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An influential senator thinks Mark Zuckerberg should be 'held personally accountable' for Facebook's privacy problems, including 'the possibility of a prison term' (FB)

Tue, 09/03/2019 - 4:06pm

  • In a recent interview, Sen. Ron Wyden, D-Oregon, said Facebook CEO Mark Zuckerberg should be prosecuted for allegedly lying to customers about his company's privacy practices.
  • Wyden's spokesman clarified that the senator doesn't think Zuckerberg could be prosecuted under current law.
  • Instead, the senator has informally proposed a bill that would allow prosecutors to go after corporate executives, such as Zuckerberg, when their companies mislead customers about what the companies are doing with customers' private data.
  • Wyden has long been a champion of the internet and the tech industry, making his anti-Zuckerberg comments all the more stark.
  • Visit Business Insider's homepage for more stories.

The Democratic senator who helped created the rules for the commercial internet thinks Facebook CEO Mark Zuckerberg ought to face fines and possible jail time for misleading customers about what his company was doing with their private data.

Under federal law, corporate executives can be prosecuted if their companies misstate their financial reports, Oregon Senator Ron Wyden noted in a recent interview with Willamette Week. Zuckerberg and other executives ought to be similarly liable if their companies mislead users about the companies' privacy policies, he said.

"Mark Zuckerberg has repeatedly lied to the American people about privacy," Wyden told Willamette Week. "I think he ought to be held personally accountable, which is everything from financial fines to — and let me underline this  — the possibility of a prison term. Because he hurt a lot of people."

Wyden wasn't suggesting that Zuckerberg could be prosecuted under current US law, his spokesman, Keith Chu, told Business Insider. Instead, the senator last fall informally proposed a new law that would make such prosecutions possible.

Read this: Facebook could face increased scrutiny from EU regulators after audio data from European users was mistakenly sent to contractors

Wyden has a bill for that

Wyden's draft bill, dubbed the Consumer Data Protection Act, would require companies that have at least $1 billion in revenue and hold personal data of at least 1 million customers, or ones that have data on at least 50 million customers, to put in place measures to protect that data. It would also require those companies to annually report on whether it complied with those protection requirements.

The bill would further mandate that corporate officers, including CEOs, attest that the reports meet government requirements. Officers who signed off on the reports knowing they were incomplete or untrue could face fines of at least $1 million and jail time of up to 20 years.

That latter provision is similar to one in the Sarbanes-Oxley Act. That law requires CEOs and chief financial officers to attest to the accuracy of their companies financial statements. Those officers can be held criminally liable if the statements are misleading or inaccurate — though that provision has rarely, if ever, been enforced.

Despite his rhetoric against Zuckerberg, Wyden has long been one of champions of the internet and the tech industry.  In the late 1990s, Wyden helped spearhead federal legislation that shaped the development of the Internet.

He and then-Rep. Chris Cox sponsored the Internet Tax Freedom Act, which forbade taxes that specifically targeted internet-only activities, such as online access or the transfer of data. He and Cox also sponsored Section 230 of the Communications Decency Act, which protect internet companies from being held liable for the information that their users publish.

However, he has increasingly expressed skepticism and concern about Facebook's data-collection and privacy practices. Those practices have come under increasing scrutiny in the wake of the Cambridge Analytica scandal.

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: Facebook's privacy settlement is such a joke, Mark Zuckerberg likely celebrated its signing

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California legislators are set to vote on a bill that could devastate Uber and Lyft's business model (UBER, LYFT)

Tue, 09/03/2019 - 3:46pm

Uber and Lyft's day of reckoning is here.

California senators are set to vote as early as Tuesday on Assembly Bill 5, a proposed law that would expand many employment protections to drivers while potentially wreaking havoc on the company's balance sheets.

The bill, which was proposed in 2018 by Assemblywoman Lorena Gonzalez, would codify a three-part test to determine a worker's status as either an employee or independent contractor.

That test was first written in a 2018 Supreme Court decision in the case involving Dynamex. The court said a worker is an employee unless the employer proves that:

(A): The worker is "free from the control and direction" of the company that hired them while they perform their work.

(B): The worker is performing work that falls "outside the hiring entity's usual course or type of business."

(C): The worker has their own independent business or trade beyond the job for which they were hired.

Uber and Lyft have been open about the ramifications to their businesses should the bill become law.

"It's also no secret that a change to the employment classification of ride-share drivers would pose a risk to our businesses," executives from both companies said in a June op-ed, echoing similar warnings from both companies' initial-public-offering filings earlier this year.

"Current employment laws, however, do not allow companies like ours to offer certain benefits without blurring the boundaries of employment and triggering a wave of litigation in which nobody wins," they said.

Wall Street agrees that things could be bad if the bill is passed. In California alone, reclassifying drivers as employees could cost Uber and Lyft $3,625 per driver each year, analysts at Barclays estimated. All the associated costs, including Medicare, FICA, and other payroll items, could total $290 million.

"Beyond higher wages, ride-hailing companies would be responsible for half (6.2%) of employees' Social Security and Medicare (1.45%) tax, as well as the costs for administering any employee benefits (e.g., health care and 401ks)," the bank's analysts said in a note to clients.

"With current driver earnings and incentives running at an estimated 78% and 76% of gross bookings for Uber and Lyft, respectively, a 25% increase in driver wage/benefit costs would essentially drive take rates to zero (absent rate increases to riders).

"We think an adverse ruling on the contract workforce issue would potentially bankrupt both Uber and Lyft," they said.

Both companies have maintained their commitment to higher pay and more benefits for drivers, so long as it's on their terms. Uber for the first time last week suggested a minimum wage of $21 per hour while drivers are on a trip, or about 63% of their time, in addition to a bargaining agreement. Lyft, meanwhile, sent push notifications to drivers saying that their flexibility could be on the hook if AB5 passes.

If AB5 gains final passage in the California state Senate and Assembly, it could land on Gov. Gavin Newsom's desk before the Legislature goes into recess on September 13. Newsom has indicated he would sign it into law.

Read more: Uber has proposed a new minimum wage for drivers after years of protests, but it comes with a catch

When trading opened Tuesday morning following the Labor Day holiday, Uber's and Lyft's stock prices were hit more than the market at large, falling some 5% and 6%, respectively, as investors feared the repercussions of the bill should it become law.

Gearing up for a $90 million fight

If the bill passes, Uber and Lyft will be joined by the delivery company DoorDash in their fight to have it replaced. Each of the three companies has pledged $30 million for a ballot initiative to exempt themselves from the proposed law, The New York Times reported.

"As a Plan B, we are reluctantly funding this initiative," Tony West, Uber's chief legal officer, told the paper. "This is not our first-choice option. We would much rather have a historic deal that is good for drivers, good for innovation, good for labor."

Gonzalez, the sponsor of AB5, called the proposed ballot measure "disgusting."

"If they have millions of dollars to put into a ballot initiative, why don't they pay their workers more?" Gonzalez told Politico, adding that the companies' stance amounted to "either you eat it or we're going to force-feed it to you. It's no different from Walmart."

Billionaires who say they can’t pay minimum wages to their workers say they will spend tens of millions to avoid labor laws. Just pay your damn workers! https://t.co/PtyP4JZ7W0

— Lorena (@LorenaSGonzalez) August 29, 2019

Last week, 75 academics from top universities around the country wrote a letter in support of the bill, cautioning against further carve-outs for gig-economy companies like Uber, Lyft, and DoorDash. 

"We oppose attempts to carve platform gig workers out of Dynamex and AB5," the group wrote, citing their own research in which they argue that people who work for the apps "are algorithmically controlled in the traditional ways that employees are controlled."

"They have very limited — if any — entrepreneurial potential; their hours and work are highly structured by the platform employer; they can be unilaterally terminated from their work; and most do not set their own prices."

SEE ALSO: Pete Buttigieg joined a demonstration with Uber and Lyft drivers fighting for a minimum wage while his campaign spends heavily on the ride-hailing apps

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Trump badly wants a strong stock market. New data suggests he should stop tweeting to help that happen.

Tue, 09/03/2019 - 3:44pm

  • Since Donald Trump was elected president in 2016, his tweets have become one of the most frequent drivers of volatility in the stock market. 
  • The president has also repeatedly indicated that maintaining a strong stock market is a priority of his.
  • Data compiled by Bank of America shows that on days when Trump is more active on Twitter, the markets typically fall. When Trump tweets less, the markets tend to rise. 
  • Trump often tweets about impactful trade and economic policy initiatives. And given how often those comments are inflammatory, investors are frequently rattled.
  • Visit the Markets Insider homepage for more stories. 

President Trump might desperately want a healthy stock market, but it appears his Twitter habits aren't helping. 

Over the last three years, the market has fallen an average of 9 basis points on days Trump publishes more than 35 tweets, according to data compiled by Bank of America Merrill Lynch. On the flip side, the firm finds the market has risen an average of 5 basis points on days the presidnet has tweeted fewer than five times.

"Trade talk, political campaigning and tweets have contributed to volatility, from China to Fed policy to tax policy," Bank of America said in a note to clients on Tuesday.

The firm also said US economic policy uncertainty — which often directly correlates with volatility — has risen to its highest level in three years. 

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

President Trump uses Twitter to communicate and comment on economic and trade policy, requiring investors to pay close attention to what he tweets about and how often. Trump has also repeatedly used twitter to criticize the US Federal Reserve and Chairman Jerome Powell over its handling of monetary policy.

The president has also said in the past that he wants a strong stock market. Last Monday, Trump said Chinese officials called his administration to restart trade negotiations, sparking a rally that reversed what was expected to be another day of steep losses for stocks. 

CNN reported that Trump may have embellished those references to high-level trade talks with China to sooth anxious investors in an attempt to shore up optimism within the markets. 

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The ever-escalating trade war with China has brought the US to the brink of recession, a top economist warns

Tue, 09/03/2019 - 3:10pm

  • The trade war between the US and China is pushing America closer to a recession, according to UBS economist Seth Carpenter.
  • A new round of tariffs went into effect on September 1, and they trade war showing no sign of slowing.
  • Carpenter says it increases uncertainty for businesses going forward and could impact consumption and unemployment.
  • While UBS's house view is that the US will avoid recession, Carpenter says there are still downside risks. 
  • Read more on Markets Insider.

President Trump's trade war with China is pushing the US closer to a recession, according to a Tuesday report from UBS's chief US economist.

The commentary comes after anew round of tariffs went into effect on September 1. They included taxes of 15% that went into effect on $113 billion of goods imported from China to the US. Trump had previously planned to levy a 10% duty, but increased it as retaliation for further trade measures instated by China.

"The move clearly shows that 25% is not a ceiling on tariffs and thus must increase materially the uncertainty about the outlook for the trade war for businesses," wrote Seth Carpenter, chief US economist at UBS. 

As tariffs have mounted, economic challenges have grown, wrote Carpenter. Data show that imports of goods have fallen 40% because of tariffs, and domestic spending has been consistently weak since tariffs were enacted last year, he said. 

In addition, as more tariffs have been enacted, they've impact consumer goods. This will continue to disrupt production lines, which could lead to a decline in employment, Carpenter said.

"As a consequence, business investment and household spending suffer," he wrote.

Markets Insider is looking for a panel of millennial investors. If you're active in the markets, CLICK HERE to sign up.

Carpenter is also acutely focused on consumption, which he says represents almost 70% of the US economy and therefore largely impacts gross domestic product.

He says tariffs drag consumption in two ways: (1) higher prices lead to less spending and (2) businesses spend less as well, which can lead them to stop hiring and drive up unemployment. Carpenter expects that the economy will stall in the first half of 2020, and that historic low unemployment rates will tick up to 4.3% by the end of that year. 

But Carpenter still sees the US narrowly avoiding a recession — although he does identify some clear downside risks.

"A further shock to the economy could result in contraction," Carpenter wrote.

He also says sectors such as energy and retail could slide further, while mounting political risks could also create formidable headwinds.

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10 best new cars, trucks, and SUVs for college freshmen

Tue, 09/03/2019 - 2:35pm

  • Crossovers from Honda, Toyota, and Mazda offer the best combination of safety, value, and reliability for college-age drivers.
  • Vehicles from Nissan, Chevy, and Ford are also worth a look.
  • For some freshman, an electric car could be a superb option. Look no farther than the base Nissan Leaf. Doubts about EVs? Then the Toyota Prius is our top pick.
  • Visit Business Insider's homepage for more stories.


You might send your kid off to college with new clothes and high ambitions, but you might also want to gift them some wheels. 

Young drivers tend to benefit from a combination of safety, fuel-economy, and low car payments when it comes to their cars. But that doesn't mean you should automatically look to the cheapest vehicles on the market. These are an options, but a solid, mass-market crossover from a Japanese manufacturer has always been an excellent choice.

That hasn't changed, which is why most of the vehicles on our list fit that description. Still, we threw in a bit of variety.

Read on to explore the ten best new frosh-mobiles, in our opinion:

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1. Honda CR-V. Base price: $24,500. The CR-V has been an outstanding first set of wheels since it was first introduced in the 1990s. This compact crossover combines Honda reliability with versatility, cargo capacity, and better than 30 mpg in highway driving.

2. Mazda CX-3. Base price: $20,390. Subcompacts aren't always the best choice for young drivers, but the CX-3 has a 5-star overall safety rating from National Highway Traffic Safety Administration and an appealing price. It's also plenty of fun to drive, thanks to its peppy 148-horsepower engine.

3. Subaru Outback. Base price: $26,645. The Outback isn't fancy, but it is a near-faultless wagon, with an industry-standard all-wheel-drive system and a great record for safety and reliability. If your freshman is headed to a school where it snows, the Outback is a no-brainer.

4. Toyota RAV4. Base price: $26,650. If you have any doubts about the CR-V, the RAV4 is Toyota's version of the all-purpose crossover SUV. The front-wheel-drive version is worth a look.

5. Toyota Prius. Base price: $24,200. This is my personal pick for best college freshman-mobile. The Prius is reliable, has good cargo capacity, and with fuel economy of around 50 mpg, it would be very easy on a student's budget.

6. Nissan Altima. Base price: $24,100. Young folks aren't much interested in sedans, but for the money, the all-new Altima is among the best in the midsize market right now. It's easy to drive and has an adequately powerful 188-horsepower engine.

7. Chevy Blazer. Base price: $28,800. The reintroduced Blazer borrows styling from the Camaro and comes with either a 3.6-liter V6 engine, making 305 horsepower or a 193-horsepower four-banger. It's an attractive, entry-level midsize crossover with some heritage.

8. Nissan Leaf. $30,000. The Chevy Bolt is also a good choice, but the Leaf has been around a bit longer and provides more creature comforts. The base Leaf serves up 150 miles of range on a charge, ideal for a freshman who might be living close to home or driving infrequently at school.

9. Ford Mustang. Base price: $26,670. In EcoBoost Fastback coupé or snazzy convertible trim, with a mere 310 horsepower, the Mustang is fun, but not too much fun — and an ideal sports car for a young driver.

10. Chevy Colorado. Base price: $21,300. The Colorado singlehandedly revived the small-pickup segment in the US, which has been owned by Toyota. With superb infotainment and respectable 200-horsepower four-cylinder engine in the base model, the Colorado is a lot of truck for the money.

Giant opiate producer Mallinckrodt could soon be completely worthless, analyst says (MNK)

Tue, 09/03/2019 - 2:24pm

  • Patrick Trucchio, one of two analysts with a sell rating on drugmaker Mallinckrodt, lowered his price target to $1 and said the company shares could fall to $0.
  • Shares fell to an all-time low on the news. The stock has fallen more than 85% this year as Mallinckrodt has been criticized for its role in the opioid crisis.
  • The downgraded rating is due to increased litigation risk for the company. Trucchio raised his assumption of liability to $3 billion from $1.5 billion for the company. 
  • Watch Mallinckrodt trade live on Markets Insider. 

Mallinckrodt, a pharmaceutical company, could fall to $0 in the worst-bear case scenario according to a Tuesday note from Patrick Trucchio of Berenberg. 

In early trading Tuesday, shares of the company fell to an all-time low of $2.28. The slide came after Trucchio, one of two analysts that have a sell rating on shares of the company, lowered his price target for the company to $1 from $5, reiterated a "sell" rating on the shares, and warned that the stock could fall even further.

Mallinckrodt's stock has plummeted more than 85% this year as the company has become ensnared in the national opioid crisis. It's among the entities that's been accused by states and cities of failing to stem the massive influx of highly addictive opioids into the US.

"The opiate litigation storm is speeding up," Trucchio wrote. "Adverse outcomes or read throughs from these trials may signal further losses to come for MNK and for all the opioid-iverse." 

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A number of key judgements have been handed down lately in cases about the makers of opioids. In a case in Oklahoma, Johnson & Johnson was ordered to pay $572 million for helping fuel the opioid epidemic. Purdue Pharma, the OxyContin producer, is also mulling a payout of $10 billion to $12 billion to resolve more than 2,000 opioid related lawsuits. 

These cases increase the risk that other pharmaceutical companies like Mallinckrodt could face litigation in the future, according to Trucchio. The revised price target is because Trucchio raised his assumption of opioid-related liability to $3 billion from $1.5 billion. 

Mallinckrodt has also been accused in a whistleblower lawsuit of bribing doctors and its own staff to increase prescriptions of Acthar, a drug for infantile spasms that became increasingly profitable for the company, Business Insider's Emma Court reported. Shares of Mallinckrodt dropped more than 14% when the news broke in April.

If Mallinckrodt is involved in litigation relating to either issue, there's some worry that it would be able to pay out, according to Trucchio.

As it stands right now, the company's historically low stock price means it can't raise capital in the equity market. There's also is some fear that the company will not be able to meet its debt obligations, which Trucchio says would mean a bankruptcy filing is possible. 

Mallinckrodt has more than $5 billion of debt, most of which will start to come due in 2020, according to Bloomberg. The company recently announced that it borrowed the final $95 million on its revolving credit line, meaning that it has no more capacity to borrow. 

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NYC luxury real estate just had its slowest month in 6 years. Some developers are chopping up multimillion dollar penthouses into multiple smaller apartments to get them off the market.

Tue, 09/03/2019 - 2:07pm

The prospect of a July 1 tax hike prompted a boom in luxury condo sales in New York City in June 2019, The Wall Street Journal reported. 

But the surge of high-end sales didn't last. In July, sales of Manhattan homes priced at $2 million or above dropped to their lowest levels in more than six years, according to the Journal.

New York City has more super-expensive and ultra-luxurious penthouse apartments than it knows what to do with.

In Manhattan, there are currently more than 50 penthouses on the market for $20 million or above, according to StreetEasy.

Many of these penthouses sit on the market for months or years and eventually get significant price chops. 

"Like any commodity, when the market is saturated with them, their value declines," Jason Haber, an agent at Warburg Realty in Manhattan, told Business Insider. "If under every rock you found a diamond, diamonds would decline in value. That's what is happening right now."

Read more: A SoHo triplex penthouse got a $5.5 million price chop, but it could still break the record for the most expensive apartment ever sold in downtown NYC

Other sellers offer wild perks to sell their extravagant penthouses, such as the $85 million Hell's Kitchen condo that comes with tickets to outer space and a couple of Rolls Royce luxury cars.

Developers are breaking up massive penthouses to get them off the market.

But sometimes discounts and perks are still not enough, and with the traditional penthouse losing its allure for many buyers, developers are carving up penthouses into multiple cheaper listings to get them off the market.

At 432 Park Avenue, New York City's tallest completed residential building, the 95th-floor penthouse was originally listed for $82 million for the full floor, but it sat on the market for more than two years. In late 2018, the condo was split into two separate listings — penthouse 95A for $41.25 million and penthouse 95B for $40.75 million, as Curbed reported. One faces north and one faces south, but the layouts aren't much different.

Just a few blocks away at 520 Park Avenue, developers split a 12,398-square-foot triplex penthouse, first listed in 2014 for a staggering $130 million, into two separate units: One simplex listed for $40 million and one duplex penthouse asking between $80 million and $100 million, according to The Real Deal.

The Real Deal pointed to this as part of a trend of "developers opting to split once-massive penthouses into two or more smaller units."

Splitting huge penthouses into smaller apartments often gets them off the market.

If past sales are any indication, this strategy might be a good one. 

A few months after being split into two separate listings, the $82 million penthouse at 432 Park Avenue finally sold as two apartments: for $30.7 million and $30.2 million respectively.

And back in 2016, a 12,000-square-foot, $80 million penthouse at 160 Leroy Street in the West Village was split into two smaller units: One asking $31.5 million and the other $48.5 million, according to Curbed. And it worked — the cheaper one sold in 2017 and Michael Rubin, part owner of Philadelphia's 76ers and the New Jersey Devils, bought the larger unit in 2018 for $43.5 million, Forbes reported.

That being said, the penthouse has not entirely lost its appeal, or its status, in 2019. Ken Griffin's $238 million purchase of the penthouse (floors 50 through 53) at 220 Central Park South shattered the US real-estate record in the first weeks of January. The record had previously been held by Barry Rosenstein's $137 million Hamptons home purchase in 2014.

SEE ALSO: A SoHo triplex penthouse got a $5.5 million price chop, but it could still break the record for the most expensive apartment ever sold in downtown NYC

DON'T MISS: A billionaire movie producer is selling a one-bedroom apartment that takes up an entire floor of NYC's Ritz-Carlton for nearly $40 million

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From competition to collaboration: How PayPal turned challengers like Visa and Mastercard into partners

Tue, 09/03/2019 - 1:47pm

  • PayPal inked strategic partnerships over the past three years with more than 40 companies it previously would have considered competitors.
  • Jim Magats, PayPal's senior vice president of payments, product, and engineering, told Business Insider the move was meant to offer customers more options and put PayPal at the center of a payments ecosystem. 
  • As part of the evolution of the network, the payment processor has started sharing its risk score with some large issuers, which has led to an uptick in approval rates. It is also plotting new ways to connect partner companies. 
  • Click here for more BI Prime stories.

PayPal's July 2016 announcement of a strategic partnership with its longtime rival Visa didn't spark an ideal reaction from investors. 

The deal was a big one for the payment processor and signaled a pivot toward collaboration. PayPal had previously encouraged users to connect accounts directly to their bank instead of going through credit-card issuers.  Circumventing cards had meant a larger profit on transactions for PayPal, but it also annoyed issuers, who felt they were getting cut out of deals.

The decision to partner gave PayPal customers more payment options, but investors weren't sold. The day after revealing the partnership with Visa, PayPal shares opened down nearly 8%.

PayPal has since expanded its partnership network, and it's even sharing internal data with big issuers to help streamline payments. Now it is looking for even more ways to connect outside companies, Jim Magats, PayPal's senior vice president of payments, product, and engineering, told Business Insider.

But at the time, many seemed uncertain if it was the right play.  

"A lot of people thought we were crazy to go out of customer choice," Magats said. Watching PayPal's stock tumble  in the minutes after the Visa announcement was a "very humbling experience," he said. 

Read more: PayPal's CFO says its new partnership with Facebook Marketplace could dwarf the business it does with eBay

The stock has more than made up for that dip. Shares in PayPal are up roughly 190% over three years. And while a large part of that is thanks to the general growth of the payments space, PayPal's strategic partnerships have helped. 

According to PayPal's most recent earnings report, roughly 10% of the payment processor's net revenue comes from "other value added services," which includes revenue earned through partnerships. The network of strategic partners now numbers more than 40, all blossoming from that initial Visa deal.

PayPal's strategic partnership network spans a variety of industries, including card issuers such as Visa and Mastercard, big banks like Citi and Bank of America, tech companies like Facebook, and retail stores like Walmart. 

Magats said the decision to embrace the competition came from a simple question: What did PayPal want to be? 

After its split from eBay in 2015, many wondered where PayPal would sit within the payments ecosystem, Magats said. Offering customers more options, as opposed to limiting them to PayPal, seemed like a growth opportunity, he added.

"We were relatively confident that we had a lot of really good assets, and we had a lot of really good assets that other people would want to collaborate with us," Magats said. "We also knew that no one themselves could actually really make payments at scale work."

Sharing risk information has big benefits

PayPal is now laying the groundwork for even more ways it can deepen ties with former rivals. That includes sharing information that can lead to processing more transactions. 

PayPal has begun sharing its internal-risk score, which Magats said is akin to a FICO score, with a handful of some of the largest issuers. While it's still early days, the move appears to be improving authorization rates, meaning more payments get the green light. 

At one of the biggest issuers, which Magats declined to name, PayPal saw nearly a 3% increase in authorization rates on transactions where it shared risk scores over the past six months. Overall, through partnerships and sharing of PayPal's internal tools, approval rates on PayPal transactions have risen by 1% over the past 18 months. 

"Because PayPal is a two-sided network, we have information on most consumers and merchants that do online and mobile shopping. We have a pretty good idea as to who's good and who isn't good," Magats said. "When they're making a decision on a customer, they basically embed the PayPal score into it."

Read more: PayPal's CFO believes AI can save the company $25 million a year by automating one area of customer service

There's more to come — Magats said PayPal's work with strategic partners was, to use a sports reference, just wrapping up the first quarter.

Magats said next steps would be focused on making more connections between various members of the network, including expanding how rewards points and cash back can be redeemed, and growing into other regions, such as Latin America.

"Now it's about how do you take these things and, more, integrate the experiences together," Magats said. "It's the collection of everything that comes together that creates really great customer experiences."

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The average US household spends $4,445 on grocery spending. Here's how many points that gets you with 3 popular credit cards

Mon, 09/02/2019 - 12:24pm

According to the Bureau of Labor Statistics expenditure survey, the average American household spent $4,445 on groceries between 2017 and 2018. With so many popular credit cards offering bonus rewards on grocery spending, this is a category that can translate to substantial points or cash back.

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which can far outweigh the value of any rewards.

When you're working to earn credit card rewards, it's important to practice financial discipline, like paying your balances off in full each month, making payments on time, and not spending more than you can afford to pay back. Basically, treat your credit card like a debit card.

$266 cash back with the Blue Cash Preferred Amex

The Blue Cash Preferred Card from American Express earns 6% cash back at US supermarkets, on up to $6,000 worth of spending per year. After that, all other grocery purchases earn 1% cash back. Considering the average household's annual grocery spending is $4,445, that limitation shouldn't be an issue for most cardholders.

At 6% cash back, the average American household can earn $266.70 worth of cash back on $4,445 grocery spending. That's a pretty substantial amount of cash that can be reinvested into paying household bills — or the next grocery run.

Cash-back rewards are a great choice for people who don't want to spend time researching the best redemption value with different travel programs. It's simple and straightforward.

Click here to learn more about the Blue Cash Preferred card from our partner The Points Guy.

Read more: The best cash-back credit cards

26,670 hotel points with the Hilton Honors Surpass 

The Hilton Honors Surpass card earns 6 points per dollar at US supermarkets. On $4,445 worth of spending, the average household could earn 26,670 Hilton points.

Hilton requires 5,000 to 95,000 points for a standard award night. With 26,670 points, you could cover one to five free nights at a Category 1-4 hotel. Check out the Hilton Points Explorer for an idea of the types of hotels you could book with 26,670 Hilton points.

Click here to learn more about the Hilton Honors Surpass card from our partner The Points Guy. 17,780 points with the American Express Gold Card

The Amex Gold Card is popular thanks to generous bonus categories and statement credits for dining. Cardholders earn 4 points per dollar on up to $25,000 per year at US supermarkets (then 1 point per dollar). The 17,780 points earned from $4,445 in annual grocery spending can add up to quite a lot of rewards, depending on how you use them.

Amex Membership Rewards points transfer to 19 airlines and three hotel programs. With 17,780 points transferred to Virgin Atlantic Flying Club, you could book a one-way economy-class ticket between the East Coast and London — and still have 7,680 points to spare. That's the cheapest transcontinental flight you can book using points and miles.

British Airways is another great transfer option. The airline's awards are based on the flight distance, which can work out great depending on where you travel to. For example, a one-way flight between the West Coast and Hawaii is just 12,500 miles in economy class. If you're traveling during the off-season, you can score tickets between the East Coast and Ireland for just 13,000 miles one-way.

Click here to learn more about the Amex Gold card from our partner The Points Guy. The best option

The best credit card for grocery spending really depends on your goals. With reward programs getting devalued all the time, cash back is becoming more valuable. It provides redemption flexibility and isn't subject to blackout dates or devaluations.

Bank rewards currencies like Amex Membership Rewards points remain solid alternatives. There's more potential to maximize these points through premium travel redemptions or take advantage of sweet spot pricing. With so many transfer partner options and the ability to redeem points for statement credits, the possibilities are endless.

Read more: The best rewards credit cards

SEE ALSO: All our credit card reviews — from cash-back to travel rewards to business cards — in one place

Join the conversation about this story »

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Hurricane Dorian is set to wreak havoc on air travel — here's what you need to know about flights

Mon, 09/02/2019 - 11:45am

  • Hurricane Dorian is on track to reach the continental United States in the next several days.
  • Air travel is likely to be severely affected, regardless of the storm's exact track, and flights across the US could be delayed or canceled.
  • Airlines including American, Alaska, Delta, JetBlue, Frontier, Southwest, Spirit, and United have issued travel waivers letting some affected passengers change their flights without any fees. Scroll down for details on the waivers, and check back here for updates.
  • Visit Business Insider's homepage for more stories.
A dangerous tropical storm in the Caribbean strengthened Wednesday to become Hurricane Dorian.

The Category 5 hurricane caused "unprecedented" damage in the Bahamas over the weekend, according to the Bahamian Prime Minister, and is expected to make landfall in the continental US as a "major hurricane" — Category 3 or stronger — at some point between Monday evening and Tuesday morning, according to the National Hurricane Center.

While the storm was initially forecasted to slam into the Florida coast, shifts over the weekend led to uncertainty about its exact course and suggested it would move further north, possibly remaining off the coast.

However, the slightest shift in track could lead to "catastrophic" impact in Florida, and regardless of where the storm's eye makes landfall — or whether it does at all — it's likely that most of the South-East will feel tropical storm and hurricane-strength winds.

Air travel is expected to be impacted, though as in many cases of severe weather, effects could ripple across the US as aircraft are repositioned or delayed because of the storm.

American, Alaska, Delta, Frontier, JetBlue, Southwest, Spirit, and United have issued travel waivers, allowing people with flights that may be directly affected to change their itineraries without a fee. 

Those waivers initially applied mostly to airports in Florida and the Caribbean, although airlines extended waivers to cover parts of Georgia and the Carolinas.

Multiple airlines also announced it would waive pet-in-cabin and baggage fees on flights from certain airports in order to help with evacuations.

Orlando, Fort Lauderdale and Palm Beach International airports planned to suspend operations at noon on Monday, leading to hundreds of cancelled flights into or out of Florida, according to data from FlightAware, with more than 1,000 flights cancelled nation-wide.

Scroll down for full details, and keep checking this article — we'll be updating it as necessary.

If you're traveling this weekend, check this page for updated travel waiver information.

SEE ALSO: British Airways pilots plan to strike over 3 days in September, throwing air travel into chaos

American Airlines

Passengers flying to or from or connecting through the following airports on August 29-September 4 are eligible for travel waivers:

  • Daytona Beach, FL (DAB)
  • Fort Lauderdale, FL (FLL)
  • Fort Myers, FL (RSW)
  • Gainesville, FL (GNV)
  • Jacksonville, FL (JAX)
  • Key West, FL (EYW)
  • Melbourne, FL (MLB)
  • Miami, FL (MIA)
  • Orlando, FL (MCO)
  • Sarasota / Bradenton, FL (SRQ)
  • Tallahassee, FL (TLH)
  • Tampa, FL (TPA)
  • West Palm Beach, FL (PBI)

The waiver applies as long as you reschedule your flight for August 29 to September 10 and between the same cities and in the same cabin.

Passengers traveling through the following airports on September 1–7 are also eligible for waivers, as long as travel is rescheduled for September 1–15:

  • Charleston, SC (CHS)
  • Greenville, NC (PGV)
  • Hilton Head, SC (HHH)
  • Jacksonville, NC (OAJ)
  • Myrtle Beach, SC (MYR)
  • New Bern, NC (EWN)
  • Savannah, GA (SAV)
  • Wilmington, NC (ILM)

Passengers traveling through the following airports on August 30-31 are also eligible for waivers, as long as travel is rescheduled for August 28–September 7:

  • Freeport, Bahamas (FPO)
  • George Town, Bahamas (GGT)
  • Marsh Harbour, Bahamas (MHH)
  • Nassau, Bahamas (NAS)
  • Providenciales, Turks and Caicos Islands (PLS)

Also, passengers traveling to, from, or through the following airports August 26-29 are eligible for travel waivers under the same terms (as long as they rebook their flights for August 26 to September 5):

  • Bridgetown, Barbados (BGI)
  • Cap Haitien, Haiti (CAP)
  • Fort de France, Martinique (FDF)
  • Port Au Prince, Haiti (PAP)
  • Puerto Plata, Dominican Republic (POP)
  • Punta Cana, Dominican Republic (PUJ)
  • San Juan, Puerto Rico (SJU)
  • Santiago, Dominican Republic (STI)
  • Santo Domingo, Dominican Republic (SDQ)
  • St. Lucia, Saint Lucia (UVF)

You can also cancel any eligible flights and get a refund in the form of a travel voucher, good for one year from the date you originally purchased the ticket.

To change your flight, contact airline reservations at 800-433-7300, or make the change online yourself by clicking "change trip" when you pull up your flight details.



Delta

Travel waiver applies for passengers flying to or from or connecting through the following airports on September 1–7:

  • Brunswick, GA (BQK)
  • Charleston, SC (CHS)
  • Fayetteville, NC (FAY)
  • Hilton Head, SC (HHH)
  • Jacksonville, NC (OAJ)
  • Myrtle Beach, SC (MYR)
  • New Bern, NC (EWN)
  • Savannah, GA (SAV)
  • Wilmington, NC (ILM)

The full waiver applies as long as you reschedule your flight for a date on or before September 15 between the same cities and in the same cabin. You can reschedule your flight for later — as long as it's within a year of the original purchase date — but you may have to pay a fare difference.

You can also cancel your flight and get a refund in the form of a credit. You'll have to use the credit to purchase a new ticket for travel within a year of the original purchase date.

There's also a waiver for passengers flying to or from or connecting through the following airports on August 30–September 4:

  • Daytona Beach, FL (DAB)
  • Fort Lauderdale, FL (FLL)
  • Fort Myers, FL (RSW)
  • Gainesville, FL (GNV)
  • Jacksonville, FL (JAX)
  • Key West, FL (EYW)
  • Melbourne, FL (MLB)
  • Miami, FL (MIA)
  • Orlando, FL (MCO)
  • Sarasota/Bradenton, FL (SRQ)
  • Tallahassee, FL (TLH)
  • Tampa, FL (TPA)
  • Valdosta, GA (VLD)
  • West Palm Beach, FL (PBI)

For the full waiver to apply, flights must be rescheduled for a date on or before September 10 between the same cities.

The airline is also waiving all pet-in-cabin and baggage fees from the following airports from August 30–September 4, to help people looking to evacuate:

  • Daytona Beach, FL (DAB)
  • Fort Lauderdale, FL (FLL)
  • Jacksonville, FL (JAX)
  • Melbourne, FL (MLB)
  • Miami, FL (MIA)
  • Orlando, FL (MCO)
  • West Palm Beach, FL (PBI) 

A travel waiver is in place for the following airports for travel between August 26-29, as long as travel is rebooked for September 5 or earlier:

  • Punta Cana, Dominican Republic (PUJ)
  • Port Au Prince, Haiti (PAP)
  • San Juan, Puerto Rico (SJU)
  • Santiago, Dominican Republic (STI)
  • Santo Domingo, Dominican Republic (SDQ)
  • St. Lucia, Saint Lucia (UVF)
  • St. Thomas, Virgin Islands (STT)

Also, passengers traveling to, from, or through the following airports August 30-31 are eligible for travel waivers under the same terms (as long as they rebook their flights for September 7 or earlier):

  • George Town, Bahamas (GGT)
  • Marsh Harbour, Bahamas (MHH)
  • Nassau, Bahamas (NAS)
  • Providenciales, Turks and Caicos Islands (PLS)

To change your flight, click "My Trips" in the Delta app or on the website.



JetBlue

Travel waiver applies for passengers flying to or from or connecting through the following airports September 4–5:

  • Charleston, SC (CHS)
  • Savannah, GA (SAV)

Flights must be rebooked September 13 or earlier between the same cities and in the same cabin for the waiver to apply.

There's also a waiver in place for these airports August 30 to September 3:

  • Fort Lauderdale, FL (FLL)
  • Fort Myers, FL (RSW)
  • Jacksonville, FL (JAX)
  • Orlando, FL (MCO)
  • Palm Beach, FL (PBI)
  • Sarasota, FL (SRQ)
  • Tampa, FL (TPA)

Travel must be rebooked for September 10 or earlier.

The waiver also applies for passengers traveling to, from, or through these cities August 28-29:

  • Aguadilla, Puerto Rico (BQN)
  • Ponce, Puerto Rico (PSE)
  • San Juan, Puerto Rico (SJU)
  • St. Thomas, Virgin Islands (STT)

The waiver applies as long as you reschedule your flight for a date through September 1.

And these cities August 30–September 2, as long as travel is rebooked for September 7 or earlier:

  • Nassau, Bahamas (NAS)

To change your flight, contact airline reservations at 800-538-2583, or make the change online yourself by clicking "manage flights" when you pull up your flight details.

If your flight ends up being canceled, you can also opt for a full refund.



United

Travel waiver applies for passengers flying to or from or connecting through the following airports August 29-September 4:

  • Fort Lauderdale, FL (FLL)
  • Fort Myers, FL (RSW)
  • Jacksonville, FL (JAX)​
  • Key West, FL (EYW)​
  • Miami, FL (MIA)​
  • Nassau, Bahamas (NAS)​
  • Orlando, FL (MCO)​
  • Sarasota, FL (SRQ)​
  • Tampa, FL (TPA)​
  • West Palm Beach, FL (PBI)​

For the waiver to apply, travel must be rescheduled between August 29 and September 11.

You can also reschedule your flight for after September 11, or change your departure or destination city — the change fee will still be waived, but you may have to pay a fare difference. Rescheduled travel has to be completed within a year of the date you bought the ticket.

There's also a waiver in place for the following cities if you're scheduled to travel September 2–7:

  • Charleston, SC (CHS)
  • Hilton Head Island, SC (HHH)​
  • Myrtle Beach, SC (MYR)
  • Savannah, GA (SAV)
  • Wilmington, NC (ILM)

Flights must be scheduled for September 2–14 for the full waiver to apply.

Also, if you're scheduled to travel to, from, or through the following airports from August 28-29:

  • Aguadilla, Puerto Rico (BQN)
  • Punta Cana, Dominican Republic (PUJ)​
  • San Juan, Puerto Rico (SJU)

The full waiver applies as long as you reschedule your flight for anytime by September 1 between the same cities and in the same cabin.

To change your flight, contact airline reservations at 800-864-8331 or make the change online yourself through the United website or app.



Southwest

Travel waiver applies for passengers flying to or from or connecting through the following airports August 26-30:

  • Providenciales, Turks and Caicos Islands (PLS)
  • Punta Cana, Dominican Republic (PUJ)
  • San Juan, Puerto Rico (SJU)

And the following airport on August 27 to September 5:

  • Nassau, Bahamas (NAS)

And these airports August 31 to September 5:

  • Fort Lauderdale, Florida (FLL)
  • Fort Myers, Florida (RSW)
  • Jacksonville, Florida (JAX)
  • Orlando, Florida (MCO)
  • Tampa, Florida (TPA)
  • West Palm Beach, Florida (PBI)

And the following airport September 1-6:

  • Charleston, SC (CHS)

The waiver applies as long as you reschedule your flight for anytime within 14 days of the original travel date between the same cities and in the same cabin.

Southwest also said it would waive pet-in-cabin fees for passengers evacuating from those cities.

To change your flight, contact airline reservations at 800-435-9792, or make the change online yourself by using the Southwest app or website.



Frontier Airlines

Travel waiver applies for passengers flying to or from or connecting through the following airports August 26-30:

  • Punta Cana, Dominican Republic (PUJ)
  • San Juan, Puerto Rico (SJU)

Affected passengers can make one change. The waiver applies as long as you reschedule your flight for anytime on or before September 20 — passengers are allowed to change their origin or destination cities.

Frontier issued an additional travel waiver passengers traveling to, from, or through the following airports on September 1-4:

  • Fort Lauderdale, FL (FLL)
  • Fort Myers, FL (RSW)
  • Jacksonville, FL (JAX)
  • Miami, FL (MIA)
  • Orlando, FL (MCO)
  • Sarasota, FL (SRQ)
  • Tampa, FL (TPA)
  • West Palm Beach, FL (PBI)

For the waiver to apply, travel must be rescheduled for no later than September 28.

If your flight is cancelled outright, you can choose to request a refund instead of a rescheduled flight.

To change your flight call reservations at 801-401-9000.



Spirit Airlines

Travel waiver applies for passengers flying to or from or connecting through the following airports August 27-30:

  • Aguadilla, Puerto Rico (BQN)
  • Port-au-Prince, Haiti (PAP)
  • Punta Cana, Dominican Republic (PUJ)
  • Santo Domingo, Dominican Republic (SDQ)
  • San Juan, Puerto Rico (SJU)
  • Santiago, Dominican Republic (STI)

The full waiver applies as long as you reschedule your flight for travel on or before September 5 between the same cities.

Change fees will still be waived if you reschedule for a later date, but you may have to pay a fare difference.

The travel waiver also applies for passengers traveling to, from, or through the following airports on August 31–September 3:

  • Fort Lauderdale, FL (FLL)
  • Jacksonville, FL (JAX)
  • Orlando, FL (MCO)
  • Tampa, FL (TPA)

Fees and fare differences are waived as long as those passengers rebook to travel by September 18.

Spirit has also added a waiver for the following city for travel scheduled September 2–6:

  • Myrtle Beach, SC (MYR)

Fees and fare differences are waived as long as those passengers rebook to travel by September 18.

To change your flight, visit the "manage travel" page and enter your flight information, or call reservations at 801-401-2222.



Alaska Airlines

Passengers flying to or from or connecting through the following airports on September 1-4 are eligible for travel waivers:

  • Fort Lauderdale, FL (FLL)
  • Orlando, FL (MCO)
  • Tampa, FL (TPA)
  • Charleston, SC (CHS)

The waiver applies as long as you reschedule your flight for August 29 to September 11 and between the same cities and in the same cabin.

You can also cancel your flight and receive credit for a future trip.

To change your flight, go to Alaska's "Change My Flight" or "Cancel My Flight" pages, or contact the travel agent who booked your tickets.



Read the pitch deck that helped Divvy raise $30 million to provide alternate financing for prospective homebuyers

Mon, 09/02/2019 - 11:00am

Buying a home, particularly for Millennials, is a complicated and expensive process – at times it can be complicated and expensive enough to discourage potential buyers from even trying.

Enter Divvy, one of the many Silicon Valley startups working to change the way people buy homes. The company is specifically interested in providing alternative financing options for prospective homebuyers who don't qualify for traditional mortgages.

Divvy accomplishes this by purchasing homes outright and allowing customers to pay the company back through monthly installments — 25% of the total goes toward building equity and 75% goes toward paying "rent."

And some top venture capitalists have bought into Divvy's mission as well. In October 2018, Divvy raised a $30 million series A round led by Andreessen Horowitz, with participation from Caffeinated Capital, DFJ, and Affirm CEO Max Levchin.

Divvy helped purchase homes for more than 100 buyers in its first year, but it has much higher hopes. The startup's official mission is to put 100,000 families into their first homes within five years.

To really understand Divvy's strategy, Business Insider Prime has published the investor deck the company used to acquire that $30 million in funding. Simply enter your email address to receive a FREE download of the full deck!

BI Prime is publishing dozens of stories like this each and every day, chock full of exclusive content and industry analysis. Get started by reading the full investor deck.

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Spooked traders just sent gold to a 6-year high after yet another warning on a slowdown in global trade

Mon, 09/02/2019 - 10:28am

  • Worried investors are plowing into gold due to global uncertainty in markets. 
  • Meanwhile, global trade has continued to slow down due to the trade war, falling a third consecutive quarter in Q2. 
  • Analysts have said that investors are running out of havens as US treasury bond yields are so low. 
  • Watch gold trade live.
  • View Markets Insider's homepage for more stories. 

Worried investors have been plowing into gold as political uncertainty plagues markets, sending the haven asset to the highest since 2013.

Analysts say that this is a worrying sign of the effect of the trade war, as spooked investors run out of safe havens.

"Investors have piled into gold because, fundamentally, they are worried about the state of the global economy," said Neil Wilson, chief market analyst at Markets.com to Markets Insider in an email. 

CPB's world trade monitor also showed that world trade had fallen for a third consecutive quarter, dropping by 0.7%, as June fell by 1.4% month on month. 

"They've also piled into bonds for the same reason – yields have come right down and this depression of yields is really what matters for gold," Wilson added.

US bond yields have been a major talking point for investors recently. The yields for the 2-month Treasury and the 10-year Treasury have inverted, a big red flag for a looming recession. 

As Markets Insider's Carmen Reineke reported last week: Investors are "struggling to find solid returns in an environment where yields are low all around." The yield curve's inversion — which has come before every recession since 1950 — "has increased investor panic," she wrote. "That, in turn, has driven the bond rally further and dragged yields lower." 

See More: The yield curve is inverted. Here's what that means, and what the implications are for the economy.

Added Wilson: "Real yields in the US have fallen to about zero which has made gold especially appealing given that the opportunity cost to holding gold as a hedge is about zero."

"So while sometimes you see gold as a safe haven play, it doesn't really work or last when yields are higher – the drop in yields has really been the key."

Investors have also been putting their money into bitcoin for similar reasons, according to analysts at eToro. The e-trading platform said it saw a 284% surge in bitcoin trades in the last three months, compared to the three months before that. 

See More: Investors have been plowing money into bitcoin since the start of the US-China trade war 

SEE ALSO: Investors have been plowing money into bitcoin since the start of the US-China trade war

Join the conversation about this story »

NOW WATCH: Most hurricanes that hit the US and Caribbean islands come from the same exact spot in the world

China stocks soar on Beijing's vow to prop up its economy as Trump's tariffs kick in, hitting billions' worth of goods

Mon, 09/02/2019 - 10:25am

  • Beijing signaled measures intended to keep its economy afloat as a fresh round of tariffs on US and Chinese goods kicked in this week.
  • Chinese and European equities jumped. US futures fell as American markets were closed for the Labor Day holiday.
  • The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods on Sunday, and China retaliated with the first of two batches of duties targeting $75 billion worth of US goods.
  • "The outlook does not look positive for a deal any time soon," one analyst said.
  • View Markets Insider's homepage for more stories.

Chinese stocks jumped Monday after Beijing signaled measures intended to keep its economy afloat as a fresh round of tariffs on US and Chinese goods kicked in this week.

The State Council's financial stability and development committee described risks to the economy as manageable and said the state wanted to keep "reasonably ample" liquidity as it faced the brunt of the trade war, according to Bloomberg. The committee was at a conference chaired by Vice Premier Liu He, Bloomberg said.

European equities jumped while US futures fell. Markets were closed in the US for the Labor Day holiday. Stocks in Hong Kong and Japan slid.

The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods including footwear, apparel, and Apple Watches on Sunday, and it plans to roll out duties on a further $160 billion in Chinese products such as laptops and cellphones in mid-December.

The Chinese government retaliated by rolling out the first of two batches of tariffs targeting $75 billion worth of US goods. It hiked the price of importing American pork, beef, chicken, and agricultural goods, and it plans to ramp up tariffs on soybeans to 30% in mid-December from 25%.

Trade representatives from the world's two biggest economies will hold talks this month, President Donald Trump told reporters on Sunday, according to Bloomberg. Yet the US president struck a defiant tone, signaling the yearlong dispute wouldn't be easily settled. "We can't allow China to rip us off anymore," he said.

Analysts aren't optimistic the two sides can reach a resolution.

"Trade and tariffs continue to gnaw away at investor confidence," Neil Wilson, the chief market analyst for Markets.com, said in a morning note. "The outlook does not look positive for a deal any time soon."

Meanwhile, a positive set of Chinese economic data could persuade authorities to hold out for an attractive deal. Chinese manufacturing activity increased in August, according to the latest reading from the Caixin Purchasing Managers' Index, which rose from 49.9 in July to a five-month high of 50.4.

More government stimulus might be necessary to sustain the revival.

"China's economy showed signs of a short-term recovery, but downward pressure remains a long-term problem," Dr. Zhengsheng Zhong, the director of macroeconomic analysis at CEBM Group, said in a statement. "Amid unstable Sino-American relations, China needs to step up countercyclical policies."

Here's the market roundup as of 10:20 a.m. in New York:

  • European equities were broadly higher, with Britain's FTSE 100 up 1.2% and Germany's DAX and the Euro Stoxx 50 up 0.1%.
  • Asian indexes were mixed, with China's Shanghai Composite up 1.3% and Japan's Nikkei down 0.4%. Hong Kong's Hang Seng slumped 0.4% after protesters clashed with the police at the territory's main airport and forced roads to close.
  • US stock markets were closed for Labor Day. Futures fell, with those underlying the Dow Jones Industrial AverageS&P 500 and Nasdaq down about 0.3%.
  • Oil prices fell with West Texas Intermediate crude down 0.4% at $54.90 a barrel and Brent crude down 0.8% at $58.80.
  • Gold inched up 0.3% to $1,534. The haven asset is hovering at its highest level since 2013.

SEE ALSO: It looks like Trump lied about the trade war to boost stock markets — his bluster may soon start falling on 'deaf ears'

Join the conversation about this story »

NOW WATCH: This is the shortest route for a road trip across the US to see 50 national landmarks

See inside Amtrak's luxurious new train cars that are the closest thing to European rail the US has yet seen

Mon, 09/02/2019 - 9:10am

  • Amtrak's newest trains are set to arrive in 2021 and will be put to work on the Acela service from Boston to Washington, DC.
  • The operator previewed the cars' interiors this week — and they look plenty luxurious.
  • In addition to bigger, more comfortable seats, the café car and bathrooms have also been upgraded. 
  • Visit Business Insider's homepage for more stories.

When Amtrak's newest Acela trainsets arrive in 2021, not only will travelers get a faster trip between Boston, New York, and Washington D.C., but a more posh interior as well.

The agency showed off the new cars' upgraded interiors this week at its headquarters in Delaware, where the tour included mock-ups of both business and first-class, as well as the cars' bathrooms, galley, and driver's cab.

"The new trains will provide world-class accommodations and amenities, along with a smoother and even more comfortable ride," Amtrak said in a press release. "The trainsets are being manufactured at Alstom's Hornell, NY, facility and each trainset will offer more seating capacity with 378 seats to offer the spacious, high-end comfort our customers expect."

Here's a look inside:

SEE ALSO: I spent 23 hours on an Amtrak train from Orlando to New York — and it was a roller-coaster experience with extreme highs and lows

Each car will have 25% more seats than before, Amtrak says. Sleek new overhead luggage racks and digital signage add to the futuristic look.

Every seat has a personal power outlet for charging phones, computers, and other devices. There are also USB ports and individual reading lights.

No more reaching over your seatmate to get to the inconvenient outlet.



The seats are made from recycled leather. Winged headrests, not unlike those on some planes, make it easier to fall asleep.

Double tray tables make it easy to customize your seat for working, eating, or anything else.

If you've ever tried to walk down the aisle of a bumpy train, you'll be thankful for the new seat-top handles.

The passengers who avoid being spilled on will probably like them too.



The Cafe Cars have been upgraded, too. No more waiting in lines that extend to the next car.

Here's a behind-the-counter look at the new prep space, as well as a digital menu board.

And if you're tired of sitting, the new "nest area" features hip rests and a bar-like counter for drinks and food.

Say goodbye to touching gross bathroom fixtures: new lavatories feature all touch-less technology as well as changing tables for traveling families.

In order to achieve higher speeds on the US' antiquated infrastructure, the new Acela trains have a "tilting technology" so the forces around curves aren't as jarring.

Read more about Amtrak's Acela Express:

Amtrak is launching a new express train between New York and Washington DC that could help it steal even more passengers from airlines in the Northeast



Goldman Sachs says Argentina faces a 'longer and deeper recession' after a month from hell. Here's why things could get as bad as 2001's crisis.

Mon, 09/02/2019 - 8:01am

  • Amid political uncertainty, Argentina is in the midst of economic crisis after S&P indicated that the country was in selective default.
  • Goldman Sachs warned that its outlook for the country was turning more bearish. Goldman expects Argentina's gross domestic product to contract by 3.2% this year and by another 1.6% in 2020, "totaling three consecutive years of recession."
  • The bank also sees inflation declining at a slower pace.
  • Argentine bond yields have spiked, and the country's currency is plummeting.
  • "Things in Argentina are likely will get worse," Pantheon Macroeconomics predicted.
  • Click here for more BI Prime stories.

In just a few weeks, Argentina has gone from a plucky country on the long road to economic recovery to a pariah in global markets.

The country had been steadily attempting to improve its difficult economic situation under President Mauricio Macri over the past few years, but shock election results on August 11 saw a rise in support for the opposition challenger Alberto Fernández and his running mate, former President Cristina Fernández de Kirchner.

The August vote result spooked investors — the peso plunged 36% against the dollar, the Argentine stock market has halved in value, and investors have fled government bonds, sending yields spiking.

This week, the country imposed currency controls, deepening concerns about Argentina's economy amid a terrible month. That brought back painful memories of 2001, when Argentina defaulted on $93 billion worth of sovereign debt, the largest on record.

But even before the capital controls, Goldman Sachs warned that its outlook for the country was turning more bearish.

In a note dated August 30, analysts led by Tiago Severo said they expected "a longer and deeper recession amidst higher inflation" — saying Argentina's economic slump was likely to be the longest since the country's disastrous default in 2001.

Goldman expects Argentina's gross domestic product to contract by 3.2% this year and by another 1.6% in 2020, "totaling three consecutive years of recession." The bank also sees inflation declining at a slower pace, "reaching 50% by end-2019 and tracking above 40% during the first half of 2020, with risks skewed to the upside."

Investors are worried. The cost of insuring bond debt against default in Argentina has boomed to 3,600 basis points — 360% — on a five-year credit default swap, an insurance product designed to protect bond holders, an increase of 93%. The implied probability of default is now 92%, which could have a major impact on global investors.

S&P also indicated that the country was now in selective default despite Argentina's $57 billion loan agreement with the International Monetary Fund, which was the fund's largest outlay to date when agreed a year ago.

Read more: Argentina just brought in currency controls to contain the peso after it lost more than a quarter of its value in a month

"Things in Argentina are likely will get worse, even with IMF support, and the country will struggle to access to international markets," said Andres Abadia, a senior international economist at Pantheon Macroeconomics.

'They are not measures for a normal country'

Further deterioration would be likely to cause any remaining investors to flee as Argentina desperately tries to restore order. The IMF announced it would provide an additional $5.4 billion to the country. Inflation is flashing red at 22% for the first half of the year.

The central bank has spent nearly $1 billion in reserves since Wednesday, according to Reuters.

"Increased political and policy uncertainty and the large dislocation of broad financial conditions will likely weigh on the economic outlook, almost certainly reversing the tentative stabilization of activity and the somewhat more palpable decline in inflation observed in recent months," Goldman Sachs analysts said.

The Argentine government has hiked short-term interest rates to almost 80% and has moved to unilaterally reclassify the maturities of its short-term debts, a move that is likely to cause concerns among investors.

The country's economic minister, Hernan Lacunza, called the measures "uncomfortable" but indicated that without them there would be serious consequences. "They are not measures for a normal country," he said, according to Reuters, citing a radio interview Sunday night.

Even with continued international support, the Argentine economy is walking a tightrope. The country's sovereign default in 2001 still lingers in the minds of investors with the stark possibility of a new populist government coming to power in October, only amplifying concerns.

SEE ALSO: Investors spooked by the trade war are running out of places to hide. Goldman Sachs says they should pile into stocks that act like bonds.

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Trump's newest China tariffs just kicked in — and JPMorgan says they could cost American shoppers an extra $1,000 a year

Mon, 09/02/2019 - 7:30am

  • American shoppers could face $1,000 in extra costs a year thanks to the latest set of US tariffs on Chinese goods, JPMorgan says.
  • The Trump administration slapped tariffs on $112 billion worth of Chinese goods on Sunday, and plans to impose duties on another $160 billion in mid-December.
  • Footwear, apparel, and consumer electronics such as Apple Watches are now subject to 15% tariffs, while duties on other Chinese imports such as cell phones and laptops have been delayed until December 15.
  • View Markets Insider's homepage for more stories.

The Trump administration slapped tariffs of 15% on $112 billion worth of Chinese goods including footwear, apparel, televisions, and video game consoles on Sunday.

Shoppers are about to feel the pain. Americans could face $1,000 in extra costs a year thanks to the latest US tariffs on Chinese goods, JPMorgan says. The bank pegged the cost of the trade war to consumers at $600 a year without the new duties.

After the president's aides warned him further tariffs could "ruin Christmas," CNN reported, he pushed back duties on another $160 billion worth of Chinese imports such as cell phones and laptops until mid-December.

Together, the tariffs will "significantly" hurt the "wallet of the US/consumer voter ahead of the 2020 election," JPMorgan equity strategist Dubravko Lakos-Bujas and his team wrote in a report dated August 16. That claim is supported by a high-profile study earlier this year, which found the full effect of Trump's tariffs fell on consumers last year.

As a result, the tariffs have major implications for consumer spending — the largest component of US GDP — which has appeared fragile recently. While retail sales climbed 0.4% in July, consumer sentiment posted its sharpest monthly decline December 2012 in August, a University of Michigan survey found.

JPMorgan's $1,000 estimate might prove conservative, given it was based on a projected tariff rate of 10% and Trump has imposed a 15% duty.

Judging from the combative rhetoric from both sides, and their lack of progress in resolving the year-long dispute, the trade war's price tag for consumers could climb even higher.

SEE ALSO: 

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FREE SLIDE DECK: The Future of Fintech

Mon, 09/02/2019 - 7:00am

Digital disruption is affecting every aspect of the fintech industry. Over the past five years, fintech has established itself as a fundamental part of the global financial services ecosystem.

Fintech startups have raised, and continue to raise, billions of dollars annually. At the same time, incumbent financial institutions are getting in on the act, and using fintech to remain competitive in a rapidly evolving financial services landscape. So what's next?

Business Insider Intelligence, Business Insider's premium research service, has the answer in our brand new exclusive slide deck The Future of Fintech. In this deck, we explore what's next for fintech, how it will reach new heights, and the developments that will help it get there.

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Living like a local was the big travel trend 5 years ago. Now, travelers want their experiences to be life-changing, and it's ushering in a new era of 'transformational travel.'

Sun, 09/01/2019 - 12:09pm

Living like a local might have been the trendiest reason to travel five years ago, but that's no longer the case.

The travel industry has, in recent years, been obsessed with "experiential travel," which focuses on cultural exploration and "truly local and authentic experiences," according to industry news site Skift. But according to travel experts, the industry is moving into a new phase.

"'Experiential' would've been the buzzword five years ago," Chris Roche, the business director of a luxury safari company, told Business Insider. "The last couple of years, that's transitioned into 'transformational.'"

The Transformational Travel Council, founded in 2016, defines transformational travel as "intentionally traveling to stretch, learn and grow into new ways of being and engaging with the world."

And according to the Global Wellness Summit's 2018 trends report, it's all the rage right now.

"We've been living in a great age of 'authentic' and 'experiential' travel where even the most mainstream hotel brands aim to help travelers eat, live and spa like a local," reads the report. "Travel experts now argue that 'transformational travel' is the evolutionary wave, which doesn't discard the focus on authentic experiences, but takes it to a deeper emotional level."

Transformational travel can take many forms.

Transformational travel might mean making time for unplanned exploration, restorative wellness activities, or making the effort to learn about the native flora and fauna of a national park you're visiting, according to Jake Haupert, a cofounder of the Transformational Travel Council.

Roche, who handles business development for Wilderness Holdings, owner of Wilderness Safaris, a Botswana-based luxury safari company, says that when it comes to their safaris, transformation comes in the form of reconnection. 

"Our tag line is 'our journeys change lives' and it's been that way for the last 15 years," Roche said. "We sell [people] the ability ... to reconnect with nature and, as a result, reconnect with themselves and their partner or kids or whoever it is they're traveling with."

Wilderness Safaris operates customizable safaris at an average cost of $8,000 for five nights in seven African countries including Botswana, Kenya, and Rwanda. Rather than solely focusing on luxury, the company bills itself as a sustainable ecotourism operator that combines high-end hospitality with conservation and collaboration with local communities. 

Roche says he sees many of their guests changed by their experiences with Wilderness Safaris, which employs locals to work at its camps, buys fresh produce and other products from local communities and helps them expand their capacity to collect rainwater, and runs conservation camps for children.

"[Travelers] see this and they say, 'I can do better. I can be a better version of myself,'" Roche said. "And I think people come here and they get inspired to do that."

Haupert told Forbes that ultimately, transformational travel means people should carry what they've learned on their travels home with them.

"Travel, at its purest, shifts perspectives, unleashes imagination, inspires understanding and cultivates empathy, which in turn promises peace," Haupert said. "... personal transformation results in global transformation."

DON'T MISS: Forget Champagne and infinity pools: High-end travelers today want to make an impact on the places they visit, according to a luxury safari operator

DON'T MISS: There's a new type of traveler dishing out thousands of dollars for high-end safaris. The business director of a Botswana-based company says it’s all because of the millennial tech boom.

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I drove a $109,000 Range Rover hybrid to see if technology could make a difference for an already impressive SUV — here's the verdict

Sun, 09/01/2019 - 12:07pm

  • I recently tested a Range Rover HSE P400e — an expensive, luxury SUV with a nifty hybrid drivetrain.
  • Range Rover is known for solid off-road performance, chic style, and for six-and-eight-cylinder engines and diesels — not drivetrains that get a boost from electric motors.
  • But I found the small-displacement four-cylinder engine in this SUV, matched up with a hybrid system, to be an excellent piece of engineering.
  • Visit Business Insider's homepage for more stories.

Everybody wants SUVs, and some people want fancy, high-end utes. Their needs are being abundantly addressed right now by all the major automakers.

Customers who've always valued premium vehicles that can nonetheless hold up under extreme conditions and handle anything nature throws at them have for decades grooved on Range Rovers (and before them, Land Rovers). These trucks have snoot appeal, but don't be distracted by their upper-crust boosters. We're talking landed gentry here, and the land often didn't have roads.

Range Rover's problem is that it makes vehicles with big gas motors, and the ones that don't fall into that category run in diesel. These are great drivetrains, but they're out of step with a future in which sub-20-mpg vehicles could be effectively outlawed. So Range Rover and its engineers need to begin exploring ways to preserve the brand's DNA while still preparing for day when 5.0-liter supercharged V8s simply won't cut it.

The Range Rover HSE P400e I recently drove is an early effort. It poses a tough question: Can a small-ish hybrid engine get the job done for a Range?

Read on to find out if it can.

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The 2019 Range Rover HSE P400e plug-in hybrid arrived at our suburban New Jersey test center wearing a handsome "Byron Blue Metallic" paint job.

The Range Rover has been in the lineup since the 1970s; the fourth-generation has been around since 2013 and now has a hybrid option. Our tester had enough extras to take the sticker up to $109,000 from an already rich $96,000.

Range Rovers are supposed to revel in their boxy glory, but this example of the core vehicle was made a bit flashier through the addition of some additional flash.

In profile, of course, nobody is going to mistake this vehicle for anything other than a Range Rover. The gorgeous 21-inch wheels are nearly $3,000 extra. You can also clearly see the side vent that's part of a $1,000 "Shadow Exterior Pack."

An air suspension can raise and lower the vehicle, for off-road duty or to ease getting in and out of the cabin.



To a certain extent, Range Rover aesthetics are so constricted by the legacy of the brand that there's only so much design can do to distract from proportion. The rear end isn't a strong point.

It does, however, proclaim utility.

And in addition to unattractive tail lights, the rear harbors a cool feature ...

... A split liftgate!

What you have here is a rolling bench! perfect for yanking on some Wellies before a romp with the hounds.

And yes, our test vehicle came with one of Land Rover's new pet packages, including a collapsible transporter and a water bowl.

I have a dog, but he detests carriers of any sort, so I couldn't really sample this feature. However, it was well-designed and it looked as though it would please a lot of canines.

Under the hood, the Range Rover HSE P400e has a 2.0-liter, four-cylinder engine that makes 296 horsepower, plus a 114-horsepower electric motor that runs off a 13-kilowatt-hour battery. The total power output is 398 horsepower, with a stout 472 pound-feet of torque.

With six-cylinder and V8 Ranges, you're not going to see better than 20 mpg combined. That goes up with the six-cylinder turbodiesel.&

We didn't scientifically evaluate the hybrid's fuel-economy, but it bumps the MPGs up a bit, at least from our observations (the government hasn't yet officially rated the vehicle). We're definitely aren't taking Prius data here. But the hybrid system definitely adds some pop to the relatively modest four-banger, and the solid torque means the hefty, 5,000-pound-plus SUV and still tow more-or-less its own weight.



Jaguar Land Rover says the recharge time from basic 110-volt outlet is 14 hours. With level-two charging at 220 volts, you're looking at something like four hours.

The charge port is located under a hatch in the front grille.

The ebony/ivory interior was elegant and plush without being fussy.

Land Rover and Range Rover are in a tricky position in that they need to combine luxury and durability, for the town-and-country set. These days, there also needs to be a lot of technology. I found the Sport hybrid insides to be generally up the task of carrying the Range Rover name.

The leather-wrapped and bushed-metal-trimmed steering wheel has the usual button-fest to control systems, and the all-digital instrument cluster goes for old-school gauges with new-school information display.

There's also a head-up display that projects essential information directly in front of the driver.

The eight-speed transmission is quite smooth. The gearshift selector is this large knob that rises from the console when the vehicle is fired up and retracts when it's switched off. There are also paddle shifters behind the steering wheel, for manual mode.

The Range's driving modes are managed using this simple interface between the seats. In all-electric mode, it's supposed to be able to operate for 31 miles before returning to internal combustion.

The infotainment and climate-controls are screen-based. The AC/heat and heated and cooled seats are no problem, but the 10-inch TouchPro infotainment screen, while beautifully designed, remains a work-in-progress as far as usability goes.

The dual screen can be configured to display different functions. Everything works, from GPS navigation to Bluetooth and device connectivity, but the tiled interface has a learning curve. The Meridian audio system sounded superb

If it's all too annoying to deal with, Apple CarPlay is there as either a fallback — or first choice.

The rear seats are comfortable, and legroom is pretty good.

The dual-pane moonroof admits a lot of light ...

... And rear-seat passengers have their own climate controls.

So what's the verdict on this high-tech, luxury off-roader?

The real test of the Range Rover, to be honest and evocative of my favorite Roxy Music album, is to explore country life. The carmaker's Terrain Response system enables the four-wheel-drive setup to be configured for a variety of conditions, a legacy of the brand's reputation for formidable offroad capability.

You buy a Range if you seriously intend to bust around the back 40, surmounting hill and dale in wind and rain, perhaps passing weekends with a bit of shooting. You might contend with mud, snow, or ice, and fording a stream could be on the agenda.

But you also buy a Range if you want to tool around the 'burbs in Sloane Ranger style. You could choose a Jeep, but the Range is more elite. It sends the right signals at the school-dropoff line and looks right in certain parking lots.

In that context, does it matter if you're getting 30 mpg or just 20? It doesn't, but for Jaguar Land Rover, a portfolio made up of V6 and V8 SUVs, with some robust diesels thrown in, might not, you know, survive the brave new world of higher emission and fuel-economy standards. Hybridization is a good way for the brand to come into compliance.

That might sound sort of mean-spirited of me, so let me now discuss my favorite aspect of the Range Rover HSE P400e I tested — the drivetrain!

It's a dang four-banger! In a really big truck! And it makes almost 500 pound-feet of torque! I felt like I had a V6 under the hood, at the very least. This feat of engineering has won my undying respect. I'm not sure I'd buy it, but as technological triumphs go, JLR should pat itself on the back and give the folks responsible for this powerplant a bonus.

Otherwise, I tend to be quite taken by Range Rovers, and the HSE P400e was no exception. I've never much liked the infotainment system, but it's more an issue of function than design. But the rest of the machine is superb. Range Rovers are also keeping up with the times; my tester came with a host of driver-assist features, including lane-keep assist, blind-spot assist, and adaptive cruise control.

Yeah, this Range ain't cheap. But it is worth it. And for some owners, the added MPGs and in-town optimization could certainly be very appealing.



Here's how your money could grow if contribute $10, $100, or $1,000 a month to a high-yield savings account at Betterment

Sun, 09/01/2019 - 11:45am

The best high-yield savings accounts live up to all the hype. After all, what more could you need in a savings account than no fees, zero risk, full liquidity, and excellent earning potential

Whether you're building up an emergency fund, saving for a down payment, or preparing for your next Euro trip, it's hard to go wrong with a high-yield savings account.

Currently, online investing platform Betterment offers an industry-leading annual percentage yield (APY) of up to 2.39% on its high-yield savings account if you join the waitlist for its checking account. Otherwise, the interest rate is 2.14%. 

Betterment debuted its Everyday Savings account this summer with an eye-popping 2.69% APY, though it didn't last long. Less than two weeks later, the Federal Reserve announced an interest rate cut of a quarter-percentage point and Betterment slashed its rates too — a good reminder to choose a savings account for all its features, not just the APY.

Despite the rate drop, Betterment's high-yield savings account still earns up to 25 times more than a typical savings account. You need an initial deposit of $10 to open the account, but it's fee-free, allows unlimited transfers, and is FDIC-insured up to $1 million.

To see how an initial balance of $10 plus additional monthly contributions of $10, $100, or $1,000 would grow at the highest interest rate Betterment currently offers, we plugged the numbers into the compound interest calculator on Investor.gov.

Below, you'll see the total balance (your contributions plus your interest payments) at the end of one year and at the end of three years. Note that the interest on this account is compounded monthly.

Also note that the calculation assumes a constant APY of 2.39%, though it's unlikely this would remain the same for up to three years since interest rates are variable

The takeaway: The more you save, the more you earn. While there are rules of thumb for how much you should be saving in retirement accounts and in your emergency fund, financial planners recommend starting wherever you can. No amount is too small, and once you start, it's easier to keep going.

To make saving feel effortless, consider setting up automatic transfers from a checking account or even directly through your payroll provider. When you save off the top, you quickly adapt to living on less.

The Betterment Everyday Checking account is set to become available later in 2019 and will have no maintenance or overdraft fees and no minimum balance. The account comes with a Visa debit card, and Betterment will reimburse all ATM fees for accountholders.

Learn more about the Betterment Everyday Savings Account »

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