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Tag: Recessions and depressions

  • Lacking counselors, US schools turn to the booming business of online therapy

    Lacking counselors, US schools turn to the booming business of online therapy

    Trouble with playground bullies started for Maria Ishoo’s daughter in elementary school. Girls ganged up, calling her “fat” and “ugly.” Boys tripped and pushed her. The California mother watched her typically bubbly second-grader retreat into her bedroom and spend afternoons curled up in bed.

    For Valerie Aguirre’s daughter in Hawaii, a spate of middle school “friend drama” escalated into violence and online bullying that left the 12-year-old feeling disconnected and lonely.

    Both children received help through telehealth therapy, a service that schools around the country are offering in response to soaring mental health struggles among American youth.

    Now at least 16 of the 20 largest U.S. public school districts are offering online therapy sessions to reach millions of students, according to an analysis by The Associated Press. In those districts alone, schools have signed provider contracts worth more than $70 million.

    The growth reflects a booming new business born from America’s youth mental health crisis, which has proven so lucrative that venture capitalists are funding a new crop of school teletherapy companies. Some experts raise concerns about the quality of care offered by fast-growing tech companies.

    As schools cope with shortages of in-person practitioners, however, educators say teletherapy works for many kids, and it’s meeting a massive need. For rural schools and lower-income students in particular, it has made therapy easier to access. Schools let students connect with online counselors during the school day or after hours from home.

    “This is how we can prevent people from falling through the cracks,” said Ishoo, a mother of two in Lancaster, California.

    Ishoo recalls standing at her second-grader’s bedroom door last year and wishing she could get through to her. “What’s wrong?” the mother would ask. The response made her heart heavy: “It’s NOTHING, Mom.”

    Last spring, her school district launched a teletherapy program and she signed up her daughter. During a month of weekly sessions, the girl logged in from her bedroom and opened up to a therapist who gave her coping tools and breathing techniques to reduce anxiety. The therapist told her daughter: You are in charge of your own emotions. Don’t give anyone else that control.

    “She learned that it’s OK to ask for help, and sometimes everyone needs some extra help,” Ishoo said.

    The 13,000-student school system, like so many others, has counselors and psychologists on staff, but not enough to meet the need, said Trish Wilson, the Lancaster district’s coordinator of counselors.

    Therapists in the area have full caseloads, making it impossible to refer students for immediate care, she said. But students can schedule a virtual session within days.

    “Our preference is to provide our students in-person therapy. Obviously, that’s not always possible,” said Wilson, whose district has referred more than 325 students to over 800 sessions since launching the online therapy program.

    Students and their parents said in interviews they turned to teletherapy after struggling with feelings of sadness, loneliness, academic stress and anxiety. For many, the transition back to in-person school after distance learning was traumatic. Friendships had fractured, social skills deteriorated and tempers flared more easily.

    Schools are footing the bill, many of them using federal pandemic relief money as experts have warned of alarming rates of youth depression, anxiety and suicide. Many school districts are signing contracts with private companies. Others are working with local health care providers, nonprofits or state programs.

    Mental health experts welcome the extra support but caution about potential pitfalls. For one, it’s getting harder to hire school counselors and psychologists, and competition with telehealth providers isn’t helping.

    “We have 44 counselor vacancies, and telehealth definitely impacts our ability to fill them,” said Doreen Hogans, supervisor of school counseling in Prince George’s County, Maryland. Hogans estimates 20% of school counselors who left have taken teletherapy jobs, which offer more flexible hours.

    The rapid growth of the companies raises questions about the qualifications of the therapists, their experience with children and privacy protocols, said Kevin Dahill-Fuchel, executive director of Counseling in Schools, a nonprofit that helps schools bolster traditional, in-person mental health services.

    “As we give these young people access to telehealth, I want to hear how all these other bases are covered,” he said.

    One of the biggest providers, San Francisco-based Hazel Health, started with telemedicine health services in schools in 2016 and expanded to mental health in May 2021, CEO Josh Golomb said. It now employs more than 300 clinicians providing teletherapy in over 150 school districts in 15 states.

    The rapid expansions mean millions of dollars in revenue for Hazel. This year, the company signed a $24 million contract with Los Angeles County to offer teletherapy services to 1.3 million students for two years.

    Other clients include Hawaii, which is paying Hazel nearly $4 million over three years to work with its public schools, and Clark County schools in the Las Vegas area, which have allocated $3.25 million for Hazel-provided teletherapy. The districts of Miami-Dade, Prince George’s and Houston schools also have partnered with Hazel.

    Despite the giant contracts, Golomb said Hazel is focused on ensuring child welfare outweighs the bottom line.

    “We have the ethos of a nonprofit company but we’re using a private-sector mechanism to reach as many kids as we can,” Golomb said. Hazel raised $51.5 million in venture capital funding in 2022 that fueled its expansion. “Do we have any concerns about any compromise in quality? The resounding answer is no.”

    Other providers are getting into the space. In November, New York City launched a free telehealth therapy service for teens to help eliminate barriers to access, said Ashwin Vasan, the city’s health commissioner. New York is paying the startup TalkSpace $26 million over three years for a service allowing teens aged 13 to 17 to download an app and connect with licensed therapists by phone, video or text.

    Unlike other cities, New York is offering the service to all teens, whether enrolled in private, public or home schools, or not in school at all.

    “I truly hope this normalizes and democratizes access to mental health care for our young people,” Vasan said.

    Many of Hawaii’s referrals come from schools in rural or remote areas. Student clients have increased sharply in Maui since the deadly August wildfires, said Fern Yoshida, who oversees teletherapy for the state education department. So far this fall, students have logged 2,047 teletherapy visits, a three-fold increase from the same period last year.

    One of them was Valerie Aguirre’s daughter, whose fallout with two friends turned physical last year in sixth grade, when one of the girls slapped her daughter in the face. Aguirre suggested her daughter try teletherapy. After two months of online therapy, “she felt better,” Aguirre said, with a realization that everyone makes mistakes and friendships can be mended.

    In California, Ishoo says her daughter, now in third grade, is relaying wisdom to her sister, who started kindergarten this year.

    “She walks her little sister to class and tells her everything will be OK. She’s a different person. She’s older and wiser. She reassures her sister,” Ishoo said. “I heard her say, ‘If kids are being mean to you, just ignore them.’”

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    Associated Press data reporter Sharon Lurye contributed.

    ___

    The Associated Press education team receives support from the Carnegie Corporation of New York. The AP is solely responsible for all content.

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  • Case for gold fever: NewEdge Wealth sees record rush intensifying

    Case for gold fever: NewEdge Wealth sees record rush intensifying

    The record gold rush may intensify into year-end.

    According to NewEdge Wealth’s Ben Emons, the final month of the year typically creates a bigger appetite for the yellow metal.

    “It’s been very consistent every December. It’s been a pretty strong performance for gold — especially when there is a rally in the stock market in November,” the firm’s head of fixed income told CNBC’s “Fast Money” on Tuesday.

    Gold settled at a new record high Friday. It closed the day up almost 2%, at $2,089.70 an ounce.

    Emons listed the economic backdrop and geopolitical backdrop as additional positive catalysts for gold.

    “There’s uncertainty next year. We have an election. We don’t know what’s going to happen. We get a recession maybe, maybe not,” said Emons. “At the same time, gold rallies when there’s this risk-on feel in the markets, and that’s really when real rates and interest rates are declining. This gives the gold a really good push for the breakout.”

    In a note to clients this week, Emons wrote that months for both gold and stocks are a “rare combo.” Gold gained 3% while the Dow and S&P 500 were both up almost 9% in November.

    “[It] tends to occur when markets price in major easing cycles,” he wrote. “Currently, that is going on in a mild manner, which puts the spotlight on the seasonals of gold.”

    Emons suggests the strength will continue into next year.

    “Central banks are again outbidding gold against dwindling supply, likely setting up the metal for a major breakthrough towards 2100 … lifting boats for laggards like utilities have a shot to claim market leadership by early 2024,” Emons also wrote.

    “Fast Money” trader Guy Adami also sees gold shining due to the dollar‘s recent performance.

    “If rates continue to go lower, the dollar will go lower. That will be a tailwind for gold,” he said. “Gold is within a whisper of having a huge breakout to the upside.”

    As of Friday’s close, gold is up more than 14% so far this year.

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  • Sandy Hook families offer to settle Alex Jones’ $1.5 billion legal debt for a minimum of $85 million

    Sandy Hook families offer to settle Alex Jones’ $1.5 billion legal debt for a minimum of $85 million

    Sandy Hook families who won nearly $1.5 billion in legal judgments against conspiracy theorist Alex Jones for calling the 2012 Connecticut school shooting a hoax have offered to settle that debt for only pennies on the dollar — at least $85 million over 10 years.

    The offer was made in Jones’ personal bankruptcy case in Houston last week. In a legal filing, lawyers for the families said they believed the proposal was a viable way to help resolve the bankruptcy reorganization cases of both Jones and his company, Free Speech Systems.

    But in the sharply worded document, the attorneys continued to accuse the Infowars host of failing to curb his personal spending and “extravagant lifestyle,” failing to preserve the value of his holdings, refusing to sell assets and failing to produce certain financial documents.

    “Jones has failed in every way to serve as the fiduciary mandated by the Bankruptcy Code in exchange for the breathing spell he has enjoyed for almost a year. His time is up,” lawyers for the Sandy Hook families wrote.

    The families’ lawyers offered Jones two options: either liquidate his estate and give the proceeds to creditors, or pay them at least $8.5 million a year for 10 years — plus 50% of any income over $9 million per year.

    During a court hearing in Houston, Jones’ personal bankruptcy lawyer, Vickie Driver, suggested Monday that the $85 million, 10-year settlement offer was too high and unrealistic for Jones to pay.

    “There are no financials that will ever show that Mr. Jones ever made that … in 10 years,” she said.

    In a new bankruptcy plan filed on Nov. 18, Free Speech Systems said it could afford to pay creditors about $4 million a year, down from an estimate earlier this year of $7 million to $10 million annually. The company said it expected to make about $19.2 million next year from selling the dietary supplements, clothing and other merchandise Jones promotes on his shows, while operating expenses including salaries would total about $14.3 million.

    Personally, Jones listed about $13 million in total assets in his most recent financial statements filed with the bankruptcy court, including about $856,000 in various bank accounts.

    Under the bankruptcy case orders, Jones had been receiving a salary of $20,000 every two weeks, or $520,000 a year. But this month, a court-appointed restructuring officer upped Jones’ pay to about $57,700 biweekly, or $1.5 million a year, saying he has been “grossly” underpaid for how vital he is to the media company.

    Bankruptcy Judge Christopher Lopez on Monday rejected the $1.5 million salary, saying the pay raise didn’t appear to have been made properly under bankruptcy laws and a hearing needed to be held.

    If Jones doesn’t accept the families’ offer, Lopez would determine how much he would pay the families and other creditors.

    After 20 children and six educators were killed by a gunman at Sandy Hook Elementary School in Newtown, Connecticut, in 2012, Jones repeatedly said on his show that the shooting never happened and was staged in an effort to tighten gun laws.

    Relatives, of many but not all, of the Sandy Hook victims sued Jones in Connecticut and Texas, winning nearly $1.5 billion in judgments against him. In October, Lopez ruled that Jones could not use bankruptcy protection to avoid paying more than $1.1 billon of that debt.

    Relatives of the school shooting victims testified at the trials about being harassed and threatened by Jones’ believers, who sent threats and even confronted the grieving families in person, accusing them of being “crisis actors” whose children never existed.

    Jones is appealing the judgments, saying he didn’t get fair trials and his speech was protected by the First Amendment.

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  • Wells Fargo unveils 2024 target, warns of ‘really, really sloppy’ first half for stocks

    Wells Fargo unveils 2024 target, warns of ‘really, really sloppy’ first half for stocks

    Wells Fargo Securities is officially out with its 2024 stock market forecast.

    Chris Harvey, the firm’s head of equity strategy, sees a volatile path to his S&P 500 to 4,625 year-end target.

    “It’s really hard to get excited. If we have better [economic] growth, then the Fed doesn’t do anything,” he told CNBC’s “Fast Money” on Monday. “If we have worse growth, then numbers are going to come down and then the Fed will eventually cut. The second half will be better, but the first half is going to be really, really sloppy.”

    Harvey’s target is just 75 points above Monday’s S&P 500’s close.

    “Can we go higher from here? Sure, we can go a little bit higher. But I just don’t think you can go a ton higher,” he said. “People have talked about 5,000. I don’t see how you get to that level.”

    In his official 2024 outlook note, Harvey told clients to brace for a “trader’s market” instead of a “buy-and-hold situation.” His early year strategy: Start with a risk-averse stance.

    “The VIX [CBOE Volatility Index] is up 13. Every time we’ve gone into a new year with the VIX at 13, we’ve seen spikes. We’ve seen the equity market pull back, and it’s just not a great setup into 2024,” Harvey added.

    He warns the higher cost of capital is an additional market problem because it prevents multiples from going higher.

    “As long as the cost of capital stays higher, it’s really hard for me to get to a much higher price target,” Harvey said.

    Yet, he still sees opportunities for investors.

    “What we want to do is we want to go to the places that are oversold. We just upgraded utilities today. We upgraded health care,” Harvey noted. “Those are areas that have good valuations, decent fundamentals and most people really aren’t there at this point.”

    ‘I hate to say that as being head of equity strategy’

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  • The second installment of Sri Lanka’s bailout was delayed. The country hopes it’s coming in December

    The second installment of Sri Lanka’s bailout was delayed. The country hopes it’s coming in December

    The governor of Sri Lanka’s Central Bank says he is confident it will receive the second instalment of a $2.9-billion bailout package from the International Monetary Fund before the end of the year

    ByBHARATHA MALLAWARACHI Associated Press

    November 24, 2023, 6:26 AM

    COLOMBO, Sri Lanka — The governor of Sri Lanka’s Central Bank said Friday he’s confident it will receive the second instalment of a $2.9-billion bailout package from the International Monetary Fund before the end of the year, after payment was delayed due to inadequate oversight and debt restructuring.

    “I am confident that we are making very good progress. We are moving in the right direction,” said Nandalal Weerasinghe.

    Sri Lanka plunged into economic crisis in 2022, suffering severe shortages and drawing strident protests that led to the ouster of then-President Gotabaya Rajapaksa. It declared bankruptcy in April 2022 with more than $83 billion in debt — more than half of it to foreign creditors. The IMF agreed in March to a $2.9-billion bailout package, releasing the first payment shortly thereafter.

    The IMF’s review in September said Sri Lanka’s economy was recovering, but it needed to improve its tax administration, eliminate exemptions and crack down on tax evasion.

    Over the past year, Sri Lanka’s severe shortages of essentials like food, fuel and medicine have largely abated, and authorities have restored a continuous power supply. But there has been growing public dissatisfaction with the government’s efforts to increase revenue collection by raising electricity bills and imposing heavy new income taxes on professionals and businesses.

    Weerasinghe said the Export–Import Bank of China — one of Sri Lanka’s creditors from which it needs financial assurance in order to receive the second bailout installment of $330 million — has already given its consent, and he hoped the country’s other creditors in the Official Creditor Committee would soon follow suit. Sri Lanka needs the consent of the OCC which is co-chaired by India, Japan and France and includes 17 countries, for the IMF to approve the payment.

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  • Stock market today: World shares are mixed as recession worries pull European markets lower

    Stock market today: World shares are mixed as recession worries pull European markets lower

    HONG KONG — World shares were mixed on Monday, with European markets barely moving as investors grew cautious over the potential for recession in the region.

    U.S. futures rose and oil prices gained more than $1 a barrel after Saudi Arabia and Russia reiterated their commitment to maintaining oil supply cuts of more than 1 million barrels per day until the end of the year.

    Meanwhile, the Israeli military announced late Sunday that it had encircled Gaza City and cut the besieged coastal strip in two almost a month into the deepening conflict.

    In European trading, Germany’s DAX lost 7 points to 15,180.02 and the CAC 40 in Paris lost 0.1% to 7,041.12. Britain’s FTSE 100 edged less than 3 points lower, to 7,415.13. The futures for the S&P 500 and the Dow Jones Industrial Average were up 0.1%.

    Recent surveys of factory managers showed a deterioration in business activity, reinforcing concerns over slowing growth in Germany, France and other major economies.

    In Asia, stocks surged Monday after Wall Street benchmarks were buoyed last week by hopes for early interest rate cuts.

    South Korean stocks jumped 5.7%, to 2,502.37, after the government restored a ban on short-selling, aiming to prevent illegal use of the trading tactic that is often used by hedge funds and investors. Short-selling refers to selling borrowed shares in order to buy them back cheaper and profit from price declines.

    Japan’s Nikkei 225 index gained 2.4% to 32,708.48. However, the country’s services activity in October expanded at its slowest pace this year, raising concerns about weakness in a key sector driving Japanese economic activity.

    The Bank of Japan is gradually moving towards tightening its monetary policy as the central bank’s head stated on Monday that the country has made progress toward reaching its inflation target. But BOJ Gov. Kazuo Ueda said Monday that the change was not sufficient for raising its near zero interest rate stance.

    The Hang Seng in Hong Kong added 1.7% to 17,966.59 and the Shanghai Composite index was up 0.9% at 3,058.41. Australia’s S&P/ASX 200 rose 0.3% to 6,997.40. India’s Sensex was 0.8% higher and Bangkok’s SET gained 0.3%.

    On Friday, Wall Street closed out its best week in nearly a year. The S&P 500 climbed 0.9%, rising every day last week. The Dow industrials gained 0.7% and the Nasdaq composite jumped 1.4%.

    Stock prices have surged on rising hopes the Federal Reserve is finally done with its market-crunching hikes to interest rates, meant to get inflation under control. A report Friday underscored that pressure is easing on inflation, showing employers hired fewer workers last month than economists expected.

    In currency trading, the U.S. dollar rose to 149.56 Japanese yen from 149.37 yen. The euro cost $1.0741, up from $1.0728.

    The S&P 500 climbed 0.9%, to 4,358.34. It rose every day last week. The Dow Jones Industrial Average gained 0.7% to 34,061.32, and the Nasdaq composite jumped 1.4% to 13,478.28.

    In other trading Monday, benchmark U.S. crude rose $1.43 to $81.94 a barrel in electronic trading on the New York Mercantile Exchange. It fell $1.95 to $80.51 per barrel on Friday. Brent crude, the international standard, gained $1.38 to $86.27 per barrel.

    In currency trading, the U.S. dollar rose to 149.58 Japanese yen from 149.37 yen. The euro cost $1.0750, up from $1.0728.

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  • Prosecutor takes aim at Sam Bankman-Fried’s credibility at trial of FTX founder

    Prosecutor takes aim at Sam Bankman-Fried’s credibility at trial of FTX founder

    NEW YORK — A prosecutor began cross-examining Sam Bankman-Fried at a New York City trial on Monday, attacking his credibility by highlighting public statements he made before and after the FTX cryptocurrency exchange he founded filed for bankruptcy late last year when it could no longer process billions of dollars in withdrawals.

    Assistant U.S. Attorney Danielle Sassoon confronted Bankman-Fried with instances in which he’d promised customers that their assets would be safe and that they could demand those assets to be returned at any time.

    Repeatedly, Bankman-Fried answered the series of questions with a rapid “Yep.”

    Bankman-Fried, 31, has been on trial for the past month on charges that he defrauded his customers and investors of billions of dollars. He has pleaded not guilty to charges that carry a potential penalty of decades in prison.

    The California man gained a level of fame from 2017 to 2022 as he created the Alameda Research hedge fund and FTX, building a cryptocurrency empire that became worth tens of billions of dollars. For a time, he seemed to be transforming the emerging industry by conforming to his publicly stated vision of a more regulated and safe environment for users.

    Through her line of questioning, Sassoon tried to show that Bankman-Fried’s public statements were false and that he promised customers that their accounts were safe while he looted them, spending lavishly on real estate, celebrity-laden promotions, investments and political contributions.

    In one instance, she asked him if he’d used profanity in speaking about regulators — even as he was trying to convince Congress to bring more legitimacy to the cryptocurrency industry by setting up a regulatory framework.

    “I said that once,” he answered when she offered a specific example.

    And when Sassoon asked if his pursuit of regulations was just an attempt at garnering positive public relations, he answered: “I said something related to that, yes.”

    Before cross-examination began on Monday, Bankman-Fried testified that he believed his companies could withstand the daily withdrawal of billions of dollars in assets until several days before they could not.

    Bankman-Fried was arrested last December on fraud charges. Initially freed on a $250 million personal recognizance bond to live with his parents in Palo Alto, California, he was jailed in August when Judge Lewis A. Kaplan became convinced that he had tried to tamper with potential trial witnesses.

    He began testifying on Thursday. Kaplan has told jurors that the trial might be completed as early as this week.

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  • Suze Orman: ‘Big mistake if you park your money forever in bonds’

    Suze Orman: ‘Big mistake if you park your money forever in bonds’

    Suze Orman has a warning for investors relying too heavily on bonds.

    The personal finance expert believes the draw of high interest rates and an aversion to risk taking are preventing too many people from taking a “lifetime opportunity” in the stock market.

    “Some of these stocks — how do you pass them up? I mean, you have to go into them. Now, do you go into them with everything that you have? No. Do you dollar-cost average into them, and take advantage of [down] days? … Yes,” the “Women & Money” podcast host told CNBC’s “Fast Money” this week. “You’ll be making a big mistake if you park your money forever in bonds.”

    Orman, who is also co-founder of emergency fintech company SecureSave, notes long-term investors should have the stomach for the stock market’s twists and turns.

    ‘I want to buy a stock, and I hope it goes down’

    “I have some serious losers at this point. However, I don’t care,” said Orman. “I want to buy a stock, and I hope it goes down. And I hope it goes further down and down so I can accumulate more.”

    She does recommend keeping some money in fixed income to mitigate risks in a volatile environment.

    At the same time, she still sees a role for bonds in portfolios. She likes the three– and six-month Treasurys and is ready to start looking longer term.

    “The play may start to be in long-term Treasurys. So, I’ve started to dip my toe in. Every time the 30-year [yield] crosses five percent, I buy,” said Orman.

    The 30-year Treasury yield is still near 2007 highs. It traded above 5% as of Friday’s close.

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  • Major US pharmacy chain Rite Aid files for bankruptcy

    Major US pharmacy chain Rite Aid files for bankruptcy

    Major U.S. pharmacy chain Rite Aid says it has filed for bankruptcy and obtained $3.45 billion in fresh financing as it carries out a restructuring plan while coping with falling sales and opioid-related lawsuits

    ByThe Associated Press

    October 16, 2023, 12:57 AM

    FILE – This photo shows a sign of Rite Aid on its store in Pittsburgh on Jan. 23, 2023. Rite Aid, a major U.S. pharmacy chain, said Sunday, Oct. 15, that it has filed for bankruptcy as part of its effort to restructure its finances. (AP Photo/Gene J. Puskar, File)

    The Associated Press

    PHILADELPHIA — Major U.S. pharmacy chain Rite Aid said Sunday that it has filed for bankruptcy and obtained $3.45 billion in fresh financing as it carries out a restructuring plan while coping with falling sales and opioid-related lawsuits.

    In 2022, Rite Aid settled for up to $30 million to resolve lawsuits alleging pharmacies contributed to an oversupply of prescription opioids. It said it had reached an agreement with its creditors on a financial restructuring plan to cut its debt and position itself for future growth and that the bankruptcy filing was part of that process.

    The plan will “significantly reduce the company’s debt” while helping to “resolve litigation claims in an equitable manner,” Rite Aid said.

    In March, the Justice Department filed a complaint against Rite Aid, alleging it knowingly filled hundreds of thousands of unlawful prescriptions for controlled substances from May 2014-June 2019. It also accused pharmacists and the company of ignoring “red flags” indicating the prescriptions were illegal.

    The Justice Department acted after three whistleblowers who had worked at Rite Aid pharmacies filed a complaint.

    Jeffrey Stein, who heads a financial advisory firm, was appointed Rite Aid’s CEO as of Sunday, replacing Elizabeth Burr, who was interim CEO and remains on Rite Aid’s board.

    Earlier this month, Rite Aid notified the New York Stock Exchange that it was not in compliance with listing standards. During a grace period, the company’s stock continues to be listed and traded.

    The bankruptcy filing in New Jersey and noncompliance with listing standards would not affect the company’s business operations or its U.S. Securities and Exchange Commission reporting requirements, it said.

    Rite Aid said it was arranging for payment of wages and other costs as usual, though some “underperforming” stores among its more than 2,100 pharmacies in 17 states will be closed.

    It earlier reported that its revenue fell to $5.7 billion in the fiscal quarter that ended June 3, down from $6.0 billion a year earlier, logging a net loss of $306.7 million.

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  • Risk-taker’s market? Why it may be practical to take chips off the table

    Risk-taker’s market? Why it may be practical to take chips off the table

    It may be a risk-taker’s market.

    Investor and personal finance author Ric Edelman believes it’s a practical strategy to take chips off the table right now.

    “It comes down to behavioral finance. It comes down to human emotion,” the Edelman Financial Engines founder told CNBC’s “ETF Edge” this week. “Do you have the stomach? Does your spouse have the stomach to hang in there if things get ugly like they did in ’01, ’08, 2020? Can you hang in there?”

    Edelman added there’s a “laundry list of reasons” to be cynical right now. He includes struggles in the real estate market, high interest rates, government shutdown risks and the Israel-Hamas war.

    “It’s easy to be negative and that can cause you to say, ‘Why do I want to put myself in a position of maybe losing another 20% or 30% of my money when I’ve already amassed an awful lot of money and I am already in my ’60s or ’70s and I need the safety and protection and by the way get five percent in my bonds or U.S. Treasury or my bank CD? Why don’t I just park it? Earn 5%. Call it a day,’ he said.

    Edelman acknowledges the strategy could be less profitable, but he suggests it’s important to sleep better at night.

    “I’m not sure everybody in the investment world is acting logically as opposed to emotionally. You’ve got to know yourself,” said Edelman.

    The Capital Group’s Holly Framsted is also seeing investors de-risk, and her firm is trying to cater to them by offering a new batch of exchange-traded funds focused on fixed income.

    “We’re seeing increased interest in short-duration fixed income,” said the firm’s head of global product strategy and development.

    Framsted speculates the investors are making the move to short-duration funds in response to the volatility of today’s market.

    “[The Capital Group Core Bond ETF] was among the original six funds that we launched,” Framsted said. “We’re seeing interest among our client base who tend to be longer-term oriented in nature across the full spectrum. But certainly, a lot of conversations in the short-duration space given the environment that we’re in.”

    The firm’s bond ETF is virtually flat since its Sept. 28 launch. The Capital Group managed more than $2.3 trillion as of June 30, according to the firm’s website.

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  • Rising long-term interest rates are posing the latest threat to a US economic ‘soft landing’

    Rising long-term interest rates are posing the latest threat to a US economic ‘soft landing’

    WASHINGTON — Surging interest rates are intensifying the challenges for the U.S. economy and threatening to derail the Federal Reserve’s drive to tame inflation without causing a deep recession.

    Since mid-summer, the yield on the 10-year Treasury note, a benchmark for many loans, has steadily climbed, causing a spillover rise in other borrowing costs. The costs of mortgages, auto loans and credit card debt have all risen in response. The collective impact of higher rates across the economy could also weaken the government’s own finances.

    The jump in longer-term rates coincides with other threats, from higher gas prices and this week’s resumption of student loan payments to autoworkers’ ongoing strike and the risk of a government shutdown next month, all of which could leave consumers with less money to spend to power the economy.

    The strike by the United Auto Workers, now in its third week with no resolution in sight, could reduce vehicle sales in coming months. And the threat of a government shutdown, narrowly averted this past weekend, looms large, especially given the chaos over the leadership of the House of Representatives. Far-right Republican House members deposed their leader, Rep. Kevin McCarthy, on Tuesday for working with Democrats to temporarily avoid a shutdown.

    The economy is coming off a robust summer, fueled by strong consumer spending on travel, concert tours and movie blockbusters. The economy is estimated to have grown at a healthy 3.5% annual rate in the July-September quarter, according to economists at Goldman Sachs.

    Yet growth will likely slow to a meager 0.7% annual rate in the final three months of the year, Goldman estimates. With borrowing rates high and inflation still relatively elevated, consumers, who drive about 70% of economic growth, are expected to spend more cautiously.

    On Friday, the government will provide a snapshot of how employers are factoring the turmoil into their hiring plans when it issues the September jobs report. Economists have forecast that it will show that employers added a solid 162,000 jobs last month and that the unemployment rate dipped to 3.7%, near a half-century low, from 3.8%.

    But the substantial rise in borrowing costs could intensify the economy’s slowdown. The yield on the 10-year Treasury touched a 16-year high of 4.8% on Tuesday, up from 3.3% in April. Last week, the average 30-year fixed rate mortgage hit 7.3%, the highest rate in 23 years, according to mortgage buyer Freddie Mac.

    On Tuesday, Loretta Mester, president of the Federal Reserve Bank of Cleveland, said she and other Fed policymakers will have to consider the rise in long-term rates in deciding whether to raise their key rate once more before year’s end. Her remarks suggested that the higher borrowing costs might lead the Fed to forgo another hike.

    “That will influence not only our policy decisions but how the economy evolves over the next year,” Mester said. “Those tighter, higher rates will have an impact on the economy.”

    Financial analysts point to several reasons for the rapid increase in lending rates. To begin with, the Fed has repeatedly underscored that it intends to keep its key rate elevated for much longer than financial markets had expected earlier this year. And the economy’s ability to keep growing, even as the Fed has jacked up rates, has lent the impression that it can withstand higher borrowing costs.

    The economy’s resilience in the face of higher rates could mean that borrowing costs will stay higher than they did after the 2008-2009 financial crisis, which led the Fed to cut its rate to near zero. During that period, the 10-year Treasury yield dropped to as low as 1.5%, and mortgage rates even fell below 3% during the pandemic.

    The Treasury Department is now also auctioning off more debt to cover the government’s swelling budget deficit, which reached $1.5 trillion this year and is expected to rise further in 2024. The supply of Treasurys is growing even as the Fed is reducing its holding of bonds. Overseas buyers have reduced their purchases, thereby forcing rates higher to attract buyers.

    “All of that is driving these fears of higher rates, and no one knows when it’s going to stop,” said Gennadiy Goldberg, head of US rates strategy at TD Securities.

    Benson Durham, a former Fed economist who is head of global policy at Piper Sandler, suggested that long-term rates are rising because investors consider it riskier to hold government debt for the long run when the economy appears particularly volatile and uncertain, as it does now.

    And Fed officials, Durham noted, have shifted from well-telegraphed rate hikes to a hazier stance. Chair Jerome Powell has repeatedly stressed that the central bank is “data dependent,” meaning it will raise rates again only if the latest economic data supports doing so — or forgo a rate hike if inflation falls steadily.

    “What they’re really telling us is, ‘We’re all over it like a cheap suit, but we’re not sure what exactly we’re going to do,’ ” Durham said.

    In addition to higher rates, student loans are expected to take a noticeable bite out of the economy. Roughly 43 million people will resume paying several hundred dollars a month to the government, which Goldman estimates could cut one-half of a percentage point from annual growth in the October-December quarter. More expensive gas could shave an additional 0.3 percentage point from growth in both the fourth quarter and the first three months of next year, Goldman estimates.

    A government shutdown, should it occur next month, would lop another 0.2 percentage point off growth for each week it endures, according to calculations by Nancy Vanden Houten, an economist at Oxford Economics.

    “We think the narrative is going to shift quite materially before the end of the year,” said David Page, head of macro research at AXA IM, a London-based investment manager, who expects the economy to actually shrink in the fourth quarter.

    Rather than optimism for a “soft landing,” in which inflation is curbed without causing a recession, there will be renewed fears of a downturn, he said.

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  • Death toll in collapsed Zimbabwe gold mine expected to rise, vice president says

    Death toll in collapsed Zimbabwe gold mine expected to rise, vice president says

    HARARE, Zimbabwe — The death toll from a shaft collapse at a disused gold mine in Zimbabwe was expected to rise to 13, the vice president said, according to state media.

    State-run newspaper The Sunday Mail quoted Vice President Constantino Chiwenga as saying “we believe we have lost about 13” in the mine disaster, which happened on Friday in the gold-rich town of Chegutu, about 100 kilometers (60 miles) west of the capital, Harare.

    He said 21 out of 34 miners believed to be underground at the time of the collapse had been rescued. Eight have been confirmed dead, with three bodies removed from the mine and five located but not yet removed, Chiwenga said.

    The remaining five people were presumed dead.

    Chiwenga was speaking Saturday at a meeting of the ruling ZANU-PF party, The Sunday Mail reported. Chiwenga said the collapse happened at a disused German-owned mine that had not been properly sealed off, allowing unofficial artisanal miners to find their way in to search for any deposits left over.

    Incidents of mine collapses, often involving artisanal miners, are common in the southern African country that is rich in gold, coal and diamonds. Zimbabwe also has Africa’s largest reserves of lithium, a mineral in global demand due to its use in electric car batteries.

    Zimbabwe’s mineral-rich national parks, abandoned mines, rivers and even towns are often swarmed with people, including young children, seeking to find valuable deposits. It is one of the few economic activities still going on in a country that has suffered industry closures, a currency crisis and high unemployment over the past two decades.

    Critics blame economic mismanagement and corruption for the collapse of a once-thriving economy and one of Africa’s bright spots. The government points to two decades of sanctions imposed by the United States over allegations of human rights violations by the government.

    Also Friday, Indian businessman Harpal Randhawa and his son were among six people who died in a plane crash near a different diamond mine, according to the same report in The Sunday Times. The small plane reportedly belonged to Randhawa’s RioZim mining company. The crash killed everyone on board, the report said.

    RioZim was previously part of the British-Australian mining group Rio Tinto.

    Chiwenga said the Zimbabwean victims of both tragedies would receive state-assisted funerals, while President Emmerson Mnangagwa called for a moment of silence for those who had died during the ruling party meeting.

    ___

    AP Africa news: https://apnews.com/hub/africa

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  • Bank that handles Infowars money appears to be cutting ties with Alex Jones’ company, lawyer says

    Bank that handles Infowars money appears to be cutting ties with Alex Jones’ company, lawyer says

    HARTFORD, Conn. — A bank recently shut down the accounts of conspiracy theorist Alex Jones’ media company, citing unauthorized transactions — a move that caused panic at the business when its balances suddenly dropped from more than $2 million to zero, according to a lawyer for the company.

    The action last week by Axos Bank also exposed worry and doubt at the company, Free Speech Systems, about being able to find another bank to handle its money.

    Jones, a conservative provocateur whose Infowars program promotes fake theories about global conspiracies, UFOs and mind control, is seeking bankruptcy protection as he and his company owe $1.5 billion to relatives of victims of the 2012 Sandy Hook Elementary School shooting in Connecticut.

    The debt is the result of the families winning lawsuits against Jones for his calling the massacre that killed 26 people a hoax and his supporters threatening and harassing the victims’ families.

    A lawyer for Free Speech Systems, Ray Battaglia, told a federal bankruptcy judge in Houston on Tuesday that Axos Bank had shut down the company’s accounts on Aug. 21 “without notice or warning.”

    Battaglia said he and a court-appointed overseer of Free Speech Systems’ finances were both out of the country when they received “frantic” messages about the company’s bank balances dropping to zero.

    Bank officials, he said, didn’t provide much information.

    According to Battaglia, Axos claimed it had contacted Free Speech Systems in July about a transaction and the company did not respond, which Battaglia disputed. The bank also indicated there were unauthorized transactions, but didn’t go into detail, he said. He said the bank informed Jones’ company that it would be sending a cashier’s check for the total balance.

    “So we’re perplexed,” Battaglia told the bankruptcy judge. “We have no answers for the court. They (the bank) have not provided us with any.”

    Battaglia said the media company will have to seek another bank or take Axos to court “because we just don’t know who will bank us.” At the request of Jones’ lawyers, Axos did agree to reopen the company’s accounts for 30 days but it appears it will not extend the relationship beyond that, he said.

    Spokespeople for Axos did not return email messages seeking comment Wednesday. An email sent to Infowars also went unanswered, as have previous messages.

    Jones and Free Speech Systems make the bulk of their money from selling nutritional supplements, survival gear, books, clothing and other merchandise, which Jones hawks on his daily web and radio show.

    According to the company’s most recent financial statement filed in bankruptcy court, it had more than $2.5 million in its Axos accounts at the end of August after bringing in more than $3 million in revenue during the month. The company paid out over $2 million in expenses and other costs, leaving a net cash flow of $1 million.

    The bankruptcy judge, Christopher Lopez, will be deciding how much money Jones and Free Speech Systems will have to pay creditors, including the Sandy Hook families. Jones is appealing the court awards, citing free speech rights and missteps by judges.

    In 2018, social media companies including Facebook, YouTube and Apple banned Jones from their platforms. It is not clear if Jones’ views have anything to do with Axos Bank’s actions.

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  • Stock market today: Wall Street falls sharply as its September slump gets even worse

    Stock market today: Wall Street falls sharply as its September slump gets even worse

    NEW YORK — Wall Street’s ugly September got even worse Tuesday, as a sharp drop for stocks brought them back to where they were in June.

    The S&P 500 tumbled 1.5% for its fifth loss in the last six days. The Dow Jones Industrial Average dropped 388 points, or 1.1%, and the Nasdaq composite lost 1.6%.

    September has brought a loss of 5.2% so far for the S&P 500, putting it on track to be the worst month of the year by far, as the realization sets in that the Federal Reserve will indeed keep interest rates high for a long time. That growing understanding has sent yields in the bond market to their highest levels in more than a decade, which in turn has undercut prices for stocks and other investments.

    Treasury yields rose again Thursday following a mixed batch of reports on the economy.

    The yield on the 10-year Treasury edged up to 4.55% from 4.54% late Monday and is near its highest level since 2007. It’s up sharply from about 3.50% in May and from 0.50% about three years ago.

    The rise in yields means bonds finally look reasonably priced, strategists at Barclays say. But even with the recent pullback in the stock market, “stocks have not adjusted enough to the rise in yields, in our view,” according to the strategists led by Ajay Rajadhyaksha.

    One economic report on Tuesday showed confidence among consumers was weaker than economists expected. That’s concerning because strong spending by U.S. households has been a bulwark keeping the economy out of a long-predicted recession.

    A separate report said sales of new homes across the country slowed by more last month than economists expected, while a third report suggested manufacturing in Maryland, the Virginias and the Carolinas may be steadying itself following a more than yearlong slump.

    While housing and manufacturing have felt the sting of high interest rates, the economy overall has held up well enough to raise worries that upward pressure still exists on inflation. That pushed the Fed last week to say it will likely cut interest rates by less next year than earlier expected. The Fed’s main interest rate is at its highest level since 2001 in its drive to get inflation back down to its target.

    Besides high interest rates, a long list of other worries is also tugging at Wall Street. The most immediate is the threat of another U.S. government shutdown as Capitol Hill threatens a stalemate that could shut off federal services across the country.

    Wall Street has dealt with such shutdowns in the past, and stocks have historically been turbulent in the runup to them, according to Lori Calvasina, strategist at RBC Capital Markets.

    After looking at the seven shutdowns that lasted 10 days or more since the 1970s, she found the S&P 500 dropped an average of roughly 10% in the three months heading into them. But stocks managed to hold up rather well during the shutdowns, falling an average of just 0.3%, before rebounding meaningfully afterward.

    Besides the threat of higher interest rates for longer, Wall Street is also contending with higher oil prices, shaky economies around the world, a strike by U.S. auto workers that could put more upward pressure on inflation and a resumption of U.S. student-loan repayments that could dent spending by households.

    On Wall Street, the vast majority of stocks fell Tuesday under such pressures, including 90% of those within the S&P 500.

    Big Tech stocks tend to be among the hardest hit by high rates, and they were the heaviest weights on the index. Apple fell 2.3% and Microsoft lost 1.7%.

    Amazon tumbled 4% after the Federal Trade Commission and 17 state attorneys general filed an antitrust lawsuit against it. They accuse the e-commerce behemoth of using its dominant position to inflate prices on other platforms, overcharge sellers and stifle competition.

    Cintas dropped 5.3% for the largest loss in the S&P 500. The provider of employee uniforms, mops, fire extinguishers and other services reported stronger profit for its latest quarter than analysts expected. It also raised its forecast for profit for the full fiscal year, but still within a range that many analysts earlier expected.

    Stocks fell in markets around the world, with indexes lower across Asia and much of Europe.

    Japan’s Nikkei 225 fell 1.1%, South Korea’s Kospi dropped 1.3% and Hong Kong’s Hang Seng lost 1.5%.

    In China, concerns continued over heavily indebted real estate developer Evergrande. The property market crisis there is dragging on China’s economic growth and raising worries about financial instability.

    France’s CAC 40 fell 0.7%, and Germany’s DAX lost 1%.

    Crude oil prices rose, adding to worries about inflation. A barrel of benchmark U.S. crude climbed 71 cents to $90.39. Brent crude, the international standard, added 67 cents to $93.96 per barrel.

    ___

    AP Business Writers Yuri Kageyama and Matt Ott contributed.

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  • US consumer confidence tumbles in September as American anxiety about the future grows

    US consumer confidence tumbles in September as American anxiety about the future grows

    WASHINGTON — The confidence of American consumers slipped this month, particularly about the future, as expectations persist that interest rates will remain elevated for an extended period.

    The Conference Board, a business research group, said Tuesday that its consumer confidence index fell to 103 in September from 108.7 in August. Analysts were expecting a smaller decrease, to a reading of 105.

    The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.

    Most troubling was the decline in the index measuring future expectations, which tumbled to 73.7 in September from 83.3 in August. Readings below 80 for future expectations historically signal a recession within a year.

    Relatedly, consumers’ perceived likelihood of a recession in the next year rose, after it declined over the summer.

    “Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise — making big-ticket items more expensive,” said Dana Peterson, chief economist at The Conference Board.

    The downturn in spending is beginning to reveal itself in the quarterly financial reports of some of the nation’s biggest retailers. Target recently reported its first quarterly sales decline in six years. Home Depot, the nation’s largest home improvement retailer, also reported a decline in sales, with a fall-off in big-ticket items like appliances and other things that often require financing.

    Best Buy’s sales and profits slid in the second quarter as the nation’s largest consumer electronics chain continues to wrestle with a pullback in spending on gadgets after Americans splurged during the pandemic.

    Consumer spending accounts for around 70% of U.S. economic activity, so economists pay close attention to the mood of consumers to gauge how it may affect the broader economy.

    Confidence improved late in the spring as inflation eased in the face of 11 interest-rate hikes by the Federal Reserve. But the recent downturn reflects consumer anxiety over spending on non-essential goods, particularly if they have to put it on a credit card with an elevated interest rate.

    The U.S. economy — the world’s largest — has proved surprisingly resilient in the face of sharply higher borrowing costs.

    America’s employers added 187,000 jobs in August, evidence of a slowing but still-resilient labor market despite the high interest rates the Federal Reserve has imposed.

    From June through August, the economy added 449,000 jobs, a healthy number, but the lowest three-month total in three years. A significant increase in the number of people actively looking for jobs boosted the unemployment rate from 3.5% to 3.8% — the highest level since February 2022, though still low by historical standards.

    Tumbling inflation and sturdy hiring had raised hopes the Fed just might pull off a so-called soft landing — slowing the economy just enough to tame inflation without tipping the United States into recession.

    But recent data suggests that Americans might be tightening their budgets with the all-important holiday season fast approaching.

    Consumers’ view of current conditions ticked up slightly in September, to 147.1 from 146.7 in August.

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  • Chinese police detain wealth management staff at the heavily indebted developer Evergrande

    Chinese police detain wealth management staff at the heavily indebted developer Evergrande

    Police in a southern Chinese city say they have detained some staff at China Evergrande Group’s wealth management unit in the latest trouble for the heavily indebted developer

    ByThe Associated Press

    September 17, 2023, 5:06 AM

    FILE – A woman walks past a map showing Evergrande development projects in China, at an Evergrande city plaza in Beijing on Sept. 21, 2021. Police in a southern Chinese city said on Saturday, Sept 17, 2023 they have detained some staff at China Evergrande Group’s wealth management unit in the latest trouble for the heavily indebted developer. (AP Photo/Andy Wong, File)

    The Associated Press

    TAIPEI, Taiwan — Police in a southern Chinese city said they have detained some staff at China Evergrande Group’s wealth management unit in the latest trouble for the heavily indebted developer.

    A statement by the Shenzhen police on Saturday said authorities “took criminal coercive measures against suspects including Du and others in the financial wealth management (Shenzhen) company under Evergrande Group.”

    It was unclear who Du was. Evergrande did not immediately answer questions seeking comment.

    Media reports about investors’ protests at the Evergrande headquarters in Shenzhen in 2021 had listed a person called Du Liang as head of the company’s wealth management unit.

    Evergrande is the world’s most heavily indebted real estate developer, at the center of a property market crisis that is dragging on China’s economic growth.

    The group is undergoing a restructuring plan, including offloading assets, to avoid defaulting on $340 billion in debt.

    On Friday, China’s national financial regulator announced it had approved the takeover of the group’s life insurance arm by a new state-owned entity.

    A series of debt defaults in China’s sprawling property sector since 2021 have left behind half-finished apartment buildings and disgruntled homebuyers. Observers fear the real estate crisis may further slow the world’s second-largest economy and spill over globally.

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  • Chinese police detain wealth management staff at the heavily indebted developer Evergrande

    Chinese police detain wealth management staff at the heavily indebted developer Evergrande

    Police in a southern Chinese city say they have detained some staff at China Evergrande Group’s wealth management unit in the latest trouble for the heavily indebted developer

    ByThe Associated Press

    September 17, 2023, 5:06 AM

    FILE – A woman walks past a map showing Evergrande development projects in China, at an Evergrande city plaza in Beijing on Sept. 21, 2021. Police in a southern Chinese city said on Saturday, Sept 17, 2023 they have detained some staff at China Evergrande Group’s wealth management unit in the latest trouble for the heavily indebted developer. (AP Photo/Andy Wong, File)

    The Associated Press

    TAIPEI, Taiwan — Police in a southern Chinese city said they have detained some staff at China Evergrande Group’s wealth management unit in the latest trouble for the heavily indebted developer.

    A statement by the Shenzhen police on Saturday said authorities “took criminal coercive measures against suspects including Du and others in the financial wealth management (Shenzhen) company under Evergrande Group.”

    It was unclear who Du was. Evergrande did not immediately answer questions seeking comment.

    Media reports about investors’ protests at the Evergrande headquarters in Shenzhen in 2021 had listed a person called Du Liang as head of the company’s wealth management unit.

    Evergrande is the world’s most heavily indebted real estate developer, at the center of a property market crisis that is dragging on China’s economic growth.

    The group is undergoing a restructuring plan, including offloading assets, to avoid defaulting on $340 billion in debt.

    On Friday, China’s national financial regulator announced it had approved the takeover of the group’s life insurance arm by a new state-owned entity.

    A series of debt defaults in China’s sprawling property sector since 2021 have left behind half-finished apartment buildings and disgruntled homebuyers. Observers fear the real estate crisis may further slow the world’s second-largest economy and spill over globally.

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  • Alex Jones spent over $93K in July. Sandy Hook families have yet to see a dime

    Alex Jones spent over $93K in July. Sandy Hook families have yet to see a dime

    HARTFORD, Conn. — Alex Jones’ personal spending is frustrating families who are trying to collect on the $1.5 billion in judgments against him for calling the 2012 Sandy Hook elementary school shooting a hoax.

    The conspiracy theorist and Infowars host has been paying his own wife, Erika Wulff Jones, $15,000 a month, according to the most recent spending report he filed in his bankruptcy case — payouts called “fraudulent transfers” by lawyers for some of the shooting victims’ families. Jones says they’re required under a prenuptial agreement.

    In July, Jones spent $7,900 on housekeeping. He dished out more than $6,300 for meals and entertainment, not including groceries, which totaled nearly $3,400 — or roughly $850 per week.

    A second home, his Texas lake house, cost him nearly $6,700 that month, including maintenance and property taxes, while his vehicles and boats sapped another $5,600, including insurance, maintenance and fuel.

    His total personal expenses for July topped $93,000, up from nearly $75,000 in April, not including legal fees and other costs for his court cases, according to bankruptcy filings.

    “It is disturbing that Alex Jones continues to spend money on excessive household expenditures and his extravagant lifestyle when that money rightfully belongs to the families he spent years tormenting,” said Christopher Mattei, a Connecticut lawyer for the families. “The families are increasingly concerned and will continue to contest these matters in court.”

    In an Aug. 29 court filing, the lawyers for the families said that if Jones doesn’t reduce his personal expenses to a “reasonable” level, they will ask the judge to bar him from “further waste of estate assets,” appoint a trustee to oversee his spending, or dismiss the bankruptcy case.

    On his Infowars show Tuesday, Jones said he’s not doing anything wrong.

    “If anything, I like to go to nice restaurants. That is my deal. I like to go on a couple of nice vacations a year, but I think I pretty much have earned that in this fight,” he said, urging his audience to donate money for his legal expenses.

    Sandy Hook families won nearly the $1.5 billion in judgments against Jones last year in lawsuits over repeated promotion of a false theory that the school shooting that killed 20 first graders and six educators in Newtown, Connecticut, never happened.

    Relatives of the victims testified at the trials about being harassed and threatened by Jones’ believers, who sent threats and even confronted the grieving families in person, accusing them of being “crisis actors” whose children never existed.

    Collecting the astronomical sum, though, is proving to be a long battle.

    When Jones filed for bankruptcy, it put a hold on the families’ efforts to collect the $1.5 billion in state courts as a federal bankruptcy court judge decides how much money Jones can actually pay his creditors.

    Lawyers for the families have said in court that it has been difficult for them to track Jones’ finances because of the numerous companies he owns and multiple deals among those corporate entities.

    Meanwhile, Jones is still broadcasting. He and his media company, Free Speech Systems, are seeking court approval for a new contract that would pay him $1.5 million a year plus incentive bonuses, up from his current $520,000-a-year salary. The company also filed for bankruptcy protection last year.

    On Infowars, Jones said Tuesday that he is more than $1 million in debt. If he gets the salary increase, he said, he would be left with about $300,000 a year after paying his legal bills.

    “With all my expenses and things, that’s nothing,” he said. “And I don’t care about that. I’m wearing a shirt I bought, like, eight years ago, and I love it to death.”

    Financial documents filed by Jones and his bankruptcy lawyers say his personal net worth is around $14 million. His assets include a home worth $2.6 million, a $2.2 million ranch, a $1.8 million lake house, a $500,000 rental property, and four vehicles and two boats worth more than $330,000 in total. Jones had nearly $800,000 in his bank accounts on July 31, court documents show.

    Free Speech Systems, meanwhile, continues to rake in cash from the sale nutritional supplements, survival supplies and other merchandise that Jones hawks on Infowars, bringing in nearly $2.5 million in revenue in July alone, according to Jones’ financial reports, which he signed under penalty of perjury. The company’s expenses totaled about $2.4 million that month.

    Meanwhile, some of the Sandy Hook families have another pending lawsuit claiming Jones hid millions of dollars in an attempt to protect his wealth. One of Jones’ lawyers has called the allegations “ridiculous.”

    Jones, who is appealing the $1.5 billion in lawsuit awards against him, sat for a deposition in his bankruptcy case Tuesday and Wednesday in his hometown of Austin, Texas, where Infowars is based.

    On his show Tuesday, he denied financial wrongdoing.

    “I’m not Lex Luthor … when it comes to finances and life,” he said. “I mean, I’m a straight-up guy. I’m a do-good in Mayberry RFD.”

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  • Europe’s central bank hikes interest rates again even as threat of recession grows

    Europe’s central bank hikes interest rates again even as threat of recession grows

    FRANKFURT, Germany — The European Central Bank piled on a 10th straight interest rate increase Thursday, pressing forward in its fight against stubbornly high inflation that has been plaguing consumers even as worries grow that higher borrowing costs could help push the economy into recession.

    The increase of a quarter-percentage point comes as central banks around the world, including the U.S. Federal Reserve, try to judge how much anti-inflation medicine is too much — and what’s the right point to halt their swift series of rate rates before the economy tips into a downturn and people lose their jobs.

    The decision raises the ECB’s benchmark deposit rate to 4%, up drastically from minus 0.5% just a little more than a year ago and the highest it has been since the euro was established in 1999.

    Interest rates are at levels that “maintained for a sufficiently long duration” will make a substantial contribution to bringing down inflation, President Christine Lagarde said at a news conference.

    “Future decisions will ensure that the key ECB interest rates will be set at sufficiently restrictive levels for as long as necessary,” Lagarde said, adding that policymakers will keep relying on available data.

    But she added that “we can’t say that now, that we are at peak.”

    Annual inflation of 5.3% in the 20 countries that use the euro currency is well above the bank’s target of 2%, robbing consumers of purchasing power and contributing to economic stagnation — supporting arguments for the rate increase.

    Pushing the other way was the growing awareness that higher borrowing costs are weighing on decisions by consumers and businesses to invest and spend and are becoming a burden on the economy.

    “The ECB’s communcation was clear: today was the last hike in the current cycle,” said Carsten Brzeski, chief eurozone economist for ING bank.

    “Looking ahead, a further weakening of the economy and more traction in a deflationary trend will make it very hard to find arguments for yet another rate hike before the end of the year,” Brzeski said.

    Higher rates have slammed the real estate market, sending mortgage rates higher and ending a yearslong rally in home prices.

    The major European economies — Germany, France, Spain and Italy — also saw shrinking activity in August in the services sector even at the tail end of a strong tourism summer in Spain and Italy, according to S&P Global’s surveys of purchasing managers. Services is a broad category that includes hotel stays, haircuts, car repairs and medical treatment.

    That comes on top of a slowdown in global manufacturing that is hitting Germany, Europe’s biggest economy, particularly hard.

    The eurozone economy has been teetering on the edge of recession since last year, growing only 0.1% in each of the first two quarters of this year.

    Yet the economic picture does not resemble a typical recession because unemployment is at a record low of 6.4%. Labor shortages have sent people’s pay higher — one factor complicating the ECB’s inflation fight.

    Also weighing on the outlook is a weaker euro against the strengthening U.S. dollar as investors take the view that economic weakness will hit Europe and China. They are betting that the U.S. Federal Reserve might manage a “soft landing” by finishing its rate hikes without pushing the economy into a downturn.

    The Fed made its 11th rate increase in July, bringing its key rate to the highest level in 22 years after pausing in June. Economists and investors generally expect the Fed to skip a rate hike at its meeting next week, but it could increase again in November.

    Inflation is lower in the U.S. — at 3.7% — than in Europe despite an upward bump from gasoline prices in August.

    Central banks around the world have been hiking rates to stamp out inflation that broke out after the sharp economic rebound from the COVID-19 pandemic strained supply chains and Russia’s invasion of Ukraine sent food and energy prices higher.

    The Bank of England raised rates for the 14th straight time last month, and markets think it’s more likely than not that the central bank would hike again when it meets next week.

    Interest rates combat inflation by raising the cost of credit for things people want to buy, particularly houses, and for business investment in buildings and equipment. That cools off demand for goods and relieves upward pressure on prices.

    The flip side is that rate hikes can hurt economic growth if they’re overdone.

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  • Europe’s economic outlook worsens as high prices plague consumer spending

    Europe’s economic outlook worsens as high prices plague consumer spending

    FRANKFURT, Germany — The European Union has lowered its forecast for economic growth this year and next, saying inflation is taking a heavy toll on people’s willingness to spend in shops — while higher interest rates are sharply restricting the credit needed for investment and purchases.

    The revised forecast Monday from the European Commission, the EU’s executive arm, comes as fears of recession grow and as the European Central Bank faces a key decision this week on whether to keep raising rates, which are aimed at getting inflation under control.

    The 20 countries that use the euro currency are expected to see growth of 0.8% this year instead of 1.1% projected in the spring forecast, the commission said. For next year, growth expectations were lowered to 1.3% from 1.6%.

    For the broader 27-country EU, the forecast also was lowered to 0.8% from 1% this year and to 1.4% from 1.7% next year.

    “Weakness in domestic demand, in particular consumption, shows that high and still increasing consumer prices for most goods and services are taking a heavier toll than expected,” a commission statement said.

    EU Economy Commissioner Paolo Gentiloni said at a news conference that “further weakening in the coming months” was foreseen as the economy faces “multiple headwinds.”

    One source of uncertainty is how far the ECB will go on interest rates — more expensive credit restrains economic growth in some areas such as real estate, but if higher rates succeed in lowering inflation, that would boost consumer spending power.

    Recession fears have grown even after the eurozone scraped through the winter without one, recording stagnant growth of 0.1% in the first two quarters of this year.

    Surveys of purchasing managers show that economic activity is contracting in all major eurozone economies, according to Alexander Valentin, senior economist at Oxford Economics, data that “add to mounting recession risks.”

    A key source of weakness has been Germany, whose manufacturing- and export-oriented economy has been hit by higher energy prices and slowing demand in China, a key trade partner.

    The commission cut its forecast for Europe’s largest economy this year to minus 0.4%. Germany is the only major economy expected to shrink this year, according to the International Monetary Fund, which foresees a decline of 0.3%.

    It will take time for Germany to address its issues with energy costs, Gentiloni said: “You don’t solve this in a couple of weeks.” But he added that “this is a strong economy with the tools and the possibility to recover.”

    Despite near-zero growth, the state of the larger eurozone economy doesn’t resemble a typical recession, because unemployment is at record lows and wages are gradually catching up to the purchasing power lost to inflation as workers demand and get more.

    Energy prices have declined since their brutal spike tied to Russia’s war in Ukraine, while food inflation keeps declining. Annual inflation was 5.3% in July, down from the peak of 10.6% in October.

    The eurozone suffered twin shocks from the invasion of Ukraine and the COVID-19 pandemic. Russia cut off most of its natural gas to Europe, sending prices skyrocketing and starting a scramble to line up more expensive alternative supplies.

    The economic rebound from the pandemic sent consumer prices higher as demand for goods created bottlenecks in supplies of raw materials and parts, which have now mostly eased. Higher prices spread to food and then services, a broad category ranging from haircuts and hotel stays to medical treaments and car repairs.

    Prospects of weakening economic growth have led some economists to predict the European Central Bank may avoid raising interest rates Thursday following nine straight hikes.

    ECB President Christine Lagarde has said the decision is open and will be made based on available data. In just over a year, the central bank has raised its benchmark deposit rate from minus 0.5% to 3.75%, the fastest pace since the euro currency launched in 1999.

    The downgrade in the EU forecast comes as the euro trades lower against the U.S. dollar — at $1.07, down from about $1.12 in late July.

    One reason is an ongoing rally in the dollar, which has recorded gains against other major currencies for eight straight weeks as the market increasingly sees economic weakness in China and Europe instead of in the U.S.

    A weaker euro can complicate life for the ECB by increasing the price of imported goods — such as energy — that are priced in dollars. On the other hand, it makes European exports more competitive in price.

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