and remaining repayment timeline.

A new income-driven repayment option

The Biden administration is developing a more affordable repayment plan for student loan borrowers. This new program, called the Revised Pay as You Earn Repayment Plan, would require borrowers to contribute 5% of their discretionary income toward undergraduate loans, instead of the current 10%.

According to Kantrowitz, this revamped plan could significantly reduce monthly payments for many borrowers. The payment plan is expected to become available by July 2024, but it may be implemented earlier if circumstances permit.

A new servicer handling loans

During the pandemic, several prominent federal student loan servicers, including Navient, Pennsylvania Higher Education Assistance Agency (also known as FedLoan), and Granite State, announced they would no longer manage these loans. Consequently, around 16 million borrowers will likely have a different company handling their loans when payments resume.

Kantrowitz warned that “whenever there is a change of loan servicer, there can be problems transferring borrower data.” Borrowers should be prepared for potential glitches and will receive multiple notices about the change in lender, according to Scott Buchanan, executive director of the Student Loan Servicing Alliance. If a payment is mistakenly sent to the old servicer, it should be forwarded to the new one.

Saudi Arabia to Slash Oil Production by 1 Million Barrels per Day

Saudi Arabia has revealed its plan to reduce oil production by 1 million barrels per day starting in July, with the intention of promoting “stability and balance” in the global oil market. Despite not basing production decisions on crude oil prices, this action is widely perceived as an effort to bolster oil prices amid worldwide economic instability and potential declines in international demand.

The announcement followed an OPEC+ meeting in Vienna, although Saudi Arabia’s additional production cuts are being implemented independently. The country has stated that these reductions will persist for at least one month and may be prolonged.

OPEC+ nations also consented to extend the oil production cuts initially declared in April until the end of 2024. This decision will decrease the volume of crude oil they contribute to the global market by over 1 million barrels per day. Notably, OPEC+ countries account for approximately 40% of the world’s crude oil production.

Several African nations and Russia had been urged to diminish production, while the United Arab Emirates plans to augment its crude output. Worldwide oil production currently hovers around 100 million barrels per day.

According to Saudi Arabia’s Ministry of Energy, the nation will now produce 9 million barrels of crude oil daily, a reduction of 1.5 million barrels per day compared to earlier this year. These cuts coincide with the end of Memorial Day in the United States and the beginning of the bustling summer travel season, during which crude oil prices typically impact gasoline costs.

In the previous summer, President Biden visited Saudi Arabia—a nation he once labeled a “pariah” state—to request increased oil production from its leaders. Contrarily, OPEC+ members announced a 2 million barrels per day cut in October, which the White House deemed “shortsighted.”

To counteract rising gas prices, the Biden administration has been tapping into the Strategic Petroleum Reserve since last year, releasing millions of barrels of oil.

Economic Growth, Rising Manufacturing and Exports Propel Nation Towards Top Global Economy Rankings

In the past decade, India has experienced 10 transformative changes that are now driving the nation towards doubling per capita income, export market share, increasing manufacturing’s share, enhancing corporate profits, and significantly improving other economic health indicators, according to Morgan Stanley. Their recent report, ‘How India has Transformed in Less than a Decade,’ credits policy changes such as Direct Benefit Transfers (DBTs), supply-side policy reforms, and adjustments to the Insolvency and Bankruptcy Code (IBC) for bringing about overwhelmingly positive shifts in India’s macroeconomic situation, global standing, and local stock markets.

Ridham Desai, Managing Director of Morgan Stanley India, refuted the widespread belief that India has underperformed: “We run into significant skepticism about India, particularly with overseas investors, who say that India has not delivered its potential… and that equity valuations are too rich.” Desai added that this perspective “ignores the significant changes that have taken place in India, especially since 2014.” The report highlights ten crucial changes with extensive implications for both the economy and the market to support his argument.

The ten changes highlighted by Morgan Stanley are:

  1. Supply-side Policy Reforms
  2. Formalisation of the Economy
  3. Real Estate (Regulation and Development) Act
  4. Digitalizing Social Transfers
  5. Insolvency & Bankruptcy Code
  6. Flexible Inflation Targeting
  7. Focus on FDI
  8. India’s 401(k) Moment
  9. Government Support for Corporate Profits
  10. MNC Sentiment at Multi-year High

The consequences of these changes on the economy

The main effect of these transformations is the consistent growth of manufacturing and capital expenditure as a percentage of GDP. Morgan Stanley forecasts that each will increase by 5 percentage points. Furthermore, India’s export market share is predicted to reach 4.5% by 2031, nearly doubling from 2021 levels, while per capita income is anticipated to reach $5,200 in the next ten years. “This will have major implications for change in the consumption basket, with a boost to discretionary consumption,” the report stated, adding, “We expect India’s real growth to average 6.5% in the next 10 years, making India the third-largest economy at nearly $8 trillion by 2031, up from fifth-largest currently.”

This structural shift will impact saving-investment dynamics, strengthening the nation’s external balance sheet and consequently narrowing the current account deficit (CAD). Domestic profits could potentially double, which, although explaining high equity valuations, will result in “a major rise in investments, a moderation in the CAD, and an increase in credit to GDP to support the coming profit growth.”

“Indian companies will likely witness a major increase in their profits share to GDP. Triggered by supply-side reforms by the government, we expect a major rise in investments coupled with a moderation in the current account deficit and an increase in credit to GDP to support this rise,” said Morgan Stanley.

Implications on the stock markets

Upon realizing these consequences, there will likely be a reduced correlation with oil prices and the US recession. This could also prompt a revaluation in domestic stock market valuations. “This reflects persistent domestic demand for stocks and higher growth for longer. India is trading at a premium to long-term history, albeit well off highs and in line with recent history,” the report noted. Additionally, the report observed that India’s beta to emerging markets has decreased to 0.6, a result of enhanced macro stability and a reduction in reliance on global capital market flows to finance the CAD.

Wendy Cutler On The Indo-Pacific Economic Framework Meeting

The U.S.-led Indo-Pacific Economic Framework (IPEF) concluded its meeting on Saturday, with trade ministers from the 14 participating countries agreeing on a deal to coordinate supply chains.

Wendy Cutler, Vice President of the Asia Society Policy Institute, offers the commentary below on the outcomes of the IPEF meeting.

“The 14 IPEF members should be commended for making progress on three pillars of their work, and achieving “substantial conclusion” of  their supply chain work. Reaching agreement among 14 countries, with different levels of development, different priorities and different needs is no small feat. That said, it’s still an open question whether meaningful outcomes can be achieved by the November target date of completion. The challenge of achieving high standards while securing the buy-in of all participants already seems to be impacting the talks, as evidenced by the largely process-oriented announcement on supply chains.  Once released, the final text of the supply chain agreement may shed more light on whether substantive commitments were agreed upon.

“The announcement on the Trade Pillar suggests that while work has ‘advanced,’ the negotiations still face significant hurdles. This is not surprising, given the topics included and lack of offers of market access to allow for traditional trade-offs. Of note, is that work on technical assistance and economic cooperation is singled out as an area where “substantial progress” has been made. Hopefully, this will pave the way for more progress on the tough issues of digital, labor and the environment.

“The Clean Economy Pillar statement language suggests that while IPEF members agree on the importance of the transition to a sustainable economy, there is no meeting of the minds on how IPEF can contribute in concrete terms. The announcement notes that many ideas and proposals are being discussed, but is vague on where the work may be headed in concrete terms.

“On the Supply Chain Pillar,  Ministers announced the ‘substantial conclusion’ of negotiations. Given the importance of supply chain resiliency to individual, regional and the global economy, the IPEF supply chain outcomes are welcome, albeit modest and largely process- oriented.

“The statement lays out nine important objectives of the agreement, including promoting a collective understanding of supply chain risks, minimizing disruptions, and ensuring the availability of skilled works in critical sectors. But these goals, many of which mirror the initial negotiating mandate of this pillar, do not  appear to be translated into rules, commitments or initiatives.   

“Rather, the announcement focuses on three new bodies to help flesh out and operationalize the objectives, including a Council, a crisis response mechanism, and a labor advisory board. In essence, the IPEF members have established a framework within a framework to address supply chain concerns, with much of the substantive work yet to be discussed and agreed upon.  Curiously, the new bodies are ‘contemplated,’ and apparently not yet agreed upon, suggesting that there were some last-minute hitches in even setting up this structure.

“Finally, the Fair Economy pillar points to ‘good progress’ on negotiation of the text on anticorruption and tax matters. Based on this characterization, this pillar’s work is likely to be the next candidate for an early harvest agreement.”

USIBC Plans 2023 India Ideas Summit In Washington

The summit will explore the U.S.-India economic partnership across sectors.
The United States India Business Council (USIBC) announced that its 2023 India Ideas Summit will be held on June 12-13, 2023 on the sidelines of its 48th Annual General Meeting at the U.S. Chamber of Commerce headquarters in Washington D.C.
In a statement, USIBC shared the summit themed ‘Trust, Resilience, and Growth’ – will focus on how these three organizing principles underpin the U.S.-India economic partnership across sectors. “As the Summit is the flagship event of USIBC, and the premier convention of government, industry, and thought leaders in the U.S.-India Corridor, USIBC’s annual India Ideas Summit has become an institution,”it said.
This year’s summit carries an additional significance as it will take place about ten days in advance of PM Modi’s state visit to the US scheduled to begin from June 22, 2023, in an effort to strengthen bilateral relations.
Every year, the bilateral trade council hosts conversations that explore important technological developments, chart an agenda for the trade relationship, and highlight how India-US commercial ties serve shared strategic and economic interests.\
Formed in 1975 at the request of the U.S. and Indian governments, the U.S.-India Business Council is the premier business advocacy organization in the U.S.-India corridor, composed of more than 200 top-tier U.S. and Indian companies advancing U.S.-India commercial ties. The Council aims to create an inclusive bilateral trade environment between India and the United States by serving as the voice of industry, linking governments to businesses, and supporting long-term commercial partnerships that will nurture the spirit of entrepreneurship, create jobs, and successfully contribute to the global economy.

India Emerges As Top Alternative To China For MNCs

IMA India recently disclosed through its 2023 Global Operations Benchmarking survey that nearly 80 percent of global CEOs choose India as their top destination over China.

The 2023 Global operations benchmarking survey, conducted by IMA India, showed the country as an emerging destination for MNCs. A poll of 100 CEOs who largely represent international B2B-focused companies stated that India is the top destination that multinational enterprises are looking for as an alternative to China.

As per the study, 88 per cent of CEOs who surveyed companies with a presence in India, chose India as their top option over China due to its growing geopolitical aggressiveness, dubious trade and commercial practices, and rising labour prices.

“In the last five years, foreign MNCs have increased their on-ground presence in India, partly as a result of diversification away from China. In particular, the IT & ITES companies are ramping up the share of their global workforce that is based in India,” said Suraj Saigal, Research Director, IMA India.

In the last three years, over 70 per cent of the companies, according to a study based on the poll, have seen significant changes in their business strategy based on-the-ground operations in China. Comparatively speaking, the industrial sector exhibits a more pronounced pullback than the services sector. The percentage of people making adjustments has declined in 41 per cent of cases, while 56 per cent have cut down on investments and sourced less from China.

While a handful of enterprises have quit the industry, 6 per cent have reduced their market participation. In addition, taking into consideration recent changes in commercial and geopolitical tactics, the study looked at how corporations are recognising and seizing India’s business possibilities.

India’s predicted worldwide workforce share climbed from 22.4 per cent to 24.9 per cent between FY18 and FY23 in mean percentage terms, while its revenue share increased from 14.8 per cent to 15.8 per cent. These numbers show India’s gradual rise in the world scene throughout this time.

However, even those that choose India listed infrastructure, legal restrictions, and skill-related problems as major obstacles. The study determined that the worldwide trend away from multilateral commerce towards bilateral trade connections was the cause for the rising popularity of friend-shoring. The emergence of ‘deglobalization,’ protectionism, and nationalism has forced governments to cooperate with nations with which they already have cordial bilateral connections rather than depending on international or regional trade accords.

Biden Signs Debt Ceiling Bill, Averting Government Shut Down

President Joe Biden on Saturday, June 3rd signed the debt ceiling bill, a capstone to months of negotiations that pushed the U.S. to the brink of default. Biden signed H.R. 3746, the “Fiscal Responsibility Act of 2023,” two days before Monday’s default deadline, on which the U.S. would run out of cash to pay its bills, according to a White House release.

Biden thanked House Speaker Kevin McCarthy, Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell “for their partnership.” Biden tweeted: “I just signed into law a bipartisan budget agreement that prevents a first-ever default while reducing the deficit, safeguarding Social Security, Medicare, and Medicaid, and fulfilling our scared obligation to our veterans. Now, we continue the work of building the strongest economy in the world.”

The House of Representatives and the Senate passed the legislation this week after Biden and House of Representatives Speaker Kevin McCarthy reached an agreement following tense negotiations.

The Treasury Department had warned it would be unable to pay all its bills on Monday if Congress had failed to act by then.

Biden, who had experienced the 2011 debt limit crisis, refused to make any concessions for what he considered Congress’s basic duty. However, McCarthy, encouraged by conservatives seeking significant changes to federal spending, was determined to use the nation’s borrowing power as leverage, even if it risked pushing the U.S. towards default.

The ensuing events demonstrated how two influential figures in Washington, both of whom believe in the importance of personal connections despite not having a strong relationship themselves, managed to prevent an unprecedented default that could have seriously damaged the economy and carried unpredictable political repercussions.

However, the standoff was primarily provoked by Republicans who believed that threatening the debt limit was necessary to curb federal spending. Despite a decisive 314-117 House vote and a 63-36 Senate vote, this episode has put McCarthy’s speakership to the test and challenged his capacity to control his party’s rebellious far-right faction.


McCarthy now feels empowered and remains undaunted. Reflecting on his election as speaker after the House passed the debt limit package, he mentioned his arduous journey to secure the gavel in January. He stated, “Every question you gave me (was), what could we survive, what could we even do? I told you then, it’s not how you start, it’s how you finish.”

This narrative of the prolonged process through which Washington resolved the debt limit crisis is based on interviews with legislators, senior White House officials, and high-ranking congressional aides, some of whom requested anonymity to disclose private negotiation details.

Key to overcoming the obstacles were Biden and McCarthy’s five negotiators, who brought policy expertise to the table and received full support from their leaders. Republicans particularly appreciated the involvement of presidential counselor Steve Ricchetti, who speaks on behalf of Biden like no one else, and Shalanda Young, the current director of the Office of Management and Budget, who gained invaluable experience as a respected senior congressional aide overseeing the intricate annual appropriations process.

Young and Rep. Patrick McHenry of North Carolina, one of McCarthy’s negotiators, developed such a close rapport that they phoned each other every morning during their respective day care drop-offs. Additionally, Young and the other GOP negotiator, Rep. Garret Graves, playfully debated who had the better gumbo recipe while discussing the debt limit during a White House celebration for the national champion Louisiana State University women’s basketball team.

The five negotiators – Graves, McHenry, Ricchetti, Young, and legislative affairs director Louisa Terrell – convened daily in an elegant office on the Capitol’s first floor, adorned with frescoes by 19th-century muralist Constantino Brumidi. In these meetings, they focused intently on priorities and non-negotiables to determine how they could reach an agreement.


By May 19, the negotiations were becoming shaky. Republicans grew impatient as the White House seemed unwilling to compromise on reducing federal spending, which was a non-negotiable demand for the GOP.

During a morning meeting that Friday, White House officials urged McHenry and Graves to present a formal proposal. However, the frustrated Republicans opted to go public instead. They informed reporters that the talks had temporarily halted. As he hurried through the Capitol, Graves said, “We decided to press pause because it’s just not productive.” He later explained that he and McHenry were tired of playing games.

Tensions didn’t subside. When negotiations resumed that night, McHenry and Graves presented a new proposal that not only revived numerous rejected provisions from the GOP’s debt limit bill but also incorporated the House Republicans’ border-security bill. A White House official labeled the proposal “regressive.”

The White House expressed its own frustrations as the discussions seemed to be faltering, starting with a lengthy statement from communications director Ben LaBolt and followed by Biden’s comments at a press conference in Hiroshima, Japan, where he was attending a summit of leading democracies. The president stated, “Now it’s time for the other side to move their extreme positions. Because much of what they’ve already proposed is simply, quite frankly, unacceptable.”


Despite the escalating public rhetoric, there were indications that the talks were improving. Biden called McCarthy from Air Force One as he left Japan, and the speaker appeared more hopeful than he had been in days. Fueled by coffee, gummy worms, and burritos, negotiators worked exhausting hours, primarily at the Capitol but once at the Eisenhower Executive Office Building, where they enjoyed Call Your Mother bagel sandwiches provided by White House Chief of Staff Jeff Zients.

One session lasted until 2:30 a.m., and Graves showed reporters an app tracking his sleep, revealing an average of three hours per night during the final stretch. McCarthy sent lawmakers home over Memorial Day weekend, which McHenry believed was helpful. He said, “The tone of the White House negotiators became much more serious and much more grounded in the realities they were going to have to accept.”


On May 27, Biden and McCarthy announced a deal in principle and began the task of convincing others. The night before the vote, McCarthy assembled House Republicans in the Capitol’s basement, provided pizza, and explained the bill while challenging Freedom Caucus members to use the same aggressive language they had employed at an earlier news conference. By the meeting’s end, it was evident that McCarthy had quelled the rebellion.

Meanwhile, the White House had its work cut out for them in appeasing rank-and-file Democrats. Biden and McCarthy displayed contrasting styles throughout the negotiations, with the speaker discussing the debt limit talks openly and frequently, while the president remained quiet, wary of jeopardizing the deal before it was finalized.

Biden had been privately addressing his party’s concerns even as the agreement was being finalized. After the Congressional Progressive Caucus criticized the few known details, particularly regarding stricter requirements for federal safety-net programs, Rep. Pramila Jayapal received a call from Biden. He assured her that his negotiators were working diligently to minimize the Republican-drafted changes to food stamp and cash assistance programs.

In a statement after the vote, Biden expressed gratitude and relief, saying, “This budget agreement is a bipartisan compromise. Neither side got everything it wanted. That’s the responsibility of governing.”

Top Battery Stocks Set to Thrive as Global EV Demand Skyrockets and Lithium Prices Rebound

Leading battery stocks are set to stand out as the demand for electric vehicles surges. The International Energy Agency predicts that one in every five cars globally will be electric this year, significantly impacting EV battery demand.

In fact, Fortune Business Insights estimates that the global EV battery market could expand from $37.9 billion in 2021 to nearly $98.9 billion by 2029, benefiting these three battery stocks.

Albemarle (ALB)

A prime investment opportunity in the electric vehicle battery boom lies in lithium stocks, such as Albemarle (NYSE:ALB). Firstly, the company announced a $1.3 billion investment in a new lithium hydroxide plant in South Carolina to address battery demand. Secondly, the facility is expected to generate around 50,000 metric tons of battery-grade lithium, with the capacity to double production.

Thirdly, this output could facilitate the manufacturing of 2.4 million electric vehicles annually. Adding to the potential growth, lithium prices are recovering. Citigroup analysts even suggest that the downturn in lithium prices may have ended, with an anticipated increase of up to 40% by year-end.

Furthermore, Albemarle has now partnered with Ford, providing battery-grade lithium hydroxide for the automaker’s EVs. Under the agreement, Albemarle will supply over 100,000 metric tons of battery-grade lithium hydroxide to power roughly 3 million future Ford EV batteries. The five-year supply contract commences in 2026 and runs through 2030.

Solid Power

Although the chart might not look promising, Solid Power (NASDAQ:SLDP) should not be dismissed. Needham analysts recently reinstated their buy rating for the stock with a $5 price target, referring to SLDP as a “well-funded call option.” Solid Power is also working to strengthen its partnership with BMW (OTCMKTS:BMWYY) through a joint development agreement, which contributed to the company’s $3.8 million revenue in Q1 2023, an increase of $1.6 million YoY.

Moreover, the company has two significant milestones this year: anticipated improvements in key cell performance metrics and the expected delivery of EV cells to partners by late 2023.

Amplify Lithium & Battery Technology ETF (BATT)

With a 0.59% expense ratio, the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT) offers investors access to international companies involved in lithium battery technology.

As lithium prices recover, the BATT ETF is also gaining momentum. In fact, with the aggressive increase in lithium prices, the BATT ETF has risen from a recent low of $11.60 to $12.59 per share. Moving forward, it would be ideal for the BATT ETF to retest the $14 per share mark.

High-Income Earners Struggle with Pay check-to-Pay check

Despite a slight easing in inflation, a considerable number of consumers continue to feel the pinch. The proportion of adults who feel financially stretched remained nearly constant at 61% as of April, as per a recent LendingClub report.

Interestingly, the report reveals that high-income earners are experiencing increased pressure. Among those with six-figure incomes, 49% now live paycheck to paycheck, up from 42% last year. On the other hand, individuals earning less than $100,000 saw either a steady percentage or a decline in those living paycheck to paycheck during the same period.

Your financial status might be influenced by where you reside

Anuj Nayar, LendingClub’s Financial Health Officer, explains that “a $100,000 income may not stretch that far” depending on your location. A separate study by SmartAsset examined how far a six-figure salary stretches in the 25 largest cities in the United States. In New York City, for instance, $100,000 is equivalent to just $35,791 after accounting for taxes and the high cost of living.

In contrast, a $100,000 salary goes much further in Memphis, equating to approximately $86,444 thanks to a lower cost of living and no state income tax. LendingClub found that 69% of city dwellers live paycheck to paycheck, which is 25% more than their suburban counterparts. Nayar highlights, “where you live appears to be almost equally important in factoring whether a consumer is living paycheck to paycheck.”

Rising mortgage rates, home prices, and rents in many cities across the country contribute to these financial challenges, as evidenced by the latest data from rental listings site As of the previous month, 29 of the 50 most populous U.S. cities registered year-over-year rent increases.

Jon Leckie, a researcher for, notes that compared to two years ago, rents have surged by over 16%—equivalent to a $275 hike in monthly rent bills. He adds, “That kind of growth over such a short period of time is going to put a lot of pressure on pocket books.”

Escaping the paycheck-to-paycheck cycle

It can be challenging, especially for high earners and city dwellers who often fall victim to “lifestyle creep,” according to Carolyn McClanahan, CFP and founder of Life Planning Partners in Jacksonville, Florida.

As people’s incomes increase, their spending habits tend to follow suit, particularly when it comes to dining out, using food delivery services like DoorDash, and subscribing to additional services. McClanahan warns that it’s easy to “fall into the trap of too much convenience spending.”

To overcome this cycle, McClanahan, who is also a member of CNBC’s Advisor Council, recommends evaluating convenience spending and identifying areas that don’t bring value. She advises, “the first thing to do is look at convenience spending and figure out ways to cut the spending that is not bringing them value.” Redirect the money saved from cutting unnecessary expenses towards building an emergency fund.

Once you’ve accumulated three to six months’ worth of expenses in your emergency fund, shift your focus to saving for other financial goals.

Report Reveals Staggering Disparity Among Global Top 1%: Monaco Tops the List, India Ranks 22nd

Many people associate wealth with owning a luxurious home, an extravagant car, and other valuable possessions. However, the top one per cent of the world’s wealthiest individuals possess far more than most can fathom.

Global real estate consulting firm Knight Frank recently published its updated Wealth Report, which discloses the amount of wealth required to become part of the elite one per cent in various countries. Monaco leads the pack, where entering the top tier necessitates a net worth of at least eight figures. According to Knight Frank’s findings, the starting point for Monaco’s wealthiest one per cent is $12.4 million.

Wondering about India? The country ranks 22nd on the list of 25 nations featured in the wealth report, with a minimum requirement of $175,000 (Rs 1.44 crore) to join the top one per cent. India places higher than South Africa, the Philippines, and Kenya.

Knight Frank’s 2022 report highlights that the number of ultra-high-net-worth individuals in India grew by 11 per cent, driven by thriving equity markets and a digital revolution. Among Asian countries, Singapore boasts the highest entry threshold, with $3.5 million needed to join the top one per cent, slightly ahead of Hong Kong’s $3.4 million.

Forbes’ 2023 list of billionaires includes 169 Indians, up from 166 the previous year. Mukesh Ambani retains his title as the richest person in both India and Asia, despite an eight per cent decrease in his wealth over the past year.

Knight Frank’s findings emphasize how the pandemic and rising living expenses have exacerbated the divide between affluent and impoverished nations. The entry-level for Monaco’s wealthiest is over 200 times greater than the $57,000 required to be part of the top one percent in the Philippines, which ranks among the lowest in Knight Frank’s study.

IRS To Launch Free Online Tax-Filing System

The IRS has revealed plans to initiate a trial of a complimentary, direct online tax-filing system for the 2024 tax season. This decision is based on significant taxpayer interest and a relatively low cost associated with the system.

In their eagerly awaited report, the IRS disclosed that they have developed a prototype system which will be introduced through a pilot program. The program will involve a limited number of taxpayers and offer restricted functionality, enabling the Treasury Department to assess how users engage with the system, according to IRS and Treasury officials.

Laurel Blatchford, who leads the Treasury Department’s office responsible for implementing the Inflation Reduction Act, stated, “Dozens of other countries have provided free tax-filing options to their citizens, and American taxpayers who want to file their taxes for free online should have an acceptable option.”

The Inflation Reduction Act increased IRS funding by $80 billion and mandated the agency to evaluate the feasibility of a direct tax-filing system. If implemented, this program could potentially allow taxpayers to prepare and submit their taxes without relying on popular tax preparation companies, which have invested millions to oppose similar proposals in the past.

IRS considers revamping tax filing process

The IRS has identified a strong demand for a complimentary tax-filing service, now referred to as “Direct File.” Laurel Blatchford mentioned, “Seventy percent of the public is interested in a free option deployed by the IRS, so we think there will be excitement there.” The Treasury Department’s decision to proceed with the pilot program was influenced by evident taxpayer interest.

An IRS-conducted survey revealed that 72 percent of taxpayers expressed high or moderate interest in using the direct file service. Additionally, 68 percent of those who prepare their returns stated they would be highly or moderately likely to switch to the IRS’s free online tool.

Significant impact with minimal expected cost

The report estimates the direct file system’s cost to be only a small portion of the $80 billion budget increase the IRS obtained through the Inflation Reduction Act, most of which is designated for enhanced enforcement capabilities. The report found that “Annual costs of Direct File may range from $64 million (assuming 5 million users and a narrow scope of covered tax situations) to $249 million (assuming 25 million users and a broad scope of covered tax situations).”

Funding for this initiative will be sourced from the IRS’s technology and products budget, as well as its customer support budget. IRS Commissioner Danny Werfel also suggested that systems modernization funds allocated in the Inflation Reduction Act could be utilized to strengthen the system.

Understanding Direct File

The report suggests that taxpayers’ confidence in using the IRS system stems from the fact that the IRS already has access to their personal information. However, Danny Werfel, the IRS Commissioner, stated that the direct file prototype would not likely utilize pre-populated forms to further automate interactions with government software, explaining, “Given that it will be limited in scope, we do not expect pre-population or predetermining tax obligations to be part of it.”

This implies that the prototype software will likely adopt a question-and-answer format, similar to many commercial software options, as indicated by the IRS’s recent strategic operating plan for its expanded budget.

Direct File eligibility

Tuesday’s report outlines various scenarios that the Direct File system could accommodate, ranging from basic wage income taxed with the standard deduction to more complex situations involving state returns. Werfel mentioned that the pilot program would further determine the specific taxpayer cases that could utilize the system.

With nearly 90% of all filers using the standard deduction and wages and salaries being taxed at 99% compliance, the Direct File system might handle the majority of common tax situations. This has led to recommendations for a direct file option from the Government Accountability Office, the National Taxpayer Advocate, and numerous tax experts over the years.

Since the early 2000s, the IRS’s Free File program, an agreement between the IRS and a group of private tax preparation companies, has offered free commercial software to lower-income individuals. However, only a small percentage of eligible taxpayers have used it, resulting in accusations of deceit and a $141 million settlement paid by TurboTax maker Intuit to taxpayers across nine states.

Lawmakers’ opinions on IRS e-filing

Rep. Brad Sherman (D-Calif.) wrote a letter to Werfel this week, encouraging the adoption of an e-filing program and stating, “The IRS established the free e-filing program in 2003, but it did so in partnership with major tax preparation software companies that frequently mislead taxpayers into paying for their services.”

Werfel recently asserted that his agency has the legal authority to proceed with the report’s conclusions, despite opposition from Senate Finance Committee Republicans. He also mentioned being open to other legal interpretations if questions about authority arise.

Both Republican and Democratic administrations have supported the idea of more direct tax filing methods in the past. Kitty Richards, former director of State and Local Fiscal Recovery Funds at the U.S. Department of the Treasury, highlighted proposals from Presidents Ronald Reagan and George W. Bush for voluntary return-free systems and an easy, no-cost online filing option, respectively. However, she noted that the tax preparation industry recognized the threat a free government tax preparation and filing process would pose to their profits.

Global Economies Seek to Break Free from US Dollar Dominance

Nations worldwide are embarking on an irreversible course to break away from the US dollar, according to seasoned investment expert Matthew Piepenburg. In a recent interview at the Deutsche Goldmesse conference with the Soar Financially YouTube channel, Piepenburg, partner at emerging markets-focused Matterhorn Asset Management, claims that major economies are now evidently trying to distance themselves from dollar dominance.

He asserts that the US Federal Reserve’s interest rate hikes are driving countries like China and Russia to adopt settlement systems that don’t depend on the USD. In addition to China and Russia, both members of the BRICS coalition, Piepenburg reveals that 41 other nations are following suit, possibly concerned about how the US has treated Russia during its conflict with Ukraine.

Piepenburg explains, “So when that dollar gets higher, because Powell is raising the rates, that becomes more onerous and painful for the rest of the world and they begin to break ranks.” He further adds, “Asia in general, China and Russia in particular are very big rank-breaking nations. And, of course, they’re bringing 41 other countries alongside to have trade settlements outside the US dollar.”

The BRICS group, representing the economically-aligned nations of Brazil, Russia, India, China, and South Africa, is considering launching a global currency that does not rely on the US dollar. Several nations reportedly want to participate, including Saudi Arabia, Iran, Argentina, the United Arab Emirates, Algeria, Egypt, Bahrain, Indonesia, two unnamed East African countries, and one from West Africa.

While Piepenburg doesn’t foresee the yuan or any other currency replacing the dollar as the world reserve currency in the near future, he does identify a “clear trend” of countries worldwide bypassing the dollar as the primary, trusted medium of trade. He concludes, “The clear trend of breaking ranks with the US dollar as a trusted, reliable, dependable trade currency and payment system is now I think irrevocable.”

The World Health Organization (WHO) advises against using sugar substitutes for weight loss, as new guidelines reveal that non-sugar sweeteners (NSS) do not provide long-term benefits in reducing body fat for adults or children. Francesco Branca, director of WHO’s Department of Nutrition and Food Safety, stated, “Replacing free sugars with non-sugar sweeteners does not help people control their weight long-term.” The guidance applies to everyone except those with preexisting diabetes.

While the review identified potential undesirable effects from long-term sugar substitute use, such as a mildly increased risk of type 2 diabetes and cardiovascular diseases, Branca clarified that the recommendation doesn’t comment on the safety of consumption. He added, “What this guideline says is that if we’re looking for reduction of obesity, weight control or risk of noncommunicable diseases, that is unfortunately something science been unable to demonstrate.”

The Deadline Looms For Debt Ceiling

The US federal government is on the brink of being unable to make debt payments, and it’s up to Congress to vote on raising the nation’s borrowing cap, also known as the debt limit. However, House Speaker Kevin McCarthy (R-Calif.) and President Biden are currently at odds over Republican demands to link the debt limit to spending caps and other policy requirements. Treasury Secretary Janet Yellen has cautioned that the country could exhaust its borrowing authority by June 1, leaving little time for negotiators to reach a consensus.

In a recent meeting with McCarthy, House Democratic Leader Hakeem Jeffries (D-N.Y.), Senate Majority Leader Chuck Schumer (D-N.Y.), and Senate Minority Leader Mitch McConnell (R-Ky.), Biden aimed to find a way forward. Although they didn’t reach an agreement, staff-level discussions continue in an attempt to avert default.

Debt ceiling

You might have some questions about the debt ceiling and the ongoing debate. The debt ceiling, or debt limit, is a restriction on the amount of debt the federal government can accumulate. As Jason Furman, a former economic advisor to President Obama and current economics professor at Harvard, explains, “It used to be that every time you did a Treasury auction where you borrowed, Congress would pass a new law just for that one auction.” However, in 1917, during World War I, Congress opted for a more streamlined approach, allowing the government to borrow up to a specified amount before needing to request an increase. Since 1960, Congress has raised or suspended the debt limit 78 times, according to the Treasury Department.

How do experts know when the government has really run out of funds?

Picture : NBC

Experts determine when the government is nearing its funding limit by examining expected tax revenue, the timing of those payments arriving in Treasury accounts, and scheduled debt payments. This analysis helps establish a timeframe, referred to as an X-Date, when the debt authority might be depleted.

Nonetheless, the Treasury Department has several options, known as extraordinary measures, to prevent default. These measures involve reallocating investments and using accounting techniques to redistribute funds. The federal government technically reached the debt limit in January, but these extraordinary measures have maintained payment flows since then. While experts cannot pinpoint an exact date for when funds will be exhausted, they can estimate a general range, which currently falls between early June and potentially as late as July or August.

Why is there a fight over it?

Debt has generally been viewed unfavorably in American politics, and lawmakers often hesitate to be seen as endorsing more federal borrowing or spending. Additionally, they tend to attach unrelated priorities to must-pass legislation, making the debt limit a prime target for political disputes.

As Maya MacGuineas, president of the Committee for a Responsible Federal Budget, explains, “Everybody uses [bills to increase] the debt ceiling for their favorite policies.” The real issue arises when discussions about defaulting become more serious. Historically, votes to raise the debt limit were relatively uneventful; however, the situation changed in 2011 when the US came dangerously close to default.

Mark Zandi, an analyst at Moody’s Analytics, notes that while there have been previous political battles over the debt, none were as risky or significant as the 2011 conflict. At that time, Republican House Speaker John Boehner (R-Ohio) and President Obama were in a standoff over spending. Republicans demanded deep spending cuts and caps on future spending growth, while Obama insisted on raising the debt limit without any extraneous policies – a clean increase.

Ultimately, Congress reached an agreement to increase the debt limit along with caps on future spending, but not before Standard & Poor’s downgraded the nation’s debt for the first time in history. Today’s situation bears a striking resemblance to the 2011 political struggle, raising serious concerns about the possibility of a default.

What could happen if it’s not raised?

If the debt ceiling is not raised, the Treasury Department would be unable to fulfill its due payments, resulting in a default. This would occur regardless of the type or size of the missed payment.

Some Republicans have proposed a system called payment prioritization, in which certain debts are selected for repayment. However, this would require Congress to pass new legislation, which is politically improbable. Moreover, most experts believe that implementing such a system could be practically unfeasible, and it is not currently being considered as a serious solution.

Has the U.S. ever failed to make these debt payments?

No, the U.S. has never failed to make its debt payments. This reliability is a significant reason why the federal government can easily sell Treasury bonds to investors worldwide and why the U.S. dollar is one of the most trusted currencies.

As MacGuineas points out, “Treasuries are the debt vehicle that are most trusted in the entire world, even if there is an economic crisis that originated in the U.S., people come and buy treasuries because they trust them.” If that trust is jeopardized due to a default or missed interest payment, the U.S. would likely struggle to regain its previous status as the world’s most trusted debtor.

Would capping or cutting spending now resolve the problem?

No, capping or cutting spending now would not resolve the problem, as the debt limit pertains to money already spent due to laws previously passed by Congress. Furman emphasizes that “this borrowing isn’t some unilateral thing that President Biden wants to do… It is in order to accomplish what Congress told him to accomplish.”

Some of the current debt accumulation even results from laws enacted under former presidents, such as Donald Trump. Spending caps and other changes proposed by House Republicans are separate policies designed to address future debt accumulation rather than the immediate need to raise the debt limit.

What else could be affected by a default?

The possibility of a U.S. default may result in a domino effect of negative outcomes across the worldwide financial landscape. The nation’s credit rating could suffer long-term damage, diminishing the value of U.S. treasuries and making it a less attractive investment destination. MacGuineas expressed deep concern, stating, “I am truly concerned there is an actual chance of default and that is so dangerous and such a sign that the U.S. is not able to govern itself in a way that is functioning.”

Zandi cautioned that the fallout might extend beyond merely investment and borrowing rates. He advised, “Don’t worry about your stock portfolio, worry about your job,” emphasizing the potential loss of employment and increased unemployment rates. He added, “This will certainly push us and, you know, it’s going to be about layoffs. Stock portfolios will be the least of people’s worries.”

Furman compared the potential crisis to the 2008 financial meltdown caused by Lehman Brothers Bank’s collapse, suggesting it could be even more severe. “It could be worse than Lehman Brothers, where everyone basically demands their money back because they don’t believe the collateral anymore,” he explained. “And you have the equivalent of a run on the global financial system.”

Is default the same thing as a shutdown?

Default and shutdown are not the same thing. A government shutdown transpires when Congress does not pass annual spending bills before the fiscal year concludes on September 30. Although these two matters may be connected at times, this is because legislators have, on occasion, deliberately synchronized the debt limit extension with the end of the fiscal year to prompt more comprehensive spending debates in conjunction with debt authorization.

Are there other ways this problem could be fixed, aside from just increasing the debt limit?

Apart from merely raising the debt limit, there are alternative solutions to address the issue, as the existing process is widely considered ineffective. MacGuineas from the Committee for a Responsible Federal Budget believes that while Congress should reassess debt and spending priorities, the current debt limit mechanism fails to compel them to make decisions. She stated, “The debt ceiling is a terrible way to try to impose fiscal responsibility,” describing it as a “dumb approach.”

Instead, MacGuineas proposes a system where the debt limit is increased in line with the passage of legislation by Congress. Some economists have even suggested eliminating the debt limit entirely.

Other less conventional ideas involve minting a $1 trillion platinum coin to cover the debt or elevating the limit to such an extent that subsequent debates would be postponed for years or even decades.

India Phases Out ₹2,000 Notes, Sets September 30 Deadline for Exchange

New Delhi: The Reserve Bank of India (RBI) has announced its decision to phase out ₹ 2,000 notes and has set a deadline of September 30 for people to exchange or deposit them in their bank accounts. Starting May 23, the RBI’s 19 regional offices and other banks will accept ₹ 2,000 notes in exchange for lower denomination currency. It is important to note that these notes will continue to be considered legal tender, as stated by the RBI.

The RBI has instructed all banks to cease issuing ₹ 2,000 notes with immediate effect.

The introduction of the ₹ 2,000 note took place in November 2016 after Prime Minister Narendra Modi’s sudden demonetization move, which rendered high-value ₹ 1,000 and ₹ 500 notes invalid overnight.

The RBI explained its decision, stating, “The purpose of introducing ₹ 2,000 banknotes was fulfilled once banknotes of other denominations became sufficiently available. Consequently, the printing of ₹ 2,000 banknotes was discontinued in 2018-19.”

To ensure convenience and minimize disruption to regular banking operations, the RBI has allowed the exchange of ₹ 2,000 notes for lower denomination notes, up to a limit of ₹ 20,000 at a time, at any bank beginning May 23, 2023. This facility will be available until September 30, allowing individuals to either exchange or deposit their ₹ 2,000 notes.

Sources informed NDTV that the RBI might extend the deadline beyond September 30 if necessary. However, even after the current deadline, ₹ 2,000 notes will remain valid as legal tender.

The RBI highlighted that approximately 89% of ₹ 2,000 denomination banknotes were issued before March 2017 and are reaching the end of their expected lifespan of four to five years. The total value of these notes in circulation decreased from ₹ 6.73 lakh crore at its peak on March 31, 2018 (comprising 37.3% of the currency in circulation) to ₹ 3.62 lakh crore, representing only 10.8% of the currency in circulation as of March 31, 2023.

The central bank emphasized that the ₹ 2,000 note is not commonly used for transactions. Similar measures were taken by the RBI in 2013-2014 when certain notes were phased out of circulation.

How America Sustains High Deficits Without Economic Collapse

The United States has consistently maintained a high trade deficit for decades, raising questions about how the country manages to avoid economic repercussions that typically accompany such imbalances. This article delves into the factors that enable the US to sustain these high deficits without experiencing financial collapse.

Picture : The Blance

One of the primary reasons the US can maintain high trade deficits is the dominance of the US dollar as the world’s reserve currency. Central banks across the globe hold their foreign exchange reserves in dollars, contributing to the currency’s stability and demand. This status allows the US to run persistent trade deficits without causing a depreciation in its currency value.

Another factor that enables the US to support high trade deficits is the inflow of foreign investments. International investors view the US as a safe haven for their capital due to the country’s strong and stable economy. These investments help finance the trade deficit by providing an influx of foreign funds, which offsets the negative effects of the deficit on the US economy.

The US economy is driven primarily by domestic consumption, which accounts for approximately 70% of its GDP. This strong demand for goods and services helps offset the trade deficit by creating a robust market for imports. As a result, the US can continue importing goods from other countries without significantly harming its own industries.

The US is a global leader in innovation and technological advancements, which contribute to the country’s overall economic strength. These innovations attract foreign investments and facilitate the export of high-value goods and services, such as software, pharmaceutical products, and aerospace technology. This, in turn, helps to mitigate the impact of the trade deficit on the US economy.

The US government’s fiscal policies also play a role in managing the trade deficit. By implementing policies that promote economic growth, the government can stimulate demand for goods and services. Additionally, the US Federal Reserve’s monetary policies influence interest rates and the money supply, which can impact the trade deficit indirectly.

Despite maintaining a high trade deficit, the United States has managed to avoid the economic pitfalls often associated with such imbalances. Factors such as the US dollar’s status as a global reserve currency, foreign investment, strong domestic demand, innovation, and government fiscal policies all contribute to the country’s ability to sustain these deficits. However, it is essential to continue monitoring the trade deficit and its potential long-term impacts on the US economy.

Turbotax Customers Can Claim $141M Settlement Money

(AP) — Millions of Americans who qualified for free tax services — but were instead deceived into paying TurboTax for their returns — will soon get settlement checks in the mail.

In a settlement last year, TurboTax’s owner Intuit Inc. was ordered to pay $141 million to some 4.4 million people across the country. Those impacted were low-income consumers eligible for free, federally-supported tax services — but paid TurboTax to file their federal returns across the 2016, 2017 and 2018 tax years due to “predatory and deceptive marketing,” New York Attorney General Letitia James said.

All 50 states and the District of Columbia signed the May 2022 settlement, which was led by James.

Consumers eligible for restitution payments do not need to file a claim, the New York Attorney’s General Office said Thursday. They will be notified by an email from Rust Consulting, the settlement fund administrator, and receive a check automatically.

Checks will be mailed starting next week, and continue through the month of May. The amount paid to each eligible consumer ranges from $29 to $85 — depending on the number of tax years they qualify for.

“TurboTax’s predatory and deceptive marketing cheated millions of low-income Americans who were trying to fulfill their legal duties to file their taxes,” James said in a Thursday statement. “Today we are righting that wrong and putting money back into the pockets of hardworking taxpayers who should have never paid to file their taxes.”

At the time of the May 2022 settlement, James said her investigation into Intuit was sparked by a 2019 ProPublica report that found the company was using deceptive tactics to steer low-income tax filers away from the free, federal services they qualified for — and toward its own commercial products instead.

Under the terms of last year’s settlement, Intuit Inc. agreed to suspend TurboTax’s “free, free, free” ad campaign. According to documents obtained by ProPublica, Intuit executives were aware of the impact of advertising free services that were actually not free for everyone.

“The website lists Free, Free, Free and the customers are assuming their return will be free,” an internal company PowerPoint presentation said, per ProPublica. “Customers are getting upset.”

When contacted by The Associated Press on Friday, Inuit pointed to the company’s May 2022 statement following the settlement agreement.

“Intuit is pleased to have reached a resolution with the state attorneys general that will ensure the company can return our focus to providing vital services to American taxpayers today and in the future,” Kerry McLean, Intuit’s executive vice president and general counsel, said at the time.

Biden Administration Warns About Growing Risks Of Medical Loans And Medical Credit Cards

The Biden administration has issued a warning to Americans concerning the financial risks associated with medical credit cards and other loans for medical bills. In a recent report, the Consumer Financial Protection Bureau (CFPB) estimated that Americans paid $1 billion in deferred interest on medical credit cards and other medical financing between 2018 and 2020. The agency found that interest payments can increase medical bills by almost 25 percent, which can deepen patients’ debts and threaten their financial security.

CFPB’s Director, Rohit Chopra, stated that “lending outfits are designing costly loan products to peddle to patients looking to make ends meet on their medical bills. These new forms of medical debt can create financial ruin for individuals who get sick.” Nationally, KFF Health News found that approximately 100 million people, including 41 percent of adults, have healthcare debt. This large scale problem is feeding a multibillion-dollar patient financing business, with private equity and big banks looking to capitalize on the situation when patients and their families are unable to pay for care. The profit margins in the patient financing industry top 29 percent, according to research firm IBISWorld, which is seven times what is considered a solid hospital profit margin.

One of the most prominent financing options is credit cards like CareCredit offered by Synchrony Bank which is often marketed in physician and dentist waiting rooms to help pay off medical bills. These cards typically offer a promotional period where patients pay no interest, but if the patient missed a payment or could not pay off the loan during the promotional period, they could face interest rates that rise as high as 27 percent, according to the CFPB. Patients are also increasingly drawn into loans administered by financing companies such as AccessOne.

These loans, which often replace no-interest instalment plans that hospitals once commonly offered, can add hundreds or thousands of dollars in interest to the debts patients owe. Hospital and finance industry officials insist that they take care to educate patients about the risks of taking out loans with interest rates. However, federal regulators have found that many patients remain confused about the terms of the loans.

According to the CFPB, the risks are particularly high for lower-income borrowers and those with poor credit. About a quarter of people with a low credit score who signed up for a deferred-interest medical loan were unable to pay it off before interest rates jumped. By contrast, just 10% of borrowers with excellent credit failed to avoid the high interest rates. Regulators found that many patients remained confused about the terms of the loans and that patients often didn’t fully understand the products’ terms and found themselves in crippling financing arrangements.

Despite this, the new CFPB report does not recommend new sanctions against lenders. The study cautioned that the system still traps many patients in damaging financing arrangements. It also stated that “consumers complain that these products offer confusion and hardship rather than benefit, as claimed by the companies offering these products.” The report concluded that “many people would be better off without these products.”

The growth of patient financing products pose risks to low-income patients. Patients should be offered financial assistance to pay large medical bills, but instead, they are funnelled into credit cards, debt consolidations or personal loans that pile interest on top of medical bills they cannot afford.

An investigation conducted by KFF Health News with NPR explored the scale and impact of the nation’s medical debt crisis. They found that 41% of adults have some form of healthcare debt. In the patient financing industry, profit margins are over 29%, which is nearly 7x higher than what is considered to be a solid hospital profit margin. A UNC Health public records analysis found that after AccessOne began administering payment plans for the system’s patients, the percentage of people paying interest on their bills increased from 9% to 46%.

According to the CFPB, “Patients appear not to fully understand the terms of the products and sometimes end up with credit they’re unable to afford.” Federal regulators warned that patient financing products pose another risk to low-income patients. They should be offered financial assistance with large medical bills, but instead, they are being routed into credit cards or loans that pile interest on top of medical bills they cannot afford.

Medical credit cards and other loans for medical bills can deepen patients’ debts and threaten their financial security. The number of people with healthcare debts is increasing, and many patients remain confused about the terms of the loans. Profit margins in the patient financing industry are high, and patients are often funnelled into credit cards rather than offered financial assistance with large medical bills. This can lead to confusion and financial ruin for those who get sick. The report concluded that “many people would be better off without these products.”

Is Recession Imminent?

As fears of a looming recession rise, David Rosenberg, president of Rosenberg Research and former chief North American economist at Merrill Lynch, suggests that a recession might be imminent. Despite recent GDP figures showing growth, Rosenberg forewarns that the leading indicators hint that a recession could start as early as this quarter.

With inflation on the rise, Americans are struggling with wages that cannot keep up with the increasing cost of living. Should a recession occur, it could cause worse financial difficulties for many. Rosenberg explains a recession as a “haircut to national income” that is comparable to “the whole country taking a pay cut.” The effects of a recession will not only impact individuals but could also spell trouble for the stock market.

The outbreak of the pandemic, coupled with variations, broke the world’s economy, and a recession was just one of many repercussions. Even as the world struggled to recover from the pandemic’s impact, the United States Federal Reserve began hiking interest rates in early 2022. This move caused fears among investors as rates influence the economy and the stock market. Although the GDP figures indicate an expanding economy, Rosenberg warns that a recession might be closer than anticipated.

An economic recession could lead to increased unemployment, lower wages, and volatile stock markets, further exacerbating the gap between the rich and the poor. Therefore, policymakers must put measures to prevent such economic shockwaves, as a recession has far-reaching impacts on the nation’s livelihood and global economies.

Bear Market

According to David Rosenberg, he believes that he is bearish on equities as he’s not confident that all recessions are fully priced in, given the current valuations. He asserts that investing in investment-grade corporate bonds could be a plausible route to take due to the attractive yields on offer with debt offering priority over equity in a company’s capital structure. Among other opportunities, private credit investments have also emerged which offer a higher yield for investors who are looking to diversify their portfolios, but aren’t satisfied with most conventional savings accounts or certificates of deposit (CDs).

The S&P 500 took a bad hit in 2022, plunging 19.4%, and although it has experienced some revival in 2023 with a 9% uptick year-to-date, Rosenberg doesn’t believe this will be long-lived. On account of valuation, he highlights that there is a pressing concern regarding the 19 forward multiple. In his view, this will only result in a 5.3% earnings yield, whereas, he could “pick up 5.4% in single-A triple-B corporate credit” to “wind up in a better part of the capital structure”.

While bondholders will be given the first bite of the cherry, David Reilly, Chief Investment Officer at Nuveen’s Global Private Markets Group, highlights that these investors will often come with other expenses. The cost of investing in corporate credit to access these desirable yields could potentially see investors being forced to invest in leveraged loans or more higher-risk credit. Regardless of the obstacles, it is evident that there is a lot of funds in this space, given the record low-interest rates and a thirst for yield.

Furthermore, while commercial real estate has been enjoying high rewards too, there is significant debate concerning its future given flexible working now being the norm over an office-based environment. Consequently, alternative forms of profitable investments continue to shine and could serve as an alternative means for investors to access the exposures they desire.

From Weak Hands To Strong Hands

David Rosenberg has predicted that the S&P 500 will see a drop of around 23% due to a forthcoming recession in the US economy. His prediction, which is based on an assumption of a “classic 20% hit to earnings” and multiples falling to 15 or 16, puts the target price at 3,200. While the prospect of a significant downturn is not generally good news for investors, Rosenberg believes that those who have “dry powder and liquidity” will have an opportunity to purchase assets at better prices. This is because during a recession, assets tend to fall from weaker hands to stronger ones. The cleansing effect of the recession on the market means that it could be a good time to invest, providing the investor has the necessary liquidity. Rosenberg’s portfolio is currently underweight in equities, with the lowest weighting since 2007. Instead of stock investments, he has turned to bonds, gold, and alternative investments as uncorrelated supports to GDP.

Individuals looking to prepare for an economic downturn can invest in alternative assets, such as real estate. With as little as $100, those without extensive investment portfolios can diversify their holdings and potentially gain consistent income. Several assets offered today are well suited to taking advantage of trends in real estate, including real estate investment trusts, which provide periodic income and portfolio diversification. Investors can also turn to private real estate funds that invest in various types of property, such as commercial or residential, to further diversify their portfolio. Those with an entrepreneurial spirit can even take part in crowdfunding campaigns, which give access to small, high-yielding, long-term projects.

Despite the fears of market downturns, many investors are still seeing opportunities for growth and expansion. The current market conditions do not predict immediate economic disaster, and the ability to protect wealth and diversify through alternative assets offers investors a resilient portfolio. As we continue further into the 21st century, alternative asset classes will become an increasingly important component of investment portfolios.

Warnings Of Potential Cash Shortage By June 1st, If Debt Ceiling Not Raised

US Treasury Secretary Janet Yellen has issued a warning that the United States could run out of cash by 1 June if Congress fails to raise or suspend the debt ceiling. The country reaching the debt ceiling means the government would be unable to borrow any further money. On Monday, Yellen urged Congress to act quickly to address the $31.4 trillion debt ceiling. In response, President Joe Biden has called a meeting of congressional leaders to discuss the issue on May 9th.

The debt ceiling has been raised, extended, or revised 78 times since 1960. However, in this instance, House Republicans are demanding drastic spending cuts and a reversal of some aspects of President Biden’s agenda, including his student loan forgiveness program and green energy tax credits, in exchange for votes to raise the debt ceiling. This has resulted in objections from Democrats in the Senate and from President Biden himself, who stated last week that the issue is “not negotiable.”

The president is coming under increasing pressure from business groups, including the US Chamber of Congress, to discuss Republican proposals. A default, which would be the first in US history, could disrupt global financial markets and damage trust in the US as a global business partner. Experts have warned that it could also lead to a recession and rising unemployment. It would also mean that the US would be unable to borrow money to pay the salaries of government employees and military personnel, social security checks, or other obligations such as defense contractor payments.

In addition, even weather forecasts could be impacted, as many rely on data from the federally-funded National Weather Service. In a letter to members of Congress, Yellen stated that “We have learned from past debt limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States.”

Yellen added that it is impossible to know for sure when exactly the US will run out of cash. Her announcement came on the same day as the Congressional Budget Office (CBO) reported that there is a “significantly greater risk that the Treasury will run out of funds in early June.” The CBO report said that “The projected exhaustion date remains uncertain, however, because the timing and amount of revenue collections and outlays over the coming weeks are difficult to predict.”

The Treasury plans to increase borrowing through the end of the quarter ending in June, totalling about $726 billion – about $449 billion more than projected earlier this year. Officials have said that this is partly due to lower-than-expected income tax receipts, higher government spending, and a beginning-of-quarter cash balance that was lower than anticipated.

In a joint statement, Democratic Senate Majority Leader Chuck Schumer and House Democratic Leader Hakeem Jeffries said that the US “does not have the luxury of waiting until June 1 to come together, pass a clean bill to avoid a default and prevent catastrophic consequences for our economy and millions of American families.” The statement also accused Republicans of attempting to impose their “radical agenda” on America.

On the Republican side, House Speaker Kevin McCarthy accused President Biden of “refusing to do his job” and “threatening to bumble our nation into its first-ever default.” He further stated that “The clock is ticking… The Senate and the President need to get to work — and soon.”

In another letter sent to members of Congress in January, Yellen stated that the Treasury Department had begun “extraordinary measures” to avoid a government default. It is important to resolve this issue as soon as possible to avoid negative consequences for the US economy and its citizens.

Ajay Banga Confirmed as New World Bank President: An In-Depth Look into the Future of the Global Development Lender

Ajay Banga has been appointed as the next president of The World Bank, as the development lender faces increasing pressure to reshape its role in order to better address climate change. Mr. Banga is due to take over from David Malpass on June 2, for a five-year term, and has been tasked with leading the bank through a difficult period for the world economy, characterized by slowing global growth and high interest rates in many major economies. Mr. Banga will also be required to play a leading role in driving forward the lender’s evolution plans, which aim to allow it a $50bn lending boost over the next decade, helping it to address global challenges like climate change.

The appointment of Mr. Banga is significant not only because he will be leading The World Bank through a challenging period, but also because the appointment comes at a time when there have been growing calls from emerging and developing economies for the US to relinquish its grip on the presidency of the lender. As a US citizen himself, Mr. Banga’s appointment has been met with a mixture of anticipation and skepticism, with many voices in the developing world demanding that the appointment does not dilute the bank’s focus on the pressing economic development needs of developing economies.

One of Mr. Banga’s key priorities, according to a statement from the bank, will be to work with the private sector to help tackle financing for global problems. “There is not enough money without the private sector,” he said, adding that the World Bank should set up a system that could share risk or mobilize private funds to achieve its goals.

In recent years, there has been growing concern about the ability of low-income countries to cope with the double shock of higher borrowing costs and a decline in demand for their exports due to the tough economic conditions prevailing in many developed economies. The IMF’s chief Kristalina Georgieva warned last month that this situation could fuel poverty and hunger, and called for urgent action to address it. It is hoped that Mr. Banga’s experience in bringing together governments, the private sector and non-profits to deliver on ambitious goals will help The World Bank to meet this challenge.

Mr. Banga himself has acknowledged the difficult conditions facing the global economy, but has expressed his confidence that The World Bank will be able to rise to the challenge. “These are all tools in the toolkit and I’m going to try and figure it out,” he said.

One of the most pressing challenges facing The World Bank is the need to address climate change, conflict and the pandemic, which the bank estimates will require developing countries to find $2.4tn every year for the next seven years. Plans to reform the bank have been broadly welcomed, but there is concern that new objectives could relegate the pressing economic development needs of member countries. “We want to make sure that the development agenda is not diluted in the climate agenda,” said Abdoul Salam Bello, a member of The World Bank’s executive board representing 23 African countries.

Despite these concerns, many experts believe that Mr. Banga’s appointment marks a turning point for The World Bank, and that his leadership will be instrumental in helping the lender to take a more decisive approach to the global challenges facing it. The appointment of Mr. Banga is just one step along the way for The World Bank, but it is an important one, and if he can navigate the many challenges facing the lender, he could leave behind a lasting legacy.

GOP-Led Congress Passes “Limit, Save, Grow Act of 2023”

The U.S. House of Representatives on Wednesday, April 26, 2023 passed the Limit, Save, Grow Act of 2023 as the debt ceiling debate continues in the nation’s capital. House speaker Kevin McCarthy introduced the legislation on April 19, which would “limit federal spending, save taxpayer dollars,” and “grow the economy.”

The legislation passed 217-215. Four Republicans voted against the bill, which did not get a single vote from a Democrat.

The vote allows the US to raise the nation’s debt limit for one year and limit federal spending growth to 1% annually. The plan, titled the “Limit, Save, Grow Act of 2023,” would increase the debt limit by $1.5 trillion, or until March 31, 2024, whichever comes first.

McCarthy also plans to repeal key parts of Democrats’ signature legislative package and President Biden’s college student debt cancellation program. The GOP bill would also remove $80 billion that Democrats approved last year to improve the Internal Revenue Service (IRS). However, the Congressional Budget Office estimated that repealing the measure would increase the deficit.

McCarthy said on the House floor that limiting government spending would reduce inflation and restore fiscal discipline in Washington. He added that if Washington wants to spend more, it will have to find savings elsewhere, as every household in America does. McCarthy noted that Medicare and Social Security would not be impacted by the cuts. The framework also includes work requirements for adults without dependents enrolled in federal assistance programs.

According to a press release, the legislation would specifically:

  • “End the Era of Reckless Washington Spending
  • “Reclaim Unspent COVID Funds
  • “Defund Biden’s IRS Army
  • “Repeal ‘Green New Deal’ Tax Credits
  • “Prohibit [President Joe] Biden’s Student Loan Giveaway to the Wealthy
  • “Strengthen the Workforce and Reduce Childhood Poverty
  • “Prevent Executive Overreach and Restore Article I
  • “Lower Energy Costs and Utilities”

The plan also includes “a responsible debt limit increase.”

However, Democrats remain critical of any efforts to link debt ceiling negotiations to legislation that would require work requirements for those on assistance programs. David Scott, the House Agriculture Committee ranking member, said that holding food assistance hostage for those who depend on it in exchange for increasing the debt limit is a nonstarter.

The US hit its current debt limit of $31 trillion in January. The Treasury Department is employing what it refers to as extraordinary measures to essentially act as a band-aid for several months. Those measures are set to run out in early summer. Should Congress fail to raise the debt limit by then, there would be an unprecedented debt default, something that would throw worldwide financial markets into dire straits and likely lead to a recession.

In a speech, McCarthy blasted the president for not meeting with him to negotiate. The pair last met in February and remain at odds over how to address the debt limit. Biden has repeatedly said he wants to sign a clean debt limit bill. Senate Majority Leader Chuck Schumer has also said that efforts to address spending cuts “belong in the discussion about budget, not as a precondition for avoiding default.”

The proposal is likely to face opposition in the Democratic-controlled Senate. Passing the bill would require bipartisan support, which may be difficult given the current political climate. Nonetheless, McCarthy remains optimistic that the proposal will succeed.

“Limited government spending will reduce inflation and restore fiscal discipline in Washington,” McCarthy said. “If Washington wants to spend more, it will have to come together and find savings elsewhere — just like every single household in America.”

“Our plan ensures adults without dependents earn a paycheck and learn new skills,” he said. “By restoring these commonsense measures, we can help more Americans earn a paycheck, learn new skills, reduce childhood poverty and rebuild the workforce.”

“By including these radical proposals as a lever in debt limit negotiations, Speaker McCarthy and his extreme Republican colleagues are ensuring their failure,” David Scott, D-Ga., House Agriculture Committee ranking member, said of McCarthy’s proposal for work requirements.

“President Biden has a choice: Come to the table and stop playing partisan political games, or cover his ears, refuse to negotiate and risk bumbling his way into the first default in our nation’s history,” McCarthy said.

Warren Buffett Worried About Nuclear Threats And Pandemics

Warren Buffett, the billionaire investor, expressed that he is not worried about the success of his company, Berkshire Hathaway, despite current economic headwinds such as banking failures and rising interest rates. Speaking on CNBC’s “Squawk Box,” the 92-year-old said, “I never go to bed worried about Berkshire and how we’ll handle a thing.” He added that, at his age, he has other things to worry about, such as “the nuclear threat” and “a pandemic in the future.”

Berkshire Hathaway, under Buffett’s leadership since 1965, has become one of the world’s largest companies with a market capitalization above $707 billion. Its portfolio of investments includes Geico, Dairy Queen, Duracell, and Fruit of the Loom. Buffett’s history of optimism is well-documented, with data scientists identifying a surplus of positivity in his annual letters to shareholders.

Buffett’s investment strategy is to choose investments he believes in, regardless of their current price, and take advantage of stock drops to buy more of companies he trusts. During a volatile market period in 2016, he advised investors not to watch the market closely when stocks are down. He is known to be supremely self-confident, with “99 and a fraction percent” of his net worth invested in Berkshire, along with several family members.

When confronted with scary issues that are outside of his control, such as nuclear war or future pandemics, Buffett attempts to reduce his stress by focusing on situations and tasks that he can actually solve himself. “I worry about things nobody else worries about, but I can’t solve them all,” he said. “But anything that can be solved, I should be thinking about that.”

Regarding Berkshire’s future, Buffett has already selected the company’s next CEO, Greg Abel, who has stated that he does not plan to diverge from Buffett’s successful formula. Buffett trusts the leaders of Berkshire’s portfolio companies to make the right business decisions and expects Abel to do the same. “I am not giving [Abel] some envelope that tells him what to do next,” but Berkshire Hathaway is “so damn lucky” to have Abel taking the reins, Buffett said.

In conclusion, Warren Buffett’s optimism and confidence have helped him build and sustain one of the world’s largest companies. Despite economic headwinds, he remains unworried about the future of Berkshire Hathaway and instead focuses on things he can control. With a trusted successor in place, Buffett is confident that the company’s success will continue long after he steps down.

NITI Aayog Vice Chair Suman Bery Leads Discussion On Indian Economy In New York

The Indian Consulate in New York held a Round Table on India’s economy on April 20, 2023, which was led by India’s Vice Chairman of Niti Aayog Suman Bery, who is on a visit to the United States.

The Round Table was entitled, Indian Growth Story: Speed, Scale, and Opportunities, and it was attended by high-profile guests from the business sector such as Deepak Raj, managing director of private investment firm Raj Associates and Padma Shri recipient Dr. Sudhir Parikh, chairman of Parikh Worldwide Media.

Caption: Vice Chairman of India’s NITI Aayog Suman Bery, speaking at the Round Table on India’s economy held April 20, 2022, at the Indian Consulate in New York. PHOTO: Indian Consulate.

“It was a pleasure participating in the roundtable discussion on the Indian Growth Story: Speed, Scale and Opportunities at the Consulate General of India, New York (@IndiainNewYork) last evening,” Bery, an economist who took over at NITI last year in May, tweeted after the meeting.

The event was attended by approximately 50 corporate leaders from various sectors such as IT, technology, finance, healthcare, high-level executives, and policymakers.

Picture : The Hindu

Dr. Sudhir Parikh, chairman of Parikh Worldwide Media, asking a question at the April 20, 2023, Round Table on India’s economy with Vice Chairman of NITI Aayog Suman Bery, held at the Indian Consulate in New York. Also seen are other high profile participants, as well as India’s Deputy Consul General Dr. Varun Jeph, right. PHOTO: Indian Consulate

Among the subjects discussed were the markers of India’s economic growth making it one of the world’s fastest-growing economies; elements of India’s energy transition, New Delhi’s Free Trade Agreements which give a strong push to Indian trade, India’s G20 leadership, women’s empowerment, etc.

Businessman from New Jersey Deepak Raj, addressing India’s NITI Aayog Vice Chairman Suman Bery (not in picture) at the April 20, 2023, Round Table on India’s economy, held at the Indian Consulate in New York. PHOTO: Indian Consulat

The International Monetary Fund estimates India’s growth projections at 5.9 percent in 2023, and 6.3 percent in 2024, compared to the much lower World Output at 2.8 percent in and 3.0 percent, Bery noted accompanied by a visual table.

India has signed 13 Free Trade Agreements and 6 preferential pants so far with its trading partners for ensuring greater market access for domestic goods and promoting exports, Bery pointed out, with appropriated visual representations. The most recent FTAs signed are with Mauritius, UAE, and Australia.

More than 50 high- profile attendees were present at the April 20, 2023, Round Table on the Indian economy, held at the Indian Consulate in New York, with Vice Chair of India’s NITI Aayog Suman Bery. PHOTO: Indian Consulate

India is also actively engaged in FTA negotiations with countries like United Kingdom, European Union, and Canada.

India’s energy transition includes elements of – increasing electrification; higher penetration of cleaner fuels in energy mix; accelerated adoption of energy-efficient technologies; rising digitalization, among other efficiencies, Bery noted.

On the same day, April 20, Bery was the chief guest at a Student Roundtable and Lunch in Columbia University’s Center on Global Energy Policy at the School of International and Public Affairs.

Before being appointed Vice Chair at NITI Aayog, Bery served in various capacities – Senior Visiting Fellow at the Centre for Policy Research, New Delhi; a Global Fellow in the Asia Program of the Woodrow Wilson International Centre for Scholars in Washington D.C.; and a non-resident fellow at Bruegel, an economic policy research institution in Brussels.

In 2012 until mid-2016, Bery was Shell’s Global Chief Economist, where he advised the board and management on global economic and political developments. He was also part of the senior leadership of Shell’s global scenarios group.

Prior to that, Bery served as Director-General of the National Council of Applied Economic Research, one of India’s leading socioeconomic research institutions.

Bery also served at various times as a member of the Prime Minister’s Economic Advisory Council, of India’s Statistical Commission, and of the Reserve Bank of India’s Technical Advisory Committee on Monetary Policy.

He also worked at the World Bank, engaged in research on financial sector development and country policy and strategy, focusing on Latin America and the Caribbean.

Do The Rich Pay Their ‘Fair Share’?

Tax Day has recently passed and according to a recent Pew Research poll, Americans’ frustration with the tax code has reached its highest point in recent years. The majority of Americans, 56%, say they pay “more than their fair share” of taxes, with the number having increased from 51% from 2019.

It is also no surprise that almost two-thirds of Americans believe that the wealthy do not pay enough taxes, with 61% supporting the idea of raising taxes on households earning over $400,000. However, the definition of what constitutes a “fair share” of taxes is subjective and many Americans may not understand how much of the tax burden the rich bear.

In 2020, the top 1% of taxpayers paid $722 billion in income taxes, which accounted for 42.3% of all income taxes paid – the highest percentage in modern history. In contrast, the bottom 90% of taxpayers paid $450 billion in income taxes, or just 26.3% of the total, representing their lowest percentage of the tax burden in decades. This means that the top 1% of taxpayers pay a far greater share of the nation’s tax burden than 142 million of their neighbors combined.

Picture : Federal Budget

The wealthy do not pay a larger amount solely because they earn the most money. In 2020, the top 1% of taxpayers earned 22% of all adjusted gross income, while their 42.3% share of income taxes is nearly twice their income share. The opposite is true for the bottom 90%, who earned more than half of the nation’s income but paid only 26.3% of the taxes, representing roughly half of their share of the nation’s income. This was not the case in 1980, where the tax burden was more evenly shared. The bottom 90% earned 68% of the nation’s income and paid 52% of the income taxes, while the top 1% earned 9.6% of the nation’s income and paid 17% of the income taxes.

One of the reasons for the progressive tax system in the United States is the massive expansion of social programs delivered through the tax code over the past three decades. Many of the most significant programs aimed at lower-income families and those with children, such as the Child Tax Credit and the Earned Income Tax Credit, are run through the IRS, which deliver roughly $180 billion in benefits each year, much of which is refundable. Since the mid-1990s, tax credits have multiplied, with credits for adoption, child care, senior care, college tuition, buying electric cars or solar panels, and buying health insurance, among other things. However, these responsibilities are beyond the capacity of a tax collection agency, making it difficult for the IRS to function.

Record numbers of taxpayers now pay no income taxes after claiming their credits and deductions, with 34% of tax filers paying no income taxes due to generous credits and deductions in the tax code. In 2019, 54 million tax filers, equal to 34%, paid no income taxes because of the tax code’s generous credits and deductions. In 1980, only 21% of tax filers paid no income taxes due to credits and deductions.

Despite politicians’ rhetoric about ensuring the fair share of taxes, the burden on top earners continues to climb. If the wealthy were indeed able to use loopholes to avoid paying taxes, many of them would need better accountants.

How Ajay Banga Could Reshape World Bank To Tackle Climate Change

World Bank shareholders are gathered in Washington this week for their annual spring meetings, while the global financial institution is poised for new leadership that could change how it approaches climate and other global crises. Business executive Ajay Banga is expected to be confirmed as the bank’s president in the coming weeks.

Richard T. Clark is a political scientist who studies policymaking at the World Bank and the International Monetary Fund. Clark says Banga could push the World Bank to tackle climate change more aggressively in three ways, but that each approach carries risk.

Clark says:

“The World Bank is at an inflection point – Ajay Banga is slated to take over for current President David Malpass, who has been labeled a climate-skeptic by some observers. Banga, who was nominated by the United States, faces pressure to reorient the World Bank’s lending portfolio to tackle climate change more aggressively. He could do this in several ways, but each has its pitfalls.

“First, he could ask member states, who fund the organization, for additional resources, but Janet Yellen – the U.S. Treasury Secretary – said the U.S. would not back such a move. Given that the U.S. is the Bank’s largest shareholder, this makes a capital increase unlikely.

“A second option is for Banga to ease capital requirements by expanding the Bank’s lending portfolio without additional funds from member states, but this could put the Bank’s AAA credit rating at risk, especially given that many of the Bank’s debtors are experiencing debt crises of their own, limiting their ability to repay future debt.

“Third, Banga could reallocate funds traditionally offered to developing countries for poverty reduction and physical infrastructure towards climate and clean energy initiatives – for instance, lending to middle-income countries to help them transition away from coal. Unsurprisingly, the world’s poorest nations oppose such a move since it limits their ability to draw on the Fund’s resources to promote growth. More generally, developing nations have long been frustrated with the fact that the World Bank is governed primarily by rich Western countries who may put their own needs ahead of those of the developing world.”

The Rising Cyber Weapons Market Forecast, 2021-2031

Allied Market Research published a report, titled, “Cyber Weapons Market by Type (Defensive, Offensive), by Application (National Defense System, Public Utility, Automated Transportation system, Smart Power Grid, Industrial Control System, Financial System, Communication Network, Others), by End User (Government, BFSI, Corporate, Other): Global Opportunity Analysis and Industry Forecast, 2021-2031.” According to the report, the global cyber weapons market was valued at $9.2 billion in 2021 and is estimated to generate $23.7 billion by 2031, witnessing a CAGR of 10.1% from 2022 to 2031.

The use of cyber weapons has grown significantly as the U.S. attempts to develop new tools and capacities for national security and defence. The National Security Agency (NSA) and Cyber Command are at the center of the American government’s significant investments in the creation of cyberweapons. The development of cyber weapons has been fueled by both the rise in reliance on digital infrastructure and the threat of cyberattacks from other countries, criminal groups, and other entities. The U.S. government accessed crucial data from other countries using cyber weapons.

According to Interesting Engineering, in September 2022, the U.S. National Security Agency’s (NSA) cyber-warfare unit used 41 different types of weapons to steal critical technology data from a Chinese space and aviation university. This data included the configuration of critical network equipment, network management information, and critical operational information. Specific information regarding their creation and use is not made available to the general public because the use of cyber weapons by the U.S. is highly classified. Also, it is evident that cyber weapons have grown in importance as a tool in the U.S. national security strategy, which has fueled the growth of the cyber weapons business in the country.

On the basis of application the global cyber weapons market, is segmented into national defense systems, public utility, automated transportation systems, smart power grid, industrial control systems, financial systems, communication networks, and others. The development of international trade and the improvement of living standards have been facilitated by transportation infrastructure. Communities all over the world are connecting more than ever because of huge advancements in the flow of people and things. Yet, the presence of various control systems and auxiliary systems is increasing the interconnection and complexity of transportation networks.

The use of communications and IT has increased the effectiveness and functionality of transportation networks, but it has also raised the possibility of vulnerabilities. Attacks using cyber weapons on transportation networks can take a variety of shapes and have a range of possibilities and outcomes. A popular attack method that overburdens the system and causes a denial-of-service (DoS) for the entire system is traffic redirection to the server. A different type of cyber weapon effect is the theft of personal information, which can result in the displacement of expensive and/or dangerous commodities like explosives, radioactive agents, chemical, and biological chemicals, which is problematic for the transportation industry. Terrorists might utilise these materials, if they were stolen, to make bombs and other deadly weapons. Automated transportation systems that integrate cyber weapons are used to prevent or respond to such incidents, which supports the market’s growth.

Luxury Jewelry Market Size Is Projected To Reach USD 95.8 Billion By 2030

The Global Luxury Jewelry Market is anticipated to grow at a 7.85% CAGR and is estimated to be worth USD 95.78 Billion by the end of 2030.

Luxury Jewelry is well-known for its sophisticated designs and utilization of the most precious and uncommon unrefined substances. The Luxury Jewelry Market is vigorous and quickly developing. It’s also exceptionally divided and determined by buyer conduct and style. In the nearing years, huge market development is normal, from increasing extra cash and amplifying buyer consumption of extravagant merchandise. Assimilating the luxury gems industry with diversion and allure businesses has set new open doors for the market.

One of the main points herding the Luxury Jewelry Market is boosting discretionary cash flow. When the population’s discretionary cash flow develops, so does their purchasing power, bringing about amplified interest and utilization of luxury gems. Also, the traditions embracing extravagant metals are necessary components driving the interest in extravagant adornment pieces.

Amplifying interest in men’s adornments addresses viable freedom for the development of the market over the figure time frame. Generally, ladies are more minded than men toward buying luxury gems. Be that as it may, this pattern is remodelling, inferable from expanding the focal point of men on self-grooming and graceful allure.

The Global Luxury Jewelry Market is segmented into five regions; North America, Asia Pacific, Europe, Latin America, and the Middle East & Africa.

Europe represented the biggest portion of the global industry on the lookout, followed by North America. These areas comprise created nations with high per capita pay, just as significant luxury brands, filling the market development. Also, the high female workforce interest rate in these countries is a significant factor that adds to the development of the market. Besides, the Asia- Pacific area is expected to have a high CAGR during the estimated time frame.

Asia Pacific dominated the market for luxury jewelry and was considered for the largest revenue share of 65.4% in 2021. China and India are the two largest markets for luxury jewelry in the region. The latest styles and the requirement for high-quality jewelry among top customers are two eloquent drivers driving the market for luxury jewelry in this region.

The region is anticipated to see an increase in the popularity of online distribution. The majority of luxury jewelry is bought for special occasions or events like marriages and engagements. Further, due to continuous restrictions on international travel and the augmentation of domestic duty-free zones in China, demand from younger customers as well as those who shop domestically is anticipated to climb.

The global Luxury Jewelry Market’s prominent key players are Buccellati Holding, Italia SPA, Chopard International SA, Mikimoto & Co. Ltd., Bulgari S.P.A., Graff Diamond Corporation, Companies Financiere Richmond S.A., Tiffany & Co., Societe Cartier, Harry Winston Inc., Guccio Gucci S.P.A., Chanel, LVMH Moet Hennessy, Signet Jewellers, Cartier International SNC, Rajesh Exports Ltd.

Global Economy Heading For Weakest Period Of Growth Since 1990

The global economy is heading for the weakest period of growth since 1990 as higher interest rates set by the world’s top central banks drive up borrowing costs for households and businesses, the head of the International Monetary Fund has warned, a media outlet reported.

Kristalina Georgieva, the IMF’s managing director, said that a sharp slowdown in the world economy last year after the aftershocks of the Covid pandemic and the Russian invasion of Ukraine would continue in 2023, and risked persisting for the next five years, The Guardian reported.

In a curtain raiser speech before the fund’s spring meetings in Washington DC next week, she said that the global growth would remain about 3 per cent over the next five years – its lowest medium-term growth forecast since 1990.

“This makes it even harder to reduce poverty, heal the economic scars of the Covid crisis and provide new and better opportunities for all,” Georgieva said.

In a downbeat assessment as the world grapples with the worst inflation shock in decades, she said economic activity was slowing across advanced economies in particular. While there was some momentum from developing nations – including China and India – low-income countries were also suffering from higher borrowing costs and falling demand for their exports, the media outlet reported.

Ahead of the IMF publishing revised economic forecasts next week, Georgieva said global growth in 2022 had collapsed by almost half since the initial rebound from the Covid pandemic in 2021, sliding from 6.1 per cent to 3.4 per cent. With high inflation, rising borrowing costs and mounting geopolitical tensions, she said global growth was on track to drop below 3 per cent in 2023 and remain weak for years to come.

As many as 90 per cent of advanced economies would experience a decline in their growth rate this year, she warned, with activity in the US and the eurozone hit by higher interest rates, it added.

Comparing the challenge to “climbing one ‘great hill’ after another”, Georgieva said there were still more problems to overcome: “First was Covid, then Russia’s invasion of Ukraine, inflation and a cost of living crisis that hit everyone.”

“So far, we have proven to be resilient climbers. But the path ahead – and especially the path back to robust growth – is rough and foggy, and the ropes that hold us together may be weaker now than they were just a few years ago,” she was quoted as saying by the media outlet. (IANS)

India, China To Account For Half Of Global Economic Growth In 2023

The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 per cent growth.

The IMF chief on Thursday said that the world economy is expected to grow at less than 3 per cent this year, with India and China expected to account for half of global growth in 2023.

International Monetary Fund (IMF) managing director Kristalina Georgieva warned that a sharp slowdown in the world economy last year following the raging pandemic and Russia’s military invasion of Ukraine would continue this year.

The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 per cent growth, “our lowest medium-term growth forecast since 1990, and well below the average of 3.8 per cent from the past two decades,” she said.

“Some momentum comes from emerging economies — Asia especially is a bright spot. India and China are expected to account for half of global growth in 2023. But others face a steeper climb,” she explained.

“After a strong recovery in 2021 came the severe shock of Russia’s war in Ukraine and its wide-ranging consequences — global growth in 2022 dropped by almost half, from 6.1 to 3.4 per cent,” Georgieva said.

Georgieva said slower growth would be a “severe blow,” making it even harder for low-income nations to catch up.

“Poverty and hunger could further increase, a dangerous trend that was started by the COVID crisis,” she explained.

Her comments come ahead of next week’s spring meetings of the IMF and the World Bank, where policy-makers will convene to discuss the global economy’s most pressing issues.

The annual gathering will take place as central banks around the world continue to raise interest rates to tame galloping inflation rates.

About 90 per cent of advanced economies are projected to see a decline in their growth rates this year, she said.

For low-income countries, higher borrowing costs come at a time of weakening demand for their exports, she said.

Georgieva added that while the global banking system had “come a long way” since the 2008 financial crisis, “concerns remain about vulnerabilities that may be hidden, not just at banks but also non-banks. “Now is not the time for complacency.”

New Leaders At World Bank And BRICS Bank Have Different Outlooks

US President Joe Biden announced that the United States had placed the nomination of Ajay Banga to be the next head of the World Bank, established in 1944. There will be no other official candidates for this job since—by convention—the US nominee is automatically selected for the post. This has been the case for the 13 previous presidents of the World Bank—the one exception was the acting president Kristalina Georgieva of Bulgaria, who held the post for two months in 2019. Georgieva is currently the managing director of the IMF.

In the official history of the International Monetary Fund (IMF), J. Keith Horsefield wrote that US authorities “considered that the Bank would have to be headed by a US citizen in order to win the confidence of the banking community, and that it would be impracticable to appoint US citizens to head both the Bank and the Fund.” By an undemocratic convention, therefore, the World Bank head was to be a US citizen and the head of the IMF was to be a European national . Therefore, Biden’s nomination of Banga guarantees his ascension to the post.

A month later, the New Development Bank’s Board of Governors—which includes representatives from Brazil, China, India, Russia, and South Africa (the BRICS countries) as well as one person to represent Bangladesh, Egypt, and the United Arab Emirates—elected Brazil’s former president Dilma Rousseff to head the NDB, popularly known as the BRICS Bank.

The BRICS Bank, which was first discussed in 2012, began to operate in 2016 when it issued its first green financial bonds. There have only been three managing directors of the BRICS Bank—the first from India (K.V. Kamath) and then the next two from Brazil (Marcos Prado Troyjo and now Rousseff to finish Troyjo’s term). The president of the BRICS Bank will be elected from its members, not from just one country.

Banga comes to the World Bank, whose office is in Washington, D.C., from the world of international corporations. He spent his entire career in these multinational corporations, from his early days in India at Nestlé to his later international career at Citigroup and Mastercard. Most recently, Banga was the head of the International Chamber of Commerce, an “executive” of multinational corporations that was founded in 1919 and is based in Paris, France.

As Banga says, during his time at Citigroup, he ran its microfinance division, and, during his time at Mastercard, he made various pledges regarding the environment. Nonetheless, he has no experience in the world of development finance and investment. He told the Financial Times that he would turn to the private sector for funds and ideas. His resume is not unlike that of most US appointees to head the World Bank.

The first president of the World Bank was Eugene Meyer, who built the chemical multinational Allied Chemical and Dye Corporation (later Honeywell) and who owned the Washington Post. He too had no direct experience working on eradicating poverty or building public infrastructure. It was through the World Bank that the United States pushed an agenda to privatize public institutions. Men such as Banga have been integral to the fulfillment of that agenda.

Dilma Rousseff, meanwhile, comes to the BRICS Bank with a different resume. Her political career began in the democratic fight against the 21-year military dictatorship (1964-1985) that was inflicted on Brazil by the United States and its allies. During Lula da Silva’s two terms as president (2003-2011), Dilma Rousseff was a cabinet minister and his chief of staff.

She took charge of the Programa de Aceleração do Crescimento (Growth Acceleration Program) or PAC, which organized the anti-poverty work of the government. Because of her work in poverty eradication, Dilma became known popularly as the “mãe do PAC” (mother of PAC). A World Bank study from 2015 showed that Brazil had “succeeded in significantly reducing poverty in the last decade”; extreme poverty fell from 10 percent in 2001 to 4 percent in 2013. “[A]pproximately 25 million Brazilians escaped extreme or moderate poverty,” the report said.

This poverty reduction was not a result of privatization, but of two government schemes developed and established by Lula and Dilma: Bolsa Família (the family allowance scheme) and Brasil sem Misería (the Brazil Without Extreme Poverty plan, which helped families with employment and built infrastructure such as schools, running water, and sewer systems in low-income areas). Dilma Rousseff brings her experience in these programs, the benefits of which were reversed under her successors (Michel Temer and Jair Bolsonaro).

Banga, who comes from the international capital markets, will manage the World Bank’s net investment portfolio of $82.1 billion as of June 2022. There will be considerable attention to the work of the World Bank, whose power is leveraged by Washington’s authority and by its work with the International Monetary Fund’s debt-austerity lending practices.

In response to the debt-austerity practices of the IMF and the World Bank, the BRICS Health/Sciencecountries—when Dilma was president of Brazil (2011-2016)—set up institutions such as the Contingent Reserve Arrangement (as an alternative to the IMF with a $100 billion corpus) and the New Development Bank (as an alternative to the World Bank, with another $100 billion as its initial authorized capital).

These new institutions seek to provide development finance through a new development policy that does not enforce austerity on the poorer nations but is driven by the principle of poverty eradication. The BRICS Bank is a young institution compared to the World Bank, but it has considerable financial resources and will need to be innovative in providing assistance that does not lead to endemic debt. Whether the new BRICS Think Tank Network for Finance will be able to break with the IMF’s orthodoxy is yet to be seen.

De-Dollarization Gaining Momentum As Countries Seek Alternatives To Dollar

The U.S. dollar has dominated global trade and capital flows over many decades. However, many nations are looking for alternatives to the greenback to reduce their dependence on the United States.

This graphic catalogs the rise of the U.S. dollar as the dominant international reserve currency, and the recent efforts by various nations to de-dollarize and reduce their dependence on the U.S. financial system.

The global de-dollarization campaign is gaining momentum, as countries around the world seek alternatives to the hegemony of the US dollar.

The global de-dollarization campaign is gaining momentum, as countries around the world seek alternatives to the hegemony of the US dollar. China, Russia, Brazil, India, ASEAN nations, Kenya, Saudi Arabia, and the UAE are now using local currencies in trade.

The Dollar Dominance

The United States became, almost overnight, the leading financial power after World War I. The country entered the war only in 1917 and emerged far stronger than its European counterparts.

As a result, the dollar began to displace the pound sterling as the international reserve currency and the U.S. also became a significant recipient of wartime gold inflows.

The dollar then gained a greater role in 1944, when 44 countries signed the Bretton Woods Agreement, creating a collective international currency exchange regime pegged to the U.S. dollar which was, in turn, pegged to the price of gold.

Picture : Elements of visual capitalist

By the late 1960s, European and Japanese exports became more competitive with U.S. exports. There was a large supply of dollars around the world, making it difficult to back dollars with gold. President Nixon ceased the direct convertibility of U.S. dollars to gold in 1971. This ended both the gold standard and the limit on the amount of currency that could be printed.

Although it has remained the international reserve currency, the U.S. dollar has increasingly lost its purchasing power since then.

Russia and China’s Steps Towards De-Dollarization

Concerned about America’s dominance over the global financial system and the country’s ability to ‘weaponize’ it, other nations have been testing alternatives to reduce the dollar’s hegemony.

As the United States and other Western nations imposed economic sanctions against Russia in response to its invasion of Ukraine, Moscow and the Chinese government have been teaming up to reduce reliance on the dollar and to establish cooperation between their financial systems.

Since the invasion in 2022, the ruble-yuan trade has increased eighty-fold. Russia and Iran are also working together to launch a cryptocurrency backed by gold, according to Russian news agency Vedmosti. In addition, central banks (especially Russia’s and China’s) have bought gold at the fastest pace since 1967 as countries move to diversify their reserves away from the dollar.

How Other Countries are Reducing Dollar Dependence

De-dollarization it’s a theme in other parts of the world as well. In recent months, Brazil and Argentina have discussed the creation of a common currency for the two largest economies in South America.

In a conference in Singapore in January, multiple former Southeast Asian officials spoke about de-dollarization efforts underway. The UAE and India are in talks to use Rupees to trade non-oil commodities in a shift away from the dollar, according to Reuters.

For the first time in 48 years, Saudi Arabia said that the oil-rich nation is open to trading in currencies besides the U.S. dollar. Despite these movements, few expect to see the end of the dollar’s global sovereign status anytime soon. Currently, central banks still hold about 60% of their foreign exchange reserves in dollars.

India Now Has Third Highest Number Of Billionaires In The World

India, which has the third-most billionaires, with 169, had a more mixed year. Indian billionaires as a group – worth $675 billion – are $75 billion poorer than in 2022, as per the Forbes World’s Billionaires List 2023.

As per the list, Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd (RIL) is the richest India with a net worth of $63.4 billion. Ambani is the 9th richest in the world as per the list.

The Us still boasts the most billionaires, with 735 list members worth a collective $4.5 trillion. China (including Hong Kong and Macau) remains second, with 562 billionaires worth $2 trillion, followed by India, with 169 billionaires worth $675 billion.

Nearly half of all billionaires are poorer than they were a year ago, as per the Forbes World’s Billionaires List 2023.

Falling stocks, wounded unicorns, and rising interest rates translated into a down year for the world’s wealthiest people.

Globally, the list counted 2,640 ten-figure fortunes, down from 2,668 last year. Altogether, the planet’s billionaires are now worth $12.2 trillion, a drop of $500 billion from $12.7 trillion in March 2022.

Nearly half the list is poorer than a year ago, including Elon Musk, who falls from No. 1 to No. 2 after his pricey acquisition of Twitter helped sink Tesla shares.

Bernard Arnault, head of luxury goods giant LVMH, takes his place as the world’s richest person, marking the first time a citizen of France leads the ranking.

Despite a down year in the markets, rising inflation and war in Eastern Europe, more than 1,000 billionaires are actually richer than they were on Forbes’ 2022 list – some by tens of billions of dollars.

Luxury goods tycoon Arnault has had the best run. His net worth surged by $53 billion since last year, a bigger gain than anyone on the planet. Shares of his LVMH, which owns brands like Louis Vuitton, Christian Dior and Tiffany & Co, rose by 18 per cent on the back of strong demand. Now worth $211 billion, Arnault has taken the top spot on the World’s Billionaires ranking. It’s his first time at No 1 – and the first time a citizen of France has led the list.

Michael Bloomberg is ranked 7th on the list with a net worth of $ 84.5 billion. (IANS)

Bernard Arnault Tops Forbes’ Annual Billionaires List

Elon Musk has officially been dethroned from the top of Forbes’ annual “World’s Billionaire’s List.”  The Tesla and Twitter chief is now the second-richest billionaire, worth an estimated $180 billion, which is $39 billion less than the previous year. The top spot has been awarded to Bernard Arnault, the chairman of French luxury goods giant LVMH. His net worth increased more than $50 billion in the past year to $211 billion.

This shouldn’t come as a surprise to Musk, whose position wobbled on the Forbes’ “Real-Time Billionaires” list, which is updated daily, for the past several months. He and Arnault often switch places.

However, Tuesday’s list tracks his wealth annually. Forbes explained that Musk’s wealth had fallen because his $44 billion Twitter purchase, funded by Tesla shares, scared investors and sent Tesla stock sinking sharply last year. Tesla gained much of those losses back this year but is still significantly lower than before Musk bought Twitter.

Picture : Bussiness Insider

Forbes said that “Musk has mostly tweeted himself out of the top spot on the ranks” because Tesla shares are down 50% since his Twitter takeover a year ago. SpaceX is a bright spot for the billionaire, the magazine notes, since its valuation has increased $13 billion to $140 billion over the past year.

Amazon founder Jeff Bezos lost the most amount of money of any billionaire on the list ($57 billion), knocking him down from second position to third. The loss can be attributed to Amazon shares losing nearly 40% of their value last year.

As for Arnault, Forbes said the Frenchman had a “banner year” in 2022 because of record-high profits at the luxury conglomerate, which comprises Louis Vuitton, Christian Dior and Tiffany & Co. Shares of LVMH have climbed 25% over the past year and the patriarch has recently unveiled succession plans to his children.

Forbes said that the total number of billionaires on this year’s list fell to 2,640 (down from 2,668), marking the second-straight year of decline.

“It’s been another rare down year for the planet’s richest people,” said Chase Peterson-Withorn, Forbes senior editor of wealth, in a release. “Nearly half the list is poorer than they were 12 months ago, but a lucky few are billions — or even tens of billions — of dollars richer.”

More than 250 people who were on last year’s list didn’t appear on this year’s, including Kanye West, who lost his Adidas deal, and embattled FTX founder Sam Bankman-Fried, who lost 94% of his wealth in one day.

Money Can Buy Happiness, Scientists Say

People get happy as they earn more, according to a new study which overturns the dominant thinking that money cannot buy happiness.

The study published in Proceedings of the National Academy of Sciences paper, shows that, on average, larger incomes are associated with ever-increasing levels of happiness.

Two prominent researchers, Daniel Kahneman from Princeton University and Matthew Killingsworth from the University of Pennsylvania, surveyed 33,391 adults aged between 18 and 65 who live in the US, are employed and report a household income of at least $10,000 a year.

For the least happy group, happiness rose with income until $100,000, then showed no further increase as income grew. For those in the middle range of emotional well-being, happiness increases linearly with income, and for the happiest group the association actually accelerates above $100,000.

“In the simplest terms, this suggests that for most people larger incomes are associated with greater happiness,” said lead author Killingsworth.

“The exception is people who are financially well-off but unhappy. For instance, if you’re rich and miserable, more money won’t help. For everyone else, more money was associated with higher happiness to somewhat varying degrees,” he added.

The researchers said that the study shows both a happy majority and an unhappy minority exist.

For the former, happiness keeps rising as more money comes in; the latter’s happiness improves as income rises but only up to a certain income threshold, after which it progresses no further.

These findings also have real-world implications, according to Killingsworth.

For one, they could inform thinking about tax rates or how to compensate employees. And, of course, they matter to individuals as they navigate career choices or weigh a larger income against other priorities in life, Killingsworth said.

However, he adds that for emotional well-being money isn’t all. “Money is just one of the many determinants of happiness,” he says. “Money is not the secret to happiness, but it can probably help a bit.”  (IANS)

Biden’s $5 Trillion Tax Gambit Catches Congress By Surprise

President Biden went big in his $6.8 trillion annual budget proposal to Congress by calling for $5 trillion in tax increases over the next decade, more than what lawmakers expected after the president downplayed his tax agenda in earlier meetings.  It’s a risky move for the president as he heads into a tough reelection campaign in 2024.

Senate Democrats will have to defend 23 seats next year, including in Republican-leaning states such as Ohio, Montana and West Virginia, and Americans are concerned about inflation and the direction of the economy.

Republicans say Biden’s budget plan marks the return of tax-and-spend liberal politics; they warn higher taxes on corporations and the wealthy will hurt the economy.  Biden, however, thinks he can win the debate by pledging that he won’t raise taxes on anyone who earns less than $400,000 a year.

Sen. Mike Crapo (R-Idaho), the ranking member of the Senate Finance Committee, called Biden’s ambitious tax plan “jaw-dropping.”

“This is exactly the wrong approach to solving our fiscal problems,” he said of the $5 trillion aggregate total of proposed tax hikes. “I think this sets a new record, by far.”

Grover Norquist, the president of Americans for Tax Reform, a group that advocates for lower taxes, said “in dollar terms, it’s the largest tax increase in American history.”

A surprise and a ‘negotiating position’

Many lawmakers were expecting Biden to propose between $2 trillion and $2.5 trillion in tax increases, based on what he said in his State of the Union address on Feb. 7 and on what media outlets reported in the days before the White House unveiled its budget plan.

The $5 trillion in new tax revenues is more than what the president called for last year, when Democrats controlled the House and Senate.

In October of 2021, when Biden was trying to nail down a deal with Sen. Joe Manchin (D-W.Va.) on the Build Back Better agenda, he proposed a more modest $2 trillion in tax increases.

The headline number even surprised some Democratic policy experts, though they agree the federal government needs to collect more revenue.

“I didn’t expect to see a number that big, but I’m not alarmed by it. I think it’s a negotiating position,” said Jim Kessler, the executive vice president for policy at Third Way, a centrist Democratic think tank.

Biden told lawmakers at his State of the Union address that his budget plan would lower the deficit by $2 trillion and that he would “pay for the ideas I’ve talked about tonight by making the wealthy and big corporations begin to pay their fair share.”

The president then surprised lawmakers with a budget proposal to cut $3 trillion from deficit over the next decade and to do it almost entirely by raising tax revenues.

Biden has called for a 25 percent tax on the nation’s wealthiest 0.01 percent of families. He has proposed raising the corporate tax rate from 21 percent to 28 percent and the top marginal income tax rate from 37 percent to 39.6 percent. He wants to quadruple the 1 percent tax on stock buybacks. He has proposed taxing capital gains at 39.6 percent for people with income of more than $1 million.

Kessler noted that Biden’s budget doesn’t include significant spending cuts nor does it reform Social Security, despite Biden’s pledge during the 2020 election to reduce the program’s imbalance.  Kessler defended the president’s strategy of focusing instead on taxing wealthy individuals and corporations.

“The amount of unrealized wealth that people have at the top dwarfs anything that we’ve ever seen in the past,” he said.  “These are opening bids” ahead of the negotiations between Biden and Speaker Kevin McCarthy (R-Calif.) to raise the debt limit.

Senate Republicans are trying to chip away at Biden’s argument that his tax policy will only hit wealthy individuals and companies. “It’s probably not good for the economy. Last time I checked, most tax increases on the business side are passed on to consumers, and I think we need to control spending more than adding $5 trillion in new taxes,” said Sen. Lindsey Graham (R-S.C.).

Norquist, the conservative anti-tax activist, warned that if enacted, raising the corporate tax rate would reverberate throughout the economy.  “The corporate income tax, 70 percent of that is paid by workers and lower wages,” he said.

He said raising the top marginal tax rate and capital gains tax rate would hit small businesses that file under subchapter S of the tax code. “When you raise the top individual rate, you’re raising taxes on millions of smaller businesses in the United States,” he said. “Their employees end up paying that because that’s money they don’t have in the business anymore.”

How does Biden compare to predecessors?

Norquist noted that Obama and Clinton both cut taxes during their administrations, citing Clinton’s role in cutting the capital gains rate and Obama’s role in making many of the Bush-era tax cuts permanent.  “Both of them ran a more moderate campaign. This guy is going Bernie Sanders,” he said of Biden, comparing him to the liberal independent senator from Vermont.

Biden’s budget is a significant departure from the approach then-President Obama took 12 years ago, when he also faced a standoff with a GOP-controlled House over the debt.

In his first year working with a House GOP majority, Obama in his fiscal 2012 budget proposed cutting the deficit by $1.1 trillion, of which he said two-thirds should come from spending cuts and one-third from tax increases.  Obama later ramped up his proposal in the fall of 2011 by floating a plan to cut the deficit by $3.6 trillion over a decade and raise taxes by $1.6 trillion during that span.

Concerning for some Democrats

Republican strategists say they’ll use Biden’s proposed tax increases as ammunition against Democratic incumbents up for reelection next year.  National Republican Senatorial Committee Chairman Steve Daines (Mont.) said Biden’s budget provides “a contrast” ahead of the election.

Sen. Jon Tester (D-Mont.), who faces a tough re-election in a state that former President Trump with 57 percent of the vote, said he’s leery about trillions of dollars in new taxes.

Asked last week if he’s worried about how Montanans might react to Biden’s proposed tax increases, Tester replied: “For sure. I got to make sure that will work. I just got to see what he’s doing.”

McCaul says Jan. 6 tapes not going to show ‘tourism at the Capitol’  Porter on Silicon Valley Bank collapse: ‘You can’t bet on’ interest rates staying low forever

Manchin, who is up for reelection in another red state, has called on his fellow Democrats to focus more on how the federal budget has swelled from $3.8 trillion in 2013 to $6.7 trillion today.

“Can we just see if we can go back to normal? Where were we before COVID? What was our trajectory before that?” he asked in a CNN interview Thursday.   “How did it grow so quickly? How do we have so many things that are so necessary that weren’t before?” he said of the federal budget and debt.

The White House branded the House Freedom Caucus’ deficit plan as “tax breaks for the super wealthy and wasteful spending for special interests,” as the two sides continued to trade jabs amid an escalating debt ceiling battle.

“MAGA House Republicans are proposing, if spread evenly across affected discretionary programs, at least a 20 [percent] across the board cut,” White House Communications Director Ben LaBolt said in an initial analysis of the proposal.

LaBolt pointed to several typically Republican issue areas that would be impacted by such cuts, including law enforcement, border security, education and manufacturing.

“The one thing MAGA Republicans do want to protect are tax cuts for the super-wealthy,” he added. “This means that their plan, with all of the sacrifices they are asking of working-class Americans, will reduce the deficit by…$0.”

The Freedom Caucus on Friday unveiled its initial spending demands for a possible debt ceiling increase, as the potential for default looms this summer. The proposal would cap discretionary spending at fiscal 2022 levels for 10 years, resulting in a $131 billion cut from current levels. Defense spending would be maintained at current levels.

LaBolt claimed that the proposal would also defund police and make the border less secure, turning around two accusations that Republicans have frequently lobbed at the Biden administration.

Such spending cuts would, according to LaBolt’s analysis, eliminate funding for 400 state, local and tribal police officers and several thousand FBI agents and personnel and “deny the men and women of Customs and Border Protection the resources they need to secure our borders.”

He also criticized the Freedom Caucus’s calls to end President Biden’s student loan forgiveness plan and to rescind unspent COVID-19 and Inflation Reduction Act funds, claiming they would increase prescription drug and energy costs and ship manufacturing jobs overseas.

The analysis also accused the group of hard-line conservatives of making plans that would actually increase the federal deficit by $114 billion, and allow “the wealthy and big corporations to continue to cheat on their taxes.” Biden’s $6.8 trillion budget released on Thursday included tax hikes on the wealthy.

LaBolt’s 20 percent number represents a slight adjustment from Biden’s claim on Friday that the plan would require a 25 percent cut in discretionary spending across the board.

“If what they say they mean, they’re going to keep the tax cuts from the last president … no additional taxes on the wealthy — matter of fact reducing taxes — and in addition to that, on top of that, they’re going to say we have to cut 25 percent of every program across the broad,” Biden said during remarks on the economy. “I don’t know what there’s much to negotiate on.”

House Freedom Caucus Chairman Scott Perry (R-Pa.) hit back at the president on Friday, accusing him of misrepresenting their proposal. “For him to mention things like firefighters, police officers and health care — obviously, either he didn’t watch the press conference, he can’t read, or someone is, you know, got their hand up his back and they’re speaking for him, because those are just abject lies,” Perry told The Hill. “It’s the same old, you know, smear-and-fear campaign by the Biden administration.” (Courtesy: CNN)

Indian Startups With Millions Of Dollars Stuck In Silicon Valley Bank Failure

Indian startups that have millions of dollars stuck with the troubled Silicon Valley Bank are waiting for business hours in the US to resume Monday and could withdraw all their money from the bank en masse. The only thing that could stop that is if the US government manages to find a buyer for the beleaguered bank, reports said.

Courtesy a maneuver of the US government on March 12th, businesses with accounts at Silicon Valley Bank (SVB) will have full access to their deposits, unlike a previous measure where only an insured amount of $250,000 would have been immediately accessible. As of December 2022, SVB had $209 billion in total assets and about $175 billion in total deposits.

SVB collapsed Friday morning after a stunning 48 hours in which a bank run and a capital crisis led to the second-largest failure of a financial institution in US history. The chaos instigated by high interest rates led to an old-fashioned bank run on Thursday, in which depositors yanked $42 billion from SVB.

When the FDIC took control of the bank Friday, it said it would pay customers their insured deposits on Monday, which only covers up to $250,000. But there’s a lot of money – and influence – at stake. SVB provided financing for almost half of US venture-backed technology and health care companies. At the end of 2022, the bank said it had $151.5 billion in uninsured deposits, $137.6 billion of which was held by US depositors.

Though a lot of money may have come out during the bank run and customers could receive some uninsured funds as the government liquidates SVB, they are still unsure if they can recover all their cash.

Fearing a larger fall out from the bank collapse, the United States government mobilized immediately in response to the collapse of Silicon Valley Bank (SVB) and Signature Bank, working over the weekend to insure depositors who had more than $200 billion of venture capital and high-tech start-up money stored in the two banks.

But unlike the 2008 financial crisis, during which Congress passed new legislation in order to salvage the country’s largest banks, the current rescue plan is smaller in scale, pertains to only two banks, and isn’t additional taxpayer money — for now.

In order to make sure depositors can still withdraw funds from their accounts — the vast majority of which exceeded the $250,000 limit for standard insurance from the Federal Deposit Insurance Corporation (FDIC) — regulators say they’re pulling from a special fund maintained by the FDIC called the deposit insurance fund (DIF).

“For the two banks that were put into receivership, the FDIC will use funds from the deposit insurance fund to ensure that all of its depositors are made whole,” a Treasury official told reporters on Sunday night. “In that case the deposit insurance funded is bearing the risk. This is not funds from the taxpayer.”

Where the money comes from

The money in the DIF comes from insurance premiums that banks are required to pay into it as well as interest earned on funds invested in U.S. bonds and other securities and obligations.

This is why some observers have been saying that the term “bailout” shouldn’t be used in reference to the current government intervention — because it’s bank money plus interest that’s being used to insure depositors, and it’s only being administered by the federal government.

But standing behind the DIF is the “the full faith and credit of the United States government,” according to the FDIC, meaning that if the DIF runs out of money or encounters a problem, the Treasury could call on taxpayers as a next resort.

This is not an impossibility. The DIF had a $125 billion balance as of the last quarter of 2022 and SVB reported $212 billion in assets in the same quarter. Treasury officials sounded confident on Sunday night the money in the DIF would be more than enough to cover SVB’s deposits.

The Fed steps in for backup

To settle fears of a potential shortfall, the Federal Reserve announced an additional line of credit known as a Bank Term Funding Program, offering loans of up to one year to banks, credit unions, and other types of depository institutions. For collateral, the Fed will take U.S. bonds and mortgage-backed securities, and the line of credit will be backed up by $25 billion from the Treasury’s $38 billion Exchange Stabilization Fund.

“Both of these steps are likely to increase confidence among depositors, though they stop short of an FDIC guarantee of uninsured accounts as was implemented in 2008,” analysts for Goldman Sachs wrote in a Sunday note to investors.

“The Dodd-Frank Act limits the FDIC’s authority to provide guarantees by requiring congressional passage of a joint resolution of approval, which is only marginally easier than passing a new legislation. Given the actions announced today, we do not expect near-term actions in Congress to provide guarantees,” they wrote.

Even as the US government scrambles to find a buyer for the bank, SVB’s UK arm was sold to HSBC for £1, the Bank of England and the British government announced Monday morning. Sheila Bair, former chairperson of the US Federal Deposit Insurance Corporation (FDIC) – which took over the bank after it was shut down –told the US press that finding a buyer for SVB was “the best outcome.”

India impact

While the British arm of SVB has managed to find a buyer in the UK, that is unlikely to calm Indian startups since they primarily have deposited their money with the US-based SVB, which is headquartered in New York.

The fallout of SVB’s collapse could be far-reaching. Startups may be unable to pay employees in the coming days and venture capital firms may be unable to raise funds. The tech industry is the biggest customer of SVB with a large number of Indian startups, especially in the SaaS (software as a service) sector that services US clients, having accounts at the bank.

Additional loans

Instead of a total government bailout that would have required taxpayer money, the United States’ Federal Reserve announced that it would make available additional loans to eligible depository institutions to help assure that banks have the ability to meet the needs of all their depositors.

A new entity called the Bank Term Funding Program (BTFP) will be created and it will offer loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions. Those taking advantage of the facility will be asked to pledge high-quality collateral such as Treasuries, agency debt and mortgage-backed securities.

While relatively unknown outside Silicon Valley, SVB was among the top 20 American commercial banks, with $209 billion in total assets at the end of last year, according to the FDIC. It’s the largest lender to fail since Washington Mutual collapsed in 2008.

$8.8 Bn Lost To Scams In 2022

The consumers in the US lost nearly $8.8 billion to scams in 2022, an increase of more than 30 per cent over the previous year, a new report has shown. According to the US Federal Trade Commission (FTC), consumers reported losing more money to investment scams — more than $3.8 billion — than any other category in 2022.

That amount more than doubles the amount reported lost in 2021.  Moreover, the report showed that imposter scams caused the second-highest loss amount — $2.6 billion, up from $2.4 billion in 2021.

Prizes, sweepstakes, lotteries, investment-related scams, and business and job opportunities rounded out the top five fraud categories.  Nearly 2.4 million consumers reported fraudulent activity on their accounts last year, most commonly imposter scams, followed by online shopping scams, the report said.

Earlier this month, the FTC released a similar report, saying romance scammers received a hefty payout last year, involving 70,000 victims who lost a combined $1.3 billion.

The report showed that romance scammers often use dating apps to target people looking for love.  Nearly 40 per cent of people who lost money to a romance scam last year, said the contact started on social media, while 19 per cent said it started on a website or app.

Many people mentioned that the scammer then quickly moved the conversation to WhatsApp, Google Chat or Telegram. (IANS)

When Is The US Recession Expected?

(AP) — A majority of the nation’s business economists expect a U.S. recession to begin later this year than they had previously forecast, after a series of reports have pointed to a surprisingly resilient economy despite steadily higher interest rates.

Fifty-eight percent of 48 economists who responded to a survey by the National Association for Business Economics envision a recession sometime this year, the same proportion who said so in the NABE’s survey in December. But only a quarter think a recession will have begun by the end of March, only half the proportion who had thought so in December.

The findings, reflecting a survey of economists from businesses, trade associations and academia, were released Monday.

A third of the economists who responded to the survey now expect a recession to begin in the April-June quarter. One-fifth think it will start in the July-September quarter.

The delay in the economists’ expectations of when a downturn will begin follows a series of government reports that have pointed to a still-robust economy even after the Federal Reserve has raised interest rates eight times in a strenuous effort to slow growth and curb high inflation.

In January, employers added more than a half-million jobs, and the unemployment rate reached 3.4%, the lowest level since 1969.

And sales at retail stores and restaurants jumped 3% in January, the sharpest monthly gain in nearly two years. That suggested that consumers as a whole, who drive most of the economy’s growth, still feel financially healthy and willing to spend.

At the same time, several government releases also showed that inflation shot back up in January after weakening for several months, fanning fears that the Fed will raise its benchmark rate even higher than was previously expected. When the Fed lifts its key rate, it typically leads to more expensive mortgages, auto loans and credit card borrowing. Interest rates on business loans also rise.

Tighter credit can then weaken the economy and even cause a recession. Economic research released Friday found that the Fed has never managed to reduce inflation from the high levels it has recently reached without causing a recession.

G-20 Finance Ministers To Address Global Economic Concerns In Bengaluru

(AP) Top financial leaders from the Group of 20 leading economies are gathering in Bengaluru this week to tackle myriad challenges to global growth and stability, including stubbornly high inflation and surging debt.

India is hosting the G-20 financial conclave for the first time in 20 years. Later in the year it will convene its first summit of G-20 economies. The meetings offer the world’s second most populous country a chance to showcase its ascent as an economic power and its status as a champion of developing nations.

The gathering of finance ministers and central bank governors takes place just a year after Russia invaded Ukraine, setting off a cascade of shocks to the world economy, chief among them decades-high inflation. U.S. Treasury Secretary Janet Yellen is expected to address the global economic impacts of the war while at the G-20 meetings.

India is among the countries treading lightly between the Western nations and Russia, eager to claim more global sway but wary of becoming embroiled in antagonisms as its economy benefits from purchases of discounted Russian crude oil.

“India has a growing leadership role globally,” Information Minister Anurag Thakur, said Wednesday, reiterating Indian Prime Minister Narendra Modi’s stance that “today’s era is not of war. Dialogues and discussions are the only way forward.”

As host of more than 200 G-20 meetings in 28 cities leading up to the summit in November, Modi is expected to use that role to burnish India’s stature as a leader in fighting climate change and to act as a bridge between the interests of industrialized nations and developing ones.

₹ 305 Crore Of Jewelry Seized From Joyalukkas

The Enforcement Directorate has seized assets worth ₹ 305.84 crore of the popular jewellery chain Joyalukkas on Friday, days after five of the company’s premises were raided by the probe agency. The ED has accused the jewellery chain of violating provisions of the Foreign Exchange Management Act.

The case relates to a huge amount of cash transferred to Dubai from India through Hawala channels and subsequently invested in Joyalukkas Jewellery LLC, Dubai which is 100 per cent owned by Joy Alukkas Verghese. On Tuesday, the company had withdrawn its ₹ 2,300 crore initial public offering or IPO saying it needed more time to incorporate substantial changes to its financial results.

The attached assets include 33 immovable properties valued at ₹ 81.54 crore consisting of land and a residential building in Shobha City, Thrissur. Three bank accounts valued at ₹ 91.22 lakh, three fixed deposits amounting to ₹ 5.58 crore and Joyalukkas shares worth 217.81 crores have also been seized by the Enforcement Directorate.

The company had plans to refile its IPO documents “at the earliest, subject to market conditions,” Chief Executive Baby George told Reuters on Tuesday, without elaborating further.

Post a comment The jewellery retailer, which focuses mainly on Southern India, is the latest to delay or pull its IPO plans amid market volatility and stubbornly high inflation. The company operates showrooms across roughly 68 cities.

US Supreme Court Hears Case On Students Loan Forgiveness

(AP) — The United States Supreme Court won’t have far to look if it wants a personal take on the “crushing weight” of student debt that underlies the Biden administration’s college loan forgiveness plan. Justice Clarence Thomas was in his mid-40s and in his third year on the nation’s highest court when he paid off the last of his debt from his time at Yale Law School.

Thomas, the court’s longest-serving justice and staunchest conservative, has been skeptical of other Biden administration initiatives. And when the Supreme Court hears arguments Tuesday involving President Joe Biden’s debt relief plan that would wipe away up to $20,000 in outstanding student loans, Thomas is not likely to be a vote in the administration’s favor.

But the justices’ own experiences can be relevant in how they approach a case, and alone among them, Thomas has written about the role student loans played in his financial struggles.

A fellow law school student even suggested Thomas declare bankruptcy after graduating “to get out from under the crushing weight of all my student loans,” the justice wrote in his best-selling 2007 memoir, “My Grandfather’s Son.” He rejected the idea.

It’s not clear that any of the other justices borrowed money to attend college or law school or have done so for their children’s educations. Some justices grew up in relative wealth. Others reported they had scholarships to pay their way to some of the country’s most expensive private institutions.

Picture : TheUNN

Of the seven justices on the court who are parents, four have signaled through their investments that they don’t want their own children to be saddled with onerous college debt, and have piled money into tax-free college savings accounts that might limit any need for loans.

Chief Justice John Roberts and Justice Neil Gorsuch have the most on hand, at least $600,000 and at least $300,000, respectively, according to annual disclosure reports the justices filed in 2022. Each has two children.

Justices Amy Coney Barrett, who has seven children, and Ketanji Brown Jackson, who has two, also have invested money in college-savings accounts, in which any earnings or growth is tax free if spent on education. None of the justices would comment for this story, a court spokeswoman said.

Thomas wrote vividly about his past money woes in his up-from-poverty story, recounting how a bank once foreclosed on one of his loans because repayment and delinquency notices were sent to his grandparents’ house in Savannah, Georgia, instead of Thomas’ home at the time in Jefferson City, Missouri.

Thomas was able to take out another loan to repay the bank only because his mentor, John Danforth, then-Missouri attorney general and later a U.S. senator, vouched for him.

Thomas noted that he signed up for a tuition postponement program at Yale in which a group of students jointly paid for their outstanding loans according to their financial ability, with those earning the most paying the most.

At the time, Thomas’ first wife, Kathy, was pregnant. “I didn’t know what else to do, so I signed on the dotted line, and spent the next two decades paying off the money I borrowed during my last two years at Yale,” Thomas wrote.

When he was first nominated to be a federal judge in 1989, Thomas reported $10,000 in outstanding student loans, according to a news report at the time. The Biden administration has picked the same number as the amount of debt relief most borrowers would get under its plan.

Personal experience can shape the justices’ questions in the courtroom and affect their private conversations about a case, even if it doesn’t figure in the outcome.

“It is helpful to have people with life experiences that are varied just because it enriches the conversation,” Justice Sonia Sotomayor has said. Sotomayor, like Thomas, also grew up poor. She got a full scholarship to Princeton as an undergraduate, she has said, and went on to Yale for law school, as Thomas did.

Keeping people from avoiding the kinds of difficult choices Thomas faced is a key part of the administration’s argument for loan forgiveness. The administration says that without additional help, many borrowers will fall behind on their payments once a hold in place since the start of the coronavirus pandemic three years ago is lifted, no later than this summer.

Under a plan announced in August but so far blocked by federal courts, $10,000 in federal loans would be canceled for people making less than $125,000 or for households with less than $250,000 in income. Recipients of Pell Grants, who tend to have fewer financial resources, would get an additional $10,000 in debt forgiven.

The White House says 26 million people already have applied and 16 million have been approved for relief. The program is estimated to cost $400 billion over the next three decades.

The legal fight could turn on any of several elements, including whether the Republican-led states and individuals suing over the plan have legal standing to go to court and whether Biden has the authority under federal law for so extensive a loan forgiveness program.

Nebraska and other states challenging the program argue that far from falling behind, 20 million borrowers would get a “windfall” because their entire student debt would be erased, Nebraska Attorney General Michael Hilgers wrote in the states’ main Supreme Court brief.

Which of those arguments resonate with the court may become clear on Tuesday.

When she was dean of Harvard Law School, Justice Elena Kagan showed her own concern about the high cost of law school, especially for students who were considering lower-paying jobs.

Kagan established a program that would allow students to attend their final year tuition-free if they agreed to a five-year commitment to work in the public sector. While that program no longer exists, Harvard offers grants to students for public service work.

At the time the program was created, Kagan said she wanted students to be able to go to work where they “can make the biggest difference, but that isn’t the case now.” Instead, she said: “They often go to work where they don’t want to work because of the debt burden.”

Ajay Banga Nominated By Biden To Lead World Bank

President Joe Biden has nominated a former boss of Mastercard with decades of experience on Wall Street to lead the World Bank and oversee a shake-up at the development organization to shift its focus to the climate crisis.

Ajay Banga, an American citizen born in India, comes a week after David Malpass, a Donald Trump appointee, quit the role. The World Bank’s governing body is expected to make a decision in May, but the US is the Washington-based organisation’s largest shareholder and has traditionally been allowed to nominate without challenge its preferred candidate for the post.

Malpass, who is due to step down on 30 June, was nominated by Trump in February 2019 and took up the post officially that April. He is known to have lost the confidence of Biden’s head of the US Treasury, Janet Yellen, who with other shareholders wanted to expand the bank’s development remit to include the climate crisis and other global challenges.

Ajay Banga, former president and CEO of Mastercard and current vice chairman of the private equity firm General Atlantic, is Biden’s nomination as the next president of the World Bank.

Biden, in a statement Thursday, called Banga – a native of India and former chairman of the International Chamber of commerce – “uniquely equipped” to lead the World Bank, a global development institution that provides grants and loans to low-income countries to reduce poverty and spur development.

Biden touted Banga’s work leading global companies that brought investment to developing economies and his record of enlisting the public and private sectors to “tackle the most urgent challenges of our time, including climate change.”

The Biden administration is looking to recalibrate the focus of the World Bank to align with global efforts to reduce climate change.

Malpass, nominated by former President Donald Trump, still had a year remaining on his five-year term as president. Malpass came under fire when he said, “I’m not a scientist,” when asked at a New York Times event in September whether he accepts the overwhelming scientific evidence that the burning of fossil fuels has caused global temperatures to rise. Former Vice President Al Gore, who called Malpass a “climate denier,” was among several well-known climate activists to call for his resignation.

Banga was the top executive at Mastercard from 2010 to 2020. He has served as a co-chair of Vice President Kamala Harris’ Partnership for Central America, which has sought to bring private investment to the region.

Treasury Secretary Janet Yellen applauded Biden’s pick. She said Banga understands the World Bank’s goals to eliminate poverty and expand prosperity are “deeply intertwined with challenges like meeting ambitious goals for climate adaptation and emissions reduction, preparing for and preventing future pandemics, and mitigating the root causes and consequences of conflict and fragility.”

Banga still needs confirmation by the bank’s board to become president. It’s unclear whether there will be additional nominees from other nations.

Facing Economic Headwinds, AAHOA Members Urge Continued Support of Hotel Industry

Laura Lee Blake, President & CEO of the Asian American Hotel Owners Association (AAHOA), released the following statement in response to ongoing reports that economic headwinds could force more hotel owners into serious financial challenges, including bankruptcies – such as a recent filing by a leading Burger King Franchisee – and out-of-court restructurings this year:

“Our members have taken extraordinary steps over the past three years, and, in numerous cases, counted on pandemic relief aid to weather the worst of COVID-19. Many continue to operate on thin margins with smaller workforces. The tight labor market has made it difficult to hire.

“Hotels and other small businesses are the backbone of local economies, and AAHOA Members – the vast majority of whom are first- and second-generation immigrants – are resilient. However, staffing shortages, rising interest rates, and the possibility of a recession this year, even a mild one, are creating further strain on an industry that is still struggling to recover from a devastating pandemic.

Picture : Hospitality Net

The Chapter 11 bankruptcy filing by TOMS King reminds us that small businesses, including restaurants and hotels, continue to suffer long-term impacts from COVID-19 and an overall uncertain economic environment with high inflation and labor shortages. As President Biden noted in his State of the Union speech this week, the entrepreneurial spirit is very much alive with a record number of Americans starting small businesses. But the outlook for many of those businesses remains cloudy.

“AAHOA Members need certainty and continued federal assistance while these economic headwinds rage. While restaurateurs received grants from the Restaurant Revitalization Fund, hoteliers have not seen the same support. Many need solutions to address, among other things, the pending payments due on COVID-19 Economic Injury Disaster Loans (EIDLs) by waiving interest and/or deferring for another year.

“Additionally, the government should lift constraints on H2-B visas by expanding eligibility to include India so there are options available for addressing employers’ needs for additional seasonal workers. Finally, for all franchisees, the Federal Trade Commission should thoughtfully review the Franchise Rule, including extending the Rule beyond the presale disclosure to protect small-business owners’ investments. AAHOA Members also support the 12 Points of Fair Franchising to promote long-term, mutually beneficial relationships between Franchisors and Franchisees that will help sustain the franchise business model and grow the hospitality sector.”

AAHOA is the largest hotel owners association in the world, with Member-owned properties representing a significant part of the U.S. economy. AAHOA’s 20,000 members own 60% of the hotels in the United States and are responsible for 1.7% of the nation’s GDP. More than one million employees work at AAHOA member-owned hotels, earning $47 billion annually, and member-owned hotels support 4.2 million U.S. jobs across all sectors of the hospitality industry. AAHOA’s mission is to advance and protect the business interests of hotel owners through advocacy, industry leadership, professional development, member benefits, and community engagement.

Stocks Tumbles 20% After US Research Group Accuses Adani Group Of Stock Manipulation

Shares of Adani Enterprises plunged on Friday as a scathing report by a US-based short seller triggered a massive selloff in the conglomerate’s listed firms, casting doubts on the company’s record $2.45 billion secondary offering, reported news agency Reuters.

The selloff in Adani’s corporate empire accelerated on Friday, erasing more than $50 billion of market value in less than two sessions as Asia’s richest man struggles to contain the fallout, reported news agency Bloomberg.

Adani Group’s share prices of its seven listed companies nosedived last week, after Hindenburg Research stated that it assumed a short position, in particular securities of the conglomerate. In response, Adani Group dismissed the allegations as ‘baseless’, termed the report as ‘malicious combination of selective misinformation and stale,’ and is contemplating legal action against the American investor.

“If Adani is serious, it should also file suit in the U.S. where we operate. We have a long list of documents we would demand in a legal discovery process,” Hindenburg said while also asserting that it fully stands by its findings.

As per reports, Hindenburg Research said that the company hasn’t addressed a single substantive issue raised in the 32,000-word report. “At the conclusion of our report, we asked 88 straightforward questions that we believe give the company a chance to be transparent. Thus far, Adani has answered none of these questions,” the short seller has reportedly said.

The report alleges that the Indian group, headed by Asia’s richest man, Gautam Adani, had engaged in brazen stock manipulation and accounting fraud. It contains details of the Adani family’s alleged shell companies in tax havens across Mauritius, the United Arab Emirates, and the Caribbean, established for facilitating money laundering and tax evasion through siphoning money from the group’s listed entities.

Following the accusations, Adani Transmission shares crashed above 19 percent and Adani Gas tumbled 19.1 percent in their biggest downward trajectory since March 2020, while Adani Green Energy depreciated around 16 percent on the BSE during today’s early trading session. The share prices of Ambuja Cements, NDTV, and ACC, the Indian conglomerate’s recent acquisitions, also declined 7.71 percent, 4.98 percent, and 7.26 percent respectively, on Wednesday, according to reports.

The Adani Group announced on Jan 26, 2023, that it is considering taking legal action against Hindenburg Research for a report from January 23, 2023, that accused the Indian conglomerate of “brazen stock manipulation and accounting fraud scheme.”

Jatin Jalundhwala, legal head for Adani Group, said, “The maliciously mischievous, unresearched report published by Hindenburg Research on 24 Jan 2023 has adversely affected the Adani Group, our shareholders and investors.”

The report was released ahead of the Rs 20,000 crore follow-on public offer (FPO) by Adani Enterprises, the flagship company of the Adani Group. The FPO had raised Rs 5,984.9 crore from 33 anchor investors on Wednesday.

A foreign brokerage house has said that Indian banks have an exposure of Rs 81,200 crore to Adani Group, whose group debt is Rs 2 lakh crore (about $24 billion), according to media reports.

Analysts said the listed Adani firms lost more than Rs 3 lakh crore in market capitalisation on Friday and more than Rs 4.10 lakh crore since Wednesday.

The three companies recently acquired by the Adani group — Ambuja Cement, ACC and NDTV — also wilted. The tycoon has seen over $7 billion of his personal wealth wiped out since the start of the year, according to the Bloomberg Billionaires’ Index which has yet to factor in last week’s meltdown.

India Continues As World’s Fastest-Growing Economy With 5.8% Growth Rate

United Nations– India will remain the fastest-growing major economy recording a growth of 5.8 per cent this year, while the rest of the world will grow by a paltry 1.9 per cent, the UN said on Thursday.

The UN’s World Economic Situation and Prospects (WESP) report sliced off 0.2 per cent from the 6 per cent gross domestic product growth projection made last May without affecting India’s rank as the country faces headwinds from the global economy.

Overall, the report said: “Growth in India is expected to remain strong at 5.8 per cent, albeit slightly lower than the estimated 6.4 per cent in 2022, as higher interest rates and a global slowdown weigh on investment and exports.” Next year, the UN expects India’s economy to grow by 6.7 per cent.

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The WESP gave a positive picture of India’s jobs scene, noting that its “unemployment rate dropped to a four-year low of 6.4 per cent in India, as the economy added jobs both in urban and rural areas in 2022”. For the world, the WESP forecast is 1.9 per cent this year and rising to 2.7 per cent next year.

In New Delhi, India’s President Droupadi Murmu credited India’s economic performance to “its leadership. India has been among the fastest-growing major economies because of the timely and proactive interventions of the government. The ‘Aatmanirbhar Bharat’ initiative, in particular, has evoked great response among the people at large,” Murmu said in her Republic Day speech.

China, which came in second, is projected to grow by 4.8 per cent this year and 4.5 next year, after a 3% growth in 2022. The US economy, which grew by 2.9% this year is projected to grow by 0.4% this year and 1.7 per cent the next.

For South Asia as a whole, the report said the region’s “economic outlook has significantly deteriorated due to high food and energy prices, monetary tightening and fiscal vulnerabilities” and it forecast a 4.8 percent growth year and 5.9 percent next year.

This was buoyed by India as the report said: “The prospects are more challenging for other economies in the region. Bangladesh, Pakistan, and Sri Lanka sought financial assistance from the International Monetary Fund (IMF) in 2022.”

Rashid attributed the Indian economy’s growth to three factors: falling unemployment that signals strong domestic demand; easing of inflation, and lower import bills.

He said that the “unemployment rate has come down significantly in the last four years” to 6.4 per cent and “that means the domestic demand has been pretty strong”.

The WESP said that this occurred because “the economy added jobs both in urban and rural areas in 2022”.

“The inflation pressure also has eased quite significantly,” Rashid said with the year-on-year inflation rate to be 5.5 per cent this year and 5 per cent next year.

“That means that the central bank would not have to be aggressive over monetary tightening,” he said.

India has also benefitted to from lower imports, especially energy import cost that has been lower than in previous years, he added.

“I think this is a sustainable growth rate for India, given India also has a significant number of people living in poverty. So this would be a great boost if India can sustain this growth rate in the near term,” Rashid said.

He also pointed to two risk factors for India’s economy mainly emanating from the global situation.

One is from higher interest rates that would raise the debt servicing cost which has exceeded 20 per cent of the budget, he said.

“That is a significantly high debt servicing cost and that would probably have some drag on the growth prospect,” he said.

The second risk is from global external demands falling.

If Europe and the US go into a very slow growth mode resulting in lower global exports, the world economy may suffer, Rashid said.

“But on the balance, we believe that Indian economy is on a strong footing given the strong domestic demand in the near term,” he said.

For South Asia as a whole, the report said the region’s “economic outlook has significantly deteriorated due to high food and energy prices, monetary tightening and fiscal vulnerabilities” and it forecast a 4.8 per cent growth year and 5.9 per cent next year.

This was buoyed by India as the report said, “The prospects are more challenging for other economies in the region. Bangladesh, Pakistan and Sri Lanka sought financial assistance from the International Monetary Fund (IMF) in 2022.”

Bangladesh, Pakistan and Sri Lanka have gone to the International Monetary Fund for help. Rashid said, “We call for greater international support in this difficult time for countries, especially countries that are facing significant challenges with debt burden and again we call for more meaningful restructuring of debt.”

“It might be more prudent and may make more economic sense to re-profile the debt, reschedule the debt, (the) external debt burden,” he said. But he said that the assistance should not go into consumption, but into investment in “productive capacity (that) can be very important driver of both short-term recovery and long-term resilience”.

Richest 1% Have Two-Thirds Of New Wealth Created In The Last Two Years

Over the last two years, the richest 1% of people have accumulated close to two-thirds of all new wealth created around the world, a new report from Oxfam says.

A total of $42 trillion in new wealth has been created since 2020, with $26 trillion, or 63%, of that being amassed by the top 1% of the ultra-rich, according to the report. The remaining 99% of the global population collected just $16 trillion of new wealth, the global poverty charity says.

“A billionaire gained roughly $1.7 million for every $1 of new global wealth earned by a person in the bottom 90 percent,” the report, released as the World Economic Forum kicks off in Davos, Switzerland, reads.

It suggests that the pace at which wealth is being created has sped up, as the world’s richest 1% amassed around half of all new wealth over the past 10 years.

Oxfam’s report analyzed data on global wealth creation from Credit Suisse, as well figures from the Forbes Billionaire’s List and the Forbes Real-Time Billionaire’s list to assess changes to the wealth of the ultra-rich.

The research contrasts this wealth creation with reports from the World Bank, which said in October 2022 that it would likely not meet its goal of ending extreme poverty by 2030 as the Covid-19 pandemic slowed down efforts to combat poverty.

Gabriela Bucher, executive director of Oxfam International, called for taxes to be increased for the ultra-rich, saying that this was a “strategic precondition to reducing inequality and resuscitating democracy.”

In the report’s press release, she also said changes to taxation policies would help tackle ongoing crises around the world.

“Taxing the super-rich and big corporations is the door out of today’s overlapping crises. It’s time we demolish the convenient myth that tax cuts for the richest result in their wealth somehow ‘trickling down’ to everyone else,” Bucher said.

Coinciding crises around the world that feed into each other and produce greater adversity together than they would separately are also referred to as a “polycrisis.” In recent weeks, researchers, economists and politicians have suggested that the world is currently facing such a crisis as pressures from the cost-of-living crisis, climate change, and other pressures are colliding

5% Of Indians Own More Than 60% Of The Country’s Wealth

Just 5% of Indians own more than 60% of the country’s wealth, while the bottom 50% possess only 3% of wealth, according to Oxfam India’s latest report ‘Survival of the Richest: The India story’, which will be released today at the World Economic Forum in Davos.

An appeal

Oxfam India, an NGO that works in the sectors of child education, women empowerment and addressing inequality, through this report, seeks to urge the Union finance minister to implement progressive tax measures, such as wealth tax, in the upcoming Union Budget, it said in a press statement.

India currently does not have any wealth tax – which essentially refers to tax levied on one’s entire property in all forms.

India used to have a system under which a tax was levied at 1% on the net wealth in excess of Rs 30 lakh under the Wealth Tax Act 1957 – which was abolished in 2015. The taxation system, however, was not progressive in nature, as it did not have any slabs to ensure that the percentage of tax increased with an increase in wealth beyond the flat mark of Rs 30 lakh.

India’s richest

The total number of billionaires in India increased from 102 in 2020 to 166 billionaires in 2022.

The report highlights that the combined wealth of India’s 100 richest has touched $660 billion (Rs 54.12 lakh crore) – an amount that could fund the entire Union Budget for more than 18 months.

“While the poor face severe hardships, the wealth of the top 10 richest in India stands at Rs 27.52 lakh crore ($335.7 billion) – an increase of around 32.8% compared to 2021,” the statement said.

The wealth of the top 10 richest can finance the Ministry of Health and Family welfare and Ministry of Ayush for more than 30 years, India’s Union education budget for 26 years, or can fund MGNREGA for 38 years, it said.

Factors That Could Determine How 2023 Shapes Up For Global Equity Markets

Optimists may point out that the rate-hiking peak is on the horizon, possibly in March, with money markets expecting the Fed to switch into rate-cutting mode by the end of 2023. A Bloomberg News survey found 71 per cent of top global investors expect equities to rise in 2023.

Vincent Mortier, chief investment officer at Amundi, Europe’s largest money manager, recommends defensive positioning for investors going into the New Year. He expects a bumpy ride in 2023 but reckons “a Fed pivot in the first part of the year could trigger interesting entry points”.

But after a year that blindsided the investment community’s best and brightest, many are bracing for further reversals. One risk is that inflation stays too high for policymakers’ comfort and rate cuts don’t materialise. A Bloomberg Economics model shows a 100 per cent probability of recession starting by August, yet it looks unlikely central banks will rush in with policy easing when faced with cracks in the economy, a strategy they deployed repeatedly in the past decade.

“Policymakers, at least in the US and Europe, now appear resigned to weaker economic growth in 2023,” Deutsche Bank Private Bank’s global chief investment officer Christian Nolting told clients in a note. Recessions might be short but “will not be painless”, he warned.

Big tech troubles

A big unknown is how tech mega-caps fare, following a 35 per cent slump for the Nasdaq 100 in 2022. Companies such as Meta Platforms Inc. and Tesla Inc. have shed some two-thirds of their value, while losses at Inc. and Netflix Inc. neared or exceeded 50 per cent.

Expensively-valued tech stocks do suffer more when interest rates rise. But other trends that supported tech’s advance in recent years may also go into reverse – economic recession risks hitting iPhone demand while a slump in online advertising could drag on Meta and Alphabet Inc.

In Bloomberg’s annual survey, only about half the respondents said they would buy the sector – selectively.

“Some of the tech names will come back as they have done a great job convincing customers to use them, like Amazon, but others will probably never reach that peak as people have moved on,” Kim Forrest, chief investment officer at Bokeh Capital Partners, told Bloomberg Television.

Earnings recession

Previously resilient corporate profits are widely expected to crumble in 2023, as pressure builds on margins and consumer demand weakens.

“The final chapter to this bear market is all about the path of earnings estimates, which are far too high,” according to Morgan Stanley’s Mike Wilson, a Wall Street bear who predicts earnings of $180 per share in 2023 for the S&P 500, versus analysts’ expectations of $231.

The upcoming earnings recession may rival 2008, and markets are yet to price it in, he said.

China, a turning point

Beijing’s early-December decision to dismantle stringent Covid curbs seemed like a turning point for MSCI’s China Index, whose 24 per cent drop was a major contributor to global equity market losses in 2022.

Options boom

Technicals are increasingly driving day-to-day equity moves, with the S&P 500 witnessing below-average stock turnover in 2022, but explosive growth in very short-term options trading.

Professional traders and algorithmic-powered institutions have piled into such options, which were until recently dominated by small-time investors. That can make for bumpier markets, causing sudden volatility outbreaks such as the big intraday swing after October’s hot US inflation print.

Finally, with the S&P 500 failing to break out from its 2022 downtrend, short-term speculation remains skewed to the downside. But should the market turn, it will add fuel to the rebound.

India’s Billionaire Club Shrinks To 120, Gautam Adani Tops Rich List

In comparison, Ambani, who topped the list last year, has seen a 2.5 per cent decline in his family’s net worth to $101.75 billion from $104.4 billion a year ago

The year 2022 saw many lose the ‘billionaire’ tag, though some of the richest Indian promoters have become even richer. According to the report, the number of promoters with a net worth of over $1 billion has declined to 120 this year from an all-time high of 142 at the end of 2021.

Picture : Bussiness Standard

The billionaire promoters’ combined wealth is down 8.8 percent to around $685 billion ( ₹56.5 trillion) from $751.6 billion ( ₹56.62 trillion) a year ago, said the report, although it added that the fall in rupee terms is not significant owing to the currency depreciating against the US dollar.

Gautam Adani has been an outperformer in 2022, replacing Mukesh Ambani as India’s richest person. Adani’s net worth stands at $135.7 billion, up 69.6 percent from $80 billion last year, it said, citing Bloomberg data, that also highlights that he is also the richest person in Asia and third-richest in the world.

Meanwhile, Ambani has seen a 2.5 percent decline in his family’s net worth to $101.75 billion from $104.4 billion a year ago, added the report.

In fact, only three of the top 10 billionaires – Adani, Dilip Shanghvi of Sun Pharma, and Sunil Mittal of Bharti Airtel – saw an increase in the net worth this year, as per the report.

Mittal’s gains can be attributed to a rise of Bharti Airtel, which benefited from tariff hikes announced by mobile services operators, clarity over regulatory issues, and a stable business environment, mentioned the report.

While, gains for Shanghvi were driven by factors like an improved performance of Sun Pharma, which benefited from a better show in its specialty business in North America and growth in its India formulations business, added BS.

Radhakishan Damani of Avenue Supermarts (DMart), who is India’s third-richest promoter, saw a 21 percent decline in the net worth at $23.8 billion in 2022.

Other promoters in the top 10 list include Shiv Nadar of HCL Technologies, Azim Premji of Wipro and Uday Kotak of Kotak Mahindra Bank.

World Economy To Face More Pain In 2023 After A Gloomy Year

After the Covid-induced economic crisis of 2020, consumer prices began to rise in 2021 as countries emerged from lockdowns or other restrictions  This was supposed to be the comeback year for the world economy following the Covid pandemic.

Instead, 2022 was marked by a new war, record inflation and climate-linked disasters. It was a “polycrisis” year, a term popularized by historian Adam Tooze. Get ready for more gloom in 2023.

Picture : The Grocer

“The number of crises has increased since the start of the century,” said Roel Beetsma, professor of macroeconomics at the University of Amsterdam “Since World War Two we have never seen such a complicated situation,” he told AFP.

After the Covid-induced economic crisis of 2020, consumer prices began to rise in 2021 as countries emerged from lockdowns or other restrictions.

Central bankers insisted that high inflation would only be temporary as economies returned to normal. But Russia’s invasion of Ukraine in late February sent energy and food prices soaring.

Many countries are now grappling with cost-of-living crises because wages are not keeping up with inflation, forcing households to make difficult choices in their spending.

“Everything has become more expensive, from cream to wine and electricity,” said Nicole Eisermann from her stand at the Frankfurt Christmas market.

Central banks played catch-up. They started to raise interest rates this year in an effort to tame galloping inflation — at the risk of tipping countries into deep recessions, since higher borrowing costs mean slower economic activity. Inflation has finally started to slow down in the United States and the eurozone.

Careful spending

Consumer prices in the Group of 20 developed and emerging nations are expected to reach eight percent in the fourth quarter before falling to 5.5 percent next year, according to the Organisation for Economic Cooperation and Development.

The OECD encourages governments to provide aid to bring relief to households.

In the 27-nation European Union, 674 billion euros ($704 billion) have been earmarked so far to shield consumers from high energy prices, according to the Bruegel think tank.

Germany, Europe’s biggest economy and the most dependent on Russia energy supplies, accounts for 264 billion euros of that total.

One in two Germans say they now only spend on essential items, according to a survey by EY consultancy.

“I am very careful but I have a lot of children and grandchildren,” said Guenther Blum, a shopper at the Frankfurt Christmas market.

Rising interest rates have also hurt consumers and businesses, though US Federal Reserve chairman Jerome Powell signalled last week that the pace of hikes could ease “as soon as” December.

He warned, however, that policy will probably have to remain tight for some time to restore price stability.

For her part, European Central Bank president Christine Lagarde sent a clear signal that the ECB would maintain its tightening policy, saying that eurozone inflation had yet to peak.

Economists expect Germany and another major eurozone economy, Italy, to fall into recession. Britain’s economy is already shrinking. Rating agency S&P Global foresees stagnation for the eurozone in 2023.

But the International Monetary Fund still expects the world economy to expand in 2023, with growth of 2.7 percent. The OECD is forecasting 2.2-percent growth.

The coronavirus pandemic, meanwhile, remains a wildcard for the global economy.

China’s zero-Covid policy restrained growth in the world’s second biggest economy, but the authorities have started to relax restrictions following nationwide protests.

Climate costs

But for Beetsma, the biggest crisis is climate change, which is “happening in slow motion”.

Natural and man-made catastrophes have caused $268 billion in economic losses so far in 2022, according to reinsurance giant Swiss Re. Hurricane Ian alone cost an estimated insured loss of $50-65 billion. Floods in Pakistan resulted in $30 billion in damage and economic loss this year.

Governments agreed at United Nations climate talks (COP27) in Egypt in November to create a fund to cover the losses suffered by vulnerable developing countries devastated by natural disasters.

But the COP27 summit ended without new commitments to phase out the use of fossil fuels, despite the need to cut greenhouse gas emissions and slow global warming.

“It is not an acute crisis but a very long-term crisis, protracted,” Beetsma said. “If we don’t do enough this will hit us in unprecedented scale.” (This story has not been edited by  staff and is auto-generated from a syndicated feed.)

After Mass Layoffs, Facebook Offers Immigration Help To H-1B Visa Holders

As large-scale layoffs begin at Facebook’s parent company Meta, employees on work visas such as H-1Bs are now faced with uncertainty over their immigration status, with CEO Mark Zuckerberg acknowledging “this is especially difficult if you’re here on a visa” and offering support to those impacted.

Meta announced that it is laying off 11,000 employees or 13 per cent of its workforce, with Zuckerberg describing it as “some of the most difficult changes we’ve made in Meta’s history.” US-based technology companies hire a large amount of H-1B workers, the majority of whom come from countries such as India.

The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in speciality occupations that require theoretical or technical expertise. Technology companies depend on it to hire tens of thousands of employees each year from countries like India and China.

“I’ve decided to reduce the size of our team by about 13 per cent and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1,” Zuckerberg said in a letter to employees.

“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted,” he said.

Acknowledging that “there is no good way to do a layoff”, Zuckerberg said the company hopes to get all the relevant information to those impacted as quickly as possible and then do whatever it can to support them through this.

Among the measures being put in place by the company in the US to help those impacted by the layoffs is “immigration support”.

“I know this is especially difficult if you’re here on a visa. There’s a notice period before termination and some visa grace periods, which means everyone will have time to make plans and work through their immigration status. We have dedicated immigration specialists to help guide you based on what you and your family need,” he said.

H-1B visa holders can stay and work in the US for a period of three years, extended by another three years.

They are then required to leave the country unless their employee sponsors them for permanent residency, known as the Green Card, the backlog for which runs into decades. If H-1B visa holders lose their jobs, they only have a “grace period” of 60 days to find an employee willing to sponsor their H-1B, failing which they will be required to leave the US.

A Washington-based reporter Patrick Thibodeau wrote on Twitter Monday that “Facebook layoffs may hit H-1B workers hard. Facebook is classified as H-1B “dependent,” meaning 15 per cent or more of its workforce is on the visa. When visa holders lose their job, they may have to leave the US if they don’t quickly find a new employer sponsor.” Other support measures announced by Meta include severance pay for 16 weeks of base pay plus two additional weeks for every year of service, with no cap; coverage of healthcare cost for people and their families for six months and three months of career support with an external vendor, including early access to unpublished job leads.

He said outside the US, support will be similar, and the company will follow up soon with separate processes that take into account local employment laws.

In his explanation of how the company got to the point where it had to undertake such drastic cost-cutting measures, Zuckerberg said the world rapidly moved online at the start of the Covid pandemic and the surge of e-commerce led to outsized revenue growth.

“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected,” he said.

Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused Meta’s revenue to be much lower than he had expected. “I got this wrong, and I take responsibility for that,” he said.

Zuckerberg said in the new environment, the company needs to become more capital efficient.

“We’ve shifted more of our resources onto a smaller number of high-priority growth areas – like our AI (Artificial Intelligence) discovery engine, our ads and business platforms, and our long-term vision for the metaverse.

“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go,” he said.

Stock Market Rally After Inflation Report Shows High Prices May Ease

Stocks surged in their biggest rally in two years last week, after a better-than-expected inflation report showed that the galloping price increases that consumers have endured all year are beginning to slow.

The Dow Jones Industrial Average rose 1200 points, or more than 3.7%, over the course of the day to close at 33,715.37, the highest since the middle of August. The Nasdaq soared more than 7% and the S&P 500 more than 5%.

Consumer prices in October were 7.7% higher than a year ago, according to the Labor Department. That’s a slower pace of inflation than September’s 8.2% rate. It’s also the smallest year-on-year increase in prices since January.

And the price hikes between September and October were significantly smaller than forecasters had expected.

Wall Street greeted the report as as a sign that the Federal Reserve may ease up on the gas in its current drive to contain inflation.

The Fed has been raising interest rates aggressively in an effort to tamp down demand and bring prices under control. After ordering jumbo rate hikes of 0.75 percentage points at each of its last four meetings, the Fed is widely expected to adopt a smaller increase of 0.5 points when policymakers next meet in December.

Wall Street analysts said that Thursday’s inflation reading will give the central bank good reason to go with a smaller hike.

Excluding volatile food and energy costs, annual inflation was 6.3% in October — down from 6.6% the month before.

Housing costs accounted for nearly half the monthly price increase, but rents showed their smallest increase in five months. Food costs rose at the slowest pace in 10 months. Gasoline prices rose 4% in October but remain well below their peak price in early summer.

“Today’s report shows that we are making progress on bringing inflation down,” President Biden said in a statement. “It will take time to get inflation back to normal levels – and we could see setbacks along the way – but we will keep at it and help families with the cost of living.”

While prices still rose a swift 7.7 percent over the past 12 months, the annual inflation rate was less than the 7.9 percent expected by economists and lower than the 8.2 percent rate seen in September. The 0.4 percent monthly increase in the consumer price index was also less than the 0.6 percent increase that economists had projected.

Inflation is still near levels not seen since the 1980s and hindering American households. Prices that have already shot up are continuing to rise for food, shelter and other basic needs, pinching the economy along the way.

But the October decline in inflation brought some relief to those struggling to get by.

Used car prices

One of the first pockets of the economy hit by the inflation surge is finally seeing prices come down.

“The run-up in prices for used cars is now unwinding as supply of cars is recovering and demand is hit hard by higher interest rates,” wrote Preston Caldwell, head of U.S. economics for Morningstar Research Services, in a Thursday analysis.

Prices for used cars and trucks fell 2.4 percent in October alone, marking the fourth straight month of declines. While prices are still far above pre-pandemic levels, Americans searching for a used car or truck may finally see relief after months of shortages and supply chain snarls.

Used car and truck prices soared throughout much of 2020 and 2021 as supply chain issues and shortages hindered automobile manufacturing around the world. But supply chains made progress in recovery, making it easier for buyers to trade in older cars for new ones.

Cheaper household supplies

Prices for a wide range of basic household goods fell in October as consumers spent more time bargain-hunting and less money on items once in higher demand.

Picture : WAMU

Household supplies and furnishings fell 0.2 percent in October broadly, with prices for appliances, dishware, furniture and bedding falling sharply. Many of these goods were popular among locked-down American households during the depths of the pandemic and limited by supply chain dysfunction, which boosted their prices.

“Retail promotions are a huge opportunity in inflation. Maybe it’s adjusting your promotions, eliminating profit-draining promotions altogether, or addressing lumpy inventory issues,” said Matt Pavich, senior director at consulting firm Revionics.

“Retailers are looking at all of their options right now to correct issues earlier in the supply chain,” he continued. “Pricing is the fastest lever to do this.”

Clothing and accessories

Prices for apparel dropped 0.7 percent in October after rising 4.1 percent over the past year. The biggest drops came in prices for jewelry, infant and toddler clothes, women’s outerwear and men’s formalwear.

The decline in apparel prices comes before a holiday shopping season that will be closely watched by economists for signs of fading consumer power.

The National Retail Federation expects spending from Nov. 1 to Dec. 31 could total as much as $960 billion, which would shatter records. Sales rose 13.5 percent between 2020 and 2021, but the group expects that pace of growth to slow after a booming year for the sector.

Household gas

Households with heating or cooking gas may have caught a break in October as prices for utility gas service plunged 4.6 percent. It was one of the few parts of the energy sector to see prices drop in October, a month when fuel oil prices shot up nearly 20 percent and gasoline prices rose 4 percent.

High prices for oil and gas have been one of the major forces behind the inflationary surge. While prices were destined to rise from 2020 levels — when global lockdowns curtailed energy usage — the war in Ukraine has fueled intense volatility in energy markets.

“We expect some easing in pipeline pressures and rather large negative base-year effects inside the energy complex that will bring down both headline and core inflation through the middle of next year,” wrote Joe Brusuelas, chief economist at audit and tax firm RSM, in a Thursday analysis.

A slower increase in food prices

Food prices are still on the rise, due largely to the war in Ukraine limiting the global supply of wheat and fertilizer. Prices for food are up 10.9 percent on the year, and groceries alone are up 12.4 percent since last October.

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The October inflation report showed that while prices are still increasing, they are moving up at a slower rate — the first step toward a plateau.

Prices for food rose 0.6 percent in October, down from increases of 0.8 percent in August and September and three straight months of increases of at least 1 percent from May to July.

Monthly inflation in groceries also fell from 0.7 percent in September to 0.4 percent in October.

IRS Announces New Tax Brackets And Standard Deduction For 2023

Inflations isn’t fun, but it could help lower your taxes in 2023. The IRS has announced the new 2023 tax brackets and the new standard deduction.

The Internal Revenue Service recently announced its inflation adjustments to the standard deduction and federal income tax brackets for 2023. Knowing these numbers can allow you to make some smart tax-planning moves before the year’s end. If you expect to be in a low bracket next year, you may want to try and delay some income to next year. On the other hand, if you expect to be in a high tax bracket in 2023, you may want to delay some tax deductions until next year.

New Standard Deduction For 2023

There is some good news for taxpayers regarding inflation; in 2023, the standard deductions will increase. For married couples filing jointly, the new standard deduction for 2023 will be $27,700. This is a jump of $1,800 from the 2022 standard deduction.

The 2023 standard deduction for single taxpayers and married filing separately will be $13,850. This is a jump of $900 from the 2022 standard deduction.

You may be wondering what is the standard deduction and what does it mean? The standard deduction is the number of tax deductions you can subtract from your income before you begin to owe taxes. For example, if you were a single filer and made $13,850 in 2023, you could take the standard deduction and not owe any federal income taxes. You may still owe payroll taxes and state taxes.

For taxpayers 65 or older, you can add $1,500 to your standard deduction for 2023 if you are married. This increases to $1,850 if you are unmarried or a surviving spouse (age 65 or older in 2023).

Changes To the Federal Tax Rates For 2023

The income that fits in each tax bracket for 2023 is the only change. Put more plainly; the federal marginal tax rates will remain the same in 2023. This is unless some new legislation was to change tax rates or brackets further. Each tax bracket has been adjusted for 2023 to account for inflation.

High inflation has led the IRS to increase the federal income tax brackets. This increase in tax bracket could help lower your 2023 taxes.

2023 Tax Brackets for Single Filers

37%: incomes higher than $578,125

35%: incomes over $231,250

32%: incomes over $182,100

24%: incomes over $95,375

22%: incomes over $44,725

12%: incomes over $11,000

10%: incomes of $11,000 or less

2023 Tax Brackets for Married Couples Filing Jointly

37%: incomes higher than $693,750

35%: incomes over $462,500

32%: incomes over $364,200

24%: incomes over $190,750

22%: incomes over $89,450

12%: incomes over $22,000

10%: incomes of $22,000 or less

The marriage penalty for federal income taxes doesn’t kick in until you reach the 37% tax bracket. If you are itemizing your tax deductions, there are other limitations to tax breaks you can benefit from, as well as more examples of the marriage penalty in the tax code. For example, the $10,000 SALT cap is the same whether you are single or married.

The higher your income, the more valuable proactive tax planning guidance can be. As a Los Angeles Financial Advisor, California residents can face a combined state and federal income tax rate beyond 50% on income that falls into the highest tax brackets. The tax burden can be tough on business owners who must pay both sides of the Social Security payroll taxes. Work with your tax pro and Certified Financial Planner™ to ensure you optimize your retirement plans and minimize taxes along the way.

Indian Economy Shows Great Resilience Post Covid; Marches Strongly Towards 2047 Goal

India has one of the most promising economies globally. India has surpassed Britain to become the world’s fifth largest economy. The manufacturing MSME- start-up ecosystem has boosted the economy and created new job opportunities.

As a result of these efforts, the Indian economy has recovered from the negative effects of Covid, and the country is on its way to becoming the world’s third and $5 trillion economy.

The good news is that the eight key industries that drive the country’s economy — coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement, and electricity — have grown by 4.5 per cent.

This simply means that the Indian economy has returned to normalcy and is progressing.

India has the big goal of becoming developed and self-reliant by 2047, when the country attains its 100th independence day.

The Indian economy has recovered from the pandemic and is back on track. In the first quarter of the current fiscal year, GDP increased by 13.5 per cent (April-June).

At constant prices, the country’s GDP was Rs 32.46 lakh crore in the first quarter of the fiscal year 2021-22, while it grew by 13.5 per cent to Rs 36.85 lakh crore in the first quarter of the current fiscal year.

Simultaneously, the common index of eight core industries, which contribute significantly to the country’s economy, has increased by 4.5 per cent since July 2021.

The final growth rate of the eight core industries was revised to 9.5 per cent in April 2022, up from 8.4 per cent previously.

Prime Minister Narendra Modi’s ongoing efforts to strengthen the economy are bearing fruit.

These latest figures show that the Indian economy has recovered from the pandemic’s negative effects.

The country is now rapidly moving towards becoming self-reliant.

Picture : Prescious Kashmir

India has surpassed Germany to become the world’s fourth largest automobile market. In 2021, India sold 37.6 lakh vehicles, while Germany sold 29.7 lakh vehicles. August is the fifth month in a row that more than 3 lakh cars have been sold in India.

In the global market, Indian products are now emerging as the first choice. India is the world’s leading exporter of electronics, petroleum, and engineering goods.

Exports of these products increased by 17 per cent this year compared to the same period in 2021 (April-August).

The Indian government recognised an important fact when Covid first appeared — the economic impact of this epidemic differed from the effect of the previous epidemic because the Covid epidemic was designed to have a negative impact on demand.

As a result, there was concern that the pandemic would have long-term economic consequences for the country.

However, the government’s tight machinery was in place to ensure that such a situation did not last long.

As a result, a number of reform initiatives were launched. Labour reforms, agricultural reforms, changing the definition of a micro, small, and medium-sized enterprise, and implementing the production-linked incentive scheme were among them.

These reforms attempted to formalise the country’s economy to a large extent.

The identification of shell units, the Insolvency and Bankruptcy Code and the goods and services tax were all critical steps in bringing the economy under a set of rules and regulations.

The benefit of this was that there was an attempt to shape the economy in terms of shape, type, and behavior. Simultaneously, a focus on job creating industries was sought.

The government had a clear vision that the country needed to address not only the immediate challenges but also ensure the recovery of economy and infrastructure development, both of which are critical to achieving the objectives.

The new generation of the country is now taking the risk of innovation, learning from mistakes, and getting involved with new energy.

Employment in MSMEs has increased by 116 per cent as compared to 2019-20.

It is the charisma of the growing youth power that drives the small scale industry, that is, India’s MSME and start-up ecosystem is growing at the fastest rate in the world. (IANS)

$2.04 Billion Powerball Jackpot Ticket Was Sold In California

A lone winning ticket for the record $2.04 billion Powerball lottery jackpot was sold in Altadena, California, lottery officials said Tuesday, making the lucky ticket holder the winner of the largest lottery prize ever, media reports stated.

The ticket was sold at a Joe’s Service Center, the California Lottery said on Twitter. Results posted to similarly said there was one winner who matched all six numbers in California – the odds of which were 1 in 292.2 million, according to the Multi-State Lottery Association.

The winning numbers, which were announced Tuesday morning after Monday night’s drawing was delayed, were 10-33-41-47-56 and the Powerball was 10, according to the association.

The odds of winning the jackpot in Monday’s draw are one in 292.2 million, according to Powerball. The premier lottery game has had no winner in more than three months after 40 consecutive drawings.

Here is what you need to know about the lottery and its big prize.

The previous world-record jackpot was set in 2016, when $1.59bn was split between three Powerball players.

“Like the rest of America, and the world, I think we’re all eager to find out when this historic jackpot will eventually be won,” Drew Svitko, the chair of the Powerball Product Group, said in a statement.

While no-one claimed Saturday’s winning prize, there were 16 tickets matching the five main numbers to win $1m each. Another ticket – drawn in Kentucky – won $2m , while 219 tickets across the US won $50,000 and 51 won $150,000.

Only one other Powerball jackpot reached 41 consecutive drawings. The 2021 drawing ended with a nearly $700m winner in California.

Picture: CBS

How do you play Powerball?

Powerball tickets cost $2 to buy, and a winner has the option to choose a lump sum payment, which is currently estimated at $929. Winners can also choose to receive the full amount in an annuity paid over 29 years, but almost all winners opt for the upfront cash option.

The game, which began in 1992, is played in 45 of the 50 US states, the capital city of Washington, and in the US territories of Puerto Rico and the Virgin Islands.

A ticket must match all six numbers drawn to score the jackpot. If multiple winners select the same combination of numbers in the draw, they will equally share the jackpot.

The winnings are subject to federal taxes of between 24% and 37%, and, in most cases, state taxes. Only 10 states do not have state taxes. In several locations – such as New York City – the winnings are also subject to municipal taxes.

According to BBC, the jackpot was last won on August 3rd, when the owner of the winning ticket opted for a lump sum payment of $206.9m. In July, a “Mega Millions” ticket sold in Illinois won $1.34bn.

Players have to be at least 18 years old, but some states have set the age limit at 21. Some states also allow winners to remain anonymous.

Why is there such a big jackpot?

This record-breaking jackpot is being attributed in part to changes the lottery made in 2015. To boost sales, it made smaller prizes easier to win – but the jackpot harder.

It tweaked the game, notably including having players choose five numbers from one to 69 instead of from one to 59 under the previous rules.

Players also select the Powerball – their sixth number – from one to 26, instead of the previous one to 35 .

That increased the odds for the grand prize from one in 175.2 million to the current 1 in 292.2 million.

It’s not the first time to lottery the game rules were adjusted – it has made regular changes in its 30-year history, and recently added the Monday night draw.

Can Powerball be played outside the US?

Powerball tickets can be purchased from abroad online. Participants do not need to be US citizens nor residents.

Winnings, however, need to be claimed in the state to which a ticket belongs.

For US residents, this means that those living in states that don’t participate in the Powerball would need to travel to buy a ticket and claim winnings.

Similar rules are in place for other lottery games.

In 2015, a 37-year old Iraqi man from Baghdad won a $6.4m (£5.5m) “Megabucks” jackpot in Oregon after purchasing the ticket through a Malta-based website.

Lottery winners have also been reported in a number of other countries, including Australia and El Salvador.

Who owns Powerball?

Powerball is coordinated by the Multi-State Lottery Association (MUSL), a US non-profit comprised of 38 state lotteries from across the US, Washington DC, Puerto Rico and the US Virgin Islands. It was formed in 1987 and launched its first game – Lotto America – the following year.

The organisation provides a number of services to its constituent members, such as game development, central accounting and the actual conduct of lottery drawings.

Money from tickets sales goes both towards the prize money and the rest to the government-run state lotteries that participate in Powerball, as well as to retailer commissions.

According to the North American Association of State and Provincial Lotteries, US lottery sales totalled over $91bn in the 2019 fiscal year.

10 Richest People Who Ever Lived

The likes of Elon Musk, Bill Gates and Gautam Adani may be worth billions, but their riches pale in comparison to the entrepreneurs, emperors and rulers of days past

Russia’s Catherine the Great and Joseph Stalin sat atop trillions, Mali’s Mansa Musa had insane amounts of gold, and Genghis Khan founded the world’s biggest empire – so who’s. 

Forbes estimates the serial tech entrepreneur’s fortune at be about US$220 billion, thanks to his portfolio of companies including electric car manufacturer Tesla, rocket producer SpaceX and tunnelling project The Boring Company.

Yet, despite his astonishing net worth, the 51-year-old’s billions don’t even come close to the wealth of the richest people in history – proportionally speaking.. Yup, that means Amazon’s Jeff Bezos, Microsoft’s Bill Gates and Indian tycoons Gautam Adani and Mukesh Ambani also don’t make the cut.

It is however important to note that the further we go back in time, the harder it is to put an accurate or fair figure on how relatively rich an individual was as, well, times were much different back then. Wealth was based on gold, land, salt and power – and not all academics agree on the valuations. But we’ve done our best stocktaking, and according to several sources, and the work of a number of historians, these are richest people to ever walk the earth – after factoring in inflation and the worth of commodities in the day – in 2022 dollars.

  1. John D. Rockefeller (1839-1937)

Estimated net worth today: US$340 billion

According to numerous sources including Celebrity Net Worth, John D. Rockefeller built up a fortune that would be worth around US$340 billion in today’s money.

The American business magnate and philanthropist established the Standard Oil Company in 1870, which controlled 90 per cent of US refineries and pipelines by the early 1880s, according to the website History. While the New Yorker faced controversy for monopolising of the industry, Rockefeller also played a big part in giving back to the community, donating about US$500 million to educational, religious and scientific causes through the Rockefeller Foundation.

  1. Andrew Carnegie (1835-1919)

Estimated net worth today: US$372 billion states that this Scottish-born industrialist stacked up the equivalent of around US$372 billion by leading the expansion of the American steel industry in the 19th and early 20th century.

He eventually sold his Carnegie Steel company in 1901 to JP Morgan for US$480 million (in the currency of the day). Carnegie also donated 90 per cent of his earnings to philanthropic causes by the time of his death in 1919.

  1. Catherine the Great (1729-1796)

Estimated net worth today: US$1.5 trillion

The Russian monarch inherited and controlled a vast network of land, wealth and political power, after assuming the throne in 1762 – investments worth 5 per cent of Russian GDP, or the equivalent of US$1.5 trillion today, according to Luxuo.

  1. Augustus Caesar (63BC-14AD)

Estimated net worth today: US$4.6 trillion

the founder of the Roman empire needs no introduction as one of the greatest and most famous rulers in history.

Augustus Caesar’s empire produced around 25 to 30 per cent of the world’s global output, and around a fifth of that was his own personal wealth, according to Luxuo. That means he would have been worth around US$4.6 trillion today.

  1. Joseph Stalin (1878-1953)

Estimated net worth today: US$7.5 trillion says that it’s virtually impossible to separate Stalin’s wealth from the wealth of the Soviet Union, with economists claiming that his complete control of the USSR makes him one of the richest people to ever live.

Data from The Organisation for Economic Co-operation and Development (OECD) indicates that in 1950, the USSR made up about 9.5 per cent of the global economic output (about US$7.5 trillion in today’s money).

Though Stalin didn’t technically “own” the money, he did have the power to “control the wealth of the country”, points out George O. Liber, a professor of history at the University of Alabama at Birmingham.

  1. Empress Wu (624-705)

Estimated net worth today: US$16 trillion

he first and only female emperor of China was intelligent, politically savvy – and famous for being ruthless when it came to bumping off her opponents. She ruled the country when the economy of China accounted for around 23 per cent of global GDP, which would be around US$16 trillion today. Despite her sometimes controversial methods of wielding power, she nevertheless built up the country’s wealth by trading tea and silk on the Silk Road, and oversaw the expansion of Imperial China into central Asia. Some call her the richest woman ever.

Genghis Khan, John D. Rockefeller, Mansa Musa, Empress Wu and Catherine the Great all had immense wealth. Photos: Handout; Shutterstock; @Dr_TheHistories/Twitter; Mary Evans Picture Library; @catherinee_thee_greatt/Instagram

  1. Akbar I (1542-1605)

Estimated net worth today: US$21 trillion

Akbar I lived far more extravagantly than European leaders with equivalent wealth at the time. 

Abu’l-Fath Jalal-ud-din Muhammad Akbar, popularly known as Akbar the Great, was the third emperor to rule the Mughal empire.

Thanks to his ability to extract wealth from the population, claims that he ruled over an empire valued at 25 per cent of the global GDP. Comparable to the wealth of Elizabethan England at the time, the extravagance of Akbar I’s lifestyle nevertheless easily “surpassed that of the European society”, according to economic historian Angus Maddison.

  1. Emperor Shenzong (1048-1085)

Estimated net worth today: US$30 trillion

The sixth emperor of China’s Song dynasty ruled over an immensely economically powerful empire worth 25 to 30 per cent of the world’s GDP at the time, according to Historians claim that the kingdom was light-years ahead of European governments when it came to effective tax collection, and its technological innovations and centralised form of governance also added to their wealth.

  1. Genghis Khan (1162-1227)

Estimated net worth today: US$120 trillion

It is believed that Genghis Khan was so powerful, and his Mongol empire so wide-reaching, that his DNA can be found in as many as 16 million men today, according to a 2003 scientific report.

And, having created the largest empire of all time – which covered most of China and Central Asia during his lifetime, and stretched as far as Poland and Vietnam afterward – The Richest estimates that he would have been worth about US$120 trillion in today’s money.

It is believed that Genghis Khan was so powerful, and his Mongol empire so wide-reaching, that his DNA can be found in as many as 16 million men today, according to a 2003 scientific report.

And, having created the largest empire of all time – which covered most of China and Central Asia during his lifetime, and stretched as far as Poland and Vietnam afterward – The Richest estimates that he would have been worth about US$120 trillion in today’s money.

  1. Mansa Musa (1280-1337)

Estimated net worth … “Incomprehensible”

Mansa Musa is considered the richest man to have ever lived, according to historians.

Coming in strong at No 1 is a name that you may not even recognize. Mansa Musa was the ruler of the Mali empire, which was immensely rich in land, salt and gold. Historians estimate the Mali Empire was at one point the largest gold producer in the world, meaning its ruler was in possession of “incomprehensible wealth”. While Celebrity Net Worth has estimated his wealth to have been the equivalent of around US$400 billion, historians believe it’s virtually impossible to come to a conclusion on the real number.

The African ruler was famous for making the most extravagant pilgrimage to Mecca of all time, with the BBC reporting that the king left Mali with about 60,000 men, from royal officials to camel drivers and slaves. He spent so much gold in Cairo during his three month stay there that he destabilized the local economy, affecting the price of gold in the region for the next 10 years!

Today’s Richest

Right now, Elon Musk is by far the richest person on earth. Tesla boss Elon Musk’s immense fortune pales into insignificance compared to the richest people in history. 

Forbes estimates the serial tech entrepreneur’s fortune at be about US$220 billion, thanks to his portfolio of companies including electric car manufacturer Tesla, rocket producer SpaceX and tunnelling project The Boring Company.

Yet, despite his astonishing net worth, the 51-year-old’s billions don’t even come close to the wealth of the richest people in history – proportionally speaking.. Yup, that means Amazon’s Jeff Bezos, Microsoft’s Bill Gates and Indian tycoons Gautam Adani and Mukesh Ambani also don’t make the cut.

Amazon CEO Jeff Bezos is currently the second richest person on the planet – but not necessarily the second richest of all time. Photo: AP

It is however important to note that the further we go back in time, the harder it is to put an accurate or fair figure on how relatively rich an individual was as, well, times were much different back then. Wealth was based on gold, land, salt and power – and not all academics agree on the valuations.

But we’ve done our best stocktaking, and according to several sources, and the work of a number of historians, these are richest people to ever walk the earth – after factoring in inflation and the worth of commodities in the day – in 2022 dollars. (Courtesy: Forbes)

Picture: Life Byond Post

Chinese Yuan Becomes World’s Fifth Most Traded Currency, Survey Finds

The Chinese currency, yuan leaped over the Australian, Canadian and Swiss currencies to become the fifth most traded currency in the world, according to the Bank for International Settlements’ Triennial Central Bank Survey.

The Chinese yuan has become the world’s fifth most traded currency, jumping from eighth place three years ago, according to a Bank for International Settlements (BIS) report, as the renminbi continues to gain international traction amid heightened geopolitical tensions.

The Chinese currency was involved in 7% of all trades in 2022, compared with 4% three years ago, Basel-based BIS said in a report on Thursday. Meanwhile, total daily trades rose 14% to $7.5 trillion. 

The dollar maintained its decade-long place as the world’s most traded currency, accounting for one side of 88% of all transactions. The euro, yen and pound also held their spots in the top four.

According to Bloomberg News, the yuan is becoming a more important global currency as China takes steps to open its financial markets. This is reflected in an increase in yuan cross-border settlements as well as a higher share of yuan among global FX reserves.

Bloomberg says the increase in cross-border yuan settlements, as well as the higher share among global foreign exchange reserves, is due to Beijing’s moves to open up its financial markets.

The BIS survey covered more than 1,200 banks and other intermediaries worldwide. Russia, which accounted for less than 1% of the global total in 2019, was excluded this year, while Dubai was included for the first time.

The Forgotten 3 Billion People

By, Wolfgang FenglerHomi Kharas, and Juan Caballero

In his 1969 poem “The Poor,” Roberto Sosa writes “The poor are many /and so/ –impossible to forget.” At that time, over half of the global population lived in extreme poverty ( less than $1.90 per day per person). The World Bank estimates that around 8.5 percent of the world’s population (685 million people) could be extremely poor by the end of 2022, and that poverty is now declining at a very slow rate of only 2 percent a year.

Meanwhile, the rich—defined by World Data Lab as those in households spending more than $120 per day per person (2017 purchasing power parity)—numbering about 250 million worldwide, capture the most media attention. Oxfam’s “Inequality Kills” report shows that the richest 10 people made $810 billion between March 2020 and November 2021, and that the richest 1 percent are responsible for the same level of carbon emissions as the poorest 3.1 billion people.

In between the rich and poor, lives the middle class ($12-120 per day), numbering some 3.6 billion people. The 2022 OECD Economic Survey of the United States, described a “hollowing out” of the middle class. Their economic analysis has called on governments to help the struggling middle class for several years, and the attention given to inflation, taxes, trade, and energy policy all aims at generating a process of globalization that delivers greater prosperity to the middle class.

However, there are only 4.6 billion people in these three groups out of the 8 billion people on the planet. There are 3.4 billion people who are seemingly forgotten, not extremely poor, not part of the middle class, and not rich. Who are they?

The missing group is perhaps best described as the “vulnerable.” They are not poor enough to feature prominently in the poverty and inequality discourse, yet they have been seriously affected by the recessions caused by COVID-19, and by food and fuel shortages and price increases. Academics have long argued that the most vulnerable groups may not coincide with the poorest groups. For example, Whelan and Maitre look at the experience of Irish households and find that just over one-third of their vulnerable cluster is drawn from the poor, while two-thirds are drawn from the non-poor. They conclude that “poverty and economic vulnerability are obviously related but are still distinct.”

We look at vulnerability in terms of the risk of being pushed back into poverty and the risk of having expectations of entry into the middle class dashed. Both have significant welfare and behavior consequences.

Clearly, the risk of falling back into poverty, usually due to an economic, health, or conflict shock, depends upon a household’s distance from the extreme poverty line. The most vulnerable to this risk are those spending $2-5 per day per person. There are 1.3 billion people in this segment. The bulk of the 85 million people who may have fallen into poverty in 2020 came from this group.

At the other end of the spectrum is a group spending $8-12 per day per person. This group would have had reasonable prospects of joining the middle class in a few years. In normal times, over 100 million people move out of this group into the middle class. This has slowed to 90 million this year and a further loss of 5 million is expected in 2023, meaning that for tens of millions of people, the hope for entry into the middle class has been derailed.

In between, the group spending $5-8 is subject to both kinds of risk, although to a lesser extent. The chance of falling into poverty is smaller, and the prospects for advancing into the middle class are also smaller, so it is a more stable category. Nevertheless, it is a group where income volatility is high—a spell of unemployment, a poor crop, or a family health crisis can create proportionally large income losses. On the other side of the coin, a family member gaining meaningful employment, migrating and sending home remittances, or enjoying a good harvest can propel a family toward the middle class. Both the risk of something bad happening and something good not happening can affect these households significantly.

Figure 1. Global population living in different spending groups

Source: World Data Pro, World Data Lab 2022

Figure 1 shows how the vulnerable are distributed among these spending categories today and in 2030 based on current projections of growth and distribution. The figure shows that the vulnerable are evenly spread across the three categories we have identified. It also shows that there is not likely to be a significant reduction in the size of this group in the next few years.

Given the size of the vulnerable group, governments would do well to pay more attention to them. Targeting social assistance based on spending/income levels is only likely to exclude a substantial portion of the vulnerable group. Additional metrics, based on country-by-country risk characteristics, are needed to build a more resilient population.

This recommendation is particularly important for Asian countries. There, great inroads have been made in reducing the absolute number of extremely poor people, so the vulnerable group is less likely to overlap with those in poverty. At the same time, Asian countries are witnessing severe climate-related shocks, so the vulnerability of many households has increased. By contrast, in Africa, levels of extreme poverty remain high, and the overlap between the vulnerable and the poor is larger. Then, targeting based on poverty, as is commonplace in many social assistance programs, will also assist in building resilience against vulnerability.

Although Asian countries have reduced poverty considerably, most people are still vulnerable. In fact, more than half of the Asian population is still poor or vulnerable. It will take another two to three years for Asia to cross the point where the majority of its population is middle-class or rich.

We need to pay more attention to the forgotten 3 billion. They are vulnerable on many dimensions, and their hopes and aspirations are in danger of destruction in today’s slow-growth and volatile economies. Identifying vulnerabilities is more complex than simply adjusting income poverty lines, although it should be one component. But the three-plus billion vulnerable people are many, and so—they should be impossible to forget. (Courtesy: Brookings Instituite)

World Economy Battered By High Inflation And Stalling Growth

By, Eswar Prasad & Aryan Khanna

The post-COVID recovery has run out of steam and the global economy is stalling, with many countries already in or on the brink of outright recession amid heightened uncertainty and rising risks. The October 2022 update of the Brookings-Financial Times TIGER indexes shows that growth momentum, as well as financial market and confidence indicators, have deteriorated markedly around the world in recent months.

A series of self-inflicted wounds, ranging from China’s zero-COVID policy to the United Kingdom’s fiscal recklessness, piled on top of persistent supply chain disruptions and the protracted war in Ukraine, have severely constricted space for policy maneuver. High and persistent inflation worldwide, and the actions by central banks to rein it in, are depressing economic activity, dampening household and business confidence, and roiling financial markets.

Major advanced economies such as the eurozone, Japan, and the United Kingdom have been dented by various adverse external shocks, often compounded by sluggish and tepid policy responses, throwing their growth trajectories off kilter. Many developed markets are now facing the combination of steep currency depreciations (relative to the U.S. dollar), rising government bond yields, strained public finances, and tightening policy constraints that have long characterized periods of economic and financial stress in emerging market economies.

The U.S. economy is rife with conflicting signals. Consumer demand remains strong and employment has continued to grow at a reasonably healthy pace. At the same time, GDP growth is anemic while inflation remains high by any measure, leaving the Federal Reserve with little choice but to hike rates further despite the tightening of financial conditions resulting from the stronger dollar and falling values of financial assets.

Energy supply disruptions are fueling inflation and constraining growth in European economies, with prospects of energy shortages in the winter damaging private sector confidence. Emblematic of the stresses on the U.K. economy, the plunge in the pound sterling’s value reflects a combination of these adverse external circumstances, the ongoing fallout from Brexit, and undisciplined fiscal policies. Many European countries face added concerns about populist policies that could increase the risks to fiscal and financial stability.

Japan is the sole major advanced economy that has the luxury of keeping monetary policy loose as inflation remains contained. This could help maintain stable albeit low growth, with the yen’s rapid depreciation not having any appreciable negative effects thus far.

Emerging market economies are facing similar challenges as their advanced economy counterparts, including high inflation and depreciating currencies, but have generally better growth prospects. Still, weak demand worldwide and tighter financial conditions will increase pressure on developing economies with current account deficits. Barring a few exceptions such as Turkey, Sri Lanka, and Venezuela, where rampant economic mismanagement has precipitated currency collapses, emerging markets at large do not seem at imminent risk of balance of payments crises, however.

China is facing a raft of problems resulting from the government’s rigid adherence to a zero-COVID strategy, a faltering real estate sector, and financial system stresses boiling over. Inflation remains under control, though the renminbi’s depreciation relative to the dollar has limited the People’s Bank of China’s ability to cut interest rates. The government and the PBOC have invoked a number of fiscal and monetary stimulus measures, but these have had limited traction in boosting private consumption and investment. Export growth, meanwhile, is likely to be restrained by weak global demand. (Courtesy: Eswar Prasad and Aryan Khanna (Cornell), The Brookings Institution, October 2022)

Movie Star Anna May Wong To Be First Asian American Featured On US Currency

Movie star Anna May Wong, who broke into Hollywood during the silent film era, will become the first Asian American to appear on US currency, a century after she landed her first leading role. Wong’s image, with her trademark blunt bangs and pencil-thin eyebrows, will feature on the back of new quarters from October 24th, 2022.

The design is the fifth to emerge from the American Women Quarters Program, which highlights pioneering women in their respective fields. The other four quarters, all put into production this year, feature poet and activist Maya Angelou; the first American woman in space, Sally Ride; Cherokee Nation leader Wilma Mankiller; and suffragist Nina Otero-Warren. The latter two were, along with Wong, selected with input from the public.

“These inspiring coin designs tell the stories of five extraordinary women whose contributions are indelibly etched in American culture,” the US Mint’s acting director, Alison Doone, said in a statement to CNN last year, when the list was revealed.

Considered the movie industry’s first Chinese American star, Wong overcame widespread discrimination to carve out a four-decade career in film, theater and radio. She acted alongside icons including Marlene Dietrich, Joan Crawford and Laurence Olivier and appeared on stage in London and New York.

Born in Los Angeles, she began acting at 14 and took a lead role in “The Toll of the Sea” three years later, in 1922. She went on to appear in dozens of movies but faced deeply entrenched racism in Hollywood, where she struggled to break from stereotypical roles.

She moved to Europe in the 1920s, but later returned to the US to make hits including “Shanghai Express,” the 1932 adventure-romance movie that gave Wong one of her best-known roles — it starred Dietrich as a notorious courtesan who takes a three-day rail journey through China during the Chinese Civil War and is held hostage on board, with Wong playing a fellow first-class passenger.

Throughout her life, Wong advocated for greater representation of Asian American actors in Hollywood. She received a star on the Hollywood Walk of Fame in 1960, the year before she died aged 56.

Her keen sense of style also made her a fashion icon, with Wong often mixing traditional Chinese gowns and flapper-era styles with eccentric touches. A biopic of the actor’s life, which will see her portrayed by “Crazy Rich Asians” star Gemma Chan, is currently in production.

“Many prominent actors from the 1920s and 1930s saw their name framed by lightbulbs on movie theater marquees, so I thought it made sense to feature Anna May Wong in this way,” said the coin’s designer, Emily Damstra, in a press release.

“Along with the hard work, determination, and skill Anna May Wong brought to the profession of acting, I think it was her face and expressive gestures that really captivated movie audiences, so I included these elements next to her name.”

The American Women Quarters program will choose five different women each year to be featured on the coin’s reverse side through 2025. Next year’s confirmed designs will spotlight pilot Bessie Coleman, composer Edith Kanakaʻole, former first lady Eleanor Roosevelt, journalist and activist Jovita Idar and ballerina Maria Tallchief. (The Hill)

New IRS Rules Mean Your Paycheck Could Be Bigger Next Year

Inflation may be pushing prices up, but it also may help push up your take-home pay starting next year.

Thanks to inflation adjustments to 2023 federal income tax brackets and other provisions announced by the Internal Revenue Service this week, more of your 2023 wages may be subject to lower tax rates than they were this year, and you may be able to deduct higher amounts of income.

“It is very likely that you would see more in your paycheck starting in January [due to the IRS inflation adjustments, which] tend to result in lower withholding for a given level of income,” said Mark Luscombe, principal federal tax analyst for Wolters Kluwer Tax & Accounting.

Since the changes don’t apply until 2023, they won’t have any affect on your 2022 tax return that you must file by mid-April of next year.

Here are some of the big changes the IRS is making:

Income tax brackets

  • There are seven different federal income tax rates at which earned income is taxed: 10%, 12%, 22%, 24%, 32%, 35% and 37%. And the range of income subject to each of those rates is called a tax bracket.
  • The more you earn, the higher your “top” rate – that’s the rate at which your last dollar is taxed.
  • The IRS inflation adjustments amount to a roughly 7% increase in each bracket.
  • Starting next year, here are the amounts of income that will apply to each rate:
  • 10% applies to the first $11,000 of income for single filers ($22,000 for married couples filing jointly).
  • 12% applies to income over $11,000 ($22,000 for joint filers)
  • 22% applies to income over $44,725 ($89,450 for joint filers)
  • 24% applies to incomes over $95,375 ($190,750 for joint filers)
  • 32% applies to incomes over $182,100 ($364,200 for joint filers)
  • 37% applies to incomes over $578,125 ($693,750 for joint filers)

Standard deduction

The standard deduction, which most filers claim, will go up by $900 to $13,850 for single people and by $1,800 to $27,700 for married couples filing jointly.

The standard deduction is the dollar amount that those who don’t itemize deductions can subtract from their adjustable gross income before federal income tax is applied.

Healthcare Flexible Spending Account contribution limits

Next year, you will be allowed to contribute up to $3,050 to a flexible spending account, which can cover some out-of-pocket healthcare costs not covered by health insurance. That money is deductible so it will reduce the amount of tax taken out of your paycheck. If your employer’s plan also allows you to carry over unused portions of your FSA amount, the maximum carryover permitted will be $610, $40 higher than this year’s maximum.

Earned Income Tax Credit

The Earned Income Tax Credit (EITC) enables low-income workers to keep more of their paycheck. However, they will not get paid the money until they file their 2023 taxes in early 2024.

The IRS raised the maximum amounts one can claim for the EITC by about 7%.

For example, a qualifying taxpayer with three or more qualifying children could get an EITC of up to $7,430 in 2023, up from $6,935 this year.

India Cancels Foreign Contribution Regulation Act License Of Rajiv Gandhi Foundation

India’s Union Home Ministry has cancelled the Foreign Contribution Regulation Act (FCRA) licence of Rajiv Gandhi Foundation (RGF), a non-governmental organisation headed by Sonia Gandhi, for allegedly violating the foreign funding law.

The foundation will no longer be allowed to receive foreign funds.

According to sources, the FCRA license of the foundation has been cancelled due to violation of foreign funding rules. The Ministry of Home Affairs (MHA) had also constituted a committee in 2020 to probe this. This decision has been taken on the basis of the report by the same inquiry committee.

The trustees of the organization include former Prime Minister Manmohan Singh, former Finance Minister P. Chidambaram and MPs Rahul Gandhi and Priyanka Gandhi Vadra.

According to sources, the RGF came under the scanner in July, 2020. The MHA then constituted an inter-ministerial committee headed by an Enforcement Directorate (ED) officer to investigate NGOs, including the RGF, linked to the Gandhi family. The foundation was accused of tampering with income tax returns, including suspected FCRA violations.

The RGF was established in 1991. For many years, this foundation worked on important issues regarding health, science and technology, women, children and education, etc.

In 2020, BJP President J.P. Nadda also alleged that the foundation took such funds from China, “which were not in the interest of the country”. (IANS)

Loan Forgiveness Application Available For Students Now

The Department of Education launched a beta test version of its student loan relief website on Friday with an application that borrowers can fill out ahead of the site’s official launch later this month.

Since August, when President Biden announced that he would fulfill his campaign promise to cancel up to $20,000 in student loan debt, borrowers have been waiting diligently to hear the next steps. While the application—which was originally supposed to open in early October—is not fully functional, the Department of Education is welcoming applicants to submit their applications on the beta test site.

The beta site’s application will be available “on and off” over the next few weeks, according to the Education Department. The department chose to launch its beta version early so their technical team can work to detect and remedy any issues that might come up

How does the beta application process go?

The federal agency said that there’s no advantage to completing the application before its official launch because it won’t be processed until then, but if a borrower fills out the application during the beta period, they won’t have to worry about filling it out again later. 

The application process takes about 5 minutes, and it’s available in English and Spanish. Applicants also don’t need to log in or provide any documents, according to the department. About 95% of federal student loan borrowers are eligible for relief.

The Education Department’s technical team will be responding to potential issues in real-time, and although the application itself won’t change, the team may make changes to the website if faced with any glitches. 

The beta version of the site will have scheduled pauses for the team to observe its progress and refine any errors, so the department is encouraging applicants to check back later if the site is down when they try to visit it. The department’s website crashed in August on the day of the student loan relief announcement, so the department is likely testing the site thoroughly to avoid a repeat.

How quickly are borrowers expected to receive relief?

The Biden administration initially said that the debt relief application would become available in early October, but in a legal filing on Friday, the Department of Education announced that it won’t be available before Oct. 23. From that point, the application will be available until Dec. 31, 2023.

​​The application asks borrowers to submit their Social Security numbers and to corroborate that they meet the income caps for the program, which are limited to a salary less than $125,000, or under $250,000 for married couples, in 2020 or 2021. Borrowers are eligible to cancel $10,000 of federal student loan debt and Pell Grant recipients are eligible for up to $20,000 of relief.

The Federal Student Aid office will confirm applicants’ eligibility, and reach out to applicants if more information is needed. Applicants’ loan service providers will be responsible for contacting them once their relief has been processed.

Borrowers can expect to see their relief granted within four to six weeks after filling out the application, according to Education Secretary, Miguel Cardona. With looming legal action challenging the student loan relief program and an imminent renewal of student loan payments beginning in January, experts have encouraged borrowers to fill out the application as soon as possible.

US And India Need To Collaborate On A Higher Scale: AIMA Chief Shrinivas Dempo

Shrinivas Dempo is not one to mince words. The president of the All India Management Association (AIMA) – the country’s apex non-profit, non-lobbying body for management professionals with over 38,000 members – is not optimistic about the current geopolitical and economic situation, even as he is hopeful about the future.

“These are extremely difficult times,” he told indica in an exclusive interview on the sidelines of the 5th US-India Conference jointly hosted by AIMA and Haas School of Business at UC Berkeley, on October 11. “We are facing all sorts of crises – climate, energy, interest rates, foreign exchange. But when there are challenges there are also opportunities.”

The 1969-born Dempo, who hails from the state of Goa in western India, is the chairman of the Dempo Group of Companies – a diversified conglomerate with interests in industries such as calcined petroleum coke, shipbuilding, food processing, real estate and newspaper publishing. The company also owns a popular football club.

The theme for this year’s conference was ‘US-India Partnership: A New Paradigm in a Changed World’. In his speech, Dempo acknowledged the issues faced by the world and not just India. “We believe in the strength of people,” he said, “and together we (the US and India) can achieve.”

He told indica, “With so much uncertainty, thought leaders will have to come up more ideas for our economies to collaborate. India is one of the world’s most promising nations. Our demographic dividend, our younger population is our greatest strength.”

He added that the Russia-Ukraine conflict and the China-Taiwan geopolitical tensions give an opportunity for India and the US to collaborate on a higher scale. “India in the east and US in the west will play a major role in sorting out the issues.”

He said collaboration is better than competition, and for that to happen, he proposed a summit where industry and academia from the two countries can come together.

Dempo said the AIMA is not like other business associations, “nor are we an advocacy organization,” but added that AIMA talks about adapting better management practices. “AIMA not only addresses corporate leaders but we also manage students that are our future corporate leaders. The idea of hosting the summit is to collaborate with education institutes and work on a common theme.”

Apart from hosting the US-India Conference, the AIMA delegation visited Silicon Valley tech companies to see innovation first hand and perhaps take back some lessons for Indian industry.

The delegation has people from manufacturing, transportation and logistics sectors. “The dialog can evolve into specific business opportunities,” Dempo said. “When things are bad, it is the best time to get things at a good price.”

He said India’s current growth rate (7% annually) can sustain for at least 30 more years and “while we cannot compare with the US, we will probably make India the best destination for investment.”

He opined that the Indian government needs to pay greater attention to the tourism sector. “Tourism potential remains largely untapped, even though we have made great progress. The past need not be an indicator, but we need to focus on heritage tourism, nature tourism, ecological tourism, and much more. Infrastructure needs to be set up on a much larger scale… more hotels, better facilities.”

He said in his speech that India’s industrialization and digitization has improved leaps and bounds, but “we still have a long way to go. “Indian youth today have an unprecedented opportunity to be entrepreneurs. I know the US has traditionally done well in this area and so we need greater collaboration in this field. Prime Minister Modi is bullish on Make in India and Start-up India.”

Dempo has a personal connection with America. He is a graduate of the Tepper School of Business at Carnegie Mellon University and serves as a trustee at the university.

In 2011, he made a $3 million gift to endow a professorship at Tepper called the Vasantrao Dempo Reflective Chair, to support teaching and research on India-relevant issues. There are two simultaneous reflective chair professors – one in the US and the other in India. Prof Sudhir Kekre was appointed the first such professor in 2017.

HM Nerurkar, chairman of TRL Krosaki Refractories Limited has one-line advice for new-age entrepreneurs – Silicon Valley is where you get cutting-edge tech and this is where you can learn the most.

Nerurkar was a keynote speaker at the 5th US-India Conference jointly organized by the All India Management Association and the Haas School of Business at the University of California, Berkeley, on October 11. In an exclusive interview with indica, Nerurkar said that despite several agencies lowering India’s GDP growth forecast for 2023, “It is quite pessimistic and I believe it will be around 7 percent.”

He said this is possible because India is still not an export-led economy, and India cannot suffer thanks to its domestic consumption. “I think we will still manage to retain the 7 percent GDP growth target.”

Nerurkar, who has spent more than half his professional career with the Tata group, still serves on its board. He is also an advisor to several multi-billion-dollar conglomerates such as the Adani group.

The soft-spoken Nerurkar earned a bachelor’s degree in metallurgical engineering from the College of Engineering, Pune (CoEP). He joined Tata Steel in 1972 and rose to becoming its managing director in charge of India and South East Asia operations.

He commented on the Deloitte report that stated that India is a more challenging business destination compared to countries such as China and Vietnam. “There is some truth (in the report). Our rank is still not where it should be on ease of doing business. There are issues and the government is trying to address them.”

He added that India still lacks the infrastructure needed to become a fast-growing exporting nation. “If you improve the operational efficiency and improve the export infrastructure, we can become a bigger export house.”

He is an optimist, though. “I think India will not allow any opportunity to slip away at this juncture. For example, Adani group is trying to be number one. That kind of ambition and that kind of leadership was not something you have dreamt of 10 years back.” He said this is the right time for India to grab US investors, given the tension between China and the US.

In his short speech at the conference, Nerurkar spoke about his ideas on the metaverse. “All of us in business and in government have to ensure that the younger generation gets training or the skill development that is appropriate for the jobs that are coming up.” (IndicaNews)

India Slips To 107 Out 121 In Global Hunger Index

In the 2022 Global Hunger Index, India ranks 107th out of the 121 countries with sufficient data to calculate 2022 GHI scores. India was ranked 101st in the 2021 ranking.

With a score of 29.1, India has a level of hunger that is serious. It was 28.2 in 2014. The higher the score, the worse is the situation, according to the methodology. There are five levels of hunger severity, according to this methodology. Scores of ≤ 9.9 are Low; 10.0–19.9 are Moderate; 20.0–34.9 are Serious; 35.0–49.9 are Alarming; and ≥ 50.0 are Extremely Alarming. 

At 19.3 per cent, according to the latest data, India has the highest child wasting rate of all countries covered in the GHI. This rate is higher than it was in 1998-1999, when it was 17.1 per cent. Child wasting is the share of children under the age of five who have low weight for their height, reflecting acute undernutrition.

Nepal is ranked higher at 81, Bangladesh at 84 and even Pakistan at 99. India is ranked below African countries like Sudan, Congo, Ethiopia, Nigeria, and Rwanda.

The Global Hunger Index is a peer-reviewed annual report, jointly published by Concern Worldwide and Welthungerhilfe, designed to comprehensively measure and track hunger at the global, regional, and country levels. The aim of the GHI is to trigger action to reduce hunger around the world.

According to the data analysts, since 2000, India has made substantial progress, but there are still areas of concern, particularly regarding child nutrition.

India’s GHI score has decreased from a 2000 GHI score of 38.8 points, considered alarming, to a 2022 GHI score of 29.1, considered serious. India’s proportion of undernourished in the population is considered to be at a medium level, and its under-five child mortality rate is considered low.

While child stunting has seen a significant decrease — from 54.2 per cent in 1998-1999 to 35.5 per cent in 2019-2021 — it is still considered very high.

Each country’s GHI score is calculated based on a formula that combines four indicators that together capture the multidimensional nature of hunger:
Undernourishment: the share of the population with insufficient caloric intake.
Child stunting: the share of children under age five who have low height for their age, reflecting chronic undernutrition.
Child wasting: the share of children under age five who have low weight for their height, reflecting acute undernutrition.
Child mortality: the share of children who die before their fifth birthday, partly reflecting the fatal mix of inadequate nutrition and unhealthy environments.

Hunger is usually understood to refer to the distress associated with a lack of sufficient calories. The Food and Agriculture Organization of the United Nations (FAO) defines food deprivation, or undernourishment, as the habitual consumption of too few calories to provide the minimum dietary energy an individual requires to live a healthy and productive life, given that person’s sex, age, stature, and physical activity level.

Undernutrition goes beyond calories and signifies deficiencies in any or all of the following: energy, protein, and/ or essential vitamins and minerals. Undernutrition is the result of inadequate intake of food in terms of either quantity or quality, poor utilization of nutrients due to infections or other illnesses, or a combination of these immediate causes. These, in turn, result from a range of underlying factors, including household food insecurity; inadequate maternal health or childcare practices; or inadequate access to health services, safe water, and sanitation.

Malnutrition refers more broadly to both undernutrition (problems caused by deficiencies) and overnutrition (problems caused by unbalanced diets that involve consuming too many calories in relation to requirements, with or without low intake of micronutrient-rich foods). Overnutrition, resulting in overweight, obesity, and noncommunicable diseases, is increasingly common throughout the world, with implications for human health, government expenditures, and food systems development. While overnutrition is an important concern, the GHI focuses specifically on issues relating to undernutrition. (IndicaNews)

India Has Potential To Attract US $475 Billion FDIS In 5 Years

A majority of MNCs believe that the Indian economy will perform significantly in the next three to five years, a report by EY-CII titled ‘Vision – Developed India: Opportunities and Expectations of MNCs” revealed. This projection is in the light of 71 per cent of multi-national companies (MNCs) considering India for global expansion. The report stated that the country has the potential to attract US$475 billion worth foreign direct investment (FDI) in the next five years with its sharp focus on reforms and economic growth.

According to reports, even as the pandemic and geopolitical conflict resulted in investor uncertainty, India has the potential to attract Foreign Direct Investment (FDI) flows of $475 billion in the next five years due to the focus on reforms and economic growth, according to a report by the Confederation of Indian Industries (CII) and EY.

The report noted that FDI in India has seen a consistent rise in the last decade, with FY 2021-22 receiving FDI inflow of $84.8 billion despite the impact of the COVID-19 pandemic and geopolitical developments on investment sentiment.

“India is seen as an emerging manufacturing hub in global value chains, as a growing consumer market and as a hub for ongoing digital transformation. In addition, in a rapidly changing geopolitical environment, India’s large and stable democracy and consistent reform measures are recognized by the MNCs (multinational company),” the report said.

The report titled ‘Vision—Developed India: Opportunities and Expectations of MNCs’, added that 71% of MNCs working in India consider the country an important destination for their global expansion. The optimism is driven by both short-term as well as long-term prospects.

“A majority of MNCs feel that the Indian economy will perform significantly better in 3-5 years backed by 96% of respondents being positive about overall India’s potential,” the report said.

Connecticut Is the 3rd Most Expensive State to Retire

If you’re planning on retiring in Connecticut, you better start saving yesterday, according to a new report.

Great schools, beautiful shoreline, classic architecture, deep woods, fabulous arts — but you better enjoy all Connecticut has to offer while you’re young. That’s the take-away from a new report that names the Nutmeg State the 3rd most expensive, and 8th worst overall, in which to retire. 

Personal finance website Bankrate ranked each state from the perspective of what matters most to a prospective retiree. The most heavily weighted category was affordability, at 40 percent, followed by well-being (20%), culture and diversity (15%), weather (15%) and crime (10%).

Of course, there’s more than a little subjectivity involved in selecting your final nesting place. Sunbelt states topped Bankrate’s list for retiree nirvana, but what if you burn easily and prefer skiing to snorkeling? And a state’s affordability drops way low for retirees if the home in which they live is already bought and paid for. But let’s all just play along…

Connecticut’s tied for 4th with Vermont in the crime category, and is ranked 8th overall for retiree “well-being,” but takes a beating in the data when it comes to affordability. The state ranks No. 48, right behind affluent enclaves Hawaii and California.

The New England winters didn’t work in Connecticut’s favor either; the state ranked No. 39 when it came to weather, a dip mitigated somewhat by its No. 14 ranking in culture and diversity.

Connecticut’s overall score of 23 tied that of Hawaii and Washington. 

The best state for retirees, according to BankRate, and your own intuition, is Florida. The Sunshine State not only scored high for its weather (No. 5), but was ranked first in culture and diversity, and 18th in affordability.

86% Of Global CEOs Expect Recession In 2023: KPMG Survey

Top global CEOs expect the recession to be mild and shorter, according to a survey by KPMG. As per KPMG 2022 CEO Outlook, 86 per cent of CEOs surveyed believe a recession over the next 12 months will happen, but 58 per cent feel it will be mild. The risk of recession has risen in the last few months as central banks across the world are hiking interest rates to contain super-hot inflation caused by a combination of factors such as the pandemic and Russia’s invasion of Ukraine.   

A survey of more than 1,300 chief executive officers (CEOs) at the world’s largest businesses reveals that over the next year, 86% of these global leaders anticipate a recession to hit.

However, 58% of these leaders expect the recession to be mild and short. Fourteen percent of senior executives identify a recession among the most pressing concerns today — up slightly from early 2022 (9%), while pandemic fatigue tops the list (15%), said the survey — the KPMG 2022 CEO Outlook.

These leaders were asked about their strategies and outlook during the survey. Over the next year, more than 8 out of 10 (86%) global CEOs anticipate a recession to hit, with 71% predicting it will impact company earnings by up to 10 per cent, said the survey.

Most of the top executives are of the opinion that the recession will make the post-pandemic recovery difficult. As per the survey, 73 per cent of CEOs believe the recession will upend anticipated growth over the next three years, and 75 per cent also believe a recession will make post-pandemic recovery harder. 

“71 percent of CEOs predict a recession will impact company earnings by up to 10 per cent over the next 12 months,” the survey stated.

A strong majority of senior executives believe that a recession will disrupt anticipated growth (73%). However, three-quarters (76%) have already taken precautionary steps ahead of a looming recession, it added.

Despite those concerns, senior executives also feel markedly more confident about the resilience of the economy over the next six months (73%) than they did in February (60 per cent), when KPMG surveyed 500 CEOs for its CEO Outlook Pulse survey.

Further, 71% of leaders are confident about the global economy’s growth prospects over the next three years (up from 60% in early 2022) and nearly 9 in 10 (85%) are confident about their organization’s growth over the next three years.

“Tested by enormous challenges in quick succession — a global pandemic, inflationary pressures and geopolitical tensions — it’s encouraging that CEOs, surveyed in our 2022 CEO Outlook, were confident in their companies’ resilience and relatively optimistic in their own growth prospects,” said Bill Thomas, global chairman and CEO, KPMG.

US In Record $31 Trillion Debt

(AP) — The nation’s gross national debt has surpassed $31 trillion, according to a U.S. Treasury report released Tuesday that logs America’s daily finances.

Edging closer to the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government’s ability to borrow — the debt numbers hit an already tenuous economy facing high inflation, rising interest rates and a strong U.S. dollar.

And while President Joe Biden has touted his administration’s deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame 40-year high price increases caused by a variety of economic factors, economists say the latest debt numbers are a cause for concern.

Owen Zidar, a Princeton economist, said rising interest rates will exacerbate the nation’s growing debt issues and make the debt itself more costly. The Federal Reserve has raised rates several times this year in an effort to combat inflation.

Zidar said the debt “should encourage us to consider some tax policies that almost passed through the legislative process but didn’t get enough support,” like imposing higher taxes on the wealthy and closing the carried interest loophole, which allows money managers to treat their income as capital gains.

“I think the point here is if you weren’t worried before about the debt before, you should be — and if you were worried before, you should be even more worried,” Zidar said.

The Congressional Budget Office earlier this year released a report on America’s debt load, warning in its 30-year outlook that, if unaddressed, the debt will soon spiral upward to new highs that could ultimately imperil the U.S. economy.

In its August Mid-Session Review, the administration forecasted that this year’s budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending, and an economy that has recovered all the jobs lost during the multi-year pandemic.

In full, this year’s deficit will decline by $1.7 trillion, representing the single largest decline in the federal deficit in American history, the Office of Management and Budget said in August.

Maya MacGuineas, president of the Committee for a Responsible Federal Budget said in an emailed statement Tuesday, “This is a new record no one should be proud of.”

“In the past 18 months, we’ve witnessed inflation rise to a 40-year high, interest rates climbing in part to combat this inflation, and several budget-busting pieces of legislation and executive actions,” MacGuineas said. “We are addicted to debt.”

A representative from the Treasury Department was not immediately available for comment.

Sung Won Sohn, an economics professor at Loyola Marymount University, said “it took this nation 200 years to pile up its first trillion dollars in national debt, and since the pandemic we have been adding at the rate of 1 trillion nearly every quarter.”

Predicting high inflation for the “foreseeable future,” he said, “when you increase government spending and money supply, you will pay the price later.”

Rupee Plunges To All-Time Low Against Dollar

The Indian Rupee pared most of its initial losses and settled 4 paise lower at a fresh lifetime low of ₹82.34 (provisional) against the U.S. dollar on Monday, October 10, 2022, weighed down by as risk-averse sentiment among investors.

Indian rupee on Friday last week fell sharply to its all-time low of 82.33 against the dollar owing to a rise in US bond yields and firming up of crude oil prices. Rupee had closed at 81.89 on Thursday.

It was trading at 82.30 against the dollar in the morning after opening at 82.19 a dollar. Later, it touched an all-time low of 82.33 against the dollar.

The all-time low plunge in the rupee has come a day after the World Bank had on Thursday cut India’s growth forecast for this financial year by a full percentage point amid rising inflation and adverse geo-political conditions. (IANS)

The US dollar has surged this year. The world’s largest wealth manager explains why that dizzying rally isn’t done yet.

Meanwhile market watchers say, the surging US dollar has yet to peak. That’s according to UBS, which thinks the Federal Reserve is unlikely to start cutting interest rates any time soon, keeping the dollar rising against rival currencies globally. 

The greenback has already flown up 16.7% this year, bolstered by Fed rate hikes and weaknesses among major counterparts. But hopes of a pivot in the Fed’s policy pumped the brakes on its rise recently, with the US dollar index, which measures the buck against a basket of six currencies, retreating on the speculation fueled by a fall in US job openings and a lower-than-expected rate increase in Australia.

However, UBS’s analysts, led by CIO Mark Haefele, said in a note to clients this week that it’s too early to call a peak in both Fed hawkishness and the US dollar. 

“The number of job openings in the US remains much higher than those unemployed, while the latest core personal consumption expenditure price index showed that inflation is still elevated,” the note read. 

“Fed officials including Chair Jerome Powell have stressed that the central bank’s job is not yet done.” 

Against a backdrop of global uncertainty amid the war in Ukraine, the pressure weighing on the euro is likely to prop up the dollar in the near future, UBS says. 

Multinationals See India As Global Manufacturing Base: CITI Investment Bank Boss

After the consumer banking exit, Citigroup which is focused on servicing large local corporates, multinationals, financial institutions, emerging and mid-sized corporate clients in India says that multinationals are starting to see India as a global manufacturing base, which will positively impact small- and mid-sized businesses.

In an exclusive interview to ANI, Citigroup’s Global Co-Head of Banking, Capital Markets and Advisory, Manolo Falco said that there is tremendous opportunity to support India’s capital and advisory needs.

Here is the transcript of an email interview of Manolo Falco to ANI:

Q: India is the 5th largest economy of the world. What does it mean to you? What reforms/measures pushed India to make in top 5 economies?
Falco: Fiscal prudence and discipline, development of physical infrastructure, ease of doing business, thriving start-up ecosystem, and the build out of India’s digital and financial infrastructure (UPI is recognized as amongst the best in the world), underpin the country’s growth. Recent Government policies on logistics, hydrogen, spectrum, EV, will support further growth, self-reliance, and efficiency. Multinationals are starting to see India as a global manufacturing base, which will positively impact small- and mid-sized businesses. For us at Citi, there is tremendous opportunity to support India’s capital and advisory needs. What I hear from our clients is that they want to grow more. What I hear from investors is they want to find meaningful opportunities to take part in.

Q: What are your plans for India after the consumer banking exit?
Falco: Citi will be focused on servicing large local corporates, multinationals, financial institutions, and emerging and mid-sized corporate clients. Through our universal banking proposition, we help clients with long-term financing, our global footprint, cash management, and protection against rate increases and volatility. We will double down on this strategy. I believe banking models such as what we’ve created will be extremely valuable in helping clients navigate through the uncertainty we see in today’s world. In India, within my business, we have advised clients on episodic business, including capital raising and M&A, worth ~$500 billion over two decades. We will continue to capitalize on our deep global relationships. There is also opportunity to support capital needs of mid and emerging corporates, who bank with our commercial banking business. Our investment bankers will be tasked with identifying these leaders of the future. Our focus and business strategy meant we were on every tech IPO last year.

Q: Indian stock markets are facing the heat of a higher interest rate environment globally. What is your medium-to-long term view on the Indian stock market?
Falco: While I don’t expect recovery too soon given the high interest rate environment, inflation, and volatility in commodities, we may be closer to a recovery given the work by central banks. India would be at the forefront of that as the economy is performing well. So we expect markets to do well, on a relative basis. Over the last two years, including 2022YTD which was a tough year, India will be a relative outperformer, up 22% 2021-2022 YTD and -2% 2022 YTD. India trades at a very healthy premium to its global EM peers. The country has witnessed high interest rates in the not-so-distant past and yet finds opportunities for continual growth. Recent green shoots and the revival of foreign inflows have resulted in a pickup in secondary market deal activity, albeit in narrow execution windows.


Q: What is your view on India’s Primary market. When do you see a revival?
Falco: India has a strong Primary Market and ranks amongst top 5-7 in capital formation globally across years. India’s primary capital markets positioning was further strengthened as it hosted multiple jumbo, $1 billion+ IPOs in the tech space, allowing India’s tech champions to list in their home market, rather than other large financial markets. India’s primary markets attract best-in-class global investors and Sovereign Wealth Funds; in addition, there is a captive pool of domestic capital. We are bullish the ability of India’s primary markets to finance its long-term equity story. Even short term, India did not close its door to primary capital activity. In a tough year, there was the completion of LIC’s jumbo IPO and the second-largest tech IPO for Delhivery. August and September were very active months in the block and follow-on market, raising over $3 billion. Away from India, Citi, as a JGC, recently concluded the Euro 9.4bn IPO for Porsche, which is the second-largest IPO this year. The success of the IPO speaks to our global distribution, which is also available to our Indian clients.


Q: Given the global turmoil, like Ukraine-Russia war, Inflation in US-UK and European countries, what kind of capital demand within India can we anticipate?
Falco: India Inc. has raised a total of $20 billion and $13 billion in the private and listed equity capital markets spaces respectively so far this year. There is a healthy bid for the market though it is very price elastic – so pricing, not volume, has meant the cost of capital has fundamentally changed, which is an ongoing issue in the market. Given the continued tension in IPO markets and narrow windows in secondaries, listed equities could see $5-6 billion in activity through the last three months of 2022. The private markets remain relatively insulated and can see another $6-7 billion worth of volumes over the same time frame. We believe issuance activity should slowly recover as issuers and investors adjust to the new normal.
In terms of debt capital, we expect strong demand from Indian issuers in next 12-18 months, which is expected to result in sizeable debt issuance in 2023. Given the Indian growth story, investor interest remains high for Indian issuances. For Citi, India remains one of the most important Asia Pacific markets with huge interest from global investors.


Q: With MNCs looking at a China + 1 strategy, what are the investment opportunities in India for them? Are inbound M&As an opportunity?
Falco: India is a huge opportunity – it is a sizeable economy with huge growth potential as well as diverse opportunities and a Government who is really focused on the right solutions for the country. I see huge potential in India for continued high growth and the country represents a massive opportunity for both local and international clients. I expect inbound investments in Infrastructure to bring efficient long-term capital. I think we need to be more aggressive in bringing opportunities to local companies, such as in clean energy, chemicals, renewables, technology and services. My focus will be to ensure we have talented global bankers with deep sector knowledge to help clients navigate the India opportunity. (

S&P 500 Down 20% This Year, Retirement Savings Sink Impacting Millions

Despite stock market gains in the last couple of days, some investors are clearly tired of seeing losses in their retirement accounts this year. New data from Alight Solutions shows last month the vast majority of daily trades in 401(k) plans went from equities to fixed income.

“Almost every time Wall Street has a major dip, we see people taking their money out of stocks and moving it into bonds,” said Rob Austin, head of research for Alight Solutions, which measures the daily trading activity of more than 2 million 401(k) investors, with about $200 billion in assets.

Austin noted the movement was more pronounced in September than in August and July. “It was not surprising that it coincided at the time that the market fell,” he said.

Investors are seeking safety

Investors sought safety mostly in stable value funds, with 80% of traded assets put there in September, according to the Alight Solutions 401(k) Index. Money market funds garnered 15% of inflows, while bond funds got about 2% of assets.

Meanwhile, 50% of money that was traded came out target date funds, which are designed to invest more conservatively as you get older. And more than a third of outflows came out of large-cap U.S. equity and mid-cap U.S. equity funds.

Many stick with a 60/40 stocks, bonds split

The traditional portfolio of 60% stocks and 40% bonds has lost about 20% of its value year to date, but most investment advisors recommend sticking with a balanced strategy. With bond yields improving, that mix looks better than it has in years, some say.

Financial advisors also caution against switching strategies when the markets are in turmoil. Trying to time the market can mean investors lock in losses and miss out on the upside.

“If you wake up in the morning and decide to cash out and capture losses, it’s either too late or a bad decision,” said certified financial planner Jon Ulin with Ulin & Co. Wealth Management in Boca Raton, Florida. “Cash does not provide much in the way of a dividend and will not help to make up for 8% losses to inflation over time in as much as a diversified portfolio.” 

The 60/40 split can be a good starting point for moderate-risk investors who don’t need to pull the money for 10 years or more.  Some advisors say what we saw this year with stocks and bonds both declining at the same time could be an anomaly.

“Provided that inflation is under control, we expect that bonds will revert to their historical role of both a safe asset and one that provides relatively safe income,” said Arthur J.W. Ebersole of Ebersole Financial in Wellesley Hills, Massachusetts.

Cash is an option for the risk averse

For investors who really can’t stomach the risk, cash may not be a bad placeholder for now. But the risk adverse should know it is difficult to generate the returns they will need to retire with a 3% return.  

“It’s really easy for my teammates [and I], or our industry, to say, ‘Well, don’t worry, just take the long-term approach and everything over the long-term will be fine,’” said Jason Ray, CEO of Zenith Wealth Partners in Philadelphia.

Ray suggests investors break down their portfolios to see the returns in different asset classes. He recommends adding dividend-paying stocks as a value play and suggests younger investors with a longer time horizon add alternative investments, including investing in early stage startup companies and real estate.  (

UN Warns Of A Global Recession

By, Tobias Burns 

The United Nations warned of a global recession Monday amid efforts by regulators in the world’s most advanced economies — like the U.S. and Europe — to stanch sky-high inflation.  

The international body called on central banks like the U.S. Federal Reserve “to revert course and avoid the temptation to try to bring down prices by relying on ever higher interest rates.” 

The Fed is raising interest rates to try and slow the economy and bring down inflation, which is near 40-year-highs following global economic shutdowns caused by the coronavirus pandemic. Since March, rates have increased from around 0 percent to between 3 and 3.25 percent. 

But a growing number of voices, now including a major U.N. economic body, are calling for an about-face from monetary authorities. They argue that lower inflation targets are not worth the pain of continuing hikes in interest rates, which are projected to hit 4.6 percent next year, according to a median estimate from the Fed. 

The U.N. Conference on Trade and Development (UNCTAD) urged central banks in a report released Monday to change course, describing any upcoming recessions as “policy-induced” and a matter of “political will.” 

“The real problem facing policy makers is not an inflation crisis caused by too much money chasing too few goods, but a distributional crisis with too many firms paying too high dividends, too many people struggling from paycheck to paycheck and too many governments surviving from bond payment to bond payment,” Richard Kozul-Wright, director of UNCTAD’s globalization division, said in a statement. 

Monday’s UNCTAD report disparaged comparisons to the last period of high inflation in the global economy, saying that today’s economic conditions are inherently different from those in the 1970s and that drawing parallels between them was tantamount to “sifting through the economic entrails of a bygone era.” 

Specifically, the report said that wage-price spirals, whereby higher wages lead to higher prices and vice versa, are not a relevant force in today’s global price dynamics. 

“Despite the absence of the wage-price spirals that characterized [the 1970s], policymakers appear to be hoping that a short sharp monetary shock – along the lines, if not of the same magnitude, as that pursued by the United States Federal Reserve (the Fed) under Paul Vol[c]ker – will be sufficient to anchor inflationary expectations without triggering recession,” the UNCTAD report said.  

“Sifting through the economic entrails of a bygone era is unlikely, however, to provide the forward guidance needed for a softer landing given the deep structural and behavioral changes that have taken place in many economies, particularly those related to financialization, market concentration and labor’s bargaining power,” the report said. 

Some U.S. commentators have made similar observations, downplaying the wage-price spirals that drove inflation 40 years ago and emphasizing the globalized nature of today’s economy. 

“There’s a huge Greek chorus out there that believes that inflation could result in a wage-price spiral,” Westwood Capital managing partner Dan Alpert said in an interview. “But that ignores the supply side and ignores the enormous differences between the supply picture in the 1970s, when we did have a wage-price spiral, and today. Today we have an enormous volume of exogenous supply and goods — goods that are coming from all over the world.” 

The Fed has acknowledged that mutual reinforcement of higher wages and higher prices is not at play in the domestic economy, noting in the minutes of its July meeting “the apparent absence of a wage-price spiral.” 

But Fed chair Jerome Powell has often linked the two concepts in speeches and public statements. During a September press conference, he said that members of the Fed’s interest rate-setting committee “expect supply and demand conditions in the labor market to come into better balance over time, easing the upward pressure on wages and prices.” 

Asked how long Americans should be prepared to feel economic pain resulting from interest rate hikes, Powell responded, “How long? I mean it really depends on how long it takes for wages and more than that, prices, to come down for inflation to come down.” 

More broadly, Powell has argued that the pain of recession and economic slowdown is the lesser of two evils, the greater being consistently higher prices for U.S. consumers. 

“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain,” Powell said in August. 

Republicans have taken a hawkish stance against inflation, arguing that wage-price spirals are still a risk for the U.S. economy as it faces recession. 

“Certainly we have a pretty dangerous wage-price spiral. No country wants to be in it, and we’re deeply in it. We have stagflation, just the traditional definition of it,” House Ways and Means ranking member Kevin Brady (R-Texas) said on the CNBC television network on Monday. 

“What worries me is I’m not sure the Fed knows what the unemployment rate needs to be to decelerate inflation. Therefore, I don’t think they know what the economic growth should be slowed to achieve that. I’m just worried that they’re winging it here,” he said. 

Despite differences on the risk posed by inflation, some Republicans and U.N. economists agree that the previous period of extra-loose monetary policy over the last decade was excessive. 

“We had a real easy money policy for too long and asset prices got inflated, got a little overdone, and now as we’re normalizing interest rates, it’s going to tend to take some of the wind out,” Sen. Pat Toomey (R-Pa.) said in an interview. 

U.N. economists said much of the same thing in a statement released with Monday’s report. 

“In a decade of ultra-low interest rates, central banks consistently fell short of inflation targets and failed to generate healthier economic growth,” UNCTAD wrote. (UN warns of a global recession as countries race to lower inflation  | The Hill)

Pound Plunges Against Dollar

By, Jill Lawless And Danica Kirka

UK markets were in focus as the pound crashed to an all-time low and bond yields surged to the highest in more than a decade, sparking talk of emergency action by the Bank of England on Monday, September 26th. The market mayhem unleashed by the government’s fiscal plan on Friday went into overdrive after the government pledged further tax cuts.

The Bank of England sought to reassure financial markets after the British pound touched an all-time low against the U.S. dollar, but its entreaty fell flat for investors concerned about a sweeping package of tax cuts that further jolted a faltering economy that the government’s plan was meant to prop up.

The central bank said it was “closely monitoring” the markets and would not hesitate to boost interest rates to curb inflation. Its statement came after the pound plunged as low as $1.0373, the lowest since the decimalization of the currency in 1971, on concerns that tax cuts announced Friday by Treasury chief Kwasi Kwarteng would swell government debt and fuel further inflation as the United Kingdom teeters toward recession.

The bank, which raised rates Thursday, said it would fully assess the government’s tax and spending commitments before it meets next in November and “will not hesitate to change interest rates by as much as needed to return inflation to the 2% target sustainably in the medium term.”

Also Monday, the U.K. Treasury said it would set out a medium-term fiscal plan on Nov. 23, alongside an economic forecast by the independent Office for Budget Responsibility.

The statements did little to ease misgivings about the government’s economic policies, with the pound dropping from $1.0857 to $1.0664 after they were issued. The pound had rallied from the record low earlier in the day on expectations that the central bank might take action to stabilize the currency.

The weakening pound piles pressure on the new Conservative government, which has gambled that it can slash taxes to spur economic growth while at the same time borrowing billions of pounds to help consumers and businesses struggling with soaring energy costs. Many economists say it’s more likely to fuel already high inflation, push down the pound and drive up the cost of U.K. government borrowing — a potential perfect storm of economic headwinds.

Kwarteng has been criticized for failing to release any independent analysis of the plans when he announced the U.K.’s biggest tax cuts in 50 years.

The government plans to cut 45 billion pounds ($49 billion) in taxes at the same time as it spends more than 60 billion pounds to cap energy prices that are driving a cost-of-living crisis.

Kwarteng and Prime Minister Liz Truss, who replaced Boris Johnson as prime minister on Sept. 6, are betting that lower taxes and reduced bureaucracy eventually will generate enough additional tax revenue to cover government spending. Economists suggest it is unlikely the gamble will pay off.

Opposition Labour Party economy spokeswoman Rachel Reeves accused the government of “a return to trickle-down economics, an idea that has been tried, has been tested and has failed.”

“They are not gambling with their money — they are gambling with yours,” she told an audience at the party’s annual conference Monday.

The new and untested Truss also faces pressure from a nervous Conservative Party, which faces an election within two years.

Some Conservatives have welcomed the tax-cutting moves as a return to free-market values after years of state intervention in the economy during the coronavirus pandemic. But others worry it is unconservative for the government to rack up huge debts that taxpayers will eventually have to pay.

Monday’s turbulence follows a 3% fall in the pound Friday, the biggest one-day drop against the U.S. dollar since Johnson announced Britain’s first COVID-19 lockdown on March 18, 2020. Before that, the pound lost more than 10% of its value immediately after the U.K. voted to leave the European Union in June 2016 before rebounding.

The sense of a government losing control led some to compare current events with Sept. 16, 1992 — “Black Wednesday” — when a collapsing pound against the backdrop of high inflation forced the U.K. to crash out of the European Exchange Rate Mechanism, which was meant to stabilize exchange rates. It took the U.K. years to recover from the economic shock.

Kwarteng insisted the government was acting responsibly — and said there were more tax cuts to come.

“We’ve only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it is the British people that are going to drive this economy,” he told the BBC.

As it is cutting taxes, the government plans to cap electricity and natural gas prices for homes and businesses to help cushion price rises that have been triggered by Russia’s war in Ukraine and have sent inflation to a near 40-year high of 9.9%.

This program will cost 60 billion pounds, and the government will borrow to finance it, Kwarteng said Friday.

He said Sunday that it was the right policy because the government needed to help consumers squeezed by the unprecedented pressures caused by the war in Ukraine and the pandemic.

Britain can afford the cost because its debt as a percentage of gross domestic product is the second lowest among the Group of Seven large industrial economies, Kwarteng said. He said the government would announce a “medium-term fiscal plan” for reducing the nation’s debt in the coming months.

Rupee Nosedives As Dollar Continues To Gain

A hattrick of record low: The rupee plunged 54 paise to provisionally close at a new all-time low of 81.63 against the US dollar on Monday. It had ended at its lowest ever on both Thursday and Friday, making Monday’s deeper plunge the third successive record low levels in three sessions.

There’s panic: It has been created by the dollar index, which has witnessed strong buying as a strong hedge against interest rate hikes and inflation cycle. The downtrend may continue for the rupee until positive triggers are not witnessed from the inflation forefront, experts feel.

The main story: The dollar has become profitable as the US Fed is hiking rates to tame inflationary trends in its market. The dollar rally reflects the ‘flight-to-safety’ approach by investors. As a result the Asian markets have become riskier and are experiencing crisis-level stress again. Two most significant Asian currencies — the yen and the yuan — have been falling under the dollar’s assault. The US is hawkish, the Asians are dovish.

RBI has a job to do: Its monetary policy committee (MPC) is meeting this week and is expected to hike rates by 50 basis points. Market experts feel this could provide some respite to the rupee but it still may lie in the 80.50-81.50 range.

Pressure on forex: RBI has been holding the rupee for quite some time through rate hikes and by selling dollars from its foreign exchange reserves. But this meant that India’s foreign exchange reserves fell below $550 billion for the first time in nearly two years last week, which marked the seventh successive week of forex decline.

And shares? The 30-share BSE index tanked 953.70 points to settle at 57,145, recovering after plummeting 1,061 points during the day. The NSE Nifty fell 311.05 points to close at 17,016. In the last four sessions, the Sensex has lost about 2,575 points and the market capitalisation of the BSE-listed companies reduced by over Rs 13.3 lakh crore.  (Times Of India)

Biden’s Student Loan Forgiveness Plan To Cost $400 Billion

President Joe Biden’s plan to forgive $10,000 in federal student debt for most borrowers will cost the government about $400 billion, the nonpartisan Congressional Budget Office said in an estimate released Monday.

The CBO’s evaluation of the administration’s policy said the price tag is “a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022.”

The estimate applies to the plan Biden announced last month to forgive $10,000 in federal student loan debt for borrowers earning less than $125,000 and $20,000 for borrowers who received Pell Grants.

The Congressional Budget Office (CBO) said 43 million borrowers shared $1.6 trillion in federal student loan debt as of June 30. Under Biden’s plan, about $430 billion of that debt will be wiped out, the reporting shows.

The CBO also estimated the costs for the Biden administration’s recent renewal of the moratorium on federal student loan payments and interest accrual, which had been set to lapse at the end of August. The extension, which punts the deadline to the end of the year, was projected to cost $20 billion in the new report. 

As of the end of June, 43 million borrowers held $1.6 trillion in federal student loans and about $430 billion of that debt will be canceled, the CBO estimated. The White House, borrowing language from the CBO analysis, responded by focusing on the agency’s own assessment that its $400 billion estimate was “highly uncertain.”

“CBO called its own estimate ‘highly uncertain.’ We agree,'” the White House said in a memo. “By law, the federal budget computes the complete cost of student loan relief over the lifetime of the loans, and then records that cost in the year the loans are modified,” the memo continued. “But that’s not how this program will affect the bottom line in reality. The cost to the government is not the long-term score, but rather, the annual lost receipts.”

Biden’s Student Loan Forgiveness Plan To Cost $400 Billion

President Joe Biden’s plan to forgive $10,000 in federal student debt for most borrowers will cost the government about $400 billion, the nonpartisan Congressional Budget Office said in an estimate released Monday.

The CBO’s evaluation of the administration’s policy said the price tag is “a result of the action canceling up to $10,000 of debt issued on or before June 30, 2022.”

The estimate applies to the plan Biden announced last month to forgive $10,000 in federal student loan debt for borrowers earning less than $125,000 and $20,000 for borrowers who received Pell Grants.

The Congressional Budget Office (CBO) said 43 million borrowers shared $1.6 trillion in federal student loan debt as of June 30. Under Biden’s plan, about $430 billion of that debt will be wiped out, the reporting shows.

The CBO also estimated the costs for the Biden administration’s recent renewal of the moratorium on federal student loan payments and interest accrual, which had been set to lapse at the end of August. The extension, which punts the deadline to the end of the year, was projected to cost $20 billion in the new report.

As of the end of June, 43 million borrowers held $1.6 trillion in federal student loans and about $430 billion of that debt will be canceled, the CBO estimated. The White House, borrowing language from the CBO analysis, responded by focusing on the agency’s own assessment that its $400 billion estimate was “highly uncertain.”

“CBO called its own estimate ‘highly uncertain.’ We agree,'” the White House said in a memo. “By law, the federal budget computes the complete cost of student loan relief over the lifetime of the loans, and then records that cost in the year the loans are modified,” the memo continued. “But that’s not how this program will affect the bottom line in reality. The cost to the government is not the long-term score, but rather, the annual lost receipts.”

Rupee Nosedives As Dollar Continues To Gain

A hattrick of record low: The rupee plunged 54 paise to provisionally close at a new all-time low of 81.63 against the US dollar on Monday. It had ended at its lowest ever on both Thursday and Friday, making Monday’s deeper plunge the third successive record low levels in three sessions.

There’s panic: It has been created by the dollar index, which has witnessed strong buying as a strong hedge against interest rate hikes and inflation cycle. The downtrend may continue for the rupee until positive triggers are not witnessed from the inflation forefront, experts feel.

The main story: The dollar has become profitable as the US Fed is hiking rates to tame inflationary trends in its market. The dollar rally reflects the ‘flight-to-safety’ approach by investors. As a result the Asian markets have become riskier and are experiencing crisis-level stress again. Two most significant Asian currencies — the yen and the yuan — have been falling under the dollar’s assault. The US is hawkish, the Asians are dovish.

RBI has a job to do: Its monetary policy committee (MPC) is meeting this week and is expected to hike rates by 50 basis points. Market experts feel this could provide some respite to the rupee but it still may lie in the 80.50-81.50 range.

Pressure on forex: RBI has been holding the rupee for quite some time through rate hikes and by selling dollars from its foreign exchange reserves. But this meant that India’s foreign exchange reserves fell below $550 billion for the first time in nearly two years last week, which marked the seventh successive week of forex decline.

And shares? The 30-share BSE index tanked 953.70 points to settle at 57,145, recovering after plummeting 1,061 points during the day. The NSE Nifty fell 311.05 points to close at 17,016. In the last four sessions, the Sensex has lost about 2,575 points and the market capitalisation of the BSE-listed companies reduced by over Rs 13.3 lakh crore.  (Times Of India)

Pound Plunges Against Dollar

UK markets were in focus as the pound crashed to an all-time low and bond yields surged to the highest in more than a decade, sparking talk of emergency action by the Bank of England on Monday, September 26th. The market mayhem unleashed by the government’s fiscal plan on Friday went into overdrive after the government pledged further tax cuts.

The Bank of England sought to reassure financial markets after the British pound touched an all-time low against the U.S. dollar, but its entreaty fell flat for investors concerned about a sweeping package of tax cuts that further jolted a faltering economy that the government’s plan was meant to prop up.

The central bank said it was “closely monitoring” the markets and would not hesitate to boost interest rates to curb inflation. Its statement came after the pound plunged as low as $1.0373, the lowest since the decimalization of the currency in 1971, on concerns that tax cuts announced Friday by Treasury chief Kwasi Kwarteng would swell government debt and fuel further inflation as the United Kingdom teeters toward recession.

The bank, which raised rates Thursday, said it would fully assess the government’s tax and spending commitments before it meets next in November and “will not hesitate to change interest rates by as much as needed to return inflation to the 2% target sustainably in the medium term.”

Also Monday, the U.K. Treasury said it would set out a medium-term fiscal plan on Nov. 23, alongside an economic forecast by the independent Office for Budget Responsibility.

The statements did little to ease misgivings about the government’s economic policies, with the pound dropping from $1.0857 to $1.0664 after they were issued. The pound had rallied from the record low earlier in the day on expectations that the central bank might take action to stabilize the currency.

The weakening pound piles pressure on the new Conservative government, which has gambled that it can slash taxes to spur economic growth while at the same time borrowing billions of pounds to help consumers and businesses struggling with soaring energy costs. Many economists say it’s more likely to fuel already high inflation, push down the pound and drive up the cost of U.K. government borrowing — a potential perfect storm of economic headwinds.

Kwarteng has been criticized for failing to release any independent analysis of the plans when he announced the U.K.’s biggest tax cuts in 50 years.

The government plans to cut 45 billion pounds ($49 billion) in taxes at the same time as it spends more than 60 billion pounds to cap energy prices that are driving a cost-of-living crisis.

Kwarteng and Prime Minister Liz Truss, who replaced Boris Johnson as prime minister on Sept. 6, are betting that lower taxes and reduced bureaucracy eventually will generate enough additional tax revenue to cover government spending. Economists suggest it is unlikely the gamble will pay off.

Opposition Labour Party economy spokeswoman Rachel Reeves accused the government of “a return to trickle-down economics, an idea that has been tried, has been tested and has failed.”

“They are not gambling with their money — they are gambling with yours,” she told an audience at the party’s annual conference Monday.

The new and untested Truss also faces pressure from a nervous Conservative Party, which faces an election within two years.

Some Conservatives have welcomed the tax-cutting moves as a return to free-market values after years of state intervention in the economy during the coronavirus pandemic. But others worry it is unconservative for the government to rack up huge debts that taxpayers will eventually have to pay.

Monday’s turbulence follows a 3% fall in the pound Friday, the biggest one-day drop against the U.S. dollar since Johnson announced Britain’s first COVID-19 lockdown on March 18, 2020. Before that, the pound lost more than 10% of its value immediately after the U.K. voted to leave the European Union in June 2016 before rebounding.

The sense of a government losing control led some to compare current events with Sept. 16, 1992 — “Black Wednesday” — when a collapsing pound against the backdrop of high inflation forced the U.K. to crash out of the European Exchange Rate Mechanism, which was meant to stabilize exchange rates. It took the U.K. years to recover from the economic shock.

Kwarteng insisted the government was acting responsibly — and said there were more tax cuts to come.

“We’ve only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it is the British people that are going to drive this economy,” he told the BBC.

As it is cutting taxes, the government plans to cap electricity and natural gas prices for homes and businesses to help cushion price rises that have been triggered by Russia’s war in Ukraine and have sent inflation to a near 40-year high of 9.9%.

This program will cost 60 billion pounds, and the government will borrow to finance it, Kwarteng said Friday.

He said Sunday that it was the right policy because the government needed to help consumers squeezed by the unprecedented pressures caused by the war in Ukraine and the pandemic.

Britain can afford the cost because its debt as a percentage of gross domestic product is the second lowest among the Group of Seven large industrial economies, Kwarteng said. He said the government would announce a “medium-term fiscal plan” for reducing the nation’s debt in the coming months.

People Are Trying To Flee The Empire State For Warmer Destinations. Here’s Why.

New York has lost more residents than any other state, a new report by moveBuddha, a company that calculates moving cost, said.  New York, maybe the people don’t quite love you anymore.

According to a new report by moveBuddha, a site where people can calculate their moving costs, New York lost more residents than any other state between April 1, 2020 and July 1, 2021, according to the U.S. Census Bureau population estimates.

Over that period, the state lost 319,020 people. New York state’s population as of 2020 was 20.2 million, according to the Census Bureau.

The report also used data collected from users looking for moving options on moveBuddha’s website between January 1, 2022 and August 5, 2022.  There were around 282,000 queries during this period.

New York is the fourth most-searched state to move out of this year, the company added. That’s behind New Jersey, California, and Illinois.

People are leaving for reasons that include unemployment or underemployment, skyrocketing rents, high cost of living, and high taxes, as compared to other states, moveBuddha said in the study.

People also appear to be leaving the Empire State for warmer pastures. New York to Los Angeles was the most popular search on moveBuddha. About 20% of New Yorkers looking to move were planning to head to Florida, followed by California, and Texas.

Of course, some parts of New York City are still hot. Rising rents and increasing pressure for workers to be in the office is driving demand for apartments in the city.

There’s also evidence that some people who left New York City earlier in the pandemic are coming back. And some are ready to spend on real estate. ‘Out of towners’ returning to New York (many of whom are actually returning former residents) have an average maximum housing budget of $1.3 million, while locals have budgeted an average maximum of $998, 011 for a home purchase, a recent Redfin report found.

But moveBuddha says that neighborhoods in Queens, the Bronx and Brooklyn all have more folks looking to leave, rather than move in, this year.

The report also found that four of the top 10 counties that saw a population decline between the same time period are in New York City: New York County (i.e. Manhattan), Kings County (i.e. Brooklyn), Bronx County, and Queens County.

Based on users searching on the moveBuddha site, the number of moves-out outnumbered the number of moves-in Jamaica, N.Y., Bronx, N.Y. and Staten Island, N.Y. the fastest.

In other words, for every 100 people moving out of Jamaica, only 27 people moved in. In the Bronx, that number was 36, and in Staten Island, 27.

The most popular city of origin for people moving to New York was San Francisco, moveBuddha added.

Nonetheless, there have been some gains for the Empire State: moveBuddha saw a lot more people moving in than out into Webster, N.Y., Ithaca, N.Y., and Fairport, N.Y.

The typical home price in Webster and in Fairport, or otherwise together known as Rochester, N.Y., was around $218,000, according to Zillow’s Home Value Index. Home values are up 11.2% from the previous year.

In Ithaca, a college town, the typical home is roughly $302,000, according to Zillow. Homes have grown in value by 21.3% from last year.

Got thoughts on the housing market? Write to MarketWatch reporter Aarthi Swaminathan at [email protected]

World Could Face Recession Next Year: World Bank Report

The world could face a recession next year amid simultaneous tightening of monetary policy by central banks around the world, the World Bank has said in a new report that called for boosting production and removing supply bottlenecks to ease inflation. Several indicators of global recessions are already “flashing signs”, the report said. The global economy is now in its steepest slowdown following a post-recession recovery since 1970, it added.

Global interest rate hikes by central banks could reach 4%, double that in 2021, just to keep core inflation — which strips out volatile items such as food and fuel — at 5% levels, the bank said.

From the US to Europe and India, countries are aggressively raising lending rates, which aim to curb the supply of cheap money and thereby help bring down inflation. But such monetary tightening has costs. It dampens investment, costs jobs, and suppresses growth, a trade-off faced by most nations, including India.

“Global growth is slowing sharply, with further slowing likely as more countries fall into recession. My deep concern is that these trends will persist, with long-lasting consequences that are devastating for people in emerging market and developing economies,” World Bank president David Malpass said in a statement after the report was released on Thursday.

The world is facing record inflation due to factors including the Ukraine war that has dwindled food supplies, knock-on effects of the pandemic on supply chains, poor demand in China due to its persistent Covid lockdowns, and extreme weather that has upended forecasts of agricultural output.

The Reserve Bank of India (RBI) announced a third repo rate hike to 5.40% in August, up 50 basis points. A basis point is one-hundredth of a percentage point. The RBI maintained its inflation estimate at 6.7% for 2022-23 while forecasting real (inflation-adjusted) GDP growth at 7.2%.

Repel The Recession With These 5 Tips

It doesn’t hurt your bottom line to take a step back and self-evaluate. Learn how you’ll be able to repel the recession with these 5 tips.

While the professional pundits debate when or if an economic recession is imminent, it may be a good idea to ensure you’re prepared, nonetheless. It doesn’t hurt your bottom line to take a step back and self-evaluate. Learn how you’ll be able to repel the recession with these 5 tips.

Live Your Life Within Your Means

Many of you may already live your everyday lives with this money-management strategy and if you do, then you’re ahead of the curve. But let’s be honest, we all know people who do not live within their means. Saying ‘no’ when deciding on an unneeded purchase is a skill that sometimes needs to be learned.

It’s important to carefully weigh all decisions about money, especially if a recession is looming. Don’t get caught in the trap of thinking the recession may not last long. The more conscious you are about spending habits, the more you can avoid going into debt with credit cards and loans. It’s better to save now and put off making big purchases, then to build up your debt and struggle to get out from under it later in life. Speaking of saving…

Look For Ways to Save

It’s always a good idea to audit your own finances. Most people are aware of their paycheck, but they are often fuzzy about the money that leaves their account. Re-evaluate your monthly subscriptions. Do you need every single streaming service? How often do you make coffee runs to your local café? It might be time to brew a cup from home.

Divide your monthly expenses into wants and needs. Make sure you’re not overpaying for those wants. Cut down on the trips to the restaurants. If you had any planned vacations or renovations, it might be in your best interest to postpone. Perhaps we learned all those money-saving tricks during the 2020 quarantine for a reason. It might be time to revisit those lessons.

Have an Emergency Fund

You may call it a rainy-day fund. If so, the skies are getting cloudy. If you haven’t already put money aside in a secured FDIC account for emergencies, it may be time to start. In the event of a lost job or your forced to take a pay cut, you want the flexibility to cover expenses while you engage in a plan of action. This fund is designed for necessary expenses. Be diligent with how you use the money. Again, you don’t know how long a potential recession could last.

Obtain Additional Income

A smart tactic — and one that’s been popularized in recent years — is finding other streams of revenue outside of your job. We live in a gig economy and the skills you’ve honed at your current employer may prove valuable in a consulting capacity. You could replace any lost income from a job loss or salary reduction by uncovering potential freelancing opportunities in your specialty. It doesn’t hurt to add more skills to your resume. The more you know how to do, the more attractive you become to your current or future employer.

Anticipate the Worst

No one expects to lose their job, but don’t be unprepared if it happens. It would be appropriate for you to consider your options in the event of the unthinkable. Update your resume. Update your LinkedIn profile. All those professional relationships you developed, both online and in-person, could become leads to new positions. Prepare for the worst, expect the best.


McKinsey CEO, Bob Sternfels Calls It India’s Century

McKinsey & Co CEO Bob Sternfels has said, it will not just be India’s decade, but India’s century, with all key components in place – a big working inhabitants, multinational corporations reimagining world provide chains, and a rustic leapfrogging at digital scale-to obtain one thing particular not only for the Indian financial system, however probably for the world.

“Many individuals have stated that it is India’s decade. I truly assume it is India’s century once we have a look at a few of the uncooked components right here. India is the longer term expertise manufacturing unit for the world. By 2047, India would have 20 per cent of the world’s working inhabitants,” Sternfels said in an interview with Economic Times.

According to him, India would be the world’s future expertise manufacturing unit as it should have 20 per cent of the globe’s working inhabitants by 2047. “India has leapfrogged on the digital scale. All these are the uncooked supplies to do one thing particular for not solely the Indian financial system however probably for the world,” he added.

McKinsey plans a “disproportionate commitment” to India and that’s why its global board will be coming to the country in December.  The firm has 5,000 people in India, a number he wants to double to 10,000.

Sternfels also spoke about the current scandals which have hit McKinsey, the state of the worldwide financial system, inflation woes and deglobalisation.

Reacting to a question regarding what the CEOs are telling concerning the state of their corporations, Sternfels said, “One of many issues that I did over the previous 12 months was get out and speak to purchasers, and I’ve talked to over 500 of our CEOs within the final 12 months.

“CEOs now wish to play offence and protection on the similar time. So defensive measures… shore up the steadiness sheet, enhance effectivity, and make sure the firm can face up to shocks. They’re additionally saying, my steadiness sheet is more healthy than it was in both of these downturns. And I wish to truly take two or three large strategic bets in order that I can come out on prime,” he added.

Mukesh Ambani Plans Next-Gen Leadership At Reliance Industries

Mukesh Ambani, Chairman and Managing Director of RIL, laid emphasis on Next-Gen leadership roles while he will continue to provide hands-on leadership. The 45th annual general meeting of Reliance Industries Limited (RIL) has set the stage for Next-Gen leadership.

Akash and Isha Ambani have assumed leadership roles in Jio and Retail, respectively, while Anant has joined New Energy business. They are part of a young team of leaders and professionals mentored by senior leaders, Mukesh Ambani outlined.

Mukesh Ambani will continue to provide hands-on leadership and along with existing leaders and Board of Directors, will work towards making Reliance more robust, resilient and truly future-ready.

Strengthening institutional underpinning for Reliance by enriching Reliance’s leadership capital and institutional culture along with a robust governance system to ensure accountability at all levels was another emphasis area at the AGM.

Creating robust architecture for tomorrow’s Reliance to ensure that it remains a united, well-integrated and secure institution even as it develops existing businesses and adds new growth engines, Ambani outlined.

V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “A highlight of the AGM was Mukesh Ambani’s emphasis on succession planning. He concluded his address by seeking everyone’s blessings for the Gen Next taking over the reins confidently.

“With Akash heading Jio, Isha heading Retail and Anant heading Energy, the plans are clearly spelt out. Mukesh Ambani’s promise to double the value of the company by 2027 is reassuring. His commitment to India and faith in the India growth story remains as strong as ever.” (IANS)

Thousands Of Yellow Cab Owner-Drivers To See Debt Relief They Won After 45-Day Camp Out And 15-Day Hunger Strike

(New York, NY) Thousands of yellow cab medallion owner-drivers will finally begin to see the debt relief they won after NYTWA members held a 45-day camp out and 15-day hunger strike last November, as City Hall announced today that the program to provide a city-backed guarantee on restructured loans will be operational starting September 19th.

Under the program, loans that are reduced by medallion lenders to no more than $200,000 will receive a $30,000 grant and the remaining balance will be guaranteed by the city in case of default.

The average debt is currently $550,000 with average monthly payments at $3,000. Under the final program, the new loan term for thousands will be $170,000 payable at $1,234 per month.

The final program reflects an increase in interest agreed upon in November 2021 from 5% to 7.3% as rates have gone up due to inflation; and a longer term of 25 years from 20 years to help drivers offset some of that cost.

The loan will be secured by a city-backed guarantee, relieving thousands of drivers from the fear of losing their homes or thousands of dollars in case of default.

Marblegate Assets, the largest holder of loans, is ready to begin restructurings on September 19th – bringing immediate relief to the largest segment of owner-driver borrowers.

The City’s program is for all lenders and all eligible medallion owners (medallion owners who do not own more than 5 medallions.) Other lenders representing hundreds more loans are expected to also participate.

NYTWA Executive Director Bhairavi Desai said: “We are finally at the starting line of a new life for thousands of drivers and our families. The city-backed guarantee is a ground-breaking program that will save and change lives. We are thankful to City Hall, the TLC, the Mayor’s Office of Management and Budget, the Law Department, and to Marblegate for burning the midnight oil to set up this historic program to address the crisis of debt across the industry. As we collectively work to end this crisis and hit re-start, we look forward to working with all lenders. I congratulate all of our union members who chose to organize, and not despair, and won back their lives. Against the darkness of a crushing debt, their courage remained the light, and today, the triumph is fully theirs.”


Since City Hall agreed to a city-backed guarantee in November 2021, the Adams administration’s TLC, Office of Management and Budget and Law Department have been working to make the program operational. The City negotiated program terms and documents with Marblegate Assets, the largest medallion loan holder, and NYTWA.

NYTWA members voted unanimously to give their sign-off at the end of negotiations.

The new terms for drivers means:

  • No personal guarantee in case of default
  • No Confession of Judgment; COJ are pre-signed documents by the borrower accepting responsibility in case of default and waving their right to a hearing. Lenders would be empowered to skip the court process including a trial to receive a judgment that could then be collected on immediately; including going after people’s homes as the COJ would be combined with a personal guarantee.
  • No balloon payments; Balloon payments meant that the lender could demand the full balance on a loan at the end of a balloon which would typically be every 3 or 5 years. Owner-drivers would be forced to agree to any new terms, including high interest rates, the lender would demand at the end of the balloon.
  • No pre-payment penalty in case a borrower wants to pay off the loan earlier


Click here to see our statement on November 3, 2021 when the agreement was first reached

India Ranks Seventh In Digital Currency Ownership Worldwide: UN

The United Nations announced that the Covid-19 pandemic has caused an unprecedented rise in According to a report by the United Nations Conference on Trade and Development (UNCTAD), around 7.3 percent of Indians owned some form of digital currency in 2021. This highlights that over the last couple of years, digital assets have surged to popularity among the Indian populace amounting to over 100 million crypto holders.

Cryptocurrency use worldwide has risen, with India moving up to the seventh-highest position in terms of ownership. The UN noted that 7.3 percent of Indians possessed assets in the form of digital currency as of 2021. According to data from 2021, developing nations made up 15 of the top 20 economies in terms of the percentage of the total population that owns cryptocurrency. The statistics for other nations were also provided by UNCTAD (United Nations Conference on Trade and Development).

The report also states that 15 of the top 20 nations in terms of digital currency ownership were developing countries, with India ranking 7th, one position behind the US. Pakistan also made it to the list coming in 15th while the UK and Australia occupied the 13th and 20th positions respectively. Topping the list was Ukraine, with 12.7 percent of its population holding crypto assets.

As per the UNCTAD report, the crypto ecosystem ballooned by over 2,300 percent between September 2019 and June 2021. However, Indian investors have grown sceptical of these digital assets, with regulatory bodies coming down hard on cryptocurrencies.

While buying and selling crypto assets is not illegal, profits from the same are being treated as winnings from gambling, and the income from the transfer of virtual assets is being taxed at 30 percent. On top of this, there is also one percent TDS deduction on all transactions.

Earlier this year, crypto exchanges in the country were also forced to halt UPI payments due to uncertainty from regulatory bodies. This made it harder to acquire digital assets. Such uncertainties are also driving crypto firms to set up bases elsewhere, with several projects looking to countries like Dubai as a hub for digital asset operations.

Billionaires Grow, India Shrinks: Triumph Of Crony Capitalism

Around two months ago, India’s fastest growing businessman remarked that if India became a USD 30-trillion-economy by 2050, no one would go to bed on an empty stomach.

While speaking at a conclave, Gautam Adani said, “We are around 10,000 days away from the year 2050. Over this period, I anticipate we’ll add about USD 25 trillion to our economy. This translates to an addition of USD 2.5 billion to the GDP every day. I also anticipate that over this period, we’ll have eradicated all forms of poverty.”

He anticipated that the stock markets would add about USD 40 trillion in market capitalisation, which translated to an addition of USD 4 billion every day until 2050. “Uplifting the lives of 1.4 billion may feel like a marathon in the short run, but it’s a sprint in the long run,” concluded Adani.

Well, those who attended the conclave would have actually felt that the person, who is now a frontrunner for the richest person in the world, also thinks of the poor. We can only wish that India’s growth story could also lead to the growth of each and every fellow citizen. However, it all seems to be a figment of the imagination!

Incidentally, the industrialist, who runs a slew of businesses from airports to ports to power generation to distribution to cement manufacturing to infrastructure development, has added USD 49 billion to his wealth in 2021! The figure is much higher than the world’s two richest persons – Elon Musk and Jeff Bezos – at that time. Jeff Bezos has moved to the third position recently.

In fact, during 2020 when the entire world came to a standstill due to the pandemic, Adani’s wealth grew at a much higher speed than the coronavirus! Immediately before the onset of the pandemic, he bought a lavish bungalow at one of the posh localities of the national capital. Unlike Ambani’s Antilia, not much has been written about his bungalow. However, the land size is much bigger than that of Ambani, if reports are to be believed.

In the month of February, Adani overtook Ambani to become Asia’s richest person. His net worth stood at USD 88.5 billion at that time. In a matter of five months, it stands at USD 115.5 billion! Be that as it may, his growth rate is certainly exponential!

Of late, Forbes has placed him at the fourth place in the list of world’s richest people. Incidentally, he just crossed Bill Gates, who has been donating his wealth to charity and who wishes to be kicked off this list.

Let us see how India’s economy fared during the last two years. The continuous lockdown in the year 2020 followed by the second wave in a few months from the unlock phase, had jolted the Indian economy. Despite this, we are termed as the fastest growing country. However, there is a caveat to this statement.

The combined fiscal deficit of the Centre and the states is more than 10 percent of the Gross Domestic Product. It only means that the government had to print more money to keep the machinery called the Indian economy going. It is an established fact that growth at the cost of fiscal consolidation is not a good practice.

We saw a similar trend in the pre-liberalisation period. In fact, India has registered a growth rate of 5.3 percent in the 1980s. However, high fiscal deficit had brought the country on the verge of bankruptcy. High fiscal deficit increases the current account deficit leading to inflation and exhaustion of foreign reserves.

During 2020-21, the Centre had a fiscal deficit of 9.6 percent, understandably to combat the emergency posed by the Covid-19 pandemic. The economic slowdown had impacted the revenue. The government had no option but to print more money. The deficit was reduced to 6.9 percent in 2021-22. The finance minister has projected it to be at 6.4 percent, which is at a higher end.

Of late, a lot is being talked about global recession in view of the Russia-Ukraine war. Experts in our country have been maintaining a stand that the Indian economy is strong enough to bear this jolt. At least the economic facts do not validate such statements.

One, foreign investors have been exiting the Indian market. Resultantly, the current value of the Rupee has gone down considerably. The exchange value of the dollar has touched Rs. 80. Generally, recession is tackled by printing more money, which means higher fiscal deficit. In the current scenario, where fiscal deficit is already high, it will be suicidal to increase it to the levels of the covid year.

A government which believes in populism will find it tempting to print more money for political reasons, a move which may not gel well with the foreign investors. The rupee may further plunge, giving way to inflation, making people at the bottom of the pyramid more vulnerable.

While people like Adani may continue to make wealth, the poor will become poorer day by day. The last few years beginning with demonetisation, imposition of GST, the sudden economic closure due to the pandemic, have affected the poor badly. The ongoing war between Russia and Ukraine has triggered retail inflation. Items of daily use have become expensive. Fuel prices have touched new heights.

On the top of it, the government’s decision to levy taxes on essential items will only make their life miserable. If one looks at the latest unemployment data released by the Centre for Monitoring Indian Economy (CMIE), it has shot up to 7.8 percent in June, with a loss of 13 million jobs, mainly in the agriculture sector. Not only this, 2.5 million people lost jobs amongst the salaried employees.

The government reduced the demand for armed personnel of late by announcing a new scheme. The job opportunities in the private equity-funded market have also started reducing. The situation is all-the-more worrying. High inflation coupled with reducing income levels, will only add more people to below the poverty line, increasing the pressure on government-funded schemes like the national food security act (NFSA), NREGA etc.

This only means more fiscal deficit, malnutrition, impacting the lives of children, women and the elderly. The youth who is left with no avenues to earn a livelihood, is more likely to contribute to social evils like drug addiction, crime etc. Uneducated, unskilled, unemployable youth will only add on to the economic burden. Unlike Japan, India will not be able to leverage this period when the young population is higher than ageing ones.

A report from the international food policy research (IFPRI) published a few days ago should set the alarm bells ringing. The institute has estimated that India’s food production is likely to reduce by 16 percent due to climate change. We have already witnessed the plunge in wheat production this year forcing us to stop exports. The quantity of wheat being distributed through the public distribution systems under schemes like NFSA have also been reduced. At many places, wheat has been completely replaced by rice and other cereals.

In view of the current circumstances, the IFPRI has also estimated that the number of people at risk for hunger is expected to increase by 23 percent. In fact, 73.9 million people are expected to be at risk in 2030. The report says that if the effect of climate change is factored in, the number is likely to increase to 90.6 million people in India coupled with reduction in food production. Globally, the production may increase considerably by 2050 but unfortunately people affected by hunger are expected to increase by 500 million people!

One can easily imagine how defective government policies, where the rich are favoured at the cost of the poor, will make the poor poorer year on year. It is because of this reason that India’s growth story has not been able to transform the lives of the marginalised and the underserved.

When it comes to the poor, the government looks at them from the lens of potential voters not as growth catalysts. The likes of Nirav Modi, Vijaya Mallya etc. enjoy the clout to exploit the system to their favour while the common man struggles to get a loan approved for setting up his enterprise.

As far as Adani’s statement is concerned, it certainly speaks about a world that seems to be Utopian. We can only imagine a world where no one sleeps with an empty stomach. It can only happen if the government does a serious introspection, introduces taxes to regulate the unquestioned growth of a few and invests the money for the benefit of the poor, something on the lines of Thomas Pikkety’s world as presented in his book “Capitalism in 21st Century”.

As of now “Sabka saath, Sabka vikas, Sabka vishwas” is a mere slogan, aimed at winning votes of the people not their hearts. We are set to see the rise of Adanis and Ambanis but not of the poor, who will remain trapped in the inter-generational cycle of poverty.

US House Panel Advances Prior Authorization Relief Bill For Seniors

Newswise — The House Ways and Means Committee has voted unanimously to advance the Improving Seniors’ Timely Access to Care Act of 2022 (H.R. 8487), positioning the bill for passage in Congress possibly this fall. The bill would reform prior authorization under the Medicare Advantage program to help ensure America’s seniors get the care they need when they need it.

Support for this commonsense legislation is overwhelming. The bill has more than 330 cosponsors in the House and Senate, and has been endorsed by more 500 organizations, including the American Academy of Ophthalmology, and more 30 additional ophthalmic subspecialty and state societies.

recent report from the U.S. Department of Health and Human Services Office of Inspector General underscored the need for reform, finding that Medicare Advantage plans have denied prior authorization requests that met Medicare coverage rules.

The bill was introduced by Reps. Suzan DelBene (D-WA), Mike Kelly (R-PA), Ami Bera, MD, (D-CA), and Larry Bucshon, MD, (R-IN). If enacted, the Improving Seniors’ Timely Access to Care Act would streamline and standardize prior authorization in the Medicare Advantage (MA) program, providing much-needed oversight and transparency while protecting beneficiaries from unnecessary care delays and denials. The legislation would improve prior authorization in MA plans by:

Establishing an electronic prior authorization (ePA) program;

Standardizing and streamlining the prior authorization process for routinely approved services, including establishing a list of services eligible for real-time prior authorization decisions;

Ensuring prior authorization requests are reviewed by qualified medical personnel; and

Increasing transparency around MA prior authorization requirements and their use.

This bill has been years in the making. The Academy is a founding member of the Regulatory Relief Coalition, a group of sixteen national physician specialty and two allied organizations advocating for a reduction in Medicare program regulatory burdens to protect patients’ timely access to care and allow physicians to spend more time with their patients. We thank the bill’s sponsors, as well as the chair and ranking member of House Ways and Means Committee, Reps. Richie Neal (D-MA) and Kevin Brady (R-TX).

“We believe this bill will help remove some of the unnecessary red tape that overburdens our healthcare system and prevents us from providing the care America’s seniors need when they need it,” said David Glasser, MD, the Academy’s secretary for Federal Affairs. “We’re confident that when this bill comes to the House floor, Congress will agree with these commonsense reforms.”

How To Understand Mixed Signals From US Economy

(AP) — The U.S. economy is caught in an awkward, painful place. A confusing one, too. Growth appears to be sputtering, home sales are tumbling and economists warn of a potential recession ahead. But consumers are still spending, businesses keep posting profits and the economy keeps adding hundreds of thousands of jobs each month.

In the midst of it all, prices have accelerated to four-decade highs, and the Federal Reserve is desperately trying to douse the inflationary flames with higher interest rates. That’s making borrowing more expensive for households and businesses.

The Fed hopes to pull off the triple axel of central banking: Slow the economy just enough to curb inflation without causing a recession. Many economists doubt the Fed can manage that feat, a so-called soft landing.

Surging inflation is most often a side effect of a red-hot economy, not the current tepid pace of growth. Today’s economic moment conjures dark memories of the 1970s, when scorching inflation co-existed, in a kind of toxic brew, with slow growth. It hatched an ugly new term: stagflation.

The United States isn’t there yet. Though growth appears to be faltering, the job market still looks quite strong. And consumers, whose spending accounts for nearly 70% of economic output, are still spending, though at a slower pace.

So the Fed and economic forecasters are stuck in uncharted territory. They have no experience analyzing the economic damage from a global pandemic. The results so far have been humbling. They failed to anticipate the economy’s blazing recovery from the 2020 recession — or the raging inflation it unleashed.

Even after inflation accelerated in spring of last year, Fed Chair Jerome Powell and many other forecasters downplayed the price surge as merely a “transitory” consequence of supply bottlenecks that would fade soon. It didn’t.

Now the central bank is playing catch-up. It’s raised its benchmark short-term interest rate three times since March. Last month, the Fed increased its rate by three-quarters of a percentage point, its biggest hike since 1994. The Fed’s policymaking committee is expected to announce another three-quarter-point hike Wednesday.

Economists now worry that the Fed, having underestimated inflation, will overreact and drive rates ever higher, imperiling the economy. They caution the Fed against tightening credit too aggressively.

“We don’t think a sledgehammer is necessary,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said this week.

Here’s a look at the economic vital signs that are sending frustratingly mixed signals to policymakers, businesses and forecasters:


As measured by the nation’s gross domestic product — the broadest gauge of output — the economy has looked positively sickly so far this year. And steadily higher borrowing rates, engineered by the Fed, threaten to make things worse.

“Recession is likely,” said Vincent Reinhart, a former Fed economist who is now chief economist at Dreyfus and Mellon.

After growing at a 37-year high 5.7% last year, the economy shrank at a 1.6% annual pace from January through March. For the April-June quarter, forecasters surveyed by the data firm FactSet estimate that growth equaled a scant 0.95% annual rate from April through June. (The government will issue its first estimate of April-June growth on Thursday.)

Some economists foresee another economic contraction for the second quarter. If that happened, it would further escalate recession fears. One informal definition of recession is two straight quarters of declining GDP. Yet that definition isn’t the one that counts.

The most widely accepted authority is the National Bureau of Economic Research, whose Business Cycle Dating Committee assesses a wide range of factors before declaring the death of an economic expansion and the birth of a recession. It defines a recession as “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”

In any case, the economic drop in the January-March quarter looked worse than it actually was. It was caused by factors that don’t mirror the economy’s underlying health: A widening trade deficit, reflecting consumers’ robust appetite for imports, shaved 3.2 percentage points off first-quarter growth. A post-holiday-season drop in company inventories subtracted an additional 0.4 percentage point.

Consumer spending, measured at a modest 1.8% annual rate from January through March, is still growing. Americans are losing confidence, though: Their assessment of economic conditions six months from now has reached its lowest point since 2013 in June, according to the Conference Board, a research group.


What’s agitating consumers is no secret: They’re reeling from painful prices at gasoline stations, grocery stores and auto dealerships.

The Labor Department’s consumer price index skyrocketed 9.1% in June from a year earlier, a pace not seen since 1981. The price of gasoline has jumped 61% over the past year, airfares 34%, eggs 33%.

And despite widespread pay raises, prices are surging faster than wages. In June, average hourly earnings slid 3.6% from a year earlier adjusting for inflation, the 15th straight monthly drop from a year earlier.

And on Monday, Walmart, the nation’s largest retailer, lowered its profit outlook, saying that higher gas and food prices were forcing shoppers to spend less on many discretionary items, like new clothing.

The price spikes have been ignited by a combination of brisk consumer demand and global shortages of factory parts, food, energy and labor. And so the Fed is now aggressively raising rates.

“There is a risk of overdoing it,” warned Ellen Gaske, an economist at PGIM Fixed Income. “Because inflation is so bad right now, they are focused on the here and now of each monthly CPI report. The latest one showed no letup.’’

Despite inflation, rate hikes and declining consumer confidence, one thing has remained solid: The job market, the most crucial pillar of the economy. Employers added a record 6.7 million jobs last year. And so far this year, they’re adding an average of 457,000 more each month.

The unemployment rate, at 3.6% for four straight months, is near a half-century low. Employers have posted at least 11 million job openings for six consecutive months. The government says there are two job openings, on average, for every unemployed American, the highest such ratio on record.

Job security and the opportunity to advance to better positions are providing the confidence and financial wherewithal for Americans to spend and keep the job machine churning. (Courtesy: Associated Press)

Slowdown In Home Prices Broke Record In June

Annual home price growth dropped by nearly 2 percentage points in June, the largest single-month slowdown on record, according to new research.

Black Knight, a real estate software and analytics company that has been tracking the metric since the early 1970s, found that annual home price growth fell from
19.3 percent in May to 17.3 percent in June as the Federal Reserve continued hiking interest rates to cool off demand.

  • Existing home sales have fallen for five consecutive months as record prices and those higher interest rates drive more Americans out of the market. Black Knight’s analysis found that seasonally adjusted home sales were down by more than 21 percent since the start of the year.
  • Slowing sales have led to recent inventory increases, according to Black Knight, but nationally, the United States still faces a shortage of 716,000 home listings. The company estimates it would take more than a year for inventory levels to fully normalize even with record increases.

“While this was the sharpest cooling on record nationally, we’d need six more months of this kind of deceleration for price growth to return to long-run averages,” said Ben Graboske, the president of Black Knight’s data and analytics division. (The Hill)

When Will The Indian Rupee Stop Falling?

The Indian Rupee breached the psychological 80-mark for the first time against the US dollar on Tuesday, July 18th, declining to 80.06 per Dollar. The Reserve Bank of India intervened in the currency market to help the Rupee steady after hitting seven straight intraday record lows. A recovery in domestic shares also favored the Indian currency.

According analysts, a wobbly global macroeconomic environment marked by a spell of monetary tightening unleashed, firstly, by the Federal Reserve and being mimicked in earnest by the major central bank governors across the globe has led to an exodus of hot money from developing economies to the “safe haven” of the Dollar. The scenario is compounded further by record-breaking crude oil prices, which balloon India’s imports, diminish the cumulative value of India’s exports and widen our trade deficit.

It is a regular demand-supply market. Currently, there is a greater demand for Dollars than there is for the Rupee. Two factors have pushed demand — India’s current account deficit has sharply widened particularly after Russia invaded Ukraine, and investment in the Indian economy has fallen due to heavy flight of funds in recent months.

Depreciation of the Rupee makes imported items — including petrol and mobile phones — and gives India’s export a competitive edge. But India is a net importer. For those eyeing a trip abroad, earlier budgets on food, boarding, and transportation will now fall short – leaving one with the option to either expand their budgets or opt for countries where the rupee commands a stronger position compared to their domestic currencies.

The dollar has been appreciating against all currencies including the Euro. Market watchers, in fact, say that the Rupee has fared better compared to other currencies including the Euro.

In FY’22, as per the provisional figures released by the Reserve Bank of India (RBI), India’s current account deficit widened to $38.7 billion from a surplus of $23.9 billion in the previous FY. 

A widening current account deficit indicates that Indians have been converting more of their rupees into dollars to complete trade and investment transactions consequently spiking up the demand for dollars. It doesn’t help that foreign institutional investors (FIIs) have been dumping Indian equities after a strong bullish spell, and making a beeline for US treasury notes and bonds.

The RBI has intervened by selling Dollars to check the Rupee’s slide. Else, the free market would have seen a further weaker Rupee. The current exchange market scenarios suggest that the rupee’s fall may continue for a few more months, breaching even the 82-mark. Congress leader Shashi Tharoor took a dig at the Rupee’s slide saying a “strong government” is “giving us a weaker Rupee”.

US Dollar Gains Are Boon To Americans Traveling Abroad

The surging value of the U.S. dollar in recent weeks is a boon to the American traveler, who will get more bang for their buck overseas despite surging inflation at home.  

But a strong American currency could limit international visitors to the U.S., where tourism firms are still licking their wounds from the height of the pandemic.  

The dollar recently hit parity with the euro for the first time in two decades, making trips to Europe 10 to 15 percent less expensive for Americans than at the same time last year.  

The dollar is also soaring in destinations like Thailand, India and South Korea — countries with ample tourism interest from Americans and relatively weaker economic growth than the U.S. 

“With the rising cost of travel, the strong U.S. dollar is a net positive amidst all the disruption in the industry,” said Erika Richter, vice president of communications at the American Society of Travel Advisors.  Richter noted that Americans are spending 11 percent more on travel compared to 2019. 

The idea of a strong dollar might seem like a farce to Americans after annual inflation hit 9.1 percent in June and the price of gas and food rose far faster. But the dollar has still become more valuable abroad even as it yields less in goods and services at home. 

Demand for the U.S. dollar in other countries has skyrocketed amid concerns about a global recession caused by high inflation, the war in Ukraine and lingering COVID-19 supply shocks.  

While the U.S. is not immune from those threats, the economy has held up far stronger than other nations, making its currency more valuable abroad. The dollar is also used as the world’s reserve currency, meaning foreign individuals and companies will often boost their holdings and conduct transactions in dollars to protect themselves from financial shocks. 

The strength of the U.S. economy has allowed the Federal Reserve to boost interest rates at a much faster pace. That makes the U.S. dollar more expensive to acquire — and more valuable in other countries. 

“A stronger dollar benefits American households directly if they want to travel to Europe, as the relative cost of everything is cheaper. It also makes imports cheaper for American households and businesses,” explained Angel Talavera, head of European economics at Oxford Economics. 

Half of American travelers say high prices kept them from traveling in June, up 8 percentage points from the previous month, according to a recent survey from Destination Analysts. 

But favorable exchange rates blunt the impact of inflation, which has risen at similar rates to the U.S. in Europe. Expedia data found that searches for summer trips to popular European destinations such as Paris, Frankfurt, Brussels, Amsterdam and Dublin rose by double digits last week. Copenhagen, Athens and Madrid saw similar increases in lodging interest, according to 

“The U.S. has never really developed its tourism infrastructure the way Europe has, so a lot of our inventory sold out months ago,” said Leslie Overton, an advisor at travel firm Fora. “While I’m not saying either is cheap, Europe might be considered more competitive than some of the higher end product here in the U.S. right now.” 

One dollar buys roughly 15 percent more than it did one year ago in the 19 European countries that use the euro. The dollar is trading at its highest ever level against India’s rupee and Thailand’s baht. The Mexican peso and Canadian dollar have remained mostly flat.  

But currency fluctuations won’t help much with soaring airfares. While domestic airfare is 13 percent higher than pre-pandemic levels, international flights are 22 percent pricier, according to data from travel firm Hopper. 

Those traveling to parts of Europe face a heightened risk of delays or cancellations.  London’s Heathrow Airport on Wednesday asked airlines to stop selling summer tickets after staffing shortages forced the airport to delay roughly half of its flights this month. The Netherlands’ largest airport is similarly making large cuts to its flight schedules, driving up prices.  

Conversely, the strength of the dollar will make trips to the U.S. far more expensive for many international travelers, potentially weakening the U.S. tourism industry as it aims to claw back some of the millions of jobs lost during the pandemic.  

A stronger U.S. dollar also boosts pressure on global economies to raise their own interest rates to keep up, a force that raises the risk of a severe global recession that could bounce back to the U.S. in dangerous ways. 

The U.S. welcomed 22.1 million inbound travelers in 2021 — down 79 percent from 2019 — amid COVID-19 travel restrictions that lasted throughout most of the year, according to the International Trade Administration. The agency found that the lack of tourism in the U.S. in the first year of the pandemic accounted for 56 percent of the nation’s gross domestic product decline.

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