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Hedge funds are failing left and right and billionaire investors say the carnage has only gotten started

Mon, 07/01/2019 - 2:23pm  |  Clusterstock

  • Hedge funds got out to a roaring start in 2019, but have slipped since, with the average fund underperforming the overall market.
  • Investors, many of whom put up with net losses in their hedge fund portfolios last year, have been pulling money by the billions. 
  • More hedge funds were liquidated than launched in the first quarter of the year, the third quarter in a row that has happened, and this year has lacked the mega-launches that dominated last year's headlines. 
  • Click here for BI Prime stories

The $3.2 trillion hedge fund industry is not having a good time so far this year. 

While investors going into 2019 were optimistic about their hedge fund portfolios, the industry's underperformance — returning 5.3% on average through May compared to the S&P returning nearly 10% during the same time — has led to more than $25 billion in redemptions, according to data tracker eVestment. 

These poor returns have coincided with investor demand for lower fees and increased transparency, simultaneously pushing long-time players out of the space while raising the bar for new entrants

"The industry is enduring a consolidation drive primarily by the ability, or inability, of managers to produce returns in-line with investor expectations," according to an eVestment report. 

Aspiring hedge fund founders have not been encouraged to try their hand as more hedge funds were liquidated in the first quarter than launched, according to Hedge Fund Research. It was the third straight quarter the total number of funds have declined.

See more: JPMorgan's Highbridge Capital is unwinding a $2 billion fund and now turning to investor demand for credit

Unlike last year, 2019 has not matched big-name liquidations with big-name launches. Billionaire David Tepper is returning outside capital as he shifts his well-known hedge fund, Appaloosa, into a family office. However, there are no launches yet scheduled for this year to match the assets or hype of Michael Gelband's ExodusPoint or Daniel Sundheim's D1 Capital Partners going live last year.  

So far, the biggest expected launches this year are coming from Citadel alumni, like Jack Woodruff, Mike Rockefeller, and John Graham, the biggest of which — Woodruff's coming fund and Rockefeller's Woodline Capital —are expected to launch with roughly $1 billion. Last year, Gelband set the record for the biggest launch with $8 billion. 

For new launches to be successful, significant day one assets are needed, even for managers with the best connections.  A recent report by Goldman Sachs' prime brokerage desk found that hedge funds with less than $250 million had less than a 50-50 chance of surviving their first three years of trading. Meanwhile, those that start with more than $1 billion in assets are able to make it past the three-year mark 84% of the time. 

See more: A $10.5 billion fund at Canyon Partners has loaded up on cash amid a shaky stock market

Still, industry giants expect the ongoing consolidation to continue. Billionaire Stan Druckenmiller said that there's only five to 10 people worth the fees hedge funds charge, and Oaktree Capital founder Howard Marks believes young investors don't have the same opportunities to start funds like he and others did decades ago.

"We need to get to back 200 or 300" funds, Druckenmiller said at a New York Economic Club event last month

See more: Inside the hellacious hedge fund money-raising environment, where 'even the big funds have to get creative'

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NOW WATCH: Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life

The 2 best online banks are fee-free, easy to use, and help you earn way more on your money

Mon, 07/01/2019 - 2:16pm  |  Clusterstock

There's no better time to be banking online.

For the second year, Ally has been ranked the best online bank by personal-finance magazine Kiplinger. Capital One 360, Capital One's online arm, was the runner-up. Ally was also named the top bank for a "no-fee, no-fuss" experience for customers in their 20s and 30s, following up its best bank for millennials trophy in 2018.

Both Ally and Capital One offer a suite of attractive savings and investment accounts that help customers earn more on their money with no monthly fees and, in Ally's case, low minimum balance requirements. Plus, their websites and accompanying mobile apps are easy to use, giving customers access to their accounts anytime, anywhere.

A stand-out favorite among super savers and financial planners alike, Ally's high-yield savings account earns a 2.10% annual percentage rate (APY) on as little as $1. Ally's money-market account earns 0.9% on balances under $25,000, while its interest-bearing checking account earns 0.1% APY for balances below $15,000 and 0.6% for higher balances.

Ally's high-yield CD earns even more — the 1-year term CD currently touts a 2.55% APY and the 5-year CD has a 2.85% APY on all balance tiers. A CD, or certificate of deposit, is a type of savings account with a fixed interest rate and term ranging from three months to five years. You typically can't access the money without penalty until the term is up, but Ally also offers a no penalty CD and a "raise your rate" 2-year or 4-year CD, with a 2.50% starting APY and the opportunity to increase your rate during the term.

You can also invest in mutual funds, ETFs, stocks, and bonds through Ally's self-directed trading option or a professionally managed portfolio with a minimum initial deposit of $100.

The online-only bank operates no brick-and-mortars, but that's not a problem. Savings account customers can make withdrawals for free from 43,000 in-network ATMS around the US, and Ally reimburses up to $10 in ATM fees per statement cycle for an out-of-network ATMs. You can also link your Ally account to five digital payment apps, including Apple Pay and Google Pay. The only thing you can't do is deposit cash.

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Runner-up Capital One offers a solid checking account, earning 0.2% on balances below $50,000 and 0.75% on balances up to $100,000, and a savings account earning 1% on all balance tiers. The bank also has competitive offerings in the high-yield savings realm, but the best rates require higher balances. For Capital One's money-market account, you need at least $10,000 to earn the 2% APY; any balance under $10,000 earns 0.85%.

Capital One offers the best of both worlds — virtual and otherwise. The bank has an easy-to-use website and mobile app and about 500 physical branches around the US, plus more than two dozen Capital One Cafés, where customers can deposit and withdraw cash, grab a cup of coffee, sit on a couch, and, if they want, get coached through their money problems by professionals for free.

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NOW WATCH: Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life

Goldman Sachs' Marcus is lowering interest rates on its savings account for the first time as Wall Street prepares for a potential Fed rate cut

Mon, 07/01/2019 - 2:12pm  |  Clusterstock

  • Marcus, Goldman Sachs' Main Street banking arm, is cutting interest rates on savings accounts from 2.25% to 2.15%. 
  • Marcus follows Ally, which is the only other high-yield savings account that has cut its rates. This is the first time rates have been cut for either account. 
  • The move comes after the Fed decided not to cut interest rates last month, but hinted that rate cuts will come later this month.
  • Click here for the latest news about Goldman Sachs.

Customers flocked to Goldman Sachs' digital bank Marcus because of its super-high savings rates. Now, the bank is pulling back in preparation for a potential rate cut by the Fed. 

Goldman told Marcus customers last Thursday it would be dropping rates from 2.25% to 2.15%. For every $1,000 invested in a Marcus account, this change will cost a customer only about $1 a year in interest.

Marcus was launched in October 2016. The service, named after one of Goldman's founders, Marcus Goldman, offers fixed-rate, no-fee consumer loans and a high-yield savings account. A savings account was launched in the UK in 2018.

Marcus joined a competitive field of other high-yield savings accounts with minimal fees, but quickly established itself as one of the most popular. By late 2018, Marcus had amassed $35 billion in deposits.

Marcus' interest-rate cut was preempted by competitor Ally, which announced a rate cut from 2.2% to 2.1% last Tuesday. This is the first time either bank has cut interest rates since launching. At the time of writing, no other high-yield accounts have cut their interest rates thus far. 

See more: Goldman Sachs execs are opening up about their plans for Marcus, and they think it can do to banking what iTunes did to the music industry

The move comes after the Fed decided not to cut interest rates last month, but hinted rate cuts will come later this month. CME's FedWatch has rated the likelihood of a rate cut as 100%. By preemptively lowering their rates now, Ally and Marcus are protecting their profits in advance of when the Fed's rates likely fall. 

According to a statement provided by Goldman spokesperson, the cut was a result of "market conditions."

"Our online savings account remains more than 4X the national average," the spokesperson said. 

Goldman also cut interest rates on Marcus's certificate of deposit (CD) products, following a general trend among CD providers. According to a survey completed by DepositAccounts, CD rates have been falling across the board, including at Marcus's competitor Ally.

Read more: A Goldman Sachs Marcus exec explains why Apple is the perfect partner for their new credit card

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Markets Live: Monday, 1st July 2019

Mon, 07/01/2019 - 6:10am  |  FT Alphaville

Live markets commentary from FT.com

Continue reading: Markets Live: Monday, 1st July 2019

All of uBiome’s top execs are out at the embattled poop-testing startup that’s at the center of an FBI investigation

Sun, 06/30/2019 - 7:26pm  |  Clusterstock

  • All three top leaders at microbiome-testing startup uBiome have left their posts, according to an internal memo obtained by Business Insider.
  • Company cofounders and co-CEOs Jessica Richman and Zac Apte resigned from the company's board of directors. They had previously been suspended from their CEO roles.
  • John Rakow, uBiome's general counsel and interim CEO as of May 1, has also departed.
  • Founded in 2012, uBiome raised $105 million from investors on the promise of exploring the "forgotten organ" that is the microbiome.
  • In April, the FBI raided uBiome's headquarters, reportedly related to the company's billing practices.
  • 3 new people will now serve as uBiome's interim CEO, CFO, and COO: Curtis Solsvig, Robin Chiu, and Karthik Bhavaraju.
  • All 3 hold director positions at management consulting firm Goldin Associates.
  • Click here for more BI Prime stories.

All three top execs at uBiome are out after a tumultuous few months at the poop-testing startup.

Jessica Richman and Zac Apte, the company's cofounders and co-CEOs, have resigned from the company's board of directors, according to an internal memo obtained by Business Insider on Sunday. John Rakow, uBiome's general counsel and interim CEO as of May 1, has also left the company, the memo said.

Both Apte and Richman had previously been suspended from their positions as executives of the company. The pair "will have no role in the company going forward," read the memo, sent to investors by uBiome's board.

In a message sent to Business Insider, Rakow said he resigned to spend more time with family.

It has been a hectic stretch for once-buzzy uBiome, which garnered a $600 million valuation on the promise of helping people understand the bacteria in their body, called the microbiome. In April, the FBI raided the company's San Francisco headquarters, reportedly as part of an investigation into the company's billing practices.

Read more: uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here's the inside story.

uBiome's new executives

Three new people will now serve as uBiome's interim CEO, CFO, and COO: Curtis Solsvig, Robin Chiu, and Karthik Bhavaraju, the memo said. All three are directors at consulting firm Goldin Associates.

In May with Rakow at the helm, uBiome told investors it was launching an internal investigation into the billing problems that reportedly drew the FBI's attention. To lead the probe, the company hired former federal prosecutor George Canellos, a partner at the law firm Milbank. Goldin, the management firm, was brought in to review uBiome's operations and strategy, according to the memo.

The FBI's April search involved "several other US and California governmental agencies," including the US Attorney's Office for the Northern District of California, Rakow said in a letter he sent investors on May 8.

One of Rakow's top goals for uBiome included "restoring the company's credibility, including restoring the integrity of uBiome's leadership and billing practices," he said in the letter.

Rakow also told investors that the company's key products still had value, and that uBiome had plans to "demonstrate this clinical utility and value at a time of growing demand in the market."

Most of uBiome's tests work by having customers use a swab to take a sample of their poop from used toilet paper.

High-profile Silicon Valley investors bet on uBiome

For five years, uBiome only sold tests that people could buy directly. These tests didn't involve a doctor. They were portrayed as fun, personal experiments. But starting in 2017, uBiome began selling two new tests. These tests provided medical-grade health insights, uBiome said. They required a doctor's approval and would be covered by insurance, the company claimed.

It was around this time that uBiome began to attract the attention of several high-profile Silicon Valley investors. Signs of trouble also emerged. 8VC, known for backing successful biotechs including the cancer-testing company Guardant Health, led a $16 million funding round at the end of 2016. OS Fund, the firm created by Braintree founder Bryan Johnson, spearheaded an $83 million round in 2018.

Then in April, the FBI raided the company's headquarters, reportedly as part of an investigation into how it was billing customers and insurance companies for the tests. Days later, co-CEOs and cofounders Apte and Richman were placed on leave.

Read the full memo

Here's the full memo uBiome's board sent to shareholders on Sunday.

Dear uBiome Shareholder:

Thank you for your patience during a challenging period for the company. Despite recent events, we believe uBiome has a strong foundation upon which to build a successful global business. We are committed to doing everything we can to make uBiome successful in an effort to drive shareholder value. Toward that end, we are sharing with you the following company updates and important actions we are taking to enable necessary reforms and restructuring that will serve the interests of all of uBiome's stakeholders.

Jessica Richman and Zac Apte, the company's founders, have resigned from the company's board of directors. They had previously been suspended from their positions as executives of the company. They will have no role in the company going forward.  John Rakow, the company's former general counsel who has been serving as interim CEO, has left the company, as well.

In May, the Special Committee, led by Kimmy Scotti, engaged Goldin Associates, a leading management consulting firm, to conduct a rigorous review of uBiome's business operations and strategy. Goldin Associates is assisting in the implementation of a go-forward plan to position the company for sustainable growth and profitability. Curtis Solsvig, Robin Chiu and Karthik Bhavaraju,  directors at Goldin who have been embedded with the company for the past month, will serve as interim CEO, CFO and COO, respectively.

The Board has also identified and recruited two highly skilled executives with deep experience guiding companies in complex situations to join the company's board of directors. They are welcomed independent voices, and their expertise and talent will be helpful to guide the company as it prepares for its next chapter.  Their names and bios will be released in the coming week. 

Finally, as you know, George Canellos, a partner at Milbank, former senior federal prosecutor and co-director of the SEC's Division of Enforcement, has been leading an independent review into the company's past billing practices. Milbank has concluded the first phase of its investigation and provided a preliminary report of its findings to the Department of Justice to assist the government with its own investigation. The company will continue to actively cooperate with the government.  As the investigation is ongoing, it would be inappropriate to comment in detail about Milbank's findings.

We believe that uBiome's new leadership and independent board members will not only add exceptional operational and industry-specific expertise to the company, but will also lead and guide with integrity as they execute the company's new long-term growth strategy. In the coming weeks, we look forward to providing additional details on this long-term strategic growth plan.

Though the developments of the past few months have been unexpected and disappointing, we continue to believe in the underlying value of uBiome's technology at a time of growing demand in the market. We are also confident that uBiome now has the right team and ethical footing in place to move forward as a stronger company.

Best,

The Special Committee of the Board of Directors of uBiome

Want to tell us about your experience with uBiome? Email ebrodwin@businessinsider.com.

DON'T MISS: uBiome's founder presented herself as years younger than she was, in the latest sign of trouble at the $600 million poop-testing startup

SEE ALSO: uBiome convinced Silicon Valley that testing poop was worth $600 million. Then the FBI came knocking. Here's the inside story.

Join the conversation about this story »

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'Toy Story 4' wins the box office for a second-straight weekend, but performs weaker than previous Pixar sequels (DIS)

Sun, 06/30/2019 - 12:17pm  |  Clusterstock

  • "Toy Story 4" won the domestic box office for a second-straight weekend with a $57.9 million take.
  • However, it's below the second weekend performances of other big Pixar sequels like "Incredibles 2," "Finding Dory," and "Toy Story 3."
  • Warner Bros.' "Annabelle Comes Home" had a strong opening, as the horror came in second place with $31.2 million (since opening on Wednesday).
  • "Annabelle Comes Home" is the latest hit for a movie in "The Conjuring" universe.
  • Visit Business Insider's homepage for more stories.

It seems the narrative playing out for Disney/Pixar's "Toy Story 4" is: " It's a big money maker — but..."

Last week the latest movie in the treasured franchise opened number one at the domestic box office with a $120 million performance ($238 million globally). It's one of the biggest opening weekends for an animated movie ever and is the fourth-biggest opening of 2019 (all four are Disney releases). But, industry projections had the movie taking in $140 million-plus, domestically.

This weekend "Toy Story 4" repeated as domestic box office champ, bringing in an estimated $57.9 million (its global take is now over $496 million). But, that's below the second-weekend performances of previous big Pixar sequels like "Incredibles 2" ($80.3 million), "Finding Dory" ($72.9 million), and "Toy Story 3" ($59.3 million).

Read more: "Avengers: Endgame" is getting rereleased to theaters, but experts say beating "Avatar" for the box-office record isn't certain

In no way is Disney going to regret dusting off the "Toy Story" franchise — despite not living up to lofty industry expectations — but it is another indication that the 2019 theatrical slate isn't grabbing audiences as much as the record-breaking 2018 line-up. 

"Toy Story 4" also faced strong counter-programming competition from Warner Bros.

"Annabelle Comes Home," the triquel in the horror franchise which is part of "The Conjuring" universe, came in second place at the domestic box office with $31.2 million, since its opening on Wednesday ($20.3 million over the weekend). It's another win for the franchise that explores the adventures of paranormal investigators, Ed and Lorraine Warren.

Budgeted between $27 million - $32 million, the movie has already made a profit in its first weekend, along with its strong domestic take it has brought in over $20 million internationally to have a global cume of over $50 million. 

 

SEE ALSO: "Spider-Man: Far From Home" is already off to a strong start in China, and it shows why Marvel is a more valuable franchise than "Star Wars"

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Here's exactly how to get the cheapest life insurance policy online

Sun, 06/30/2019 - 11:00am  |  Clusterstock

Life insurance isn't something you should put off.

It's an ideal time to get life insurance if you're newly married, earning a high salary, or starting a family. If anyone relies on your income for their financial well-being, whether a spouse, children, aging parents, or anyone else, you probably need life insurance. Plus, usually the younger you are, the better the rate you lock in on a fixed-rate policy.

Life insurance policies come in many different varieties, though, and navigating the fine print to find the right one for you can be intimidating. You also want to make sure you're getting the best deal, money-wise. For most people, experts recommend term life insurance because it's cheap and simple. 

"You purchase a policy for a set term — usually 10 to 30 years — and during that term you pay premiums to keep your coverage active," explained Logan Sachon, an insurance editor at insurance-comparison site Policygenius. "If you die during the term, your beneficiaries receive a death benefit. If you don't die during the term — the preferred outcome — your coverage ends when your term expires and you don't get any money back."

How much you pay depends on how much coverage you want, the type of policy you get, and how much risk you pose. The average person can expect to pay between $300 to $400 a year for life insurance, according to Policygenius, but it really depends on your situation.

How to get cheap life insurance

If you're signed up for group life insurance through work, you only need to supplement that amount with an individual policy. Many companies offer life insurance coverage for employees, but it's usually a multiple of annual salary and not enough to replace income for a family. The policy is often free and the money is guaranteed, so it's typically worth taking.

Some employers offer supplemental life insurance to make up the difference, but it's smart to compare rates for additional coverage through a third-party broker.

Below, we'll take you through a rate comparison and application process on Policygenius:

1. On Policygenius.com, you can find, compare, and buy several types of insurance. For life insurance, click the "life" box.

2. There's no commitment required to get quotes for your monthly premium. You won't have to enter your name, email, and phone number until after you've browsed through the policy options.

3. You can choose either "less support" or "more support" from the Policygenius team to navigate the life insurance application.

4. Life insurance premiums are based in part on where you live, so the site immediately wants to know your ZIP code so it can find insurers in your area. You'll also need to provide your gender, date of birth, citizenship status, and relationship status.

If you do have a significant other or spouse, the site will offer to help find quotes for both of you to save some time.

5. Next you need to provide some basic information about your health: your height, weight, whether you smoke tobacco, whether you have been treated or take medication for depression, high cholesterol, drug abuse, or another serious condition. You'll also need to disclose any serious medical diagnoses of close blood relatives.

Many insurers consider your driving record in determining your risk level, too, so there's a question regarding accidents and tickets.

The more detailed you are in answering these questions, the more accurate your quotes will be.

6. If none of the serious medical conditions listed apply to you, Policygenius says "you're in demand" and will probably have some low premiums to choose from.

7. If you answered "yes" to the question about your family's health history, you'll be prompted to give more information so that your quotes will be as accurate as possible, though additional details are not required to move to the next step.

8. Next, you need to select a coverage amount and term length.

Within each box, Policygenius provides some guidance to help you choose your coverage amount ...

... and term length. You'll have the opportunity to adjust these numbers later if you change your mind.

9. The next page will bring up several policy options, organized by the premium. Policygenius highlights the same features of each policy, including financial strength and customer service of the insurer.

Policygenius is sure to remind you that any option it's offering is a good one.

10. From there, you can check the "compare" box on two or more policies to see how they stack up against one another.

There's a section breaking down and comparing the "fine print," too. As you can see, most of the policies are the same — the biggest difference is monthly cost. At the bottom of the page, Policygenius provides its own recommendation.

11. Once you choose a policy, you're ready to apply. This is where you fill in your personal information.

12. Before you can submit the application, you have to provide your address and income for a Policygenius representative to verify.

Once you click "submit," you'll see your own dashboard with the status of your application. 

13. You should get a call from Policygenius within minutes to verify your information. From there, your Policygenius representative will schedule your medical exam — this is required for everyone who wants to buy a life insurance policy — and answer any questions you have.

14. You can check the progress of your application through the online dashboard. In many cases, the medical exam is done by a nurse who will come to your office or home at the expense of the insurance provider. It's very similar to a physical you would get at your primary care doctor's office. Once the medical exam and underwriting process is complete, you can e-sign your policy via computer or phone.

Ready to compare policies? See your offers for free with Policygenius »

Join the conversation about this story »

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Tech execs in $400 sneakers and Instagram influencers in $6,000 Louis Vuitton windbreakers: 5 ways wealthy millennials are turning to 'uniforms' to cement their identity and status

Sun, 06/30/2019 - 10:07am  |  Clusterstock

What you wear can say a lot about who you are.

Look no further than wealthy millennials — who wear specific styles, clothes, and brands to represent their identity and cement their status — to see the psychology of fashion in action.

Business Insider took a look at five different "uniforms" that various groups of wealthy millennials have adopted.

Read more: From Converse to Air Jordans, sneakers have been a status symbol for decades — but millennials are redefining what that means in 3 major ways

While each uniform is different, they do share a few commonalities: Most involve an expensive shoe, and all are rooted in millennials' love of comfort and preference for a casual appearance. And while these looks are presented here as separate uniforms, some of the staples appear across different groups. They're also not exclusive to wealthy millennials — each look is part of fashion's trickle-down effect, in which trends make their way from runway to retail and the mass consumer.

From the tech CEO to the Instagram influencer, see what rich millennials are wearing.

SEE ALSO: A $500 pair of sneakers is one of the latest status symbols at USC frat parties, and it highlights the massive wealth divide among students

DON'T MISS: 9 unlikely items that have become luxury status symbols among the elite

Tech CEOs and execs keep it casual and comfortable with Lanvin low-tops or Common Projects (both cost around $400 on average).

Mark Zuckerberg's signature look is the pinnacle of Silicon Valley's casual fashion. He pairs gray T-shirts and hoodies, which reportedly retail for hundreds and even thousands of dollars, with jeans and sneakers.

Like Zuckerberg, other tech CEOs and executives embrace a laid-back uniform, complete with low-top kicks like Lanvin or Common Projects, which have become a status symbol in the tech world.

Read more: From Converse to Air Jordans, sneakers have been a status symbol for decades — but millennials are redefining what that means in 3 major ways

"For many of the Valley's elite, the right pair of kicks is a trademark accessory carefully selected to convey a mix of power, nonchalance, creativity, and exclusivity," Business Insider's Avery Hartmans wrote.

Instagram cofounder Kevin Systrom has been spotted wearing $452 Lanvin low-tops and Twitter CEO Jack Dorsey has worn $1,185 Rick Owens Island Dunks, Hartmans reported.



Fashionistas wear 'ugly' clothes, like Balenciaga Triple S sneakers (nearly $900) because they're cool.

For "fashion people," status is no longer about the purse.

Balenciaga Triple S sneakers, which are worth nearly $900, have appeared on the feet of a host of editors and celebrities. The brand's speed sneakers recently made Lyst's ranking of the world's top 10 fashion products, Business Insider's Mary Hanbury reported.

In an installment of Vogue's video series, Go Ask Anna, Anna Wintour, Vogue editor-in-chief and Condé Nast creative director, commented on fashion's growing sneaker trend.

"There are sneakers everywhere," she said. "Years ago it used to be that women would wear sneakers on the subway or walking to work and then immediately would get into the office and go into their bags. That's no longer the case."

"Dropping hundreds of dollars on clumpy sneakers" is part of the "so-called 'ugly fashion' movement," wrote Hanbury. Other popular "ugly fashion" trends include Topshop's plastic knee jeans and Moschino's cape sheer overlay dress.



Brooklyn moms are all about the bohemian style, pairing Salt straps (purse straps $138 and up) with No. 6 clogs ($300 and up).

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As The New York Times reported, Brooklyn moms are adopting a bohemian style, and it exudes a subtle sort of wealth. The look features two staple elements: the Salt strap, which costs $138 and up, and the No. 6 clog, which retails starting at $300.

The bright, woven Salt straps are advertised as customizable additions to designer purses — think Gucci and Celine at $2,500 and $2,600 a piece — with price tags that already run well into the thousands of dollars, wrote Hayley Krischer for the Times.

The No. 6 clogs are part of the aforementioned "ugly-fashion" trend.

"Clogs, for their part, once the epitome of uncool and unfashionable, are now being touted as an 'ugly-chic shoe obsession' by the likes of Vogue and as a fashion 'staple' by StyleCaster," Business Insider's Lina Batarags wrote.

But they don't just make a newly chic statement.

"For moms, specifically, the No. 6 clog gives off a message that you're very much interested in comfort and not so interested in appearance," Krischer wrote for The Times.



The Instagram influencer poses in high-end streetwear designed by luxury brands like Gucci and Louis Vuitton (prices vary).

The streetwear subculture has been around for decades, originating in skate, surf, and hip-hop cultures, but social media and the rise of athleisure have recently brought it to the forefront of fashion. 

"Now that Instagram is the definitive medium for discovering fashion, traditional luxury brands like Gucci and Louis Vuitton have adopted the defining characteristics of streetwear, finding bold logos and exclusivity to be key to reaching younger generations," Benjamin Schneider, research analyst at Euromonitor International, previously told Business Insider

Streetwear styles and graphics resonate with image-obsessed millennial consumers, who like streetwear's casual and comfortable silhouettes like t-shirts, hoodies, and sneakers, Schneider said.

The consumers of luxury streetwear may be a niche group — but it's a group that carries a lot of influence on social media. While the style is seen on both women and men, it's more popular among the latter, according to Schneider.

Prices vary widely depending on brand and item, but a Louis Vuitton graphic windbreaker costs $6,550.



College students flaunt their status on campus with Golden Goose sneakers ($500 and up) and MZ Wallace backpacks ($285 and up).

Golden Goose sneakers, which typically cost around $500, but range from $445 to $1,700, are hot on college campuses across the country.

They're the latest trend among USC fraternities and sororities, reported Jennifer Medina for The New York Times. Graduates of the 2019 class at Cornell University and the University of Florida told Business Insider the brand is also popular on campus.

Some of the high-end Italian brand's sneakers have a grunge aesthetic — they come pre-distressed. Golden Goose's $530 Beige Scotch sneakers — calf-suede shoes with dirty-looking soles and taped trim at the toes — elicited accusations that the company was "mocking poverty," reported Andy McDonald of HuffPost.

On campuses like USC, status symbols like these accentuate the already existing wealth divide, Medina wrote.

P448 sneakers, which range from $265 to $315, and Common Projects shoes are also popular on campus, the Cornell graduate said, as are MZ Wallace backpacks, which feature quilted nylon and natural Italian leather and retail for $285 to $395.



I was living paycheck to paycheck with over $100,000 of debt until I made a mental shift that had been in front of me all along

Sun, 06/30/2019 - 10:00am  |  Clusterstock

  • My husband had always tried to implement a budget in our house, but I resisted. I work hard for my money, and I deserve to spend it, I thought.
  • But I was five years into my career, I was living paycheck to paycheck with over $100,000 of debt, a condo I couldn't afford, and two young children. Something had to change.
  • When we moved to a new house, I begrudgingly agreed to try a budget — and realized alarmingly quickly how much further our money went when we had a plan.
  • Now, we no longer live paycheck to paycheck and I've completely changed my thinking: I work hard for my money, and I deserve to keep it. 

Five years into my career, even though both my husband and I were making a decent combined salary, we were living paycheck to paycheck in a condo we couldn't afford. Even worse, we were upside down on that condo, thanks to the housing crash of 2008.

We were a young couple in our 30s with two kids under the age of six in tow, struggling to make ends meet each month and one paycheck away from not making good on our mortgage.

So, why was I still spending money like I was related to the Kardashians? Because I had a motto that was all wrong.

In my frustration, I'd yell to my husband "I work hard for my money and I deserve to spend it!" This was my answer every time he brought up the fact that we needed to be on a budget and live within our means.

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This was my answer to myself when I teetered on whether or not I should buy those $60 shoes that were on sale.

This was my answer every. Single. Time. And this was the direct reason why I refused to stick to a budget for years. And as a result, we were just shy from losing everything.

Everything we worked so hard for.

Despite all of this, my husband somehow was still able to save a small amount that we could use to move to a house in the suburbs. It took about three years to save enough money when it should have taken about six months, but we found the perfect house for our family. When it was time to make an offer, my husband sat me down. "If we're truly going to afford this house," he said, "we need to live within our means and stick to a budget".

Reluctantly, I agreed to be on the same page — but only because I was so excited about moving into my dream house.

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So, in good faith, I started researching and learning everything I could to start saving money on our everyday expenses, live more frugally, and pay off our debt. While the first few months were a bit rocky and filled with adjustments and tweaks, month number four came with a win.

A call from my husband telling me that we'd be able to pay all of our bills with one paycheck was an eye-opener. You mean to tell me that just by sticking to a budget and being mindful of my spending, we're able to stop the paycheck-to-paycheck cycle?

I seriously had no idea that a budget could impact my life in such a positive way. I was always under the notion that a budget was restrictive and for years I did everything I could keep that b-word out of my life.

But, now everything I thought I knew changed. Suddenly, I realized that my budget was the best thing that ever happened to my finances.

A budget wasn't restricting, it was freeing! I could finally plan how I wanted to spend my money. I knew where every dollar and cent went and it made me feel at peace.

I didn't give up everything I loved, either. I still shopped, but there was a set budget for it. I cancelled memberships we weren't using and started cooking at home more. Budgeting helped me realize what I valued in my life, and I started allocating money to the important things first, like paying off debt, family vacations, and investing in retirement.

!function(){function e(){var e=document.createElement("script"),n=document.getElementById("myFinance-widget-script"),a=t+"static/widget/myFinance.js";e.type="text/javascript",e.async=!0,e.src=a,n.parentNode.insertBefore(e,n);var c="myFinance-widget-css";if(!document.getElementById(c)){var d=document.getElementsByTagName("head")[0],i=document.createElement("link");i.id=c,i.rel="stylesheet",i.type="text/css",i.href=t+"static/widget/myFinance.css",i.media="all",d.appendChild(i)}}var t="https://www.myfinance.com/";document.attachEvent?document.attachEvent("onreadystatechange",function(){"complete"===document.readyState&&e()}):document.addEventListener("DOMContentLoaded",e,!1)}();


The more I referred to my budget and stayed focused on my new financial goals, the stronger my love for budgeting became.

And my motto gradually transformed.

My motto of, "I work hard for my money, I deserve to spend it," evolved into, "I work hard for my money, I deserve to keep it."

This is the motto I live by now, and it's something I tell myself quite often. The more I say it, the stronger I am in controlling my spending. That motto has given me more power than I could have imagined. 

Not having a budget for the first eight years of my marriage was my biggest pitfall. I don't know how we survived for so long without one. We were truly on the verge of a financial disaster and were so lucky to find our way to stable ground before more damage was done. I'm so thankful for having a patient husband who continued to push the budget talk until I was willing to listen.

Now, we're on the same page, have paid off more than $105,000 in debt, and are on our way to financial independence.

Join the conversation about this story »

NOW WATCH: MacKenzie Bezos pledged to donate more than half of her life's fortune. Here's how she went from one of Amazon's first employees to an award-winning novelist.

I moved my savings to a Capital One money market account to earn 200 times more, and it's the perfect place for my money to grow

Sun, 06/30/2019 - 9:30am  |  Clusterstock

  • I took advantage of a $500 new account bonus to move my savings for an investment property into a new money market account at Capital One.
  • With a balance of at least $10,000, this account offers a competitive interest rate with no recurring fees.
  • Keeping your savings in a different bank from your checking can help you avoid the temptation to use the funds for something else while the account value grows from monthly interest payments.

I signed up for my first savings account with what is now Capital One Bank way back in 2007. In the more than a decade since, I've always come back to this bank to protect my money while earning a competitive interest rate.

My wife and I have been saving up to buy our first ever investment property, and we picked Capital One to house our investment fund, and I don't plan on moving our cash anytime soon.

It started with a new account bonus

Banks make money by lending out money. That means they need a lot of money from depositors so they have the cash to lend out. When a bank wants to draw in a whole lot of cash quickly, it may choose to offer a bonus to new account holders who arrive with a big opening deposit.

!function(){function e(){var e=document.createElement("script"),n=document.getElementById("myFinance-widget-script"),a=t+"static/widget/myFinance.js";e.type="text/javascript",e.async=!0,e.src=a,n.parentNode.insertBefore(e,n);var c="myFinance-widget-css";if(!document.getElementById(c)){var d=document.getElementsByTagName("head")[0],i=document.createElement("link");i.id=c,i.rel="stylesheet",i.type="text/css",i.href=t+"static/widget/myFinance.css",i.media="all",d.appendChild(i)}}var t="https://www.myfinance.com/";document.attachEvent?document.attachEvent("onreadystatechange",function(){"complete"===document.readyState&&e()}):document.addEventListener("DOMContentLoaded",e,!1)}();

We amassed a $50,000 starting fund after selling stock and contributing from other savings. I dragged my feet getting the new account set up, but when I saw a deal for a $500 bonus after moving over at least $50,000, I knew where my cash would go next. I didn't move for the bonus alone, but knowing I could earn $50,000 right away sure helped make the decision an easy one.

Top tier interest rates

Capital One is of a few banks that consistently ranks near the top of nationwide bank interest rates. While it isn't at the very top, it's close enough that I'm not too worried about earning a fraction of a percent more elsewhere.

The average national brick-and-mortar bank offers far lower rates on similar accounts. Compared to the very worst payers that offer a ridiculously low 0.01%, I earn 200 times more. Compared to the national average, around 0.10%, I earn 20 times more. That's a great rate!

!function(){function e(){var e=document.createElement("script"),n=document.getElementById("myFinance-widget-script"),a=t+"static/widget/myFinance.js";e.type="text/javascript",e.async=!0,e.src=a,n.parentNode.insertBefore(e,n);var c="myFinance-widget-css";if(!document.getElementById(c)){var d=document.getElementsByTagName("head")[0],i=document.createElement("link");i.id=c,i.rel="stylesheet",i.type="text/css",i.href=t+"static/widget/myFinance.css",i.media="all",d.appendChild(i)}}var t="https://www.myfinance.com/";document.attachEvent?document.attachEvent("onreadystatechange",function(){"complete"===document.readyState&&e()}):document.addEventListener("DOMContentLoaded",e,!1)}(); Separated from other funds

Logging into my regular checking account at Charles Schwab and seeing $50,000 in cash sitting there would make it very tempting to spend rather than save my property investment fund. Separation is a good thing in some cases, as it removes that very common temptation.

While Capital One also offers an awesome checking account, Schwab is a bit more convenient for my everyday checking, so I leave my everyday cash at Schwab, and keep my savings out of sight, out of mind at Capital One.

No fees to worry about

Some traditional banks charge fees every month if you don't meet a minimum balance or minimum activity requirement. But just because something is common doesn't mean you have to deal with it. I won't put up with a bank charging me a fee for keeping below a certain dollar amount per month in a personal bank account.

!function(){function e(){var e=document.createElement("script"),n=document.getElementById("myFinance-widget-script"),a=t+"static/widget/myFinance.js";e.type="text/javascript",e.async=!0,e.src=a,n.parentNode.insertBefore(e,n);var c="myFinance-widget-css";if(!document.getElementById(c)){var d=document.getElementsByTagName("head")[0],i=document.createElement("link");i.id=c,i.rel="stylesheet",i.type="text/css",i.href=t+"static/widget/myFinance.css",i.media="all",d.appendChild(i)}}var t="https://www.myfinance.com/";document.attachEvent?document.attachEvent("onreadystatechange",function(){"complete"===document.readyState&&e()}):document.addEventListener("DOMContentLoaded",e,!1)}();

This account has no minimum balance to avoid a fee. The only fees you may run into are for uncommon activities like sending an outgoing wire transfer or expedited shipping on a replacement debit card.

To get the best rate in the Capital One money market account, thought, you'll need a balance of $10,000 or more.

Your money should make money

Don't let your money sit idle in an account that pays little to no interest. But if you have savings you may want to tap into in five years or less, the stock market is too risky. A money market savings account or high-yield savings account is the best home for this type of savings goal.

I've earned $70 to $80 per month every full month I've had the account open. Earning interest is like getting paid while you sleep. I keep that money in the account to grow my account so we can buy that investment property as soon as possible.

If you have money in a checking or savings account that isn't earning much interest, it may be time to change things up. For me, that meant moving my money to a new money market account at Capital One.

Join the conversation about this story »

NOW WATCH: Stewart Butterfield, co-founder of Slack and Flickr, says 2 beliefs have brought him the greatest success in life

It doesn't matter whether Tesla delivers 90,000 cars or 900,000 in the 2nd quarter — what's more important is whether Tesla goes mass-market or stays luxury (TSLA)

Sun, 06/30/2019 - 8:22am  |  Clusterstock

  • Tesla should report second-quarter vehicle deliveries the week of July 1.
  • Tesla missed expectations for the first quarter, but the company has guided for a rebound in Q2.
  • A fixation on Tesla deliveries is pointless. More deliveries should take a back seat to Tesla's decision about focusing on premium versus mass-market sales.
  • Visit Business Insider's homepage for more stories.

Tesla should report second-quarter vehicle deliveries next week, and a significant amount of chatter has broken out over what the number could be.

In the first quarter, Tesla delivered 63,000 cars, a drop of over 30% from the final quarter of 2018. The company wants to get back on track in Q2 and has been targeting something like 90,000.

It might not get there. The ultimate total could be between 80-90,000. At that level, Tesla would need a huge second-half finish to deliver over 400,000 vehicles in 2019 (it moved about 250,000 in 2018).

Tesla watchers are preoccupied with the Q2 numbers because Tesla stock has rebounded about 20% over the past month and it is poised for a breakout if deliveries come in at the top of the range or, perhaps, beat that 90,000 figure.

Read more: The big question about Tesla demand makes no sense. The company has created demand where there was none before.

That's a stock story, of course. Whether Tesla's business needs a 90,000-vehicle quarter or could manage just fine on 80,000 is a more useful question, and that's getting lost in the noise. A quick auto-industry lesson: most car makers, being very good at building cars, worry more about producing too many, not too few. If they overdo it, they encourage inefficient excess capacity and end up filling dealer lots with vehicles that they have to discount.

Another quick lesson: Tesla would be better-served to sell 80,000 cars if the mix of sales is high-priced; 90,000 in sales, if a chunk is cheaper vehicles, could hurt the bottom line.

Why ignore Tesla deliveries?

In any case, my argument that you should ignore Tesla's Q2 deliveries leads into a more critical question: What is Tesla's current, logical level of production and sales? (By the way, no matter where Tesla lands in Q2, numbers-wise, the total should be a big increase over Q2 2018 — Tesla is the only automaker seeing such a massive demand surge in a US market that's been running at peak levels for going on five years).

In 2018, BMW sold about 311,000 vehicles in the US. They did this with a lineup of around 18 cars and trucks (I'm excluding anything special). Tesla sold something like 200,000 vehicles in the US — but with a lineup of just three models. That comparison actually isn't one; Tesla is serving pent-up electric vehicle demand, more so than additional organic premium-demand, demand.

But the takeaway is notable: Tesla is approaching BMW-level US sales with six times fewer vehicles available.

Before you conclude that I'm about to insist that BMW is in trouble, don't. BMW isn't in trouble. But BMW serves as a useful guide to what kind of car maker Tesla should be. And in my view, that's a premium company, not a mass-market manufacturer.

Don't push for more deliveries

And in that context, Tesla shouldn't be pushing, pushing, pushing to sell more vehicles each quarter. It should align its US manufacturing capacity — perhaps 400,000 to 500,000 vehicles annually — with demand for cars that it can make a serious profit on.

If Tesla sells another 100,000 vehicles per year that it barely posts a margin on, then what's the point? I'd prefer to see 300,000 every year, with a 10%-ish margin (maybe higher).

The stock market doesn't want this right now. The stock market wants more deliveries. But I think the market could live with lower deliveries, so long as those deliveries are consistent, quarter-to-quarter and year-to-year, and so long as Tesla swings to serial quarterly profits — just like every other carmaker doing business these days.

So there you have it — all eyes are on Tesla deliveries for the second quarter, but all eyes should be on something else.

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NOW WATCH: Ford invested $500M into an electric vehicle startup. Here's how Rivian is doing exactly what Tesla isn't.

Carnival, Royal Caribbean, and Norwegian Cruise Line are in a fierce battle for domination in the cruise industry — here's how they stack up (CCL, RCL, NCLH)

Sun, 06/30/2019 - 8:15am  |  Clusterstock

Carnival Corp, Royal Caribbean Cruises, and Norwegian Cruise Line Holdings are the three dominant players in the cruise industry. Together, they accounted for nearly $6 billion in profits and over 70% of the cruise market in 2018. 

With demand for cruises expected to grow this year, the three companies will continue to battle for new customers.

Read more: The 10 nastiest cruise ships of all time

But Carnival, Royal Caribbean, and Norwegian are not identical. Each operates at a different scale that is reflected in their financial performances and market capitalizations.

This is how the cruise industry's three biggest companies stack up.

SEE ALSO: Here's how you can use your Costco membership to book a cruise

Profits

The companies reported the following full-year profits in 2018:

  1. Carnival: $3.2 billion
  2. Royal Caribbean: $1.8 billion
  3. Norwegian: $954.8 million



Number of passengers

The companies had the following number of passengers in 2018:

  1. Carnival: 12.4 million
  2. Royal Caribbean: 6.1 million
  3. Norwegian: 2.8 million



Market share

The three companies were responsible for the following percentages of global cruise-industry revenue in 2018:

  1. Carnival: 39.4%
  2. Royal Caribbean: 20.2%
  3. Norwegian: 12.6%

Source: Cruise Market Watch



Market capitalization (as of June 2019)

  1. Carnival: $33.36 billion
  2. Royal Caribbean: $25.36 billion
  3. Norwegian: $11.46 billion



Median annual pay for employees

Each company's median employee earned the following in 2018:

  1. Norwegian: $20,101
  2. Royal Caribbean: $19,396
  3. Carnival: $16,622



Number of employees

  1. Carnival: Around 154,161 (as of October 31, 2018)
  2. Royal Caribbean: Around 77,000 (as of December 31, 2018)
  3. Norwegian: Around 33,200 (as of December 31, 2018)



Number of ships

  1. Carnival: 104 (as of November 30, 2018)
  2. Royal Caribbean: 60 (as of December 31, 2018)
  3. Norwegian: 26 (as of December 31, 2018)



Number of cruise lines

  1. Carnival: 9
  2. Royal Caribbean: 6
  3. Norwegian: 3



How much their CEOs make

The three companies reported the following annual compensation for their CEOs in 2018:

  1. Norwegian: Frank Del Rio — $22,593,061*
  2. Carnival: Arnold Donald — $13,515,884
  3. Royal Caribbean: Richard Fain — $12,422,715

*For accounting reasons, Del Rio's 2018 compensation includes a 2017 stock award. Without the 2017 stock award, Del Rio would have earned $14,873,324 in 2018.



How old the companies are

  1. Norwegian: 53 years
  2. Royal Caribbean: 51 years
  3. Carnival: 47 years



Trump's tariffs may be the excuse, but Apple and other companies have plenty of additional reasons to move out of China, experts say (AAPL)

Sun, 06/30/2019 - 8:00am  |  Clusterstock

  • President Trump's tariffs have reportedly spurred Apple to explore moving production of some of its products out of China.
  • While the trade war might be the proximate cause for such a shift, there are plenty of other reasons the company might be considering such a move, supply chain experts told Business Insider.
  • Producing goods in the country has long entailed a whole host of other drawbacks, including complicated supply lines and long lead times to make sure products got to market on time.
  • In the past, such disadvantages were outweighed by the low cost of manufacturing in China, but wages have risen dramatically in recent years and new regulations have increased, making it more costly. 
  • Click here for more BI Prime stories.

Apple's reported desire to shift production outside of China has been linked to the trade war, but the iPhone maker has plenty of additional reasons to explore a move to other countries, as do many other companies.

Manufacturing in China has long had a number of drawbacks, said Bruce Arntzen, the executive director of the supply chain management program in MIT's engineering school. For years, the benefits of producing products there — most notably a large supply of low-cost labor — outweighed those shortcomings. But those advantages have now largely gone away, he said.

"Most of the reasons everyone went to China in the first place aren't there any more," Arntzen told Business Insider.

Companies in industries including apparel, footwear, aerospace, and automobile parts have already been shifting production out of China in recent years, even before President Trump started slapping tariffs on goods made in the country, he said. It's no surprise that Apple and other electronics makers would be interested in moving production too, he said.

Indeed, some have already started. Some of the Taiwanese electronics manufacturing companies have shifted a portion of their production of server computers out of China to Taiwan over the last year.

Read this: Here's why Apple's plan to escape Trump's tariffs by building iPhones outside of China won't actually be possible anytime soon

Manufacturing in China has never been easy

From day one, there have been significant downsides to manufacturing goods in China, Arntzen said.

For US companies, there were language and time zone differences, he said. The huge geographic distance between the two countries often meant long supply lines between companies' manufacturing facilities and their component makers. That in turn also often meant that they needed long lead times to start manufacturing products to make sure the goods could get to market by particular dates, he said. And those long delays meant that manufacturers couldn't respond quickly to market changes and often had to have larger inventory stashes than they would otherwise, he said.

Companies also faced rampant intellectual property theft, Arntzen said. And if they needed to speed goods to market, they'd have to ship products by air — a much costlier proposition from Shenzhen than Chicago.

"Those challenges were always there," Arntzen said.

Companies put up with such headaches because of the distinct advantages of producing in China, he said. The country had a huge pool of low-cost labor. It had little in the way of pollution controls, worker protections, or other regulations. As more factories were built there, they gave rise to an entire manufacturing ecosystem that often wasn't present and couldn't easily be duplicated anywhere else.

But China no longer offers many of those advantages, Arntzen and other supply-chain experts said. Although the country still has large pools of untapped labor in its interior, the labor market is relatively tight in the coastal areas that are home to much of its manufacturing base, he said. Worker pay has been rising and is now on par with Taiwan and other countries. And as it has become more affluent, China has started to put in place more stringent rules governing pollution and workplace safety.

"The shift to other locations is addressing the low-cost labor part" of the equation, said Abe Eshkenazi, CEO of the Association for supply chain management. "China is not low cost-labor anymore."

In that context, the Trump tariffs are like the straw that broke the camel's back. Companies already had reasons to move from China. The tariffs just made the situation more urgent.

"There has been a process underway long before these tariffs," Arntzen said.

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

SEE ALSO: Apple will be just fine without Jony Ive — sorry, Jony

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Markets Live: Friday, 28th June 2019

Fri, 06/28/2019 - 6:14am  |  FT Alphaville

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