ReportWire

Tag: FUND

  • Nancy Guthrie disappearance: Former FBI agent weighs in on tracking ransom money

    [ad_1]

    AT THIS HOUR, AUTHORITIES IN ARIZONA ARE ASKING FOR ANY KIND OF VIDEO THAT COULD LEAD THEM TO NANCY GUTHRIE. ONE QUESTION IN THIS INVESTIGATION IS, WAS SHE KIDNAPED FOR RANSOM? THERE HAVE BEEN REPORTS OF RANSOM NOTES, BUT IT’S NOT CLEAR IF THE GUTHRIE FAMILY HAS PAID ANYTHING AT THIS POINT. WESH 2’S LINDSEY TALKED WITH A FORMER FBI AGENT ON HOW THAT COULD BE A CRITICAL PART OF THE INVESTIGATION. VERY VALUABLE TO US, AND WE WILL PAY THE MAJORITY OF US. WATCH THAT VIDEO POSTED BY SAVANNAH GUTHRIE AND HER SIBLINGS SATURDAY. AND ALL WE COULD THINK IS THAT POOR FAMILY. BUT LAW ENFORCEMENT AND TECH EXPERTS LIKE KYLE ARMSTRONG ALSO SEE AN OPPORTUNITY THERE TO BRING NANCY GUTHRIE HOME. THE PAYMENT IS MADE AND IT GOES THE BLOCKCHAIN WORLD. AT SOME POINT IT WILL BE CASHED OUT FOR FIAT CURRENCY. AND THAT’S THE OPPORTUNITY THAT LAW ENFORCEMENT WILL LOOK FOR. WHAT IS THE BLOCKCHAIN? ARMSTRONG, A FORMER FBI AGENT, NOW WORKS FOR TRM LABS, WHICH SPECIALIZES IN BLOCKCHAIN INTELLIGENCE. ANYTIME THERE’S A BITCOIN TRANSACTION, THAT TRANSACTION IS PUBLISHED ON THE OPEN INTERNET, AND THE BLOCKCHAIN IS ESSENTIALLY THE RECORDING OF THAT TRANSACTION. TRANSACTIONS ARE FROM ONE ADDRESS TO ANOTHER. AND ANONYMOUS, OFTEN 20 PLUS CHARACTERS ALPHANUMERIC THAT ARE HARD TO CRACK. THEY ARE COMPANY WORKS TO US TO FOLLOW THOSE TRANSACTIONS, TO MAKE IT EASY TO GRAPH THOSE TRANSACTIONS, AND SIMPLER TO EXPLAIN. BUT HOW QUICKLY CAN YOU TRACK IT? ONCE A TRANSACTION IS HAS BEEN MADE AND THERE IS A RECIPIENT ADDRESS, THEN YOU CAN BASICALLY FLAG THAT ADDRESS. AND THEN ANYTIME THE ASSETS MOVE, THAT FLAG WILL CARRY WITH THEM IN THE IN OUR INTERNAL SOFTWARE. AND SO EVEN IF IT MOVES TEN TIMES IN A CIRCUITOUS MANNER, WHEN THE FUNDS EVENTUALLY HIT ONE OF THESE EXCHANGES, THEY WILL KNOW. SO KYLE ARMSTRONG SAYS IF A SUSPECT DOES TRY TO WITHDRAW THAT MONEY, THE EXCHANGE WOULD THEN FREEZE IT AND IMMEDIATELY CONTACT POLICE. THAT IS REALLY INTERESTING. BUT WHAT HAPPENS IF THEY DON’T TRY TO WITHDRAW IT AND THEY TRY TO DO SOMETHING ELSE, OR BUY SOMETHING ELSE? REALLY GOOD QUESTION. BUT THINK ABOUT THIS. YOU CAN’T REALLY GO OUT RIGHT NOW AND BUY A CAR OR A HOME WITH BITCOIN. MAYBE THAT COULD HAPPEN IN THE FUTURE. EVENTUALLY YOU HAVE TO CASH SOMETHING OUT. AND IN FACT, ARMSTRONG POINTED TO A 2016 NEW YORK CASE WHERE IT’S BELIEVED A COUPLE STOLE CRYPTO BUT COULD NOT ACTUALLY SPEND IT. SO THEY STARTED BUYING UP GIFT CARDS. THE MOMENT THEY DID THAT, THERE WAS A RECORD. AND HE SAYS, YOU WILL BE

    Nancy Guthrie disappearance: Former FBI agent weighs in on tracking ransom money

    Updated: 4:49 PM PST Feb 12, 2026

    Editorial Standards

    A former FBI agent who worked 14 years investigating illicit finance cases said the ransom note could be the opportunity to find “Today” show anchor Savannah Guthrie’s mother, Nancy.It’s unclear if the Guthrie family has agreed to pay anyone, but there were reports of two ransom notes demanding payment in Bitcoin. Kyle Armstrong, who worked for the FBI, now works for a blockchain intelligence company called TRM Labs. “If a ransom is paid, I’m certain that there will be several investigators,” Armstrong said. “When money goes in, there’s not a lot of retail use of cryptocurrency, especially a sizable amount. You really can’t buy cars. You can’t go to fancy vacations. You can’t do a lot of retail things with crypto. Ultimately, you have to exchange the cryptocurrency, primarily for fiat currency, for regular U.S. dollars, euros, whatever it is. That presents, usually, the opportunity for law enforcement to learn who is controlling this account.”When there’s a transaction, it’s from one address to another that is anonymous, but TRM Labs has a tool that can help law enforcement decipher that. “Anytime there’s a Bitcoin transaction, that transaction is published on the open Internet, and the blockchain is essentially the recording of that transaction. Our company works to follow those transactions, to make it easy to graph those transactions and simpler to explain. And then ultimately, we try to identify who’s controlling the addresses,” Armstrong said. He said there are cases where they can even flag the transaction so it can follow multiple movements. “Anytime the assets move, that flag will carry with them in the internal software. So even if it moves 10 times in a circuitous manner, when the funds eventually hit one of these exchanges, and they will know those funds have been identified by law enforcement as illicit,” Armstrong said.

    A former FBI agent who worked 14 years investigating illicit finance cases said the ransom note could be the opportunity to find “Today” show anchor Savannah Guthrie’s mother, Nancy.

    It’s unclear if the Guthrie family has agreed to pay anyone, but there were reports of two ransom notes demanding payment in Bitcoin.

    Kyle Armstrong, who worked for the FBI, now works for a blockchain intelligence company called TRM Labs.

    “If a ransom is paid, I’m certain that there will be several investigators,” Armstrong said. “When money goes in, there’s not a lot of retail use of cryptocurrency, especially a sizable amount. You really can’t buy cars. You can’t go to fancy vacations. You can’t do a lot of retail things with crypto. Ultimately, you have to exchange the cryptocurrency, primarily for fiat currency, for regular U.S. dollars, euros, whatever it is. That presents, usually, the opportunity for law enforcement to learn who is controlling this account.”

    When there’s a transaction, it’s from one address to another that is anonymous, but TRM Labs has a tool that can help law enforcement decipher that.

    “Anytime there’s a Bitcoin transaction, that transaction is published on the open Internet, and the blockchain is essentially the recording of that transaction. Our company works to follow those transactions, to make it easy to graph those transactions and simpler to explain. And then ultimately, we try to identify who’s controlling the addresses,” Armstrong said.

    He said there are cases where they can even flag the transaction so it can follow multiple movements.

    “Anytime the assets move, that flag will carry with them in the internal software. So even if it moves 10 times in a circuitous manner, when the funds eventually hit one of these exchanges, and they will know those funds have been identified by law enforcement as illicit,” Armstrong said.

    [ad_2]

    Source link

  • L.A.’s defense industry is booming. Federal funding crunch could change that

    [ad_1]

    When former Space X engineer Josh Giegel launched his North Hollywood tech company Gambit in 2023, he had a vision for the battlefield of the future, one with fewer soldiers and more AI-driven assets.

    His software would allow unmanned tanks and swarms of armed drones to communicate and adapt in real time — without human intervention.

    The company now employs more than a dozen people and has contracts with the military, which is testing his software. But its growth has been clouded because of a funding dispute on Capitol Hill over the Small Business Innovation Research (SBIR) program, which provides companies seed capital to develop new technology that can assist the government. Funding for it and related programs expired in September.

    The seed fund has been vital to many local tech startups. Gambit received $3.3 million from the program early on and was hoping to get another $5 million of the Small Business Administration money, which is allocated by the military.

    Workers at K2 Space in Torrance, where the startup is building high-capacity satellites for Medium Earth Orbit. (K2 Space)

    (K2 Space)

    “That funding really helps companies like ours that are putting tech into warfighters’ hands,” Giegel said. “Losing that money becomes more leg work to find other sources.”

    Gambit’s predicament is widely shared across Southern California, which has experienced a proliferation of tech startups launched by SpaceX alumni and other entrepreneurs with the support of SBA money.

    In 2024, 124 contracts worth $173 million were awarded to 71 California companies through SpaceWERX, an El Segundo-based arm of the Space Force that distributes SBA funding to innovative defense startups.

    The money also is disbursed by other branches of the military and departments of the government, which do not take stakes in the companies. Gambit received funds through the Air Force.

    Other local recipients of SBA funding include Costa Mesa autonomous weapons maker Anduril Industries, now valued at more than $30 billion; and satellite platform manufacturers K2 Space in Torrance and Apex Space in Los Angeles.

    The funds are allocated in phases, with initial feasibility awards up to about $300,000 and as much as $2 million for the development of prototypes. A maximum of $15 million is available through a companion SBA-funded program if the companies can bring in other funding.

    “I don’t know if I can name a single company that I work with, or that I know of, that did not start with SBIR” funding, said Maggie Gray, a partner at Silicon Valley venture capital firm Shield Capital, which invested in Apex. “We see SBIR as a crucial part of the defense-tech ecosystem. It’s kind of the way to get your initial foot in the door with the government.”

    Established in 1982, the SBA program provides more than $4 billion to government departments, with the military receiving the lion’s share. But SBA funding ran out on Sept. 30 as lawmakers clashed over proposed reforms.

    Sen. Joni Ernst (R-Iowa), who chairs the Senate Committee on Small Business and Entrepreneurship, introduced a bill that would set a $75-million lifetime cap on funds for individual companies and establish performance benchmarks. The bill also would beef up due diligence to prevent new technology falling into the hands of foreign adversaries and end diversity, equity and inclusion preferences in funds distribution.

    The legislation, however, has faced stiff opposition from Massachusetts Sen. Ed Markey, the ranking Democrat on the committee, who contends the reforms go overboard and would crimp innovation. A bipartisan House bill that would have reauthorized SBA funding for a year failed in the Senate amid opposition by Ernst, who is leaving Congress in a year.

    While negotiations have restarted on Capitol Hill, there is no guarantee SBA financing will be restored, though the military and other government agencies could fund startups through their own budgets.

    The SpaceWERX program, which has played a critical role in Southern California’s resurgent space economy, was established in 2020, just one year after the Space Force was founded.

    Director Arthur Grijalva said the program distributes several hundred million dollars in SBA funding annually across the nation and has not had an issue with foreign influence or companies receiving repeat awards without much to show for it.

    “Even though it might be small [funding] for a really big company, it’s really impactful for these small companies, these startups, where if they don’t have this funding, they might have to do layoffs, they might have to go into debt, or they might ultimately not be successful,” Grijalva said.

    Since September, $94 million in larger contracts has been held up for more than 25 companies, which follow funding for feasibility studies and prototypes, according to SpaceWERX.

    The impasse comes at an inopportune time for the Trump administration, which has been overhauling weapons procurement.

    Secretary of Defense Pete Hegseth announced in November a policy to speed up weapons development by first finding capabilities in the commercial market before the government attempts to develop new systems. Last week he visited several L.A.-area defense companies, including Torrance startup Castelion, a manufacture of hypersonic missiles that received SBIR funding.

    Kirsten Bartok Touw, managing partner of New Vista Capital, which invested in Castelion, agreed the program may have flaws but said it plays an invaluable role in attracting venture capital to companies that have drawn the funding.

    “That is an important signal to the market, which says, ‘You should invest in more of these, because this is a technology we want and need,’” she said.

    A report this month by the National Academies of Sciences, Engineering and Medicine found that one dollar of the funding distributed by the military attracts more than four dollars of venture capital or other third-party investment.

    Markey’s office said last week he submitted a proposal to Ernst that includes making the SBIR program permanent, increased allocations, a performance metric, foreign due diligence standards and fellowships for underserved small businesses, among other provisions.

    “This bill is [his] second attempt at breaking the logjam and restarting these critical programs to ensure America’s most nimble allies — small businesses — are not decimated,” a Markey spokesperson said.

    A spokesperson for Ernst said last week that the senator “remains focused on ensuring taxpayer investments in R&D do not benefit China and actually deliver cutting-edge technology for our warfighters.”

    Giegel said that while he is optimistic future SBA funding might come through for Gambit, he is not counting on it. He now assumes he will have to look for other sources of money to grow the company, which already attracted undisclosed venture capital.

    “We’re trying to find operational relevance faster,” he said.

    [ad_2]

    Laurence Darmiento

    Source link

  • ‘Everyone is doing well’: President Trump praises economy amid layoffs, potential SNAP crisis

    [ad_1]

    ‘Everyone is doing well’: President Trump praises economy amid layoffs, potential SNAP crisis

    President Trump promotes economic prosperity during his visit to Japan, while layoffs and a federal shutdown threaten millions back in the U.S.

    Updated: 3:03 PM PDT Oct 28, 2025

    Editorial Standards

    President Donald Trump is promoting Japanese companies investing $550 billion in the United States while visiting the East Asian country. The president said the funds would be “at my direction” as part of a trade framework secured with Japan. The president also boasted about the U.S. economy, despite contrasting economic challenges.”Well, everyone in our country is now doing well. My first term, we built the greatest economy in the history of the world. We had an economy like nobody has seen before now. We’re doing it again, but this time, actually, it’s going to be much bigger, much stronger,” Trump said.The president highlighted the stock market reaching all-time highs, but economists point to other indicators that tell a different story. Amazon announced it is cutting 14,000 jobs, UPS is eliminating roughly 48,000 positions and closing more than 90 buildings as part of a turnaround plan, and Target, Ford, and GM have also announced layoffs amid slowing demand. Additionally, the federal government shutdown threatens food aid benefits for more than 40 million Americans as soon as Nov. 1, and September’s CPI data showed prices are rising again just as the Federal Reserve has cut interest rates to support the economy.”I don’t really understand the optimism to be perfectly honest, and I’m a very optimistic, very little of a ‘doomer’ person. We’ve had seven months in a row of contractions and manufacturing output. The labor market cooled to such an extent that it forced the Fed to cut rates in September,” said Jai Kedia from the Cato Institute.President Trump is preparing to meet with Chinese President Xi Jinping amid the ongoing U.S.–China trade war. Treasury Secretary Scott Bessent said the two countries have reached a “very successful framework” ahead of their summit, covering tariffs, rare-earth exports and large U.S. agricultural purchases.Meanwhile, 26 states and Washington, D.C., are suing the USDA, arguing the agency has contingency funds that could be used to maintain SNAP benefits during the shutdown. In a memo, the USDA stated that those funds can only be used for a natural disaster or other emergency, not to operate during a shutdown, and placed the blame on Senate Democrats, saying, “We are approaching an inflection point for Senate Democrats. Continue to hold out for the Far-Left wing of the party or reopen the government so mothers, babies, and the most vulnerable among us can receive timely WIC and SNAP allotments.” The states argue the law requires the USDA to issue benefits as long as money is available.It comes after another failed vote occurred today in the Senate. A federal judge in San Francisco has issued a preliminary injunction blocking the Trump administration from firing federal workers during the government shutdown. This move comes as a lawsuit challenges recent job cuts in education, health, and other areas.For more coverage from the Washington News Bureau here:

    President Donald Trump is promoting Japanese companies investing $550 billion in the United States while visiting the East Asian country. The president said the funds would be “at my direction” as part of a trade framework secured with Japan.

    The president also boasted about the U.S. economy, despite contrasting economic challenges.

    “Well, everyone in our country is now doing well. My first term, we built the greatest economy in the history of the world. We had an economy like nobody has seen before now. We’re doing it again, but this time, actually, it’s going to be much bigger, much stronger,” Trump said.

    The president highlighted the stock market reaching all-time highs, but economists point to other indicators that tell a different story.

    Amazon announced it is cutting 14,000 jobs, UPS is eliminating roughly 48,000 positions and closing more than 90 buildings as part of a turnaround plan, and Target, Ford, and GM have also announced layoffs amid slowing demand.

    Additionally, the federal government shutdown threatens food aid benefits for more than 40 million Americans as soon as Nov. 1, and September’s CPI data showed prices are rising again just as the Federal Reserve has cut interest rates to support the economy.

    “I don’t really understand the optimism to be perfectly honest, and I’m a very optimistic, very little of a ‘doomer’ person. We’ve had seven months in a row of contractions and manufacturing output. The labor market cooled to such an extent that it forced the Fed to cut rates in September,” said Jai Kedia from the Cato Institute.

    President Trump is preparing to meet with Chinese President Xi Jinping amid the ongoing U.S.–China trade war. Treasury Secretary Scott Bessent said the two countries have reached a “very successful framework” ahead of their summit, covering tariffs, rare-earth exports and large U.S. agricultural purchases.

    Meanwhile, 26 states and Washington, D.C., are suing the USDA, arguing the agency has contingency funds that could be used to maintain SNAP benefits during the shutdown.

    In a memo, the USDA stated that those funds can only be used for a natural disaster or other emergency, not to operate during a shutdown, and placed the blame on Senate Democrats, saying, “We are approaching an inflection point for Senate Democrats. Continue to hold out for the Far-Left wing of the party or reopen the government so mothers, babies, and the most vulnerable among us can receive timely WIC and SNAP allotments.”

    The states argue the law requires the USDA to issue benefits as long as money is available.

    It comes after another failed vote occurred today in the Senate. A federal judge in San Francisco has issued a preliminary injunction blocking the Trump administration from firing federal workers during the government shutdown. This move comes as a lawsuit challenges recent job cuts in education, health, and other areas.

    For more coverage from the Washington News Bureau here:

    [ad_2]

    Source link

  • Democratic-led states sue Trump administration to keep SNAP food assistance funds flowing

    [ad_1]

    A coalition of 25 Democratic-run states sued the Trump administration Tuesday to prevent billions of dollars of cuts to federal food assistance that are set to kick in this weekend.Democratic attorneys general and governors from 25 states and Washington, D.C., claimed in the lawsuit that the Trump administration was threatening “illegal” cuts to SNAP, the Supplemental Nutrition Assistance Program, commonly known as food stamps.The U.S. Department of Agriculture, which oversees the program for 42 million Americans, “cannot simply suspend all benefits indefinitely, while refusing to spend funds from available appropriations for SNAP benefits for eligible households,” the lawsuit claims.The Trump administration has argued it does not have the power to use that pot of existing money — known as its contingency fund — to cover the SNAP program beyond Saturday, because of the federal government shutdown.”The contingency fund is not available to support FY 2026 regular benefits, because the appropriation for regular benefits no longer exists,” officials in the Department of Agriculture wrote in a memo last week.The risk of tens of millions of Americans losing food aid has triggered intense anxiety across Washington, as the government shutdown nears the one-month mark.Top lawmakers from both parties acknowledge it would be the most significant impact of the shutdown to date, with House Speaker Mike Johnson privately warning his GOP members on a call Tuesday that the pain was about to spike for everyday Americans.Senate Democrats have now voted 13 times to block a GOP funding bill because it does not include their separate demands on extending health care subsidies. But GOP leaders have refused to negotiate on the subsidies until the government reopens, leaving both parties in a bitter stalemate with no clear way out.Democrats have been unflinching in their stance, despite the looming Saturday deadline for the food aid. They argue that President Donald Trump has sought to “weaponize” the food assistance program, intentionally choosing not to fund the aid to pressure Democrats to yield.Fight over food aidShortly after the lawsuit was filed Tuesday, Agriculture Secretary Brooke Rollins told CNN that there isn’t enough contingency funding to cover SNAP benefits for November, which she said would cost about $9.2 billion.”As of today, that $9.2 billion, we don’t even have close to that in contingency funding,” Rollins said. “We’ve got to get this government open.”She added that “all it takes is a yes on a continuing resolution to keep the government going, and to send that (SNAP) money out to the states.”A so-called clean continuing resolution would extend government funding at current levels. But congressional Democrats have opposed that because Republicans haven’t agreed to negotiate on the expiring health care subsidies.The White House referred CNN to the Office of Management and Budget for comment on the lawsuit. An OMB spokesperson said in a statement that “Democrats chose to shut down the government knowing full well that SNAP would soon run out of funds. It doesn’t have to be this way, and it’s sad they are using the families who rely on it as pawns.”Democratic attorney general: ‘This is wrong’The Democratic-run states filed the lawsuit in Massachusetts federal court. Court records indicate the case was randomly assigned to District Judge Indira Talwani, an Obama appointee who was confirmed in a bipartisan and unanimous Senate vote in 2014.Congress approved $6 billion for a “SNAP-specific contingency fund” in the spending bill that averted a shutdown in March, the lawsuit notes. The lawsuit also points out that, as recently as September, the USDA website identified these funds as part of its plan to keep the food stamp payments flowing in case of a government shutdown.North Carolina Attorney General Jeff Jackson, a Democrat, accused the Trump administration of using SNAP benefits “to play shutdown politics” at a news conference Tuesday announcing his support for the lawsuit.”The truth is the department has the money,” Jackson said, adding, “They are looking to ratchet up the pain in an already painful moment. This is wrong, and it’s against the law.”

    A coalition of 25 Democratic-run states sued the Trump administration Tuesday to prevent billions of dollars of cuts to federal food assistance that are set to kick in this weekend.

    Democratic attorneys general and governors from 25 states and Washington, D.C., claimed in the lawsuit that the Trump administration was threatening “illegal” cuts to SNAP, the Supplemental Nutrition Assistance Program, commonly known as food stamps.

    The U.S. Department of Agriculture, which oversees the program for 42 million Americans, “cannot simply suspend all benefits indefinitely, while refusing to spend funds from available appropriations for SNAP benefits for eligible households,” the lawsuit claims.

    The Trump administration has argued it does not have the power to use that pot of existing money — known as its contingency fund — to cover the SNAP program beyond Saturday, because of the federal government shutdown.

    “The contingency fund is not available to support FY 2026 regular benefits, because the appropriation for regular benefits no longer exists,” officials in the Department of Agriculture wrote in a memo last week.

    The risk of tens of millions of Americans losing food aid has triggered intense anxiety across Washington, as the government shutdown nears the one-month mark.

    Top lawmakers from both parties acknowledge it would be the most significant impact of the shutdown to date, with House Speaker Mike Johnson privately warning his GOP members on a call Tuesday that the pain was about to spike for everyday Americans.

    Senate Democrats have now voted 13 times to block a GOP funding bill because it does not include their separate demands on extending health care subsidies. But GOP leaders have refused to negotiate on the subsidies until the government reopens, leaving both parties in a bitter stalemate with no clear way out.

    Democrats have been unflinching in their stance, despite the looming Saturday deadline for the food aid. They argue that President Donald Trump has sought to “weaponize” the food assistance program, intentionally choosing not to fund the aid to pressure Democrats to yield.

    Fight over food aid

    Shortly after the lawsuit was filed Tuesday, Agriculture Secretary Brooke Rollins told CNN that there isn’t enough contingency funding to cover SNAP benefits for November, which she said would cost about $9.2 billion.

    “As of today, that $9.2 billion, we don’t even have close to that in contingency funding,” Rollins said. “We’ve got to get this government open.”

    She added that “all it takes is a yes on a continuing resolution to keep the government going, and to send that (SNAP) money out to the states.”

    A so-called clean continuing resolution would extend government funding at current levels. But congressional Democrats have opposed that because Republicans haven’t agreed to negotiate on the expiring health care subsidies.

    The White House referred CNN to the Office of Management and Budget for comment on the lawsuit. An OMB spokesperson said in a statement that “Democrats chose to shut down the government knowing full well that SNAP would soon run out of funds. It doesn’t have to be this way, and it’s sad they are using the families who rely on it as pawns.”

    Democratic attorney general: ‘This is wrong’

    The Democratic-run states filed the lawsuit in Massachusetts federal court. Court records indicate the case was randomly assigned to District Judge Indira Talwani, an Obama appointee who was confirmed in a bipartisan and unanimous Senate vote in 2014.

    Congress approved $6 billion for a “SNAP-specific contingency fund” in the spending bill that averted a shutdown in March, the lawsuit notes. The lawsuit also points out that, as recently as September, the USDA website identified these funds as part of its plan to keep the food stamp payments flowing in case of a government shutdown.

    North Carolina Attorney General Jeff Jackson, a Democrat, accused the Trump administration of using SNAP benefits “to play shutdown politics” at a news conference Tuesday announcing his support for the lawsuit.

    “The truth is the department has the money,” Jackson said, adding, “They are looking to ratchet up the pain in an already painful moment. This is wrong, and it’s against the law.”

    [ad_2]

    Source link

  • Trump uses repeated funding cuts to pressure California, complicating state’s legal fight

    [ad_1]

    The federal Office for Victims of Crime announced in the summer that millions of dollars approved for domestic violence survivors and other crime victims would be withheld from states that don’t comply with the Trump administration’s immigration policies.

    California, 19 other states and the District of Columbia sued, alleging that such preconditions are illegal and would undermine public safety.

    The administration then took a different tack, announcing that community organizations that receive such funding from the states — and use it to help people escape violence, access shelter and file for restraining orders against their abusers — generally may not use it to provide services to undocumented immigrants.

    California and other states sued again, arguing that the requirements — which the administration says the states must enforce — are similarly illegal and dangerous. Advocates agreed, saying screening immigrant women out of such programs would be cruel.

    The repeated lawsuits reflect an increasingly familiar pattern in the growing mountain of litigation between the Trump administration, California and other blue states.

    Since President Trump took office in January, his administration has tried to force the states into submission on a host of policy fronts by cutting off federal funding, part of a drive to bypass Congress and vastly expand executive power. Repeatedly when those cuts have been challenged in court, the administration has shifted its approach to go after the same or similar funding from a slightly different angle — prompting more litigation.

    The repeated lawsuits have added complexity and volume to an already monumental legal war between the administration and states such as California, one that began almost immediately after Trump took office and is ongoing, as the administration once again threatens major cuts amid the government shutdown.

    The White House has previously dismissed California’s lawsuits as baseless and defended Trump’s right to enact his policy agenda, including by withholding funds. Asked about its shifting strategies in some of those cases, Abigail Jackson, a White House spokeswoman, said the administration “has won numerous cases regarding spending cuts at the Supreme Court and will continue to cut wasteful spending across the government in a lawful manner.”

    Other administration officials have also defended its legal tactics. During a fight over frozen federal funding earlier this year, for instance, Vice President JD Vance wrote on social media that judges “aren’t allowed to control the executive’s legitimate power” — sparking concerns about a constitutional crisis.

    California Atty. Gen. Rob Bonta said the pattern is a result of Trump overstating his power to control federal funding and use it as a weapon against his political opponents, but also of his dangerous disregard for the rule of law and the authority of both Congress and federal judges. His office has sued the administration more than 40 times since January, many times over funding.

    “It is not something that you should have to see, that a federal government, a president of the United States, is so contemptuous of the rule of law and is willing to break it and break it again, get told by a court that they’re violating the law, and then have to be told by a court again,” Bonta said.

    And yet, such examples abound, he said. For example, the Justice Department’s repeated attempts to strip California of crime victim funding echoed the Department of Homeland Security’s repeated attempts recently to deny the state disaster relief and anti-terrorism funding, Bonta said.

    Homeland Security officials first told states that such funding would be conditioned on their complying with immigration enforcement efforts. California and other states sued, and a federal judge rejected such preconditions as unconstitutional.

    The administration then notified the states that refused to comply, including California, that they would simply receive less money — to the tune of hundreds of millions of dollars — while states that cooperate with immigration enforcement would receive more.

    California and other Democratic-led states sued again, arguing this week that the shifting of funds was nothing more than the administration circumventing the court’s earlier ruling against the conditioning of funds outright.

    Bonta’s office cited a similar pattern in announcing Thursday that the Trump administration had backed off major cuts to AmeriCorps funding. The win came only after successive rounds of litigation by the state and others, Bonta’s office noted, including an amended complaint accusing the administration of continuing to withhold the funding despite an earlier court order barring it from doing so.

    Bonta said such shifting strategies were the work of a “consistently and brazenly lawless and lawbreaking federal administration,” and that his office was “duty-bound” to fight back and will — as many times as it takes.

    “It can’t be that you take an action, are held accountable, a court finds that you’ve acted unlawfully, and then you just take another unlawful action to try to restrict or withhold that same funding,” he said.

    Erwin Chemerinsky, dean of UC Berkeley Law, said he agreed with Bonta that there is “a pattern of ignoring court orders or trying to circumvent them” on the part of the Trump administration.

    And he provided another example: a case in which he represents University of California faculty and researchers challenging Trump administration cuts to National Science Foundation funding.

    Office of Management and Budget Director Russell Vought talks to reporters outside the White House on Monday, accompanied by House Speaker Mike Johnson, left, Senate Majority Leader John Thune and Vice President JD Vance.

    (Alex Brandon / Associated Press)

    After a judge blocked the administration from terminating that funding, the Trump administration responded by declaring that the funds were “suspended” instead, Chemerinsky said.

    The judge then ruled the administration was violating her order against termination, he said, as “calling them suspensions rather than terminations changed nothing.”

    Mitchel Sollenberger, a political science professor at University of Michigan-Dearborn and author of several books on executive powers, said Trump aggressively flexing those powers was expected. Conservative leaders have been trying to restore executive authority ever since Congress reined in the presidency after Watergate, and Trump took an aggressive approach in his first term, too, Sollenberger said.

    However, what Trump has done this term has nonetheless been stunning, Sollenberger said — the result of a sophisticated and well-planned strategy that has been given a clear runway by a Supreme Court that clearly shares a belief in an empowered executive branch.

    “It’s like watching water run down, and it tries to find cracks,” Sollenberger said. “That’s what the Trump administration is doing. It’s trying to find those cracks where it can widen the gap and exercise more and more executive power.”

    Bonta noted that the administration’s targeting of blue state funding began almost immediately after Trump took office, when the Office of Management and Budget issued a memo asserting that vast sums of federal funding for all sorts of programs were being frozen as the administration assessed whether the spending aligned with Trump’s policy goals.

    California and other states sued to block that move and won, but the administration wasn’t swayed from the strategy, Bonta said — as evidenced by more recent events.

    On Wednesday, as the government shutdown over Congress’ inability to pass a funding measure set in, Russell Vought — head of the Office of Management and Budget and architect of the Trump administration’s purse-string policies — announced on X that $8 billion in funding “to fuel the Left’s climate agenda” was being canceled. He then listed 16 blue states where projects will be cut.

    Vought had broadly outlined his ideas for slashing government in Project 2025, the right-wing playbook for Trump’s second term, which Trump vigorously denied any connection to during his campaign but has since broadly implemented.

    On Thursday, Trump seemed to relish the opportunity, amid the shutdown, to implement more of the plan.

    “I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut, and whether or not those cuts will be temporary or permanent,” Trump posted online. “I can’t believe the Radical Left Democrats gave me this unprecedented opportunity.”

    Bonta said Wednesday that his office had no plans to get involved in the shutdown, which he said was caused by Trump and “for Trump to figure out.” But he said he was watching the battle closely.

    Sen. Adam Schiff (D-Calif.) chalked Vought’s latest cuts up to more illegal targeting of blue states such as California that oppose Trump politically, writing, “Our democracy is badly broken when a president can illegally suspend projects for Blue states in order to punish his political enemies.”

    Cities and towns have also been pushing back against Trump’s use of federal funding as political leverage. On Wednesday, Los Angeles and other cities announced a lawsuit challenging the cuts to disaster funding.

    L.A. City Atty. Hydee Feldstein Soto said the cuts were part of an “unprecedented weaponization” of federal funding by the Trump administration, and that she was proud to be fighting to “preserve constitutional limits on executive overreach.”

    [ad_2]

    Kevin Rector

    Source link

  • Stockton votes to have an independent investigation regarding Wild N’ Out event

    [ad_1]

    The Stockton City Council on Tuesday voted 4-3 to launch an independent investigation into the vice mayor’s involvement with a Wild ‘N Out event. Over the past two months, several arguments have broken out at Stockton City Council meetings, and city leaders have called for at least three investigations into ongoing issues. See a timeline of some of the events that have taken place here. Residents in Stockton have made it loud and clear that they want the infighting to stop and for city council members to get back to business, but some officials argue they must investigate whether funds are being misused.Tuesday night’s council meeting was again filled with multiple residents asking for accountability during public comment. Under the microscope is the comedy/music tour Wild ‘N Out that had a live show at the Adventist Health Arena in May.The show was almost canceled because of some financial troubles, so the city paid $50,000 from a risk mitigation fund to keep the event in Stockton.There have also been concerns raised about Vice Mayor Jason Lee’s role in the show. He helped bring the event to the city and performed in the show.Lee says the money was taken from a fund meant to support events like this, that he wasn’t involved in the city approving the funds, and he didn’t get paid for the event.The mayor of Stockton placed the issue on the agenda for Tuesday’s city council meeting.It’s being recommended that an independent investigation be launched to look into the recent event contracting of the Wild ‘N Out show and to figure out if any violations occurred.There will also be a discussion over a separate investigation into DEI funding and who will oversee it. Vice Mayor Lee wants the state to audit how the interim city manager spent money. Lee claims the money was used to hire a consultant to help the city manager transition into his new role.”I’m going to use the voice that my constituents gave me to advocate for my district,” said Lee during a tense exchange with the mayor during the meeting.Mayor Christina Fugazi says there was no funding specifically earmarked for DEI.It’s still unclear how much the independent investigation will cost the city.See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

    The Stockton City Council on Tuesday voted 4-3 to launch an independent investigation into the vice mayor’s involvement with a Wild ‘N Out event.

    Over the past two months, several arguments have broken out at Stockton City Council meetings, and city leaders have called for at least three investigations into ongoing issues.

    Residents in Stockton have made it loud and clear that they want the infighting to stop and for city council members to get back to business, but some officials argue they must investigate whether funds are being misused.

    Tuesday night’s council meeting was again filled with multiple residents asking for accountability during public comment.

    Under the microscope is the comedy/music tour Wild ‘N Out that had a live show at the Adventist Health Arena in May.

    The show was almost canceled because of some financial troubles, so the city paid $50,000 from a risk mitigation fund to keep the event in Stockton.

    There have also been concerns raised about Vice Mayor Jason Lee’s role in the show. He helped bring the event to the city and performed in the show.

    Lee says the money was taken from a fund meant to support events like this, that he wasn’t involved in the city approving the funds, and he didn’t get paid for the event.

    The mayor of Stockton placed the issue on the agenda for Tuesday’s city council meeting.

    It’s being recommended that an independent investigation be launched to look into the recent event contracting of the Wild ‘N Out show and to figure out if any violations occurred.

    There will also be a discussion over a separate investigation into DEI funding and who will oversee it.

    Vice Mayor Lee wants the state to audit how the interim city manager spent money.

    Lee claims the money was used to hire a consultant to help the city manager transition into his new role.

    “I’m going to use the voice that my constituents gave me to advocate for my district,” said Lee during a tense exchange with the mayor during the meeting.

    Mayor Christina Fugazi says there was no funding specifically earmarked for DEI.

    It’s still unclear how much the independent investigation will cost the city.

    See more coverage of top California stories here | Download our app | Subscribe to our morning newsletter | Find us on YouTube here and subscribe to our channel

    [ad_2]

    Source link

  • L.A. City Council votes to protect tenants while they await rental assistance

    L.A. City Council votes to protect tenants while they await rental assistance

    [ad_1]

    After a lengthy discussion, the Los Angeles City Council voted Friday to prohibit the eviction of tenants whose rental assistance applications have been approved but who have not yet received their funds.

    The move comes days before a deadline for tenants to pay pandemic-era rental arrears. Under the city’s plan to end COVID-19 eviction protections, unpaid rent accumulated from Oct. 1, 2021, to Jan. 31, 2023, is due Thursday.

    More than 25,000 applicants are waiting to find out if they are eligible for funds from the United to House L.A. Emergency Renters Assistance Program, which provides up to six months of unpaid rent for qualified and selected renters and property owners.

    Roughly 3,200 applicants were approved for the program, but most have not received their aid. Only 25% of the $30.4 million allocated for emergency assistance has been distributed.

    Renters who did not apply for the program or were not approved could face eviction if they do not make their outstanding payments by Thursday. The deadline to apply was in October.

    The City Council motion, introduced by Councilmembers Eunisses Hernandez and Paul Krekorian, originally aimed to protect every renter who applied to the United to House L.A. program, regardless of their application status.

    After pushback from groups representing property owners, the motion was amended to prohibit evictions only for applicants whose applications have been approved. Those individuals will be protected from eviction for 120 days after Feb. 1 while their rental assistance funds are processed.

    “Tenants who have already been approved for emergency rental assistance should not be evicted while they’re waiting for their checks,” Krekorian said. “Their landlords are going to get paid, so they shouldn’t be putting tenants out just because the city took a little longer to get them the money.”

    Applicants who have not yet been approved but are qualified will receive the same protections once granted approval.

    Daniel Yukelson, executive director of the Apartment Assn. of Greater Los Angeles, said the motion was unfair to small property owners who rely on rent payments for their livelihood.

    Before the amendment was enacted, the motion would have prevented landlords from evicting tenants for an indefinite period of time while they waited for their application to be processed.

    “Owners would not be participating in the program if they knew this would be the ramification,” he said. “It’s not as egregious as it would have been without this amendment.”

    Fred Sutton, senior vice president of local public affairs for the California Apartment Assn., also said the amendment was key. But he’s still wary of how long it might take for renters and owners to receive their money.

    “It’s just a matter of those funds getting to the individual,” he said, “but we are very concerned about the procedural bureaucracy that takes so long to get these dollars out the door.”

    Sutton also criticized the “rushed” timeline of the City Council motion, which was introduced on Wednesday.

    “There was one business day to review a very broad and somewhat complicated motion and on a procedural level, that shouldn’t be acceptable,” he said.

    Hernandez said it was necessary to get the motion approved prior to the rent payment deadline.

    “With the Feb. 1 rent debt deadline looming and thousands of tenants at risk of eviction, it’s incumbent on us to do everything we can to stop the eviction-to-homelessness pipeline and keep people in their homes,” she said. “The city can and must do more to keep Angelenos housed.”

    [ad_2]

    Caroline Petrow-Cohen

    Source link

  • Oaktree Capital calls commercial real estate ‘most acute area of risk’ right now

    Oaktree Capital calls commercial real estate ‘most acute area of risk’ right now

    [ad_1]

    Distressed-debt giant Oaktree Capital sees big opportunities in credit unfolding over the next few years as a wall of debt comes due.

    Oaktree’s incoming co-chief executives Armen Panossian, head of performing credit, and Bob O’Leary, portfolio manager for global opportunities, see a roughly $13 trillion market that will be ripe for the picking.

    Within that realm is high-yield bonds, BBB-rated bonds, leveraged loans and private credit — four areas of the market that have only mushroomed from their nearly $3 trillion size right before the 2007-2008 global financial crisis.

    “Clearly, the most acute area of risk right now is commercial real estate,” the co-CEOs said in a Wednesday client note. “That’s because the maturity wall is already upon us and it’s not going to abate for several years.”

    More than $1 trillion of commercial real-estate loans are set to come due in 2024 and 2025, according to the Mortgage Bankers Association.

    A retreat in the benchmark 10-year Treasury yield
    BX:TMUBMUSD10Y,
    to about 4.1% on Wednesday from a 5% peak in October, has provided some relief even though many borrowers likely will still struggle to refinance.

    Related: Commercial real estate a top threat to financial system in 2024, U.S. regulators say

    “There’s a need for capital, especially for office properties where there are vacancies, rental growth hasn’t materialized, or the rate of borrowing has gone up materially over the last three years. This capital may or may not be readily available, and for certain types of office properties, it absolutely isn’t available,” the Oaktree team said.

    With that backdrop, the firm expects to dust off its playbook from the financial crisis and acquire portfolios of commercial real-estate loans from banks, but also plans to participate in “credit-risk transfer” deals that help lenders reduce exposure.

    Oaktree also sees opportunities brewing in private credit, as well as in high-yield and leveraged loans, where “several hundred” of the estimated 1,500 companies that have issued such debt are likely “to be just fine” even if defaults rise, they said.

    Another area to watch will be the roughly $26 trillion Treasury market, where Oaktree has some concerns “about where the 10-year Treasury yield goes from here” — given not only the U.S. budget deficit and the deluge of supply that investors face, but also how foreign buyers, once the “largest owners in prior years, may be tapped out.”

    Related: Here are two reasons why the 10-year Treasury yield is back above 4%

    U.S. stocks
    SPX

    DJIA

    COMP
    fell Wednesday after strong retail-sales data for December pointed to a resilient U.S. economy, despite the Federal Reserve having kept its policy rate at a 22-year high since July.

    [ad_2]

    Source link

  • After Bitcoin ETFs, watch for the next most popular crypto to go the same route

    After Bitcoin ETFs, watch for the next most popular crypto to go the same route

    [ad_1]

    After long-awaited spot bitcoin exchange-traded funds made their debut this week, investors are now weighing the prospects of eventual approval of similar ether ETFs.

    The U.S. Securities and Exchange Commission on Wednesday greenlighted 11 spot bitcoin
    BTCUSD,
    -1.58%

    ETFs for the first time. The products, which made its debut trading on Thursday, logged a relatively strong first day

    However, bitcoin fell 6.8% on Friday, leaving it with a 3.2% gain over the past seven days, according to CoinDesk data. It underperformed ether
    ETHUSD,
    +1.82%
    ,
    which rose 17.6% over the past seven days while it declined 1.2% on Friday.  

    The news about bitcoin ETFs was mostly priced in, while investors are now looking past it to a potential approval of ether ETFs, analysts said.

    “I see value in having an ETH ETF,” Larry Fink, chief executive at the world’s largest asset manager BlackRock, told CNBC’s Squawk Box on Friday. BlackRock, which just launched its iShares bitcoin Trust
    IBIT,
    in November filed an application for a spot ether ETF.

    “It’s hard to know exactly what the U.S. regulators would do” about ether ETF applications, said Alonso de Gortari, chief economist at Mysten Labs, an internet infrastructure company.

    However, “I would expect that once you open the door, it becomes easier and I think the industry is very excited about it,” de Gortari said. If bitcoin ETFs see an impressive institutional inflow in the coming months, it could make such products more established and set a good precedent for other crypto ETF applications, he said.

    Read: Vanguard’s decision to shun bitcoin ETFs triggers backlash — with some customers moving to crypto-friendly competitors like Fidelity

    Also see: Why the debut of bitcoin ETFs could be bad news for crypto stocks, futures ETFs

    The enormous competition and huge inflows into bitcoin ETFs will only boost investors’ interests in an ether ETF, according to Paul Brody, EY’s global blockchain leader. “There’s no doubt that ETH is the next big market and has immediately become a priority for financial services companies,” Brody said in emailed comments.

    Compared with bitcoin, the Ethereum blockchain offers more utility and has unique advantages, noted Fadi Aboualfa, head of research at digital assets custodian Copper. 

    Sandy Kaul, head of digital asset and industry advisory services at Franklin Templeton, said she eventually expects the arrival of ETFs that track a basket of cryptocurrencies. Such products, instead of those based on single crypto, would dominate the space if they are approved, she said.  

    “Just like the S&P 500 has 500 stocks in it, right? You don’t have just one stock.” Kaul said in a phone interview. The arrival of a bitcoin ETF, is just a “baby step into really beginning to think about the future market structure of crypto,” Kaul added. 

    However, not everyone is that optimistic. Will McDonough, founder and chairman of Corestone Capital, said the approval of an Ethereum ETF has “a long way to go.” 

    SEC chairman Gary Gensler previously said bitcoin was the only cryptocurrency he was prepared to publicly label a commodity, rather than a security. 

    The agency also went after companies that offered crypto staking, which allows investors to earn yields by locking their coins to secure blockchains such as Ethereum. The SEC shut down crypto exchange Kraken’s staking business in the U.S. last year.  

    One possibility is that “companies will be able to offer an ETH ETF, but they will not be allowed to stake that ETH and earn yield,” noted EY’s Brody.

    [ad_2]

    Source link

  • Why wealthy investors put $125 billion into this new type of private-equity fund last year

    Why wealthy investors put $125 billion into this new type of private-equity fund last year

    [ad_1]

    Private-equity funds aimed at wealthy individuals continue to draw in fresh capital as the universe of alternative investments grows beyond its roots serving endowments, pension funds and other institutions, according to industry data.

    Registered funds that take investments from individuals and smaller institutions rose by about $125 billion in 2022 from the previous year to total assets under management (AUM) of $425 billion, according to data from private-equity investor and data provider Hamilton Lane Inc. HLNE.

    The…

    Master your money.

    Subscribe to MarketWatch.

    Get this article and all of MarketWatch.

    Access from any device. Anywhere. Anytime.


    Subscribe Now

    [ad_2]

    Source link

  • Soros snaps up tech stocks in Q3, but dumps some of the biggest names

    Soros snaps up tech stocks in Q3, but dumps some of the biggest names

    [ad_1]

    Soros Fund Management, the investment firm founded by billionaire George Soros, took new positions or bulked up on IPOs and a number of tech names during the third quarter.

    But it sold off small holdings of some of the largest — like Nvidia Corp. and Microsoft Corp. — as well as electric-vehicle maker Rivian Automotive.

    According to a filing on Tuesday, the firm during the third quarter bought up 325,000 shares of chip designer Arm Holdings
    ARM,
    +3.37%
    ,
    which went public in September, for $17.4 million. It also bought smaller stakes in recent IPOs such as Maplebear Inc.
    CART,
    +1.25%
    ,
    better known as grocery-delivery platform Instacart, and digital-marketing firm Klaviyo Inc.
    KVYO,
    +6.90%
    .
    Those purchases were disclosed as investors remain cautious on new IPOs.

    Elsewhere, the fund took a new position, of around 41,000 shares, in Apple Inc.
    AAPL,
    +1.43%
    .
    And it did so as well for Datadog Inc.
    DDOG,
    +4.58%
    ,
    buying 62,000 shares during the quarter. It also bought up 574,962 shares of Splunk, and took fresh positions in Snowflake Inc.
    SNOW,
    +4.51%

    and Taiwan Semiconductor
    TSM,
    +2.58%
    .

    Soros also packed on more to some of its other tech holdings. It added 125,000 shares to its stake in Uber Technologies Inc.
    UBER,
    +3.14%
    ,
    boosting its position by 16.6% for a total of 878,955 shares. It also bought 42,000 more shares of another gig-economy player, DoorDash Inc.
    DASH,
    +4.37%
    ,
    a 30.9% increase for 178,075 shares.

    While Soros boosted its stake in General Motors
    GM,
    +4.83%
    ,
    it sold off its 4.2 million shares in Rivian
    RIVN,
    +4.39%
    .
    The firm also sold off its positions — of roughly 10,000 shares apiece — in tech giants Microsoft
    MSFT,
    +0.98%

    and Nvidia
    NVDA,
    +2.13%
    .

    Soros Fund Management also sold off its stake in Walt Disney Co.
    DIS,
    +1.82%
    .

    [ad_2]

    Source link

  • What defines a mass shooting victim? Some Monterey Park survivors left out of donations

    What defines a mass shooting victim? Some Monterey Park survivors left out of donations

    [ad_1]

    Lloyd Gock was attending a Lunar New Year celebration at the Star Ballroom Dance Studio in Monterey Park in January when Huu Can Tran opened fire, killing 11 people and wounding nine others.

    Gock survived by hiding under a table, but saw his friends shot and killed. When the gunfire stopped, blood and bodies littered the dance floor. Since the Jan. 21 massacre, the 67-year-old Alhambra resident has struggled with the psychological trauma, making it difficult for him to focus on work. After returning to his job, he said, his lack of focus made him lose out on “very big” sales contracts for his clothing company, Montana Jeans.

    But when he found out about a GoFundMe campaign created to raise money for victims of the attack, he was surprised to learn he and other survivors didn’t qualify because they were not physically injured.

    “We begged them so many times to include us,” he said. “You don’t have to give us a lot of money. Of course, a big chunk of that goes to the dead and the injured, but we deserve something too. The money comes from the public to us. That’s the biggest injustice that we feel.”

    Within three weeks of the massacre, Asian Americans Advancing Justice Southern California — a legal aid and civil rights organization — raised more than $1 million for the Monterey Park Lunar New Year Victims Fund, greatly surpassing the group’s $200,000 goal. It was the largest fundraising effort created for the victims of the shooting.

    Ultimately, the group and its partner organizations decided the money should go only to the families of the dead and injured because they — along with the nearly 11,000 donors — had already been informed that was the plan. The local organization had teamed up with the National Compassion Fund, a group created by victims of previous mass casualty crimes, to verify the identities of the victims and figure out how to distribute the funds.

    “To go and change it and say, ‘Actually we’re going to expand the pool now and add eyewitness victims and we didn’t know how many there would be still,’ we felt that would be unfair to those we made commitments to,” said Connie Chung Joe, chief executive of AJSOCAL.

    Families of the deceased received about $10,000 soon after the shooting to address any immediate financial concerns, Joe said.

    Lloyd Gock at the entrance of Lai Lai Ballroom & Studio in Alhambra. Gock started a monthly support group with the survivors of the Monterey Park shooting.

    (Francine Orr / Los Angeles Times)

    No amount of money can heal the wounds from a mass shooting, but some survivors of the Monterey Park tragedy who suffer lingering psychological trauma are upset that they have been left out of the distribution of funds.

    Gock, who started a monthly support group with nearly two dozen other survivors, said he feels ignored.

    After mass shootings, fundraisers often spring up online, amassing millions of dollars for the families of those killed and the survivors of the crimes. But what to do with the raised money, and how to distribute it, hasn’t always been straightforward. At times, it has been a point of contention between organizers and the victims they say they’re trying to help.

    Such disputes also came up in the aftermath of the 1999 Columbine High School shooting, the 2012 movie theater attack in Aurora, Colo., the 2014 Isla Vista killings and the 2022 elementary school shooting in Uvalde, Texas.

    Anita Busch, a co-founder of the National Compassion Fund whose cousin was killed in Aurora, said she believes the best practice for fundraising is to consider everyone who survived a mass shooting.

    “We feel like anybody who’s in a mass shooting, everybody in the Aurora theater, that was one family,” she said. “Everybody being shot at or running for their lives or having loved ones killed next to them. The people present were not included as victims, and it’s re-victimizing.”

    The GoFundMe created after the Star Ballroom shooting raised about $1.4 million, according to Peter Ng, chief executive of Chinatown Service Center, one of the nonprofits involved in the fundraising.

    “We begged them so many times to include us in,” he said. “You don’t have to give us a lot of money. Of course, a big chunk of that goes to the dead and the injured but we deserve something too. The money comes from the public to us. That’s the biggest injustice that we feel.”

    — Lloyd Gock, a 67-year-old Alhambra resident who survived the Monterey Park shooting but got none of the GoFundMe money collected for victims.

    Victims received different amounts depending on the severity of injury, if they were hospitalized and for how long, Joe said.

    Gock ended up applying for and receiving a check from the Monterey Park Community Healing Fund, another victims fund created by the city.

    City Treasurer Amy Lee, who oversees the fund, said that 37 victims who applied received about $3,000 each, with the checks going out in late October. The fund is still accepting donations and so far has raised about $193,000. Any money left over will go toward grants for nonprofits in Monterey Park that focus on community engagement, mental health services and violence education.

    “We were just gonna do community healing, but there were so many people hurting from this incident so we felt we had to do something,” Lee said. “Even if it was small amount to acknowledge that they were there and they are suffering.”

    After opening fire at the Monterey Park dance studio, the gunman went to a second dance facility, Lai Lai Ballroom & Studio in nearby Alhambra, which officials said appeared to be his next target. But he was disarmed by an employee before he could fire another shot. A fund was created in the name of the employee, Brandon Tsay, to help support mental health organizations.

    Some organizations, such as the Colorado Healing Fund, have faced backlash for not distributing all of the money raised directly to the injured or to families who lost loved ones, but instead choosing to work with groups that address other victim needs.

    Kevin McFatridge, executive director of the Colorado fund, said the group reserves about 10% of donations for long-term needs, such as hotel and airfare or if survivors need to attend a trial. The rest goes toward “acute” or “intermediate” needs, such as for funerals and memorials. McFatridge’s organization also tends to include survivors who weren’t physically injured in the victim pool.

    “When we cut a check, we cut a disbursement to victim organizations and they cut the checks directly to the victims and survivors,” he said.

    After the 2012 movie theater shooting, attorney Kenneth Feinberg — who served as special master for the Aurora Victim Relief Fund — announced that the more than $5 million raised would go only to the families of the dead and to those who were physically injured.

    Feinberg, along with his colleague Camille Biros, has handled compensation funds for victims of the Sept. 11 terrorist attacks, the BP Deepwater Horizon oil spill, the Boston Marathon bombing and the Virginia Tech, Sandy Hook and Orlando Pulse nightclub shootings.

    To avoid confusion and hard feelings among victims, Feinberg said, he and Biros have hosted community meetings where they share plans for fund distribution and take feedback. He said that although some people have expressed discontent with the proposals, there has not been a serious outcry.

    “The reason we promote transparency is so nobody can later claim that they didn’t know about the details of the program and how it would work,” he said. “We want buy-in from the victims in the community.”

    With the Monterey Park shooting donations, Busch said, campaign organizers had already made it clear to whom the money would go — the families of the deceased and the physically injured — and so they “have to follow donor intent.”

    “They can’t go back on that,” she said.

    Joe, of Asian Americans Advancing Justice Southern California, said the group also felt “burdened” by how long the process would take if it expanded the pool of victims.

    She said she understood — and regretted —that it can be difficult for survivors in communities that aren’t English-proficient to apply for help from the California Victim Compensation Board. That agency provides up to $70,000 to qualifying victims of violence, who must fill out forms that include proof for crime-related expenses such as mental health treatment, income loss or job training.

    “I definitely feel for them,” Joe said. “They are victims. Just because you weren’t physically injured doesn’t mean you don’t have trauma and emotional and mental scars.”

    Gock said that he didn’t feel he would qualify for funding from the California Victim Compensation Board and doesn’t know of any uninjured survivors who have gotten money from it.

    “Most of us had to go back to work the next day [after the shooting],” he said. “The only way you can get any money from them is if you were hurt and not able to work because of what happened.”

    Eric Chen, a San Gabriel pastor and educator who has been helping the survivors get access to resources, said it’s difficult for them to apply for compensation on top of grappling with lasting trauma.

    “When you’re a victim, you want to get the help but it’s very difficult because imagine going through all the trauma and then trying to prove your income, trying to do your taxes,” he said.

    The family of Mymy Nhan, 65, who was the first person killed outside the Star Ballroom studio, plans to use some of the money from the GoFundMe donations to create the Mymy Nhan Legacy Fund. The family plans to donate to Seniors Fight Back, which empowers AAPI seniors to defend themselves against violence.

    Fonda Quan, Nhan’s niece, declined to specify how much money the family received.

    Quan said she empathized with the survivors who weren’t physically injured but were psychologically scarred by the shooting. She encouraged them to go to the Monterey Park Hope Resiliency Center for support groups, counseling and other assistance.

    “Aside from physical injury, I can totally see the emotional trauma being a witness of such a tragedy,” she said. “I can’t imagine being there physically and seeing all of that unfold. That’s definitely something that people could possibly live with for a very long time.”

    “I definitely feel for them,” Joe said. “They are victims. Just because you weren’t physically injured doesn’t mean you don’t have trauma and emotional and mental scars.”

    — Connie Chung Joe, chief executive of the Asian Americans Advancing Justice Southern California, which launched a GoFundMe account for people who were shot or injured in the shooting but not for witnesses of the mass killing.

    Kristenne Reidy, the daughter of Monterey Park shooting victim Valentino Alvero, 68, also declined to divulge the total amount her family received, but said they used it for burial and other expenses.

    “When this happened, we didn’t expect to receive any help,” she said. “The fact that we did, not only helped us out financially, but to know that we had so much support from strangers and community members.”

    Sam, 78, an Arcadia resident, was sitting on the left side of the ballroom, about five tables from the doorway, when he heard the gunshots. He dropped to the ground and hid under a table. The person in front of him was bleeding.

    After the noises stopped, Sam, who asked that his last name not be published, hurried outside and drove home, leaving his phone behind. As he was driving off, he saw police arrive at the scene.

    “I was so scared,” he said. “I didn’t tell my wife what was taking place in the Star Ballroom as I didn’t want her to worry. I thought I was lucky, even though I was scared to death.”

    Sam went back to dancing at another studio two weeks after the shooting, but is often worried when he’s in a large gathering or crowd. He wonders whether he’s putting his life in danger.

    Sam said he believes he and the other physically uninjured survivors should have received some of the donations for the psychological damage they still endure.

    “Just as a ship or aircraft, if there is an accident, the survivors would also be affected by it,” he said. “The survivors were scared and mentally hurt. They found it hard to believe in other people, and some of them gave up any effort in life and work.”

    [ad_2]

    Summer Lin

    Source link

  • WSJ News Exclusive | Hedge Fund Two Sigma Is Hit by Trading Scandal

    WSJ News Exclusive | Hedge Fund Two Sigma Is Hit by Trading Scandal

    [ad_1]

    A researcher at Two Sigma Investments adjusted the hedge fund’s investing models without authorization, the firm has told clients, leading to losses in some funds, big gains in others and fresh regulatory scrutiny.

    The researcher, Jian Wu, a senior vice president at New York-based Two Sigma, was trying to boost his compensation, Two Sigma has told clients, without identifying Wu. He made changes over the past year that resulted in a total of $620 million in unexpected gains and losses, according to people close to the matter and investor letters. Two Sigma has placed Wu on administrative leave.

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

    [ad_2]

    Source link

  • Long U.S. dollar now seen as the most crowded trade, but bodes ill for the greenback

    Long U.S. dollar now seen as the most crowded trade, but bodes ill for the greenback

    [ad_1]

    Long positions in the U.S. dollar is now considered the most crowded trade, according to a survey conducted by the Bank of America with global fund managers, but the greenback is likely near a peak, the bank said.

    The bank surveyed 67 fund managers managing $997 billion assets under management from the United States, United Kingdom, Continental Europe and Asia from October 6 to 11.

    The response represents a shift from early August as fund managers surveyed became more concerned about interest rates in September, according to the Bank of America note. 

    The latest survey bodes ill for the U.S. dollar
    DXY,
    as the equity rally this year has partially corrected and bond yields risen, after earlier making it to the most crowded trade, according to the bank’s strategists. 

    “We believe USD is near the peak, further strength requires a change in narrative,” the strategists wrote. 

    The ICE U.S. Dollar Index
    DXY,
    which measures the greenback’s strength against a basket of rivals, has slightly pulled back from its highest close in 11 months at 107 reached on Oct. 3, according to FactSet data. The index is mostly flat on Friday at around 106.6.

    Strong economic data in the U.S. coupled with a relatively more hawkish Federal Reserve than other major central banks, could be the most likely reason to support further strength in the dollar, according to the fund managers surveyed.


    BofA Global Research

    Meanwhile, the biggest downside risk to the greenback is if the U.S. economy sees a hard landing which will prompt the Federal Reserve to cut its policy interest rates. 


    BofA Global Research

    Respondents of the survey think that rate cuts are currently underpriced, and they think the Fed is likely to cut rates the most among major central banks. 

    “This should erode faith in USD strength, and suggests that USD longs may indeed be vulnerable,” the strategists noted. 

    [ad_2]

    Source link

  • Dividend stocks are dirt cheap. It may be time to back up the truck.

    Dividend stocks are dirt cheap. It may be time to back up the truck.

    [ad_1]

    The stock market always overreacts, and this year it seems as if investors believe dividend stocks have become toxic. But a look at yields on quality dividend stocks relative to the market underlines what may be an excellent opportunity for long-term investors to pursue growth with an income stream that builds up over the years.

    The current environment, in which you can get a yield of more than 5% yield on your cash at a bank or lock in a yield of 4.57% on a10-year U.S. Treasury note
    BX:TMUBMUSD10Y
    or close to 5% on a 20-year Treasury bond
    BX:TMUBMUSD20Y
    seems to have made some investors forget two things: A stock’s dividend payout can rise over the long term, and so can it is price.

    It is never fun to see your portfolio underperform during a broad market swing. And people have a tendency to prefer jumping on a trend hoping to keep riding it, rather than taking advantage of opportunities brought about by price declines. We may be at such a moment for quality dividend stocks, based on their yields relative to that of the benchmark S&P 500
    SPX.

    Drew Justman of Madison Funds explained during an interview with MarketWatch how he and John Brown, who co-manage the Madison Dividend Income Fund, BHBFX MDMIX and the new Madison Dividend Value ETF
    DIVL,
    use relative dividend yields as part of their screening process for stocks. He said he has never seen such yields, when compared with that of the broad market, during 20 years of work as a securities analyst and portfolio manager.

    Dividend stocks are down

    Before diving in, we can illustrate the market’s current loathing of dividend stocks by comparing the performance of the Schwab U.S. Equity ETF
    SCHD,
    which tracks the Dow Jones U.S. Dividend 100 Index, with that of the SPDR S&P 500 ETF Trust
    SPY.
    Let’s look at a total return chart (with dividends reinvested) starting at the end of 2021, since the Federal Reserve started its cycle of interest rate increases in March 2022:


    FactSet

    The Dow Jones U.S. Dividend 100 Index is made up of “high-dividend-yielding stocks in the U.S. with a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios,” according to S&P Dow Jones Indices.

    The end results for the two ETFs from the end of 2021 through Tuesday are similar. But you can see how the performance pattern has been different, with the dividend stocks holding up well during the stock market’s reaction to the Fed’s move last year, but trailing the market’s recovery as yields on CDs and bonds have become so much more attractive this year. Let’s break down the performance since the end of 2021, this time bringing in the Madison Dividend Income Fund’s Class Y and Class I shares:

    Fund

    2023 return

    2022 return

    Return since the end of 2021

    SPDR S&P 500 ETF Trust

    14.9%

    -18.2%

    -6.0%

    Schwab U.S. Dividend Equity ETF

    -3.8%

    -3.2%

    -6.9%

    Madison Dividend Income Fund – Class Y

    -4.7%

    -5.4%

    -9.9%

    Madison Dividend Income Fund – Class I

    -4.7%

    -5.3%

    -9.7%

    Source: FactSet

    Dividend stocks held up well during 2022, as the S&P 500 fell more than 18%. But they have been left behind during this year’s rally.

    The Madison Dividend Income Fund was established in 1986. The Class Y shares have annual expenses of 0.91% of assets under management and are rated three stars (out of five) within Morningstar’s “Large Value” fund category. The Class I shares have only been available since 2020. They have a lower expense ratio of 0.81% and are distributed through investment advisers or through platforms such as Schwab, which charges a $50 fee to buy Class I shares.

    The opportunity — high relative yields

    The Madison Dividend Income Fund holds 40 stocks. Justman explained that when he and Brown select stocks for the fund their investible universe begins with the components of the Russell 1000 Index
    RUT,
    which is made up of the largest 1,000 companies by market capitalization listed on U.S. exchanges. Their first cut narrows the list to about 225 stocks with dividend yields of at least 1.1 times that of the index.

    The Madison team calculates a stock’s relative dividend yield by dividing its yield by that of the S&P 500. Let’s do that for the Schwab U.S. Equity ETF
    SCHD
    (because it tracks the Dow Jones U.S. Dividend 100 Index) to illustrate the opportunity that Justman highlighted:

    Index or ETF

    Dividend yield

    5-year Avg. yield 

    10-year Avg. yield 

    15-year Avg. yield 

    Relative yield

    5-year Avg. relative yield 

    10-year Avg. relative yield 

    15-year Avg. relative yield 

    Schwab U.S. Dividend Equity ETF

    3.99%

    3.41%

    3.20%

    3.16%

    2.6

    2.1

    1.8

    1.6

    S&P 500

    1.55%

    1.62%

    1.79%

    1.92%

    Source: FactSet

    The Schwab U.S. Equity ETF’s relative yield is 2.6 — that is, its dividend yield is 2.6 times that of the S&P 500, which is much higher than the long-term averages going back 15 years. If we went back 20 years, the average relative yield would be 1.7.

    Examples of high-quality stocks with high relative dividend yields

    After narrowing down the Russell 1000 to about 225 stocks with relative dividend yields of at least 1.1, Justman and Brown cut further to about 80 companies with a long history of raising dividends and with strong balance sheets, before moving further through a deeper analysis to arrive at a portfolio of about 40 stocks.

    When asked about oil companies and others that pay fixed quarterly dividends plus variable dividends, he said, “We try to reach out to the company and get an estimate of special dividends and try to factor that in.” Two examples of companies held by the fund that pay variable dividends are ConocoPhillips
    COP,
    -0.29%

    and EOG Resources Inc.
    EOG,
    +0.52%
    .

    Since the balance-sheet requirement is subjective “almost all fund holdings are investment-grade rated,” Justman said. That refers to credit ratings by Standard & Poor’s, Moody’s Investors Service or Fitch Ratings. He went further, saying about 80% of the fund’s holdings were rated “A-minus or better.” BBB- is the lowest investment-grade rating from S&P. Fidelity breaks down the credit agencies’ ratings hierarchy.

    Justman named nine stocks held by the fund as good examples of quality companies with high relative yields to the S&P 500:

    Company

    Ticker

    Dividend yield

    Relative yield

    2023 return

    2022 return

    Return since the end of 2021

    CME Group Inc. Class A

    CME,
    +0.47%
    2.04%

    1.3

    31%

    -23%

    1%

    Home Depot, Inc.

    HD,
    -0.39%
    2.79%

    1.8

    -3%

    -22%

    -25%

    Lowe’s Cos., Inc.

    LOW,
    +0.27%
    2.17%

    1.4

    3%

    -21%

    -19%

    Morgan Stanley

    MS,
    -1.54%
    4.24%

    2.7

    -3%

    -10%

    -13%

    U.S. Bancorp

    USB,
    -0.25%
    5.89%

    3.8

    -22%

    -19%

    -37%

    Medtronic PLC

    MDT,
    -4.32%
    3.62%

    2.3

    1%

    -23%

    -22%

    Texas Instruments Inc.

    TXN,
    -0.21%
    3.30%

    2.1

    -3%

    -10%

    -12%

    United Parcel Service Inc. Class B

    UPS,
    -0.16%
    4.17%

    2.7

    -8%

    -16%

    -23%

    Union Pacific Corp.

    UNP,
    +1.52%
    2.52%

    1.6

    2%

    -16%

    -15%

    Source: FactSet

    Click on the tickers for more about each company, fund or index.

    Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Now let’s see how these companies have grown their dividend payouts over the past five years. Leaving the companies in the same order, here are compound annual growth rates (CAGR) for dividends.

    Before showing this next set of data, let’s work through one example among the nine stocks:

    • If you had purchased shares of Home Depot Inc.
      HD,
      -0.39%

      five years ago, you would have paid $193.70 a share if you went in at the close on Oct. 10, 2018. At that time, the company’s quarterly dividend was $1.03 cents a share, for an annual dividend rate of $4.12, which made for a then-current yield of 2.13%.

    • If you had held your shares of Home Depot for five years through Tuesday, your quarterly dividend would have increased to $2.09 a share, for a current annual payout of $8.36. The company’s dividend has increased at a compound annual growth rate (CAGR) of 15.2% over the past five years. In comparison, the S&P 500’s weighted dividend rate has increased at a CAGR of 6.24% over the past five years, according to FactSet.

    • That annual payout rate of $8.36 would make for a current dividend yield of 2.79% for a new investor who went in at Tuesday’s closing price of $299.22. But if you had not reinvested, the dividend yield on your five-year-old shares (based on what you would have paid for them) would be 4.32%. And your share price would have risen 54%. And if you had reinvested your dividends, your total return for the five years would have been 75%, slightly ahead of the 74% return for the S&P 500 SPX during that period.

    Home Depot hasn’t been the best dividend grower among the nine stocks named by Justman, but it is a good example of how an investor can build income over the long term, while also enjoying capital appreciation.

    Here’s the dividend CAGR comparison for the nine stocks:

    Company

    Ticker

    Five-year dividend CAGR

    Dividend yield on shares purchased five years ago

    Dividend yield five years ago

    Current dividend yield

    Five-year price change

    Five-year total return

    CME Group Inc. Class A

    CME,
    +0.47%
    9.46%

    2.44%

    1.55%

    2.04%

    20%

    42%

    Home Depot Inc.

    HD,
    -0.39%
    15.20%

    4.32%

    2.13%

    2.79%

    54%

    75%

    Lowe’s Cos, Inc.

    LOW,
    +0.27%
    18.04%

    4.14%

    1.81%

    2.17%

    91%

    109%

    Morgan Stanley

    MS,
    -1.54%
    23.16%

    7.62%

    2.69%

    4.24%

    80%

    108%

    U.S. Bancorp

    USB,
    -0.25%
    5.34%

    3.60%

    2.78%

    5.89%

    -39%

    -26%

    Medtronic PLC

    MDT,
    -4.32%
    6.65%

    2.90%

    2.10%

    3.62%

    -20%

    -9%

    Texas Instruments Inc.

    TXN,
    -0.21%
    11.04%

    5.24%

    3.10%

    3.30%

    59%

    82%

    United Parcel Service Inc. Class B

    UPS,
    -0.16%
    12.23%

    5.56%

    3.12%

    4.17%

    33%

    56%

    Union Pacific Corp.

    UNP,
    +1.52%
    10.20%

    3.37%

    2.07%

    2.52%

    34%

    49%

    Source: FactSet

    This isn’t to say that Justman and Brown have held all of these stocks over the past five years. In fact, Lowe’s Cos.
    LOW,
    +0.27%

    was added to the portfolio this year, as was United Parcel Service Inc.
    UPS,
    -0.16%
    .
    But for most of these companies, dividends have compounded at relatively high rates.

    When asked to name an example of a stock the fund had sold, Justman said he and Brown decided to part ways with Verizon Communications Inc.
    VZ,
    -0.94%

    last year, “as we became concerned about its fundamental competitive position in its industry.”

    Summing up the scene for dividend stocks, Justman said, “It seems this year the market is treating dividend stocks as fixed-income instruments. We think that is a short-term issue and that this is a great opportunity.”

    Don’t miss: How to tell if it is worth avoiding taxes with a municipal-bond ETF

    [ad_2]

    Source link

  • Are we bored yet? Retail investors slowing their roll on AI stocks, according to this chart

    Are we bored yet? Retail investors slowing their roll on AI stocks, according to this chart

    [ad_1]

    There are more signs that investors are cooling a bit on the hot artificial intelligence play, though no one appears ready to let go of their Nvidia stock just yet.

    That’s according to Vanda Research analysts, who shared a chart of their latest weekly data showing how retail investor’s net purchases of AI-themed stocks is “steadily waning”:

    Marco Iachini, senior vice president, Giacomo Pierantoni, head of data and Lucas Mantle, data scientist at Vanda, said they’ve also noticed fewer news stories covering the sector as well, in their Vandatrack weekly comment that published Thursday.

    The fervor for AI-related stocks and technology took off earlier this year, with a pinnacle moment in May when Nvidia
    NVDA,
    -2.89%

    made big predictions on a boom for demand for its AI-related chips. Shares of the company are still up 211% so far this year, but enthusiasm for many tech stocks faded in August as China and interest rate-hike worries cropped up and some companies stressed AI benefits might not happen right away.

    That said, Vanda analysts don’t expect Nvidia will feel the hurt of any such waning interest. They point out that short interest in the chip maker has seen a “considerable decline,” in line with its soaring stock price.

    “This phenomenon suggests that bearish institutional investors, including long/short hedge funds, may have been compelled to cover their short positions,” said Iachini and his team. “As a result they are unlikely to want to sell the stock in the near term barring strong conviction to do so.”

    “It is crucial to recognize that a slowdown in retail demand, by itself, is improbable to trigger substantial price movements, without active bearish participation from institutional investors,” they added.

    However, the story is different for smaller AI-related companies such as smaller-cap C3.ai
    AI,
    -2.78%

    as seen in their chart:

    For C3.ai, they see a selling trend persisting in coming weeks. The AI software group’s shares are up 154% so far this year, but down 9% this month, taking a hit recently from solid quarterly results that came with forecasts for a bigger-than-expected full year loss. Analysts aren’t quite giving up — among 10 covering the company tracked by FactSet most have hold or a similar rating.

    “We believe C3.ai is taking the proper steps to capitalize on Generative AI, but it will take time to prove out,” said a team of analysts at Oppenheimer led by Timothy Horan, after those results were released on Sept. 7. They rate the company perform.

    Vanda analysts said another exception to an AI buying slowdown has been IonQ
    IONQ,
    -6.21%
    ,
    “a relatively small quantum computing company that has been outperforming its AI-related counterparts.”  They noted “remarkably resilient” demand for the stock, as short interest also increases rapidly.

    “This juxtaposition raises a cautionary flag, as a potential weakening of retail interest, coupled with speculative institutional investors accumulating short positions, could create a demand-supply imbalance, potentially triggering a selloff,” they said. Shares of IONQ have soared 422% year-to-date. The company lifted its lifted full-year bookings guidance last month as it reported blowout second-quarter sales.

    Young Money blogger Jack Raines highlighted the slowing interest in AI in a post on Thursday , citing data from analytics firm Similarweb that showed ChatGPT traffic down 3.2% in August, after 10% declines in June and July.

    “While ChatGPT will probably experience a resurgence this fall as students return to the classroom and expedite their homework via chatbot, it seems like talks of AI disrupting/replacing anything and everything have cooled down,” he said, adding that the “initial euphoria was a bit much.”

    Deutsche Bank strategists hopped on the topic in a note to clients entitled “Even hype needs a summer break,” on Thursday, noting how AI interest waned as investors went to the beach and the media turned its attention to extreme weather and “silly season” stories.

    “Under the surface, though, there have been important developments indicating a slow maturing of the cycle, of the underlying technologies and of attitudes to a revolution in waiting,” said a team led by analyst Adrian Cox.

    Those include Ai being the “elephant in the earnings room,” this summer that also brought a steady stream of AI-related tech announcements. Another theme “Your job is safe..for now,” came via fresh evidence that AI might boost rather than replace white-collar jobs, while yet another saw U.S. politicians also got involved.

    This week saw Tesla CEO Elon Musk telling Capital Hill politicians that a new federal agency to oversee AI development is a must.

    Another big theme that erupted this summer was the chatter by contrarian commentators questioning the hype around generative AI. Cox alluded to the Similarweb report that got everyone excited as it showed Chat GPT traffic falling to 1.4 billion visitors in August from 1.8 billion in May.

    “The bigger picture is that open.ai had zero visitors before the launch of ChatGPT less than a year ago and is now No. 28 in the world, according to Similarweb,” said the Deutsche Bank team.

    [ad_2]

    Source link

  • Watch this ‘canary in the coal mine’ for signs of trouble in markets, Neuberger Berman CIO says

    Watch this ‘canary in the coal mine’ for signs of trouble in markets, Neuberger Berman CIO says

    [ad_1]

    Neuberger Berman, an asset manager with eight decades under its belt, is on the lookout for cracks in credit markets from the Federal Reserve’s rate-hiking campaign.

    Erik Knutzen, chief investment officer of multi asset, worries that several factors could be a tipping point for the economy, from an economic slowdown in China to U.S. consumers finally becoming exhausted by higher rates.

    Yet Knutzen expects the high-yield, or junk bond, market to serve as the “canary in the coal mine” for broader market volatility, acting as “perhaps the most visible threat, and therefore one we think could be priced in sooner than later.”

    The Bloomberg U.S. High Yield Bond Index has returned 6.4% through the end of August, producing one of the year’s highest gains in fixed income, helped along by a “resilient U.S. economy coupled with still-available financial liquidity,” according to the Wells Fargo Investment Institute.

    But Knutzen worries that as the high-yield maturity wall draws closer, “the first policy rate cuts get priced further and further out, raising the threat of expensive refinancings.”

    The 10-year Treasury yield’s
    BX: TMUBMUSD10Y
    climb to a multidecade high in August of almost 4.4% left many major U.S. corporations in early September hesitant to borrow beyond 10 years.

    Starting next year, some $700 billion of high-yield bonds are set to mature through the end of 2027, with a big slice of the refinancing need coming from companies with riskier credit ratings below the top BB ratings bracket.

    The junk-bond maturity wall.


    Bloomberg, Wells Fargo Investment Institute, Moody’s Investors Service

    The two big U.S. exchange-traded funds linked to junk bonds are the SPDR Bloomberg High Yield Bond ETF
    JNK
    and the iShares iBoxx $ High Yield Corporate Bond ETF
    HYG,
    both up 1.8% and 1.5% on the year through Monday, respectively, while offering dividend yields of more than 5.8%, according to FactSet.

    Of note, fixed-income strategists at the Wells Fargo Investment Institute also said they see risks emerging in junk bonds for companies rated B and below, particularly with spread in the sector trading less than 400 basis points above the risk-free Treasury rate since July. Spreads are the premium that investors are paid on bonds to help compensate for default risks.

    Top corporate executives appear hopeful that the Federal Reserve will cut rates sooner than later. Fed Chairman Jerome Powell said in Jackson Hole, Wyo., in August that the central bank is prepared to keep its policy rate restrictive for a while to get inflation down to its 2% target.

    To that end, Neuberger Berman, which has roughly $443 billion in managed assets, sees several sources of volatility lurking through year’s end, and has a “defensive inclination” in equity and credit, favoring high-quality companies with plenty of free cash flow, high cash balances and less expensive long-term debt.

    U.S. stocks booked gains on Monday after a week of losses, with the S&P 500 index
    SPX
    and Nasdaq Composite Index
    COMP
    scoring their best daily percentage gains in about two weeks. The Dow Jones Industrial Average
    DJIA
    advanced 0.3%.

    [ad_2]

    Source link

  • C3.ai, GameStop, UiPath, ChargePoint, Yext, BlackBerry, and More Stock Market Movers

    C3.ai, GameStop, UiPath, ChargePoint, Yext, BlackBerry, and More Stock Market Movers

    [ad_1]


    • Order Reprints

    • Print Article

    [ad_2]

    Source link

  • Wall Street is raising quarterly profit forecasts for the first time in two years, and executives are relaxing about recession prospects

    Wall Street is raising quarterly profit forecasts for the first time in two years, and executives are relaxing about recession prospects

    [ad_1]

    After nearly two years of concerns about a recession, growing optimism about the economy is starting to filter down into Wall Street’s expectations for individual companies’ quarterly results, with analysts growing more upbeat about corporate profit in the months ahead

    While expectations for those quarterly results usually trend lower as earnings season arrives, analysts over the past two months have actually nudged their profit forecasts higher for the first time in two years, according to a FactSet report released Friday….

    [ad_2]

    Source link

  • You can invest in market winners and still lose big. Here’s how to avoid the hit.

    You can invest in market winners and still lose big. Here’s how to avoid the hit.

    [ad_1]

    Investors should think twice before picking an actively managed mutual fund according to its style category. By “style category,” I’m referring to the widely used method of grouping mutual funds according to the market-cap of the stocks they invest in and where those stocks stand on the spectrum of growth-to-value.

    This matrix traces to groundbreaking research in 1992 by University of Chicago professor Eugene Fama and Dartmouth College professor Ken French, and has since been popularized by investment researcher Morningstar in the form of its well-known style box.

    In urging you to think twice before picking a fund based on this matrix, I’m not questioning the existence of important distinctions between the various styles. Fama and French’s research convincingly showed that there are systematic differences between them. My point is that there also are huge differences within each style as well. You can pick a style that outperforms all others on Wall Street and still lose a lot of money, just as you can pick the worst-performing style and turn a huge profit.

    This points to the two types of risk you face when picking an actively managed fund. You have the risk associated with the fund’s style (category risk) and you also have the risk associated with the particular stocks that the fund’s manager selects (so-called idiosyncratic risk). Idiosyncratic risk often overwhelms category risk, especially over shorter periods.

    To illustrate, consider the midcap-growth style. As judged by the Vanguard Mid-Cap Growth ETF
    VOT,
    this style produced a 28.8% loss in 2022. Yet, according to Morningstar Direct, the best-performing actively managed midcap-growth fund last year produced a gain of 39.5%, while the worst performer lost 67.0%.

    This best-versus-worst performance spread of over 100 percentage points is illustrated in the accompanying chart. Notice that the comparable spread was almost as wide for many of the other styles as well. Though I haven’t done the research to compare 2022’s spreads with those of other calendar years, I have no reason to expect that they on average were any lower.

    The only way to eliminate idiosyncratic risk when investing in particular styles is to invest in an index fund.

    The only way to eliminate idiosyncratic risk when investing in particular styles is to invest in an index fund benchmarked to the style in question. If you are enamored of a particular fund manager and willing to bet he will significantly outperform the category average, just know that you also incur the not-significant idiosyncratic risk that the fund will lag by a large amount.

    The bottom line? By investing in an actively managed fund in a style category, you will be incurring the risk not only of that category itself but also the not-insignificant idiosyncratic risk of that particular fund. Fasten your seatbelt if that’s the path you take.

    Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

    [ad_2]

    Source link