The challenges of making that happen, though, become clear when climbing the confined, 334-step stairwell that winds up to the belfry. Also evident: the quality of the renovation.

Bright morning light shone in through the four restored clock faces — perched high above the Houses of Parliament — each with 324 pieces of pot opal glass produced in Germany. Newly refurbished golden orbs that decorate the tower’s stonework glinted in the sun.

The sheer size of Big Ben, weighing a little over 15 tons, is impressive, as is the intricacy of a clock mechanism based on the most advanced technology available to its 19th-century creators. It still loses no more than a second in accuracy a week.

The Elizabeth Tower is not the first clock tower to watch over Parliament — that one is thought to date from around 1290. In 1834, a fire destroyed the Palace of Westminster, leading to the construction of the modern-day building that is one of the most famous examples of Gothic Revival architecture in the world.

And when the original clock tower was built, it was constructed with a rising scaffold, “so it rose as if by magic, it was noted at the time,” Mr. Watrobski said.

In May 1859, crowds lined the streets to greet Big Ben’s arrival. The enormous bell was pulled by 16 horses to Westminster, where it took 18 hours to haul it nearly 200 feet to the belfry before it could first ring out.

Back then, the clock tower was the most advanced and ambitious public building of its age, but by 2017, stonework was deteriorating, water was leaking into the belfry, and the steps, ironwork and guttering were all in need of repair. There was even still damage dating from 1941, when Parliament was bombed during World War II.

“Like all historic buildings, you don’t really know until you peel off the skin what you are going to find underneath,” Mr. Watrobski said. “There was a considerable amount of damage to cast iron and to stonework.”

The restoration work has gone a long way to modernizing the Elizabeth Tower, which will reopen this year to tourists. But the improvements will benefit visitors and maintenance staff alike.

An elevator has been installed, as has a restroom at the top — the lack of which previously meant Big Ben’s maintenance workers had to trek down the 334 steps whenever they were in need of one. There is even now a spot for the staff to make tea.

While Big Ben needs constant maintenance, the clock had never been fully serviced until this restoration. After it was dismantled, it was secreted away from London, more than 280 miles, to the workshop of the Cumbria Clock Company in northwestern England.

Given its symbolic importance, its whereabouts while being serviced was never disclosed.

To help keep the work under wraps, the Cumbria Clock Company removed signs from its building to make it harder for uninvited visitors to find. When a group of walkers once peered through a window and asked if they were looking at the famous clock, they were told that they were instead viewing one from Manchester Town Hall.

“It was very important that what we were doing was kept secret,” said the company’s director, Keith Scobie-Youngs, who was worried that it might attract thieves or vandals as well as curious tourists.

Mr. Scobie-Youngs said that the clock had been in remarkably good condition and that he had been awed by the skill of the 19th-century clockmakers.

“Nobody had ever attempted to build a clock that size to the accuracy demanded,” he said, adding, “I refer to it as being the smartphone of the 1850s.”

Mr. Scobie-Youngs also lauded Big Ben: “There is a unique sound to it,” he said. “It is that unique heartbeat.”

The bell’s bong, he said, was instantly recognizable to Britons. “When people were a long way from home, and it was on the radio, that unique sound brought people home again,” Mr. Scobie-Youngs said.

Freshly painted, finished with enough gold to cover four tennis courts, and complete with more than 7,000 replacement stones and carvings, the exterior of the Elizabeth Tower stands as a monument to what can be achieved by modern restoration, protecting it, hopefully, for the next 75 years.

Even for those who spent years on the project, the result was a pleasant surprise, said Charlotte Claughton, a senior project leader. She said that she was taken aback when the scaffolding came down and she saw the building shining, “as if it was new,” in the sunlight.

“It was hugely exciting to see it. There are a few moments that catch you off guard, and that was one of them,” Ms. Claughton said. “It was heartwarming.”

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Sun Valley Conference 2022: When Private Jets Land in Small-Town Idaho

HAILEY, Idaho — Robert Kraft, the owner of the New England Patriots, flies in a Gulfstream G650. So do Jeff Bezos and Dan Schulman, PayPal’s chief executive. The jets, roughly 470 of which are in operation, retail for about $75 million each.

Most days, those planes are spread out, ferrying captains of industry to meetings around the globe. But for one week in July, some of them converge on a single 100-foot-wide asphalt runway beside the jagged hills of Idaho’s Wood River Valley.

The occasion is the annual Sun Valley conference, a shoulder-rubbing bonanza organized by the secretive investment bank Allen & Company. Known as “summer camp for billionaires,” the conference kicks off this year on Tuesday, and it draws industry titans and their families — some of whom are watched over by local babysitters bound by nondisclosure agreements. In between organized hikes and fly-fishing at past gatherings, there have been sessions on creativity, climate change and immigration reform.

the ninth hole of the golf course, the head of General Electric expressed interest in selling NBC to Comcast. It is where Mr. Bezos met with the owner of The Washington Post before agreeing to buy the paper, and where Disney pursued a plan to purchase ABC — with Warren Buffett at the center of the discussions.

a year-round population of 1,800.

During a 24-hour period last year as the conference began, more than 300 flights passed through Friedman Memorial Airport in Hailey, a small town near Sun Valley, according to data from Flightradar24, an industry data firm. They ranged from tiny propeller planes to long-wing commercial jets. By comparison, two weeks ago, when Mr. Pomeroy gave me a brief tour of the airport, just 44 flights took off or landed there over 24 hours, according to the data firm.

“This is empty right now,” Mr. Pomeroy said, smoothly steering his white 2014 Ford Explorer (what he calls his “mobile command center”) past a swath of freshly paved asphalt. “But in the summer, and during the event in particular, there’s airplanes parked everywhere up here.”

Much like the activities of the conference, elements of the travel there are shrouded in secrecy. Many jets flying in are registered to obscure owners and limited liability companies, some with only winking references to their passengers. The jet that carried Mr. Kraft last year, for example, is registered under “Airkraft One Trust,” according to records from the Federal Aviation Administration. The plane that Mr. Bezos flew in on is registered to Poplar Glen, a Seattle firm.

Representatives for Mr. Kraft and Mr. Bezos declined to comment. Mr. Bezos is not expected to turn up at Sun Valley this year, according to an advance list of guests that was obtained by The New York Times.

Mr. Pomeroy plans well in advance to deal with the intense air traffic generated by the conference, which he refers to obliquely as “the annual fly-in event.” Without proper organization, flocks of private jets could stack up in the airspace around Friedman, creating delays and diversions while pilots burn precious fuel.

That was the case for the 2016 conference, which coincided with Mr. Pomeroy’s first week on the job. That year, some aircraft circled overhead or sat on the tarmac for more than an hour and a half, waiting for the airspace and runway to clear.

“I saw airplanes literally lined up to take off from the north end of the field almost all the way down to the south end of the field,” Mr. Pomeroy said, referring to the 7,550-foot runway. “Tail to nose, all the way up the taxiway.”

After that episode, Mr. Pomeroy enlisted Greg Dyer, a former district manager at the F.A.A., to help unclutter the tarmac. The two coordinated with an F.A.A. hub in Salt Lake City to line up flights, sometimes 300 to 500 miles outside Sun Valley. For some flights, the staging begins before the planes take off.

“Before, it looked like an attack — it was just airplanes coming from all points of the compass, all trying to get here at the same time,” said Mr. Dyer, an airport consultant for Jviation-Woolpert.

Last year, delays were kept to a maximum of 20 minutes, and no commercial travelers missed connecting flights because of air traffic caused by the conference, Mr. Pomeroy said.

When moguls are forced to circle in the air, they often loiter in great style. Buyers willing to shell out tens of millions for a high-end private plane are unlikely to balk at an additional $650,000 to outfit the aircraft with Wi-Fi, said Lee Mindel, one of the founders of SheltonMindel, an architectural firm that has designed the interiors of Gulfstream and Bombardier private jets. Some owners, he said, have opted for bespoke flatware from Muriel Grateau in Paris, V’Soske rugs or other luxe features.

“If you have to ask what it costs, you really can’t afford to do it,” Mr. Mindel said.

During the pandemic, when commercial travel slowed because of restrictions, corporate jaunts increased among a subset of executives who didn’t want to be held back, said David Yermack, a professor at New York University’s Stern School of Business. He added that it might be cheaper in the long run to compensate chief executives with jet travel than pay them with cash.

“I think it was Napoleon who said, ‘When I realized people would lay down their lives for little pieces of colored ribbon, I knew I could conquer the world,’” Mr. Yermack said.

The glut of flights certainly raises practical concerns. The residents of Hailey, as well as nearby Ketchum and Sun Valley, have complained in the past about the noise created by the jets zooming into Friedman Memorial Airport.

To deal with the complaints, Mr. Pomeroy and the Friedman Memorial Airport Authority curtailed flights between 11 p.m. and 7 a.m. and limited the number of takeoffs and landings from the north, over the little city of Hailey.

Before the conference, Mr. Pomeroy sends a letter to incoming pilots about what to expect, admonishing them to keep the noise to a minimum.

“While the overwhelming majority of users during this event are respectful of our program and community, only a few operators who blatantly disregard our program, or who are negligent in educating themselves about our program, leave a negative impression on all of us,” Mr. Pomeroy wrote this year.

Allen & Company’s stinginess about some conference details extends to the airport. But Mr. Pomeroy and his team get enough information to conclude when the moguls will arrive and are about to leave town.

When the schmoozing is over next week, Mr. Pomeroy will begin the arduous task of ushering the corporate titans out of Idaho. Often that means closing the airport briefly to arrivals while they hustle out departures for an hour.

As the last jets get ready to leave, Mr. Pomeroy said, he and his team breathe a sigh of relief.

“Afterward, I am ready to hit the river for some serious fly-fishing for a day or two,” he said.

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Why a Rhodes Scholar’s Ambition Led Her to a Job at Starbucks

Most weekend mornings, Jaz Brisack gets up around 5, wills her semiconscious body into a Toyota Prius and winds her way through Buffalo, to the Starbucks on Elmwood Avenue. After a supervisor unlocks the door, she clocks in, checks herself for Covid symptoms and helps get the store ready for customers.

“I’m almost always on bar if I open,” said Ms. Brisack, who has a thrift-store aesthetic and long reddish-brown hair that she parts down the middle. “I like steaming milk, pouring lattes.”

The Starbucks door is not the only one that has been opened for her. As a University of Mississippi senior in 2018, Ms. Brisack was one of 32 Americans who won Rhodes scholarships, which fund study in Oxford, England.

in public support for unions, which last year reached its highest point since the mid-1960s, and a growing consensus among center-left experts that rising union membership could move millions of workers into the middle class.

white-collar workers has coincided with a broader enthusiasm for the labor movement.

In talking with Ms. Brisack and her fellow Rhodes scholars, it became clear that the change had even reached that rarefied group. The American Rhodes scholars I encountered from a generation earlier typically said that, while at Oxford, they had been middle-of-the-road types who believed in a modest role for government. They did not spend much time thinking about unions as students, and what they did think was likely to be skeptical.

“I was a child of the 1980s and 1990s, steeped in the centrist politics of the era,” wrote Jake Sullivan, a 1998 Rhodes scholar who is President Biden’s national security adviser and was a top aide to Hillary Clinton.

By contrast, many of Ms. Brisack’s Rhodes classmates express reservations about the market-oriented policies of the ’80s and ’90s and strong support for unions. Several told me that they were enthusiastic about Senators Bernie Sanders and Elizabeth Warren, who made reviving the labor movement a priority of their 2020 presidential campaigns.

Even more so than other indicators, such a shift could foretell a comeback for unions, whose membership in the United States stands at its lowest percentage in roughly a century. That’s because the kinds of people who win prestigious scholarships are the kinds who later hold positions of power — who make decisions about whether to fight unions or negotiate with them, about whether the law should make it easier or harder for workers to organize.

As the recent union campaigns at companies like Starbucks, Amazon and Apple show, the terms of the fight are still largely set by corporate leaders. If these people are increasingly sympathetic to labor, then some of the key obstacles to unions may be dissolving.

suggested in April. The company has identified Ms. Brisack as one of these interlopers, noting that she draws a salary from Workers United. (Mr. Bonadonna said she was the only Starbucks employee on the union’s payroll.)

point out flaws — understaffing, insufficient training, low seniority pay, all of which they want to improve — they embrace Starbucks and its distinctive culture.

They talk up their sense of camaraderie and community — many count regular customers among their friends — and delight in their coffee expertise. On mornings when Ms. Brisack’s store isn’t busy, employees often hold tastings.

A Starbucks spokesman said that Mr. Schultz believes employees don’t need a union if they have faith in him and his motives, and the company has said that seniority-based pay increases will take effect this summer.

onetime auto plant. The National Labor Relations Board was counting ballots for an election at a Starbucks in Mesa, Ariz. — the first real test of whether the campaign was taking root nationally, and not just in a union stronghold like New York. The room was tense as the first results trickled in.

“Can you feel my heart beating?” Ms. Moore asked her colleagues.

win in a rout — the final count was 25 to 3. Everyone turned slightly punchy, as if they had all suddenly entered a dream world where unions were far more popular than they had ever imagined. One of the lawyers let out an expletive before musing, “Whoever organized down there …”

union campaign he was involved with at a nearby Nissan plant. It did not go well. The union accused the company of running a racially divisive campaign, and Ms. Brisack was disillusioned by the loss.

“Nissan never paid a consequence for what it did,” she said. (In response to charges of “scare tactics,” the company said at the time that it had sought to provide information to workers and clear up misperceptions.)

Mr. Dolan noticed that she was becoming jaded about mainstream politics. “There were times between her sophomore and junior year when I’d steer her toward something and she’d say, ‘Oh, they’re way too conservative.’ I’d send her a New York Times article and she’d say, ‘Neoliberalism is dead.’”

In England, where she arrived during the fall of 2019 at age 22, Ms. Brisack was a regular at a “solidarity” film club that screened movies about labor struggles worldwide, and wore a sweatshirt that featured a head shot of Karl Marx. She liberally reinterpreted the term “black tie” at an annual Rhodes dinner, wearing a black dress-coat over a black antifa T-shirt.

climate technology start-up, lamented that workers had too little leverage. “Labor unions may be the most effective way of implementing change going forward for a lot of people, including myself,” he told me. “I might find myself in labor organizing work.”

This is not what talking to Rhodes scholars used to sound like. At least not in my experience.

I was a Rhodes scholar in 1998, when centrist politicians like Bill Clinton and Tony Blair were ascendant, and before “neoliberalism” became such a dirty word. Though we were dimly aware of a time, decades earlier, when radicalism and pro-labor views were more common among American elites — and when, not coincidentally, the U.S. labor movement was much more powerful — those views were far less in evidence by the time I got to Oxford.

Some of my classmates were interested in issues like race and poverty, as they reminded me in interviews for this article. A few had nuanced views of labor — they had worked a blue-collar job, or had parents who belonged to a union, or had studied their Marx. Still, most of my classmates would have regarded people who talked at length about unions and class the way they would have regarded religious fundamentalists: probably earnest but slightly preachy, and clearly stuck in the past.

Kris Abrams, one of the few U.S. Rhodes Scholars in our cohort who thought a lot about the working class and labor organizing, told me recently that she felt isolated at Oxford, at least among other Americans. “Honestly, I didn’t feel like there was much room for discussion,” Ms. Abrams said.

typically minor and long in coming.

has issued complaints finding merit in such accusations. Yet the union continues to win elections — over 80 percent of the more than 175 votes in which the board has declared a winner. (Starbucks denies that it has broken the law, and a federal judge recently rejected a request to reinstate pro-union workers whom the labor board said Starbucks had forced out illegally.)

Twitter was: “We appreciate TIME magazine’s coverage of our union campaign. TIME should make sure they’re giving the same union rights and protections that we’re fighting for to the amazing journalists, photographers, and staff who make this coverage possible!”

The tweet reminded me of a story that Mr. Dolan, her scholarship adviser, had told about a reception that the University of Mississippi held in her honor in 2018. Ms. Brisack had just won a Truman scholarship, another prestigious award. She took the opportunity to urge the university’s chancellor to remove a Confederate monument from campus. The chancellor looked pained, according to several attendees.

“My boss was like, ‘Wow, you couldn’t have talked her out of doing that?’” Mr. Dolan said. “I was like, ‘That’s what made her win. If she wasn’t that person, you all wouldn’t have a Truman now.’”

(Mr. Dolan’s boss at the time did not recall this conversation, and the former chancellor did not recall any drama at the event.)

The challenge for Ms. Brisack and her colleagues is that while younger people, even younger elites, are increasingly pro-union, the shift has not yet reached many of the country’s most powerful leaders. Or, more to the point, the shift has not yet reached Mr. Schultz, the 68-year-old now in his third tour as Starbucks’s chief executive.

She recently spoke at an Aspen Institute panel on workers’ rights. She has even mused about using her Rhodes connections to make a personal appeal to Mr. Schultz, something that Mr. Bensinger has pooh-poohed but that other organizers believe she just may pull off.

“Richard has been making fun of me for thinking of asking one of the Rhodes people to broker a meeting with Howard Schultz,” Ms. Brisack said in February.

“I’m sure if you met Howard Schultz, he’d be like, ‘She’s so nice,’” responded Ms. Moore, her co-worker. “He’d be like, ‘I get it. I would want to be in a union with you, too.’”

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Europe’s central banks jack up interest rates to fight inflation surge

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  • SNB unexpectedly hikes by half a percent
  • Bank of England raises rates by 25 bps
  • Hungary unexpectedly lifts one-week deposit rate
  • Inflation painfully high and not yet peaking

BERN/LONDON, June 16 (Reuters) – Central banks across Europe raised interest rates on Thursday, some by amounts that shocked markets, and hinted at even higher borrowing costs to come to tame soaring inflation that is eroding savings and squeezing corporate profits.

Fuelled initially by soaring oil prices in the wake of Russia’s invasion of Ukraine, inflation has broadened out to everything from food to services with double digit readings in parts of the continent.

Such levels have not been seen in some places since the aftermath of the oil crisis of the 1970s.

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The Swiss National Bank and the National Bank of Hungary both caught markets off guard with big upward steps, just hours after their U.S. counterpart the Federal Reserve lifted rates by the most in almost three decades. read more

The Bank of England meanwhile lifted borrowing costs by the quarter point markets had expected. read more

The moves come just a day after the European Central Bank agreed plans in an emergency meeting to contain borrowing costs in the bloc’s south so it could forge ahead with rates rises in both July and September. read more

“We are in a new era for central banks, where lowering inflation is their only objective, even at the expense of financial stability and growth,” George Lagarias, Chief Economist at Mazars Wealth Management said.

The day’s biggest moves came in Switzerland where the SNB raised its policy rate to -0.25% from the -0.75%, a step so large, not a single economist polled by Reuters had predicted it.

The first SNB hike since 2007 is unlikely to be the last, however, and the bank could be out of negative territory this year, some economists said.

“The new inflation forecast shows that further increases in the policy rate may be necessary in the foreseeable future,” SNB Chairman Thomas Jordan told a news conference.

The Swiss franc jumped almost 1.8% against the euro on the decision and was headed for the biggest daily rise since January 2015 when the SNB unhooked the franc from its euro peg.

TIGHTROPE

In London, the Bank of England was more cautious but said it was ready to act “forcefully” to stamp out dangers posed by an inflation rate heading above 11%. read more

It was the fifth time that the BoE has raised borrowing costs since December and the British benchmark rate is now at its highest since January 2009.

Three of nine rate setters however voted for a bigger, 50 basis point increase, suggesting that the bank will be under pressure to keep raising rates, even as economic growth slows sharply.

“Central bankers are teetering along a tightrope, with the biggest concern that raising rates too quickly could tip economies into recession,” Maike Currie, Investment Director for Personal Investing at Fidelity International said.

“Monetary policy tightening is a very blunt tool to manage a very precarious situation.”

Despite the hike, sterling fell sharply as some in the market had bet on a bigger move given the Fed’s 75 basis points hike the previous evening. The weaker currency, however, means higher imported inflation and further pressure to raise rates. read more

The pound was last at $1.2085 against the dollar, down three quarters of a percent on the day.

In Budapest meanwhile, the Hungarian central bank unexpectedly raised its one-week deposit rate by 50 basis points to 7.25% at a weekly tender, also to tame stubbornly rising inflation now running in double-digits.

Barnabas Virag, the bank’s deputy governor said the increase far was from the last and the bank would continue its rate hike cycle with “predictable and decisive” steps until it sees signs that inflation is peaking, probably in the autumn.

The hike also comes as the nation’s currency has lost close to 7% of its value this year, increasing inflation further via higher import prices.

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Writing by Balazs Koranyi in Frankfurt; Additional reporting by William Schomberg in London, Krisztina Than in Budapest, Mike Shields and Silke Koltrowitz in Zurich; Editing by Toby Chopra

Our Standards: The Thomson Reuters Trust Principles.

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Central banks opt for shock and awe to tame inflation

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The exterior of the Marriner S. Eccles Federal Reserve Board Building is seen in Washington, D.C., U.S., June 14, 2022. REUTERS/Sarah Silbiger

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LONDON, June 17 (Reuters) – The Federal Reserve this week delivered its biggest interest rate rise in over a quarter of a century and even the Swiss National Bank took markets by surprise with an aggressive rate hike.

It leaves the Bank of Japan the only major developed world central bank still clinging to the inflation-is-transitory mantra.

Here’s a look at where policymakers stand in the race to contain red-hot inflation.

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Reuters Graphics Reuters Graphics

1) UNITED STATES

The Federal Reserve vaulted to the top-hawk spot on June 15, raising the target federal funds rate by three quarters of a percentage point to a 1.5%-1.75% range.

It acted days after data showed 8.6% annual U.S. inflation, triggering a market frenzy over potentially even more aggressive responses in the coming months.

The Fed is also reducing its $9 trillion stash of assets accumulated during the pandemic.

Central bank balance sheets are starting to shrink — slowly

2) NEW ZEALAND

The Reserve Bank of New Zealand raised its official cash rate by 50 basis points (bps) to 2% on May 25, a level not seen since 2016. That was its fifth straight rate hike. read more

It projected rates to double to 4% over the coming year and stay there until 2024. New Zealand inflation reached a three-decade high of 6.9% in the year to Q1, versus a 1-3% target.

New Zealand among the most aggressive central banks

3) CANADA

The Bank of Canada delivered a second consecutive 50 bps rate increase to 1.5% on June 1, and said it would “act more forcefully” if needed. read more

With April inflation at 6.8%, Governor Tiff Macklem has not ruled out a 75 bps or larger increase and says rates could go above the 2%-3% neutral range for a period.

Deputy BoC governor Paul Beaudry has warned of “galloping” inflation and markets price an unprecedented third consecutive 50 bps increase in July.

Major central banks are hiking rates

4) BRITAIN

The Bank of England (BoE) raised interest rates by 25 bps on Thursday and pledged to act “forcefully” to stamp out dangers posed by a UK inflation rate heading above 11%. read more

The British benchmark interest rate is now at its highest since January 2009. The BoE has now raised borrowing costs five times since December.

Sterling

5) NORWAY

Norway’s Norges Bank was the first big developed economy to kick off a rate-hiking cycle last year and has raised rates three times since September. It is expected to increase its 0.75% rate again on June 23 and plans seven more moves by end-2023.

6) AUSTRALIA

With the economy recovering smartly and inflation at a 20-year high of 5.1%, the Reserve Bank of Australia (RBA) raised rates by a surprise 50 bps on June 6. It was the RBA’s second straight move after insisting for months policy tightening was way off. read more

Money markets price in another 50 bps rise in July.

7) SWEDEN

Another late-comer to the inflation battle, Sweden’s Riksbank raised rates to 0.25% in April in a quarter-point move. With inflation at 6.4%, versus its 2% target, the Riksbank may now opt for bigger moves.

Having said as recently as February that rates would not rise until 2024, the Riksbank expects to hike two or three more times this year.

8) EURO ZONE

Now firmly in the hawkish camp, and facing record-high inflation, the European Central Bank (ECB) said on June 9 it would end bond-buying on July 1, hike rates by 25 bps that month for the first time since 2011 and again in September.

But without details on a tool to prevent borrowing costs for Southern European nations diverging too much above those of Germany, markets will test the ECB’s resolve.

The bank now plans to accelerate work on a potential new tool to contain so-called bond market fragmentation, and skew proceeds from maturing pandemic-era bond holdings into stressed markets. read more

Euro zone inflation is at record highs

9) SWITZERLAND

On June 16, the Swiss National Bank (SNB) unexpectedly raised its -0.75% interest rate, the world’s lowest, by 50 bps, sending the franc soaring read more .

Recent franc weakness has contributed to driving Swiss inflation towards 14-year highs and SNB governor Thomas Jordan said he no longer sees the franc as highly valued. That has opened the door to bets on more rate hikes; a 100 bps move is now priced for September.

10) JAPAN

That leaves the Bank of Japan (BoJ) as the holdout dove.

On Friday, it maintained ultra-low interest rates and vowed to defend its cap on bond yields with unlimited bond-buying. It holds 10-year yields in a 0%-0.25% range.

BoJ boss Haruhiko Kuroda stressed commitment to maintaining stimulus, warning of risks to the economy from tighter policy read more .

In a nod to yen weakness, Kuroda called its rapid decline to 24-year lows “undesirable” as it heightened uncertainty.

The BoJ may come under political pressure, however, given inflation may exceed the 2% target for the second straight month and elections loom in July. Hedge funds, meanwhile, are betting it can’t keep up huge bond-buying for ever.

Japan keeps yield curve control, but pressure for change is building
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Reporting by Sujata Rao, Dhara Ranasinghe and Yoruk Bahceli Additional reporting by Tommy Wilkes and Saikat Chatterjee
Editing by Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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DBRS Morningstar: Spanish Housing and Securitisation Market Update

LONDON–(BUSINESS WIRE)–In this commentary, we provide an overview of the Spanish housing market as well as how the recent past is shaping the residential mortgage-backed securities (RMBS) market.

Key findings include:

— The Spanish government introduced several supportive measures due to the impact of the pandemic, which kept the delinquencies low.

— Despite the double-digit decline in GDP caused by the pandemic, Spanish house prices have remained strong.

— The total number of Spanish RMBS deals rated by DBRS Morningstar is 44 and the weighted-average 90+-day arrears by current balance of these deals was 0.8%.

“In 2022, DBRS Morningstar expects the economic recovery to continue, albeit at a slower pace than previously expected, due to geopolitical uncertainties gripping the major world economies. Despite the double-digit decline in GDP caused by the pandemic, Spanish house prices have remained strong overall and house price appreciation may continue during 2022, particularly in large cities such as Madrid and Barcelona”, said Ketan Thaker, Managing Director of European RMBS at DBRS Morningstar..

To view the full report, click here: https://www.dbrsmorningstar.com/research/398160/spanish-housing-and-securitisation-market-update

The DBRS Morningstar group of companies consists of DBRS, Inc. (Delaware, U.S.)(NRSRO, DRO affiliate); DBRS Limited (Ontario, Canada)(DRO, NRSRO affiliate); DBRS Ratings GmbH (Frankfurt, Germany)(EU CRA, NRSRO affiliate, DRO affiliate); and DBRS Ratings Limited (England and Wales)(UK CRA, NRSRO affiliate, DRO affiliate). For more information on regulatory registrations, recognitions and approvals of the DBRS Morningstar group of companies, please see: https:// www.dbrsmorningstar.com/research/highlights.pdf.

The DBRS Morningstar group of companies are wholly-owned subsidiaries of Morningstar, Inc. © 2021 DBRS Morningstar. All Rights Reserved.

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In London, a Long-Awaited High-Speed Train Is Ready to Roll

LONDON — When Andy Byford ran New York City’s dilapidated subway system, fed-up New Yorkers hailed his crusade to make the trains run with fewer delays and lamented his premature exit after clashes with the governor at the time, Andrew M. Cuomo. He was a familiar, unfailingly cheerful presence on its often-restive platforms. Straphangers even took to calling him “Train Daddy.”

Nobody calls Mr. Byford Train Daddy in London, where he resurfaced in May 2020 as the commissioner of the city’s transit authority, Transport for London. But on May 24, when he opens the Elizabeth line — the long-delayed, $22 billion-plus high-speed railway that uncoils from west and east underneath central London — he might find himself again worthy of a cheeky nickname.

“That was fun in New York,” said Mr. Byford, 56, a gregarious public transport evangelist who grew up in Plymouth, England, began his career as a tube-station manager in London, and has also run transit systems in Toronto and Sydney, Australia. “But I’m really enjoying almost complete anonymity in London.”

Second Avenue subway or the extension of the No. 7 line, which are tiny projects by comparison.”

Mr. Cuomo resigned last year, his successor, Gov. Kathy Hochul, put a proposed $2.1 billion AirTrain project to LaGuardia airport on ice. That leaves the newly renovated airport without a rail link to Manhattan, to the enduring frustration of many New Yorkers.

Heathrow Airport has had a subway link for decades. When the Elizabeth line’s next phase is opened in the fall, passengers will be able to travel from Heathrow to the banks at Canary Wharf in East London in 40 minutes; that is a prime selling point for a city desperate to hold on to its status as financial mecca after Brexit. All told, the line has 10 entirely new stations, 42 miles of tunnels and crosses under the Thames three times.

“We’re jealous, it’s fair to say,” said Danny Pearlstein, the policy director for Riders Alliance, a transportation advocacy group in New York. “Imagining a new, full-length underground line here is not something anyone is doing. The Second Avenue subway, which people have been talking about for 100 years, has three stations.”

To be fair, Transport for London is not without its problems. It has shelved plans to build a north-south counterpart to the Elizabeth line, not to mention an extension to the Bakerloo tube line, because of a lack of funding. Still reeling from a near-total loss of riders during pandemic lockdowns, the system faces many of the same financial woes as New York’s subway.

Though ridership has recovered from a nadir of 5 percent, it is still at only 70 percent of prepandemic levels. Transport for London is also heavily dependent on ticket fares to cover its costs, more so than the New York subway, which gets state subsidies, as well as funds from bridge and tunnel tolls.

“My other obsession is sorting out the finances,” Mr. Byford said. “One way is to wean us away from dependence on fares.”

He is somewhat vague about how to do that, and it is clear that Transport for London will depend on additional government handouts to get back on sound financial footing. That is why the opening of the Elizabeth line is so important to London: It makes a powerful case for public transportation at a time when people are questioning how many workers will ever return to their offices.

Mr. Byford lays out the case with the practiced cadence of a stump speech. The new line will increase the capacity of the system by 10 percent. Its spacious coaches are well suited to a world in which people are used to social distancing. It will revitalize economically blighted towns east of the city, while making central London accessible to people who live in far-flung towns to the east and west.

While Mr. Byford does not expect ridership ever to return completely, he thinks 90 percent is attainable. If office buildings remain underpopulated, London could develop like Paris, with more residential neighborhoods downtown. (The Elizabeth line bears a distinct resemblance to the high-speed RER system in Paris.) The line, he says, is an insurance policy against the “siren voices of doom” about Brexit.

At times, Mr. Byford slips perilously close to a real estate agent’s patter. “These super-high-tech stations simply ooze quality,” he said. But emerging from Liverpool Street, with its spectacular, rippling, pinstriped ceiling, it is hard to argue with his basic assertion: “This is a game changer.”

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Truck Drivers’ On-the-Job Training Can Be Costly if They Quit

Once they have earned the license, drivers haul actual loads for their new employers. For typically four to 12 weeks, they are accompanied by a trainer. They earn a set weekly rate, varying by company but often $500 to $800, according to company websites. Mr. England said his company’s pay was $560 a week in 2019 and about $784 today.

Trainers may be barely trained themselves, often needing only six months’ experience, and they are allowed to sleep in the back while the new driver is alone in the cab, according to industry experts and many companies.

Ms. Jeschke said she finished her training without being able to back up, a crucial skill for truckers. She said she once spent a week at a truck stop, unpaid, waiting for another driver because she didn’t yet have the expertise to pick up a load on her own.

Frustrated with the working conditions and the low pay, she and Ms. Skamser left C.R. England before their contracts were up and went to work for another trucking company, Werner Enterprises, where they say they were more fully trained.

“I do not have words for how bad it was,” Ms. Jeschke said. “They do not care about drivers, only the loads.”

Ms. Skamser said a debt collection agency was pursuing her for $6,000 that C.R. England says she owes for her training.

It’s reasonable for companies to want to recoup the cost of training an individual, said Stewart J. Schwab, a professor at Cornell Law School. Still, he noted, like noncompete clauses, these contracts can significantly restrict worker mobility and hinder competition. In 2021, Mr. Schwab worked on a proposed law about restrictive employment agreements, such as the ones trucking companies use, with the Uniform Law Commission, a nonpartisan organization that drafts laws for states.

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Morning Bid: King cash is naked, article with image

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U.S. dollar banknotes are displayed in this illustration taken, February 14, 2022. REUTERS/Dado Ruvic/Illustration

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A look at the day ahead in markets from Julien Ponthus.

Storing wealth in cash is clearly a counter-intuitive call when inflation is surging towards double-digit figures for the first time in a generation.

Yet, many investors are doing just that: BoFA said $13.2 billion was moved into cash last week and cash positions by fund managers earlier this month reached their highest levels since the pandemic market crash of March 2020. read more

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BofA analysts also warned that commodity prices were on track for their biggest increase in over a century while government bonds were set for their worst year since 1949 as central banks raise interest rates to tame surging inflation.

With equity markets losing more than 5% so far this quarter, many investors may feel vindicated in deserting risky stock markets where dividends and capital gains are looking less attractive compared to fast-rising government bond yields.

Yields on 10-year Treasuries have risen nearly 40% so far this month to 2.5% while in Germany, the Bund is closing to 0.6% and moving further away from negative territory which was its home for the past three years.

The war in Ukraine, hard-pressured supply chains, a resurgent pandemic amid buoyant inflation is making this monetary tightening cycle particularly hard to manoeuvre.

The picture, this last Monday morning of March 2022, is blurry as ever.

The yen extended its descent to a six-year low after the Bank of Japan stepped into the market to stop government bond yields from rising and Asian shares retreated as a coronavirus lockdown in Shanghai weighed on sentiment.

Oil prices are falling about $5 amid fears of weaker demand from China but are still at levels unseen since 2014.

Some answers on the direction of travel from here are expected this week with surveys on global manufacturing, inflation readings and U.S. job data.

Key developments that should provide more direction to markets on Monday:

– German exporters’ morale slumps on war in Ukraine

– China industrial profits up, but mired in single-digit growth read more

– Central bank speakers: Andrea Enria, chair of the supervisory board of the ECB, Bank of England Governor Andrew Bailey, Norway Central Bank Deputy Governor Oystein Borsum

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Reporting by Julien Ponthus; Editing by Saikat Chatterjee

Our Standards: The Thomson Reuters Trust Principles.

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Is America’s Economy Entering a New Normal?

The pandemic, and now the war in Ukraine, have altered how America’s economy functions. While economists have spent months waiting for conditions to return to normal, they are beginning to wonder what “normal” will mean.

Some of the changes are noticeable in everyday life: Work from home is more popular, burrito bowls and road trips cost more, and buying a car or a couch made overseas is harder.

But those are all symptoms of broader changes sweeping the economy — ones that could be a big deal for consumers, businesses and policymakers alike if they linger. Consumer demand has been hot for months now, workers are desperately wanted, wages are climbing at a rapid clip, and prices are rising at the fastest pace in four decades as vigorous buying clashes with roiled supply chains. Interest rates are expected to rise higher than they ever did in the 2010s as the Federal Reserve tries to rein in inflation.

History is full of big moments that have changed America’s economic trajectory: The Great Depression of the 1930s, the Great Inflation of the 1970s and the Great Recession of 2008 are examples. It’s too early to know for sure, but the changes happening today could prove to be the next one.

kept at it.

Now, Russia’s invasion of Ukraine threatens the global geopolitical order, yet another shock disrupting trade and the economic system.

For Washington policymakers, Wall Street investors and academic economists, the surprises have added up to an economic mystery with potentially far-reaching consequences. The economy had spent decades churning out slow and steady growth clouded by weak demand, interest rates that were chronically flirting with rock bottom and tepid inflation. Some are wondering if, after repeated shocks, that paradigm could change.

“For the last quarter century, we’ve had a perfect storm of disinflationary forces,” Jerome H. Powell, the Fed chair, said in response to a question during a public appearance this week, noting that the old regime had been disrupted by a pandemic, a large spending and monetary policy response and a war that was generating “untold” economic uncertainty. “As we come out the other side of that, the question is: What will be the nature of that economy?” he said.

began to raise interest rates this month in a bid to cool the economy down and temper high inflation, and Mr. Powell made clear this week that the central bank planned to keep lifting them — perhaps aggressively. After a year of unpleasant price surprises, he said, the Fed will set policy based on what is happening, not on an expected return to the old reality.

“No one is sitting around the Fed, or anywhere else that I know of, just waiting for the old regime to come back,” Mr. Powell said.

The prepandemic normal was one of chronically weak demand. The economy today faces the opposite issue: Demand has been supercharged, and the question is whether and when it will moderate.

Before, globalization had weighed down both pay and price increases, because production could be moved overseas if it grew expensive. Gaping inequality and an aging population both contributed to a buildup of savings stockpiles, and as money was held in safe assets rather than being put to more active use, it seemed to depress growth, inflation and interest rates across many advanced economies.

Japan had been stuck in the weak-inflation, slow-growth regime for decades, and the trend seemed to be spreading to Europe and the United States by the 2010s. Economists expected those trends to continue as populations aged and inequality persisted.

Then came the coronavirus. Governments around the world spent huge amounts of money to get workers and businesses through lockdowns — the United States spent about $5 trillion.

The era of deficient demand abruptly ended, at least temporarily. The money, which is still chugging out into the U.S. economy from consumer savings accounts and state and local coffers, helped to fuel strong buying, as families snapped up goods like lawn mowers and refrigerators. Global supply chains could not keep up.

were able to raise prices without losing customers, they did so. And as workers saw their grocery and Seamless bills swelling, airfares climbing and kitchen renovations costing more, they began to ask their employers for more money.

Companies were rehiring as the economy reopened from the pandemic and to meet the burst in consumption, so labor was in high demand. Workers began to win the raises they wanted, or to leave for new jobs and higher pay. Some businesses began to pass rising labor costs along to customers in the form of higher prices.

The world of slow growth, moderate wage gains and low prices evaporated — at least temporarily. The question now is whether things will settle back down to their prepandemic pattern.

The argument for a return to prepandemic norms is straightforward: Supply chains will eventually catch up. Shoppers have a lot of money in savings accounts, but those stockpiles will eventually run out, and higher Fed interest rates will further slow spending.

As demand moderates, the logic goes, forces like population aging and rampant inequality will plunge advanced economies back into what many economists call “secular stagnation,” a term coined to describe the economic malaise of the 1930s and revived by the Harvard economist Lawrence H. Summers in the 2010s.

Fed officials mostly think that reversion will happen. Their estimates suggest that low inflation and slow growth will be back within a few years, and that interest rates will not have to rise above 3 percent to achieve that moderation. Market pricing also suggests inflation will slow with time, albeit to higher levels than investors expected in 2018 and 2019.

But some of today’s trends look poised to linger, at least for a while. Job openings are plentiful, but the working-age population is growing glacially, immigration has slowed, and people are only gradually returning to work from the labor market’s sidelines. Labor shortages are fueling faster wage gains, which could sustain demand and enable companies to charge higher prices.

a recent essay.

Global forces could exacerbate those trends. The past year’s supply chain issues could inspire companies to produce more domestically — reversing years of globalization and chipping away at a force that had been holding down wage and price growth for decades. The transition to greener energy sources could bolster investment, pushing up interest rates and at least temporarily lifting costs.

“The long era of low inflation, suppressed volatility and easy financial conditions is ending,” Mark Carney, a former head of the Bank of England, said of the global economy in a speech on Tuesday. “It is being replaced by more challenging macro dynamics in which supply shocks are as important as demand shocks.”

Russia’s invasion of Ukraine, which has the potential to rework global trade relationships for years to come, could leave a more lasting mark on the economy than the pandemic did, Mr. Carney said.

“The pandemic marks a pivot,” he told reporters. “The bigger story is actually the war. That is crystallizing — reinforcing — a process of de-globalization that had begun.”

Mr. Summers said the current period of high inflation and repeated shocks to supply marked “a period rather than an era.” It is too soon to say if the world has fundamentally changed. Over the longer term, he puts the chances that the economy will settle back into its old regime at about 50-50.

“I don’t see how anyone can be confident that secular stagnation is durably over,” he said. On the other hand, “it is quite plausible that we would have more demand than we used to.”

That demand would be fueled by government military spending, spending on climate-related initiatives and spending driven by populist pressures, he said.

In any case, it could take years to know what the economy of the future will look like.

What is clear at this point? The pandemic, and now geopolitical upheaval, have taken the economy and shaken it up like a snow globe. The flakes will eventually fall — there will be a new equilibrium — but things may be arranged differently when everything settles.

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