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HUD Secretary Ben Carson defends his Oreo gaffe and blames people for trying to 'ridicule' him, saying 'of course' he knows what an REO is

Wed, 05/22/2019 - 6:25pm

  • Housing and Urban Development Secretary Ben Carson underplayed his "REO" gaffe during a congressional hearing and said the incident could be attributed to partisan attempts "to ridicule people."
  • "We throw around acronyms all the time, particularly in government," Carson said in an interview with The Hill. "And you don't really even think about what do the letters mean? But you know what the things is."
  • "Of course, you know what an REO is," Carson said. "Of course, you know what the foreclosure portfolio is."
  • Visit Business Insider's homepage for more stories.

Housing and Urban Development Secretary Ben Carson downplayed his "REO" gaffe during a congressional hearing on Tuesday and said the incident could be attributed to partisan attempts "to ridicule people."

"We throw around acronyms all the time, particularly in government," Carson said in an interview with The Hill. "And you don't really even think about what do the letters mean? But you know what the things is."

"Of course, you know what an REO is," Carson added. "Of course, you know what the foreclosure portfolio is."

Carson's testimony during a House Financial Services Committee hearing on Tuesday became viral after he appeared to be confused with a basic acronym used for foreclosures in the real-estate industry.

Democratic Rep. Katie Porter of California asked if Carson knew of REO rates, or real-estate-owned rates, to which Carson answered by referencing the Oreo cookie.

"Do you know what an REO is?" Porter asked Carson.

"An Oreo?" Carson said.

"No. Not an Oreo," Porter answered. "An R-E-O. An R-E-O."

Carson later shrugged off the exchange with a lighthearted picture on him with a package of Oreos.

"OH, REO! Thanks, @RepKatiePorter," Carson said in a tweet. "Enjoying a few post-hearing snacks. Sending some your way!"

Read more: HUD Secretary Ben Carson sent a pack of Oreos to a lawmaker after he flubbed a question about REOs during a congressional hearing

Carson suggested the entire incident was fueled by a partisan divide.

The HUD secretary was appointed by President Donald Trump and has been criticized for lacking experience in the housing industry. A proposed HUD rule that would give government shelters permission to regulate their inhabitants based on their sexual orientations is also under scrutiny.

"They try take those moments to ridicule people, because they've probably read Saul Alinsky's book and they know that's one of the rules," Carson said to The Hill. "It's just so silly."

Alinsky, a social activist and community organizer, who advocated for impoverished communities, wrote books such as "Reveille for Radicals." 

"I just hope for the sake of our young people and for the sake of our nation in general that we can move beyond the silliness and actually begin to address the problems that affect us," he added.

SEE ALSO: HUD Secretary Ben Carson was asked about REOs in a congressional hearing. He thought the question was about Oreo cookies.

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This is how insurance is changing for gig workers and freelancers

Wed, 05/22/2019 - 6:02pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

The gig economy is becoming a core element of the labor market, pushed to the fore by platforms like Uber and Airbnb. Gig economy workers are freelancers, such as journalists who don’t work for one publication directly, freelance developers, drivers on platforms like Uber and Grab, and consumers who rent out their apartments via Airbnb or other home-sharing sites.

Gig economy workers are not employed by these platforms, and therefore typically don't receive conventional employee perks, such as insurance or retirement options. This has created a lucrative opportunity to provide tailored insurance policies for the gig economy. 

A number of insurtech startups — including UK-based Dinghy, which focuses on liability insurance, and US-based Slice, which provides on-demand insurance for a range of areas — have moved to capitalize on this new segment of the labor market. These companies have been busy finding new ways to personalize insurance products by incorporating emerging technologies, including AI and chatbots, to target the gig economy.

In this report, Business Insider Intelligence examines how insurtechs have begun addressing the gig economy, the kinds of policies they are offering, and how incumbents can tap the market themselves. We have opted to focus on three areas of insurance particularly relevant to the gig economy: vehicle insurance, home insurance, and equipment and liability insurance.

While every consumer needs health insurance, there are already a number of insurtechs and incumbent insurers that offer policies for individuals. However, when it comes to insuring work equipment or other utilities for freelancers, it's much more difficult to find suitable coverage. As such, this is the gap in the market where we see the most opportunity to deploy new products.

The companies mentioned in this report are: Airbnb, Deliveroo, Dinghy, Grab, Progressive, Slice, Uber, Urban Jungle, and Zego.

Here are some of the key takeaways from the report:

  • By 2027, the majority of the US workforce will work as freelancers, per Upwork and Freelancer Union, though not all of these workers will take part in the gig economy full time.
  • By personalizing policies for gig economy workers, insurtechs have been able to tap this opportunity early. 
  • A number of other insurtechs, including Slice and UK-based Zego, offer temporary vehicle insurance, which users can switch on and off, depending on when they are working.
  • Slice has also developed a new insurance model that combines traditional home insurance with business coverage for temporary use.
  • Other freelancers like photojournalists need insurance for their camera, for example, a coverage area that Dinghy has tackled.
  • Incumbent insurers have a huge opportunity to leverage their reach and well-known brands to pull in the gig economy and secure a share of this growing segment — and partnering with startups might be the best approach.

 In full, the report:

  • Details what the gig economy landscape looks like in different markets.
  • Explains how different insurtechs are tackling the gig economy with new personalized policies.
  • Highlights possible pain points for incumbents when trying to enter this market.
  • Discusses how incumbents can get a piece of the pie by partnering with startups.
Get the insurtech and the gig economy

 

SEE ALSO: These were the biggest developments in the global fintech ecosystem over the last 12 months

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STARTUPS TO WATCH: Here are the startups VCs are betting on in every corner of tech

Wed, 05/22/2019 - 5:00pm

  • New startups launch in tech ever week, while billions of dollars are invested in startups every year.
  • Many of these startups never get off the ground. But some make their employees and investors millionaires.
  • Business Insider regularly lists startups to watch in different areas of tech. You can read them all by subscribing to BI Prime.
Here are the startups to watch in:

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THE EVOLUTION OF THE US NEOBANK MARKET: Why the US digital-only banking space may finally be poised for the spotlight (GS, JPM)

Wed, 05/22/2019 - 4:04pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

Neobanks, digital-only banks that aren’t saddled by traditional banking technology and costly networks of physical branches, have been working to redefine retail banking in major markets around the world.

Driven by innovation-friendly regulatory reforms, these companies have especially gained traction in Europe over the last three years. While the US is home to some of the oldest neobanks — including Simple, which set up shop in 2009, and Moven, which was founded in 2011 — the country's neobank ecosystem has lagged behind its European counterpart.

That’s largely because of an onerous regulatory regime, which has made it very difficult to obtain a banking license, and the entrenched position incumbents hold in the financial lives of US consumers. Navigating the tedious and costly scheme for obtaining a banking charter and appropriate approvals has been a major stumbling block for the country’s digital banking upstarts. However, developments over the past year suggest these startups are finally poised for the spotlight in the US. 

In this report, Business Insider Intelligence maps out the factors contributing to this shifting tide, examines how key players are positioning themselves to take advantage, and explores how incumbents can embark on their own digital transformations to stave off disruption.

The companies mentioned in this report are: Aspiration, Chime, Goldman Sachs' Marcus, JPMorgan Chase's Finn, N26, and Revolut. 

Here are some of the key takeaways from the report:

  • Despite lagging behind Europe, recent developments suggest that neobanks are finally ready for the spotlight in the US.
  • Three distinct influences are responsible for creating the fertile ground for this evolution: regulation, shifting consumer attitudes, and the activity of incumbent banks.
  • Among those driving this evolution in the US are foreign neobanks including Germany’s N26 and UK-based Revolut.
  • Meanwhile, two notable incumbent-owned outfits have deployed amid great fanfare: Marcus by Goldman Sachs and Finn by Chase. 
  • In this increasingly competitive landscape, incumbent banks have a range of strategic options at their disposal, including overhauling their entire business for the digital era.

 In full, the report:

  • Details the factors contributing to a shift in the US' neobank market.
  • Explains the different operating models neobanks in the US are deploying to roll out their services and meet consumer demands.
  • Highlights how incumbent banks are tapping into the advantages offered by stand-alone digital outfits. 
  • Discusses the key strategies established players need to deploy to remain relevant in the US' increasingly digital banking landscape.

Interested in getting the full report? Here are two ways to access it:

  1. Purchase & download the full report from our research store. >>Purchase & Download Now
  2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now

The choice is yours. But however you decide to acquire this report, you've given yourself a powerful advantage in your understanding of the fast-moving world of Fintech.

SEE ALSO: Latest fintech industry trends, technologies and research from our ecosystem report

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Tesla closes at a 2 1/2-year low after Wall Street unleashes scathing new research on the electric-car maker's troubles (TSLA)

Wed, 05/22/2019 - 4:01pm

  • Tesla shares closed at a new 2 1/2-year low on Wednesday after two Wall Street analysts released scathing reports about the state of the electric-car maker.
  • Citi cut its price target, and Bank of America Merrill Lynch said the company's losses and cash burn rate are "not turning a corner on a sustainable basis."
  • Watch Tesla trade live.

Tesla shares closed at their lowest level in 2 1/2 years on Wednesday after two prominent Wall Street firms weighed in on what analysts describe as the electric-car maker's dire financial position.

Bank of America Merrill Lynch and Citi analysts each issued critical reports assessing the stock's recent pullback amid a flurry of investor worries, sending shares lower by 6% to close out at $192.73 — a level last seen in December 2016.

Their commentary built on days of intense selling pressure, with shares down 16% over the past week. Underlying demand concerns, free-cash-flow worries persisting despite Tesla's recent capital raise, and a leaked internal email from CEO Elon Musk that addressed employee expenses were all top of mind for BAML and Citi analysts.

"With fundamentals deteriorating, specifically deliveries/production that are starting to stall as well as losses/cash burn that are not turning a corner on a sustainable basis, some of these optimists now appear to be taking a much more pessimistic stance, with the stock breaking down in recent days," BAML analysts led by John Murphy wrote to clients on Wednesday.

The analysts, who carry an "underperform" rating and a price target of $225 — 15% above where shares were trading on Friday — said much of the recent pressure on the stock appears to be driven by "shorts pressing aggressively, as the stock (and story, to some extent) was already breaking down." 

Read more: Tesla's plunging stock has handed Elon Musk's most loathed enemies, short sellers, $1 billion of profits in May

They also said short interest is approaching a two-year high. Indeed, Tesla short sellers are on track for one of their most profitable months in three years, according to an analysis from the financial-analytics firm S3 Partners.

BAML's analysts questioned Tesla's path to becoming a "self-funding entity," along with its longer-term profitability, and maintained their negative rating.

Meanwhile, the Citi analyst Itay Michaeli, who has rated Tesla a "sell/high risk" stock since last September, cut his price target to $191 from $238 and reduced his earnings estimates.

"The recent capital raise was a positive step but won't necessarily get the balance sheet out of the woods if Tesla cannot achieve FCF targets," Michaeli wrote.

"So the recent reported internal memo, which seemingly called into question prior guidance, didn't help the risk/reward calculus. The implications can be serious, since an automaker's balance sheet is always subject to the confidence 'spiral' risk," he added.

The two reports followed other Wall Street commentary addressing similar issues. On Tuesday, Morgan Stanley's longtime auto analyst, Adam Jonas, cut his bear-case target on the stock to $10 after already cutting his base-case price target four times this year.

And on Monday, the Wedbush analyst Dan Ives cut his price target and used particularly urgent language to describe Tesla's position, calling it a "code red situation." He said the company has been focusing on insurance, robo-taxis, and other sci-fi projects, when it should instead be "shoring up core demand for Model 3 and simplifying its business model and expense structure."

Tesla shares have fallen 42% this year.

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

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I signed up for renters insurance through millennial-friendly Lemonade, and it felt more like ordering dinner on Seamless than protecting my home

Wed, 05/22/2019 - 3:07pm

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, but our reporting and recommendations are always independent and objective.

  • Lemonade is a millennial-friendly insurance company that uses artificial intelligence to give quotes and evaluate claims quickly.
  • Its renters insurance policies cover personal property, personal liability, loss of use, and medical payments.
  • Because Lemonade's cofounders don't come from the insurance world, it's an insurance product that feels accessible, more like ordering dinner online than protecting your home from future damage.
  • Lemonade also gathers a lot of data on its users, thanks to its artificial intelligence, and donates some of the money that goes unclaimed by policy holders every year to charity. 
  • Learn more about renters insurance with Lemonade »

I consider myself moderately prepared at all times.

I bring my umbrella with me when it's foggy outside, mostly. When I pack for trips, I include double the pairs of underwear I'll need — but usually forget my toothbrush. A container of floss lives in my backpack, though I rarely remember to transfer it to my purse.

All this is to say, I've thought before about buying renter's insurance. But it was my partner who took the plunge and signed us up for Lemonade.

Lemonade is an insurance company that boasts the ability to process claims in just three seconds, thanks to its artificial intelligence software. Luckily, we haven't had to test this turnover time yet.

Neither of Lemonade's cofounders, Daniel Schreiber and Shai Wininger, were in the insurance business before starting the company, so it feels different from using something like State Farm. It's more like using a tech service that targets millennials, akin to a Seamless or a Capsule.  

This translates to Lemonade's user-friendly interface on both its website and app. To see how much we'd have to pay for renter's insurance for our one-bedroom Brooklyn apartment, we had to start by answering a series of straightforward questions. Do you have roommates? Yes. A fire alarm? Yes. A dog? No, unfortunately. That was pretty much it. Then we got our quote: $10.25 per month. Split between the two of us, this is very manageable.

That base amount could change depending on what kind of items/events we wanted to insure. Again, the interface for adjusting this is friendly — even, dare I say, fun.

Lemonade starts you out with a set amount of money you're insured for in the categories of personal property, personal liability (if someone gets injured in your apartment and sues), loss of use (a hotel stay if your apartment becomes unlivable), and medical payments (if someone gets injured in your apartment and you contribute to their medical costs).

Using plus and minus sign buttons, you can see how much your monthly payment changes depending on how you adjust each category.

For example, for $10.25 per month, I'm insured for $30,000 worth of personal property. If I decide that my property isn't worth that much, I can hit the minus and go down to $20,000. That brings my cost per month to $7.42.

But maybe I want to be covered for more than $6,000 worth of hotel stays if something drastic happens to my apartment. I'm more a Four Seasons than a Holiday Inn type, so I want $12,000 to pay for my room. From the original $10.25 per month, that only brings me up to $11.09.

You can also add extra coverage for valuables like fine art, expensive jewelry, bicycles, and musical instruments. One day I might have some of these things, but for now, it's irrelevant. My partner and I ended up sticking with the $10.25 monthly fee (I'm not really a Four Seasons type).

However, we did have to tack on an extra $1.67 to ensure us both — the tax for the unwed. Spouses get to share Lemonade's renter's insurance for free. If we were roommates who are not romantically involved, we'd each have to pay for entirely separate insurance policies. This brought us up to $11.92 per month, so $5.96 each.

I recently read an article by Business Insider's Tanza Loudenback, who pays $11.91 per month for renter's insurance through State Farm. That would compare almost exactly to Lemonade, if it weren't for the fact that the State Farm insurance originally started at $17.24 per plan and went down after two years.

My hesitation with cheap, easy-to-use tech services like Lemonade lies in their data collection. In a Tech Crunch Disrupt talk this past September, Lemonade CEO Schreiber said that while his company is at a data disadvantage compared to insurance companies that have been around for decades, Lemonade "gathers about 100 times more data for every customer" because of all the digital interactions that occur between customers and the site's chatbots.

Sure, predictive data is how insurance companies function, but for the paranoid, hearing how much information Lemonade is getting from its customers sounds unsettling.

The service makes up for this somewhat by donating some of the money that isn't claimed by policyholders to nonprofits at the end of each year. We chose for our unclaimed money to go to Women in Need NYC, a nonprofit that provides safe housing and services to homeless women.

Note that Lemonade isn't available everywhere in the US. As of May 2019, it's offered to residents of New York, California, Illinois, Texas, Rhode Island, New Jersey, Nevada, Ohio, Georgia, Pennsylvania, Maryland, Iowa, Wisconsin, Arizona, New Mexico, Michigan, Oregon, Arkansas, Connecticut, Indiana, Tennessee, Virginia, and Washington, DC.

In the end, my partner and I ended up going with Lemonade because it was so approachable. It didn't feel like we were taking the terrifyingly adult leap of insuring our belongings in case of an emergency. It felt like we were ordering dinner on Seamless — except instead of getting chicken and broccoli, we get reimbursed if a leak in our apartment damages our couch.

Learn more about renters insurance from Lemonade »

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Top investors say these 11 buzzy, under-the-radar consumer cannabis startups are set to raise fresh rounds and blow up this year

Wed, 05/22/2019 - 2:58pm

  • Investors are pouring money into consumer cannabis startups.
  • While it's still early innings, investors are trying to figure out which brands will take off and capture significant market share.
  • We asked some of the top cannabis investors to pick out the consumer cannabis brands they think will blow up in 2019. 

Investors are pouring money into consumer cannabis startups.

While the cannabis industry is still nascent — THC, the main psychoactive component of the plant isn't federally legal in the US — consumer brands are rapidly carving out market share in an attempt to dominate the early innings of what some Wall Street analysts say could be a $194 billion global industry by 2030.

But figuring out what consumers want out of a cannabis brand is an ongoing challenge, many of the investors have told Business Insider. Without historical data to go off of, it boils down to somewhat of a guessing game with investors using their network — and their intuition — to help figure out the right bets.

Read more: The top 12 venture-capital firms making deals in the booming cannabis industry that's set to skyrocket to $75 billion

That, however, hasn't stopped VCs from dumping money into startups that they feel will win the battle. There are some trends emerging too: for one, there's been an explosion in cannabis startups focused on the higher-end female crowd, like High Beauty, which makes luxury CBD-based skincare products.

Others, like Dosist, are targeting newer consumers who want to use cannabis to help them sleep, relax, or even get aroused by precisely controlling the dosage and chemical profiles of the cannabis strains they offer in their vape pens.

And investing in cannabis does come with some specific challenges for the mainstream VCs. Many of the larger VC funds are unable to participate in the industry as they're backed by institutions like pension funds who don't want to risk a gamble on a federally illegal industry. 

That's carved out an area for niche funds that focus specifically on cannabis to access the most deals.

Business Insider surveyed 12 of the top cannabis investors about which startups they think will blow up or raise fresh rounds this year. 

Here are their picks:

SEE ALSO: Top cannabis investors reveal where they're placing bets, but say there's 'pain to come' in the crowded CBD space

Level Blends

Startup: Level Blends

Recommended by: Vikas Desai, managing partner at Welcan Capital

Relationship: None

What it does: Level Blends is a San Francisco-based company that develops and sells vape cartridges, sprays, and sublingual tablets that contain both CBD and THC.

Why it's hot: "I'm very bullish on the sublingual category within cannabis," said Desai. "Consumers continue to look for other form factors and delivery methods beyond combustion, vaping and edibles. Sublinguals are easy, discreet ways to offer a faster onset time and offset time in a discreet and controlled manner."



Mary's Medicinals

Startup: Mary's Medicinals  

Recommended by: Todd Harrison, chief investment officer at CB1 Capital

Relationship: Investor

What it does: Mary's Medicinals CBD and THC containing consumer products, including vapes and tablets, as well as cosmetics and pet care products. The startup also has a line of CBD-infused women's cosmetics at Saks Fifth Avenue.

Why it's hot: "In addition to a growing chorus of raving fans, the company is exploring use-cases with the minor cannabinoids, which promise an array of new therapeutic benefits," said Harrison. 



Leune

Startup: Leune

Recommended by: Karan Wadhera, managing partner at Casa Verde

Relationship: Personal Investor 

What it does: Leune is a female-founded, Los Angeles-based cannabis brand that sells pre-rolled joints and vaporizer pens. 

Why it's hot: Leune "represents the Cannabis 3.0 consumer," said Wadhera. "It has beautiful, small footprint packaging, high aesthetic, and a consistent quality product."



Canndescent

Startup: Canndescent

Investors: Phyto Partners, Merida Capital Altitude Investment Management 

Recommended by: Larry Schnurmacher, managing partner at Phyto Partners

What it does: Founded by a Harvard MBA, Canndescent is one of the original luxury cannabis brands. The California-based company sells pre-rolled joints as well as marijuana flower.

Why it's hot: Canndescent is the "#1 luxury cannabis brand," said Schnurmacher. "They were the first to abandon traditional strain names and direct their product to a high-end market."



The Lord Jones

Startup: The Lord Jones

Recommended by: Emily Paxhia, founding partner at Poseidon Asset Management

Relationship: None

What it does: The Lord Jones makes CBD-infused skincare products, body lotions, oils, and tinctures. The company has recently inked a partnership with The Standard Hotel group and SoulCycle. 

Why it's hot: "Lord Jones is recently smart about leveraging e-commerce channels," said Paxhia. "They're positioned really well with their partnerships and capture lots of market share." 



Prima

Startup: prima

Investors: Greycroft Ventures, Lerer Hippeau

Recommended by: Dana Settle, partner at Greycroft Ventures

Recent raise: $3.3 million 

What it does: Prima is a California-based, consumer CBD startup founded by The Honest Company co-founder Christopher Gavigan. The company sells CBD oils and skincare products online.

Why it's hot: Settle told Business Insider that she views CBD as a rapidly growing health-and-wellness category. "It's almost too bad that CBD is inextricably linked to cannabis," she said, "because it has such powerful healing qualities to it."

 

 



Cann

Startup: Cann

Recommended by: Sean Stiefel, CEO at Navy Capital

Relationship: Investor

What it does: Cann makes low-dose CBD and THC-infused beverages for the California market.

Why it's hot: Cann is the "most exciting low-dose beverage concept we have seen," said Stiefel. "Awesome branding, and it has two founders from Harvard Business School and Stanford Graduate School of Business who worked at Bain." 



Old Pal

Startup: Old Pal

Investors: Canopy Rivers

Recommended by: Narbe Alexandrian, president at Canopy Rivers

What it does: Old Pal is a low-cost cannabis brand that grows and distributes raw flower and pre-rolled joints in the California market. 

Why it's hot: "They are proudly trying to capture the low end of the market by licensing their brand to producers for low-priced cannabis," said Alexandrian. They have the highest volume of sales in California, according to data from Headset, said Alexandrian, and a "very strong marketing background has led to Old Pal becoming an immediate success."



Dosist

Startup: Dosist

Investors: White Owl Capital Partners, others 

Recommended by: Vikas Desai, partner at Welcan Capital

Relationship: None

What it does: Dosist makes precision-controlled THC and CBD vaporizers that are designed for specific moods or effects. 

Why it's hot: Dosist products are top sellers in the California market, said Desai. Plus, Desai said he expects the company will raise a "very large round" next time they hit the funding circuit.



High Beauty

Startup: High Beauty

Recommended by: Narbe Alexandrian, president of Canopy Rivers

Relationship: Investor

What it does: High Beauty makes and distributes high-end cannabis-based skincare products focused on female consumers.

Why it's hot: "CBD products have difficulties scaling across states and countries due to the inherent legality of the products," said Alexandrian. "High Beauty has created a line of hemp seed oil products (branded as cannabis) that are currently being sold internationally. Their strategy of building an international brand first and then adding CBD, is a strategy that can win. They've been showcased in dozens of publications, in the Oscars celebrity swag bag and had a big presence at Coachella."



Caliva

Startup: Caliva

Investors: Joe Montana, Carol Bartz, other angel investors 

Recommended by: Carol Bartz, former Yahoo CEO and angel investor

Recent raise: $75 million

What it does: Caliva is a dispensary chain and marijuana brand in California that sells both CBD and THC containing products in brick-and-mortar stores and online.

Why it's hot: "Their philosophy and aspiration to be the number one trusted lifestyle brand in cannabis resonates with me," said Bartz. "Caliva is setting out to make it the highest quality, safest, and most reliable cannabis products and to provide information and education to customers to make it all accessible." 



2 years after angry Silicon Valley locals chanted 'build a wall' to keep the homeless out, Mountain View is reportedly cracking down on a growing RV camp outside Google's HQ (GOOG, GOOGL)

Wed, 05/22/2019 - 2:52pm

  • Staggering rent prices in Mountain View, California have forced some residents out of apartments or houses and into more temporary dwellings, like vans or RVs.
  • Resentment from local homeowners has risen as the number of vehicles lining the streets continues to grow, and a "crackdown" on the city's homelessness has begun, according to a recent report
  • The most immediate concern for those living in the motor homes and trailers was a recent vote by the Mountain View city council banning vehicles taller than 6 or 7 feet tall from parking overnight on public roads.
  • As reported by Bloomberg, some of these residents whose future living situations are now limbo work at Silicon Valley's largest companies, like Google and Lyft. 
  • Visit Business Insider's homepage for more stories.

In Mountain View, California — where Google and several Silicon Valley tech companies call home — staggering rent prices have forced some residents out of apartments or houses and into more temporary dwellings, like vans or RVs.

Meanwhile, resentment from local homeowners has risen as the number of vehicles lining the streets continues to grow, and a "crackdown" on the city's homeless has begun, according to a recent Bloomberg report

The most immediate concern for those living in the motor homes and trailers was a recent vote by the Mountain View city council in March, which bans vehicles taller than 6 or 7 feet tall from parking overnight on public roads. According to the Mountain View Voice, that ban won't go into effect before late 2020 to help the city and its residents prepare. Still, concerns amongst the RV-dwellers is reaching new heights and major questions of where they will go remain unanswered. 

Read more: What life is really like in the most expensive place in the US, where the typical home costs $1 million and it feels like everyone works in tech

As reported by Bloomberg, some of these residents whose future living situations are now in limbo work at some of Silicon Valley's largest companies. One person interviewed is a security guard at Google who didn't want to spend almost her entire paycheck on the $2,500 per month it would cost to rent an apartment. Instead, she chose to rent an RV for $800.

Another was a Lyft driver who lives in an RV with his wife. Together they make around $100,000 per year, but after doing the math on what an apartment would cost in the area, decided they would rather be able to save for their future than spend it all on rent.

Major tech companies, like Google, often get the blame for putting increased demand on the housing market, and thus causing rent prices to skyrocket. Google specifically has donated millions towards homelessness initiatives in the Mountain View area, according to Bloomberg, including a local apartment development that offers affordable housing options. The 67 units in the project, however, will only put a small dent in the housing crisis local residents are facing. 

The issue also worsens when angry Silicon Valley residents are brought into the equation. According to Bloomberg, two years ago at a city hall meeting in nearby San Jose, those who opposed building more affordable housing chanted "build a wall," in reference to keeping the homeless out of their town. 

Read the full Bloomberg report here.

Do you work at Google? Got a tip? Contact this reporter via Signal or WhatsApp at +1 (209) 730-3387 using a non-work phone, email at nbastone@businessinsider.com, Telegram at nickbastone, or Twitter DM at @nickbastone.

 

SEE ALSO: Disappointing photos show what living in San Francisco on a tech salary really looks like

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How tech giants are using their reach and digital prowess to take on traditional banks (GOOG, GOOGL, AAPL, FB, MSFT, AMZN)

Tue, 05/21/2019 - 11:05pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

As headlines like "Amazon Is Secretly Becoming a Bank" and "Google Wants to Be a Bank Now" increasingly crop up in the news, tech giants are coming into the spotlight as the next potential payments disruptors.

And with these firms' broad reach and hefty resources, the possibility that they'll descend on financial services is a hard narrative to shy away from. To mitigate potential losses under this scenario, traditional players will have to grasp not only the level of the threat, but also which segments of the financial industry are most at risk of disruption.

Google, Apple, Facebook, Amazon, and Microsoft, collectively known as GAFAM, are already active investors in the payments industry, and they're slowly encroaching on legacy providers' core offerings. Each of these five companies has introduced features and offerings that have the potential to disrupt specific parts of the banking system. And we expect a plethora of additional offerings to hit the market as these companies look to build out their ecosystems.

However, it remains unlikely that any of these firms will become full-blown banks or entirely upend incumbents, due to regulatory barriers and the entrenched positions of big banks. Moreover, consumers still trust traditional firms first and foremost with their financial data. That means these companies are far more likely to rattle the cages of incumbents than they are to cause their total demise. That said, these companies have a proven capacity to revolutionize industries, making their entry into payments critical to watch for legacy players, especially as their moves demonstrate an intent to be a disruptive force in the industry.

In this report, Business Insider Intelligence analyzes the current impact GAFAM is having on the financial services industry, and the strengths and weaknesses of each firm's position in payments. We also discuss the barriers these companies face as they push deeper into financial services, as well as which aspects of a bank’s core business provide the biggest opportunities for the new players. Lastly, we assess these companies' future potential in payments and the broader financial services industry, and examine ways incumbents can manage the threat.

Here are some of the key takeaways: 

  • GAFAM has been actively encroaching on the payments space. This includes offering mobile wallets for in-store and online payments, peer-to-peer money transfer services, and even loans for small- and medium-sized businesses. 
  • These firms' broad reach and hefty resources have put them in a strong position to take on legacy players. GAFAM has products that have been adopted by millions of users, and in some cases, billions. They also have access to a tremendous amount of capital — Apple, Microsoft, and Google had over $400 billion combined in cash at the end of 2016.
  • However, these firms have to overcome major barriers to compete against legacy players, which includes regulation and trust. For example, 60% of respondents to a Business Insider Intelligence survey stated that they trust their bank most to provide them financial services.
  •  As a result of these barriers, it's more likely that GAFAM will make a dent in very specific segments of the financial services industry rather than completely disrupt it. 

In full, the report:

  • Explains what GAFAM's done to place themselves in a position to be the next potential payments disruptors.
  • Breaks down the strengths and weaknesses of each company as it relates to their ability to build out an extensive financial ecosystem. 
  • Looks at the potential barriers that could limit GAFAM's ability to capture a significant share of the payments industry from traditional players. 
  • Identifies what strategies legacy players will have to deploy to mitigate the threat by these tech giants.
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This Silicon Valley founder is an expert in designing presentations. Here's what he thinks your startup needs to include in a pitch deck — and what you should leave out.

Tue, 05/21/2019 - 8:37pm

  • Mitch Grasso has some advice for founders on how to design their pitch decks and what their presentations should include.
  • Grasso is a former software designer and a serial entrepreneur who's raised millions of dollars in venture funding.
  • Two of his startups have focused on offering presentation software.
  • Although he thinks pitch decks are important, he thinks founders' stories — and their ability to convey them — are more consequential than the presentations they compile.
  • Visit Business Insider's homepage for more stories.

Mitch Grasso has made a career out of visualizing ideas and helping others do the same.

Grasso started his career as a software designer. He then became a Silicon Valley entrepreneur, using presentations to raise millions of dollars in venture capital. Two of the startups he founded, including his latest, Beautiful.AI, have focused on offering software that allows people to create and present slide shows, including the so-called pitch deck slideshows that startups put together to win over potential investors. 

So you might imagine that Grasso has some well-considered ideas on what makes for a perfect pitch deck. Perhaps surprisingly, when it comes to investor presentations, Grasso thinks substance is much more important than style.

"Every pitch, every presentation is primarily about telling a story and not about designing beautiful slides, necessarily," Grasso told Business Insider in an interview earlier this month. "That's something you don't want to be worrying about."

From a design standpoint, Grasso's chief advice to founders is to keep their presentations simple and legible. The decks should look polished, but not overproduced, he said.

"Presentations aren't really an opportunity for personal expression," he said. Instead, he continued, they're "about communicating ideas."

"You don't want it to be incredibly creative, because then it's distracting," he said. "You don't want it to be incredibly terrible, because then it's distracting as well."

Here's what to include in a pitch deck

At least for entrepreneurs whose companies are still in their early stages, there are certain elements Grasso thinks they should need to include in their decks. Among the sections he thinks they need to include are ones that show:

  • Founder-market fit. Most decks include a slide showing the team the entrepreneur has put together for his or her startup. But that's not enough, Grasso said. The presentation needs to explain why this team is best suited to solve this problem or pursue this opportunity, he said.

    "What is your background, what is your story, what is your insight, and what's your experience that makes you better suited for this?" he said.

  • Product differentiation. The deck shouldn't just show a company's product or service or illustrate how it works, Grasso said. Instead, the presentation needs to explain why the product is different, why it's better than anything else on the market, he said.

    "It's got to be big. It's got to have a big opportunity," Grasso said.

  • Why now. Many of the venture capitalists Grasso has worked with have said this slide is essential. The presentation should explain why the timing is right for the startup's founding idea or opportunity — and why it couldn't have been successful before then.

"All this stuff about traction and go-to-market and business plans, that becomes important as you move further along, but in the earlier stage, it's more about that vision," Grasso said. He continued: "It's about convincing rather than showing the data.

Here's what to leave out

There are other things that Grasso would discourage founders from including in their pitch decks, at least when their companies are still in their early stages. Among them:

  • Potential acquirers. It's bad form to walk into a pitch meeting talking about what companies you think could potentially buy your startup, he said. Doing so sends a signal to investors that the entrepreneur isn't committed to the company long term, he said.
  • Top-down market analyses. Many founders talk about the total potential market for their product — usually some huge number — and pitch their companies on the idea that they could capture some significant fraction of it. Such analyses, especially when done by an early-stage company, is often dismissed Grasso said. Founders should instead focus on a bottoms-up analysis, taking a look at how much they charge for their product and how many customers they could realistically convince to buy it, he said.
  • The five-year business plan. This slide is standard fare in pitch decks, but at least with nascent startups, it's kind of silly, Grasso said. It puts founders — whose companies may not even have a launched product yet, much less revenue — in the position of just making up numbers, he said.

    "I've done that many times in the past, and it's always sort of scoffed at," Grasso said.

Ironically, Grasso didn't prepare a formal pitch deck when he raised money for Beautiful.AI. Instead, he used the company's software to design one on the fly as a way of demonstrating the capabilities of its software.

Read this: This serial founder thinks pitch decks are passé. Here's what his startup used instead to raise $45 million in new funding.

Even if he didn't need one this time around, Grasso thinks pitch decks remain important for founders, especially new ones who don't have a reputation to lean on or established relationships with investors. But they're not all-important; entrepreneurs should realize that they and their story trump their slide shows, he said.

"At the end of the day, the pitch is about you, and if you can't convince somebody of your idea without a pitch deck, then you probably don't know your idea well enough," he said.

Got a tip about a tech company? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Here's the pitch deck corporate travel service Lola.com used to raise $37 million in new funds

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These are the top 15 US banks ranked by the mobile banking features consumers value most

Tue, 05/21/2019 - 8:02pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. This report is exclusively available to enterprise subscribers. To learn more about getting access to this report, email Senior Account Executive Chris Roth at croth@businessinsider.com, or check to see if your company already has access

New data shows that mobile features have become a key factor that customers weigh when choosing a bank. 

In Business Insider Intelligence's second annual Mobile Banking Competitive Edge study, 64% of mobile banking users said that they would research a bank's mobile banking capabilities before opening an account with them. And 61% said that they would switch banks if their bank offered a poor mobile banking experience.

For channel strategists, the challenge in attracting mobile-minded customers is knowing when to bet budgets and political capital on developing emerging features. It's complicated by most flashy features — such as voice assistants, smartwatch banking, and bank-offered mobile wallets — being deemed a "must" by analysts, media, and rival banking executives. 

The Mobile Banking Competitive Edge Report uses data to inform channel investment decisions by highlighting which mobile banking features are most valuable to customers. Our study has data on consumer demand for 33 in-demand mobile capabilities across six key categories. 

Using that consumer data, the study benchmarks the largest 20 banks and credit unions in the US by whether they offer the cutting-edge mobile features that customers say they care about most. What sets our benchmark apart is that it weights every feature according to customer demand data — not subjective analyst opinion.  

Channel strategists within financial institutions use our report to see which innovative features they should prioritize in development pipelines and to find out how they compare with rival banks and credit unions in offering those features.

Business Insider Intelligence fielded the Mobile Banking Competitive Edge Study to members of its proprietary panel in August 2018, reaching over 1,200 US consumers — primarily handpicked digital professionals and early-adopters, making our sample a sensitive indicator of emerging features. 

Here are a few key takeaways from the report:

  • Citi snagged first overall. The bank led the account access section, tied for first in account management, and ranked highly in all the other categories of the study. Wells Fargo took second place, leading in security and control and transfers. USAA came in third, NFCU was fourth, and Bank of America rounded out the top five.
  • Demand for security features is sizzling. Following a year of huge breaches being announced at companies like Facebook and Google, consumers' security concerns jumped to become the most important category. The category included the No. 1 feature overall: the ability to turn a payment card on or off. 
  • Digital money management features are also highly demanded. Chase and Wells Fargo may be onto something with their millennial-focused banking apps, Finn and Greenhouse, as the generation had sky-high demand for the six features in the category. The most popular feature in the category was the ability to separate recurring payments, such as Netflix and gym memberships.

 In full, the report:

  • Shows how 33 mobile features stack up according to how valuable customers say they are.
  • Ranks the top 20 US banks and credit unions on whether they offer each of those features.
  • Analyzes how demographics effect demand for different mobile features.
  • Provides strategies for banks to best attract and retain customers with mobile features.
  • Contains 63 pages and 30 figures.

The full report is available to Business Insider Intelligence enterprise clients. To learn more about this report, email Senior Account Executive Chris Roth (croth@businessinsider.com).  

Business Insider Intelligence's Mobile Banking Competitive Edge study includes: Ally, Bank of America, BB&T, BBVA Compass, BMO Harris, Capital One, Chase, Citibank, Fifth Third, HSBC, KeyBank, Navy Federal Credit Union, PNC, Regions, SunTrust, TD, Union Bank, US Bank, USAA, and Wells Fargo.

SEE ALSO: These are the trends creating new winners and losers in the card-processing ecosystem

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Google kept unencrypted, plaintext copies of some G suite business customer passwords on its servers for more than ten years (GOOG, GOOGL)

Tue, 05/21/2019 - 7:05pm

  • Google accidentally kept un-encrypted user passwords belonging to its enterprise customers on its internal servers for a period of more than a decade, the company revealed in a corporate blog post on Tuesday. 
  • "We recently notified a subset of our enterprise G Suite customers that some passwords were stored in our encrypted internal systems unhashed," Suzanne Frey, Google Cloud VP of Engineering wrote. 
  • The implementation error causing the issue happened 2005 and according to TechCrunch, wasn't discovered until April of this year. 
  • Google did not estimate how many user accounts were impacted, nor did the company answer Business Insider's question regarding the number of improperly stored passwords. 
  • The company said "we have seen no evidence of improper access to or misuse of the affected passwords." 
  • Visit Business Insider's homepage for more stories.

An undisclosed number of Google enterprise users have had their passwords stored in plaintext on the tech giant's internal systems for over a decade, according to a corporate blog post on Tuesday. 

"We recently notified a subset of our enterprise G Suite customers that some passwords were stored in our encrypted internal systems unhashed," Suzanne Frey, Google Cloud VP of Engineering wrote. 

Google said the issue stemmed from giving account administrators — for instance, a company's head of IT — the ability to manually set passwords for employees — say, on an someone's first day. But back in 2005, an error was made, Google said, and the admin portal ended up storing unhashed copies of passwords on the tech giant's encrypted servers. In other words, for the past 14 years, some G Suite users have had their corporate passwords stored in such a way that would have been readable by authorized personnel, like account administrators or certain Google employees. 

Google first found the issue this April and said it has since been fixed. In its blog post Tuesday, Google did not estimate how many user accounts were impacted, nor did the company answer Business Insider's question regarding that number. 

This February, Google announced that its G Suite platform — which includes apps like Gmail, Docs, and Hangouts — has over 5 million paying businesses

"To be clear, these passwords remained in our secure encrypted infrastructure," Frey wrote. "This issue has been fixed and we have seen no evidence of improper access to or misuse of the affected passwords." 

Google said G Suite administrators have been notified and that it will update passwords that have not already been changed. It also said that none of its free consumer accounts were included in the mishap. 

With Tuesday's news, Google joins other tech giants — most notably Facebook — that have struggled to keep user passwords and other data safe and secured. In March, Facebook admitted to storing hundreds of millions of user passwords in plaintext for years, available to be seen by any of its 20,000 employees. 

Do you work at Google? Got a tip? Contact this reporter via Signal or WhatsApp at +1 (209) 730-3387 using a non-work phone, email at nbastone@businessinsider.com, Telegram at nickbastone, or Twitter DM at @nickbastone.

SEE ALSO: Google has more control over Android than we realize, and right now, companies like Huawei have no other choice but to accept that

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Beyond Bitcoin: Here are some of the new use cases for distributed ledger technology

Tue, 05/21/2019 - 7:01pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

Of the many technologies reshaping the world economy, distributed ledger technologies (DLTs) are among the most hyped. DLTs are most often associated with cryptocurrencies like Bitcoin, but such coverage sidelines the broader use cases of DLTs, even though they stand to make a far bigger impact on the broader the financial services (FS) industry.

DLT's value lies in its ability to centralize record-keeping, while cutting out the need for authorization by an overseeing party, instead allowing a record to be confirmed by multiple parties with access to the database. This means DLTs have the potential to streamline financial institutions' (FIs) operations, boost data security, improve customer relationships, and drastically cut costs. But many FIs have struggled to implement DLTs and reap the rewards, because of organizational obstacles, but also because of issues rooted in the technology itself. There are a few players working to make the technology more usable for FIs, and progress is now being made.

In a new report, Business Insider Intelligence takes a look at what DLTs are and why they hold so much promise for FS, the sectors in which DLTs are gaining the most traction and why, and the efforts underway to remove the obstacles preventing wider DLT adoption in finance. It also examines the few FIs close to unleashing their DLT projects, and how DLTs might transform the nature of FS if adoption truly takes off. 

Here are some of the key takeaways from the report:

  • DLTs are proving attractive to FIs because of their ability to act as a single source of truth, distribute information securely, cut out middlemen, improve transaction times, and cut redundancy and costs.
  • DLTs like blockchain and smart contracts stand to save the FS industry up to $50 billion a year through improved operational efficiencies, reduced human error, and better regulatory compliance. 
  • The technology is being explored actively across FS, with trade finance, insurance, and capital markets proving especially active. Overall adoption is still low because of organizational and technical hurdles, but these are now being eliminated, promising to boost implementation.
  • A few FIs have pulled ahead of the curve and are very close to taking their DLT projects live, if they haven't already. These players can serve as useful case studies for other institutions in getting their DLT solutions live.

In full, the report:

  • Looks at what DLTs are, and why the FS industry is working hard to make use of them. 
  • Gives an overview of the financial segments which are seeing the most DLT activity, and what they stand to gain.
  • Outlines efforts being made to make DLT more approachable and usable for the FS industry.
  • Examines use cases in which FIs have managed to take their pilots live, and what they can teach their peers. 
Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to: This report and more than 250 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More

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George Soros made 8 predictions about politics, financial markets, and Facebook - here's how they turned out

Tue, 05/21/2019 - 6:34pm

  • The billionaire investor George Soros is known for making a series of predictions across topics as diverse as social-media networks, the Chinese economy, and Iranian politics.
  • Markets Insider examined eight of Soros' predictions, as well as the outcomes.
  • Visit MarketsInsider.com for more stories.

The billionaire investor George Soros is not shy about making predictions, in financial markets or otherwise. 

Soros is an investor of almost mythical status, having accumulated a fortune of nearly $40 billion from trading across currency, equity, and fixed-income markets. He started the Quantum Fund in 1973 before returning all outside capital in 2011 to focus solely on managing his own money.

Soros also has a great interest in politics, having donated the majority of his fortune to the Open Society Foundations, which he establish to promote democracy and human rights across the world.

"Once we realize that imperfect understanding is the human condition there is no shame in being wrong, only in failing to correct our mistakes," from "Soros on Soros: Staying Ahead of the Curve."

Markets Insider highlights eight of Soros' predictions — and their outcomes — below:

Democrats will win 2018 in a 'landslide'

Date: January 2018

Prediction: Soros predicted a major win for the Democrats in the 2018 elections.

"I give President Trump credit for motivating his core supporters brilliantly, but for every core supporter, he has created a greater number of core opponents who are equally strongly motivated," said the investor at the World Economic Forum.

"That is why I expect a Democratic landslide in 2018."

Outcome: Kind of correct.

The Democrats took back control of the House, gaining 41 seats.

Nancy Pelosi reclaimed the title of Speaker of the House, but the Republicans maintained control of the Senate, picking up two seats.

Soros also predicted that Trump would not be re-elected in 2020, which remains to be seen. 

Source: georgesoros.com

 



Bitcoin is a bubble

Date: January 2018

Prediction: Soros slammed cryptocurrencies as bubbles and derided bitcoin in particular.

"Cryptocurrency is a misnomer and is a typical bubble, which is always based on some kind of misunderstanding," Soros said.

"Bitcoin is not a currency because a currency is supposed to be a stable store of value and the currency that can fluctuate 25% in a day can't be used for instance to pay wages because wages drop by 25% in a day. It's a speculation. Based on a misunderstanding."

Outcome: Correct.

Bitcoin plunged 70% to a low of $3,136 in December 2018. It has since made somewhat of a recovery, more than doubling off its low, and now trades just below $8,000.

Source: Forbes 

 



The 'days are numbered' for Google and Facebook

Date: January 2018

Prediction: Facebook and Google will face a reckoning.

"Facebook and Google effectively control over half of all Internet advertising revenue," the 87-year-old told diners during a speech.

"They claim that they are merely distributors of information. The fact that they are near-monopoly distributors makes them public utilities and should subject them to more stringent regulations, aimed at preserving competition, innovation, and fair and open universal access."

Outcome: Somewhat correct.

While both Facebook and Google still exist, both companies have come under severe pressure for privacy concerns related to their business models.

Facebook, in particular, has come under attacks from Congress for the way it was used as part of Russia's interference in the 2016 presidential election.

The company's stock fell nearly 44% from its July 2018 high before recovering in 2019.

Source: georgesoros.com

 



The next financial crisis will be in Europe

Date: May 2018 

Prediction: Europe is at risk of another major financial crisis. 

"We may be heading for another major financial crisis," said Soros. "It is no longer a figure of speech to say that Europe is in existential danger; it is the harsh reality."

He added: "The euro has many unresolved problems and they must not be allowed to destroy the European Union."

Outcome: Incorrect (at least so far).

European financial markets appear subdued with Italian 10-year yields at 2.7%, only slightly higher than the US 10-year yield of 2.4%.

Source: Bloomberg



Argentina will pay back its debts

Date: August 2016

Prediction: Argentina would pay off its 2001 defaulted debt.

A lawsuit filing revealed that Quantum Partners, controlled by Soros' family office, held a position in defaulted Argentine government bonds. The defaulted debt, from 2001, was also held by billionaire and rival hedge-fund manager Paul Singer.

Outcome: Correct.

The hedge-fund investors ultimately realized a stunning return on their investments, with Singer's hedge fund, Elliot Management, reportedly pocketing over $2 billion in profits.

Soros' position was not fully disclosed.

Source: Bloomberg



The next financial crisis will be in China

Date: April 2016

Prediction: China financial crisis

China "eerily resembles what happened during the financial crisis in the U.S. in 2007-08, which was similarly fueled by credit growth," Soros said at the Asia Society.

"Most of the money that banks are supplying is needed to keep bad debts and loss-making enterprises alive."

Outcome: Incorrect (at least so far).

China's economy has slowed notably in 2018 and 2019, weighing on financial markets. However, there do not appear to be signs of a US-style crisis despite high corporate-debt levels.

Source: IndustryWeek

 



Iran will undergo a 'regime change'

Date: February 2012

Prediction: Iran's present regime is not going to last the year.

Outcome: Correct.

Hardline President Mahmoud Ahmadinejad was voted out of office in the 2012 elections as reformist Hassan Rouhani took over the presidency.

However, it was not a total regime change as Ayatollah Khamenei, in office since 1989, maintained his role as supreme leader.

Source: Tiger21.com



The British Government will devalue the pound

Date: September 1992

Prediction:

The British government would be forced to dropped out of the European Exchange Rate mechanism and devalue the pound, creating a windfall of profits for those short the currency.

Outcome: Correct (and potentially caused by his actions).

Despite hiking interest rates as high as 10% to squeeze short-sellers, the British government was forced to devalue the pound on September 16, 1992.

This was the same day Soros increased his short pound position from $1.5 billion to $10 billion. "We must have been the biggest single factor in the market in the days before the E.R.M. fell apart," The Times of London quoted Mr. Soros as saying.

"A billion is about right as an estimate of the profit, though dollars, not pounds," Soros said. The profits were attributable to funds managed by Soros and not his personal gain, as reported by the New York Times.

Source: NYTimes



SEE ALSO:

Warren Buffett made 12 predictions about bitcoin, table tennis, and his death — here's how they turned out



Escalations in Trump's trade war could wipe out $600 billion from the world economy, OECD warns

Tue, 05/21/2019 - 6:24pm

  • Further escalation in the yearlong trade war between Washington and Beijing would hammer away at growth at a time when the global economy is already set to slow.
  • If trade relations continue to deteriorate, the Organization for Economic Cooperation and Development forecasts that global gross domestic product would fall by as much as 0.7% by 2021.
  • Greater uncertainty could be particularly costly in advanced economies.
  • View Markets Insider's homepage for more stories.

Further escalation in the yearlong trade war between Washington and Beijing would hammer away at growth at a time when the global economy is already set to slow, the Organization for Economic Cooperation and Development said Tuesday.

The Paris-based think tank said in a biannual report that broader trade barriers between the largest economies would further slow trade flows and damage sentiment. The US and China have together levied steep tariffs on roughly $360 billion worth of each other's products.

If trade relations continue to deteriorate, the OECD forecasts that global gross domestic product would fall by as much as 0.7%, or roughly $600 billion, by 2021. Bloomberg Economics has made similar estimates.

"Further uncertainty about trade policies, and a growing concern that new restrictions might be applied on a much wider range of items affecting many economies, is likely to check business investment plans around the world," the report said.

By increasing investment-risk premiums in financial markets and the cost of capital for companies, greater uncertainty could be particularly costly in advanced economies, the OECD said.

President Donald Trump has threatened to extend duties to all remaining Chinese imports to the US, which are valued at about $300 billion. Tensions between the US and China escalated further last week after the Trump administration banned telecommunications gear from "foreign adversaries" in a move seen as targeting certain Chinese companies.

This all comes at a time when the world economy is expected to cool. The OECD estimated that world global gross domestic product growth would slow to 3.2% this year — down from 3.5% in 2018 and 3.8% in 2017.

"The global economy was expanding in sync less than two years ago, but challenges to existing trade relationships and the multilateral rules-based trade system have now derailed global growth by raising uncertainty that is depressing investment and trade," Laurence Boone, the chief economist at OECD, said.

SEE ALSO: An increasing number of major US companies are warning that tariffs will force them to raise prices

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Insurtech Research Report: The trends & technologies allowing insurance startups to compete

Tue, 05/21/2019 - 6:02pm

Tech-driven disruption in the insurance industry continues at pace, and we're now entering a new phase — the adaptation of underlying business models. 

That's leading to ongoing changes in the distribution segment of the industry, but more excitingly, we are starting to see movement in the fundamentals of insurance — policy creation, underwriting, and claims management. 

This report from Business Insider Intelligence, Business Insider's premium research service, will briefly review major changes in the insurtech segment over the past year. It will then examine how startups and legacy players across the insurance value chain are using technology to develop new business models that cut costs or boost revenue, and, in some cases, both. Additionally, we will provide our take on the future of insurance as insurtech continues to proliferate. 

Here are some of the key takeaways:

  • Funding is flowing into startups and helping them scale, while legacy players have moved beyond initial experiments and are starting to implement new technology throughout their businesses. 
  • Distribution, the area of the insurance value chain that was first to be disrupted, continues to evolve. 
  • The fundamentals of insurance — policy creation, underwriting, and claims management — are starting to experience true disruption, while innovation in reinsurance has also continued at pace.
  • Insurtechs are using new business models that are enabled by a variety of technologies. In particular, they're using automation, data analytics, connected devices, and machine learning to build holistic policies for consumers that can be switched on and off on-demand.
  • Legacy insurers, as opposed to brokers, now have the most to lose — but those that move swiftly still have time to ensure they stay in the game.

 In full, the report:

  • Reviews major changes in the insurtech segment over the past year.
  • Examines how startups and legacy players across distribution, insurance, and reinsurance are using technology to develop new business models.
  • Provides our view on what the future of the insurance industry looks like, which Business Insider Intelligence calls Insurtech 2.0.
Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to: This report and more than 250 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More

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Nordstrom is tanking after reporting a brutal quarter (JWN)

Tue, 05/21/2019 - 4:44pm

  • Nordstrom shares plunged late Tuesday after the company reported dismal first-quarter earnings results.
  • Earnings per share, revenue, same-store sales, and guidance all fell short of expectations.
  • The more than 10% drop after the report sent shares to an eight-year low. 
  • Watch Nordstrom trade live.

Nordstrom shares plunged 10% late Tuesday. to an eight-year low. after several key metrics. including comparable sales and full-year guidance, missed analysts' expectations. 

"While we expected softer trends from the fourth quarter to continue into the first quarter, we experienced a further deceleration," Erik Nordstrom, Nordstrom's co-president, said in the release.

"We had executional misses with our customers, and we're committed to better serving them. This is well within our control to turn around."

Here's how the results compared to what Wall Street analysts polled by Bloomberg were expecting:

  • Revenue: $3.44 billion ($3.48 billion expected)
  • Adjusted earnings per share (EPS): $0.23 ($0.43 expected)
  • Comparable sales: -3.5% (-0.1% expected)

The retailer's outlook across several measures is grim relative to its prior expectations.

Nordstrom sees full-year 2019 net sales of unchanged to down 2%, below its previous estimate for a 1% to 2% increase. Meanwhile it sees its credit-card revenue growing in the low-to-mid single digits after previously expecting mid-to-high-single-digit growth.

Nordstrom said it plans to expand its presence in New York City, its largest market for online sales, and is "on track" to open its flagship store there on October 24.

The retailer bought back 4.1 million shares for $186 million during the quarter that ended May 4.

Ahead of the report, Credit Suisse analysts led by Michael Binetti warned Nordstrom could be in for a rough quarter, noting that the market didn't yet fully appreciate the "depth of the sales decline" in the company's core premium business.

"Overwhelmingly bearish sentiment currently leaves us Neutral," they said. "But our checks have been almost unanimously negative in 1Q." 

They called Nordstrom's full-price store underperformance "alarming," and said they expected same-store sales, a common measure of retailers' health, to come in flat for the first quarter.

The broader analyst community was cautious on Nordstrom ahead of the report, with 16 of 24 analysts surveyed by Bloomberg saying "hold."  

Nordstrom was down 19% this year through Tuesday's market close.

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Urban Outfitters flat after reporting first quarter results (URBN)

Tue, 05/21/2019 - 4:25pm

  • Urban Outfitters shares were flat in after-hours trading on Tuesday after the company reported its first-quarter results.
  • The company posted record first-quarter sales as earnings also came in above expectations.
  • Watch Urban Outfitters trade live.

Urban Outfitters shares were flat in after-hours trading on Tuesday after the company reported its first-quarter results.

The retailer said it had record first-quarter sales of $864 million and net income of $32.6 million, both coming in above what analysts surveyed by Bloomberg were expecting. Notably, same-store sales increased 1%, easily beating the 1.3% decline that analysts were anticipating.

"We are pleased to announce record first quarter sales," said CEO Richard Hayne. "Our sales growth was driven by our seventh straight quarter of positive Retail segment 'comps' as well as continued growth in our Wholesale segment." 

As the retail world continues to evolve, the company is focused on new products and innovations.

The Wall Street Journal reported on Tuesday that the company is developing a rental business, Nuuly. The business will allow customers to rent items of clothing from across Urban's brands, including Anthropologie and Free People, as well as from over 100 third-party brands, a spokesperson told Business Insider.

In addition, Urban may also see a boost from a fashion shift from skinny jeans and loose-fitting tops to high-waisted trousers and crop tops. Hayne said the changes will benefit the company for years to come.

"The macro fashion, the silhouette and the proportion changes infrequently," he said. "My experience would suggest this probably changes about once a decade."

Urban Outfitters is down 18% this year.

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THE IDENTITY VERIFICATION IN BANKING REPORT: How banks should use new authentication methods to boost conversions and keep their customers loyal

Tue, 05/21/2019 - 4:04pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

The way incumbent banks onboard and verify the identities of their customers online is inconvenient and insecure, resulting in lowered customer satisfaction and loyalty, and security breaches leading to compensation payouts and legal costs.

It’s a lose-lose situation, as consumers become disgruntled and banks lose business. The problem stems from the very strict verification standards and high noncompliance fines that banks are subject to, which have led them to prioritize stringency over user experience in verification. At the same time, this approach doesn't gain banks much, since the verification methods they use to remain compliant can actually end up compromising customers' personal data.

But banks can't afford to prioritize stringent verification at the cost of user experience anymore. Onboarding and verification standards are increasingly being set by more tech-savvy players within and outside their industry, like fintechs and e-retailers. If banks want to keep customers loyal, they have to start innovating in this area. The trick is to streamline verification for clients without compromising accuracy. If banks manage to do this, the result will be happier and more loyal customers; higher client retention and revenue; and less spending on redundant checks, compensation for breaches, and regulatory fines.

The long-term opportunity such innovation presents is even bigger. Banks are already experts in vouching for people’s identities, and because they’re held to such tight verification standards, their testimonies are universally trusted. So, if banks figure out how to successfully digitize customer identification, this could help them not only boost revenue and cut costs, but secure a place for themselves in an emerging platform economy, where online identities will be key to carrying out transactions. 

Here are some of the key takeaways from the report:

  • The strict verification standards that banks are held to have led them to create onboarding and login processes that are painful for clients. Plus, the verification methods they use to remain compliant can actually end up putting customers' personal data at risk. This leaves banks with dented customer satisfaction, as well as security breaches and legal costs.
  • Several factors are now pushing banks to attempt to remedy the situation, including a tougher regulatory environment and increasing competition from agile startups and tech giants like Google, Amazon, and Facebook, where speedy onboarding and intuitive service is a given.
  • The trick is to streamline verification for clients without compromising accuracy, something several emerging technologies promise to deliver, including biometrics, optical character recognition (OCR) technology, cryptography, secure video links, and blockchain and distributed ledger technology (DLT). 
  • The long-term opportunity such innovation presents is even bigger. Banks are already experts in vouching for people’s identities, so if they were to figure out how to successfully digitize customer identification, this could help them secure a valued place, and relevance, in a modernizing economy.

In full, the report:

  • Looks at why identity verification is so integral to banking, and why it's becoming a problem for banks.
  • Outlines the biggest drivers pushing banks to revamp their verification methods.
  • Gives an overview of the technologies, both new and established but repurposed, that are enabling banks to bring their verification methods into the digital age.
  • Discusses what next steps have to happen to bring about meaningful change in the identity verification space, and how banks can capitalize on their existing strengths to make such shifts happen.
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Facebook's former security chief says Mark Zuckerberg has too much power and needs to step down as CEO (FB)

Tue, 05/21/2019 - 4:00pm

Mark Zuckerberg should step aside for a new CEO at Facebook, Alex Stamos, the company's former chief security officer, said on Tuesday.

The move would curtail Zuckerberg's power and allow him to focus on what he likes best — developing the company's products, Stamos said at the Collision conference in Toronto. It would also be a sign that he's serious about changing the culture at Facebook, he said.

"There is a legitimate argument that he has too much power," Stamos said. "He needs to give up some of that power. And if I was him, I would go hire a new CEO for the company."

CNBC previously reported Stamos' comments.

Stamos has a candidate in mind for whom Zuckerberg should choose to replace him: Microsoft President Brad Smith. Smith helped the software giant make peace with government regulators when it was under similar scrutiny in the early 2000s over its business practices, as Facebook is now.

"My recommendation would be Brad Smith from Microsoft," he said. "But some adult who has gone through this before at another company."

Facebook representatives did not immediately respond to an email seeking a comment on Stamos' remarks.

Breaking up Facebook won't solve its problems, Stamos said

Facebook and Zuckerberg have been under scrutiny for much of the past three years, starting with the social-networking company's role in the spread Russian misinformation and propaganda during the 2016 US presidential election. The company then became embroiled in a series of privacy and security mishaps last year, including the Cambridge Analytica scandal.

In recent months, there's been a growing call for regulations that would curtail the company's power and restrict how it does business in addition to calls for antitrust enforcement that would break it up.

Read this: The $5 billion fine Facebook expects to pay the FTC is a joke — on all of us

There are legitimate legal arguments for splitting up the company — and for splitting off YouTube from Google, Stamos said. Those arguments are based on the impact Facebook and Google's power has on competition in their respective markets.

But breaking up the companies would not address the fundamental threats and dangers they pose to their users and society, such as their effect on users' privacy and the spread of misinformation, he said.

"You can't solve climate change by breaking up ExxonMobil and making 10 ExxonMobils, right?" he said. "You have to address the underlying issues."

Got a tip about Facebook or another tech company? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Apps are reportedly telling Facebook how much users weigh and when they're menstruating

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