Republica Press

Your Business & Political News Source

REPUBLICA PRESS
Your Business & Political News Source

MONEY

Former Trump Official Says Chinese Scientists ‘Systemically Silenced’ By Gov’t—Here’s What He’s Talking About

by

More From Forbes

Rep. McCaul Calls Covid-19 Origins ‘Worst Coverup In Human History'”,”scope”:{“topStory”:{“title”:”Rep. McCaul Calls Covid-19 Origins ‘Worst Coverup In Human History'”,”uri”:”https://www.forbes.com/sites/jonathanponciano/2021/05/30/rep-mccaul-calls-covid-19-origins-worst-coverup-in-human-history-wuhan-lab-leak-theory/”,”date”:{“monthDayYear”:”May 30, 2021″,”hourMinute”:”11:34″,”amPm”:”am”,”isEDT”:true},”index”:1}},”id”:”2ldd3diaolk000″},{“textContent”:”

How To Make A Long-Term Financial Plan”,”scope”:{“topStory”:{“title”:”How To Make A Long-Term Financial Plan”,”uri”:”https://www.forbes.com/sites/lawrencelight/2021/05/30/how-to-make-a-long-term-financial-plan/”,”date”:{“monthDayYear”:”May 30, 2021″,”hourMinute”:”09:00″,”amPm”:”am”,”isEDT”:true},”index”:2}},”id”:”eqei0elm9kd400″},{“textContent”:”

What Everyone Should Know About BlackRock’s New Fund”,”scope”:{“topStory”:{“title”:”What Everyone Should Know About BlackRock’s New Fund”,”uri”:”https://www.forbes.com/sites/michaelfoster/2021/05/29/what-everyone-should-know-about-blackrocks-new-fund/”,”date”:{“monthDayYear”:”May 29, 2021″,”hourMinute”:”07:10″,”amPm”:”am”,”isEDT”:true},”index”:3}},”id”:”d70l2pegg69400″},{“textContent”:”

When Investing Experts Make A Wrong Call”,”scope”:{“topStory”:{“title”:”When Investing Experts Make A Wrong Call”,”uri”:”https://www.forbes.com/sites/lawrencelight/2021/05/28/when-investing-experts-make-a-wrong-call/”,”date”:{“monthDayYear”:”May 28, 2021″,”hourMinute”:”07:08″,”amPm”:”pm”,”isEDT”:true},”index”:4}},”id”:”dm50475jn7k000″},{“textContent”:”

Revenge Shopping: What’s In Store For The U.S.?”,”scope”:{“topStory”:{“title”:”Revenge Shopping: What’s In Store For The U.S.?”,”uri”:”https://www.forbes.com/sites/gregpetro/2021/05/28/revenge-shopping-whats-in-store-for-the-us/”,”date”:{“monthDayYear”:”May 28, 2021″,”hourMinute”:”02:32″,”amPm”:”pm”,”isEDT”:true},”index”:5}},”id”:”boe2calldg2800″},{“textContent”:”

Separating Winners From Losers: Low Price-To-Book Stocks”,”scope”:{“topStory”:{“title”:”Separating Winners From Losers: Low Price-To-Book Stocks”,”uri”:”https://www.forbes.com/sites/investor/2021/05/28/separating-winners-from-losers-low-price-to-book-stocks/”,”date”:{“monthDayYear”:”May 28, 2021″,”hourMinute”:”11:45″,”amPm”:”am”,”isEDT”:true},”index”:6}},”id”:”9h5ril3i56i800″},{“textContent”:”

Meituan Reports Q1 Topline Growth At A Price, Week In Review”,”scope”:{“topStory”:{“title”:”Meituan Reports Q1 Topline Growth At A Price, Week In Review”,”uri”:”https://www.forbes.com/sites/brendanahern/2021/05/28/meituan-reports-q1-topline-growth-at-a-price-week-in-review/”,”date”:{“monthDayYear”:”May 28, 2021″,”hourMinute”:”11:45″,”amPm”:”am”,”isEDT”:true},”index”:7}},”id”:”7dof7nrcleqo00″}],”breakpoints”:[{“breakpoint”:”@media all and (max-width: 767px)”,”config”:{“enabled”:false}},{“breakpoint”:”@media all and (max-width: 768px)”,”config”:{“inView”:2,”slidesToScroll”:1}},{“breakpoint”:”@media all and (min-width: 1681px)”,”config”:{“inView”:6}}]};

View Source

>>> Don’t Miss Today’s BEST Amazon Deals! <<<<

Google Cofounder Sergey Brin Just Sold Alphabet Shares For The First Time Since 2017

by

More From Forbes

BTS’s RM Breaks His Tie With Psy And Blackpink’s Rosé With Another Hit On Billboard’s Sales Chart”,”scope”:{“topStory”:{“title”:”BTS’s RM Breaks His Tie With Psy And Blackpink’s Rosé With Another Hit On Billboard’s Sales Chart”,”uri”:”https://www.forbes.com/sites/hughmcintyre/2021/05/10/btss-rm-breaks-his-tie-with-psy-and-blackpinks-ros-with-another-hit-on-billboards-sales-chart/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”07:10″,”amPm”:”pm”,”isEDT”:true},”index”:1}},”id”:”34bie590gqm000″},{“textContent”:”

Accused Murderer And His Escaped Tiger Run From Police In Houston”,”scope”:{“topStory”:{“title”:”Accused Murderer And His Escaped Tiger Run From Police In Houston”,”uri”:”https://www.forbes.com/sites/nicholasreimann/2021/05/10/accused-murderer-and-his-escaped-tiger-on-the-run-from-police-in-houston/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”06:48″,”amPm”:”pm”,”isEDT”:true},”index”:2}},”id”:”7lc89jpp545c00″},{“textContent”:”

Jeffrey Epstein Received Special Peks And Treatment In Jail, But Authorities Broke No Laws, Investigation Finds”,”scope”:{“topStory”:{“title”:”Jeffrey Epstein Received Special Peks And Treatment In Jail, But Authorities Broke No Laws, Investigation Finds”,”uri”:”https://www.forbes.com/sites/tommybeer/2021/05/10/jeffrey-epstein-received-special-peks-and-treatment-in-jail-but-authorities-broke-no-laws-investigation-finds/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”06:43″,”amPm”:”pm”,”isEDT”:true},”index”:3}},”id”:”d8lmp8o9qaio0″},{“textContent”:”

The Best New Movies To Stream On Netflix, Amazon, Hulu, HBO And Disney+ This Week”,”scope”:{“topStory”:{“title”:”The Best New Movies To Stream On Netflix, Amazon, Hulu, HBO And Disney+ This Week”,”uri”:”https://www.forbes.com/sites/travisbean/2021/05/10/the-best-new-movies-to-stream-on-netflix-amazon-hulu-hbo-and-disney-this-week/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”06:35″,”amPm”:”pm”,”isEDT”:true},”index”:4}},”id”:”1r8mgd9e6ifq00″},{“textContent”:”

The Immediate Success Of Enhypen’s New Album Proves Their Immense Popularity In Korea”,”scope”:{“topStory”:{“title”:”The Immediate Success Of Enhypen’s New Album Proves Their Immense Popularity In Korea”,”uri”:”https://www.forbes.com/sites/hughmcintyre/2021/05/10/the-immediate-success-of-enhypens-new-album-proves-their-immense-popularity-in-korea/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”06:10″,”amPm”:”pm”,”isEDT”:true},”index”:5}},”id”:”931fjlbpi4p400″},{“textContent”:”

For The First Time, There Are No U.S. Men Ranked In The Top 30 In The ATP Rankings”,”scope”:{“topStory”:{“title”:”For The First Time, There Are No U.S. Men Ranked In The Top 30 In The ATP Rankings”,”uri”:”https://www.forbes.com/sites/adamzagoria/2021/05/10/for-the-first-time-there-are-no-us-men-ranked-in-the-top-30-in-the-atp-rankings/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”06:06″,”amPm”:”pm”,”isEDT”:true},”index”:6}},”id”:”344008npdflc00″},{“textContent”:”

Iranian Boats Just Made A Run At An American Submarine—How Long Will The U.S. Navy Be Able To Defend Itself?”,”scope”:{“topStory”:{“title”:”Iranian Boats Just Made A Run At An American Submarine—How Long Will The U.S. Navy Be Able To Defend Itself?”,”uri”:”https://www.forbes.com/sites/davidaxe/2021/05/10/iranian-boats-just-made-a-run-at-an-american-submarine-how-long-will-the-us-navy-be-able-to-defend-itself/”,”date”:{“monthDayYear”:”May 10, 2021″,”hourMinute”:”06:00″,”amPm”:”pm”,”isEDT”:true},”index”:7}},”id”:”842j34a4d7g000″}],”breakpoints”:[{“breakpoint”:”@media all and (max-width: 767px)”,”config”:{“enabled”:false}},{“breakpoint”:”@media all and (max-width: 768px)”,”config”:{“inView”:2,”slidesToScroll”:1}},{“breakpoint”:”@media all and (min-width: 1681px)”,”config”:{“inView”:6}}]};

View Source

“American Factory” Owner Fuyao Glass To Raise $550 Mln, Eyes Solar Market

by

More From Forbes

China Holds Promise For Global Businesses Despite Uneven Covid Recovery: Authors”,”scope”:{“topStory”:{“title”:”China Holds Promise For Global Businesses Despite Uneven Covid Recovery: Authors”,”uri”:”https://www.forbes.com/sites/russellflannery/2021/04/30/china-holds-promise-for-global-businesses-despite-uneven-covid-recovery–authors/”,”date”:{“monthDayYear”:”Apr 30, 2021″,”hourMinute”:”08:10″,”amPm”:”pm”,”isEDT”:true},”index”:1}},”id”:”b54i5bqo695k00″},{“textContent”:”

South Korea Is Doing It Again: Confounding The Skeptics”,”scope”:{“topStory”:{“title”:”South Korea Is Doing It Again: Confounding The Skeptics”,”uri”:”https://www.forbes.com/sites/williampesek/2021/04/30/south-korea-is-doing-it-again-confounding-the-skeptics/”,”date”:{“monthDayYear”:”Apr 30, 2021″,”hourMinute”:”08:50″,”amPm”:”am”,”isEDT”:true},”index”:2}},”id”:”4j4bb545dkik00″},{“textContent”:”

Indian Food Delivery Unicorn Zomato Files For $1.1 Billion IPO”,”scope”:{“topStory”:{“title”:”Indian Food Delivery Unicorn Zomato Files For $1.1 Billion IPO”,”uri”:”https://www.forbes.com/sites/zinnialee/2021/04/30/indias-food-delivery-unicorn-zomato-files-for-11-billion-ipo/”,”date”:{“monthDayYear”:”Apr 30, 2021″,”hourMinute”:”06:55″,”amPm”:”am”,”isEDT”:true},”index”:3}},”id”:”c77d6koh22og00″},{“textContent”:”

Singapore’s Olam To Buy U.S. Spice Maker For $950 Million Ahead Of Unit’s IPO”,”scope”:{“topStory”:{“title”:”Singapore’s Olam To Buy U.S. Spice Maker For $950 Million Ahead Of Unit’s IPO”,”uri”:”https://www.forbes.com/sites/jonathanburgos/2021/04/30/singapores-olam-to-buy-us-spice-maker-for-950-million-ahead-of-units-ipo/”,”date”:{“monthDayYear”:”Apr 30, 2021″,”hourMinute”:”04:10″,”amPm”:”am”,”isEDT”:true},”index”:4}},”id”:”edo3bn22lnp400″},{“textContent”:”

How China’s Digital Currency Could Fracture Global Finance”,”scope”:{“topStory”:{“title”:”How China’s Digital Currency Could Fracture Global Finance”,”uri”:”https://www.forbes.com/sites/alexcapri/2021/04/29/how-chinas-digital-currency-could-fracture-global-finance/”,”date”:{“monthDayYear”:”Apr 29, 2021″,”hourMinute”:”06:50″,”amPm”:”am”,”isEDT”:true},”index”:5}},”id”:”ek646h7hr7pk00″},{“textContent”:”

Del Monte Philippines Revives IPO Plans With $790 Million Share Sale”,”scope”:{“topStory”:{“title”:”Del Monte Philippines Revives IPO Plans With $790 Million Share Sale”,”uri”:”https://www.forbes.com/sites/jonathanburgos/2021/04/29/del-monte-philippines-revives-ipo-plans-with-790-million-share-sale/”,”date”:{“monthDayYear”:”Apr 29, 2021″,”hourMinute”:”04:40″,”amPm”:”am”,”isEDT”:true},”index”:6}},”id”:”ee43dn95r8o000″},{“textContent”:”

Blame Olympic Record Price Tag For Return To Deflation Battle Stations”,”scope”:{“topStory”:{“title”:”Blame Olympic Record Price Tag For Return To Deflation Battle Stations”,”uri”:”https://www.forbes.com/sites/williampesek/2021/04/29/blame-olympic-record-price-tag-for-return-to-deflation-battle-stations/”,”date”:{“monthDayYear”:”Apr 29, 2021″,”hourMinute”:”03:50″,”amPm”:”am”,”isEDT”:true},”index”:7}},”id”:”8bk0bhd14e0g00″}],”breakpoints”:[{“breakpoint”:”@media all and (max-width: 767px)”,”config”:{“enabled”:false}},{“breakpoint”:”@media all and (max-width: 768px)”,”config”:{“inView”:2,”slidesToScroll”:1}},{“breakpoint”:”@media all and (min-width: 1681px)”,”config”:{“inView”:6}}]};

View Source

How Market Disincentives Are Again Squeezing The Texas Power Grid

by


Two months after the Texas power grid froze up during a historic deep freeze, two months after legislative hearings and firings and finger pointings, on a mild day in mid April, the Electric Reliability Council of Texas, of ERCOT, again sounded alarms last week that electricity was in tight supply. How can this happen?

ERCOT’s excuses rang hollow and included an uncooperative cold front that increased power demand more than anticipated, and the fact that a quarter of power plants were unavailable because of maintenance ahead of the summer heat. 

ERCOT’s solution to the risk of outtages was to temporarily jack up the prices generators could charge, in hopes that they would send more electrons onto the grid. The first screen shot below show the price boost, to $2,000 per megawatt hour ($2 per kilowatt hour), at 5:25 pm. Again, there were no blackouts at this time, and electricity demand did not outstrip supply.

ERCOT justifies this high transient price on the basis that high prices will incentivize power generators to invest in new plants, or at least crank up the ones they already own. But a funny thing happened when prices hit $2,000 the other day — there was no supply response. More power did not arrive on the market. Indeed, it takes years to build new generators. Mere hours or even a week of price gouging consumers are not enough to encourage new investment.

MORE FOR YOU

Maybe that’s because generators appreciate the huge Catch-22 in effect here. Higher prices should bring more generation into the market. But when it does, the extra capacity will end up driving down the price. If anything, there is a massive financial incentive for generation companies to withhold generation.

This isn’t mere conjecture. It has happened before in Texas when GDF Suez gamed in 2013. Did it happen on April 13?

We can’t yet say. There can be many manifestations of collusion. Generator companies can signal each other in the market what they intend to do. “Joe” plans to run today, but “Sally” is off. “Deidre” will be off Tuesday, but “Bob” will run. “Rick” will not fire up for the weekend, so that “Louis” wins in the futures markets. If bridge games can be rigged with codes and signals, electricity markets can be rigged.

Suppose the ERCOT market was forced into corner on April 13.  It may have been done by generation companies deliberately holding back power to drive the price up. Those units running at the height of the crisis could book great profits. Under this hypothetical scenario, perhaps some participants bought futures on the commodities exchanges to profit from the planned withholding. This practice is called cross market manipulation, and it is prohibited under federal laws. 

How would we look for it? For Tuesday, April 13, ERCOT published a list of generation plants that were available to produce electricity. Under ERCOT’s Orwellian doublespeak, it is called the RUC list, for Reliability Unit Commitment. These are units (i.e. power plants) that were available for this event, but, irrationally, their owners had decided to forgo the profits of turning the plants on, perhaps in order to profit elsewhere from either futures contracts, or real-time or day-head ERCOT price and dispatch signals. So ERCOT had to order them online for RUC for capacity. 

Generators have in the past lobbied and won the stipulation that when their plants are ordered on-line for RUC capacity that they receive the highest price available, i.e. the price cap. So a generator that gets RUC’ed online for capacity receives $2,000 per megawatt hour instead of, let’s say, the $35 per megawatt hour it actually costs to run these plants.

This sets up misincentives, like the kind of electric power short squeeze that Enron’s traders could have only dreamt of two decades ago. This about it: if a power producer operates a lot of plants, and knows he can drive the price up to $2,000 per mwh by keeping a few of them offline on a mild April afternoon and triggering the price cap, he’s incentivized to do so.

Among the losers in this scenario — first are the average Texans who would prefer not to overpay for power, and who want nothing more than for the lights to go on when they flip the switch. Second are the small, struggling retail power providers who are already on the brink of financial disaster from February. Third are the regulators like the Public Utilities Commission and the Independent Market Monitor who have lost the respect of market participants for failing to enact common sense oversight.

ERCOT’s data shows that the number of power plants deliberately staying offline on April 13 after their their warnings would have been plenty to ease the supply shortage and keep the price down.  

Texas grid regulators owe it to the state to determine whether any of these market participants had ulterior motives that informed their decisions to keep power offline. A quick inquiry into whether market manipulation occurred would investigate whether any parties trading on commodities exchanges had prior knowledge of the operation of these listed generators in much the same way that the Securities and Exchange Commission finds insider trading. 

The SEC, the Commodities Futures Trading Commission, the FBI, the U.S. Department of Justice, local district attorneys and the Texas Rangers could clear the air quickly. State investigations may actually drive those with knowledge of wrongdoing to speak. Why? There is no white collar wing in the Texas prison system.

The game of withholding power to drive up prices is not new to Texas nor to other markets. Enron taught California the lesson in 2000-2001. It is a taught in MBA programs. It is the outcome predicted by John Nash in his Nobel work “Non-Cooperative Games.”  

But there’s more. As the green ERCOT map below shows, at 6:05 PM, the crisis had passed. Statewide, the market was clearing at less than $100 per megawatt hour, and the market was in balance. But ERCOT applied something they call “Real-Time Price Adders” — boosting power prices by hundreds of dollars per MWH in some areas. But why? The generators were already by then producing enough electricity at the lower price. This is just like the lumber store continuing to price gouge homeowners for batteries and plywood even after a hurricane heads out to sea and evaporates.

Even before last week’s hijinx, Texans have paid $28 billion more for power this year than they would have under an old fashioned regulated market. Don’t expect them to stand for it.

View Source

U.S. Corporates Continue To Gorge At The Debt Trough

by

More From Forbes

Look For Hidden Investment Gems In The Gloom And Doom About Latin America”,”scope”:{“topStory”:{“title”:”Look For Hidden Investment Gems In The Gloom And Doom About Latin America”,”uri”:”https://www.forbes.com/sites/mayrarodriguezvalladares/2021/04/09/look-for-hidden-investment-gems-in-the-gloom-and-doom-about-latin-america/”,”date”:{“monthDayYear”:”Apr 9, 2021″,”hourMinute”:”01:32″,”amPm”:”pm”,”isEDT”:true},”index”:1}},”id”:”db7ec903lk5800″},{“textContent”:”

Climate Change Is A Key Priority To The G20 And Financial Stability Board”,”scope”:{“topStory”:{“title”:”Climate Change Is A Key Priority To The G20 And Financial Stability Board”,”uri”:”https://www.forbes.com/sites/mayrarodriguezvalladares/2021/04/06/climate-change-is-a-key-priority-to-the-g20-and-financial-stability-board/”,”date”:{“monthDayYear”:”Apr 6, 2021″,”hourMinute”:”04:00″,”amPm”:”am”,”isEDT”:true},”index”:2}},”id”:”8416nnlgkh6o00″},{“textContent”:”

Banks Should Implement Principles For Operational Resilience”,”scope”:{“topStory”:{“title”:”Banks Should Implement Principles For Operational Resilience”,”uri”:”https://www.forbes.com/sites/mayrarodriguezvalladares/2021/04/03/banks-should-implement-principles-for-operational-resilience/”,”date”:{“monthDayYear”:”Apr 3, 2021″,”hourMinute”:”07:35″,”amPm”:”pm”,”isEDT”:true},”index”:3}},”id”:”a5of9f5979p800″},{“textContent”:”

Important Gaps Remain In Too Big To Fail Bank Reforms”,”scope”:{“topStory”:{“title”:”Important Gaps Remain In Too Big To Fail Bank Reforms”,”uri”:”https://www.forbes.com/sites/mayrarodriguezvalladares/2021/04/01/important-gaps-remain-in-too-big-to-fail-bank-reforms/”,”date”:{“monthDayYear”:”Apr 1, 2021″,”hourMinute”:”01:01″,”amPm”:”pm”,”isEDT”:true},”index”:4}},”id”:”b02bf7d3bg9k00″},{“textContent”:”

Amid Industry Sea Changes, What’s Next For Regulation In Financial Services?”,”scope”:{“topStory”:{“title”:”Amid Industry Sea Changes, What’s Next For Regulation In Financial Services?”,”uri”:”https://www.forbes.com/sites/franksorrentino/2021/03/22/amid-industry-sea-changes-whats-next-for-regulation-in-financial-services/”,”date”:{“monthDayYear”:”Mar 22, 2021″,”hourMinute”:”10:36″,”amPm”:”am”,”isEDT”:true},”index”:5}},”id”:”4an1jqir886o00″},{“textContent”:”

Progress From The Pandemic: Remote Work Improves Organizational Resilience”,”scope”:{“topStory”:{“title”:”Progress From The Pandemic: Remote Work Improves Organizational Resilience”,”uri”:”https://www.forbes.com/sites/louisgritzo/2021/03/18/progress-from-the-pandemic-remote-work-improves-organizational-resilience/”,”date”:{“monthDayYear”:”Mar 18, 2021″,”hourMinute”:”11:17″,”amPm”:”am”,”isEDT”:true},”index”:6}},”id”:”1rnmqfjib6pi00″},{“textContent”:”

How An Innovative Partnership Between Dow And Lucro, An Indian Recycling Start-Up, May Provide The Blueprint For Solving Our Biggest Climate Challenges On A Global Scale”,”scope”:{“topStory”:{“title”:”How An Innovative Partnership Between Dow And Lucro, An Indian Recycling Start-Up, May Provide The Blueprint For Solving Our Biggest Climate Challenges On A Global Scale”,”uri”:”https://www.forbes.com/sites/robkaplan/2021/03/17/how-an-innovative-partnership-between-dow-and-lucro-an-indian-recycling-start-up-may-provide-the-blueprint-for-solving-our-biggest-climate-challenges-on-a-global-scale/”,”date”:{“monthDayYear”:”Mar 17, 2021″,”hourMinute”:”02:57″,”amPm”:”pm”,”isEDT”:true},”index”:7}},”id”:”bjneni0n1a7c00″}],”breakpoints”:[{“breakpoint”:”@media all and (max-width: 767px)”,”config”:{“enabled”:false}},{“breakpoint”:”@media all and (max-width: 768px)”,”config”:{“inView”:2,”slidesToScroll”:1}},{“breakpoint”:”@media all and (min-width: 1681px)”,”config”:{“inView”:6}}]};

View Source

Four Wealth Tax Flaws That Will Do More Harm Than Good

by

Senator Elizabeth Warren, along with Senator Bernie Sanders, just unveiled her latest version of a wealth tax. The idea has superficial appeal—the rich can easily afford a tax of 2%-3% a year on their wealth!

But, as this segment of What’s Ahead explains, the Warren wealth tax would end up harming just about everyone, except, of course, the political class. 

It would be a chilling invasion of privacy, as the exaction applies to literally everything you own, including retirement assets. The IRS would have the right to examine your home to make sure you’re not hiding anything, especially items like jewelry.

No wonder Warren’s bill calls for a massive expansion of the IRS.

The tax would be an administrative nightmare precisely because it involves putting a value each year on all of your property, including artwork, photographs, jewelry, furniture and even your household pets. The whole exercise guarantees endless litigation.

Advocates like Warren have the cartoonish image that the rich sit on mountains of cash, whereas most wealth consists of such assets as a house, a business or shares of stock. To pay such a tax each year would mean a forced sale, which would depress prices.

With the Warren tax, Washington politicians would siphon off almost $4 trillion in investment capital over the next decade, seriously hurting economic growth.

Follow me on Twitter. Send me a secure tip. 
Steve Forbes

Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. Steve’s newest project is the podcast “What’s Ahead,” where he engages the world’s top newsmakers,

…

Steve Forbes is Chairman and Editor-in-Chief of Forbes Media. Steve’s newest project is the podcast “What’s Ahead,” where he engages the world’s top newsmakers, politicians and pioneers in business and economics in honest conversations meant to challenge traditional conventions as well as featuring Steve’s signature views on the intersection of society, economic and policy. Steve helped create the recently released and highly acclaimed public television documentary, In Money We Trust?, which was produced under the auspices of Maryland Public television. The film was inspired by the book he co-authored, Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It. Steve’s latest book is Reviving America: How Repealing Obamacare, Replacing the Tax Code and Reforming The Fed will Restore Hope and Prosperity co-authored by Elizabeth Ames (McGraw-Hill Professional). Steve writes editorials for each issue of Forbes under the heading of “Fact and Comment.” A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. The prize was formerly given by U.S. Steel Corporation to the financial journalist whose economic forecasts for the coming year proved most accurate. In both 1996 and 2000, Steve campaigned vigorously for the Republican nomination for the Presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits and a strong national defense. Steve continues to energetically promote this agenda.

View Source

Bitcoin and Robinhood will end badly for those who can least afford it

by

The US economy’s K-shaped recovery is under way. Those with stable full-time jobs, benefits, and a financial cushion are faring well as stock markets climb to new highs. Those who are unemployed or partially employed in low-value-added blue-collar and service jobs – the new “precariat” – are saddled with debt, have little financial wealth, and face diminishing economic prospects.

These trends indicate a growing disconnect between Wall Street and Main Street. The new stock market highs mean nothing to most people. The bottom 50% of the wealth distribution holds just 0.7% of total equity market assets, whereas the top 10% commands 87.2%, and the top 1% holds 51.8%. The 50 richest people have as much wealth as the 165 million people at the bottom.

Rising inequality has followed the ascent of “big tech”. As many as three retail jobs are lost for every job that Amazon creates, and similar dynamics hold true in other sectors dominated by tech giants. But today’s social and economic stresses are not new. For decades, strapped workers have not been able to keep up with the Joneses, owing to the stagnation of real (inflation-adjusted) median income alongside rising costs of living and spending expectations.

For decades, the “solution” to this problem was to “democratise” finance so that poor and struggling households could borrow more to buy homes they couldn’t afford, and then use those homes as cash machines. This expansion of consumer credit – mortgages and other debt – resulted in a bubble that ended with the 2008 financial crisis, when millions lost their jobs, homes, and savings.

Now, the same millennials who were shafted over a decade ago are being duped again. Workers who rely on gig, part-time, or freelance “employment” are being offered a new rope with which to hang themselves in the name of “financial democratization.” Millions have opened accounts on Robinhood and other investment apps, where they can leverage their scant savings and incomes several times over to speculate on worthless stocks.

The recent GameStop narrative, featuring a united front of heroic small day traders fighting evil short-selling hedge funds, masks the ugly reality that a cohort of hopeless, jobless, skill-less, debt-burdened individuals is being exploited once again. Many have been convinced that financial success lies not in good jobs, hard work, and patient saving and investment, but in get-rich-quick schemes and wagers on inherently worthless assets such as cryptocurrencies (or “shitcoins” as I prefer to call them).

Make no mistake: The populist meme in which an army of millennial Davids takes down a Wall Street Goliath is merely serving another scheme to fleece clueless amateur investors. As in 2008, the inevitable result will be another asset bubble. The difference is that this time, recklessly populist members of Congress have taken to inveighing against financial intermediaries for not permitting the vulnerable to leverage themselves even more.

Making matters worse, markets are starting to worry about the massive experiment in budget-deficit monetisation being carried out by the US Federal Reserve and Department of the Treasury through quantitative easing (a form of Modern Monetary Theory or “helicopter money”). A growing chorus of critics warns that this approach could overheat the economy, forcing the Fed to hike interest rates sooner than expected. Nominal and real bond yields are already rising, and this has shaken risky assets such as equities. Owing to these concerns about a Fed-led taper tantrum, a recovery that was supposed to be good for markets is now giving way to a market correction.

Meanwhile, congressional Democrats are moving ahead with a $1.9tn rescue package that will include additional direct support to households. But with millions already in arrears on rent and utilities payments or in moratoria on their mortgages, credit cards, and other loans, a significant share of these disbursements will go toward debt repayment and saving, with only around one-third of the stimulus likely to be translated into actual spending.

This implies that the package’s effects on growth, inflation, and bond yields will be smaller than expected. And because the additional savings will end up being funneled back into purchases of government bonds, what was meant to be a bailout for strapped households will in effect become a bailout for banks and other lenders.

To be sure, inflation may eventually still emerge if the effects of monetized fiscal deficits combine with negative supply shocks to produce stagflation. The risk of such shocks has risen as a result of the new Sino-American cold war, which threatens to trigger a process of deglobalization and economic Balkanisation as countries pursue renewed protectionism and the re-shoring of investments and manufacturing operations. But this is a story for the medium term, not for 2021.

When it comes to this year, growth may yet fall short of expectations. New strains of the coronavirus continue to emerge, raising concerns that existing vaccines may no longer be sufficient to end the pandemic. Repeated stop-go cycles undermine confidence, and political pressure to reopen the economy before the virus is contained will continue to build. Many small- and medium-size enterprises are still at risk of going bust, and far too many people are facing the prospects of long-term unemployment. The list of pathologies afflicting the economy is long and includes rising inequality, deleveraging by debt-burdened firms and workers, and political and geopolitical risks.

Asset markets remain frothy – if not outright bubbly – because they are being fed by super-accommodative monetary policies. But today’s price/earnings ratios are as high they were in the bubbles preceding the busts of 1929 and 2000. Between ever-rising leverage and the potential for bubbles in special-purpose acquisition companies, tech stocks, and cryptocurrencies, today’s market mania offers plenty of cause for concern.

Under these conditions, the Fed is probably worried that markets will instantly crash if it takes away the punch bowl. And with the increase in public and private debt preventing the eventual monetary normalization, the likelihood of stagflation in the medium term – and a hard landing for asset markets and economies – continues to increase.

Nouriel Roubini is professor of economics at New York University’s Stern School of Business. He has worked for the IMF, the US Federal Reserve and the World Bank.

© Project Syndicate

View Source

SoftBank and Toyota want driverless cars to change the world

by

Meet 'crazy' tech tycoon Masayoshi Son

SoftBank and Toyota want to change the world of transportation through autonomous vehicles and other technologies.

The high-profile Japanese companies are forming a joint venture called Monet to develop businesses that will use driverless-car technology to offer new services, such as mobile convenience stores and delivery vehicles in which food is prepared en route.

SoftBank (SFTBF) will own just over half of Monet, while Toyota (TM) will hold the rest.

The new company’s name isn’t a reference to Claude Monet, the famous French painter, but rather a shortened version of the words “mobility network.”

Toyota President Akio Toyoda and SoftBank CEO Masayoshi Son attended the announcement of the project Thursday in Tokyo, a rare joint appearance by the heads of two of Japan’s biggest global companies.

01 Toyota Softbank 1004 RESTRICTED
SoftBank CEO Masayoshi Son and Toyota President Akio Toyoda in Tokyo on Thursday.

Toyota first approached SoftBank with the idea of creating a Japanese alliance to try to catch up with global rivals that are developing autonomous driving tech.

Around the world, top carmakers and tech companies like Google’s parent, Alphabet (GOOGL), and China’s Baidu (BIDU) are pouring resources into self-driving vehicles.

Driverless vehicles have the potential to cause huge disruption in the auto industry and are also likely to transform the ride-hailing business.

Son, SoftBank’s billionaire founder, presides over a sprawling empire of artificial intelligence companies, internet businesses and ride-hailing startups, which can collect huge amounts of data on traffic patterns, passengers’ requests and other transportation trends.

The new venture taps into SoftBank’s advantages in tech and data, and Toyota’s vehicle-manufacturing expertise. Its aims include developing ways to tackle problems created by Japan’s rapidly aging society and shrinking workforce.

Over the next decade, Monet plans to roll out services like self-driving buses that can drive the elderly to grocery stores, hospital shuttles where medical exams can be done on board, and mobile offices. It will focus initially on Japan with a view to expanding globally.

SoftBank has already put money into autonomous driving. Its $100 billion tech-focused Vision Fund committed $2.3 billion to General Motors’ self-driving car unit GM Cruise earlier this year.

On Wednesday, another top Japanese company, Honda (HMC), said it would also invest $2.8 billion in GM Cruise.

Toyota has started pumping resources into driverless cars.

It set up a new company in March dedicated to the research and development of self-driving vehicles, with plans to invest $2.8 billion to develop a commercially viable autonomous car.

Both SoftBank and Toyota have invested in or partnered with some of the world’s biggest ride-hailing startups including Uber, China’s Didi Chuxing and Singapore-based Grab.

The new SoftBank-Toyota venture shows how relations between automakers and tech companies have shifted.

Twenty years ago, Son approached Toyota with the idea of connecting the company’s Japanese dealerships on the internet. But Toyoda turned him down.

Back then, Son said, SoftBank was a small company reaching out to the “giant rock” of Toyota. Today, it’s the carmaker that’s asking him for help.

— CNN’s Yoko Wakatsuki contributed to this report.

CNNMoney (Hong Kong) First published October 4, 2018: 1:32 AM ET

View Source

SoftBank and Toyota want driverless cars to change the world

by

Meet 'crazy' tech tycoon Masayoshi Son

SoftBank and Toyota want to change the world of transportation through autonomous vehicles and other technologies.

The high-profile Japanese companies are forming a joint venture called Monet to develop businesses that will use driverless-car technology to offer new services, such as mobile convenience stores and delivery vehicles in which food is prepared en route.

SoftBank (SFTBF) will own just over half of Monet, while Toyota (TM) will hold the rest.

The new company’s name isn’t a reference to Claude Monet, the famous French painter, but rather a shortened version of the words “mobility network.”

Toyota President Akio Toyoda and SoftBank CEO Masayoshi Son attended the announcement of the project Thursday in Tokyo, a rare joint appearance by the heads of two of Japan’s biggest global companies.

01 Toyota Softbank 1004 RESTRICTED
SoftBank CEO Masayoshi Son and Toyota President Akio Toyoda in Tokyo on Thursday.

Toyota first approached SoftBank with the idea of creating a Japanese alliance to try to catch up with global rivals that are developing autonomous driving tech.

Around the world, top carmakers and tech companies like Google’s parent, Alphabet (GOOGL), and China’s Baidu (BIDU) are pouring resources into self-driving vehicles.

Driverless vehicles have the potential to cause huge disruption in the auto industry and are also likely to transform the ride-hailing business.

Son, SoftBank’s billionaire founder, presides over a sprawling empire of artificial intelligence companies, internet businesses and ride-hailing startups, which can collect huge amounts of data on traffic patterns, passengers’ requests and other transportation trends.

The new venture taps into SoftBank’s advantages in tech and data, and Toyota’s vehicle-manufacturing expertise. Its aims include developing ways to tackle problems created by Japan’s rapidly aging society and shrinking workforce.

Over the next decade, Monet plans to roll out services like self-driving buses that can drive the elderly to grocery stores, hospital shuttles where medical exams can be done on board, and mobile offices. It will focus initially on Japan with a view to expanding globally.

SoftBank has already put money into autonomous driving. Its $100 billion tech-focused Vision Fund committed $2.3 billion to General Motors’ self-driving car unit GM Cruise earlier this year.

On Wednesday, another top Japanese company, Honda (HMC), said it would also invest $2.8 billion in GM Cruise.

Toyota has started pumping resources into driverless cars.

It set up a new company in March dedicated to the research and development of self-driving vehicles, with plans to invest $2.8 billion to develop a commercially viable autonomous car.

Both SoftBank and Toyota have invested in or partnered with some of the world’s biggest ride-hailing startups including Uber, China’s Didi Chuxing and Singapore-based Grab.

The new SoftBank-Toyota venture shows how relations between automakers and tech companies have shifted.

Twenty years ago, Son approached Toyota with the idea of connecting the company’s Japanese dealerships on the internet. But Toyoda turned him down.

Back then, Son said, SoftBank was a small company reaching out to the “giant rock” of Toyota. Today, it’s the carmaker that’s asking him for help.

— CNN’s Yoko Wakatsuki contributed to this report.

CNNMoney (Hong Kong) First published October 4, 2018: 1:32 AM ET

View Source

7 things to know before the bell

by

premarket thursday
Click chart for more in-depth data.

1. The race to driverless cars: SoftBank (SFTBF) and Toyota (TM) are forming a joint venture that will use driverless-car technology to offer new services, such as mobile convenience stores and delivery vehicles in which food is prepared en route.

SoftBank will own just over half of Monet, the new business, while Toyota will hold the rest.

It’s the latest in a series of driverless development partnerships announced by tech companies and carmakers. SoftBank’s $100 billion Vision Fund, its tech-focused investment arm, had already committed $2.3 billion to General Motors’ self-driving car unit GM Cruise.

On Wednesday, Honda (HMC) and General Motors (GM) said they were teaming up to create a new generation of fully autonomous vehicles. BMW (BMWYY) has joined the board of Apollo, an autonomous driving project from Chinese internet firm Baidu (BIDU).

2. Facebook under investigation: The Irish Data Protection Commission has launched a formal probe into a Facebook (FB) hack that affected as many as 50 million accounts.

The commission will investigate whether the company complied with its obligations under new European data protection laws that came into effect in May. Facebook said last week that it closed the loophole, but 90 million users were forcefully logged out of their accounts as a precaution.

Irish regulators are investigating because Facebook’s international headquarters is in Dublin.

There are still many unanswered questions about the hack: Who carried it out? And what were they trying to access?

3. Bonds sell-off: The yield on 10-year US Treasuries has spiked to the highest level in seven years following the release of positive economic data.

US hiring data published Wednesday was stronger than expected, and momentum could continue Thursday if initial claims numbers add to the optimism. A strong US economy and the expectation of rate hikes by the Federal Reserve are fueling the trend.

“The underlying message is that the US economy isn’t just in fine fettle, it’s on fire,” said Kit Juckes, strategist at Societe Generale.

4. CNN means business: On Thursday, CNNMoney becomes the all-new CNN Business, covering the companies, personalities, and innovations driving business forward.

This new initiative will focus on the single biggest financial story of our generation: how technology is upending every corner of the global economy, forcing businesses, workers, and society itself to adapt rapidly, or be left behind.

5. Global market overview: US stock futures were lower.

European markets dropped in early trade following a negative trading session in Asia. The Shanghai Composite was closed for a holiday.

The Dow Jones industrial average closed 0.2% higher on Wednesday, while the S&P 500 added 0.1% and the Nasdaq gained 0.3%.

Before the Bell newsletter: Key market news. In your inbox. Subscribe now!

6. Earnings and economics: Constellation Brands (STZ) will release earnings before the open. Costco (COST) is set to follow after the close.

Shares in Danske Bank (DNKEY) opened 3% lower after the Danish lender said it had received requests for information from the US Department of Justice in connection to its money laundering scandal.

Markets Now newsletter: Get a global markets snapshot in your inbox every afternoon. Sign up now!

7. Coming this week:
Thursday — Costco (COST) earnings; CNN Business launches
Friday — US jobs report

CNNMoney (London) First published October 4, 2018: 5:07 AM ET

View Source

Terms and Conditions - Privacy Policy