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Johnson & Johnson recalled a batch of baby powder after a test found asbestos. The company says the product is safe. (JNJ)

Tue, 10/29/2019 - 3:12pm

  • On October 18, Johnson & Johnson recalled a single lot of its baby powder after the Food and Drug Administration found a tiny amount of asbestos in samples from a single bottle purchased from an online retailer. 
  • Further testing didn't find any asbestos in samples from that bottle or others in the same lot, J&J said in a statement on October 29.
  • Talcum powder, or talc, a mineral that makes up baby powder, has been at the center of thousands of lawsuits against the company alleging that the substance contributed to cancers, the Wall Street Journal reported. J&J says that its baby powder is safe.
  • J&J said in a statement that it regularly tests the talc used in baby powder and that the product is safe. "Thousands of tests over the past 40 years repeatedly confirm that our consumer talc products do not contain asbestos," the company said.
  • Visit Business Insider's homepage for more stories.

Johnson & Johnson recalled a single lot of its Johnson's Baby Powder after the Food and Drug Administration found a small trace of asbestos in samples from a single bottle purchased from an online retailer. 

While the trace of asbestos was minute, J&J said it is initiating the recall out of caution. The company says that its baby powder is safe.

After starting the recall, J&J had two third-party labs conduct more tests on the baby powder bottle and others in the lot. Those tests didn't find any asbestos, J&J said in a statement on October 29.

The recall, announced on October 18, drew fresh attention to product safety concerns surrounding J&J's baby powder, which is made from talcum powder, or talc. Baby powder has been at the center of thousands of lawsuits against J&J, the Wall Street Journal recently reported. Plaintiffs claim that baby powder contributed to their cancer, the Journal said.

J&J stated in a press release that it has a "rigorous testing standard" to ensure the safety of baby powder.

"Thousands of tests over the past 40 years repeatedly confirm that our consumer talc products do not contain asbestos," the company stated. "Not only do we and our suppliers routinely test to ensure our talc does not contain asbestos, our talc has also been tested and confirmed to be asbestos-free by a range of independent laboratories, universities and global health authorities." 

(This article was published on October 18 and has been updated.)

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Citizens Bank has inked exclusive Xbox and iPhone financing deals — and wants to do more. It shows how the regional lender is seeking new avenues of growth amid digital pressures.

Tue, 10/29/2019 - 3:01pm

  • Citizens Bank has inked an exclusive partnership with Microsoft to offer gamers financing on consoles through the Xbox All Access program.
  • "We're going to continue to partner with other merchants and retailers like Microsoft and Apple to expand the business that way," Brendan Coughlin, president of consumer deposits and lending at Citizens Bank, told Business Insider.
  • This alternate route into consumer credit could give Citizens a way to sell other products to a new customer base, and adding more such partnerships is a priority for the bank. 
  • Click here for more BI Prime stories.

Citizens Bank has inked an exclusive partnership with Microsoft to offer gamers financing on Xbox One consoles, and the regional lender told us that finding more of these types of deals is a priority.  

The move shows how traditional banks are being pushed to think outside of their physical locations when it comes to growth. Digital offerings that go head-to-head with challenger banks are another option — but the installment partnerships can also offer smaller banks a well-known brand's name recognition. 

Xbox All Access works similar to the financing plans already on the market for cell phones, where customers pay off the cost of the device in installments. Citizens has also been the partner bank for Apple's iPhone Upgrade Program since 2015.

"It couldn't be any higher in our strategic planning roadmap to invest and explore expansion in this space," Brendan Coughlin, president of consumer deposits and lending at Citizens Bank, told Business Insider. 

The All Access program includes a monthly subscription to Xbox's online gaming and Game Pass library. The 0% APR, no-fee financing option will be available first through Amazon, though Coughlin noted that ultimately the goal will be to offer the financing program at all Xbox retailers.

"We're going to continue to partner with other merchants and retailers like Microsoft and Apple to expand the business that way," said Coughlin. "For the short-term foreseeable future, you'll hear more on merchant partnerships."

Given the loans aren't earning income, Citizens charges something called a merchant discount rate, which is a charge to merchants based on payment method. Merchant discount rates are also applied by credit card companies for processing payments.

"Banks win because it's a profitable relationship, retailers win because they're getting more sales, and the customer wins because they're getting 0% free financing," said Coughlin.

Read more: Microsoft is bringing back its all-inclusive Xbox One subscription deal, and it includes an upgrade plan for the next-generation Xbox

Alternate avenues for growth

Citizens has a credit card business, but it's not as sizable as other players, Coughlin said, and the hope is that this alternate route into consumer credit could bring Citizens more banking business.

"This is an attractive space for us to acquire new customers," Coughlin said. "Our hope is the work we've done with them will put us in a position to be in the considered set to earn their wealth business, their mortgage, their credit card, and their deposits loyalty."

Given Apple and Microsoft's reputation for innovation and their far-reaching customer bases, these partnerships could help Citizens expand its reach. 

According to a Federal Reserve report, Citizens Bank is the 16th largest commercial bank by assets in the US . The regional bank has roughly 1,000 branches, mostly in the Northeast. JPMorgan Chase, by comparison, has 5,000 branches across the country.

High-profile partnerships are one way for Citizens to tap more people to lend to, though the challenge of acquiring new customers doesn't stop there.

With competition from both incumbent consumer banks and challenger banks like Chime, Citizens has spent heavily on technologies and rolled out new products to keep and win new customers. 

During a second-quarter earnings call, Citizens Bank CFO John Woods noted the bank's investment in "expanding digital strategies across the company to reach more customers" and "reinventing the payment experience at the point-of-sale (POS)."

This summer, the bank said it would be spending $50 million on upgrading its digital capabilities.

"As consumers go less and less to a brick-and-mortar, banks need to innovate ways to acquire customers," said Coughlin.

Another alternative to credit cards

Citizens' installment loan offers the financing option up front, as opposed to offering a discount with a retail credit card at checkout. 

"We believe that this value proposition of point-of-sale financing is a much more modernized version of co-brand credit cards," Coughlin said.

"If done in the right way, it can significantly disrupt that market and, ultimately, can significantly accelerate sales trajectories for more modern retailers that adopt this trend quicker." 

Citizens does not offer a direct-to-consumer point-of-sale financing option, but Coughlin said that capability is definitely top of mind.

"We certainly want to have the capability, detached from merchants as well," he said.

Direct-to-consumer financing fintechs like Affirm and Afterpay establish partnerships with retailers to offer point-of-sale financing at checkout. The fintechs also have their own apps where shoppers can set up financing from Affirm or Afterpay at any merchant.

"This is a capability and a business that has an enormous amount of legs, and it can be a disruptor to how consumers think about their cash flow and their payments over time," Coughlin said.

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US Treasury Secretary Mnuchin is reportedly open to relaxing bank regulations born from the 2008 financial crisis

Tue, 10/29/2019 - 2:56pm

  • US Treasury Secretary Steven Mnuchin is open to loosening laws that require banks to create emergency reserves for liquidity crises, Bloomberg reported Tuesday.
  • Mnuchin said he spoke with JPMorgan CEO Jamie Dimon and other banks about a September lending rate spike and how to avoid similar issues.
  • Dimon recently said JPMorgan would have intervened in September's liquidity crisis had laws been looser. The spike prompted the Federal Reserve to begin capital injections for the first time since the 2008 financial crisis.
  • Mnuchin's comments arrive just days after Senator Elizabeth Warren warned the Treasury Secretary not to ease the bank regulations.
  • Visit the Business Insider homepage for more stories.

US Treasury Secretary Steven Mnuchin is open to loosening bank laws meant to create buffer reserves in case of financial crisis, Bloomberg reported Tuesday afternoon.

The laws — created in the wake of the 2008 financial crisis — stifle bank liquidity, as the firms are obliged to hold a larger proportion of their free cash in emergency reserves. Larger banks are assessed on how prepared they for financial crises, and some analysts project firms to restrain overnight lending to score better in the year-end reviews.

"The banks have raised an issue around intra-day liquidity, and that is something that makes sense for regulators to look at," Mnuchin said in Tel Aviv.

The regulations have been under greater focus in recent weeks, as a mid-September spike in the overnight lending rate prompted the Federal Reserve to begin capital injections for the first time in a decade. The central bank began mending the rate through market repurchase agreement, or repo, operations on September 17, and started purchasing Treasury bills on October 15 to further support banks' reserves.

Mnuchin told Bloomberg he recently spoke to JPMorgan Chase CEO Jamie Dimon and other banks about the liquidity crisis and how to solve recent pressures. Dimon previously blamed liquidity laws for why JPMorgan didn't step in to calm the repo rate during September's spike.

"It's a reasonable question: Have we gone too far in the other direction in requiring the banks to maintain this excess liquidity for intra-day operations," Mnuchin told Bloomberg.

The statement comes days after Senator Elizabeth Warren penned a letter to Mnuchin warning him not to relax the bank laws. She asked the Treasury Secretary what he thinks caused the rate spike, and why the Fed is boosting bank reserves when the firms are recording record earnings.

"These rules were designed to ensure that banks have enough cash on hand to meet their obligations in the event of another market crash," Warren wrote. "Banks are reporting profits at record levels, and it would be painfully ironic if unexplained chaos in a small corner of the banking market became an excuse to further loosen rules that protect the economy from these kinds of risks."

The Federal Open Market Committee meets Tuesday to discuss policy and potentially call for another interest rate cut. The Fed has already cut rates twice in 2019, citing increased risk from trade pressures and global economic slowdown for the actions.

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San Francisco's 'Yang Gang' is having lunch at Sam Altman's house to raise funds for presidential candidate Andrew Yang

Tue, 10/29/2019 - 2:42pm

  • Presidential candidate Andrew Yang is having a fundraiser in San Francisco at supporter and tech investor Sam Altman's home.
  • The former tech executive running in the 2020 election has a core base in Silicon Valley, where employees from Google, Amazon, Apple, and Facebook have made huge donations to his campaign.
  • Altman described himself in an email to Business Insider as a "long-time supporter" of Yang, who shares his enthusiasm for universal basic income and mitigating the threat of automation.
  • Visit Business Insider's homepage for more stories.

Presidential hopeful Andrew Yang has friends in high-tech places.

Sam Altman, one of tech's most influential investors, is throwing an invite-only luncheon at his San Francisco home next week to raise funds for Yang, an entrepreneur whose uncommon policy ideas has earned him a fan base — or "Yang Gang" — in tech's heartland.

The invite was first leaked by Recode's Teddy Schleifer on Twitter.

The presidential candidate who shuns ties and wants to provide every American with a "universal basic income" has rallied a group of engineers, product managers, and tech executives behind his campaign. His signature proposal is to give all adults $1,000 a month, a so-called "freedom dividend" paid for by taxing companies that benefit the most from automation and artificial intelligence.

It's an idea that Altman has seeded in his backyard. He led a pilot program that gave free cash to a few dozen people in Oakland, California, for a period of one year. The goal of the experiment was to see how people's lives change when they don't have to worry about money. A longer-term study has been delayed several times.

Employees at the same companies that Yang wants to tax are putting money behind him. The Center for Responsive Politics, whose website tracks federal campaign spending, lists the companies whose public action committees, employees, or owners have contributed the most to Yang's campaign committee. Google parent-company Alphabet tops the heap, followed by Amazon, Microsoft, the University of California, and Facebook.

On a national level, Yang is polling in the single-digit percentages in several polls. But in Silicon Valley, Yang's fans include some big names. Jack Dorsey, the cofounder and chief executive of both Twitter and Square, has contributed to Yang's campaign; James Monsees, who helped create Juul, and Twitch cofounder and executive Kevin Lin are also donors.

Altman, who stepped down as head of startup accelerator Y Combinator to focus on a new venture earlier this year, called himself a "long-time supporter of Yang" in an email to Business Insider. He's contributed $2,700 to the campaign, according to data from the Federal Election Commission, though Altman believes the information hasn't been updated and said he's given $5,600.

Altman said he's "particularly interested in (Yang's) promotion of UBI and understanding of the coming wave of automation."

The tech investor's new company is an artificial intelligence research firm called OpenAI, which he cofounded with Elon Musk. It's building autonomous systems that are inspired by the way humans learn and grow, with the goal of sharing information and maximizing the benefit of artificial intelligence for everyone.

Now, Altman is tapping the Yang Gang for support.

A recent email blast from Yang's campaign that was reviewed by Business Insider invited donors in the San Francisco Bay Area to attend and contribute to one of three upcoming fundraisers.

"Now is a critical time for raising funds as we want to get on the airwaves in Iowa and New Hampshire and meet our end of the month goals," a volunteer for the campaign's finance office wrote.

Tickets to the event at Altman's Mission Bay home start at $2,000. A VIP pass costs $2,800 a pop, while the "max donor" contribution is $5,600. These funds are funneled into Yang's campaign committee.

A campaign spokesperson did not return a request for comment.

This isn't Altman's first foray into politics. After the surprise results of the 2016 election, Altman said he wanted to learn about how the rest of America thinks. He traveled across the country to talk to Trump supporters and shared his findings on his personal blog.

SEE ALSO: Andrew Yang is running for president in 2020. Here's everything we know about the candidate and how he stacks up against the competition.

SEE ALSO: One statistic shows why Andrew Yang is an ideal running mate in the Democratic primary

SEE ALSO: The non-profit org founded by Elon Musk and Sam Altman to save the world from artificial intelligence has decided to pursue profits

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5 of the best ways to fly to Japan on points and miles, so you can save your money for sushi and souvenirs

Tue, 10/29/2019 - 2:09pm

  • Japanese is a bucket-list travel destination, and with good reason. But it's not cheap.
  • If you want to visit, one way to cut down on expenses is to book your flights with points and miles.
  • Luckily, it isn't hard to earn enough points from top rewards credit cards to book a flight to Japan, especially if you're open to flying in economy class.
  • For example, if you have Ultimate Rewards points from a Chase card like the Chase Sapphire Preferred Card, you could book a round-trip flight on ANA by transferring just 60,000 points to Virgin Atlantic Flying Club.
  • Read more personal finance coverage.

Japan is an incredible travel destination, perfect for luxury and adventure travelers alike. It's also quite expensive, so you'll want to plan out your trip carefully to avoid sticker shock. Flights are one of the biggest expenses and, luckily, you can cover them with points and miles.

Below are five of the cheapest ways to get to Japan in economy class on points and miles, along with the rewards credit cards that can help you earn the points you need to get there.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.

All Nippon Airways (40,000 to 55,000 miles round-trip)

Japanese carrier All Nippon Airways has many "sweet spot" awards in its loyalty program, and the US to Japan is one of them.

It takes just 50,000 miles round-trip to fly ANA to Japan in economy class. During low season (most of January to February, and April), redemption rates drop to 40,000 miles round-trip. Even high-season awards are reasonable, at 55,000 miles.

If you're wondering how on earth you can get your hands on some ANA miles, it's actually easier than you might think. ANA is a transfer partner of two major bank rewards programs: American Express Membership Rewards and Citi ThankYou Rewards. Points from both programs transfer to ANA at a 1:1 ratio.

Earning 40,000 to 55,000 miles for a round-trip ticket to Japan is as easy as one credit card sign-up bonus. Below is a list of cards that earn points in these respective programs:

American Express Membership Rewards

The Platinum Card® from American Express
The Business Platinum® Card from American Express
American Express® Gold Card
American Express® Business Gold Card

Citi ThankYou Rewards

• Citi Premier℠ Card
Citi Prestige® Card

Alaska Airlines MileagePlan (65,000 to 70,000 miles round-trip)

Alaska Airlines' MileagePlan program partners with both American and Japan Airlines, giving you two solid options for flying to Japan on points. A one-way award ticket in economy class will cost you 32,500 Alaska miles on American Airlines.

The Alaska Airlines Visa Signature credit card and the Alaska Airlines Visa Business credit card sign-up bonuses will cover the miles needed for a round-trip flight.

Japan Airlines (50,000 miles round-trip)

It's no surprise that Japan Airlines (also known as JAL) is a great option for getting to Japan on points and miles. The airlines flies to Japan from several US cities, including San Francisco, San Diego, Los Angeles, New York, Dallas, and Seattle, to name a few. And at just 50,000 miles round-trip, flying to Japan is a bargain.

Thanks to partnerships with American Express Membership Rewards and Citi ThankYou, earning enough JAL miles for this award is feasible. Both the Amex Platinum and Citi Premier Card offer welcome bonuses high enough to cover a round-trip economy-class award ticket to Japan on Japan Airlines.

Additionally, Japan Airlines has a co-branded credit card, though the sign-up bonus is on the low end at 10,000 miles after $5,000 spent within 3 months.

Click here to learn more about the Amex Platinum. Virgin Atlantic Flying Club (60,000 miles round-trip)

Virgin Atlantic's Flying Club program partners with several airlines that fly from the US to Japan. The best value is through ANA, which requires just 60,000 miles round-trip in economy class between the Western US and Japan. For 65,000 miles you can depart from the central or eastern US.

The Virgin Atlantic credit card currently offers 30,000 miles after you spend $1,000 within 90 days. The card also earns 1.5 miles per dollar on everything, which can help you meet your travel goals faster.

In addition to offering a co-branded credit card, Virgin Atlantic is a transfer partner of the big three bank rewards programs: Chase Ultimate Rewards, Citi ThankYou Rewards, and American Express Membership Rewards. This makes acquiring miles even easier, especially if you're making use of credit card category bonuses.

Your best option for scoring those 60,000 to 65,000 miles needed for a round-trip ticket to Japan? The Chase Sapphire Preferred Card. It currently offers 60,000 bonus points after $4,000 spent within the first three months of account opening. Transfer those points to Virgin Atlantic Flying Club when they post and you could be on your way to Japan!

American Express Membership Rewards

The Platinum Card from American Express
American Express Business Platinum Card
American Express Gold Card
American Express Gold Business Card

Chase Ultimate Rewards

Chase Sapphire Preferred
Chase Sapphire Reserve
Chase Ink Business Preferred Credit Card

Citi ThankYou Rewards

• Citi Premier Card
• Citi Prestige Card

American Airlines (65,000 to 70,000 miles round-trip)

American Airlines requires 65,000 to 70,000 miles for a round-trip flight between the US and Japan. The redemption rates depend on when you're traveling.

American AAdvantage has off-peak pricing, meaning you'll pay just 32,500 miles each way by traveling during the following dates:

To Japan: January 1 - April 30, July 1 - November 30
From Japan: January 16 - April 19, May 2 - 31, September 1 - December 31

If you're saving up points for a trip to Japan, AAdvantage miles are a great option because they're so easy to come by. American Airlines has co-branded credit cards with both Citi And Barclays, and sign-up bonuses often range between 50,000 to 75,000 miles after you complete spending requirements.

At the moment, your best option is the AAdvantage Aviator Red World Elite Mastercard, which offers 60,000 bonus miles after your first purchase in the first 90 days. That's right: You get 60,000 miles for any purchase. No big spending requirements to worry about. The only other expense is the $99 annual fee, which is small considering you're earning almost enough miles for a round-trip ticket to Japan.

American Airlines credit cards

• Barclays AAdvantage Aviator Red Mastercard
• Barclays AAdvantage Aviator Business Mastercard
• Citi®/ AAdvantage® Platinum Select® World Elite™ Mastercard®
• Citi® AAdvantage® Executive World Elite™ Mastercard®
• CitiBusiness®/AAdvantage® Platinum Select® World Mastercard®
• American Airlines AAdvantage MileUp℠ card

Click here to learn more about the Chase Sapphire Preferred card.

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Here’s what’s in the first stage of the partial US-China trade agreement

Tue, 10/29/2019 - 2:05pm

  • The US and China are closing in on the first phase of an agreement to defuse a more than yearlong tariff dispute.
  • A truce reached this month stalled planned tariff escalations, but there have been few details about how core issues would be resolved.
  • Here's what we know so far. 
  • Visit Business Insider's homepage for more stories.

The US and China are closing in on the first phase of an agreement to defuse a more than yearlong tariff dispute, according to trade officials. A truce reached this month stalled planned tariff escalations, but there have been few details as to how core issues would be resolved. Here's what we know so far. 

SEE ALSO: Trump boasted that new market highs are a 'big win' for everyone. But half of Americans don't own stock.

Intellectual property

Intellectual property rules, which were cited in the US Section 301 investigation that launched the trade dispute, have emerged as a key point of contention between the two sides. President Donald Trump has said the partial agreement included unspecified commitments that would help protect American companies. 


China said Tuesday it would "neither explicitly nor implicitly" force foreign companies to transfer technologies, a practice that has long been seen by the US and other countries as an economic aggression. But China has denied that it engaged in that practice to begin with, leaving some experts skeptical of change. 

"The Chinese need money and want US tariffs removed," said Derek Scissors, a resident scholar at the conservative-leaning American Enterprise Institute. "Their level of interest in true liberalization remains minimal."


In August, the Treasury Department designated China a currency manipulator for the first time since 1994 after the yuan breached a key level. Experts questioned the move because it was unclear whether the depreciation was in line with market forces.

Both sides are already barred from wielding their currencies as a weapon to compete in the international market. Trump, who often criticizes the relative strength of the dollar, said that the first phase of a trade agreement would include unspecified currency terms on a bilateral level. 

Trade balance

China has already resumed some purchases of American agricultural products, a demand that has become increasingly important for Trump as he campaigns for re-election. The purchases are not expected to bring farm exports above levels seen before the trade dispute, which had sent them sharply lower. 

More broadly, Trump has derided the overall trade deficit with China. While an agreement to purchase other US goods could address those concerns in the near-term, trade balances are influenced by a flurry of other factors including foreign exchange rates and the strength of an economy. 


Dispute resolution mechanism

The US has struggled to secure an enforcement mechanism that would lock China into economic commitments, which it has been known to backtrack on in the past. The last time the two sides were seen as on the verge of a trade deal, China reversed on pledges to rewrite related domestic laws.

"The real test moving forward will be in monitoring and enforcement of these commitments, especially with respect to technology transfers," said Mary Lovely, a trade scholar at the Peterson Institute for International Economics.



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Giants like JPMorgan, Morgan Stanley, and Tradeweb are embracing a credit-trading revolution to move multi-billion-dollar bond portfolios in minutes

Tue, 10/29/2019 - 2:04pm

  • Credit portfolio trading has exploded in 2019, according to Wall Street executives.
  • Investors are flocking toward the tool, and trading firms can facilitate it, as a way to exchange large, diverse bundles of bonds all at once with the help of algorithms and ETFs.
  • Wall Street's top fixed-income trading banks have experienced enormous growth in volumes and competition and are investing to capture the growing demand. 
  • Electronic bond-trading marketplaces are joining the fray, too. Tradeweb launched its product less than a year ago, and MarketAxess is set to counter with its own offering in November. 
  • Visit Business Insider's homepage for more stories.

One of the hottest trends in credit trading over the past year has every big bank and many trading venues investing money and resources to keep pace with what has become a vastly changing world.

This year marked an inflection point for credit portfolio trading, with volumes surging across Wall Street's biggest bond-trading desks as clients grew more comfortable with the transactions and banks and venues built out the capabilities to handle them. 

The shift means hedge funds and asset managers are increasingly adjusting their portfolios by bundling transactions together versus handling them piecemeal — making it easier and often cheaper for banks' biggest clients to reach the same end result. Bond index fund fees have come under intense competitive pressure industry-wide, leaving fund managers desperate to cut their own costs. 

It's the latest in a string of innovations to come to the credit market in recent years, pushing the industry towards increased electronification and away from high-touch practices that dominated the space for so long. 

The top-ranked fixed income, currencies, and commodities (FICC) trading firms on Wall Street — including JPMorgan, Bank of America Merrill Lynch, Barclays, Morgan Stanley, and Citigroup — have all seen significant growth in their portfolio trading businesses in 2019.

"Credit portfolio trading has grown tremendously. If you just think about where people are going in terms of sourcing liquidity, we expect this to double in the next couple of years, if not triple," said Edward Koo, the head of North American single-name CDS trading, portfolio trading, and e-trading at JPMorgan Chase.

Meanwhile, Tradeweb, one of the largest electronic marketplaces for trading corporate bonds, has also enjoyed a strong uptick in portfolio trades since it went live with it less than a year ago. One of its biggest competitors, MarketAxess, has plans to launch its own offering in November

More than just the latest trend to hit bond trading in recent years, portfolio trading is an example of top industry players racing to keep pace in a market being upended by technology — or risk getting left behind.

Banks are seeing big growth in portfolio trading

The concept of portfolio trading has been around for a while. But recent technological firepower has allowed the process to evolve from the hyper-manual passing of Excel spreadsheets back and forth to handling large or complex trades with ease and regularity due to algorithms and advanced risk analysis.

The way it works is pretty straightforward: Instead of hitting up individual brokers to trade bonds one at a time, an investor offers up or requests an entire basket of them, potentially hundreds of different securities, to execute in one fell swoop using algorithms and ETFs. 

There's no standard definition of what qualifies as a portfolio trade across institutions, so it's difficult to compare efforts. But executives across big-bank trading operations describe a massive uptick in 2019. 

To be sure, FICC trading revenues have generally been steadily shrinking industry-wide following the financial crisis, and while the portfolio trades represent a source of volume, they also are seen as lower-margin than old-school bond trades.  

Bank of America handled a $1.5 billion bespoke trade this summer comprising hundreds of bonds. It took under an hour, and cost the client less than three basis points — less than what it typically costs to execute an individual $25 million investment-grade bond trade — and they used bond ETFs to help offload the risk, executives at the firm told Business Insider. 

The firm launched its portfolio trading desk in early 2017 and has seen volumes balloon in 2019, and in July it went live with a new team focused on harnessing the firm's success trading bond portfolios and ETFs and deploying that across the fixed-income asset classes. 

Goldman Sachs is considered a pioneer in credit portfolio trading, with efforts at an algo-driven offering dating back to 2016. The bank did more than $30 billion in these trades in 2018, the Financial Times reported, up from $7 billion in 2017.

The top-ranked FICC firm on Wall Street, JPMorgan's initial foray into portfolio trading came in spring of 2018, but the bank started ramping up its efforts in earnest this April, adding headcount to Koo's team. By volume, the firm estimates bond portfolio trades have as much as quadrupled year-over-year. 

Drew Mogavero, co-head of US credit trading at Barclays, told Business Insider his firm has been active in portfolio trading since the second half of 2018 and has experienced "meaningful" growth throughout 2019.

"We haven't found many folks who aren't interested in learning more about it," he added.

Morgan Stanley, meanwhile, has seen a considerable increase in the volumes and number of clients involved since setting up a dedicated portfolio trading team within its credit division in March 2018. Year-over-year, the bank has seen a 60% increase in portfolio trading volumes as of October, with plans to continue to invest in tech and resources towards growing the effort, Edward Bayliss, head of macro credit at Morgan Stanley, told Business Insider.

"Portfolio trading has become an integral part of our overall credit trading business," he said.

Even non-bank dealers have gotten in on the action. Proprietary trading firm Jane Street, a major player in the ETF-trading space, has also been challenging the banks with its bond portfolio offering, handling $12.5 billion in volume in the second half of 2018, according to Bloomberg

Citigroup, the second-ranked FICC-trading bank, launched its systematic portfolio trading option this April, rolling it out first in investment-grade bonds and then high-yield debt this summer.

"Competition in the portfolio trading space from both banks and non-bank participants is increasing rapidly," Joe Geraci, cohead of global spread products at Citigroup, said.

Investors find plenty of use cases for portfolio trading

Investors big and small have shown interest in portfolio trading. For some it's a complement to ETF trading, where hundreds of bonds can be transformed into ETF shares. Others see its benefits in the ability to quickly adjust the risk portfolio of a certain strategy.

"There's been tremendous take-up from many different investor bases, whether it's asset managers, insurance companies, levered accounts. It's a more efficient mechanism and vehicle with which to displace risk," JPMorgan's Koo said. 

To be sure, some in the industry have pointed to portfolio trading only benefiting the largest investors. After all, only a fraction of investors have the capital to execute a portfolio trade over a billion dollars. However, trades don't need to be gigantic to yield benefits, either — they can also be used for moving a large amount of small bonds.

"There are many, many different usages. Certain ones are growing a little bit faster than the others, but they're all sort of coming together and that's why you see sort of this velocity and this exponential growth," Koo added. 

Trading venues also want in 

While portfolio trading can be done directly between banks and their customers, electric trading venues are also getting in on the action, offering a one-stop shop for investors to source portfolio trades amongst dealers more easily. 

Tradeweb, which went public in April and is among the wave of electronic marketplaces that have seen an increasing amount of trading volume in recent years, began offering portfolio trading at the end of 2018.

As of the end of September, the trading venue has already eclipsed $25 billion in portfolio trades, with a couple trades breaking the $1 billion mark, Chris Bruner, head of US credit at Tradeweb, told Business Insider. Average portfolio trade sizes are between $50 million to $100 million, with the mean continuing to skew higher as customers have grown more comfortable with the trading protocol, he added.

Bruner sees a key benefit of portfolio trading in its ability to allow investors to move bonds that don't typically trade often. 

"There's an opportunity for those less-liquid securities to trade more from portfolio trading," Bruner told Business Insider. "If you put it in a basket of a hundred bonds, a liquidity provider is more interested in getting the whole trade and a little less worried about, 'Hey, do 20% of these securities not trade very often?' Because they want the whole trade."

To be clear, portfolio trading doesn't completely eliminate the liquidity issue that has plagued the bond market for so long. Ultimately, there's no silver bullet to systematically price a bond that hasn't traded in a year. 

Currently, Tradeweb is the only electronic marketplace that offers portfolio trading for US corporate bonds, but that will soon change.

In June, MarketAxess, the largest electronic trading venue for US corporate bonds, announced plans to launch portfolio trading in the fall, though the firm had previously targeted early 2019, according to the FT. A MarketAxess spokesperson confirmed the marketplace will go live with portfolio trading in November.

And while dealers and trading venues alike are pushing to build out portfolio trading offerings, some investors warn there is only so much business to go around. 

"There's a lot of investment in terms of the set up and the structure that the bank needs to facilitate this activity, as well as an explicit investment in technology,"a senior executive at a large asset management firm recently told BI, adding that there are only "a handful of players that can do this in a meaningful way."

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Here's why one analyst thinks YouTube could be worth $300 billion as a standalone company, making it more valuable than AT&T, Exxon Mobil, and Bank of America (GOOGL)

Tue, 10/29/2019 - 1:58pm

  • Alphabet-owned YouTube could be worth as much as $300 billion if it were a standalone company, according to Needham & Company analyst Laura Martin. 
  • That figure would make the video-sharing platform the 15th largest company in the world by market capitalization ahead of Exxon Mobil, Bank of America, and AT&T
  • Martin's valuation for YouTube is based on estimated 2019 revenue of $30 billion and a 10-times enterprise-value-to-revenue multiple.
  • Visit the Business Insider homepage for more stories.

Google purchased YouTube for $1.65 billion in 2006, and now one Wall Street firm estimates the video-sharing platform could be worth $300 billion as a standalone company. 

Needham & Company analyst Laura Martin derived that valuation by forecasting the video-sharing platform's 2019 annual revenue and applying an enterprise-value-to-revenue multiple used to evaluate Roku, a streaming player provider. 

"YouTube would trade at $300B as a separate public company because streaming and growth investors will NOT buy the GOOGL conglomerate, but would pay 10x EV/Revs for an independent YouTube (Roku's multiple), we believe," Martin wrote in note to clients Tuesday. 

A $300 billion valuation would make the video-sharing platform the 15th largest company in the world by market capitalization ahead of Exxon Mobil, Bank of America, and AT&T.

Martin estimates YouTube will generate about about $30 billion in sales this  year. That prediction is based on three different forecasts for advertising revenue averaging out to $27.6 billion plus about $2 billion in subscription sales.

The three predictions for advertising revenue are based on content acquisition costs, monthly active users, and total hours viewed per day. 

The figures for those metrics came from public statements by CEO Susan Wojcicki and estimates from Alphabet's "Other Cost of Revenue" category, where Alphabet currently recognizes YouTube's cost, according to Martin's report. 

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AT&T survived round one with activist hedge fund Elliott. Now, the company has to fill a board seat and weigh spin-offs under the fund's close watch.

Mon, 10/28/2019 - 5:50pm

  • Elliott's $3.2 billion stake in AT&T has pushed the telecom giant to add two new board members and split the chairman and CEO roles for Randall Stephenson's successor. The influential hedge fund is not done, though.
  • Sources tell Business Insider that one of the new board members has not been picked yet and Stephenson's one-time successor-in-waiting, John Stankey, is auditioning for Stephenson's job, though has not been guaranteed the role. 
  • The firm is also reviewing its portfolio of companies, according to a statement on Monday, with the possibility of a sale for some of AT&T's big brands, like DirecTV.
  • Click here for more BI Prime stories.

AT&T didn't waste time reaching an agreement with Paul Singer's activist hedge fund, Elliott Management.

Just a little over seven weeks after the $38 billion fund announced its campaign with a $3.2 billion investment in AT&T, the telecom giant has acquiesced on several of the fund's demands. Chief among them is a cost-cutting plan, to be led by former cable executive Bill Morrow, the addition of two new members to the company's board, and a review of the firm's sprawling list of portfolio companies.

But the lion's share of the work still remains. One of the two new board members has not been selected, sources tell Business Insider, and Elliott is pushing for someone with a media background. And while a review of the portfolio may bring about a sale of a brand like DirecTV, nothing is guaranteed, especially if the market is uninterested in AT&T's undesired pieces. 

"There are no sacred cows," said Randall Stephenson, AT&T's CEO, on the firm's earnings call Monday morning about the firm's list of portfolio companies. 

See more: We talked to 24 people about the hedge-fund wunderkind at Elliott who wants to shake up AT&T. Here's why management should be terrified.

Sources familiar with the back-and-forth between Stephenson and the hedge fund, whose campaign was led by its head of U.S. activism, Jesse Cohn, said Stephenson was open to the hedge fund's suggestions despite some initial skepticism of Elliott. 

Stephenson agreed that his successor as CEO would not hold the chairman role as well, like he currently does, for example, and has opened up the search for his successor beyond his hand-picked candidate, president and chief operating officer John Stankey, who will be removed as the CEO of WarnerMedia once a replacement is found. Elliott is pushing for an executive with more media experience to fill that WarnerMedia role. 

Despite Stephenson's acceptance of many of Elliott's proposals, AT&T still has to execute. A review of portfolio companies does not necessarily mean a sale of certain brands, though it is expected to from Elliott's side.

"There's a lot of low-hanging fruit here, like it's almost touching the ground," one person close with Elliott said.

AT&T already sold its Puerto Rico operation to Liberty Latin America for nearly $2 billion earlier this month.

While one new board member is already agreed upon by AT&T and Elliott — and will join the board later this week — the second new member is still unknown. The hedge fund is pushing for someone with media experience, which it identified as a weak spot given the job now involves overseeing operations like HBO. 

The second new board member will start at the firm in 2020, though the company could look drastically different by then, depending on what happens over the next two months.

"There's going to be a lot more announcements, a lot more markers, coming out in the next few months," the person close to Elliott said.

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Entrepreneur Chris Cunningham has recruited media and tech names like Complex’s Rich Antoniello and Beeswax’s Ari Paparo to raise $10 million to invest in startups

Mon, 10/28/2019 - 4:36pm

  • Marketing entrepreneur and veteran Chris Cunningham is starting a private investment fund called C2V Capital Partners with 25 media and technology investors including Complex's Rich Antoniello, Beeswax's Ari Paparo, and OpenSlate's Brian Quinn.
  • The fund is an extension of C2 Ventures, Cunningham's 5-year-old angel investment firm that uses his experience to help startups.
  • The fund has invested in four startups so far and plans to invest in two more this year. The average investment runs from $150,000 to $250,000.
  • Click here for more BI Prime stories.

Technology and marketing entrepreneur and investor Chris Cunningham has recruited a group of media and tech executives to help startups get off the ground.

Cunningham cofounded mobile advertising firm Appssavvy before holding senior roles at location data firm Unacast and mobile advertising company ironSource.

Five years ago, he started C2 Ventures to angel invest in startups like Arbor and credit card company Petal at the pre-seed and seed rounds, using his own startup background to help new companies. Now, he's applying that model more broadly, raising $10 million for a new fund backed by media and tech veterans who will also advise founders.

The new fund, named C2V Capital Partners, has raised more than $5 million and seeks to raise $10 million by the end of the year, said Cunningham. Its 25 investors include senior execs and founders from marketing, media and technology companies:

  • Rich Antoniello, Complex founder and CEO
  • Bill Wise, CEO of Mediaocean
  • Ramsey McGrory, chief revenue officer of Mediaocean
  • Ari Paparo, CEO of Beeswax
  • Brian Adams, VP of engineering at Spotify
  • Adam Caplan, cofounder of ARM Insight
  • Brian Quinn, president of OpenSlate
  • Jason Kelly, CEO of Kambr
  • Pete Davies, chief revenue officer of Darkstore
  • Chris Feo, SVP of global sales and partnerships at Tapad
  • Geoff Hamm, cofounder of TILT Holdings 
  • David Yaffe, former cofounder and CEO of Arbor
  • Kurt Abrahamson, former CEO of ShareThis
  • Haroon Mokhtarzada, CEO of TrueBill and former CEO of

Matt Olivo will help run the fund as partner, chief financial officer and chief operating officer.

Cunningham wants to invest in non-adtech companies

C2V Capital Partners plans to make eight or nine investments per year, with an average investment of $150,000 to $250,000, Cunningham said. Half of the fund will go towards early rounds of funding at startups with the other half set aside for follow-up rounds.

Cunningham said that he considers the fund to be a generalist firm but is particularly interested in martech, direct to consumer, wellness and travel companies. Despite his background in adtech, Cunningham said he's not interested in advertising-based startups because they often lack recurring revenue.

"I see an adtech company relying on an agency holding company to support their revenue targets," he said. "A SaaS business gets repeatable, reoccurring revenue from other publishers and media companies — the revenue is sticky."

C2V Capital Partners has invested in four companies:

  • Kambr: Sells airline companies revenue-management software 
  • Beam: A direct-to-consumer cannabinoid brand
  • Boostr: Software that helps publishers' sales teams manage ad space
  • Magellan: Analyzes and measures ads in podcasts.

Cunningham said the fund plans to invest in two other companies this year, which he wouldn't name. One makes software to change the construction business, and the other helps automobiles solve for clean-technology issues.

The LPs will also advise the startups and create marketing material and host events for startups, similar to the work that Cunningham has done for his own investments like Narrative, a data startup he created a video series for.

Complex's Antoniello said a lot of investment firms talk about doing more than raise money for companies, but Cunningham has a track record to back up his approach.

"There's a lot of people out there talking about how they're going to bring a very talented roster of people with different perspectives and help you through downturns, thought process or connections. There are very few who actually do that," Antoniello said.

Cunningham is banking on his network to scale his investments

Patrick O'Leary, founder and CEO of boostr, said that Cunningham's experience working at startups sets him apart from traditional tech investors like Silicon Valley's Sand Hill Road.

"It can be a pretty demoralizing process for founders to raise money," he said. "Chris was a breath of fresh air."

Beam cofounder Matt Lombardi said he cold-emailed Cunningham about a previous company and kept in touch with Cunningham when launching Beam, leading C2V Capital Partners to invest in the brand's recent $5 million seed round. This month, Beam opened a pop-up shop in New York that Cunningham stopped by.

"I liked his experience as an entrepreneur and taking that knowledge to help other companies," Lombardi said. "Chris is such a force of energy and positivity mixed with strategic thinking — he has a very good network of people."

SEE ALSO: 'It's a contrarian take': A prominent ad-tech veteran is pumping money into advertising and marketing companies — even as the industry faces doom and gloom

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Major hospitality chains are buying up independent boutique hotels, and it's creating a new challenge that's at odds with the main reason people travel in the first place

Mon, 10/28/2019 - 4:35pm

  • Independently run hotels are on the decline, Julie Weed wrote for the New York Times.
  • Boutique hotels are joining or becoming affiliates of large hotel chains to benefit from bigger marketing and operational budgets, Weed reported.
  • Marriott International, Accor and IHG are among the major hospitality chains purchasing collections of boutique hotels and assembling what are known as "soft brands," according to Weed.
  • Boutique hotels acquired by hotel chains now face a new challenge: how to meet travelers' desire for memorable stays while also fitting into the broader brand portfolio.
  • Visit Business Insider's homepage for more stories.

Boutique hotels are disappearing.

That, as Julie Weed reported for the New York Times, is because they're being snapped up by large hotel chains such as Accor, IGH and Marriott International. According to hotel data company STR, less than 40% of US hotels are independently owned and operated today. That's down from 60% of hotels three decades ago, Weed wrote. 

One reason for this trend is that operating independently is often more expensive for hotels than operating as part of chain — especially when it comes to partnering with online booking agencies such as Expedia, according to Weed. "Hotels generally pay a 15 to 30 percent commission when a traveler uses the online booking agency to reserve a room," she wrote. "But larger companies like Marriott use their market power to negotiate lower booking rates."

What do modern travelers want?

For hotel chains, the draw of acquiring boutique hotels includes gaining access to a new set of customers.

Ting Phonsanam, cofounder of Momentum Hospitality Management, which helps independent hotels develop their brands, told Weed that hotel chains are expanding their collections of boutique hotels to cater to travelers looking for "unique, boutique or historic" accommodations. 

Hotelier Ian Schrager, whose brands include EDITION and PUBLIC, affirmed this demand for one-of-a-kind hotel stays in conversation with Business Insider's Katie Warren earlier this year. Luxury in hospitality is "not about wearing a big brand on your sweater," he told Warren. "It's really about being involved in a unique experience and one that makes you feel really good about yourself and really comfortable." 

Sense of place is also important to today's travelers.

In September, Warren spent three days in Lexington, Kentucky, at a thoroughbred sale. While there, she visited one of the only four-star hotels in the area, a palace on the side of the highway, and found that, while her stay was comfortable, it ultimately lacked a sense of place. "I was put off by the fact that the hotel didn't feel particularly tied to its Kentucky location," she wrote, adding: "I felt more like I was at Disneyland than at a luxury hotel in Kentucky."

Maintaining identity while becoming part of a larger network 

The new challenge that boutique hotels acquired by larger brands face is how to continue delivering one-of-a-kind, memorable experiences⁠. To do so, these hotels are employing a range of strategies.

Kimpton Hotels, a network of 65 boutique hotels acquired by IHG in 2014, asks guests who qualify for their Inner Circle benefit to provide food and newspaper preferences before arrival. Hotel staff use these details to deliver customized welcome packages, Lina Batarags previously reported for Business Insider.

HotelTonight, an online service that allows travelers to book hotels at the last minute at discounted rates, also pays attention to details. Founder Sam Shank told Batarags that "the best boutique hotels are appealing to people's nostalgia." Shank explained further: "Things like cookies and milk offered before bed, the pillow fight kit one hotel sells, games in the lobby. Hotels need to have things that are memorable and different."

Incorporating local, regional goods into hotel stores is another trend employed by boutique brands, Samantha Shankman recently reported for Skift.

"In the lean toward local, luxury and lifestyle hotels are adding small retail spaces that serve as a tasting menu of regional designers and products," she wrote. "The strategy allows guests to sample the local zeitgeist and take a piece of it home with them."

Similarly, SLS Beverly Hills general manager Christophe Thomas recently told Business Insider's Taylor Borden that incorporating local produce into its restaurant helps tie the global hotel brand to the region. 

These initiatives appear to be paying off, hotel real-estate investor Stephan Chan told Weed. Chan, who helps organize the Independent Lodging Congress, has gathered from attendees that the distinctions between hotel chains and independent hotels are blurring. To travelers, chain-affiliated boutique hotels now appear "boutique enough," he said. 

SEE ALSO: A network of 28 tiny, one-bed hotels in Amsterdam is being called the most beautifully designed hotel of 2019 — and it consists of a series of converted bridge houses. Take a look inside.

NOW READ: The manager of a swanky Beverly Hills hotel that travelers recently rated the best hotel in the world says design is not enough to set a hotel apart in 2019

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Boeing CEO Dennis Muilenburg will admit to 'mistakes' when he faces Congress over the grounded 737 Max plane. Read his full opening statement (BA)

Mon, 10/28/2019 - 4:17pm

  • Boeing CEO Dennis Muilenburg will testify in front of the House and Senate this week over the company's 737 Max, which has been grounded since March, following the second of two fatal crashes attributed to an automated system on the plane, MCAS.
  • In his prepared opening statement before Tuesday's Senate committee — which Boeing released on Monday following reporting by Reuters — Muilenburg expresses sympathy for families of victims of the "accidents," admits to "mistakes" and getting "some things wrong," and details Boeing's efforts to fix the plane in order to prevent future crashes once it begins flying again.
  • Boeing has faced criticism for prioritizing profit-oriented deadlines and sales over safety in designing the plane, and the FAA has been criticized for its lax oversight of the plane maker.
  • Visit Business Insider's homepage for more stories.
Read Boeing CEO Dennis Muilburg's opening statement to Congress about the 737 Max below:

Chairman Wicker, Ranking Member Cantwell, members of the Committee: good morning and thank you for inviting me to be here today.

I'd like to begin by expressing my deepest sympathies to the families and loved ones of those who were lost in the Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents, including those who are here in the room today. I wanted to let you know, on behalf of myself and all of the men and women of Boeing, how deeply sorry I am. As we observe today the solemn anniversary of the loss of Lion Air Flight 610, please know that we carry the memory of these accidents, and of your loved ones, with us every day. They will never be forgotten, and these tragedies will continue to drive us to do everything we can to make our airplanes and our industry safer.

Mr. Chairman, I know that you and your colleagues have many questions about the 737 Max. My colleague John Hamilton, Chief Engineer for Boeing Commercial Airplanes, and I will do our best today to answer them. While the Ethiopian Airlines accident is still under investigation by authorities in Ethiopia, we know that both accidents involved the repeated activation of a flight control software function called MCAS, which responded to erroneous signals from a sensor that measures the airplane's angle of attack.

Based on that information, we have developed robust software improvements that will, among other things, ensure MCAS cannot be activated based on signals from a single sensor, and cannot be activated repeatedly. We are also making additional changes to the 737 Max's flight control software to eliminate the possibility of even extremely unlikely risks that are unrelated to the accidents.

We have brought the very best of Boeing to this effort. We've dedicated all resources necessary to ensure that the improvements to the 737 Max are comprehensive and thoroughly tested. That includes spending over 100,000 engineering and test hours on their development. We've also flown more than 814 test flights with the updated software and conducted numerous simulator sessions with 545 participants from 99 customers and 41 global regulators. This process has taken longer than we originally expected, but we're committed to getting it right, and return-to-service timing is completely dependent on answering each and every question from the FAA.

I have flown on two of the demonstration flights myself and seen first-hand the expertise and professionalism of our teams. Mr. Chairman, I could not be more confident in our solutions—and I could not be more grateful to the men and women who have worked so hard to develop and test these improvements always with safety at the forefront. When the 737 Max returns to service, it will be one of the safest airplanes ever to fly.

During this process we have been working closely with the FAA and other regulators. We've provided documentation, had them fly the simulators, and helped them understand our logic and the design for the new software. All of their questions are being answered. Regulators around the world should approve the return of the Max to the skies only after they have applied the most rigorous scrutiny, and are completely satisfied as to the plane's safety. The flying public deserves nothing less.

We know that it's not just regulators that need to be convinced. We know the grounding of the Max is hurting our airline customers, their pilots and flight attendants, and most importantly, the people who fly on our airplanes. Our airline customers and their pilots have told us they don't believe we communicated enough about MCAS—and we've heard them. So we have partnered with customers and pilots from around the world as we've developed our solutions. We have welcomed and encouraged their questions and given them opportunities to test those solutions firsthand in simulators. And subject to regulatory approval, additional and enhanced training and educational materials will be available for pilots who fly the Max.

We have learned and are still learning from these accidents, Mr. Chairman. We know we made mistakes and got some things wrong. We own that, and we are fixing them. We have developed improvements to the 737 Max to ensure that accidents like these never happen again. We also are learning deeper lessons that will result in improvements in the design of future airplanes. As painful as it can be, the process of learning from failure, and even from tragedies like these, has been essential to the advances in airplane safety since the industry began roughly a century ago. And it is one of the reasons that travel on a large commercial airplane is the safest form of transportation in human history.

Mr. Chairman, this is something we must not lose sight of. Today and every day, over 5 million people will board a Boeing airplane and fly safely to their destination. Whether it's their first flight or their millionth mile, we want it to be a great experience—and most importantly, a safe one. Decades of work and innovation throughout the industry, as well as the oversight of the FAA, this Committee, and regulators around the world have reduced the risks of air travel by more than 95 percent over the last twenty years. But no number, other than zero accidents, is ever acceptable.

For 103 years, Boeing has been dedicated to making the world a safer and better place. Our founder, Bill Boeing, established our first safety council in 1917, the first full year of the company's existence, beginning a commitment to safety that we have carried forward as a core value ever since. The engineers who design our airplanes, the machinists who work in our factories, and the many others who contribute to the extraordinarily complex work of building and maintaining commercial airplanes do so with pride and honor. Ensuring safe and reliable travel is core to who we are. Our customers and the traveling public, including our own families, friends, and loved ones, depend on us to keep them safe. That's our promise and our purpose.

But we also know we can and must do better. We have been challenged and changed by these accidents, and we are improving as a company because of them. We established a permanent aerospace safety committee of our Board of Directors; stood up a new Product and Services Safety organization that will review all aspects of product safety and provide streamlined reporting and elevation of safety concerns; and strengthened our Engineering organization by having all engineers in the company report up through Boeing's chief engineer. We also are investing in advanced research and development in new safety technologies and are exploring ways to strengthen not just the safety of our company but our industry as a whole. We have a shared bond of safety across the entire aerospace community.

We recognize it is not just our airplanes and our company that needs to be supported and strengthened. We also must help rebuild the communities and families affected by these accidents. Our first step was our pledge of $100 million to them. We hired Ken Feinberg and Camille Biros, renowned experts in this area, to ensure families can access this money as quickly as possible. Of course, no amount of money can bring back what has been lost. But we can at least help families meet their financial needs. Our people also have donated more than $750,000 of their own money to these funds—a tremendous example of the giving spirit our teams consistently display in the communities where they live and work across the globe.

Mr. Chairman, I've worked at Boeing my entire career. It started more than 30 years ago when Boeing offered me a job as a summer intern in Seattle. I was a junior at Iowa State University studying engineering, having grown up on our family farm in Iowa. It's beautiful land with rolling hills where my siblings and I milked cows and baled hay. Our parents taught us the value of hard work, integrity, and respect for others. Back then, I drove my 1982 Monte Carlo from Iowa to Boeing's operations in Seattle, crossing the Rocky Mountains for the first time. I was awestruck at the opportunities I had to work on projects that mattered at the company that brought the Jet Age to the world and helped land a person on the moon. I was amazed by the people of Boeing. Today, I'm still inspired every day by what Boeing does and by the remarkable men and women who are committed to continuing its legacy.

These heartbreaking accidents—and the memories of the 346 lives lost—are now part of that legacy as well. It's our solemn duty to learn from them and change our company for the better. I can assure you that we have learned from this and will continue learning. We have changed from this and will continue changing. The importance of our work demands it.

In the months since the accidents, there has been much criticism of Boeing and its culture. We understand and deserve this scrutiny. But I also know the people of Boeing, the passion we have for our mission, and what we stand for. There are over 150,000 dedicated men and women working for Boeing around the world—and their commitment to our values, including safety, quality, and integrity, is unparalleled and resolute. No matter what, we will stay true to those values because we know our work demands the utmost excellence.

Over the last few months, I've had the opportunity to visit many of our Boeing teams, talk about our safety culture, and gain ideas for how we can be better still. Last week, I saw our team in San Antonio—made up of 40 percent veterans—beaming with pride as they support the C-17 fleet for our men and women in uniform. Earlier, I talked with our people in Philadelphia building Chinook helicopters; in St. Louis testing F/A-18 Super Hornets; and in Charleston, South Carolina, and El Segundo, California, connecting the world with the 787 Dreamliner and advanced satellites. I've also met with our people in Huntsville, Alabama, and New Orleans, Louisiana, who are building the rocket that will return humans to the moon and then travel on to Mars and those at Kennedy Space Center, Florida, who are preparing to launch the CST-100 Starliner that will commercialize space travel. I've spent time also with our teams in Everett, Washington, who are testing the new 777X long-range jet and in Renton, Washington, where 12,000 amazing people pour their hearts into building the 737 Max. These are the people of Boeing. I wish you could all meet them. They change the world. They are Boeing.

I'm here today, honored to serve as the leader of this incredible team—talented engineers, machinists and all those who design, build and support our products. I want to answer all of your questions and convey to the world that we are doing everything in our power to make our airplanes and our industry safer and prevent an accident like this from ever happening again.

And, Mr. Chairman, you have my personal commitment that I will do everything I can to make sure we live up to that promise.

Thank you for listening, and I look forward to your questions.

SEE ALSO: Boeing's CEO is about to face Congress in an inquiry on the 737 Max. Here's the complete history of the plane that's been grounded since 2 crashes killed 346 people 5 months apart.

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28% of millennials only paid off their student loans thanks to help from friends and family

Mon, 10/28/2019 - 4:16pm

To pay off student-loan debt, some millennials are turning to outside help.

About 20% of millennial respondents to a recent survey from Insider and Morning Consult said they've successfully paid off a student loan. Of those respondents, 28% said they've paid off debt with financial help from friends and family.

The survey polled 2,096 Americans about their financial health, debt, and earnings for a new series, "The State of Our Money." More than 670 respondents were millennials, defined as ages 23 to 38 in 2019.

They were more likely than other generations in general to say they've received help from family in paying off debt. Given that this survey is self-reported, it's possible that millennials were being more truthful than their elders. However, it's also possible that millennials have needed (and gotten) more help with their massive loan burdens.

These findings underscore millennials' now-familiar financial picture. 

As of 2019, student-loan debt is at an all-time high with a national total of $1.5 trillion. According to Student Loan Hero, the average student-loan debt per graduating student in 2018 who took out loans was a whopping $29,800.

The weight of this debt is hindering millennials' ability to save. More than half of indebted millennial respondents in a previous Insider and Morning Consult survey said attending college wasn't worth the student loans. 

It's not surprising, then, that many would take financial assistance from others to get that burden off their plates — especially when they're already used to doing so for other expenses. More than half of Americans (53%) aged 21 to 37 have received financial assistance from a parent, guardian, or family member since turning 21, according to the 2018 Country Financial Security Index

Paying off student-loan debt is the most significant life milestone millennials think they can achieve, according to a survey by personal finance company SoFi. Thirty-five percent of millennials said so — more than percentage of respondents who thought traditional milestones like buying a home or starting a family were the most important.

SEE ALSO: Millennials are swamped in debt, and it's not just student loans

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Boeing's CEO is about to testify before Congress about the 737 Max crashes — here's what to expect (BA)

Mon, 10/28/2019 - 4:08pm

  • Boeing CEO Dennis Muilenburg will testify in front of House and Senate committees on Tuesday and Wednesday.
  • It will be his first public testimony since two 737 Max crashes killed 346 people. The crashes were caused by a faulty automated system, MCAS, that Boeing installed on the planes.
  • Lawmakers are expected to press Muilenburg and John Hamilton, chief engineer of Boeing's commercial airplane division, about MCAS, and how the plane was initially certified as safe to fly.
  • Visit Business Insider's homepage for more stories.

Boeing CEO Dennis Muilenburg is set to testify in front of Congress this week, exactly one year after the first crash involving the company's newest plane, the 737 Max.

Muilenburg's appearances on Tuesday and Wednesday — first before the Senate Commerce Committee, followed by the House Transportation committee — will be his first public testimony since each of the two jets crashed in October 2018 and in March. Each flight crashed within minutes of taking off. A combined 346 people were killed.

Lawmakers are expected to pepper Muilenburg with questions about Boeing's design and certification of the jet, particularly an automated system, MCAS, that has been faulted for both crashes.

"There's going to be quite a bit of anger expressed at him," Rep. Rick Larsen, a Democrat from Washington, whose district includes numerous Boeing employees, said to The Wall Street Journal. "It's going to be a long day—probably longer for Boeing than it will be for the committee."

On Tuesday  — the anniversary of the first crash, Lion Air flight 610 in Indonesia — Muilenburg and John Hamilton, the chief engineer in Boeing's commercial airplane division, will testify at a Senate hearing titled "Aviation Safety and the Future of Boeing's 737 Max." Later in the day, representatives from the National Transportation Safety Board and the Joint Authorities Technical Review — an international panel which investigated the FAA's actions to certify the 737 Max — will also testify.

On Wednesday, Muilenburg and Hamilton will appear at a House Committee on Transportation and Infrastructure hearing: "The Boeing 737 MAX: Examining the Design, Development, and Marketing of the Aircraft."

About 20 family members of victims from the second crash — Ethiopian Airlines Flight 302 — are expected to be in attendance. A representative for Clifford Law Offices, which is representing the families, said there are plans for them to meet with Muilenburg on Wednesday.

The hearings come as Boeing has faced increasing criticism for its design and process of certifying the jet. The FAA has also been criticized for lax oversight of the planemaker.

Recent developments, including the release of internal messages suggesting Boeing may have known about issues with the automated system, as well as renewed scrutiny of a 2018 law granting plane makers more independence from the FAA when certifying new planes, are likely to be raised. 

In his opening statement for Tuesday's testimony — released Monday afternoon by Boeing following reporting by Reuters — Muilenburg will acknowledge the automated system's roles in the crashes, and describe efforts to prevent future accidents when the plane is eventually recertified.

"We have developed robust software improvements that will, among other things, ensure MCAS cannot be activated based on signals from a single sensor, and cannot be activated repeatedly," the written testimony says. "We are also making additional changes to the 737 MAX's flight control software to eliminate the possibility of even extremely unlikely risks that are unrelated to the accidents."

You can read the full testimony below.

The 737 Max has been grounded since March, following the second of two fatal crashes in five months.

Preliminary reports about the two crashes, Lion Air Flight 610 and Ethiopian Airlines Flight 302, indicated that the MCAS — the Maneuvering Characteristics Augmentation System — erroneously engaged and forced the planes' noses to point down because of a problem with the design of the system's software. Pilots were unable to regain control of the aircraft.

The system could be activated by a single sensor reading — in both crashes, the sensors are thought to have failed, sending erroneous data to the flight computer and, without a redundant check in place, triggering the automated system.

MCAS was designed to compensate for the 737 Max having larger engines than previous 737 generations. The larger engines could cause the plane's nose to tip upward, leading to a stall — in that situation, MCAS could automatically point the nose down to negate the effect of the engine size.

Boeing is aiming to submit a proposed fix to the FAA and get the plane certified to fly again by the end of 2019. US airlines have pulled the jet from their schedules until at least January.

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SEE ALSO: Boeing's CEO is about to face Congress in an inquiry on the 737 Max. Here's the complete history of the plane that's been grounded since 2 crashes killed 346 people 5 months apart.

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Most people think paying $450 a year for a hotel credit card is insane — here's why I signed up for the Hilton Aspire anyway

Mon, 10/28/2019 - 3:59pm

When it comes to travel rewards cards, there are certain principles I stick by. For example, I believe you should only pursue cash back or travel rewards if you are free of consumer debt and able to pay your bill in full each month. With the average credit card interest rate now over 17%, it would be foolish to carry a balance while pursuing rewards, right?

I also think it's important to stick with rewards cards with a reasonable acquisition cost. For example, I only believe in paying an annual fee for a rewards card if I am getting outsized value and earning a lot more than I pay in.

That's why I felt strange signing up for the Hilton Honors Aspire Card from American Express. It's a hotel credit card with a $450 annual fee for goodness' sake!

In any normal situation, I would avoid this card like the plague and tell everyone else to do the same. But, this card offers so much value that both myself and my husband signed up for our own.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back. 

Hilton Aspire card details

Annual fee: $450

Welcome bonus: 150,000 points after you spend $4,000 in the first three months

Points earning: 14x points with Hilton; 7x points on flights booked directly with airlines or amextravel, on card rentals booked directly with select car rental companies, and at US restaurants; 3x points on everything else 

Foreign transaction fee: None

Hilton Aspire credit card: Where it shines

At the end of the day, $450 per year is a lot of money. The only other rewards card I happily pay such a high fee for is the Chase Sapphire Reserve, but that's only because it offers a $300 travel credit, 3x points on dining and travel, and other important travel perks.

So, why did I shell out another $450 for the Hilton Aspire? The answer is simple: You get a lot more than $450 in value in return.

When I applied, the welcome bonus was 125,000 points after you use your card for $4,000 in purchases within three months of account opening. However, the current offer is for 150,000 points (after you use the card for $4,000 in purchases within the first three months); that makes this card an even better deal right now. In addition to the welcome bonus, you also earn 14x points on Hilton hotel bookings, 7x points on flights booked directly or through, car rentals, and US restaurants, and 3x points on all other purchases.

But the real value is in the perks. Applying for this card gets you a free weekend night award at any Hilton property worldwide the first year and each year you renew the card. You also receive a $250 annual resort credit good for Hilton resorts, a $250 annual airline incidental credit, automatic Hilton Diamond status, and a Priority Pass Select airport lounge membership that lets you visit over 1,200 airport lounges worldwide for free. You can also get a $100 on-property credit any time you stay for two nights or more and book through

Why we applied for the Hilton Aspire

While the benefits sound generous and useful, it's hard to know what they're worth unless you use them. Here's how I justified the expense and how I am measuring the value I get in return this first year:

My husband and I each used our free night awards and resort credits for stays in Sedona and Phoenix.

For my family's fall break, we planned to head to Arizona and the Grand Canyon for a week before departing for Gulf Shores, Alabama. We opted to use our free night awards for a free night at the Hilton Sedona Bell Rock and the Point Hilton Tapatio Cliffs Resort. Since each resort was charging approximately $250 per night over our dates, we received $500 in value right away.

We will also use our $250 resort credits toward our room bill for the additional nights we stay at each property. That's another $500 in value.

Total value so far: $1,000 toward Hilton stays in Sedona and Phoenix

We used the airline credits

Since my husband and I travel up to 16 weeks per year, I knew it wouldn't be difficult to use the $250 airline credits we received for incidentals. The credits are for checked baggage, in-flight refreshments, and flight change fees. You used to be able to use them toward gift cards with select airlines, but unfortunately that's no longer an option.

Total value so far: With $500 in airline credits safely used, that brings our total value for two cards up to $1,500.

We cashed in some of our points

While we earned 250,000 Hilton Honors points in welcome bonuses for the two Hilton Aspire cards we applied for, we also earned some Hilton Honors points through additional spending and by referring friends to get their own cards. At the end of the day, we racked up a total of 600,000 Hilton Honors points through various means.

We haven't spent them all yet, but we did cash in 240,000 Hilton Honors points for five nights at the Hilton Clearwater Best Resort & Spa in Florida. The nightly rate was 60,000 points but Hilton Honors offers a fifth night free for certain reservations made with points.

Since our reservation falls over New Year's, the nightly rate isn't very cheap at this property. If we had paid for these five nights, they would set us back $2,207.74 including tax. And remember, we also have automatic Hilton Diamond status so we will likely be eligible for a room upgrade and some sort of breakfast benefit.

Total value: With our point redemptions taken into account, our first-year value for our two Hilton Aspire cards was at least $3,700.

The bottom line

Paying $900 in annual fees to receive $3,700 in travel the first year was an absolute no-brainer for us. And really, that's a very conservative estimate anyway. We'll receive Hilton Diamond benefits several times this year and next for stays in Arizona, Dubrovnik, and Washington DC for a conference we plan to attend.

We also have another chunk of points to redeem, which will add even more value to the pile. A lot of people would also assign some value to the Priority Pass Select membership we each received with our cards, but I don't count that since we already have the same perk with our Chase Sapphire Reserve cards.

If you're someone who is averse to annual fees, I don't blame you. But sometimes, running the numbers can show you how these fees can be well worth it. Before you decide on a travel credit card, do the math to see if the fee makes sense in respect to what you receive in return. 

Click here to learn more about the Hilton Aspire Amex card.

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Here's exactly what a wealth adviser who worked in Silicon Valley told millionaires who asked how much money to leave their kids

Mon, 10/28/2019 - 3:54pm

Not all wealthy parents are keen to make their children instant millionaires

In fact, some are downright worried that handing down cash to a young adult could stymie their motivation to work, so they turn to wealth advisers for help, Joe Pinsker reported for the Atlantic

"Though it may not be a particularly sympathetic problem, coming into enormous wealth can be isolating and overwhelming, especially in early adulthood, a life stage when people forge important parts of their identity," Pinsker wrote.

About 85% of inheritances are worth $250,000 or less, the majority of which are smaller than $50,000, Pinsker reported, citing data from the Federal Reserve. Though only about 2% of inheritances from 1995 to 2016 were larger than $1 million, he reported, they accounted for about 40% of the dollars inherited.

It's estimated that $68 trillion will be passed down from boomers within the next few decades during the "Great Wealth Transfer," Business Insider's Hillary Hoffower reported. By 2030, millennials will hold five times as much wealth as they do today.

Matthew Wesley, a director in Merrill Lynch's Private Wealth Management arm and a former estate planning attorney in Silicon Valley, told Pinkser that it took him a few years to come up with a response that would satisfy his wealthy clients who were asking how much money to leave their children.

"The answer is: as much as you prepared them for. It really puts the emphasis on what should be the emphasis, which is not the amount of money, but rather the readiness of the children to receive that money," Wesley told the Atlantic.

"I think there's a common notion out there that wealthy kids inherit cash and stocks and bonds, but they don't — they inherit structures, [like] trusts and foundations and LLCs," Wesley said. "You have to know how the foundations and the structures and the LLCs work."

In a recent interview with Business Insider, Michael Farrell, managing director of SEI Private Wealth Management, said the most important step in passing down any type of wealth is discussing intention, which can start as early as college-age.

"I think the thing that people want to succeed in is transferring their values about wealth, not just transferring the wealth value," Farrell, whose typical client is worth at least $10 million, previously told Business Insider. In early conversations, the goal should be to communicate why they're passing down the money, he said.

He said a 2015 study conducted by SEI revealed that nearly a third of parents who planned to pass down money did not communicate with their children about it. Only about 15% of heirs were kept informed of the plan and about half knew the basics, he said. 

"One of the things that people have to do is they have to begin to talk with their kids about what wealth means to them. What do they want wealth to do for their family and how and when can they be a resource to each other to help establish their own values about money?" Farrell said.

He continued: "I think communication of intent is the cornerstone to a successful approach of getting your children, whether they're going to inherit a gazillion dollars or whether they're going to inherit a few dollars."

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The Uber credit card was already great for earning cash back, but now it's even better for ride-sharers, with 5% back on Uber purchases

Mon, 10/28/2019 - 3:54pm

  • The Uber credit card from Barclays has been a strong cash-back credit card ever since it launched in 2019. 
  • One "quirk" is that it's offered a higher cash-back rate on dining purchases (4% back) than on Uber spending (2% back), but that's changing now.
  • Barclays and Uber just announced some updates to the card. You'll now earn 5% back on all Uber purchases and 3% back on restaurants, bars, hotels, airfare, and vacation rentals. 
  • This means the Uber Visa is now the most rewarding cash-back card for Uber purchases. For non-Uber Eats dining purchases, other cards like the American Express® Gold Card offer higher rewards (but with an annual fee).
  • The other big change is that instead of earning cash back, the Uber card now earns Uber Cash, which you can only redeem with Uber, not for cash back or gift cards.
  • Read more personal finance coverage. 

Two years ago, Barclays and Uber launched the Uber Visa, a cash-back card offering up to 4% back on purchases, with no foreign transaction fees. They've just announced some revisions to this card to make it even more rewarding for Uber purchases, but less rewarding for spending in other categories.

Uber and Visa have also changed how your rewards can be redeemed, along with a few other tweaks. Let's take a closer look at these revisions, and see if the Uber card retains its value as a leading no-annual-fee rewards card.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back. 

The key changes to the Uber card

The card's name has been switched from the Uber Visa to the Uber card, but the biggest changes are the cash-back categories. You'll now earn 5% back on all Uber purchases including Uber rides, Uber Eats orders, and even JUMP bike and scooter rides. This is up from the previous rate of 2% back for online purchases including Uber.

On the other hand, you now earn just 3% back on restaurants, bars, hotels, vacation rentals, and airfare. And as before, you earn 1% back on all other purchases.

Another big change is that instead of earning cash back, you'll earn your rewards in the form or Uber Cash, which is a credit that you can use for Uber rides, Uber Eats orders, and JUMP bike and scooter rides.

While this change means you can no longer redeem rewards for straight cash back or gift cards, it isn't likely to be an issue for most cardholders. After all, if you have an Uber card, chances are that you're a regular user of Uber's services, and Uber Cash will be just as valuable to you as cash back.

Another minor change is the additional of a roadside dispatch service that offers pay-per-use services for a flat fee of $69.95. And the card no longer offers the $50 credit toward streaming services that it once did.

You still get a valuable mobile phone protection plan that covers you for up to $600 in lo sss for damage or theft. The card also retains its $100 sign-up bonus after new cardholders spend $500 within three months of account opening.

What should you expect if you already have an Uber card? Current cardmembers will be transitioned to the new product sometime within the first six months of 2020. You'll be notified of the changes and your transition date through email and on your statement.

How the new Uber card stacks up to its competitors

With the new rate of 5% back on Uber purchases, the Uber card offers the highest return on spending for Uber purchases among cash-back cards.

Some cardholders might be disappointed that they'll now receive 3% instead of 4% back at restaurants and bars (other than Uber Eats, which will earn 5%). However, the Uber card still offers the highest rate of return on restaurant purchases that you'll find among no-annual fee cards. The Capital One® SavorOne® Rewards Credit Card also earns 3% back on dining (and entertainment), but it doesn't offer any bonus cash back on Uber or other transit purchases.

Plus, even premium cards like the American Express Gold Card and the Citi Prestige® Card that offer 4x or 5x points at restaurants typically won't apply those bonuses to Uber Eats, so if you want to use Uber's food-delivery service, the Uber Visa offers the best return on your spending.

Other cards do offer bonuses for transit purchases, including rideshare services like Uber. For example, the Blue Cash Preferred® Card from American Express specifically includes rideshare services as a bonus category. But it only offers you 3% cash back on these purchases compared to 5% on Uber with the Uber card, and it has a $95 annual fee.

Bottom Line

These updates to the Uber card are clearly designed to appeal more to regular Uber customers, and perhaps a bit less to those who just want the card to earn cash back at restaurants. Those who use Uber Eats will earn even more rewards now thanks to the new 5% bonus category, and you'll still receive a very competitive 3% rate of return at restaurants, bars, hotels, and on airfare.

I don't imagine many existing cardholders will be rushing to close their accounts when they read this news. Instead, those who use Uber services weekly, or even daily, will now have an even better reason to consider this card.

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Forget New York — millennials are better off in these 30 US cities, where they're paid well and can afford to buy a home

Mon, 10/28/2019 - 3:52pm

  • Millennials are eschewing settling down in big cities and are turning to suburbs instead.
  • recently complied a list of the hottest zip codes in 2019 — places where residents, especially millennials, are paid well and where the housing is affordable.
  • Featured zip codes include smaller locales like Goffstown, New Hampshire, and Livonia, Michigan, along with popular hotspots like Charlotte, North Carolina, and Austin, Texas.
  • Grand Rapids, Michigan, tops the list.
  • Visit Business Insider's homepage for more stories.

As millennials age and prepare to become homeowners, they tend to settle down in suburbs rather than big cities. recently complied a list of the hottest zip codes in 2019 — places where residents, especially millennials, are paid well and where the housing is affordable.

To determine the best markets, looked at homes in over 16,000 zip codes that sell in an average of 20 days and have three times more views online than the average listing. Additionally, they narrowed the list down to places where residents are employed at higher rates and earn more money than the national median, and where millennials in particular make up a sizable share of the homeowner population.

Keep reading for a look at the 30 hottest zip codes for house-hunting millennials. Note that figures for median listing prices, percentages of new mortgages held by millennials, and millennial median household income in 2019 in all areas have been provided by

SEE ALSO: The 17 best US suburbs where you can mortgage a home for under $1,000 a month — hundreds less than the national average rent

DON'T MISS: More millennials are ditching big US cities for the suburbs, and it shows just how dire the unaffordable housing crisis is

30. Milwaukee, Wisconsin (53220)

Median listing price: $169,900

Percentage of new mortgages purchased by millennials: 48%

2019 millennial median household income: $62,911

29. Highland, Indiana (46322)

Median listing price: $189,900

Percentage of new mortgages purchased by millennials: 36%

2019 millennial median household income: $70,594

28. Midland, Texas (79707)

Median listing price: $420,000

Percentage of new mortgages purchased by millennials: 48%

2019 millennial median household income: $74,633

27. Austin, Texas (78750)

Median listing price: $452,000

Percentage of new mortgages purchased by millennials: 44%

2019 millennial median household income: $83,052

26. Buffalo, New York (14227)

Median listing price: $154,900

Percentage of new mortgages purchased by millennials: 43%

2019 millennial median household income: $67,431

25. Louisville, Kentucky (40242)

Median listing price: $260,000

Percentage of new mortgages purchased by millennials: 38%

2019 millennial median household income: $63,040

24. Wichita, Kansas (67212)

Median listing price: $165,450

Percentage of new mortgages purchased by millennials: 38%

2019 millennial median household income: $56,462

23. Minneapolis, Minnesota (55428)

Median listing price: $244,500

Percentage of new mortgages purchased by millennials: 45%

2019 millennial median household income: $61,262

22. Charlotte, North Carolina (28212)

Median listing price: $188,250

Percentage of new mortgages purchased by millennials: 40%

2019 millennial median household income: $35,551

21. Montclair, New Jersey (07043)

Median listing price: $749,500

Percentage of new mortgages purchased by millennials: 30%

2019 millennial median household income: $156,250

20. Tracy, California (95376)

Median listing price: $455,000

Percentage of new mortgages purchased by millennials: 26%

2019 millennial median household income: $73,930

19. Leominster, Massachusetts (01453)

Median listing price: $279,890

Percentage of new mortgages purchased by millennials: 39%

2019 millennial median household income: $61,677

18. Memphis, Tennessee (38134)

Median listing price: $149,900

Percentage of new mortgages purchased by millennials: 32%

2019 millennial median household income: $42,064

17. Folsom, California (95630)

Median listing price: $599,000

Percentage of new mortgages purchased by millennials: 32%

2019 millennial median household income: $113,061

16. Castro Valley, California (94546)

Median listing price: $818,940

Millennial home ownership rate: 35%

2018 millennial median household income: $95,130

15. Columbus, Ohio (43230)

Median listing price: $224,900

Percentage of new mortgages purchased by millennials: 39%

2019 millennial median household income: $80,915

14. Mansfield, Massachusetts (02048)

Median listing price: $429,900

Percentage of new mortgages purchased by millennials: 33%

2019 millennial median household income: $113,247

13. Spokane, Washington (99205)

Median listing price: $209,900

Percentage of new mortgages purchased by millennials: 33%

2019 millennial median household income: $57,579

12. Fairless Hills, Pennsylvania (19030)

Median listing price: $280,000

Percentage of new mortgages purchased by millennials: 32%

2019 millennial median household income: $71,591

11. Fort Wayne, Indiana (46804)

Median listing price: $199,900

Percentage of new mortgages purchased by millennials: 38%

2019 millennial median household income: $65,228

10. Colorado Springs, Colorado (80916)

Median listing price: $245,050

Percentage of new mortgages purchased by millennials: 34%

2019 millennial median household income: $47,819

9. Goffstown, New Hampshire (03045)

Median listing price: $325,050

Percentage of new mortgages purchased by millennials: 43%

2018 millennial median household income: $105,449

8. Arlington, Texas (76018)

Median listing price: $215,050

Percentage of new mortgages purchased by millennials: 34%

2019 millennial median household income: $64,023

7. Melrose, Massachusetts (02176)

Median listing price: $629,050

Percentage of new mortgages purchased by millennials: 43%

2019 millennial median household income: $98,803

6. Livonia, Michigan (48154)

Median listing price: $254,950

Percentage of new mortgages purchased by millennials: 36%

2019 millennial median household income: $96,855

5. Rochester, New York (14609)

Median listing price: $125,050

Percentage of new mortgages purchased by millennials: 43%

2019 millennial median household income: $44,438

4. Shawnee, Kansas (66203)

Median listing price: $220,050

Percentage of new mortgages purchased by millennials: 43%

2019 millennial median household income: $61,582

3. Boise, Idaho (83704)

Median listing price: $289,950

Percentage of new mortgages purchased by millennials: 28%

2019 millennial median household income: $50,581

2. Omaha, Nebraska (68144)

Median listing price: $238,950

Percentage of new mortgages purchased by millennials: 43%

2019 millennial median household income: $73,902

1. Grand Rapids, Michigan (49505)

Median listing price: $178,050

Percentage of new mortgages purchased by millennials: 48%

2019 millennial median household income: $58,667

Take a look inside the gala Marc Benioff hosted for USC, where the Red Hot Chili Peppers performed, James Corden emceed, and billionaires dined with Ashton Kutcher

Mon, 10/28/2019 - 3:03pm

  • Marc Benioff hosted the fourth Rebels With A Cause Gala at The Water Garden in Santa Monica on Thursday, a representative for USC told Business Insider.
  • At the last Rebels With A Cause Gala in 2016, Benioff's friend and former boss Larry Ellison made a $200 million donation to USC; at this year's gala, he was honored for the donation.
  • The event raised over $12 million for the Lawrence J. Ellison Institute for Transformative Medicine of USC.
  • Visit Business Insider's homepage for more stories.

Marc and Lynne Benioff know how to throw a party.

The billionaire couple hosted the fourth annual Rebels With a Cause Gala on Thursday in a Santa Monica office park. The event benefited research at USC's Lawrence J. Ellison Institute for Transformative Medicine. Ellison — a close friend and former mentor of Benioff's — was there alongside Ashton Kutcher and the Red Hot Chili Peppers.

Keep reading to take a look inside the event, which is held every third year and always benefits cancer research.

SEE ALSO: A 24-year-old who has shared photos of himself partying with Rihanna and Bella Hadid just became Hong Kong's newest billionaire overnight

DON'T MISS: Jeff Bezos might lose his spot as the world's richest person as Amazon shares tank. Here's how he makes and spends his billions.

The Gala was held in the Los Angeles area in Santa Monica, California ...

... in the courtyard of an office park called The Water Garden.

A gated entrance flanked by security guards kept onlookers from wandering inside.

The glass tables were decorated with silver accessories and white flowers; the event was designed by AOO Events.

Women also walked the event wearing lampshades.

Marc and Lynne Benioff hosted.

Guests included Ashton Kutcher and USC research Dr. David Agus' children ...

... original Fab 5 member Jai Rodriguez ...

... Japanese musician Yoshiki Hayashi ...

... Barry Manilow and Lorna Luft ...

... and Canadian musician David Foster and his daughter, 90210 star Sara Foster.

The elder Foster performed at the event ...

... as did the Red Hot Chili Peppers.

James Corden was the gala's emcee.

The 350 guests were served dinner ...

... and signature cocktails called "Love" and "Hope," inspired by the cancer research the event was planned to fund.

A representative of USC told Business Insider the event's 350 guests paid between $1,000 for a single ticket and $100,000 for a table to attend.

At this year's gala, Ellison was honored for the $200 million donation he made to USC at the last Rebels With A Cause Gala in 2016. He received a standing ovation.

“[He’s] one of the most amazing people I’ve ever met," Agus said of Ellison while presenting the award. "Every day I thank him for his love for discourse to push for knowledge and truth. I thank him for allowing me to learn from him. Cancer continues to affect us all and we’re obligated to think outside of the box. With Ellison’s support and the $12.1 million raised this evening, we’re able to continue developing innovative programs at the Ellison Institute that our patients need today.”

The award itself was designed by Chopard.

Benioff and Ellison have a 30-year bromance that began when Ellison took Benioff under his wing and turned Benioff into a star executive at Oracle.

Source: Business Insider

All in all, the event raised over $12 million for the Lawrence J. Ellison Institute for Transformative Medicine of USC.

Trump's Medicare chief oversees a budget of $1 trillion. We spoke with her about what she wants to see from the private-healthcare industry.

Mon, 10/28/2019 - 3:02pm

  • The US government is the single biggest buyer of healthcare, from Medicare for the elderly to Medicaid for some people with disabilities and those with low incomes.
  • We spoke with Seema Verma, the head of the Centers for Medicare and Medicaid Services, on the sidelines of the 2019 HLTH conference in Las Vegas about how she views the role of government in the industry. 
  • Verma wants to see more competitive markets for private insurers. She also had a big warning for the healthcare industry about "Medicare for All."
  • Visit BI Prime for more stories.

From where Seema Verma, the head of the Centers for Medicare and Medicaid Services, sits, the agency she oversees has a couple big roles to play in healthcare. 

The first is to be the safety net, there to care for the country's low-income and aging Americans. That has to be carried out sustainably, she said. At the same time, Verma said her role was to foster a competitive market for private insurers. 

Already, competition is fierce in Medicare Advantage, the program within the federal Medicare program in which coverage is provided by private insurers.

The venture-backed startups Oscar Health, Devoted Health, Bright Health, and Clover Health have raised a combined $3 billion to use technology to build new kinds of health-insurance plans and go after Medicare Advantage members. Insurers like UnitedHealth, Aetna, and Humana are battling for the 22 million Americans enrolled in Medicare Advantage plans, and the thousands signing up daily as they turn 65.

The program is expected to grow from accounting for 34% of the Medicare program to 47% by 2029.

Startups like Bright and Oscar have also made a big business on the individual exchanges created as part of the Affordable Care Act, often referred to as Obamacare.

In an interview, Verma praised the success of the Medicare Advantage market, citing the addition of supplemental benefits and the ability to do virtual visits. She criticized Medicaid for its high spending, and the individual market for a lack of flexibility.

On average, the government spends about $11,500 on each Medicare Advantage beneficiary, according to the Kaiser Family Foundation. Per-person costs for Medicaid coverage varies widely but are generally somewhat lower.

As the head of CMS, Verma is responsible for Medicare, Medicaid, and the individual insurance markets, though states play a role as well. In a speech at the HLTH conference in Las Vegas, Verma noted that her agency oversees about $1 trillion in annual spending.

Verma said there was a need for more government flexibility in Medicaid and in the individual market.

"I think a lot of times we're so top-down that it doesn't encourage innovation in that space," Verma told Business Insider on the sidelines of the HLTH conference. 

Getting a more competitive Medicaid market

The Medicaid program provides coverage for some disabled and low-income people, as well as many mothers. Each state runs its own Medicaid program, and the costs are shared between the state and federal governments.

Verma criticized the rising cost of Medicaid and said action was needed to control it. She said in a speech on Sunday that the cost of providing long-term care in Medicaid is expected to grow from $68 billion in 2014 to $401 billion in 2050.

"I think Medicaid hasn't quite delivered," Verma said.

Medicaid is one of the top budget items for states, and nationally, it's the third largest domestic program in the budget after Social Security and Medicare, accounting for 9.5% of federal spending as of 2017, according to the Kaiser Family Foundation

To be sure, Medicaid has a lot of support from the public. To date, 37 states and Washington, DC, have decided to expand their Medicaid programs under the Affordable Care Act. A recent study showed that Medicaid expansion resulted in fewer deaths.

But while the Medicare Advantage program has ways of measuring how well plans are keeping people healthy, Medicaid doesn't have the same metrics in place, she said. Verma said her agency planned to put out new scoring metrics, make sure Medicaid programs are functioning as they should, and give states more flexibility with their programs.

The future of the ACA

When it comes to making the individual exchanges as successful as the Medicare Advantage market, Verma pointed to the Affordable Care Act as a barrier to getting that done.

"The law's so restrictive that it's not going to allow that," Verma said. "I think unless there's changes made to the law, our ability to, really, ensure more affordability's thwarted." 

Verma pointed to those forgoing insurance because of cost. In 2018, the uninsured rate rose to 8.5% of Americans, up from 7.9% the year prior.

To provide cheaper coverage, the administration has loosened the rules for short-term health plans, controversial health-insurance coverage that's meant to be used for a few months at a time. The plans don't necessarily have the same level of coverage as plans offered on the individual exchanges, however. 

Verma was appointed by President Donald Trump, a Republican who campaigned heavily on the promise of repealing the ACA. The health law was signed in 2010 by then-President Barack Obama, a Democrat.

The future of the ACA and the individual exchanges it created is up in the air. A federal court in New Orleans is expected to rule on the legality of the law, and the administration hasn't said which contingency plans it has ready if the ACA were to be struck down.

"We've prepared for a number of different scenarios," Verma said, echoing comments she made in a congressional hearing on Thursday. Verma declined to elaborate on the specifics of those scenarios.

"I think the president's been very clear that we want to make sure that Americans have access to affordable coverage, and so there'll be a plan in place," she said.

To her, the end of the ACA could provide a chance to fix some of the issues that still affect the individual exchanges, such as affordability for those who don't qualify for subsidized premiums. Premium subsidies are based on individual and family incomes, with those who earn less receiving more subsidies.

"I think it could be an opportunity, quite frankly, to address some of the problems in Obamacare," she said.

Verma's warning to the healthcare industry

Nationally, support has been growing for "Medicare for All," or the idea of single-payer healthcare in the US. It has been a key issue in the Democratic presidential primary race. Verma, for her part, has been critical.

Verma said the healthcare industry needed to make changes so that consumers don't feel like they need the government to be in charge of their healthcare. 

"We are where we are because people are very frustrated, and to not listen to that, I think, is derelict on the healthcare industry's part," Verma said.  

"The status quo is not working for the American people, and they're demanding change," she said. "And if we don't provide those solutions, people are calling for the government. I don't think the government can solve the problem. I think they will make it worse."

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