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Hedge-fund billionaire Ray Dalio says capitalism is failing America, and we need to take 5 specific actions to save it

Thu, 04/04/2019 - 5:35pm  |  Clusterstock

  • Ray Dalio is the founder of Bridgewater Associates, the largest hedge fund.
  • In a new essay, Dalio wrote that capitalism is failing the majority of Americans and has to be reformed because concentrated and restrained wealth does not benefit the overall economy and destabilizes society.
  • Dalio called for leadership that declares inequality a national emergency and addresses it with steps such as increased taxes on the wealthy.
  • This article is part of Business Insider's ongoing series on Better Capitalism.

Bridgewater Associates founder Ray Dalio is afraid that capitalism has become so broken that it's going to either be abandoned or left to continue as it is.

Either scenario would be to the long-term detriment of the country, in his view.

In a new LinkedIn post, Dalio analyzes the ways America's economy has been failing the majority of its citizens and places the current environment in a global perspective. He wrote that he's seen "capitalism evolve in a way that it is not working well for the majority of Americans because it's producing self-reinforcing spirals up for the haves and down for the have-not."

Before he even gets into the data, he says that his "American Dream" of rising from a middle-class upbringing in Queens to the head of the world's largest hedge fund was possible due to opportunities that included good public schools and student loans, but that equal education and job opportunities are no longer available.

"While most Americans think of the US as being a country of great economic mobility and opportunity, its economic mobility rate is now one of the worst in the developed world," he wrote. He explained that there is essentially two Americas, one for the top 40% and one for the bottom 60%. The former is faring significantly better, and those at the highest level of wealth are as far removed from everyone else as they ever have been.

Dalio listed reasons why capitalism isn't working as it should in the US:

  • There's been no real wage growth, adjusted for inflation, for the majority of Americans since 1980.
  • The income gap is virtually as high as it's ever been, and the wealth gap is as high as it was in the late 1930s, ahead of World War II.
  • Two-thirds of the bottom 60% have no savings, and economic mobility has been declining for 40 years.
  • About 17.5% of children live in poverty, and despite some outliers, America's public-education system is among the worst in the developed world.

Dalio has been saying for the past couple years that we're in danger of repeating the biggest mistakes of the '30s, and he's included rising populism on both sides of the aisle as a threat to stability. "In addition to social and economic bad consequences, the income/wealth/opportunity gap is leading to dangerous social and political divisions that threaten our cohesive fabric and capitalism itself," he wrote in his latest post.

He prescribed five steps for saving America's capitalist system:

  1. America needs leaders at the top that proclaim the current state of inequality to be nothing less than a national emergency.
  2. A bipartisan committee should work on developing new means of redistribution and community development.
  3. Those leaders must be held accountable to statistics that measure the progress of their reforms.
  4. Resources need to be redistributed for the purpose of providing equal opportunity to the vast majority of Americans. This can be done through increasing taxes on the wealthy, further taxing societally harmful things like pollution, and develop public-private partnerships that link business goals with societal goals.
  5. Coordinate fiscal and monetary policy (i.e. increase cooperation among the Federal Reserve, Congress, and the White House).

"The problem is that capitalists typically don't know how to divide the pie well and socialists typically don't know how to grow it well," Dalio wrote. He wants to avoid both the status quo and socialism, and he's hoping that the elections in both the US and Europe that happen over the next few years result in a reformed capitalism.

You can read the full essay on LinkedIn »

SEE ALSO: 'This is going to end badly for everyone': Wealthy venture capitalist Nick Hanauer is on a mission to fix the American economy before it's too late

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NOW WATCH: Ray Dalio on the next financial crisis, how he started his own hedge fund, transparency at work, and more

Elon Musk said he'll probably reach a new settlement with the SEC in the next 2 weeks (TSLA)

Thu, 04/04/2019 - 5:13pm  |  Clusterstock

Tesla CEO Elon Musk said he will probably settle with the Securities and Exchange Commission (SEC) over its motion to have him held in contempt of court following a February tweet about vehicle production.

Bloomberg reporter Bob Van Voris tweeted a video of Musk on Thursday after the court hearing in New York City. When asked if he would reach a new agreement with the SEC in the next two weeks, Musk said, "most likely."

Read more: Judge orders Elon Musk and the SEC to put on their 'reasonableness pants' and work things out

During the hearing, a federal judge ruled that Musk and the SEC must take the next two weeks to reach a new resolution over their 2018 settlement regarding Musk's conduct on Twitter.

"I have great respect for Judge Nathan, and I’m pleased with her decision today," Musk said in a statement to Business Insider. "The tweet in question was true, immaterial to shareholders, and in no way a violation of my agreement with the SEC. We have always felt that we should be able to work through any disagreements directly with the SEC, rather than prematurely rushing to court."

In February, the SEC asked a judge to hold Musk in contempt of the court that approved their 2018 settlement after Musk tweeted out a projection about Tesla vehicle production. The SEC said in a court filing that Musk violated the terms of their settlement by not receiving approval from Tesla before publishing the tweet.

The settlement followed an August 2018 tweet from Musk saying he had obtained the funding necessary to take Tesla private at $420 per share. The SEC sued Musk over that tweet, saying that Musk was not as close to acquiring funding for the deal as he indicated. Their settlement required Musk to step down as the chairman of Tesla's board of directors for three years, pay a $20 million fine, and receive approval for all future written communications that could be relevant to Tesla shareholders.

.@elonmusk ouside court says he'll "most likely" settle the SEC's push to have him held in contempt, within the next two weeks. @tictoc #TSLA @law
https://t.co/Rdtpi5HI9F

— Bob Van Voris (@BobVanVoris) April 4, 2019

Got a Tesla tip? Contact this reporter at mmatousek@businessinsider.com.

SEE ALSO: Tesla's stock is nearing a key price. Here's what the pros are saying.

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Here's how much Amazon stock Jeff Bezos will own after giving 25% of their stake to MacKenzie (AMZN)

Thu, 04/04/2019 - 5:09pm  |  Clusterstock

  • MacKenzie Bezos tweeted on Thursday that soon-to-be ex-husband Jeff will retain 75% of the couple's Amazon stake and all of its voting rights.
  • Jeff Bezos' net worth still be more than $100 billion at the current share price.
  • Together the Bezoses own 78.8 million shares, or about 16% of the company. 
  • Watch Amazon trade live

The Bezos have finalized the terms of their divorce, with Amazon CEO Jeff Bezos retaining 75% of the couple's stake and all interests in the Washington Post and the space-travel company Blue Origin, MacKenzie said in a Thursday tweet.

Jeff will hold onto 59.1 million shares of Amazon, good for $106.7 billion stake in the company. Meanwhile, MacKenzie will keep 19.7 million shares, worth $35.6 billion at Thursday's price. MacKenzie has also given all of her voting rights to Jeff, assuring his control over the company. 

Together, the couple owned 78.8 million shares, or about 16% of the company. Amazon shares ended Thursday down 0.4% at $1,812 apiece following the news. 

Markets had initially feared a messy divorce might disrupt Amazon's business

Amazon shares were up 20.6% this year through Thursday.

 

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Amazon's big answer to Apple's AirPods could arrive later this year

Thu, 04/04/2019 - 5:02pm  |  Clusterstock

  • Amazon will launch a pair of Alexa-enabled wireless earbuds in the second half of this year, according to a report.
  • The earbuds would allow users to access Amazon's virtual helper by just saying "Alexa."
  • Amazon would be entering a market dominated by Apple that's becoming increasingly crowded. 

Amazon is planning to release a pair of wireless earbuds with its popular Alexa virtual assistant built in during the second half of this year, according to a report from Bloomberg.

The headphones would directly compete with AirPods, the cord-free earbuds Apple introduced in 2016 and refreshed in March. Users would be able to summon Alexa by saying the trigger word, just as they would when using an Echo or any other Alexa-supported device.

Amazon's earbuds would also support gestures, such as tapping to switch music tracks or to end phone calls, report said, and would come in a case that's capable of charging the earbuds, just like AirPods. They will not have built-in cellular activity, which means users will have to connect them to a smartphone. The project is being referred to as one of the "most important" initiatives in Amazon's Lab126 division, according to Bloomberg.

Amazon's Alexa has established itself as the leading smart home platform, claiming 61.1% of the smart-speaker market in the US, according to a report by Voicebot.ai and Voicify.

But Amazon has largely missed out on the mobile market after its failed Fire Phone, which it scrapped in 2015 after disappointing sales. A device such as Alexa-enabled earbuds could change that by giving existing Alexa users a more convenient way to access the virtual assistant outside the home.

Amazon makes Alexa available to iPhones and Android devices via a smartphone app, but the virtual assistant isn't integrated into the operating systems like Apple's and Google's own digital helpers. 

Amazon would be entering a crowded market, in which rivals such as Apple have already established a firm lead. In the fourth quarter of 2018, Apple accounted for 60% of the global market for truly wireless headphones, according to Counterpoint Research.

There are also more options available than ever before. For example, wireless earbuds made by companies such as Jabra can access Alexa, Siri, and the Google Assistant.

Apple also recently launched a new version of the AirPods that support hands-free Siri access and comes with an optional wireless-charging case. Its Beats brand also just launched a fresh pair of wireless Powerbeats Pro earbuds. Before that, Samsung released its own AirPods rival, the Galaxy Buds.  

SEE ALSO: Apple just released another new pair of truly wireless headphones. Here's how they compare to the new AirPods.

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The Bezos divorce won't make MacKenzie the richest woman in the world. Here's how her wealth stacks up against the 5 richest women in the world.

Thu, 04/04/2019 - 4:57pm  |  Clusterstock

Jeff Bezos, founder and CEO of Amazon, and wife MacKenzie Bezos announced they've finalized the terms of their divorce after 25 years of marriage.

Jeff Bezos founded Amazon after he and MacKenzie Bezos got married, Business Insider's Shana Lebowitz reported. In the community property state of Washington, which dictates assets acquired during marriage to be split 50-50, that means MacKenzie Bezos could have a right to half of her husband's Amazon fortune if they didn't sign a prenup (which they reportedly didn't).

That could leave a wife divorcing the world's richest man — who has an estimated net worth of nearly $150 billion —  as the world's richest woman; but that's not quite the case for Mackenzie Bezos.

Read more: Jeff Bezos and MacKenzie Bezos have finalized their divorce agreement, and he's getting 75% of the Amazon shares and voting control of the rest

In a Twitter statement on April 4, she said she's granting Jeff Bezos all of her interests in the Washington Post and Blue Origin, and 75% of the Amazon stock co-owned by the pair, as well as voting control over the shares she's retaining. Her remaining stake in Amazon is estimated to be worth about $35.7 billion at current prices, Business Insider's Avery Hartmans reported.

Depending on exactly how much money MacKenzie gets, she's set to rank as the world's third- or fourth-richest woman, according to various publications. Here's how the world's five richest women currently stack up, according to Forbes' real-time net worth profiles:

  1. Francoise Bettencourt Meyers — $52.9 billion
  2. Alice Walton — $45.4 billion
  3. Jacqueline Mars — $25.9 billion
  4. Yang Huiyan — $23.8 billion
  5. Susanne Klatten — $20.8 billion

MacKenzie Bezos' role in Amazon dates back to the company's origins. She was one of Amazon's first employees and reportedly drove her husband cross-country while he drafted part of the company's business plan, according to Business Insider's Mark Abadi.

SEE ALSO: Jeff and MacKenzie Bezos have finalized the terms of their divorce — here's what typically happens when billionaires break up

DON'T MISS: Jeff Bezos' divorce won't affect his voting power at Amazon, because Mackenzie is giving him control

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Here's how much Amazon stock MacKenzie Bezos will own after giving 75% of their stake to Jeff (AMZN)

Thu, 04/04/2019 - 4:54pm  |  Clusterstock

  • MacKenzie Bezos tweeted on Thursday that she is giving her soon-to-be ex-husband Jeff 75% of their Amazon stake and all of its voting rights.
  • The Bezos owned 78.8 million shares, or about 16% of the company. 
  • Watch Amazon trade live

The Bezos have finalized the terms of their divorce with MacKenzie Bezos saying she will give Amazon CEO Jeff Bezos 75% of their Amazon stock while relinquishing all interests in the Washington Post and space-travel company Blue Origin, she said in a Thursday tweet.

MacKenzie will be left with $35.6 billion while Jeff Bezos will retain a $106.7 billion stake in the company. MacKenzie has also given all of her voting rights to Jeff, assuring his control over the company. 

Together, the couple owned 78.8 million shares, or about 16% of the company. The stock was down 0.4% at $1,812 a share following the news. MacKenzie Bezos will hold 19.7 million shares with Jeff holding 59.1 million.

Markets had initially feared a messy breakup might disrupt Amazon's business, following the announcement that the couple had began divorce proceedings

Amazon shares were up 20.6% this year.

 

Join the conversation about this story »

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Jeff and MacKenzie Bezos have finalized the terms of their divorce — and she's set to come out of it as one of the richest women in the world

Thu, 04/04/2019 - 4:31pm  |  Clusterstock

  • Jeff and MacKenzie Bezos have finalized the terms of their divorce. On Thursday, they both released statements on Twitter.
  • The couple first announced their plans to divorce in January, leading to speculation on how they would divide their fortune.
  • Jeff Bezos — founder and current CEO of Amazon — is set to remain the world's richest person with 75% of the couple's Amazon shares, while MacKenzie Bezos is positioned to become one of the world's richest women after retaining 25% of the shares.
  • Visit Business Insider's homepage for more stories.

MacKenzie Bezos is set to become one of the richest women in the world after her divorce.

On Thursday, Amazon CEO Jeff Bezos and his wife MacKenzie announced that they had finalized the terms of their divorce. Following 25 years of marriage, news of their impending divorce first broke in January.

Read more: Jeff and MacKenzie Bezos have finalized the terms of their divorce— here's what typically happens when billionaires break up

MacKenzie announced in a Twitter statement that she will retain 25% of the former couple's Amazon shares, while Jeff will keep 75% along with voting control of the shares she retains. MacKenzie will also be giving him her stakes in the Washington Post and Blue Origin.

Jeff is still set to remain the richest person alive; his current net worth is nearly $150 billion.

Following the divorce, MacKenzie will join the ranks of the world's richest women, among them Françoise Bettencourt Meyers, who inherited the L'Oreal fortune in 2017; Alice Walton, one of the three Walmart heirs; Jacqueline Mars of the Mars candy dynasty; and Laurene Powell-Jobs, who has significant stakes in Apple and Disney.

SEE ALSO: MacKenzie Bezos played a big role in the founding of Amazon and drove across the country with Jeff to start it

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NOW WATCH: Jeff Bezos is worth over $100 billion — here's how the world's richest man makes and spends his money

Judge orders Elon Musk and the SEC to put on their 'reasonableness pants' and work things out (TSLA)

Thu, 04/04/2019 - 4:22pm  |  Clusterstock

  • Lawyers for Tesla CEO Elon Musk sparred with government lawyers in federal court on Thursday.
  • The Securities and Exchange Commission had accused Musk of violating his settlement agreement with the regulatory agency by tweeting that the company would make 500,000 cars this year.
  • Elon Musk attended the hearing but did not testify.
  • Judge Alison Nathan ordered the two parties to take two weeks and find a new resolution. 

A federal judge on Thursday ruled that Tesla CEO Elon Musk and federal regulators with the Securities and Exchange Commission (SEC) should hold further mediation to come up with a new way to monitor the billionaire’s tweets.

Musk and the SEC have been embroiled in a legal battle since August, when the CEO tweeted that he intended to take Tesla private at $420 per share. In a $20 million settlement with the stock regulator, Musk agreed to have his external communications vetted by a Tesla lawyer.

That all came to a breaking point in February when the SEC asked a judge to find Musk in contempt of court, accusing him of violating that agreement by tweeting that Tesla would make 500,000 cars in 2019.

Read more: Elon Musk and the SEC are in a fierce battle over one of Musk's tweets — here's what you need to know about their dispute

In Thursday’s hearing at a packed courthouse in Manhattan, lawyers for Musk and the SEC made their cases in 45-minute oral arguments. The hearing ended with a simple order from Judge Alison Nathan: make a new resolution. SEC lawyers also said they want to set up a framework for future violations, including escalating fines. 

"My call to action is for everyone to take a deep breath, put your reasonableness pants on and work this out,” she said, according to reporters in the courtroom.

As he left the courthouse, Musk said he was “very happy” with the outcome, according to Bloomberg, and that he was very impressed with the judge’s analysis.

.@elonmusk ouside court says he'll "most likely" settle the SEC's push to have him held in contempt, within the next two weeks. @tictoc #TSLA @law
https://t.co/Rdtpi5HI9F

— Bob Van Voris (@BobVanVoris) April 4, 2019

 

SEE ALSO: Minute-by-minute: How Elon Musk faces off with SEC in court

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2 drug giants are feuding over a highly successful new migraine drug, and court documents reveal how profitable the $10 billion market could be

Thu, 04/04/2019 - 4:07pm  |  Clusterstock

  • Two drugmakers, Amgen and Novartis, have worked together for years on a new type of cutting-edge migraine drug, Aimovig.
  • Now they're involved in a bitter fight. Amgen is trying to get out of the collaboration, while Novartis is suing Amgen to keep it in place. 
  • Aimovig costs roughly $7,000 a year and was the first of a new category of migraine drugs to get to market. The lawsuit provides a window into how successful it has been and how much Novartis stands to lose in the disagreement.

Years ago, two big drugmakers partnered to bring a new kind of cutting-edge migraine medication to patients.

The collaboration was wildly successful — maybe too successful.

One of the collaborators, the $120 billion drug company Amgen, is now trying to get out of the agreement with the $220 billion Swiss drug giant Novartis

But Novartis isn't taking it lying down. The drug giant just sued Amgen, alleging that its partner doesn't have a legitimate reason to end the collaboration. Novartis even accused Amgen of trying to keep all the profits from the migraine drug for itself. 

The squabble, now poised to play out in court, comes as their product, Aimovig, leads a new and competitive category of migraine drugs that could be worth as much as $10 billion.

The drugs cost roughly $7,000 a year in the US, and about 210,000 American patients have taken Aimovig so far, with about 20,000 patients outside the US, according to the Novartis complaint.

"In the short time since it has been launched in the US, the product has become a runaway success and the number of patients being treated has vastly exceeded what Amgen and Novartis Pharma projected," the complaint, which was filed on Thursday, says. 

Millions of Americans suffer from migraines, and about 3 million to 7 million have chronic debilitating migraines each month. Though many think of migraines as simply head pain, those who get them also often experience vomiting, dizziness, and sensitivity to lights, smells, and sounds. 

A new class of migraine drugs aim to offer relief to those who experience migraines more frequently. Aimovig was the first to get approved in the US, and others quickly followed.

(The companies will work to make sure the disagreement won't affect patient access, Amgen told Business Insider in a statement.)

Read more: The FDA just approved a new kind of medication that could change the way we treat a condition that affects 38 million Americans

A yearslong collaboration, now threatened by a dispute

The collaboration between Novartis and Amgen on Aimovig dates back to 2015.

The origins of their quarrel also started that year, when a unit of Novartis called Sandoz began working with another migraine company, the biotech Alder Biopharmaceuticals. Sandoz was manufacturing the experimental migraine drug ALD403 at a factory in Austria. 

Novartis said it found out about the agreement only this past summer and, in the interest of being a good partner, gave Amgen a heads up.

Amgen objected, and the two companies have been going back and forth about it since then. On Tuesday, Amgen gave Novartis notice that it wanted to terminate their collaboration. 

Alder's ALD403 has indeed been positioned as a rival product to Aimovig and other already approved drugs from the generic drugmaker Teva and the pharmaceutical company Eli Lilly. They all use a similar scientific approach to treating migraines preventatively, or before they happen. 

Read more: Drugmakers are using an unusual tactic to compete in a new class of medication treating the 38 million Americans who have migraines

Novartis says it risks losing more than $500 million

But in the complaint, which was filed in the Southern District of New York, Novartis said that ALD403 isn't really a threat to Aimovig.

The experimental drug, which hasn't been approved anywhere, "differs significantly from, and will not fully compete with, Aimovig," Novartis' complaint says. That's because it will be the fourth type of new migraine product and has to be injected by a doctor at their office, while patients can self-inject Aimovig. 

The Swiss drug giant also said it has invested too much in Aimovig to get cut out now, having spent about $530 million to help out with the US launch last May.

Amgen gets the bulk of US sales for Aimovig, which amounted to roughly $120 million last year, and pays royalties to Novartis. Novartis, meanwhile, gets commercial rights outside the US under their agreement.

And while the companies haven't disclosed how that breaks down, most assume they're roughly splitting profits, the Mizuho analyst Salim Syed said. 

Ending the agreement now would mean doing so "before Novartis Pharma has come close to earning a return on its investment," Novartis said.

"Amgen's purpose is all too apparent," the complaint adds. "On the heels of Aimovig's successful launch, Amgen wants to cut Novartis Pharma out of the future sales of Aimovig in the U.S."

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The SEC revealed the punishment it wants Elon Musk to face if he violates the terms of their settlement in the future (TSLA)

Thu, 04/04/2019 - 3:41pm  |  Clusterstock

  • The Securities and Exchange Commission (SEC) reportedly told a judge in New York City on Thursday that it wants Tesla CEO Elon Musk to face increasing fines if he violates the terms of their 2018 settlement in the future.
  • It is unclear whether a fine would be the extent of the punishment the agency believes Musk should receive for a February tweet that the SEC said did not comply with their settlement.
  • But it now appears unlikely that the SEC would want to bar Musk from serving as Tesla's CEO, a punishment the agency sought in its 2018 lawsuit over one of Musk's tweets.
  • You can follow along for the latest in Thursday's hearing here.

The Securities and Exchange Commission (SEC) told a judge in New York City on Thursday that it wants Tesla CEO Elon Musk to face increasing fines if he violates the terms of their 2018 settlement in the future, Bloomberg reported.

It is unclear from the Bloomberg report if a fine is the extent of the punishment the agency believes Musk should receive for a February tweet that the SEC said violated their settlement. But it now appears unlikely that the SEC would want to bar Musk from serving as Tesla's CEO, a punishment the agency sought in its 2018 lawsuit over one of Musk's tweets.

Judge Alison Nathan said on Thursday that she will direct Musk and the SEC to revise their settlement, according to Bloomberg.

Read more: LIVE: Elon Musk faces off with SEC in court

In February, the SEC asked a judge to hold Musk in contempt of the court that approved their 2018 settlement after Musk tweeted out a projection about vehicle production. The SEC said in a court filing that Musk had violated the terms of their settlement by not receiving approval from Tesla before publishing the tweet.

The settlement followed an August 2018 tweet from Musk saying he had obtained the funding necessary to take Tesla private at $420 per share. The SEC sued Musk over that tweet, saying that Musk was not as close to acquiring funding for the deal as he indicated. Their settlement required Musk to step down as the chairman of Tesla's board of directors for three years, pay a $20 million fine, and receive approval for all future written communications that could be relevant to Tesla shareholders.

Got a Tesla tip? Contact this reporter at mmatousek@businessinsider.com.

SEE ALSO: 'By whatever means necessary': Tesla leaves some customers in the lurch as it rushes to deliver cars by the end of the quarter

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A California company tested 20 popular CBD products and found 'insanely high levels' of dangerous chemicals and misleading labels

Thu, 04/04/2019 - 3:38pm  |  Clusterstock

  • CannaSafe, a California cannabis-testing company, conducted a blind analysis of 20 popular CBD products.
  • Just three of them, or 15%, actually contained what the labels said, the study found. The results were shared exclusively with Business Insider.
  • Some of the products also contained dangerously high levels of solvents, Aaron Riley, CannaSafe's CEO, said in an interview.
  • The test results point to the challenges of meeting the huge demand for a product that was illegal just months ago.

It's no secret that CBD is booming.

The nonpsychoactive component of cannabis has shown up in products from face masks and lotions to cupcakes and infused lattes. And some CBD brands have even signed deals with mainstream pharmacies like CVS and Walgreens to sell CBD topicals on shelves.

Analysts at the investment bank Cowen expect the CBD market to grow from about $1 billion today to more than $16 billion by 2025.

There's just one problem: Most CBD products actually contain very little CBD, a blind analysis of 20 CBD products conducted by CannaSafe Laboratories, a California cannabis-testing company, found.

Read more: The FDA is putting together a group of experts to figure out how to handle the $1 billion CBD industry

On top of that, the analysis found that many of the tested products — which included vape cartridges, beverages, candies, and creams — contained dangerous gases like ethylene oxide and ethanol that are especially harmful when heated and inhaled.

The results of the study were shared exclusively with Business Insider. It found that out of the 20 popular products tested, only three actually matched what the labels claimed.

The tests were conducted blindly for accuracy. The names of the manufacturers weren't reported.

"The results were a little bit worse than I expected," Aaron Riley, the CEO of CannaSafe, said in an interview with Business Insider. "I expected to see like 20% to 30% pass, but it wasn't, like, a total shocker."

Based in Van Nuys, California, CannaSafe uses state-of-the-art chromatographs to test cannabis products for things like potency, pesticides, heavy metals, and assorted microbes on behalf of what Riley said is over 700 clients, mostly smaller cannabis brands.

Riley said some of the tested products had "insanely high levels" of solvents that are particularly dangerous when vaporized and inhaled.

Only about one-eighth of the California market is compliant with regulations, according to Riley. Within that subset, the failure rate is low, with about 5% or 6% of products failing, Riley said.

But things are steadily improving. Riley said that since his company started testing cannabis products in 2017, the failure rate had dropped dramatically from about 70% percent.

While California's Bureau of Cannabis Control earlier this year rolled out regulations around what is and isn't allowed in cannabis products — and has mandated that products be tested in certified labs — CBD is still in a legal gray area at the federal level.

"I'd say the regulations have been very effective in terms of mitigating risk and harm for consumers," Riley said. "I think we're going to see that kind of across the board. And probably in two or three years, it's going to be even lower than that."

'They just see dollar signs'

The problems with these products highlight the challenges of creating supply chains to meet the huge appetite for a product that was illegal just months ago.

After California introduced testing regulations earlier this year, a report from the industry website Leafly said that test results of Chinese-made vapes were showing they often contained lead, which leaches into the cannabis oil and then into the consumer's bloodstream. These products simply weren't being rigorously tested before, the report said.

And in other states, like Oregon, audits have found that laboratory testing standards were often inadequate, exposing consumers of medical and recreational cannabis to harmful pesticides, a risk compounded when the product is combusted and inhaled.

Read more: Wall Street thinks the $1 billion market for CBD could explode to $16 billion by 2025

To Riley, the quality of the operators — and thus the product — boils down to experience.

"There's all these people that are running towards this industry — they just see dollar signs or whatever," Riley said. "You have a very, very fast-growing economy."

The most successful operators, Riley said, come from "correlating industries," like agricultural management, and have experience growing large amounts of crops safely, rather than just "growing weed in their garage."

Illicit or "black market" cannabis products still use lots of pesticides — it's cheaper and easier than growing cannabis in a safer way, and there's no incentive to test illegal products.

CBD entrepreneurs welcome more regulation and clarity

Some CBD brands have said they would welcome more regulatory clarity from the federal government.

Since Congress passed last year's farm bill, which legalized hemp, many in the industry thought it would be legal to infuse products with hemp-derived CBD. But health departments in some states, including New York, have forced retailers and restaurants to pull food products with CBD off their shelves.

The Food and Drug Administration's outgoing commissioner, Scott Gottlieb, has formed a working group to "explore potential pathways" for dietary supplements and CBD-infused food products to be "conventionally marketed."

The FDA is holding a public hearing on the issue in May. The core challenge is whether CBD is a drug and should thus be regulated and sold like a pharmaceutical, or whether it can be considered a food additive or supplement and sold on store shelves.

CBD's existence in a gray area federally "isn't good for the industry or consumers," said Kerrigan Behrens, a former investment banker who's the cofounder and chief marketing officer of Sagely Naturals, a CBD company in Los Angeles.

"We hold ourselves to the same standards as any other" over-the-counter product, Behrens said. "Lots of brands aren't doing that."

Peter Horvath, the CEO of Green Growth Brands, a cannabis company that owns a branded line of CBD products distributed in traditional retailers like DSW and the Simon Property Group, said in a previous interview that more stringent regulation on the FDA's part would hurt competitors.

"If the FDA came down hard, our competitors would be sitting on inventory they couldn't sell," Horvath said. "If I'm being malicious, I hope they come down hard."

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NOW WATCH: Elon Musk sent a $100K Tesla Roadster to space a year ago. It has now traveled farther than any other car in history.

Here's how Elon Musk's tussle with federal regulators went down in court (TSLA)

Thu, 04/04/2019 - 3:36pm  |  Clusterstock

  • Federal regulators and Elon Musk are set to face off in federal court in New York on Thursday. 
  • The SEC has asked the judge to find Musk in contempt of court for allegedly violating his settlement with the agency. 

Tesla CEO Elon Musk and his legal team have arrived for a Thursday court hearing in the case against him brought by the Securities and Exchange Commission (SEC).

The legal spat dates back to Musk's September 2018 tweet that he was looking to take Tesla private at $420 per share. That go-private bid did not work out, and resulted in two, $20 million settlements between both Tesla and Musk with the SEC.

Musk also agreed to have his tweets monitored by a company employee, but Tesla has not disclosed who that “twitter sitter” is. That was fine, until Musk tweeted on February 19 that Tesla would make 500,000 cars in 2019 — a substantial deviation from what the company had told investors in its regulatory filings.

Despite a correction about four hours later that morning, the SEC accused Musk of violating the agreement and asked the court to find him in contempt of court. 

Full coverage: Elon Musk and the SEC are in a fierce battle over one of Musk's tweets — here's what you need to know about their dispute

Musk's lawyers have argued in subsequent filings that the SEC is overreaching in asking the court to find Musk in contempt. According to Musk's attorneys, the SEC was attempting to expand the settlement's scope to include any of Musk's tweets about Tesla, regardless of their relevance to shareholders.

"Such a broad prior restraint would violate the First Amendment," Musk's lawyers said.

The hearing, in US District Court for the Southern District of New York, kicked off off at 2pm Eastern. Business Insider has a reporter inside the courtroom — follow along for live updates by refreshing this page:

SEE ALSO: JPMORGAN: Tesla just undermined Elon Musk's defense against the SEC

1:30pm: Elon Musk arrives in court

Elon Musk, clad in a dark suit and tie, showed up to the hearing in Lower Manhattan around 1:30 pm, and was spotted in the security line to enter the courthouse. 

"I have great respect for the jugdes and the justice system, and I think that judges... the American system are outstanding," Musk said on his way in, according to Reuters. 

Tweet Embed:
//twitter.com/mims/statuses/1113856552493035520?ref_src=twsrc%5Etfw
.@Lebeaucarnews: "What about the SEC?"@elonmusk: pic.twitter.com/cv5uqZVOFQ

"We love you Elon," some fans yelled as he made his way from a White Tesla car up the steps of the courthouse. 



2pm: The hearing has kicked off

Judge Alison Nathan took the bench at the hearing's scheduled start time, according to Bloomberg. Each side — Musk and the SEC — will have 45 minutes for oral arguments. 

The courtroom is completely full, with 40-50 spectators overflowing into the jury stalls. 

 



2:10pm: SEC argues Musk does not intend to comply with the settlement

Cheryl Crumpton, representing the SEC, said "it's become pretty clear over the course of the last few weeks" that Musk never intended to comply with the settlement. 

"Unless something is obviously immaterial it needs to get pre-approval," she said in response to questions from the judge about what kind of tweets require pre-approval.

"Tesla still appears to be unwilling to exercise any meaningful control over the conduct of its CEO," she said.



See the rest of the story at Business Insider

Cook with the PowerStove #Nigeria powered by thermoelectric technology

Thu, 04/04/2019 - 1:02pm  |  Timbuktu Chronicles
From Tekedia:
View this post on Instagram

A post shared by Powerstove (@powerstove) on Sep 14, 2018 at 8:22am PDT

Okey Esse, a Nigerian, came up with an innovation to bring smart sustainable cooking to African households. His company Powerstove, is a revolutionary cooking stove technology which merges thermoelectric technology with the traditional African cooking experience.More here

How Mesh Networks and Crypto Can Fill the Rural Broadband Gap

Thu, 04/04/2019 - 12:19pm  |  Timbuktu Chronicles
Corin Faife writes:
...Althea (covered earlier) promotes mesh networks by providing custom firmware to run on internet routers, and an experienced team to help with the process of getting new networks off the ground.

Here’s the concept: In everyday internet usage, the local network structure we most commonly encounter is a “star network,” where each end-user device (also known as a node) connects to a central hub which controls all of the functions of the network, like a home wifi router managing traffic from a laptop, smartphone, connected TV, and so on.

But this isn’t the only way a network can be organized. When set up correctly, multiple routers can connect directly to one another and cooperate to route data through the network efficiently in a mesh configuration. This network topology can be seen in many well-designed offices, where a main router is connected to the external wired internet connection, and shares this connection wirelessly with a number of satellite routers distributed through the space.

There’s no need for a subscription either, as payments are made directly in cryptocurrency.

Effectively, Althea extends this same principle to internet-sharing in communities that are badly served by existing ISPs, helping them to set up their own decentralized internet services (see a demo here). The aim is for community members to pool their resources and buy a commercial grade internet connection, then distribute the bandwidth over a local mesh, which works out at better value than if each had purchased an individual home broadband package. More here

#Myanmar ’s Entrepreneurs Show How to Build Hydro Power Without Outside Help - No international donors. No NGOs. No government support. They just got out there and did it - @engineer4change

Thu, 04/04/2019 - 9:37am  |  Timbuktu Chronicles
Engineering for change reports
U Sai Htun Hla is an engineer and businessman. He breaks into a grin and sweeps his hand expansively as he welcomes us into his workshop – a large open-sided barn deep in the countryside, near the town of Pyin Oo Lwin in central Myanmar. Inside, idle machines and tools stand, waiting for his team to roar them into life to manufacture micro-hydropower turbines...[more]

Food & Beverage products from Savannah Brands Kenya

Thu, 04/04/2019 - 8:38am  |  Timbuktu Chronicles
View this post on Instagram

A post shared by Nairobi Nibbles (@nairobinibbles) on Oct 31, 2018 at 8:43am PDT

Based in Kenya, Savannah Brands is looking to launch a variety of product ranges in the juice, cider and snack categories.

Jomo Tariku - Furniture Designer

Thu, 04/04/2019 - 8:26am  |  Timbuktu Chronicles
A profile in Elle Decor:

View this post on Instagram

A post shared by Jomo Tariku (@jomofurniture) on Apr 3, 2019 at 7:47am PDTIn "60 Seconds With," ELLE Decor editor Charles Curkin chats with creatives and industry leaders, getting the scoop on their life and work in one minute or less. In this installment, he chats with Jomo Tariku, the Kenya-born, Virginia-based Ethiopian furniture designer and founder of Jomo Furniture...[more]

Jomo Tariku - Furniture Designer http://www.jomofurniture.com/

Thu, 04/04/2019 - 8:26am  |  Timbuktu Chronicles
A profile in Elle Decor:

View this post on Instagram
A post shared by Jomo Tariku (@jomofurniture) on Apr 3, 2019 at 7:47am PDTIn "60 Seconds With," ELLE Decor editor Charles Curkin chats with creatives and industry leaders, getting the scoop on their life and work in one minute or less. In this installment, he chats with Jomo Tariku, the Kenya-born, Virginia-based Ethiopian furniture designer and founder of Jomo Furniture...[more]

Cooked Legumes on demand from Nairobeans #Kenya

Thu, 04/04/2019 - 8:20am  |  Timbuktu Chronicles
View this post on Instagram

A post shared by Nairobeans Co.| (@nairobeans) on Mar 2, 2019 at 1:30am PST

Nairobeans is all about enabling its clients to make room for legumes in their day to day meals by providing a variety of hygienically boiled legumes

@Farmcrowdy Group Launches Farmgate Africa - An Agricultural Commodity Trading Platform

Thu, 04/04/2019 - 8:16am  |  Timbuktu Chronicles
From the Farmcrowdy Blog:
Farmgate Africa is a company focused on providing major processors and international buyers the opportunity to purchase commodities directly from local farming clusters. The platform seeks to bring farmers closer to processors and off-takers by eliminating the layers of intermediaries...[more]


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