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Millennials might say they want to buy a house, but too many aren't doing anything about it

Sat, 04/13/2019 - 9:30am  |  Clusterstock

It's no secret millennials are eager to be homeowners.

Earlier this year, a report revealed millennials as a generation are now responsible for the largest share of new mortgage loans by dollar volume, narrowly surpassing Gen X for the first time. As millennials age and start families, they're buying more homes than ever, and they're making lower down payments despite rising home prices, which require larger mortgages.

Results from a recent INSIDER and Morning Consult survey may offer some insight as to why millennials are increasingly relying on mortgages: Many are just not saving enough cash.

Of the 4,400 Americans polled, 1,207 identified as millennials, defined as ages 22 to 37 (237 respondents did not select a generation). The margin of error was plus or minus 1 percentage point.

While 40% of surveyed millennials who expect to own a home in the future are saving for one — though we don't know how much — about 31% of millennials said they expect to own, but aren't currently saving at all.

How much would a home cost you? Find out with these offers from our partners:

According to a recent SmartAsset study, it would take the median earner in the 25 largest US cities between four and 10 years to save enough cash for a 20% down payment on a median-priced home. That's generously assuming they're saving 20% of their annual income for the down payment, but most probably aren't.

Read more: Millennials are delusional about the future, but they aren't the only ones

However, found millennials' down payments are typically lower than those of Gen Xers and baby boomers at an average of an 8.8% down payment on a mortgaged home, despite the fact that they're generally buying cheaper homes at a median price of $238,000.

On the whole, millennials' savings are abysmal, according to the INSIDER and Morning Consult survey. While 70% of millennial survey respondents have a savings account, 58% have a balance under $5,000. That's likely not enough to cover expenses in the event of an emergency, let alone a down payment and closing costs. 

Millennials' paltry savings are likely attributable to a heavy debt load. Despite mostly steering clear of credit-card debt — 32% have none at all and 36% have under $5,000 — nearly 45% of millennials have student-loan debt. When asked what they would do with an extra $1,000 cash, millennials were more likely to prioritize paying off debt over saving (a difference of five percentage points), the survey found.

Read more: Nearly half of indebted millennials say college wasn't worth it, and the reason why is obvious

Molly Stanifer, a financial advisor with Old Peak Finance, recommends aspiring homeowners make a "savings policy" once they decide when they want to buy a home, whether it's in two years or 10 years. 

"It includes a monthly automatic amount and then a percentage of any larger inflow, like a bonus," Stanifer previously told Business Insider. "That will give a pretty clear expectation of when and how to accomplish the goal. Then, the client could set their own goals of cutting back spending or saving additionally beyond the automatic amounts to reach their goal faster."

Stanifer recommends aiming for a 20% down payment and putting the cash in a savings account or non-retirement brokerage account. "They are both liquid — or could be withdrawn easily — and have a low chance of changing much in value from the time you put the money in to the time you need it," she said.

Stanifer said it's ultimately best to hold your down payment fund in one account and not over-complicate diversification. Keeping the money safe and accessible is key.

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Meet the most powerful Goldman Sachs banker you've never heard of; Silicon Valley has made top data-science talent too expensive for many hedge funds

Sat, 04/13/2019 - 9:29am  |  Clusterstock


Dear Readers,

It was "millennial money week" here at BI, where we got the results back from an INSIDER and Morning Consult survey that polled 4,400 young Americans on their spending habits. 

We published a number of stories based on the results. Here are some of the key findings. 

If you're new to the Wall Street Insider newsletter, you can sign up here.


1) Twenty-eight percent of millennials think they're worse off financially than they thought they'd be a decade ago.

2) A variety of economic factors have played a role in delaying some millennials' wealth-building process. The Great Recessionstudent-loan debt, and a higher cost of living have made it difficult for millennials to save.


1) Nearly half of millennials who have or have had student-loan debt think college wasn't worthwhile.

2) The divide between people who do think college was worth it and those who don't is clear: Millennials who are still paying off their student-loan debt feel worse about having gone to college than millennials who have already paid off their debt.


1) Many Americans expect to buy a house or retire one day but aren't saving for it.

2) One-quarter of millennials who expect to retire between ages 66 and 75 have no retirement savings account.

3) Nearly half of Gen Xers have no retirement account, despite most expecting to retire between 56 and 75.

But, despite all of these money worries, our survey shows that millennials aren't curbing their spending. In fact, if given an extra $1,000 in a month, millennials and baby boomers would spend similarly. And while millennials are delaying major life events such as buying a house and having kids (due in large part to massive student loan debt), they aren't abandoning these things entirely. 

Bottom line: millennials have been accused of killing razors, mayo, golf, weddings, beer, and cereal. The rationale for this (at least according to the Fed) has been that it's because younger Americans don't have as much money to spend than previous generations. But the truth is a lot more complicated. 

Thanks for reading and have a great weekend! 

'It's good to be Rich': Meet the Goldman Sachs banker who has built a private investing empire that goes head-to-head with Blackstone — and you've probably never heard of him

The Champagne was flowing in February 2018 when the Goldman Sachs executive Rich Friedman welcomed a couple hundred guests to the Rainbow Room. The Manhattan landmark, opened in 1934, offers a menu with beef Wellington and baked Alaska and serves a $162 brunch. Overlooking Manhattan from the 65th floor of Rockefeller Center, guests danced and chatted as Stevie Wonder played piano.

On the surface, the event was a celebration of Friedman's 60th birthday. But it could have easily been a celebration of a Goldman Sachs career entering its golden years. Therecent retirement of CEO Lloyd Blankfein made Friedman the longest-tenured partner at Goldman.

Since 1991, Friedman has built the bank's private-investing activities into a sprawling collection of funds that have invested more than $180 billion in real estate and infrastructure, private equity, and credit markets that often competes with flashier investment firms like Blackstone, Carlyle, and KKR.

Though advocates put him in the pantheon of buyout greats, Friedman hasn't enjoyed the same name recognition as men with names like Schwarzman, Kravis, and Rubenstein. That's by design, according to interviews with about a dozen current and former colleagues, clients, and competitors.


Tim Throsby sent an email to Barclays' CEO with the title 'irreconcilable.' He warned that a plan to gut compensation by 20% and boost profitability was unrealistic.

Tim Throsby, a former JPMorgan banker hired by Barclays to much fanfare to run its investment bank, drafted an email over the weekend of March 23 to 24. By the time he got around to sending it to CEO Jes Staley, he was already out.

The subject line of the email, according to someone who had seen it, was "irreconcilable."

The email was sent to Staley and a number of other senior leaders on March 28, a day after Throsby's shock departure from Barclays was announced, and rehashed the concerns he held over his boss' strategy. The email said Staley planned for cost reductions and job cuts — including a 20% cut to total compensation — for Barclays International, as well as a reduction in reserves held in case of credit losses, according to the person.


Silicon Valley has made top data-science talent too expensive for many hedge funds, so they're getting creative to compete

On one side, there are billions of dollars from the world's biggest investors ready to be run by your algorithm. On the other, there's a chance to work at the most talked-about companies on the planet —right as they promise to turn their employees into millionaires overnight.

The battle for top tech talent between Wall Street and Silicon Valley is nothing new, but it's reaching a fever pitch in the hedge fund industry, industry participants and consultants said, as both sides eye billions of dollars up for grabs thanks to a host of buzzy tech unicorns expected to go public, like Uber, Slack, and Pinterest.

This Silicon Valley gold rush has forced hedge funds to grapple with a problem they hardly ever run into: The industry is being outbid for the top talent.


YieldStreet, a fintech company offering exotic investments in things like art, but experts are warning about the risk

Wealthy individuals who want to reap the financial benefits of investing in a Monet without actually owning an $80 million painting will soon have a new option.

YieldStreet, a financial platform that offers exotic investment products like marine finance and loans to law firms to the mass affluent, is buying an company called Athena Art Finance from private equity firm Carlyle in a deal valued at $170 million. YieldStreet's 100,000 investors will be able to invest in art financing as a result of the deal.

The deal comes as more financial technology players are trying to open up access to investments previously reserved for institutional or ultra-wealthy investors, such as private equity. Earlier this week, Nasdaq and iCapital, a BlackRock-backed alternative investment company, said they're working to create a platform that will launch later this year to allow private fund investors to sell their stakes before the end of a fund's life.


BlackRock-backed iCapital is teaming up with Nasdaq to create a private equity fund selling platform for wealthy investors

As wealthy individuals get into private equity and other illiquid investments in greater numbers than ever, they're increasingly looking for ways to get out, too.

Institutional investors, who long dominated strategies like venture capital, private equity real estate, and private credit, have worked with advisers to sell their fund stakes on the secondaries market. That option hasn't been available to individual investors, who may not be able to keep their capital locked up for the decade or longer that a private fund requires.

Nasdaq and iCapital, a BlackRock-backed alternative investment company, are now seeking to give investors that option by creating a platform that will launch later this year, executives told Business Insider.


An inside look at Digital Asset, the blockchain company that's shifting strategies as Wall Street loses interest in the technology

A blockchain company that no longer deals solely with blockchains.

Digital Asset made a name for itself as a leader in how distributed-ledger technology would be implemented on Wall Street when it burst onto the scene in 2014. Big-name backers, large funding rounds, and a former high-profile bank executive caused it to turn heads.

Five years later the industry is still considering how best to implement distributed-ledger technology. While nearly every Wall Street firm has invested resources into investigating blockchains, real-world applications of the technology beyond pilot programs have been largely nonexistent.


Wall Street move of the week:

Barclays just lost two more executives as Ravi Singh departs after only four months

In markets:

In tech news:

Other good stories from around the newsroom:

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I rode the East River ferry to get a view of the infamous 58-story NYC skyscraper that's leaning 3 inches to one side — here's what it looks like

Sat, 04/13/2019 - 9:26am  |  Clusterstock

  • An unfinished 58-story skyscraper in New York City is tilting 3 inches to the north.
  • The tower's contractor is suing the developer, saying it allowed for the tower to be built on a shoddy foundation.
  • The developer says there's no safety issue and that the "misalignment" can actually be fixed.
  • I went to see the leaning tower for myself, and I couldn't tell that it was tilted.
  • Visit for more stories.

A New York City skyscraper that's leaning to one side has sparked a legal dispute between the building's contractor and the developer.

The 58-story tower, known as One Seaport or 161 Maiden Lane, is tilting three inches to the north, Business Insider's Aria Bendix previously reported.

Read more: Hudson Yards, NYC's $25 billion neighborhood, was financed with more than $1 billion that was meant for 'distressed' urban areas. Here's a look inside the glitzy development

The contractor of the building, Pizzarotti, sued the tower's developer on March 22 after a subcontractor discovered the building was askew. Pizzarotti alleges that the developer allowed for the tower to be built on a shoddy foundation. The developer, Fortis Property Group, says Pizzarotti filed the suit to distract from its inability to complete the project.

Fortis also says there's no safety issue and that the "misalignment" can actually be fixed.

I went to go look at the 670-foot tower — here's what it looked like. 

SEE ALSO: I visited a $22 million, 3-floor 'sky mansion' steps from NYC's Hudson Yards, and found it had a selling point that set it apart from luxury penthouses nearly 4 times the price

DON'T MISS: I climbed Vessel, the $200 million, 2,500-step sculpture in Hudson Yards — and the view from the inside blew me away

A 58-story skyscraper in Manhattan is reportedly leaning three inches to the north. The tower, which sits in lower Manhattan along the East River, is known as One Seaport or 161 Maiden Lane.

Source: Business Insider

The contractor is suing the developer, saying the developer allowed the tower to be built on a shoddy foundation. But the developer, Fortis Property Group, says Pizzarotti filed the lawsuit to draw attention away from its inability to finish the project.

Source: Business Insider

I went to go get a look at the 670-foot tower, which reached its full height in September 2018, to see if the tilt was visible to the naked eye.

Source: Bisnow

See the rest of the story at Business Insider

Ousted exec Tim Throsby sent an email to Barclays' CEO calling his plans 'irreconcilable' and destructive

Sat, 04/13/2019 - 9:26am  |  Clusterstock

  • After his ouster from Barclays, the exec Tim Throsby sent an email to CEO Jes Staley and other senior leaders criticizing what he considered unrealistic and destructive profitability demands and targets set by Staley, according to sources familiar with the email.
  • In the email, which had the subject line "irreconcilable," he pushed back on what he said were plans for a 20% cut in compensation at Barclays International, as well as a pullback in risk.
  • He also questioned plans to reduce capital reserves that buffer against potential losses. 
  • Throsby thought such measures were not only unrealistic but also destructive to morale and loyalty at the bank, which has been on a hiring spree over the past year. 
  • Visit for more stories.

Tim Throsby, a former JPMorgan banker hired by Barclays to much fanfare to run its investment bank, drafted an email over the weekend of March 23 to 24. By the time he got around to sending it to CEO Jes Staley, he was already out.

The subject line of the email, according to someone who had seen it, was "irreconcilable."

The email was sent to Staley and a number of other senior leaders on March 28, a day after Throsby's shock departure from Barclays was announced, and rehashed the concerns he held over his boss' strategy. The email said Staley planned for cost reductions and job cuts — including a 20% cut to total compensation — for Barclays International, as well as a reduction in reserves held in case of credit losses, according to the person. 

Throsby said in his message that he had planned on discussing the points in the email with Staley before he was shown the door, according to the person.

The former CEO of Barclays International and head of the investment bank was blanching at what he considered unrealistic and destructive demands and targets set by Staley, according to people familiar with the email. Throsby, known for his brazen, headstrong style, thought Staley’s goals to boost profitability, dividends, and buybacks weren’t possible — that the demands were “irreconcilable,” the people said. 

It was this difference in vision about the future of Barclays that may have led to Throsby's downfall. 

The episode, and the contents of the email, holds implications for whether Barclays can meet the activist-investor group Sherborne Investors' demands without gutting the investment bank and, ultimately, for how long Staley will be able to keep his job.

Throsby did not respond to multiple requests for comment. Barclays declined to comment. 


In the email, Throsby criticized parts of Staley's strategy to boost firmwide return on tangible equity to more than 9% — a figure he felt no investor realistically expected the firm to reach this year. The strategy to get there involved boosting revenues for Barclays International by 5% while reducing compensation costs by 20%, which included cutting jobs, according to the email. Throsby also detailed what he said was a plan to scale back the firm's risk and impairment reserves held to buffer against potential credit losses, according to a source who read the email. 

It isn't clear whether specific plans outlined in the email remain in effect, including the extent of the compensation reduction. People familiar with the matter said the firm's executive committee agreed to a plan to reach the more than 9% target since Throsby's departure, and that there is no prospect of a 20% cut to total compensation. 

But Throsby seemingly considered the plans serious enough to draft the email and to send it after he left. And the concerns appear to be at the crux of his disagreement with Staley. 

The firm's investment-banking division had a strong year in 2018 and recaptured market share, especially in sales and trading, which increased 13% to $6.5 billion in revenues. Barclays was home to the fastest-growing equities shop in the industry, growing that business by 30%. The return on tangible equity in the investment bank more than doubled over the past two years to 7.1%, but it still lagged behind the rest of the bank.

Nonetheless, Staley — who is trying to quell investor discontent and fight off Sherborne CEO Edward Bramson's campaign for a board seat and deep cuts to the investment bankhas pledged firmwide return on tangible equity target to more than 9% for 2019 and 10% in 2020. Barclays International, the division Throsby ran that holds the corporate and investment bank, as well as its US payments and cards division, accounts for about two-thirds of the bank's revenues.

Not only that, in February, Staley promised to return more capital to investors in the form of buybacks and dividends. Barclays has cut dividends in recent years to deploy more capital to clean up its balance sheet and turn around its investment bank, and it hasn't done a buyback since 2015.

These ambitious goals came amid a brutal first-quarter trading environment, with most banks expected to announce double-digit declines in markets revenues, according to analyst estimates. Trading fell 17% at JPMorgan Chase, which reported earnings on Friday

"The board recognises that Barclays does not yet perform at the level at which it should," Barclays said in a statement on Thursday that outlined its defense against Sherborne. "We are highly focused on business execution to deliver returns above our cost of equity. Another strategic overhaul is not what Barclays needs right now." 

To reach Staley's return targets, the bank must slash costs by 7%, Bank of America estimated in a note earlier this month, saying that "looks hard to do even if investment spend is delayed."

But Throsby thought cost cuts and a pullback in risk would be destructive to morale and culture, especially after the firm went on a hiring spree over the past year to help jump-start the investment bank, according to a person familiar with the email. He also questioned the wisdom of the more aggressive approach to their impairment reserves. 

Throsby wrote that the interplay between Staley's demands were what some might call an "impossibility," according to a source that read the email. 

Bracing for the fallout

The ouster of Throsby, followed shortly by the departure of his deputy, Art Mbanefo, shocked many both inside and outside the bank, and has left employees anxious about a future without the top two leaders that had led the investment bank's turnaround. 

While Throsby was the external face of Barclay's investment bank, Mbanefo, a 10-year veteran of the bank who previously ran markets in Europe and Asia, was more of the internal face and enforcer of his boss' strategy. As the chief information officer of Barclays International, he ran day-to-day operations for Barclays International and straddled many roles, including overseeing business managers and the office of the CEO, as well as supervising markets.

He followed his boss out, resigning days later. Two more senior execs are following them out the door, Business Insider reported on Friday. 

On Mbanefo's last day at the office on April 3, scores of Barclays employees gathered to line the hallways in the New York headquarters and gave him a long standing ovation, according to people present that day. Mbanefo, who was known to be brusque and kept a "bulls---" button on his desk, according to those who'd seen it, walked out giving hugs and shaking hands as he left the building for the last time as a Barclays employee.

Amid the loss of the senior leaders, insiders worry about the strategy for the investment bank going forward and whether job cuts are looming.

Protecting against such cuts appears to be, in part, what Throsby clashed with Staley over. 

The firm has also lost leaders who were critical in crafting the original activist defense against Bramson at a time when Bramson is only cranking up the pressure further. Mbanefo and his Financial Resource Management unit was charged with optimizing the firm's balance sheet and squeezing out capital to deploy toward revenue-generating operations.

"Most people don’t understand what’s next," a Barclays insider said. "People had bought lock, stock, and barrel into what Tim was building."

This post has been updated from its original version. The article initially said Staley raised ROTE targets. The targets had already been in place and were reaffirmed.  

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Check out the hottest cars and concepts coming to the 2019 Shanghai motor show

Sat, 04/13/2019 - 9:17am  |  Clusterstock

  • The 2019 Shanghai motor show opens on April 18.
  • Western, Japanese, and Chinese automakers are showcasing a range of concepts, electric cars, and luxury vehicles.
  • China is the world's largest auto market, with more than 20 million in annual sales.

The 2019 Shanghai motor show — officially called Auto Shanghai 2019 — opens to the public on April 18 and runs through April 25.

We typically expect to see some buzz around a few new luxury vehicles from western carmakers, plus an effort by Chinese brands to showcase their wares. In recent years, electric vehicles have also been a feature of the motor show, which alternates between Shanghai and Beijing and is a showcase for the world's biggest car market.

For 2019, California's Karma Automotive is planning a splashy rollout of three vehicles and concepts, while Audi is bringing two electrified concepts. Lexus and China's Geely, meanwhile, are thinking ... minivans. Don't scoff! These vehicles are popular in the Middle Kingdom

Take a closer look at some of the vehicles we've got our eyes on for next week. 

FOLLOW US: On Facebook for more car and transportation content!

Karma Automotive plans to pull the cover off a collaboration with Pininfarina, the legendary Italian design shop that was acquired by India's Mahindra in 2015.

Karma has two other reveals in store for Shanghai: the BMW-powered Revero and ...

... Its Vision concept car.

See the rest of the story at Business Insider

Boeing's problems are mounting and things are going to get worse before they get better (BA)

Sat, 04/13/2019 - 9:07am  |  Clusterstock

  • Boeing has been through a tough month as it faces a bevy of lawsuits and investigations.
  • However, it may have even more serious and fundamental issues to confront such as fixing the design flaw in 737 Max, regaining the trust of passengers and crew, and maybe even coming up with a replacement for the 737 Max.
  • The global fleet of 371 Boeing 737 Max airliners have been grounded since the crash of Ethiopian Airlines Flight ET302. 
  • Visit Business Insider's homepage for more stories.

It's been a tough 30 days for Boeing. In the month since the tragic crash of Ethiopian Airlines Flight ET302, the American aviation giant has seen its hot-selling 737 Max airliner grounded, its stock plunged 10%, and its reputation tarnished by the scandal.

Boeing admitted last week that a faulty sensor triggered the 737 Max's Maneuvering Characteristics Augmentation System or MCAS on both the Lion Air Flight JT610 and the Ethiopian Airlines plane. The system's activation precipitated nose dives that likely led to both crashes. 

"The 737 Max grounding and what we are learning from it shows that this is not the typical airplane accident we've seen in the past and this is not the typical airplane grounding we've seen recently," Henry Harteveldt, travel industry analyst and founder of Atmosphere Research Group, told Business Insider. "This is a very serious problem for Boeing and a big problem for the airline operators and a problem I don't think will be easy to fix."

Read more: Boeing's reputation has been stained by the 737 Max, and it's going to have to fight to convince people the plane is safe.

This week, Boeing investors filed a proposed class-action lawsuit in Chicago alleging the company defrauded its shareholders by failing to reveal potential safety shortcomings of the 737 Max airliner after two fatal crashes in five months. 

Lawyers representing the 346 victims of Lion Air Flight JT610 and the Ethiopian crash have filed multiple suits against Boeing. 

At the same time, the airlines whose 371 grounded 737 Max are sitting in storage collecting dust have initiated compensation proceedings to collect damages from Boeing. 

Boeing's troubles are mounting and things are going to get worse before it gets better. 

Design trouble

The US Department of Transportation has commenced an audit on how the Federal Aviation Administration managed to certify the 737 Max to fly with substantial control issues. 

Boeing and the FAA's cozy relationship has come under scrutiny from members of Congress. 

Certification issues aside, Boeing will have to answer for the design flaw that is at the heart of the controversy surrounding the 737 Max in the coming weeks and months.

To fit the Max's larger, more fuel-efficient engines, Boeing had to position the engine farther forward and up. This change disrupted the plane's center of gravity and caused the Max to have a tendency to tip its nose upward during flight, increasing the likelihood of a stall. In response, Boeing created MCAS as a software fix to automatically counteract that tendency and point the nose of the plane down when the plane's angle-of-attack (AOA) sensor triggers a warning.

"MCAS was a band-aid that infected the wound instead of healing it," Ross Aimer, an aviation consultant and former Boeing 787 training captain, said in an interview with Business Insider. 

One of the most confounding issues with MCAS is that it can be triggered by a single AOA sensor even though there are two on the plane. This is a departure from Boeing standard operating procedure which normally calls for a dual point of failure. 

"Since you have two (AOA sensors) in order to get certified, why not use them, I just don't understand it," aviation consultant and former aeronautical engineer Robert Mann told Business Insider in an interview. 

"From a design perspective, it doesn't make any sense."

Pilots and passengers don't trust the 737 Max

One of the 737 Max's greatest selling points was the idea that it could be easily integrated into existing 737 fleets with minimal additional training. Since the 737 has long been one of the most dependable airplanes in the world, this congruency helped make the 737 Max a hot seller.

However, the 737 Max is a very different plane from the 737NG it replaced. It has new engines mounted in a different location, redesigned wings, and new avionics. These are all things the pilots knew about. 

What they didn't know was that MCAS had been installed on the 737 Max. Pilots found out about MCAS being on the plane after the Lion Air 737 Max crash into the Java Sea on October 28. 

"Boeing in the past always told the pilots and airlines exactly what was on those airplanes," Aimer said. "I have been a Boeing pilot for over 50 years and have loved their products, but they have lost my trust."

Aimer, who is the CEO of Aviation Consulting Experts and a retired United Airlines Captain, feels like Boeing put money ahead of the well-being of passengers and crew.

"Boeing kept that from us purely because they didn't want to bother the airlines with some extra training," he told us. "This was purely a monetary decision on behalf of Boeing and the airlines themselves to keep this away from the pilots and the result was disastrous." 

And then there's the traveling public.

poll conducted by Business Insider a week after the Ethiopian crash showed that 53% of American adults would not want to fly on a Boeing 737 Max even after the FAA clears the aircraft for service.

"The 737 Max has stained Boeing's brand reputation," Harteveldt said. "This can't be denied."

Business Insider reached out to Boeing for comment on the matter. A Boeing spokesperson noted that company CEO Dennis Muilenberg made a speech on Thursday touting the need to regain public trust.

"We know every person who steps aboard one of our airplanes places their trust in us," Muilenburg said in the speech. "We’ll do everything possible to earn and re-earn that trust and confidence from our airline customers and the flying public in the weeks and months ahead."

"We take the responsibility to build and deliver airplanes that are safe to fly and can be safely flown by every single one of the professional and dedicated pilots all around the world," the Boeing CEO added.

Boeing might need a replacement for the 737 Max

The Boeing 737 Max is the fastest-selling plane in Boeing history. It's the latest generation of Boeing's money-making 737 family of airliners.

The various versions of the Boeing 737 currently account for 80% of Boeing's 5,800-plane order backlog.

It's going to be an uphill battle for Boeing to restore confidence in the grounded jet. 

"You can't hide the 737, you've got thousands of them of all types flying worldwide today for airlines," Harteveldt said.

As a result, you can't simply rebrand the plane. 

"People are going to see right through that," he added.

Therefore, Boeing is going to either have to convince people to fly the 737 Max or come up with a replacement.

"Yes, (737 Max) is the last iteration," Teal Group aviation analyst Richard Aboulafia told Business Insider in March. "They ran out of steam in terms of range and capacity."

That means whichever aircraft Boeing chooses to replace the 737 will be a clean sheet design. 

It's not all gloom and doom for Boeing

The situation Boeing finds itself in is not insurmountable.

Aimer said Boeing's engineering team should be able to come up with an effective fix for the 737 Max. 

"They can fix this issue, right now they need to be honest and forthright and try to fix this issue to the best of their ability," Aimer said. 

Harteveldt said Boeing can convince passengers to feel safe in the 737 Max.

"Boeing has to become a bit more of a consumer-facing organization to reinstill confidence in its brand so that the saying 'if it's not Boeing I'm not going' can be said again with pride by travelers," the analyst said. 

On the other hand, Mann believes Boeing won't have to do much to get people to return to the 737 Max. 

"Once the airplane routinely does what it's designed to do and safely, all of this goes away. And it's crass to say it, but the fact is the traveling public has a very short memory," Mann said.

SEE ALSO: JetBlue is going to London in 2021

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Here are the officials who vote on the Federal Reserve committee that sets interest rates

Sat, 04/13/2019 - 9:04am  |  Clusterstock

  • Interest rates are set through a voting system on the Federal Open Market Committee. 
  • That group consists of Fed governors and leaders of central bank branches across the country. 
  • Officials tend to be labeled as dovish or hawkish, depending on how much they focus on inflation or employment. 

President Donald Trump often blames his monetary policy frustrations on Federal Reserve Chairman Jerome Powell. But interest rates are determined by a group of central bankers, not by Powell alone.

Members of the Federal Open Market Committee typically meet eight times a year to vote on the federal funds rate. Seven individuals on the Board of Governors always vote — there are currently two of these seats open that Trump is planning nominations for.

Fed presidents from across the country take turns on the FOMC each year, though the New York bank’s leader always votes.

Here's who will be on the committee through 2021 and how they tend to view monetary policy, according to analysis by Bank of America Merrill Lynch. Inflation doves are seen as more concerned about employment than rising prices, while hawkish officials tend to favor higher interest rates.



SEE ALSO: Trump has been turning up the heat on the Fed and now the IMF is warning political pressure on central banks is 'dangerous'

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Tesla isn't the next Theranos — here are 10 reasons why (TSLA)

Sat, 04/13/2019 - 8:57am  |  Clusterstock

  • Tesla and Theranos are sometimes discussed in the same terms, as Tesla CEO Elon Musk has jousted with the SEC and former Theranos CEO Elizabeth Holmes faces criminal charges for accusations of fraud.
  • The Tesla-Theranos comparison, like the Tesla-Enron comparison, makes for fiery debates, but the comparison falls apart on closer scrutiny.
  • At base, Tesla has a product that's relatively easy to understand — cars — while Theranos product was shrouded in secrecy.
  • Visit Business Insider's homepage for more stories.

If you have the misfortune to follow or even periodically stumble across the discussion of Tesla impending bankruptcy on Twitter (#TSLAQ) or elsewhere on the internet, you're aware that the company is now often being compared to Theranos, the onetime $9-billion blood-testing startup that's now worth nothing and whose former CEO, Elizabeth Holmes, is currently facing criminal charges.

Tesla CEO Elon Musk has poured fuel on the #TSLAQ fire by running afoul of the Securities and Exchange Commission, just as Holmes did (she settled and was barred from serving as an officer of a public company for a decade). Tesla also added Oracle's Larry Ellison to its board — and Ellison was a Theranos investor.

As l'affaire Theranos has broken out of the business press. John Carreyou's Bad Blood, his account of Holmes' and Theranos' rise and fall, is a bestseller, with a film starring Jennifer Lawrence as Holmes in development. An HBO documentary premiered last month. A general climate of skepticism about Silicon Valley's "save the world" ambitions has also emerged in the aftermath of Facebook's scandals. 

Read more: The biggest question for Tesla is whether the company can make steady profits on its cars

This has all undermined the reality of Tesla and replaced it with a sort of wildly speculative canvas onto which assorted conspiracies and malfeasances can be painted. At base, Tesla is a relatively small auto company that, remarkably, has come to dominate the mostly abandoned electric-car business (there are more than a billion cars on the road worldwide, and almost none of them run on electricity).

Outlandish enthusiasm on Wall Street for the future of electric cars — coupled with too much money sloshing around in the economy thanks to post-financial crisis government action — has minted a stupid-high stock price for Tesla and intensified the focus on the company. Tesla itself has struggled mightily with its manufacturing fundamentals, becoming an outlier in an industry that easily built over 17 million cars and light trucks in the US alone last year, while Tesla managed 250,000.

Looks bad, right? But is it Theranos bad? Hardly. Here's why:

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1. Nobody understood Theranos' product.

Theranos' small-sample blood tests were supposed to be executed using a device named "Edison" that accelerated diagnostics, lowered costs, and democratized lab work. But the device never worked, something that the company concealed. Holmes' claims about the technology evidently confused experts for years.

Superficially, Tesla's and Musk's commitment to automated manufacturing could be construed as sort of "Edisonian" — except that everybody in the auto industry understands automation and its limits. They also understand the end product, which is an automobile. It's pretty easy to tell if either the production system is flawed or the product is bad: the cars don't roll off the assembly lines; or the cars don't work.

2. Theranos never went public.

Tesla staged an IPO in 2010 and for nine of its 15 years in business has been compelled by law to expose its financials four times a year.

Theranos was founded in 2003 and had no legal obligation to report its financials until it collapsed in 2018.

An IPO isn't a perfect mechanism to open up a company to scrutiny. But investors have been able to analyze Tesla's balance sheet and financials for almost a decade.

3. Theranos was the only thing Holmes had ever done.

Holmes dropped out of Stanford to start Theranos when she was 19. She had no background in business nor startups.

Musk sold his first company in 1999 and parlayed that success into another company that would eventually become PayPal. He then sank all his money into Tesla and SpaceX. 

Consequently, Musk knew that a real product was going to be critical to Tesla's survival.

See the rest of the story at Business Insider

2 of America's most acclaimed wealth managers for the ultrarich explain why a famous approach to retirement investing is dead wrong — and reveal what people should do instead

Sat, 04/13/2019 - 8:05am  |  Clusterstock

  • Two of the most successful wealth managers in the US say the most basic approach to retirement investing — that younger people need stocks and older people should own bonds — is wrong.
  • Jeff Erdmann of Merrill Lynch and Peter Mallouk of Creative Planning have different criticisms of the philosophy, but both say investors need a different approach.
  • Forbes has ranked Erdmann as the best wealth manager in the US for three years in a row, while Barron's named Mallouk the no. 1 independent wealth manager four times in the last six years.
  • Visit for more stories.

It's one of those things everyone who has thought about retirement knows: Younger people are supposed invest in stocks, and older people should mostly own bonds.

But two of the most respected wealth managers in the country say that's a bad approach.

The objections come from Jeff Erdmann, who has topped Forbes' list of the best wealth managers in America for the last three years, and Peter Mallouk, who Barron's named the no. 1 independent wealth advisor four times since 2013.

Both are very positive on stocks as long-term investments. That partially reflects their focus on wealthy families and maintaining wealth that can last for generations. But their concerns about the traditional strategy also have major implications for everyday investors and anyone with a 401(k).

The standard thinking about retirement investing is that younger people should own on high-growth assets like stocks, and as the years pass they should gradually get more conservative to get a steady stream of income and protect against big losses. The non-traditional response?

"You should throw that philosophy out the window," Erdmann said in a phone interview with Business Insider.

Erdmann, who works in Merrill Lynch's private banking and investment group, says that investors get such weak returns from bond, CDs and similar assets that they can't rely on them the way they did when that conventional wisdom was established.

Read more: America's No. 1-ranked wealth manager for the ultrarich breaks down the 3 mistakes every millennial investor should avoid — and what they should do instead

For example, the yield on the 10-year Treasury note was more than 10% in 1985, but hasn't touched 5% since early 2001. Last year markets were startled when the 10-year yield briefly "spiked" above 3%. Other conservative investments also don't provide the kind of returns they did in decades past.

"Whether you’re 88 or 18, (with) where we are in the interest rate cycle, your asset allocation is going to not necessarily be tremendously different," Erdmann said.

That's been a big contributor to the 10-year bull market in stocks: More conservative options just haven't appealed to a lot of people for many years. And it's not clear if it will change any time soon.

While Erdmann's objection to the traditional retirement strategy is based on the modern easy-money, low-interest-rate environment, Peter Mallouk of Kansas City-based Creative Planning says he doesn't think the strategy has ever been a good idea.

"The way the industry selects portfolio management ... doesn’t make sense," he said. "It just never has made sense."

Mallouk runs a $39 billion company that was named by Barron's as the best independent wealth management firm in 2017. He told Business Insider that age is nearly irrelevant to retirement investing.

Read more: America’s biggest wealth manager oversees $39 billion for the ultrarich. Here are the 5 ways he says you can invest like 'the millionaire next door.'

In his view, the only thing that's really important is the needs of the investor. A well-off young person with minimal needs can make conservative investments, and an older person who is behind on retirement saving needs to be more aggressive.

Mallouk says the traditional investing philosophy can leave retirees without enough money to meet their needs late in life. 

The two views have different implications: If you agree with Erdmann, you might conclude that investing more heavily in bonds as you age makes sense assuming yields rise substantially in the future. But if you hold with Mallouk, you would focus more on stocks even into retirement.

SEE ALSO: MORGAN STANLEY: This earnings season is the 'moment of truth' for stocks. Here's why the signs are pointing to a major disappointment for investors.

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The Uber IPO exposes how Saudi cash drives Silicon Valley innovation, and even the biggest tech companies can’t stop it

Sat, 04/13/2019 - 8:00am  |  Clusterstock

  • Uber's S-1 filing showed that Saudi Arabia's Public Investment Fund owns 5% of the company.
  • The Public Investment Fund is also a top investor in Softbank's gargantuan Vision Fund, which owns 16% of Uber — not to mention sizable stakes in companies like Slack, WeWork, and DoorDash. 
  • Saudi Arabia has been criticized for human rights abuses and repressive laws, so it's a problematic source of cash for Silicon Valley, which prides itself on changing the world.
  • But Silicon Valley is under attack like never before these days, and that's caused a cynical search for stability that seems to have made taking Saudi money a non-issue. 

Silicon Valley's relationship with an undemocratic regime that has a troubling human rights record is in the spotlight. 

President Donald Trump has spoken out about it. Lawmakers are debating ways to stop the flow of money and data between the two.

The adversary in this cross-border drama is China, which has raised alarm bells in the US as it bulks up its homegrown tech industry and arouses suspicion of spying and influence.

However, there's much less fuss about the cozy ties between another repressive foreign power and Silicon Valley. 

Saudi Arabia's presence in Silicon Valley is greater than it's ever been. 

That became especially clear on Thursday when Uber filed its IPO paperwork. We learned from the S-1 filing that the kingdom's Public Investment Fund owns 5.2% of the ride-sharing company. 

The figure might actually under-count Saudi Arabia's influence within Uber. Softbank, the Japanese tech conglomerate, owns a 16.3% stake in Uber through its Softbank Vision Fund. The biggest investor in the Vision Fund is Saudi Arabia, which contributed $45 billion of the fund's massive $100 billion bankroll

The Vision Fund is Silicon Valley's undisputed kingmaker today, writing big checks and amassing stakes in high-flying startups such as WeWork, Slack, DoorDash and GM Cruise. That means Saudi cash is essentially funding much of Silicon Valley's innovation.

As the New York Times pointed out in October, this gusher of Saudi money is an inconvenient truth for an industry that prides itself on making the world a better place.

From space to augmented reality, Saudi cash is everywhere

Some basic facts about Saudi Arabia: It's a place where torture and arbitrary arrests are widespread, according to Amnesty International; a place where women are not allowed to travel abroad without the permission of a male "guardian." It's the leader of a coalition blamed for airstrikes in Yemen responsible for thousands of civilian deaths and injuries. 

And then there's the gruesome killing of Saudi dissident journalist Jamal Khashogghi, which, according to the CIA's initial conclusion, was ordered by Saudi Crown Prince Mohammed Bin Salman, the Wall Street Journal reported.

In other words, Saudi Arabia is antithetical to everything tech companies' altruistic mission statements claim to stand for.  

Saudi money may be more prevalent in tech now, but it's not new. Prince Alwaleed bin Talal was an early investor in Twitter, and at one point owned a stake larger than cofounder Jack Dorsey's. (Alwaleed was himself detained — in a Ritz Cartlon hotel — for three months in 2017 by his cousin Prince Mohammed, the current leader of the country).

And the Saudi Public Investment Fund is also a shareholder in Magic Leap, Tesla and Virgin Galactic, according to research firm CB Insights. Whether you're in augmented reality or outer space, there's no escaping Saudi money.

A 2018 Quartz article cites an estimate by research firm Quid that Saudi investors directly participated in tech investment rounds totalling at least $6.2 billion during the previous five years.

Uber CEO Dara Khosrowshahi backed out of a conference organized by Prince Mohammed last year after the Khashogghi killing, as did now-former Google Cloud CEO Diane Greene. But for the most part, there's been little pushback among tech startups when it comes to accepting Saudi or Softbank money.

Uber's winds of change

So why is Silicon Valley okay with Saudi money? 

It's true that we live in a world that runs on oil — so drawing a moral line isn't easy when you're pumping gas into your car every day. 

Maybe the tech industry thinks it's bringing the winds of change.

After all, when Uber announced its Saudi investment in 2016, women weren't allowed to drive.

“Of course we think women should be allowed to drive,” Uber's Jill Hazelbaker told the New York Times at the time. “In the absence of that, we have been able to provide extraordinary mobility that didn’t exist before — and we’re incredibly proud of that.”

And two years later, change did happen when the ban on women driving was officially lifted.

Did Uber's presence in Saudi Arabia cause the change? It's impossible to say with certainty, but I'd wager not. 

Much more likely is that Prince Mohammed, looking for a way to burnish his credentials as a "reformer" when he rose to power in 2017, saw the controversial driving ban as an easy and expedient thing to jettison in exchange for goodwill.

The notion of working from the inside to bring about change has a long and not-so-great track record in tech. Think back to Google contorting itself into a pretzel to justify its introduction, and then withdrawal, of a search engine in China. When outrage recently erupted over Google's secret plans to make a new censored search app for China, the company didn't even try to justify itself with a "change from within" argument.

Tech businesses don't really want a revolution

You may ask, at this point, why more companies don't take a stand and turn down Saudi cash. 

The sad reality is that companies are more interested in preserving the status quo that their businesses are built on than in bringing about change; even the "disruptive" tech companies.

That's especially true today, as tech companies are under siege from all sides, blamed for disrupting our privacy, our elections and our children's attention spans. 

Thinking differently is great marketing copy when it sells gadgets. But there's little upside in leading a revolution if it scares away customers. 

Look no further than Google's app store. Thanks to an app called Absher, Saudi men can direct where women travel, and receive alerts when women use a passport to leave Saudi Arabia. After Insider's Bill Bostock investigation into this wife-tracking app, US lawmakers demanded that Google remove Absher from its app store.

Google refused to pull the app. It argued that the app does not violate its terms of service.

Right now, the tech industry's terms of service are clear. Whether it's about policies, products or investors, the golden rule is stability. 

SEE ALSO: Uber can't decide whether cofounder Travis Kalanick is an asset or a liability, and it makes for an awkward but revealing IPO filing

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Here are the 8 clothing companies that could take Patagonia's place as the new keeper of the 'Midtown Uniform'

Sat, 04/13/2019 - 8:00am  |  Clusterstock

  • Following Patagonia's recent decision to be more selective with the number of new clients it will brand apparel for, a market gap has opened for other clothing companies to work with Wall Street and Silicon Valley firms.
  • Patagonia's fleece vests are a key part of finance bros' typical outfit, known as the 'Midtown Uniform' — slacks, a dress shirt, and a vest. 

From the disruptive nature of new technology, to the rising number of agile competitors in the space, Wall Street's list of concerns grows bigger every day.

However, arguably a bigger issue was raised across trading floors earlier this month: The future of the 'Midtown Uniform'.

Patagonia, a critical part of many Wall Street employees' daily outfits, recently decided it would be more selective with the number of new clients it will brand apparel for. The company is focusing on working with "more mission-driven companies that prioritize the planet", potentially excluding some Wall Street and Silicon Valley firms. The American clothing company's fleece vests are an integral part of what is commonly referred to as the 'Midtown Uniform': slacks, a dress shirt, and a vest.

So an opportunity has risen for another clothing company to be the go-to outfitter for the 20-something bankers, hedge funders and technologists. 

Here are eight companies that have the potential to fill the void left by Patagonia based on conversations with those in the industry and the reporter's own personal experience.

Vineyard Vines

For many, this is a natural fit to replace Patagonia. Founded in tony Martha's Vineyard, Vineyard Vines is the male equivalent of Lily Pullitzer. The brand is also already the clothing of choice for many hedge funders during their weekend trips to the Hamptons. 


Helly Hansen

The Norwegian clothing company might be the perfect foreign substitute for Patagonia. With its wide range of cold-weather apparel, there's a good chance finance bros might already have some Helly Hansen tucked away in their ski houses. 



The Vancouver-based company has made big strides on the West Coast, which is home to most of the big tech companies that have their own twist on the 'Midtown Uniform' (jeans and a t-shirt instead of slacks and a button down).  However, one problem this pick might have is the fact finance bros seem unlikely to buy from a clothing company they'll struggle to pronounce.

See the rest of the story at Business Insider

Facebook is appointing Peggy Alford to be the first African-American woman on its board, as Netflix CEO Reed Hastings prepares to leave (AAPL, NFLX)

Fri, 04/12/2019 - 5:44pm  |  Clusterstock

  • There are significant changes afoot on Facebook's board.
  • The company is nominating PayPal exec Peggy Alford for election to the board, and she will be the first African-American woman to serve as a director at Facebook.
  • Netflix CEO Reed Hastings and former White House official Erskine Bowles are leaving.

Facebook is shaking up its board of directors — nominating PayPal executive Peggy Alford, and preparing to part ways with the Netflix CEO Reed Hastings and former White House chief of staff Erskine Bowles.

On Friday, the Silicon Valley tech giant announced the news as it released its proxy statement ahead of its annual shareholder meeting on May 30. Alford will be the first African-American woman to join the company's board of directors, which has previously been criticised over its lack of diversity.

"What excites me about the opportunity to join Facebook’s board is the company’s drive and desire to face hard issues head-on while continuing to improve on the amazing connection experiences they have built over the years," she said in a statement. "I look forward to working with Mark and the other directors as the company builds new and inspiring ways to help people connect and build community."

The changes come as Facebook struggles to move past two years of damaging scandals, from Cambridge Analytica to the social network's role in spreading hate speech that fueled genocide in Myanmar. 

Bowles and Hastings will not stand for re-election at the annual shareholder meeting, the company said, bringing their time at the company to an end. The Netflix chief exec leaves as Facebook continues to push into video streaming, beefing up its video products and paying to stream original content on the platform. 

Bowles, who served in the Clinton White House, is the chair of the board's audit committee — the powers of which were boosted in mid-2018 amid Facebook's various crises. His role at Facebook was thrust into the spotlight by a major investigation in The New York Times published in November 2018, which reported that he lashed out at CEO Mark Zuckerberg and COO Sheryl Sandberg in 2017 about Russian activity on Facebook. 

"When the full board gathered later that day at a room at the company’s headquarters reserved for sensitive meetings, Mr. Bowles pelted questions at Facebook’s founder and second-in-command," the newspaper reported. "Ms. Sandberg, visibly unsettled, apologized. Mr. Zuckerberg, stone-faced, whirred through technical fixes."

Alford, payments firm PayPal's Senior VP of core markets, has previous ties to Zuckerberg: She was the the chief financial officer for the Chan Zuckerberg Initiative, the family's philanthropic vehicle, from September 2017 to February 2019.

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Millennials really love plants

Fri, 04/12/2019 - 4:38pm  |  Clusterstock

If there's one thing millennials are keeping alive, it's plants.

"With many millennials delaying parenthood, plants have become the new pets, fulfilling a desire to connect to nature and the blossoming 'wellness' movement," Matthew Boyle for Bloomberg wrote. "For a group that embraces experiences and travel, moreover, plants give Gen-Yers something to care for that won't die — or soil the rug — when they're not around."

It's a trend that's popping up in the most millennial of ways — it's driven, Boyle said, by social media (just check out the hashtag, #plantsofinstagram) and sold by startups. Consider the Sill, which is catering to plants' latest consumers by selling online with slogans such as "Can't Kill It. Just Try.," according to Boyle.

Houseplant sales in the US have nearly doubled over the past three years to $1.7 billion, Boyle reported, citing data from the National Gardening Association. 

Plants are certainly a lucrative industry. Millennials are paying as much as $200 for some varieties, such as variegated Monsteras, and Monstera deliciosa seeds cost twice what they used to, according to Boyle. But millennials aren't just dropping big money on plants — they're cashing in on them, too, opening up their own small brick-and-mortar plant stores, he said.

Millennials' boosting of the plant industry stands in stark contrast to the many industries they've been wiping out, including food products such as napkins, beer, cereal, and yogurt; services such as banks and gyms; retail stores such as casual dining chains, home-improvement stores, and department stores; and sports such as football and golf, Business Insider's Kate Taylor reported.

And that's not to mention homeownership and the starter home, which millennials are also wiping out, largely because of a more expensive real-estate market.

Plants are thriving among millennials because they also tie into another industry: wellness. Millennials have been dubbed the "wellness generation" by Sanford Health, thanks to their increased spending on all things health and wellness, including gym memberships, weeklong retreats, spa treatments, and organic foods.

But, Boyle said, the booming plant business is also a product of millennials pushing off milestones until later in life.

A survey by The New York Times revealed that raising kids is more expensive than it's ever been before — finances are the main reason why people aren't having kids or are having fewer kids than the number they consider ideal, Business Insider's Shana Lebowitz reported. Plants, although costly, are still cheaper than kids.

SEE ALSO: Raising kids is so expensive in America that millennials are prioritizing their pets instead and dropping up to $400 on designer dog clothes

DON'T MISS: Millennials are pouring money into gym memberships and boutique fitness classes. A financial expert says spending on fitness is a good money decision for 2 key reasons.

Join the conversation about this story »

NOW WATCH: Physicists have discovered that rotating black holes might serve as portals for hyperspace travel

Here are the world's 10 largest M&A deals this year

Fri, 04/12/2019 - 4:06pm  |  Clusterstock

Chevron on Friday agreed to acquire Anadarko Petroleum in a transaction valued at $47.5 billion, including equity and debt. Under the agreement, Chevron will acquire all of the outstanding shares of Anadarko for $65 a share — a 37% premium to Thursday's closing price. Anadarko shareholders will receive a mixture of cash and stock.

Chevron is the second-largest US energy company behind Exxon Mobil and the transaction will expand the company's capabilities in US shale oil and gas production. Many industry commentators have indicated consolidation in the fragmented sector is overdue, prompting speculation of further deal activity.

This year, 108 deals with a value of over $600 billion have been announced. North America was the most active region, however, Saudi Aramco's $61.9 billion purchase of Saudi Basic Industries was a notable transaction outside the region. Energy deals so far this year have topped $110 billion, including both the Anadarko and the Saudi Basic Industries transactions.

Here are 10 of the largest M&A deals so far this year in ascending order of their valuation size: 

Ultimate Software/Hellman & Friedman

Sector: High technology

Target name: Ultimate Software

Target nation: United States 

Acquirer name: An investor group led by Hellman & Friedman

Acquirer nation: United States 

Deal value net debt: $10.4 billion

Date Announced: February 4, 2019


Source: Bloomberg

Newmont Mining/Goldcorp

Sector: Materials

Target name: Goldcorp

Target nation: Canada

Acquirer name: Newmont Mining 

Acquirer nation: United States

Deal value net debt: $12.5 billion

Date Announced: January 14


Source: Bloomberg


Sector: Healthcare

Target name: Wellcare

Target nation: United States 

Acquirer name: Centene

Acquirer nation: United States 

Deal value net debt: $13.5 billion

Date Announced: March 27


Source: Bloomberg

See the rest of the story at Business Insider

Hudson Yards, NYC's $25 billion neighborhood, was financed with more than $1 billion that was meant for 'distressed' urban areas. Here's a look inside the glitzy development.

Fri, 04/12/2019 - 3:36pm  |  Clusterstock

  • Hudson Yards, NYC's new $25 billion neighborhood, was financed with at least $1 billion through EB-5, an investor visa program intended to combat urban poverty, according to a new report from CityLab.
  • As of March 15, the public can now visit the Vessel, a 150-foot tall, climbable sculpture in the center of Hudson Yards that cost $200 million to build.
  • The Shops and Restaurants at Hudson Yards, a luxury shopping center with stores like Louis Vuitton and Dior, are now open as well.
  • I got to spend the day at Hudson Yards for its grand opening. Here's what it looks like, from the $200 million climbable sculpture to the 7-story luxury shopping center.
  • Visit for more stories.

Hudson Yards officially opened on March 15.

At $25 billion, it's the most expensive real-estate development in US history — but reporting from CityLab shows that it got more than $1.2 billion in financing from EB-5, an investor visa program intended to combat urban poverty.

"This program enables immigrants to secure visas in exchange for real estate investments," wrote Kriston Capps for CityLab.

"EB-5 is supposed to be a way to jumpstart investment in remote rural areas, or distressed urban ones," Capps continued. Because the Hudson Yards area does not qualify as a distressed urban area, he continued, The Related Companies — the developer behind Hudson Yards — managed to link the boundaries of Hudson Yards to Harlem, where the employment rate is, in parts, low enough to qualify as a distressed urban area.

"By utilizing the EB-5 program we were able to finance the critical infrastructure for the project, the platform, where traditional financing is all but non-existent in the post-recession, post Dodd-Frank marketplace," a spokesperson for Hudson Yards told Business Insider.

"This capital, which comes at no cost to the American taxpayers, was the catalyst for the Hudson Yards project and allowed us to immediately create thousands of jobs all over the city," the spokesperson continued.

The spokesperson claimed that Hudson Yards would provide "direct benefits to areas of high unemployment" despite being some 70 city blocks and nearly 5 miles from the southern end of Harlem, where the actual high unemployment exists.

The public can now visit the brand-new neighborhood on Manhattan's West Side, which includes luxurious residential towers, a luxury shopping center with stores like Louis Vuitton and Dior, and a $200 million, 150-foot tall climbable sculpture called the Vessel.

I went to the grand opening ceremony at Hudson Yards and spent the day there. Here's what it looks like.

SEE ALSO: The billionaire behind Hudson Yards, the most expensive real-estate development in US history, says it's 'not a neighborhood for the rich'

SEE ALSO: I got a tour of a $14 million penthouse in NYC's new $25 billion Hudson Yards neighborhood and found that it was perfectly designed to show off its best asset

Hudson Yards, New York City's $25 billion neighborhood, is officially open to the public. On March 15, I attended the grand opening ceremony in the central plaza.

To get there, you take the 7 train to the Hudson Yards stop, a new station that opened in 2015.

Source: Curbed

If you turn your back on the glossy new skyscrapers as you walk down the West Side Highway to Hudson Yards, you can see the remaining visible rail yards just across the street.

See the rest of the story at Business Insider

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

Fri, 04/12/2019 - 3:06pm  |  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.

In recent years, we've seen a ballooning of activity in fintech — an expansive term applied to technology-driven disruptions in financial services. And 2018 has been no different, with fintechs' staggering influence on the market evidenced by record funding levels for the industry — by Q3 2018, overall funding was already up 82% from 2017’s total figure, according to CB Insights.

Additionally, this year marked a watershed moment for the industry, with the once clear distinction between fintechs and financial services proper now blurred significantly. Virtually every incumbent financial institution (FI) is now looking inward and engaging in an innovation drive, spurred on by competition from fintechs. As such, incumbents are now actively investing in, acquiring, and collaborating with their fintech rivals.

In this report, Business Insider Intelligence details recent developments in fintech funding and regulation that are defining the environment these startups operate in. We also examine the business model changes being employed among different categories of fintechs as they strive to embed themselves further in mainstream finance and prove sustainability. Finally, we consider which elements of the fintech industry are rapidly rubbing off on incumbent financial services providers, and what the future of fintech will look like.

The companies mentioned in this report are: Funding Circle, GreenSky, Transferwise, Ant Financial, Nubank, Cellulant, Oscar Health, Stripe, One97, UiPath, LianLian Pay,, Gusto, Toast, PingPong, Flywire, Deposit Solutions, Root, Robinhood, Atom, N26, Revolut, OneConnect, PolicyBazaar, WeCash, Zurich, OneDegree, Dinghy, Vouch Insurance, Laka, Cleo, Ernit, Monzo, Moneybox, Bud, Tandem, Starling, Varo Money, Square, ING, Chase, AmEx, Amazon, Monese, Betterment, Tiller Investments, West Hill Capital, Square, Ameritrade, JPMorgan, eToro, Lendy, OnDeck, Ripple, Quorom, Chain, Coinbase, Fidelity, Samsung Pay, Google Pay, Apple Pay, Bank of America, TransferGo, Klarna, Western Union, Veriff, Royal Bank of Scotland, Royal Bank of Canada, Facebook, ThreatMetrix, Relx, Entersekt, BNP Paribas, Deutsche Bank, Gemalto, Lloyd's of London, Kingdom Trust, Aviva, Symbility LINK, eTrade, Allianz, AXA, Broadridge, TD Bank, First Republic Bank, BBVA Compass, Capital One, Silicon Valley Bank, Credit Suisse, Ally, Goldman Sachs.

Here are some of the key takeaways from the report:

  • Fintech funding has already reached new highs globally in 2018, with overall funding hitting $32.6 billion at the end of Q3.
  • Some new regions, including South America and Africa, are emerging on the fintech scene.
  • We've seen considerable scaling in older corners of the fintech ecosystem, including among neobanks and alt lenders.
  • Some fintechs, including a number of insurtechs, have dipped into new markets to escape heightened competition.
  • Emergent areas like blockchain and distributed ledger technology (DLT), as well as digital identity, are gaining traction.
  • Many incumbents are undertaking business transformations that aim to reimagine everything from products and services to front-end systems and back-end processes.

 In full, the report:

  • Details the funding and regulatory landscape in the US, Europe, and Asia.
  • Gives an overview into a number of fintech segments and how they've changed over the past year.
  • Discusses how incumbents are reacting to fintechs in order to stay relevant in the changing financial services sector.
  • Evaluates what the future of fintech will look like and what trends to look out for in the coming year.
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SEE ALSO: How the largest US financial institutions rank on offering the mobile banking features customers value most

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The Barclays Ring is one of the best low-interest cards for people who don't like credit cards — here's why

Fri, 04/12/2019 - 2:54pm  |  Clusterstock

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  • Most cards are far from a democracy, but the unique Barclaycard Ring Mastercard put the card's benefits in the hands of its users. But do those benefits make sense for you?
  • The Barclaycard Ring offers low fees that make it an enticing option for balance transfers, occasional international travel, and no annual fee.
  • This card charges a very low APR that is the same for purchase, balance transfer, and cash advance transactions.
  • Pay 0% APR on balance transfers for 15 months on transfers completed with 45 days of opening a new account (after that, a 14.24% variable APR applies).
  • Update, 4/12/19: This article has been updated to reflect current APRs and fees.

Barclays, or Barclaycard, offers several useful credit cards depending on your needs and goals. If your focus is a low interest rate and low fees, the Barclays Ring credit card may be a great option for your wallet.

While this card does offer low costs, it does not offer any credit card rewards. If you want to earn miles or points for free travel or cash back on every purchase, Ring is not the right fit. This is why it is important to understand your credit and your needs from a card before signing up.

Due to the low fees and interest rates, this card is most appealing for someone looking to consolidate and pay off credit card debt with lower interest or someone who wants a credit card for occasional purchases to build credit or protect their debit card and bank account data when shopping online or while traveling.

Barclays Ring as a debt consolidation and pay-off engine

If you have a long history with credit cards, you may have built up a few balances over time that keep you paying every month. Wouldn't it be great to consolidate those payments into one? Even better, what if you could pause interest for one year so all of your payments go right into the principal balance? With this card, you can do both!

The Barclaycard Ring offers new cardholders 0% APR for 15 months on balance transfers completed within 45 days of opening a new account. Do note there is a 2% balance transfer fee ($5 minimum) for transfers completed within the first 45 days. After that, there is no balance transfer fee for future transfers but you would have to pay interest.

If you don't pay off the balances by the time 15 months is up, interest will kick in. But this card charges a competitive 14.24% variable rate APR. Interest rates can change at any time with market rates, but you'll pay less than most competing credit cards charge with the Ring credit card.

Read more: Barclays has brought back one of its most popular credit cards — and the sign-up bonus is at an all-time high

Build credit with an almost no-fee card

This credit card charges very few fees. Compared to the typical credit card, it feels like you pay nothing outside of interest, when it applies. There are only a couple of circumstances where you would pay any fees with this credit card.

There is no annual fee, no balance transfer fee after 45 days, and no foreign transaction fee. Cash advances cost just $3 each, which is a bargain compared to the typical 5% and $10 minimum. Free balance transfers after 45 days may be another opportunity for huge savings.

Late and returned payments cost up to $28 per occurrence, but you can avoid those by paying on time and only paying when you have enough cash in the bank to cover your payment. But those are things you should be doing anyway.

As long as you pay on time and avoid cash advances and balance transfers, you will never have to pay any fees for this credit card.

Get credit card protections with no extra hassles

Some people who are good with their money don't like credit cards because they focus on the costs rather than the benefits. As long as you pay off your card balance in full every month by the due date, you'll never have to pay any credit card interest.

But there are still good reasons to use a credit card outside of the borrowing features. When used responsibly, credit cards can build your credit. Further, they are the best tool to protect yourself from payment fraud anywhere you shop, online or at brick-and-mortar stores.

Because this card has no annual fee, you could keep it as an emergency card with no balance at no cost to you. Every month it sits there with no balance, it helps your credit score a little bit as it shows a positive payment history and low balance in proportion to your limits. That is a good thing for anyone who ever plans to buy a home or car with a loan in the future.

Credit cards also offer important protections. If you use a debit card for a purchase and a data thief gets ahold of your information, they can drain your bank account when making a purchase. With a credit card, you can just make a phone call to report the fraud and don't have to pay a cent.

Read more: 11 lucrative credit card deals you can get when opening a new card in August — including a rare 100,000-point offer

Barclays Ring: The best credit card for people who don't like credit cards

The simplicity, low cost, and benefits of this card make it a great option for anyone who wants to keep their costs as low as possible when dealing with credit. And if you don't like a feature or want to see something new, you get access to send card suggestions to community managers responsible for the Ring credit card. That is exactly how this card became so great to begin with!

Young professional cardholders enjoy this card for its ease-of-use and low costs. Retirees and those with homes paid off may enjoy using this account for purchase protections and keeping a healthy credit profile after paying off their home.

Personally, this card is not a great choice for my needs as I'm more focused on travel rewards. Others may be interested in cash back.

If rewards are not the main thing you look for in a card, you should look toward the Barclaycard Ring for its low fees and rates. That combination makes the card a winner.

Click here to learn more about the Barclaycard Ring Mastercard.

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17 ways life is different for millennials than for baby boomers, from crushing student loans to a disappearing middle class

Fri, 04/12/2019 - 2:42pm  |  Clusterstock

Millennials face different financial problems than their parents did — like a higher cost of living and heavier student loan debt. But they also have different preferences when it comes spending — like paying for experiences or "treating themselves."

INSIDER and Morning Consult recently teamed up to survey 4,400 Americans, and found evidence of all of the above. Of the respondents, 1,207 of them identified as millennials — defined by the survey as people ages 22 to 37 — and 1,472 identified as baby boomers — defined by the survey as people ages 54 to 77 (237 respondents did not select a generation).

As the results show, while the Great Recession affected all generations, it delayed millennials' ability to start building wealth. But they're trying hard to catch up, and they're overall more positive than baby boomers about where they are financially compared to where they expected to be 10 years ago.

Below, we've highlighted some of the most enlightening results from the survey that shed a bit of light on the financial behaviors of both generations. All findings from the survey are based on survey respondents who answered the question.

SEE ALSO: Nearly half of indebted millennials say college wasn't worth it, and the reason why is obvious

DON'T MISS: More than one-third of millennials earning at least $100,000 a year consider themselves middle class

Homeownership looks different for millennials — nearly one-third own a home, compared to nearly three-fourths of baby boomers. Nearly half of millennials are renting, compared to less than a quarter of boomers.

While baby boomers have had more time to build wealth and buy a home, this result is indicative of the fact that millennials are spending more time renting and waiting longer than ever to buy homes — a move that's killing the starter home.

Homes are 39% more expensive than they were nearly 40 years ago, according to Student Loan Hero. A report by SmartAsset found that in some cities, the median-priced home outweighed the median income by so much that it could take nearly a decade for someone with median income to save for a 20% down payment on a median-priced home.

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Millennials pay more a month for housing — more millennials than boomers spend over $1,000 monthly. More than half of boomers spend less than $1,000, compared to a little less than half of millennials.

Since more millennials are renting and doing so for a longer time, they're faced with climbing rents. Rents increased by 46% from the 1960s to 2000 when adjusted for inflation, according to Student Loan Hero. The current median US rent, according to Zillow, is $1,650.

Slightly more than three-fourths of millennials own a car, whereas 88% of boomers do.

Cars aren't always necessary where millennials prefer to live.

"Unlike baby boomers and their parents, who migrated to the suburbs en masse, millennials find happiness in cities," wrote Stephanie Taylor for Business Insider, citing a Regional Studies report.

Millennials who do need a car may be deterred from buying thanks to higher prices. From November 2006 to November 2016, prices for new cars increased by 5%, according to the Bureau of Labor Statistics.

See the rest of the story at Business Insider

Robots could wipe out 1.3 million Wall Street jobs in the next 10 years

Fri, 04/12/2019 - 2:10pm  |  Clusterstock

  • Jobs in banking and the financial services industries continue to be the most popular in 2019.
  • Despite their popularity, a new report predicts that 1.3 million bank workers will lose their jobs or be reassigned due to automation.
  • Banks have already begun investing in artificial intelligence, and recognize the technology will displace workers.
  • Visit for more stories.

Jobs in banking are some of the most sought after for job seekers — but plenty of roles may not be around much longer. 

Despite a year of scandals that entangled many of the country's largest banks, the desire to work at these companies remains high, according to a new report by LinkedIn. Some of the more high-profile scandals include Deutsche Bank's alleged involvement in a global money-laundering scheme and accusations against Well Fargo's auto-loan and mortgage practices.

Nonetheless, Bank of America, Goldman Sachs, Citigroup, Wells Fargo, and JPMorgan Chase remain five of the most popular places to work in 2019. LinkedIn attributes the popularity to banks offering increasingly tech-focused jobs that attract talented software engineers and developers out of college.

Read more: The 30 hottest companies of the year, according to LinkedIn

"The reality is that if somebody wants to learn finance and strategy, these banks are still the places to be trained and developed," Heather Hammond, co-head of the global banking and markets practice at Russell Reynolds Associates, told LinkedIn.

While job seekers may be flocking to banks at the current time, a new report revealed a million jobs in the industry could disappear in just over 10 years. Job losses or reassignments will impact 1.3 million bank workers in the US alone by 2030, according to a new report from British insights firm IHS Markit. Especially at-risk roles include customer-service reps, financial managers, and compliance and loan officers.

Though the most at-risk jobs seem to be lower-paying, jobs in banking as a whole are some of the most expensive in the country. Starting analysts make $91,000 in base pay, while managing directors can earn almost $1 million after bonuses. In fact, the industry could add a whopping $512 billion in global revenue by 2020 with the use of intelligent automation, according to a 2018 report from Capgemini.

While the use of AI remains sparse, and the technology is still basic, a boost in revenue will increase the adoption of automation, Business Insider analyst Lea Nonninger reports.

Unfortunately for job seekers, banks' investment into automation is well under way. In fact, a detailed 2018 report from Business Insider Intelligence noted that banks are already using AI to mimic bank employees, automate processes, and preempt problems. JPMorgan is cleaning thousands of databases to make room for machine learning tech. Citi president Jamie Forese said in 2018 that robots could replace as many as 10,000 human jobs within five years.

Laura Barrowman, chief technology officer at the Swiss investment bank Credit Suisse, revealed the company is already retraining employees whose jobs have been displaced by AI: "Globally, if you look at cyber skills, I think there is a deficit," Barrowman told Business Insider's panel at the World Economic Forum earlier this year. "There is such a shortage of skills, and you need people who have that capability."

SEE ALSO: AI will have a 'transformative' effect on Wall Street, according to a new report, putting 1.3 million finance jobs in the US at risk

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

Fri, 04/12/2019 - 2:06pm  |  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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