interest rates – Piazza Carlo Giuliani http://piazzacarlogiuliani.org/ Thu, 17 Mar 2022 23:24:10 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://piazzacarlogiuliani.org/wp-content/uploads/2021/03/cropped-icon-1-32x32.png interest rates – Piazza Carlo Giuliani http://piazzacarlogiuliani.org/ 32 32 A brief history of inflation in Aotearoa https://piazzacarlogiuliani.org/a-brief-history-of-inflation-in-aotearoa/ Thu, 17 Mar 2022 23:24:10 +0000 https://piazzacarlogiuliani.org/a-brief-history-of-inflation-in-aotearoa/

Inflation has reached its highest level in 30 years. So how did we get here and what awaits us?

First: definitions. Inflation describes the general increase in the prices of goods and services in the economy. Everything from food and fuel to health and housing. And the Consumer price index this is how we measure inflation. Every quarter, Stats NZ minions take a field trip to sample the prices of a representative basket of goods and services. The (weighted) average price of the basket of the day is compared to the basket of another moment. A positive change means a rise in prices – inflation. A negative change means lower prices – deflation.

The 1970s

The story of inflation in New Zealand over the past 50 years resembles a trilogy. And it starts in the 1970s. The 70s will be remembered for its flared jeans, high-heeled boots and even higher prices. Inflation averaged 11.5% between 1970 and 1980, largely supported by soaring oil prices. OPEC-sanctioned oil embargoes have seen oil prices more than quadruple. And as an economy heavily dependent on imported oil, New Zealand’s consumer prices have risen at the same pace. Inflation peaked at 18.4% in 1980.

In an attempt to control the upward spiral in prices, Prime Minister Robert Muldoon introduced a wage and price freeze in 1982. The policy certainly did the job and inflation fell below 5%. But the freeze was hugely unpopular. Profit margins were squeezed with sticky prices and workers wanted to take home more bacon. In 1984 the new Labor government was introduced and the policy freeze was lifted. But inflation returned to the highs of the 1970s. As many had feared and warned, the policy had simply suppressed inflation, not banished it.

Across the street, the Reserve Bank of New Zealand was also working hard to rein in inflation. And in the 1990s, all eyes were on our island nation. The RBNZ had introduced a revolutionary approach to monetary policy known as “inflation targeting” – later adopted by central banks around the world. Initially, the target band was set between 0 and 2%. Soon after, inflation was successfully brought under control. And the credibility of the RBNZ in fighting inflation has been established.

Over time, adjustments have been made to the definition of the target. Eventually, a target range of 1-3% with an emphasis on the 2% midpoint was decided. And in 2018, an additional policy objective was added to the RBNZ mandate: to support as many sustainable jobs as possible. But the 2018 amendment was just a formality. Employment has always been taken into account when defining monetary policy. And that’s thanks to the work of pioneering New Zealand economist, Bill Phillips. The Phillips curve describes the inverse relationship between unemployment and wages. In other words, when unemployment is low, wages tend to rise. And rising wages put upward pressure on costs, which businesses pass on to consumers through higher prices, creating inflation. Central bankers have used the Phillips curve to predict inflation and set monetary policy accordingly. To curb inflation, central banks would raise interest rates. To generate inflation, central banks would lower interest rates.

The GFC and post-GFC

In the post-inflation targeting era, prices have held up well, with inflation averaging around 2%. But the second part of New Zealand’s inflation saga was relatively brief, cut short by the global financial crisis. Financial markets were in disarray and economies were under significant pressure. Inflation in New Zealand peaked at 5.1% with sharp increases in the price of petrol, food and cigarettes. The unemployment rate rose sharply from 3.4% in 2007 to 6.2% at the end of 2010. The RBNZ cut the cash rate in response. In the space of just nine months, the cash rate fell from 8% to 2.5%. Inflation fell below 2%. But even as the economy recovered and the unemployment rate fell to 4%, inflation remained mysteriously low. Part III saw the Phillips curve inverted in New Zealand and textbooks thrown out the window.

After the GFC, inflation had remained consistently below target, averaging 1.5%. Several theories have emerged in an attempt to explain this economic conundrum. One theory points to globalization and the influx of imports of cheap manufactured goods from emerging economies. Another to aging populations and the global savings glut. Technological advancement is also to blame: a TV today with “smart” technology selling for the same price as last year’s version is deflationary. These developments exerted downward pressure on prices. But with interest rates pushed to historic lows, central banks had little room to cut rates further to generate inflation.

The Return of the Beast

At the turn of the decade came the Covid-19 pandemic. And a new chapter in our inflation story begins, but one that sounds familiar. Because just like bell bottoms and waders, 1970s inflation is back. At 6%, inflation is at its fastest pace in 30 years. And there are several reasons for this.

First, base effects are in play. The 2020 lockdown has depressed demand, especially for oil, as economies have been turned off. The New Zealand economy even experienced a period of deflation. But in 2021, the recovery took hold and demand rebounded strongly. The annual percentage changes are therefore slightly exaggerated given that prices started at a low “base”. But we can’t hide behind math forever. Especially since inflation is expected to remain high for some time.

High imported inflation explains the initial peak in headline inflation. The price of oil has rebounded and Covid-related restrictions have disrupted supply chains. Shipping costs have skyrocketed and there have been considerable delays in sourcing goods overseas. Overall, it has become more expensive to move goods from ports to stores. But this cost pressure comes at a time when demand has been surprisingly strong. Job security has been well supported by fiscal policy. Easy monetary policy has made money cheap. And a closed border has left many households with cash in the travel jar. Spending on everything from swimming pools to pets was not lacking in demand. But a shortage of supply and resilient demand is a powerful cocktail for higher prices.

Inflation has yet to peak, with imported inflation continuing to rise. The omicron outbreak is adding pressure to already strained supply chains. Russia’s invasion of Ukraine has pushed up commodity prices, with global oil prices up 60% year-to-date. And a weaker New Zealand currency offers little compensation. An inflation rate starting with a 7 seems more likely every day.

But cost inflation should eventually run out of steam – although predicting exactly when is nothing short of a guessing game. What is more concerning is the dynamics of domestic inflation, as domestically generated inflation is more difficult to control. We have already seen non-tradable (domestic) inflation hit its highest level on record. And that’s three-fifths of all items in the CPI basket. So it’s not just about used cars and fruits and vegetables with more expensive price tags. The New Zealand economy is enjoying a rapid recovery and is now exceeding its potential. Demand continues to outstrip supply and this imbalance pushes prices up.

The job market is no exception. A capacity-constrained economy pushed the unemployment rate to 3.2%, a new record high. The pool of available talent is rapidly evaporating. Employers must pay to attract and retain workers. Wages are expected to rise, which means higher costs for businesses and therefore higher consumer prices. The triggering of this price-wage spiral risks making transitory price peaks more persistent.

Another concern is rising inflation expectations, as these have the potential to be self-fulfilling. If businesses and households expect prices to rise, which would erode expected profit margins and the purchasing power of a hard-earned dollar, then prices and wages should adjust now. Over the past decade, medium-term expectations have remained relatively well anchored at the target midpoint of 2%. But five-year expectations have since risen to 2.3%. The recent upward slide certainly calls into question the credibility of the RBNZ when it comes to fighting inflation.

Is inflation bad?

Reading this far, it might seem like inflation is the big bad bogeyman that needs to stay hidden. But high inflation can be a good thing. Especially coming out of a recession. It signals a strong and growing economy. What we don’t want is the bogeyman of inflation spending too much time outside the closet. High inflation for an extended period is what concerns us. Especially when wage growth does not follow the rise in the cost of living. At 2.8%, wages are progressing at a snail’s pace and households are seeing their real incomes erode. And low-income or fixed-income households are disproportionately affected, as food and fuel typically take up a larger share of the household budget for low-income households. And inflation hurts those who don’t have as much leeway.

Can we tame the beast again?

With the threat of inflation lingering, the RBNZ began to scale back the monetary stimulus it injected at the start of the pandemic. Last October, the RBNZ raised the policy rate for the first time in seven years. The cash rate was increased two more times in successive moves to 1%. And we still see eight hikes underway to reach 2.5% by the end of the year and 3% in 2023. The RBNZ has a lot of work to do to contain inflation and better balance the economy.

A rising cash rate means that interest rates in the economy have risen further. The days of a two-year fixed mortgage rate of 2% are long in the rear-view mirror, and a rate close to 6% is inevitable. Tighter monetary conditions should pull the brakes on economic activity – particularly in the housing market – and ease inflationary pressures. But only time will tell if we can tame the beast of inflation again.

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It’s not the stagflation of the 1970s, but it’s not the low-rate world of the 2010s either. https://piazzacarlogiuliani.org/its-not-the-stagflation-of-the-1970s-but-its-not-the-low-rate-world-of-the-2010s-either/ Tue, 15 Mar 2022 13:12:56 +0000 https://piazzacarlogiuliani.org/its-not-the-stagflation-of-the-1970s-but-its-not-the-low-rate-world-of-the-2010s-either/

Those of us who remember the 1970s, even when we were kids, get nervous. No decade is entirely bad, but very few of us would like to see a repeat of inflation, endless financial stress, poverty – and, in the case of many families (mine included), migration to looking for a job. Unfortunately, so far the 2020s are too much like the 1970s for comfort.

Dario Perkins of the TS Lombard Research Group – our latest guest on the MoneyWeek podcast – lists the ways: The 1960s saw one of the longest booms on record and a flattening of the Phillips curve – that is, say that falling unemployment was not correlated with rising inflation in the way one would expect.

This encouraged policymakers to prioritize full employment over low inflation (inflation did not seem to be the relevant risk) and to develop more militant fiscal policy.

This was the backdrop for a fabulous bull market. The FTSE All-Share Index doubled in the two years to January 1969, when it peaked at a record price-earnings ratio of 23 times.

Then came a huge energy shock that built on earlier inflationary rumblings. The Phillips curve normalized, wages started to rise and the money supply jumped. Policymakers blamed temporary factors – and removed them from the inflation numbers they used as a benchmark. It was “transient”, you see.

It’s not the 1970s…

Sounds awfully familiar, doesn’t it? Especially now that, despite last Thursday’s sharp drop in oil prices, the energy price shock of recent weeks is comparable in magnitude to that of the 1970s.

Perkins isn’t convinced we should be as tense as I’m beginning to feel. There is, he says, a huge and crucial difference between now and then, in the UK at least: then labor had power; Now, that is no longer the case. Our population is not so young and “activist”, our unions are weak, our markets are much more open (companies cannot get away with price hikes in the same way) and hardly anyone – pensioners and Members aside – does not have their income indexed in any way to inflation. All of this means that a wage price spiral cannot start in quite the same way.

He may be right. I would say workers will rebuild their bargaining power fairly quickly in the face of CPI inflation hitting 10%. It is worth recalling that in the 1960s wages lagged inflation for some time before pressures appeared. There were rumblings in 1966 in the railroads and coal mines and then things got seriously worse in late 1969 when Ford Motor workers went on strike.

…but it’s not the 2010s either

Yet, whoever of us is most right – forecasters are rarely quite right – one thing is certain: we will not return to the 2010s.

The deflation machine that has been the driving force of the past decades is properly broken, which quickly proves to be a terrible shock to fund managers who have only ever worked inside said machine, and who were therefore hard-wired in their behavior. an assumption that moderate inflation and low interest rates would last forever.

With the reversal of globalization, labor costs at best no longer falling, and the structural problem of material and energy supply increasingly evident, the prices of just about everything must now rise. . A quick reminder for those who think there is an easy way out: it takes fossil fuels to make wind turbine blades and solar panels and it takes a lot of nickel – up to 90% in two weeks – to make electric car batteries.

The question is how far prices should rise, how fast and with what volatility. That we cannot know. The war in Ukraine is giving us some nasty near-term clues (very quickly and with a lot of volatility) but the layering of uncertainty means we can’t guess much more than that. Who knows, for example, what might result from attempts by money-printing governments to shield households from the sharp rise in food prices caused by the horrors in one of the world’s most trusted grain producers. ?

How can you invest?

Where are the financial safe havens? You might think that as long as inflation stays around 1% to 4% (Perkins estimate), you will be safe in stocks. This is what we are often told, but it is not always the case.

Inflation in the UK only exceeded 5% in 1969, but investors still lost hugely in the 1960s: the market rose by 20% and prices by 43%. Extend it into the stagflationary 1970s and things look pretty bad too: From October 1964 to May 1979, a period that encompassed two Labor governments and a Tory, UK stock investors lost 31.7% of their money in terms of adjusted for inflation.

So much for the idea that a stock index can protect you from inflation, stagflation – or anything else. The good news is that the only way a stock market can protect you is to buy it low – the best long-term returns come from buying cheap markets.

It would be nice to think that some markets are almost there – especially the United States, which is less at risk of a war-related recession than Europe – but they are not. For that, we would need to be sure that there was another wave of central bank money on the way, to know that energy prices are coming down, and to be sure that the valuations are attractive. None of these things are true, or close to being true. For example, Shiller’s price-to-earnings ratio in the US is still over 30x, compared to a long-term average of over 16x.

Waiting for them to be true is a slow process. Russell Napier, a market historian, likes to point out that the four major bear markets in the United States lasted an average of nine years each. In the meantime, you should get some protection against commodities and against gold – you did in the 1970s.

But you’d also be wise to look into multi-asset funds run by managers who have long known the deflationary machine would break and are invested accordingly. Look Ruffer Investment Company (LSE: RICA)which has been up slightly since the beginning of the year, Personal Property Trust (LSE: NLP) and Capitalization Trust (LSE: CGT). They are more ready than most.

• This article first appeared in the Financial Times

]]> Amazon announces stock split offering green in a sea of ​​red https://piazzacarlogiuliani.org/amazon-announces-stock-split-offering-green-in-a-sea-of-%e2%80%8b%e2%80%8bred/ Thu, 10 Mar 2022 14:36:48 +0000 https://piazzacarlogiuliani.org/amazon-announces-stock-split-offering-green-in-a-sea-of-%e2%80%8b%e2%80%8bred/

Key points to remember:

  • Consumer Price Index (CPI) report hits projections
  • Stocks rebound as Russian official signals potential progress ahead of peace talks
  • The strength of the sector could change depending on the prospects for peace

Stock index futures were pointing to a lower open as Wednesday’s rally appears to lack the legs to continue into Thursday. Commodities are rebounding from yesterday’s strong sell-off, and that seems to be weighing on investors. However, today’s Consumer Price Index (CPI) report will capture much of the attention of investors.

The CPI report measured a 0.8% increase month-on-month and a 7.9% increase year-on-year, meaning inflation rose as foreseen. However, these are still very high figures not seen since the early 1980s. Core inflation which excludes food and energy rose by 6.4% year-on-year, which was higher than expected by 5.9%. Stock index futures rallied on the report, but quickly gave back gains. All in all, there’s not much here that’s likely to push the Fed off the trajectory Chairman Jerome Powell outlined to Congress last week.

Investors are likely feeling the jolt of market swings, especially with 2% ranges. While there really isn’t anything that signals an end in sight, we can hope that the ranges will at least tighten.

US markets do not appear to be benefiting from a good trading day in Asia. The Japanese Nikkei 225 rose nearly 4% on lower oil prices. The Hang Seng Index in Hong Kong rose 1.27%, while the Shanghai Composite Index traded 1.22% higher. However, oil futures are trading higher again this morning, rising 5.25% before the opening bell.

As the Fed moves slowly to raise rates, some companies are looking to raise capital while interest rates are still low. AT&T (T) and Discovery (DISCA) raised $30 billion by selling 40-year corporate bonds for their joint venture. The long maturity allowed the group to offer a yield above 3%, which seemed to attract a lot of attention.

After the market closed on Wednesday, Amazon (AMZN) rebounded more than 8% on news that the company had approved a 20-to-1 stock split in February. Stock splits allow small investors to buy stocks without jeopardizing the diversification of a portfolio. AMZN also announced its intention to buy back $10 billion of its shares.

Market Minutes Review

Stocks rebounded on Wednesday with the S&P 500 (SPX) up 2.57% and testing the 4,300 level. We’ve watched this key level as support for the past nine months, but now it’s acting as resistance. . This level will be key for some traders. If the bulls are able to overcome the resistance, many traders can expect the rally to continue. However, if the resistance holds, the bears could push the benchmark to lower levels.

The rebound was prompted by the spokesperson for the Russian Foreign Ministry who said that Moscow did not want to overthrow the government in Kiev. I hope this is a good sign for tomorrow’s talks between Russia and Ukraine. However, Ukrainian President Zelensky said Ukraine would not give “a single inch” to Russia. Yesterday, President Zelensky said that Ukraine would no longer seek membership in NATO (North Atlantic Treaty Organization), which has been the main point of contention for Russia.

The news led to a sell-off in commodities, which have seen a tear in the past seven trading days. Crude oil futures fell 11.33% on Wednesday, closing below $110 a barrel. Similarly, RBOB gasoline futures fell more than 10% and fuel oil futures fell 20% on the day.

Mains strength switch

If the peace talks succeed, there could be a change in the strength of the sector. Depending on how oil prices react, energy will likely pull back a bit as crude oil goes through a price discovery phase where investors try to focus on supply and demand instead of speculating on what might come next. with Russia and Ukraine. However, even before Russia invaded Ukraine, oil prices were still rising and analysts were forecasting prices ranging from $65 a barrel to $150 in 2022. This means energy stocks could pull back in the short term. term but increase in the long term. If so, energy could still be a strong sector.

Wednesday’s sector performance could be a bit of a microcosm of what’s to come in the near future if peace prevails. The energy sector was the worst performer, with the Energy Select Sector Index falling 3.11%. Financials and technology were the strongest, followed by materials and consumer discretionary. The Financial Select sector index rose 3.93% as the 10-year Treasury yield (TNX) jumped more than 4% on the day and appears to be heading back towards a 2% yield.

If the threat of war lessens, the Federal Reserve is freer to be more aggressive in raising interest rates to fight inflation. Rising rates tend to benefit financials as the gap between savings and credit widens. In fact, the PHLX KBW Bank Index (BKX) rose 4.19% in reaction to higher yields.

If the resistance of the S&P 500 (SPX) holds, it is difficult to say how the sectors will react. Wednesday’s rally could just be a relief rally as the war between Russia and Ukraine is far from over. Therefore, there could still be a lot of anxiety that could prevent stocks from following today. However, war anxiety will make it difficult for the Fed to be aggressive on inflation, so inflationary sectors like energy, materials and financials could still benefit.

Measuring fear: Speaking of anxiety, the Cboe Market Volatility Index (VIX), aka Fear Gauge, fell 7.63% and is now trading just above 32. There are different levels on the VIX that can help investors gauge the degree of fear and complacency. It is important to remember that these levels are not exact due to the enormous volatility of the index. These levels have also evolved over time.

Measuring fear: Investor complacency tends to be highest when the VIX is trading below 15. This tends to happen during mature bull markets. Much of 2021 found the VIX at or below 15. However, in 2018 the VIX was as low as 10. When the VIX is around 20, investor anxiety tends to be heightened. This level often coincides with normal market pullbacks. At 30, anxiety turns to fear. In the early 2000s, this level tended to signal that fear was close to a capitulation point. When the VIX hits 40, investors typically hit a peak of fear. The VIX was around 40 years old when the dotcom bubble burst.

However, there have been times when the VIX has increased much more. When COVID-19 started arriving in the United States and breaking out, the VIX was hitting 90. Similar levels were reached during the 2008 credit crisis. The biggest spike on record was Black Monday in 1987, where the VIX exceeded 170.

TD Ameritrade® Commentary for educational purposes only. SIPC member.

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How two men allegedly tricked investors with a story of rare wines https://piazzacarlogiuliani.org/how-two-men-allegedly-tricked-investors-with-a-story-of-rare-wines/ Wed, 09 Mar 2022 05:00:00 +0000 https://piazzacarlogiuliani.org/how-two-men-allegedly-tricked-investors-with-a-story-of-rare-wines/

The two Englishmen started showing up at investor conferences in 2015, armed with a tempting proposition. Participants could, through their London-based wine brokerage, Bordeaux Cellars, lend money to wealthy struggling borrowers who needed quick loans, no questions asked. Lenders would receive interest at the rate of 12%, paid quarterly.

Normally, such a high interest rate meant the loan would be risky. This is not the case, the two men asserted – these loans would be guaranteed by prestigious wines from the cellars of the borrowers, transferred in the name of the lender in air-conditioned and secure warehouses supervised by Bordeaux Cellars. And the loans would be capped at 35% of the market value of the wines.

“What happens in the event of default? asked Stephen Burton, the 57-year-old chef of Bordeaux Cellars, at a 2015 conference in Cancun. “We sell the wine, bearing in mind that you only loaned 35% of its value. It’s very easy to sell quite quickly.”

“A lot of clients are now cash-strapped real estate developers,” Burton partner James Wellesley, 55, said at a 2017 conference in Las Vegas. “We only lend against investment grade wine….We mainly deal in French wines, some of the best Californian wines [like] Howling eagle.”

A third team member, Lindsay Gundersen, told attendees at a conference in Las Vegas in 2018, “We charge the borrower 16%, so they pay all the administration costs…Insurance, air conditioning, etc., is the cost of the borrower, not the lender.”

The promise of 12% interest to the lender, free of charge, on a secured loan in an era of historically low interest rates seemed too good to be true. And it was.

Last week, Burton and Wellesley, CEO and CFO of Bordeaux Cellars respectively, were indicted by a grand jury in federal court in the District of Brooklyn for wire fraud and money laundering. In total, Burton and Wellesley are charged with inducing investors to “invest more than approximately $99.4 million in term loans allegedly brokered by Bordeaux Cellars,” the indictment states.

“Unlike the fine wine they claimed to have, the defendants’ repeated lies to investors have not aged well,” said Breon Peace, U.S. Attorney for the Eastern District of New York.

Burton and Wellesley (both used multiple aliases) had already been hit last year with a civil judgment from a London High Court involving the same scheme to scam at least 161 people. The men have been ordered to repay over £56million in losses by their clients.

The idea behind Bordeaux Cellars, Burton told CNBC business reporter Jane Wells in 2013, came to him while reading a Sunday time item. “There was a pawn shop here in London that had a warehouse full of Aston Martins and Ferraris. Literally people were just coming into that warehouse, handing them the keys for a cash loan. So I just put two and two together, and I thought, you know, we could do this with wine.”

The operation he created, in the tale Burton told Wells, quickly made 200 loans worth $30 million. Burton even claimed that a divorcing American dropped off two dozen cases of Screaming Eagle to get “quick cash.”

But Burton’s business plan is a puzzle. Why would someone wealthy enough to own two dozen cases of Screaming Eagle, Napa Valley’s most expensive cult Cabernet, put up their award-winning wine for a loan at 16% interest? Surely there were better options.

In fact, there were no such borrowers. As their business grew, Burton, now with partner and CFO Wellesley, focused entirely on finding lenders willing to pour in, falsely claiming they had borrowers in waiting, according to the indictment.

Additionally, these supposed borrowers were allowed to hide their identities behind individual corporate shells. Over 60 of these shells (the list begins with “Alsop” and “Apple Tree” LLC and ends with “Zermatt” and “Zug”) were registered in Belize but controlled from London by Burton. The reams of documents to be drafted for the loans, and to allegedly give the appearance of legitimacy, appear to have been drafted by hired lawyers.

According to the High Court complaint, some of the money allegedly lent was used in the Ponzi scheme to make interest and principal payments to the lenders. The rest was deposited in bank accounts linked to Burton and Wellesley, and was used to buy wine and “gold, other goods and services”.

Seemingly full of money, Burton has become well known in London wine circles. “Stephen has been around town for years opening crazy bottles,” said Alex Turnbull, then at wine company Justerini & Brooks and currently head of private clients at Jeroboams. wine spectator. “I once heard him say with great confidence that he had the largest collection of Penfolds Grange in the world. I told him that I knew people who also had large Grange collections and said: “Maybe you should meet them. He became a little suspicious. So I had my suspicions for a very long time, but working in the business I struggled to voice them or find someone to agree with me that it all sounded very suspicious.

In 2019, quarterly interest payments to Caves de Bordeaux lenders came to an abrupt halt. An American investor sought advice from JustAnswer, a British online legal service. “I invested in a company called Bordeaux Cellars in the UK,” the investor wrote. “In this investment, I am the lender of two loans and each loan is $100,000…. I am supposed to receive the interest payments quarterly and the last one was due March 12. I did not receive the payment and I have tried to contact the Caves de Bordeaux several times and there is no response to date.

“I undertook a little research,” replied JustAnswer’s lawyer. He had learned that the two loans had been made to limited liability companies called “Gstaad” and “Pemberley” Investments, both among 61 similar limited liability companies registered in Belize and listed in the civil complaint against Bordeaux Cellars before the High Court. Noting that Bordeaux Cellars “has no business history” and “has not submitted audited accounts”, the lawyer informs the borrower that he has little recourse to recover his funds.

Apparently neither the interrogating victim nor the lawyer knew that on Valentine’s Day 2019, Burton was arrested at a hotel in Kent, England. In his bedroom, police found two fake passports, expensive watches, precious metal bullion and South African and British currency worth a total of nearly £1million. Six months later, Burton pleaded guilty to possession of false passports and money laundering and was sentenced to four years in prison.

Wellesley was arrested on February 4 and is currently in prison in England. The U.S. Attorney for the Eastern District of New York is considering extradition. Wellesley has already been convicted and imprisoned twice for financial crimes.

But Burton is no longer in custody. In 2020, he was released early from prison, reportedly due to COVID-19 issues. His current whereabouts are unknown.


Stay on top of important wine stories with the free Wine Spectator service Last minute alerts.

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Alpha Exploration Ltd. – Grant of stock options https://piazzacarlogiuliani.org/alpha-exploration-ltd-grant-of-stock-options/ Tue, 08 Mar 2022 18:53:00 +0000 https://piazzacarlogiuliani.org/alpha-exploration-ltd-grant-of-stock-options/

Calgary, Alberta–(Newsfile Corp. – March 8, 2022) – Alpha Exploration Ltd. (TSXV: ALEX) (“Alpha“or the”Company“) announces its intention to grant 100,000 stock options to a director. The exercise price of the stock options has been set at C$0.66 and the stock options will be exercisable for a period of five years, until March 8, 2022 inclusively.

The granting of stock options is subject to the approval of the TSX Venture Exchange.

About Alpha

The company is focused on discovering world-class economic deposits of gold and base metals in the highly prospective Arabian-Nubian Shield, on either side of the Red Sea. Alpha currently owns a 100% interest in the large (771 km2) Kerkasha exploration permit in southwestern Eritrea on which 17 prospects have been identified to date. The large Anagulu gold-copper porphyry system was a pristine discovery by Alpha geologists in early 2018, which was made while running a region-wide soil sampling program. property. The discovery diamond hole was drilled in January 2020 and returned a 49m wide interval averaging 2.42 g/t gold, 1.10% copper and 6.83 g/t silver.

Cautionary Notes

This press release is for distribution in Canada only and is not for distribution to US news services or broadcast in the United States.

Forward-looking statements

Certain statements and information contained herein, including all statements that are not historical facts, contain forward-looking statements and forward-looking information within the meaning of applicable securities laws. Often, but not always, forward-looking statements or information can be identified by the use of words such as “estimate”, “project”, “believe”, “anticipate”, “intend”, “expect to ”, “plan”, “predict”, “may” or “should” and the negative form of these words or such variations or comparable terminology are intended to identify forward-looking statements and information. With respect to forward-looking statements and information contained herein, Alpha has made numerous assumptions, including assumptions about general business and economic conditions and the price of gold and other minerals. The foregoing list of assumptions is not exhaustive.

Although Alpha’s management believes that the assumptions made and expectations represented by such statements or information are reasonable, there can be no assurance that any forward-looking statements or information contained herein will prove to be accurate. Forward-looking statements and information, by their nature, are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements, or results of the industry, materially different from future results, performance or achievements. expressed or implied by such forward-looking statements or information. These factors include, but are not limited to: risks associated with Alpha’s funding efforts; risks associated with Alpha’s business given its limited operating history; business and economic conditions in the mining industry generally; supply and demand for labor and other project inputs; changes in commodity prices; changes in interest rates and currency exchange rates; risks related to inaccurate geological and technical assumptions (including with respect to tonnage, grade and recoverability of reserves and resources); risks related to unforeseen operational difficulties (including failure of equipment or processes to perform according to specifications or expectations, cost escalation, unavailability of materials and equipment, action governmental or delays in receiving governmental approvals, industrial disruptions or other business measures, and unforeseen health, safety and environmental events); weather-related risks; political risk and social unrest; changes in general economic or financial market conditions; changes in laws (including regulations regarding mining concessions); risks related to the direct and indirect impact of COVID-19, including, but not limited to, its impact on general economic conditions, the ability to obtain necessary financing and potential delays in the activities of exploration. and other risk factors as detailed from time to time. Alpha does not undertake to update forward-looking information except in accordance with applicable securities laws.

For more information, visit Alpha’s webpage at www.alpha-exploration.com or contact:

Michael Hopley
President and CEO
Alpha Exploration Ltd.
Email: mhopley@alpha-exploration.com
Tel: +44 207129 1148

Cautionary Notes

This press release is for distribution in Canada only and is not for distribution to US news services or broadcast in the United States.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/115996

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What is a payday loan? https://piazzacarlogiuliani.org/what-is-a-payday-loan/ Fri, 25 Feb 2022 22:26:00 +0000 https://piazzacarlogiuliani.org/what-is-a-payday-loan/

payday ready are generally short-term unsecured loans characterized by high interest rates that generally do not require a credit check.

Although there is no exact and universal definition of the term, the US Consumer Financial Protection Bureau indicates that this type of loan is usually $500 or less and is usually due on the borrower’s next payday. States have different laws governing these types of fast loans, but they may be available to Americans through in-store payday lenders or in line, depending on location. The due date on payday loans is generally two to four weeks from the date of issuance, and lenders generally do not consider borrowers’ credit scores or their ability to meet other financial obligations when approving the loan.

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To secure a payday loan, payday lenders often require a personal check from the borrower for the loan amount, plus interest and fees, for a future deposit. They often require direct access to the borrower’s bank account.

Payday lenders hold the personal check until the borrower receives their next paycheck, direct deposit or social Security Payment. Depending on the terms of the loan and the laws of the state in question, some payday lenders offer long-term repayment plans that allow them to make multiple electronic withdrawals from the borrower’s bank account.

The average term for payday loans is about two weeks, and loans typically range between $50 and $1,000. In exchange for quick loans that don’t require a credit check, payday borrowers typically pay exorbitant interest rates and fees on their loans. Payday lenders often charge annual percentage ratesor APR, of 400% or more on their loans, plus finance charges of between $10 and $30 for every $100 borrowed.

The only requirements to qualify for most payday loans are an opening Bank account relatively good standing, a regular income and a source of identification.

Because little consideration is given to the financial condition or creditworthiness of borrowers, the CFPB has found that payday loans have a high default rate of around 20%. Additionally, approximately 80% of payday borrowers renew or re-borrow their loans within 30 days of their initial loan.

Qualified state borrowers can apply for a payday loan online from companies such as MoneyMutual, CashUSA.com, and BillsHappen. Many payday lenders also have thousands of physical stores in the United States.

In times of financial emergency or life or death situation, payday loans may be one of the only places Americans have bad credit can turn to temporary financial assistance. However, due to widespread deception and predatory behavior in the payday loan industry, the CFPB, Federal Trade Commission, and other federal and state regulators have repeatedly warned Americans of the dangers of payday lending. payday and imposed restrictions on the activities of payday lenders.

A 2016 five-year study by Pew Charitable Trusts found that 12 million Americans take out payday loans each year, and those borrowers collectively pay $9 billion a year in loan fees alone.

  • Speed. Payday loans are fast, and lenders often approve the same or next day.
  • Ease of use. It’s usually easy to get approved for a payday loan as long as the applicant has a stable source of income, a bank account in good standing, and proper identification. Borrowers can even get payday loan approval online. While some critics say payday loans are inherently predatory, there are laws in place to protect the rights of borrowers.
  • Availablity. Depending on the situation, payday loans may be one of the only viable sources of emergency cash for borrowers with bad credit.

  • High cost. Payday loans can come with annual interest rates of 400% or more, and finance charges can be 15% to 30% of the loan amount. These high interest rates stand out even more compared to the national average of around 16.17% credit card interest rate or the average interest rate of 4.25% over 30 years mortgage end of February 2022.
  • Debt cycle. Due to interest and fees, a payday loan can easily force the borrower to put off the majority of their next paycheck, creating an opportunity for borrowers to fall into a cycle of repeat loans.
  • Harassment. Payday lenders have a reputation for exploiting financially vulnerable borrowers and using aggressive and harassing collection practices.

]]> BigPay is launching its digital personal loan product next week https://piazzacarlogiuliani.org/bigpay-is-launching-its-digital-personal-loan-product-next-week/ Wed, 23 Feb 2022 16:38:34 +0000 https://piazzacarlogiuliani.org/bigpay-is-launching-its-digital-personal-loan-product-next-week/

BigPay, Capital A’s e-wallet offering, is launching a brand new feature where you can apply for loans with instant approval. It claims to be the first all-digital personal loan product in Malaysia.

According to the teaser image, BigPay’s personal loan product offers approvals as fast as 5 minutes and no paperwork required. The app will push monthly reminders and users should be able to make refunds easily within the app itself. BigPay is providing a presentation of its product next week and full details should be revealed very soon.

In case you missed it, BigPay received a provisional lending license in November 2020 from the Department of Housing and Local Government (KPKT). According to Capital A CEO Tony Fernandes, the license will allow users to get quick loans at low interest rates. He also said that although the B40 group will be the biggest beneficiary of the approval, the funding will also be available for others.

Besides BigPay, other companies such as Axiata Digital Capital, Grabfin Operations, GHL Payments, Presto Credit, JCL Credit Leasing, Fortune Tree Capital, and Hoop Fintech have also obtained a provisional license from KPKT.

BigPay’s personal loan offering comes at a time when several e-wallet players have started offering Buy Now Pay Later (BNPL) products. Some BNPL options offer interest-free installments for a short term of 3-4 months, but these are often limited to retail and online purchases.

Personal loan offers greater flexibility as users can use them for emergency situations such as medical or household repairs. It could be used for debt consolidation or to fund a new business, provided interest rates are favorable. Since its introduction, BigPay and its physical prepaid card have been popular among international travelers as they offer lower exchange rates and ATM withdrawal fees. In addition to this, the app also offers money transfer services at lower rates than traditional banks. Recently, BigPay increased its wallet size to RM20,000, but it still does not support DuitNow QR.

BigPay has submitted its Application for Digital Banking License in Malaysia last year and hopes to offer full-fledged financial services to individuals, self-employed and MSMEs. Last year they also got $100 million (about RM418 million) in financing from South Korea’s SK Group.

Related reading

]]> Hecla Mining Company (NYSE:HL) – A look at Hecla Mining’s debt https://piazzacarlogiuliani.org/hecla-mining-company-nysehl-a-look-at-hecla-minings-debt/ Fri, 18 Feb 2022 14:41:00 +0000 https://piazzacarlogiuliani.org/hecla-mining-company-nysehl-a-look-at-hecla-minings-debt/

Shares of Hecla Mining (NYSE:HL) is down 8.58% over the past three months. Before understanding the importance of debt, let’s take a look at how much debt Hecla Mining has.

Watch this: Boeing and 3 other stocks bought by insiders

Hecla Mining debt

According to Hecla Mining’s most recent balance sheet, released on November 5, 2021, total debt stands at $527.11 million, including $516.25 million in long-term debt and $10.86 million in current debt. After adjusting for $190.90 million in cash equivalents, the company has a net debt of $336.21 million.

Let’s define some of the terms we used in the paragraph above. Current debt is the portion of a company’s debt that is due within one year, while long-term debt is the portion due in more than one year. Cash equivalents include cash and all liquid securities with maturities of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

Investors look at the debt-to-equity ratio to understand a company’s financial leverage. Hecla Mining has total assets of $2.67 billion, bringing the debt ratio to 0.2. Typically, a leverage ratio greater than one indicates that a significant portion of debt is asset-funded. A higher debt-to-equity ratio may also imply that the company could be at risk of default if interest rates were to rise. However, debt ratios vary widely from industry to industry. A debt ratio of 25% may be higher for one industry and average for another.

Why Debt Matters

Debt is an important factor in a company’s capital structure and can help it achieve growth. Debt typically has a relatively lower cost of funding than equity, making it an attractive option for executives.

However, due to interest payment obligations, a company’s cash flow may be affected. Equity holders can retain excess profits, generated by debt capital, when companies use debt capital for their business operations.

Looking for stocks with low leverage ratios? Check out Benzinga Pro, a market research platform that gives investors near-instant access to dozens of stock market metrics, including leverage ratio. Click here to find out more.

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Dun & Bradstreet Corporation (The) (NYSE:DNB) – What Does Dun & Bradstreet Hldgs Debt Look Like? https://piazzacarlogiuliani.org/dun-bradstreet-corporation-the-nysednb-what-does-dun-bradstreet-hldgs-debt-look-like/ Mon, 14 Feb 2022 14:45:00 +0000 https://piazzacarlogiuliani.org/dun-bradstreet-corporation-the-nysednb-what-does-dun-bradstreet-hldgs-debt-look-like/

Over the past three months, shares of Dun & Bradstreet Hldgs (NYSE:DNB) fell 2.19%. Before understanding the importance of debt, let’s take a look at how much debt Dun & Bradstreet Hldgs has.

Debt of Dun & Bradstreet Hldgs

Based on Dun & Bradstreet Hldgs balance sheet as of November 4, 2021, long-term debt is $3.54 billion and current debt is $28.10 million, for a total debt of $3.57 billions of dollars. Adjusted for $234.40 million in cash equivalents, the company’s net debt is $3.34 billion.

Let’s define some of the terms we used in the paragraph above. Current debt is the portion of a company’s debt that is due within one year, while long-term debt is the portion due in more than one year. Cash equivalents include cash and all liquid securities with maturities of 90 days or less. Total debt equals current debt plus long-term debt minus cash equivalents.

Shareholders look at the debt ratio to understand a company’s financial leverage. Dun & Bradstreet Hldgs has total assets of $9.75 billion, bringing the debt ratio to 0.37. Typically, a leverage ratio greater than one indicates that a significant portion of debt is asset-funded. A higher debt-to-equity ratio may also imply that the company could be at risk of default if interest rates were to rise. However, debt ratios vary widely from industry to industry. A debt ratio of 35% may be higher for one industry and normal for another.

Why Debt Matters

Debt is an important factor in a company’s capital structure and can help it achieve growth. Debt typically has a relatively lower cost of funding than equity, making it an attractive option for executives.

Interest payment obligations can impact the company’s cash flow. Having financial leverage also allows companies to use additional capital for business operations, allowing shareholders to retain excess profits generated by debt capital.

Looking for stocks with low leverage ratios? Check out Benzinga Pro, a market research platform that gives investors near-instant access to dozens of stock market metrics, including leverage ratio. Click here to find out more.

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The Fed Prepares to Fuck Workers Again https://piazzacarlogiuliani.org/the-fed-prepares-to-fuck-workers-again/ Tue, 08 Feb 2022 02:54:07 +0000 https://piazzacarlogiuliani.org/the-fed-prepares-to-fuck-workers-again/

The Federal Reserve Board has signaled its intention to raise interest rates, citing fears of an overheated economy. Robert Reich published an opinion piece in The Guardian saying that raising interest rates will hurt American workers. Reich explains; “They fear that a labor shortage will drive up wages, which in turn drive up prices – and that this wage-price spiral will spin out of control.” Reich explains why this is wrong.

The theory behind the Fed’s action is called the Philips curve, which basically says that when unemployment goes up, inflation goes down, and vice versa, when unemployment goes down, inflation goes up. Here is a technical discussion of the history of the Philips curve. This one is shorter and may be easier to read. They both say the same thing: there is no obvious relationship. The first article describes some professional criticisms of the Philips curve which, unfortunately, never had an impact on the decision-making. The position of the economics profession is apparently that it must be right because they learned in an advanced economics course in college.

When you think about it, it’s complete nonsense: there are many sources of inflation, not the least of which is the pricing power of corporations. When most industries are highly concentrated on a few market players, they can set prices to maximize their profits. For example, Amazon dominates retail. They just increased the price of their Prime service by $20 per household. There are approximately 150 million US subscribers. This represents a revenue increase of approximately $3 billion. Amazon blames wage increases and inflation for the increase. Not really. It comes on top of a staggering $33.4 billion in profits. So there you get a huge increase in profits, far more than any salary increase or other inflationary cost.

Reich says the impact of Fed interest rate hikes will trickle down to American workers. As he puts it, “higher interest rates will hurt millions of workers who will be unwittingly drawn into the fight against inflation by losing jobs or raising wages for a long time.”

Let’s look at the numbers.

This graph shows the share of GDP devoted to labour*.

Gray bars are recessions. Almost every recession since 1947 has been triggered by interest rate hikes. This chart shows that when wages start to rise, the Fed raises rates, leading to recessions. The wage share is falling. When it starts to rise again, the Fed triggers further rate hikes. Prior to 1960, the labor share had almost reached its highest previous levels. After 1960, the peaks of the labor share never reach their previous level.

The Great Crash led to a recession, which was not caused by the Fed. In response, the Fed cut interest rates to zero. But the labor share only returned to 2008 levels in 2020 and has fallen since. Why does the Fed fear wages at this absurdly low share of GDP?

Now let’s look at corporate profits. This chart shows an estimate of corporate earnings**.

The chart shows that from 2012 to 2020, corporate profits were roughly flat at around $2.2 trillion. Then profits jumped to the current level of $3.1 trillion in just two years. I guess the total upside is something like $1.4 trillion. It’s an amazing increase. When has any media highlighted this as a major driver of inflation? Business journalists repeat claims from corporate PR hacks that it’s all the fault of greedy American workers, or Covid, or *** supply chains, and it’s just market forces at the moment. ‘work. Talking heads will tell us that gigantic oligopolistic corporations will use these profits to build new factories and increase supplies. Or another spiel from the Econ 101 textbooks.

Discussion

1. The Fed protects capital at the expense of labor. That’s what we mean when we say inflation is such a big problem that we have to hammer workers with unemployment to hedge against inflation. It is true that inflation affects workers, but why is there no way to solve this problem by penalizing capital? After all, inflation due to corporate actions, such as supply chain, market power, rising prices and favorable government treatment, is just as dangerous as any inflation induced by wages.

2. Reich points out that there is no evidence of wage inflation. Quite the contrary. Workers have been pounded by Covid and aggressive union busting, and price gouging, and soaring health care costs and student debt. They haven’t caught up. He doesn’t say it, but the top quartile did pretty well, and the richer and richer the people, the better off they are.

3. Corporations have rigged the structure of the market so that workers are screwed. The government did little to help. Can you imagine Congress stepping in to help workers? They can’t even raise the minimum wage. How long will people endure this mistreatment?

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* Here is the methodology. The number is a ratio, with all wages and salaries and owner’s labor compensation in the numerator, and what I consider gross domestic product as the denominator, all measured in constant dollars.

** Here is the definition.

Profits from current production, referred to as corporate profits with inventory value adjustment (IVA) and capital consumption adjustment (CCAdj) in the National Income and Product Accounts (NIPA), is a measure of net income companies before deduction of income tax which is consistent with the value of goods and services measured in GDP. The IVA and CCAdj are adjustments that convert inventory withdrawals and fixed asset depreciation reported on the basis of tax returns and historical cost to economic measures at current cost used in the National Income and Product Accounts . The profits of domestic industries reflect the profits of all companies located within the geographic boundaries of the United States. The rest of the world (ROW) component of earnings is measured as the difference between earnings received from ROW and earnings paid to ROW.

***David Dayen, editor of The American Prospect, has produced a terrific series explaining the supply chain breakdown. Hint: It’s not Biden’s fault.

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