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.

Picture : Rediff.com

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 Amazon.com 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 thenn.com  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 Powerball.com 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

Money.com 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

Money.com 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, Money.com 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 Money.com. 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. (https://theprint.in/economy/multinationals-starting-to-see-india-as-global-manufacturing-base-citi-investment-bank-boss/1156602/)

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.  (https://www.cnbc.com/2022/10/04/sp-500-down-20percent-for-year-retirement-investors-reconsider-stock-bond-strategy-.html)

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.

(Courtesy: https://barnumfinancialgroup.com/repel-the-recession-with-these-5-tips/)

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.”

BACKGROUND:

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:

THE OVERALL ECONOMY

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.

INFLATION

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 Hotels.com. 

“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.

The Million Missing Workers Could Solve America’s Labor Shortages

By Dany Bahar And Pedro Casas-Alatriste

The recent tragedy of the death of over 50 migrants in an abandoned overheated truck in Texas forces us to reevaluate whether there is a better way for the United States—and there must be—to deal with the immigrants trying to reach the country.  

This reevaluation includes not only adopting a more humanitarian approach to border policies, but also challenging preconceived ideas about these immigrants, which will allow us to embrace them as they are: much-needed workers that can complement the American workforce. 

A ‘help wanted’ sign is posted in front of restaurant on February 4, 2022 in Los Angeles, California. – The United States added an unexpectedly robust 467,000 jobs in January, according to Labor Department data released today that also significantly raised employment increases for November and December. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)

Our argument is simple; the U.S. workforce is aging and cannot meet the economy’s capacity. Yet, for nearly 20 years, U.S. authorities have deported over 1 million immigrants originally from Central America’s Northern Triangle to their home countries through Mexico. But these potential workers are essential to the U.S. right now: Historically immigrants have been young and have joined the workforce in occupations that very few Americans are able or willing to fill today.  

The need to fill these occupations is evident from the market forces that continue to attract immigrants from Mexico and Central America, despite the incredible and increasing difficulties they face crossing the border. On the Mexican side, the use of “coyotes” (people smugglers) has gone up by 30 percent⁠—from about 45 percent in the second half of 2020 to nearly 60 percent in the last quarter of 2020⁠—as measured by surveys of returned Mexican migrants

According to these surveys, coyotes charged sums close to $6,000 per person smuggled in 2019, though that cost is reported to have gone down in 2020, presumably because of the slowdown in crossing caused by COVID-19. Nevertheless, the mere existence of this illicit market on the border is, arguably, a result of the dramatic increase in U.S. efforts—and resources—to stop this migration. In May 2022, U.S. Customs and Border Protection registered 240,000 encounters that month, up nearly 70 percent from May 2019, putting fiscal year 2022 on track to hit a record number of border encounters in recent history.  

Despite the conditions at the border, a deep dive into the data speaks for itself on the need for the U.S. to drastically redesign its migration policy with respect to Mexico and Central America and to put forward legal pathways for immigrants to enter and work in the United States instead of trying to apprehend them at the border.  

Let’s first look at the current American reality. According to the latest data from the U.S. Bureau of Labor Statistics, there were over 11.2 million job openings (May 2022). In the construction industry, there were an estimated 434,000 job openings (May 2022), yet there were just 389,000 unemployed in that same industry (June 2022). In other words, there is a shortage of almost 50,000 workers. In retail trade, the gap is even wider. With 1.14 million job openings and 720,000 unemployed, there is a labor supply deficit of 420,000 people. If that’s still not surprising enough: The number of unemployed people in the accommodation and food services industry is 565,000, while the number of job openings totaled 1.4 million. Even if every worker in that industry were employed, there would still be 835,000 job openings.

From a broader perspective, in just 12 years, adults 65 and older will outnumber children under 18 for the first time in the history of the United States. And shortly after, by 2040, projections suggest the country will have 2.1 workers per Social Security beneficiary. According to these calculations, the system needs at least 2.8 workers per Social Security beneficiary to maintain its economic feasibility.

Let’s now add into the equation some stylized facts about the 1 million workers that the U.S. has deported back to Central America since 2009. The data comes from representative surveys carried out by Colegio de la Frontera, a Mexican research institution that surveys deportees from the U.S. in Mexico’s south border on their way back to their home countries of Guatemala, Honduras, and El Salvador.  

The vast majority of these deportees are men and have a high school diploma or less, according to the most recent data from 2019. They are also overwhelmingly young—with nearly 90 percent of them between the ages 15 to 39 and 65 percent being between the ages 15 to 29. Compare this to all other migrants in the U.S. who have a median age of 46 years.  

Among the deportees that gathered some work experience in the U.S. during their stay (the ones who stayed for longer, naturally), they worked in a very diverse set of occupations that, ironically, have remarkable overlap with the occupations in high demand right now in the U.S. For instance, about 60 percent were in the construction industry, about 20 percent worked in services (such as the food industry), nearly 10 percent worked in industry, and 8 percent were technicians and administrative staff.

Migrants on the U.S. southern border are able and capable of filling labor gaps in the American economy if they are given the chance, particularly in fundamental occupations like the ones we document above. Moreover, perhaps with some skills training, they could fill other in-demand occupations, too.

American politicians and policymakers must act to transform the energy and resources poured into keeping these immigrants away into creating enough legal pathways for these migrants to join the American labor force without further delay. These migrants are already paying enormous costs, endangering their lives, and taking massive risks to come to America, which is a testament to their need and determination.

If the United States wants to grow and compete in the global economy, immigration—including that from the Northern Triangle—is part of the solution, not part of the problem.

Wishing To Be Off Billionaires List, Bill Gates Donates $20 Billion To Foundation

That’s Bill Gates’ estimated net worth, making him the world’s fourth-richest person — but he doesn’t intend to rank that high forever. On Wednesday, the Microsoft co-founder said he wants to “move down and eventually off of the list of the world’s richest people” because he feels “obligated to return his resources to society.” 

On the same day, Gates moved $20 billion of his wealth into the endowment of the Bill and Melinda Gates Foundation, one of the largest philanthropies in the world. The foundation plans to increase its payouts from nearly $6 billion to $9 billion each year by 2026. 

Bill Gates is moving $20 billion of his wealth into the endowment of the Bill and Melinda Gates Foundation, which is ramping up its spending in the face of global challenges, including the pandemic and the war in Ukraine, media reports said. 

The foundation, one of the world’s largest philanthropies, plans to increase its payouts by 50 per cent over pre-pandemic levels, from nearly $6 billion to $9 billion each year by 2026. The foundation is primarily focused on charitable giving that’s aimed at improving global health, gender equality and education, among other issues, CNN reported.

The Microsoft co-founder and his ex-wife, Melinda French Gates, have both pledged to donate the vast majority of their wealth to the foundation they established together 20 years ago, as well as to other philanthropic endeavours.

The couple announced their divorce in May 2021, saying they would work together as co-chairs under a two-year trial period. At the end of that trial, French Gates has the option to resign and receive a payout from her former husband, who would remain in charge of the foundation.

With an estimated net worth of around $ 114 billion, Bill Gates is currently the world’s fourth-richest person, according to Bloomberg’s Billionaire Index, with most of his wealth tied to Microsoft shares.

But he doesn’t intend to rank that high forever. “I will move down and eventually off of the list of the world’s richest people,” Gates wrote in a blog.

“I have an obligation to return my resources to society in ways that have the greatest impact for improving lives. I hope others in positions of great wealth and privilege will step up in this moment too,” he said, CNN reported. (IANS)

Consulate India In New York Organizes Roadshow On One-District-One-Product

The Consulate General of India in New York, in partnership with the Department of Promotion of Industry and Internal Trade (DPIIT) and Invest India, held a Roadshow on One-District-One-Product (ODOP) on July 12th, 2022. The show was attended by stakeholders from the food, hospitality, textiles and relevant business sectors.  

Consul General Shri Randhir Jaiwal gave the opening remarks, talking about the importance of the ODOP initiative and detailing the uniqueness of the products. From Araku coffee, with its distinctive texture, flavour and aroma, to the SIMFED turmeric from the organic state of Sikkim, he talked about the individuality and exclusivity of the items at display.

Joint Secretary from DPIIT, Ms. Manmeet Nanda familiarised the audience with the ODOP initiative and its vision. She elaborated that the whole idea of the initiative is to showcase unique products from different district of India, and that this stems from the mandate of Aatmanirbhar Bharat, focusing on a resilient India that is recognized as a brand globally. Expanding on the same, she talked about the vision of promoting sustainable trade along with creating a direct market link between the makers and buyers of these unique products. 

Explaining the progress that the initiative has made thus far, Ms. Nanda highlighted that more than 700 products with a unique quality and a large export potential have been identified till date. Each product tells a story – a story of creation, craftsmanship, tradition, custom, and people. Today, India’s unique products have ties all over the world. Farmers in Jammu and Kashmir sell walnuts to distant countries like Europe, and international brands sell Indian Pashmina stoles.

Representatives of Invest India took forward the discourse and emphasized the four pillars of the ODOP initiative – ecommerce, marketing, licensing, and selling and trade.

Different products from different parts of the country were showcased, ranging from cardamom tea, millet pasta, saffron, ginger flakes and more. From the north, the range extended from walnut wood carvings to Basohli paintings. From the state of Rajasthan, items of blue pottery were displayed. From the North-East, the variety consisted of coffee, jewellery, and special silks such as Eri Silk and some non-violent silk products. The non-violent silk items are so called as their production does not involve harming of silk worms.

Members of the diaspora were urged to promote products from their districts and adopt the vision of the ODOP scheme.  They were urged to promote ODOP products through gift giving, socially as well as officially.  Earlier, the Consulate had organized a display of ODOP products at Times Square during International Day of Yoga celebrations on 21 June 2022.

Does Immigration Help Developing Countries?

Many talented brains from developing nations like India, the Philippines, Sri Lanka, Bangladesh, and Pakistan have been immigrating to economically progressive and highly developed nations for many years.

They migrate in search of a good quality of life, world-class education for their children, and social security perks, including disability and maternity benefits, unemployment allowance, employment insurance, and other attractive benefits.

This is primarily why many choose to become permanent residents of developed nations such as Canada, the USA, the UK, Australia, and New Zealand. But the youth and skilled professionals who have moved to these nations have also brought in foreign remittances and a good deal of foreign exchange that helps boost the economy and development of a country that is still wanting and in its development stage.

Contributing back home

Many immigrants with well-paying jobs in these overseas nations help their relatives, parents, and near and dear ones by sending them money for assistance. Even students who study in developed nations return home with great knowledge and expertise. They even impart their expertise and aid in medicine, engineering, technology, and other professions.

Immigrants in other nations make it up to their home nations by keeping the foreign remittances flowing. Many of these remittances help ease the constraints of credit in rural areas. It helps accelerate human capital with improved health and educational facilities besides a good lifestyle. Many immigrants who return to their nations build hotels, hospitals, schools, and places of public worship or institution.

In many cases, they make significant donations to charities, which greatly help uplift the poor and marginal areas back in their home countries. Because of their contribution, many needy and underprivileged people find a vehicle and means to make their dreams come true. Immigration has been an excellent life-changer for many people who cannot find adequate help, but through the financial assistance from these immigrants, they find a way to live the life they deserve. (IANS)

US Inflation Hits 40-Year-High, At 9.1% In June

U.S. inflation surged to a new four-decade high in June because of rising prices for gas, food and rent, squeezing household budgets and pressuring the Federal Reserve to raise interest rates aggressively — trends that raise the risk of a recession.

The government’s consumer price index soared 9.1% over the past year, the biggest yearly increase since 1981, with nearly half of the increase due to higher energy costs. 

Lower-income and Black and Hispanic American have been hit especially hard, since a disproportionate share of their income goes toward essentials such as transportation, housing and food. But with the cost of many goods and services rising faster than average incomes, a vast majority of Americans are feeling the pinch in their daily routines.

For 72-year-old Marcia Freeman, who is retired and lives off of a pension, there is no escape from rising expenses.

“Everything goes up, including cheaper items like store brands,” said Freeman, who visited a food bank near Atlanta this week to try and gain control of her grocery costs. Grocery prices have jumped 12% in the past year, the steepest climb since 1979.

Accelerating inflation is a vexing problem for the Federal Reserve, too. The Fed is already engaged in the fastest series of interest rate hikes in three decades, which it hopes will cool inflation by tamping down borrowing and spending by consumers and businesses.

The U.S. economy shrank in the first three months of the year, and many analysts believe the trend continued in the second quarter.

“The Fed’s rate hikes are doing what they are supposed to do, which is kill off demand,” said Megan Greene, global chief economist at the Kroll Institute. “The trick is if they kill off too much and we get a recession.” 

The likelihood of larger rate hikes this year pushed stock indexes lower in afternoon trading. The central bank is expected to raise its key short-term rate later this month by a hefty three-quarters of a point, as it did last month.

As consumers’ confidence in the economy declines, so have President Joe Biden’s approval ratings, posing a major political threat to Democrats in the November congressional elections. Forty percent of adults said in a June AP-NORC poll that they thought tackling inflation should be a top government priority this year, up from just 14% who said so in December.

After years of low prices, a swift rebound from the 2020 pandemic recession — combined with supply-chain snags — ignited inflation.

Consumers unleashed a wave of pent-up spending, spurred by vast federal aid, ultra-low borrowing costs and savings they had built up while hunkering down. As home-bound Americans spent heavily on furniture, appliances and exercise equipment, factories and shipping companies struggled to keep up and prices for goods soared. Russia’s war against Ukraine further magnified energy and food prices.

In recent months, as COVID fears have receded, consumer spending has gradually shifted away from goods and toward services. Yet rather than pulling down inflation by reducing goods prices, the cost of furniture, cars, and other items has kept rising, while restaurant costs, rents and other services are also getting more expensive.

The year-over-year leap in consumer prices last month followed an 8.6% annual jump in May. From May to June, prices rose 1.3%, following a 1% increase from April to May.

Fuelled by increase in the prices of oil, shelter and food, the inflation rate in the US rose to 9.1 per cent in June. The inflation rate rise was the largest 12-month increase since the period ending November 1981.

The US Bureau of Labour Statistics said: “Over the last 12 months, the all items index increased 9.1 percent before seasonal adjustment.”

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 per cent in June on a seasonally adjusted basis after rising 1.0 per cent in May,” it said.

According to the Bureau, the increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors.

The energy index rose 7.5 per cent over the month and contributed nearly half of the all items increase, with the gasoline index rising 11.2 per cent and the other major component indexes also rising.

The food index rose 1.0 percent in June, as did the food at home index.

The all items – less food and energy – index rose 5.9 per cent over the last 12 months. The energy index rose 41.6 percent over the last year, the largest 12-month increase since the period ending April 1980.

The food index increased 10.4 per cent for the 12-months ending June, the largest 12-month increase since the period ending February 1981. (IANS)

280,000 Green Cards Up For Grabs Before September Deadline

The United States Citizenship and Immigration Services (USCIS) is racing against time to issue 280,000 green cards before the fiscal year ends on September 30.

While closures and limited operations at US embassies and consular offices through the pandemic led to high numbers of available employment-based green cards, as of mid-June 2022, USCIS and the US Department of State (DOS) have used significantly more visas than at the same point in FY 2021. USCIS alone using more than twice as many visas on a weekly basis than it was at this point in FY 2021.

Through May 31, 2022, the two agencies have combined to use 149,733 employment-based immigrant visas. “We remain committed to taking every viable policy and procedural action to maximize our use of all available visas by the end of the fiscal year,” the USCIS said in a statement.

Data from the US visa office shows that the US government had 66,781 unused employment-based green cards in the 2021 fiscal year, even as 1.4 million immigrants are queued up for it. A majority of these are Indians, who have been stuck in the green card backlog for years.

“We remain committed to taking every viable policy and procedural action to maximize our use of all available visas by the end of the fiscal year,” the USCIS said in a statement.

Data from the US visa office shows that the US government had 66,781 unused employment-based green cards in the 2021 fiscal year, even as 1.4 million immigrants are queued up for it. A majority of these are Indians, who have been stuck in the green card backlog for years.

USCIS eventually issued 180,000 green cards last year—more than a typical year but still falling short of the total available. The processing time for employer sponsored green cards crossed the three-year wait time in 2022.

Oil Prices Likely To Tumble By Year End, Even If Economies Avoid A Recession

Goldman Sachs reckons crude oil prices are going to $140 in the coming months. JPMorgan said they could even surge to $380 in a worst-case scenario. UBS reckons they’ll hit $130 in September.

But Citi is bucking the trend. The investment bank’s strategists predict oil will fall sharply by the end of the year, from prices of around $100 a barrel on Friday.

Francesco Martoccia, the bank’s head of European commodities strategy, warned in note to clients Tuesday that oil prices could even slump to $65 a barrel by December, if a nasty recession hits.

The same day, oil prices tumbled, with US benchmark WTI crude dropping below $100, as investors worried that central banks’ interest-rate hikes would trigger sharp slowdowns in economic growth. “The timing was exquisite,” Martoccia told Insider this week.

Yet Martoccia and his colleagues expect oil to drop even if there’s no drastic slowdown. Their so-called base case is that the price of global benchmark Brent crude tumbles to $85 a barrel by the end of the year — that’s around 18% lower than Friday’s price of $104.

At the heart of Citi’s contrarian view is its expectation that Russia will keep exporting and producing crude, even as the US and its allies batter the country with sanctions.

Many analysts expect Russian energy exports to fall sharply by the end of the year as the European Union gradually bans purchases from the country. The G7 is also exploring how to cap Russian oil prices — which could cause exports to drop further.

The logic is simple. Unable to sell its oil, Russia will shut down production. Buyers will then be competing for the remaining global supplies, driving up oil prices.

But Citi takes a different view. Its strategists believe India and China will ramp up purchases, keeping Russian oil pumping and alleviating the pressure on the market. “We actually don’t see a supply crunch in the making,” Martoccia said.

Crude oil exports to European countries in the OECD will drop from 2.5 million barrels a day in the first quarter of the year to 970,000 in the fourth, Citi predicts.

Yet it thinks China will step up its imports from 1.4 million to 2.3 million barrels a day, and India from 110,000 to 950,000 a day. Other developing economies will lift their purchases slightly, meaning Russia will be exporting more crude by the end of the year than at the start.

“I’m skeptical that the governments wouldn’t listen to their own energy needs, because we have seen already protests and riots around the world because of the increase in food prices and energy prices,” Martoccia said.

The other key ingredient in oil prices is demand. Citi thinks the world’s appetite for oil is going to slow over the coming months as the global economy cools.

Martoccia said Europe in particular is likely to cut back on its energy consumption. Many economists expect the eurozone to fall into a recession as a result of soaring inflation driven by rocketing natural gas prices. Germany has already started to dim its streetlights to save energy.

“When you look at the gas demand, for instance, from the industrial complex in Italy, or even the orders of one of the biggest industrial facilities, it’s going down,” he said. “And eventually you have to see spillover effects elsewhere.”

Oil-price prediction is a difficult game. Many analysts say the opposite to Citi, arguing Russian production will fall, and a Chinese economic recovery and the return of global tourism will boost demand.

Citi is hedging its bets. It thinks there’s a 30% chance oil jumps back up to around $120 by the end of the year. “This year, it’s very difficult to have a high conviction,” Martoccia said.

Top Billionaires Lose $1.4 Trillion In Worst Half Of Year 2022

With policy makers now raising interest rates to combat elevated inflation, some of the highest-flying shares — and the billionaires who own them — are losing their combined wealth due to economic factors that has impacted global economies around the world. 

Elon Musk’s fortune plunged almost $62 billion. Jeff Bezos saw his wealth tumble by about $63 billion. Mark Zuckerberg’s net worth was slashed by more than half.

All told, the world’s 500 richest people lost $1.4 trillion in the first half of 2022, a dizzying decline that marks the steepest six-month drop ever for the global billionaire class.

It’s a sharp departure from the previous two years, when the fortunes of the ultra-rich swelled as governments and central banks unleashed unprecedented stimulus measures in the wake of the Covid-19 pandemic, juicing the value of everything from tech companies to cryptocurrencies.

With policy makers now raising interest rates to combat elevated inflation, some of the highest-flying shares — and the billionaires who own them — are losing altitude fast. Tesla Inc. had its worst quarter ever in the three months through June, while Amazon.com Inc. plummeted by the most since the dot-com bubble burst.

Though the losses are piling up for the world’s richest people, it only represents a modest move toward narrowing wealth inequality. Musk, Tesla’s co-founder, still has the biggest fortune on the planet, at $208.5 billion, while Amazon’s Bezos is second with a $129.6 billion net worth, according to the Bloomberg Billionaires Index.

Bernard Arnault, France’s richest person, ranks third with a $128.7 billion fortune, followed by Bill Gates with $114.8 billion, according to the Bloomberg index. They’re the only four that are worth more than $100 billion — at the start of the year, 10 people worldwide exceeded that amount, including Zuckerberg, who is now 17th on the wealth list with $60 billion.

Changpeng Zhao, the crypto pioneer who debuted on the Bloomberg Billionaires Index in January with an estimated fortune of $96 billion, has seen his wealth tumble by almost $80 billion this year amid the turmoil in digital assets.

Still, the billionaire class has amassed so much wealth in recent years that not only can the vast majority withstand the worst first half since 1970 for the S&P 500 Index, but they’re likely looking for bargains, said Thorne Perkin, president of Papamarkou Wellner Asset Management.

“Often their mindset is a bit more contrarian,” Perkin said. “A lot of our clients look for opportunities when there’s trouble in the streets.” That held true in the first half of the year in some of the most distressed corners of the global financial markets.

Vladimir Potanin, Russia’s wealthiest man with a $35.2 billion fortune, acquired Societe Generale SA’s entire position in Rosbank PJSC earlier this year amid the fallout from Vladimir Putin’s invasion of Ukraine. He also bought out sanctioned Russian mogul Oleg Tinkov’s stake in a digital bank for a fraction of what it was once worth.

Sam Bankman-Fried, chief executive officer of crypto exchange FTX, bought a 7.6% stake in Robinhood Markets Inc. in early May after the app-based brokerage’s share price tumbled 77% from its hotly anticipated initial public offering last July. The 30-year-old billionaire has also been acting as a lender of last resort for some troubled crypto companies.

The most high-profile buyout of all belonged to Musk, who reached a $44 billion deal to buy Twitter Inc. He offered to pay $54.20 a share; the social-media company’s stock traded at $37.44 at 10:25 a.m. in New York. The world’s richest man said in an interview with Bloomberg News Editor-in-Chief John Micklethwait last month that there are “a few unresolved matters” before the transaction can be completed. “There’s a limit to what I can say publicly,” he said. “It is somewhat of a sensitive matter.”

How Much Health Insurers Pay For Almost Everything Is About To Go Public

Consumers, employers and just about everyone else interested in health care prices will soon get an unprecedented look at what insurers pay for care, perhaps helping answer a question that has long dogged those who buy insurance: Are we getting the best deal we can?

Starting July 1, health insurers and self-insured employers must post on websites just about every price they’ve negotiated with providers for health care services, item by item. About the only exclusion is the prices paid for prescription drugs, except those administered in hospitals or doctors’ offices.

The federally required data release could affect future prices or even how employers contract for health care. Many will see for the first time how well their insurers are doing compared with others.

The new rules are far broader than those that went into effect last year requiring hospitals to post their negotiated rates for the public to see. Now insurers must post the amounts paid for “every physician in network, every hospital, every surgery center, every nursing facility,” said Jeffrey Leibach, a partner at the consulting firm Guidehouse.

“When you start doing the math, you’re talking trillions of records,” he said. The fines the federal government could impose for noncompliance are also heftier than the penalties that hospitals face.

Federal officials learned from the hospital experience and gave insurers more direction on what was expected, said Leibach. Insurers or self-insured employers could be fined as much as $100 a day for each violation and each affected enrollee if they fail to provide the data. “Get your calculator out: All of a sudden you are in the millions pretty fast,” Leibach said.

Determined consumers, especially those with high-deductible health plans, may try to dig in right away and use the data to try comparing what they will have to pay at different hospitals, clinics, or doctor offices for specific services.

But each database’s enormous size may mean that most people “will find it very hard to use the data in a nuanced way,” said Katherine Baicker, dean of the University of Chicago Harris School of Public Policy.

At least at first, Entrepreneurs are expected to quickly translate the information into more user-friendly formats so it can be incorporated into new or existing services that estimate costs for patients. And starting Jan. 1, the rules require insurers to provide online tools that will help people get upfront cost estimates for about 500 so-called “shoppable” services, meaning medical care they can schedule ahead of time.

Once those things happen, “you’ll at least have the options in front of you,” said Chris Severn, CEO of Turquoise Health, an online company that has posted price information made available under the rules for hospitals, although many hospitals have yet to comply.

With the addition of the insurers’ data, sites like his will be able to drill down further into cost variation from one place to another or among insurers.

“If you’re going to get an X-ray, you will be able to see that you can do it for $250 at this hospital, $75 at the imaging center down the road, or your specialist can do it in office for $25,” he said.

Everyone will know everyone else’s business: for example, how much insurers Aetna and Humana pay the same surgery center for a knee replacement. The requirements stem from the Affordable Care Act and a 2019 executive order by then-President Donald Trump.

“These plans are supposed to be acting on behalf of employers in negotiating good rates, and the little insight we have on that shows it has not happened,” said Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health, an affiliation of employers who offer job-based health benefits to workers. “I do believe the dynamics are going to change.”

Other observers are more circumspect.

“Maybe at best this will reduce the wide variance of prices out there,” said Zack Cooper, director of health policy at the Yale University Institution for Social and Policy Studies. “But it won’t be unleashing a consumer revolution.”

Still, the biggest value of the July data release may well be to shed light on how successful insurers have been at negotiating prices. It comes on the heels of research that has shown tremendous variation in what is paid for health care. A recent study by the Rand Corp., for example, shows that employers that offer job-based insurance plans paid, on average, 224% more than Medicare for the same services.

Tens of thousands of employers who buy insurance coverage for their workers will get this more-complete pricing picture — and may not like what they see.

“What we’re learning from the hospital data is that insurers are really bad at negotiating,” said Gerard Anderson, a professor in the department of health policy at the Johns Hopkins Bloomberg School of Public Health, citing research that found that negotiated rates for hospital care can be higher than what the facilities accept from patients who are not using insurance and are paying cash.

That could add to the frustration that Mitchell and others say employers have with the current health insurance system. More might try to contract with providers directly, only using insurance companies for claims processing. Other employers may bring their insurers back to the bargaining table.

“For the first time, an employer will be able to go to an insurance company and say, ‘You have not negotiated a good-enough deal, and we know that because we can see the same provider has negotiated a better deal with another company,'” said James Gelfand, president of the ERISA Industry Committee, a trade group of self-insured employers.

If that happens, he added, “patients will be able to save money.” That’s not necessarily a given, however.

Because this kind of public release of pricing data hasn’t been tried widely in health care before, how it will affect future spending remains uncertain. If insurers are pushed back to the bargaining table or providers see where they stand relative to their peers, prices could drop. However, some providers could raise their prices if they see they are charging less than their peers.

“Downward pressure may not be a given,” said Kelley Schultz, vice president of commercial policy for AHIP, the industry’s trade lobby.

Baicker, of the University of Chicago, said that even after the data is out, rates will continue to be heavily influenced by local conditions, such as the size of an insurer or employer — providers often give bigger discounts, for example, to the insurers or self-insured employers that can send them the most patients. The number of hospitals in a region also matters — if an area has only one, for instance, that usually means the facility can demand higher rates.

Another unknown: Will insurers meet the deadline and provide usable data?

Schultz, at AHIP, said the industry is well on the way, partly because the original deadline was extended by six months. She expects insurers to do better than the hospital industry. “We saw a lot of hospitals that just decided not to post files or make them difficult to find,” she said.

So far, more than 300 noncompliant hospitals have received warning letters from the government. But they could face $300-a-day fines for failing to comply, which is less than what insurers potentially face, although the federal government has recently upped the ante to up to $5,500 a day for the largest facilities.

Even after the pricing data is public, “I don’t think things will change overnight,” said Leibach. “Patients are still going to make care decisions based on their doctors and referrals, a lot of reasons other than price.”

(This story was produced by The Hill in partnership with Kaiser Health News. KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. It is an editorially independent operating program of Kaiser Family Foundation).

Dow Tumbles 876 Points And Stocks Enter Bear Market On Worries Of Drastic Rate Hikes

US stocks have plunged into a bear market as Wall Street investors grew increasingly nervous about the prospect of even harsher medicine from the Fed to take the sting out of inflation.

The Dow (INDU) sank 876 points or 2.8%. The Nasdaq was down by 4.7% and has tumbled more than 10% in the past two trading sessions.

The broader S&P 500 fell 3.9%. That index is now more than 20% below its all-time high set in January, putting stocks in a bear-market.

Recession fears mounted after Friday’s miserable Consumer Price Index report showed US inflation was significantly higher than economists had expected last month. That could make the Federal Reserve’s inflation-control efforts more difficult.

After raising rates by a half point in May — an action the Fed hadn’t taken since 2000 — Chair Jerome Powell pledged more of the same until the central bank was satisfied that inflation was under control. At that point, the Fed would resume standard quarter-point hikes, he said.

But after May’s hotter-than-expected inflation report, Wall Street is increasingly calling for tougher action from the Fed to keep prices under control. Jefferies joined Barclays on Monday in predicting that the Federal Reserve would hike rates by three-quarters of a percentage point, an action the Fed hasn’t taken since 1994.

“After holding their breath for nearly a week awaiting the US CPI report for May, investors exhaled in exasperation as inflation came in hotter than expected,” Sam Stovall, chief investment strategist at CFRA, said in a note to clients Monday morning.

Stovall said the risk of larger hikes dragged the markets lower Monday.

Investors fear two outcomes, neither of them good: Higher rates mean bigger borrowing costs for businesses, which can eat into their bottom lines. And overly zealous action from the Fed could unintentionally plunge the US economy into a recession, especially if businesses start laying off workers and the red-hot housing market crumbles.

There’s no sign that the job and housing markets are in danger of collapse, although both are cooling off somewhat.

In an interview with CNN’s Fareed Zakaria Sunday, former Fed Chair Ben Bernanke said a US recession remains possible. But Bernanke said he had faith that Powell and the Fed could achieve a so-called soft landing, the elusive outcome in which the central bank can cool the economy down to get inflation under control without slowing it down so much that it enters a recession.

“Economists are very bad at predicting recessions, but I think the Fed has a decent chance — a reasonable chance — of achieving what Powell calls a soft-ish landing, either no recession or a very mild recession to bring inflation down,” Bernanke said.

Analysts appeared to move beyond a “buy the dip” mentality on Monday, signaling that they don’t see markets recovering quickly.

“Valuations aren’t much cheaper given rising interest rates and a weaker earnings outlook, in our view,” wrote strategists at BlackRock in a Monday notes. “A higher path of policy rates justifies lower equity prices. Plus, margin pressures are a risk to earnings.”

BlackRock will remain neutral on stocks for the next six- to 12-months, the strategists said.

Bears and bulls

The S&P 500 closed in a bear market, so the bull run that started on March 23, 2020 has come to an end. But, because of the tricky way these things are measured, the bear market technically began on January 3, when the S&P 500 hit its all-time high.

That means the latest bull market lasted just over 21 months — the shortest on record, according to Howard Silverblatt, S&P Dow Jones Indices senior index analyst. Over the past century, bull markets have lasted an average of about 60 months.

The shortest bull market followed the shortest bear market, one that lasted just over a month — from February 19 to March 23, 2020. Bear markets historically last an average of 19 months, according to Silverblatt.

Stocks briefly fell into a bear market on May 20, although a late-day rally rescued the market from closing below that threshold for the first time since the early days of the pandemic.

The tech-heavy Nasdaq has been in a bear market for some time and is now more than 32% below its all-time high set in November 2021. The Dow is still some way from a bear market. It has fallen about 16% from the all-time high it reached on the last day of 2021.

Gasoline Price Exceeds $5 Per Gallon In Most States

The average U.S. price of regular-grade gasoline spiked 39 cents over the past three weeks to $5.10 per gallon, media reports here suggested. The average price at the pump is $1.97 higher than it was one year ago.

Nationwide, the highest average price for regular-grade gas is in the San Francisco Bay Area, at $6.55 per gallon. The lowest average is in Baton Rouge, Louisiana, at $4.43 per gallon. According to the survey, the average price of diesel rose 20 cents over three weeks, to $5.86 a gallon.

Industry analyst Trilby Lundberg of the Lundberg Survey said Sunday that the price jump comes amid higher crude oil costs and tight gasoline supplies.

Skyrocketing gas prices and the high inflation rate, which is 40 year high, are a glaring problem for the White House with no clear, immediate solution, presenting a major political challenge for Biden and Democrats going into the midterms. The Labor Department’s consumer price index rose 1 percent last month alone and 8.6 percent in the 12-month stretch ending in May.

Eighty-five percent of voters said they think inflation is a very serious or somewhat serious problem, according to an Economist-YouGov poll from earlier this month. In the same poll, 44 percent of respondents said Biden has “a lot” of responsibility for the inflation rate and 31 percent said he has “some.”

Energy Secretary Jennifer Granholm told CBS News this week that Americans should brace for a rough summer, with a top energy agency predicting fuel prices may not come down to less than $4 per gallon until the fall or winter.

“There will be some relief on the horizon, but during the summer driving season, it is going to be rough, no doubt about it, because we have such a demand and supply mismatch on the global market for oil,” Granholm said.

The president and his administration have pointed to steps they’ve taken in recent months to try to pump the brakes on rising gas prices.

Biden has ordered the release of millions of barrels of oil from the Strategic Petroleum Reserve to boost supply, pushed for nations in the Middle East to boost production, lifted restrictions on the sale of fuel with higher ethanol content, and promoted renewable energy sources such as electric vehicles and solar power.

But the reality, as even some Biden administration officials acknowledge, is the president has little sway over day-to-day gas prices, which are often at the mercy of global supply chains and have been impacted by the Russian invasion of Ukraine.

“This is, in large part, caused by [Russian President Vladimir] Putin’s aggression,” Commerce Secretary Gina Raimondo said on CNN this week. “Since Putin moved troops to the border of Ukraine, gas prices have gone up over $1.40 a gallon, and the president is asking for Congress and others for potential ideas. But, as you say, the reality is that there isn’t very much more to be done.”

Republican strategist Doug Heye argued the Biden administration has had a lackluster response to inflation that has contributed to the hit his approval rating has taken and the low marks he has received on the economy.

“There seems to be, on some of these issues, just a shrugging of the shoulders, and that’s why you see, overwhelmingly, Biden’s handling of the economy is unpopular,” he said. “Obviously what’s happened in Ukraine has caused a spike, and there’s nothing wrong with talking about that, but that seems to be the entire explanation when inflation has gone up every month that Biden has been president.”

Biden has stressed that he is sympathetic to the impact of high inflation on American families. “I understand Americans are anxious, and they’re anxious for good reason,” he said in remarks at the Port of Los Angeles. “Make no mistake about it: I understand inflation is a real challenge to American families,” he added. “Today’s inflation report confirmed what Americans already know: Putin’s price hike is hitting America hard. Gas prices at the pump, energy and food prices account for half of the monthly price increases since May.”

He called on Congress to pass legislation to cut shipping costs and the costs of energy bills and prescription drugs as well as tax reform so big corporations pay more. Part of the challenge for the White House, however, is that many Americans don’t realize Biden doesn’t control gas prices, said Matt Bennett, a strategist with centrist think tank Third Way.

“I think he needs to get caught trying to do everything possible. Haul the CEOs of the oil companies in to the White House and demand that they tell him exactly what they need to get production up in the short term,” Bennett said.

The White House said it was shifting gears toward a monthlong campaign in June to talk up the economy and to show the White House is prioritizing inflation while pushing the positives it has delivered on the economy.Biden reiterated that the U.S. is dealing with inflation from a position of strength, touting again the low unemployment rate.

Democratic strategist Antjuan Seawright argued that the president’s focus on the positives of the economy will resonate with voters in the midterm elections this fall. “From a messaging standpoint, I think [Democrats] have to demonstrate district by district, race by race, what efforts we have done to save the economy,” Seawright said. “Make sure we tell the story and not let the story be told about us.”

Warren Buffet Warns Of A 50% Fall In Stock Market Buffet Told Investors That They Should Be Prepared For A 50 Per Cent Fall In The Shares

Veteran investor Warren Buffett has tremendous experience in the stock market that makes everyone trust his forecasts. Not only this, he has earned a lot of wealth from the stock market. Now amidst the ongoing volatility in the stock market, he has asked to be prepared for a fall of up to 50 per cent in the shares.

Warren Buffett has shared a video on Instagram. In this video he is giving advice to the investors investing in the stock market. He told investors that they should be prepared for a 50 per cent fall in the shares. This video has been shared on Instagram with the handle Warret Buffet Videos.

He said that when Berkshire’s stock fell, there was nothing wrong with the company. He said that the mind of the investor should be right. Otherwise, your life will be spent in buying and selling shares at the wrong time and you will continue to cry for loss. Investors take decisions on the advice of others when prices fluctuate.

They say that if you cannot keep investing in a stock for a long time, then you should not buy it. He says that just as you keep the farm with you for a long period, in the same way you need to be financially and psychologically prepared to hold the shares. Buffett had also said during an interview that you should invest in only those companies, which he understands. They should expect that the company’s shares will give good returns in the long run.

Warren Buffett takes the help of three rules to buy shares. He says that the first rule is that the company should have a good income on the amount invested in the business. Second, the management of the company should be in the hands of honest and skilled managers. Third the company’s share price should be correct.

A New Billionaire Has Been Minted Almost Daily During The Pandemic

The Covid-19 pandemic has been good for the wallets of the wealthy. Some 573 people have joined the billionaire ranks since 2020, bringing the worldwide total to 2,668, according to an analysis released by Oxfam on Sunday. That means a new billionaire was minted about every 30 hours, on average, so far during the pandemic.

The report, which draws on data compiled by Forbes, looks at the rise of inequality over the past two years. It is timed to coincide with the kickoff of the annual World Economic Forum meeting in Davos, Switzerland, a gathering of some of the wealthiest people and world leaders.

Billionaires have seen their total net worth soar by $3.8 trillion, or 42%, to $12.7 trillion during the pandemic. A large part of the increase has been fueled by strong gains in the stock markets, which was aided by governments injecting money into the global economy to soften the financial blow of the coronavirus.

Much of the jump in wealth came in the first year of the pandemic. It then plateaued and has since dropped a bit, said Max Lawson, head of inequality policy at Oxfam.

At the same time, Covid-19, growing inequality and rising food prices could push as many as 263 million people into extreme poverty this year, reversing decades of progress, Oxfam said in a report released last month. “I’ve never seen such a dramatic growth in poverty and growth in wealth at the same moment in history,” Lawson said. “It’s going to hurt a lot of people.”

Benefiting from high prices

Consumers around the world are contending with the soaring cost of energy and food, but corporations in these industries and their leaders are benefiting from the rise in prices, Oxfam said.

Billionaires in the food and agribusiness sector have seen their total wealth increase by $382 billion, or 45%, over the past two years, after adjusting for inflation. Some 62 food billionaires were created since 2020.

Meanwhile, the net worth of their peers in the oil, gas and coal sectors jumped by $53 billion, or 24%, since 2020, after adjusting for inflation.

Davos is back and the world has changed. Have the global elite noticed?

Forty new pandemic billionaires were created in the pharmaceutical industry, which has been at the forefront of the battle against Covid-19 and the beneficiary of billions in public funding.

The tech sector has spawned many billionaires, including seven of the 10 world’s richest people, such as Telsa’s Elon Musk, Amazon’s Jeff Bezos and Microsoft’s Bill Gates. These men increased their wealth by $436 billion to $934 billion over the past two years, after adjusting for inflation.

Tax the rich

To counter the meteoric growth in inequality and help those struggling with the rise in prices, Oxfam is pushing governments to tax the wealthy and corporations.

It is calling for a temporary 90% tax on excess corporate profits, as well as a one-time tax on billionaires’ wealth.

The group would also like to levy a permanent wealth tax on the super-rich. It suggests a 2% tax on assets greater than $5 million, rising to 5% for net worth above $1 billion. This could raise $2.5 trillion worldwide.

Wealth taxes, however, have not been embraced by many governments. Efforts to levy taxes on the net worth of the richest Americans have failed to advance in Congress in recent years.

Fighting Inflation Excuse For Class Warfare

A class war is being waged in the name of fighting inflation. All too many central bankers are raising interest rates at the expense of working people’s families, supposedly to check price increases.

Forced to cope with rising credit costs, people are spending less, thus slowing the economy. But it does not have to be so. There are much less onerous alternative approaches to tackle inflation and other contemporary economic ills.

Short-term pain for long-term gain?
Central bankers are agreed inflation is now their biggest challenge, but also admit having no control over factors underlying the current inflationary surge. Many are increasingly alarmed by a possible “double-whammy” of inflation and recession.

Nonetheless, they defend raising interest rates as necessary “preemptive strikes”. These supposedly prevent “second-round effects” of workers demanding more wages to cope with rising living costs, triggering “wage-price spirals”.

In central bank jargon, such “forward-looking” measures convey clear messages “anchoring inflationary expectations”, thus enhancing central bank “credibility” in fighting inflation.

They insist the resulting job and output losses are only short-term – temporary sacrifices for long-term prosperity. Remember: central bankers are never punished for causing recessions, no matter how deep, protracted or painful.

But raising interest rates only makes recessions worse, especially when not caused by surging demand. The latest inflationary surge is clearly due to supply disruptions because of the pandemic, war and sanctions.

Raising interest rates only reduces spending and economic activity without mitigating ‘imported’ inflation, e.g., rising food and fuel prices. Recessions will further disrupt supplies, aggravating inflation and worsening stagflation.

Wage-price spirals?
Some central bankers claim recent instances of wage increases signal “de-anchored” inflationary expectations, and threaten ‘wage-price spirals’. But this paranoia ignores changed industrial relations and pandemic effects on workers.

With real wages stagnant for decades, the ‘wage-price spiral’ threat is grossly exaggerated. Over recent decades, most workers have lost bargaining power with deregulation, outsourcing, globalization and labour-saving technologies. Hence, labour shares of national income have declined in most countries since the 1980s.

Labour market recovery, even tightening in some sectors, obscures adverse overall pandemic impacts on workers. Meanwhile, millions of workers have gone into informal self-employment – now celebrated as ‘gig work’ – increasing their vulnerability.

Pandemic infections, deaths, mental health, education and other impacts, including migrant worker restrictions, have all hurt many. Contagion has especially hurt vulnerable workers, including youth, migrants and women.

Workers’ share of national income, 1970-2015

Ideological central bankers
Economic policies by supposedly independent and knowledgeable technocrats are presumed to be better. But such naïve faith ignores ostensibly academic, ideological beliefs.

Typically biased, albeit in unstated ways, policy choices inevitably support some interests over – even against – others. Thus, for example, an anti-inflation policy emphasis favours financial asset owners.

Politicians like the notion of central bank independence. It enables them to conveniently blame central banks for inflation and other ills – even “sleeping at the wheel” – and for unpopular policy responses.

Of course, central bankers deny their own role and responsibility, instead blaming other economic policies, especially fiscal measures. But politicians blaming central bankers after empowering them is simply shirking responsibility.

In the rich West, governments long bent on fiscal austerity left the heavy lifting for recovery after the 2008-2009 global financial crisis (GFC) to central bankers. Their ‘unconventional monetary policies’ involved keeping policy interest rates very low, enabling corporate shenanigans and zombie business longevity.

This enabled unprecedented increases in most debt, including private credit for speculation and sustaining ‘zombie’ businesses. Hence, recent monetary tightening – including raising interest rates – will trigger more insolvencies and recessions.

German social market economy
Inflation and policy responses inevitably involve social conflicts over economic distribution. In Germany’s ‘free collective bargaining’, trade unions and business associations engage in collective bargaining without state interference, fostering cooperative relations between workers and employers.

The German Collective Bargaining Act does not oblige ‘social partners’ to enter into negotiations. The timing and frequency of such negotiations are also left to them. Such flexible arrangements are said to have helped SMEs.

Although Germany’s ‘social market economy’ has no national tripartite social dialogue institution, labour unions, business associations and government did not hesitate to democratically debate crisis measures and policy responses to stabilize the economy and safeguard employment, e.g., during the GFC.

Dialogue down under
A similar ‘social dialogue’ approach was developed by Australian Labor Prime Minister Bob Hawke from 1983. This contrasted with the more confrontational approaches pursued in Margaret Thatcher’s UK and Ronald Reagan’s USA – where punishing interest rates inflicted long recessions.

Although Hawke had been a successful trade union leader, he began by convening a national summit of workers, businesses and other stakeholders. The resulting Prices and Incomes Accord between the government and unions moderated wage demands in return for ‘social wage’ improvements.

This consisted of better public health provisioning, pension and unemployment benefit improvements, tax cuts and ‘superannuation’ – involving required employees’ income shares and matching employer contributions to a workers’ retirement fund.

Although business groups were not formally party to the Accord, Hawke brought big businesses into other new initiatives such as the Economic Planning Advisory Council. This consensual approach helped reduce both unemployment and inflation.

Such consultations have also enabled difficult reforms – including floating exchange rates and reducing import tariffs. They also contributed to the developed world’s longest uninterrupted economic growth streak – without a recession for nearly three decades, ending in 2020 with the pandemic.

Social partnerships
A variety of such approaches exist. For example, Norway’s kombiniert oppgjior, from 1976, involved not only industrial wages, but also taxes, salaries, pensions, food prices, child support payments, farm support prices, and more.

‘Social partnerships’ have also been important in Austria and Sweden. A series of political understandings – or ‘bargains’ – between successive governments and major interest groups enabled national wage agreements from 1952 until the mid-1970s.

Consensual approaches undoubtedly underpinned post-Second World War reconstruction and progress, of the so-called Keynesian ‘Golden Age’. But it is also claimed they have created rigidities inimical to further progress, especially with rapid technological change.

Economic liberalization in response has involved deregulation to achieve more market flexibilities. But this approach has also produced more economic insecurity, inequalities and crises, besides stagnating productivity.

Such changes have also undermined democratic states, and enabled more authoritarian, even ethno-populist regimes. Meanwhile, rising inequalities and more frequent recessions have strained social trust, jeopardizing security and progress.

Policymakers should consult all major stakeholders to develop appropriate policies involving fair burden sharing. The real need then is to design alternative policy tools through social dialogue and complementary arrangements to address economic challenges in more equitably cooperative ways.

Rise of the Super Rich & Fall of the World’s Poor

Michael Bloomberg, the three-term Mayor of New York city and a billionaire philanthropist, was once quoted as saying that by the time he dies, he would have given away all his wealth to charity – so that his cheque to the funeral undertaker will bounce for lack of funds in his bank account.

Sounds altruistic – even as the number of billionaires keep rising while the poorest of the world’s poor keep multiplying.

The latest brief by Oxfam International, titled “Profiting from Pain” and released May 23, shows that 573 people became new billionaires during the two-and-a half-year Covid 19 pandemic —while the world’s poverty stricken continued to increase.

“We expect this year that 263 million more people will crash into extreme poverty, at a rate of a million people every 33 hours,” Oxfam said.

Billionaires’ wealth has risen more in the first 24 months of COVID-19 than in 23 years combined. The total wealth of the world’s billionaires is now equivalent to 13.9 percent of global GDP. This is a three-fold increase (up from 4.4 percent) in 2000, according to the study.

Asked about the philanthropic gestures, Gabriela Bucher, Executive Director of Oxfam International, told IPS wealthy individuals who use their money to help others should be congratulated.

“But charitable giving is no substitute for wealthy people and companies paying their fair share of tax or ensuring their workers are paid a decent wage. And it does not justify them using their power and connections to lobby for unfair advantages over others,” she declared.

Oxfam’s new research also reveals that corporations in the energy, food and pharmaceutical sectors —where monopolies are especially common— are posting record-high profits, even as wages have barely budged and workers struggle with decades-high prices amid COVID-19.

The fortunes of food and energy billionaires have risen by $453 billion in the last two years, equivalent to $1 billion every two days, says Oxfam.

Five of the largest energy companies (BP, Shell, Total Energies, Exxon and Chevron) are together making $2,600 profit every second, and there are now 62 new food billionaires.

Currently, the world’s total population is around 7.8 billion, and according to the UN, more than 736 million people live below the international poverty line.

A World Bank report last year said extreme poverty is set to rise, for the first time in more than two decades, and the impact of the spreading virus is expected to push up to 115 million more people into poverty, while the pandemic is compounding the forces of conflict and climate change, that has already been slowing poverty reduction.

By 2021, as many as 150 million more people could be living in extreme poverty.

Yasmeen Hassan, Global Executive Director at Equality Now, told IPS Oxfam’s report demonstrates systemic failings in the discriminatory nature of countries’ economies and underscores the urgent need for financial systems to be restructured so that they benefit the 99%, not the 1%.

“As with any crisis, Equality Now foresaw that gender would influence how individuals and communities experienced the pandemic, but even we were shocked at how exceptionally and intensely pre-existing inequalities and sex-based discrimination has been exacerbated”, she said.

While billionaires — the vast majority of whom are men — continue to amass vast sums of wealth, women around the world remain trapped in poverty. Wealthy elites are profiting off women’s labor, much of which is underappreciated, underpaid, and uncompensated, she pointed out.

“Economic hardship and inadequate policy responses to the pandemic have eroded many of the hard-won gains that have been achieved over recent years for women and girls. From increases in child marriage, sexual exploitation and human trafficking, to landlords demanding sex from female tenants who have lost their job, and domestic workers trapped inside with abusive employers, women and girls around the world have borne the brunt of the pandemic,” Hassan declared.

The Oxfam study has been released to coincide with the World Economic Forum’s (WEF) annual meeting—which includes the presence of the rich and the superrich—taking place in Davos-Klosters, Switzerland from 22-26 May. The meeting, whose theme is ‘Working Together, Restoring Trust’, will be the first global in-person leadership event since the outbreak of the COVID-19 pandemic in early 2020

“Billionaires are arriving in Davos to celebrate an incredible surge in their fortunes. The pandemic, and now the steep increases in food and energy prices have, simply put, been a bonanza for them. Meanwhile, decades of progress on extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive,” said Oxfam’s Bucher.

She said billionaires’ fortunes have not increased because they are now smarter or working harder. But it is really the workers who are working harder, for less pay and in worse conditions.

The super-rich, she argued, have rigged the system with impunity for decades and they are now reaping the benefits. They have seized a shocking amount of the world’s wealth as a result of privatization and monopolies, gutting regulation and workers’ rights while stashing their cash in tax havens — all with the complicity of governments.”

“Meanwhile, millions of others are skipping meals, turning off the heating, falling behind on bills and wondering what they can possibly do next to survive. Across East Africa, one person is likely dying every minute from hunger. This grotesque inequality is breaking the bonds that hold us together as humanity. It is divisive, corrosive and dangerous. This is inequality that literally kills.”

Elaborating further, Hassan of Equality Now said women are more likely to be informally employed, low-wage earners, and this disadvantaged position has resulted in higher rates of women losing their jobs, particularly in sectors that were not prioritized in government relief packages.

“Women are also more likely to be primary caretaker and many have had to absorb increases in unpaid duties while schools and nurseries shut down. As a consequence, some women have been forced out of jobs as they found it impossible to juggle full-time work while also providing full-time childcare. This loss of income has been especially catastrophic for women in poverty and has made them more vulnerable to a range of human rights violations.”

She said world leaders must stop pursuing policy agendas that benefit the rich and hurt the poor.

“Instead, we urgently need a committed and coordinated response from governments and policymakers to reduce inequality and poverty, and address discrimination that is holding women and girls back while allowing the super-rich to get richer still,” she added.

The Oxfam study also says the pandemic has created 40 new pharma billionaires.

Pharmaceutical corporations like Moderna and Pfizer are making $1,000 profit every second just from their monopoly control of the COVID-19 vaccine, despite its development having been supported by billions of dollars in public investments.

“They are charging governments up to 24 times more than the potential cost of generic production. 87 percent of people in low-income countries have still not been fully vaccinated.”

“The extremely rich and powerful are profiting from pain and suffering. This is unconscionable. Some have grown rich by denying billions of people access to vaccines, others by exploiting rising food and energy prices. They are paying out massive bonuses and dividends while paying as little tax as possible. This rising wealth and rising poverty are two sides of the same coin, proof that our economic system is functioning exactly how the rich and powerful designed it to do,” said Bucher.

Oxfam recommends that governments urgently:

–·Introduce one-off solidarity taxes on billionaires’ pandemic windfalls to fund support for people facing rising food and energy costs and a fair and sustainable recovery from COVID-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ and is now considering introducing a windfall tax on energy profits as well as a tax on undeclared assets held overseas to repay IMF debt. The super-rich have stashed nearly $8 trillion in tax havens.

  • — End crisis profiteering by introducing a temporary excess profit tax of 90 percent to capture the windfall profits of big corporations across all industries. Oxfam estimated that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.

— Introduce permanent wealth taxes to rein in extreme wealth and monopoly power, as well as the outsized carbon emissions of the super-rich. An annual wealth tax on millionaires starting at just 2 percent, and 5 percent on billionaires, could generate $2.52 trillion a year —enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.

Indian Rupee Falls To The Lowest

The Indian rupee extended its losses and touched an all-time low of 77.42 against the US dollar in early trade on Monday, May 10th.

The Indian currency is weighed by the strength of the American currency in the overseas market and continued foreign fund outflows. Further, rupee slipped on surge in crude oil prices

Foreign institutional investors were net sellers in the capital market on Friday, as they offloaded shares worth Rs 5,517.08 crore, as per stock exchange data. They have been selling equities constantly in the recent months.

Rupee has been under-pressure after global central banks started normalising policy and last week RBI too started raising key interest rates.

On Friday, the rupee had slumped 55 paise to close at 76.90 against the US dollar.

“Local units are also hit by haven dollar flows, higher global rates due to rising inflation and risk-off sentiments. Weakness in Chinese yuan, which fell to its weakest level since November 2020, also weighing on regional currencies,” said Dilip Parmar, Retail Research Analyst at HDFC Securities.

So far this year, foreign institutions have withdrawn a total of nearly $19 billion from domestic equities and debt markets, Parmar said.

Parmar sees near term depreciation in rupee could continue for a few more days with lower side limited in the range of 77.70 to 78. In the event of unwinding, the rupee could see levels of 77 to 76.70.

According to Sugandha Sachdeva, VP-Commodity and Currency Research at Religare Broking, the Indian rupee has plummeted to record lows amid the deteriorating risk sentiments and the unrelenting spree of overseas outflows from the domestic equities.

Besides, an unabated rise in the dollar index towards a two-decade high, soaring US treasury yields and crude prices, all of them have worked their way to push the domestic currency on a downward trajectory, Sachdeva told IANS.

“Markets are concerned about the spiralling inflation and prospects of an aggressive tightening path that continues to threaten the growth outlook, leading to safe-haven flows in the greenback.”

Also, hardening crude oil prices as the EU is moving ahead to impose an embargo on Russian oil are roiling the sentiments, leading to worries about the widening current account deficit and exacerbating the pressure on the domestic currency.

Going ahead, as the Indian rupee has breached the previous all-time lows of the 77.14-mark, it seems poised to witness further depreciation towards the 78-mark in the near term.

Sachdeva, however, anticipates that RBI will intervene around the 78-mark to curb excessive depreciation in the Indian currency.

According to experts, this depreciation is caused by the strength of the American currency in the overseas market and continuous foreign fund outflows from the Indian market. Some also attribute the fall of the rupee to rising crude oil prices globally due to the Russia-Ukraine crisis and the COVID induced lockdown in Shanghai.

India’s Pharma Exports Rise 103% In 8 Years

India’s pharma exports have witnessed a growth of 103 per cent since 2013-14 from Rs 90,415 crore to Rs 1,83,422 crore in 2021-22. The exports achieved in 2021-22 is the Pharma Sector’s best export performance ever and is a remarkable growth with exports growing by almost USD 10 billion in eight years, said Ministry of Commerce & Industry in a statement on Sunday.

Highlighting the achievement in a tweet, the Union Minister of Commerce and Industry Piyush Goyal said: “India’s booming drugs & pharmaceuticals exports more than double in 2021-22 compared to 2013-14. Under the active leadership of PM @NarendraModi ji, India is serving as ‘Pharmacy of the World”.

The pharma exports in 2021-22 sustained a positive growth despite the global trade disruptions and drop in demand for COVID related medicines. The trade balance continues to be in India’s favour, with a surplus of USD 15175.81 Million, said the ministry.

India ranks third worldwide for production by volume and 14th by value. Indian pharma companies have made global mark with 60 per cent of the world’s vaccines and 20 per cent of generic medicines coming from India.

The share of pharmaceutical and drugs in India’s global exports is 5.92 per cent. The formulations and biologicals continue to account for a major share of 73.31 per cent in total exports, followed by Bulk drugs and drug intermediates with exports of USD 4437.64 million. India’s top five pharma export destinations are the US, UK, South Africa, Russia and Nigeria. (IANS)

US Economy Shrinks By 1.4% In 2022 Amid Omicron Surge

The US economy shrank at an annual rate of 1.4 per cent in the first quarter as effects of the Omicron surge start to show up, the US Commerce Department reported.

The latest data marks the economy’s first contraction since the Covid-19 pandemic impacted the country in early 2020, Xinhua news agency reported.

“In the first quarter, an increase in Covid-19 cases related to the Omicron variant resulted in continued restrictions and disruptions in the operations of establishments in some parts of the country,” the department’s Bureau of Economic Analysis (BEA) said in an “advance” estimate.

The BEA noted that government assistance payments in the form of forgivable loans to businesses, grants to state and local governments, and social benefits to households “all decreased as provisions of several federal programs expired or tapered off”.

The decrease in real gross domestic product reflected declines in private inventory investment, exports, federal government spending, and state and local government spending, while imports — a subtraction in the calculation of GDP, increased, the report showed.

Personal consumption expenditures, non-residential fixed investment and residential fixed investment increased, it added.

The US economy contracted in the first quarter as inflation remained elevated at levels not seen in four decades.

The March consumer price index surged 8.5 per cent from a year earlier, the largest 12-month increase since the period ending December 1981, according to data from the Labour Department. That compared with a 7.9 per cent year-on-year gain in February.

Since the March policy meeting, a flurry of comments from US Federal Reserve officials indicated that the urgency for rate hikes is growing, and the central bank is prepared to take more aggressive actions going forward.

Diane Swonk, Chief Economist at major accounting firm Grant Thornton, noted in a recent analysis that as the Fed moves forward with more aggressive rate hikes to combat surging inflation, “what was the strongest and fastest recovery on record may soon be among the shortest.”

Even Fed Chairman Jerome Powell, who argued that soft, or at least softish landings have been relatively common in the US monetary history, noted that no one expects that bringing about a soft landing will be straightforward or easy in the current context. “It’s going to be very challenging,” Powell said.

Former US Treasury Secretary, Lawrence Summers also pointed out that in the past decades, when inflation was above 4 per cent and unemployment was below 4 per cent, the US economy usually fell into recession within two years, which means the Fed’s task would be very difficult.

“A growth recession is likely; unemployment will rise,” Swonk said, adding, “Those waiting for a recession to hire workers may find themselves without the jobs they had hoped to fill.”

Toyota To Invest $ 624 Million In India

Toyota Group plans to invest 48 billion Indian rupees ($624 million) to make electric vehicle components in India, as the Japanese carmaker works toward carbon neutrality by 2050.

Toyota Kirloskar Motor and Toyota Kirloskar Auto Parts signed a memorandum of understanding with the southern state of Karnataka to invest 41 billion Indian rupees, the group said in a statement Saturday. The rest will come from Toyota Industries Engine India.

Toyota is aligning its own green targets with India’s ambitions of becoming a manufacturing hub though the switch to clean transport in the South Asian nation is slower than other countries such as China and the U.S. Expensive price tags, lack of options in electric models and insufficient charging stations have led to sluggish adoption of battery vehicles in India.

“From a direct employment point of view, we are looking at around 3,500 new jobs,” Toyota Kirloskar executive vice president Vikram Gulati told the Press Trust of India in an interview. “As the supply chain system builds, we expect much more to come in later.”

He added that the company would be moving toward a new area of technology — electrified powertrain parts — with production set to start in the “very near-term.”

Indian automakers could generate $20 billion in revenue from electric vehicles between now and fiscal year 2026, according to forecast by Crisil. By 2040, 53% of new automobile sales in India will be electric, compared with 77% in China, according to BloombergNEF.

Gautam Adani Is World’s 5th Richest Person

Gautam Adani, the Indian infrastructure mogul, became the richest Asian billionaire in history earlier this month–and he’s kept on climbing, reported Forbes magazine.

“Adani has now passed Warren Buffett to become the 5th richest person in the world,” said Forbes, estimating that the 59-year-old Adani has a net worth of $123.7 billion, as of Friday’s market close, edging out the $121.7 billion fortune of Buffett, who is 91.

Worth $8.9 billion just two years ago, Adani’s fortune spiked to an estimated $50.5 billion in March 2021 because of his skyrocketing share prices–then nearly doubled by March 2022, to an estimated $90 billion, as Adani Group stocks rose even further, according to Forbes.

“Adani’s estimated $123.7 billion net worth makes him the richest person in India, $19 billion wealthier than the country’s number 2, Mukesh Ambani (who’s worth an estimated $104.7 billion). He surpasses Buffett as shares of the famed investor’s Berkshire Hathaway dropped by 2% on Friday amid a broad drop in the U.S. stock market,” said Forbes.

There are now only four people on the planet richer than Adani, according to Forbes’ real-time billionaire tracker: Microsoft cofounder Bill Gates (worth an estimated $130.2 billion), French luxury goods king Bernard Arnault ($167.9 billion), Amazon founder Jeff Bezos ($170.2 billion) and Tesla and SpaceX chief Elon Musk ($269.7 billion), according to Forbes.

World today has 2,668 billionaires, including 236 newcomers—far fewer than last year’s 493

Forbes’ 36th annual World’s Billionaires List, released earlier this month, reveals 2,668 billionaires, including 236 newcomers—far fewer than last year’s 493.

Elon Musk tops the World’s Billionaires ranking for the first time ever, with an estimated net worth of $219 billion. Altogether the total net worth of the world’s billionaires is $12.7 trillion, down from last year’s $13.1 trillion.

Following last year’s record-breaking number of billionaires, the past 12 months have proven to be more volatile. The number of billionaires fell to 2,668, down from 2,755 last year. A total of 329 people dropped off the list this year—the most in a single year since the 2009 financial crisis.

“The tumultuous stock market contributed to sharp declines in the fortunes of many of the world’s richest,” said Kerry A. Dolan, Assistant Managing Editor of Wealth, Forbes. “Still, more than 1,000 billionaires got wealthier over the past year. The top 20 richest alone are worth a combined $2 trillion, up from $1.8 trillion in 2021.”

Key facts for the 2022 World’s Billionaires list:

  • Top Five: Tesla’s Elon Musk tops the list, unseating Amazon founder Jeff Bezos, who drops to the No. 2 spot after spending the past four years as the richest person in the world. Bernard Arnault of LVMH remains at No. 3, followed by Bill Gates at No. 4. Rounding out the top five is Warren Buffett, who rejoins the top five after falling to No. 6 last year.
  • Newcomers: Among the list of notable newcomers are Lord of the Rings director Peter Jackson(No.1929); OpenSea founders Devin Finzer and Alex Atallah (Nos. 1397); social media and e-commerce tycoon Miranda Qu (No. 1645) and pop star and cosmetics mogul Rihanna (No. 1729).
  • Self-Made: Of the total 2,668 people on the 2022 ranking, 1,891 are self-made billionaires, who founded or cofounded a company or established their own fortune (as opposed to inheriting it).
  • Women: There are 327 women billionaires, including 16 who share a fortune with a spouse, child or sibling, down from 328 in 2021.
  • Globally: Regionally, Asia-Pacific boasts the most billionaires, with 1,088, followed by the United States, with 735, and Europe, with 592.
  • Drop-offs: The war in Ukraine, a Chinese tech crackdown and slipping stock prices pushed 329 people off the World’s Billionaires list this year, including 169 one-hit wonders who were part of last year’s record 493 newcomers.

To view the full list, visit www.forbes.com/billionaires.

The 2022 Billionaires issue features five consecutive covers, including:

  • Igor Bukhman: When Vladimir Putin invaded Ukraine, Igor Bukhman, the Russia-born billionaire founder of gaming company Playrix, found himself with thousands of employees divided by the frontlines. His internal battlefield offers lessons for us all.
  • Ken Griffin: War in Europe. The China-Russia alliance. De-dollarization. Ken Griffin, Wall Street’s billionaire kingpin, is making the best out of the worst of times.
  • Tope Awotona: Awotona built Calendly out of frustration. Now the scheduling app is worth $3 billion—and the subject of a heated Twitter spat among Silicon Valley elite.
  • Ryan Breslow: Bolt cofounder Ryan Breslow has boosted the value of his fintech to the moon by promising an Amazon-style checkout to millions of online retailers. Now the new billionaire is making a lot of noise—and some powerful enemies—challenging the tech industry’s culture and ethics.
  • Falguni Nayar: A decade ago, when she was 49, Nayar left behind her investment banking career to launch beauty-and-fashion retailer Nykaa. She took it public in November and is now India’s richest self-made woman. Nykaa, which means “one in the spotlight,” currently sells more than 4,000 brands online and in its 102 stores.

The Forbes World’s Billionaires list is a snapshot of wealth using stock prices and currency exchange rates from March 11, 2022.

US Home Prices Rose By 20% In One Year

Prices rose 19.8% year-over-year in February, an even higher rate than the 19.2% growth seen in January, according to the S&P CoreLogic Case-Shiller US National Home Price Index.

Phoenix, Tampa and Miami reported the highest year-over-year gains among the 20 US cities tracked by the index. Phoenix led the way for the 33rd consecutive month with home prices rising 32.9% from the year before. It was followed by Tampa and Miami, which saw 32.6% and 29.7% gains, respectively.

All 20 cities reported price increases in the year ending February 2022. In January, 16 cities saw year-over-year growth. Prices were strongest in the South and Southeast, but every region continued to show big gains.

“US home prices continued to advance at a very rapid pace in February,” said Craig J. Lazzara, managing director at S&P Dow Jones Indices. “That level of price growth suggests broad strength in the housing market, which is exactly what we continue to observe.”

Although Lazarra noted that rising inflation, further interest rate hikes by the Federal Reserve and rising mortgage rates may soon take the momentum out of the housing market.

The imbalance between strong demand from prospective buyers and insufficient supply of available homes has also been pushing home prices higher, said George Ratiu, manager of economic research for Realtor.com

“Today’s S&P Case-Shiller Index highlights a housing market experiencing a renewed sense of urgency in February, as buyers worked through a small number of homes for sale in an effort to get ahead of surging mortgage rates,” he said.

While inventory has increased a bit since February, according to the National Association of Realtors, there are several other changes that have taken place since then, too.

Real estate markets have seen supply-chain disruptions from the war in Ukraine. Mortgage rates have also been rising fast, climbing above 5% for the first time since 2010. In addition, a strong labor market is driving wages and inflation higher, he said.

“For buyers, the jumps in prices and mortgage rates translated into sticker shock,” said Ratiu.

For a median-priced home financed with a 30-year loan, the monthly payment is $550 higher than a year ago, he said.

But with more inventory expected to come onto the market this spring and rising mortgage rates, housing analysts are expecting to see a cool-off in demand.

“Many buyers are deciding to take a step back and re-evaluate their budgets and timelines,” said Ratiu.

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