UBS is in talks to buy Credit Suisse as regulators rush to restore confidence in the banking system. Here's how we got here.

Credit Suisse's stock is plunging as investors fear a banking crisis.

AP Photo/Schalk van Zuydam

• UBS is in talks to acquire Credit Suisse as regulators rush to restore confidence.
• Credit Suisse has long been a troubled bank, posting billions in losses and deposit outflows. 
• Here's a closer look at why regulators are so worried about Credit Suisse.

UBS is eyeing a takeover of Credit Suisse, after shares tumbled to a record low this week and fears mounted over the strength of the global banking system.

The prospective deal between Switzerland's two biggest banks was brokered by the Swiss National Bank and regulators in an effort to shore up confidence for the country's financial institutions, the Financial Times reported on Friday.

According to the outlet, Swiss regulators said a merger between the two banks is their "plan A" leading into markets opening Monday, though it remains uncertain if the deal will go through.

Deutsche Bank is also reportedly considering acquiring parts of Credit Suisse, sources close to the matter told Bloomberg on Saturday. 

Presented below is a closer look at the European lender's troubles, and why it's fending off questions about its stability and it looks to reach a deal before markets open Monday. 

Why is Credit Suisse under fire right now?

Credit Suisse shares tanked Wednesday after its biggest shareholder, Saudi National Bank, warned it wouldn't be able to invest more cash without raising its stake above the regulatory limit of 10%.

SNB's chair, Ammar al-Khudairy, told Reuters that he doesn't see the Saudi bank's stated lack of support as a problem.

"I don't think they will need extra money; if you look at their ratios, they're fine," he said, referring to standard measures of a bank's financial health.

"We are happy with the plan, the transformation plan that they have put forward. It is a very strong bank," he added, noting Credit Suisse operates under a strong regulatory regime in Switzerland and other countries.

But investors have been showing signs of losing faith in Credit Suisse long before the Saudi comments, and before the SVB collapse rattled the entire banking industry.

Harris Associates, Credit Suisse's No. 1 investor as recently as last year, exited its entire stake in the embattled Swiss bank over the past few months. The Chicago-based investment management firm owned about 10% of the Swiss bank's stock as of August last year, but slashed its exposure to 5% in January. More recently, Harris reportedly cut its holdings in the lender to zero.

"There is a question about the future of the franchise. There have been large outflows from wealth management," David Herro, Harris Associates' deputy chairman and chief investment officer, was cited by the Financial Times as saying, in a March 5 report.

And Credit Suisse has faced a slew of other recent challenges. The bank revealed in its latest annual report that it found "material weaknesses" in its internal control over its financial reporting. Moreover, it delayed publishing that annual report after the Securities and Exchange Commission inquired about the lender's revisions to cash flow statements dating back to 2019.

Credit Suisse also suffered a net loss of about $8 billion last year, as its net revenues tanked by more than a third.

Moreover, it has seen a sharp increase in outflows over the past few months, driving it to tap its "liquidity buffers" — liquid assets such as central-bank reserves and high-quality government debt.

Here's a quick summary of the controversies that have plagued Credit Suisse in recent years:

• The bank hired private detectives to spy on former executives, leading to the departure of its CEO in February 2020.
• It lost nearly $6 billion in March 2021 after Archeges Capital Management imploded and defaulted on its loans from the Swiss lender.
• It's still working to recover about $2 billion of the roughly $10 billion it had tied up in supply chain finance funds linked to Greensill, which collapsed amid allegations of fraud in March 2021.
• It was fined for making fraudulent loans dubbed "tuna bonds" to Mozambique's government between 2012 and 2016.
• Its chairman was forced to resign in January after an internal investigation found he violated COVID-19 quarantine rules to attend Wimbledon.
• Credit Suisse's previous CEO resigned for personal and health reasons last July.

Is a banking crisis brewing?

The race to put together a deal to acquire Credit Suisse follow recent events in the US banking industry.

Silvergate, a key lender to the cryptocurrency industry, announced it was winding down its operations and liquidating its assets last Wednesday.

Silicon Valley Bank, a major player in the venture-capital ecosystem, was overwhelmed by a wave of withdrawals and taken over by the Federal Deposit Insurance Corporation (FDIC) on Friday. 

The FDIC revealed on Sunday it had taken control of Signature Bank as well. Moreover, it announced that under a "systemic risk exception," it would fully guarantee both banks' deposits, beyond the usual limit of $250,000 per account.

And First Republic Bank has also been trying to stave off concerns about its financial position, with 11 banks depositing $30 billion in the bank to help shore up its liquidity. Still, the New York Times reported on Friday that First Republic was looking to raise fresh capital. 

SVB ran into trouble because it invested some of its clients' deposits in long-dated bonds. Those plunged in price as the Federal Reserve hiked interest rates from nearly zero to upwards of 4.5% over the past 12 months in response to inflation hitting 40-year highs.

The lender sold its bond portfolio at a nearly $2 billion loss last week, and launched a capital raise to reinforce its finances. Its scramble for cash stoked concerns about SVB's stability among VCs and their portfolio companies, sparking a wave of withdrawals that overwhelmed the bank and spurred the FDIC to intervene.

 

SVB's collapse fueled worries that other banks are carrying heavy losses on their bond portfolios, as rates have jumped in both the US and Europe.

It also put a focus on bank liquidity, with consumers and companies shifting their deposits from weaker banks to the strongest and largest institutions. 

Read the original article on Business Insider

from Business Insider https://ift.tt/ikUbPeJ

Here's what it was like at the New York Stock Exchange the day Silicon Valley Bank collapsed, according to Wall Street's most famous trader

Trader Peter Tuchman has been at the New York Stock Exchange for almost 38 years.

AP Photo/Richard Drew

• Peter Tuchman has been at the New York Stock Exchange for almost 38 years and is the most-photographed trader on Wall Street.
• Stocks plunged last week on concerns of contagion from the collapse of Silicon Valley Bank.
• "We've never seen the volatility that we're seeing here. The intraday madness," Tuchman said.

On the morning of the largest bank failure since 2008, Peter Tuchman had four shots of espresso, two glasses of orange juice, and geared up for his day. 

Immediately, stocks were down that morning. The S&P 500 was having its worst week of the year. Markets were going haywire shortly after the opening bell. 

Tuchman, a stock broker with nearly 38 years of experience on the trading floor is the most-photographed trader on Wall Street, and he's seen his share of volatility. 

He's weathered the stock market crash of 1987, the bursting of the dot-com bubble, the financial crisis of 2008, and the COVID-19 sell-off of 2020.

On March 10, when Silicon Valley Bank collapsed, "shit was really hitting the fan," he told Insider.

Tuchman describes the New York Stock Exchange as "the delta of all information," and the "ultimate pricing mechanism" for the world's markets, and on that Friday, investors and news outlets were calling him even more than usual for a pulse check. 

Hedge funds, large institutions, wealthy individual investors and customers with "skin in the game" were reaching out to Tuchman and other brokers on the floor, asking: "What's going on? How much is for sale? How much is to buy? Where are we at?" he said. "We are the eyes and ears of publicly-traded companies."

"It's important that within the world of liquidity and volatility that there's a human being at the point of execution, making decisions, not a machine, not a robot, not an algo," he said. 

Panic rattled Wall Street and equities plummeted on concerns about what's next to fall under the weight of the Federal Reserve's rising interest rates, along with contagion from SVB, which serviced more than 50% of all venture-backed companies in the US and whose fall marked the biggest calamity since the last financial crisis. 

Bank shares led the plunge on Friday, posting their worst week since 2020. The decline in markets was fueled by fear hitting SVB peers like Western Alliance Bancorp and Signature Bank, which both shed over 20% on the day. Like SVB, Signature would go on to be taken over by the FDIC that weekend. 

"We've never seen the volatility that we're seeing here. The intraday madness." Tuchman said about the last few years in financial markets. "Things that used to take generations to happen, now can happen between lunch and your coffee break, right? We can be in a bear market at 11 in the morning, and by three o'clock we're in a bull market."

He added: "Well, that's insane. That used to take 20 years to happen. Now, it happens over lunch."

Tuchman didn't eat lunch on Friday, but he typically doesn't anyway.

Tuchman said when Silicon Valley Bank collapsed last week "shit was really hitting the fan."

Reuters

On the floor, Tuchman got a sense that "something serious is happening" when multiple stocks halted trading at once. It's a pricing mechanism called "limit up, limit down," which is done temporarily to mitigate extraordinary volatility when price declines in individual securities reach levels that may exhaust market liquidity. 

In Tuchman's words: "We give everybody a chance to figure out what they want to do because nobody is advantaged from stocks going up 30 points and down 40 points. It's just not rational."

He added: "It gives everyone a minute to calm down, see where the bodies are buried, and then make a decision going forward."

Less than one minute after the opening on Friday at 9:30 a.m., First Republic Bank, another SVB peer, halted trading for six minutes. The stock paused 12 others times that day. Western Alliance followed suit, pausing 20 times intraday, according to historical data from the New York Stock Exchange.

"We do trade a lot of the contagion stocks so suddenly [we] are noticing the market is selling [them] off radically," he added. 

Monitors cover nearly every nook and cranny of the trading floor. Fast-talking brokers are hunched over their screens, taking calls, while digesting the barrage of headlines to dissecting what's moving markets. 

"We are surrounded by all the information that make up the market. I watch at every given second what's going on with all that information," he said, gesturing at the hundreds of monitors around us. "You're seeing everything in real time."

There's always a volatility somewhere, Tuchman says, but that's part of the job. 

There was a sense that more trouble was brewing as traders left for the weekend. The government didn't announce that it would backstop losses for SVB and Signature Bank depositors until Sunday evening, leaving investors in the lurch over what would happen next.

"Markets don't like unknowns and anxiety," he said. "We didn't know a lot more than we knew. That's when you have fear in the market and that's why we had the massive sell-off on Friday."

He added: "I call it a perfect storm. You've got a lack of information and transparency and clarity. You've got a weekend coming up. You've got a looming Fed meeting. You've got the world trying to come out of a pandemic. You've got a massive interest rate raising environment. You've got a tech sector under fire. You've got retail sales here. All eyes are on the market."

Read the original article on Business Insider

from Business Insider https://ift.tt/EAaNHD5

Wanted: new owner to run The Crooked House, Britain's 'wonkiest pub' that's been serving pints for almost 200 years

The Crooked House has been called Britain's wonkiest pub.

Christie & Co

• Ambitious buyers have the chance to own what's been dubbed the "wonkiest pub" in Britain. 
• The Crooked House near Dudley has gone on the market at a guide price of just over $800,000. 
• The number of pubs in the UK is falling due to surging costs and declining patronage.

Ever dreamt of owning your own bar? If you don't mind tilting your head a bit, The Crooked House could be the one for you.

The pub just outside Dudley, in England's West Midlands, is one of 61 being sold by Marston's in an apparent bid to cut overheads following a recent surge in costs. The company runs about 1,500 pubs and employs 12,000 people.

The slanted pub, which has been dubbed the wonkiest in Britain, was built as a farmhouse in 1765 and is thought to have become a public house in the 1830s. It's on the market for a guide price of £675,000 ($813,000). 

Dudley, about 10 miles west of Birmingham, was a mining town in the 19th century, with more than a quarter of the male population occupied in the coal, iron and limestone mines in 1840s, per Vision of Britain.

Mining activity triggered subsidence that caused the pub to start sinking. It was bought by Wolverhampton & Dudley Breweries in the 1940s, which made the building structurally safe, according to selling agent Christie & Co.

One side of the pub is about 13 feet higher than the other, while its sash windows are all 16 degrees off-centre – more than double the famous lean of the Tower of Pisa, according to Discover Britain magazine. 

Per The Times of London, a sign outside the pub details how its "walls create 'gravity hill'-style optical illusions including glasses slowly sliding across 'level' tables and marbles appearing to roll up hill".

However, the pub's subsidence means it could require a significant amount of upkeep despite its unique appearance. 

"This is a chance to own what has been called Britain's wonkiest pub and Britain's drunkest pub. Surely there's some appeal there? It's a piece of history," 54-year-old patron Jim Knowlson told The Times.

On top of logistical issues, the new owner of the wonky pub may also struggle to make ends meet.

Keris de Villiers, who runs the Pig & Whistle pub in Wandsworth, south London, said she'd never found it so difficult to turn a profit in 10 years.

"We got through COVID, but the cost-of-living crisis is worse," she told the BBPA. "Costs on everything across our business from energy to ingredients have rocketed."

The number of pubs in Britain fell by 15% between 2010 and 2020, according to data from the Office of National Statistics. 

The number of pubs in England and Wales fell below 40,000 last year, real estate advisers Altus Group told The Guardian, as rising costs combined with declining patronage. The BBPA warned that another 2,000 could face closure by the end of next year. 

A Marston's representative told The Times that The Crooked House was expected to remain as a pub under a new owner.

Read the original article on Business Insider

from Business Insider https://ift.tt/wWgsOxP

Cocaine production is at record-high levels, UN says, but drug interceptions mean that less is actually available on the streets

A stock photo shows a bag of cocaine with lines of the drug.

Getty Images

• Cocaine production is at a record-high level, according to a new report by the United Nations.
• The surge in global cocaine supply should "put all of us on high alert," warned UNODC's chief.
• Demand for the drug is also rocketing, after a slump during the COVID-19 pandemic, it said.

Cocaine production is at record levels, with demand for the drug rebounding after temporarily slumping amid the COVID-19 pandemic, according to a new report from the United Nations Office on Drugs and Crime (UNODC).

Almost 2,000 tons of the illicit drug were produced in 2020, continuing a sharp uptick in production since 2014, Thursday's report said.

It added that the surge is partly due to a rise in coca bush cultivation, which increased 35% from 2020 to 2021 — the steepest year-to-year incline since 2016.

UNODC executive director Ghada Waly warned that the surge in global supply should "put all of us on high alert."

The report also said that improvements in the process of converting coca bush to cocaine hydrochloride, the white powder form, have contributed to the rise in production.

The increase in supply is happening alongside an increase in demand, which temporarily slumped during the pandemic, per the report.

"The COVID-19 pandemic had a disruptive effect on drug markets," the report said. "With international travel severely curtailed, producers struggled to get their product to market.

"Night clubs and bars were shut as officials ramped up their attempts to control the virus, causing demand to slump for drugs like cocaine," it added.

But now, demand is up again, with most regions showing a rising number of users, the report said. 

In 2020, North America represented about 30% of the world's cocaine users, but the report warned of strong potential for a large expansion of cocaine use in Africa and Asia.

The UNODC said that there could be 24.5 million additional cocaine users if prevalence levels in North America extend to other regions of the world.

Though demand has been on the rise, so have interceptions by law enforcement agencies.

Interceptions and seizures have actually been increasing at a higher level than production, meaning the amount of cocaine available for consumption has been somewhat curtailed, the UNODC said.

Read the original article on Business Insider

from Business Insider https://ift.tt/WZxn1z8

The 6 best locations for a vending machine if you want to start a 6-figure side hustle

Crystal Warren stands with her vending machines.

Crystal Warren

• Starting a vending-machine business can be a lucrative side hustle or full-time venture.
• Finding a good location is key to earning a profit, said Crystal Warren, who runs such a business.
• Here are six top locations for vending machines chosen by entrepreneurs in the business.

One of the most important steps to starting a vending-machine business is assessing your locations.

That's a lesson Crystal Warren learned the hard way when she started her company, Vending Factory, which made six figures last year. She lost about $5,000 from a vending-machine route that she purchased without fully vetting the three locations and five machines.

"It was missing a lot of key things that I didn't know," she said. "As soon as I purchased the route, I got kicked out of those locations because the owners were moving."

She also hadn't tested parts of the machines, like the coin mechanism and bill validator. Instead of trying to repair the machines and salvage the route, she sold everything for $459, which was lower than what she should have gotten for them, she said.

Today, Warren's business scouts locations and places machines for entrepreneurs who are looking to get into the industry. She encourages founders to ask for help when they're starting out.

"You need to go to the machine and see what it's worth," she said.

While many vending entrepreneurs look for locations with a lot of foot traffic, Warren evaluates locations based on the target audience for the product. Foot traffic is still important, but it depends on what you're selling. For example, more people buy eyelashes at airports than they do at hotels, she said.

"Your audience is really going to determine how much money you're going to make," she said. "You can have a thousand people walking in front of your machine — it doesn't necessarily mean they're going to buy."

Vending machines can be a lucrative side hustle for entrepreneurs looking to earn passive income, especially as economic experts warn of a recession this year.

Here are the top six locations for a vending machine, according to vending-machine entrepreneurs.

1. Schools and universities

When most educational institutions closed for remote learning earlier in the COVID-19 pandemic, schools lost their appeal for vending-machine placement. Now that students are back in classrooms, schools are back at the top of Warren's list. 

Snack and drink machines do well at any type of school: middle schools, high schools, and colleges, Warren said.

According to the vending entrepreneur Marcus Gram, younger people use vending machines more than other age groups.

"Students have access to the vending machines in their dorms 24/7 and even late at night for classes," he said.

2. Warehouses

Since warehouses typically have a large number of workers, there's plenty of traffic for vending machines, Warren said.

Additionally, warehouses tend to have long operating hours and multiple shifts, so employees are more likely to use vending machines, Gram said.

"Physical labor causes people to burn calories, and when you burn calories, you're hungry or thirsty," he added. "Breaks aren't typically long enough for people to go to the store, so they turn to the vending machine."

He said that caffeinated beverages and sports drinks were good products to stock at a warehouse for employees looking to boost their energy.

3. Hotels and vacation rentals

Warren said that hotels could be a good place for a vending machine, adding that you'd have the most success with simple products, rather than niche items. 

"If you have lashes inside of the vending machine at a hotel, it doesn't necessarily mean that that's going to sell," she said.

Steve Slagle, a vending entrepreneur, set up water and ice machines at two large condominium complexes in Panama City Beach, Florida. The condos are booked as vacation rentals on Airbnb and Vrbo, and he made more than $30,000 in revenue in one year, he previously told Insider.

4. Large offices

Gram said that offices with more than 100 employees were good places for vending machines, though business offices don't usually perform as well as warehouses. For the entrepreneur to earn enough profit, the office space should have double the people compared with a warehouse, he added. 

"People in offices tend to not have the same snacking habits as people at warehouses, especially if the office is a 9 a.m. to 5 p.m. or 8 a.m. to 4 p.m. location," he said. "This is different if the location is open for multiple shifts such as 9 a.m. to 9 p.m."

5. Gyms

Gram said you could make decent money at gyms because, like warehouses, people are burning calories and likely looking for an energy boost or to quench their thirst. He recommends stocking water, Gatorade, and Vitamin Water. 

"Whether it's soccer, baseball, or LA Fitness, you will make good money at these places," he said. "On average, you make more money from beverage sales than snack sales."

6. Airports

Airports have a lot of foot traffic and therefore more opportunity for your vending machine to be visited by travelers. Plus, TikToker @MeganHealeey said in a video that you can typically charge more for your products. Retail prices in airports are typically higher because customers are paying for convenience and speed.

However, it's important to consider that restocking and operating a vending machine in an airport will be more challenging than other locations since you'll have to travel through the terminal, on top of following any regulations set by the agency or company that runs the airport.

Read the original article on Business Insider

from Business Insider https://ift.tt/KQcGWhe

The stock market is going nowhere as investors flock to risk-free assets offering higher yields

REUTERS/Dario Cantatore/NYSE Euronext

• The stock market is going nowhere as investors adjust to high equity valuations, according to Goldman Sachs.
• The bank said that a range bound stock market is likely with risk-free assets yielding upwards of 5%.
• Investors are flocking to money market funds, with the category seeing $117 billion in inflows this week.

---

Stock market investors hoping for a rally will have to be patient if Goldman Sachs' forecast proves correct.

The bank said that it expects the S&P 500 to trade in a sideways range that produces nothing but flat returns as investors grapple with unappealing valuations and juicy alternatives in the form of risk-free bonds and money market funds, according to a Friday note.

"We see two potential problems," Goldman Sachs' Peter Oppenheimer wrote. "The first is that the US equity market, long a significant outperformer, remains expensive relative to history and relative to real rates."

The second problem is the fact that investors can opt for a guaranteed, risk-free return of about 5% in the form of short-term treasury bills and money market funds. That means there is a high hurdle rate equities need to overcome to be attractive enough for investors to consider, and a US banking crisis certainly doesn't help.

So far, it's the risk-free cash assets that are winning, with fund flow data showing that money market funds attracted $117 billion in inflows over the past week, according to data from Bank of America. That represents the biggest week of inflows since 2020 when investors were flocking to safety amid the onset of the COVID-19 pandemic.

"Cash rates are hiker and, with zero risk and volatility, cash and short duration debt look very attractive relative to equities. This is particularly so given that the US 10-year bond yield is well above the dividend yield," Oppenheimer wrote.

The S&P 500 currently has a dividend yield of about 1.60%, less than half the US 10-Year Treasury yield of 3.45%.

And the risk-reward profile of the stock market isn't about to get better anytime soon, as Goldman expects flat earnings growth this year and just 5% earnings growth in 2024, meaning that valuations are likely to stay elevated unless a significant sell-off takes place.

"If, as we expect, global economies avoid recessions this year and inflation continues to moderate, the fundamental backdrop for equities would look more attractive for longer-term investors. But valuations are not yet compelling enough to offer a great risk/reward, particularly given expectations for modest profit growth in the near term," Oppenheimer concluded. 

Read the original article on Business Insider

from Business Insider https://ift.tt/9JomUf2

Cocaine production is at record-high levels, UN says, but drug interceptions mean that less is actually available on the streets

A stock photo shows a bag of cocaine with lines of the drug.

Getty Images

• Cocaine production is at a record-high level, according to a new report by the United Nations.
• The surge in global cocaine supply should "put all of us on high alert," warned UNODC's chief.
• Demand for the drug is also rocketing, after a slump during the COVID-19 pandemic, it said.

Cocaine production is at record levels, with demand for the drug rebounding after temporarily slumping amid the COVID-19 pandemic, according to a new report from the United Nations Office on Drugs and Crime (UNODC).

Almost 2,000 tons of the illicit drug were produced in 2020, continuing a sharp uptick in production since 2014, Thursday's report said.

It added that the surge is partly due to a rise in coca bush cultivation, which increased 35% from 2020 to 2021 — the steepest year-to-year incline since 2016.

UNODC executive director Ghada Waly warned that the surge in global supply should "put all of us on high alert."

The report also said that improvements in the process of converting coca bush to cocaine hydrochloride, the white powder form, have contributed to the rise in production.

The increase in supply is happening alongside an increase in demand, which temporarily slumped during the pandemic, per the report.

"The COVID-19 pandemic had a disruptive effect on drug markets," the report said. "With international travel severely curtailed, producers struggled to get their product to market.

"Night clubs and bars were shut as officials ramped up their attempts to control the virus, causing demand to slump for drugs like cocaine," it added.

But now, demand is up again, with most regions showing a rising number of users, the report said. 

In 2020, North America represented about 30% of the world's cocaine users, but the report warned of strong potential for a large expansion of cocaine use in Africa and Asia.

The UNODC said that there could be 24.5 million additional cocaine users if prevalence levels in North America extend to other regions of the world.

Though demand has been on the rise, so have interceptions by law enforcement agencies.

Interceptions and seizures have actually been increasing at a higher level than production, meaning the amount of cocaine available for consumption has been somewhat curtailed, the UNODC said.

Read the original article on Business Insider

from Business Insider https://ift.tt/WZxn1z8

8 million Chinese youths sat for a test in the style of an 'imperial examination' — all for a job that pays about $7,000 a year

A woman in a busy subway station.

d3sign/Getty Images

• A record 7.7 million Chinese youths sat for an intense test to try to secure one of 200,000 government jobs.
• With unemployment raging, people are fighting for the one-in-40 chance to work in the civil service.
• Despite low pay, graduates are attracted to these "iron rice bowl" jobs, said China expert Alfred Wu.

More than 7.7 million Chinese youths sat for tests to secure 200,000 government jobs this year — the highest number ever recorded, per CNBC.

The applicants were all fighting for the one-in-40 chance to serve the Chinese government. These jobs are considered respectable vocations and have been dubbed "iron rice bowls" because of the stability and job security they bring, per the South China Morning Post. 

This staggering eight million figure — slightly less than the population of New York — was a five-fold increase from the 1.4 million people who took the exam in 2021. 

The application tests for these public service jobs are similar in intent and style to the ancient Chinese imperial examinations, a series of tests conducted by the state to find candidates best suited to serve the bureaucracy. These tests were conducted during China's Han Dynasty and were immensely difficult to pass, per the World History Encyclopedia. 

The modern-day civil service tests are not far off the mark from their ancient iterations. The tests now assess candidates on multiple criteria like their language skills, data analysis, "common-sense judgment," and more, per CNBC. 

In spite of the tough tests required to secure these jobs, civil service jobs are not high paying.

CNBC reported that civil servants earned an average of $6,979 a year in 2012. The state-run Chinese media outlet News 163, meanwhile, presents a far more dismal figure. It reported that 60% of civil servants earned less than $3,600 yearly in 2008 and 2009.

The vast number of applicants for the 2023 round is indicative of a growing demand for stable jobs as China's unemployment rate surges to new highs. 

This comes as Xi Jinping was confirmed for an unprecedented third term as China's leader on March 10, per The Guardian.

The civil service provides much-needed security in uncertain times

More people are likely to flock to civil service jobs now because of China's flagging economy, said China expert Alfred Wu, an associate professor at the Lee Kuan Yew School of Public Policy at the National University of Singapore.

"In general, civil service jobs could bring with them benefits for the whole family, like connections to positions of power," Wu said. "Some youths' parents may have realized during COVID-19 that their children would be far better off with stable jobs in the public sector, than unstable — albeit higher paid jobs — in the private sector."

Wu said there is a significant pay disparity between the public and private sector, primarily due to Chinese leader Xi Jinping's nationalistic push to give state-owned businesses priority over the private sector.

"There is a lack of trust in the private sector now," Wu said. "Young people and fresh graduates will likely be more attracted to stable, 'iron rice bowl' jobs, because working for the government is a safer bet."

The rush to secure jobs in the public service comes amid skyrocketing unemployment

In August, China's national development and reform commission said its youth unemployment rate hit 19.9% in July. This meant that one in five jobseekers aged 16 to 24 were out of work.

This dismal number prompted Willy Lam, a China expert at the Jamestown Foundation in Washington, D.C., to call this China's "worst job crisis" in four decades.

"Mass unemployment is a big challenge for the Communist Party," Lam told CNN in September.

There are many reasons underpinning this wave of unemployment that's hitting China. Beijing's steadfast commitment to its zero-COVID policy cratered the job market. At the same time, Xi's government in 2021 enacted a sweeping regulatory crackdown on the tech sector — an industry where highly-paid positions were once coveted by Chinese job-seekers.

At the same time, some Chinese youths are rebelling against the rat race and pushing back against the idea that they must work "9-9-6" hours.  The term refers to China's "hustle" culture, where people work 12 hours a day from 9 a.m. to 9 p.m., six days a week. Alibaba founder Jack Ma once advocated for this lifestyle, and in 2019 called the 72-hour workweek a "blessing."

In the summer of 2021, scores of Chinese millennials said they were joining the movement to "lie flat" after watching their friends work themselves to death. 

The "lying flat" movement evolved in 2022 into a different, more sinister iteration — "letting it rot." This was a push amongst Chinese youths to not work, and pass one's time in open decay.

For those who want to be active participants in the workforce, civil service jobs continue to be a solid option. In January, some young civil servants told The New York Times that they've settled for civil service jobs because they don't know if they can find better positions in the private sector. 

Amy Liu, who's worked as a clerk for the Beijing city government for six years, told The Times that she is mostly happy at work. But Liu was irritated when her bosses in the municipal government roped her in to manage crowds at the city's COVID-19 testing sites every week, for three years.

"My parents think it's good to be a civil servant," Liu told The Times. "They think I should never leave."

Read the original article on Business Insider

from Business Insider https://ift.tt/Qo6LODR

Flip phones had a glow-up, but Gen Zers say they're not catching the vibe

Costfoto/Future Publishing via Getty Images

• Tech-savvy Gen Zers don't seem too hyped about the latest foldable phones.
• One Gen Zer said flip phones cost too much. Another, who owned one, said it was "just a smartphone."
• Foldable phones have come late to the smartphone market, a Gartner analyst said.

Gen Zers are considered to be tech-loving, phone-addicted. But this age group, born between 1997 and 2015, appears unfazed by the latest foldable phones.

Over the past few years, flip phones have had a glow-up. What used to be a '90s-style cellphone with a small screen and keypad is now a sleek device with glass that bends in half. And the refresh seems to be taking the smartphone world by storm.

SSPL/Getty Images/Kate Duffy/Insider

The foldable-phone category is the fastest-growing on the market, according to data Counterpoint published in August.

Samsung is leading the trend, accounting in June for 62% of the global foldable-smartphone market, followed by Huawei and Oppo, according to the data. Counterpoint estimated in December that foldable-phone shipments would hit more than 22 million units this year — a 52% increase year on year.

Advertisements of the latest flip phones regularly flash up on television, flood the billboards in public places, and appear in pop-up stores in malls for passersby to play with. But what do Gen Zers think about the devices?

Flip phones aren't cheap

Kate Duffy/Insider/CFOTO/Future Publishing via Getty Images

Kelly McKeon, a 24-year-old from New York, told Insider she had an old-style flip phone when she was in middle school but now used an iPhone. When the latest foldable phones launched, McKeon said she thought the screen folding in half seemed like a "supercool tech" feature. But she's not interested in buying one, and the high prices have put her off, she said.

Foldable phones are some of the most expensive smartphones on the market, Ranjit Atwal, an analyst at the management consultancy Gartner, said.

For example, Samsung's Galaxy Z Fold4 with 1 terabyte of storage is $1,815, while Oppo's Find N2 Flip costs $1,024 and Huawei's Mate X, launched in 2019, has a whopping $2,600 price tag.

"People aren't thinking about spending at this moment in time," Atwal told Insider, especially not those on a budget, such as frugal Gen Zers.

Foldable-phone makers need sales volume before they start to try and bring down prices, Atwal said. That's why there's a big drive for advertising them, he added.

Counterpoint's research predicted foldable-phone prices would drop this year because of increasing competition in the market.

A spokesperson for Huawei said it didn't have access to market research around Gen Z's uptake of the company's foldable phones. They referred Insider to a GizChina report that cited data from iResearch Consulting, which said Huawei was the biggest foldable-phone seller in China.

Samsung and Oppo didn't immediately respond to a request for comment.

'Just a smartphone'

Samsung

Stephanie Elliot, 23, told Insider she switched from a Samsung Galaxy S8+ to a Samsung Galaxy Z Flip3 about four years ago. The foldable phone fits nicely in her pocket, and she likes that the screen is protected.

"The flip was the only appeal of this phone," Elliot said, adding: "It's just a smartphone."

Elliot said "flex mode" — the ability to split apps on two different screens — was "far less useful" than expected.

According to screenshots she sent to Insider, WhatsApp video calls and YouTube videos take up only the top screen, which she called an "inefficient use of space." Elliot said flex mode worked well while using the camera but was "not suitable for most apps" because her phone's "tall and skinny."

Foldable phones are late to the party

They've been around for nearly 30 years, but flip phones have "missed the boat" in the mass market, Atwal said.

Earlier in the COVID-19 pandemic, young people changed the way they bought phones, he said. Instead of reaching the end of a phone contract and ordering another one, they kept hold of their phones because they'd realized they had all the software they needed.

This, and the fact that foldable phones are pricey, has presented an issue for their manufacturers, Atwal said. The companies are trying to "push something new in a market in which people are reluctant to hold on," he added.

McKeon, the Gen Zer from New York, said despite her disinterest in foldable phones, "it is fun to think about ending a tense phone call by slamming the phone closed."

Read the original article on Business Insider

from Business Insider https://ift.tt/8AgU2pm

Credit Suisse was losing the faith of investors long before the SVB debacle. Here's why the situation came to a head this week.

Credit Suisse's stock is plunging as investors fear a banking crisis.

AP Photo/Schalk van Zuydam

• Credit Suisse shares tumbled more than 25% on Wednesday as fears grew of a banking crisis.
• The scandal-hit lender is feeling the pain after its biggest shareholder said it won't provide any more financial support.
• Here's a closer look at why Credit Suisse is worrying investors.

Credit Suisse shares tumbled more than 25% to a record low on Wednesday after the banking giant's biggest shareholder said it won't provide any more financial help. The timing couldn't be worse as investor fears mount that recent pressure on banks could herald another financial crisis, following the collapse of Silicon Valley Bank.

Presented below a closer look at the European lender's troubles, and why it's now fending off questions about its stability.

Why is Credit Suisse under fire right now?

Credit Suisse shares tanked Wednesday after its biggest shareholder, Saudi National Bank, warned it wouldn't be able to invest more cash without raising its stake above the regulatory limit of 10%.

Fallout from the comments hit the shares of Deutsche Bank, UBS, and its other European peers. Credit Suisse CEO Ulrich Koerner has also faced questions about his plans to cut costs, staunch losses, and turn around his company.

But investors were showing signs of losing faith long before the Saudi comments, and before the SVB collapse rattled the entire banking industry.

Harris Associates, Credit Suisse's No. 1 investor as recently as last year, exited its entire stake in the embattled Swiss bank over the past few months. The Chicago-based investment management firm owned about 10% of the Swiss bank's stock as of August last year, but slashed its exposure to 5% in January. More recently, Harris reportedly cut its holdings in the lender to zero.

"There is a question about the future of the franchise. There have been large outflows from wealth management," David Herro, Harris Associates' deputy chairman and chief investment officer, was cited by the Financial Times as saying, in a March 5 report.

SNB's chair, Ammar al-Khudairy, told Reuters that he doesn't see the Saudi's stated lack of support as a problem.

"I don't think they will need extra money; if you look at their ratios, they're fine," he said, referring to standard measures of a bank's financial health.

Is a banking crisis brewing?

The latest slump in Credit Suisse stock can also be partly explained by recent events in the US banking industry.

Silvergate, a key lender to the cryptocurrency industry, announced it was winding down its operations and liquidating its assets last Wednesday.

Silicon Valley Bank, a major player in the venture-capital ecosystem, was overwhelmed by a wave of withdrawals and taken over by the Federal Deposit Insurance Corporation (FDIC) on Friday. 

The FDIC revealed on Sunday it had taken control of Signature Bank as well. Moreover, it announced that under a "systemic risk exception," it would fully guarantee both banks' deposits, beyond the usual limit of $250,000 per account.

SVB ran into trouble because it invested some of its clients' deposits in long-dated bonds. Those plunged in price as the Federal Reserve hiked interest rates from nearly zero to upwards of 4.5% over the past 12 months in response to inflation hitting 40-year highs.

The lender sold its bond portfolio at a nearly $2 billion loss last week, and launched a capital raise to reinforce its finances. Its scramble for cash stoked concerns about SVB's stability among VCs and their portfolio companies, sparking a wave of withdrawals that overwhelmed the bank and spurred the FDIC to intervene.

 

SVB's collapse has fueled worries that other banks are carrying heavy losses on their bond portfolios, as rates have jumped in both the US and Europe.

Investors may also be bracing for further bank runs that could topple lenders, especially as a one-two punch of historic inflation and soaring rates squeezes consumers and businesses, and companies brace for a potential global recession.

Credit Suisse bond risk is rising

There appears to be growing concern that Credit Suisse might default on its debts, based on the soaring cost of insuring the bank's bonds. Traders saw prices on one-year senior credit-default swaps as high as 1,200 basis points on Wednesday, making them several times more expensive than other banks' CDS, Bloomberg reported.

Both Michael Burry of "The Big Short" fame, and billionaire investor John Paulson, used CDS to short the mid-2000s housing bubble that preceded the financial crisis. Moreover, a key moment at the start of the Great Recession was the collapse of Lehman Brothers, one of the largest US investment banks.

There's no clear reason to believe Credit Suisse is at risk of failure. But its checkered past, plunging stock, soaring CDS prices, the recent string of bank failures, and previous cases of lenders collapsing with massive repercussions, appear to be worrying some investors greatly.

A slew of scandals

Here's a quick summary of the controversies that have plagued Credit Suisse in recent years:

• The bank hired private detectives to spy on former executives, leading to the departure of its CEO in February 2020.
• It lost nearly $6 billion in March 2021 after Archeges Capital Management imploded and defaulted on its loans from the Swiss lender.
• It's still working to recover about $2 billion of the roughly $10 billion it had tied up in supply chain finance funds linked to Greensill, which collapsed amid allegations of fraud in March 2021.
• It was fined for making fraudulent loans dubbed "tuna bonds" to Mozambique's government between 2012 and 2016.
• Its chairman was forced to resign in January after an internal investigation found he violated COVID-19 quarantine rules to attend Wimbledon.
• Credit Suisse's previous CEO resigned for personal and health reasons last July.

Read the original article on Business Insider

from Business Insider https://ift.tt/dLv2Yex

Credit Suisse was losing the faith of investors long before the SVB debacle. Here's why the situation came to a head this week.

Credit Suisse's stock is plunging as investors fear a banking crisis.

AP Photo/Schalk van Zuydam

• Credit Suisse shares tumbled more than 25% on Wednesday as fears grew of a banking crisis.
• The scandal-hit lender is feeling the pain after three US banks collapsed last week.
• Here's a closer look at why Credit Suisse is worrying investors.

Credit Suisse shares tumbled more than 25% to a record low on Wednesday as investors feared mounting pressures on banks could herald another financial crisis. Here's a closer look at the European lender's troubles, and why it's now fending off questions about its stability.

A slew of scandals

Here's a quick summary of the controversies that have plagued Credit Suisse in recent years:

• The bank hired private detectives to spy on former executives, leading to the departure of its CEO in February 2020.
• It lost nearly $6 billion in March 2021 after Archeges Capital Management imploded and defaulted on its loans from the Swiss lender.
• It's still working to recover about $2 billion of the roughly $10 billion it had tied up in supply chain finance funds linked to Greensill, which collapsed amid allegations of fraud in March 2021.
• It was fined for making fraudulent loans dubbed "tuna bonds" to Mozambique's government between 2012 and 2016.
• Its chairman was forced to resign in January after an internal investigation found he violated COVID-19 quarantine rules to attend Wimbledon.
• Credit Suisse's previous CEO resigned for personal and health reasons last July.

Is a banking crisis brewing?

The latest slump in Credit Suisse stock can partly be explained by recent events in the US banking industry.

Silvergate, a key lender to the cryptocurrency industry, announced it was winding down its operations and liquidating its assets last Wednesday.

Silicon Valley Bank, a major player in the venture-capital ecosystem, was overwhelmed by a wave of withdrawals and taken over by the Federal Deposit Insurance Corporation (FDIC) on Friday. 

The FDIC revealed on Sunday it had taken control of Signature Bank as well. Moreover, it announced that under a "systemic risk exception," it would fully guarantee both banks' deposits, beyond the usual limit of $250,000 per account.

SVB ran into trouble because it invested some of its clients' deposits in long-duration bonds. Those plunged in price as the Federal Reserve hiked interest rates from nearly zero to upwards of 4.5% over the past 12 months in response to inflation hitting a 40-year high.

The lender sold its bond portfolio at a nearly $2 billion loss last week, and launched a capital raise to reinforce its finances. Its scramble for cash stoked concerns about SVB's stability among VCs and their portfolio companies, sparking a wave of withdrawals that overwhelmed the bank and spurred the FDIC to intervene.

SVB's collapse has fueled worries that other banks are carrying heavy losses on their bond portfolios, as rates have jumped in both the US and Europe.

Investors may also be bracing for further bank runs that could topple lenders, especially as a one-two punch of historic inflation and soaring rates squeezes consumers and businesses, and companies brace for a potential global recession.

Why is Credit Suisse under fire?

Credit Suisse shares tanked Wednesday after its biggest shareholder, Saudi National Bank, warned it wouldn't be able to invest more cash without raising its stake above the regulatory limit of 10%.

SNB's chair, Ammar al-Khudairy, told Reuters that he didn't see that as a problem.

"I don't think they will need extra money; if you look at their ratios, they're fine," he said, referring to standard measures of a bank's financial health.

However, the prospect of limited help from the Saudis appears to have hammered Credit Suisse's stock price, and hit the shares of Deutsche Bank, UBS, and its other European peers. Credit Suisse CEO Ulrich Koerner has also faced questions about his plans to cut costs, staunch losses, and turn around his company.

Harris Associates, Credit Suisse's No. 1 investor as recently as last year, exited its entire stake in the embattled Swiss bank over the past few months. The Chicago-based investment management firm owned about 10% of the Swiss bank's stock as of August last year, but slashed its exposure to 5% in January. More recently, Harris reportedly cut its holdings in the lender to zero.

"There is a question about the future of the franchise. There have been large outflows from wealth management," David Herro, Harris Associates' deputy chairman and chief investment officer, was cited by the Financial Times as saying, in a March 5 report.

Credit Suisse bond risk is rising

There appears to be growing concern that Credit Suisse might default on its debts, based on the soaring cost of insuring the bank's bonds. Traders saw prices on one-year senior credit-default swaps as high as 1,200 basis points on Wednesday, making them several times more expensive than other banks' CDS, Bloomberg reported.

Both Michael Burry of "The Big Short" fame, and billionaire investor John Paulson, used CDS to short the mid-2000s housing bubble that preceded the financial crisis. Moreover, a key moment at the start of the Great Recession was the collapse of Lehman Brothers, one of the largest US investment banks.

There's no clear reason to believe Credit Suisse is at risk of failure. But its checkered past, plunging stock, soaring CDS prices, the recent string of bank failures, and previous cases of lenders collapsing with massive repercussions, appear to be worrying some investors greatly.

Read the original article on Business Insider

from Business Insider https://ift.tt/dg3z7J1

A Detroit man paid just $3,300 for 2 abandoned homes and transformed them for his family to live in. See inside the impressive renovation.

Vincent Orr in front of his newly renovated home in Detroit.

Detroit Land Bank Authority

• In June 2017, Vincent Orr won an abandoned home from the Detroit Land Bank Authority for just $2,100.
• In 2019, he purchased a second vacant home from the DLBA for $1,200. 
• Orr transformed both homes into livable spaces with only $100,000.

You can become a homeowner in Detroit, Michigan, for as little as $1,000 — but it'll take a lot of work.

The Detroit Land Bank Authority, founded in 2008, set out on a mission to return run-down and vacant properties in the city to productive use. To do so, it auctions off thousands of publicly owned properties through its public platform, Auction — and the bidding starts at $1,000.

In 2017, Vincent Orr, 33, a native Detroiter, won a home for his mother through Auction for $2,100 — and that was just the beginning of his adventures in real estate.  While Orr had the highest bid, claiming full ownership of the home required some work. 

The DLBA has a compliance program requiring winning bidders to renovate the auctioned homes. After the home is renovated, a compliance officer deems the home livable or not. If it is, complete ownership is transferred to the bidder.

It took Orr nine months and $40,000 to renovate the property. However, he learned so much that he's become a bonafide home flipper, in a priceless consequence of the project. 

In 2019, he purchased a second vacant home from the DLBA. The home, which sits next door to his mother's, cost him only $1,200.

While Orr is currently leasing the home to a family member, he is still renovating the property. He has spent $60,000 refurbishing the home and making it habitable, and anticipated at least $5,000 more for repairs.

"COVID-19 put a little damper on the project because material prices increased," Orr said. "I prolonged a few things like concrete work and putting up a wooden fence, but those are things that I plan on doing this summer."

In an interview with Insider, Orr explained how he transformed both spaces with just $100,000. Keep reading for a side-by-side look at their transformations. 

Do you have a similar story you'd like to share with Insider? Get in touch with reporter Alcynna Lloyd at alloyd@insider.com.

This story, originally published in 2019, was updated in March 2023.

Detroit, Michigan, was once home to the booming auto industry.

Google Maps

In the 1950s, the auto industry started declining and companies started moving out of Detroit. By the 1960s, people were leaving Detroit in droves.

In 2013, the city filed for Chapter 9 bankruptcy protection. Since then, numerous programs have sought out different ways to improve the city.

Wealthy entrepreneurs are investing in the city too, like Dan Gilbert, the billionaire founder of Quicken Loans. As Insider previously reported, after Gilbert moved his company to downtown Detroit in 2010, he started the real-estate firm Bedrock.

Not only is Quicken Loans one of Detroit's largest employers and taxpayers, but since its founding in 2011, Bedrock and its affiliates have invested and committed more than $5.6 billion to acquiring and developing more than 100 properties in Detroit and Cleveland.

Homes on the DLBA's Auction platform come with everything from property-condition reports to free tours before auction dates. There are no hidden fees or credit checks, and all the title work is done before the home is listed. The DLBA even protects homeowners from inheriting back taxes or outstanding bills on the property.

Michael S. Williamson/The Washington Post via Getty Images

The DLBA joins a host of other organizations and people working to revitalize Detroit.

In June 2017, Vincent Orr purchased this home for his mother through the Detroit Land Bank Authority's daily auction. It cost him $2,100.

Detroit Land Bank Authority

Orr, a native Detroiter, grew up in the same ZIP code where he purchased the home, in the northwestern Detroit neighborhood of Fitzgerald.

Orr graduated from Wayne State University with a degree in media arts and is now a global supply chain group leader with General Motors.

"My family roots in this neighborhood run pretty deep," he told Insider. "I wanted to stay around and bring it back to the level that I remember it at when I was a child."

"When I first purchased the house, it was in complete shambles," he said.

The patio before the renovation.

Vincent Orr/Facebook

According to the neighbors, the home had been vacant for about 10 years, Orr said.

He told Insider that the porch was torn up, the windows were missing, and the roof was caving in.

It wasn't just the exterior of the home Orr had to worry about — the interior needed work too. The upgrading process included, among many other steps, replacing pipes and walls.

Pre-renovation.

Vincent Orr/Facebook

When the home was purchased, the cabinets in the kitchen were worn down and dirty, with parts missing.

The kitchen before the renovation.

Vincent Orr/Facebook

Orr was able to do most of the work himself.

The pre-renovation bathroom.

Vincent Orr/Facebook

All in all, Orr spent $40,000 over the nine-month renovation process.

Vincent Orr/Facebook

He installed all the windows, all the doors, and the furnace.

Vincent Orr/Facebook

He also handled the plumbing work and the electrical wiring.

Vincent Orr/Facebook

Orr hired workers only when it came time to install the ductwork for a forced-air central heating system and to repair the roof.

Vincent Orr/Facebook

The hardest part of the process was finding contractors, Orr said. Though he did most of the work himself, things like finding a roofing company turned out to be more difficult than he expected.

He even renovated the kitchen himself.

The kitchen before it was renovated.

Vincent Orr/Facebook

Now the renovated space sports white cabinets, marble countertops, and new appliances.

The renovated kitchen.

Vincent Orr/Facebook

Orr said that checking in with the DLBA went smoothly. To keep the organization up to date, Orr sent images of the home throughout the renovation.

Vincent Orr/Facebook

"For the final inspection, they didn't have to come out, because I documented everything with photographs and sent it to them," Orr said. "They had been following the process along the way."

"You have to show them evidence of the house being occupied, so you show them furniture in the living room, furniture in the bedrooms, and appliances in the kitchen," Orr added.

As soon as the home was completed, Orr's mother was able to move in.

Vincent Orr/Facebook

His mother's home wasn't the only property transformed on the block. DLBA's program has  gained a lot of media attention, encouraging more development in the neighborhood. 

"I started receiving phone calls from all over the country," Orr said. "I had news crews flying in from New York City and I even did a lead abatement commercial with the state of Michigan." The recognition has exacerbated gentrification in the community, he said. 

According to Orr, as more homes on the block are renovated and transformed into luxury properties, new buyers are moving in, inventory is declining and property values are increasing.

"A lot of money is going into the neighborhood," he added, "There are houses with new roofs, trees, windows, and updated mechanicals. In my particular area, there are not many houses for sale." 

In 2019, before the neighborhood was transformed, Orr purchased a second vacant home from the DLBA.

Courtesy of Vincent Orr

He got the home, which sits next door to his mother's property, for $1,200 through a blind bid. 

Prior to Orr's purchase, it was badly damaged in a fire. What was left of the home was exposed to the elements and thieves who ransacked everything from its meter box to the garage door. 

"I had to install the drop meter so a utility company could even hook up the house," he said. "Once that was completed, the home became a smart house controlled by Google."

Orr Installed a new garage door that came with a smart controller. The project cost him $4,000.

Courtesy of Vincent Orr

Orr said that he had to replace the front and back doors that were stolen, as well as the patio's walls.

Courtesy of Vincent Orr

Doors weren't the only loot that the thieves absconded with. Parts of the plumbing system were missing, too.

Courtesy of Vincent Orr

"The house was vacant for decades and scrappers came in and cut out copper," he said. "So I had to call a plumbing company to replace service lines."

 

One of Orr's biggest projects for the home was transforming the patio into a functioning office space.

Courtesy of Vincent Orr

"The patio was a shell but it had structure," he said. "I redesigned it by framing and measuring the other windows in the house and matching the sizes. I also  added a patio door."

While the home's renovation is not yet complete, it is livable. In fact, Orr is leasing the home for $1,200 per month to a family member while he fixes it up.

Courtesy of Vincent Orr

Orr intends to add a private fence to the home, as well as a new walkway leading up to its porch.

When the home is completed, Orr plans on moving on to his next project — an empty lot opposite his mother's home that he purchased for only $100.

Courtesy of Vincent Orr

The lot once had a decaying home on the property, but Orr petitioned the city and the DLBA to tear it down. Once the home was demolished, he purchased the lot for $100. 

Being the owner of these three properties is a big deal for Orr because he wants to leave a legacy for his family.

Courtesy of Vincent Orr

"I don't have any children yet but I do plan on having some one day," he said. "I want them to know they will be able to inherit property." 

"I'm three generations removed from slavery," Orr added. "My great, great grandfather was born in the 1860s. Being able to own multiple properties honors those in my family that couldn't own anything."

Read the original article on Business Insider

from Business Insider https://ift.tt/LidO6BU

California Gov. Gavin Newsom failed to publicly disclose his SVB ties while lobbying for a bailout

President Joe Biden, right, greets California Gov. Gavin Newsom after arriving at Los Angeles International Airport to attend the Summit of the Americas in Los Angeles on June 8, 2022.

AP Photo/Evan Vucci

• California Gov. Gavin Newsom reportedly had substantial personal ties to Silicon Valley Bank.
• Reports link Newsom to the bank through personal accounts, three wineries, and his wife's charity.
• California law bans officials from influencing decisions in which they have "a financial interest."

California Gov. Gavin Newsom lobbied the White House and the Department of the Treasury about the pending bailout of Silicon Valley Bank, even as three of his private wineries had apparently been among the bank's clients, according to a Tuesday report by Ken Klippenstein of the Intercept.

According to Klippenstein's reporting, Newsom's personal relationship with SVB went beyond the wineries. One anonymous former employee who handled Newsom's finances told Klippenstein that Newsom "maintained personal accounts at SVB for years."

It is unclear whether those personal accounts were still active at the time of the bank's collapse last week. If they were, Newsom could have stood to benefit directly from the Biden administration's rescue package, which will reimburse SVB account holders even if their balances surpass the $250,000 limit insured by Federal Deposit Insurance Corporation.

On Saturday, Newsom's office issued a statement that Newsom had "been in touch with the highest levels of leadership at the White House and Treasury." He said the goal was to "stabilize" "the entire innovation ecosystem that has served as a tent pole for our economy."

The following day, Newsom praised the administration for acting "swiftly and decisively." Again, there was no mention of his own ties to the bank. Instead, Newsom expressed gratitude on behalf of "small businesses that can now make payroll, workers who will get their paychecks," and "non-profits that can keep their doors open tomorrow."

Newsom's wife, Jennifer Siebel Newsom, happens to be the co-founder of one of those non-profits, California Partners Project. SVB reportedly donated $100,000 to that charity. The former bank's president is listed as one of the charity's board members.

The son of an attorney for the Getty Oil dynasty, Newsom's fundraising prowess and deep ties to California Democrats have put him in the first tier of the party's future presidential contenders. But as Newsom's national profile has grown, his privileged background has emerged as a potential Achilles' heel with voters. During the pandemic, he was photographed dining maskless with a large group of lobbyists at the French Laundry, an exclusive Napa Valley restaurant where foodies pay upwards of $300 a plate. He apologized, and claimed that the seating was outdoors.

Newsom has not discussed his personal ties to SVB publicly. It is unclear whether he disclosed them to the White House or Treasury during his contacts with the administration over the weekend. 

As an elected official, Newsom is prohibited by state law from influencing a governmental decision "in which the official knows or has reason to believe the official has a financial interest."

Nathan Click, a spokesperson for Newsom, told Insider that Newsom's "business and financial holdings are held and managed by a blind trust," and have been since he was elected governor in 2018. Click did not respond to detailed questions about the Intercept's reporting on Newsom's SVB ties. 

Spokespeople for the White House and California Partners Project did not immediately return Insider's requests for comment.

Read the original article on Business Insider

from Business Insider https://ift.tt/0pq9Lxl

The unintended consequences of remote work

It's Tuesday, readers. I'm Paayal Zaveri, a senior reporter for Insider's tech analysis team, filling in for my colleague Diamond Naga Siu. 

Yesterday marked three years since the US government declared a national emergency around the COVID-19 outbreak. To say time flies is an understatement — our lives have changed so much over the last three years.

Take, for example, remote work.

While remote work offers flexibility, it often comes at the cost of maintaining a work-life balance. Don't fret, though. There are solutions underway. 

I found this essay from a remote-work coach, where she shares her tips for avoiding burnout as a remote worker, particularly helpful. Architects are now even designing homes to help remote workers find a work-life balance, Insider's Stephanie Stacey reports. 

Remote work has also made it possible to hire anyone anywhere, which CEOs and hiring managers are starting to realize. That's exactly what I took a look at in our first story today.

Let's get started.

---

If this was forwarded to you, sign up here. Download Insider's app here.

---

Tech companies are offshoring jobs, due to America's broken immigration system, and remote work is making it easier.

Getty Images; Alyssa Powell/Insider

1. American tech companies are offshoring jobs, but it isn't all because of remote work. In fact, remote work has just been a facilitator. The real culprit behind this trend is likely America's broken immigration system.

• Experts told me America's tech industry has moved many jobs offshore to countries including India, Canada, the United Kingdom, and Australia in the last few years. 
• As it becomes harder to bring tech talent into the US, companies are hiring in other countries, and opening branch offices there, staffing them with people who might otherwise have come to the US to work, the experts say. 
• So while offshoring jobs to countries where workers command lower wages is nothing new for American businesses, it seems like that's just part of the story. 
• With the difficult immigration processes in the US and the popularity of remote work, we can expect more companies to continue offshoring jobs and hiring overseas, experts told me. 

Read more about what's driving US tech companies to hire overseas here.

---

In other news:

AI tools like ChatGPT will reshape our economy and lives, but we need checks and balances.

Getty

2. This is AI's make-or-break moment. Tools like ChatGPT are barely scratching the surface of AI's potential. We could see it fundamentally reshape our economy and lives, but we need to make sure it's safe, Insider's Hasan Chowdhury reports. Dive into the debate over AI here.

3. Startup founders are reeling from the Silicon Valley Bank implosion. Founders are rushing to find a new home for their money. They're going everywhere from big banks like JPMorgan to neobanks like Brex. Here's why the fallout will change how startups store cash.

4. More CEOs weigh in on the "fake work" debate. As big tech firms like Google and Meta are accused of hiring people to do "fake work," tech leaders are debating what constitutes real work. The CEO of C3.ai, Thomas Siebel, chimed in. He says remote work led to all of this in the first place.

5. Why the SVB crisis will change the banking industry forever. Unlike other bank runs, SVB's collapse was the first in history to be quickly escalated through social media. According to one former federal regulator: "The whole system needs to be looked at differently." The full story.

6. Google employees test a smarter chatbot. Many Google employees have gotten the chance to test out "Big Bard," a superior version of its Bard chatbot. A version of Bard will ultimately take on OpenAI's ChatGPT. Here's why Google wants to launch a limited version of Bard first. 

7. The next step for OpenAI: turning text into video. A Microsoft exec said OpenAI's new model will be released this week, and GPT-4 will be able to turn text into video. Of note: that is already something that Google and Meta AI can each do. Read more about the upcoming release.

8. TikTok creators love the new paywall feature. TikTok is testing new ways for creators to make money on the app, after some said they haven't earned as much as other platforms. Specifically, it's a new feature that allows creators to charge users for specific videos. Here's how some are approaching it. 

---

Odds and ends:

The Tesla Model X Plaid, Ferrari SF90 Stradale, and Lamborghini Aventador SVJ.

CarWow Youtube Channel

9. A Tesla SUV gave supercars from Ferrari and Lamborghini a run for their money. A Tesla Model X raced against a Ferrari and Lamborghini in a recent YouTube video from online car-buying marketplace CarWow. The results were too close to call.

10. SVB merch up for sale. After Silicon Valley Bank's collapse on Friday, items featuring the Silicon Valley Bank logo were put up for auction on eBay over the weekend. Some of the items included a cardboard box for $201 and a wine tumbler for $42. Here's what else was listed. 

---

What we're watching today:

• The South by Southwest (SXSW) tech, music, and culture festival continues in Austin, Texas all week. Follow Insider's dispatches from the event here. 

---

Curated by Paayal Zaveri in San Francisco. Edited by Matt Weinberger (tweet @gamoid) in San Francisco and Hallam Bullock (tweet @hallam_bullock) in London.

Read the original article on Business Insider

from Business Insider https://ift.tt/eBRDmir