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Ray Dalio clarifies his previous comments that the market impact of coronavirus has been 'exaggerated'

Wed, 02/12/2020 - 6:11pm  |  Clusterstock


Ray Dalio clarified in a LinkedIn post that he believes coronavirus could have a substantial impact in the near term but that the market sell-off did not reflect the temporary nature of the outbreak. 

The post followed comments Dalio made on Tuesday at a conference in Abu Dhabi, United Arab Emirates, that the coronavirus "probably had a bit of an exaggerated effect on the pricing of assets because of the temporary nature of that."

Dalio, who runs Bridgewater Associates — the largest hedge fund in the world — corrected what he meant by those comments in his post.

"I think the most likely outcome is that this virus will be a larger version of SARS that will have a significant temporary effect but won't have a big long term influence, so the downward market price moves related to it are probably becoming exaggerated," he said.

At the height of investor fear around the Wuhan coronavirus, markets across asset classes and countries sold off. US equities have mostly recovered, but other markets such as oil and copper remain in the lurch. Coronavirus has infected 45,000 and killed 1,100 in its spread to more than 20 countries.

The economic effects are already apparent: US companies including Apple, Disney, and Starbucks shuttered their operations in the region while Chinese manufacturing and retail have seen disruptions as well. Multiple economists have warned the virus could undermine growth in China, the second-largest economy. 

In his Tuesday talk, Dalio pointed to wealth and political inequalities as trends he finds concerning for the global economy. 

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Having a Delta credit card gets you a free checked bag every time you fly the airline — here's how to use the perk

Wed, 02/12/2020 - 5:43pm  |  Clusterstock

One of the perks that comes with Delta's three main credit cards — the Delta SkyMiles Gold, Delta SkyMiles Platinum, and Delta SkyMiles Reserve cards — is a free checked bag for the cardholder and up to eight travel companions on the same reservation.

For travelers who tend to check bags, the savings can add up quickly. Delta charges $30 each way for a checked bag on a domestic flight. For a family of four taking a long vacation, just having the credit card can help save $240 — $30 each bag, each way would mean a total of $240 for the whole family. 

Keep in mind that we're focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It's important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back. 

How to get a free checked bag with Delta credit cards

When you apply for a Delta Amex card, you're prompted to enter your Delta SkyMiles number. From that point on, as long as the card is open, the benefits are tied to your SkyMiles account.

Just make sure that you're logged in to your Delta account when booking tickets — or, if you're booking through a third-party portal like Expedia, just enter your Delta number during the booking process. If you go to add a bag when checking in for your flight, you'll see a cost of $0.00. The same will apply for anyone else on the same reservation with you.

The key is making sure that you're on the same reservation. If you book separately, your travel companions won't have access to free checked bags unless they have their own Delta credit card (or hold elite Medallion status). 

Delta SkyMiles credit cards

If you're thinking about getting a Delta credit card, now is the perfect time. Three of the cards are offering limited-time welcome bonuses that can get you up to 100,000 bonus miles — but only until April 1.

The Delta SkyMiles Gold card offers 60,000 Delta SkyMiles after you spend $2,000 in the first three months. You'll earn an additional 10,000 miles after your first cardmember anniversary.

The Platinum version is offering 80,000 miles after spend $3,000 in the first three months, plus another 20,000 miles after your first cardmember anniversary.

Delta's premium card, the Delta SkyMiles Reserve, offers 80,000 miles and 20,000 Medallion Qualification Miles after you spend $5,000 in three months. You'll earn an additional 20,000 miles after your first cardmember anniversary.

Delta and Amex recently rolled out some significant changes to their lineup of cards, including additional bonus categories for earning miles and new benefits. The annual fees for most cards also increased.

Don't forget that these welcome bonuses are only available until April 1, so don't wait.

$99 annual fee waived the first year: Click here to learn more about the Delta SkyMiles Gold card » $250 annual fee: Click here to learn more about the Delta SkyMiles Platinum card » $550 annual fee: Click here to learn more about the Delta SkyMiles Reserve card »

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

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Trump's latest Fed pick heads to her confirmation hearing Thursday. She backs the gold standard, near-zero interest rates, and less central bank independence.

Wed, 02/12/2020 - 5:40pm  |  Clusterstock

  • President Donald Trump has tapped former White House economic adviser Judy Shelton for a powerful position at the Federal Reserve.
  • Shelton has for years advocated for highly unconventional economic theories and policies.
  • Her confirmation hearing before the Senate Banking Committee on Thursday is expected to be contentious.
  • Visit Business Insider's homepage for more stories.

President Donald Trump has tapped former White House economic adviser Judy Shelton for a powerful position at the Federal Reserve, putting her on track to shape policy alongside central bankers whose mainstream views she has long objected to. 

Shelton has instead advocated for highly unconventional economic theories and policies, ranging from the gold standard to a less independent central bank. Her nomination to the Board of Governors has drawn scrutiny from economists and lawmakers, including the senator and presidential hopeful Elizabeth Warren.

Her confirmation hearing before the Senate Banking Committee on Thursday is expected to be contentious. Asked about the nomination, the 13 Republicans on the Senate Banking Committee either declined to comment to Business Insider or did not respond to multiple email inquiries. 

Shelton did not respond to requests for comment but was interviewed by Business Insider in June. Here's where she stands on key economic issues.

SEE ALSO: Trump's approval rating on the economy jumps to all-time high

The role of the Fed

Shelton has suggested the Federal Reserve has too much power and questioned its very existence. She has repeatedly likened the Fed to a system of central planning, even saying it has "Soviet" influence over financial markets. 

"How can a dozen, slightly less than a dozen, people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate?" she said to The Financial Times in May. "The Fed is not omniscient. They don't know what the right rate should be. How could anyone?" 

Shelton has also questioned the value of the so-called dual mandate set by Congress, which gave the Fed its core job of maintaining stable prices and maximum employment.



Government data

Shelton has questioned the accuracy of economic data, saying in 2015 that she doesn't "trust the statistics on GDP growth or on inflation." Last year, she told The Washington Post she was still skeptical of whether the statistics captured technological innovation correctly.



Interest rates

Shelton began to advocate for drastically lower interest rates around the same time that Trump took office, a sharp reversal from her position in the years following the Great Recession. As recently as 2016, she criticized low interest rates for flooding "wealthy investors and corporate borrowers with cheap money, while savers with ordinary bank accounts have been obliged to accept next-to-nothing returns."

More recently, she has called for eliminating interest on excess reserves — or extra money that banks store at the Fed — because it incentivizes holding funds over lending them. Her current support for near-zero interest rates has almost certainly curried favor with Trump, who has repeatedly demanded the central bank take steps to juice the economy.



The gold standard

Shelton has advocated for a return to a system like the gold standard, a now-fringe economic policy that pegged the dollar to the yellow metal. 

Proponents argue the gold standard prevents overly loose monetary policy. But it is widely dismissed by mainstream economists, who say it is highly impractical in the current financial system and that it would tie the hands of policymakers in the event of a recession.



Fed independence

Experts say a central bank needs to operate independent from political influence to maintain a healthy economy and financial markets. But Shelton has said the Fed should "pursue a more coordinated relationship with both Congress and the president" in order to reach economic goals, such as a smaller trade deficit.

Pressed on whether the central bank was an independent institution, Shelton told Business Insider in June that it would be "superficial" to answer yes or no. She pointed to administrative operations between the Federal Reserve and the Treasury Department, calling the agencies "fiscally incestuous."



1 in 10 card transactions could be done with Apple Pay by 2025, providing Apple a revenue boost amid iPhone sales slump (AAPL)

Wed, 02/12/2020 - 5:32pm  |  Clusterstock

Apple Pay use is growing around the world, offering Apple an alternative stream of revenue as sales of physical technology like the iPhone slowed globally during the last year.

Payments made with Apple Pay currently make up 5% of global card transactions, and the mobile payment system is on track to account for 10% of global card transactions by 2025, according to researchers at Bernstein cited in a report by Quartz

Apple Pay is part of the company's services revenue, which reached a record high for the company of $12.7 billion for the first quarter of 2020. That quarter, Apple also delivered record-breaking revenue of $91.8 billion.

This revenue could give a boost to Apple as it faces slowing iPhone sales around the world and competes against companies like Huawei that offer cheaper options to consumers, especially in emerging markets like China and India. 

Launched in October 2014, Apple Pay allows iPhone and Apple Watch users to pay in stores with their devices using credit or debit cards registered on Apple Pay. Apple also offers Apple Pay on its devices to pay for online transactions. Apple makes money from the mobile payment service by charging a small fee for each transaction. 

Apple told Business Insider that Apple Pay is used at a rate of 15 billion transactions per year.

Last year, Apple and Goldman Sachs released the Apple Card, which encourages cardholders to use Apple Pay by giving 2% cash back when users make a purchase on the card using Apple Pay, but only 1% if they use the physical card. 

Apple said that over 70% of merchants in the US accept Apple Pay, while that number jumps to 99% in Australia.

In addition to in-store payments, Apple said it is also expanding to provide Apple Pay as a method of payment for public transit, having already launched in New York and Portland, and coming to Washington, D.C. and Los Angeles this year. 

While mobile payments are still struggling to gain traction in the US, more than 80% of consumers used mobile payments in China in 2018, according to research from Bain cited in a report by CNBC. 

Apple faces competition in China from QR code-based mobile payment services from Chinese tech giants Alibaba and Tencent. 

Apple Pay has also received criticism that by only allowing its devices' NFC technology to be used for Apple Pay, Apple is unfairly stifling competition. European antitrust authorities have also raised concerns about Apple Pay, according to Reuters. Apple, in response to a request for comment from Business Insider, said that it prioritizes customer security and privacy and that allowing other payment processors to access NFC on its devices could create a risk for users. 

But the latest Apple Pay projection from Bernstein is undoubtedly good news for Apple as it looks to define the next decade of its business.

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My parents 'refinanced' my student loans, and even though I'm still paying them off I'll save over $9,000

Wed, 02/12/2020 - 5:28pm  |  Clusterstock

  • When I took out student loans to attend grad school, I was able to get government loans at a fixed 6.21% interest rate.
  • Midway through my studies, however, my parents offered to "refinance" my loan by paying it off using their home equity line of credit, with the understanding I'd pay them back at their own loan's interest rate.
  • Because of their generosity, I'm especially motivated to pay off my loans. At the rate I'm going, I should be able to pay them off about six months sooner than originally expected, and spend about $9,000 less.
  • Read more personal finance coverage »

I'm lucky in a lot of ways, but being able to "refinance" my student loans with my parents' help is one of the biggest.

I didn't have loans from my undergrad, but when I went back to school to get my MBA, I needed some financial help.

When I applied for loans by filling out the FAFSA, I was granted enough unsubsidized loans to cover my education in addition to a small subsidized loan. I started my MBA in 2014 and the majority of my student loans were direct unsubsidized loans serviced by NelNet with a 6.21% fixed interest rate.

It was expensive, but I knew I wanted to move away from engineering into a different type of role. Plus, I love learning, so I really would go to school for the rest of my life if I could afford it.

By the time I was done with school, I was going to be making a sizable monthly payment. 

My parents refinanced my loans at a lower interest rate

When you refinance your loans — usually through a private lender — the lender buys out your original loans and you pay the lender instead of the original loan issuer, usually at a lower interest rate.

That's pretty much what my parents did for me.

About halfway through my graduate degree, I was talking with my parents about my loan and finances in general. They mentioned the idea of paying off my student loans with their home equity line of credit, and then I would owe them instead. At the time, their home equity line of credit had a sub-prime 2.49% variable interest rate — significantly lower than my student loan interest rate.

However, I had to consider the fact that the home equity line of credit had a variable interest rate (it could change in the future, and potentially increase) while my student loans were fixed.

After taking some time to think about it, I decided to take my parents up on their offer.

The savings were too good to pass up

The total of my loan at the time it was paid off and moved to the home equity line of credit was $38,764. Over the course of the rest of my MBA, my parents paid my tuition through the home equity line of credit. And while I was in school, I made payments toward the loan about equal to the interest accrued each month. At the maximum, I owed $70,377 on my loan.

The interest rate has changed multiple times since 2016 when my loan was moved over to the home equity line of credit, but at maximum, it was 4.49% (in June 2019), which is still significantly lower than my fixed rate with my original student loan.

Since finishing school, I've upped the amount I'm paying toward my loan as much as I can each month. Since I freelance full-time and have a variable income, the amount I pay changes each month, but I've still been able to pay off more than $15,000 in 2019 alone. That said, I still owe about $53,000 on my loan, so it's going to take me a while to get it paid off the rest of the way.

I did an analysis to compare what I would have had to pay in total with my NelNet loan compared to what I currently will have to pay. I assumed that I paid $100 per month toward my loan while I was in school, $750 per month for four months following graduation, and then $1,500 per month every month thereafter. For the loan through my parents, I also assumed that the interest rate will remain fixed at what it is now (again, for a variable loan that's not a given, but I used a fixed rate just for the calculation).

Knowing my parents were so generous makes me want to pay even faster

Assuming I continue to make $1,500 payments each month, and would have made $1,500 payments with my NelNet loan, my parents' willingness and ability to help me will allow me to pay off my loan six months earlier: in January 2023 instead of July. Over time, this will save me $9,353 in total.

While in a way I would rather owe a debt to my parents instead of the government, owing them that much money did make me kind of nervous at first. At the point in time I moved my loan over to them, I was still in school and only working part-time as a freelance writer, meaning I wasn't making very much money and couldn't make big payments. 

During the time I was finishing my MBA, I built up my freelance writing business quite a bit and now that I'm used to making regular monthly payments and doing well with my career, I'm more inclined to pay off my loan faster than I think I would be if I owed the government. I want to make good on my loan to my parents, since they did something generous that they absolutely did not need to do.

Obviously, having your parents refinance your loans isn't an option for everyone. However, I've seen firsthand what  difference refinancing for a lower interest rate can make. Many private lenders offer student loan refinancing, so make sure to get quotes from multiple lenders before deciding to refinance — you'll want to confirm you'll ultimately save money. Also, note that when you use a private lender to refinance public loans, you lose the ability to use income-driven repayment plans and qualify for loan forgiveness.

But if those programs aren't a consideration for you, it's worth seeing how much you could save.

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Kohl's cuts 250 jobs while arguing that it is operating from 'a position of financial strength'

Wed, 02/12/2020 - 5:25pm  |  Clusterstock

Kohl's is eliminating 250 roles, including an entire "layer" of regional-store leadership, according to a report from the Milwaukee Journal Sentinel.

The retailer said it was initiating the reorganization while operating "from a position of financial strength."

"This reorganization in our business will empower decision-making, reduce management layers, streamline communications and drive greater efficiency in many areas of our business," Jen Johnson, Kohl's senior vice president of communications, said in a statement that Fox 6 journalist Suzanne Spencer posted on Twitter.

NEW: @Kohls announces major layoffs - 250 positions. VP of communications just released a statement. pic.twitter.com/bTFTejEWXS

— Suzanne Spencer (@suzspencertv) February 12, 2020

In the statement, Johnson said Kohl's was not slated to close "any stores or corporate offices" and that it was "continuing to hire in key areas." The role eliminations will affect regional-store leadership, Kohl's merchant organization, and certain corporate teams.

Kohl's provided Business Insider with a copy of Johnson's statement. 

Little news: Menomonee Falls, Wisconsin-based Kohl's is laying off 250 employees, including regional store leaders, merchants and other corporate roles.

"It is important to note that Kohl’s is in a position of financial strength," a spox said.

— Nathaniel Meyersohn (@nmeyersohn) February 12, 2020

Johnson said in the statement Kohl's would offer laid-off employees both outplacement services and "a competitive severance package" and thanked them "for their contributions and years of service at Kohl's."

"The organizational changes we've made are driven by the evolution of our strategic business priorities to create a more agile and empowered organization to support our long-term sustainable growth," Johnson said in the statement. 

SEE ALSO: An Amazon Prime Air partner is laying off nearly 3,000 workers as Amazon brings more jobs in-house

DON'T MISS: Macy's is closing a call center in a move that will affect 800 jobs

UP NEXT: Macy's is closing 125 stores, cutting thousands of corporate jobs, and shuttering offices

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I'm happy to pay a monthly fee for my robo-adviser because it's investing in companies that share my values — and growing my money

Wed, 02/12/2020 - 5:13pm  |  Clusterstock

 
  • The investment world is male dominated — research has shown that time and again. Because of that, "gender-neutral" investing advice, while well-intentioned, privileges men's interest, salaries, and goals.
  • Enter Ellevest, a women-first robo-adviser that builds portfolios based on a different set of criteria and offers Impact Portfolios that invest in socially responsible companies.
  • I was drawn to Ellevest as a woman in finance, and I'm so glad I signed up — even though I pay a monthly fee to have my assets managed, I've watched my money grow in the short time I've had my Ellevest account.
  • Sign up with Ellevest today and invest in companies that share your values »

If I were to ask you to picture the New York Stock Exchange floor or an investment banker, what kinds of images pop into your mind? In my mind's eye, I often see the bustling trading floor with lots of bespoke suits and short haircuts, corner offices, live updates scrolling across the Times Square screens, and, generally, not very many women. 

Even as a woman with several investment profiles as well as my own successful business, I still think of the investment world as mostly male. And I'm not off base. According to data from SoFi, men invest more money (and invest more aggressively) than women. Plus, women hold a fraction of high-level positions at investment firms.

Ellevest is a robo-adviser that puts women first

Fortunately, Ellevest exists and it's trying to shift the tide; it's an investment company created by women, designed to benefit and encourage women investors

Ellevest is taking a gender-forward approach to investing because, according to its research, "gender-neutral" investing typically defaults to men and male salaries, lifestyles, goals, and experiences. 

Ellevest isn't targeting women because women can't invest the same way as men, but because so-called gender-neutral investing, by default, isn't equitable — it privileges men's interests, preferences, higher salaries, and shorter lifespans.

As a robo-adviser, Ellevest takes each investor's goals, risk aversion, and finances into account when putting together a client's portfolio. It's no secret that women generally tend to invest in a more conservative manner than men, resulting in long-term gains rather than volatile short-term gratification. So Ellevest investment forecasting takes into account hundreds of market scenarios, historic downturns, and the impact of taxes and fees when building portfolios. 

Interested in opening an Ellevest account? Sign up with just a few clicks »

As a woman with a data-driven brain, I was sold. I immediately signed up to invest with Ellevest as soon as I learned about it. 

My Ellevest experience

The signup process was relatively straightforward: I simply entered my personal information and long- or short-term goals, then submitted my salary as well as the current value of any funds I wished to be taken into account. As a member, I could link a credit union account, checking and savings accounts, investment profile, 401(k), or any other type of account I held. 

Next, I was able to choose an overarching financial goal. Whether I'd like to build wealth, retire on my own terms, start a family or business, buy a home, or save for a vacation or an emergency, my Ellevest account would tailor itself to that particular goal. 

To match my personal financial goals, I selected the option to build my wealth in the long-term. For this setting, Ellevest gave me a 20-year projection with error bars ranging from its value in a very poor market to its value in an exceptional market. 

This projection was based on pre-set monthly and one-time investments, but I am always free to modify those to explore different projection scenarios. I linked my bank account to Ellevest and set up a recurring, automatic monthly deposit.

My personal portfolio came out heavy on broad-based ownership of the entire US stock market, a sizable chunk of emerging international corporate stocks, and a small emphasis on US bonds. However, I can up my aggressiveness (heavier emphasis on stocks) or up my conservativeness (smaller emphasis on stocks) as I see fit. 

Ellevest also has another interesting option available: Impact Portfolios.

Impact Portfolios redistribute stock and bond ownership to include companies that emphasize women in leadership, sustainability and accountability, and community development. If I switched to an Impact Portfolio, I would still leave a sizable chunk of my stock ownership as-is, but 49% of my ownership would be reallocated to fund companies that comply with those Impact Portfolio goals. 

For me, this was a no-brainer. If I could invest ethically and even possibly do better in the long run, it was worth the slightly higher average fund fee. Instead of sticking with my Core Portfolio, I switched to an Impact Portfolio. 

The fees are worth it

Investing with Ellevest isn't completely fee-free, but it shouldn't be. Using Ellevest to manage my money is so simple that I have no qualms with paying small fees — these fees are a small percentage of your funds under management and the rate you pay depends on whether you're investing with basic Ellevest Digital or Ellevest Premium. 

Premium offers financial planning and career coaching services, but at this point, I've chosen to stay with the basic service until I have significant funds under management. 

With basic Ellevest Digital service, Ellevest pulls 0.25% of my funds under management annually, but that fee is offset a bit by the $20 gift that Ellevest deposited into my account as a sign-up bonus. 

My money is growing

After letting a few months go by, it's clear to me that investing with Ellevest was a smart move. With my personal settings and recurring deposits, I've seen a 2.6% total growth in this short time. Ellevest shows me exactly how much money I invest into each component of my portfolio, and notes where exactly my returns originate. It's very transparent, and transparency is quite important to me.

I appreciate Ellevest because it helps make investing accessible to consumers who don't have a sizable lump sum of money to use for a play portfolio. 

Most of all, though, Ellevest's use of data makes it one of the more competitive investment companies out there. By factoring in historical market conditions as well as the impact that gender, salary, and lifespan have on realistic financial projections, Ellevest makes it easy and motivating to stay on track. 

I plan to stick with Ellevest for the long haul, and I'm looking forward to watching my money continue to work for me.

Start investing with Ellevest today — it's easy »

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This chart shows the exact age when you're most likely to get divorced

Wed, 02/12/2020 - 5:13pm  |  Clusterstock

  • The US Census Bureau tracks patterns in marital status by age among Americans, including divorce statistics.
  • In recent years, older Americans are more likely to have been divorced, separated, or in a second or later marriage than in previous decades.
  • Younger Americans are more likely to be never married or in a first marriage.
  • Visit Business Insider's homepage for more stories.

A lot of people get married. And if things work out, they'll stay happily married.

But things don't always work out.

Using individual-level Census data from the Minnesota Population Center's Integrated Public Microdata Sample project, we took a closer look at different marital outcomes by each year of age in 2018, the latest year for which data is available.

Based on responses to questions about marital status and number of marriages, we found the proportion of the population at each age that had never married, was in a first marriage, was widowed, or was in a situation in which a first marriage had ended. That last group combines people who responded they were divorced, separated from their spouse, or in a second, third, or later marriage.

In 2018, about 9% of 30-year-olds had already ended one marriage. The proportion of people who were divorced, separated, or married multiple times maxed out at age 62 when about 41.6% of respondents fell into this category. That was just shy of the 42.3% of 62-year-olds who were in their first marriage:

We also compared the 2018 proportions of people who were divorced, separated, or married multiple times to those proportions from earlier decades. The 1960 and 1980 Census long-form survey, the predecessor of the American Community Survey, also included questions about marital status and number of marriages.

The results were interesting: In 1960 and 1980, a higher proportion of 20-somethings had a marriage end than in 2018. More people were divorced, separated, or in second or third marriages by their late 20s or early 30s in 1960 and 1980 than in 2018.

On the other hand, older Americans have been more likely to fall in this category in recent years: In 2018, respondents in their mid-40s and older were far more likely to be divorced, separated, or in a later marriage than people of an equivalent age in earlier decades:

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This chart shows the exact age when you're most likely to get married

Wed, 02/12/2020 - 5:13pm  |  Clusterstock

  • The average marriage age for Americans has increased over time, according to US Census Bureau data.
  • In 1962, 90% of 30-year-olds had been married at least once. By 2019, only 51% of 30-year-olds had been married.
  • Visit Business Insider's homepage for more stories.

Valentine's Day is coming up, and couples are celebrating their love for each other. Many of those couples, however, may not be overly eager to tie the knot: Americans aren't getting married at young ages as often as they used to.

We looked at data from the US Census Bureau's Current Population Survey, which investigates various economic and social aspects of people's lives. In particular, we used the individual-level Public Use Microdata Sample assembled by the Minnesota Population Center.

Using this data, we were able to estimate the number of people who identified as being married, separated, divorced, or widowed at each year of age. We estimated the percentage of people who had been married at least once in 1962, 1980, 2000, and 2019.

In 1962, half of 21-year-olds and 90% of 30-year-olds had been married at least once. In 2019, only 8.0% of 21-year-olds and 51.2% of 30-year-olds had been married.

Here's the likelihood that a person has been married at least once at some point in their life for every year of age over the past few decades:

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NOW WATCH: Taylor Swift is the world's highest-paid celebrity. Here's how she makes and spends her $360 million.

WeWork's new CEO Sandeep Mathrani has to pull off one of the most difficult turnarounds Silicon Valley has ever seen. Insiders explain what he's like, and why he's the guy to do it.

Wed, 02/12/2020 - 5:12pm  |  Clusterstock

  • Sandeep Mathrani, WeWork's incoming CEO, starts on February 18. To understand how he will likely lead the struggling coworking giant, we talked with six executives at his former company GGP.
  • Mathrani started at the mall company GGP after his predecessors laid the foundation for a major turnaround, and he continued the plan with his operating expertise.
  • WeWork wasn't his first stop after working at GGP's parent company — instead, he was set to be a consultant for the private-equity giant Starwood Capital Group's retail arm, a role sources told us was announced to investors in January.
  • Former GGP executives say Mathrani is nearly the opposite of WeWork founder Adam Neumann: He has a keen eye for detail and numbers and avoids drinking at work. 
  • Click here for more stories about WeWork.

WeWork's incoming chief executive may be the antithesis of Adam Neumann, the coworking giant's cofounder and former CEO whose swirling charisma was at the center of the implosion of its initial public offering. 

Sandeep Mathrani, who spent years at a publicly traded mall company, doesn't like to drink with his colleagues after work or play ping pong in the office in the afternoon, former coworkers said. The engineer turned real-estate executive is more likely to be found interrogating colleagues about their data in presentations and has a knack for cutting operational costs.  

"He's a charismatic leader who cares deeply for the people he works with and those that rely upon him," said Daniel Hurwitz, who was the lead director of GGP during Mathrani's tenure and has known him for 20 years. "While his creativity is clearly a core strength, he's a practical leader who understands how to direct a company appropriately given the situation that it faces."

The former CEO of the Chicago-based mall owner GGP has been credited with turning around the business, which emerged from bankruptcy the month before he started in 2010 and was sold to Brookfield in 2018 for $15 billion. Insiders said he was likely to take a hands-on approach to even the smallest details at WeWork — which has two open slots in the top executive ranks. 

A WeWork spokeswoman declined to comment on behalf of the company and Mathrani.

To better understand Mathrani, who joins WeWork officially on February 18, Business Insider spoke with a half dozen executives at GGP. They largely spoke on the condition of anonymity because of nondisclosure agreements they signed, but their identities were confirmed by Business Insider. All of them said Mathrani was a strong leader with a good track record of operational expertise. 

While the easy narrative casts Mathrani as the mall-turnaround expert brought in to apply similar magic to overhaul an ailing WeWork, most of the insiders we talked to also credited Mathrani's predecessors with the company's salvation, saying Mathrani continued to steer the ship on the path they set out and eked out gains along the way. 

"I've had plenty of opportunities and plenty of luck," Mathrani himself said last year during an acceptance speech for a real-estate-industry award.

Mathrani's time at GGP offers a window into how he may guide WeWork, which SoftBank leadership has already started restructuring.

SoftBank orchestrated an October bailout for WeWork that was followed by mass layoffs, firings of employees who abused vendor policies, new leadership, the selling off of noncore assets, a six-pillar plan, compensation changes, the nixing of free beer on tap, and, most recently, a board refresh.

"We hired a leader — a great leader who's done one of the most amazing turnarounds in the retail industry, which is GGP," WeWork Chairman Marcelo Claure said in a CNBC interview on Monday. "He took it from bankruptcy and sold it for tens of billions of dollars to Brookfield. That was a transformational leader, and the company has a great culture. They had to do a lot of innovation in order to transform that retail business. It is a very similar play here."  

Based on the most recent financials available to the public, WeWork has a long way to go to reach profitability. The company lost $1.3 billion in the third quarter alone, according to financials reviewed by Business Insider.

While there may be some safety net for WeWork in the form of a SoftBank bailout, the Japanese tech conglomerate has become the target of an activist investor who is agitating for changes in its corporate governance. 

Now Mathrani will need to convince WeWork's various stakeholders that the company is headed for stability and, eventually, profit. 

'His Rolodex is second to none'

Mathrani was born to a wealthy family in India and moved to the US to finish high school after a brief stint at the prestigious British school Eton. He started his career designing wastewater plants, but a profitable investment in a Washington, DC, apartment convinced him to switch career paths. He worked in retail real estate and eventually rose to an executive-vice-president position at Vornado Realty, the office and retail-real-estate company founded by industry giant Steve Roth. 

Mathrani joined General Growth Properties in December 2010 as the mall company's third-choice CEO, three sources with knowledge of the decision said. Real-estate veterans Adam Metz and Tom Nolan, with input from activist investor Bill Ackman, had just finished 2 1/2 years walking the company through bankruptcy and recapitalization. Before the duo came in, GGP had been the largest borrower of commercial-mortgage-backed securities in the US market, putting it in a precarious position when the global financial crisis dried up loan issuances.

Metz and Nolan's plan was to split up GGP, keeping the better malls and spinning out noncore assets, both before and after Mathrani joined. Those assets became companies like Howard Hughes, a publicly traded developer of master-planned communities. 

The investment giant Brookfield, which owned one-third of GGP's stock when it emerged from bankruptcy, planned to buy the full company in a few years if its stock was still trading below what it thought it was valued. In 2018, Brookfield took the company private, giving Mathrani a payday worth up to $189 million.

"In reality the car was built; he just drove it out of the factory," one former GGP executive who worked directly with Mathrani said. "He did a good job operating GGP with the security of knowing Brookfield was his safety net — he always had Brookfield behind him." 

At GGP, Mathrani focused on executing the plan set by his predecessors and streamlining the company's operations. Like WeWork's recent effort to outsource 1,000 janitors, Mathrani worked to cut head count significantly through externalizing roles, including mall maintenance. 

He brought a wide network to GGP and made even more contacts in all corners of real estate and investing during his nine-year tenure. On a GGP road show, he met the billionaire casino magnate Sheldon Adelson; one executive said Mathrani spoke with the billionaire mall owner David Simon on the phone "multiple times a week." 

"He has deep relationships at investment banks, at traditional life-insurance companies, pension funds, CMBS dealers," the source said. "His ability to source financing is amazing. His Rolodex is second to none."

After Brookfield took GGP private in 2018, Mathrani became the CEO of Brookfield's retail arm before officially announcing his departure last month. 

But WeWork wasn't Mathrani's planned first move post-Brookfield; instead, he had set up a consulting firm. One of his clients was Starwood Capital Group's retail arm, which owns class B malls, three sources said. The private-equity firm had emailed investors in the first week of January to announce the retail expert's appointment as a consultant.

A spokesman for Starwood declined to comment.  

A foil to WeWork's founder

Instead of Starwood, Mathrani is heading to an even bigger real-estate turnaround play: WeWork. Much like GGP, which needed an operational guru, the company has been looking for someone with an eye for operational details. 

All of the six executives with whom Business Insider spoke agreed that 57-year-old Mathrani was a study in contrast to Neumann. Mathrani makes data-driven decisions quickly and, as an engineer, will dig into every number presented to him. 

Unlike Neumann, who founded a company that tried to go public with an all-male board and largely male leadership team, Mathrani said in an April speech that half of his direct reports were women.    

Multiple sources characterized him as a frank charismatic executive who has a temper but doesn't hold grudges. For his future WeWork colleagues, the sources recommended thick skin. 

"I remember thinking two weeks in, 'I'm 50 years old and I'm still getting yelled at,'" one executive who worked with him for years at GGP said. "He's not personally mad at you; he's just emoting." 

Loyalty is one of Mathrani's top values, and like many new CEOs, he may look to replace top leadership at WeWork, perhaps with past lieutenants. The executive leadership team already has two open slots — chief financial officer and head of real estate — according to a slide from a November all-staff meeting leaked to Business Insider. At GGP, Mathrani largely cleaned house when he started, former executives said.

"When Sandeep came in, if you were there for a very long time, the assumption was you were overpaid and someone younger could do it faster and cheaper than you could," a former GGP executive who worked with him for years said. "He is going to conduct basically an 18-month interview of the entire organization." 

That source said he expected Mathrani to do well shoring up WeWork's revenues and negotiating liabilities with landlords. As of June 30, the company had $47 billion in long-term-lease obligations. And the source said Mathrani would not, like Neumann, order cases of Don Julio 1942 for company events. In fact, even on trips with executives, he preferred to retire to his hotel room for more work over having a nightcap with colleagues, two sources said. 

And more than many real-estate CEOs, he has an eye for detail, multiple sources said.

"He really got his hands dirty. He walked the malls all the time and would say to the operations guy, 'You need to change out these lightbulbs' or, 'Hey, why don't you try this kind of finish for the floor,'" one source said. 

Mathrani has no shortage of opportunities to improve operations at WeWork. One 2011 interview with his alma mater gave an indication of how he approaches the CEO role.

In the speech, he highlighted the importance of motivating teams rather than doing everything solo: "You're supposed to build. You're supposed to develop. You're supposed to lease. Really, you can't do it. It's too large. So you have to motivate; you have to lead."

Have a WeWork tip? Contact this reporter via encrypted messaging app Signal at +1 (646) 768-1627 using a nonwork phone, email at mmorris@businessinsider.com, or Twitter DM at @MeghanEMorris. (PR pitches by email only, please.) You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Inside WeWork's all-hands meeting, where the new chairman from SoftBank addressed employee concerns about worthless stock options and Kanye West's 'Flashing Lights' played

DON'T MISS: 'We fell short in Q4': WeWork only hit 73% of an internal enterprise growth target in 2019, leaked memo shows

Join the conversation about this story »

NOW WATCH: WeWork went from a $47 billion valuation to a failed IPO. Here's how the company makes money.

Farmcrowdy acquires Best Foods, plans to launch retail meat hubs across Lagos in the second quarter of 2020 - @Techpointdotng

Wed, 02/12/2020 - 4:32am  |  Timbuktu Chronicles
From Techpoint:Nigerian agritech startup, Farmcrowdy, has announced its acquisition of Best Foods L&P Limited, one of Nigeria’s largest meat processors.

For an undisclosed amount, the acquisition will see Farmcrowdy own majority stake in Best Foods including its assets, team and customer contracts to supply meat across the country...[more]

Meet 'Veggie victory' and others - Vegans see green shoots in meat-loving #Nigeria

Wed, 02/12/2020 - 2:30am  |  Timbuktu Chronicles
Reuters reports:When Nigerian chef Olasore Osidele became a vegan six years ago, people warned him that cutting out meat was questioning God’s plan...[more]

Fulaba | Exclusive Jewelry from African High Culture

Wed, 02/12/2020 - 2:22am  |  Timbuktu Chronicles
Fulaba provides handcrafted jewelry from African High Culture including authentic Fulani earrings and bracelets that are a fit for a queen. We offer free shipping to the United States and Canada!

Meet Roger Stone: One of Trump's most loyal supporters who was convicted of 7 felony counts of obstruction, witness tampering, and false statements

Tue, 02/11/2020 - 7:52pm  |  Clusterstock

Editors note: This article was first published in March 2017. It has been updated in light of Roger Stone being found guilty of obstructing the Russia investigation. 

  • Roger Stone, a longtime ally of President Donald Trump, was found guilty on November 15 of obstructing the congressional probe into Russia's interference in the 2016 US presidential election. 
  • Federal prosecutors said Stone attempted to undermine the investigation in order to protect Trump. Stone was found guilty of all seven charges brought against him. 
  • In January 2019, Special Counsel Robert Mueller indicted him with one count of obstruction, five counts of false statements, and one count of witness tampering. 
  • Visit Business Insider's homepage for more stories.

It took nearly 20 years for Roger Stone to realize his dream.

Since the 1980s, the self-described "dirty trickster" who's been in and around Republican politics for half a century, had made it something of a mission to make Donald Trump president.

Despite parting ways with the Trump campaign in August 2015 — Trump says he fired Stone for hogging the media spotlight; Stone says he quit because Trump attacked Megyn Kelly — Stone has remained one of Trump's most loyal true believers.

In January 2019, Special Counsel Robert Mueller indicted Stone with one count of obstruction, five counts of false statements, and one count of witness tampering. Stone has denied the charges, and plans to plead not guilty.

And on November 15, 2019, Stone was found guilty in federal court on all counts against him, including obstructing the congressional investigation into Russian interference in the 2016 presidential election. 

Initially, federal prosecutors recommended a seven to nine-year sentence for Stone in February 2020, which Trump immediately criticized on Twitter as "a horrible and very unfair situation," adding, "the real crimes were on the other side, as nothing happens to them. Cannot allow this miscarriage of justice!

Then in an unprecedented development, the Department of Justice leadership overruled their prosecutors' sentencing recommendation, releasing a separate memo saying it "could be considered excessive and unwarranted" and that the DOJ will "[defer] to the Court" about how long Stone should be sentenced.

The sudden reversal of the DOJ's recommendation shocked veteran prosecutors, and led to all four Assistant US Attorneys assigned to the prosecution withdrawing from the case en masse, casting serious doubt over the DOJ's independence. 

Stone was put in the crosshairs of the FBI over communications with a Russian hacker and his alleged communications with WikiLeaks founder Julian Assange as the FBI look for connections between Trump's campaign and Russian meddling in the 2016 election.

Mueller's January indictment of Stone repeatedly referred to Stone's contact with "Organization 1," which had "posted documents stolen by others" from the US government and citizens.

The filing said it "released tens of thousands of documents stolen from" people including the Democratic National Committee and the personal email account of Clinton campaign chairman, John Podesta.

"Organization 1" is widely believed to be WikiLeaks.

The filing also said Stone deliberately obstructed investigations by the FBI, House Intelligence Committee, and Senate Intelligence Committee into Russian interference in the election.

Stone has repeatedly said he has nothing to do with Russia, but messages he has sent to the hacker accused of a cyberattack on the DNC, as well as Stone's own provocative statements, continued to raise questions.

"It's rare that I'm accused of something that I'm not guilty of," Stone told the New Yorker in 2008.

Stone said in July it's "a possibility" that he could be indicted over his communications with Russian hacker Guccifer 2.0 and WikiLeaks, which experts had warned could implicate him in a conspiracy to defraud the United States by interfering in the 2016 election. 

Stone and the Russians

On August 12, nearly a year after he left Trump's campaign and a few weeks after WikiLeaks, a radical-transparency group, published the first set of stolen emails from the DNC, Stone reached out through a private message to a Twitter user named "Guccifer 2.0."

Earlier that August, Stone had written on the alt-right website Breitbart, then controlled by Steve Bannon, that it was "a hacker who goes by the name of Guccifer 2.0" — and not the Russians — who hacked the DNC and fed the documents to WikiLeaks.

But experts quickly linked Guccifer 2.0 back to Russia and concluded that the so-called hacker was the product of a Russian disinformation campaign. When the special counsel's office indicted 12 Russian security officers for hacking the DNC and the Clinton campaign in July, they said the hacker was a front for Russian military intelligence. 

In his messages with Guccifer 2.0, Stone asked if the hacker could retweet his Breitbart column about the 2016 presidential election possibly being "rigged."

Guccifer 2.0 responded: "i'm pleased to say that u r great man. please tell me if i can help u anyhow. it would be a great pleasure to me."

Stone later told Business Insider that the interaction he had with the hacker was so "brief and banal" that he "had forgotten it."

"Not exactly 007 stuff even if Gruccifer [sic] 2.0 was working for the Russkies," Stone said. "Meaningless."

Stone's tweets in the days after his communications with Guccifer 2.0 have raised questions about whether he knew in advance that Podesta's emails would be imminently published by WikiLeaks.

On August 21, Stone sent a series of famously prescient tweets. "Trust me, it will soon the Podesta's time in the barrel. #CrookedHillary." On October 1 Stone tweeted: "Wednesday @HillaryClinton is done."

On October 3 he tweeted: "I have total confidence that @wikileaks and my hero Julian Assange will educate the American people soon #LockHerUp."

Four days later, WikiLeaks published its first set of emails stolen from Hillary Clinton's campaign manager, John Podesta.

In October, Stone said he had "back-channel communication with Assange," but has denied having any direct contact with WikiLeaks, saying that he had been getting his information from a mutual friend he shares with Assange, later revealed to be radio host Randy Credico, who has since been subpoenaed to testify in the Mueller probe. 

But in February, The Atlantic reported that Stone was in direct communication with WikiLeaks via Twitter in the days leading up to the election. 

Mike Pompeo, then the director of the CIA, described WikiLeaks as a "hostile, non-state intelligence service" last year.

"Since I was all over national TV, cable and print defending wikileaks and Assange against the claim that you are Russian agents and debunking the false charges of sexual assault as trumped up bs you may want to reexamine the strategy of attacking me- cordially R," Stone wrote to Wikileaks on October 13, 2016, according to The Atlantic. 

Wikileaks responded the same day, "We appreciate that. However, the false claims of association are being used by the democrats to undermine the impact of our publications. Don't go there if you don't want us to correct you." 

"Ha!" Stone wrote back on October 15. "The more you 'correct' me the more people think you're lying. Your operation leaks like a sieve. You need to figure out who your friends are."

On November 9, the morning after Trump won the presidential election, Wikileaks wrote to Stone, "Happy? We are now more free to communicate." 

It is unclear whether Stone and Wikileaks had any other private communications either before October 13 or after November 9, 2016.

Stone told the House Intelligence Committee in a prepared statement last September that his communications with Wikileaks were always conducted through Credico, an associate of Assange who tweeted a selfie outside the Ecuadorian embassy in London, where Assange lives, two days before WikiLeaks released a trove of Clinton campaign manager John Podesta's emails. The email dump came the same day as a damning Access Hollywood tape surfaced in which Trump discussed groping women without their consent.

"I have never said or written that I had any direct communication with Julian Assange and have always clarified in numerous interviews and speeches that my communication with WikiLeaks was through the aforementioned journalist," Stone told the committee.

Meanwhile, NBC News reported in October 2018 that Jerome Corsi, a right-wing conspiracy theorist and close friend of Stone who was subpoenaed to appear before the grand jury, knew in advance that Clinton campaign emails had been stolen and given to WikiLeaks. 

Stone told Business Insider in March 2017 that he "had no contacts or communications with the Russian State, Russian Intelligence or anyone fronting for them or acting as intermediaries for them," he said. "None. Nada. Zilch. I am not in touch with any Russians. don't have a Russian girlfriend, don't like Russian dressing and have stopped drinking Russian Vodka." 

The New York Times reported in October 2018 that Stone discussed the WikiLeaks document dumps with both Steve Bannon, then the chairman of the Trump campaign, and Matthew Boyle, who at the time was the Washington editor of the far-right website Breitbart, which was previously spearheaded by Bannon.

In an exchange on Oct. 3, 2016, Boyle reportedly asked Stone, "Assange — what's he got? Hope it's good," to which Stone replied, "It is." 

Boyle then reportedly pressed Bannon to contact Stone about the impending WikiLeaks dump, telling Bannon, "clearly he knows what Assange has." Just 4 days after that exchange on Oct. 7, WikiLeaks released the trove of John Podesta's emails. 

"Mere knowledge alone might not be enough to establish criminal responsibility," Cornell Law School Professor Jens David Ohlin told Business Insider about Stone's potential liability with regard to his contacts with WikiLeaks and Guccifer. 

"However, if Stone was not just aware of what WikiLeaks was doing but actually intended for it to happen, then he could be considered a member of the criminal conspiracy and just as guilty as its other members," he added.

Also in October 2018, Mother Jones reported that Stone had pushed the Trump administration to issue a pre-emptive presidential pardon to Assange, who has not been charged with a crime in the United States. 

Ohlin told Business Insider at the time that "if someone offered Assange a pardon in exchange for Assange releasing hacked emails to influence the election, this would constitute a criminal conspiracy. If Trump or those close to him were part of these discussions, they would all be part of the same criminal conspiracy."

And then emailed leaked which shows top Trump campaign officials and right-wing media allies said they were convinced Stone was closer to Wikileaks than he let on, and Mueller was reported to have several emails from 2016 between the GOP strategist Roger Stone and Corsi that showed Stone anticipated a WikiLeaks document dump at the height of the 2016 election.

The White House, for its part, has worked to distance itself from Stone. During a press conference on March 20, 2017, then-White House press secretary Sean Spicer told reporters that Stone and Trump talk occasionally but that Stone's work for the campaign ended in August 2015.

"I don't know at all when the last time they even spoke was," Spicer said.

In December, Stone invoked his Fifth Amendment right and declined to provide documents requested of him by the Senate Judiciary Committee.

'Admit nothing, deny everything'

Stone was perhaps the first, and most influential, person to believe in Trump's political potential.

In 1988, Stone tried to persuade him to run for president. Trump decided against it, but 12 years later he launched a presidential exploratory committee, which Stone chaired.

Since the 1980s, Stone and Trump have fostered a close professional and political relationship. Stone has been characterized as Trump's longest-serving adviser.

Stone and Trump share remarkably similar worldviews and approaches to politics. Like Trump, Stone has a penchant for making bold, unsubstantiated claims, promoting conspiracy theories, and being unafraid of controversy. He told The New Yorker in 2008 that "The only thing worse in politics than being wrong is being boring."

Stone encouraged Trump's infamous "birther" conspiracy, which claimed that President Obama wasn't born in the US, and promoted unsubstantiated theories that Bill Clinton was a serial rapist and fathered a son.

Trump has apparently adopted many of Stone's ideas and methods. Stone told The New Yorker in 2008 that "Politics is not about uniting people. It's about dividing people. And getting your fifty-one per cent." One of his cardinal rules was "Attack, attack, attack—never defend" and "Admit nothing, deny everything, launch counterattack."

"It takes a certain kind of consultant who could work for a candidate like Donald Trump and it takes a certain kind of candidate to hire a consultant like Roger Stone," says Chris Barron, a Washington-based political consultant who has worked with Stone in the past, told the National Review in 2015.

In the 2017 Netflix documentary "Get Me Roger Stone," Trump says of Stone: "He loves the game, he has fun with it, and he's very good at it."

Both Stone and Trump are preoccupied with the news media, and they rail against it as being biased, but also court publicity. Stone is known for being easily accessible, and he seems to relish providing reporters with provocative sound bites. As Stone told The New York Times in 2015 of his life philosophy, "Never miss the opportunity to have sex or be on television, as Gore Vidal said."

The media has, in turn, portrayed Stone as everything from a "state-of-the-art sleazeball" to a dangerous conspirator. But Stone relishes these descriptions — the more unflattering the better.

"I revel in your hatred, because if I weren't effective you wouldn't hate me," Stone says in "Get Me Roger Stone."

Stone, who has been a Republican operative for almost 50 years, has long treated politics and campaigning as a battle to be won at any cost. As a junior in high school and vice president of the student government, he forced the president out and succeeded him.

''I built alliances and put all my serious challengers on my ticket," Stone told The New York Times in 1999. "Then I recruited the most unpopular guy in the school to run against me. You think that's mean? No, it's smart.''

Notably, Stone has remained an unapologetic Nixon supporter to this day. After working for Nixon's campaign in the 1970s, he maintained a close relationship with the president and regularly dined with him at his home in the years following the president's resignation. Stone has a tattoo of Nixon's face across his back and a large photograph of the former president over his bed.

Among many, Stone is better known for his eccentricities than his political work.

Throughout his career, Stone has cultivated what he calls his "extraordinary wardrobe," which includes a taste for seersucker suits and top hats, a style that The New Yorker has said makes Stone look "like a Prohibition-era mobster."

"If life is a stage, then you should always be in costume," Stone told The Times.

'He always tries taking credit for things he never did'

Stone and Trump have had a rocky relationship. In 2008, Trump called Stone a "stone-cold loser," telling The New Yorker that "he always tries taking credit for things he never did."

In August 2015, Stone parted ways with Trump's campaign. While Trump announced that he had fired Stone, accusing him of attempting "to use the campaign for his own personal publicity," Stone said that he resigned, making public a letter he said he had sent to Trump arguing that the campaign was being derailed by "controversies involving personalities and provocative media fights."

Stone's departure came as Trump faced scrutiny surrounding his controversial comments about Fox News anchor Megyn Kelly.

Some conservatives believed Trump's campaign would suffer without Stone to guide it.

"It's hard to overstate just how close Trump and Stone have been over the years," the National Review wrote after Stone had left the campaign. "Trump without Stone is akin to George W. Bush without Karl Rove or Barack Obama without David Axelrod."

But even after Stone left the campaign, he remained a strong supporter, calling himself "the ultimate Trump loyalist." In January, Stone published a book, "The Making of the President 2016: How Donald Trump Orchestrated a Revolution," in which he says Trump was "put on Earth" to be president.

From Nixon to Bush

Stone was raised in Lewisboro, New York, in a white working-class family. He told The New Yorker that while growing up adjacent to New Canaan, a wealthy Connecticut suburb, he saw himself as "living in kind of a bridge between two cultures, the white working class and the white upper class."

Stone remains convinced that both groups of white Americans should be politically united against what he sees as an overreaching government.

After high school Stone moved to DC to attend George Washington University. He never graduated.

Stone made his debut in national politics at 19, when he sent campaign contributions in the name of a socialist organization to Richard Nixon's rival in the 1972 Republican presidential primary. He then sent a letter to The New Hampshire Union-Leader with the donation receipt, in an attempt to undermine Nixon's competitor.

In a 2008 New Yorker article, Stone told reporter Jeffrey Toobin that Nixon started the "exodus of working-class people from the Democratic Party" and realigned the Republican Party's platform to one founded on antielitism.

"We were the party of the workingman! We wanted lower taxes for everyone, across the board," Stone said. "The point that the Democrats missed was that the people who weren't rich wanted to be rich."

As Toobin wrote, "Stone represents the less discussed but still vigorous legacy of Richard Nixon."

In 1976, Stone joined Ronald Reagan's first, unsuccessful run for the Republican presidential nomination as national youth director. Four years later, Stone took on the role of political director of New York, New Jersey, and Connecticut, helping pave Reagan's path to the White House.

But Stone, ever the campaigner, didn't take a position in the Reagan administration and instead started a political consulting and lobbying firm, Black, Manafort, Stone & Atwater, along with Paul Manafort, who, decades later, would become Trump's 2016 presidential campaign chairman.

Stone's corporate clients included Trump businesses and Rupert Murdoch's News Corp., on whose behalf Stone lobbied his former campaign colleagues in the administration, and more controversial characters, including dictators in Zaire and the Philippines, and rebels in Angola.

Stone and his firm were on the forefront of a new era of political operatives lobbying their former campaign colleagues, now in powerful positions in the administration, to serve their private-sector ends.

But Stone was drawn back into campaigning when George H.W. Bush ran for president in 1988, serving as a senior consultant to Bush. Stone continued jumping between the campaign trails — for Pennsylvania Republican Arlen Specter and Kansas Republican Bob Dole — until he was kicked off Dole's presidential campaign after Stone and his wife were caught soliciting "similar couples or exceptional muscular" men for group sex. (Stone denied the accusations at the time but later admitted they were accurate.)

After Stone left Black, Manafort, Stone & Atwater in the mid-1990s, he ran various campaigns, including a billionaire's bid for New York governor, and then moved down to Miami. In 2000, he was instrumental in orchestrating the so-called Brooks Brothers riot — a chaotic pro-Bush protest outside the Miami recount center — which helped shut down the Florida recount in the presidential election, securing George W. Bush's victory over Al Gore.

Natasha Bertrand contributed reporting.

SEE ALSO: The prosecutors on Roger Stone's case withdrew en masse after senior DOJ officials publicly overruled them

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NOW WATCH: Extremists turned a frog meme into a hate symbol, but Hong Kong protesters revived it as an emblem of hope

Trump made a special sign to show reporters that the initials of the 4 most valuable stocks spell MAGA

Tue, 02/11/2020 - 6:56pm  |  Clusterstock

  • President Trump highlighted the best-performing companies on the stock market so far this year, holding up a sign that said "the trillion $ club" in an Oval Office briefing held Tuesday. 
  • The sign alluded to a recent achievement made by Google's parent company Alphabet, which became the fourth American company to hit a market cap of $1 trillion last month. 
  • Visit Business Insider's homepage for more stories.

⁩Four tech companies have earned bragging rights to a unique milestone in recent months: a trillion dollar market valuation. 

On Tuesday, President Trump, highlighted the four companies — Amazon, Apple, Microsoft and Alphabet — during a press briefing in the White House's Oval Office. But Trump also took delight in pointing out something else about this rarefied group of companies. 

The first initial of each company's stock ticker creates the MAGA acronym, Trump's famous campaign slogan that stands for 'Make America Great Again.'

In this case, as Trump pointed out, MAGA stands for Microsoft, Apple, Google and Amazon. 

He even had prepared a special sign, titled "The trillion $ club," that displayed the properly arranged names of the four companies for the benefit of the assembled reporters and guests.

Microsoft, Amazon, Alphabet and Apple have performed extremely well on the stock market this year, generating about 67% of the S&P 500's year-to-date returns.

An astute reader might note that G in Trump's MAGA club should technically be an A, for Alphabet, the name of Google's parent company. But Alphabet's stock ticker is GOOGL, and Wall Street's custom is to use a G to refer to Alphabet/Google whenever a catchy stock grouping is coined, such as FAANG, or Facebook, Apple, Amazon, Netflix and Google. 

Facebook and Netflix didn't make the cut for Trump's trillion's club, and they have a long way to go. Facebook's market cap is only $591 billion while Netflix's is a relatively paltry $164 billion. 

Trump held out a sheet of "THE TRILLION $ CLUB"

Microsoft, Apple, Google, Amazon

Stylized to spell MAGA. pic.twitter.com/XHHw8ZWUld

— Josh Wingrove (@josh_wingrove) February 11, 2020

Trump touted the four tech companies even as his administration has publicly feuded with several of them. Amazon, whose CEO Jeff Bezos is also the owner of the Washington Post newspaper, has been a particular target of Trump's ire. 

And hours before Trump's MAGA moment on Tuesday, federal antitrust regulators announced plans to review past acquisitions by the largest tech companies, including all the members of Trump's trillion's club. 

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NOW WATCH: How autopilot on an airplane works

A new report slams the FAA for failing to properly supervise Southwest Airlines, leading to a range of safety risks (LUV)

Tue, 02/11/2020 - 6:50pm  |  Clusterstock

The Federal Aviation Administration (FAA) said it agrees with all 11 recommendations made by the US Transportation Department's Inspector General that faulted its oversight of Southwest Airlines, according to a final report released Tuesday afternoon.

"Given the significant unresolved safety concerns that FAA has identified at Southwest Airlines, it is clear that the agency is not yet effectively navigating the balance between industry collaboration and managing safety risks at the carrier," the report said.

The report said Southwest Airlines operated more than 150,000 flights carrying 17.2 million passengers on 88 used Boeing 737 jets without confirmation that required maintenance had been completed.

The report also said the FAA has not "effectively overseen Southwest Airlines' systems for managing risks."

"Our review identified a number of concerns regarding FAA's safety oversight of Southwest Airlines," the report said, including that Southwest is still flying planes without the proper maintenance documentation.

According to the report, "FAA inspectors do not evaluate air carrier risk assessments or safety culture as
part of their oversight of Southwest Airlines' safety management systems," because "FAA has not provided inspectors with guidance on how to review risk assessments or how to evaluate and oversee a carrier's safety culture."

"As a result, FAA cannot provide assurance that the carrier operates at the highest degree of safety in the public's interest, as required by law," the report added.

The FAA said in a response included with the report it concurred with all 11 recommendations by the inspector general and acknowledged that its office overseeing Southwest "did not perform in accordance with existing guidance."

The FAA has also come under scrutiny from lawmakers for its oversight of the newer Boeing 737 Max jet, which was grounded last March after two crashes that killed a total of 346 people.

Details from the report first emerged in late-January. The report was first seen by the Wall Street Journal. Southwest told Business Insider at the time that it was disappointed in and disagreed with the report.

"The success of our business depends on the Safety of our operation and any implication that we would tolerate a relaxing of standards is unfounded," the airline said.

Southwest told Reuters Tuesday that eight of the 88 used jets remain out of service "and are currently in heavy checks." Southwest added it adamantly disagrees "with unsubstantiated references to Southwest's safety culture."

On January 10, the FAA said it was seeking to impose a $3.92 million fine on Southwest for alleged weight infractions on 21,505 flights on 44 aircraft between May 1 and August 9, 2018.

SEE ALSO: Airline workers reveal how they're dealing with being on the front lines of the coronavirus outbreak as it spreads around the world

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Airbnb reportedly lost $322 million in the first 9 months of 2019, and it could mean a bumpier path to going public

Tue, 02/11/2020 - 5:50pm  |  Clusterstock

  • Airbnb was unprofitable during the first nine months of 2019, The Wall Street Journal reported on Tuesday.
  • The report said Airbnb lost $322 million, compared with a $200 million profit during the same period a year prior, and that costs climbed faster than revenue in its third quarter.
  • Sources also told The Journal that the coronavirus outbreak, which forced Airbnb to suspend bookings in China, could affect the timing of its expected initial public offering in 2020.
  • Visit Business Insider's homepage for more stories.

Airbnb may have additional challenges to navigate as it looks to go public in 2020.

The multibillion-dollar travel company lost money during the first nine months of last year, according to a report published by The Wall Street Journal on Tuesday.

The report said Airbnb posted a net loss of $322 million through September after making a profit of $200 million the previous year. It also said that while the company's revenue increased to $1.65 billion in the third quarter, up $400 million from the year prior, costs grew faster.

That could give pause to investors, many of whom have become wary of businesses without a clear path to profitability after a crop of money-losing companies went public last year with mixed results and WeWork canceled its initial public offering.

Airbnb appears to be facing rising costs as it continues to grow, including a $150 million investment in improving the safety of its platform, as well as increased overhead expenses and sales and marketing costs.

The company has about $3 billion in cash on hand, and some investors think it has a stronger business model than companies like Uber and WeWork, but Tuesday's report could mean the company will face increased pressure to prove that its financials add up.

Airbnb said last year that it expected to become a public company sometime in 2020, but sources told The Wall Street Journal that could likely mean the third quarter at the earliest and the timing could be affected by the Wuhan coronavirus outbreak.

Airbnb has worked hard to gain a foothold in China, but according to Tuesday's report, those numbers may have taken as much as an 80% hit this year. The company has suspended bookings within Beijing and allowed customers to cancel trips free of charge, but it's unclear how significantly the outbreak has affected its business.

Airbnb declined to comment on The Wall Street Journal's report.

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Fed's Kashkari tears into 'giant garbage dumpster' cryptocurrencies

Tue, 02/11/2020 - 5:43pm  |  Clusterstock

  • Cryptocurrencies are "like a giant garbage dumpster" and lack the basic characteristics of any stable currency, Minneapolis Federal Reserve President Neel Kashkari said at an event on Tuesday.
  • The Fed official praised the Securities and Exchange Commission for "cracking down on" the coin-offering frauds and said "people have been fleeced for tens of billions of dollars."
  • Kashkari acknowledged cryptocurrencies could prove useful in the future but quickly added that the sector's current status "is burning garbage."
  • Visit the Business Insider homepage for more stories.

Minneapolis Federal Reserve President Neel Kashkari didn't pull punches when giving his opinion on the cryptocurrency sector on Tuesday.

When asked at a Montana event whether he would want his 1-year-old daughter to be gifted a Treasury bond or a bitcoin for her next birthday, the Fed chief picked the former, saying cryptocurrencies are "like a giant garbage dumpster." Kashkari praised the dollar's stability compared with the relatively new crypto sector.

"The reason that the dollar has value is because the US government has a legal monopoly on producing the dollar," he said. "In the virtual-currency and cryptocurrency world, there are thousands of these garbage coins out there. Literally, people have been fleeced for tens of billions of dollars, and finally the SEC is getting involved in cracking down on this."

Cryptocurrencies are known for their heightened volatility, as their round-the-clock tradability and speculative nature keep prices from remaining stable for even a few minutes. Bitcoin's price swelled nearly tenfold in the second half of 2017 and just as quickly lost value as investors questioned the coin's true value.

The Fed official didn't completely turn his back to the technology, clarifying that cryptocurrencies could prove important in the coming decades but remain a highly volatile asset for the time being.

"Maybe five years from now or 10 years from now or 20 years from now something useful will emerge from this, but so far, all that's emerging is burning garbage," Kashkari said.

Tuesday wasn't the first time the Fed president spoke out against the burgeoning cryptocurrency industry. Kashkari deemed the assets a "farce" while speaking at Bay College in May 2018 and lambasted the lack of regulation around initial coin offerings.

"The barrier to entry to creating a new cryptocurrency is zero," he said. "I'm seeing more noise and more fraud than I'm seeing anything useful."

Bitcoin traded at $10,261.54 per coin at 4:30 p.m. ET on Tuesday, up 42% year-to-date.

Now read more markets coverage from Markets Insider and Business Insider:

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Merrill Lynch just created a new role to oversee its 100-plus markets for US financial advisers and address a 'substantial difference' in performance around the country (BAC)

Tue, 02/11/2020 - 5:31pm  |  Clusterstock

  • Merrill Lynch, Bank of America's wealth management arm, has created a new role, the national business development executive. It's appointed a former market executive, Craig Young, to the post.
  • Young will focus on leveling advisers' performance across the US, aiming to ensure that "there's not much distance between our best-performing and our worst-performing markets," said Andy Sieg, the president of Merrill Lynch Wealth Management, told Business Insider in an interview.
  • Visit BI Prime for more wealth management stories.

Bank of America's wealth management business has created a new leadership position to help its less successful wealth adviser markets catch up with its strongest performers.

Merrill Lynch Wealth Management on Tuesday named Craig Young, previously a market executive with the firm on the East Coast, as its first national business development executive. Young will be based in New York and report to Andy Sieg, the president of Merrill Lynch.

He'll focus on leveling advisers' performance across the US, aiming to ensure that "there's not much distance between our best-performing and our worst-performing markets," Sieg said in an interview with Business Insider on Tuesday. 

Merrill and its wirehouse rivals have dialed way back on recruiting experienced financial advisers, and have instead focused on boosting productivity from their existing headcount. Sieg said that the new position will be focused on staying on top of performance across the country's many markets and making sure that local leaders are being held accountable. 

"At the market level, there's substantial difference in terms of how strongly we're performing," he said. A spokesperson declined to provide examples of markets with disparate performance levels. More generally, market executives tend to track measures including market profit and loss, customer acquisition and growth revenue. 

Young will be responsible for bringing consistency across the 105 markets the wirehouse has across the US. Market executives will continue to drive their own markets, but Young's role will be to help them devise better execution plans and hold them accountable.

"We created a several-day program to help enhance the skills of market executives. We followed that up with the creation of market plans so that each of our 105 markets is operating against a written plan," Sieg said. "This is now kind of a next step, which is how do we actually build a function into our organization that's helping us create that level of consistency?"

Young, who was previously the market executive for the area that encompasses Westchester, New York and Greenwich, Connecticut, joined Merrill in 2015 as an associate market executive in Los Angeles. He later served as the market executive in Pasadena, California from 2016 to 2018 before moving to the New York area.

He'll now oversee internal organizations including Merrill Lynch's Advisor Growth Network and the Market Executive Strategy Council, which partly aim to forge communication between financial advisers and business leaders.

Merrill Lynch reported some $2.6 trillion in client assets and around 17,400 financial advisers and financial solutions advisers as of December 31.

Young will travel to different markets and spend time with local leaders "in their markets, and in their offices, so that he can keep a close pulse on how the strategy is being executed" on the ground, Sieg said. 

Before Young got into the wealth management business, he earned his bachelor's degree in business administration from California Polytechnic State University, where he played football as a running back.

"As a young kid, I wanted to do something in business," he told the Los Angeles Sentinel newspaper in 2015. "Football was my passion but as a college student, I was also interested in finance. I felt that business would allow me to bring who I am into what I do and to put my best skill sets to work."

Like its traditional wealth management competitors, Merrill Lynch has grappled with the industry's changing relationships and roles. The business isn't attracting newcomers like it used to, and firms are focusing heavily on recruitment and robust internal training efforts to draw top talent and show them the ropes.

Business Insider first reported last month that Merrill Lynch is expanding the scope of its training programs, opening up development resources to its 6,500 client associates.

More than 111,500 advisers will retire in the next decade, representing more than one-third of industry adviser headcount and assets, according to estimates from the industry research firm Cerulli Associates.

SEE ALSO: https://www.businessinsider.com/bank-of-america-merrill-lynch-wealth-management-changing-training-program-2020-1

SEE ALSO: The head of Merrill Lynch says the firm has zero interest in buying a robo-adviser — and that comes as wealth-tech startup launches are plummeting

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Lyft's fourth quarter topped Wall Street's expectations, but no update on its path to profitability left investors unenthused

Tue, 02/11/2020 - 5:23pm  |  Clusterstock

  • Lyft on Thursday reported fourth-quarter 2019 results that topped Wall Street's expectations.
  • Shares of the ride-hailing company fell 4% immediately following the announcement. 
  • While revenue is still growing, Lyft's losses ballooned by more than $100 million year-over-year. 
  • Visit Business Insider's homepage for more stories.

Lyft on Tuesday reported fourth-quarter financial results that largely topped Wall Street expectations but warned growth could slow in 2020, leaving investors largely unimpressed. 

Here are the important figures:

  • Revenue: $$1.02 billion million versus an expected $985.8 million
  • Adjusted EBITDA loss: $130.7 million versus an expected $163.2 million

Despite the beat, Lyft's numbers were hard pressed to top Uber's accelerated profitability timeline revealed the previous week, and shares fell as much as 4% in late trading. 

For the quarter, Lyft had 22.9 million active riders, a 23% jump from the same period the year prior. Revenue per active rider also grew in-step to $44.40, the company said. Total net losses, at $356 million for the quarter, fell compared to the prior three months but were a major increase from the same period of 2018 when the company's net loss was $249 million. 

"Despite shares down on the print before the conference call we view this as a continuation of Lyft delivering across the board strength every quarter since it's become a public company," Daniel Ives, an analyst at Wedbush, said in a note to clients." 

Lyft's results follow its larger competitor Uber which earlier in February reported results slightly ahead of expectations while accelerating its plan to reach a highly adjusted profitability metric. Its stock climbed on the news and likely left many Lyft investors if the company can do the same.

The path to profits for both companies has been pegged to a process called rationalization. In other words, its the willingness of consumers to pay higher fares for rides, as company's capitulate to pressure from investors to shrink losses and end the coupons that helped them grow market share over previous years as privately funded companies. 

"Fiscal 2019 was an exceptional year across the board," Logan Green, Lyft's chief executive, said in a press release. "We significantly improved our path to profitability while simultaneously reaching critical milestones toward our long-term strategy."

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