ReportWire

Tag: Financial services

  • US has warned others to avoid loans from Chinese state banks. But it’s the biggest recipient of all

    WASHINGTON (AP) — For years, Washington has been warning others not to trust loans from Chinese state banks fueling its rise as a superpower. But a new report reveals an ironic twist: The United States is the biggest recipient of all — by far. And the security and technology implications have yet to be fully understood.

    China’s state lenders have funneled $200 billion into U.S. businesses for a quarter of a century, but many of the loans have been kept secret because the money was first routed through shell companies in the Cayman Islands, Bermuda, Delaware and elsewhere that helped obscure their origins, according to AidData, a research lab at the College of William & Mary in Virginia.

    More alarming, much of the lending was to help Chinese companies buy stakes in U.S. businesses, many tied to critical technology and national security, including a robotics maker, a semiconductor company and a biotech firm.

    The report found a far more widespread and sophisticated lending network than previously thought — a web of financial obligations extending beyond developing countries to rich ones, including the U.K., Germany, Australia, the Netherlands and other U.S. allies.

    “China was playing chess while the rest of us were playing checkers,” said former White House investment adviser William Henagan, who worries the hidden lending has given China a chokehold on technologies. “Wars will be won or lost based on whether you can control products critical to running an economy.”

    China money gets a closer look

    While the U.S. still welcomes most foreign investment — and President Donald Trump has courted it — money from China has drawn particular scrutiny as the world’s two biggest economies with opposing ideologies battle for global supremacy.

    Deals financed by China’s state-owned banks, the ones studied in the AidData report, are especially problematic. The lenders are controlled by China’s central government and the Communist Party’s Central Financial Commission, and they are directed to advance China’s strategic goals.

    In total, the AidData report found China lent more than $2 trillion from 2000 through 2023 around the world, double the highest previous estimates and a surprise to even longtime analysts of China’s rise. And much of the lending to wealthy countries was focused on critical minerals and high-tech assets — rare earths and semiconductors needed for fighter jets, submarines, radar systems, precision-guided missiles and telecom networks.

    “The U.S., under both (former President Joe) Biden and Trump, have been beating this drum for more than a decade that Beijing is a predatory lender,” said Brad Parks, executive director of AidData. “The irony is very rich.”

    Shell games

    Until now, a full accounting of China’s state lending has never been published because much of the financing is buried beneath layers of secrecy, masked by Western-sounding shell companies and mislabeled by international databases as ordinary private financing.

    “There is a complete lack of transparency that speaks to the lengths to which China goes, whether through shell companies or confidentiality agreements or redactions, to make it extremely difficult to come up with this full picture,” said Scott Nathan, the former head of the U.S. International Development Finance Corp., an agency set up in the first Trump term to invest in foreign projects deemed in the U.S. national interest.

    Since the report’s last documented loan in 2023, U.S. scrutiny has gotten better. Screening mechanisms, such as the interagency Committee on Foreign Investment in the U.S., got beefed up in 2020 to protect sensitive sectors in the economy.

    But China has gotten better, too, in part by setting up banks and branches overseas — more than 100 in recent years — that then lend to offshore entities, further clouding the origins of the money.

    “In places where there are more cops on the beat,” Parks said, “it has found ways to work around barriers to entry.”

    Where the loans ended up

    Chinese state bank financing has touched projects across the U.S., particularly in the Northeast, the Great Lakes region, the West Coast and along the Gulf of Mexico, which Trump has renamed the Gulf of America. Many loans targeted critical high-tech industries, according to the report.

    — In 2015, for instance, Chinese state-owned banks lent $1.2 billion to a private Chinese business to buy an 80% stake in Ironshore, a U.S. insurer whose clients included the Central Intelligence Agency and Federal Bureau of Investigation officials and undercover agents who might need help paying legal bills in case they got into trouble in their jobs.

    U.S. regulators were unaware of the Chinese government involvement because the financing was funneled through a Cayman Island business with no obvious ties to China, according to the report. U.S. officials later realized the Chinese government could access information and ordered the Chinese buyer to divest.

    — That same year, the Chinese government published “Made in China 2025,” a list of 10 high-tech areas, such as semiconductors, biotechnology and robotics, where it wanted to reach 70% self-sufficiency within a decade. The next year, in 2016, the Export–Import Bank of China, a policy bank, provided $150 million in loans to help a Chinese company buy a robotics equipment company in Michigan.

    After China’s adoption of the manufacturing master plan, the percentage of projects targeting sensitive sectors such as robotics, defense, quantum computing and biotechnology rose from 46% to 88% of China’s portfolio for cross-border acquisition lending, according to AidData.

    — In 2017, a Delaware private equity firm using a Cayman Islands company tried to buy a U.S. chip maker; the deal was blocked when investigators discovered both companies were owned by a Chinese state-owned enterprise. That same Delaware company successfully bought a U.K. semiconductor maker that had to be divested when British authorities found out.

    — And in 2022, the U.K. forced a Chinese company to divest another sensitive British firm in the industry, a designer of chips in Apple phones but potentially adaptable for military systems. The Chinese company had bought it through a company in the Netherlands that they owned. That Dutch firm is now accused of withholding semiconductors vital to automakers in the U.S.-China trade war.

    Following the money

    To trace China’s hidden lending, AidData dug through regulatory filings, private contracts and stock exchange disclosures in more than 200 countries written in multiple languages.

    The effort to track China’s state loans and investment started more than a decade ago when Beijing launched its Belt & Road Initiative to build infrastructure in developing countries. The project expanded sharply three years ago when the AidData team, which eventually grew to 140 researchers, realized many of the loans were landing in advanced economies such as the U.S., Australia, the Netherlands and Portugal, where acquisitions could allow it to access technology that Beijing considers essential to its global rise.

    The report says the findings show a shift in the use of state credit from promoting economic development and social welfare to gaining geo-economic advantages.

    “There’s global concern that this is part of a concerted effort to gain control over economic chokepoints and use this leverage,” said Brad Setser, an adviser to the U.S. Trade Representative in the Biden administration. “It’s important that we understand what they’re doing, and they don’t make it easy.”

    ___

    Condon reported from New York.

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  • 2 Federal Reserve officials oppose an interest rate cut in December

    WASHINGTON — Two Federal Reserve officials expressed opposition Wednesday to another interest rate cut at the central bank’s next meeting in December, further muddying the outlook for the Fed’s next steps.

    The remarks by Susan Collins, president of the Federal Reserve Bank of Boston, and Raphael Bostic, president of the Atlanta Fed, suggest that the central bank’s rate-setting committee could be tilting against what had been an expected third straight cut next month.

    The officials cited several reasons for keeping rates unchanged, after a reduction in September and in October. They argued that inflation is stubbornly elevated and has been above the Fed’s 2% target for nearly five years, while the economy is resilient and doesn’t appear to need more rate cuts. The job market is stumbling, with hiring nearly at a standstill, but layoffs still seem muted, they said.

    Another factor has been the government shutdown, which has cut off the economic data the Fed relies on to discern the economy’s path. On Wednesday White House spokeswoman Karoline Leavitt said that the jobs and inflation reports for October would likely never be released.

    “Formulating an economic outlook is challenging — and the limited data compounds the difficulty,” Collins said in a speech in Boston.

    “It will likely be appropriate to keep policy rates at the current level for some time … in this highly uncertain environment,” she added.

    That is a shift from her previous speech in October, when she expressed support for at least one more rate cut.

    Earlier Wednesday, Bostic said he remains concerned inflation is too high, and added that, “I … favor keeping the funds rate steady until we see clear evidence that inflation is again moving meaningfully toward its 2% target.” Bostic said earlier Wednesday that he will retire when his current term ends on Feb. 28, 2026.

    Their remarks come at an unusually challenging time for the Fed, with the economy facing both weak hiring and elevated inflation. Typically, the Fed would reduce its rate to encourage borrowing, spending and job gains, while it would keep it unchanged — or even raise it — to combat inflation.

    The 19 officials on the Fed’s rate-setting committee narrowly supported three rate cuts this year at their September meeting, but Chair Jerome Powell said at a news conference late last month that the committee remains divided and another cut in December was not a “foregone conclusion.”

    David Seif, chief economist for developed markets at Nomura Securities, expects the Fed will skip a rate cut in December and won’t reduce borrowing costs again until March.

    “There is a large segment of the Fed that is uncomfortable with a December cut,” Seif said.

    Collins also said that additional reductions to the Fed’s rate could, by boosting the economy, accelerate inflation.

    “Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,” she said.

    Bostic, meanwhile, said the Atlanta Fed’s surveys of businesses show that many companies intend to raise prices next year, a sign that inflation may not cool anytime soon.

    “We cannot breezily assume inflationary pressures will quickly dissipate after a one-time bump in prices from new import duties,” Bostic said, referring to President Donald Trump’s tariffs. “Across all our information sources, I see little to no evidence that we should be sanguine about the forward trajectory of inflation.”

    Some Fed officials, such as Fed governor Stephen Miran, have argued that the tariffs will only temporarily lift prices and outside those one-time increases, inflation is cooling.

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  • Bessent Says ‘Tenfold’ Growth in Stablecoins Will Lift Demand for Treasurys

    Bessent Says ‘Tenfold’ Growth in Stablecoins Will Lift Demand for Treasurys

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  • Consumer sentiment tumbles close to record lows in latest U Michigan survey

    NEW YORK — Consumer sentiment dropped to a three-year low and close to the lowest point ever recorded by the University of Michigan one month into the government shutdown, with pessimism over personal finances and anticipated business conditions weighing on Americans.

    The November survey showed the index of consumer sentiment at 50.4, down a startling 6.2% from last month and it plunged nearly 30% from a year ago.

    Economists were caught off guard. Those polled had expected a slight month-to-month increase for a reading of 54.2.

    “With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy,” said Joanne Hsu, Surveys of Consumers Director at University of Michigan. “This month’s decline in sentiment was widespread throughout the population, seen across age, income, and political affiliation.”

    The one exception, Hsu said, were those with large stock holdings. Big tech companies, particularly in artificial intelligence, have driven explosive returns for investors. The tech-heavy Nasdaq is up 17% this year.

    “The top 20% of households by income drive 40% of consumer spending, and we think the wealth effect from the buoyant stock market has strengthened this year,” according to Michael Pearce, deputy chief U.S. economist at Oxford Economics.

    The nation’s largest retail trade group on Thursday forecast a trillion-dollar Christmas, with sales during November and December seen growing up to 4.2%.

    The UMich survey showed that year-ahead inflation expectations inched up to 4.7% in November from 4.6% last month, and long-run inflation expectations declined to 3.6% from 3.9% last month.

    James Knightley, chief international economist at ING, said the report’s key takeaway is jobs.

    “Seventy-one percent of households now expect unemployment to rise over the coming (12 months) while only 9% expect unemployment to fall. That gives a net reading of 62% predicting higher unemployment versus 52% last month,” Knightley said. “A huge increase which … has historically been the prelude to an ugly outcome for jobs.”

    The first Friday of the month is typically when the government releases its key jobs report, but all data reports are on hold during the shutdown. Economists have turned to private sources which are showing that job seekers are taking longer to land a job in a ” low hires, low fires ” market.

    At least one economist noted a change in methodology may have impacted the survey results.

    “These numbers should be taken with a grain of salt, given the likely temporary drag on confidence from the ongoing government shutdown, plus the Michigan survey’s switch to online rather than phone-based sampling last year, which seems to have introduced a structural break that produces more downbeat results,” said Oliver Allen, senior U.S. economist for Pantheon Macroeconomics.

    The UMich survey was conducted before Election Day on Tuesday.

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  • Big Tesla investor will vote against Musk’s massive pay package

    Norway’s sovereign wealth fund, one of Tesla’s biggest investors, said Tuesday that it will vote against a proposed compensation package that could pay CEO Elon Musk as much as $1 trillion over a decade.

    There will be more than a dozen company proposals up for a vote Thursday during Tesla’s annual meeting, but none have generated more division than Musk’s potentially massive pay package.

    “While we appreciate the significant value created under Mr. Musk’s visionary role, we are concerned about the total size of the award, dilution, and lack of mitigation of key person risk consistent with our views on executive compensation,” said Norges Bank Investment Management, which manages the country’s Government Pension Fund Global. “We will continue to seek constructive dialogue with Tesla on this and other topics.”

    The fund has a 1.16% stake, the sixth largest holding among institutional investors.

    AP AUDIO: Big Tesla investor will vote against Musk’s massive pay package

    A proposed compensation package is getting a lot of attention ahead of Tesla’s annual meeting. AP correspondent Mike Hempen reports.

    Baron Capital Management, which holds about 0.4% of Tesla’s outstanding shares said Monday that it will vote in favor of the compensation package.

    “Elon is the ultimate “key man” of key man risk. Without his relentless drive and uncompromising standards, there would be no Tesla,” wrote founder Ron Baron. “He has built one of the most important companies in the world. He’s redefining transportation, energy and humanoid robotics and creating lasting value for shareholders while doing it. His interests are completely aligned with investors.”

    Musk is the company’s largest investor, holding 15.79% of all outstanding shares.

    Tesla management has proposed a compensation arrangement that would hand Musk shares worth as much as 12% of the company in a dozen separate packages if the company meets ambitious performance targets, including massive increases in car production, share price and operating profit.

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  • Denny’s to be acquired and taken private in a deal valued at $620 million

    Denny’s said Monday that it’s being acquired by a group on investors in a deal that will take the breakfast chain private.

    Denny’s board unanimously approved the deal, which values Denny’s at $620 million including debt. Denny’s will be purchased by private equity investment company TriArtisan Capital Advisors, investment firm Treville Capital and Yadav Enterprises, which is one of Denny’s largest franchisees.

    Under the agreement, Denny’s shareholders will receive $6.25 per share in cash for each share of Denny’s common stock they own, or a total of $322 million. That represents a 52% premium to Denny’s closing stock price Monday.

    Denny’s shares jumped 47% in after-hours trading Monday.

    Denny’s was founded in 1953 in Lakewood, California, as Danny’s Donuts. The name was changed to Denny’s Coffee Shops in 1959 to avoid confusion with another chain. Denny’s began trading on the New York Stock Exchange in 1969.

    Like many casual chains, Denny’s saw its sales plummet during the COVID pandemic. Once the pandemic eased, it found itself dealing with changing customer dining patterns, including a heavier reliance on delivery. Denny’s has also struggled as newer chains like First Watch promoted healthier breakfast options.

    Last fall, Denny’s said it planned to close 150 of its lowest-performing locations. At the end of the second quarter, Denny’s had 1,558 restaurants worldwide, including 1,422 Denny’s restaurants and 74 Keke’s restaurants. Denny’s acquired the Keke’s brand in 2022.

    Denny’s CEO Kelli Valade said the company reached out to more than 40 potential buyers and received multiple offers. Valade said Denny’s board believed the deal announced Monday was in the best interest of shareholders and the best path forward for the company.

    TriArtisan Co-Founder and Managing Director Rhohit Manocha called Denny’s “an iconic piece of the American dream” with a strong franchise base and loyal customers.

    “We look forward to working with Kelli and the rest of the Denny’s team and franchisees to provide resources and support the Company’s long-term strategic growth plans,” Manocha said in a statement.

    If it’s accepted by Denny’s shareholders, the deal is expected to close in the first quarter of 2026.

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  • Strata Alliance expands services, unveils Strata Foundation | Long Island Business News

    Ronkonkoma-based Strata Alliance, a financial and business advisory firm, has expanded its services and unveiled Strata Foundation – formerly CMM Cares – an organization that gives back to Long Island families in need.

    Founded in 2022, Strata works with business owners and high-net-worth Long Island families to build their legacies with an aligned team to manage capital, legal, tax, mergers and acquisitions, insurance and more, providing a streamlined experience.

    The firm has expanded its offerings to help clients increase business value, pursue alternative partnerships, advance legacy and estate planning, implement comprehensive insurance solutions, support a philanthropic foundation and engage with local business and real estate development opportunities.

    “I founded Strata because I was tired of watching Long Island’s highest performers continuously look outside of Long Island for advice and opportunities,” Joe Campolo, founder and CEO of Strata Alliance, said in a news release about the expanded services and rebrand.

    “At Strata, we don’t chase opportunity; we create it,” he added. “We help families build their legacies by offering all the necessary resources under one roof – no fluff, no bottlenecks, just results.”

    The launch of the Strata Foundation, the rebranded CMM Cares, is designed to create a unified philanthropic identity for the organization, reflecting its mission and vision. The foundation aims to serve Long Island’s neediest families, and partners  with local nonprofits, community allies and business leaders to maximize resources for lasting impact.

    The brand refresh and unveiling of the Strata Foundation was announced at a gala last week at St. George’s Golf and Country Club in East Setauket.


    Adina Genn

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  • Denny’s to be acquired and taken private in a deal valued at $620 million

    Denny’s said Monday that it’s being acquired by a group on investors in a deal that will take the breakfast chain private.

    Denny’s board unanimously approved the deal, which values Denny’s at $620 million including debt. Denny’s will be purchased by private equity investment company TriArtisan Capital Advisors, investment firm Treville Capital and Yadav Enterprises, which is one of Denny’s largest franchisees.

    Under the agreement, Denny’s shareholders will receive $6.25 per share in cash for each share of Denny’s common stock they own, or a total of $322 million. That represents a 52% premium to Denny’s closing stock price Monday.

    Denny’s shares jumped 47% in after-hours trading Monday.

    Denny’s was founded in 1953 in Lakewood, California, as Danny’s Donuts. The name was changed to Denny’s Coffee Shops in 1959 to avoid confusion with another chain. Denny’s began trading on the New York Stock Exchange in 1969.

    Like many casual chains, Denny’s saw its sales plummet during the COVID pandemic. Once the pandemic eased, it found itself dealing with changing customer dining patterns, including a heavier reliance on delivery. Denny’s has also struggled as newer chains like First Watch promoted healthier breakfast options.

    Last fall, Denny’s said it planned to close 150 of its lowest-performing locations. At the end of the second quarter, Denny’s had 1,558 restaurants worldwide, including 1,422 Denny’s restaurants and 74 Keke’s restaurants. Denny’s acquired the Keke’s brand in 2022.

    Denny’s CEO Kelli Valade said the company reached out to more than 40 potential buyers and received multiple offers. Valade said Denny’s board believed the deal announced Monday was in the best interest of shareholders and the best path forward for the company.

    TriArtisan Co-Founder and Managing Director Rhohit Manocha called Denny’s “an iconic piece of the American dream” with a strong franchise base and loyal customers.

    “We look forward to working with Kelli and the rest of the Denny’s team and franchisees to provide resources and support the Company’s long-term strategic growth plans,” Manocha said in a statement.

    If it’s accepted by Denny’s shareholders, the deal is expected to close in the first quarter of 2026.

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  • Federal Reserve likely to cut key rate Wednesday and may signal another cut to follow

    WASHINGTON (AP) — The Federal Reserve will almost certainly cut its key interest rate on Wednesday and could signal it expects another cut in December as the central bank seeks to bolster hiring.

    A cut Wednesday would be the second this year and could benefit consumers by bringing down borrowing costs for mortgages and auto loans. Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%, providing a boost to the otherwise-sluggish housing market.

    Still, the Fed is navigating an unusual period for the U.S. economy and its future moves are harder to anticipate than is typically the case. Hiring has ground nearly to a halt, yet inflation remains elevated, and the economy’s mostly solid growth is heavily dependent on massive investment by leading tech companies in artificial intelligence infrastructure.

    The central bank is assessing these trends without most of the government data it uses to gauge the economy’s health. The release of September’s jobs report has been postponed because of the government shutdown. The White House said last week October’s inflation figure may not even be compiled.

    The shutdown itself may also crimp the economy in the coming months, depending on how long it lasts. Roughly 750,000 federal workers are nearing a month without pay, which could soon start weakening consumer spending, a critical driver of the economy.

    Federal workers laid off by the Trump administration’s Department of Government Efficiency efforts earlier this year may formally show up in jobs data if it is reported next month, which could make the monthly hiring data look even worse.

    Powell has said that the risk of weaker hiring is rising, which makes it as much of a concern as still-elevated inflation. As a result, the central bank needs to move its key rate closer to a level that would neither slow nor stimulate the economy.

    Most Fed officials view the current level of its key rate — 4.1% — as high enough to slow growth and cool inflation, which has been their main goal since price increases spiked to a four-decade high three years ago. The Fed is widely expected to reduce it to about 3.9% Wednesday. WIth job gains at risk, the goal is to move rates to a less-restrictive level.

    Kris Dawsey, head of economic research at D.E. Shaw, an investment bank, said that the lack of data during the shutdown means the Fed will likely stay on the path it sketched out in September, when it forecast cuts this month and in December.

    “Imagine you’re driving in a winter storm and suddenly lose visibility in whiteout conditions,” Dawsey said. “While you slow the car down, you’re going to continue going in the direction you were going versus making an abrupt change once you lose that visibility.”

    In recent remarks, the Fed chair has made clear that the sluggish job market has become a signficant concern.

    “The labor market has actually softened pretty considerably,” Powell said. “The downside risks to employment appear to have risen.”

    Before the government shutdown cut off the flow of data Oct. 1, monthly hiring gains had weakened to an average of just 29,000 a month for the previous three months. The unemployment rate ticked up to a still-low 4.3% in August from 4.2% in July.

    Layoffs also remain low, however, leading Powell and other officials to refer to the “low-hire, low-fire” job market.

    At the same time, last week’s inflation report — released more than a week late because of the shutdown — showed that inflation remain elevated but isn’t accelerating and may not need higher rates to tame it.

    Yet a key question is how long the job market can remain in what Powell has described as a “curious kind of balance.”

    “There have been some worrisome data points in the last few months,” said Stephen Stanley, chief U.S. economist at Santander, an investment bank. “Is that a weakening trend or are we just hitting an air pocket?”

    The uncertainty has prompted some top Fed officials to suggest that they may not necessarily support a cut at its next meeting in December. At its September meeting, the Fed signaled it would cut three times this year, though its policymaking committee is divided. Nine of 19 officials supported two or fewer reductions.

    Christopher Waller, a member of the Fed’s governing board and one of five people being considered by the Trump administration to replace Powell as Fed chair next year, said in a recent speech that while hiring data is weak, other figures suggest the economy is growing at a healthy pace.

    “So, something’s gotta give,” Waller said. “Either economic growth softens to match a soft labor market, or the labor market rebounds to match stronger economic growth.”

    Since it’s unclear how the contradiction will play out, Waller added, “we need to move with care when adjusting the policy rate.”

    Waller said he supported a quarter-point cut this month, “but beyond that point” it will depend on what the economic data says, assuming the shutdown ends.

    Financial markets have put the odds of another cut in December at above 90%, according to CME Fedwatch — and Fed officials have so far said little to defuse that expectation.

    Jonathan Pingle, chief U.S. economist at UBS, said that he will look to see if Powell, at a news conference Wednesday, repeats his assertion that the risks of a weaker job market remain high.

    “If I hear that, I think they’re on track to lowering rates again in December,” he said.

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  • Why investors are no longer rewarding earnings beats, according to Goldman Sachs

    Why investors are no longer rewarding earnings beats, according to Goldman Sachs

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  • Banks and retailers run short on pennies as the US Mint stops making them

    NEW YORK (AP) — The United States is running out of pennies.

    President Donald Trump’s decision to stop producing the penny earlier this year is starting to have real implications for the nation’s commerce. Merchants in multiple regions of the country have run out of pennies and are unable to produce exact change. Meanwhile, banks are unable to order fresh pennies and are rationing pennies for their customers.

    One convenience store chain, Sheetz, got so desperate for pennies that it briefly ran a promotion offering a free soda to customers who bring in 100 pennies. Another retailer says the lack of pennies will end up costing it millions this year, because of the need to round down to avoid lawsuits.

    “It’s a chunk of change,” said Dylan Jeon, senior director of government relations with the National Retail Federation.

    The penny problem started in late summer and is only getting worse as the country heads into the holiday shopping season.

    To be sure, not one retailer or bank has called for the penny to stick around. Pennies, especially in bulk, are heavy and are more often than not used exclusively to give customers change. But the abrupt decision to get rid of the penny has come with no guidance from the federal government. Many stores have been left pleading for Americans to pay in exact change.

    “We have been advocating abolition of the penny for 30 years. But this is not the way we wanted it to go,” said Jeff Lenard with the National Association of Convenience Stores.

    Trump announced on Feb. 9 that the U.S. would no longer mint pennies, citing the high costs. Both the penny and the nickel have been more expensive to produce than they are worth for several years, despite efforts by the U.S. Mint to reduce costs. The Mint spent 3.7 cents to make a penny in 2024, according to its most recent annual report, and it spends 13.8 cents to make a nickel.

    “Let’s rip the waste out of our great nation’s budget, even if it’s a penny at a time,” Trump wrote on Truth Social.

    The Treasury Department said in May that it was placing its last order of copper-zinc planchets — the blank metal disks that are minted into coins. In June, the last pennies were minted and by August, those pennies were distributed to banks and armored vehicle service companies.

    Troy Richards, president at Louisiana-based Guaranty Bank & Trust Co., said he’s had to scramble to have enough pennies on hand for his customers since August.

    “We got an email announcement from the Federal Reserve that penny shipments would be curtailed. Little did we know that those shipments were already over for us,” Richards said.

    Richards said the $1,800 in pennies the bank had were gone in two weeks. His branches are keeping small amounts of pennies for customers who need to cash checks, but that’s it.

    The U.S. Mint issued 3.23 billion pennies in 2024, the last full year of production, more than double that of the second-most minted coin in the country: the quarter. But the problem with pennies is they are issued, given as change, and rarely recirculated back into the economy. Americans store their pennies in jars or use them for decoration. This requires the Mint to produce significant sums of pennies each year.

    The government is expected to save $56 million by not minting pennies, according to the Treasury Department. Despite losing money on the penny, the Mint is profitable for the U.S. government through its production of other circulating coins as well as coin proof and commemorative sets that appeal to numismatic collectors.

    In 2024, the Mint made $182 million in seigniorage, which is its equivalent of profit.

    Besides American’s penny hoarding habit, a logistical issue is also preventing pennies from circulating.

    The distribution of coins is handled by the Federal Reserve system. Several companies, mostly armored carrier companies, operate coin terminals where banks can withdraw and deposit coins. Roughly a third of these 170 coin terminals are now closed to both penny deposits as well as penny withdrawals.

    Bank lobbyists say these terminals being closed to penny deposits is exacerbating the penny shortage, because parts of the country that may have some surplus pennies are unable to get those pennies to parts of country with shortages.

    “As a result of the U.S. Department of the Treasury’s decision to end production of the penny, coin distribution locations accepting penny deposits and fulfilling orders will vary over time as (penny) inventory is depleted” a Federal Reserve spokeswoman said.

    The lack of pennies has also become a legal minefield for stores and retailers. In some states and cities, it is illegal to round up a transaction to the nearest nickel or dime because doing so would run afoul of laws that are supposed to place cash customers and debit and credit card customers on an equal playing field when it comes to item costs.

    So, to avoid lawsuits, retailers are rounding down. While two or three cents may not seem like much, that extra change can add up over tens of thousands of transactions. A spokesman for Kwik Trip, the Midwest convenience store chain, says it has been rounding down every cash transaction to the nearest nickel. That’s expected to cost the company roughly $3 million this year. Some retailers are asking customers to give their change to local or affiliated charities at the cash register, in an effort to avoid pennies as well.

    A bill currently pending in Congress, known as the Common Cents Act, calls for cash transactions to be rounded to the nearest nickel, up or down. While the proposal is palatable to businesses, rounding up could be costly for consumers.

    The Treasury Department did not respond to a request for comment on whether they had any guidance for retailers or banks regarding the penny shortage, or the issues regarding penny circulation.

    The United States is not the first country to transition away from small denomination coins or discontinue out-of-date coins. But in all of these cases, governments wound down the use of their out-of-date coins over a period of, often, years.

    For example, Canada announced it would eliminate its one-cent coin in 2012, transitioning away from one-cent cash transactions starting in 2013 and is still redeeming and recycling one-cent coins a decade later. The “decimalization” process of converting British coins from farthings and shillings to a 100-pence-to-a-pound system took much of the 1960s and early 1970s.

    The U.S. removed the penny from commerce abruptly, without any action by Congress or any regulatory guidance for banks, retailers or states. The retail and banking industries, rarely allies in Washington on policy matters related to point-of-sale, are demanding that Washington issue guidance or pass a law fixing the issues that are arising due to the shortage.

    “We don’t want the penny back. We just want some sort of clarity from the federal government on what to do, as this issue is only going to get worse,” the NACS’ Lenard said.

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  • BOE to Embrace Uncertainty, and Bernanke’s Guidance, With Communications Revamp

    The central bank place will more emphasis on developments that could upend its expectations and less on forecasts that convey too much certainty about the future.

    Paul Hannon

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  • Federal Reserve cuts key rate yet Powell says future reductions are not locked in

    WASHINGTON (AP) — The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring, even as inflation stays elevated.

    But Fed Chair Jerome Powell also cautioned that further rate cuts weren’t guaranteed, citing the government shutdown’s interruption of economic reports and sharp divisions among 19 Fed officials who participate in the central bank’s interest-rate deliberations.

    Speaking to reporters after the Fed announced its rate decision, Powell said there were “strongly differing views about how to proceed in December” at its next meeting and a further reduction in the benchmark rate is not “a foregone conclusion — far from it.”

    The rate cut — a quarter of a point — brings the Fed’s key rate down to about 3.9%, from about 4.1%. The central bank had cranked its rate to roughly 5.3% in 2023 and 2024 to combat the biggest inflation spike in four decades before implementing three cuts last year. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans.

    The move comes amid a fraught time for the central bank, with hiring sluggish and yet inflation stuck above the Fed’s 2% target. Compounding its challenges, the central bank is navigating without the economic signposts it typically relies on from the government, including monthly reports on jobs, inflation, and consumer spending, which have been suspended because of the government shutdown.

    Financial markets largely expected another rate reduction in December, and stock prices dropped after Powell’s comments, with the S&P 500 nearly unchanged and the Dow Jones Industrial Average closing slightly lower.

    “Powell poured cold water on the idea that the Fed was on autopilot for a December cut,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities. “Instead, they’ll have to wait for economic data to confirm that a rate cut is actually needed.”

    Powell was asked about the impact of the government shutdown, which began on Oct. 1 and has interrupted the distribution of economic data. Powell said the Fed does have access to some data that give it “a picture of what’s going on.” He added that, “If there were a significant or material change in the economy, one way or another, I think we’d pick that up through this.”

    But the Fed chair did acknowledge that the limited data could cause officials to proceed more cautiously heading into its next meeting in mid-December.

    “There’s a possibility that it would make sense to be more cautious about moving (on rates). I’m not committing to that, I’m just saying it’s certainly a possibility that you would say ‘we really can’t see, so let’s slow down.’”

    The Fed typically raises its short term rate to combat inflation, while it cuts rates to encourage borrowing and spending and shore up hiring. Right now it sees risks of both slowing hiring and rising inflation, so it is reducing borrowing costs to support the job market, while still keeping rates high enough to avoid stimulating the economy so much that it worsens inflation.

    Yet Powell suggested the Fed increasingly sees inflation as less of a threat. He noted that excluding the impact of President Donald Trump’s tariffs, inflation is “not so far from our 2% goal.” Inflation has slowed in apartment rents and for many services, such as car insurance. A report released last week showed that inflation remains elevated but isn’t accelerating.

    The government recalled employees to produce the report, despite the shutdown, because it was used to calculate the cost of living adjustment for Social Security.

    At the same time, the economy could be rebounding from a sluggish first half, which could improve job growth in the coming months, Powell said. That would make rate cuts less necessary.

    “For some part of the committee, it’s time to maybe take a step back and see if whether there really are downside risks to the labor market,” Powell said. “Or see whether in fact that the stronger growth that we’re seeing is real.”

    Two of the 12 officials who vote on the Fed’s rate decisions dissented Wednesday, but in different directions. Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, voted against the move because he preferred no change to the Fed’s rate. Schmid has previously expressed concern that inflation remains too high.

    Fed governor Stephen Miran dissented for the second straight meeting in favor of a half-point cut. Miran was appointed by President Donald Trump just before the central bank’s last meeting in September.

    Trump has repeatedly attacked Powell for not reducing borrowing costs more quickly. In South Korea early Wednesday he repeated his criticisms of the Fed chair.

    “He’s out of there in another couple of months,” Trump said. Powell’s term ends in May. On Monday, Treasury Secretary Scott Bessent confirmed the administration is considering five people to replace Powell, and will decide by the end of this year.

    The Fed also said Wednesday that it would stop reducing the size of its massive securities holdings, which it accumulated during the pandemic and after the 2008-2009 Great Recession. The change, to take effect Dec. 1, could over time slightly reduce longer-term interest rates on things like mortgages but won’t have much overall impact on consumer borrowing costs.

    Without government data, the economy is harder to track, Powell said. September’s jobs report, scheduled to be released three weeks ago, is still postponed. This month’s hiring figures, to be released Nov. 7, will likely be delayed and may be less comprehensive when finally released. And the White House said last week that October’s inflation report may never be issued at all.

    Before the government shutdown cut off the flow of data, monthly hiring gains had weakened to an average of just 29,000 a month for the previous three months, according to the Labor Department’s data. The unemployment rate ticked up to a still-low 4.3% in August from 4.2% in July.

    More recently, several large corporations have announced sweeping layoffs, including UPS, Amazon, and Target, which threatens to boost the unemployment rate if it continues. Powell said the Fed is watching the layoff announcements “very carefully.”

    ___

    Associated Press Writer Alex Veiga in Los Angeles contributed to this report.

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  • The stock market is breaking records. Time for a gut check

    NEW YORK (AP) — Almost everything in your 401(k) should be coming up a winner now. That makes it time for a gut check.

    Not only is the U.S. stock market setting records, so are foreign stocks. Bond funds, which are supposed to be the boring and safe part of any portfolio, are also doing well this year, along with gold and cryptocurrencies.

    But in the midst of all the fun, it can pay to remember how you felt during April. That’s when financial markets were tumbling because of worldwide tariffs that President Donald Trump announced on his “Liberation Day.”

    Did all that fear push you to sell your stocks, lock in the losses and miss out on the stunning rebound that came afterward? Or did you hold tight, as many financial advisers suggested? Either way, it’s valuable information because another downturn could strike at any time.

    To be sure, many professionals along Wall Street are forecasting that the U.S. stock market will keep rising. But the threat of a sharp drop remains, as it always does. That leaves investors with the luxury now, while prices are high, to reassess. Don’t get lulled into leaving your 401(k) on autopilot, unless you’re intentionally doing so, and make sure your portfolio isn’t stuffed with too much risk.

    Here are some things to keep in mind:

    The stock market is doing well?

    It’s been another fabulous year for stocks. The S&P 500 has soared more than 35% from its low point in April, shortly after “Liberation Day.”

    The market has had a few hiccups recently, as worries have popped up about everything from potentially bad loans at some banks to renewed talk about much higher tariffs on China. But stocks have come back from each stumble, only to push higher.

    “The market continues to (hit) record highs on the back of strong earnings and easing U.S.–China trade tensions,” said Mark Hackett, chief market strategist at Nationwide, who calls the current state of “steady growth without irrational exuberance” a ”Goldilocks environment.”

    If the market’s great, why should I worry?

    You don’t need to worry at the moment, but remember that the stock market will fall eventually. It always does.

    The S&P 500 index, which sits at the heart of many 401(k) accounts, has forced investors to swallow a 10% drop every couple of years or so, on average. That’s what Wall Street calls a “correction,” and professional investors see them as ways to clear out excessive optimism that may have built up and pushed prices too high. More serious drops of at least 20%, which Wall Street calls “bear markets,” are less common but can last for years.

    Back in April, the S&P 500 index plunged nearly 20% from its record at the time. But the market came back, propelled by the big tech companies that have led the way the last few years.

    “Fundamentally superior stocks recover quickly and bounce like fresh tennis balls, while fundamentally inferior stocks bounce like rocks.” said Louis Navellier, founder and chief investment officer of asset manager Navellier & Associates, who also brushed off worries that the stock market is in a bubble.

    What could trip up the market?

    The stock market has charged to records because investors are expecting several important things to happen. If any fail to pan out, it would undercut the market.

    Chief among those expectations is that big U.S. companies will continue to deliver big growth in profits. That’s one of the few ways they can justify the jumps for their stock prices and quiet criticism that they’ve become too expensive.

    Critics point in particular to the frenzy going on in artificial-intelligence technology. There, they hear echoes of the dot-com bonanza that ultimately imploded in 2000 and sent stocks on a yearslong descent. One popular measure of valuing stocks, which looks at corporate profits over the preceding 10 years, showed the S&P 500 recently was near its most expensive level since the 2000 dot-com bubble.

    Consider Nvidia, the chip company that’s become the poster child of the AI trade. If it fails to meet analysts’ high expectations for growth, its stock will look more expensive than it already does. It’s trading at 54 times its earnings per share over the last 12 months, much higher than the overall S&P 500’s price-earnings ratio of nearly 30.

    What’s the next event to be mindful of?

    Wednesday’s meeting of the Federal Reserve could be a key moment for the market.

    Besides companies delivering bigger profits or stock prices falling, another way for the stock market to look less expensive is if interest rates ease.

    The widespread expectation is that the Fed will cut its main interest rate to support the slowing job market and deliver more reductions through next year. But the Fed has also warned it may hold off on cuts if inflation accelerates beyond its still-high level. That’s because lower interest rates can make inflation worse, and Wednesday’s focus will be on whether the Fed gives any hints about the likelihood of more cuts in coming months.

    Several of Wall Street’s most influential stocks will also be reporting their latest earnings results this week, including Microsoft and Apple. And Trump will be meeting with China’s leader, Xi Jinping on Thursday. The market has already run up on hopes that the two will ease rising trade tensions at some point.

    If there’s a bubble, I should sell everything, right?

    A famous saying on Wall Street is that being too early is the same as being wrong.

    Consider prescient investors who knew that stocks were too expensive when former Fed Chairman Alan Greenspan famously talked about the possibility of “irrational exuberance” in financial markets. That was in late 1996.

    If they sold then, they would have missed out as the bubble inflated further and the S&P 500 more than doubled through late March 2000 before it popped.

    Instead, the better way to think of it may be: Make sure your investments are set up the right way, so you can stomach the market whether it goes up or down.

    How much of my 401(k) should be in stocks?

    It depends on your age and how much risk you’re willing to take.

    If you did sell stocks this past April, you may have had too much of your portfolio in stocks for your risk tolerance. Or you may need to steel yourself more during the next drop.

    Remember that anyone decades away from retirement has the luxury of waiting out any drops in the market. Bear markets are actually great in that case, because they put stocks on sale for anyone continuing to make regular contributions to their 401(k) account.

    Workers closer to retirement still need stocks, though in smaller proportions, because they have historically provided the highest returns over the long term, and a retirement can last decades.

    “They aren’t the most sexy, but companies with dependable dividends are a good bet, as are simple index funds designed to track the S&P 500 or a subset aimed at value or growth,” said John Kiernan, managing editor of personal finance site WalletHub.

    “Young people need to grow their money over time, and they will have decades to make up for any losses,” Kiernan said. “Older people need to protect the money they have now, which might mean favoring bonds and high-yield savings accounts over risky investments.”

    It’s easy to see how much stock retirement savers are recommended to hold at various ages. Mutual-fund companies have target-date retirement funds, which are built as autopilot products that will automatically move investors from lots of stocks when they’re young to fewer stocks when they’re closer to retirement.

    The average target-date fund for workers just starting their careers had 92% of its portfolio invested in stocks at the end of last year, according to Morningstar. Target-date funds designed for people entering retirement have a bit under 50% invested in stocks, meanwhile.

    I hate all this uncertainty

    Unfortunately, it’s the price you have to pay if you want the strong returns that the U.S. stock market has historically provided over the long term.

    This is what the stock market does. It goes up and down, sometimes by shocking amounts, but it usually helps patient savers build their nest eggs over decades.

    Ben Fulton, CEO of WEBs investments, recommends monitoring volatility by paying attention to the VIX, a volatility index, sometimes called the “fear index, which measures market expectations of future risk. The VIX is currently around 16, which Fulton said signals ”calm by historical standards.”

    “When the VIX begins to hold consistently above 20, it often signals a time to gradually reduce market exposure,” he said. That happened during the tech bubble and more recently during the pandemic in 2020 and when inflation spiked in 2022.

    “Until then, maintaining positions is critical, as markets that rise steadily can continue longer than logic might suggest, and stepping aside too early can mean missing valuable portfolio appreciation,” Fulton said.

    “Markets rarely behave as we want, instead reflecting the collective sentiment of all investors.”

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  • Beyond Meat shares briefly sizzle on Walmart deal and meme stock interest

    Beyond Meat’s shares briefly sizzled Wednesday before heading back down again.

    The plant-based meat company’s shares more than doubled early Wednesday before closing at $3.58 per share, which was down 1%. Still, it was a surprising comeback for a stock that was trading at an all-time low of 50 cents per share late last week.

    Investors cheered Beyond Meat’s announcement Tuesday that it’s increasing the availability of some of its products at U.S. Walmart stores. Beyond Meat said that its chicken pieces, Korean BBQ-style steak and burger six-packs will now be easier to find in more than 2,000 Walmart stores.

    Beyond Meat also launched a direct-to-consumer website this week, which will try to build buzz by offering limited releases of new products.

    But perhaps the biggest driver of interest in Beyond Meat is Roundhill Investments, which added Beyond Meat to its Meme Stock ETF, or exchange-traded fund, on Monday. The fund consists solely of meme stocks, which are stocks that gain popularity and trading volume based on social media hype rather than a company’s financial performance.

    Investors have been sporadically turning to meme stocks throughout 2025 in an effort to find bargains amid a very pricey stock market. The stocks are often the target of “short sellers,” or investors betting against the stock.

    Beyond Meat was the darling of the plant-based meat industry when it went public on the Nasdaq stock exchange in 2019.

    But in recent years the El Segundo, California-based company has been struggling with weak demand for its burgers, sausages, tenders and other products. Beyond Meat’s net revenue was down 15% in the first six months of this year.

    Beyond Meat’s stock price cratered last week after the company announced the expiration of lock-up restrictions on some of its 326 million shares of new stock as part of a plan to help it reduce its debt load and extend the time until its debt matures. The lock-up had prevented shareholders from selling the stock but now they were free to do so.

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  • Wells Fargo opens new branch in Lake Grove | Long Island Business News

    Wells Fargo expands its Long Island presence with a new Lake Grove branch and donates $25K to support veterans through local nonprofit New Ground.

    David Winzelberg

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  • Exclusive | How a Handyman’s Wife Helped an Hermès Heir Discover He’d Lost $15 Billion

    Nicolas Puech says his wealth manager isolated him from friends and family and siphoned away a massive fortune. Then came the clue that began to reveal the deception.

    Nick Kostov

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  • Regional banks’ bad loans spark concerns on Wall Street

    NEW YORK — NEW YORK (AP) —

    Wall Street is concerned about the health of the nation’s regional banks, after a few of them wrote off bad loans to commercial customers in the last two weeks and caused investors to wonder if there might be more bad news to come.

    Zions Bank, Western Alliance Bank and the investment bank Jefferies surprised investors by disclosing various bad investments on their books, sending their stocks falling sharply this week. JPMorgan Chase CEO Jamie Dimon added to the unease when he warned there might be more problems to come for banks with potentially bad loans.

    “When you see one cockroach, there are probably more,” Dimon told investors and reporters on Tuesday, when JPMorgan reported its results.

    The KBW Bank Index, a basket of banks tracked by investors, is down 7% this month.

    There were other signs of distress. Data from the Federal Reserve shows that banks tapped the central bank’s overnight “repo” facilities for the second night in a row, an action banks have not needed to take since the Covid-19 pandemic. This facility allows banks to convert highly liquid securities like mortgage bonds and treasuries into cash to help fund their short-term cash shortfalls.

    Zions Bancorp shares sank Thursday after the bank wrote off $50 million in commercial and industrial loans, while Western Alliance fell after the bank alleged it had been defrauded by an entity known as Cantor Group V LLC. This came on top of news from Jefferies, which told investors it was holding $5.9 billion in debt of bankrupt auto parts company First Brands. All three stocks recovered a bit by midday Friday.

    Even larger banks were not immune. Several Wall Street banks disclosed losses in the bankruptcy of Tricolor, a subprime auto dealership company that collapsed last month. Fifth Third Bank, a larger regional bank, recorded a $178 million loss from Tricolor’s bankruptcy.

    While the big Wall Street banks get most of the media and investor attention, regional banks are a major part of the economy, lending to small-to-medium sized businesses and acting as major lenders for commercial real estate developers. There are more than 120 banks with between $10 billion and $200 billion in assets, according to the FDIC.

    While big, these banks can run into trouble because their businesses are not as diverse as the Wall Street money center banks. They’re often more exposed to real estate and industrial loans, and don’t have significant businesses in credit cards and payment processing that can be revenue generators when lending goes south.

    The last banking flare up, in 2023, also involved mid-sized and regional banks that were overly exposed to low-interest loans and commercial real estate. The crisis caused Silicon Valley Bank to fail, followed by Signature Bank, and led to the eventual sale of First Republic Bank to JPMorgan Chase in a fire sale. Other banks like Zions and Western Alliance ended up seeing their stocks plummet during that time period.

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  • American businessman whose firm invested in European soccer clubs indicted for alleged $500M fraud

    NEW YORK — NEW YORK (AP) — An American businessman whose firm invested in several European soccer clubs that struggled under its ownership has been indicted in New York on charges of financial wrongdoing in an alleged $500 million fraud scheme.

    Josh Wander was a co-founder of Miami-based 777 Partners that owned stakes in an Australian airline plus soccer clubs Hertha Berlin in Germany, Genoa in Italy, Standard Liege in Belgium and Vasco da Gama in Brazil.

    The 777 story became a cautionary tale in the global soccer trend of “multi-club ownership” — investors taking stakes in several clubs in different countries. European soccer body UEFA has identified the trend as a threat to the integrity of games and the player trading industry worth more than $10 billion each year.

    “As alleged, Wander used his investment firm, 777 Partners, to cheat private lenders and investors out of hundreds of millions of dollars by pledging assets that his firm did not own, falsifying bank statements and making other material misrepresentations about 777’s financial condition,” Jay Clayton, United States Attorney for the Southern District of New York, said in an FBI statement Thursday.

    The indictment charging Wander with wire fraud, securities fraud and conspiracy to commit those crimes was unsealed Thursday in federal court in Manhattan. Most of the charges carry a maximum prison term of 20 years.

    Wander and 777 had failed last year in targeting their biggest capture in soccer, nine-time English champion Everton, amid increasing scrutiny of the business and a lawsuit in New York from a London-based investor.

    Reporting about 777’s soccer interests, led by Norwegian soccer magazine Josimar, intensified even before Wander was elected to a board seat at the influential European Club Association, a network of hundreds of teams that shapes the Champions League and other competitions.

    Wander’s firm had moved heavily into soccer in 2021, buying stakes in financially distressed clubs recovering from playing in empty stadiums during the COVID-19 pandemic.

    The former chief financial officer at 777, Damien Alfalla, “is cooperating with the government,” the FBI said, and made a guilty plea this week.

    “The women and men of the SDNY and our law enforcement partners will continue to work tirelessly to protect our investors and our markets,” Clayton said.

    Another 777 executive, Steven Pasko, also is targeted in a civil law court filing Thursday by the Securities and Exchange Commission.

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    AP soccer: https://apnews.com/hub/soccer

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