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What it's like living as a millionaire in Taipei, Asia's 'stealthy rich city,' where the ultra-wealthy own more than 5 homes each and shop in private VIP fitting rooms

Mon, 05/20/2019 - 3:23pm

  • Taipei, Taiwan's capital city, is ranked the ninth global city by number of ultra-high-net-worth individuals, according to the 2019 Knight Wealth Report.
  • About 1,519 residents of Taipei have at least $30 million in assets, according to the report.
  • But Taipei's rich are not showy, according to Bloomberg, which calls the Taiwanese capital "Asia's stealthy rich city."
  • Millionaires don't flaunt their luxury goods, but they do enjoy buying multiple homes and dining in the city's 24 Michelin-starred restaurants.
  • Visit Business Insider's homepage for more stories.

When you think of wealthy Asian cities, Taipei may not come to mind as quickly as billionaire hotspots like Hong Kong or Singapore.

But the Taiwanese capital is ranked ninth in world cities with the highest number of ultra-high-net-worth individuals, according to the 2019 Knight Wealth Report.

The population of ultra-high-net-worth-individuals has grown by 17% in the past five years, according to the report.

The Taiwanese tend to hide their wealth rather than flaunt it, according to Bloomberg, which calls Taipei "Asia's stealthy rich city."

"Despite the remarkable wealth that the ultra-high-net-worth individuals have amassed, most of them prefer to conduct a modest and low-profile lifestyle, still embracing the Chinese virtue of humility and Confucianism," Kai Chen of Taiwan Sotheby's International Realty told Business Insider. "Unlike their counterparts in 'Crazy Rich Asians,' whilst enjoying shopping for jewelries and luxury goods discreetly, as well as fine-dining, rich Taiwanese are less conspicuous in their approach to consumption."

Taiwan's super-rich do, however, tend to invest in real estate, with the country's wealthy owning an average of 5.4 homes each.

"Taiwanese families will hoard properties when the opportunity presents itself, and not just within Taipei: property investment is basically an addiction!" Chen said.

Here's what it's like living in Taipei as a millionaire.

SEE ALSO: I got access to the richest zip code in the US, an island off Miami where the average income is $2.2 million, the beaches have sand imported from the Bahamas, and the preferred mode of transportation is golf carts. Here's what it looks like.

SEE ALSO: The world's millionaires are more mobile than ever. Here are the top 12 countries they're moving to

Taipei, the capital of Taiwan, is one of the cities with the most millionaire residents in the world.

It's ranked eighth in global cities with the highest number of ultra-high-net-worth individuals, according to the 2019 Knight Wealth Report.

Taipei sits at the northern tip of Taiwan, a small island about 110 miles off the coast of China.

While China claims Taiwan as one of its own territories, Taiwan considers itself an independent democracy that champions human-rights issues. 

Taiwan's parliament just became the first in Asia to legalize same-sex marriage.

The capital, Taipei, is a city of about 2.7 million people.

About 1,519 residents of Taipei own at least $30 million in assets, according to the report.

"Over the decades, Taiwan's booming exports, tech sector in particular, have enabled its entrepreneurs to accumulate a vast amount of fortune hidden in Taiwan and overseas," Chen told Business Insider. 

The Xinyi district is one of the top neighborhoods in Taipei. Millionaires are buying up luxury properties there.

Xinyi, the city's financial hub, is a neighborhood of skyscrapers, luxury condominiums, and high-end restaurants and shopping.

It's also home to the Taipei 101 office tower, the tallest skyscraper in Taiwan and the ninth-tallest in the world at 1,667 feet.

"The Xinyi District, where the commercial center, symbolized by world-renowned 'Taipei 101,' is located, has been a popular neighborhood for new luxury residential developments," Kai Chen of Taiwan Sotheby's International Realty told Business Insider.


Xinyi is the premier shopping district of all Taiwan.

"[Xinyi] boasts the highest density for department stores in the world, with 14 shopping malls in an area of merely 1.53 million sq. m. (or 16.5 million sq. ft)," Chen said. "The area is expected to continue to attract many nouveaux riches homebuyers."

One of the most luxurious shopping centers in the neighborhood is in the Taipei 101 tower.

The seven-story mall includes luxury boutiques like Burberry, Bulgari, Louis Vuitton, Rolex, and Prada, as well as a gourmet food court and a luxury fitness center, World Gym Elite.

Luxury homes in Taipei are still relatively cheap compared to cities like Hong Kong, Singapore, and New York.

"Albeit following a remarkable bull market since 2009, Taipei's luxury properties are still a bargain compared to luxury homes in Hong Kong, Singapore and New York, where luxury homes can sometimes cost more than 1.5 times as much as in Taipei City," Chen said.

The prices of most luxury homes in Taipei range from $1,600 to $2,400 per square foot, as compared to an average of $3,500 per square foot in Singapore and $3,850 in Hong Kong, according to Chen. And in New York City, the average price per square foot for new developments has reached $3,786.

One of the most popular new condominium towers for Taipei's upper crust is One Park Taipei.

One Park Taipei is a two-tower development right next to Daan Forest Park, which Chen calls "Taipei's answer to NYC's Central Park." The tower has already set a record sale price on a per square foot basis in Taiwan, Chen says.

Then there's the Sherwood Fubon, managed by the Marriott Hotel, which sold 31 condos just last year, according to Chen.

But while Xinyi and its upscale condos may be today's hottest real-estate hot spot, Taipei's "old money" tend to prefer living in luxury villas in a quieter neighborhood.

"For affluent old-money families who prefer a more tranquil community and lifestyle, Yangmingshan, 'The Sun-Light-Mountain,' has long been a top choice," Chen told Business Insider. "

Yangmingshan, with nearby Yangmingshan National Park, is only about a 25- to 30-minute drive to Taipei city proper. It's known for its green and picturesque surroundings, according to Chen.

"Yangmingshan and nearby Tianmu community (the 'expat ghetto') are home to many luxury villas occupied by some of Taiwan's wealthiest old-generation of entrepreneurs," Chen said.

But Taipei's richest residents may not bother to choose between the two neighborhoods. In Taiwan, the ultra-wealthy own an average of 5.4 homes each.

According to Chen, "Taiwanese families will hoard properties when the opportunity presents itself, and not just within Taipei: property investment is basically an addiction!"

While the number of millionaires Taipei may be booming, the Taiwanese ultra-rich are not flashy with their wealth.

Many of Taiwan's wealthiest prefer "a modest and low-profile lifestyle," according to Chen, embracing the Chinese virtues of humility as embodied in Confucianism.

"Unlike their counterparts in 'Crazy Rich Asians,' whilst enjoying shopping for jewelries and luxury goods discreetly, as well as fine-dining, rich Taiwanese are less conspicuous in their approach to consumption," Chen said.

Wealthy Taiwanese prefer to do their shopping in private.

Annie Leung, chairman of Bellavita, a luxury mall in Taipei that has a VIP club with private fitting rooms, told Bloomberg that the Hermès store gives shoppers plain brown bags to carry out their goods.

"They don't want to have an obvious orange bag on the street," Leung told Bloomberg. "High-end consumers like to spend their money, but they don't always like to be seen."

But Taipei's rich do enjoy their fine dining.

The city has become one of the top fine-dining destinations in Asia, boasting 24 Michelin-starred restaurants in only the second edition of the Taipei Michelin Guide.

Rather than living extravagant lifestyles, wealthy Taiwanese are obsessed with having a strong work ethic.

Chen describes the mindset of Taipei's upper class as "Work! Work! Work Harder!"

Wealthy Taiwanese are industrious and highly competitive, according to Chen.

"They spend most of their time and energy managing and expanding their businesses, instead of adopting an extravagant or self-indulgent lifestyle," Chen said. "They also value the importance of education and raising their children the 'right' way, setting themselves a fine example of work ethics for their children. They are also well-connected with each other and leverage their network to explore and exploit business opportunities."

Here are some of the major issues that stand in the way of a US-China trade deal

Mon, 05/20/2019 - 3:16pm

  • Trade negotiations between the US and China stalled this month.
  • The US said China reneged on previous commitments in a draft agreement, leading both sides to raise tariffs on each other.
  • Those reversals included the central issues the US raised when it ignited a trade war with China last year: intellectual-property rules, government subsidies, and enforcement mechanisms.

Trade negotiations between the world's largest economies stalled this month after the US said China reneged on previous commitments in a draft agreement, leading both sides to raise tariffs on each other.

According to Reuters, those reversals included the central issues the US raised when it ignited a trade war with China last year: intellectual-property rules, government subsidies, and enforcement mechanisms.

SEE ALSO: The Trump administration is preparing tariffs on $300 billion worth of Chinese goods. Here are all the products that will get hit.

Intellectual-property rules

The US has long accused the Chinese government of facilitating the forced transfer of foreign technology, a claim Chinese officials have denied.

In a 2017 report, the Officer of the US Trade Representative said Chinese theft of American intellectual property cost between $225 billion and $600 billion annually.

Government subsidies

The Chinese government has long sought to support high-tech and industrial companies through large-scale state subsidies, another longtime sticking point in negotiations with the US.

US Trade Representative Robert Lighthizer and other negotiators have worked to eliminate these "market-distorting" practices, which would require China to alter a major structural aspect of its economy.

Enforcement mechanisms

The US has struggled to enforce trade rules with China in the past, and any deal would only add to a list of commitments to track. China has been reluctant to require that its pledges be codified into laws at home, a stipulation Lighthizer views as crucial to a final agreement.

The Trump administration has in the past suggested the prospect of tariffs as leverage, a proposal that would be sure to cast further uncertainty on businesses and consumers. Meanwhile, China has demanded that all tariffs be lifted.


President Donald Trump last week signed an executive order banning communications technology from "foreign adversaries" in a move seen as targeting Huawei Technologies and others that are suspected of having ties to the Chinese government.

Google said it would suspend Huawei's Android license on Monday, drawing further ire from Beijing.


The top false claims Trump makes about trade

Why are Apple Pay, Starbucks’ app, and Samsung Pay so much more successful than other wallet providers?

Mon, 05/20/2019 - 3:01pm

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.

In the US, the in-store mobile wallet space is becoming increasingly crowded. Most customers have an option provided by their smartphone vendor, like Apple, Android, or Samsung Pay. But those are often supplemented by a myriad of options from other players, ranging from tech firms like PayPal, to banks and card issuers, to major retailers and restaurants.

With that proliferation of options, one would expect to see a surge in adoption. But that’s not the case — though Business Insider Intelligence projects that US in-store mobile payments volume will quintuple in the next five years, usage is consistently lagging below expectations, with estimates for 2019 falling far below what we expected just two years ago. 

As such, despite promising factors driving gains, including the normalization of NFC technology and improved incentive programs to encourage adoption and engagement, it’s important for wallet providers and groups trying to break into the space to address the problems still holding mobile wallets back. These issues include customer satisfaction with current payment methods, limited repeat purchasing, and consumer confusion stemming from fragmentation. But several wallets, like Apple Pay, Starbucks’ app, and Samsung Pay, are outperforming their peers, and by delving into why, firms can begin to develop best practices and see better results.

A new report from Business Insider Intelligence addresses how in-store mobile payments volume will grow through 2021, why that’s below past expectations, and what successful cases can teach other players in the space. It also issues actionable recommendations that various providers can take to improve their performance and better compete.

Here are some of the key takeaways:

  • US in-store mobile payments will advance steadily at a 40% compound annual growth rate (CAGR) to hit $128 billion in 2021. That’s suppressed by major headwinds, though — this is the second year running that Business Insider Intelligence has halved its projected growth rate.
  • To power ahead, US wallets should look at pockets of success. Banks, merchants, and tech providers could each benefit from implementing strategies that have worked for early leaders, including eliminating fragmentation, improving the purchase journey, and building repeat purchasing.
  • Building multiple layers of value is key to getting ahead. Adding value to the user experience and making wallets as simple and frictionless as possible are critical to encouraging adoption and keeping consumers engaged. 

In full, the report:

  • Sizes the US in-store mobile payments market and examines growth drivers.
  • Analyzes headwinds that have suppressed adoption.
  • Identifies three strategic changes providers can make to improve their results.
  • Evaluates pockets of success in the market.
  • Provides actionable insights that providers can implement to improve results.
Subscribe to an All-Access membership 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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How first class flying has changed over the past 70 years

Mon, 05/20/2019 - 2:14pm

  • Modern commercial air travel is far from glamorous. For most people, it simply a means to get from point A to point B. 
  • It pales in comparison to the pampered flying experience of during the 1960s.
  • However, the luxury of the Golden Age of air travel is still alive and well in the first class cabins of the world's leading airlines.
  • Brands like Pan Am have given way to Singapore, Emirates, and Etihad
  • Visit Business Insider's homepage for more stories.

Flying these days can be a slog.

For most of us, it's something we tolerate as a means to get from point A to point B. It's no longer a special occasion. For the traveling masses, commercial flying has been reduced down to the essence of what it is, public transportation. 

Things didn't use to be this way. We've all been regaled with tales of the Golden Age of air travel — of the 1960s jet-set that were lavished spacious seats, cosseting service, fine wines, and gourmet meals. 

It puts into sharp relief our quotidian flying experience. 

Read more: I flew on a $10 million Embraer Phenom 300E and I now understand why it's the most popular private jet in the world.

However, the glamor of the Golden Age has not completely gone away. It's still very much alive and well in the first class cabins of the world's leading airlines. In fact, I would argue that the first class experience today is vastly superior to that of decades past. 

First off, flying, in general, is significantly more safe and reliable. According to data from the Flight Safety Foundation, the rate of fatal airliner accidents decreased from 4.2 per 1 million flight in 1977 to around 0.2 per million flights in 2017.  

And then there's the inflight experience. Modern first class cabins offer a greater degree of privacy, comfort, technology, and personalization than the jet set could have ever imagined. With prices that could top $40,000 for a round-trip, these tickets are far from affordable. Then again, neither was first class during the Golden Age of Flight.

Here's a closer look at how first-class air travel has changed over the past 70 years.  

SEE ALSO: 22 famous airlines that have gone out of business

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The age of jet-powered scheduled passenger air travel kicked off in 1952 with the DeHavilland Comet 1. However, a series of fatal crashes between 1952 and 1954 forced the plane to be grounded for modifications. Even though later versions of the jet such as the Comet 3 seen here would go on to serve successfully in airline fleets around the world, it was no longer at the forefront of the industry.

While the Comet was dealing with its troubles, it was overtaken by the Boeing 707 and...

... the Douglas DC-8 as the jet-powered workhorses of the airline industry. The jetliners of the era, while not quite as refined as today's aircraft, were faster and smoother than their propeller-powered contemporaries.

The capabilities of the jetliner served a great complement to the first class services provided by the world's airlines. this includes gourmet meals, ...

... reclining seats, and...

... cocktail lounges.

The introduction of the double-decker Boeing 747 jumbo jet in 1970 took first class service to new heights.

The extra width of the 747's cabin gave airlines the ability to up their games even further.

The first class cabin's gourmet dining and...

... find Champagne remained

But now, there's a spiral staircase leading...

... to the 747's upper deck lounge. Some early jumbo jets were even equipped with pianos.

Between 1976 and 2003, Air France and British Airways passengers had the opportunity to fly on the Concorde supersonic airliner.

Concorde's main selling point was its speed. As a result, its cabin was small and somewhat cramped. However, passengers were treated to fine wines and gourmet meals.

During the 1990s, airlines began to introduce 180-degree lie-flat seats to their first class cabins along with improved in-flight entertainment

By the late 90s, a new generation of first-class cabins with added privacy was beginning to take shape. In fact, they would play a huge role in the development of today's business class seats.

The next leap forward for first class cabins coincided with the arrival of the Airbus A380.

The massive double-decker entered service with Singapore Airlines in 2007.

With the A380 comes the first class suite. The enclosed suite affords passengers an extra measure of privacy.

Two suites can even be merged to create a couple's suite.

Dubai's Emirates is the A380's largest customer with more 100 of the aircraft in the fleet.

They too have launched their own first-class suites.

Included in the offering, the access to an in-flight shower.

However, the ultimate first class experience comes courtesy of Etihad.

In 2014, the Abu Dhabi-based airline introduced the Residence first class suite on board its A380s.

The Resident is a 125-square foot private suite complete with a living room,

... en suite bathroom with shower, and...

... a private in-suite bedroom.

The Residence passengers will also have access to a personal butler. There is only one Residence suite per aircraft, and tickets can cost more than $40,000 for a round trip between New York and Abu Dhabi.

Eithad also offers a 45 square foot first-class suites called The Apartment.

Passengers fly in The Apartment suites have access to a shared shower and...

... a lounge stocked with beverages.

In 2017, Emirates introduced its next generation of first-class suites onboard its fleet of Boeing 777 airliners. They are the industry's first suites that enclosed from floor to ceiling, effectively making then flying hotel rooms.

The suites even come with artificial windows that use cameras mounted to the plane's fuselage to give the passengers a view of the outside world.

In 2017, Singapore Airlines also announced that it will spend $850 million on a new generation of first-class suites for its fleet of 19 Airbus A380s.

Once again, these suites can be joined to create a two-passenger mega-suite.

College is wasting time and money, according to George Mason University economics professor

Mon, 05/20/2019 - 1:44pm
  • Recent studies have found that college graduates earn more than non-college graduates in every state in the US. 
  • But college isn't the best for everyone, argues Bryan Caplan, an economics professor at George Mason University. 
  • Caplan is the author of "The Case Against Education," a book that explains how our current education system in the US fails. 
  • He says the biggest solution to fixing the system is to cut spending on college and pushing instead for vocational education. 
  • Visit Business Insider's homepage for more stories. 

Following is a transcript of the video. 

Bryan Caplan: I think the main thing that we can do is, first of all, look at attendance in college. About 40% of the students are not there. Well the students who are there, if you just go and look at their faces, I mean they generally seem painfully bored.

Josh Barro: Hello I'm Josh Barro, senior editor of Business Insider. And I'm here with Bryan Caplan, who is an economics professor at George Mason University in Virginia. And he's the author of "The Case Against Education: Why the Education System Is a Waste of Money." Most of analysis I read say that what you get back in increase salary, much more than offsets the cost of that education. Is this book a case to people ought not to go to college?

Bryan Caplan: No. It is true that people who finish college, get a good deal. People who dropout on the other hand, it's much less clear that's it's worth their while. But the main thing that I talk about in the book, is that it's not really a good investment from a social point of view, because the main reason why people get this big wage premium, isn't primarily that they are actually learning a lot of useful skills in school. The main reason I say is that they are showing off. They're jumping through hoops, they're impressing employers. Selfishly speaking, it doesn't really matter why your degree pays, but from the point of view of taxpayers, it matters a lot whether people are actually learning useful skills in school, or whether they're mostly just getting a bunch of stickers on their forehead. 'Cause you can't have a whole economy based on stickers.

Barro: What if we think about education as a consumption good? People enjoy going to college. And then there's also a sense that it's, you know, college isn't purely a job training tool. That it helps develop people as humans. Isn't it plausible that's a reason that people care about going.

Caplan: I think the main thing that we can do is, first of all, look at attendance in college. About 40% of the students are not there. Well, the students who are there, if you just go and look at their faces, I mean, they generally seem painfully bored. If the consumption is just socializing with other kids your own age then, maybe that's what people really value. Although, that could happen in so many other ways than in college.

Barro: Let's break this down, this idea, the distinction between the value to the individual, or the degree and the broader social value. You talk a lot about this concept called signaling. Can you explain what that is?

Caplan: When you go to school, you're showing off. You may also be picking up useful skills, but one of the things you do is you just look better than other people. You say, "Look, look at me, I'm able to get this degree from Harvard. "I'm smart, I'm hardworking, "I'm willing to play by the rules." And when you do this, employers are impressed. So, let's say, at minimum, they're a lot less likely to throw your application in the trash. 'Cause of course, that's where most applications go. If everyone had one more degree, then you would need one more degree to get those doors open. And that's really the problem that I'm talking about.

Barro: If most of what the degree is showing as the signal, and we ought to be able to find a way to send that signal that doesn't take four years and cost you more than a hundred thousand dollars. Why hasn't that arisen? You would think it would be in the interest of both the students and the employers to figure out who the right employees to hire where they would be less expensive than that. And yet, we haven't gone in that direction.

Caplan: Education is not just signaling intelligence, which you could, definitely figure out ways of measuring in a short amount of time. See, signaling is a package. You've got intelligence, you've got work ethic, and you've also just got sheer conformity. I'm willing to comply with social norms.

Barro: Let's talk something about solutions. It seems like there should be strong incentives, if the system is so broken for it get fixed. And it doesn't get fixed. So how do we do education more efficiently, more effectively than we do right now?

Caplan: Big thing that I push is just spending less on education. People get so nervous about this idea because they're picturing the thought experiment where one person is denied funding, it ruins your life. If that's what your picturing, that's reasonable. But, what I say, is you know, just picture if, there was this general reduction in the amount of education that the whole society had, and how this would change the way that employers consider applications.

Barro: Your strategy is to cut government funding, so that if people do want to send these signals they have to pay for it themselves. Then you're cutting off people who grew up in poor families who no longer have access to the signal, even if they could have achieved the nonmonetary things there. Doesn't that just leave talented people no longer able to match to employers and the jobs they could do?

Caplan: In terms of, What about some of these poor who no longer is able to afford education and isn't this terrible? Every system is going to have some mistakes. I mean, I just got to be honest and acknowledge that. But, here's the main thing, Would you rather be a high school dropout today? Or high school dropout in 1940? In terms of the penalty, the labor market it hatches. I think it's pretty clear, that the penalty is much greater today. This is really one of the main changes overtime. Yes, we have gone and plucked out the very best students from poor families. But at the same time, we've also greatly increased the stigma against other people from those families that are not inclined to go and get a college degree. And I think if we really want an equitable society, we've got to have to consider not just the really smart kid from poor family, we've got to consider the average kids from poor families. So now I think actually they have a harder time moving up.

Barro: Are there any other countries that you see taking a better approach on this?

Caplan: Yes. Switzerland and Germany I think do a much better job. So they have a much bigger emphasis on vocational education. The main point of vocational education is to teach concrete job skills that's not just to show off. Basically, the idea there, especially for kids that just don't like academics very much, and that's a lot of kids. Lot of kids just find academic excruciatingly boring and they would rather be doing something instead of just sitting and listening some windbag talk. In Germany and Switzerland, when you are in your 13, or 14 , or 15, they go and find kids like this, and give them the option at least of getting trained in particular job skills. Of course there's a lot of people there who are very interested in special courses that so many people do it. It really is fair to say that Germany and Switzerland, managed to have virtually no underclass because they go and listen to kids like that, or at least that they take the resistance seriously and they try to find something that they're good at doing, or they like doing. It's a much more functional system than our own where vocational education is an afterthought at best.

EDITOR'S NOTE: This video was originally published on February 21, 2018. 

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The Future of Payments 2018

Sun, 05/19/2019 - 10:01pm

The payments industry is transforming.

Noncash payments methods are quickly becoming the norm.

Business Insider Intelligence projects digital payments to continue to grow through 2023 and beyond.

This shift has created a battle between incumbents and startups vying to become the leaders of the future of payments.

While incumbents have massive scale to lean on, startups typically offer a much friendlier user experience. Whoever can master both first will win the battle.

That will require navigating four key digital transformations: diversification, consolidation and collaboration, data protection and automation.

In this FREE section of The Future of Payments 2018 slide deck from Business Insider Intelligence, we look at the first key digital transformation: diversification.

Subscribe to Business Insider Intelligence today for full access to the complete deck.

As an added bonus to this FREE section, you will gain immediate access to our exclusive BI Intelligence Daily newsletter.

To get your copy of this free slide deck, click here.

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Deutsche Bank execs reportedly rejected their employees' advice to report transactions involving Trump and Kushner-owned entities to the Treasury Department

Sun, 05/19/2019 - 4:03pm

  • Employees of Deutsche Bank's internal anti-money laundering team recommended in 2016 and 2017 that multiple transactions involving President Donald Trump and his son-in-law Jared Kushner be reported to the Treasury Department's financial crimes unit.
  • When Deutsche Bank employees compiled suspicious activity reports and brought them in front of top executives, the executives rejected their employees' advice.
  • Read the New York Times report here.

Employees of Deutsche Bank's internal anti-money laundering team recommended in 2016 and 2017 that multiple transactions involving President Donald Trump and his son-in-law Jared Kushner be reported to the Treasury Department's financial crimes unit, according to a New York Times report.

Some of the transactions involved Trump's former charitable foundation. The transactions set off an internal system designed to detect the illicit activity, reports The New York Times, citing interviews with five current and former Deutsche employees. When Deutsche Bank employees compiled suspicious activity reports and brought them in front of top executives, the executives rejected their employees' advice.

"You present them with everything, and you give them a recommendation, and nothing happens," Tammy McFadden, a former Deutsche employee, told The New York Times. "It's the D.B. way. They are prone to discounting everything."

McFadden said she had found money moved from Kushner Companies, the Kushner family real estate business, to Russian individuals. She was terminated by Deutsche last year. 

Read more: Jared Kushner reportedly tried to pitch Republicans on a new immigration plan but couldn't answer basic questions about it

Deutsche Bank's dealings with the President and his family have come under much scrutiny as of late. During the 2016 election, Deutsche Bank refused Trump an expansion on a loan to finance work on his golf course in Turnberry, Scotland, The New York Times reported in February.

The bank concluded that Trump's campaign rhetoric made him a risky borrower, and public knowledge of the loan arrangement could hurt the bank's reputation. They also weighed the risks of the possibility that the bank would have to seize a president's assets in the event of a loan default, the Times reported.

And, earlier this year, The Wall Street Journal reported that Deutsche tried to jettison a $600 million loan it made in 2016 to VTB Group, a Russian state-owned bank, amid questions over Russia's meddling in the 2016 election that made Donald Trump president. 

SEE ALSO: Deutsche Bank reportedly scrambled to jettison a $600 million loan it made to a Russian state-owned bank in 2016, amid questions over election meddling

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NOW WATCH: Here are 7 takeaways from special counsel Robert Mueller's Russia investigation

19 books billionaire Warren Buffett thinks everyone should read

Sun, 05/19/2019 - 3:08pm

  • Warren Buffett, CEO of Berkshire Hathaway, loves to read. 
  • When he began his investing career, he would read 600 to 1,000 pages a day.
  • According to Berkshire Hathaway's shareholder letters and over two decades of interviews, these are the books that have guided Buffett's financial wisdom.
  • Visit Business Insider's homepage for more stories.

When Warren Buffett started his investing career, he would read 600, 750, or 1,000 pages of a book a day.

Even now, he says he still spends about 80% of his day reading.

"Look, my job is essentially just corralling more and more and more facts and information, and occasionally seeing whether that leads to some action," he once said in an interview.

"We don't read other people's opinions," he said. "We want to get the facts, and then think."

To help you get into the mind of the billionaire investor, we've rounded up 19 of his book recommendations over 20 years of interviews and shareholder letters.

Drake Baer contributed reporting on a previous version of this article.

SEE ALSO: 14 books Steve Jobs always turned to for inspiration

"The Intelligent Investor" by Benjamin Graham

When Buffett was 19, he picked up a copy of legendary Wall Streeter Benjamin Graham's "The Intelligent Investor."

It was one of the luckiest moments of his life, he said, because it gave him the intellectual framework for investing.

"To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information," Buffett said. "What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must provide the emotional discipline."

Buy it here »

"Security Analysis" by Benjamin Graham and David L. Dodd

Buffett said that "Security Analysis," another groundbreaking work of Graham's, had given him "a road map for investing that I have now been following for 57 years."

The book's core insight: If your analysis is thorough enough, you can figure out the value of a company — and if the market knows the same.

Buffett has said that Graham was the second most influential figure in his life, after only his father.

"Ben was this incredible teacher; I mean, he was a natural," he said.

Buy it here »

"Common Stocks and Uncommon Profits" by Philip Fisher

While investor Philip Fisher — who specialized in investing in innovative companies — didn't shape Buffett in quite the same way as Graham did, Buffett still holds him in the highest regard.

"I am an eager reader of whatever Phil has to say, and I recommend him to you," Buffett said.

In "Common Stocks and Uncommon Profits," Fisher emphasizes that fixating on financial statements isn't enough — you also need to evaluate a company's management.

Buy it here »

"Stress Test: Reflections on Financial Crises" by Tim Geithner

Buffett says that the former US secretary of the Treasury's book about the financial crisis is a must-read for any manager.

Lots of books have been written about how to manage an organization through tough times. Almost none are firsthand accounts of steering a wing of government through economic catastrophe.

"This wasn't just a little problem on the fringes of the U.S. mortgage market," Geithner writes. "I had a sick feeling in my stomach. I knew what financial crises felt like, and they felt like this."

Buy it here »

"Jack: Straight from the Gut" by Jack Welch

In his 2001 shareholder letter, Buffett gleefully endorses "Jack: Straight From the Gut," a business memoir of long-time GE executive Jack Welch, whom Buffett describes as "smart, energetic, hands-on."

In commenting on the book, Bloomberg Businessweek wrote that "Welch has had such an impact on modern business that a tour of his personal history offers all managers valuable lessons."

Buffett's advice: "Get a copy!"

Buy it here »

"The Outsiders" by William Thorndike Jr.

In his 2012 shareholder letter, Buffett praises "The Outsiders" as "an outstanding book about CEOs who excelled at capital allocation."

Berkshire Hathaway plays a major role in the book. One chapter is on director Tom Murphy, who Buffett says is "overall the best business manager I've ever met."

The book — which finds patterns of success from execs at The Washington Post, Ralston Purina, and others — has been praised as "one of the most important business books in America" by Forbes.

Buy it here »

"The Clash of the Cultures" by John Bogle

Bogle's "The Clash of the Cultures" is another recommendation from the 2012 shareholder letter.

In it, Bogle — creator of the index fund and founder of the Vanguard Group, now managing upward of $3 trillion in assets — argues that long-term investing has been crowded out by short-term speculation.

But the book isn't all argument. It finishes with practical tips, like:

1. Remember reversion to the mean. What's hot today isn't likely to be hot tomorrow. The stock market reverts to fundamental returns over the long run. Don't follow the herd.

2. Time is your friend, impulse is your enemy. Take advantage of compound interest and don't be captivated by the siren song of the market. That only seduces you into buying after stocks have soared and selling after they plunge.

Buy it here »

"Business Adventures: Twelve Classic Tales from the World of Wall Street" by John Brooks

In 1991, Bill Gates asked Buffett for his favorite book.

In reply, Buffett sent the Microsoft founder his personal copy of "Business Adventures," a collection of New Yorker stories by John Brooks.

Gates says that the book serves as a reminder that the principles for building a winning business stay constant. He wrote:

For one thing, there's an essential human factor in every business endeavor. It doesn't matter if you have a perfect product, production plan and marketing pitch; you'll still need the right people to lead and implement those plans.

The book has become a media darling in recent years; Slate wrote that it's "catnip for billionaires."

Buy it here »

"Where Are the Customers' Yachts?" by Fred Schwed

"The funniest book ever written about investing," Warren Buffett proclaimed in his 2006 shareholder letter, "it lightly delivers many truly important messages on the subject."

First published in 1940, the book takes its title from a story about a visitor to New York who saw the bankers' and brokers' yachts and asked where the customers' were. Obviously, they couldn't afford them — the people providing the financial advice were in a better position to splurge than the people who followed the advice.

The book is filled with irreverent wisdom and colorful anecdotes about Wall Street, and remains compelling even today.

Buy it here »

"Essays in Persuasion" by John Maynard Keynes

This collection of writings by the legendary economist has remained a staple of financial literature since it was published nearly a century ago.

In Buffett's opinion, it's required reading.

"Reading Keynes will make you smarter about securities and markets," he told Outstanding Investor Digest in 1989. "I'm not sure reading most economists would do the same."

The collection includes the famous essay "Economic Possibilities for Our Grandchildren," in which Keynes predicted that today's generation would only work 15 hours a week.

You can read the full text online.

Buy it here »

"The Little Book of Common Sense Investing" by Jack Bogle

In his 2014 shareholder letter, Buffett recommended reading this book over listening to the advice of most financial advisers.

Based on his own experience working with Vanguard clients, Bogle attempts to help readers use index investing to build wealth.

Fans say it's far from boring, and the stats and charts are balanced with anecdotes and advice.

Buy it here »

"Poor Charlie's Almanack" edited by Peter Kaufman

This collection of advice from Charlie Munger, vice chairman of Berkshire Hathaway, got the ultimate shout-out in Buffett's 2004 shareholder letter.

"Scholars have for too long debated whether Charlie is the reincarnation of Ben Franklin," Buffett wrote. "This book should settle the question."

The book includes biographical information about Munger as well as summaries of his philosophy on investing and talks Munger gave at Berkshire Hathaway meetings and elsewhere.

One such talk is called the "Psychology of Human Misjudgment," in which Munger writes about the cognitive traps that trip up investors.

Buy it here »

"The Most Important Thing Illuminated" by Howard Marks

Marks, chairman and cofounder of Oak Tree Capital, intended to wait until he retired to write this book, as noted in a 2011 Barron's review. But Buffett so admired Marks' client memos that he offered to write a dust-jacket blurb if Marks would publish the book sooner.

The result is "a rarity, a useful book," Buffett reportedly said.

Marks aims to help investors achieve success by putting more thought into their decisions, drawing heavily on his own mistakes and what he learned from them.

Buy it here »

"Dream Big" by Cristiane Correa

Here Correa tells the story of the three Brazilians who founded 3G Capital, an investment firm that joined Buffett in purchasing HJ Heinz in 2013.

Buffett recommended the book at the 2014 Berkshire Hathaway shareholder meeting.

In an interview with The New York Times, Correa highlighted the main principles of 3G's management style — meritocracy and cost-cutting — that paved the way for their current success.

"They trust in people and they let their teams work," she said.

Buy it here »

"First a Dream" by Jim Clayton and Bill Retherford

Jim Clayton grew up the son of a sharecropper in Tennessee and eventually went on to found Clayton Homes, currently the largest producer and seller of manufactured housing in the US.

Buffett credits Clayton's autobiography with inspiring him to invest in Clayton Homes in 2003. In his 2003 shareholder letter, he wrote that the book was a gift to him from students at the University of Tennessee. Buffett told the students how much he enjoyed the book, and they urged him to call Kevin Clayton, Jim's son and the company's CEO, to deliver the praise directly.

"Soon thereafter, I made an offer for the business based solely on Jim's book, my evaluation of Kevin, the public financials of Clayton," and his experience buying "distressed junk" from Oakwood Homes, a retailer of manufactured homes that he later purchased after it filed for bankruptcy.

It's worth noting that Fast Company reported the deal between Berkshire Hathaway and Clayton Homes was a little more complicated than that.

In his "rags to riches" tale, Clayton shares lessons on business and leadership for current and aspiring entrepreneurs.

Buy it here »

"Take on the Street" by Arthur Levitt

In Buffett's 2002 shareholder letter, he explains "how accounting standards and audit quality have eroded in recent years." Specifically, he cites the downfall of Arthur Andersen accounting.

"The details of this sordid affair are related in Levitt's excellent book, Take on the Street," Buffett writes.

A former chairman of the US Securities and Exchange Commission, Levitt not only includes candid anecdotes, but also offers everyday investors ways to protect themselves from Wall Street.

Buy it here »

"Nuclear Terrorism" by Graham Allison

According to Allison, founding dean of Harvard's modern John F. Kennedy School of Government, a nuclear attack on the US is inevitable — unless we change our political strategy.

He argues that the new international security order must be built upon "three No's": no loose nukes, no new nascent nukes, and no new nuclear states.

In his 2004 shareholder letter, Buffett called it a "must-read for those concerned with the safety of our country."

Buy it here »

"The Making of the President" by Theodore White

In a 2016 Politico Playbook interview, Buffett said he loves reading political books, especially this Pulitzer Prize-winning classic published in 1961. (White also published three sequels.)

White chronicles the 1960 race for the presidency that John F. Kennedy ultimately won, from the primaries to the general election. In its attention to detail and to the candidates' personal struggles, the book can read more like a novel — a style of political reporting that at that time had never been seen before.

Writing in The Wall Street Journal, political reporter David M. Shribman said the book "stands out as the most influential political chronicle of the 20th century, perhaps of all time."

Buy it here »

"Limping on Water" by Phil Beuth and K.C. Schulberg

This recommendation from Buffett's 2015 shareholder letter tells the story of Phil Beuth's 40-year career with Capital Cities/ABC-TV. It's a personal recounting of Beuth's journey from a boy afflicted with cerebral palsy, his family struggling to make ends meet, to a top media executive.

In his review of the book, Buffett raved:

"Cap Cities will forever represent the gold standard for ethical corporate behavior accompanied by incredible financial performance. Tom Murphy and Dan Burke [former Capital City/ABC-TV executives] were the architects of these two achievements. Phil Beuth gives you a ringside seat to view this remarkable story." 

Buy it here »

'John Wick 3' dethrones 'Avengers: Endgame' at domestic box office after historic run

Sun, 05/19/2019 - 11:17am

  • Lionsgate's "John Wick: Chapter 3 - Parabellum" had a franchise-best opening weekend with an estimated $57 million to win the domestic weekend box office.
  • It finally knocked off "Avengers: Endgame," which topped the box office for the last three weeks.
  • However, "Endgame" now has a $771 million domestic total, making it the second-best grosser all-time domestically, passing "Avatar."
  • Visit Business Insider's homepage for more stories.


The mighty "Avengers: Endgame" has finally been knocked off the top spot domestically, and it was Keanu Reeves who did it.

The star of the "John Wick" franchise came back with "John Wick: Chapter 3 - Parabellum" this weekend and showed that this hitman's story is still going strong three movies in as the Lionsgate title won the domestic box office with a franchise-best $57 million opening.

Though "Endgame" didn't go out without hitting one more milestone.

With its domestic total at $771 million (it took in $29.4 million over the weekend), the movie is now number two all-time domestically, passing "Avatar" ($760.5 million).

John Wick has certainly come a long way. The first movie in 2014, which followed a hitman trying to get out of the business until someone went and killed his dog, took in $43 million total domestically. Then 2017's "John Wick: Chapter 2" had a $30.4 million opening, which only got the movie to third place that weekend behind "The Lego Batman Movie" taking the top spot and "Fifty Shades Darker" in second place. However, "Chapter 2" did go on to make over $100 million worldwide. And the strong opening for "Chapter 3," blasting past industry projections of $40 million, proves there's no fatigue for Reeves' actioner. It has already made more than the first movie's domestic total, nearly doubled the opening weekend for "Chapter 2," and should end its theatrical run with a franchise-best worldwide.

What the "John Wick" story had going for it was a strong core fanbase to start. The stuntmen who had worked with Reeves previously, Chad Stahelski and David Leitch (who has since gone on to direct "Deadpool 2" and the upcoming "Fast and Furious Presents: Hobbs and Shaw"), proved to be skilled filmmakers who brought action to the screen that fans had never seen before.

And along with "Chapter 3" being a continuation of the dramatic ending to "Chapter 2," audiences were excited to see Reeves team up with Halle Berry (and her dogs who have a specific set of skills).

Read more: 7 upcoming HBO TV shows viewers can look forward to after 'Game of Thrones' ends

This all led to "John Wick" taking down the powerful "Endgame."

Not to mention being perfectly scheduled by Lionsgate on the release schedule, as it opened four weeks into the "Endgame" run, and letting Warner Bros.' "Pokémon: Detective Pikachu" take the first shot at taking down the box office sensation — which didn't succeed. John Wick didn't miss his shot.

SEE ALSO: Inside the editing of "Avengers: Endgame," which included drastic changes to Black Widow's big moment and the time-travel scenes

Join the conversation about this story »

NOW WATCH: These dinosaur puppets come to life in the live 'Jurassic World' show

Breaking up Facebook is just a step on the road to rehab for America's relationship with big companies

Sun, 05/19/2019 - 10:26am

  • Facebook should be broken up because it's anti-competitive, and it uses its power to stay that way.
  • It should also be broken up because it's proof positive of an important idea that America turned away from in the 1970s — the idea that size in and of itself can be corrosive to markets.
  • Since the 1970s, regulators and legal scholars have reasoned that as long as a company doesn't abuse its pricing power, it should be allowed to get as large as it possibly can.
  • Facebook doesn't cost users a dime. But it does use its size and power to avoid regulation and keep users coming back no matter what.
  • Visit Business Insider's homepage for more stories.

Facebook is anti-competitive and the company should be broken up and its industry regulated.

But that's just one step on the way to rehabilitating America's relationship with its biggest corporations — and since the revenues of 500 of the country's biggest companies equal roughly two-thirds of US GDP — it's a step on the way to rehabilitating the American economy.

For the past half century Americans have come to believe that the only way to determine whether or a company is a monopoly is to show that it's using its size to increase prices. It's a hard thing to prove, so in that time we've allowed American companies to becoming bigger and more powerful without questioning the impact that would have on our economy and society.

But now, after a few years of merger mania we see the result of that kind of thinking: many corporations have become too politically powerful to regulate whether they've increased prices or not.

Facebook is the perfect example of this because it doesn't cost users a dime, so no prices haven't gone up.  It has cost us though — in privacy, peace and power. 

Yes, the company is rich and that's some kind of success. But in many ways Facebook is a failure.

Facebook has proven that it can be more detrimental to society than it is helpful without costing users anything. The company has become a power that it seems no one in Washington can control, and no one in Silicon Valley can match.

Now, Americans didn't always think about monopolies in terms of prices. From the turn of the 19th century to the 1970s policymakers used to understand that size was power in and of itself, and so they did what was necessary to ensure that no one corporate entity got too big to manage — from blocking mergers to punishing anti-competitive behavior.

Facebook has to be broken up because it is an example of why our narrow definition of anti-trust has to become more broad. It's time not just to look at whether or not prices are going up, but also at how companies get so big, and the things they do to stay that way. In both cases, Facebook's trajectory and actions have been anticompetitive and abusive.

Know when you need help

To maintain its dominance, Facebook has eliminated many potential competitors — competitors who could be giving users the choice of a healthier, less intrusive, more privacy oriented platform.

When Facebook has been routed in terms of making technology — like when Snapchat created popular face changing features — it just copied its competitors

When Facebook was threatened by Instagram and WhatsApp, it simply used its huge balance sheet to buy the companies out.

When it was threatened by smaller rivals, it used user data against them. Remember Vine? Facebook crippled that app by blocking its friend finding feature.

And when the US government warned Facebook that Russia was abusing its platform to spread misinformation as early as 2011, it did nothing.

All of these are examples of how Facebook has used its size and power to block competitors, but there are even more perks that come with size than that. Facebook, like all massive companies, has collected a lot of political power. It has made friends in Washington, it employs lobbyists to represent it on The Hill.

As presidential candidate Senator Elizabeth Warren (D-MA) pointed out in a speech in 2016, this political power has become another way big companies can block smaller competitors.  

The larger and more economically powerful these companies get, the more resources they can bring to bear on lobbying government to change the rules to benefit exactly the companies that are doing the lobbying. Over time, this means a closed, self-perpetuating, rigged system – a playing field that lavishes favors on the big guys, hammers the small guys, and fuels even more concentration

Policymakers know it's easier to regulate a bunch of smaller companies than it is to go toe to toe with one massive one. This is why breaking up Facebook is a first step. If you think that's too complicated, consider that Wall Street bankers do spin off deals like this all the time, it's just a part of the business of business.

Facebook is not the only company that needs this treatment, and tech is not the only sector either. There are stories about how big companies have used their size and power in ways that hurt society all over the place.

The best argument for why we let companies get so big in the first place is that it's because they're efficient, and when they're not the market is supposed to correct this stuff — but it hasn't. Plus, studies have shown that allowing companies to merge more often than not leads to prices rising more quickly than they would otherwise.

New year, new you

Back in 1890, Sen. John Sherman famously declared: "If we will not endure a king as a political power, we should not endure a king over the production, transportation, and sale of any of the necessaries of life."

He was one of the primary authors of the Sherman Anti-Trust Act, an enduring testament to what America can do when it has the will to curb the excesses of the powerful. Thanks to Sherman and other stalwart trust-busting government officials we have a lot of the tools to curb conglomeratization. We just need to use them, and that requires a change in mindset.

I'll give you an example. Back in 2012, Federal Trade Commission researchers showed that Google used its power to make competitors harder to find on its search engine. The FTC, however, decided to do nothing about it saying simply that their job is not to protect competitors.

It should be the FTC's job, however, to protect competition in and of itself. If regulators had that mindset — the Sherman mindset — it would have ruled against Google.

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Facebook, and all social media, will require new kinds of regulation. Regulation that ensures that new competitors have the space to enter the market with better products, and that user's data is protected and respected as companies grow

The EU is doing this, and if they can do it we can too. Germany, for example, outlawed Facebook's entire ad business reasoning that the way that it tracks users — not just on its own app but also across Instagram and WhatsApp — is too intrusive and gathers too much data.

French regulators are looking into the way Google and Facebook gather data too. Members of UK parliament said the company has "behaved like digital gangsters," and are calling for an anti-trust investigation into the company.

If you're looking for precedent for regulating Facebook a little closer to home, the way the US regulated the burgeoning radio industry back in the 1920s and 1930s serves as an excellent example.

The early days of radio opened airwaves not just to news, but also to demagogues and others who would spread misinformation, and US policymakers that some content was harmful to democracy.

Renowned columnist of the time, Dorothy Thompson, like a lot of Americans recognized the power of the platform, and wrote: "No political body must ever, under any circumstances, obtain a monopoly of radio...The greatest organizers of mass hysteria and the mass delusions today are states using the radio to excite terrors, incite hatreds, inflame masses."

So the radio was regulated. There was the Radio Act of 1927, which gave the government grant and deny radio licenses, among other things. The Federal Communications Commission (FCC) was founded in 1934 and placed the radio under Congressional oversight.

All of this is to say that the US has recognized the power of speech on a platform before and regulated it. We can do that for social media. Now, as then, it will be a process. The best way to start is by breaking up Facebook.

Join the conversation about this story »

NOW WATCH: If you're going to see the 3-hour-long 'Avengers: Endgame,' plan your bathroom break wisely. Here's what can happen if you hold your pee too long.

THE MONETIZATION OF OPEN BANKING: How legacy institutions can use open banking to develop new revenue streams, reach more customers, and avoid losing out to neobanks and fintechs

Sun, 05/19/2019 - 10:04am

Open banking has arrived, and it's transforming the UK's banking landscape — next up could be the world. Regulatory efforts in the UK are transforming retail banking, reshaping incumbents' relationships with customers, and easing entry for fintechs.

Regulators across every continent are responding with actions of their own. Underpinning open banking initiatives is the idea that ownership of transactional data belongs to consumers instead of incumbent financial institutions.

The implications of this change for established lenders in the UK are significant. For those that act, open banking presents substantial revenue-generating opportunities.

But the consequences of inaction are even more severe: Business Insider Intelligence estimates that by 2024, £6.5 billion ($8.4 billion) of UK incumbents' revenues will be under threat of being scooped up by forward-thinking companies like fintechs and neobanks. Yet even through the financial incentives to act are clear, many incumbents are struggling to determine the best path to monetization. In fact, some aren't even sure what their options are.

In The Monetization of Open Banking report, Business Insider Intelligence identifies monetization strategies incumbents have at their disposal, describes how they can determine the best approach for their specific needs, and outlines actionable steps they need to make their chosen open banking initiative successful.  

The companies mentioned in this report are: Allied Irish Bank (AIB), Bank of Ireland, Barclays, Danske Bank, HSBC, Lloyds Banking Group, Nationwide, RBS Group, and Santander, Monzo, Starling, ING, Yolt, Fidor, BBVA

Here are some of the key takeaways from the report:

  • Driven by regulatory action, open banking is transforming the UK's banking landscape, but it's also gaining momentum globally.
  • For incumbents, open banking entails a significant threat to their entrenched position.
  • But for forward-looking banks, there are substantial opportunities for revenue generation, both directly and indirectly.
  • To seize these opportunities — and avoid losing revenue to fintechs and neobanks — it's critical that legacy players focus their efforts in the right direction, including identifying their strategic priorities.

 In full, the report:

  • Details the UK's Open Banking regulation in depth.
  • Forecasts the size of the UK's Open Banking-enabled banking industry over the next five years.
  • Discusses the types of monetization opportunities available for incumbents, as well as non-direct revenue-generation opportunities.  
  • Provides actionable steps on how banks can best determine the best strategic approach from the options available.

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 more than 250 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.

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This VC fund is betting $105 million on Texas tech startups as more talent leaves Silicon Valley for the Lone Star State

Sun, 05/19/2019 - 9:45am

  • LiveOak Venture Partners thinks there's a goldmine in the Texas tech scene.
  • The investment firm has focused on Lone Star State startups and plans to use its new $105 million fund to back more of them.
  • Founding partners Krishna Srinivasan and Venu Shamapant say the ecosystem has matured in Texas and there's plenty of tech talent there, many of it in the form of California ex-pats.
  • Visit Business Insider's homepage for more stories.

Silicon Valley has long been the heart of the tech industry. But if you ask Krishna Srinivasan or Venu Shamapant, there are plenty of tech business opportunities in the heart of Texas.

Srinivasan and Shamapant are two of the founders of LiveOak Venture Partners, an Austin, Texas, based investment firm that focuses on startups in the Lone Star State. Last month, the firm finished raising $105 million for its second fund, which it plans to invest in nascent Texas tech companies.

"We see tremendous opportunity here in the state of Texas for early-stage investing," Shamapant told Business Insider in an interview earlier this month.

Part of the reason why LiveOak is bullish on the local market is because the tech ecosystem in Texas has matured and the state offers some big advantages, Srinivasan said.

Texas has a host of major corporations that are headquartered there, including more than 50 of the Fortune 500. LiveOak sees a lot of opportunity for startups developing software and tech services for those corporations — and a good number of people coming out of those companies looking to form startups to address their needs, Srinivasan said.

Texas is luring people from California

Additionally, there are a lot of people there who have now served as the no. 2 or no. 3 executive at other startups who are now looking to start their own companies, he said. And there also are plenty of people who have experience in the tech industry, whether at startups or at big companies, who have moved to Texas in recent years, especially from California, he said. 

"Texas is at a pretty interesting tipping point here with respect for talent," he said.

California and Texas have a longstanding rivalry. Former Texas Governor Rick Perry famously encouraged California companies and people to decamp to his state. And Austin has long sought to market itself as Texas' version of Silicon Valley.

However, the Bay Area still gets the lion's share of tech venture investing, and is home to many of the biggest tech firms, including Apple, Google, and Facebook. Meanwhile, many companies have relocated from other parts of the country or world to Silicon Valley.

But in Shampant's experience, few Texas companies have made that move. Most of LiveOak's portfolio companies have have set up sales or small tech offices in the Bay Area. But its "very seldom" that a Texas company would move its headquarters there, he said.

"Most of the traffic, I would argue, is the other way around right now," he said.

Got a tip about startups, the venture-capital industry or tech? Contact this reporter via email at, 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: This pitch deck helped raise $43 million for a startup with a new twist on the biggest trend in software development

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NOW WATCH: Facial recognition is almost perfectly accurate — here's why that could be a problem

Here's how an enterprise software vet and his team have built a $1 billion business with $100 million in annual revenue by putting its own twists on Salesforce for big businesses (CRM)

Sun, 05/19/2019 - 9:45am

  • Vlocity is one of the most successful developers on Salesforce's platform.
  • The San Francisco startup customizes Salesforce's service for companies in five industries, including telecommunications and health care.
  • Company CEO David Schmaier and his core team did something similar with great success at Siebel Systems in the 1990s and 2000s.
  • Investors are recognizing its promise; it recently secured a $60 million funding round that valued it at $1 billion that was co-led by Salesforce Ventures itself. 
  • Visit Business Insider's homepage for more stories.

When David Schmaier attended Salesforce's Dreamforce conference in fall 2013, he was hoping to find a startup to buy — not to found a company himself.

At the time, Schmaier was on the board of a private equity firm, but he had a long history in the enterprise software industry, and specifically in the customer relationship management part of it, which forms Salesforce's core market. Thirty years earlier, he had been one of the first employees at customer relationship management (CRM) software pioneer Siebel Systems, and had overseen its effort to customize its software for particular industries.

With Salesforce's cloud-based service supplanting traditional CRM software, Schmaier was convinced there was an opportunity to repeat what he'd done decades before. In 2007, some of his former colleagues had formed Veeva, which was customizing Salesforce's CRM system for pharmaceutical and biotechnology companies. Schmaier thought for sure six years later he'd find other startups at Dreamforce working on customizing Salesforce for other industries.

But other than Veeva, he didn't find any.

He realized "that there really was no company to buy, that you really had to start it yourself," Schmaier told Business Insider in a recent interview.

A 'rocketship'

Having done CRM customization before, he was convinced he was the best person to start a company that would focus on it for the future.

So Schmaier got together with some of his former colleagues from Siebel and founded Vlocity. Instead of focusing narrowly, like Veeva did, or on more than 20 industries, like he had done with Siebel, Schmaier decided that Vlocity would customize Salesforce for a diverse but focused collection of some of the biggest industries around, including telecommunications, insurance, and healthcare.

He may not intended to start a company originally, but his bet has paid off. San Francisco-based Vlocity now has 700 employees and counts among its customers a slew of household names and major corporations and organizations, including Verizon, Anthem, Allstate, the government of Canada, and the US Department of Agriculture. It's already hit $100 million in annual revenue. And, according to Schmaier, Vlocity is the fastest-growing company ever to be built on top of Salesforce's technology platform.

"The company's going great," he said. "It's really kind of a rocketship."

Vlocity system essentially plugs into Salesforce's. Depending on the industry a customer participates in, Vlocity's service will add particular modules to its Salesforce dashboard. So, a telecommunications company might have a module that provides a graph their representatives can view that shows a customer's devices and service options. For insurance companies, Vlocity offers modules that allow them to add items such as customers' policies and coverages.

Vlocity customizes Salesforce, saving clients time and effort

Vlocity offers a standard set of modules across industries. Beyond the default batch, customers can pick and pay for which ones they need. But they can also customize the particular modules to match their workflows and business processes. The company's service is cloud-based, and the startup updates it monthly with new features.

That's a big advantage for Vlocity and its customers, said Rebecca Wettemann, an analyst at Nucleus Research who covers the CRM market.

"The cloud model offers greater usability and greater flexibility, and the ability to change over time," she said.

Although Vlocity has several competitors, including Amdocs and Zipari, many of them focus on just one or two industries. Some companies have chosen in the past to create bespoke CRM systems or customize generic ones, including Salesforce, by tapping their own developers or by hiring one of the big consulting firms.

By offering CRM features that are industry specific, Vlocity can help such companies save the time and cost of creating such customized services as well as the ongoing cost of maintaining them, industry analysts said. As such, the company's service fills a critical niche for Salesforce in particular and for its customers, said Olive Huang, an analyst who focuses on the CRM industry for research firm Gartner.

"Salesforce by itself without industry templates will cost the companies too much on customization, implementation will be too long and the total cost of ownership will not be competitive," Huang said.

It's one of the latest tech unicorns

While Vlocity isn't exactly a household name, it's already caught the attention of investors. The company has raised more than $160 million in venture funding to date.

Salesforce Ventures, the cloud giant's investment arm, was an early backer of Vlocity. In March, Salesforce Ventures co-led Vlocity's latest funding round, a $60 million Series C that gave the startup a valuation of more than $1 billion and made it one of Silicon Valley's latest unicorns.

It's no wonder why, either. Services like those offered by Vlocity make the larger Salesforce platform more palatable to a wider swath of customers, broadening the potential audience for both companies. 

Its other backers include consulting behemoth Accenture, Sutter Hill Ventures, Bessemer Venture Partners, and New York Life, which is one of Vlocity's key customers.

When considering potential investments, Wildcat Venture Partners evaluates them on four key criteria, or pillars — their product, revenue, business systems, and executive team, said founding partner Bruce Cleveland in a recent blog post. Schmaier put together a team that's not only has deep experience in the industry but also with fast-paced growth, Cleveland said. And Vlocity is offering a product that's built on top of Salesforce's successful platform and offers an obvious value to its business customers.

"With all four pillars covered, it was hard to envision Vlocity not succeeding," Cleveland said.

Schmaier is building a global company

The company's biggest challenge going forward is a geographic one, said Gartner's Huang. Salesforce is expanding rapidly around the world and is going to want to be able to offer potential customers a service that's tailored for their businesses or industries.

Vlocity could find it difficult to meet that demand, she said. Some of the industries for which it offers its service are covered by regulations that can vary from country to country, meaning that Vlocity may have to customize its offerings not just by industry but by locale as well.

"If they can't follow Salesforce [quickly] enough, Salesforce will not wait for the market to be taken by competition," Huang said. "So Salesforce will likely ... develop an industry cloud themselves, or give the business to a different ... partner."

Read this: This VC says a shakeout is coming to enterprise software because titans like Oracle and Salesforce have 'account control' that no startup can match

For his part, Schmaier doesn't seem worried about that. Vlocity is already offering its service in 20 countries around the world and counts among its customers some major international companies, including Sky Italia, France's Orange, and Canada's Rogers.

"This is an incredibly global company," he said.

Salesforce is a key partner — and a potential competitor

What's more, Salesforce is Vlocity's largest outside investor and has been supportive of what the company is doing, Schmaier said. The two companies' arrangement allows Salesforce to focus on building out its platform and Vlocity to focus on customizing for particular industries.

"Everybody does what their good at," he said. There's nothing to stop Salesforce from getting into Vlocity's market, he continued, "except for if we're good at it, and the customers are happy, and if we're driving value and revenue for them, and they're an investor, I think that's reason enough for them to work with us, versus the alternative."

And the company plans to use some of its new funds to continue its global expansion, Schmaier said. Last year it set up shop in parts of Asia and Latin America, and it plans to fill out its sales teams in those areas.

It also plans to use the new funds to continue to build out new modules and features for its service, he said. Its service collects more data for customers than does Salesforce alone, and Vlocity wants to help customers tap into Salesforce's artificial intelligence and data analysis capabilities to help make sense of it, he said. He thinks that's going to be important to Vlocity's customers.

"This is kind of the core operating system ... for each one of these industries," Schmaier said. "This is like the core DNA of how you run a telco, or how you run an insurance company."

Got a tip about tech? Contact this reporter via email at, 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.

Read more about enterprise software and services:

SEE ALSO: Parker Conrad thinks he can beat Zenefits, the company he founded, and he just got $45 million in funding to prove it

Join the conversation about this story »

NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war

Billionaire hedge-fund manager Steve Cohen just sold his New York City condo for $33.5 million. Take a look inside the West Village triplex, which sold after just 32 days on the market

Sun, 05/19/2019 - 9:30am

Billionaire hedge-fund manager Steve Cohen just sold his New York City luxury condo for $33.5 million.

The condo, which is in the Abingdon, a luxe condominium building in the West Village, is nicknamed the "Abingdon Mansion." It sold after just 32 days on the market, according to Christie's International Real Estate, which represented the sale.

Cohen, who's worth an estimated $12.8 billion, runs investment firm Point72 Asset Management.

The sale was represented by Erin Boisson Aries from Christie's International Real Estate.

Here's a look at the three-story luxury condo. 

SEE ALSO: Jeff Bezos is reportedly looking to drop $60 million on an NYC apartment, but he already owns 4 condos in the city — look inside the building where he owns $13 million worth of real estate

DON'T MISS: I toured a $39.5 million triplex penthouse in an iconic NYC building that's beloved by celebs and musicians. From the futuristic lobby to the Elon Musk-inspired study, it was unlike anything I had ever seen.

Billionaire hedge funder Steve Cohen just sold his three-story New York City condo for $33.5 million.

Source: Christie's International Real Estate

Cohen's condo is located in The Abingdon, a luxe condominium building on West 12th Street in Manhattan's West Village neighborhood. The building was designed by acclaimed architect Ralph S. Townsend, constructed in 1906, and later turned into a boutique condominium residence in 2013.

Source: Christie's International Real Estate

Cohen's lavish triplex apartment was marketed as a "mansion condominium" and is often nicknamed the "Abingdon Mansion" in the media.

Source: Christie's International Real Estate, MSN

It was designed to showcase art on its large, gallery-like walls.

Source: Christie's International Real Estate

"The gallery walls throughout the residence are appointed with integrated museum-quality lighting for the display of a sizeable collection," Erin Boisson Aries of Christie's International Real Estate, who represented the sale, wrote in the listing.

Source: Christie's International Real Estate

A white Carrara marble staircase with wrought-iron railings spirals up from the main level to the second floor.

Source: Christie's International Real Estate

The home's great room has ceilings that are more than 12 feet tall.

Source: Christie's International Real Estate

Oversized picture windows can be found throughout the condo.

Source: Christie's International Real Estate

The spacious formal dining room can accommodate one long dining table or multiple smaller tables.

Source: Christie's International Real Estate

The dramatic black-and-white chef's kitchen includes a separate butler’s pantry.

Source: Christie's International Real Estate

The first floor includes a library.

Source: Christie's International Real Estate

The condo's corner master bedroom suite spans more than 1,200 square feet.

Source: Christie's International Real Estate

The master bathroom is outfitted almost entirely in white marble.

Source: Christie's International Real Estate

The suite also comes with massive his-and-hers dressing rooms.

Source: Christie's International Real Estate

On the lower level of the condo is a large private gym, as well as an en suite guest room, a recreation room, and a laundry room.

Source: Christie's International Real Estate

Cohen's condo sold at its asking price of $33.5 million only 32 days after going on the market, making it the quickest resale in New York City for apartments over $6 million so far in 2019, according to Christie's.

Source: Christie's International Real Estate

Here's exactly how to tell if you need a financial advisor, a robot, or nobody at all

Sun, 05/19/2019 - 9:30am

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.

Money can be complex and intimidating, no matter how much or how little you have.

If you've considered seeking professional financial help but don't know where to start, first identify exactly what it is you want to accomplish. Do you want to start investing or invest more money? Do you want to know how much you need to save to retire at 65? Do you need advice for paying off debt? Are you wondering how much life insurance you need?

The truth is that some financial decisions call for reinforcement; others, you can probably handle on your own — at least for now.

Financial advisor is a catch-all term that usually includes financial planners and investment advisors. It's imperative to look for financial advisors who follow the fiduciary rule, meaning they operate in their clients' best interest, and are fee-only. This means client fees are their only compensation and they don't earn commission when you invest in certain funds or buy financial products.

A good certified financial planner can help organize your overall financial picture, including setting up a retirement saving and investing strategy; planning for big expenses, like buying a house or having kids; everyday budgeting and spending; plus tax and estate planning.

Considering a financial advisor? SmartAsset's free tool can help you find a licensed professional near you »

You may also consider hiring a financial planner if you're too overwhelmed or confused by your money to make big financial decisions, including how to balance multiple financial goals, manage a business, get out of crushing debt, or establish a retirement savings plan. If the alternative to meeting with a financial planner is decision paralysis, you're better off seeking outside advice.

Investment advisors typically focus on the nuances of your investment strategy, such as what stocks or funds to buy in and out of your retirement accounts and how to minimize taxes. They can also manage your investments, but usually charge a fee of 0.5% to 2% of the portfolio.

You don't have to be a sophisticated investor with millions in the market to have an investment advisor, but you probably don't need one if you just want to know how to invest a few thousand dollars or which funds to choose in your retirement accounts.

A robo-advisor is often a cheaper alternative, and some even provide access to human investment advisors or financial planners for an extra fee.

Robo-advisors like Wealthfront, Betterment, and Ellevest set up and automatically rebalance an investment portfolio for you based on your goals and risk tolerance, and the annual management fee is just 0.25% of your account balance. Robo-advisors can be a valuable tool for the average person with a long-term outlook who truly wants to "set and forget" their investments.

SmartAsset's free tool can help you find a licensed financial advisor near you »

Join the conversation about this story »

NOW WATCH: Tesla has a mini Model S for kids that costs $600, and this family bought it to teach their child about driving electric

Millennials have helped take credit-card popularity back to full throttle. Banks are getting nervous and starting to crack down.

Sun, 05/19/2019 - 9:21am

  • America's credit-card party has roared back to full throttle, thanks in part to young borrowers.
  • Credit cards, long the most popular form of consumer credit, declined after the financial crisis, especially among people in their 20s.
  • That trend reversed in recent years as banks loosened up lending standards and rolled out travel rewards cards that lured millennials back into the fold. 
  • Credit-card debt has hit record highs and delinquencies have notched higher in recent years.
  • These developments late in the economic cycle have made some card issuers nervous, and they've been getting stricter about who they'll let open an account.
  • Visit Business Insider's homepage for more stories.

Credit cards have made a comeback in the United States, thanks to millennials.

Plastic credit has long been popular in the US, at least in terms of its ubiquity. But usage plummeted after the crisis in 2008, when banks reeled in their credit lines and more strictly policed to whom they'd hand out cards and lawmakers issued a litany of changes to the industry to weed out predatory credit-card lending practices.

That meant an especially acute decline in credit-card participation among people in their 20s, from 55% having an open account precrisis down to 41% in 2012, according to the Federal Reserve Bank of New York.

But as the economy brightened, banks loosened up their lending criteria, enticing rewards cards offering gobs of free travel flooded the market, and young millennials hopped back on the bandwagon.

Now, 52% of people in their 20s have an open account, while overall credit-card prevalence has jumped back above 60%, according to the Fed. Total credit-card debt in the US reached a record $870 billion at the end of 2018.

In short, a youth movement has helped the credit-card party roar back to full throttle.

The problem with younger borrowers, however, is they tend to be less responsible than more seasoned, career-steady consumers. So credit-card defaults have been on the upswing as well, especially among 20- to 29-year-olds.

"Credit card delinquency rates have been trending upward in the past few years — likely reflecting, in part, the increased presence of younger borrowers in the credit card market," the Fed wrote in a recent report

All of this appears to be making some card issuers nervous, and they've been reining in the exuberance and cracking down on who can open an account. 

More than 15% of senior loan officers in the Federal Reserve's latest survey said they'd tightened their credit-card lending standards in the first quarter. Banks started getting stricter about two years ago, when defaults and delinquencies started to tick up, but this is the largest shift since 2009, according to Warren Kornfeld of Moody's.

It's not just defaults weighing on card executives' minds, but also the glaring fact that we're 10 years into the bull market that has to end sooner or later. 

Card companies "understand where we are in the credit cycle, and they don't want to be doing things now that will come back to haunt them when we eventually have that down cycle," Kornfeld said. 

Among other measures, card companies are closing accounts with little or no activity, as they don't want people hoarding credit until they face financial distress. And they're also cutting back on new-balance transfers, wherein a customer can move outstanding credit-card debt to a different issuer for 0% teaser interest rate for an introductory period — a product with more risk and less upside heading into an economic climate in which consumers are more likely to default.

"Especially when you're in late cycle, you do have to be concerned about focusing on customers where you're only going to make money when the economy does well," Kornfeld said. 

The story isn't even among the largest card issuers — American Express and Discover both grew card loans at a healthy clip in the first quarter, though the growth has been slowing since the third quarter of 2018.

Excluding those two, loan growth was just 3.2%, or slightly above GDP forecasts, in the first quarter, according to Kornfeld, with Capital One, Bank of America, and Citigroup pulling up the rear among large issuers.

The American borrower is still in a good place, with robust employment, wage, and consumer confidence levels. 

But banks are nonetheless keeping a watchful eye on credit-card borrowers, and some people, especially younger millennials, may find it tougher to open a new card as result. 

Join the conversation about this story »

NOW WATCH: The legendary economist who predicted the housing crisis says the US will win the trade war

We drove a $38,000 Subaru Crosstrek Hybrid to see if it's worth the money. Here's the verdict.

Sun, 05/19/2019 - 9:07am

  • The Subaru Crosstrek is one of the more popular compact crossovers on the market today.
  • Based on the compact Impreza hatchback, the Crosstrek is a tweener that straddles the compact crossover and subcompact crossover segments of the market.
  • The Subaru Crosstrek comes standard with a 152 horsepower, 2.0-liter horizontally-opposed four-cylinder engine. While the Hybrid trim gets a detuned version of 2.0-liter engine mated to a pair of electric motors and an 8.8 kWh lithium-ion battery pack with a total system output of 148 horsepower.
  • We were impressed by our Crosstrek Hybrid test car's fuel economy, standard safety features, and more perky acceleration. However, the Hybrid was held back by its steep price tag and limited cargo space.
  • The base 2019 Subaru Crosstrek 2.0i starts at $22,895 while the 2.0i Premium trim adds $1,000 to the price tag. The more luxurious 2.0i Limited trim starts at $27,195 while the top-of-the-line Hybrid starts at $34,995. Including options and fees, our Crosstrek Hybrid came with an as-tested price of $38,470.
  • Visit Business Insider's homepage for more stories.

The Subaru Crosstrek is one of the more popular compact crossovers on the market today. Based on the compact Impreza hatchback, the Crosstrek is a tweener that straddles the compact and subcompact segments of the market.

At 175.8 inches in total length, the Crosstrek is 6.7 inches longer than the subcompact Honda HR-V but 5.7 inches shorter than the compact Subaru Forester SUV.

Read more: We drove a $32,000 Subaru Forester that rivals the Honda CR-V and the Toyota RAV4. Here are its coolest features.

Since its debut in 2013, the little Subie has developed into somewhat of a cult favorite for those in the market for a no-nonsense, fuel efficient, all-wheel-drive crossover. 

With a starting price of just under $22,000, the Crosstrek is an entry-point into Subaru's lineup of crossover SUVs that now includes the Forester, the Outback wagon, and seven-passenger Ascent. 

In 2018, Subaru rolled out a new second-generation variant of the Crosstrek. A year later, the Japanese automaker followed up with a plug-in version of the Crosstrek for the 2019 model year— the first plug-in hybrid in Subaru history. 

Recently, Business Insider had the chance to spend a week with a 2019 Subaru Crosstrek Hybrid clad in a brilliant Lagoon Blue Pearl paint job. 

The base 2019 Subaru Crosstrek 2.0i starts at $22,895 while the 2.0i Premium trim adds $1,000 to the price tag. The more luxurious 2.0i Limited trim starts at $27,195 while the top-of-the-line Hybrid starts at $34,995.

Including options and fees, our Crosstrek Hybrid came with an as-tested price of $38,470.

Here's a closer look at the 2019 Subaru Crosstrek Hybrid: 

SEE ALSO: We drove a $40,000 Mazda CX-5 Turbo to see if it's the perfect compact SUV. Here's the verdict.

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The Subaru Crosstrek Hybrid is all-new for 2019. With a starting price of $34,995, the Hybrid trim occupies the top of the Crosstrek range.

Aesthetically, the hybrid Crosstrek is more or less identical to its conventional siblings. Only the presence of a charging port, blue headlight projector rings, silver body accents, and a few hybrid decals set it apart.

Here's the charging port located on the left rear quarter panel.

In fact, all Crosstreks can trace its lineage back to the Subaru Impreza hatchback.

In effect, the Crosstrek is a beefier version of the Impreza hatchback.

In many ways, the Crosstrek is to the Impreza what the Subaru Outback is to the Legacy wagon.

The Crosstrek's styling is punctuated by increased ride height, a pronounced front overhang, and aggressive body cladding.

The rear of the Crosstrek features short overhangs, a roof spoiler, and lower body cladding.

The Crosstrek also delivers a stout 8.7 inches of ground clearance, same as the larger Forester SUV.

The Crosstrek Hybrid also comes with these funky 18-inches wheels.

The Crosstrek's interior is virtually identical to the Impreza hatchback on which it is based. In fact, it will instantly feel familiar to anyone who's been in a Subaru.

Since the Hybrid occupies the highest echelon of the Crosstrek lineup, our test came with contrasting blue and gray leather along with blue accent panels.

Much like the other Subaru's we've tested recently, the material quality is impressive. The leathers and plastics used may not have been the softest or the most refined, but they all gave you feeling that it was built to survive the rigors of life.

In front of the driver is a heated leather-wrapped steering wheel with controls for everything from the audio system to the drive mode selector. The buttons are clearly labeled and thoughtfully placed.

The Crosstrek Hybrid features a simple but useful gauge cluster with a 4.2-inch digital information screen flanked by a pair of analog gauges.

The Crosstrek, like the Forester and Ascent, features not one, but two infotainment screen.

Our tester came with an eight-inch touchscreen running Subaru's Starlink infotainment system. Lower trim levels come standard with a 6.5-inch unit. Starlink has become one of our favorite mass market infotainment systems. Its simple, no-nonsense design and high feature content really impressed us.

The system features a built-in navigation system, a slew of media sources, satellite radio, as well as Pandora and Aha app integration.

Starlink also features Apple CarPlay and Android Auto integration.

It's also home to the Crosstrek's rear view camera.

The secondary display, which is controlled using the "Info" button on the left side of the steering wheel, is just as useful. It offers readouts of the vehicles trip computer, radio,...

... secondary gauges, ...

... navigation,... information,...

... hybrid drive system status, and...

... the status of the Crosstrek's various advanced safety systems.

Speaking of safety systems, all Crosstreks come standard with Subaru's EyeSight suites of driver's assistance technology that includes adaptive cruise control, automatic pre-collision braking, lane departure warning, and sway warning with lane keep assist. The system, which uses a pair of cameras located on either side of the rear-view mirror, worked really well and is a major selling point for Subaru.

Our test car also came with blind spot detection with lane change assist along with rear cross traffic alert. 

The second row is where the Crosstrek's compact hatchback roots really become evident. With 37.4 inches of headroom and 36.7 inches of legroom, it's significantly less roomy than taller crossover SUVs.

With that said, the rear cabin will fit two full-size adults and the seats are fairly comfortable.

An optional moonroof helps bring added light into the cabin, but we do wish the Crosstrek could be had with the Forester's panoramic glass roof.

Open up the rear liftgate and...

... you'll find an unimpressive 15.9 cubic feet of cargo space behind the rear seats. That's down from the 20.8 cubic feet found on other Crosstreks due to the presence of the lithium-ion battery pack. Fold down the rear seats, and the Hybrid's cargo capacity increases to 43.1 cubic feet.

That space is further reduced by the charging cable.

There is a small storage nook in under the main cargo floor.

Most Crosstreks are powered by a 152 horsepower, 2.0-liter, naturally aspirated horizontally opposed four-cylinder engine. The Crosstrek Hybrid gets a detuned version of the engine with 137 horsepower that mated with two electric motors and an 8.8 kWh lithium-ion battery pack. The total system output of the hybrid is 148 horsepower.

The hybrid drive system features two electric motors. One is used as a starter motor and as a generator to recharge batteries. The other helps powers the car itself while providing charge for the battery pack during regenerative braking.

All Crosstrek Hybrids are equipped with a continuously variable transmission sending power to all four wheels via Subaru's Symmetrical All-Wheel Drive system. Non-hybrid Crosstreks can be had with a six-speed manual transmission.

The 8.8 kWh battery pack can be fully charged in two hours using a 240V plug or five hours using a 120V plug. According to Subaru, the Hybrid can drive 17 miles using only electricity and up to 480 miles in hybrid mode.

So how does it drive?

It's not terribly exciting, but it's also not painfully slow. 

One of the great complaints people have about the of Subaru Crosstrek has long been its tepid acceleration. With just 152 horsepower under the hood, the Crosstrek is decidedly underpowered. 

The addition of the hybrid drive system dramatically improves the Crosstrek's performance in spite of the 500-pound weight penalty.  Even though the Hybrid has less horsepower at 148 ponies, the added torque from the electric motor allows it to enthusiastically bolt off the line. 

With that said, the Crosstrek Hybrid is still not far from quick. Rather it's just no longer infuriatingly languid. 

According to Motor Trend, the Crosstrek Hybrid clocked in with a respectable 0-60 MPH run of 8.3 seconds, a marked improvement over the 9.8-second run posted by the non-hybrid variant. 

Apart from the acceleration, the Crosstrek proved to be confident and capable in most driving conditions. 

The Hybrid also returned sold fuel economy at 42MPG in mixed city and highway driving. 


The verdict.

The Subaru Crosstrek is a really likable and capable little crossover. With the addition of the hybrid drive system, the Crosstrek is now more efficient and significantly more peppy to drive. 

As always, we came away impressed by Subaru's build quality and its standard EyeSight suite of drivers assistance features. However, the hybrid's lithium-ion battery pack reduces Crosstrek's cargo capacity by 5 cubic feet.

Further, with a starting price of around $35,000 and an as-tested price of more than $38,000, you're really paying a premium for the hybrid drive system. 

At the end of the day, if you're really into the Subaru Crosstrek and you really like the fuel economy and you're willing to part with nearly $40,000 to get it, then, by all means, go for the Crosstrek Hybrid. 

If the price is too steep, go with the regular Crosstrek and live with the mediocre acceleration. Or better yet, get a Subaru Forester which offers more utility at a similar price point. 


Uber's historic loss, Lyft's abysmal month, Pinterest's earnings disaster: Why the white-hot IPO market is full of duds (UBER, PINS, BYND, ZM, LK, LYFT)

Sun, 05/19/2019 - 9:01am

  • The US initial-public-offering market has been packed with high-profile debuts of all sizes this year.
  • But some of the most widely anticipated launches have faltered in their early days of trading.
  • At the heart of the poor showings are companies' unclear paths to profitability and an uncertain economic backdrop, according to analysts and investment advisors.
  • Visit Markets Insider's homepage for more stories.

On the surface, the US initial-public-offering market is sizzling.

Jam-packed with big deals and filled with splashy names once only the stuff of venture capitalists' dreams, the IPO market is incredibly active this year.

It's giving everyone from investment banks to foreign investors multi-million-dollar paydays, and the average investor a chance to own a piece of young companies trying to disrupt industries.

And the stakes are high. The 80 US-listed IPOs so far this year represent the heaviest volume since 2014, according to Dealogic data. They have contributed nearly 15% of the last decade's total IPO volume, the firm's analysis shows.

But under the hood, it's a different story. The volatile market has absorbed flop after flop, wiping out investor wealth and setting a grim tone for IPOs coming down the pipeline.

The disappointing performances in some cases can be attributed to the very quality of companies hitting the market, due to their unclear paths to profitability and an uncertain macroeconomic backdrop, analysts and investment advisors told Markets Insider.

"We are seeing the end of a cycle," Tom Forte, a senior research analyst at D.A. Davidson, told Markets Insider on Friday. "At the end of a cycle, companies that want to go public during the cycle rush to go public. And, selectively, we are seeing that there are some investors out there who are willing to stomach today's losses for tomorrow's gains." 

Quickly, a rundown on some of the IPO market's noteworthy disappointments: Lyft's first month of trading reflected the second-worst for a large US-listed IPO on record with a 20.5% decline, per Dealogic. Only Facebook's 21% drop in 2012 was worse. 

Lyft's biggest rival, Uber, was a disaster in its own right, posting the largest first-day dollar loss of any domestic IPO going back to 1975. Its own pricing was reportedly influenced by Lyft's poor stock-market showing following its own debut.  

The pair of newly public ride-hailing companies would naturally trade in a volatile fashion during a period of heightened market volatility, said Erin Gibbs, a portfolio manager at S&P Investment Advisory Services.

"I'm more hesitant of the riskier IPO market as we face increasing uncertainty over our own economy," Gibbs said in an email on Friday.

"I think investors tend to forget that the reason a company goes public is because it needs cash, whether to pay back private equity, pay debt or to grow, it needs capital. Companies don't go public to make investors wealthier. So I feel we should always be wary around the hype of any IPO."

Pinterest, meanwhile, surged in its April debut. Shares rose 30% during their first few weeks of trading before crashing after its first quarterly report was underwhelming.

To be fair, the market has also ushered in smashing successes this year.

Beyond Meat posted the best first-day performance of any US-listed IPO, by Dealogic's count, surging 163%. That was also the only time since the dot-com era that an IPO had a first-day return greater than 100%, per UBS.

Zoom, what has been dubbed "the profitable tech unicorn," has surged 38% since its April debut, and hit a record high Friday. And the Nasdaq-listed Luckin Coffee, a China-based Starbucks competitor, rose 47% in its first day of trading on Friday. 

"We don't think the IPO market is a total failure," Doug Clinton, a managing partner at Loup Ventures, a Minneapolis- and New York-based venture capital firm that invests in frontier technology companies, said Friday in an email.

"Zoom has been a great success story. PagerDuty has also performed well. We'll see how Slack does soon, but it seems like it will go public at a valuation higher than its last private financing."

Others say there's not much to glean from a few companies with an extremely limited trading history.

"The volatility of the markets at this time, and all of the short term trading, makes it difficult to predict short term moves, especially as it relates to issuers that have been trading for a short period of time like Pinterest, Uber, and Lyft," Scott Coyle, the cofounder and CEO of ClickIPO, an app that tracks initial public offerings, said Friday in an email.

"Over the long term, all 3 companies will be priced by the markets based on their financial performance metrics," he added.

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Read more from Markets Insider and Business Insider:

Luckin Coffee, a massive but unprofitable Chinese Starbucks competitor, soars 47% in its debut

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NOW WATCH: The rise and fall of Donald Trump's $365 million airline

One market expert warns these 3 'black swan' events could combine with the trade war to cause the next big stock crash

Sun, 05/19/2019 - 6:05am

  • President Donald Trump's ongoing trade war with China has reintroduced volatility to the stock market. Some experts say this leaves equities particularly exposed to an external shock.
  • Vincent Deluard, a macro strategist at INTL FCStone, lays out the three "black swan" events he thinks are most likely to strike suddenly and send stocks tumbling into a bear market.
  • Visit Business Insider's homepage for more stories.

Whether President Donald Trump's newly ignited trade war with China has accomplished anything to date is still up for debate. But what it has definitively done is reintroduce volatility to the stock market.

After climbing to a fresh all-time high at the end of April, US equities have been whipsawed by trade-war developments — many of them coming straight from Trump's notorious Twitter account.

The week ended May 10 proved to be the worst of 2019 so far. Then, this past week, the benchmark S&P 500 dropped 2.4% on Monday before spending the next four days struggling to claw back into the green.

It's been a roller coaster ride to say the least. And some experts across Wall Street think the market has been destabilized to the point where an external shock could fly in and wreak havoc.

Vincent Deluard, a macro strategist at INTL FCStone, counts himself among this contingency. He sees the bullish stock-market arguments being floated by certain pundits, and he thinks they're grossly exaggerated.

He doesn't think there's a method to Trump's negotiating madness, like many optimists do. He doesn't believe that the Federal Reserve will continue to backstop the market, because he doesn't buy into the idea that inflation will stay low forever. And he definitely doesn't see corporate earnings growing to the degree many do. He says margin expectations are just too far-fetched.

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So where does that leave an equity market that's proven itself highly susceptible to sudden shifts in the investing landscape? Deluard says stocks could be at the precipice of a more than 20% decline from recent record highs.

"It is not difficult to envision a scenario where this Twitter tantrum turns into a fully-fledged bear market," Deluard said in a recent client note, in reference to Trump's recent weakening of equity sentiment.

But in order for that to happen, he says the trade-war-weakened equity environment will have to get rocked by some sort of exogenous shock. Or, as Deluard refers to them, "black swan" events. The name of his recent research report is even "A Wedge of Black Swans."

After all, the trade war alone hasn't been enough to derail the more than 10-year bull market. Deluard argues that it needs to be coupled with something relatively catastrophic.

Deluard narrows these tail-risk events down to three distinct scenarios:

(1) "Bubbly" private markets reprice lower after the recent market struggles of Uber and Lyft

In this scenario, Deluard envisions the overall decline of risk appetite in the public market as a result of lower private-market valuations. He cites Uber's roughly 20% loss since going public, and Lyft's even steeper 35% sell-off.

"Valuations will need to be dropped," Deluard said. "Capital raises will slow. Investors who financed rounds at absurd multiples will need to write down t heir stakes. Option packages will lose value. Employees may leave."

He continued: "Skeletons may come out of the closet of many a once-highly valued tech unicorn."

(2) Venezuela or Iran cause a shock in global oil prices

When it comes to the oil market, Venezuela and Iran are the two nations with the most ability to cause trouble. Deluard notes that 20% of global oil consumption crosses the Iran-adjacent straits of Hormuz every day. And, with a whopping 297 billion barrels, Venezuela has the world's largest proven oil reserve.

But oil wouldn't directly hurt the stock market to the degree Deluard envisions. He thinks the real damage will come if an oil shock driven by geopolitics keeps the Fed from being able to tweak monetary policy like it wants.

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"Despite the current euphoria about 'the death of inflation' and the 'goldilocks economy,' it is still possible for the Federal Reserve to find itself in the 1970s dilemma: accelerating inflation and a slowing economy," Deluard said.

(3) There's a "leftist takeover" of the Democratic party ahead of the 2020 presidential election

Deluard sees a potential scenario where parts of Sen. Bernie Sanders' leftist political plan from the 2016 election cycle find their way onto the platform for almost every Democratic candidate.

"The demographic turning from boomers to millennials and Gen Z will lead to greater demand for redistributionist and inflationary policies in the 2020 election."

Such a situation would almost certainly put pressure on stocks.

With all of that established, Deluard isn't saying that any of these three situations are certain to unfold in the next 12 months. He just thinks they have a higher likelihood of transpiring than the perfect storm required for continued gains.

He leaves his readers with one final warning: "Buy the dip at your own risk."

SEE ALSO: One expert says an imminent 65% stock-market crash would be 'run-of-the-mill' — and explains why risks are greater now than during the tech bubble

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A VC with $575 million to spend lists the 3 qualities startups need to get her funding

Sun, 05/19/2019 - 5:00am

  • Accel is a major venture company that has backed famous firms including Facebook, Spotify, and Slack.
  • Its European arm has raised a new $575 million fund for entrepreneurs on the continent.
  • The new fund will focus on financial technology, healthcare, and automation.
  • Accel partner Sonali De Rycker said there are three traits that impress her when she meets a founder: lateral thinking; humility; and good storytelling chops.
  • Visit Business Insider's homepage for more stories.

Accel is, perhaps, not a household name but it has backed some of the most famous and successful entrepreneurs in the world.

It has ploughed money into global successes like Facebook, Supercell, and Spotify over the years. Now, its European arm has just raised a huge new fund of $575 million to hand out to European entrepreneurs across the continent. The new fund will focus on automation, financial technology, and healthcare. Accel aims to be the first institutional investor in startups.

Sonali de Rycker, partner at Accel, has led investments into some of the company's most high-profile partners. She will have heard pitches from celebrity entrepreneurs such as Spotify's Daniel Ek.

She told Business Insider the company prides itself on picking out the "crème de la crème" of startups. That's evidenced by earlier big-name successes, plus rising stars such as UiPath, which is now the most valuable AI company in the world, and UK banking startup Monzo, a beloved challenger to the high street bank. The fund also invested in Deliveroo, the UK food delivery company that just raised funding from Amazon.

De Rycker said Accel takes about 3,000 initial calls or meetings with startups every year, and that whittles down into about 1,000 second calls or meetings. The team then narrows that down further to 50 to 75 companies, and finally chooses to invest in 10 or 15 companies a year. In other words, an entrepreneur who makes initial contact with Accel has a 0.3% chance of being funded.

De Rycker talked to Business Insider about the three qualities that makes entrepreneurs stand out in pitch meetings.

The ability to create a market where there was none

"We like entrepreneurs who can join the dots in a different way, they can see around corners," said De Rycker.

As an example, she points to Spotify, the streaming company which rivals Apple Music and went public last year. Spotify had a radically different view on music consumption and piracy, billing themselves as a competitor to piracy rather than a competitor to physical records.

CEO and cofounder Daniel Ek pushed this narrative hard in the face of criticism that he was undercutting musicians. It's better, he reasoned, that people pay something for Spotify and Spotify pays artists, than people paying nothing at all for pirated, low-quality music. His goal was to make it easier to stream music from a reliable platform than to pirate music and, largely, it worked. Piracy fell thanks to streaming services.

"It's building a company that no one through they needed, the ability to create a market," added De Rycker. "How do you know that? It's just about the way they talk about the industry. You feel, 'Wow, that's so compelling.'"

Maintain humility

De Rycker said Accel also backs entrepreneurs who are capable of leaving their own egos at the door and outsourcing critical decisions to their team.

"The reason I think humility [is important] is it's a foundation for building a company that has a shot at leaving a legacy," she said. "It's about durability. It's important because it's not all about them, it's really about the stakeholders, the team, the culture. How they think about investors and customers, and the way they do it not being about them and their profile."

De Rycker said founders from Nordic startups had a strong culture of humility, where "everyone is accountable to everyone."

She points to Ilkka Paananen, the CEO of gaming company Supercell. Supercell is probably best known for its casual game "Clash of Clans," and the company is an oft-cited example of European tech success.

Paananen, De Rycker said, trusted his team so much that they killed a game that Supercell had worked on for months. "It was so close to meeting their metrics for launching games, but they killed it without calling him," she said. They then came up with "Hay Day," another of its more popular casual mobile games.

Come up with the grand narrative for your startup

Investors really love the grand narrative. When Uber pitched investors, its tagline wasn't just "Order a taxi on demand."

Its original pitchdeck tagline was: "Make transportation as reliable as running water." By the time of its IPO, that had changed to "Igniting opportunity by setting the world in motion."

The grand narratives can sometimes feel overblown — or even untrue in the worst cases — but venture capitalists want to see global ambition in founders. It's that sales pitch which ultimately wins you the funding and the talent you need to grow a successful business, according to De Rycker.

"It's great to be humble, but if you can't get money and great need the ability to tell a good story which is a combination of vision, passion, commitment, all those attributes," she said. "Founders have to do the impossible in every area of the business, from hiring to customers, and to be a phenomenal storyteller."

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