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REGTECH REVISITED: How the regtech landscape is evolving to address FIs' ever growing compliance needs

Fri, 09/13/2019 - 2:02am  |  Clusterstock

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.

Regtech solutions seemed to offer the solution to financial institutions' (FIs) compliance woes when they first came to prominence around 24 months ago, gaining support from regulators and investors alike. 

However, many of the companies offering these solutions haven't scaled as might have been expected from the initial hype, and have failed to follow the trajectory of firms in other segments of fintech.

This unexpected inertia in the regtech industry is likely to resolve over the next 12-18 months as other factors come into play that shift FIs' approach to regtech solutions, and as the companies offering them evolve. External factors driving this change include regulatory support of regtech solutions, and consultancies offering more help to FIs wanting to sift through solutions. Startups offering regtech solutions will also play a part by partnering with each other, forming industry organizations, and taking advantage of new opportunities.

This report from Business Insider Intelligence, Business Insider's premium research service, provides a brief overview of the current global financial regulatory compliance landscape, and the regtech industry's position within it. It then details the major drivers that will shift the dial on FIs' adoption of regtech over the next 12-18 months, as well as those that will propel startups offering regtech solutions to new heights. Finally, it outlines what impact these drivers will have, and gives insight into what the global regtech industry will look like by 2020.

Here are some of the key takeaways:

  • Regulatory compliance is still a significant issue faced by global FIs. In 2018 alone, EU regulations MiFID II and PSD2 have come into effect, bringing with them huge handbooks and gigantic reporting requirements. 
  • Regtech startups boast solutions that can ease FIs' compliance burden — but they are struggling to scale. 
  • Some changes expected to drive greater adoption of these solutions in the next 12 to 18 months are: the ongoing evolution of startups' business models, increasing numbers of partnerships, regulators' promotion of regtech, changing attitudes to the segment among FIs, and consultancies helping to facilitate adoption.
  • FIs will actively be using solutions from regtech startups by 2020, and startups will be collaborating in an organized fashion with each other and with FIs. Global regulators will have adopted regtech themselves, while continuing to act as advocates for the industry.

In full, the report:

  • Reviews the major changes expected to hit the regtech segment in the next 12 to 18 months.
  • Examines the drivers behind these changes, and how the proliferation of regtech will improve compliance for FIs.
  • Provides our view on what the future of the regtech industry looks like through 2020. Get The Regtech Revisited Report

     

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Airbus is introducing a feature on its new planes to track everything you do, including how often you use the bathroom

Fri, 09/13/2019 - 1:12am  |  Clusterstock

  • Airbus is trialing a new Internet of Things platform on its A350-900 test plane, which connects elements of the plane, including the seats, overhead bins, meal trolleys, and lavatories, to passengers and crews aboard the plane. 
  • The company says data collected from the new Airbus Connected Experience system will be uploaded to its "Skywise" cloud service and could provide aviation companies with a trove of customer data, including meal preferences, in-flight purchases, and even bathroom habits. 
  • The company says the digital connectivity of their new system will create a more personalized experience for passengers and will allow for more efficient communication with flight crews. 
  • The company hopes to roll out of technology not only on its test aircraft, but also on its fleet of A321 planes in 2021, and its larger A350 series in 2023, according to Bloomberg
  • Visit Business Insider's homepage for more stories.

Airbus aircraft are about to get a whole lot smarter. 

The aviation company announced on Wednesday that it has begun in-flight trials of its newest cabin technology, which connects passengers and crew to elements of the plane including the seats, cargo, and even the lavatories. 

Airbus first unveiled plans for its Connected Experience at the Airline Passenger Experience Association (APEX) Expo last year. The Internet of Things (IoT) platform links real-time information from cabin components, including the meal trolleys and overhead bins, to crews and passengers aboard the flight in order to create a more personalized — and digitally traceable — experience. 

According to a company press release, the data consolidated from the platform will be uploaded to the "Skywise" cloud service, an open data platform developed by Airbus for the aviation industry.

According to Airbus, the platform provides significant benefits for flight crews, which will allow them to access information like meal and seat preferences in one place, and could facilitate remote communication with those on board. For passengers, the system allows for a more personalized travel experience, while airlines would be able to utilize aggregated cabin equipment trends (say, for example, which lavatory is most frequently used during a flight) to perform "predictive maintenance" on cabin elements. 

Read more: This futuristic Airbus smart seat prototype may make the future of economy flying a bit less miserable

Overhead bins, the company says, could be linked to sensors which indicate to passengers which spaces are free.

The company has begun trialing the smart system and connected cabin components on its A350-900 Flight Lab aircraft based at its Hamburg facility, claiming it is the first aircraft manufacturer to carry out such testing.

These include an iSeat by Recaro, which comes outfitted with sensors in the armrest, backrest and tray table, a connected galley area, and a remote wireless cabin management system.

Airbus A320 Smart Cabin Reconfiguration "Flex Seat" demo at @recaro_de's #AIX17 booth. Up for a Crystal Cabin Award tmrw night @aix_expo! pic.twitter.com/Qpb86vK57x

— APEX (@theAPEXassoc) April 3, 2017

 

According to APEX, the company is also testing smart cameras outside the lavatories to measure passenger wait times.

Ingo Wuggetzer, Airbus's vice president of cabin marketing, said Tuesday at the aviation trade show in Los Angeles that the technology could help flight attendants measure when someone inside the lavatory may need assistance, Bloomberg reported. 

According to Bloomberg, each seat will signal green when the seatbelt is fastened, and red when unbuckled. The goal of the system, it says, is to make boarding and in-flight security checks more efficient. The company hopes to roll out the technology not only on its test aircraft, but also on its fleet of A321 planes in 2021, and its larger A350 series in 2023.

"It's not a concept, it's not a dream: It's reality," Wuggetzer said. 

SEE ALSO: Airbus says it has the technology to fly planes with no pilots, but the challenge will be convincing people to get on them

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Officials just confirmed 6 deaths and 380 cases of serious lung disease tied to vaping. Here are all the health risks you should know about.

Thu, 09/12/2019 - 6:34pm  |  Clusterstock

  • The Centers for Disease Control and Prevention and the Food and Drug Administration are investigating a spate of lung illnesses tied to vaping, or using e-cigarettes.
  • According to new numbers released on Thursday, there have been 380 confirmed and probable cases of illness across the US since June. Six people have died.
  • Investigators don't know the cause. They haven't identified a single common brand, product, or drug across all of the cases.
  • The mysterious lung disease isn't the only risk of vaping. Read on to see how vaping affects your health.
  • Still, when compared against smoking, vaping nicotine appears to be healthier.
  • Visit Business Insider's homepage for more stories.

Since June, 380 Americans have been struck down with lung illnesses tied to vaping, or using e-cigarettes. Six people have died.

The new figures, released by the Centers for Disease Control and Prevention on Thursday, reflect a slightly lower figure than the previous estimates. They now reflect only confirmed and probable cases, rather than possible cases.

Vaping is a highly variable hobby, however, making it difficult for officials to determine exactly what's causing the illnesses and deaths.

Investigators have not yet identified a single common brand, device type, or drug across the cases. That could mean that all of the illnesses were triggered by the same issue, or that some of the cases are different diseases with some similar symptoms.

The CDC and the Food and Drug Administration are working together to figure out the potential causes.

The agencies have said they've gathered about 120 vaping devices and substances that may be linked to the illnesses, and are currently studying them. 

"It is too early to pinpoint a single product or substance common to all cases," CDC said in a statement last Friday. CDC said that some patients used devices containing nicotine, while others vaped THC, and some vaped both substances.

Some reports have suggested that vitamin E acetate, which has been found in some of the products, may play a role in the illnesses. 

Read more: Vaping is leading to a spate of lung injuries, comas, and death. Lung experts say oils like vitamin E may be partially to blame.

The CDC advised people to consider not vaping until it can figure out the cause of the illnesses. The agency also warned smokers who vape to not return to smoking, however.

So far, the available evidence still suggests that when compared to smoking, vaping is a healthier habit. The practice involves inhaling heated vapor, rather than burned material. In general, vapers are believed to be exposed to fewer toxicants and cancer-causing substances than smokers. 

To help prevent young people from vaping, Michigan said last week that it would ban flavored vaping products, making it the first state to do so.

There are hundreds of different kinds of vaping devices

There's an enormous amount of variety when it comes to vaping devices, ingredients, and brands — making it difficult to pinpoint any single cause.

First, there are the all-in-one style devices, where all of the necessary pieces are contained in the device itself. These popular e-cigs are sold under brand names like Juul and Blu (for nicotine), and Pax (for cannabis).

Then there are the modifiable tank-based e-cigs, in which pieces of the device can be bought separately, and users can customize everything from the temperature of the device to the drug ingredients. These modifiable setups have been linked with dangers in the past, including at least two deaths.

Finally, there are the ingredients that go into the devices, which can range from waxes to liquids to ground plant matter. Some devices allow users to pour in their own liquid or stuff in their own wax or herbs, while other devices simply include disposable pre-filled cartridges.

In some of the cases reported to health agencies, users said they were vaping cannabis when their illness occurred. In Oregon, health officials said they had received reports that the person who died had been vaping cannabis. But because marijuana is still illegal in many states, it's possible that those cases are under-reported. Other vapers in the reports have been using only nicotine.

In many of the cases, patients said they experienced a gradual start of symptoms like trouble breathing, shortness of breath, and chest pain before they were brought to the hospital. Some people said they also experienced stomach issues including vomiting and diarrhea.

A new practice with several unknowns

Vaping is a relatively new practice, having only became popular within the past decade. Because of its novelty, researchers have warned that there's a lot we still don't know about how the practice impacts the brain and body.

"Given their relatively recent introduction, there has been little time for a scientific body of evidence to develop on the health effects of e-cigarettes," the authors of a large recent report on the overall health effects of vaping wrote.

Recently-discovered health risks range from a heightened exposure to toxic metals to a potentially higher risk of a heart attack.

Last spring, for example, researchers examining the vapors in several popular e-cigarette brands found evidence that they contained some of the same toxic metals normally found in conventional cigarettes, such as lead. They also found evidence suggesting that at least some of those toxins were making their way through vapers' bodies. Their results were published in the journal Environmental Health Perspectives.

Consistently inhaling high levels of toxic metals has been tied to health problems in the lungs, liver, immune system, heart, and brain, as well as some cancers, according to the US Department of Labor's Occupational Health and Safety Administration. 

In a study published last fall in the American Journal of Preventive Medicine, scientists found evidence tying daily e-cigarette use to an increased risk of a heart attack. Still, the study could not conclude that vaping caused the heart attacks — only that the two were linked.

When it comes to the spate of recent lung illnesses, health departments are further investigating by testing e-cigarette products and samples they've collected from patients.

But vaping seems to have helped hook millions of teens on nicotine 

Separately, vaping appears to have helped hook lots of new young people on nicotine — in some cases, young people who otherwise would not have smoked.

E-cigarettes have been tied to a large recent jump in smoking among middle school and high school students. From 2017 to 2018, the percentage of teens who said they'd used e-cigs jumped 78%, according to the CDC.

Because they contain nicotine, e-cigarettes are especially dangerous for kids and teens whose brains are still developing, experts say. In young people, nicotine appears to blunt emotional control as well as decision-making and impulse-regulation skills. That most likely helped prompt a warning about e-cigs from the US surgeon general in December.

The rise in youth vaping prompted a crackdown on the industry led by the FDA. The agency responded by curbing the sale of flavored e-cigs, which they've said are particularly appealing to young people.

"Ultimately, we expect these steps designed to address flavors and protect youth will dramatically limit the ability of kids to access tobacco products we know are both appealing and addicting," Scott Gottlieb, who was then FDA commissioner, said in a statement at the time.

This article was published on August 30 and has been updated.

SEE ALSO: 11 key findings from one of the most comprehensive reports ever on the health effects of vaping

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The companies disrupting the payments industry in major markets through digital

Thu, 09/12/2019 - 6:00pm  |  Clusterstock

This is a preview of the Global Payments Landscape report from Business Insider Intelligence. Current subscribers can read the report  here.

  • Noncash payments are on the rise worldwide.
  • As new players emerge to capitalize on consumer appetite for digital payment methods, three mature markets — the UK, Australia, and Sweden — have become standouts for what a more cashless society could look like.
  • The UK, Australia, and Sweden are transitioning to digital particularly well, and can serve as a roadmap for other mature markets seeking to overcome the legacy channel of cash.

Noncash payments have been gaining popularity around the world for the last decade. And though cash isn’t anywhere near dead, its global growth is slowing as consumers turn to emerging cashless alternatives.

But there are a few key markets - Australia, Sweden, and the UK - where annual noncash payments have already surpassed traditional cash transactions altogether — and they’re stong early indicators of what a truly cashless society could look like.

Why are digital payments on the rise?

The growing adoption of noncash payments is a direct result of the rise of e-commerce, but that’s not the only factor. Consumers today are adaptable to disruptive technologies and are generally open to trying new types of digital payment methods.

This consumer appetite is compounded by their access to infrastructure, as well as the emergence of government-backed initiatives, such as real-time transfers and the backing of electronic currencies, that make digital payments more enticing to both consumers and merchants.

How are Australia, Sweden, and the UK driving the world towards cashless payments?

Australia, Sweden, and the UK are emblematic of opportunities for payments players to lead the world away from cash. The Global Payments Landscape from Business Insider Intelligence, Business Insider’s premium research service, provides a snapshot of the payments industry in each of these three markets.

The report shows that several leading payments players have already emerged or are dominant within each of these regions — and they’re finding success in different ways. For other mature markets seeking to overcome the legacy channel of cash, the digital transformations of Australia, Sweden, and the UK can serve as a roadmap.

Here are the strategies these regions are implementing in the race to become the world’s first cashless society:

  • Australia is launching government initiatives and instating new regulations. The Australian government has banned purchases over AU$10,000 ($7,500) from being made in cash, as well as launched the New Payments Platform (NPP) to allow real-time funds transfer as a means of replacing transactions typically made in cash, such as paying back a friend.
  • In Sweden, consumers are rapidly abandoning cash in favor of cards. In fact, only 2% of the total value of transactions in Sweden consist of cash — a figure that’s expected to decline to less than half a percent by 2020.
  • Contactless payments are leading the shift away from cash in the UK. Nearly the entire population has a debit card, and debit card transactions surpassed cash payments for the first time at the end of 2017. This milestone was largely fueled by the surge in contactless cards, which grew 97% annually last year to hit 5.6 billion transactions.

Want to Learn More?

The Global Payments Landscape from Business Insider Intelligence compiles various payments snapshots, together illustrating how digital payment methods are supplementing or replacing cash in each market.

Each snapshot provides an overview of the payments industry in a particular country, and details the evolution of its development. They also highlight notable payments players in each region and discuss the opportunities and challenges that players are facing in their respective markets.

Get The Global Payments Landscape

 

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WeWork is debating whether to take power away from Adam and Rebekah Neumann, its husband and wife cofounders, to get its IPO back on track

Thu, 09/12/2019 - 5:43pm  |  Clusterstock

WeWork is considering curtailing the power of CEO Adam Neumann and his wife, Rebekah Neumann, in an effort to get its initial public offering back on track, The Financial Times reported Thursday.

Neumann dominates the company, thanks in part to holding special stock that gives him 20 votes per share. The company's investors, advisors, and executives are deliberating whether to reduce his voting power, among other possible corporate governance reforms, according to The Financial Times.

Under WeWork's corporate bylaws, Rebekah Neumann is one of three people who would decide on her husband's successor if he should die or become incapacitated within 10 years of the company's IPO. One of the other changes the real estate giant is debating is whether to remove her from that role, The Financial Times reported.

Company representatives did not immediately respond to an email from Business Insider seeking comment.

WeWork has been struggling to line up potential investors for its planned public offering. Neumann's control over the company and a series of transactions involving him or his relatives have raised eyebrows. Investors and analysts have also raised concerns about the company valuation and financial stability.

Read this: Here's how WeWork answered the 5 biggest questions about its business — and why analysts are still worried about its upcoming IPO

In its last private funding round in January, WeWork was valued at $47 billion. But it's now considering going public with a market capitalization of as little as $15 billion, according to The Financial Times.

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

SEE ALSO: WeWork reportedly hired the parents of a high-ranking exec as real estate brokers for a Miami lease, among other potential conflicts of interest

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How banking-as-a-service (BaaS) works and industry outlook

Thu, 09/12/2019 - 5:32pm  |  Clusterstock
  • Business Insider Intelligence is launching its brand new Banking coverage in early September.
  • To obtain a free preview of our Banking Briefing, please click here.

Across industries, digital transformation is democratizing data to enable greater transparency. New technologies are opening up legacy systems to emerging startups and third parties and, in some cases, putting data directly in the hands of consumers.

In financial services, Banking-as-a-Service (BaaS) platforms have surfaced as a key component of open banking, in which banks provide more financial transparency options for account holders by opening their application programming interfaces (APIs) for third parties to develop new services.

Fintechs have been encroaching on incumbent institutions in the banking game — but by moving into the BaaS space, tech-savvy legacy banks can turn this looming threat into an opportunity.

What is banking-as-a-service?

BaaS is an end-to-end process that allows fintechs and other third parties to connect with banks' systems directly via APIs so they can build banking offerings on top of the providers' regulated infrastructure, as well as unlock the open banking opportunity reshaping the global financial services landscape.

Techy-savvy legacy banks can fend off the encroaching threat of fintechs by moving into the BaaS space to share their data and infrastructure. In a matter of years, access to this level of information will become table stakes for digitally native customers — so banks that begin now will be ahead of the curve, and likely rewarded with high demand.

How does banking-as-a-service work?

The BaaS process begins with a fintech or other third-party provider (TPP) paying a fee to access the BaaS platform. The financial institution opens its APIs to the TPP, thereby granting access to the systems and information necessary to build new banking products or offer white label banking services. 

In addition to getting ahead in open banking, legacy institutions that launch their own BaaS platforms are also opening up new revenue streams. The two main monetization strategies for BaaS include charging clients a monthly fee for access to the BaaS platform or charging a la carte for each service used.

Top banking-as-a-service companies

Here are the top BaaS platform providers broken out into purely BaaS-focused fintech players and retail banks that have launched their own BaaS platforms:

Pure BaaS providers:

  • solarisBank
  • Bankable
  • Treezor
  • 11:FS Foundry
  • Cambr
  • ClearBank

BaaS providers with B2C operations:

  • Starling Bank
  • Fidor Bank
  • BBVA
Banking-as-a-service industry outlook

A number of countries have already begun introducing open banking regulations, indicating that the financial services industry is moving toward an era where shared data and infrastructure will become consumers' new expectations.

Tech-savvy legacy banks that create their own BaaS platforms now will not only get ahead of the open banking opportunity before their competitors, but also unlock a new stream of revenue by monetizing their platforms. 

In the UK, the new revenue potential generated through open banking-enabled small- and medium-sized business and retail customer propositions was £500 million ($700 million) in 2018, per PwC — and Business Insider Intelligence expects that to grow at a 25% compound annual growth rate to reach £1.9 billion ($2 billion) by 2024.

Beyond adding a new revenue stream, developing a BaaS solution also allows legacy banks to establish relationships and forge partnerships with emerging fintechs — thereby keeping themselves ahead of the trends that will inevitably follow once BaaS and open banking become mainstream.

To stay on top of today's (and tomorrow's) digital trends, Business Insider Intelligence is launching Banking, our newest research coverage area tailored for decision-makers in the financial services industry. 

This new offering is designed to keep you up to date on the biggest industry shifts and shakeups, with coverage including BaaS and open banking, consumer and business banking, mobile and online banking, digital account opening, and neobanks.

Click here to obtain an exclusive FREE preview of Banking!

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LinkedIn founder and Greylock partner Reid Hoffman apologizes for his role in rehabbing Jeffrey Epstein’s public image in 2015

Thu, 09/12/2019 - 5:25pm  |  Clusterstock

Reid Hoffman, the founder of LinkedIn and one of Silicon Valley's most high-profile venture capital investors, apologized on Thursday for his role in helping to repair the image of convicted sex offender Jeffrey Epstein.

In an email to Axios, Hoffman acknowledged several interactions with Epstein, which he said were for the purpose of fundraising for MIT's renown Media Lab. Hoffman said he had been told that MIT had vetted and approved Epstein's participation in fundraising, but said his decision to be involved with Epstein was nonetheless a mistake.

"By agreeing to participate in any fundraising activity where Epstein was present, I helped to repair his reputation and perpetuate injustice. For this, I am deeply regretful," Hoffman said in the email. 

Epstein's ties to Silicon Valley and to MIT have come under scrutiny in recent weeks, following the financier's arrest on sex trafficking charges and his subsequent death by suicide. 

Hoffman invited Joi Ito, director of the MIT Media Lab, and Epstein to an August 2015 dinner in Palo Alto with Tesla CEO Elon Musk, Facebook CEO Mark Zuckerberg, and Palantir founder Peter Thiel.

"My few interactions with Jeffrey Epstein came at the request of Joi Ito, for the purposes of fundraising for the MIT Media Lab. Prior to these interactions, I was told by Joi that Epstein had cleared the MIT vetting process, which was the basis for my participation," Hoffman wrote.

Read More: We still don't know if Jeffrey Epstein's money is floating around Silicon Valley, but several top venture capital firms say they've never accepted funds from the disgraced financier

In addition to backing MIT Media Lab, Epstein also reportedly helped personally finance Ito's venture capital fund. Greylock, the venture capital firm at which Hoffman is a partner, has denied that Epstein had invested in any funds as a limited partner. There remains the possibility, however, that Epstein invested in Greylock and others through a "fund of funds," which does not have to disclose its investors to venture firms it backs

According to Axios, Hoffman funded the Media Lab's Disobedience Award for "individuals and groups who engage in responsible, ethical disobedience aimed at challenging norms, rules, or laws that sustain society's injustices," which last year went to leaders of the #MeToo movement.

Hoffman's email was made public only minutes after a letter from MIT president L. Rafael Reif, which also blamed Ito for the university's oversight of Epstein's involvement. The letter reported "preliminary" findings of an investigation that was sparked by revelations that Epstein had funded Ito's Media Lab in addition to his venture capital fund.

Epstein was convicted in 2008 of soliciting sex with a minor, and served 14 months in a Florida prison. In July, he was charged with sex trafficking of minors and conspiracy. He was found dead by suicide on August 10 in his prison cell at the Metropolitan Correctional Center in Manhattan after being refused bail.

Do you have a story to share about Epstein? Contact this reporter via encrypted messaging app Signal at +1 (331) 625-2555 using a non-work phone, email at mhernbroth@businessinsider.com, or Twitter DM at @megan_hernbroth.

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Buzzy healthcare startup SmileDirectClub just went public. Here are the execs and investors who stand to benefit the most.

Thu, 09/12/2019 - 5:11pm  |  Clusterstock

  • SmileDirectClub, a company that provides clear aligners to straighten your teeth, tumbled 28% in its stock market debut Thursday after pricing its initial public offering at $23 a share. 
  • SmileDirectClub ended its first day of trading with a $6.4 billion valuation.
  • Here are the top investors in SmileDirectClub, including CEO David Katzman and cofounders Jordan Katzman and Alex Fenkell, and how much their stakes are worth.
  • Click here for more BI Prime stories.

Five-year-old teeth-straightening company SmileDirectClub went into its first day of trading on Thursday with high hopes and a near-$8.9 billion valuation.

The company on Wednesday priced its initial public offering at $23 a share, but started trading below that. The stock closed down 28% on Thursday at $16.67 a share. SmileDirectClub ended its first day of trading with a $6.4 billion valuation.

SmileDirectClub is a startup that provides clear aligners for teeth. While it typically costs anywhere from $3,000 to $7,000 to get traditional braces or Invisalign-brand aligners, SmileDirectClub goes for a fraction of that — you can either pay $1,895 up front or a total of $2,290 spread out over two years.

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The idea behind SmileDirectClub is to make straightening teeth more affordable by cutting out the steps of going in person to a dentist or orthodontist to get braces or other alignments. The company was started by Alex Fenkell and Jordan Katzman in 2014.

In October, SmileDirectClub raised $380 million from the private-equity firm Clayton, Dubilier & Rice and the venture firms Kleiner Perkins and Spark Capital. The round valued the company at $3.2 billion, up from $275 million just two years earlier.

In its filing, SmileDirectClub listed the top shareholders in the company and their stakes. These are SmileDirectClub's top investors:

  • David Katzman, 59, is the chairman and CEO of SmileDirectClub. Katzman is the largest shareholder in SmileDirectClub, and the filing said that at the completion of the offering, he would control a majority of the voting shares of the company. Katzman is the founder and managing partner of the Detroit-area-based Camelot Venture Group, which has invested in Quicken Loans, Sharper Image, and 1-800 Contacts. Katzman is the father of cofounder Jordan Katzman. After the IPO, he would own nearly 88 million shares, valued at about $1.4 billion, based on the closing share price of $16.67.
  • Jordan Katzman, 29, is a cofounder of SmileDirectClub and a director on its board. After an IPO, Jordan Katzman would own about 69.6 million shares, valued at about $1.2 billion.
  • Alex Fenkell, 30, is a cofounder of SmileDirectClub and a director on its board. (He and Jordan Katzman met at summer camp.) Post-IPO, Fenkell would own 63 million shares, valued altogether at up to $1.0 billion.
  • Steven Katzman, 56, is SmileDirectClub's chief operating officer and a member of the board. Steven Katzman is an adviser to Camelot and David Katzman's brother. He would own up to 6.3 million shares, valued at up to $104 million. That figure excludes the roughly 28 million shares (valued at up to about $473 million) that he is a beneficial owner of by way of the "David B. Katzman 2009 Family Trust," for which Steven Katzman is a trustee, according to the recent financial filing. 
  • Kyle Wailes, 35, is SmileDirectClub's chief financial officer. He joined the company in May 2018 after working at Intermedix, a billing-technology company. Wailes would own about 259,000 shares after an IPO, valued at up to $4.3 million.
  • Susan Greenspon Rammelt, 54, is SmileDirectClub's general counsel secretary and a member of the board. Greenspon Rammelt also serves as Camelot's general counsel. After an IPO, she would own up to 273,000 shares, valued at up to $4.6 million.

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MIT officials were aware of Jeffrey Epstein's donations to the Media Lab as early as 2013, an independent investigation found

Thu, 09/12/2019 - 4:56pm  |  Clusterstock

  • In a letter made public on Thursday, MIT President L. Rafael Reif said an independently run investigation found that MIT officials were aware of Jeffrey Epstein's donations to MIT Media Lab run by investor Joi Ito.
  • According to the letter, administration officials were made aware of Epstein's donations as early as 2013. They allowed Ito to keep the donations although they "knew in general terms" of charges against Epstein, Reif said.
  • Administration officials were aware enough, however, to bar Ito from using the donations to enhance Epstein's reputation with public projects, instead directing the donations to be used for equipment and support for lab scientists.
  • The letter also stated that Epstein gifts were discussed at at least one of MIT's regular senior team meetings where Reif was present.
  • Visit Business Insider's homepage for more stories.

In a letter made public on Thursday, MIT President L. Rafael Reif said an independently run investigation found that MIT officials were aware of Jeffrey Epstein's donations to the MIT Media Lab run by investor Joi Ito.

In a letter addressed to the MIT community, Reif said that administration officials were made aware of Epstein's donations as early as 2013. They allowed Ito to keep the donations although they "knew in general terms" of charges against Epstein, Reif said.

"They accepted Joi's assessment of the situation. Of course they did not know what we all know about Epstein now," Reif wrote.

Read More: We still don't know if Jeffrey Epstein's money is floating around Silicon Valley, but several top venture capital firms say they've never accepted funds from the disgraced financier

Administration officials were aware enough, however, to bar Ito from using the donations to enhance Epstein's reputation with public projects, instead directing the donations to be used for equipment and support for lab scientists. The letter stated that Epstein gifts were discussed at at least one of MIT's regular senior team meetings where Reif was present.

"I am aware that we could and should have asked more questions about Jeffrey Epstein and about his interactions with Joi. We did not see through the limited facts we had, and we did not take time to understand the gravity of Epstein's offenses or the harm to his young victims. I take responsibility for those errors," Reif wrote.

Reif also revealed that the investigation had found a letter thanking Epstein for a donation to Seth Lloyd, a professor of mechanical engineering and physics at MIT, that contained Reif's signature.

The letter was a result of a preliminary update on the independent investigation run by Goodwin Procter into the extent of Epstein's involvement in the university's research and media institutions. The investigation was set off by revelations the now-deceased financier had personally invested in Ito's venture capital fund in addition to directing university donations to Ito's Media Lab.

Ito stepped down from his post as director of the Media Lab on September 7. 

Epstein was charged with sex trafficking of minors and conspiracy. He was found dead by suicide on August 10 in his prison cell at the Metropolitan Correctional Center in Manhattan after being refused bail.

Do you have a story to share about Epstein? Contact this reporter via encrypted messaging app Signal at +1 (331) 625-2555 using a non-work phone, email at mhernbroth@businessinsider.com, or Twitter DM at @megan_hernbroth.

SEE ALSO: Activist investor Starboard bought a 7.5% stake in Box. Experts say that what comes next could be restructuring, layoffs, and maybe even a big sale to a competitor.

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The US-China trade war is still in flux. Here are the 12 companies that have the most riding on a successful resolution.

Thu, 09/12/2019 - 4:48pm  |  Clusterstock

  • There's still no clear outcome to the ongoing trade war between the US and China, and troves of companies around the world have huge chunks of their businesses riding on a long-awaited resolution. 
  • Businesses have increasingly looked to China to drive sales as the country's middle class has exploded in growth over the last decade. 
  • Goldman Sachs put together a list of companies with the greatest exposure to China based on revenue. 
  • Based on that data, here are the 12 companies with the most riding on a successful trade deal.
  • Visit the Markets Insider homepage for more stories.

Businesses are reeling from the effects of the trade spat between the US and China, and there's still no certainty the conflict is going to end any time soon.

However, there have been signs of progress. Both the US and China said this week they would delay tariffs on some products set to take effect in the coming months.

China announced a short-list of products would be temporarily exempt from upcoming tariffs, while President Trump reportedly said an increase in duties on Chinese exports would be delayed two weeks until October 15. Both moves were seen as an effort to cool down trade tensions between the countries ahead of scheduled talks. 

But both countries have extended olive branches before, and yet the trade war has raged on. It's unclear whether a deal will come from upcoming talks, but tons of companies are hoping a resolution will come soon, for the sake of their businesses. 

Goldman Sachs put together a list of companies that have the highest exposure to China based on revenue. To that end, they can be considered those with the most riding on a successful trade resolution.

Here are the 12 companies, ranked in increasing order of Chinese exposure:

12. IPG Photonics

Ticker: IPGP

Sector: Information Technology

Market value: $6 billion

Revenue exposure to Greater China (includes Taiwan): 43%

Source: Goldman Sachs

 



11. Texas Instruments

Ticker: TXN

Sector: Information Technology

Market value: $114 billion 

Revenue exposure to Greater China (includes Taiwan): 44% 

Source: Goldman Sachs

 



10. Applied Materials

Ticker: AMAT

Sector: Information Technology

Market value: $44 billion

Revenue exposure to Greater China (includes Taiwan): 45%

Source: Goldman Sachs

 



9. Broadcom

Ticker: AVGO

Sector: Information Technology

Market value: $109 billion 

Revenue exposure to Greater China (includes Taiwan): 49%

Source: Goldman Sachs

 



8. Nvidia

Ticker: NVDA

Sector: Information Technology

Market value: $100 billion

Revenue exposure to Greater China (includes Taiwan): 53%

Source: Goldman Sachs

 



7. Las Vegas Sands

Ticker: LVS

Sector: Consumer Discretionary

Market value: $42 billion

Revenue exposure to Greater China (includes Taiwan): 62% 

Source: Goldman Sachs

 



6. Micron Technology

Ticker: MU

Sector: Information Technology 

Market value: $50 billion

Revenue exposure to Greater China (includes Taiwan): 66% 

Source: Goldman Sachs

 



5. Qualcomm

Ticker: QCOM

Sector: Information Technology

Market value: $91 billion

Revenue exposure to Greater China (includes Taiwan): 67%

Source: Goldman Sachs

 



4. Monolithic Power Systems

Ticker: MPWR

Sector: Information Technology

Market value: $6 billion

Revenue exposure to Greater China (includes Taiwan): 70% 

Source: Goldman Sachs

 



3. Qorvo

Ticker: QRVO

Sector: Information Technology

Market value: $8 billion

Revenue exposure to Greater China (includes Taiwan): 74% 

Source: Goldman Sachs

 



2. Wynn Resorts

Ticker: WYNN 

Sector: Consumer Discretionary

Market value: $11 billion

Revenue exposure to Greater China (includes Taiwan): 75%

Source: Goldman Sachs

 



1. Yum China Holdings

Ticker: YUMC

Sector: Consumer Discretionary

Market value: $16 billion

Revenue exposure to Greater China (includes Taiwan): 100%

Source: Goldman Sachs

 



Stocks climb as ECB stimulus and trade progress temper global growth fears

Thu, 09/12/2019 - 4:24pm  |  Clusterstock

  • Stocks climbed on Thursday after the European Central Bank moved to cut interest rates and the US and China cooled trade tensions with tariff delays and exemptions. 
  • The European Central Bank slashed its benchmark deposit rate deeper into negative territory and expanded its bond-buying program. 
  • China said it planned to exempt a short-list of items from US products from upcoming tariffs, while President Trump announced the US would delay increasing duties to October 15. 
  • Visit the Markets Insider homepage for more stories.

Stocks rose on Thursday after the European Central Bank moved to inject new stimulus into the European economy and the US and China soothed trade tensions with tariff delays and exemptions. 

The ECB lowered its key deposit rate to -0.5%, from -0.4%, driving interest rates deeper into negative territory. The central bank also it will continue to repurchase bonds for as long as necessary. The announcement providing reassurance that global central banks would step in to support economies in the event of a global slowdown. 

China said it planned to temporarily exempt a short-list of US products from upcoming tariffs. President Trump said shortly after China's announcement that the US would delay increasing existing duties on Chinese exports until October 15. 

Investors had been looking for signs of progress toward a trade deal for several weeks. The efforts by China and the US to delay tariffs appeared to traders hope a resolution could be reached in the near future. 

Here's a look at the major indexes as of the 4 p.m. close on Thursday:

Shares of Aurora Cannabis tumbled as much as 11% on Thursday after missing Wall Street expectations for earnings. The cannabis producer also said it no longer expects to achieve profitability this year, and now forecasting positive earnings in 2020. 

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

Oracle's stock price sank as much as 6% after the company said chief executive officer Mike Hurd would be taking an indefinite leave of absence. Hurd pushed the company deeper in the cloud commuting market in attempt to compete with the likes of Amazon and Microsoft

Within the S&P 500, these were the largest gainers:

And the largest decliners:

Materials posted gains of 0.7%, while financials and real estate rose more than 0.4%. Energy fell 0.6% and healthcare dropped slightly. 

Join the conversation about this story »

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Teeth-straightening startup SmileDirectClub just tumbled in its stock market debut (SDC)

Thu, 09/12/2019 - 4:22pm  |  Clusterstock

SmileDirectClub tumbled in its trading debut on Thursday, a rare setback for a buzzy startup amid a wave of digital health IPOs.

After selling shares to investors for $23 apiece, the stock closed down 28% at $16.67. 

SmileDirectClub sold 58.5 million shares, raising $1.3 billion in the offering. At its closing price, the company was worth $6.4 billion. 

Read more: SmileDirectClub's IPO could make the startup's top investors into billionaires.

The idea behind SmileDirectClub is to make straightening teeth more affordable by cutting out the steps of going in person to a dentist or an orthodontist to get braces or other alignments. 

SmileDirectClub sells clear aligners, an alternative to what you might get from an orthodontist. While it typically costs $3,000 to $7,000 to get traditional braces or Invisalign-brand aligners, SmileDirectClub goes for a fraction of that — you can either pay $1,895 up front or $2,290 spread out over two years.

Read more: These 10 buzzy digital health startups are poised to go public in the next 12 months

In October, SmileDirectClub raised $380 million from the private-equity firm Clayton, Dubilier & Rice and the venture firms Kleiner Perkins and Spark Capital. The round valued the company at $3.2 billion, up from $275 million just two years earlier. 

The company was started by Alex Fenkell and Jordan Katzman in 2014.

An unexpected turn for an otherwise white-hot digital health IPO run

Up until now, most of the digital health companies that have gone public in 2019 have had successful first days of trading. Diabetes-technology company Livongo surged in its first day of trading, closing up 36%. Gene-sequencing technology company 10x Genomics also made its debut on the public markets on Thursday, closing up 35%.

Read more: Buzzy digital health startup Livongo surged in its stock market debut as the 3-year digital health IPO drought comes to an end

The drop was an unexpected turn for the company, which had priced its shares at $23 apiece on Wednesday, above its initial range of $19-$22. 

SmileDirectClub chief financial officer Alex Wailes said that during the IPO road show, investors had questions about the market the company's going for, which tends to skew more toward a broader market of people who want to make minor cosmetic fixed to their appearance.

Wailes said that those investors who signed on during the road show were supportive of the company's growth as well as the margins the company has on its business. 

"They were incredibly supportive of the growth we've had in the business over the last several years," Wailes said.

According to the IPO filing, SmileDirectClub's net loss widened from $33.8 million in the first half of 2018 to $52.9 million in 2018. The company increased its customer count from 22,000 in 2016 to about 246,000 in the first half of this year. 

Join the conversation about this story »

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Global central banks are in a rate-cutting frenzy. Here are the 7 other meetings coming up this month, and what's expected at each.

Thu, 09/12/2019 - 4:12pm  |  Clusterstock

  • The European Central Bank announced rate cuts and stimulus for the eurozone on Thursday. 
  • Turkey and Denmark also slashed rates on the same day.
  • Seven more major central banks including the Federal Reserve will meet in September, meaning more rate cuts are on the table.
  • Read more on Markets Insider. 

On Thursday, the European Central Bank announced a round of stimulus for the eurozone that included both a rate cut and quantitative easing. 

Interest rates were slashed 10 basis points to -0.5%, the lowest level ever and the bank said it will begin purchasing 20 billion euros of bonds a month starting in November to inject money back into the economy. 

It's the first time the ECB has changed the deposit rate since 2016, a bold cut for outgoing president Mario Draghi, who will be replaced by Christine Lagarde — the former International Monetary Fund Chairman — on November 1. The move is the latest in a trend of central banks lowering rates to boost local economies.

In addition, smaller banks have also handed down rate cuts. Turkey's central bank also surprised with a jumbo rate cut early Thursday before saying that it will begin to slow its pace of monetary easing going forward. Later in the day, Denmark also cut its interest rate to a historical low, following in the ECB's footsteps, Bloomberg reported. 

Read more: 'Being boiled like frogs': A Wall Street investment chief unloads on how the Fed's behavior is actually hurting the middle class it's supposed to be helping

However, not every central bank has handed down a rate cut this month. Earlier in September, Australia's central bank held interest rates at a low 1%, and Canada's held its rates at 1.75%. 

But going forward, there are likely more cuts from major central banks on the horizon. After the ECB decision, all eyes are on the Federal Reserve, which meets September 18. Most investors think that the Fed will cut rates, but it remains to be seen by how much. President Trump has stepped up his bashing of the Fed and Chairman Jerome Powell, saying they should cut faster. 

Trump has even gone as far to say that the US should have zero or negative interest rates, following in the footsteps of countries in Europe and Japan that have had very low and even negative rates for years. 

Here are the seven central banks that have yet to meet in September, as well as what markets and investors expect them to do at upcoming meetings:

1. US Federal Reserve

Next meeting: September 18 

Current interest rate: 2.25% 

What happened at the last meeting: The Fed cut rates by 25 basis points in July

What's expected at the next meeting: Consensus is for another 25 basis point cut 



2. Swiss National Bank

Next meeting: September 19

Current interest rate:  -0.75% 

What happened at the last meeting: The Swiss National Bank held rates steady 

What's expected at the next meeting: Unclear. While the bank has held rates for some time, pressure from the Fed and ECB could lead to another rate cut, Reuters reported.



3. Bank of England

Next meeting: September 19

Current interest rate: 0.75% 

What happened at the last meeting: The Bank of England held rates steady

What's expected at the next meeting: It depends. The bank has held rates steady for years, but a no-deal Brexit could change its course. 



4. Norges, central bank of Norway

Next meeting: September 19

Current interest rate: 1.25%

What happened at the last meeting: The bank held rates steady, pausing a cycle of rate hikes because of global uncertainty. 

What's expected at the next meeting: The bank signaled that a hike is likely in September, but beyond that they will wait and see, Reuters reported. 



5. Bank of Japan

Next meeting: September 19

Current interest rate: -0.1%   

What happened at the last meeting: The BOJ left interest rates unchanged in July. 

What's expected at the next meeting: The BOJ is likely to continue to hold rates steady. 



6. Reserve Bank of New Zealand

Next meeting: September 24

Current interest rate: 1% 

What happened at the last meeting: The bank surprised investors with a 50 basis point cut

What's expected at the next meeting: It's unclear after last month's surprise cut. That and a 25 basis point cut in May broke a pause that began in February 2017.



7. Bank of Mexico, Banxico

Next meeting: September 26

Current interest rate: 8% 

What happened at the last meeting: Banxico announced its first cut since June 2014 at its la ust meeting in August. 

What's expected at the next meeting: The bank is likely to cut further, the Wall Street Journal reported. 



The monthly median rent for a studio in Manhattan this summer hit an astonishing 11-year high, and the city's prices are driving people away in droves

Thu, 09/12/2019 - 4:04pm  |  Clusterstock

Regardless of the size of their apartment, renters in Manhattan are bound to spend a not-so-pretty penny.

According to a market report released by the real-estate brokerage Douglas Elliman, the median rent for a studio in Manhattan in July and August was $2,700. That number, as Bloomberg reported, is the highest its been since June 2008.

Read more: NYC rents just hit a 3-year high, and the city's prices are pushing everyone from millennials to wealthy Wall Street bankers away

As Business Insider previously reported, one year's worth of rent in Manhattan is more than three-quarters of the country's average annual salary, which is $47,060. Even in Inwood, the cheapest neighborhood in Manhattan, the average monthly rent is more than $1,600.

But Manhattan isn't the only borough seeing outrageously high rents.

In June, Brooklyn's median monthly face rent hit an all-time high of $3,000. To put the extremity of that price into perspective, nearly 80 years ago, the cost of rental housing in most places in Brooklyn ranged from $20 to $49 a month — that translates to around just $350 to $700 in today's dollars.

The high cost of living is driving people out of the city

New York City's sales market, like its rental market, is also outrageously expensive. In fact, prospective buyers who earn the city's average annual household income of $62,000 must save $3,100 per year for 36 years in order to afford a 20% down payment on a median-priced home, which, as of June, is $558,000.

And the wealthy are feeling the heat too.

According to a SmartAsset study, New York is the No. 1 state rich millennials are moving away from. The study, which defined rich millennials as people who are younger than 35 with an adjusted gross income of at least $100,000, found that 14,915 of them moved out of the state from 2015 to 2016.

Business Insider's Katie Warren previously reported that wealthy New Yorkers looking to avoid the city's high taxes can save more than $1 million by moving to Florida.

SEE ALSO: NYC landlords were caught renting out 'micro rooms' for $600 a month. Here are 7 places in the US where you can legally rent an apartment for that much — or less.

DON'T MISS: In the 1940s, you could rent a Brooklyn apartment for $20 a month. Today, the median rent has skyrocketed to $3,000.

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Saudi Aramco is gearing up for what could be the largest IPO ever. Here are 10 public offerings its massive listing would dwarf.

Thu, 09/12/2019 - 3:57pm  |  Clusterstock

  • Saudi Aramco is preparing for what could turn out to be the world's largest initial public offering. 
  • The state-run oil company is currently aiming to list as much as 5% of its shares sometime between 2020 and 2021.
  • Saudi officials have suggested Aramco may be worth as much as $2 trillion in the past, which means the company could raise close to $100 billion through an IPO. 
  • Here are 10 IPOs that Aramco could dwarf with its proposed multi-billion-dollar public offering. 
  • Visit the Markets Insider homepage for more stories.

Saudi Aramco is preparing for what could shape up to be the world's largest initial public offering.

The massive state-run oil company is looking to list as much as 5% of its shares sometime in 2020 or 2021. Aramco officials have suggested the company could be worth as much as $2 trillion in the past. 

If Aramco were to list 5% of its shares at a $2 trillion valuation, it could raise as much $100 billion through the offering. That's four times the largest IPO in history. 

Aramco has reportedly hired JPMorgan, Morgan Stanley, and Saudi Arabia's National Commercial Bank for top underwriting spots on the offering, according to Reuters.

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The company is also considering a multi-stage IPO, listing about 1% on Saudi Arabia's stock exchange and another 1% on an international venue prior to its 5% offering. The proceeds from the IPO are expected to help Saudi Arabia diversify its economy away from oil. 

The public markets have seen some sizeable IPOs this year, from Uber raising $8.1 billion to Pinterest raking in $1.4 billion. But not a single public offering from this year cracks the top ten largest listings of all time. 

Here are the 10 largest IPOs that Saudi Aramco's potential listing could blow out of the water, ranked in increasing order of proceeds:

10. Deutsche Telekom AG

Industry: Telecommunications

Date of IPO: November 1996

Amount raised during IPO: $13 billion

Source: Investopedia



9. Facebook

Ticker: FB

Industry: Social media

Date of IPO: May 2012

Amount raised during IPO: $16 billion

Source: Investopedia



8. Enel

Industry: Gas and Electric

Date of IPO: November 1999

Amount raised during IPO: $17.4 billion

Source: Investopedia



7. AIA Group

Industry: Insurance

Date of IPO: October 2010

Amount raised during IPO: $17.8 billion

Source: Investopedia



6. Visa

Ticker: V

Industry: Payments

Date of IPO: March 2008

Amount raised during IPO: $17.9 billion

Source: Investopedia



5. NTT DOCOMO

Industry: Telecommunications

Date of IPO: October 1998

Amount raised during IPO: $18.4 billion

Source: Investopedia



4. General Motors

Ticker: GM

Industry: Automotive

Date of IPO: November 2010

Amount raised during IPO: $20.1 billion

Source: Investopedia



3. Industrial and Commercial of China

Market Value: 

Industry: Banking

Date of IPO: October 2006

Amount raised during IPO: $21.9 billion

Source: Investopedia



2. Agricultural Bank of China

Industry: Banking

Date of IPO: July 2010

Amount raised during IPO: $22.1 billion

Source: Investopedia



1. Alibaba

Ticker: BABA

Industry: Ecommerce

Date of IPO: September 2014

Amount raised during IPO: $25 billion

Source: Investopedia



We asked financial planners for the best strategy to tackle credit card debt, and there are 2 clear favorites

Thu, 09/12/2019 - 3:53pm  |  Clusterstock

  • Business Insider asked financial planners how to get out of credit card debt.
  • They all recommended either the debt snowball method, which prioritizes paying off the smallest balance first, or the debt avalanche method, which prioritizes paying off the highest-interest rate balance first.
  • The debt avalanche method is heralded as the more cost-effective strategy, but the debt snowball method can help build momentum.
  • To be effective, both strategies require making at least the minimum payment on all balances. 
  • Visit Business Insider's homepage for more stories.

Nearly half of American households are in credit card debt, carrying an average of $6,929, according to a NerdWallet analysis.

Any amount of debt can feel suffocating and even insurmountable given that the average annual percentage rate (APR) is creeping toward 18%, but there are ways to get out from under it. 

Business Insider asked financial planners their favorite way to get out of credit card debt, and they all recommended two equally effective strategies: the debt snowball and the debt avalanche.

How to get out of credit card debt

"I would start with writing it all out," Nick Vail, a CFP at Integrity Wealth Advisors, told Business Insider. "This can be eye opening in and of itself."

First, write down exactly how much you owe and the interest rate on each account. Then figure out how much money you can afford to put toward debt payments every month.

In any case, you'll continue to pay at least the minimum payment on all debt balances. With the debt snowball method, you'll put any extra money toward your smallest debt until that's paid off, and then you'll tackle the next highest balance. With the debt avalanche, you'll prioritize the highest-interest rate debt first, and so on.

You must make at least the minimum payment every month

For either strategy to be effective, you must continue making at least the minimum payment on all balances. Making late payments or no payments can be damaging to your credit score, as can keeping total balances that take up more than 30% of your credit limit — known formally as your credit utilization rate.

"The avalanche method is typically the most efficient mathematically, but the snowball method might give you the most satisfaction to keep you motivated," said Luis Rosa, a CFP who founded the financial-planning firm Build a Better Financial Future

Read more: The 'debt snowball' and 'debt avalanche' might sound gimmicky, but they're both highly effective strategies to get out of credit card debt

"I'm usually an optimizer, but for those with balances on multiple cards, I love Dave Ramsey's snowball method," said Andrew Westlin, a CFP at Betterment. "Getting that first balance paid off builds confidence and momentum, and these small wins are crucial in long-term success," he said.

Most importantly, find a strategy you can commit to, said Bobbi Rebell, CFP. "It's like dieting — there are popular methods that are great, but the best one is the one that works for each person."

More coverage from How to Do Everything: Money

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A key Democrat is trying to block Trump’s multibillion dollar farmer bailout program

Thu, 09/12/2019 - 3:51pm  |  Clusterstock

Democratic Rep. Nita Lowey, the chairwoman of the House Appropriations Committee, has taken steps to block a Trump administration program designed to mitigate losses from its trade disputes.

The Washington Post first reported Thursday that Lowey omitted a White House request on the program from draft legislation to fund the government this fall. The so-called continuing resolution has been circulated by congressional Democrats, according to House Appropriations Committee spokesperson Evan Hollander. 

In an email to Business Insider, Hollander said Americans "deserve a robust debate on the costs of the Trump trade war." Trump last year sought to placate farmers, who have lost business as a result of tit-for-tat tariffs, through a subsidy package called the Market Facilitation Program. 

A second stage of MFP was introduced this year, bringing its estimated total costs to at least $28 billion. That put the Commodity Credit Corporation, which the administration has used as a basis for the program, on track to hit its borrowing limit before the bailout payments to farmers were fully dispersed. 

The White House wasn't yet aware of the details surrounding the legislation as of this morning, an administration official said. But advisers sent Congress a request in August to raise the borrowing limit on CCC to above its current level of $30 billion, Roll Call reported this month

Facing allegations that it disproportionately benefited large corporations over small farms, MFP was under scrutiny from the start. The Department of Agriculture did not respond to an email requesting comment. 

Trump has faced an increasing amount of criticism for his broad use of tariffs as the economy slows, casting uncertainty onto his reelection prospects. But the president has maintained that his approach would ultimately lead to fairer trade deals for the farmers who helped elect him in 2016. 

"It is expected that China will be buying large amounts of our agricultural products!" Trump wrote on Twitter on Thursday morning

China has resumed purchases of American farm goods since it vowed to halt them last month, but exports have remained sharply lower than before the start of the trade war. The government distributed nearly $3.4 billion in bailout payments to farmers in the first six months of this year, according to USDA data.

Read more: A majority of Americans think a recession will strike in the next year — and they're blaming Trump's trade war

SEE ALSO: One measure shows Americans paid $6.8 billion in tariffs during July — the most in American history

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Kanye West just bought a $14 million Wyoming ranch. Take a look at the massive property that comes with a saloon, an events venue, and a shooting range.

Thu, 09/12/2019 - 3:51pm  |  Clusterstock

The rapper Kanye West just bought a $14 million ranch in Wyoming, TMZ first reported. 

Kim Kardashian West, West's wife, confirmed the purchase on NBC's "Tonight Show Starring Jimmy Fallon" on Wednesday.

The ranch, which spans hundreds of acres of grassy plains with a backdrop of dramatic mountain scenery, includes a restaurant and saloon, a ranch-style event venue, a maintenance shop, an office building, and ranch improvements such as horse barns, sheds, corrals, storage facilities, and a state-of-the-art shooting range.

It's unclear whether West bought the whole property, which was listed as six separate parcels, or just a portion.

Take a look at the sprawling Wyoming ranch.

SEE ALSO: I toured a $975-a-night luxury resort in Jackson Hole, and I found that it delivers on 2 of the top desires of wealthy travelers: privacy and experience

DON'T MISS: Fortune 500 companies like Google and Disney have paid more than $10,000 for horse whispering demonstrations for their employees. I visited a Wyoming ranch to find out what it's all about.

Kanye West bought a Wyoming ranch that was listed for $14 million, TMZ first reported.

According to TMZ, West did not pay full price for the ranch, but the sale amount is unknown.

Kim Kardashian West confirmed that her husband bought a ranch in Wyoming on NBC's "Tonight Show Starring Jimmy Fallon" on Wednesday.

A representative for West did not immediately respond to Business Insider's request for comment.



The Monster Lake Ranch is in northwestern Wyoming, about 75 miles from Yellowstone National Park and just under 60 miles from the border with Montana.

Source: Google Maps



It's about a four-hour drive from the resort town of Jackson, which one report called the most unequal place in the US.

The average income of the richest 1% in the Jackson metropolitan area is more than $16.1 million, while the average income of the remaining 99% is $122,447, according to a 2018 report published by the Economic Policy Institute.



West and other members of the Kardashian-West-Jenner clan have previously been spotted in Jackson, as well as at the nearby luxury resort Amangani.

At Amangani, which features a heated outdoor infinity pool with stunning mountain views, a night's stay starts at an average of $975 and can go up to $2,100.



The Monster Lake Ranch that West is reported to have bought spans at least 1,400 acres of grassy plains with a backdrop of mountains.

Source: J.P. King Auction Company



It was listed for sale as six separate parcels with J.P. King Auction Company. It's unknown which of the parcels West purchased.

When reached by Business Insider to confirm the sale to West, the marketing director of J.P. King Auction Company said: "Unfortunately we do not comment on our clients or the purchasers of our properties that we represent."



The property includes a restaurant and saloon, a ranch-style event venue, a maintenance shop, an office building, and ranch improvements such as horse barns, sheds, corrals, storage facilities, and a state-of-the-art shooting range.

Source: J.P. King Auction Company



The property name comes from its freshwater lakes that are teeming with "monster trout," according to the listing.

There are two ranch-manager homes on-site, as well as eight luxury cabins that can accommodate up to 20 guests.

A landing page for the Monster Lake Ranch indicates it was used as a guest ranch, offering cabin and tepee rentals.

Source: Monster Lake Ranch



Horses have plenty of space to roam on the ranch.

Kim Kardashian West confirmed her husband's purchase of the ranch on NBC's "Tonight Show Starring Jimmy Fallon" on Wednesday.

"We love Wyoming; it's always been such an amazing place," Kardashian West told Fallon. "My husband did just buy a ranch there. His dream and his vision is to move there. I love LA, so I envision summers; I envision some weekends. But yeah, we love it."



The reality-TV star said she recently visited the property "in the wilderness" and wasn't prepared for the lack of electricity and a bathroom.

"My phone dies — there's literally, like, no service, no nothing," Kardashian West told Fallon. "I'm peeing in a bottle because there's, like, no bathroom."



In a Vogue Arabia interview published 10 days ago, West had asked Kardashian West where she saw herself in 10 years, and she told him: "I see us living on a ranch in Wyoming, occasionally going to Palm Springs and our home in Los Angeles — and becoming a lawyer."

Source: Vogue Arabia



The ranch's listing says that Wyoming is "a top-tier, tax-friendly state for landownership and business."

USA Today recently ranked Wyoming as the most tax-friendly state for business, citing its lack of individual and corporate income tax and low property and sales taxes.



Cadillac has affirmed its commitment to BMW-beating performance with the new CT4 sedan (GM)

Thu, 09/12/2019 - 3:35pm  |  Clusterstock

  • The new CT4 and CT4-V retain Cadillac's commitment to rear-wheel-drive on entry-level luxury sedans.
  • All-wheel-drive is also an option.
  • Cadillac will offer its Super Cruise hands-free highway driver-assist system in 2020 on the CT4.
  • Two engines will be available, both turbocharged: a 2.0-liter inline-four-cylinder option and and high-performance 2.7-liter four tuned to higher power output for the CT4-V variant.
  • Visit Business Insider's homepage for more stories.

For years, Cadillac has tried to challenge BMW at the Bavarians' own game: high-performance sports sedans. 

But the brand is moving away from that preoccupation, as it becomes the lead all-electric nameplate for General Motors' future and shifts its portfolio toward the luxury crossover SUVs that consumers are now demanding.

That doesn't mean Caddy has given up on spirited motoring, however.

Case in point: the just-revealed, all new CT4 sedan. 

The 2020 CT4 follows the rollout of the CT4-V, which requires a convoluted explanation: that car was a downgraded update to the excellent ATS-V, intended to preserve some performance cred without continuing a possible futile battle against Germany's go-fast sheet metal.

We now have the CT4, logical successor to the ATS. This isn't some wild alteration of all that was once "A" and is now "C," but the CT4 does realign the Caddy lineup, with the four doors starting out at CT4 level, then moving up to the CT5 and the flagship CT6.

"We developed CT4 to appeal to youthful buyers in the luxury market who may be new to the Cadillac brand," Andrew Smith, Cadillac design global design chief, said in a statement. "The vehicle was intended to draw attention, using a combination of great proportions, taught surfacing and Cadillac family details that hint at the athletic driving experience this vehicle offers."

The sedan will go on sale in four trims: Luxury, Premium Luxury, Sport, and V-Series.

For purists, the appeal starts with Caddy's preservation of a rear-wheel-drive architecture for the car; it would have been oh-so easy to shift to front-wheel-drive for a car that should price just north of $30,000 and that might well be oft-ordered in a all-wheel-drive configuration. (Then again, it's also a major benefit for Caddy to retain the mechanicals from the ATS).

A RWD CT4 is music to the ears of enthusiasts. "Cadillac is dedicated to building the most exhilarating sport-luxury sedans," chief engineer Rob Kotarak said in a statement. "Every element of the CT4 is designed to bring innovative technologies right to the driver, providing discerning driving dynamics with cutting edge precision."

Two engine options will propel the CT4 and the CT4-V variant. The CT4 gets a 2.0-liter, twin-scroll, turbocharged four-cylinder, making 237 horsepower with 258 pound-feet of torque piped through an eight-speed automatic. The top-of-the-line CT4 and CT4-V get a 2.7-liter "Dual-Volute Turbo" four-banger that cranks out 309 horsepower with  348 pound-feet of torque in "Premium Luxury" trim and 325 horsepower with 380 pound-feet of torque in the V model. A 10-speed auto manages the power for the bigger motors.

The CT4-V also gets a limited-slip rear differential.

Cadillac will also make its Super Cruise semi-self-driving system available on CT4 in 2020. Super Cruise has thus far been limited to CT6; it enables fully hands-free operation on GPS-mapped highways.

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NOW WATCH: We took a ride around NYC in the new ‘Ghostbusters’ car which is actually a 1984 Cadillac hearse

A Wall Street strategist has doubled down on his warning that the 'biggest bubble in history' will burst. Here are the 12 stocks he says investors should buy to weather the storm.

Thu, 09/12/2019 - 3:24pm  |  Clusterstock

  • The BTIG strategist Julian Emanuel is reiterating his call that the bond bull market has become a bubble on the verge of bursting, and he's predicting a decline in prices that will reshape leadership in the stock market.
  • He said he's identified underappreciated and attractive stocks in the energy and financial sectors that should climb as the trend continues. 
  • Emanuel said bond prices were dipping and yields were rising again as investors have let go of some of their concerns about a recession — and that's a key part of the bond bubble popping.
  • Click here for more BI Prime stories.

The threat of a market bubble bursting is alarming, but it also creates opportunities in other areas.

Julian Emanuel, the chief equity and derivatives strategist for BTIG, is on record saying the bond market has become not just overinflated but also potentially "the greatest bubble ever." That's driven prices to historic highs and bond yields to all-time lows.

It's hard to predict what will make a bubble burst, but Emanuel wrote that a turn in investors' mindset was required. And an important one may have arrived.

"Investors' 'obsession with recession' appears to have topped as the Fed's rates cuts support inflation expectations," he wrote in a recent note to clients.

That means a slide in prices and a rise in yields, Emanuel said, with widespread implications for stocks. That trend might already be playing out.

"We expect further broad market upside to be led by the narrowing of the current valuation divergence – rotation – between cyclicals (Financials and Energy) and defensives/bond proxies (Utilities, Consumer Staples, Software)," he wrote, saying that the first group should outperform and the second would likely underperform.

To find the stocks most likely to climb, Emanuel screened the already struggling financial and energy sectors. He looked for stocks that did worse than their respective sectors in the market's downturn from July 26 to September 4 and which have appealing valuations based on their estimated price to earnings and price to earnings growth multiples.

"This list ... could be expected to outperform if bond yields rise," he wrote.

Here are 12 stocks Emanuel says fit the bill:

SEE ALSO: The chief strategist at a $1 trillion investing giant says Trump is doomed to lose his trade war — and explains why that would be the best possible outcome for markets

12. Capital One Financial

Ticker: COF

Loss from July 26 to September 4: 12.4%

2019 estimated P/E: 8.12

Market Cap: $42.5 billion

Sector: Financials



11. Cimarex Energy

Ticker: XEC

Loss from July 26 to September 4: 12.5%

2019 estimated P/E: 10.38

Market Cap: $4.6 billion 

Sector: Energy

 



10. Principal Financial Group

Ticker: PFG

Loss from July 26 to September 4: 13.4%

2019 estimated P/E: 9.73

Market Cap: $15.5 billion

Sector: Financials



9. Discover Financial Services

Ticker: DFS

Loss from July 26 to September 4: 14.6%

2019 estimated P/E: 9.41

Market Cap: $26.7 billion

Sector: Financials



8. Occidental Petroleum

Ticker: OXY

Loss from July 26 to September 4: 15.5%

2019 estimated P/E: 16.77

Market Cap: $39.9 billion

Sector: Energy



7. Affiliated Managers Group

Ticker: AMG

Loss from July 26 to September 4: 15.6%

2019 estimated P/E: 6.54

Market Cap: $4.2 billion

Sector: Financials



6. Comerica

Ticker: CMA

Loss from July 26 to September 4: 17.2%

2019 estimated P/E: 8.37

Market Cap: $9.3 billion

Sector: Financials



5. SVB Financial Group

Ticker: SIVB

Loss from July 26 to September 4: 17.8%

2019 estimated P/E: 10.39

Market Cap: $10.8 billion

Sector: Financials



4. Invesco

Ticker: IVZ

Loss from July 26 to September 4: 20.4%

2019 estimated P/E: 7.15

Market Cap: $6.8 billion

Sector: Financials



3. Lincoln National

Ticker: LNC

Loss from July 26 to September 4: 20.9%

2019 estimated P/E: 6.43

Market Cap: $11.4 billion

Sector: Financials



2. Prudential Financial

Ticker: PRU

Loss from July 26 to September 4: 22.9%

2019 estimated P/E: 7.28

Market Cap: $34.3 billion

Sector: Financials



1. Unum Group

Ticker: UNM

Loss from July 26 to September 4: 23.2%

2019 estimated P/E: 5.38

Market Cap: $5.8 billion

Sector: Financials





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