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New FTX CEO John Ray is making $1,300 an hour to clean up Sam Bankman-Fried's collapsed crypto empire

Wed, 12/14/2022 - 3:26pm
John Ray, the new CEO of FTX
  • New FTX CEO John Ray is making $1,300 an hour to oversee the firm's bankruptcy, according to filings.
  • The restructuring exec reportedly billed 156 hours in a two-month span in a previous bankruptcy case, raking in $120,582. 
  • Ray accused the defunct exchange of "old-fashioned embezzlement" in his congressional testimony.

FTX's new chief executive officer John Ray is making $1,300 an hour working on the bankruptcy and restructuring of the failed cryptocurrency exchange, according to court filings. 

After FTX filed for bankruptcy protection and reportedly lost $8 billion of customer money in early November, Ray replaced disgraced founder Sam Bankman-Fried as CEO. The veteran restructuring executive has helped oversee insolvencies at several large companies, including defunct energy giant Enron and telecom company Nortel.

"I've just never seen anything like it in all 40 years of doing restructuring work and corporate legal work," he said of FTX in a congressional testimony on Tuesday, accusing the exchange of "old-fashioned embezzlement."

When Ray led Enron through its restructuring process as chairman and CEO almost two decades ago, he collected roughly $1.2 million on an annualized basis. In another instance, he reportedly billed 156 hours in a two-month span during a bankruptcy case, netting $120,582 in that time, according to CNBC.

Ray slammed former FTX execs, adding that the exchange was run by "very small group of grossly inexperienced and unsophisticated individuals who failed to implement virtually any of the systems or controls necessary for a company that is entrusted with other people's money or assets."

It could take months to secure all the company's assets following its downfall, Ray said. And in terms of repaying creditors, that could take much longer. Enron's proceedings, for example, carried on for over a decade.

"We've been able to secure over $1 billion of assets to cold wallets in a secure location," Ray said. "It's an ongoing process. [It] will take weeks if not months to secure all the assets."

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The PlayStation 5 is hard to find, but stores continue to restock for the holiday shopping season — here are the latest details on where to buy a PS5

Wed, 12/14/2022 - 3:22pm

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The PlayStation 5 is still hard to find, but several stores have been adding stock on a rolling basis.

Sony's PlayStation 5 has sold more than 20 million units since November 2020, and it remains one of the video game industry's most sought after products. In the US, the standard PS5 sells for $500, while the digital edition with no disc drive costs $400. 

Though PS5 stock is still hard to come by, stores have been adding inventory regularly throughout the 2022 holiday shopping season. Specifically, PS5 bundles with God of War Ragnarok or Call of Duty Modern Warfare have often been in and out of stock at retailers like Amazon, GameStop, and Sony's own PlayStation Direct store. Walmart and Best Buy have also offered periodic restocks of the PS5.

These retailers all offer membership programs, and they often provide subscribers with direct email invitations, early access, or restock alerts to purchase PS5 consoles when they're available online. Meanwhile, GameStop is the store most likely to offer in-store pickup for PS5 consoles.

We'll keep this post updated as we get more information about PS5 restocks, but ultimately you'll need to keep checking multiple stores and get a bit lucky with timing to secure the console.

Where to buy a PS5: Stores and priceThe digital edition of the PlayStation 5 doesn't have a disc drive.

The PlayStation 5 comes in two different models — one that has a 4K Ultra HD Blu-ray drive, and a "digital edition" with no disc drive. The standard model is $500 and the digital edition is $400.

Several stores, including Walmart, Amazon, Best Buy, GameStop, Target, and Newegg, have regularly restocked PlayStation 5 consoles since launch, but they typically sell out as soon as they're available.

Walmart frequently offers the PS5 to Walmart+ members first during restocks. Walmart+ costs $13/month, and offers other perks like free shipping and discounted fuel. The service usually includes a 15-day trial, but only paying Walmart+ members get access to PS5 restocks. 

GameStop occasionally announces PS5 restocks in specific stores across major cities like New York and Dallas, but they're usually only available to PowerUp Rewards Pro members. PowerUp members also get first access to PS5 bundles online. Membership costs $15/year and comes with a $5 monthly gift certificate, as well as other benefits. 

Amazon and PlayStation Direct allow shoppers to join email waitlists for the PlayStation 5. Amazon will send a link with a 72-hour purchase window when a PS5 is available for purchase, while PlayStation Direct sends an email inviting PSN users to buy a console at a pre-set date and time.

During the 2022 holiday season, we've seen more restocks of PlayStation 5 bundles than the standalone console. The two most common PS5 packages available right now are the God of War Ragnarok bundle and the Call of Duty: Modern Warfare II bundle. God of War Ragnarok is also bundled with the PS5 Digital Edition.

Tips for buying the PS5A gamer sets up the new Sony Playstation PS5 at his home in Seoul after Sony launched the new console.

Buying the PlayStation 5 has been a struggle since release, but retailers have been making a steady stream of consoles available. If you have a preferred store, you should look into setting stock alerts with their online tools.

Retailers with membership plans — like WalmartBest BuyGameStopAmazon, and the PlayStation Direct store — sometimes offer subscribers email invitations, early restock access, or alerts to purchase PS5 consoles when available. If you're on the hunt for a PS5, you'll have a better chance snagging one from the retailer of your choice if you sign up for their membership program.

Third-party stock-tracking websites like can tell you when a store last had the PlayStation 5 in stock and let you set alerts for multiple retailers. A reseller who made more than $40,000 reselling PS5 consoles in 2020 shared more specific tips on how to find the console online.

If you encounter issues while trying to check out with an online retailer, keep trying to refresh the product page to add the console and make sure the PS5 is available and in your cart. If possible, create an account with your preferred retailer and enter your payment and shipping information in advance to help the checkout process move quickly.

PlayStation 5 specifications

The PlayStation 5 boasts much more powerful hardware than the PlayStation 4 and PS4 Pro. Upgrades include a solid state hard drive and a graphics card capable of ray-tracing technology.

For detailed impressions, check out our full PlayStation 5 review.

  • Disc drive: 4K Ultra HD Blu-ray drive (standard edition only)
  • Storage: 825GB M.2 drive
  • HDMI Out: Up to 4K resolution at 120Hz with HDMI 2.1
  • Ports: 1x USB-C, 3x USB 3.1, 1x Ethernet
  • CPU: AMD Ryzen Zen 2, 8 cores, 16 threads at 3.5 GHz
  • GPU: AMD Radeon RDNA 2 at 2.23 GHz, 10.3 TFlops
  • Memory: GDDR6 16GB, 44GB/s bandwidth
PlayStation 5 accessories

Sony's $70 DualSense controller is a worthy successor to the PS4's popular DualShock, implementing a built-in microphone, haptic feedback for adjustable trigger tension, and advanced rumble features while also improving the battery life and adopting a USB-C charging cable.

A premium version of the DualSense controller, the DualSense Edge, will launch on January 26, 2023 and preorders are available now. DualSense Edge adds customizable paddle buttons to the rear of the controller and customizable analog sticks.

The $100 Pulse 3D headset is a direct successor to the gold and platinum wireless headsets Sony released for the PS4. The headset has an adjustable band, built-in microphone, and hardware buttons for mute, voice monitoring, and volume. While the Pulse 3D headset is worth the investment, PS5's 3D audio features will also work with any third-party headset that's been licensed for use on PS4.

The PlayStation VR2 is an upcoming virtual reality headset that will play games like Resident Evil Village, No Man's Sky, and Horizon Call of the Mountain. Preorders start at $550 and it will launch on February 22, 2023.

The headset requires a PS5 to work but has built-in head tracking and comes with two wireless controllers. Based on specifications, it will offer better visuals and performance than the Meta Quest 2 headset, though it lacks the standalone functionality the Quest 2 offers.

The PlayStation media remote might look appealing, but for $30 you can find a better or cheaper universal remote to control the console. Several smart TV brands also let you control the PS5 with your standard TV remote too, so it's worth giving that a try before making this investment.

The $30 DualSense charging stand can charge two controllers and makes for a nice stand alongside the PS5, but it doesn't actually charge your controllers any faster than using a regular cable.

The $60 HD camera can be used for streaming in full 1080p and even has a background removal tool, but it cannot be used as a microphone like the PlayStation 4 camera. Luckily, you can just use the DualSense's built-in mic to communicate while playing.

PlayStation 5 exclusive games"Ratchet and Clank: Rift Apart" is Sony's latest PlayStation 5 exclusive.

Sony is committed to creating a full lineup of exclusive games for the PlayStation 5, repeating the same strategy that helped make the PS4 a massive success. Because there are still so many gamers waiting to upgrade to PS5, many of the games released on the new console will also work on PlayStation 4, like Spider-Man: Miles Morales and Horizon: Forbidden West.

Keep in mind that new games like Elden Ring have been designed to run better on PS5, even if they're available on the PS4. Below, we've listed all the games that require a PlayStation 5 to play, including upcoming titles. 

Exclusive PS5 games available nowUpcoming PS5 exclusive games
  • Final Fantasy XVI
  • Marvel's Spider-Man 2
  • Marvel's Wolverine
  • Deathverse: Let it Die
  • Valkyrie Elysium

For more PlayStation game recommendations, check out our complete roundup of exclusives that make the PS5 worth buying.

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A Patriot missile battery from the US could create new headaches for Russia in Ukraine and throw a wrench into its terror campaign

Wed, 12/14/2022 - 3:15pm
A shot of a Patriot missile battery firing an interceptor in a US Army test. The Patriot missile defense system is a ground-based interceptor able to eliminate airborne threats.
  • Ukraine is reportedly slated to receive a US-made Patriot missile defense battery.
  • The Patriot is the main air defense system that the US has in its arsenal. 
  • Its delivery will make new headaches for Russia, which continues to launch missiles and drones at Ukrainian cities.

As Russian forces continue to fire missiles and drones at Ukrainian cities, the US appears to be getting ready to ramp up security assistance in a way that would allow Kyiv to better defend itself against threats raining down from above. 

The US is poised to send Ukraine a Patriot missile defense battery that is already stationed overseas. Approval for this action — which is expected soon — requires Defense Secretary Lloyd Austin to sign off before it would then head to President Joe Biden's desk.

The MIM-104 Patriot is a highly mobile, truck-mounted surface-to-air missile system that costs about $1 billion. According to the Center for Strategic and International Studies' Missile Defense Project, it is the primary air and missile defense system that the US has in its arsenal. As the most advanced US air defense system, it can engage aircraft, ballistic missiles, cruise missiles, and even drones and loitering munitions.

A Patriot battery typically consists of eight launchers armed with four interceptor missiles and support systems like a power vehicle, a radar set, and a control station. An interceptor missile can fly up and eliminate targets at altitudes up to nearly 80,000 feet. These systems have been deployed across Europe and the Middle East.   

Patriot missile defense system at Schwesing military airport in Germany on March 17, 2022.

The system was originally designed by Raytheon in the 1960s and first introduced to the battlefield during the Gulf War in the early 1990s. It has since been used by foreign militaries like that of Israel — which deployed the system to shoot down Hamas drones and a Syrian jet — and Saudi Arabia and the United Arab Emirates, which used the system against Houthi rebels fighting in Yemen's civil war.    

CNN, citing two US officials and senior Biden administration officials, first reported on the anticipated delivery, which would bolster Ukraine's air defense amid an ongoing cycle of Russian attacks against Ukrainian cities that are intended to spread terror and fear, as well as disable critical civilian infrastructure. 

A NATO Patriot air defense missile system stands at Slovakia's Sliac air base on April 27, 2022.

For over two months, Russian forces have launched a deadly onslaught of missile and drone barrages targeting Ukrainian cities and the country's civil infrastructure — often wreaking havoc on its energy grid. The US and its allies, in response, have prioritized sending military hardware to Ukraine that will allow the country to better defend its airspace. 

Germany, for example, sent four IRIS-T SLM air defense systems, NATO announced it would send signal-jammers to counter deadly Iranian-made suicide drones, and the US delivered National Advanced Surface-to-Air Missile Systems (NASAMS), air defense systems which provide short- to medium-range protection and are used to defend Washington, DC. 

A member of the US Air Force looks on near a Patriot missile battery at the Prince Sultan air base in Al-Kharj, in central Saudi Arabia on February 20, 2020.

The delivery of a Patriot battery would arm Ukraine with its most advanced air-defense capabilities yet to use on the battlefield at a time when Russia is already struggling with a dwindling stockpile of precision-guided missiles.

US officials have said that Russia is burning through its munitions stockpiles faster than the country can replace them. A top UK envoy said last week that Moscow is trying to secure "hundreds" of ballistic missiles from Iran in exchange for "unprecedented" military support. It is unclear where those discussions stand.

Patriot missiles would provide defenses against missiles, freeing up other Ukrainian air defense assets to focus on knocking out incoming drones, specifically the explosive suicide drones Russia purchased from Iran. Ukraine's defense ministry said Wednesday that it shot down 13 of 13 inbound drones, which were identified as Shahed-136s and Shahed-131s.

The Patriot air and missile defense system "has demonstrated its ability to shoot down cruise missiles, and ballistic missiles, and loitering munitions, and I think that those are the types of roles that it would be engaged in," Jeffrey Edmonds, a Russia expert at the Center for Naval Analyses and former CIA military analyst, told Insider, adding that the Patriot "would offer capability that the Ukrainians do not have right now."

Edmonds said the systems could be used to defend Ukraine's critical infrastructure from Russian attacks, explaining that "given Russia's strategy right now of hitting critical infrastructure in order to undermine ... the Ukrainian will to resist — any system like this is going to help."

Mick Ryan, a strategist and retired Australian Defense Force major general said on social media that sending Patriot missiles to Ukraine would be "a significant and positive step in assisting #Ukraine defend itself against the Russian missile and drone attacks."

Russian officials have previously warned NATO against sending Patriots to Ukraine. Although the US is expected to provide Patriot missiles to Ukraine, neither the Pentagon nor the State Department would confirm the reported delivery at their respective press briefings on Tuesday.    

"We have been very clear that the United States will continue to prioritize sending air defense systems to Ukraine to help our Ukrainian partners defend themselves from the brutal Russian aggression that we've seen for the better part of a year now," State Department spokesperson Ned Price said.

"I don't have anything to preview or announce," he continued, "but our commitment to Ukraine's self-defense capabilities, including through the provision of air defense systems, is something we are committed to."

Ukraine has not acknowledged a pending delivery either, but Ukrainian President Volodymyr Zelenskyy said Wednesday that Ukraine is "constantly strengthening our air defense and anti-drone defense."

"We are doing everything to get more modern and more powerful systems for Ukraine," he said, adding that "this week we have made important progress on the air defense issue."

Read the original article on Business Insider

I went holiday shopping at both Kohl's and T.J. Maxx. Despite its higher prices, one department store is a very clear winner.

Wed, 12/14/2022 - 3:06pm
Danielle Bauter compared her shopping experiences at Kohl's and T.J. Maxx.
  • T.J. Maxx and Kohl's are popular department stores with great prices.
  • Danielle Bauter decided to shop at both stores in Upland, California and compare the experience.
  • Though T.J. Maxx had better prices, Bauter said shopping at Kohl's was much more enjoyable.
Where I live in Southern California, both Kohl's and T.J. Maxx are popular stores that offer savings on clothing, accessories, housewares, and holiday items.A side-by-side view of Upland's T.J. Maxx and Kohl's.Kohl's has around 1,100 nationwide stores and T.J. Maxx has nearly 1,300 stores across the US.Pedestrians walk past a T.J. Maxx store in Boston.

Source: Kohl's, T.J. Maxx

As inflation forces shoppers to spend less, Kohl's reported a 7% decrease in Q3 net sales, while T.J. Maxx and its sister companies Marshalls and Sierra saw a 3% growth.A screenshot of the third quarter earnings report from Kohl's.

Source: T.J. Maxx, Kohl's, Insider

I was curious to see how these factors would affect my shopping experience. So with my favorite shopping partner, my mom, I embarked on a retail journey at both stores.Danielle Bauter's mom shopping at Kohl's.The first store we visited was Kohl's in Upland, California, on a Monday afternoon around 2 p.m. Upland is a suburb about 40 miles east of Los Angeles.The outside of Bauter's local Kohl's in Upland, CA.Located near the entrance was a selection of toys aimed at holiday shoppers. My mom quickly made a friend.Bauter's mom posing next to a jumbo-sized fox plush at Kohl's.Kohl's also had an extraordinary selection of games and puzzles.The games and puzzle section at Kohl's.Name brands like Adidas, displayed in the sportswear section, immediately caught my eye.The Adidas display inside Kohl's.At Kohl's, almost everything was on sale, Adidas included. I appreciated how prices were clearly marked and that similar items were displayed together.Adidas clothing was marked down, along with other name brands like Nike.I was also drawn to the Levi's display, and I appreciated that the jeans were folded neatly, making it easier to find the right size.Levi's jeans stacked neatly in rows inside Kohl's.The one exception to the store's organization was the clearance sections in each department. In the shoe department, shoes were spilling onto the floor with no real semblance of order.Kohl's messy clearance shoes section.Kohl's also had a large selection of luggage, with prices marked down to 50% off for American Tourister.Luggage was marked down by at least 50%.The housewares department at Kohl's also featured name brands like Ninja and Keurig, but the discounts didn't seem that great — the Ninja coffee maker only had a $20 markdown.Ninja coffee makers were also on sale.It seemed the word "sale" was ever-present around the store, with Food Network cookware also featured.Kohl's home and kitchen items on display.But once again, the clearance section was a mess.Household items on clearance at Kohl’s.There was quite a selection of comforter sets that were marked down to 40% or 50% off.Madison Park comforter sets on sale at Kohl's.The home decor section also featured merchandise at 60% off, with some items under $10.Marked down home decor items at Kohl's.Surprisingly, I found Lands' End coats at Kohl's. I thought Lands' End clothing was only available online, so I made a mental note of this.Lands' End coats on display at Kohl's.There was also a selection of stylish purses by Simply Vera Vera Wang. The renowned designer started the collection for Kohl's in 2007. I loved how they were neatly displayed and organized.The Simply Vera Vera Wang collection is carried exclusively at Kohl's.

Source: Kohl's

At the back of the store was a whole wall of Lego merchandise, with games for all ages.Lego lovers will find many treasures at Kohl’s.Former reality TV star and lifestyle maven Lauren Conrad also has a line at Kohl's.LC Lauren Conrad clothing is available at Kohl's.The jewelry department boasted sales up to 60% off, and watches by such brands as Bulova and Seiko.The jewelry display case at Kohl's.At around 4:30 p.m., when I was done shopping at Kohl's, I went straight to the T.J. Maxx also located in Upland. T.J. Maxx was about half the size of Kohl's and much more crowded with shoppers.Danielle Bauter standing outside of her local T.J. Maxx store in Upland, CA.At Kohl's I saw about 15 people in the store, while T.J. Maxx had at least three times that many. This may have been because it was a little later in the day.The outside of Bauter's local T.J. Maxx in Upland, CA.Unlike Kohl's, The T.J. Maxx accessories department was right near the front of the store, which included a selection of handbags, scarves, hats, and neck pillows.Handbags on display at T.J. Maxx.I immediately noticed how cluttered the store was, with merchandise that seemed to be shoved into every available space.The accessories section at T.J. Maxx was cluttered and slightly overwhelming.The luggage section was perhaps the most organized in the store, even though it was right next to the accessories.The luggage was organized in neat rows at T.J. Maxx.The jewelry department also had no semblance of order, and prices were not clearly marked.Miscellaneous jewelry were grouped together at T.J. Maxx.Even though T.J. Maxx had a large selection of handbags and wallets, I just couldn't get over the clutter enough to want to browse through it.The massive selection of purses and handbags at T.J. Maxx.The bath and body display was similarly cluttered, with no separation by particular brands. Prices were marked individually and most seemed to be marked down by about 30%.T.J. Maxx has an unorganized section filled with lotions, soaps, and other body care items.The shoe section made me kind of sad. Organized by size, some pairs of shoes looked like they'd already been worn.The shoe selection at T.J. Maxx left much to be desired.Women's lingerie was confined to one long row of racks, making the quest to find your size almost like locating a needle in a haystack.Trying to find a size in the women's lingerie section at T.J. Maxx was difficult.T.J. Maxx's clearance section was a bit more organized than similar sections at Kohl's. I was actually surprised by this, given the chaos in the other sections — it made me want to browse the clearance items.Some T.J. Maxx's home decor items were on clearance and better organized than other departments.Not surprisingly, my mom was drawn to the holiday items. I'm not sure whether it was the life-size elf or the vast assortment of nutcrackers that made her so happy.Bauter's mom posing next to a holiday elf inside T.J. Maxx.I also had no idea that decorative pumpkins came in so many different sizes and colors.There was a wide selection of decorative pumpkins at T.J. Maxx.A mishmash of bedding items was also there for the taking. Unfortunately, most looked like they'd already been opened and used.Some of the T.J. Maxx bedding seemed to have already been opened or used.T.J. Maxx had a small selection of furniture, something that Kohl's lacked. I did see a couple of things that I liked there.The small furniture selection at T.J. Maxx.Overall, the T.J. Maxx displays weren't appealing to me. While it was likely organized to make the most of the available floor space, I wasn't that tempted to browse the racks.Endless racks of clothes at T.J. Maxx.Plaid shirts hung next to sweaters and silk blouses. Each item was individually tagged and you have to sort through each item to know its price, unlike Kohl's.Haphazard displays of clothes at T.J. Maxx.Men's fragrances were also on display, with brands like Calvin Klein and Tommy Bahama.Men's fragrances at T.J. Maxx.On the way to the cash register, I was met with some easy grab and go gifts, like cell phone cases, earbuds, and phone chargers.T.J. Maxx displays tech accessories like phone cases and earbuds on the way to checkout.While Kohl's had mostly 30% off sales, T.J. Maxx had sales for 20% to 60% off. Still, I preferred the less-cluttered environment at Kohl's and its clearly-marked prices.Kohl's was less cluttered and prices were clearly on display.The stores had a couple of similarities, but I'd much rather shop at a store like Kohl's that emphasizes deals without sacrificing the time spent to find them.Danielle Bauter preferred shopping at Kohl's over T.J. Maxx.Read the original article on Business Insider

Airbnb suspended almost 4,000 hosts and guests this year for violating its policy against discrimination

Wed, 12/14/2022 - 3:00pm
Airbnb CEO Brian Chesky.
  • Airbnb has suspended nearly 4,000 accounts for violating the company's non-discrimination policy.
  • Guests perceived to be Black had the lowest percentage of bookings confirmed after trying to reserve, a company report found.
  • "We will continue to innovate and design new products and initiatives that increase acceptance and combat bias," Airbnb CEO Brian Chesky said.

Thousands of Airbnb users have been suspended from the platform this year for violating the company's policy against discrimination.

Airbnb says it removed nearly 4,000 accounts worldwide in 2022 for violating its non-discrimination policy, according to a company report published Tuesday. The policy prohibits Airbnb hosts from declining bookings or imposing different conditions on guests based on factors like their race, ethnicity, religion, sexual orientation, and gender identity.

The removals mark a decrease from last year, when Airbnb suspended 5,100 accounts for violating its non-discrimination policy.

The new report includes data from Project Lighthouse, an initiative Airbnb launched in 2020 to address disparities in how people of color use the platform. It showed differences in how often people are able to successfully book Airbnbs based on their perceived races.

The widest disparity existed between guests perceived as Black and those perceived as white. Last year, guests perceived to be Black were confirmed to book the Airbnb of their choice 91.4% of the time, compared to 94.1% for guests perceived to be white. The booking success rate was 93.4% for Asians and for Latinos, and it was 93.2% for other or unknown races, as defined by the report. The data was gathered from a random sample of 750,000 reservation requests made in 2021.

"Airbnb is built on trust, and we will continue to innovate and design new products and initiatives that increase acceptance and combat bias," said Airbnb CEO Brian Chesky in an accompanying press release.

In 2018, Airbnb changed its platform so that hosts could only see a guest's profile picture after accepting their reservation. The company says this reduced the disparity in booking success between guests perceived as Black and those perceived as white but didn't have a statistically significant impact on the rate for other perceived races.

This November, Airbnb made it easier for guests to use Instant Book, which lets users book listings without a host's approval on the reservation. 

The company says it's currently working on making it easier for guests to receive reviews, since guests with more reviews have a better chance of successfully booking a listing than guests without reviews. Guests perceived as Black or Latino have fewer reviews than guests perceived as white or Asian, according to Airbnb.

The company has come under fire in recent years for its approach to addressing discrimination on the platform.

At the start of this year, Airbnb said it would hide guests' names, only showing their initials, until their bookings are confirmed, but only in Oregon. The change came after a 2019 settlement in which three Black women in the state sued, saying hosts could discriminate, including by denying guests bookings, based on race. 

In 2016, a Harvard Business Review study found that guests with names that sounded Black were roughly 16% less likely to be accepted than identical guests whose names sounded white.

Read the original article on Business Insider

Conservative senators hail member-led strategy session as 'good first step' in dealing with mounting frustrations about Mitch McConnell's leadership

Wed, 12/14/2022 - 2:57pm
Senate Minority Leader Mitch McConnell speaks to the media during the weekly Senate Republican Leadership press conference at the US Capitol on December 13, 2022 in Washington, DC.
  • A group of Senate Republicans hosted their first member-led policy discussion on Wednesday.
  • Organizers said nothing concrete came out of the spitballing session but vowed to keep talks going.
  • Attendees said Senate Minority Leader Mitch McConnell was in the room but didn't participate.

While they doubt they have the votes to derail a bipartisan year-end spending deal appropriators are racing to finish, several Senate Republicans who pressed for a conference-wide meeting on Wednesday said they'd gotten the ball rolling on having more say in the next Congress. 

"It's the first time since I've been here that we've had a broad discussion on coming up with a mission statement for what we're for," Sen. Mike Braun said upon emerging from the meeting he called along with others determined to pry power from Senate Minority Leader Mitch McConnell after the party's midterm elections flop

After quashing Sen. Rick Scott's attempt to wrest control of the caucus from him a few weeks back, McConnell said Braun and the others were free to pull together as many meetings as they see fit — so long as at least five Republicans sign on. 

As for any changes he might make, McConnell said, rather bluntly, "There's nothing to negotiate." 

Braun, who is eyeing the exits after jumping into the Hoosier State's 2024 race for governor, billed the midday discussion as very preliminary in terms of ironing out what Republicans feel like they'll be able to accomplish leading into 2024. Insider saw fellow Republicans Sen. Tim Scott of South Carolina, Cynthia Lummis of Wyoming, and Josh Hawley of Missouri pop in and out of the hour-plus long meeting to field phone calls or tend to other personal business.

"Nothing was fleshed out," Braun told reporters at the US Capitol, adding that "I think it's the beginning, maybe, of a more participatory process." He noted, however, that McConnell did not speak during the meeting. 

Senate GOP leader John Cornyn said this gathering seemed collegial enough — this time.  

"We're all very busy people with a lot of demands: family, campaigns, fundraising, our constituents. And everybody's spread pretty thin," the Texas Republican said of the time constraints lawmakers already wrestle with on a daily basis. He gave the meeting organizers credit for trying to find ways for Republicans to come together in the new year after falling short on election day. 

"We can probably do a better job of being more unified, more strategic. And I think that's what this is about," Cornyn said outside the Senate chamber. 

Still, convening more meetings, which Cornyn said this group seemed inclined to do, is preferable to the scorched-earth tactics others have embraced in the past. 

"We've tried government shutdowns. There've been threats to undercut the full faith and credit of the country on things like raising the debt ceiling. So we just need to keep talking," Cornyn said. 

Sen. Ron Johnson of Wisconsin, who Braun said made a case for needing to rein in government spending, told reporters he'd only just begun to fight. 

"I think we agreed on having more sessions like that," Johnson said, adding that he's making it his mission to "start looking at more information like this on a regular basis." 

"This is only just a first step," Johnson said. 

Co-organizer Sen. Rand Paul said there were no immediate plans to call another meeting, but left the door open to getting together in January since they'll need to work out their internal rules for the 118th Congress anyway.   

Sen. Marco Rubio endorsed dragging leadership to the table more often.  

"I think they're good meetings to have," Rubio told Insider. And he added that he's looking forward to more. 

"Every time they call one, I'll be at 'em," he said.  

Read the original article on Business Insider

Walmart shoppers can now order products via text message, two years after a similar text-to-shop experiment failed

Wed, 12/14/2022 - 2:56pm
  • Walmart hopes to streamline shopping by allowing customers to text items they'd like to purchase.
  • The new service was beta tested previously and grew out of Store No. 8, Walmart's incubator arm.
  • The company shut down a previous text-based experiment, dubbed Jet Black, in 2020 after just two years.

Walmart has rolled out a new tool for customers to text the retailer the names of products they want to purchase. That feature, Walmart Text to Shop, is coming online roughly two years after Walmart shut down a limited text-to-shop experiment.

Launched as a beta test in October 2021 to select markets, Walmart Text to Shop "is seamlessly connected" to users' Walmart accounts, Dominique Essig, vice president of conversational commerce for Store No. 8, Walmart's secretive incubator arm, wrote in a blog post Wednesday.

"Simply text the items you need, and they get added to your cart," Essig wrote. "Choose from the full selection of Walmart's products, including items from your local store and from Text 'reorder' to quickly review and add your frequently ordered items to your cart."

The tool allows for customers to create in-store shopping lists, as well as shop online and organize times for pickup and delivery.

At any given time, Store No. 8 houses  five to eight "portfolio" companies — or startups that help Walmart get a jump on new shopping trends, said Scott Eckert, Walmart's senior vice president of next generation retail. The text-to-shop feature was one of those portfolio companies.

Eckert told Insider last month that Walmart is looking to "rapidly sign up customers" for text-to-shop.

"That type of convenience and inserting digital tools into your main shopping stream of activity is the type of thing that we're working on here," Eckert said.

This isn't the first time Walmart has tried its hand at text-to-shop services.

In 2018, the company rolled out Jet Black, a $50-per-month service where customers could access personal shoppers through text message. The service, also first incubated in Store No. 8, initially launched in New York City and had plans to expand.

But Walmart lost a ton of money on the service — reportedly hemorrhaging $15,000 annually per member as of 2019. And in February 2020, Walmart shut down the service and laid off nearly 300 people in the process.

"As we said in the beginning when we launched Jet black in 2018, part of the initiative was to start testing and building the technology with the intent that it could be used in other ways, including applying it to other parts of our business in the future," a Walmart spokesperson said at the time. "We've learned a lot over the past two years, including how customers respond to the ability of ordering by text as well as the type of items they purchase through texting."

Got a tip about Walmart? Ben Tobin can be reached by email at or via the encrypted app Signal or text at (703) 498-9171.

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Electric cars are shredding the brand loyalty automakers have spent decades building up — and it's great news for Kia and Hyundai

Wed, 12/14/2022 - 2:55pm
Automakers work like crazy to drive brand loyalty, while EVs "draw in new buyers naturally."
  • A new study finds EVs are helping car brands attract new customers.
  • Ford, Hyundai, and Kia have EVs bringing in the most new customers.
  • GM CEO said 40% of customers purchasing GM EVs are new to the company.

Electric vehicles are poised to disrupt customer loyalty in the car business, long one of the mainstays of vehicle brand identities.

According to a new study from car-shopping site Edmunds, electric vehicles are convincing buyers to change brands at much higher rates than historically seen in automotive retail. This particular sales metric, known as customer conquests, has historically been a difficult thing to achieve.

Carmakers have spent decades using wave after wave of focus groups, spending billions in marketing dollars, and internalizing customer feedback to drive loyalty among their buyer bases.

Keeping customers within the brand has always been a top priority for car companies and dealers alike, and not just for the obvious reason that no brand wants to see a buyer go to a competitor. It's also that it's far cheaper to keep a customer than to find a new one, according to Edmunds Executive Director of Insights Jessica Caldwell. 

Car companies looking to conquest buyers to a brand can end up spending billions of dollars on new ad campaigns and R&D efforts to revamp their image, only to see meager or temporary shifts in loyalty.

"This is no easy feat in the auto industry and a part of the reason why leasing was invented — to drum up repeat business," Caldwell wrote in the study. "These EVs are drawing in new buyers naturally, which is a benefit that can't be underestimated."

The vehicles attracting the most customers from other brands, according to Edmunds:

  • Ford's Mustang Mach-E, 69% conquest rate among trade-ins
  • Hyundai's Ioniq 5, with 81% conquest rate among trade-ins
  • Kia's EV6, with 79% conquest rate among trade-ins

Ford's early electric vehicle strategy hinged on leveraging the company's most valuable brands – with the most loyal customer bases – to strengthen its position in the EV market.

"I want us in segments and markets where we do really well without even trying that hard," Ford CEO Jim Farley told Insider earlier this year.

In remarks to journalists last week, GM CEO Mary Barra said 40% of GM's EV buyers are new to the company. GM is currently playing a long game with EV customers to drum up new loyalty with a call center for all electric vehicle drivers and shoppers.

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The stock market just flashed a widely watched 'golden cross' indicator that points to more upside ahead

Wed, 12/14/2022 - 2:38pm
  • The Dow Jones Industrial Average just flashed a closely followed technical buy signal on Tuesday.
  • The so-called "golden cross" occurs when the 50-day moving average moves above the 200-day moving average.
  • The indicator suggests more upside is in store for the Dow as it solidifies its uptrend.

The stock market just flashed a closely followed technical buy signal that suggests more upside ahead for stocks.

On Tuesday, the Dow Jones Industrial Average's 50-day moving average closed above its longer-term 200-day moving average, flashing a technical "golden cross" for the first time since August 2020 amid the ongoing recovery from the COVID-19 pandemic. 

The lagging technical indicator can help alert traders to securities in the stock market that are solidifying their uptrend and are likely to experience a continuation with higher stock prices. The Dow has surged 20% since its mid-October low, and the index is down only 6% year-to-date.

Meanwhile, the S&P 500 and Nasdaq 100 have yet to generate a golden cross, and that's something traders will want to see to confirm that the recent rally in stocks can be sustained into 2023.

The opposite signal to the golden cross is the death cross, which is a sell signal that triggers when the 50-day moving average crosses below the 200-day moving average. The Dow flashed a death cross in March of this year, and the index subsequently went on to fall another 12% at its low.

But the technical buy indicator can sometimes be a head fake as it has a success rate of 64%, according to data compiled by The Chart Report. Ian McMillan analyzed a total of 81 golden crosses that occurred in the Dow dating back to its inception in 1896.

The analysis found that on average, stocks were higher three months after a golden cross 62% of the time, and higher six months after the golden cross 64% of the time.

The average three-month return when stocks were higher after a golden cross was 7.33%, while the average return six months after the golden cross was 10.65%.

Stressing the importance that moving average crossover signals are not perfect, Ari Wald, head of technical analysis at Oppenheimer & Co., said to The Chart Report, "All big rallies start with a golden cross, but not all golden crosses lead to a big rally."

The golden cross signal is one of many trading patterns that technical analysts employ to buy stocks. Meanwhile, the bearish death cross is in addition to many trading patterns that traders use to sell stocks.

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Meet Eclipse Cottages, the developer of green tiny-home communities that plans to help people buy houses for $99 a month

Wed, 12/14/2022 - 2:25pm
The kitchen in one of Eclipse's tiny homes.
  • Eclipse Cottages builds spacious, energy-efficient tiny homes in South Carolina. 
  • The company is rolling out financing meant to help people own a home for as low as $99 a month.
  • CEO Justin Draplin says he hopes this will help millennials and Gen Zers become homeowners.

Ronald Wells has been a self-proclaimed tiny-home aficionado for years, so when it came time for the 55-year-old, who goes by Blue, and his wife, Pamela, to sell their big house in Atlanta and downsize, he knew exactly what he wanted.

He chose Eclipse Cottages to build a 600-square-foot abode in Travelers Rest, South Carolina, at the foothills of the Blue Ridge Mountains. With a design that includes 1 ½ bathrooms, 16-foot ceilings, and a 6-foot-tall loft, Wells says, his tiny home has more space than a typical one.

Wells and his wife paid for their cottage with $110,000 in cash. Their housing costs, including rent for the lot, electricity, water and WiFi, total about $500 a month, compared with the $5,000 worth of expenses for his former home in Atlanta.

The Greenville, South Carolina-based Eclipse, which began with $600,000 in angel funding, believes like other tiny home builders that its product can be a solution to the crisis in housing affordability by offering homes with modest ownership costs. The company has three communities of tiny homes — two in Travelers Rest and one in Alcolu, South Carolina — and more on the way.

Affordability has also taken a hit from high interest rates. But Eclipse has a plan for that: $99-a-month financing that it hopes will have generational appeal for older Americans, who own most of Eclipse's homes now, as well as millennials and Gen Zers who may lack savings.

The financing is expected to become available starting in January. Under the plan, wealthy investors will purchase the properties in return for tax credits on solar panels and other energy-efficient technology used in the construction, Draplin said. The investors then finance buyers at the $99 monthly price, he said.

"The technology that goes into the homes that we build to make them efficient has opened up new opportunities," Draplin said. "It usually works for both parties, because most of our end users aren't billionaires that can use all these credits."

Blue Wells' tiny home in one of Eclipse Cottages' communities.

With homeownership becoming increasingly out of reach, the technology-research firm Technavio expects the tiny-home market worldwide to grow by about 4.45% a year from 2021 by 2026, or about $3.57 billion in total. North America would account for 59% of that growth.

It makes sense: Tiny homes can cost as little as $10,000. Luxury tiny homes, like the ones Eclipse offers, are still far below the typical single-home price of $425,000, according to

With interest rates soaring this year, younger people are struggling to afford even tiny homes, Draplin said. He says he's heard from many of them who are inspired by the tiny-home lifestyle but can't afford the up-front cost or a high-interest mortgage.

"The younger demographic that's very interested in this lifestyle still can't afford it because you need $20,000 to $30,000 down," he said. "With the financing that we're going to offer, I think it's going to be a huge change in the demographics of our community."

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Google execs say the company isn't launching a ChatGPT competitor because it has greater 'reputational risk' than startups like OpenAI

Wed, 12/14/2022 - 2:07pm
Alphabet CEO Sundar Pichai.
  • Google executives reportedly told employees they don't think chatbots are ready to replace search.
  • Employees asked execs if failing to launch a chatbot like OpenAI's ChatGPT is a "missed opportunity," CNBC reported. 
  • Alphabet's CEO and Google's head of AI said the company has a greater "reputational risk" than startups like OpenAI.

Google executives reportedly told employees that the company does not plan to launch a chatbot to compete with OpenAI's buzzy ChatGPT because it's a "reputational risk."

Speaking during a recent all-hands meeting, Google's Head of AI Jeff Dean said despite having artificial intelligence technology products and capabilities, the company has to make decisions "more conservatively than a small startup," CNBC reported.

His remarks came in response to a question from an employee about whether failing to make a rival chatbot would be a "missed opportunity," particularly given that Google has its own conversation technology such as LaMDA, or Language Model for Dialogue Applications. 

Dean, who was joined in the meeting alongside Alphabet CEO Sundar Pichai, said that while Google's technology is just as capable as the trending chatbot, the company is more vulnerable to chatbot-related issues like bias and false information because over a billion people use and depend on Google to search for information.

"We are absolutely looking to get these things out into real products and into things that are more prominently featuring the language model rather than under the covers, which is where we've been using them to date," Dean said about Google's AI. "But, it's super important we get this right."

Other concerns include the limitations of bots like ChatGPT listed in a Nov. 30 OpenAI blog post, including "plausible-sounding but incorrect or nonsensical answers," "harmful instructions," and "biased behavior" in some of its answers. 

OpenAI CEO Sam Altman has also acknowledged ChatGPT's limitations, tweeting on Dec. 10: "ChatGPT is incredibly limited, but good enough at some things to create a misleading impression of greatness. it's a mistake to be relying on it for anything important right now. it's a preview of progress; we have lots of work to do on robustness and truthfulness."

ChatGPT reached over one million users within five days of its launch, and is backed by Google's rival, Microsoft. OpenAI was co-founded by Sam Altman and Elon Musk in 2015. Musk resigned from the company's board of directors three years later.

Google did not immediately respond to Insider's request for comment.

In addition to LaMDA, Google's BERT and MUM AI language models, which are used to improve its search engine, are competitive with ChatGPT. MUM, which stands for Multitask Unified Model, can understand information from different mediums, like from a webpage and from a photo, at the same time, to give users an answer.

A former Google executive told Bloomberg that ChatGPT could "disrupt" Google's ad business by stopping users from clicking links that have ads. Sridhar Ramaswamy, who was the head of Google's ad team from 2013 and 2018, told Bloomberg that ChatGPT was "a better experience" for searches.

But a Morgan Stanley report published on Monday said the firm thinks ChatGPT will not be a large threat to Google's position as it continues improving its search engine and language models.

In the all-hands meeting, Pichai reportedly said Google has "a lot" of plans for AI in 2023.

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Even Elon and Zuck don't have the juice to make an all-in-one 'super app' happen

Wed, 12/14/2022 - 2:04pm
  • One-stop super apps are a dream ambition for Silicon Valley CEOs. 
  • Apps that offer ride-hailing, e-commerce, and payments have found success outside the US.
  • But a version fit for the West could be a pipe dream given the regulatory and regional challenges.

Silicon Valley's tech chiefs are talking more about chasing a dream that no company has accomplished in the West: building a super app.

Imagine an app that lets you pay your rent, call a cab, share pictures and video, text friends, and shop for groceries or a new TV. A Frankenstein's monster that combines Amazon, Uber, Instagram, Whatsapp, and Venmo, and whatever banking app you currently use.

These do-it-all apps exist outside the US: WeChat is the super app supreme in China, while Careem aspires to that status in the Middle East, Rappi in Latin America, and Grab in Southeast Asia.

Tech CEOs want to replicate the model in the West, with the loudest voice on super apps in recent months being Twitter's new boss. Weeks before finalizing his $44 billion Twitter deal, Elon Musk tweeted that "buying Twitter is an accelerant to creating X, the everything app", and has since talked up the idea in a town hall.

Mark Zuckerberg and Evan Spiegel harbor super app ambitions; Microsoft reportedly wants to build its take on a super app that would rival Google.

The ambition makes sense. Although China's WeChat is overall smaller than the big US tech firms by users, it commands something they all crave: attention. Up-to-date stats are difficult to come by, but a 2017 statistic from investor Mary Meeker pegged the time Chinese users spend across WeChat and QQ, a messaging app, at 1.9 billion hours every day — more than all other apps combined at the time.

But attempts to create a super app in the US could be the place where billionaire dreams die, because the hurdles are just too great.

What Silicon Valley CEOs want 

What an "everything app" looks like seems to differ slightly tech billionaire by billionaire. Earlier this year, Musk spoke highly of WeChat as "Twitter, plus PayPal, plus a whole bunch of other things, all rolled into one."

At Facebook's parent company Meta, "super app" is a taboo word precisely because it's too abstract, Insider's Kali Hays reported last month. But it's clear CEO Mark Zuckerberg wants something like a super app. The firm's attempts to build out standalone payment capabilities through the Libra/Diem blockchain project failed, but other apps in its family such as Instagram and WhatsApp are bolting on payment and e-commerce functionality.

As Zuckerberg and his team seem to have noticed, payments are critical to any would-be super app.

Fintech is "part of most super apps' operations or aspirations." Paying for things is central to WeChat's success, according to research published in October in the journal Media, Culture & Society.

But payments are a tough nut for Silicon Valley to solve. It's still relatively uncommon to pay for things using your phone in the US, compared with Europe and other territories. Half of US smartphone users are expected to adopt mobile payments as late as 2025, according to eMarketer research. By contrast, 64% of China's population had made a payment on their phone by the end of 2021, according to a report from China UnionPay, the state-owned financial services firm.

Well-developed payments apps exist in the form of Venmo or Cash App, but a reverse attempt to build non-payment services into those apps may be a lengthier process: competition to lead the market they're already in is fierce, and American users have become accustomed to a diverse choice of apps. 

Companies will struggle to generate the stickiness needed to make a super app work the way WeChat does, which has ratcheted up more than 1 billion users thanks to its mix of services and payments that ensures people don't have to look elsewhere. 

America isn't China, Africa, or India

Super apps in Europe and North America are "expected to evolve differently" from places like Asia and Latin America, where there are "serious infrastructure gaps", according to a white paper published in 2020 by CPP Investments, a Canadian asset management firm.

These gaps mean that "electronic payment penetration is minimal" in many developing economies. In India, for instance, almost a quarter of adults don't have bank accounts, making these markets ripe for a super app that meets those needs, the paper suggests. In China, smartphones were first entry point to the internet for large swathes of its population. 

But banking and e-commerce are already well-developed in the US and Europe, where consumers have plenty of choice. A newcomer super app has a tougher sell accessing this sophisticated, less trusting type of user.

There's another clear reason why the most successful super app has emerged in China. The regulatory strong arm of Beijing has shut out foreign competitors from offering Chinese consumers any alternative.

Silicon Valley's gatekeepers stand in the way of the super app dream

US tech firms harboring super app ambitions will need to fend off their own regulators, overseas regulators, and Apple's App Store. 

Under Lina Khan, the FTC is becoming more sharply focused on competition and user privacy. Creating super apps would almost certainly require aggressive consolidation through acquisitions — a surefire way of attracting scrutiny. As it stands, American regulators are tending towards a more European approach to data privacy, which favors competition and fragmentation.

Khan is likely to be a particularly painful thorn in the side of Amazon if it ever decided to join the super app race, with the FTC chair soaring to fame for her research paper on the way Amazon has wielded its power. 

There's also the challenge of Apple.

With iOS the most popular smartphone operating system in the US, Apple's App Store can make or break an app's success. As the CPP Investments white paper notes, super apps "can be thought of as operating platforms for mobile devices." Apple simply doesn't permit most apps the kind of device-level access they would likely need to act as a super app.

It is clear that the obstacles on the road to a Silicon Valley-made super app are many. But the opportunity a super app presents is so enticing – despite all the hurdles – that it's a dream many tech CEOs are going to find difficult to let die.

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The Fed's slower interest rate hike this month is good news for Americans looking to buy a car, house, or use their credit card in 2023

Wed, 12/14/2022 - 2:00pm
Federal Reserve Chairman Jerome Powell speaks at a news conference following a Federal Open Market Committee meeting, Wednesday, Nov. 2, 2022, in Washington. (AP Photo/Patrick Semansky)
  • The Federal Reserve raised interest rates by 0.5 percentage points on Wednesday.
  • This marked a decrease from the previous four consecutive 0.75 percentage point hikes. 
  • The Fed appears to be slowing down its aggressive efforts to fight inflation. 

The nation's central bank raised interest rates once again — but appears to be slowing down its efforts to fight inflation.

On Wednesday, the Federal Reserve announced during it Federal Open Market Committee (FOMC) meeting that it would be hiking interest rates by 0.5 percentage points, signaling a slowdown from its past four increases of 0.75 percentage points. 

This comes after the US economy received some promising data on where high prices are headed — the Consumer Price Index, which measures inflation, rose 7.1% year-over-year in November, which marked a decrease from the October reading of 7.7%. While inflation levels are still undoubtedly high, the Fed appeared to respond to the positive direction the economy is heading by slowing its aggressive interest rate hikes. 

The lower hike is good news for consumers — the super-fast pace of rate hikes earlier this year quickly made it more expensive to borrow money, so those costs moving up at a slower rate will make buying a house, car, or using a credit card next year less painful for Americans than if the Fed kept up their aggressive stance. 

Still, the country is far from achieving the Fed's goal of reaching a 2% inflation level — where the economy was pre-pandemic — and Federal Reserve Chair Jerome Powell previously indicated during a Brookings Institution event that interest rate hikes will persist so long as prices remain high.

"The timing of that moderation is far less significant than the questions of how much further we will need to raise rates to control inflation, and the length of time it will be necessary to hold policy at a restrictive level," Powell said. 

"It is likely that restoring price stability will require holding policy at a restrictive level for some time," he added. "History cautions strongly against prematurely loosening policy. We will stay the course until the job is done."

Still, the question of whether Americans will find themselves in a recession next year looms. Both Powell and Treasury Secretary Janet Yellen have previously said that they believe avoiding an economic downturn is possible while still managing to combat inflation, known as a soft landing. 

"There's a risk of a recession," Yellen told 6o Minutes last weekend. "But it certainly isn't, in my view, something that is necessary to bring inflation down."

But some Democratic lawmakers like Massachusetts Sen. Elizabeth Warren have cautioned the Fed on numerous occasions that continuing to raise interest rates could send Americans into a recession and bring on a stream of job losses. During a speech last month, Warren said "there is a big difference between landing a plane and crashing it."

Biden and other administration officials have maintained confidence that things will be looking a lot better for consumers by the end of 2023. 

"I hope by the end of next year we're much closer, but I can't make that prediction," Biden said on Tuesday, referring to prices returning to normal. "I just — I'm convinced they're not going to go up.  I'm convinced they're going to continue to go down."

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Shark Tank's Kevin O'Leary says comparing crypto to gambling is the same way the stock market was described before it was regulated

Wed, 12/14/2022 - 2:00pm
  • Shark Tank investor Kevin O'Leary says crypto needs to be regulated like the stock market. 
  • "This premise that it's some kind of different issue, it's not. It's just unregulated, wild west." he told lawmakers.
  • O'Leary has said he lost nearly $10 million in the FTX collapse, and was paid $15 million as a spokesman. 

Trading stocks was once criticized as mere gambling, and the cryptocurrency market will be the same way until it is regulated like other securities, Kevin O'Leary told lawmakers in a testimony on Wednesday. 

"I find the analogy of crypto to be that of gambling and speculation interesting. That was exactly what we described of the New York Stock Exchange 150 years ago. And what happened was, because of the nature of the risk, we regulated it," O'Leary said during his testimony to the US Senate Committee on Banking, Housing and Urban Affairs on Wednesday.

It's unclear what moment in history O'Leary is referring to, though the NYSE hit a trading-volume milestone of 1 million shares around 135 years ago. That was some time before the market crashed in the late 1920s, which spurred the creation of the Securities and Exchange Commission in 1934 and gave birth to much of the regulatory framework for stocks and other securities in place today. 

"Now is the time to embrace the potential of crypto, regulate it, and allow its potential to be fully realized for the benefit of the entire economy," O'Leary said in his prepared remarks ahead of Wednesday's testimony. 

O'Leary, who was a paid spokesperson and account holder of FTX, says he lost around $10 million when the exchange declared bankruptcy last month. He had previously jumped to Bankman-Fried's defense against fraud allegations, and called for FTX to be audited before condemning the fallen crypto mogul. 

The collapse of FTX has resonated among crypto skeptics, like economist Nouriel Roubini, who called crypto the "Mother of All Ponzi Schemes" and slammed O'Leary for being a "paid hack" for FTX. But O'Leary urged policymakers to better police the industry, adding that he was previously a crypto skeptic himself before becoming more familiar with the industry.

"We need to regulate this. This premise that it's some kind of different issue, it's not. It's just unregulated, wild west." he said. "It needs regulation, that's it."

Bankman-Fried was arrested on multiple charges on Tuesday, including fraud, conspiracy, and money laundering. He could be sentenced up to 115 years in prison if convicted of all the charges brought against him.

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Don't expect a wave of short sales and foreclosures during this housing downturn — homeowners have too much equity

Wed, 12/14/2022 - 1:46pm
A young couple loads a moving truck with boxes.
  • Foreclosures are rising due to the expiration of mortgage forbearance and moratorium programs from the CARES Act.
  • One real estate expert says that it's no cause for alarm as current market fundamentals remain strong.
  • Today's market has tighter lending standards, more assistance programs, and historic levels of homeowner equity compared to downturns of the past.

With fewer Americans purchasing homes — even in pandemic housing hotspots like Austin and Phoenix — experts predict that US home prices could tank as much as 20% in 2023. And in previous housing booms and busts, downturns have been accompanied by a rise in short sales — when a homeowner and their lender agree to sell a house for less than the balance owed on the loan — and foreclosures, especially if the economy's health is deteriorating. 

In 2008, a combination of cheap debt, predatory lending practices, and complex financial engineering led to a spectacular housing bust that triggered a crisis of short sales and foreclosures among homeowners who could either no longer afford to pay their mortgage or believed that it no longer made financial sense to do so.

While some of the factors that contributed to the foreclosure spike of the mid-2000s have reemerged in today's housing downturn, Rick Sharga, the executive vice president of market intelligence at real estate data and research firm ATTOM, told Insider that this time around, today's homeowners are at less risk of losing their property as market fundamentals are stronger and there are more programs to assist struggling borrowers. 

"Historically, normal foreclosure activity means about a single percent of loans are in foreclosure," he told Insider. "Right now we're looking at about half a percent of loans that are in some stage of foreclosure. The pretty low levels of foreclosure activity are because the quality of the loans that have been issued over the last 10 years have been very strong." 

Indeed, American borrowers are in a far better position than they were in 2008. US regulatory agencies have since enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act to help prevent some of the pervasive predatory lending practices that gave rise to the last housing crisis. There is also the Homeowner Assistance Fund, which is designed to help those who have fallen behind on their mortgages. 

These initiatives paired with high levels of home equity — roughly $29 trillion as of the second-quarter of the year, according to the Federal Reserve — are likely to prevent an  upcoming wave of short sales and foreclosures, Sharga suggests. According to him, that's because "market conditions are day and night" today compared to 15 years ago. 

Foreclosure rates are rising but remain below historical levels

Data from ATTOM's December foreclosure report shows there were 30,677 foreclosure filings in November, specifically homes that either had default notices, scheduled auctions, or bank repossessions. While the rate jumped 57% from the same period in 2021, the figure remains well below 2019 levels, prior to the pandemic. 

The spike in foreclosure activity between 2021 and 2022 stems from the expiration of temporary financial safety nets enacted through the CARES Act. The legislation gave financially burdened homeowners the ability to either temporarily pause or to reduce their mortgage payments during the early stages of the pandemic. The CARES Act was also notable for introducing a foreclosure moratorium on home loans backed by the Federal Housing Administration or public-private entities like Fannie Mae and Freddie Mac.

Sharga says the combination of these two intervention programs "virtually stopped foreclosure activity for much of 2020 and 2021," dropping the numbers to the lowest levels on record — "albeit somewhat artificially." 

While the foreclosure rate is now rising, Sharga does not foresee activity climbing to worrisome levels as "economic fundamentals are pretty strong" in today's housing market. However, he warns that if the US does enter a recession next year, Americans who purchased a home near the peak of the market will be most at risk of going underwater on their homes. But even with this prospect, Sharga suggests that a substantial uptick in foreclosures or short sales is unlikely as many recent homebuyers have positive equity in their homes.

"What's interesting about this cycle is that even if a borrower does find themselves in foreclosure today, 93% of those folks have positive equity in their homes, which is the complete opposite of where we were last time," he said.

"They have the opportunity to potentially refinance their loan if they are temporarily out of a job or if they have to, they can at least sell the home at a profit and get a fresh start, whereas if you go back to 2008, a lot of the borrowers that were in foreclosure just really had no alternative other than to lose the property to a foreclosure sale," Sharga added. "Right now there's a very, very small percentage of people experiencing that."

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Mortgage demand rises after nearly a month of declines as buyers respond to pullback in rates

Wed, 12/14/2022 - 1:35pm
A row house for sale in Washington D.C.
  • Weekly applications for home loans have risen after weeks of declines. 
  • The average 30-year fixed-rate for mortgages was at 6.42%, near its lowest in a month. 
  • Separate data from Black Knight shows 8% of homebuyers with mortgages are underwater. 

Weekly applications for home loans have edged higher, suggesting some pick-up in appetite in the housing market with borrowing costs recently pulling back from 20-year highs. 

Applications rose 3.2% from one week earlier, the Mortgage Bankers Association said Wednesday about the seasonally adjusted results of its survey for the week ended December 9. The increase was the first since the week ended November 18. 

Applications for refinancing also went up, rising 3% from the previous week 

The rise in applications was taking place as 30-year fixed-rate mortgages have been drifting down from steeper levels reached this year. Mortage rates have climbed this year with the Federal Reserve raising interest rates at an aggressive pace to combat high inflation.

The survey showed the 30-year fixed rate at 6.42%, slightly higher than a week ago but close to the lowest in a month. The average 30-year fixed mortgage rate hit 7.16% in late October, a 21-year high

"The ongoing moderation in home-price growth, along with further declines in mortgage rates, may encourage more buyers to return to the market in the coming months," Joel Kan, deputy chief economist at MBA said.

"However, with rates more than three percentage points higher than a year ago, both purchase and refinance applications are still well behind last year's pace," said Kan. 

Refinancing applications were 85% lower than the same week one year ago.

The closely watched S&P CoreLogic Case Shiller track of housing prices showed growth in prices for single-family homes fell by 0.8% month over month in September. Its index tracking all nine US census divisions showed a 10.6% annual price gain in September, down from 12.9% in August. 

Declines in home prices this year have already hurt hundreds of thousands of purchasers, according to mortgage data and tech firm Black Knight. About 270,000 home buyers in 2022 were underwater on their purchases, or they owe more on their loans than their properties are worth, the firm said in a report released this month. The figure amounts to 8% of US home purchases that were mortgaged this year. 

"Though the home price correction has slowed, it has still exposed a meaningful pocket of equity risk," Ben Graboske, president of Black Knight Data & Analytics, said in the report. "Make no mistake: negative equity rates continue to run far below historical averages, but a clear bifurcation of risk has emerged between mortgaged homes purchased relatively recently versus those bought early in or before the pandemic."

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Georgia Secretary of State Brad Raffensperger calls on state legislators to eliminate runoff elections

Wed, 12/14/2022 - 1:27pm
Georgia Secretary of State Brad Raffensperger.
  • Georgia Secretary of State Brad Raffensperger called for an end to general election runoffs.
  • Raffensperger cited the strain on elections officials and the tough deadlines for offices.
  • Last week, Sen. Raphael Warnock defeated challenger Herschel Walker in the state's latest runoff.

Georgia Secretary of State Brad Raffensperger on Wednesday called for an end to the state's runoff system for general election contests, which, if successful, would curb a decades-long practice that in the past two years has drawn enormous political attention to the state.

"Georgia is one of the only states in the country with a General Election Runoff. We're also one of the only states that always seems to have a runoff. I'm calling on the General Assembly to visit the topic of the General Election Runoff and consider reforms," Raffensperger said in a statement.

"No one wants to be dealing with politics in the middle of their family holiday," he continued to say. "It's even tougher on the counties who had a difficult time completing all of their deadlines, an election audit and executing a runoff in a four-week time period."

Raffensperger — a Republican who serves as the top elections official in the state and was easily reelected to a second term last month — announced his position a week after Democratic Sen. Raphael Warnock won a full six-year term by defeating Republican Herschel Walker in a runoff on December 6.

In the November general election, Warnock edged out Walker 49.4%-48.5%, but since neither candidate met the 50 percent threshold, the race was extended for an additional four weeks.

In January 2021, both Warnock and now-Democratic Sen. Jon Ossoff found themselves in dual runoffs with Republicans Kelly Loeffler and David Perdue, respectively, after neither of the four candidates cleared the 50% mark in the November 2020 general election. Warnock and Ossoff won their respective races, which gave Democrats a majority in the US Senate just days before President Joe Biden entered the Oval Office.

After those two contests, the GOP-controlled Georgia legislature overhauled the state's voting laws through SB 202, which cut the time between the general election and the runoff from nine weeks to four weeks.

When asked about additional reasoning for Raffensperger's decision, a spokesman for the his office told NBC News that Georgia election workers were "burned out" after the prolonged election season, pointing to a growing level of discontent with the system among campaigns and voters alike.

Last month, the Warnock campaign, along with the Democratic Party of Georgia and the Democratic Senatorial Campaign Committee, filed a lawsuit to permit November 26, 2022 — the Saturday after Thanksgiving — to be an early voting day. Raffensperger wanted to block voters from heading to the polls that day, arguing that it would be illegal to hold early voting one day after a state holiday.

The Democratic-led suit made the case that the law didn't apply to runoff contests, which were conducted in a more condensed timeframe.

State courts sided with the plaintiffs and voting took place on November 26 in select jurisdictions across the state.

While Republicans had historically performed well in Georgia runoffs, Democrats in recent years have put into place a highly effective get-out-the-vote operation. During the state's early voting period, Democrats turned out strongly, erasing the Republican edge and once again sending Warnock to the Senate.

Read the original article on Business Insider

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